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The degree of a “Prevailing Party” for Attorney Fees in a RLUIPA action argued in the Second Circuit Court of Appeals

Today we argued in the Second Circuit Court of Appeals in New York City  the issue of how much success must a party have to be a “prevailing party,” to secure attorney fees recoverable under RLUIPA. The United States District Court held below that under Supreme Court precedent, attorney fees are available at the time of judgment if the position of the parties materially changed. Given that prior to the judgment the Chabad did not have a Certificate of Appropriateness, and after the trial and judgment, the Court Ordered a Certificate of Appropriateness to issue, the position of the parties materially changed and awarded fees.

The Borough of Litchfield argued on appeal that no benefit was given to the Chabad through the judgment below even after conceding that prior to trial the Chabad did not have the ability to secure a Certificate of Appropriateness and could only secure it after trial upon the ruling of the Court. The Court of Appeals judges appeared skeptical of the argument raised by the Borough. After oral argument, the Court of Appeals announced that it would take the matter under advisement and will be issuing an appeal soon

By way of background, in August 2017 we successfully took a RLUIPA case to trial in the United States District Court in New Haven, Connecticut called Chabad Lubavitch of Litchfield vs. the Historic District of the Borough of Litchfield. This case involved one count alleging a violation of the Substantial Burden provision of RLUIPA and the only thing sought at trial was injunctive relief. Once the proofs were entered, the Court took the matter under advisement and later issued a ruling finding in favor of the Chabad. No appeal was taken of the decision.

The Chabad then moved for attorney fees and cost pursuant to 42 U.S.C. § 1988(b) and sought attorney’s fees in the amount of $1,533,834 and costs in the amount of $106,276.36, for a total award request of $1,640,110.36. The fee request was large as the case had been pending for nearly a decade, producing nine written opinions, one appeal to the Second Circuit Court of Appeals and an appeal to the United States Supreme Court. Ultimately, the court awarded the Chabad attorney’s fees in the amount of $611,622.09 and costs in the amount of $105,281.36, for a total award of $717,405.95.

The court’s fee award was the culmination of a more than decade-long, hard-fought religious land use dispute between the Chabad and defendants. The dispute began in 2007 when the HDC denied the Chabad’s application for a Certificate of Appropriateness that was needed to renovate an historic structure the Chabad owns to use as a religious facility. In 2009, the Chabad filed its initial complaint alleging the HDC’s denial violated its rights under RLUIPA, the First and Fourteenth Amendments to the U.S. Constitution, the Connecticut State Constitution and other Connecticut statutes. The HDC denied any liability throughout the entire litigation.

After eight years of litigation, this case was tried during a three-day bench trial in August 2017. In November 2017, the district court ruled that defendants had violated the Chabad’s rights under RLUIPA’s Substantial Burden Clause and issued a Judgment and Mandatory Injunction against defendants, ordering the HDC to approve the Chabad’s application for a Certificate of Appropriateness subject to certain parameters.

Because the Chabad prevailed on the merits of its RLUIPA Substantial Burden claim and obtained injunctive relief in its favor, as the “prevailing party” the Chabad submitted a timely Motion for Attorney Fees and Costs pursuant to 42 U.S.C. § 1988(b) on November 16, 2017.

After the Chabad’s Motion for Attorney Fees and Costs was fully briefed, defendants filed a motion seeking permission to file supplemental information. The supplemental information defendants sought to admit related to the HDC’s approval of an amended application for a Certificate of Appropriateness by the Chabad, which defendants again claimed negated the Chabad’s “prevailing party” status. The Chabad opposed the motion, once again arguing such post-judgment actions have no bearing on its “prevailing party” status.

On May 23, 2018, the district court issued its Ruling re: Motion for Attorney’s Fees and Costs. In short, the court confirmed that the Chabad is the “prevailing party” in this matter pursuant to 42 U.S.C. § 1988(b), rejecting defendants’ arguments to the contrary and denying their motion to supplement. However, the court refused to award attorney’s fees incurred during the 2007 administrative proceedings before the HDC, the result of which gave rise to this litigation. The court also concluded the Chabad only achieved “partial success” and then unilaterally imposed an across-the-board fifty percent (50%) reduction to the Chabad’s total fee award. Both parties appealed.

On appeal, we argued that the Chabad went from substantially burdened (as a result of the certificate of appropriate denial) to substantially free (as a result of the prosecution of this case and judgment/injunction obtained) as the judgment altered the legal relationship between the Chabad and Defendant – there is a clear contrast between the status of the Chabad’s religious exercise at the time of the denial of the certificate appropriateness with its status at the time or as a result of the judgment and court injunction.

We also argued that all of the claims centered around a singular issue:  Whether the Commission’s denial of the Chabad’s certificate of appropriateness violated the Religious Land Use & Institutionalized Persons Act. The Chabad and its attorneys were entitled to pursue their meritorious claim to judgment despite the Defendants scorched earth defense. And the Chabad’s attorneys’ fees should not be cut because it did not prevail on every claim, especially when it prevailed on its most significant, central claim and obtained a mandatory injunction. Our final argument is that the Supreme Court has long held that the question is not whether the legal relationship between the parties is altered at the time of a ruling on a motion for attorney fees, but rather whether that relationship was altered at the time the judgment issued

We are hopeful for another positive decision in this case. If you have a question about RLUIPA and the availability of attorney fees, please feel free to contact a professional at Dalton & Tomich PLC to assist you with your questions.

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