Laudert v. Richland County Sheriff's Dept.

• Decision Date: 20 December 2001
• Docket Number: No. 01-115.,01-115.
• Citation: 2001 MT 287,307 Mont. 403,38 P.3d 790
• Parties: Michael LAUDERT, Petitioner and Respondent, v. RICHLAND COUNTY SHERIFF'S DEPARTMENT and Human Rights Commission of the State of Montana, Respondents and Appellants.
• Court: Montana Supreme Court

38 P.3d 790

2001 MT 287

307 Mont. 403

Michael LAUDERT, Petitioner and Respondent, v. RICHLAND COUNTY SHERIFF'S DEPARTMENT and Human Rights Commission of the State of Montana, Respondents and Appellants.

No. 01-115.

Supreme Court of Montana.

Submitted on Briefs July 12, 2001.

Decided December 20, 2001.

For Appellants: Kenneth D. Tolliver, Wright Tolliver Guthals, P.C., Billings, MT.

For Respondents: E. June Lord, Attorney at Law, Great Falls, Montana Barbara E. Bell, Bell & Marra, P.L.L.C., Great Falls, MT.

Justice TERRY N. TRIEWEILER delivered the Opinion of the Court.

¶ 1 The Respondent, Michael Laudert, as the prevailing party in a discrimination suit, petitioned the District Court for the First Judicial District in Lewis & Clark County to award attorney fees and costs from the Appellant, Richland County Sheriff's Department (RCSD). The District Court awarded attorney fees and costs in the full amount claimed. RCSD appeals the District Court's order awarding attorney fees. We affirm the order of the District Court.

¶ 2 The sole issue on appeal is whether the District Court erred when it awarded the full amount of attorney fees claimed by Laudert.

FACTUAL BACKGROUND

¶ 3 Because this is the second time we have considered this case on appeal, the following factual background relates only to the attorney fee dispute. A more detailed statement of the factual background can be found in Laudert v. Richland County Sheriff's Department, 2000 MT 218, 301 Mont. 114, 7 P.3d 386 (Laudert I).

¶ 4 In 1992, Laudert filed a discrimination complaint with the Montana Human Rights Commission in which he alleged that the RCSD considered his physical disability when it hired someone else for the county's deputy sheriff position.

¶ 5 The Hearing Examiner from the Human Rights Commission (HRC) found that RCSD had improperly considered Laudert's health condition during the interview, but found a sufficient non-discriminatory reason for RCSD's decision to hire another applicant. The Hearing Examiner determined that Laudert was not harmed as a result of the unlawful consideration of his disability and denied Laudert's claim for $196,000 in damages. However, RCSD was ordered to submit a written policy on hiring procedures, with specific guidelines for inquiry into applicant disabilities, and ordered to refrain from making pre-hire inquiries on health conditions unless the applicant voluntarily revealed the disability and RCSD was inquiring about the accommodation needs of the applicant should he or she be hired.

¶ 6 The Hearing Examiner's findings were upheld on appeal to the HRC. The HRC affirmed both the Hearing Examiner's finding of discrimination and his decision not to award damages.

¶ 7 Laudert filed a Petition for Judicial Review to the District Court, reasserting his monetary damage claim and seeking reasonable attorney fees pursuant to § 49-2-505(7), MCA. RCSD did not contest the order to submit a written policy before the District Court. Laudert's requests for damages and attorney fees were denied. On appeal to this Court, we reversed the denial of attorney fees, based on our determination that Laudert was the prevailing party even though he had not recovered damages. Laudert I, ¶ 57, 7 P.3d 386. We concluded that his victory was not purely "technical" or "de minimis," because the injunctive relief from RCSD provides the public with a measure of protection from future civil rights violations by RCSD, and the success of Laudert's action serves the broader public interest of eliminating discrimination in employment. Laudert I, ¶ 57, 7 P.3d 386.

¶ 8 We remanded to the District Court to determine a reasonable fee award pursuant to § 49-2-505(7), MCA. Laudert's attorneys sought recovery for every hour devoted to the case and expressed their inability to isolate that time related to the affirmative relief which the Hearings Examiner granted. RCSD challenged the recovery of attorney fees for unsuccessful claims and the failure of Laudert's attorneys to segregate the costs and fees attributable to the issues upon which Laudert prevailed. With the legal issues resolved in Laudert I, the HRC did not participate in the attorney fee dispute.

¶ 9 RCSD did not object to either the hourly rate charged by Laudert's attorneys or to any particular costs or time spent by counsel.

¶ 10 Following a hearing on November 8, 2000, the District Court awarded Laudert's counsel fees for all time expended, citing the testimony of Peter Michael Meloy that the fee was reasonable, this Court's determination in Laudert I that Laudert was the prevailing party for purposes of an attorney fee award, and this Court's analysis which formed the basis for that determination in Laudert I.

