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. e du/thir dc ir c uit_2000/5Filed January 7, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 99-1241

UNITED STATES OF AMERICA

v.

ELEVEN VEHICLES, THEIR EQUIPMENT AND ACCESSORIES; ALL MONIES AND/OR INTERESTS IN

CERTAIN ACCOUNTS IN BANKS OR CERTAIN OTHER FINANCIAL INSTITUTIONS; ONE BUSINESS; ANY & ALL PROCEEDS, FROM THE SALES THEREOF

ROBERT CLYDE IVY; WAYNE K. RADCLIFFE; TERRANCE P. FAULDS; IRENE IVY; KLEINBARD, BELL & BRECKER; MELLON BANK, N.A.; LEBANON VALLEY NATIONAL BANK; MARY E. IVY; GERALD SCHULER; CLYDE IVY;
IRENE IVY; ELAINE K. RADCLIFFE; MICHELLE E. RADCLIFFE,

Claimants in District Court

Robert Clyde Ivy and Irene Ivy,

Appellants

On Appeal From the United States District Court For the Eastern District of Pennsylvania (D.C. Civ. No. 91-cv-06779) District Judge: Honorable Eduardo C. Robreno

Argued: October 1, 1999

Before: NYGAARD, ALITO and ROSENN, Circuit Judges.

(Filed January 7, 2000)Charles H. Ivy, Esquire (Argued)

Law Office of Charles H. Ivy 20 South Prado Street, N.E. Atlanta, GA 30309-3309

Counsel for Robert Clyde Ivy and Irene Ivy

Catherine L. Votaw, Esquire (Argued) J. Alvin Stout, III, Esquire Michael R. Stiles, Esquire Office of the United States Attorney

615 Chestnut Street Suite 1250 Philadelphia, PA 19106

Counsel for United States of

America

OPINION ANNOUNCING THE

JUDGMENT OF THE COURT

ROSENN, Circuit Judge.

This appeal presents a recurring problem concerning the amount of fees due counsel under a fee-shifting sta tute. The case also presents the grim reality feared by t he Supreme Court of the United States when it warned t hat a "request for attorney's fees should not result in a second major litigation." Hensley v. Eckhart, 461 U.S. 424 , 437 (1983). More specifically, we are presented with a challenge to the adequacy of a supplemental award of attorney fees and expenses for work performed in post-judgment fe e litigation in a civil forfeiture proceeding initiat ed by the

United States in 1991 in the District Court for the Eastern District of Pennsylvania. After securing the court- ordered release of property seized by the United States Gov ernment because it was thought to be involved in illegal mo ney laundering activities, appellants sought attorney f ees and expenses incurred in seeking the property's release pursuant to the Equal Access to Justice Act ("EAJA" ), 28 U.S.C. S 2412(d)(1)(A). In its fourth published opi nion in this case, the district court awarded the appellant $142,643.26 in attorney fees and $7963.51 in expens es

2covering services through September 26, 1996. See U nited

States v. Eleven Vehicles, 966 F. Supp. 361 (E.D. P a. 1997) [hereinafter Eleven Vehicles IV]. 1 Subsequently, t he appellants filed a supplemental request for $23,333 .81 in attorney fees and $560 in expenses incurred after September 26, 1996 in litigating their entitlement to fees and expenses for the underlying forfeiture litigati on. The court awarded the appellants $5000 in attorney fees plus $560 in expenses. Disappointed, the appellants, Rob ert Clyde Ivy and Irene Ivy, timely appealed. We remand

.

I.

In October 1991, the Government filed a complaint f or forfeiture of the assets of numerous parties, inclu ding Appellants Robert Clyde Ivy and Irene Ivy ("the Ivy s"). Over the next four-and-a-half-years, the trial court ord ered the piece-by-piece release of all the Ivys' seized prop erties pursuant to partial grants of summary judgment in O ctober 1993 and September 1995, and a final dismissal of t he Government's forfeiture complaint, with prejudice, in March 1996.2 In dismissing the case, the district court e xpressly retained jurisdiction for the purpose of considerin g the Ivys' request for attorney fees and expenses pursuant to the EAJA, and the Government's motion for a "certificat e of

reasonable cause" under 28 U.S.C. S 2465. The certi ficate of reasonable cause, if granted, would have protected the individuals who actually seized the property at iss ue from liability to the property owners, and would prevent the claimants from recovering costs from the Government

, though not fees or expenses.

On August 30, 1996, the district court granted the requested certificate of reasonable cause. It held, however, that the Ivys were entitled to attorney fees at a r ate of $112.28 per hour and to expenses. Eleven Vehicles I II, 937

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1. The district court had previously found that the appellants were entitled to attorney fees and expenses under the EA JA. See Eleven Vehicles III, 937 F. Supp. 1143 (E.D. Pa. 1996).

2. The district court had jurisdiction over this fo rfeiture action
pursuant to 28 U.S.C. SS 1345 and 1355, and 18 U.S.C.SS 981( a)(1)(A), 981(a)(1)(C), and 981(f).

3F. Supp. at 1149-56. In ruling on the Ivys' entitle ment to

fees and expenses, the court found that the Ivys we re a "prevailing party" in the litigation, the Governmen t's litigating position had not been "substantially jus tified," and no "special circumstances" existed that would r ender an attorney fee award unjust.3 Id. at 1150-55. The district court ordered the Ivys to submit an itemized statem ent of counsel's hours and rates by September 30, 1996. Id . at 1156. The Ivys submitted the required materials on that date. These materials covered work performed on the case through September 26, 1996. The Government filed objections to some of these requested fees.

The Government filed a motion for reconsideration o f the award of attorney fees and expenses. The Ivys filed a motion for reconsideration of the grant of a certif icate of reasonable cause and the failure to grant attorney fees at market rate. The Ivys also filed a motion requestin g the court to adjust the hourly billing rate of $112.28, established by the court for calculating the amount of attorney fees owed to the Ivys, upward to reflect c ost of living. The parties filed responses to each other's motions.

