Opinion
Case No. 1:01-CV-133
September 25, 2003
ORDER FOR ATTORNEYS FEES AND COSTS
In accordance with an Opinion filed this day,
IT IS HEREBY ORDERED that Plaintiff Christine Daenzer's Motion for Attorneys' Fees and Cost (Dkt. No. 163) is GRANTED IN PART AND DENIED IN PART. IT IS FURTHER ORDERED that attorney fees and costs in the amount of $286,050.11 are awarded in favor of Plaintiff Christine Daenzer and against Defendant Wayland Ford, Inc.
IT IS FURTHER ORDERED that the Final Judgment of June 19, 2003, is AMENDED as of this date to include such award.
OPINION
This matter is before the Court on Plaintiff Christine Daenzer's Motion for Attorneys' Fees and Cost. For the reasons which follow, the Motion will be granted in part and denied in part.
I. Background
This action was brought pursuant to the Federal Truth in Lending Act, 15 U.S.C. § 1638 et seq. ("TILA"). On January 23, 2002, class certification was granted under TILA and under two Michigan statutes. On September 6, 2002, this Court granted Plaintiff's Motion for Partial Summary Judgment on the issue of damages and awarded Plaintiffs counsel fees and costs under TILA, 15 U.S.C. § 1640(a)(3). In response to a Motion brought by Plaintiff, this Court decertified the TILA class on September 9, 2002, only as to the issue of damages. On March 28, 2003, Plaintiff Daenzer moved for summary judgment as to damages for her individual TILA claim. Plaintiff's Motion was granted and Final Judgment entered in this class action on June 11, 2003.
Plaintiff's Motion for Attorneys' Fees and Costs seeks $157,659.77 for attorneys' fees and costs for successful prosecution under TILA and an additional $139,063.00 based on the recovery secured on behalf of the state law class.
Plaintiff has documented her costs and attorney services through attorney billing records and affidavits for each of the attorneys. Plaintiff also seeks $13,335.01 in out-of-pocket expenses, detailed on the final page of the law firm billing records. (Rev. Aff. of Thomas V. Hubbard, Ex. 1).
Defendant opposes Plaintiff's counsel's representation of their hourly attorneys' fees, arguing that the attorneys' hourly rates should be based on the rates they charged in similar litigation. Defendant also opposes the inclusion of paralegal fees at the rate of $115 per hour, arguing that such expenses should be billed at cost rather than at an hourly rate. Finally, Defendant argues that Plaintiff should not recover fees related to counsel's work respecting state law claims after September 9, 2002, the date on which the Court decertified the TELA class. They further argue that Plaintiff's recovery for her state law claims after September 9, 2002 should not be billed at an hourly rate and should instead come only from the common fund awarded to members of the state law class.
II. Legal Analysis
Attorneys' fees shall be awarded to successful plaintiffs under TILA. 15 U.S.C. § 1640(a)(3). "When awarding attorney's fees in a class action, a court must make sure that counsel is fairly compensated for the amount of work done as well as for the results achieved." Rawlings v. Prudential-Bache Properties, Inc., 9 F.3d 513, 516 (6th Cir. 1993) (citing Lindy Bros. Builders, Inc. v. Am. Radiator Standard Sanitary Corp., 487 F.2d 161, 166-68 (3d Cir. 1973)).
One method of calculating damages is via the "lodestar" method, in which the court first calculates "the number of hours reasonably spent on the case multiplied by a reasonable hourly rate," then adjusts that rate in light of the circumstances surrounding the case at hand. Adcock-Ladd v. Sec'y of Treasury, 221 F.3d 343, 349 (6th Cir. 2000). This method has become part of the settled law and has been used widely by the Sixth Circuit. See, e.g., Paschal v. Flagstar Bank, 297 F.3d 431, 434 (6th Cir. 2002) (adopting lodestar analysis in case alleging discrimination in mortgage lending); Adcock-Ladd, 221 F.3d at 349 (applying lodestar analysis to federal employment discrimination case). Alternatively, courts may also award attorneys a percentage of the common fund. Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (U.S. 1980). Although the lodestar method has the advantage of providing greater accountability for the amount of work done, the common fund method provides a more accurate representation of the actual results achieved. Rawlings, 9 F.3d at 516. Plaintiff requests the Court to award the attorney fee for her TILA claim using the lodestar method and the attorney fee for her state law claim under the common fund.
