P.J. ex rel. W.J. v. Conn. Bd. of Educ.
P.J. ex rel. W.J. v. Conn. Bd. of Educ.
Opinion
Defendants-Appellants-the Connecticut State Board of Education, and Commissioner of the Connecticut State Department of Education Gerald Tirozzi-appeal several orders of the United States District Court for the District of Connecticut (Chatigny,
J
., Martinez,
M.J.
) awarding Plaintiffs-Appellees and Intervenors-Plaintiffs-Appellees (collectively, "Plaintiffs-Appellees") attorneys' fees and costs for work done in the wake of a court-approved settlement entered into by the parties in March 2002. This suit began over 25 years ago, when Plaintiffs-Appellees sued Defendants-Appellants, alleging violations of,
inter alia
, the Individuals with Disabilities Education Act ("IDEA"),
Defendants-Appellants argue that the district court erred in its award of fees for three reasons: (1) the parties' 2002 settlement agreement ("Settlement Agreement" or "Agreement") by its terms precludes Plaintiffs-Appellees from receiving any fees beyond the $675,000 they were paid at the Agreement's execution; (2) the Supreme Court's decision in
Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources
,
Therefore, we AFFIRM in part and VACATE in part the September 30, 2017 order of the district court awarding Plaintiffs-Appellees $470,727.57 in attorneys' fees and costs. We REMAND for further proceedings consistent with this opinion.
BACKGROUND
I. Factual Background 1
Plaintiffs-Appellees, initially just several Connecticut "school-aged children with intellectual disabilities and their families," S.A. 33, brought suit in the United States District Court for the District of Connecticut in 1991. They were later joined by several organizations "created by parents, disabled citizens and professionals to enforce the rights of persons with disabilities." Joint Appendix ("J.A.") 100 (Third Amended Complaint). The students alleged that they had attempted to obtain placement in "regular classrooms in their neighborhood schools," but had been rejected by the local boards of education due to bias and prejudice.
In December 1993, a class was certified of "[a]ll mentally retarded school-age children in Connecticut who have been identified as needing special education and who, on or after February 20, 1991 are not educated in regular classrooms." J.A. 24-25. The matter was tried before District Judge Chatigny in early 2000. Before the court rendered a verdict, however, the parties entered into settlement negotiations with the help of Magistrate Judge Martinez. "The negotiation process was bifurcated: the initial phase addressed the merits of the case and the second phase was to focus on attorneys' fees." S.A. 2-3.
In November 2000, the parties successfully reached a draft agreement on the substantive provisions of their settlement. That agreement contained five primary goals, including, inter alia , that the Connecticut State Department of Education would "increase ... the percent" of students with intellectual disabilities who participate in classes and extracurricular activities with non-disabled students. The draft agreement provided for the establishment of an "Expert Advisory Panel" ("EAP") consisting of four individuals, two selected by each of the parties. The EAP would, among other things, advise Connecticut in its implementation of the agreement, provide feedback on annual reports to be prepared by the State, and make recommendations on how best to implement the agreement's goals. The agreement also provided that Plaintiffs-Appellees were entitled to collect data on the class, and the State was generally obligated to cooperate in providing them with these data. The district court was to retain jurisdiction over the agreement for, at most, eight years; however, the parties agreed that after the first five years following the empaneling of the EAP, the court would have jurisdiction to consider only Plaintiffs-Appellees' motions for substantial noncompliance, if any were made.
Having settled on the substance of their agreement, the parties turned to negotiating attorneys' fees. Magistrate Judge Martinez asked Plaintiffs-Appellees' counsel to provide the court with all fee requests for work done up to November 28, 2000, the point when the parties began negotiating fees. Counsel for Plaintiffs-Appellees initially demanded payment of $972,115.91, but the parties ultimately agreed on $675,000. As of May 18, 2001, however, when the parties met with the Magistrate Judge to discuss some unrelated language in the draft agreement, the draft itself contained no language concerning attorneys' fees.
