Court Opinion

ID: 2996144
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:25:42.254897+00
Date Added: 2024-06-11T11:45:28.395342
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

No. 01-3336
IQBAL MATHUR,
                                                         Plaintiff,
MARILYN F. LONGWELL and JOHN P. MADDEN,
                                                     Appellants,
                              v.

BOARD OF TRUSTEES OF SOUTHERN ILLINOIS UNIVERSITY,
                                          Defendant-Appellee.
                        ____________
          Appeal from the United States District Court
              for the Southern District of Illinois.
          No. 95 C 4097—James L. Foreman, Judge.
                        ____________
  ARGUED OCTOBER 16, 2002—DECIDED JANUARY 24, 2003
                    ____________

  Before COFFEY, RIPPLE, and WILLIAMS, Circuit Judges.
  WILLIAMS, Circuit Judge. Iqbal Mathur won a jury ver-
dict in this employment discrimination and retaliation
case and petitioned for attorneys’ fees. In this appeal, the
appellants, two of Mathur’s attorneys, claim that the dis-
trict court improperly reduced the proffered hourly rate
when it used local rates to determine the award. Because
we agree that the district court abused its discretion when
making this modification, we vacate the district court’s
judgment and remand for further proceedings.
2                                               No. 01-3336

                    I. BACKGROUND
  Mathur brought this action after Southern Illinois
University (SIU) decided not to hire him as the dean of
SIU’s College of Business. He alleged that he was discrim-
inated against during the hiring process and that SIU
retaliated against him for filing discrimination charges by
removing him from his position as chair of SIU’s Finance
Department. When he was seeking legal representation
to help him with his suit, Mathur was rebuffed by every
lawyer he approached in the area around SIU who he felt
was experienced enough to handle his case. These attor-
neys claimed that various conflicts of interest prevented
them from litigating against SIU. On a friend’s recommen-
dation, he retained Marilyn Longwell, an attorney based
in Chicago who specializes in employment discrimina-
tion and other civil rights claims. Longwell and her associ-
ate took on Mathur’s case, and though the discrimination
claim was defeated on a motion for summary judgment,
a jury awarded Mathur back pay and compensatory dam-
ages for the retaliation claim.
  The district court refused to enter judgment on the
verdict and granted judgment as a matter of law for SIU
regarding the retaliation claim. On appeal, Mathur hired
Robert Sheridan, who worked on the case with his then-
associate, John Madden. Following oral argument before
us, Madden left Sheridan’s employ and opened his own
practice. We reversed the district court’s grant of judgment
as a matter of law regarding the retaliation claim, see
Mathur v. Bd. of Trustees of S. Ill. Univ., 207 F.3d 938 (7th
Cir. 2000), and Mathur retained both Longwell and Mad-
den to deal with post-appellate matters. After Mathur’s
award was finalized, he filed a petition for attorneys’ fees
pursuant to 42 U.S.C. § 2000e-5(k), the provision of Title
VII that allows such awards. SIU filed its response ob-
jecting to the fee petition and the district court asked for
additional briefs regarding the reasonableness of the
No. 01-3336                                                  3

claimed hourly rates. Shortly after these briefs were
submitted, the district court awarded attorneys’ fees in the
amount of $86,106.71 in fees and $5,505.40 in costs to
Mathur. Two of Mathur’s attorneys, whose proffered com-
pensation rates were lowered by the district court, now
appeal.

