Raduga U.S.A. Corp.v.United States Department of State

United States District Court, S.D. CaliforniaFeb 16, 2006
Case No. 04cv996 BTM (BLM) (S.D. Cal. Feb. 16, 2006)

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  • holding the court "will not award fees for time spent pursuing pro hac vice admittance" where there was "no reason why someone local could not have handled the case"

    Summary of this case from Tarango v. City of Bakersfield

Case No. 04cv996 BTM (BLM).

February 16, 2006


ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR ATTORNEYS' FEES [Doc. #48]


I. INTRODUCTION

In August 2000, Plaintiff Raduga USA Corp. ("Raduga") filed an I-140 Immigration Petition for Alien worker on behalf of its president and sole shareholder, Plaintiff Nikolai Romanovskiy, and on behalf of Plaintiff Vladlena Yakoleva as Romanovskiy's dependent. In April 2001, following the approval of the I-140 petition, the individual Plaintiffs applied for immigrant visas at the U.S. Embassy in Moscow. On May 14, 2004, unable to obtain any decision on these applications, Plaintiffs brought an action seeking an order to compel the U.S. consulate in Moscow to adjudicate the visa applications of Romanovskiy and Yakovleva. By order dated May 23, 2005, the Court agreed with Plaintiffs and issued a writ of mandamus against the U.S. consular officials, ordering them to render a decision on the visa applications. Plaintiffs have now brought the current motion for attorneys' fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d). Plaintiffs seek fees and costs totaling $49,969.50. Defendants oppose and argue that the Plaintiffs should not be entitled to any award, or, alternatively, to a substantially reduced award. For the reasons discussed, Plaintiffs' motion for attorneys' fees is GRANTED IN PART and DENIED IN PART.

II. DISCUSSION

The EAJA provides that "a court shall award to a prevailing party other than the United States, fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action . . . unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." 28 U.S.C. § 2412(d)(1)(A). Additionally, for an individual to qualify, his or her net worth must not exceed $2,000,000 at the time of filing of the civil action. 28 U.S.C. § 2412(d)(2)(B). For a corporation to qualify, its net worth cannot exceed $7,000,000. Id.

"Attorney fees shall not be awarded in excess of $125 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee." 28 U.S.C. § 2412(d)(2)(A)(ii). In Sorenson v. Mink, 239 F.3d at 1140, 1148-49 (9th Cir. 2001), the Ninth Circuit laid out the formula to determine the hourly enhancement due to an increase in the cost of living: multiply the EAJA rate cap by the current consumer price index for urban consumers ("CPI-U") for the year in which the fees were earned, then divide the product by the CPI-U in the month the cap was imposed (March 1996). Additionally, the Ninth Circuit has established a three prong test to determine whether a special factor warrants a heightened fee award. Plaintiffs must demonstrate: (1) that their attorney had developed a practice specialty or possesses distinctive knowledge and skills; (2) that the distinctive knowledge and skills are necessary to the litigation in question; and (3) that similar skills could not have been obtained at the statutory rate. Pirus v. Bowen, 869 F.2d 536, 541-42 (9th Cir. 1989).

A. Entitlement to Fees

There is no dispute that Plaintiffs' respective net worths did not exceed the statutory maximums. Both Yakoleva and Romanovskiy have averred that neither had a net worth of over $2,000,000 on the date the lawsuit was filed. Yakoleva Aff., ¶ 1; Romanovskiy Aff., ¶ 1. Additionally, Raduga Vice President Simon Itsygin states that the company's net worth did not exceed $7,000,000 on the date the lawsuit was filed. Raduga Aff., ¶ 2.

However, the Defendants argue that Plaintiffs are not entitled to any award because their position was justified, or, alternatively, that any award of fees would be unjust because such action would deter the government from advancing similar defenses in the future. They essentially argue that the novelty of the issue the Court faced — Raduga's standing — justified its position. Because the issue presented to the Court "was one of first impression in this judicial circuit for which there was no adverse precedent and for which there was support in another circuit," they argue that their position was justified. See Opp'n at 4.

The Court finds that Defendants are taking too narrow a view of their position. Substantially justified means "justified to a degree that could satisfy a reasonable person." Pierce v. Underwood, 487 U.S. 552, 565 (1988). In making a determination, the Court must look at the position of the government as a whole, considering both the government's position during litigation and "the action or failure to act by the agency upon which the civil action is based." United States v. Marolf, 277 F.3d 1156, 1161 (9th Cir. 2002) (quoting 28 U.S.C. § 2412(d)(1)(B)). To prevail here, the government must establish that on the whole, the government was substantially justified (1) in taking four years to render a decision on Romanovskiy and Yakoleva's visas, and (2) in its litigation position. See id.

