DL, ET AL., APPELLANTS v. DISTRICT OF COLUMBIA, A MUNICIPAL CORPORATION, ET AL., APPELLEES
No. 18-7004
Unitеd States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Decided May 21, 2019
Argued March 19, 2019
Appeal from the United States District Court for the District of Columbia (No. 1:05-cv-01437)
Carolyn Smith Pravlik argued the cause for appellants. With her on the briefs were Todd A. Gluckman and Cyrus Mehri. Margaret A. Kohn entered an appearance.
Michael T. Kirkpatrick and Allison M. Zieve were on the brief for amici curiae Public Citizen, Inc., et al., in support of appellants.
Lucy E. Pittman, Assistant Attorney General, Office of the Attorney General for the District of Columbia, argued the cause for appellees. With her on the brief were Karl A. Racine, Attorney General, and Loren L. AliKhan, Solicitor Genеral. Caroline S. Van Zile, Deputy Solicitor General, entered an appearance.
Charles W. Scarborough, Attorney, U.S. Department of Justice, argued the cause for amicus curiae United States of America supporting appellees. With him on the brief was Jessie K. Liu, U.S. Attorney.
Before: GARLAND, Chief Judge, TATEL, Circuit Judge, and SENTELLE, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge TATEL.
Dissenting opinion filed by Senior Circuit Judge SENTELLE.
In this case, after plaintiffs prevailed in a long-running Individuals with Disabilities Education Act class action, the district court accepted the District of Columbia‘s invitation to rely on the USAO‘s new matrix in awarding fees. But as we explain below, the new matrix departs from the statutory requirement that reasonable fees be tethered to “rates prevailing in the
I.
We begin by reviewing the elementary principles governing fee-shifting rate calculations and the genealogy of fee matrices in this circuit, and then turn to the history of this particulаr case.
A.
As Congress enacted a growing number of laws securing civil rights, it confronted a problem: “enforcement would prove difficult” without private lawsuits, and would-be plaintiffs needed skilled lawyers to guide them through the obstacle course of complex litigation. Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 401 (1968). But those plaintiffs often lacked financial resources “indispensable” to attracting “competent counsel” willing and able to take on defendants of greater means. Save Our Cumberland Mountains, Inc. v. Hodel, 857 F.2d 1516, 1521 (D.C. Cir. 1988) (en banc) (internal quotation marks and emphasis omitted). So Congress turned to fee-shifting provisions, simultaneously “encourag[ing] plaintiffs to bring suit” and allowing those who prevail to finance the cost of legal assistance by recovering fees from the defendant. Mary Frances Derfner & Arthur D. Wolf, 1 Court Awarded Attorney Fees ¶ 5.03, § 7(a) (2018 ed.); accord Piggie Park, 390 U.S. at 402 (“Congress therefore enacted the provision for counsel fees . . . to encourage individuals injured . . . to seek judicial relief . . . .“). “[O]ver 100 separate statutes” now provide “for the award of attorney‘s fees.” In re Donovan, 877 F.2d 982, 991 (D.C. Cir. 1989) (internal quotation marks omitted); see also Congressional Research Service, Report 94-970, Awards of Attorneys’ Fees by Federal Courts and Federal Agencies 57–117 (Oct. 22, 2009) (listing them).
The basic formula for calculating an attorney fee award seems straightforward: multiply “the number of hours reasonably exp[е]nded in litigation” by “a reasonable hourly rate or ‘lodestar.‘” Cumberland Mountains, 857 F.2d at 1517. The Supreme Court has offered guidance about how to perform that calculation, explaining that “reasonable fees” are those grounded in rates “prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.” Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984). The statute at issue here, the Individuals with Disabilities Education Act (IDEA), codifies that interpretation of “reasonable“: “Fees awarded under [IDEA] shall be based on rates prevailing in the community in which the action or proceeding arose for the kind and quality of services furnished.”
