Sharpe Holdings, Inc. et al v. United States Department of Health and Human Services et al
Filing
166
MEMORANDUM AND ORDER REGARDING MOTIONS FOR ATTORNEY FEES: IT IS HEREBY ORDERED that the motions of plaintiffs for attorney fees and expenses (Docs. 144 , 162 ) are GRANTED IN PART and DENIED IN PART. The Court finding that the following hourly ra tes and hours of effort are reasonable compensation for plaintiffs legal representation, rounded to the nearest hour, IT IS FURTHER ORDERED that defendants must pay plaintiffs CNS and HCC the following amounts as reasonable attorney fees: (SEE ORDER FOR DETAILS) Signed by Magistrate Judge David D. Noce on 8/9/18. (JAB)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
NORTHERN DIVISION
SHARPE HOLDINGS, INC., et al.,
Plaintiffs,
v.
UNITED STATES DEPARTMENT OF
HEALTH AND HUMAN SERVICES,
et al.,
Defendants.
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No. 2:12 CV 92 DDN
MEMORANDUM AND ORDER
REGARDING MOTIONS FOR ATTORNEY FEES
This action is before the court on the motions of plaintiffs CNS International
Ministries ("CNS") and Heartland Christian College ("HCC") ("not-for-profit plaintiffs"
or "movant-plaintiffs") for attorneys' fees and expenses under 42 U.S.C. § 1988 following
remand from the United States Court of Appeals for the Eighth Circuit. (Docs. 144 and
162). For the reasons set forth below, plaintiffs’ motions are granted in part and denied
in part.
BACKGROUND
On December 4, 2013, CNS and HCC joined certain individual and corporate forprofit plaintiffs in this action against the defendants Department of Health and Human
Services, the Secretary of HHS, the Department of the Treasury, the Secretary of the
Treasury, the Department of Labor, and the Secretary of Labor. 1 Plaintiffs allege that
federal regulations issued under the Patient Protection and Affordable Care Act of 2010
1
A more complete discussion of this case’s procedural context is contained in this
Court’s Memorandum accompanying the Judgment Order granting plaintiffs declaratory
and permanent injunctive relief. (Docs. 160, 161).
("contraceptive mandate") forced plaintiffs to violate their sincerely held religious
opposition to abortion on demand or pay fines and penalties or lose health insurance
coverage in violation of the Religious Freedom Restoration Act and the First Amendment
to the Constitution. (Docs. 1, 61).
The original plaintiffs sought and received a temporary restraining order and a
preliminary injunction in December 2012 and in June 2013.
(Docs. 20, 56).
The
temporary restraining order and the preliminary injunction were extended to include the
later joined not-for-profit plaintiffs on December 30, 2013, a decision the government
appealed as to CNS and HCC in February 2014. (Docs. 84, 85). The Eighth Circuit
affirmed and the United States Supreme Court vacated and remanded that decision.
Dept. of Health and Human Serv., et al. v. CNS Int’l Ministries, et al., No. 15-775, 2016
WL 2842448, at *1 (U.S. May 16, 2016); Sharpe Holdings, Inc. v. Dept. of Health and
Human Serv., 801 F.3d 927 (8th Cir. 2015).
On October 6, 2017, the government issued an interim regulation that permitted
religious objections to the contraceptive mandate. On October 13, 2017, the Eighth
Circuit granted defendants' motion to dismiss their appeal. (Doc. 131). On November
17, 2017, plaintiffs CNS and HCC moved for a permanent injunction. (Doc. 138). The
government initially objected on the ground of mootness, but on December 22, 2017, it
dropped its objections and declined to offer further substantive defenses in light of
developments in other cases. (Docs. 146, 152).
MOTIONS FOR ATTORNEY FEES
On December 5, 2017, plaintiffs CNS and HCC moved under 42 U.S.C. § 1988(b)
for attorney fees in the amount of $408,110.00 and expenses in the amount of $1,753.72.
