Palmer v. Shultz

• Decision Date: 26 February 1988
• Docket Number: 76-1439.,Civ. A. No. 77-2006
• Citation: 679 F. Supp. 68
• Parties: Alison PALMER, et al., Plaintiffs, v. George P. SHULTZ, Defendant. Marguerite COOPER, et al., Plaintiffs, v. George P. SHULTZ, Defendant.
• Court: U.S. District Court — District of Columbia

679 F. Supp. 68

Alison PALMER, et al., Plaintiffs, v. George P. SHULTZ, Defendant.

Marguerite COOPER, et al., Plaintiffs, v. George P. SHULTZ, Defendant.

Civ. A. Nos. 77-2006, 76-1439.

United States District Court, District of Columbia.

February 26, 1988.

Bruce Terris, Ellen K. Wayne, Terris, Edgecombe, Hecker & Wayne, Washington, D.C., for plaintiffs.

John C. Martin, Asst. U.S. Atty., Washington, D.C., for defendant.

MEMORANDUM OPINION

JOHN LEWIS SMITH, Jr., District Judge.

This case returns to the Court for a recalculation of attorneys' fees and expenses under § 706(k) of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5(k), pursuant to the guidelines set forth in several significant controlling decisions rendered by the Supreme Court and Court of Appeals for the District of Columbia Circuit subsequent to this Court's previous ruling in this matter in Palmer v. Shultz, 598 F.Supp. 382 (D.D.C.1984). The specific issues before the Court concern: 1) the appropriate hourly rate to be used in calculating the lodestar to be awarded plaintiffs; 2) the appropriateness of an enhancement of the lodestar for quality of representation; and 3) the appropriateness of an enhancement of the lodestar to compensate plaintiffs for the risk of nonpayment.

A. Determining the Appropriate Hourly Rate to be Used in Calculating the Lodestar

In its initial ruling in this case, the Court determined that the appropriate hourly rate to be used in calculating the lodestar was the prevailing hourly market rate in the community for similar services, as opposed to the plaintiffs' actual hourly rates. Palmer v. Shultz, 594 F.Supp. 433, 436-438 (D.D.C.1984). Shortly following the entry of the Court's initial order however, the Court of Appeals rendered Laffey v. Northwest Airlines, Inc., 746 F.2d 4 (D.C.Cir. 1984) ("Laffey"), which substantially modified the methodology to be used in calculating attorney fee awards in this circuit, particularly in respect to the use of prevailing market rates in computing the lodestar.

The Court of Appeals noted that although reference to prevailing market rates is necessary as a proxy in cases involving non-profit law firms that have no established billing rates, see, e.g., Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984), there is ordinarily no such similar need where the prevailing attorneys operate a "for-profit" law firm with readily ascertainable customary hourly rates. Laffey, 746 F.2d at 15-18. Where the fee applicants have such billing histories however, "`the best evidence of the value of their time is the hourly rate which they most commonly charge their fee paying clients for similar legal services.'" Id. at 18 (citation deleted). "By setting the fee award of the attorney's customary billing rate, the opportunity cost of foregone representations is precisely offset by a fee award in the same amount." Id.

In adherence to the new guidelines set forth in Laffey, this Court reconsidered its earlier order awarding plaintiffs a lodestar fee based on prevailing market rates, and concluded that because plaintiffs had an established hourly billing rate, that rate was the appropriate rate to be used in calculating the lodestar. 598 F.Supp. 382, 384-85 (D.D.C.1984). The Court's modified ruling was initially affirmed by the Court of Appeals, but was later vacated and remanded for reconsideration with the clarification that although the customary hourly rates charged by a firm should ordinarily be presumed to be the reasonable rates for the purpose of calculating the lodestar, Laffey acknowledges the possibility of a fee applicant overcoming those presumptively reasonable rates upon a showing that they are "abnormally low." Palmer v. Shultz, C.A. Nos. 84-5815, 84-5816, August 25, 1986, Mem.Op., pp. 2-3 798 F.2d 508 (table). "The fee applicant bears the burden of establishing that the particular firm's historic rates are below the broad range prevailing in the community during the same time for similar work." Id. Citing Laffey, 746 F.2d at 19, 25. "Only if the firm's rates fall below the community's rate brackets for the services in question will an upward adjustment be in order." Id. More recently, in Save Our Cumberland Mountains, Inc. v. Hodel, 826 F.2d 43, 49 n. 3 (D.C.Cir.1987), reh'g en banc granted, 830 F.2d 1182 (D.C.Cir.1987) ("Cumberland Mountains"), the Court of Appeals restated the proposition that while counsels' customary hourly rate is the presumptively reasonable rate to be used by the court in calculating the lodestar, the court should disregard "`abnormally high or low rates' charged by counsel in comparison with the market's range of rates". (Citing Laffey, 746 F.2d at 20 & n. 100).

