Category Archives: Attorney’s Fee Awards

Supreme Court of Virginia Provides Added Guidance on Attorney’s Fees Awards

The Supreme Court of Virginia released three decisions in recent months that provide added guidance on attorney’s fees awards.   While these are state court decisions, it is Virginia law, not federal law, that governs attorney’s fees awards on matters arising under Virginia law in the federal courts.  For example, attorney’s fees awarded by a federal court under the Virginia Business Conspiracy Act are governed by Virginia state law.  Also, fee awards by a federal court pursuant to a Virginia contract claim where the contract includes an attorney’s fees provision are governed by Virginia state law.

We have posted multiple times on attorney’s fees awards in the Eastern District.  For example, D. Mauler, New Trends in Attorney’s Fees Declarations? (November 15, 2016); D. Mauler and J. Kurz,  E.D. Va. Whacks Attorneys’ Fees Claim: Further Split on Court Revealed (September 30, 2016); D. Mauler, Recent Opinion Highlights Differing View in EDVa on Appropriate Hourly Rates (September 22, 2015).   While there are obvious overlaps in the consideration of attorney’s fees under federal precedents as opposed to Virginia law, separate consideration of recent developments at the Supreme Court of Virginia merits attention.

The Prevailing Standard for Attorney’s Fees Awards Under Virginia Law

As the starting point, the party claiming legal fees must plead a claim for the award of fees.  in Graham v. Community Management Corp., Record No. 161066 (Oct. 12, 2017), the Supreme Court confirmed that Rule 3:25 requires in most matters pleading the claim for fees (the few exceptions are covered in subpart A of the Rule).  In Graham, the prevailing defendant had not requested attorney’s fees in any pleading, including her pleas in bar, demurrers and answer.  After the defense verdict, she returned with a claim for fees based on the employment contract that was the basis for the plaintiff’s original claim.  The Fairfax Circuit Court held that the claim was waived when not pled, and the Supreme Court, applying the “express language of Rule 3:25(C),” affirmed.

A party seeking an award of fees then has the burden of proving a prima facie case that the fees were reasonable and necessary.  A party may not recover fees for duplicative work or for work that was performed on unsuccessful claims.  In determining whether the prima facie case is established, the factfinder may consider some or all of the seven factors identified in Chawla v. BurgerBusters, Inc., 255 Va. 616 (1998):

In determining whether a party has established a prima facie case of reasonableness, a fact finder may consider, inter alia, (1) the time and effort expended by the attorney, (2) the nature of the services rendered, (3) the complexity of the services, (4) the value of the services to the client, (5) the results obtained, (6) whether the fees incurred were consistent with those generally charged for similar services, and (7) whether the services were necessary and appropriate.

Chawla involved an attorney’s fees provision in a commercial lease.  Both parties sought fees.  A threshold issue was where the initial burden of proof fell – on either the party seeking fees must or the defending party to prove the fees were unreasonable.  Relying on Seyfarth Shaw v. Lake Fairfax Seven Ltd. Partnership, 253 Vas. 93 (1997), the Supreme Court held that “the party claiming legal fees has the burden of proving prima facie that the fees are reasonable and were necessary.”

Lambert v. Sea Oats Condominium Association, Inc.

In an April 2017 decision, Lambert v. Sea Oats Condominium, 293 Va. 245 (2017), the Plaintiff sought recovery of $500 from her condominium association after she paid to repair an exterior door.  Ms. Lambert lost in the general district court but prevailed when she took the case to the circuit court.   In pursuit of her claims, she spent more than $9,500 in attorney’s fees to win $500.   She claimed recovery of her attorney’s fees pursuant to the statutory provision in Va. Code § 55-79.53.  The circuit court awarded only $375 reasoning that the fee award should be proportional to the damages.

The Supreme Court rejected the circuit court’s analysis.  Courts may consider the amount of damages a plaintiff recovers, and they do so within the scope of the “results obtained” factor.   The Court directed, however, “that merely applying a ratio between the damages actually awarded and damages originally sought will not satisfy the reasonableness inquiry.”  The issue is “the necessary costs of effectively litigating a claim.”  The Court determined that the circuit court abused its discretion by failing to consider all the relevant factors, and it remanded the case back to the circuit court, directing the trial court to include “an award of the cost of the amount of reasonable attorney’s fees incurred at trial and in this appeal.”

Justice Mims, the author of the Sea Oats opinion, uses his footnotes to provide broader guidance on attorney’s fees. For example, in footnote 1 he observes that attorney’s fees may be decided by a jury, and he suggests that the review of a jury verdict on fees should not be any different than the typical appellate review of determinations of punitive damages, physical pain, suffering or mental anguish.  Citing a 1959 decision, the Court observed that jury decisions are not disturbed “unless it appears that [they were] influenced by partiality, prejudice, corruption of the jury, or some mistaken view of the evidence.”  The footnote stops short, however, of providing a definitive statement of the standard of review applicable to a jury decision on attorney’s fees because, as the opinion observes, there was no jury award at issue in the Sea Oats case.

In his footnote 7, Justice Mims discusses the use of experts in the proof of the reasonableness of attorney’s fees.  While there is no per se requirement of an expert, the footnote instructs that proving that the requested fees are reasonable “may require supplying an expert who was undertaken a detailed evaluation of its attorneys billing records to testify about what amount is reasonable.” The opinion adds that “the likelihood that such testimony is necessary will often be proportional to the complexity of the case.”

A final point from Sea Oats addresses the pleading requirements when the plaintiff is seeking attorney’s fees. The condominium association argued that because Ms. Lambert had not identified in her complaint the amount of fees she sought she should later be precluded from claiming any fees.  The Supreme Court rejected the argument instructing that “the party who may be entitled to an award of attorney’s fees is merely required to notify the opposing party that it will seek them if it prevails, as required by Rule 3:25(B).”

Denton v. Browntown Valley Associates, Inc.

