Steve Klein; Howard Putnam; Glen Biondi v. City of Laguna Beach

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
STEVE KLEIN; HOWARD PUTNAM;
GLEN BIONDI,
Plaintiffs-Appellants,
v.
CITY OF LAGUNA BEACH,
Defendant-Appellee.
No. 13-56973
D.C. No.
8:08-cv-01369-
CJC-MLG
OPINION
Appeal from the United States District Court
for the Central District of California
Cormac J. Carney, District Judge, Presiding
Argued and Submitted
December 10, 2015—Pasadena, California
Filed January 14, 2016
Before: Ronald M. Gould and Marsha S. Berzon, Circuit
Judges, and Jack Zouhary,* District Judge.
Opinion by Judge Gould
* The Honorable Jack Zouhary, District Judge for the U.S. District Court
for the Northern District of Ohio, sitting by designation.

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KLEIN V. CITY OF LAGUNA BEACH 2
SUMMARY**
Civil Rights/Attorneys’ Fees
The panel affirmed the district court’s order denying
attorneys’ fees under California law, vacated the denial of
attorneys’ fees under federal law, and remanded for further
proceedings.
In the underlying action brought under 42 U.S.C. § 1983,
plaintiff sought to invalidate aspects of Laguna Beach
ordinances prohibiting the use of sound-amplification devices
on public sidewalks. After winning two appeals in this court,
plaintiff was awarded nominal damages on three of his four
as-applied claims. The district court concluded that plaintiff
was a prevailing party under 42 U.S.C. § 1988, but it denied
attorneys’ fees per Farrar v. Hobby, 506 U.S. 103 (1992),
which held that a prevailing party who seeks a large
compensatory award but receives only nominal damages may
not be entitled to fees. The district court also concluded that
plaintiff was not entitled to fees under California law because
the court had entered judgment for the City on plaintiff’s state
claims.
The panel affirmed the district court’s order denying fees
under California law. Under federal law, the panel held that
because plaintiff’s lawsuit achieved its future-oriented goals
and plaintiff never attempted to secure compensatory
damages under § 1983, the Farrar exception did not apply,
** This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.

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KLEIN V. CITY OF LAGUNA BEACH 3
and the district court erred by not considering plaintiff’s
entitlement to fees under the standard framework.
COUNSEL
Michael J. Kumeta, La Mesa, California; William G.
Gillespie (argued), Bonsall, California, for Plaintiffs-
Appellants.
Philip D. Kohn, Michelle D. Molko (argued), Rutan &
Tucker, LLP, Costa Mesa, California, for Defendant-
Appellee.
OPINION
GOULD, Circuit Judge:
Steve Klein filed this 42 U.S.C. § 1983 suit to invalidate
aspects of Laguna Beach ordinances prohibiting the use of
sound-amplification devices (“amplified speech”) on public
sidewalks. After winning two appeals in this court, Klein was
awarded nominal damages on three of his four as-applied
claims. Klein then moved for attorneys’ fees under both state
and federal law. The district court concluded that Klein was
a prevailing party under 42 U.S.C. § 1988, but it denied
attorneys’ fees per Farrar v. Hobby, 506 U.S. 103 (1992),
which held that a prevailing party who seeks a large
compensatory award but receives only nominal damages may
not be entitled to fees. Id. at 115. The district court also
concluded that Klein was not entitled to fees under California
law because the court had entered judgment for the City on
Klein’s state claims.

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KLEIN V. CITY OF LAGUNA BEACH 4
We affirm the district court’s order denying fees under
California law. Under federal law, we hold that because
Klein’s lawsuit achieved its future-oriented goals and Klein
never attempted to secure compensatory damages under
§ 1983, the Farrar exception does not apply, and the district
court erred by not considering Klein’s entitlement to fees
under the standard framework. See Hensley v. Eckerhart,
461 U.S. 424, 429–30 (1983); Gonzalez v. City of Maywood,
729 F.3d 1196, 1202 (9th Cir. 2013). We vacate and remand
for further proceedings.
I
In 2008, Laguna Beach Municipal Code section 5.40.010
prohibited people from using “any radio loudspeaker or sound
amplifier in such a manner as to cause any sound to be
projected outside . . . without having first procured a permit
from the city manager so to do [sic].” Section 5.40.020 stated
that a permit “shall be granted at the will of the city
manager,” although the Code gave no standards for
exercising his discretion. At the same time, Laguna Beach
had another Code provision, section 7.25.120, on amplified
speech that required speakers to secure a permit from the
Chief of Police, who was directed to “consider the
constitutional right of free speech of all persons” along with
factors ranging from “the volume of traffic” to “the threat of
the overthrow of the lawfully established government.” The
Code also prohibited use of amplifying devices within 100
yards of hospitals, churches, schools, and City Hall. Section
7.25.120 was intended to repeal other inconsistent Code
provisions, which would include sections 5.40.010–020.
On November 11, 2008, Steve Klein sent a letter to the
city manager applying for a sound amplification permit under

