Preliminary Injunctions Don’t Support Attorney’s Fees in Civil Rights and Some Employment Law Cases

The U.S. Supreme Court recently issued an important decision in Lackey v. Stinnie that will significantly affect civil rights litigation that could benefit employers and other defendants facing civil rights claims. In a 7-2 decision authored by Chief Justice Roberts, the Court established a bright-line rule that plaintiffs who obtain only preliminary injunctive relief before their case becomes moot are not "prevailing parties" eligible for attorney's fees under 42 U.S.C. §1988(b).

In other words, attorney's fees will be in play for a "prevailing party". When that party proves actual damages and not merely preliminary injunctive relief. Which requires parties to do or refrain from doing specific acts. Examples include temporary restraining orders, reinstatement to employment positions, non-enforcement directives, accommodations pending trial, antiretaliation orders and more.

The Court's Holding

In a decision that reverses the trend in eleven Circuit Courts of Appeals, the Supreme Court held that:

1. A plaintiff "prevails" under §1988(b) only when a court conclusively resolves the plaintiff's claim by granting enduring judicial relief on the merits that materially alters the legal relationship between the parties.
2. Preliminary injunctions do not qualify because they do not conclusively decide a case on the merits but instead preserve the status quo until a trial can occur.
3. Both the change in the parties' legal relationship and its permanence must result from a judicial order, not from external events that render a dispute moot.
4. A preliminary injunction that becomes irreversible due to mootness is different from relief that is permanent by virtue of a judicial order.

The Court's ruling establishes what Chief Justice Roberts called "a straightforward, bright-line rule" that is "easy to administer" and reduces the risk of "significant litigation over attorney's fees".

The following statutes are covered by this ruling: Primary Civil Rights Statutes

1. 42 U.S.C. §1983 (constitutional claims against state actors)
2. 42 U.S.C. §1981 (race discrimination in contracting)
3. 42 U.S.C. §1982 (property rights)
4. Title VI of the Civil Rights Act (discrimination in federally funded programs)
5. Americans with Disabilities Act (ADA) - 42 U.S.C. §12205 includes a fee-shifting provision for the "prevailing party" that mirrors the language in §1988(b).
6. Fair Housing Act - 42 U.S.C. §3613(c)(2) authorizes reasonable attorney's fees and costs to the "prevailing party".

Employment Law Statutes

1. Title VII of the Civil Rights Act of 1964 - 42 U.S.C. §2000e-5(k) allows for attorney's fees to the "prevailing party" in employment discrimination cases.
2. Age Discrimination in Employment Act (ADEA) - 29 U.S.C. §626(b) incorporates the remedies of the Fair Labor Standards Act, including attorney's fees for prevailing parties.
3. Equal Pay Act - 29 U.S.C. §216(b) provides for reasonable attorney's fees to be paid by the defendant if the plaintiff prevails.
4. Family and Medical Leave Act (FMLA) - 29 U.S.C. §2617(a)(3) allows for reasonable attorney's fees to the prevailing party.

Understanding these different forms of injunctive relief helps businesses assess their potential exposure after Lackey. While preliminary injunctive relief no longer necessarily triggers fee liability. Businesses should remain mindful that other forms of relief, particularly permanent injunctions and consent decrees, still qualify plaintiffs as "prevailing parties" eligible for attorney's fees.

Impact on Businesses and Employers

This decision has several important implications for businesses, particularly those that may face civil rights and certain employment litigation:

1. Reduced Fee Exposure: Businesses defending against civil rights claims now face significantly lower financial risk if plaintiffs secure only a preliminary injunction before the case becomes moot.
2. Strategic Options: The ruling creates potential strategic advantages for defendants. If a plaintiff obtains a preliminary injunction, defendants may consider legislative or policy changes that could moot the case and avoid attorney's fee liability.
3. Lessened Litigation Pressure: Plaintiffs and their attorneys may be less eager to pursue certain types of civil rights cases if they're uncertain about recovering their fees, potentially reducing the overall volume of such litigation.
4. Cost Predictability: The bright-line rule provides businesses with greater predictability regarding potential litigation costs.
5. Fee Dispute Prevention: The clear standard eliminates a previously contentious area of fee litigation, potentially reducing post-case disputes over fee entitlement.

Practical Recommendations for Businesses

In light of this decision, businesses should consider the following steps:

1. Review Compliance Posture: Assess current practices to ensure compliance with civil rights laws to avoid litigation altogether.
2. Evaluate Pending Litigation: For businesses currently facing civil rights claims, reconsider settlement strategies if preliminary injunctions have been issued but final judgment hasn't been reached.
3. Document Voluntary Changes: If making voluntary changes to policies challenged in litigation, document that these changes are independent business decisions rather than responses to litigation pressure.
4. Consult with Counsel Early: Engage with experienced employment counsel at the first sign of potential civil rights claims to develop strategic approaches that take advantage of this new ruling.
5. Review Insurance Coverage: Ensure that your business insurance adequately covers civil rights claims and understand how this decision might affect coverage determinations.

By understanding the implications of Lackey v. Stinnie, businesses can better position themselves to manage the risks and costs associated with civil rights litigation while maintaining compliance with applicable laws