CALIFORNIA ATTORNEY'S FEES

Laffey Matrix: For Complex Federal Fee-Shifting Cases In The District Of Columbia, Many Courts Are Endorsing Use Of The Fitzpatrick Matrix

Vanderbilt Professor And His Students Updated Information From The U.S. Attorney’s Office In The Original Laffey Matrix.

               Although it has not been used outside of the District of Columbia, D.C. fee claimants now have another alternative for establishing reasonable hourly rates of their attorneys, with some caveats:  the Fitzpatrick Matrix.

               Vanderbilt Professor Brian Fitzpatrick, with the help of his students, helped the U.S. Attorney’s Office in D.C. to update the matrix using many data points from actual litigated federal D.C. cases based on years of experience for attorneys and paralegals/law clerks, searching cases in 2013-2020 and then applying a CPI index increase for years 2021-2023.  It has been used by several D.C. courts since its development.  (See, e.g., J.T. v. District of Columbia, 2023 WL 355940 (D.D.C. Jan. 23, 2023).)

               There are some important caveats in its use:  it only applies to complex, fee-shifting federal litigation in the D.C. area (not outside D.C.).  So, the complexity of the case is an important factor in its use.  (Compare Bradley v. U.S., Case No. 19-4001 (Fed. Cl. Feb. 1, 2023) [matrix used in National Trails System Act case, where fees were sought under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970] with Bond v. Friendship Public Charter School Bd. of Trustees, Case No. 23-cv-367-ZMF (D.D.C. Dec. 18, 2023) [IDEA litigation is not presumptively complex; allowing fees under the matrix but discounting by 25% based on lack of complexity].)

Laffey Matrix, Lodestar, Reasonableness Of Fees: Lower Court Erred By Too Drastically Cutting Prevailing Party Contractual Fee Request From Around $700,000 To $198,445

Lower Court Did Not Support Reduced Hourly Rate And Substantial Time Cuts.

Free haircut on Saturday morning in W.M. Scott's general store. Farrington. Chatham County, North Carolina. Library of Congress. Marion Post Wolcott, photographer.  September 1940.

            Based on the Ninth Circuit’s Moreno decision which we have cited many times, federal courts in California need to support cuts over 10% with detailed reasoning.  However, California state courts do not have the same strictness in issuing fee awards because no statement of decision is required.  However, that does not mean that an appellate court will not reverse a reduced fee award where the panel perceives those certain cuts, in hourly rates and time requested, are unfairly slashed.   Edmundson v. Bonilla, Case Nos. G062039 et al. (4^th Dist., Div. 3 Dec. 7, 2023) (unpublished) is just that situation, authored by Justice Sanchez.

            In Edmundson, after fee entitlement was sustained by the appellate court (construing written documents and oral agreements together as an integrated whole), the lower court reduced the requested $700,000 in fees to $198,445, a significant cut based on reductions in claiming attorney’s hourly rate (only allowing $345 in Orange County) and for time claimed (mainly for block billing, duplicative work, and work that was not used such as unfiled in limine motions).  The appellate court reversed and remanded.

            The 4/3 DCA panel decided that the “haircut” in fees was too much and an abuse of discretion—“[b]ut a haircut was in order, not a decapitation” even under a deferential review standard relating to amount of fees awarded.  With respect to the $345 hourly rate awarded to counsel, that was too low based on the Laffey Matrix and other evidence which showed this was a lower rate charged to the client, rather than the true market rate applicable under a lodestar analysis.  On the time reduction—which varied between 34-54.3% depending on what numbers you used—this, too, was excessive according to the reviewing court.  The block billed entries were not truly block billed, except for minor ones.  It was error to not allow billing for some unfiled tasks given that some “dead ends” are compensable, citing Vargas v. Howell, 949 F.3d 1188, 1194, 1198 (9^th Cir. 2020).  The lower court did reasonably reduce for excessive number of inter-conferencing sessions and emails.  Not to be forgotten was that plaintiffs’ attorney obtained a compensatory award of $980,988.83 in a challenging case, which reinforced why a “richer” fee award was in order. 

Construction, Laffey Matrix, Lodestar, Reasonableness Of Fees: Los Angeles County Superior Court Awards A Little Over $1.3 Million In Fees And About $82,000 In Costs In Construction Dispute With Contractual Fees Clause Entitlement

Decision Provides Insights Into Judicial Resolution Of Contested Fee And Costs Issues.