(Doc. 144). On March 30, 2018, they filed a supplemental motion for $43,955.00 in
attorney fees for time expended since November 6, 2017. (Doc. 162). Defendants
objected to both motions, arguing that (1) plaintiffs are not in fact prevailing parties
entitled to receive attorney fees, or, if they are, that the fee should be reduced by 40
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percent because of plaintiffs’ “limited success;” (2) the number of hours claimed is
excessive when compared to filings in similarly situated cases; (3) plaintiffs’ claimed fees
include duplicative amounts from their compensation for work on the for-profit plaintiffs’
portion of this case; (4) plaintiffs’ counsel did not exercise reasonable billing judgment in
recording time; and (5) plaintiffs’ claims for “fees-on-fees litigation” are excessive.
(Docs. 145, 156, 164).
ANALYSIS
1. Plaintiffs are prevailing parties
The Court may award a reasonable attorney fee to prevailing parties in “any action
or proceeding to enforce a provision of . . . the Religious Freedom Restoration Act of
1993[.]” 42 U.S.C. § 1988(b). The "touchstone of the prevailing party inquiry” is
whether there is a “material alteration of the legal relationship of the parties in a manner
which Congress sought to promote in the fee statute.” Sole v. Wyner, 551 U.S. 74, 84
(2007); see, e.g., Maher v. Gagne, 448 U.S. 122, 129 (1980) (upholding finding that
plaintiffs were prevailing parties when they obtained a consent decree after settling).
In plaintiffs' case the government ultimately declined to contest their motion for a
permanent injunction. (Doc. 152). In the absence of government opposition and in
keeping with the Eighth Circuit’s prior decision in this case, this Court granted plaintiffs
declaratory and permanent injunctive relief. (Doc. 160). The relationship between the
parties thus changed, terminating the controversy and granting plaintiffs the outcome they
sought. The government’s argument that plaintiffs are not prevailing parties is without
merit.
2. Consideration of prior work and work in other cases
Plaintiffs request attorneys’ fees totaling $452,065.00 ($408,110 in Doc. 144 and
$43,955 in Doc. 162), plus expenses totaling $1,753.72. (Doc. 144). To reflect the
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statutory requirement that fee awards under 42 U.S.C. § 1988(b) must be "reasonable,"
they must be sufficient to “attract competent counsel" without producing a windfall.
Perdue v. Kenney A. ex. rel. Winn, 559 U.S. 542, 552 (2010). “It [is] for the district court
to determine what fee is ‘reasonable.’” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983).
Generally, the method for determining a reasonable fee is "the lodestar" figure, that is,
“the number of hours reasonably expended on the litigation multiplied by a reasonable
hourly rate.” Id. The government does not challenge the hourly rates requested by
plaintiffs’ counsel. (Doc. 145 at 10). This Court has previously found these rates
reasonable in light of plaintiffs’ attorneys’ respective experience and qualifications.
(Doc. 118 at 4-5).
The government does, however, challenge the number of claimed hours. The
process of awarding attorney fees gives “rough justice[,]” not “auditing perfection.” Fox
v. Vice, 563 U.S. 826, 838 (2011). District courts “may take into their account their
overall sense of a suit, and may use estimates in calculating and allocating an attorney’s
time.” Id.
First, the Court notes that plaintiffs’ attorneys have received fees on behalf of their
non-movant, for-profit plaintiffs. The fees claimed for the hours representing the not-forprofit plaintiffs must reflect those hours spent on already-compensated hours representing
the for-profit plaintiffs. The not-for-profit plaintiffs joined this case in December 2013,
and counsel claims 5.8 hours of work done more than fifteen months before that time.
(Doc. 144, at 1, 13, 32, 44) (1 hour for J. Matthew Belz on July 9, 2012, and 4.8 hours for
Professor Carl Esbeck in March through July 2012). The Court observes that the entries
for these hours describe work relating to nonprofit entities, but these hours predate the
filing of the not-for-profit plaintiffs’ claims to such an extent that, without specific
information, the Court cannot conclude that they sufficiently relate to representation of
the movant-plaintiffs. Rather, these hours enhance counsel's skill and expertise and are
compensated in the hourly rates the Court agrees counsel deserve. Therefore, these hours
are not compensable in the hours component of the lodestar amount.
