IV. When Is the Plaintiff a Prevailing Party?

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IV. WHEN IS THE PLAINTIFF A PREVAILING PARTY?

A. General Rule

The Supreme Court defined the criteria for determining if the plaintiff is a prevailing party in Farrar v. Hobby:²⁵ A plaintiff is a prevailing party 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."²⁶ The Supreme Court has rejected the "central issue" test as a means of determining whether a plaintiff is a prevailing party. Under that test, a party is deemed "prevailing" only if he "has been successful on the central issue . . . as exhibited by the fact that he has acquired the primary relief sought."²⁷

In Texas State Teachers Association v. Garland Independent School District,²⁸ the Supreme Court explained why the central issue test is unworkable:

By focusing on the subjective importance of an issue to the litigants, it asks a question which is almost impossible to answer. Is the "primary relief sought" in a disparate treatment action under Title VII reinstatement, backpay, or injunctive relief? This question, the answer to which appears to depend largely on the mental state of the parties, is wholly irrelevant to the purposes behind the fee shifting provisions, and promises to mire district courts entertaining fee applications in an inquiry which two commentators have described as "excruciating."²⁹

The Supreme Court synthesized the definition of a prevailing party plaintiff in this way:

If the plaintiff has succeeded on "any significant issue in litigation which achieve[d] some of the benefit the parties sought in bringing suit," the plaintiff has crossed the threshold to a fee award of some kind. . . . Thus, at a minimum, to be considered a prevailing party within the meaning of § 1988, the plaintiff must be able to point to a resolution of the dispute which changes the legal relationship between itself and the defendant. . . . The touchstone of the prevailing party inquiry must be the material alteration of the legal relationship of the parties in a manner which Congress sought to promote in the fee statute. Where such a change has occurred, the degree of the plaintiff's overall success goes to the reasonableness of the award under Hensley, not to the availability of a fee award vel non.³⁰ The courts have addressed the concept of "prevailing party" in a number of contexts.

B. Compensatory Damages

Hanrahan v. Hampton³¹ addressed the propriety of awarding attorneys' fees to plaintiffs who were successful on appeal in obtaining reversal of directed verdicts. The suit arose from the execution of a search warrant at an apartment by Chicago police in 1969. During the search, the police and apartment occupants exchanged gunfire. Two occupants were killed and four others were wounded. The police seized weapons and arrested the seven survivors. Those seven and the estates of the two individuals killed sued the police.³²

At trial, the district court granted a directed verdict in favor of the defendants. Plaintiffs appealed. After reversing the directed verdicts, the Seventh Circuit awarded attorneys' fees to plaintiffs under § 1988, finding them to be prevailing parties. The Supreme Court reversed. The Supreme Court began its analysis by observing § 1988, by its express terms, permitted the award of attorneys' fees only to a "prevailing party." Thus, the Court of Appeals was authorized to award to the plaintiffs the attorneys' fees attributable to their appeal only if, by reason of obtaining a partial reversal of the trial court's judgment, they "prevailed" within the meaning of § 19 8 8.³³ The Seventh Circuit held the plaintiffs had prevailed with respect to the appeal, resting its conclusion on the appellate rulings favorable to the plaintiffs, including the reversal of the directed verdicts against them. The Supreme Court reversed, holding that "[w]hile the respondents did prevail on these matters in the sense that the Court of Appeals overturned several rulings against them by the District Court, they were not, we have concluded, 'prevailing' parties in the sense intended by 42 U.S.C. § 1988, as amended."³⁴

The Supreme Court acknowledged that while Congress contemplated the award of fees pendente lite in some cases, "it seems clearly to have been the intent of Congress to permit such an interlocutory award only to a party who has established his entitlement to some relief on the merits of his claims, either in the trial court or on appeal."³⁵ The Court stated that "the entry of any order that determines substantial rights of the parties may be an appropriate occasion upon which to consider the propriety of an award of counsel fees" and "would be especially appropriate where a party has prevailed on an important matter in the course of litigation, even when he ultimately does not prevail on all issues."³⁶ The Court concluded:

