Introduction

This decision from the Appellate Division, Third Department, reorients fee‑shifting doctrine under New York’s Equal Access to Justice Act (CPLR art 86, the “state EAJA”). The petitioner, Peter Markey, challenged the Office of Temporary and Disability Assistance’s (OTDA) denial of COVID‑19 Emergency Rental Assistance Program (ERAP) benefits. After suit was filed, OTDA voluntarily reversed course—granting Markey all requested relief (rental assistance and utility arrears)—leading Supreme Court (Albany County, Connolly, J.) to dismiss the Article 78 proceeding as moot and to deny counsel fees on the ground that Markey was not a “prevailing party.”

The Third Department reverses, expressly departing from its own prior precedent in Matter of Clarke v Annucci and rejecting a strict importation of federal “judicial imprimatur” requirements (from Buckhannon) into the state EAJA. In a detailed, text‑and‑purpose analysis, the Court holds that a litigant “prevails in whole” under CPLR 8602(f) when they receive all relief sought—even if the State grants it voluntarily after suit is filed and without any judicial ruling on the merits. The Court also clarifies that, in such full‑relief cases, the party need not prove that their lawsuit actually catalyzed the State’s reversal. The matter is remitted for the trial court to assess the remaining statutory requirements: whether the State’s position was “substantially justified” and whether any “special circumstances” render a fee award unjust.

Summary of the Judgment

• A party “prevails in whole” under CPLR 8602(f) by obtaining all the relief sought in a lawsuit against the State—even where the State grants that relief voluntarily after litigation commences and the case is dismissed as moot.
• No “judicial imprimatur” is required for prevailing‑party status under the state EAJA when the party prevails in whole, and the party need not prove that the lawsuit caused (catalyzed) the State’s reversal.
• Clarke v Annucci, 190 AD3d 1245 (3d Dept 2021), is no longer to be followed to the extent it rejects this understanding.
• The Court leaves unresolved whether a party who “prevails in substantial part” (rather than in whole) can recover fees absent a merits disposition or settlement; for partial‑relief cases, the Third Department continues to require a merits‑based outcome changing the legal relationship.
• The case is remitted to Supreme Court to decide (a) whether the State’s position was “substantially justified” (assessed based on the record before the agency when it acted) and (b) whether “special circumstances” make an award unjust.

Legal Framework and Issues Presented

The state EAJA mandates fee awards to qualifying prevailing parties in civil actions against the State unless the State’s position was substantially justified or special circumstances make an award unjust (CPLR 8601[a]). Three core questions arise:

1. Who is a “prevailing party” under CPLR 8602(f), particularly when the State moots a case by voluntarily granting relief after suit is filed?
2. Does the state EAJA import the federal “judicial imprimatur” requirement from Buckhannon and its progeny?
3. When and how are the “substantial justification” and “special circumstances” prongs assessed?

Precedents Cited and Their Influence

Federal Baseline: Buckhannon and Lackey v. Stinnie

• Buckhannon Board & Care Home, Inc. v. West Virginia Dept. of Health & Human Resources, 532 US 598 (2001), held that “prevailing party” in federal fee‑shifting statutes (e.g., 42 USC § 1988) requires a “judicially sanctioned change in the legal relationship of the parties,” rejecting the “catalyst theory.”
• Lackey v Stinnie, 604 US ___, 145 S Ct 659 (2025), reinforces that understanding, underscoring the necessity of judicial imprimatur in federal regimes like § 1988.
• Post‑Buckhannon, federal EAJA cases largely abandoned the catalyst theory (Ma v Chertoff, 547 F3d 342 [2d Cir 2008]; Elliott v US Dept. of State, 122 F Supp 3d 39 [SDNY 2015]).

New York Precedents Limiting Fees Absent Judicial Imprimatur

• Matter of Clarke v Annucci, 190 AD3d 1245 (3d Dept 2021), denied prevailing‑party status where the agency voluntarily reversed before judicial review; it imported the federal judicial‑imprimatur requirement. Overruled here.
• Matter of Auguste v Hammons, 285 AD2d 417 (1st Dept 2001), initially aligned with Buckhannon to reject catalyst under the state EAJA.
• Matter of Gonzalez v NYS Dept. of Corr. & Community Supervision, 152 AD3d 680 (2d Dept 2017), cited Buckhannon-based authorities, reflecting an imprimatur‑oriented approach.
• Matter of Criss v NYS Dept. of Health, 192 AD3d 1545 (4th Dept 2021), echoed skepticism about broad state EAJA interpretations.
• Matter of Vetter v Board of Educ., Ravena-Coeymans-Selkirk CSD, 53 AD3d 847 (3d Dept 2008), applying § 1988, treated Buckhannon as controlling for federal fee‑shifting—later analogized in state EAJA cases.

