Eastern Associated Coal Corp. v. Director, Office of Workers' Compensation Programs , 724 F.3d 561 ( 2013 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 11-2038
EASTERN ASSOCIATED COAL CORPORATION,
Petitioner,
v.
DIRECTOR, OFFICE OF WORKERS’ COMPENSATION PROGRAMS; HAROLD
GOSNELL,
Respondents.
No. 11-2380
EASTERN ASSOCIATED COAL CORPORATION, LLC,
Petitioner,
v.
DIRECTOR, OFFICE OF WORKERS’ COMPENSATION PROGRAMS, UNITED
STATES DEPARTMENT OF LABOR; HAROLD GOSNELL,
Respondents.
On Petitions for Review of Orders of the Benefits Review Board.
(11-0131-BLA; 10-0384-BLA)
Argued: May 14, 2013 Decided: July 31, 2013
Before WILKINSON, GREGORY, and KEENAN, Circuit Judges.
Affirmed as modified by published opinion. Judge Keenan wrote
the opinion, in which Judge Wilkinson and Judge Gregory joined.
ARGUED: Laura Metcoff Klaus, GREENBERG TRAURIG LLP, Washington,
D.C., for Petitioner. Ryan Christopher Gilligan, WOLFE,
WILLIAMS, RUTHERFORD & REYNOLDS, Norton, Virginia, for
Respondents. ON BRIEF: Mark E. Solomons, GREENBERG TRAURIG
LLP, Washington, D.C., for Petitioner. Joseph E. Wolfe, WOLFE,
WILLIAMS, RUTHERFORD & REYNOLDS, Norton, Virginia, for
Respondents.
2
BARBARA MILANO KEENAN, Circuit Judge:
In this appeal, we consider a former employer’s challenges
to attorneys’ fees and other related fees awarded under the
Black Lung Benefits Act (the BLBA), 30 U.S.C. §§ 901 through
945. After Harold Gosnell, the claimant, was awarded black lung
benefits, claimant’s counsel successfully petitioned the
administrative law judge (the ALJ) for an award of recoverable
fees. The Benefits Review Board (the BRB) affirmed the ALJ’s
fee award and also awarded certain fees for additional work
performed before the BRB.
We consider the issue whether the awards of attorneys’ fees
properly reflected market-based evidence of counsel’s hourly
rate, as required by the lodestar analysis in Hensley v.
Eckerhart, 461 U.S. 424 (1983). We also address whether the
practice of quarter-hour billing by claimant’s counsel resulted
in an excessive number of hours billed in this case. Upon our
review, we hold that neither the ALJ nor the BRB abused its
discretion in concluding that counsel provided sufficient
market-based evidence of rates, and that the number of hours
billed for attorneys’ services reasonably reflected the work
completed. However, we further hold that the award of fees for
work performed by certain legal assistants was not supported
fully by the record, and we modify that award accordingly. We
3
therefore affirm the attorneys’ fee awards entered in this case,
and modify the fees awarded for legal assistant services.
I.
In 2005, the claimant filed a claim for benefits under the
BLBA against his former employer, Eastern Associated Coal
Corporation (Eastern). The claimant, who was a coal miner for
seventeen years, had developed a mass on his right lung that
required medical treatment. The medical evidence introduced in
this proceeding addressed the issue whether the claimant
suffered from “unilateral” complicated coal workers’
pneumoconiosis, i.e., black lung disease affecting only one
lung. Among other evidence bearing on the question, the two
radiologists who offered expert testimony reached contrary
conclusions on this unusual issue. Dr. William Scott explained
that the incidence of pneumoconiosis in only one lung would be
“incredibly atypical,” and concluded that the mass in the
claimant’s right lung was not pneumoconiosis but rather likely
resulted from an infection. Dr. Kathleen DePonte agreed that in
the “classic” case, pneumoconiosis would affect both lungs, but
she nevertheless opined that the claimant suffered from
complicated coal workers’ pneumoconiosis.
In 2010, the ALJ found that the claimant suffered from
complicated coal workers’ pneumoconiosis and awarded him
4
benefits under the BLBA. The benefits award is not at issue in
this case.
The law firm representing the claimant, Wolfe, Williams,
Rutherford & Reynolds (claimant’s counsel), later filed a
petition for attorneys’ fees, seeking $35,953.75 for work
relating to the proceedings before the ALJ. 1 In support of the
petition, claimant’s counsel stated the years of experience and
the hourly rates of the various attorneys who had worked on the
case. The petition represented that Joseph Wolfe had over
thirty years’ experience and charged $300 per hour for his
services; that Bobby Belcher had sixteen years’ experience and
charged $250 per hour; and that W. Andrew Delph and Ryan
Gilligan each had several years’ experience and charged $200 and
$175 per hour, respectively.
Claimant’s counsel stated that it knew of “no other firms
in Virginia and very few across the nation” that accept new
black lung cases. Counsel further represented that black lung
claimants ultimately are awarded benefits in only five percent
of cases.
1
This figure included over $1,000 in attorneys’ fees sought
by claimant’s counsel to revise the fee petition, which the ALJ
disallowed. Separately, claimant’s counsel sought over $11,000
in expenses in the fee petition to the ALJ. The ALJ ultimately
awarded about $2,300 of these requested expenses. Neither of
these decisions is challenged on appeal.
5
Of central importance to this appeal, claimant’s counsel
also submitted for the ALJ’s consideration a list of twenty-one
prior fee awards issued in black lung cases handled by
claimant’s counsel. These awards had been made by seven
different ALJs, all within several years of the present fee
awards.
