holding that plaintiff's rejection of settlement offer was substantially justified where District offered only $300 for 15.4 hours of attorney timeSummary of this case from S. H. v. Mount Diablo Unified Sch. Dist.
Civil Action No. 13–1294(JMF)
Carolyn W. Houck, Law Offices of Carolyn W. Houck, Washington, DC, for Plaintiffs. Tasha Monique Hardy, Office of Attorney General, Washington, DC, for Defendant.
District's motion granted in part and denied in part; parents' motion denied.
Carolyn W. Houck, Law Offices of Carolyn W. Houck, Washington, DC, for Plaintiffs. Tasha Monique Hardy, Office of Attorney General, Washington, DC, for Defendant.
MEMORANDUM OPINION AND ORDER
JOHN M. FACCIOLA, UNITED STATES MAGISTRATE JUDGE
This case was referred to me for all purposes. Currently pending and ready for resolution are 1) Plaintiffs' Motion for Summary Judgment [# 14], and 2) Defendant's Opposition to Plaintiffs' Motion for Summary Judgment and Cross–Motion for Summary Judgment [# 16].
Plaintiffs in this case are 1) Lakesia Brighthaupt and her child, J.B.; 2) Monica Browne and her child, M.Y.; and 3) Ja'Quelle Yeager and her child, J.Y. Complaint [# 1] ¶¶ 2–4. The defendant is the District of Columbia, which operates the District of Columbia Public Schools system (“DCPS”). [# 1] ¶ 5. In this action, plaintiffs seek an award of attorney's fees under the Individuals with Disabilities Education Act, 20 U.S.C. § 1400, et seq. (“IDEA”).
All references to the United States Code or the District of Columbia Code are to the electronic versions that appear in Westlaw or Lexis.
On December 11, 2012, an administrative due process hearing under the IDEA was held as to J.B. [# 1] ¶ 8. On December 28, 2012, the Hearing Officer (“HO”) issued a determination finding that Lakesia Brighthaupt and J.B. were prevailing parties. Id. On June 20, 2013, plaintiffs submitted a fee petition for $31,276. [# 1] ¶ 9. The parties engaged in settlement discussions but were unable to agree on an amount. [# 1] ¶ 10. On August 27, 2013, plaintiffs filed the current complaint seeking the full amount originally claimed. [# 1] ¶ 11.
On April 15, 2013, an administrative due process hearing under the IDEA was held as to M.Y. [# 1] ¶ 12. That same day, the HO issued a determination finding that Monica Browne and M.Y. were prevailing parties. Id. On June 20, 2013, plaintiffs submitted a fee petition for $24,664. [# 1] ¶ 13. The parties engaged in settlement discussions but were unable to agree on an amount. [# 1] ¶ 14. On August 27, 2013, plaintiffs filed the current complaint seeking the full amount originally claimed. [# 1] ¶ 15.
On April 3, 2013, an administrative due process hearing under the IDEA was held as to J.Y. [# 1] ¶ 16. On April 4, 2013, the HO issued a determination finding that Ja'Quelle Yeager and J.Y. were prevailing parties. Id. On June 23, 2013, plaintiffs submitted a fee petition for $31,707. [# 1] ¶ 17. The parties engaged in settlement discussions but were unable to agree on an amount. [# 1] ¶ 18. On August 27, 2013, plaintiffs filed the current complaint seeking the full amount originally claimed. [# 1] ¶ 19.
I. Standard of Review
Motions for summary judgment are governed by Rule 56 of the Federal Rules of Civil Procedure, which states that “[t]he court shall grant summary judgment if the movant shows that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
II. Applicable Law
Pursuant to the IDEA, the Court “in its discretion, may award reasonable attorneys' fees as part of the costs ... to a prevailing party who is the parent of a child with a disability.” 20 U.S.C. § 1415(i)(3)(B). The statute further provides that “[f]ees ... shall be based on rates prevailing in the community in which the action or proceedings arose for the kind and quality of services furnished.” 20 U.S.C. § 1415(i)(3)(C).
