State Intervenors Who Defend a Statute’s Constitutionality Are Fully Liable for § 1988 Attorney’s Fees Under § 2403(b)—No Zipes “Frivolousness” Shield; Lodestar Reductions Require Specific, Case‑Tethered Explanations

Introduction

In Donald Freed v. Michelle Thomas, Gratiot County, and the Michigan Department of Attorney General (as intervenor), the Sixth Circuit delivers two precedential rulings with wide systemic reach. First, it holds that a state that intervenes under 28 U.S.C. § 2403(b) to defend the constitutionality of its statute can be assessed prevailing-plaintiff attorney’s fees as “court costs” under 42 U.S.C. § 1988(b), without the “frivolous, unreasonable, or without foundation” limitation from Independent Federation of Flight Attendants v. Zipes. Second, it vacates a district court’s across-the-board 35% haircut to hours and rates for lack of a sufficiently specific, litigation-grounded explanation, clarifying what “reasonably specific” means when courts use estimates rather than line-by-line accounting in lodestar calculations.

The case arises from Michigan’s now-repudiated tax-foreclosure practice under the General Property Tax Act (GPTA), under which counties retained surplus proceeds from tax foreclosures. Gratiot County sold Freed’s $98,800 home for $42,000 to satisfy a tax debt of roughly $1,110 and kept the surplus. Freed brought a federal takings claim under § 1983; Michigan intervened under § 2403(b) to defend the GPTA’s constitutionality. After a multi-year journey shaped by Knick v. Township of Scott and the Michigan Supreme Court’s Rafaeli decision, Freed prevailed on the core surplus-proceeds takings theory against the County (but not on his broader “equity” theory), and the treasurer was dismissed on qualified immunity. The present appeal concerns attorneys’ fees: entitlement, state liability, and how to calculate a reasonable award.

Summary of the Opinion

Entitlement and State Liability: The court affirms that Freed is a prevailing party entitled to reasonable attorney’s fees from Gratiot County and from Michigan. Michigan’s sovereign immunity does not bar fee liability here because § 2403(b) expressly subjects intervening states to “all liabilities of a party as to court costs,” and in § 1983 cases, “court costs” include § 1988 attorneys’ fees.
Zipes Does Not Shield State Intervenors: The court rejects Michigan’s argument that, as an intervenor, it can be liable for fees only if its position was frivolous under Zipes. When a state intervenes to defend a statute’s constitutionality, it is not a “blameless” or “innocent” intervenor; it is responsible for the enactment or enforcement of the challenged law. Such a state stands like a traditional civil-rights defendant for fee purposes and may be assessed fees upon the plaintiff’s success.
Lodestar Method and Explanation: The court vacates the district court’s 35% reductions to both hours and rates because the court did not provide a “reasonably specific” explanation tied to the record. While percentage reductions are permissible, courts must identify why reductions are warranted—e.g., pinpointing duplication, overstaffing, unrelated work, or market-rate support—and not simply list potentially relevant factors.
Degree of Success and Intervening Precedent: Partial success and intervening precedent (Knick, Rafaeli) do not automatically warrant a reduction. If used to adjust the award, the court must articulate how these factors actually diminished the reasonable work necessary to succeed here.
No Proportionality Requirement: The panel reiterates that fees in § 1983 cases need not be proportional to damages (City of Riverside v. Rivera).
Disposition: The Sixth Circuit affirms fee entitlement and Michigan’s fee liability, vacates the amount, and remands for a recalculated award with adequate explanation. The court does not disturb the 95% County/5% State apportionment but invites a fuller explanation if the district court revisits allocation.

