08-4079-cv(L) Simmons v. N.Y. City Transit Authority
1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 4 August Term 2008 5 (Argued: April 8, 2009 Decided: August 3, 2009) 6 Docket No. 08-4079-cv(L) 7 8 ----------------------------------------------------x 9 10 ROSETTA SIMMONS, 11 12 Plaintiff-Appellee-Cross-Appellant, 13 14 - v. - 15 16 NEW YORK CITY TRANSIT AUTHORITY, 17 18 Defendant-Appellant-Cross-Appellee, 19 20 - and - 21 22 JOHN DOE # 1-3, 23 24 Defendants.* 25 26 -----------------------------------------------------x 27 28 B e f o r e : JACOBS, Chief Judge, WALKER, and LEVAL, Circuit 29 Judges.
30 Appeal by Defendant from a judgment entered in the United
31 States District Court for the Eastern District of New York
32 (Charles P. Sifton, Judge), granting Plaintiff’s request for
33 attorney’s fees based on the prevailing rates in the Southern, as
34 opposed to the Eastern, District of New York. On appeal, we
* 1 The official caption lists appellant as “New York Transit 2 Authority” and defendants as “John Doe #1-3, Defendant.” The 3 Clerk of the Court is respectfully directed to amend the official 4 caption to read “New York City Transit Authority” and “John Doe 5 #1-3, Defendants.”
-1- 1 VACATE the district court’s award of attorney’s fees insofar as
2 they were calculated based on the prevailing rates in the
3 Southern District of New York. The case is REMANDED for the
4 district court to enter a modified attorney’s fees award based on
5 the prevailing rates in the Eastern District of New York.
6 GREGORY ANTOLLINO, New York, 7 N.Y., for Plaintiff-Appellee- 8 Cross-Appellant. 9 10 STEVE S. EFRON, New York, 11 N.Y., for Defendant-Appellant- 12 Cross-Appellee.
13 JOHN M. WALKER, JR., Circuit Judge:
14 Once again we are called upon to clarify the boundaries of
15 the attorney’s fees award. We recently delineated those
16 boundaries in Arbor Hill Concerned Citizens Neighborhood Ass’n v.
17 County of Albany, 493 F.3d 110 (2d Cir. 2007), amended on other
18 grounds by 522 F.3d 182 (2d Cir. 2008), in which we “abandon[ed]”
19 the “lodestar” approach to awarding attorney’s fees, and adopted
20 instead a “presumptively reasonable fee” calculation, whereby
21 district courts are advised “to bear in mind all of the case-
22 specific variables that we and other courts have identified as
23 relevant to the reasonableness of attorney’s fees in setting a
24 reasonable hourly rate,” id. at 117-18 (emphasis in original).
25 In this appeal by the New York City Transit Authority (the
26 “TA”) following a jury verdict in favor of Plaintiff Rosetta
27 Simmons (“Simmons”) on her disability discrimination claim, our
-2- 1 attention is on the parameters of one such “variable”: the
2 circumstances in which a district court may depart from the
3 traditional “forum rule,” under which district courts are
4 directed to calculate attorney’s fees based on the rates
5 prevalent in the forum in which the litigation was brought. The
6 district court, relying on Arbor Hill, awarded attorney’s fees to
7 Simmons based on the prevailing hourly rates in the Southern
8 District of New York (“Southern District”), where Simmons’
9 attorneys were based, even though the case was litigated in the
10 Eastern District of New York (“Eastern District”), where the
11 prevailing hourly rates are substantially lower.
12 We conclude that in order to receive an attorney’s fee award
13 based on higher out-of-district rates, a litigant must overcome a
14 presumption in favor of the forum rule, by persuasively
15 establishing that a reasonable client would have selected out-of-
16 district counsel because doing so would likely (not just
17 possibly) produce a substantially better net result. In this
18 case, Simmons has not overcome the presumption in favor of the
19 forum rule. We address the remaining issues on appeal separately
20 in a summary order filed concurrently with this opinion.