Claimant’s counsel also submitted to the ALJ the Altman
Weil Survey of Law Firm Economics (2006) (the Altman Weil
Survey), which showed hourly rates for attorneys with varying
degrees of experience in the “South Atlantic” and “Middle
Atlantic” regions. Claimant’s counsel additionally attached an
itemized billing statement describing work done for the claimant
in proceedings before the ALJ between February 2007 and March
2010.
In the petition, claimant’s counsel similarly sought fees
for work done by certain legal assistants at an hourly rate of
$100. Claimant’s counsel stated that $100 per hour was the
firm’s “customary billing rate” for legal assistants in black
lung cases. But significantly, counsel did not provide any
information regarding market rates for legal assistants, either
in its list of prior fee awards or in the excerpt submitted from
the Altman Weil Survey.
In October 2010, the ALJ issued an award of attorneys’ fees
to claimant’s counsel. The ALJ first considered the hourly
6
rates requested by claimant’s counsel, and found that there was
sufficient evidence submitted of reasonable, prevailing hourly
rates based on “multiple and consistent awards by diverse
judges” over the previous four years. The ALJ found that the
hourly rates listed in the Altman Weil Survey for the South
Atlantic region also supported the hourly rates sought, given
the nature of counsel’s practice representing “black lung
claimants [] over a broad region in Virginia and West Virginia.”
The ALJ additionally found that the hourly rate requested for
work performed by legal assistants was appropriate.
Accordingly, the ALJ approved the hourly rates requested.
Next, the ALJ considered whether the billed amount of
168.95 hours was reasonable. The ALJ disagreed with Eastern’s
argument that claimant’s counsel necessarily had billed an
excessive amount by using a quarter-hour billing system. The
ALJ explained that quarter-hour billing was permitted under 20
C.F.R. § 802.203(d)(3) and, thus, that the use of such billing
increments was not unreasonable per se. After examining the
billing statement submitted by claimant’s counsel, the ALJ
disallowed various charges for clerical tasks and several other
charges for tasks that were found to be either duplicative or
unnecessary. In all, the ALJ reduced the number of billed hours
by about thirty, and awarded claimant’s counsel $31,628.75 in
attorneys’ fees rather than the amount of $35,953.75 originally
7
sought. The amount awarded by the ALJ included $3,675 for work
performed by legal assistants. On review, the BRB affirmed the
ALJ’s award of attorneys’ fees, concluding that the ALJ did not
abuse his discretion either with respect to the hourly rates or
to the number of hours awarded.
Claimant’s counsel filed an additional fee petition to the
BRB, seeking $3,675 for work performed primarily by attorneys
Wolfe and Gilligan during the claimant’s appeal. The supporting
documentation incorporated the information presented in the
attorneys’ fees petition to the ALJ, including citation to the
twenty-one prior fee awards, a description of the experience of
claimant’s counsel, and portions of the Altman Weil Survey. The
primary difference in the submission to the BRB was that
claimant’s counsel requested an hourly rate of $225 for
Gilligan, rather than the $175 rate used in the petition before
the ALJ. Claimant’s counsel also sought compensation for work
performed by legal assistants at an hourly rate of $100.
In October 2011, the BRB granted the petition in part. The
BRB determined that the prevailing market rate for Wolfe was
$300 per hour, but concluded that Gilligan’s market rate was
only $175 per hour based on two prior fee awards. 2 The BRB also
2
The BRB noted that in the future Gilligan might be able to
establish a higher market rate, but concluded that in this case
(Continued)
8
approved an hourly rate of $100 for legal assistants. After
making adjustments to the number of hours reasonably expended,
the BRB awarded claimant’s counsel $2,950 in attorneys’ fees.
This total amount awarded by the BRB included $125 for services
performed by a legal assistant.
Eastern timely filed appeals seeking review of the fee
awards issued by the ALJ and the BRB (the agency adjudicators).
Those appeals were consolidated in this Court.
II.
Eastern raises two challenges to the fee awards: (1) that
claimant’s counsel did not provide sufficient market-based
evidence of an hourly rate, which was necessary for calculation
of an applicable lodestar figure; and (2) that claimant’s
counsel requested an excessive number of hours as a result of
its practice of quarter-hour billing. Eastern asks that we
vacate the fee awards and remand for fee determinations
reflecting “only reasonable hours at a market rate.”
Before turning to address Eastern’s arguments, we first
discuss the legal framework governing awards of attorneys’ fees
under the BLBA. We review for abuse of discretion an award of
claimant’s counsel only had “provided sufficient evidence of a
market rate of $175.”
9
attorneys’ fees made under the BLBA, whether determined by an
ALJ or by the BRB. Kerns v. Consol. Coal Co., 176 F.3d 802, 804
(4th Cir. 1999). An ALJ and the BRB are afforded wide latitude
in crafting an appropriate award of attorneys’ fees because they
are much better situated than an appellate court to make this
determination in the first instance. See Westmoreland Coal Co.
v. Cox, 602 F.3d 276, 288 (4th Cir. 2010) (noting the broad
discretion afforded an ALJ in calculating a fee award); Zeigler
Coal Co. v. Dir., OWCP, 326 F.3d 894, 902 (7th Cir. 2003)
(recognizing that an ALJ is in a “much better position than the
appellate court” to determine the “reasonableness of time spent
by a lawyer on a particular task in the course of litigation”)
(citation omitted). We apply the same deferential standard in
our review of an award of other legal fees under the BLBA,
including those incurred for the services of legal assistants.
