Opinion
Civ. No. AMD 98-4060.
April 18, 2000.
MEMORANDUM
On December 17, 1999, I granted plaintiff Associated Utilities Contractors' ("AUC") motion for summary judgment, in part, and enjoined defendant Mayor and City Council of Baltimore from enforcing its affirmative action goals for minority and women owned business participation in City construction contracts. On February 16, 2000, I denied the City's motion for stay of the order, and I dismissed the case, concluding that the injunction against reliance on numerical goals had provided AUC with complete relief. Associated Utility Contractors of Maryland, Inc. v. Mayor and City Council of Baltimore, 83 F. Supp.2d 613 (D.Md. 2000). Now pending is AUC's motion for attorney's fees, filed pursuant to The Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988(b). AUC requests $155,291.38 in fees and costs. On the basis of the findings and conclusions set forth herein, I am persuaded that as the prevailing party in this civil rights suit, AUC is entitled to an award in the amount of $141,641.67.
(i)
AUC filed this action to challenge as violative of Equal Protection the continued implementation of the affirmative action program created by Baltimore City Ordinance 610, Balt. City Code §§ 217-226B ("the Ordinance"). The Ordinance was enacted in 1990 and authorizes the City to establish annual numerical set-aside goals applicable to a wide range of public contracts, including construction subcontracts. AUC filed a motion for summary judgment, which the City and intervening defendant Maryland Minority Contractors Association, Inc. ("MMCA") opposed. On December 17, 1999, I issued an order granting in part and denying in part the motion for summary judgment ("the December injunction"). Specifically, as to construction contracts entered into by the City, I enjoined enforcement of the Ordinance (and, consequently, continued implementation of the affirmative action program it authorizes) with respect to the City's 1999 numerical set-aside goals for Minority- and Women-Owned Business Enterprises ("MWBEs"), which had been established at 20% and 3%, respectively. I denied the motion for summary judgment as to the plaintiff's facial attack on the constitutionality of the Ordinance, concluding that there existed "a dispute of material fact as to whether the enactment of the Ordinance was adequately supported by a factual record of unlawful discrimination properly remediable through race- and gender-based affirmative action."
The City appealed the injunction to the United States Court of Appeals for the Fourth Circuit. The City also brought a motion here to stay the injunction pending appeal, and I denied that motion on February 16, 2000. In addition, I concluded that because the injunction afforded AUC full relief, no further proceedings were necessary or appropriate in the district court and I dismissed the case without prejudice.
(ii)
AUC's counsel, Miller, Miller Canby, contend that they should recover a fully compensatory fee with costs, because despite my denial of the motion for summary judgment as to the issue of the facial unconstitutionality of the Ordinance, they obtained full relief. For the reasons stated below, I agree.
As amended, 42 U.S.C. § 1988(b) provides in pertinent part that "[i]n any action or proceeding to enforce a provision of section . . . 1983 . . . the court, in its discretion, may allow the prevailing party . . . a reasonable attorney's fee as part of the costs." Because AUC's motion for summary judgment was granted in significant part, it obtained full relief and the case was dismissed without prejudice, AUC is clearly the prevailing party here. Moreover, AUC should obtain a fully compensatory award for its legal work on the case because, despite the dismissal without prejudice of one of its discrete legal claims — i.e., that the Ordinance was facially unconstitutional — the case really involved only one claim with one set of facts and plaintiff obtained full relief as to that claim. See Hensley v. Eckerhart, 461 U.S. 424, 434-5 (1983). AUC sought to enjoin enforcement of the MWBE set aside goals as violative of Equal Protection, and that is precisely the relief it obtained.
(iii)
AUC's counsel also request an upward adjustment of the fee required by the retainer agreement they entered with their client at the commencement of the litigation. They argue that they agreed to represent AUC at a fee lower than that which they customarily charge to clients, in order to absorb some of the risk that this civil rights suit might not succeed. Thus, they contend that in light of the exceptional results they obtained, the efficiency with which they pursued the case, and the risk they assumed, an upward adjustment is warranted. I disagree.
