Ninth Circuit Issues A Pair Of American With Disabilities Act Decisions On Attorney’s Fees—Confronting Reduction Factors And A Standing Issue

Federal Court of Appeals Overturns Two Fee Denial Orders in ADA Cases.

            The American with Disabilities Act of 1990 (ADA), 42 U.S.C. secs. 12101-12213, has a federal fee-shifting provision in section 12205, which allows a district court “in its discretion” to award the “prevailing party … a reasonable attorney’s fees.”  In order to be a “prevailing party,” a litigant must demonstrate that (1) he achieved a material alteration of the parties’ legal relationships, and (2) the alteration was judicially sanctioned.  P.N. v. Seattle Sch. Dist. No. 1, 474 F.3d 1164, 1172 (9^th Cir. 2007).  A prevailing party in an ADA case ordinarily recovers attorney’s fees unless special circumstances render such an award “unjust.”  Barrios v. Cal. Interscholastic Fed’n, 277 F.3d 1128, 1134 (9^th Cir. 2002).  In two recent decisions, the Ninth Circuit Court of Appeals reversed ADA fee denial orders.  The first denial was based on a district court’s determination that the plaintiff had failed to provide a prelitigation notice of corrective measures and had unreasonably protracted litigation by waiting months to reply to the defense’s curative proposals.  The second denial was based on a district court’s determination that, at the time of the commencement of litigation, plaintiff did not demonstrate standing by way of an intention to return to the noncompliant Santa Barbara hotel.  Both determinations were overturned on appeal.  We now discuss these two decisions.

1. Jankey v. Poop Deck, Case No. 06-55957 (9^th Cir. Aug. 12, 2008).

In this case, an ADA plaintiff’s counsel failed to send any prelitigation notice of correction (which these blogs have found to be somewhat routine in these cases) and jockeyed for at nearly six months before seriously responding to serious defense offers to make structural corrections ameliorating disability barriers.  Eventually, the parties reached a formal settlement agreement (which was blessed by the district court) under which modifications were agreed to be made, with the issue of attorney’s fees being reserved for future determination by the district judge.  The district court denied fees outright, finding it would be unjust to award fees because “plaintiff has failed to provide prelitigation notice and has unreasonably protracted litigation by waiting nearly five months to reply to defendants’ proposal remedy of the A.D.A. violation.” 

The Ninth Circuit reversed and remanded. 

Defendants first argued that plaintiff was not a prevailing party.  Not!, said the federal appellate court.  The settlement agreement altered relationships and was blessed by the district judge, which meant that plaintiff prevailed.

Plaintiff argued that the district court’s consideration of prelitigation notice as a factor in the fee entitlement calculus was error.  The Ninth Circuit agreed, finding that “[d]enying attorney fees altogether as ‘unjust’ because of a lack of prelitigation notice would constitute, in essence, a sanction for failing to provide notice”—a result foreclosed by the same appellate court’s Skaff v. Meridien North America Beverly Hills, LLC, 506 F.3d 832 (9^th Cir. 2007) opinion holding that pre-suit notice was not a prerequisite to a fee award.  The crucial distinction was that this prelitigation notice factor could not be used a basis to deny fees outright in an ADA case.

The Ninth Circuit also held that it was erroneous for the district court to deny, rather than just reduce, fees based on the “protracting litigation” rationale.  It did not disagree that there was evidence of record indicating that plaintiff’s counsel dragged their feet on responding to facially reasonable corrective proposals by the defense.  However, this type of activity could only be used to reduce fees, but not deny them altogether.  The federal appellate panel also indicated that the failure to provide prelitigation notice, while not a basis to deny fees, could be used as a factor in reducing a fee award.  (An appellate court can giveth and taketh away in very quick fashion!) 

Nevertheless, picking up on recent themes echoed by Presiding Circuit Judge Kozinski in Moreno (a decision reviewed  in our August 2, 2008 post), any unnecessary fees resulting from a lack of prelitigation notice must be explained in detail—with the federal appeals court extending the duplicative fee specificity mandate of Moreno to unnecessary fee specificity in this opinion.  The Ninth Circuit found that the lack of prelitigation notice in this particular case did not result in the occurrence of unnecessary fees, but did find that plaintiff’s recalcitrance in responding to later defense corrective proposals likely did give rise to grounds for reducing a fee award.  However, it remanded to the district court to weigh how plaintiff’s protraction of litigation should impact a fees award.  (The prelitigation notice factor slipped into the silent sea, because the Ninth Circuit found it would not have materially avoided fees in light of the defense not offering a corrective plan until seven months after the lawsuit was filed.)

2. D’Lil v. Best Western Encina Lodge & Suites, Case No. 06-55516 (9^th Cir. Aug. 12, 2008).

Here, the parties entered into a consent decree that settled all injunctive relief and damage issues after three years of litigation.  The attorney’s fees/costs issues were reserved for future resolution.  The district judge sua sponte raised a standing issue and, after further briefing and a hearing, denied any fees/costs on this basis.  The theory was there was no indication at the time the complaint was filed that plaintiff was going to return to the noncompliant hotel, reinforced by credibility problems in that plaintiff had filed 60 ADA suits and had not returned to many of the establishments at issues in the other cases.

The Ninth Circuit, again, reversed and remanded, in a sharply divided panel drawing a dissent by Circuit Judge Rymer.

Circuit Judge Reinhardt, writing for the majority, agreed that plaintiff must prove her injury was “actual or imminent,” which in the ADA context meant demonstrating an intent to return to the geographic area where the accommodation was located and a desire to visit the hotel if it were made accessible.  The majority found she had visited in the past and had three upcoming trips planned to Santa Barbara, enough evidence to hurdle the standing obstacle.  Circuit Judge Rymer, in her dissent, found that there was a timing glitch—plaintiff presented no concrete plan or intent to return to the hotel as of the time she filed her complaint. 

The majority also was disturbed by the district court’s credibility reservations based on plaintiff’s filing of 60 prior ADA suits and inferences from past testimony that she never did have plans to revisit the accommodations at issue in those suits.  They actually rejected the district court’s adverse credibility determination against plaintiff based on her prior history of ADA litigation.  In dissent, Circuit Judge Rymer criticized the majority for questioning the district court’s credibility determinations (which are generally reserved for the trial judge), finding that statements made in the prior litigation—coupled with the fact plaintiff did in fact not return to the accommodations at issue in prior suits—demonstrated an insincerity in her testimony about wanting to return to the Santa Barbara hotel in the future.