Lavin et al v. Brunner

Filing 181

Memorandum of Opinion and Order For the reasons set forth herein, Plaintiffs' Objections (ECF No. 172 ) are overruled and the substantive portions of the Report and Recommendation (ECF No. 168 ) of the Magistrate Judge are hereby adopt ed. The calculation of attorneys' fees is modified to 2% greater than that recommended by the Magistrate Judge. Plaintiffs' Motion for Fees and Costs Incurred Prosecuting Their Attorneys' Fees Motion ("Fees-for-Fees Motion&qu ot;) (ECF No. 161 ) is granted in part and denied in part. Plaintiffs are awarded a total of $22,731.78 in fees ($454,635.53 x 5%) and $9,531.48 ($14,943.98 - $5,412.50) in costs for the litigation related to Plaintiffs' original request for fees in this matter. Judge Benita Y. Pearson on 8/31/2015. (JLG)

PEARSON, J.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
ARTHUR LAVIN, et al.,
Plaintiffs,
v.
JON HUSTED, etc.,
Defendant.

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CASE NO. 1:10CV1986

JUDGE BENITA Y. PEARSON
MEMORANDUM OF OPINION
AND ORDER
[Resolving ECF Nos. 161 and 172]

Pending is Plaintiffs’ Motion for Fees and Costs Incurred Prosecuting their Attorneys’
Fees Motion (“Fees-for-Fees” Motion) (ECF No. 161). As prevailing parties under 42 U.S.C. §
1988, Plaintiffs sought $657,652.75 in attorneys’ fees and $7,992.93 in costs and expenses for
the effort expended pursuing the substantive claims in this case. ECF No. 97. In that original fee
petition, Plaintiffs augured that they expected to supplement their motion or move separately for
“additional fees and costs incurred in recovering attorneys’ fees and costs, as is legally
permitted.” ECF No. 97 at PageID #: 3342.
I.
Plaintiffs, who are physicians and Ohio Medicaid providers, filed the above-entitled §
1983 action against Ohio’s Secretary of State in September 2010 arguing that Ohio Rev. Code §
3599.45 was unconstitutional on its face under the First and Fourteenth Amendments. Plaintiffs
prevailed. Lavin v. Husted, 689 F.3d 543 (6th Cir. 2012) (“Lavin I”). Later, the Sixth Circuit
vacated the district court’s award of attorneys’ fees under 42 U.S.C. § 1988 and remanded for a

(1:10CV1986)
new calculation of fees before a different district judge. Lavin v. Husted, 764 F.3d 646 (6th Cir.
2014) (“Lavin II”).1 The case at bar, the history of which is “relatively uncomplicated and short,”
Lavin II at 652, was reassigned to the docket of the undersigned who referred the matter to the
assigned magistrate judge for general pretrial supervision.2
After the magistrate judge conducted a settlement conference, Defendant agreed to pay
and Plaintiffs agreed to accept attorneys’ fees and costs equal to $461,077.56. See Stipulated
Judgment Entry Regarding Partial Settlement of Attorneys’ Fees and Costs (ECF No. 159).
Essentially, Defendant agreed to pay $454,635.53 in fees and $6,442.03 in costs to settle
Plaintiffs’ request for fees incurred through September 21, 2012—the date on which the
judgment entry resolving the merits of the case was issued.3 The settlement reached for the
“merits fees,” resulted in a $203,017.22 reduction from the fees originally requested by Plaintiffs.
See ECF No. 97.

1

Litigation is not without risk. The fact is that, despite the most zealous and
competent of efforts, success is never guaranteed. Counsel face serious risk since judicial
review is unpredictable. In re Prudential-Bache Energy Income P’ships Sec. Litig., No.
888, 1994 WL 202394, at *6 (E.D.La. May 18, 1994).
2

The referral was pursuant to 28 U.S.C. § 636 and Local Rules 72.1 and 72.2(a),
which authorized the magistrate judge to file with the Court a report containing proposed
findings and a recommendation for disposition of case-dispositive motions. See Order of
Reference (ECF No. 144).
3

It is to be remembered that the Court previously “awarded only $128,908.74 in
fees and $6,315.00 in costs—an amount seventy percent less than the magistrate judge’s
recommendation and eighty percent less than plaintiffs’ original request.” Lavin II at
648.
2

