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When Fee Awards are Greater Than Damages

January 25, 2012 | Posted in : Expenses / Costs, Fee Award, Fee Entitlement / Recoverability, Hourly Rates

A Daily Business Review story, “$89,000 Legal Fee Approved Despite $500 Award” reports that a women who sued the management of a Brooklyn housing development alleging that one of its private police officers used excessive force in arresting her is entitled to close to $89,000 in legal fees and expenses even though she won a judgment of only $500, a federal judge has ruled. U.S. District Court  for the Eastern District Judge Jack B. Weinstein ruled on Jan. 9 in Brown v. Starrett City Associates, that the plaintiff, Annette Brown, was entitled to more than $80,600 in fees and over $8,600 in litigation expenses.

At trial, the jurors were instructed that if they found that Ms. Brown’s rights had been violated but suffered “no physical, emotional or financial injury” as a result, they could award her $1 in nominal damages.  He said if they found she had been injured, they could award her compensatory damages.  The jury found in favor of Starrett City on the wrongful arrest claim, but in favor of Ms. Brown on the excessive force claim and awarded her $500 in compensatory damages.

Following the judgment, the judge held that Ms. Brown was entitled to attorney fees under the Civil Rights Attorney’s Fee Award Act.  Her attorney, Michael P. Mangan submitted an application seeking over $82,700 in attorney fees and $11,000 in expenses.  Starrett City argued that the fee award was too large compared to the judgment.  Magistrate Judge Roanne L. Mann rejected that argument in her October report and recommendation (pdf)

“Although the success of the party in pursuing his or her claim, and the quality of the attorney’s performance, are relevant to the determination of a reasonable hourly rate, the case law is clear that a court may not reduce an attorney’s fee award simply because the fee award would be disproportionate to the damages in the underlying case,” the magistrate judge wrote.

Magistrate Judge Mann said that Mr. Mangan’s hourly rate of $300 was in line with the rate awarded to other civil rights attorneys in the Eastern District.  She said that rate was justified because Mr. Mangan had performed well in the case, even though it did not result in a large damage award.  She said that he had dealt with an unusual legal issue: the “vicarious liability” of a private corporation when its employees violated someone’s constitutional rights.  She also noted that Judge Weinstein had said on the record at the end of the trial that Mr. Mangan was “an excellent attorney.”