Opinion ID: 4027535
Heading Depth: 2
Heading Rank: 1

Heading: The 60% Reduction in Fees and Costs

Text: Appellants argue that the district court abused its discretion because it did not explain why a 60% reduction of the requested attorneys’ fees and costs was appropriate. The City responds that a reduction was necessary because, even as otherwise shaved from the original request, the requested fees were unreasonable. It adds that 60%, specifically, was the appropriate reduction because counsel for Appellants expended excessive hours and exercised questionable billing judgment. We review the award of attorneys’ fees under § 1988 for an abuse of discretion. Binta B. ex rel. S.A. v. Gordon, 710 F.3d 608, 618 (6th Cir. 2013) (citing Reed v. Rhodes, 179 F.3d 453, 469 n.2 (6th Cir. 1999)). To resolve this dispute, we first examine the context within which Appellants may seek fees. Section 1988 authorizes courts to award attorneys’ fees to prevailing parties in civil rights actions. 42 U.S.C. § 1988(b). The aim of such fees is “to aid civil rights,” not attorneys, Binta B. ex rel. S.A., 710 F.3d at 612 (citations omitted), and thus the primary concern is whether the fee awarded under § 1988 is reasonable, Reed, 179 F.3d at 471; see also Farrar v. Hobby, 506 U.S. 103, 115 (1992) (“[F]ee awards under § 1988 were never intended to produce windfalls 3 The proceedings were delayed when the City filed for bankruptcy in 2013. 9 No. 15-1449, H.D.V. - Greektown, LLC v. City of Detroit to attorneys.” (quoting City of Riverside v. Rivera, 477 U.S. 561, 580 (1986) (plurality opinion)) (internal quotation marks omitted)). A “reasonable” fee is one “sufficient to induce a capable attorney to undertake the representation of a meritorious civil rights case.” Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 552 (2010). To determine whether a fee is reasonable, we apply the lodestar method, which involves calculating “the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). We discern a reasonable hourly rate by “look[ing] to the prevailing market rates in the relevant community.” Perdue, 559 U.S. at 551 (citation and internal quotation marks omitted). Courts should exclude hours that were not “reasonably expended,” and “[c]ounsel for the prevailing party should make a good faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary.” Hensley, 461 U.S. at 434 (citation omitted). On review, the district court’s decision is generally “entitled to substantial deference, especially when the rationale for the award was predominantly fact-driven.” Binta B. ex rel. S.A., 710 F.3d at 628 (quoting Adcock-Ladd v. Sec’y of Treasury, 227 F.3d 343, 349 (6th Cir. 2000)). Moreover, “the district court has discretion to adjust the award based on relevant considerations peculiar to the subject litigation,” the most critical of which is “the degree of success obtained.” Id. (citation and internal quotation marks omitted). This Court generally “affirm[s] unless the [district] court’s ruling is based on an erroneous view of the law or on a clearly erroneous assessment of the record.” Id. (quoting Isabel v. City of Memphis, 404 F.3d 404, 415 (6th Cir. 2005)). To be sure, the discretion afforded to district courts is not absolute. Adcock-Ladd, 227 F.3d at 349. “[T]he district court must provide a clear and concise explanation of its reasons 10 No. 15-1449, H.D.V. - Greektown, LLC v. City of Detroit for the fee award.” Id. (quoting Hadix v. Johnson, 65 F.3d 532, 535 (6th Cir. 1995)) (internal quotation marks omitted). While “[t]here is no precise rule or formula for making [fee] determinations,” Hensley, 461 U.S. at 436, “[i]t is essential that the judge provide a reasonably specific explanation for all aspects of a fee determination,” Perdue, 559 U.S. at 558. Without a reasonably specific explanation, “adequate appellate review is not feasible, and without such review, widely disparate awards may be made, and awards may be influenced (or at least, may appear to be influenced) by a judge’s subjective opinion regarding particular attorneys or the importance of the case.” Id. With these principles in mind, we agree with Appellants that the 60% reduction here lacks a sufficient explanation by the district court. We have noted “the difficulty in assessing fee applications with mathematical precision,” Binta B. ex rel. S.A., 710 F.3d at 639, but even so, a district court must support a particular increase or reduction with some articulable calculation or record evidence. The Supreme Court in Perdue, for instance, remanded in part because the district court did not properly justify why it had increased the requested fees by 75% “rather than [by] 50% or 25% or 10%.” 559 U.S. at 557. The district court in Perdue had reasoned, in part, that the attorneys “had to make extraordinary outlays for expenses” and had waited an extended period of time for reimbursement. Id. at 557–58. The Court rejected that justification as inadequate, however, because the district court had not calculated what portion of the increase was attributable to the delays; “[n]or did the court provide a calculation of the cost to counsel of any extraordinary and unwarranted delay.” Id. at 558. The result, the Court explained, was that the district court had increased the fees by an “essentially arbitrary” percentage. Id. at 557. Similarly, in Binta B. ex rel. S.A., we vacated the district court’s 20% reduction because the district court did not “demonstrate why [it had] settled on 20%, as opposed to 43.5% or 60% 11 No. 15-1449, H.D.V. - Greektown, LLC v. City of Detroit or 70%.” 