New York State Association for Retarded Children, Inc. v. Hugh L. Carey, Individually and as Governor of the State of New York

Judge) awarded attorney’s fees NEWMAN, Before FRIENDLY and Cir $1,406,751.39. and costs of 544 F.Supp. 330 WYZANSKI, cuit Judges, and (E.D.N.Y.1982). Although this litigation Judge.* evolved into a prolonged raising contest complex legal issues, we nevertheless be- NEWMAN, Judge: Circuit lieve that the District Court’s fee award The “American party Rule” that each to was excessive and unreasonable. As we a lawsuit bears its own attorney’s fees has have warned in the past, fees are attorney’s been substantially modified some 120 to be awarded “with an ‘eye moderation,’ Congressional enactments that permit a seeking to avoid either the reality or the prevailing party in specified types litiga- appearance of awarding ‘windfall fees.’” tion to recover fees from its ad- Beazer v. City New York Transit Authority, 1976, versary. Congress added a new 97, (2d 558 F.2d Cir.1977) (quoting City provision that authorizes fees to prevailing of Detroit v. Grinnell Corp., 448, parties in civil rights Rights cases. Civil (2d Cir.1974) (Grinnell I)), rev’d on Attorney’s Fees Awards Act of Pub.L. other grounds, 440 U.S. 99 S.Ct. 94-559, No. (codified 90 Stat. 2641 at 42 (1979). L.Ed.2d 587 Because we con- (Supp. 1980)). U.S.C. IV This provi- § clude that the fees awarded in this case sion, proved which has to be the most fre- constitute a substantial windfall plain- quently used of all the fee-shifting enact- tiffs’ attorneys, we reverse the District ments, provides that the fee to be recovered Court’s order and remand the matter for one, shall be a “reasonable” without afford- further proceedings. We have also conclud- ing further guidance as to how the fee ed that appeal this an appropriate affords award should be Inevitably calculated. providing occasion for trial courts with ad- generality of such a precipi- standard has ditional guidance in calculating attorney’s variety tated a of disputes concerning the fee awards. correctness of a fee calculation. Several of those disputes are presented by appeal, I. arises the context of a fee award Factual Background and District claimed by two non-profit organizations, Court Decision the Legal Aid Society City of New York Union, and the New York Civil Liberties Representatives of the Willowbrook class for services by attorneys rendered in their 1972, alleging filed this suit in March con- employ. stitutional in the conditions at the violations Developmental Willowbrook Center and re- The appeal litigation arises out of questing injunctive relief. After the Dis- conducted during the last ten on years be trict motion granted Court half of a class of mentally persons retarded preliminary injunction April for a confined at the Willowbrook Developmental ruling but before a final on the merits of Center. Defendants-appellants are the parties negotiated a settle- Governor of the State of New York and 30, 1975, dispute. April ment of their On various state officials responsibilities signed Court a consent decree in- retarded, for the care of the mentally col 29-page appendix “Steps, cluded a Stan- lectively referred to hereinafter as the dards, litigation, improving State. The and Procedures” brought pursuant 1980), conditions at the Willowbrook (Supp. facility U.S.C. IV resulted § entry in the of a placing consent decree and elabo all but the most gradually severely subsequent proceedings rate challenging members of the handicapped Willowbrook compliance with the community decree. On June class facilities. in smaller See Massachusetts, Wyzanski, sitting by *The designation. Honorable Charles Edward Jr. trict of United States District Court for the Dis- in section 1983 liti- prevailing parties New York Association for Retarded award State Children, attorney’s part “a reasonable fee as Carey, gation Inc. v. then attorneys of the costs.” Plaintiffs’ (E.D.N.Y.1975). to the District Court for applied The consent did not end the case. decree March fees under section 1988. On recognized As the District Court when it 1978, the District concluded that sec- settlement, judicial approved the further prevailing applied tion 1988 could be “necessary orders or would be parties pending on Octo- whose cases of, of, implementation for the construction 19, 1976, ber the effective date of section or compliance” enforcement of with the Finding litigation pending consent decree. For these purposes, date, ruled on March the District Court jurisdiction Court retained over case. 1978, that were entitled plaintiffs Since both sides of this have attorney’s fees under section 1988. regularly jurisdiction invoked this to return plain later the Two and half to the guidance District Court for in inter- for reim tiffs filed a detailed decree, preting the consent and plaintiffs fees, In requesting attorney’s bursement. sought relief from alleged violations ap conformed to the “lodestar” agreement.1 of the settlement proach, endorsed this Circuit in Grin jurisdiction, In addition to retaining opinions. City nell of Detroit v. Grin Court, 30, 1975, order, April in its (2d Cir.1977) (Grin nell 560 F.2d 1093 Corp., question reserved the plain- whether I, II); supra; Lindy nell accord Grinnell tiffs’ should be awarded attor- Builders, Bros. Inc. v. American Radiator & ney’s fees and costs. At the time of this (3d Sanitary Corp., 540 F.2d 102 Standard reservation, authority the common-law of Cir.1976) (en banc). ap Under the lodestar federal courts to fees in attorney’s award proach, attorney’s by fees are calculated question. such cases was in Two weeks multiplying the number of billable hours signed, after the consent decree was how- prevailing party’s attorneys spend that the ever, the Supreme Court resolved the issue rate hourly normally on the case “the ruling, with exceptions pertinent to charged by attorneys for similar work case, this that federal courts could not II, supra, like skill in the area.” Grinnell attorney’s award fees absent statu- explicit 560 at 1098. After a base calculating tory Alyeska authorization. Pipeline relatively objective fee from these consider Society, Service Co. v. The Wilderness 421 ations, the District Court then has discre 240,95 1612,44 (1975). U.S. L.Ed.2d 14 S.Ct. tion adjust light to the fee award in time, theAt there was no statute authoriz- factors, subjective more such as the risk of ing award of fees in section 1983 suits. issues, litigation, complexity however, year, Congress The next passed attorneys. and the skill of the Id. Pursu Rights Attorney’s Civil Fees Awards ing plaintiffs’ appli the lodestar approach, (Supp. 16,410 Act of IV attorneys’ U.S.C. § cation claimed hours 1980), time,2 granting ranging up courts the discretion to at law students’ ity might 1. Our most recent encounter with the Willow- if decision is re- enhanced plaintiffs’ brook involved the efforts decree” ferred to as the “consent compliance partial to secure with the consent decree list of case. A as the “fee award” one modify dealing and the defendants’ efforts to it. New prior reported the Wil- decisions Children, York State Association for litigation appears Retarded in the District lowbrook Carey, (2d Cir.1983). Inc. v. 706 F.2d 956 F.Supp. Clar- opinion. at 333 n. 2. Court 2. Table Attorneys by Plaintiffs’

Hours Claimed rounding) (figures not sum due to Appli- Fee 1/76 to 1/78 Before 1/74 Total Attorney 4/80 cation 12/75 12/77 12/73 Bruce Ennis Christopher Hansen

