Nenh Phetosomphone v. Allison Reed Group ( 1993 )


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  • USCA1 Opinion









    January 20, 1993
    UNITED STATES COURT OF APPEALS
    FOR THE FIRST CIRCUIT
    ____________________

    No. 92-1117

    NENH PHETOSOMPHONE,

    Plaintiff, Appellant,

    v.

    ALLISON REED GROUP, INC. d/b/a TECHNI-CRAFT PLATING,
    NOEL SMITH AND CAROL MARSELLA,

    Defendants, Appellees.

    _____________________

    No. 92-1118

    GARY SHOWALTER,

    Plaintiff, Appellant,

    v.

    ALLISON REED GROUP, INC. d/b/a/ TECHNI-CRAFT PLATING,
    NOEL SMITH AND CAROL MARSELLA,

    Defendants, Appellees.

    ____________________


    APPEALS FROM THE UNITED STATES DISTRICT COURT

    FOR THE DISTRICT OF RHODE ISLAND

    [Hon. Ronald R. Lagueux, U.S. District Judge]
    ___________________

    ____________________

    Before

    Torruella, Circuit Judge,
    _____________
    Aldrich, Senior Circuit Judge,
    ____________________
    and Boudin, Circuit Judge.
    _____________

    ____________________

    Susan Deveney with whom Michael R. Hagopian was on brief for
    ______________ _____________________
    appellants.

















    Elizabeth A. Del Padre for appellee Noel Smith.
    ______________________
    Steven A. Robinson with whom Shayle Robinson was on brief for
    ___________________ ________________
    appellee Allison Reed Group, Inc. d/b/a/ Techni-Craft Plating.


    ____________________


    ____________________

























































    BOUDIN, Circuit Judge. Gary Showalter and Nenh
    ______________

    Phetosomphone, plaintiffs in the district court, appeal from

    that court's award of attorneys' fees following their

    successful Title VII suit. Because we conclude that the

    district court did not abuse its considerable discretion in

    determining an appropriate fee award, we affirm.

    I.

    Plaintiffs brought separate suits, later consolidated

    for trial, against Allison Reed Group, Inc. ("Allison Reed"),

    Noel Smith and Carol Marsella, alleging that plaintiffs were

    the victims of sexual harassment in the workplace. In their

    complaints, plaintiffs sought equitable and declaratory

    relief and back pay under Title VII of the Civil Rights Act

    of 1964, 42 U.S.C. 2000e et seq., as well as compensatory
    __ ____

    damages under Rhode Island law for the tort of intentional

    infliction of emotional distress.

    Plaintiffs' tort claim against Smith and Marsella was

    tried to a jury, and the Title VII claim against Allison Reed

    and Smith was tried simultaneously to the court.1 The jury

    returned a verdict in favor of defendants on the state-law

    claim. The court ruled, however, that plaintiffs had

    established a claim of sexual harassment under Title VII


    ____________________

    1The district court directed a verdict for Allison Reed
    on the state-law count at the close of plaintiffs' case. The
    court also ruled that Marsella was not a statutory "employer"
    under Title VII and was therefore not a proper defendant with
    respect to that count.

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    against Allison Reed and Smith. The court ordered defendant

    Allison Reed to establish a procedure for claims of sexual

    harassment, and enjoined it from allowing future sexual

    harassment of Showalter should he return to work.2 The

    court found that Phetosomphone had been constructively

    discharged as a result of the sexual harassment and had been

    out of work for eight weeks, and it awarded him back pay of

    $1,737.60 plus prejudgment interest. The factual and

    procedural background of this case and the court's rulings on

    the merits are set forth in detail in Showalter v. Allison
    _________ _______

    Reed Group, Inc., 767 F. Supp. 1205 (D.R.I. 1991).
    ________________

    After its decision on the merits, the district court

    invited plaintiffs to submit an application for costs and

    attorneys' fees pursuant to 42 U.S.C. 2000e-5(k). The

    court stated that "[t]he application for counsel fees must be

    supported by a detailed, contemporaneous accounting of the

    time spent by the attorneys on this case." 767 F. Supp. at

    1215. Plaintiffs' counsel submitted an application seeking

    attorneys' fees and costs totalling $83,177. The district

    court held a hearing on the application, and directed





    ____________________

    2At the time of trial, Showalter was out of work due to
    a back injury and was receiving worker's compensation.
    Because Showalter had not left his employment because of the
    harassment but rather on account of the injury, the court
    held that Showalter was not entitled to back pay. The court
    awarded Showalter $1 in nominal damages.

