Filed: Apr. 07, 1993
Latest Update: Mar. 02, 2020
Summary: United States Court of Appeals, Fifth Circuit. Nos. 85-2767, 91-4961. Forest Henry SHIPES, on behalf of himself and others similarly situated, et al., Plaintiffs-Appellees, v. TRINITY INDUSTRIES, A Corporation, Defendant, Robert E. Rader, Jr., Appellant. Forest Henry SHIPES, et al., Plaintiffs-Appellees, v. TRINITY INDUSTRIES, Defendant-Appellant.* April 5, 1993. Appeals from the United States District Court for the Eastern District of Texas. Before WISDOM, JOLLY, and DeMOSS, Circuit Judges. E.
Summary: United States Court of Appeals, Fifth Circuit. Nos. 85-2767, 91-4961. Forest Henry SHIPES, on behalf of himself and others similarly situated, et al., Plaintiffs-Appellees, v. TRINITY INDUSTRIES, A Corporation, Defendant, Robert E. Rader, Jr., Appellant. Forest Henry SHIPES, et al., Plaintiffs-Appellees, v. TRINITY INDUSTRIES, Defendant-Appellant.* April 5, 1993. Appeals from the United States District Court for the Eastern District of Texas. Before WISDOM, JOLLY, and DeMOSS, Circuit Judges. E. G..
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United States Court of Appeals,
Fifth Circuit.
Nos. 85-2767, 91-4961.
Forest Henry SHIPES, on behalf of himself and others similarly
situated, et al., Plaintiffs-Appellees,
v.
TRINITY INDUSTRIES, A Corporation, Defendant,
Robert E. Rader, Jr., Appellant.
Forest Henry SHIPES, et al., Plaintiffs-Appellees,
v.
TRINITY INDUSTRIES, Defendant-Appellant.*
April 5, 1993.
Appeals from the United States District Court for the Eastern
District of Texas.
Before WISDOM, JOLLY, and DeMOSS, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
Forest Henry Shipes, a black male, was employed by Trinity
Industries. After he was laid off, Shipes filed suit against
Trinity under, inter alia, Title VII of the Civil Rights Act of
1964, 42 U.S.C. §§ 2000e et seq. Shipes alleged that Trinity's
all-white supervisory force had discriminated against him in
decisions concerning his job placement, promotions, and lay-off.
The district court certified a class that included all black hourly
employees at two of Trinity's plants. The trial was bifurcated,
and after the trial on liability Trinity was found to have
intentionally discriminated against black hourly employees in
*
On motion of plaintiffs-appellees and by order of this
court, Shipes's cross-appeal was severed on March 12, 1993.
initial hiring, promotions, terminations, and lay offs. The
district court then appointed an expert who determined damages to
individual class members. After an award of attorneys' fees to
Shipes in the amount of $308,238.05, judgment was entered. Trinity
appeals. Still further, Trinity's trial counsel appeals the
district court's imposition of personal sanctions against him
pursuant to Fed.R.Civ.P. 37(b) in the amount of $3,000.00.
I
Trinity Industries manufactures railcars and structural steel
products. Trinity operates over thirty production facilities in
thirteen states, including two plants in Longview, Texas. Shipes
was employed by Trinity at its plant in East Longview as a welder's
helper from October 23, 1979, until he was laid off on June 30,
1980.
On December 16, 1980, Shipes filed suit against Trinity under
Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et
seq. Shipes alleged that Trinity's all-white supervisory force had
discriminated against him personally in decisions concerning his
job placement, promotions, and layoff. In addition, the district
court permitted Shipes to maintain a class action that included all
black hourly workers employed at both of Trinity's plants in
Longview, Texas, between January 10, 1980, to April 1, 1984.
The district court bifurcated the trial, and the liability
portion was tried in 1984.1 On October 10, 1985, the district
1
During the course of discovery, the district court imposed
personal sanctions against Trinity's trial counsel, Robert Rader,
Jr. Rader's appeal of these sanctions has been consolidated with
this appeal.
court determined that Trinity intentionally discriminated against
plaintiff class members in initial placement and pay and in layoffs
at both Longview plants; intentionally discriminated against
plaintiff class members in promotions and terminations at the plant
in East Longview; and had discriminated against Shipes
individually in initial placement and pay, promotions, and layoff.