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Additionally, many of the movant-plaintiffs’ filings are drawn directly from other
attorney work in similar cases. As the Court has previously noted (Doc. 118), this is a
practical litigation strategy, but the hours claimed in light of this substantial reliance must
reflect that some of the value was provided by other counsel. Movant-plaintiffs claim a
total of approximately 250 hours on these filings: approximately 50 hours on the second
amended complaint, 80 hours on the opening brief seeking a temporary restraining order
and a preliminary injunction, 65 hours on the reply brief, 30 hours on the motion for
permanent injunction, and 25 hours on the permanent injunction reply brief. (Doc. 144,
at 32-33).
The government has produced comparable filings in East Texas Baptist
University, No. 4:12 CV 3009 (S.D. Tex.) (“ETBU”), Catholic Diocese of Nashville, No.
3:13 CV 1303 (M.D. Tenn.) (“CDN”), and Catholic Benefits Association LCA (“CBA”)
v. Sebelius et al., No. 5:14 CV 240 R (W.D. Okla.). (Doc. 154, Exs. 1-6; Doc. 164, Exs.
1-2).
The not-for-profit plaintiffs joined this action in the second amended complaint.
(Doc. 61, filed December 4, 2013). That pleading added 46 paragraphs to the first
amended complaint: some information about plaintiffs in approximately 8 different
paragraphs, as well as substantive allegations about the accommodation process in
paragraphs 115-52. (Id.). The second amended complaint reflects a strong reliance on
the first amended complaint in ETBU, filed four months earlier on August 6, 2013. (Doc.
154, Exs. 2-3). The Court believes that counsel would reasonably apply their experience
and expertise to the review of similar cases in other courts. Reflecting the benefits
counsel garnered by the review of those pleadings, this Court reduces by 20 percent the
claimed hours in this case that are classified by plaintiffs as work, research, or revision of
the second amended complaint after August 6, 2013. This results in a reduction of
attorney Tim Belz’s 31.6 hours to 25.28 hours and J. Matthew Belz’s 15.2 hours to 12.16.
Plaintiffs’ memorandum in support of their motion for a temporary restraining
order and a preliminary injunction similarly reflects consideration of the memorandum
filed in ETBU on August 30, 2013. (Doc. 154, Exs. 4-5). In the 36-page memorandum,
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much of the material is similar to material found in the ETBU memorandum. (Id.). The
Court recognizes that counsel also prepared two motions and two five-page declarations
along with the memorandum (Docs. 62-64). The Court reduces the time claimed in
preparing this motion after August 30, 2013, by 20 percent: attorney Tim Belz’s 31.2
hours are reduced to 24.96 hours and attorney J. Matthew Belz’s 44.8 hours are reduced
to 35.84 hours.
Plaintiffs’ reply brief, filed December 25, 2013, reflects strong consideration of
the reply filed in CDN nine days earlier on December 16, 2013. (Doc. 154, Exs. 6-7).
The Court accordingly reduces the time claimed for preparing this pleading by 20
percent. This results in a reduction of Tim Belz’s 30.5 hours to 24.4 hours and J.
Matthew Belz’s 28.5 hours to 22.8 hours.
Similarly the movant-plaintiffs' memorandum in support of their motion for a
permanent injunction (Doc. 139, filed Nov. 17, 2017) benefitted from a review of CBA’s
motion for permanent injunction, filed November 1, 2017. (Docs. 139, 164, Ex. 1). The
Court reduces by 20 percent those hours classified by plaintiffs as work, research, or
revision of the memorandum after November 1, 2017. This results in a reduction of
attorney Tim Belz’s 17.4 hours to 13.92 hours; attorney J. Matthew Belz’s 12 hours are
reduced to 9.6 hours; and attorney Carl Esbeck’s 3.7 hours are reduced to 2.96.
Finally, the movant-plaintiffs’ reply in support of their motion for permanent
injunction (Doc. 151, filed December 15, 2017) also reflects strong consideration of
CBA’s reply filed December 4, 2017 (Doc. 164, Ex. 2), and time claimed for its
preparation will reflect this consideration. The Court reduces by 20 percent those hours
classified by plaintiffs as work, research, or revision of the reply after December 4, 2017.
