Opinion
CIV. NO. 3:96-CV-3077-P.
April 6, 2000.
MEMORANDUM OPINION AND ORDER
Now before the Court are:
1. Plaintiffs' Motion for Injunctive Relief and Motion to Admit Exhibits for Consideration of Motion for Injunction Relief, both filed May 10, 1999; Defendant's Response, filed June 1, 1999; and Plaintiffs' Reply, filed June 23, 1999;
2. Plaintiffs' Application for Award of Reasonable Attorneys' Fees, filed May 10, 1999; Defendant's Response, filed June 1, 1999; and Plaintiffs' Reply, filed June 23, 1999;
3. Defendant's Cross-Application for Award of Costs Against Plaintiffs Arnold and McDaniel Pursuant to FRCP 68, filed June 3, 1999; Plaintiff's Response, filed June 23, 1999; and Defendant's Reply, filed July 8, 1999;
4. Plaintiffs' Motions for Sanctions pursuant to Rule 11, 28 U.S.C. § 1927 and the Court's Inherent Power, both filed July 28, 1999; Defendant's Joint Response, filed September 1, 1999; the Consolidated Response of Irma Carrillo Ramirez, Esq. to Plaintiffs' Sanctions Motions, filed September 17, 1999; and Plaintiffs' Reply, filed October 4, 1999; and
5. Plaintiffs' Motion for Leave to Supplement the Record and for Leave to File Supplemental Briefs, filed March 30, 2000.
For the following reasons, Plaintiffs' Motion for Injunctive Relief is DENIED, Plaintiffs' Motion to Admit Exhibits for Consideration of Motion for Injunction Relief is DENIED AS MOOT, Plaintiffs' Application for Award of Reasonable Attorneys' Fees is GRANTED IN PART and DENIED IN PART, Defendant's Cross-Application for Award of Costs is DENIED, Plaintiffs' two Motions for Sanctions are DENIED, and Plaintiffs' Motion for Leave to Supplement the Record is DENIED AS MOOT.
As is set forth more fully below, Plaintiffs are entitled to recover $139,705.01 in attorneys' fees and $52,120.18 in costs.
I. BACKGROUND
In November 1996, Plaintiffs Joel Arnold, Bobby Maxwell and Allen McDaniel sued their employer, the United States Department of the Interior, alleging discrimination in violation of Title VII of the Civil Rights Act of 1964. Plaintiffs, all three of whom were supervisory auditors competing for promotion to a single job opening, asserted that the ultimate promotion of a less qualified Asian female applicant constituted an unlawful job action on the part of the Interior Department. More specifically, all Plaintiffs alleged race, sex and age discrimination, while Plaintiffs Arnold and McDaniel added retaliation claims, as well.
Before filing this suit in November 1996, Plaintiffs had already received an Interior Department finding of gender discrimination as well as certain corrective action by the agency. Indeed, in October 1996, the Interior Department promoted Plaintiff Bobby Maxwell to the position all three Plaintiffs had applied for. As the best qualified of the three Plaintiffs, Maxwell was awarded a retroactive promotion, back pay and performance awards, All Plaintiffs were awarded compensatory damages (subject to such damages being established) and attorneys' fees and costs. The Interior Department also voluntarily posted a notice of its violation.
Therefore, by the time Plaintiffs filed this lawsuit one month later, it was apparent that neither Arnold nor McDaniel would have been promoted because of Maxwell's superior qualifications. Given such a state of affairs, this Court ruled before trial that Arnold and McDaniel were foreclosed from receiving compensatory damages or a promotion, and were only eligible for attorneys' fees and costs, and injunctive and other equitable relief.
Just prior to commencement of the trial in April 1999, Plaintiffs' retaliation claims were dismissed following motions for summary judgment. The jury rendered its verdict on April 26, 1999, finding that all Plaintiffs were discriminated against, but that only Maxwell was entitled to damages. Accordingly, this Court entered final judgment and awarded Plaintiff Bobby Maxwell $300,000 in consequential damages. Although Plaintiffs Arnold and McDaniel received no damages, all three Plaintiffs were awarded attorneys' fees and costs. The Court now considers the parties' various post-judgment motions in turn.
Although the jury awarded Maxwell $450,000, that amount was reduced to $300,000 pursuant to a statutory cap.
