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T.B. v. San Diego Unified School District

United States District Court, S.D. California

February 23, 2018

T.B., et al., Plaintiffs,
v.
SAN DIEGO UNIFIED SCHOOL DISTRICT, Defendant.

         ORDER AFFIRMING IN PART TENTATIVE RULINGS; [DOC. NO. 382] ADOPTING REPORT AND RECOMMENDATION OF SPECIAL MASTER; [DOC. NO. 366] GRANTING IN PART AND DENYING IN PART PLAINTIFFS' SUPPLEMENTAL MOTION FOR ATTORNEYS' FEES AND COSTS; [DOC. NO. 340] GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR ATTORNEYS' FEES (1/19/2017 - 12/29/2017) [DOC. NO. 376]

          HON. MICHAEL M. ANELLO UNITED STATES DISTRICT JUDGE.

         On February 9, 2018, the parties in this action appeared before the Court for a final hearing regarding the award of attorneys' fees and costs to Plaintiffs (“the Brenneises”) under the Individuals with Disabilities Education Act (“IDEA”), 20 U.S.C. § 1415(i)(3). After considering the oral arguments of counsel, upon review of the entirety of the record and for the reasons set forth below, the Court AFFIRMS IN PART its previously issued tentative rulings, ADOPTS Special Master John H. L'Estrange, Jr.'s Report and Recommendation, and GRANTS IN PART and DENIES IN PART the Brenneises' supplemental motion for attorneys' fees and costs. In addition, the Court GRANTS IN PART and DENIES IN PART the Brenneises' motion for attorneys' fees incurred between January 19, 2017 and December 29, 2017. The Court AWARDS the Brenneises $934, 364.10 in attorneys' fees and costs.

         Background[1]

         The original focus of this lengthy litigation was whether Defendant San Diego Unified School District (“the District”) complied with the IDEA by providing Plaintiff T.B. a free appropriate public education (“FAPE”) for the 2006-2007 school year. The parties first litigated the dispute over the course of 27 days during the summer of 2007 in a due process hearing before the State of California's Office of Administrative Hearings (“OAH”), Special Education Division. On October 3, 2007, Administrative Law Judge (“ALJ) Susan Ruff issued a 75-page written decision (“OAH Decision”), concluding that the District had failed to provide T.B. with a FAPE for the 2006-2007 school year.

         By the time the ALJ issued her decision, a new school year (2007-2008) had begun. The parties continued to discuss modifications to an Individualized Education Program (“IEP”) that would comply with the OAH Decision, govern the new school year, and permit T.B. to attend school. Ultimately, they failed to reach mutually agreeable terms.[2]

         In January 2008, both parties appealed the OAH Decision to this Court. See 20 U.S.C. § 1415(i)(2)(A) (“any party aggrieved by the findings and decision made under this subsection, shall have the right to bring a civil action . . . in a district court of the United States, without regard to the amount in controversy.”). The Brenneises sought judicial review of those aspects of the OAH Decision upon which the District prevailed, as well as statutory attorneys' fees. See Doc. No. 1. The District separately sought review of the aspects of the OAH Decision that went in the Brenneises' favor. See Doc. No. 1, Case No. 08cv39. The Court consolidated the two appeals. See Doc. No. 22.

         In June 2010, the Court issued an order finding that the ALJ correctly determined that the District denied T.B. a FAPE for the 2006-2007 school year. See Doc. No. 118. Thereafter, the Brenneises moved for an award of approximately $1.4 million in attorneys' fees and costs. See Doc. No. 159. In March 2012, the Court issued a ruling granting in part, and denying in substantial part, the request for fees. See Doc. Nos. 237, 238. The Court determined that the Brenneises are a prevailing party under the IDEA, and entitled to an award of attorneys' fees and costs. See Doc. No. 238 at 13. However, the Court applied a statutory bar on fees pursuant to 20 U.S.C. § 1415(i)(3)(D), and awarded the Brenneises a total of only $55, 433.91 in attorneys' fees and costs. See Id. at 33. In sum, the Court found that the Brenneises were not entitled to any fees or costs incurred after May 4, 2007, when they rejected a final pre-hearing settlement offer from the District. See Id. at 24. The Brenneises appealed the Court's limited award of attorneys' fees, as well as other adverse rulings of the Court. See Doc. No. 252.