The district court then, sua sponte, appointed an expert to
determine damages.
On December 6, 1991, the expert submitted a model for damages,
and on January 22, 1992, the district court entered partial final
judgment and ordered that each class member have and recover from
Trinity the amount determined by the court-appointed expert.
Trinity had urged the district court to order class-wide relief,
but instead the district court instructed the expert to determine
damages on an individual-by-individual basis. The district court
subsequently awarded Shipes $308,238.05 in attorneys' fees.
Trinity appeals, and Trinity's trial counsel appeals the imposition
of personal sanctions.
II
On appeal, Trinity challenges class certification, the
computation of the back pay award, and the determination of
attorneys' fees.2 Trinity first appeals the district court's
2
Trinity also argues on appeal that the district court erred
by not including voluntary resignations in its analysis of
discrimination in layoffs. Trinity itself originally excluded
from its layoff analysis those employees who had resigned. Its
analysis, however, showed that a statistically significant higher
number of black employees than whites had been laid off. Thus,
Trinity then revised its study and included those employees who
had resigned. Trinity, however, presented no evidence of actual
employee motivation in resigning. Furthermore, Shipes's analysis
certification of a class, arguing that Shipes should not have been
allowed to represent blacks employed at a different plant from the
plant at which he worked. Second, Trinity appeals the district
court's method of calculating the back pay remedy. Trinity argues
that the district court erred in determining back pay awards on an
individual-by-individual basis. Trinity contends that the district
court should have ordered class-wide monetary relief—that is, it
should have awarded each and every plaintiff class member his pro
rata share of a pre-determined total monetary award. Third,
Trinity appeals the district court's determination of attorneys'
fees, arguing that the district court double counted factors and
relied on erroneous considerations in enhancing the award.
On the other hand, Shipes first argues that the district court
did not err in class certification. Shipes also argues that the
district court did not err in formulating the back pay remedy.
Furthermore, Shipes argues that the district court correctly
calculated the lodestar amount of attorneys' fees and properly
enhanced this amount.
In a consolidated action, Trinity's trial counsel, Robert
Rader, Jr., contends that the district court abused its discretion
by imposing personal sanctions against him in the amount of
$3,000.00. Shipes argues that the sanctions were warranted because
of Rader's failure to comply with discovery requests.
still showed an unfavorable result to black employees even when
employees who had resigned were included in the statistical data.
The district court found Trinity's proposal to include employees
who had resigned in its analysis of discrimination in layoffs
unsupported and illogical; we find no reversible error in the
district court's decision.
III
We first address Trinity's argument that the district court
should not have certified a class that included employees not only
at the plant where Shipes was employed, but also employees at an
additional plant. The district court's certification of a class is
reviewed under the abuse of discretion standard. Merrill v.
Southern Methodist Univ., 806 F.2d 600, 607 (5th Cir.1986).
Furthermore, the district court has wide discretion in deciding
whether to certify a proposed class. Jenkins v. Raymark Indus.,
Inc.,
782 F.2d 468, 471-72 (5th Cir.1986).
Trinity argues that Shipes failed to satisfy the commonality
and typicality requirements of Fed.R.Civ.P. 23(a), and thus it was
an abuse of discretion for the district court to certify a class.3
The district court determined that the two plants Trinity operated
in Longview utilized the same subjective criteria in making
personnel decisions; white supervisors at both plants applied the
subjective criteria; employees were transferred between the two
plants; the two plants had the same insurance plan, retirement
programs, and administrative forms; and the two plants used the
same Hourly Employee Handbook. The threshold requirements of
commonality and typicality are not high; Rule 23(a) requires only
that resolution of the common questions affect all or a substantial
number of the class members. Jenkins, 782 F.2d at 472.
3
Rule 23(a) provides that one or more members of a class may
sue on behalf of all if (1) the class is so numerous that joinder
of all members is impracticable, (2) there are questions of law
or fact common to the class, (3) the claims or defenses of the
representative parties are typical of the claims or defenses of
the class, and (4) the representative parties will fairly and
adequately protect the interests of the class.
