Save Our Cumberland Mountains, Inc. v. Hodel

• Decision Date: 16 September 1988
• Docket Number: No. 85-5984,85-5984
• Citation: 857 F.2d 1516,273 U.S.App.D.C. 78
• Parties: 47 Fair Empl.Prac.Cas. 1363, 28 ERC 1469, 273 U.S.App.D.C. 78, 57 USLW 2165, 18 Envtl. L. Rep. 21,419 SAVE OUR CUMBERLAND MOUNTAINS, INC., et al. v. Donald P. HODEL, Secretary of the Interior, et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1516

857 F.2d 1516

47 Fair Empl.Prac.Cas. 1363, 28 ERC 1469,

273 U.S.App.D.C. 78, 57 USLW 2165,

18 Envtl. L. Rep. 21,419

SAVE OUR CUMBERLAND MOUNTAINS, INC., et al. v. Donald P. HODEL, Secretary of the Interior, et al., Appellants.

No. 85-5984.

United States Court of Appeals District of Columbia Circuit.

Argued March 2, 1988.

Decided Sept. 16, 1988.

John A. Bryson, Attorney, Dept. of Justice, with whom Roger J. Marzulla, Acting Asst. Atty. Gen., and Robert L. Klarquist, Attorney, Dept. of Justice, Washington, D.C., were on the brief, for appellants.

Joseph A. Yablonski, with whom L. Thomas Galloway, Washington, D.C., was on the brief, for appellees. Daniel B. Edelman, Washington, D.C., also entered an appearance for appellees.

Before WALD, Chief Judge, ROBINSON, MIKVA, EDWARDS, RUTH B. GINSBURG, STARR, SILBERMAN, BUCKLEY, WILLIAMS, D.H. GINSBURG, and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

Dissenting Opinion filed by Circuit Judge STARR, in which Circuit Judges SILBERMAN and BUCKLEY concur.

SENTELLE, Circuit Judge:

The panel opinion in this case, Save Our Cumberland Mountains, Inc. v. Hodel, 826 F.2d 43 (D.C.Cir.1987), reviewed an attorneys' fee award entered pursuant to Sec. 520(d) of the Surface Mining Control and Reclamation Act ("SMCRA"), 30 U.S.C. Sec. 1270(d) (1982 & Supp.1986). In addition to making other modifications, generally not pertinent to this decision, the panel, based on the precedent of Laffey v. Northwest Airlines, Inc., 746 F.2d 4 (D.C.Cir.1984), determined that the District Court had improperly computed the hourly rate for plaintiffs' attorneys, and accordingly ordered a remand for recalculation of that rate consistent with Laffey and the panel opinion. Thereafter, we accepted the case for rehearing en banc, Save Our Cumberland Mountains, Inc. v. Hodel, 830 F.2d 1182 (D.C.Cir.1987), and ordered briefing of the single question:

Should Laffey v. Northwest Airlines, Inc. ... be overruled to the extent that it holds that in awarding attorneys' fees to a private law firm, that customarily charges below the prevailing community rate in order to serve a particular type of client, courts should calculate the "reasonable hourly rate" according to the hourly rates charged in similar cases by that firm, as opposed to rates that reflect the prevailing community rate for similar legal services?

Id. Having reviewed the question en banc, we now answer that question in the affirmative and overrule Laffey.

I. BACKGROUND

The factual background of the substantive litigation underlying this attorneys' fee dispute is set forth in both the panel opinion and the District Court opinion, Save Our Cumberland Mountains, Inc. v. Hodel, 622 F.Supp. 1160 (D.D.C.1985). We will revisit only those facts directly relating to the fee petition and the question before us. The District Court had awarded fees for work performed by plaintiffs' four attorneys, Joseph A. Yablonski, L. Thomas Galloway, Daniel B. Edelman, and Lee Bishop. As the panel noted, the District Court applied the correct three-part analysis to determine the appropriate award: (1) determination of the number of hours reasonably expanded in litigation; (2) determination of a reasonable hourly rate or "lodestar"; and (3) the use of multipliers as merited. Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984). As to the second of these steps, the panel ruled that the District Court had erred as to the appropriate "reasonable hourly rate" for Yablonski and Galloway.

The District Court, in attempting to determine the reasonable hourly rate, first noted the Supreme Court's determination in Blum v. Stenson that "[s]uch a reasonable hourly rate is that 'prevailing in the community for similar work.' " Save Our Cumberland Mountains, 622 F.Supp. at 1165 (citation omitted). He further noted this Circuit's prior holding that "[f]or an attorney who has a customary rate at which he or she bills fee-paying clients, the prevailing community rate has been said to be that customarily charged rate." Id. (citing Laffey, 746 F.2d 4 (D.C.Cir.1984)). He then held, following Blum v. Stenson, that "for an attorney who has no customary hourly rate, the Court must look to the prevailing community rates in order to determine the appropriate hourly rate." Save Our Cumberland Mountains, 622 F.Supp. at 1165.