II. MOTION FOR INJUNCTIVE RELIEF AND TO ADMIT EXHIBITS
Plaintiffs move this Court to issue an injunction compelling the Interior Department to: (i) eliminate or reform its affirmative action plan (the "Plan"); (ii) implement a "zero tolerance" policy with regard to discrimination; and (iii) eliminate any direct connection between personnel evaluations and fulfillment of the Plan's objectives. (Pl. Motion for Injunctive Relief at 15). According to Plaintiffs, such an injunction is justified given evidence of a link between the Plan and the intentional race and gender discrimination to which Plaintiffs were subjected. ( Id. at 2).
The Court declines to issue any such injunction for at least two reasons. First, as Interior correctly observes, Plaintiffs did not expressly challenge the Plan until moments before trial. Indeed, Plaintiffs' counsel first mentioned that he would seek an injunction against the Plan just prior to opening statements. After argument on the issue, the Court informed Plaintiffs' counsel that no such relief would be available because it was not sought previously. ( See 4/19/99 Tr. at 12-15). As Plaintiffs' counsel was told in open court, no injunction against the Plan was mentioned in the summary judgment briefing, the pre-trial order or the pre-trial conference. Although vague references are made to injunctive relief, Plaintiffs never timely informed the Court or the Defendant of its intention to enjoin the government from applying its Plan until the morning of trial.
Injunctive relief which has not previously been sought will not be granted. Meyer v. Brown Root Constr. Co., 661 F.2d 369, 374 (5th Cir. 1981). Therefore, the Court stands upon its April 19, 1999 oral ruling prohibiting any injunction of the Plan. ( See 4/19/99 Tr. at 14).
Second, even if the relief was available, Plaintiffs' proposed injunction exceeds the scope of the evidence brought out at trial. This Court is only empowered to fashion injunctive relief to target specific acts of discrimination. United States v. Criminal Sheriff, 19 F.3d 238, 241 (5th Cir. 1994). Here, Plaintiffs demonstrated only that they were victims of discrimination. No showing of a pattern or practice of discrimination against white males generally was proven. Rather, Plaintiffs successfully demonstrated a single incident involving a single manager who is no longer employed by the Interior Department. Under these circumstances, Plaintiffs' requested injunction is impermissibly overbroad and is, accordingly, denied. See, e.g., Marshall v. Goodyear Tire Rubber Co., 554 F.2d 730, 733-35 (5th Cir. 1977) (company-wide injunction inappropriate where plaintiff proved one incident of discrimination caused by one employee at company).
III. PLAINTIFFS' APPLICATION FOR ATTORNEYS' FEES
By their joint motion for attorneys' fees and costs, Plaintiffs seek a total of $281,387.88. The Department of the Interior offers three arguments in opposition: (A) no fees should be awarded to Plaintiffs Arnold and McDaniel because they failed to prevail on their retaliation claims and failed to recover any damages on their successful discrimination claims; (B) any fee award should be reduced in light of various "lodestar" elements; and (C) Plaintiffs' costs are unrecoverable or warrant reduction. Each of these contentions are addressed in turn.
A. Fees for Arnold and McDaniel
Title VII, which was enacted to eradicate employment discrimination, includes authority to award attorneys' fees and costs to a "prevailing plaintiff" 42 U.S.C. § 2000e-5(k); see Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 420 (1978). The purpose of statutory fee-shifting in civil rights cases is to ensure effective access to the judicial process for persons with such grievances. Blanchard v. Bergeron, 893 F.2d 87, 89 (5th Cir. 1990).
The Department of the Interior opposes any fee award to Plaintiffs Arnold and McDaniel given their limited success at trial. Plaintiffs respond that Arnold and McDaniel are "prevailing parties," evidenced by a favorable jury verdict, this Court's entry of judgment in favor of all Plaintiffs, and a specific ruling that each Plaintiff is entitled to recover his fees and costs. ( See Final Judgment).
After considering the record, arguments and authority cited by both sides, the Court agrees that Plaintiffs are each entitled to fee and cost recovery as prevailing parties. The Court thus stands by its original award of fees and costs to all Plaintiffs.
The Interior Department pins its argument upon Farrar v. Hobby, 506 U.S. 103 (1992), whereby the Supreme Court weighed a $280,000 attorneys' fee award where the civil rights plaintiff only won a nominal damage award of one dollar. The Farrar Court held that although a plaintiff who wins nominal damages is technically a prevailing party, no fee recovery should be allowed where the "victory" is, in reality, devoid of any real success on the merits. Id. at 115.