In Denton v. Browntown Valley Associates, Record No. 160999 (Va. Aug. 31, 2017), a decision also authored by Justice Mims, the Supreme Court made clear that the fees incurred in litigating the reasonableness of the underlying attorney’s fees are themselves recoverable.  For example, if the fee claim is for $50,000, and the proponent must spend $20,000 to prove the reasonableness of the fees, the total of $70,000 is recoverable.  The opinion explains, “The attorney’s fees that the prevailing party incurs while litigating the issue of attorney’s fees are no different from those it incurs while litigating any other issue on which it prevails.”

At the beginning of the discussion about attorney’s fees, the Denton opinion cites both Chawla and Sea Oats for the identification of the “seven nonexclusive factors for courts to consider when weighing the reasonableness of an award of attorney’s fees.”   Relying on Sea Oats, the Denton opinion repeats the principle that fees necessary to prove the reasonableness of the underlying attorney’s fees are recoverable applies to the fees incurred on appeal as well.

Summary

With Sea Oats, Denton, and Graham, the Supreme Court of Virginia is rounding out its discussion of attorney’s fees awards.  The Seyfarth Shaw and Chawla opinions summarized the law to 1998, and provided us with the 7-factor analysis.  Subsequent decisions, now capped with the three recent opinions, confirm the test for reasonableness, explain further necessary fees, comment on the need for a fees expert, and clarify the pleading requirements.   Denton adds that fees-to-prove-fees are recoverable, and that this extends to fees on appeal.

Despite this, the Court’s attorney’s fees mosaic is not yet fully complete.  Justice Mims provided some guidance on the review of jury verdicts on attorney’s fees and on the desirability, but not the necessity, of expert testimony to assist a jury.  But the Sea Oats opinion stops short of explicit instructions because there was no jury verdict at issue in that case.  The more complete mosaic may have to wait until the Supreme Court has before it the review of a jury verdict on attorney’s fees.

Supreme Court of Virginia Addresses the Reach of Conspirator Liability under the Virginia Business Conspiracy Act

The Supreme Court of Virginia recently addressed conspirator civil liability under the Virginia Business Conspiracy Act, Va. Code §§ 18.2-499 and -500.  Borrowing from Illinois law, the Court recited that “[t]he function of the conspiracy claim is to extend liability in tort beyond the active wrongdoers to those who have merely planned, assisted or encouraged the wrongdoer’s acts.”   While the case does not really change the substance of Virginia law, the opinion in Gelber v. Glock offers language that will likely appear in every future Virginia brief on conspirator liability and in the conspiracy jury instructions.

Tucked into the back of a 39-page opinion dealing with a family feud over an estate, the Supreme Court provides its tutorial on conspirator liability.   Admittedly, this is not federal law, but VBCA claims often appear in E.D. Va. litigation when state claims are before the federal court under diversity jurisdiction or pendent jurisdiction.

The Family Feud Case

The case is Gelber v. Glock, Record No. 160500 (June 22, 2017), a decision from an appeal heard during the Supreme Court of Virginia’s February 2017 Session.  The facts are those of the classic family feud.  In an early will, Mrs. Gelber left her estate to be divided among her five children.  Subsequent estate documents seemingly altered this directive—Mrs. Gelber’s real and personal property was to go to just one of her daughters.  The Executors sued on multiple theories, including a claim that the lucky daughter was part of a civil conspiracy with one of her sisters and a brother-in-law.

The Circuit Court for Henrico County granted a Motion to Strike the conspiracy claim.   The Supreme Court found no error in this circuit court ruling.  Given this straightforward appellate finding, the Supreme Court perhaps likely could have addressed the conspiracy Assignment of Error in a single paragraph.  But the Justices chose to give us a powerful tutorial on conspirator liability under the VBCA.  The tutorial is perhaps dicta, but it is nonetheless part of the Supreme Court opinion.

The Language of the Virginia Business Conspiracy Act

The VBCA is a two-part statute found in Title 18 of the Virginia Code, the criminal law title.  Va. Code § 18.2-499 identifies the elements of the criminal conspiracy. The next section, Va. Code § 18.2-500, provides for civil remedies for conspiracy violations.  Subpart A of the section reads:

Any person who shall be injured in his reputation, trade, business or profession by reason of a violation of § 18.2-499, may sue therefor and recover three-fold the damages by him sustained, and the costs of suit, including a reasonable fee to plaintiff’s counsel, and without limiting the generality of the term, “damages” shall include loss of profits.

The Reach and Purpose of Civil Conspiracy Liability

The real punch from the Gelber decision is the confirmation of conspirator liability beyond the primary tortfeasor.  The decision explains, “the object of a civil conspiracy claim is to spread liability to persons other than the primary tortfeasor.”  Gelber at 37.  The Court expands its discussion in footnote 21.  Quoting from Beck v. Prupis, 162 F. 3rd 1090, 1099 n. 18 (11th Cir. 1998), aff’d, 529 U.S. 494 (2000), the Gelber Court adds that “[i]n a civil context … the purpose of the conspiracy claim is to impute liability– to make X jointly liable with D for what D did to P.”   This is language is straight from Prosser and Keeton on Torts § 46 (5th Ed. 1984).

The Gelber opinion continues, in the same footnote 21, “[t]hus, a civil conspiracy plaintiff must prove that someone in the conspiracy committed a tortious act that proximately caused his injury; the plaintiff can then hold other members of the conspiracy liable for that injury.”  In support of this statement, the Supreme Court cites authority not only from the 11th Circuit, but also from the 8th Circuit, and from the Utah federal court and the Illinois Supreme Court.

The cited Eighth Circuit decision, Simpson v. Weeks, 570 F.2d 240, 242-43 (8th Cir. 1978), provides a clever analogy, “[t]he charge of conspiracy in a civil action is merely the string whereby the plaintiff seeks to tie together those who, acting in concert, may be held responsible for any overt act or acts.”   The Utah federal court decision, Boisjoly v. Morton Thiokol, Inc., 707 F. Supp. 795, 803 (D. Utah 1988), explains that “[c]ivil conspiracy is essentially a tool allowing a plaintiff injured by the tort of one party to join and recover from a third party who conspired with the tortfeasor to bring about the tortious act.”

