Court Opinion

ID: 9483946
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:36:16.961645+00
Date Added: 2024-06-11T17:49:55.988408
License: Public Domain

MILLER, District Judge,
concurring in part and dissenting in part.
I concur wholeheartedly with respect to the principal judgment awarded to the plaintiff, but respectfully dissent with respect to the attorney fee award. While I admire the majority opinion’s effort to breathe greater reason and predictability into the fee-setting process, I do not believe that the district court abused its discretion in awarding fees at a rate lower than was sought, and do not believe that a remand would be workable in any event.
Mr. Gusman obtained his legal services from the firm of Davis, Miner, Barnhill & Galland, a firm based in Chicago with an office in Madison. We are told that Davis, Miner bills for its attorneys’ time at the same rates regardless of whether the services are performed in Chicago or Madison. As I read the district court’s opinion, it is the tension between billing rates in Chicago and Madison that gives rise to this fee dispute: the plaintiff wishes Unisys to be ordered to compensate his attorneys at Chicago/Madison rates, while the district Court believed it to be appropriate to order Unisys to compensate the plaintiff’s attorneys at Madison rates. The majority opinion dismisses this issue with the observation that Unisys having “hired pricey big-city lawyers to defend itself is in no position to contend that only small-town lawyers, at small-town rates, were appropriate.”
It is well-settled that a fee arrangement between the prevailing party and counsel does not determine the “reasonable” attorney fee for which the losing defendant will be held responsible; the private arrangement is relevant, but not dispositive. Blanchard v. Bergeron, 489 U.S. 87, 93-94, 109 S.Ct. 939, 944-45, 103 L.Ed.2d 67 (1989); Kirchoff v. Flynn; 786 F.2d 320 (7th Cir.1986). It is difficult to see why the fee arrangement between the losing party and its counsel is entitled to greater preclusive effect. Further, the record indicates that Unisys’ Milwaukee trial lawyer was compensated at an hourly rate of $150.00, the same rate as that awarded to Mr. Gus-man’s principal attorneys; thus, the compensation comparison favors the district *1152court’s determination, unless we are to hold that the plaintiff’s lawyers are worth half again more simply because they won, a point for which I can find no authority. Cf. Samuels v. American Motors Sales Corp., 969 F.2d 573, 579 (7th Cir.1992) (district court noted defense counsel’s $130 hourly rate in process of reducing plaintiff’s counsel’s hourly rate from requested $250 to $125).
Calculation of a reasonable fee award begins with the familiar "lodestar" calculation required by Hensley v. Eckerhart, 461 U.S. 424, 433-434, 103 S.Ct. 1933, 1939-1940, 76 L.Ed.2d 40 (1983), whereby the number of hours reasonably expended is multiplied by a reasonable hourly rate. In Jardien v. Winston Network, Inc., 888 F.2d 1151, 1159 (7th Cir.1989), this court stated that, "[i]n a properly functioning market, a `reasonable fee' should approximate the market rate in the relevant community," and affirmed the award by the district judge, who was "better situated than this court to assess the reasonableness of an hourly rate, because he can consider both the experience of the attorneys involved and the rates charged by other Chicago lawyers." Id. The district judge did that in this case, but had he done no more he would have erred.
More recent cases have indicated that the attorney’s regular billing rate must be considered, as well. In Matter of Continental Illinois Securities Litigation, 962 F.2d 566, 568 (7th Cir.1992), a common fund class action suit, the district court reduced the prevailing attorneys’ hourly rates, not on the basis of affidavits establishing the market rate for attorneys’ services in the community, but on the basis of a belief that higher-priced legal talent simply was not needed in the case. This court, noting that the defendants themselves had hired “a crowd of pricey lawyers to defend the case”, disagreed and reversed. Although the court stated that the district court’s function was to decide “what the lawyer would receive if he were selling his services in the market rather than being paid by court order” rather than to “determine the equivalent of the medieval just price”, nothing in the opinion suggests that the court must or may blind itself to the reasonableness of the requested hourly rate when laid beside rates for other attorneys of comparable skill in the community.
In Pressley v. Haeger, 977 F.2d 295 (7th Cir.1992), the district court was faced with fee petitions from three counsel of record, each of whom stated that his hourly rate was $182; the petitions were supported by an’ affidavit of a fourth attorney attesting that $182 was the prevailing hourly rate for litigation of that sort and quality in Chicago, where the suit was tried. The defense did not contest that evidence of the prevailing market rate within the community, but argued that those who were not lead counsel should receive less than those who were; the district court agreed. This court reversed and directed entry of a fee award calculated at hourly rates of $182 for each, reminding the district court that “[f]ee litigation under § 1988 depends on what the market rate is rather than what litigants and judges think it ought to be.” 977 F.2d at 299. Again, no evidence was submitted to suggest that the market rate in the community in which the legal services were rendered was anything other than that sought by plaintiff’s counsel.
