96 F.3d 359 | 9th Cir. | 1997
Lead Opinion
This case involves a dispute as to the proper method of determining a reasonable attorney’s fee for a prevailing civil rights plaintiff. The history of the case is as follows:
Morales sued the City of San Rafael (“City”) and a San Rafael police officer, Sergeant Daniel Hulett, alleging that Hulett unlawfully arrested Morales without an arrest warrant and without probable cause in violation of 42 U.S.C. § 1988 and state law. Based upon Monell v. New York City Dept. of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978), the district court dismissed Morales’ § 1983 claim against the City and granted summary judgment as to that claim in the City’s favor. The City remained a defendant with respect to Morales’ state law claims. At trial, the jury returned a special verdict in Morales’ favor and awarded $17,500 in damages.
Morales moved the district court for an award of fees in the amount of $139,783.25,
Relying on Farrar v. Hobby, 506 U.S. 103, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992), the district court concluded that Morales should be awarded “low” attorney’s fees and that Farrar gave it the authority to set a “low” fee award without calculating a lodestar figure and without reciting the twelve factors that bear on the reasonableness of a fee award. Having engaged in no mathematical calculation and offering very little explanation of how it decided on a monetary figure, the district court awarded Morales $20,000 in attorney’s fees, just forty percent of what the defendants originally suggested.
In addition to attorney’s fees, the district court held that Morales was entitled to recover costs in the amount of $8,119.16 from Hulett and that the City was entitled to recover costs in the amount of $2,708.04 from Morales. The district court justified its imposition of costs against Morales on the grounds that Morales prevailed only against Hulett and only on the § 1983 claim and that “[i]t follows that City of San Rafael has prevailed fully against Morales.”
Morales now appeals his attorney’s fee award and the imposition of costs against him.
ANALYSIS
I.
The district court misinterpreted this court’s memorandum disposition when it concluded that we “revived the verdict only as to the 42 U.S.C. § 1983 claim.” Accordingly, it improperly concluded that the City was a prevailing party deserving of costs.
On remand, the district court awarded costs to the City based on its conclusion that the City had prevailed “fully” against Morales. However, the City prevailed only as to Morales’ § 1983 claim against it and remained a party to the action after summary judgment was granted in its favor on that claim. The jury verdict reinstated by this court was rendered in favor of Morales on his state law claims against the City.
Nowhere in our memorandum disposition do we state that only part of the jury’s verdict should be reinstated. To the contrary, we reversed the district court’s order granting JNOV and remanded the ease for entry of judgment in favor of Morales consistent with the jury’s verdict. The last paragraph of our order reads as follows:
Substantial evidence supported the jury’s verdict; the district court erred in granting JNOV. We reverse and remand. On remand, the district court shall enter judgment in favor of Morales on the jury’s*362 verdict and proceed to determine Morales’ request for attorney’s fees.
The City obviously understood that our reinstatement of the jury’s verdict made it the losing party as to the state law claims against it, as evidenced by the fact that it filed a petition for rehearing on its own behalf, as well as on behalf of Hulett, and referred throughout the petition both to “the CITY and HULETT.” Because the City was not a prevailing party eligible for costs under Federal Rule of Civil Procedure 64(d)(1), the district court erred in awarding it costs.
II.
We review an award of attorney’s fees for an abuse of discretion. Corder v. Brown, 25 F.3d 833, 836 (9th Cir.1994) (citing Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 1941, 76 L.Ed.2d 40 (1983)). “Any elements of legal analysis which figure in the district court’s decision are, however, subject to de novo review.” Corder, 25 F.3d at 836. Thus, we will overturn a district court’s fee award if it is based on an inaccurate view of the law. Corder v. Gates, 947 F.2d 374, 377 (9th Cir.1991).
Here, in determining the fee award, the district court relied on Farrar v. Hobby, 506 U.S. 103, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992), a case in which the Supreme Court considered the issue “whether a civil rights plaintiff who receives a nominal damages award is a ‘prevailing party’ eligible to receive attorney’s fees under 42 U.S.C. § 1988,” id. at 105, 113 S.Ct. at 570. The district court read Farrar as standing for the proposition that “zero or low attorney’s fees” should generally be awarded to § 1983 plaintiffs who receive damages awards that constitute a relatively small portion of the damages they seek. Instead of following the practice courts are generally required to follow when calculating attorney’s fees in civil rights cases — i.e. computing a lodestar figure and then, if necessary, making adjustments to that figure based upon reasonableness factors — the district court basically “reasoned” to what it thought was an appropriate fee in light of the fact that Morales received only $17,500 in compensatory damages. Seemingly trying to avoid a figure “too much more” than the damages award, the district court awarded Morales $20,000 for attorney’s fees.
