Connolly v. National School Bus Service, Inc.
| Decision Date | 28 April 1999 |
| Docket Number | No. 98-1679,98-1679 |
| Citation | 177 F.3d 593 |
| Parties | 80 Fair Empl.Prac.Cas. (BNA) 92 Emma J. CONNOLLY, Plaintiff-Appellant, v. NATIONAL SCHOOL BUS SERVICE, INC., et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Ernest T. Rossiello (argued), Rossiello & Associates, Chicago, IL, for Plaintiff-Appellant.
Nancy G. Lischer, Timothy G. Shelton (argued), Hinshaw & Culbertson, Chicago, IL, for Defendants-Appellees.
Before CUMMINGS, BAUER and KANNE, Circuit Judges.
Emma Connolly left her job as a school bus driver for the National School Bus Service ("National") after allegedly suffering sexual harassment and then retaliation for complaining to National about the sexual harassment. Connolly brought suit against National and National's holding company under 42 U.S.C. §§ 2000e-2(a) and 2000e-3(a), asking for compensatory damages of $30,000 and $10,000 in punitive damages. The suit against National's holding company was dismissed with plaintiff's consent. On the eve of trial, National settled the claim for $10,000 and agreed to provide Connolly with a letter verifying her prior employment with National. In their settlement, the parties agreed to litigate the issue of plaintiff's attorneys' fees, the dispute over which leads to this appeal.
At the outset of her case, Connolly signed a modified contingent fee agreement with her attorneys, Ernest Rossiello & Associates, by which she agreed to pay a $7,500 flat fee regardless of the time spent on the case or any damages recovered. She also assigned Rossiello one-third of any eventual recovery (calculated on the basis of the settlement amount or jury award without subtracting costs or the $7,500 flat fee) as well as her statutory right to attorneys' fees. The contract did not allow for an offset of the $7,500 flat fee against the contingent fee recovery. After Connolly agreed to settle her claim for $10,000, she owed Rossiello $10,833 for a $10,000 recovery. Rossiello, however, has indicated that he required Connolly only to pay the $7,500 flat fee, waiving the one-third contingent fee recovery. Rossiello then petitioned the district court to award him $97,135.85 in statutory attorneys' fees and costs.
The principal lawyer on the case was not Rossiello, but Elena M. Dimopoulos, in her second year of practice in 1996 when the case began. Melinda H. Brom and Annice Kelly, fourth and fifth-year associates respectively, did a little work on the case. Rossiello's work consisted principally of supervising these associates. In his petition, Rossiello submitted the following costs and attorneys' fees:
Ernest T. Rossiello, 81.3 hours @ $320/hour = $26,016.00
Elena M. Dimopoulos, 261.8 hours @ $220/hour = $57,596.00
Melinda H. Brom, 8.10 hours @ $190/hour = $ 1,539.00
Annice Kelly, 1.6 hours @ $220/hour = $ 352.00
Paralegal Time, 47.25 hours @ $102.50/hour = $ 4,843.12
Expenses of Suit = $ 6,789.73
Total = $97,135.85
Section 2000e-5(k) provides that a district court "in its discretion, may allow the prevailing party ... a reasonable attorney's fee ... as part of the costs." We review a district court's award of attorneys' fees for an abuse of discretion. Evans v. Evanston, 941 F.2d 473, 476 (7th Cir.1991). This deferential standard of review "is appropriate in view of the district court's superior understanding of the litigation and the desirability of avoiding frequent appellate review of what essentially are factual matters." Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 76 L.Ed.2d 40.
A plaintiff who has settled a case is considered a prevailing party if she has achieved some success on the merits and can point to a resolution that has changed the legal relationship between herself and defendant. Farrar v. Hobby, 506 U.S. 103, 109-111, 113 S.Ct. 566, 121 L.Ed.2d 494; Hewitt v. Helms, 482 U.S. 755, 760-761, 107 S.Ct. 2672, 96 L.Ed.2d 654. A settling party may be considered a prevailing party because "one may prevail by persuading one's adversary to retire from the field." Stomper v. Amalgamated Transit Union 27 F.3d 316, 317 (7th Cir.1994). This Court has developed a two-part test for determining whether a plaintiff who settles is a prevailing party: "1) whether the lawsuit was causally linked to the relief obtained, and 2) whether the defendant acted gratuitously, that is, the lawsuit was frivolous, unreasonable or groundless." Fisher v. Kelly, 105 F.3d 350, 353 (7th Cir.1997). Over National's objections, the district court determined that Connolly was a prevailing party and that the relief she obtained was not de minimis. The district court accordingly found Connolly entitled to statutory attorneys' fees. On appeal, National does not renew its contention that Rossiello was not entitled to some statutory attorneys' fee award.
