Opinion ID: 2994733
Heading Depth: 1
Heading Rank: 4

Heading: However, the district court exercised its

Text: discretion in reducing the Phase I award because of Moriarty’s limited success on that claim. Where the prevailing party has achieved only limited success, the standard lodestar method may yield an excessive award and the district court may reduce the lodestar result. See Hensley, 461 U.S. at 436. Moriarty’s final argument is that James withheld evidence of when he became the owner of Home, causing the litigation to be prolonged unnecessarily. Moriarty claims that the Phase I award should not have been reduced because of James’s tactics. However, the parties fiercely dispute whether Moriarty knew or should have known that James became the owner of Home on June 29, 1987. James claims that he gave Moriarty copies of Illinois state court probate documents, which conclusively establish when James became the owner of Home, and that Moriarty incurred fees attempting an impermissible collateral attack on the probate court’s judgment. Such contested issues of facts are left to the district court. The district court’s reduction in the Phase I award indicates that it found that James did not improperly prolong the litigation, and this finding is not clearly erroneous. In sum, the district court did not abuse its discretion in reducing the Phase I award to reflect Moriarty’s lack of success on Claim II. All of the challenges of both parties to the Phase I award have been considered and rejected. Any objections to this award that we have not considered are forfeited. On remand, absent a reason that justifies changing the law of the case, the Phase I award should not be disturbed if Moriarty prevails on Claim II. If James prevails on Claim II, then, as noted above, Moriarty cannot recover attorney’s fees for Claim II as a matter of law, and the district court must reduce the Phase I award accordingly. 2. Phase II. Both parties bring myriad challenges to the Phase II attorney’s fee order. The district court’s order awarding Phase II fees is terse, but provides sufficient explanation for most of the lower court’s determinations. We find no error in the explanations that are provided in this order. However, because we cannot be certain that the district court considered specific significant objections made by James, we vacate the award and remand to the district court. See Hensley, 461 U.S. at 437. a) Phase II attorney’s fee order. The district court entered an order regarding attorney’s fees on October 29, 1999 that dealt with the Phase II award. In this order, the court stated that the evidence the parties provided to it shows that $165 is the market rate for attorneys prosecuting ERISA collection actions. The court also stated that Moriarty could not recover the time he spent during Phase II litigating over when James became Home’s owner, because James prevailed on that claim. Moriarty argues that $165 (the rate Jacob, Burns actually charged him) is too low because the district court awarded Moriarty a higher rate for Phase I and Jacob, Burns artificially deflates its rate to favor the labor movement. He also claims that the lower court erred by focusing on only the plaintiff’s side of ERISA litigation rather than defense and plaintiff’s attorneys as a whole. Finally, he contends that the hours he requested should not have been reduced because of whatever success James may have had on Claim II. Given the evidence before it, the district court did not abuse its discretion in deciding that $165 is the hourly rate for Jacob, Burns’s work. James produced evidence that two other firms charge multiemployer union pension plans $160 per hour. More importantly, Jacob, Burns charges between $150 and $200 for all of its clients, and charged Moriarty a rate of $165. The lawyer’s regular rate is strongly presumed to be the market rate for his or her services. See Central States Pension Fund v. Central Cartage Co., 76 F.3d 114, 116-17 (7th Cir. 1996); Gusman v. Unisys Corp., 986 F.2d 1146, 1150 (7th Cir. 1993). Jacob, Burns’s claim that it and the two other union firms charge less than their market rate is unavailing. If an attorney charges most clients a high fee, and then represents a client pro bono or for a reduced fee, that attorney’s presumable market rate in the pro bono or reduced-fee case is still the attorney’s normal high rate. See Central Cartage, 76 F.3d at 117, Gusman, 986 F.2d at 1150-51. Jacob, Burns’s case differs because it does not have a high, regular rate from which it deviates to make gifts to unions. James produced evidence that Jacob, Burns’s rate to all clients in the