The opinion of the court was delivered by: BECKER
This opinion will consider a motion for counsel fees pursuant to the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988, in a civil rights case brought under 42 U.S.C. § 1983.
The history of this litigation has been chronicled in three opinions: Vecchione v. Wohlgemuth, 377 F. Supp. 1361 (E.D.Pa.1974) (Vecchione I ), Vecchione v. Wohlgemuth, 426 F. Supp. 1297 (E.D.Pa.), Aff'd 558 F.2d 150 (3d Cir.), Cert. denied, sub nom. Beal v. Vecchione, 434 U.S. 943, 98 S. Ct. 439, 54 L. Ed. 2d 304 (1977) (Vecchione II ); and Vecchione v. Wohlgemuth, 80 F.R.D. 32 (E.D.Pa.1978) (Vecchione III ). We therefore need not detail the facts of the case here. In terms of subject matter, suffice it to say that the Vecchione litigation deals with the right of patients confined in Pennsylvania mental health/mental retardation (MH/MR) facilities to control and manage their own property as against: (1) the right of the Commonwealth summarily to seize and control it for the duration of the hospitalization without prior notice or hearing on the issue of the patient's competency to manage that property; and (2) the right of the Commonwealth to appropriate part of the patient's property in satisfaction of the cost of care and maintenance, without prior or subsequent hearing on the correctness of the Commonwealth's assessment.
In terms of result, as the earlier opinions make plain, plaintiff is the prevailing party, for she has won a broad injunctive decree that confers major benefits upon MH/MR patients and affords significant protection for their property. The decree has revolutionized the management of patient funds. Indeed "Vecchione" has become a household word in the Pennsylvania MH/MR field and among Orphan's Court (Estates) practitioners. Recently, the probate section of the Philadelphia Bar Association sponsored a "Vecchione Conference" to train volunteer lawyers to handle guardianship petitions arising under the Vecchione decree.
Plaintiffs' right to counsel fees is not really disputed; indeed at the second hearing we held on the fee question, counsel for the Commonwealth conceded as much.
Although the Fee Awards Act leaves to the discretion of the district court the decision whether to award fees, its presumption is that successful counsel should "ordinarily recover an attorney's fee unless special circumstances would render such an award unjust." Senate Report No. 94-1011, 94th Cong. 2nd Sess. 2, U.S.Code Cong. & Admin.News 1976, pp. 5908, 5912. This case presents no special circumstances, and none have been suggested, that would render a fee award unjust. The only dispute is as to the amount of recovery. Accordingly, we shall devote this opinion to resolving that question. And while our task is facilitated by the Third Circuit's guidelines for determining an appropriate fee, as first articulated in Lindy Bros. Builders v. American Radiator and Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973) (Lindy I ), there are certain aspects of this case that require special attention.
Initially, we must determine whether hours spent on those portions of the case that resulted in the 1974 injunction and declaration and the 1975 consent decree must be excluded from our calculations on the theory that such portions of the case were not pending on the Act's effective date. See n. 2, Supra. Second, we must determine what constitutes reasonable hourly rates for counsel here, who, unlike lawyers in mercantile practice, do not have set rates at which they normally bill clients. And third, we must consider whether, in attempting to arrive at a reasonable fee, we should make an adjustment because of the defendants' alleged bad faith as demonstrated by the failure to implement the 1974 and 1975 Vecchione decrees.
With Lindy I, the Third Circuit began its attempt to plot with some precision the course to be followed by the district courts in awarding attorneys' fees in appropriate cases. The basic guidelines of Lindy I have been further refined in Lindy II, 540 F.2d 102 (3d Cir. 1976); Merola v. Atlantic Richfield Co., 493 F.2d 292 (3d Cir. 1974) (Merola I ) and 515 F.2d 165 (3d Cir. 1975) (Merola II ); Prandini v. National Tea Co., 557 F.2d 1015 (3d Cir. 1977) (Prandini I ) and 585 F.2d 47 (3d Cir. 1978) (Prandini II); Rodriguez v. Taylor, 569 F.2d 1231 (3d Cir. 1977), Cert. denied 436 U.S. 913, 98 S. Ct. 2254, 56 L. Ed. 2d 414 (1978); and Hughes v. Repko, 578 F.2d 483 (3d Cir. 1978). The latter three cases are particularly relevant here because they deal with statutorily authorized attorneys' fees rather than with awards from a common fund.
