Court Opinion

ID: 3002647
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:31:56.966634+00
Date Added: 2024-06-11T11:45:50.416005
License: Public Domain

In the

United States Court of Appeals
               For the Seventh Circuit

No. 07-3834

JEFFBOAT, LLC and S IGNAL M UTUAL
INDEMNITY A SSOCIATION, L TD.,
                                                      Petitioners,
                                v.

D IRECTOR, O FFICE OF W ORKERS’
C OMPENSATION P ROGRAMS and
L ARRY O. F URROW,
                                                    Respondents.

         Appeal from a Decision of the Benefits Review Board
             of the United States Department of Labor
  No. 2006-LHC-01156—Donald W. Mosser, Administrative Law Judge.

    A RGUED D ECEMBER 9, 2008—D ECIDED JANUARY 13, 2009

 Before F LAUM, W OOD , and W ILLIAMS, Circuit Judges.
  F LAUM, Circuit Judge. This case comes to us from a
decision by the Benefits Review Board upholding the
Administrative Law Judge’s (ALJ) award of attorneys’ fees
to Larry Furrow, who filed a workers’ compensation
claim against his employer, Jeffboat, LLC, that was settled
2                                               No. 07-3834

shortly before trial was scheduled. On appeal, Jeffboat
argues that Furrow’s counsel never established that the
hourly rate that she requested was in line with the prevail-
ing market rate for legal services in Indiana, where
Furrow brought this case. Jeffboat also argues that the
Administrative Law Judge improperly resorted to discre-
tionary factors, in particular the quality of representation
from Furrow’s counsel, when he made the award. Jeffboat
claims that such factors are only appropriate once the
ALJ has made a proper determination about the ap-
plicable market rate.
  For the following reasons, we affirm the decision of the
Benefits Review Board.

                      I. Background
   Larry Furrow, an employee of Jeffboat, LLC in
Jeffersonville, Indiana, suffered from hearing loss and
filed a workers’ compensation claim under the Long-
shoreman and Harbor Workers’ Compensation Act, 33
U.S.C. § 901 et seq. The Office of Workers’ Compensation
Programs originally approved the petition but, when
Jeffboat continued to contest it, referred the matter for a
formal hearing before Administrative Law Judge Donald
W. Mosser in the summer of 2006. Approximately six days
before the hearing, at a pre-trial conference, the parties
reached an agreement on the amount of compensation
that Jeffboat would pay to Furrow; the only issue the
parties did not settle at the conference was Jeffboat’s
liability for any attorneys’ fees.
No. 07-3834                                                 3

  Furrow filed a petition for attorneys’ fees on August 31,
2006, attaching an affidavit claiming $1,689.66 in attor-
neys’ fees from his case. As an appendix, he attached a
previous case, Decker v. Jeffboat, decided in the same
locality by ALJ Rudolf Jansen, approving attorneys’ fees
ranging from $250 to $261 per hour. His appendix also
included citations to the Connecticut Law Tribune, The
National Law Journal, the 1994 Survey of Law Firm Economics
by Altman Weil, and other sources, establishing that
billing rates for partners in Connecticut, where Furrow’s
attorney was based, usually ranged from $199 to $420 per
hour. Jeffboat filed its objection to the claim for attorneys’
fees on November 21, 2006, including appendices. The
appendices included a case from nearby Covington,
Kentucky in 1999 establishing the rate for a Longshore
Act case at $150 per hour, and three reported cases from
Indiana which, while not involving the Longshore Act,
found reasonable attorneys’ fees in a range from $136
to $175 per hour.
  On January 10, 2007, Judge Mosser granted Furrow’s
petition for attorneys’ fees in the amount Furrow re-
quested. In approving the petition, Judge Mosser cited
Decker v. Jeffboat and 20 C.F.R. 702.132, which provides
that an ALJ can consider the quality of an attorney’s
representation when making an award of attorneys’ fees.
Judge Mosser concluded that, “Ms. Olson’s excellent
representation of her client produced successful results
for which she should be compensated with the rea-
sonable amount requested.” App. 2. Jeffboat appealed the
award to the Benefits Review Board, which upheld the
award. Jeffboat then appealed to this court.
4                                                 No. 07-3834

