Higher Taste, Inc. v. City of Tacoma ( 2013 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
HIGHER TASTE, INC., a Washington No. 11-36046
Non-Profit Corporation,
Plaintiff-Appellant, D.C. No.
3:10-cv-05252-
v. BHS
CITY OF TACOMA , a Metropolitan
Municipal Corporation; OPINION
METROPOLITAN PARK DISTRICT OF
TACOMA , a Department of the City
of Tacoma; EXECUTIVE DIRECTOR
JACK C. WILSON , Executive Director
of the Metropolitan Park District of
the City of Tacoma,
Defendants-Appellees.
Appeal from the United States District Court
for the Western District of Washington
Benjamin H. Settle, District Judge, Presiding
Argued and Submitted
December 5, 2012—Seattle, Washington
Filed June 3, 2013
2 HIGHER TASTE, INC. V . CITY OF TACOMA
Before: Richard C. Tallman and Paul J. Watford, Circuit
Judges, and Sharon L. Gleason, District Judge.*
Opinion by Judge Watford
SUMMARY**
Civil Rights/Attorney’s Fees
The panel reversed the district court’s denial of a motion
for attorney’s fees brought pursuant to 42 U.S.C. § 1988(b),
after determining that the district court’s preliminary
injunction in plaintiff’s favor and the parties’ subsequent
settlement agreement conferred prevailing party status on
plaintiff for purposes of an attorney’s fee award.
Plaintiff Higher Taste, Inc., brought the underlying suit
under 42 U.S.C. § 1983 seeking to continue to sell
message-bearing T-shirts on public walkways in front of and
leading to the entrance of the Tacoma Zoo. The panel held
that the district court’s preliminary injunction ruling, which
was based on a finding that Higher Taste was likely to
succeed on the merits of its First Amendment claim, was
sufficiently on the merits to satisfy the “judicial imprimatur”
requirement for prevailing party status. The panel further
held that the parties’ subsequent settlement agreement, which
*
The Honorable Sharon L. Gleason, United States District Judge for the
District of Alaska, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
HIGHER TASTE, INC. V . CITY OF TACOMA 3
allowed Higher Taste to continue selling t-shirts on the public
walkway, was sufficiently enduring to satisfy the “material
alteration of the parties’ legal relationship” requirement.
The panel remanded for the district court to determine in
the first instance whether special circumstances existed that
would render an attorney’s fee award unjust and if such
circumstances did not exist, to calculate the reasonable fee
that Higher Taste is entitled to recover.
COUNSEL
Robert C. Moest (argued), Law Offices of Robert C. Moest,
Santa Monica, California; David M. Liberman, Law Offices
of David M. Liberman, Los Angeles, California, for Plaintiff-
Appellant.
Adam Rosenberg (argued), Keating, Bucklin & McCormack,
Inc., P.S., Seattle, Washington, for Defendants-Appellees.
OPINION
WATFORD, Circuit Judge:
Plaintiff Higher Taste Inc. is a non-profit religious
organization dedicated to promoting non-violence,
community harmony, spiritual ecology, and the humane
treatment of animals. It seeks to disseminate its message and
raise funds by selling T-shirts adorned with messages related
to its spiritual mission. For years Higher Taste sold its T-
shirts at a public zoo operated by the principal defendant in
this case, the Metropolitan Park District of Tacoma, from a
4 HIGHER TASTE, INC. V . CITY OF TACOMA
table set up along the main walkway leading from the parking
area to the zoo’s entrance. This proved to be a prime
location, ensuring that a steady stream of the zoo’s
500,000–600,000 annual visitors would be exposed to Higher
Taste’s teachings.
In 2005, the Park District adopted Resolution 40-05,
which banned the sale of any merchandise near the zoo’s
entrance, along the walkways leading to the zoo’s entrance,
or in the zoo’s parking area. At first, the Park District
allowed Higher Taste to continue selling its T-shirts at the
zoo, albeit not at the prime location Higher Taste had
previously occupied. But in March 2010, the Park District,
taking an expansive view of its power under the resolution,
banned Higher Taste from selling T-shirts anywhere on zoo
grounds.
Soon thereafter, Higher Taste sued the Park District under
42 U.S.C. § 1983, requesting a declaration that Resolution
40-05 violated its rights under the First and Fourteenth
Amendments and an injunction barring the resolution’s
enforcement. The district court denied Higher Taste’s motion
for a temporary restraining order but ordered supplemental
briefing on whether it should issue a preliminary injunction.
Six weeks later, after receiving briefs and supporting
declarations from the parties, the court granted Higher Taste’s
motion for a preliminary injunction, expressly ruling that
Higher Taste had demonstrated a likelihood of success on the
merits. The court enjoined enforcement of Resolution 40-05
pending final resolution of the case, which, in the interim,
allowed Higher Taste to resume selling its message-bearing
T-shirts along the main walkway leading from the parking
area to the zoo’s entrance.
