MEMORANDUM OPINION
CHARLES KOCORAS, District Judge
This case comes before the court on two motions filed by Defendants eFunds Corporation and Deposit Payment Protection Services, Inc. The first is a motion for summary judgment on all claims asserted by Plaintiff Gladys Searcy pursuant to Fed.R.Civ.P. 56. The second is a motion for sanctions against Searcy, her lead counsel, and her lead counsel's law firm. For the reasons set forth below, the motion for summary judgment is denied and the motion for sanctions is granted in part and denied in part.
Defendants have not asked that any sanctions be imposed against Searcy's local counsel in this case. Any references in this opinion to Searcy's counsel denote her lead counsel only.
BACKGROUND
Defendant Deposit Payment Protection Services, Inc. ("DPPS") provides a service called the Shared Check Authorization Network, or SCAN, to a number of retailers throughout the United States. SCAN is designed to assist retailers in deciding whether or not to accept a personal check from a customer. To provide this service, DPPS collects information about individuals who have presented bad checks, compiles the information into a data file, and then distributes that file electronically to each of its merchant-subscribers. Retailers could then run a search for a particular consumer's information in the file and accept or decline a check from that consumer based on the results of that search.
The SCAN data file contains a list of driver's license numbers and bank account numbers. These numbers are associated with individuals who have either presented checks that have been returned unpaid or have had their bank accounts closed for cause. Upon initiating its subscription to SCAN, a merchant receives an initial SCAN file with the most current list of numerical identifiers linked to unpaid, returned checks and closed bank accounts. Each day thereafter, DPPS disseminates an updated list that reflects the addition of numbers belonging to persons who recently passed bad checks and the deletion of identifiers associated with persons who have made good on their unpaid checks.
On February 6, 2006, DPPS first incorporated a bank account number associated with Plaintiff Gladys Searcy into the SCAN file sent to all of its retailer customers. On that day and for each subsequent day, every retailer that subscribed to SCAN received the SCAN file containing Searcy's bank account number. Sometime in October 2006, Searcy requested that DPPS provide her with a report disclosing whether DPPS possessed any of her financial information and, if so, how the company used that information. DPPS, as a consumer reporting agency subject to the Fair Credit Reporting Act ("FCRA"), was obligated to provide Searcy with such a report upon her request. 15 U.S.C. § 1681g(a). The FCRA also required that the report contain certain information including the identity of each person that "procured a consumer report [about the person requesting the disclosure] . . . during the 1-year period preceding the date on which the request [for the report] is made." 15 U.S.C. § 1681g(a)(3)(A)(ii). Sometime after Searcy made her request, DPPS mailed her a consumer file disclosure report. The report did not include the names of retailers who had received the SCAN data file containing her bank account number.
Defendants maintain that eFunds Corporation is only a holding company that does not function as a consumer reporting agency and, as a result, is not subject to liability under the FCRA. Because the resolution of this issue is unnecessary to decide the present motion, we decline to address it at this time.
On February 15, 2008, Searcy filed suit against DPPS and eFunds Corporation, asserting multiple claims under the FCRA. After a substantial amount of discovery and class certification litigation, Searcy amended her complaint to assert only one claim against Defendants. In her only cause of action, she alleges that Defendants wilfully violated 15 U.S.C. § 1681g(a)(3)(A)(ii) by failing to include in her consumer file disclosure report the names of the retailers who received the SCAN data file containing her bank account number. Defendants now move for summary judgment as to Searcy's remaining claim. Defendants also request we impose sanctions against Searcy, her lead counsel, and her lead counsel's law firm in connection with the submission of a declaration during an earlier stage of the case.
LEGAL STANDARD
Summary judgment is appropriate when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to summary judgment as a matter of law." Fed.R.Civ.P. 56(c). A genuine issue of material fact exists when the evidence is such that a reasonable jury could find for the nonmovant. Buscaglia v. United States, 25 F.3d 530, 534 (7th Cir. 1994). The movant in a motion for summary judgment bears the burden of demonstrating the absence of a genuine issue of material fact by specific citation to the record; if the party succeeds in doing so, the burden shifts to the nonmovant to set forth specific facts showing that there is a genuine issue of fact for trial. Fed.R.Civ.P. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). In considering motions for summary judgment, a court construes all facts and draws all inferences from the record in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). With these principles in mind, we turn to Defendants' motion.
DISCUSSION
We will discuss the merits of Defendants' motion for summary judgment first before turning our attention to Defendants' motion for sanctions.
I. Defendants' Motion For Summary Judgment
Defendants argue that they are entitled to summary judgment on Searcy's claim because (1) DPPS did not violate 15 U.S.C. § 1681g(a)(3)(A)(ii); or, in the alternative (2) DPPS did not violate the FCRA willfully. We address each argument separately below.
A. DPPS' Compliance with 15 U.S.C. § 1681g(a)(3)(A)(ii)
Defendants contend they are entitled to judgment as a matter of law because the data file sent to SCAN member retailers which included Searcy's bank account number did not constitute a consumer report under the FCRA. Under the FCRA, when an individual consumer requests a file disclosure report from a consumer reporting agency, the report must include the names of all persons that "procured a consumer report" regarding the consumer during the one-year period before the request is made. 15 U.S.C. § 1681g(a)(3)(A)(ii). The parties do not dispute that Searcy's report did not name the retailers that received the SCAN file containing her bank account number during the relevant time period. As a result, the question of whether DPPS complied with the FCRA depends on whether the SCAN electronic data file may be characterized as a consumer report.
Under 15 U.S.C. § 1681a(d)(1)(C), a consumer report is defined as:
any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for . . . any other purpose authorized under section 1681b of this title.
Section 1681b provides that a consumer reporting agency may disclose financial information "[t]o a person which it has reason to believe . . . has a legitimate business need for the information in connection with a business transaction that is initiated by the consumer." 15 U.S.C. § 1681b(a)(3)(F)(I).
Congress entrusted the Federal Trade Commission ("FTC") with the power to enforce the FCRA but did not furnish the agency with the authority to pass substantive rules for private litigation. 15 U.S.C. § 1681s(a); see also Murray v. New Cingular Wireless Servs., Inc., 523 F.3d 719, 725 (7th Cir. 2008). When an executive agency has enforcement power for a particular statute but not rule-making authority, the agency's interpretations of the relevant statutory provisions are characterized as interpretive rules. Atchison, Topeka Santa Fe Ry. Co. v. Pena, 44 F.3d 437, 442 (7th Cir. 1994). Though the FTC's interpretive rules are not entitled to the same level of deference as regulations authored pursuant to explicit Congressional delegation, courts nevertheless should defer to the FTC's interpretation to the extent its reasoning is valid, thorough, and consistent with earlier and later pronouncements by the agency. Id.
