The opinion of the court was delivered by: WAYNE D. BRAZIL
Chief Judge Henderson referred this matter to the undersigned to make findings and develop recommendations about the amount of attorneys' fees and costs to which plaintiff is entitled as a prevailing party under 42 U.S.C. section 1988.
Plaintiff seeks attorneys' fees totalling $ 733,074.29 plus a 1.9 enhancer on the portion of these fees that were contingent. Plaintiff also seeks $ 40,120.22 in costs (exclusive of expert witness fees, to which plaintiff concedes he is not entitled under current law).
Having considered the parties' oral and written submissions, the undersigned submits the RECOMMENDATIONS that follow.
Title 42 U.S.C. section 1988 provides that, in federal civil rights actions, "the court, in its discretion, may allow the prevailing party . . . a reasonable attorney's fee as part of the costs." Hensley v. Eckerhart, 461 U.S. 424, 426, 76 L. Ed. 2d 40, 103 S. Ct. 1933 (1983). Pursuant to section 1988, a court should award a prevailing plaintiff attorneys' fees "unless special circumstances would render such an award unjust." Id. at 429. It is not and cannot be disputed that plaintiff in this action is a "prevailing party" under section 1988. Moreover, defendants have not argued that an award of attorneys' fees to plaintiff would be unjust. Instead, defendants vigorously dispute the reasonableness of the amount of fees sought by plaintiff.
A reasonable attorneys' fee is determined by calculating the "lodestar," which is "the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Id. at 433; United Steelworkers of America v. Phelps Dodge Corp., 896 F.2d 403, 406 (9th Cir. 1990). Although, in exceptional circumstances, the lodestar may be adjusted by reference to factors outlined in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975),
the generally accepted wisdom now is that most (if not all) of the Kerr factors are taken into account (either explicitly or implicitly) during the initial calculation of the lodestar. See Burlington v. Dague, 92 Daily Journal D.A.R. 8664 (U.S. 1992); Blum v. Stenson, 465 U.S. 886, 898-900, 79 L. Ed. 2d 891, 104 S. Ct. 1541 (1984); Cunningham v. Los Angeles, 879 F.2d 481, 487-88 (9th Cir. 1988). Thus, in the sections that follow we will focus separately on each of the two components of the lodestar calculation: (1) what hourly rates are reasonable in this case and (2) what hours were reasonably expended on the litigation.
A. Reasonable Hourly Rates.
We focus first upon the reasonableness of the hourly rate sought by attorney Alan Exelrod, who performed the lion's share of the work in this case. Mr. Exelrod requests fees at a rate of $ 300 per hour, which he claims to be a reasonable 1991 rate for the work he has performed.
At the outset, we note our agreement with applying a 1991 rate. It is true that plaintiff originally engaged Mr. Exelrod in 1984. (Exelrod decl. para. 14 (11/22/91).) Thus, much of the work performed by Mr. Exelrod was performed at a time when his rate would have been somewhat lower than his 1991 rate. However, we apply the current rate to roughly adjust for inflation so that Mr. Exelrod is compensated for the delay in receiving his payment. See Pennsylvania v. Delaware Valley Citizens' Council, 483 U.S. 711, 716, 97 L. Ed. 2d 585, 107 S. Ct. 3078 (1987); D'Emanuele v. Montgomery Ward & Co., Inc., 904 F.2d 1379, 1384 (9th Cir. 1990).
"'Reasonable fees' under section 1988 are to be calculated according to the prevailing market rates in the relevant community." Blum, supra, 465 U.S. at 895. In demonstrating the reasonableness of a requested rate, "the burden is on the fee applicant to produce satisfactory evidence . . . that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Id., at 896, n. 11. We thus identify three interlocking elements we must consider in determining the reasonableness of the requested rate: (1) the prevailing rate (2) for similar services (3) by lawyers of reasonably comparable skill, experience, and reputation.
We consider the final element listed above first. The fact that we are required to assess the reasonableness of a requested rate by reference to rates charged by lawyers of comparable skill, experience, and reputation undercuts defendants' argument that the rate should be set at the level simply of attorneys of average competence. See pp. 4-5 of defendants' letter brief filed February 11, 1992. In fixing rates courts are to focus on the skill, experience and reputation of the attorneys who actually litigated the matter, not on some (probably unknowable) hypothetical "average" attorney. If an attorney representing a civil rights client is among the most skilled and experienced in his profession, then he or she is to be compensated at a rate that prevails for top-notch attorneys of comparable skill and experience rather than attorneys of average competence. To hold otherwise would discourage the better lawyers from representing plaintiffs in civil rights cases, thus jeopardizing the enforcement objectives of § 1988.
