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Myrta Torres-Santiago; Migdalia Rodriguez-Rivera v. Municipality of Adjuntas; Jaime H. Barlucea-Maldonado

September 7, 2012

MYRTA TORRES-SANTIAGO; MIGDALIA RODRIGUEZ-RIVERA; JOSE RIVERA-DEL VALLE, PLAINTIFFS, APPELLANTS,
v.
MUNICIPALITY OF ADJUNTAS; JAIME H. BARLUCEA-MALDONADO, IN HIS OFFICIAL CAPACITY AS MAYOR OF THE MUNICIPALITY OF ADJUNTAS, DEFENDANTS, APPELLEES, WALVER BAEZ-LUGO, IN HIS PERSONAL AND OFFICIAL CAPACITY; DANIEL PORTELA, IN HIS PERSONAL AND OFFICIAL CAPACITY; HERNAN CARABALLO, IN HIS PERSONAL AND OFFICIAL CAPACITY; CLARIBEL PAGAN, IN HER PERSONAL AND OFFICIAL CAPACITY; JOHN DOE; RICHARD DOE, DEFENDANTS.



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO [Hon. Juan M. Perez-Gimenez, U.S. District Judge]

The opinion of the court was delivered by: Lipez, Circuit Judge.

Before Lynch, Chief Judge, Torruella and Lipez, Circuit Judges.

This appeal involves an award of $59,787.50 in attorney's fees against unsuccessful plaintiffs in a civil rights action. Plaintiffs Myrta Torres-Santiago, Migdalia Rodriguez-Rivera, and Jose Rivera-del Valle argue that their lawsuit was not so frivolous or unreasonable as to justify an award of fees to the defendants. We agree, except for Torres's inferior working conditions claim against Walver Baez-Lugo and Rivera's claims against Hernan Caraballo. There was no reasonable basis for those claims. Hence, we vacate the fee award and remand for further proceedings relating to any attorney's fees incurred by the Municipality of Adjuntas in relation to those claims only.

I.

Plaintiffs brought suit pursuant to 42 U.S.C. § 1983 and Article 1802 of the Puerto Rico Civil Code, P.R. Laws Ann. tit 31, § 5141, alleging that the Municipality of Adjuntas (the "municipality") and its Mayor, Jaime H. Barlucea-Maldonado (the "Mayor"), engaged in unlawful political discrimination in violation of the U.S. Constitution and the laws and Constitution of the Commonwealth of Puerto Rico. In making these claims, the complaint also named as defendants the plaintiffs' direct supervisors, Walver Baez-Lugo, Daniel Portela, and Hernan Caraballo (together, the "supervisory defendants") in their individual capacities, as well as the Mayor in his individual capacity. The complaint included due process and equal protection claims pursuant to the Fifth and Fourteenth Amendments to the Constitution. The plaintiffs sought compensatory and punitive damages and declaratory and injunctive relief.

The Mayor and supervisory defendants successfully moved, in their individual capacities, to dismiss plaintiffs' due process and equal protection claims. The municipality, the Mayor in his official and personal capacities, and the supervisory defendants in their personal capacities then filed a motion for summary judgment on the remaining claims. The motion was granted in favor of the supervisory defendants and denied as to the municipality and Mayor. On the eve of trial - more than a year after the plaintiffs first submitted a settlement demand - the municipality and Mayor made a settlement offer and engaged in negotiations.*fn1 Settlement negotiations were unsuccessful, and the parties proceeded to trial on January 19, 2010. On January 27, 2010, the jury returned a verdict in favor of the municipality and Mayor.

On March 17, 2010, the municipality filed a motion for $63,687.50 in attorney's fees pursuant to 42 U.S.C. § 1988(b), arguing that it was entitled to fees because the "[p]laintiffs engaged in a totally unfounded, frivolous and reiterated [sic] attempt to charge [d]efendants with political discrimination allegations." The supervisory defendants did not seek attorney's fees.

On September 7, 2010, the district court granted the motion in part. In a written decision, the district court began its analysis by listing "some important factors" that the Eleventh Circuit has identified for consideration when making the case-by-case determination about whether a plaintiff's claim is frivolous: "(1) whether the plaintiff established a prima facie case; (2) whether the defendant offered to settle; and (3) whether the trial court dismissed the case prior to trial or held a full-blown trial on the merits." (quoting Sullivan v. Sch. Bd., 773 F.2d 1182, 1189 (11th Cir. 1985)). Applying this law, the district court wrote the following:

[The municipality and Mayor] allege that the court should award them attorney['s] fees because Plaintiffs were aware that their claims against [Baez, Portela, and Caraballo] lacked merit. Yet, the Plaintiffs pursued their actions against these [supervisory] co-defendants[,] thus multiplying the costs of litigation. The Court agrees. After reviewing the evidence submitted at the motion for summary judgment stage, the Court found that the Plaintiffs were unable to establish a prima facie case against [the supervisory defendants] because Baez belonged to the same political party as Plaintiffs and because Plaintiffs were unable to establish any involvement on the part of Portela and/or Caraballo with respect to the alleged adverse employment actions complained of.

