Court Opinion

ID: 3052410
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:42:13.457652+00
Date Added: 2024-06-11T11:41:16.017924
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

MARIO R. MORENO,                         
               Plaintiff-Appellant,
               v.
CITY OF SACRAMENTO; MAX                          No. 06-15021
FERNANDEZ; JOSHUA PINO; JOHN                       D.C. No.
VANELLA,                                        CV-01-00725-
            Defendants-Appellees,                 DFL/DAD
              and                                 OPINION
VOLUNTARY DISPUTE RESOLUTION
NEUTRAL,
                        Defendant.
                                         
        Appeal from the United States District Court
           for the Eastern District of California
          David F. Levi, District Judge, Presiding

           Argued & Submitted December 5, 2007
           Submission Deferred December 5, 2007
                  Submitted July 28, 2008
                 San Francisco, California

                       Filed July 28, 2008

Before: Alex Kozinski, Chief Judge, Robert E. Cowen* and
          Michael Daly Hawkins, Circuit Judges.

               Opinion by Chief Judge Kozinski

   *The Honorable Robert E. Cowen, Senior United States Circuit Judge
for the Third Circuit, sitting by designation.

                               9517
                MORENO v. CITY OF SACRAMENTO                9521
                          COUNSEL

Andrea M. Miller, Nageley, Meredith & Miller, Inc., Sacra-
mento, California, for the appellant.

Thomas A. Cregger, Randolph Cregger & Chalfant LLP, Sac-
ramento, California, for the appellees.

                          OPINION

KOZINSKI, Chief Judge:

  We consider various issues pertaining to the district court’s
award of attorneys’ fees under 42 U.S.C. § 1988.

                             Facts

   Moreno sued the City of Sacramento and several other
defendants, alleging that they violated his civil rights by seiz-
ing and destroying his property without due process. After
lengthy pre-trial proceedings and a previous appeal, a jury
awarded Moreno $717,000 in compensatory and punitive
damages. Moreno’s principal trial counsel, Andrea Miller,
sought an award of attorneys’ fees under 42 U.S.C. § 1988.
Miller requested $704,858.07 for herself and her staff, includ-
ing compensation for 1,973.6 hours of her own time, at a rate
of $300 per hour. This request excluded around 9 percent of
the total hours actually spent on the case.

   The district court reduced the hours further, concluding that
around a quarter to a third of the time spent on research,
appeal and trial preparation and half the time spent on investi-
gation was unnecessary. The district court also reduced Mil-
ler’s hourly rate to that of a paralegal for the time she spent
summarizing depositions. Finally, the district court reduced
Miller’s hourly rate from $300 to $250 an hour. The resulting
9522                MORENO v. CITY OF SACRAMENTO
award was $428,053.00, around 40 percent lower than
requested.

                                 Analysis

   Lawyers must eat, so they generally won’t take cases with-
out a reasonable prospect of getting paid. Congress thus rec-
ognized that private enforcement of civil rights legislation
relies on the availability of fee awards: “If private citizens are
to be able to assert their civil rights, and if those who violate
the Nation[’s] fundamental laws are not to proceed with
impunity, then citizens must have the opportunity to recover
what it costs them to vindicate these rights in court.” S. Rep.
No. 94-1011, at 2 (1976), as reprinted in 1976 U.S.C.C.A.N.
5908, 5910.1 At the same time, fee awards are not negotiated
at arm’s length, so there is a risk of overcompensation. A dis-
trict court thus awards only the fee that it deems reasonable.
See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). The cli-
ent is free to make up any difference, but few do. As a practi-
cal matter, what the district court awards is what the lawyer
gets.