The district court erred in its application of Farrar in this case. At the most general level, Farrar stands for the uncontroversial principle that “[i]t is an abuse of discretion for the district court to award attorneys’ fees without considering the relationship between the ‘extent of success’ and the amount of the fee award.” McGinnis v. Kentucky Fried Chicken of California, 51 F.3d 805, 810 (9th Cir.1994) (quoting Farrar, 506 U.S. at 115-16, 113 S.Ct. at 575).
However, Farrar also stands for a more limited proposition, and it is in the application of this narrow second ruling that the district court erred in this case. In Farrar, the Supreme Court created an exception to the general rule governing a district court’s calculation of attorneys’ fees. The Court held that “nominal damages” cases in which the relief is de minimis are exempted from the general requirements that govern the calculation of attorney’s fees, including the requirement that a lodestar first be calculated. 506 U.S. at 116-18, 113 S.Ct. at 576 (O’Connor, J., concurring).
Morales’ damages award of $17,500 in compensatory damages, while substantially less than what he sought,
In addition, even if Morales’ damages award were nominal, the Farrar exception would not be applicable here. Whether the plaintiffs “success is purely technical or de minimis,” id. at 117, 113 S.Ct. at 576 (O’Con-nor, J., concurring), is determined by examining other factors in addition to the amount of money damages awarded. Primary among such other considerations is “the significance of the legal issues on which the plaintiff claims to have prevailed” and the “public purpose” the plaintiffs litigation served. Id. In her concurring opinion, Justice O’Connor makes it clear that not all nominal damages awards are de minimis. Farrar, 506 U.S. at 121, 113 S.Ct. at 578 (“Nominal relief does not necessarily a nominal victory make.”). Moreover, her opinion emphasizes that, although “a substantial dif-ferenee between the judgment recovered and the recovery sought” may suggest that the plaintiffs victory is purely technical, “[t]he difference between the amount recovered and the damages sought is not the only consideration.” Id. “An award of nominal damages can represent a victory in the sense of vindicating rights even though no actual damages are proved.” Id. As we explain later, Morales achieved a significant nonmon-etary result not only for himself but for the community in general.
III.
The customary method of determining fees, which the district court should have used here, is known as the lodestar method. “The lodestar determination has emerged as the predominate element of the analysis” in determining a reasonable attorney’s fee award. Jordan v. Multnomah County, 815 F.2d 1258, 1262 (9th Cir.1987). The “lodestar” is calculated by multiplying the number. of hours the prevailing party reasonably expended on the litigation by a reasonable hourly rate. McGrath v. County of Nevada, 67 F.3d 248, 252 (9th Cir.1995). After making that computation, the district court then assesses whether it is necessary to adjust the presumptively reasonable lodestar figure on the basis of the Kerr factors
If the district court had employed the proper method of determining what constitutes a reasonable attorney’s fee award and had calculated a lodestar figure, it would have been required to consider the amount of damages Morales was awarded in assessing the overall results obtained from the litigation. The district court was not only free but obligated to consider “the results obtained” by Morales, or “the extent of [his] success,” Hensley v. Eckerhart, 461 U.S. 424, 436, 440, 103 S.Ct. 1933, 1942, 1943, 76 L.Ed.2d 40 (1983) in calculating the lodestar figure. McGinnis, 51 F.3d at 810 (stating that the number of hours used to calculate the lodestar figure must be “reasonable in relation to the success achieved”). See also Farrar, 506 U.S. at 114-16, 113 S.Ct. at 575.
However, the amount of damages recovered by Morales is not the sole indicator of the extent of his success. See Riverside v. Rivera, 477 U.S. 561, 574, 106 S.Ct. 2686, 2694, 91 L.Ed.2d 466 (1986) (plurality opinion) (“[A] civil rights plaintiff seeks to vindicate important civil and constitutional rights that cannot be valued solely in monetary terms.”); Quesada v. Thomason, 850 F.2d 537, 540 (9th Cir.1988).
