Hughes v. Repko
| Decision Date | 12 May 1978 |
| Docket Number | No. 77-1727,77-1728,No. 77-1728,Nos. 77-1727,77-1727,s. 77-1727 |
| Citation | 578 F.2d 483 |
| Parties | John W. HUGHES and Cynthia P. Hughes, his wife v. John S. REPKO and Mrs. John S. Repko, his wife, Appellants inAppeal of John W. HUGHES, Cynthia P. Hughes and their attorney, Jay Feldstein, in |
| Court | U.S. Court of Appeals — Third Circuit |
Michael P. Malakoff, Berger, Kapetan & Malakoff, Pittsburgh, Pa., for appellants in No. 77-1727 and cross-appellees in No. 77-1728.
Joseph A. Del Sole, Girman & Del Sole, Pittsburgh, Pa., for appellees in No. 77-1727 and cross-appellants in No. 77-1728.
Before SEITZ, Chief Judge, and ROSENN and GARTH, Circuit Judges.
Plaintiffs, husband and wife, 1 appeal from an order of the district court awarding them attorney's fees after they obtained a jury verdict against one of two defendants, Mrs. Repko, in their action under the Civil Rights Act of 1866, 42 U.S.C. § 1982 (1970). The other defendant below, John S. Repko, appeals 2 the denial of his application for an attorney's fee as a prevailing party.
Plaintiffs, black citizens, instituted this action for damages against the defendants, white citizens, alleging that the defendants refused to rent them an apartment owned by Mrs. Repko because they were black. Plaintiffs asserted two claims against each of the two defendants: one claim alleging discrimination in violation of 42 U.S.C. § 1982 (1970), and the other claim alleging a conspiracy in violation of 42 U.S.C. § 1985 (1970). At the close of plaintiffs' evidence the district court directed a verdict in favor of both defendants on plaintiffs' § 1985 conspiracy claim. It also directed a verdict for defendant, John Repko, on the § 1982 claim. The court allowed the § 1982 claim against defendant, Mrs. Repko, to go to the jury, and the jury found for plaintiffs on that claim. The jury awarded plaintiffs compensatory damages against defendant, Mrs. Repko, in the amount of $1,250, but awarded no punitive damages. No appeal was taken on the liability determinations. We therefore are concerned solely with the court's rulings on the applications for attorney's fees.
At the time he was retained, plaintiffs' counsel agreed with his clients that his fee would be limited to any amount awarded by the court. Plaintiffs' counsel applied for a fee of $3,850 based on 55 hours of legal service at $70 per hour. 3 The number of hours spent and the hourly rate appear to have been found reasonable by the district court and are not challenged, as such, on appeal.
The district court awarded the fee in accordance with the Civil Rights Attorney's Fees Awards Act of 1976. That Act reads, in pertinent part:
In any action or proceeding to enforce a provision of (42 U.S.C. § 1982) . . . 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.
In determining plaintiffs' legal fee under the Awards Act the district court purported to follow the principles announced in Lindy Brothers Builders, Inc. of Philadelphia v. American Radiator & Standard Sanitary Corp., 540 F.2d 102 (3rd Cir. 1976) (in banc) (Lindy II ), and Merola v. Atlantic Richfield Co., 515 F.2d 165 (3rd Cir. 1975) (Merola II ). The court decided that the amount of the so-called lodestar (hours of service times hourly rate), "should be proportionate to the extent the plaintiffs prevailed in the suit." Hughes v. Repko, 429 F.Supp. 928, 932 (W.D.Pa.1977). It found that defendants prevailed on over two-thirds of the legal issues involved and proceeded to reduce the lodestar by about two-thirds to a net of $1,275.
The court also considered other factors which it felt should affect the lodestar, i. e Based on its consideration of the foregoing factors, the district court concluded that the reduced lodestar should be reduced further. It awarded plaintiffs' counsel a fee of $700.
the quality of counsel's work and the contingency of success. It found the quality of the work to have been "good" but the case a "simple" one. It decided that the "contingency factor" was largely absent because plaintiffs' counsel showed his confidence of success by not entering into a contingent fee contract with his clients. Finally, the district court felt that plaintiffs' ability to pay their counsel was a factor to be considered in reducing the lodestar. The court so held because Congress had mandated recognition of that factor under the Fair Housing Act of 1968, 42 U.S.C. § 3601 et seq. (1970), 5 an act the court said provided a remedy similar to that accorded by § 1982.
