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denying counsel's request for $125,000 in CJA fees, but granting payment for $5,200
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CAUSE NO. NA 03-1-CR-1 H/N
April 13, 2004
ENTRY ON MOTION FOR NUNC PRO TUNC APPOINTMENT OF COUNSEL UNDER CRIMINAL JUSTICE ACT
Defendant John Littlehale pled guilty on the eve of trial and has been sentenced. His attorneys, Joseph J. Aronica and the law firm of Duane Morris LLP, have moved for a nunc pro tunc appointment under the Criminal Justice Act (CJA), 18 U.S.C. § 3006A. These attorneys have requested $125,000 in fees and $8,709.78 in expenses. The requested fees are well below the market rates of the attorneys involved, and they cover only a portion of the time spent on the case after Littlehale and his wife filed for bankruptcy, at which point the court can assume Littlehale met the financial criteria for appointment of counsel under the CJA. As explained below, the court grants the motion for nunc pro tunc appointment and approves payment, but only of $5,200, which is the presumptive limit under the CJA for representation of a defendant in a felony case. The CJA is not intended to bail out law firms that make bad business decisions in representing clients. It is fair, nevertheless, to provide payment under the CJA in an amount that taxpayers would have paid in any event if Aronica and Duane Morris had not been required by the court to go forward with the case.
I. Aronica's Representation of Littlehale
Attorney Aronica began representing Littlehale in late summer 2002, several months before the indictment was returned in this case. At that time, Aronica was a partner in the Washington, D.C., office of the Porter Wright law firm based in Columbus, Ohio. Aronica was not the billing partner on the matter. He knew little about the financial arrangements with Littlehale. On February 4, 2003, after Littlehale was indicted, Aronica and a Porter Wright associate entered appearances in this court as counsel for Littlehale.
In April 2003, Aronica and the associate changed law firms and moved from Porter Wright to Duane Morris, also in Washington. At that time, Littlehale indicated that he wanted his file to move with Aronica to the Duane Morris law firm. At that time, however, Aronica learned that Littlehale had not paid any of his bills from Porter Wright, posing an unpleasant business prospect for Aronica and his new law firm. Aronica asked Littlehale for a retainer of approximately $100,000 to continue the representation by Duane Morris. Littlehale responded by trying to hire a different law firm, but he never reached agreement with the other firm. In early July 2003, Littlehale and his wife filed for protection under the bankruptcy laws.
On July 18, 2003, Aronica filed a motion for leave to withdraw as counsel. The court held a hearing on July 30, 2003, and denied the motion for reasons stated on the record. In essence, the court found that the Porter Wright had made a bad business decision in its management of the relationship with Littlehale, but that the taxpayers should not step in to rescue Porter Wright from that mistake. As Chief Judge Bazelon wrote, the CJA should not be transformed into a form of "federal fee insurance." United States v. Thompson, 361 F. Supp. 879, 887 (D.D.C. 1973), vacated in part, aff'd in part without opinion, 489 F.2d 1273 (D.C. Cir. 1974), and overruled on other grounds by United States v. Hunter, 394 F. Supp. 997 (D.D.C. 1975). The court further found that Aronica's voluntary decision to leave Porter Wright should not change the approach to the situation. The court stated on the record, however, that it would consider the possibility that Aronica and Duane Morris might be entitled to compensation under the CJA for work done after July 30, 2003, since it was clear at that time that Littlehale was indigent for purposes of the CJA.
After that hearing, Aronica and Duane Morris prepared for trial, which was scheduled for September 8, 2003. Over the weekend before the trial, the parties reached a plea agreement. Littlehale pled guilty to Count Two on September 8, 2003. On January 13, 2004, the court sentenced Littlehale to 18 months in prison.