         On July 31, 2015, the United States Court of Appeals for the Ninth Circuit vacated the Court's award of attorneys' fees and costs, and remanded the matter for further consideration. See T.B. v. San Diego Unified Sch. Dist., 806 F.3d 451 (9th Cir. 2015). The Ninth Circuit concluded, inter alia, that the District's settlement offer was not more favorable from the perspective of the Brenneises, such that this Court should not have enforced the statutory bar on post-settlement offer fees and costs. Id. at 477. The circuit court also determined that the Court did not sufficiently explain its calculation of fees and costs. Id. at 485.

         In December 2015, the Brenneises filed a motion in the Ninth Circuit seeking attorneys' fees related to their prosecution of the appeal. See Doc. No. 86, App. Case No. 12-56060. Thereafter, the parties filed a joint motion requesting that the Ninth Circuit refer the case to mediation. See App. Doc. No. 90. The circuit court granted the motion, and the parties participated in an unsuccessful mediation. See Doc. No. 276. The Ninth Circuit subsequently issued an order granting the Brenneises' motion for attorneys' fees, in part, concluding that the Brenneises are entitled to a fee award, but directing this Court to calculate the amount of the award. See Doc. No. 291.

         On February 17, 2016, the District filed a petition for writ of certiorari with the Supreme Court. See App. Doc. No. 99. On April 18, 2016, the Supreme Court denied the petition for writ of certiorari. See App. Doc. No. 106. On May 16, 2016, the Court spread the Ninth Circuit's mandate and resumed jurisdiction over the action. See Doc. Nos. 285, 286.

         In November 2016, the assigned magistrate judge held a mandatory settlement conference on the issue of attorneys' fees and costs, but the parties did not reach a settlement. See Doc. No. 330. On January 18, 2017, the Brenneises filed a supplemental motion for attorneys' fees and costs, which the District opposed. See Doc. Nos. 340, 344.

         On March 17, 2017, the Court provided notice to the parties pursuant to Federal Rule of Civil Procedure 53(b)(1) of the forthcoming appointment of a Special Master in this case. See Doc. No. 353. The Court's Order provided as follows:

Pursuant to Rule 54(d)(2)(D), the Court may appoint a Special Master to assist the Court in determining an award of attorneys' fees. Upon due consideration, the Court finds that the determination of reasonable hourly rates for the Brenneises' counsel and their staff, the reasonable hours expended at each stage of this litigation, the lodestar calculation, and the resulting fee award, will be unusually complex and place an exceptional burden on the Court. Accordingly, appointment of a Special Master to accomplish these tasks in an effective and timely manner is appropriate.

Id. at 1-2.[3] On April 14, 2017, the Court appointed John H. L'Estrange, Jr. as a Special Master “to assist the Court in determining an award of attorneys' fees and non-taxable costs to the plaintiffs in this action under the IDEA.” Doc. No. 360 at 1. The Court instructed the Special Master to make the following determinations:

