Bd Trst Loc 25 v. JPR Inc ( 1998 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 18, 1997 Decided February 27, 1998
No. 97-7040
Board of Trustees of the Hotel and Restaurant Employees
Local 25 and Employers' Health and
Welfare Fund, et al.
Appellants
v.
JPR, Inc.,
Appellee
Appeal from the United States District Court
for the District of Columbia
(No. 96cv01028)
Daniel M. Katz argued the cause and filed the briefs for
appellants. Ellen G. Ranzman entered an appearance.
Malcolm L. Pritzker argued the cause and filed the brief
for appellee. Steven R. Semler entered an appearance.
Before: Edwards, Chief Judge, Wald and Randolph,
Circuit Judges.
Opinion for the Court filed by Circuit Judge Wald.
Opinion concurring in part and dissenting in part filed by
Circuit Judge Randolph.
Wald, Circuit Judge: This appeal is brought by the Boards
of Trustees of two employee benefit plans, (1) the Hotel and
Restaurant Employees Local 25 and Employers' Health and
Welfare Fund, and (2) the Hotel and Restaurant Employees
Local 25 and Hotel Association, Cafeteria and Other Sub-
scribing Employers Group Legal Services Fund. (We will
refer to the two plans as "the Funds," and to their Boards of
Trustees collectively as "the Trustees.") The Trustees pre-
vailed in an action in the district court in which they sought to
collect underpayments to the Funds by JPR, Inc. ("JPR"),
the entity that operates the Washington, D.C. restaurant La
Colline. In addition to recovering the shortfall in payments,
they collected interest, liquidated damages, litigation ex-
penses, and attorney's fees. The district court declined,
however, to award the Trustees auditing fees, and awarded
attorney's fees only at the rate actually charged, rather than
at market rates. The Trustees appeal these two rulings. We
affirm the first, but reverse the second, finding that the
district court must consider whether the fees charged by the
Trustees' attorney incorporated a public-spirited discount,
and, if so, award fees at market rates.
I. Background
The Funds were established by agreement between Local 25
of the Hotel & Restaurant Employees Union ("the Union")
and the Hotel Association of Washington, D.C. (the "Hotel
Association"); the Trustees who administer the Funds are
drawn from representatives of both parties. The Union
represents a bargaining unit of employees of La Colline, and
JPR is a member of the Hotel Association. The collective
bargaining agreement between the Union and JPR requires
JPR to make a specified contribution to the Funds for every
hour worked by an employee.
The documents establishing the Funds are called the "Den-
tal and Optical Care Plan Trust Agreement" 1 and the "Group
Legal Services Plan Trust Agreement." Each of these agree-
ments requires participating employers to make contributions
to the appropriate Fund, and permits the Trustees of that
Fund to audit employers' records in order to ensure that the
correct contributions have been made. The Trustees periodi-
cally conduct routine audits of participating employers to
assure that they are making the appropriate contributions.
This case arises out of such a routine audit, that of JPR's
contributions to the Funds from 1992 to 1994. The audit
revealed a total shortfall of $36,162.88. The Trustees at-
tempted to persuade JPR to pay this sum voluntarily, and
then filed suit to compel JPR to do so, bringing claims under
the Employee Retirement Income Security Act ("ERISA")
and the National Labor Relations Act. JPR raised three
affirmative defenses: first, that no payments were due for
employees in their first three months of employment; second,
that some of the employees were covered by other insurance
and that no contributions were needed on their behalf; and
third, (in a variation of the second argument) that it need not
make contributions for dental insurance which it asserted was
duplicative. The Trustees moved for summary judgment,
and the district court granted the motion, finding none of
JPR's defenses to be meritorious. JPR did not appeal this
ruling.
ERISA provides that "in any action under this subchapter
by a fiduciary for or on behalf of a plan to enforce section
1145 of this title in which a judgment in favor of the plan is
awarded, the court shall award the plan" an enumerated list
of elements of damages. 29 U.S.C. s 1132(g)(2) (1994). The
__________
1 The title of this agreement reflects the former name of the
Health and Welfare Fund.
