Deadra L. COMBS, Plaintiff-Appellant v. CITY OF HUNTINGTON, TEXAS, Defendant-Appellee.
No. 15-40436
United States Court of Appeals, Fifth Circuit.
Filed July 15, 2016
829 F.3d 388
Robert T. Cain, Jr., Attorney, Galen Robert Alderman, Jr., Esq., Erika Leigh Neill, Alderman Cain & Neill, P.L.L.C., Lufkin, TX, for Defendant-Appellee.
Before STEWART, Chief Judge, and JONES and DENNIS, Circuit Judges.
CARL E. STEWART, Chief Judge:
Plaintiff-Appellant Deadra Combs brought a Title VII sexual harassment suit against the City of Huntington (the “City“), asserting hostile work environment, quid pro quo, and retaliation claims. Combs succeeded only on her hostile work environment claim and was awarded a fraction of the damages she sought. Combs then moved for attorney‘s fees. After calculating the lodestar, the district court reduced the fee award, concluding that the ratio between attorney‘s fees and damages was excessively disproportionate. Combs appeals, contending that the district court abused its discretion by reducing the award. Because there is no requirement of strict proportionality between attorney‘s fees and damages, we VACATE the fee award.
I.
The City hired Combs as a municipal court clerk in September 2008. From the time she was hired until August 2010, Combs reported to Bruce Milstead, the City Manager. Combs asserted that, over the course of her employment, Milstead subjected her to frequent sexual harassment. Combs eventually filed a Charge of Discrimination with the Equal Employment Opportunity Commission (“EEOC“) in December 2010. The City terminated Combs on February 1, 2011. Combs then filed a Title VII sexual harassment suit against the City, contending that (1) she was the victim of quid pro quo harassment, (2) the City failed to alleviate a hostile work environment, and (3) her discharge was retaliation for filing an EEOC charge.
The case proceeded to a jury trial, and each of Combs‘s theories was submitted to the jury. During jury deliberations, the parties stipulated that Combs would be entitled to $123,027.35 in back pay if the jury found in her favor on her quid pro quo and retaliation claims. In addition, Combs asked the jury to award her $100,000 in damages on her sexual harassment claim and $100,000 in damages on the claims related to her termination. Combs thus sought a total of $323,027.35 in damages. The jury found in favor of the City on Combs‘s quid pro quo and retaliation claims, eliminating the possibility of a back pay award. The jury found in Combs‘s favor only on her hostile work environment claim and awarded just $5,000 in damages.
Because she was a prevailing party under Title VII, Combs moved for attorney‘s fees, seeking compensation for lead counsel Mark Aronowitz and his co-counsel Julia Hatcher (together, “Plaintiffs’ counsel“), who represented Combs during the litigation. In calculating the lodestar, the district court determined that some of the requested hours were not properly included and thus reduced the total number of hours billed; the court, however, accepted the hourly rates proposed by Plaintiffs’ counsel: $305 for Aronowitz and $375 for Hatcher. Plaintiffs’ counsel also proposed a
The court then considered whether the lodestar should be adjusted due to any of the factors enumerated in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.1974) (the ”Johnson factors“),1 abrogated on other grounds by Blanchard v. Bergeron, 489 U.S. 87, 109 S.Ct. 939, 103 L.Ed.2d 67 (1989). Relying on Migis v. Pearle Vision, Inc., 135 F.3d 1041 (5th Cir.1998), the City contended that Combs‘s limited success—prevailing on only one claim and receiving only $5,000 in damages—required a reduction of the lodestar. The district court agreed, concluding that it was “constrained by the holding in Migis, to reduce the total to something less than 6.5 times the actual damages awarded.” It then reduced the fee award to $25,000, an amount five times the damages awarded to Combs. Combs timely appealed.
II.
A prevailing litigant may not ordinarily collect an attorney‘s fee from the loser absent some statutory exception. See Indep. Fed‘n of Flight Attendants v. Zipes, 491 U.S. 754, 758, 109 S.Ct. 2732, 105 L.Ed.2d 63 (1989). One such congressionally-created exception is Title VII of the Civil Rights Act of 1964, which allows a district court to award reasonable attorney‘s fees to the prevailing party. See id. (citing
III.
Combs challenges the district court‘s reduction of the fee award, contending that (1) the Supreme Court has overruled this court‘s method of calculating attorney‘s fees; (2) a low damages award is an inadequate basis to adjust the lodestar; and (3) the district court abused its discretion in proportionally reducing the lodestar under Migis.
A.
