Furtado v. Bishop

• Decision Date: 11 December 1980
• Docket Number: No. 80-1282,80-1282
• Citation: 635 F.2d 915
• Parties: John FURTADO et al., Plaintiffs, Appellants, v. Harold BISHOP et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

Page 915

635 F.2d 915

John FURTADO et al., Plaintiffs, Appellants, v. Harold BISHOP et al., Defendants, Appellees.

No. 80-1282.

United States Court of Appeals First Circuit.

Argued Sept. 8, 1980.

Decided Dec. 11, 1980.

Jonathan Shapiro, Boston, Mass., with whom Stern & Shapiro, Boston, Mass., was on brief, for plaintiffs, appellants.

Lee Carl Bromberg, Sp. Asst. Atty. Gen., Boston, Mass., with whom Francis X. Bellotti, Atty. Gen., and Bromberg, Sunstein & McGregor, Boston, Mass., were on brief, for defendants, appellees.

Before COFFIN, Chief Judge, WYZANSKI, Senior District Judge, ^* KEETON, District Judge. ^**

COFFIN, Chief Judge.

This is the second time that this suit for the award of attorneys' fees in a civil rights action has been before us. In our first review, we affirmed a jury award against prison officials stemming from their use of excessive force, false reporting, and suppression of communication against prisoners. Furtado v. Bishop, 604 F.2d 80 (1st Cir. 1979) ("Furtado I "). Among the issues that we considered was the district court's decision to calculate the amount of attorney's fee award under 42 U.S.C. § 1988 by dividing the plaintiffs' damage recovery by two. There we held that "(b)ecause the fifty percent of recovery formula ignores time and labor spent, as well as other factors, it cannot stand." Id. at 98. We remanded despite the trial court's alternative finding that counsel had spent $20,000 worth of work on the case "timewise" since summary announcement of this total gave no clue as to its supporting reasoning. We specifically requested the district court's views, taking into account the factors identified in King v. Greenblatt, 560 F.2d 1024 (1st Cir. 1977).

The district court, 84 F.R.D. 671, in a substantial opinion articulating its thought processes, arrived at the same result: an award of $13,750, being one half plaintiffs' recovery of $27,000. ¹ It began by commenting specifically on the dozen criteria that King identified, based on those originally set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). ² The court then considered the request of plaintiffs' counsel for $24,956 for work in the district court. After criticizing the "presumptively overlarge" month's time spent in commencing suit, and the presence of two lawyers at trial, the court allowed $3000 for services in 1970-1971 and $12,000 for services in 1977-1978. Considering counsel's service on appeal, as to which 200.8 hours were reported for three lawyers, the court felt that (absent any ceiling on total fees), $5000 for the brief and $1000 for preparation and oral argument was reasonable.

Although the reasonable rates for time reasonably spent at trial and on appeal, in the court's view, added up to $21,000, the court felt obliged to limit its total award to one half the $27,500 damages awarded by the jury. ³ Its careful explication may be summarized as follows. The court began by asking "whether there should be a ceiling on the fee in a suit such as this, brought for money damages, not to establish some principle or to serve as a public warning beyond the damages themselves." It noted that had this not been a civil rights case, the customary contingent fee understanding would be a fee of one third the recovery. Because counsel did considerable work and because a fee award of one half of what plaintiffs actually receive is in a sense one third of the "recovery", the court adopted its "one third rule". It justified this in part on the criticism that lawyers might attract were they to receive fees exceeding one half of their clients' receipts and in part on the thought that the fee must be appropriate to the case. ⁴ Moreover, presumptively, any services rendered in prosecuting a successful appeal would be included in the one third of total recovery.

In establishing its one third rule or fifty-percent-of-recovery ceiling as a rule of law, the district court recognized that the legislative history of section 1988 "indicates that Congress' concern was that persons whose civil rights had been violated might be deterred from suing by the high cost of representation. The fee award is to be 'what it costs them to vindicate these rights in court.' " (footnote omitted) (internal quotation from Sargeant v. Sharp, 579 F.2d 645, 648 (1st Cir. 1978), quoting S.Rep.No.94-1011, 94th Cong., 2d Sess. 2 (1976), reprinted in (1976) U.S.Code Cong. & Ad.News, pp. 5908, 5910). Nonetheless, the trial court did

"not read this language to mean that Congress intended that every person who could claim an invasion of civil rights, no matter how minor, would be entitled to retain counsel at the defendant's expense, no matter how great. There must be an element of reason; the fee must not be such as to encourage the overpressing of marginal claims, a by no means idle fear."

