McKenzie v. Kennickell

• Decision Date: 18 April 1988
• Docket Number: Civ. A. No. 73-0974.
• Citation: 684 F. Supp. 1097
• Parties: Alfred McKENZIE, et al., Plaintiffs, v. Ralph KENNICKELL, Jr., Defendant.
• Court: U.S. District Court — District of Columbia

684 F. Supp. 1097

Alfred McKENZIE, et al., Plaintiffs, v. Ralph KENNICKELL, Jr., Defendant.

Civ. A. No. 73-0974.

United States District Court, District of Columbia.

April 18, 1988.

Roger E. Warin, Sharon L. Davis, Steptoe and Johnson, Washington, D.C., for plaintiffs.

Jeffrey Hunter Moon, Asst. U.S. Atty., Washington, D.C., for defendant.

MEMORANDUM OPINION

BARRINGTON D. PARKER, Senior District Judge:

After prevailing on the merits in this class action litigation brought by black employees at the Government Printing Office ("GPO"), their counsel now seek an enhancement to the lodestar award of attorneys fees and costs. Following months of negotiation and subsequent delays in processing the proposed settlement through the bureaucracy, a final stipulation was agreed upon and later approved by the Court on April 8, 1988. The parties agreed to a lodestar fee of $740,000 that covered the total fee claims of counsel for individual plaintiffs and counsel handling all fee claims, and the lodestar claims of class counsel.¹

Counsel for the class action plaintiffs contend, however, that the lodestar, alone, does not provide "reasonable" compensation for their efforts in this litigation because it fails to reflect both the risk of nonpayment and the quality of their representation. They contend that "reasonable" compensation should include a premium for these factors, and thus, they urge the Court to award them a fifty percent enhancement for the former and a twenty-five percent multiplier for the latter.²

This litigation was commenced in 1973, only one year after Congress had amended Title VII and extended relief to employees of the federal government. 42 U.S.C. § 2000e-16(d). During the early stages of the proceeding, plaintiffs' counsel ventured upon unchartered legal terrain and recently opened avenues of relief relating to racial discrimination in federal employment. With unusual skill and tenacity, plaintiffs' counsel helped shape the legal parameters of Title VII class action litigation. At the same time, they achieved for their clients and others, long-denied and long-overdue financial and equitable relief for black employees at the GPO. Plaintiffs' present motion seeking an enhancement to the lodestar fee award constitutes the final chapter in this protracted and hotly contested law suit.³

There is no dispute that plaintiffs' counsel deserve a reasonable fee award for their successful endeavors. The central question is what constitutes a reasonable fee. Specifically, the question now presented is whether the lodestar award, alone, affords adequate compensation to counsel for their services or should it be enhanced by a premium for risk of nonpayment and the quality of representation?

During the last term, our Supreme Court in Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, ___ U.S. ___, 107 S.Ct. 3078, 97 L.Ed.2d 585 (1987) ("Delaware Valley II") provided standards to be followed by federal courts in awarding contingency enhancements.⁴ Plaintiffs' counsel's present request for an enhancement covering the risk of nonpayment, is among the first calling for an interpretation and application of Delaware Valley II.⁵ Furthermore, their request for an enhancement because of the quality of representation comes in the wake of a recent ruling from this Circuit explicating the standards for such awards. Thompson v. Kennickell, 836 F.2d 616 (D.C.Cir.1988).

After carefully considering the points and authorities and other submissions of counsel in this proceeding, and with benefit of Delaware Valley II and subsequent decisions interpreting that ruling, this Court determines that plaintiffs have satisfied their evidentiary burdens. And for the reasons set forth below, plaintiffs' counsel are awarded an enhancement to the lodestar award covering both the risk of nonpayment and the quality of representation.

