Laffey v. Northwest Airlines, Inc.

Decision Date28 September 1984
CourtU.S. Court of Appeals — District of Columbia Circuit

Appeals from the United States District Court for the District of Columbia (Civil Action No. 70-02111).

Philip A. Lacovara, Washington, D.C., with whom William R. Stein, Washington, D.C., was on the brief for Northwest Airlines, Inc., appellant in Nos. 83-1838 and 83-1839 and for cross-appellee in No. 83-1896.

Rebecca L. Ross, Asst. U.S. Atty., Washington, D.C., with whom Joseph E. diGenova, U.S. Atty., Royce C. Lamberth and R. Craig Lawrence, Asst. U.S. Attys., Washington, D.C., were on the brief for United States, amici curiae in Nos. 83-1838, 83-1839 and 83-1896, urging reversal.

Daniel A. Rezneck, Washington, D.C., with whom Michael H. Gottesman and Robert M. Weinberg, Washington, D.C., were on the brief for Laffey, et al., appellees in Nos. 83-1838 and 83-1839 and for cross-appellants in No. 83-1896.

John H. Pickering, Washington, D.C., with whom Gary D. Wilson, Washington, D.C., Fred N. Fishman, New York City, Robert H. Kapp, William L. Robinson and Norman J. Chachkin, Washington, D.C., were on the brief for Lawyers' Committee for Civil Rights Under Law, amicus curiae in Nos. 83-1838, 83-1839 and 83-1896, urging affirmance.

Before WRIGHT, TAMM and WILKEY, Circuit Judges.

Opinion for the Court filed by Circuit Judge WILKEY.

Dissenting opinion filed by Circuit Judge J. SKELLY WRIGHT.

WILKEY, Circuit Judge:

Northwest Airlines, Inc., appeals from an award of $3,453,779.49 in attorneys fees and costs to counsel for plaintiffs. We find that the district court abused its discretion in calculating the fee award. Accordingly, we reverse and remand.

I. FACTS

This case involves a dispute over the amount of attorneys fees due the plaintiffs as prevailing party in a complex and long-standing employment discrimination suit. The suit on the merits began in 1970. Acting on behalf of more than 3,300 women employed by Northwest Airlines, Inc., the plaintiffs challenged various personnel management practices of Northwest under Title VII and the Equal Pay Act.

In 1973 the trial court essentially adopted the legal arguments urged by the plaintiffs, and issued an order in their favor. 1 In 1976 a panel of this court sustained the trial court's statutory interpretation, but remanded for reconsideration of the proper remedy. This court denied rehearing en banc in 1977, and in 1978 the Supreme Court declined to issue a writ of certiorari. Upon remand, the district court awarded $52 million in compensatory relief, as well as significant injunctive relief. 2 That ruling has been affirmed in principal part by another panel of this court. 3

Following the close of litigation on the merits, the fee application process began in earnest. In June of 1982 the district court ordered counsel to commence negotiations on the attorneys fees. 4 Bredhoff & Kaiser, the attorneys for the plaintiffs throughout the merits phase of this litigation, retained Daniel Rezneck of Arnold & Porter to negotiate and, if necessary, litigate the attorneys fee award. 5

In November 1982 the parties reported to the court that their negotiations had been fruitless. 6 Litigation over the size of the fees began. Pursuant to a timetable presented by the parties and approved by the trial court, the parties entered several months of simultaneous discovery. During this period the attorneys for the plaintiffs sought to discover the fees received by the counsel for the defense; the court refused to compel discovery of this information.

The plaintiffs subsequently requested just over $5 million to cover all attorneys fees and expenses from 15 July 1970 to 15 July 1983; the defendants proposed an award of just over $1 million. In reaching these rather divergent figures, both plaintiffs and defendants relied on the "lodestar" approach adopted by this Court in Copeland v. Marshall, 7 setting separate lodestar figures for the litigation on the merits and the litigation on the attorneys fees. 8 Both sides supplemented their proposals with copious appendices, exhibits, affidavits, charts, and summaries. 9

A. Proposed Fee for Litigating the Merits

Both plaintiffs and defendants substantially agreed on the number of hours "reasonably expended" in the litigation on the merits. The defendants raised two objections to the quantity of hours--a request for 160.5 hours logged by an attorney who was not a member of the firm but who did attend the trial and assist the Bredhoff & Kaiser attorneys, 10 and an objection to 254.25 attorney hours spent on allegedly non-compensable issues. 11 Both sides agreed to the validity of the remaining 10,929.50 hours expended on the merits.