IM1 hour, $1,312,642, an for a base fee of tion of their time without reference to a supporting document list. $1,208,753. plus a bonus The total award $2,542,430, which sought was included a 338. $21,-

claim for traditional taxable costs of Unsatisfied with the reconstruction ef- plaintiffs’ forts of the attorneys, the State of New York opposed plaintiffs’-motion The plaintiffs’ application attorney’s for attorney’s fees. The submitted State fees a new sparked litigation, round of fo- extensive memorandum and included de- cusing whether primarily question on appendix responding tailed to each of the had, fact, plaintiffs’ attorneys spent estimates claimed the plaintiffs’ 16,410 billable hours the Willowbrook as time spent on the more than litigation. plaintiffs While the submitted 3,000 documents included in the “Green- documentation, substantial contemporane- argued book.” The plain- State ous only time records were included for tiffs’ reconstructions were duplicative and small fraction of the total hours claimed. By calculations, excessive. its own plaintiffs’ attorneys estimated the ma- State reasoned that the lawyers of their time jority by reconstruction. The 3,353 hours, had expended only compensable explained the reconstruction rather than the hours claimed. process as follows: Moreover, the argued State that the hourly rate of requested by the Five the attorneys have used a list of plaintiffs for their attorneys high, was too contemporaneous (“Green- documents and that a for plaintiffs’ attorneys bonus book”) help them more accurately ap- was inappropriate. The State concluded proximate part of the time claimed. entitled, most, addition, eight lawyers and two law $167,813 fees. students have submitted affidavits sum- plain- The District Court considered the marizing expended and have an- tiffs’ and the defendants’ oppo- swered interrogatories .... sition in a memorandum decision filed on range There is a wide in the quality (E.D.N.Y. June 1982. 544 F.Supp. 330 the applications specificity, in terms of 1982). opinion, In that the Court criticized but all are wanting degree. to a The plaintiffs’ attorneys the for failing keep to attorneys’ reconstruction of time is based records, contemporaneous time and noted on present recollection of spent failure particularly was inexcusa- before, many some instances as 22, 1978, ble ruling, after the March once it eight years ago. as Although five attor- was clear that were to be fees neys used list of documents to refresh However, awarded in this case. notwith- recollection, their only one of the attor- standing plaintiffs’ inadequate documenta- neys consistently reexamined the docu- tion, accepted appli- the District the ments, all and estimated at least a por- cation to proceeded and determine how

Hours Claimed Plaintiffs’ by Attorneys (figures rounding) not sum due Before Appli- 1/74 1/76 to 1/78 Fee Attorney 12/73 Total 12/75 12/77 4/80 cation 11 150 1184 John Kirklin 915 92 16 530 Feldt 530 Robert 10 Kalman Finkel Anita Barrett Douglas Leonard Carol Kellermann Law Students 16,410

OVERALL TOTAL compensable the time claimed was for ly responsible representing much of the Willow- Judge Ennis, Bar- Although under section 1988. brook class: Bruce Christopher Han- have generally sen, Kirklin, tels believed that “counsel Barrett, John Anita and Carol their to be recon- attempted conservative Together, Kellermann. these five had re- hours,” he also con- struction of id. 12,625 ported hours of time the spent on for fees was application cluded that the litigation. Prompted Willowbrook by ob- respects inaccurate in some included jections raised in the defendants’ motion in duplication. The instances of excess opposition, the District Court disallowed a therefore, Court, sig- District disallowed small number of their hours as not compen- by of the hours claimed nificant number reductions, sable. These small comprising These disallowances can be di- plaintiffs. hours, spent by eliminated time First, the groups. vided into four attorneys on internecine time disputes, 2,420 Court disallowed all hours claimed spent working on related litigation, and ex- only by work done two law students. spent preparing applica- cessive time support portion application for this tion for fees. of the law general was the recollections Finally, the District Court considered de- Their students themselves. affidavits and general complaint fendants’ more cur- responses interrogatories gave only contained numerous sory accounts of the manner in which these duplicative excessive or entries. Rather Judge hours were Bartels could expended. separately objection than assess each raised which of the law students’ determine defendants, Judge Bartels chose to hours were under section 1988 compensable acknowledge general force of the de- legal represented services and which edu- percentage fendants’ attack and to make cational activities of little or no value to the in the hours allowed for each of reductions class; plaintiff any ambigu- he decided that principal attorneys. percentage These ities out of records should be arising poor ranged percent reductions from five against applicant, resolved see EEOC (af- the hours twenty percent requested Sage Realty Corp., subtracting specific ter hour reductions (S.D.N.Y.1981), and therefore disallowed above). determining ap- mentioned fees for of the law students’ time. the Court considered propriate percentages, Second, the District Court disallowed the claims, duplicative excessive claims for cer- majority of hours claimed the three at- tasks, tain detail in documenta- inadequate torneys early who participated tion, and inconsistencies between stages of the litigation applica- and whose time attor- amount of claimed different tions particularly suffered from a serious or identical tasks. The neys similar Feldt, lack of specificity. Robert Kalman cuts for the five percentage District Court’s Finkel, Douglas together Leonard re- another lead eliminated 1,365 ported work, hours of all but ten attorney hours of time. hours done before December 1975. Un- the District Court elim- aggregate, In the willing accept attorneys’ an estimate of 16,410 5,377 of the hours inated hours time which is entirely unsupported “almost of close to by plaintiffs, claimed reduction records,” by daily In re Hudson & Manhat- one-third. Co., (2d tan Railroad 115 Cir.1964), Judge Bartels chose to make his of com- the number Having determined own much conservative calculations of how hours, then the District Court had pensable time these al- attorneys three should be rate of com- appropriate hourly to fix the lowed, and concluded that their combined to calculate the lodestar pensation in order justified efforts an allowance of 271 hours. matter, the figure under Grinnell. On this By recalculating the these three hours of proposed rates accepted District Court attorneys, the District Court reduced Those rates application. in the plaintiffs’ requested 1,094 by hours. billing on the rates primarily were based the New for associates’ time

Third, charged the District Court considered Cravath, law firm of & applications attorneys principal- City of the York Swaine five

1143 (1976) (Cravath), partners Report ], Moore one of whose was cited as Senate [hereinafter Legal Society a director of the Aid reprinted Cong. in 1976 U.S.Code & Ad. application. testified on the fee News 5913. The District Court con- schedule, compensation Court’s which we that, plaintiffs’ attorneys cluded since the subsequently, set a minimum will discuss comparable were of skill to the Wall Street hour for work done rate of $70 Cravath, lawyers working proposed years expe- with less than two attorneys schedule was be- per hour for rience and a maximum of $140 cause it reflected “fees that would be thirteen attorneys years with more than for similar charged by attorneys work these experience. Though conceding like skill in the area.” Cohen West high comparison “somewhat Commissioners, Haven Board of Police 638 rights to fees awarded counsel in local civil (2d Cir.1980). 506 cases,” Judge they Bartels believed that The District Court then applied were not excessive. 544 at 337. compensable schedule of rates to the hours. Moreover, legislative he noted that the his- Taking into account the amount of experi- of the Fees tory Rights Attorney’s Civil attorney ence of each at the various stages required Awards Act section 1988 litigation, compensated of the the Court governed by awards “be the same standards who in the participated entire com- prevail types equally in other rates for work higher done in plex such as antitrust litigation, Federal they gained later more the rights cases and not be reduced because experience. The District Court’s calcula- may nonpecuniary involved in nature.” tion, Cong., produced No. 94th 2d Sess. 6 in the S.Rep. margin,3 detailed Table 2

Hours and Fees Awarded District Court* (figures rounding) due to sum Rate of Attorney Compensation Period Hours Allowed Total Ennis Before 12/73 1040 $110 to 12/75 1120 120 1/74 1/76 to 12/77 264 135 4 1/78 to 4/80 140 Fee 29 140 Application Administrative 6 50 2463 $289,406

