More Detail on the Catalyst Doctrine

Jones v. Hayman, 418 N.J. Super. 291 (App. Div. 2011).  This was a class action suit by women inmates against the Department of Corrections (“DOC”).  The key question in the case, as stated by Judge Fisher in his opinion for the Appellate Division, was when a plaintiff under a fee-shifting statute “may be deemed a prevaling party under the catalyst theory when the underlying action is dismissed as moot without a final judicial determination on the merits of the case.”  The Appellate Division reversed the Chancery Division’s rejection of plaintiffs’ catalyst motion and remanded for further proceedings based on Judge Fisher’s elaboration of two key components of the catalyst doctrine.  The case has some things in it for both plaintiffs and defendants.    

Plaintiffs complained that DOC had mistreated them in various ways, including by transferring them from the only women’s prison to a maximum-security men’s facility and violating their privacy and discriminating against them, as compared to the male inmates at that facility.  Plaintiffs won a preliminary injunction against the transfer of any more women to the men’s prison.  They also defeated DOC’s motion to dismiss their complaint and obtained an order certifying a class.   

DOC then transferred all the women inmates back to the women’s prison and moved to dismiss the case as moot.  DOC also asserted that the re-transfer “was based solely on operational reasons and totally unrelated to this litigation.”  The court granted DOC’s motion.  Plaintiffs then moved for attorneys’ fees under the catalyst doctrine.  The trial judge denied that motion, holding that because there had never been a ruling on the merits of plaintiffs’ complaint, and the case had been dismissed as moot, there could be no catalyst fee award.

The Appellate Division reversed.  Under Mason v. Hoboken, 196 N.J. 51 (2008), a catalyst fee award can be obtained when a plaintiff shows “1) a factual causal nexus between the litigation and the relief ultimately achieved; and 2) that the relief ultimately secured by plaintiff had a basis in law.”  The trial court’s ruling was not grounded in that two-prong approach, but had instead relied on a case that pre-dated Mason.  The case was remanded for further proceedings using the Mason criteria.

Judge Fisher then provided guidance for the remand by illuminating two concepts embedded within the two prongs of Mason.  First, how should a court determine whether a plaintiff has met the “causal nexus” requirement of the first prong of Mason?  Second, what must a plaintiff show to establish that “the relief ultimately secured had a basis in law,” as required by the second Mason prong?

On the first issue, Judge Fisher stated that a summary process based on self-serving certifications is not sufficient.  Instead, at least where, as in Jones, “the extent and timing of the interim relief obtained by plaintiffs strongly suggests a causal link between the litigation and the actions taken by defendants,” so that the burden of proof shifts to the defendants to show that plaintiffs were not a catalyst, a plenary hearing with cross-examination of witnesses is required.  That ruling may benefit plaintiffs, who can now probe behind carefully constructed certifications of defendants who oppose a catalyst finding.  

On the definition of “basis in law,” the Appellate Division found that plaintiffs had a basis in law for their claims, since plaintiffs had defeated a dispositive motion, obtained preliminary injunctive relief, and secured class certification.  But Judge Fisher went on to discuss “basis in law” in a way that may benefit defendants in some cases.  He stated that “the ‘basis in law’ prong should be construed in a manner that promotes the public policy underpinning fee-shifting statutes:  to afford access to the judicial process to persons who have little or no money with which to hire a lawyer by providing an incentive to lawyers to undertake litigation.”  That may enable defendants in cases brought by more well-heeled plaintiffs, or in cases where a large enough amount is in controversy that an hourly retention of counsel would be economically viable, to argue that there is no “basis in law” and therefore no right to a catalyst fee award.  

The catalyst doctrine continues to evolve.  Stay tuned!