Opinion ID: 2575840
Heading Depth: 3
Heading Rank: 1

Heading: Applying the lodestar method

Text: The United States Supreme Court has previously addressed the question of what constitutes a reasonable fee, in the context of the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988 (West 1976), stating that: [t]he most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services. The party seeking an award of fees should submit evidence supporting the hours worked and rates claimed. Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). In Montalvo v. Chang, 64 Haw. 345, 358-359, 641 P.2d 1321, 1331 (1982) (citations omitted), overruled on other grounds by Chun v. Bd. of Trustees of the Employees' Retirement Sys. of the State of Hawai`i, 92 Hawai`i 432, 992 P.2d 127 (2000), [6] we endorsed a virtually identical method of calculation in the context of a class action litigation where the recovery resulted in a common fund from which the attorneys' fees were to be drawn: In essence, the initial inquiry is how many hours were spent in what manner by which attorneys. The determination of time spent in performing services within appropriately specific categories, is followed by an estimate of its worth. The value of an attorney's time generally is reflected in his normal billing rate. But it may be necessary to use several different rates for the different attorneys and the reasonable rate of compensation may differ for different activities. And when the hourly rate reached through the foregoing analysis is applied to the actual hours worked, a reasonably objective basis for valuing an attorney's services is derived. The inquiry, however, does not end here, for other factors must be considered. The product of the first and second steps nevertheless serves as the lodestar of the ultimate fee award. The first of the factors to be considered for possible adjustment of the lodestar determination is the contingent nature of success, a factor which may be of special significance where the attorney has no private agreement that guarantees payment even if no recovery is obtained. The second additional factor to be examined is the extent, if any, to which the quality of an attorney's work mandates increasing or decreasing the lodestar figure. If the court decides an adjustment is justified on this basis, it should set forth as specifically as possible the facts that support ... (its) conclusion. The foregoing algorithm is commonly referred to as the lodestar method. Id.; see also Chun, 92 Hawai`i at 434, 992 P.2d at 129 (In Montalvo, we adopted the `lodestar' method of awarding attorney's fees to plaintiffs' counsel in class action litigation where the recovery has resulted in the creation of a common fund from which the attorneys' fees are drawn) (emphasis added). Accordingly, we apply the lodestar method in the case at bar. Our initial task is to determine how many hours were shown to have been reasonably expended. See Sharp v. Hui Wahine, 49 Haw. 241, 246, 413 P.2d 242, 247 (1966) (the party requesting fees has the burden to prove that the requested fees were reasonably and necessarily incurred). To that end, after a thorough examination of the submissions of DFS and Paiea as well as a careful review of the record before us, we conclude that DFS has demonstrated that it expended 105 reasonable and necessary hours on the underlying appeal. [7] Our subsequent task is to determine a reasonable hourly rate. We note that four different attorneys, with four different hourly rates, worked on varying aspects of the underlying appeal. Accordingly, we conclude that the average of the four different rates constitutes a reasonable rate in the case at bar. The hourly rates for Attorneys Stubenberg, Durrett, Lam, and Zahaby are $325/ hour, $225/hour, $185/hour, and $125/hour, respectively. Thus, the average rate is $215/ hour. Finally, the lodestar method instructs us to multiply the reasonable rate by the sum of reasonable hours expended. See Montalvo, 64 Haw. at 358-359, 641 P.2d at 1331; Hensley, 461 U.S. at 433, 103 S.Ct. 1933. Accordingly, applying a rate of $215/hour to a sum of 105 hours, we conclude that DFS has shown that it has incurred $22,575.00 in reasonable and necessary attorneys' fees, and $940.70 in taxes. We therefore award DFS $23,515.70 in attorneys' fees.