Here, the Defendants have essentially conceded that the four year delay was unreasonable and not substantially justified. See opp'n at 4. This fact alone is sufficient to warrant an award of fees. While Defendants focus much of their argument on the novelty of the issues, an issue of first impression does not create a per se rule precluding the award of EAJA fees. Gutierrez v. Barnhart, 274 F.3d 1255, 1261 (9th Cir. 2001) ("There is no per se rule that EAJA fees cannot be awarded where the Government's position contains an issue of first impression"). Furthermore, even if the Court assumed that the government's litigation position was substantially justified, a "reasonable litigation position does not establish substantial justification in the face of a clearly unjustified underlying action." Marolf, 277 F.3d at 1164-65 (citing cases, including Wilderness Soc'y v. Babbitt, 5 F.3d 383, 388-89 (9th Cir. 1993)). Here, the unreasonableness of the delay in ruling on the Plaintiffs' visas was never in dispute. Indeed, oral argument focused on the procedural issues, and not on the underlying merits of Plaintiffs' action. Because all parties, including the Court, agree that the underlying action, or inaction, was unjustified, a fee award is appropriate.

Consider the following dialogue between the Court and Defendants' attorney, quoted in Plaintiffs' motion: The Court: My concern is this just taking inordinately long. . . . And so now they [Plaintiffs] have resorted to the court. It's basically four years since they have been trying to get this done, and that is just too long.

Mr. Bettwy: I cannot disagree. I think that, not that it justifies it, but I think a lot of it has to do with the post-9/11 atmosphere, where agencies are, it's written in policy that they will not act if there is concern with another agency.

The Court: Right, but still four years is too long.
Mr Bettwy: I agree. And now, I admit to, at least from my perspective, this lawsuit has caused things to move along, but they are moving along now.

Mot. at 4.

B. Hourly Rate

Plaintiffs are seeking attorneys' fees, excluding costs, of $45,537.50. Plaintiffs' counsel, Kenneth White, has stated that he performed a total of 220 hours of work on this case. White Decl., 4-7. White billed his clients a flat fee of $8,750 for 56.5 hours of work (this comes to an hourly rate of $154.87) for work done between December 26, 2004 and January 9, 2005. For the balance of the time, 163.50 hours, performed in 2004 and 2005, he seeks $36,787.50 based on his proposed hourly rate of $225 an hour. He argues that his specialization in immigration law and the high cost of living in Moscow warrant an award above the statutory $125 hourly rate. Additionally, he points to his fluency in Russian as another factor justifying his $225 hourly fee.

It is not clear whether the individual Plaintiffs speak English. In his papers, White repeatedly references a language barrier with Romanovskiy, but never explicitly states that Romanovskiy cannot communicate in or understand English. See, e.g., Mot. at 3-4 ("Counsel speaks Russian, which allowed for better and faster communication with client Romanovskiy"); Reply at 2 ("Because of a language barrier, it would have been difficult for Plaintiff Romanovskiy to communicate directly with that local counsel") (emphasis added). Though it is not clear, it appears that Romanovskiy is not completely proficient in English. Therefore, the Court will assume that if White did not speak Russian, he would have required the services of an interpreter.

Defendants argue for a substantially lower award for attorney time. They submit that Plaintiffs should be entitled to 50 hours of attorney time at $125 an hour, for a total award of $6,250. They argue (1) there is no basis for exceeding the hourly cap because no expertise in immigration law was required for this litigation; and (2) that Moscow should not be considered the relevant market.

White has practiced immigration law for the past ten years. White Decl., ¶ 2. However, as an initial matter, it is not clear that an expertise in immigration law can be considered a special factor justifying an increase from the statutory fee cap. While patent law and special language skills can be special factors,Pierce v. Underwood, 487 U.S. at 572, the language cited by Plaintiff to support his claim that immigration law is a specialty is clearly dictum. See Ramon-Sepulveda v. INS, 863 F.2d 1458, 1463 (9th Cir. 1988) (denying special fee enhancement " even if immigration law can be classified as a practice specialty") (emphasis added). See also Perales v. Casillas, 950 F.2d 1066, 1077-79 (5th Cir. 1992) (holding that immigration expertise is not a specialty area warranting enhancement). Cf. Jean v. Nelson, 863 F.2d 759, 774 (11th Cir. 1988) (recognizing that immigration law is a "narrow legal specialty which might entitle [a plaintiff] to an adjustment," but also stating "that not every immigration attorney or every immigration lawsuit warrants an upward adjustment of hourly rates").

