Friday, September 11, 2009

Not all judicial districts are created equal

If a civil rights plaintiff wins the trial, the defendant really loses twice. It pays out damages to the plaintiff, and it pays out legal fees to the plaintiff's lawyer. Sometimes attorneys' fees litigation lasts a few years as the parties fight over the attorneys' hourly rate (which is then multiplied by the hours expended on the case in order to determine the attorneys' fees). The hourly rate depends on many things, including the lawyer's experience and accomplishments, and the judicial district where the case was filed. Not all judicial districts are created equal.

The case is Lochran v. County of Suffolk, decided on September 3. The plaintiffs won their case which alleged that Suffolk County did not permit police officers to obtain limited duty assignments during pregnancy. Then the plaintiff's lawyers moved for attorneys' fees. They wanted more than $1 million. The district court awarded $678,000. One of the reasons for the reduction was that the court thought the hourly rates were too high. In part, this was because the court applied Eastern District of New York rates, not Southern District rates. This case was a good opportunity to challenge the distinction between the Eastern and Southern Districts on the hourly rates.

The Southern District includes Manhattan, The Bronx and the suburban counties to the north, including Orange and Dutchess. Eastern District includes Brooklyn, Queens, Nassau and Suffolk. The arbitrary boundary separating the judicial districts means that Orange County lawyers may receive higher rates than lawyers situated on Court Street in Brooklyn. Southern District rates are among the highest in the country. Eastern District rates are high, but nowhere near the rates authorized in the Southern District.

You wouldn't know it from reading the opinion, but this appeal squarely challenged the Eastern/Southern District fee distinction. (I happened to be at the oral argument). Plaintiff's counsel had their offices in Manhattan, not the Eastern District. They did not want Eastern District rates but the higher Southern District rates. They argued that there is no reason for the distinction between the districts for purposes of setting the hourly rates. The Court of Appeals (Jacobs, Sack and Kearse) implicitly rejects that argument by relying on its recent decisions holding that the appropriate hourly rate is determined by the district in which the case was filed, and that we ask what a hypothetical thrifty client would pay for legal services. Read all about the presumption in Arbor Hill v. County of Albany, 522 F.3d 182 (2d Cir. 2008). In Lochran, the Court of Appeals holds:

In this case, the district court declined to award Southern District rates, finding that plaintiffs’ choice of counsel “was not justified given the simplicity of the issues in the case, the wealth of competent civil rights attorneys in [the Eastern District], the length of time the attorneys were given to prepare for the case, and the far more limited resources being marshaled by the defendant, who was represented by the Suffolk County Attorneys’ Office.” Lochren v. County of Suffolk, 2008 WL 2039458, at *4 (E.D.N.Y. May 9, 2008). The court found that Southern District rates “would simply have been too high for a thrifty, hypothetical client--at least in comparison to the rates charged by local attorneys.” Plaintiffs have not overcome the presumption in favor of in-district rates, and the district court did not abuse its discretion in awarding fees at Eastern District rates.

In other words, the Court of Appeals agrees that the plaintiffs' lawyers were only entitled to the lower Eastern District rates and not the higher Southern District rates because the plaintiffs could have hired competent (and less expensive) Eastern District counsel rather than more expensive Southern District counsel. The Court of Appeals recognizes that in some cases, out-of-district counsel may recover higher rates on a showing of special circumstances (such as if no one in the district is able to handle the case), but this is not one of those cases.

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