¶ 11 On January 5, 2001, RCSD appealed the District Court's decision.

STANDARD OF REVIEW

¶ 12 We review a district court's award of attorney fees under § 49-2-505(7), MCA, of the Montana Human Rights Act, to determine whether the court abused its discretion. Laudert I, ¶ 48, 7 P.3d 386. A district court abuses its discretion if its fee award is based on an inaccurate view of the law or a finding of fact is clearly erroneous. Ihler v. Chisholm, 2000 MT 37, ¶ 24, 298 Mont. 254, ¶ 24, 995 P.2d 439, ¶ 24.

DISCUSSION

¶ 13 Did the District Court err when it awarded the full amount of attorney fees claimed by Laudert?

¶ 14 The District Court awarded attorney fees to Laudert for the entire lodestar fee, which is arrived at by taking the number of hours reasonably expended and multiplying it by a reasonable hourly rate. The District Court cited a variety of factors for its decision. First, Laudert's expert witness, Peter Michael Meloy, a Helena attorney with extensive discrimination litigation experience, testified that lawyers and law firms do not ordinarily segregate issues for billing purposes, the fees itemized in this case were reasonable, and the focus of civil rights litigation should be the outcome of the entire case, not just issues on which the claimant prevailed. Second, the District Court interpreted our holding in Laudert I to mean that as a matter of law, Laudert was entitled to the full amount of attorney fees claimed as the prevailing party. The District Court concluded, based on this Court's analysis, that Laudert should be awarded attorney fees for the entire lawsuit, not just for certain issues.

¶ 15 RCSD contends that Laudert's counsel should not be entitled to recover at their normal hourly rate for all hours expended in the case because they did not prevail on every claim advanced, and, in fact, achieved only limited success in the case. Appellants claim the only issue on which Laudert prevailed was related to injunctive relief not specifically requested by Laudert, and that the relief was minor compared to the monetary damages requested. RCSD cites a line of United States Supreme Court authority for its ultimate contention that an attorney fee award must be proportionate to the degree of a claimant's success and adjusted downward for limited success.

¶ 16 The basis for attorney fees in the Montana Human Rights Act is § 49-2-505(7), MCA, which provides in part: "The court in its discretion may allow the prevailing party reasonable attorney fees." We must determine whether the District Court's award of fees was "reasonable" given the extent of Laudert's success as the prevailing party. Given its similarity to fee shifting provisions in federal civil rights statutes (most notably, the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988), it is helpful to examine pertinent federal case law before applying § 49-2-505(7), MCA.

¶ 17 From the outset, there is a strong presumption, given the rationale behind fee-shifting provisions, that the lodestar fee is a reasonable fee. Pennsylvania v. Delaware Valley Citizens' Council for Clean Air (1986), 478 U.S. 546, 565, 106 S.Ct. 3088, 3098, 92 L.Ed.2d 439. Fee-shifting statutes were not designed to be windfalls for attorneys or to replicate the amount a private attorney would receive in other types of litigation, but to enable private parties to retain the legal assistance necessary to seek redress when their rights are violated. Delaware Valley, 478 U.S. at 565,106 S.Ct. 3088.

¶ 18 On the issue of appropriately adjusting the lodestar fee, several United States Supreme Court decisions provide guidance. In Hensley v. Eckerhart (1983), 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40, the Court discussed whether a partially prevailing plaintiff may recover attorney fees for legal services provided in pursuit of unsuccessful claims. After determining the lodestar amount, Hensley established a two-step approach to address other considerations which may lead a district court to adjust a fee award upward or downward:

First, did the plaintiff fail to prevail on claims that were unrelated to the claims on which he succeeded? Second, did the plaintiff achieve a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award?

Hensley, 461 U.S. at 434, 103 S.Ct. 1933.

¶ 19 Pursuant to Hensley, a court must first determine whether fees were incurred for claims that were distinct or interrelated. Distinctly different claims for relief based on different facts and legal theories which are unsuccessful should be excluded from a reasonable fee calculation. Hensley, 461 U.S. at 434-35, 103 S.Ct. 1933. Unrelated claims should be treated as if they had been raised in separate lawsuits. Hensley, 461 U.S. at 435, 103 S.Ct. 1933. However, cases which present only a single claim (like most civil rights cases), involve a common core of facts or are based on related legal theories are not as easily separable. Hensley, 461 U.S. at 435, 103 S.Ct. 1933. In these situations, the district court should move to the second step and focus on the overall significance of the relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation. Hensley, 461 U.S....