Allegations of similar discriminatory employment practices, such as
the use of entirely subjective personnel processes that operate to
discriminate, satisfy the commonality and typicality requirements
of Rule 23(a). Carpenter v. Stephens F. Austin State Univ., 706
F.2d 608, 617 (5th Cir.1983). The district court clearly did not
abuse its discretion in certifying the class.
IV
A
We next turn to Trinity's argument relating to damages. The
district court's calculation of a back pay award is reviewed under
the clearly erroneous standard. Pegues v. Mississippi State
Employment Serv., 899 F.2d 1449, 1455 (5th Cir.1990). At the
outset, we observe that fashioning a class-wide back pay award is
exceedingly complex and difficult, and the process is fraught with
uncertainty. Pettway v. American Cast Iron Pipe Co.,
494 F.2d 211,
260 (5th Cir.1974). Two general premises apply to the computation
of a back pay award: (1) unrealistic exactitude is not required,
and (2) uncertainties in determining what an employee would have
earned but for the discrimination should be resolved against the
discriminating employer. Claiborne v. Illinois Cent. R.R.,
583
F.2d 143, 149 (5th Cir.1978), cert. denied,
442 U.S. 934,
99 S. Ct.
2869,
61 L. Ed. 2d 303 (1979). Furthermore, the district court must
be granted wide discretion in resolving ambiguities. United States
v. United States Steel Corp.,
520 F.2d 1043, 1050 (5th Cir.1975),
cert. denied,
429 U.S. 817,
97 S. Ct. 61,
50 L. Ed. 2d 77 (1976).
B
The district court ordered that back pay be determined on an
individualized basis. The district court ordered that only each
class member, whose beginning pay rate at the time he started
working for Trinity was below the average beginning rate for white
employees with the same qualifications, should receive a back pay
award; the award raised the hourly rate of such individual class
member by the difference between his beginning rate and the average
white beginning rate. Trinity argues that this back pay remedy
violates the fundamental rules of calculating such an award because
it unfairly excludes some class members and grants a windfall to
other class members. Trinity argues that the district court should
have determined a total sum that represented the difference between
black and white beginning rates as a whole, and then divided this
amount to all class members on a pro rata basis.4 Trinity argues
that such an increase to class members would tend to eliminate the
racial characteristics reflected in the distribution of pay rates;
in other words, black and white employees in representative numbers
would occupy the highest pay rates as well as the middle and lower
pay rates.
Trinity also argues—somewhat vaguely—that the district court's
4
Under Trinity's proposed method, every class member would
receive the same monetary award. In the calculation of the back
pay award for initial rate, for example, the average starting
rate for white employees as a group would be compared to that of
plaintiff class members. Simply illustrated, if five white
employees had beginning rates as a group of $5.00, $6.00, $7.00,
$8.00, and $9.00, the average would be $7.00. If five class
members had beginning rates of $3.00, $4.00, $5.00, $6.00, and
$7.00, the average would be $5.00. The total difference in rates
between the groups would be $2.00, (the difference in averages)
multiplied by 5, the number of class members, or $10.00. This
amount, $10.00, would then be distributed pro rata to the class
members, each class member receiving a back pay award of $2.00,
or $10.00 divided by 5. Trinity's method would thus shift the
entire group of plaintiff class members upward by that amount.
formula for determining back pay for premature separation from
employment was equally flawed. For premature separation from
employment, the district court ordered a comparison between the
actual length of service of each class member and the median length
of service of white employees hired in the same time period. Each
plaintiff class member whose service was less than the median
length of service for white employees received an award equal to
the difference.5 Again, Trinity argues that the appropriate remedy
is to calculate the total difference in the treatment of the
classes and then award each class member his pro rata share.
C
On the other hand, Shipes defends the district court's remedy.
Shipes argues that the district court's remedy was adopted in order
to bring the pay level of each black employee who was paid less
than the average salary of white employees with equal
qualifications up to the level of that average. Shipes argues that
the method proposed by Trinity is not intended to, and does not,
compensate individual black employees to the extent to which they
were underpaid relative to white employees with their
qualifications; instead, Trinity's method is concerned only with
equalizing the amounts paid to whites and blacks as a group.