The FTC has interpreted the FCRA's definition of a consumer report to include lists which indicate that a consumer has had personal checks dishonored in the past:
Bad Check Lists. A report indicating that an individual has issued bad checks, provided by printed list or otherwise, to a business for use in determining whether to accept consumers' checks tendered in transactions primarily for personal, family or household purposes, is a consumer report. The information furnished bears on consumers' character, general reputation and personal characteristics, and it is used or expected to be used in connection with business transactions involving consumers.
16 C.F.R. 600, app. (2010);
see also Estiverne v. Sak's Fifth Avenue, 9 F.3d 1171, 1173 (5th Cir. 1993).
Based on the FTC commentary and the text of the statute, the SCAN file would appear to fit comfortably within the confines of the FCRA's definition of a consumer report. The driver's license and checking account numbers contained therein indicate that the individuals associated with those numbers have previously presented bad checks. This information is obviously pertinent to both the character and general reputation of those consumers. Furthermore, the list is distributed to SCAN member retailers with the expectation that it will be used in the process of determining whether to complete a business transaction initiated by the consumer.
Despite indications to the contrary in both the FCRA language and the FTC commentary, Defendants nevertheless contend that the SCAN file is not a consumer report. Recall that the FCRA defines a consumer report as any dissemination of information bearing on certain consumer characteristics that is used or expected to be used as a factor in establishing the consumer's eligibility for one of the purposes listed in 15 U.S.C. § 1681b. See 15 U.S.C. § 1681a(d)(1)(C). The pertinent section of 1681b states that a consumer report may be issued "[t]o a person which [a consumer reporting agency] has reason to believe . . . has a legitimate business need for the information in connection with a business transaction that is initiated by the consumer." 15 U.S.C. § 1681b(a)(3)(F)(I). Defendants construe this portion of section 1681b to require that a consumer initiate a transaction with a merchant (i.e., present a check) before the merchant can have a legitimate need for the consumer's personal checking information. Based on their interpretation of section 1681b(a)(3)(F)(I), they also argue that a consumer reporting agency only has a permissible purpose for issuing a consumer report after the consumer has presented a check. Because DPPS distributed the SCAN file to retailers before the consumers listed presented a check, they conclude that their communication of consumer information must not have been a consumer report.
Defendants' argument rests upon an unreasonable interpretation of the definition of consumer report which relies solely on section 1681b while completely ignoring the language of section 1681a. Under section 1681a, a transmission of information is not a consumer report unless: (1) the information relates to a consumer's characteristics or reputation; and (2) the information is used or expected to be used for particular purposes. 15 U.S.C. § 1581a(d)(1)(C). Defendants eliminate the nature of the information sent from their statutory analysis; for them, the purpose for which the information in the communication is employed and the timing of its transmission control the inquiry. No reasonable interpretation of the statutory definition could omit one of the essential features of a consumer report. See Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979) (statutes must be interpreted so as to give meaning to every word Congress used). As a result, we decline to adopt Defendants' contention that the SCAN file is not a consumer report because it relies upon an interpretation of only half the relevant text.
Additionally, we find no textual support for Defendants' construction of section 1681b(a)(3)(F)(I) as imposing a chronological limitation on the issuance of consumer reports. That portion of the statute authorizes a consumer report to be issued "[t]o a person which [a consumer reporting agency] has reason to believe . . . has a legitimate business need for the information in connection with a business transaction that is initiated by the consumer." 15 U.S.C § 1681b(a)(3)(F)(I). We see nothing in the text to suggest that the legitimacy of a retailer's need for information depends upon the occurrence of an event such as the presentation of a check. The "initiated by the consumer" language does not impose a chronological restriction on the legitimacy of a merchant's receipt of a consumer report. Rather, the text merely describes the type of the transaction that an agency has reason to believe the information will be used for before issuing the consumer report at issue. For these reasons, we decline to adopt Defendants' interpretation of section 1681b(a)(3)(F)(I).
Defendants also contend that other sections of the FTC commentary, FTC administrative decisions, and FTC informal opinions demonstrate that the SCAN file does not constitute a consumer report. Defendants highlight a different section of the FTC commentary related to a product similar to a bad check list as evidence that a bad check list without personal names is not a consumer report. In discussing the status of this product under the FCRA, the FTC commentary states:
Credit guides. Credit guides are listings, furnished by credit bureaus to credit grantors, that rate how well consumers pay their bills. Such guides are a series of "consumer reports," because they contain information which is used for the purpose of serving as a factor in establishing the consumers' eligibility for credit. However, if they are coded (by identification such as social security number, driver's license number, or bank account number) so that the consumer's identity is not disclosed, they are not "consumer reports" until decoded.
16 C.F.R. § 600 app. (2010).
Though the commentary suggests that the two products share certain similarities, we see no reason to import the FTC's distinction between coded and uncoded credit guides into the bad check list context. The FTC did not differentiate between bad check lists that use personal names and those that employ other identifying information such as driver's license or bank account numbers in concluding that bad check lists are consumer reports. The commentary states only that any "report indicating that an individual has issued bad checks" is a consumer report. 16 C.F.R. § 600 app. (2010). We presume that the FTC acted deliberately in choosing to include the distinction in the credit guide section of their FCRA commentary and omit it in the portion related to bad check lists. See Russello v. United States, 464 U.S. 16, 23 (1983). Because the FTC elected not to differentiate between coded and uncoded bad check lists in concluding that all such lists are consumer reports, we decline to add such a qualification to their interpretation.
Defendants also argue that a number of FTC administrative decisions and informal opinion letters support their contention that the SCAN file does not constitute a consumer report. See, e.g., Howard Enterprises., Inc., 93 F.T.C. 909 (1979); Interstate Check Sys., Inc., 88 F.T.C. 984 (1976). The materials cited by Defendants do not refer to a coded bad check list in the context of assessing whether the product should be considered a consumer report under § 1681a. Instead, the documents submitted address the legality of a coded bad check list under the rules governing the permissible uses of consumer reports found in § 1681b.
For example, in Howard Enterprises, the Commission assessed whether Howard had violated § 1681b in disseminating a bad check list to its retailer customers. Howard Enterprises, Inc., 93 F.T.C. 909 (1979). At the time the FTC issued its opinion, the relevant portion of section 1681b granted permission to issue a consumer report "[t]o a person which it has reason to believe . . . has a legitimate business need for the information in connection with a business transaction involving the consumer[.]" 15 U.S.C. § 1681b(a)(3)(E) (1979). The FTC found that the list contained the names of a number of persons with whom the retailer recipients would never come into contact. Id. Based on this finding, the FTC concluded that Howard violated section 1681b by furnishing the list to stores that had no legitimate business need for many of the names on the list at issue. Id. In the context of finding the § 1681b violation, the Commission also noted that Howard could have avoided liability under § 1681b had it encoded its bad check list using driver's license numbers or bank account numbers. Id. The FTC apparently reasoned that distributing the list in that format would ensure that retailers would only receive the consumer information they legitimately needed to process a personal check transaction while omitting other unnecessary sensitive information. See id. The discussion in Howard Enterprises assumes that the encoded bad check list is still a consumer report but one that is presented in a format designed to guarantee that retailers would only receive the information they absolutely needed to process a personal check and nothing else. Nothing in the Howard Enterprise opinion nor any of the other FTC decisions and opinions submitted by Defendants suggests that encoding a bad check list removes that communication from the scope of the FCRA's definition of a consumer report under section 1681a.