710 F.3d at 640. The defendants in Binta B. ex rel. S.A. had sought a 43.5% reduction of the fee award. Id. at 639. But the district court imposed a 20% reduction after “briefly and summarily describ[ing]” the thirty-year history of the litigation and noting that the plaintiffs’ success was somewhat limited by their own efforts. Id. at 640. Given the complexity of the case, we concluded that that “explanation was insufficient” and remanded with instructions to “employ a methodology that permits meaningful appellate review.” Id. (citation and internal quotation marks omitted). Here, the explanation for imposing a 60% reduction similarly lacks the necessary specificity. The district court first determined, in agreement with the magistrate judge, that the hours spent on the 2003 Action and the criminal proceedings were not compensable. Excluding the hours expended on the 2003 Action brought the requested award to roughly $1.05 million, and Appellants had sought only $16,200 in fees for the criminal proceedings. At that point, however, the district court commented that an additional 60% reduction was warranted because counsel took an “indiscriminate approach” to the fee petition. R. 169 Order Adopting R. & R., Overruling Pls.’ Objs., & Granting in Part Pls.’ Mot. Att’y Fees & Costs (“Order Adopting R. & R.”) 5 (Page ID #5218). The magistrate judge provided a more specific explanation. He noted that Appellants sought fees for the criminal proceedings, the BZA proceedings (the bulk of which were not reasonably expended on the 2006 Action), and representing the Jane Roe Plaintiffs (whose inclusion in the proceedings required little additional work). The hours expended on the criminal proceedings, however, were already excluded. Neither the district court nor the magistrate judge determined what portion of the remaining fees were attributable to the BZA proceedings and Jane Roe Plaintiffs. And at no point did either the district court or the 12 No. 15-1449, H.D.V. - Greektown, LLC v. City of Detroit magistrate judge assert that those hours were a majority or even a substantial amount of the requested fees. The district court also explained that Appellants are “extraordinarily profitable companies whose access to the judicial and political processes is far greater than most citizens[’]” and that this case has a “tangential relationship [to] compelling civil rights.” Id. at 4–5 (Page ID #5217– 18). These considerations are plainly inconsistent with § 1988(b). So long as Appellants have prevailed in a qualifying civil rights action, they may be awarded attorneys’ fees for the hours reasonably expended. Cf. Northcross v. Bd. of Educ. of Memphis City Sch., 611 F.2d 624, 636 (6th Cir. 1979) (explaining that, once the plaintiffs are determined to be the prevailing party, “they are entitled to recover attorneys’ fees for all time reasonably spent on a matter.” (internal quotation marks omitted)), abrogation on other grounds recognized by L & W Supply Corp. v. Acuity, 475 F.3d 737, 739 & n.6 (6th Cir. 2007). This is so regardless of the prevailing party’s own financial resources. See Lavin v. Husted, 764 F.3d 646, 650 (6th Cir. 2014) (“A plaintiff’s ability to pay his or her attorney . . . is irrelevant to the fee inquiry.”). In addition, the magistrate judge remarked that, in his view, the hours were excessive given that counsel was an experienced First Amendment attorney. While we do not necessarily disagree, the magistrate judge did not indicate how many hours would have been reasonable to expend given counsel’s experience and the length of the litigation, and so we are unable to gauge the accuracy of his assessment. A more specific explanation would have been helpful in light of the considerations that suggest that a more substantial fee award would be appropriate here. Appellants succeeded in having the City’s zoning ordinances declared facially unconstitutional. They prevailed in a case fought over years of litigation and in the face of repeated attempts by the City to circumvent their constitutional rights. The attempts were sometimes carried out legislatively through municipal 13 No. 15-1449, H.D.V. - Greektown, LLC v. City of Detroit ordinances and, at other times, were targeted directly at K & P’s nightclub through the City’s refusal to consider Appellants’ sign permit and transfer applications. In other words, this case involved thousands of hours of work spent defending fundamental constitutional rights and enforcing prior court orders that had vindicated those rights, the very kinds of efforts that § 1988 aims to promote. See Binta B. ex rel. S.A., 710 F.3d at 612 (“[Section] 1988 plays a critical role in ensuring that federal rights are adequately enforced, and attorneys have every right to be compensated for any fees and expenses they reasonably incur.” (citation and internal quotation marks omitted)). The City argues that there was ample basis to conclude that the requested award was excessive. That argument misses the point. Our concern is not whether the requested fee award should be reduced but whether the reduction amount was appropriate and adequately explained. The magistrate judge noted that the attorneys’ fees motion filings were voluminous, observed that the number of claimed hours seemed extraordinary given counsel’s experience and level of expertise, and explained that Appellants were not entitled to reimbursement for the hours expended on ancillary proceedings or representing previously dismissed parties. Other than noting that courts in other cases “have reduced the total fees or hours by amounts ranging from 40% to 77%” and saying that the district court “does not have an obligation to make [counsel] millionaires,” however, the magistrate judge provided no rationale for why 60% was the appropriate fee reduction. R. 162 R. & R. 13 (Page ID #5126). He gave similarly sparse reasoning for reducing the requested costs by 60%. See id. at 17 (Page ID #5130) (“I have recommended a reduction in the request for attorney[s’] fees by 60%, and a commensurate reduction in the request for costs is appropriate.”). This reasoning is wholly inadequate. The 14 No. 15-1449, H.D.V. - Greektown, LLC v. City of Detroit district court, in adopting that recommendation, did nothing to explain why 60% was the appropriate amount to account for those factors. Accordingly, we conclude that the district court abused its discretion in reducing the award for attorneys’ fees and costs by 60%, and we remand so that the district court can revisit, in light of this opinion, whether a mere blanket percentage reduction in fees truly is appropriate, and if so, by what measure, and ultimately to employ a methodology that permits meaningful appellate review.