Finally, Gelber confirms that conspiracy liability is the same for low-level players as it is for conspiracy kingpins.  The cited Supreme Court of Illinois decision, Adcock v. Brakegate, Ltd., 645 N.E.2d 888, 894 (Ill. 1994), offers, “[t]he function of the conspiracy claim is to extend liability in tort beyond the active wrongdoers to those who have merely planned, assisted or encouraged the wrongdoer’s acts.”

Summary: Gelber and VBCA Conspirator Liability

The Supreme Court of Virginia ranges far and wide for its authority on conspirator civil liability perhaps because a clear statement of civil liability tied to a conspiracy claim was previously missing from the Virginia case law.  For instance, plaintiffs looking for authority for conspirator civil liability have frequently cited Carter v. Commonwealth, 232 Va. 122 (1986), a criminal case about vicarious liability for the use on a firearm in a felony.  This is not to say that Virginia law was any different before Gelber, but that it was challenging to find on-target Virginia citations supporting conspirator civil liability.

Expect that the Gelber language will be prominent in trial briefs and jury instructions for future VBCA claims in the state courts and in the federal courts.

New Trend in Attorney’s Fees Declarations?

As the judges of the Eastern District continue to differ regarding reasonable hourly rates for attorneys, practitioners need to be aware of a potential new trend regarding declarations supporting or opposing petitions for attorney’s fees.  Unfortunately, that new trend appears likely to make such petitions more detailed and time-consuming – and therefore, more expensive.

Traditionally, declarations supporting a petition for attorney’s fees in the Eastern District have followed a familiar pattern: An outside attorney reviews the hourly rates charged, the number of hours charged, the docket sheet, and selected motions/briefs.  The resulting opinions were usually based upon a “general” review of or familiarity with the litigation.  These reviews were not usually “deep dives” into the documents, pleadings, or billing records for a good, simple reason:  keeping costs down.

This custom may need to change, based upon the recent case of Salim v. Dahlberg, 1:15-cv-468 LMB / IDD, 2016 WL 2930943 (E.D. Va. May 18, 2016), which was covered by the EDVA Update here.  In that case, Judge Leonie M. Brinkema of the Alexandria Division was faced with a petition for attorney’s fees after the plaintiff prevailed on part of his civil rights claim.  The petition was supported by declarations from six leading attorneys, all whom have extensive experience in the Eastern District.  As Judge Brinkema said in her opinion, all six were “well-known to and well-respected by the Court,” and all “summarily conclude[d] that the hourly rates charged and hours worked were reasonable.”

In opposition, the defendant submitted one declaration by attorney Wayne G. Travell, a partner with Hirschler Fleischer’s Tysons office.  Despite the lop-sided number of supporting declarations, Judge Brinkema rejected much of the plaintiff’s fee petition (along with the conclusions in the six supporting declarations) and essentially adopted much of the opinion and analysis expressed by Mr. Travell.

Mr. Travell’s declaration is extensive, at 18 pages long with 47 paragraphs.  He discusses in detail the steps he took to form his opinion (including documenting the telephone calls he had with the respective counsel).  He recounts the applicable law, and then provides a detailed recitation of the facts (citing and quoting from the pleadings in the case).  The heart of his declaration, however, appears to be nearly eight pages of detailed examination of the plaintiff attorney’s time records, including identifying alleged instances of double-billing, block-billing, and vague entries.

In her opinion, Judge Brinkema sided with Mr. Travell’s declaration because he “actually reviewed counsels’ billing records, provide[d] a detailed analysis of those records, discusse[d] the specific issues involved in the case, and evaluate[d] the work performed with respect to those issues.”  In contrast (according to the court’s opinion), the six supporting declarations were unpersuasive because none went into a “detailed analysis of plaintiff’s counsels’ time sheets; instead, the declarants base their conclusions almost exclusively on a review of the pleadings and of [plaintiff counsel’s] declaration.”

Mr. Travell’s declaration is another example of judicial pushback in the Eastern District against excessive attorney hourly rates (or, at least hourly rates perceived as excessive by the bench).  But it also likely signals that some judges will more closely scrutinize petitions for attorney’s fees, including attorney declarations that support and oppose those petitions.  For this reason, Mr. Travell’s declaration is likely a roadmap for future petitions in the Alexandria Division, if not throughout the Eastern District.  And the irony is straight-forward:  While the intent may be to hold down hourly rates, the added expense of more detail in such declarations will ultimately increase the cost of litigation overall.  But regardless of this impact, practitioners need to be aware of this possibility.

Is there a New Cap on Recoverable Attorney Rates in EDVA?

There is yet further disagreement among the judges of the Eastern District regarding reasonable attorney hourly rates.  As we noted in a previous EDVA Update here, this disagreement is manifesting itself most frequently in the Alexandria Division, as judges there confront (and push back against) the higher hourly rates frequently charged by larger law firms in the Northern Virginia/ DC metro area.

Today’s example of the disagreement comes in the recent case of Integrated Direct Marketing, LLC v. Drew May, et al., 1:14-cv-1183, 2016 WL 3582065 (E.D. Va. June 28, 2016).  In this case, Judge Leonie M. Brinkema of the Alexandria Division of the Eastern District invited a plaintiff to file a motions for sanctions and attorney’s fees after successfully demonstrating that the defendant made materially false statements in both an affidavit and during courtroom testimony.  But after the plaintiff petitioned for over $63,000 in attorney’s fees, Judge Brinkema strongly criticized the hourly rates and record keeping of plaintiff’s counsel, and she cut the fee award down to only $17,000.