Trustees' action was within this section, as it was brought,
inter alia, to enforce 29 U.S.C. s 1145, a provision that
relates to delinquent contributions.2 Accordingly, in addition
to recovering the overdue amount, the Trustees sought, and
the district court awarded, (1) interest (at 18%), (2) duplicate
interest in lieu of liquidated damages, (3) litigation expenses,
and (4) attorney's fees.
The district court declined, however, to award $9,066 in
audit fees sought by the Trustees. The Trustees also argued
that the amount of attorney's fees charged by their counsel,
$17,775, reflected a large charitable discount from market
rates, and that they should receive an award at the market
value of their counsel's legal services, which they claimed was
$43,068.75. The district court did not accept this argument,
and awarded only the actual amount of fees charged. These
two decisions are now before us on appeal.
II. Analysis
We have often been warned that "[a] request for attorney's
fees should not result in a second major litigation." Hensley
v. Eckerhart, 461 U.S. 424, 437 (1983). Clearly, the district
court is most familiar with the interstices of the litigation, and
we accord its decisions considerable deference. See id. at
437. Our review of its fee awards is confined to correcting
errors of law and remedying abuses of discretion. See Cov-
ington v. District of Columbia, 57 F.3d 1101, 1110 (D.C. Cir.
1995); see also Pierce v. Underwood, 487 U.S. 552, 571 (1988)
(stating that "it is well established that the abuse-of-
discretion standard applies" to review of a district court's
award of fees).
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2 Section 1145 provides: "Every employer who is obligated to
make contributions to a multiemployer plan under the terms of the
plan or under the terms of a collectively bargained agreement shall,
to the extent not inconsistent with law, make such contributions in
accordance with the terms and conditions of such plan or such
agreement." 29 U.S.C. s 1145 (1994). The Funds are multiem-
ployer plans.
A. Audit Fees
The Trustees sought two types of audit fees in the district
court: (1) the costs of the routine audit that discovered JPR's
shortfall in payments, and (2) fees for 24 hours of work
performed in connection with the merits of the delinquency
litigation before the district court. The district court denied
both categories of audit fee, for reasons that we conclude
were correct.
1. Costs of the Routine Audit
The Trust Agreement establishing the Health and Welfare
Fund contains a provision entitled "Default and Payment"
which provides that, in the event of "failure to pay such
monthly contributions in full within the time above provided,"
any person in default may be required at the discretion
of the Trustees to pay as liquidated damages such
amounts as the Trustees may determine, including inter-
est up to the maximum permitted by law, together with
all expenses of collection incurred by the Trustees, in-
cluding, but not limited to reasonable counsel fees, audit-
ing fees, and court costs, and any other lawful charges
for late payment as the Trustees may determine.
The Trust Agreement establishing the Legal Services Fund
contains a provision that is, for our purposes, identical (it
contains minor differences of wording). Because the two
provisions are equivalent, we will refer to them together as
"the" Default and Payment Clause.
ERISA requires that "[e]very employer who is obliged to
make contributions to a multiemployer plan ... make such
contributions in accordance with the terms and conditions of
such plan ...," 29 U.S.C. s 1145 (1994), and permits Plan
fiduciaries to bring suit to "enforce ... the terms of the
plan." 29 U.S.C. s 1132(a)(3) (1994). Thus, if the Default
and Payment Clause requires employers who are in default to
pay routine auditing fees, ERISA empowers the Trustees to
enforce that requirement. See Iron Workers District Council
v. Hudson Steel Fabricators & Erectors, Inc., 68 F.3d 1502,
1507 (2d Cir. 1995). The district court concluded that the
Default and Payment Clause did not include such a require-
ment, and hence declined to award routine auditing fees.
We review questions of the proper interpretation of ERISA
plans de novo. See Carey Canada, Inc. v. Columbia Cas. Co.,
940 F.2d 1548, 1554 (D.C. Cir. 1991). The Trustees point to
the Default and Payment Clause's statement that they may
collect "all expenses of collection incurred by the Trustees,
including, but not limited to reasonable counsel fees, auditing
fees, and court costs," and argue that this allows them to
collect all auditing fees, including the costs of the routine
audit that discovered an underpayment. We do not think so.