Plaintiff has submitted substantial credible evidence that Mr. Exelrod's skills and reputation are of the highest order and are comparable to those of the best civil litigators in the Bay Area. See declarations of Paul A. Renne (filed 2/11/92 -- para 5); James C. Sturdevant (filed 1/16/92 -- para. 11); Alan Carlson (filed 2/11/92 -- paras. 3-4) ("If I were in need of a plaintiff's attorney myself, Mr. Exelrod would be the first attorney I would call to take my case."); Jonathan H. Sakol (filed 2/11/92 -- paras. 4-5); Sanford J. Rosen (filed 11/22/91 - - para. 18); Mark S. Rudy (filed 11/22/91 -- para. 7); Laura Stevens (filed 11/22/91 -- para. 11); and Alan B. Exelrod (filed 11/22/91 -- paras. 2-13). Defendants do not challenge the inferences supported by these declarations; defendants do not argue that Mr. Exelrod is less skillful than the senior civil litigators in this geographic area. Nor do defendants challenge the claim that Mr. Exelrod is very experienced, having been in practice in a range of settings on a full time basis since 1968. Thus, we find that the reasonableness of Mr. Exelrod's requested rate must be measured by reference to the rate prevailing among the most skilled and highly regarded Bay Area attorneys having an experience level comparable to Mr. Exelrod's.
We turn next to the "prevailing rate" and "similar services" factors. Because of the arguable (at least partial) interdependence of these factors, it is important to set forth clearly how we are proceeding analytically with respect to these matters. We begin by exploring the meaning of the concept of "similar services." As we make clear in subsequent sections, the concept of "similar services" has more than one dimension, but one of those dimensions is exposed by the observation that, before we can think reliably about what rates are "prevailing," we must ask: prevailing where? And the "where" (within a given geographic area) could be defined variously by subject matter of litigation and/or by the level of complexity and/or magnitude/value of the interests at stake. In other words, by what criteria should we identify the relevant market? What should the 'sphere of reference' be for assessing the reasonableness of Mr. Exelrod's hourly rates? Should it be complex civil litigation generally (in the Bay Area), as plaintiff contends, or, as defendants urge, should it be the sub-world of employment litigation (again, in the Bay area); or should it be civil rights litigation in the Bay area, regardless of the level of complexity involved or the magnitude of the stakes?
We have found no opinion from either the Supreme Court or the Court of Appeals for the Ninth Circuit that squarely addresses this issue or that offers us meaningful guidance about how to approach it. There is an opinion on point from a panel in the Eleventh Circuit: Perkins v. Mobile Housing Board, 847 F.2d 735, 737-38 (11th Cir. 1988). That opinion clearly indicates that the two appellate and one district judge who heard the matter believe that the relevant market should consist of representations of "similar clients in similar cases" within the specific geographic area. Expressly rejecting the suggestion that the relevant market consisted of "the total range of fees for all federal civil litigation" within a given geographic area (in that case Mobile, Alabama), the Perkins court insisted that the "proper focus" would include "the type of case" or "the type of litigation at bar." Id., at 738. Unfortunately, the Perkins opinion offers no reasoning to support or explicate its vigorous pronouncements. It adverts to no legislative history, no social policy, no other cases. Similar limitations accompany the only other opinion from a court of appeals that cuts in the same direction, Buffington v. Baltimore County, 913 F.2d 113 (4th Cir. 1990) (indicating, at page 130, that the relevant market should be defined by "comparable cases," in that setting "civil rights litigation in the Baltimore community.").
Given these limitations, and the fact that we are not bound by cases decided by courts of appeal outside the Ninth Circuit, we elect to approach the matter afresh.