HIGHER TASTE, INC. V . CITY OF TACOMA 5
The Park District did not seek interlocutory review under
28 U.S.C. § 1292(a)(1), so the preliminary injunction
remained in effect while the litigation proceeded. Early on,
the parties agreed to suspend discovery while they engaged
in settlement discussions. After lengthy negotiations that
spanned the next sixteen months, the parties’ efforts bore
fruit. The Park District agreed to enact new regulations
allowing organizations like Higher Taste to sell message-
bearing merchandise along the main walkway leading from
the parking area to the zoo’s entrance, among other locations.
The parties executed a written settlement agreement
signed by Higher Taste, the Park District, and the other
defendants named in the action. As consideration for the
dismissal of Higher Taste’s lawsuit, the Park District agreed
to “allow Higher Taste to sell its message-bearing
merchandise (T-shirts) on the walkways . . . between the Zoo
and the parking lot, or in the parking lot areas of the Zoo,”
pursuant to the new regulations, which were attached to the
settlement agreement as an exhibit. The parties could not
reach agreement on attorney’s fees; that issue was left for the
district court to resolve by separate motion.
In accordance with the parties’ stipulation, the district
court entered an order dismissing Higher Taste’s action with
prejudice. The order did not incorporate the terms of the
parties’ settlement agreement nor provide for the court’s
retention of jurisdiction, other than over the issue of
attorney’s fees.
Higher Taste then moved for attorney’s fees under
42 U.S.C. § 1988(b), which permits an award to the
“prevailing party” in certain civil rights actions, including
those brought under 42 U.S.C. § 1983. The district court
6 HIGHER TASTE, INC. V . CITY OF TACOMA
denied Higher Taste’s motion on the ground that neither the
preliminary injunction nor the subsequent settlement rendered
Higher Taste a prevailing party within the meaning of § 1988.
We review that ruling de novo because it turns on an issue of
statutory construction—the meaning of “prevailing party.”
Carbonell v. INS, 429 F.3d 894, 897–98 (9th Cir. 2005).
A plaintiff “prevails” for purposes of § 1988 “when actual
relief on the merits of his claim materially alters the legal
relationship between the parties by modifying the defendant’s
behavior in a way that directly benefits the plaintiff.” Farrar
v. Hobby, 506 U.S. 103, 111–12 (1992). Relief “on the
merits” occurs when the material alteration of the parties’
legal relationship is accompanied by “judicial imprimatur on
the change.” Buckhannon Bd. & Care Home, Inc. v. W. Va.
Dep’t of Health & Human Res., 532 U.S. 598, 605 (2001).
Judicial imprimatur can come in the form of an enforceable
judgment on the merits or a court-ordered consent decree (the
two examples the Court gave in Buckhannon), but those are
not the exclusive means of satisfying the requirement.
Carbonell, 429 F.3d at 898; Watson v. County of Riverside,
300 F.3d 1092, 1096 (9th Cir. 2002). Other court-approved
actions will suffice, provided they entail a judicial
determination that the claims on which the plaintiff obtains
relief are potentially meritorious. See Buckhannon, 532 U.S.
at 606.
Lower courts have struggled to decide whether the
requirements for prevailing-party status are met by a plaintiff
who wins a preliminary injunction but does not litigate the
case to final judgment. The difficulty arises because
preliminary injunctive relief is sometimes issued after a
hearing that is “necessarily hasty and abbreviated,” before
any real assessment of the merits of the plaintiff’s claims can
HIGHER TASTE, INC. V . CITY OF TACOMA 7
be made. Sole v. Wyner, 551 U.S. 74, 84 (2007). And such
relief is, by its very nature, intended to be temporary. Thus,
two recurrent questions arise when making prevailing-party
determinations in this context: First, is the court’s
preliminary injunction ruling sufficiently “on the merits” to
satisfy Buckhannon’s “judicial imprimatur” requirement?
And second, has the plaintiff obtained relief sufficiently
enduring to satisfy the “material alteration of the parties’
legal relationship” requirement?
We begin with the first question, to which the answer, at
least on the facts of this case, is clear. Several circuits,
including ours, have held that a preliminary injunction
satisfies the judicial imprimatur requirement if it is based on
a finding that the plaintiff has shown a likelihood of success
on the merits. When confronted with those circumstances in
Watson v. County of Riverside, 300 F.3d 1092 (9th Cir.
2002), we held that “[a] preliminary injunction issued by a
judge carries all the ‘judicial imprimatur’ necessary to satisfy
Buckhannon.” Id. at 1096; accord Common Cause/Ga. v.