New York Precedents Supporting a Broader, Text‑Driven Approach

• Kimmel v State of New York, 29 NY3d 386 (2017), characterizes the state EAJA as a remedial statute to be liberally construed to achieve its purpose of facilitating access to justice for individuals and small entities challenging unjustified state action.
• Matter of New York State Clinical Lab. Assn. v Kaladjian, 85 NY2d 346 (1995), interprets “prevails in substantial part” by comparing the relief sought to that obtained; it anchors “issues” to the grounds litigated and contemplates merits‑based outcomes in partial‑relief cases.
• Matter of Solla v Berlin, 106 AD3d 80 (1st Dept 2013) (adopting catalyst), revd on other grounds, 24 NY3d 1192 (2015) (Court of Appeals assumed without deciding that catalyst could apply but found no causation on the record). The Third Department draws from Solla’s account of pre‑1989 federal practice to infer legislative intent.
• Statutory settlement practice under CPLR 2104 (Matter of Pittsford Canalside Props., LLC v Village of Pittsford ZBA, 181 AD3d 1235 [4th Dept 2020]; Glenville PBA v Mosher, 31 AD3d 874 [3d Dept 2006]) supports the Court’s view that “settlement” need not carry judicial imprimatur for state EAJA purposes.

Legal Reasoning

1) Statutory Text Controls: New York’s Definition of “Prevailing Party” and “Final Judgment” Diverges from Federal Law

• The state EAJA contains its own definition of “prevailing party”: a party who “prevails in whole or in substantial part where such party and the State prevail upon separate issues” (CPLR 8602[f]). Unlike federal statutes interpreted in Buckhannon, New York law does not leave “prevailing party” to judicial construction.
• The state EAJA defines “final judgment” as “a judgment that is final and not appealable, and settlement” (CPLR 8602[c])—not “order of settlement” as in the federal EAJA (28 USC § 2412[d][2][G]). New York’s text deliberately encompasses settlements that carry no judicial imprimatur under CPLR 2104. This textual choice is incompatible with a hard judicial‑imprimatur prerequisite.

2) Remedial Purpose and Legislative History Favor a Broad, Access‑Enhancing Reading

• The state EAJA aims to encourage challenges to unjustified state action by allowing fee recovery (Kimmel), and the Legislature referenced the federal EAJA and the “significant body of case law that has evolved thereunder” (CPLR 8600).
• In 1989—when the state EAJA was enacted—federal circuits generally accepted the catalyst theory for the federal EAJA. The Court reasons that, had it interpreted the statute shortly after enactment, it would have recognized catalyst‑based fee eligibility in appropriate circumstances.
• Failed post‑Buckhannon legislative efforts to “restore” catalyst are not evidence of contrary intent; legislative inaction is an unreliable guide, and those bills were reactive to courts’ narrowing, not affirmative rejections by the Legislature.

3) Resolving Ambiguity in “Prevails in Whole” vs. “Prevails in Substantial Part”

• The phrase “prevails in whole or in substantial part where such party and the State prevail upon separate issues” (CPLR 8602[f]) is ambiguous as to whether the “separate issues” clause qualifies both categories or only “substantial part.”
• Applying remedial construction and statutory purpose, the Court holds: when a party obtains all the relief sought, it “prevails in whole” even without a merits ruling. Importing a merits‑based “issues” requirement into full‑relief cases would frustrate the EAJA’s purpose by denying fees where the State “folds” once sued.
• For “substantial part” cases, however, the Court preserves the merits‑based “issues” requirement (consistent with Kaladjian), i.e., partial success must be anchored in a merits outcome or settlement that changes the legal relationship.

4) No Causation Showing Required in Full‑Relief Cases

• The Court intentionally declines to graft the federal, pre‑Buckhannon catalyst test’s causation element (that the lawsuit “prompted” the change) onto the state EAJA for full‑relief scenarios. Requiring proof that the lawsuit catalyzed the reversal would:
  • invite advisory merits determinations in moot cases, and
  • impose a limitation not “clearly expressed” in the state EAJA.
• Guardrails remain: parties must still satisfy the statute’s “substantial justification” and “special circumstances” prongs.

5) Substantial Justification and Special Circumstances as Screening Mechanisms

• Substantial justification is assessed based on the record before the agency at the time it acted—i.e., pre‑litigation (CPLR 8601[a]; 8602[e]). An incorrect decision can still be substantially justified; if so, fees are denied (e.g., Sutherland v Glennon, Rivers v Corron, Scibilia v Regan).
• Special circumstances provide an equitable safety valve; reasons for the State’s voluntary reversal may be considered in deciding whether a fee award would be unjust.

Impact and Implications

On Future EAJA Fee Litigation

• Litigants who receive complete relief from the State after filing suit now qualify as “prevailing parties” without having to secure a merits ruling or prove causation.
• Expect more fee motions following mootness dismissals. Contested issues will shift to substantial justification and special circumstances.
• Timing remains critical: fee applications must be filed within 30 days of “final judgment”—a final, non‑appealable judgment or a settlement (CPLR 8601[b]; 8602[c]).