Congress intended to permit the interim award of counsel fees only when a party has prevailed on the merits of at least some of his claims. For only in that event has there been a determination of the "substantial rights of the parties," which Congress determined was a necessary foundation for departing from the usual rule in this country that each party is to bear the expense of his own attorney.³⁷

Hensley v. Eckerhart also addressed the issue of whether a partially prevailing plaintiff may recover attorneys' fees for legal services on unsuccessful claims.³⁸ The Supreme Court distinguished between claims that were independent of one another and those that were closely intertwined with one another. In the former situation, the plaintiff cannot recover for attorneys' fees incurred on unsuccessful claims.

In some cases a plaintiff may present in one lawsuit distinctly different claims for relief that are based on different facts and legal theories. In such a suit, even where the claims are brought against the same defendants—often an institution and its officers, as in this case—counsel's work on one claim will be unrelated to his work on another claim. Accordingly, work on an unsuccessful claim cannot be deemed to have been "expended in pursuit of the ultimate result achieved." The congressional intent to limit awards to prevailing parties requires that these unrelated claims be treated as if they had been raised in separate lawsuits, and therefore no fee may be awarded for services on the unsuccessful claim.³⁹

Conversely, in many cases, the plaintiff's claims for relief will involve a common core of facts or will be based on related legal theories. "Much of counsel's time will be devoted generally to the litigation as a whole, making it difficult to divide the hours expended on a claim-by-claim basis. Such a lawsuit cannot be viewed as a series of discrete claims."⁴⁰ In such cases "[t]he result is what matters."⁴¹

Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee. Normally this will encompass all hours reasonably expended on the litigation . . . . In these circumstances the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit. Litigants in good faith may raise alternative legal grounds for a desired outcome, and the court's rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee.⁴²

The Supreme Court, however, also recognized that when a plaintiff has achieved only partial or limited success, "the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount."⁴³ That might be true even if the plaintiff's claims were interrelated, nonfrivolous, and raised in good faith. "Congress has not authorized an award of fees whenever it was reasonable for a plaintiff to bring a lawsuit or whenever conscientious counsel tried the case with devotion and skill. Again, the most critical factor is the degree of success obtained."⁴⁴

The Court noted that the application of this principle would be particularly important in complex civil rights litigation that is often lengthy and demands many hours of attorneys' time. "Although the plaintiff often may succeed in identifying some unlawful practices or conditions, the range of possible success is vast. That the plaintiff is a 'prevailing party' therefore may say little about whether the expenditure of counsel's time was reasonable in relation to the success achieved."⁴⁵ The Court concluded:

We hold that the extent of a plaintiff's success is a crucial factor in determining the proper amount of an award of attorney's fees under 42 U.S.C. § 1988. Where the plaintiff has failed to prevail on a claim that is distinct in all respects from his successful claims, the hours spent on the unsuccessful claim should be excluded in considering the amount of a reasonable fee. Where a lawsuit consists of related claims, a plaintiff who has won substantial relief should not have his attorney's fee reduced simply because the district court did not adopt each contention raised. But where the plaintiff achieved only limited success, the district court should award only that amount of fees that is reasonable in relation to the results obtained.⁴⁶

The Supreme Court has held that extremely limited success can result in a determination that the reasonable attorneys' fees are zero.

We decide today whether a civil rights plaintiff who receives a nominal damages award is a "prevailing party" eligible to receive attorney's fees under 42 U.S.C. § 1988. The Court of Appeals for the Fifth Circuit reversed an award of attorney's fees on the ground that a plaintiff receiving only nominal damages is not a prevailing party. Although we hold that such a plaintiff is a prevailing party, we affirm the denial of fees in this case.⁴⁷

The Court first held that a plaintiff who recovers nominal damages is a "prevailing party" for purposes of § 1988...