Freeman v. Director of New Jersey Division of Alcoholic Beverage Control

538 F. App'x 204
CourtCourt of Appeals for the Third Circuit
DecidedSeptember 13, 2013
Docket12-3829
StatusUnpublished

This text of 538 F. App'x 204 (Freeman v. Director of New Jersey Division of Alcoholic Beverage Control) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Freeman v. Director of New Jersey Division of Alcoholic Beverage Control, 538 F. App'x 204 (3d Cir. 2013).

Opinion

OPINION

SLOVITER, Circuit Judge.

The Director of the New Jersey Department of Alcoholic Beverage Control (“ABC”) appeals the District Court’s award of $802,221 in attorneys’ fees and expenses to the Appellees. We will vacate the award in part and affirm in part.

I.

Appellees, four New Jersey consumers of wine and one California winery, sued ABC in the District of New Jersey, alleging that New Jersey’s ABC laws discriminated against out-of-state wineries in violation of the Commerce Clause. Appellees’ original complaint noted a number of differences between how the ABC laws treated in-state and out-of-state wineries and sought an injunction permitting out-of-state wineries to ship wine directly to New Jersey residents, as in-state wineries could do. During a stay of the litigation, and in response to Granholm v. Heald, 544 U.S. 460, 493, 125 S.Ct. 1885, 161 L.Ed.2d 796 (2005), which held that “[i]f a State chooses to allow direct shipment of wine, it must do so on evenhanded terms,” New Jersey amended its laws to eliminate direct shipping of wine altogether. Act of July 14, 2004, 2004 N.J. Laws 102. Appellees then amended their complaint to allege that the new ban on direct shipping violated the Commerce Clause, and to clarify the other ABC provisions the Appellees still sought to challenge as discriminatory.

On cross-motions for summary judgment, the District Court found all but two of the challenged provisions constitutional. Both sides appealed. This court found the direct-shipment ban constitutional, but held that several other provisions did discriminate against out-of-state wineries in violation of the Commerce Clause. See Freeman v. Corzine, 629 F.3d 146, 164-65 (3d Cir.2010). Because the discrimination could be remedied either by eliminating benefits for in-state wineries or by extending them to out-of-state wineries, we remanded the case to the District Court to determine the proper result. See id. at 165. Appellees then petitioned this court for an interim award of attorneys’ fees pursuant to 42 U.S.C. § 1988(b) for the work done on appeal. This court denied Appellees’ request without explanation.

On remand, the litigation was stayed by all parties’ consent. The New Jersey legislature rewrote the relevant statutory provisions, and the parties entered a consent agreement that concluded the substance of the litigation. After the entry of the consent order, Appellees requested attorneys’ fees and expenses in the District Court. Appellees provided time records, explanations of their litigation tasks, and evidence of the prevailing hourly rate for attorneys of similar experience in the area. The District Court’s lodestar analysis 1 led *206 it to make two small reductions in Appellees’ fee request, but it otherwise granted the request as written. The total award, which included compensation for the appellate fees this court had denied, was $802,221. ABC timely appealed the District Court’s award of fees and costs. 2

II.

First, ABC argues that the District Court lacked authority to grant appellate fees and costs that this court has explicitly denied. Because this objection raises a question of law, our review is plenary. See McKenna v. City of Phila., 582 F.3d 447, 455 (3d Cir.2009).

Once this court “has entertained an application for appellate attorney’s fees, a district court may not.” Yaron v. Twp. of Northampton, 963 F.2d 33, 37 (3d Cir.1992). In Yaron, as in this case, this court denied an appellate fee request “without explanation,” id. at 35, and the district court later awarded appellate fees. The Yaron panel vacated the award, reasoning “that an order denying fees on appeal is analogous to a remand with a specific mandate. In such a case, the district court is required to follow our mandate.” Id. at 37.

The District Court found Yaron inappo-site because it concerned fees for prevailing defendants, rather than plaintiffs. It held that to apply Yaron in this case “would be at odds with binding caselaw,” App. at 27, and cited Perdue v. Kenny A. ex rel Winn, 559 U.S. 542, 130 S.Ct. 1662, 1676, 176 L.Ed.2d 494 (2010), for the proposition that courts cannot deny § 1988 fees to prevailing plaintiffs without explanation. Perdue specifically addresses trial courts, however, and requires explanation in order to enable appellate review. See id. We do not read it as abrogating Yaron’s clear rule.

The District Court also distinguished Yaron on the basis that it involved a fee request following a final disposition, whereas the fee petition in this case was made “before the litigation was complete.” App. at 27. This is a distinction without a difference. The Appellees’ appeal was complete when this court denied their fee application. The further proceedings in the District Court were not relevant to whether Appellees deserved fees for the appeal. There is no more of a basis to infer that the denial in this case was procedural than there was in Yaron.

We are sympathetic to the Appellees’ argument that what may have been a procedural denial should not bar a later fee award, but there is simply no sound basis to exempt this case from Yaron’s broad holding. Pursuant to that precedent, the District Court lacked authority to award Appellees fees for the prior appeal. We will vacate that component of the fee award, and will also vacate the fees awarded for time spent litigating the Yaron issue below. See Hensley v. Eckerhart, 461 U.S. 424, 435, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983).

III.

Second, ABC contends that the District Court abused its discretion by failing to reduce the award to reflect Appellees’ loss on the issue of the direct-shipment ban. *207 Cf. id. at 434-36, 103 S.Ct. 1933 (holding that fee awards must account for “limited success”); see also Tex. State Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 790, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989). None of ABC’s arguments in support of this claim have merit.

ABC asserts for the first time on appeal that Appellees should receive no fees for work done prior to their Second Amended Complaint. The argument is waived. See Webb v. City of Phila., 562 F.3d 256, 263 (3d Cir.2009). 3

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Related

Hensley v. Eckerhart
461 U.S. 424 (Supreme Court, 1983)
Venegas v. Mitchell
495 U.S. 82 (Supreme Court, 1990)
Granholm v. Heald
544 U.S. 460 (Supreme Court, 2005)
Freeman v. Corzine
629 F.3d 146 (Third Circuit, 2010)
Margaret L. Johnston v. Hbo Film Management, Inc.
265 F.3d 178 (Third Circuit, 2001)
Jama v. Esmor Correctional Services, Inc.
577 F.3d 169 (Third Circuit, 2009)
Webb v. City of Philadelphia
562 F.3d 256 (Third Circuit, 2009)
McKenna v. City of Philadelphia
582 F.3d 447 (Third Circuit, 2009)
Perdue v. Kenny A. ex rel. Winn
176 L. Ed. 2d 494 (Supreme Court, 2010)
Vasquez v. Fleming
617 F.2d 334 (Third Circuit, 1980)

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Bluebook (online)
538 F. App'x 204, Counsel Stack Legal Research, https://law.counselstack.com/opinion/freeman-v-director-of-new-jersey-division-of-alcoholic-beverage-control-ca3-2013.