BIERY v. USA
Filing
173
UNPUBLISHED OPINION: 126 The Plaintiffs' Motion for Partial Summary Judgment is DENIED; and Subject to the limitations set forth in the opinion the Defendant's 149 Cross Motion is GRANTED. Signed by Judge Nancy B. Firestone. (dpk) Copy to parties.
In the United States Court of Federal Claims
NOT FOR PUBLICATION
No. 07-693L and No. 07-675L
CONSOLIDATED
(Filed: November 27, 2012)
DOROTHY L. BIERY, et al.,
and
JERRAMY and ERIN
PANKRATZ, et al.,
Plaintiffs,
v.
THE UNITED STATES,
Defendant.
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OPINION
Pending before the court are the parties’ cross-motions for partial summary
judgment on the proper methodology for determining the plaintiffs’ attorneys’ fees in this
Rails to Trails case arising from the creation of recreational trails in Butler and Reno
Counties, Kansas. The court previously ruled that the plaintiffs are entitled to “just
compensation” under the Fifth Amendment because the trail use authorized by the federal
government deprived them of a property interest. See Biery v. United States, 99 Fed. Cl.
565, 580 (2011). Under the terms of the Uniform Relocation Assistance and Real
1
Property Act of 1970, 42 U.S.C. § 4654(c) (2006) (“URA”), 1 the plaintiffs are also
entitled to reimbursement of reasonable attorneys’ fees. The parties agree that the
plaintiffs’ attorneys’ fees should be set based on the lodestar method, which multiplies
the attorneys’ reasonable hourly rates by their reasonable hours expended on the
litigation. The plaintiffs argue that in setting the reasonable hourly rate under the
lodestar, the court should use the “forum rate.” More specifically, they contend that the
court should use their firm’s “national” hourly rates or, alternately, their firm’s
Washington, D.C. rates, on the grounds that the case was filed in the United States Court
of Federal Claims in Washington, D.C. The defendant (“United States” or
“government”) agrees that the court should employ the lodestar method but urges the
court to reject the plaintiffs’ proposed forum rates and instead to apply an hourly rate
based on the prevailing attorneys’ fee rate in St. Louis, Missouri. 2 The government
argues that an exception to the forum rate should be applied because the plaintiffs’
attorneys performed the bulk of their work in St. Louis where the prevailing attorneys’
fee rates are significantly lower than those in Washington, D.C. The government also
1
The relevant portion of the URA provides in part:
The court rendering a judgment for the plaintiff in a proceeding . . . , awarding
compensation for the taking of property by a Federal agency . . . , shall determine
and award or allow to such plaintiff, as a part of such judgment or settlement,
such sum as will in the opinion of the court . . . reimburse such plaintiff for his
reasonable costs, disbursements, and expenses, including reasonable attorney,
appraisal, and engineering fees, actually incurred because of such proceeding.
42 U.S.C. § 4654(c).
2
The court recognizes that plaintiffs’ Missouri-based attorneys are actually located in Clayton,
just outside of St. Louis. Both parties consider this market as part of St. Louis and so will the
court.
2
argues that the court should authorize further reductions, if applicable, to the St. Louis
rate. Finally, the government argues that in calculating the plaintiffs’ rates, the court
should use the rates that prevailed during the course of the litigation rather than those
current at the end of the case. The plaintiffs take a contrary view on both of these issues.
I.
Background
On September 20, 2011, the court entered an order instructing the plaintiffs to file
a motion for partial summary judgment to determine the method by which to calculate
attorneys’ fees and costs under the URA if the parties could not otherwise agree on the
appropriate method under that statute. See Order, Sept. 20, 2011, ECF No. 112. The
purpose of this order was to separate the issue of fees and costs into two sub-issues: 1)
the methodology by which to calculate attorneys’ fees and costs and 2) the ultimate
amount of attorneys’ fees and costs due to the plaintiffs’ counsel from the United States.
See Joint Status Rep. 4-6, Sept. 19, 2011, ECF No. 111. The parties subsequently filed
cross-motions for partial summary judgment on the first issue along with associated
responses. See Pls.’ Cross-Mot. Partial Summ. J., ECF No. 126; Def.’s Cross-Mot.