Shipes argues that under Trinity's plan, each class member
would receive the same increment to his initial pay, regardless of
the amount by which he was actually underpaid or regardless of
5
For example, if the average length of employment for white
employees hired during a particular time period was two years,
but a black employee hired during this same time period was laid
off or terminated after one year, the black employee would be
entitled to back pay for one year.
whether he was underpaid at all. Shipes points out that some
blacks were hired at rates equal to comparable whites. Thus, there
is no basis to find that these black employees were discriminated
against. Consequently, Shipes argues that Trinity's proposed pro
rata award to all black employees would in effect deduct from the
wage rate awarded each black employee who was underpaid and, in
effect, grant that money as a windfall to non-discriminatees.
D
Let us begin our evaluation of these arguments by observing
that a Title VII class action suit imposes on the plaintiff a
bifurcated burden of proof. First, the plaintiff must establish
invidious class-based treatment; next, he must prove damages
caused to class members by that illegal conduct. A finding of
racial discrimination against a class "does not necessarily mean
that every member of the class is entitled to back pay." Johnson
v. Goodyear Tire & Rubber Co., 491 F.2d 1364, 1375 (5th Cir.1974).
Once a prima facie case of discrimination against a class is made,
a presumption of back pay arises in favor of all class members;
this presumption does not, however, per se entitle a class member
to back pay without some individual clarification.
Pettway, 494
F.2d at 259. Once it has been determined that the class has been
subjected to unlawful racial discriminatory practices, only those
individuals who have suffered a loss of pay because of the illegal
discrimination are entitled to compensation.
Johnson, 491 F.2d at
1376. Title VII does not require a remedy for those not
discriminated against. Gamble v. Birmingham So. R.R. Co.,
514 F.2d
678, 686 (5th Cir.1975).
The complexity of the case is a determining factor in what
method the district court should utilize to formulate a back pay
award. Pettway, 494 F.2d at 261. If the class is small, the time
period short, or if the effect of the discrimination is
straightforward, an individual-by-individual determination of what
each claimant's position would have been but for the discrimination
is possible.
Id. If, however, the class is large, the promotion
or hiring practices are ambiguous, or the illegal practices
continued over an extended period of time, a class-wide approach to
the measure of back pay may be necessitated.
Id. The process of
computation is not, however, an "either, or" approach, and the
determination of a back pay model is not a choice between one
approach more precise than another.
Id. at 261 n. 151.
Methods for determining back pay possessed of superior
certainty, such as the approach adopted by the district court,
should be exhausted before resorting to racially drawn class-wide
comparisons or pro rata approaches. United States v. Steel Corp.,
520 F.2d at 1055. The fact that a class is large does not mean
that pro rata relief should automatically be ordered. As noted
earlier, not all members of a class are automatically entitled to
back pay and there should be, if possible, a determination on an
individual basis as to which class members are entitled to damages
and the amount of such recovery.
Johnson, 491 F.2d at 1375.
E
To reverse the district court, we would have to conclude that
its calculations of back pay were clearly erroneous. On December
27, 1990, the district court entered an order that established the
guidelines that the court-appointed expert was to follow in
constructing the final model for back pay damages. With respect to
discrimination occurring in wage rates upon initial hiring, the
district court ordered that back pay be awarded to particular class
members based on the difference between the average starting wage
paid to white employees with the class member's qualifications and
the actual starting wage paid to such class member.
On July 29, 1991, the district court entered a second order
relating to damage calculations. In this order, the district court
addressed Trinity's concern that calculations for the class should
be determined as a total sum, and then damages awarded to each
class member on a pro rata basis. The district court stated that
Trinity's proposal rested on the assumption that a class-wide
finding of discrimination implies that each class member was
affected equally by the discrimination and therefore damages should
be determined by comparing the class of white employees with the
class of black employees. The district court, however, expressly
rejected this argument, stating that Trinity's proposed method of
awarding damages was inappropriate. Specifically, the district
court stated that although Trinity was found liable for
discrimination against the plaintiff class generally, it could not
be assumed that such discrimination was uniformly felt by all class
members.
The back pay model adopted by the district court has two
sections. First, for back pay remedying discrimination in initial
starting salary, each individual class member was compared to white
employees who had the same educational background and work
experience. If a class member was paid a starting rate below the
average starting rate of white employees with the same
qualifications, the class member was awarded that difference as
back pay. Second, for back pay in premature separation from
employment, each individual class member was compared to white
employees who were hired in the same time period. An average
length of employment for these white employees was determined. If
a class member was laid off or terminated before the average length
of employment for the group of comparable white employees, he was
awarded the difference as back pay.