Implementing this relatively simple definition has proven vexing. See Reed v. District of Columbia, 843 F.3d 517, 521 (D.C. Cir. 2016) (“[D]etermining . . . the prevailing market rate[] is ‘inherently difficult.‘” (quoting Eley v. District of Columbia, 793 F.3d 97, 100 (D.C. Cir. 2015))). We have operationalized it with a burden-shifting framework: To begin, “a fee applicant bears the burden of establishing entitlement to an award . . . and justifying the reasonableness of the rates.” Covington v. District of Columbia, 57 F.3d 1101, 1107 (D.C. Cir. 1995). At that point, the claimed fee “is presumed to be the reasonable fee
For either party, a matrix showing the average hourly price tag of comparable lawyers may “provide a useful starting point” in calculating market rates. Id. But because such “matrices are somewhat crude,” the matrix‘s proponent usually cannot stop there. Id. Instead, the proponent may point to additional evidence, which can include “surveys to update the matrix; affidavits reciting the precise fees that attorneys with similar qualifications have received from fee-paying clients in comparable cases; and evidence of recent fees awarded by the courts or through settlement to attorneys with comрarable qualifications handling similar cases.” Id. No particular type of evidence can be considered gospel; “evidence of the prevailing market rate can take many forms.” Eley, 793 F.3d at 104 n.5.
The first and most influential matrix in this circuit debuted in Laffey v. Northwest Airlines, Inc., a 1983 Title VII and Equal Pay Act case. 572 F. Supp. 354 (D.D.C. 1983), affirmed in part, reversed in part, 746 F.2d 4 (D.C. Cir. 1984), overruled in part, Cumberland Mountains, 857 F.2d 1516. In those fledgling days—before big data, Google, or a prolific cottage industry dedicated to studying the legal profession—the prevailing plaintiff‘s attorney created a fee schedule by “inquir[ing] into the billing rates of firms in Washington, D.C., which [were] engaged in active litigation practice in the federal courts” and collecting “affidavits . . . giving specific rate information, supporting and substantiating the rates described.” First Rezneck Affidavit ¶ 9, Laffey v. Northwest Airlines, Inc., No. 1:70-cv-02111-AER (D.D.C. Mar. 17, 1983), Joint Appendix (“J.A.“) 571–72. A star was born. See Eley, 793 F.3d at 100 (describing the Laffey matrix as “[t]he most commonly used fee matrix” in this circuit “for lawyers who practice ‘complex federal litigation‘“).
We endorsed the Laffey matrix in Save Our Cumberland Mountains, Inc. v. Hodel. Sitting en banc, we “commend[ed] its use for the year to which it applie[d]” and suggested “the compiling of a similar schedule of prevailing community rates for other relevant years.” Cumberland Mountains, 857 F.2d at 1525. Joseph Yablonski, a Washington, D.C. litigator, answered that call by speaking “with attorneys from” seven major law firms and comparing the rates he “found with the rates set forth in two broad-ranging surveys of hourly rates published in the National Law Journal.” Yablonski Declaration ¶¶ 5–6, Broderick v. Ruder, No. 1:86-cv-01834-JHP (D.D.C. 1989), J.A. 624–25. Yablonski‘s labors updated Laffey‘s rates through 1989. Somewhat сonfusingly, litigants routinely refer to both the original 1983 matrix and Yablonski‘s 1989 update as the ”Laffey matrix.”
In the following decades, hourly rate disputes in this circuit often revolved around whether a case was sufficiently complex to warrant Laffey rates, see, e.g., Reed, 843 F.3d at 525–26 (addressing that question in an IDEA case), and, if so, how best to update the Laffey matrix for inflation, see Eley, 793 F.3d at 101 (describing that debate). The USAO maintained one version of the matrix, relying on the original 1983 base data updated through a Bureau of Labor Statistics inflation index that tracks regional price increases in all goods. Id. Some plaintiffs’ attorneys argued that this index failed to capture the true rate of inflationary change and began advancing a version of the 1989 Laffey data updated with a different Bureau of
Since 2015, however, the USAO has undertaken a major effort to replace the Laffey datasets by using a more current rate survey as the base for a brand new matrix. For those figures, the USAO turned to the annual Survey of Law Firm Economics, published by ALM Legal Intelligence (“ALM“) in conjunction with the National Law Journal. The off-the-rack version of that survey publishes hourly rate data for thousands of lawyers engaged in all types of practice, all over the country. The USAO custom ordered a subset of the 2011 survey‘s data covering the “Washington, D.C. metro area,” defined by the Census Bureau to include portions of Virginia, Maryland, and West Virginia. Plaintiffs’ Exhibit 84, DL v. District of Columbia, 1:05-cv-01437-RCL, ECF No. 566-17 (D.D.C. May 21, 2017), J.A. 1573. This tailored dataset summarizes “standard hourly billing rates” for 350 attorneys, yielding average rates hundreds of dollars below those reflected in the LSI Laffey matrix. Id. The USAO intends to update ALM‘s 2011 data for inflation using still another index focusing on industry-specific price increases nationwide.