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3. The EAJA provides in pertinent part:

(A) Except as otherwise specifically provid ed by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in an y civil action (other

than cases sounding in tort), ... brought by or a gainst the United

States in any court having jurisdiction of that act ion, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

(B) A party seeking an award of fees and ot her expenses shall, within thirty days of final judgment in the action, submit to the court an application for fees and other expe nses which shows that the party is a prevailing party and is eligi ble to receive an award under this subsection, and the amount sought , including an itemized statement from any attorney or expe rt witness representing or appearing in behalf of the party stating the actual time expended and the rate at which fees and other expense s were computed. The party shall also allege that the position of the United States was

not substantially justified.

28 U.S.C. S 2412(d)(1).4In November 1996, the Ivys apparently gave the

Government and the court notice that they intended at some future date to seek attorney fees and expenses for work performed after September 26, 1996.

On May 30, 1997, the district court denied the Government's motion for reconsideration as merely a "rehash" of earlier arguments in the litigation. As for the Ivys' motion for reconsideration of the grant of th e certificate of reasonable cause and the court's den ial of their entitlement to attorney fees at market rates, the court also, after careful consideration, denied it as ess entially a restatement of their earlier arguments. Eleven Vehi cles IV, 966 F. Supp. at 363-66. However, the court granted the Ivys' request for a cost of living adjustment, revi sing the compensable hourly billing rate upward to $120.68. Id. at 366-67. Finally, the court accepted one of the Gove rnment's narrow objections to the fees requested by the Ivys , rejected the remainder of the Government's objections, and g ranted attorney fees for 1182 hours of work in the amount of $142,643.76, and expenses in the amount of $7,963.8 1. Id.

at 367-69.

On August 27, 1997, the Ivys submitted to the distr ict court a supplemental request for attorney fees and expenses covering work performed after September 26

, 1996. In this application, the Ivys requested $23,3 33.81 in fees as compensation for 190.9 additional hours wor k, and $560.00 in expenses. The Government opposed this supplemental request, arguing that the requested supplemental payment was not authorized by any law, and

was in essence a motion under Federal Rule of Civil Procedure 59(a) to alter or amend the May 30, 1997 award. Because such a request must be filed within 10 days after judgment, the Government asserted that the request was untimely, and the court's March 30, 1997 award was sufficiently generous and adequate to cover additio nal fees and expenses accumulated between September 26, 1996 and May 30, 1997. Further, the Government argued th at the Ivys were not entitled to receive fees and expe nses for post-judgment work, particularly work related to th e decision not to take an appeal. The Ivys responded to the Government's arguments, and in addition asserted th at the

5Government's memorandum in opposition was untimely

and therefore should not be considered by the distr ict

court.

After a telephone conference with counsel for the p arties, the court issued its decision. Eleven Vehicles V, 3 6 F. Supp. 2d 237 (E.D. Pa. 1999). The court first held that t he Ivys' supplemental fee application was not a Rule 59(a) m otion,

but instead arose under the EAJA. Id. at 238 n.1. I t then addressed the merits of the application, considerin g the supplemental application as a whole along with thef irst application and fee award. Id. at 239. The court st ated that

it took into account all of the factors it had cons idered in determining the first fee award. In addition, the d istrict court considered that "the supplemental request inv olves work performed on motions for reconsideration of do ubtful validity filed by both parties," and that "the 190 hours spent by counsel appears `excessive, redundant and otherwise unnecessary.' " Id. (citation omitted). B ased on these factors, the court awarded the Ivys an additi onal $5,000 in fees and $560.00 in expenses. The distric t court's opinion did not address the Ivys' argument that the Government's opposition to their request was untime ly and

should not be considered.

II.

On appeal, the Ivys make several substantive argume nts in support of their assertion that the district cou rt erred in awarding them less attorney fees than they requeste d. In addition, they contend that the court abused its di scretion by entertaining the Government's late-filed memoran dum opposing their supplemental request for attorney fe es and expenses. The Government argues that the supplement al fee application is, in essence, a motion to alter o r amend the district court's May 30, 1997 original fee awar d under Federal Rule of Civil Procedure 59(e).4 Accordingl y, the

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4. In the district court, the Government argued in its opposition to the Ivys' supplemental fee application that the applica tion was effectively a motion to amend the court's findings of fact under Fed. R. Civ. P. 59(a), not 59(e). However, in the instant case, there is l ittle practical effect

to

6Government contends that the Ivys were obliged to c omply

with that Rule's requirement that such motions befi led "no later than 10 days after the entry of the judgment. " Fed. R. Civ. P. 59(e). Because the Ivys' supplemental fee r equest was filed approximately three months after entry of the May 30, 1997 award of attorney fees, the Government ass erts that the request was untimely, and thus the court l acked subject matter jurisdiction. The district court rej ected this argument, Eleven Vehicles V, 36 F. Supp. 2d at 238 n.1, and the Government did not appeal this issue.

It appears well settled that a motion for supplemen tal attorney fees is not a Rule 59(e) motion. In White v. New Hampshire Dep't of Employment Security, 455 U.S. 44 5, 447-48 (1982) the Court addressed a situation in wh ich the petitioner requested attorney fees under the Civil Rights Attorney's Fees Awards Act, 28 U.S.C. S 1988, four- and-ahalf months after winning judgment on the merits. T he respondent argued that the motion was governed by t he 10- day time limit of Fed. R. Civ. P. 59(e), and was th erefore untimely. The Supreme Court held that Rule 59(e) wa s reserved "only to support reconsideration of matter s properly encompassed in a decision on the merits." Id. at 451. The Court concluded that "a request for attorn eys fees . . . raises legal issues collateral to the main ca use of action -- issues to which Rule 59(e) was never intended to apply." Id. It held that attorney fees are not "compensatio n" for the injury suffered and are not an "element of `relief ' ":

[A] motion for attorney fees is unlike a mot ion to alter or amend a judgment. It does not imply a cha nge in the judgment, but merely seeks what is due b ecause of the judgment. It is, therefore, not governed by the provisions of Rule 59(e).

Id. at 452-53 (quoting Knighton v. Watkins, 616 F.2 d 795,

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this discrepancy. Moreover, the court explicitly re lied on Brown v. Local 58, Int'l Bhd. of Elec. Workers, AFL-CIO, 76 F.3d 7 62 (6th Cir. 1996), which considered the same argument under Rule 59(e) . The court here stated that it saw no difference between relying on subdivision (a) or subdivision (e) of Rule 59. Thus, for purposes of o ur review, this discrepancy is immaterial.