21 BACKGROUND
22 The facts relevant to the attorney’s fees claim are as
23 follows. Simmons, a TA train operator since 1988, filed the
24 instant complaint in February 2003 after she was removed from
-3- 1 train operator duty. She alleged that the TA had discriminated
2 against her on the basis of her disability in violation of the
3 Rehabilitation Act of 1973, 29 U.S.C. §§ 701-796l, the Americans
4 with Disabilities Act (“ADA”), 42 U.S.C. §§ 12101-12213, the New
5 York City Human Rights Law, N.Y. City Admin. Code §§ 8-101-1001,
6 and the New York State Human Rights Law, N.Y. Exec. L. §§ 290-
7 301, by failing to reasonably accommodate her impairment. After
8 extensive discovery, the district court denied the TA’s motion
9 for summary judgment. The first trial ended in a mistrial when
10 the jury failed to reach a verdict. After the mistrial, the
11 district court denied the TA’s post-trial and renewed summary
12 judgment motions. At the close of the second trial, the district
13 court reserved decision on the TA’s motion for a directed
14 verdict. On December 10, 2007, the jury returned a verdict for
15 Simmons and awarded her $150,000 in non-economic damages.
16 The hard-fought battle was not over. Although the parties
17 agreed to try issues of economic damages to the court and
18 stipulated to the calculation of back wages and pension credits,
19 the parties disputed whether Simmons was entitled to compensation
20 for “lost fringe benefit time.” In March 2008, the district
21 court found against Simmons on that issue. The TA then moved for
22 judgment as a matter of law in the underlying discrimination case
23 pursuant to Federal Rule of Civil Procedure 50, or in the
24 alternative, for a new trial pursuant to Federal Rule of Civil
-4- 1 Procedure 59, and the district court denied the TA’s motions in
2 their entirety.
3 Simmons then moved for attorney’s fees, as a prevailing
4 party under the ADA, 42 U.S.C. § 12205, the Rehabilitation Act,
5 29 U.S.C. § 794a(b), and the New York City Human Rights Law,
6 N.Y.C. Admin. Code § 8-502(f). She calculated her attorney’s
7 fees based on the hourly rates in the Southern District where her
8 attorneys were based, which, as the district court recognized,
9 “are higher than the hourly rates charged in the Eastern
10 District.” Simmons v. N.Y. City Transit Auth., No. CV-02-1575,
11 2008 WL 630060, at *2 (E.D.N.Y. March 5, 2008); see also Luciano
12 v. The Olsten Corp., 109 F.3d 111, 115 (2d Cir. 1997). The TA
13 challenged Simmons’ fees calculation, on the basis that, inter
14 alia, the correct hourly rates were those that prevailed in the
15 Eastern District, where the case was litigated.
16 The district court agreed with Simmons’ position. The
17 district court first acknowledged that, according to the forum
18 rule, “[t]he reasonable rate used to determine the amount of
19 attorney[’s] fees to award is calculated according to the
20 prevailing rates in the district in which the court sits.”
21 Simmons, 2008 WL 630060, at *2 (citing Polk v. N.Y. State Dep’t
22 of Corr. Servs., 722 F.2d 23, 25 (2d Cir. 1983)). The district
23 court concluded, however, that Simmons was justified in retaining
24 out-of-district counsel under the circumstances, and therefore
-5- 1 the court was permitted, under Arbor Hill, to “adjust th[e] base
2 hourly rate to account for [Simmons’] reasonable decision.” Id.
3 (quoting Arbor Hill, 493 F.3d at 111-12 (first alteration in
4 original)). The district court found that, “[a]lthough there may
5 be other civil rights attorneys in the Eastern District,”
6 Simmons’ decision to hire out-of-district counsel was reasonable
7 due to counsel’s experience and “success rate” in litigating
8 disability discrimination cases, and the fact that “travel time”
9 between the Southern and Eastern districts is “minimal.” Id. at
10 *2-3.
11 Following motions for interest on attorney’s fees, the
12 district court awarded Simmons attorney’s fees in the total
13 amount of $213,085.25.
14 The TA appealed this award.
15 DISCUSSION
16 I. Legal Standard
17 “We . . . review decisions to award or deny attorney[’s]
18 fees for abuse of discretion.” Jacobson v. Healthcare Fin.
19 Servs., Inc., 516 F.3d 85, 96 (2d Cir. 2008). “A district court
20 abuses its discretion if it relies on ‘an erroneous view of the
21 law or on a clearly erroneous assessment of the evidence.’”
