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SWICKER v. WILLIAM ARMSTRONG & SONS

January 17, 1980

THOMAS J. SWICKER
v.
WILLIAM ARMSTRONG & SONS, INC. WILLIAM ARMSTRONG



The opinion of the court was delivered by: VANARTSDALEN

MEMORANDUM OPINION AND ORDER

Pursuant to the Civil Rights Attorney's Fee Awards Act of 1976, 42 U.S.C. § 1988, plaintiff seeks attorneys' fees incurred in the successful litigation of this civil rights action. He brought the action in 1976 against his employers, alleging racial discrimination in his firing. His attorney at the time, Helen Cutner, filed the complaint, basing the claim solely upon Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e. Thereafter, she conducted discovery, responded to a defense motion for summary judgment, and completed most other pretrial matters before withdrawing from the case, and from the private practice of law in June of 1978. Plaintiff's representation was then taken over by Michael K. Simon, of the Philadelphia law firm Sidkoff, Pincus, Greenberg and Green, who conducted the nonjury trial of the case. At the conclusion of the plaintiff's case in chief, defendants moved for judgment on the basis that plaintiff's evidence failed to establish a Title VII jurisdictional requirement that the defendant employer must have had "fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year." 42 U.S.C. § 2000e(b). The motion was taken under advisement, pending analysis of the many pertinent documentary exhibits. At the end of the trial, Mr. Simon, justifiably concerned that this jurisdictional requirement might not have been met, moved to amend the complaint to assert, without any additional factual allegations, a claim under section 1981 of the Civil Rights Act. I permitted this amendment, by memorandum opinion and order dated August 29, 1979. Subsequently, I found defendants liable for plaintiff's improper discharge under section 1981, but not under the Title VII theory originally asserted, due to insufficient evidence to establish the noted jurisdictional requirement. Damages were assessed against the corporate defendant in the amount of $ 7,577.50, with the individual defendant jointly and severally liable for $ 3,085 of that amount. Mr. Simon and Ms. Cutner now petition this court for total attorneys' fees of almost $ 55,000.00, approximately seven times the total amount of their client's recovery.

 Congress has provided that a successful plaintiff in a section 1981 action may recover "a reasonable attorney's fee" from the defendant. 42 U.S.C. § 1988. In the third circuit, however, the simplicity of this provision is somewhat belied by the complexity of its application. Probably the most concise and accurate statement of the process mandated by the court of appeals may be found in Judge Garth's concurring opinion in Hughes v. Repko, 578 F.2d 483, 492 (3d Cir. 1978). He perceived four separate levels of inquiry in determining a reasonable attorney's fee in cases not involving an equitable or common fund. First, the court must determine the "lodestar," consisting of the number of hours reasonably spent multiplied by a reasonable hourly rate. Second, the court must determine whether the lodestar should be increased to account for the contingent nature of the case, and third, whether it should be either increased or decreased because of the quality of advocacy. Finally, the court may make what is cryptically referred to as a "post-Lindy discretionary adjustment," in light of "all factors relevant to the reasonableness of the award, as well as factors derived from the substantive purposes of the statute under which the fee is awarded." Id.

 The first three of these levels of inquiry are referred to collectively by Judge Garth as the "Lindy amount," a reference to the Third Circuit Court of Appeals' seminal decisions in Lindy Brothers Builders, Inc. v. American Radiator and Standard Sanitary Corp., 487 F.2d 161 (1973) ("Lindy I "), and Lindy Brothers Builders, Inc. v. American Radiator and Standard Sanitary Corp., 540 F.2d 102 (1976) ("Lindy II "). Those cases concerned the payment of attorneys' fees out of a common fund, i. e., where attorneys' fees as well as all general damages come out of a single fund created by the defendants, so that an upward limit is placed on the amount of money available for attorneys' fees by the size of the fund itself. By contrast, in civil rights cases, attorneys' fees are awarded separately pursuant to statute, so that the amount of damages assessed against the defendant places no inherent upward limit on the amount of attorneys' fees to be awarded. It was perhaps out of concern for the possibility that attorneys' fees might be awarded in amounts totally disproportionate to the actual amount of damages awarded that the Hughes court added to the Lindy formulation a final means of determining overall reasonableness the so-called "post-Lindy discretionary adjustment," the scope of which will be hereafter examined.

