Opinion ID: 421654
Heading Depth: 1
Heading Rank: 5

Heading: Bonus

Text: 53 As a final matter, the state challenges the $411,864.11 bonus that the District Court added to its lodestar figure. The District Court awarded this sum in light of the risk and complexity of the case, the results achieved and the superior advocacy of counsel. 455 F.Supp. at 342. In previous decisions, we have acknowledged a district court's authority to make upward adjustments in fee awards to compensate counsel for such factors, see Cohen v. West Haven Board of Police Commissioners, supra, 638 F.2d at 505; Grinnell II, supra, 560 F.2d at 1098, though we have not hesitated to scrutinize such bonuses and on occasion to disallow them, see Beazer v. New York City Transit Authority, supra, 558 F.2d at 100. 54 We agree with Judge Bartels that plaintiffs' counsel deserved some additional fee in recognition of the high quality of their work and the inherent complexity of the litigation. The Willowbrook litigation has undoubtedly been an extraordinarily difficult case for all concerned. In its early stages, the case raised novel questions of constitutional interpretation. In later years, when the litigation focused on the enforcement of the consent decree, counsel have had to contend with equally complex issues concerning the litigation of institutional reform. Throughout the litigation the attorneys from the Civil Liberties Union and the Legal Aid Society have provided their clients with exemplary service. However, though we share the District Court's positive assessment of the quality of service rendered, we do not agree that the skill of counsel and the complexity of the issues merited an upward adjustment to the extent of 25% of the lodestar figure, as Judge Bartels awarded. In a case of this sort, we think a 10% adjustment sufficiently recognizes the exemplary nature of the services rendered. 55 Moreover, we think it entirely inappropriate for the District Court to have allowed plaintiffs an additional 25% bonus for work done before the consent decree was signed. In Judge Bartel's view, this additional bonus was necessary largely to reward plaintiffs' attorneys for commit[ting] substantial time and resources when ... the prospects of success were speculative. 544 F.Supp. at 343. Although a component of a bonus for risk of failure may be appropriate in some cases to entice private firms to undertake difficult cases in which victory is uncertain, we believe that the promise of such rewards is not needed to induce non-profit organizations like the Legal Aid Society and the Civil Liberties Union to take on such cases. These organizations exist to represent groups like the Willowbrook class, with constitutional claims at the cutting edge of the law. We join those courts that have found it unreasonable to add contingency bonuses to fee awards for non-profit law offices. See McManama v. Lukhard, 464 F.Supp. 38, 43 (W.D.Va.1978), aff'd, 616 F.2d 727 (4th Cir.1980); Cole v. Tuttle, 462 F.Supp. 1016, 1019 (N.D.Miss.1978); McCormick v. Attala County Board of Education, 424 F.Supp. 1382, 1388 (N.D.Miss.1976). 56 The result of our review of the fee award is a reduction of the lodestar figure from the $978,052, awarded by the District Court, to $558,175, to which we add a reduced bonus of 10% or $55,817, for a total fee award of $613,992, exclusive of traditional taxable costs. On remand the District Court will enter a judgment awarding plaintiffs attorney's fees of $613,992, unless plaintiffs undertake to demonstrate to the District Court that their hourly costs exceeded the $50 and $75 per hour rates we have allowed for the pertinent time periods. In addition, the District Court will recalculate its award of traditional taxable costs to eliminate the items that plaintiffs now concede are not compensable. 57 To summarize our rulings for the guidance of the bar in future cases, we have ruled as follows: 58 1. All applications for attorney's fees, whether submitted by profit-making or non-profit lawyers, for any work done after the date of this opinion should normally be disallowed unless accompanied by contemporaneous time records indicating, for each attorney, the date, the hours expended, and the nature of the work done. 59 2. Attorney's fees awarded to non-profit law offices should be calculated at billing rates of private attorneys of comparable skill and experience, subject to a maximum break point rate to be selected by the district judge in each case at the point above which private billing rates include such a significant profit component and an overhead cost so significantly above that of non-profit law offices that use of such rates would produce a windfall for such offices. Non-profit law offices should not receive fees calculated at rates above the selected break point unless necessary to secure reimbursement of costs. 60 3. Attorney's fees awarded to non-profit law offices should not be reduced to reflect the extent of the office's budget reimbursed by public funding. 61 4. Attorney's fees for profit-making and non-profit lawyers should be based on current rates when the legal services were rendered within a two- or three-year period, but in protracted cases, rates relevant to the early and later stages of the litigation should be used. 62 5. Bonuses awarded to non-profit law offices, when awarded at all, should not exceed a modest percentage of the lodestar amount and should not include any increment for the uncertain risk of achieving success in the litigation. 63 The order of the District Court is reversed and the cause is remanded for further proceedings consistent with this opinion.