### IN THE UNI TED STAT ES COURT OFAPPEALS FOR THE FIF TH CIRCU IT

No. 10-40036

SYLVESTER MCCLAIN, on his own behalf and on behalf of a class of similarly situated persons; BUFORD THOMAS, on his own behalf and on behalf of a class of similarly situated persons; PATRICK ROSS, on his own behalf and on behalf of a class of similarly situated persons; MARY THOMAS, on her own behalf and
on behalf of a class of similarly situated persons; EDDIE K MASK, on his own behalf and on behalf of a class of similarly situated persons; LEROY GARNER,
on his own behalf and on behalf of a class of similarly situated persons; SHERRY CALLOWAY SWINT, on her own behalf and on behal f o f a class of similarly situated persons; WALTER BUTLER, on his own behalf and on behalf of a class of similarly situated persons also known as "A"; FLORINE THOMPSON, on her
own behalf and on behalf of a cl a ss of similarly situated persons; CLARENCE OWENS, on his own behalf and on behalf of a class of similarly situated persons also known as "C"; CLIFFORD R DUIRDEN, on his own behalf and on behalf of
a class of similarly situated persons; EARL P O T T S , o n his own behalf and on behalf of a class of similary situated persons; ROALD MARK, on his own behalf and on behalf of a class of similary situated persons; PLAINTIFF CLASS; ALL PLAINTIFFS, Plaintiffs - Appellants Cross-Appellees

v. LUFKIN INDUSTRIES INC., Defendant - Appellee Cross-Appellant

Appeals from the United States District Court for the Eastern District of Texas

Before JONES, Chief Judge, and DENNIS and CLEMENT, Circuit Judges. EDITH H. JONES, Chief Judge: U n i te d S ta te s C o u rt o f A p p ea l s F i ft h C i rc u i t 

### F I L E D August 8, 2 011 Lyle W . Cayce Clerk Case: 10-40036 Document: 00511564343 Page: 1 Date Filed: 08/08/2011No. 10-40036

After multiple appeals to this court and extens iv e t r i al and other 1 proceedings, plaintiffs’ Title VI I c lass action for employment discrimination against Lufkin Industries, Inc. culminated in a favorable multimillion d o l l ar judgment and injunctive relief. Before this court – in the final possible dispute

– are challenges by both parties to the district court’s attorneys’ fee award and Lufkin’s complaint that back pay damages were erroneou s ly authorized in an earlier appeal. We affirm as to the back pay damages but vacate and remand as to the attorney’s fees. In particular, given the unrebutted evidence in the record t h a t it was necessary for plaintiffs to retain counsel from outside the Eastern District of Texas, the district court ab u s e d i ts discretion in failing to use the rates counsel charged in their home district as the starting point in the lodestar calculation. I. BACKGROUND In early 1995, Sylvester McClain, a black employee i n L ufkin’s trailer division, filed a complaint with the Equal Employment Opportunity C o m mi s s io n (EEOC) over his manager’s alleged eff o rt s t o demote him. Another Lufkin employee, Buford Thomas, filed an EEOC claim in February 1997, complaining that he was denied p r omotional and training opportunities on account of his

race. The E E O C i s s u e d right-to-sue letters on both claims. In 1997, McClain and Thomas filed a class action under Title VII challenging many of Lufkin’s employment p r actic e s un der disparate treatment and disparate impact theories. The district court certified a class and narrowed the claims in ways not relevant

See Mc Cla in v. Lufki n Industri es, Inc. , 108 Fed. App ’x. 176 (5t h Cir. 2004) 1 (“Mc Cla in I

”) ; Mc Cla in v. Lufki n Industri es, Inc. , 519 F.3d 264, (5t h Cir. 2008) (“Mc Cla in II ”) ; Mc Cla in v. Luf

kin Industri es, Inc. , 342 F. App ’x. 974 (5t h Cir

. 2009) ( “Mc Cla in III ”)

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to the issues before this court. See McClain v. Lufkin Indus., Inc. , 187 F.R.D. 267 (E.D. Tex. 1999). From the start, Pla i n tiffs were represented by Timothy Garrigan, an attorney based in the Eastern District of Texas with extensive e x p e r i e nce in employment law and civil rights. The court complimented his firm i n the certification order: Counsel for the Plaintiffs are known to this court as tri al lawyers experienced in em p loyment law, civil rights actions, and complex litigation. Counsel have documented their qualifications through documents submitted to the court recounting the breadth of their experience in these areas of the law. Finally, cl ass counsel have pursued this suit and related issues with an unmistakable zeal.
Id

. at 281-82. Garrigan headed a three-la w y e r firm in Nacogdoches, Texas. After obtaining class certification in 20 0 0, Garrigan found that Lufkin was unwilling to settle, and that his clients might face protracted litigation. Thus, Garrigan felt it was imperative to associate with co-counsel in o r d er to successfully try this case. The case’s ult i m a t e t r ajectory, which spanned a d e c a d e and involved thousands of attorney hours, confirmed his initial impression. Garrigan consulted with many experienced employment lawyers in Texas and found that “none o f t h e m w a s willing or able to commit the time and

re s o u r c es necessary to associate as co-counsel and prosecute this class action

. . . .” T he record includes numerous affidavits from experienced Texas litigators and even the f o u n d e r a nd past president of the Texas Employment Lawyers Associa t ion declaring, under oath, that no Texas attorneys were available to join Garrigan’s team on this particular case. It is clearly established

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that Garrigan diligently searched for, but could not find, any lawyers in Texas who were willing and able to join him in litigating this class action. 2 Significantly, Luf

k in submitted nothing to refute or challenge this evidence. Lufkin submitted the declarations of five Texas lawyers regarding their hourly rates, but none of those declarants claimed that they, or anyone else