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    plaintiffs to submit additional documentation in support of

    their claim.

    The district court ultimately allowed only $12,762 in

    fees and $240 in costs. The court issued a 13-page opinion

    explaining in detail its reasons for sharply limiting the

    award both as to hours allowed and the hourly rate claimed.

    The court attached to its opinion a 16-page appendix in which

    it itemized each expenditure of counsel time for which

    compensation was sought, and identified which had been

    allowed and which had been reduced or stricken. This appeal

    followed.

    II.

    Title VII provides that "[i]n any action or proceeding

    under this subchapter the court, in its discretion, may allow

    the prevailing party, other than the Commission or the United

    States, a reasonable attorney's fee (including expert fees)

    as part of the costs . . . ." 42 U.S.C. 2000e-5(k).

    Accordingly, an award of fees under the statute is reviewed

    primarily under an abuse of discretion standard, and the

    trial court's range of discretion is particularly broad.

    United States v. Metropolitan Dist. Comm'n, 847 F.2d 12, 14
    _____________ _________________________

    (1st Cir. 1988). We have advised parties on more than one

    occasion that "the battle [over attorneys' fee awards] is

    likely to be determined in the trial court." E.g., Foley v.
    ___ _____

    City of Lowell, 948 F.2d 10, 19 (1st Cir. 1991). Moreover,
    ______________



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    "the fee applicant bears the burden of establishing

    entitlement to an award and documenting the appropriate hours

    expended and hourly rates." Hensley v. Eckerhart, 461 U.S.
    _______ _________

    424, 437 (1983).

    In Hensley, the Supreme Court explained that "[t]he most
    _______

    useful starting point for determining the amount of a

    reasonable fee is the number of hours reasonably expended on

    the litigation multiplied by a reasonable hourly rate," 461

    U.S. at 433, adding that adjustments could then be made to

    reflect "other considerations" including the results

    obtained. Id. at 434. In this case, the district court
    __

    determined compensable hours as follows: it discounted hours

    such as trial time to exclude time needed only because of the

    presence of the state claim; it disallowed hours spent on

    specific matters that by their nature could relate only to

    the state-law claim; and it disallowed hours documented so

    generally that the court could not determine their connection

    to the Title VII claim.3 Having derived a total number of

    allowable hours, the court then multiplied them by an hourly

    fee, reducing plaintiffs' requested hourly rate from $150 to

    $90 per hour.

    Plaintiffs' broadest challenge on this appeal is to the

    concept of separating time devoted to the federal and state-


    ____________________

    3The court also disallowed as improbable claims for
    hours in excess of 12 hours by an attorney on any one day.
    There is no separate challenge to this determination.

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    law claims. Plaintiffs appear to recognize that, considered

    separately, time spent on the state-law claims would not

    warrant attorney's fees, those claims being outside the ambit

    of Title VII and unsuccessful to boot. Plaintiffs argue,

    however, that because their Title VII and state-law claims

    arose out of the same set of facts, virtually all of

    counsel's efforts to prepare this case for trial related to

    both the state-law and the federal claims. In these

    circumstances, plaintiffs contend, the courts have rejected

    attempts to attribute the hours spent in the preparation of

    the case to one claim or the other, and instead have viewed

    the litigation as a whole in setting an appropriate fee

    award.

    It is quite true that in Hensley the Supreme Court
    _______

    cautioned that attempts to allocate hours between claims may

    be unwarranted where an action involves related legal

    theories applied to a common core of facts. 461 U.S. at 434-

    35. Thus a district court may find that the federal and

    state claims are so interrelated, and the time spent in

    preparation of those claims so overlapping, that an attempt

    to separate the time attributable to one or the other would

    be futile. See, e.g., Munson v. Milwaukee Bd School Dirs.,
    ___ ___ ______ _________________________

    969 F.2d 266, 272 (7th Cir. 1992); Wagenmann v. Adams, 829
    _________ _____

    F.2d 196, 225 (1st Cir. 1987). But it does not follow that

    the district court is prevented from eliminating hours
    _________



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    attributable to state-law claims where, as here, the court

    reasonably concludes that there is not a complete overlap and

    separation is proper. Indeed, in Hensley itself, where the
    _______

    successful and unsuccessful claims were closely related, the

    Supreme Court said generally that "[t]he district court may

    attempt to identify specific hours that should be eliminated,

    or it may simply reduce the award to account for the limited

    success." 461 U.S. at 436-37.

