On Appeal from the United States District Court for the District of New Jersey (D.C. Civil No. 97-cv-03093) District Judge: Honorable Dickinson R. Debevoise.
The opinion of the court was delivered by: Rendell, Circuit Judge.
Before: RENDELL and GARTH, Circuit Judges, and VANASKIE,*fn1 District Judge.
Appellee Hawa Abdi Jama*fn2 was detained as an illegal immigrant at a detention center run by Esmor Correctional Services, Inc. ("Esmor"). Jama sued Esmor and certain of its officers and employees, including facility administrator John Lima, for violating her rights under the Religious Freedom Restoration Act ("RFRA"), 42 U.S.C. § 2000bb et seq., and on tort theories. The jury found in favor of Jama on the RFRA claim, against Esmor and Lima, and in favor of Jama on one state negligence claim, against Esmor, Lima, and two other Defendants. The jury awarded $1 in RFRA damages and $100,000 in tort damages. The District Court awarded Jama an attorney's fee against Esmor and Lima after concluding that a portion of the tort award was "designed as compensation for" RFRA injuries. Jama v. Esmor Corr. Servs. Inc., 549 F. Supp. 2d 602, 607 (D.N.J. 2008). Esmor and Lima appealed.
Appellants argue that the District Court's interpretation of the jury award was erroneous, and assert that no fee may be awarded because Jama's success on the fee-eligible RFRA claim was de minimis, and the pendent state claim cannot be considered. Appellants alternatively challenge the reasonableness of the amount awarded on several grounds. We agree that the District Court erred in interpreting the jury award, but do not agree that the Court is precluded from awarding fees under these circumstances as a matter of law. We will remand the matter for the District Court to reconsider the fee award under the legal standards discussed below.
Ms. Jama, a Somalian immigrant and Muslim, filed a complaint in 1997, along with 19 other plaintiffs, to redress allegedly abusive treatment and deplorable conditions at a private detention center in Elizabeth, New Jersey ("the Facility"). The Facility was operated by Esmor under contract with the U.S. Immigration and Naturalization Service. Esmor was named as a Defendant, as were certain officers and employees of the company, including the facility administrator John Lima.*fn3 By the time of the 2007 verdict, Jama was the last remaining plaintiff whose claims had not settled. At trial, she presented evidence of general indignities suffered in the Facility, as well as evidence specifically relating to restrictions on her practice of religion. This latter category included evidence that her attempts to pray were disrupted by guards, that she was picked up from the floor while praying and thrown onto her bed, that her Koran was thrown in the garbage, that she was subjected to unnecessary strip searches, that she was exposed naked in common view, that she was forced to eat pork, and that the only cleric available was a priest who urged her to pray to Jesus.*fn4
The District Court submitted four claims to the jury, including a claim that Defendants substantially burdened Jama's ability to practice her religion in violation of RFRA,*fn5 and a claim under state law that certain Defendants, including Esmor and Lima, were negligent in hiring, training, supervising, and/or retaining guards at the facility.*fn6 On the RFRA claim, the Court instructed the jury that Jama had to prove either that the officials "inflicted or constrained conduct or expressions that manifested some central tenet" of her beliefs, that their acts or omissions "meaningfully curtailed" her "ability to express adherence to her faith," or that the officials denied her a "reasonable opportunity to engage in those activities that are fundamental to her religion." (JA 194-95.) To succeed specifically against Defendant Esmor, the Court instructed that the violations had to be caused by "an official policy or custom" or "from the actions of an official with final policy-making authority." (JA 196.)
For negligent hiring/training/supervision/retention, the Court instructed that, under New Jersey law, Jama must prove that one or more of the enumerated Defendants, including Esmor and Lima, were negligent, and that their negligence proximately caused Jama injury. Negligent acts or omissions within the purview of the claim included failures by the Defendants to exercise reasonable care in investigating the guards' conduct, and failures to exercise reasonable care in training and supervising the guards to prevent foreseeable harm to the inmates.
As for damages, if any, the jury was instructed to award "an amount that will fairly compensate her for any injury she actually sustained as a result of a defendant's conduct." (JA 207.) The Court explained that Jama claimed as damages "[p]hysical harm . . . during and after the events at issue, physical pain, disability, disfigurement, or discomfort, [and] emotional or mental harm . . . during and after the events at issue, including fear, humiliation, and mental anguish . . . ." (JA 208-09.) The Court stated that the jury "must not award compensatory damages more than once for the same injury" and that it "must not award her any individual compensatory damages on each claim if the two claims resulted in the same injuries." (JA 209.) Further, "if different injuries are attributable to the separate claims, then you must compensat[e] Miss Jama for all of her injuries." (Id.) The Court also instructed that, "If you return a verdict for Miss Jama on the . . . RFRA claim, but Miss Jama has failed to prove compensatory damages, then you must award nominal damages of one dollar. A person whose federal rights were violated is entitled to a recognition of that violation, even if she suffered no actual injury." (JA 210.)