7797 (5th Cir. 1980)). Numerous other decisions of t he

Supreme Court, this court, and other circuit courts have

made the same observation. See Federal Communicatio ns Comm'n v. League of Women Voters of Cal., 468 U.S. 364, 373 n.10 (1984) ("a postjudgment request for attorn ey fees is not considered a motion to amend or alter the ju dgment under Rule 59(e)").5

The Government asserts that Rule 59(e) nevertheless applies in this case because the "judgment" the Ivy s sought to "alter or amend" with their supplemental fee app lication was the initial May 30, 1997 award of attorney fees

. However, under White, this May 30 award was not a "judgment" at all. See also Cartledge v. Heckler, 6 15 F. Supp. 545, 546 (N.D. Ill. 1985) ("[U]nder 28 U.S.C. S 2412(d)(1)(A), as under other fee-shifting statut es, the fee award is really in addition to and not part of the judgment."); Watkins v. Harris, 566 F. Supp. 493, 4 95 (E.D. Pa. 1983) ("[t]he EAJA is a fee shifting statute an d if attorneys' fees are awarded, they are in addition t o the amount of the judgment"); cf. Schultz v. Crowley, 8 02 F.2d 498, 500-05 (D.C. Cir.) (suit is final and not"pend ing"

under the EAJA when merits have been decided even though post-judgment motion for attorney fees remai ns unresolved), reh'g denied, 806 F.2d 281 (D.C. Cir. 1986), cert. denied, 484 U.S. 869 (1987). The underlying "judgment" in this case was the district court's di smissal of the forfeiture proceedings. Because Rule 59(e) only applies to motions to alter or amend a judgment, it is inap plicable

here.

Moreover, even if an initial award of attorney fees is a "judgment," a supplemental request for fees and exp enses incurred during a period of time different from and subsequent to the time period covered by an initial fee award cannot be a motion under Rule 59(e) because t he supplemental request does not seek to alter or amen d the

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5. Other cases in accord are: Utah Women's Clinic, Inc. v. Leavitt, 75

F.3d 564, 567 (10th Cir. 1995), cert. denied, 518 U.S. 1 019 (1996); Samuels v. American Motor Sales Corp., 969 F.2d 573, 577-78 (7th Cir. 1992); Schake, 960 F.2d at 1192; Cruz v. Hauck, 762 F.2d 1 230, 1236-37 (5th Cir. 1985).

8initial award. Rather, such a request seeks to addr ess only

fees and expenses not considered in the prior award determination. See Brown v. Local 58, Int'l Bhd. of Elec. Workers, AFL-CIO, 76 F.3d at 769-70.

Thus, the question remains under what authority cou ld the district court consider the Ivys' supplemental request for attorney fees and expenses.6 The Ivys appear to contend that their supplemental request was a valid motion under the EAJA. However, the Ivys misconstrue the timing requirements of the EAJA. The EAJA requires that a party seeking an award of fees and other expenses shall s ubmit its application to the court within thirty days of final judgment in the action. 28 U.S.C. S 2412(d)(1)(B). The underlying "action" here is the Government's forfei ture proceeding against the Ivys' property. The "final j udgment" contemplated by the statute, it seems clear, is the judgment dismissing that forfeiture proceeding. It is not, a s the Ivys argue, the May 30, 1997 adverse ruling on the parti es' motions to reconsider ancillary matters. That rulin g involved only post-judgment residual proceedings de aling with fees, costs, and expenses.7

There currently is no dispute that the Ivys satisfi ed the EAJA's requirements for their initial claim to atto rney fees and expenses incurred in the underlying litigation. They filed their claim within thirty days after thefinal dismissal of the forfeiture case became unappealable. The dis trict

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6. The only other case to address the precise quest ion at issue here was Brown v. Local 58, Int'l Bhd. of Elec. Workers, AFL -CIO. See 76 F.3d at 769. Although the Court of Appeals for the Sixth Ci rcuit in Brown rejected the appellants objections to the jurisdict ion of the district

court, it did not explain on what basis the district court could consider an application for supplemental attorney fees.

7. The underlying forfeiture action was dismissed w ith prejudice and "final judgment" entered on March 26, 1996. (See Di st. Ct. Dkt. Entry # 146). The concurrence states that the district co urt's August 30, 1996 decision in Eleven Vehicles III was thefinal judgme nt in the underlying forfeiture action. However, the court's Eleven Vehi cles III decision dealt only with post-judgment issues ancillary to the Mar ch 1996 dismissal of the forfeiture case. As discussed above, these issu es had no effect on the finality of the March 26, 1996 judgment dismissing the underlying

forfeiture action.

9court, in a thoughtful and carefully written opinio n, held in

Eleven Vehicles III that the Ivys were a"prevailing party" in the forfeiture litigation, that the Government did not substantially justify its litigating position, and that there were no "special circumstances" that would make an award unjust. The Supreme Court has held that under the E AJA, once these findings are made a claimant need not re litigate these issues in later claims for attorney fees. See Commissioner, Immigration & Naturalization Serv. v. Jean, 496 U.S. 154, 158-62 (1990). Moreover, this court h as held that once an EAJA fee request has been timely filed

, "deficiencies in the contents of the claim may be c orrected if the government cannot show any prejudice arising from

the later correction of these deficiencies." See Du nn v. United States, 775 F.2d 99, 103-04 (3d Cir. 1985); see also Bazalo v. West, 150 F.3d 1380, 1383-84 (Fed. Cir. 1 998) (adopting this circuit's reasoning in Dunn). The Du nn Court reasoned that Congress envisioned only one strict requirement in EAJA fee cases, namely that the cour t and the Government be put on notice that the claimant s eeks

fees under the EAJA. 775 F.2d at 104.

