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A settlement between New York City and recipients of public assistance raises the question of whether anyone can be considered the prevailing party in a lawsuit when the two sides compromise. The question is of more than academic interest because some federal statutes-including 42 U.S.C. 1983, under which the recipients sued the city-allow the prevailing party to recover attorney fees from the other side. In allowing the recipients to present their $140,000 fee request to a trial judge, the 2d U.S. Circuit Court of Appeals followed the predominant trend among circuit courts in holding that settlement agreements may, under certain circumstances, yield a prevailing party. Roberson v. Giuliani, No. 02-7306 (Sept. 30, 2003). Only the 8th Circuit has taken the more restrictive view that attorney fees are available only when judgment has been entered in favor of a party or when a court endorses a compromise by entering a consent decree. Christiana A. v. Bloomberg, 315 F.3d 990 (Jan. 13, 2003). ‘Buckhannon’ The guiding text for both courts was the 2001 Supreme Court decision, Buckhannon Bd. & Care Home Inc. v. W.Va. Dep’t of Health & Human Res., 532 U.S. 598. The Buckhannon court laid to rest the “catalyst theory” under which most circuit courts had previously considered themselves free to declare a winner if a lawsuit acted as a catalyst bringing about a change in the behavior of one of the parties, even if that change came about through a voluntary settlement. The Supreme Court rejected the catalyst theory because it “allows an award where there is no judicially sanctioned change in the legal relationship of the parties.” The court noted that final judgments on the merits and consent decrees have the necessary “judicial imprimatur,” whereas “Private settlements do not entail the judicial approval and oversight involved in consent decrees.” In Christiana A., the 8th Circuit interpreted Buckhannon as saying that only final judgments and consent decrees exhibit the necessary judicial involvement to allow one party or the other to be considered the victor. Like five other circuits before it-the 3d, 4th, 9th, 11th and D.C. circuits-the 2d Circuit gave a more generous reading of Buckhannon. Those circuits argued that the Supreme Court mentioned consent decrees and final judgments merely as examples of outcomes having the necessary judicial stamp without the intent to close the rolls to other outcomes. In Roberson, the 2d Circuit noted that a judge who dismisses a case at the behest of the parties ordinarily has no authority thereafter to enforce private agreements between the parties (unless the aggrieved party files a new lawsuit). To that extent, a dismissal following a settlement agreement might lack the necessary judicial imprimatur (the court reserved judgment on that point). However, the court pointed out that some settlements leading to dismissal involve a good deal more continuing judicial oversight and involvement. In Roberson, the parties agreed to a settlement requiring New York City to make changes in the way it determines eligibility for public assistance. The trial judge, Denise Cote of the Southern District of New York, did not incorporate that settlement agreement into her order of dismissal (an action that would have unmistakably given her stamp to the settlement, the 2d Circuit suggested). Nonetheless, at the request of the parties, Cote retained jurisdiction over enforcement of the settlement following dismissal. The circuit court held that in doing so, she necessarily made a judgment that the settlement was fair and lawful. And her retention of enforcement authority was “not significantly different from a consent decree and entails a level of judicial sanction sufficient to support an award of attorney’s fees.” Young’s e-mail address is gyoungnlj.com.

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