F o r i n s tanc e, J. De rek Brazie l, an expe rien ced Texas liti gator in labor and 2
em plo ymen t law , explained : “I do not w orkon emp loym ent di sc rim inati on clas s act ion cas es for largel y fina ncial reas ons , even thou gh I am com pet ent and have the res ourc es to do so
. . . . Emp loym ent dis cri mi natio n cla ss action s u su ally tak e muc h longer to liti gate than the average em plo ymen t dis cri mi natio n or wa ge and hour cas e
. De fen dant com pani es oft en use thei r sub st antial fina ncial advant age to outs taf f and outw ork plai ntif fs wi th lim ite d per so nal
res ourc es
. . . . Emp loym ent dis cri mi nati on clas s act ions usua lly involve exten sive expe rt tes tim ony and the com mi tm ent of fina ncial res ourc es that far excee ds othe r em plo ymen t law
c a s e s
. . . . [ T h e r e is] a signific ant ris k that a fee wi ll never be coll ect ed. Even in the bes t of cir cum st ance s, paym ent for clas s couns el’s tim e and reim burs em ent of expe nse s is del ayed for
se veral years
. For thes e r eas ons neit her I, nor my fir m, rep res ent plai ntif fs in em plo ymen t dis cri mi natio n c las s act ions .” Claude Welc h, an att orne y in Lufk in, Texas wi th expe rien ce in com ple x civil liti gation , dec lare d: “Ther e is a need for law yers in the East ern Di st ric t of Texas wh o are cap able of and wi lling to rep res ent clie nts in com ple x em plo ymen t dis cri mi natio n clas s action and o t her
com ple x civil right s cas es
. I do not genera lly unde rta ke suc h cas es beca use of thei r dif fic ulty, thei r com ple xity, a n d b e c a use the uncer taint y of suc ces s has genera lly outw eighed the pr os pec t of obta ining a c onti ngent st atut ory fee .” Ste ven B. Thorp e, an expe rien ced liti gator in Da llas , dec lare d: “M y pr act ice foc use s in large par t on em plo ymen t civil right s cas es in wh ich I rep res ent plaintiff s.
. . . [T] he great es t por tio n of my pr act ice prior to app roxim atel y 1985 w as in the rep res enta tio n of plai ntif fs in clas s act ion dis cri mi natio n sui ts

. At that tim e I and the fir m wi th wh ich I wa s ass oc i a ted largel y aband oned that area of pr act ice beca use we fou nd it to be fina ncial ly infe asible. At this tim e and for mo re than a dec ade I have done no clas s act ion em plo ymen t liti gation

. . . . I do not kn owof

any other expe rien cedplaint iffs’clas s act ion em plo ymen t law yers inTexas w ho
we re availabl e, able and willing to com mi t the tim e and expe nse s nece ss ary to the pr os ecut ion of this c ase .” Mar garet A. Ha rri s, the fou nder and pas t pr es ide nt of the Texas Emp loym ent Law yers Ass ocia tio n, dec l a r ed: “While ther e are cer tainl y law yers in this Sta te wi th the requ isi te kn ow led ge to do the work that the law yers fr om Go lds tei n De mc hak pr ovide d, they do not to the bes t of my kn ow led ge have the res ourc es to have pr ovide d thos e se rvice s. Sim ilarly, wh ile ther e are law fir ms in this Sta te wh o have the fina ncial res ourc es to have st epp ed in as Clas s Co-Co unse l, they do not to the bes t of my kno wl edge have the requ isi te know led ge of the law to have done the wo rk that the law yers and othe r st aff me mbe rs fr om Go lds tei n De mc hak pr ovide d. ”
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they knew, would have been willing and able to get involved in this case in 2000. It is therefore uncontested that Garrigan was not able to obtain support from Texas co-counsel. Unable to find suitable co-counsel in Texas, Garrigan turned to the firm

now known as Goldstei n , D e m chak, Baller, Borgen & Dardarian (“Goldstein Demchak”), based in Oakland, California. G o ldstein Demchak, which has a nationwide reputation as a plaintiffs’ employment class action firm, agreed to associate with Garrigan and take part in this case. U l t i m a tely, the case went to a bench trial, and in January 2005, th e district court found that Lufkin had discriminated against black employees in certain initial work assignments and in promotion decisions. The court ordered back pay, attorneys’ fees, and injunctive relief. This court affirmed the disparate impact promotion claims after concluding that Thomas had properly exhausted his administrative remedies when he filed his 1997 EEOC complaint, McClain II , 519 F.3d at 264, but we reversed th e j u d g m e n t as to the initial assignment claims because plaintiffs had not exhausted their administrative remedies. This court directe d t h e district court to award back pay damages for the lost promotions dating back to 1994. Id

. at 281. We also vacated and remanded the trial court’s injunctive order, which was too vague, and its attorneys’ fee award, which was insufficiently explained. Id. at 283-84. On remand, the new district judge, who stepped in to replace the deceased trial judge, scrupulously followed the mandate of McClain II. Pertinent to this 3 appeal, he awarded $3.3 million in back pay to the class for discriminatorily lost promotions dating back to 1994. He issued a twenty-four page ruling addressing plaintiff counsel’s application to receive over $7.7 million in attorneys fees. (The