Partial Summ. J., ECF No. 149; Pls.’ Resp., ECF No. 158; Def.’s Reply, ECF No. 164.
II.
Standard of Review
Summary judgment is appropriate only if “there is no genuine issue as to any
material fact and . . . the moving party is entitled to a judgment as a matter of law.”
RCFC 56(a); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-49 (1986). The
moving party carries the burden of establishing that there exists no genuine issue of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). A “genuine”
3
dispute is one that “may reasonably be resolved in favor of either party.” Anderson, 477
U.S. at 250. A material fact is one that “might affect the outcome of the suit under the
governing law.” Id. at 248. In considering the existence of a genuine issue of material
fact, a court must draw all inferences in the light most favorable to the non-moving party.
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). If no
rational trier of fact could find for the non-moving party, a genuine issue of material fact
does not exist and the motion for summary judgment may be granted. Id. With respect
to cross-motions for summary judgment, each motion is evaluated on its own merits and
reasonable inferences are resolved against the party whose motion is being considered.
Marriot Intern. Resorts, L.P. v. United States, 586 F.3d 962, 969-70 (Fed. Cir. 2009).
“The fact that both parties have moved for summary judgment does not mean that the
court must grant judgment as a matter of law for one side or the other; summary
judgment in favor of either party is not proper if disputes remain as to material facts.”
Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1391 (Fed. Cir. 1987).
Summary judgment is particularly appropriate where the issue decided is fundamentally a
legal issue. Huskey v. Trujillo, 302 F.3d 1307, 1310 (Fed. Cir. 2002) (citing Dana Corp
v. United States, 174 F.3d 1344, 1347 (Fed. Cir. 1999) (“[s]ummary judgment was
appropriate here because no material facts were disputed, many being stipulated, and the
only disputed issues were issues of law.”)).
4
III.
Discussion
A. The Lodestar Method Serves as the Analytical Framework for Determining
Attorneys’ Fees under the URA.
It is well settled in the Federal Circuit that the lodestar method is the preferred
means for calculating attorneys’ fees under fee-shifting statutes such as the URA. See,
e.g., Bywaters v. United States, 670 F.3d 1221, 1228-29 (Fed. Cir. 2012) (approving
district court’s general use of the lodestar); Avera v. Sec’y of Health and Human Servs.,
515 F.3d 1343, 1347-48 (Fed. Cir. 2008) (applying the lodestar approach in a Vaccine
Act case). As the Supreme Court has recently explained, the lodestar method is “readily
administrable” and “objective,” producing “reasonably predictable results.” Perdue v.
Kenny A. ex rel. Winn, 130 S. Ct. 1662, 1672 (2010); see also Hensley v. Eckerhart, 461
U.S. 424, 433 (1983) (noting that the lodestar “provides an objective basis on which to
make an initial estimate of the value of a lawyer’s services”). At its heart, the lodestar is
a simple calculation wherein the court determines attorneys’ fees by multiplying the
attorneys’ reasonable number of hours expended on the litigation by the reasonable
hourly rate charged. Blum v. Stenson, 465 U.S. 886, 888 (1984). The hourly rates are to
be calculated “according to the prevailing market rates in the relevant community.” Id. at
895. The rates should be in line with those of other attorneys in the “relevant
community” offering similar services with “reasonably comparable skill, experience, and
reputation.” Id. at 896 n.11.
5
For purposes of determining the “relevant community,” the Federal Circuit has
adopted the “forum rule.” 3 See Avera, 515 F.3d at 1348 (“[T]he courts of appeals have
uniformly concluded that, in general, forum rates should be used to calculate attorneys’
fee awards under other fee-shifting statutes.”). Under the “forum rule,” the region in
which the trial court is located typically defines the “relevant community” for purposes of
identifying reasonable hourly rates under the lodestar method. Bywaters, 670 F.3d at
1233 (noting that a court should generally calculate the lodestar based on rates prevailing
in the forum court’s geographic location) (citing Avera, 515 F.3d at 1348); Donnell v.
