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First Step in Determining Attorney Fees: Lodestar

Posted: Sat Dec 23, 2006 8:06 pm
by David A. Szwak
The proper first step in determining a reasonable attorney's fee is to multiply the number of hours reasonably expended on the litigation times a reasonable hourly rate. However, the figure resulting from this calculation is more than a mere "rough guess" or initial approximation of the final award to be made. Instead, when the applicant for a fee has carried his burden of showing that the claimed rate and number of hours are reasonable, the resulting product is presumed to be the reasonable fee to which counsel is entitled. Thorpe v. Collection Information Bureau, 963 F.Supp.2d 1172 [U.S.D.C. S.D. Fla. 2003]; Valenti v. Allstate Ins. Co., 243 F.Supp.2d 200 [U.S.D.C. M.D. Pa. 2003]; System Management, Inc. v. Loiselle, 154 F.Supp.2d 195, 2001 U.S.Dist.Lexis 18089 [U.S.D.C. Mass. 2001]. Again, once the lodestar calculation is made, it serves presumptively as a reasonable fee unless subject to an upward or downward adjustment. City of Burlington v. Dague, 505 U.S. 557, 112 S.Ct. 2638, 120 L.Ed.2d 449 [1992]; Blanchard v. Bergeron, 489 U.S. 87, 109 S.Ct. 939, 103 L.Ed.2d 67 [1989]; Lipsett v. Blanco, 975 F.2d 934, 937 [1st Cir. 1992].

Posted: Sat Dec 23, 2006 8:06 pm
by David A. Szwak
To determine a proper fee award, a court must necessarily "engage in a thoughtful analysis of the number of hours expended and the hourly rates charged to ensure both are reasonable." Rupert v. Secretary of Health and Human Services, 2002 WestLaw 360005 [Fed. Cl. 2002]; Guckenberger v. Boston Univ., 8 F.Supp.2d 91, 100 [U.S.D.C. Mass. 1998]. See also King v. Greenblatt, 560 F.2d 1024, 1026-27 [1st Cir. 1977]. In doing so, the court is obliged "to see whether counsel substantially exceeded the bounds of reasonable effort." United States v. Metro. Dist. Comm., 847 F.2d 12, 17 [1st Cir. 1988] [citation and internal quotation marks omitted]; Rolland v. Cellucci, 106 F.Supp.2d 128, 134 [U.S.D.C. Mass. 2000].

Posted: Sat Dec 23, 2006 8:07 pm
by David A. Szwak
Attorney's fee awards under the FCRA and Truth-In-Lending Act must reflect current rates, in essence, rates that prevailed when the work was done. Varner v. Century Fin. Co., 738 F.2d 1143 (C.A. Ga. 1984); Mares v. Credit Bureau of Raton, 801 F.2d 1197 (10th Cir. 1986) [N.M.]. Plaintiff must show, by evidence, that the rates suggested by his counsel are proper, current, and reasonable.

Posted: Sat Dec 23, 2006 8:08 pm
by David A. Szwak
There is no proportionality requirement. Plaintiff needs to show that he is the prevailing party under the statute. Calculation of fees in terms of hours of service is the fairest and most manageable approach to awards of attorney's fees under FCRA and the fact that attorney's fees calculated on an hourly rate basis exceeded plaintiff's actual damages in action against credit reporting agency did not require reduction of fees on theory that fees should be calculated on contingent basis. Bryant v. TRW, Inc., 689 F.2d 72 [6th Cir. 1982] [Mich.].

Posted: Sat Dec 23, 2006 8:08 pm
by David A. Szwak
The court computes the lodestar by ascertaining the time counsel actually spent on the case 'and then subtracting from that figure hours which were duplicative, unproductive, excessive, or otherwise unnecessary. Lipsett v. Blanco, 975 F.2d 934, 937 [1st Cir. 1992] [quoting Grendel's Den, Inc. v. Larkin, 749 F.2d 945, 950 [1st Cir. 1984]]. The court then applies hourly rates to the various tasks, considering the prevailing community rates for comparable attorneys. Id. To fashion a lodestar, however, "is not to say that the court is in thrall to an attorney's time records." Coutin, 124 F.3d, at 337. A court, in its discretion, "can segregate time spent on certain unsuccessful claims, eliminate excessive or unproductive hours, and assign more realistic rates to time spent" and, ultimately, "may fashion a lodestar which differs substantially from the fee requested by the prevailing party." Id. [citations omitted]. Plaintiff’s counsel must segregate time spent on unsuccessful claims, as opposed to claims viable, which were pending for trial, and upon which plaintiff is now the prevailing party.