    In this instance there were, as the district court

    found, discrete tasks performed by plaintiffs' counsel that

    related only to the state-law claim for intentional

    infliction of emotional distress: for example, the

    development of evidence regarding the emotional harm

    allegedly suffered by Showalter and Phetosomphone (because

    compensatory damages were not then available under Title

    VII), and efforts relating to the jury, such as jury

    selection and preparation of instructions (because only the

    state-law claim was tried to the jury). On the same

    principle, we believe that the court was entitled to

    eliminate or discount hours or other expenses that it found

    would not have been incurred but for the unsuccessful state-

    law claim. See Hensley, 461 U.S. at 436-37; Wagenmann, 829
    ___ _______ _________

    F.2d at 225 (segregable expenses).

    Plaintiffs next criticize the district court's

    application of this concept, arguing (often in fairly general



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    terms but with some examples) that some of the time

    discounted or disallowed should have been permitted. For

    example, plaintiffs say that time spent on state

    administrative proceedings, which are a predicate to filing a

    Title VII claim, should have been allowed, and that too

    little time was permitted for consulting with clients.

    Admittedly, in excluding or limiting these hours, the

    district court took a very hard line. The disallowances,

    however, were not irrational: they stemmed from the district

    court's decision that in these and similar instances, counsel

    provided inadequate explanation of the nature of the services

    for which compensation was claimed, or of their relationship

    to the Title VII claims, or both. Thus, where the time

    records contained entries such as "library" and "letters to

    opposing counsel," the court excluded the time, noting that

    the entries "left the court guessing about their purposes."

    There was some basis for the district court's insistence

    upon specificity. The court, which was intimately familiar

    with the case, found that plaintiffs' state-law claim played

    a very substantial role in plaintiffs' preparation and

    prosecution of this action. The court expressly rejected the

    representation of plaintiff's counsel that efforts relating

    exclusively to the state-law claim comprised less than five

    percent of her total work on the case, "[s]ince it [was]

    readily apparent to the Court that most of the plaintiffs'



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    efforts were directed toward obtaining a large damage award

    under state law . . . ." Compensatory damages, of course,

    were not available under Title VII at the time of this trial.

    Compare Civil Rights Act of 1991, Pub. L. No. 102-166, 102,
    _______

    105 Stat. 1071, 1072-73 (1991).

    The district court's skepticism was also grounded in its

    finding that counsel had failed to submit contemporaneous

    time records showing hours worked. This omission persisted

    even after the court afforded counsel an opportunity to

    remedy the problem.4 We have expressly advised the bar that

    "the absence of detailed contemporaneous time records, except

    in extraordinary circumstances, will call for a substantial

    reduction in any award or, in egregious cases, disallowance."

    Grendel's Den, Inc. v. Larkin, 749 F.2d 945, 952 (1st Cir.
    ___________________ ______

    1984); accord, Hensley, 461 U.S. at 433 ("Where the
    ______ _______

    documentation of hours is inadequate, the district court may

    reduce the award accordingly."). In this case, the court did

    not disallow trial counsel's claim for lack of such records,




    ____________________

    4Counsel first submitted a computer-generated list
    containing the dates that counsel had worked on plaintiffs'
    case, a brief description of the tasks performed and the
    number of hours expended. The court found this accounting
    inadequate and requested counsel to submit contemporaneous
    records. In response, counsel submitted individual time
    sheets for the entries on the chronological list. The court
    found that all of these time sheets were written by the same
    hand in the same pen, and it concluded that the sheets had
    not been prepared contemporaneously. This factual finding is
    not clearly erroneous and we are bound to accept it.

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    but that lack did encourage the court to resolve doubts

    against reimbursement.5

    We also reject the claim that the district court abused

    its discretion in reducing counsel's hourly rate from $150 to

    $90. We have held that a district court, in fixing a

    reasonable fee award, is not bound by the hourly rate

    requested by the victor's counsel; rather, the court may

    establish a rate that it considers reasonable based on

    counsel's skill and experience and prevailing market rates.

    See Metropolitan District Comm'n, 847 F.2d at 19; Wojtkowski
    ___ ____________________________ __________

    v. Cade, 725 F.2d 127, 131 (1st Cir. 1984). The district
    ____

    court noted that plaintiffs' counsel had been practicing law

    for only three years, and it stated that $75 to $90 per hour

    was the court's normal range for attorneys with this level of

    experience. The court awarded counsel the high end of the

    range to reflect her supervisory role in the litigation.

    Plaintiffs have provided us with no basis for overturning the

    court's judgment.