However, even if immigration law could be considered a specialty warranting a rate increase, the Court is not convinced that Plaintiffs have shown that White's speciality was necessary to the litigation. See Pirus, 869 F.2d at 541-42. While an immigration speciality may have been necessary to shepherd the Plaintiffs through the visa application process, the issues contested in this action were not strictly immigration issues. Rather, Defendants' opposition in this case were based on issues of standing and venue, general legal principles with which most attorneys are at least familiar. Accordingly, the Court finds that White's immigration expertise was not needed for the litigation in question. See Ramon-Sepulveda, 863 F.2d at 1463 (9th Cir. 1988) (denying special factor fee enhancement because plaintiff's "legal claim against the INS involves established principles of res judicata-principles with which the majority of attorneys are, or should be, familiar").

Counsel's fluency in Russian, however, can justify an award of attorneys' fees over the $125 cap. See Pierce, 487 U.S. at 572. Because White's knowledge of Russian made an interpreter unnecessary, the Court finds an increase in the hourly rate is appropriate for the time he spent conferring with his client. According to White's time records, he consulted with his client on at least ten separate occasions while prosecuting this action. However, White's records are not detailed enough for the court to make an exact determination of precisely how much time he spent conferring with his client. For example, on April 28, 2004, he submits that he spent 2.75 hours "consult[ing] with client about the process, research[ing] consular nonreviewability cases, verifi[ng] appropriate defendants and addresses, Shepardiz[ing]. White Decl., ¶ 14, item h. Obviously, not all of White's time on April 28 was spent talking to his client. Given the nature of the lawsuit, the Court will estimate that White spent four hours talking (an average of 24 minutes for each of the ten occasions) with his client in the course of this lawsuit. Accordingly, the Court will increase White's fees by $45 above the statutory cap for these four hours. See In re Interpreter Fees Allowable Under Criminal Justice Act, Gen. Order 527, (S.D. Cal. May 21, 2003) (providing $45 per hour for interpreters under the Criminal Justice Act).

Finally, the Court finds that San Diego, not Moscow, should be the relevant community for determining the cost of living increase to the $125 cap. Generally, the relevant community for determining the appropriate attorney rate, is the community "in which the district court sits." Davis v. Mason County, 927 F.2d 1473, 1488 (9th Cir. 1991), overruled on other grounds by Davis v. City and County of San Francisco, 976 F.2d 1536, 1556 (9th Cir. 1992). The case was filed in San Diego, and Plaintiff Raduga is based here. The fact that the underlying events occurred in Moscow does not warrant using that city as the relevant community.

To determine the appropriate hourly rate, as adjusted for cost of living increases, the Court employs the formula outlined inSorenson, 239 F.3d at 1148-49: multiply the EAJA rate cap by the current CPI-U for the year in which the fees were earned, then divide the product by the CPI-U in the month the cap was imposed (March 1996). The CPI-U variables used to determine the appropriate cost of living adjustment should be the national, and not local, figures. Jawad v. Barnhart, 370 F. Supp. 2d 1077, 1090 (S.D. Cal. 2005). White performed work on this case in 2004 and 2005. The national CPI-U baseline in March 1996 was 155.7, and the national CPI-U for 2004 was 188.9. See United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index — All Urban Consumers: U.S. City Average, All items, Not Seasonally Adjusted, Base Period 1982-84=100, available at http://data.bls.gov/PDQ/outside.jsp?survey=cu (last visited February 13, 2006). Therefore, White should receive an hourly rate of $151.65 for work performed in 2004. Similarly, the national CPI-U for 2005 was 193.2. See id. Therefore, White should receive an hourly rate of $155.11 for work performed in 2005.

The Court calculates this figure by multiplying the statutory cap (125) by the national CPI-U for 2004 (188.9), the year in which the fees were earned, and then dividing the product (23,612.50) by the national CPI-U baseline at the time the amended cap was imposed (155.7). The quotient (151.65) represents the hourly rate with the appropriate cost-of-living adjustment. The equation reads: (125 x 188.9)/(155.7) = 151.653.