Under state law, the settlement agreement had to be approved by the Connecticut legislature. On June 6, 2001, Plaintiffs-Appellees learned that the draft agreement had been submitted to and accepted by the Connecticut General Assembly. But the agreement accepted by the legislature included a new provision absent from the draft agreement: Section X, entitled "Payment." That section provided as follows:
The Defendants shall make to the Plaintiffs in P.J., et al v. State of Connecticut Board of Education, et al, a one-time payment of $675,000.00 in attorneys' fees and costs, payable to Attorney David Shaw, attorney for the Plaintiffs, within ninety (90) days of the effective date of the approval of this agreement.
J.A. 159 (Settlement Agreement). Plaintiffs-Appellees, who had not agreed to this additional section, protested to the Magistrate Judge, arguing that the inclusion of such a section, along with its "one-time payment" language, suggested that $675,000 would be the only payment counsel was entitled to receive, even though the parties had not in fact agreed on a waiver of future fees. When the parties were unable to agree on additional language to clarify the meaning of this new section, Plaintiffs-Appellees moved to enforce the draft settlement agreement without Section X.
Magistrate Judge Martinez held yet another settlement conference with the parties in February 2002 in an effort to save the settlement. At this conference, the parties agreed on certain language to be included in a side letter regarding Section X, subject to discussions with Connecticut's legislative leadership. 2 This additional language is contained in a letter dated March 1, 2002 (the "Side Letter"), from Defendants-Appellants' counsel to Plaintiffs-Appellees' counsel, and provides as follows:
[T]he defendants do not interpret Section X of the draft agreement to preclude the Court from awarding reasonable attorneys' fees and costs to the plaintiffs upon a finding by the Court that the defendants had failed to substantially comply with the consent decree. The parties agree to be bound by controlling law on the issue of attorneys' fees and costs.
S.A. 6. Upon reaching agreement on the Side Letter, the parties executed the Settlement Agreement on March 28, 2002. The court approved the settlement on May 22, 2002, following a fairness hearing.
After the Settlement Agreement went into force, the parties empaneled the EAP on August 12, 2002, which met with state and local education officials and made recommendations on how Defendants-Appellants could best comply with the Agreement. "The defendants issued annual reports and provided extensive data to the plaintiffs and the EAP regarding their efforts and progress." S.A. 38. After five years, Defendants-Appellants disbanded the EAP. Plaintiffs-Appellees filed a motion for substantial noncompliance in April 2009, which led to an evidentiary hearing before the district court in June 2010. The district court ultimately denied that motion, concluding that Defendants-Appellants had made substantial progress toward meeting the Agreement's goals, and that neither the early disbanding of the EAP, nor any alleged issues with reclassification of class members-which Plaintiffs-Appellees claimed Defendants-Appellants did to obscure their actual progress toward Agreement goals-was sufficient to merit a finding of "substantial noncompliance."
II. Procedural History
On July 27, 2010, Plaintiffs-Appellees filed the motion for attorneys' fees and costs that is the subject of this appeal. They requested $906,010.85 in attorneys' fees and $197,181.15 in costs, including fees for work done from November 29, 2000, through March 20, 2002 (that is, after Plaintiffs-Appellees originally provided the court with their fee request during negotiations, but before execution of the Agreement), and from March 2002 through the 2010 filing of the instant motion. Most of the requested fees are for what the magistrate judge characterized as "post-judgment monitoring and enforcement." S.A. 8.
The district court first considered whether Plaintiffs-Appellees were entitled to seek fees beyond the $675,000 referenced in the Settlement Agreement, the terms of which Defendants-Appellants argued precluded any
additional
fee awards. Second, the court considered whether additional fees were barred by the Supreme Court's decision in
Buckhannon
. Although the "prevailing party" is entitled to obtain attorneys' fees in cases like this one,
Buckhannon
defined a "prevailing party," as that term is used in federal fee-shifting statutes, as one who has obtained a "judicially sanctioned change in the legal relationship of the parties."