This results in a reduction of attorney Tim Belz’s 11.1 hours to 8.88 hours; attorney J.
Matthew Belz’s 11.8 hours are reduced to 9.44 hours; and attorney Carl Esbeck’s 3.4
hours are reduced to 2.72 hours.
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3. Fees for fee claim litigation
Plaintiffs claim a total of 108 hours for working on the two fee claim motions in
this case.
(Docs. 144, 162).
“Time spent preparing fee applications is generally
compensable,” El-Tabech v. Clarke, 616 F.3d 834, 834-44 (8th Cir. 2010), but not when
this time is excessive or “result[s] in a second major litigation.” Hensley v. Eckerhart,
461 U.S. 424, 437 (1983). The government challenges plaintiffs’ fees-on-fees claims as
based on excessive numbers of hours. (Doc. 164).
Plaintiffs have 59.2 hours of time entries related to their first motion, which was
filed on December 5, 2017, and which claimed hours from July 9, 2012, to November 6,
2017.
(Doc. 144).
This work consisted of a 23-page motion, 10 pages of which
discussed the background of the case, and 7 pages of which discussed the attorney fee
rates that this Court already approved in this case for these attorneys in 2015. (Docs.
118, 144). In addition, counsel submitted their timekeeping records; copies of briefs filed
before the Supreme Court; affidavits from each of plaintiffs’ three attorneys, ranging
from two to three pages; the resumes of the attorneys; and affidavits from two other
attorneys regarding customary rates. (Doc. 144).
In their supplemental motion, filed on March 30, 2018 (Doc. 162), plaintiffs
addressed hours expended since November 6, 2017. (Doc. 163). This includes a total of
40.8 hours on their 15-page reply to the government’s brief in opposition to the fee
motion. (Doc. 156).
In contrast, plaintiffs claim a total of 8 hours on their supplemental fee application
for work from November 8, 2017, to March 30, 2018, which consisted of a 6-page
motion, timekeeping records, and three one-page affidavits. (Doc. 163, Ex. 3). The time
spent on this motion was reasonable. But the time spent on the preceding motion and
reply was excessive.
A claim of five days of attorney work on the reply memorandum and over seven
days of attorney work to prepare the initial motion is excessive. The Court will reduce
the claimed time for these documents by 30 percent, reducing the hours for attorney J.
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Matthew Belz from 24 to 16.8 hours and for Tim Belz from 35.2 to 24.64 hours on the
initial motion; and from 20.8 to 14.56 hours for J. Matthew Belz and 19.7 to 13.79 hours
for Tim Belz on the reply.
4. Fees for strategy-planning, conferencing, and oral argument preparation
On appeal, plaintiffs’ counsel reported a total of 752.4 hours of work, including
251.8 hours on initial correspondence and briefing, 123.3 hours on 28(j) letters, 85.6
hours on correspondence, research, and status report work, and 102.8 hours on oral
argument preparation. (Doc. 144, Ex. 2). The Court finds counsel’s 102.8 hours on oral
argument preparation to be excessive. Plaintiffs’ lead counsel asserts “more than 30
years [of] experience… in constitutional law, with a particular emphasis on religious
liberty.” (Doc. 144, Ex. 6 at 2). This justifies the accepted rate per hour for plaintiffs'
experienced counsel. This factor also militates toward a reduction of the required hours
for presentation preparation. See Glassroth v. Moore, 347 F.3d 916, 919 (11th Cir. 2003)
(finding that the presence of “lead counsel [who] is an expert in this area” should result in
more efficient resolution). The Court finds Carl Esbeck’s timekeeping entries for 12.6
hours in oral argument preparation to be sufficiently specific and reasonable, but it will
reduce Tim and J. Matthew Belz’s oral argument preparation time by 20 percent,
reducing attorney Tim Belz’s 58.8 hours to 47.04 and J. Matthew Belz’s 31.5 hours to
25.2 hours.