The district court established its fifty percent ceiling on fees to effectuate this "element of reason". The court recognized that the ceiling would not apply where damages were nominal, or if only injunctive relief was sought, or where a large recovery was out of proportion to work done, or if the appeal had been frivolous. Finally the court left open the possibility that in a case involving less work it "would consider one third to mean one third of the verdict, not one third of the verdict plus the fee."

I.

We can understand how the trial court's concern to assure a correspondence between the dollar recovery and attorney's fees in cases where damages are the sole remedy may have seemed a viable course. One of the twelve factors endorsed in King, supra, is "the amount involved and the results obtained." 560 F.2d at 1027. In the absence of countervailing considerations, this factor might be read as consistent with a formula that enforces the relationship between damage award and attorneys' fee recovery by means of a percentage ceiling. Compare Perez v. University of Puerto Rico, 600 F.2d 1, 2 (1st Cir. 1979) (permitting consideration of the fact that only nominal damages were awarded) with Copper Liquor, Inc. v. Adolph Coors Co., 624 F.2d 575, 583, 584 n. 16, No. 78-3209, slip op. at 8581-82 & n. 16 (5th Cir. 1980) (modest damage recovery "should not be ignored" but "should not control an attorneys' fee award"). But deciding that an attorneys' fee award is "excessive" by means of an automatic, controlling percentage comparison with the damages recovered is another way of stating that the damage recovery in that case is too small to support such a fee award. We believe that casting this relationship in terms of a percentage ceiling discounts one key object of the legislative intent behind § 1988: the goal of encouraging private enforcement of civil rights law. ⁵

Under the traditional "American rule", successful plaintiffs must bear the expenses of vindicating their rights. Alyeska Pipeline Service v. Wilderness Society, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975). Thus plaintiffs typically will not act to redress injuries unless the expected recovery exceeds the expected cost of so acting. ⁶ Legal services are very expensive. Difficult doctrinal questions can necessitate extensive analysis and research, while application of legal principles requires factual investigation and proof a process that can be very time consuming and hence costly even when the ruling law is settled and straightforward. Consequently it would not be sensible under the American rule to pursue suits involving real and reprehensible invasions of civil rights if they promise only modest recovery or a highly uncertain chance of substantial recovery. By amending section 1988, Congress chose in the case of certain important rights to alter this pattern of prohibitively costly vindication. Congress thus deliberately sought to provide for suits that would be unlikely to occur under the regime of the American rule. It therefore is precisely the civil rights lawsuits whose prospect of modest recovery would not justify the expense of a difficult or acrimonious legal fight the "marginal" suits, in the words of the district court-that Congress intended to make practicable. ⁷

The district court proposed the ceiling for cases "brought for money damages, not to establish some principle or to serve as a public warning beyond the damages themselves." This reading of section 1988 would finance cases that create but not cases that apply legal rules. But pathbreaking holdings that will not be enforced are of limited public value. And the "principle" of enforcement is served by suits that "merely" seek damages. See Knight v. Auciello, 453 F.2d 852, 853 (1st Cir. 1972) (per curiam). We therefore believe that the district court's proposal-even were it supported by the statute's intent-would be of questionable wisdom, as well as conceptually difficult to administer. Furthermore, as we have said in Perez v. University of Puerto Rico, supra, 600 F.2d at 2:

" '(I)n authorizing awards of attorneys' fees to plaintiffs in civil rights actions Congress was concerned with enforcement not only of the civil rights of the public at large and of identifiable groups but also with the rights of individual plaintiffs. Its goal was to remove financial impediments that might preclude or hinder "private citizens," collectively or individually, from being "able to assert their civil rights," Senate Report.... We therefore reject the view that, to be eligible for shifting of attorneys' fees, the civil rights plaintiff is obligated to show that his action resulted in direct benefits to others, rather than in benefits solely to himself.' "

Perez v. University of Puerto Rico, 600 F.2d 1, 2 (1st Cir. 1979) (quoting Zarcone v. Perry, 581 F.2d 1039, 1042 (2d Cir. 1978)). Cf. King v. Greenblatt, 560 F.2d 1024, 1026 (1st Cir. 1977) (rejecting by implication an argument that a smaller attorney's fees award was proper because the case was not "of truly exceptional public importance"); Gibbs v. Town of...