            Because there has not been a lot of fee or costs decisions in the last couple of weeks, we report on a Los Angeles County Superior Court (Norwalk) final ruling on attorney’s fees and costs to a prevailing plaintiff in WnG Construction JV, Inc. v. AAA Solar Electric, Inc., et al., L.A. Superior Court Case No. VC065473 [Judge Porras]. 

            Plaintiff WnG won a construction dispute with a contractual fees clause against the defense, winning compensatory damages of about $3.116 million (inclusive of prejudgment interest) despite an offset and plaintiff not winning all that it wanted.  However, given that plaintiff did gain much of what it wanted, plaintiff was the prevailing party under the fees clause.  Plaintiff then moved for fees and costs, with various law firms submitting fee requests totaling around $2.1 million and with costs claimed of over $205,000.

            After some reductions on both counts, Judge Porras awarded fees of about $1.309 million and costs of around $82,000.

            Here are some interesting highlights to show his thinking on awarding reasonable fees and costs:

• • • An attorney disqualified based on ethical obligation violations is not entitled to any fees, an almost $223,000 reduction;
    • A law firm requesting over $653,000 in fees did not get them because they were involved in a discovery dispute which showed plaintiff deliberately spoliated evidence;
    • The principal law firm did get a majority of its requested fees, although J.D. law clerk/non-J.D. law clerk/secretarial work was not allowed and the main attorney charging $500 per hour for a breach of contract case was reasonable (but not an enhanced $750 hourly rate based on the Laffey Matrix, which the lower court found did not reflect L.A. County rates);
    • A law firm billing for potential post-trial/appellate consultation was not entitled to fees until those events materialized into situations allowing for fee recovery;
    • Although a CCP § 998 offer was rejected and could have potentially resulted in expert fee recoupment (although it is not clear from the record), the failure to identify pre-offer versus post-offer costs did not allow for an award of expert fees without a clearer allocation;
    • Charges for additional or duplicate copies of court reporter transcripts resulted in a reduction of expenses for these items.

            With that said, we give a “shout out” to Thomas F. Nowland, whose law firm and whose principal work led to him receiving a substantial portion of his fees on behalf of his client.  We thank him for providing the fee and costs ruling in this case so it could be shared with you.

Laffey Matrix, Probate, Reasonableness Of Fees: Probate Court Properly Lowered Requested Attorney’s Fees For Trust Work Based On Its Knowledge And Experience

Lower Court Did Not Have to Credit The Laffey Matrix.

            Melbostad v. Kasales, Case No. A165361 (1^st Dist., Div. 3 June 16, 2023) (unpublished) demonstrates how, in California state court cases, a trial court is able to draw upon its own knowledge and experience in determining a reasonable lodestar hourly rate and in determining the reasonableness of overall fees to be awarded.

            What happened in this matter was that an attorney providing both trustee and attorney fee work waived any compensation for trustee work under Probate Code section 15687(b), claiming entitlement for $163,061.82 in attorney’s fees work for a trust.  The lower court, based on its knowledge and experience in the area, reduced the claimed $525 hourly rate to $465 and found a substantial portion of the requested hours related to waived trustee compensation, such that $48,681 should be the fee award. 

            The appellate court affirmed.  Appellant’s argument that trustee’s compensation factors should be applied to a trust attorney’s fee compensation determination was unsupported by authority.  With respect to the hourly rate, the lower court did not have to follow the Laffey Matrix rates but, instead, could rely on its knowledge and experience of what a reasonable hourly rate should be in the probate area.

Laffey Matrix, Probate, Sanctions, SLAPP: Lower Court Did Not Err In Fixing SLAPP Defense Fees In Two Defendants’ Favor

Also, A Probate Court Properly Sanctioned Attorney For Violating Local Rule Page Limitations.

            In Tukes v. Richard, Case Nos. B307242 et al. (2d Dist., Div. 8 July 12, 2022) (published), plaintiff lost SLAPP motions against two defendants, with the lower court awarding mandatory prevailing party fees of $49,071.50 and $26,905, respectively, after making some downward adjustments for duplicative work by the firms representing different defendants.  Also, a litigant’s counsel was sanctioned $4,000 (out of a requested $8,085) for failing to comply with local rule page limitations in filing certain pleadings.  Different appeals were taken, but these two results were affirmed.