With regard to the municipality and Mayor, the district court recognized that the Sullivan factors indicated that the plaintiffs' claims were not frivolous or unreasonable:

Applying the Sullivan factors enumerated above, we would be forced to conclude that the Plaintiffs' action against Barlucea and the Municipality [was] not frivolous inasmuch as they were able to establish a prima facie case at the summary judgment stage, the [municipality and Mayor] offered settlement and a full-blown trial on the merits was seen as to these two co-defendants.

Nevertheless, the court noted contrary authority that supported a different outcome:

"[C]ases that are ultimately viewed as frivolous may well survive motions to dismiss under a system of notice pleading that does not require factual detail and even motions for summary judgment in which the evidence may be presented in sketchy fashion and credibility may not be taken into account." Greenberg v. Hilton Intern. Co., 870 F.2d 926, 940 (2d Cir. 1989). The Court first notes that the only reasons the Plaintiffs survived summary judgment were that, pursuant to the applicable standard, the Court could not make credibility determinations and the evidence had to be examined in the light most favorable to the Plaintiffs. The Plaintiffs must have known that they would not be afforded such indulgence at trial and to the extent they refused to accept a sound settlement offer prior to the commencement of the jury trial, the Court finds that the Plaintiffs' claim became unreasonable thereon.

The court provided no further rationale for its decision to award fees.

Read one way, the district court's language suggests that the plaintiffs' action only became unreasonable after they refused to settle the case on the eve of trial. If that were the district court's view, the only relevant litigation costs of the municipality would have been those related to case preparation from the time of the rejection of the settlement demand and the cost of trial. But the district court awarded the municipality $59,787.50 in attorney's fees, the cost it determined to be reasonable for the entire course of the litigation. Hence, we review the attorney's fee award as one that does, in fact, cover the entire course of litigation.

II.

We review fee awards for abuse of discretion. Lamboy-Ortiz v. Ortiz-Velez, 630 F.3d 228, 236 (1st Cir. 2010). "[T]hus we will not lightly substitute our judgment for that of the district court, reversing only 'if we are left with a definite and firm conviction that the court below committed a clear error of judgment.'" Id. (quoting Tang v. State of R.I., Dep't of Elderly Affairs, 163 F.3d 7, 13 (1st Cir. 1998) (internal quotation mark omitted)).

A. Legal Framework

Parties to civil litigation are generally responsible for their own attorney's fees under the so-called "American Rule." However, "[f]or private actions brought under 42 U.S.C. § 1983 and other specified measures designed to secure civil rights, Congress established an exception to the 'American Rule.'" Sole v. Wyner, 551 U.S. 74, 77 (2007). That exception operates to facilitate "effective access to the judicial process," Hensley v. Eckerhart, 461 U.S. 424, 429 (1983) (quoting H.R. Rep. No. 94-1558, at 1 (1976)) (internal quotation marks omitted), by granting federal district courts the discretion to "allow the prevailing party . . . a reasonable attorney's fee as part of the costs," 42 U.S.C. § 1988(b).

It is well established that "an award of fees in favor of a prevailing plaintiff in a civil rights suit is 'the rule, whereas fee-shifting in favor of a prevailing defendant is the exception.'" Lamboy-Ortiz, 630 F.3d at 236 (quoting Casa Marie Hogar Geriatrico, Inc. v. Rivera-Santos, 38 F.3d 615, 618 (1st Cir. 1994)). Indeed, a "prevailing defendant may be awarded fees only 'upon a finding that the plaintiff's action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith.'" Id. (quoting Rossello-Gonzalez v. Acevedo-Vila, 483 F.3d 1, 6 (1st Cir. 2007)). This standard is, by design, a difficult one to meet. "Congress granted parties the prospect of a reasonable attorney's fee under 42 U.S.C. § 1988 to encourage the prosecution of legitimate civil rights claims; to award fees to prevailing defendants when the history of a case does not justify it undercuts that goal and chills civil rights litigation." Id.

When determining whether a plaintiff's claims were "frivolous, unreasonable, or without foundation," or whether "the plaintiff continued to litigate after [the claims] clearly became so," Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421, 422 (1978), the court should not evaluate the reasonableness of the suit based on its ultimate failure:

[I]t is important that a district court resist the understandable temptation to engage in post hoc reasoning by concluding that, because a plaintiff did not ultimately prevail, his action must have been unreasonable or without foundation. This kind of hindsight logic could discourage all but the most airtight claims, for seldom can a prospective plaintiff be sure of ultimate success. No matter how honest one's belief that he has been the victim of discrimination, no matter how meritorious one's claim may appear at the outset, the course of litigation is rarely predictable. Decisive facts may not emerge until discovery or trial. The law may change or clarify in the midst of litigation.

Id. at 421-22. We have stated that such "hindsight logic" may be avoided by focusing on the reasonableness of a plaintiff's claim at the time of filing, Lamboy-Ortiz, 630 F.3d at 237, keeping in mind that "[e]ven when the law or the facts appear questionable or unfavorable at the outset, a party may have an entirely reasonable ground for bringing suit," Christiansburg Garment, 434 U.S. at 422.

When reviewing the district court's decision to award fees, we too must assess the reasonableness of the suit at the time the complaint was filed. To do so, we must inevitably rely on the record created after the complaint was filed. Although determinations about whether to award attorney's fees are generally focused on the claims as they existed at the time the complaint was filed, "fees also may be awarded on rare occasions where 'the plaintiff continued to litigate after [the claims] clearly became [frivolous, ...


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