Court Opinion

ID: 9491386
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:12:46.302133+00
Date Added: 2024-06-11T17:54:42.596861
License: Public Domain

GARTH, Circuit Judge,
dissenting.
The district court utilized a novel procedure to determine the amount of attorneys’ fees to which Appellant PEDF, as the prevailing party, was entitled. Neither PEDF nor the School District ever objected to this procedure, although they were afforded ample time and opportunity to do so.' Notwithstanding this fact, PEDF now appeals the use of the district court’s procedure and the majority reverses.
I.
I must dissent from the opinion of the panel majority for two (2) fundamental reasons.
First, PEDF acquiesced to the district court’s procedure, and therefore waived its right to raise this issue on appeal. PEDF admittedly understood the district court’s “either/or.” and “without modification” order, and nevertheless, strategically chose not to object. The authority cited by the majority requiring a lodestar calculation has no relevance to this case. Here, both parties had waived all objection to the district court’s order. Viewed in this light, I do not feel that the majority has satisfactorily explained why PEDF should be permitted to recant its previous acquiescence of the district court’s protocol, particularly where no substantial rights of any parties have been implicated.
Second, the majority has not explained why cases where the calculation of the lodestar amount is disputed should govern cases such as this case where it is the procedure giving rise to the attorneys’ fee award itself — and not the calculation pursuant to the lodestar formula — that is at issue. The majority has cited no authority holding that procedures of this kind (in this case, the district court’s “either/or” and “without modification” order of December 2, 1996) are illegal. Parties can agree to an attorneys’ fee award, and the majority acknowledges that such agreements are not governed by the lodestar calculus. The majority fails to explain, however, why the parties cannot also agree to the procedure that the district court employs in determining those fees.
By holding that the lodestar formula must be employed even in the absence of an objection, the majority effectively holds that the lodestar analysis must be utilized in every attorneys’ fee application that comes before the district courts of this Circuit. Thus, according to the majority, parties can agree to a fee outside the reach of the lodestar, but they cannot agree to an alternative procedure to determine those fees.
As I believe this is no precedent for this unjustified and far-reaching holding, I respectfully dissent.
II.
The facts are simple and straightforward:
(1) The parties reached a settlement agreement after one year of litigation, and memorialized their agreement in a consent decree. The consent decree did not resolve the issue of attorneys’ fees, but instead left that issue for the district court to address.
(2) On December 2,1996, the district court issued an order directing each party to submit its proposed findings of fact and conclusions of law regarding the issue of attorneys’ fees. That order provided:
*236[E]ach party shall submit a proposed order which shall set forth, in specific detail, its proposal for completely resolving this issue. The court will adopt as its own the proposed findings and sign, without modification, the one proposed order which, in the judgment of the court, is the most reasonable under the circumstances.
Order, Dec. 2,1996 (emphasis in original).
(3) On February 13, 1997, the district court adopted without modification the School District’s proposed findings.
(4) Although nearly two and a half months had elapsed from the time the district court established the protocol to which both parties acquiesced and the time the court announced its decision, at no time did either party object to the district court’s order.
(5) On February 24, 1997, PEDF filed a' Motion for Reconsideration, but in that motion still did not object to the “either/or” and “without modification” protocol that the district court had adopted.
(6) During oral argument,1 counsel for PEDF conceded that he understood the district court’s December 2, 1996, order as proposing an “either/or” situation: “either (the district court) was going to accept our proposed findings or he was going to accept the School District’s.” According to counsel for PEDF, “there was no question about that.”
III.
I believe that PEDF has waived its right to pursue this appeal on the basis of the procedure utilized by the district court in determining attorneys’ fees. At oral argument, counsel for PEDF conceded that he understood the district court’s adopted procedure and the ramifications of that procedure. PEDF acknowledged that “there was no question” that the district court would either accept PEDF’s proposed findings and fee award or it would accept the School District’s proposed findings and fee award. Thus, PEDF made a strategic decision not to object to the district court’s proposed procedure in the hope that the district court might accept its — PEDF’s—proposal without modification instead of accepting the School District’s.
That PEDF’s deliberate choice not to object to the district court’s procedure subsequently turned out to have been disadvantageous cannot be a basis for reversing the district court’s decision. See Bivens Gardens Office Bldg., Inc. v. Barnett Banks, 140 F.3d 898 (11th Cir.1998) (holding that plaintiffs waived the issue of the district court’s recu-sal when the plaintiffs strategically decided not to raise the recusal issue before trial despite their awareness of facts upon which the motion for recusal would have been based). Indeed, it was only after the district court adopted the School District’s proposed findings that PEDF-fybr the first time— complained by filing a Motion for Reconsideration, and even in that motion PEDF did not identify the district court’s procedure as the gravamen of its complaint. Quite simply, by not objecting, PEDF waived its right to appeal the district court’s attorneys’ fee procedure. See Fleck v. KDI Sylvan Pools, Inc., 981 F.2d 107, 116 (3d Cir.1992).
In Continental Casualty Co. v. D’Andrea, Inc., 150 F.3d 245 (3d Cir.1998), this Court recently upheld a magistrate judge’s attorney fee sanction of $38,000 where no objection or appeal to the district court had been taken by counsel. In Continental, the magistrate judge required the defendant, D’Andrea, to pay his opposing party’s attorneys’ fees and costs for additional discovery as a condition to permitting D’Andrea to amend his answer nearly two (2) years after the original answer had been filed.