Posted: Sat Dec 23, 2006 8:09 pm
by David A. Szwak
Plaintiff would still be entitled to time spent on unsuccessful but interconnected claims though plaintiff here has not even sought that time or expense. Krewson v. City of Quincy, 74 F.3d 15, 19 [1st Cir. 1996]; Gay Officers Action League v. Puerto Rico, 247 F.3d 288, 295-297 [1st Cir. 2001]; System Management, infra, at 208; United States ex rel. Averback v. Pastor Med. Assocs. P.C., 224 F.Supp.2d 342, 2002 U.S.Dist.Lexis 18247 [U.S.D.C. Mass. 2002]; Johnson v. Rhode Island, 2000 U.S.Dist.Lexis 3773 [U.S.D.C. R.I. 2000]. It is defendant’s burden to show a specific basis for further segregating time, efforts, fees and costs. Koster v. TWA, 181 F.3d 24 [1st Cir. 1999]; Lipsett v. Blanco, 975 F.2d 934, 940 [1st Cir. 1992]; Goldsmith v. City of Atmore, 1995 U.S.Dist.Lexis 1529 [U.S.D.C. S.D. Ala. 1995]; and Brooks v. P&H Construction Corp., 1998 U.S.Dist.Lexis 22494 [U.S.D.C. S.D. Ala. 1998] [finding that plaintiff’s claims were interrelated and parsing out fees and costs could not be fairly performed].

Posted: Sat Dec 23, 2006 8:09 pm
by David A. Szwak
The Goldsmith court stated: “When a plaintiff has achieved only limited success, there are two methods for reducing the amount of the award. If the unsuccessful claims are separate and distinct from the successful claims, the Court may simply eliminate the hours spent on the unsuccessful claims. Hensley, at 435. If, however, the claims are interrelated--either because they involve a common core of facts or are based on related legal theories - the Court ‘should focus on the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation.’ In this case, because plaintiff's successful and unsuccessful claims are interrelated, the Court looks to the degree of plaintiff's success in determining the amount of reduction.â€

Posted: Sat Dec 23, 2006 8:10 pm
by David A. Szwak
The court in Tasby v. Wright, 550 F.Supp. 262 [U.S.D.C. N.D. Tex. 1982], noted that “[W]hen faced with interrelated claims, a court must ‘consider the relationship of the claims that resulted in judgment with the claims that were rejected and the contribution, if any, made to success by the investigation and prosecution of the entire case.’ Id. Dunten v. Kibler, 518 F. Supp. 1146, 1149 [U.S.D.C. N.D. Ga. 1981], interpreted Jones v. Diamond to hold that a litigant should be compensated for unsuccessful claims unless they are clearly without merit and without any relationship to the successful claim. In Dowdell v. Apopka, 521 F. Supp. 297, 301 [U.S.D.C. M.D. Fla. 1981] the court allowed an award for seven claims although the plaintiffs prevailed on only two, because the others were not "clearly merit less." [emphasis added.]’

Posted: Sat Dec 23, 2006 8:11 pm
by David A. Szwak
The Tenth Circuit has stated: “Henlsey made it abundantly clear that failure on some interrelated claims is not nearly as important a factor as the "overall relief" obtained by the plaintiff. Hensley, supra, at 435. As we said in Jane L. v. Bangerter, 61 F.3d 1505 [10th Cir. 1995], when a plaintiff relies on interrelated claims in support of a single outcome, failure on some of those claims does not preclude a full recovery when the plaintiff achieves the outcome that she sought. See Jane L., 61 F.3d at 1512.â€

Posted: Sat Dec 23, 2006 8:11 pm
by David A. Szwak
The Coutin court measured the "results obtained" by considering three factors: [1] Plaintiff's success claim by claim, [2] the relief actually achieved, and [3] and the societal importance of the rights which has been vindicated. Id. at 338. Of particular importance in this case, other courts, like Coutin, recognized "that attempts to allocate hours between claims may be unwarranted where an action involves related legal theories applied to a common core of facts." Phetosomphone v. Allison Reed Group, Inc., 984 F.2d 4, 7 [1st Cir. 1993] [citing Hensley, 461 U.S. at 434-35]. The Coutin court also noted that "a plaintiff who has limited success from a claim-by-claim standpoint, but who nevertheless obtains substantial compensation or other important relief, usually will fare much better in the fee wars, even though some of her claims failed." Id. at 339.

Posted: Sat Dec 23, 2006 8:13 pm
by David A. Szwak
The Alfonso v. Aufiero, 66 F. Supp. 2d 183, 1999 U.S.Dist.Lexis 14188 [U.S.D.C. Mass. 1999], court discussed the three prevailing concepts that have developed. The claim-by-claim, relief actually obtained, and the societal importance of the rights vindicated. The claim-by-claim approach focuses on the number of substantive causes of action on which a plaintiff prevailed. Coutin, supra, at 340. "If a plaintiff prevails on only some of multiple claims, then a fee reduction may be in order" but is not required. Coutin, supra, at 339. In contrast, when plaintiffs have "prevailed up and down the line" on their claims, "a claims-based, results-obtained fee reduction is wholly inappropriate." Coutin, supra, at 340; Rodriguez-Hernandez, 132 F.3d, at 859.

In making this determination, the trial court considers all of the related claims. That means the claims based "on a common core of facts and on related legal theories," both successful and unsuccessful. Id.; Hensley, 461 U.S., at 435; Coutin, supra, at 339 [weeding out unsuccessful, unrelated claims as not compensable and analyzing the degree of success on the interrelated claims].

The second meaning of "results obtained" focuses on the damages awarded to the plaintiff involves the “relief actually achievedâ€