Opinion ID: 772649
Heading Depth: 2
Heading Rank: 2

Heading: Percentage Reduction

Text: 9 Much more consequential in terms of its potential impact on the total fee award is the controversy between the parties concerning the district court's determination that only 120 of the hours Ferland's attorney expended on the litigation should be compensated. 3 10 The district court first found that Ferland's attorney lacked adequate experience to justify her requested hourly rate. It observed that [a]n experienced attorney commands high hourly rates because he or she is efficient at performing the necessary tasks (emphasis added), and accordingly reduced the hourly rate for Ferland's counsel from $195 to $160 per hour. This $160 rate was based in large part on the district court's objective analysis of the prevailing rates of similarlyexperienced attorneys in large California law firms. Ferland does not challenge the rate reduction. 11 The district court then considered whether to eliminate specific hours from Ferland's fee request as excessive, but decided not to do so, stating: 12 [T]he court is already reducing Plaintiff's hourly rate request in part because Ms. Raymond's inefficiency indicates such a reduction is appropriate. Therefore, the court will not eliminate specific hours from the fee request related to excessive hours. 13 To this point, the district court's reasoning was sound. When it finally computed the lodestar amount, 4 however, the court reversed course and did reduce the attorney's hours -by more than half -because of the relative lack of complexity of the case, the lack of jury trial experience of counsel, and because of counsel's inefficiency in prioritizing time. In so doing, the district court did not identify any particular excessive hours, nor did it explain in any other fashion how it decided how many hours to cut, or by what percentage to reduce the documented hours. 14 Ferland contends that the district court impermissibly double-counted her attorney's inefficiency, first by reducing her hourly rates on account of her inexperience, and then by reducing her hourly total for, partially, the same reason. Cunningham v. County of Los Angeles, 879 F.2d 481, 489 (9th Cir. 1988) (noting that in ordinary cases .. . double counting is impermissible). The district court's reductions, however, were not necessarily duplicative. The district court reduced the hourly rate awarded to Ferland's counsel because it found that she was inexperienced, but the court could alsoreasonably have decided that even taking into account her inexperience, some of her hours were excessive as compared to what one would expect of a similarly inexperienced attorney. 15 That is not, however, how the district court seems to have reached its result. Instead, after discounting the hourly rate, the court declined to eliminate particular excessive hours on account of the attorney's inefficiency, noting that the inefficiency was already adequately accounted for. Then, the district court went on nonetheless to grant a wholesale discount on the total number of hours when computing the lodestar figure. The district court did not explain the apparent internal contradiction in its reasoning. That omission in itself is sufficient to require a remand for a concise but clear explanation of its reasons for the fee award. Hensley , 461 U.S. at 437 (emphasis added). 16 Quite aside from the apparent contradiction, the district court's method of reducing the hours for which fees are available is one that, under our cases, requires further explanation. The district court simply announced a bottom-line number of compensable hours, with no attempt to calibrate the number chosen to demonstrable inefficiency in carrying out particular tasks. We held in Gates v. Deukmejian that such a  `meat-axe approach'  to reducing fees is acceptable in some circumstances. Gates, 987 F.2d at 1399. The method is controversial, however, id., and does not discharge the district court from its responsibility to set forth a `concise but clear' explanation of its reasons for choosing a given percentage reduction nor from its duty to independently review the applicant's fee request. Id. at 1400 (quoting Hensley, 422 U.S. at 437). 17 For example, in Gates, the defendants in a complex civil rights class action suit challenged the district court's acrossthe-board ten percent cut of an attorneys' fee award, contending that the reduction did not cut deep enough and that a more particularized review would have gone further. This court held that decisions . . . employing percentages in cases involving large fee requests are subject to heightened scrutiny. Id. 5 We then went on to vacate the district court's determination of the appropriate lodestar for reassessment, stating: 18 The lack of even a brief explanation of how and why [the district judge] selected ten percent and the fact that the record not only fails to illuminate the court's reasoning but casts doubt on the very existence of such a rationale, leads us to the ineluctable conclu sion that the district court, faced with an admittedly voluminous paper record, threw up its hands and relied on [an] . . . arbitrary, ten percent figure with out itself reviewing the record. 19 Id. at 1401; see also id. at 1399 (holding that a district court may not slash[ ] broad categories of activity by arbitrary percentages `on the basis of his inarticulable and unsubstantiated dissatisfaction with lawyers' efforts to economize,' rather than by disallowing specific items of unreasonable activity and providing examples of excessive time spent on legal research (quoting In re Continental Illinois , 962 F.2d 566, 570 (7th Cir. 1992))). 