The cour t’s d etai ledinjunction agains t Lufk in wa s not app ealed

. 3
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award exce e di n g $ 1 million for counsel’s costs and expenses has not been appealed.) After sifting through voluminous billing records, the court ruled for plaintiffs’ counsel on nearly all issues, and, in particular , declined to reduce their fees beyond a self-adjustment offered by couns el f or h avin g p ur s u e d un s uc cessful Title VII claims. The court ordered a generous $400 h o u rly rate for Garrigan, the lead attorney. It refused, however, t o order payment to partners at Goldstein Demchak at a $650 hourly rate, the prevaili n g r a t e in the San Francisco Bay Area. The court’s discussion is concise: 2. Partners at the Goldstein Demchak Law Firm
Plaintiffs contend that the court should disregard the local rates for t h e Goldstein Demchak Law Firm (“Demchak Firm”) and apply a rate comme n s urate with attorneys from the northern California
area where the Demc h a k F irm is located because of its unique experience dealing wit h employment discrimination class action
cases. When the Demchak Firm entered the case in 2000, Mr. Gar r igan had already certified the ca s e an d Lufkin’s appeal had been rejected. While it was still necessary to mediate the case, complete discovery, and try the case, Mr. Garrigan participated to a greater extent than any other at t orney. He certified the class, was lead counsel t h roughout the entirety of the case, and examined 11 out of 22
witn e sses at trial. The Demchak Firm possessed experience settlin g class action employment cases, but there is no evidence to suggest that they were experienced at trying such cases.
Plaintiffs have firmly es t ab l i s h ed that in calculating the fee for Mr. Garrigan the appropriate community for rate co m p a r i son purposes are [sic] those who participate in complex litigation in the Eastern District of Texas. It would be difficult to justify assigning
a higher hourly rate t o s e cond-chair attorneys, no matter how skilled in employment law. No unusual circumstances exist to suggest that those in the Eastern District who have experience with complex litigation were unavailable and c ould not have effectively participated. The court is aware of many attorneys in the Eastern
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District experienced in employment law and complex litig a t i o n. T w o who would not be likely to have a conflict with L u f k i n Industries are Clyde Siebman and John Werner. Absent sufficient evidence that experienced, qualified local counsel were unwilling to participat e , the court will not assume counsel from distant states were nece s s a ry . Counsel at the Demchak Firm are located in Oakland, California, but it was the i r c h oice to participate on this
case. Mr. Garrigan brought the suit, certified the class and carried the yeoman’s burden at depositions and tri a l

. Based on the affidavits, Mr. Garrigan was the attorney with extensive experience
as first chair in actual trials. The Demcha k F i r m’s attorneys u n d o ub tedly provided valuable support but they cannot expect to receive rates fifty percent higher than Mr. Garrigan’s, especially when the court has approved the time they spent in traveling from California.
Hourly r ates should be computed according to the prevailing market
r ates in the relevant legal market. [citation omitted] Th i s c o u r t will app l y l o c a l rates for the Demchak firm. [citation omitted]

. . . However, the rates should n o t be less than $250/hr, as Defendant contends. . . . The court awarded $ 4 0 0 p e r hour to partners at Goldstein Demchak, with comparably reduced awards for their associates and paralegals. The final total fee award was approximately $4.7 million. On appeal, the parties aggressively dispute: (1) the award of local district rates to the Goldstein Demchak firm; (2) the court’s refusal to disallow more of

counse l ’ s h o u rs allegedly incurred for unsuccessful claims; and (3) the calc u l a t i o n o f the back pay award. Jurisdiction here is founded on 28 U.S.C. § 1291. II. ATTORNEYS’ FEE AWARD The district court’s factual findings as to the hours reasonably expended and the reasonable rates for attorneys’ fees are reviewed by this court for clear

error. La. Power & Light Co. v. Kellstrom , 50 F. 3 d 3 19, 324 (5th Cir. 1995).

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When the court applies to thi s “l o d e star” the twelve Johnson adjustment factors, its decisio n

— ab s e n t an error of law — is reviewed for abuse of

4 discretion. Id. at 329. A. Community versus out-of-district hourly rates Asserting that California counsel were entitled to be reimbursed at California rates rather than the rate awarded to counsel in the forum, plaintiffs first contend that th e district court erred because no other local counsel were willing to assist Garrigan in this complex class action. They also contend that

a recent S u p r e m e Court decision supports an award to plaintiffs’ counsel that matches the rates allegedly paid by Lufkin to its Houston attorneys. See Perdue

v. Ken n y A

. ex rel. Winn , 130 S. Ct. 1662 (2010). Lufkin, for its part, seeks an

even larger reduction in the fee award for work performed by plaintiffs’ counsel

o n unsuccessful claims in the litigation. We are constrained to vacate the fee award and remand for re-calculation. The precedents and purposes governing fee-shifting awards in civil rights

cases are well established. The awards facilitate plaintiffs’ access to the courts to vindicate their rights by p r o vi ding compensation sufficient to attract competent counsel. Fee awards must, however, be reasonable. Hens le y v. Eckerhart , 461 U.S. 424, 433, 103 S. Ct. 1933, 1939 (1983). The linchpin of the reasonable fee is the lodestar calculation, a product of the ho u r s r easonably expended by the law firms and the reasonable hourly rate for their services. Id. Charges for excessive, duplicative, or inadequately doc u m ented work must be excluded. Watkins v. Fordice , 7 F.3d 453, 457 (5th Cir. 1993). Seminal to this case is the principle that “reasonable” hourly rates “are to be calculate d a c c o r ding to the prevailing market rates in the relevant

See Johns on v. G eor

giaHighw ay Express , Inc. , 488 F.2d714( 5th Cir. 197 4). 4
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community.” Blum v. Stenson , 465 U.S. 886, 895, 104 S. Ct. 1541, 1547 (1984). Further, Blum noted, “the burden is on the applicant to pr o d u c e satisfactory evidence