Because the policy implications of how this matter is resolved are substantial, we resort to policy to find our answer. Our thinking starts with our understanding of how the lawmakers have valued civil rights. It is our judgment that the framers of the Constitution and the national legislators who have enacted civil rights statutes have chosen to place civil rights at the very top of our society's value hierarchy. Moreover, our lawmakers have understood that civil rights are peculiarly fragile, that to protect them and give them reality we must institutionalize a constancy of vigilance by making truly useable means of enforcement readily available to many millions of people. Given the great importance of civil rights, and their known fragility, we believe it highly unlikely that Congress, in enacting § 1988, would have intended courts to define the relevant market for determining "similar services" in a way that would reduce the quality or availability of lawyers willing to serve as counsel for persons harmed by offenses to the nation's civil rights norms. Stated differently, we believe that Congress intended the courts to define the relevant market in the way that is likely to contribute the most, within sensible bounds, to advancing the goals of the civil rights laws.
We also believe, however, that Congress did not expect courts to approach the task of market definition in ways that would unjustly enrich (create windfalls for) lawyers who represent plaintiffs in civil rights actions. Congress presumably wanted courts to be sensitive to market realities, and to fashion market definitions that would provide reasonable assurance that each potentially meritorious civil rights claim would receive a level/quality of legal service commensurate with (and not appreciably more sophisticated or elaborate than) the needs of that claim. This consideration supports the view that in defining the relevant market courts should pay considerable attention to the level of complexity of the case and to the magnitude of the interests implicated in it. We find unrealistic the implicit suggestion (or assumption) in Buffington, supra, that the universe of civil rights cases is monolithic, that all civil rights cases reflect the same level of complexity and implicate interests of the same importance. Rather, from first hand experience on the bench we know that civil rights cases cover a wide range of complexity, some are quite simple, some as dense (conceptually and factually) as virtually any kind of litigation that surfaces in federal court. To ignore that reality would risk either underpaying lawyers who take on complex civil rights actions (thus partially defeating the purpose of § 1988 by reducing the likelihood that plaintiffs in such cases will be able to find lawyers to represent them) or overpaying lawyers who take on simple civil rights cases, creating an unjustifiable windfall.
We believe that the approach to market definition that simultaneously is responsive to this consideration and to Congress' valuation of civil rights generally (as discussed above) focuses primarily on the relative complexity of the case in which fees are sought and looks to hourly rates for cases of roughly comparable complexity across the full spectrum of case types in federal court litigation, not just to the rates associated with civil rights cases or some other sub-world of case type, e.g., employment cases.
This approach is superior to a simpler case-type approach based on "civil rights litigation" within the relevant geographic area in at least two respects. First, it contributes more toward advancing the goals of civil rights legislation generally by increasing the likelihood that lawyers will be found to service the truly complex and demanding civil rights cases, the kinds of cases which deliver civil rights benefits to the greatest numbers of people and contribute most to development of the law in this subject area. Second, it reduces the conceptual and evidentiary difficulties created by the fact that for at least some kinds of civil rights cases there is no real "market", meaning that the plaintiffs don't really pay the attorneys, and the attorneys don't really "compete" (at least as that term would be used in a capitalist economic model) to be hired by the plaintiffs. Much of the funding for much of the civil rights litigation comes from public institutions or from defendants against whom judgments are entered. These facts so distort the "economics" of civil rights litigation that it is quite misleading to suggest that there are meaningful market "rates charged for civil rights litigation", as suggested in the Buffington opinion. Id., at 130. See, e.g., Burlington, supra, 92 Daily Journal D.A.R. at 8665-66 (there is no "market treatment" for contingency fee cases).
For all these reasons, we conclude that the appropriate way to identify the relevant market, or sphere of reference, is to begin by assessing the relative complexity of the case at bar, to consider the magnitude of the interests implicated in it, and then to determine what rates generally are paid to civil litigators in federal court in cases of roughly comparable complexity and significance, regardless of case type (meaning that we should look not only to complex civil rights cases, but also to complex cases in other subject areas as well, e.g., securities, intellectual property, commercial contract, antitrust, etc.)
Despite defendants' protestations to the contrary, the case at bar was indisputably complex. It was not fungible with run of the mill employment litigation. While the event sequences were not as dense as in some settings, their details were far from clear (and those details were important). Moreover, probing for evidence of motive or for explanations of the conduct that occurred was quite a subtle undertaking, given the unusual circumstances, the environment of administrative rules and professional relationships, and political barriers. Nor were the damages issues straightforward, as evidenced by the dense motion work in this area and the unorthodox strategies devised by counsel. See, e.g., infra, at 37-38. But the arena where the complexity was arguably the most challenging and important was in the law, especially the law related to the first amendment claims and the immunity defenses. That complexity is clearly evident in the parties' trips to the court of appeals.