Section 1988(b) is part of the Congressional scheme to promote enforcement of constitutional and civil rights law by private parties. Hughes v. Rowe, 449 U.S. 5, 14 (1980). The Supreme Court has established "a strong presumption" that the lodestar figure — the product of reasonable hours times a reasonable rate — represents the "reasonable" fee, and has placed upon the fee applicant who seeks an award in excess of the lodestar figure the burden of showing that "such an adjustment is necessary to the determination of a reasonable fee." City of Burlington v. Dague, 505 U.S. 557, 562 (1992) (quotations and citations omitted). What is "reasonable" is specifically committed to the discretion of the trial judge. A contractual fee agreement may be a factor in this judgment, but it not necessarily dispositive. Blanchard v. Bergeron, 489 U.S. 87, 93, 96 (1989). As the Supreme Court explained in Blanchard:
The presence of a pre-existing fee agreement may aid in determining reasonableness. The fee quoted to the client . . . is helpful in demonstrating the attorney's fee expectations when he accepted the case.Id. at 93 (quotations and citations omitted). Congress specifically intended the attorney's fees provision to "make it easier for a plaintiff of limited means to bring a meritorious suit." Hensley, at 420. But it was not intended to compensate a prevailing plaintiff for the risk of loss. Dague, 505 U.S. at 575.
Work necessitated by risky novel claims or extensive fact investigations is already compensated as part of the full recovery for reasonable time spent. Difficult cases will already produce higher lodestar fees, either because of the higher number of hours expended to overcome the difficulty, or in the higher hourly rate of the attorney skilled and experienced enough to do so. Id. at 562. To permit a fee enhancement based upon risk would permit double dipping, Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 483 U.S. 711, 726-27 (1987), and would only serve to encourage the filing of frivolous claims. See Dague, 505 U.S. at 563 ("[E]nhancment for the contingency risk posed by each case would encourage meritorious claims to be brought, but only at the social cost of indiscriminately encouraging nonmeritorious claims to be brought as well.").
At the commencement of this litigation, AUC's attorneys entered into a fee contract with AUC as a paying client, to receive billable compensation for Mr. Gough's time expended at a rate of $150 per hour, for Mr. Epner's time at $170 per hour, and for paralegal time at $40 per hour. They seek an upward adjustment of these fees to $170 per hour for Mr. Gough, $200 for Mr. Epner, and of $65 for paralegals, in accordance with this court's Lodestar Guidelines. I decline to do so for two reasons.
First, AUC, as a fee-paying client of attorneys in private practice, is not a civil rights plaintiff "of limited means" as contemplated by the framers of Section 1988. AUC is a consortium of private, profit-making construction firms which, as a collective, has ample funds at its disposal. This is obvious from the fact of the fee agreement it entered with Miller, Miller Canby. As the Supreme Court stated in Blanchard, "Congress did not intend the calculation of fee awards to vary depending upon whether plaintiff was represented by private counsel or by a nonprofit legal services corporation." Blanchard, 489 U.S. at 94-95 (holding that nonprofit lawyers should be compensated at prevailing market rates, despite their failure to charge client any fee). However, neither did Congress intend § 1988 to provide a windfall for private parties operating strictly within the confines of the free market for legal representation. The contractual fee represents Miller, Miller Canby's realistic expectations for a reasonable fee in this case, and I am not convinced there is reason to override that expectation.
Second, Miller, Miller Canby seeks an upward adjustment because of the novelty and difficulty of the issues involved, their "exceptional" success, and to compensate them for their assumption of risk. While AUC's attorneys unquestionably did excellent work in this case, the conclusion is unavoidable that they will be fully compensated, without any enhancement, for the hours necessitated by the extensive fact investigation and by the complex constitutional issues, some of them issues of first impression in this Circuit. While I agree that AUC obtained the full relief it requested, I do not view this success as "exceptional" given that the City did not proffer even a scintilla of evidence to support its promulgation of numerical goals, even in the face of a firmly-rooted constitutional requirement of compelling statistical evidence. Perhaps most importantly, as explained above, § 1988 does not permit the enhancement of fees to compensate contingency risks. For all of these reasons, the law firm will be held to the contractually specified fees: Mr. Gough at $150 per hour, Mr. Epner at $170 per hour, and paralegal time at $40.
(iv)
The next step is to determine the reasonable hours expended by AUC's attorneys. In general, Miller, Miller Canby's time records are detailed, well-organized and reflect a reasonable and efficient prosecution of this action. The City's arguments that AUC's attorneys spent inordinate amounts of time working on motions, discovery, and preparation for oral argument are unavailing. Competent representation in this case required extensive legal and factual research and careful management of voluminous documentation. AUC's attorneys' work was always thorough, professional and of the highest quality.