D’Andrea did not object to the magistrate judge’s condition, and at no time did he raise the issue for review before the district court. In speaking for the Court, Judge Rosenn concluded that in the absence of an objection, D’Andrea accepted the condition imposed upon him in exchange for the privilege to amend his answer. See id. at 232. Judge Rosenn reasoned, as I do now, that the failure to object for strategical reasons constituted a waiver. See id. (“Presumably, [D’Andrea’s counsel] reasoned that, even *237with the imposition of the attorneys’ fees and costs, it was strategic for his client to pay them under the circumstances.”)
Furthermore, even if D’Andrea had not accepted the magistrate judge’s condition, in terms as applicable to the case at hand as they were to Continental, Judge Rosenn commented that this Court should not interfere with a lower court ruling in the absence of an objection because such procedures
would allow a party to sandbag the district court and other parties by allowing or inviting the court to make an error and then springing the issue on the other party on appeal. See 9A Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure § 2472, at 93-95 (1995). Explicit opposition to or an objection on the record to a proposed order permits the court to consider the position of the opposing party and modify, or even possibly abandon, the order in light of the arguments raised.
Continental, 150 F.3d at 252 (citations omitted).
In the present case, PEDF knew and accepted the fact that the district court was not going to engage in any adjustments or make any of its own computations when determining the appropriate fee in this case, as it very well might have done if PEDF had objected to the district court’s procedure and the court had then employed a traditional lodestar approach under Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). Given the district court’s explicit language in its December 2, 1996 order, and counsel for PEDF’s acknowledged understanding of that language, it was incumbent upon PEDF to make its position known at that time and object to the “either/or” and “without modification” procedure if it opposed such a protocol. It did not. The benefit of hindsight cannot change this procedural infirmity.
Furthermore, the majority has turned a blind eye toward the strict standards that a litigant must satisfy to seek review under our “plain error” jurisprudence. Under the plain error standard, three requirements must be met: (1) there must be an actual error — a deviation from or violation of a legal rule; (2) the error must be plain — i.e., clear and obvious under current law; and (3) the error must affect substantial rights. See Walden v. Georgia-Pac. Corp., 126 F.3d 506, 520-21 (3d Cir.1997), cert. denied, — U.S. -, 118 S.Ct. 1516, 140 L.Ed.2d 669 (1998) (citing United States v. Olano, 507 U.S. 725, 732-34, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993)); see also Fleck, 981 F.2d at 116 (stating that the error must be “fundamental and highly prejudicial” that results' in a “miscarriage of justice” to warrant a reversal when party did not object during proceeding below). It has been our practice to exercise our power to reverse for plain error sparingly. See Walden, 126 F.3d at 520.
In this ease, not only was there no error— let alone plain error — in the district court’s choice of protocol, as I discuss below, but the majority has not explained how the district court’s order affected PEDF’s “substantial rights” or resulted in a “miscarriage of justice.” Instead, the majority has by-passed this critical element of “plain error” review by announcing that the district court’s alleged error “jeopardized the integrity of the proceeding.” Majority Op. at 234. In so stating, the majority has failed to appreciate the fact that jeopardizing the integrity of a proceeding is only meaningful in the context of the substantial rights that were supposedly prejudiced.
In this case, PEDF received $20,414.62, instead of the $70,282.09 it had requested. Apart from the fact that no one can predict that PEDF will receive a different fee award after the majority’s remand,2 the majority cites no authority holding that the nature of attorneys’ fees and the amounts involved here implicate PEDF’s substantial rights and result in manifest injustice such that we should exercise our review under the plain error doctrine. Indeed, I am compelled to point out that the majority has cited no authority at all which would in any way repudiate the protocol utilized by the district court. Accordingly, I would hold that the issué has been waived. ’
*238IV.
My second basis of contention with the majority stems from the fact that there is simply nothing illegal or improper about the procedure the district court employed for determining attorneys’ fees. Citing only in-apposite attorneys’ fee appeals — inapposite because as noted above, none of the eases cited in the majority opinion involve a dispute over the district court’s procedure — the majority of this Court reverses the district court for implementing a procedure that has never been disapproved by any court. While the majority has acknowledged that where the parties have agreed to a particular attorneys’ fee, their agreement need not follow nor comply with the lodestar approach delineated in Hensley v. Eckerhart and its progeny, it has refused to recognize that PEDF’s failure to object to the protocol ordered in this case was tantamount to an acceptance of the outcome of that procedure. That acceptance by PEDF and the School District is not one whit different in substance than an agreement by the parties to a particular fee arrangement.
