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Category: Practice Area: Civil Rights / Public Interest

Federal Circuit Weighs in on EAJA Fee Awards in Partial Wins

April 29, 2021

A recent Law 360 story by Hailey Konnath, “Fed. Circ. Weights in on EAJA Fees in Partial Wins,” reports that the Federal Circuit issued a precedential decision clarifying that the government is still obligated to cover attorney fees stemming from initial case reviews for litigants who prevail against it in civil actions, even if the litigants did not succeed on all their claims. 

According to the underlying case, U.S. Army veteran Robert L. Smith partially won an appeal of a U.S. Department of Veterans Affairs decision on his benefits.  He then asked that his attorney fees for the appeal be covered under the Equal Access to Justice Act, which requires the government to pay attorney fees for those who prevail against it in court.

The Court of Appeals for Veterans Claims held that he should indeed receive an award, but reduced the portion of his award that stemmed from the time his attorney spent on an initial review of the case.  The court held that the reduction was needed because Smith only prevailed on one of the issues in his appeal.

But the Federal Circuit said that the veterans court had undervalued the importance of the initial review of Smith's case, holding that the review was "necessary before appellate counsel could determine what bases, if any, existed for an appeal."  The three-judge panel reversed in part and affirmed in part the veterans court's decision and remanded the case for an award consistent with its opinion.

The Veterans Court should have determined whether the time Smith's attorney spent reviewing the record could be reasonably understood as preparation for bringing the successful claim, the Federal Circuit said.  But instead, the court "assumed that, because such time must have been spent on both successful and unsuccessful claims, it therefore required a reduction in those hours," the panel said.

"This was an error," the panel said.  Specifically, the Veterans Court misinterpreted 28 U.S. Code § 2412, which governs the government's costs and fee obligations in civil actions brought against it, according to the decision.  "There is no statutory requirement that time reasonably expended in initial record review must be reduced, merely because there were eventually both successful and unsuccessful claims pursued in the case," the panel said.  "To the contrary, the law requires that Mr. Smith's counsel be compensated for time that was necessarily expended on the initial review of the record, regardless of whether some of the claims that came from that review ultimately were found not to prevail, if that time was necessary for a successful appeal."

The Federal Circuit noted that if Smith had only brought his successful claim before the court, his attorney would have been fully compensated for the 18 hours she spent on her initial review of the 9,389-page record.  "There may be instances in which the time spent on reviewing the record is unreasonable or could be apportioned.  This is not one of them," the panel added.

Harold Hoffman, who works for Veterans Legal Advocacy Group and represented Smith in the action, told Law360 that the non-profit organization relies on Equal Access to Justice Act fees to help disabled veterans.  "We are happy that the Federal Circuit recognized the importance of good representation for veterans forced to appeal bad VA decisions to the federal courts," Hoffman said.

Rachel Bayefsky, an attorney with Akin Gump Strauss Hauer & Feld LLP, added that the Federal Circuit opinion "laid down important principles for the Veterans Court to follow in this case and in the future."  "The Federal Circuit correctly recognized that the standards of proper appellate advocacy apply equally to veterans, and that attorney's fees should be awarded accordingly," she said.

Citing his partial victory, Smith requested a fees award of about $10,200 for 50 hours of attorney work, per the order.  The hours total included the 18 hours his attorney spent reading and taking notes on the administrative record for the case.

In November 2019, the Veterans Court granted Smith's request but only awarded him fees for six of those 18 hours spent reviewing the record.  At the time, the court reasoned that "[b]ecause counsel's review of the [record before the agency] in this case 'presumably pertained to both the prevailing and nonprevailing [sic] issues,' the court concludes that reductions are warranted to account for time spent reviewing and taking notes regarding evidence related to the six unsuccessful claims."

Ninth Circuit Doubles Fee Award in California Medicare Litigation

April 8, 2021

A recent Metropolitan News story, “Ninth Circuit Ups Attorney Fee Award Against California From $4 Million to $8.2 Million,” reports that the Ninth U.S. Circuit Court of Appeals has decided that a District Court judge, at the tail end of years-long litigation to bar slashes in California’s Medicare program, short-changed a law firm in her award of attorney fees by reducing its hours and declining to employ a multiplier, with the appeals panel declaring that the firm is entitled to nearly $8.2 million.