22 Kerin v. U.S. Postal Serv., 218 F.3d 185, 188-89 (2d Cir. 2000)
23 (quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405
24 (1990)).
-6- 1 II. The Forum Rule
2 In Arbor Hill, we undertook to simplify the complexities
3 surrounding attorney’s fees awards that had accumulated over time
4 under the traditional “lodestar” approach to attorney’s fees (the
5 product of the attorney’s usual hourly rate and the number of
6 hours worked, which could then be adjusted by the court to set
7 “the reasonable fee”), and the separate “Johnson” approach (a
8 one-step inquiry that considered twelve specified factors to
9 establish a reasonable fee). 493 F.3d at 114. Relying on the
10 substance of both approaches, we set forth a standard that we
11 termed the “presumptively reasonable fee.” Id. at 118. We
12 directed district courts, in calculating the presumptively
13 reasonable fee, “to bear in mind all of the case-specific
14 variables that we and other courts have identified as relevant to
15 the reasonableness of attorney’s fees in setting a reasonable
16 hourly rate.” Id. at 117 (emphasis in original). The
17 presumptively reasonable fee boils down to “what a reasonable,
18 paying client would be willing to pay,” given that such a party
19 wishes “to spend the minimum necessary to litigate the case
20 effectively.” Id. at 112, 118.
21 The facts of Arbor Hill also required us to further develop
22 the parameters of the “forum rule,” a methodology first developed
23 by the Supreme Court in Blum v. Stenson, 465 U.S. 886 (1984).
24 According to the forum rule, courts “should generally use ‘the
-7- 1 hourly rates employed in the district in which the reviewing
2 court sits’ in calculating the presumptively reasonable fee.”
3 Arbor Hill, 493 F.3d at 119 (quoting In re “Agent Orange” Prod.
4 Liab. Litig., 818 F.2d 226, 232 (2d Cir. 1987)); see also Blum,
5 465 U.S. at 895; Polk, 722 F.2d at 25. The court may apply an
6 out-of-district rate (or some other rate, based on the
7 aforementioned “case-specific variables”) if, “in calculating the
8 presumptively reasonable fee[,] . . . it is clear that a
9 reasonable, paying client would have paid those higher rates.”
10 493 F.3d at 119.
11 Arbor Hill had no occasion to draw the exact parameters of
12 the forum rule and, specifically, the exception to the rule. In
13 defining the exception to the rule, we stated that
14 [w]e presume . . . a reasonable, paying client would in 15 most cases hire counsel from within his district, or at 16 least counsel whose rates are consistent with those 17 charged locally. This presumption may be rebutted – 18 albeit only in the unusual case – if the party wishing 19 the district court to use a higher rate demonstrates 20 that his or her retention of an out-of-district 21 attorney was reasonable under the circumstances as they 22 would be reckoned by a client paying the attorney’s 23 bill. 24 25 Id. (emphasis added). Thus, while we disavowed “strict adherence
26 to the forum rule” where “circumstances have warranted it,” id.
27 at 120 (citing Polk, 722 F.2d at 25; Agent Orange, 818 F.2d at
28 232), due to our “belief that district courts should award fees
29 just high enough ‘to attract competent counsel,’” id. at 121
30 (quoting Lewis v. Coughlin, 801 F.2d 570, 576 (2d Cir. 1986)), we
-8- 1 still emphasized that deviation from the forum rule is only
2 appropriate “in the unusual case,” in which a litigant
3 demonstrates that her selection of counsel was “reasonable under
4 the circumstances,” id. at 119. We suggested in Arbor Hill that
5 district courts should consider factors such as “geograph[ical]”
6 proximity between districts, id. at 120, and the “workings of
7 today’s market for legal services,” id., to determine whether the
8 litigant’s selection of counsel was “reasonable” enough to permit
9 deviation from the forum rule.
10 We had considered the forum rule in cases prior to Arbor
11 Hill. But in those cases we had stated that district courts may
12 deviate from the forum rule where litigants can “show[] . . .