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KLEIN V. CITY OF LAGUNA BEACH 5
section 5.40.010 to conduct religious “youth outreach” on
public sidewalks around Laguna Beach High School. The
city manager rejected the request, explaining that his
“longstanding and consistently followed policy and practice
has been not to issue amplified sound permits.” Klein filed
a complaint on December 3, 2008, seeking declaratory and
injunctive relief under the U.S. and California Constitutions
and the California Bane Act, Cal. Civ. Code § 52.1(b).1 Klein
also sought nominal damages for each claim and statutory
damages under the Bane Act.2 Six days later, the Laguna
Beach City Council passed an ordinance repealing Chapter
5.40 of the Municipal Code and amending § 7.25.120 to
remove the permit requirement. At the same time, the City
further restricted the hours that amplifying equipment could
be used from 8 a.m.–8 p.m. to 9 a.m.–5 p.m. These
amendments were temporary “while the subject matter [was]
further studied.”
Klein amended his complaint to incorporate new factual
developments and direct his constitutional challenge to
§ 7.25.120. On December 15, 2008, Klein wrote another
letter to the city manager, this time seeking permission to use
a sound amplification device in derogation of § 7.25.120 in
two ways: first, by speaking within 100 yards of Laguna
Beach High School and City Hall, and second, by speaking
between 5 p.m.–6 p.m. in “the busy downtown commercial
1 The Bane Act provides a cause of action for individuals whose “rights
secured by” federal or California law have been interfered with “by threat,
intimidation, or coercion.” Cal. Civ. Code § 52.1 (a)–(b).
2 The Bane Act allows recovery for “actual damages” and treble
damages, “but in no case less than four thousand dollars.” Cal. Civ. Code
§ 52.

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KLEIN V. CITY OF LAGUNA BEACH 6
area of the City.” Speaking through counsel, the City
responded in a letter that did not address Klein’s request,
stating instead that “no permission” was necessary to use
amplification equipment and that Klein should familiarize
himself with the applicable regulations if he had not already
done so.
On June 16, 2009, the City replaced the temporary
ordinance with a permanent ordinance that limited the
application of the 100-yard ban at City Hall and the high
school to times when “such facilities are in use or operation,
and for a period of thirty minutes both before and after such
use and operation.” The City kept the general 5 p.m. to
9 a.m. ban citywide. This new ordinance continued to
preclude Klein’s request to use amplifying devices downtown
after 5 p.m., at City Hall between 5–6 p.m., and at the school
between 3:35–4:05 p.m.
Klein filed a motion for a preliminary injunction on
August 3, 2009, which the district court denied, concluding
that the ordinance was “a content neutral, reasonable
restriction on time, place and manner of speech.” We
reversed on appeal, holding that Laguna Beach presented
insufficient evidence that the ordinance was narrowly tailored
to the City’s interests. Klein v. City of Laguna Beach, 381 F.
App’x 723, 726–27 (9th Cir. 2010) (Klein I). We also
concluded that the remaining preliminary injunction factors
favored Klein given the “fundamental interest in the
protection of all people’s constitutional rights” and that the
City had other ordinances “prohibiting excessive and
disruptive sound.” Id. at 727.
Our decision issued on June 4, 2010. On October 5, 2010,
the City amended section 7.25.120 to remove the 100-yard

