In re Burlington Northern, Inc. Employment Practices Litigation

810 F.2d 601, 45 Fair Empl. Prac. Cas. (BNA) 1705
CourtCourt of Appeals for the Seventh Circuit
DecidedOctober 2, 1986
DocketNos. 85-2898, 85-3087
StatusPublished
Cited by16 cases

This text of 810 F.2d 601 (In re Burlington Northern, Inc. Employment Practices Litigation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Burlington Northern, Inc. Employment Practices Litigation, 810 F.2d 601, 45 Fair Empl. Prac. Cas. (BNA) 1705 (7th Cir. 1986).

Opinion

FLAUM, Circuit Judge.

This appeal involves two issues left unresolved after the settlement of a multi-mil-lion-dollar Title VII race discrimination class action against the Burlington Northern railroad and its unions. The district court in Chicago certified the class, composed of black employees throughout the BN system, in 1978, and in 1979 the Judicial Panel on Multidistrict Litigation consolidated in Chicago all the Title VII race discrimination cases pending against BN in several districts. The district court appointed as lead counsel for plaintiffs the Minneapolis firm of Sprenger, Olson & Shutes and the Chicago firm of Davis, Miner, Barnhill & Galland. After years of preparation and discovery, the case was settled a few hours before trial was to begin on November 7, 1983. The settlement, as embodied in a consent decree, provided injunctive relief and created a fund of $10 million for back pay compensation, as well as providing that plaintiffs’ counsel would be paid reasonable fees. This fees provision is the basis for the two issues presented in this action: (1) what is a reasonable fee and (2) who among the defendants shares responsibility for paying the fees. The lead law firms appeal the district court’s refusal to award them anything above the “lodestar” figure, obtained by multiplying their reasonable hours by reasonable hourly rates, plus post-judgment interest. The unions appeal the district court’s order requiring them to contribute to BN’s payment of the lead counsel’s fees. We affirm both of the district court’s rulings, although we reverse a minor part of the district court’s order concerning the apportionment of the fees awarded.

I. FACTS.

A. The Consent Decree. The class action against BN involved claims of discrimination in hiring, discipline, discharge, assignment, and promotion, and the defendants mounted a vigorous defense to the case. Many of the plaintiffs’ discovery requests were opposed, see In Re Burlington Northern, Inc., 679 F.2d 762 (8th Cir. 1982), and plaintiffs’ lead counsel alone (there were additional counsel pursuing "tagalong” cases and representing the intervening EEOC) expended some 12,228 hours and 5,158 hours of paralegal time in prosecuting the action. The relief provided by the consent decree was extensive. In addition to the $10 million fund, which was to be paid out to claimants who could establish that they had been subjected to racial discrimination in hiring, promotion, or discharge, the decree bound Burlington Northern to a wide range of injunctive measures, including hiring and promotional requirements, references for discharged employees, seniority protection for promoted employees, and training programs.

The last provision of the consent decree provided the following:

Counsel for private plaintiffs and EEOC shall be paid their costs including experts’ fees, and including (except as to EEOC) reasonable attorneys’ fees, on all issues involved in this litigation, determined as follows. The parties shall meet and attempt to agree upon the amount of such fees and costs within fourteen days of the entry of the decree. Counsel for plaintiffs and EEOC will to the extent feasible identify the portion of their costs and fees chargeable to the scheduled transfer and promotion or craft seniority [604]*604issue. In the event the parties are unable to agree in whole or in part within an additional 30 days, any unresolved issues, including any issue as to the apportionment of those costs and fees among all defendants, shall be presented to the court for resolution upon petition of counsel for plaintiffs and EEOC. BN and the unions may litigate the amount of the costs and fees sought.
BN will not dispute the entitlement of counsel for private plaintiffs and EEOC to reasonable costs, including (except as to EEOC) reasonable attorney’s fees, as provided above, on any issue but may seek apportionment of those costs and fees among all defendants or contribution from the unions for an allocable portion of those costs and fees.
The defendant unions do not agree that private plaintiffs and EEOC are entitled to any costs and fees from them. The defendant unions may make whatever objections they deem appropriate to the private plaintiffs’ and EEOC’s petition as well as to any effort by BN to secure apportionment or contribution for an allocable portion of those costs and fees.

The decree was signed by counsel for plaintiffs, BN, the EEOC, and the unions on November 21, 1983 and was formally approved by the court on April 2, 1984.

B. The Attorneys Fees Action. The EEOC and “tagalong” counsel came to an agreement with BN and the unions whereby they would receive nearly $1 million in fees and costs. The two lead counsel were unable to settle with the defendants on the issue of fees, however, and filed petitions for fees and costs with the district court. The petitions documented some $1.1 million in advanced expenses, and the district court ordered BN to pay this sum “subject to its right to seek contribution from the union defendants.” As to fees, the lead counsel presented a “lodestar” figure of $2,184,-165.50, which represented 12,228.2 attorney hours and 5,157.8 paralegal hours multiplied by various hourly rates. Lead counsel sought interest on this figure from the date of the consent decree’s approval. Counsel further requested that the lodestar figure be subjected to a multiplier of 2.5 for the attorney fees, bringing the total fees requested to $4,981,145.00, plus interest. BN conceded that the hours expended were reasonable, but objected to the hourly rates requested by the lead counsel and to the use of a multiplier. BN further claimed that lead counsel were not entitled to interest on the fees from April 2, 1984, the date of the consent decree’s final approval. Finally, BN requested that the district court order the defendant unions to assume responsibility for some portion of the fees and costs.

The district court received briefing and affidavit testimony regarding these remaining disputes, and it issued an opinion on September 20, 1985. The district court found that the requested hourly rates were reasonable, given that “the object of a fee determination is to simulate the results which would be obtained if the lawyer involved were dealing with a paying client.” The district court noted that as to each lawyer involved, “there is evidence that the hourly rates requested have either been paid by clients or awarded to them by a court in the past,” and that “[t]he requested rates approximate, as close as these matters can, the prevailing ones paid to comparable attorneys in the relevant community.” The total lodestar fee of $2,184,-165.50 thus was awarded, along with interest from the date of the “order entered in accordance with this memorandum.” The district court concluded that interest should not be calculated from the date of the decree’s approval, since prejudgment interest was not merited and would be “grossly unfair” to BN.

The district court further declined to apply a multiplier to the lodestar figure. The lead counsel had argued that the exceptional success they achieved, and the extreme risk they undertook in representing the plaintiff class, merited upward adjustment of the fee award, and that multipliers are necessary in order to attract sufficient numbers of counsel to represent Title VII plaintiffs. The district court undertook a [605]

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Bluebook (online)
810 F.2d 601, 45 Fair Empl. Prac. Cas. (BNA) 1705, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-burlington-northern-inc-employment-practices-litigation-ca7-1986.