Federal Circuits, Eleventh Circuit (February 01, 1988)
Docket number: 87-7763
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U.S. Supreme Court - Riverside v. Rivera, 477 U.S. 561 (1986)
U.S. Supreme Court - Blum v. Stenson, 465 U.S. 886 (1984)
U.S. Supreme Court - Hensley v. Eckerhart, 461 U.S. 424 (1983)
U.S. Supreme Court - White v. New Hampshire Dept. of Employment Security, 455 U.S. 445 (1982)
Vanzetta Penn McPherson, Montgomery, Ala., for plaintiffs-appellants.
Michael S. Jackson, Montgomery, Ala., for defendants-appellees.Appeal from the United States District Court for the Middle District of Alabama.Before FAY, Circuit Judge, HENDERSON*, Senior Circuit Judge, and FORRESTER**, District Judge.FORRESTER, District Judge:In this case we are asked to consider whether this court has lost jurisdiction to entertain an appeal of an award of attorney's fees and, also, we are asked to review the amount of that award.I.HISTORY OF THE APPEALThis class action challenging the Housing Authority's practice of overcharging public housing tenants for rent by failing to provide adequate utility allowances for gas and electric service was resolved by a consent order and judgment. The consent order entitled the tenants to approximately $1 million in damages for previous overcharges, to be paid over a period of years rather than in a lump sum, and a reduction in gas utility allowances for twenty-one months after the consent order.Following the district court's entry of the consent order and judgment the tenants filed a motion for trial counsel and fee counsel fees. The court awarded fees on September 26, 1986. In the September 26 order the court did not reserve any issues for further consideration and did not address the tenants' request for reasonable fees for their fee counsel.On October 6, 1986 the tenants moved for reconsideration of the September 26 order. The motion for reconsideration included a paragraph noting the court's failure to address the issue of fee counsel fees and requesting that such fees be awarded. The court denied the tenants' motion for reconsideration on October 9, 1986 but requested further briefing and documentation on the fee counsel fees issue. On November 6, the tenants filed a notice of appeal of the district court's October 9 order. On November 10, the district court awarded the tenants' fee counsel $1,046.32 as a reasonable fee. The November 10 order, which left no issues pending in the case, was not appealed.II.DISCUSSION OF JURISDICTIONA threshold question is whether this court has jurisdiction of the appeal in this case, since the district court's October 9 order is not a final order under the express terms of 28 U.S.C. Sec . 1291 or Federal Rule of Civil Procedure 54(b) and is not an appealable interlocutory order under 28 U.S.C. Sec . 1292(b).1 Even if the October 9 order was not final, however, this court's previous decisions establish that the district court's subsequent order terminating the litigation cured any prematurity in the appeal. See Bank South Leasing, Inc. v. Williams, 778 F.2d 704 (11th Cir.1985). In Bank South, this court held that a notice of appeal filed after judgment was rendered but before the attorney's fees issue was decided was premature, but found that a subsequent order deciding the attorney's fees issue cured the premature notice. Id. at 705, citing Rivers v. Washington County Board of Education, 770 F.2d 1010, 1011 (11th Cir.1985); Martin v. Campbell, 692 F.2d 112, 114 (11th Cir.1982).This court has noted that the holding in Bank South "may be incorrect," Robinson v. Tanner, 798 F.2d 1378, 1384 (11th Cir.1986), cert. denied, --- U.S. ----, 107 S.Ct. 1979, 95 L.Ed.2d 819 (1987), because the finding of appellate jurisdiction in Bank South was not necessarily compelled by holdings of previous cases. Those previous cases held that a premature notice of appeal from an order that is otherwise immediately appealable is cured by a subsequent final judgment, but that a premature notice of appeal from an interlocutory order that is not immediately appealable is not cured by a subsequent final judgment. Compare Jetco Electronic Industries v. Gardiner, 473 F.2d 1228 (5th Cir.1973), with United States v. Taylor, 632 F.2d 530 (5th Cir.1980). See also Robinson, 798 F.2d at 1385 (summarizing the holdings of Jetco and Taylor ). However, the court in Robinson also noted that the finding of appellate jurisdiction in Bank South was also not necessarily foreclosed by the previous cases since "the rules governing attorney's fees case are sui generis in many respects." 798 F.2d at 1384. Bank South, as the only case applying the jurisdictional principles of Jetco and Taylor in the attorney's fees situation, is controlling law until overruled by an en banc court, see Bonner v. City v. Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), and this court therefore does have jurisdiction of this appeal. Accord, Alcorn County v. U.S. Interstate Supplies, Inc., 731 F.2d 1160 (5th Cir.1984).III.ATTORNEY'S FEESA. THE RECORD BELOW.This case began as a class action with Mrs. Norman representing about 3,000 present and future tenants of the Montgomery Housing Authority in seeking relief for utility allowances in the computation of rents charged by the authority. It is represented that under federal law there is a limit on the total amount of money which a tenant must pay for both rent and utilities. The regulations governing this computation changed in the early 1980's, as did utility charges, and yet the Authority had done nothing to make adjustments in rents as of the filing of this lawsuit.Counsel for the class were two attorneys from the Alabama Legal Services Corporation. For some time that public law agency had received complaints from tenants. Finally, Mrs. Norman determined to bring suit. The Housing Authority's attorney learned of the possibility that suit was contemplated and offered to settle the matter. The record does not reflect the relationship of this offer to the adjustments which were finally obtained.The Legal Services attorneys decided to file suit rather than continue to negotiate in part because they believed that it would be easier to get HUD's concurrence if litigation were pending. The record does not reflect the basis for this assessment. HUD was not a party to the lawsuit. The case proceeded through very limited discovery, a fully-contested class certification hearing, a motion for partial summary judgment filed by the Authority which was successful in having the case dismissed as to six parties and as to one theory, a consent decree, a motion by the Authority to avoid the consent decree, and finally the award of attorney's fees.A number of similar suits had previously been filed in other districts and several had been resolved successfully by the time this action was brought. The Legal Services attorneys apparently had access to some of the pleadings and discovery materials from the other suits. Additionally, they had access to an expert who had been used in other suits. There was very little question about the class's entitlement to some relief. There were questions concerning the timing and dimension of that relief.Plaintiffs/appellants contend that the economic value of the consent decree could be between $1.5 and $2 million, in addition to obtaining proper future computation of utility allowances. The initial attorney's fees request was for 394 hours at $125 an hour for a total of $49,250 enhanced by a multiple of two for a net total of $98,500. The district court awarded $11,855. Appellants contend that the district court calculated an hourly rate which did not reflect the special skill of counsel and improperly used as evidence of market rate the charges of members of old-line well-established general law firms in the City of Montgomery. With reference to the rates utilized by the district court, appellants contend that the court erred in reducing the hourly rate to a "bookkeeper" rate for some of the time and that the use of a bookkeeper rate does not account for the legal and analytical skills required to apply the statute to the facts.Appellants generally contend with reference to deductions made by the court from the amount of hours claimed that the court failed to provide a concise but clear explanation of its reasons, and that the deduction of the hours spent for settlement and duplication of effort by attorneys was improper. Appellants further contend that the court erred in not conducting an evidentiary hearing to resolve disputes of fact concerning the reasonableness of the rates and hours. Finally, appellants fault the district court for not enhancing the award because of the contingency of recovery, the quality of representation provided and delay in the receipt of attorney's fees.The district court concluded that lawyers in "old-line" firms earn between $65 and $90 an hour in the Montgomery area and that $75 an hour was a reasonable rate for the two attorneys involved in this case. Further, the district court determined through its own experience that $35 per hour was a reasonable rate for bookkeeping services. The court further reasoned that the case necessarily involved a tremendous amount of bookkeeping, because of the number of class members, and established thirty of the hours expended in discovery efforts as being primarily bookkeeping work.The court deducted all time claimed for post-settlement administration as it found no authority for allowing such an award. The court found that appellants' counsel's claim for eighty-four hours for the taking of two depositions and the preparation for one planned deposition was excessive by twenty-eight hours. The court deducted twenty hours claimed by appellants' attorneys for work done during the pleading stage, finding that there was duplication of effort by the two attorneys.Appellants' attorneys contended that they spent ninety-seven hours in reaching a settlement. The court considered that amount totally excessive and allowed twenty hours.In addition to these findings, the court noted that the appellants' attorneys had pleadings in similar cases to assist them in drafting, that the attorneys filed one unnecessary motion to compel against Alabama Power Company, and that appellants expanded the case by suing Board members in their individual capacities and filing a Brooke Amendment claim under 42 U.S.C. Sec . 