Under the back pay formula relating to initial pay rates,
those individual class members who were paid starting rates above
the average starting rates of white employees with the same
qualifications received no back pay award. Similarly, those
individual class members who were not laid off or terminated prior
to the average length of employment for white employees hired in
the same time period received no back pay award. A Title VII
plaintiff, however, is not entitled to recover an amount greater
than his pecuniary loss. Pegues, 899 F.2d at 1457. Because these
class members did not suffer pecuniary losses as a result of
Trinity's discrimination, it follows that they are not entitled to
an award of back pay. After carefully reviewing the record and the
back pay remedy ordered by the district court, it is our opinion
that the remedy ordered was not clearly erroneous. The district
court's back pay remedy is therefore affirmed.
V
A
We now address Trinity's argument concerning the attorneys'
fees awarded to Shipes. The district court's determination of
attorney's fees is reviewed for abuse of discretion, and the
findings of fact supporting the award are reviewed for clear error.
Von Clark v. Butler, 916 F.2d 255, 258 (5th Cir.1990). As the
first step in determining the amount of attorneys' fees to award,
the district court must determine the compensable hours from the
attorneys' time records, including only hours reasonably spent.
Alberti v. Klevenhagen,
896 F.2d 927, 930 (5th Cir.), vacated in
part,
903 F.2d 352 (5th Cir.1990). As a second step, the district
court must select an appropriate hourly rate based on prevailing
community standards for attorneys of similar experience in similar
cases.
Id. The number of compensable hours is then multiplied by
the selected hourly rate to produce the "lodestar" amount.
Shipes sought recovery of attorneys' fees for 1,306.88 hours
of time at a rate of $175.00 per hour for lead counsel and $150.00
per hour for associate counsel. The district court, after
determining beyond doubt that the plaintiffs had indeed prevailed
on the central issue of the lawsuit and were thus prevailing
parties, ordered payment of 100% of the time requested at a rate of
$165.00 per hour for lead counsel and $140.00 per hour for
associate counsel, for a total fee award of $144,712.70. The
district court stated that only four of the Johnson v. Georgia
Highway Express, 488 F.2d 714 (5th Cir.1974), factors were subsumed
in the lodestar amount: (1) time and labor required; (2)
customary fee; (3) counsel's experience and ability; and (4)
awards in similar cases.6 After determining that the hours
accurately reflected the time expended in this action, the district
court further determined that the rates proffered by Trinity were
too low, but that Shipes's attorney had failed to show that
attorneys with abilities comparable with her actually received
$175.00 per hour. For this reason, the district court ordered
payment at the hourly rate of $165.00, which represented the amount
recently applied by the district court for work performed by lead
counsel in employment discrimination cases.
The district court did not err in its calculation of the
lodestar amount. The district court reviewed the attorneys' time
records and found them to be more than adequate. The district
court did not simply accept the hourly rate suggested by Shipes's
attorneys, but instead lowered it to an hourly rate that had been
applied in the community for similar cases. The district court
further ordered that the hourly rates for the attorneys be reduced
for the time the attorneys spent traveling. We find that the
district court did not err in its determination of the lodestar
amount of $144,712.70.
B
After determining the lodestar amount, the district court may
6
The twelve Johnson factors are (1) the time and labor
involved; (2) the novelty and difficulty of the questions; (3)
the skill requisite to perform the legal services properly; (4)
the preclusion of other employment by the attorney due to this
case; (5) the customary fee; (6) whether fee is fixed or
contingent; (7) time limitations; (8) the amount involved and
results obtained; (9) the experience, reputation, and ability of
counsel; (10) the undesirability of the case; (11) the nature
and length of the professional relationship with the client; and
(12) awards in similar cases. Johnson v. Georgia Highway
Express, 488 F.2d 714, 717-19 (5th Cir.1974).
adjust the lodestar up or down in accordance for relevant Johnson
factors not already included in the lodestar. After calculating
the lodestar amount, the district court must then apply the
remaining Johnson factors to determine if the lodestar should be
adjusted; the district court must be careful, however, not to
double count a Johnson factor already considered in calculating the
lodestar when it determines the necessary adjustments. Von
Clark,
916 F.2d at 258. Furthermore, the district court must explain with
a reasonable degree of specificity the findings and reasons upon
which the award is based, including an indication of how each of
the Johnson factors was applied.