TOTAL (average) 70 28 Before 12/73 Hansen $ 1/74 to 12/75 1/76 to 12/77 to 4/80 1/78 Fee Application Administrative TOTAL $ (average) Before 12/73 Kirklin $ to 12/75 1/74 105 4 to 12/77 1/76 115 9 1/78 to 4/80 115 119 Fee Application 83,664 81 1036 TOTAL $ (average) 70 2329 Before 12/73 $ Barrett 80 1811 1/74 to 12/75 95 711 to 12/77 1/76 1144 $978,052 $16,835 11,034 was allowable traditional

lodestar of added for figure $1,406,751. costs, making the total award average The rate hour allowable hours. was $88.64. II. of 1988 Applicability Section determining

After the lodestar figure, that a matter, the District Court concluded bonus As a the defend threshold would also in this case. The ants challenge District March Court’s noted, order, litigation, the Court section Willowbrook which ruled that piece had been a 1988 pathbreaking applied plaintiffs’ application institu- reform, very legislative history tional was much fees. The the Civil whose success Moreover, Rights Attorney’s estab plaintiffs’ in doubt Fees Awards Act at the start. Congress that 1988 attorneys’ been lishes intended section representation had out- “all apply cases on the date standing, they impressive pending had achieved Cong., enactment.” No. 94th H.Rep. results for plaintiff class. Court 2d n. 6 (1976) Sess. 4 cited therefore decided that the attor- [hereinafter Larson, E. ], in Fed Report reprinted House neys a fifty percent should receive bonus Attorney’s eral Fees Court Awards of for work done consent before the decree (1981); 291 6 su Report, n. accord Senate signed, was a twenty-five percent bo- pra, reprinted Cong. in 1976 U.S.Code date, by nus for after work done that & But Ad.News defendants con time the was large- success tend that District erred in con Court bonus, however, ly assured. was No added cluding that this was pending case on Octo spent time attorney’s applica- on the fees ber date enactment.4 We tion. The total to the addition lodestar reject the defendants’ contention. $411,864 figure top was a bonus. On of this Rate Attorney Compensation Period Hours Total Allowed Fee 46 110 Application Administrative 8 50 380,889 4904 78

TOTAL $ (average) to 12/77 Kellermann 1/76 $ 1/78 to 4/80 Fee Application 40,715 TOTAL 80$ (average) 8,520 Feldt Before 12/73 $120 12/73 Finkel Before $120 Fee Application 4,840 TOTAL (average) 12,000 12/75 Leonard 1/74 to $ $978,052 TOTAL GRAND $ (average) slightly the one used is in a different form than *The information this table presented See In the District table, at 344-45. Court’s Court. percentage cuts before the were to hours approved column “Hours referred Approved” percentage cuts. In our “Hours Allowed” table, incorporates made. argument argued had a before the District fendants’ parties pri- 4. Defendants Court nothing agreement matter, on this vate that, and assert on when appeal parties leads believe that the District record us to signed decree with its reservation the consent Accordingly, erred in its determination. Court had fees reached issue, they attorney’s correct we the District Court was conclude understanding the matter would be looking to section 1988 and solely governed applicable the soon-to-be decided case of Alyeska Pipeline Service v. The Wilderness case law to determine whether Co. rejected Society, supra. de- The District entitled to fees. sion, In stating that section 1988 applies statutory without authoriza- express cases, pending congressional both reports acknowledge tion. We that it might be that ap- indicated section 1988 should be inappropriate to section 1988 to apply plied according to the rule enunciated request arising for fees out of an attorney’s Supreme Bradley the Court in v. School action resolved long before or a matter Board, 716-21, 696, 2006, 416 U.S. 94 S.Ct. that many had been for years, dormant but 2018-21, (1974). Though L.Ed.2d 476 reopened only since 1976 for modification or ruling attorney’s on an award of fees under enforcement, see, Wheeler v. Durham e.g., section of the Education Amendments City Education, 618, Board of 585 F.2d 621- 1972, (1976), Bradley U.S.C. § (4th was, Cir.1978). however, There no legal striking involved issues of relevance to impropriety in section applying 1988 to this enacted, this case. Before section was case. Although plaintiffs delayed more Bradley plaintiffs the had obtained a final than moving two in for attorney’s in a desegregation case, order school fees, delay that not simply was a result of been attorney’s had awarded fees the fear that fees be denied. might As the trial court. While the state defendants attorney’s shows, for fees plain- appealing the of attorney’s award tiffs’ attorneys spend continued to consider- fees, section 718 became law. The question able time on the after litigation the consent before the in Supreme Bradley Court was decree signed. was Inasmuch as appli- whether section 718 be applied should to a cation attorney’s for fees would have been case which the only pending matter at incomplete pace until the litigation time of appeal the enactment was an slowed, justified were surely award of fees. attorney’s U.S. in withholding for their motion attorney’s 710, 94 Supreme S.Ct. at 2015. The Court fees until 1978. Cf. Northcross v. Board of ruled that section apply 718 should under Education, supra, (“The F.2d at 635 principle that a court should generally prejudice delay in seeking fees], apply the law in at the time effect that it [from if 711-16, any, has the plaintiffs’ renders its decision. id. at inured to attor- neys 2016-18. provided years S.Ct. who have of service

without hand.”). By endorsing the explicitly Bradley We agree also with the District Court rule, Congress made clear that it expected that the volume that surround- all apply attorney’s section fee decree, ed the enforcement of the consent 19, awards considered after October 1976. coupled with that the fact Kimbrough, Accord Robinson v. 652 F.2d Court jurisdiction retained to issue further (5th Cir.1981); Travisono, David v. orders, provides independent ground (1st Cir.1980); 621 F.2d 466-68 North matter concluding pending was Education, cross v. Board of 9, 1976, well after even October without (6th denied, Cir.1979), cert. 447 U.S. regard to the motion for attor- subsequent (1980). 100 S.Ct. 64 L.Ed.2d 862 ney’s Pennsylvania fees. See Bolden the District Since Court considered the Police, (E.D.Pa. State application in it was plaintiffs’ correct 1980). ruling should be case decided section under