According to Interior, Farrar precludes fee recovery by Arnold or McDaniel, who won but a "technical" victory at trial. Specifically, Interior observes that after three years of litigation, Arnold and McDaniel, who had already obtained a finding of discrimination before filing this suit, only walked away with one additional finding of discrimination and no damages. Furthermore, Arnold and McDaniel failed to prevail on their retaliation claims. Therefore, argues Interior, Arnold and McDaniel's lawsuit filed to enure any substantial benefit to them, failed to alter any legal relationship between themselves and Interior, and, in turn, failed to serve any important public purpose. In short, Interior claims, Arnold and McDaniel ended up with just as little — and arguably with even less — than they started with, and therefore are not prevailing parties entitled to fees under Farrar. ( See Def. Response at 5-6).
But Farrar is so factually distinguishable from this case as to be inapplicable. Mr. Farrar limited his complaint to seeking $17 million in damages under 42 U.S.C. § 1983 and 1985, and recovered only a nominal one-dollar award. So, as the Fifth Circuit has recognized, the Farrar holding is limited to "cases where the plaintiff sought only money damages and was essentially unsuccessful since he did not achieve in any way the ultimate goal of the litigation." Riley v. City of Jackson, Miss., 99 F.3d 757, 759-60 (5th Cir. 1996). In Riley, the Fifth Circuit declined to apply Farrar and awarded fees despite the fact that the Riley plaintiff received only nominal damages. Finding that Mr. Riley succeed in obtaining certain equitable relief and therefore changing defendant's conduct) the court concluded that Riley had achieved more than just a technical victory and therefore was entitled to a fee award. Id.
Similarly, Arnold and McDaniel's victory here cannot fairly be coined "merely technical" just because they recovered no damages. Indeed, monetary recovery for the discrimination claims was specifically barred by this Court, in light of the fact that Plaintiff Maxwell would have been promoted to the one position for which all three Plaintiffs were vying. It is clear that one of Arnold and McDaniel's primary motivations in pursuing this lawsuit was to secure a judgment that their rights were violated, and, if possible, to change Interior's alleged policy of promoting individuals based upon an unabashed quota system. To that extent, both Arnold and McDaniel took no small measure of victory from the jury's verdict and this Court's final judgment. Furthermore, Arnold and McDaniel's failure to prevail on their respective retaliation claims neither nullifies their status as prevailing parties, nor deprives them of the right to be awarded fees. See Texas State Teachers Assn. v. Garland Indep. School District, 489 U.S. 782, 791-92 (1989) (holding that plaintiff is entitled to fee award if she has succeeded on any significant issue in the litigation which achieved some of the benefit she sought in bringing suit).
Thus, Arnold and McDaniel have sufficiently prevailed so as to entitle them to an award of fees and costs, the precise amounts of which are discussed further below.
B. Fee Calculation
As noted above, Plaintiffs seek to recover some $281,387.88 in fees and costs. Predictably, Interior takes issue with various elements of Plaintiffs' fee application and argues that any fee award must be significantly, if not radically, reduced.
It is well settled that the determination of reasonable attorney's fees calls for a three-step procedure. First, the court must determine the reasonable number of hours expended on the litigation and the reasonable hourly rates for participating attorneys. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Louisiana Power Light Co. v. Kellstrom, 50 F.3d 319, 324 (5th Cir.), cert. denied, 516 U.S. 862 (1995). The reasonable number of hours must then be multiplied by the reasonable hourly rate. Id. The product of this multiplication is the "lodestar," which may be adjusted upward or downward depending upon the circumstances of the case. Shipes v. Trinity Indus., 987 F.2d 311, 320 (5th Cir.), cert. denied, 510 U.S. 991 (1993).
In considering whether to adjust the lodestar amount upward or downward, this Court must consider the following twelve factors: (1) the time and labor required for the case; (2) the novelty and difficulty of the issues involved; (3) the skill required to litigate the case; (4) the ability of the attorney to accept other work; (5) the customary fee for similar work in the community; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances of the case; (8) the amount involved and results obtained; (9) the attorney's experience, reputation and ability; (10) the "undesirability" of the case; (11) the nature and length of the attorney-client relationship; and (12) awards in similar cases. Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), overruled on other grounds, Blanchard v. Bergeron, 489 U.S. 87 (1989). Some of these so-called "Johnson factors" are subsumed in the lodestar amount and should not be considered when making adjustments. See Shipes, 987 F.2d at 320. The Court will pay "special heed" to the time and labor involved, the customary fee, the amount in controversy and results obtained, and the experience, reputation and ability of counsel. Von Clark v. Butler, 916 F.2d 255, 258 (5th Cir. 1990).
