Court Opinion

ID: 3065225
Source: CourtListenerOpinion
Date Created: 2015-10-14 22:29:56.012107+00
Date Added: 2024-06-11T12:12:36.102620
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

                                           
                                           
IN THE MATTER OF GERALD R. SMITH               No. 09-80163

                                                ORDER

                  Filed November 10, 2009

                              ORDER

TALLMAN, Circuit Judge:

                        I.     Overview

   A request for review of a district judge’s determination of
appropriate fees sought for indigent legal representation in a
felony case by counsel appointed under the Criminal Justice
Act (“CJA”), 18 U.S.C. § 3006A, has been lodged with this
court. As a delegate of our circuit’s Chief Judge discharging
the statutory responsibility to review claims for compensation
in excess of statutorily mandated maximum amounts, see id.
§ 3006A(d)(3), I must decide whether to approve the district
judge’s reduction in the fees sought. Having considered the
hearing transcripts, court order, correspondence, and briefing
submitted by the CJA panel attorney to justify the amount
originally claimed, I am satisfied that (1) the district judge’s
conclusion was not an abuse of discretion, (2) the amount
awarded was fair compensation for the legal services ren-
dered, and (3) the attorney was afforded adequate due pro-
cess. I approve the district court’s fee award.

                             II.   Facts

  Spokane attorney Gerald Smith (“Mr. Smith”) was

                               15185
15186                  IN THE MATTER OF. SMITH
appointed on May 14, 2008, to represent Ryan Jensen, a
defendant charged with fraud, money laundering, and conspir-
acy in a white-collar criminal case in the Eastern District of
Washington. See United States v. Jensen, No. 08-cr-0054-JLQ
(E.D. Wash. indictment filed April 23, 2008). Following trial
by jury—which had resulted in verdicts of guilty on all counts
submitted for decision—but before termination of the case,
Mr. Smith submitted his second-interim request for attorney’s
fees under the CJA. His worksheet claims that during the time
between April 3, 2009, and July 11, 2009, he spent 45.1 hours
in court either for hearings or in trial. He certifies that another
379.6 hours were dedicated to work outside of court preparing
for trial, as well as researching and drafting a Rule 29 motion
during trial that successfully resulted in the dismissal of cer-
tain counts against Jensen. Finally, he claims an additional
$213.80 for photo copies. Only Mr. Smith’s out-of-court
hours claimed in his second-interim voucher are at issue here.1

   Following procedures established by the CJA guidelines,
Mr. Smith submitted his second CJA Form 20 for authoriza-
tion of payment (the “voucher”), and a CJA Form 26 justify-
ing the claim, requesting compensation totaling $46,930.80,
well in excess of the statutory maximum of $8,600.2
GUIDELINES FOR THE ADMIN. OF THE CRIMINAL JUSTICE ACT, Vol.
7, Guide to Judicial Policies & Procedures, app. A. On August
10, 2009, the Honorable Justin L. Quackenbush, Senior
United States District Judge for the Eastern District of Wash-
ington and the presiding judge in the underlying matter, sent
Mr. Smith a letter responding to his claim. The letter
explained that, while Judge Quackenbush had previously cate-
gorized the case as “complex” for excess compensation pur-
poses, 18 U.S.C. § 3006A(d)(3), he was hesitant to approve
  1
     There is no question of the attorney’s veracity with regard to the num-
ber of hours submitted for compensation.
   2
     Mr. Smith had previously requested, and has already been compen-
sated for, $31,662.90 on his first-interim CJA voucher submitted for his
initial work on this case.
                       IN THE MATTER OF. SMITH                      15187
an additional $46,930.80, the full amount Mr. Smith was now
requesting. He explained the court’s concerns and ordered
that Mr. Smith come to court for a hearing to determine the
appropriateness of the fee request.

   This on-the-record hearing took place in Judge Quacken-
bush’s chambers on September 10, 2009. The transcript
shows that Judge Quackenbush explained his reason for pro-
posing to reduce the fee award based on the excessive out-of-
court hours requested. Mr. Smith was given another chance at
the conclusion of this hearing to both reflect upon the court’s
concerns and to voluntarily reduce his hours to only those
necessary for the litigation. In a letter dated September 16,
2009, Mr. Smith nonetheless maintained that, in his judgment,
each hour expended was necessary for effective representa-
tion of his client Ryan Jensen, and he refused to reduce his
original claim by any amount.