13 that the case required special expertise beyond the competence of
14 [forum district] law firms.” Arbor Hill Concerned Citizens
15 Neighborhood Ass’n v. County of Albany, 369 F.3d 91, 96-97 (2d
16 Cir. 2004) (per curiam); see also Agent Orange, 818 F.2d at 232
17 (“We . . . have strayed from [the forum] rule only in the rare
18 case where the special expertise of non-local counsel was
19 essential to the case, it was clearly shown that local counsel
20 was unwilling to take the case, or other special circumstances
21 existed.”) (internal quotation marks omitted, emphasis added).
22 Arbor Hill thus could be read to have expanded the exception to
23 the forum rule.
24 Since Arbor Hill, district courts in this circuit have
-9- 1 variously applied the exception to the forum rule. Compare
2 Mikrut v. Unum Life Ins. Co., No. 3:03cv1714(SRU), 2007 WL
3 2874801, at *4 (D. Conn. Sept. 28, 2007) (reducing fees to
4 District of Connecticut rates based on the court’s conclusion
5 that “[m]any attorneys practicing in this District could have
6 ably handled this case for [plaintiff] at much lower rates than
7 those sought”), with Luca v. County of Nassau, No. 04-CV-
8 4894(FB), 2008 WL 2435569, at *9 (E.D.N.Y. June 16, 2008)
9 (awarding Southern District rates in a case litigated in the
10 Eastern District due to the “uniquely permeable” border between
11 the districts), and Wash. Mut. Bank v. Forgue, No. 07-MC-6027-
12 CJS, 2008 WL 282201, at *1 (W.D.N.Y. Jan. 30, 2008) (awarding
13 Southern District rates in a case litigated in the Western
14 District of New York where “[p]etitioner would have retained [his
15 counsel] for this matter in the Western District . . . since [the
16 same counsel] has been representing [p]etitioner throughout these
17 proceedings and is familiar with ancillary proceedings by other
18 parties against [p]etitioner”); cf. Disabled Patriots of Am.,
19 Inc. v. Niagara Group Hotels, LLC, No. 07CV284S, 2008 WL 1867968,
20 at *4 (W.D.N.Y. Apr. 24, 2008) (awarding Southern District of
21 Florida rates where defendant did not object to the calculation,
22 but deeming the rate to be “[un]reasonable for this District”).
23 The instant case requires us to provide further guidance to
24 district courts by delineating to a greater degree the
-10- 1 “circumstances” that will justify the “reasonable” selection of
2 out-of-district counsel, and the concomitant payment of out-of-
3 district rates.
4 We now hold that, when faced with a request for an award of
5 higher out-of-district rates, a district court must first apply a
6 presumption in favor of application of the forum rule. In order
7 to overcome that presumption, a litigant must persuasively
8 establish that a reasonable client would have selected out-of-
9 district counsel because doing so would likely (not just
10 possibly) produce a substantially better net result. In
11 determining whether a litigant has established such a likelihood,
12 the district court must consider experience-based, objective
13 factors. Among the objective factors that may be pertinent is
14 counsel’s special expertise in litigating the particular type of
15 case, if the case is of such nature as to benefit from special
16 expertise. A litigant cannot overcome the presumption through
17 mere proximity of the districts, nor can a litigant overcome the
18 presumption by relying on the prestige or “brand name” of her
19 selected counsel. Lawyers can achieve prestige and fame in
20 numerous ways that do not necessarily translate into better
21 results. The party seeking the award must make a particularized
22 showing, not only that the selection of out-of-district counsel
23 was predicated on experience-based, objective factors, but also
24 of the likelihood that use of in-district counsel would produce a
-11- 1 substantially inferior result. Unless these limitations are
2 observed, the award of attorney’s fees would not respect what we
3 described in Arbor Hill as the “touchstone” of the doctrine,
4 “that district courts should award fees just high enough ‘to
5 attract competent counsel.’” 493 F.3d at 121 (emphasis added).
6 Among the ways an applicant may make such a showing is by
7 establishing that local counsel possessing requisite experience
8 were unwilling or unable to take the case, Agent Orange, 818 F.2d
9 at 232, or by establishing, in a case requiring special
10 expertise, that no in-district counsel possessed such expertise.
11 In Arbor Hill, we rejected application of a “strict forum
12 rule” as the “settled law of this circuit.” 493 F.3d at 121 n.8.