See Uphoff v. Elegant Bath, Ltd., 176 F.3d 399, 407-09 (7th Cir.
1999). However, on appeal, we review more closely any
challenges relating to the criteria used by agency adjudicators
in fashioning such awards. See Newport News Shipbuilding & Dry
Dock Co. v. Holiday, 591 F.3d 219, 226 (4th Cir. 2009) (citing
Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169, 174 (4th
Cir. 1994)). In sum, an award of attorneys’ fees and related
fees will be upheld unless “arbitrary, capricious, an abuse of
10
discretion, or contrary to law.” Cox, 602 F.3d at 282 (citing
Kerns, 176 F.3d at 804).
A.
Under the BLBA, a miner who is totally disabled as a result
of pneumoconiosis is entitled to benefits. 30 U.S.C. § 921(a);
Cox, 602 F.3d at 282. Benefits may be awarded in contested
cases after adjudication at the Department of Labor by a deputy
commissioner, or on appeal to an ALJ, the BRB, or a federal
court of appeals. U.S. Dep’t of Labor v. Triplett, 494 U.S.
715, 717 (1990).
Although litigants generally must pay their own attorneys’
fees in the absence of explicit statutory authorization, Key
Tronic Corp. v. United States, 511 U.S. 809, 814-15 (1994),
Congress has provided a fee-shifting mechanism for use in black
lung cases. Counsel for a successful black lung claimant is
entitled to an award of attorneys’ fees under the BLBA, 30
U.S.C. § 932(a), which incorporates by reference Section 28 of
the Longshore and Harbor Workers’ Compensation Act (the LHWCA),
33 U.S.C. § 928. An award of attorneys’ fees is “mandatory” in
such cases, Day v. James Marine, Inc., 518 F.3d 411, 414 (6th
Cir. 2008), and private fee agreements between attorneys and
prospective black lung claimants are generally prohibited and
may result in the imposition of criminal penalties. 33 U.S.C. §
928(e); see also 20 C.F.R. § 802.203(f); Triplett, 494 U.S. at
11
718 (stating that the LHWCA “prohibits an attorney from
receiving a fee-whether from the employer, insurer, or [Black
Lung] Trust Fund, or from the claimant himself-unless approved
by the appropriate agency or court”).
In this case, the claimant was successful in his claim for
benefits under the BLBA. An attorney for a successful claimant
in a BLBA proceeding is entitled to “reasonable attorney’s
fee[s].” 33 U.S.C. § 928(a). This term is not defined by
statute. The party seeking attorneys’ fees has the burden of
proving that the rate claimed and the hours worked are
reasonable. Hensley, 461 U.S. at 433; Holiday, 591 F.3d at 227.
The “lodestar” analysis provided in Hensley is the starting
point for calculating an award of reasonable attorneys’ fees. 3
461 U.S. at 433. A lodestar amount is determined by multiplying
“a reasonable hourly rate” by “the number of hours reasonably
expended on the litigation.” 4 Id. The lodestar amount is
presumptively reasonable, and is presumed to be “sufficient to
3
Principles construing what constitutes a “reasonable fee”
apply uniformly to federal fee-shifting statutes. See City of
Burlington v. Dague, 505 U.S. 557, 562 (1992).
4
As with other federal fee-shifting statutes, we apply the
lodestar analysis to determine an award of reasonable attorneys’
fees under 33 U.S.C. § 928(a). Holiday, 591 F.3d at 227 & n.8
(“[t]he LHWCA’s fee-shifting requirement compels us to adopt a
lodestar analysis for the BRB’s fee determinations”); B & G
Mining, Inc. v. Dir., OWCP, 522 F.3d 657, 663 (6th Cir. 2008)
(“the lodestar method is the appropriate starting point for
calculating fee awards under the [BLBA]”).
12
induce a capable attorney to undertake the representation” of a
meritorious case under the statutory fee-shifting scheme.
Perdue v. Kenny A., 559 U.S. 542, ___, 130 S. Ct. 1662, 1672-73
(2010).
After the lodestar amount is calculated, however, the court
or agency adjudicator may adjust that figure based on
consideration of other factors. See Blanchard v. Bergeron, 489
U.S. 87, 94 (1989). In that regard, the Department of Labor has
provided regulatory guidance on considerations relevant to the
determination of an award of attorneys’ fees in black lung
benefits cases. The pertinent regulation provides, in material
part:
Any fee approved . . . shall be reasonably
commensurate with the necessary work done and shall
take into account the quality of the representation,
the qualifications of the representative, the
complexity of the legal issues involved, the level of
proceedings to which the claim was raised, the level
at which the representative entered the proceedings,
and any other information which may be relevant to the
amount of fee requested.
20 C.F.R. § 725.366(b). Thus, we also consider these factors in
conjunction with the lodestar methodology. We observe, however,
that to the extent that any of these factors already has been
incorporated into the lodestar analysis, we do not consider that
factor a second time. Such double-counting would distort the
13
proper weight to be accorded those factors. 5 See Perdue, 130 S.
Ct. at 1673.
The BLBA also allows compensation for the services of legal
assistants in cases involving a successful claimant. See 20
C.F.R. § 725.366; 20 C.F.R. § 802.203; see also Missouri v.