   Following the hearing and receipt of Mr. Smith’s supple-
mental letter, Judge Quackenbush issued a memorandum
order addressing Mr. Smith’s fee request. The court reduced
Mr. Smith’s out-of-court hours from 379.6 hours to 200
hours. It explained that (1) Mr. Smith spent very little time
arguing or presenting evidence during trial, and (2) the attor-
ney for the co-defendant, Jimmy Jensen, had requested only
354.5 out-of-court hours for the totality of the litigation, com-
pared to Mr. Smith’s claimed total of 687.8 hours for out-of-
court responsibilities.3 Judge Quackenbush then approved Mr.
Smith’s second voucher in the reduced amount of $27,174.80,
reflecting 45.1 hours in court, 200 hours out-of-court, and
$213 in additional expenses.4 Because the voucher request
  3
     Mr. Smith’s first-interim request, for which he was fully compensated,
claimed another 308.2 out-of-court hours.
   4
     While this resulted in a 42 percent reduction in the award for Mr.
Smith’s second-interim voucher, when considering the amount already
awarded for the first-interim voucher, Judge Quackenbush reduced the
attorney’s fees for the totality of Mr. Smith’s Jensen representation from
May 14, 2008, through July 11, 2009, by 25 percent.
15188                  IN THE MATTER OF. SMITH
exceeded the statutory maximum, Judge Quackenbush for-
warded the voucher to the Ninth Circuit for approval.

   Mr. Smith then brought his objection to the reduction in
fees to me in my capacity as Chief of the Northern Adminis-
trative Unit of the Ninth Circuit Court of Appeals, a delegate
of the Chief Circuit Judge.5 Mr. Smith first points to the com-
plexity of the case and its thirty-two-count indictment. He
also claims that he spent a great deal of time reviewing copi-
ous and disorganized discovery received from the United
States Attorney and preparing for the cross-examination of
witnesses. He believes that counsel for the co-defendant sim-
ply decided not to review most of the documents turned over
in discovery, causing that counsel’s hours to be substantially
lower. Finally, he argues that the claimed hours were
expended “providing more background to the events,” decid-
ing on trial strategy, determining which evidence to present,
and preparing cross-examination. The hours, he says, were
both necessary and properly expended.

                            III.   Analysis

   The question is whether all of Mr. Smith’s claimed hours
were both reasonably expended and, in the exercise of reason-
able professional judgment, “necessary to provide fair com-
pensation.” 18 U.S.C. § 3006A(d)(3). The Criminal Justice
Act provides that courts may “furnish[ ] representation for
any person financially unable to obtain adequate representa-
tion.” Id. at § 3006A(a). “Representation . . . shall include
counsel and investigative, expert, and other services necessary
  5
    The Ninth Circuit is organized for this purpose into three administra-
tive units which oversee matters relating to the Criminal Justice Act. The
three “delegates” under 18 U.S.C. § 3006A(d)(3) are designated “Chiefs”
of the Northern, Middle, and Southern Administrative Units of the Ninth
Circuit Court of Appeals. 9th Cir. Gen. Orders 1.11, 6.7 & 11.1(3) (2008).
The Northern Administrative Unit encompasses the districts within the
Pacific Northwest states of Alaska, Washington, Oregon, Idaho, and Mon-
tana.
                    IN THE MATTER OF. SMITH                15189
for adequate representation.” Id. Counsel are paid in accor-
dance with the Act both for hours spent before the court and
those “reasonably expended out of court.” Id. at
§ 3006A(d)(1). The statute also sets forth the procedure for
establishing hourly rates for attorney fees and places a pre-
sumptive cap on the maximum compensation normally avail-
able to counsel for representation in a particular case. Id. at
§ 3006A(d)(1) & (2). The rate set by the Judicial Conference
of the United States is currently $110 per hour for counsel
with a felony case maximum of $8,600 per representation.
The statute states that the maximum permissible amount in a
case may be waived for “extended or complex representa-
tion;” however this excess amount must be approved by the
presiding judge and by either the chief judge of the circuit or
a circuit judge to whom the chief judge has delegated his stat-
utory responsibility. Id. at § 3006A(d)(3).