United States, 682 F.2d 240, 251-52 (D.C. Cir. 1982) (“[T]he proper rule is that the
relevant community is the one in which the district court sits.”). The Federal Circuit has
recognized, however, that there may be situations in which the “relevant community,” for
purposes of determining reasonable hourly rates, is where the attorney practices rather
than the forum in which the court sits. Specifically, in Avera, 515 F.3d at 1350, the
Federal Circuit adopted and applied an exception to the forum rule recognized by the
D.C. Circuit Court of Appeals in Davis County Solid Waste Management and Energy
Recovery Special Service District v. United States Environmental Protection Agency,
169 F.3d 755, 758 (D.C. Cir. 1999). In Davis County, the D.C. Circuit held that where
3
Avera involved a Cheyenne, Wyoming-based attorney seeking Washington, D.C. attorneys’ fee
rates under the fee-shifting provisions of the National Childhood Vaccine Injury Act, 42 U.S.C. §
300aa-15(e)(1) (“Vaccine Act”). 515 F.3d at 1346. The Circuit noted that the Vaccine Act’s
fee-shifting provision does not specify what geographic location to use for the purposes of the
lodestar calculation. Id. at 1348. The Court cited cases from other circuits that applied the
forum rule in connection to other fee-shifting statutes, noting that they frequently use the same
phrase—“reasonable attorneys’ fees”—suggesting that the forum rule and its exceptions should
be statute agnostic absent some reason to believe otherwise. 515 F.3d at 1348. The URA uses
similar language. See supra note 1.
6
the bulk of the attorney’s work is done outside of Washington, D.C. and in a locality
where there is a substantially lower prevailing rate as compared to the prevailing rate in
Washington, D.C., the attorney’s local rate, and not the forum rate, should be used. 169
F.3d at 758. The Federal Circuit has applied the Davis County exception in several
attorneys’ fees cases arising under the National Childhood Vaccine Injury Act, 42 U.S.C.
§ 300aa-1 et seq. (2006) (“Vaccine Act”). See Hall v. Sec’y of Health and Human
Servs., 640 F.3d 1351, 1355 (Fed. Cir. 2011); Masias v. Sec’y of Health and Human
Servs., 634 F.3d 1283, 1288 (Fed. Cir. 2011). The Federal Circuit has also recognized
the possible application of the Davis County exception when calculating fees under the
URA in a Rails to Trails case. Bywaters v. United States, 670 F.3d 1221, 1233-34 (Fed.
Cir. 2012).
While, as noted above, both parties agree that the court should follow the lodestar
approach, they disagree as to how the court should determine the “relevant community”
for purposes of setting fees. The plaintiffs contend that the court should simply apply the
Federal Circuit’s “forum rule” and acknowledge that attorneys’ fees in this case should
be calculated using the rates Arent Fox, the plaintiffs’ attorneys’ law firm, charges in
Washington, D.C. and elsewhere as a “national” firm. 4 The plaintiffs contend that Arent
4
The plaintiffs initially engaged counsel at Lathrop & Gage, a law firm based in Kansas City,
Missouri with an office location in St. Louis, among other cities. Def.’s Reply at 3 n.2. During
the course of this litigation, plaintiffs’ counsel moved to Arent Fox, a law firm based in
Washington, D.C. with an office in St. Louis. Pls.’ Resp. at 14.
7
Fox’s “national” firm rates fall within the range of rates typically charged by
Washington, D.C. firms with comparable skill and expertise. 5
The United States argues against adoption of the plaintiffs’ “national” firm rate as
the appropriate forum rate. According to the government, the Federal Circuit in
Bywaters specifically recognized that, in Rails to Trails cases, the forum rate may be
subject to the Davis County exception wherein the court will depart from the usual forum
rate if the bulk of the work is performed outside of Washington, D.C. and the area where
the work is performed has a substantially lower attorneys’ fees rate than the prevailing
rate in Washington, D.C. The government argues that if the billing records in this case
confirm that the bulk of legal work was performed in St. Louis, the attorneys’ fees should
be based on St. Louis rates because St. Louis rates are significantly lower than those in
Washington, D.C.
B. While “National” Law Firm Rates may Generally be Appropriate for Use
in the Lodestar Calculation, the Davis County Exception will be Applied if
the Bulk of the Work was Performed in St. Louis because the Court Finds
that the Prevailing St. Louis Rates are “Substantially Lower” than the
Prevailing Rates in Washington, D.C.