We find that the FTC commentary's conclusion that bad check lists are consumer reports applies to the SCAN file and is predicated upon a thorough and valid analysis grounded in the language of the statute; therefore, we defer to its interpretation in deciding that the SCAN file constitutes a consumer report under 15 U.S.C. § 1681(a). Consequently, the retailers who received the SCAN file containing Searcy's bank account number "procured a consumer report" about her; DPPS violated 15 U.S.C. § 1681g(a)(3)(A)(ii) by failing to include the names of those retailers in Searcy's consumer file disclosure report.
B. Purported Willfulness of DPPS' Violation
Defendants maintain they are still entitled to judgment as a matter of law on Searcy's claim because DPPS did not violate the statute willfully. Searcy requests only statutory damages from Defendants; the FCRA provides for such relief for violations of the statute and permits a plaintiff to receive anywhere from $100 to $1,000 per violation. 15 U.S.C. § 1681n(a). Statutory damages are only available for willful violations of the FCRA. Id. In Safeco Ins. Co. v. Burr, 551 U.S. 47 (2007), the Supreme Court held that a willful violation of the FCRA may be established by proving that the defendant acted recklessly. The Court defined a reckless violation as one that "is not only a violation under a reasonable reading of the statute's terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with a reading that was merely careless." Id. at 69.
Defendants contend no juror could find that they acted negligently, much less recklessly, in interpreting the FCRA to exclude the SCAN file from the consumer report definition because they predicated their conduct upon a reasonable interpretation of the statute. In Safeco, the Court concluded that no willful violation may be found when a Defendant based his conduct upon an interpretation of the statute which, though erroneous, was not objectively unreasonable. Id. at 69-70. The court reasoned that a defendant who acted on the basis of a reasonable interpretation of the statute could not be said to have acted negligently, much less recklessly, and therefore was entitled to judgment as a matter of law on the willfulness issue. See id. We have already concluded that Defendants have not provided us with a plausible interpretation of 15 U.S.C. § 1681a(d)(1)(C) under which the SCAN file they distributed would not be considered a consumer report. The only question remaining is whether the violation at issue occurred negligently or recklessly. Various courts have held that this issue is a matter for the jury. See, e.g., Whitfield v. Radian Guar., 501 F.3d 262, 270-71 (whether or not defendant willfully violated FCRA "is a factual issue, not a question of law, and it therefore cannot be decided by [the court] as a matter of law); Ashby v. Farmer's Ins. Co., 565 F. Supp. 1188, 1205 (D. Or. 2008); (same); Edwards v. Toys "R" Us, 527 F. Supp. 2d 1197, 1210 (C.D. Cal. 2007) (willfulness under FCRA generally a question for the jury). We agree; accordingly, we find that Defendants are not entitled to summary judgment on the willfulness issue.
Because Defendants have not demonstrated they are entitled to judgment as a matter of law with respect to their compliance with the FCRA or the willfulness of their violation, we deny their motion for summary judgment.
II. Motion For Sanctions
Searcy has requested sanctions against Defendants arising out of mistaken deposition testimony given by Defendants' Fed.R.Civ.P. 30(b)(6) designee. We find nothing sanctionable in Defendants' conduct. Defendants notified Searcy of their corporate deponent's error in a timely fashion and made every effort to correct the designee's error. Searcy's motion is denied.
Defendants request that we sanction Searcy, her counsel, and her counsel's law firm pursuant to the court's inherent power and 28 U.S.C. § 1927 in connection with the submission of a declaration during the class certification phase of this litigation.
On September 14, 2009, Searcy filed a motion for class certification. In her motion, Searcy sought to establish her qualifications as a representative for the so-called Check Presenter Class. As relevant here, this class consisted of all persons who presented a check at a SCAN member retailer, requested a consumer file disclosure from SCAN, and received a disclosure report that omitted the name of the retailer at which the consumer had presented the check. In support of her efforts to serve as representative for this class, Searcy cited a portion of her sworn statement in which she asserted that sometime in September 2005 she presented a check for payment at a merchant, requested a consumer disclosure report from SCAN, and received a report without the name of that retailer included.
In their memorandum opposing class certification, Defendants challenged Searcy's credibility generally and specifically disputed the veracity of her account of the events of September 2005. With regard to Searcy's credibility in a global sense, Defendants highlighted her history of repeatedly authoring checks from her other overdrawn accounts and then depositing those checks into an active checking account. Defendants also argued that Searcy's description of having a check declined in September 2005 did not square with information produced during discovery. Defendants noted that Searcy's checking records showed that the only bank account Searcy would have had access to in September 2005 was a Washington Mutual account opened on September 12, 2005. Though the account statement listed an opening date of September 12, no funds were deposited in the account until September 13, 2005. Additionally, a copy of Searcy's request for a consumer disclosure report showed that she faxed her request at approximately 1:00 PM on September 13. Based on this evidence, Defendants contended that "[u]nless Plaintiff made her initial deposit, wrote a check, had that check declined, printed and completed her SCAN disclosure Order Form, and faxed the form to SCAN, all before 1:00 p.m. on September 13, it is difficult to conceive how she could have had a check declined in September 2005." Defs. Resp. in Opp. to Pl. Mot. for Class Cert. at 10.
In response to Defendants' arguments concerning her veracity, Searcy dismissed her past checking practices as irrelevant to the litigation and submitted a new sworn statement regarding her September 2005 check request. In her new declaration filed in November 2009, Searcy asserted that she opened a checking account with Washington Mutual Bank on September 12, 2005, and received a book of starter checks from the bank that same day. She also asserted that she presented one of those starter checks at a SCAN member retailer either during the evening of September 12 or the morning of September 13, 2005. Based on her statements, we made a factual finding that Searcy presented a check to a SCAN member retailer on or about September 12 and concluded that Searcy could adequately represent the interests of the Check Presenter Class.
Defendants then asked us to reconsider our grant of class certification in light of additional evidence that undercut the credibility of Searcy's statement. They submitted a sworn declaration from Steven Dickinson, a representative of Washington Mutual Bank. Dickinson stated that notations on Searcy's Washington Mutual account agreement indicated that she had opened an account with the bank online or via telephone on September 12. Dickinson further stated that Washington Mutual did not provide starter checks to individuals who opened their accounts online. Searcy offered no evidence to rebut Dickinson's statements. Based on Dickinson's declaration, we concluded that Searcy suffered from credibility concerns that prevented her from serving as an adequate class representative and decertified the Check Presenter Class.