                       II. ANALYSIS
A. Jurisdiction
  We begin by addressing the jurisdictional propriety of
this appeal, since it has been brought by two of Mathur’s
attorneys, not Mathur himself. Title VII awards attor-
neys’ fees to the “prevailing party,” not the attorney. See
42 U.S.C. § 2000e-5(k). However, “it is common to make
the award directly to the lawyer where . . . the lawyer’s
contractual entitlement is uncontested.” Richardson v.
Penfold, 900 F.2d 116, 117 (7th Cir. 1990). Since an attor-
neys’ fee award is considered part of the costs of a litiga-
tion, see 42 U.S.C. § 2000e-5(k), the award goes straight
from the plaintiff to counsel and is not intended to serve
as additional compensation for plaintiffs. This means that
“the question whether the motion for fees is in the name
of the party or his attorney is a ‘technicality,’ ” because “it
would exalt form over substance to deny the motion for
fees” if an attorney, and not the plaintiff, is the named
party. Lowrance v. Hacker, 966 F.2d 1153, 1156 (7th Cir.
1992); see also Cent. States, Southeast & Southwest Areas
Pension Fund v. Cent. Cartage Co., 76 F.3d 114, 116 (7th
Cir. 1996).
  We requested memoranda from both the appellants and
appellees discussing whether or not we have jurisdiction
to hear this appeal. The appellants noted that under the
district court’s fee award that they are appealing, Mathur’s
obligations to the attorneys were completely satisfied.
Mathur does not dispute the fee award amount, so any ad-
4                                                     No. 01-3336

ditional fees that would be awarded on appeal would not
benefit him, but rather his attorneys. Therefore, the ap-
pellants have properly demonstrated that they are actual
parties in interest, and we have jurisdiction to hear their
appeal.

B. Calculation of Attorneys’ Fees
  As we have often explained, attorneys’ fees are assigned
a “lodestar” amount, calculated by multiplying the num-
ber of hours the attorney reasonably expended on the liti-
gation times a reasonable hourly rate. See Hensley v.
Eckerhart, 461 U.S. 424, 433 (1983); Dunning v. Sim-
mons Airlines, Inc., 62 F.3d 863, 872 (7th Cir. 1995). Once
this amount is calculated, the district court may adjust
the amount up or down to take into account various fac-
tors regarding the litigation.1 When reviewing these deci-
sions, we use an abuse of discretion standard, since the
district court is in a better position to evaluate such a fact-
based issue. See Spegon v. Catholic Bishop of Chicago, 175
F.3d 544, 551 (7th Cir. 1999); Bankston v. Illinois, 60 F.3d

1
    These factors include:
      the time and labor required; the novelty and difficulty of
      the questions; the skill requisite to perform the legal
      services properly; the preclusion of employment by the
      attorney due to acceptance of the case; the customary
      fee; whether the fee is fixed or contingent; time limita-
      tions imposed by the client or the circumstances; the
      amount involved and the results obtained; the experi-
      ence, reputation, and ability of the attorneys; the “un-
      desirability” of the case; the nature and length of the
      professional relationship with the client; and awards in
      similar cases.
Spellan v. Bd. of Educ. for Dist. 111, 59 F.3d 642, 645 (7th Cir.
1995); see also Hensley, 461 U.S. at 430 n.3.
No. 01-3336                                                 5

1249, 1255 (7th Cir. 1995). In addition, we give deference
to the district court because we wish to avoid protracted
litigation over fees and because strict uniformity in fee
awards “is not so compelling as to justify a high level of
scrutiny.” Miller v. Artistic Cleaners, 153 F.3d 781, 784 (7th
Cir. 1998).
  In its order awarding fees, the district court reduced the
number of hours submitted by Mathur’s attorneys by five
percent to take into account the failure of Mathur’s dis-
crimination claim. This reduction is not contested by the
appellants. However, the appellants challenge the dis-
trict court’s reduction of the hourly rates used to calcu-
late the lodestar amount. The district court explained the
downward adjustment by saying:
    Ms. Longwell has charged $225 for her non-court
    time, $250 for her court time, $200 per hour for
    associate time, and $50.00 per hour for paralegal
    time. John Madden has charged $175 per hour. . . .
    Upon review, the Court finds that the attorney
    rates charged by Marilyn F. Longwell & Associates
    and by John Madden are in excess of the market
    rates in Southern Illinois. The market rates for
    Southern Illinois as applied to [Longwell] would be
    $125 for Ms. Longwell’s non-court time, $150 for
    her court time, $100 per hour for her associate
    time, and $100 per hour for John Madden.
When a district court reduces either the rate or hours
proffered by an attorney when calculating the lodestar
amount, it must provide a clear and concise statement
why it chooses to do so. See Spellan, 59 F.3d at 645.
  SIU argues that the reduction was warranted because
the appellants, who had the burden of proving their hour-
ly rate, Gusman v. Unisys Corp., 986 F.2d 1146, 1148 (7th
Cir. 1993), failed to provide information regarding their
rates throughout the litigation, thereby giving the district
6                                                No. 01-3336