Jenkins, 491 U.S. 274, 285 (1989) (noting the “self-evident
proposition that the ‘reasonable attorney’s fee’ provided for by
statute [under 42 U.S.C. § 1988] should compensate the work of
paralegals, as well as that of attorneys”). Claimant’s counsel
had the burden of justifying the hourly rates for such legal
assistants. See Role Models Am., Inc. v. Brownlee, 353 F.3d
962, 969-70 (D.C. Cir. 2004). The regulations provide that the
rate awarded by the BRB for such services “shall be based on
what is reasonable and customary in the area where the services
5
Courts also have cited for consideration twelve factors
originally articulated in Johnson v. Georgia Highway Express,
Inc., 488 F.2d 714, 717-19 (5th Cir. 1974). These twelve
factors are: “(1) the time and labor required; (2) the novelty
and difficulty of the questions; (3) the skill requisite to
perform the legal service properly; (4) the preclusion of
employment by the attorney due to acceptance of the case; (5)
the customary fee; (6) whether the fee is fixed or contingent;
(7) time limitations imposed by the client or the circumstances;
(8) the amount involved and the results obtained; (9) the
experience, reputation, and ability of the attorneys; (10) the
‘undesirability’ of the case; (11) the nature and length of the
professional relationship with the client; and (12) awards in
similar cases.” Hensley, 461 U.S. at 429-30 n.3 (citing
Johnson, 488 F.2d at 717-19). However, consideration of these
factors likewise is subject to the Supreme Court’s admonition
regarding double-counting. Perdue, 130 S. Ct. at 1673.
14
were rendered for a person of that particular professional
status.” 6 20 C.F.R. § 802.203(d)(4).
We further observe that neither party before us has argued
that a different methodology should be applied in the present
case for assessing the appropriate hourly rate for work
performed by the legal assistants. Cf. Jenkins, 491 U.S. at
286-88 (explaining that legal assistant time could be billed
separately at market rates if it is the prevailing practice in a
given community, but “[i]f it is the practice in the relevant
market not to do so, or to bill the work of [legal assistants]
only at cost, that is all that [the attorneys’ fee provision]
requires”). We therefore review the agency adjudicators’
determinations of legal assistants’ hourly rates for compliance
with the applicable regulations and an assessment whether the
rates awarded were based upon a prevailing market rate.
B.
We address Eastern’s challenges to both elements of the
lodestar amount, namely, the reasonableness of the hourly rates
and the number of hours reasonably expended. We first consider
Eastern’s argument that the ALJ and the BRB abused their
discretion by fixing claimant’s counsel’s hourly rates without
6
The Secretary of Labor has interpreted Section 725.366 in
a manner that is wholly compatible with the lodestar analysis.
See Nat’l Mining Ass’n v. Dep’t of Labor, 292 F.3d 849, 874-75
(D.C. Cir. 2002).
15
considering the prevailing market rate for their legal services.
While acknowledging the statutory prohibition on private fee
agreements for black lung claimants, Eastern nevertheless
contends that the agency adjudicators were required to determine
a reasonable hourly rate for claimant’s counsel based on the
rates in the relevant community charged by lawyers of
“comparable skill, experience, and reputation.” See Blum v.
Stenson, 465 U.S. 886, 895 n.11 (1984). Thus, according to
Eastern, the agency adjudicators should have considered what
“fee-paying clients actually pay for this type of work in
Norton, Virginia,” a small community in Virginia where
claimant’s counsel has an office. Eastern further suggested at
oral argument that regional hourly rates of attorneys in social
security cases, criminal cases, or civil disputes could provide
the necessary market-based evidence.
Eastern also challenges the agency adjudicators’ reliance
on prior attorneys’ fee awards as evidence of the prevailing
market rate. Eastern argues that prior fee awards can serve as
evidence of a market rate only when the awards themselves are
shown to have been “based on a market analysis.” Additionally,
Eastern contends that the other evidence relied on by the agency
adjudicators to determine a reasonable hourly rate, namely, the
Altman Weil Survey, was insufficient to determine market rates
in this case. We disagree with Eastern, and conclude that the
16
agency adjudicators properly determined reasonable hourly rates
for claimant’s counsel.
In addition to supporting affidavits, an applicant seeking
an award of attorneys’ fees must submit “satisfactory specific
evidence of the prevailing market rates in the relevant
community for the type of work for which he seeks an award.”
Plyler v. Evatt, 902 F.2d 273, 277 (4th Cir. 1990) (citation and
internal quotation marks omitted). The determination of a
traditional “market rate” is especially problematic in the
context of claims brought under the BLBA and the LHWCA, in view
of their general prohibition of fee agreements between counsel
and prospective claimants. See 33 U.S.C. § 928(e); 20 C.F.R. §
802.203(f); Cox, 602 F.3d at 290 (observing that “[t]he highly
regulated markets governed by fee-shifting statutes are
undoubtedly constrained and atypical”). However, despite such
difficulties, a prevailing market rate still must be determined
in BLBA and LHWCA cases before the relevant agency adjudicator
may decide an attorney’s reasonable hourly rate. Cox, 602 F.3d
at 290; see also Blum, 465 U.S. at 895 (holding that “reasonable
fees” must be “calculated according to the prevailing market
rates in the relevant community, regardless of whether plaintiff
is represented by private or non-profit counsel”).
Although Eastern challenges the reliability of prior fee
awards as evidence of a prevailing market rate, our precedent
17
plainly permits consideration of such documentation. Under that
precedent, prior fee awards constitute evidence of a prevailing
market rate that may be considered in fee-shifting contexts,
including those prescribed by the BLBA and the LHWCA.
