Buckhannon Board and Care Home v. West Virginia Department of Health & Human Resources

In Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598 (2001), the Supreme Court rejected the so-called catalyst theory, which posits that a plaintiff is a prevailing party if it achieves the desired result because the lawsuit brought about a voluntary change in the defendants conduct. Id. at 601. The Court concluded that prevailing party is a legal term of art, id. at 603, and it does not include a party that has failed to secure a judgment on the merits or a court-ordered consent decree, but has nonetheless achieved the desired result because the lawsuit brought about a voluntary change in the defendants conduct, id. at 600. Instead, there must be a material alteration of the legal relationship of the parties. Id. at 604. A party is not a prevailing party if its lawsuit does not result in a judicially sanctioned change in the legal relationship of the parties. Id. at 605. There must be some judicial imprimatur on the change. Id. In Buckhannon Board and Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001), the Supreme Court interpreted the term "prevailing party" in the fee-shifting provisions of the Fair Housing Amendments Act of 1988, 42 U.S.C. 3601 et seq., and the Americans With Disabilities Act of 1990, 42 U.S.C. 12101 et seq. Buckhannon rejected the catalyst theory under which several circuit courts, including ours, see, e.g., Chesapeake Bay Found., Inc. v. Dep't of Agric., 11 F.3d 211, 216 (D.C.Cir.1993), had held that "a plaintiff is a `prevailing party' if it achieves the desired result because the lawsuit brought about a voluntary change in the defendant's conduct," Buckhannon, 532 U.S. at 601-02, 121 S.Ct. 1835. Instead, the Court held, a plaintiff is a prevailing party only if he has "received a judgment on the merits" or secured a settlement agreement enforced by a consent decree. Id. at 605, 121 S.Ct. 1835. Thus, a defendant's "voluntary change in conduct, although perhaps accomplishing what the plaintiffs sought to achieve by the lawsuit, lacks the necessary judicial imprimatur on the change." Id. In Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health and Human Resources, 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001), the Supreme Court made clear that a party must "receive at least some relief on the merits of his claim before he can be said to prevail," such that the relief "materially alters the legal relationship of the parties." Id. at 604, 121 S.Ct. 1835. Further, the change in the relationship must be "judicially sanctioned." Id. at 605, 121 S.Ct. 1835. In Buckhannon, the Supreme Court considered the legislative history of the ADA and the Fair Housing Amendments Act ("FHAA"), but concluded "that the legislative history of those two statutes could not overcome what . . . is the rather clear meaning of prevailing party." Buckhannon, 532 U.S. at 607, 121 S.Ct. 1835. In fact, even though the legislative history of 1988 explicitly stated that the term "prevailing party" was not intended to be limited to those acquiring a judgment on the merits, the Court concluded that some form of judicially-sanctioned relief was required to support an award of fees. The Court held that the legislative history of the ADA and FHAA was "at best ambiguous as to the availability of the `catalyst theory.'" Id. at 608, 121 S.Ct. 1835. In Buckhannon Board and Care Home, Inc. v. West Virginia Department of Health and Human Resources, 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001), the Court rejected the previously widely followed catalyst theory that posits that, for purposes of determining an award of attorneys' fees, a plaintiff prevails if he achieves the desired outcome of litigation even if it results from a voluntary change in the defendant's conduct. Id. at 600, 121 S.Ct. 1835. Rejecting the catalyst theory, the Buckhannon court emphasized that in order to be deemed a prevailing party, there must be a "material alteration in the legal relationship of the parties"-that is in the form of an enforceable judgment or court-ordered consent decree. It could not be clearer that a voluntary settlement by the defendant-the precise situation presented here-does not entitle a plaintiff to attorneys' fees. Id. at 606, 121 S.Ct. 1835. In Buckhannon Bd. and Care Home, Inc. v. W. Va. Dep't of Health and Human Res., 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001), the Supreme Court rejected the so-called "catalyst theory," which maintained that a plaintiff obtained relief on the merits if the plaintiff achieved its desired result due to the defendant's voluntary change in conduct. Buckhannon, 532 U.S. at 600, 121 S.Ct. 1835. In rejecting this theory, the Court explained that the critical focus is not on the defendant's