The case is Diamond v. O'Conner, a summary order decided on April 6. Here's what happened, as per the district court:
Diamond, an African-American, sued O’Connor, the South Burlington Police Department, unnamed officers of the South Burlington Police Department, and the City, alleging violations of his constitutional rights under 42 U.S.C. § 1983. He claimed that the Defendants unlawfully seized more than $5,000.00 of Diamond’s money on March 21, 2005, and that this seizure was racially based. Diamond also alleged a pattern of intimidation and harassment consistent with the policies of the South Burlington Police Department, where O’Connor was primarily responsible for drug enforcement.
At trial, the judge ruled in Diamond's favor under Rule 50, deciding that O'Connor violated Diamond's Fourth Amendment rights. You don't see that very often: the trial court granting plaintiff judgment as a matter of law without sending the claim to the jury. Diamond sought and was awarded nominal damages, or one dollar. A jury ruled in favor of O’Connor and the City on Diamond’s other claims. So Diamond's only victory is that O'Conner seized his property in violation of the Constitution, but he gets no damages for this.
Diamond's lawyer then petitioned the district court for attorneys' fees. Counsel was awarded about $100,000 on the claim that resulted in nominal damages. O'Connor appeals, arguing that nominal damages are essentially trivial damages and that Diamond should not get any attorneys fees at all. Now, the district court has broad discretion on these issues; the Second Circuit does not know the case the way the trial court did, and the trial court has to really blow it on the attorneys' fees issue for the Second Circuit to reverse. The Court of Appeals (Katzmann, Chin and Gleeson [D.J.] affirms the fee award, deciding that the trial court did not abuse its discretion.
The decision here tells us nothing about why this fee award was appropriate, but the district court provides some good background in this area, pointing out that, under Farrar v. Hobby, the 1992 Supreme Court decision on attorneys' fees and nominal damages, "under certain circumstances a prevailing party should receive no attorneys’s fees; for example, in a case where nominal damages are awarded to a plaintiff who sought and failed to prove compensable injury, a reasonable fee may be no fee at all." That happened, for example, in McCardle v. Haddad, 131 F.3d 43 (2d Cir. 1997), where the plaintiff won an employment discrimination verdict but the jury awarded no damages. But this case is different because, unlike most employment discrimination cases, O'Connor did not ask for any money damages and his case raises an important matter under constitutional law, i.e., police abuses. The district court stated:
[Diamond] did not itemize any damages in discovery. He testified that his primary goal in bringing and pursuing his lawsuit was to call attention to O’Connor’s illegal practices and to prevent further misconduct. Diamond’s lawsuit vindicated an important Constitutional right for one’s property to be secure from prolonged detention without probable cause. The judgment also alerts the City that O’Connor and other officers may require additional training and supervision to prevent violations of Constitutional rights. Having received complete relief on this claim, the case is distinguishable from Farrar and McCardle, and the Court concludes that reasonable attorneys’ fees are appropriate in this case.