Thus, once the jurisdictional elements of an initia l claim for attorney fees under the EAJA have been shown, t he strictures of the EAJA do not dictate when a reques t for supplemental fees must be filed. In the absence of a timeliness requirement imposed by statutory command , a Federal Rule of Civil Procedure, or an applicable l ocal court rule, "the only time limitation arises out of those equitable considerations that a district judge may weigh in h is discretion." Hicks v. Southern Maryland Health Syst ems Agency, 805 F.2d 1165, 1166-67 (4th Cir. 1986); Cru z, 762 F.2d at 1236-38; see also Smith v. Bowen, 815 F.2d 1152, 1156 (7th Cir. 1987) (motion for attorney fees is g overned by Fed. R. Civ. P. 54, which " `imposes no time lim it apart from an implicit requirement of reasonableness' " ( quoting Spray-Rite Serv. Corp. v. Monsanto Co., 684 F.2d 12 26, 1248 (7th Cir. 1981), aff'd on other grounds, 465 U .S. 752 (1984) (citation omitted))). The Ivys waited approx imately three months after the May 30, 1997 decision to req uest supplemental attorney fees. In addition, all of the supplemental fees and expenses applied for were inc urred, and therefore known to the Ivys, prior to the distr ict court's

10May 30, 1997 decision. Accordingly, the Ivys could and

should have supplemented their fee request prior to the

court's decision in Eleven Vehicles IV. Based on su ch equitable considerations, had the district court re fused to entertain the Ivys' supplemental request because of their three-month delay, it would have been within its di scretion so to do. This is especially true given the Supreme Court's admonition in Hensley that a request for attorney f ees should not result in a second major litigation. Hen sley, 461

U.S. at 437.

Nevertheless, the district court in the exercise of its discretion chose to entertain this supplemental req uest. The Ivys' initial fee request clearly covered only fees and expenses incurred through September 26, 1996. All p arties were aware at the time that request was filed that the Government's motion for reconsideration of the Ivys ' right to a fee award, the Ivys' motion for reconsideratio n of the Government's right to a certificate of reasonable c ause, and the Ivys' motion for a cost of living adjustment to the compensable attorney billing rate remained pending before the district court. The Government acknowledges tha t in the course of litigating its objections to the Ivys 'first request for fees and expenses, the Ivys put the cou rt and the Government on notice that they reserved the rig ht to submit a statement of fees and expenses incurred af ter September 26, 1996. The Ivys appear to have delayed three months in requesting additional fees and expenses b ecause they incorrectly believed that they were required t o wait to apply until 30 days after the May 30, 1997 judgment became unappealable. Thus, we cannot say that the d istrict court abused its discretion in considering the Ivys ' supplemental request.8

Thus, we turn to the Ivys' challenges to the distri ct court's legal analysis, and their argument that the court

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8. The Government's suggestion that it was prejudic ed by the Ivys' delay in filing its supplemental request because it could not appeal the final fee award rings hollow. The Government was free to appeal the May 30,

1997 award if it chose so to do. The Government was also free to appeal the January 20, 1999 supplemental award if it chose to do so. It does not appear that the Government was in any way preju diced by the Ivys' delay.

11abused its discretion in failing to address their c ontention

that the Government's memorandum in opposition to t heir supplemental fee request was untimely and should no t

have been considered.

III.

The Ivys assert that the district court erred in se veral ways in its analysis of their supplemental fee requ est. Their arguments essentially boil down to the following: ( 1) the court failed to justify or explain its findings tha t the claim submitted was "excessive, redundant, or otherwise unnecessary"; (2) the court sua sponte improperly g ranted attorney fees in an amount below that requested in the absence of a Government challenge to the requested amount; (3) the court disallowed hours worked and g ranted less than the amount submitted without making the findings required by EAJA S 2412(d)(1)(C); and (4) the court failed to inquire into the particulars of the suppl emental fee request, instead relying on its "generalized sense" of what

fee was reasonable for the entire case. Our review of such challenges to the legal standards applied by the di strict court is plenary. See Bell v. United Princeton Prop erties, Inc., 884 F.2d 713, 718 (3d Cir. 1989).

The district court awarded the Ivys less in attorne y fees than requested for the supplemental proceeding s at least in part because it found that "the 190 hours spent by counsel appears `excessive, redundant and otherwise unnecessary.' " Eleven Vehicles V, 36 F. Supp. 2d a t 239 (quoting Becker v. ARCO Chem. Co., 15 F. Supp. 2d 6 21, 633 (E.D. Pa. 1998)). When this court reviews such a finding, it is presented with two issues: "first, w hether the district court abused its discretion in concluding that the hours expended on a certain task were excessive; an d second, whether the district court abused its discr etion in concluding that a certain number of hours would be a reasonable number of hours to expend on that task." Rode v. Dellarciprete, 892 F.2d 1177, 1187 (3d Cir. 1990 ).

The court, in the instant case, may have been corre ct in its conclusions but regrettably did not explain how it reached them. The Supreme Court has instructed that it is

12important "for the district court to provide a conc ise but

clear explanation of its reasons for the fee award. " Hensley, 461 U.S. at 437. We have held, in reviewing similar situations, that to resolve these issues "the distr ict court must explain on the record the reasons for its deci sions." Rode, 892 F.2d at 1187. Indeed, the lack of explana tion makes it difficult for us to address with any compe tence the Ivys' remaining challenges to the district court's decision.

We therefore are constrained to remand this case to the district court for an explanation of its reasons fo r the fee award. At the same time, we believe it is appropria te to provide the district court with some guidance beari ng on the Ivys' other challenges.

A.

First, the Court stated in Commissioner, Immigratio n and

Naturalization Service v. Jean that "fees for fee l itigation should be excluded to the extent that the applicant ultimately fails to prevail in such litigation." 49 6 U.S. at 163 n.10. In the instant case, the Ivys request fee s for one unsuccessful claim -- their motion and ensuing acti vity for the district court to reconsider its grant of a cer tificate of reasonable cause to the Government. In essence, thi s motion litigated the issue of the Ivys' entitlement to costs for the underlying forfeiture claim. Nevertheless, there is no reason why the Court's admonition about unsuccessfu l "fees for fee litigation" does not apply equally to "fees for cost litigation." See Hathaway v. United States, No . 93- 36158, 1995 WL 66783, at *1 (9th Cir. Feb. 16, 1995 ); Davis v. United States, 887 F. Supp. 1387, 1389 (D. Colo. 1995). Thus, the Ivys are not entitled to fees for litigating

this motion.

B.