3
After determining that Plaintiffs-Appellees could seek further fees, the district court considered the numerous categories of fees for which Plaintiffs-Appellees were seeking payment. Magistrate Judge Martinez, in her recommended ruling regarding the fee motion, characterized the work for which fees were requested as falling within six distinct categories: (1) negotiating the pre-settlement claim; (2) notifying class members of the settlement; (3) empaneling the EAP; (4) monitoring implementation of the Settlement Agreement; (5) litigating attorneys' fees; and (6) litigating and pursuing a writ of mandamus. See S.A. 46-47. The fourth category, monitoring, contained the lion's share of the hours requested and was split into subcategories by the Magistrate Judge as she assessed what was compensable. Applying the Supreme Court's analysis in Delaware Valley , Magistrate Judge Martinez recommended that Plaintiffs-Appellees be awarded $321,165 in fees and $3,987.57 in costs. Id. at 88. The district court made several alterations to this recommendation, ultimately awarding $466,740 in fees and $3,987.57 in costs. 4 See id. at 90-92. Defendants-Appellants appealed the award, arguing not only that the district court had abused its discretion in awarding certain categories of fees to Plaintiffs-Appellees under the Delaware Valley standard, but also that Plaintiffs-Appellees should not have been allowed to receive any additional fees in the first place.
DISCUSSION
We resolve this case using the same framework as the district court. First, we consider whether Plaintiffs-Appellees may seek any additional fees (1) pursuant to the Settlement Agreement and (2) consistent with Supreme Court precedent. After answering those questions in the affirmative, we then turn to the particular categories of work for which the district court awarded fees to assess what is compensable under Delaware Valley .
I
Consent decrees, such as the Settlement Agreement here, are construed as contracts.
See
Broadcast Music, Inc. v. DMX Inc.
,
Defendants-Appellants first argue that Plaintiffs-Appellees should be barred from requesting any additional fees and costs under the terms of the Settlement Agreement. As noted above, Section X of the Settlement Agreement provides for a "one-time payment of $675,000.00 in attorneys' fees and costs" within 90 days of the Agreement's effective date. J.A. 160 (Settlement Agreement). Section XI provides that the Agreement itself "contains the complete and sole agreement of the parties."
In determining that the Settlement Agreement did not waive Plaintiffs-Appellees' right to seek future fees and costs, the Magistrate Judge correctly concluded that "[t]he plain and unambiguous language of the settlement agreement does not manifest an intent to waive plaintiffs' statutory right to seek attorneys' fees." S.A. 14-15. Though Defendants-Appellants cite to several cases in an attempt to show that the Agreement's language
does
manifest such an intent, the cases cited are not analogous. In
Lide v. Abbott House
, No. 5-cv-3790,
We further agree with Plaintiffs-Appellees that, even if we were to deem Section X ambiguous, extrinsic evidence serves only to bolster Plaintiffs-Appellees' claim. Defendants-Appellants argue that as the language of Section X did not change from the time Plaintiffs-Appellees protested its inclusion to the time the parties executed the Agreement, the Agreement's execution must signal Plaintiffs-Appellees' capitulation to Defendants-Appellants' interpretation. See Def.-App. Br. at 52 ("The 'side letter' reflects that the Class made a knowing decision to capitulate on their previously held position not to sign the Agreement because of Section X."). However, the Side Letter explicitly says the parties agree to "be bound by controlling law" on attorneys' fees, and further makes clear that Defendants-Appellants themselves do not understand Section X to preclude the award of future fees in at least one instance: upon a judicial finding of substantial noncompliance by Defendants-Appellants with the Agreement. As Magistrate Judge Martinez (who helped the parties negotiate the Side Letter to save the settlement) noted, "the side letter was a linchpin in the parties' agreement to resolve the case," and "reflects the parties' agreement that Section X was not a complete bar to future fees." S.A. 16.
In sum, we conclude that the Settlement Agreement itself does not constitute a waiver of Plaintiffs-Appellees' statutory entitlement to seek future attorneys' fees and costs in connection with work performed subsequent to the Agreement's execution. We next consider whether the present award is nevertheless precluded by the Supreme Court's decision in Buckhannon .
II
We review for abuse of discretion a district court's award of attorneys' fees under the fee-shifting statutes at issue here.
See
Z.B. ex rel. I.B. v. N.Y.C. Dep't of Educ.