According to the Supreme Court, “[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” in order to arrive at the total or “lodestar” amount. Hensely v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). In the District of Columbia Circuit, “a fee applicant's burden in establishing a reasonable hourly rate entails a showing of at least three elements: the attorneys' billing practices; the attorneys' skill, experience, and reputation; and the prevailing market rates in the relevant community.” Covington v. Dist. of Columbia, 57 F.3d 1101, 1107 (D.C.Cir.1995).
A. Plaintiffs were Prevailing Parties
Defendant does not contest plaintiffs' status as prevailing parties in this matter. See generally [# 16]. Thus, the only issue before the Court is whether the fees plaintiffs seek are reasonable. B. Plaintiffs' Counsel's Fees
1. Houck's Billing Practices
Plaintiffs' counsel, Carolyn Houck, seeks an hourly rate of $435. [# 14–13] at 2. According to Houck, her hourly rates are slightly lower than those provided by the Laffey matrix, which indicates that an hourly rate of $445 is appropriate for an attorney with her experience practicing in 2012–2013. Id.
2. Houck's Skill, Experience, and Reputation
Houck was admitted to the Bar of the State of Maryland in 1997 and the Bar of the District of Columbia in 1998. [# 14–13] at 2. She has specialized exclusively in special education law since 1997, representing “hundreds of clients in more than 1600 due process hearings or settlement agreements.” Id.
3. Prevailing Market Rates
Although use of the Laffey matrix to determine reasonable hourly rates in IDEA cases is not automatic, several judges of this Court have relied on it as an appropriate starting point for determining rates of reimbursement for attorneys who challenge the decisions of the DCPS. Where the issues are complex, the full Laffey rate has been awarded by some members of this Court. See A.S. v. Dist. of Columbia, 842 F.Supp.2d 40, 48–49 (D.D.C.2012) (awarding Laffey rates upon finding that the hearing lasted four days, there were 105 proposed exhibits, there were ten witnesses, and the hearing officer's determination was 28 pages long); Bucher v. Dist. of Columbia, 777 F.Supp.2d 69, 74 (D.D.C.2011) (awarding Laffey rates upon finding that the hearing lasted four days, there were 42 proposed exhibits, and there were twenty one proposed witnesses); Jackson v. Dist. of Columbia, 696 F.Supp.2d 97, 102 (D.D.C.2010) (noting that an IDEA administrative proceeding that requires expert testimony is sufficiently complex to warrant application of the Laffey matrix).
This is not to suggest that fees are not discounted on other grounds.
Where the issues are not complex, in that there are “no pre-hearing interrogatories or discovery, no production of documents or depositions, no briefings of intricate statutory or constitutional issues, no pre-trial briefings, no lengthy hearings, no protracted arguments, and few, if any, motions filed,” some judges have concluded that use of the Laffey matrix is not appropriate, and instead, have awarded some fraction of the Laffey rate. See Cousins v. Dist. of Columbia, No. 11–CIV–172, 2012 WL 1439033, at *5 (D.D.C. Apr. 26, 2012) (awarding three-quarters of the Laffey rate because there was no evidence that the administrative hearing presented a novel legal issue or was in any way more complex than most hearings); Wright v. Dist. of Columbia, No. 11–CIV–384, 2012 WL 79015, at *4 (D.D.C.Jan.11, 2012) (awarding three-quarters of the Laffey rate because case involved a routine administrative proceeding and the time spent preparing for the hearing was nominal); Rooths v. Dist. of Columbia, 802 F.Supp.2d 56, 63 (D.D.C.2011) (“Like most IDEA cases, the claim on which the plaintiff prevailed in this action involved very simple facts, little evidence, and no novel or complicated questions of law ... The Court therefore will award fees at an hourly rate equal to three-quarters of the USAO Laffey rate ...”).
Agapito v. Dist. of Columbia, 525 F.Supp.2d 150, 152 (D.D.C.2007).
Defendant argues that plaintiffs have failed to demonstrate that these three cases were, in any way, complex and that the full Laffey rate is unwarranted. [# 16] at 6–9. Defendant argues instead that the Court should award three-fourths of the Laffey rate. Id. The Court agrees.