 After it has been determined which hours are "reasonably supportive" of the successful claims, it must be determined whether it was "reasonably necessary to spend that number of hours" in support of those claims. Hughes, supra at 487. One factor in determining the reasonable necessity of the time spent, according to the Hughes court, is the simplicity of the case. The court rejected the lower court's determination that the proper time to weigh the simplicity of the issues is after the lodestar has been calculated:

 
The simplicity of the issues involved should be reflected in the court's determination of the hours reasonably devoted to the successful claims, a determination that must be made in arriving at the lodestar itself. Any other approach would penalize attorneys regardless of the number of hours reasonably devoted to successful claims.

 578 F.2d at 487. The meaning of this passage is, it seems, not that an exceptionally simple case calls for a corresponding reduction in the number of hours allowed, but that when the issues are simple, the hours allowed should not be more than would be reasonably necessary to litigate them. The court apparently intended that no attorney should be penalized just for taking a straightforward uncomplicated case. Thus, in order to have any effect on the size of a fee award, a finding that the case is exceptionally simple must be accompanied by a finding that the number of hours claimed exceeds the number that should reasonably have been devoted to such a simple task. *fn1"

 Next, it is necessary to compute the other component of the lodestar the reasonable hourly rate. Obviously, an attorney's normal hourly billing rate is not necessarily reasonable. See Baughman v. Wilson Freight Forwarding Co., 583 F.2d 1208 (3d Cir. 1978). However, since the court of appeals has stated that "(t)he value of an attorney's time generally is reflected in his normal billing rate," it might often be appropriate to use that normal rate as a starting point in determining what rate is a "reasonable one in light of all the circumstances of the litigation." Id. at 1217, quoting Lindy I, supra at 167. A major factor in this determination is, of course, the quality of the plaintiff's attorneys, their overall "experience, knowledge and legal talent." Id. at 1216-17, quoting Lindy II, supra at 117. The Lindy II court was careful to distinguish such consideration of the quality of the attorneys' work in general, from consideration of the quality of the attorneys' work in the particular case for which attorneys' fees are sought: the former is a lodestar determination while the latter may require a post-lodestar adjustment. 540 F.2d at 117. In determining what hourly rates reasonably correspond to an attorney's level of expertise, it may be helpful to make a comparison to rates awarded by other courts under similar circumstances. Meisel v. Kremens, supra, 80 F.R.D. at 426. The resulting hourly rate should be adjusted to reflect variations in the type of work performed; as the court of appeals advises, the trial court "should scrutinize the fee petition to determine what tasks were ministerial or clerical in nature, and that therefore should not be compensated at the same rate as legal services." Baughman, supra at 1217. It is also appropriate

 
to distinguish between legal work, in the strict sense, and investigation, clerical work, compilation of facts and statistics and other work which can often be accomplished by non-lawyers but which a lawyer may do because he has no other help available. Such non-legal work may command a lesser rate. Its dollar value is not enhanced just because a lawyer does it.

 Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717 (5th Cir. 1974). The rate should also reflect whether the work was performed by the attorney applicant or by junior partners, associates or paralegals. Id. See White v. Beal, 447 F. Supp. 788, 797 (E.D.Pa.1978). The final hourly rate is then multiplied by the reasonable number of hours to arrive at the lodestar figure.

 An adjustment to the lodestar may then be made for the contingency factor. The lodestar may be increased where the trial court is "impressed with the contingent nature of the case," i. e., with the difficulty of establishing liability. Hughes, supra at 491 (Garth, J., concurring). No downward adjustment of the lodestar, however, may be made for the contingency factor, even if the trial judge is singularly unimpressed with the contingent nature of the case. Id. at 487-88.