CONCLUSION
The Farrar exception to the general rule requiring the district court to calculate the lodestar figure to determine an attorney’s fee applies only to nominal damages eases in which the plaintiffs success is de minimis. Success is measured not only by the amount of the recovery but also in terms of the significance of the legal issue on which the plaintiff prevailed and the public purpose the litigation served. Because the monetary award was not nominal and because Morales’ success was not minimal, this case does not fit within the Farrar exception. We vacate the attorney’s fee award and remand for a new fee determination to be made in the manner explained in Section III.
We vacate the award of costs to the City because the City was not a prevailing party eligible for costs, and conclude that, to the contrary, the City is liable to Morales for costs.
REVERSED AND REMANDED.
. Morales arrived at this figure by calculating a lodestar figure-multiplying the hourly rates of the attorneys who worked on the case by the number of hours they each expended-and then reducing that figure by the time expended on the unsuccessful Monell claim, 173.2 hours at $30,380.
Hourly Number
Attorney Rate of Hours
Peter B. Brekhus $255 266.25
Barry F. Wester $175 81.4
Matthew Brekhus $155 151.3
Linda J. Philipps $155 413.6
Kirk E. Wallace $135 25.4
Morales’ motion included extensive and detailed explanations as to why the lodestar figure of $134,759.75 was a reasonable fee in this case. The final figure of $139,783.25 includes Morales’ calculation of $5,023.50 in fees for attorney time expended in district court after the motion for fees was filed.
. We do not intend to criticize the district court in this respect and recognize that its error on remand may have resulted at least in part from the fact that our memorandum disposition was not as clear as it might have been.
. In McGinnis we held that the district court erred when it expressly refused to consider the amount of actual damages in determining the extent of the plaintiff’s success. Id. at 810 (holding that district court erred in deciding that it would not reconsider its attorney’s fee award if the plaintiff's damages award were reduced from $234,000 to $34,000).
. Justice O'Connor concurred in the majority opinion written by Justice Thomas, supplying the necessary fifth vote, but then wrote separately to explain "more fully” her view of the majority’s holding. See infra note 7.
. Morales’ counsel asked the jury to award between $150,000 and $250,000.
. Morales’ award is in stark contrast to the "one seventeen millionth” Farrar received. Id., at 121, 113 S.Ct. at 578. (Farrar sought $17 million in damages, but received an award of $1.) While Farrar does not prohibit fee awards for plaintiffs who receive nominal damages, Wilcox v. Reno, 42 F.3d 550, 555, 556 (9th Cir.1994), it is readily apparent from considering those damages awards this court has deemed "nominal” that Morales did not receive nominal damages. See, e.g., Romberg v. Nichols, 48 F.3d 453, 454 (9th Cir.1995) (each plaintiff awarded one dollar after seeking $2 million in general punitive damages), cert. denied, - U.S. -, 116 S.Ct. 379, 133 L.Ed.2d 303 (1995); Wilcox, 42 F.3d at 554 (plaintiff obtained judgment of one dollar); Forrester v. San Diego, 25 F.3d 804, 809 (9th Cir.1994) (plaintiffs did not procure relief), cert. denied, - U.S. -, 115 S.Ct. 1104, 130 L.Ed.2d 1070 (1995); Wilks v. Reyes, 5 F.3d 412, 417 (9th Cir.1993) (plaintiff awarded one dollar in nominal damages).
. The analysis outlined above parallels the approach adopted by at least two other circuits which have addressed the same issue. For example, the Seventh Circuit has expressly adopted a three-part test, derived directly from Justice O’Connor’s Farrar concurrence, for determining “whether a prevailing party has achieved a mere technical victory inappropriate for fees.” Johnson v. Lafayette Fire Fighters Ass’n Loc. 472, 51 F.3d 726 (7th Cir.1995) (citing Cartwright v. Stamper, 7 F.3d 106, 109 (7th Cir.1993)). See also Jones v. Lockhart, 29 F.3d 422, 423-424 (8th Cir.1994); A.J. by L.B. v. Kierst, 56 F.3d 849, 863 (8th Cir.1995); Milton v. Des Moines, Iowa, 47 F.3d 944, 946 (8th Cir.1995).
