Opinion ID: 1312511
Heading Depth: 2
Heading Rank: 3

Heading: The District Court's Application of the Goldberger Factors

Text: Appellants' final arguments concern the district court's application of the case-specific factors elucidated in Goldberger for determining the reasonableness of a common fund fee. Appellants contend that, in addition to committing errors in relation to each of these factors, the district court invented an additional factor, holding the attorneys' experience in litigating strip search cases against them, when in fact their experience should have weighed in favor of a higher fee. The Goldberger factors are applicable to the court's reasonableness determination whether a percentage-of-fund or lodestar approach is used, see Wal-Mart, 396 F.3d at 121 (Irrespective of which method is used, the ` Goldberger factors' ultimately determine the reasonableness of a common fund fee.), and in the latter context, indicate whether a multiplier should be applied to the lodestar. (Under the Arbor Hill approach, they would be factored into the appropriate hourly rate before calculating the presumptively reasonable fee.) The Goldberger factors include: (1) counsel's time and labor; (2) the litigation's magnitude and complexity; (3) the risk of the litigation; (4) the quality of representation; (5) the requested fee in relation to the settlement; and (6) public policy considerations. 209 F.3d at 50. Importantly, we defer to the district court's determinations regarding these factors. See id. at 47-48. Cf. Merck-Medco, 504 F.3d at 249 (The District Court applied the Goldberger test and made specific and detailed findings from the record, as well as from its own familiarity with the case.... Accordingly, we find no reason to disturb the District Court's [determination].). We address first Appellants' contention that the district court improperly counted the attorneys' experience in litigating strip search cases against them when that factor should have counted, if at all, in favor of the higher proposed fee award. Although attorney experience is not explicitly enumerated among the Goldberger factors, it is clear that experience might be relevant to several of them, including consideration of the time and effort expended by counsel, the complexity of the litigation, and quality of the representation. In Goldberger itself, this Court upheld the district court's decision to award a lodestar fee with no multiplier in part based upon its observation that the attorneys had been helped enormously by the spadework performed by federal authorities in actions against the same defendants and because the legal issues presented were not novel. 209 F.3d at 54, 56. Here, the advance spadework that assisted counsel in their suit against the County of Schenectady did not involve the previous unearthing of facts regarding the specific defendants, but rather the prior mining of relevant case law and shoring up of legal arguments that the district court reasonably concluded to have occurred during the course of two prior actions alleging unconstitutional strip search policies. The district court's decision to consider the benefit afforded to counsel by this experience  relevant to several of the Goldberger factors  does not constitute an error of law. Nor does Appellants' observation that experience might in some cases enable counsel to demand a higher fee make the district court's conclusion that it cut the opposite way in this case clearly erroneous. Indeed, our prior case law indicates that whether a given factor cuts in favor of or against the use of a multiplier depends heavily on the facts of a case. The level of risk associated with litigation, for example, which is perhaps the foremost factor to be considered in assessing the propriety of a multiplier, and typically weighs in its favor, can weigh against the use of a multiplier when the magnitude of risk stems only from a lawsuit's dubious legal merit. See id. at 54 (internal quotation marks omitted). We similarly see no clear error in the district court's remaining determinations as to the Goldberger factors. Appellants find fault with the court's determination regarding the first factor, that counsel were adequately compensated for their time and effort using their ordinary rates, and suggest that here attorney experience should have weighed in favor of some multiplier. They further criticize the court's finding regarding the fourth factor, quality of representation, and urge that the fact that class counsel did a fine job and obtained a good settlement, Oral Decision at 14, also should have counted in favor of a higher award. We have already addressed the experience argument, and for similar reasons find Appellants' contention regarding their performance to be insufficient to show clear error. Even in Goldberger, where counsel were praised by the district court as the cream of the profession whose genius and dedication were vital in resolving the complexities of the litigation, this Court upheld a fee award with no multiplier. 209 F.3d at 55-56. Both here, and in that case, while the district court declined to award formal multipliers for ... quality of representation, the court did consider those factors by allowing counsel to recover generous hourly fees. Id. at 56. [T]he question before us is not whether we would have awarded a different fee, but rather whether the district court abused its discretion in awarding this fee. In re Nortel Networks Corp. Sec. Litig., 539 F.3d 129, 134 (2d Cir.2008). Nor are we convinced that Goldberger factors two and three, the complexity and risk associated with the litigation, compel a higher fee award than that granted by the court below. In response to the district court's conclusion that the case was an ordinary civil rights case in which liability appear[ed] reasonably certain, Oral Decision at 13, Appellants contend that the case was far from simple, Appellants' Br. at 24, that this Circuit's holding in Shain regarding the unconstitutionality of misdemeanor strip searches was far from stable at the time of their suit, Id. at 25 (quoting McBean v. City of New York, 233 F.R.D. 377, 387 (S.D.N.Y.2007)), and that they faced substantial litigation risk due to the availability of an exhaustion of remedies defense under the Prison Litigation Reform Act (PLRA) and because damages were difficult to prove in their case. While appellants are correct that Shain was decided by a divided panel, we cannot say that the district court's sense of the strength of