1437a. The court found that substantial results were obtained even if the lawsuit was unnecessary to obtain them, but it stated that it did not enhance the fees because of the possibility of duplication of efforts and the possibility of improperly charged hours.In support of their contention that $125 per hour was a reasonable rate, appellants' attorneys offered four affidavits by four Montgomery attorneys, Segall, Boyd, McPhillips and Harris. All had represented plaintiffs in civil rights cases. Their experience in the area ranged from six to fifteen years. Segall stated that $125 an hour was higher than his customary charge, but he thought that it was reasonable in this case. Further, he felt the time spent was reasonable. Boyd stated that Ivie and Varley, the two Legal Services attorneys, had reputations as master attorneys in complex civil rights litigation. She considered the time spent reasonable and necessary considering the importance of the result. Further, Ms. Boyd stated that she was familiar with awards and negotiated settlements in other cases and that those ranged between $100 and $125 an hour. McPhillips said that he felt that all hours expended were reasonable and stated that attorneys in the area of Varley and Ivie's experience charged between $100 and $125 per hour. Harris stated that he felt that the hours claimed were reasonable for the relief obtained and further stated that he thought $125 an hour was a reasonable fee based on his knowledge for similar work in the area and considering the skills shown.By affidavit Varley and Ivie established that they had eight and ten years' experience, respectively, and that both had had numerous trials and appeals in civil rights cases. Varley had experience as a clerk to a federal judge and was a supervising attorney for the Montgomery office of the Alabama Legal Services Corporation. Ms. Ivie stated that she specialized in public housing cases. Neither attorney had any prior experience or expertise in the substantive laws at issue in the case.Countering the affidavits offered by the appellants were three affidavits tendered by the Authority. Counsel for the Montgomery Housing Authority stated that he had discussed fees with other lawyers and had determined that even senior partners in Montgomery firms do not charge $125 an hour. Further, he stated his opinion that the hours charged were unreasonable as he expended only 166- 3/4 hours in the case, of which 100 were spent in working out the settlement. Messrs. Garrett and Novak appeared through affidavit and stated that they had been involved in numerous cases brought under 42 U.S.C. Sec . 1983 and it was their opinion that $65 to $70 per hour was the prevailing rate in civil rights cases in federal court in the Montgomery area. Novak stated that he had discussed the case with the Authority's lawyer and based on that discussion reached the opinion that the hours expended by appellants' counsel were excessive.In the early stages of the litigation over attorney's fees the appellants' counsel submitted a claim based on broad categories of work done. Late in the proceedings a more detailed reply affidavit was submitted which seemingly escaped the district court's attention. Among other things, that affidavit shows that class counsel spent only ten hours in investigating their clients' complaint, doing legal research, and preparing and drafting the complaint. No duplicate time is claimed by either attorney in the pleadings stage for any activity. Within the category of time claimed for trial preparation and court appearances, there is only three-quarters of an hour of duplication claimed. Within the discovery category, the claim by class counsel for the conduct and preparation of depositions and expert consultation is about twenty-two hours per lawyer. Of this time only twelve and one-quarter hours is claimed by both counsel for the same activity. In the area of negotiation, the affidavit shows that only time for Ms. Ivie was claimed for negotiations early in the case and only time for Mr. Varley was claimed for negotiations leading to the filing of the consent decree.B. LEGAL FRAMEWORKThe Supreme Court, after some rumination in five opinions, Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983); Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984); Riverside v. Rivera, 477 U.S. 561, 106 S.Ct. 2686, 91 L.Ed.2d 466 (1986); Pennsylvania v. Delaware Valley Citizens' Council, 478 U.S. 546, 106 S.Ct. 3088, 92 L.Ed.2d 439 (1986) (Delaware Valley Citizens' Council I ); and Pennsylvania v. Delaware Valley Citizens' Council, --- U.S. ----, 107 S.Ct. 3078, 97 L.Ed.2d 585 (1987) (Delaware Valley Citizens' Council II ), has declared that the lodestar as calculated in Hensley presumptively includes all of the twelve factors derived from the ABA Code of Professional Responsibility DR 2-106 (1980) and adopted in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974), except on rare occasions the factor of results obtained and, perhaps, enhancement for contingency. See Delaware Valley Citizens' Council I, 106 S.Ct. at 3098-3100. Justice White's decision in Delaware Valley Citizens' Council I best presents the evolution of the Court's thought and the relevant policy concerns. 106 S.Ct. at 3096-99. The Supreme Court seems to feel that the twelve factors approach of Johnson creates a theoretical attorney's fee based on subjective evaluations. See Delaware Valley Citizens' Council I, 106 S.Ct. at 3096 ("Setting attorney's fees by reference to a series of sometimes subjective factors placed unlimited discretion in trial judges and produced disparate results"). The Supreme Court elected the lodestar approach because it produces a more objective estimate and ought to be a better assurance of more even results.The decisions of this court have mirrored the evolving standards of the Supreme Court. In Popham v. City of Kennesaw, 820 F.2d 1570, 1578-80 (11th Cir.1987), our entire analysis was under the Hensley rubric. The same was true in Garner v. Wal-Mart, 807 F.2d 1536, 1539-40 (11th Cir.1987). See also Mayson v. Pierce, 806 F.2d 1556 (11th Cir.1987); Watford v. Heckler, 765 F.2d 1562 (11th Cir.1985); and Goodson v. City of Atlanta, 763 F.2d 1381 (1985). In NAACP v. City of Evergreen, 812 F.2d 