. The twelve Kerr factors bearing on the reasonableness are:
(1) the time and labor required, (2) the novelty and difficulty of the questions involved, (3) the skill requisite to perform the legal service properly, (4) the preclusion of other employment by the attorney due to acceptance of the case, (5) the customary fee, (6) whether the fee*364 is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and the results obtained, (9) the experience, reputation, and ability of the attorneys, (10) the "undesirability” of the case, (11) the nature and length of the professional relationship with the client, and (12) awards in similar cases.
Kerr v. Screen Guild Extras, Inc., 526 F.2d 67, 70 (9th Cir.1975), cert. denied, 425 U.S. 951, 96 S.Ct. 1726, 48 L.Ed.2d 195 (1976).
There is a strong presumption that the lodestar figure represents a reasonable fee. "Only in rare instances should the lodestar figure be adjusted on the basis of other considerations.” Harris v. Marhoefer, 24 F.3d 16, 18 (1994); Oviatt v. Pearce, 954 F.2d 1470, 1482 (9th Cir.1992). Under the lodestar approach, many of the Kerr factors have been subsumed as a matter of law. Cunningham, 879 F.2d at 487.
. Among the subsumed factors presumably taken into account in either the reasonable hours component or the reasonable rate component of the lodestar calculation are: "(1) the novelty and complexity of the issues, (2) the special skill and experience of counsel, (3) the quality of representation, ... (4) the results obtained,” Cabrales v. County of Los Angeles, 864 F.2d 1454, 1464 (9th Cir.1988), reinstated, 886 F.2d 235 (1989), cert. denied, 494 U.S. 1091, 110 S.Ct. 1838, 108 L.Ed.2d 966 (1990), and (5) the contingent nature of the fee agreement, City of Burlington v. Dague, 505 U.S. 557, 565-67, 112 S.Ct. 2638, 2643, 120 L.Ed.2d 449 (1992).
Adjusting the lodestar on the basis of subsumed reasonableness factors after the lodestar has been calculated, instead of adjusting the reasonable number of hours or reasonable hourly rate at the first step, i.e. when determining the lodestar, is a disfavored procedure. Corder v. Gates, 947 F.2d at 378. However, as long as the district court only makes one adjustment per factor, either before or after the lodestar calculation, we have found such an error to be harmless. Id.; Cabrales, 864 F.2d at 1465.
. The district court was correct that it need not "recite” the twelve Kerr factors, McGinnis v. Kentucky Fried Chicken of California, 51 F.3d 805, 809 (9th Cir.1994). The requirement is simply that it consider those factors not already subsumed in the lodestar figure.
. The plurality opinion in Riverside expressly "reject[ed] the proposition that fee awards under § 1988 should necessarily be proportionate to the amount of damages a civil rights plaintiff actually recovers.” Id. at 574, 106 S.Ct. at 2694 (affirming award of $245,456.25 in attorney's fees in civil rights litigation in which plaintiff prevailed against the city and police officers receiving $13,300 in damages). Likewise, we have repeatedly made it clear that the level of success achieved by a civil rights plaintiff should be measured by more than the amount of damages awarded. Larez v. Holcomb, 16 F.3d 1513, 1523 (9th Cir.1994) (holding that possible reduction of damages award on remand "should not necessarily” lead the district court to reduce the attorney’s fee award); Quesada, 850 F.2d 537, 539 (9th Cir.1988) (holding that "court should not reduce lodestars based on relief obtained simply because the amount of damages recovered on a claim was less than the amount requested”).
. The district court should, as we stated in McGinnis, consider what Morales’ attorney did for his “actual client.” Id. at 810. However, the assessment of the “results obtained” by the actual client in a civil rights action should not be limited to the damages award that person received but also requires consideration of the non-monetary benefits the plaintiff personally gains from the lawsuit. Moreover, as McGinnis makes clear, the benefit received by the client is only "an important measure of ‘extent of success,’ ” and must be considered along with "the benefits [conferred] on others throughout society by winning a civil rights claim.” Id. (emphasis added).
Dissenting Opinion
dissenting.
I respectfully dissent with regard to the attorney’s fees award. A lawyer’s fee of $139,788.25 for getting a client $17,500 is obscene. The district court properly determined that the amount was inappropriate under controlling law and cut the fee to $20,000. We should affirm that discretionary determination.
