Opinion ID: 592209
Heading Depth: 2
Heading Rank: 2

Heading: Reasonable Hourly Rate and Enhancement of the Lodestar

Text: 43 The City vigorously contests the billing rates used by the district court in arriving at its lodestar figure. Both the Supreme Court and this court have made clear that such rates should be established by reference to the fees that private attorneys of an ability and reputation comparable to that of prevailing counsel charge their paying clients for legal work of similar complexity. In Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984), a unanimous Supreme Court declared that Congress did not intend the calculation of fee awards to vary depending on whether plaintiff was represented by private counsel or by a nonprofit legal services organization. Id. at 894, 104 S.Ct. at 1546. Reasonable fees are thus to be calculated according to the prevailing market rates in the relevant community, id. at 895, 104 S.Ct. at 1547, with close attention paid to the fees charged by lawyers of reasonably comparable skill, experience, and reputation. Id. at 895 n. 11, 104 S.Ct. at 1547 n. 11. See also Jordan v. Multnomah County, 815 F.2d 1258, 1262 (9th Cir.1987) (The prevailing market rate in the community is indicative of a reasonable hourly rate.); Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210-1211 (9th Cir.1986), amended, 808 F.2d 1373 (9th Cir.1987). 44 In determining an appropriate market rate, a district court may make reference to the factors developed by the Fifth Circuit in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.1974) and approved by this Court in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 69-70 (9th Cir.1975), cert. denied, 425 U.S. 951, 96 S.Ct. 1726, 48 L.Ed.2d 195 (1976). See United Steelworkers v. Phelps Dodge Corp., 896 F.2d 403, 406 (9th Cir.1990). The Johnson- Kerr factors include the novelty and difficulty of the issues involved in a case, the skill required to litigate those issues, the preclusion of other employment, the customary fee, relevant time constraints, the amount at stake and the results obtained, the experience, reputation, and ability of the attorneys, the nature and length of their professional relationship with the client, the undesirability of a case, and awards in similar suits. United Steelworkers, 896 F.2d at 406 n. 3. 4 45 In determining appropriate billing rates for the appellees' attorneys, the district court discussed at some length those Johnson- Kerr factors which it thought relevant to this case. It observed that the case involved difficult issues concerning the validity of the SFFD's employment tests that required considerable skill to litigate, particularly given the City's  'tenacious and uncompromising pretrial litigation in defense of the challenged examinations.'  748 F.Supp. at 1426 (quoting United States v. City and County of San Francisco, 656 F.Supp. 276, 281 (N.D.Cal.1987)). Representing the interests of class members during the remedial phases of the litigation was also a difficult task. For example, it was through the efforts of counsel for plaintiff-intervenors that this court was alerted to the City's planned budget cuts which would have adversely affected the [consent] decree. As at other junctures in the litigation, counsel for plaintiff-intervenors exhibited critical legal and political skill in opposing the budget cuts. 748 F.Supp. at 1427. 46 The court further noted that appellees' counsel made a massive level of commitment to this case which precluded them from engaging in most other work during its pendency. 748 F.Supp. at 1427. Counsel worked under considerable time pressure, particularly in seeking to prevent the City from entering into a consent decree with the United States which would have strictly limited the relief available to the appellees. Id. 47 In addition, counsel obtained excellent results for their clients. Id. at 1428. While the SFFD had previously entered into consent decrees with minority groups, none involved the dramatic race and gender conscious relief embodied in the present decree. In 1985, the court noted, minorities comprised only 14.6% of the city's firefighting force. As of August 8, 1990 minority composition stood at 24%. In a department which hired no women before 1985 there are now 36, comprising 2.6% of the force. One of the women is a lieutenant. Minority men have registered even broader gains in the officer ranks. In a fire department that had no minority members in the ranks of lieutenant or above in 1985, there are presently 54 lieutenants, eight captains, five battalion chiefs, one assistant chief and one assistant deputy chief II. Id. The court also scrutinized the educational background, career history and community standing of each appellee's attorney and concluded that they possessed a high level of experience, ability and reputation.... Id. 48 In light of these factors, the court turned to the evidence submitted by the appellees concerning the rates charged by San Francisco attorneys for work comparable to that performed in the SFFD litigation. We recently pronounced