1332 (11th Cir.1987) we suggested, however, that Johnson factors might be considered in terms of their influence on the lodestar amount. Id. at 1336, 1337 n. 6. In the present case, we further refine our views of the analysis required under these recent Supreme Court decisions.1. Reasonable Hourly Rate.Under Hensley, the starting point in any determination for an objective estimate of the value of a lawyer's services is to multiply hours reasonably expended by a reasonable hourly rate. 461 U.S. at 433.A reasonable hourly rate is the prevailing market rate in the relevant legal community for similar services by lawyers of reasonably comparable skills, experience, and reputation. Blum v. Stenson, 465 U.S. at 895-96 n. 11, 104 S.Ct. at 1547 n. 11. Accord, Gaines v. Dougherty County Board of Education, 775 F.2d 1565, 1571 (11th Cir.1985). The applicant bears the burden of producing satisfactory evidence that the requested rate is in line with prevailing market rates. NAACP v. City of Evergreen, 812 F.2d at 1338. Satisfactory evidence at a minimum is more than the affidavit of the attorney performing the work. Blum, 465 U.S. at 896 n. 11, 104 S.Ct. at 1547 n. 11. It should also be noted that in line with the goal of obtaining objectivity, satisfactory evidence necessarily must speak to rates actually billed and paid in similar lawsuits. Testimony that a given fee is reasonable is therefore unsatisfactory evidence of market rate. See Hensley, 461 U.S. at 439 n. 15, 103 S.Ct. at 1167 n. 15. Evidence of rates may be adduced through direct evidence of charges by lawyers under similar circumstances or by opinion evidence. The weight to be given to opinion evidence of course will be affected by the detail contained in the testimony on matters such as similarity of skill, reputation, experience, similarity of case and client, and breadth of the sample of which the expert has knowledge.We still believe that at least some of the Johnson factors have utility in establishing the hourly rate. In evaluating comparability of the market rates being attested to, the district court may wish to consider any of the Johnson factors to the extent that they suggest that comparables offered may not be relevant to the issues before the court or as they may affect the weight to be given to the comparables being offered the court. For example, it is not unusual for a law firm representing a governmental entity on an ongoing basis to charge substantially lower hourly rates than would be charged for representation in a single case. Where the facts show this, the fee charged by a government attorney is simply irrelevant to the establishment of a reasonable hourly rate for a plaintiff's civil rights lawyer.The court recognizes that few practitioners who regularly defend the poor and disadvantaged have the opportunity to bill and collect on an hourly basis. Accordingly, it may be virtually impossible to establish a prevailing market rate for such services. Therefore, fee counsel in such cases must seek out close cohorts to provide a measure. Major civil rights class action matters might be akin to plaintiff's class actions in antitrust and securities matters; cohorts might be found in suits brought by professional, business or neighborhood associations against government entities. Single plaintiff civil rights cases, of course, find analogies in employment discrimination cases and in other disputes where the representation is not the product of an ongoing relationship between the attorney and the client.As Judge Clark recognized in his dissenting opinion in Mayson, 806 F.2d at 1561, the court is seldom presented with one figure as a prevailing market rate. More typically, the fee applicant asks for rates approximating the highest charged in the community, whereas the fee opponent generally submits evidence of the lowest rate charged in any part of the community. This is no doubt in part attributable to our adversarial system. Further, as noted in Blum, 465 U.S. at 895 n. 11, 104 S.Ct. at 1547 n. 11, fee rates vary from lawyer to lawyer, case to case, and client to client. To say that the prevailing market rate is the figure at either extreme or at a precise point between the extremes is a divination that cannot be made with the same certainty as ascertaining the value of a futures contract for pork bellies or wheat on a given day. Once a district court has winnowed down the comparables offered by the parties to those which are relevant to the facts and circumstances of the case, the client, and the attorney before it, this court would still expect that there might be a range in prevailing market rates. That range is accounted for almost always by experience, skill and reputation. A closer analysis suggests that reputation and experience are usually only proxies for skill, which in a rational economic environment is the ultimate determinant of compensation level.No two lawyers possess the same skills, and no lawyer always performs at the same level of skill. Accordingly, The parties ought to provide the court with a range of market rates for lawyers of different skill levels (perhaps as measured by quality and quantity of experience) involved in similar cases with similar clients, so that the court may interpolate the prevailing market rate based on an assessment of the skill demonstrated in the case at bar.Legal skill is a several faceted concept and there is no assurance that a level of attainment in one facet means that the practitioner will or has similarly attained in all facets. Legal skill may be a