   [1] In making the award, the district court must strike a bal-
ance between granting sufficient fees to attract qualified coun-
sel to civil rights cases, City of Riverside v. Rivera, 477 U.S.
561, 579-80 (1986), and avoiding a windfall to counsel, see
Blum v. Stenson, 465 U.S. 886, 897 (1984) (quoting S. Rep.
No. 94-1011, at 6 (1976)). The way to do so is to compensate
counsel at the prevailing rate in the community for similar
work; no more, no less.
   1
     Congress emphasized the importance of attorneys’ fees in cases seek-
ing injunctive relief, where there is no monetary light at the end of the liti-
gation tunnel: “If successful plaintiffs were routinely forced to bear their
own attorneys’ fees, few aggrieved parties would be in a position to
advance the public interest by invoking the injunctive powers of the Fed-
eral courts.” S. Rep. No. 94-1011, at 3 (1976), as reprinted in 1976
U.S.C.C.A.N. 5908, 5910.
                MORENO v. CITY OF SACRAMENTO                9523
   [2] In this case, the district court used the lodestar method
to calculate fees. Under this method, a district court must start
by determining how many hours were reasonably expended
on the litigation, and then multiply those hours by the prevail-
ing local rate for an attorney of the skill required to perform
the litigation. See Blum, 465 U.S. at 895. The district court
may then adjust upward or downward based on a variety of
factors. Hensley, 461 U.S. at 434. The number of hours to be
compensated is calculated by considering whether, in light of
the circumstances, the time could reasonably have been billed
to a private client. Id. We review the district court’s calcula-
tion of the reasonable hours and hourly rate for abuse of dis-
cretion. See Camacho v. Bridgeport Fin., Inc., 523 F.3d 973,
977-78 (9th Cir. 2008).

   [3] When the district court makes its award, it must explain
how it came up with the amount. The explanation need not be
elaborate, but it must be comprehensible. As Hensley
described it, the explanation must be “concise but clear.” 461
U.S. at 437 (emphasis added). Where the difference between
the lawyer’s request and the court’s award is relatively small,
a somewhat cursory explanation will suffice. But where the
disparity is larger, a more specific articulation of the court’s
reasoning is expected. See Bogan v. City of Boston, 489 F.3d
417, 430 (1st Cir. 2007). We review the legal principles
underlying the fee award de novo. Ferland v. Conrad Credit
Corp., 244 F.3d 1145, 1148 (9th Cir. 2001).

   [4] 1. Reduction for Duplicative Work: Plaintiff
requested fees for 227.9 hours of research, and the district
court awarded fees for 171 hours. The district court found the
hours requested to be excessive, suggesting that some of the
research was duplicative because counsel spent substantial
time preparing motions and briefs dealing with similar issues.

  The court may reduce the number of hours awarded
because the lawyer performed unnecessarily duplicative work,
but determining whether work is unnecessarily duplicative is
9524            MORENO v. CITY OF SACRAMENTO
no easy task. When a case goes on for many years, a lot of
legal work product will grow stale; a competent lawyer won’t
rely entirely on last year’s, or even last month’s, research:
Cases are decided; statutes are enacted; regulations are pro-
mulgated and amended. A lawyer also needs to get up to
speed with the research previously performed. All this is
duplication, of course, but it’s necessary duplication; it is
inherent in the process of litigating over time. Here, there was
a previous appeal (of the district court’s grant of summary
judgment) which would have added to the delay and rendered
much of the research stale. One certainly expects some degree
of duplication as an inherent part of the process. There is no
reason why the lawyer should perform this necessary work for
free.

  [5] It must also be kept in mind that lawyers are not likely
to spend unnecessary time on contingency fee cases in the
hope of inflating their fees. The payoff is too uncertain, as to
both the result and the amount of the fee. It would therefore
be the highly atypical civil rights case where plaintiff’s law-
yer engages in churning. By and large, the court should defer
to the winning lawyer’s professional judgment as to how
much time he was required to spend on the case; after all, he
won, and might not have, had he been more of a slacker.

   [6] The district court has a greater familiarity with the case
than we do, but even the district court cannot tell by a cursory
examination which hours are unnecessarily duplicative. Nev-
ertheless, the district court can impose a small reduction, no
greater than 10 percent—a “haircut”—based on its exercise of
discretion and without a more specific explanation. Here,
however, the district court cut the number of hours by 25 per-
cent, and gave no specific explanation as to which fees it
thought were duplicative, or why. While we don’t require the
explanation to be elaborate, it must be clear, and this one
isn’t. Plaintiff’s counsel had already cut her fees by 9 percent,
so an additional 25 percent cut would amount to over one
third. The court has discretion to make such an adjustment,
                 MORENO v. CITY OF SACRAMENTO                 9525
but we cannot sustain a cut that substantial unless the district
court articulates its reasoning with more specificity. We there-
fore conclude that the district court’s explanation is insuffi-
cient to sustain a 25 percent cut based on duplication.