            As to the SLAPP fees, here were the takeaways: (1) fees expended in monitoring another action are compensable when necessary to prosecute the SLAPP motion; (2) prevailing on a standing issue does mean that a defendant prevailed for SLAPP fee recovery purposes; and (3) a trial court has discretion to use the Laffey Matrix when it comes to establishing attorneys’ reasonable hourly rates in California state courts even though some courts decline to utilize it (Syers Properties III, Inc. v. Rankin, 236 Cal.App.4^th 691, 702 (2014)).

            On the sanctions order, California Rule of Court, rule 2.30 does authorize a probate court to impose sanctions for failure to comply with applicable rules without good cause, including an award of “fees on fees” for bringing the sanctions motion.  The award was no abuse of discretion under the circumstances.

            BLOG OBSERVATION—Appellant on the fees awards misquoted and mischaracterized attorney declarations on appeal, which we believe led to a loss of credibility before the panel—which only gently chided Appellant on this transgression.

Costs, Laffey Matrix, Reasonableness Of Fees: Losing Defendants/Cross-Complainants Properly Saddled With RFA Proof Of Sanctions Fees And Routine Costs

Prevailing Parties Requested $393,945.30 In Fees, But Only Awarded $38,920.14—A Win, But Adverse Party Still Unsuccessfully Appealed.

            The next case, Duncombe v. Barfresh Food Group, Inc., Case No. B308385 (2d Dist., Div. 2 May 31, 2022) (unpublished), demonstrates an important lesson:  where you obtain a significantly diminished fee award at the trial court level, you need to think long and hard on whether to appeal.

            In this one, plaintiff/cross-defendant won a jury verdict as far as obtaining consulting fees under a contract with the other side relating to consulting services in Australia.  That verdict was $43,962.56, with nothing recovered on the defense’s cross claims.  Based on some denial of RFAS ultimately proven at trial, the defense moved for attorney’s fees of $393,945.30 under the RFA costs-of-proof sanctions provision.  They also sought some routine costs of $9,000, with the non-prevailing party not filing a motion to tax costs.  In the end, the trial judge awarded $38,920.14 in costs-of-proof sanctions fees and the entirety of the requested costs.  The adverse party did appeal despite the diminished fee award.

            The appellate court affirmed.  The RFAs denied were material, such that the inquiry focused on the reasonableness of the fees.  The trial judge had a lot of discretion in this area given her involvement of the case.  The side asking for fees utilized the D.C. Laffey Matrix to support the requested hourly rates, a matrix which is an acceptable one to use within the discretion of the lower court.  As far as the costs award, the adverse party never filed a motion to tax costs such that the challenge was waived.

Laffey Matrix, Reasonableness Of Fees: D.C. District Judge Refuses To Sign Off On Settlement Incorporating Unreasonable Fee Award To Pro Bono Attorneys When Public Fisc Bears The Burden

$206,500.50 In Fees Agreed To By Plaintiffs And DOJ, But District Judge Found $82,562.50 To Be The Reasonable Amount.

            Dimaio v. Wolf, Civil Case No. 20-445 (RJL) (D.D.C.) [Nov. 17, 2020 Memorandum Opn., Dkt. #30] is an interesting decision where U.S. District Judge Richard J. Leon refused to incorporate a settlement agreement containing an unreasonable attorney’s fees award into a final order of dismissal.

            What was involved in this case was a challenge by certain New York residents to the U.S. Department of Homeland Security’s refusal to allow them to enroll/re-enroll in certain customs programs such as the Global Entry program based on New York’s “Green Light Law” which allows undocumented immigrants residing in New York to obtain driver’s licenses and bans federal immigration officials from accessing state DMV databases absent a court order.  Unfortunately along the way, DOJ—representing the defendants—made some oral and written misrepresentations which likely spurred a settlement by which New York residents were eligible to participate in these customs programs. 

            Then, plaintiffs, which were represented by the large firm of Arnold & Porter Kaye Scholer, LLP on a pro bono basis, agreed with DOJ as part of the settlement to have defendants (who are funded by public taxpayers) to pay the firm $212,139.90 in attorney’s fees and costs (with $206,500.50 being the fees component).  After six months of litigation and negotiations leading to the settlement, both parties wanted the fees agreement incorporated into the final order of dismissal of the case.

            District Judge Leon refused to do that.  He believed that the DOJ’s misrepresentations may have led to the “insider” fees agreement, but that did not prevent him from refusing to incorporate the fees agreement into the dismissal order or from opining on the reasonableness of the fees, especially when they will be taken from the public fisc. 