                       II. Discussion
  This court reviews the ALJ’s award of attorneys’ fees
for an abuse of discretion. Ziegler Coal Co. v. Director,
OWCP, 326 F.3d 894, 902 (7th Cir. 2003). Attorneys’ fees
are calculated using a “lodestar” amount, which is the
number of hours that an attorney worked on the case
multiplied by a reasonable hourly rate. Mathur v. Bd. of
Trustees of Southern Il. Univ., 317 F.3d 738, 742 (7th Cir.
2003); see also Hensley v. Eckerhart, 461 U.S. 424, 433 (1983).
An administrative law judge is also allowed to consider
various discretionary factors, such as the quality of an
attorney’s representation, when making an award. See
20 C.F.R. 702.132.
  Jeffboat argues that the attorneys’ fee award was im-
proper in this case because Furrow’s attorney established
that the hourly rate she requested ($261 per hour) was
the prevailing market rate in Connecticut, where
Furrow’s attorney is based, but did not establish that it
was in line with the prevailing market rate in Indiana,
where the case was litigated. In support of its contention
that the attorney must show that her request for a rea-
sonable attorneys’ fee is in line with local market rates,
Jeffboat cites the Supreme Court’s decision in Blum v.
Stenson, 465 U.S. 886, 895 (1984), which holds that the
applicant for attorneys’ fees bears the burden of demon-
strating that the amount requested is in line with the
prevailing hourly rate in the “community for similar
services by lawyers of reasonably comparable skill, ex-
perience and reputation.” Id.
No. 07-3834                                               5

  Jeffboat concedes that this circuit has allowed the party
seeking attorneys’ fees to create a presumption that an
hourly rate is reasonable where the attorney demonstrates
that the hourly rate she has requested is in line with
what she charges other clients for similar work. Mathur,
317 F.3d at 743. They argue, however, that where the
hourly rate is greater than the market rate in the area in
which the case was litigated, the party requesting the
attorneys’ fees must first demonstrate that he was unable
to secure local counsel. Furrow never made such a
showing in this case, they argue. Nor did Furrow’s counsel
present evidence that the rate she had requested was the
rate that she normally charged clients for workers’ com-
pensation cases. Without such a foundational showing,
Jeffboat argues that the discretionary factors, such as
those contained in 20 C.F.R. 702.132, are irrelevant, since
those factors can only be used to increase an hourly
rate that the plaintiff has already shown to be reasonable.
  Jeffboat then argues that the attorneys’ fees requested
in this case were unreasonable. Their supporting evidence
comes from the four cases that they brought before the
ALJ establishing that the market rate for attorneys’ fees
in southern Indiana is considerably less than the
$261 per hour that the ALJ awarded. Only one of these
cases, James E. Huff v. Mike Fink Restaurant, Benson’s Inc.,
33 BRBS 179 (Nov. 22, 1999), involved the Longshore Act,
and that case was decided in 1999. Of the other three cases,
Franklin College v. Turner, 844 N.E.2d 99, 105 (Ind. App.
2006), was a collection action for delinquent Perkins
Loans; Hill v. Davis, 850 N.E.2d 993, 997 (Ind. App. 2006),
was a landlord-tenant dispute; and Johnson v. Dawson, 856
6                                                 No. 07-3834