In addition to the quality and contingency factors, in civil rights cases the district court must also evaluate the reasonableness of the fee "in light of the important substantive purposes" of the Civil Rights Act on which the plaintiff relied. Hughes v. Repko, 578 F.2d at 488-89; See also, concurring opinions of Judges Rosenn at 490 and Garth at 492.
In fidelity to Lindy, we have calculated counsels' fees in two stages. First, we multiplied what we found to be a reasonable number of hours, including hours spent on the early phases of the case, by the various hourly rates that we determined in our discretion to be equal to the prevailing rates in this area for lawyers of similar experience and expertise, working on equally complex litigation. Then we adjusted those figures to reflect the contingency factor, the quality of the work, the bad faith of the Commonwealth defendants in implementing the decrees, and the extent to which this litigation furthered the substantive purposes of the Civil Rights Act, 42 U.S.C. § 1983.
These calculations produce the following fee awards, which we believe will provide reasonable compensation for the services rendered in this case: CLS: $ 110,641.70 in fees, $ 2,427.58 in costs; David Ferleger: $ 86,866.30 in fees, $ 329.00 in costs; Herbert Newberg: $ 6,708.00 in fees, $ 155.00 in costs.
II. Calculating the Lodestar
This litigation was commenced by Community Legal Services (CLS) as counsel for plaintiff, Elvira Vecchione, in January, 1973. In July, 1974, the three-judge court that had been convened to decide the case issued an order enjoining the defendants from continued application of certain state statutes found to be unconstitutional. By early 1975, it was apparent that the defendants were continuing to appropriate the property of patients confined in state mental health facilities pursuant to the offending statutory scheme and in violation of the decree. Thereafter, in February, 1975, David Ferleger, Director of the Mental Patients Civil Liberties Project and an independent practitioner, sought and obtained leave to intervene for his client, Walter Buress. In June, 1975, Herbert Newberg entered an appearance as co-counsel for plaintiff-intervenor Buress. There are thus three separate applications for fees before the Court those of CLS, of Mr. Ferleger, and of Mr. Newberg.
Five CLS attorneys have worked on the Vecchione matter over the years, three of them (Joel Brewer, Jonathan Stein, and Judy Greenwood) acting at various times as lead counsel or, in the case of Ms. Greenwood, as lead co-counsel with David Ferleger. They seek to recover on behalf of CLS for 1336.14 hours of attorney time, compensated at a rate of $ 90 per hour for all services.
Mr. Ferleger has submitted petitions for an award of fees for 752.73 hours of work at a rate of $ 70 per hour for time spent prior to August, 1975, and $ 90 per hour for time spent thereafter. Mr. Newberg seeks compensation for 73.9 hours at hourly rates of $ 100 for services rendered in 1975 and 1976; $ 135 for services rendered in 1977 and 1978; and $ 150 for services rendered in 1979. Additionally, Mr. Newberg seeks to recover for 30.6 hours of attorney time spent on the case by his former associate, John C. Gabroy, at a rate of $ 50 per hour. Finally, counsel seek reimbursement of costs and expenses: CLS $ 3,242.06; Mr. Ferleger $ 1,218.84; and Mr. Newberg $ 221.50.
As is noted above, defendants object to compensating plaintiffs' counsel for hours spent obtaining the 1974 injunction and the 1975 consent decree on the theory that those portions of the case were not pending on the effective date of the Fee Awards Act. They also challenge the number of hours claimed and the hourly rates requested. Observing that both Mr. Ferleger and Judy Greenwood, who logged the bulk of the hours CLS claims, are relatively recent law school graduates, the defendants contend that the hours they spent on the case were excessive due to their inexperience. Pointing to fee awards in other cases in which Mr. Ferleger acted as lead counsel, defendants contend that the rates both he and Ms. Greenwood request are grossly inflated.
