KAYHEEM LILLY v. THE CITY OF NEW YORK; NYPD DETECTIVE MALCOLM FREEMAN, SHIELD NO. 7049; NYPD POLICE OFFICER SOUL KIM, SHIELD NO. 10804, Dеfendants-Appellants-Cross-Appellees, JOHN DOE SERGEANT; JOHN DOES, RICHARD ROES; ANDREW HONG; DONALD CAMBRIDGE; JORGE TAJEDA; FRANK BATISTA; KEVIN WHETSTONE, Defendants.
Nos. 17-2823(L)-cv, 17-3000(XAP)-cv
United States Court of Appeals For the Second Circuit
AUGUST 14, 2019
AUGUST TERM, 2018; ARGUED: OCTOBER 30, 2018
Edgardo Ramos, Judge.
Appeal from the United States District Court for the Southern District of New York. No. 16 Civ. 322 — Edgardo Ramos, Judge.
* Consistent with the order entered by this Court on October 18, 2013, ECF No. 118, we use the short-form caption for the purpose of publishing this opinion.
Before: WALKER, LEVAL, AND DRONEY, Circuit Judges.
Kayheem Lilly (“Lilly“) filed a
JEFFREY A. ROTHMAN, Law Office of Jeffrey A. Rothman, New York, NY, for Plaintiff-Appellee-Cross-Appellant.
ELINA DRUKER, Of Counsel (Richard Dearing, on the brief), for Zachary W. Carter, Corporation Counsel, New York, NY, for Defendants-Appellants-Cross-Appellees.
Kayheem Lilly (“Lilly“) filed a
Plaintiff-Appellee-Cross-Appellant Lilly filed a complaint on January 14, 2016, alleging that his civil rights were violated by the City of New York and several New York City police officers (collectively, the “City“) on two occasions in October 2014. The first claim was for use of excessive force and the second was for improper issuance of three summonses for threatening behavior toward an officer, possession of an open container, and littering, all of which were later dismissed.
Lilly was represented by Jeffrey Rothman (“Rothman“), a civil rights attorney and solo practitioner, who filed the complaint on Lilly‘s behalf. On October 26, 2016, the City presented Lilly with an offer of judgment pursuant to
Pursuant to
Rule 68 of the Federal Rules of Civil Procedure , defendants hereby offer to allow plaintiff [Kayheem] Lilly to take a judgment against the City of New York in this action for the total sum of Ten Thousand and One ($10,001.00) Dollars, plus reasonable attorneys’ fees, expenses, and costs to the date of this offer for plaintiff‘s federal claims.1
The City and Lilly (through Rothman) attempted to negotiate a settlement regarding attorney‘s fees, expenses, and costs but were unsuccessful. Rothman filed a formal motion for an award of attorney‘s fees, expenses, and costs with the district court, pursuant to
The City objected to the fee request on the grounds that: (1) his requested hourly rate was excessive, (2) the number of hours expended was unreasonable, and (3) fees incurred after acceptance of the
The district court granted Rothman reduced fees, expenses, and costs in the amount of $28,128.99. The district court agreed that Rothman had comparable experience and qualifications to other civil rights attorneys who have received attorney‘s fee awards in the low $600 per hour range, but believed that the “simplicity of this case warrant[ed] a reduction of his claimed hourly rates.”3 Due tо the “relatively straightforward” nature of the case, the district court found an hourly rate of $450 to be reasonable.4 The district court also imposed a ten percent across-the-board cut to the award because some of the hours claimed were for clerical tasks that he had billed at an attorney‘s hourly rate. Lastly, notwithstanding the fact that the
DISCUSSION
The City appeals the district court‘s order granting “fees on fees” (i.e., the attorney‘s fees Rothman incurred in litigating
We review a district court‘s award for attorney‘s fees, expenses, and costs for abuse of discretion.5 “A district court abuses its discretion if it (1) bases its decision on an error of law or uses the wrong legal standard; (2) bases its decision on a clearly erroneous factual finding; or (3) reaches a conclusion that, though not necessarily the product of a legal error or a clearly erroneous factual finding, cannot be located within the range of permissible decisions.”6 “Given the district court‘s inherent institutional advantages in this area, our review of a district court‘s fee award is highly deferentiаl.”7 This high degree of deference is appropriate because “[w]e can hardly think of a sphere of judicial decisionmaking in which appellate micromanagement has less to recommend it.”8 We review questions of law regarding the legal standard for granting or denying attorney‘s fees de novo.9 We also review a district court‘s interpretation of a
I. Calculation of the Reasonable Hourly Rate
Lilly argues that the district court erred in reducing Rothman‘s rate from $600 and $625 per hour to $450 per hour because of the “duration and simplicity” of the case. Specifically, he argues that after the Supreme Court‘s decision in Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010),11 district courts can no longer consider the “relatively straightforward” nature of an action in calculating the reasonable hourly rate to be awarded. To the extent our decision in Arbor Hill Concerned Citizens Neighborhood Association v. County of Albany, 522 F.3d 182 (2d Cir. 2008)12 permits consideration of the simplicity of litigation in determining the appropriate hourly rate, Lilly contends that Perdue overruled Arbor Hill. Lilly‘s arguments are without merit.