In this circuit, courts apply a two-step method for determining a reasonable attorney‘s fee award. See Jimenez v. Wood Cty., 621 F.3d 372, 379 (5th Cir.2010), on reh‘g en banc, 660 F.3d 841 (5th Cir.2011).2 The court must first calculate the lodestar, “which is equal to the number of hours reasonably expended multiplied by the prevailing hourly rate in the community for similar work.” Id. In calculating the lodestar, “[t]he court should exclude all time that is excessive, duplicative, or inadequately documented.” Id. at 379-80. Though the lodestar is presumed reasonable, see Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 553-54, 130 S.Ct. 1662, 176 L.Ed.2d 494 (2010), the court may enhance or decrease it based on the twelve Johnson factors, see Jimenez, 621 F.3d at 380. “The court must provide ‘a reasonably specific explanation for all aspects of a fee determination.‘” Id. (quoting Perdue, 559 U.S. at 558).
Despite this precedent, Combs asserts that the Supreme Court‘s decision in Perdue limits the two-step method to only “the most unusual circumstances.” We do not agree that Perdue is so broad.
In Perdue, the Supreme Court considered whether the lodestar could be enhanced “due to superior performance and results.” 559 U.S. at 546. In the underlying lawsuit, the plaintiffs, children in the Georgia foster-care system and their representatives, brought a class action against Georgia‘s governor and numerous state officials, asserting that various deficiencies in the state‘s foster-care system violated their statutory and constitutional rights. Id. at 547. The underlying class action settled, and the Plaintiffs’ attorneys sought more than $14 million in fees under
The Court vacated the award. See id. at 557-59. First, the Court observed that
The Court then turned to the precise issue at hand: “whether either the quality of an attorney‘s performance or the results obtained are factors that may properly provide a basis for an enhancement.” Id. at 554. Because “superior results are relevant only to the extent it can be shown that they are the result of superior attorney performance,” the Court considered only “whether superior attorney performance can justify an enhancement.” Id. The Court concluded that superior attorney performance could warrant an enhancement but limited such enhancements to three rare and exceptional circumstances, all of which “require specific evidence that the lodestar fee would not have been ‘adequate to attract competent counsel.‘” Id. at 554-55 (quoting Blum v. Stenson, 465 U.S. 886, 897, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984)). Because the district court failed to “provide proper justification for the large enhancement it awarded,” the Court held that the fee award could not stand. Id. at 557.
Combs argues that Perdue clearly disfavors applying the Johnson factors to determine a fee award and instead requires the use of only the lodestar. We agree that Perdue requires courts to first calculate the lodestar; indeed, this has long been our practice. See, e.g., League of United Latin Am. Citizens No. 4552 (LULAC) v. Roscoe Ind. Sch. Dist., 119 F.3d 1228, 1232 (5th Cir.1997) (“The method by which the district court calculates an attorneys’ fees award is well established. The district court first calculates the ‘lodestar.‘“). But Perdue does not, as Combs contends, make it impermissible to then consider any relevant Johnson factors. Perdue cautions against the sole use of the Johnson factors to calculate a reasonable attorney‘s fee but nowhere calls into question the use of relevant Johnson factors to make this determination. Indeed, Perdue expressly allows adjustments “in those rare circumstances in which the lodestar does not adequately take into account a factor that may properly be considered in determining a reasonable fee.” 559 U.S. at 554.
Combs next asserts that Perdue requires that reductions to the lodestar, like enhancements to it, be allowed only where the outcome of the litigation is directly tied to the attorney‘s performance. Not so. In Perdue, the Court emphasized that it is enhancements that must be rare because, instead of merely guaranteeing adequate representation, they can result in a windfall to attorneys. See id. at 559 & n. 8. As the Court explained, “unjustified enhancements that serve only to enrich attorneys are not consistent with the ... aim” of fee-shifting statutes. Id. at 559. Thus, excellent results should usually result only in “a fully compensatory fee“—the lodestar. See Hensley v. Eckerhart, 461 U.S. 424, 435, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). Consistent with Hensley, the Court repeatedly explained prior to Perdue that the lodestar may be increased only in extraordinary circumstances. See City of Burlington v. Dague, 505 U.S. 557, 562, 112 S.Ct. 2638, 120 L.Ed.2d 449 (1992) (“We have established a strong presumption that the lodestar represents the reasonable fee, and have placed upon the fee applicant who seeks more than that the burden of showing that such an adjustment is necessary to the determination of a reasonable fee.” (internal quotation marks and citations omitted)); Del. Valley Citizens’ Council, 478 U.S. at 565 (stating that lodestar enhancements, while permissible, “are proper only in certain ‘rare’ and ‘exceptional’ cases” and noting that fee-shifting statutes are not designed “to improve the financial lot of attorneys“). Perdue
And though the lodestar is presumed reasonable, it may be adjusted where it “does not adequately take into account a factor that may properly be considered in determining a reasonable fee.” Perdue, 559 U.S. at 554. A plaintiff‘s limited success is just such a factor. In Hensley, the Supreme Court explained that “the most critical factor” in determining a reasonable fee “is the degree of success obtained.” 461 U.S. at 436. There, the Court endorsed using “the important factor of the ‘results obtained‘” to decrease the lodestar, noting that where a plaintiff achieves “only partial or limited success,” the lodestar may be excessive. Id. at 434, 436. Perdue, consistent with the Court‘s frequent pronouncements, explains that lodestar enhancements are to be rare. But it provides no basis to depart from Hensley‘s rule that courts must consider the plaintiff‘s degree of success to determine whether the lodestar is excessive. See Farrar v. Hobby, 506 U.S. 103, 114, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992) (noting that the district court failed, after calculating the lodestar, to consider plaintiff‘s success in the lawsuit); see also Hensley, 461 U.S. at 436 (“Congress has not authorized an award of fees ... whenever conscientious counsel tried the case with devotion and skill. Again, the most critical factor is the degree of success obtained.“).
