532 U.S. 598 (2001)
The case of Buckhannon Board and Care Home, Inc. v.
Does the 'catalyst theory' allow a plaintiff to collect attorney's fees as a 'prevailing party' under federal fee-shifting statutes when there is no formal court judgment in their favor?
To be awarded attorney's fees as a 'prevailing party' under federal fee-shifting statutes, a party must achieve a material alteration of the legal relationship of the parties that is judicially sanctioned.
The Supreme Court held that the 'catalyst theory' is not a permissible basis for the award of attorney's fees under the Americans with Disabilities Act and similar statutes.
Buckhannon Board and Care Home, Inc. v. West Virginia Department of Health and Human Resources is pivotal because it clarifies the circumstances under which attorney's fees are awarded in civil rights cases. By requiring a judicially sanctioned change, the decision influences how lawyers advise clients on settlement strategies and impacts the leverage of plaintiffs in litigation. Moreover, it potentially escalates the financial risks for plaintiffs in public interest lawsuits, since they can no longer count on being deemed 'prevailing parties' based solely on voluntary compliance by defendants.