First, there is no evidence in these three cases that the issues were in any way complex. To the contrary, they appear to have proceeded in a fairly routine fashion, particularly for someone like Houck, who specializes in IDEA cases. In the case of Brighthaupt and J.B., plaintiffs filed a due process complaint, a resolution session was held, a pre-hearing conference was held, and then a due process hearing was held, where the HO heard the testimony of 11 witnesses. [# 14–3] at 2–3, 11. In the case of Browne and M.Y., plaintiffs filed a due process complaint, several motions to dismiss were filed by DCPS, and a due process hearing was held. [# 14–6] at 2. In the case of Yeager and J.Y., the parties participated in two prehearing conference, the last of which resulted in the entry of a consent order. [# 14–1] at 9.
Second, as I noted previously, unless a party is prepared to support its argument with “statistical, economic, or other evidence to include, perhaps, expert testimony,” there is no way to determine what rate reflects the actual market rate and “these cases [ ] become a meaningless exercise between plaintiffs, who will cite those cases that support use of the Laffey rate and the defendant, who will cite those that do not.” Johnson v. Dist. of Columbia, 850 F.Supp.2d 74, 79 (D.D.C.2012). In other words, there is no reason to disturb the status quo unless and until reasoned alternatives are proposed:
Until DCPS offers sufficient proof that its rates represent the true prevailing rates in this community and the Laffey rates represent an unreasonable windfall above what lawyers in IDEA cases actually charge their clients, they make use of the Laffey rates as a starting baseline inevitable. DCPS is yet to offer an alternative baseline and proof that it is an accurate measure of the rates that truly prevail in the community of lawyers who handle IDEA cases.
Moss v. Dist. of Columbia, No. 11–CIV–994, 2012 WL 4510682, at *3 (D.D.C. July 12, 2012).
Using the Laffey rates as a baseline and guided by the decisions that have diminished those rates as a function of the complexity of the case or the lack thereof, I conclude that an hourly rate of $333.75 (three-fourths of the Laffey rate of $445) strikes a fair balance between the burden on the public fisc and, in this case, the need to attract competent counsel to represent parties in straight-forward IDEA cases. C. Calculation of Plaintiffs' Counsel's Attorney's Fees
1. Lakesia Brighthaupt and J.B.
In accordance with the calculations in Court's Exhibit 1, plaintiffs are due $23,996.63 in attorney's fees for work performed on Brighthaupt and J.B.'s case.
2. Monica Browne and M.Y.
In accordance with the calculations in Court's Exhibit 2, plaintiffs are due $18,923.63 in attorney's fees for work performed on Browne and J.B.'s case.
3. Ja'Quelle Yeager and J.Y.
With respect to Yeager and J.Y.'s case, defendant contends that plaintiffs' counsel should not be reimbursed for time spent following defendant's offer of settlement. [# 16] at 9. Plaintiffs contend that full reimbursement is due because the relief Yeager and J.Y. obtained after rejecting defendant's original settlement proposal was greater than what they would have obtained if they had accepted it. Plaintiffs' Reply to Defendant's Response in Opposition to Plaintiffs' Motion for Summary Judgment and Plaintiffs' Response in Opposition to Defendant's Cross–Motion for Summary Judgment [# 17] at 10–11. Specifically, plaintiffs claim that they rejected the settlement offer it because it would have forced them to waive J.Y.'s rights to compensatory education. Id. at 11.
The IDEA provides in pertinent part as follows:
Attorneys' fees may not be awarded and related costs may not be reimbursed in any action or proceeding under this section for services performed subsequent to the time of a written offer of settlement to a parent if
(I) The offer is made within the time prescribed by Rule 68 of the Federal Rules of Civil Procedure or, in the case of an administrative proceeding, at any time more than 10 days before the proceeding begins;
(II) The offer is not accepted within 10 days; and
(III) The court or administrative hearing officer finds that the relief finally obtained by the parents is not more favorable to the parents than the offer of settlement.
20 U.S.C. § 1415(i)(3)(D).
The statute further provides the following:
Notwithstanding subparagraph (D), an award of attorneys' fees and related costs may be made to the parent who is a prevailing party and who was substantially justified in rejecting the settlement offer.