A. Early History of Fee-Shifting Jurisprudence
Before addressing Arbor Hill and Perdue, we think it helpful to briefly review the relevant history of attorney‘s fees jurisprudence.
In 1976, Congress enacted the Civil Rights Attorney‘s Fees Award Act,
The first, known as the lodestar method, was adopted by the Third Circuit in Lindy Bros. Builders, Inc. of Philadelphia v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973).15 This approach calculates attorney‘s fees by multiplying the attorney‘s usual hourly rate by the number of hours billed, to produce a figure known as the lodestar.16
After determining the lodestar, the district court then has discretion to adjust the final amount to ensure that the fee is reasonable.17
The second method, known as the Johnson approach, was developed by the Fifth Circuit in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974), abrogated on other grounds by Blanchard v. Bergeron, 489 U.S. 87 (1989).18 Instead of starting with the attorney‘s usual hourly rate, multiplying it by the number of hours worked, and then determining whether that figure (the lodestar) should be adjusted, the district court determines a reasonable attorney‘s fee in one step by considering twelve factors.19 These twelve factors are:
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the attorney‘s customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or the circumstances; (8) the amount involved in the case and the results obtained; (9) the exрerience, 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.20
The Supreme Court first considered the appropriate method to calculate a reasonable attorney‘s fee in Hensley v. Eckerhart, 461 U.S. 424 (1983).21 The Court “adopted the lodestar method in principle, without, however, fully abandoning the Johnson method.”22 Instead of using the attorney‘s usual hourly rate, the Court instructed district courts to determine a “reasonable hourly rate,” and specifically referred to the Johnson factors as useful tools for determining what is reasonable.23 The Court described this process of determining a reasonable hourly rate and then multiplying it by the reasonable hours billed as “an objective basis on which to make an initial estimate of the value of a lawyer‘s services,” (i.e., the lodestar).24 The Court went on to hold that after calculating the lodestar in this manner, a district court has discretion to increase or decrease the final fee in “cases of exceptional success” or “only partial or
A year later, in Blum v. Stenson, 465 U.S. 886 (1984), the Court reiterated its holding in Hensley, that the initial fee award should be determined by multiplying a reasonable hourly rate by the reasonable hours expended, and that the final award can be increased or decreased in exceptional cases to achieve a reasonable fee.26 The Court explained that the Fees Act:
requires a “reasonable fee,” and there may be circumstances in which the basic standard of reasonable rates multiplied by reasonably expended hours results in a fee that is either unreasonably low or unreasonably high. When, however, the applicant for a fee has carried his burden of showing that the claimed rate and numbеr of hours are reasonable, the resulting product is presumed to be the reasonable fee contemplated by
§ 1988 .27
This hybrid approach was again approved by the Court in the 1986 case of Pennsylvania v. Delaware Valley Citizen‘s Council for Clean Air.28 In both Blum and Delaware Valley, however, the Court clarified that many of the Johnson factors “are subsumed within the initial calculation” of the lodestar (reasonable hours expended multiplied by the reasonable hourly rate), and therefore “cannot serve as independent bases for increasing [or decreasing] the basic fee award,” (i.e., the lodestar).29 Specifically, the Court stated that the novelty and complexity of the issues, the special skill and experience of counsel, the quality of representation, and the results obtained from the litigation should be “fully reflected in the number of billable hours recorded by counsel” or “the reasonableness of the hourly rates.”30 As a result, it is inappropriate for a district court to increase or decrease the lodestar figure on account of any of these factors, because they are already accounted for in calculating the reasonable hourly rate or reasonable hours billed to determine the lodestar.31
B. Arbor Hill
The Supreme Court‘s adoption of a hybrid approach caused confusion amongst the lower courts as to how to balance the bright-line standards of the lodestar model with the numerous evaluations required by the Johnson factors and the district court‘s ability to exercise its discretion to enhance or cut the final fee award in exceptional circumstances.32
In Arbor Hill, we attempted to resolve some of this tension and clarify our circuit‘s fee-setting jurisprudence. We instructed district courts to cаlculate a “presumptively reasonable fee”33 by determining