Second, the Ivys note that in this circuit, a court may not reduce counsel fees sua sponte as "excessive, redun dant, or otherwise unnecessary" in the absence of a sufficie ntly specific objection to the amount of fees requested. In statutory fee cases, it is well settled in this cir cuit that in calculating the "lodestar," or initial fee calculat ion requiring

13the court to multiply a reasonable hourly fee by th e

reasonable amount of hours worked, the district cou rt may not award less in fees than requested unless the op posing party makes specific objections to the fee request. As this court stated in Cunningham v. City of McKeesport,

when an opposing party has been afforded the opportunity to raise a material fact issue a s to the accuracy of representations as to hours spen t, or the necessity for their expenditure, and decline s to do so, no reason occurs to us for permitting the tr ial court to disregard uncontested affidavits filed by a fee applicant.

753 F.2d 262, 266 (3d Cir. 1985), vacated on other grounds, 478 U.S. 1015 (1986), and reinstated, 807 F.2d 49 ( 3d Cir. 1986); see also McDonald v. McCarthy, 966 F.2d 112, 118 (3d Cir. 1992); Bell, 884 F.2d at 719. A district c ourt may not " `decrease a fee award based on factors not ra ised at all by an adverse party.' " Rode, 892 F.2d at 1183 (quo ting Bell, 884 F.2d at 720).9 However, once the opposing party has made a sufficiently specific objection to the s ubstance of a fee request, "the court has a great deal of di scretion to adjust the fee award in light of these objections." Bell, 884 F.2d at 721. The rationale for this prohibition on sua sponte fee award reductions is twofold. First, sua sponte reduction deprives the applicant of the right "to o ffer evidence in support of the reasonableness of the re quest." Bell, 884 F.2d at 719. (internal quotation marks om itted). Second, "because statutory fee litigation is advers arial litigation, there is no need to allow the district court to

reduce a fee award on its own initiative." Id.

Although cases establishing and applying this rule appear to do so in calculating the "lodestar," we b elieve that

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9. One exception to this rule is that the district court may make sua sponte reductions where it has personal knowledge o f the costs involved in certain aspects of the litigation, for example w here the court presided over a hearing or conference and knows exactly how much time and effort that proceeding involved. See Cunningham, 75 3 F.2d at 267. For example, this exception would appear applicable in the present case to fees for the November 9, 1998 telephone conference over which the district court presided.

14the rule's rationale applies with equal force to po stjudgment supplemental applications for "fees for fe e litigation" as it does in calculating fees due for litigating the merits of the underlying claim. Only with proper no tice can the claimant know which request to defend as reason able. Moreover, as evidenced by this case, post-judgment fee litigation remains adversarial. This circuit's prec edent

therefore binds the district court not to reduce th e fee amount requested sua sponte, in the absence of a Government objection. Nevertheless, this prohibitio n on sua sponte reduction of fees applies only to challenges to the excessiveness of a fee request. Here, the Governmen t's objections to the Ivys' supplemental fee request ar e more appropriately described as legal challenges to cert ain types of attorney work that are simply never compensable under the EAJA.10 Thus, if the district court agrees that categories of work for which the Ivys request fees are not com pensable under the EAJA, it should prune the fees requested for this work from its fee award. Although the court could h ave taken this approach, it does not appear to have mad e any

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10. The Government's statement challenging categori es of work for which the Ivys requested fees, found in its memorandum in opposition to the Ivys' supplemental request for attorney fees and ex penses, was as follows:

The Ivys seek to be compensated for limited negotiations in which they rejected the Government's offer and the n rejected the Government's offer to negotiate a settlement and for research and other post-judgment work. The Ivys even seek to be paid for giving

the Government claimants' and counsel's soci al security numbers, required by the Treasury Department to write a check and even the time it took to answer Treasury Department's confirming phone call to counsel. (Exhibit 1, 7/22/97; 7/24/97, 7/ 30/97).

Post judgment time spent bringing unsuccess ful appeals is not compensable; it makes even less sense to awa rd fees for the

decision not to take such an appeal. [Griffin v. Stro ng, 827 F. Supp. 683,

687 (D. Utah 1993)]. Further, time devoted to cl erical activities and background research is normally included in overhead and not

billable to clients. The Government should n ot be held to pay such expenses. Id.

The Government placed the above-quoted passage unde r the heading: "No Award for Post-Judgment Work Absent Appeal."

15of the legal conclusions invited by the Government' s

challenges. On the contrary, it stated that the fee s requested were "excessive, redundant and otherwise unnecessary." Therefore, on remand, the court must clarify its reasons for the supplemental reward it made in response to the fees requested by the Ivys.

C.

Third, the Ivys argue that the court erred in disal lowing the hours worked and granting less than the request ed fee without making the findings required by 28 U.S.C. S 2412(d)(1)(C), a provision of the EAJA. It provid es:

The court, in its discretion, may reduce the amount to be awarded pursuant to this subsection, or d eny an award, to the extent that the prevailing par ty during the course of the proceedings engaged in con duct which unduly and unreasonably protracted the final resolution of the matter in controversy.

28 U.S.C. S 2412(d)(1)(C). The Ivys claim that the rule required the court, in the exercise of its discreti on, to make a finding of "dilatory conduct." Arguably, however, the court made just such a finding when it stated "the supple mental request involves work performed on motions for reconsideration of doubtful validity filed by both parties." Eleven Vehicles V, 36 F. Supp. 2d at 239.

Nevertheless, it is not clear from the district cou rt's opinion that it invoked its discretion under this p rovision. The opinion makes no reference to S 2412(d)(1)(C), and the court did not attempt any further explanation of it s conclusion that the motions for reconsideration wer e"of doubtful validity." The district court, therefore, should provide on remand an adequate explanation.

D.

Finally, the Ivys claim that the court erred in fai ling to look at the particulars of the supplemental request , in isolation from the prior fee award. The court noted that in analyzing the Ivys' supplemental fee request, "rath er than inquiring into the particulars of the second itemiz ed

16statement, as a separate and distinct event, unlink ed to the

factors that informed the Court's rulings in thefir st itemized statement, the Court will consider what ov erall award of fees and expenses for all work counsel has performed in this case, will yield a reasonable fee ." Eleven Vehicles V, 356 F. Supp. 2d at 239. The court consi dered this approach to be consistent with the Supreme Cou rt's direction that the EAJA "favors treating the case a s an inclusive whole rather than as atomized line-items. " Id. (quoting Jean, 496 U.S. at 161-62). The district co urt followed the Supreme Court's direction.

