Wilder v. Bernstein

944 F.2d 1028, 1991 U.S. App. LEXIS 22373, 1991 WL 187259

Opinions

CARDAMONE, Circuit Judge:

We again visit the controversy regarding New York City’s scheme for providing child care services to foster children who require placement in institutions and foster homes. Before us is an appeal by the City of New York (City or appellant) from a June 29, 1990 order of the United States District Court for the Southern District of New York (Ward, J.) awarding $355,388.85 in attorney’s fees to appellees-intervenors, a group of 19 private child care agencies.¹

We are asked to determine whether an intervenor group, which contributed importantly to the formation of the settlement we approved in Wilder v. Bernstein, 848 F.2d 1338 (2d Cir.1988), is entitled to an award of attorney’s fees under 42 U.S.C. § 1988 (1988). In making that determination we can see Congress planned that individuals asserting their civil rights should be able to recover what it cost them to vindicate these rights, and that awarding attorney’s fees to such individuals implemented this design. Where Congress looks to one thing as a solution to a problem, courts should not look to another thing, and thereby alter Congress’ plan by broadening the definition of those entitled to such fees. Because we think that is what the district court did in this case, we reverse.

BACKGROUND

The facts are set forth in Judge Ward’s thorough opinion reported at 725 F.Supp. 1324 (S.D.N.Y.1989), with which we assume the reader’s familiarity, as well as in his opinion approving the settlement of the underlying lawsuit, reported at 645 F.Supp. 1292 (S.D.N.Y.1986). We recount only those facts relevant to this appeal.

The underlying litigation commenced in 1973 when New York City’s child care placement system was challenged by a group of plaintiffs representing a class of Protestant Black children. Plaintiffs ultimately asserted in their complaint four grounds on which they attacked the City’s foster care system: (1) the child care system operated to discriminate against children based on race, (2) it discriminated on the basis of religion, (3) it amounted to an establishment of religion, and (4) it unduly burdened the free exercise rights of Protestant children, who were not Catholic or Jewish. The complaint sought declaratory and injunctive relief under 42 U.S.C. §§ 1983, 1985, and 1986, and 28 U.S.C. §§ 2201 and 2202. The matters alleged in the complaint were claimed to violate the First and Fourteenth Amendments, Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d (1982), and New York anti-discrimination regulations, 18 N.Y.C.R.R. §§ 303.1, 303.2 (1978).

In this complex litigation many groups became involved to varying degrees and for varying reasons. The main participants were (1) plaintiffs, a group of Protestant Black children, who were neither Catholic nor Jewish, in need of care outside their homes; (2) defendants New York City and municipal officials responsible for the City’s child care system; (3) defendants administrators of private, religiously affiliated, either Jewish or Catholic, child care agencies (defendant agencies); and (4) in-tervenors.

In the summer of 1983, shortly before trial was scheduled to begin, plaintiffs and the City began negotiations in an attempt to reach a settlement. At that time inter-venors had in their care 4,600 children constituting 25 percent of the 17,000 children then in the City’s foster care system. Most of those in intervenors’ care were Black Protestant children and belonged therefore to the plaintiff class. In January 1984 some of the eventual intervenors wrote to the Corporation Counsel of New York City expressing strong objections to drafts of the settlement negotiated by it and plaintiffs. In April of that year plaintiffs and the City presented a proposed stipulation of settlement to the district court. The settlement ignored comments and suggestions made by the intervenor agencies, and was objected to by the defendant agencies and by intervenors. Intervenors continued to press their objections and, on June 15, 1984, were granted leave to intervene “for the limited purpose of opposing the proposed settlement.”

Appellees presented comprehensive criticisms of the proposed settlement supported by affidavits from child care professionals. The objections were addressed to the administrative unworkability of the settlement, its failure to consider adequately the needs of the children served, and its discrimination on religious grounds. Negotiations, in which intervenors then participated, continued through the summer. In August basic agreement on general topics was reached. The parties continued to negotiate, this time in open court, and in January 1985 a stipulation of settlement was submitted. On October 8, 1986, over the objections of the defendant agencies, the district court approved the stipulation of settlement. On appeal, we affirmed the settlement. 848 F.2d 1338.

On March 17,1989 intervenors moved for attorney’s fees under § 1988. Specifically, they sought from the City fees of $416,-052.50, enhanced by a factor of 1.75 for a total of $775,303.50, disbursements of $17,-020.59, and continuing City liability for fees related to enforcement of the decree. The City opposed the application, asserting that intervenors were not a prevailing party because they had no federal constitutional or statutory rights within the meaning of 42 U.S.C. § 1988 (1988) at stake in the litigation. The City had already paid plaintiffs $1,775,000 in attorney’s fees and costs pursuant to an offer of judgment submitted by the City in late June 1989, which was accepted by plaintiffs shortly thereafter.