In a recent appeal of a fee award made under the LHWCA, the
provisions of which are applicable in BLBA cases, we recognized
that an agency adjudicator “generally can look to previous
awards in the relevant marketplace as a barometer for how much
to award counsel in the immediate case.” Holiday, 591 F.3d at
228 (citation omitted). Indeed, we have held that “[e]vidence
of fee awards in comparable cases is generally sufficient to
establish the prevailing market rates in the relevant
community.” 7 Newport News Shipbuilding & Dry Dock Co. v. Brown,
376 F.3d 245, 251 (4th Cir. 2004) (internal quotation marks
omitted) (citing Spell v. McDaniel, 824 F.2d 1380, 1402 (4th
Cir. 1987)).
Of course, prior fee awards do not themselves actually set
the market rate. B & G Mining, Inc. v. Dir., OWCP, 522 F.3d
657, 664 (6th Cir. 2008) (recognizing that “rates awarded in
7
Eastern’s attempt to distinguish Brown on the basis that
the employer “did not dispute the rates claimed” has no merit.
Indeed, the hourly rate was contested by the employer “largely
because the attorney’s hourly rate of $225.00 [was] excessive,”
while the claimant in turn argued that the hourly rate was
reasonable, “cit[ing] several recent orders in which
administrative law judges and the Board have allowed him an
hourly rate of $225.00 in LHWCA cases.” Brown, 376 F.3d at 251.
18
other cases do not set the prevailing market rate-only the
market can do that”). However, such fee awards do provide
“inferential evidence” of the prevailing market rate. Id. In
cases such as the present one, in which there is no lawful
billing rate, the prevailing market rate should be determined
with reference to “the next best evidence,” which includes,
among other things, “evidence of fee awards the attorney has
received in similar cases.” See Spegon v. Catholic Bishop of
Chi., 175 F.3d 544, 555 (7th Cir. 1999). Thus, in this respect,
prior fee awards may serve as a “barometer” of the prevailing
market rate. Holiday, 591 F.3d at 228.
The reasonable hourly rate ultimately used in the lodestar
calculation depends on the prevailing market rate “in the
relevant community for the type of work for which [claimant’s
counsel] seeks an award.” Plyler, 902 F.2d at 277 (citation and
internal quotation marks omitted). Thus, the greater the
similarity in the work, the more relevant the hourly rate is to
a determination of the prevailing market rate.
The ALJ and the BRB certainly were not limited to
consideration of prior fee awards made in black lung cases.
Cox, 602 F.3d at 290 (noting that “other administrative
proceedings of similar complexity would also yield instructive
information” about the prevailing market rate). However, it is
unsurprising that, all other things being equal, the most
19
reliable indicator of prevailing market rates in a black lung
case will be evidence of rates allowed in other black lung
cases, rather than rates in general civil litigation, or, as
suggested by Eastern, criminal defense work. 8
Here, the agency adjudicators considered evidence of prior
fee awards for the same type of work done by the same attorneys.
Given the absence of private fee agreements in black lung cases,
such prior fee awards undoubtedly qualify as one category of the
“next best evidence” of a prevailing market rate. See Spegon,
175 F.3d at 555; see also B & G Mining, 522 F.3d at 664.
Moreover, a party that argues that the best available evidence
of a market rate was not offered must clearly demonstrate that
the adjudicator abused its discretion in assessing the strength
of the evidence presented. See Kerns, 176 F.3d at 804(providing the standard of review). Eastern has not shown such
an abuse of discretion.
Notwithstanding this fact, we emphasize that prior fee
awards are not controlling authority establishing a prevailing
market rate for later cases. Were that the case, the hourly
8
Considerations other than the underlying nature of the
work ultimately may be significant in determining a prevailing
market rate. For example, we do not discount the possibility
that evidence of hourly rates for slightly different work in a
market locality or region could be more reliable evidence of a
prevailing market rate than identical work performed in a
distant market.
20
rates of attorneys could be predetermined by erroneous prior
awards, or lose the capacity to respond to changing market
conditions. See Farbotko v. Clinton Cnty. of N.Y., 433 F.3d
204, 209 (2d Cir. 2005) (observing that “[r]ecycling rates
awarded in prior cases without considering whether they continue
to prevail may create disparity between” compensation available
under a fee-shifting scheme and that which is available in the
market); Dillard v. City of Greensboro, 213 F.3d 1347, 1355
(11th Cir. 2000) (recognizing the “inferential evidentiary
value” of prior awards but cautioning against giving them
“controlling weight” over “superior evidence”). At the heart of
the requirement that hourly rates be based on market indicators
is “the ability of an attorney to [establish] a reasonable
hourly rate with reference to what other attorneys earn for
similar services,” even when, as here, the market is difficult
to define. See Holiday, 591 F.3d at 227. Application of this
principle thereby ensures that attorneys have an incentive to
take cases brought under fee-shifting statutes. See Perdue, 130
S. Ct. at 1672-73 (“the lodestar method yields a fee that is
presumptively sufficient” to “induce a capable attorney to
undertake the representation”).
Eastern relies heavily on our recent opinion in Cox to
argue that claimant’s counsel has not submitted sufficient
market-based evidence to support the fee awards. Eastern’s
21
reliance on Cox is understandable on a superficial level
because, in that case, we reversed an award of attorneys’ fees
to the very same attorneys involved in this case. Notably,
however, the claimant’s counsel in that case did not proffer
evidence of prior fee awards received in similar cases. See
Cox, 602 F.3d at 288-90.
