[Congressional Record Volume 148, Number 147 (Thursday, November 14, 2002)]
[Senate]
[Page S11081]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD (for himself, Mr. Kennedy, and Mr. Jeffords):
  S. 3161. A bill to provide a definition of a prevailing party for 
Federal fee-shifting statutes; to the Committee on the Judiciary.
  Mr. FEINGOLD. Madam President, I am pleased today to introduce the 
Settlement Encouragement and Fairness Act of 2002. This bill provides 
that when plaintiffs bring a lawsuit that acts as a catalyst for a 
change in position by the opposing party, they will be considered the 
``prevailing party'' for purposes of recovering attorneys' fees under 
Federal law. The bill will help ensure that people who are the victims 
of civil rights, environmental, and worker rights' abuses can obtain 
legal representation to enforce their rights.
  Over the course of our history, Congress has often enacted laws 
encouraging private litigants to implement public policy through our 
court system. An integral part of many such laws are provisions that 
help individuals obtain adequate legal representation by providing that 
the defendants will pay the plaintiffs' attorneys' fees in cases where 
the plaintiff prevails. In laws involving public accommodations, 
housing, labor, disabilities, age discrimination, violence against 
women, voting rights, pollution, and other areas, Congress has acted 
over and over again to empower private litigants in their pursuit of 
justice. Currently, there are over two hundred statutory fee-shifting 
provisions that allow for some sort of payment of attorneys' fees to a 
prevailing plaintiff.
  Until last year, in interpreting these fee-shifting statutes in cases 
where a settlement was reached before trial, nine circuit courts of 
appeals embraced the ``catalyst theory'' to determine whether 
attorneys' fees could be obtained. The catalyst theory required the 
payment of fees where the lawsuit caused a change in the position or 
conduct of the defendant. Only one circuit court, the Fourth Circuit, 
applied a more narrow definition of prevailing party, requiring a 
judgment or a court approved settlement in order for a plaintiff to 
obtain attorneys' fees.
  In Buckhannon Board of Care & Home Inc. v. West Virginia Department 
of Health and Human Services, 2001, a case arising out of the Fourth 
Circuit, the U.S. Supreme Court ruled, in a 5-4 decision, that 
plaintiffs may recover attorneys' fees from defendants only if they 
have been awarded relief by a court, not if they prevailed through a 
voluntary change in the defendant's behavior or a private settlement. 
The Buckhannon ruling eliminated the catalyst theory for all fee 
shifting statutes in federal law.
  The bill I introduce today restores the catalyst theory that the vast 
majority of courts had approved prior to the Buckhannon decision as a 
basis for seeking attorneys fees under Federal fee shifting statutes. 
It provides a new definition of ``prevailing party'' for all such 
statutes to encompass the common situation where defendants alter their 
conduct after a lawsuit has commenced but without waiting for a court 
order requiring them to do so. This critical change in the definition 
of ``prevailing party'' will allow attorneys representing clients who 
cannot otherwise afford to hire a lawyer to recover their costs and to 
be paid a reasonable rate for their work.
  The Buckhannon case itself illustrates the need for this legislation. 
Buckhannon Board and Care Home in West Virginia, an operator of 
assisted living residences, failed a state inspection because some 
residents were incapable of ``self-preservation'' as defined by State 
law. After receiving orders to close its facilities, Buckhannon sued 
the State seeking declaratory and injunctive relief that the ``self-
preservation'' requirement violated the Fair Housing Amendments Act and 
the Americans with Disabilities Act. While the lawsuit was pending but 
before the court ruled, the state legislature eliminated the ``self-
preservation'' requirement.
  Imagine how the plaintiffs felt when they learned that their lawsuit 
had forced a change in the law not only for their own case but also for 
all of the other individuals who had been subject to the improper self-
preservation doctrine. If ever there was a complete and total victory 
caused by litigation, this was it. But, as Casey Stengel once said, 
``It ain't over 'till it's over.'' Once the State legislature changed 
the law, the District Court granted defendant's motion to dismiss the 
case as moot and denied Buckhannon's request for attorneys' fees. The 
court ruled that the legislative action did not amount to a judicially 
required change in position that would permit Buckhannon to be 
considered a ``prevailing party'' in the case. On appeal, the Court of 
Appeals for the Fourth Circuit and then the U.S. Supreme Court denied 
attorneys' fees for the plaintiffs, ruling that because the change in 
the defendants' conduct was voluntary rather than ordered by the court, 
Buckhannon was not a prevailing party.
  I believe the narrow definition of `prevailing party' endorsed by the 
Buckhannon decision will result in many injustices going unchallenged. 
Indeed, in calculating whether to take a case, an attorney for a 
plaintiff will have to consider not only the chances of losing, but the 
chances of winning too easily. If businesses or individuals are able to 
engage in egregious conduct, refuse to change their behavior without a 
lawsuit being filed against them, and then avoid paying attorneys' fees 
by changing their conduct on the eve of trial, the effect will be that 
some lawyers will decide that they cannot afford to take a case even if 
the claims are very strong.
  Imagine a case involving a legitimate claim of housing discrimination 
where, after many months, perhaps even years of work, as the attorney 
for the plaintiff prepares into the evening for opening statements, the 
attorney learns that the defendant has admitted its wrongful conduct 
and offered substantial compensation and a promise to change its 
practices. This offer came about only because of the spotlight the 
lawsuit put on the defendant and the possibility of a large jury 
verdict. This would be a complete victory for the plaintiff, but under 
Buckhannon, the attorney who labored for years to bring about this 
result may not be paid. Later, if the same defendant returns to 
discriminatory practices, the next plaintiff might very well not be 
able to find competent counsel who will take the case.
  Ironically, the failure to correct the Buckhannon decision could lead 
to plaintiffs' attorneys dragging out law suits out far beyond a point 
in time where the parties could reach a fair settlement, in order to 
insure that they meet the Buckhannon definition of ``prevailing 
party.'' This will increase the costs of litigation and discourage 
settlement. Simply put, Buckhannon creates unnatural tensions between 
attorneys and clients and may even push attorneys to not act in the 
best interest of their clients.
  Certainly we can do better. Congress has passed important laws to 
protect the public in the work place and in our communities; we must 
ensure that these laws can be enforced, when necessary, in court. The 
Settlement Encouragement and Fairness Act of 2002 will help insure that 
all our citizens have the ability to meaningfully challenge injustice.
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