N.E.2d 769 (Ind. App. 2006) was a dispute over the con-
struction of a second garage in a residential subdivision.
  Jeffboat appears to be reading extra requirements into
both the Supreme Court’s case law and this circuit’s case
law. The precedents on this issue require the attorneys’ fee
to be reasonable within the “community.” See Blum, 465
U.S. at 895; see also Spegon v. Catholic Bishop of Chicago, 175
F.3d 544, 555 (7th Cir. 1999) (finding that a reasonable
hourly 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.”). Jeffboat takes the
word “community” to mean “local market area.” It would
be just as consistent, however, to read the word as
referring to a community of practitioners; particularly
when, as is arguably the case here, the subject matter of
the litigation is one where the attorneys practicing it are
highly specialized and the market for legal services in
that area is a national market.
  Nor is Jeffboat correct that Mathur requires proof that a
plaintiff first attempted to find local counsel before
hiring an out-of-area attorney. Mathur held that “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 . . . .” Mathur, 317 F.3d at 744. While we also noted
that the judge could adjust an out-of-town attorney’s rate
downward when calculating the lodestar amount if local
counsel could have provided comparably effective legal
services and the rate of the out-of-town practitioner
was higher than the local market rate, the decision to do
No. 07-3834                                                7

so was within the discretion of the judge making the
award. Id. Contrary to Jeffboat’s argument, our cases have
consistently recognized that an attorney’s actual billing
rate for comparable work is presumptively appropriate
for use as a market rate when making a lodestar calcula-
tion. Spegon, 175 F.3d at 555.
  Nor is Jeffboat correct in asserting that Furrow had not
established that his attorney’s hourly rate was in line
with the attorneys’ fees requested in this case. The petition
for attorneys’ fees, while acknowledging that Furrow’s
attorney did not bill by the hour, established a baseline
hourly rate of $250 to $340 per hour, and substantiated
this rate with evidence that it was consistent with market
rates for specialized legal services in Connecticut. Given
our preference for awarding attorneys’ fees that are
commensurate with what an attorney would otherwise
have earned from paying clients, the ALJ did not abuse
his discretion by using $261 per hour as a reasonable
hourly rate for purposes of the lodestar calculation. Nor
did he abuse his discretion by not adjusting this rate
downward in light of Jeffboat’s evidence about market
rates in Indiana; as we explained above, Jeffboat’s cases
were not especially relevant to this case. At any rate,
whether or not a given matter could have been handled
just as competently by a local attorney is a discretionary
issue left to the judge making the attorneys’ fee award, and
the ALJ was entitled to find that Furrow would need to
seek counsel outside of southern Indiana. We note, how-
ever, that the hourly rate used in this case is apparently
not out of line for Longshore Act cases in the same locality.
8                                               No. 07-3834

Decker v. Jeffboat established that an ALJ in the same
jurisdiction had previously awarded similar legal fees for
similar work. Jeffboat only challenges the relevance of
Decker by claiming that they did not dispute the attorneys’
fee award in that case. Nothing in the case law requires
that a party show that the hourly rate they have requested
has previously been disputed and upheld, however.
Indeed, a previous attorneys’ fee award is useful for
establishing a reasonable market rate for similar work
whether it is disputed or not.
  As the award was in line with the reasonable market
rate, the ALJ obviously did not make an upward adjust-
ment to the market rate when considering the factors
cited in 20 C.F.R. 702.132. Rather, that section of the
regulations instructs administrative law judges to
calculate an award of attorneys’ fees based on a rea-
sonable hourly rate multiplied by the number of hours
worked, and to consider among other factors the quality
of an attorney’s representation when making the award.
As the decision in the present case was a reasonable
one, the quality of Furrow’s attorney is just an additional
factor supporting the award.
  We thus conclude that the ALJ did not abuse his discre-
tion by determining that the hourly rate requested by
Furrow’s attorney was reasonable and in line with the
hourly rate for lawyers of similar ability and experience in
the community.
No. 07-3834                                              9

                     III. Conclusion
  For the foregoing reasons, we A FFIRM the decision of the
Benefits Review Board upholding the ALJ’s award of
attorneys’ fees.

                          1-13-09