various litigation that it undertakes is between $150 and $200 per hour; this is the firm’s presumptive market rate. See Central Cartage, 76 F.3d at 117 ([T]he union’s lawyer had a low rate for everything; that normal rate, we held, is the market rate.). James also produced the similar rates of two other firms that engage in the same kinds of litigation as Jacob, Burns, further supporting his claim that Jacob, Burns’s market rate is $165. Moriarty cites the claims of Jacob, Burns and the two other union firms that all of their market rates are depressed because of their dedication to the labor movement. However, the district court was not required to credit these assertions in the face of their actual market rates for all of their clients. The district court’s award of lower rates for Phase II than Phase I was likewise not an abuse of discretion. James produced more evidence for the Phase II attorney’s fee hearing, including Jacob, Burns’s actual billing rates and the rates of the other two union ERISA firms, than he had done at the Phase I hearing. The district court could rely on such new evidence in determining that Jacob, Burns’s rate was actually lower than what the court had awarded for Phase I. Moriarty’s claim that the district court erred by focusing only on firms that prosecute ERISA collection actions is similarly unsuccessful. The district court’s discretion in determining what is a reasonable attorney’s fee applies to its determination of what constitutes a market. Attorneys who specialize in a specific area of litigation may be paid more or less than lawyers who work in related areas of the law. Similarly, certain kinds of litigation defense attorneys may make more than plaintiff’s lawyers or vice versa. Basing fee awards on such distinctions, as long as these are reasonable and supported by the record, are left to the sound discretion of the district court. Given the evidence presented to the district court, we do not find an abuse of discretion in determining that Jacob, Burns was in a market composed of firms prosecuting ERISA collection actions. We also reject Moriarty’s final objection, that the district court erred by reducing the attorney’s fees because James prevailed on the claims of when James became Home’s owner. While the fee order’s language is imprecise, the district court did not abuse its discretion. At the time of this order, Moriarty had been awarded judgment on Claim II for approximately $2,400. This award means that Moriarty was still the prevailing party/4 on Claim II, see Farrar v. Hobby, 506 U.S. 103, 112 (1992) (holding that a plaintiff who wins any measure of damages is a prevailing party for the purposes of fee-shifting statutes) and was entitled to reasonable fees under 29 U.S.C. sec. 1132(g)(2)(D). We do not read the district court’s order to state that Moriarty was not a prevailing party on Claim II at the time of the order. The district court reduced the hours claimed by Moriarty from 418.7 to 363.6, a decrease of approximately only thirteen percent. Given that the district court apportioned Jacob, Burns’s time evenly between Claims I and II in reducing the Phase I award, and that the district court could not have awarded any hours on Claim II if James was the prevailing party (as explained above), the district court was only reducing the hours claimed by Moriarty because of a lack of success rather than stating that Moriarty had not prevailed on Claim II. The district court did not abuse its discretion in making such a reduction given Moriarty’s limited success on Claim II at the time of the fee order. b) Settlement offer. James claims that he made a settlement offer of $43,000 on December 30, 1997./5 Moriarty contends that James did not comply with the technical requirements of Fed.R.Civ. P. 68, but appears to acknowledge that James did in fact make a settlement offer for $43,000 that was rejected by Moriarty. The district court’s Phase II fee order does not mention this attempted settlement. Substantial settlement offers should be considered by the district court as a factor in determining an award of reasonable attorney’s fees, even where Rule 68 does not apply. See Sheppard v. Riverview Nursing Center, Inc., 88 F.3d 1332, 1337 (4th Cir. 1996). Attorney’s fees accumulated after a party rejects a substantial offer provide minimal benefit to the prevailing party, and thus a reasonable attorney’s fee may be less than the lodestar calculation. See Marek v. Chesny, 473 U.S. 1, 11 (1985). Determining whether an offer is substantial is left in the first instance to the discretion of the district court. Nevertheless, an offer is substantial