JONATHAN W. FELDMAN, United States Magistrate Judge.
On September 3, 2010 this Court issued a Decision and Order (Docket # 351) approving the proposed settlement of a nationwide class action in which a putative class of over three thousand current and former African American Kodak employees, with Courtney Davis as lead plaintiff, had alleged systemic race discrimination in pay and promotions at Eastman Kodak Company. While the Court approved the settlement, it also specifically reserved decision on plaintiffs' counsel's motion for approval of attorney fees and costs which was initially filed on August 19, 2009. So as not to delay implementation of the relief approved in the class settlement, by stipulated Order signed and entered on October 1, 2010 (Docket # 352), the Court directed that final judgment be entered on the class
Plaintiffs' counsel seek $8,068,091.83 in attorneys' fees and reimbursement of $1,631,908.17 for expenses and costs incurred in prosecuting this case, amounting to a total request of $9.7 million for legal fees and unreimbursed expenses. Both figures are based on calculations made as of August 19, 2009. It is undisputed that counsel has incurred additional and not insignificant costs and legal fees since the date their initial motion was filed.
In my earlier Decision and Order approving the class settlement I discussed in detail the history of this litigation and the process that eventually led to the settlement of all substantive claims. I specifically incorporate those findings and conclusions into this Decision and Order. In approving the settlement, I described the litigation as unusually complex and litigated aggressively but professionally by both sides. Those words seem inadequate as I believe the litigation had a profound effect on not only the named plaintiffs, the class members, and Kodak officials, but also on all counsel and, candidly, the Court as well. The nature of the instant application obliges the Court to make this point clear: In my fifteen years on the bench, no case has been litigated with more skill, tenacity and legal professionalism than this case. The clients, corporate and individual, should be proud of the manner in which their legal interests were brought before and presented to the Court by their lawyers and law firms.
The focus of this opinion is necessarily on plaintiffs' lawyers and accordingly, I turn now to their application for fees and costs. Because four separate law firms located in four metropolitan areas in three different states seek legal fees and costs, a brief summary of the genesis of plaintiffs' legal team is necessary. In August 2002, Clayborne E. Chavers, the founder and owner of "The Chavers Law Firm," was contacted by Andrea Green, then President of the Employees Concerned for Justice ("ECJ") and was asked if his firm could represent the ECJ plaintiffs on a contingency basis. According to Chavers, Ms. Green told him that the ECJ had conducted a search both within the Western District of New York and across the United States and had been unable to find a law firm willing to take the case on a contingency fee basis and advance the costs necessary to prosecute their claims of discrimination. Chavers agreed to take the case and a retainer agreement was signed. After taking the case, Chavers "immediately realized the immensity of filing an employment discrimination class action against Kodak and that it was necessary for me to co-counsel with a larger law firm or firms with the resources, experience, staff and reputation required to prosecute this type of highly complex case." See January 8, 2010 Affidavit of Clayborne E. Chavers (Docket # 343) at ¶ 26. For two years Chavers tried without success to find a law firm willing to be co-counsel in the case. In 2004, however, Chavers was
Because the case was pending in the Western District of New York, Berger & Montague and Garwin Gerstein & Fisher contacted Jules L. Smith, Esq., a partner with the local law firm of Blitman & King LLP to ask if his firm would join the plaintiffs' legal team. Mr. Smith has been practicing law since 1971 exclusively in the area of employment law. He has "substantial experience" litigating discrimination cases and is a former Chair of the New York State Bar Association's Labor and Employment Law Section. See January 8, 2010 Affidavit of Jules L. Smith (Docket #341) at ¶¶ 17-18. Mr. Smith has served as local counsel throughout the litigation. For much of the active litigation before this Court, Shanon Carson, Esq. and Bruce Gerstein, Esq. acted as co-lead counsel for the named plaintiffs and the class. Mr. Chavers stopped billing for his time in the case in September 2006 due to health, financial and other reasons. See August 19, 2009 Declaration of Clayborne E. Chavers annexed to Docket # 320 at ¶ 6.
As set forth in my Decision and Order approving the class settlement, after several years of contentious litigation before this Court, and while an appeal on a unique and complex issue involving releases was pending before the Second Circuit, the parties engaged mediator Eric D. Green to explore whether the litigation could be resolved. After an extended mediation and post-mediation negotiations between the parties, a settlement was reached which resolved both the class claims and claims by counsel for attorneys' fees and costs. As part of the negotiated settlement, Kodak specifically agreed not to object to the pending attorneys' fees application, but is not representing to this Court that the amount sought is (or is not) fair and reasonable. See December 1, 2009 Hearing Transcript (Docket # 338) at p. 49.
