Cerajeski v. Greg Zoeller Attorney Gen. of Ind.

• Decision Date: 29 February 2016
• Docket Number: No. 1:11-cv-01705-JMS-DKL,1:11-cv-01705-JMS-DKL
• Parties: KATHERINE CERAJESKI, Guardian for Walter Cerajeski, Plaintiff, v. GREG ZOELLER Attorney General of the State of Indiana, KELLY MITCHELL Treasurer of the State of Indiana, Defendants.
• Court: U.S. District Court — Southern District of Indiana

KATHERINE CERAJESKI, Guardian for Walter Cerajeski, Plaintiff, v. GREG ZOELLER Attorney General of the State of Indiana,KELLY MITCHELL Treasurer of the State of Indiana, Defendants.

No. 1:11-cv-01705-JMS-DKL

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION

February 29, 2016

ORDER GRANTING IN PART PLAINTIFF'S MOTION FOR ATTORNEYS' FEES

Presently pending before the Court is Plaintiff Katherine Cerajeski's Supplemental Motion for Attorneys' Fees. [Filing No. 110.] Ms. Cerajeski requests attorneys' fees pursuant to 42 U.S.C. § 1988, and this request supplements her previously filed First Motion for Attorneys' Fees. [Filing No. 84.] State Defendants Greg Zoeller, Attorney General of the State of Indiana, and Kelly Mitchell, Treasurer of the State of Indiana (collectively, the "State") oppose Ms. Cerajeski's requests. [Filing No. 88; Filing No. 114.] For the reasons that follow, the Court grants in part Ms. Cerajeski's request for attorneys' fees.

I.GENERALLY APPLICABLE LAW

42 U.S.C. § 1988(b) provides, in relevant part, that "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." Typically the district court "is in the best position to make the 'contextual and fact-specific' assessment of what fees are reasonable."¹ Montanez v. Simon, 755 F.3d 547, 553 (7th Cir. 2014). Although the district court's discretion is not boundless, the United States Supreme Court "has said that there is hardly any 'sphere of judicial decisionmaking in which appellate micromanagement has less to recommend.'" Id. (quoting Fox v. Vice, 131 S.Ct. 2205, 2216 (2011)).

The Court "generally begins the fee calculation by computing a 'lodestar': the product of the hours reasonably expended on the case multiplied by a reasonable hourly rate." Montanez, 755 F.3d at 553. "Although the lodestar yields a presumptively reasonable fee," the Court may still adjust that fee based on factors not included in the computation. Id. (citing Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)). Ultimately, "the guiding inquiry is whether 'the plaintiff achieved a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award.'" Montanez, 755 F.3d at 553 (quoting Hensley, 461 U.S. at 434). In calculating the lodestar, the Court "need not, and indeed should not, become green-eyeshade accountants. The essential goal in shifting fees (to either party) is to do rough justice, not to achieve auditing perfection." Fox, 131 S. Ct. at 2216. Accordingly, the Court "may take into account their overall sense of a suit, and may use estimates in calculating and allocating an attorney's time." Id.

II.RELEVANT BACKGROUND

Addressing Ms. Cerajeski's fee request requires the Court to set forth an abbreviated history of this case. Ms. Cerajeski has pursued this action as the guardian of Walter Cerajeski, seeking relief from what the Seventh Circuit Court of Appeals agreed was an unconstitutionaltaking of the interest the State earned on $10.65 of Ms. Cerajeski's unclaimed property held by the State pursuant to the Indiana Unclaimed Property Act (the "UPA"). See Cerajeski v. Zoeller, 735 F.3d 577 (7th. Cir. 2013) ("Cerajeski I"). The Seventh Circuit ended Cerajeski I by holding that "plaintiff is entitled to just compensation from the state when she files her claim to Cerajeski's account, but the amount of that just compensation has yet to be determined. . . . The availability and propriety of injunctive relief are other issues to be resolved by the district judge in the first instance." Id. at 583.

On remand, Ms. Cerajeski initially sought leave to amend her complaint to revise certain legal claims and assert a class action. [Filing No. 60.] Ms. Cerajeski withdrew that request, however, after Indiana amended its UPA in response to Cerajeski I. [Filing No. 77 at 2.] Specifically, effective July 1, 2014, the UPA's definition of "interest bearing property" was modified and an owner making a claim under the UPA "is now entitled to 'interest that accrues on the property from the date of payment or delivery.'" [Filing No. 65 at 11 (quoting Ind. Code § 32-34-1-9.1 (2014) and Ind. Code § 32-34-1-30(a) (2014)).] The State moved to dismiss Ms. Cerajeski's action, contending that Indiana's amendment to the sections of the UPA at issue had mooted Ms. Cerajeski's claim. [Filing No. 65 at 11.] Ms. Cerajeski opposed that request, [Filing No. 77], but the Court agreed with the State after concluding that Ms. Cerajeski's claims were moot because she only sought prospective relief for the statutory provisions at issue and those provisions were no longer in effect, [Filing No. 82 at 8]. The Court disagreed with Ms. Cerajeski that dismissing her claim as moot would be tantamount to ignoring the Seventh Circuit's mandate because "the Seventh Circuit did not remand Ms. Cerajeski's case with an order for this Court to immediately enter judgment in her favor." [Filing No. 82 at 8-9 (quoting Cerajeski I, 735 F.3d at 583).]