To justify their hourly rates, plaintiff (represented by attorneys from both the DC and Connecticut offices of Ogletree, Deakins, Nash, Smoak & Stewart, PC) relied upon the matrix of hourly rates approved by Judge Gerald Bruce Lee in Vienna Metro (discussed in a prior EDVA Update here).  But Judge Brinkema rejected the Vienna Metro matrix.  By doing so, she sided with Judge T.S. Ellis’s opinion in Route Triple Seven (also discussed in a prior EDVA Update here) in the ongoing dispute regarding hourly attorney rates.  Below is a summary of the experience levels of each attorney, the hourly rates sought by the plaintiff, and the rates awarded by Judge Brinkema:

Attorney’s Legal Experience

Requested Hourly Rate

Awarded Hourly Rate

30 years $ 545 $ 450
9 years $ 395 $ 350
6 years $ 335 $ 275
5 years $ 320 $ 250

To set these hourly rates, the court followed the rates determined by Judge Ellis in Route Triple Seven.  Significantly, Judge Brinkema did not rely upon any other expert witness testimony or evidence to set these hourly rates.  (And, as we saw in the Route Triple Seven case, there the court relied upon its own “experience” to determine an appropriate reasonable rate.)  These hourly rates are in sharp contrast to the $550 – $600 hourly rates approved by Judge Lee in Vienna Metro.

It is clear that a revolt against high hourly rates (or, at least, rates perceived as high) is brewing among many judges of the Alexandria Division of the Eastern District.  It also appears that a hard cap of approximately $450 – $500 for an experienced attorney’s hourly rate is forming, at least in the eyes of several judges who have rejected the Vienna Metro matrix.

Further Disagreement on the EDVA Bench over Attorney Rates

Multiple recent decisions from the Eastern District show a widening disagreement among the judges regarding “reasonable” hourly rates for attorneys.  This disagreement is manifesting itself most notably among the judges of the Alexandria Division as they rule on attorney’s fees petitions that involve lawyers from firms based in both Virginia and downtown DC.  Rates acceptable to at least one judge have been rejected by other judges within same division.  The bottom-line for practitioners is that it is not sufficient to be familiar with the general precedent in the Eastern District when applying for attorney’s fees.  Rather, practitioners must know their individual judge’s history and preferences, while carefully crafting the petition for attorney’s fees.

$400,000 Attorney’s Fee Cut by 67%

In Salim v. Dahlberg, 1:15-cv-468 LMB / IDD, 2016 WL 2930943 (E.D. Va. May 18, 2016), Judge Leonie M. Brinkema wrote a 49-page (!) opinion on just the question of recoverable attorney’s fees.  There, she rejected both the Laffey Matrix and the Vienna Metro matrix to determine reasonable hourly attorney rates in Northern Virginia.  In the 49-page opinion, Judge Brinkema goes into great detail to analyze the hourly rates requested by the plaintiff, the billing records submitted by the plaintiff’s counsel, the six supporting affidavits submitted by plaintiff (including many leading local practitioners in Alexandria), and the defendant’s opposition (which included only a single opposing affidavit).  In the end, Judge Brinkema largely sided with the defendant and cut plaintiff’s fees down from $400,000 to a just over $151,000.

In the underlying case, the plaintiff alleged various federal and state civil rights claims against the defendant.  After a favorable jury verdict, the plaintiff petitioned for attorney’s fees under Virginia Code Ann. § 8.01-42.1.  Plaintiff was represented by the firm of Victor M. Glasberg & Associates, and sought hourly rates for the work of two attorneys:  $550/hour for lead counsel with 39 years of experience, and $250/hour for an associate attorney with less than one year of experience.

Plaintiff’s counsel must have expected a fight to recover fees because they submitted six affidavits of leading local lawyers.  While Judge Brinkema noted that these six local lawyers were “well-known and well-respected by the Court,” none of the affidavits swayed the judge.  Instead, it was the defendant’s opposition and single affidavit submitted by Attorney Wayne G. Travell that carried the day.  Judge Brinkema objected that the plaintiff’s six affidavits were “conclusory” in nature and omitted detailed discussion of the plaintiff’s billing rates and records.

Vienna Metro and Laffey Matrices Rejected

Judge Brinkema rejected the Vienna Metro matrix, characterizing it as applying only to “complex civil litigation.”  Instead, her opinion relied primarily upon Judge T.S. Elliss’s opinion in Route Triple Seven (discussed in a prior EDVA Update here) which characterized a rate of $420 as the “upper limit for what counts as a reasonable rate for a very competent attorney in an uncomplicated . . . dispute.”  Further, Judge Brinkema also rejected the Laffey Matrix of DC-based attorney hourly rates published by the U.S. Department of Justice.  According to Judge Brinkema, DC-based hourly rates are not properly comparable for litigation in the Alexandria federal court.

While the defendant’s expert did not challenge the $550/hour rate sought by plaintiff’s lead counsel, Judge Brinkema cut it down anyway to $500/hour, and then reduced the recoverable hours by half.  Turning to fees requested for plaintiff’s junior counsel, Judge Brinkema cut the hourly rate down from $250 to $125 on the grounds that the newly-minted attorney had not yet been admitted to the Virginia Bar (having just recently graduated from law school).  Because of this, Judge Brinkema characterized the young attorney’s contribution as more akin to a law clerk, and she applied the lower hourly rated recommended by the defendant’s expert.

Conclusion

Judge Brinkema appears to be speaking to the bar in this 49-page opinion, which provides a roadmap for future petitions for attorney’s fees.  As the disagreement over hourly rates among the judges of the Eastern District grows, it is critical for practitioners to understand where each judge comes down on this issue.  This opinion is required reading for any practitioner who expects to submit an attorney’s fee petition to Judge Brinkema in the future.

E.D. Va. Whacks Attorneys’ Fees Claim: Further Split on Court Revealed

Star Scientific, Inc. is back in the legal news, but this it has nothing to do with Jonnie Williams and the McDonnell trial (Star Scientific, Inc. did not disappear, but instead changed its name to Rock Creek Pharmaceuticals).  In August 2016, Judge Anthony Trenga ruled on Plaintiffs’ Motion for an Award of Attorneys’ Fees in In re Star Scientific, Inc. Derivative Litigation, Case No. 1:13-cv-0550 (AJT/JFA).  Plaintiffs’ counsel asserted that their fees exceeded $1.6 million, but petitioned for $975,000.  Judge Trenga, however, awarded only $488,062.

