## Facts

- The Farrars operated a private Texas school for troubled youths, Artesia Hall.
- After a student’s death and subsequent legal proceedings involving Joseph Farrar, the school was closed through court and state action.
- The Farrars’ estate sued Texas Lieutenant Governor William “Bill” Hobby, Jr. and other officials under 42 U.S.C. §§ 1983 and 1985, alleging unconstitutional deprivation of liberty and property without due process.
- The plaintiffs sought approximately $17 million in compensatory damages.
- A jury found Hobby liable for denial of procedural due process but found no proof of actual compensable injury.
- The district court entered judgment for plaintiffs for $1 in nominal damages and later awarded about $280,000 in attorney’s fees under 42 U.S.C. § 1988.
- The Fifth Circuit reversed the fee award, concluding plaintiffs were not prevailing parties for § 1988 purposes.

## Issues

1. Whether a civil-rights plaintiff who recovers only nominal damages is a “prevailing party” eligible for attorney’s fees under 42 U.S.C. § 1988.
2. If so, whether a substantial fee award is reasonable when the plaintiff’s success is limited to nominal damages.

## Decision

- The Supreme Court held that a plaintiff who wins nominal damages is a “prevailing party” under § 1988 because the judgment provides enforceable relief and changes the parties’ legal relationship.
- The Court affirmed reversal of the fee award, holding that where a plaintiff recovers only nominal damages due to failure to prove an essential element of monetary relief (actual injury), the reasonable fee is usually no fee at all.
- On these facts—seeking $17 million but obtaining only $1—the Court concluded that no fee was reasonable.

## Legal Principles

- A party “prevails” under § 1988 when it obtains actual relief on the merits that materially alters the legal relationship between the parties by modifying the defendant’s behavior in a way that directly benefits the plaintiff.
- Nominal damages constitute merits-based, enforceable relief sufficient for prevailing-party status, even if the victory is “technical” or the amount is minimal.
- Prevailing-party eligibility and the proper amount of fees are separate inquiries; the size and significance of the relief bear heavily on reasonableness.
- Under Hensley v. Eckerhart, the most important factor in setting a reasonable fee is the degree of success obtained; limited success can warrant a drastic reduction, including an award of no fees.
- When nominal damages are awarded because the plaintiff failed to prove actual injury necessary for compensatory damages, the only reasonable fee is usually no fee at all.

## Conclusion

The Court ruled that nominal damages confer prevailing-party status under § 1988, but where the plaintiff’s success is limited to nominal relief after seeking substantial compensatory damages, a large fee award is unreasonable and may properly be reduced to no fee.


Farrar v. Hobby, 506 U.S. 103 (1992)