Salazar v. Dist. of Columbia, s. 14–7035

• Decision Date: 18 December 2015
• Docket Number: 14–7050.,Nos. 14–7035,s. 14–7035
• Citation: 809 F.3d 58
• Parties: Oscar SALAZAR, by his Parents and Next Friends, Adela and Oscar SALAZAR, et al., Appellees v. DISTRICT OF COLUMBIA, et al., Appellants Chartered Health Plan and D.C. Chartered Health Plan, Inc., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

809 F.3d 58

Oscar SALAZAR, by his Parents and Next Friends, Adela and Oscar SALAZAR, et al., Appellees

v. DISTRICT OF COLUMBIA, et al., AppellantsChartered Health Plan and D.C. Chartered Health Plan, Inc., Appellees.

Nos. 14–7035

14–7050.

United States Court of Appeals, District of Columbia Circuit.

Argued Sept. 11, 2015.

Decided Dec. 18, 2015.

Richard S. Love, Senior Assistant Attorney General, Office of the Attorney General for the District of Columbia, argued the cause for appellants. With him on the briefs were Karl A. Racine, Attorney General, Todd S. Kim, Solicitor General, and Loren L. AliKhan, Deputy Solicitor General.

Kathleen L. Millian argued the cause for appellees. With her on the brief were Bruce J. Terris, Zenia Sanchez Fuentes, Jane Perkins and Lynn E. Cunningham.

Before: SRINIVASAN and PILLARD, Circuit Judges, and SENTELLE, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge SENTELLE.

SENTELLE, Senior Circuit Judge:

Appellants the District of Columbia, the District's Mayor, and the Director of the District's Department of Human Services (collectively, the "District") appeal two separate awards of attorneys' fees and expenses for work performed from 2010 to 2012 on this 42 U.S.C. § 1983 Medicaid class action. In this consolidated appeal, the District raises three grounds for its position that the district court's decisions amounted to an abuse of discretion. First, the District argues that the district court abused its discretion by making targeted reductions in Plaintiff–Appellees' ("Plaintiffs") fee requests, as opposed to the District's requested across-the-board reductions. Second, the District contends that the district court abused its discretion in awarding hourly rates to Plaintiffs based on the Legal Services Index ("LSI") update to the Laffey Matrix. See Laffey v. Nw. Airlines, Inc. (Laffey I), 572 F.Supp. 354, 371 (D.D.C.1983), aff'd in part, rev'd in part on other grounds, Laffey v. Nw. Airlines, Inc. (Laffey II), 746 F.2d 4 (D.C.Cir.1984), overruled in part on other grounds en banc by Save Our Cumberland Mountains, Inc. v. Hodel (SOCM), 857 F.2d 1516 (D.C.Cir.1988). Finally, the District states that the district court improperly ordered the District to pay for the time Plaintiffs' counsel spent on a third-party appeal. We disagree. The district court thoroughly analyzed both parties' positions in awarding some, but not all, of the requested fees. For the reasons stated below, we affirm.

BACKGROUND

In 1993, Plaintiffs filed a class action against the District challenging the District's provision of medical assistance, including certain services for all enrolled children, under the District's Medicaid program. In 1996, the district court concluded that the District had violated 42 U.S.C. § 1983 by depriving Plaintiffs of their statutory and constitutional rights. Salazar v. District of Columbia, 954 F.Supp. 278, 334 (D.D.C.1996). In 1999, while the judgment was pending on appeal, the parties entered into a comprehensive settlement agreement (the "Settlement Order").

Under the terms of the Settlement Order, Plaintiffs' counsel is entitled to compensation for monitoring the District's compliance with the provisions of the Settlement Order, for representing individual class members to enforce their rights under federal Medicaid law and the Settlement Order, and for work not designated as monitoring work, such as enforcement, attorneys' fees, and appeals work. Paragraphs 64 and 65 of the settlement establish certain rates, which are adjusted annually for inflation, for Plaintiffs' counsel to monitor and enforce the District's compliance with the Settlement Order. For instance, if a purported member of the class seeks Plaintiffs' counsel's assistance, the reasonable time and expenses of Plaintiffs' counsel in determining whether the individual is a member of the class and in providing legal assistance "shall be deemed compensable monitoring of [the Settlement] Order under 42 U.S.C. § 1988 [at a rate of]" $75/hr. In addition, for rates set under Paragraphs 64 and 65, the Settlement Order specifies that those "hourly rates shall be adjusted annually, beginning on January 1, 1999, based on the U.S. Department of Commerce Consumer Price Index for Legal Services." Under Paragraph 66, the parties left open the rates for work not specified as monitoring work under Paragraphs 64 and 65 of the Settlement Order.

