The 7th Circuit, on June 16, 2004, decided the case of Petersen v. Gibson, holding that a party will not have an opportunity to receive judgment on attorney’s fees unless the party is considered a prevailing party. To be a prevailing party, the court held, that the party must have obtained judicially-sanctioned relief against the opposing party.
This decision is important to understand so that a practitioner, involved in a § 1988 claim, does not enter into a settlement without first realizing that a judgment on attorney’s fees will not be possible.
On June 13, 1995, Ms. Petersen had an appointment to get her hair colored at the Mario Tricoci Salon in Bloomingdale’s Stratford Square Mall. After three hours and two attempts to correct a botched coloring job, Ms. Petersen was left under a hair dryer while her stylist went to lunch. When the treatment began to burn her scalp and her stylist was nowhere to be found, Ms. Petersen, with the foils still in her hair, left the salon without paying.
The salon employees contacted the Bloomingdale police and Officer Gibson was dispatched to the scene. Officer Gibson contacted Ms. Petersen, who returned to the store. After hours of conversation, with Ms. Petersen offering to pay part of the bill, and the salon refusing to accept anything less than full payment, Officer Gibson arrested Ms. Peterson and detained her for two more hours at the police station. For seven months, the salon pursued Ms. Petersen’s prosecution, but then the state dismissed the charges. Ms. Petersen, thereafter, sued claiming false arrest and wrongful detention against Officer Gibson, malicious prosecution, battery and negligence against the salon, and conspiracy against all defendants.
The jury found that Officer Gibson violated Ms. Petersen’s constitutional rights by wrongly arresting and detaining her, that the salon was liable for malicious prosecution and that there was no conspiracy. The jury returned a verdict of $40,000 in compensatory damages and $10,000 in punitive damages against the salon, but only a $1.00 nominal damage award against Officer Gibson.
Ms. Petersen moved for a new trial on the damage award against Officer Gibson arguing the jury was given improper instructions, which the court granted. However, before a new trial began, the parties reached a settlement in which Officer Gibson paid $10,000. Ms. Petersen then moved for attorney’s fees against Officer Gibson. The court awarded $288,087.25 in fees and $20,840.03 in costs. Officer Gibson appealed the court’s award of attorney’s fees and costs.
Upon appeal, the 7th circuit found the main issue to be whether Ms. Petersen was a “prevailing party” under § 1988. To be a prevailing party, “a plaintiff must obtain formal judicial relief, and not merely ‘success.’” Crabill v. Trans Union, 259 F.3d 662, 667 (7th Cir. 2001). The only judgment in the case was the jury verdict for nominal damages, but it was vacated. The court noted that even if it had not been vacated case law demonstrates that while nominal damages can give a person prevailing status, the nominal damages allude to the fact that an essential element for monetary relief must be missing, and so the only reasonable fee is no fee at all. Farrar v. Hobby, 506 U.S. 103, 115 (1992).
A judgment will constitute relief only if it affects the behavior of the defendant toward the plaintiff. Rhodes v. Stewart, 488 U.S. 1, 4 (1988). Since the nominal damage award was vacated, it did not change the behavior of the parties, and, thus, cannot give Ms. Petersen prevailing party status. While case once held that a party “prevailed” if the lawsuit influenced the desired relief by bringing a voluntary change in the defendant, Buckhannon Bd. & Care Home, Inc. v. West Virginia Dept. of Health & Human Res., changed the law and required that the plaintiff obtain, specifically, a “judicially-sanctioned change” between the parties. 532 U.S. 598, 605 (2001).
Because Ms. Petersen received no relief from the judgment of the court, and because the settlement was not a “judicially-sanctioned” change, Ms. Petersen was not a prevailing party under § 1988, and was not entitled to attorney’s fees. However, since costs are not necessarily viewed in the same light as fees, the issue of costs was vacated and remanded for further analysis.
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