Id. Four of the Johnson
factors—the novelty and complexity of the issues, the special skill
and experience of counsel, the quality of representation, and the
results obtained from the litigation—are presumably fully reflected
in the lodestar amount.
Alberti, 896 F.2d at 930. Although upward
adjustments of the lodestar figure based on these factors are still
permissible, such modifications are proper only in certain rare and
exceptional cases supported by both specific evidence on the record
and detailed findings by the lower courts.
Id.
After calculating the lodestar amount, the district court
enhanced the fee on five additional Johnson factors. First, the
district court determined that the lodestar amount should be
enhanced for the novelty and difficulty of the case, stating that
this action involved representation of over three hundred employees
at two manufacturing plants, challenged the entire spectrum of
Trinity's employment decisions, and involved complex, highly
technical data. Second, the district court enhanced the lodestar
amount based on the skill required, stating that Shipes's claim
necessitated extensive analysis, which Shipes's counsel competently
presented. Third, the district court enhanced the lodestar amount
for the preclusion of other employment, stating that Shipes's
counsel's total time commitment to this case for several months
adequately demonstrated that this case was inordinately
time-consuming and precluded the acceptance of other requests for
representation. Fourth, the district court enhanced the lodestar
amount based on special time limits imposed, stating that Shipes's
counsel's claim of nearly total time commitment before trial
supported an upward fee adjustment because of the exceptional skill
needed to present the last-minute data in an intelligible manner.
Fifth, the district court enhanced the lodestar amount based on the
amount of money involved and the obtained, stating that the outcome
of this lawsuit represented a tremendous victory based upon the
large number of claimants and the probable enormity of the relief.7
On December 7, 1987, the district court ordered an 80% enhancement
of the lodestar award based on these five Johnson factors,
increasing the attorneys' fee award from $144,112.70 to
$260,482.86.
685 F. Supp. 607.
C
We find that four of these five Johnson factors used by the
district court to enhance the lodestar amount—the novelty and
difficulty of the case, the skill required, special time limits
7
The district court further determined that enhancement
should not be granted for two remaining Johnson factors: the
undesirability of the case and the nature and length of
professional relationship with the client.
imposed, and preclusion of other employment—are unsupported, and
thus enhancement based on these factors was unwarranted. We do
think, however, that enhancement due to the results obtained may be
warranted.
The district court enhanced the lodestar amount based on the
novelty and difficulty of the case because it found that there were
over three hundred plaintiffs, an entire spectrum of employment
decisions was being challenged, the case was complex and highly
technical, and Trinity's obstinate conduct caused additional
difficulty. These factors—not uncommon in much present-day
litigation—simply do not render a case "rare" or "exceptional" for
purposes of enhancing the lodestar amount. All counsel competent
to handle a case such as this one are expected to be able to deal
with complex and technical matters; this expertise is reflected in
their regular hourly rate, based on fees for counsel of similar
experience and ability. Still further, the difficulty in the
handling of the case is adequately reflected in the number of hours
billed—hours for which the attorney is compensated in the lodestar
amount. Similarly, obstinate conduct by opposite counsel is
compensated by the additional number of hours that are required to
prevail over such obstinacy.
The district court's enhancement based on two other
factors—the skill required and special time limits imposed—was, we
think, also unwarranted as each is accounted for in the lodestar
amount. Even though Shipes's counsel presented extensive
statistical data with competence, nothing less should be expected
of counsel; consequently, this factor alone does not support
enhancement. We also find as an unwarranted basis for enhancement
"special time limits imposed" by the defendant's necessitating that
Shipes's attorney evaluate last-minute data shortly before trial.
Again, we emphasize that this factor is not an abnormal
occurrence—especially in a trial involving statistics and complex
data—and is accounted for by the additionally required hours that
are reflected in the lodestar.