    Only one aspect of the district court's determination

    gives us pause. At the outset of its opinion, the court said



    ____________________

    5The lack of contemporaneous records did lead to one
    specific disallowance, but not of time claimed by lead
    counsel. Plaintiffs included in their submission the
    affidavit and bill of a predecessor attorney, which listed
    only a description of services and a total amount due.
    Neither the time expended in total nor on individual items
    was included. We see no error whatever in disallowing such
    an undocumented claim.

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    that the relief obtained by plaintiff on the Title VII claim

    was "relatively limited in comparison to the scope of the

    litigation as a whole." Specifically, the court observed

    that each plaintiff's complaint had sought $1 million in

    compensatory damages on their unsuccessful state-law claim,

    whereas plaintiffs ultimately received only $1 in nominal

    damages (in the case of appellant Showalter) and $1,737 in

    back pay (in the case of Phetosomphone). Thus, the court

    noted, "[t]he combined monetary relief that the plaintiffs

    ultimately received was less than one-tenth of one percent of

    what they originally sought."

    We think that plaintiffs' proportionate success on the

    Title VII claim vis-a-vis their failure to prevail on the

    state-law claim is irrelevant. Since the district court

    eliminated from the award any compensation for hours spent on

    the prosecution of the state-law claim, it would be illogical

    to reduce further the award to reflect the lack of success of

    that claim. It is true that in a number of cases, the courts

    have stated that "the extent of a plaintiff's success is a

    crucial factor in determining the proper amount of an award

    of attorney's fees . . . ." Hensley, 461 U.S. at 440; see
    _______ ___

    also Foley, 948 F.2d at 19. But we think these statements
    ____ _____

    must be understood as referring to the degree of overall

    success where unsuccessful claims are included in the
    ________





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    calculation of the number of hours for which compensation is

    allowed.

    Nevertheless, we do not believe that the district

    court's comparison of the outcomes achieved by plaintiffs in

    their federal and state-law claims requires further

    proceedings. The district court expressed this view in an

    introductory section of its opinion; the belief did not

    manifest itself in any particular reduction in the fee award,

    and the specific reductions in the award were based upon the

    legitimate disallowance of hours. If the comment played any

    role, it was as a general predicate to the court's

    permissible decision to disallow or discount hours not shown

    to be related to the successful claim.

    III.

    Finally, plaintiffs contend that the court erred by

    disallowing its request for costs other than $240 in filing

    fees. This argument need not detain us long.

    The award of costs to the prevailing party, like the fee

    award, is a creature of statute. Fed. R. Civ. P. 54(d)

    states that "costs shall be allowed as a matter of course to

    the prevailing party unless the Court otherwise directs . . .

    ."6 Allowable costs are listed in 28 U.S.C 1920; and 28


    ____________________

    6Although appellants' brief suggests that costs may be
    imposed directly under section 2000e-5(k), "[s]ection 2000e-
    5(k) does not alter the standard by which the court awards
    costs that are not attorneys' fees pursuant to Rule 54(d)."
    Myrick v. TNT Overland Express, 143 F.R.D. 126, 128 (N.D.
    ______ _____________________

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    U.S.C. 1924 provides that "the party claiming any item of

    cost or disbursement shall attach thereto an affidavit, made

    by himself or his duly authorized attorney or agent having

    knowledge of the facts, that such item is correct and has

    been necessarily incurred in the case and that the services

    for which fees have been charged were actually and

    necessarily performed." A "bill of costs" form (AO 133) is

    made available to the prevailing party by the court; in

    addition to providing a worksheet to itemize costs, the form

    also provides a built-in declaration tracking the language of

    the statute.

    In this case, plaintiffs neglected to file a bill of

    costs form or to supply any other verification that the costs

    claimed were "necessarily incurred in the case" and that the

    services for which compensation was sought were "actually and

    necessarily performed." Rather, the affidavit submitted by

    plaintiffs stated only that the costs were expended "in the

    preparation and litigation of this case," which, as the

    district court noted, is a broader and more inclusive

    standard. The court therefore disallowed all costs other

    than $240, which represented the filing fees in the two

    cases; these were the only costs which, in the court's view,





    ____________________

    Ohio 1992); accord, Goostree v. Tennessee, 796 F.2d 854, 864
    ______ ________ _________
    (6th Cir. 1986), cert. denied, 480 U.S. 918 (1987).
    ____________

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    could safely be assumed on their face to have been

    "necessarily incurred."