The panel opinion noted that under Laffey, this case is factually distinct from Blum v. Stenson. In Blum, the attorneys seeking the fee awards were salaried employees of the Legal Aid Society of New York, a private, non-profit law office. The District Court had applied prevailing market rates for attorneys of like competence and experience in the same area doing similar work during the relevant period. Stenson v. Blum, 512 F.Supp. 680, 683 (S.D.N.Y.1981). The government argued to the Supreme Court for the adoption of a cost-based standard for fee awards to non-profit, legal aid attorneys, while recognizing that prevailing market rates were the proper standard attorneys in private for-profit practices. The Court rejected that theory and applied the same test for non-profit legal services organizations as the government had conceded was applicable to private attorneys.

The panel opinion of this Court reviewed Blum and Laffey and determined this case to be controlled by Laffey. Plaintiffs' attorneys in Laffey, like SOCM's attorney in the case at bar, charged some clients at hourly rates less than the prevailing average, from motives of subsidizing what they perceived to be "good" clients or clients with good causes. Laffey, 746 F.2d at 14 n. 69. We held in Laffey that the Blum treatment of public interest legal organizations was inapplicable to a quasi-public interest law firm practicing for profit, but reducing rates from non-economic motives, and that the most "relevant comparison" was the rate charged in private representation by the attorneys seeking the awards. Laffey, 746 F.2d at 24.

In the present case, the panel applied Laffey and determined that Yablonski's average rate, for the 20 to 50 percent of his clients whom he charged on an hourly basis, was $100 per hour and that Galloway charged a "reduced rate" for "national environmental and conservation groups" of from $75 to $100 per hour. Applying the Laffey rule to those facts, the panel determined that $100 was the proper hourly rate for the determination of the lodestar as to Yablonski and Galloway.

It is in this posture that we now consider plaintiffs' contention that Laffey must be overruled.

II. ANALYSIS

As both Blum and Laffey teach, the determination of an award of reasonable attorney fees is at bottom a question of statutory interpretation. In Blum, the Supreme Court construed the Civil Rights Attorney's Fee Award Act of 1976, 42 U.S.C. Sec. 1988 (1976 & Supp. V), which expressly authorized the award of a reasonable attorney's fee to prevailing civil rights litigants other than the United States. In determining the intent of Congress as to the meaning of the phrase "reasonable attorneys fees" (emphasis supplied), the Court looked in large part to the Senate Report which approved the method employed in four cases, Johnson v. Georgia Highway Express, 488 F.2d 714 (5th Cir.1974); Stanford Daily v. Zurcher, 64 F.R.D. 680 (N.D.Cal.1974); Davis v. County of Los Angeles, 8 Empl.Prac.Dec. (CCH) p 9444 (C.D.Cal.1974); and Swann v. Charlotte Mecklenburg Bd. of Educ., 66 F.R.D. 483 (W.D.N.C.1975). The Senate Report plainly expresses the intent of Congress that the Johnson case lays down the "appropriate standards," and that the standards are "correctly applied" in the other three cited cases which " 'resulted in fees which are adequate to attract competent counsel but which do not produce windfalls to attorneys.' " Blum, 465 U.S. at 893-94, 104 S.Ct. at 1546. (quoting S.Rep. No. 1011, 94th Cong., 2d Sess. 6 (1976) U.S.Code Cong. & Admin.News pp. 5909, 5913).

The Blum Court then went on to determine from this legislative history that "Congress did not intend the calculation of fee awards to vary depending on whether plaintiff was represented by private counsel or by a nonprofit legal services organization." Id. at 894, 104 S.Ct. at 1547.

Later that same year, we faced in Laffey the question of applying that statutory analysis to a fact situation, like the one at bar, in which the plaintiff's attorney did not fall neatly into either of the categories "private counsel" or "nonprofit legal services organization." The Laffey counsel, like SOCM's counsel, was literally engaged in private for-profit practice, but adjusted fee schedules downward from pro bono or quasi public interest motives to reflect the reduced ability of the client to pay or what the attorney saw as the importance and justice of the client's cause. The Laffey Court noted that the Supreme Court has interpreted "a reasonable attorney's fee" to be one that is "adequate" to attract competent legal advice, but does not produce "windfalls" to attorneys. Laffey, 746 F.2d at 16 (quoting Blum, 465 U.S. at 897, 104 S.Ct. at 1548). Starting from this point of reference, the Laffey Court determined that Blum 's teaching with reference to the use of prevailing market rates applies only where, as in the case of the public interest nonprofit law firm, the attorneys have no billing histories, and a "proxy for the market must be found in order to set a reasonable hourly rate." Laffey, 746 F.2d at 16 n. 74. The Laffey Court then reasoned that the willingness of counsel to undertake the representation at his stated rate proved the adequacy of that rate to attract competent counsel. To award higher rates based on the prevailing market, the Court reasoned, "would produce the very windfall Congress and the Supreme Court have said should be avoided." Id. at 25 (footnote omitted).

It was against this background of Blum and Laffey that the panel opinion in the present case attempted to determine a...