Connecticut Chabad is prevailing party in religious discrimination dispute, entitling it to attorneys' fees

If you handle federal civil rights claims, you know about fee-shifting. In most such cases, the losing defendant has to reimburse the prevailing plaintiff for his legal fees, even if the plaintiff's lawyer took the case on a contingency fee basis. When that happens, the plaintiff's lawyer recovers the legal fees he would have earned had the client been able to pay him. The reason for this arrangement is to encourage lawyers to take on meritorious civil rights cases. This case explores some of the wrinkles in the fee-shifting statutes.

The case is Chabad Lubavitch of Litchfield County v. Litchfield Historic District Commission, issued on August 14. The plaintiff is a religious organization that wanted to build an addition to its building to accommodate the rabbi's family and the needs of the community. The district court ruled that the defendant violated the Religious Land Use and Institutionalized Persons Act, a federal statute that protects religious liberty. The plaintiff got a mandatory injunction ordering the defendant to grant the plaintiff's Certificate of Appropriateness, a planning board concept that allows a community member to accomplish a construction or planning objective. The court ordered Chabad to submit an amended COA application that would remove the second story from its proposed plans, based on the court's determination that Chabad would not be substantially burdened by having its rabbi live hear the Chabad House. Chabad did not submit that amended plan. Instead, it moved for attorneys' fees as the prevailing party in the case. The defendant opposed that application, claiming that it had ultimately decided to give Chabad permission to proceed with its modified plan. Chabad got half of its fees, and the defendant appeals.

The Court of Appeals (Newman, Hall and Chin) finds that Chabad is a "prevailing party," which entitles it to attorneys fees. It does not matter that defendant changed its position after the district court entered judgment for Chabad. It is the favorable judgment that entitles Chabad to fees, not post-judgment events. And, the fact that Chabad did not submit a revised plan post-judgment does not affect its entitlement to fees. The Court writes, "A person need not claim the winner's prize to be a winner; it need only win the event." Chabad gets over $600,000 in attorneys' fees.

It is not all good news for Chabad. While Chabad wanted approximately $1.2 million in fees, the district court cut its fees by 50% because Chabad did not win everything it sought in the litigation. That is a drastic reduction, but the district court has discretion to do that. The Court of Appeals is not breaking new ground here. Generally, the appellate courts will not seriously second-guess the trial court's attorneys' fees rulings.