A recent Longshore case, Berry v. A.F. Cent. Welfare Fund, in the U.S. Court of Appeals for the Ninth Circuit addressed the “catalyst theory” and its impact on recovery of attorney’s fees. The “catalyst theory” which Plaintiff relied on states that a Plaintiff “successfully prosecutes” a case if the case achieves the desired result—thus materially altering the legal relationship between the parties and directly benefiting the plaintiff. According to the Ninth Circuit, however, the “catalyst theory” is unavailable unless there is (1) successful prosecution of a claim and (2) “judicially sanctioned” relief. Moreover, the “catalyst theory” is no longer good law under the U.S. Supreme Court’s ruling in Buckhannon.
Original Case
Plaintiff originally sued Employer for disability benefits under the Longshore and Harbor Workers’ Compensation Act (LHWCA). An administrative law judge (ALJ) awarded Plaintiff benefits in 2015. The ALJ also awarded Plaintiff attorney’s fees incurred in obtaining the award.
Employer paid Plaintiff’s disability benefits for four years but stopped in 2019 after identifying “suitable alternative employment.” Plaintiff requested a default order from the Department of Labor (DOL), arguing that Employer defaulted on their payment obligations under the ALJ’s compensation order. The DOL declared defendants in default and ordered them to pay overdue benefits plus penalties, and later issued a supplemental declaration of default order.
Plaintiff sued in federal court under 33 U.S.C. §918(a), which allows a claimant who has obtained a supplemental default order from the DOL to file the order in district court, and the court must “enter a judgment for the amount declared in accordance with the law.” Plaintiff sought a judgment for the amount in the DOL’s supplemental default order. The defendants then paid all compensation and penalties and interest but moved to dismiss the case as moot.
Plaintiff also requested an award of attorney’s fees under 33 U.S.C. § 928(a) and argued the case was not moot because of the pending fee request. 33 U.S.C. §928(a) allows a plaintiff to recover attorney’s fees if she used an attorney in the “successful prosecution of” a disputed claim for compensation. There are three criteria for entitlement under the statute: (1) the claim is disputed, (2) the claimant utilizes the services of counsel, and (3) the claim is successfully prosecuted.” (Ford Aerospace & Commc’ns Corp v. Boling, 684 F.2d 640, 642) (9th Cir. 1982).
Under the “successful prosecution” interpretation, a “plaintiff must obtain some actual relief” that “materially alters the legal relationship between the parties modifying the defendant’s behavior in a way that directly benefits the plaintiff.” (Richardson v. Cont’l Grain Co., 336 F.3d 1103,1106) (9th Cir.. 2003). Plaintiff claimed this met the requirements of, and relied upon, the “catalyst theory.”
A magistrate judge issued a report and recommendation (“R&R”) denying Plaintiff’s fee request and dismissing the case as moot. The district court adopted the R&R and held that Plaintiff did not “successfully prosecute” her claim under §928(a) because “no proceeding in this court gave any party any legal right or obligation it did not already have”—to which Plaintiff appealed—thus triggering the U.S. Court of Appeals of the Ninth Circuit’s decision.
Ninth Circuit’s Decision
The U.S. Court of Appeals for the Ninth Circuit followed the rule in Buckhannon (532 U.S. at 601) in which the Supreme Court rejected the catalyst theory as a basis for recovering fees under a prevailing party statute.” The Court in Buckhannon explained that “a defendant’s voluntary change in conduct, although perhaps accomplishing what the plaintiff sought to achieve by the lawsuit, lacks the necessary judicial imprimatur on the change”—thus to qualify as a “prevailing party” the plaintiff must obtain a “judicially sanctioned change in the legal relationship of the parties.” The courts have consistently applied Buckhannon to require a party to obtain “judicially sanctioned relief” to qualify as a “prevailing party” under similar fee-shifting statutes.
The Court stated that Buckhannon applies only to fee requests under 33 U.S.C. § 928(a). Because the Plaintiff relied solely on the defendant’s voluntary conduct, which was not the necessary “judicial imprimatur,” she was not a successful party and could not recover fees.
Plaintiff relies on “Catalyst Theory” under Clark
The Plaintiff was not a “prevailing party” as she did not obtain any relief from the district court. Plaintiff relied on Clark v. City of Los Angeles, 803 F.2d 987, 989 (9th Cir. 1986) for the theory that a Plaintiff does not need to obtain “formal relief” to enjoy “prevailing party status”.
In Clark, the plaintiffs brought a civil rights case challenging police harassment and won at trial. However, on appeal, the case was remanded for a new trial because of an evidentiary issue. The plaintiffs voluntarily dismissed the case, and the court affirmed the district court’s holding that the plaintiff’s “prevailed” for purposes of a fee award under §1988 because the harassment they suffered “ended with a jury verdict”.
By contrast, Plaintiff in this matter did not obtain relief from the district court. Although Clark endorsed the “catalyst theory” it is no longer good law because it is deemed “clearly irreconcilable” with Buckhannon. Buckhannon made it clear that a party cannot “prevail” under a similar-fee shifting statue based on the catalyst theory. Thus, Clark was overruled.