a. A reasonable hourly rate for the following individuals for work performed on this case on behalf of the plaintiffs at each stage of this litigation: Steven Wyner, Marcy Tiffany, Dana Wilkins, Dona Wright, and D. Shawn Nicholson. In doing so, the Special Master must keep the following in mind:
i. The Court previously determined that San Diego is the relevant legal community. This ruling may not be revisited.
ii. The Court previously determined that the above-named individuals would be compensated at the following rates for any work performed before May 4, 2007, during the administrative phase of this litigation: Steven Wyner and Marcy Tiffany at $425 per hour; Dana Wilkins at $125 per hour; and Dona Wright at $95 per hour. The Special Master is authorized to revisit this ruling in light of the Ninth Circuit's conclusion that this Court should not have applied the statutory bar on post-settlement offer fees, and the resulting vacatur of the fee award.
iii. The Court previously declined to use current billing rates for past work performed. The Special Master is authorized to revisit this ruling, keeping in mind that no “bonus or multiplier” may be used to calculate the plaintiffs' fee award. 20 U.S.C. § 1415(i)(3)(C).
b. The number of compensable hours reasonably expended by the above-named individuals for work performed on this case on behalf of the plaintiffs at each stage of this litigation. In order to do so, the Special Master must make the following determinations, and is authorized to revisit the Court's previous rulings as to any or all of these issues:
i. Whether any particular billing entries should be reduced or denied based on specific objections to those entries, including: sufficiency of the billing records, firm overhead, overstaffing and duplication, and travel.
ii. Whether any particular billing entries should be reduced or denied pursuant to 20 U.S.C. § 1415(i)(3)(D)(ii).
iii. Whether any particular billing entries should be reduced or denied based on the apportionment of time between successful and unsuccessful claims.
iv. Whether any particular billing entries should be reduced or denied for time spent on common aspects of the litigation, including tasks related to settlement, case management, client communications, and preparation of the administrative record.
c. Based on the reasonable hourly rates and the reasonable amount of hours expended during the course of this litigation, the lodestar for each of the above-named individuals, and then the sum of the individual lodestar amounts to determine the total fee award.
d. The amount of non-taxable costs properly awarded to the plaintiffs, keeping in mind the Ninth Circuit's previous admonition that “[o]n remand, the court should strive to explain” any “reductions more precisely.” T.B., 806 F.3d at 486. In doing so, the Special Master is authorized to revisit the Court's previous ruling on non-taxable costs in all respects.

Doc. No. 360 at 3-4. The Court reserved for its own determination the following issues:

a. Whether 20 U.S.C. § 1415(i)(3)(G) precludes the Court from reducing the total fee award pursuant to 20 U.S.C. § 1415(i)(3)(F), and if not, whether the total fee award should be reduced based on any of the relevant factors set forth in Section 1415(i)(3)(F).
b. Whether the total award of attorneys' fees and costs should be reduced based on the plaintiffs' degree of success at each stage of this litigation.
c. Whether the plaintiffs may recover fees and costs incurred pursuing “fees-on-fees-on-fees, ” and if not, the extent to which the total award must be reduced.
d. Whether the plaintiffs are entitled to interest on any fees or costs, and if so, the applicable interest rate.

Id. at 5.

         On October 2, 2017, the Special Master filed his Report and Recommendation. See Doc. No. 366. Both parties have filed objections, as well as responses to each other's objections. See Doc. Nos. 369, 370, 372, 373. On December 29, 2017, the Brenneises filed a motion seeking attorneys' fees incurred between January 16, 2017 and December 29, 2017. See Doc. No. 376. The District opposes the motion. See Doc. No. 378.

         Standard of Review

         Federal Rule of Civil Procedure 53(f) sets forth the applicable standard of review by the Court of a Special Master's Report and Recommendation. “The court must decide de novo all objections to findings of fact made or recommended” by the Special Master, unless the parties stipulate otherwise. Fed.R.Civ.P. 53(f)(3). The parties have not stipulated to a lesser standard of review in this case. Accordingly, the Court has conducted the required de novo review. Likewise, “the court must decide de novo all objections to conclusions of law made or recommended” by the Special master. Fed.R.Civ.P. 53(f)(4). In taking action on the Special Master's “report, or recommendations, the court . . . may adopt or affirm, modify, wholly or partly reject or reverse, or resubmit to the master with instructions.” Fed.R.Civ.P. 53(f)(1).