Since plaintiffs attack the legal bases for the district court's determination, we are called upon to determine the legal correctness of the district court's rulings. This is so even though we review under an abuse of discretion standard.
We agree with the district court that the "lodestar" approach of Lindy II is a proper first step in calculating reasonable attorney's fees under the Act. Since plaintiffs here seek only the amount of the lodestar as a reasonable fee, we begin by analyzing the proper method by which to calculate the lodestar in such circumstances.
The first important question presented is what services are to be recognized in calculating the lodestar to be used in arriving at allowable compensation.
The district court stated that the plaintiffs prevailed on the discrimination claim against Mrs. Repko but lost on their conspiracy claim, on their § 1982 claim against Mr. Repko, on their claim for punitive damages against Mrs. Repko, and on their contention that the attorney's fee issue was for the jury. The court decided that since defendants prevailed on more than two-thirds of the issues litigated, the lodestar should be reduced by two-thirds.
Plaintiffs contend that the district court erred in reducing the basic lodestar without making a finding as to the time spent on the claims on which they prevailed. They also argue that the district court erred in failing to find whether any of the time spent on the claims on which plaintiffs did not prevail contributed to their success in obtaining the verdict. Defendant, Mrs. Repko, says the district court did not commit error.
We think experience in litigation teaches that there is no necessary percentage relationship between the number of claims and contentions presented in a lawsuit and the lawyer time spent on each. Consequently, the approach adopted by the district court does not have a rational basis to commend it. We therefore conclude that the district court's automatic reduction of the two-thirds of the lodestar on the basis of its reasoning was legally impermissible. What is the proper approach to the resolution of this most difficult issue?
The Civil Rights Attorney's Fees Awards Act of 1976 provides that "the court, in its discretion, may allow the prevailing party . . . a reasonable attorney's fee." As in cases assessing other court costs, it is not always easy to determine who is the "prevailing party," particularly where there are multiple claims and/or multiple parties, and where the petitioning party is not completely successful.
In order to apply the "prevailing party" language of the statute fairly, we think district courts should analyze the results obtained by the petitioning party on particular claims, regardless of the number of parties. Thus, in the context of an award sought after the entry of a final It is clear to us that the fee-petitioner cannot be treated as the prevailing party to the extent he has been unsuccessful in asserting a claim. This rule, of course, would be applicable regardless of the number of parties. Any other interpretation would run counter to the spirit of the Awards Act provision that attorney's fees should be awarded to the "prevailing" party.
order, 6 a prevailing party on a particular claim is one who fairly can be found by the district court to have essentially succeeded on such claim, as "claim" is used in Fed.R.Civ.P. 10(b). We say "essentially succeeded" because in many cases a party may prevail on his basic claim but not on all aspects thereof. Given the spirit and purpose of the statute, we think our test allows the district courts to meet their obligations under the Act. Thus, we believe that plaintiffs here essentially prevailed on their § 1982 claim against Mrs. Repko, even though they were denied punitive damages and even though their request that the attorney's fee question be decided by the jury was rejected. The application of the "essentially successful" standard normally is left, of course, to the sound exercise of discretion by the district court in the first instance.
Thus, in calculating the lodestar in connection with the successful claims, the district court should give the petitioner credit only for the hours of legal service reasonably supportive of such claims. In evaluating what hours are reasonably supportive, we believe Lindy II and Merola II require the district court to determine not only the number of hours actually devoted to the successful claims, but also whether it was reasonably necessary to spend that number of hours in order to perform the legal services for which compensation is sought. The burden of persuasion must rest on the petitioner to demonstrate to the court the number of hours attributable to the successful claim, and also to demonstrate that the number of hours so attributable was reasonably necessary to perform the work at issue.
Implicit in our analysis is the recognition that legal services fairly devoted to successful claims are compensable even though those very same legal services also supported the prosecution of the unsuccessful claims. In this case, for example, many of the same legal services required to prosecute the several claims against the two defendants might have...
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...II". The purpose of the contingency factors is to increase the overall fee award to compensate for the risks involved. Hughes v. Repko, 578 F.2d 483, 488 (3d Cir.1978). With respect to the burdens in this case, the legal issues were fairly straightforward and based on well established princ......
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...Act track the language of the Civil Rights Attorney's Fee Awards Act.29 The Court of Appeals for the Third Circuit in Hughes v. Repko, 578 F.2d 483 (C.A.3, 1978) laid down the basic rules for determining a "prevailing party." It In order to apply the "prevailing party" language of the statu......
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