Defendants ask that we impose sanctions against Searcy's lead counsel under 28 U.S.C. § 1927 as a consequence of their failure to independently corroborate the facts asserted in Searcy's November 2009 declaration before submitting the document to the court. Specifically, Defendants request that we require counsel to pay attorneys' fees and costs associated with procuring Steven Dickinson's declaration. Section 1927 provides that any attorney "who so multiplies the proceedings in any case unreasonably and vexatiously may be required to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." A court may impose sanctions under section 1927 upon an attorney who engaged in extremely negligent conduct. Kotsilieris v. Chalmers, 966 F.2d 1181, 1184 (7th Cir. 1992).
Searcy's counsel argue that they acted reasonably in merely consulting with their client before filing her November 2009 declaration because documentary evidence and counsel's own experience suggested that her statement was credible. Counsel contend that certain aspects of Searcy's Washington Mutual Account Agreement lent support to her statement. The account agreement stated that the account had been opened on September 12, 2005, which was consistent with the events described in Searcy's statement. The agreement also included Searcy's signature which indicated to counsel that Searcy had visited a Washington Mutual Bank location to open the account. In addition to the agreement itself, Searcy's counsel's own experience suggested that being provided with starter checks upon opening an account at a bank is a common practice.
In assessing the reasonableness of their choice to forego independent confirmation of Searcy's statement, counsel neglect to incorporate other important facts within their knowledge at the time they submitted their client's declaration. First, counsel were made aware during class discovery that Searcy had engaged in numerous questionable checking transactions that cast doubt on her credibility as a general matter. Second, the fact that Searcy's recollection tracked so closely to the hypothetical time line described in Defendants' opposition brief should have aroused counsel's suspicions with regard to its veracity. Finally, the importance of the declaration to the class certification litigation should have suggested the need to seek confirmation of Searcy's account from an outside source before presenting the document to the court.
Under these unique circumstances, we find that Searcy's counsel were extraordinarily negligent in choosing to rely solely on their client's representations before submitting the declaration at issue. Searcy's prior conduct, the substance of her statement, and the use of her declaration to establish her adequacy as a representative of a putative class should have alerted any reasonable counsel of the need for independent verification before submitting a sworn statement to the court. We therefore grant Defendants' motion for attorney's fees and costs associated with procuring the declaration of Steven Dickinson.
Additionally, Defendants request that we impose sanctions against Searcy and her counsel's law firm under the inherent power of the court. We do not entertain such requests lightly; "[b]ecause of their potency, inherent powers must be exercised with restraint and discretion." Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991). In this instance, we decline to sanction either Searcy or her counsel's law firm under our inherent power. We have already penalized Searcy for submitting the November 2009 declaration by denying her the opportunity to serve as representative for any putative class. With regard to Searcy's counsel's law firm, we see no reason why we should hold them accountable for the conduct of Searcy's lead counsel in this case. We therefore deny Defendants' motion for sanctions against Searcy and Searcy's counsel's law firm.
CONCLUSION
Defendants' motion for summary judgment is denied. Defendants' motion for sanctions against Searcy and her lead counsel's law firm is denied. Defendants' motion for sanctions against Searcy's lead counsel is granted. Defendants must present a detailed account of the costs and fees incurred in procuring Steven Dickinson's declaration within 30 days of the date upon which this opinion issues.
Dated: September 30, 2010
2005)). "Both `the quantity and quality of relief obtained,' as compared to what the plaintiff sought to achieve as evidenced in her complaint, are key factors in determining the degree of success achieved."
Id. (quoting
Carroll v. Blinken, 105 F.3d 79, 81 (2d Cir. 1997)). Even if the plaintiff does not prevail on all her claims in the lawsuit, her attorneys' fees should not be reduced "[w]here [she] has obtained excellent results."
Hensley v. Eckerhart, 461 U.S. 424, 435 (1983). Where, on the other hand, she "has achieved only partial or limited success," the fee may require reduction.
Id. at 436.
Although the court should consider reducing a fee to account for a party's limited success, it should not reduce a fee because "the fee would be disproportionate to the financial interest at stake in the litigation." Kassim v. City of Schenectady, 415 F.3d at 252. Avoiding this impermissible consideration is especially important in civil rights cases because "if private citizens are to be able to assert their civil rights, and if those who violate the Nation's fundamental laws are not to proceed with impunity, then citizens must have the opportunity to recover what it costs them to vindicate these rights in court." LeBlanc-Sternberg v. Fletcher, 143 F.3d 748, 764 (2d Cir. 1998) (internal quotation omitted). See Perdue, 130 S.ct. at 1676 (fee-shifting provisions in civil rights statutes "serve[] an important public purpose by making it possible for persons without means to bring suit to vindicate their rights"); City of Riverside v. Rivera, 477 U.S. 561, 574 (1986) ("a successful civil rights plaintiff often secures important social benefits that are not reflected in nominal or relatively small damages awards").
II. Reasonable Hourly Rates
To determine a reasonable hourly rate, the court must examine "the prevailing market rates in the relevant community." Perdue, 130 S.ct. at 1672 (quoting Blum v. Stenson, 465 U.S. at 895). See also Simmonds v. New York City Dep't of Corr., 2008 WL 4303474, *3 (S.D.N.Y. 2008) ("[t]he gravamen of a reasonable rate remains the market rate that a reasonable client would expect to pay given `the nature of the representation and type of work involved in a case'") (quoting Arbor Hill, 522 F.3d at 184 n. 2)). The burden rests with the prevailing party to produce "satisfactory evidence — in addition to the attorney's own affidavits — that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation." Anderson v. Rochester-Genesee Reg'l Transp. Auth., 388 F. Supp. 2d 159, 167 (W.D.N.Y 2005) (quoting Blum, 465 U.S. at 895-896 n. 11).
The court's inquiry on the issue of reasonable hourly rates may "include judicial notice of the rates awarded in prior cases and the court's own familiarity with the rates prevailing in the district" and should include "an evaluation of evidence proffered by the parties." Farbotko v. Clinton Cnty. of New York, 433 F.3d 204, 209 (2d Cir. 2005). See also Williams v. Beemiller, Inc., 2010 WL 891001, *3 (W.D.N.Y. 2010) (court may rely on its own knowledge of prevailing rates to decide "what is reasonable in the relevant community") (internal quotation omitted). The relevant community is the district in which the case is litigated. Lochren v. Cnty. of Suffolk, 344 F. App'x 706, 708 (2d Cir. 2009); Arbor Hill, 522 F.3d at 191.