II. The Request for Fees and Costs
Aronica and Duane Morris have asked for $125,000 in attorney fees for their time from July 30, 2003, plus expenses after that date totaling $8,709.78. The request does not include $32,979 in attorney fees in 2003 after July 30th, and also does not include $18,489.50 in attorney fees for 2004. The fee requests are based on hourly rates as high as $455, well above the $90 CJA limit applicable in 2003.
III. Discussion
The CJA authorizes retroactive appointments of defense counsel. 18 U.S.C. § 3006A(b). The CJA also allows appointment if the court finds that the defendant is "financially unable to pay counsel whom he had retained." More specifically, the CJA provides:
If at any stage of the proceedings, including an appeal, the United States magistrate judge or the court finds that the person is financially unable to pay counsel whom he had retained, it may appoint counsel as provided in subsection (b) and authorize payment as provided in subsection (d), as the interests of justice may dictate.18 U.S.C. § 3006A(c). Payments under the CJA are subject to presumptive limits of $5,200 in a felony case, though that limit may be waived for "extended or complex representation," if the trial court certifies, with the approval of the Chief Judge of the Circuit, that the excess amount is needed to provide fair compensation. 18 U.S.C. § 3006A(d)(2) (d)(3).
As the court explained on July 30, 2003, the court saw no compelling reason to have taxpayers rescue Aronica and his law firms from a poor business decision to represent a client on credit. At the time of the July 30, 2003 hearing, however, it was clear that Littlehale was indigent and would have been entitled to representation under the CJA.
The court addressed at that hearing the complications presented by Aronica's voluntary decision to change law firms, but will not dwell on those matters here.
When a defendant becomes indigent, he often wants his privately retained but unpaid or underpaid attorney to continue to represent him. The attorney may be willing to do so in some cases, at least if modest compensation is available under the CJA. Courts faced with similar requests have been cautious about them. Such courts want to ensure that they are neither being manipulated into allowing a defendant to select his own attorney under the CJA nor having taxpayers provide a form of fee insurance to retained counsel. See United States v. Thompson, 361 F. Supp. at 887-89 (remanding for further determinations about defendant's finances and other factors); accord, United States v. Calle, 178 F. Supp.2d 309, 311 (E.D.N.Y. 2001) (denying nuncpro tune appointment under CJA for attorney who had already been paid nearly the presumptive limit under the CJA); United States v. Zaccaria, 1997 WL 642985, *2-3 (W.D.N.Y. April 11, 1997) (appointing retained attorney under CJA after being satisfied that case was unusual and court was not being manipulated to guarantee fee payments); United States v. Herbawi, 913 F. Supp. 170, 171-72 (W.D.N.Y. 1996) (same, after superseding indictment expanded scope of case beyond what the retained attorney had agreed to handle); United States v. Rodriquez-Baquero, 660 F. Supp. 259, 260-61 (D. Me. 1987) (denying motion to withdraw and motion for CJA appointment); United States v. Gipson, 517 F. Supp. 230, 230-32 (W.D. Mich. 1981) (denying motion for appointment of counsel under CJA where retained attorney had continuing duty to represent defendant).
As Judge Bazelon explained in Thompson, this problem is not subject to a hard and fast rule. It requires consideration, among other factors, of the extent of the attorney's work, the knowledge the attorney had of the defendant's inability to pay, and the attorney's willingness to have all work on the case compensated at CJA rates. 361 F. Supp. at 889. In this case, these factors support a nunc pro tunc appointment that will pay the attorneys no more than taxpayers would have paid if the case had been handled under the CJA from the outset. The attorneys here had done extensive work on the case before they sought to withdraw. They did most of their work before learning of the defendant's inability to pay. There is no indication that either the attorneys or the defendant were trying to game the CJA system. In fact, Aronica and Duane Morris wanted to withdraw without payment of a dime, and they had no desire to continue under the CJA. As noted, the court denied their request to withdraw. However, even if the attorneys and law firms had made better business decisions and had never begun to represent Littlehale, taxpayers still would have incurred liability for standard CJA representation of Littlehale. That amount provides a fair measure of compensation under these circumstances.