that declarations of the prevailing market rate in the relevant community ... [are] sufficient to establish the appropriate [billing] rate for lodestar purposes. Bouman v. Block, 940 F.2d 1211, 1235 (9th Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 640, 116 L.Ed.2d 658 (1991). Here, the appellees produced numerous affidavits declaring that the fees sought by appellees' counsel, which incorporated 1988 rates of $110 per hour for 1985 law school graduates to $235 per hour for 1969 law school graduates, in addition to $70 per hour for paralegals, were well within the bounds of the prevailing market rates that form the basis for a proper fee award. Blum at 895, 104 S.Ct. at 1547. The district court referred to several of those affidavits in granting appellees' counsel's requested rates. It pointed to the declaration of a prominent Title VII class action attorney in San Francisco that attorneys at his firm with credentials similar to those of appellees' counsel would, in 1988, have billed at rates ranging from $110 per hour for 1986 law school graduates to $250 per hour for 1969 graduates, with paralegal time billed at $50 to $85 per hour. It further noted the affidavit of an attorney at McCutchen, Doyle, Brown & Enersen, a well-respected San Francisco firm, that lawyers comparable to appellees' counsel at his firm would have billed at 1988 rates ranging from $150 per hour for 1985 graduates to $230 for 1971 graduates. It referred, finally, to an affidavit indicating that a third San Francisco firm billed at essentially the same rates. 748 F.Supp. at 1430-1431. 49 The City did not controvert this evidence below. The only evidence it presented concerning billing rates was a survey done of the California legal market as a whole which discussed a wide variety of practice areas. As the Supreme Court made clear in Blum, however, the proper reference point in determining an appropriate fee award is the rates charged by private attorneys in the same legal market as prevailing counsel, San Francisco in this instance, for work similar to that performed by such counsel, broad-based complex litigation here. The City's survey was properly dismissed by the district court as shedding no light on this matter. 50 Before this court, the City discusses several district court decisions which, in its estimation, establish that the rates claimed by appellees' counsel for work performed in the San Francisco market were excessive. In Bernardi v. Yeutter, 754 F.Supp. 743 (N.D.Cal.1990), aff'd in part and rev'd in part, 951 F.2d 971 (9th Cir.1991), the district court deemed 1988 rates ranging from $105 per hour to $145 per hour appropriate for several San Francisco lawyers who represented the prevailing party in a sex discrimination case. One of those lawyers is also involved in this case. The court pointedly noted, however, that it did not consider the case to have been complex litigation, 754 F.Supp. at 746, and therefore rejected evidence concerning the much higher rates which San Francisco attorneys charge for such litigation. By contrast, there is no claim here that the challenge to the SFFD's hiring and promotion policies did not amount to a complex class suit. 51 The City also points to the district court's decision in Bucci v. Chromalloy, 1989 W.L. 222441 (N.D.Cal.1989), aff'd, 927 F.2d 608 (9th Cir.1991) (unpublished memorandum), where fees were awarded based on rates ranging from $175 per hour for an attorney of twenty years experience to $130 per hour for an attorney of nine years experience. While those rates are somewhat lower than the ones utilized by the district court in the present case, the district court in Bucci characterized the proceedings before it as having been quite simple. This case was a straightforward discrimination action based on a flagrant pattern of abusive and insulting behavior on the part of plaintiff's supervisor. While the action vindicated significant civil rights, it did not involve complex fact patterns or novel and difficult legal questions. Indeed, plaintiff's counsel admitted in his deposition testimony that the case was not complex. Id. at The difficulty of a case and the skill required to litigate it are two of the Johnson- Kerr factors which a district court may refer to in setting an appropriate billing rate. That the district court here, in what it considered to be a demanding case, utilized higher rates in calculating its fee award than did a court which viewed the case before it to have been open-and-shut does not strike us as an abuse of discretion. 52 The City levels several other criticisms at the billing rates approved by the district court. It argues that the district court abused its discretion in applying the same hourly rate to each task performed by appellees' counsel. We noted above our agreement with the City's position insofar as it contends that appellees' counsel were not entitled to claim fees for the performance of clerical work. However, we disagree with the City's contention that the district court erred in applying a uniform rate to the legal work performed by each appellee's attorney. Private practitioners do not generally charge varying rates for the different lawyerly tasks they undertake on a given case, and we have squarely held that the district courts can act accordingly in their calculation of fee awards. [T]he use of a single average rate for each attorney is not necessarily an abuse of discretion. White v. City of Richmond, 713 F.2d 458, 461 (9th Cir.1983). 