The circumstances that may be considered were specified by the Fifth Circuit in Johnson v. Georgia Highway Express, Inc.: "(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the `undesirability' of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases." Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-719 (5th Cir. 1974).
A. Lodestar Analysis
Plaintiff proposes the following hourly rates for the attorneys and paralegals who worked on her TILA claim: $300 per hour for John Anding, $250 per hour for Christopher Hastings, $175 per hour for Thomas Hubbard, $225 per hour for Phillip Rogers, and $115 per hour for paralegal Jane Kramer. Defendant, on the other hand, proposes substantially lower hourly rates, based on the hourly rates charged in Baker v. Sunny Chevrolet, Case No. 1:01-CV-109, a case litigated by some of the same attorneys and involving identical issues as the instant case. Defendant's proposed rates are: $240 per hour for John Anding and $145 per hour for Thomas Hubbard. Defendant does not contest the $225 hourly fee claimed by Phillip Rogers. Additionally, Defendant does not provide an estimated hourly fee for Christopher Hastings, but simply asserts that his hourly fee should be lower than the $240 per hour billed by John Anding, who has more experience as an attorney.
Plaintiff argues that the hourly rate should be based not on what attorneys charge in Grand Rapids, where they are located, but rather on "the larger metropolitan areas where similar litigation is typically undertaken" (Pl.'s Br., p. 11). According to Plaintiff, "[a]bsent counsel being located in Grand Rapids, Michigan, Plaintiff and the class members would have been compelled to search over a wide geographical area (which would likely have included large metropolitan areas such as Detroit and Chicago) in order to find counsel willing and able to conduct this type of litigation, and may well have found no representation at all." Id. Reasonable hourly rates under the lodestar method generally refer to the prevailing market rates in the relevant community. Blum v. Stenson, 465 U.S. 886, 895 (1984). Normally, a district court will look at the prevailing rates in the district in which it sits. Polk v. New York State Dep't of Corr., 722 F.2d 23, 25 (2d Cir. 1983). Courts do have discretion to look outside the district in special circumstances, e.g., when local counsel is unavailable. Gates v. Deukmeijian, 987 F.2d 1392, 1405 (9th Cir. 1992). However, courts are reluctant to allow higher rates, even for attorneys who are located out-of-town, "if there is reason to believe that competent counsel was readily available locally at a lower charge or rate." Hadix v. Johnson, 65 F.3d 532, 535 (6th Cir. 1994). It stands to reason, then, that a local attorney should not be allowed to charge a higher rate simply because he is performing work that could have been performed by out-of-town counsel. Allowing local counsel to charge higher fees simply because the work is similar to work done in larger cities would unjustly enrich attorneys who are not faced with the higher expenses associated with practicing in a larger metropolitan area. Therefore, the Court will not use the hourly rates proposed by Plaintiff because these rates are not based on the prevailing market rates in Grand Rapids, which is the relevant community.
Although Plaintiff seems to have artificially inflated hourly rates in light of the hourly rates charged in other cities, Defendant's estimate of hourly rates based on what the attorneys charged in a state class action also seems artificially low. The Court will therefore use the hourly rates charged by Plaintiff's attorneys in the state court action as an initial estimate, but will increase each attorney's hourly rate by ten percent in light of the fact that the instant case involved a class action rather than an individual claim and was litigated in federal court rather than state court. The final hourly rates are set as follows: $264 per hour for John Anding, and $159.50 per hour for Thomas Hubbard. Because Defendant did not contest Phillip Rogers' hourly rate, it will remain at $225 per hour. Finally, partner Christopher Hasting's hourly rate will be set at $220 per hour, which is greater than the rate charged by associate Thomas Hubbard but lower than the rate charged by partner John Anding, who has more experience as an attorney.
Plaintiff s billing records includes two hours charged to "BCK" at $215 per hour and two and one-quarter hours charged to "GEN" at $7O per hour. Because Defendant has not contested these entries, the Court will include them at the rates indicated by Plaintiff.
