Klein v. City of Laguna Beach

The court may lawfully award lower or no attorneys’ fees to a plaintiff who seeks compensatory damages and is only awarded nominal damages.

Steve Klein was denied a city permit to use sound amplification devices during a religious youth outreach on the sidewalks around Laguna Beach High School. Klein filed a 42 U.S.C. § 1983 suit and a California Bane Act claim to invalidate the ordinance’s permit requirement and many restrictions. Subsequently, Laguna Beach City Council amended the offending ordinance by removing the permit requirement and increasing the time range that loudspeakers could be used in the city, but retained the 100-yard buffer around city hall and schools. Both parties filed cross-motions for summary judgment, in which Klein sought only nominal damages and attorneys’ fees. The district court granted Klein’s motion in part, determining that the previous ordinance was an unconstitutional prior restraint violating the First Amendment. Klein received $1 in nominal damages. The district court also granted the City’s motion in part, concluding that the City may constitutionally maintain the 100-yard buffer. The district court also granted Klein’s declaratory and injunctive relief claims for violations of the federal and state constitution, including an award for reasonable attorneys’ fees. Instead of applying the “lodestar method” and twelve factors from Hensley v. Eckerhart to determine attorneys’ fees, the district court concluded that Klein’s case fell under the Farrar v. Hobby exception: when a plaintiff seeks compensatory damages but receives only nominal damages, the court may award lower or no attorneys’ fees. Klein appealed, and the Ninth Circuit determined that the district court erroneously applied the Farrar exception as Klein never requested compensatory damages under his federal claims, merely nominal damages. Thus, the panel vacated and remanded the district court’s award on Klein’s attorneys’ fees regarding his federal claims, but affirmed the award on his state claim. AFFIRMED in Part, VACATED in Part, and REMANDED.