Friday, December 18, 2009

Solving the Simmons puzzle

For purposes of awarding attorneys' fees to lawyers who represent successful plaintiffs, the Court of Appeals has been gone out of its way to distinguish between the four judicial districts in New York. The highest rates are in the Southern District of New York, which includes Manhattan. The other districts, including adjacent Eastern District of New York, have lower hourly rates. If your office is in Manhattan but you win a trial in Brooklyn (EDNY), there are ways to get the higher SDNY rates, but it's not easy.

In Simmons v. New York City Transit Authority, 575 F.3d 170 (2d Cir. 2009), summarized here, the Second Circuit said that the SDNY lawyer who wins the trial in Brooklyn can get SDNY rates if the plaintiff can establish that her lawyer would likely have produced a much better result than a lawyer in EDNY.

The Court therefore presumes that a district court should award fees at the prevailing market rate in the district in which it sits. To overcome the presumption in favor of this "forum rule," the plaintiff must show “that a reasonable client would have selected out-of-district counsel because doing so would likely (not just possibly) produce a substantially better net result.” Under Simmons, “[a]mong the ways an applicant may make such a showing is by establishing that local counsel possessing requisite experience were unwilling or unable to take the case.”

This is a difficult standard to apply. There are many good civil rights lawyers in the Eastern District of New York. How can a lawyer in Southern District of New York (with its much higher hourly rates) prove that she was the best choice for the EDNY lawsuit? We found out in early December. The case is Germain v. County of Suffolk, 2009 WL 4546671 (E.D.N.Y. Dec. 5, 2009). Germain had a discrimination lawsuit in EDNY. Plaintiff's first law firm was disqualified from the case, and other law firms on Long Island wanted too much money up front and charged hourly rates. Other lawyers did not call her back. Of course, they are now regretting their actions. Germain won the case, and the lawyers who did represent her without charge receive attorneys' fees in excess of $200,000.

Germain's difficulties in finding an EDNY lawyer to handle her case entitle her lawyers (whose offices are in Manhattan) to SDNY rates. In this case, Germain's lawyer, Janice Goodman, Esq., recovers $450.00 per hour. Germain solves the Simmons puzzle. Judge Spatt reasons:

On these facts, the Court finds that the Plaintiff has met her burden to show that it was necessary for her to retain out-of-district counsel. After DeJong was disqualified and other local civil rights attorneys in Long Island declined to take the case on a contingent basis, the Plaintiff was faced with the choice of proceeding pro se or retaining out-of-district counsel. Under the circumstances, it was reasonable for the Plaintiff to believe that Goodman, an experienced civil rights lawyer, could produce a substantially better result than any relief she might have been able to obtain acting pro se. Accordingly, the Court finds that the conventional forum rule does not apply in this case.

This is a mixed result. True, Judge Spatt applied SDNY rates for an EDNY case. But cases like this strike a nerve among civil rights lawyers who maintain offices in Manhattan but try cases in Brooklyn. The Simmons equation really grows out of an earlier Second Circuit attorneys' fees case, Arbor Hill v. County of Albany, 522 F.3d 182 (2d Cir. 2008), where the Court of Appeals presumed that the hourly rate should be assessed based on the district in which the case was tried, not where the lawyers have their offices. Albany (where the Arbor Hill case was handled) may be far from New York City (where the Arbor Hill lawyers had their offices), but Brooklyn is only a few subway stops from the SDNY courthouse in Manhattan. The EDNY/SDNY distinction is the subject of a particularly interesting footnote in Gutman v. Klein, 2009 WL 3296072 (EDNY Oct. 13, 2009), where Judge Cogan noted that many of the cases pending in EDNY are actually handled by SDNY lawyers. Footnotes like this are always worthy reading. Here is part of it:

A purely geographic lodestar also ignores the practical reality of practicing law in New York, which the docket of this Court reflects. Of lawyers that currently appear before this Court, 307 of the lawyers have offices in the Eastern District, while 727of the lawyers have offices in the Southern District. This raises the question of exactly what is the bar that practices in this district. Indeed, much less travel time is chargeable to clients coming from Manhattan to this Court than from Riverhead, which is within this district. Moreover, the two district courts have recognized the significant overlap between attorneys practicing in the Southern and Eastern Districts by adopting a single set of Local Rules for both districts. Even Congress has recognized the overlap by allowing an exception from the normal district-only residence requirement for U.S. Attorneys and federal judges, an exception which permits United States attorneys and federal judges, unlike any other district except the District of Columbia, to reside in one district and work in the other. See 28 U.S.C. § 545(a) (U.S.Attorneys); 28 U.S.C. § 134(b) (district court judges). This is just part of the reality that law is now practiced in an environment where law firms maintain multiple offices nationwide, attorneys maintain multiple federal bar admissions and have national practices, and modern telecommunications permit court appearances by video and telephone. It may be that the concept of a geographically-based as opposed to case complexity-based lodestar will someday have as much relevance to the selection of an attorney as dinosaurs have to birds.

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