Analysis

Precedents Cited and Their Role

Knick v. Township of Scott, 588 U.S. 180 (2019): Eliminated a key jurisdictional barrier to immediate federal takings suits, enabling Freed’s claim to proceed in federal court after initial dismissal under Wayside Church. Its timing mattered to the “prevailing party” path and to arguments about how much of Freed’s success stemmed from intervening precedent.
Rafaeli, LLC v. Oakland County, 952 N.W.2d 434 (Mich. 2020): Held, as a matter of state constitutional law, that former owners are entitled to surplus proceeds after tax foreclosure. While this fortified the surplus-proceeds theory under state law, the Sixth Circuit previously held in Freed II that the federal Takings Clause also requires return of the surplus; it rejected Freed’s broader “equity” theory for full fair-market value.
Hensley v. Eckerhart, 461 U.S. 424 (1983): Cornerstone of fee-shifting methodology—lodestar (reasonable hours × reasonable rate) with potential adjustment based on the degree of success. The panel invokes Hensley’s requirement for courts to provide a clear explanation for fee determinations and to exclude unreasonably expended hours.
Fox v. Vice, 563 U.S. 826 (2011): Courts need not undertake a line-by-line dissection; reasonable estimates are acceptable, but courts must identify the reasons that anchor any percentage reductions or exclusions.
Perdue v. Kenny A., 559 U.S. 542 (2010): Reinforces the need for a “reasonably specific explanation” of fee determinations and preserves the lodestar’s centrality.
Reed v. Rhodes, 179 F.3d 453 (6th Cir. 1999), and Johnson v. Georgia Highway Express, 488 F.2d 714 (5th Cir. 1974): The Sixth Circuit recognizes that Johnson factors may be consulted after lodestar is calculated, but they cannot substitute for a proper lodestar analysis and must be applied with case-specific reasoning.
Northcross v. Board of Education, 611 F.2d 624 (6th Cir. 1979): Early articulation against arbitrary or conclusory reductions. The panel clarifies that, after Fox and later cases, district courts need not itemize every disallowed minute but still must provide a tethered, case-specific rationale for any across-the-board reduction.
Lackey v. Stinnie, 145 S. Ct. 659 (2025): Provides the prevailing-party standard: success requires a conclusive resolution granting enduring relief on the merits that alters the legal relationship of the parties. The panel applies this in assessing Freed’s entitlement.
City of Riverside v. Rivera, 477 U.S. 561 (1986): Rejects a proportionality requirement between damages and fees in civil-rights cases—used to reject Gratiot County’s argument for capping fees at the merits recovery.
28 U.S.C. § 2403(b) and Arizonans for Official English v. Arizona, 520 U.S. 43 (1997): § 2403(b) allows state intervention in constitutional challenges to state statutes and makes intervening states liable “as to court costs.” Arizonans notes intervening states are not liable for damages, but subject to costs.
Hutto v. Finney, 437 U.S. 678 (1978), and Sullivan County v. Home Indemnity Co., 925 F.2d 152 (6th Cir. 1991): Establish that “court costs” may include § 1988 attorneys’ fees even against states, consistent with the historic treatment of costs irrespective of Eleventh Amendment immunity.
Independent Federation of Flight Attendants v. Zipes, 491 U.S. 754 (1989): Limitation on fee awards against “blameless” intervenors in Title VII absent frivolousness. The panel distinguishes Zipes: a state defending the constitutionality of its own statute is not “blameless” for purposes of fee shifting.
Circuit consensus distinguishing Zipes for culpable state intervenors: Jenkins ex rel. Agyei v. Missouri (8th Cir.), Brat v. Personhuballah (4th Cir.), and Planned Parenthood of Central N.J. v. Attorney General (3d Cir.)—each recognizes that a state defending an unconstitutional law is not sheltered by Zipes’s intervenor rule.
Webb v. Board of Education, 471 U.S. 234 (1985): Hours on unrelated matters are non-compensable—relevant to lodestar exclusions.
Avenue Grille, Inc. v. Rootstown Twp., 113 F.3d 1234, 1997 WL 219740 (6th Cir. 1997) (table): Guides apportionment among multiple liable parties based on relative culpability and which defendant drove the litigation effort.

Legal Reasoning

1) Entitlement and Michigan’s Liability for Fees

The court first confirms that Freed “prevailed” under Lackey’s standard because he obtained enduring, merits-based relief altering the legal relationship—judgment that retaining surplus proceeds violated the Takings Clause as applied to him. Gratiot County conceded fee liability; the fight centered on Michigan.