In an effort to rebut the presumptive reasonableness of their own customary historic hourly rates, plaintiffs have submitted affidavits from members of over twenty Washington, D.C. law firms documenting the historic rates these attorneys charged for representation in cases involving complex federal litigation. Pursuant to Laffey, plaintiffs have then bracketed those rates in a comparison chart which demonstrates the differences between their own hourly rates and those charged by the other attorneys. In nearly every instance of comparison, plaintiffs' rates fell substantially below the lowest rates charged in the community for similar services throughout the period in question. See Attachment A. In at least one instance, the hourly rate charged by one senior member of plaintiffs' firm was three times lower than the lowest hourly rate charged by his contemporaries. Id. at A-1. Plaintiffs accordingly argue that because their rates are below the lowest rates charged in the community for representation in complex federal litigation, they are entitled to an upward adjustment.

In response, defendant contends that plaintiffs have failed to meet their burden of presenting the Court with sufficient evidence of the broad range of prevailing rates in the Washington D.C. community. More particularly, defendant complains that plaintiffs have presented the Court with an uneven distribution of rate data obtained from large "premium" law firms. The Court however finds that plaintiffs' data presents a roughly even distribution of rate information from the Washington community's small, medium and large firms.¹ Even assuming arguendo that Laffey precludes examination of rates charged by firms of varying sizes, plaintiffs' evidence amply demonstrates that rates charged by large firms for representation in cases involving complex federal litigation are not significantly different from those charged by small firms for similar services.

Moreover, the focal point of inquiry in ascertaining relevant comparable community hourly rates concerns itself with the particular fee applicant's degree of skill in handling a particular level of litigation, as opposed to the size of the fee applicant's firm. See Palmer, supra, 594 F.Supp. 433 at 436. As the Court of Appeals noted in Laffey, supra, 746 F.2d 4, 24-25, in order to demonstrate a relevant comparison between the fee applicant's rates and community rates: "`The burden is on the fee applicant to produce satisfactory evidence ... that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.'" Id. (citation deleted) (emphasis added). Accord National Association of Concerned Veterans v. Secretary of Defense, 675 F.2d 1319, 1325 (D.C.Cir.1982) ("Concerned Veterans") ("The hourly rate should generally depend on the experience of the attorney and the type of work involved".).

While defendant has devoted a great deal of critical argument attacking the methodology plaintiffs employed in obtaining their rate bracket information, he has provided little persuasive evidence of his own tending to controvert the accuracy or the relevancy of plaintiffs' community rate data. The Court of Appeals has clarified in this regard that the government must submit specific rebuttal evidence in order to successfully defeat a fee applicant's requested rate as follows:

Once the fee applicant has provided support for the requested rate, the burden falls on the Government to go forward with evidence that the rate is erroneous. And when the Government attempts to rebut the case for a requested rate, it must do so by specific countervailing evidence.... In the normal case the Government must either accede to the applicant's requested rate or provide specific contrary evidence to show that a lower rate would be appropriate.

Concerned Veterans, supra, 675 F.2d 1319, 1326.

The only arguably significant rebuttal evidence submitted by defendant in this case was obtained from the District of Columbia Bar Lawyer Referral and Information Service ("LRIS"). However, as plaintiffs have previously documented, the LRIS data submitted by defendant fails to accurately reflect relevant rates charged by community attorneys engaged in complex federal litigation. See Pltfs' Reply, July 12, 1984, Attachment B. Indeed, questionnaires sent to attorneys participating in LRIS reveal that many of them had little, if any, experience in Title VII class action litigation. Id. Others responded that the rates listed in LRIS were lower than their standard rates either because they were fulfilling their ethical obligations to provide counsel to clients who could not afford normal rates or because they had recently begun their own practices and needed new clients, even at reduced rates. Id. Most importantly however, when asked whether the LRIS rates were indicative of the rates counsel would charge for representation in federal class action employment discrimination litigation, a majority stated that because of the extraordinarily demanding nature of such cases, they would require a higher hourly rate than they had quoted in LRIS. Id.

As the Court has already noted, this case was "no ordinary...