1. Lodestar calculation
The first step in the lodestar analysis requires the Court to determine the reasonable number of hours expended by Plaintiffs' attorneys on the lawsuit, as well as the reasonable hourly rates for each of those individual attorneys and legal assistants. Plaintiffs offer detailed time records and affidavits to demonstrate that their attorneys worked a total of 1172.5 hours on this matter. Specifically, Plaintiffs claim that Richard LaFond spent 631.5 hours, Charlotte Sweeny worked 188.25 hours, Hal Gillespie spent 56 hours and Edmund Moreland spent 12.26 hours in furtherance of the lawsuit. In addition, miscellaneous legal assistants spent 284.49 hours on the case. Plaintiffs submit that reasonable hourly rates for these attorneys are $250 for Mr. LaFond, $150 for Ms. Sweeny, $350 for Mr. Gillespie and $160 for Mr. Moreland, while each legal assistant is billed at a generic rate of $75 per hour.
Unfortunately, Plaintiffs' briefs and affidavits are not entirely clear as to how many total hours each attorney or legal assistant worked. As an initial matter, Plaintiffs provide no "summary page" setting out this information. Furthermore, calls to Plaintiffs' counsel seeking clarification only resulted in data that was admittedly slightly different from the evidence presented in the motions. Accordingly, for purposes of the calculation of a fee award, the Court adopts the most reliable and consistent hourly totals from Plaintiffs' briefing. Fortunately, only those hours that are uncontested by Interior (i.e., time spent by legal assistants and a contract attorney who spent only a few hours) are implicated.
Interior's various objections to both the amount of time spent on the case and the rate of compensation are discussed below.
a. Reasonable Number of Hours Expended
In applying for fees, Plaintiffs' attorneys are required to document the time spent and the services rendered on a case, so as to enable a reviewing court to identify distinct claims. Hensley, 461 U.S. at 437. Where the Court finds the work performed to be excessive, duplicative or inadequately documented, it may strike the time or reduce the award accordingly. Id. at 433-34. The hours surviving this vetting process are those reasonably expended on the litigation. Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993).
(i). Unsuccessful retaliation claims
Interior first argues that Plaintiffs are not entitled to recover fees for their unsuccessful retaliation claims. Where Plaintiffs presented distinctly different claims for relief that were based on different facts and legal theories, work on an unsuccessful claim cannot be deemed to have been expended in pursuit of the ultimate result achieved. Hensley, 461 U.S. at 435.
The Court agrees that the unsuccessful retaliation claims were based upon sufficiently different facts and legal theories from the discrimination/promotion issue upon which Plaintiffs prevailed. Unlike the discrimination/promotion claims, none of Plaintiffs' retaliation claims survived summary judgment. Therefore, the Court will omit from the lodestar some 4.9 hours from Mr. LaFond's "running balance" of 631.5 hours, and deduct 8.6 hours from Ms. Sweeny's balance of 188.25 hours. Accordingly, the LaFond balance sits at 626.6 hours, while the Sweeny balance is 179.65 hours.
These were the only hours identified by Interior as applying to the retaliation claims. See Def. Resp. at 9.
(ii). Unsuccessful damages claims
Because Plaintiffs Arnold and McDaniel failed to receive compensatory damage awards, Interior claims that identifiable fees pertaining to such damages should be disallowed. Of the 39 hours challenged by Interior, Plaintiffs agree to reduce 32.8 of them. ( See Pl. Reply at 11-12). The Court finds the remaining contested hours to be appropriate, and declines any further reduction.
Accordingly, another 32.3 hours is deducted from the LaFond balance, leaving 594.3 hours, and .5 hours is deducted from the Sweeny balance, leaving 179.15 hours.
These deducted hours are set out more fully in Pl. Reply at 11-12.