The majority purports to limit Farrar v. Hobby, 506 U.S. 103, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992), to nominal damages cases. Farrar applies to all 42 U.S.C. § 1988 cases. We have already established that interpretation of Farrar, and it is inescapable in the context of the line of Supreme Court decisions of which Farrar is a part. The district court applied Farrar correctly and exercised discretion appropriately:
The aforementioned $17,500 compensatory damages: (a) is only a small portion of the damages that were sought by Morales; (b) is unaccompanied by punitive damages, declaratory relief, or injunctive relief; but (c) constitutes a warning to law-enforcement officers not to treat civilians unconstitutionally. Thus, the amount of attorney’s fees awarded to Morales should be moderately, but not extremely, low. And $20,000 — a figure somewhat, but not too much, more than $15,000 [the suggested fee in defendants’ supplemental brief]— is the most appropriate amount for an attorney’s fee award to Morales.
That exercise of discretion was in accord with controlling law.
Farrar considered whether a civil rights plaintiff who receives only a nominal damages award is a prevailing party. The Fifth Circuit had held that plaintiffs who win only $1 are not prevailing parties, so attorneys’ fees cannot be awarded under Section 1988. Farrar, 506 U.S. at 107-09, 113 S.Ct. at 571. The Supreme Court affirmed the denial of fees, but on a different theory. The Court held that such a plaintiff is a prevailing party, but that attorneys’ fees awarded to prevailing parties under § 1988 must reflect the “degree of success obtained.” Id., at 114, 113 S.Ct. at 574.
The reasoning of Farrar compels the conclusion that it applies generally to section 1988 cases, not just to nominal damages cases. Farrar holds that “the most critical factor in determining the reasonableness of a fee award is the degree of success obtained.” Id., at 114, 113 S.Ct. at 574 (quotations omitted). Farrar applied the rule in Hensley v. Eckerkart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), that using the product of hours times rate as the award may be excessive in cases of “partial or limited success.” Farrar, 506 U.S. at 114, 113 S.Ct. at 574. Hensley had held, in an injunctive relief (not damages) case, that the “lodestar” fee may be excessive in cases of partial or limited success, and in such cases, “the district court should award only that amount of fees that is reasonable in relation to the results obtained.” Hensley, 461 U.S. at 440, 103 S.Ct. at 1943. Farrar made it clear that this rule applied to damages cases as well as injunc-tive relief cases, and that in a nominal damages case, the fee “reasonable in relation to the results obtained” was usually nothing.
The Supreme Court in City of Riverside v. Rivera, 477 U.S. 561, 106 S.Ct. 2686, 91 L.Ed.2d 466 (1986) affirmed an award of attorneys’ fees exceeding the amount of damages recovered by the plaintiff. A plurality, but not a majority, of the Court rejected the proposition that section 1988 fees must necessarily be no higher than the damages award, or no higher than the one third contingent fee commonly used in personal injury litigation. Id. at 574, 106 S.Ct. at 2694. The plurality conceded that “the rates charged in private representations may afford relevant comparisons.” Id. at 578 n. 9, 106 S.Ct. at 2696 n. 9. The plurality decision rejected the proposition that fee awards “should necessarily be proportionate to the amount of damages a civil rights plaintiff actually recovers,” on the theory that “[ujnlike most private tort litigants, a civil rights plaintiff seeks to vindicate important civil and constitutional rights that cannot be valued solely in monetary terms.” Id. at 574, 106 S.Ct. at 2694. The plurality considered that a strict rule limiting fee awards to monetary damages fails to reflect the important social benefits secured by a successful civil rights plaintiff. Id.
Justice Powell, the fifth vote to affirm in Riverside, “join[ed] only the Court’s judgment.” Id. at 581, 106 S.Ct. at 2697. He did not join in the plurality opinion. He thought that the “fee award seems unreasonable,” and that it would be a “rare case in which an award of private damages can be said to benefit the public interest to an extent that would justify the disproportionality between damages and fees reflected in this case.” Id. at 586 n. 3, 106 S.Ct. at 2700 n. 3. He affirmed only because the detailed findings supporting the award were not clearly erroneous, that is, because the standard of review did not permit him. to substitute his judgment for that of the district judge.
Putting these three cases together, the law is plain: while section 1988 fees are not necessarily held to a ceiling of the damages award or the one third contingent fee common in personal injury cases, the fee award has to be reasonable in relation to the results obtained, including societal benefits, and a limited success requires that a fee be limited by reasonableness in relation to the results obtained, even where the “lodestar” amount is much higher.