Defendant also argues that any work done by Jane Kramer or other paralegals should be billed at cost rather than at the hourly rate of $115 per hour. In Missouri v. Jenkins, 491 U.S. 274(1989), the Supreme Court found that billing paralegal work at market rate "`encourages cost-effective delivery of legal services'" (quoting Cameo Convalescent Center, Inc. v. Senn, 738 F.2d 836, 846 (7th Cir. 1984)). The court in that case did make an exception for "purely clerical or secretarial tasks," which "should not be billed at a paralegal rate, regardless of who performs them." Id. at 846, n. 10. The Court finds that, because the work performed by paralegals in this case is not clerical or secretarial, it is properly billed out at an hourly rate.
Plaintiff has submitted billing records indicating that they have expended 837.38 hours on the current matter. Defendant does not contest any of the entries submitted before September 9, 2002, and the Court finds these entries to be reasonable. However, Defendant does argue that Plaintiff is not entitled to attorneys' fees for work related to the state law class after September 9, 2002. Plaintiff's attorneys have requested a one-third recovery from the "Common Fund" for their work related to the state law class, and Defendant argues that any additional attorney fees would amount to a duplicative fee. The Court agrees and hereby removes from Plaintiff's billing records all charges related to the state law class dated after September 9, 2002. The attorney's fee is thus initially set as follows:
John Anding 78.75 hours $2647 hour = $20,790.00
Christopher Hastings 24.85 hours $2207 hour = $5,467.00
Thomas Hubbard 452.9 hours $159.57 hour = $74,263.20
Phillip Rogers 168.9 hours $2257 hour = $38,002.50
Jane Kramer 167.8 hours $1157 hour = $25,018.25
"PARA" 46.38 hours $707 hour = $3,246.60
"BCK" 2 hours $2157 hour = $430.00
"GEN" 2 25 hours $707 hour = $157.50
Total $167,375.10
Having determined the number of hours worked and the hourly rate, the Court will now consider whether this base rate should be adjusted in light of the twelve Johnson factors.
1) Time and Labor
Plaintiff has not demonstrated that this case involved any additional time and labor that was not reflected in the hourly billing rate or the number of hours billed.
2) Novelty and Difficulty
"Novelty and difficulty" generally refers only to cases of first impression that attempt to "make new law." Johnson, 488 F.2d at 718. Because the instant case is not one of first impression, Plaintiff's attorneys do not merit an enhanced fee based on this factor.
3) Requisite Skill
The third factor, skill, relates to the amount of preparation and general ability necessary. Id. Plaintiff has not demonstrated that the level of skill required in this case is so great that it is not already reflected in the hourly rate.
4) Preclusion of Other Employment
An attorney may be precluded from accepting other employment by his work on a particular case in two ways: first because of conflicts of interest that arise solely from the representation and second because he is no longer free to use the time spent on the client's behalf working on other matters. Id. Plaintiff's attorneys have not identified any cases that they were unable to take due to a conflict of interest arising from the instant matter, nor have they identified any lost time that has not been included in the billing records. 5) Customary Fee
Plaintiff argues that their proposed fees are customary for "the larger metropolitan areas where similar litigation is typically undertaken." (Pl.'s Br., p. 11.) However, as noted above, hourly rates are generally judged based on the community where the District Court sits, and the Court does not believe that Plaintiff's fees should be raised to match hourly rates in neighboring cities.
6) Contingency of Case
When awarding attorney fees, courts may enhance the fee for a case taken on a contingent basis on the rationale that such cases involve a greater risk that the attorney will not recover any fee at all. Blum, 465 U.S. at 902-03 (Brennan, J., concurring). However, an enhancement for contingency may overcompensate an attorney, since it "would likely duplicate in substantial part factors already subsumed in the lodestar." City of Burlington v. Dague, 505 U.S. 557, 562 (1992). Because Plaintiff's attorneys have not demonstrated that the contingent nature of this case merits additional enhancement, the Court will not enhance the fee based on its contingent nature.
7) Time Limitations
Courts may enhance attorney fees when the case involves "priority work that delays the lawyer's other legal work." Johnson, 488 F.2d at 518. Plaintiff's counsel has not shown that their work on other matters was hindered or that they were required to refrain from taking other cases due to the time limitations presented by this case.