Per Ms. Cerajeski's request, the Court set a briefing schedule on her request for attorneys' fees. [Filing No. 82 at 10.] Ms. Cerajeski's First Motion for Attorneys' Fees requested that the Court award $258,462.50 in fees for appellate counsel's work on Cerajeski I. [Filing No. 85 at 1.] Ms. Cerajeski did not seek any attorneys' fees for time spent litigating the case in the district court proceedings either preceding or following the appeal. [Filing No. 85 at 1.] Ms. Cerajeski asked to be compensated for 375.75 hours that her appellate counsel spent on Cerajeski I—specifically, 304.25 hours that attorney Terry Saunders spent at a rate of $700 per hour; 48.25 hours that attorney Arthur Susman spent at a rate of $750 per hour; and 23.25 hours of time that attorney Glenn Hara spent at a rate of $400 per hour. [Filing No. 85-2 at 6; Filing No. 85-2 at 15-21; Filing No. 85-3 at 15; Filing No. 85-3 at 17.] The State opposed Ms. Cerajeski's request, contending, among other things, that Ms. Cerajeski was not the prevailing party for purposes of 42 U.S.C. § 1988. [Filing No. 88 at 6-10.]

The Court denied Ms. Cerajeski's first attorneys' fees request. [Filing No. 90 at 8-12.] Although it recognized that "[i]t is beyond dispute that Ms. Cerajeski received a favorable decision from the Seventh Circuit Court of Appeals," the Court denied the attorneys' fee request because "[that] decision in Ms. Cerajeski's appeal was not sufficiently final to render her the prevailing party for purposes of 42 U.S.C. § 1988." [Filing No. 90 at 10-11.]

Ms. Cerajeski appealed the Court's denial of her attorneys' fee request, and the Seventh Circuit Court of Appeals reversed this Court's decision. See Cerajeski v. Zoeller, 794 F.3d 828 (7th Cir. 2015) ("Cerajeski II"). The Seventh Circuit concluded its decision as follows:

We therefore reverse the judgment of the district court and remand the case for a determination of the amount of attorneys' fees to which the plaintiff is entitled. We offer the tentative view that the amount sought—$258,462.50 for 375.75 hours—is excessive, both in the amount of time for which fees are sought and in the average hourly billing rate ($687.86). Remember that this was just time spent on the appeal (the first, not the present, appeal), and the high average billing rate implies that fewjunior members of the two law firms who handled the appeal for the plaintiff could have been assigned to work on the appeal. In fact it appears that law-firm partners billed more than 93 percent of the total hours billed.

The plaintiff asks us to determine the amount of attorneys' fees to which she is entitled, but we think it a task better left to the district court. District judges have more experience than appellate judges in determining reasonable awards of attorneys' fees.

Id. at 832.

On remand, the assigned magistrate judge held a settlement conference that did not resolve the case and set a briefing schedule for Ms. Cerajeski to supplement her attorneys' fee request. [Filing No. 109.] On November 20, 2015, Ms. Cerajeski filed a Supplemental Motion for Attorneys' Fees, asking the Court to award her $272,550. [Filing No. 110.] Ms. Cerajeski seeks fees for counsel's time spent working on the appeals for Cerajeski I and Cerajeski II, as well as for time spent working on the second remand. [Filing No. 110 at 1 (supplementing initial fee request at Filing No. 84).] The State opposes Ms. Cerajeski's request for attorneys' fees. [Filing No. 114.] After the motion was fully briefed, the Court ordered the State to file a notice setting forth the aggregate amount of interest paid by the State and the number of claims on which it was paid since the UPA was amended to provide for payment of interest on claimed property. [Filing No. 117 at 1.] The State subsequently filed a Notice stating that since July 1, 2014, the State has paid 5,780 claims with interest and the interest paid on those claims totals $24,400.71. [Filing No. 118.]

III.DISCUSSION

Ms. Cerajeski asks this Court to award her $272,550 in attorneys' fees as the prevailing party in this litigation. [Filing No. 110.] "[M]indful of the Seventh Circuit's 'tentative view' regarding the excessive nature of counsel's rates and time spent on Cerajeski I," Ms. Cerajeski'ssupplemental fee request "reduces the fee[s] requested in our initial petition for the first appeal and for this supplemental petition to 80 percent" of the hours worked and the hourly rate requested. [Filing No. 111 at 4.] As support for the reasonable nature of her request, Ms. Cerajeski submits a declaration from Loyola University Chicago School of Law Professor Barry Sullivan, [Filing No. 110-1], and also relies on the declaration of University of Texas School of Law Professor Charles Silver that she submitted with her initial fee request, [Filing No. 85-1].

In response, the State argues that this case is "the type of 'windfall to attorneys'...