Ferland v. Concord Credit Corp.

• Decision Date: 05 April 2001
• Docket Number: No. 99-56625,99-56625
• Citation: 244 F.3d 1145
• Parties: (9th Cir. 2001) NANCY LEE FERLAND, Plaintiff-Appellant, v. CONRAD CREDIT CORP., a California corporation; GREGG A. MICHEL,PH.D., an individual; DOES 1-20, INCLUSIVE, Defendants-Appellees
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1145

244 F.3d 1145 (9th Cir. 2001)

NANCY LEE FERLAND, Plaintiff-Appellant, v. CONRAD CREDIT CORP., a California corporation; GREGG A. MICHEL,PH.D., an individual; DOES 1-20, INCLUSIVE, Defendants-Appellees.

No. 99-56625

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted January 9, 2001

Filed April 5, 2001

[Copyrighted Material Omitted] Deborah L. Raymond, Solana Beach, California, for the plaintiff-appellant.

Michael E. Ripley, San Diego, California, for the defendantappellee.

Appeal from the United States District Court for the Southern District of California Rudi M. Brewster, District Judge, Presiding. D.C. No. CV-97-01908-RMB/CGA

Before: Stephen S. Trott, Sidney R. Thomas and Marsha S. Berzon, Circuit Judges.

PER CURIAM:

Following her successful suit against the Conrad Credit Corp. ("CCC") for violations of the Fair Debt Collection Practices Act (the "Collection Act"), 15 U.S.C. S 1691 et seq., the district court granted Nancy Lee Ferland's request for attorneys' fees. In doing so, however, the court declined to grant fees for certain time Ferland's attorney submitted on the case and approved fees for less than half the remaining total number of hours the attorney actually expended. Ferland appeals the fee award. We find error in some of the district court's calculations, and conclude that its explanation for the very large cut in the number of hours compensated was not adequate. We therefore remand for correction of the calculation errors and for reconsideration of the across-the-board cut in the number of hours covered by the award.

I. Background

In October 1997, Ferland sued CCC and Dr. Gregg A. Michel for violations of the Collection Act. She alleged that CCC employees harassed her while attempting to collect a debt she had formerly owed Michel but had already paid in full. The court dismissed Ferland's claim against Michel on summary judgment. The case against CCC was tried to a jury.

Ferland prevailed at trial. The jury's award, however, fell short of what she had requested. The jury found in Ferland's favor on only four of eight counts, and rather than the $1000 in statutory damages and $65,000 in compensatory damages she had sought, it awarded $800 and $10,200 respectively.

After the verdict, Ferland filed a request for attorneys' fees. She sought compensation for 290 hours at a rate of $195 per hour -a total of $56,550.¹ The district court found this request unreasonably high and reduced Ferland's attorney's billing rate to $160 per hour, primarily on the basis that $160 per hour was the appropriate rate for an attorney of her experience level. The court also subtracted from the fee award time it believed was expended solely on the losing claim against Michel. Finally, the district court reduced the compensable hours by over half, to 120, because of the lack of complexity of the case and Ferland's attorney's inefficiency and inexperience, resulting in a total award of $19,200. Ferland now challenges the adequacy of the district court's award. Although not contesting the rate reduction, she challenges, on several grounds, the large reduction in compensable hours.

II. Analysis

We review the factual determinations underlying an award of attorneys' fees for clear error, Fischer v. SJB-P.D., Inc., 214 F.3d 1115, 1118 (9th Cir. 2000), and the legal premises a district court uses to determine an award de novo. Siegel v. Fed. Home Loan Mortgage Corp., 143 F.3d 525, 528 (9th Cir. 1998). If we conclude that the district court applied the proper legal principles and did not clearly err in any factual determination, then we review the award of attorneys' fees for an abuse of discretion. Id. As part of the abuse of discretion review, we consider whether the district court met its obligation "to articulate . . . the reasons for its findings regarding the propriety of the hours claimed or for any adjustments it makes either to the prevailing party's claimed hours or to the lodestar." Gates v. Deukmejian, 987 F.2d 1392, 1398 (9th Cir. 1992).

A. Time Attributed to the Michel Claim

Ferland asked to be reimbursed for 290 hours of attorney time. The district court reduced this figure to 261.² hours by eliminating time that it attributed to Ferland's failed claim against Michel.2 Ferland does not challenge the district court's authority to eliminate time spent on the claim against Michel, but does maintain that the district court clearly erred in some of its calculations regarding those claims. We agree.