   [7] Plaintiff also requested fees for 266.6 hours of prepara-
tion for the first two trial dates, July 2002 and February 2005,
without indicating how much time was spent preparing for
each date. Plaintiff requested fees for 340.7 hours for the third
trial date, May 2005. The district court awarded the full hours
for the third trial date, but reduced the hours for the first two
dates by half, to 133.3. As with the research hours, the cut
here is substantial, amounting to 20 percent of the total fees
billed for trial, in addition to the 9 percent already cut by
plaintiff’s counsel.

   The district court did not explain the necessity or degree of
the cut, other than to say that the amount of time plaintiff’s
counsel spent was “excessive.” We also find it curious—and
somewhat arbitrary—that the district court simply cut the
costs of preparation for the first two trials by 50 percent. The
first two trial dates were three years apart; the time spent pre-
paring for the first trial would be of relatively little use by the
time the case was actually presented to the jury, so it is diffi-
cult to understand how a cut of those fees would be justified,
much less a cut of a full 50 percent. The second and third trial
dates were only about three months apart, so it is possible
there was some duplication. After all, duplication always hap-
pens when a task is started, stopped and then taken up again
later. But necessary duplication—based on the vicissitudes of
the litigation process—cannot be a legitimate basis for a fee
reduction. It is only where the lawyer does unnecessarily
duplicative work that the court may legitimately cut the hours.

  Of course, the court might have some specific reason for
believing that work is excessive or duplicative, but it must
explain why. We cannot sustain a 50 percent cut, over and
above the 9 percent cut plaintiff’s counsel already imposed on
9526            MORENO v. CITY OF SACRAMENTO
herself, without a clear explanation that we can review. The
opaque explanation provided here is an insufficient basis for
the district court’s Draconian cut.

   [8] The district court awarded fees for 180 hours of time
spent preparing the earlier appeal. Plaintiff requested 269.3
hours. We “look more closely” at fee awards involving
appeals, Suzuki v. Yuen, 678 F.2d 761, 762-63 (9th Cir. 1982),
and can find no justification for a cut of 33 percent, on top of
plaintiff’s counsel’s own cut. The district court noted that
plaintiff’s counsel spent twice as long on the appeal than on
the summary judgment, but this does not mean the additional
time spent on appeal was unjustified; after all, plaintiff lost
claims at summary judgment that he won on appeal. More
fundamentally, preparing summary judgment motions and
appeals are not commensurate tasks, though they have some
elements in common. What matters is whether spending more
time winning on appeal than losing on summary judgment
was an imprudent use of hours. The district court points to
nothing to support the conclusion that it was.

   Cutting fees for “duplication of effort” appears to have
been an easy way for the district court to reduce an award it
may have felt was too high. But if the court believes the over-
all award is too high, it needs to say so and explain why,
rather than making summary cuts in various components of
the award. While we accord deference to the district court’s
explanation of why a requested fee is excessive, we can only
do so if the district court provides an explanation that we can
meaningfully review. Findings of duplicative work should not
become a shortcut for reducing an award without identifying
just why the requested fee was excessive and by how much.
As the reduction passes well beyond the safety zone of a hair-
cut, which plaintiff’s counsel seems to have given herself
already, the district court’s justification for the cuts must be
weightier and more specific.

  [9] 2. Interviews and Investigation: For many of the
same reasons, the district court failed to adequately justify its
                 MORENO v. CITY OF SACRAMENTO                9527
reduction of the time spent performing interviews and investi-
gation, from 137.3 hours to 68.7 hours. This 50 percent reduc-
tion is not supported by the district court’s cursory
explanation. The district court apparently rejected defendant’s
argument for the cut—that the interviews and investigation
were unnecessary because much of the information was not
used at trial—and held that the work was “appropriate.” But
the court then concluded that counsel “spent an unreasonable
amount of time engaged in this activity,” and that “[t]his time
should be reduced by 50%,” without further explaining this
dramatic reduction. See Gates v. Deukmejian, 987 F.2d 1392,
1400 (9th Cir. 1993) (as amended) (“the use of percentages”
does not “discharge[ ] the district court from its responsibility
to set forth a ‘concise but clear’ explanation of its reason for
choosing a given percentage reduction”). While we do not
require hour-by-hour explanations from the district court, the
conclusory finding of the court here does not allow for mean-
ingful appellate review.

