Smith v. Philadelphia Housing Authority ( 1997 )

Opinions of the United
1997 Decisions States Court of Appeals
for the Third Circuit
2-26-1997
Smith v. Phila Housing Auth
Precedential or Non-Precedential:
Docket 96-1370,96-1379
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Recommended Citation
"Smith v. Phila Housing Auth" (1997). 1997 Decisions. Paper 47.
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 96-1370 and 96-1379
VERNITA SMITH,
Appellant No. 96-1370
v.
PHILADELPHIA HOUSING AUTHORITY; LARGHNE LAHM;
JOHN VARALLO; CLAUDE ROSS
CARMEN RIVERA,
Appellant No. 96-1379
v.
PHILADELPHIA HOUSING AUTHORITY;
ANTHONY HOLLAND; JOHN VARALLO; CLAUDE ROSS
On Appeal From the United States District Court
for the Eastern District of Pennsylvania
(D.C. Nos. 94-cv-07284 and 95-cv-07658)
Argued January 10, 1997
BEFORE: COWEN, ALITO and ROSENN
Circuit Judges
) (Filed February
26, 1997
Michael Donahue, Esq.
Harold I. Goodman, Esq. (argued)
Community Legal Services
1424 Chestnut Street
Philadelphia, PA 19102
COUNSEL FOR APPELLANTS
M. Kevin Hubbard, Esq. (argued)
Philadelphia Housing Authority
2012 Chestnut Street
Philadelphia, PA 19103
1
COUNSEL FOR APPELLEES
OPINION
COWEN, Circuit Judge.
Plaintiffs in this consolidated appeal contest the amount of
attorney’s fees awarded by the district court pursuant to 42
U.S.C. § 1988. Specifically, they contend that the district
court erred in finding $150 to be the reasonable hourly rate for
the services provided by their attorney, rather than the $210 per
hour rate they requested. For the reasons that follow, we will
vacate the judgments of the district court and remand for further
proceedings.
I.
Plaintiffs Vernita Smith and Carmen Rivera are indigent
tenants of defendant Philadelphia Housing Authority (“PHA”).
Each commenced an action in the district court pursuant to 42
U.S.C. § 1983 and the United States Housing Act, 42 U.S.C. § 1437
et seq., in order to enforce administrative grievance awards
previously issued in their favor pursuant to 24 C.F.R. §§ 966.50-
.57. Smith’s award required the PHA to make certain repairs to
her rental unit. Rivera’s award provided for a rent abatement
and a rollback of a rent increase imposed by the PHA. Both Smith
and Rivera were represented by Michael Donahue, Esq., of
Community Legal Services (“CLS”) of Philadelphia. It is not
disputed that Smith and Rivera were each a “prevailing party” in
their respective lawsuits, within the meaning of § 1988.
2
Plaintiffs petitioned the court for attorney’s fees pursuant
to § 1988, requesting an hourly rate of $210. In support of
their petitions, plaintiffs each submitted two affidavits, one
from Donahue and one from Lorrie McKinley. McKinley is Project
Head of the Employment Law Project at CLS and Chair of the CLS
Attorneys Fees Committee, which establishes the usual billing
rates for CLS counsel. Donahue’s affidavit noted that he has
been a member of the federal bar since 1978, and has litigated
over 200 cases involving the federal housing regulations,
including ten class actions and four successful appeals in this
Court.1 Donahue averred that $210 per hour is a reasonable
market rate for the services he rendered.
McKinley’s affidavit stated that she has been practicing law
since 1984 and is familiar with the market rates for civil rights
attorneys in the Philadelphia area. It stated that Donahue’s
usual hourly rate is $210, and that this rate is consistent with
the rates for attorneys of similar experience and skill in civil
rights matters in Philadelphia. The latter statement is based on
the CLS schedule of rates, which in turn is “based upon a survey
of hourly rates charged by private law firms and individual
practitioners in Philadelphia.” App. at 38.
In both cases, the PHA objected to the proposed hourly rate
because it was higher than the rate awarded Donahue in similar
prior cases, but it offered no affidavits to support its
position. The PHA did not object to the McKinley affidavit, but
1
That number has since grown to five. See Farley v.
Philadelphia Housing Auth., 102 F.3d 697 (3d Cir. 1996).
3
it contested the propriety and reliability of the underlying fee
schedule and survey. Without holding evidentiary hearings, the
district court set the hourly rate at $150 in both cases. The
court cited opinions in prior cases in which Donahue had
represented plaintiffs in actions brought pursuant to the Housing
Act, and in which the court had set Donahue’s rate at $150 per
hour. This consolidated appeal followed.
