The High Court Fee Case That Has Civil Rights Attys On Edge

The U.S. Supreme Court could soon make it more difficult for civil rights attorneys to get paid even when they successfully challenge harmful government policies, an "earthshaking disturbance" advocates say could deter lawyers from taking on poor clients.

In Lackey v. Stinnie, the justices will decide whether a team of attorneys — from the Legal Aid Justice Center and McGuireWoods LLP — can recoup fees from the state of Virginia after suing to end an onerous state law that automatically suspended residents' driver's licenses for nonpayment of traffic fines and other fees. The justices heard oral argument in the case earlier this month.

In the underlying litigation, Virginia drivers successfully argued the state law left hundreds of thousands of poor state residents trapped: unable to pay off fees and fines without driving to work, and unable to drive to work without paying off fees and fines.

After two years of litigation, the plaintiffs secured a preliminary injunction that put the state law on ice, but the Virginia Legislature repealed it before a trial could take place, making the entire case moot and making it impossible for the drivers to secure a final judgment despite achieving their aims.

After hearing oral arguments in October, the Supreme Court will now decide whether the plaintiffs can still be considered the "prevailing party" — a designation that allows litigants to seek attorney fees from the losing side — despite never securing a final judgment on the merits.

Civil rights attorneys who spoke with Law360 said the situation is fairly common.

"I see it all the time," said Andrew G. Celli Jr., a founding partner at New York City-based civil rights and litigation boutique Emery Celli Abady Brinckerhoff Ward & Maazel LLP.

"In reform litigation, often you win the preliminary injunction and then that's game, set, match," Celli added.

Right now, civil rights attorneys in most states have no problem getting paid for the hundreds of hours of work that can go into winning a preliminary injunction in a case, even if the government gives up on the litigation and the case is dismissed as moot.

If the justices side with Virginia, however, advocates said it will make civil rights attorneys think twice about bringing similar cases, faced with the prospect of being unable to get paid even if they accomplish everything they set out to.

"At first glance this case seems to be about money," said Angela Ciolfi, executive director of the civil rights litigation nonprofit Legal Aid Justice Center and the co-lead attorney on the Stinnie case.

"But really, it's about access to the courts for plaintiffs who've had their civil rights violated," Ciolfi added.

"A Complete Outlier"

Ciolfi said Virginia's automatic suspension law first popped up on Legal Aid's radar nearly a decade ago, when a local jail superintendent mentioned that a third of his inmates were incarcerated for driving on a suspended license.

When Ciolfi and her colleagues began investigating, they were shocked.

One analysis by the nonprofit Fines and Fees Justice Center later found the law had caused nearly a million residents — a sixth of Virginia's population — to have their licenses suspended.

Lead plaintiff Damian Stinnie, for instance, was plunged into a vicious cycle that haunted him for years when his license was automatically suspended in 2013 for failure to pay roughly $1,000 in traffic fines.

According to the complaint, Stinnie was never notified about the suspension or given a chance to argue his inability to pay. He didn't find out until he was pulled over and cited for driving on a suspended license, right after losing his minimum wage job.

Stinnie was diagnosed with lymphoma shortly thereafter, and for the next few years, his suspended license was an albatross around his neck.

"The people affected couldn't go to medical appointments, they couldn't drive to work, they couldn't go to church," Ciolfi said. "It was ruining their lives."

Ciolfi and her colleagues partnered with a pro bono team at McGuireWoods and filed a putative class action in 2016 claiming the license suspension law violated Virginians' due process and equal protection rights.

After two years of hard-fought litigation, the plaintiffs won a preliminary injunction in 2018 that put the state law on hold. Before the case could go to trial, however, the Virginia Legislature repealed the law, in part due to persistent lobbying efforts by Legal Aid and others. That action ended the case by making it moot.

This wouldn't have been a problem in most states. Legal precedent in nearly every federal appellate court allows plaintiffs to be considered a "prevailing party" — and thus eligible for an award of attorney fees if they succeed on a preliminary injunction, even if they don't ultimately secure a final ruling on the merits.

However, the Fourth Circuit, which includes Virginia, had a firm policy requiring a final ruling.