This passage only permits the Trustees to recoup those
"auditing fees" that qualify as "expenses of collection." An
"expense of collection," as that phrase is usually understood,
is an expense that results from collection efforts. The Trust-
ees have pointed to no evidence that this phrase means
something different here. The fact that the Default and
Payment Clause also lists "reasonable counsel fees" and
"court costs" as types of "expenses of collection" confirms our
reading; both are costs that are only incurred as a result of
collection efforts. (This is an application of ejusdem generis,
the canon of construction that states that "a general statutory
term should be understood in light of the specific terms that
surround it." Hughey v. United States, 495 U.S. 411, 419
(1990).)
This is not to say that auditing fees may never qualify as
"expenses of collection." Fees for non-routine follow-up au-
dits performed as a part of the collection process are clearly
included in the term. An audit that began as routine might
also abruptly change its stripes and become a non-routine
audit, if auditors discovered inconsistencies during their work
and did extra work to untangle them. Because such detective
work would be motivated by the desire to collect an under-
payment, rather than by the need to perform a routine audit,
it could fairly be called an "expense of collection." There is
no allegation of this kind here, however; the Trustees' audit
of JPR seems to have cost no more than would a routine audit
of any other employer.3
The Fifth Circuit has construed a similar plan provision--
which also allowed the Trustees to recover all "expenses of
collection"--to allow reimbursement of routine audit fees.
See Carpenters Amended and Restated Health Benefit Fund
v. Ryan Constr. Co., 767 F.2d 1170, 1175 (5th Cir. 1985).
Ryan found that the costs of the routine audit were "ex-
penses of collection" because an audit is "a necessary first
step in collection of any delinquency." Id. at 1175-76. We
believe the reasoning of Ryan proves too much. By Ryan 's
logic, the Trustees should also be able to put in for a host of
other expenses that are "necessary" to the initiation of collec-
tion efforts, i.e., the cost of their own salaries, as collection
efforts are impossible without effective supervision of the
auditors and of the Funds' finances. The test is not whether
an expenditure is a necessary precondition to collection ef-
forts, but rather the reverse, whether collection efforts
prompted the expenditure.4
2. Litigation-Related Auditing Expenses
The district court declined to grant the Trustees' request
for reimbursement for 24 hours of litigation-related auditing
__________
3 The Trustees argue that JPR's unusual recordkeeping practices
increased the costs of the routine audit. But there is no indication
that JPR adopted its recordkeeping practices in order to conceal
underpayments, or that there is any other link between those
practices and JPR's underpayment.
4 The Default and Payment Clause also states that "any person in
default may be required at the discretion of the Trustees to pay as
liquidated damages such amounts as the Trustees may deter-
mine...." The Trustees have not argued that this language enti-
tles them to recover routine audit fees, and we therefore have not
considered that question. Nor have the Trustees claimed that they
should have received audit fees under ERISA's provision permitting
the court to award "such other legal or equitable relief as the court
deems appropriate." 29 U.S.C. s 1132(g)(2)(E); see also Operating
Engineers Pension Trust v. A-C Co., 859 F.2d 1336, 1342-43 (9th
Cir. 1988) (finding that audit fees may be awarded under this
provision).
expenses, finding that the hours spent were "more in the
nature of litigation support than audit services, ... and in
any event are inadequately supported." We find that the
district court was within its discretion in concluding that this
request for reimbursement was inadequately supported. We
therefore do not consider whether litigation support services
are compensable under section 1132(g)(2). But cf. Missouri
v. Jenkins, 491 U.S. 274, 285 (1989) (finding that an award of
a "reasonable attorney's fee" under 42 U.S.C. s 1988 may
include the services of paralegals).
A plaintiff seeking attorney's fees under section 1983 must
demonstrate that the hours billed were reasonably expended
in pursuit of the litigation. "Counsel for the prevailing party
should make a good-faith effort to exclude from a fee request
hours that are excessive, redundant, or otherwise unneces-
sary, just as a lawyer in private practice ethically is obligated
to exclude such hours from his fee submission." Hensley, 461
U.S. at 434. "[I]f the district court finds that the attorney
failed to exercise billing discretion with respect to any of the
hours [claimed], the court may reject those hours as not
reasonably expended." Goos v. National Association of Re-
altors, 68 F.3d 1380, 1387 (D.C. Cir. 1995). The weaker the
apparent need for a particular activity, the higher the eviden-
tiary hurdle a claimant must cross in order to demonstrate
that it was in fact performed in a reasonable effort to pursue
the litigation.