In support of their request for use of their “national firm rate” as the appropriate
rate, the plaintiffs have submitted the expert declaration of Dr. Laura Malowane, Vice
5
The plaintiffs originally sought adoption of Arent Fox’s “national” fee rate for this Rails to
Trails case without regard to their attorneys’ law firm’s location or where the attorneys
performed their work. Pls.’ Cross-Mot. Summ. J. at 25-28. The plaintiffs argued that counsel
should be reimbursed based upon a “national market” for legal counsel because the Court of
Federal Claims is a court with nationwide jurisdiction and the issues associated with Rails to
Trails litigations are particularly unique. Id. It became clear at oral argument, however, that
plaintiffs had refined their position, instead arguing that the court should use the “national rates”
charged by their law firm not based on a “national market” but rather based on the “national
rate” charged by firms located in this local forum, Washington, D.C.
8
President of Economists Incorporated, an economic consulting firm in Washington, D.C.
Dr. Malowane holds a Ph.D. in Economics from Princeton University and was asked to
provide an opinion identifying the relevant market for determining fees in this case. She
was also asked to determine whether the billing rates of the plaintiffs’ attorneys are
reasonable given current market rates. Dr. Malowane opined that in cases needing
specialized counsel, like the present case, attorneys should be reimbursed based on their
law firms’ “national rates.” Malowane Decl. at 4, ECF No. 127-21. Relying upon the
2010 National Law Journal’s Annual Survey of the Nation’s Largest Law Firms, which
includes Arent Fox (135th) and Lathrop & Gage (150th), she concluded that Arent Fox
has a “national” hourly partner rate of between $705 and $706 6 and hourly associate rates
between $375 and $430. Id. at 5. Dr. Malowane determined that these rates are within
the range of rates charged by comparable firms based on size and location (she identified
Arent Fox as having its principal location in Washington, D.C.). Id. at 5-6. Specifically,
Dr. Malowane concluded that “national” firms based in Washington, D.C. have an hourly
rate range between $195 and $990 for partners and between $140 and $550 for
associates. Id. Dr. Malowane thus concluded that the plaintiffs’ rates for their attorneys
at Arent Fox fall reasonably within the range of rates for comparable “national” firms.
Dr. Malowane also opined that “national” firms headquartered in Kansas City,
Missouri would be most comparable for determining reasonable fees for attorney work
performed by Lathrop & Gage, the firm initially hired by the plaintiffs for this case. Id.
6
The government indicated at oral argument that it accepts this quoted rate as the rate in
Washington, D.C. for the purposes of the Davis County exception.
9
at 5. Since she did not have sufficient data to determine reasonable “national” rates using
Kansas City law firms exclusively, Dr. Malowane selected firms based in St. Louis as
well as Kansas City as the relevant markets for comparing “national” rates. Id. She
noted that the requested “national” rate of the Lathrop & Gage “of counsel” attorney,
who had 29 years of experience and previously worked on this case, was reasonable
because the requested rate of $450 per hour fell within the range of between $180 and
$804 for hourly rates of partners at comparable “national” firms based in St. Louis. Id. at
6. Based on Dr. Malowane’s affidavit, the plaintiffs argue that the “national” rates
charged by Arent Fox for the attorneys currently associated with that firm and those for
Lathrop & Gage for the attorney associated with that firm are each within the prevailing
rate ranges for both cities. As such, the plaintiffs contend, their “national” rates are
reasonable and adequately reflect the fair market rates of this case’s forum, Washington,
D.C.
The plaintiffs further contend that the government’s arguments in favor of
applying the Davis County exception 7 to depart from Washington, D.C. forum rates in
7
The plaintiffs provide a list of reasons as to why the court should distinguish this case from
Davis County:
This case is different from Davis County in every fundamental respect. (1) Here,
unlike Davis County, the landowners are represented by a Washington D.C.-based
law firm, not a firm in Salt Lake City. (2) Here, unlike Davis County, these
landowners and their law firm did not “contract” to bill their time at hourly rates
70% below the prevailing hourly rates in the forum. (3) This case, unlike Davis
County, is not one in which “virtually all of the work was performed” out of the
forum. (4) Here, unlike Davis County, “limiting [the landowners’] lawyers to less
than their usual rates would present problems for private parties seeking help.”
