[Congressional Record Volume 149, Number 77 (Thursday, May 22, 2003)]
[Senate]
[Pages S7000-S7001]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD (for himself, Mr. Kennedy, and Mr. Jeffords):
  S. 1117. A bill to provide a definition of a prevailing party for 
Federal fee-shifting statutes; to the Committee on the Judiciary.
  Mr. FEINGOLD. Mr. President, I am pleased today to introduce the 
Settlement Encouragement and Fairness Act of 2003. 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 were 
the plaintiff prevails. In laws involving public accommodations, 
housing, labor, disabilities, age discrimination, violence against 
women, voting rights, pollution and others, Congress has acted over and 
over again to empower private litigants in their pursuit of justice. 
Presently, there are over two hundred statutory fee-shifting provisions 
that allow for some sort of payment of attorneys' fees to a prevailing 
plaintiff.
  Until 2001, 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 Stengall once said, 
``It ain't over 'til 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

[[Page S7001]]

some lawyers will decide 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 
who labored 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 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 2003 will help insure that 
all our citizens have the ability to meaningfully challenge injustice.
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