The Trustees have failed to meet this standard of reason-
ableness. Sixteen hours of the twenty-four were consumed in
preparing for the Trustees' summary judgment motion, most-
ly on two declarations. The Trustees have not attempted to
provide us with any explanation of the need for these declara-
tions, and their purpose is not obvious, given that the results
of the audit appear not to have been in controversy. The
remaining eight hours were used to compile two tables, one
calculating the interest due on JPR's underpayments, and the
other listing the hours of work performed by particular
auditors and their hourly rates. Although the purpose of
these tables is more clear, it is incomprehensible that their
preparation could have consumed anywhere near eight hours.
The appropriate course in such circumstances is often to
allow a part of the requested time. Here, however, the
allowable amount of time--perhaps two hours--would be de
minimus, especially when considered in relation to the Trust-
ees' fee request as a whole. Accordingly, we see no need to
disturb the district court's decision to disallow this claim
altogether.
B. Attorney's Fees
The Trustees argued before the district court that their
attorney's hourly rate had been substantially discounted for
public-spirited reasons, and that they were therefore entitled
to an award of fees based on the market value of the services
he performed, not on the amount that he actually charged.
They asserted that the market value of their attorney's
services is $43,068.75, and sought an award in that amount.
The Trustees' attorney said at oral argument that the Funds
would remit to him any amount awarded in excess of his
actual fees.5
The district court concluded that, despite some authority
permitting plaintiffs to recover fees at market rates even if
they actually paid their counsel lesser amounts, see, e.g.,
Covington, 57 F.3d at 1107, such an exception is limited to
awards of fees under 42 U.S.C. s 1988 (the governing statute
in Covington), and does not apply to this case. Accordingly,
the district court awarded only the amount actually charged
by the Trustees' attorney, $17,775.
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5 We therefore need not consider the potential applicability of
National Treasury Employees Union v. United States Department
of the Treasury, 656 F.2d 848 (D.C. Cir. 1981), which found, citing
the restrictions on fee-splitting in the ABA's Code of Professional
Responsibility, that it was impermissible to make an award of
attorney's fees to a union in excess of the actual cost to the union of
the attorney's services. See id. at 851-53; but cf. ABA Comm. on
Ethics and Professional Responsibility, Formal Op. 93-374 (1993)
(interpreting Model Rule of Professional Conduct 5.4 to permit the
sharing of court-awarded fees for a pro bono representation be-
tween an attorney and a non-profit client).
We begin by assuming that the Trustees' attorney, for
public-spirited reasons, provided his services to the Trustees
at a discount. Assuming this to be the case, we find the
Trustees entitled to a fee award at the market value of their
services, rather than at the actual rate they were charged.
We then discuss how the district court is to decide whether
the fee charged did in fact incorporate a public-spirited
discount, and, if so, how it should determine the market rate
in making the award in this case.
1. Market Rate or Actual Rate?
ERISA provides that, in actions to collect unpaid contribu-
tions in which the plan is successful, the court "shall award to
the plan ... (D) reasonable attorney's fees and costs of the
action, to be paid by the defendant." 29 U.S.C. s 1132(g)(2).
The usual method of calculating reasonable attorney's fees is
to multiply the hours reasonably expended in the litigation by
a reasonable hourly fee, producing the "lodestar" amount.
See Pennsylvania v. Delaware Valley Citizens' Council for
Clean Air, 478 U.S. 546, 564 (1986) ("Delaware Valley" ).
This amount may then be adjusted by a multiplier "in certain
'rare' and 'exceptional' cases," see id. at 565 (quoting Blum v.