The action was brought in Los Angeles Superior Court on April 22, 2008, and the state removed it to the U.S. District Court for the Central District of California on May 19, 2008.  Plaintiffs are the Independent Living Center of Southern California, two branches of the Gray Panthers, and several pharmacies and pharmacists, along with individual Medicaid recipients.  “Litigation in this case spanned twelve years and included argument at every level of the federal courts,” the Ninth Circuit’s latest opinion in the case notes.

The case, which spawned a U.S. Supreme Court opinion in 2012, was settled in 2014.  District Court Judge Christina A. Snyder of the Central District of California ruled on July 6, 2015 that California Code of Civil Procedure §1021.5, the private attorney general statute, “cannot support an award of attorneys’ fees in this case”; the Ninth Circuit vacated her order and remanded on Nov. 21, 2018; on Jan. 24, 2020, Snyder awarded the Los Angeles law firm of Stanley L. Friedman $2,731,800, saying:

“This amount reflects the product of the $628/hour rate that the Court found to be a reasonable lodestar rate for the Friedman firm, and the 4.350 hours that the Court found to be a reasonable lodestar for the total number of hours spent by the Friedman firm litigating this case.”  The intervenors’ counsel did most of the work, she remarked, concluding: “The Friedman firm’s supporting role during the merits stage of this case simply does not support a fee enhancement.”

The Ninth U.S. Circuit Court disagreed.  “Here, the district court inadequately justified awarding Friedman only fifty percent of his requested hours, while awarding Intervenors’ counsel one hundred percent of theirs,” the opinion says.  It adds that in light of the usual factors militating in favor of a multiplier, “the need to ensure that, in the future, lawyers are not dissuaded from taking up claims that will benefit the public interest,” Snyder “erred by failing to apply a multiplier.”

The court, itself, set the amount the firm is to receive, saying: “Because of the district court’s thorough fact-finding, we are able to modify the attorney’s fees award on appeal, conserving judicial resources by avoiding the need to remand for further proceedings.  Pursuant to the foregoing, we hold that the Friedman Firm is entitled to payment for seventy-five percent of its billed hours, at the rates set forth by the district court.  We further hold that the Friedman Firm is entitled to a multiplier of 2.  The Friedman Firm billed 8.699 hours.  Seventy-five percent of this amount, multiplied by the hourly rate of $628 yields an award of $4,097.229.00.  With a multiplier of 2, the Friedman Firm is entitled to $8,194,458.00 pursuant to California Code of Civil Procedure § 1021.5.”

Environmental Groups Seek Attorney Fees After California Water Win

April 6, 2021

A recent Law 360 story by Michael Phillis, “Activists Request $850K in Atty Fees For Calif. Water Win,” reports that attorneys representing environmental groups want roughly $850,000 in attorney fees and costs for work that led to a federal judge tossing the U.S. Environmental Protection Agency's finding that salt ponds near San Francisco Bay are not covered by the Clean Water Act.  Attorneys for San Francisco Baykeeper, Save the Bay and others said they spent more than 1,900 hours on the case and that they're entitled to fees and costs for that effort pursuant to the Equal Access to Justice Act.  The total is based on a blended hourly rate of $442, according to the motion.

U.S. District Judge William Alsup ruled in October that while the history and application of the Clean Water Act is undeniably complex, EPA headquarters ignored Ninth Circuit precedent and its own regional draft determination that the 1,300 acres of ponds at issue were "waters of the United States" when it said the CWA doesn't apply to the ponds.  The agency got it wrong and must take a new look, the judge said.

The attorneys said they've earned the fee.  "Plaintiffs are entitled to this award because they met the eligibility requirements under EAJA, they have wholly prevailed in this case, the hours and rates sought by counsel are reasonable, an EPA cannot carry its burden of showing that its position in this case was 'substantially justified,'" they said.  They said they are working with the EPA to settle the fee request issue and "avoid further litigation on this matter."

About $532,000 of the request is for work by Cotchett Pitre & McCarthy LLP, which spent 836.9 hours on the case.  Their rate requests were as high as $950 an hour for work done by a senior partner, $650 for work done by other partners and lower amounts for efforts by associates and paralegals.  Earthrise attorneys requested nearly $247,000 in fees and costs for 886 hours of work. Baykeeper sought nearly $71,000 for 189 hours, according to the filing.  The attorneys argued that their success in the case, along with the specialized environmental law and expertise the case required, justified their rate request.