Given the complexity of the underlying action, and the level of skill and experience we have found that Mr. Exelrod brought to this matter, the appropriate 'sphere of reference' for conducting the first and most important dimension of our analysis of the "similar services" factor is the hourly rates that the best civil litigators can attract in our community when they are involved in truly complex cases.
Plaintiff has submitted substantial evidence that numerous senior Bay Area attorneys charged rates in 1991 for their services comparable to those sought by Mr. Exelrod here. Arguably most compelling (in part because most obviously disinterested) is the articles from the "California Law Business" section of The Recorder, dated January 27, 1992, pp. 15-22, which report that numerous San Francisco firms billed 1991 rates of $ 300 or more for the work of senior level partners. See Exhibit 1 to the decl. of Samuel Miller filed Feb. 11, 1992. Plaintiff has also submitted orders entered in other cases by both state and federal judges granting senior attorneys 1991 rates comparable to those sought here by Mr. Exelrod. See Plaintiffs' Separate Appendix of Evidence filed 11/22/91, exhibits 1, 2 (using 1990 rates), 5. Finally, plaintiff has submitted numerous declarations supporting his claim that many senior Bay Area attorneys charged 1991 rates comparable to the $ 300 per hour sought here by Mr. Exelrod. See declarations of Stephen Bomse (filed 2/11/92 -- para. 6); James C. Sturdevant (filed 1/16/92 -- para. 7-9); Fred Altshuler (filed 1/16/92 -- paras. 5-7); Jack Knebel (filed 1/16/92 -- para. 5); Sanford J. Rosen (filed 11/22/91 -- paras. 33-34); Guy Saperstein (filed 11/22/91 -- paras. 6-8); Warren E. George (filed 11/22/91 -- paras. 4-6); Mark S. Rudy (filed 11/22/91 -- paras. 15-16); Laura Stevens (filed 11/22/91 -- paras. 21-23).
At this juncture we turn to another dimension of the concept of "similar services" as that phrase is used in fee litigation under § 1988. The kind of comparison suggested by this phrase requires, as a necessary first step, a careful examination of the specific character of the services for which compensation is being sought. Courts must be sure that there is nothing unusual, i.e., out of sync with the norm in the market to which comparison is invited, before concluding that "similar services" have in fact been rendered. We must be sure, in short, that we compare apples to apples. It is in this respect that Mr. Exelrod's submissions fall short.
Plaintiff has provided no direct evidence that a solo practitioner performing the bulk of the work on a complex case himself could survive in the Bay Area market charging an hourly rate of $ 300. Plaintiff has provided no declaration from a solo practitioner stating that he or she charges that much for all work performed on a case. Those attorneys who have submitted declarations stating that they charge rates comparable to $ 300 per hour (i.e. Mr. Sturdevant, Mr. Altshuler, Mr. Knebel, Mr. Saperstein, Mr. George, Mr. Rudy, and, of course, Mr. Rosen) all are partners in firms and, presumably, do not regularly perform basic, detail level legal work. It is one thing for a partner in a firm to charge a premium rate for putting in a relatively limited number of well focused hours, serving largely as a director for and supervisor of junior partners or associates who do most of the work and whose time is billed at appreciably lower hourly rates. It is quite another thing for a solo practitioner to charge a premium rate for doing by himself much of the "legwork," e.g., reviewing documents and transcripts, taking routine depositions, doing factual or legal research, drafting written discovery and responses to discovery requests from opponents, etc.
A partner in a firm can survive in the marketplace charging a premium because the client is paying the premium rate for only a relatively small percentage of the total hours for which he is being charged. For example, in the order filed October 2, 1991 in the case Toussaint v. Gomez, No. C-73-1422 SAW (JSB) (attached as Exhibit 1 to Plaintiff's Appendix of Evidence filed 11/22/91) ("the Toussaint order"), although Mr. Rosen was awarded $ 330 an hour for the 83 hours he worked on the case, the average rate for all the attorneys in his firm was $ 198 per hour (for a total of 402.1 hours), and the total average rate for all the attorneys whose hours were reflected in the order was $ 210.70. Likewise, in the order filed on November 1, 1991 in the state case of Estes v. McCarthy, (Marin Superior Court No. 127247) (attached as Exhibit 5 to Plaintiff's Appendix) ("the Estes order"), the total average rate awarded was $ 173, despite individual rates of $ 330 for Mr. Rosen and $ 305 for Mr. Schlosser.
