$75,000 in attorneys' fees for $1 in damages may be too much

This is the kind of case that drives plaintiffs nuts. The plaintiff in this case won his trial, and the trial court awarded $75,000 in attorneys' fees, determining that plaintiff was the prevailing party in a civil rights case. The case returns to the district court to reconsider the fee award. Defendants will almost certainly argue that plaintiff should get nothing in attorneys' fees.

The case is Knights v. City University of New York, a summary order issued on August 23. The jury said plaintiff was entitled to a name-clearing hearing following CUNY's allegedly defamatory comments about his professionalism. This "stigma-plus" claim under the due process is an obscure claim under Section 1983. Cases like this may not yield much in the way of damages, but the civil rights laws allow the prevailing party to recover their attorneys' fees; that provision attracts good lawyers to litigate these cases even if the damages are not large.

But there is an exception to the attorneys' fees statute, as determined by the Supreme Court in Farrar v. Hobby (1992), which said that nominal damages may not entitle the plaintiff to a fully attorneys' fees award, and might only yield no attorneys' fees at all. This is what I meant when I said this case can drive plaintiffs nuts. The Court of Appeals vacates the attorneys' fees award and directs the trial court to start over. The Court of Appeals (Bianco, Perez, and Merriam) says:

Although the District Court provided a detailed recitation of the history of the litigation, it ultimately offered no concrete basis for its determination that a fee award – particularly a substantial fee award – was warranted in this case in which Knights did not succeed on the vast majority of his claims, prevailing only on a single claim for nominal damages of $1 after demanding $45 million in his Complaint and over $4 million at the jury trial.

. . . 

We therefore remand for the District Court to reconsider its award of fees in light of the relevant standards and considerations and, if it again finds that an award of fees is appropriate, to articulate its basis for such a finding.

I have seen plaintiffs recover no fees at all after winning $1 in damages. I have also seen them recover a fraction of their attorneys' fees because they did not recover anything close to the amount of damages requested in their initial lawsuit. This is one reason why plaintiffs should not sue for a million dollars; the complaint does not have to articulate a requested damages award, and such a large number can come back to haunt the plaintiff's attorney when it comes time to move for attorneys' fees. I can assure the City of New York will argue that plaintiff in this case should recover no attorneys' fees at all, which will make the renewed district court fee motion an unpleasant experience for counsel.