B.
This case began almost fifteen years ago when plaintiffs, parents of several children aged three to six, filed suit “alleging a ‘pervasive and systemic’ breakdown in the” District of Columbia‘s compliance with IDEA resulting from the District‘s failure “to identify large numbers of disabled children and delivering inadequate and delayed [educational] services to many others.” DL v. District of Columbia, 860 F.3d 713, 718 (D.C. Cir. 2017). Following a protracted dispute regarding class certification resulting in two separate trips to this court, extensive motions practice, and two separate bench trials, “the district court issued a 130-page opinion finding the District liable” on most counts and ordered sweeping injunctive relief. Id. at 719–20. We affirmed “in all respects.” Id. at 717.
As plaintiffs had prеvailed on the majority of their claims, fee litigation commenced. Although the parties contested many issues in the district court, all but the hourly rate have dropped out on appeal. Plaintiffs sought attorney fees based on the LSI version of the Laffey matrix. The District offered the new USAO matrix as an alternative. Both sides produced a pile of evidence purporting to prove that their matrix better reflects the relevant rates, including affidavits from economists and attorneys; various commercially-available rate surveys; and information regarding fees requested, awarded, and settled on in other cases.
The district court began by finding that both matrices were “presumptively” applicable to “complex federal litigation.” DL v. District of Columbia, 267 F. Supp. 3d 55, 69 (D.D.C. 2017). Comparing the two, however, the court was more persuaded by the USAO‘s new matrix, especially its statistically significant sample size and “more narrowly defined” experience categories. Id. at 69–70. Thus, despite plaintiffs’ objection that the data underlying the USAO‘s new matrix incorporates rates for non-litigators
II.
Simply stated, the question before us is whether the district court abused its discretion in determining that the hourly rates in the USAO‘s matrix are “reasonable.” Recall that IDEA makes express a requirement that inheres in any statutory provision for “reasonable attorney‘s fees“: such fees must be calculated using “rates prevailing in the community in which the action or proceeding arose for the kind and quality of services furnished.”
A.
We begin with the District‘s argument that plaintiffs failed to meet their initial burden to support with specific evidence their claim that the LSI Laffey rates satisfy the statute‘s command. Our recent opinion in Salazar v. District of Columbia, however, all but compels the conclusion that plaintiffs cleared that bar. The Salazar plaintiffs relied on the same types of evidence in essentially the same level of detail to support the same rate matrix (for a slightly earlier year). 809 F.3d at 64–65. That evidence, we concluded, was more than enough to pass the burden onto the District. Id. at 65 (“With these numbers and submissions in the record, the district court‘s point that the LSI-adjusted matrix is probably a conservative estimate of the actual cost оf legal services in this area, does not appear illogical.” (internal quotation marks omitted)). The District has given us no reason to reach a different conclusion on such a similar record.
B.
The meatier question, then, is whether the District satisfied its rebuttal burden. The USAO‘s new matrix formed the cornerstone of the rebuttal case, and the district court treated that matrix as “presumptively” applicable. DL, 267 F. Supp. 3d at 69. We are at a loss to understand the basis of that presumption, given that this court had yet to review the new matrix. The proper inquiry, under the applicable legal principles, was whether the District supported its matrix with “equally specific countervailing evidence.” Covington, 57 F.3d at 1109 (internal quotation marks omitted).
The District contends that the USAO‘s more recent raw data and statistically significant sample size make its matrix superior to plaintiffs’ favored LSI Laffey matrix. Crucially, however, those traits
To begin with, the USAO‘s matrix incorporates rates for the wrong types of practitioner. The parties and the district court agree that this case qualifies as “complex federal litigation.” DL, 267 F. Supp. 3d at 69. Yet rather than confine its data to rates charged by attorneys practicing that genre of litigation—or even just litigators in general—the survey that the USAO drew from incorporates rates from all types of lawyers. Respondents include real estate lawyers, family lawyers, and insurance lawyers—lawyers manifestly not offering “the kind and quality of services furnished” by these plaintiffs’ attorneys, as the statute requires of comparators.
Compounding this first error, the USAO‘s custom-ordered dataset surveys lawyers far beyond the “community in which th[is] action . . . arose.”