Stenson, 465 U.S. 886, 898-901 (1984)), although there is a
"strong presumption that the lodestar figure ... represents a
'reasonable' fee." Id.The issue we are concerned with here is what constitutes a
"reasonable hourly fee" for purposes of the lodestar calcula-
tion. This court held in Save Our Cumberland Mountains,
Inc. v. Hodel, 857 F.2d 1516 (D.C. Cir. 1988) (in banc)
("SOCM "), and reaffirmed in Covington, 57 F.3d at 1107, that
a party whose attorney charges a discounted rate for public-
spirited reasons may nevertheless receive an award of fees at
market rates. The rationale of those cases is not, as the
district court concluded, limited to actions under section 1988;
indeed, although SOCM drew extensively on the legislative
history of section 1988, SOCM itself involved an award under
a fee-shifting provision of the Surface Mining Control and
Reclamation Act. SOCM applied section 1988 jurisprudence
to the interpretation of this statute on the authority of
Delaware Valley, in which the Supreme Court found that it
was appropriate to apply section 1988 caselaw in construing a
fee-shifting provision of the Clean Air Act because both
provisions had as their "common purpose" to "promote citizen
enforcement of important federal policies." 478 U.S. at 560;
see also SOCM, 857 F.2d at 1519 n.1 (citing the panel opinion
in that case, Save Our Cumberland Mountains, Inc. v. Hodel,
826 F.2d 43, 47 (D.C. Cir. 1987), which in turn cited this
passage of Delaware Valley ).
Delaware Valley thus endorses the application of law devel-
oped under section 1988 to other fee-shifting provisions that
have the same citizen-enforcement purpose. Since Delaware
Valley, the Court has twice clarified when it is appropriate to
apply caselaw developed under one fee-shifting provision to
another such provision. First, in Independent Federation of
Flight Attendants v. Zipes, 491 U.S. 754 (1989), the Court
observed that "fee-shifting statutes' similar language is a
strong indication that they are to be interpreted alike," and
drew on caselaw under one fee-shifting provision of the Civil
Rights Act of 1964 in interpreting another fee-shifting provi-
sion of the same statute. Id. at 758 n.2.
Conversely, in Fogerty v. Fantasy, Inc., 510 U.S. 517(1994), the Court found that the "normal indication" of Zipes
could be "overborne" if the factors that justify a fee-shifting
rule in one context, such as the purpose or legislative history
of a statute, are absent in another. Id. at 523. Fogerty
involved the interpretation of 17 U.S.C. s 505, a fee-shifting
statute applicable to copyright infringement actions. The
wording of this provision is virtually identical to that of a fee-
shifting provision for Title VII of the Civil Rights Act of 1964,
42 U.S.C. s 2000e-5(k). Under caselaw interpreting section
2000e-5(k), there is a presumption that prevailing plaintiffs--
but not prevailing defendants--will receive an award of fees.
See Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 418
(1978). But the Fogerty Court found that it was not appro-
priate to apply the section 2000e-5(k) presumption to section
505, despite the similarity of language between the two
provisions, because there was no indication in section 505's
legislative history that Congress intended plaintiffs and de-
fendants to be treated differently for purposes of fee awards.
The Court also concluded that the purpose of the Copyright
Act--encouraging the production of creative works--is not
obviously served by favoring plaintiffs over defendants in
copyright infringement actions, especially given that "corpo-
rate behemoths" and "starving artists" are to be found among
both the plaintiffs and the defendants in infringement actions.
510 U.S. at 524 (citation omitted).
The inquiry prescribed by Zipes, Fogerty and Delaware
Valley does not differ that much from our usual processes of
statutory interpretation. The first step, of course, is to
consult the text of the statute; thus, Zipes' s rule that "fee-
shifting statutes' similar language is a strong indication that
they are to be interpreted alike," 491 U.S. at 758 n.2. The
next step is to consider the statute's purpose, structure, and
legislative history; this explains Fogerty 's rule that the "nor-
mal indication" of Zipes can in some circumstances be "over-
borne" on the basis of contextual evidence. 510 U.S. at 523.
Delaware Valley comes into play at this stage; it defines one
category of statutes--those intended to "promote citizen en-
forcement of important federal policies," 478 U.S. at 560--as
having a "common purpose" and therefore presumptively to
be interpreted similarly. See Lyle v. Food Lion, Inc., 954
F.2d 984, 988 n.1 (4th Cir. 1992) (citing Delaware Valley in
applying section 1988 caselaw to a fee-shifting provision of the
Fair Labor Standards Act).6
Should our case fit securely within Delaware Valley, our
analysis would be at an end, as SOCM would apply directly.