(iii). Fees related to the McDaniel litigation
Interior asserts that some 31.16 hours should be deducted for time billed to a separate, unsuccessful litigation brought by Mr. McDaniel, captioned Allen McDaniel v. Bruce Babbitt, Secretary of the Interior, CA No. 3:96-CV-3423-G. Plaintiffs agree to deduct roughly one-half of the challenged time, or 15.5 hours ( see Pl. Reply at 12-13), but contend that the remaining hours were expended in response to a letter from Interior's attorney questioning the relevance of certain discovery requests. After reviewing the letter and the remaining challenged entries, the Court agrees with Interior that it would be inappropriate to include any of the 31.16 hours from the unrelated McDaniel action.Therefore, 10.2 hours are deducted from the LaFond balance, which now stands at 584.1 hours; another 3.4 hours are deducted from the Sweeny balance, now at 175.75 hours; some 5.3 hours are deducted from the Gillespie balance, which now stands at 50.7 hours; and 12.26 hours are deducted from the Moreland balance, which leaves him at zero.
The challenged 31.16 hours are set out at page 12 of Defendant's Response to Plaintiffs' Fee Application.
(iv). Undocumented personnel
Interior next argues that nearly $27,000 in fees are attributed to certain attorneys and legal assistants identified by initials, but never by name. Therefore, Interior argues, such hours should be struck pursuant to a magistrate judge's decision in Dibler v. Metwest, Inc., 1997 WL 222910, *7 (N.D. Tex. Apr. 29, 1997). The Court declines to follow Interior's suggestion. First, as for those hours billed at the $75 rate for legal assistants (the vast majority of the hours at issue), it is irrelevant which legal assistant performed the work because all legal assistants are billed at the same rate. Based upon the supporting affidavit of Mr. LaFond, as well as controlling precedent, the $75 rate for such work is reasonable. See, e.g. Walker v. U.S. Dept. of H.U.D., 99 F.3d 761, 770 (5th Cir. 1996).Second, as for those few hours billed at attorney rates, Plaintiffs have cured their omission by explaining the mistake and identifying the heretofore unidentified lawyers. ( See Pl. Reply, Ex. 2). Accordingly, the hours attributed to these "undocumented personnel" require no modification.
b. Hourly Rate
Having preliminarily determined that 1095.04 hours are appropriate, the next step in the lodestar analysis is to ascertain an appropriate fee structure for Plaintiffs' lawyers. See Hensley, 461 U.S. at 433; Louisiana Power Light, 50 F.3d at 324.
To this point, the LaFond balance is 584.1 hours, the Sweeny balance is 175.75 hours, the Gillespie balance is 50.7 hours and the generic legal assistant balance is 284.49 hours.
While acknowledging that Mr. LaFond and Ms. Sweeny's rates are reasonable ( see Def. Resp. at fn. 13), Interior argues that Mr. Gillespie's stated rate of $350 per hour, Mr. Moreland's rate of $160 per hour and the generic legal assistant rate of $75 per hour are unreasonable. However, while Plaintiffs' counsel submitted sworn statements by two attorneys who each practice in the relevant market, Interior offers nothing but bald assertions that these rates are too high. This is insufficient. Blum v. Stenson, 465 U.S. 886, 892 (1984). The Court has reviewed the qualifications of the attorneys in question and finds that the rates, while perhaps somewhat high, are reasonable. Furthermore, as already noted, there is nothing inherently unreasonable about a generic $75 fee for legal assistants. Therefore, without affidavit (or any other) evidence supporting Interior's argument, the Court will not downward depart on the contested hourly rates.
The Court notes that the dispute over Mr. Moreland's billing rate is irrelevant, given the prior reduction to zero of all 12.26 of Mr. Moreland's hours.
2. Adjustments to the revised lodestar amount
The Court has considered each of the factors set forth above and preliminarily finds that Plaintiffs' attorneys should be compensated for 1095.04 hours of work on this case. This represents the revised lodestar amount. The final step in the Court's lodestar analysis is review of the twelve Johnson factors, discussed above, to determine if further adjustments are warranted. See Johnson, 488 F.2d at 717-19.