   The Judicial Conference of the United States has approved
official guidelines for the administration of the CJA and
related statutes. These guidelines counsel judges and attorneys
on compliance with the CJA, and include as appendices forms
to aid in the submission of claims. They also provide a frame-
work for determining whether claims for excess compensation
should be granted.

   The guidelines set forth a two-step test that should be fol-
lowed by a presiding judge in determining whether approval
of an excess voucher is warranted. First, as required by the
statute, the judge must find that the case is either “extended”
or “complex.” 18 U.S.C. § 3006A(d)(3). Mr. Smith argues
that this case was “complex,” a term which applies “[i]f the
legal or factual issues in a case are unusual, thus requiring the
expenditure of more time, skill and effort by the lawyer than
would normally be required in an average case.” GUIDELINES
FOR THE ADMIN. OF THE CRIMINAL JUSTICE ACT, ¶ 2.22(B)(3).
Judge Quackenbush previously categorized the case as “com-
plex” as contemplated within the meaning of the guidelines.
The second step requires that the presiding judge “determine
15190               IN THE MATTER OF. SMITH
if excess payment is necessary to provide fair compensation.”
Id. The guidelines state that, inter alia, the following criteria
may prove helpful in making this determination: the “manner
in which duties were performed; knowledge, skill, efficiency,
professionalism, and judgment required of and used by coun-
sel; nature of counsel’s practice and injury thereto; any
extraordinary pressure of time or other factors under which
services were rendered; and any other circumstances relevant
and material to a determination of a fair and reasonable fee.”
Id. Counsel is required to prepare a supporting explanation if
an excess claim is made. Id. at ¶ 2.22(C)(2). The explanation
must be detailed, justifying why excess payment is required
for fair compensation, id., and may be made on the CJA Form
26, or by a declaration, letter, or memorandum from counsel
accompanying the CJA voucher.

   After reviewing the requested hours and accompanying
memorandum, and in light of Mr. Smith’s performance before
him during trial and throughout pre-trial proceedings, Judge
Quackenbush concluded that not all of the hours expended
were essential for the litigation. Specifically, the judge found
that a substantial amount of the out-of-court preparation was
unnecessary, given Mr. Smith’s limited reliance on that prepa-
ration as demonstrated by counsel’s performance at trial.

   The guidelines also establish what process is due before a
claim may be adjusted. If the presiding judge concludes that
a reduction in claimed compensation is necessary, that judge
should provide appointed counsel with (1) “prior notice of the
proposed reduction with a brief statement of the reason(s) for
it,” and (2) “an opportunity to address the matter.” Id. at ¶
2.22(E). Because he anticipated reducing the amount claimed
in the attorney’s CJA voucher, Judge Quackenbush notified
Mr. Smith in writing of his concerns and ordered that the
attorney be given the opportunity to be heard before a final
decision was rendered. At that hearing, the judge explained
his reservations against approving the full amount sought, and
he permitted Mr. Smith to explain and justify his allocation of
                    IN THE MATTER OF. SMITH                15191
pre-trial preparation time. Unsatisfied with both Mr. Smith’s
response and his unwillingness to consider any reduction in
his requested hours—i.e., refusing the court’s suggestion that
he limit them only to those hours necessary for fair compensa-
tion in view of how the case was handled by counsel—Judge
Quackenbush then cut the number of out-of-court hours
requested in the second-interim voucher by about 48 percent.

   There is no other fee structure in federal law that parallels
the CJA. Statutes like the Equal Access to Justice Act, 28
U.S.C. § 2412, and 42 U.S.C. § 1988—the fee statute for
compensating prevailing plaintiffs in civil rights cases—are
different. First, because they award fees to the “prevailing
party,” both require termination of the litigation prior to a fee
determination. This permits the presiding judge to make a
decision regarding fees at the end of the case and, if sought,
a traditional appeal may follow. Second, the CJA imposes
both lower-than-market-rate hourly fees and a statutory fee
maximum award applicable in a typical case. Neither of these
comparable statutes, or any other under federal law, imposes
any such limitation. Finally, neither statute sets forth a review
process separate from the traditional right of appeal. How-
ever, under the CJA, Congress has provided for a limited two-
layer review process, where all excess fees must be approved
both by the presiding judge and by the chief circuit judge or
his delegate. Congress established this process by statute and
it is akin to an administrative decision, providing no right of
formal appeal to the United States courts of appeal. See In re
Baker, 693 F.2d 925, 927 (9th Cir. 1982) (“[T]he district
judge’s certification of attorneys’ fees is an administrative act,
and is consequently not one of the ‘final decisions’ rendered
appealable by 28 U.S.C. § 1291. We therefore lack power to
review the certification by appeal.”) (internal citations and
footnote omitted).

