     Case: 15-10960   Document: 00513683710     Page: 1   Date Filed: 09/19/2016




        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT
                                                                   United States Court of Appeals
                                                                            Fifth Circuit
                                 No. 15-10960                             FILED
                                                                 September 19, 2016

DAVID GRISHAM,
                                                                     Lyle W. Cayce
                                                                          Clerk

             Plaintiff - Appellant

v.

CITY OF FORT WORTH, TEXAS; JEFFREY HALSTEAD, in his official
capacity as Chief of Police for the Fort Worth Police Department,

             Defendants - Appellees




                Appeal from the United States District Court
                     for the Northern District of Texas


Before SMITH, BARKSDALE, and COSTA, Circuit Judges.
GREGG COSTA, Circuit Judge:
      David Grisham sued the City of Fort Worth alleging a denial of his First
Amendment right to hand out religious literature at a public festival. Grisham
and the City entered into a consent decree in which the City agreed to pay him
a dollar in nominal damages.         Among other provisions, that decree also
prohibits the City from interfering with the free speech rights of Grisham or
other individuals at future public events in downtown Fort Worth.
      Left unresolved was the question of attorney’s fees. So Grisham filed an
opposed motion for fees, which the district court denied. It did so based on its
belief that other than the award of nominal damages, nothing in the consent
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order changed the legal relationship between the parties (the court
alternatively denied fees on the ground that the request was unreasonable).
      Because a plaintiff is a prevailing party when nominal damages are
awarded, and this case does not present the special circumstances in which a
prevailing civil rights plaintiff may be denied fees altogether, we vacate the
order denying fees and remand for an assessment of the reasonableness of the
fee request.
                                      I.
      Grisham is an evangelical Christian who distributes religious literature,
typically Gospel tracts, at public events. One such event was the 2014 Tarrant
County Gay Pride Week Association Festival. This free and public festival took
place in General Worth Square in downtown Fort Worth pursuant to a permit.
      Grisham’s wife and daughter, who often work with him, entered the part
of the square where the festival was taking place and passed out Gospel tracts.
Grisham was doing the same in a separate part of the square away from the
festival.   According to the complaint Grisham later filed in federal court,
officers with the Fort Worth Police Department told his wife and daughter,
under threat of arrest, that they must leave the park and physically escorted
them to the sidewalk across the street. Once they had crossed the street,
another officer approached them and reiterated that they were not to cross the
street to reenter the festival. Grisham noticed the officer talking to his family
and intervened.
      Grisham alleges that the following discussions ensued.        He told the
officer that he and his family were allowed to share their views on public
property during a public event, and that while they would agree not to enter
the festival, they wanted to pass out literature on the sidewalk adjacent to it.
The officer maintained that the family must stay across the street, insisting
that this restriction was for the safety of the Grisham family and because
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festival organizers had a permit that allowed them to close off the area. After
further discussion, the officer brought over a festival organizer who told
Grisham that he had a permit for the event and Grisham was not welcome.
The officer then issued Grisham a trespass warning, telling him that if he
crossed the street and reentered the square or adjoining sidewalk, he would be
arrested. Fearing arrest, Grisham followed the command.
      Grisham filed this lawsuit against the City of Fort Worth, its police chief,
and the officer who instructed him not to return to the festival. The complaint
alleges free speech and due process violations. It seeks nominal damages, a
declaration recognizing that the City and officer violated Grisham’s
constitutional rights, an injunction prohibiting the City and its police
department from violating these rights—both his and others’ in the
community—in the future, and reasonable costs and attorney’s fees. The court
dismissed the claims against the individual officer based on qualified
immunity.
      The City and police chief reached a settlement with Grisham, and the
court issued a consent order and final judgment accepting their agreement.
The consent decree states in relevant part:
      1. The City must allow the constitutionally-protected expression
         of David Grisham and other speakers on public sidewalks and
         streets, in downtown Fort Worth, Texas during an event that is
         free and open to the public within the limits of federal, state,
         and local law. Defendant City agrees to notify permittees of an
         outdoor event on public property that speakers will be allowed
         to exercise constitutionally-protected expression at any event
         that is free and open to the public.
      2. Defendants will not enforce a policy or act in any other manner
         that would unlawfully ban or interfere with constitutionally-
         protected expression of David Grisham or other third-party
         speakers on public sidewalks and streets in downtown Fort
         Worth, Texas during public events.