In this case, plaintiff's fee application encompasses work performed by three attorneys. Two of them, Michael Mule and Peter Dellinger, were associated with the Empire Justice Center ("EJC"), a not-for-profit legal services firm. The third, Bradley Kammholz, is a founding partner of a small private firm specializing in personal injury litigation. Plaintiff seeks reimbursement of her attorneys' fees at an hourly rate of $195 for Mule and $250 for both Dellinger and Kammholz. Defendant urges the Court to reduce the rates to $135 for Mule and $225 for Dellinger, and to exclude reimbursement of any time expended by Kammholz.
A. Michael Mulé
Mulé graduated from Albany Law School in 2005 and was admitted to practice in New York in 2006, the same year that plaintiff filed her suit. (Docket # 49 at ¶ 5). Mulé began his legal practice as EJC's Hanna S. Cohn Equal Justice Fellow, litigating civil rights and disability cases. (Id.). Following his fellowship, he continued his association with EJC, developing expertise in disability rights litigation for Deaf and hard of hearing persons. (Id.). In that capacity, he has provided various trainings on the requirements of the ADA, consulted with governmental officials on language access issues and written various articles and guides on these issues. (Docket # 56 at ¶ 13).
As further support for plaintiff's request that Mulé's time be reimbursed at an hourly rate of $195, she has submitted an affidavit of David L. Cook, Esq., an experienced and well-respected attorney with the private firm, Nixon Peabody, LLP. (Docket # 58). Cook opines that the $195 rate is "well below the marketplace rate" charged by associates at his firm with similar experience and years of practice. (Id. at ¶ 14). Specifically, he notes that in 2008 Nixon Peabody charged an hourly rate of $225 for work performed by a fourth-year associate who, like Mulé, was a former Hanna S. Cohen Fellow with experience in disability discrimination litigation. (Id. at ¶ 13).
Defendant maintains that the requested rate of $195 per hour is excessive considering Mule's lack of experience at the time he began representing plaintiff in 2006. (Docket # 52 at 13). Well-settled authority counsels against a reduction on that basis, however. See, e.g., Lochren v. Cnty. of Suffolk, 344 F. App'x at 709 (to account for the delay in payment of attorneys' fees, which sometimes may last for several years after the services were provided, courts should use "current rather than historic hourly rates") (quoting Reiter v. MTA New York City Transit Auth., 457 F.3d 224, 232 (2d Cir. 2006)); LeBlanc-Sternberg v. Fletcher, 143 F.3d at 764 ("current rates, rather than historical rates, should be applied in order to compensate for the delay in payment").
Chief Judge Skretny recently surveyed fee awards in this district and concluded that a rate of $150 per hour was "an appropriate rate" for billing by associates with comparable years of practice to Mulé's. Williams v. Beemiller, Inc., 2010 WL 891001 at *4 n. 4. In Williams, the court reduced to $150 the hourly rates requested for several associates with similar experience, finding that "a rate of $200 for attorneys of that level of experience is excessive in this [d]istrict." Id. at *4. The court's finding was based upon an extensive review of recent awards by courts in this district, including those in Rochester, which revealed that hourly rates in the range of $125 to $175 were "reflective of current market rates in [the] community" for work performed by associate-level attorneys. Id.; see also Disabled Patriots of Am., Inc. v. Niagara Group Hotels, LLC, 688 F. Supp. 2d 216, 225 (W.D.N.Y. 2010) (collecting cases); Anderson v. Rochester-Genesee Reg'l Transp. Auth., 388 F. Supp. 2d at 171 (awarding fees to EJC attorneys in disability discrimination case at rates ranging from $150 to $250).
I find that a rate of $165 per hour, rather than $150, is appropriate for work performed by Mulé considering his expertise in language access issues. EJC's Chief Counsel, Bryan Hetherington, has affirmed that Mulé has developed into "one of the leading experts in both the state and nation on issues involving the language access rights of beneficiaries of government programs." (Docket # 56 at ¶ 12). This expertise, which bears on the legal and factual issues at the heart of plaintiff's case, justifies a modest increase in the hourly rate that is commonly utilized for associates of similar years' experience. See Blum, 465 U.S. at 898 ("the special skill and experience of counsel should be reflected in the reasonableness of the hourly rates").
In making this determination, I acknowledge that the $165 rate may be less than the rate that EJC has used in recent cases to negotiate settlements of attorneys' fees with private parties. (See Docket # 56 at ¶ 17). I do not believe, however, that an opposing party's willingness to negotiate a settlement of attorneys' fees at a particular rate constitutes compelling evidence of what a paying client would be willing to pay at the inception of the representation. After all, many factors enter into a party's decision to settle a litigation, only one of which is consideration of the requested hourly rates of the opposing party's attorneys. B. Peter Dellinger
Indeed, a settlement often involves payment by the defendant of a lump sum in full satisfaction of the plaintiff's claims and attorneys' fees. That sum usually represents a compromise of the amount that the party might have been able to recover had the case been litigated to conclusion. Viewed that way, a party's willingness to pay that sum does not necessarily reflect agreement with the reasonableness of the hourly rates identified by the plaintiff.
Peter Dellinger is a skilled litigator with nearly thirty years of experience. (Docket # 59 at ¶¶ 4-5). For the substantial majority of that period, Dellinger has represented individuals in civil rights, employment and consumer cases, many of them in federal court. (Id. at ¶¶ 9-18). As a senior staff attorney with EJC, Dellinger's principal role in this case was to supervise Mulé's work. That he played such a limited role is supported by the relatively few hours he logged (60.21) (id. at ¶ 22), compared with those logged by Mulé (373.91). (Docket # 54 at 10).
In their affidavits, Cook and Hetherington both opine that Dellinger's requested rate of $250 is below the market rate. (Docket # 58 at ¶ 5; # 56 at ¶ 6). Cook notes that the rate is less than the $275 rate that he recommended as the reasonable hourly rate for Dellinger's services in a 2008 fee application filed in another case in this district. (Docket # 58 at ¶ 5). Hetherington notes that the requested $250 rate has been used by other judges in this district to reimburse senior EJC attorneys with comparable experience to Dellinger's. (Docket # 56 at ¶¶ 5-6).
Based upon Dellinger's skill and experience, the requested hourly rate of $250 is reasonable, appropriate and in line with awards to attorneys of comparable skill and experience. See, e.g., Anderson, 388 F. Supp. 2d at 171 (setting rates between $175 and $250 for senior attorneys with EJC); Catanzano v. Doar, 378 F. Supp. 2d 309, 314 (W.D.N.Y. 2005). See also Williams, 2010 WL 891001 at *4 (finding rate of $250 "appropriate" for attorney with over 30 years of federal litigation experience); Klimbach v. Spherion Corp., 467 F. Supp. 2d 323, 331-32 (W.D.N.Y. 2006) (finding rate of $250 reasonable for private firm partners). Cf. New York Life Ins. Co. v. Hassan, 2010 WL 3070091, *3 (W.D.N.Y. 2010) ("the highest hourly rate that this [d]istrict currently awards for partners is $240"); Disabled Patriots of Am., Inc. v. Niagara Group Hotels, LLC, 688 F. Supp. 2d at 225 ("this Court is unaware of any decision issued [after 2006] in any substantive area in which fees of more than $240 per hour were awarded").