Billups, 554 F.3d 1340, 1355–56 (11th Cir. 2009); Dearmore
v. City of Garland, 519 F.3d 517, 523–24 (5th Cir. 2008).1
1
W e will put to one side so-called “stay put” or “status quo” injunctions,
which do not entail a judicial determination regarding the plaintiff’s
likelihood of success. Some circuits have held that these injunctions
cannot satisfy Buckhannon’s judicial imprimatur requirement. See
2 M ARTIN A. S CH W ARTZ & J O H N E. K IRKLIN , S ECTIO N 1983 L ITIGATIO N :
S TATU TO RY A TTO RN EY ’S F EES § 2.04, at 2-33 to 2-46.1 (4th ed. 2003 &
Supp. 2012-2) (collecting cases). Because the district court did not issue
a “stay put” or “status quo” injunction here, we need not decide whether
such injunctions should be treated differently from merits-based
preliminary injunctions.
8 HIGHER TASTE, INC. V . CITY OF TACOMA
The district court in this case expressly based its
preliminary-injunction ruling on a finding that Higher Taste
was likely to succeed on the merits of its First Amendment
claim, after a hearing that was not “hasty and abbreviated.”
Sole, 551 U.S. at 84. The court’s likelihood-of-success
finding ensures that the preliminary relief Higher Taste
obtained was the product of more than merely a
“nonfrivolous but nonetheless potentially meritless lawsuit.”
Buckhannon, 532 U.S. at 606. Thus, as was true in Watson,
the preliminary injunction satisfies Buckhannon’s judicial
imprimatur requirement. 300 F.3d at 1096.
We turn now to the second question, which involves
determining whether the relief obtained materially altered the
parties’ legal relationship. No one disputes that, at least for
the time it remains in effect, a preliminary injunction
normally satisfies this requirement. A material alteration of
the parties’ legal relationship occurs when “the plaintiff can
force the defendant to do something he otherwise would not
have to do.” Fischer v. SJB-P.D. Inc., 214 F.3d 1115, 1118
(9th Cir. 2000). That is typically the whole point of an
injunction, which is why in the usual case injunctive relief
“work[s] the requisite material alteration in the parties’
relationship.” Lefemine v. Wideman, 133 S. Ct. 9, 11 (2012)
(per curiam).
This is the usual case. Armed with the preliminary
injunction, Higher Taste forced the Park District to do
something it would not otherwise have had to do—namely,
allow Higher Taste to resume selling its message-bearing T-
shirts on zoo grounds. But that does not end the inquiry, for
the preliminary injunction issued here was intended (as in
most cases) to afford only temporary relief pending final
resolution of the case.
HIGHER TASTE, INC. V . CITY OF TACOMA 9
Precisely because the relief afforded by a preliminary
injunction may be undone at the conclusion of the case, some
inquiry into events post-dating the injunction’s issuance will
generally be necessary. For example, a plaintiff who
succeeds at the preliminary injunction stage but loses on the
merits after the case is litigated to final judgment is not a
prevailing party under § 1988; in those circumstances, she
secures only an “ephemeral” victory and gains no “enduring”
change in the legal relationship of the parties. Sole, 551 U.S.
at 86. Still, there may be circumstances in which a
preliminary injunction results in sufficiently enduring change
to warrant an award of fees, even in the absence of a final
judgment on the merits. The Supreme Court did not resolve
that issue in Sole, so we must look to circuit-level precedent
for guidance.
We have previously held that when a plaintiff wins a
preliminary injunction and the case is rendered moot before
final judgment, either by the passage of time or other
circumstances beyond the parties’ control, the plaintiff is a
prevailing party eligible for a fee award. See Watson,
300 F.3d at 1096; Williams v. Alioto, 625 F.2d 845, 847–48
(9th Cir. 1980) (per curiam); accord N. Cheyenne Tribe v.
Jackson, 433 F.3d 1083, 1086 (8th Cir. 2006); Young v. City
of Chicago, 202 F.3d 1000, 1000–01 (7th Cir. 2000) (per
curiam); Haley v. Pataki, 106 F.3d 478, 483–84 (2d Cir.
1997). In those cases, although the plaintiff never secured a
final judgment granting permanent injunctive relief, the
preliminary injunction ended up affording all the relief that
proved necessary. See Watson, 300 F.3d at 1096; Williams,
625 F.2d at 847–48. The plaintiff therefore received relief
that was as enduring as a permanent injunction would have
been and, by virtue of the case’s mootness, that relief was no
longer subject to being “reversed, dissolved, or otherwise
10 HIGHER TASTE, INC. V . CITY OF TACOMA
undone by the final decision in the same case.” Sole,
551 U.S. at 83; see also Radvansky v. City of Olmsted Falls,
496 F.3d 609, 620 (6th Cir. 2007); Dupuy v. Samuels,
423 F.3d 714, 719, 723 (7th Cir. 2005).
Other circuits have applied the same reasoning when the
plaintiff wins a preliminary injunction and the case is
subsequently rendered moot by the defendant’s own actions.