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      3. Nothing in this consent order and final judgment prevents the
         City from enforcing reasonable, time, place and manner
         restrictions as allowed by law.
      4. Defendants shall pay Plaintiff the amount of $1.00 as nominal
         damages.
      5. Plaintiff shall file application for attorney’s fees under 42
         U.S.C. § 1988 within 14 days after entry of this Order and Final
         Judgment.

      That brings us to the subject of this appeal: attorney’s fees. Grisham
filed the fee request contemplated by the consent decree, requesting $79,074.36
in attorney’s fees and non-taxable expenses along with verified time sheets and
affidavits addressing the reasonableness of hours billed. The City opposed the
motion, arguing that Grisham was not a prevailing party. The district court
denied all fees and expenses, reasoning that although “plaintiff gained a
technical victory by receiving a recovery of $1.00 as nominal damages, with the
consequence that he is to be viewed as a ‘prevailing party’ under § 1988, the
court has concluded that a proper exercise of its § 1988 discretion would be to
deny plaintiff’s motion.” The district court alternatively ruled that it could
deny fees based on “the unreasonableness of the request,” as some of the time
billed appeared excessive for the work performed.
                                       II.
      The district court thus found two reasons not to award Grisham any
attorney’s fees even though the consent decree ordered him to file a fee
application. We review that denial for abuse of discretion, but “the discretion
afforded district courts to deny attorney’s fees to prevailing plaintiffs under
§ 1988 is exceedingly narrow.” Sanchez v. City of Austin, 774 F.3d 873, 878
(5th Cir. 2014) (quoting Cruz v. Hauck, 762 F.2d 1230, 1233 (5th Cir. 1985)).
A district court abuses this discretion if it applies an “erroneous interpretation
of [] special circumstances” to justify denial of fees to an otherwise prevailing
party. Id. (quoting Pruett v. Harris Cty. Bail Bond Bd., 499 F.3d 403, 417 (5th
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Cir. 2007)). Factual determinations underlying the denial of fees are reviewed
for clear error; legal conclusions, including whether a party is “prevailing”
under section 1988, are reviewed de novo. Id.
      The “touchstone” of the prevailing party analysis is whether there has
been “a material alteration of the legal relationship” between the parties. Tex.
State Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792 (1989). A
“material alteration” results when there is a “judgment for damages in any
amount, whether compensatory or nominal,” because even a nominal award
“forc[es] the defendant to pay an amount he otherwise would not pay.” Farrar
v. Hobby, 506 U.S. 103, 113 (1992). Such a change in the parties’ relationship
can be effectuated through an enforceable judgment or, as in this case, a
consent decree or settlement. Id.; see also Buckhannon Bd. & Care Home, Inc.
v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598, 604 (2001). The district
court thus correctly recognized that Grisham is a prevailing party because he
obtained an award of nominal damages in the consent decree. Farrar, 506 U.S.
at 112. (“[A] plaintiff who wins nominal damages is a prevailing party under
§ 1988.”).
      Despite recognizing Grisham’s status as a prevailing party, the district
court continued to apply the “material alteration of the legal relationship”
standard in determining that no fees should be awarded. It found that the
“technical $1.00 nominal damage award constituted such an insignificant
change in the relationship between plaintiff and defendant that this court is
unwilling to exercise its discretion to award attorney’s fees.” This was error.
As we recently explained, a “prevailing plaintiff’s degree of success is not a
special circumstance that justifies a complete denial of § 1988 fees.” Sanchez,
774 F.3d at 881; see also Pruett, 499 F.3d at 418 (explaining that the “standard
for partial success [is] a different standard than the ‘special circumstances’
that occasionally allow a defendant to avoid attorneys’ fees altogether”).
