Wednesday, February 8, 2023 | Back issues
Courthouse News Service Courthouse News Service

En banc Fourth Circuit hears fee dispute in suit over suspended licenses   

The Richmond-based federal appeals court must decide whether winning a preliminary injunction is enough to be considered a prevailing party entitled to attorney fees.

RICHMOND, Va. (CN) — The full Fourth Circuit heard arguments Wednesday in a dispute over legal fees stemming from a repealed Virginia law that automatically suspended driver's licenses for nonpayment of fines and court costs.

Drivers who were granted a preliminary injunction unsuspending their licenses want to overturn Fourth Circuit precedent in hopes of seeking attorney fees as the prevailing party. The 2002 ruling at issue, known as Smyth v. Rivero, barred those who win preliminary injunctions from holding prevailing party status.

The litigation began five years ago when five Virginians sued over the law, claiming they were being punished for their poverty. Their driver's licenses were automatically suspended when they failed to meet payment deadlines for court debt. Unable to drive to work, they were caught in a vicious cycle. 

"They could not legally drive to work, medical appointments, the grocery store or anywhere else," the plaintiffs' brief to the Richmond-based appeals court states.  

The lawsuit, brought against Richard Holcomb, commissioner of the Virginia Department of Motor Vehicles, sought to give those with suspended licenses relief for violations of due process and equal protection under the law.

A federal judge in the Western District Court issued a preliminary injunction determining Damian Stinnie and his co-plaintiffs would likely succeed in showing violations of their due process. The order required the commissioner to remove the suspensions from the plaintiffs' licenses, and according to the brief, "gave the plaintiffs dignity, a chance to provide for themselves and their families, and a real opportunity to break the cycle of poverty."

A bipartisan coalition in the Virginia General Assembly repealed the license suspension statute in 2020, rendering the case moot months after the injunction.

Now, the Fourth Circuit is tasked with determining if the preliminary injunction, which granted the plaintiffs the relief they were seeking, makes them the prevailing party for purposes of attorney fees. The drivers claim it does because it materially altered the relationship between the two parties, as the commissioner was ordered to act by removing the suspensions.

In Smyth, a group of women seeking welfare sued the commissioner of the Virginia Department of Social Services for requiring applicants to either identify the father of any child for whom aid was requested or, if uncertain of the child's paternity, provide the first and last names of all individuals who might be the father.

A district court entered a preliminary injunction barring the paternity identification policy enforcement against the women. When they sought attorney fees as the prevailing party, the Fourth Circuit refused to grant them that status and said the injunction was not a court order that could be equated with a winning verdict.

Over 20 years later, Smyth is still the standard for seeking attorney fees in the Fourth Circuit. A three-judge panel cited the decision in denying the drivers' petition for attorney fees last year.

After the appeals court agreed to rehear the case en banc, the Virginia DMV commissioner filed a brief that relied heavily on the Smyth precedent.

"In Smyth, this Court squarely held, in circumstances identical to those raised here, that the entry of a preliminary injunction does not convey prevailing-party status on a plaintiff seeking attorney's fees," the commissioner's brief states.

Counsel for the drivers whose licenses were suspended argued Wednesday that Smyth should not be considered a categorical bar that parties must overcome to be granted attorney fees. 

"We are requesting that the categorical bar in Smyth be overturned," pro bono attorney Tennille Checkovich, representing the plaintiffs, said during the hearing. 

U.S. Circuit Judge Paul Niemeyer, a George H. W. Busch appointee, asked whether the case would have to go back to the district court should the appeals court overturn Smyth to determine whether the drivers were the prevailing party through discovery. 

"Are the circumstances, in this case, sufficient to grant prevailing party status?" Niemeyer asked. "That issue was never determined. We would have to have the district court make that determination." 

Checkovich disagreed, asserting that the judge's opinion issuing the preliminary injunction serves as enough evidence of the plaintiffs being the prevailing party. 

"Both the magistrate judge, in his report and recommendation, and the district court found that aside from the categorical bar, all of the requirements for finding a prevailing party status were met here," Checkovich said. 

The main argument presented by the DMV commissioner's legal team is that because there was no final order and the case became moot due to lawmakers repealing the statute, the district court's granting of a preliminary injunction does not equate to a merits-based victory required to be considered the prevailing party.

Checkovic argues that a 2008 U.S. Supreme Court decision in the case Winter vs. Natural Resource Defense Council, which stemmed from the Navy's use of sonar equipment that hurts marine life, set forward a new standard for issuing preliminary injunctions that only requires a plaintiff to be likely to succeed on merits. 

Niemeyer found this argument weak, saying that the merit determinations in a preliminary injunction are "tentative and temporary."

Attorney Trevor Cox of Hunton Andrews Kurth, representing the commissioner, argued that even if the en banc court overturns Smyth, the drivers still do not deserve prevailing party status because the commissioner never admitted to any wrongdoing. 

"We never admitted liability," Cox said. "We continue to think the constitutionality of the statute was clear."

Chief U.S. Circuit Judge Roger L. Gregory, a George W. Bush appointee, and U.S. Circuit Judge James Andrew Wynn, a Barack Obama appointee, disagreed with the assertation that if Smyth were overturned, this case wouldn't count as the type of exception where a preliminary injunction does count as prevailing party status. 

Gregory made the point that relief was granted to drivers, indicating they would qualify for prevailing party status without Smyth

"They lifted suspended licenses, and people could drive," Gregory said. "They can take care of their children and get to work and do those things. That's the essence of what they wanted done."  

The judges did not indicate when they would issue a ruling.

Neither attorney responded to a request for comment after the hearing.

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.

Loading
Loading...