What does precipitate this appeal are Rossiello's objections to Judge Lindberg's calculation of reasonable attorneys' fees. As noted above, Rossiello claimed $97,135.85 for his work and that of his associates. Judge Lindberg began his calculation of reasonable attorneys' fees by calculating a lodestar figure equal to the number of hours Rossiello and his associates reasonably expended on the case multiplied by the market rate for the services each provided. In calculating the lodestar, Judge Lindberg excluded those hours Rossiello claimed which were either duplicative or not clearly related to Connolly's case. He then reduced the rates claimed by Rossiello and his associates, believing them to exceed the market rates for attorneys in the Chicago area of similar experience in employment discrimination cases. Judge Lindberg further cut this lodestar amount in half due to Connolly's limited success and then reduced this new sum by a third based on his view that Rossiello's dilatory litigation tactics had unduly prolonged the litigation. Judge Lindberg arrived at a fee award of $23,281.16. 992 F.Supp. 1032, 1040.
On appeal, Rossiello does not challenge the district court's minimal reductions in the hours worked by him and his associates. He does however take issue with the district court's reductions in the hourly rates he claimed for himself and his associates as well as the reductions for limited success and unduly prolonging the litigation.
Rossiello contends that the district court judge erred in not awarding him the "market rate" for his and his associates' services. We think this argument misunderstands the meaning of a market rate. Rossiello seems to believe our decisions requiring a district court to apply the "market rate" mean that a district court judge is bound to award him whatever billing rate appears in his books. While it is true that the attorney's actual billing rate for comparable work is presumptively appropriate to use as the market rate, Gusman v. Unisys Corp., 986 F.2d 1146, 1150 (7th Cir.1993), "if the court is unable to determine the attorney's true billing rate, however (because he maintains a contingent fee or public interest practice, for example), then the court should look to the next best evidence--the rate charged by lawyers in the community of 'reasonably comparable skill, experience, and reputation.' " People Who Care v. Rockford Bd. of Educ., 90 F.3d 1307, 1310 (7th Cir.1996) (quoting Blum v. Stenson, 465 U.S. 886, 895 n. 11, 104 S.Ct. 1541, 79 L.Ed.2d 891). In calculating the market rate, "the burden is on the fee applicant to produce satisfactory evidence--in addition to the attorney's own affidavits--that the requested rates are in line with those prevailing in the community." Blum, 465 U.S. at 896 n. 11. Once an attorney comes forward with such evidence, the burden shifts to the defendant to present evidence establishing " 'a good reason why a lower rate is essential.' " People Who Care, 90 F.3d at 1313 (quoting Gusman, 986 F.2d at 1151).
Rossiello submitted billing records and copies of cases in which other district courts had awarded him the rates he was requesting of Judge Lindberg. Judge Lindberg found that two of the cases Rossiello submitted provided little guidance because they contained no explanation of how the district court determined a market rate. In the third case submitted, Judge Lindberg noted that in making his award the district court judge had specifically relied on the fact that defendant's counsel had failed to provide any evidence in that case that plaintiff's counsel's rates exceeded the market rate. In marked contrast, National provided Judge Lindberg with multiple affidavits from other attorneys with experience similar to Rossiello's stating that Rossiello's rates for himself and his associates greatly exceeded the rates those attorneys would ordinarily charge in similar cases. We find no abuse of discretion in Judge Lindberg's awarding rates of $285/hour for Rossiello, $140/hour for Dimopoulos, $160/hour for Brom, and $175/hour for Kelly.
Rossiello disputes Judge Lindberg's reduction of fees for his "limited success." The Supreme Court has written that success is the most significant of the Hensley factors for a district court judge to consider in deciding what is a reasonable fee. Hensley, 461 U.S. at 436. Although success is the most significant of the Hensley factors, this Court has repeatedly rejected the contention that a district court should look to the percentage of the plaintiff's initial demand actually recovered through settlement or judgment and then mechanically reduce the attorney's fee award by a proportionate amount. Sheehan v. Donlen Corp., 173 F.3d 1039, ---- (7th Cir.1999); Alexander v. Gerhardt Enterprises, Inc., 40 F.3d 187, 194 (7th Cir.1994); Wallace v. Mulholland, 957 F.2d 333, 339 (7th Cir.1992). Nor has this Court ever held that an attorney's fee award is unreasonable simply because it exceeds by some multiple the amount recovered by the plaintiff,...
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