The Settlement Order provides no further guidance for determining an appropriate fee award where the rate is unspecified. However, this Court has developed a three-part analysis to assess appropriate fee awards under fee-shifting statutes in cases involving complex federal litigation. See Eley v. District of Columbia, 793 F.3d 97, 100 (D.C.Cir.2015) (citing SOCM, 857 F.2d at 1517 ). A court must: (1) determine the "number of hours reasonably expended in litigation"; (2) set the "reasonable hourly rate"; and (3) use multipliers as "warranted." Id. In addition, the "fee applicant bears the burden of establishing entitlement to an award, documenting the appropriate hours, and justifying the reasonableness of the rates," with the opposing party remaining "free to rebut [the] fee claim." Covington v. District of Columbia, 57 F.3d 1101, 1107–08 (D.C.Cir.1995), cert. denied , 516 U.S. 1115, 116 S.Ct. 916, 133 L.Ed.2d 847 (1996).

Here, the District challenges the district court's analysis of the hours Plaintiffs' counsel spent litigating the multiple issues arising from the monitoring and enforcement of the Settlement Order. Broadly, the District argues that the district court abused its discretion by failing to rein in Plaintiffs' counsel's fees further than it did.

The District also challenges the "reasonable hourly rate" determination. That determination requires showing at least three elements: (1) "the attorneys' billing practices"; (2) "the attorneys' skills, experience, and reputation"; and (3) "the prevailing market rates in the relevant community." Covington, 57 F.3d at 1107. As to these three sub-elements, the District focuses its challenge on the district court's determination of the "prevailing market rates in the relevant community."

A court calculating a prevailing market rate allows fee applicants to submit attorneys' fee matrices as one type of evidence. Covington, 57 F.3d at 1109. As we have previously noted in Eley, 793 F.3d at 100, "[t]he most commonly used fee matrix is the ‘Laffey Matrix’—the schedule of prevailing rates compiled in [Laffey I ]."

The Laffey Matrix sets out a general guideline for awarding attorneys' fees based on experience. See, e.g., Eley, 793 F.3d at 101 (discussing Laffey Matrix rates). For instance, the Laffey Matrix sets the rate for "experienced federal court litigators in their 11th through 19th years after law school graduation" at $150/hr. Id. (citing Laffey II, 746 F.2d at 8 n. 14 ). But these 30–year–old rates must also be adjusted for inflation. See Eley, 793 F.3d at 101 (citing SOCM, 857 F.2d at 1525 ). For this reason, updated Laffey Matrices developed, including the two at issue here—(i) the Laffey Matrix as updated by the Legal Services Index ("LSI") of the Nationwide Consumer Price Index ("CPI") (the "LSI Laffey Matrix"), and (ii) the All–Items CPI for the Washington, D.C. area (also known as the "USAO Laffey Matrix"). See also Eley, 793 F.3d at 101–02 (elaborating on the differences between the LSI and the USAO Laffey Matrices).

In 2013, Plaintiffs filed two fee applications for work done from 2010 through 2012. The district court granted in part and denied in part those fee applications, which decisions the District appeals now. In both decisions, and in spite of the District's arguments otherwise, the district court ruled that the LSI Laffey Matrix provided the appropriate billing rates for work lacking a specified rate in the Settlement Order. See Salazar v. District of Columbia (Salazar III), 991 F.Supp.2d 39, 47 (D.D.C.2014) ; see also Salazar v. District of Columbia (Salazar IV ), 30 F.Supp.3d 47, 51–52 (D.D.C.2014) (adopting analysis of Salazar III ). Citing to previous resolutions of other fee applications in this on-going litigation, the district court reiterated that "the [LSI-adjusted][ [sic ] Laffey index has the distinct advantage of capturing the more relevant data because it is based on the legal services component of the Consumer Price Index rather than the general CPI on which the U.S. Attorney's Office matrix is based." Salazar III, 991 F.Supp.2d at 47 (quoting Salazar v. District of Columbia (Salazar I), 123 F.Supp.2d 8, 14–15 (D.D.C.2000) ) (adopting and citing Salazar v. District of Columbia (Salazar II), 750 F.Supp.2d 70, 72–74 (D.D.C.2011) ); see also Salazar IV, 30 F.Supp.3d at 5152. After concluding that the LSI Laffey Matrix was the appropriate rate index, the district court addressed the District's many arguments related to the appropriateness of Plaintiffs' counsel's billing. See Salazar III, 991 F.Supp.2d at 49–64 ; Salazar IV, 30 F.Supp.3d at 52–65.

The district court awarded some but not all of the fees and costs Plaintiffs sought; and where the district court found that Plaintiffs' counsel's fees were not reasonable, the court either reduced the hours sought, or denied the fee request. See, e.g., Salazar III, 991 F.Supp.2d at 53 (reducing billing for some individual claims by 15% as the court found the hours spent "excessive"); Salazar IV, 30 F.Supp.2d at 61 (denying request for fees for categories of work that were "unrelated" to the case). In the end, the district court awarded Plaintiffs $655,587.98 for fees and expenses related to the 2011 fee application, and also awarded Plaintiffs $522,990.63 for fees and expenses related to the 2012 fee application. J.A. at 234445, 2390–91.

DISCUSSION

We review the district court's fee awards for abuse of discretion, "and will not upset its hourly rate determination absent clear misapplication of legal principles, arbitrary fact finding, or unprincipled...