Michigan intervened solely under § 2403(b) to defend the GPTA’s constitutionality. By its terms, § 2403(b) makes intervening states “subject to all liabilities of a party as to court costs.” In § 1983 litigation, “court costs” include attorneys’ fees under § 1988(b). The court reasons that Congress deliberately classified § 1988 fees as “costs” to ensure awards against states notwithstanding sovereign immunity—an understanding reflected in Hutto and Home Indemnity. Arizonans confirms that § 2403(b) exposes intervening states to costs even if not to damages. Accordingly, sovereign immunity does not insulate Michigan from § 1988 fee liability.

On Zipes, the court declines to import the Title VII “frivolousness” condition for “blameless” intervenors. That principle protects parties who have not committed a legal wrong and simply seek to protect their interests. Here, however, the state is “responsible for enacting or enforcing the challenged statute,” and it intervened to uphold the scheme. This makes the state analogous to a traditional § 1983 defendant for fee-liability purposes. Sister circuits have taken the same view. Thus, Michigan may be assessed fees upon Freed’s success even though its position was not frivolous.

2) Lodestar Calculation—Required Specificity for Reductions

The panel acknowledges that district courts have latitude to use estimates and percentage reductions; they need not perform “green-eyeshade” line-item audits. But any reduction must be undergirded by a “reasonably specific” explanation applied to the case at hand:

Hours: The district court mentioned a few examples (e.g., 1.5 hours of travel for service; quarter-hour billing for one-sentence notices), and generically noted “defendants’ objections,” but did not identify how these examples, in scale or kind, justify a 35% reduction across 366 hours. The court should explain whether there was overstaffing, duplication, unrelated tasks, or other waste—and why specific categories of time were unreasonable to litigate this case successfully.
Rates: The court reduced the requested rates by 35% based on an asserted “reasonable” range of $350–$375, without making findings about prevailing market rates, awards in analogous civil-rights matters, supporting survey data, or drawing on its experience in comparable fee petitions. Those are not mandatory checkboxes, but some concrete market-anchoring analysis is required to explain a rate cut of that magnitude.

The panel further clarifies that, although Northcross disapproved “arbitrary or conclusory” reductions, subsequent Supreme Court cases (Fox, Perdue) relax the demand for atomized itemizations. The governing standard is not line-by-line detail but a clear, case-specific rationale that connects the dots from the record to the percentage cut.

3) Degree of Success, Intervening Precedent, and Johnson Factors

Freed partially prevailed: he succeeded on the surplus-proceeds takings theory but lost his broader “equity” valuation theory, and the treasurer was dismissed on qualified immunity. The district court alluded to “benefit” from Knick and Rafaeli in trimming fees. The Sixth Circuit instructs:

Degree of Success: It is a critical—but not dispositive—factor. Any reduction must be explained. If the court deems some work unreasonable due to limited success, it should identify the unsuccessful claims or theories and explain why the related hours were not reasonably expended to obtain the actual relief achieved.
Intervening Precedent: Knick and Rafaeli do not inherently warrant a haircut. Freed had already briefed his claims before those decisions; Knick eliminated only one of several jurisdictional obstacles, and Rafaeli required an additional federal constitutional step. If relied upon to reduce fees, the court must link these cases to specific reductions in necessary attorney work on this record and timeline.
Johnson Factors: They may be consulted to adjust the lodestar but cannot replace the lodestar analysis. If used, the court should say how and why they alter the outcome here.

Finally, the panel rejects the County’s proportionality argument under City of Riverside: § 1983 fee awards need not bear a mathematical relationship to the damages recovered.

4) Apportionment Between County and State

The Sixth Circuit does not disturb the district court’s 95% (County) / 5% (State) allocation, but if the district court revisits apportionment on remand, it should explain any allocation with reference to:

Relative culpability of each defendant,
Which party’s conduct and defenses drove the litigation effort, and
Which party necessitated a larger portion of plaintiff’s attorney time.