20 We have, since Gates, approved a percentage or across-theboard approach in cases where much smaller fee awards were at stake, 6 but only when the district court provides a reasonable explanation for the cut. See Schwarz v. Sec'y of Health & Human Servs., 73 F.3d 895, 906 (9th Cir. 1995) (upholding across-the-board reduction of $300,000 fee award); Harris v. Marhoefer, 24 F.3d 16, 19 (9th Cir. 1994) (upholding fiftypercent reduction of a $70,000 fee award for lack of success). 7 Indeed, the practice of reducing fees without identifying the hours spent inefficiently or providing any explanation of the particular degree of reduction adopted is no more defensible in relatively straightforward cases such as this one than in complex cases such as Gates, for several reasons. 21 First, where the underlying case is complex, the billing records are likely to be voluminous, and the judicial time expended in detailing excessive hours can therefore be similarly great. Where, however, the underlying case was not a complicated one, the district court that presided over the litigation should be able, after briefing by the parties, to look over the billing records for specific inefficiencies without expending a great deal of judicial time doing so. At least, the district court should be able to sample the records to show that there is a pattern of demonstrable inefficiency. See Gates, 987 F.2d at 1399. If the district court nonetheless decides to reduce the lodestar hours on a pure across-the-board basis, then we need an explanation for that choice if we are meaningfully to review the fee award for abuse of discretion. Id. at 1400. 22 Second, the number of hours expended in cases that are relatively straightforward may often seem high if considered in the aggregate, without perusing in detail the actual billing entries. The Federal Rules of Civil Procedure and the implementing rules of individual district courts, perhaps unfortunately, take a one-size-fits-all approach, and do not provide for procedural short cuts for relatively simple litigation. Compliance with procedural requirements such as meet and confer sessions between counsel, Fed. R. Civ. P. 16(b), 26(f), early neutral evaluation conferences, S.D. Cal. Civ. L.R. 16.1(c), scheduling conferences, Fed. R. Civ. P. 16(b), automatic disclosure requirements, Fed. R. Civ. P. 26(a), written discovery plans, Fed. R. Civ. P. 26(f), several-step processes for resolution of discovery disputes, Fed. R. Civ. P. 37(a), pretrial con-ferences, Fed. R. Civ. P. 16(a), proposed pretrial orders, S.D. Cal. Civ. L.R. 16.1(f)(7), case management conferences, S.D. Cal. Civ. L.R. 16.1(d), and expert witness reports, Fed. R. Civ. P. 26(a)(2), can result in attorneys' fees for relatively simple cases that seem unreasonably high after a first -or even second or third -glance at the bottom line. Some systematic perusal of the actual billing entries will often confirm that the reason for the seemingly high fee was not inefficiency, but careful compliance with the attorneys' responsibilities. 23 Third, in less complex cases there may be a tendency to assume -as the district court may have assumed here -that the time spent by an opposing counsel experienced in the subject matter is a good measure of the time reasonably expended. But in small cases as well as large ones, opposing parties do not always have the same responsibilities under the applicable rules, nor are they necessarily similarly situated with respect to their access to necessary facts, the need to do original legal research to make out their case, and so on. Comparison of the hours spent in particular tasks by the attorney for the party seeking fees and by the attorney for the opposing party, therefore, does not necessarily indicate whether the hours expended by the party seeking fees were excessive. See Johnson v. Univ. College of the Univ. of Ala. in Birmingham, 706 F.2d 1205, 1208 (11th Cir. 1983). Rather, any such comparison must carefully control for factors such as those mentioned, as well as for the possibility that the prevailing party's attorney -who, after all, did prevail -spent more time because she did better work. 24 Finally, even where the district court does explain adequately the decision to cut the lodestar hours compensated by the across-the-board method, there is still the need for the district court to provide, after an independent perusal of the record, some explanation for the precise reduction chosen. Gates' concern that a district court's cursory statement affords us no explanation as to how the court arrived at . . . the correct reduction and thus, it does not allow for us meaningfully to assess its determination, 987 F.2d at 1400, applies equally when the fee award is relatively small as when it is large. In either case, [a]bsent some indication of how the district court exercised its discretion, we are unable to assess whether the court abused that discretion. Id. 25 Here, the district court did not explain except at the most general level why it reduced by more than half the number of attorney hours for which Ferland could be compensated, 8 and did not explain at all the particular level of reduction -from 261.2 to 120 hours -chosen. Because we cannot determine the basis for the district court's decision to so substantially reduce the hours for which it permitted fees, we vacate the fee award and remand for reassessment in accord with the principles discussed above. McGrath v. County of Nevada, 67 F.3d 248, 253 (9th Cir. 1995) (If the district court fails to provide a clear indication of how it exercised its discretion, we will remand the fee award for the court to provide anexplanation.); Bernardi v. Yeutter, 951 F.2d 971, 974 (9th Cir. 1991) (requiring the district court to provide some explanation as to how [it] arrived at its figures (quoting Domingo v. New England Fish Co., 727 F.2d 1429, 1447 (9th Cir.), modified, 742 F.2d 520 (9th Cir. 1984))); Cunningham, 879 F.2d at 485 (same).