Allocation Among Multiple Defendants of Attorneys’ Fees Under Fee-Shifting Statutes

Empower our Neighborhoods v. Guadagno, 453 N.J. Super. 565 (App. Div. 2018).  This was an election case under the federal and New Jersey civil rights acts, both of which provide attorneys’ fee-shifting in favor of a prevailing plaintiff.  At the trial level, Judge Mary Jacobson observed that the lawsuit brought by plaintiff, an advocacy group, had “changed the landscape of election law in New Jersey, as all 5.88 million registered voters in New Jersey now ha[d] expanded petition rights” (that is, the rules governing circulators of election petitions became more relaxed due to the lawsuit).  The parties had filed cross-motions for summary judgment, the decision on which resolved the case.  Although plaintiff did not succeed on every claim that it made, Judge Jacobson awarded attorneys’ fees to plaintiff as a prevailing party.  She allocated those fees among the multiple defendants, which included the State, the City of New Brunswick (on behalf of its City Clerk), Middlesex County (on behalf of its County Clerk), and the New Brunswick Board of Education (on behalf of the Board’s Secretary).

Defendants appealed, but the Appellate Division affirmed.  Judge Alvarez wrote the panel’s opinion, which employed the abuse of discretion standard of review that applies to the review of attorneys’ fee decisions.

The first question was whether it was proper to impose fees on the non-State (that is, the municipal and county) defendants.  They argued that they had merely been enforcing state policy by using outdated circulator forms, and that it was necessary that there have been evidence that they “consciously elected to enforce an unconstitutional statute, rather than merely following a statute that [they were] obligated to enforce.”

Judge Alvarez did not agree.  After Buckley v. American Constitutional Law Foundation, 525 U.S. 182 (1999), the laws at issue here were unconstitutional, so that the municipal and county defendants were knowingly enforcing unconstitutional requirements.  The panel noted that Judge Jacobson had relied for this principle on cases from a number of federal Circuit Courts of Appeal.  Defendants had cited cases from other Circuit Courts, but Judge Alvarez found those cases to be “factually distinguishable.”  On this issue of whether liability could be imposed on these defendants, Judge Alvarez employed de novo review, but found that Judge Jacobson had been correct.  Citing prior Supreme Court of New Jersey cases, she stated that “[t]he knowing enforcement of unconstitutional provisions in the law is a proper basis for liability.”

Next came a challenge by the non-State defendants to the allocation of the attorneys’ fees among the defendants.  Judge Jacobson had awarded a total of $105,063.80, assigning 50% of that to the State, 20% each to Middlesex County and New Brunswick, and 10% to the Board of Education.  Noting the absence of New Jersey law regarding apportionment of attorneys’ fees, Judge Alvarez turned to federal law, citing precedent stating that trial courts have “wide discretion on how to divide liability.”

Federal courts take two approaches to the allocation issue, Judge Alvarez said.  “Fees can be divided according to the relative culpability of the defendants, or based on the amount of time necessary to litigate as to each.”  The two methods can be appropriately combined, and that is what Judge Jacobson did here, “ultimately guided by the need to apportion the fees in an equitable manner.”  The panel concluded that Judge Jacobson had not abused her discretion in allocating the fees among the defendants.”

Finally, Judge Alvarez turned to the State’s contention that plaintiff was not a prevailing party entitled to fees since it had not succeeded on all of its claims.  But Judge Alvarez quoted authority from the United States Supreme Court that stated that “”plaintiffs may be considered prevailing parties for attorney’s fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.”  That had occurred here, given plaintiff’s success in expanding petition rights.  And Judge Jacobson had reduced fees in light of plaintiff’s failure to prevail on all issues.  She carefully followed the required analysis of plaintiff’s fee application, the parameters of which Judge Alvarez spelled out.  Thus, the panel also rejected the State’s attack on the amount of the fee award, which also included costs such as online research, as authorized by the applicable law.