I. ENHANCEMENT FOR THE RISK OF NONPAYMENT

A. Legal Standard for Enhancement

Delaware Valley II establishes the controlling standard for awarding enhancements based on the contingency factor.⁶ In a plurality opinion, the Supreme Court concluded that risk multipliers are permissible under certain conditions and set forth two criteria necessary for awarding an enhancement. Justice O'Connor together with four dissenting justices, (Justices Blackmun, Brennan, Marshall and Stevens) agreed that "compensation for contingency must be based on the difference in market treatment of contingent fee cases as a class, rather than on an assessment of the `riskiness' of any particular case." Delaware Valley II, 107 S.Ct. at 3089 (O'Connor, J., concurring) (emphasis in original). A different majority (Chief Justice Rehnquist and Justices, White, Powell, Scalia and O'Connor) held that "no enhancement for risk is appropriate unless the applicant can establish that without an adjustment for risk the prevailing party `would have faced substantial difficulties in finding counsel in the local or other relevant market.'" Id. at 3091 (O'Connor, J. concurring, quoting Justice White).⁷

Our Circuit, in Kennickell, recently adopted Justice O'Connor's analysis and remanded for a determination whether "absent a contingency incentive, the prevailing party would have faced `substantial difficulty in finding counsel.'" Thompson v. Kennickell, 836 F.2d at 621.⁸

The parties agree that Justice O'Connor's analysis provides the framework for analyzing the propriety of awarding enhancements for contingency and they also agree on the general guidelines established by the justices. They concede that plaintiffs bear the burden of proving (1) that the relevant legal market treats contingency cases differently from non-contingency, and (2) that absent an enhancement, the plaintiffs would have faced substantial difficulty in securing counsel. But at that point, their agreement stops. Counsel for the parties present significant issues concerning the application of the various elements of the Court's plurality decision. Specifically, they disagree over the definition of the relevant class, the appropriate temporal focus for assessing the market treatment for contingency, the type of proof necessary for showing that absent a contingency, "the prevailing party would have faced substantial difficulty in finding counsel." Delaware Valley II, 107 S.Ct. at 3091, and whether different standards should exist for awarding enhancements to nonprofit as over against private law firms. The Court will address each of these disputes below.

1. Definition of the Relevant Class

Justice O'Connor directed that compensation for contingency "must be based on the difference in market treatment of contingent fee cases as a class." Id. at 3089. However, she neglected to define the explicit parameters of the relevant class. Plaintiffs urge that the relevant class should be all contingency cases, particularly other types of complex Federal litigation. They argue that "Congress intended Title VII attorney's fee awards to mirror those awarded in other cases. Consequently ... statements by affiants practicing outside Title VII regarding their expectation of contingency enhancements are relevant to plaintiff's motion."⁹ The government, on the other hand, argues that the relevant comparable class should be restricted to other Title VII cases.¹⁰ It claims that the purpose for awarding enhancements is to insure that competent counsel will accept Title VII suits. Because it assumes that the attorneys who litigate Title VII cases do not compete with those who litigate other types of contingency cases, such as tort actions, the government concludes that the standard for payment of a premium in non-statutory fee cases is completely irrelevant. The Third Circuit examined the definition of the relevant class and adopted the broad all-embracing definition urged by plaintiffs. Blum v. Witco Chemical Corporation, 829 F.2d 367 (3rd Cir.1987). A unanimous court concluded "It does not appear that Justice O'Connor ... contemplated that the class of cases to be studied be anything less than all contingency cases in a given geographic market, including personal injury cases." Id. at 381. The Third Circuit's analysis is consistent with the thrust of Justice O'Connor's opinion. Indeed, throughout her concurrence, Justice O'Connor constantly referred to the "class" of contingency cases but never included any language suggesting that the class should be restricted to actions where statutory fees are available.

a. Treatment of contingency cases in the District of Columbia market

In any event, even if this Court were to limit the relevant class to Title VII cases, plaintiffs have submitted persuasive, and for the large part unchallenged, affidavits demonstrating that the District of Columbia legal market requires a premium for all contingency cases including Title VII. Their counsel proffered 21 affidavits from attorneys practicing in this jurisdiction. The attorneys were from a variety of firms, both large and small, and included private and public interest firms. Sixteen of the 21 attorneys submitting affidavits had significant experience in Title VII cases and asserted that a premium would be necessary to induce them to accept such cases. Plaintiffs also submitted four supplemental memoranda containing numerous affidavits from a wholly different set of attorneys practicing in the local metropolitan area.¹¹ These attorneys uniformly asserted that a premium was necessary before they accepted cases on contingency.

The government offered not one shred of evidence to rebut plaintiffs' thorough documentation. Instead, it attempted to undermine the relevancy of plaintiffs' evidence by arguing that the affidavits were hypothetical and prospective in nature. However, an examination of the declarations demonstrates that the government's description falls short and is incorrect. The affiants all declared that their individual or firm's current practice was to refuse cases on a contingent...