II.
The reasonableness of an award of attorney’s fees is
reviewed pursuant to an “abuse of discretion” standard. See
Washington v. Philadelphia County Court of Common Pleas, 89 F.3d
1031, 1034 (3d Cir. 1996); Coleman v. Kaye, 87 F.3d 1491, 1509
(3d Cir. 1996), cert. denied, ___ U.S. ___, 117 S. Ct. 754 (1997);
Rode v. Dellarciprete, 892 F.2d 1177, 1182 (3d Cir. 1990). “[A]n
attorney’s marketplace billing rate is a factual question which
is subject to a clearly erroneous standard of review.”
Washington, 89 F.3d at 1035; see Student Pub. Interest Research
Group v. AT & T Bell Labs., 842 F.2d 1436, 1442 (3d Cir. 1988).
The question of whether the district court applied the
appropriate standards and procedures in determining attorney’s
fees is a legal question subject to plenary review. See
Washington, 89 F.3d at 1034-35; Keenan v. City of Philadelphia,
983 F.2d 459, 472 (3d Cir. 1992).
Generally, “a reasonable hourly rate is calculated according
to the prevailing market rates in the community.” Washington, 89
F.3d at 1035; see Blum v. Stenson, 465 U.S. 886, 895-96 n.11, 104
S. Ct. 1541, 1547 n.11 (1984). “[A] district court may not set
4
attorneys’ fees based upon a generalized sense of what is
customary or proper, but rather must rely upon the record.”
Coleman, 87 F.3d at 1510 (emphasis added); see Cunningham v. City
of McKeesport, 807 F.2d 49, 52-53 (3d Cir. 1986). The plaintiff
bears the burden of producing sufficient evidence of what
constitutes a reasonable market rate for the essential character
and complexity of the legal services rendered in order to make
out a prima facie case. See Washington, 89 F.3d at 1035. Once
the plaintiff has carried this burden, defendant may contest that
prima facie case only with appropriate record evidence. See id.
at 1036; Cunningham, 807 F.2d at 52-53. In the absence of such
evidence, the plaintiff must be awarded attorney’s fees at her
requested rate. See Washington, 89 F.3d at 1036; Cunningham, 807
F.2d at 52-53; Bell v. United Princeton Properties, Inc., 884
F.2d 713, 720 (3d Cir. 1989). If hourly rates are disputed, the
district court must conduct a hearing to determine the reasonable
market rates. See Coleman, 87 F.3d at 1510; Rode, 892 F.2d at
1183.
The PHA urges that the McKinley affidavit fails to establish
$210 as a reasonable hourly rate because the survey upon which it
is ultimately based is flawed.2 The McKinley affidavit is based
2
The PHA now contests the validity of the McKinley affidavit
on the additional ground that, while McKinley was never retained
by plaintiffs, she and Donahue worked for the same organization.
The Supreme Court has stated that “the fee applicant [must]
produce satisfactory evidence -- in addition to the attorney’s own
affidavits -- that the requested rates are in line with those
prevailing in the community for similar services by lawyers of
reasonably comparable skill, experience and reputation.” Blum v.
Stenson, 465 U.S. 886, 895 n.11, 104 S. Ct. 1541, 1547 n.11
(1984)(emphasis added); see also In re Olson, 884 F.2d 1415, 1423-
24 n.14 (D.C. Cir. 1989). Because the PHA did not raise this
5
in part on CLS’s hourly fee schedule, which in turn is based on a
survey of private firms in Philadelphia. The PHA argues that
this underlying survey is insufficient to establish $210 per hour
as a reasonable market rate for a Housing Act case insofar as the
survey fails to differentiate among different types of
litigation. Rather, the survey apparently establishes a single
schedule of rates for litigation involving such diverse matters
as employment discrimination, landlord-tenant law, criminal law,
corporate law, divorce law, and labor law. See Evans v.
Philadelphia Housing Auth., Civ. A. No. 93-5547, 1995 WL 154872,
at *3 (E.D. Pa. Mar. 31, 1995) (discussing same survey), aff’d
sub nom Smith v. Philadelphia Housing Auth., 79 F.3d 1139 (3d
Cir. 1996). Therefore, the PHA contends, the survey is
unreliable and cannot form the basis for the plaintiffs’ prima
facie case.