In the ease before us, the majority has cited and discussed only eases where the parties have contested the calculation of the lodestar, not the use of the lodestar formula itself. See Pennsylvania v. Delaware Valley Citizens’ Council, 478 U.S. 546, 106 S.Ct. 3088, 92 L.Ed.2d 439 (1986) (contesting lodestar calculation based on the enhancement of a fee for superior performance by opposing counsel); Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983) (reversing district court’s lodestar calculation because court failed to consider the relationship between the success of the prevailing party and the amount of the fees granted); Public Interest Research Group v. Windall, 51 F.3d 1179 (3d Cir.1995) (contesting district court’s lodestar calculation applying negative multiplier, using incorrect market as basis for hourly rate, failing to deduct duplicative and excessive time). The calculation of the lodestar, however, has nothing to do with cases where the parties have either consented to a particular fee (i.e., a fee agreement) or have agreed to a particular formula utilized by a district court in order to determine that fee, such as the formula adopted by the district court here.
When parties settle the issue of outstanding fees, it is without our realm to instruct them how to arrive at a mutually acceptable amount. If the amount of attorneys’ fees is accepted by all parties, no case in controversy exists for us to exercise judicial oversight or judicial review regardless of how those fees were ultimately determined or what procedure or principle, if any, the parties employed in their calculations. When the parties consent or stipulate to a fee award, they are necessarily consenting to the procedure employed to derive that award even though that procedure may not have involved a traditional lodestar analysis. It is not within our province to question the consensual nature of that agreement.
By the same token, there is no difference between the protocol that was employed by the district court in this case without objection — i.e., accepting one of the party’s proposed findings without modification — and the means by which both parties typically settle or agree upon attorneys’ fees. In the latter instance where the parties agree on the amount of attorneys’ fees to be awarded to the successful party, the parties rarely, if ever, employ a traditional lodestar calculation. Moreover, in each instance — where no objection is raised to a particular method proposed by the district court for its fee determination, or where all parties agree on the amount of fees to be awarded' — no lodestar analysis is indicated, nor, contrary to the majority’s assertions, must it be utilized. In both situations — agreement to the procedure or agreement to the fees themselves — the award is valid irrespective of the protocol used and must be upheld.3
*239Yet, the Court has now held that unless the lodestar approach is used, any attorneys’ fee determination made by the district court is illegal. Not only does this conclusion fail to account for those cases where the parties have agreed to a particular sum and have not based that sum upon the lodestar — which the majority acknowledges is clearly acceptable — but as I have pointed out it also runs counter to the spirit of innovation that this Court has encouraged district courts to nurture when faced with varying situations.4 See, e.g., Krell v. Prudential Ins. Co. (In re: Prudential Ins. Co.), 148 F.3d 283 (3d Cir.1998) (upholding as “appropriate” and “innovative” the district court’s novel use of a bifurcated fee structure in large, nationwide class action suit). Indeed, as I have pointed out, the majority would have preferred that the parties had reached a fee agreement in this case, irrespective of whether that settlement would have been based upon the lodestar calculation. See n. 3, supra.5
Despite the majority’s disapprobation, the protocol employed by the district court— choosing one of the parties’ proposals without modification — is neither illegal nor radical. Such a dispute-resolving procedure has been used in major league baseball salary arbitra-tions with great success for nearly 25 years. See Roger I. Abrams, Legal Bases: Baseball and the Law 87-89 (Temple Univ. Press 1998). Under baseball’s salary arbitration scheme, a neutral arbitrator
selects either the final demand of the eligible player or the final offer of the employing [baseball team]. The arbitrator may not mediate or compromise.. .A greedy player who sets his demand too high or a stingy club that makes an offer too low is likely to lose....
Id. at 87-88 (emphasis added). The author explains that not only does this system encourage settlement between the parties, but it also has the effect of bringing the salary offer and the player’s demand closer together, as both sides attempt to predict how the arbitrator will rule. See id. at 88. Hence, just as district courts have been encouraged to employ alternative dispute resolution techniques, so too should they be encouraged to look to other disciplines and to employ other labor-saving techniques so as to adopt efficient, time-saving, and effective means of disposing of controversies and disputes.
Thus, while I agree that a district court should employ a traditional lodestar analysis when the procedure or standard is disputed, I cannot agree that the lodestar calculation must be employed in every attorney fee determination that arises before the district court. Our jurisprudence is sufficiently flexible to allow for varied approaches, depending upon the circumstances of the case and the will of the parties. In my view, parties may by agreement or without objection, as they did here, utilize an alternative procedure for calculating fees without offending our jurisprudence.
V.
In conclusion, I fear that the ramifications of this Court’s decision transcend the issue of attorneys’ fees and may have the effect of *240stifling innovative and non-traditional approaches to case and issue management in the district courts. If district courts cannot inaugurate a new procedure without the interference of this Court — a procedure, I might, add, that has never been declared illegal or improper by this or any other court until today — then we will be guilty of discouraging the development of modern litigation techniques and practices in the face of ever increasing dockets and the sky-rocketing expense of litigation. By reversing the district court for using a different and novel protocol to which the parties acquiesced, the majority's decision may have the unfortunate effect of chilling district court innovation and efficient ease management.
I suggest that the majority here has turned this Court into a micro-manager. In so doing, it has unjustifiably permitted PEDF a “second bite at the apple” without PEDF ever having made known any objection to the district court’s protocol. Accordingly, I would affirm the district court’s February 13,1997, order.
Because the majority has held otherwise, I respectfully dissent.