   The procedure set forth by the CJA makes sense, especially
in complex cases where interim vouchers are regularly sub-
mitted, sometimes on a monthly basis, as the litigation pro-
15192               IN THE MATTER OF. SMITH
ceeds. Permitting exhaustive appellate review each time there
is a reduction ordered in a CJA voucher would spawn multi-
ple collateral appeals with no real gain. The present system
judiciously requires two Article III judges to review and cer-
tify the amounts reasonably expended as fair compensation
for indigent representation under the Act.

   For this reason our circuit has very little precedent regard-
ing the CJA compensation system. But our treatment of fee
reductions in cases where fees may be challenged on appeal
provides some guidance. Broadly speaking, we have said that
“[t]he district court has a great deal of discretion in determin-
ing the reasonableness of the fee and, as a general rule, we
defer to its determination, including its decision regarding the
reasonableness of the hours claimed.” Gates v. Deukmejian,
987 F.2d 1392, 1398 (9th Cir. 1992) (citations omitted). Even
though such determinations are generally given substantial
deference, “the district court is required to articulate . . . the
reasons for its findings regarding the propriety of the hours
claimed or for any adjustments it makes . . . to the . . . claimed
hours.” Id.

   “In making [an] award, the district court must strike a bal-
ance between granting sufficient fees to attract qualified coun-
sel . . . , and avoiding a windfall to counsel.” Moreno v. City
of Sacramento, 534 F.3d 1106, 1111 (9th Cir. 2008) (internal
citations omitted). Traditionally, “[w]e review the district
court’s calculation of the reasonable hours . . . for abuse of
discretion.” Id. (citing Camacho v. Bridgeport Fin., Inc., 523
F.3d 973, 977-78 (9th Cir. 2008)). The district court is
required to explain how it made its fee determination, and
while that “explanation need not be elaborate, . . . it must be
comprehensible.” Id.; see also Hensley v. Eckerhart, 461 U.S.
424, 437 (1983) (stating that the court’s explanation may be
“concise,” but must also be “clear”).

  “Despite the ‘concise but clear’ requirement, in cases
where a voluminous fee application is filed in exercising its
                    IN THE MATTER OF. SMITH                15193
billing judgment the district court is not required to set forth
an hour-by-hour analysis of the fee request.” Gates, 987 F.2d
at 1399 (quoting Hensley, 461 U.S. at 437). We have recog-
nized that in such cases, “the district court has the authority
to make across-the-board percentage cuts . . . in the number of
hours claimed . . . as a practical means of trimming the fat
from a fee application.” Id. (internal quotation marks and cita-
tion omitted). However, “[i]rrespective of its obvious utility,
the percentage or, ‘meat-axe approach,’ nonetheless has been
criticized when employed in cases where the fee applications
at issue involved substantial amounts of money and where
district courts failed adequately to articulate their reasons for
selecting specific percentage deductions.” Id. (citations omit-
ted). Though a small reduction of fees necessitates only “cur-
sory explanation,” anything more disparate requires “a more
specific articulation of the court’s reasoning.” Moreno, 534
F.3d at 1111. Finally, and most importantly to the instant
case, “the district court can impose a small reduction, no
greater than 10-percent—a ‘haircut’—based on its exercise of
discretion,” but anything more substantial requires clear
explanation. Id. at 1112.