This court is aware of the decision in United States v. Alexander, 742 F. Supp. 54 (N.D.N.Y. 1990), in which the court flatly denied a post-sentencing petition by a privately retained attorney for appointment and additional compensation under the CJA. This case differs in several respects. First, in Alexander there was no indication that the defendant had become indigent during the course of the proceedings, such that an appointment under the CJA would have been permissible pursuant to 18 U.S.C. § 3006A(c). In this case, defendant Littlehale filed for bankruptcy while his case was pending. Second, in Atexander there was no indication that the issue of possible CJA appointment had been raised while the case was still pending. In this case, the issue was raised in the July 30, 2003 hearing, but the press of the imminent trial date led to postponement of the CJA issues until now. Third, in Atexander the retained attorney had been paid more than $11,000, well above the presumptive limit under the CJA. The court noted that the CJA was not intended to provide income to defense counsel. Accord, United States v. Calle, 178 F. Supp.2d 309, 311 (E.D.N.Y. (2001) (denying nunc pro tunc appointment under CJA where retained counsel had already collected $5,000 from client). In this case, Littlehale never paid a penny to Porter Wright or to Duane Morris. Any compensation under the CJA will fall far short of the compensation Aronica and Duane Morris might have expected from a paying client. It is nevertheless fair to charge taxpayers the amount for defense of an indigent defendant that they would have incurred if Aronica and Duane Morris had never been involved in the case.
In this case, the court finds that a total payment under the CJA of $5,200, the maximum available without a waiver, is justified and required in the interests of justice. The court is not convinced that the interests of justice require any additional sum. The question is not, in the court's mind, just how much time Aronica and other Duane Morris lawyers reasonably spent on the case or how much they incurred in expenses. The question is what would have been reasonable compensation for an attorney from this court's usual CJA panel if the court had granted Aronica's motion to withdraw and had appointed a new attorney. Those are the expenses to taxpayers that were avoided by having Aronica and Duane Morris continue their representation after it became apparent that Littlehale was indigent.
The fact that Aronica had not become a member of this court's CJA panel is not troubling here. Aronica is obviously highly qualified to represent accused defendants in federal courts. He has more than 30 years experience as a federal prosecutor and as a defense attorney. Any court should feel pleased to have someone of his ability and experience willing to provide services under the CJA.
This case was a "white collar" case against a corporate executive. It involved a considerable volume of documents. At bottom, however, the core of the case was relatively straightforward — whether the government could prove that Littlehale knew an air pollution permit application was false when he signed it on behalf of his company. The case would have taken several days to try, but it was not unduly complicated. Though the case required full trial preparation, it did not result in a trial. The representation in question, after Littlehale declared bankruptcy, was neither "extended" nor unusually complex.
The court would not have appointed more than one attorney to represent Littlehale. The court also would have expected that attorney to prepare efficiently for trial, with the cooperation of Littlehale's previous lawyers. Aronica and his colleagues used a team approach to the case and no doubt did a superb job of preparing for trial. Their efforts along those lines, however, are not the measure this court has applied in evaluating the reasonableness of the fee request.
The CJA would not authorize payment at Aronica's and Duane Morris's customary hourly rates. Also, the court has not considered the travel expenses and other additional expenses that Aronica and other attorneys incurred as a result of their decision to appear in this court.
The total amount of fees and expenses requested by Aronica and Duane Morris in this one case, even with their substantial exclusions and discounts, is more than 20 percent of the total CJA panel attorney payments for all Southern District of Indiana cases in 2003, which paid for counsel for more than 100 defendants.
For the foregoing reasons, pursuant to 18 U.S.C. § 3006A(b) 85(c), the court grants the motion of Joseph J. Aronica and Duane Morris LLP for appointment as counsel as of July 30, 2003, nunc pro tunc. The court is approving payment under the CJA, but only in the amount of $5,200.
So ordered.