8) Amount Involved and Results Obtained
An examination of the amount involved and results obtained requires a two-part inquiry: "First, did the plaintiff fail to prevail on claims that were unrelated to the claims on which he succeeded? Second, did the plaintiff achieve a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award?" Gradisher v. Check Enforcement Unit, No. 1:00-CV-401, 2003 U.S. Dist. LEXIS, at *7 (W.D. Mich. Jan. 22, 2003) (citing Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)). Plaintiff has not demonstrated that they are entitled to enhancement of their attorneys' fee under either prong of this inquiry.
9) Experience, Reputation, and Ability
Plaintiff's counsel has not demonstrated that their "experience, reputation, and ability" merit any additional enhancement not already reflected in their hourly rate
10) Undesirability
In general, undesirability enhances an attorneys' fee only where taking the case will directly impact an attorney's reputation, see, e.g., Hill v. Royal Crown Bottling Co., No. 01-T-063-S, 2003 U.S. Dist. LEXIS 9526, at * 12 (M.D. Ala. May 13, 2003) (enhancing attorneys' fees in civil rights litigation because accepting such litigation would stigmatize an attorney as a civil rights lawyer and deter fee-paying clients). Plaintiff's counsel has not demonstrated that this case has stigmatized them among paying clients to such a degree that their fee should be enhanced.
11) Nature and Length of Professional Relationship
Plaintiff has not indicated that the nature or length of her relationship with the attorneys merits enhancement of the attorney fees. Indeed, since Plaintiff's attorneys routinely prosecute consumer claims similar to the instant case, this case is likely to enhance rather than endanger their professional status.
12) Awards in Similar Cases
Although Plaintiff's attorneys point to other cases in which they were awarded the full amount of their requested attorney fees, they have not identified cases involving similar issues, nor have they shown the fees awarded in such cases. Therefore, the Court will not enhance the attorneys' fees on this basis.
The Court therefore finds that none of the lodestar factors warrant adjustment upward or downward from the initial estimate of attorneys' fees. Based on Plaintiff's billing records, the Court will adopt its initial estimate of hourly fees, $159,628.15.
In addition to the hourly charges for work performed by attorneys and paralegals, Plaintiff also requests $13,335.01 for various disbursements, including electronic research on Lexis-Nexis, mailing fees, copying and telephone calls. Defendant does not contest these fees, and the Court finds them to be reasonable. See Crosby v. Bowater Inc. Ret. Plan, 262 F. Supp.2d 804, 817 (W.D. Mich. 2003) (allowing charges for Westlaw and telephone usage, copying and delivery as "routine and expected costs of maintaining representation in this kind of suit").
B. Common Fund
As noted above, this case was brought under both TILA and two Michigan statutes. Plaintiff seeks attorney fees not only for work completed in prosecution of her TILA claim, but also for work completed in prosecution of her state law claims. Rather than applying the lodestar analysis for work completed on behalf of the state law class, Plaintiff requests an additional $139,063.00 based on the "common fund" theory; this represents 33% of the funds recovered to date on behalf of the state law class. When attorneys are awarded fees from the common fund, they generally receive 20-30 percent of the common fund, with 25 percent serving as the benchmark. Fournier v. PFS Investments, Inc., 997 F. Supp. 828, 832 (E.D. Mich. 1997) (citing Paul, Johnson, Alston Hunt v. Graulty, 886 F.2d 268, 272 (9th Cir. 1989)). Plaintiff has not made a viable argument as to why counsel is entitled to the inflated figure of 33 percent of the funds, so the Court will award the benchmark amount of 25 percent of the common fund, $105,340.00.
C. Total
Plaintiff is entitled to $167,375.10 for hours billed by attorneys working on her TILA claim, $13,335.01 for additional expenses, and $105,340.00 out of the common fund for successful prosecution of her state law claims. In total, the Court awards Plaintiff $286,050.11 in attorneys' fees and costs.
III. Conclusion
For the reasons given, an Order shall enter awarding attorneys' fees and costs in the amount of $286,050.11 in favor of Plaintiff and against Defendant.
This award is based on attorneys' fees and litigation expenses as of this date. Plaintiff is entitled to file an additional application for attorneys' fees and expenses incurred in obtaining their fee award, or any subsequent proceedings, including appeal.