   [10] 3. Impermissible Methodologies: The hourly rate
for successful civil rights attorneys is to be calculated by con-
sidering certain factors, including the novelty and difficulty of
the issues, the skill required to try the case, whether or not the
fee is contingent, the experience held by counsel and fee
awards in similar cases. See Hensley, 461 U.S. at 430 n.3 (cit-
ing Johnson v. Georgia Highway Express, Inc., 488 F.2d 714
(5th Cir. 1974)). Here, the district court properly considered
the difficulty of trying the case, the rates charged by other
attorneys in similar lawsuits, the skill of plaintiff’s counsel,
that plaintiff obtained excellent results and that counsel was
to be compensated only if the lawsuit was successful. The dis-
trict court suggested that an appropriate rate in light of these
factors would be $300 an hour. So far, so good.

   But the district court went on to consider impermissible
factors. The district court reduced the hourly rate from $300
an hour to $250 an hour, in part because it thought that other
firms could have staffed the case differently. The court specu-
9528                MORENO v. CITY OF SACRAMENTO
lated that other firms would have used a less skilled attorney,
rather than the lead counsel, to perform document review.
While it is appropriate to consider the skill required to per-
form a task, Hensley, 461 U.S. at 430 n.3, the district court
may not set the fee based on speculation as to how other firms
would have staffed the case.

   The cost effectiveness of various law firm models is an
open question,2 and it is by no means clear whether a larger
law firm would have billed more or less for the entire case.
The district court may have been right that a larger firm
would employ junior associates who bill at a lower rate than
plaintiff’s counsel, but a larger firm would also employ a
partner—likely billing at a higher rate than plaintiff’s counsel
—to supervise them. And the partner in charge would still
  2
   Several courts have struggled with this issue. Some have opined that
“[n]o rule of court should force a trial attorney to assign the duties of
assembling documents and files for trial to an underling upon pain of not
being paid for the work,” M.S.R. Imports, Inc. v. R.E. Greenspan Co., Inc.,
574 F. Supp. 31, 34 (E.D. Pa. 1983), or noted that litigation staffed only
by senior attorneys might reduce costs, Soc’y for Good Will to Retarded
Children, Inc. v. Cuomo, 574 F. Supp. 994, 999 (E.D.N.Y. 1983), vacated
on other grounds, 737 F.2d 1253 (2d Cir. 1984); see also United States
v. City & County of San Francisco, 748 F. Supp. 1416, 1432 (N.D. Cal.
1990) (noting that the “the efficacy of the pyramidal staffing pattern is a
matter of some debate”), remanded in part on other grounds by Davis v.
City & County of San Francisco, 976 F.2d 1536, 1548 (9th Cir. 1992).
   Other courts have adhered more to the pyramid structure in measuring
fee awards. See, e.g., Loughner v. Univ. of Pittsburgh, 260 F.3d 173, 180
(3d Cir. 2001) (“A claim by a lawyer for maximum rates for telephone
calls with a client, legal research, a letter concerning a discovery request,
the drafting of a brief, and trial time in court is neither fair nor reasonable.
Many of these tasks are effectively performed by administrative assistants,
paralegals, or secretaries.”); Bee v. Greaves, 669 F. Supp. 372, 377 (D.
Utah 1987), rev’d in part on other grounds, 910 F.2d 686 (10th Cir. 1990)
(reducing overall rate awarded because less experienced attorneys could
have performed much of the work); Mautner v. Hirsch, 831 F. Supp.
1058, 1076 (S.D.N.Y. 1993), rev’d in part on other grounds, 32 F.3d 37
(2d Cir. 1994) (reducing lodestar for using senior attorneys when junior
attorneys and paralegals were available).
                MORENO v. CITY OF SACRAMENTO                9529
have had to familiarize himself with the documents, a step
that plaintiff’s counsel avoided by reviewing the documents
herself. Moreover, lead counsel can doubtless complete the
job more quickly, being better informed as to which docu-
ments are likely to be irrelevant, and which need to be exam-
ined closely. Modeling law firm economics drifts far afield of
the Hensley calculus and the statutory goal of sufficiently
compensating counsel in order to attract qualified attorneys to
do civil rights work.