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Instead, the degree of success (or in the terms used by the district court, the
significance of the change in the parties’ relationship) is a factor—often an
important one—to consider in assessing the reasonableness of the fee request.
Sanchez, 774 F.3d at 881 (citing Tex. State Teachers Ass’n, 489 U.S at 793).
      Although degree of success is not a basis for a full denial of fees, certain
“special circumstances” may support denying fees altogether.           Id. at 880.
Because the district court focused its assessment on the significance of the
relief obtained, it did not explore cases in which these circumstances have been
found.    They are few and far between.             Id. (describing the “special
circumstances” exception as a “narrow carve-out” of the general rule that
prevailing civil rights plaintiffs should be awarded fees). “Because Congress
believed that the incentive of attorney’s fees was critical to the enforcement of
the civil rights laws, section 1988 requires an extremely strong showing of
special circumstances to justify a denial of fees.” Kirchberg v. Feenstra, 708
F.2d 991, 998 (5th Cir. 1983).
      We recognized the rarity of such circumstances long ago in Riddell v.
National Democratic Party, 624 F.2d 539, 543–44 (5th Cir. 1980), which
identified two types of cases in which full denial of fees have been upheld: (1)
“situations in which the plaintiff filed under section 1983 to recover what was
essentially a tort claim for private monetary damages,” which “did not require
injunctive relief or confer significant civil rights to the public” and (2) cases in
which “even though the plaintiffs received the benefits desired from their
litigation, their efforts did not contribute to achieving those results.” We have
since rejected a host of other asserted special circumstances, including: a
defendant’s good faith in enacting overturned laws or policies, Espino v.
Besteiro, 708 F.2d 1002, 1005 (5th Cir. 1983); a defendant’s decision not to
appeal a permanent injunction, Ellwest Stereo Theatre, Inc. v. Jackson, 653
F.2d 954, 955–56 (5th Cir. 1981); a plaintiff’s ability to pay its own costs, id.;
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and the district court’s view that a prior award of fees was sufficient or that a
supplemental request included some clerical work, Cruz, 762 F.2d at 1234–35.
      The most prominent example of a court’s recognizing “special
circumstances” that justify depriving a prevailing party of all fees is Farrar.
The Supreme Court found a denial of fees reasonable despite a jury’s award of
nominal damages because the suit was primarily for compensatory damages—
the plaintiff sought $17 million—and the jury awarded none. Farrar, 506 U.S.
at 115. It explained that “[w]hen a plaintiff recovers only nominal damages
because of his failure to prove an essential element of his claim for monetary
relief, the only reasonable fee is usually no fee at all.” Id. In that situation, in
which substantial fees are expended in pursuit of a remedy that is never
achieved, an award of fees amounts to a windfall for the unsuccessful
attorneys. Id. at 115–16.
      Grisham, however, is not an unsuccessful seeker of compensatory
damages. He obtained the relief he sought: nominal damages in recognition
that his rights were violated and injunctive relief prohibiting the City from
violating his rights again.       We have repeatedly held that the Farrar
circumstance of nominal but no compensatory damages only justifies a
complete denial of fees when monetary relief is the primary objective of a
lawsuit. See Sanchez, 774 F.3d at 883 (holding that Farrar did not control
because the plaintiff only sought nominal damages and declaratory and
injunctive relief); Riley v. City of Jackson, Miss., 99 F.3d 757, 760 (5th Cir.
1996) (holding that Farrar did not control because it “is illustrative of cases
where the plaintiff sought only money damages and was essentially
unsuccessful”); Pembroke v. Wood Cty., Tex., 981 F.2d 225, 231 n.27 (5th Cir.
1993) (distinguishing Farrar because the plaintiffs before it “dismissed their
damages claims early on and sought prospective remedies only”).