In determining appropriate attorneys' fees in class actions, federal courts have historically utilized either the "presumptively reasonable fee" method (formerly the "lodestar method") or awarded fees based upon a percentage of the common fund (the "common fund method"). In the common fund method, the court sets as the fee some percentage of the common benefit fund. With the "presumptively reasonable fee" method, the
In a Title VII employment discrimination suit, a court may award "a reasonable attorney's fee" to a "prevailing party." 42 U.S.C. § 2000e-5(k). A "prevailing party" is one who "succeeds on any significant issue in litigation which achieves some of the benefit the party sought in bringing suit." Bridges v. Eastman Kodak Co., 102 F.3d 56, 58 (2d Cir. 1996) (citations and quotations omitted). There is no question here that class counsel represented a "prevailing party" and is entitled to attorneys' fees under Title VII. Nor is there dispute, at least in the Court's mind, that Goldberger factors two through six as set forth above weigh in favor of compensating class counsel fully for their tireless work on behalf of the plaintiffs. The remaining issue then is whether the fee negotiated in the settlement is fair and reasonable based on these factors and the time and labor expended by counsel. The fact that the fee award was negotiated separately and apart from the negotiated class settlement does not require a finding that the negotiated fee is reasonable. "[I]f the court finds good reason to do so, it may reject an agreement as to attorneys' fees just as it may reject an agreement as to the substantive claims. The court's perspective and obligations are different from those of the parties." Jones v. Amalgamated Warbasse Houses, Inc., 721 F.2d 881, 884 (2d Cir.1983).
Depending on the author of the judicial opinion, the Second Circuit has either modified, clarified, altered or replaced the lodestar method with the "presumptively reasonable fee" method of evaluating attorneys' fee applications. Arbor Hill Concerned Citizens Neighborhood Ass'n, 522 F.3d at 190 ("The meaning of the term `lodestar' has shifted over time, and its value as a metaphor has deteriorated to the point of unhelpfulness. This opinion abandons its use."). Regardless of nomenclature, it is this method that class counsel asks that the fairness of their requested fee be measured by. Under the "presumptively reasonable fee" approach, the court considers a number of case-specific factors
A corollary to the "presumptively reasonable fee" rule is the "forum rule." Under the forum rule, district courts reviewing fee petitions should generally use the prevailing hourly rate in the community where the case was litigated in calculating the presumptively reasonable fee. Indeed, the Second Circuit has instructed that a court must presume "that a reasonable, paying client would in most cases hire counsel from within his district, or at least counsel whose rates are consistent with those charged locally." See Simmons v. New York City Transit Auth., 575 F.3d 170, 174 (2d Cir.2009) (citation omitted). To overcome the presumption is not easy. "[A] litigant must persuasively establish 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." Id. at 175. In the "unusual" case where the presumption has been overcome, the "district court may use an out-of-district hourly rate-or some rate in between the out-of-district rate sought and the rates charged by local attorneys-in calculating the presumptively reasonable fee if it is clear that a reasonable, paying client would have paid those higher rates." Arbor Hill, 522 F.3d at 191 (emphasis added). In these circumstances, the focus of the presumptively reasonable fee is not necessarily the customary billing rates of the out-of-district law firm, but the rate a reasonable paying client would pay to obtain the legal services in a competitive legal marketplace.
With these legal guideposts in mind, the Court turns to plaintiffs' counsels' fee application. While counsel established many of the elements needed for a positive review of their fee application, their initial moving papers were deficient in several areas, two of which were crucial to the Court. First, counsel failed to provide to the Court any contemporaneous time records. Their failure to do so was contrary to the "mandatory requirement" established by the Second Circuit in New York State Ass'n of Retarded Children, Inc. v. Carey, 711 F.2d 1136 (2d Cir.1983).
Id. at 1154 (emphasis added). Strict compliance with the Carey rule was recently reemphasized in Scott v. City of New York, 626 F.3d 130 (2d Cir.2010). There, the Court of Appeals stated that except in the "rarest of cases" lawyers making fee applications in our Circuit "are required to submit contemporaneous records with their fee applications." Id. at 133 (emphasis added).
Class counsel's rationale for not providing the time records was frankly not particularly persuasive. Mr. Gerstein represented that "[o]ther courts that I've appeared in many, many times in class
In fact, Carey did involve class litigation as the plaintiff association sued the State of New York for various constitutional violations on behalf "of a class of mentally retarded persons confined at the Willowbrook Developmental Center." Carey, 711 F.2d at 1139.
A second and more problematic defect existed with respect to the original fee application. In seeking to be compensated at their customary hourly billing rates, class counsel paid scant attention to the particularized evidentiary burden required by the Second Circuit to overcome the forum rule's presumption.
Simmons, 575 F.3d at 175-76.