20 U.S.C. § 1415(i)(3)(E).
In the case of Yeager and J.Y., defendant made a settlement offer on February 11, 2013. [# 17–4]. The administrative due process hearing was held on April 3, 2013. Thus, the timing of defendant's settlement offer satisfies subsection (I). Subsection (II) is also satisfied because Yeager and J.Y. rejected the offer. [# 17] at 11. The only issue, therefore, is whether the relief finally obtained by plaintiffs was more favorable than that originally proposed by defendant.
In making this determination, the Court notes that the key to its determination lies in its defining the term “relief finally obtained.” Subsection (i) is captioned “Administrative procedures,” and thus it follows that the provisions contained under subsection (i) relate solely to those events occurring at the administrative level. In other words, the relevant comparison in subsection (i)(3)(D)(III) is between the relief detailed in the HO's ruling versus the relief detailed in the offer of settlement. With this understanding of the statutory language, it is clear in this case that the relief finally obtained by Yeager and J.Y. was not more favorable than what DCPS previously offered. The following chart shows what each provided, although, as will be shown, that is not the end of the story.
Plaintiffs argue that the primary reason Yeager and J.Y. rejected the settlement offer was because they would have been forced to forgo any and all rights J.Y. would have had to compensatory education. [# 17] at 10. In support of their argument, plaintiffs point to paragraph 9 of the settlement agreement, which states the following:
This Settlement Agreement is in full satisfaction and settlement of the pending complaint, SHO case # 2012–0810. The Petitioner hereby fully releases and waives the claims asserted in the complaint or [that] could have been asserted, including any and all relief that does or could result from the claims, as of the date of this signed and fully executed SA.
[# 17–4] at 3.
Plaintiff argues that had she signed the agreement she would have given up any right to have the new IEP that was created include compensatory education. The settlement agreement would appear only to have resolved the claims that had been made to that point and did not speak to whether, after new IEP's were created, the children would be entitled to compensatory education and, if they were, whether the settlement agreement precluded an award of compensatory education. Thus, a court or hearing officer would have to conclude that the agreement silently reached out to an event that had not occurred and would only occur if other conditions were fulfilled. Indeed, DSPS had to know that one consequence of the consent order it proposed might be the award of compensatory education in the new IEP. It could have easily demanded waiver of that right in specific terms but it did not. Its failure to be more specific would probably be held against it. In light of all of this, it might not be likely that the release would be construed to bar the IEP team from awarding the child compensatory education if it saw fit to award it.
Nevertheless, the release in the agreement is broad. Plaintiffs were said to “hereby fully release[ ] and waive[ ] the claims asserted in the complaint or [that] could have been asserted, including any and all relief that does or could result from the claims, as of the date of this signed and fully executed SA.” It is certainly not inconceivable that the compensatory education, if awarded in the new IEP's, was relief that “could result from the claim made.” Moreover, the claim for compensatory education had been made or could have been made and the release, DCPS would argue, therefore barred the IEP team from granting it.
At most, one could say that whether the release provision barred the claim for compensatory education raised a complicated legal issue as to which reasonable lawyers could differ. I therefore cannot find, as I must, that the settlement agreement plaintiffs rejected was no more favorable than the relief awarded because there lingered unresolved whether that agreement barred the compensatory education plaintiffs ultimately secured.
Plaintiffs also argue that they were substantially justified in rejecting the settlement offer and therefore entitled to reimbursement for “services performed subsequent to the time of a written offer of settlement,” because the settlement offer only provided for an award of $300 in attorney's fees. The Court agrees. As of February 11, 2013, the date of the settlement offer, plaintiffs' counsel had already worked 15.4 hours on the case. See Court's Exhibit 3 at 1–3. Thus, assuming the reasonableness of the hours spent to that point in the case, which defendant does not challenge, even at the lower reimbursement rate being allowed by the Court, plaintiffs would have received attorney's fees of $5,139.75 ($333.75 x 15.4) for that work. Yet, pursuant to the terms of the settlement offer, plaintiffs' counsel would have been compensated at an hourly rate of $2.00, which is well below minimum wage.
