District Courts "Must Show Their Work" and Provide Detailed Figures when Deciding Fee Awards

Posted on February 12, 2013 by Gary A. Bresee

In Padgett v. Loventhal, the Ninth Circuit Court of Appeals decided District Courts must explain how they reduce requests for fees and costs from partially victorious plaintiffs.  

Joseph and Darla Padgett filed a civil rights complaint against eight defendants arising from a dispute with the City of Monte Sereno, California, and enforcement of a fence height ordinance. Plaintiffs claimed violation of their First Amendment rights to free speech and their Fourteenth Amendment rights not to be subjected to selective enforcement of the law (as well as other claims).  

Defendants chipped away at the claims and by the time of trial only two claims survived and only two defendants remained.  By the time it reached the jury only one claim remained.  Ultimately, only one plaintiff prevailed on one claim against one defendant.  The jury awarded $1 in nominal damages and $200,000 in punitive damages. 

The prevailing plaintiff then sought attorneys' fees under 42 U.S.C. section 1988. Judge Ware properly held that some of his claims were not successful, so fees for the entire litigation may be excessive. The District Court eventually reduced plaintiff's $3.2 million fee request to $500,000, and reduced the $900,000 request for costs to $100,000. 

However, because the District Court did not explain how it determined these figures, the Ninth Circuit panel was unable to review the court's reasoning and vacated and remanded for a more complete explanation. While the lower court properly recognized that plaintiff did not prevail on the vast majority of his claims, without a calculation, the appellate panel was unable to review the decision for an abuse of discretion. 

We have long held that district courts must show their work when calculating attorneys fees," citing several previous cases for that conclusion.

Moreover, the lower court must "specify reasons" for not awarding costs. This rule is particularly important when, as here, there are many overlapping claims and a very mixed result. In these types of cases, work often bears on multiple claims, only some of which are successful. Fees for work which relate only to unsuccessful claims should not be awarded. The difficult test, of course, is work which proves to be beneficial to both successful claims and unsuccessful claims. Generally, the court should award fees for work contributing to the successful result even if the work is also useful to an unsuccessful claim. Finally, the fees must also be reasonable. 

Because the lower court did not show it's work, the court vacated the award of both costs and fees and remanded for an explanation of how it used the lodestar method to reduce Padgett's fees and costs.

Dividing Attorneys' Fees Pro Rata by Number of Claims May Not be Sufficient

Posted on January 21, 2011 by Gary A. Bresee

In Harris v. Maricopa Count Superior Court, the Ninth Circuit remanded an attorneys' fee award back to the District Court when defendants and the lower court allocated fees to the prevailing defendant by determining which claims carried the right to fees to the prevailing defendant, and then using a pro rata approach to divide some of the fees by the number of claims.  The majority opinion held that this was improper. 

Judge Bybee's dissent strikes to the heart of the matter.  Does the "new rule" from the majority render a defendant's ability to recovery attorneys' fees almost impossible?

Vernon Harris brought a civil rights action against the Superior Court of Maricopa County alleging gender and race discrimination as well as state law claims of breach of contract and defamation.  Harris' claims were ultimately dismissed when defendant's pre-trial summary adjudication motions were granted. 

The court held it improper to allocate the general fees across the ten claims and then determining one-tenth of the fees were incurred for each claim.  This strikes at the heart of the civil rights policy. which is to encourage victims of discrimination to seek judicial relief and avoid self-help actions.  First, if defendant is seeking fees in a civil rights case, exceptional circumstances must be demonstrated.  Then, only the amount of attorneys' fees attributable exclusively to a plaintiffs' frivolous claims will be awarded.  When, as here, both non-frivolous and frivolous claims were brought, the burden rests with the fee claimant -- the defendant -- to show certain work performed which would not have been necessary but for the inclusion of the frivolous claims.  The Ninth Circuit then acknowledged that when, again as here, the complaint lists various legal theories all based on essentially the same facts, the burden on the defendant to establish which specific fees were attributable solely to the frivolous claims is, from a practical viewpoint, extremely difficult to prove.  At any rate, the Ninth Circuit held the burden is not carried by allocating fees in the pro rata fashion which was employed here.