. . . th a t th e r e quested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparab l e skill, experience and reputation.” Id. at 896 n.11. In an unbroken and consistent line of precedent, this court has interpreted rates “prevailing in the community” to

mean what it says. Thus, as early as 1974, this court required district courts to consider the customary fee for similar w o r k “i n the community.” Johnson , 488 F.2d at 7 1 8 ; s ee also Van Ooteghem v. Gray , 774 F.2d 1332, 1338 (5th Cir. 1985) (Title VII guarantees “fair compensation” and not whatever “lions at the bar” may command); Alberti v. Klevenhagen , 896 F.2d 927, 931 (5th Cir. 1990) vacated in part on reh’g , 903 F.2d 352 (1990); Islamic Ctr of Miss., Inc. v. City of Starkville, Miss. , 876 F.2d 465, 469 (5th Cir. 1989); Watkins , 7 F.3d at 458-59; Green v. Adm’rs of Tulane Educ. Fund , 284 F.3d 642, 662 (5th Cir. 2002); Tollett

v. City of Kemah , 285 F.3d 357, 368 (5th Cir. 2002); Scham v. District Courts Trying Criminal Cases , 148 F.3d 554, 558 (5th Cir. 1998). Most telling, perhaps, is this court’s decision in a landmark affirmative action case reducing the fee of plaintiffs’ counsel, a former U.S. Assistant Attorne y G e n e ral and subsequent U.S. Solicitor General, from th e r a t e s h e charged in Washington, D.C., to the prevailing rate in the forum, Austin, Texas. Hopwood v. State of Texas , 236 F.3d 256, 281 (5th Cir. 2000) (discussing Ted Olson’s billing rates). A number of our sister circuits, however, have taken the position that outof-district counsel may be enti t l e d t o t he rates they charge in their home districts under certain limited circumstances. The Sixth Circuit has observed that “[w]hen fees are sought for an out-of-town specialist, courts must determine (1) whether hiring th e o ut -of-town specialist was reasonable in the first instance,

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and (2) whether the rates sought by the out-of-town specialist are reasonable for an attorney of his or her degree of skill, experience, and reputation.” Hadix v. Johnson , 65 F.3d 532, 535 (6th Cir. 1995) (citing Chrapli wy v. Uniroyal, Inc. , 670 F.2d 760, 768-69 (7th Cir. 1982)). Other circuits have used a similar approach. See Zolfo, Cooper & Co
. v
. Sunbeam-Oster Co. , 50 F.3d 253, 259-60 (3d Cir. 1995); Casey v. City of Cabool, Mo. , 12 F.3d 799, 805 (8th C i r
. 1 9 9 3); Nat’l Wild l if

e Fed’n v. Hanson , 859 F.2d 313, 317 (4th Cir. 1988); Maceira v. Pagan , 698 F.2d 38, 40 (1st Cir. 1983); Donnell v. United States , 682 F.2d 240, 252 (D.C. Cir. 1982). B u t t he two-prong Hadix test is applied cautiously: even courts t h a t concluded out-of-district counsel were necessary often affirmed reduced fees for those attorneys. See Casey , 12 F.3d at 806 (approving a rate reduction for out-ofdistrict counsel from $195 per hour to $150 per hour); Zolfo , 50 F.3d at 259-61 (noting that under 11 U.S.C. § 330, the starting point for a fee calculation should b e th e attorn ey s ’ home district, but nevertheless affirming the district court’s u s e of in-dist r i ct rates as the starting point because it “achieved substantially the

same result”). Indeed, these circuits have stressed that appellate courts should be particularly reluctant to find an abuse of discretion. See, e.g. , Nat’l Wildlife , 859 F.2d at 317 (“The computation of attorneys fees is primarily the task of the district court, and we are not entitled to disturb a dis t r i c t c o urt's exercise of discretion even though w e might have exercised that discretion quite differently.” ) ; Z

o l f o , 50 F.3d at 261 (“The bankruptcy court cut Zolfo Cooper’s total compensation request ap p r oximately twelve percent. When faced with a reduction of ten percent in a similar case, we stated that ‘[n]o court, viewing a record of this magnitude from the distance inherent in appellate review, could

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assess the reasonability of a reduction as slight as ten p e r c e n t w ith flawless precision.’” (citation omitted)). To fulfill th e p u r p o se of Section 1988 fee awards, while accommodating Blum ’s and this court’s focus on local forum rates for attorney fees, we hold that where, as here, abundant and uncontradicted evidence proved the necessity of Garrigan’s turning to out-of-district c oun s el , th e c o - c o un s el’ s “ho m e” r at e s should be considered as a starting point for calculating the lodestar amount. Because local rates may well reflect a lower cost of living in the forum, which will also be indicative of lower potential damage awards, the district court retains discretion to adjust the lodestar and achieve an overall reasonable fee award. 5 Here, the district court carefully reviewed the hours billed by all counsel and assessed counsel’s rates. In d o i n g s o , i t adjusted the local prevailing rate upward to award the principal trial counsel, Mr. Garrigan, a local attorney, $400
per hour. The court, however, adjusted the claimed hourly rates of the Goldstein Demchak attorneys downward from those prevailing in thei r h o m etown California m a r k e t ($650 per hour for partners and proportionately lower for associates and paralegals) to those prevailing in the Eastern District of Texas. The court reasoned that: (1) it had not been shown that attorneys from outside the Eastern District of Texas were necessary t o t h e representation of the plaintiff class; (2) the Fifth Circuit requ i r e s c o mpensation at locally prevalent rates rather than the rates charged in one of the highest priced legal markets in the United States; (3) the Goldstein Demchak attorneys performed second-chair trial duties, which did not entitle them to be paid at r a t e s fifty percent higher than those of Garrigan.