         Discussion

         The Brenneises now seek an award of over two million dollars in attorneys' fees and costs arising out of this litigation. See Doc. Nos. 340-13, 376-1. The requested fees and costs are summarized in the table below:

Proceeding

Fees & Costs Requested

Due Process Hearing (2006-2007)

$911, 582.17[4]

District Court Proceedings (Including "Fees on Fees") (2008-2012)

$586, 230.92

Ninth Circuit Appeal (Including "Fees on Fees") (2012-2015)

$426, 735.00

Ninth Circuit Mediation (2016)

$100, 953.25

Post-Remand Proceedings (Including "Fees on Fees") (2016-2017)

$84, 242.92

SUBTOTAL:

$2, 109, 744.26

Supplemental Motion for Attorneys' Fees Incurred Between January 19, 2017 and December 29, 2017

$99, 900.00[5]

TOTAL:

$2, 209, 644.26

         1. Relevant Law

         The parents of a child with a disability are entitled to an award of attorneys' fees under Section 1415(i)(3) of the IDEA as a prevailing party “when actual relief on the merits of [the child's] claim materially alters the legal relationship between the parties by modifying the defendant's behavior in a way that directly benefits the plaintiff.” Farrar v. Hobby, 506 U.S. 103, 111-12 (1992). The relevant portions of the statute provide:

(i) In general. In any action or proceeding brought under this section, the court, in its discretion, may award reasonable attorneys' fees as part of the costs-(I) to a prevailing party who is the parent of a child with a disability
(. . .)
(C) Determination of amount of attorneys' fees. Fees awarded under this paragraph shall be based on rates prevailing in the community in which the action or proceeding arose for the kind and quality of services furnished. No bonus or multiplier may be used in calculating the fees awarded under this subsection.

20 U.S.C. § 1415(i)(3).

         This Court previously found, and the Ninth Circuit affirmed, that the Brenneises are a “prevailing party” under the IDEA, because “the relief obtained in the administrative proceeding and affirmed by this Court was not de minimis, but was substantive.” Doc. No. 238 at 14; see also, T.B., 806 F.3d at 482.

         In order to calculate the fee award, the Court begins by calculating the number of hours reasonably expended on the litigation, and then multiplying that number by a reasonable hourly rate. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); see also, Aguirre v. Los Angeles Unified Sch. Dist., 461 F.3d 1114, 1115 (9th Cir. 2006). “This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services.” Hensley, 461 U.S. at 433.

         Importantly, “[t]he product of reasonable hours times a reasonable rate does not end the inquiry.” Id. at 434. After calculating the lodestar, the Court must determine whether to reduce the fee award based on the prevailing party's degree of success. Where “a plaintiff has achieved only partial or limited success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount.” Id. at 436. If so, courts have equitable discretion to reduce the amount of attorneys' fees awarded. Id. at 436-37. The “most critical” factor is the “degree of success obtained.” Id. at 436. “There is no precise rule or formula for making these determinations.” Id. at 436. The Ninth Circuit has held that this “degree of success” standard applies to attorneys' fee awarded under the IDEA. See Aguirre, 461 F.3d at 1115 (recognizing that Hensley applies to the IDEA attorneys' fees statute).

         Additionally, the Ninth Circuit “requires that courts reach attorney's fee decisions by considering some or all of twelve relevant criteria set forth in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67 (9th Cir. 1975).” Quesada v. Thomason, 850 F.2d 537, 539 (9th Cir. 1988). The Kerr factors are: “(1) the time and labor required; (2) the novelty and difficulty of the questions involved; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other 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.” Kerr, 526 F.2d at 70.

         The Court also must determine whether the fee award should be reduced based on statutory factors, as set forth in Section 1415(i)(3)(F), which provides in pertinent part:

[W]henever the court finds that-
(i) the parent, or the parent's attorney, during the course of the action or proceeding, unreasonably protracted the final resolution of the controversy;
(ii) the amount of the attorneys' fees otherwise authorized to be awarded unreasonably exceeds the hourly rate prevailing in the community for similar services by attorneys of reasonably comparable skill, reputation, and experience;
(iii) the time spent and legal services furnished were excessive considering the nature of the action or proceeding; or
(iv) the attorney representing the parent did not provide to the local educational agency the appropriate information in the notice of the complaint described in subsection (b)(7)(A), the court shall reduce, accordingly, the amount of the attorneys' fees awarded under this section.

