Introduction

In Donald Freed v. Michelle Thomas, Nos. 24-1170/1197/1251 (6th Cir. May 12, 2025), the Sixth Circuit addressed two consequential questions in the wake of Michigan’s post-tax-foreclosure “equity” litigation:

• When a state intervenes under 28 U.S.C. § 2403(b) to defend the constitutionality of its statute in a 42 U.S.C. § 1983 case and loses, can it be held liable for attorneys’ fees under 42 U.S.C. § 1988(b) even if its position was not frivolous?
• What level of explanation must a district court provide when it reduces a fee applicant’s claimed hours and rates with an across-the-board percentage cut?

The dispute arises from Gratiot County’s 2017 foreclosure on Donald Freed’s home for a tax debt of roughly $1,110. The County sold the home for $42,000 and, consistent with then-prevailing law, kept all proceeds. Freed sued under § 1983, claiming a taking without just compensation. The Michigan Attorney General intervened under § 2403(b) solely to defend the constitutionality of Michigan’s General Property Tax Act (GPTA).

The parties’ path to the fee dispute traversed major intervening precedents. The Supreme Court’s Knick v. Township of Scott (2019) opened federal courthouses to many takings plaintiffs, partially abrogating Sixth Circuit precedent in Wayside Church. And the Michigan Supreme Court’s Rafaeli, LLC v. Oakland County (2020) recognized a right to surplus proceeds under the Michigan Constitution. On remand in this case, the County conceded a taking but contested the measure of compensation; this Court later held the federal Takings Clause required payment of the surplus minus debt, rejecting Freed’s broader “equity” theory (Freed II, 81 F.4th 655).

After prevailing in part, Freed sought attorneys’ fees. The district court held Gratiot County and the State liable but reduced both hours and rates by 35% and apportioned 95% of the fees to the County and 5% to Michigan. All sides appealed.

Summary of the Opinion

The Sixth Circuit affirms that:

• Freed is a “prevailing party,” and both Gratiot County and the State of Michigan are liable for attorneys’ fees.
• Michigan’s sovereign immunity does not bar fee liability where the State intervened under § 2403(b); under § 1983, attorneys’ fees are “costs” recoverable under § 1988(b), and § 2403(b) subjects state intervenors to liabilities for court costs like any party.
• The “Zipes” limitation for blameless intervenors does not protect a state that intervenes to defend the constitutionality of a statute and loses; such a state is not “blameless” and can be assessed fees without a finding of frivolousness.

However, the court vacates the fee calculation and remands. The district court abused its discretion by reducing claimed hours and rates by a flat 35% without a “reasonably specific explanation” tied to the facts, prevailing market rates, analogous awards, or the degree of success. The court provides guidance for lodestar calculation and for any success-based adjustments, reiterates there is no proportionality requirement between damages and fees, and notes the apportionment rationale may warrant further explanation on remand.

