Appeal from the United States District Court for the District of Nebraska.
The opinion of the court was delivered by: Colloton, Circuit Judge
Before WOLLMAN, BRIGHT, and COLLOTON, Circuit Judges.
The appellants, a group of developmentally disabled Nebraska residents, filed an action in the district court*fn1 against several Nebraska state agencies and officials, alleging violations of federal law. The case was settled, and the central question on appeal is whether each of the plaintiffs was a "prevailing party" in the action, such that the plaintiffs were entitled to attorneys' fees. The district court held that they were not prevailing parties and denied their application for fees. We affirm.
In 2003, Bill M. and other developmentally disabled Nebraska residents (collectively, "the plaintiffs") filed suit against the Nebraska Department of Health and Human Services Finance and Support, the Nebraska Department of Health and Human Services, and two department directors in their official capacities (collectively, "the State"). The plaintiffs' second amended complaint sought declaratory and injunctive relief for alleged violations of the Americans with Disabilities Act of 1990 ("ADA"), 42 U.S.C. § 12101 et seq.; section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794; federal Medicaid statutes, 42 U.S.C. § 1396 et seq., and regulations, e.g., 42 C.F.R. § 440.230(b); and the Due Process Clause of the Fourteenth Amendment. The gravamen of their complaint was that the State unlawfully provided inadequate funding for developmental-disability services, thereby raising the risk that the plaintiffs and others similarly situated would be placed in institutional (as opposed to "less restrictive" residential or community) settings.
In February 2008, the parties advised the district court that they had reached an oral settlement agreement. The district court gave the parties thirty days to reduce their agreement to writing and to file a joint stipulation for dismissal. Unable to meet that deadline, the parties moved for an extension of time, and the court granted an additional thirty days, until April 2, 2008, to make the necessary filing. The court warned, however, that "no further extensions will be granted, and that in the event of noncompliance with [the new deadline], this action may be dismissed without further notice."
The parties executed a written settlement agreement on March 31, 2008. As part of the settlement, the State agreed to convene "workgroups" to study issues relating to the State's system of providing services to the developmentally disabled. The State also agreed to implement new procedures for handling requests for such services. For their part, the plaintiffs agreed to dismiss their claims with prejudice, provided that the district court retained jurisdiction to decide the issue of attorneys' fees.
On April 2, 2008, the parties timely filed a joint motion and stipulation for "approval" of the settlement. In a memorandum and order, the district court advised the parties that it was "willing to grant the motion and 'approve' the stipulation and related settlement agreement with the following understanding":
(1) I make no determination that the settlement agreement is good or bad or fair or unfair.
(2) With the exception that I will resolve the attorney fee question as contemplated by the settlement agreement, I retain no jurisdiction to enforce or construe the settlement agreement in the future. Furthermore, my "approval" of the settlement agreement does not suggest that there would later be federal jurisdiction to construe or enforce the terms of the settlement agreement. In other words, the settlement agreement is merely a contract between the parties and my "approval" of it confers no other status.
(3) Plaintiffs' counsel will be understood to have represented to me that each person signing the settlement agreement for a disabled person has the authority to do so.
The district court asked the parties whether, having reviewed its memorandum and order, they still requested that it grant their joint motion and stipulation for "approval" of the settlement. Both parties certified that they did, and the court granted their motion, subject to the above understanding. The court then dismissed the entirety of the case with prejudice, except for the issue of attorneys' fees, which it retained jurisdiction to resolve.
The plaintiffs applied for attorneys' fees under the ADA, 42 U.S.C. § 12205; the Rehabilitation Act, 29 U.S.C. § 794a(b); and the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988(b). The district court denied the plaintiffs' application on the ground that they were not prevailing ...