Judge Says School District Overpaid Morgan Lewis

March 5, 2021

A recent Law 360 story by Lauren Berg, “Judge Says School District ‘Greatly Overpaid’ Morgan Lewis,” reports that a New York federal judge awarded millions of dollars in attorney fees to the NAACP after a Hudson Valley school district was found to be blocking minority voters' preferred candidates from the school board, while criticizing how much the school district paid its counsel at Morgan Lewis & Bockius LLP.

During a hearing, U.S. District Judge Cathy Seibel increased the $4.3 million in attorney fees and costs that a federal magistrate judge recommended be awarded to the NAACP's counsel at Latham & Watkins LLP and the New York Civil Liberties Union Foundation after they won a bench trial.  According to a transcript provided to Law360, the East Ramapo Central School District was found to have violated the Voting Rights Act.

Following the bench trial, Judge Seibel found that in the "unique" school district, in which 98% of private school students are white and 92% of public school students are Black or Latino, statistical analysis showed that both groups voted as blocs.  The minority group has been unable to get a single preferred candidate onto the board since 2007 due to highly organized resistance from the private school community, which is largely Jewish, the judge ruled.  The Second Circuit in January upheld the ruling.

In their objections to the magistrate judge's recommended award, the NAACP's counsel said they should at least be paid the same amount that the school district paid Morgan Lewis and asked for about $8.5 million — all of which they said they will donate to help the public schools in the district — while the school district said there shouldn't be a fee award because the attorneys are working pro bono, according to the transcript of the hearing.

Judge Seibel said the NAACP's counsel isn't entitled to the same rate that its corporate clients pay because they are working pro bono, but they are entitled to a fee.  She also noted that while the attorneys' plans to donate all of the money is "commendable," it will have no impact on her calculation of the fees.

The NAACP's counsel argued that the magistrate judge's award cuts their fees to half of what Morgan Lewis was paid, but Judge Seibel said it's not her job to compare what the plaintiffs seek with what the defendants were paid.  She noted that she must determine what a reasonable, paying client would pay by multiplying the reasonable number of hours by a reasonable hourly rate.

The judge said the school district is not an example of a "reasonable, paying client."  "I think the district greatly overpaid," Judge Seibel said.  "I have never heard of a school district in this area being charged or paying close to $650 an hour for partners or $450 an hour for associates, which is what Morgan Lewis charged."  The judge said that because this case was more complex than another more routine case, it's reasonable that the client might pay more than it usually would, but that the school district in this case paid about triple the normal rate.

"The record simply contains no indication that defendant's counsel's fee is, in fact, reasonable; and I think there are strong reasons to conclude it's not, so it doesn't make sense to try to match it," Judge Seibel said.  "Latham's work has obviously been more valuable to its clients than Morgan Lewis's was to its, but that does not mean defendant has to pay Latham what defendant paid Morgan Lewis."

The judge also noted that the school district could have avoided paying fees to the NAACP's counsel had it settled the case before it went to trial, but she also said the district was under no obligation to settle and might have sincerely believed it could win the case.  The judge also disagreed with the school district's assertion that the NAACP didn't really achieve anything because the school board is still 6 to 3 in terms of white private school members versus minority public school members.

"First, plaintiffs achieved something really big here.  They turned over a big rock and they exposed a years'-long violation of voting rights," Judge Seibel said.  "Second, even if there are only three minority/public school members on the board, they will be ones chosen by the voters, not by a secretive white slating organization."

In her calculations, the judge said she came out a little higher than the magistrate judge, citing the difficulty and complexity of the case that required a high level of skill from the attorneys, as well as the substantial resources needed to effectively prosecute the case.  "I think above what is typical in normal civil rights cases is appropriate and I'm going to bump up from Judge [Judith C.] McCarthy's numbers, although not up to what plaintiffs asked for," Judge Seibel said.

The judge didn't specify the total amount of fees and costs she awarded the NAACP but did say she would offer a higher rate of 25% compared to the 20% offered by the magistrate judge.  At the end of the hearing, Judge Seibel told the NAACP's counsel at Latham that it shouldn't take umbrage at a fee award that will probably come out to be less than what the school district's counsel got, according to the transcript.  She said she thinks the defense counsel got paid too much, but that "two wrongs don't make a right."