,
In
Buckhannon
, the Court considered the "catalyst theory." That theory posited
that a plaintiff who supposedly achieved her desired result in a case, but did so because of
voluntary
conduct by the defendant rather than because of a win in court, could nevertheless be deemed a "prevailing party" for purposes of fee-shifting statutes.
At least one circuit has concluded that unless a consent decree itself provides for the award of post-consent decree fees,
Buckhannon
's definition of a "prevailing party" generally bars such fees absent a subsequent court order in that party's favor.
See
Alliance to End Repression v. City of Chicago
,
We, like the
Alliance
court, "do not see the sense" of an arrangement in which the mere entry of a consent decree affords a prevailing party's lawyers a "guaranteed lifetime income" for "bringing and losing a series of actions to enforce the decree" while charging the expense to the other side.
Id.
At the same time, however, and joining the majority of other circuits to have considered the question, we conclude that
Buckhannon
neither limits nor overturns
Delaware Valley
, which it does not even mention.
See
Prison Legal News v. Schwarzenegger
,
III
A
In
Delaware Valley
, the Supreme Court considered an award of attorneys' fees to the Delaware Valley Citizens' Council for Clean Air ("Delaware Valley"), which had sued the Commonwealth of Pennsylvania under the Clean Air Act to compel Pennsylvania to implement a vehicle inspection and maintenance program.
Pennsylvania, in arguing to the Court against the award of fees for Delaware Valley's work before administrative agencies, contended that the work was not "judicial" in nature-as Pennsylvania argued work was required to be, to be eligible for fees under the Clean Air Act.
Significantly for our purposes here, the
Delaware Valley
Court noted the similarity between the fee-shifting provisions contained in (1) the Clean Air Act; and (2)
Despite
Delaware Valley
's age, this Court has not before parsed the decision's rationale for awarding fees in the post-decree context. We think the distillation of several principles-gleaned from our own case law and that of the Supreme Court-may help guide district courts as they consider attorneys' fees requests in this context going forward. First and foremost, while we do not adopt the Seventh Circuit's strict requirement, set forth in
Alliance
, of additional court-ordered relief as a condition precedent to post-decree fees, a court assessing such fee requests should always consider the "results obtained."
See
Quaratino v. Tiffany & Co.
,
Second, a district court must consider fee requests with an eye to whether the work was "useful and of a type ordinarily necessary to secure the final result obtained from the litigation."
Delaware Valley
,
When a decree establishes a particular mechanism for addressing the problem that motivated the initial lawsuit, the "fruit of the decree" is a properly functioning mechanism, not the elimination of the problem addressed by the mechanism.
Johnson
,
Lastly, a district court must always ensure that hours spent on post-decree work are reasonable in degree.
See
Quaratino
,
B
As noted above, we review a district court's award of attorneys' fees under the statutes at issue here for abuse of discretion.
See
Z.B.
,
The Magistrate Judge's recommendation in this case, as accepted in part and altered in part by the district court, resulted in fees for the following categories of work: (1) negotiating the pre-settlement claim; (2) reviewing and responding to annual
reports; (3) preparation for and attendance at EAP meetings; (4) class list and related motions; (5) communication; (6) motions for substantial noncompliance and an evidentiary hearing; (7) litigating attorneys' fees; and (8) empaneling the EAP.
7
See
Def.-App. Br. at 57-58. Because Defendants-Appellants make no argument before this Court as to Categories 5, 7, or 8, we do not address them.
See
Norton v. Sam's Club
,
Category 1.
The Magistrate Judge declined to award any additional fees for time spent before the Settlement Agreement was executed and accepted by the district court. The district court, however, concluded that 112.1 hours of work done between "June 8, 2001, when plaintiffs learned of the submission to the Legislature, [and] March 21, 2002, when the parties signed the agreement," was compensable.
See
S.A. 91. The court reasoned that "Defendants' unilateral action put the plaintiffs in the position of having to either accept a deal to which they had not agreed, or reopen[ ] negotiations."