function of experience, but that is not always the case. Further, legal skill has no intrinsic value unless it is used to further the client's interest, which is to obtain a just result quickly and economically.At the beginning of a case skill is manifest in the kind of judgment shown in case assessment. This is evidenced by efforts where feasible to seek dispute resolution without litigation, or, if litigation appears necessary, by the decisions on theories to be included and parties to be sued.From the beginning and throughout a case, expertise in negotiations and tactics often advances a client's cause more quickly and effectively than the sustained and methodical trench warfare of the classical litigation model.Throughout, and particularly if litigation is begun, the word "skill" incorporates the notions of organization and efficiency. An attorney of great skill organizes his thoughts, his work, and his presentation in a logical and orderly way without lost motion or false starts so that each move builds upon the last to the achievement of the goal. Organization means that discovery devices and motions are thought out and not utilized in a random and erratic way or for the mere purpose of going through established routines. Efficiency means doing well just what ought to be done and doing it in a minimum of time.The underpinning for these facets of legal skill is knowledge, knowledge of trial practice and knowledge of the substantive law. A lawyer who has to educate himself generally in either or both of these two areas may ultimately be as effective as a specialist, but he has no right to expect to be reimbursed at the same rate as a lawyer who begins his preparation with the finer points raised by the particular case.The final attribute of legal skill is perhaps the one the general public thinks of first--persuasiveness. Some clients prevail only because of the compelling merit of their case and in spite of their attorney's efforts to communicate a position. In other cases, usually close ones, the better advocate may actually sway the outcome on occasion. In the usual case, both the merits and the advocacy control the outcome. The measure of good advocacy is that the client's best positions are advanced clearly, crisply and compellingly.In summary, ordinarily there are no quotations for the prevailing market rate for a given attorney's services. Instead, the best information available to the court is usually a range of fees set by the market place, with the variants best explained by reference to an attorney's demonstrated skill. It is the job of the district court in a given case to interpolate the reasonable rate based on an analysis of the skills enumerated above which were exhibited by the attorney in the case at bar, remembering that the highest market rates are not theoretical rates for the perfect lawyer and that the lowest market rates are being earned not by imbeciles but by men and women who are proud to say they are attorneys, who are good enough to earn a livelihood from the profession, and who are at least well enough qualified to be admitted to the bar.2. Hours Reasonably Expended.The next step in the computation of the lodestar is the ascertainment of reasonable hours. Hensley teaches that "excessive, redundant or otherwise unnecessary" hours should be excluded from the amount claimed. 461 U.S. at 434, 103 S.Ct. at 1939-40. In other words, the Supreme Court requires fee applicants to exercise "billing judgment." Id. at 437, 103 S.Ct. at 1941. This must necessarily mean that the hours excluded are those that would be unreasonable to bill to a client and therefore to one's adversary irrespective of the skill, reputation or experience of counsel. Id. at 434, 103 S.Ct. at 1939. If it were otherwise, an inexperienced or unskillful attorney would face a double penalty. First, his hourly rate would be lowered and second, his time reduced.Excluding excessive or otherwise unnecessary hours under the rubric of "billing judgment" means that a lawyer may not be compensated for hours spent on activities for which he would not bill a client of means who was seriously intent on vindicating similar rights, recognizing that in the private sector the economically rational person engages in some cost benefit analysis. In the final analysis, exclusions for excessive or unnecessary work on given tasks must be left to the discretion of the district court. The district court will, however, no doubt be benefited by evidence of prevailing views among practitioners in the area on such subjects. Generalized statements that the time spent was reasonable or unreasonable of course are not particularly helpful and not entitled to much weight. See Hensley, 461 U.S. at 439 n. 15, 103 S.Ct. at 1942 n. 15. As the district court must be reasonably precise in excluding hours thought to be unreasonable or unnecessary, so should be the objections and proof from fee opponents.In making adjustments to hours claimed, the district court is charged with deducting for redundant hours. Redundant hours generally occur where more than one attorney represents a client. There is nothing inherently unreasonable about a client having multiple attorneys, and they may all be compensated if they are not unreasonably doing the same work and are being compensated for the distinct contribution of each lawyer. Johnson v. University College of University of Alabama in Birmingham, 706 F.2d 1205, 1208 (11th Cir.1983), cert. denied,Try vLex for FREE for 3 days
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