Ou r dec isi on in Ho

pw ood , sup ra , is not inco nsi st ent wi th th i s h o l d ing. Ho pw ood 5 aff irm ed the dis tri ct cour t’s find ing that higher -p ric ed out- of- dis tri ct couns el we re not es se ntialt o p ros ecut ing t he app eal forw hich com pens atio n w as so ught.
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Unfortunately, the district court clearly erred in finding that local counsel

were readily available to assist Garrigan, and it legally erred in suggesting that local community rates are always required when out-of-district co u nsel are employed. These errors require us t o reverse and remand the award to the Goldstein Demchak lawyers for further consideration. Some further elaboration is useful. First, as was discussed above, the record is replete with affidavits from a variety of expert employment lawyers who swore that no Texas attorneys were willing and able to assist in such a large case that might drag on for years without any guarantee of financial remuneration. Lufkin provided no rebuttal

e vi d e n c e
. The district court explained only that it was “aware” of many attorneys in the Eastern District experienced in employment law and complex litigation, and it named two attorneys, neither of whom is otherwise mentioned in the evidence. Yet, “[t]he hourly fee awarded must be supported by the record; the district court may not simply rely on its own experience in the relevant legal market to set a reasonable ho u r ly billing rate.” League of United Latin Am. Citizens v. Roscoe I.S.D. , 119 F.3d 1228, 1234 (5th Cir. 1997). The district court clearly erred in finding contrary to the record that local attorneys were available to assist in the representation. Second, we here clarify our adherence to the common view of circuit courts that in the unusual cases where out-of-district counsel are proven to be
necessary to secure adequate representation for a civil rights plaintiff, the rates charged by that firm are the s t a r t i n g p o int for the lodestar calculation. See generally Hadix, 65 F.3d at 535; Zolfo, Cooper & Co. , 50 F.3d at 259-61; Casey , 12 F.3d at 805-06; Nat’l Wildlife Fed’n , 859 F.2d at 317; Maceira , 698 at 40. This court’s focus on local community rates, like that of the Supreme Court in Blum , sets a floor for compensat i on, to emphasize that civil rights litigation under a 12 Case: 10-40036 Document: 00511564343 Page: 12 Date Filed: 08/08/2011No. 10-40036

fee-shifting statute is not a pro bono enterprise. On the other hand, the statutes’
purposes are not fulfilled if counsel reap a windfall at the expense of a defendant by overcharging for their services. See Riverside v. Rivera , 477 U.S. 561, 580 (1986) (“Congr e ss intended that statutory fee awards be adequate to attract competent counsel, but not produce windfalls to attorneys.” (internal quotations and citations omitted)). Nor, as we have put it, are counsel necessarily entitled to what “lions at the bar” command. See Van Ooteghem , 744 F.2d at 1338. The t r i a l c o urt legally erred by using the Eastern District of Texas rates for Goldstein Demchak as its starting point in this unusual situation. As a consequence of these problems, the fee award to Goldstein Demchak must be recalculated on remand. The firm’s California rates ought not be simply inserted into the court’s previous calcula t i o n s ; that they are the new starting point does not r e qu i r e them to be the end point of analysis. See cases cited
supra
. It is apparen t t h a t the court carefully tailored the award, adjusting it, inter alia, for the second chair role played by the firm, approving hourly rates for travel time, r e m o vi n g a small amount of duplicative work and as will be noted, discounting the hours spent on unsuccessful claims in the litigation. To the extent the court deems appropriate, it may have to reconsider all aspects of the fee award to achieve reasonable compensation in light of the results obtained for the class members. B. Comparability of plaintiffs’ and defense’s counsel fees Although we have concluded alre a dy that remand is necessary, it is appropriate to address and firmly reject p l aintiffs’ other challenge to the fee award, arising from the Supreme Court’s recent opinion in Perdue v. Kenny A.

ex rel. Winn , 130 S. Ct. 1662 (2 0 1 0 )

. In Perdue , the Court approved, only “in extraordinary circumstances,” an increase in the attorneys’ fee lodestar “due to superior performance and results.” Id. at 1669. Two Justices specially
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concurred in em phasis of the rarity of such cases. See id. at 1677 (Kennedy, J, concurring); id. at 1677-78 (Thomas, J., concurring). Tru e , Perdue notes in
pas s in g th at “the lodestar method produces an award that roughly approximates the fee that the pr e v a i l i n g attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case.” Id

. at 1672 (emphasis in original). But Perdue never requires or even hints at the plain t i f

f s’ proposition: that their hourly rates should approximate those charged by the defense counsel. The plaintiff

s persuaded the district court to allow discovery of defense counsel’s fees and to write on the question of parity b e t w e e n plaintiff and defense counsel. No prior Fifth Circuit authority requires this comparison, nor do e s common experience, because the tasks and roles of counsel on opposite sides of a case vary fundamentally. If t h e r e were logical comparability, this court’s decisions would have recognized it in the Johnson facto r s o r i n past lodestar decisions. And if, perchance, defense counsel had charged less in the course of this litigation, plaintiffs would have avoided any paean to comparability. See Graves v. Barnes , 760 F.2d 200 (5th Cir. 1983). To top it off, opposing counsel’s total charge for the litigation was $4,864,923.37 – only $124,728 more than the court awarded to plaintiffs. That difference is just 2.63% of plaintiffs’ total fee award (and 2.15% of plaintiffs’ total award including costs). One would suppose

a 2.63% disparity falls within a “rough approximation,” but this leads plaintiffs 6