20 U.S.C. § 1415(i)(3)(F).

         2. Calculation of the Lodestar

         A. Reasonable Hourly Rates

         At the first step in its lodestar calculation, the Court must determine a reasonable hourly rate for each attorney and staff member that worked on this case for the Brenneises. This includes three attorneys - Steven Wyner, Marcy Tiffany, and Dana Wilkins - as well as paralegals Dona Wright, David Tiffany, Jennifer Ralph, and Shawn Nicholson. The Brenneises request that the Court find the following rates reasonable:

Time Keeper

OAH Hearing

District Court

Ninth Circuit

Steven Wyner

$400-$475

$560

$675

Marcy Tiffany

$400-$475

$560

$675

Dana Wilkins

$195-$225

$225

N/A

Dona Wright

$125-$175

$175

N/A

David Tiffany

$115-$125

$125

N/A

Jennifer Ralph

N/A

$165

N/A

Shawn Nicholson

N/A

$225

N/A

Doc. No. 366 at 22 (citing Doc. Nos. 160-3, 160-4, 160-11, 340-16).

         The Court appointed the Special Master to make findings and recommendations regarding reasonable hourly rates for the Brenneises' counsel and their staff. After summarizing each individual's skills and experience, as well as the evidence submitted by the parties regarding hourly rates, the Special Master recommends the following reasonable hourly rates for the Brenneises' counsel and their staff throughout the course of the proceedings:

Time Keeper

Reasonable Hourly Rate

Steven Wyner

$450

Marcy Tiffany

$450

Dana Wilkins

$145

Dona Wright

$115

David Tiffany

$115

Jennifer Ralph

$115

Shawn Nicholson

N/A[6]

Doc. No. 366 at 40.

         i. Legal Standard

         Attorneys' fees awarded under the IDEA must be “based on rates prevailing in the community in which the action or proceeding arose for the kind and quality of services furnished.” 20 U.S.C. § 1415(i)(3)(C); see also Sam K. ex rel. Diane C. v. Hawaii Dep't of Educ., 788 F.3d 1033, 1041 (9th Cir. 2015) (“Reasonable attorney's fees are to be calculated according to ‘the prevailing market rates in the relevant community.'”) (quoting Van Skike v. Dir., Office of Workers Compensation Programs, 557 F.3d 1041, 1046 (9th Cir. 2009)). “The burden is on the fee applicant ‘to produce satisfactory evidence' of the prevailing market rates.” Id. “District courts may consider the fees awarded by others in the same locality for similar cases.” Id. (citing Moreno v. City of Sacramento, 534 F.3d 1106, 1115 (9th Cir. 2008)). “District courts may also use their ‘own knowledge of customary rates and their experience concerning reasonable and proper fees.'” Id. (quoting Ingram v. Oroudjian, 647 F.3d 925, 928 (9th Cir. 2011)).

         ii. Objections to the Report and Recommendation[7]

         a) The Brenneises' Objections

         The Brenneises object on various grounds to the Special Master's recommendation of a reasonable hourly rate of $450 per hour for their counsel. As an initial matter, the Brenneises argue that the Central District of California, where counsel maintain their offices, is the appropriate relevant community when determining the reasonable billing rate for all phases of this case. The Court previously determined that “San Diego is the relevant legal community, ” and noted that “[t]his community charges rates lower than attorneys who practice in our neighbor to the North.” Doc. No. 238 at 24. The Court instructed the Special Master not to revisit this aspect of its 2012 ruling. See Doc. No. 360 at 3. Accordingly, he did not. As such, this is technically not an objection to the Report, as the Special Master was ...


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