Opinion

JUSTICE O'CONNOR, with whom JUSTICE SCALIA joins, and with whom THE CHIEF JUSTICE joins in part, concurring in part and dissenting in part.

I agree with the Court that 42 U.S.C. § 1988 allows compensation for the work of paralegals and law clerks at market rates, and therefore join Parts I and III of its opinion. I do not join Part II, however, for in my view the Eleventh Amendment does not permit enhancement of attorney's fees assessed against a State as compensation for delay in payment.

The Eleventh Amendment does not, of course, provide a State with across-the-board immunity from all monetary relief. Relief that

serves directly to bring an end to a violation of federal law is not barred by the Eleventh Amendment, even though accompanied by a substantial ancillary effect

on a State's treasury. Papasan v. Allain, 478 U. S. 265, 478 U. S. 278 (1986). Thus, in Milliken v. Bradley, 433 U. S. 267, 433 U. S. 289 -290 (1977), the Court unanimously upheld a decision ordering a State to pay over $5 million to eliminate the effects of de jure segregation in certain school systems. On the other hand, "[r]elief that in essence serves to compensate a party injured in the past," such as relief "expressly denominated as damages," or "relief [that] is tantamount to an award of damages for a past violation of federal law, even though styled as something else," is prohibited by the Eleventh Amendment. Papasan, supra, at 478 U. S. 278. The crucial question in this case is whether that portion of respondents' attorney's fees based on current hourly rates is properly characterized as retroactive monetary relief.

In Library of Congress v. Shaw, 478 U. S. 310 (1986), the Court addressed whether the attorney's fees provision of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5(k), permits an award of attorney's fees against the United States to be enhanced in order to compensate for delay in payment. In relevant part, § 2000e-5(k) provides:

In any action or proceeding under this subchapter the court, in its discretion, may allow the prevailing party, other than the [Equal Employment Opportunity Commission (EEOC)] or the United States, a reasonable attorney's fees as part of the costs, and the [EEOC] and the United States shall be liable for costs the same as a private person.

The Court began its analysis in Shaw by holding that "interest is an element of damages separate from damages on the substantive claim." 478 U.S. at 478 U. S. 314 (citing C. McCormick, Law of Damages § 50, p. 205 (1935)). Given the "no-interest" rule of federal sovereign immunity, under which the United States is not liable for interest absent an express statutory waiver to the contrary, the Court was unwilling to conclude that, by equating the United States' liability to that of private persons in § 2000e-5(k), Congress had waived the United States' immunity from interest. 478 U.S. at 478 U. S. 314 -319. The fact that § 2000e-5(k) used the word "reasonable" to modify "attorney's fees" did not alter this result, for the Court explained that it had

consistently... refused to impute an intent to waive immunity from interest into the ambiguous use of a particular word or phrase in a statute.

Id. at 478 U. S. 320. The description of attorney's fees as costs in § 2000e-5(k) also did not mandate a contrary conclusion because "[p]rejudgment interest... is considered as damages, not a component of costs,'" and the "term `costs' has never been understood to include any interest component." Id. at 478 U. S. 321 (emphasis added) (citing 10 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure §§ 2664, 2666, 2670 (2d ed. 1983); 2 A. Sedgwick & G. Van Nest, Sedgwick on Damages 157-158 (7th ed. 1880)). Finally, the Court rejected the argument that the enhancement was proper because the "no-interest" rule did not prohibit compensation for delay in payment: "Interest and a delay factor share an identical function. They are designed to compensate for the belated receipt of money." 478 U.S. at 478 U. S. 322.

As the Court notes, ante at 491 U. S. 281, n. 3, the "no-interest" rule of federal sovereign immunity at issue in Shaw provided an "added gloss of strictness," 478 U.S. at 478 U. S. 318, and may have explained the result reached by the Court in that case, i.e., that § 2000e-5(k) did not waive the United States' immunity against awards of interest. But there is not so much as a hint anywhere in Shaw that the Court's discussions and definitions of interest and compensation for delay were dictated by, or limited to, the federal "no-interest" rule. As the quotations above illustrate, the Court's opinion in Shaw is filled with broad, unqualified language. The dissenters in Shaw did not disagree with the Court's sweeping characterization of interest and compensation for delay as damages. Rather, they argued only that § 2000e-5(k) had waived the immunity of the United States with respect to awards of interest. See id. at 478 U. S. 323 -327 (BRENNAN, J,, dissenting). I therefore emphatically disagree with the Court's statement that " Shaw... does not represent a general purpose definition of compensation for delay that governs here." Ante at 491 U. S. 281, n. 3.

Two general propositions that are relevant here emerge from Shaw. First, interest is considered damages, and not costs. Second, compensation for delay, which serves the same function as interest, is also the equivalent of damages. These two propositions make clear that enhancement for delay constitutes retroactive monetary relief barred by the Eleventh Amendment. Given my reading of Shaw, I do not think the Court's reliance on the cost rationale of § 1988 set forth in Hutto v. Finney, 437 U. S. 678 (1978), is persuasive. Because Shaw teaches that compensation for delay constitutes damages and cannot be considered costs, see 478 U.S. at 478 U. S. 321 -322, Hutto is not controlling. See Hutto, 437 U.S. 437 U. S. 697, n. 27 ("[W]e do not suggest that our analysis would be the same if Congress were to expand the concept of costs beyond the traditional category of litigation expenses"). Furthermore, Hutto does not mean that inclusion of attorney's fees as costs in a statute forecloses a challenge to the enhancement of fees as compensation for delay in payment. If it did, then Shaw would have been resolved differently, for § 2000e-5(k) lists attorney's fees as costs.