Barrow v. Falck, 977 F.2d 1100 (7th Cir. 1992), involved a central Illinois attorney who performed legal services for the plaintiff in central Illinois. The attorney sought a fee award based on an hourly rate of $135, and submitted another lawyer’s affidavit to the effect that the market rate in central Illinois for attorneys with plaintiff’s counsel’s skill and experience was $135 per hour. This court reversed the district court’s award of fees at the requested hourly rate. The record also reflected that a union paid the plaintiff’s attorney for his work at hourly rates ranging from $80 to $110. Stating that judges “must stick to the market rate for the attorneys’ time— that is to say, the opportunity costs of their time, the rate they could receive in other engagements,” this court held that the *1153market value of the attorney in question was, in light of his demonstrated billing history, no more than $110. 977 F.2d at 1105.
Blum v. Stenson, 465 U.S. 886, 895, 104 S.Ct. 1541, 1547, 79 L.Ed.2d 891 (1984), teaches that “reasonable fees” under fee-shifting statutes “are to be calculated according to the prevailing market rates in the relevant community____” The majority is correct that Blum did not deal with counsel with historical billable rates, and thus the inquiry cannot stop there when such counsel is involved. But nothing in Continental Illinois Securities, Pressley, or Barrow suggests that counsel’s billing history renders inquiry into the prevailing market rates unnecessary or improper. Those cases do not eliminate altogether the Blum Court’s conclusion that fee awards “are to be calculated according to the prevailing market rates in the relevant community, regardless of whether plaintiff is represented by private or non-profit counsel.” Blum v. Stenson, 465 U.S. at 895, 104 S.Ct. at 1547. They hold only that when determining a reasonable fee, the established billing history of the prevailing party’s counsel is entitled to significant weight.
That, as I read it, is what the district court did here. The court noted the submission of other Davis, Miner billings and the rates assessed in those billings, and acknowledged that it was “certainly evidence to be considered by this Court as well. However, far more persuasive are the affidavits of Madison attorneys suggesting a relevant prevailing rate in the Madison area of $125 to $150 per hour.” In other words, the court considered both the value placed on Davis, Miner’s services by a broader Chicago/Madison market and the value placed on comparable services of comparable attorneys in the narrower Madison market, and found the latter evidence to be more persuasive in the context of this case.
In Chrapliwy v. Uniroyal, Inc., 670 F.2d 760 (7th Cir.1982), cert. denied, 461 U.S. 956, 103 S.Ct. 2428, 77 L.Ed.2d 1315 (1983), the district court was found to have erred in reducing requested fees based on New York and Washington rates to those prevailing in South Bend, where the ease was tried. This court held that in light of what then was perceived to be the complexity of pension litigation, nothing in the record suggested that South Bend counsel could have provided comparable iegal services as easily, but recognized that other cases might lead to a contrary result:
If a high priced, out of town attorney renders services which local attorneys 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. On the other hand, there are undoubtedly services which a local attorney may not be willing or able to perform. The complexity and specialized nature of a case may mean that no attorney, with the required skills, is available locally.
We think that a judge, in allowing an attorney’s fee under Title VII or similar statute, has discretion to question the reasonableness of an out of town attorney’s billing 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 to be rendered.
If, however, a party does not find counsel readily available in that locality with whatever degree of skill may reasonably be required, it is reasonable that the party go elsewhere to find an attorney, and the court should make the allowance on the basis of the chosen attorney’s billing rate unless the rate customarily charged in that attorney’s locality for truly similar services is deemed to require an adjustment.
670 F.2d at 768, 769. The ensuing decade’s worth of opinions by this court and the Supreme Court does not appear to have undercut this reasoning. The record con*1154tains no suggestion that Mr. Gusman could not have found comparable legal representation at prevailing Madison rates. See Soto v. Adams Elevator Equipment Co., 941 F.2d 543, 553 (7th Cir.1991).
The majority opinion makes the attorney’s established hourly rate (when an established rate exists) presumptively appropriate and then shifts to the defense the burden of overcoming that presumption. I believe that this approach suffers from several flaws.
First, the majority’s approach distorts the market. It is one thing to say, as in Barrow, that an attorney’s billing history within the market in which the services are performed is stronger evidence of the value of his time within that market than general evidence of attorney time in that market. It is quite another thing to allow the attorney’s client base to define the market. The Davis, Miner client base reaches well beyond Madison or the Western District of Wisconsin; counsel agree that the bulk of the billings submitted in support of the fee petition were directed to clients based in Chicago. That an attorney’s hour is worth $225 in Chicago is evidence, but certainly not conclusive proof, of the same hour’s worth in Madison. The hour belongs to a Chicago-based law firm, but the court must decide the worth of that firm’s hour to a Madison-based client. Eddleman v. Switchcraft, Inc., 965 F.2d 422, 424 (7th Cir.1992) (“The market rate is ‘the rate that lawyers of similar ability and experience in the community normally charge their paying clients for the type of work in question.’ ”).