We agree with the Magistrate Judge that "[a] plain reading of the Agreement demonstrates that the $675,000" referenced in the Settlement Agreement "encompasse[s] the attorneys' fees defendants agreed to pay and the plaintiffs agreed to accept for their work up to the date they signed the Agreement." S.A. 54. Although we decline to read the language "one-time payment" to preclude all
future
fees, this language does unambiguously provide that the parties intended $675,000 to be the exclusive payment for work done
prior
to the Settlement Agreement's execution. Plaintiffs-Appellees' contention that the $675,000 was compensation only for work done before November 28, 2000, is belied by the text of the Agreement, which contains no such temporal restriction. And even were we to consider the Side Letter probative of what the parties intended regarding fees, the Magistrate Judge correctly concluded that the letter and surrounding negotiations were "concerned
not
about [Plaintiffs'] fees during this period up to the signing of the Settlement Agreement, but about their ability to recover fees
incurred in the future
related to enforcement activity."
Category 2.
However, we see no abuse of discretion in the district court's decision to award 105.7 hours for reviewing and responding to Defendants-Appellants' annual reports. Defendants-Appellants argue that because there was a provision in the Agreement requiring the EAP to review the annual reports and
submit comments, but no such provision requiring Plaintiffs-Appellees to do so, the district court's award for that work "effectively rewrite[s]" the Settlement Agreement.
See
Def.-App. Br. at 67. But while it is true that the Settlement Agreement did not specifically
require
Plaintiffs-Appellees to review or provide comments on the reports, the Agreement clearly anticipated that Plaintiffs-Appellees would receive these reports and the EAP's evaluation of them.
See
J.A. 158 (Settlement Agreement) (providing that Defendants-Appellants would furnish Plaintiffs-Appellees with the annual report and that the EAP would give them its comments). In
Delaware Valley
, the Supreme Court approved a fee award without regard to whether the compensated work was contemplated in the consent decree; instead, the Court assessed only whether the work "[p]rotect[ed] ... the full scope of relief afforded by the consent decree."
Category 3. Nor did the district court abuse its discretion in awarding 200.8 hours for Plaintiffs-Appellees' attorneys' time spent preparing for and attending the EAP meetings. The magistrate awarded 229.4 hours for time spent on this work, which was a 20% reduction from the amount requested for preparing and attending the meetings as well as a 50% reduction to all time described as travel time. The magistrate's recommended award for preparation and attendance was further reduced by the district judge by 28.6 hours. Defendants-Appellants again argue that the district court impermissibly expanded upon the parties' bargain, as there was no role for attorneys at the EAP meetings and the Settlement Agreement did not contemplate them being there. We again disagree.
As with the time spent responding to reports, just because the Settlement Agreement did not expressly provide for attorneys' attendance at the meetings, that does not mean their work was not of the sort "ordinarily necessary" to secure the Agreement's result.
See
Delaware Valley
,
Category 4. The district court awarded fees for 57.2 hours spent obtaining information about the class list, which is a 20% reduction from the amount requested. See S.A. 64-67. The court reasoned that such information "was helpful to plaintiffs' efforts to monitor compliance with the Settlement Agreement." Id. at 66. We agree with the district court's conclusion in part.
One item in contention in the parties' negotiations over the list was the provision of personally identifiable information on students in the class, which Plaintiffs-Appellees wanted. While Defendants-Appellants did not believe they were required by the Agreement to provide such information, they offered to send opt-out notifications to class members under the Family Educational Rights and Privacy Act ("FERPA"), 20 U.S.C. § 1232g, so that the information could then be released from consenting families, in compliance with the law. Instead of agreeing to Defendants-Appellants' offer, Plaintiffs-Appellees filed a motion in January 2005 to enforce the Settlement Agreement, arguing that Defendants-Appellants had failed "to provide and update a list of class members" as required by the Agreement. S.A. 66 (internal quotation marks omitted). But before the motion could be ruled on, the parties agreed to Defendants-Appellants' original plan to send FERPA notifications and create a list based on those responses.
The Settlement Agreement plainly contemplates Plaintiffs-Appellees' access to class data to allow them to monitor Defendants-Appellants' progress.