(1:10CV1986)
The parties, however, did not settle the dispute over the fees-for-fees, or the supplemental
fees and costs request that Plaintiffs forewarned they would pursue “as is legally permitted.”4
Plaintiffs “Fees-for-Fees” Motion requests an additional $457,065.505 in fees and $14,943.98 for
costs. ECF No. 161. Contrary to Plaintiffs’ request, the magistrate judge submitted a report
(ECF No. 168) recommending “that Plaintiffs be awarded a total of $13,639.07 in fees and
$9,531.48 in costs for the litigation related to Plaintiffs’ original request for fees in this matter.”
ECF No. 168 at PageID #: 6097. Plaintiffs objected. ECF No. 172. Defendant opposes the
objections. ECF No. 175.
After notice to the parties, the Court heard oral argument on the objections. The Court
has been advised, having reviewed the record, the parties’ briefs, the applicable law, and has the
benefit of the oral arguments of counsel. Fully advised, the Court, after reviewing the objections,
hereby adopts the magistrate judge’s report and recommendation, but only in part.

4

Plaintiffs argue that Defendant had an opportunity to settle the fees-for-fees case
as early as November 2012, but prolonged the litigation by refusing to discuss settlement
early on in the fees litigation. See Email Exchange (ECF No. 149-1). After Lavin II was
decided, Plaintiffs’ counsel, again, inquired about settlement and noted “Plaintiffs do
intend with this case to continue to challenge the Coulter 3% cap on fees for fees and
cannot think of a better case with which to do it.” Letter dated September 4, 2014 (ECF
No. 149-2).
5

See Plaintiffs’ Notice of Errata Regarding “Fees-for-Fees” Motion (ECF No.
162) at PageID #: 5972. While “[t]he fees requested discount by at least $109,973.00
(19.4%) the fees incurred (through December 10, 2014),” (ECF No. 162 at PageID #:
5972), they are still more than 100% of the fees already awarded for work in the main
case, i.e. the merits fees.
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II. Standard of Review for a Magistrate Judge’s Report and Recommendation
Where objections have been made to the magistrate judge’s Report and Recommendation,
the District Court standard of review is de novo. Fed. R. Civ. P. 72(b)(3). A district judge:
must determine de novo any part of the magistrate judge’s disposition that has
been properly objected to. The district judge may accept, reject, or modify the
recommended disposition; receive further evidence; or return the matter to the
magistrate judge with instructions.
Id.
Accordingly, the Court has conducted a de novo review of the portions of the Magistrate
Judge’s Report to which Plaintiffs have properly objected.
III.
A. Attorneys’ Fees
1. Coulter does not Contravene
The Civil Rights Attorney’s Fees Award Act, 42 U.S.C. § 1988(b), provides, in pertinent
part, that “[i]n any action or proceeding to enforce a provision of section[ ] 1983 . . . of this title,
. . . the court, in its discretion, may allow the prevailing party, other than the United States, a
reasonable attorney’s fee as part of the costs. . . .” Attorney fees awarded under this section must
be reasonable. As the Supreme Court noted in Hensley v. Eckerhart, 461 U.S. 424 (1983), “[t]he
most useful starting point for determining the amount of a reasonable fee is the number of hours
reasonably expended on the litigation multiplied by a reasonable hourly rate.” Id. at 433
(emphasis added). However,
. . . Congress did not intend that lawyers, already a relatively well off professional
class, receive excess compensation or incentives beyond the amount necessary to
cause competent legal work to be performed in these fields. Legislative history
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speaks of “fees which are adequate to attract competent counsel, but which do not
produce windfalls,” S.Rep. No. 94-1011, p. 6 (1976), U.S.Code Cong. &
Admin.News 1976, pp. 5908, 5913. . . .
Coulter v. Tennessee., 805 F.2d 146, 148-49 (6th Cir. 1986), cert. denied, 482 U.S. 914 (1987).
For the reasons that have been fully articulated by the magistrate judge (ECF No. 168 at PageID
#: 6092-95), the Court concludes that Coulter’s guidance does not contravene the purposes of §
1988. Therefore, this objection is overruled.
2. Coulter’s limitations as applied to this case
Plaintiffs argue that although the magistrate judge correctly found that they are entitled to
an attorneys’ fees award, the report erred in applying the 3% cap enunciated in Coulter to limit
the fee award because the “unusual circumstances” exception to the rule makes the 3% cap
inapplicable to the supplemental fees award in the case at bar. In Coulter,6 the Court of Appeals
for the Sixth Circuit established a controlling general rule:
Although time spent in preparing, presenting, and trying attorney fee applications
is compensable; some guidelines and limitations must be placed on the size of
these fees. Otherwise the prospect of large fees later on may discourage early
settlement of cases by rewarding protracted litigation of both the civil rights case
and the attorney fee case.
The cases from this and other circuits uniformly hold that a lawyer should receive
a fee for preparing and successfully litigating the attorney fee case after the