In its opinion approving the stipulation of settlement and in its opinion awarding attorney’s fees to intervenors, the district court detailed intervenors’ extensive contributions in reaching the settlement finally accepted by all participants, except the defendant agencies. Because they had “no axes to grind,” the district court stated, intervenors were able to measure the proposals according to the best interests of the children and provide it with valuable insights into the clinical and administrative realities of child care. The stipulation of settlement finally adopted, while adhering to the general outline of the original stipulation, was influenced by the concerns aired by intervenors.

The court found intervenors’ efforts were essential to the creation of a workable remedy that vindicated the civil rights of the children and their families in the foster care system, and held that the intervenors were therefore prevailing parties entitled to an award of attorney’s fees and costs. It did not accept appellees’ computation of fees, denied their request for an enhancement factor, and awarded fees in the amount of $355,388.85 and disbursements of $10,212.35. The City of New York has appealed.

DISCUSSION

The City challenges the district court’s conclusion that intervenors were a prevailing party and thus eligible for attorney’s fees under 42 U.S.C. § 1988 (1988). We begin with the American Rule that declares no attorney’s fees are recoverable absent express statutory authority for an award. See Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 478 U.S. 546, 561-62, 106 S.Ct. 3088, 3096-97, 92 L.Ed.2d 439 (1986). Unless Congress empowers it, a federal court has no authority to award attorney’s fees to prevailing parties. See Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 269, 95 S.Ct. 1612, 1627, 44 L.Ed.2d 141 (1975). Hence, our task is to determine whether Congress in enacting § 1988 contemplated an award of attorney’s fees in the present circumstances.

We turn to that statute, which states in pertinent part:

In any action or proceeding to enforce a provision of sections 1981, 1982, 1983, 1985, and 1986 of this title, title IX of Public Law 92-318, or title VI of the Civil Rights Act of 1964, the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs.

42 U.S.C. § 1988 (1988). Section 1988 is analyzed in the same manner as other similarly worded fee-shifting statutes. See Indep. Fed’n of Flight Attendants v. Zipes, 491 U.S. 754, 758 n. 2, 109 S.Ct. 2732, 2735 n. 2, 105 L.Ed.2d 639 (1989). “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.” Texas State Teachers Ass’n v. Garland Indep. School Dist., 489 U.S. 782, 792-93, 109 S.Ct. 1486, 1493-94, 103 L.Ed.2d 866 (1989).

There is no question that the legislative history of § 1988 contemplates that an intervenor may be a prevailing party. S.Rep. No. 1011, 94th Cong., 2d Sess. 4 n. 4, reprinted in 1976 U.S.Code Cong. & Admin.News 5908, 5912 n. 4 (Senate Report) (“In the large majority of cases the party or parties seeking to enforce such rights will be the plaintiffs and/or plaintiffintervenors.”). Nor does the fact that a claim has been resolved by settlement, as in this case, preclude an award of attorney’s fees to the prevailing party; it is plain that a party may prevail when it vindicates rights — regardless of whether there is a formal judgment — through a settlement or consent judgment. See Hewitt v. Helms, 482 U.S. 755, 760-61, 107 S.Ct. 2672, 2675-76, 96 L.Ed.2d 654 (1987); Maher v. Gagne, 448 U.S. 122, 129, 100 S.Ct. 2570, 2574-75, 65 L.Ed.2d 653 (1980); Foster v. Perales, 903 F.2d 131, 134 (2d Cir.1990); Senate Report at 5, reprinted in 1976 U.S.Code Cong. & Admin.News at 5912. In awarding attorney’s fees in the instant case, the district court found that as a result of intervenors’ efforts the settlement was modified in ways that directly benefited the children in the child care system, and it concluded that a material alteration of the legal relationship of the parties in a manner that Congress sought to promote in § 1988 had therefore been effected. 725 F.Supp. at 1332.

Appellant City does not dispute the fact that appellees’ input was helpful to children in the child care system, but it contends that contributions to a settlement, no matter how important or helpful, do not entitle these intervenors to attorney’s fees. Something more is needed before a court may make an award under § 1988, that is, the party seeking an award must assert a violation of its own rights under the applicable civil rights statutes. The City insists intervenors have asserted no such right and therefore may not be considered prevailing parties. We agree.

In United States v. Bd. of Educ. of Waterbury, 605 F.2d 573 (2d Cir.1979), we held intervenors may be awarded attorney’s fees if they “contributed importantly to the creation of remedies.” Id. at 576; see also Grove v. Mead School Dist. No. 354, 753 F.2d 1528, 1535 (9th Cir.1985) (“[a]wards to intervenors should not be granted unless the intervenor plays a significant role in the litigation”); cf. Donnell v. United States, 682 F.2d 240, 247 (D.C.Cir.1982) (fees should not be awarded to intervenors in a successful suit if they played an insignificant role in producing the outcome).