III. Defendants contend that reason Allowable Hours Determination of plaintiffs’ District Court considered the hours that the Notwithstanding after the motion fees enact- District Court cut from amended of section was that plaintiffs ment application, contend that defendants intentionally delayed submitting their mo- awarded fees for too out of a nevertheless tion realization motion useless, Alyeska many support hours of To this con- would under deci- time. the assessed against numerous en- whom District Court tention, points to the State twenty largest that were the across-the-board application fee plaintiffs’ tries cut — degree, Judge These ex- Bartels duplicative. percent. large or To a either excessive plaintiffs’ five accepted involve have the defendants’ amples primarily appears to Kirklin, Hansen, attorneys Ennis, lead plaintiffs’ application. assessment of the — all, Barrett. Kellermann, and, of most level, com- the State general On a more illustrations establish the While State’s Judge Bartels should made plains that er- multiple contained plaintiffs’ application award because reductions in his further excesses, per- has not the rors and State litiga- attorneys overstaffed plaintiffs’ was in District Court us that suaded on spent fees for time sought tion and hours. of allowable error in its calculation Judge The District research. background the Dis application, the fee ruling In on hours, ruled these and refused to disallow lead five plaintiffs’ trict dealt with was multiple counsel plaintiffs’ use of through individual attorneys principally of complexity of the appropriate light cuts, percent ranging from five percentage back- and that litigation act Judge Bartels was twenty percent. to their suc- ground was essential research when he chose to within his discretion ing cess.5 response percentage make reductions staffing assessing the extent of ap claims that the fee defendants’ detailed for a appropriate research background duplica excessive and plication contained be accorded case, court must given a district with volumi tive hours. In similar cases 1988, pre section discretion. Under ample recog courts have applications, nous fee of as a matter are not barred vailing parties expect a trial nized that it is unrealistic to sending a receiving fees for law from entry in judge every to evaluate and rule on extra depositions or an attorney second Marshall, v. application. Copeland See assist. into court to observe and lawyer (en banc) (D.C.Cir.1980) F.2d. (2d Merrick, v. Seigal Saltmarsh, (22% cut); F.Supp. Ross v. Cir.1980). are counsel forbidden Nor (S.D.N.Y.1981) (5% and 10% research. background receiving fees for mem., (2nd cuts), aff’d 688 F.2d 816 Cir. Saltmarsh, F.Supp. supra, See Ross Stores, Inc., 1982); Kane v. Martin Paint course, judge may trial at 757-59. Of (S.D.N.Y.1977) (10% by collab compensate spent hours decline mem., (2d cut), 578 F.2d 1368 Cir. aff’d hours al limit the lawyers may or orating 1978). percent These courts have endorsed tasks, for the most but specific lowed for age practical trimming cuts as a means of by made are best part such decisions application. fat from a fee its own assess court the basis of district on quarreling Nor do find reason for we scope ment what is the Dis- percentages by with the selected litigation. particular complexity specific trict Court. We note that in- on such determinations A district court’s duplicative stances of excessive or entries only appeal matters will be overturned alleged by appeal place defendants on this size of apparent when it is 1,500 2,000 in doubt between degree with the is out of line award attorneys lead hours claimed the five in the reasonably prevail needed to effort made percentage and that the reductions litigation. eliminated more than District Court al the District Court In this 1,700 these attor- requested hours plaintiffs compensation lowed Furthermore, neys. attorney work, roughly equiv which is legal find most whose defendants aby half of work alent to five and a attorney fault —Barrett—was also cialization, compensa- by plain- background performed well not be research ble, attorneys to assist in es- was warranted rather not of the but tiffs’ for this was specialization, attorneys tablishing one branch of a level a new needed to raise these sort pre- had by many experienced handful of competence in which shared spe- practitioners ceded them. field of within an established however, single attorney. complexity recognize, might Given the of We that it be litigation Willowbrook and the number unfair deny plaintiffs in this case to all on, years gone of the suit has we do not attorney’s simply they fees because failed believe that the number of hours allowed to contemporaneous maintain records disproportionate. the District Court was Dicta in throughout litigation. Grinnell Nor do we believe that the award of five II led to plaintiffs have believe that attorney supports and a half time long fees be awarded as as hours would plaintiffs defendants’ claim that over- “careful expended were estimated recon- staffed overresearehed this case. While or Moreover, F.2d at 1103. it struction.” 560 plain- have shown that the defendants possible plaintiffs’ attorneys, that in fail- tiffs’ fee contained serious records, ing keep to better relied on lan- shortcomings, adequately the District Court circuits, other guage in the decisions of responded shortcomings those with its to that law offices suggests requested hours. percentage cuts keep are not the same sort of required In District reviewing ruling Court’s expected private records that would be hours, assessing on allowable our task in practitioners primarily engaged render- objections complicated by has been State’s ing See, services clients. fee-paying for contempora- failure to maintain plaintiffs’ e.g., Sweeny Independent Harkless v. weigh neous It is claims of records. hard to District, 594, (5th School 608 F.2d Cir. overstaffing duplication against 1979). plaintiffs’ expended. estimates of hours unfair it would be to rule However a of how plaintiffs’ Without detailed record retroactively plaintiffs’ time, attorneys spent their we little kept past, should have better records in the choice but to show considerable deference lack of difficulties raised contem to the District conclusion as to how Court’s many reasonably compensable. poraneous hours were records in this case convince us light In that can the difficulties of the need to announce for future that traced failure of plaintiffs’ attorneys to the a contemporaneous prereq time records are records, keep contemporaneous time we uisite for in this Circuit. attorney’s fees tempted accept proposal are the State’s Eckerhart, Hensley v. See all plaintiffs attorney’s be denied fees. — U.S. ——, 1933, 1943, S.Ct. L.Ed.2d sparse There is no excuse for the documen- C.J., (1983) (Burger, concurring). Now portions tation that at least accompanied Congress has enacted more than 120 stat plaintiffs’ original application attorney’s for authorizing attorney’s utes the award of fees. litiga- Well before the Willowbrook fees, Attorney’s Reporter, see Fee Awards began, tion this Circuit announced that 1982, 2-3, Oct. over attor “any attorney al- hopes who obtain an significant itself become a ney’s fees has lowance keep from the court should accu- see legal landscape, general addition to the rate and current of work done records id.,6 we think it to convert ly spent.” time In re Hudson & Manhattan our for previously expressed preference 115; Co., supra, Railroad 339 F.2d at see In records, v. contemporaneous time McCann Co., (2d Cir.1965). re Wal-Feld 345 F.2d 676 (2d Cir.1983); Coughlin, 698 F.2d The record shows that were Co., In re & Manhattan R.R. Hudson hoping attorney’s to receive court-ordered (2d Cir.1964), into a mandato F.2d they negotiated fees as 1975 when early as done, ry as other Circuits have requirement, right the consent decree and reserved the Ass’n Veterans see National of Concerned least, very fees. At the apply attorney’s 1319, 1327 Defense, Secretary plaintiffs’ attorneys they knew would be 22.2, (D.C.Cir.1982); reprinted 5th Cir.R. 22,1978, seeking fees after March when the (Jan. 1983); see 693 F.2d No. at lxxiii they eligible ruled that Larson, (recommend- supra, section 1988. also E. attorney’s fees under pages most of which of West’s annotations. See U.S.C.A. 6. The headnotes to section (West 1981). disputes, fill concern fee now at 155-305 § ing litigating attorneys keep daily spent that all ap- connection with the fee Miller, records); Affleck, time A. Fees Attorneys’ plication cf. itself. Lund v. (Federal (1st Cir.1978). in Class Actions 344-45 Judicial 1980) (recommending Center trial court re- summary, compen- as to the number of conference). quire pretrial time sheets at hours, accept sable we the District Court’s Hereafter, any attorney private —whether compensa- determination of the number of practitioner employee nonprofit or an ble hours that attorneys spent law office—who for court-ordered applies litigation, the substantive portions of for compensation in this Circuit work done reject but time Court’s allowance of opinion after the date of this must docu- spent application. on the fee application contemporaneous ment the time records. records specify, These should IV. date, attorney, for each the hours ex- Hourly Determination of Rate pended, and nature of the work done. perplexing aspect appeal The most of this we believe that Although do not hourly concerns the rate of appropriate plaintiffs in this case should be denied at compensation. suggestion, At torney’s failing keep contempo fees for to adopted the District Court a schedule of records, pre raneous we think the omission compensation, ranging from to $140 $70 cludes an award of fees for time hour, at primarily based on the rates spent preparing and the fee litigating appli the Cravath firm for the time billed of its cation. The District 322 Court allowed Starting range associates in 1980. with the attorney spent hours of time on the fee of Cravath rates of for $65 $105 $35,626. time application, valued In the eight years’ associates with from one to ordinary course, prevailing parties are enti experience,7 accepted the District Court tled to fees for preparing application plaintiffs’ extrapolation top of the 1988, Maher, Gagne under section see v. 594 range attorneys with more than $140 336, (2d Cir.1979), 344 aff’d on other years’ experience thirteen and set grounds, U.S. S.Ct. the minimum rate with less (1980). however, L.Ed.2d 653 In this than two The years’ experience. such an award is not The appropriate. in Court’s decision to the fee base award ordinate amount of time plaintiffs’ attor billing presents Cravath’s 1980 rates us neys spent on application the fee was a first, with two distinct issues: whether it is direct result of keep their failure to better appropriate compensate attorneys records. there contempo Because were no non-profit law with fees based on offices records, raneous plaintiffs’ attorneys, time large rates of a Wall law billing Street counsel, as well as spend defense had to firm, second, and whether fee awards numerous reviewing documents and should be based on current rates or histori- preparing support ap affidavits in of their cal in when the prevailing prior plication. Had plaintiffs kept better rec legal services were rendered. ords, parties both would have a simpler had time Rate. While litigating Appropriate for attor A. An ney’s organiza fees. Accordingly, non-profit we conclude that there is no doubt it was tions are entitled to fees under section unreasonable for the District Court grant plaintiffs’ attorney’s fees for 322 there the man- certainty is less over Range Billing Rates R. The record contains a letter from John Based on Eight One to Hupper, reporting partner, Cravath Year Years’Experience following billing firm’s rates for the associates: $40-$75 Range Billing Rates 50- 80 Eight Based on One to 60- 95 Year Years’ Experience 65- 100 65- 105 $26-$ 40 29- 55 history legislative 8. The of section makes 32- 65 prevailing parties not be de- should clear 35- 65 (Brennan, J., ner which a rate should be determined. concurring part legislative history expressly (remand does not dissenting part) discuss the compensation appropri rate of windfall”). avoid “an unmistakable non-profit lawyers. ate for clues in Some Most courts ruled that fee awards in legislative history point opposite di rights civil cases should not be reduced rections. The indicates that Report Senate when prevailing plaintiffs represented are rights the amount of fee awards in civil office, law e.g., Oldham v. governed by cases should be “the same Ehrlich, 163,168-69 (8th 617 F.2d Cir.1980); prevail standards which in other types v. Palmigiano Garrahy, 616 F.2d 601-02 Federal equally complex litigation, such as (1st Cir.), denied, cert. 449 U.S. cases,” Report, supra, antitrust Senate (1980); S.Ct. 66 L.Ed.2d 45 Rodriguez reprinted in '1976 Ad. Cong. U.S.Code & Taylor, supra, 1248-49, 569 F.2d at However, News at 5913. this recognition of have to make refused reductions based on equivalence rights between civil cases and costs, low overhead Mary Crystal v. complex other cases does not necessarily Ramsden, (7th Cir. imply equivalent profit-making fees for and 1980), salaries, Legal low Mid-Hudson Serv non-profit attorneys. The Report Senate U, Inc., 261, ices v. & G County Angeles, supra, cites Davis v. of Los (S.D.N.Y.1978), or reimbursement of the of which declined to reduce a fee award be budget by government funding, fice’s Den involved, non-profit cause attorneys 1302, nis Chang, (9th v. 611 F.2d 1304-07 yet also cites v. Swann Charlotte-Mecklen Cir.1980). acknowledged Some courts have Education, burg Board of supra, in which that fee awards non-profit attorneys the District acknowledged that private attorneys based on market rates for fee awarded prevailing plaintiff repre to a result in overcompensation, but have de by non-profit sented firm was lower than market clined to abandon rates because the charged that private defendant’s counsel money extra will serve the beneficial pur for similar services that were not even suc pose expanding availability of of free cessful, congression 66 F.R.D. at 486. Both Ehrlich, legal services. See Oldham v. su reports against al caution fee awards that 168-69; pra, Palmigiano 617 F.2d at v. Gar “produce windfalls to attorneys." Senate 616 F.2d at 602. rahy, supra, 6, Report, at supra, reprinted in 1976 U.S. 5913; Cong. precedents Code & at Our own have not been entire- Ad.News see House 9, Larson, Report, supra, reprinted ly expressed at in E. consistent. We have the view Eckerhart, supra, private at 298. also that market rates of Hensley See v. reduction from supra, U.S. at —,103 at is not Beazer v. New attorneys appropriate, S.Ct. — simply attorneys Responsive Congress’ unambiguous nied fee awards because their inten private tions, Judiciary unanimously are not law firms. The House courts have held that non reported prevailing party profit attorneys Committee that “a not be denied fees un should Bou, represented by Rodriguez entitled to counsel fees even if der See Perez v. section 1988. organization,” 21, (1st Cir.1978); Rodriguez Report, supra, House at 9 n. 575 F.2d v. 16, reprinted Larson, 16, 1231, supra, Taylor, (3d Cir.1977), in E. at 297 n. 569 F.2d 1247-50 2254, Sachs, denied, 913, approval and cited with Torres v. cert. 436 U.S. 98 S.Ct. (2d 1976), (1978); Brandenburger F.2d 10 Cir. in which this L.Ed.2d 414 see also v. Circuit 885, non-profit (9th 1974) Thompson, ruled that law offices were entitled 494 F.2d Cir. Voting Rights (award pre-Alyeska private fees under the Act to ACLU under at occasions, theory). “receipt promotes torney general because of such fees their On several public accepted continued existence and service to the this Circuit has the view that non field,” addition, attorneys profit id. at are entitled to fee awards. the Senate Lavine, 638, report approval Holley (2d referred with to cases in which v. 605 F.2d denied, 913, attorneys Cir.1979), non-profit fees were awarded to 446 U.S. cert. S.Ct. 6, 1843, Report, supra, (1980); Legal Mid-Hudson law offices. Senate at re 64 L.Ed.2d 266 in, U, Inc., (2d