Instead, claimant’s counsel in Cox offered only the
following submissions to support the asserted prevailing market
rate: (1) the Altman Weil Survey; (2) counsel’s assertion that
he “knew of no other attorneys who currently handle black lung
work in Virginia or take new cases”; (3) the low rates of
success in black lung litigation; and (4) the contingent nature
of the attorneys’ fees. 602 F.3d at 289. Based on those
submissions, we held that claimant’s counsel did not establish a
prevailing market rate. Id. at 290. In reaching this
conclusion, we noted that there was a “range of sources” from
which counsel could have drawn to support the petition for
attorneys’ fees, including, for example, “evidence of the fees
[claimant’s counsel] has received in the past,” affidavits of
other lawyers “who are familiar both with the skills of the fee
applicants and more generally with the type of work in the
relevant community,” and hourly rates in “other administrative
22
proceedings of similar complexity.” 9 Id. (emphasis added)
(citations and internal quotation marks omitted).
In the present case, by providing inferential evidence of
their prevailing market rates drawn from numerous prior fee
awards, claimant’s counsel has remedied the major evidentiary
deficiency identified in Cox. Claimant’s counsel have supported
their petition for attorneys’ fees with information regarding
fee awards from prior black lung cases, including twenty-one
cases in which Wolfe was awarded fees of $300 per hour, eight
cases in which Belcher was awarded between $200 and $250 per
hour, eleven cases in which Delph was awarded between $150 and
$200 per hour, and three cases in which Gilligan was awarded
between $125 and $175 per hour. 10 These awards of attorneys’
fees were issued by seven different ALJs and all were issued
within a few years of counsel’s fee petition filed in this case.
We agree with the ALJ that the “multiple and consistent awards
9
We also explained that, because a prevailing market rate
is “presumed to incorporate considerations of risk of loss,” it
would be “duplicative” to increase counsel’s hourly rate above
the prevailing market rate to account for risk of loss in the
black lung context. Cox, 602 F.3d at 290; see also B & G
Mining, 522 F.3d at 666 (same).
10
Eastern is correct that the fee award that we vacated in
Cox was among those cited by claimant’s counsel in support of
its fee petition. However, our analysis is not altered by the
exclusion of that one fee award from the substantial evidence of
prevailing market rates established by the twenty remaining
prior fee awards.
23
by diverse judges” shown in the submission by claimant’s counsel
constituted specific evidence of the prevailing market rates for
those counsel. See Cox, 602 F.3d at 290.
We observe that claimant’s counsel did not include in the
record submitted to the ALJ or the BRB the actual awards
reflecting such rates. The better practice surely would have
been for counsel to attach such documentation to its fee
petitions, especially when, as here, the prior fee awards were
not readily accessible. In marginal cases, a failure to provide
such documentation could undermine counsel’s showing of a
prevailing market rate. 11 In this case, however, claimant’s
counsel made representations, which Eastern did not dispute,
about the rates fixed in those prior awards. Moreover, the ALJ
was familiar with and reviewed prior fee awards he personally
had rendered in several cases cited by claimant’s counsel. See
Spell, 824 F.2d at 1402 (holding that the prevailing market rate
can be established with reference to “information concerning
recent fee awards by courts in comparable cases”).
11
Contrary to Eastern’s arguments, Cox did not render all
preceding fee awards without evidentiary value unless the
relevant agency adjudicator independently inquires into the
evidence and analysis underlying that prior award to ensure it
too followed applicable law. See Cox, 602 F.3d at 287-91.
Here, given the evidence submitted by claimant’s counsel
pertaining to the prior attorneys’ fee awards as well as other
support for counsel’s prevailing market rates, we are not
presented with a marginal case, much less a case requiring us to
find an abuse of discretion.
24
In sum, the ALJ’s determination of prevailing market rates
for attorneys was supported by the multiple prior fee awards and
was consistent with the rates cited in the Altman Weil Survey
for attorneys in the region with the same amount of experience. 12
Therefore, we conclude that the ALJ did not abuse his discretion
in determining the prevailing market rates to be applied to the
services of claimant’s counsel, and that the BRB did not err in
affirming that award on appeal.
We further hold that the BRB did not abuse its discretion
in its calculation of reasonable hourly rates for claimant’s
counsel in the second fee petition. The BRB, like the ALJ,
found that Wolfe’s reasonable hourly rate was $300 per hour.
And the BRB took a prudent approach by rejecting Gilligan’s
request for $225 per hour as unsupported by the evidence, while
acknowledging that in a future case he might be able to
establish a market rate greater than the $175 per hour he
received in prior fee awards. Accordingly, we discern no abuse
12
We held in Cox that the evidence submitted was
insufficient to establish a prevailing market rate, and did not
hold, as Eastern suggests, that reliance on the Altman Weil
Survey was per se improper. See 602 F.3d at 288-91. While the
generality of the Altman Weil Survey renders it of limited value
in establishing a prevailing market rate, nevertheless, the ALJ
and the BRB did not abuse their discretion by considering the
Survey in the present case along with the other evidence
submitted by claimant’s counsel.
25
of discretion with respect to the hourly rates for counsel
determined by the BRB.
We further conclude, however, that the agency adjudicators
abused their discretion by determining a prevailing market rate
of $100 per hour for the services rendered by the legal
assistants employed in this case. While claimant’s counsel
provided evidence of the legal assistants’ training, education,
and experience, counsel did not submit any evidence to support a
prevailing market rate for the work of those legal assistants.
Nor did the information about the twenty-one fee awards provided
by claimant’s counsel address the hourly rates that were awarded
to legal assistants in those prior cases. Notwithstanding this
fact, however, Eastern submitted evidence on its own behalf of
numerous prior fee awards in black lung cases in which legal
assistants employed by claimant’s counsel were awarded fees
based on an hourly rate of $50.
