Fogle, Virginia v. William Chevrolet ( 2001 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 01-1427
Virginia Fogle and Fatina Fogle,
Plaintiffs-Appellants,
v.
William Chevrolet/Geo, Inc.,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 99 C 5960--James F. Holderman, Judge.
Argued October 2, 2001--Decided December 26, 2001
Before Posner, Easterbrook, and Evans,
Circuit Judges.
Posner, Circuit Judge. After obtaining
a favorable settlement of their consumer
fraud lawsuit against the defendant, an
automobile dealer, in which they had
charged violations of the federal truth-
in-lending and odometer-tampering
statutes as well as various Illinois
state laws in the sale of two cars to
them, the plaintiffs asked the district
court to award them $44,000 (we are
rounding off to the nearest $1,000) in
attorney’s fees for the work of
theirlawyer, Andy Norman. Norman had
arrived at this amount by multiplying his
claimed hourly fee of $310 by the number
of hours (143) that he claimed to have
put in on the case. The district judge
found that Norman’s performance, although
it had achieved significant relief for
the plaintiffs-- the rescission of the
contract for one of the cars and a refund
of a substantial part of the purchase
price of the other--had been mediocre.
Norman was "in the bottom-tier skill-wise
of this specialty [consumer fraud
litigation] based on his performance in
this case" and $310 was not his real
hourly fee. The judge cut Norman’s hours
to 60 and his fee to $185, and so awarded
the plaintiffs only $11,000 in attorney’s
fees.
When computing a lawyer’s fee under a
fee-shifting statute, the judge’s
objective is to approximate the fee the
lawyer would have obtained in the market
for legal services. People Who Care v.
Rockford Board of Education, No. 01-1784,
2001 WL 1512907 (7th Cir. Nov. 29, 2001);
Pressely v. Haeger, 977 F.2d 295, 299
(7th Cir. 1992). The judge is trying to
"mimic the market in legal services."
Gaskill v. Gordon, 160 F.3d 361, 363 (7th
Cir. 1998). One way he can do this, the
most common way in fact, is to estimate
the number of hours that the lawyer would
have devoted to the case in question, and
the hourly rate he would have charged,
had these determinants of the fee been
determined by the market. In re Synthroid
Marketing Litigation, 264 F.3d 712, 718
(7th Cir. 2001); Bankston v. Illinois, 60
F.3d 1249, 1256 (7th Cir. 1995); Gusman
v. Unisys Corp., 986 F.2d 1146, 1150 (7th
Cir. 1993); In re Continental Illinois
Securities Litigation, 962 F.2d 566, 568,
572 (7th Cir. 1992). The two determinants
are sometimes reciprocals. A lawyer’s
hourly rate may be above average because
he can get the work done in fewer hours,
Gusman v. Unisys Corp., supra, 986 F.2d
at 1150, or because though he devotes the
same number of hours to the case as an
average lawyer would and so his aggregate
fee is higher, his endeavors provide more
value to the client by increasing the
likelihood and (or) amount of a favorable
judgment. Id. So there is no single,
market-wide fee for a given case, and
this requires the judge to consider the
quality of the particular lawyer as well
as the amount of time that he devoted to
the case. Id.; Eddleman v. Switchcraft,
Inc., 965 F.2d 422, 425 (7th Cir. 1992);
Star Financial Services, Inc. v. AASTAR
Mortgage Corp., 89 F.3d 5, 17 (1st Cir.
1996).
The best evidence of the lawyer’s
quality is the fee he commands in the
market, Batt v. Micro Warehouse, Inc.,
241 F.3d 891, 895 (7th Cir. 2001); Uphoff
v. Elegant Bath, Ltd., 176 F.3d 399, 407-
08 (7th Cir. 1999); Gusman v. Unisys
Corp., supra, 986 F.2d at 1150, but such
evidence may not be available if the
lawyer is usually compensated by a-court-
awarded fee, which is Norman’s situation.
He has had few paying clients as it were
and only two who have ever paid him $310
an hour and those for only a few hours.
Given the well-known informational
problems in the legal-services market, a
lawyer’s ability to persuade the very
occasional client to pay a very high
hourly rate is poor evidence of the
lawyer’s market value. In fact, it is
evident that Norman could not sell all or
even a decent fraction of his time at
$310, for if he could, he would not have
taken this case, where the payoff (even
if valued at $310 per hour) was
contingent because he could not be
certain of prevailing.
In the absence of a reliable market test
of his own services, Norman had to show
that lawyers of comparable ability
commanded the rate he was asking the
judge to assess. Blum v. Stenson, 465
U.S. 886, 895 and n. 11 (1984); Small v.
Richard Wolf Medical Instruments Corp.,
264 F.3d 702, 707 (7th Cir. 2001); Batt
v. Micro Warehouse, Inc., supra, 241 F.3d
at 894; Uphoff v. Elegant Bath, Ltd.,
supra, 176 F.3d at 408; Spegon v.
Catholic Bishop of Chicago, 175 F.3d 544,
555 (7th Cir. 1999); Pressely v. Haegert,
supra, 977 F.2d at 299. To this end,
Norman submitted the affidavit of a
lawyer named James Wilber who does not
practice law in Illinois or in any
federal court, does not even live in
Illinois, has not practiced law since
1990, and made no study of the Chicago
(or any other) consumer fraud litigation
lawyer market but instead relied on
Norman’s own self-serving self-
evaluation. His conclusion that Norman’s
market value is indeed $310 (or higher,
Wilber attested with a flourish) is
groundless, the affidavit worthless and
inadmissible under Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579
(1993). See General Electric Co. v.
Joiner, 522 U.S. 136, 146 (1997); Dhillon
v. Crown Controls Corp., 269 F.3d 865,
869-70 (7th Cir. 2001) (expert’s failure
to show that opinion is product of
reliable principles and methods renders
testimony inadmissible); People Who Care
v. Rockford Board of Education, 111 F.3d
528, 537-38 (7th Cir. 1997) ("a
statistical study that fails to correct
for salient explanatory variables, or
even to make the most elementary
comparisons, has no value as causal
explanation and is therefore inadmissible
in a federal court"). There are almost a
million lawyers in the United States, and
if Wilber’s affidavit counts as evidence
there will never be a case in which a
lawyer can’t produce the paid affidavit
of another lawyer that his market value
is whatever he says it is. Norman was
rightly denied a judicial award of $310
an hour.
He argues that it was double counting
for the judge to reduce his hours as well
as his hourly fee. Not so. A lawyer worth
only $185 an hour may still put in more
hours in expectation of a court-awarded
fee than he would if his client were
breathing down his neck. See Eddleman v.
Switchcraft, Inc., supra, 965 F.2d at
425. The judge reasonably concluded that
that is what Norman had done.
Affirmed.