Even if I accepted the narrow interpretation of Shaw proffered by the Court, I would disagree with the result reached by the Court in Part II of its opinion. On its own terms, the Court's analysis fails. The Court suggests that the definitions of interest and compensation for delay set forth in Shaw would be triggered only by a rule of sovereign immunity barring awards of interest against the States:

Outside the context of the 'no-interest rule' of federal immunity, we see no reason why compensation for delay cannot be included within § 1988 attorney's fee awards.

Ante at 491 U. S. 281, n. 3. But the Court does not inquire about whether such a rule exists. In fact, there is a federal rule barring awards of interest against States. See Virginia v. West Virginia, 238 U. S. 202, 238 U. S. 234 (1915) ("Nor can it be deemed in derogation of the sovereignty of the State that she should be charged with interest if her agreement properly construed so provides") (emphasis added); United States v. North Carolina, 136 U. S. 211, 136 U. S. 221 (1890) ("general principle" is that "an obligation of the State to pay interest, whether as interest or as damages, on any debt overdue, cannot arise except by the consent and contract of the State, manifested by statute, or in a form authorized by statute") (emphasis added). The Court has recently held that the rule of immunity set forth in Virginia and North Carolina is inapplicable in situations where the State does not retain any immunity, see West Virginia v. United States, 479 U. S. 305, 479 U. S. 310 -312 (1987) (State can be held liable for interest to the United States, against whom it has no sovereign immunity), but the rule has not otherwise been limited, and there is no reason why it should not be relevant in the Eleventh Amendment context presented in this case.

As Virginia and North Carolina indicate, a State can waive its immunity against awards of interest. See also Clark v. Barnard, 108 U. S. 436, 108 U. S. 447 (1883). The Missouri courts have interpreted Mo.Rev.Stat. § 408.020 (1979 and Supp. 1989), providing for prejudgment interest on money that becomes due and payable, and § 408.040, providing for prejudgment interest on court judgments and orders, as making the State liable for interest. See Denton Construction Co. v. Missouri State Highway Comm'n, 454 S.W.2d 44, 59-60 (Mo. 1970) (§ 408.020); Steppelman v. State Highway Comm'n of Missouri, 650 S.W.2d 343, 345 (Mo.App. 1983) (§ 408.040). There can be no argument, however, that these Missouri statutes and cases allow interest to be awarded against the State here. A "State's waiver of sovereign immunity in its own courts is not a waiver of the Eleventh Amendment immunity in the federal courts." Pennhurst State School and Hospital v. Halderman, 465 U. S. 89, 465 U. S. 99, n. 9 (1984).

The fact that a State has immunity from awards of interest is not the end of the matter. In a case such as this one involving school desegregation, interest or compensation for delay (in the guise of current hourly rates) can theoretically be awarded against a State despite the Eleventh Amendment's bar against retroactive monetary liability. The Court has held that Congress can set aside the States' Eleventh Amendment immunity in order to enforce the provisions of the Fourteenth Amendment. See City of Rome v. United States, 446 U. S. 156, 446 U. S. 179 (1980); Fitzpatrick v. Bitzer, 427 U. S. 445, 427 U. S. 456 (1976). Congress must, however, be unequivocal in expressing its intent to abrogate that immunity. See generally Atascadero State Hospital v. Scanlon, 473 U. S. 234, 473 U. S. 243 (1985) ("Congress must express its intention to abrogate the Eleventh Amendment in unmistakable language in the statute itself ").

In Hutto, the Court was able to avoid deciding whether § 1988 met the "clear statement" rule only because attorney's fees (without any enhancement) are not considered retroactive in nature. See 437 U.S. at 437 U. S. 695 -697. The Court cannot do the same here, where the attorney's fees were enhanced to compensate for delay in payment. Cf. Osterneck v. Ernst & Whinney, 489 U. S. 169, 489 U. S. 175 (1989) ("[U]nlike attorney's fees, which at common law were regarded as an element of costs,... prejudgment interest traditionally has been considered part of the compensation due [the] plaintiff ").

In relevant part, § 1988 provides:

In any action or proceeding to enforce a provision of sections 1981, 1982, 1983, 1985, and 1986 of this title, title IX of Public Law 92-318, or title VI of the Civil Rights Act of 1964, the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs.

In my view, § 1988 does not meet the "clear statement" rule set forth in Atascadero. It does not mention damages, interest, compensation for delay, or current hourly rates. As one federal court has correctly noted,

Congress has not yet made any statement suggesting that a § 1988 attorney's fee award should include prejudgment interest.

Rogers v. Okin, 821 F.2d 22, 27 (CA1 1987). A comparison of the statute at issue in Shaw also indicates that § 1988, as currently written, is insufficient to allow attorney's fees assessed against a State to be enhanced to compensate for delay in payment. The language of § 1988 is undoubtedly less expansive than that of § 2000e-5(k), for § 1988 does not equate the liability of States with that of private persons. Since § 2000e-5(k) does not allow enhancement of an award of attorney's fees to compensate for delay, it is logical to conclude that § 1988, a more narrowly worded statute, likewise does not allow interest (through the use of current hourly rates) to be tacked on to an award of attorney's fees against a State,

Compensation for delay in payment was one of the reasons the District Court used current hourly rates in calculating respondents' attorney's fees. See App. to Pet. for Cert. A26-A27; 838 F.2d 260, 263, 265 (CA8 1988). I would reverse the award of attorney's fees to respondents and remand so that the fees can be calculated without taking compensation for delay into account.