When the drivers appealed the attorney fees, a Fourth Circuit panel ruled against them, finding the drivers could not be considered the "prevailing party" because they hadn't secured a final judgment. But after rehearing the case en banc, the entire court ruled 7-4 in August 2023 that its previous, one-size-fits-all rule had "become a complete outlier" and overturned it.

The previous rule "leaves the plaintiff, who likely devoted considerable resources to obtaining the preliminary injunction, holding the bag," the majority said. "The predictable outcome of this gamesmanship is fewer attorneys willing to represent civil rights plaintiffs in even clearly meritorious actions — particularly those whose urgent situations call for interim relief."

It's unclear how much the Stinnie plaintiffs would seek in attorney fees if the justices rule in their favor, but in court documents, they've estimated the cost of the Fourth Circuit litigation alone at nearly $800,000.

Gerald F. Lackey, commissioner of the Virginia Department of Motor Vehicles, took the case to the Supreme Court, arguing "the plain meaning of 'prevailing party' in fee shifting statutes is the party that ultimately prevails 'on the merits' in the litigation or obtains a final judgment in its favor." The justices in April agreed to hear the Stinnie case.

Section 1988

The law at issue in Lackey v. Stinnie is Section 1988 of Title 42 of the U.S. Code, which created the "prevailing party" fee-shifting framework.

Since its adoption in 1976, Section 1988 has become a cornerstone of the U.S. system of private civil rights enforcement. And that's exactly what Congress intended, advocates told Law360.

"Congress enacted Section 1988 as a counterweight against the inherent litigation power of state defendants, to continue building on the successes of the Civil Rights Movement, like the Civil Rights Act and the Voting Rights Act," said Cecillia Wang, who recently became the national legal director of the American Civil Liberties Union.

In the wake of the landmark civil rights and environmental laws enacted in the 1960s and '70s, Second Circuit Judge James L. Oakes wrote in a 1979 article in the Western New England Law Review that there was a "growing tendency of the lower federal courts to permit an award of attorneys fees to parties vindicating the public interest by acting as 'private attorneys general.'"

That trend worried the increasingly conservative Supreme Court because it wasn't grounded in any federal statute. And so, in its 1975 decision in Alyeska Pipeline Service Co. v. Wilderness Society, the justices put a stop to it, reaffirming the so-called American Rule that says parties in litigation must generally bear their own costs.

At that point Congress stepped in, standardizing and enshrining into law what had previously been an ad hoc practice of awarding attorney fees to "prevailing parties" in certain types of civil rights litigation.

"Congress feared that the entire public interest litigation civil rights movement would wither away because most of those plaintiffs can't pay fees and most of those attorneys can't work for free," said Steve W. Fitschen, president of the National Legal Foundation, a religious liberty-focused nonprofit.

The importance of Section 1988 is evident from the wide range of legal advocacy groups that filed amicus briefs in the Stinnie litigation, supporting a broad definition of "prevailing party," from the left-leaning ACLU to the archconservative Alliance Defending Freedom.

Virginia "accomplished a feat no one thought was possible, getting all these groups to agree on something," Ciolfi said with a laugh.

While attorney fees are a vital revenue source for groups like the ACLU and Alliance Defending Freedom, experts said those types of large and well-funded advocacy groups could still make do if the Supreme Court sides with Virginia.

"We will continue to do these types of cases no matter what," said Christopher Dunn, legal director of the New York Civil Liberties Union. "The thing I worry about is the impact on the large number of civil rights attorneys at smaller firms."

Celli of Emery Celli, echoed that sentiment.

"There will be less private enforcement of indigent plaintiffs' civil rights" if the Supreme Court sides with Virginia, Celli said. "It's going to make our lives a hell of a lot harder."

Dunn also said the prospect of having to foot attorney fees can be a powerful tool for deterring bad behavior in and of itself.

The NYCLU recently secured a preliminary injunction against two upstate New York counties that had enacted policies banning immigrant resettlement, for instance.

Dunn said those counties then changed their executive orders in a way that made the case moot. The NYCLU is seeking roughly $200,000 in fees.

"That's a lot of money for Orange County," Dunn said. "Other counties in New York will see that result and think twice about doing the same thing."

"But if they were to get off the hook without paying any fees, that sends the message that there's no consequence for enacting unconstitutional policies," Dunn added.

The Arguments

After Section 1988 was enacted in 1976, the Supreme Court clarified the scope of the law in several subsequent cases.