The ruling is significant not because of the outcome as to total fees awarded, but because of two points:  (1) Judge Trenga’s clear analysis applying McAfee v. Boczar, 728 F.3 81, 88 (4th Cir. 2013), and (2) his finding that reasonable attorney’s fees in this district are $400/hour for partners, $200/hour for associates, and $100/hour for paralegals.  These rates are far below the rates approved multiple times by this Court under the Vienna Metro matrix standard, and they represent further divide among the judges of the Eastern District regarding reasonable hourly rates.

Derivative Action Claims

In re Star Scientific involved several derivative actions filed in both state and federal courts on behalf of the shareholders of Star Scientific, Inc.  The primary claims in the litigation were that the Board of Directors breached their fiduciary duties and also violated section 14 (A) of the Securities Exchange Act. The combined cases arrived in Judge Trenga’s court.  The claims eventually settled, and part of the settlement agreement was that plaintiffs’ lead counsel would apply to the Court for award of fees and expenses with respect to both the federal and state actions.

The Court approved the settlement in accord with Fed. R. Civ. P. 23.1 and took the Fee Application under advisement.  Judge Trenga then directed the parties to mediate the issue of fees before Magistrate Judge Anderson, but that mediation was unsuccessful.

Analytical Framework

The district court applied the three–step procedure for determining the proper award of attorney’s fees in the Fourth Circuit as set forth in McAfee v. Boczar.  Under McAfee, a court first determines the lodestar figure by multiplying the number of reasonable hours expended times a reasonable rate. To ascertain reasonable hours and rates under this analysis, a court applies the 12 factors set forth in Johnson v. Georgia Highway Express Inc., 480 F.2d  714, 717-19 (5th Cir. 1974).   The second step is to subtract fees for time spent on unsuccessful claims unrelated to the successful ones.   And third, the Court then awards some percentage of the remaining amount depending upon the degree of success enjoyed by the plaintiff.

Reasonable rates

In In re Star Scientific, plaintiffs’ counsel submitted hourly attorney rates ranging from $775/hour down to $275/hour.  Using the time records and applying these rates, the total fees added up to $1,672,000.  On their own, counsel slashed this sum down to $975,000.  Judge Trenga then determined that the reasonable rates in the Eastern District are $400/hour for partners, $200/hour for associates, and $100/hour for paralegals.  Applying these rates to the claimed hours yields a total of $976,125.

Billable hours – Total Work and 50% Reduction

The District Court seemed frustrated by the lack of specificity in the billing records: “[T]he Court is unable to assess with any accuracy the number of hours reasonably and effectively devoted to legal work.”  The court opted for a 50% reduction in the hours claimed, which resulted in a total fee award of $488,062 (half of the $976,125).  This 50% figure appears to be a combination of the court’s frustration with the billing records but also recognition of the results obtained in the nature of the litigation.

Star Scientific Rates versus Vienna Metro Rates

In June 2014, we posted on this Blog about the Vienna Metro matrix.  In the Vienna Metro v. Pulte Home Corp., Case No. 1:10-cv–0052, Judge Lee approved attorneys’ fees ranging from $250/hour to $820/hour.  In his award, Judge Lee applied a 50% across-the-board reduction to the plaintiff’s fees recovery because the plaintiff prevailed on only one of several counts in the complaint.  In the Blog post, we observed that “Judge Lee make clear that the reduction was due to limited success in the litigation and not due to the hourly rates charged by counsel.”

Now in In re Star Scientific, Judge Trenga is clear about his overall 50% reduction in the fee award, but he is also extremely clear as to what are reasonable hourly rates.  The judge could reached the same overall result using other avenues, but he chose to employ a simple fee matrix that seemingly is not tied closely to the facts of the case but instead has broad application.

The differences between the two cases as to what are reasonable hourly rates in the Eastern District are huge — the Vienna Metro rates are roughly double the rates recognized in In re Star Scientific.  After Vienna Metro and its progeny, it seems that several judges on the Eastern District are uncomfortable with the approval of comparatively high hourly rates.  Judge Trenga’s decision in In re Star Scientific will no doubt be frequently cited in future disputes over what are reasonable rates in this district.

Recent Opinion Highlights Differing Views in EDVA on Appropriate Hourly Rates

In a recent decision, Judge T.S. Ellis, III, of the Eastern District of Virginia issued a comprehensive and useful primer on applying for attorney’s fees after successful litigation of a contract claim. While this decision provides useful guidance to practitioners, it also illustrates a significant disagreement among the judges of the Eastern District regarding appropriate hourly fee rates for attorneys in Northern Virginia. This blog post is the second on this case (and the first can be found here.)

In Route Triple Seven Ltd. Partnership v. Total Hockey, Inc., No. 1:14-cv-30, 2015 WL 5123302 (E.D. Va. Aug. 28, 2015), the landlord of a strip mall in Loudoun County brought suit against a tenant corporation that sold hockey equipment in a retail store, claiming breach of the lease. Judge Ellis granted summary judgment for the defendant on the landlord’s breach of lease claims, and the tenant filed a post-summary judgment petition for attorney’s fees.

By half-way into Judge Ellis’s opinion, the tenant may have felt pretty good about its attorney’s fees claim. That likely ended, however, when the judge focused on the amount of fees claimed by the tenant. The tenant initially claimed nearly $225,000, while the landlord argued that $112,000 was the proper figure.