[T]he district court, in exercising its considerable discretion, [should] bear in mind all of the case-specific variables that we and other courts have identified as relevant to the reasonableness of attorney‘s fees in setting a reasonable hourly rate. The reasonable hourly rate is the rate a paying client would be willing to pay. In determining what rate a paying client would be willing to pay, the district court should consider, among others, the Johnson factors; it should also bear in mind that a reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively. The district сourt should also consider that such an individual might be able to negotiate with his or her attorneys, using their desire to obtain the reputational benefits that might accrue from being associated with the case. The district court should then use that reasonable hourly rate to calculate what can properly be termed the “presumptively reasonable fee.”35
In the wake of Arbor Hill, we have consistently applied this method of determining a reasonable hourly rate by considering all pertinent factors, including the Johnson factors, and then multiplying that rate by the number of hours reasonably expended to determine the presumptively reasonable fee.36 It is only after this initial calculation of the presumptively reasonable fee is performed that a district court may, in extraordinary circumstances, adjust the presumptively reasonable fee when it “does not adequately take into account a factor that may properly be considered in determining a reasonable fee.”37
C. Perdue
After announcing the hybrid approach for calculating attorney‘s fees in Hensley, and clarifying when it is permissible for a district court to increase or decrease the lodestar value in exceptional cases in Blum
D. The District Court‘s Reasonable Hourly Rate Determination
In his fee application, Lilly requested an hourly rate first at $600 and later at $625 per hour for Rothman‘s work on the matter. The City argued that this rate was unreasonable because the case was a simple, “garden variety” civil rights case.42 The district court agreed with the City that the case was “relative[ly] simpl[e]”43 and, relying on Arbor Hill, that the hourly rate should reflect this lack of complexity.44 Thus, the district court looked to the reasonable hourly rates for civil rights attorneys working on a simple, garden variety civil rights case in the Southern District of New York.45 The district court found that similar, straightforward civil rights cases in the Southern District involving attorneys with similar experience and qualifications as Rothman resulted in hourly rates between $350 and $450.46 Therefore, the district court awarded Rothman an hourly rate of $450, at the top of the range.
We find no error in the district court‘s reasoning. As we emphasized in Arbor Hill, “[t]he reasonable hourly rate is the rate a paying client would be willing to pay . . . bear[ing] in mind that a reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively.”47 It was entirely appropriate for the district court to consider the complexity of a matter because a reasonable paying client would consider the complexity of his or her case when deciding whether an attorney‘s proposed hourly rate is
Lilly‘s argument that the district court‘s consideration of the simple nature of this case and our opinion in Arbor Hill permitting such consideration are in conflict with Perdue is misplaced. Perdue addressed whether a district court, after calculating a reasonable hourly rate and multiplying it by the reasonable number of hours worked to produce the lodestar, could grant a fee enhancement or cut to the lodestar amount in recognition of the quality of an attorney‘s performance or the results obtained.50 Perdue did not involve a challenge to the district court‘s computatiоn of the reasonable hourly rate at all—it only concerned the propriety of the fee enhancement. It was in this context that the Court reiterated its prior statements from Blum and Delaware Valley, that the novelty and complexity of a case generally may not be used as a ground for an enhancement or reduction because those factors are already reflected in the reasonable hourly rate and reasonable hours billed (i.e., the lodestar).51
Perdue, therefore, did not overrule Arbor Hill or otherwise prohibit district courts from considering the novelty or complexity of a case in determining the reasonable hourly rate or hours billed. Perdue is consistent with prior Supreme Court opinions that indicate that case-specific factors like the novelty or complexity of the matter are appropriately considered in determining the reasonаble hourly rate or hours billed. Importantly, the Perdue Court stated that “the lodestar method produces an award that roughly approximates the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case.”52 And as in Delaware Valley and Blum, the Perdue Court specifically stated that the novelty and complexity of a case are presumably reflected in the lodestar amount.53
Finally, Lilly points to a quote from the Perdue opinion, in which the Court criticizes the old Johnson method created by the Fifth Circuit because it “gave very little actual guidance to district courts” and “placed unlimited discretion in trial judges and produced disparate results.”54 This, Lilly says, is evidence that the Johnson factors, including the novelty and complexity
Finding that the district court correctly applied the law, reached a conclusion within the range of permissible decisions, and did not abuse its discretion on a clearly erroneous factual finding, we have no basis to vacate the district court‘s decision to award Rothman an hourly rate of $450. We thereforе affirm this portion of the district court‘s order.
