ATTORNEY'S FEES AND COSTS; PLAINTIFF AS A PREVAILING PARTY WHERE HE ACCEPTED A RULE 68 OFFER OF JUDGMENT
In Grissom v. The Mills Corp., No. 07-1777 (4th Cir. Dec. 3, 2008), the Defendant had made a Rule 68 offer of judgment prior to trial, which the Plaintiff accepted. The offer of judgment specifically did not cover any attorney fees and costs. The same day that judgment was entered in favor of the Plaintiff based on the Rule 68 offer, the Plaintiff filed a petition for an award of attorney fees and costs with respect to the SOX whistleblower aspect of his claim. The district court awarded fees and costs totaling over $325,000, after making as 25% reduction. On appeal, the Defendant argued that the Plaintiff was not entitled to any attorneys' fees and costs because he was not a prevailing party under SOX's fee-shifting provision, 18 U.S.C. § 1514A(c)(1).
The court first found that although the SOX provision did not use the legal term of art "prevailing party," its reference to entitlement to fees and costs for "[a]n employee prevailing" made applicable the "prevailing party" jurisprudence. The court then looked to Supreme Court authority to evaluate whether the Plaintiff was a prevailing party with respect to his SOX whistleblower claim, and found that he was. The Rule 68 judgment "created a material alteration of the legal relationship between Plaintiff and Defendant by imposing upon Defendant a legally enforceable obligation to pay Plaintiff $130,000.00." Slip op. at 9 (citation omitted). Moreover, there was judicial imprimatur on this change in relationship because the district court had the power to compel satisfaction of the judgment.
The Defendant also made alternative arguments that the $130,000 judgment was de minimis in comparison of the Plaintiff's far higher pretrial settlement demands, and that the district court should not have awarded any fees because the Plaintiff had misappropriated company documents in anticipation of litigation. The court, however, found no abuse of discretion by the district court in deciding to award attorney's fees and costs to the Plaintiff as a prevailing party on the SOX whistleblower claim.
The court remanded, however, for the district court to recalculate the attorney fees award, finding that the Plaintiff's prevailing-hourly rate evidence had been inadequate, and that the Laffey Matrix had been insufficient to carry the Plaintiff's burden of proof. The court also found that the Defendant had raised sufficient questions about the reasonableness of the number of hours expended on the case to warrant further explanation by the district court.
ATTORNEY’S FEES; RATES BASED ON GEOGRAPHIC MARKET FOR LOCATION OF HEARING
In Hagman v. Washington Mutual Bank, Inc., 2005-SOX-73 (ALJ Dec. 19, 2006), the Complainant had retained a law firm from New York, although the case was ultimately heard in Southern California. The Complainant submitted a fee petition seeking hourly rates of $450 to $475 for the senior attorney, $300 to $325 for an associate attorney, and $75 for a paralegal. In support, counsel supplied rates for New York lawyers published in the New York Law Journal in December 2005, and the 2006 Altman Weil Survey of Law Firm Economics. The Respondent raised numerous objections. The ALJ observed that the relevant geographic market for purposes of determining the appropriate hourly rate for attorney’s fees is normally the locality of the hearing, although some specialized cases may be grounds for an exception. The ALJ, however, found no special circumstances in the instant SOX case, and found that Los Angeles was the relevant market, that based on the ALJ’s knowledge and experience with the California bar that the Complainant could have found qualified local attorneys, and that there was no evidence that the Complainant’s attorneys were “specialists” in SOX whistleblower cases. The ALJ acknowledged that the case before him involved novel and complex issues. The ALJ observed that no lawyer appearing before him had ever received more than $300 per hour in a litigated non-settlement context, and weighing all factors found the appropriate rates to be $350, $275 and $75 respectively.
ATTORNEY FEES; SETTING MARKET RATE; USE OF ALTMAN WEIL SURVEY; FACTORS WEIGHED
In Platone v. Atlantic Coast Airlines Holdings, Inc., 2003-SOX-27 (ALJ July 13, 2004), the Complainant's attorney did not present any evidence on the prevailing market rate for the type of complex litigation done before the ALJ other than to state what the attorney's own fees are for such work. The ALJ, therefore, consulted the 2004 Altman Weil Survey of Law Firm Economics for guidance. Taking into account that information, the lead attorney's experience, the complexity of the issues presented, and the excellent presentation at trial, the ALJ found that the hourly rates agreed to by the Complainant were well within the market rate and eminently reasonable. The ALJ took into account counsels' agreement to represent the Complainant at reduced rates to provide her with access to the legal system, but also found that the fee petition, which showed substantial time devoted to research and preparation for depositions, did not reflect an "expert" status in this particular practice area.
ATTORNEY'S FEES; PERCENTAGE REDUCTION WHERE BLOCK BILLING DID NOT PROVIDE AN ADEQUATE MEANS TO ACCESS REASONABLENESS OF TIME EXPENDED
In Platone v. Atlantic Coast Airlines Holdings, Inc., 2003-SOX-27 (ALJ July 13, 2004), the ALJ reduced the total hours billed by 15% where the Complainant's attorney used block billing that did not provide an adequate basis upon which to judge the reasonableness of all the time expended.
ATTORNEY'S FEES; USE OF MORE THAN ONE ATTORNEY
In Platone v. Atlantic Coast Airlines Holdings, Inc., 2003-SOX-27 (ALJ July 13, 2004), the Respondent argued that the fee petition should be disallowed where it did not indicate the distinct contribution of the Complainant's two attorneys, and where entries were allegedly duplicative and redundant. The ALJ, however, found that the petition reflected her own observations at trial -- that one attorney paid a lead role and the other a support role -- which is an efficient and cost-effective approach to litigation. The ALJ also noted that the Respondent had used two attorneys at depositions and at trial. Thus, with the exception of a few specific instances, the ALJ declined to disallow any time on the ground that the Complainant unnecessarily used the services of more than one attorney.