The revised lodestar amount is presumed to be a reasonable fee and should be modified only in exceptional cases. See, e.g., Shipes, 987 F.2d at 320. Nevertheless, Interior argues that further reductions are warranted due to the lack of billing judgment employed, the lumping of fees and the limited success achieved at trial. Because these factors were not considered in calculating the revised lodestar amount, they may serve as a basis for adjusting the fee award. Id. The Court reviews these arguments separately.
a. Lack of Billing Judgment
Without citing a single example, Interior contends that "the Application reflects no exercise in billing judgment," and seeks a fifteen percent across-the-board reduction in Plaintiffs' fees. ( See Def. Resp. at 18). Interior does not even provide a clue as to what type or types of misjudgment the Plaintiffs' counsel engaged in. Thus, after reviewing the actual time sheets, the Court finds no merit to Interior's claim and no such reduction will be given.
b. Lumping of Fees
Arguing that the bulk of Plaintiffs' counsel's time records reflect hours that are impermissibly "lumped" together, Interior seeks an across-the-board reduction in the revised lodestar hours. Interior also contends that it is "impossible" to determine with any degree of certainty whether time spent on a given task was reasonable. (Def. Resp. at 19).
Deficient bills are indeed subject to a limitation or elimination of fee awards. Hensley, 461 U.S. at 433. However, Interior again fails to direct the Court to a single example of such improper record keeping. Still, notwithstanding this failure, even a cursory review of the time records in question reveals them to be clear enough that the Court may determine their reasonableness. No reduction on this basis is warranted.
c. Plaintiffs' Limited Success
Finally, Interior argues that Plaintiffs' fee award should be adjusted in light of the "very limited degree of success" they achieved. While a similar contention has been raised above, a few points on the subject bear repeating. For instance, although no retaliation claims prevailed, the jury found for each Plaintiff with respect to his discrimination claim. Furthermore, while Maxwell was the only Plaintiff to be awarded damages, the jury originally awarded him $450,000; the amount was reduced to $300,000 by the Court subject to a statutory cap.
In any event, applying the 1095.04 revised lodestar hours to the appropriate hourly amounts, Plaintiffs' counsel seek $211,469.25 in fees. In other words, Plaintiffs' attorneys request over two-thirds of the amount their client(s) actually brought away from the litigation. Such a circumstance is not reasonable to this Court. See Hensley, 461 U.S. at 440 (noting that courts are not to allow more than an amount that is "reasonable in relation to the results obtained").
The Fifth Circuit recently reversed a district court's fee award where fees grossly outweighed the results, holding that the court abused its discretion by failing to adequately consider the result obtained relative to the attorney's fees. Migis v. Pearle Vision, Inc., 135 F.3d 1041, 1048 (5th Cir. 1998). Even after a ten-percent reduction by the district court, the fee award was deemed offensive by the Fifth Circuit because it was over six and one-half times the amount of damages awarded: "[r]egardless of the effort and ability of [plaintiff's] lawyers, we conclude that these ratios are simply too large to allow the fee award to stand." Id.
Although the proportions are not as distorted in the present situation, this Court is convinced that, given the circumstances of this case, fees of $211,469.25 are so excessive as to require downward adjustment. See, e.g., Hadley v. VAM P T S, 44 F.3d 372, 375 (5th Cir. 1995) (where jury award was $283,000, appropriate to reduce legal fees from $144,593 to $53,000); Luther v. Z. Wilson, Inc., 528 F. Supp. 1166, 1176 (S.D. Ohio 1981) (reducing attorney's fees by 25% to bring award more into line with the amount of recovery in the case). Therefore, Plaintiffs' fees are adjusted downward by 35%, bringing the current lodestar total to $137,455.01. In the Court's judgment, this adjustment brings the attorney's fee award more into line with the benefit obtained by the Plaintiffs. Migis, 135 F.3d at 1048; Hadley, 44 F.3d at 375; Luther, 528 F. Supp. at 1176.
3. Additional fees incurred during fee petition
Finally, Plaintiffs seek, and are entitled to, fees incurred during the present phase of the litigation pertaining to fee recovery. See, e.g., Johnson v. Mississippi, 606 F.2d 635, 638-39 (5th Cir. 1979). To that end, Plaintiffs have submitted time records demonstrating that they incurred 45.3 hours in this endeavor, and move to add these hours to their revised lodestar amount. (Pl. Reply at 18).
After reviewing the time records, almost all of which are billed by Ms. Sweeny, the Court sees fit to add 15 hours onto Ms. Sweeny's hourly balance to compensate Plaintiffs for the fee phase of the litigation. Therefore, after adding these hours to Plaintiffs' fees, the current lodestar amount totals $139,705.01.