Given the absence of evidence in the record to support a
market rate of $100 on this record, we are left only with the
evidence of an hourly rate of $50 provided by Eastern.
Therefore, we reduce the hourly rate for the legal assistants
from $100 to $50 per hour. In all other respects, we discern no
26
abuse of discretion in the hourly rates awarded by the ALJ or
the BRB. 13
C.
Eastern also challenges the decisions of the ALJ and the
BRB approving claimant’s counsel’s submission of hours billed in
13
We also reject Eastern’s argument that the ALJ and the
BRB violated portions of the Administrative Procedure Act, 5
U.S.C. §§ 701 through 706, by relying on prior fee awards as
evidence of a prevailing market rate, when the awards themselves
were not in the record. It is commonplace for courts in various
fee-shifting contexts to “take judicial notice of prior
judgments and [] use them as prima facie evidence of the facts
stated in them.” See B & G Mining, 522 F.3d at 664 n.2 (quoting
Mike’s Train House, Inc. v. Lionel, LLC, 472 F.3d 398, 412 (6th
Cir. 2006)); Patterson v. Balsamico, 440 F.3d 104, 124 (2d Cir.
2006) (directing district court to consider other evidence of a
prevailing market rate as well as “taking judicial notice of
rates awarded in prior cases,” for 42 U.S.C. § 1988 fee
petition). This practice does not violate the APA. B & G
Mining, 522 F.3d at 664 n.2.
Moreover, there is no indication that the prior fee awards
at issue in this case were not publicly available. And, in any
event, claimant’s counsel offered to provide copies of the prior
awards upon request. Therefore, while the better practice would
have been for claimant’s counsel to have presented documentation
of the prior fee awards, Eastern has not shown that it was
prejudiced by the agency adjudicators’ reliance on prior fee
awards that were not made a part of the record.
Additionally, we disagree with Eastern’s argument that the
ALJ failed to comply with the duty of explanation under the APA,
because the ALJ did not distinguish a few prior fee awards
submitted by Eastern awarding lower hourly rates. See 5 U.S.C.
§ 557(c). The ALJ was not required to address specifically each
contrary fee award, and, because we “can discern what the ALJ
did and why he did it, the duty of explanation is satisfied.”
See Piney Mt. Coal Co. v. Mays, 176 F.3d 753, 762 n.10 (4th Cir.
1999) (citation and internal quotation marks omitted).
27
quarter-hour increments. Eastern argues that the agency
adjudicators erred by summarily approving the use of quarter-
hour billing solely because 20 C.F.R. § 802.203(d)(3) permits
such incremental billing. Eastern contends that, instead, the
adjudicators were required to assess whether claimant’s counsel
properly had exercised “billing judgment,” and to exclude
“excessive, redundant, or otherwise unnecessary” hours. See
Hensley, 461 U.S. at 434. Thus, Eastern urges us to hold that
the agency adjudicators abused their discretion by awarding the
requested hours in the absence of “proof that it took fifteen
minutes to perform each and every task alleged.” We decline
Eastern’s request, which would impose undue burdens not required
by law.
We first observe, however, that we already have recognized
that the practice of quarter-hour billing may lead to
overbilling. See Broyles v. Dir., OWCP, 974 F.2d 508, 510-11
(4th Cir. 1992) (expressing concern with quarter-hour billing
after identifying examples of tasks we concluded could not
reasonably have taken fifteen minutes to accomplish); Yellowbook
Inc. v. Brandeberry, 708 F.3d 837, 849 (6th Cir. 2013) (“the
concern with quarter-hour increments is over-billing”).
Nevertheless, the incidence of overbilling is not a concern
unique to the use of quarter-hour billing increments. See B & G
Mining, 522 F.3d at 666 (observing that “attorneys who bill in
28
tenth-hour increments might also overbill-the risk exists under
both methods”).
We further note that the regulations governing fee
petitions before the BRB require that applicants submit bills in
quarter-hour increments. 14 20 C.F.R. § 802.203(d)(3) (“[a] fee
application shall . . . contain[] all of the following specific
information,” including “[t]he number of hours, in 1/4 hour
increments”) (emphasis added). Eastern does not cite any
contrary authority, and we find none, prohibiting the use of
quarter-hour billing in black lung cases. Thus, to the extent
that Eastern argues that the agency adjudicators abused their
discretion per se by awarding fees in quarter-hour increments,
this argument is without merit. Moreover, we cannot agree that
the ALJ and the BRB abused their discretion merely by
considering a fee petition structured in accordance with
applicable federal regulations. Cf. Thomas M. Cooley Law Sch.
v. Am. Bar Ass’n, 459 F.3d 705, 715 (6th Cir. 2006) (agency did
not abuse its discretion by following existing regulations).
We next consider Eastern’s argument that the fees awarded
were excessive under the facts of this case. At the outset, we
observe that petitions for attorneys’ fees should not result “in
14
While 20 C.F.R. § 802.203(d) on its face only applies to
the BRB, we perceive no reason, and the parties provide none,
why the ALJ’s analysis should have followed a different course.
29
a second major litigation,” Hensley, 461 U.S. at 437, and that
tribunals determining fee awards under fee-shifting statutes
have a strong, appropriate concern “in avoiding burdensome
satellite litigation” over fee awards, City of Burlington v.
Dague, 505 U.S. 557, 566 (1992).