I do not believe the burden is impossible, as Judge Bybee has intimated in his dissent.  But the amount of specificity is certainly important to a prevailing party, fee claimant defendant.

Federal Judge Reduces Fees Requested by 75%

Posted on August 24, 2009 by Gary A. Bresee

In Mendez v. The County of San Bernardino, US District Court, Central District of California, (a case in which I submitted a declaration in opposition to the fees requested), The Honorable Judge Wilson found the initial lodestar of $696,923 should be reduced by 75%.  As such, the Court granted Plaintiffs' motion for attorneys fees, but awarded fees in the amount of $174,230.

In an action against the San Bernardino County Sherriff's Department for false arrest and an illegal seach and seizure, many of the claims were dismissed at the summary adjudication stage.  Plaintiff eventually obtained a jury verdict for a nominal $2 in compensatory damages and $5,000 in punitives for the claims which survived.  

The first federal judge denied the fees altogether finding them to be so excessive that they failed to pass muster under the "shocks the conscience" test.  The Court denied the fees altogether.  The Ninth Circuit then reversed and remanded back to the District Court for another determination of the Plaintiff's reasonable fees.  Mendez v. The County of San Bernardino, 540 F.3d 1109 (9th Cir. 2008).

On remand, Plaintiff sought approximately $837,000 in fees and $49,000 in costs.  Judge Wilson performed an excellent analysis of the fees requested, finding:

1. A 10% reduction is appropriate for the block billed entries, which made it difficult to determine the amounts billed for some activities, and citing other Ninth Circuit authority for the percentage reduction;

2. The firm's use of 2005 hourly rates was reasonable due to the delay in payment, and since they may be overcompensated for the 2003 and 2004 time, but undercompensated for the time incurred 2006 - 2009;

3. However, the Court reduced the hourly rates (e.g., from $550 to $400 per hour for some partners) due to the lack of evidence -- other than counsel's own affidavits -- regarding the prevailing rates for similar work in the community.

Thus, the initial requested lodestar of $837,000 was reduced to $696,923.  The Court then considered additional Kerr factors (Kerr v. Screen Extras Guild, Inc., 526 F.2d 67 (9th Cir. 1975) to find, inter alia:

A.  Six individuals, including two partners and two associates, billing a total of 2,064 hours, was deemed excessive for a straightforward civil rights case; and

B.  The award of $2 in nominal damages and $5,000 in punitive damages demonstrated plaintiffs' limited success on the merits.

The Court therefore concluded the $696,923 lodestar should be reduced by 75%.  Plaintiffs were awarded fees in the amount of $174,230.

Fees Must Be Allocated Between Successful and Unsuccessful Claims in the Pigford Litigation

Posted on May 15, 2009 by Gary A. Bresee

The Pigford litigation involved a group of African American farmers who alleged the U.S. Department of Agriculture denied them farm loans and otherwise discriminated against them based upon their race.  One of those farmers, Robert Homes, was awarded $300,000 against the USDA.  However, Mr. Homes' was not as successsful in his fee request filed under the Equal Credit Opportunity and Equal Access to Justice Acts.  His $192,000 fee claim was recently rejected by Judge Paul Friedman of the U.S. District Court for the District of Columbia. 

The court reasoned that Mr. Homes alleged eleven distinct claims, but only succeeded on five.  And since each claim was based on a separate set of facts, they were unrelated.  Homes' lawyers were allegedly seeking time expended on some of the unsuccessful claims, so the court rejected the request.  Judge Friedman further explained:

[S]imply reducing Covington’s fee by a fraction corresponding to the number of unsuccessful claims is not likely to result in a fair and reasonable fee for Covington’s service.

Comment:  This is another good example of how fees could and should be allocated between claims.  Whether you are the party requesting fees, or opposing the fee application, depending upon the statutory scheme, one should not rely on simple ratios based upon successful vs. unsuccessful claims (in this case, 5/11).  Consider retaining an expert to analyze the specific billing entries, and allocate the time entries to work performed on only those claims upon which the party succeeded.