Calling in reinforcements, the District points to a growing consensus among the district judges in this circuit that the USAO matrix is superior to Laffey. See, e.g., Lewis v. District of Columbia, No. 1:15-cv-521-JEB, 2018 WL 6308722, at *8 (D.D.C. Dec. 3, 2018) (collecting cases). Many of those cases repeat the district court‘s fundamental error here: none finds, based on record evidence, that the new matrix is based on rates for complex federal litigators in the District. See id. at *9 (no response to the plaintiff‘s objection that the new USAO matrix “reflects all types of legal services“); Gatore v. United States Department of Homeland Security, 286 F. Supp. 3d 25, 42-43 (D.D.C. 2017) (no response to observatiоn that the USAO‘s survey may be “over-inclusive“); Electronic Privacy Information Center v. United States Drug Enforcement Administration, 266 F. Supp. 3d 162, 170–71 (D.D.C. 2017) (no discussion of survey composition); Clemente v. Federal Bureau of Investigation, No. 1:08-cv-1252-BJR, 2017 WL 3669617, at *5 (D.D.C. Mar. 24, 2017) (merely describing the new USAO matrix as “measur[ing] rates in the legal services industry“). Others apparently lacked the benefit of any briefing on the new matrix‘s flaws. See, e.g., Wadelton v. Department of State, No. 1:13-cv-412-TSC, 2018 WL 4705793, at *12 (D.D.C. Sept. 30, 2018) (adopting new USAO matrix sua sponte “[a]lthough the parties ha[d] not briefed” it); National Security Counselors v. Central Intelligence Agency, No. 1:11-cv-444-BAH, 2017 WL 5633091, at *17 (D.D.C. Nov. 21, 2017) (employing the new USAO matrix after plaintiffs offered “no analysis of the USAO‘s newest methodology“). So, even sympathizing with the district court‘s appetite for more recent data, we are unpersuaded by its decision to embrace newer but irrelevant figures.
Despite the evidentiary defects in the record, the District оffers an alternative basis for affirming: its supplemental proof demonstrates that the USAO‘s matrix accurately reflects complex litigation rates in the District of Columbia. But the district court made no findings about the evidence the District uses to back up that claim, and some of that data appears to be of dubious value. For example, the District‘s primary redoubt comprises two sets of nationwide data from the 2014 ALM survey. But it is not at all obvious that these nationwide datasets are useful comparators for rates in the District. See National Law Journal & ALM Legal Intelligence, The Survey of Law Firm Economics, 139–41 (2011 ed.), J.A. 1485–87 (showing that rates in the District substantially exceed those in most other jurisdictions). Nonetheless, mindful of the district court‘s primary factfinding role, we leave it for that court to assess on remand the impact, if any, of the District‘s remaining market evidence and to take further evidence if necessary to arrive at a “reasonable rate.”
C.
The District argues that “even if” we reject the USAO‘s new matrix—as we now have—“that does not mean that
To be sure, the district court identified other concerns regarding the LSI Laffey matrix, including (1) the age of the raw data; (2) whether it captures a truly representative sample of complex federal litigators; and (3) the grouping of attorneys into just five experience bands. DL, 267 F. Supp. 3d at 69–70. These observations suggest that as time passes, the Laffey matrix may well—like shoulder pads, eight-tracks, and other ‘80s fads before it—be losing its shine. In this particular case, however, the District raised no argument that these issues justify rates somewhere between the two matrices. See Appellee‘s Br. 25. Therefore, it has forfeited any such contention. Al-Tamimi v. Adelson, 916 F.3d 1, 6 (D.C. Cir. 2019) (“A party forfeits an argument by failing to raise it in his opening brief.“).
D.
One last issue remains: the rates for plaintiffs’ only lawyer who regularly bills fee-paying clients, Cyrus Mehri. We see no reason why the rates that apply to the rest of plaintiffs’ lawyers would yield inadequate compensation for Mehri‘s services. Plaintiffs contend that Mehri is instead entitled to his usual billing rate, but his spаrse affidavit tells little about whether his relatively minimal contributions to the case differ sufficiently from his colleagues’ to warrant a different methodology. Mehri Affidavit, No. 1:05-cv-01437-RCL, ECF No. 537-17 (Sept. 26, 2016), J.A. 428–29 (asserting he “did work related to class certification” and tried to “broker a resolution to this case“). As Eley instructs, the focus is properly on the market rate “charged by for-profit lawyers” for “the same type of litigation.” 793 F.3d at 105. And although stating in his affidavit that he charges the same rate no matter what type of work he performs, Mehri nowhere represents that a client on the market would hire him at that rate for the types of services he performed in this сase. Accordingly, the district court did not abuse its discretion by compensating Mehri using the same method as his co-counsel.