            First of all, the case was overstaffed—eight total attorneys, two partners and six associates, when less would have done—especially where the litigation lasted six months and involved drafting only one substantive motion.  Second, the firm’s standard, corporate rates were unreasonable for a case of this sort, with the district judge using the USAO Laffey Matrix rates.  When these factors were taken into account, $82,562.20 was deemed a much more reasonable fee award than the one set forth in the settlement agreement.

            OUR FAVORITE SENTENCE FROM THE OPINION:  Here is our favorite sentence from this decision by District Judge Leon—“Indeed, there was a time earlier in my career when pro bono literally meant pro bono and not a penny would be collected for the time expended by either a law firm or an individual counsel who was providing the services on a pro bono basis.”

Laffey Matrix: D.C. Circuit Court Of Appeals, In 2-1 Opinion, Reverses District Judge’s Use Of USAO’s Updated Laffey Matrix Rather Than LSI Laffey Matrix In IDEA Fee Case

USAO’s Updated Matrix Had Too Large Of A Community Pool For Fee Shifting-Purposes.

            In DL v. District of Columbia, No. 18-7004 (D.C. Cir. May 21, 2019), the D.C. Circuit was faced with determining whether plaintiff was properly awarded attorney’s fees in an Individuals with Disabilities Education Act (IDEA) case after the district judge accepted the U.S. Attorney’s Office’s (USAO’s) updated Laffey matrix rather than the LSI’s Laffey matrix for purpose of determining the reasonable hourly rates for plaintiff’s counsel.  The “swing” was that use of the USAO matrix reduced the fee award from $9.76 from $6.96 million in light of the refusal to use the LSI’s Laffey matrix. 

            On appeal, there was a split opinion authored by Circuit Judge Tatel for the majority, with a dissent authored by Senior Circuit Judge Sentelle.

            The LSI’s updated Laffey matrix focuses predominantly on litigators in just D.C. with some adjustments for inflation.  In contrast, the USAO’s matrix based hourly rates on a survey of all attorneys (not just litigators) from the broader D.C. metropolitan area inclusive of Virginia, Maryland, and West Virginia. 

            The majority reversed because the two judges found, given that IDEA requires that prevailing attorney’s rates be tethered to community rates for the same kind of services (20 U.S.C. § 1415(i)(3)(C)), it was improper to use a survey involving all practitioners (not just complex litigators) and involving a broader metropolitan area (not just D.C.).

            The dissenting justice believed that the matrix choice was a factual call for the district judge and that the community should not necessarily just be comprised of the most highly-priced professionals from D.C. 

Laffey Matrix/SLAPP: 569 East County Appellate Court Affirms SLAPP Fee Reduction After Rehearing

 

$152,529.95 Fee Request Slashed Down To $30,752.86 Through Actual Fee Order.

    On May 20, 2016 and June 20, 2016, we posted on a case which was later accepted for rehearing by the same appellate panel.  The opinion upon rehearing is now out in 569 East County Blvd. LLC v. Backcountry Against The Drop, Inc., Case No. D068538 (4th Dist., Div. 1 Dec. 5, 2016) (published; rehearing opinion).

    The result did not change upon rehearing.

    Basically, a SLAPP winner decided to request $152,529.95 in mandatory fees, subject only to the fees being “reasonable”—which was the rub in this matter.  This was based on a $750 hourly rate for a senior attorney not experienced on SLAPP matters and on a $350 hourly rate for a fifth year associate.  The lower court found that $275 per hour was more like it for a San Diego-venued case, especially where a seasoned attorney for another party in the case had charged this very same rate.  The trial judge also determined the work was excessive, awarding only $30,752.86 in fees and prompting an appeal by the losing party.

    The appellate court affirmed.  Because this was governed under a deferential abuse of discretion review standard, the lower court had to resolve conflicting testimony about hourly rates and had discretion to pick the appropriate one, not having to accept hourly rates listed in the Laffey Matrix.  (Syers Properties III, Inc. v. Rankin, 226 Cal.App.4th 691, 702 (2014).)  The reviewing court also endorsed these common sense principles in the fee petition area:  (1) lower rates should be utilized by seasoned attorneys doing tasks normally delegated to younger attorneys; and (2) blended hourly rates are acceptable in the right context.  The trial judge did not err in concluding that the fee request was inflated, reducing for that factor also.