The jury found that Jama proved her RFRA claim against both Esmor and John Lima, but awarded only $1 on the claim. It indicated on the questionnaire that no RFRA damages were included in damages awarded on any other claim. The jury also found that Jama proved negligent hiring, training, supervision, and/or retention against Esmor, Lima, and two other Defendants, and awarded $100,000 in compensatory damages on the claim.*fn7 The jury found for Defendants on the two other claims.
Jama moved for an award of attorney's fees pursuant to 42 U.S.C. § 1988. In ascertaining the degree of Jama's success under § 1988, the District Court reasoned that the jury "was not in a position to clarify whether it had concluded that Jama had simply not proven any compensable [RFRA] injury . . . , or whether the result reflected the jury's inability to distinguish between those and other injuries," and that the jury may have "bundle[d] all of Jama's injuries into one substantial award under Jama's Negligence Claims." Jama, 549 F. Supp. 2d at 606. The Court stated that, based on its assessment of the evidence, "between 33% and 50% of the jury's Negligence Claims award of $100,000 was designed as compensation for Jama's RFRA-related injuries." Id. at 607. The Court calculated a lodestar of $642,398.57 based entirely on counsels' work on the RFRA claim, and awarded the entire amount against Esmor and Lima, the two Defendants found liable under RFRA. Id. at 613. Esmor and Lima appealed.
This Court has jurisdiction to review the award of a statutory attorney's fee under 28 U.S.C. § 1291, once the award is reduced to a definite amount. Interfaith Comty. Org. v. Honeywell Int'l, Inc., 426 F.3d 694, 701 (3d Cir. 2005). We review the reasonableness of a fee award for abuse of discretion, but our review of the legal standard applied in calculating a fee is plenary. Evans v. Port Auth. of New York & New Jersey, 273 F.3d 346, 358 (3d Cir. 2001). Plenary review also extends to a district court's interpretation of a jury's answers to interrogatories. See Failla v. Passaic, 146 F.3d 149, 153 (3d Cir. 1998). A district court abuses its discretion when its decision "rests upon a clearly erroneous finding of fact, an errant conclusion of law or an improper application of law to fact." Pineda v. Ford Motor Co., 520 F.3d 237, 243 (3d Cir. 2008) (internal quotations omitted).
42 U.S.C. § 1988(b) provides that, "In any action or proceeding to enforce [certain federal statutes including RFRA], the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs . . . ." 42 U.S.C. § 1988(b) (emphasis added). Appellants concede that, the jury having awarded nominal damages to Jama on her fee-eligible RFRA claim, Jama was the prevailing party for the purposes of § 1988. However, Appellants argue that the District Court erred in recharacterizing the jury verdict, and that no fee award can be reasonable as a matter of law because Jama's success on the fee-eligible federal claim was de minimis and the pendent state claim cannot be considered.
A. Interpretation of the Jury Verdict
We agree with Appellants that the District Court erred in attributing a portion of Jama's tort award to her RFRA claim. The jury was instructed that "[n]ominal damages of one dollar are designed to acknowledge the deprivation of a federal right, even where no . . . injury occurred. However, if you find actual injury, you must award compensatory damages as I instructed you, rather than nominal damages." (JA 210.) The jury plainly indicated on its questionnaire that $1 in damages was awarded on the RFRA claim, and that no RFRA damages were included in the award on any other claim. A court generally "must assume that the jury understood and followed the court's instructions." Rinehimer v. Cemcolift, Inc., 292 F.3d 375, 383 (3d Cir. 2002). We find no inconsistencies in the jury's answers to interrogatories that might have required the District Court to exercise its limited authority to mold the answers to achieve consistency. See McAdam v. Dean Witter Reynolds, Inc., 896 F.2d 750, 763-64 (3d Cir. 1990). The District Court was thus required to presume that the jury determined that no actual injury was sustained as a result of the RFRA violation, and could not conclude that any portion of the $100,000 in compensatory damages was awarded to compensate for a RFRA violation.*fn8
We accordingly conclude that the District Court's assessment of the evidence was based on an improper interpretation of the interrogatories and verdict sheet, and we cannot affirm the resulting order awarding an attorney's fee.
B. Impact of Farrar v. Hobby
Our conclusion that the District Court erred does not end our inquiry. Appellants argue that, under Farrar v. Hobby, 506 U.S. 103 (1992), no fee may be awarded as a matter of law because Jama was only awarded nominal damages on her fee-eligible RFRA claim. Farrar is plainly distinguishable because Jama received a substantial award on the litigation as a whole, whereas the plaintiffs in Farrar received only a nominal award of $1 in total. Farrar, 506 U.S. at 107. Yet even if we were to ignore the substantial award on Jama's pendent state claim, we do not agree with Appellants that Farrar would conclusively prohibit the award of a fee on Jama's RFRA claim.