Defendant urges this Court to set Dellinger's hourly rate at $225 as Judge Larimer did in 2005 in the Anderson case. (Docket # 52 at 15). I believe that the rate that a paying client would pay an attorney of Dellinger's skill and experience in 2009, when the pending motion was filed, is $250 per hour — the same rate at which awards have been made to other senior EJC attorneys with comparable experience to Dellinger's. (See Docket # 56 at ¶ 5).
C. Bradley Kammholz
Bradley Kammholz is a well-respected personal injury attorney with nearly twenty years' experience, whose practice includes federal court litigation. (Docket # 57 at ¶ 6). Plaintiff requests that the reasonable hourly rate for his services be set at $250.
Kammholz was retained by plaintiff in this action in order to provide expertise on the calculation of damages. (Id. at ¶ 7). He also defended plaintiff's deposition and deposed several of defendant's employees, as well as supervised Mulé's preparation for the remaining depositions. (Id. at ¶ 8).
Defendant does not specifically challenge the rate requested by Kammholz as excessive. Rather, defendant maintains that no payment should be awarded for any hours expended by Kammholz because plaintiff has not demonstrated "why the services of a personal injury attorney were required in this ADA case that did not involve personal injuries." (Docket # 52 at 16).
I am satisfied that the damages issues presented in this case — namely, how to quantify the damages arising from the denial of language access devices to an individual participating in a short-term residential program for persons with mental health issues — were sufficiently unusual to justify retaining an attorney with specialized knowledge in emotional injury damages. In other words, I conclude that a paying client "may well have retained [Kammholz] as co-counsel to draw on [his] experience" and expertise. Simmonds v. New York City Dep't of Corr., 2008 WL 4303474 at *6. See also Anderson, 388 F. Supp. 2d at 164 ("the use of multiple attorneys is not per se unreasonable"); Williamsburg Fair Hous. Comm. v. Ross-Rodney Hous. Corp., 599 F. Supp. 509, 518 (S.D.N.Y. 1984) (same). Of course, when such a collaborative relationship is created among attorneys, their billing records must be scrutinized for any resulting inefficiencies — an undertaking that is summarized in the following section. Simmonds, 2008 WL 4303474 at *6. I further find on the record before me that $250 per hour is a reasonable and appropriate hourly rate for an attorney of Kammholz's experience, skill and reputation.
III. Reasonableness of Hours Expended
Applications for attorneys' fees should be accompanied by sufficient information to enable the reviewing court to audit the hours and determine whether they were reasonably expended. Disabled Patriots, 688 F. Supp. 2d at 226; Anderson, 388 F. Supp. 2d at 166. That information generally includes, as it does here, contemporaneously-created time records specifying "for each attorney, the date, the hours expended, and the nature of the work done." Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998) (citing Hensley v. Eckerhart, 461 U.S. at 437 n. 12). Individual entries that include only vague and generic descriptions of the work performed do not provide an adequate basis upon which to evaluate the reasonableness of the time spent. Disabled Patriots, 688 F. Supp. 2d at 226-27 (citing cases); Anderson, 388 F. Supp. 2d at 166-67 (citing cases).
In addition to reviewing the entries, the court must inquire whether the party exercised "billing judgment" in arriving at the total number of hours requested. Hensley, 461 U.S. at 434 ("[i]n the private sector, billing judgment is an important component in fee setting[;] [i]t is no less important here") (quoting Copeland v. Marshall, 641 F.2d 880, 891 (D.C. Cir. 1980)). See also Disabled Patriots, 688 F. Supp. 2d at 226; Anderson, 388 F. Supp. 2d at 166-67. If the attorney did not properly exercise billing judgment, then the court must reduce the hours to exclude those that were "excessive, redundant, or otherwise unnecessary." Hensley, 461 U.S. at 434. One way to accomplish that reduction is to evaluate the reasonableness of each individual time entry and to make reductions and exclusions as necessary. See, e.g., Pasternak v. Baines, 2008 WL 2019812, *7 (W.D.N.Y. 2008); Rich Prods. Corp. v. Impress Indus., 2008 WL 203020, *3 (W.D.N.Y. 2008). Another "practical means of trimming the fat" is to apply a reasonable percentage reduction to the total number of hours requested. Kirsch v. Fleet St., Ltd., 148 F.3d at 173 (internal quotation omitted). See, e.g., Simmonds, 2008 WL 4303474 at *8 (applying 40% reduction); Rozell v. Ross-Holst, 576 F. Supp. 2d 527, 541 (S.D.N.Y. 2008) (applying 15% reduction); Moreno v. Empire City Subway Co., 2008 WL 793605, *6 (S.D.N.Y. 2008) (applying 15% reduction); Anderson, 388 F. Supp. 2d at 167 (applying 20% reduction); Elliott v. Bd. of Educ. of Rochester City Sch. Dist., 295 F. Supp. 2d 282, 286 (W.D.N.Y. 2003) (applying 10% reduction); Auscape Int'l v. Nat'l Geographic Soc'y, 2003 WL 21976400, *5 (S.D.N.Y. 2003) (applying 20% reduction); Sabatini v. Corning-Painted Post Area Sch. Dist., 190 F. Supp. 2d 509, 522 (W.D.N.Y. 2001) (applying 15% reduction). A. Counsel's Exercise of Billing Judgment
Based upon my extensive review of plaintiff's attorneys' billing records (see Docket # 49, Ex. B), I find that the entries generally provide an adequate description of the nature of the work performed by each attorney on a given day. I also credit Mulé's representation that counsel has exercised billing judgment to reduce the hours for which plaintiff seeks reimbursement. Specifically, Mulé has affirmed that before submitting the time records to this Court, he excluded any entries for time that he spent conferring about the case with colleagues other than Dellinger and Kammholz, as well as for time that legal interns or paralegals spent working on the case. (Docket # 49 at ¶¶ 9-10). The extent of these reductions, however, is not apparent from the record before the Court.
One such entry is still reflected in the records (a meeting between Mulé and Hetherington for .42 hours on May 19, 2009), which presumably should have been excluded.
