Tuesday, May 21, 2019

The Matrix In The District Of Columbia: Passing The Laff(ey) Test

The United States Court of Appeals for the District of Columbia Circuit vacated and remanded a fee award to prevailing plaintiff's counsel in a disability rights class action

For decades, courts in this circuit have relied on some version of what is known as the Laffey matrix. Created in the 1980s, that matrix is based on a relatively small sample of rates charged by sophisticated federal-court practitioners in the District of Columbia. Litigants have updated the matrix for inflation using an assortment of tools. Recently, however, the United States Attorney’s Office sought to replace this standby with a new default matrix based on data for all types of lawyers—not just those who litigate complex federal cases—from the entire metropolitan area—not just the District of Columbia.

In this case, after plaintiffs prevailed in a long-running Individuals with Disabilities Education Act class action, the district court accepted the District of Columbia’s invitation to rely on the USAO’s new matrix in awarding fees. But as we explain below, the new matrix departs from the statutory requirement that reasonable fees be tethered to “rates prevailing in the community” for the “kind and quality of services furnished.” 20 U.S.C. § 1415(i)(3)(C). We therefore vacate the award and remand for the district court to recalculate the hourly rate based on evidence that focuses on fees for attorneys practicing complex federal litigation in the District of Columbia.

The winning claims

This case began almost fifteen years ago when plaintiffs,  parents of several children aged three to six, filed suit “alleging a ‘pervasive and systemic’ breakdown in the” District of Columbia’s compliance with IDEA resulting from the District’s failure “to identify large numbers of disabled children and delivering inadequate and delayed [educational] services to many others.”

The victory was sustained on appeal and the fee litigation followed

Simply stated, the question before us is whether the district court abused its discretion in determining that the hourly rates in the USAO’s matrix are “reasonable.”

Lost in The Matrix

To begin with, the USAO’s matrix incorporates rates for the wrong types of practitioner. The parties and the district court agree that this case qualifies as “complex federal litigation.” DL, 267 F. Supp. 3d at 69. Yet rather than confine its data to rates charged by attorneys practicing that genre of litigation—or even just litigators in general—the survey that the USAO drew from incorporates rates from all types of lawyers...

Plaintiffs brought this case on behalf of District of Columbia residents regarding District of Columbia schools against the District of Columbia. Yet the USAO matrix draws from lawyers who practice in the entire “metro area” as defined by the United States Census Bureau. The phrase “metro area” suggests proximity, but—according to the Census Bureau’s definition—that area stretches well beyond the District to cover thousands of square miles over three states, from rural Madison County, Virginia, to the eastern shore of Maryland, back to the foothills of Jefferson County, West Virginia. Needless to say, this case has no connection to most of those areas. Our court has held that ordinarily “the relevant community is the one in which the district court sits.” Donnell v. United States, 682 F.2d 240, 251 (D.C. Cir. 1982). Accordingly, our decisions refer to the relevant community as the District of Columbia.

The court rejected the District's remaining claims on the USAO matrix

One last issue remains: the rates for plaintiffs’ only lawyer who regularly bills fee-paying clients, Cyrus Mehri. We see no reason why the rates that apply to the rest of plaintiffs’ lawyers would yield inadequate compensation for Mehri’s services. Plaintiffs contend that Mehri is instead entitled to his usual billing rate, but his sparse affidavit tells little about whether his relatively minimal contributions to the case differ sufficiently from his colleagues’ to warrant a different methodology. Mehri Affidavit, No. 1:05-cv-01437-RCL, ECF No. 537-17 (Sept. 26, 2016), J.A. 428–29 (asserting he “did work related to class certification” and tried to “broker a resolution to this case”). As Eley instructs, the focus is properly on the market rate “charged by for-profit lawyers” for “the same type of litigation.” 793 F.3d at 105. And although stating in his affidavit that he charges the same rate no matter what type of work he performs, Mehri nowhere represents that a client on the market would hire him at that rate for the types of services he performed in
this case. Accordingly, the district court did not abuse its discretion by compensating Mehri using the same method as his co-counsel.

The court's majority opinion (authored by Chief Judge Tatel) ends by noting the unfulfilled hopes that parties could agree on fees.

We regret that this prophecy has gone unfulfilled and fervently hope that practitioners in this circuit—on both the plaintiff and defense sides of the bar—will work together and think creatively about how to produce a reliable assessment of fees charged for complex federal litigation in the District. In the meantime, however, we must discharge our duty to ensure that the adversarial alternative produces results that respect Congress’s mandates

Judge Sentelle dissented

Ambrose Bierce defined a lawyer as “[o]ne skilled in circumvention of the law.” Ambrose Bierce, The Unabridged Devil’s Dictionary 147 (Univ. of Georgia Press 2000). Though I do not suggest that this is an accurate description, I nonetheless would observe that the jurisprudence of IDEA litigation attorney-fee awards well establishes that lawyers and jurists are professionals skilled in complicating the law...

As the purpose of Congress in setting forth the general limitations of subsection (C) appears to encourage the determination of a market for assessing the reasonableness of fees, it would seem that an analysis of the fitness of either matrix to that determination could, without violating the standard under which we review factfinding, include reflecting on the reasonableness of persons obtaining legal representation in such a hypothetical market. It might be that those persons would choose the most expensive professionals for the most expensive part of the market. While such conduct might not be unreasonable, neither is it inherently unreasonable that they might choose a less imposing or less expensive attorney who is nonetheless trusted and competent to do the work in the case. It may shock counsel before us to learn, but it is not necessary in every case to have the most specialized or the most expensive counsel in order to receive competent legal services. In any event, it is not arbitrary fact finding for the judge to conduct an analysis of the evidence that is consistent with such supposition. In short, I find no abuse of discretion or other reversible error.

My colleagues disagree. I respectfully dissent.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2019/05/the-united-states-court-of-appeals-for-the-district-of-columbia-circuit-when-joseph-shaber-passed-away-he-left-over-23500.html

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