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KLEIN V. CITY OF LAGUNA BEACH 7
restriction around schools and City Hall and to increase the
time amplified speech was allowed from 9 a.m.–5 p.m. to
9 a.m.–9 p.m. The parties then filed cross-motions for
summary judgment, with Klein seeking an award of nominal
damages and attorneys’ fees. The district court granted
Klein’s motion in part, entering judgment in favor of Klein on
his nominal damages claims that the repealed permitting
scheme was an unconstitutional prior restraint and that the
City’s restriction of Klein’s speech in the downtown business
district violated the First Amendment. Klein received $1
damages for each of those claims. The court also granted the
City’s motion in part, concluding that Laguna Beach did not
violate Klein’s rights by restricting his speech outside the
high school and outside City Hall. The court then entered
judgment in favor of the City on Klein’s remaining claims for
nominal damages, his California Bane Act claim, and his
claims for declaratory and injunctive relief for federal and
state constitutional violations. The judgment stated that
“Plaintiffs shall recover their costs, including reasonable
attorneys’ fees pursuant to motion for the two claims on
which they prevailed.”
Klein again appealed. We affirmed the district court as to
the high school and downtown business district, but we
reversed with respect to Klein’s proposed speech near City
Hall, holding that Klein was entitled to summary judgment on
that claim as well. Klein v. City of Laguna Beach, 533 F.
App’x 772, 774–75 (9th Cir. 2013) (Klein II). Klein therefore
won nominal damages on three of his four as-applied
challenges under federal law.
Klein then filed a motion for attorneys’ fees. The district
court denied the motion in the decision now on appeal.
Although the court ruled that Klein’s award of nominal

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KLEIN V. CITY OF LAGUNA BEACH 8
damages made him a “prevailing party” under 42 U.S.C.
1988(b), the court relied on Farrar v. Hobby to conclude that
Klein was not entitled to fees for his merely “technical”
victory. See Farrar v. Hobby, 506 U.S. 103, 115 (1992). The
court analyzed the three Farrar factors3 and concluded that
the nominal damages judgment accomplished no “public
goal,” that Klein achieved “de minimis” success, and that
Klein’s First Amendment rights were “not so significant as to
overcome the other two factors, which counsel strongly
against an award of fees.” The court also concluded that it
was unable to award Klein fees under California Civil
Procedure Code § 1021.5 because Klein had not prevailed on
his California state law claims. Klein appeals both of these
issues.4
II
We review de novo whether the district court applied the
correct legal standard in determining entitlement to attorneys’
fees. Labotest, Inc. v. Bonta, 297 F.3d 892, 894 (9th Cir.
2002).
3 See Farrar, 506 U.S. at 116–22 (1992) (O’Connor, J., concurring);
Mahach-Watkins v. Depee, 593 F.3d 1054, 1059–60 (9th Cir. 2010).
4 Klein preliminarily argues that he was entitled to attorneys’ fees under
law of the case because the district court’s initial judgment specified that
“Plaintiffs shall recover their costs, including reasonable attorneys’ fees
pursuant to motion for the two claims on which they prevailed,” and the
City did not challenge this on appeal in Klein II. That statement in the
order did not indicate that the court had analyzed or considered Klein’s
entitlement to fees, and the claim for attorneys’ fees had not been
presented, briefed, or argued. We conclude that the district court’s
judgment merely suggested that Klein would later be able to seek
attorneys’ fees “pursuant to motion.”

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KLEIN V. CITY OF LAGUNA BEACH 9
III
42 U.S.C. § 1988(b) provides that the “prevailing party”
in a § 1983 suit may be entitled to “a reasonable attorney’s
fee” in the court’s “discretion.” A prevailing plaintiff
“should ordinarily recover an attorney’s fee unless special
circumstances would render such an award unjust.” Hensley
v. Eckerhart, 461 U.S. 424, 429 (1983) (citation omitted). A
party that wins only nominal damages is a “prevailing party”
under the statute. Farrar, 506 U.S. at 112.
Once a party is found eligible for fees, the district court
must then determine what fees are reasonable. Hensley,
461 U.S. at 433. District courts generally start by applying
the “lodestar method,” i.e., multiplying “the number of hours
the prevailing party reasonably expended on the litigation by
a reasonable hourly rate.” Gonzalez v. City of Maywood,
729 F.3d 1196, 1202 (9th Cir. 2013) (quoting Ballen v. City
of Redmond, 466 F.3d 736, 746 (9th Cir. 2006)). The district
court “may then adjust [the lodestar] upward or downward
based on” twelve factors identified in Hensley. Id. (quoting
Moreno v. City of Sacramento, 534 F.3d 1106, 1111 (9th Cir.
2008)); see Hensley, 461 U.S. at 430 n.3.5
Because “‘the most critical factor’ in determining the
reasonableness of a fee award ‘is the degree of success
obtained,’” Farrar, 506 U.S. at 114 (quoting Hensley,
461 U.S. at 436), the Supreme Court has created a narrow
exception to the standard Hensley procedure: When a
5 These twelve factors are often called the “Kerr factors” in the Ninth
Circuit, because of Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th
Cir. 1975), in which we first adopted them. See Gonzalez, 729 F.3d at
1209 n.11.