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6 Delaware Valley 's suggestion that a broad group of fee-shifting
provisions should all be subject to the same set of legal standards
may also have been based on the assumption that this would limit
parties' incentives to litigate fee disputes. Cf. Hensley v. Ecker-
hart, 461 U.S. 424, 455 (1983) (Brennan, J., concurring in part and
dissenting in part) (comparing appellate litigation of fee disputes to
"a Frankenstein's monster" that "meanders its well-intentioned way
through the legal landscape leaving waste and confusion (not to
mention circuit splits) in its wake"). In this respect, then, the
interpretation of fee-shifting statutes may differ from the usual
practice of statutory interpretation.
But, alas, it is not that easy. Section 1132(g)(2) is not
intended to promote enforcement of important federal policies
by "citizens," because recoveries under section 1132(g)(2) are
limited to plan fiduciaries, see 29 U.S.C. s 1132(g)(2) ("In any
action under this subchapter by a fiduciary for or on behalf of
a plan ...") (emphasis added), a group that at first glance
seems less in need of favorable fee-shifting rules than the
citizenry at large.
That section 1132(g)(2) does not fit squarely within the four
corners of Delaware Valley does not necessarily foreclose the
application of SOCM; it does, however, require that we
consider the specific text and purposes of section 1132(g)(2) to
decide whether SOCM 's market-rate standard applies. We
turn to Zipes and Fogerty for guidance. As in Zipes, the text
of section 1132(g)(2) does parallel that of section 1988; both
provide for a "reasonable" fee. Next, as Fogerty commands,
we turn to the statute's purposes and legislative history to see
whether the presumption that section 1132(g)(2) is to be
interpreted in line with section 1988 is "overborne" by con-
trary evidence.
Section 1132(g)(2) was enacted as part of the Multiemploy-
er Pension Plan Amendments Act of 1980 ("MPPAA"). In
enacting the MPPAA, Congress was responding to an in-
crease in the financial instability of multiemployer pension
plans, a problem it believed would continue to escalate unless
action was taken. H.R. Rep. No. 96-869, pt. 1 at 52-57 (1980)
("House Report"). The MPPAA put into place a number of
measures intended to "protect retirees and workers who are
participants in [multiemployer pension] plans against the loss
of their pensions," id. at 51, including provisions that altered
the funding requirements for multiemployer plans, required
withdrawing employers to contribute to a plan's unfunded
obligations, and adjusted the insurance provided by the Pen-
sion Benefit Guaranty Corporation. See id. at 65-70; see
also Milwaukee Brewery Workers' Pension Plan v. Jos.
Schlitz Brewing Company, 115 S. Ct. 981, 985 (1995) (review-
ing Congress's goals in enacting the MPPAA).
Although most of the provisions of the MPPAA as enacted
tracked the bill that originated in the House of Representa-
tives, H.R. 3094, the language of section 1132(g)(2) originated
in the Senate bill, S. 1076. The following passage explains
the Senate's understanding of the meaning of its language:
Delinquencies of employers in making required contri-
butions are a serious problem for most multiemployer
plans. Failure of employers to make promised contribu-
tions in a timely fashion imposes a variety of costs on
plans. While contributions remain unpaid, the plan loses
the benefit of investment income that could have been
earned if the past due amounts had been received and
invested on time. Moreover, additional administrative
costs are incurred in detecting and collecting delinquen-
cies. Attorneys fees and other legal costs arise in con-
nection with collection efforts.
These costs detract from the ability of plans to formu-
late or meet funding standards and adversely affect the
financial health of plans. Participants and beneficiaries
of plans as well as employers who honor their obligation
to contribute in a timely fashion bear the heavy cost of
delinquencies in the form of lower benefits and higher
contribution rates. Moreover, in the context of this
legislation, uncollected delinquencies can add to the un-
funded liability of the plan and thereby increase the
potential withdrawal liability for all employers.
Recourse available under current law for collecting
delinquent contributions is insufficient and unnecessarily
cumbersome and costly. Some simple collection actions
brought by plan trustees have been converted into
lengthy, costly and complex litigation concerning claims
and defenses unrelated to the employer's promise and
the plans' entitlement to the contributions. This should
not be the case. Federal pension law must permit
trustees of plans to recover delinquent contributions
efficaciously. Sound national pension policy demands
that employers who enter into agreements providing for
pension contributions not be permitted to repudiate their
pension promises.
