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Buckhannon Board and Care Home, Inc. operates care homes that provide assisted living to their residents. Buckhannon filed an inspection by the West Virginia fire marshal's office because some residents were incapable of "self- preservation." Buckhannon brought suit against the State and others arguing that the "self-preservation" requirement violated the Fair Housing Amendments Act of 1988 (FHAA) and the Americans with Disabilities Act of 1990 (ADA). Afterwards the state legislature eliminated the requirement and the District Court dismissed the case as moot. Buckhannon then requested attorney's fees as the "prevailing party" under the FHAA and ADA. Buckhannon based its claim on the "catalyst theory," which posits that a plaintiff is a "prevailing party" if it achieves the desired result because the lawsuit brought about a voluntary change in the defendant's conduct. The District Court denied the motion. The Court of Appeals affirmed.

Does the term "prevailing party" include a party that has failed to secure a judgment on the merits or a court-ordered consent decree, but has nonetheless achieved the desired result because the lawsuit brought about a voluntary change in the defendant's conduct?

No. In a 5-4 opinion delivered by Chief Justice William H. Rehnquist, the Court held that the "catalyst theory" is not a permissible basis for the award of attorney's fees under the FHAA and ADA. "In the United States, parties are ordinarily required to bear their own attorney's fees -- the prevailing party is not entitled to collect from the loser," wrote Chief Justice Rehnquist, "[u]nder this 'American Rule,' we follow 'a general practice of not awarding fees to a prevailing party absent explicit statutory authority.'" Dissenting, Justice Ruth Bader Ginsburg argued that "Congress prescribed fee-shifting provisions like those included in the FHAA and ADA to encourage private enforcement of laws designed to advance civil rights. Fidelity to that purpose calls for court-awarded fees when a private party's lawsuit, whether or not its settlement is registered in court, vindicates rights Congress sought to secure."