The City argues that AUC should not be permitted to bill for two attorneys' attendance at the hearing on its motion to dismiss. The Local Rules authorize a departure from the ordinary "one attorney per hearing" rule, however, when the case is complicated, documentation is extensive, and when the opposing side brought more than one attorney. See Rules of The United States District Court (Md.), Appendix B , Rules and Guidelines for Determining Lodestar Attorneys' Fees in Civil Rights and Discrimination Cases, 2(d). Because all of these factors were present in respect to the hearing on the City's motion to dismiss, I will allow the 1.5 hours Mr. Gough claims for attending the hearing, although Mr. Epner was also present. Nevertheless, I shall otherwise reduce AUC's hours and costs for the reasons which follow.
The Fourth Circuit stated in Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169, 176 (4th Cir. 1994), that "[t]he legitimate goals of litigation are almost always attained in the courtroom, not in the media." In keeping with this sage admonishment, I will disallow the hours plaintiffs' attorneys claim for case publicity. I will disallow Mr. Gough's .10 hour and .5 hour on November 11, 1999, and his .2 hour on December 22, 1999, because each of these entries includes press work (conversations about and for coverage in the local media), and work to publicize the litigation. In addition, I shall disallow the 1.60 hours billed by Mr. Gough on June 29, 1998, because an unspecified part of that time was spent developing "points for fundraising/support of lawsuit." Time spent raising funds to finance the litigation cannot be charged against the nonprevailing party. Thus, I will reduce Mr. Gough's hours by 2.4 hours for a total claim of 480.65 hours.
For similar reasons, I shall disallow Mr. Epner the claimed 1.5 hours on December 14, 1998, because an unspecified portion of that time was spent preparing a "press release." I shall disallow the 1.3 hours claimed on November 9, 1999, because an unspecified amount of that time was spent responding "to press inquiry re: oral argument of summary judgment motion." I shall also disallow the .80 hour Mr. Epner claims on November 10, 1999, because part of that time was spent responding "to press inquiry re: summary judgment argument." Thus, I shall reduce Mr. Epner's hours by 3.6 hours, leaving a total claim of 341.8 hours.
Further reductions are warranted because, as the Fourth Circuit has held, "intervention related fees and expenses . . . are not recoverable under 42 U.S.C. § 1988 by a prevailing plaintiff against a losing defendant." Rum Creek, 31 F.3d at 178. AUC acknowledges that it cannot recover for its work opposing the motion to intervene filed by MMCA and it has reduced its request by $6,683. AUC does contend, however, that it should be able to charge the City for work its attorneys performed opposing MMCA's Motion to Reopen Discovery and for other work conducted in response to MMCA's intervention. AUC argues that because the City joined in MMCA's discovery motion, it was essentially a City motion. However, MMCA's principal argument, that it had been precluded from any discovery because of its late entry in the case, was not an argument the City could have made on its own. Accordingly, Rum Creek militates against an award to AUC for any of its attorneys' work responding to MMCA's motions. Thus, as indicated in the table below, I shall disallow the hours expended by AUC's attorneys reviewing, researching and responding to MMCA's papers.
Reduction in Hours for Mr. Gough
Date Task Hours
5/24/99 Review MMCA Motion to Intervene 1.0 5/24/99 Review files; research caselaw re: intervention 1.0 5/25/99 Review caselaw re: intervention 1.5 5/25/99 Conduct further research in intervention 1.5 5/25/99 Phone call re: AGC v. New Haven 0.3 6/2/99 Research re: appeal of denial of intervention 1.5 6/7/99 Review response to motion. to intervene 0.4 8/10/99 Review correspondence from Adam Harrison 3.5 8/11/99 Research intervention 1.0 8/16/99 Confer. w/MSE; research intervention 1.5 8/16/99 Review draft Opp. to MMCA M. to Extend Disc. 0.6 9/9/99 Review MMCA response to summary judgment 1.0 9/15/99 Draft additional points re: MMCA response. 2.0
Total: 16.8 hours disallowed
Reduction in Hours for Mr. Epner
Date Task Hours
5/25/99 Conference w/REG re: intervention 0.1 5/27/99 Review and research re: intervention 4.0 5/28/99 Continued research re: intervention 6.0 6/1/99 Research re: intervention 5.0 6/3/99 Preparation of Opp. to M. to Intervene 6.0 6/4/99 Continued preparation of Opp. to M. to Intervene 5.0 6/5/99 Complete preparation of Opp. to M. to Intervene 4.8 6/7/99 Revise and file Opp. to Intervention 1.0 8/15/99 Prepare Opp. to MMCA M. to extend discovery 4.5 8/16/99 Complete draft Opp. to MMCA M. to Reopen Discovery 4.5 8/17/99 Complete and file Opp. to MMCA M. Reopen Disc. 1.1 9/9/99 Review MMCA response to summary judgment 1.2 11/16/99 Review post-judgment submission of MMCA 0.3
Total: 43.5 hours disallowed
Because Rum Creek prohibits both fees and expenses for intervention-related work, I will also reduce AUC's claim for on-line research services. AUC claims a total of $8,871.64 for on-line research. This figure is not disaggregated to reflect what research time was spent researching what issues. Accordingly, I am left to make an estimate based upon the ratio between total attorney hours expended and dollars of on-line research charged. Eliminating "publicity" work, Mr. Epner devoted a total of 341.8 hours and Mr. Gough 480.65 in the successful prosecution of this case. Total attorney time was therefore 822.45 hours. In those hours, the attorneys used $8,871.64 of on-line research. As explained above, I shall disallow 60.3 of those attorney hours (Gough 16.8, Epner 43.5) because they were devoted to responding to MMCA. Because 60.3 is 7.3% of 822.45, I will reduce the on-line research charges by 7.3%. Seven point three percent of $8,871.64 is $647.63. Thus, the total initial allowed on-line research cost is $8,224.01. In addition, AUC requests reimbursement for $1,463.33 spent on computer research related to its filing of its Reply in Support of its Motion for Fees and Costs. The reply did not treat novel or difficult legal issues necessitating extensive legal research, however, and the requested amount is therefore out of line with what was reasonable. Accordingly, I shall allow only $200.00 for the supplemental computer research.