See
J.A. 149 (Settlement Agreement) (requiring that Defendants-Appellants provide Plaintiffs-Appellees with an updated class list and giving Plaintiffs-Appellees the right to challenge that list as inadequate). In the absence of a data set that allowed Plaintiffs-Appellees to track students across the years, it would be practically impossible for them to track Defendants-Appellants' progress on the Agreement's goals or to understand any potential reclassification issues. Thus, we agree with the district court that negotiations with Defendants-Appellants over the class list fell well within what was "useful" or "of the type ordinarily necessary" to secure enforcement of the Settlement Agreement.
See
Delaware Valley
,
However, the court went beyond the scope of
Delaware Valley
and
Quaratino
when it awarded time for Plaintiffs-Appellees'
unsuccessful
motion to enforce. The hours Plaintiffs-Appellees spent on the motion to enforce could have been avoided if they had accepted Defendants-Appellants' initial offer. We therefore vacate the award of 57.2 hours insofar as it includes hours related to the motion to enforce.
See
Quaratino
,
Category 6. Lastly, while the Magistrate Judge declined to award any fees for work on the unsuccessful motions for substantial noncompliance and the associated evidentiary hearing, concluding such work did not fall within the Delaware Valley standard, the district court awarded 240 hours (approximately 28% of what Plaintiffs-Appellees requested for this category of work), determining that the request for an evidentiary hearing was "reasonably necessary to protect the rights of the class members." S.A. 91. As noted above, unsuccessful work normally does not merit a fee award; however, unsuccessful work that is "inextricably intertwined" with successful work may be compensable. See
Quaratino
,
For that reason, we conclude that awarding any fees for work related to this motion was an abuse of discretion. We therefore vacate the 240 hours awarded by the district court for Plaintiffs-Appellees' motion for substantial noncompliance and the associated evidentiary hearing.
CONCLUSION
For the foregoing reasons, we AFFIRM in part and VACATE in part the district court's September 30, 2017 order awarding $470,727.57 in attorneys' fees and costs. We REMAND the case to the district court for further proceedings consistent with this opinion.
The factual background presented here is derived from facts found by the district court in determining Plaintiffs-Appellees' entitlement to fees following approval of the Settlement Agreement. As this is an appeal of an award of attorneys' fees, we accept these facts unless they are "clearly erroneous."
See
Shepherd v. Goord
,
According to Magistrate Judge Martinez, Defendants-Appellants thereafter "sought and obtained approval for the proposed additional language." S.A. 6.
Plaintiffs-Appellees moved for fees "pursuant to
The order approving in part and adopting in part the Magistrate Judge's recommended ruling-with a resulting award of fees and costs of $470,727.57-was dated September 30, 2017.
See
Ruling and Order,
P.J. ex rel. W.J. v. Conn. Bd. of Educ.
, No. 91-cv-180 (D. Conn. Sept. 30, 2017), ECF No. 846. However, the subsequent entry on the docket ordering the award provided for only $441,000.00 in fees, with no explanation for the approximately $25,000 difference.
See
The
Buckhannon
majority further reasoned that application of the catalyst theory might actually cause a defendant to
refrain
from voluntarily changing its conduct, as liability for attorneys' fees could be more significant than liability on the merits.
See
The fee-shifting provision of IDEA,
see
Defendants-Appellants note that Plaintiffs-Appellees did not cross-appeal, and thus the amount awarded by the district court is the largest amount they could receive.
See
Int'l Ore & Fertilizer Corp. v. SGS Control Servs., Inc.
,
Reference
- Full Case Name
- P.J., BY & THROUGH His Parents & Next Friends MR. & MRS. W.J.; L.G., by & Through Her Parents & Next Friends MR. & MRS. L.G.; M.L., by & Through His Parents & Next Friends MR. & MRS. J.L., Plaintiffs-Appellees, Ian Katz, by & Through His Parents and Next Friends Mr. & Mrs. Mark Katz; Connecticut Association for Retarded Citizens, Inc.; Coalition for Inclusive Education; Connecticut Coalition of Citizens With Disabilities; People First, Inc., Intervenors-Plaintiffs-Appellees, v. CONNECTICUT STATE BOARD OF EDUCATION; Gerald Tirozzi, Commissioner of the Connecticut State Department of Education, Defendants-Appellants.
- Cited By
- 6 cases
- Status
- Published