At leas t one othe r cour t has ref err ed to a 10 per cent red uct ion in f e e a w ard s as 6 “s light. ” See Zolf

o , 50 F.3 d a t 2 61 (“ The bank rup tcy cour t cut Zolf o Coop er’ s tot al
c o m p ens atio n requ es t app roxim atel y tw elve per cent

. When fac ed wi th a red uct ion of te n per cent in a sim ilar cas e, we st ated that ‘no cour t, view ing a rec ord of this magni tud e fr om the dis tanc e inhere nt in app ellat e review , coul d ass es s the reas onabil ity of a r educ tio n as s light
as ten per centw ith fla wl es s pr ecis ion. ’” (c itat ion om itt ed) ).
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down a new rabbit trail, and they begin to argue about the higher time-value of money for fees paid during the litigation than at its conclusion. We decline to layer needless complexity in an area in which c u r r e nt law is practical and clear. On remand, the district court need not consider Perdue

. C. Fees for unsuccessful claims On cross-appeal, Lufkin attacks the o t her half of the district court’s lodestar calculation – the number of hours reasonably expended. Lufkin claims t h a t plaintiffs were awarded fees accrued in pursuing claims that were n o t successful. While plaintiffs initially waged a n a cross-the-board challenge to Lufkin’s employment procedures, th e disparate treatment claims were dismissed, and they prevailed only on the disparate impact claim relating to

7 Lufkin’s promotion practices. Luf kin m ust show clear error in the district court’s factual determinations. Our decision to remand the case to the district court to recalculate the fee award using Goldstein Demchak’s home-district rates as a startin g point also disposes of this issue. Calcul a t i n g fee awards is a holistic endeavor. See generally Hensley , 461 U.S. at 429-37 (explaining that the amount of fees “must be determined on the facts of each case” and notin g n u m e r ous competing considerations that might be balanced in determining the p r o p e r “equitable judgment”). Cons e qu ently, the district court may deem it necessary to reconsider this element of the fee award.

III. BACK PAY CALCULATIONS Lufkin argues on cross- a p p e a l that the district court erred in its calculation of back pay. Following the instructions of the McClain II panel, the district court awarded plaintif f s $3.3 million in back pay damages and $2.2

See Mc Cla in II

, 519 F.3dat282 -83. 7
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million in pre-judgment interest to reflec t a t o t al of 136 lost promotions. We omit discussion o f t h e f i n e r details of the back pay award except to note that damages commence on March 6, 1994, or 300 days before McClai n filed his EEOC claim. T itle VII provides that, except for continuing violations like harassment, damages may only be awar d e d f o r violations that occurred 300 days before an EEOC charge is filed. See 42 U.S.C. 2000e-5(e)(1). Lufkin now contends that the district court should have awarded damages commencing no earlier than April 2, 1996, or 300 days before Thomas filed his EEOC claim. Lufkin reasons that because McClain II held that only Thomas’s EEOC claim suffi c i e ntly exhausted administrative remedies, only that claim
may provide the benchmark for the 300-day calculation. Starting damages two years later, Lufkin argues, produ c es two results: the $593,208 in damages assessed for 1994-95 should be vacated; and the entire back pay award for the post-1996 period should be vacated because there is no statistically significant indication of racial discrimination using post-1996 data. Lufkin does not appear to dispute that the district court correctly followed the instructions of McClain II

. Therefore, Lufkin’s attack on the district court’s order is really an attack on the holding of McClain II

. T h i s c o u r t’s rule of orderliness prevents o ne panel from overruling the decision of a prior panel. Teague v. City of Flower Mound , 179 F.3d 377, 383 (5th Cir. 1999). In addition, under the law-of-the-case doctrine, “ a n issue of law or fact decided on appeal
may not be reexamined either by the district court on remand or by the appellate court on a subsequent appeal.” Fuhrman v. Dretke , 442 F.3d 893, 896 (5th Cir. 2006) (citations and quotations omitted). Nevertheless, Lufkin argues that we may in effect overrule the previous panel beca u s e (1) an intervening 2010 S u preme Court opinion clarifies the 300-day time bar; (2) the law of t h e c a s e does not apply because the McClain II implicit decision on limitations was not 16 Case: 10-40036 Document: 00511564343 Page: 16 Date Filed: 08/08/2011No. 10-40036

squarely considered by the prior panel and was clearly wrong; and (3) McClain II
may be set aside in order to prevent manifest injustice. On this record, we must reject these contentions. First, the intervening Supreme Court decision on which Lufkin relies adds nothing. In Lewis v. City of Chicago , 130 S. Ct. 2191 (2010), the Court rejected class ce r tification for a sub-class of plaintiffs who alleged injury prior to the Title VII 300-day bar. Lewis n e i t h e r forged new law nor elaborated on the 300-day period. Indeed, the 300-day statutory bar was clear well before Lewis

. See, e
. g
. , U

nited Air Lines, Inc. v. Evans , 431 U.S. 553, 558 (1977) (“A discriminatory act which is not made the basis for a timely charge is the legal equivalent of a discriminatory act which occ u rred before the statute was passed . . . . [It] has no present legal consequences.”). Second, Lufkin claims that McCla i n I I overlooked the question of the
proper date on which to commence damages for the lost pr o m o t i o n claim, and therefore, the law-of-the-cas e doctrine does not apply. McClain II noted, however, that Lufkin did not contest Thomas’s 1997 EEOC claim at trial: Although McClain’s EEOC complaint and the OFCCP investigation faile d t o exhaust the employees’ class claims, Buford Thomas’s EEOC complaint carries part o f th e r equisite burden.

