Shaw v. Library of Congress

Decision Date13 November 1984
Docket NumberNo. 82-1019,82-1019
Citation747 F.2d 1469,241 U.S.App.D.C. 355
Parties36 Fair Empl.Prac.Cas. 284, 35 Empl. Prac. Dec. P 34,859, 241 U.S.App.D.C. 355, 53 USLW 2257 Tommy SHAW v. LIBRARY OF CONGRESS, et al., Appellants.
CourtU.S. Court of Appeals — District of Columbia Circuit

Appeal from the United States District Court for the District of Columbia (Civil Action No. 79-00325).

John Oliver Birch, Asst. U.S. Atty., Washington, D.C., with whom Stanley S. Harris, U.S. Atty., Washington, D.C., at the time the brief was filed, and Royce C. Lamberth, Asst. U.S. Atty., Washington, D.C., were on the brief, for appellants. Kenneth M. Raisler, Asst. U.S. Atty., Washington, D.C., also entered an appearance for appellants.

Charles Stephen Ralston, New York City, with whom Shalon Ralph, Chevy Chase, Md., was on the brief, for appellee.

Before ROBINSON, Chief Judge, WALD and GINSBURG, Circuit Judges.

Opinion for the Court filed by Chief Judge SPOTTSWOOD W. ROBINSON, III.

Dissenting Opinion filed by Circuit Judge GINSBURG.

SPOTTSWOOD W. ROBINSON, III, Chief Judge:

A corollary to the doctrine of sovereign immunity exempts the United States from liability for interest absent its express consent thereto. 1 The sole issue on this appeal is whether the District Court dishonored that precept when, in assessing an attorneys' fee against the United States, it effected a 30 percent upward adjustment of the lodestar 2 to compensate the attorney for delay in receipt of payment.

We sustain the adjustment alternatively on two grounds. First, we conclude that the language of the statute authorizing allowances of attorneys' fees against the United States in employment-discrimination cases waives its sovereign immunity with respect to the delay component of the fee award. Second, we find that component validated by a line of cases relaxing the traditional rigor of the sovereign-immunity doctrine.

I

In 1976 and again in 1977, Tommy Shaw, a black employee of the Library of Congress, submitted complaints of job-related racial discrimination to the Library's Equal Employment Office. 3 In 1978, after the Library remained resistant to these complaints, Shaw's counsel engaged in administrative proceedings and during the course thereof entered into negotiations which culminated in a settlement agreement. 4 As part of the settlement, the Library agreed to promote Shaw retroactively with backpay provided the Comptroller General first determined that the Library had authority to do so without a specific finding of racial discrimination. 5 The Comptroller General, however, held that the Library lacked power under the Back Pay Act of 1966 6 to pursue that course. 7

Dissatisfied with this turn of events, Shaw sued in the District Court 8 and ultimately prevailed on his position that the Library had authority to afford the relief specified in the settlement accord. 9 As a result of Shaw's victory, the court ordered that he be awarded litigation costs and reasonable attorneys' fees, 10 withholding, however, determination of the dollar amount thereof until after further proceedings and this court's decision in Copeland v. Marshall, 11 then pending en banc. 12 By this time, primary responsibility for prosecution of Shaw's claim had devolved upon new lawyers, but the efforts of his earlier counsel before the Library and in the District Court had involved considerable time and energy. 13 After our decision in Copeland was announced, counsel moved for an allowance of attorneys' fees, 14 requesting compensation at the rate of $85 per hour for 103.75 hours of work on Shaw's behalf during the course of those proceedings. 15

Largely dismissing the Library's challenges to both the hourly rate and the number of hours claimed by Shaw's counsel, 16 the District Court computed a lodestar of $8,435, 17 based on 99 hours of work at the $85 proposed hourly rate, excluding from its calculation 4.75 hours which counsel devoted to research in an abortive effort to impart a class-action aspect to Shaw's administrative complaints. 18 The court then reduced the lodestar by 20 percent to reflect the quality of counsel's representation. 19 Lastly, and most importantly for this appeal, the court increased the lodestar by 30 percent to compensate counsel for the delay in actual payment for the legal services he had rendered. 20 The court explained:

This case should have ended in August 1978, or at the latest in November of that year. If [Shaw's counsel] had been compensated at about that time, he could have invested the money at an average yield of not less than 10% per year. It is the fault of neither [Shaw] nor [counsel] that payment was not made sooner. It is reasonable to assume that if payment is made promptly, counsel will receive his reimbursement by December 1, 1981. Accordingly, the accompanying order reflects an upward adjustment of 30% for delay. 21

Then, offsetting the 30 percent increase in the lodestar by the 20 percent reduction in the lodestar, the District Court granted a net 10 percent addition to the lodestar 22 and, accordingly, awarded counsel a fee of $9,278.50. 23 The Library has appealed, 24 arguing that the 30 percent upward adjustment for delay infringes the rule that interest may not be assessed against the United States in the absence of waiver. 25

II

The issue posed on appeal is hardly one of first impression. In Copeland v. Marshall, 26 we declared en banc that the United States can be held liable under Title VII of the Civil Rights Act of 1964 27 for attorneys' fees in an amount augmented to compensate for the lag attending payment. We said:

The delay in receipt of payment for services rendered is an additional factor that may be incorporated into a contingency adjustment. The hourly rates used in the "lodestar" represent the prevailing rate for clients who typically pay their bills promptly. Court-awarded fees normally are received long after the legal services are rendered. That delay can present cash-flow problems for the attorneys. In any event, payment today for services rendered long in the past deprives the eventual recipient of the value of the use of the money in the meantime, which use, particularly in an inflationary era, is valuable. A percentage adjustment to reflect the delay in receipt of payment therefore may be appropriate. 28

We have subsequently reaffirmed this principle 29 and, indeed, have upheld an award of attorneys' fees against the United States that in fact was adjusted upward to compensate for delay. 30

Despite the seemingly clear applicability of these precedents, however, we do not rest our disposition on stare decisis alone. Whether an upward delay adjustment in an attorneys'-fee award satisfies the rigorous requirements of the sovereign-immunity doctrine is an issue we have dealt with only peripherally, 31 and one we have never squarely addressed. We recognize, too, the jurisdictional implications of any legal bar created by that doctrine, and acknowledge the existence of decisions of this circuit arguably in conflict with Copeland and its progeny on this point. 32 We therefore opt to consider the Library's argument much as if it were presented upon a clean slate.

III

The initial inquiry, of course, is whether the District Court's 30 percent augmentation of the lodestar for delay in payment of the fee constitutes "interest" against the United States within the contemplation of the rule invoked by the Library. Shaw characterizes this component of the fee award as a proper ingredient of a reasonable attorneys' fee, in contradistinction to interest. 33 The only way to determine whether this addition to the lodestar is condemned by the traditional interest rule is to ascertain what that rule prohibits.

Perhaps the clearest example of interest appears when a court, after calculating the amount of a monetary judgment, adds a percentage of that amount to compensate the claimant for loss of use of the money during the period between the claimant's initial entitlement to the money and the day the judgment is rendered. 34 Here the long- established rule refuses to view the sovereign as having consented to the addition, even though consent to suit on the claim has been established. 35 The same results follow court-awarded sums which, though not interest calculated in the classic manner, nonetheless are functionally equivalent to interest. Thus the Supreme Court has rejected a contention that an increase in an assessment by the Court of Claims against the United States, made as compensation for loss of use and occupation of a mining claim appropriated by the United States years earlier, was "compensation" rather than interest. 36 The Court reasoned that because "the loss of the use of the money results from the failure to collect sooner a claim held to have accrued when the company's property was taken, that which the company seeks to recover is, in substance, interest." 37 We ourselves recently held an "inflation adjustment" in awards of backpay to federal employees amounted to interest against the United States because it served "the same general end of compensating the recipient for differences in the worth of her award between the date of actual receipt and the date as of which the money should have been paid." 38

In the case at bar, the District Court's 30 percent addition to the lodestar was designed to reimburse Shaw's counsel for the decrease in value of his uncollected legal fee between the date on which he concluded his legal services and the court's estimated date of likely actual receipt. 39 By the court's own description, the addition was based on a rough determination of the "average yield" of the amount of the fee if invested at 10 percent per annum for three years. 40 We think the adjustment falls well within the contours of the interest concept. Only by ignoring applicable caselaw as well as as the real nature of the disputed adjustment could we...

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