Defendants object to certain specific hours on the ground that they were spent on matters not before the court as issues in this lawsuit. They also object to hours spent litigating issues they did not oppose, on the ground that plaintiffs cannot be said to have "prevailed" on those issues. Hughes v. Repko, 578 F.2d at 486-87.
We will discuss these objections Seriatim.
B. The Pending Case Question
Defendants concede that Congress intended the Fee Awards Act to be applied in cases pending on its effective date, October 19, 1976. Hutto v. Finney, 437 U.S. 678, 98 S. Ct. 2565, 2572 n.23, 57 L. Ed. 2d 522. They argue, however, that because the original Vecchione injunction had been issued over two years before the Act became law and the first consent decree was signed over one year theretofore, those portions of the case were not pending for purposes of the statute and hence that hours spent litigating them are not compensable. Stated another way, defendants' argument is that for purposes of attorney compensation, a pending case may comprise both pending and nonpending parts.
For this proposition they rely on Wheeler v. Durham City Board of Education, 585 F.2d 618 (4th Cir. 1978). We think that reliance is misplaced.
Wheeler was a school desegregation case in which counsel fees were sought under the counsel fee provisions of the Emergency School Aid Act of 1972, 20 U.S.C. § 1617, or, alternatively, under the Fee Awards Act for services rendered over a period of some sixteen years.
The case was filed in 1960 and the initial decision of the district court entered in 1961. Plaintiffs sought further relief in 1962. The decision denying them that relief was reversed on appeal, and an interim desegregation plan was adopted and approved on appeal in 1964, although a purported permanent plan was rejected by the court of appeals in 1965. Finally, in 1966 an acceptable permanent plan was adopted, and the case lay dormant for about three years, until, as a result of two intervening Supreme Court decisions, plaintiffs once again sought and were granted further relief in 1969 and 1970.
No appeal was taken from these orders and the case once again became inactive until July, 1972, when plaintiffs filed yet another motion for further relief. In 1975, the Fourth Circuit agreed that the 1970 plan was inadequate to accomplish a unitary school system. Subsequently, a plan satisfactory to all parties was adopted. It was at this point that counsel applied for fees for services rendered over the entire course of the litigation.
The district court refused to award compensation for any time spent prior to July 1, 1972, the effective date of the Emergency School Aid Act, on the grounds that (1) as of that date the issue of plaintiffs' entitlement to attorneys' fees was not pending before the court and (2) to award fees for hours spent back to back to 1960 would be unjust, since defendants could not have foreseen their potential liability for attorneys' fees and had made a good faith effort throughout to comply with the applicable law.
The Fourth Circuit affirmed in part and reversed in part and remanded.
Reasoning that a pending case is one that has not been reduced to final judgment, and drawing upon the Supreme Court's definition of final judgment in Bradley v. School Board of the City of Richmond, 416 U.S. 696, 711 n. 14, 94 S. Ct. 2006, 2016, n. 14, 40 L. Ed. 2d 476 (1974) (a final judgment is one where " "the availability of appeal' has been exhausted or has lapsed, and the time to petition for certiorari has passed."), the court determined that since several final orders purporting to decide the rights of the parties had issued before the effective date of the Emergency School Aid Act, time spent litigating the issues resolved by those orders was not compensable. When the Act became law, there were no issues awaiting determination by the court, and the case "was pending only in the technical sense that jurisdiction to enter such further orders as were necessary and desirable had been retained. There was no certainty, however, that the jurisdiction of the court would ever again be exercised. Indeed the litigation might have remained inactive for years." 585 F.2d at 623.