. . . We conclude, however, that exhaustion was sufficient. Significantly, Lufkin did not contend otherwise in the trial court” (emphasis added). See 519 F. 3d at 275. According to Lufkin, the McClain II panel erred by not following the logic of its argument to the conclusion that any damages owed to the class for lost p r omotions must therefore be limited to the 300-day period preceding Thomas’s claim. That McClain II did not go this extra mile is clear. That a proper application o f the Title VII statute of limitations would have required this result is also clear.

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The question before this court, then, is whether the law of the case doctrine should not apply either because McClain II overl o o k e d t h is point or because manifes t i nj u stice ensues from a failure to vacate and remand the damage award. Lufkin, w e believe, does not merit our exercise of discretion to “correct” McClain II for two reasons. First, Lufkin waived its right to complain about the correct application of the time bar. Lufkin acknowledges in this appeal that it did not question at trial the sufficie n c y o f Thomas’s EEOC claim to exhaust administrative remedies for t h e c l a s s
. Lufkin also admits that, as a conseque n c e , it made no argument in the trial court or to this court on appeal concerning the proper time bar if Thomas’s exhausted claim became the linchpin for the class’s claims. Yet Lufkin strenuously c h a l l e nged, and we ultimately upheld its challenge, of the sufficiency of McClain’s EEOC c h a r g e t o exhaust remedies for the class. Why Lufkin chose not to qu e s t ion, as a fallback, the ramifications of Thomas’s EEOC claim is unstated. Lufkin a d d ed Thomas’s EEOC charge to the trial court record. Lufkin now asserts that “no one” at the trial court level sought relief o n t h a t c h arge. But it is part of the record and Lufkin does not deny that it has operative effect. That this court overlooked how t he 300-day statute of limitation would apply to claims founded on T h o m a s ’ s EEOC charge is in large measure a product of Lufkin’s oversight. Second, despite the large sum of damages alleged to turn on this issue, we do not find “manifest injustice” that necessitates “correction.” This case has b e e n in litigation nearly fifteen y e a r s and has spawned five appeals. Vacating the d a m a g e a w ard and remanding for further proceedings would be a costly an d complex undertaking. It is l i k ely that whatever amount Lufkin successfully shaved off the damage award would be offset by the attorneys’ f e e s plaintiffs

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would accrue on remand. Giv e n this economic reality and the background circumstances, justice is better served by finality. We therefore affirm the district court’s back pay calculation. 8 CONCLUSION W e m a i ntain–indeed, this panel has no authority to abrogate–our longstanding rule that attorneys for successful civil rights plaintiffs should presumptively receive local forum prevailing rate s
. The case before us today, h o wever, is atypical because an avalanche of unrebutted evidence established that (1) plaintiffs’ counsel required assistance in prosecuting the case and (2) no lawyers w i thin the district or state were available to assist on this particular

case. As a result, the trial court erred in failing to calculate the initial lodestar using the rates Goldstein Demchak attorneys typically charge in their own home district. The court, on remand, must reconsider the fee award using those rates as a starting point. We intimate no view on the final fee award to be issued. There is no reversible error, however, in the district court’s calculation of back pay. For the foregoing reasons, the judgment of the dis t r i c t c ourt is AFFIRMED IN PART, VACATED AND REMANDED IN PART.

Becaus e we conc lude that the dis tri ct cour t did not err in i t s use of 1994 as a 8 back st op, we do not addres s Lufk in’s argum ents as to p laint iffs’ inabil ity to dem ons tra te a st atis tic ally signi fic ant sho rtf all in pr om otio ns.

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EDITH H. JONES, Chief Judge, concurring: Although it is unusual, I feel obliged to clarify a couple of points because of Judge Dennis’s concurrence and to add one overarching comment. Judge Dennis suggests that the majority o p i n i o n does not “categorically prohibit” district courts from comparing the fees of defense cou n s e l a n d prevailing plaintiffs’ counsel when statutory fee shifting occurs. The language
may n o t b e “ categorical,” but it certainly disfavors inquiries on the precise “comparability” of p l aintiffs’ and defense counsel’s fees such as the plaintiffs sought here. Because neither Judge Dennis nor the plaintiffs cite any authority besides dicta in Perdue supporting the inapt comparison, and such comparisons

are bound to distract district courts from the b a s i c question of the reasonableness of the plaintiffs’ fees, questions of comparability “layer needless complexity” in an area where the law is practical and clear. Judge Dennis also suggests that the majority does not approv e the trial court’s char a cterization of the Goldstein Demchak firm’s services as those of second-chair counsel. O f c o u rse we did. This opinion finds error in two of the thr e e r e l e v a nt findings by the district court, but we do not criticize its third finding, that “Goldstein Demchak attorneys performed s econd-chair trial duties

. . . .” Moreover, we note that because the district court “carefully tailored the award, adjusting it, inter alia , for the second-chair role played by the firm,” it may have to reconsider all aspects of the fee award. No clear error was shown in this finding by the district court, which reviewed the previous p r o c eedings thoroughly. This finding by the district court is not reversed, and it may become relevant on remand. It cannot escape the reader’s attention that the Goldstein Demchak firm has been authorized to receive several million dollars in fees, and a million dollars in expenses, f

o r p r e v a i l i ng in this protracted case. But to them, that’s

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not enough, and they seek an hourly increase that will add $3 million more to their award. If that happens, the attorneys will have received nearly double the dollar award of the plaintiffs. Wh a t h a s f e e shifting come to? This is not an appeal about incentivizing modestly compensated attorneys for pursuing noble goals: the $400 hourly rate awarded to Mr. Garrigan is hardly a day laborer’s fee. This appeal is designed simply to enrich, not to enhance or encourage. The Supreme Court holds that fee-shifting cannot bring a windfall to attorneys. See Rivera , supra
. On remand, the district court should exercise its discretion within th e p a r a m e ters we have set out to prevent a windfall recovery. See Hensley , supra.