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      Indeed, Sanchez’s rejection of both the “degree of success” and “limited
injury” of the plaintiff as “a special circumstance that justifies a complete
denial of § 1988 fees” seems to control here. 774 F.3d at 881. The Occupy Wall
Street protestors in Sanchez did not even obtain nominal damages as Grisham
did; they obtained a declaration that their constitutional rights were violated
and an injunction preventing Austin from enforcing its policy concerning
criminal trespass notices on city property. Id. at 876–77.
      That finding of a constitutional violation, entered after a bench trial in
Sanchez, is what Fort Worth argues is different here. It emphasizes that the
consent decree does not contain an express admission of liability. That is not
unusual. See Maher v. Gagne, 448 U.S. 122, 126 n.8 (1980) (noting that it is
“customary” for consent decrees to not “purport to adjudicate [plaintiff’s]
statutory or constitutional claims” and often to explicitly state that neither
party admits fault). Despite the fact that “a consent decree does not always
include an admission of liability by the defendant,” the Supreme Court has
held it “nonetheless is a court-ordered ‘change in the legal relationship between
the plaintiff and the defendant.’” Buckhannon Bd. & Care Home, Inc., 532 U.S.
at 604 (alteration in original) (citation omitted) (quoting Tex. State Teachers
Ass’n, 489 U.S. at 792). What is more, Grisham’s consent decree does contain
an implicit admission of fault in the form of the nominal damage award to
which the City agreed. “Every nominal damage award has as its basis a finding
of liability. . . .” Farrar, 506 U.S. at 120 (O’Connor, J., concurring); see also
Damages, BLACK’S LAW DICTIONARY (10th ed. 2014) (defining “nominal
damages” as a “trifling sum awarded when a legal injury is suffered but there
is no substantial loss or injury to be compensated.” (emphasis added)).
      Nor do we agree with the view of the district court that the consent
decree, in providing that the “City will allow the constitutionally-protected
expression by plaintiff and other speakers on public sidewalks and streets in
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downtown Fort Worth” at public events, does nothing more than require the
City to follow established First Amendment law. Requiring defendants to
“comply with the law and safeguard [the plaintiff’s] constitutional rights in the
future” is often the objective of a civil rights suit, as the Supreme Court
recently recognized in rejecting the perceived insignificance of that relief as a
basis for denying attorney’s fees. Lefemine v. Wideman, 133 S. Ct. 9, 11 (2012).
Furthermore, enshrining rights in a consent decree changes the parties’ legal
relationship in the following procedural respect: if Grisham believes that the
City violates his rights in the future, he can pursue a contempt action rather
than start from scratch with a new lawsuit. Lastly, the consent decree includes
what appears to be a new measure that is directly responsive to Grisham's
allegation that the festival organizer told him he was not allowed to be present
at the event. From now on, Fort Worth will notify permitholders that speakers
are allowed to exercise their right to free speech at events that are free and
open to the public.
      Grisham thus is a prevailing party and there are no special
circumstances to justify an outright denial of fees.
                                       III.
      As we said, however, the degree of success can be considered in
determining the amount of a fee award. Hensley v. Eckerhart, 461 U.S. 424,
436 (1983) (“If . . . a plaintiff has achieved only partial or limited success, the
product of hours reasonably expended on the litigation as a whole times a
reasonable hourly rate may be an excessive amount.”). But Hensley’s degree-
of-success factor does not warrant reducing Grisham’s fees. Grisham did not
obtain prevailing party status despite “los[ing] on some claims,” Pruett, 499
F.3d at 418, such that the court needs to eliminate the time spent on
unsuccessful claims. Hensley, 461 U.S. at 435. Nor did he seek a large damage
award but obtain only a modest one in which case the time spent is likely to be
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disproportionate to the result obtained. See Migis v. Pearle Vision, Inc., 135
F.3d 1041, 1048 (5th Cir. 1998) (reversing a fee award as unreasonable in light
of plaintiff’s winning only $12,233.32 in damages despite seeking $325,000).
Rather, Grisham received exactly what he asked for: nominal damages and a
declaration that binds the City from infringing on his and other citizens’ First
Amendment rights going forward. As a result, the degree of success factor does
not serve as a basis for reducing Grisham’s fee award.
      Although it mistakenly treated it as a basis for denying all fees, the
district court identified another factor that can reduce a fee award: an
excessive amount of time performing a task. Johnson v. Ga. Highway Express,
Inc., 488 F.2d 714, 717 (5th Cir. 1974). From a “cursory review of the billing
information,” the district court concluded that the time spent by Grisham’s
counsel was excessive. As examples, it cited counsel’s devoting 34.3 hours to
preparation of the complaint and spending 14.6 hours communicating with
local counsel.
      Given the deference owed the district court in assessing whether the
time entries a lawyer submits in support of a fee request are “excessive,
duplicative, or inadequately documented,” Jimenez v. Wood Cty., Tex., 621
F.3d 372, 379–80 (5th Cir. 2010), there is no basis to disturb the finding that
Grisham’s counsel spent too much time on certain tasks. The proper response
to such a finding, however, is to reduce, to a reasonable amount, the number
of hours to be compensated for a specific task, Migis, 135 F.3d at 1048, not to
deny all fees. We remand so the district court can perform this task. We also
instruct that the fee award include the reasonable costs and attorneys’ fees
incurred in successfully prosecuting this appeal. See Sanchez, 774 F.3d at 885.




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                                No. 15-10960
                                    ***
      The district court’s denial of Grisham’s Motion for Attorney’s Fees and
Non-Taxable Expenses is VACATED and we REMAND for the district court to
calculate a reasonable fee award in accordance with this opinion.




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