Since July 24, 2009, the federal minimum wage has been $7.25 per hour. United States Department of Labor, http:// www.dol.gov/dol/topic/wages/minimumwage.htm (last visited Mar. 20, 2014).
Indeed, even though it offered only $300 in attorney's fees, defendant now argues that plaintiffs' counsel is entitled to $90 per hour, the rate awarded criminal defense lawyers. [# 16] at 8. Using that rate, however, and multiplying it by the 15.4 hours plaintiffs' counsel worked on J.Y.'s case as of February 11, 2013, yields a fee of $1,386, which is 4.62 times more than the $300 originally offered. Indeed, at $90 per hour, the $300 offered in settlement would only have compensated plaintiffs' counsel for 3.3 hours of work.
More to the point, defendant is well aware that the judges of this court routinely award either the full Laffey rate or 75% of that rate in these cases. Defendant's offer of a flat fee of $300 is less than one hour's work for an attorney of plaintiffs' counsel's experience under either rate. Defendant must have known that its offer of $300 in attorney's fees could not possibly satisfy plaintiffs' counsel. Nor is it fair for DCPS to dismiss plaintiffs' rejection of the offer because it did not include adequate attorney fees as a red herring because the hearing officer did not award attorney fees. But, there was no demand made of the hearing officer for attorney fees. As DCPS knows, its purpose in making an offer of attorney fees was to cut off resort to this Court for the fee if, as was inevitable, DCPS offered an amount of fees that was neither based on the Laffey rates or the 75% of Laffey awarded by some of the judges of this Court. The $300 was so low that it could only be considered an insincere offer and an insincere offer should not trigger that cuts off of fees under the statute. If it did, counsel for plaintiffs in these cases will be encouraged to continue to litigate fees in this Court since it is unlikely that this Court will consider a de minimis offer, out of all proportion to the work done, sufficient to trigger the statute. On the other hand, a sincere and responsible offer, premised on an expectation of what plaintiffs' counsel may receive in this Court should cause counsel to think very hard about rejecting it even if it is not all that counsel hope to achieved by prosecuting a fee petition in this Court.
Awarding fees in these IDEA cases requires a careful balancing. The Court needs to ensure that counsel in these cases are fairly compensated so that they will continue to take these cases and provide parents with the qualified counsel they need. The Court also must appreciate the fact that municipal budgets for education are finite. The clear intendment of the attorney's fees provision within the IDEA is to preclude fees for a lawyer who foolishly rejects a reasonable settlement offer then wastes everyone's time and money to achieve through litigation what she could have achieved through settlement. An unreasonable offer does not advance those goals and it would be a pernicious and self-defeating interpretation of the IDEA to say that any offer of fees, no matter how unreasonable, must be accepted at the risk of losing all compensation from the date the settlement offer was made until the date the case is concluded. A fairer interpretation of the statute would be to say, as must be said here, that an offer of a mere pittance in attorney's fees does not trigger that section of the statute that precludes an award of attorney's fees for time spent on the case after the settlement offer was made if the plaintiff ultimately secures no more relief that that which was originally offered.
Plaintiffs were therefore substantially justified in rejecting the settlement offer based solely on the fact that defendant only offered $300 in attorney's fees for counsel's work on behalf of Yeager and J.Y. Thus, in accordance with the calculations in Court's Exhibit 3, plaintiffs are due $24,196.88 in attorney's fees and $170.10 in costs for work performed on Yeager and J.Y.'s case.
See Gary G. v. El Paso Indep. Sch. Dist., 632 F.3d 201, 210 (5th Cir.2011) (“[W]e do not hold that every plaintiff rejecting a settlement offer because it does not include such fees, is per se, not substantially justified in rejecting it.”) (emphasis in original).
In summary, the Court concludes that plaintiffs should be reimbursed as follows for work performed by Houck:
For the reasons stated above, it is, therefore, hereby,
ORDERED that Plaintiffs' Motion for Summary Judgment [# 14] is DENIED. It is further, hereby,
ORDERED that Defendant's Opposition to Plaintiffs' Motion for Summary Judgment and Cross–Motion for Summary Judgment [# 16] is GRANTED in part and DENIED in part.
SO ORDERED. Appendix