What the district court appears to have had in mind was the need to impose some degree of proportionality b etween the fees for the underlying merits litigation and f ees for fee litigation. At least one other court of appeals has found this to be an important consideration. See Coulter v. Te nnessee, 805 F.2d 146, 151 (6th Cir. 1986) (holding that dis trict court did not err in limiting number of compensable attorney hours spent litigating fees to 3-5% of hou rs spent litigating merits), cert. denied, 482 U.S. 914 (198 7). At least

one district court in this circuit concurs. See Jac kson v. Philadelphia Housing Auth., 858 F. Supp. 464, 477 ( E.D. Pa. 1994). A trial court should be free to view a c ase in this pragmatic manner, subject to the guidelines we have

articulated here. We see no error in the district c ourt's global perspective of the Ivys' claims for attorney fees.

IV.

The Ivys also assert that the court abused its disc retion when it neglected to consider their argument that t he Government's memorandum in opposition to their supplemental request for fees and expenses was unti mely and should not have received any consideration. The Ivys served their supplemental request on the Government by sending it via overnight courier on Tuesday, August 26, 1997 for delivery on Wednesday, August 27, 1997. Lo cal Rule 7.1 required that the Government's opposition to this motion be served on the Ivys within 14 days after s ervice of the Ivys' supplemental request. E.D. Pa. R. 7.1(c). This local rule also provides that "[i]n the absence of a time ly

17response, the motion may be granted as uncontested . . . ."

Id. (emphasis added).

Under Rule 6(a) of the Federal Rules of Civil Proce dure, the 14-day deadline for serving an opposition to th e motion expired either on Wednesday, September 10, 1997, as the Ivys contend, or on Friday, September 12, 1997 if o vernight courier delivery is considered service by mail unde r the Federal Rules, as the Government contends. As the I vys observe, however, it does not matter which of these two

dates was the true deadline. The memorandum in opposition was served on Monday, September 15, 1997 , as the Government now concedes. Regardless of whether overnight courier service qualifies as service by m ail, the Government's opposition was not timely filed. 11 Nevertheless, the district court appears to have co nsidered the arguments made therein.

Local court rules play a significant role in the di strict courts' efforts to manage themselves and their dock ets. Smith v. Oelenschlager, 845 F.2d 1182, 1184 (3d Cir . 1988). Accordingly, we have held that it is not an abuse o f discretion for a district court to impose a harsh r esult, such as dismissing a motion or an appeal, when a litigan t fails to strictly comply with the terms of a local rule. Id. at 1184- 85. However, this court has not written on a distri ct court's discretion to depart from its own local rule, wheth er that rule is phrased in discretionary or mandatory terms

.

In Smith v. Oelenschlager, for example, the distric t court dismissed the plaintiff 's motion for a new trial b ecause the plaintiff failed to strictly comply with a local ru le requiring him to order a trial transcript from the court repo rter. Id. at 1182-83. Instead, the plaintiff had sent a lette r to the district judge and the magistrate to whom the case had been assigned requesting that one of them forward h is request to the court reporter. Id. We affirmed the district court's dismissal of the motion, and found it unnec essary to reach the issue of whether a district court had discretion

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11. We need not decide whether service by overnight courier satisfies the requirements for obtaining three additional "mail" days under Rule 6(e). See Magnuson v. Video Yesteryear, 85 F.3d 1424, 143 0 (9th Cir. 1996) (describing debate among federal courts and collect ing cases).

18to entertain a new trial motion even though the pla intiff

had failed to comply with the terms of the local ru le. See id. at 1184. However, Judge Mansmann, in dissent, strenuously argued that district courts have inhere nt discretion to depart from their own local rules whe re justice so requires, and they have the responsibility to ex ercise that discretion. See id. at 1185-86 (Mansmann, J., dissenting).

Although the language of Local Rule 7.1(c) is phras ed in mandatory terms requiring a party opposing a motion to file a response and opposing brief within fourteen days after service of the motion, the subsequent language of t he rule does not mandate the grant of the motion in the abs ence of a timely motion and brief. The court, under the rul e, "may," but is not mandated, to grant the motion as unconte sted. Other courts of appeal that have addressed the auth ority of a district court to depart from its local rule have uniformly determined that district courts possess inherent di scretion to depart. See Somlyo v. J. Lu-Rob Enter., Inc., 93 2 F.2d 1043, 1048 (2d Cir. 1991); United States v. Diaz-Vi llafane, 874 F.2d 43, 45-46 (1st Cir.) (noting and applying "widelyaccepted idea that a district court should be accor ded considerable latitude in applying local procedural rules of its own making, and in departing from them."), cert . denied, 493 U.S. 862 (1989); Braxton v. Bi-State Dev. Agenc y, 728 F.2d 1105, 1107 (8th Cr. 1984) ("It is for the dist rict court to determine what departures from its rules may be overlooked.").12 Some of these courts have permitte d district courts to depart from local rules even when the loc al rule is phrased in mandatory language. In Somlyo, Chief Judge Oakes of the Second Circuit, in the face of a manda tory local rule, held: "The district court's inherent di scretion to

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12. Other cases supporting the power of a court to depart from its own rule are: Allen v. United States Fidelity & Guar. C o., 342 F.2d 951, 954 (9th Cir. 1965) ("It is for the court in which a ca se is pending to determine, except as it is bound by precedents set by higher authority in its own judicial hierarchy, what departures from st atutory prescription or rules of court are so slight and unimportant tha t the sensible treatment is to overlook them."); Slanina v. Willia m Penn Parking Corp., Inc., 106 F.R.D. 419, 422 (W.D. Pa. 1984) ("noncomp liance with the local rules may be excused by the court in its discretion ").

19depart from the letter of the Local Rules extends t o every

Local Rule regardless of whether a particular Local Rule specifically grants the judge the power to deviate from the Rule." 932 F.2d at 1048. See also Braxton, 728 F.2d at

1107.

