Lanni v. State of NJ.

• Decision Date: 05 June 2001
• Docket Number: No. 00-1945,00-5020,00-1945
• Citation: 259 F.3d 146
• Parties: (3rd Cir. 2001) PHILIP J. LANNI, APPELLANT v. STATE OF NEW JERSEY; DEPARTMENT OF ENVIRONMENTAL PROTECTION; ROBERT C. SCHINN; MICHAEL BOYLE; MARTIN MORALES; BRIAN HERRIGHTY; JOHN HEDDEN; MARK DOBLEBOWER; GREGORY HOLJAK; ROBERT WINKEL; CAROL LAKE, INDIVIDUALLY AND IN THEIR OFFICIAL CAPACITIES, JOINTLY AND SEVERALLY
• Court: U.S. Court of Appeals — Third Circuit

Page 146

259 F.3d 146 (3rd Cir. 2001)

PHILIP J. LANNI, APPELLANT v. STATE OF NEW JERSEY; DEPARTMENT OF ENVIRONMENTAL PROTECTION; ROBERT C. SCHINN; MICHAEL BOYLE; MARTIN MORALES; BRIAN HERRIGHTY; JOHN HEDDEN; MARK DOBLEBOWER; GREGORY HOLJAK; ROBERT WINKEL; CAROL LAKE, INDIVIDUALLY AND IN THEIR OFFICIAL CAPACITIES, JOINTLY AND SEVERALLY.

No. 00-1945, 00-5020

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued February 5, 2001

Filed June 5, 2001

On Appeal From the United States District Court For the District of New Jersey (D.C. Civil Action No. 96-CV-03116) District Judge: Honorable Anne E. Thompson

Linda Wong Daniel C. Fleming (Argued) Wong & Fleming 2035 Lincoln Highway, Suite 1050 P.O. Box 985 Edison, NJ 08818 Attorneys for Appellant

Allison E. Accurso (Argued) Mary C. Jacobson Steven L. Scher, Barbara Berreski Office of Attorney General of New Jersey Richard J. Hughes Justice Complex Trenton, NJ 08625 Attorneys for Appellees

Before: Becker, Chief Judge, Ambro and Stapleton, Circuit Judges

OPINON OF THE COURT

Stapleton, Circuit Judge

This appeal involves a dispute over attorney's fees awarded in a suit brought under the Americans with Disabilities Act ("ADA") and the New Jersey Law Against Discrimination ("LAD"). Phillip Lanni prevailed below, but argues on appeal that the District Court erred in its calculation of his attorney's fees. Lanni also takes issue with the District Court's order quashing a writ of execution against the State of New Jersey.

I.

Phillip Lanni has a number of learning disabilities that inhibit his ability to solve problems and to process and understand spoken and written language. Lanni was employed, beginning in October of 1990, by the New Jersey Department of Environmental Protection ("the DEP"). Beginning in 1991, Lanni worked as a radio dispatcher at the DEP. Lanni claims that, during his employment in this capacity, supervisors and co-employees made him the butt of jokes, verbally abused him, and mistreated him because of his disabilities.

In 1995, Lanni signed a contract with Linda Wong of the law firm Wong Fleming, P.C., procuring her representation in an action against the DEP. Lanni agreed that, if he entered into litigation, he would maintain a "partial contingency fee arrangement" with Wong Fleming under which he would pay "the greater of: (1) $125 dollars multiplied by the amount of hours expended on [the] case, (2) a fee awarded by a Court, or (3) a contingency fee including any attorneys fees already paid." The agreement also provided that, in the alternative, Lanni had the right to pay Wong Fleming "the reasonable value of [its] services" which it placed at "an hourly rate of $175 per hour" for the services of Linda Wong and "an equal or lower billable rate" for the services of the other members and employees of the firm.

In 1996, Wong Fleming represented Lanni by filing a ten-count complaint against the DEP and nine defendants employed there. The complaint alleged disability discrimination, a hostile workplace, a failure to accommodate, retaliation, and various other claims under the ADA, the LAD, the Conscientious Employee Protection Act, and the New Jersey Tort Claims Act. In October, 1997, the District Court dismissed the majority of these claims on summary judgment, leaving only one count against three individual defendants and the DEP.

The case was tried during the months of December, 1998, and January, 1999 by Ms. Wong and Daniel Fleming, the named partners of Wong Fleming. After nineteen days of testimony, the jury returned a verdict finding violations of the ADA and LAD by two defendants and the DEP and finding no liability on the part of the third individual defendant. Lanni was awarded $70,930.00 in economic damages and $156,100.00 in non-economic damages. No punitive damages were assessed.

Pursuant to the ADA and the LAD, Lanni was permitted to recover reasonable attorney's fees as a result of prevailing in his law suit. Six months after the verdict, Lanni filed an application that claimed his lawyers were entitled to $1,165,444.88 in attorney's fees and $49,412.75 in costs, for a total fee of $1,214,857.63. Six months later, following hearings and the submission of briefs on the issue of fees, the District Court awarded Lanni $277,723.50 in fees and $24,706.00 in costs. The correctness of the process by which the District Court calculated this award is the primary matter disputed.