The majority opinion errs by requiring the district court to begin by making a lodestar calculation, and then to assess whether any
Our own decisions leave no room for the majority to adopt its different analysis of Farrar today. We have already rejected the majority’s limitation of Farrar to nominal damages cases, and we can reject our earlier decisions only by en banc review. United States v. Camper, 66 F.3d 229, 232 (9th Cir.1995).
In Corder v. Brown, 25 F.3d 833 (9th Cir.1994), where the damages award was $24,006 (not nominal), we held that under Farrar, full attorney’s fees based on multiplication of hours times rate would be unreasonable. We required the district court on remand to recalculate the fee award giving primary consideration to the fact that “the amount of damages awarded as compared to the amount of damages sought is minimal,” for which we cited Farrar. Corder, 25 F.3d at 837. Thus we applied Farrar to a case other than a nominal damages case.
In Harris v. Marhoefer, 24 F.3d 16 (9th Cir.1994), we followed Carder in another case of a moderate (not nominal) award, $25,000, and required reduction of the lodestar amount because of limited success.
We carefully considered how Farrar applied to a $34,000 award (not nominal) in McGinnis v. Kentucky Fried Chicken, 51 F.3d 805 (9th Cir.1994). We construed Far-rar to mean that “it is an abuse of discretion for the district court to award attorney’s fees without considering the relationship between the extent of success and the amount of the fee award.” Id. at 810. Because the district court expressly refused to relate the extent of success to the amount of the fee award and refused to reduce the attorney’s fee award “so that it is commensurate with the extent of the plaintiffs success,” id. at 810, we reversed. In McGinnis, plaintiffs attorney had obtained a disappointingly low compensatory damages award, considering Mr. McGinnis’s suffering, but a high punitive damages award. The punitive damages award had to be disallowed as a matter of law, so the plaintiffs success was limited. We noted that “no reasonable person would pay lawyers $148,000 [the fee sought] to win $34,000 [the damages obtained].” Id. at 810. Although the attorneys’ fees award could exceed what a reasonable individual would pay a lawyer for the private benefit, because of the public benefit associated with the plaintiffs victory, the public benefit “is not infinite,” and “[w]hat the lawyers do for their actual client is an important measure of ‘extent of success.’” Id. We held that the district court “must reduce the attorneys’ fees award so that it is commensurate with the extent of the plaintiffs success.” Id.
After Carder, Harris, and McGinnis, it is impossible, without rehearing en banc, for us to construe Farrar to apply only to nominal damages cases.
The majority also errs in substituting its judgment for the district court’s, regarding the extent of benefits Mr. Morales’s attorneys conferred on persons other than their client by their limited victory. It is firmly established that the district court has discretion over how much to award for attorney’s fees, and our review authority is limited to determining whether there was abuse of discretion. Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 1941, 76 L.Ed.2d 40 (1983); Franceschi v. Schwartz, 57 F.3d 828, 830 (9th Cir.1995); Oviatt v. Pearce, 954 F.2d 1470, 1481 (9th Cir.1992); Jordan v. Multnomah County, 815 F.2d 1258, 1261 (9th Cir.1987); Hardin v. White Mountain Apache Tribe, 779 F.2d 476, 480 (9th Cir.1985). Indeed, the reason Justice Powell gave for his fifth vote to affirm our decision in Riverside was the limited scope of appellate review. Riverside, 477 U.S. at 581-86, 106 S.Ct. at 2697-2700.
Mr. Morales’s attorney had made a formal demand for $250,000, and urged the jury to award $150,000 to $250,000 in compensatory damages, plus $500,000 in punitive damages. The jury decided that the police officer “unlawfully arrested or detained plaintiff as a result of negligent performance of his duties.” But it also decided that Mr. Morales himself was negligent and that his own negligence was also a proximate cause of his injury. They attributed 45% of the negligence to Mr. Morales and 55% to the police officer, and found total damages suffered by Mr. Morales of $17,500. Mr. Morales’s attorney wanted $139,783.25 in fees for getting his client $17,500 (the court decided that $17,500, not 55% of $17,500, was the appropriate award).