printed Cong. at 578 F.2d 34 Cir. U.S.Code & Ad.News Services v. G & ; Gaslight (citing County Angeles, 1978) Carey York Davis v. of Los see also v. New Club, Inc., 1253, (2d (C.D.Cal.1974); P.D. Swann v. Char F.2d 1255 n. Cir. E. ¶ 9444 Education, aff’d, lotte-Mecklenburg 1979) (Title case), 70 n. Board VII 447 U.S. Larson, (W.D.N.C.1975)); see E. su 2034 n. 64 L.Ed.2d 723 F.R.D. 483 100 S.Ct. pra, (1980). at 100-03. than firms. supra, higher non-profit 558 far those Authority, City York Transit 100; Sachs, supra, rents, v. maintain they Torres They pay premium F.2d at 13; v. New York Carey at see also necessary F.2d personnel and other resources Club, Inc., 598 F.2d at 1255 supra, Gaslight legal services and provide extensive reductions approved 1, yet n. we have also on short required of documents quantity of a percentage reflect the fee awards to se- corporate notice connection with is reim budget that office’s non-profit law practices. curities v. funding, Gagne government bursed reim When the District Court 345; EEOC v. F.2d Maher, supra, 594 attorneys bursed at between $70 of Steamfitters Association Enterprise hour, compensating it was (2d 593 & n. 13 Local No. substantially higher their offices a rate denied, 911, 97 S.Ct. Cir.1976), cert. 430 U.S. support offices to their than it cost those (1977), and we 51 L.Ed.2d 588 on an basis. Given re reductions are not also ruled that such undoubtedly separates that vast difference City York Transit quired, Beazer New at 100. Now and costs from the costs supra, profit Cravath’s Authority, forcefully brought before the issue is Liberties Union or the York Civil New an award in excess us allowance we conclude Legal Society, New York Aid dollars, computed basis a million use of Cravath the District Court’s leading Wall charged by of rates Street these offices compensate rates to firm, explore it is we think as to be unr inordinately generous was so the district courts provide the matter and sug ruling In so we do not easonable.10 guidance. with further lawyers interest who gest public class in this noticing that an the Willowbrook begin by represented We lawyers upon based non-profit award to dedicated less skilled or any way case are in law billing charged by profit-making rates simply have We lawyers. than Cravath’s a windfall. The yers inevitably produces non-profit these compensating found that law firm billing profit-making rate for a a rates would constitute lawyers at Cravath components: three typically includes organizations substantial windfall for a billing attorney, compensation pro are explicitly Windfalls involved. overhead, and some share of the firm’s history of section legislative scribed in the Obviously profit for the profit firm.9 award that conclude that and we ingredient in a component questionable is a con windfall must be large such a includes non-profit a law firm. “reasonable” fee for sidered unreasonable. addition, remaining components the two of the fees aspect The “windfall” of a rate would often private billing firm’s by could be eliminated have been awarded those higher expenses reflect much than non-profit determining the cost each Private non-profit incurred a office. provide an hour incurred law office their City usually pay firms New York attorneys. Presumably, time of the various attorneys earn associates more than most dividing the would involve this calculation Moreover, large non-profit private offices. total salary by his or her attorney’s annual expenses overhead firms like Cravath incur (1983). Subchapter billing attorney S. See §§ of a I.R.C. 9. When the is an associate event, billing any portion firm, readily revenue compensation is deriva- In that beyond compensation salary. and overhead reasonable In the case of a ble from his or her profit for tax ordinarily and treated would be considered partner, drawn be- no distinction is purposes 26 C.F.R. a dividend. See profit; as is no so there tween (1982). component 1.162-8 identify separately § occasion to solely partner’s billing of a rate attributable in which the compensation. recent case We note that in a circumstance does That applied section component partner’s for fees under profit firm eliminate a of a Cravath as only requested compensation rate, compen- billing conceptually the firm distinct hour, the firm’s practical rate well below a sation. The distinction would Coughlin, average billing v. corporation McCann significance rate. if firm were a Cir.1983). (2d under F.2d 112 reason not entitled to be taxed for some number of productive per year primarily when law non-profit offices are cost, then a adding per-hour overhead ar compensated at the billing profit- rates of dividing rived at all non-salary costs for law making higher firms at the end of the year the total of the productive hours market; these are the rates that can be in a year attorneys of all office. This expected profit to reflect a substantial com- approach recognize cost-based would ponent and a substantial premium high non-profit since the services of law offices Third, rent and other costs. cost-based fee mechanism, pricing are not aby allocated awards, required matter, if a general as there no real market billing is rate that is would the parties burden and the district precisely comparable for such offices. In courts with disputes inevitable about cost deed, cost-based fee awards have received accounting. Indeed, the burden of calculat- increasing attention in recent as an ing costs was one reasons that influ- appropriate approach to all fee awards. the majority enced of the District of Colum- Copeland Marshall, v. supra, F.2d at reject bia Circuit to approach a cost-based J., 908 (Wilkey, dissenting); Glover v. John Marshall, to fee awards. v. Copeland supra, son, F.Supp. (E.D.Mich.1982); at 896-900. We are thus confront- Preissner, Page (S.D. F.Supp. ed with this dilemma: use of billing rates 1979); Alsager Iowa v. District for fees of produces law offices (S.D.Iowa Polk County, windfalls, which Congress disapproved; on 1977). hand, the other use of cost-based rates Alternatively, a modified ap- cost-based would precedents conflict with our and cre- proach could be used that would combine ate administrative burdens if re- generally the non-profit per-hour office’s overhead quired, rates are and such needed to avoid cost with the value of an hour of an attor- significant billing windfalls when time, ney’s the latter component to be de- are high. rived from the salary attorney compa- suggests This statement of the problem experience rable skill and paid by pri- its own resolution: to award fees to non- approach vate law firm. This reduce would profit billing compa- law offices at rates of private windfall inherent in the use of a rable in the run general of cases billing firm’s rate by. eliminating both the long billing high as the rates are not so profit component and the increment by windfalls, that significant their use risks which the private firm’s overhead exceeds and to law offices to re- permit non-profit that using of the office. non-profit By higher hourly ceive rates fees calculated value of the non-profit attorney’s time in- higher justified when such rates are to stead of the cost of that time to his employ- permit the offices to recover their costs. produce er it would a fee reflecting the billing claimed rate is point at which a costs the non-profit likely office would high yield significant so as to a windfall to incurred to hire the attorney were it not for vary a office will from one non-profit law budgetary limitations. community to another and over time. We However attractive cost-based calcula- expect judges throughout would the district non-profit tions of fee awards for general the Circuit to have familiarity might law offices avoiding be as a means of billing in the range community rates recoveries, windfall we not disposed are to able, and to be applicant First, mandate them for several reasons. fact-finding, without a elaborate to select area, the case including law in this our own point” beyond billing “break which a rate in Beazer, ap- decisions in Torres and has community that at that time reflects both a proved, exception, almost without the use significant profit component and overhead a billing calculating rates as basis for fee costs than of a significantly higher those non-profit awards for law offices and has office. Fees for law non-profit non-profit generally against counseled an invariable offices should not be based on rates distinction non-profit between law offices exceeding point,” except that “break in profit-making firms in fee calculating Second, awards. unlikely applicant’s non-prof- windfall effect occurs event that the to higher figures pertinent that rate is whether to use can demonstrate it law office or provided enable it to secure reim- the time when the services were required rate is expect costs. do not bursement of its We the time when the award is made. In this and at community in the same case, Court, that even it using the District what judge will nec- time each district rates, same comparable deemed market chose point” as a the same “break essarily select current over historic rates “to com- rates maximum rate needed to avoid presumptive for inflation and loss of pensate [plaintiffs] law offices. But non-profit fees to windfall place interest” that had taken between the place authority that the anticipate we legal time when the services were rendered billing ceiling appropriate private on the when the fees were awarded. fee awards for calculating used in rate be (citing City at 337 of New York F.Supp. will exert a moderat- non-profit law offices 1132, Darling-Delaware, on those awards. This “break ing influence courts in (S.D.N.Y.1977)). Other district will avoid distinction point” approach District of New York have the Southern non-profit profit- offices and between law on historic rates. calculated fees based See making general firms in the run of fee Labor- v. Industrial Bio-Test e.g., Desimone billing rate of law- award claims where Inc., (S.D.N.Y. atories, 83 F.R.D. experiences is yers comparable skill and 1979). knowledge, this Circuit has To our se- figure judge below the would whether current or historic yet decided at the point,” lect as a “break but same calculating in fee rates should be used reject permit judge time it will use awards. figure, which would billing rates above year in a or ordinary In cases resolved windfalls, to an yield significant contrary two, little difference whether it will make objective. With this expressed legislative applied: price historic or current rates are use, we think it approach vary the award will levels the time of end the as to whether the fees uncertainty prevailing from those when only slightly law offices will or will not be But, with litigation underway. was to reflect the proportionately reduced share that can last institutional complex budgets by public of their reimbursed fund- the difference many years, reductions ing, and we conclude such instance, when the Willowbrook great. For made. should not be average billing litigation began apply In this we have decided to per associates was $33 rate for Cravath point” approach “break ourselves. In when the Willowbrook hour. City Authority, Beazer v. York Transit New for attor- filed their supra, at 100-01 (revising amount fees, rate was ney’s average Cravath award); of fee Kamberos v. GTE Automat times hour, two-and-one half over Electric, Inc., (7th Cir.1979) ic 603 F.2d 598 the 1972 rate. (same). in New light billing current rates are City year York the last Neither historic nor fees are we of application, advantage claimed in this have the ideal. Historic rates think an “break appropriate point” on the they are based precision in be used hour. We do per in this case is $75 law firm would have private amount that a judges district in preclude not intend or, are work where costs charged for its point” other a “break selecting cases from used, a law of- non-profit the amount that we figure somewhat above or below litigation. to staff the actually spent fice con simply have selected in this case. We or not reflect inflation But historic rates do the claimants clude that as of 1980 fees for therefore, interest, and, forgone the cost of in not be calculated at rates this case should As parties. undercompensate prevailing hour, instead of at rates higher per than $75 rates, noted, in current the District Court as used ranging from to $140 $70 contrast, inflation into fee incorporate District Court. imprecise incorporation But the awards. prevailing parties. overcompensate and can B. or Rate. A further Current Historic use of case, the District Court’s an In this determining appropriate issue in gave a plaintiffs prior current rates considerable hours for the years to 1978 and 903 average billing windfall because Cravath’s this since formula a yields basic $490,450 grew period rates much faster than inflation be- for the be- $67,725 Moreover, fore tween and 1980. 1978 and for the period after date, 1978 to total premise underlying figure use of current rates— for lodestar $558,175.12 that the firm would have billed and collect- during litigation ed from the client V. money therefore had the use of the not—is non-profit true for law offices and fre- Bonus firms, true quently private especial- not for matter, As a final the state chal ly rights litigation. in civil $411,864.11 lenges bonus that the Dis