Combs relies on Millea v. Metro-North Railroad Co., 658 F.3d 154 (2d Cir.2011), but we find this case unpersuasive. There, citing Perdue, the Second Circuit concluded that a district court erred by reducing “the attorneys’ fee award based on the outcome of the litigation without tying that outcome to the quality of [plaintiffs] attorneys.” Id. at 169. The court explained that, absent a nominal victory, litigation outcomes are generally “only relevant to fee award calculations when they are a direct result of the quality of the attorney‘s performance.” Id. at 168. But Millea does not cite—much less reconcile—Hensley, which explained that courts must consider a plaintiff‘s limited success in determining what fee is reasonable. Hensley, 461 U.S. at 438-40. Indeed, the degree of success is the most critical factor even if “conscientious counsel tried the case with devotion and skill.” Id. at 436. We decline to adopt Millea‘s reasoning.
We also reject Combs‘s contention that Hensley applies only to cases involving multiple claims and varying levels of success. The Supreme Court has emphasized that the degree of success is the most crucial element in determining a reasonable attorney‘s fee. See Hensley, 461 U.S. at 436; accord Marek v. Chesny, 473 U.S. 1, 11, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985). “A reduced fee award is appropriate if the relief, however significant, is limited in comparison to the scope of the litigation as a whole.” Hensley, 461 U.S. at 440 (emphasis added). The Court has thus found error where a district court, in setting a fee award, simply awarded the lodestar “without engaging in any measured exercise of discretion.” Farrar, 506 U.S. at 114. Hensley‘s mandate that courts consider the limited nature of a plaintiff‘s success applies to all cases.
In sum, the district court should begin by calculating the lodestar: the reasonable hours expended multiplied by a reasonable rate. The district court
B.
Combs next argues that a low damages award should not lead the district court to reduce a fee award. In Cobb v. Miller, 818 F.2d 1227 (5th Cir.1987), we explained that “[i]n the absence of other Johnson factors justifying a reduction in a fee award, a district court should not reduce the fee award solely because of a low damages award,” because “[s]uch an approach would lead to a proportionality requirement between the amount of attorney‘s fees and the amount of damages.” Id. at 1235.
Cobb, however, predated the Supreme Court‘s decision in Farrar. There, the Court clarified the relevance of a plaintiff‘s success, explaining that “[w]here recovery of private damages is the purpose of ... civil rights litigation, a district court, in fixing fees, is obligated to give primary consideration to the amount of damages awarded as compared to the amount sought.” Farrar, 506 U.S. at 114 (quoting City of Riverside v. Rivera, 477 U.S. 561, 585, 106 S.Ct. 2686, 91 L.Ed.2d 466 (1986) (Powell, J., concurring in judgment) (omission in original)). Noting that this approach “promotes the court‘s ‘central’ responsibility to ‘make the assessment of what is a reasonable fee under the circumstances of the case,‘” id. at 114-15 (quoting Blanchard, 489 U.S. at 96), the Court explained that the district court, by simply awarding the lodestar amount, failed to “consider[] the relationship between the extent of success and the amount of the fee award,” id. at 115-16 (quoting Hensley, 461 U.S. at 438).
We have since recognized that “[a]warding attorney‘s fees based on the damages, or degree of success obtained, is completely in line with the holdings of the Supreme Court and this Circuit.”3 Flowers v. S. Reg‘l Physician Servs., Inc., 286 F.3d 798, 802 (5th Cir.2002). Accordingly, in a private civil rights suit, a district court must consider any disparity between the amount of damages sought and the amount
C.
Finally, Combs argues that the district court erred by adjusting the lodestar amount based solely on strict proportionality considerations. On this, we agree.
1.
