Supreme Court Clarifies ‘Prevailing Party’ Standard for Attorney’s Fees

The US Supreme Court’s Feb. 25 decision in Lackey v. Stinnie addressed the definition of a “prevailing party” to recover attorney’s fees. The Court held that obtaining a preliminary injunction does not qualify a plaintiff as a prevailing party.

John M. Simpson of Duane Morris explains that the ruling has broad implications for federal litigation, particularly in cases where plaintiffs seek only injunctive relief.

It overturned the Fourth Circuit’s banc ruling, favoring the plaintiffs’ interpretation that their preliminary injunction and subsequent legislative repeal of the challenged statute made them prevailing parties.

The case arose from a challenge by Virginia Automobile, who argued that a Virginia law suspending drivers’ licenses for unpaid fines without sufficient notice or hearing violated due process. The district court granted a preliminary injunction, determining that the plaintiffs were likely to succeed.

Before a final ruling, the state legislature repealed the statute, leading both parties to agree that the case was moot and to stipulate dismissal. Plaintiffs then sought attorney’s fees, arguing that the preliminary injunction effectively led to the repeal.

The Fourth Circuit agreed, but the Supreme Court reversed the decision. The Court held that a preliminary injunction does not establish prevailing party status because it is granted based on a likelihood of success rather than a final determination on the merits.

The Court reasoned that external events mooting a case do not transform temporary relief into a conclusive adjudication. It emphasized that a bright-line rule serves the judicial economy and prevents prolonged litigation over attorney’s fees. It noted that some claims, like those involving damages, would not be affected.

Lackey underscores the importance of securing final judgments when seeking attorney’s fees in federal litigation. The ruling may discourage public interest and regulatory lawsuits, where preliminary injunctions are often the primary relief sought.

Lawyers handling civil rights and regulatory litigation should reassess strategies for structuring claims to ensure eligibility for attorney’s fees under prevailing party statutes.