Judge Ellis began with the traditional “lodestar” set of factors to examine the reasonableness of claimed attorney’s fees, which is essentially the “reasonable hourly rate” multiplied by the “hours reasonably expended.” While simple on its face, those factors provide wide discretion to a court, and Judge Ellis took full advantage of that discretion. The tenant had two law firms and six attorneys on its defense team, and the tenant submitted the following hourly rates to the court (the third column reflects the rates actually allowed by Judge Ellis):

Table Graphic for Route Triple Seven Case

The tenant’s expert witness on attorney’s fees opined that the submitted hourly rates were reasonable, and the expert relied upon a previous EDVA decision, Vienna Metro LLC v. Pulte Home Corp., 786 F.Supp.2d 1090 (E.D. Va. 2011), which approved similar hourly rates for Northern Virginia attorneys. Judge Ellis, however, distinguished the rates in Vienna Metro LLC, stating that it “involved complex commercial real estate litigation, not a straightforward lease dispute.” The judge also critiqued the submitted rates, stating that the tenant failed to explain why the McGuireWoods partner’s higher rate was justified when he had fewer years of experience than the Armstrong Teasdale partner with a lower rate.

Moreover, this case is a further example of Judge Ellis’s disagreement with the higher hourly rates outlined in Vienna Metro LLC. (See here for a previous blog post about an earlier decision denying higher hourly fee rates.) According to Judge Ellis, the expert witness’s declaration,

does not override this Court’s long and extensive experience in this district. Many capable and experienced attorneys and paralegals litigate breach of contract cases like this case at rates lower than the rates submitted by [the tenant]. At bottom, the Vienna Metro Matrix is a glove that does not fit here. It describes a type of litigation significantly more complex than presented in this case.

Finally, Judge Ellis turned to the time-entry task descriptions submitted by the tenant. The judge complimented the tenant’s attorneys for exercising billing discretion and removing a number of time entries from the fee petition. But Judge Ellis then went on to criticize some of the entries for “two common flaws: (1) lumping and (2) vague task descriptions.”

Regarding “lumping” of entries, Judge Ellis described this as “grouping, or lumping, several tasks together under a single entry, without specifying the amount of time spent on each particular task.” (internal quotation marks omitted). The judge cited the following time entries as examples of improper “lumping”:

  • “Draft notice of appearance; review changes to answer and counterclaim with D. Greensnap; multiple telephone calls with co-counsel; revise answer and counterclaim; prepare answer, counterclaim, Rule 7.1 disclosure, and notice of appearance for filing (2.1)”
  • “Review Route Triple Seven’s Responses to Total Hockey’s first set of interrogatories and first request for the production of documents to Total Hockey; calculate deadlines for objections and responses and calendar deadlines; review deficiency letter; correspond with co-counsel (1.7)”
  • “5.20 Continue analysis of record and appellant’s brief; conference with L. Bentele re preparation of Total Hockey brief; review cases cited in appellant’s brief.”

Turning to the “vague task descriptions,” Judge Ellis cited the following examples:

  • Numerous entries that describe a task as “revise discovery”
  • “brief call with M. Reh”
  • “research issues involving discovery”
  • “review law concerning issues in the case”
  • “continue analysis of legal file”

Due to the perceived lumping and vague task descriptions, Judge Ellis applied a 15% reduction to the tenant’s fee award. After calculating the allowed hourly rates for each attorney, Judge Ellis awarded the tenant $150,527.35 in attorney’s fees, down from the $224,428.00 originally requested by the tenant.

There is apparent disagreement among the judges of the Eastern District regarding appropriate hourly fee rates in Northern Virginia, as illustrated in this and other cases. While the Vienna Metro Matrix did not fare well in this opinion or in another recent decision by Judge Ellis (see here), the matrix was approved by Judge Gerald Bruce Lee in a 2014 case (see here). The Route Triple Seven opinion has multiple reminders for the careful practitioner, not only a reminder on how to properly describe one’s time entries, but also the importance of understanding the past opinions of each judge in the Eastern District.

EDVA Allows Recovery of Attorney’s Fees under a Contract Despite No Request in Pleadings

Judge T.S. Ellis, III, recently issued a useful primer on how to collect attorney’s fees per a contractual provision after successful litigation. Judge Ellis addressed a number of issues that often frustrate successful litigants attempting to mitigate the high cost of prevailing in court, and this guidance is a useful road map to federal practitioners.

In Route Triple Seven Ltd. Partnership v. Total Hockey, Inc., No. 1:14-cv-30, 2015 WL 5123302 (E.D. Va. Aug. 28, 2015), the landlord of a strip mall in Loudoun County brought suit for breach of a lease against a tenant corporation that sold hockey equipment in a retail store. The tenant counterclaimed for failure by the landlord to provide certain tenant improvement allowances. Judge Ellis granted summary judgment for the defendant on the landlord’s breach of lease claims, which constituted the most substantial claims in the litigation, and at the same time, granted summary judgment to the plaintiff on the tenant’s single counterclaim.

The lease between the parties had a provision that granted attorney’s fees to the “substantially prevailing party” in any suit brought to enforce the lease, and after the summary judgment rulings, the tenant filed a petition for attorney’s fees.

Judge Ellis first grappled with the question of whether the tenant could even claim attorney’s fees in the litigation because it had never expressly demanded attorney’s fees in its pleadings. The landlord argued that, under Fed. R. Civ. P. 9(g), any item of special damages must be specifically pled. The landlord then turned to Atlantic Purchasers, Inc. v. Aircraft Sales, Inc., 705 F.2d 712, 716 n. 4 (4th Cir. 1983), which held that a claim for attorney’s fees is a claim for special damages and triggers Rule 9(g). Thus, since the tenant never demanded attorney’s fees in its pleadings, the landlord argued, the tenant was out of luck.