B. Unrelated and Vague Entries
Despite the general sufficiency of the time records, a modest number of entries are too vague to be properly evaluated, and others reflect work that is apparently unrelated to this case. Entries that are impermissibly vague include the following:
Date Attorney Activity Description 11/22/06 Mulée Edit Revise [None Provided] 6/19/09 Dellinger Misc. Re: Status of Case 1/30/06 Mulée Prepare For Fax 9/11/06 Mulée Prepare For Discovery 3/26/09 Mulée Review Documents Court Approval 7/20/09 Mulée Review Documents Notice of Appearance These entries total 3.91 hours spent by Mulé and 1 hour spent by Dellinger. Entries that appear to be unrelated to the instant case include six entries made by Mulé for telephone calls occurring in 2006 on August 2, August 17, September 1 (3 calls) and September 12. These apparently unrelated entries total 2.17 hours spent by Mulé.
C. Excessive and Redundant Hours
Of more significant concern to this Court than the small number of unrelated and vague entries, are the greater number of entries for work that appears excessive and redundant. These hours fall within two broad, but related categories: excessive time spent on certain tasks and time spent by multiple attorneys performing duplicative work.
At oral argument, plaintiff's counsel conceded that two entries for duplicative work totaling one hour should be excluded (see entries for 2/26/07 and 12/1/08).
Turning first to the issue of excessive time spent on discrete projects, I begin with an examination of the hours spent preparing the lawsuit. The records reflect that more than eighty hours were expended between November 2005 and May 15, 2006 (the date that the complaint was filed), investigating, researching and filing the complaint. Of course, some of that time was necessarily and properly spent on pre-suit due diligence and legal research. Some of it was appropriately spent on careful drafting and revision of the complaint, which is indeed an exemplary, concise and well-drafted pleading. That said, I still find that the more than eighty hours devoted to pre-filing work — which included no negotiations or contact with defendant's attorneys — is unreasonably high.
I also find that the total number of hours spent by plaintiff's attorneys on deposition-related tasks — approximately ninety-five hours — is inordinately high. While seven depositions of defendant's employees were conducted by plaintiff's counsel, they occurred over the course of only two days. The plaintiff's deposition took slightly more than seven hours spread over two days. In sum, the total number of hours spent by the attorney responsible for conducting and defending the depositions was 21.25 hours. Much of the remaining deposition-related time involved hours spent by multiple attorneys on the same task. For example, two of plaintiff's attorneys attended each of the eight depositions and both charged their time (see entries for 5/27/08, 5/28/08, 6/10/08, 6/16/08), and all three attorneys were involved at various times in the preparation for those depositions, leading to invariable, but unnecessary inefficiencies. See Simmonds, 2008 WL 4303474 at *6 (co-counseling arrangement resulted in both firms' involvement in all aspects of the litigation and the expenditure of excessive hours). In addition, some of the duplication of effort apparently resulted from the need to train and supervise Mulé, a relatively inexperienced litigator, in connection with the depositions he conducted. That such training is crucial does not mean that a paying client, rather than the firm itself, should be expected to absorb the costs of that training. See Rozell v. Ross-Holst, 576 F. Supp. 2d at 539-40 (training costs are "customarily incorporated in a firm's overhead" and should be excluded from the time records). To the extent that counsel chose to have two attorneys attend the depositions for reasons other than to train Mulé, the justification for doing so is not evident from the record or from this Court's familiarity with the case. See Sabatini v. Corning-Painted Post Area Sch. Dist., 190 F. Supp. 2d at 521 ("[w]hile plaintiffs or their attorneys might have preferred to have both [attorneys] in court that day, that does not mean that it was reasonably necessary that they both attend, and presumably either one of them could have argued the motion alone") (emphasis in original).
Approximately eight hours were spent by Mulé "digesting" deposition transcripts, a task more commonly delegated to legal assistants, whose hourly rates are lower than attorneys' rates. Thus, absent any information as to the need for Mulé to perform that task, the associated fee appears inflated.
In a similar vein, the time records reflect time allocated by multiple attorneys to attendance at court conferences. As the docket sheet reflects and this Court recalls, all three of plaintiff's attorneys generally attended all conferences (with one exception on December 4, 2008). While the time records do not include entries by each of the attorneys for all of these appearances, they do include entries for all three on October 24, 2007 and April 29, 2008 and entries for two of them on September 6, 2006, December 14, 2007 and December 4, 2008. Had Mulé alone attended those conferences, his time would amount to $825. Had either Dellinger or Kammholz attended these conferences alone, his time would amount to $1,312.50. Taken together, however, the time charged by all three (calculated using the reasonable hourly rates determined in the previous section) totals $2,700. This is excessive. See Simmonds, 2008 WL 4303474 at *6 ("the district court must account for duplicative or repetitive work to ensure that the . . . fees represent only work that was necessary to the litigation and a cost efficient use of co-counsel and outside counsel") (internal quotation omitted).
In my judgment, the inclusion of approximately 77 hours for "meeting" time is also unreasonably high. Of that time, the overwhelming majority, or approximately 50 hours, reflects meetings between and among Mulé, Kammholz and Dellinger. About 30 of those hours were devoted to meetings among the three of them, while the remaining hours were logged for meetings between either Mulé and Kammholz, or Mulé and Dellinger. An additional seven hours is attributed to email and telephonic communications between Mulé, Kammholz and Dellinger. Although attorneys working on the same case must confer with one another from time to time to discuss case developments and strategy and to allocate tasks, I believe that a paying client would likely object to a bill reflecting more than one full week of internal attorney conferences and communications. See, e.g., Simmonds, 2008 WL 4303474 at *7 (finding across-the-board reduction "necessary to correct for the inefficiencies resulting from the co-counsel arrangement" and noting that plaintiff's attorneys spent approximately 60 of a total of 552 hours corresponding with one another and discussing the case internally); Rozell, 576 F. Supp. 2d at 541, 543 (finding excessive 363 hours spent on conferences between plaintiffs' counsel when measured against total hours claimed of 3,896); See also Anderson, 388 F. Supp. 2d at 165 ("[d]ivision of labor is supposed to make work more efficient, not less").
Finally, defendant objects to the amount of time reflected for two tasks in particular — the drafting of plaintiff's summary judgment motion and the depositions of the defense witnesses. (Docket # 52 at 17). As to the latter, defendant maintains that plaintiff deposed an excessive number of witnesses. Although I agree that the amount of time spent by all three attorneys on deposition-related tasks was excessive (as explained above), I disagree that time should be disallowed on the grounds that plaintiff deposed more witnesses than was reasonable. Plaintiff took seven depositions over the course of only two days. No showing has been made that any of the witnesses lacked relevant knowledge, and plaintiff's counsel has affirmed that plaintiff relied on their testimony in her summary judgment motion. (Docket # 55 at ¶ 27). Considering those circumstances, as well as the fact that the depositions were taken in accordance with this Court's discovery deadlines (see Docket ## 19, 23), I do not find that time should be disallowed on the grounds that plaintiff conducted an excessive number of depositions.
Defendant's memorandum states that twelve depositions were conducted. (Id. at 17). That is wrong. Plaintiff deposed seven witnesses. (Docket # 55 at ¶¶ 29-30).