Analysis

A. Precedents and Authorities Cited and Their Role

• Knick v. Township of Scott, 588 U.S. 180 (2019) — Opened federal courts to many takings claims without prior state-litigation exhaustion, partially abrogating Wayside Church. Enabled Freed’s federal suit (Freed I reversed dismissal).
• Rafaeli, LLC v. Oakland County, 952 N.W.2d 434 (Mich. 2020) — Michigan Constitution requires return of surplus proceeds to former owners. Influenced concessions by defendants; framed the compensation measure debate.
• Freed I, 976 F.3d 729 (6th Cir. 2020) — Recognized Knick’s abrogation and reinstated federal jurisdiction over Freed’s claim.
• Freed II, 81 F.4th 655 (6th Cir. 2023) — Held the federal Takings Clause requires payment of surplus proceeds minus debt; rejected the broader “equity” theory. Upheld county liability; dismissed claims against the treasurer on qualified immunity.
• Lackey v. Stinnie, 145 S. Ct. 659 (2025) — Clarified “prevailing party” status: enduring merits relief that alters legal relationships. The Sixth Circuit applies this standard de novo and finds Freed prevailed.
• Hensley v. Eckerhart, 461 U.S. 424 (1983) — Core fee doctrine: lodestar method, exclude unreasonable hours, degree of success is the most critical factor; calls for a “concise but clear explanation” of fee determinations.
• Fox v. Vice, 563 U.S. 826 (2011) — District courts may use estimates based on their overall sense of the case but must apply the correct standard and explain reductions in a reasonably specific way.
• Perdue v. Kenny A., 559 U.S. 542 (2010) — Requires a “reasonably specific explanation for all aspects” of fee determinations; lodestar is strongly presumed reasonable.
• Ne. Ohio Coalition for the Homeless v. Husted, 831 F.3d 686 (6th Cir. 2016) — Appellate review standards; guidance on determining reasonable hourly rates (prevailing market rate, analogous awards, judicial experience).
• Northcross v. Board of Education, 611 F.2d 624 (6th Cir. 1979) — Early Sixth Circuit fee guidance cautioning against arbitrary reductions; the panel harmonizes Northcross with modern Supreme Court direction against line-item “green-eyeshade” accounting.
• City of Riverside v. Rivera, 477 U.S. 561 (1986) — No proportionality requirement between damages and attorneys’ fees in § 1983 cases.
• Reed v. Rhodes, 179 F.3d 453 (6th Cir. 1999) and Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974) — Johnson factors may inform adjustments after lodestar; not mandatory but often useful.
• Webb v. Board of Education, 471 U.S. 234 (1985) — Non-compensable time includes work not reasonably related to the litigation.
• 28 U.S.C. § 2403(b) — States may intervene to defend a state statute’s constitutionality and are “subject to all liabilities of a party as to court costs,” subject to applicable law.
• 42 U.S.C. § 1988(b) — In § 1983 suits, prevailing parties may recover “a reasonable attorney’s fee as part of the costs.”
• Hutto v. Finney, 437 U.S. 678 (1978) — Court costs, including attorneys’ fees under fee-shifting statutes, may be awarded against states notwithstanding the Eleventh Amendment.
• Arizonans for Official English v. Arizona, 520 U.S. 43, 70 n.25 (1997) — § 2403(b) does not expose state intervenors to damages but does subject them to court costs.
• Sullivan County v. Home Indemnity Co., 925 F.2d 152 (6th Cir. 1991) — Confirms in this circuit that attorneys’ fees are recoverable “costs” under § 1988 for § 1983 suits, consistent with Congress’s intent to permit fee awards against states.
• Independent Federation of Flight Attendants v. Zipes, 491 U.S. 754 (1989) — Losing intervenors in Title VII cases are liable for fees only if their position was frivolous, unreasonable, or without foundation, predicated on a distinction between “wrongdoers” and “blameless intervenors.”
• Binta B. ex rel. S.A. v. Gordon, 710 F.3d 608 (6th Cir. 2013) — Applied Zipes to certain intervenors in § 1983 litigation (plaintiff-intervenors).
• Sister-circuit cases limiting Zipes to “blameless” intervenors:
  • Jenkins ex rel. Agyei v. Missouri, 967 F.2d 1248 (8th Cir. 1992)
  • Brat v. Personhuballah, 883 F.3d 475 (4th Cir. 2018)
  • Planned Parenthood of Central N.J. v. Attorney General of N.J., 297 F.3d 253 (3d Cir. 2002)
  • Mallory v. Harkness, 923 F. Supp. 1546 (S.D. Fla. 1996), aff’d, 109 F.3d 771 (11th Cir. 1997)
• Tennessee v. Garner, 471 U.S. 1 (1985) and Will v. Michigan Department of State Police, 491 U.S. 58 (1989) — Recognize that states are generally not “persons” under § 1983 and are immune from damages; distinguishes damages from costs.
• Harbor Watch Condo Ass’n v. Emmet County Treasurer, 863 N.W.2d 745 (Mich. Ct. App. 2014) and Mich. Const. 1963, art. VII, § 22 — Establish that counties must follow state law (here, the GPTA) in foreclosure processes.
• Avenue Grille, Inc. v. Rootstown Twp., 113 F.3d 1234, 1997 WL 219740 (6th Cir. 1997) (table) — Guidance on apportioning fees among multiple defendants based on relative culpability and focus of litigation.

B. The Court’s Legal Reasoning

1) Fee Entitlement: Prevailing Party and State Liability

Applying Lackey v. Stinnie, the panel holds that Freed is a prevailing party because he obtained enduring, merits-based relief that altered the legal relationship between the parties. He won judgment that the County owed him the surplus proceeds (minus debt) under the Fifth and Fourteenth Amendments, although he did not prevail on every theory (e.g., his broader equity claim) and the individual treasurer was dismissed on qualified immunity. Partial success suffices for fee entitlement under Hensley.