Lodestar/Laffey Matrix/Substantiation Of Reasonableness Of Fees: Syers Properties Opinion Now Certified For Publication

 

Reviewed in Our May 6, 2014 Post.

     In our May 6, 2014 post, we reviewed Syers Properties v. Rankin, Case No. A137610 (1^st Dist., Div. 2 May 5, 2014 issued unpublished), which held among other things that: (1) detailed categorical breakout of time spent can substantiate a fee petition in California state courts; (2) the reasonable market hourly rate, not billed rate, is the true lodestar index; and (3) a trial court can, but is not required to, follow the Laffey Matrix, regionally adjusted or otherwise. We can now report that this opinion was certified for publication on May 27, 2014.

Lodestar/Laffey Matrix/Substantiation Of Reasonableness Of Fees: $843,245.27 Civil Code Section 1717 Fee Request/Award Affirmed On Appeal

 

Successful Defendants Substantiated Hours and Hourly Rate Very Well In This One.

     Syers Properties III, Inc. v. Rankin, Case No. A137610 (1^st Dist., Div. 2 May 5, 2014) (unpublished) is a case where a $843,245.27 defense fee award under Civil Code section 1717 was challenged on narrow grounds—with plaintiff disputing the reasonableness of hours claimed and the hourly rate being requested. Because these determinations are determined under a deferential abuse of discretion standard, plaintiff did not prevail on appeal.

     As far as reasonableness of hours claimed, the defense provided detailed declarations by counsel showing (1) attorney’s qualifications and experience, (2) the stages or motions in the litigation in which counsel had been primarily engaged, and (3) the hours billed to defendants within several specific litigation categories, with the defense providing a time bar graph for each category of work performed. Because the lower court could credit the defense declarations of counsel as to work performed, nothing more was required. In fact, the categorical breakout of time was found sufficient, based on a district court decision favoring this approach. (In re HPL Technologies, Inc. Sec. Litig., 366 F. Supp.2d 912, 920 (N.D. Cal. 2005) [categorical approach is “an especially helpful compromise between reporting hours in the aggregate (which is easily to review, but lacks informative detail) and generating a complete line-by-line billing report (which offers great detail, but tends to obscure the forest for the trees)”].)

     So, what about the hourly rate being requested by prevailing defense counsel? The defense relied on counsel declarations about reasonableness of rate, bolstered by the Laffey Matrix rates adjusted to the San Francisco area by using locality pay tables. Plaintiff, however, argued that the rates were exorbitant because insurance defense firms charged much below the prevailing market rates so that they were stuck with these lower hourly rates. On review, the appellate court found that the real inquiry was looking to hourly rates compensating for the difficulty or complexity of the matter in the court venue at issue. The standard is not tied to the actual rate billed, but the reasonable market rate. (Nemecek & Cole v. Horn, 208 Cal.App.4^th 641, 652 (2012).) Defense counsel did rely on a regionally-adjusted Laffey Matrix, which the appellate court dealt with this way: “. . . the trial court was neither required to follow the Laffey Matrix nor to adopt the rate defense counsel opined was the ‘market rate’ for the services of this type.” However, the lower court did credit the Laffey Matrix (adjusted or otherwise), so be it. However, in further reasoning, the reviewing court did indicate the lower court has considerable discretion to determine the proper market for work being charged, whether insurance defense litigation versus general civil litigation. Based on this “market” definition, the hourly rate could be limited based on the demarcation. “Again, we emphasize that such determinations lie within the broad discretion of the trial court.” (Slip Opn., p. 12.) Fee award affirmed—no abuse of discretion.

     For a discussion of mediation confidentiality in the companion case, Syers Properties III, Inc. v. Rankin, Case No. A136018, see the May 6, 2014 blawg post on California Mediation and Arbitration.

Laffey Matrix: DKN Holdings Decision Just Published

 

U.S. Attorney’s Office Laffey Matrix Not Binding On State Courts In Determining Hourly Rates.

     On April 9, 2014, we posted on DKN Holdings, LLC v. Faerler, a Fourth District, Division Two unpublished decision finding that the U.S. Attorney’s Office Laffey Matrix (developed for the D.C. area) was not binding on state courts when determining reasonable hourly rates for state court practitioners in fee contests. We can now report that this decision was published on April 25, 2014, keeping in mind that the 4/2 DCA is usually the most conservative intermediate appellate court when it comes to publication.