C. Number of Hours

In total, White claims to have spent 220 hours on this case. The Defendants argue that this time is excessive and that the Court should only award fees for hours reasonably expended on the case. Specifically, it points out that White's 32 hours of travel time should be excluded. It further asserts that the approximately 160 hours spent by White working on (1) the complaint, (2) the pleadings in the cross-motions for summary judgment, (3) court appearances and (4) the current fee motion is simply unreasonable. Lastly, the Defendants maintain that White is not entitled to fees for the 27 hours of attorney time he spent prosecuting the visa applications before the State Department. It estimates that a fee award for 50 hours of work is appropriate.

The Court agrees that travel time should not be reimbursable here. Counsel could have appeared telephonically for oral argument, just as he did for the status conference. Because the Court sees no reason why someone local could not have handled this case, it will not assess fees for the 32 hours White spent traveling between Moscow and San Diego. It will also not award fees for time spent pursuing pro hac vice admittance.

The Court also agrees that 160 hours of work on this case is excessive. White is an experienced lawyer and the case did not involve discovery. In contrast, counsel for Defendants has estimated that he spent no more than 25 total hours on the case. Bettwy Decl., ¶ 3. While the Court acknowledges that prosecuting this case was more labor intensive than defending it, it cannot award fees for time not reasonable expended. Hensley v. Eckhardt, 461 U.S. 424, 433-34 (1983). The Court has reviewed the pleadings, the record, and White's biling sheet, and has constructed a chart to set forth how much time was reasonable in this case. The chart below illustrates the Court's breakdown of time spent in 2004: Category Corresponding letters Requested Hours Reasonable Hours on White's timesheet

Initial investigation/ consultations with A + B 6.5 6.5 client Preparation, filing, service of complaint/ C-L 18.25 10 review of answer Research, pleadings for motion for SJ/oral M-LL 104.5 54 argument preparation Similarly, the Court used the following chart to determine White's hours in 2005:Category Corresponding letters Requested Hours Reasonable Hours on White's timesheet Preparation for hearings/ MM, PP, QQ, UU 13.25 10.25 appearances/meeting with client Review of Court order, BBB 2.5 2.5 discussion with client EAJA application CCC + DDD 14 14 The Court finds a total of 97.5 hours (70.5 in 2004, 26.75 in 2005) to be reasonable in this case. This is equivalent to approximately two and a half weeks of full time work.

Finally, the Defendants argues that Plaintiffs should not be awarded fees for the time spent prosecuting the applications before the State Department in 2005. It argues that White's contacts with the Department of State would have occurred despite the pendency of the litigation. The EAJA provides for fees and expenses "in any civil action." 28 U.S.C. § 2412(d)(1)(A). Plaintiffs argue that their filings in this suit revealed the true reason for the visa delays, and that therefore they were forced to rebut allegations that the individual Plaintiffs were involved in criminal activity. The Court does not agree that the administrative and judicial proceedings here were intertwined. The judicial proceedings were commenced to force the Defendants to render some decision, whether favorable or unfavorable, on the visa application. The goal of the administrative process was to obtain the visas. Plaintiffs had been and would have continued to interact with the State Department in an effort to convince it to award the visas even if they had not commenced this suit. As such, the Court will not award fees for this time.

D. Total Fees and Costs

As discussed, Counsel is entitled to an hourly rate of $151.65 for work performed in 2004 and $155.11 for work performed in 2005. After subtracting time disallowed as neither compensable or reasonable from the hours expended in 2005, it will award Plaintiffs fees for 26.75 hours at the rate of $155.11. The Court therefore will award Plaintiffs $4,149.19 for work performed in 2005.

The balance of counsel's compensable and reasonable efforts, 70.5 hours, came in 2004. The appropriate hourly rate for 2004 is $151.65. Accordingly, the Court will award Plaintiffs $10,691.33 for work performed in 2004. Additionally, the Court will award an additional $180 ($45 x 4) as an enhancement for White's language skills used during consultations with Romanovskiy.

Plaintiffs are also seeking $4,432 in costs. Because the Court has determined that Plaintiffs could have used local counsel or had White appear telephonically, it will not allow the $2,935 in travel expenses submitted or the $80 pro hac vice fee. It will instead award the balance, $1,417, for miscellaneous costs. The Defendants do not challenge these litigation costs.

III. CONCLUSION

For the reasons discussed above, the Court GRANTS IN PART AND DENIES IN PART Plaintiffs' motion for attorneys' fees and costs under the EAJA. The Court hereby awards Plaintiff $15,020.52 in fees and $1,417 in costs for a total award of $16,437.52. The clerk shall enter judgment accordingly.

IT IS SO ORDERED.