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NORTHEAST WOMEN'S CENTER v. MCMONAGLE (07/10/89)

argued: July 10, 1989.

NORTHEAST WOMEN'S CENTER
v.
MCMONAGLE, MICHAEL, WALL, JOSEPH P., MURKUM, ROLAND, WALTON, HOWARD, TENAGLIO, HENRY, MORELLO, STEPHANIE, BREEN, ANNEMARIE, JONES, ELLEN, LONG, KATHY, SILCOX, SUSAN, ARMES, PAUL C., GEIS, WALTER G., AND O'BRIEN, JOHN J. CODICHINI, JAMES, WALTON, PATRICIA, SADLER, DIANE, SWYER, MIRIAM, BYRNE, MARY, CORBETT, LINDA, MCILHENNY, THOMAS, LUDWIG, PATRICIA, LYNCH, GERRALD, CAPONI, MARGARET, BAKER, DEBORAH, HERILHY, THOMAS, VARALLO, PASQUALE, STANTON, JOHN, KNORR, ANNE, CONNOR, JOHN, STEVENS, ELLIOTT, HAND, HARRY, WIRFELL, LAURIE, GAYTOS, HELEN, MORAN, ROBERT, ESSEX, EARL, MCNAMARA, PATRICIA, ANDRACAVAGE, DONNA, GUERRA, JUAN, HEARN, LINDA, MICHAEL MCMONAGLE, DENNIS SADLER, DEBORAH BAKER, THOMAS HERLIHY, ANNE KNORR, ROBERT MORAN, JOSEPH P. WALL, ROLAND MARKUN, HOWARD WALTON, HENRY TENAGLIO, STEPHANIE MORELLO, ELLEN JONES, ANNEMARIE BREEN, SUSAN SILCOX, PAUL C. ARMES, WALTER G. GIES, JOHN J. O'BRIEN, PATRICIA WALTON, KATHY LONG, HELENA GAYDOS, DONNA ANDRACAVAGE, JUAN GUERRA, MARGARET CAPONI, MARY BYRNE, THOMAS MCILHENNY AND PATRICIA MCNAMARA, APPELLANTS



On Appeal from the United States District Court for the Eastern District of Pennsylvania, (D.C. Civil Action No. 85-4845).

Higginbotham, Becker and Nygaard, Circuit Judges.

Author: Higginbotham

Opinion OF THE COURT

A. LEON HIGGINBOTHAM, JR., Circuit Judge.

This is an appeal from an order awarding attorneys' fees under the civil RICO statute. Because the district court applied the proper legal standards in its fee award, we will affirm the lower court's order.

I.

Plaintiff-appellee Northeast Women's Center, Inc. ("plaintiff" or "the Center") is a Pennsylvania corporation which provides abortions, pregnancy testing, and other gynecological services. The defendants-appellants ("defendants") are individuals who are strongly opposed to abortion and who have expressed their opposition in several demonstrations at the Center's location.*fn1

On August 20, 1985, the Center filed a civil action in the United States District Court for the Eastern District of Pennsylvania, naming as defendants thirteen individuals who allegedly disrupted the Center's operations by harassing the Center's clients and employees, trespassing on its property, and damaging its medical equipment. The complaint was later amended to name forty-two defendants. The Center sought damages and injunctive relief under the Sherman Antitrust and Clayton Acts, 15 U.S.C. §§ 1, 15 (1973), the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq. (1984), and under the common law torts of assault and battery, trespass, intentional infliction of emotional distress, libel, slander and intentional interference with contractual relations. On December 18, 1986, the court entered summary judgment for the defendants on the assault and battery and intentional infliction of emotional distress claims, Appellant's Appendix ("App.") at 42, and the plaintiff later withdrew its libel and slander claims.

The remaining RICO, trespass, and antitrust claims against thirty-one defendants were tried before a jury over three weeks in April and May, 1987.*fn2 On May 8, 1987, the court directed a verdict in favor of all defendants on the antitrust count, and in favor of four defendants on all extant claims. Northeast Women's Center, Inc. v. McMonagle, 670 F. Supp. 1300, 1313 (E.D.Pa. 1987).