Laffey Matrix: Riverside Superior Courts Laugh Off Laffey Matrix On Hourly Rates

Number of Years of Experience But One Factor.

     The winner of a commercial lease dispute with a fees clause was awarded $54,817.50 in fees, about 30% less than requested. On appeal, the loser argued that the trial court had to rely on the U.S. Attorney’s Office’s Laffey Matrix information in fixing fees. The appellate court in DKN Holdings LLC v. Faerber, Case No. E056294 (4^th Dist., Div. 2 Apr. 9, 2014) (unpublished) disagreed, holding it not was not determinative and factors other than years of experience can be considered when calculating fee awards.

Laffey Matrix: Both U.S. Attorney’s Office And Adjusted Matrices Are Out

 

     Although there is a raging debate on which one to use, both the U.S. Attorney’s Office version and the Adjusted version of the Laffey Matrix are out for 2013-2014. (If you go to our category “Laffey Matrix,” you will get posts on the debate.) However, here is what the recent matrices show for hourly rates, based on years of attorney experience or classification as a paralegal/law clerks for the June 1, 2013 – May 31, 2014 time frame:

Classification U.S. Attorney’s Matrix Adjusted Matrix

Attorney – 20+ years of experience $510 $771

Attorney – 11-19 years of experience $450 $640

Attorney – 8-10 years of experience $360 $567

Attorney – 4-7 years of experience $295 $393

Attorney – 1-3 years of experience $250 $320

Paralegal/Law clerk $145 $175

     The Matrix revealed.

Laffey Matrix: Third Circuit, In Late 2013, Approves Updated Laffey Matrix Use By District Judge

 

     For those of you following our hourly rate analysis in the fee substantiation area, we have posted in the past on the use of the Laffey Matrix and related permutations in our December 31, 2010 post. We now have an update for you from the Third Circuit Court of Appeals (federal level).

     In Interfaith Community Organization v. Honeywell International Inc., 2013 WL 3379319 (3d Cir. July 8, 2013), the Third Circuit affirmed a district judge’s decision to use the adjusted/updated Laffey Matrix pegged to the CPI rather than the unadulterated Laffey Matrix. In doing so, the federal appeals court bolstered its affirmance based on the district court reasoning in Salazar v. District of Columbia, 123 F. Supp.2d 8, 15 (D.D.C. 2011).

     However, a caution is in order here by us bloggers. The use of these matrices is factually intensive, so that they only have value depending on the forum, venue, and circumstances involved—really, a critical analysis or “check” on other information, except maybe in the D.C. area (at best).

Reasonableness Of Fees: Virginia-Based Courts Offer Laffey Matrix Adjustment Alternative And Tweaks To Calculating Fees Based On Degree Of Success

 

Given California’s More Liberal Approaches, These Alternatives Might Offer Guidance.

     California endows trial judges with quite a bit of discretion when fixing the reasonableness of fees in a fee petition proceeding. Hourly rates can be pegged based on attorney declarations, surveys, matrices, and the like. Lodestar adjustments, upward or downward, are based on multiple factors, including a litigant’s degree of success.

     Virginia federal courts have now offered some tweaks to approaches utilized by federal courts in determining reasonableness in fees, keeping in mind they are only instructive because California does not follow federal guidelines on some issues. (Example: most California state courts do not endorse Perdue v. Kenny A., 130 S.Ct. 1662 (2010), a U.S. Supreme Court decision not favoring positive multipliers in civil rights cases.)

     In Grissom v. The Mills Corp., 549 F.3d 319, 323 (4th Cir. 2008), a fee petitioner attempted to prove the correctl hourly rate primarily through lead counsel’s declaration and the Laffey Matrix development of hourly rates for lawyers practicing in Washington, D.C. The Fourth Circuit, although finding the Matrix a “useful” starting point, found it did not necessarily reflect hourly rates for attorneys practicing in Reston, VA. Instead, it developed its own table of hourly rates based on what lead counsel and other attorneys had been awarded previously, adjusted by inflation in fees based on inflation rates obtained from Inflation.com. It also endorsed a fixed-percentage approach as far as reducing fees downward based on plaintiff’s degree of success (in situations where a litigant was successful and unsuccessful on mixed claims).