We conclude that historic rates trict Court to its figure. added lodestar should be used for both profit-making firms District awarded sum Court this in light law offices of “the risk and setting complexity fee of the case, awards in the results achieved and the multi-year superior cases. While not a solution, advocacy of counsel.” 455 at perfect the use historic 342. rates at decisions, previous In we acknowl have Congress’ least conforms to instruction to edged a court’s district to make However, authority avoid windfall awards. we are upward adjustments in fee awards to com impose upon reluctant district courts an pensate factors, for such see counsel Cohen ascertaining precise added burden of year- v. West Haven Board Police Commission by-year figures every case. If the serv ers, 505; supra, II, 638 F.2d at Grinnell ices or years, were rendered over two three supra, though we figures relevant for the year current will hesitated to scrutinize such bonuses and on normally appropriate. still be Even in pro them, occasion to Beazer disallow see eases, tracted it will be sufficient to divide New Authority, York Transit City supra, litigation just phases into two and use 558 F.2d at 100. one the early phase rate for and a current rate for the later In phase. this We agree Judge plain- with Bartels that where we have determined rate $75 tiffs’ counsel deserved some additional fee should be used as a maximum rate for 1980 in recognition high quality of their (unless can demonstrate a work complexity and the inherent of the higher figure), cost we think it appropriate litigation. litigation The Willowbrook has to use that rate as the maximum rate for extraordinarily diffi- undoubtedly been thereafter, services rendered in 1978 and cult early case for all concerned. its and to ause rate as $50 the maximum rate stages, raised novel questions case prior years.11 services rendered in Since In later interpretation. constitutional years, were allowed when the focused pretend billing 11. We do not to have arrived at the Since the used figure any degree preci- $50 Judge of scientific legal services 1978 all rendered after general sion. Between 1972 and per legal hour $75 exceeded and for services price level in the United States was between $50, 1978 all rendered before exceeded three-quarters price one-half and of the 1980 willing we maximum rates are in this to allow level. Labor Relations Yearbook — applied case actual become the rates to be (BNA 1982) (compiling Consumer Price the hours in each two allowed time Index). Since we have concluded that periods. point” hour is an “break The District had some of characterized 1980, we case for work done in believe spent the as allowed hours time on administra- $50, $75, which is is two-thirds of a suitable ap- tive was $50 matters for which a rate of point” by plaintiffs’ “break for the work done plied. compensated at that Since all hours rate attorneys during 1972-1977. As with the $75 period occurred in the before our use of a rate, attorneys plaintiffs’ if can demonstrate to vary hourly period $50 for that not rate does during the Court that costs District their this the for these “administrative” pre-1978 period greater per $50 than hour, they hours. are free and to do so to be reim- their bursed for actual costs. decree, counsel taxable costs. On remand the the consent enforcement judgment awarding will complex with Court enter equally to contend have had $613,992, unless plaintiffs attorney’s of institu- fees litigation the concerning issues the undertake to demonstrate to Throughout litigation plaintiffs the reform. tional their costs ex- Liberties Un- District Court attorneys from Civil we provid- and hour rates Society Aid have ceeded the Legal $75 ion and the periods. time exemplary pertinent service. allowed for clients ed their addition, In the District Court will recalcu- However, though we share the District to quality of the late its award of traditional taxable costs assessment positive Court’s rendered, now con- agree plaintiffs we do not that the eliminate the items service are complexity compensable. of the cede of counsel and skill upward adjustment to the issues merited guid- for the rulings To summarize our figure, of the lodestar extent of 25% cases, we have ance of the bar in future In a Bartels awarded. case of this Judge ruled as follows: adjustment sort, a 10% sufficient- we think fees, applications 1. All exemplary nature of the ly recognizes by profit-making or whether submitted services rendered. any work done after non-profit lawyers, Moreover, entirely inap we think it opinion normally the date of this should be the District to have propriate for accompanied by unless contem- disallowed an additional bonus allowed 25% indicating, time records for each poraneous before the consent for work done decree date, expended, the hours attorney, the view, Judge Bartel’s signed. was the work done. nature of necessary largely was to additional bonus to Attorney’s non-profit 2. fees awarded reward for “com billing law offices should be calculated substantial time and resources mit[ting] private attorneys comparable rates of prospects when ... of success were subject skill to a maximum experience, F.Supp. at 343. Al speculative.” point” “break rate to be selected though component of a bonus for risk of judge point district in each case at failure in some cases billing rates include private above which private entice firms to undertake difficult and an significant profit component such a uncertain, victory cases in which is we be above that of significantly overhead cost so promise lieve that of such rewards is such non-profit law offices that use of rates non-profit organiza not needed to induce offices. produce would a windfall for such Legal tions like the Society Aid and the law offices should not receive Non-profit Civil Liberties Union to take on such cases. above the selected fees calculated organizations These exist to represent to secure necessary “break unless point” groups class, like the Willowbrook with con reimbursement of costs. cutting edge stitutional claims at the non-profit fees Attorney’s 3. awarded join law. We those courts that have found law not be reduced to reflect offices should it contingency unreasonable to add bonuses budget reimbursed the extent of the office’s to fee non-profit awards for law offices. funding. by public Lukhard, F.Supp. See McManama (W.D.Va.1978), aff’d, (4th Attorney’s profit-making 616 F.2d 727 fees for Tuttle, Cir.1980); on cur- F.Supp. non-profit lawyers Cole v. should be based 1019 (N.D.Miss.1978); legal McCormick v. Attala rent rates when the services were Education, County three-year period, Board of rendered within a two- or (N.D.Miss.1976). cases, protracted but rates relevant early stages and later The result of our review of the fee award should be used. figure a reduction of the lodestar $978,052, Court, awarded the District 5. Bonuses awarded to law $558,175, offices, all, we awarded at should not add a reduced when $55,817, of the lodestar percentage bonus of 10% or for a total exceed a modest fee $613,992, award not include incre- exclusive of traditional amount and should