Yet, in Waterbury, we did not specifically address the question of whether an inter-venor, in order to be entitled to attorney’s fees as a prevailing party, must also assert an interest protected by the civil rights statutes. An examination of the factual background in Waterbury reveals that many members of the intervenor group’s constituency in that case asserted such a civil rights interest. See 605 F.2d at 574 (an organization consisting of Puerto Rican parents, community leaders, and individuals, was permitted to intervene in an action seeking to desegregate schools in order to protect the right of Waterbury’s Hispanic students to attend integrated schools and to be free from disproportionately bearing the burden of the desegregation); see also Donnell, 682 F.2d at 244 (seven black voters intervening on the side of the United States in an action brought by the Board of Supervisors of Warren County, Mississippi, seeking a declaratory judgment that a plan to establish voting districts did not have a racially discriminatory purpose or effect were found to be prevailing parties). Thus, Waterbury does not bear the weight placed on it by the district court because the inter-venors there were seeking to vindicate their own civil rights, not the rights of others.

Legislative history supports the view that though intervenors may be prevailing parties, it is only when they assert their own civil rights that they are so considered. Congress planned on having § 1988 serve as a mechanism for vindicating the rights of those whose civil rights had been violated, not for forwarding civil rights in general. For example, the House Report states:

Because a vast majority of the victims of civil rights violations cannot afford legal counsel, they are unable to present their cases to the courts. In authorizing an award of reasonable attorney’s fees, [§ 1988] is designed to give such persons effective access to the judicial process where their grievances can be resolved according to law.

H.R.Rep. No. 1588, 94th Cong., 2d Sess. 1 (1976). The Senate Report contains language that even more strongly suggests that attorney’s fees were to be those paid to the victims of constitutional injury, not simply a party that aids in upholding the rights of those victims. Senate Report at 2, reprinted in 1976 U.S.Code Cong. & Admin.News at 5910 (“If private citizens are to be able to assert their civil rights ... then citizens must have the opportunity to recover what it costs them to vindicate these rights in court”) (emphasis added).

Because § 1988 is an exception carved out of the American Rule by Congress, we must take care not to award attorney’s fees that the legislative branch has not authorized. The choice as to whether fees are available and under what circumstances is a function that Congress has reserved to itself. Russo v. New York, 672 F.2d 1014, 1023 (2d Cir.1982), modified on other grounds, 721 F.2d 410. Before awarding fees it is necessary for a court to find therefore some specific congressional plan that provides that an intervenor, not asserting its own civil rights, was an intended beneficiary of § 1988. Neither the House nor the Senate Reports just cited contain any notion that Congress anticipated that such parties would be the beneficiaries of this legislation. Thus, it seems inescapable that Congress did not contemplate awards of attorney’s fees under § 1988 to persons other than to those whose civil rights have been violated.

Here no member of the intervenor group has asserted any civil rights interests of its own. Instead, intervenors became involved initially in the instant litigation because of their fear both that administrative burdens imposed by the original proposed settlement would make the foster care system even more unworkable than the record shows it presently is, and also give rise to those clinical concerns that the list of inter-venors’ objections in the trial court reveals, see 645 F.Supp. at 1346-47. On that score alone intervenors would doubtless have entered the settlement negotiations regardless of whether attorney’s fees were available. Further, intervenors cannot be said to be the legal custodians or guardians of the children in their care. That responsibility belongs to the appropriate City agency. See N.Y.Soc.Serv.Law § 383(2) (McKinney 1983 & Supp.1991). Thus, it does not appear that intervenors are possessed of any interest that permits them to assert the civil rights of the foster children in their care and to be considered a prevailing party under § 1988.

Finally, we agree with the district court that appellees’ efforts were beneficial to the children whose rights were at stake, but the City’s earlier nearly two million dollar payment for plaintiffs’ attorney’s fees was for services that also vindicated the constitutional rights of Protestant Black children, the same constituency inter-venors seek to be rewarded for representing. Congress and not the courts determines whether a party may be awarded attorney’s fees. See Alyeska Pipeline Serv. Co., 421 U.S. at 269, 95 S.Ct. at 1627. And, since the intervenors before us are not one of those parties, the district court’s award of attorney’s fees to them must be reversed.

CONCLUSION

The judgment of the district court is reversed. Intervenors’ request for attorney’s fees on appeal is denied. Each party shall bear its own costs.

1 . The intervenors group consists of the following agencies: Abbott House, Berkshire Farm Center & Services for Children, Brooklyn Home for Children, Brookwood Child Care, The Children’s Aid Society, The Children’s Village, Episcopal Mission Society, Green Chimneys Children’s Service, Heartsease Home, Inc., Inwood House, Lakeside School, Louise Wise Services, Lutheran Community Services, Puerto Rican Family Association, St. Christopher-Jennie Clarkson Child Care Services, Sheltering Arms Children’s Service, Society for Seamen’s Children, Spence-Chapin Service to Children, and Talbot Perkins Children's Services.