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DENNIS, Circuit Judge, concurring in the judgment. I agree with much of the majority opinion — particularly its adoption of the generally accepted rule that “[w]hen fees are sought for an out-of-townspecialist [attorney], courts must determine (1) whether hiring the out-oftown specialist was reasonable in the first instance, and (2) whether the rates sought by the out-of-town specialist are reasonable for an attorney of his or her degree of skill, experience, and reputation.” Hadix v. Johnson , 65 F.3d 532, 535 (6th Cir. 2005). I further agree that the application of this rule to 1 the facts of this case requires us to vacate the district court’s award of attorneys’ fees to Goldstein Demchak and remand for reconsideration using the firm’s usual rates as the basis for calculating the lodestar figure. I also agree with the majority’s decision to affirm the district court’s calculation of back pay. Insofar as the majority opinion states that the Supreme Court’s recent opinion in Perdue v. Kenny A. ex rel. Winn , 130 S. Ct. 1662 (2010), does not require parity between the hourly rates or total fees of the prevailing party’s counsel and the other side’s counsel, I agree with that conclusion. However, the PerdueCourt’s comment that “the lodestar method produces an award that roughlyapproximates the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case,” id. at 1672, does indicate to me that the

This app roac h has been fol low ed, wi th mi nor variat ions , by at leas t nine cir cuit s. See, 1
e. g. , Sim mo ns v. N. Y. City Tra nsi t Auth. , 575 F.3d 170, 175- 76 (2d Cir. 2009) ; Ma thur v. Bd. of Trus tees of S. Ill. Uni v. , 317 F.3d 738, 744 (7t h Cir. 2003) ; Zolf o, Coop er & Co. v. Sunbea mOs ter Co. , 50 F.3d 253, 259 (3d Cir. 1995) ; Case y v. City of Caboo l, Mo

. , 12 F.3d 799, 805 (8t h Cir. 1993) ; Ga tes v. De ukm eji an , 987 F.2d 1392, 1405-06(9th Cir. 1992) ; Na t’l Wildl if e Fed’n
v. Ha nson , 859 F.2d 313, 317 (4t h Cir. 1988) ; Ma cei ra v. Pagan , 698 F.2d 38, 40 (1s t Cir. 1983) ; Do nnel l v. U

nitedState s , 682 F.2d240 , 252 (D .C. Cir

. 1982)

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hourly rates or total fees charged by defense counsel are relevant to the question of what is a reasonable hourly rate or total fee for a prevailing plaintiff’s counsel. As the Seventh Circuit has put it, “when the defendant has hired expensive, out of town counsel, the plaintiffs seem justified in saying that the nature of the case required the skills of out of town specialists.” Chrapliwy v. Uniroyal, Inc. , 670 F.2d 760, 768 n.18 (7 th Cir. 1982). In at least some cases, the “hourly rates charged by the defendant’s attorneys provide a helpful guide in determining whether similarly high rates and hours requested by the plaintiffs were reasonable.” Id. I do not read the majority opinion as categorically prohibiting district courts from ever considering the rates charged by the opposing party’s counsel when determining fee awards under fee-shifting statutes. In any event, consideration of defense counsel’s fees appears to be unnecessary in the present case, given that “an avalanche of unrebutted evidence” (in the majority’s words) already establishes that Goldstein Demchak’s usual rates are the proper basis for the lodestar calculation. The majority opinion does not address the question of whether the district court committed clear error by characterizing the Goldstein Demchak attorneys as playing a mere “second-chair” role. It is unclear whether the 2 characterization of an attorney as “second-chair” is at all relevant to the proper calculation of the fee award. But even if it is, the undisputed 3

Nor mal ly ther e wo uld be good reas on to def er to the tri al judge’ s char act eriza tio n of 2
an att orne y’s role in a cas e. Ho we ver, in this cas e, t h e j u d g e w h o d ete rm ined the aw ard of att orne ys’f

ees w as not the sam e jud ge w ho pr es ide d over the tri al.
If anythin g, it may be rele vant to “w heth er hirin g t h e o u t

- o f-t ow n sp ecia lis t wa s 3
reas onable in the fir st ins tanc e,” Ha dix , 65 F.3d at 535. But that ques tio n is no longer at iss ue in this cas e, sin ce the majo rit y o p i n i o n right ly conc lude s that the evide nce in the rec ord
overw helm ingly s how s thathi ring Go lds teinD em chakw as reas onable

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evidence in the record clearly establishes that the firm did notplay a “secondchair” role in litigating this case. Attorneys and staff from Goldstein Demchak worked more than four times as many billable hours on this case as did Garrigan and his one paralegal. At trial, Goldstein Demchak attorneys examined 11 out of 22 witnesses, including both sides’ expert witnesses. And Garrigan sought the firm’s help in the first place because of its superior reputation and expertise in the field of employment discrimination class action litigation. These facts are inconsistent with a mere “second-chair” role. Therefore, on remand, the district court should not rely on the erroneous “second-chair” label as grounds for reducing the fee award to Goldstein Demchak. With these observations, I concur in the result reached by the majority: affirming the district court’s calculation of back pay, vacating the fee award to Goldstein Demchak, and remanding for reconsideration of the fee award.

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