. These concessions were made during the first oral argument held on January 21, 1998. The panel was reconstituted and a second argument held after Judge Lewis fell ill.

. We defer to the district court's discretion in making fee awards. See Public Interest Research Group, Inc. v. Windall, 51 F.3d 1179, 1184 (3d Cir.1995).

. Similarly, had the district court informally suggested that PEDF and the School District meet outside of the district court’s chambers and seek to settle the issue of attorneys' fees without court intervention, any agreed upon amount would have been valid despite the fact that traditional lodestar principles were not involved. The majority does not object to such an agreement, as the majority acknowledges that the lodestar approach is not always used in determining attorneys’ fees:
*239[t]he instances in which courts may not have followed the lodestar approach have been, as far as we know, instances where the parties have reached an agreement as to the amount of the fee. Regrettably, such a resolution was not reached in this case.
Majority Op. at 233. Furthermore, the majority concludes by stating that "[i]t would be preferable were the parties to resolve the remaining issue by negotiation or mediation," id. at 233, neither of which is conditioned upon a lodestar calculus. See also Hensley, 461 U.S. at 437, 103 S.Ct. 1933 ("Ideally, of course, litigants will settle the amount of a fee.”)

. Furthermore, there is authority to support a court’s use of an "either/or" procedure in making a determination. See, e.g., Mobil Oil Exploration Co. v. Federal Energy Regulatory Comm'n, 814 F.2d 998 (5th Cir.1987), op. clarified by Mobil Oil Exploration Co. v. Federal Energy Regulatory Comm’n, 814 F.2d 1001 (5th Cir.1987) (holding that venue was properly determined by the toss of a coin where the same proceeding was instituted in two circuits at the same).

. In light of the district court’s “either/or” and "without modification” protocol, I make no comment about the lodestar's applicability to this case. I recognize, however, that the district court was of the view that it had adhered to a lodestar calculation, accepting PEDF’s rate and hours up until January 31, 1995, the date that the district court determined the School District had been in compliance with the permit and effluent emissions allowed under its permit.