A recent Thomson Reuters Legal story, “Plaintiff can Recoup Fees after State Voluntarily Concedes,” reports that a New York appeals court held that the state’s Equal Access of Justice Act permits litigants to recoup fees even in the absence of a ruling in their favor if the state voluntarily grants the relief they sought.  The court’s 4-1 ruling is a departure from U.S. Supreme Court precedent, as well as its own.

The underlying case, Matter of Solla v. Berlin, involved a disabled woman, Luz Solla, whose public assistance benefits were reduced by $200 a month by New York City in 2010.  She challenged the cut, and the state Office of Temporary and Disability Assistance ordered the city to restore her benefits.  When the city failed to comply, Solla filed a motion seeking to enforce the order.  The city then complied and moved to dismiss the action as moot.

After Manhattan Supreme Court Justice Alexander Hunter dismissed the petition, Solla made a motion to recover attorney’s fees under the EAJA.  The act, which is intended to make it easier for poor litigants to challenge state action, permits a “prevailing party” that brought a civil action against the state to collect fees unless the state can show that its position was “substantially justified.”  Solla argued that she was entitled to fees under the “catalyst theory,” which holds that a party whose litigation prompts state action should receive fees because he or she was the “catalyst” for the state’s decision.

Hunter denied the motion, citing the appeal court’s 2001 ruling in Matter of Auguste v. Hammons, where the court found that the catalyst theory was invalid.  That ruling was based on a U.S. Supreme Court decision that same year, Buckhannon Board & Care Home v. West Virginia Department of Health and Human Resources.  In Buckhannon, the Supreme Court found only a court order could allow a prevailing party to collect fees.  That decision meant that parties who sued under the federal EAJA cannot collect fees even when the state changes its position as a result of the lawsuit, unless a court order is involved.  Since the state EAJA was modeled on the federal statute, the appeals court ruled in Auguste that the catalyst theory also could not be applied under state law.

However, the appeals court reversed its position, noting that the state EAJA was intended to be similar, not identical, to the federal statute.  Without the ability to collect fees in “catalyst” cases, wrote Justice Angela Mazzarelli, the EAJA would fail in its goal of encouraging litigants with scarce resources to challenge the state.  “If anything, preservation of the catalyst theory is critical to achieving the legislative purpose behind the State EAJA,” she wrote.