13 But in saying the forum rule is not “strict,” we mean not
14 absolute. In delineating the parameters of the exception, we
15 continue to adhere both to our previous holdings and those of
16 other circuits. As the Seventh Circuit has stated:
17 If a high priced, out of town attorney renders services 18 which local attorneys could do as well, and there is no 19 other reason to have them performed by the former, then 20 the judge . . . m[ay] allow only an hourly rate which 21 local attorneys would have charged for the same 22 service. On the other hand, there are undoubtedly 23 services which a local attorney may not be willing or 24 able to perform. The complexity and specialized nature 25 of a case may mean that no attorney, with the required 26 skills, is available locally. 27 28 Chrapliwy v. Uniroyal, Inc., 670 F.2d 760, 768 (7th Cir. 1982);
29 see also Maceira v. Pagan, 698 F.2d 38, 40 (1st Cir. 1983);
30 Avalon Cinema Corp. v. Thompson, 689 F.2d 137, 140-41 (8th Cir.
-12- 1 1982).
2 Our interpretation of the exception to the forum rule
3 provides a roadmap for district courts to follow, and guidance
4 for litigants, and their counsel, to consider in taking cases and
5 seeking attorney’s fees. There are sound policy reasons for a
6 clarified exception to the forum rule as opposed to a more
7 nebulous test, among them predictability and economy. As
8 discussed infra, the instant case demonstrates that replacing a
9 less defined, more opaque rule with the one we announce promotes
10 cost-consciousness, increases the probability that attorneys will
11 receive no more than the relevant market would normally permit,
12 and encourages litigants to litigate with their own pocketbooks
13 in mind, instead of their opponents’.
14 III. The Instant Appeal
15 In this case, the district court awarded attorney’s fees to
16 Simmons’ counsel based on the prevailing hourly rates in the
17 Southern District, where her counsel was based, as opposed to the
18 Eastern District, where the suit was litigated. The district
19 court concluded that the exception to the forum rule applied to
20 this case because of (1) counsel’s “experience in the area of
21 employment law, and in particular, his experience litigating
22 disability discrimination cases, both in the Southern and Eastern
23 Districts,” Simmons, 2008 WL 630060, at *2, (2) counsel’s
24 “success rate” in litigating such cases, id. at *3, and (3) the
-13- 1 “proximity” of counsel’s Southern District office to the Eastern
2 District, id.; see also id. (noting that “travel time between the
3 Southern and Eastern District is minimal as the principal
4 courthouses for each district are minutes away from each other,
5 on either side of the East River”). The district court concluded
6 that, “[a]lthough there may be other civil rights attorneys in
7 the Eastern District,” Simmons had satisfied the exception to the
8 forum rule by hiring an attorney that a “reasonable paying
9 client” would have hired. Id.
10 In light of our clarification of the exception to the forum
11 rule, it is apparent that Simmons has not overcome the
12 presumption in favor of the forum rule. Although the district
13 court properly considered counsel’s experience and success rate
14 in assessing the merits of Simmons’ application for out-of-
15 district rates, Simmons presented no evidence to the district
16 court or on appeal that, had she retained Eastern District
17 counsel instead of Southern District counsel, she would have
18 received a substantially inferior result to that provided by her
19 selected counsel. Nor has she shown that Eastern District
20 counsel were unable or unwilling to take her case; indeed, the
21 district court itself noted that other “civil rights attorneys in
22 the Eastern District” may have been able to competently prosecute
23 Simmons’ litigation. Id. While Simmons cannot be faulted for
24 wanting to retain counsel with the best possible reputation, it
-14- 1 is not the TA’s responsibility to compensate for such counsel
2 based on higher out-of-district rates where Simmons has not shown
3 that they were likely to produce a substantially better result
4 than competent counsel in the Eastern District would produce for
5 less – in this case, substantially less – money. The TA should
6 not be required to pay for a limousine when a sedan could have
7 done the job.
8 Accordingly, Simmons cannot satisfy the exception to the
9 forum rule as we have articulated it, and the district court
10 erred in deviating from the forum rule in this case.
11 CONCLUSION
12 For the foregoing reasons, the district court’s attorney’s
13 fees award is VACATED, and the case is REMANDED for the district
14 court to reduce the attorney’s fees award by $45,000, which
15 represents the difference between the prevailing hourly rates of
16 the Southern District and Eastern District.
-15-