court discretion to use local rates. However, in its state-
ment discussing the appellants’ proffered rates and hours,
the district court described the rates without comment-
ing on the supporting evidence, and the court did not re-
duce the rates of other attorneys involved in the case
whose supporting evidence was equivalent to the appel-
lants’ documentation. There is no indication that the
district court adjusted the appellants’ rate downward
because of a lack of data. In fact, supplemental briefs
and affidavits specifically addressing the appellants’ hourly
rates were submitted at the district court’s request.
   In contrast to its terse discussion of the applicable hourly
rates, the district court gave detailed comments as to
why it felt a reduction in the proffered amount of hours
was warranted. Given this commentary by the district
court, we believe that it did not adjust downward the
appellant’s rates for a lack of proof, but for the reason
it indicated, i.e., to use rates on par with those in south-
ern Illinois.
  Fee-shifting statutes in civil rights legislation are in-
tended to allow litigants access to attorneys who would
otherwise be inaccessible, given the low retainers many
plaintiffs can afford. See City of Riverside v. Rivera, 477
U.S. 561, 576 (1986); Hensley, 461 U.S. at 429; Estate
of Borst v. O’Brien, 979 F.2d 511, 517 (7th Cir. 1992). For
that reason, our preference is to compensate attorneys
for the amount that they would have earned from pay-
ing clients, i.e., the standard hourly rate. See Gusman, 986
F.2d at 1150. An attorney may charge higher than the
community’s average if she possesses an unusual amount
of skill, the ability to emphasize with the jury, investiga-
tive abilities, or other qualities which command a pre-
mium. However, if the district court decides that the prof-
fered rate overstates the value of an attorney’s services, it
may lower them accordingly. See Chrapliwy v. Uniroyal,
Inc., 670 F.2d 760, 767 (7th Cir. 1982) (“A judge may well
No. 01-3336                                                7

approach high rates with skepticism, and he may exercise
some discretion in lowering such rates. For example, an
attorney may be overqualified . . . or an attorney may bill
at a high rate but rarely collect at that rate.”).
  The district court grounded its decision on our opinion
in Spegon, where we said that the lodestar rate is “the rate
that lawyers of similar ability and experience in the
community charge their paying clients for the type of
work in question.” 175 F.3d at 555 (quoting Bankston, 60
F.3d at 1256). Considering “the community” for purposes
of rate-setting to be southern Illinois, the district court
here used that area’s local rates when determining the
lodestar amount. This method of accounting misreads
Spegon and our other cases discussing this issue. In
Spegon, the attorney was a local practitioner rather than
someone from another area. Immediately after the pas-
sage in Spegon quoted above, we said that “[t]he attorney’s
actual billing rate for comparable work is presumptively
appropriate to use as the market rate.” Id. at 555 (quoting
People Who Care v. Rockford Bd. Of Educ., School Dist. No.
205, 90 F.3d 1307, 1310 (7th Cir. 1996)). Only if an attor-
ney is unable to provide evidence of her actual billing
rates should a district court look to other evidence, includ-
ing “rates similar experienced attorneys in the commu-
nity charge paying clients for similar work.” Id. at 855.
Therefore, SIU is correct in asserting that looking to the
southern Illinois legal community’s rate would have been
appropriate, but only if the district court provided an
adequate reason to use a rate other than the presumed
market rate, i.e., the appellants’ market rate.
  However, just because the proffered rate is higher than
the local rate does not mean that a district court may
freely adjust that rate downward. When a local attorney
has market rates that are higher than the local average,
“[a] judge who departs from this presumptive rate must
have some reason other than the ability to identify a
8                                               No. 01-3336