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KLEIN V. CITY OF LAGUNA BEACH 10
plaintiff “seeks compensatory damages but receives no more
than nominal damages,” “the court may lawfully award low
fees or no fees without reciting the 12 [Hensley] factors
bearing on reasonableness” or calculating the lodestar. Id. at
115. The Court declined to award Farrar fees because he won
only a $1 nominal victory despite having sought $17 million
in compensatory damages. Id. at 114. We have since stated
that in cases where “a plaintiff recovers only nominal
damages because of his failure to prove an essential element
of his claim for monetary relief,” the district court should
balance three factors derived from Justice O’Connor’s
concurrence in Farrar. Mahach-Watkins v. Depee, 593 F.3d
1054, 1059 (9th Cir. 2010) (quoting Farrar, 506 U.S. at 115).
In this case, the district court concluded that because
Klein received only nominal damages, the Farrar exception
applied, and the court balanced the O’Connor factors and
determined that Klein was not entitled to fees. Klein argues
that the district court erred by applying Farrar. In Klein’s
view, “The Farrar special circumstances exception is limited
to cases where civil rights plaintiffs seek compensatory
damages but obtain only nominal damages, not to cases
where plaintiffs seek only nominal damages” like this one.
Instead, Klein argues that he was entitled to receive attorneys’
fees under the standard procedure, i.e., beginning with the
lodestar and then considering the twelve Hensley/Kerr
factors. We agree.
While we have not addressed this precise issue, we stated
in Stivers v. Pierce, 71 F.3d 732 (9th Cir. 1995), that
“Farrar’s holding is limited to cases in which the plaintiff
seeks substantial monetary damages but obtains only a
nominal award.” Id. at 753. We held that Farrar did not
apply in that case because the plaintiffs had obtained some of

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KLEIN V. CITY OF LAGUNA BEACH 11
the injunctive relief they sought via a settlement agreement.
Id. This reading of Farrar was appropriate because Congress
has “emphasized the importance of attorneys’ fees in cases
seeking injunctive relief, where there is no monetary light at
the end of the litigation tunnel.” Moreno, 534 F.3d at 1111
n.1. The same logic applies here. Without a request for
compensatory damages, Klein had no chance of receiving a
significant monetary payout, and his suit was not one in
which “recovery of private damages is the purpose of . . .
civil rights litigation.” Farrar, 506 U.S. at 114 (quoting
Riverside v. Rivera, 477 U.S. 561, 585 (1986) (Powell, J.,
concurring in the judgment)). Instead, Klein’s primary goal
has always been to legalize amplified speech in Laguna
Beach. While Laguna Beach argues that Klein did not seek
“elimination of the challenged regulation” because he never
brought a facial challenge, the City is mistaken; the complaint
alleges, “On its face, and as applied, the ordinances violate
the First Amendment to the United States Constitution” and
Article I, section 2 of the California Constitution.
Laguna Beach also argues that Klein sought $72,000 in
compensatory damages under the California Bane Act, and
judgment was entered against him on the merits of that claim.
This argument is unpersuasive. First, Klein sought only
$4,000 under the statute as nominal damages, not
compensatory damages—unlike federal law, the statute
guarantees a minimum of $4,000 regardless of actual
damages. Cal. Civ. Code § 52. Klein’s attempt to get
statutory damages under the Bane Act did not place him into
the class of plaintiffs to which Farrar applies. Second,
42 U.S.C. § 1988 rewards plaintiffs who prevail on federal
claims, so Klein’s request for relief under state law has no
bearing on our analysis of what legal framework applies to
motions under § 1988.