     About four years later, Bradford v. HSBC Mortg. Corp., 859 F.Supp.2d 783 (E.D.Va. 2012) made its own “tweaks” to Grissom, besides rejecting the idea that the relevant attorney community for a fee award was limited to the practice area involved in the particular case (not accepting the notion that fees had to be based on hourly rates for attorneys specially practicing in the TILA area). Based on Perdue’s expression that a lodestar approach has to be objectively based if possible, Bradford found that the Grissom approach had to be “adapted” in two respects. First, district courts should try to actually calculate the hours spent on successful and unsuccessful fee tasks for apportionment or, if this is impossible based on the state of billing records, then calculate a fixed percentage downward adjustment based on the plaintiff’s degree of success. Second, after that, district courts should make multiplier adjustments but exclude any enhancement factors used in calculating the lodestar in the first place. (Id. at pp. 790-791.)

     Although not binding, these cases may provide ways in which to offer proof in support of hourly rates or lodestar settings, depending on the circumstances.

Substantiation Of Fees: Laffey, Adjusted Laffey Matrix, Or Hybrid Approach For Determining Reasonable Hourly Lodestar Rate--Part 2 of 2

Adjusted Laffey Matrix Methodology and U.S. District Judge Walker’s Approach.

     In our December 28, 2010 post, we discussed the Laffey Matrix, which has gained acceptance by some judges in determining reasonable hourly rates for attorneys when it comes to presentation of proof in fees petitions. We now give you an introduction to alternative methodologies in the form of the the Adjusted Laffey Matrix and U.S. District Judge Vaughn Walker’s own adjustment approach using the Laffey Matrix.

     Adjusted Laffey Matrix. Sometimes known as the Updated or Alternative Laffey Matrix, this one is an adjusted methodology prominently advocated by economist Dr. Michael Kavanaugh from Batavia, Ohio. This Adjusted Matrix has two significant differences from the ordinary Laffey Matrix: (1) it is geared to the national Consumer Price Index specific to legal services; and (2) it uses 1988-1989 (rather than 1981-1982) rates for the Washington D.C. Metropolitan Area developed in response to the remand in Save Our Cumberland Mountains v. Hodel, 857 F.2d 1516 (D.C. Cir. 1988) (en banc). Several courts have argued that the Adjusted Matrix yields better results and is more accurate because (1) applying the CPI legal services component inflation rate effectively captures more relevant data (being more reliable than general CPI increases relating to non-legal services or goods), and/or (2) the use of 1988-1989 base hourly rates is better than utilizing older base rates. (See, e.g., Salazar v. District of Columbia, 123 F. Supp.2d 8, 14-15 (D.D.C. 2000) [District Judge Kessler] (agreeing with point 1 above); Interfaith Community Organization v. Honeywell International, Inc., 426 F.3d 694 (3d Cir. 2005) (finding Salazar persuasive).)

     Courts Declining to Use Adjusted Laffey Matrix. Particularly for the D.C. area, other courts have rejected use of the Adjusted Laffey Matrix, although there certainly is a split among the D.C. district judges because others do rely on it over the original Laffey Matrix preferred by other judges. (See, e.g., Woodland v. Viacom, Inc., 255 F.R.D. 278, 280 n. 1 (D.D.C. 2008) [District Magistrate Judge Facciola] (listing D.D.C. cases where variant approaches are taken with respect to use of the Adjusted Matrix]; see also Miller v. Holzmann, 575 F.Supp. 2, 17-18 (D.D.C. 2008) [District Judge Lamberth] (arguing that Dr. Kavanaugh’s use of a national CPI index is not geographically specific enough when it comes to calculating D.C. hourly rates).) Many of the courts disagreeing with use of the Adjusted Laffey Matrix seem to congregate in the D.C. area and have a problem with its use for purposes of calculating D.C. hourly rates.

     District Judge Walker’s Approach. U.S. District Judge Vaughn Walker of the Northern District of California uses the original Laffey Matrix but then adjusts its D.C.-based rates for the specific locality of the lawyers seeking fees through use of local-oriented CPI indices. Most of his uses of this approach have occurred in securities class action contests. (See, e.g., In re HPL Technologies, Inc. Sec. Litig., 366 F. Supp.2d 912 (N.D. Cal. 2005); In re Chiron Corp. Sec. Litig., 2007 WL 4249902 (N.D. Cal. Nov. 30, 2007); In re Portal Software, Inc. Sec. Litig., 2007 WL 4171201 (N.D. Cal. 2007) [class actions]; accord, Martin v. FedEx Ground Package System, Inc., 2008 WL 5478576 (N.D. Cal. 2008); Garnes v. Harnhardt, 2006 WL 249522 (N.D. Cal. 2006).) For an article that criticizes using the Laffey Matrix in the class action context versus the actual billing rates of attorneys in the relevant community, see W.B. Rubenstein, Reasonable Rates: Time To Reload The (Laffey) Matrix, CLASS ACTION  ATTORNEY FEE DIGEST 47-51 (Feb. 2008).