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As a published case, Coulter remains binding law and must be followed
unless the Supreme Court has intervened or the opinion is overruled by the Sixth Circuit
sitting en banc. See United States v. Richardson, 793 F.3d 612, 630 (6th Cir. 2015)
(“[p]ublished panel opinions are binding on later panels. A published opinion is
overruled only by the court en banc.” (quoting Sixth Circuit Rule 32.1(b))); see also Nat’l
Union Fire Ins. Co. v. VP Bldgs., Inc., 606 F.3d 835, 839-40 (6th Cir. 2010) (declining to
consider arguments controlled by prior published opinions). Neither exception applies to
the case at bar.
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original case is over, although in the private market place, lawyers do not usually
charge, and clients do not usually pay, for the time it takes lawyers to calculate
their fees. [Citation omitted.] The legislative intent behind attorney fee statutes,
however, was to encourage lawyers to bring successful civil rights cases, not
successful attorney fee cases. The attorney fee case is not the case Congress
expressed its intent to encourage; and in order to be included, it must ride
piggyback on the civil rights case.
. . . In the absence of unusual circumstances, the hours allowed for preparing and
litigating the attorney fee case should not exceed 3% of the hours in the main case
when the issue is submitted on the papers without a trial and should not exceed
5% of the hours in the main case when a trial is necessary. Such guidelines and
limitations are necessary to insure that the compensation from the attorney fee
case will not be out of proportion to the main case and encourage protracted
litigation.
Id. at 151 (emphasis added).
Coulter’s main dictate is easily understood. An award of attorney’s fees is capped at 3%
of the attorney’s fees in the main case, if there is no trial; the cap is 5%, if there is a trial. Coulter
is binding and only permits a breach of its limits when “unusual circumstances” are present.
Unfortunately, Coulter does not explain what qualifies as unusual circumstances. Courts in the
Sixth Circuit have departed from the Coulter rule only in cases in which applying the cap would
be unjust, or subvert the interests that support it. See, e.g. Lamar Advertising Co. v. Charter
Twp. of Van Buren, 178 Fed.Appx. 498, 502 (6th Cir. 2006) (defendant needlessly protracted the
fees litigation by making spurious arguments on appeal).
There is no question that Plaintiffs seek fees far greater than those contemplated by
Coulter unless there are unusual circumstances. And, while the fees-for-fees litigation has
persisted longer than any involved would like, the circumstances cannot be described as unusual.
See Northeast Ohio Coalition for the Homeless v. Sec. of State of Ohio, 695 F.3d 563, 575-76

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(6th Cir. 2012) (the exception for unusual circumstances warranting a departure from the 3% rule
is not applicable in this case, despite the somewhat unusual procedural history). Plaintiffs’
appeal of the award of “fees for fees” prolonged the fee litigation. Plaintiffs prevailed, however,
proving the appeal was not frivolous. This “victory” is balanced, however, against the
inclination of Plaintiffs’ counsel to appeal a Coulter award no matter what. Because the
“Fees-for-Fees” Motion (ECF No. 161) regards a supplemental fee request, the Court agrees with
Defendant that the fee award is subject to the Coulter cap. As U.S. District Judge Algenon L.
Marbley stated:
In Coulter, the Sixth Circuit reasoned that the Three Percent Rule was “necessary
to insure that the compensation from the attorney fee case will not be out of
proportion to the main case.” [Coulter, 805 F.2d at 151.] Nothing in this
statement suggests that the Coulter court’s proportionality concerns turned on
which [ ] actions served to extend the litigation; rather, the Sixth Circuit was
concerned with the overall fees outcome in supplemental fees cases.
Northeast Ohio Coalition for the Homeless v. Sec. of State of Ohio, No. 2:06-CV-896, 2010 WL
4939946, at *8 (S.D. Ohio Nov. 30, 2010) (emphasis in original), aff’d, 695 F.3d 563 (6th Cir.
2012). Applying Coulter, the Court, however, will cap the fee award at 5% of the award granted
in the main case.
The 5% cap is appropriate in this case even though there was no trial, due to the district
court’s prior abuse of discretion requiring further litigation in the case at bar.7 See Lavin II at