(A typical scenario: The plaintiff wins a preliminary
injunction prohibiting enforcement of a particular statute, and
the defendant renders the case moot by repealing the statute
before final judgment is entered.) In that circumstance, too,
courts have held that the plaintiff is a prevailing party under
§ 1988. See, e.g., Common Cause/Ga., 554 F.3d at 1356;
People Against Police Violence v. City of Pittsburgh,
520 F.3d 226, 233–34 (3d Cir. 2008); Dearmore, 519 F.3d at523–24. There is again no concern that the relief the plaintiff
won at the preliminary-injunction stage will prove to be
ephemeral. The defendant’s action in rendering the case
moot ensures that the injunction’s alteration of the parties’
legal relationship will not be undone by subsequent rulings in
the litigation.
The reasoning in these cases persuades us that Higher
Taste is a prevailing party here. It is true that the district
court dismissed this case upon the parties’ stipulation
following settlement, rather than upon a determination of
mootness. But the question is whether Higher Taste achieved
relief sufficiently enduring to satisfy the “material alteration
of the parties’ legal relationship” requirement. In our view,
just as mootness provided assurance in the cases discussed
above that the plaintiff’s initial victory was enduring rather
than ephemeral, so too the settlement provides that assurance
here. It transformed what had been temporary relief capable
HIGHER TASTE, INC. V . CITY OF TACOMA 11
of being undone (had the case been litigated to final
judgment) into a lasting alteration of the parties’ legal
relationship. Indeed, by securing Higher Taste’s right to
continue selling its message-bearing T-shirts along the main
walkway leading from the parking area to the zoo’s entrance,
the settlement agreement gave Higher Taste what it had
hoped to obtain through a permanent injunction. See
Williams, 625 F.2d at 847.
The Park District responds by arguing that, in actuality,
the settlement agreement did not secure any enduring relief
for Higher Taste. The Park District notes that the new
regulations it agreed to enact as part of the settlement
expressly reserved its right “to change, modify or revoke the
above Rules and Regulations if it deems it necessary.” Under
this provision, the Park District contends, it remains free to
unilaterally repeal the regulations in their entirety at any time.
The Park District undoubtedly retains the power to repeal
the new regulations it has enacted, and such action would of
course affect members of the general public who wish to sell
message-bearing merchandise on zoo grounds. But a repeal
of the regulations would have no effect on the personal right
to sell message-bearing merchandise Higher Taste secured for
itself by negotiating the settlement agreement. That
contractual right was the consideration Higher Taste received
in exchange for dismissing its § 1983 lawsuit with prejudice,
a right that would remain enforceable even if the Park District
repealed the newly enacted regulations in full. Under the
Park District’s implausible reading of the settlement
agreement, the day after the district court dismissed the
action, the Park District could have repealed the new
regulations and once again banned Higher Taste from selling
its message-bearing T-shirts anywhere on zoo grounds—in
12 HIGHER TASTE, INC. V . CITY OF TACOMA
effect putting the parties back to square one. We do not
believe the parties spent sixteen months hammering out that
illusory “agreement.”
Finally, the Park District argues that the settlement
agreement cannot confer prevailing-party status on Higher
Taste because the district court did not endorse or adopt the
settlement agreement or otherwise retain jurisdiction to
enforce it. We acknowledge that our case law suggests a
settlement agreement must be judicially enforceable to meet
Buckhannon’s judicial imprimatur requirement. See St.
John’s Organic Farm v. Gem Cnty. Mosquito Abatement
Dist., 574 F.3d 1054, 1058–59 (9th Cir. 2009). But Higher
Taste does not rely on the settlement agreement to satisfy the
judicial imprimatur requirement; the preliminary injunction
“carries all the ‘judicial imprimatur’ necessary to satisfy
Buckhannon.” Watson, 300 F.3d at 1096. Higher Taste
instead relies on the settlement agreement to establish that the
relief it won at the preliminary-injunction stage is sufficiently
enduring to satisfy the “material alteration of the parties’
legal relationship” requirement. For the reasons given above,
we conclude that the settlement agreement does so.
Because Higher Taste is a prevailing party within the
meaning of § 1988, it “should ordinarily recover an attorney’s
fee unless special circumstances would render such an award
unjust.” Hensley v. Eckerhart, 461 U.S. 424, 429 (1983)
(citation and internal quotation marks omitted); see also
Mendez v. County of San Bernardino, 540 F.3d 1109,
1126–30 (9th Cir. 2008). On remand, the district court
should determine in the first instance whether such special
circumstances exist. If they do not, the court should calculate
the reasonable fee Higher Taste is entitled to recover.
HIGHER TASTE, INC. V . CITY OF TACOMA 13
REVERSED AND REMANDED.