if, as in this case, the offered amount appears to be roughly equal to or more than the total damages recovered by the prevailing party. In such circumstances, a district court should reflect on whether to award only a percentage (including zero percent) of the attorney’s fees that were incurred after the date of the settlement offer. The district court must only consider the substantial settlement offer; it need not reduce the lodestar calculation because of the offer. We stress that a substantial offer is only one of the factors that a district court should evaluate in making an attorney’s fee award, and (absent an offer complying with Rule 68 where that Rule applies) is not necessarily determinative. The district court may evaluate the settlement offer and decide that under the circumstances of a particular case an unadjusted lodestar method still provides a reasonable attorney’s fee. However, because the Phase II fee order does not mention James’s offer and so we cannot determine whether it was a factor in the award, we remand to the district court to consider the settlement offer in determining a reasonable Phase II attorney’s fee. See Fleming v. County of Kane, 898 F.2d 553, 563-64 (7th Cir. 1990). c) Proportionality. James claims that the Phase II fees awarded are unreasonable because these are disproportionately large compared to the amount of damages claimed and the amount of damages actually recovered by Moriarty. We have not formulated any mechanical rules requiring that a reasonable attorney’s fee be no greater than some multiple of the damages claimed or recovered. See Connolly v. National Sch. Bus Serv., Inc., 177 F.3d 593, 597 (7th Cir. 1998). However, proportionality concerns are a factor in determining what a reasonable attorney’s fee is. See City of Riverside v. Rivera, 477 U.S. 561, 585-86 & n.3 (1986) (opinion of Powell, J.); Perez v. Z Frank Oldsmobile, Inc., 223 F.3d 617, 625-26 (7th Cir. 2000); Cole v. Wodziak, 169 F.3d 486, 488 (7th Cir. 1999). The Phase II fee order does not provide any indication that proportionality concerns were considered in determining the attorney’s fees awarded in this case, despite the size of the total amount of attorney’s fees compared to the amount of damages claimed and the amount of damages recovered by Moriarty. While such disproportionality is not determinative and this court has approved attorney’s fees many times the amount of damages recovered, see Connolly, 177 F.3d at 597, the district court’s fee order should evidence increased reflection before awarding attorney’s fees that are large multiples of the damages recovered or multiples of the damages claimed./6 Because the Phase II fee order does not provide any indication that these concerns were factored into the attorney’s fee award, we remand for such evaluation. See Fleming, 898 F.2d at 563-64. On remand, the district court should consider the amount of attorney’s fees already awarded in Phase I in determining a reasonable amount for Phase II, though the Phase I award should not be adjusted except as aforementioned. We emphasize that any disproportionality that may be present in this case does not mean that the amount of attorney’s fees awarded for Phase II was an abuse of discretion, but only that the district court should consider such proportionality factors in exercising its discretion in fashioning a reasonable attorney’s fee. d) James’s other objections. James raises a number of less significant objections to the district court’s fee order, such as that Jacob, Burns’s time entries are vague or that Jacob, Burns billed too much time working on the appeal in light of the firm’s experience. These issues are left to the sound discretion of the trial court and, unlike in the case of substantial settlement offers or disproportionality, the district court need not demonstrate in a fee order that it has considered each individual objection. See EEOC v. AIC Sec. Investigations, Ltd., 55 F.3d 1276, 1288 (7th Cir. 1995). After a review of the record, we find that the district court acted within its discretion in rejecting James’s claims on these issues. As with Phase I, we have adjudicated all of the parties’ objections to the Phase II fee award. The Phase II fee award may be adjusted downward after the district court considers James’s settlement offer and the possible disproportionality of the award. In addition, if James prevails on Claim II, the district court must ensure that the Phase II award compensates Moriarty only for the time spent on Claim I. Any reason for changing the Phase II award besides these three is either forfeited or barred by the law of the case.