Several of these courts have made clear, however, t hat this discretion is not unfettered. For example, the Second Circuit in Somlyo stated that the district court "s hould ask whether the application of the letter of Local Rule s to a particular case would cause an unjust result." 932 F.2d at

1049. The First Circuit in Diaz-Villafane stated th at to depart from its rules, a court "(1) must have a sou nd reason for doing so, and (2) must ensure that no pa rty's substantial rights are unfairly jeopardized." 874 F .2d at 46.

We believe these courts are generally correct in th eir approach permitting a district court to waive a req uirement of its local rules in appropriate circumstances. We therefore hold that a district court can depart from the stri ctures of its own local procedural rules where (1) it has a s ound rationale for doing so, and (2) so doing does not u nfairly prejudice a party who has relied on the local rule to his

detriment.

In the instant case, the court failed to address th e Ivys' argument that the Government's response was untimel y filed. Thus, we are unable to determine whether the court abused its discretion. Therefore, on remand the dis trict court should explain its apparent decision to waive the 14- day service requirement of Local Rule 7.1(c).

V.

Accordingly, the order of the district court will b e vacated, and the case remanded for findings and explanatory statements consistent with this opinion . Each side to bear its own costs on this appeal.

20ALITO, Circuit Judge, concurring:

I concur in the Court's judgment, but I write separ ately to explain my understanding of certain threshold jurisdictional questions and of the District Court' s task on

remand.

I.

I cannot agree with the majority's implicit conclus ion that the issue of whether a Rule 59(e) motion is timelyf iled must be noticed sua sponte by this Court. The Distr ict Court rejected the government's Rule 59 argument an d the government did not appeal this issue. Therefore, un less the question of timely filing implicated the District C ourt's subject matter jurisdiction, it is not properly bef ore this Court. I believe that Rule 59 is merely a procedura l bar, akin to a statute of limitations, that curtails a D istrict Court's authority to permit an untimely motion to a mend but does not deprive it of subject matter jurisdict ion. Accordingly, I think that we need not reach the mer its of this question.

Rule 59(e) provides that "[a]ny motion to alter or amend a judgment shall be filed no later than 10 days aft er entry of the judgment." Fed. R. Civ. P. 59(e). Rule 6 fur ther provides that a district court "may not extend the time for taking any action" under Rule 59(e). Fed. R. Civ. P . 6(d). In this sense, the time limit imposed by the rule is"m andatory and jurisdictional." De la Fuente v. Central Elec. Coop., Inc., 703 F.2d 63, 64 n.1 (3d Cir. 1983) (quoting White v . New Hampshire Dep't of Employment Sec., 629 F.2d 697, 6 99- 700 (1st Cir. 1980)).

Simply because the District Court has no power to e xtend the Rule 59 filing period, however, does not mean t hat the rule implicates subject matter jurisdiction. 1 By i ts terms,

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1. Although this Court has occasionally referred to Rule 59 as "jurisdictional," none of these cases discussed whe ther the rule implicates subject matter jurisdiction. See, e.g., Schake v. Colt Indus. Operating Corp. Severance Plan for Salaried Employe es, 960 F.2d 1187, 1192 (3d Cir. 1992); Kraus v. Consolidated Rail Cor p., 899 F.2d 1360, 1362 (3d Cir. 1990). I believe that these opinions used the language of "jurisdiction" only to emphasize the mandatory natu re of the 10-day time limit, not to imply some connection with Article II I subject matter jurisdiction.

21Rule 59 does not govern subject matter, but rather sets a

mandatory procedural limitation on the District Cou rt's

discretion to entertain a motion to amend. Cf. Cura cao Drydock v. M/V Akritas, 710 F.2d 204, 206 (5th Cir. 1983) (construing Fed. R. Civ. P. 4(a), governing timely notice of appeals, as procedural but not implicating subject matter jurisdiction). Viewing Rule 59 as a merely procedur al bar accords with Rule 82's mandate that "[t]hese rules shall not be construed to extend or limit the jurisdiction of the

United States District Courts." Fed. R. Civ. P. 82. See also 14 Moore's Federal Practice S 82.02 (1999) ("For th e purpose of [Rule 82], jurisdiction means subject matter jur isdiction") (emphasis in original); Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 370 (1978) ("It is axiomatic that the

Federal Rules of Civil Procedure do not create or w ithdraw federal jurisdiction."). Judge Flaum, writing for s ix judges in an evenly-split Seventh Circuit decision, elucid ated this point:

Subject matter jurisdiction is not . . . nec essarily the appropriate approach to the 10-day timeline of [Rule 59]. Subject matter jurisdiction is controll ed by a statute explicitly labeled as such. Neither Rule 59 not Rule 6 are styled jurisdictional. Moreover, subject matter jurisdiction is informed by concerns for federalism. No such concern is present here. . . . Had Congress intended the 10-day time period to be interpreted like subject matter jurisdiction , it would have said so; yet it was silent.

Varhol v. National R.R. Passenger Corp., 909 F.2d 1 557, 1569 (7th Cir. 1990) (en banc) (Flaum, J., concurri ng).

Finally, I would note that both the Supreme Court a nd this Court have recognized an equitable exception t o Rule 59. This "unique circumstances" exception, first an nounced in Thompson v. INS, 375 U.S. 384 (1964) (per curiam ), permits a litigant who relies on an extension impro perly issued by the District Court to perfect his appella te rights by filing a Rule 59 motion within the period extend ed by the court's order. See Kraus, 899 F.2d at 1362. Alt hough this narrow exception does not apply to the present case, the mere fact that there is an equitable exception shows that Rule 59's strictures do not implicate Article III subject

22matter jurisdiction: "[e]quitable tolling or estopp el simply is

not available when there are jurisdictional limitat ions." Shendock v. Director, Office of Workers' Compensati on Programs, 893 F.2d 1458, 1466 (3d Cir. 1990) (en ba nc).

If, as I conclude, Rule 59 does not implicate subje ct matter jurisdiction, then this Court is not require d to notice the issue of untimely filing on its own initiative. While I have no substantive disagreement with the Court's conclusion that Rule 59(e) does not apply to supple mental fee requests, I believe that we need not reach this issue because the government failed to preserve it for ap peal.

II.

I agree with the Court that the District Court had jurisdiction under the Equal Access to Justice Act (EAJA) to consider the Ivys' supplemental request for attorne y fees and expenses. I would, however, employ a somewhat different analysis in reaching this conclusion.