And (5) Here, unlike Davis County, the supposed “home market rates” are not
significantly lower than Washington D.C. rates for comparable work.
10
favor of the local St. Louis rate should be rejected. The plaintiffs argue that the forum
rate is “presumptive” and that any party seeking to deviate from the forum rate bears the
burden of proving that such a deviation is necessary. Pls.’ Resp. at 15 (citing Bywaters,
670 F.3d at 1232-33). Here, the plaintiffs argue, the government has not met its burden,
under Davis County, of demonstrating that the prevailing rates for comparable firms in
St. Louis are “very significantly lower” than rates for attorneys in Washington, D.C., the
forum in this case. The plaintiffs argue that Dr. Malowane’s affidavit shows that partners
in Washington, D.C. charge rates of between $300 and $990 an hour while partners in St.
Louis typically charge between $230 and $804 per hour. Pls.’ Resp. at 17; see also
Malowane Decl. at 5-6. The plaintiffs argue that this evidence demonstrates that
attorneys’ fee rates in St. Louis are not “significantly lower” than the rates identified for
Washington, D.C. Pls.’ Resp. at 17. Moreover, they proffer the affidavit of Alan
Norman, an intellectual property attorney who works for the St. Louis-based law firm
Thompson Coburn, to underscore that the requested “national” rates would be reasonable
to attract comparable attorneys in St. Louis or Washington, D.C. Norman Decl. at 1,
ECF No. 158-3. Mr. Norman states his belief that law firms with offices in St. Louis,
such as Arent Fox and Lathrop & Gage, would require rates comparable to those cited by
Dr. Malowane and that significantly lower rates would not attract comparable firms for
comparable litigation. Id. at 4.
Pls.’ Resp. at 17 (emphasis in original) (citations omitted).
11
The government argues in response that the court should apply the Davis County
exception because the evidence will show that the bulk of the work was performed in St.
Louis and that, contrary to the plaintiffs’ contention, attorneys’ fee rates are significantly
lower in St. Louis than in Washington, D.C. 8 Def.’s Cross-Mot. Summ. J. at 17. The
government points to Dr. Malowane’s findings, which indicate that, based on “national”
law firm data, the Washington, D.C hourly rate charged by Arent Fox partners ($705$706) is $500 more than the low range typically charged by “national” firms located in
St. Louis ($230) and only $100 less than the absolute high end of the St. Louis rate range
($804). Def.’s Reply at 16 (noting that the range provided for St. Louis is so wide as to
be rendered “completely meaningless”). In addition, the government argues that a survey
of six recent cases litigated in the St. Louis area demonstrates that attorneys’ fees in the
St. Louis area are generally between $250 and $380 per hour for partners and between
$150 and $250 per hour for associates. 9 Def.’s Cross-Mot. Summ. J. at 23-24. These
amounts are significantly less than $706 an hour. Thus, the government argues, the St.
Louis cases demonstrate that the plaintiffs are seeking fees that are potentially more than
twice the rate charged by comparable attorneys in St. Louis. Def.’s Cross-Mot. Summ. J.
at 23-25. The government concludes that the evidence established by the survey of six
8
The government argues that currently available billing information, through April 15, 2009,
demonstrates that, according to the government, over 90 percent of the work performed by
plaintiffs’ counsel was performed by attorneys based in St. Louis. Def.’s Cross-Mot. Summ. J.
at 20-21 (citing billing data provided by the plaintiffs in communications between the parties).
9
The court also notes plaintiffs’ objections regarding use of these data, recognizing that the
subject matter and experience of each of these attorneys do not necessarily line up with those of
the attorneys in this case. See Pls.’ Resp. at 20-22.
12
recent St. Louis cases is confirmed by a 2011 Missouri Bar Economic survey, which
shows that the vast majority of attorneys in St. Louis County (87 percent) and St. Louis
City (80 percent) charge an hourly rate of between $101 and $350. 10 Id. at 28.
According to the defendant, these data establish that St. Louis rates are very significantly
lower than the $706 rate the plaintiffs seek for partners.