As to Michigan, the court emphasizes the text of § 2403(b): an intervening state “shall…be subject to all liabilities of a party as to court costs,” subject to applicable law. In a § 1983 suit, the “applicable” law is § 1988(b), which defines attorneys’ fees as “part of the costs.” Supreme Court precedent confirms that states can be made to pay court costs, including fee-shifting awards, notwithstanding sovereign immunity (Hutto; Arizonans for Official English). Sixth Circuit authority (Home Indemnity) further explains Congress’s intent to treat fees as costs specifically so they could be awarded against states.

On the key Zipes question, the court holds that the “blameless intervenor” limitation does not apply to a state that intervenes under § 2403(b) to defend the constitutionality of its own statute and loses. Zipes’s logic turns on the connection between substantive wrongdoing and fee liability; the Court there shielded “innocent” intervenors who had not committed a legal wrong. By contrast, when a state is responsible for enacting or enforcing the unconstitutional statute at issue, it is not “blameless.” Echoing the Eighth, Fourth, and Third Circuits, the Sixth Circuit thus declines to extend Zipes to this context and allows fee liability without any “frivolous, unreasonable, or without foundation” predicate.

2) Fee Calculation: Lodestar and Explanation Requirements

The district court reduced both claimed hours and hourly rates by 35% in a single, across-the-board cut. While district courts have substantial discretion, that discretion must be exercised using the correct legal framework and supported by a “reasonably specific explanation.”

• Hours: Courts may exclude time not “reasonably expended” and may use estimates informed by their “overall sense” of the case (Hensley; Fox). But they must connect reductions to reasons—e.g., overstaffing, duplication, block billing, administrative tasks, unrelated efforts—and, at least at a categorical level, explain “why” rejected hours were not reasonable. Here, the district court referenced some suggestive items (e.g., 1.5 hours of travel time for serving a document; quarter-hour billing for one-sentence notices; unspecified “objections”), but did not tie a 35% reduction to specific categories or quantify the overbilling it found.
• Rates: The court concluded the reasonable rate was “between $350 and $375,” then reduced counsel’s rates by 35% to approximate that figure. But it made no finding of the prevailing market rate nor cited analogous awards or its own experience in similar cases, as Sixth Circuit precedent encourages (Husted). The absence of such findings rendered the rate reduction inadequately explained.
• Degree of Success: The court alluded to Freed’s benefit from intervening precedent (Knick and Rafaeli) and to his partial success, but did not articulate how those considerations factored into the specific 35% cut. The panel notes that intervening precedent does not automatically counsel a reduction—here, Knick and Rafaeli largely vindicated arguments already briefed—and emphasizes that any success-based adjustment must be explained under Hensley.
• Johnson Factors: The district court mentioned but did not apply the Johnson factors. On remand, the court should clarify whether any post-lodestar adjustments rely on Johnson or other factors beyond the lodestar itself.
• No Proportionality Requirement: The panel rejects the County’s suggestion that the fee award cannot exceed the damages recovered. Rivera forecloses a proportionality rule in § 1983 cases.
• Apportionment: The panel does not disturb the apportionment of 95% to the County and 5% to the State but recognizes that, depending on how the lodestar is recalculated, the district court may wish to further explain apportionment by reference to “relative culpability,” litigation focus, and which defendant drove the expenditure of attorney time (Avenue Grille).

C. Impact and Forward-Looking Significance

• State Intervenor Fee Liability Clarified: Within the Sixth Circuit, a state that intervenes under § 2403(b) to defend a statute’s constitutionality in a § 1983 case and loses may be liable for attorneys’ fees as “costs” under § 1988(b) without any Zipes-style shield. This aligns the Sixth Circuit with sister circuits that confine Zipes to truly “blameless” intervenors.
• Sovereign Immunity and Costs: The opinion fortifies the principle that sovereign immunity does not bar court costs, including § 1988 fees, against a state intervenor in civil rights litigation. Strategically, states must weigh the litigation risk of fee exposure when deciding whether (and how) to intervene to defend statutes.
• Access to Counsel in Civil Rights Litigation: By ensuring fee exposure reaches the real party in interest—the state—when a state law is unconstitutional, the decision promotes the availability of counsel for civil rights plaintiffs, even where local defendants may be resource-constrained.
• Fee Practice in District Courts: The opinion raises the bar on explanation. District courts may use percentage reductions and estimates, but they must articulate reasons connected to the record, identify prevailing market rates, and address analogous awards or experience. Generic references to “overbilling” or to intervening precedent will not suffice without an analytical bridge to the reduction chosen.
• Takings Litigation in Michigan and Beyond: The panel’s reaffirmation that the federal Takings Clause requires return of surplus proceeds (minus debt) complements Rafaeli’s state-constitutional surplus right and may continue to shape post-foreclosure “equity” disputes. The fee-liability holding ensures that when states defend and lose such constitutional positions, prevailing owners are not left uncompensated for the cost of vindication.
• Apportionment Guidance: Although not resolved anew, the opinion flags apportionment as a merits-driven inquiry: relative culpability, which defendant’s conduct drove the case, and which defense efforts consumed the plaintiff’s time.

