Attorneys are relieved when the court orders the losing party to pay their fees because it usually means that they will be paid. But what happens when the judgment awarding fees is vacated - not overturned - on appeal?
The Second Circuit Court of Appeals recently upheld an attorneys' fees award from judgment that was later vacated because the judgment "had brought a judicially-sanctioned, material alteration of the parties' legal relationship that had not been reversed on the merits." In case you don't have the time or energy to parse your way through that jargon, let's break this case down into English.
Before 2008, Simon Kirk was a Canadian veterinarian living and working in New York under a Trade NAFTA visa. Ordinarily, New York vets must be a U.S. citizen or permanent resident, but Kirk received a temporary waiver and a limited license because there were not enough vets in the state at the time. Seven months before the temporary license was set to expire, Kirk sued, challenging the citizenship requirement of the New York education law on equal protection grounds.
The district court held that the citizenship/residency restriction was unconstitutional, ordered the Department to issue Kirk a veterinary license, and subsequently awarded Kirk $74,349.44 in attorney's fees and disbursements. The state, of course, appealed.
In 2009, the district court dismissed the state's appeal, noting that the issue was moot because Kirk had received permanent resident status, (and a permanent, lifetime veterinary license), in 2008; then the court vacated the 2008 judgment. The state argued that it should not have to pay Kirk's attorneys fees because Kirk lost his "prevailing party" status when the court vacated the opinion.
The Second Circuit disagreed, noting that Kirk did not "leave court empty-handed." Kirk "prevailed" when he left with an order requiring the Department to issue him a veterinarian license, which he was entitled to keep regardless of the disposition of the state's appeal.
The Second Circuit's decision is bad news for cash-strapped New York, but good news for lawyers who want to pay their bills.
- Kirk v. New York Dept. of Education, 09-5335 (FindLaw Summary)
- Reduction of Attorneys' Fees From $6M to $600K Vacated (FindLaw's Fourth Circuit Blog)
- Report: 75% of Attorneys Increased Fees During Bad Economy (FindLaw's Strategist)