    The district court could permissibly have concluded that

    certain other expenses, such as the cost of the depositions

    of the individual defendants and the cost of an interpreter

    for plaintiff Phetosomphone, were "necessary" on their face,

    but we do not believe that the court was obliged to do so.

    At the fee hearing, the district judge warned plaintiffs'

    counsel that the initial costs submission was not a proper

    bill of costs and afforded additional time for filing, but

    the response was the affidavit already described. Preparing

    a technically adequate application for costs was plaintiffs'

    responsibility, not the court's; and it was not a difficult

    or onerous responsibility, given the "bill of costs" form

    available from the clerk.

    * * *

    Congress has provided for attorneys' fee awards in Title

    VII cases. It is important that the public policy reflected

    in the statute not be undone by requirements of proof that

    are overly stringent or by too grudging a test of what is

    reasonable. At the same time, such fee awards are peculiarly

    within the expertise and discretion of the district judge.

    It is often difficult to strike the proper note in
    fee-setting matters, to balance the need adequately
    to compensate successful counsel against the need
    to burden unsuccessful defendants fairly, but no
    more. The district court--which, as in this case,
    has frequently lived with the litigation and the


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    lawyers for long period of time, and which is
    likely to be more familiar with the marketplace--
    has the best coign of vantage.

    Metropolitan Dist. Comm'n, 847 F.2d at 20. Here the trial
    __________________________

    judge provided an unusually detailed explanation for the

    reduction in the fees and costs sought by plaintiffs. The

    court's conclusions are untainted by legal error and fall

    within the realm of reasonableness. Accordingly, the

    district court's judgment is affirmed.
    ________





































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    ALDRICH, Senior Circuit Judge, dissenting. I quite
    ____________________

    agree with much of the court's opinion. Certainly an

    attorney fees determination should not be a second lawsuit,

    and a court's finding of the number of hours reasonably

    spent, and of appropriate hourly rates in part based on first

    hand appraisal of counsel's ability, should not be reviewable

    except for special reason. Nor can I sympathize with

    plaintiffs' unexplained and persistent disregard of formal

    methodology rules. I am much troubled, however, by the

    district court's approach to a primary issue in the case, the

    time devoted to the state claim that would not have been

    spent had that issue not been included. The federal and

    state cases were not separate, but were totally related, even

    with, as defendant concedes, identical witnesses. The only

    difference was that federal recovery, at that time, did not

    include compensatory damages. Even here there was a special

    connection in that plaintiffs were obliged to show, even for

    the federal count, that their own, conceded participation,

    was unenjoyable and involuntary. In this circumstance, total

    disregard of hours charged for such items as conferences with

    clients; contacts with counsel for defendants, and

    preparation for, and taking of the deposition of defendant

    Smith, the principal harasser, on the ground that counsel







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    cannot allocate and subtract, imposes an extraordinary

    burden.

    As my brothers say, this might be an appropriate

    occasion to adopt the suggestion in Hensley v. Eckerhart, 461
    _______ _________

    U.S. 424, 436-37 (1983), where the Court said, "The district

    court may attempt to identify specific hours that should be

    eliminated, or it may simply reduce the award to account for

    the limited success." That, however, brings me to my real

    difficulty, the district court's finding that this was a case

    where the relief obtained was "truly limited in comparison to

    the scope of the litigation as a whole," citing Hensley, 461
    _______

    U.S. at 440. In terms, counsel "won on one minor claim for

    each plaintiff."

    In Riverside v. Rivera, 477 U.S. 561, 574-576
    _________ ______

    (1986), the Court said,

    Unlike most private tort litigants, a
    civil rights plaintiff seeks to vindicate
    important civil and constitutional rights
    that cannot be valued solely in monetary
    terms. . . .

    Because damages awards do not
    reflect fully the public benefit advanced
    by civil rights litigation, Congress did
    not intend for fees in civil rights
    cases, unlike most private law cases, to
    depend on obtaining substantial monetary
    relief. . . .

    Thus, Congress recognized that
    reasonable attorney's fees under 1988
    are not conditioned upon and need not be
    proportionate to an award of money
    damages.



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    Plaintiffs had achieved the maximum possible recovery on the

    federal claims, including an order against defendant employer

    to improve its internal procedures with respect to sexual

    harassment. By its dwelling at length on the state dollars

    sought and, though not applying them mathematically,

    concluding the federal claim "minor" I cannot but think that

    the district court greatly depreciated the Civil Rights Act,

    seriously impairing its discretion. I would favor

    reconsideration.



































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