C. Miscellaneous Costs
Interior asks that Plaintiffs' computer research, courier, postage, fax, long distance telephone, and business travel costs be disallowed. Essentially, Interior argues that such costs are either not sufficiently documented or more akin to unrecoverable overhead, such that their recovery is precluded under 28 U.S.C. § 1920, the cost statute. At the same time, however, Interior concedes in a footnote that this provision is not the only source of the Court's authority to award costs in a Title VII case such as this. ( See Def. Resp. at 23, fit. 18). Indeed, 42 U.S.C. § 2000e-5(k) empowers a court to award reasonable "out-of-pocket" expenses incurred by an attorney which are normally passed along to the client. 42 U.S.C. § 2000e-5(k); Mennor v. Fort Hood Nat'l Bank, 829 F.2d 553, 557 (5th Cir. 1987). It is undisputed that where costs are reasonable, a court has discretion to award them.
After reviewing evidence of Plaintiffs' costs, the Court finds them both reasonable and taxable. Accordingly, no reduction in costs is warranted on this basis. Interior's Rule 68 argument, which has been further amplified in Defendant's Cross-Application for Costs, is discussed below. However, as that motion is denied, Plaintiffs are hereby awarded $52,120.18 in costs.
Summaries of the precise breakdown of costs can be found at page 52 of Attachments 1A, 1B and 1C to Plaintiffs' Brief in Support of Fee Application.
This Court has considered all other arguments made by both parties with respect to further adjustments to lodestar, and determines that they are without merit. Furthermore, none of the remaining Johnson factors warrant further adjustment of the lodestar amount. Johnson, 488 F.2d at 717-19.
IV. DEFENDANT'S CROSS-APPLICATION FOR AWARD OF COSTS
Pursuant to Rule 68 of the Federal Rules of Civil Procedure, Interior moves for recovery of some $7,000 in costs incurred for Plaintiffs Arnold and McDaniel after Interior sent them a September 30, 1998 letter captioned, "Offer of Judgment."
Rule 68 provides:
At any time before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against the defending party. . . . If the judgment finally obtained by the offeree is not more favorable than the offer the offeree must pay the costs incurred after the making of the offer.
Fed.R.Civ.P. 68. Where Rule 68 is found to apply, the Court has no discretion and post-offer costs must be awarded to the offeror. Johnston v. Penrod Drilling Co., 803 F.2d 867, 869 (5th Cir. 1986), citing Delta Airlines, Inc. v. August, 450 U.S. 346 (1981). The plain purpose of Rule 68 is to encourage settlement and avoid litigation. Marek v. Chesny, 473 U.S. 1, 5 (1985).
The September 30, 1998 letter to Plaintiffs' counsel offers $30,000 to Maxwell, $10,000 to Arnold and $10,000 to McDaniel, inclusive of attorneys' fees and costs. ( See Def. Cross-Application for Costs, Ex. 1). The letter then provides, in pertinent part:
This OFFER OF JUDGMENT is in satisfaction of All of Plaintiffs' claims for relief and damages. . . . This OFFER OF JUDGMENT is made to plaintiffs upon the condition that their acceptance thereof shall be made with the express stipulation and agreement by them (1) that the above-styled action and numbered clause shall be dismissed by the Court in its entirety with prejudice and (2) that the form and substance of any agreed judgment and dismissal of this action shall be approved by defendant's counsel.
(Def. Cross-Application for Costs, Ex. 1) (emphasis in original).
The Court agrees with Plaintiffs' argument that the letter cannot be selectively applied to only Arnold and McDaniel, because the alleged "offer of judgment" was conditioned upon acceptance by all three Plaintiffs. Interior responds that because the offer provides for "judgment to be taken against [Interior] by each individual," it may fairly be applied only to Arnold and McDaniel. (Def. Reply at 2). However, Interior's contention that the offer was made to Arnold and McDaniel individually is betrayed by the plain terms and greater context of the alleged offer of judgment.
As an initial matter, Interior failed to issue a separate letter to each of the three Plaintiffs, choosing instead to address each Plaintiff in a single letter. More to the point, however, is the fact that the letter unequivocally states that the "offer" is made in satisfaction "of all plaintiffs' claims," and is expressly "made to plaintiffs" on the condition that "their acceptance thereof" be made upon stipulation "by them" that the lawsuit be dismissed. (Def. Cross-Application for Costs, Ex. 1) (emphasis in original). This language plainly demonstrates that all three Plaintiffs were required to abandon their claims in order to accept the alleged offer of judgment. That being the case, Maxwell's $300,000 judgment against Interior must be applied to Arnold and McDaniel for purposes of analyzing the alleged offer. Because this amount is clearly higher than the $50,000 offered to all three Plaintiffs, Rule 68 does not operate to award Interior its post-offer costs against Arnold and McDaniel. Fed.R.Civ.P. 68.