Our review is hampered both by the fact that the parties
have not included the survey as part of the record on appeal and
by the district court’s failure to address directly the survey
evidence. Rather, in Smith, the court simply stated:
This Court determines . . . that $150.00 per
hour, not $210.00 per hour, is a reasonable
rate. In reaching this conclusion, this
Court adopts the reasoning of four District
Court Judges in the Eastern District of
Pennsylvania, all of whom recently found
$150.00 per hour to be a reasonable rate for
Mr. Donahue’s services in representing
tenants in actions against the Philadelphia
Housing Authority and all of whom were
affirmed on appeal . . . .
issue
below, we decline to address it here.
6
Smith v. Philadelphia Housing Auth., No. 94-7284, slip op. at 5
(E.D. Pa. Feb. 15, 1996) (citing, inter alia, Evans, 1995 WL
154872; Clark v. Philadelphia Housing Auth., No. 93-4890, 1995 WL
129208 (E.D. Pa. Mar. 24, 1995), aff’d sub nom Smith v.
Philadelphia Housing Auth., 79 F.3d 1139 (3d Cir. 1996); Jenkins
v. Philadelphia Housing Auth., No. 94-5475, 1995 WL 105479 (E.D.
Pa. Mar. 10, 1995), aff’d sub nom Smith v. Philadelphia Housing
Auth., 79 F.3d 1139 (3d Cir. 1996); Smith v. Philadelphia Housing
Auth., No. 94-0147, 1994 WL 376874 (E.D. Pa. July 14, 1994)).
The Rivera court’s analysis was even more cursory, stating only
that Donahue’s “rate of $210 per hour for the type of services
rendered is excessive,” Rivera v. Philadelphia Housing Auth., No.
95-7658, slip op. at 1 (E.D. Pa. Apr. 19, 1996), and that “[t]he
court finds [$150 per hour to be] reasonable and consistent with
recent decisions by th[e] court which have rejected Mr. Donahue’s
requested rate.” Id. slip op. at 2 (citing Clark, 1995 WL
129208).
By contrast to the cases cited by the district court, the
plaintiffs cite a number of district court cases that have
accepted the CLS schedule. See, e.g., Rainey v. Philadelphia
Housing Auth., 832 F. Supp. 127, 129 (E.D. Pa. 1993); Swaayze v.
Philadelphia Housing Auth., Civ. A. No. 91-2982, 1992 WL 81598,
at *2 (E.D. Pa. Apr. 16, 1992); Higgins v. Philadelphia Gas
Works, 54 B.R. 928, 938 (E.D. Pa. 1985).
We decline to address whether the CLS schedule and the
survey that undergirds it are sufficiently reliable and adequate
given that this issue was not addressed by the district court in
7
the first instance. As this Court recently reaffirmed, “[t]he
matter of an attorney’s marketplace billing rate is a factual
question.” Washington, 89 F.3d at 1035. The district court may
not dispose of such a factual question “based upon a generalized
sense of what is customary or proper, but rather must rely upon
the record.” Coleman, 87 F.3d at 1510. By simply relying on the
hourly rate set by the court for Mr. Donahue in previous cases in
which he has appeared, the district court failed to exercise its
responsibility, as set forth by us most recently in Washington
and Coleman, to settle upon a reasonable hourly rate based solely
upon a factual record. We therefore will remand these matters so
that the district court in each case may construct an adequate
record to justify an award of attorney’s fees at a particular
rate.
On remand, the district court should determine whether the
plaintiffs have submitted sufficient evidence to establish a
prima facie case. The answer to this question will in large part
hinge on whether the CLS fee schedule, and the underlying survey,
are sufficiently reliable to form the basis of McKinley’s
affidavit testimony. See FED. R. EVID. 703; In re Paoli R.R. Yard
PCB Litig., 35 F.3d 717, 747-49 (3d Cir. 1994), cert. denied, ___
U.S. ___, 115 S. Ct. 1253 (1995). Plaintiffs will have the
opportunity to submit any additional evidence they believe to be
appropriate. The PHA may continue to rely simply on its
contention that the plaintiff’s evidence is insufficient to
establish a prima facie case that $210 is a reasonable hourly
fee, and rest solely on “answers or briefs”. Bell, 884 F.2d at
8
720. Alternatively, it may choose to supplement this legal
argument by adducing evidence to dispute the affidavit testimony
submitted by the plaintiffs. If the PHA raises a factual issue
as to the reasonableness of Donahue’s requested rate, it “must
introduce [evidence] upon which the challenge is based.” Id.
(emphasis added).3
III.
For the foregoing reasons, the judgments of the district
court will be vacated and these matters remanded for further
proceedings consistent with this opinion.
Costs taxed against appellees.
3
We express no opinion as to whether $150 or $210, or some
other figure, represents a reasonable hourly billing rate for Mr.
Donahue’s services in this matter.
9