The Equal Access to Justice Act1 authorizes payment of attorney's fees to the prevailing party, other than the government, in a suit by or against the United States, unless the court finds that the position of the government was substantially justified. It is clear from interpretations of the "prevailing party" standard as it is used in other fee-shifting statutes2 that to qualify a party need not be a victor in a lawsuit that leads to a judgment on the merits. Northcross v. Board of Education of Memphis City Schools, 611 F.2d 624, 633 (6th Cir.1979), cert. denied, 447 U.S. 911, 100 S. Ct. 2999, 64 L. Ed. 2d 862 (1980). "Parties may be considered to have prevailed when they have vindicated important rights through a consent judgment or without formally obtaining relief." Id. at 633. Accord Nadeau v. Helgemoe, 581 F.2d 275, 279 (1st Cir.1978). The fact that a party prevails through a favorable settlement rather than through litigation does not "weaken" its claim to fees. Maher v. Gagne, 448 U.S. 122, 129, 100 S. Ct. 2570, 2574-2575, 65 L. Ed. 2d 653 (1980); Johnston v. Jago, 691 F.2d 283, 285 (6th Cir.1982). It is enough that the lawsuit acted as a "catalyst" in prompting defendants to take the desired action. Parham v. Southwestern Bell Telephone Co., 433 F.2d 421 (8th Cir.1970).

Although it is certain that a party to settled litigation may be a "prevailing party" for fee-shifting purposes, determining when such a party is in fact a "prevailing party" is not a simple inquiry. In Johnston, this circuit endorsed a two-part standard first propounded by the First Circuit in Nadeau for determining whether a party to settled litigation "prevailed." Under the Nadeau test, the court must first ask whether, as a matter of fact, the plaintiff's lawsuit was a necessary and important factor in achieving the relief desired. Id. 581 F.2d at 281; Johnston, 691 F.2d at 286. If it answers this first query affirmatively, the court must then determine whether the relief obtained resulted from a gratuitous act on the defendant's part or whether defendant's actions were mandated by law. When the plaintiff's case is "frivolous, unreasonable or groundless," id., any concessions the defendant may have made by way of settlement are considered gratuitous and attorney's fees are not awarded.

The Coalition's claim for fees falls on the first prong of the test. The district court found insufficient evidence of a causal connection between the suit and HUD's actions to support a determination that the Coalition had prevailed. The court stated:

From these records it is clear that HUD sought Euclid's compliance all along, although no doubt not as aggressively as the plaintiffs desired. Nonetheless, it is evident that HUD's goal and the plaintiff's goal were the same. Further, it is not clear from the documents that the plaintiffs' action in bringing suit was what finally forced HUD to take a more aggressive stance. Rather, the documents suggest that HUD cut off funds shortly before suit was initiated.

In sum, considering that nothing in the settlement agreement indicates that the plaintiffs have obtained any of the relief they sought from HUD, that there was no trial on the merits at which the facts were fully explored and determined, that the documents admitted reveal that HUD's goal and plaintiffs' were the same throughout but do not unambiguously indicate that plaintiffs' action in bringing suit prompted HUD to take a more aggressive stance, the Court concludes that plaintiffs are not a prevailing party against HUD.

Citizens Coalition, 537 F. Supp. at 425. Our review of the record convinces us that that determination is not clearly erroneous. Fed.R.Civ.P. 52(a).

The Coalition argues here that both the chronological sequence of events and the settlement agreement prove the catalytic effect of its efforts in compelling HUD to force Euclid's compliance. We do not agree. While chronological evidence is certainly a consideration in cases of this sort, see Nadeau, 581 F.2d at 281, it is not conclusive. In this case, HUD's efforts to compel compliance through warnings and demands of assurances predate the Coalition's active involvement. The record strongly suggests HUD's predisposition to achieve compliance despite the Coalition's activities. That the Department may have moved more slowly than the Coalition would have wished is beside the point. Whether the lawsuit hastened the process is, at best, uncertain, and certainly not so obvious as to render the decision of the district court clearly erroneous.

The Coalition also points to the Settlement Agreement as proof of causation. By its terms, the Agreement provides for nothing more than the Coalition's access to certain HUD files and other documents on a periodic basis. The Coalition singles out one paragraph, paragraph 5, as evidence of the causal connection between its efforts and HUD's actions. Paragraph 5 provides: "WHEREAS, since the aforesaid complaints were filed, substantial sums of money have been expended in the City of Euclid to promote fair housing...." "Since", however, is generally a word of temporal, rather than causal significance. The entire paragraph could plausibly be read as nothing more than an acknowledgement that, for whatever reasons, the motivation for originally filing the lawsuit no longer existed. From this one paragraph, therefore, it is not possible to conclude by a preponderance of the evidence that one party's actions compelled those of the other.

We note that the settlement agreement in this case is not like the consent decree in Maher v. Gagne. In that case, the decree itself provided for both the increased expense allowances sought by the plaintiffs under the Aid for Dependent Children program as well as the opportunity for AFDC beneficiaries to prove actual expenses exceeded the statutory standard allowance, both concessions central to plaintiffs' claims.

We conclude, therefore, that Judge Contie did not err in holding that there was insufficient evidence of a causal connection between the actions of the Coalition and those of HUD to find the Coalition a "prevailing party" for purposes of the Equal Access to Justice Act. Because we find that the Coalition did not prevail, it is unnecessary for us to consider whether the government's position was "substantially justified."

The decision of the district court denying attorney's fees is affirmed.