The parties differed radically, however, on how the reasonable hourly rates should be set. The defendants proposed figures based on the hourly rates actually charged by Bredhoff & Kaiser attorneys in similar cases. The defendants then invited the court to examine whether certain work done by partners could have been done by associates or even paralegals, 12 and to compensate that work at lower rates if "partner-level" expertise had not been required. 13 The plaintiffs proposed rates intended to reflect a "prevailing community rate " 14--a rate, as it happened, substantially exceeding that ordinarily charged by Bredhoff & Kaiser attorneys. The plaintiffs substantiated the validity of this rate with voluminous affidavits from their own and other area attorneys.

The parties thus proposed significantly different lodestar figures for the merits. The plaintiffs sought a merits lodestar of $1,494,450.80. The defendants proposed a merits lodestar of $903,875.15. 15

The plaintiffs then proposed two separate 100 percent multipliers of the merits lodestar--one to account for the quality of the work performed, and another to account for the contingency of payment. 16 The defendants proposed no multiplier at all. 17 With these multipliers taken into account, the plaintiffs sought $4,483,352.40 as attorneys fees for the litigation on the merits.

B. Proposed Fee for Litigating the Attorneys Fees Award

The parties also differed radically on the proper award for litigating the attorneys fee issue. Laffey sought compensation for 2,579 hours spent by Bredhoff & Kaiser With the variation of hours and hourly rates taken into account, Laffey proposed a lodestar for attorneys fees of $358,375.02; Northwest proposed $64,311.39. 20

                and Arnold & Porter attorneys in compiling the fee award.  Northwest argued that only 930.25 attorney hours were compensable. 18   In objecting to the bulk of the hours sought by Laffey's attorneys, Northwest raised three objections:  (1) that needless hours were spent compiling affidavits, some of which detailed the history of the case for a trial judge who had presided over it from its inception, and others of which described the billing practices of other area attorneys;  (2) that needless hours were spent in interfirm meetings which would not have occurred had Bredhoff & Kaiser not retained Arnold & Porter;  and (3) that needless hours were spent seeking discovery of irrelevant facts. 19
                

C. Expenses

The parties also differed significantly on whether plaintiffs could be reimbursed for various expenses incurred in the litigation. Northwest first objected to many of the hours spent by paralegals and law clerks on the case. It then objected to compensating any out-of-pocket expenses in excess of those includable in taxable costs. Laffey sought a total of $256,650.14; Northwest offered slightly less than half of that, $127,959.23. 21

D. Proposed Total Fees

Laffey ultimately requested $5,098,377.56 in attorneys fees. This request reflected a lodestar of $1,494,450.80 on the merits, two 100 percent multipliers of that lodestar, an attorneys fee lodestar of $358,375.02, and expenses of $256,650.14. 22

Northwest proposed a total fee of $1,096,145.77. This reflected a lodestar on the merits of $903,875.15, no multipliers, an attorneys fee lodestar of $64,311.39, and costs of $127,959.23. 23

E. District Court Award

The district court awarded plaintiffs $3,469,829.49. This award reflected a lodestar of $1,471,241.25 on the merits, a doubling of that lodestar to account for the "risk premium," an attorneys fee lodestar of $294,324.99 and costs and expenses of $216,972.00. 24

The district court carefully scrutinized the number of hours claimed by Laffey. 25 With regard to the merits, the court rejected Northwest's claim that certain issues were non-compensable as "lost," but did exclude a portion of those hours as not being reasonably expended. 26 The court also allowed compensation for hours expended by a lawyer not affiliated with either of the firms representing Laffey, but at a reduced hourly rate. 27

The court found compensable the great majority of the 2,579 hours claimed for litigating the attorneys fee, but excluded 467.75 hours as being unreasonable or excessive. 28 The deductions made by the trial court reflected adjustments for preparation of excessive affidavits, redundant work caused by the introduction of a new law firm into the case, and other inefficient practices. It did not exclude the hours expended in offensive discovery, finding that the discovery requests, while ultimately unsuccessful, were "not frivolous, but were bona fide efforts to advance Plaintiffs' legitimate litigation interests." 29

In the award the district court rejected Northwest's claim that the plaintiffs' attorneys should be restricted to their own market rates, awarding them instead "prevailing market rates" based on a matrix drawn from the rates charged by other...

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