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KLEIN V. CITY OF LAGUNA BEACH 12
The district court reasoned that Farrar should be applied
because there was
no principled basis to treat differently a
plaintiff who does not seek compensatory
damages because he cannot prove actual
injury from a plaintiff who seeks
compensatory damages and fails to prove
actual injury. . . . Thus, although Mr. Klein’s
decision to not pursue in court what he cannot
prove is laudable, his failure to recover some
significant amount of damages or other
meaningful relief counsels against an award of
fees.
The district court’s reasoning does not persuade us because
it obscures the rationale behind Farrar’s narrow exception.
Farrar emphasized the importance of considering “the
amount of damages awarded as compared to the amount
sought.” 506 U.S. at 114 (quoting Riverside, 477 U.S. at 585)
(emphasis added). This comparative analysis matters
because, as discussed above, “‘the most critical factor’ in
determining the reasonableness of a fee award ‘is the degree
of success obtained.’” Id. (quoting Hensley, 461 U.S. at 436).
The Supreme Court in Farrar concluded that because Farrar
sought $17 million and was awarded only $1, he essentially
lost—his victory was only “technical.” Id. We drew the
same conclusion in Romberg v. Nichols, 48 F.3d 453 (9th Cir.
1995), where the plaintiffs sought $2 million and received
only $1. “As in Farrar,” we stated, “the Rombergs requested
a substantial sum, but received only one dollar each; although
they prevailed, the Rombergs did not succeed.” Id. at 455
(emphasis added). This makes good sense. A plaintiff who
“asked for a bundle and got a pittance” has not achieved

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KLEIN V. CITY OF LAGUNA BEACH 13
success in that he did not reach the goal sought. Farrar,
506 U.S. at 120 (O’Connor, J., concurring).
In this case, however, when one compares the relief Klein
sought with the results he achieved, it is clear that he
succeeded. Klein’s suit was forward-looking, and he gained
the relief that he primarily sought when the challenged law
was amended to expand the permissible use of amplification
devices. As we stated in a previous appeal of this matter, “the
City voluntarily repealed all challenged portions of the sound
ordinance as a result of this lawsuit.” Klein II, 533 F. App’x
at 775.6
The Fifth Circuit has also recently held that Farrar does
not apply in this type of situation. See Sanchez v. City of
Austin, 774 F.3d 873 (5th Cir. 2014). In that case, the district
court granted the plaintiffs’ request for an injunction but
denied all other requested relief, including nominal damages.
Id. at 877. The City of Austin argued that “Appellants’ injury
and victory merely were technical or de minimis and thus
justify a wholesale denial of fees,” citing Farrar for support.
Id. at 882. The Fifth Circuit rejected this argument and read
Farrar narrowly to apply only when the plaintiff “seeks
compensatory damages but receives no more than nominal
damages.” Id. at 883 (quoting Farrar, 506 U.S. at 115). The
court explained, “Unlike Farrar, Appellants’ primary goal in
this litigation was to force the City to stop issuing CTNs
[criminal-trespass notices]. Appellants achieved that goal by
securing a permanent injunction against future enforcement
6 Considering the total circumstances here, we agree that this
characterization is accurate and binding on our panel as the law of the
case. See Old Person v. Brown, 312 F.3d 1036, 1039 (9th Cir. 2002).