"Latham accomplished two very important things here: first, it got its associates some invaluable training and experience while also showing them how rewarding and satisfying public interest work can be; and second, it rectified a serious wrong in the community and restored the voting rights of thousands of people, and you cannot put a price tag on either of those things," Judge Seibel said.  "The firm ought to take pride in both of those accomplishments without diluting it by tying it to an arbitrary number paid to plaintiffs' counsel," she added.

Fourth Circuit Revives Fee Request in Disability Action

February 24, 2021

A recent Law 360 story by Alexis Shanes, “4th Circ. Revives Blind Worker’s Fee Bid in Disability Suit,” reports that the Fourth Circuit said a blind customer service representative can seek attorneys' fees for a disability suit she brought against the Maryland county she worked for, overturning a trial court's ruling that she couldn't claim fees even though a jury said she'd endured discrimination.  A three-judge panel weighed in on Yasmin Reyazuddin's case for a third time, striking down a Maryland federal judge's September 2019 order that denied Reyazuddin attorneys' fees, costs and expenses in her suit against Montgomery County.

Reyazuddin had sought an injunction requiring the county to reinstate her to her job at a call center, a position she lost after new call center software didn't support the screen reader software she needed to work.  In February 2016, a jury found the county had failed to accommodate Reyazuddin but awarded her nothing in damages.  The county ultimately gave in on its own following the trail, but the win still counted for Reyazuddin's fee bid, the panel said.

"Here Reyazuddin won a jury verdict that found the county liable for discrimination and entitled Reyazuddin to equitable relief — at least until the county capitulated by transferring her," Judge Albert Diaz wrote in an opinion for the panel.  "The district court nonetheless concluded that Reyazuddin isn't a prevailing party because she didn't obtain an 'enforceable judgment' that materially altered the legal relationship between herself and the county.  We disagree."

Reyazuddin had worked for Montgomery County for 10 years when she filed her April 2011 complaint.  She was offered and worked other county jobs after the call center stopped supporting screen reader software, according to the complaint.  However, Reyazuddin wanted her original position back.  So she sued, alleging the county had failed to accommodate her under the Rehabilitation Act and the Americans with Disabilities Act.  The district court granted the county summary judgment in March 2014.  The Fourth Circuit in June 2015 affirmed that ruling with respect to Reyazuddin's ADA claim but remanded her Rehabilitation Act claim for trial, according to court filings.

A few months prior to the trial, Reyazuddin was offered a job at the Columbia Lighthouse for the Blind, a Washington, D.C.-area nonprofit that serves blind and visually impaired individuals, which she declined, according to the opinion.  But the jury, which didn't know about the Columbia job offer, found the county discriminated against Reyazuddin after a 12-day trial in February 2016, according to the opinion.

However, the district court said it needed more information about what it would take for the county to make the call center accessible and whether the county had fulfilled its obligation to give Reyazuddin a reasonable accommodation through the turned-down Columbia job, the panel said.

Amid the ensuing discovery, though, the county finally transferred Reyazuddin to the call center position she'd sought all along, according to court filings.  In a two-week evidentiary hearing in April 2017, the district court decided the alleged discrimination constituted an isolated incident and found Reyazuddin had been accommodated, according to the opinion.  It declined to issue injunctive relief — after all, Reyazuddin had already been transferred to the call center — and denied her compensatory damages.  In November 2018, the Fourth Circuit affirmed.

Reyazuddin then asked for attorneys' fees, but the district court denied her request, saying she wasn't a "prevailing party" under the Rehabilitation Act.  But the Fourth Circuit this week disagreed, saying Reyazuddin had prevailed because she proved her Rehabilitation Act claim to the jury before the county transferred her to the call center.  Had Reyazuddin sought only damages instead of injunctive relief or had the county transferred her prior to the jury trial, the situation would have been different, the panel added.  "We note that our holding today is narrow," Judge Diaz wrote.  "But it would be unjust to hold that Reyazuddin didn't prevail simply because the county's timely capitulation rendered unnecessary equitable relief that Reyazuddin would have otherwise been entitled to."

Joseph Espo, an attorney for Reyazuddin, told Law360 the ruling brought the long-running suit closer to an end.  He didn't yet have an estimate of the fees his client will request when the case is remanded but expects "a big number."