H55 ment achieving for the uncertain risk of for the a large private business of law firm litigation. success in the what many non-profit but is times the or- needs, ganization incurs speak or not to of a The of the District is re- order Court profit element. The supposed difficulties to the fur- versed and cause is remanded for in inhere the calculation of the overhead proceedings ther consistent with opin- are imaginary.1 non-profit factor The of- ion. keep fice must records its overhead and of the number and salaries of its attorneys FRIENDLY, Judge, concurring: Circuit variety for a of other see purposes, Cope- slate, If a writing we were clean I Marshall, supra, land v. 641 F.2d at 928 n. would think the hourly rate to (dissenting 51 opinion of Judge Wilkey), be fixing compensation used in of a allocation, reasonable method of non-profit organization in a case like this basis, e.g., weighted a dollar-hour should be reflecting be rate would a com seem acceptable. Courts to have become pensation private to paid attorneys in the apparent bemused simplicity of community equivalent experi same with “hourly billing rates” and these apply me- ence, Rodriguez Taylor, see v. F.2d 569 chanically, knowing just without what they 1231, (3 Cir.1977), denied, 1248 cert. 436 reflect2 to use they put.3 or what are 913, 2254, 56 U.S. 98 S.Ct. 414 L.Ed.2d however, recognize, I that our decisions in (1978), plus office’s hour Sachs, 10, (2 Cir.1976) Torres v. This satisfy overhead. would the indica and Beazer v. New York City Transit Au tions in the Senate and House reports 97, thority, (2 Cir.1977), F.2d rev’d of fee rights amount awards in civil 568, grounds, on other 440 U.S. “governed cases should be S.Ct. by the same 1355, (1979), 59 L.Ed.2d 587 look the other prevail standards which in other types former, way, although in case equally complex a where litigation, Federal such as cases”, $23,252, the award was real Report antitrust made no analy Senate No. problem 94th 2d sis Cong., (1976), reprinted simply Sess. 6 in the latter Hence, in Cong. path. U.S. Code & Ad.News see followed its pending the Report also hopefully House No. 94th 2d clarification which come Cong., will (1976). avoid, Stenson, Sess. 8 n. 16 Supreme It would how in Blum v. cert, ever, imposition often, on a granted, — U.S. —, F.2d defendant — here, as a financially pressed (1983), hard unit S.Ct. L.Ed.2d 1314 I am state government or local willing Judge an award accept Newman’s “break —of windfall, wit, would clearly approach be a a is point” as solution which more compensation for overhead that required equitable to the defendants than the un- Copeland Marshall, 1. they represent cases, debate v. F.2d 3. the fees in all Do billed 880, 896-900, (D.C.Cir.1980) (en banc), cases, they most some cases? Are a floor slightly subject concerned a different allo- above the firm endeavors rise or a —the large private ceiling negotiated? cation of the a overhead of law down from which it can be compli- Or, likely, firm. they simply fig Even as to this somewhat more seems most are problem, majority exaggerated exercising cated ures which the firm looks in “bill Eckerhart, ing judgment”? Hensley difficulties. v. —, —, 1933, 1943, —U.S. S.Ct. (majority opinion Powell), billing include, L.Ed.2d 40 Hourly of Justice 2. must addition —, opinion (concurring hourly compensation 103 S.Ct. at 1943 to the of associates and Burger), —, imputed hourly Justice partners, Chief 103 S.Ct. at 1945 (concurring dissenting opinion proper of Justice allocation of overhead. No one seems Brennan) (1983). Judge points they As to know Newman to what extent take account out, “billing judgment” note the cost of hours Cra that cannot be billed or must firm, rates, “hourly billing noncompensatory vath rates” were billed at or whose include profit component judge fixing plaintiffs’ adjustment even before used district efforts, compensation, considerably reflect the success of the firm’s com- is to ask for less pare Marshall, Copeland supra, seeking compensation v. when under § 917-18, Rodriguez Taylor, (2 supra, Coughlin, 1983); v. McCann v. F.2d 112 Cir. Very Taylor, likely Rodriguez supra, F.2d at 1247. different firms see also 569 F.2d at practices respects. different in these n. billing rate” method and “hourly Supreme checked 1983 led the Court of the United eminently plaintiffs. Stenson, still fair to the grant review in Blum v. States 81-1374, Sup.Ct. Oct. Term No. s.c. WYZANSKI, Judge, con- Senior (S.D.N.Y.), aff’d, 671 F.2d curring: (2d Cir.1981), I Judge concur in New However, opinion. doing, man’s in so I look concurring My Judge reasons for New- upon the “break-point”, proposed by opinion require man’s a brief statement. Newman, Judge as a mere ad hoc device for I qualification agree Without with the disposing figure of the case at bar. The $75 Judge substance and the form of Newman’s apparently Equal comes from The Access to opinion except on all matters the amount to Act, designed compen Justice which was be allowed to counsel hour and the government sate defendants whom the had amount, any, if of bonus factor. What I basis; it sued without has no relation to with here propose to deal concerns appropriate exceptions. those two Act serving Rights in Civil cases. Other Judge Friendly, sitting Like in this case dealing when with Act Rights circuits Civil feel judge, as a senior I more than usually promulgated awards have standards by prior bound decisions of this of impliedly permit allowance which Appeals Indeed, for the Second Circuit. $75, in an case would exceed being judge assigned a senior from another e.g. National Vet Association Concerned circuit, particularly I am deferential to the Defense, Secretary erans v. my colleagues views of upon prece- based (D.C.Cir.1982). dents established their own cir- regular I summary, Judge concur with New- cuit. principally man because I believe that precedents Bound of this Court of most appropriate and soundest course is for I Appeals, do not consider myself free to expedite me to do all I can to consideration what, adopt tentatively, least I believe to this case an en banc court of this be the sound compensation, measure of i.e. and, needed, by Supreme circuit if one based on the following three elements: Court of the United States. (1) the rate per hour which a private attor- ney equivalent competence would reason-