The public policy of this legislation to foster the pres-
ervation of the private multiemployer plan system man-
dates that provision be made to discourage delinquencies
and simplify delinquency collection. The bill imposes a
Federal statutory duty to contribute on employers that
are already contractually obligated to make contributions
to multiemployer plans. A plan sponsor that prevails in
any action to collect delinquent contributions will be
entitled to recover the delinquent contributions, court
costs, attorney's fees, and double interest on the contri-
butions owed. The intent of this section is to promote
the prompt payment of contributions and assist plans in
recovering the costs incurred in connection with delin-
quencies.
Staff of Senate Committee on Labor and Human Resources,
96th Cong., 2d Sess., S. 1076: The Multiemployer Pension
Plan Amendments Act of 1980: Summary and Analysis of
Consideration, at 43-44 (Comm. Print 1980) (hereinafter
"Senate Committee Print").7 In the debates surrounding the
enactment of the final version of the MPPAA, Representative
Thompson, one of the sponsors of H.R. 3094, repeated this
passage essentially verbatim on the floor of the House. 125
Cong. Rec. 23,038, 23,039 (1980).
We draw three lessons from section 1132(g)(2)'s text, pur-
poses, and legislative history.8 First, in enacting section
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7 The district court in Central States, Southeast and Southwest
Areas Pension Fund v. Alco Express Co., 522 F. Supp. 919, 927-28
(E.D. Mich. 1981) ("Central States"), in the course of a detailed
review of the legislative history of section 1132(g)(2), explained that
"[b]ecause S. 1076 was also referred to the Senate Committee on
Finance there was no formal committee report, since Senate Rule
XXVII requires a joint report under such circumstances." 522
F. Supp. at 928 n.11.
8 The above-quoted legislative history of section 1132(g)(2) refers
in places to "pension plans," presumably because most of the
MPPAA related only to pension plans, not to welfare benefit plans,
the other type of employee benefit plan covered by ERISA. See
29 U.S.C. s 1002(3). The Funds are both welfare benefit plans.
1132(g)(2), Congress had a strong goal of "discourag[ing]
delinquencies" and rendering delinquency collection less
"cumbersome and costly." Senate Committee Print, at 44.
Deterring parties from prolonging litigation is an important
goal of most fee-shifting provisions. Here, however, Con-
gress's desire to achieve this goal was especially strong.
Section 1132(g)(2) provides that the courts "shall" award fees
to fiduciaries when judgments are awarded in their favor in
delinquent-contribution actions. It makes no provision for
prevailing defendants.9
In statutes protecting economic interests, mandatory fee-
shifting is uncommon, and the same standards are usually
applied to fee awards to both plaintiffs and defendants. See,
e.g., Fogerty, 510 U.S. at 534 (concluding that fee-shifting
under the Copyright Act is discretionary, and that the same
standard should be applied in considering fee awards to both
parties); id. at 525 n.12 (indicating that "courts have general-
ly awarded attorney's fees in an evenhanded manner based on
the same criteria" under the trademark and patent laws);
Eddy v. Colonial Life Ins. Co. of America, 59 F.3d 201, 205
(D.C. Cir. 1995) ("In general, statutes protecting economic
interests that contain fee-shifting provisions vesting discre-
tion in the district court do not create a presumption that a
prevailing party will be awarded fees."). Congress's express
requirement that the courts award fees to fiduciaries who win
delinquent-contribution actions demonstrates an unusually
powerful intent to deter excessive litigation by defendants. A
rule that requires employers to pay the market rate in cases
in which an attorney has discounted her fees for public-
spirited reasons surely serves this goal better than does one
__________
Congress clearly signalled, however, that section 1132(g)(2) be
interpreted in the same way whether welfare or pension plans were
involved. The text of section 1132(g)(2) as enacted is equally
applicable to both types of plans, as was the draft provision that
was before the committee; much of the above-quoted legislative
history is likewise equally applicable to both types of plans.