First, the district court discounted time entries for preparation of a response to a Counter Motion for Summary Judgment on October 14, 17, 18 and 19, 1998. Because only CCC filed such a motion, the district court erred when it attributed part of that time to the claim against Michel and reduced the time by half. Second, the district court eliminated all hours Ferland's counsel spent preparing for and taking Michel's deposition. Since Michel was a witness in Ferland's case against CCC, the district court erred by not allowing attorneys' fees for at least some of that time.

We therefore remand this issue to the district court so that it may recalculate the hours attributable to Michel and CCC. See Hensley v. Eckerhart, 461 U.S. 424, 436-37 (1983).

B. Percentage Reduction

Much more consequential in terms of its potential impact on the total fee award is the controversy between the parties concerning the district court's determination that only 120 of the hours Ferland's attorney expended on the litigation should be compensated.³

The district court first found that Ferland's attorney lacked adequate experience to justify her requested hourly rate. It observed that "[a]n experienced attorney commands high hourly rates because he or she is efficient at performing the necessary tasks" (emphasis added), and accordingly reduced the hourly rate for Ferland's counsel from $195 to $160 per hour. This $160 rate was based in large part on the district court's objective analysis of the prevailing rates of similarlyexperienced attorneys in large California law firms. Ferland does not challenge the rate reduction.

The district court then considered whether to eliminate specific hours from Ferland's fee request as excessive, but decided not to do so, stating:

[T]he court is already reducing Plaintiff's hourly rate request in part because Ms. Raymond's inefficiency indicates such a reduction is appropriate. Therefore, the court will not eliminate specific hours from the fee request related to excessive hours.

To this point, the district court's reasoning was sound. When it finally computed the lodestar amount,⁴ however, the court reversed course and did reduce the attorney's hours -by more than half -because of "the relative lack of complexity of the case, the lack of jury trial experience of counsel, and because of counsel's inefficiency in prioritizing time." In so doing, the district court did not identify any particular excessive hours, nor did it explain in any other fashion how it decided how many hours to cut, or by what percentage to reduce the documented hours.

Ferland contends that the district court impermissibly "double-counted" her attorney's inefficiency, first by reducing her hourly rates on account of her inexperience, and then by reducing her hourly total for, partially, the same reason. Cunningham v. County of Los Angeles, 879 F.2d 481, 489 (9th Cir. 1988) (noting that in "ordinary cases .. . double counting is impermissible"). The district court's reductions, however, were not necessarily duplicative. The district court reduced the hourly rate awarded to Ferland's counsel because it found that she was inexperienced, but the court could alsoreasonably have decided that even taking into account her inexperience, some of her hours were excessive as compared to what one would expect of a similarly inexperienced attorney.

That is not, however, how the district court seems to have reached its result. Instead, after discounting the hourly rate, the court declined to eliminate particular excessive hours on account of the attorney's inefficiency, noting that the inefficiency was already adequately accounted for. Then, the district court went on nonetheless to grant a wholesale discount on the total number of hours when computing the lodestar figure. The district court did not explain the apparent internal contradiction in its reasoning. That omission in itself is sufficient to require a remand for a "concise but clear explanation of its reasons for the fee award." Hensley , 461 U.S. at 437 (emphasis added).

Quite aside from the apparent contradiction, the district court's method of reducing the hours for which fees are available is one that, under our cases, requires further explanation. The district court simply announced a bottom-line number of compensable hours, with no attempt to calibrate the number chosen to demonstrable inefficiency in carrying out particular tasks. We held in Gates v. Deukmejian that such a " `meat-axe approach' " to reducing fees is acceptable in some circumstances. Gates, 987 F.2d at 1399. The method is controversial, however, id., and does not discharge the district court from "its responsibility to set forth a `concise but clear' explanation of its reasons for choosing a given percentage reduction nor from its duty to independently review the applicant's fee request." Id. at 1400 (quoting Hensley, 422 U.S. at 437).

For example, in Gates, the defendants in a complex civil rights class action suit challenged the district court's acrossthe-board ten percent cut of an attorneys' fee award, contending that the reduction did not cut deep enough and that a more particularized review would have gone further. This court held that "decisions . . . employing percentages in cases involving large fee requests are subject to heightened scrutiny." Id.⁵ We then went on to vacate the district court's determination of the appropriate lodestar for...