Judge Ellis rejected this argument, holding that the tenant was still entitled to attorney’s fees even though it never claimed the fees in any pleading. Judge Ellis ruled that because the attorney’s fees claim was based upon a contract provision (as opposed to a statutory provision), the fees were not “special damages” that trigger Rule 9(g). Judge Ellis distinguished Atlantic Purchasers, Inc. by noting that in that case, the Fourth Circuit examined attorney’s fees that were awarded pursuant to a statute and not a contract. This was enough of a difference. As Judge Ellis said, “Put differently, attorney’s fees are special damages to which Rule 9(g) applies only when the substantive law requires that the prevailing party prove attorney’s fees as an element of damages; Rule 9(g) does not apply where, as here, attorney’s fees are sought as a recoverable cost pursuant to a contract.” (emphasis in original).

Judge Ellis allowed the attorney’s fees to be claimed as a recoverable cost under Fed. R. Civ. P. 54(d)(2)(A), which allows a successful litigant to make a motion for attorney’s fees. Judge Ellis was not moved by the landlord’s protestation that it was never on notice of the tenant’s claim, saying that the landlord was already on notice: “[W]hen attorney’s fees are sought as recoverable costs at the conclusion of a dispute pursuant to a contractual provision between the parties, notice by way of pleading is unnecessary because, as here, the contract itself provides notice.”

Judge Ellis also included a lengthy paragraph that focused on Fed. R. Civ. P. 54(c), which states that “every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings.” The judge said that allowing attorney’s fees in this case “comports” with the purpose of Rule 54(c), and the rule appears to be an alternate justification for the result in Judge Ellis’s opinion.

Judge Ellis next turned to the issue of whether the tenant qualified as the “substantially prevailing party.” Here, this seemed an easy decision for the judge, who first examined precedent from the Supreme Court of Virginia and then noted “that a substantially prevailing party need not succeed on every claim raised, but rather need only achieve significant success on a majority of issues in dispute.” Judge Ellis then went on to discuss the scorecard for the litigation:

Here, defendant is a substantially prevailing party because it won summary judgment on all three of plaintiffs breach-of-contract claims . . . These rulings . . . were the bulk of the matters in dispute. Although plaintiff won summary judgment on defendant’s counterclaim, this counterclaim was limited to one relatively small issue. Thus, there can be little doubt that defendant was awarded summary judgment on the vast majority of the significant issues in dispute.

Apparently having some fun with his opinion, Judge Ellis concluded, “[t]his result comports with the common sense intuition that a substantially prevailing party need not be a completely prevailing party. Indeed, to say the defendant did not substantially prevail in this dispute is to deny that the San Francisco Giants won the 2014 World Series because they won only four of the seven games.”

The useful guidance for federal practitioners does not end there in Judge Ellis’s opinion. In a subsequent blog post, we will examine the hourly rates approved by the judge, the judge’s criticism of the attorneys’ time entries, and what practitioners can learn from this opinion.

Latest EDVA Guidance on Reasonable Attorney Fees

Judge T.S. Ellis, III, of the Alexandria Division of the U.S. District Court for the Eastern District of Virginia has issued the latest guidance regarding reasonable attorney-fee rates in Northern Virginia.  In Am. Bird Conservancy v. U.S. Fish & Wildlife Serv., No. 1:13-cv-723, 2015 WL 3622459 (E.D. Va. June 9, 2015), Judge Ellis partially granted a plaintiff’s request for attorney fees in a FOIA action against the U.S. Fish and Wildlife Service.  While this statutory provision allowing the recovery of attorney’s fees is unique to FOIA, the process that Judge Ellis used to determine a fee award applies to a wide range of litigation involving other fee-shifting provisions, including civil and bankruptcy cases.

In this case, the plaintiff sued the U.S. Fish & Wildlife Service after waiting two years for an answer to the plaintiff’s appeal of a FOIA officer’s withholding of certain documents.  The plaintiff initially asserted claims to numerous withheld documents.  During discovery, the plaintiff’s claims were winnowed down as certain exemptions were either dropped by the Service or upheld by the Court.  At summary judgment, Judge Ellis ordered the Service to produce ten documents.

In his attorney-fee analysis, Judge Ellis first addressed a question common to civil attorney-fee cases:  Should the fee award be limited solely to those claims that were successful?  Or alternatively, should the fee award be based on the overall relief plaintiff obtained without regard to a parsing of successful claims versus unsuccessful claims?  Relying on Abshire v. Walls, 830 F.2d 127 (4th Cir. 1987), Judge Ellis adopted the latter approach and examined the overall relief recovered by the plaintiff, stating that it was clear “that plaintiff’s attorney’s fee petition must be considered in view of the overall relief plaintiff obtained in connection with the hours plaintiff reasonably expended” in the present litigation.

Judge Ellis noted that to do otherwise would ignore the realities of litigation:  “[A] FOIA plaintiff cannot know at the outset which documents are subject to exemptions and which are not and thus, the normal FOIA litigation process requires the plaintiff to request a broad swath of material, which will then be winnowed until the agency has released all nonexempt records.”

After the partially favorable ruling on summary judgment, the plaintiff filed a petition seeking $122,240 in attorney’s fees.  The plaintiff’s lead counsel, Eric Glitzenstein, a partner in a Washington, DC-based firm, sought an hourly rate of $510.  Virginia-based attorney Tammy Belinsky served as local counsel for the plaintiff at an hourly rate of $360.  Additionally, an associate attorney and a paralegal were billed at hourly rates of $250 and $145, respectively.

Judge Ellis took issue with the $510 hourly rate for plaintiff’s lead counsel.  The lead counsel defended the rate using the “Laffey Matrix” (a schedule of market rates in the Washington, DC area prepared by the Civil Division of the U.S. Attorney’s Office for the District of Columbia).  Judge Ellis rejected the use of the Laffey Matrix, stating that it “has little, if any, applicability in determining the prevailing market rates of attorneys in Northern Virginia.”  Judge Ellis also rejected an affidavit from Stephen L. Braga, a current law professor at the University of Virginia and an attorney with an office in Northern Virginia, who testified that the $510 hourly rate was reasonable in the Alexandria, Virginia market.  Calling this affidavit conclusory, Judge Ellis said the affidavit did not “override this Court’s long and extensive experience in this district that many capable and experienced attorneys litigate FOIA cases at rates far less than” $510 per hour.  Instead, Judge Ellis stated that “courts in this district have generally recognized rates of up to $420 per hour for partners and $250 to $300 per hour for associates” in FOIA cases.  Judge Ellis then cut the requested hourly rate from $510 to $400 for plaintiff’s lead counsel but approved the requested hourly rates of $360 for the local counsel, $250 for the associate, and $145 for the paralegal.