The EAJA requires that a party seeking a fee award submit its application to the court "within thirty days of final judgment in the action." 28 U.S.C. S 2412(d)( 1)(B). The majority holds that "the underlying `action' here i s the Government's forfeiture proceeding . . . . The `fin al judgment' contemplated by the statute . . . is the[ March 26, 1996] judgment dismissing that forfeiture proce eding." Maj. Op. at 9. The majority then dismisses the Dist rict Court's August 30, 1996 ruling awarding, inter alia , a certificate of reasonable cause to the government a s "ancillary" and "involv[ing] only post-judgment res idual proceedings." Maj. Op. at 9.

I disagree. In my view, the order granting a certif icate of reasonable cause was an " `integral part' of the fi nal judgment on the merits even though not entered concurrently with that judgment." United States v. One 1986 Ford Pickup, 56 F.3d 1181, 1185 (9th Cir. 1995 ) (per curiam). The Supreme Court has emphasized that the finality requirement should be given "a practical r ather

than a technical construction." Firestone Tire & Ru bber Co. v. Risjord, 449 U.S. 368, 375 (1981) (citation omit ted). Under this functional standard, "a `final decision' generally

23is one which ends the litigation on the merits and leaves

nothing for the court to do but execute the judgmen t." Catlin v. United States, 324 U.S. 229, 233 (1945). As the Ford Pickup court noted, the decision whether to gr ant a certificate of reasonable cause is functionally par t of the merits judgment: a certificate may be granted only by the judge presiding over the forfeiture action; it is b inding on the parties and bars any future action for damages; and it must be issued soon after the entry of judgment, be fore costs are taxed. See 56 F.3d at 1185. Most importan tly, the decision of whether or not to grant the certificate involves questions of fact and law that are intimately tied to the merits of the underlying forfeiture action.2 On thi s basis, I believe that the relevant "judgment" in this case - - the one "which end[ed] the litigation on the merits," Catli n, 324 U.S. at 233 -- was the August 30, 1996 order granting th e certificate of reasonable cause.

Under the EAJA, a "final judgment" is "a judgment t hat is final and not appealable." 28 U.S.C. S 2412(d)(2 )(G). The 30-day period for filing an EAJA attorneys fee clai m does not begin to run "until the time for filing a notic e of appeal [has] expired." Baker v. Sullivan, 956 F.2d 234, 23 5 (11th Cir. 1992) (per curiam). Because the parties filed Rule 59(e)

motions for reconsideration of the District Court's August 30 judgment, the time for appeal did not begin to r un until "the entry of the order disposing of the last such motion outstanding." Fed. R. App. P. 4(a)(4)(C).

Thus, the appellate door in this case did not close until 60 days after the May 30, 1997, adverse ruling on t he motions for reconsideration. See Fed. R. App. P. 4( a)(1) (setting 60-day limit for appeal in cases where Uni ted States is a party). The Ivys' motion for supplement al fees was filed within 30 days of the end of the appeals period,

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2. The litigation over the certificate of reasonabl e cause cannot be dismissed as mere "cost litigation." Although the g rant of the certificate did preclude Ivy from recovering costs for the forf eiture claim, it also addressed substantive issues of liability that woul d be highly relevant if Ivy chose to file a S 1983 claim against the seizin g officers or
prosecutors in the case. See 28 U.S.C. S 2465 (if certificate i s issued, neither the person who made the seizure nor the prosecutor shal l"be liable to suit or judgment on account of such suit or prosecution" ).

24placing it well within the EAJA's statutory window of

opportunity. Because I believe that the supplementa l motion was filed within the statute's 30-day time l imit, I see

no need to consider whether the District Court coul d, in its discretion, entertain a later-filed supplemental fe e request.

III.

Finally, I am in general agreement with part III of the opinion of the Court.3 I write separately, however, to express my view that the "proportionality review" a lluded to in part IIID is necessarily limited in scope. Once an adverse party has made a sufficiently specific challenge to a particular expense area, a District Court should ce rtainly look back to previous awards in the same area in determining the reasonableness of the requested supplemental fee. In this sense, every supplemental fee request entails a "global" review of the entire fee award.

I do not, however, read the opinion of the Court to authorize a District Court to conduct a plenary rev iew of an entire EAJA fee award for "proportionality" based o n a general allegation of unreasonableness by the objec ting party. Such a reading would vitiate the well-establ ished principle that a District Court cannot sua sponte o rder a reduction of what it perceives to be an excessive f ee. See, e.g., McDonald v. McCarthy, 966 F.2d 112, 118-19 (3 d Cir. 1992); Rode v. Dellarciprete, 892 F.2d 1177, 1182 ( 3d Cir. 1990); Bell v. United Princeton Properties, Inc., 8 84 F.2d 713, 720 (3d Cir. 1989). Permitting such free-rangi ng discretion would unwisely abandon "the carefully cr afted

set of rules for the exercise of district court dis cretion in fee

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3. For the reasons stated above, I do not agree wit h the majority's conclusion in part III(A) that the motion to recons ider the grant of a certificate of reasonable cause merely "litigated t he issue of the Ivy's entitlement to costs for the underlying forfeiture claim." Maj. Op. at 13. I agree, however, with the majority's general point that the District

Court may decline to award fees for unsuccessful litigati on on particular issues, see, e.g., Hensley v. Eckerhart, 461 U.S. 4 24 (1983), especially when, as the District Court found here, the party w as merely "rehashing" previous arguments "of doubtful validity." United S tates v. Eleven Vehicles, 36 F. Supp. 2d 237, 239 (E.D. Pa. 1999).

25shifting cases" for "some standardless rule of dist rict court

gestalt." Cunningham v. City of McKeesport, 753 F.2 d 262, 267 (3d Cir. 1985).

On remand, the District Court should be free to con sider (and explain in its opinion) whether properly-chall enged fee categories were "excessive" in light of both the in itial and the supplemental fee requests. However, the governm ent's bare allegation "in general terms that the time spe nt was excessive" is not, in my view, enough to empower th e District Court to conduct a generalized proportiona lity review of the entire fee award. See Bell, 884 F.2d at 720.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

26