In Farrar, state officials closed a school for troubled teens and secured an indictment against the owner. Farrar, 506 U.S. at 105. The owner sued, alleging deprivations of liberty and property without due process. Id. at 106. He, and his administrators after his death, sought only monetary relief in the form of $17 million in damages. Id.The jury found, through special interrogatories, that just one of the six defendants had deprived Farrar of a civil right. However, the jury expressly found that the defendant's conduct did not proximately cause Farrar's asserted damages. Id. The district court ultimately awarded nominal damages of $1 and attorney's fees. Id. A divided panel of the Fifth Circuit reversed the award of fees, holding that the plaintiffs were not prevailing parties, and were thus ineligible for fees under § 1988. Id.
The Supreme Court affirmed in a 5-4 decision, but on different grounds. The Court held that a plaintiff who is awarded nominal damages is a prevailing party for the purposes of § 1988. Id. at 114. However, the Court also stated that, "Although the 'technical' nature of a nominal damages award or any other judgment does not affect the prevailing party inquiry, it does bear on the propriety of fees awarded under § 1988." Id. In determining the reasonableness of fees under § 1988, the Court continued, "'the most critical factor . . . is the degree of success obtained.'" Id. at114 (quoting Hensley v. Eckerhart, 461 U.S. 424, 436 (1983)). Accordingly, when a plaintiff seeking compensatory damages "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. at 115 (emphasis added) (internal citation omitted).
Justice O'Connor joined the other four justices in the majority without reservation, but she filed a concurring opinion that further elaborated on the degree of success inquiry. While she acknowledged that the disparity between the damages sought and awarded was important in determining the degree of success, she stated that this "is not the only consideration." Id. at 121 (O'Connor, J., concurring). She asserted that "an award of nominal damages can represent a victory in the sense of vindicating rights even though no actual damages are proved." Id. Justice O'Connor stated that "courts also must look to other factors" in assessing success, including "the significance of the legal issue" decided, and whether the decision "accomplished some public goal." Id. at 121-22. Upon considering all of these "relevant indicia of success," Justice O'Connor concluded that Farrar's victory was de minimis. Id. at 122.
Several courts of appeals, relying on Justice O'Connor's concurrence, have permitted fee awards despite the award of only nominal damages. In Mercer v. Duke University, 401 F.3d 199 (4th Cir. 2005), a female college football player brought a Title IX discrimination claim against a university after she had been cut from the football team. Id. at 201. Although the plaintiff was awarded only nominal damages, the Court of Appeals for the Fourth Circuit upheld an award of $350,000 in attorney fees despite the de minimis compensatory relief. Id. at 211. The court concluded that a fee award was within the district court's discretion because the legal issue on which the plaintiff prevailed was significant and the litigation served a public purpose. Id. at 206-09.
In Diaz-Rivera v. Rivera-Rodriguez, 377 F.3d 119 (1st Cir. 2004), terminated municipal employees sued city officials, alleging that their terminations were motivated by the employees' political affiliations. Id. at 121. The plaintiffs brought First Amendment and due process claims. Id. The jury found for the defendants on the First Amendment claims and awarded only nominal damages on the due process claim. Id. at 122. The district court awarded an attorney's fee, and the Court of Appeals for the First Circuit affirmed. The court of appeals distinguished the facts of the case at bar from those in Farrar by applying Justice O'Connor's factors:
Here, although plaintiffs' victory was de minimis as to the extent of relief, the district court appropriately exercised its discretion to award fees, as the determination that the municipality violated plaintiffs' constitutional rights represented a significant legal conclusion serving an important public purpose.
Id. at 125. Other courts of appeals have also adopted Justice O'Connor's factors for resolving the degree of success inquiry. See Cummings v. Connell, 402 F.3d 936, 947 (9th Cir. 2005); Phelps v. Hamilton, 120 F.3d 1126, 1131 (10th Cir. 1997); Johnson v. Lafayette Fire Fighters Ass'n Local 472, 51 F.3d 726, 731 (7th Cir. 1995); Jones v. Lockhart, 29 F.3d 422, 423-24 (8th Cir. 1994).
In contrast, we find no case in which a court of appeals has interpreted Farrar to require the automatic denial of fees that Appellants seek when only nominal damages are awarded. We agree with our sister courts of appeals that a district court determining the degree of a plaintiff's success should consider not only the difference between the relief sought and achieved, but also the significance of the legal issue decided and whether the litigation served a public purpose.*fn9
Yet our interpretation of Farrar only takes us part way in resolving this appeal. While Jama might be entitled to at least a partial fee award solely on the basis of her RFRA claim, Jama received more than mere nominal damages as a result of her litigation. The substantial award on her pendent state claim distinguishes her from the plaintiffs in Farrar, Mercer, and Diaz-Rivera, who received only nominal damages in total. We must therefore decide ...