different average rate in the community.” Gusman, 986
F.2d at 1151. Similarly, if an out-of-town attorney has a
higher hourly rate than local practitioners, district courts
should defer to the out-of-town attorney’s rate when
calculating the lodestar amount, though if “local attor-
neys could do as well, and there is no other reason to have
them performed by the former, then the judge, in his
discretion, might allow only an hourly rate which local
attorneys would have charged for the same service.”
Chrapliwy, 670 F.2d at 768. Though SIU claims that local
attorneys “could do as well” as the appellants, Mathur
claimed that none of these attorneys were available. When
searching for local counsel, he found that the attorneys
he talked to were either insufficiently experienced to bring
such a case, or were unable to bring an adversary litiga-
tion against SIU due to conflicts of interest.
  While a district court has the discretion to modify an out-
of-town attorney’s rate if “there is reason to believe that
services of equal quality were readily available at a lower
charge or rate in the area where the services were ren-
dered,” Mathur was unable to find anyone who could
provide those services. Chrapliwy, 670 F.2d at 769. Just
as it was reasonable for the plaintiffs in Chrapliwy to find
experienced attorneys from Washington, D.C., and New
York City to litigate their class action, it was also rea-
sonable for Mathur to search for an attorney in Chicago
after he exhausted his options in southern Illinois. When
a plaintiff finds out-of-town counsel after being unable to
find a local attorney, “the court should make the allow-
ance on the basis of the chosen attorney’s billing rate un-
less the rate customarily charged in that attorney’s locality
for truly similar services is deemed to require adjustment.”
Id. (emphasis added). By simply declaring that the lower
rate was appropriate because of the prevailing local rates
in southern Illinois, without regard to the quality of ser-
vices rendered by the appellants, the district court abused
its discretion.
No. 01-3336                                                9

  SIU claims that local counsel with sufficient expertise
was available, pointing to an age discrimination case
that was litigated against it by a local practitioner. While
that may be true, a potential litigant’s search for counsel
need not be meticulously comprehensive before attor-
neys from other areas are considered. The realities of the
legal community today mean that though some attorney
probably could have represented Mathur, one factor or
another prevented them from taking the case when he
needed a lawyer. Local attorneys could be overwhelmed
with their current caseloads and unable to take on a
potentially protracted litigation. A client’s case could pre-
sent novel or untested legal theories which an attorney
may not believe will be successful. The attorney may sim-
ply not believe that the prospective client has a winnable
case or, as in Gusman, the case may be too complex and
require more resources than local law firms are able to
provide. Whatever the search process a litigant uses to
choose legal representation, a good-faith effort to find
local counsel is all that is necessary, lest the meticulous
generation of a comprehensive log of inquiries deter
plaintiffs from bringing worthy discrimination suits,
frustrating the rationale for statutes enabling private
civil rights suits. See Estate of Borst, 979 F.2d at 517.
  As we noted above, the appellants based their fee peti-
tion on their rates for 2001, rates current as of the date of
the fee petition. We have allowed district courts to use
either current rates or past rates with interest when
calculating the lodestar amount, see Smith v. Village of
Maywood, 17 F.3d 219, 221 (7th Cir. 1994), because ei-
ther method provides “[a]n adjustment for delay in pay-
ment [which] is . . . an appropriate factor in the determina-
tion of what constitutes a reasonable attorney’s fee. . . .”
Missouri v. Jenkins by Agyei, 491 U.S. 274, 284 (1989); see
also Pennsylvania v. Del. Valley Citizens’ Council for Clean
Air, 483 U.S. 711, 716 (1987); Soto v. Adams Elevator
10                                             No. 01-3336

Equip. Co., 941 F.2d 543, 553 (7th Cir. 1991). In its order,
the district court described the appellants’ hourly rate
using the 2001 rates it was provided. Since it did not
describe the supplemental briefing it received as inade-
quate when making this finding, and did not modify the
proffered current rates of the other attorneys involved in
the litigation, we believe that the 2001 rates submitted
by the appellants are the proper rates to use when calcu-
lating the lodestar amount in this case.

                   III. CONCLUSION
  For the foregoing reasons, we VACATE the judgment of
the district court awarding $86,106.71 in attorneys’ fees
and $5,505.40 in costs, and REMAND for proceedings con-
sistent with this opinion.

A true Copy:
      Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit

                   USCA-02-C-0072—1-24-03