   The district court’s inquiry must be limited to determining
whether the fees requested by this particular legal team are
justified for the particular work performed and the results
achieved in this particular case. The court may permissibly
look to the hourly rates charged by comparable attorneys for
similar work, but may not attempt to impose its own judgment
regarding the best way to operate a law firm, nor to determine
if different staffing decisions might have led to different fee
requests. The difficulty and skill level of the work performed,
and the result achieved—not whether it would have been
cheaper to delegate the work to other attorneys—must drive
the district court’s decision.

   [11] The court also erred by applying what appears to be
a de facto policy of awarding a rate of $250 an hour to civil
rights cases. At the fees hearing, the district court noted that
“300 an hour is a fairly big step for me, and I think for the
court generally” and that “the court has pretty much held the
line at 250 [an hour] for the past ten years.” While the district
court’s final fee order does not reiterate this reasoning, an
effort to adhere to this de facto policy probably influenced the
final rate awarded, which was $250 an hour. Nothing else
supports the $50 an hour reduction.

   District judges can certainly consider the fees awarded by
other judges in the same locality in similar cases. But adopt-
ing a court-wide policy—even an informal one—of “holding
the line” on fees at a certain level goes well beyond the dis-
9530             MORENO v. CITY OF SACRAMENTO
cretion of the district court. One problem with any such policy
is that it becomes difficult to revise over time, as economic
conditions change; here the rate apparently hadn’t changed for
10 years, and even a $50 increase in the hourly rate was con-
sidered a “big step . . . for the court generally.” Unless care-
fully administered and updated, any such policy becomes a
strait-jacket. More fundamentally, such a policy—no matter
how well intentioned or administered—is inconsistent with
the methodology for awarding fees that the Supreme Court
and our court has adopted. The district court’s function is to
award fees that reflect economic conditions in the district; it
is not to “hold the line” at a particular rate, or to resist a rate
because it would be a “big step.” If the lodestar leads to an
hourly rate that is higher than past practice, the court must
award that rate without regard to any contrary practice.

   [12] The district further erred by double counting the
reduction in hourly rate for some tasks; such double counting
is impermissible. See Cunningham v. County of Los Angeles,
879 F.2d 481, 489 (9th Cir. 1988). It is possible, of course, for
a district court to reduce both the hours and hourly rate
awarded for some tasks. But the district court must exercise
extreme care in making such reductions to avoid double
counting. Here, the district court reduced the reasonable
hourly rate from $300 to $75 an hour, the paralegal rate, for
275.2 hours spent summarizing depositions, based on its con-
clusion that summarizing depositions was simple enough for
a paralegal to perform. But the district court then used the
simplicity of summarizing depositions to justify its reduction
in the reasonable hourly rate for the remainder of the case
from $300 to $250 an hour. Thus, the district court double
counted its reduction for summarizing depositions: Each hour
spent summarizing depositions was already reduced to $75 an
hour, so there was no reason to reduce the overall rate. The
district court may properly use the simplicity of a given task
as justification for a reduction in the rate for the hours spent
performing that task or as justification for a reduction in the
overall rate, but not both.
                 MORENO v. CITY OF SACRAMENTO                9531
                         *      *     *

    The district court has discretion to determine the appropri-
ate fee award, because its familiarity with the case allows it
to distinguish reasonable from excessive fee requests. But gut
feelings are not enough; if the district court is going to make
substantial cuts to a winning lawyer’s fee request, it needs to
explain why with sufficient specificity that the lawyer can
meaningfully object and we can meaningfully review the
objection. We can’t defer to reasoning that we can’t review;
if all the district court offers is a conclusory statement that a
fee request is too high, then we can’t tell if the court is apply-
ing its superior knowledge to trim an excessive request or if
it is randomly lopping off chunks of the winning lawyer’s rea-
sonably billed fees.

   We are well aware that awarding attorneys’ fees to prevail-
ing parties in civil rights cases is a tedious business. And it
may be difficult for the district court to identify the precise
spot where a fee request is excessive. But the burden of pro-
ducing a sufficiently cogent explanation can mostly be placed
on the shoulders of the losing parties, who not only have the
incentive, but also the knowledge of the case to point out such
things as excessive or duplicative billing practices. If oppos-
ing counsel cannot come up with specific reasons for reducing
the fee request that the district court finds persuasive, it
should normally grant the award in full, or with no more than
a haircut.

  The district court’s fee award is vacated and the case is
remanded with instructions that the court enter a new fee
award consistent with this opinion.

  VACATED AND REMANDED.