As for the remaining hours on appellate work, plaintiffs’ lead counsel claims that
“the hours I report in the invoices submitted to the Court represent substantially fewer
hours than I actually spent on this matter[.]” (Doc. 144, Ex. 6 at 3). However, no record
has been submitted of the number of hours excluded in plaintiffs’ application for
attorneys’ fees. Many time entries contain multiple tasks or insufficient detail to enable
the Court to determine the claimed hours were reasonable. For example, the timekeeping
report contains over fifty entries referring to communications with other attorneys in
similar cases. (Doc. 144, Ex. 1; Doc. 163, Ex. 1) (see also Doc. 145 at 16 n. 3). In most
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of these entries, these communications are recorded in a string of other tasks and it is not
clear how much time was spent on each task, nor is there enough information about the
nature of these communications to determine whether they are compensable.
Instead of a line-by-line adjustment, the Court will apply a percentage reduction to
adjust for the imprecise and excessive billing. Because Counsel has not disclosed the time
excluded from the timekeeping logs, and because the time entries for Tim and J. Matthew
Belz are in many cases too general for the Court to adequately evaluate, or involve a long
string of tasks with no breakdown of the time spent on each task, 2 the Court reduces the
total for each of these attorneys by a further 5 percent.
The Court awards attorneys’ fees for the work done on plaintiffs’ amicus brief in
Zubik v. Burwell, 136 S. Ct. 1557, 1560 (2016). This was a related case and played an
important role in plaintiffs prevailing in this case, although they achieved only limited
success (the Supreme Court vacated the Eighth Circuit judgment and remanded,
“express[ing] no view on the merits” of the case). HHS v. CNS Int’l Ministries, 136 S.
Ct. 2006 (2016). Therefore, the Court will not reduce the claimed attorneys’ fees for
plaintiffs’ participation as amicus.
Finally, the Court will not reduce the time or costs plaintiffs' counsel spent on
other work before the Supreme Court.
See, e.g., time entries for 7/8/13 (5.6 hours for “Research regarding religious nonprofit
status given passage of Final rule; work on amendment of pleadings; two telephone
conferences with David Melton, General counsel for nonprofits”); 10/28/13 (4.4 hours for
“Communications with various attorneys regarding status of nonprofit religious cases
across country; review same”); 12/11/13 (3.8 hours for “Review/revise all documents;
file all”); 6/3/14 (4.5 hours for “Work on brief”); 2/12/15 (4.9 hours for “Fly speck
Geneva College opinion from the Third Circuit, for purpose of filing a Rule 28(j) letter
responding to the Government’s 28(j) letter; share research with attorneys similarly
situated and speak to client regarding same; research for and prepare Rule 28(j) response
letter for filing in the 8th Circuit”); 1/25/17 (2.2 hours for “Telephone conferences and
emails to co-counsel and clients over past week”) (Doc. 144, Ex. 1).
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CONCLUSION AND ORDER
Applying these considerations,
IT IS HEREBY ORDERED that the motions of plaintiffs for attorney fees and
expenses (Docs. 144, 162) are GRANTED IN PART and DENIED IN PART.
The Court finding that the following hourly rates and hours of effort are
reasonable compensation for plaintiffs’ legal representation, rounded to the nearest hour,
IT IS FURTHER ORDERED that defendants must pay plaintiffs CNS and HCC
the following amounts as reasonable attorney fees:
Attorney
T. Belz
J.M. Belz
C. Esbeck
TOTAL
Reduction
Hours for Prior
Claimed
Work
Reduction Reduction
Other
for Fee
for Oral Excessive
Litigation Argument
Hours
Hours as
Determined
by Court
Hourly
Rate
Product
of Hours
and Rate
$450
$250
$450
$269,100
$91,750
$33,750
684
432
81
24
24
6
16
13
0
12
6
0
34
22
0
598
367
75
1197
54
29
18
56
1040
$394,600
IT IS FURTHER ORDERED that defendants must pay plaintiffs the reasonable
sum of $1,753.72 as expenses in this case.
/s/ David D. Noce
UNITED STATES MAGISTRATE JUDGE
Signed on August 9, 2018.
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