Winner on injunction not a ‘prevailing party’

Although the plaintiffs obtained a preliminary injunction enjoining a Virginia statute that automatically suspended drivers’ licenses when persons failed to pay their court debt, and the statute was subsequently repealed by the General Assembly, their request as prevailing parties for attorneys’ fees and costs was denied. The Fourth Circuit has held that a preliminary injunction does not confer “prevailing party” status under § 1988(b).

Background

Plaintiffs filed this civil action in 2016, challenging the constitutionality of Virginia Code § 46.2-395, which provided for the automatic suspension of drivers’ licenses when persons failed to pay their court debt. Plaintiffs alleged that this automatic suspension—without sufficient notice or hearing—violated their Fourteenth Amendment right not to be deprived of a protected interest without due process of law

In December 2018, the court granted the plaintiff’s motion for a preliminary injunction. Subsequently, the Virginia General Assembly repealed § 46.2-395. Shortly thereafter, the court adopted the parties’ joint stipulation of dismissal and dismissed this action as moot. The matter is now before the court for a report and recommendation on plaintiffs’ petition for attorneys’ fees and litigation expenses.

Analysis

Plaintiffs argue that they are entitled to attorneys’ fees under § 1988 their success in obtaining a merits-based preliminary injunction in their favor qualifies them for prevailing party status. In Smyth ex rel. Smyth v. Rivero, 282 F.3d 268 (4th Cir. 2002), however, the Fourth Circuit held that a preliminary injunction does not confer “prevailing party” status under § 1988(b), because a court order granting such interim relief “is best understood as a prediction of a probable, but necessarily uncertain,” outcome based on a “necessarily abbreviated” inquiry into the merits of the plaintiff’s claim.

Plaintiffs acknowledge this obstacle, but ask the court to disregard Smyth’s holding. Intervening Supreme Court precedent, they argue, has undermined Smyth’s rationale to such an extent that Smyth is no longer controlling here. Plaintiffs also point to one district court case that has accepted the same argument.

The court concludes that the preliminary injunction standard in the Fourth Circuit has changed since Smyth was decided and now requires a more robust merits-based showing. However, the Supreme Court has not yet squarely decided whether a merits-based preliminary injunction that is not reversed by any later court order confers prevailing party status.

The Supreme Court has, however, held that a preliminary injunction that is later “reversed, dissolved, or otherwise undone by the final decision in the same case” does not give rise to prevailing party status under § 1988(b). And it has held that a permanent injunction does warrant prevailing party status.

Plaintiffs argue that the Fourth Circuit’s decision in Smyth stands alone. Indeed, almost every circuit agrees that a merits-based preliminary injunction that is not undone or otherwise modified by a later court order may confer prevailing party status entitling the plaintiff to an award of attorneys’ fees.

Plaintiffs urge this court to rely on the broad consensus that has developed among the other circuits. But out-of-circuit precedent is not binding upon this court. And although a broad consensus among other circuits could be “highly persuasive” in the absence of binding precedent, this court is required to follow controlling Fourth Circuit law.

Plaintiffs present a strong argument that the rationale supporting the Fourth Circuit’s decision in Smyth has been materially undermined by the Supreme Court’s later decisions and that they would be considered prevailing parties under several other circuits’ tests. Nonetheless, Smyth has not been explicitly overruled by either the Fourth Circuit or by the Supreme Court. Accordingly, it remains controlling law in this circuit, and this court is bound to follow it. Even if a Fourth Circuit panel may depart from prior precedent under narrow circumstances, district courts have no authority to do the same. Although the district court did so in the case cited by plaintiffs, it cited no authority permitting it to do so. Other courts in similar situations have determined that they are constrained by circuit precedent that had not been explicitly overruled.

In line with these cases,  the court concluded that it is bound to follow Smyth. For the foregoing reasons, the court recommended that the presiding judge deny plaintiffs’ petition for attorneys’ fees and litigation expenses.

Stinnie v. Holcomb, Case No. 3:16-cv-00044, Feb. 16, 2021. WDVA at Charlottesville (Hoppe). VLW 021-3-065. 28 pp.