 Further adjustment, upward or downward, may then be made on the basis of the quality of the attorneys' work in conducting the particular litigation in question, in order "to take account of an unusual degree of skill, be it unusually poor or unusually good." Lindy I, 487 F.2d at 168. In making this inquiry into the quality of the attorney's work, the district court should simply focus upon whether "the lawyer discharged the professional burden undertaken with a degree of skill above or below that expected for lawyers of the caliber reflected in the hourly rates." Lindy II, 540 F.2d at 118. The Lindy II court stated that in making this determination, the district court may consider, inter alia, two factors: (1) the extent to which the relief granted to the plaintiff exceeded or fell short of the relief sought, as evidenced, for example, by a comparison of the actual damages recovered with the potential money damages available; (2) the extent to which the professional methods of the attorneys either expedited or delayed the proceedings.

 The resulting adjusted lodestar represents the limit of the trial court's inquiry in cases, like Lindy, involving the payment of attorneys' fees out of a common fund, and thus has been referred to as the "Lindy amount." Hughes, supra at 491 (Garth, J., concurring). In cases involving the award of attorneys' fees pursuant to a statute, however, there are two additional steps. First, it is appropriate to calculate some allowance for the time spent by the attorneys "in preparing the fee petition, to the extent that time was reasonably necessary to obtaining a reasonable fee award." Prandini v. National Tea Co., 585 F.2d 47, 54 (3d Cir. 1978). The value of such time should be added on after the contingency and quality adjustments have been made, upon the reasoning that "(s)uch hours are incurred apart from the prosecution of the main case, and it is upon the nature of the main case and the quality of the work done on it that adjustments to the lodestar are based." Baughman, supra, 583 F.2d at 1219.

 Second, under the rubric of the "post-Lindy discretionary adjustment," the trial judge is empowered to increase or decrease the Lindy amount "based on any rational factors that are relevant to the particular case." Id. at 492. The purpose of this adjustment, as stated in the Baughman case, is "to insure that the fee is no more than is reasonably warranted by the circumstances and by the purposes" of the applicable laws. 583 F.2d at 1219. When such an adjustment is made, however, the reasons for it "must all be articulated and supported by the record." Hughes, supra at 492; Baughman, supra at 1219.

 There are many appropriate considerations in determining the "reasonableness" of a fee. The case of Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974), cited with approval in the legislative history of the Civil Rights Attorney's Fee Awards Act of 1976, enumerates a dozen such factors, including the time and labor required, the skill needed to present the case, the customary fee for similar work, and the amount of damages or other relief obtained for the plaintiff. H.Rep.No.94-1558, 94th Cong., 2d Sess. 8 (1976). Accord, S.Rep.No.94-1011, 94th Cong., 2d Sess. 6, reprinted in (1976) U.S. Code Cong. & Admin. News, pp. 5908, 5913. See Hughes, supra at 488 n.7. Most of these factors will already have been taken into consideration in computing or adjusting the lodestar, id. at 488, but several are appropriate considerations only at this later stage. For example, the court of appeals emphasized that the fee to be awarded should be evaluated in light of the important substantive goals of the Civil Rights Act. Id. at 488-89 & n.8. A larger fee may be justified where the results obtained by the petitioning attorneys have helped to further important civil rights goals, as might be the case where a successful class action corrects across-the-board discrimination against a large class. See Johnson, supra at 718. The opposite, of course, would be true where the verdict affects only an individual plaintiff complaining of an isolated act of individual discrimination. Keown v. Storti, 456 F. Supp. 232, 242 (E.D.Pa.1978). See Hughes, supra at 492 n.5 (Garth, J., concurring). Another significant aspect of reasonableness would be whether the attorney has successfully advanced a novel theory or interpretation, i. e., whether the case has produced new law which might serve the public interest in the future through ...


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