II. Reduction of the Fee for Clerical Tasks
Lilly also asserts that the district court erred by prohibiting Rothman from receiving his full hourly rate of $450 for clerical tasks, such as sending faxes, printing documents, etc. Lilly argues that a district court should not “reduce the hourly billing rate of a solo practitioner attorney who does not operate with the assistance of associates, paralegals, or other support staff concerning time he or she reasonably spends on clerical tasks in advancing the litigation.”58
We have not addressed whether a district court may discount the reasonable hours expended or the reasonable hourly rate an attorney spends on tasks that are clerical or administrative in nature. But the Supreme Court provided guidance on this question in Missouri v. Jenkins by Agyei.59 In that case, the Court held that plaintiffs could recover attorney‘s fees under the Fees Act for work performed by paralegals and law clerks under the supervision of an attorney at the market rate for their services, rather than at cost to the attorney.60 However, the Court cautioned that “purely clerical or secretarial tasks should not be billed at a paralegal rate” by either a paralegal or an attorney performing such tasks.61 The Court explained:
It is appropriate to distinguish between legal work, in the strict sense, and investigation, clerical work, compilation of facts and statistics and other work which can often be accomplished by non-lawyers
but which a lawyer [or paralegal] may do because he has no other help available. Such non-legal work may command a lesser rate. Its dollar valuе is not enhanced just because a lawyer [or paralegal] does it.62
We therefore conclude that the district court did not commit legal error in reducing Lilly‘s fee award to account for clerical tasks performed by Rothman. As we have stated, the key inquiry in determining the reasonableness of an attorney‘s hourly rate and hours billed is whether a paying client would be willing to pay the fee.63 The answer to this question, of course, will vary depending on the circumstances of the case, the attorney, and the customs in the relevant legal market. Therefore, while district courts have the legal authority and discretion to either reduce an attorney‘s hourly rate for time spent on clerical tasks or apply an across-the-board reduction to the hours billed or total fee award to account for time spent on clerical tasks (or block-billed time entries reflecting a mix of clerical and legal work), a district court is not required to make such reductions. As with all aspects of our fee-shifting jurisprudence, we afford district courts broad discretion in awarding attorneys’ fees because they are much closer to the details of each individual case and can better determine what is reasonable and appropriate in the fee calculus for the particular case.64
Here, the district court reviewed the time sheets submitted by Rothman and found a variety of obviously clerical tasks, as well as entries that “blend clerical tasks with legal tasks.”65 A review of the time sheets confirms that many entries describe clerical tasks that are not appropriately billed at Rothman‘s reasonable hourly rate of $450, such as sending and receiving faxes, requesting and receiving medical records, serving papers, and hand-delivering courtesy copies of filings to the courthouse.66 The fact that Rothman is a solo practitioner does not entitle him to his full hourly rate as an attorney for purely clerical work. Indeed, it is highly unlikely that a paying client would agree to pay any person $450 for an hour of sending and receiving faxes, calling medical offices, and delivering papers. We find the district court‘s imposition of a ten percent reduction to the fee award on account of clerical work appropriate, and certainly not an abuse of discretion, because the time entries reflecting 50.3 hours of work show at least 5 hours of purely clerical work.67 In reducing Rothman‘s hours by ten percent to account for clerical tasks, we are confident that the district court achieved “rough justice,” if not “auditing perfection,” in its calculation of the appropriate fee award.68 We therefore uphold this portion of the district court‘s order.