D. Practical Guidance for Remand (and for Future Cases)

• Hours: Identify categories of non-compensable time (e.g., clerical tasks, excessive travel, duplicative work, unrelated efforts) and estimate disallowed time with supporting reasons. Point to billing practices (e.g., block billing, quarter-hour rounding) only insofar as they hinder review or reflect inefficiency, and translate those concerns into specific, justified percentage reductions by category.
• Rates: Determine the prevailing market rate for similar work by lawyers of comparable skill and experience in the relevant community. Cite sources: bar surveys, prior fee awards in analogous § 1983 cases, and the court’s own experience. Explain any distinction between trial and appellate rates.
• Degree of Success: If adjusting the lodestar downward (or upward) based on partial success, explain the relationship between unsuccessful claims (e.g., the rejected “equity” theory) and the hours claimed, and quantify the effect to the extent practicable.
• Intervening Precedent: Do not assume that favorable intervening cases automatically reduce fees; consider whether the plaintiff had already developed those arguments and whether the intervening decisions simplified or complicated the litigation.
• Apportionment: If allocating fees among multiple defendants, articulate how the record shows differing culpability or litigation burdens attributable to each, and align the allocation with the time entries where possible.

Complex Concepts Simplified

• Prevailing Party: A litigant who wins enduring, merits-based relief that changes the legal relationship with the opponent (Lackey v. Stinnie). You do not need to win on every theory to prevail.
• Lodestar: The baseline fee calculation: reasonable hours multiplied by a reasonable hourly rate. It is presumptively reasonable but may be adjusted for factors like the degree of success.
• § 2403(b) State Intervention: A federal statute that allows a state to intervene in any case where the constitutionality of a state statute is challenged. The statute makes the intervening state liable for “court costs” like any party.
• Attorneys’ Fees as “Costs”: In § 1983 cases, § 1988(b) defines attorneys’ fees as part of court costs, which can be assessed against a state despite sovereign immunity.
• Zipes Rule: Losing intervenors are liable for fees only if their position was frivolous, unreasonable, or without foundation—But only when they are “blameless” intervenors. States defending their own unconstitutional statutes are not “blameless,” so the Zipes shield does not apply.
• Johnson Factors: A non-exclusive list (time and labor, novelty, skill, customary fee, results obtained, etc.) that can inform post-lodestar adjustments. They are advisory and must be applied transparently if used.
• No Proportionality Requirement: Fee awards in civil rights cases need not be proportional to money damages recovered (City of Riverside v. Rivera).
• Qualified Immunity: A defense protecting officials from damages unless they violated clearly established law. Here, it barred damages against the individual treasurer but did not preclude fee liability against the County or the State as intervenor for costs.

Conclusion

This opinion establishes two significant principles in the Sixth Circuit. First, a state that intervenes under § 2403(b) to defend the constitutionality of its statute and loses may be held liable for attorneys’ fees under § 1988(b) as “costs,” without the benefit of Zipes’s “blameless intervenor” limitation. Sovereign immunity does not bar such cost liability. This aligns fee exposure with substantive responsibility for unconstitutional statutes and strengthens the fee-shifting framework underpinning civil rights enforcement.

Second, when calculating fees, district courts must do more than cite red flags or invoke intervening precedent in the abstract. Percentage reductions to hours and rates are permissible, but they must be tethered to the record with a reasonably specific explanation. Courts should identify prevailing market rates, consult analogous awards, and address the degree of success with analytic rigor. At the same time, any temptation to impose a proportionality cap must be resisted under settled Supreme Court authority.

The decision thus clarifies responsibility for fee-shifting when a state steps in to defend—and loses—a constitutional fight, and it provides concrete guidance to district courts on the articulation required for defensible fee awards. In the broader legal landscape, the ruling advances accountability for unconstitutional statutory regimes while reinforcing access to justice through robust, predictable fee-shifting in § 1983 litigation.