Any fee approved under the BLBA, however, must be
“reasonably commensurate with the necessary work done.” 20
C.F.R. § 725.366(b); 20 C.F.R. § 802.203(e). The use of
quarter-hour billing does not relieve agency adjudicators of
their obligation under the lodestar method to ensure that
“excessive, redundant, or otherwise unnecessary” fees are not
awarded. Hensley, 461 U.S. at 434.
We review for abuse of discretion the issue whether the
number of hours allowed was excessive. See B & G Mining, 522
F.3d at 666-67; Conoco, Inc. v. Dir., OWCP, 194 F.3d 684, 692
(5th Cir. 1999). We afford the ALJ and the BRB substantial
deference in deciding whether hours represented in a fee
petition are excessive. See Zeigler, 326 F.3d at 902 (affording
“great deference” to the “views and conclusions of the ALJ”
regarding challenges to a fee award). Manifestly, the agency
adjudicators are better positioned than this Court to evaluate
the “reasonableness of time spent by a lawyer on a particular
task in the course of litigation.” Id.; see also Holiday, 591
F.3d at 228 (stating that an ALJ “has a better understanding” of
30
an attorney’s reasonable hourly rate, which is an “inherently
factual matter”); Ballard v. Schweiker, 724 F.2d 1094, 1098 (4th
Cir. 1984) (under prior black lung fee award statutory scheme,
recognizing that the district court “is in the better position
to evaluate the quality and value of the attorney’s efforts”).
In view of this deferential standard, we generally will not
disturb an agency adjudicator’s decision concerning any given
subset of charges when the adjudicator found that the total
number of hours submitted was reasonable in relation to the work
performed, and the adjudicator’s decision is supported by the
record. See B & G Mining, 522 F.3d at 666; Conoco, 194 F.3d at
692.
Eastern’s argument that the present fee awards were
excessive lacks merit because, essentially, it is grounded on
Eastern’s blanket objection that “there was no proof that it
took fifteen minutes to perform each and every task alleged.”
Such a requirement improperly would escalate a fee applicant’s
present burden to show that the rate claimed and the hours
worked were reasonable. See Hensley, 461 U.S. at 433-34;
Holiday, 591 F.3d at 227. Moreover, the imposition of a greater
proof burden requiring such exactitude would create a strong
disincentive for attorneys to participate in black lung cases,
thereby thwarting the intent of Congress that such claimants
receive representation in seeking an award of benefits. See
31
Perdue, 130 S. Ct. at 1672; Blum, 465 U.S. at 893-94 (reasonable
attorneys’ fees “attract competent counsel,” but do not “produce
windfalls”).
Here, the ALJ and the BRB conducted thorough reviews and
reached conclusions well supported by the record that the total
number of hours claimed was reasonable. The ALJ reasonably
found that the fees were not facially excessive, in view of the
length of the proceedings and the extensive discussion required
in the ALJ’s decision on the merits of the case. In addition,
we think that the record also shows the complexity of the merits
of the claim for benefits, regarding, among other things, the
unusual diagnosis of “unilateral” pneumoconiosis. Moreover, the
ALJ considered Eastern’s objections to “each challenged itemized
time charge to determine whether or not the charge is reasonable
and compensable.”
In conducting this review, the ALJ eliminated over forty
charges by Wolfe, Gilligan, and certain legal assistants that
were not compensable because the tasks at issue were clerical in
nature. Moreover, the ALJ disallowed a significant number of
charges on the basis that they were duplicative or unnecessary,
including seven hours billed by Gilligan related to a deposition
and a hearing when his co-counsel Wolfe also had charged for the
same services. In all, as noted above, the ALJ subtracted about
thirty hours from the request submitted by claimant’s counsel.
32
Based on these considerations, we hold that the ALJ’s award was
manifestly the result of careful and thoughtful consideration of
the fee petition and of Eastern’s “extensive” objections. 15
Like the ALJ, the BRB considered each challenged charge on
an individual basis. The BRB disallowed several charges on
various grounds, and Eastern does not take issue here with the
BRB’s specific findings in its review of the fee petitions.
When particular time entries “bear facial indicia of
exaggeration,” the party opposing a fee award should have the
opportunity to challenge the petitioner about the hours claimed.
Ballard, 724 F.2d at 1097. However, when the challenging party,
such as Eastern here, lodges only a blanket objection to tasks
billed in fifteen-minute increments, that party is not entitled
to an individualized showing that “each and every task alleged”
took the precise amount of time noted.
Accordingly, we discern no abuse of discretion by the ALJ
or the BRB with respect to their consideration of the billing
practices and the fee awards sought. The total number of hours
awarded was reasonable and well supported by the record.
15
We further observe that numerous charges to which Eastern
had objected because they were presented in quarter-hour
increments ultimately were disallowed in their entirety on other
grounds.
33
III.
In conclusion, we find no indication here that the ALJ or
the BRB simply rubber-stamped the challenged fee petitions.
Notwithstanding our modification of the hourly rate awarded for
the services of the legal assistants, we hold that the ALJ and
the BRB consistently tailored their conclusions to the facts and
circumstances presented both with respect to the hourly rates
and to the number of hours awarded. We reduce the award of
legal assistant fees from a combined $3,800 to $1,900, upon
applying the $50 hourly rate to the 36.75 hours of legal
assistant time for which the ALJ awarded fees, and the 1.25
hours for which the BRB awarded fees. For the reasons detailed
above, we affirm, as modified herein, the fee awards entered by
the ALJ and the BRB in this case.
AFFIRMED AS MODIFIED
34