Absent clear proof to the contrary (which plaintiff has not provided), we must infer that fee paying clients simply would not tolerate being charged a premium rate for work done by a senior lawyer that could be done on a much more cost-effective basis by less senior and less pricey counsel. Although it is true, as plaintiff argues, that there will be some time saving by having the more experienced attorney do all the work himself, this factor is not sufficient to overcome the obvious inefficiencies that accompany an approach in which a very highly paid lawyer does all the detail work. There is only so much time that can be shaved from the defending of a deposition. And a senior litigator cannot read reams of documents, e.g., in a privilege screening, or even in a search for relevant material, a whole lot faster than a junior partner. More to the legal point, Mr. Exelrod had failed to carry his burden of proving that the substantially higher rate he seeks can be justified by a compensating substantial reduction in the number of hours spent on the case.
From the evidence we have been presented it appears that Mr. Exelrod performed most of the work in this case himself. He is requesting compensation for 2,265.62 hours. Exhibit 1 to plaintiff's Reply, filed 1/16/92. By contrast, Karen Dutton is seeking compensation for only 378.25 hours, the vast majority of which she spent on motion work during a six-month period in 1987. Id., exhibit C to decl. of Exelrod file 11/22/91. The Rosen firm claims only 66.4 hours. Exhibit 1 to Reply. And while it appears that plaintiff himself committed substantial time to the case, Exelrod decl. I, para. 27, we have no evidentiary basis for determining how much time, relative to Mr. Exelrod's, plaintiff contributed to the core lawyering work. Nor is it clear what efforts were taken to coordinate or integrate the work by plaintiff and his lawyer. Knowing little about the number of hours plaintiff spent on the case, and considering the very large proportion of the recorded time that Mr. Exelrod claims, we feel constrained to infer that a fair portion of the time for which Mr. Exelrod seeks a premium rate was spent doing work that, at least in a firm environment, would have been performed by an associate for a substantially lower rate.
Because an award of attorneys' fees under Section 1988 must be based on prevailing market rates, and because plaintiff has failed to demonstrate that the market could bear a rate of $ 300 per hour for most of the work performed on one complex case, we must reject Mr. Exelrod's requested rate as not being reasonable.
Having decided that the rate requested by Mr. Exelrod is not reasonable, we are left with the task of fixing an appropriate hourly figure. There is no caliper to point us to the precisely correct number. Rather, we consider the various round numbers (e.g., $ 200, $ 225, $ 250, $ 275) that the evidence suggests might be appropriate and select the figure that seems the most reasonable given all the circumstances. For a variety of reasons, we recommend that the district court fix Mr. Exelrod's rate at $ 250 per hour.
One way to get some leverage on this issue is to consider the average hourly rate for all the lawyering work done on similar cases. As we noted above, attorneys were awarded an average 1991 rate of $ 210 per hour in the Toussaint order. See Toussaint order, pp. 2-4. In the Estes order an average rate of $ 173 was awarded. Senior attorneys in both cases were awarded premium fees of $ 300 or more (which, as we found above, is a rate to which Mr. Exelrod is entitled for the more sophisticated work he has had to do on this case). The average awards in those cases provide a floor beneath which it clearly would not be appropriate to go with respect to Mr. Exelrod's time. The more difficult question is how far above those averages is appropriate. Given the indisputably high quality of Mr. Exelrod's lawyering skills, the depth of his experience, the excellence of the results he achieved on behalf of his client, and the fact that Mr. Finkelstein's efforts relieved Mr. Exelrod of having to perform some of the basic, detail legal work that was involved in this case, we recommend that the district court fix Mr. Exelrod's hourly rate at $ 250.
A couple of additional considerations support this recommendation. First, Mr. Exelrod actually charged clients $ 250 per hour in 1991 for basic consultation services. See Exelrod decl. (11/22/91) at para. 39. Although actual rates charged by attorneys are not dispositive in section 1988 fee litigation, they can be considered as evidence. Maldonado v. Lehman, 811 F.2d 1341, 1342 (9th Cir. 1987), cert. denied, 484 U.S. 990, 98 L. Ed. 2d 509, 108 S. Ct. 480 (1987). The fact that Mr. Exelrod ...