Appellants' case was clearly erroneous. At the time the instant suit was brought, see Goldberger, 209 F.3d at 55 (noting that [i]t is well-established that litigation risk must be measured as of when the case is filed), a policy of conducting blanket strip searches of misdemeanor detainees was clearly unconstitutional. See Shain, 273 F.3d at 62-66. Settlements had already been reached in two other class actions involving blanket strip search policies, including Kahler, in which Appellants' counsel themselves were involved, and the issue of liability had been resolved in favor of plaintiffs in a third. See Dodge v. County of Orange, 282 F.Supp.2d 41 (S.D.N.Y.2003) (finding defendants liable); Stipulation and Order of Settlement and Discontinuance, Spinner v. City of New York, No. 1:01-cv-2715 (E.D.N.Y. June 9, 2004); Motion to Certify Class and for Preliminary Approval of Class Action Settlement, Kahler v. Rensselaer County, No. 1:03-cv01324, 2004 WL 3522363 (N.D.N.Y. Mar. 17, 2004). Moreover, Appellants' complaint noted that the Schenectady Police Department's strip search policy, which they alleged was closely related to that of the defendant county, had been found unconstitutional in Gonzalez v. City of Schenectady, 141 F.Supp.2d 304 (N.D.N.Y.2001). Compl. at ¶ 33. While Appellants note that the Appellees distinguished the change outs pursuant to their policy from forbidden strip searches, and point to a purportedly similar case in which a lawsuit was dismissed, that case was decided nearly a year after they brought suit. See Judgment, Steinberg v. County of Rockland, No. 04 Civ. 4889 (S.D.N.Y. May 23, 2005). Appellants' assertions that the defendants in this case possessed potentially valid defenses and that damages were difficult to prove are similarly insufficient to demonstrate clear error in the district court's findings with respect to litigation risk. Counsel must do more than point to... general hurdles  such as the defenses available to defendants  and argue that because their fee was entirely contingent on their ability to overcome such hurdles, they must, as a matter of law, be compensated by a fee enhancement. Goldberger, 209 F.3d at 54. While the district court acknowledged that an award of damages was uncertain in the case, it correctly noted that [t]he damages risk is of little consequence to an attorney for a prevailing plaintiff in a civil rights case who's entitled to obtain attorneys' fees pursuant to 14 [U.S.C. §] 1988. Oral Decision at 13-14. Even if only nominal monetary damages had been recovered, Appellants' attorneys stood to recover a fee based on their success in obtaining injunctive relief. [W]here both monetary and equitable relief have been pursued, the size of the monetary recovery is not necessarily the proper measure of the plaintiff's success.... `[A] plaintiff who failed to recover damages but obtained injunctive relief ... may recover a fee award based on all hours reasonably expended if the relief obtained justified that expenditure of attorney time.' LeBlanc-Sternberg v. Fletcher, 143 F.3d 748, 758 (2d Cir.1998) (quoting Hensley v. Eckerhart, 461 U.S. 424, 435 n. 11, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983)). Cf. McCardle v. Haddad, 131 F.3d 43, 54 (2d Cir.1997) ([W]e have held that the denial of attorneys' fees was not an abuse of discretion where the plaintiff recovered only nominal damages and received no other meaningful relief.). Finally, we reject Appellants' assertions that the district court erred in its findings as to the fifth and sixth Goldberger factors, the reasonableness of the fee in relation to the size of the settlement and public policy considerations relevant to fee awards. Appellants' argument with regard to the former essentially repeats their benchmark assertion that the fee award in this case was too far from the percentage-of-fund awards in similar cases, adding that the district court erred in its assessment that an award equivalent to 13% was squarely within the range of typical awards and that Appellants' suggested lodestar multiplier was at the low end of multipliers that have often been awarded. While Appellants cite to Nortel as demonstrating this Court's concern over a district court's failure to consider awards in similar cases, that case upheld a fee award despite its disparity from other awards. See 539 F.3d at 134. Our case law makes clear both that no presumption applies to the percentage of a common fund that should be awarded to plaintiffs' counsel, and that an award of no lodestar multiplier at all is within the district court's discretion. See Goldberger, 209 F.3d at 51-57. A fee award does not constitute an abuse of discretion simply because it deviates materially from the [percentage] usually awarded in similar cases. Instead, we adhere to our prior practice that a fee award should be based on scrutiny of the unique circumstances of each case, and a `jealous regard to the rights of those who are interested in the fund.' Id. at 53 (quoting Grinnel I, 495 F.2d at 469). Even if a more thorough review by the district court of attorneys' fee awards in strip-search common fund cases might have indicated that the 13% fee awarded in this case was slightly below the lower end of the spectrum, see Nilsen v. York County, 400 F.Supp.2d 266, 281, 287-289 (D.Me.2005) (observing a percentage-of-fund range of 16-33% in strip search cases), we conclude that the district court's award was within its discretion given the considerations outlined in its discussion of the Goldberger factors. See Nortel, 539 F.3d at 134. We are mindful that public policy supports the pursuit of meritorious class action litigation to vindicate constitutional rights. Appellants suggest that some reward beyond the ordinary remuneration for legal services is needed to ensure that such suits are brought by competent counsel. On the other side of the ledger, however, is our longstanding concern for moderation. Goldberger, 209 F.3d at 57. Civil rights cases may or may not raise the same danger of routine overcompensation for risk that has troubled this court in the context of mega-fund class actions, but it is because of the case-specific nature of the fee award inquiry that we have been loath to disturb the determinations of district courts in this area. When the exercise of ... discretion is supported by adequate findings and is consistent with our preference for moderation, as it was here, we will not substitute our own predilections for the judgment of the district court. Id.