Not so long ago, the prevailing belief was that parties would often be able to agree on reasonable attorney‘s fees. See Hensley, 461 U.S. at 437 (“Ideally, of course, litigants will settle the amount of a fee.“). We regret that this prophecy has gone unfulfilled and fervently hope that practitioners in this circuit—on both the plaintiff and defense sides of the bar—will work together and think creatively about how to produce a reliable assessment of fees charged for complex federal litigаtion in the District. In the meantime, however, we must discharge our duty to ensure that the adversarial alternative produces results that respect Congress‘s mandates. Because the fee award in this case falls short of that goal, we vacate it and remand for further proceedings consistent with this opinion.
So ordered.
SENTELLE, Senior Circuit Judge, dissenting: Ambrose Bierce defined a lawyer as “[o]ne skilled in circumvention of the law.” Ambrose Bierce, The Unabridged Devil‘s Dictionary 147 (Univ. of Georgia Press 2000). Though I do not suggest that this is an accurate description, I nonetheless would observe that the jurisprudence of IDEA litigation attorney-fee awаrds well establishes that lawyers and jurists are professionals skilled in complicating the law. The jurisprudential odyssey on this sea began with a rather straightforward mandate from Congress in
More specifically, Congress provided that, “[i]n any action or proceeding brought [under the IDEA provision providing judicial relief], the court, in its discretion, may award reasonable attorneys’ fees as part of the costs.”
“[T]he standard governing appellate review of a district court‘s finding of [facts] is that set forth in
Indeed, we have expressly held in previous IDEA class litigation that “[w]e review the district court‘s fee award for abuse of discretion, and will not upset its hourly rate determination absent clear misapplication of legal principles, arbitrary factfinding, or unprincipled disregard for the record evidence.” Eley v. District of Columbia, 793 F.3d 97, 103 (D.C. Cir. 2015) (emphasis added) (internal quotation marks and citations deleted). In spite of this standard, in the present case, the majority reviews the district court‘s determination
The majority asks not whether the district court committed a clear misapplication of legal principles, or arbitrary factfinding, or unprincipled disregard for record evidence, but rather whether the district court‘s findings of fact fit within a detailed grid, the Laffey Matrix, which might be construed as a proffer by the prevailing party for findings of fact, but more closely resembles a detailed regulation adopted by some government agency after an appropriate period of notice and comment.
The district court found another matrix to be more factually appropriate. The making of that factual determination, under the law in general and under the governing statute in particular, is the district court‘s province. I grant that we as an appellate reviewing court have participated in the establishment of this legislation-like matrix. I further realize that we have the authority to establish precedent binding upon district courts and upon panels of this court such as this one. LaShawn A. v. Barry, 87 F.3d 1389, 1395 (D.C. Cir. 1996) (en banc). Nonetheless, I have always understood our authority to make binding precedents to govern matters of law, not findings of fact. The present controversy concerns a matter of fact. This, under the binding precedent of both this circuit and the Supreme Court and the Rules of Civil Procedure is within the discretion of the district court, subject only to the limited review described above.
While not necessary to my dissent, I further note that appellants proffered nothing to convince me that the LSI Matrix preferred by them is inherently more appropriate for the findings required by the district court in this case than the USAO Matrix relied upon in the district court‘s findings. Appellants’ argument rests on the proposition that the award should have been based on fees determined by survey of a specific subcategory of attorneys out of the several set forth in their preferred matrix: specifically, practitioners in complex federal litigation in Washington, D.C. The matrix employed by the district court instead considered the rates of a broader sampling of attorneys from a broader geographic area, including not only the District of Columbia, but also adjacent portions of three states. It is not apparent how this was an abuse of discretion of the sort that would make the court‘s determination reversible under the standard set forth in the rules and blessed in Anderson v. Bessemer City, and a multitude of other cases.
Appellants seem to argue that the district court‘s determination was inconsistent with Congress‘s instructions in section
My colleagues disagree. I respectfully dissent.