ably charge compensate him for his own

personal services, plus (2) fee-appli-

cant’s own actual (up point overhead to the beyond but not amount), a reasonable

plus (3) (sometimes an allowance called a “bonus”) NATIONAL FARMERS ORGANIZA- reflecting the fact that many IRASBURG, Plaintiff-Appel-

cases of a type similar are TION handled lant, applicant-attorney or his organization with- out yielding him or it any compensation whatsoever, or less than reasonable com- AGRICULTURE, COMMISSIONER OF pensation. My approach own reach would CONNECTICUT, STATE OF parallel conclusions applicant whether the Defendant-Appellee. be an attorney private practice, or in a No. Docket 82-7831. public-interest firm, law government or in a office, or elsewhere. United Court of Appeals, States Circuit. Second

Inasmuch as I do not feel free in this particular case to follow foregoing for- Argued March 1983. mula, that, and I am aware if not satisfied June Decided Judge Newman’s opinion, party this may case seek an en hearing banc file a petition for certio-

rari on a basis like that May which on

Case Details

Case Name: New York State Association for Retarded Children, Inc. v. Hugh L. Carey, Individually and as Governor of the State of New York

Court Name: Court of Appeals for the Second Circuit

Date Published: Jun 15, 1983

Citation: 711 F.2d 1136

Docket Number: 484, Docket 82-7531

Court Abbreviation: 2d Cir.