As the Court stated at the hearing, no such particularized showing was made or really attempted by class counsel in their initial fee application. See Hearing Transcript of December 1, 2009 (Docket # 338) at pp. 3-13. Accordingly, the Court permitted class counsel to supplement the record to provide the Court a factual basis to make a finding that a reasonable client in this case would have selected out-of-district counsel. Class counsel have now filed detailed affidavits setting forth their experience and qualifications as well as their knowledge of the unsuccessful efforts by the plaintiffs to obtain counsel in the Western District. In addition, class counsel have submitted affidavits from employment discrimination lawyers within the Western District explaining why the magnitude, complexity, and risks of this litigation made it likely that use of in-district counsel would produce a substantially inferior result. See Declaration of Patrick J. Solomon, Esq. (Docket #340) at ¶¶ 6-8; Declaration of Jules L. Smith, Esq. (Docket # 341) at ¶¶ 24-25; Supplemental Declaration of Clayborne E. Chavers, Sr., Esq. (hereinafter "Chavers Supp. Decl.") (Docket # 343) at ¶¶ 18, 23. The record, as now supplemented, confirms that class counsel have rebutted the forum rule presumption. I find that at the time plaintiffs were seeking counsel there were no lawyers or law firms within the Western District possessing requisite expertise and resources who could have prosecuted a nationwide employment discrimination case as complex and demanding as this. Therefore, I find that a reasonable client would have selected out-of-district counsel experienced in complex class action employment discrimination cases to prosecute their claims because doing so would likely produce a substantially better net result. Simmons, 575 F.3d at 175.
Rebutting the forum rule presumption, however, does not end the Court's analysis. Here, plaintiffs hired Mr. Chavers, a small firm
Class counsel argues that this sequential selection of out of district lawyers in three distinct legal communities requires this Court to automatically adopt the customary hourly rates of each of the lawyers in their home judicial districts as the "presumptively reasonable fee." According to Mr. Carson, "once I get outside of Rochester, then the [rates] of the counsel that the Plaintiffs are able to hire are presumed to be reasonable by the Second Circuit." See Hearing Transcript of December 1, 2009 (Docket #338) at p. 35. Because I do not believe that to be a correct statement of the law, I decline to adopt class counsel's position on this issue.
To be clear, the Court does not quarrel with the decision of Mr. Chavers to enlist the help of Berger & Montague upon the immediate realization that he did not have the "resources, experience, staff and reputation required to prosecute this type of highly complex case." Nor does the Court disagree with the decision of Berger & Montague to collaborate with Garwin Gerstein & Fisher "specifically to share the risk and the expenses of prosecuting the case." See January 8, 2010 Declaration of Shanon J. Carson (Docket # 344) at ¶ 28 (emphasis added). Indeed, the Court recognizes that such collaboration may reflect "the reality of large employment discrimination class actions where because of the great risk involved, multiple firms work together to spread that risk." Id. at ¶ 24. But that "reality" does not immunize counsel from having their out-of-district rates evaluated nor relieve the Court from keeping in mind that "a reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively." Arbor Hill, 522 F.3d at 190.
The problems with adopting class counsel's arguments are readily apparent in this case. For example, Mr. Chavers seeks to be reimbursed at his customary
By rough count, the pending fee petition asks the Court to endorse as presumptively reasonable nineteen different hourly billing rates for Berger & Montague, and twenty-three different hourly billing rates for Garwin Gerstein & Fisher. Believing there has to be a better way to
------------------------------------------------- Attorneys with greater than 20 years experience $450/hour ------------------------------------------------- Attorneys with 11-20 years experience $350/hour ------------------------------------------------- Attorneys with 6-10 years experience $300/hour ------------------------------------------------- Attorneys with 0-5 years experience $250/hour ------------------------------------------------- Paralegals $130/hour ------------------------------------------------- Investigators $100/hour ------------------------------------------------- Contract Law Students $ 75/hour -------------------------------------------------
I further determine that consistent with Second Circuit practice, travel time for all of the above categories should be compensated at half of the regular hourly rate. Finally, I determine that most of the hourly rates sought by Jules L. Smith of Blitman & King (who served as local counsel) are reasonable. The Court finds that the rates Blitman & King seeks for attorneys with 6-10 years of experience, however, must be reduced from $330 an hour to $300 an hour. The Court further determines that the hourly rate sought by Judith
The calculations resulting from the procedure set forth above and using the data supplied by class counsel yields an unreduced total fee of approximately 9.5 million dollars—almost 1.5 million dollars more than sought in the fee petition. See Exhibit "A" annexed to this Decision and Order. However, courts recognize that in any fee application, particularly where large numbers of attorneys from different law firms are working on the case, there exists duplication of effort and other inefficiencies. The Court's review of the time records submitted by the various law firms seeking reimbursement here confirms that a relatively small portion of time billed here could be deemed excessive, redundant, or otherwise unnecessary. In making an appropriate reduction however, the Court is not required to "set forth item-by-item findings concerning what may be countless objections to individual billing items." Lunday v. City of Albany, 42 F.3d 131, 134 (2d Cir.1994). Where, as here, the billing records are voluminous, "it is less important that judges attain exactitude, than that they use their experience with the case, as well as their experience with the practice of law, to assess the reasonableness of the hours spent." Amato v. City of Saratoga Springs, 991 F.Supp. 62, 65 (N.D.N.Y. 1998). "[A] district court can exclude excessive and unreasonable hours from its fee computation by making an across-the-board reduction in the amount of hours." Luciano v. Olsten Corp., 109 F.3d 111, 117 (2d Cir.1997).
