On Appeal from the United States District Court for the Western District of Pennsylvania.
Adams and Sloviter, Circuit Judges, and Kelly, District Judge.*fn*
Plaintiffs in the court below appeal in No. 83-5246 from the district court's order setting their counsel fees. Defendant-Intervenor, Homer C. Floyd, Executive Director of the Pennsylvania Human Relations Commission (PHRC), filed a cross-appeal on No. 83-5262 from the award of any attorney's fees against it. Following the argument, we ordered this matter held until the Supreme Court's decision in Blum v. Stenson, then pending. After that decision was announced, 465 U.S. 886, 79 L. Ed. 2d 891, 104 S. Ct. 1541, 52 U.S.L.W. 4377 (1984), we gave the parties the opportunity to comment thereon. In No. 83-5262, we will affirm the district court's order. In No. 83-5246, we will remand to the district court for reconsideration in light of Blum v. Stenson.
Facts and Procedural History
This action was filed by plaintiffs in October 1978 as a class action against the Beaver County Housing Authority (Housing Authority). Plaintiffs, who were represented by Neighborhood Legal Services (NLS), contended that the Housing Authority was violating Title VIII of the Civil Rights Act of 1968 and the Fourteenth Amendment by maintaining an admission policy that limited the number of black occupants in the Housing Authority projects. The Housing Authority's policy had resulted from a consent order between it and the PHRC entered in October 1975 that resolved a formal complaint filed before the PHRC charging the Housing Authority with having unlawfully segregated its tenants by race. Since the present action in effect challenged the constitutionality of at least some of the provisions of that decree, the PHRC requested and was permitted to intervene in this suit as a matter of right; Homer C. Floyd, Executive Director of the PHRC, was substituted for it as defendant-intervenor. During the proceedings in the district court, the PHRC expressed its willingness to conform the consent decree between it and the Housing Authority to constitutional standards.
Following several years of discovery, and a six-day non-jury trial, the district court declared the Housing Authority's admission policies violated the Fourteenth Amendment and Title VIII. Burney v. Housing Authority, 551 F. Supp. 746 (W.D. Pa. 1982). Plaintiffs then submitted a motion for attorney's fees, and the district court awarded NLS attorney's fees and costs of $26,956.90. Plaintiffs had sought a lodestar amount of $48,480, based on 518.25 hours at $90 an hour for lead counsel and $65 an hour for assistant counsel. Plaintiffs also requested that this amount be multiplied by three because of the contingent nature of success, the complexity of the constitutional issues involved, and the quality of litigation. The total amount requested for fees and costs was $147,796.90.
The district court found that the number of hours expended by counsel was reasonable, but instead of awarding fees based on the requested rates awarded $50 an hour for lead counsel and $35 an hour for assistant counsel, with an increase to $60 for lead counsel for the last year involved. The court also refused the request to multiply the lodestar amount. The district court based its award of the hourly rate on that awarded NLS in an earlier case before that court, Inmates of the Allegheny County Jail v. Peirce. The court divided the costs and attorney's fees between the Housing Authority and the PHRC, 75% and 25% respectively.
On appeal, plaintiffs argue that the district court applied an incorrect legal standard in arriving at the hourly rate applied to their request for attorney's fees. They contend that the court's failure to consider the actual market value of such services was error. They also contend that the court abused its discretion in failing to grant an addition to the lodestar amount. In its cross-appeal, the PHRC contends that the district court erred as a matter of law in awarding any fees against it. The PHRC maintains that it in no way caused or protracted this litigation or caused harm to the plaintiff during it. In addition, the Housing Authority attacks the judgment, but without cross-appealing, on the ground that plaintiff did not succeed on all claims asserted.
Plaintiffs' Appeal - Hourly Rates and Lodestar
In Blum v. Stenson, supra, decided after the district court's decision in this case, the Supreme Court elucidated the principles to guide the federal courts in awarding a reasonable attorney's fee under 42 U.S.C. § 1988 when plaintiffs are represented by non-profit legal services organizations, as in this case. The Court rejected the arguments of the state-entity defendant that fees in such instances should be calculated according to the cost of providing legal services rather than according to the prevailing market rate.The Court, after reviewing the statute and legislative history, determined instead that "'reasonable fees' under § 1988 are to be calculated ...