Mr. Morales won damages of $17,500, so a one-third contingent fee to would have been $5,833. That is the private market measure of the fee commensurate with the extent of success obtained for Mr. Morales. Cases like Mr. Morales’s are rarely handled on an hourly basis, because the clients cannot afford the risk of paying more than they win, and the lawyers cannot afford the risk of nonpayment. The district judge thought a fee of $20,000 took proper account of the reasonable time spent and rates chargeable, the extent of success for Mr. Morales, and the benefit conferred on the public. That is an extra $14,167 for what the lawyers did for the public, on top of the $5,833 for what they did for Mr. Morales. The judge noted that the $17,500 award “constitutes a warning to law enforcement officers not to treat civilians unconstitutionally.” Only that benefit could justify awarding more to the lawyer than his client obtained from his services. As we said in McGinnis, “[t]he ‘private attorney general’ theory lets the attorneys recover more than the benefit to their client would make reasonable, because they also confer benefits on others throughout society by winning a civil rights claim.” McGinnis, 51 F.3d at 810.
There are several things wrong with an excessive award of attorneys’ fees in a case such as this. One is over-deterrence. The police, having been called by a private guard who had spotted a weapon, had taken a loaded M-l carbine from a van. The arresting officer knew there was a law against
Second, excessive attorneys’ fees awards in section 1983 litigation unduly divert legal resources from other uses. People injured by negligent drivers and on the job, people who need wills drawn, people who need tenants evicted or landlords restrained from unlawful evictions, people who need their construction contracts reviewed and bank loans secured so they can start work, have to compete for legal services with Mr. Morales, who can offer a lawyer $139,000 to sue a policeman for arresting him erroneously and holding him for two hours. Congress chose to give lawyers more of an incentive than the usual contingent fee out of the damages recovery to take section 1983 cases, but neither the words nor the purpose of section 1988 justify a $139,000 jackpot in a $17,500 case.
Third, excessive attorneys’ fees awards in civil rights cases harm the victims of civil rights violations. That sounds paradoxical, but is not surprising to anyone with experience in personal injury work. The wronged victim of the civil rights violation is likely to want, or if physically injured, need, money, as compensation for the wrongs done to him. But the cases are hard to win, and probably most wrongful arrest cases taken to trial lose on liability, or result in low or nominal awards. So the safest, fastest and most efficient way for the victim of the wrong to obtain money is likely to be settlement. But no municipality is going to settle a $17,500 case for $157,000, with the lawyer to get the lion’s share of the money. In any one case, it is unlikely that the plaintiffs lawyer will “ring the bell,” as personal injury lawyers put it. The settlement value to the city is likely to be the risk of a bad loss multiplied by its size, perhaps 10% of $150,000 to $200,-000. Also, a defense lawyer would be concerned about the ethics of a settlement where the plaintiffs lawyer, not the wronged plaintiff, gets the lion’s share of the money. It would look like a bribe to the lawyer to dump the case. The plaintiffs lawyer would have a very great financial incentive to talk his client out of settling, and to take the ease to trial. All the fees he might hope for from ten small settlements are unlikely to add up to one jackpot fee, so even if he wins a very small percentage of cases at trial, the lawyer will do better to try them all. If the fee is too high relative to the client’s recovery, then the lawyer’s economic interest conflicts with his client’s, because the client has only one case but the lawyer has many. The majority’s approach today turns the ease into a dollar slot machine for the lawyer. Most lawyers are honorable people, and the lawyers representing plaintiffs in civil rights cases are often highly idealistic, but economic incentives work in the long run on the best people. A lot of people wronged by the police are going to be wronged again by being talked into exchanging small settlements for big trial defeats, under the attorneys’ fees rule the majority adopts today.
Mr. Morales’s attorneys conferred a moderate benefit on their client, and are entitled
. The majority mistakenly relies on Jordan v. Multnomah County, 815 F.2d 1258, 1262 (9th Cir.1987), for the proposition the lodestar determination is the "predomina[nt] element” of a fee award. We decided Jordan in 1987, but the Supreme Court decided Farrar in 1992, so Farrar controls. Farrar holds that " 'the most critical factor' in determining the reasonableness of a fee award 'is the degree of success obtained.' " Farrar, 506 U.S. at 114, 113 S.Ct. at 574.
. We say in Stivers v. Pierce, 71 F.3d 732, 753 (9th Cir.1995), that “Farrar holds that a prevailing party may be denied fees where he obtains only a narrow, technical victory such as nominal damages.” Stivers was a § 1983 case for an