7

Counsel is reminded that all trial court error revealed on appeal is attributed to
the district judge. The error in Lavin II is no different. So, while the heightened 5% cap
is appropriate to maintain the proportionality espoused by Coulter, it does not transform
the case into one with “unusual circumstances” outside of those attendant to typical
litigation.
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651 (“Because the district court abused its discretion, plaintiffs are entitled to a new
calculation.”). Having to appeal to the Sixth Circuit a second time to receive reasonable merits
fees requires an adjustment upwards from the 3% cap. See Myers v. Bricklayers & Masons Local
22 Pension Plan, No. 3:13-cv-75, 2014 WL 7005193, at *7 (S.D. Ohio Dec. 10, 2014) (Plaintiffs
recovered fees equal to the 3% cap, plus an additional 10 hours for researching three novel issues
presented in this ERISA case.); Potter v. Blue Cross Blue Shield of Michigan, 10 F.Supp.3d 737,
751 (E.D.Mich. 2014) (overruling objection in ERISA denial-of-benefits class action against
insurer that the total request constituted more than 8% of the total fees and should be limited to
3%); Nance v. Zwicker & Associates, PC, No. 1:13 CV 01604, 2015 WL 2195063, at *13 (N.D.
Ohio May 11, 2015) (Wells, J.) (adopting report and recommendation of Magistrate Judge
Vecchiarelli) (“Three percent of 26.6 hours is approximately .8 hours, which the undersigned
rounds up to 1 hour.”). Some reasonable recompense must be made.
B. Costs
Plaintiffs request costs of $14,943.98 for pursuing Plaintiffs’ original fee application in
the case at bar. The Fees-for-Fees Expenses (ECF No. 161-9) includes three entries for
discussions with amici counsel, as well as outside consultants obtained by Plaintiffs for the
purpose of reviewing the issues and improving their Lavin II appellate brief. To the extent
Plaintiffs raise an objection,8 the Court agrees with the magistrate judge that these expenses for

8

Plaintiffs do not develop this argument in the objections or cite appropriate
authority. Plaintiffs argue only in perfunctory manner in a footnote: “[w]hile the
physicians object to this reduction, they lack the space here to develop their argument to
any appreciable extent.” ECF No. 172 at PageID #: 6107 n. 3.
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outside consultants, totaling $5,412.50, are not reasonable and should be deducted. ECF No. 168
at PageID #: 6069. See Rivet v. State Farm Mut. Auto. Ins. Co., 316 Fed.Appx. 440, 449 (6th
Cir. 2009) (refusing to address “arguments that . . . are unsupported or undeveloped”). Plaintiffs
must bear their own expenses regarding outside experts retained to ensure the accuracy and
persuasiveness of their positions and presentation.
IV.
Plaintiffs’ Objections (ECF No. 172) are overruled and the substantive portions of the
Report and Recommendation (ECF No. 168) of the magistrate judge are hereby adopted. The
calculation of attorneys’ fees is modified to 2% greater than that recommended by the magistrate
judge. Plaintiffs’ Motion for Fees and Costs Incurred Prosecuting Their Attorneys’ Fees Motion
(“Fees-for-Fees” Motion) (ECF No. 161) is granted in part and denied in part. Plaintiffs are
awarded a total of $22,731.78 in fees ($454,635.53 x 5%) and $9,531.48 ($14,943.98 $5,412.50) in costs for the litigation related to Plaintiffs’ original request for fees in this matter.

IT IS SO ORDERED.

August 31, 2015
Date

/s/ Benita Y. Pearson
Benita Y. Pearson
United States District Judge

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