We also conclude that the district court improperly enhanced
the lodestar based on the preclusion of other employment. The
district court found that Shipes's counsel was totally committed to
this case for several months prior to trial and concluded that this
demonstrated that counsel was precluded from accepting other
requests for representation. The district court did not make a
finding that Shipes's attorney had indeed been required to refuse
other employment because of this case, and enhancement based on
this factor is therefore unsupported. Furthermore, this factor
will ordinarily be subsumed within the lodestar amount: If, for
example, Shipes's attorney worked on nothing but this case, then
this potential loss of income in refusing other employment is
compensated for in the number of hours she billed in the instant
case.8
We do think, however, that the district court may have been
warranted in enhancing the lodestar amount because of the amount
8
We also note that the complaint in this case was filed on
December 16, 1980, the trial began on November 19, 1984, and
partial final judgment on liability was entered on October 10,
1985; for this extended period of time, however, Shipes's
attorneys sought fees for only 1,306.88 hours. Certainly during
this time period Shipes's attorneys were not precluded from
accepting other employment because of this case.
involved and results obtained.9 Shipes's victory was complete on
all issues. Furthermore, the victory resulted in a substantial
award of monetary damages for class members—plus, and very
importantly, future protection against discrimination in the form
of injunctive relief. For these reasons, enhancement of the
lodestar amount on account of the results obtained may have been
warranted. On remand, the district court must determine whether it
is customary in the area for attorneys to charge an additional fee
above their hourly rates for an exceptional result after lengthy
and protracted litigation. If Shipes's attorneys can demonstrate
this area custom, the district court will be warranted in enhancing
the lodestar in an appropriate amount based on this factor.
D
On August 4, 1988, the district court ordered an additional
33% enhancement of the lodestar amount based on the risk of not
prevailing, or the contingent nature of the case. The district
court found that the clear improbability of plaintiffs' ability to
find counsel to represent them in similar actions within the
district warranted the contingency enhancement.
In Islamic Center of Mississippi v. Starkville, 876 F.2d 465
(5th Cir.1989), this court adopted the approach to enhancement for
the contingent nature of the case set forth in Justice O'Connor's
concurrence in Pennsylvania v. Delaware Valley Citizens' Council
9
As we stated earlier, this factor is presumably reflected
in the lodestar amount and enhancement based on results obtained
is proper only in rare and exceptional cases supported by
specific evidence and detailed findings by the district court.
See Alberti, 896 F.2d at 930. On remand the district court
should take cognizance of this requirement in deciding whether to
enhance the lodestar amount based upon the results obtained.
(Delaware Valley II),
483 U.S. 711,
107 S. Ct. 3078,
97 L. Ed. 2d 585
(1987). In City of Burlington v. Dague, --- U.S. ----,
112 S. Ct.
2638,
120 L. Ed. 2d 449 (1992), however, the Supreme Court rejected
Justice O'Connor's approach. In Burlington, the Court first noted
that, "[a]lthough different fee-shifting statutes are involved, the
question is essentially identical" to the question it had
addressed, but which it had not resolved in Delaware Valley II:
whether a court may enhance the fee award above the lodestar amount
in order to reflect the fact that the party's attorneys were
retained on a contingent-fee basis and thus assumed the risk of
receiving no payment at all. In Burlington, the Court was urged to
adopt the approach set forth by Justice O'Connor in Delaware Valley
II. The Court expressly declined to do so, however, stating that
"we do not see how it can intelligibly be applied." Burlington, --
- U.S. at
----, 112 S. Ct. at 2642. The Court instead adopted the
approach reflected in Justice White's plurality opinion in Delaware
Valley II and held that enhancement for contingency was not
permitted under the fee-shifting provisions of the Solid Waste
Disposal Act and the Clean Water Act. Burlington, --- U.S. at ----
-
----, 112 S. Ct. at 2643-44.
Thus, Burlington eviscerates our holding in Islamic Center in
which we stated that Justice O'Connor's position was "the only view
to which a majority of the [Supreme] Court, and perhaps even the
whole [Supreme] Court could subscribe." Islamic Center, 876 F.2d
at 471. Burlington now tells us, however, how wrong we were.
Accepting the error of previous thinking, and following the clearly
lighted path of Burlington, we now hold that the contingent nature
of the case cannot serve as a basis for enhancement of attorneys'
fees awarded to prevailing plaintiffs under traditional
fee-shifting provisions. Accordingly, it was error for the
district court to enhance the lodestar amount by 33% based on this
factor.