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KLEIN V. CITY OF LAGUNA BEACH 14
of the CTN policy. A fee award was therefore appropriate.”
Id.
As in Sanchez, Klein’s primary goal was to change the
City’s policy, not to secure compensatory damages.
Although Klein did not receive a permanent injunction and
declaratory relief, the district court appears to have denied
such relief only because the City voluntarily eliminated the
policies about which Klein complained. It is more accurate
to think of Klein’s request for an injunction as being mooted
when the City changed the law to accommodate Klein’s
planned conduct, rather than denied on its merits. Klein
achieved the outcome he sought when he filed this lawsuit,7
and Farrar “does not control” in these circumstances. Id.8
7 And although Klein did not receive nominal damages for his
constitutional claim regarding the use of sound-amplifying devices near
the high school between 3:35 and 4:05 p.m., the new ordinance does not
prohibit that conduct so long as he does not “unreasonably disrupt[],
obstruct[], impair[] or interfere[] with the normal use and operation of [the
school] for [its] intended purposes.”
8 Buckhannon Board and Care Home, Inc. v. West Virginia Department
of Health & Human Resources, 532 U.S. 598 (2001), does not prevent us
from considering the City’s voluntary changes in determining the
appropriateness of a fee award in this case. Buckhannon held that litigants
are not prevailing parties based on the “catalyst theory,” i.e., when “the
lawsuit brought about a voluntary change in the defendant’s conduct.” Id.
at 601. For the plaintiff to qualify as a prevailing party, his suit must have
led to a “judicially sanctioned change in the legal relationship of the
parties.” Id. at 605. But as we explained in Benton v. Oregon Student
Assistance Commission, 421 F.3d 901 (9th Cir. 2005), “Buckhannon did
not address the issue of the factors to be applied in determining the
reasonableness of an attorney’s fee award to a prevailing party.” Id. at
907. As long as a litigant can establish prevailing party status without
reliance on the catalyst theory—which Klein can, because he was awarded
nominal damages—a court may consider whether the litigant achieved a

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KLEIN V. CITY OF LAGUNA BEACH 15
We vacate the district court order and remand for the district
court to analyze Klein’s entitlement to attorneys’ fees under
the procedures specified by the Supreme Court in Hensley.
See Gonzalez, 729 F.3d at 1202.
IV
Klein also argues that he was entitled to attorneys’ fees
under California law, including an enhancement multiplier.
Cal. Civ. Proc. Code § 1021.5 states, “Upon motion, a court
may award attorneys’ fees to a successful party against one or
more opposing parties in any action which has resulted in the
enforcement of an important right affecting the public
interest.” When California plaintiffs prevail in federal court
on California claims, they may obtain attorneys’ fees under
section 1021.5. See Mangold v. Cal. Pub. Utils. Comm’n,
67 F.3d 1470, 1478 (9th Cir. 1995). Klein does not dispute
that section 1021.5 does not apply in federal court when a
plaintiff does not plead any California claims.
Klein argues that because he pled a California state law
claim, he is entitled to fees under the California statute even
though he lost on the claim. But federal courts apply state
law for attorneys’ fees to state claims because of the Erie9
doctrine, see id., and Erie does not compel federal courts to
apply state law to a federal claim. See MRO Commc’ns, Inc.
v. Am. Tel. & Tel. Co., 197 F.3d 1276, 1279–80 (9th Cir.
public goal or accomplished a public purpose with the litigation, including
inducing a voluntary change by the defendant, “for the limited purpose of
determining a reasonable fee award.” Benton, 421 F.3d at 907.
9 Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938) (holding that federal
courts apply state law to non-federal claims).

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KLEIN V. CITY OF LAGUNA BEACH 16
1999) (in an action involving state and federal claims,
awarding attorneys’ fees under state law only with respect to
state claims). Klein was only a prevailing party on his federal
claims, and “since we address federal, not state claims, the
federal common law of attorney’s fees, and not [state] law, is
the relevant authority.” Modzelewski v. Resolution Trust
Corp., 14 F.3d 1375, 1379 (9th Cir. 1994).
Klein cites Jones v. City of L.A., 2011 U.S. Dist. LEXIS
68416 (C.D. Cal. 2011), for the proposition that attorneys’
fees under California law are proper when the party pleads
both state and federal claims and prevails on federal law even
when he “did not pursue the state claim in summary
judgment.” Id. at *4. But the plaintiff in Jones never lost on
the state claims—the parties reached a settlement, and the
court reasoned that “[t]he settlement agreement provides for
almost all the relief which the plaintiffs sought, and the
plaintiffs’ complaint included a state law claim.” Id. Jones
does not stand for the proposition that a party gets fees under
California law when it wins a federal claim but loses its state
claim on the merits. We affirm the district court’s denial of
fees under California law.10
AFFIRMED in part, VACATED in part, and
REMANDED.
10 We therefore need not reach Klein’s contention that the district court
erred in concluding that he forfeited his catalyst theory argument
regarding attorneys’ fees under California law.

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