Here, based on my experience with the case and after review of the records submitted, I find that an across-the-board reduction of ten percent would be appropriate to eliminate duplicative or unnecessary time. See Finkel v. Metro. Sign & Maint. Corp., No. 09 CV 4416(SJ), 2010 WL 3940448, at *16-17 (E.D.N.Y. Aug. 12, 2010) (finding that a ten percent across-the-board reduction was appropriate); M. Lady, LLC v. AJI, Inc., No. 06 Civ. 0194(HPB), 2009 WL 1150279, at *9 (S.D.N.Y. Apr. 29, 2009) (concluding that a ten percent reduction in the amount of hours was warranted where several of the billing records' entries were duplicative); Cover v. Potter, No. 05 CIV. 7039(GAY), 2008 WL 4093043, at *7 (S.D.N.Y. Aug. 29, 2008) (reducing the overall fee award by ten percent because the hours billed were "excessive"); Klimbach v. Spherion Corp., 467 F.Supp.2d 323, 332 (W.D.N.Y.2006) (finding that a ten percent across-the-board reduction was necessary due to the number of entries that were "vague").
Applying the ten percent reduction results in a presumptively reasonable fee that remains consistent with the attorneys' fee award requested by class counsel. Accordingly, I find that when measured against a presumptively reasonable fee as required by the Second Circuit, the $8,068,091.83 million dollars in attorneys' fees sought by class counsel is fair and reasonable and should be approved. Similarly, I find class counsels' request to be reimbursed in the amount of $1,631,908.17 for expenses and costs incurred in prosecuting this action to be justified, reasonable and fair and it also is approved.
As now apparent, while traveling a different road than urged by class counsel, the Court has nonetheless reached the same destination—approval of the attorneys' fee application. To the extent class counsel questions why it was necessary for the Court to challenge aspects of their fee petition if the bottom line
For the reason set forth herein, class counsel's motion for approval of an award of attorneys' fees and costs (Docket # 319) is
Total Court Total Number Rates For Number of of Court Non-Travel Non-Travel Total Travel Rates for Total Hours Hours Reimbursement Hours Travel Hours Reimbursement ---------------------|-------------|--------------|-----------------|---------|----------------|--------------- Attorneys with 0-5 | $250/hr. | 6,976 | $1,744,000.00 | 111 | $125/hr. | $ 13,875.00 years experience | | | | | | ---------------------|-------------|--------------|-----------------|---------|----------------|--------------- Attorneys with 6-10 | $300/hr. | 7,704.3 | $2,311,290.00 | 279 | $150/hr. | $ 41,850.00 years | | | | | | experience | | | | | | ---------------------|-------------|--------------|-----------------|---------|----------------|--------------- Attorneys with 11-20 | $350/hr. | 1,449.9 | $ 507,465.00 | 28.5 | $175/hr. | $ 4,987.50 years | | | | | | experience | | | | | | ---------------------|-------------|--------------|-----------------|---------|----------------|--------------- Attorneys with | $450/hr. | 6,731.4 | $3,029,130.00 | 526.3 | $225/hr. | $ 118,417.50 greater than 20 | | | | | | years experience | | | | | | ---------------------|-------------|--------------|-----------------|---------|----------------|--------------- Paralegals | $130/hr. | 5,802.6 | $ 754,338.00 | 51.2 | $ 65/hr. | $ 3,328.00 ---------------------|-------------|--------------|-----------------|---------|----------------|--------------- Investigators | $100/hr. | 104.2 | $ 10,420.00 | 0 | | ---------------------|-------------|--------------|-----------------|---------|----------------|--------------- Law Interns | $ 75/hr. | 6,456.7 | $ 484,252.50 | 24.3 | $ 37.50/hr. | $ 911.25 (includes after | | | | | | they graduated) | | | | | | ---------------------|-------------|--------------|-----------------|---------|----------------|--------------- TOTALS | | | $8,840,895.50 | | | $ 183,369.25 ---------------------|-------------|--------------|-----------------|---------|----------------|--------------- GRAND TOTAL | | | | | | $9,024,264.75 ---------------------|-------------|--------------|-----------------|---------|----------------|--------------- EXHIBIT A