In response to interrogatories prepared by the court, the jury found the twenty-seven remaining defendants liable under RICO and assessed $887 in damages,*fn3 which was trebled by the court to $2661 pursuant to 18 U.S.C. § 1964(c). Twenty-four defendants were found liable for trespass, for which the jury assessed $42,087.95 in compensatory damages.*fn4 The jury also found that three defendants had interfered with the plaintiff's contractual relations with its employees, but assessed no damages on that claim, as it found no proximate loss resulting from the interference. In accordance with the verdict, the court entered a $44,748.95 judgment in favor of the Center, and granted injunctive relief on the Center's trespass claim. Northeast Women's Center, Inc. v. McMonagle, 665 F. Supp. 1147, 1163-64 (E.D.Pa. 1987).*fn5 On March 31, 1988, the court denied the defendants' motions for a new trial and for judgment notwithstanding the verdict, except as to one defendant whose motion for a j.n.o.v. was granted. Northeast Women's Center, Inc. v. McMonagle, 689 F. Supp. 465 (E.D.Pa. 1988).*fn6

On October 13, 1987, the Center filed a motion for attorneys' fees and costs pursuant to the fee-shifting provision of the civil RICO statute, 18 U.S.C. § 1964(c),*fn7 and the bad faith exception to the so-called American Rule.*fn8 The Center initially sought $84,713.23 in fees and $11,808.79 in costs. Subsequently, the plaintiff voluntarily reduced its fee demand to $76,888.67 in fees and $11,808.79 in costs.*fn9

The court held a hearing on the plaintiff's fee petition on May 16, 1988. An attorney appearing on behalf of all of the defendants stated that the defendants would not present additional evidence or testimony, and wished to rest on the contentions in their briefs. App. at 306.

In its July 15, 1988 decision, the district court found that the $125 hourly rate charged by the plaintiff's lead counsel and the $90 rate charged by associate counsel were "reasonable and commensurate with prevailing rates in this area for attorneys possessing a similar degree of skill, experience and talent." App. at 307. The court then examined at some length the defendants' challenges to the number of attorney hours claimed by the plaintiff. Because the district court's injunction was issued pursuant to the trespass count, and not the RICO claim, the court excluded $18,443.75 in fees and $391.85 in costs related to the injunction proceedings. App. at 309-11. One hundred dollars in costs associated with the plaintiff's claim against the defendant who won a j.n.o.v. was also deducted from the plaintiff's claim. App. at 312.

The district court rejected the defendants' contention that the hours claimed should be reduced by seven eighths because the RICO claim was one of the eight claims in the plaintiff's complaint, and that the lodestar should be reduced further to take into account the fact that the plaintiff ultimately prevailed against only twenty-six of the forty-two defendants named in its amended complaint. The court reasoned:

It is true that fees in this case are awarded under the RICO statute only. As such, they are awarded in relation only to plaintiff's successful RICO claim. Cf. Baughman v. Wilson Freight Forwarding Co., 583 F.2d [1208,] 1216 [(3d Cir. 1978)] (attorney's fees awarded under Clayton Act are awarded only in relation to a successful anti-trust claim). However, defendants' proposition is not a rational formula for determining the hours reasonably expended litigating plaintiff's RICO claim. Defendants have not made any properly supported challenge to the plaintiff's claim as to the hours spent litigating the RICO claim as opposed to the other substantive claims in this case, or to the unreasonableness of the number of hours spent litigating the RICO claim. Defendants have not sought a downward adjustment of the lodestar.

This court notes that the claims which made up the bulk of the litigation were the RICO claim and the pendent state law claims of trespassing and intentional interference with contract. The claims for trespassing and RICO (especially as it pertained to the existence of an enterprise and pattern of activities) were proven by the same evidence -- video-taped recordings of the defendants on or around plaintiff's property. Much of counsel's time was devoted to the development of the evidence and the litigation as a whole.

App. at 312-13.

However, the court found that $3,328.75 of the claimed fees were directly related to the plaintiff's trespass and unsuccessful antitrust claims, and accordingly reduced the award by that amount. The court also reduced the fees by $1,487.00 to exclude compensation for time spent on certain unnecessary post-trial contempt motions. However, with respect to the RICO claim, the court found that "[given] the novelty and complexity of the legal and factual issues presented and the time, labor, and effort required to successfully present the RICO claim, the number of hours expended by the plaintiff litigating the RICO claim appears reasonable." App. at 315.

In accordance with the above rulings, the court on July 15, 1988 entered its judgment for an award of $64,946.11 in attorneys' fees and costs. This appeal followed. We ...


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