II.

We review the District Court's decision to award attorney's fees under an abuse of discretion standard. See Silberman v. Bogle, 683 F.2d 62, 64-65 (3d Cir. 1982) ("We can find an abuse of discretion if no reasonable man would adopt the district court's view."). Whether the correct standards were applied by the District Court in determining the allowable fee is a question of law subject to plenary review. See Rode v. Dellarciprete, 892 F.2d 1177, 1182 (3d Cir. 1990). The District Court's factual findings will be disturbed only if they are clearly erroneous. Id. at 1182-83.

As the prevailing party on an ADA claim, Lanni is permitted to recover an award of attorney's fees. 42 U.S.C. S 12205 ("the court or agency, in its discretion, may allow the prevailing party [in a discrimination case] . . . a reasonable attorney's fee, including litigation expenses, and costs . . ."). The LAD has a similar provision. N.J.S.A. 10:5-27.¹ ("the prevailing party may be awarded a reasonable attorney's fee. . .").

The jury's damage award in this case was made under both the ADA and LAD. Accordingly, to the extent the applicable standards for an award of attorney's fees and costs differ under the two statutes and an appropriate award under one exceeds an appropriate award under the other, Lanni is entitled to elect to receive the higher award. As we discuss hereafter, an award under the LAD may reflect any risk of nonpayment of a fee assumed by counsel. An award under the ADA may not reflect that risk. In other respects, the ADA and LAD law applicable here does not materially differ.

Under both ADA and LAD law, a "lodestar" amount provides the starting point for determining reasonable attorney's fees. See Rode, 892 F.2d at 1183. The lodestar is obtained by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate. See id. A District Court has substantial discretion in determining what constitutes a reasonable rate and reasonable hours, but once the lodestar is determined, it is presumed to be the reasonable fee. See id. Following a determination of the lodestar, either party may seek adjustment. If that party meets the burden of proving that an adjustment is appropriate, the lodestar amount may be increased or reduced at the discretion of the District Court. See id.

Wong Fleming utilized an electronic billing system that tracked time spent by each employee of the firm to the tenth of an hour. Both Ms. Wong and Mr. Fleming alleged that they currently charge $325 an hour for their services. Wong Fleming asserted that its associates were due fees in the $180 an hour range (depending upon experience), while its paralegals and other firm staff were due payment at a lesser rate, but not below $70 an hour. Multiplying these rates by the hours recorded in their billing system, Wong Fleming calculated its lodestar. Wong Fleming then argued that a multiplier of 75% was warranted in this case due to the substantially contingent nature of the compensation structure and the legal risk associated with taking the case. In this way, Wong Fleming arrived at its total requested attorney's fees of $1,165,444.88. Costs and expenses were claimed at $49,412.75.

While accepting that Lanni, as a prevailing party, was entitled to his reasonable attorney's fees, the District Court did not accept Wong Fleming's calculations. Lanni raises five challenges to the District Court's decision regarding costs and fees.

A.

First, Lanni contends that the District Court erred in its determination of reasonable hourly market rates for Wong Fleming's services. The District Court rejected Wong Fleming's asserted rate of $325 an hour for Linda Wong and Daniel Fleming. The District Court instead concluded that the reasonable hourly rates of Wong and Fleming should be calculated on a graduated scale, varying according to the time period during which the services were performed.

The party seeking fees bears the burden of producing sufficient evidence of what constitutes a reasonable market rate for the essential character and complexity of the legal services rendered in order to make out a prima facie case. Smith v. Philadelphia Hous. Auth., 107 F.3d 223, 225 (3d Cir. 1997). If the prima facie case has been made, the opposing party bears the burden of producing record evidence that will contest this rate. Id. If reasonable market rates are in dispute, a hearing must be conducted. Id.

When attorney's fees are awarded, the current market rate must be used. See Rode, 892 F.2d at 1183; Rendine v. Pantzer, 661 A.2d 1202, 1127 (N.J. 1995). The current market rate is the rate at the time of the fee petition, not the rate at the time the services were performed. See Rode, 892 F.2d at 1188-89 (describing petition based on current rates as premised on a theory of "delay compensation") Rendine, 661 A.2d at 1127 (To take into account delay in payment, the hourly rate at which compensation is to be awarded should be based on current rates rather than those in effect when the services were performed.").

The District Court was apparently well aware of these rules, and stated that it was using a "current market rate" to determine the proper attorney's fees due to appellant. It then inexplicably calculated the fees on a graduated scale roughly tracking the actual historic rates of Linda Wong. 1 The District Court observed that the "method of applying current rates is flexible within the discretion of the Court" and then concluded that calculating rates on a graduated scale would be ...