As an initial matter, the court agrees with the government that the Davis County
exception is a relevant and even mandatory gloss on the forum rule analysis in the
Federal Circuit. Hall v. Sec’y of Health and Human Servs., 640 F.3d 1351, 1356 (noting
“failure to apply the Davis County exception . . . would be incorrect as a matter of law.”).
The court must therefore determine whether, under the two-part Davis County exception,
the forum rate of Washington, D.C. or the local rate of St. Louis, Missouri should apply
in this case. Given the evidence before the court, the court agrees with the government
that to the extent the evidence establishes that the majority of the hours billed were
incurred in St. Louis, the Davis County exception will apply.
As noted above, under the Davis County exception, the court will use the local rate,
rather than the forum rate, if there is a very significant difference between the two rates.
Here the existing evidence on rates establishes that there is a very significant difference
in forum rates charged for comparable legal services between Washington, D.C. and St.
Louis. In Hall v. Secretary of Health and Human Services, the Federal Circuit declined
10
The plaintiffs object to the government’s use of this survey, noting that charts presented by the
government are taken outside of the context of the entire report and do not disaggregate the data
by law firm type, practice area, or experience. Pls.’ Resp. at 23. The court finds that the
government’s use of the survey is proper as its disaggregation of data by county and rate charged
provides context as to the rates generally charged by trial attorneys in Missouri.
13
to set a rule defining what constitutes a “very significant” difference between local and
forum hourly rates. 640 F.3d at 1357 (opining that such a rule would be “stifling and
impractical”). The Hall court did, however, cite with approval a set of cases that found
that a 46 to 60 percent difference between the forum and local rates represented “very
significant” differences. 11 Id. Here, the court finds, based on Dr. Malowane’s data, that
while the requested forum rate of $706 is in the mid-range for “national” law firms with
principal offices in Washington, D.C., the rate is at the very top of the St. Louis range
($804 per hour) for “national” firms based in St. Louis. The plaintiffs’ own requested
rates highlight the significant differences between the two forums. Specifically, the
requested $706 per hour for Washington, D.C.-based Arent Fox is more than 50 percent
higher, using the same approach to calculation as in Hall, than the $450 per hour rate
sought for the experienced “of counsel” attorney at Kansas City-based Lathrop & Gage.
In fact, the $450 figure would still put the plaintiffs’ attorneys roughly within the top 15
percent of all attorneys practicing in St. Louis according to the Missouri Bar Economics
Survey cited by the government. The plaintiffs’ requested “national” rate of between
$705 and $706 would place their attorneys in the top 0.9 percent in the City of St. Louis
and in the top 0.5 percent in St. Louis County. This counsels the court to give little
weight to Mr. Norman’s affidavit and to conclude that such a rate would at best be an
outlier for St. Louis. This further supports the government’s contention that prevailing
11
The Hall court used calculations that determined the percentage difference between forum
rates by calculating the difference between the lower local hourly rate and the higher forum
hourly rate and then dividing that figure by the local hourly rate. 640 F.3d 1357.
14
St. Louis rates are significantly lower than those in Washington, D.C. (and by extension
the requested “national” rates) for purposes of the Davis County exception.
In light of the evidence presented, the court concludes that, assuming the bulk of the
hours worked were incurred in St. Louis, the plaintiffs will be entitled to attorneys’ fees
based on the rates for attorneys of comparable skill and experience who practice in St.
Louis, Missouri. 12 The court cannot, however, without further evidence, rule on specific
reasonable rates for St. Louis.
C. Only upon Proof of Extraordinary Circumstances will the Court Consider
Using the Johnson Factors to Adjust the Lodestar.
The defendant argues that the court, in determining reasonable attorneys’ fees,
should also consider making further adjustments based on twelve factors (“Johnson
factors”) established in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717719 (5th Cir. 1974). 13 Def.’s Cross-Mot. Partial Summ. J. at 7-11. The government
contends that the lodestar calculation is only the “initial” estimate of reasonable
12
Obviously, if the bulk of the hours were incurred in Washington, D.C., the government will
not have met its burden with regard to the first prong of the Davis County exception and the
court will use Washington, D.C. rates in the lodestar calculation.