Once reasonable hourly rates were determine, the next step in Judge Ellis’s lodestar analysis was to determine the appropriate number of billed hours.  At the outset, Judge Ellis noted approvingly that plaintiff’s counsel had exercised some billing discretion and had proactively removed 55.3 hours of time from the requested fee amount.  This action seems to have garnered appreciation and some sympathy from the judge, who noted that “[o]n balance, the plaintiff’s submitted time entries are reasonable, although there are a number of time entries that contain vague task descriptions.”  Judge Ellis cut 10.5 hours from the fee award that, in his opinion, were not sufficiently described in the contemporaneous billing records:

  • 3.58 hours spent to “[d]raft letter to opposing counsel re Vaughn index” and “review borderline documents”
  • 1.17 hours spent to “review E.D. Va. case law”
  • 5.75 hours spent on “[a]dditional research on FOIA cases (govt failure to meet burden) and compile list of relevant quotations”

Judge Ellis stated that these were examples of “vague task descriptions that prevent a reliable determination of whether the hours expended on these tasks were reasonable,” and denied recovery for these hours.  The judge also cited the plaintiff for “lumping” several tasks together under a “single entry without adequately documenting the time spent on each task.”  As an example of impermissible “lumping,” Judge Ellis pointed to this entry:  “Revise motion for production of release of records and Vaughn index and send to clients; email local counsel re filing.”  To correct for this lumping, Judge Ellis performed an across-the-board reduction of plaintiff’s claimed hours by 5%.

Significantly, Judge Ellis awarded fees for time spent by plaintiff’s counsel to prepare the fee petition.  Quoting Am. Canoe Ass’n, Inc. v. U.S. E.P.A., 138 F.Supp.2d 722, 746 (E.D. Va. 2001), Judge Ellis stated that it is “well-settled that reasonable time and expenses preparing a fee petition are compensable” in an attorney’s fee award.

After these adjustments, Judge Ellis awarded the plaintiff $103,491.60 in attorney’s fees, a reduction of less than $20,000 off the amount initially claimed by the plaintiff.  Because attorney’s fee awards are routinely subjected to across-the-board reductions from the initial amount claimed, often by more than 5%, the plaintiff here did reasonably well – especially considering that time spent preparing the fee petition was also recoverable.

While this case focused on the FOIA statute, the analytical process that Judge Ellis used to determine an appropriate attorney fee award is applicable to other cases, including civil and bankruptcy cases.  This case offers the latest thinking by Judge Ellis on claims for attorney fees, along with a useful and detailed road map to successfully claiming such fees.

Court Gives Guidance on Reasonable Attorney Rates in Northern Virginia

Litigators in the Alexandria Division of the Eastern District of Virginia have often faced a dilemma when seeking attorney’s fees after successful litigation:  What is a reasonable hourly rate to charge for this area?  The $800 per hour and higher rates charged by large law firms in downtown Washington, DC, are generally thought to be inappropriate for Northern Virginia practice, while the hourly rates of Richmond, Virginia, are generally too low to compensate a client who has prevailed in the Alexandria Division.

In a recent decision, Judge Gerald Bruce Lee provided important and useful guidance to practitioners in the Alexandria Division.  In Taylor v. Republic Services, Inc., No. 1:12-cv-00523, Judge Lee issued a comprehensive opinion and order (available here) which granted a successful plaintiff over $500,000 in attorney’s fees.  While the facts of the case focused on employment discrimination, Judge Lee’s guidance is useful for any attorney who appears frequently in the Alexandria Division of the Eastern District.

Judge Lee began his analysis by determining “lodestar” figures and examined the twelve factors set forth in Johns v. Ga. Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974).  He then examined the hourly rates charged by the multiple attorneys who worked on the plaintiff’s case.  Each attorney’s hourly rate varied by the number of years the attorney had been in practice.

Attorney Fees Requested

Importantly, Judge Lee found these hourly rates to be reasonable and acceptable for practice in Northern Virginia.  Thus, it appears that he focused on the number of years of experience of each attorney to justify a particular billing rate.  This provides important guidance to practitioners in the area.

Judge Lee briefly discussed the affidavits submitted in support of the reasonableness of the rates but did not linger there.  Instead, he moved on to discuss a table of rates developed by a prominent local attorney that had been adopted by the Court in two previous cases, Vienna Metro v. Pulte Home Corp., Case No. 1:10-cv-00502, and Tech Systems, Inc. v. Pyles, Case No. 1:12-cv-0034.  Referred to as the Vienna Metro Matrix, the table consisted of the following rates:

Screenshot 2 (3)

Judge Lee referenced the Laffey Matrix of Washington-Baltimore area attorney rates that is periodically published by the U.S. Attorney’s Office for the District of Columbia, and then essentially rejected the Laffey Matrix in favor of the Vienna Metro Matrix.  The Laffey Matrix was “neither sufficient to show the reasonableness of an hourly rate nor [is it] controlling in this Court.”

Judge Lee’s analysis did not stop there, and while he found the hourly rates charged by the plaintiff’s attorneys to be reasonable, he ultimately applied a 50% across-the-board reduction to the plaintiff’s attorney fee recovery due to the plaintiff prevailing on only one of seven counts in the Complaint.  Despite the reduction, Judge Lee made clear that the reduction was due to limited success in the litigation and not due to the hourly rates charged by counsel.

Judge Lee’s opinion in Taylor is the third time that the so-called Vienna Metro Matrix has been adopted by the Alexandria Division of the Eastern District.  It is important reading for federal practitioners who face a dispute over attorney’s fees in litigation.