voluntary change in conduct, but rather whether there is a "judicially sanctioned change in the legal relationship of the parties." Id. at 605, 121 S.Ct. 1835. The Court held that a defendant's voluntary change in conduct, even if it accomplishes what the plaintiff sought to achieve, lacks the necessary "judicial imprimatur on the change." Id. In Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Resources, 532 U.S. 598, 601, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001), the Supreme Court held that "prevailing party" fees could not be awarded to a party "that has failed to secure a judgment on the merits or a court-ordered consent decree," even though its efforts had "achieved the desired result because the lawsuit brought about a voluntary change in the defendant's conduct." The Court concluded that, to be a "prevailing party" for purposes of 42 U.S.C. 1988(b), a party must secure some material alteration in the legal relationship between the parties, and that being a "catalyst" for change does not suffice. In Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598, 603, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001), the Supreme Court stated that a party only prevails upon receipt of "a judgment" which provides "some relief on the merits of their underlying claim." 532 U.S. at 603, 121 S.Ct. 1835. The Court dismissed a case because the state legislature changed the law and thus rendered the claim moot. Id. Buckhannon argued that litigation had served as a catalyst for the change in law and this dismissal. Id. at 601-02, 121 S.Ct. 1835. To the contrary, the Supreme Court found the catalyst theory insufficient because "it allows an award where there is no judicially sanctioned change in the legal relationship of the parties." Id. at 605, 121 S.Ct. 1835. In Buckhannon Bd. & Care Home, Inc. v. W. Virginia Dep't. of Health and Human Res., 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001), the Supreme Court defined a prevailing party as "a party in whose favor a judgment is rendered, regardless of the amount of damages awarded." 532 U.S. at 603, 121 S.Ct. 1835 (quoting Black's Law Dictionary 1145 (7th ed. 1999)). In holding that a plaintiff was not entitled to an award of attorneys' fees when the lawsuit had been dismissed as moot, even though it appeared that the suit had induced the legislation that rendered the action moot, the Court explained that a "material alteration of the legal relationship of the parties" is necessary to permit the award. Id. at 604, 121 S.Ct. 1835 (quoting Texas State Teachers Ass'n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792-793, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989)). The Court gave two examples of judicial outcomes that satisfy this requirement: an enforceable judgment on the merits or a settlement agreement enforced through a court-ordered consent decree. Id. An enforceable judgment establishes a plaintiff as a prevailing party because the plaintiff has received at least some relief based upon the merits of a claim. Id. A consent decree also passes the test because "although it does not always include an admission of liability by the defendant, ... it nonetheless is a court-ordered `change in the legal relationship between the plaintiff and the defendant.'" Id. (quoting Texas State Teachers at 792, 109 S.Ct. 1486). In Buckhannon Bd. & Care Home v. W. Va. Dep't of Health & Human Res., the Supreme Court limited the meaning of the term "prevailing party," by rejecting the catalyst theory as a method of attaining prevailing-party status under the Americans With Disabilities Act ("ADA") and Fair Housing Amendments Act ("FHAA"). 532 U.S. at 605, 121 S.Ct. 1835. Under the catalyst theory, which had been accepted by many courts before Buckhannon, a plaintiff could prevail, if the plaintiff's suit was a catalyst that prompted the change that the plaintiff sought. Buckhannon, however, held that a party could not be a prevailing party without receiving some sort of "judicial imprimatur" on the charge. Id. at 605, 121 S.Ct. 1835. Central to the Court's conclusion was its finding that the term "prevailing party" was "a legal term of art," which signified that the party that had been granted relief by a court. Id. at 603, 121 S.Ct. 1835. As examples of the type of relief necessary to attain "prevailing party" status, the court cited a judgment on the merits and a consent decree. Id. at 604, 121 S.Ct. 1835. In Buckhannon, the Court specifically noted that "private settlement agreements do not entail the judicial approval and oversight involved in consent decrees. And federal jurisdiction to enforce a private contractual settlement will often be lacking unless the terms of the agreement are incorporated into the order of dismissal." 532 U.S. at 604 n. 7, 121 S.Ct. 1835.