While I would also reduce copying, phone, and courier service fees related to MMCA motions, these costs are not separately itemized and these costs are likely to be minimal. On-line research services, however, are costly.
I reject the City's argument that on-line research is covered by overhead expenses and is already incorporated in the lodestar attorney's fee. Section 4 of the Local Rules and Guidelines for Determining Lodestar Attorney Fees in Civil Rights and Discrimination Cases explicitly authorize reimbursement for on-line research costs.
AUC's claimed in-house photocopying reimbursement is reduced because it is calculated at the rate of $.20 per page; the Local Guidelines permit reimbursement at $.15 per page. As indicated in Mr. Gough's Supplemental Affidavit, AUC made 16,401 copies in-house as of January 3, 2000. Thus, the initial total in-house copy reimbursement will be $2,460.15. Documentation for AUC's Supplemental Request indicates that an additional 994 in-house copies were made in conjunction with preparing and filing its Reply and Supplemental Request and supporting documents. Thus, at $.15 per copy, AUC is entitled to $149.10 reimbursement.
The final calculation of fees and costs is presented in the table which follows:
Mr. Gough Initial Fee Request
463.45 hours Rate: $150/hour Total: $69,517.50
Mr. Epner Initial Fee Request
298.3 hours Rate: $170/hour Total: $50,711.00
Paralegals Initial Fee Request
64.8 hours Rate: $40/hour Total: $2,592.00
Mr. Gough Supp. Request
25.4 hours Rate: $150/hour Total: $3,810.00
Mr. Epner Supp. Request
2.6 hours Rate: $170/hour Total: $442.00
Photocopying in-house Initial Request
$2,460.15 Supplemental $149.10 Total: $2,609.25
Photocopying Commercial
Total: $1909.57
Couriers
Initial Request: $357.77 Supplemental: $68.00 Total: $425.77
Phone; Fed-X, transcripts, filing fee, etc.
Initial Request: $1,200.57 Total: $1,200.57
On-line computer research
Initial Request: $8,224.01 Supplemental: $200.00 Total: $8,424.01
TOTAL: $141,641.67
(v)
For the foregoing reasons, I shall grant AUC's Motion for Attorney's Fees and make an award in the amount of $141,641.67. A separate order follows.
ORDER
In accordance with the foregoing Memorandum, it is this 18th day of April, 2000, by the United States District Court for the District of Maryland ORDERED
(1) That the plaintiff's motion for attorney's fees is GRANTED; and it is further ORDERED
(2) That Plaintiff Associated Utility Contractors Association, Inc. is AWARDED attorney's fees and costs in the amount of $141,641.67, AND JUDGMENT IN THE AMOUNT OF ONE HUNDRED FORTY ONE THOUSAND, SIX HUNDRED FORTY-ONE DOLLARS AND SIXTY-SEVEN CENTS IS HEREBY ENTERED IN FAVOR OF ASSOCIATED UTILITY CONTRACTORS ASSOCIATION, INC., AGAINST DEFENDANT, THE MAYOR AND CITY COUNCIL OF BALTIMORE; and it is further ORDERED
(3) That the Clerk shall TRANSMIT copies of the foregoing Memorandum and this Order to all counsel of record.