   Judge Quackenbush ultimately cut almost half of Mr.
Smith’s requested out-of-court hours from the second-interim
voucher. This is certainly more than a “haircut.” However, the
experienced district judge provided not just lengthy, but also
crystal clear, explanations for this deduction in a letter, a six-
page order, and orally on the record when examining the pro-
priety of the fees sought. The court found that Mr. Smith
spent very little time cross-examining witnesses during the
one-week trial, and in doing so introduced only two trial
exhibits. His opening statement was terse, consuming only ten
minutes, and he called no witnesses of his own. The court
concluded that Mr. Smith had very little to show for the
nearly 700 hours of out-of-court preparation sought in the ini-
tial and second interim vouchers. The district judge cited his
experience in presiding over hundreds of trials and adminis-
tering thousands of CJA vouchers, and compared Mr. Smith’s
15194               IN THE MATTER OF. SMITH
trial performance with that of his co-counsel in the Jensen
case and with other counsel in similar cases. Judge Quacken-
bush found that Mr. Smith’s performance in the courtroom
lacked substantiated reliance on his out-of-court preparation.

   Deference must be given to the presiding judge who
watched the progress of this litigation from the beginning
because that judge is most familiar with the attorney’s actual
performance. Hensley, 461 U.S. at 437 (“[T]he district court
has discretion in determining the amount of a fee award [due
to its] superior understanding of the litigation.”); Chalmers v.
City of Los Angeles, 796 F.2d 1205, 1211 (9th Cir. 1986)
(“The district court is in the best position to determine in the
first instance the number of hours reasonably expended in fur-
therance of the successful aspects of a litigation and the
amount which would reasonably compensate the attorney.”).
It is very difficult to review a cold record and displace the
view of the presiding judge who is best able to assess the rea-
sonableness of a fee request in light of the attorney’s actual
conduct in the courtroom. This is especially true in the instant
case, where Judge Quackenbush closely observed Mr. Smith’s
performance both in hearings and throughout the week-long
trial.

   Furthermore, the purpose of the Act is not to compensate
counsel with fees rivaling those available to attorneys repre-
senting nonindigent clients. See generally United States v.
Dillon, 346 F.2d 633, 635 (9th Cir. 1965) (“[T]he obligation
of the legal profession to serve indigents on court order is an
ancient and established tradition, and . . . appointed counsel
have generally been compensated, if at all, only by statutory
fees which would be inadequate under just compensation
principles, and which are usually payable only in limited
types of cases.”). Instead, Congress enacted the CJA to both
“assure adequate representation in the Federal courts of
accused persons with insufficient means,” and “afford[ ] rea-
sonable compensation to counsel who are assigned.” S. REP.
NO. 88-346, at 1 (1963).
                    IN THE MATTER OF. SMITH                15195
   The question thus becomes not “what hours were actually
expended,” but “what hours were reasonably expended com-
pleting work necessary for adequate representation.” See 18
U.S.C. § 3006A(a). Mr. Smith claims that both the actual and
necessary amount of out-of-court hours expended during the
three-month period was 379.6. Judge Quackenbush found
that, while Mr. Smith had actually worked the hours
requested, a reasonable number of out-of-court hours warrant-
ing compensation was only 200. Considering the voluminous,
on-going discovery in this white-collar criminal case, I am
sympathetic to Mr. Smith’s position that he needed substantial
time to review and organize discovery due to the form in
which it was received. Until the attorney reviews the discov-
ery, one cannot say whether it may prove useful or not.

   However, I cannot say that Judge Quackenbush abused his
discretion when he provided ample notification to Mr. Smith
that he was considering awarding a fee less than that
requested, explained why he was concerned with the out-of-
court time charged to the case, and afforded Mr. Smith an on-
the-record hearing in chambers to justify the claim. When the
attorney declined to reduce the claim by any amount, the
court also issued a detailed written decision explaining the
considerations and rationale for the reduction imposed.

                       IV.   Conclusion

   There was no abuse of discretion in the ultimate fee
awarded on this voucher. The factual findings underlying the
district court’s rationale for a substantial reduction in out-of-
court hours are not clearly erroneous. Therefore, I approve
Judge Quackenbush’s reduced award of fees to Mr. Smith as
fair compensation for the representation he afforded his client
during the period covered by the second-interim voucher.
                             PRINTED FOR
                   ADMINISTRATIVE OFFICE—U.S. COURTS
                BY THOMSON REUTERS/WEST—SAN FRANCISCO

The summary, which does not constitute a part of the opinion of the court, is copyrighted
                          © 2009 Thomson Reuters/West.