In determining a reasonable attorney‘s fee award based on the plaintiff‘s degree of success, “[t]here is no precise rule or formula“; instead, the district court “necessarily has discretion in making this equitable judgment.” Hensley, 461 U.S. at 436-37. In City of Riverside, a Supreme Court plurality rejected the argument that fee awards “should necessarily be proportionate to the amount of damages a civil rights plaintiff actually recovers.” 477 U.S. at 574. There, the district court awarded $245,456.25 in attorney‘s fees, even though the prevailing plaintiffs had received only $33,350 in damages. Id. at 564-66. The Court determined that the district court did not abuse its discretion in making this fee award. Id. at 572-73. The plurality explained that a proportionality rule “would make it difficult, if not impossible, for individuals with meritorious civil rights claims but relatively small potential damages to obtain redress from the courts” and thus undermine Congress‘s purpose in enacting civil rights statutes such as
After City of Riverside, we have consistently emphasized that “there is no per se requirement of proportionality in an award of attorney fees.” Branch-Hines v. Hebert, 939 F.2d 1311, 1322 (5th Cir.1991); Hernandez v. Hill Country Tel. Co-Op., Inc., 849 F.2d 139, 144 (5th Cir.1988); see also West v. Nabors Drilling USA, Inc., 330 F.3d 379, 395 (5th Cir.2003) (“[U]nder civil rights statutes such as the ADEA, [t]here is no per se requirement of proportionality in an award of attorney fees.” (second alteration in original) (citation and internal quotation marks omitted)). Nevertheless, proportionality remains “an appropriate consideration in the typical case.” Hernandez, 849 F.2d at 144; see also Branch-Hines, 939 F.2d at 1322-23.
The district court read our decision in Migis as capping a fees-to-damages ratio at 6.5:1. Migis involved the recovery of attorney‘s fees in a Title VII civil rights case. 135 F.3d at 1047-48. There, though the plaintiff sought $325,000 in damages, she was ultimately awarded only $12,233.32. Id. at 1048. The district court calculated a roughly $90,000 lodestar, see id. at 1062 (Barksdale, J., concurring in part and dissenting in part); despite the plaintiff‘s limited success, the district court reduced the lodestar by only 10% and awarded $81,000 in attorney‘s fees, id. at 1047. We reversed, concluding that the district court “fail[ed] to give adequate consideration to the result obtained relative to the fee award, and the result obtained relative to the result sought.” Id. at 1048. Citing Farrar, we explained “that the plaintiff‘s monetary success in a private civil rights suit must be the primary determinant of the attorney‘s fee.” Id. Observing that the plaintiff “sought over twenty-six times the damages actually awarded” and that the fees-to-damages ratio was 6.5:1, we concluded that these ratios were too large to justify the award. Id.
But Migis does not impose a strict proportionality requirement. Instead, it simply recognized that “‘the most critical factor’ in determining the reasonableness of a fee award in a civil rights suit ‘is the degree of success obtained.‘” Id. at 1047 (quoting Farrar, 506 U.S. at 114). In Migis, the plaintiff alleged four acts of discrimination on the basis of gender or pregnancy; she prevailed on only one claim, and even then, only on the basis of pregnancy discrimination. Id. She received just over $12,000 in damages instead of the $325,000 that she sought. Id. at 1048. “By any fair measure, [her] success relative to the relief she sought was limited.” Id. The district court‘s meager 10% reduction of the fee award thus failed to adequately consider just how limited the plaintiff‘s success was. Id. at 1047; see also Migis v. Pearle Vision, Inc., 944 F.Supp. 508, 515-16 (N.D.Tex.1996) (noting that “the monetary damages awarded to plaintiff simply do not justify a fee award” of roughly $90,000 and decreasing award by only 10% without adequate explanation), aff‘d in part and rev‘d in part, 135 F.3d 1041.
And the Migis district court‘s explanation failed to “answer the question of what is ‘reasonable’ in light of” the plaintiff‘s limited success. Hensley, 461 U.S. at 439; see also id. at 439 n. 15 (observing that “a mere conclusory statement that [a] fee [is] reasonable in light of the success obtained” is not a sufficient explanation); Jimenez, 621 F.3d at 379 (requiring a “reasonably specific explanation for all aspects of a fee determination“); Gagnon v. United Technisource, Inc., 607 F.3d 1036, 1044 (5th Cir.2010) (citing Migis and vacating a fee award that “was more than six times greater than the amount of relief awarded,” but explaining that “this conclusion in no way implies that the attorney‘s fee award, if justified by a proper explanation, would be an abuse of discretion“).
2.
A district court abuses its discretion if it “relies on erroneous conclusions of law.” Allen, 813 F.3d at 572. Here, the district court explained that it was “constrained by the holding in Migis, to reduce the total to something less than 6.5 times the actual damages awarded.” The district court
IV.
We VACATE the district court‘s award of attorney‘s fees and REMAND for determination of a new fee award in accordance with this opinion.