“Catalyst Doctrine” Applied to Statute That Awards Damages

D. Russo, Inc. v. Union Tp. 417 N.J. Super. 384 (App. Div. 2010).  In Mason v. Hoboken, 196 N.J. 51 (2008), an Open Public Records Act (“OPRA”) case, the Supreme Court of New Jersey declined to follow Buckhannon Bd. & Care Home, Inc.  v. West Virginia Dep’t of Health & Human Resources, 532 U.S. 598 (2001), which had abolished the “catalyst doctrine” for attorneys’ fees under federal fee-shifting statutes.  [Disclosure:  My firm, Lite DePalma Greenberg, LLC, represented an amicus curiae in Mason, whose position on the catalyst doctrine was accepted by the Court].  The catalyst doctrine holds that a party can be considered a “prevailing party” under a fee-shifting statute if that party’s litigation caused its opponent to change the conduct complained of, even if the case itself did not proceed to a judgment or consent order.

OPRA, however, does not provide for a damages remedy.  There was stray language in Mason that allowed for the viewpoint that the catalyst doctrine would not be applied in a case where the fee-shifting statute also allowed a damage award.

D. Russo involved the application of the New Jersey Civil Rights Act, N.J.S.A. 10:6-1 to -2, to a municipal ordinance that regulated sexually-oriented businesses.  After the plaintiff business obtained a preliminary injunction against enforcement of the ordinance, the township eventually repealed the ordinance.  That led the plaintiff to claim to be a prevailing party entitled to attorneys’ fees under the catalyst doctrine.

The Appellate Division, through Judge Skillman, reversed a trial level ruling that had rejected the catalyst doctrine in these circumstances.  The Appellate Division noted that Mason contained various express statements indicating that its holding was not limited to statutes that, like OPRA, lacked a damages remedy.  Mason also quoted “with seeming approval” a prior Appellate Division case, Warrington v. Village Supermarket, Inc., 328 N.J. Super. 410 (App. Div. 2003), that had applied the catalyst theory to fee-shifting under the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq., whose fee-shifting provision was worded similarly to that of the Civil Rights Act.  Accordingly, Judge Skillman concluded that the Supreme Court of New Jersey would decline to follow Buckhannon but would instead apply the catalyst doctrine to the Civil Rights Act just as the Supreme Court did regarding OPRA in Mason.  The court remanded the matter to the trial court to determine as a matter of fact whether the plaintiff was a catalyst for relief.

The catalyst doctrine is a salutary means of ensuring that counsel who achieve favorable results in cases of public interest are not disincentivized.  Particularly at a time when governmental resources are scarce, “private attorneys general” must be encouraged to pursue cases of public interest.  New Jersey has rightly joined the highest courts of Alaska, California, Hawaii, and Pennsylvania, as well as appellate courts in Arizona, Kentucky, and Washington in maintaining the catalyst doctrine and declining to apply Buckhannon to state law fee-shifting statutes.