In the 2001 decision in Buckhannon Board & Care Home Inc. v. West Virginia Dept. of Health & Human Resources, a 5-4 court narrowly rejected the so-called catalyst theory, which claimed plaintiffs should be able to seek fees under Section 1988 if their lawsuit led to a change in government policy, despite never securing a preliminary injunction or any other favorable ruling.

The majority held the catalyst theory would allow "an award where there is no judicially sanctioned change in the legal relationship of the parties."

In the 2007 Sole v. Wyner decision, meanwhile, a unanimous court ruled a plaintiff cannot seek Section 1988 fees for a successful preliminary injunction if they later lose on the merits.

Now, in Lackey v. Stinnie, the justices will look at the flip side of that coin.

Civil rights attorneys are confident that common sense and congressional intent are on their side, but many also said they're wary the Supreme Court decided to hear the case at all, given that the Fourth Circuit's en banc ruling to award fees more or less brought it into alignment with all the other federal appellate courts.

"Frankly, I was alarmed that the Supreme Court granted cert," said Gary R. Stein, a retired member of the New Jersey Supreme Court and a partner at Pashman Stein Walder Hayden PC, who authored an amicus brief supporting Stinnie on behalf of the New Jersey State Bar Association.

"In my judgment, the equities very clearly favor the plaintiffs," Stein added.

Before the Supreme Court, Stinnie and his supporters have a few key arguments.

In terms of policy, they say a broad definition of "prevailing party" promotes private enforcement of civil rights, furthering the goal that led Congress to enact Section 1988 in the first place. They also claim the status quo promoted judicial economy by encouraging both sides to end cases at the preliminary injunction stage, rather than continuing the fight just to secure or avoid attorney fees.

Virginia and its amicus supporters, meanwhile, claim the status quo imposes needless costs on states and local government bodies that are forced to pay fees, while giving civil rights attorneys too much leverage.

An amicus brief filed by the Local Government Legal Center, for example, claims attorneys can use "a potentially exorbitant award of attorney's fees to bully an elected body into repealing public policy."

Lackey's primary argument is textual, however, claiming Section 1988 demands a final ruling on the merits before a litigant can be considered a "prevailing party," and calling Stinnie's argument merely a rehash of the discredited catalyst theory.

Preliminary injunctions "are not a determination on the merits or a final judgment," the commissioner wrote in his brief. "Rather, they merely predict the 'probability of' the party's 'ultimate success.'"

Civil rights attorneys have bristled at that narrative, noting preliminary injunction hearings often require extensive briefing and fact-finding. The hearing in the underlying Stinnie lawsuit, for instance, was a week long.

"Often you have to invest a lot of resources to get a preliminary injunction," Stein said. "It's almost like a mini trial. You may even put witnesses on the stand."

Several groups that filed amicus briefs on behalf of Virginia did not respond to requests for comment for this article. Counsel for Lackey declined to comment.

During oral argument in the Stinnie case last month, the justices seemed noncommital. Occasionally, they seemed to acknowledge that Stinnie's position seems grounded in common sense.

"A likelihood of success is better than an unlikelihood of success, and we have to decide who's going to pay these fees," Justice Sonia Sotomayor said at one point.

For much of the hearing, however, the justices debated various hypotheticals and seemed to focus on technical points, like whether a preliminary injunction disappears entirely, as a matter of law, once the case it's a part of is moot.

"We have to look at not just what happened with the [preliminary injunction] but what happened after," Justice Neil Gorsuch said to Stinnie's attorneys at one point. "It's pretty hard to say your argument really isn't a catalyst theory."

Writing at Reason.com, University of Notre Dame, the Law School professor Samuel Bray said that focus on narrow legal questions and textual interpretation doesn't bode well for Stinnie.

"The terrain on which the discussion happened was not about how the court can set optimal incentives for public interest litigation," Bray said. "And in this case, the formalist terrain is friendly for the petitioner."

If the Supreme Court does in fact side with Virginia on narrow, technical grounds, the ACLU's Wang said, it will be a major blow for indigent plaintiffs whose constitutional rights have been trampled.

"It will really be a sort of earthshaking disturbance in the civil rights enforcement system that Congress set up," Wang said.

--Editing by Lakshna Mehta.

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