Vindication Of Constitutional Rights Justifies Large Award

Robinson v. City of Harvey, 2007 U.S. App. LEXIS 13705 (June 12)

In this civil rights action alleging that the police framed him, the jury verdict awarded plaintiff $25,000 in compensatory damages and $250,000 in punitive damages. Pursuant to 42 U.S.C. 1988, the trial judge awarded more than $500,000 in attorney’s fees, based on the lodestar. On appeal, the city defendant argued that the award was too high in light of the “minimal recovery.” The Seventh Circuit disagreed. “$275,000 is hardly minimal, and in any event the vindication of Robinson’s constitutional rights cannot be valued solely in monetary terms.” By persuading a jury that government officials committed a conspiracy, plaintiff achieved “a victory that serves the public interest by exposing to light disturbing police malfeasance and grave municipal institutional failures, and one that will presumably help to deter future constitutional violations by the City’s officers. These achievements are anything but minimal.”

Attorney’s Own Rate As Evidence Of Market Rate

Depaoli v. Vacation Sales Associates, 2007 U.S.App. LEXIS 13722 (June 12)

After a jury awarded $7.7 million for her employment discrimination claim, plaintiff received an attorney’s fees award from the trial court of roughly $240,000 pursuant to 42 U.S.C. 2000e-3(a). On appeal, the Fourth Circuit modified the award. Plaintiff’s counsel had originally claimed an hourly rate of $225, based on what he charged his client, but subsequently sought to be compensated at the hourly “market rate” of over $300. The trial court approved that request, but the court of appeals found that to be error. Plaintiff produced no evidence of market rate and thus the only relevant evidence was what the attorney himself charged. The Court observed that “the market rate should be determined by evidence of what attorneys earn from paying clients for similar services in similar circumstances, which, of course, may include evidence of what the plaintiff’s attorney actually charged the client.” 

EAJA Fees Hard To Come By

Flores v. Astrue, 2007 U.S. App. LEXIS 13900 (June 12)

To receive an attorney’s fees award pursuant to the Equal Access To Justice Act, it isn’t enough to be a prevailing party. In addition, the government’s position cannot have been “substantially justified.”  Here, although plaintiff prevailed in getting an Administrative Law Judge’s decision denying her disability insurance benefits reversed and remanded, the trial court found that the Commissioner’s opposition to such benefits was indeed substantially justified.  The Third Circuit affirmed the denial of fees. 

Section 1927 Fees Limited

Bailey v. Papa John’s USA, 2007 U.S. App. LEXIS 13850 (June 11)

After defendant prevailed on summary judgment, it sought a large attorney’s fees award as sanctions pursuant to 28 U.S.C. 1927, alleging that plaintiff pursued a frivolous claim. The district court agreed that, following discovery, plaintiff’s counsel knew or should have known that plaintiff’s claim pursuant to the Fair Labor Standards Act lacked a factual basis. However, the court awarded only $5,000 in fees – less than 5% of defendant’s request. The Sixth Circuit affirmed the low award, explaining that “where there is no bad faith and where a claim’s lack of merit became clear only after discovery, a defendant should be awarded attorney fees only to the extent counsel for defendant worked on the claim after plaintiff knew or should have known the claim was frivolous and should be withdrawn.”

Limited Success Is Basis For FDCPA Reduction

French v. Corporate Receivables, 2007 U.S. App. LEXIS 13158 (June 7)

After a $1,000 verdict pursuant to its Fair Debt Collection Practices Act (FDCPA) claim, plaintiffs sought attorney’s fees. The trial court awarded only $2,500 because plaintiffs’ success was de minimus. The First Circuit affirmed. The Court noted than an award of attorney’s fees to a successful FDCPA claim is mandatory. However, the amount of the award must be reasonable, and limited success at trial “is an accepted ground for limiting fees under The FDCPA. Here, the fact that plaintiffs rejected a settlement offer considerably higher than the eventual verdict suggests that they hoped to obtain much more in damages. Especially since they had little chance of doing so, their small award did not justify a large fee award.”   

Bad Faith Preceding Claim Does Not Justify Fees

Centex Corp. v. CTX Holding Co., 2007 U.S. App. LEXIS 11537 (May 17)

Plaintiffs successfully sued the government for enacting legislation (retroactively eliminating certain tax benefits) that resulted in a breach of the government’s contract with plaintiffs. Plaintiffs then sought attorney’s fees based on the government’s bad faith in enacting the legislation. However, because the alleged bad faith involved conduct preceding the litigation, the Federal Circuit found a fee award inappropriate. The Court cited eight other circuits that have taken the same position, as well as Supreme Court decisions suggesting that abuse of the judicial process refers to misconduct during litigation rather than preceding it.