On Agency Behavior

• Agencies face potential fee exposure even when they voluntarily reverse after suit begins. This incentivizes careful front‑end decision‑making and early pre‑suit correction where feasible.
• Where immediate reversal is warranted, agencies may still defeat fee liability by demonstrating that the initial position was substantially justified on the then‑existing record or that special circumstances make an award unjust.

Inter‑Departmental Landscape and the Prospect of High Court Review

• The Third Department’s decision departs from earlier Buckhannon‑driven approaches followed in some other Departments and expressly overrules its own Clarke. The First Department has moved toward recognizing catalyst in various formulations (Solla, Liu, Jaquez), while Second and Fourth Department decisions have reflected more restrictive views.
• This decision increases the likelihood of Court of Appeals review to harmonize statewide treatment of “prevailing party” under the state EAJA.

Access to Justice

• The ruling realigns the state EAJA with its core purpose: enabling individuals and small entities to challenge unjustified state action without being penalized when the State capitulates post‑filing.
• By removing the causation hurdle in full‑relief cases, the Court reduces the risk that fee disputes devolve into advisory mini‑trials on moot merits questions.

Complex Concepts Simplified

• Prevailing party (CPLR 8602[f]): Under this decision, a litigant “prevails in whole” if they obtain all the relief sought in the action—even via voluntary agency reversal after suit. “Prevails in substantial part” remains tied to a merits or settlement outcome on discrete issues.
• Catalyst theory: A doctrine where the plaintiff can claim fees because the lawsuit prompted the defendant to grant relief. The Court adopts a New York‑specific, text‑driven version for full‑relief cases that does not require proving causation.
• Judicial imprimatur: A formal, court‑ordered change in the parties’ legal relationship (e.g., a judgment). Required federally (Buckhannon) but not required here for full‑relief prevailing status under the state EAJA.
• Final judgment (CPLR 8602[c]): A final, non‑appealable judgment, and settlement. Unlike federal law, New York’s explicit inclusion of “settlement” signals that judicial imprimatur is not always necessary.
• Substantial justification (CPLR 8601[a]; 8602[e]): The State’s position must have had a reasonable basis in law and fact, measured at the time the agency acted, based on the administrative record.
• Special circumstances (CPLR 8601[a]): An equitable escape valve allowing courts to deny fees when awarding them would be unjust—considering, for example, the reasons behind the State’s voluntary reversal.
• Scope of “full relief” (n.2 in the opinion): Means all relief that could have been awarded in a final judgment or settlement on the merits; excludes alternative or temporary relief.

Practical Guidance

For Petitioners and Counsel

• Plead the relief you truly seek; “prevails in whole” turns on receiving all relief that could be awarded by judgment or settlement.
• If the State grants complete relief post‑filing, you are a prevailing party under the state EAJA without proving causation. Promptly move for fees within 30 days of final judgment or settlement.
• Prepare to litigate the “substantial justification” prong using the administrative record as it existed when the agency decided; develop and preserve that record early.
• Anticipate “special circumstances” arguments and be ready to explain why fees are equitable in the case’s context.

For Agencies

• Front‑end rigor matters: ensure that initial determinations rest on sound records and law. Even if later reversed, substantial justification can defeat fees.
• Where error is identified, consider pre‑suit corrective action to minimize fee exposure; once suit is filed, voluntary reversal may still trigger prevailing‑party status.
• Document reasons for reversal; those reasons can be relevant to “special circumstances.”

What the Court Did Not Decide

• Whether the catalyst theory (or any non‑imprimatur approach) applies when a party “prevails in substantial part” only. For partial success, a merits outcome or settlement remains required to change the legal relationship.
• Whether OTDA’s initial ERAP denial was substantially justified or whether special circumstances foreclose fees in this case—those issues are left to Supreme Court on remand.

Key Takeaways

• New rule: A litigant “prevails in whole” under the state EAJA by obtaining all relief sought—even via voluntary State action post‑filing—and need not show causation or judicial imprimatur.
• Clarke v Annucci is overruled to the extent it required a judicially sanctioned outcome for prevailing‑party status in such circumstances.
• Partial‑relief cases still require a merits or settlement outcome on discrete issues to qualify for fees.
• Substantial justification (measured at the time of the agency’s action) and special circumstances remain meaningful constraints on fee awards.
• This decision is a significant restoration—and refinement—of catalyst principles tailored to the text, structure, and remedial purpose of New York’s EAJA.

Conclusion

Matter of Markey v Tietz marks a watershed in New York fee‑shifting law. The Third Department re‑centers analysis on the state EAJA’s distinct text and remedial purpose, recognizes prevailing‑party status for litigants who obtain full relief through voluntary State reversals after litigation commences, and rejects the federal judicial‑imprimatur and causation requirements for such cases. While the Court preserves a merits/settlement requirement for partial‑success scenarios, its ruling strengthens access to justice by ensuring that litigants who compel full relief—whether by judgment, settlement, or voluntary reversal—are eligible to seek fees. On remand, the battle turns to the act’s remaining guardrails: substantial justification and special circumstances. Given the divergence among Departments and the import of the issues, this decision is poised to influence statewide practice and may invite high‑court review.