Several features distinguish Vecchione from Wheeler. First, and perhaps most important in terms of the Wheeler rationale, is that when the Fee Awards Act became law the very issue of attorneys' fees was pending before us (motions having been filed a year previously) as were several motions to hold defendants in contempt. Furthermore, only one week prior to the Act's effective date, we had denied defendants' motion to vacate and/or modify the April, 1975, consent decree, a motion that not only called the consent decree into question but indeed challenged our jurisdiction to have entered the original injunction. Our denial of the motion was subsequently appealed to the Third Circuit, and, because defendants continued to press their jurisdictional challenge (while nevertheless stating that they were not seeking to attack the 1974 order), the vitality of all of our prior rulings was essentially before the court of appeals subsequent to the effective date of the Fee Awards Act. This fact was recognized both by us and by the court of appeals in Vecchione II, 426 F. Supp. at 1304, and 558 F.2d at 159. While defendants attempt to relitigate a two year old decree was rejected, under the circumstances we find somewhat disingenuous their present argument that, when the Fee Awards Act became law, the injunction and consent decree were nonpending final orders.
Second, while the district court in Wheeler noted that defendants could not have foreseen their potential liability for counsel fees prior to passage of the Emergency School Aid Act, defendants here should have been aware of the possibility that fees would be awarded on a bad faith theory since they failed to attempt even threshold implementation of the 1974 injunction and resisted compliance in the face of numerous motions for contempt until the Supreme Court denied certiorari in Vecchione II in 1977. Indeed, plaintiffs' counsel had urged bad faith as the basis for a fee award in 1975. See n. 1 Supra.
Counsels' periodic return to the district court in Wheeler was occasioned by the failure of the remedies granted to provide the relief sought and by modifications in the law governing school desegregation cases. Here, by way of contrast, counsel were forced to return to court because of defendants' failure to comply with the directives of the court. Since the original Vecchione decree issued, there has been no modification of the applicable legal principles that would necessitate a change in the relief granted. Rather, our continued involvement was made necessary only because the defendants sought time and again to avoid the effects of rulings made against them. From its inception Vecchione has not been characterized by the "long periods of repose" found in Wheeler, nor have we retained jurisdiction only in a "technical sense" to enter such further orders as are necessary and desirable. While it is true that in 1974 we elected not to issue an affirmative decree but rather to leave implementation to the parties, once it became obvious that defendants were not going to comply with the terms of the injunction, this case became and has remained one of the most active on our docket.
Thus, we think Vecchione is readily distinguishable from Wheeler, a case that spanned many more years, went through several long periods of inactivity following the entry of judgments purporting to finally decide the rights of the parties, saw numerous changes in the applicable law, was characterized by good faith on the part of the defendants, and was a case in which no issues were pending resolution by the court when fee awards became statutorily authorized.
Finally, we are constrained to say that even if we were to hold that the original decree (or the 1975 consent decree) was a final judgment in the sense that Bradley uses the term and that those parts of the case were thus not "pending" for purposes of the Fee Awards Act, we would nevertheless award fees for time spent on those facets of the case on the theory that defendants bad faith in complying with their terms permit such an award. See discussion Infra. See also, Alyeska, supra, 421 U.S. 240, 95 S. Ct. 1612, 44 L. Ed. 2d 141 (1975); Universal Oil Products v. Root Refining Co., 328 U.S. 575, 580, 66 S. Ct. 1176, 90 L. Ed. 1447 (1946).
C. Reasonable Hours and Hourly Rates
The defendants have objected to both the number of hours claimed and the hourly rates sought. Plaintiffs counter that many hours actually spent have not been included in their fee applications and that they are entitled to what is, at least for some of them, the admittedly high rate of $ 90 per hour because in Vecchione they undertook responsibilities equivalent to those undertaken by more senior lawyers in commercial practice in equally complex litigation.
In order to assess the validity of each position, we have subjected plaintiffs' counsels' claims and the objections thereto to intense scrutiny and have also looked to recent fee awards in cases of a similar type and/or complexity. Rodriguez v. Taylor, 569 F.2d at 1250. Our review has convinced us that while there is merit to the arguments of the respective parties, neither side is wholly correct in its assessment of what would be a proper fee in this case.