     So, there you have the pros and cons of the Laffey Matrix, Adjusted Laffey Matrix, and U.S. District Judge Walker’s modified Laffey Matrix approach, with courts and experts split on which approach is superior depending on the circumstances and requested hourly fees in a given case.

So make up your mind . . .

Substantiation Of Fees: Laffey Matrix Versus Adjusted Laffey Matrix . . . Or Hybrid Of A Matrix--Part 1 of 2

 

Hourly Market Rate Analysis Frequently Involves Use Of the Laffey Matrix, Although Some Courts Do Not Like It.

     When one is petitioning for fees or contesting a petition for fees, it is usually incumbent to utilize the lodestar approach by determining the prevailing hourly market attorney rates in the relevant community (most often, the county or district of the litigation venue in question). Various methods are used by fee proponents or contestants, such as a matrix, billing surveys (such as those reported by the National Survey Center, the National Journal, and Legal Times), attorney declarations, and evidence of recent court awards of fees to attorneys with comparable qualifications handling similar cases. (Salazar v. District of Columbia, 123 F. Supp.2d 8, 14 (D.D.C. 2000).) Some of the common matrices used to establish reasonable hourly attorney rates are the Laffey Matrix or the Adjusted Laffey Matrix (or hybrids of one or the other). We now provide a discussion about how courts treat use of these matrices, whether accepting them, criticizing them, rejecting them outright, or adjusting them further.

     Laffey Matrix. The Laffey matrix is an inflation-adjusted grid of hourly rates for lawyers of varying levels of experience in Washington D.C. used for many years by the U.S. Attorney’s Office for determining fees in litigation claims (especially civil rights litigation). This matrix was approved originally in Laffey v. Northwest Airlines, Inc., 572 F. Supp. 354, 371-375 (D.D.C. 1983), aff’d in part, rev’d in part on other grounds, 746 F.2d 4 (D.C.Cir. 1984). The matrix starts with attorney’s fees rates previously adopted by the courts as reasonably reflecting the local market (1982 hourly rates for the Washington D.C. metropolitan areas approved by the D.C. Cir. in 1983) and then updates them by applying the change in the Metropolitan Washington area Consumer Price Index (CPI) to those 1982 rates. The U.S. Attorney in the DOJ continues to use a version of the Laffey matrix. It has been cited as good evidence of market hourly rates for attorneys practicing in the federal employment arbitration or gender discrimination areas of law. (See, e.g., Save Our Cumberland Mountains v. Hodel, 857 F.3d 1516, 1525 (D.C.Cir. 1988) (en banc) [federal employment arbitration]; Woodland v. Viacom, Inc., 255 F.R.D. 278, 280 (D.D.C. 2008) (approving Laffey matrix rates in gender discrimination action].)

     Circuit Courts Not Condoning Use of Laffey Matrix. The Fourth Circuit has expressly disapproved reliance on the Laffey matrix, requiring instead that fee awards be based on prevailing market rates established by other forms of evidence (such as the proof listed in paragraph 1 above). (Robinson v. Equifax Information Services, LLC, 560 F.3d 235, 245 (4th Cir. 2009).) The Ninth Circuit recently questioned the reliability of this matrix and sustained a district judge’s refusal to use it, because (1) acceptance of the matrix for the D.C. area did not mean it is a sound basis for determining rates elsewhere (especially a legal market 3,000 miles away), and (2) it was questionable whether the matrix was a reliable measure of rates even in Alexandria, Virginia, located just across the river from Washington, D.C. (See Prison Legal News v. Schwarzenegger, 608 F.3d 446, 454 (9th Cir. 2010).)

     In our Part 2 post in this area, we will explore criticisms of the Laffey Matrix, judicial sentiment on the Adjusted Laffey Matrix, and U.S. District Judge Walker’s own twist on using the Laffey Matrix.

     For our previous posts on the Laffey Matrix, see our June 10, 2010 post and our March 5, 2009 post on the subject.