I also reject defendant's contention that the time spent on plaintiff's summary judgment motion should be excluded as unnecessarily incurred considering that the parties were only $4,000 apart in their settlement positions at the time of the motion. (Docket # 52 at 17). This argument is unpersuasive for two reasons. First, the summary judgment deadline was the day after the mediation (Docket # 32), and the Court was unwilling to extend it for a seventh time. Had plaintiff not filed her motion, she would have forfeited her right to seek summary judgment. Second, based upon my knowledge of the parties' positions during the mediation, I disagree with the assertion that the parties were only $4,000 apart. The principal difference in their positions was not how they valued plaintiff's legal claims, but the fact that the defendant was unwilling at that time to consider submitting the issue of attorneys' fees to the Court for determination. On that issue — the amount of attorneys' fees — the parties were unsurprisingly quite far apart.
In sum, to account for the excessive and redundant hours claimed, as well as the insufficiency and inaccuracy of a much smaller number of hours, this Court finds that the total hours requested should be reduced by twenty percent. The total fee awarded is set forth in Section E below.
D. Limited Success
Finally, defendant contends that a separate twenty percent reduction is appropriate to reflect what it characterizes as the plaintiff's limited success in this litigation. (Docket # 52 at 18-19). Specifically, defendant maintains that such a reduction is appropriate to account for the fact that the settlement agreement provides for monetary relief only, rather than monetary and injunctive relief as plaintiff had requested in her complaint. (Id. at 18). I disagree that any reduction is appropriate on this basis.
It is well-settled that the most critical factor in a court's determination of a reasonable fee is the "degree of success obtained" by the plaintiff. Farrar v. Hobby, 506 U.S. at 114; Hensley, 461 U.S. at 436. See also Barfield v. New York City Health and Hospitals Corp., 537 F.3d at 152. The Supreme Court has counseled that in assessing whether an adjustment should be made to reflect a plaintiff's partial or limited success, "two questions must be addressed":
First, did the plaintiff fail to prevail on claims that were unrelated to the claims on which he succeeded? Second, did the plaintiff achieve a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award?
Hensley, 461 U.S. at 434.
The focus of the reviewing court should be upon "the overall relief obtained by the plaintiff in relation to the hours reasonably
expended on the litigation."
Id. at 435.
Since Hensley, the Second Circuit has held that the doctrine of limited success "is not restricted . . . to cases of multiple discrete theories." Kassim, 415 F.3d at 256.
In this case, I easily conclude that counsel achieved an excellent result for plaintiff. See Hensley, 461 U.S. at 435 ("[w]here a plaintiff has obtained excellent results, [her] attorney should recover a fully compensatory fee"). While the amount that she was paid under the agreement may appear modest in comparison to some federal court settlements, it is not modest when compared to the twenty-one day period giving rise to her damage claim.
Moreover, I do not find that the time that plaintiff and her attorneys spent pursuing her related claim for injunctive claim was excessive and inappropriate. Plaintiff was authorized to seek injunctive relief under both the ADA and the Rehabilitation Act. Although defendant eventually contended that plaintiff lacked standing to seek injunctive relief because she was not a resident of RPC at the time of her lawsuit, I conclude that the merits of defendant's position are far from clear. Considering plaintiff's mental health history and her previous hospitalizations, plaintiff's argument that her claim falls within an exception to the mootness doctrine was certainly not frivolous. See Honig v. Doe, 484 U.S. 305, 323 (1988). For these reasons, I find that counsel's decision to pursue the demand for injunctive relief was not unreasonable.
These matters are not detailed in the written record before this Court, but were represented by counsel for plaintiff at oral argument of the pending motion.
In addition, I note that plaintiff's claim for injunctive relief was closely related to her claim for monetary relief. Both arose from the same common nucleus of facts — her September 2005 twenty-one stay in the RPC's Alternative Living Program. Indeed, a review of plaintiff's counsel's time records reveals very few that are readily-identifiable as relating to her claim for injunctive, rather than monetary, relief.
Finally, although the parties dispute whether this lawsuit occasioned the institutional changes that RPC made after the suit was filed, defendant's counsel certainly touted them as inducements for plaintiff to settle the litigation on monetary terms alone (see Docket # 69 (Defendant's Ex. 1)). Once the changes were disclosed to plaintiff, she evidently agreed that they were satisfactory because she promptly dropped the injunctive component from her settlement demand. The simple fact that the parties' settlement agreement did not include injunctive terms does not require a reduction in either the compensable number of hours or the presumptively reasonable fee. Hensley, 461 U.S. at 435 n. 11 ("a plaintiff who failed to recover damages but obtained injunctive relief, or vice versa, may recover a fee award based on all hours reasonably expended if the relief obtained justified that expenditure of attorney time") (emphasis added).
Where a plaintiff's sole claim for relief is injunctive, the defendant's voluntary adoption of the requested injunctive measures may moot the claim and deprive the plaintiff of the right to recover attorneys' fees. See Buckhannon Bd. Care Home, Inc. v. W. Va. Dep't of Health and Human Res., 532 U.S. at 609-10 (rejecting "catalyst theory" as permissible basis for award of attorneys' fees). This case is readily distinguishable from Buckhannon by virtue of the negotiated monetary payment that plaintiff recovered.
Considering the relationship between the presumptively reasonable fee in this case and the results achieved by plaintiff, I find that no reduction is warranted on the grounds of limited or partial success. Stated another way, I find that the relief that plaintiff obtained in this litigation — judged by both quantitative and qualitative norms, see Barfield, 537 F.3d at 152 — justified the hours spent by her attorneys (except as noted in the previous section).
E. Reasonable Fee
Applying the 20% reduction for excessive, vague, unrelated entries and adjusting Mulé's hourly rate to $165, this Court calculates the appropriate and reasonable fee award to be $75,885. That sum consists of fees in the amount of $49,335 for work performed by Mulé (299 hours × $165), $14,550 for work performed by Kammholz (58 hours × $250) and $12,000 for work performed by Dellinger (48 hours × $250).
IV. Determination of Costs
In addition to her attorneys' fees, plaintiff seeks to recover $3,891 in costs incurred for court reporting fees, interpretive services, printing and reproduction costs. (Docket # 49 at ¶ 12; # 54 at 10). Plaintiff's request appears reasonable and justified, and defendant does not contend otherwise. (See Docket # 52 at 19).
CONCLUSION
For the reasons discussed above, plaintiff's motion for attorneys' fees (Docket # 47) is GRANTED in PART and DENIED in PART. Plaintiff is awarded attorneys' fees in the amount of $75,885 and costs in the amount of $3,891. Defendant is directed to pay plaintiff the total amount of $79,776 within thirty (30) days of the date of this Decision and Order.
IT IS SO ORDERED.
Dated: Rochester, New York September 30, 2010