We turn first to the question of the reasonableness of the hours claimed. While neither the CLS attorneys nor David Ferleger kept contemporaneous time records at the outset of their involvement in Vecchione, they have attempted to reconstruct the hours devoted to the case. We find, with certain exceptions noted below, that the reconstructions meet the mandates of Lindy II, 540 F.2d at 109. (Mere estimates of time will not suffice, but a reconstruction of hours spent may support a fee award so long as the reconstruction is substantial and reasonably accurate and the hours claimed were actually spent.)
That determination does not end our task, however, for we are required by Hughes v. Repko, 578 F.2d at 487 to give credit only for the hours reasonably supportive of claims successfully pursued against the party from whom fees are sought: "The burden of persuasion must rest on the petitioner to demonstrate to the court the number of hours attributable to the successful claim, and also to demonstrate that the number of hours so attributable was reasonably necessary to perform the work at issue."
While objecting to specific hours claimed as noncompensable or unnecessary, defendants have also raised a general objection that the number of hours is inflated due to counsels' inexperience and/or inefficiency. We must thus ascertain whether the hours spent were reasonably necessary to produce the benefit conferred.
While an attorney with more years in the profession might have spent somewhat less time working on certain major briefs and memoranda or perhaps in negotiations (though it is doubtful that such an attorney would have as much expertise in the law affecting mental health as plaintiffs' counsel), we think it would be difficult and probably arbitrary to determine how many hours spent on any given project might be subtracted for "inexperience."
We note the mandate that district courts "may not reduce an award by a particular percentage or amount (albeit for justifiable reasons) in an arbitrary or indiscriminate fashion." Prandini II, 585 F.2d at 52. See Hughes v. Repko, 578 F.2d at 486 (an automatic percentage reduction of the lodestar is "legally impermissible"). We think that to the extent that the inexperience of certain counsel may be reflected in the hours spent (and we offer no view thereon in light of our overall determination that the hours were reasonable), an adjustment has been made through the hourly rate we have awarded.
With these general precepts in mind, we turn to a consideration of the fee petitions of each attorney and to specific objections raised by the defendants.
Mr. Brewer was the CLS attorney who initiated this lawsuit. According to the fee petitions he spent 369.5 hours on the case over a period of approximately two years. In answer to interrogatories propounded by defendants, he stated that he had reconstructed the number of hours he spent "based generally on my own recollection of events and based on the assessment of the usual amount of time I spent on matters of similar length, purpose, and complexity." Answer to Interrogatory No. 17.
Like defendants, we are troubled by this statement, for while on the one hand we have no doubt that Mr. Brewer did spend a considerable amount of time on this case and that a relatively large number of hours could have been devoted without extending into the realm of unreasonableness, we believe this reconstruction comes closer to a mere estimate than to the substantial reconstruction envisioned by Lindy II. Yet we also believe it would be unjust to refuse to award any compensation for Mr. Brewer's labor on behalf of plaintiffs, since at the time the litigation was commenced, fee awards to publicly funded legal services organizations were not common, and CLS had little reason to keep contemporaneous time records.
Nevertheless, we find that the hours claimed by Mr. Brewer are in some specific instances excessive. We note that at the time he worked on Vecchione, Mr. Brewer was an experienced attorney. Furthermore, as noted below, much of the work required here was similar to work done by Mr. Brewer on other cases, so that, for example, unlike Ms. Greenwood (at least in her initial efforts), Mr. Brewer brought a certain amount of expertise to bear in Vecchione.
We have disallowed the following hours: 50 of the 100 claimed for the memorandum in support of a T.R.O. Despite the fact that this document was somewhat lengthy, the legal arguments it required were not particularly complex. Furthermore, in preparing the memo Mr. Brewer used briefs filed in other cases. Answer to Interrogatory No. 19.
Similarly, we have eliminated 30 hours of the 80 claimed for preparing the 35 page brief in support of the motion for summary judgment. Because a large portion of this brief was devoted to a recapitulation of other material, we find the time spent to have been excessive. Here too Mr. Brewer utilized a brief filed in another case.
We will allow compensation in full for the hours spent preparing other documents identified above, for these hours ...