Further, the attorney’s hourly rate within the community is a factual question that must be resolved before any presumption is to be triggered. A contingent fee attorney with a single client who pays $600 an hour for five hours of legal services each year cannot be entitled to a presumption that his “lodestar” award should be based on an hourly rate of $600. The majority opinion recognizes this through its “Case l”/“Case 2” example. I fear, however, that we will find the real world closer to Case 2 than to Case 1. I do not believe that many plaintiffs' attorneys in employment discrimination cases sell 95% of their time on an hourly rate; I believe we will find that far more than one hour in twenty is devoted to work on contingency fee or fee-shifting statute cases.
More troubling, though, is the fact-finding process by which courts and counsel will determine whether their case is closer to Case 1 or Case 2. The majority opinion shifts to Unisys the burden of overcoming a presumption, a burden likely to be met only by evaluating some billing history. Whether that evaluation is to focus on Davis, Miner’s billing history as a whole, or the firm’s billing for services provided in the Madison area, or the billing history of the Madison office, or the billing history of the attorneys who performed services for Mr. Gusman, the evidence will be available to Unisys only through discovery. The Hensley Court’s hope that a “request for attorney's fees should not result in a second major litigation”, 461 U.S. at 437, 103 S.Ct. at 1941, has proven forlorn, see, e.g., Nanetti v. University of Illinois at Chicago, 944 F.2d 1416 (7th Cir.1991), but this court should not relish the prospect of post-judgment depositions of prevailing plaintiffs’ attorneys under subpoena to bring their firms’ billing records for the last few years.
Perhaps these concerns could be addressed with only a slight modification to the majority's approach; the burden might be restored to the plaintiff seeking fees, where it ordinarily rests. Blum v. Stenson, 465 U.S. at 895-896 n. 11, 104 S.Ct. at 1547 n. 11; Tomazzoli v. Sheedy, 804 F.2d 93, 96 (7th Cir.1986); Zabkowicz v. West Bend Co., 789 F.2d 540, 548 n. 8 (7th Cir. 1986). But if this test is applied, the district court cannot be said to have abused its discretion unless the hourly rate's reasonableness in the community is disregarded altogether. The attorneys' submissions do not indicate that any Madison-based client of Davis, Miner has paid an hourly rate of $225, although two Chicago-based clients paid such a rate in relation to litigation in *1155Madison. One Madison-based client is shown to have paid an hourly rate of $200 for Ms. Siskind's services. Of the twenty-nine billing records submitted in support of the fee petition, these are the only three that relate to Madison; the balance relate to services performed with reference to Chicago litigation. These affidavits barely rebut the defendant's showing of the hourly rates charged by attorneys of comparable experience in the Madison community. A trial court errs by ignoring uncontested affidavits concerning the prevailing rate within the community. Henry v. Webermeier, 738 F.2d 188, 193 (7th Cir.1984). A district court should not be held to have abused its discretion by finding persuasive that evidence which it may not disregard.
Certainly, Chicago-based law firms should not be undercompensated for services provided to Chicago clients in Chicago litigation through fee awards based on a Madison fee rate not prevailing (or perhaps even available) in the Chicago market. Conversely, under Chrapliwy, a district court does not abuse its discretion by holding, in litigation that is not complex, that compensation for legal services performed in Madison for a Madison client should not be based on an hourly rate far above that which prevails in Madison. To so hold is not to say that outstanding attorneys may recover only an average rate; the district court awarded the highest reasonable rates prevailing in Madison. Instead, such an approach merely calculates the fee “according to the prevailing market rates in the community”, Blum v. Stenson, 465 U.S. at 895, 104 S.Ct. at 1547, after giving due regard to the attorneys’ customary billing rates as required by Continental Illinois Securities, Pressley, and Barrow.
Balancing higher rates based on a different market against lower rates prevailing in the community in which the services were performed admittedly is difficult. Reasonable minds can differ; had I served as the trial judge in this case, I may well have awarded the rates requested by Mr. Gusman's attorneys. This court's review, however, is highly deferential. Smith v. Great American Restaurants, Inc., 969 F.2d 430, 439 (7th Cir.1992). We defer to the district court's discretion in light of its superior understanding of the facts surrounding the litigation, the lack of overriding need for uniformity in fee awards, and in the interest of minimizing fee litigation. Estate of Borst v. O'Brien, 979 F.2d 511, 514 (7th Cir.1992). As long as the district court provides a concise but clear explanation for its reasons, an award of less than the requested hourly rate may be reversed only for an abuse of discretion, Nanetti v. Univ. of Illinois at Chicago, 944 F.2d at 1418, which occurs only if the district court reaches a conclusion that no evidence in record supports as rational. Littlefield v. McGuffey, 954 F.2d 1337, 1350 (7th Cir.1992). I believe the district court provided a clear explanation for its reasons, and can find no abuse of discretion.
Accordingly, I dissent from the majority’s remand order. I would affirm the district court’s judgment in its entirety.