Impact

A. State Intervention Strategy in Constitutional Litigation

This decision significantly recalibrates fee exposure for states that intervene under § 2403(b) to defend statutes in § 1983 cases within the Sixth Circuit. The state is liable for § 1988 fees upon the plaintiff’s success—without a Zipes frivolousness safe harbor. Expect:

More careful vetting of intervention decisions, especially where a local government is already a defendant and the state’s defense is duplicative.
Earlier concessions or legislative fixes (or consent decrees) when constitutionality is doubtful, to limit fee accrual.
Greater attention to apportionment arguments and to limiting the incremental work caused by state participation.

B. Fee Litigation in the Sixth Circuit

District courts retain flexibility but should expect closer appellate scrutiny of across-the-board reductions. Concrete, case-specific explanations grounded in the record (billing practices, duplication, unrelated work, market-rate evidence) will be required to sustain percentage cuts to hours and rates. Parties should:

Support rates with current market data (state bar surveys, affidavits, comparable awards) and case complexity/result evidence.
Anticipate that quarter-hour billing for short tasks, administrative time, and excessive travel entries will be scrutinized.
Segregate time on unsuccessful or unrelated claims where possible to preserve lodestar integrity and limit reductions.
Be prepared to explain why intervening precedent did—or did not—materially reduce necessary work.

C. Governmental Defendants in “Home Equity Theft” and Beyond

Although this appeal is about fees, it sits atop the Sixth Circuit’s earlier merits ruling (Freed II) that the federal Takings Clause requires return of surplus proceeds. Municipalities defending takings claims post-Rafaeli should anticipate fee exposure even when damages are modest relative to fees. The ruling’s state-intervenor holding applies broadly to any § 1983 challenge to a state statute, not just tax foreclosure.

Complex Concepts Simplified

Prevailing Party: You “prevail” when a court grants relief on the merits that changes the legal relationship between you and the defendant in a lasting way (e.g., a judgment requiring payment or a permanent injunction).
Lodestar Method: Start with hours reasonably expended × reasonable hourly rate. This “lodestar” is presumed reasonable; it can be adjusted up or down based on factors like the success obtained. Courts can use percentage reductions but must explain why.
Degree of Success: If a plaintiff wins only some issues or obtains less relief than sought, fees may be reduced. But courts must connect the reduction to specific unsuccessful work or overreaching.
§ 2403(b) State Intervention: A statute that lets a state join cases where its statute’s constitutionality is challenged. By intervening, the state becomes liable for “court costs.” In § 1983 cases, those “costs” include attorneys’ fees.
Sovereign Immunity vs. Costs: States are typically immune from damages in § 1983 suits, but they can still be ordered to pay “costs,” and Congress has treated § 1988 attorney’s fees as “costs” for this purpose.
Zipes Rule for Intervenors: In Title VII, fees against a losing intervenor are allowed only if the intervenor’s position was frivolous, but that protection is for “blameless” intervenors. A state defending the constitutionality of its own law is not “blameless,” so Zipes does not apply.
Proportionality: In civil-rights cases, attorney’s fees need not be proportional to the damages won. The aim is to encourage enforcement of civil rights even when monetary recovery is modest.

Conclusion

The Sixth Circuit’s decision in Freed establishes two important principles. First, a state that intervenes under § 2403(b) to defend a statute’s constitutionality stands in the shoes of a traditional defendant for fee purposes and can be held liable for § 1988 attorneys’ fees—without any Zipes “frivolousness” limitation—when the challenger prevails. Sovereign immunity does not bar such fee awards because Congress classifies § 1988 fees as “costs,” and § 2403(b) expressly subjects intervening states to cost liability.

Second, district courts must give a reasonably specific, case-tethered explanation for lodestar reductions to hours and rates. While courts are not required to itemize every deduction, generalized references to overbilling or to the existence of helpful precedent are inadequate; reductions must be anchored in record-based reasons and the actual litigation history, including a clear account of how partial success affects what time was reasonably necessary.

On remand, the district court must recalculate with that explanatory rigor. More broadly, the decision will shape state intervention strategies and guide fee litigation across the Sixth Circuit, ensuring that fee awards in civil-rights cases remain both reasonable and transparent—faithful to the lodestar method and to Congress’s choice to enable private enforcement of constitutional rights through fee shifting.