III. Award of Fees on Fees
Finally, the City challenges the district court‘s decision to grant attorney‘s
Ordinarily, a district court has authority and discretion to award attorney‘s fees for hours expended on a fee application made under the Fees Act, so-called fees on fees.70 The question here is whether the parties’ agreement to settle the case and cut off attorney‘s fees as of the time of the offer circumscribes the district court‘s authority to award fees accrued after the offer date. We believe it does.
Like a typical settlement agreement, an accepted
The accepted
Lilly makes three arguments for why the district court did not err, none of which is persuasive. First, he asserts that the offer of judgment‘s inclusion of reasonable attorney‘s fees up to the date of the offer “necessarily includes fees for the time that an attorney must spend to move to obtain those underlying fees if Defendants will not enter into a reasonable settlement concerning the underlying fees.”83 This interpretation of the contract is not supported by its clear terms, nor is it a necessary assumption. There is nothing in the agreement‘s terms to indicate that, in the event a fee application to the court is needed to determine what constitutes “reasonable attorney‘s fees,” the parties intended for any attorney‘s fees incurred by Lilly in that process to be included in the amount the City agreed to pay as reasonable attorney‘s fees. To the contrary, the express terms of the contract state that the City will only be liable for reasonable attorney‘s fees incurred on or before the date of the offer, and not subsequent thereto. The district сourt acknowledged that the offer of judgment contains “language expressly limiting recoverable fees and expenses to those incurred prior to the
Second, Lilly invokes the doctrine of contra proferentem to assert that the ambiguous language in the agreement “must be construed against Defendants since they drafted it unilaterally in the context of making a
Finally, Lilly urges that even if the offer of judgment‘s terms do in fact preclude fees on fees, then they should be held “void as a matter of public policy.”87 We are sympathetic to the fact that bеcause the parties were unable to agree on reasonable attorney‘s fees, Rothman was forced to prepare, file, and argue a fee application to seek his fee, and that due to the terms of the parties’ agreement, he is not able to be compensated for that extra work. Nonetheless, the argument that an offer of judgment or settlement agreement that cuts off fees on fees is void as a matter of public policy is contradicted by controlling Supreme Court precedent.
In Evans v. Jeff D., the Court held that because the Fees Act bestowed the right to an award of attorney‘s fees in civil rights actions to the prevailing party, and not the attorney, parties were free to waive their right to attorney‘s fees as part of a settlement agreement on the merits.88 Sрecifically the Court stated that Congress neither “bestowed fee awards upon attorneys nor rendered them non-waivable or non-negotiable; instead, it added them to the arsenal of remedies available to combat violations of civil rights, a goal not invariably inconsistent with conditioning settlement on the merits on a waiver of statutory attorney‘s fees.”89 The Court reasoned that it would be poor policy to prohibit litigants from waiving their statutory right to attorney‘s fees as part of a compromise on the merits because it would “impede vindication of civil rights, at least in some cases, by reducing the attractiveness of settlement.”90 Indeed, because the attorney‘s fee award is often similar to or greater than the amount of damages received on the merits,91 it is “not implausible to anticipаte that parties to a significant number of civil rights cases will refuse to settle if liability for attorney‘s fees remains open, thereby forcing more cases to trial, unnecessarily burdening the judicial system, and disserving civil rights litigants.”92 These pronouncements from the Supreme Court illustrate that, contrary to Lilly‘s arguments, it is not against public policy for litigants to waive their statutory right to attorney‘s fees—let alone fees on fees.
Thus, we conclude that when a settlement cuts off a plaintiff‘s entitlement to attorney‘s fees on a specific date, a district court may not award a party attorney‘s fees for work incurred after that cut-off date. This includes fees for work performed preparing a fee application submitted to the district court in the event the parties are unable to agree on the attorney‘s fees to be awarded despite a good faith effort to negotiate.93 If a plaintiff
CONCLUSION
We have considered the parties’ other arguments and find them to be without merit. We therefore AFFIRM, in part, the district court‘s order setting Rothman‘s hourly rate at $450 per hour and reducing Lilly‘s fee award by ten percent to account for clerical tasks billed by Rothman, and REVERSE and VACATE, in part, the district court‘s decision and order awarding Lilly $7,290.00 for Rothman‘s work on the fee application and reply brief in support of that application.