Even if the Court believed that the offer could possibly have been directed to each Plaintiff as an individual — and, say, that one of them could have accepted the offer while the other two went to trial — rules governing contractual interpretation require that the ambiguity be construed against Interior, which drafted the offer. See, e.g., Webb v. James, 147 F.3d 617, 620 (7th Cir. 1998); Herrington v. County of Sonoma, 12 F.3d 901, 907 (9th Cir. 1993).
Given this conclusion, the Court need not reach the parties' remaining arguments on the motion. Defendant's Cross-Application for Award of Costs Against Arnold and McDaniel is denied.
V. PLAINTIFFS' MOTIONS FOR SANCTIONS
Plaintiffs move for sanctions, alternatively pursuant to Rule 11, 28 U.S.C. § 1927 and the Court's inherent power. The sole basis of these motions is Interior's filing of the its Cross-Application for Award of Costs Pursuant to FRCP 68, which was just discussed. In Plaintiffs' opinion, this motion was filed "for improper purposes, including harassment," and was "frivolous, groundless, without foundation, or brought in bad faith, having absolutely no evidentiary support and unsupported by existing case law." (Pl. Motion for Rule 11 Sanctions at 2). Plaintiffs essentially base such claims upon their opinion that the Offer of Judgment sent by the government pursuant to Rule 68, was not an offer at all.
Frankly, the Court finds it difficult to fathom why Plaintiffs filed their sanctions motions at all, let alone what pushed them to such invective.
Under any of the grounds offered by Plaintiffs to justify sanctions, they come nowhere near close to meeting their burden. As Plaintiffs should well know, Rule 11 sanctions may not be imposed merely for their disagreement with or the eventual failure of a claim; rather, sanctions are only appropriate where, at the time of the filing, the advocated position is unwarranted or in bad faith. Matta v. May, 118 F.3d 410, 415 (5th Cir. 1997).
Similarly, sanctions under 28 U.S.C. § 1927 should be employed only in instances evidencing a serious disregard for the orderly process of justice. F.D.I.C. v. Connor, 20 F.3d 1376, 1384 (5th Cir. 1994). Such punishment should be sparingly applied and requires a specific finding that the conduct was unreasonable and vexatious. Meadowbriar Home for Children, Inc. v. Gunn, 81 F.3d 521, 535 (5th Cir. 1996). Finally, sanctions under the Court's inherent power are an extraordinary measure requiring a finding of bad faith. Chambers v. NASCO, Inc., 501 U.S. 32, 49 (1991).
Here, Interior's motion, although ultimately unsuccessful, presented a reasoned discussion of applicable law and an earnest attempt to apply that law to the facts of the case. Under these circumstances, no sanction would be appropriate.
VI. PLAINTIFFS' MOTION FOR LEAVE TO SUPPLEMENT RECORD
Finally, Plaintiffs seek Leave to Supplement the Record with a copy of Interior's brief on appeal, which purportedly contradicts its position here by affirming Plaintiffs' entitlement to attorneys' fees and costs. According to Plaintiffs, this contradiction impacts their Application for Award of Reasonable Attorneys' Fees, Defendant's Cross-Application for Award of Costs, and Plaintiffs' Motions for Sanctions.
Upon reviewing Plaintiffs' motion, the Court finds that the new information neither alters the outcomes already discussed nor warrants inclusion in the record. Accordingly, Plaintiffs' Motion for Leave to Supplement the Record is denied as moot.
VII. CONCLUSION
For the foregoing reasons, Plaintiffs' Motion for Injunctive Relief is DENIED, Plaintiffs' Motion to Admit Exhibits for Consideration of Motion for Injunction Relief is DENIED AS MOOT, Plaintiffs' Application for Award of Reasonable Attorneys' Fees is GRANTED IN PART and DENIED IN PART, Defendant's Cross-Application for Award of Costs is DENIED, Plaintiffs' Motions for Sanctions are DENIED, and Plaintiffs' Motion for Leave to Supplement the Record is DENIED AS MOOT.
Pursuant to the terms of set forth above, Plaintiffs are entitled to recover $139,705.01 in attorneys' fees and $52,120.18 in costs.
So ordered.
Signed this 6th day of April, 2000.