53 The City also contends that the district court should not have applied 1988 billing rates to each hour claimed by appellees' counsel regardless of the year in which the work was actually performed. This argument runs counter to a wealth of precedent. In Missouri v. Jenkins, 491 U.S. 274, 109 S.Ct. 2463, 105 L.Ed.2d 229 (1989), the Supreme Court observed that [c]learly, compensation received several years after the services were rendered--as it frequently is in complex civil rights litigation--is not equivalent to the same dollar amount received reasonably promptly as the legal services are performed, as would normally be the case with private billings. We agree, therefore, that an appropriate adjustment for delay in payment--whether by the application of current rather than historic hourly rates or otherwise--is [entirely proper]. Id. at 283-84, 109 S.Ct. at 2469. We have also approved the use of current billing rates to compensate for the delay in receiving payment. This adjustment [will] take into account lost interest and inflation. Bouman v. Block, 940 F.2d 1211, 1235 (9th Cir.1991) (citation omitted). 54 The City argues, finally, that the billing rates approved by the district court exceeded the rates charged by several of the appellees' attorneys in their private practices and therefore constituted an abuse of discretion. We rejected this argument in White v. City of Richmond, 713 F.2d 458 (1983). [W]e take judicial notice of the fact that many civil rights practitioners do not bill their clients at an hourly commercial rate. While evidence of counsel's customary hourly rate may be considered by the District Court, it is not an abuse of discretion in this type of case to use the reasonable community standard that was employed here. Id. at 461. Accord Maldonado v. Lehman, 811 F.2d 1341, 1342 (9th Cir.) (quoting White ), cert. denied, 484 U.S. 990, 108 S.Ct. 480, 98 L.Ed.2d 509 (1987). 55 One factor utilized by the district court in its rate determination, the contingent nature of the fee arrangement, requires us to remand to the district court for a redetermination of the fee. In keeping with the law of this circuit at the time it rendered its decision, the district court deemed the fact that appellees' counsel undertook this case on a contingent basis, and therefore bore the risk of nonpayment in the event of failure, to constitute a special circumstance warranting the enhancement of the lodestar fee. However, in its recent decision in City of Burlington v. Dague, --- U.S. ----, 112 S.Ct. 2638, 120 L.Ed.2d 449 (1992), the Supreme Court declared that the typical federal fee-shifting statutes, including 42 U.S.C. § 2000e-5(k), do not allow for upward adjustments to a lodestar fee on the basis that prevailing party's counsel incurred the risk of nonpayment. 56 The district court referred to the factor of contingency at two points in its fee determination. It relied on contingency to apply a multiplier to the lodestar fee; Dague requires the elimination of that multiplier. The district court also mentioned contingency as a consideration in listing the Johnson- Kerr factors which it thought relevant to establishing appropriate billing rates. 748 F.Supp. at 1427. While the Dague Court did not speak directly to this point, we believe that its rejection of contingency as a basis for multiplying a lodestar fee similarly dictates that contingency not be a factor in the setting of billing rates. Dague represents an outright rejection of contingency as a factor relevant to the establishment of a reasonable fee; it would seem to be immaterial whether the consideration of contingency occurs in deciding to apply a multiplier to the lodestar fee or in initially calculating the lodestar. 57 Reading the district court's remarks in context, we do not think it likely that the district court's rate determinations in computing the lodestar took into account at that point the contingent nature of appellee counsel's fee arrangements. Contingency was only one of a host of factors listed by the district court as items to be considered in its setting of billing rates, and was not a factor focused on by the court until it considered whether to apply a multiplier to the lodestar. The court's rate determinations appear to have rested on its assessment of the degree of complexity of the case and the prevailing legal fees in San Francisco for work of a like kind and quality as that performed here, and seem well supported in that regard. Nevertheless, we think it appropriate that on remand the district court consider whether it would arrive at the same lodestar figure in this case without taking the factor of contingency into account.