13
The twelve Johnson factors used to determine a reasonable attorneys’ fee are:
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3)
the skill requisite to perform the legal service properly; (4) the preclusion of other
employment by the attorney due to acceptance of the case; (5) the customary fee;
(6) whether the fee is fixed or contingent; (7) time limitations imposed by the
client or the circumstances; (8) the amount involved and the results obtained; (9)
the experience, reputation, and ability of the attorneys; (10) the “undesirability” of
the case; (11) the nature and length of the professional relationship with the client;
and (12) awards in similar cases. Johnson, 488 F.2d at 717-19.
Bywaters, 670 F.3d at 1229 n.5.
15
attorneys’ fees. Id. at 7 (citing Blum, 465 U.S. at 888). Specifically, the government
argues, that courts may adjust the lodestar calculation by integrating the Johnson factors
into the lodestar analysis during the pre-calculation phase if the factors are not otherwise
“subsumed within the initial calculation of hours reasonably expended at a reasonable
hourly rate.” Hensley, 461 U.S. at 434 n.9. The government cites, for example, the
recent holding in Bywaters, in which the Federal Circuit, while rejecting arguments that
adjustments may be made after the lodestar calculation, 670 F.3d at 1231-32, identified
certain Johnson factors that may be incorporated into the pre-lodestar calculation through
adjustments to attorneys’ rates and hours worked. Here, the government argues that the
court should not foreclose the possibility of making adjustments to the plaintiffs’ fee
calculations if it appears from the plaintiffs’ billing records that such adjustments are
appropriate. Def.’s Cross-Mot. Partial Summ. J. at 10 (“Defendant is unable to address
all of the pertinent factors because Plaintiffs have not yet produced any billing records or
other details on its fee request in this case.”).
The plaintiffs argue that any use of the Johnson factors is “outdated and no longer
valid,” Pls.’ Resp. at 25, and thus the court should not consider any adjustments to the
basic lodestar calculation. Specifically, the plaintiffs argue that the Supreme Court, in
Perdue v. Kenny A. ex rel. Winn, 130 S. Ct. 1662 (2010), held that fees should be based
on the lodestar method and not the Johnson approach. Id. at 1672. The Federal Circuit in
Bywaters noted that in Perdue the Supreme Court limited the situations in which a court
may alter the lodestar calculation based on external factors. 670 F.3d at 1229
(“Adjustments [to the lodestar] are warranted only where the lodestar figure fails to take
16
into account a relevant consideration.”). The plaintiffs contend that the Federal Circuit
made clear in Bywaters that adjustments to the lodestar approach are “proper only in
certain ‘rare’ and ‘exceptional’ cases, supported by both ‘specific evidence’ on the record
and detailed findings by the lower courts.” Bywaters, 670 F.3d at 1229 (citing
Pennsylvania v. Del. Valley Citizens’ Council for Clean Air, 478 U.S. 546, 565 (1986)).
The plaintiffs argue that there is no evidence to support adjustments in this case based on
the Johnson factors.
The court concludes, based on the most recent case law, that the parties may seek
to adjust the fees and hours submitted to the lodestar only if that party can demonstrate
that there are “rare” and “exceptional” circumstances justifying such an adjustment.
Perdue, 130 S. Ct. at 1673 (citations omitted). The party seeking to adjust the lodestar
will bear the burden of persuading the court that the lodestar is unreasonable. Perdue,
130 S. Ct. at 1669. Any adjustment to fees in advance of applying the lodestar fee rate
will require specific evidence that the lodestar does not incorporate a factor necessary for
determining a reasonable fee. Id. at 1673 (noting that there is a “strong presumption” that
the lodestar is reasonable). In sum, while the court is not foreclosing an offer of proof for
an adjustment to the lodestar prior to the calculation, the likelihood of approving any
adjustment is quite small.
D. The Court will Calculate the Attorneys’ Fee Award Based on Historical
Rates because the No-Interest Rule Bars Recovery of Delay Compensation
without Express Waiver of Sovereign Immunity.