E
In summary, we conclude that the district court correctly
calculated the lodestar amount to be $144,112.70. We also conclude
that one of the enhancement factors applied by the district
court—the results obtained—may have been warranted; we therefore
remand this issue to the district court for a determination of
whether this factor is supported by custom in the legal community
and, if so, the appropriate amount.
VI.
We now turn to the issue of sanctions which were accessed
against Trinity's trial counsel, Robert Rader, Jr., pursuant to
Rule 37(b), the appeal of which has been consolidated with this
action. The imposition of sanctions is a matter of discretion for
the district court; we review only for abuse. Frame v. S-H, Inc.,
967 F.2d 194, 202 (5th Cir.1992). We hold that the district court
did not abuse its discretion in sanctioning Rader.
In its order of March 5, 1984, the district court noted that
Trinity had been recalcitrant in relation to the discovery sought
by Shipes. As early as November 24, 1981, the district court
observed that Trinity's entire posture was infected with a tone of
indifference and disrespect for clearly established rules of
procedure. The district court warned that such lassitude would not
be countenanced. On February 12, 1982, the district court stated
that the recurring nature of Trinity's indifference to time limits
substantially limited the credibility of Trinity's protestations of
good faith. The district court further stated that Trinity's
objection to and failure to answer two interrogatories directly
violated an earlier court order; the district court cautioned that
Trinity's failure to answer was tantamount to contempt of court.
In 1982, the district court also noted that Trinity continued to
adhere to its posture of disobedience to court orders and again
warned that this attitude would not be countenanced further. At
this point, the district court cautioned Rader that Rule 37(b)
prescribed harsh actions against parties who failed to comply with
orders concerning discovery.
Notwithstanding these warnings, still Shipes had to file
numerous other motions to compel, which the district court granted.
The district court held a hearing on March 16, 1984, to allow Rader
to appear to show cause why he should not be sanctioned. After the
hearing, the district court concluded that there had been a
deliberate effort by Rader to delay discovery. The district court
did not, however, impose any sanctions at that time, but stated
that it did not expect to be presented with any additional problems
concerning discovery. After the hearing, Shipes was given the
information to which Rader had referred. Then, however, on March
20, 1984, Shipes filed yet another motion for sanctions. At this
time, the district court awarded sanctions. The court found that
the information given to Shipes by Rader after the earlier hearing
did not represent most of the outstanding discovery and that Rader
had been disingenuous in his representations to the court that he
had complied with the court's orders.
The district court did not abuse its discretion in
sanctioning Rader. On the contrary, the district court gave Rader
several warnings and on numerous occasions cautioned Rader to
comply with discovery requests. The court did not err in
concluding that Rader had failed to heed its warnings and had
failed to comply in good faith. Neither did the court err as to
the amount of $3,000.00. Under Rule 37(b), Rader may be personally
liable for reasonable expenses, including attorneys' fees, caused
by his failure to comply with a discovery order. Batson v. Neal
Spelce Assoc., Inc., 765 F.2d 511, 516 (5th Cir.1985). The
affidavit presented by Shipes's attorney along with the January 23,
1984 motion for sanctions showed attorneys' fees and expenses in
the amount of $1,617.50. On March 16, 1984, Shipes's attorneys had
to attend a hearing for Rader to show why he should not be
sanctioned, and on March 20, 1984, Shipes's attorneys had to
prepare yet another motion for sanctions. It was reasonable for
the district court to assume that the expenses and fees involved in
the second motion were similar to those incurred in preparing the
first motion. We therefore affirm the district court in
sanctioning Rader in the amount of $3,000.00.
VII.
For the reasons stated above, we affirm the district court's
certification of a class. Furthermore, we affirm the district
court on the issue of damages. We reverse, vacate, and remand,
however, on the issue of attorneys' fees; the district court
correctly determined the lodestar amount, but enhancement should
not have been ordered except possibly on one Johnson factor—the
results obtained—with respect to which we remand. In addition, we
affirm the district court's sanctioning of Trinity's trial counsel.
Accordingly, the decision of the district court is
AFFIRMED in part; REVERSED, VACATED, and REMANDED in part.