The government also argues that in reimbursing reasonable fees, the court should
require the plaintiffs’ counsel to use the historical rates at which they would have charged
17
the plaintiff-landowners had fees been paid during the course of litigation rather than at
the end of litigation. 14 Def.’s Cross-Mot. Partial Summ. J. at 42. The government
contends that if the plaintiffs are allowed to recover fees based on rates current at the end
of the litigation, they would be in effect collecting “interest” on those fees, a practice
which is not authorized under the URA and thus barred by principles of sovereign
immunity . Id. (citing Library of Congress. v. Shaw, 478 U.S. 310, 311 (1986) (“The nointerest rule is to the effect that interest cannot be recovered in a suit against the
Government in the absence of an express waiver of sovereign immunity from an award of
interest.”)). In Library of Congress v. Shaw, the Supreme Court held that delay
compensation and interest share the same function and are therefore both prohibited by
the no-interest rule. 478 U.S. at 322. The Federal Circuit has applied the no-interest rule
to bar the reimbursement of attorneys’ fees at current rates under the Equal Access to
Justice Act (“EAJA”). See Chiu v. United States, 948 F.2d 711, 719-20 (1991) (holding
that the no-interest rule bars the use of a fee rate calculated based on the rate charged on
the final day of judgment under the EAJA). The government argues that the same
reasoning must apply to fee reimbursement under the URA. Def.’s Cross-Mot. Partial
Summ. J. at 42.
The plaintiffs contend that Shaw does not support the government’s argument and
that more recent authority suggests the appropriateness of delay compensation as an
14
The government cites the letters of engagement sent to plaintiffs, which state “[t]he hourly rate
will be the rate in effect at the time the statutory fees are actually paid not the rate in effect when
the professional services are rendered.” Letter from Steven Wald, Attorney, Lathrop & Gage,
L.C., to Dorothy L. Biery (Sept. 18, 2007).
18
element of “just compensation” even in cases where the government has not expressly
waived sovereign immunity. Pls.’ Resp. at 28. Specifically, the plaintiffs point to
Missouri v. Jenkins, 491 U.S. 274, 283-84 (1989), which held that an adjustment for
delay was appropriate under the Civil Rights Attorney’s Fees Awards Act in a case
against the State of Missouri. More recently, the Supreme Court in Perdue found that the
“exceptional delay” in the payment of attorneys’ fees warranted an enhancement where
the defense unjustifiably delayed payment. 130 S. Ct. at 1675.
The court agrees with the government that the long-standing no-interest rule, as
reaffirmed in Shaw, bars award of delay compensation based on the plaintiffs’ proposed
use of current legal fees without an express waiver of immunity by the United States.
478 U.S. at 322. Courts construe waivers of sovereign immunity strictly in favor of the
federal government. Id. at 318 (citing McMahon v. United States, 342 U.S. 25, 27
(1951)). A statute, such as the URA, that contains language “allowing costs, and within
that category, attorney’s fees, does not provide the clear affirmative intent of Congress to
waive the sovereign’s immunity [for the payment of interest].” Id. at 321. Therefore, by
its terms, the URA does not permit a fee enhancement for delays.
The court also finds the plaintiffs’ reliance on Jenkins misplaced. Jenkins applied
specifically to actions against a state government and not against the United States. 491
U.S. at 283 (finding that “[a]n award against a State of a fee that includes such an
enhancement for delay is not, therefore, barred by the Eleventh Amendment”) (emphasis
added). The sovereign immunity of the United States was not addressed. Perdue
similarly involved a case brought against a state government. As such, the court finds
19
that these cases are not relevant to resolving the pending claim for attorneys’ fees to be
awarded against the United States. The award to the plaintiffs will be calculated based on
historical rates, rather than the rates charged at the close of litigation.
IV.
Conclusion
For all of the foregoing reasons, the court finds that the Davis County exception
will apply and that the lodestar will be determined using St. Louis rates if the government
presents evidence demonstrating that the bulk of the plaintiffs’ attorneys’ work occurred
in St. Louis. The court further finds that attorneys’ fee awards will be calculated based
on historical rates in effect throughout the litigation. Finally, the court will not foreclose
consideration of adjustments to the lodestar if a party can establish an extraordinary or
rare circumstance which would warrant such an adjustment. Such adjustments are not
encouraged. The government’s motion is hereby GRANTED subject to the limitations
set forth above. The motion of the plaintiffs is DENIED.
IT IS SO ORDERED.
s/Nancy B. Firestone
NANCY B. FIRESTONE
Judge
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