9 They must therefore invoke 29 U.S.C. s 1132(g)(1), which allows
the court to make a fee award "in its discretion." Id.under which only fees actually paid out are recoverable. If a
plan receives legal services from its attorneys for free, then
the actual-cost rule would require the delinquent employer to
pay nothing--a result clearly inconsistent both with Con-
gress's desire to deter employers from late payment and with
the statute's requirement that the court "shall" award "rea-
sonable attorney's fees." Likewise, the fact that a plan
receives its legal services at a deep discount should not justify
a similar discount of section 1132(g)(2)'s deterrent effect.10
A second important goal of fee-shifting provisions is to
enable parties to hire "competent counsel" to pursue their
cases. SOCM, 857 F.2d at 1521 (emphasis omitted) (citing
section 1988's legislative history); see also Kay v. Ehrler, 499
U.S. 432, 436 & n.8 (1991). Although this goal is not explicit-
ly stated in the legislative history of section 1132(g)(2), Con-
gress did express a strong desire to "simplify delinquency
collection" and "assist plans in recovering the costs incurred
in connection with delinquencies," Senate Committee Print, at
44, goals that are best served if plan fiduciaries are able to
hire competent counsel. Again, a fee-shifting rule that re-
quires delinquent employers to pay market rates serves this
purpose better than does one under which they pay only the
billed rate.11 In this case, the plan has agreed to pass on the
entire amount of any fee award to its attorneys. Such an
arrangement obviously improves the ability of plans to obtain
__________
10 Indeed, the plans that are closest to insolvency, and therefore
need the deterrent effect of section 1132(g)(2) the most, would be
most harmed by an actual-cost rule, as they are also the group that
is likeliest to seek, and obtain, discounted legal services.
11 Our dissenting colleague says that we assume mistakenly that
"expensive counsel necessarily equals competent counsel." Diss.
op. at 2. We do not deny that there exist expensive, incompetent
counsel; but there is ordinarily a correlation between an attorney's
rates and her competence. The lodestar approach to setting legal
fees is premised on the idea that there is a market for legal
services, in which an attorney's hourly rate is correlated with her
abilities. SOCM similarly assumed that market rate fees are
needed to attract competent attorneys in complex cases. See 857
F.2d at 1521.
high-quality legal representation in the first instance. In-
deed, a plan that is near insolvency--as one of the plans at
issue in this case, the Legal Services Plan, apparently was in
early 199512--might otherwise find it quite difficult to secure
the assistance of competent legal counsel in returning it to
stability. On this point, we note that Congress enacted the
MPPAA in order to stabilize financially ailing ERISA plans,
see House Report, at 52-57; Senate Committee Print, at 1,
and intended section 1132(g)(2) to further that objective, see
Senate Committee Print, at 44 (referring to "the public policy
of this legislation to foster the preservation of the private
multiemployer plan system").
Congress's preeminent purpose, in enacting section
1132(g)(2), to keep ERISA plans solvent also points us in the
direction of reading section 1132(g)(2) in a way that facili-
tates, rather than impedes, private charitable donations to
plans. If an attorney has made a public-spirited decision to
charge a plan a discounted rate, a delinquent employer should
not receive the benefit of this decision. Judge Easterbrook in
the Seventh Circuit has endorsed this point:
Some lawyers dedicate their professional lives to causes
they find admirable and worthy of support--to legal
services for the poor, to the representation of unions.
These lawyers are making contributions to their favored
causes, not in money, but in time.... Using opportunity
cost as the measure of legal services means that the
value of the lawyer's gift inures to the favored cause, and
not to the adversary in litigation.
Barrow v. Falck, 977 F.2d 1100, 1105 (7th Cir. 1992). In this
case, of course, the Trustees' attorney would receive any fees
in excess of the amount billed; but the Trustees would benefit
indirectly from such an award (as the award would presum-
ably make it easier for them to obtain competent counsel in
__________
12 In January, 1995, the Legal Services Fund's assets stood at
$1,218. The Fund's present attorneys responded by adjusting their
billing; they charged only when collection efforts were successful,
and asked only their "regular hourly rate or a percentage of the
amount actually collected, whichever was less."
the future), and JPR would not benefit at all.13 This ap-
proach also accords with the Supreme Court's consistent rule
that under fee-shifting statutes legal services are to be given
their market value, irrespective of the contractual arrange-
ments between attorney and client. See Blanchard v. Berger-
on, 489 U.S. 87, 93 (1989) ("Should a fee agreement provide
less than a reasonable fee ..., the defendant should never-
theless be required to pay the higher [market-based]
amount."); Blum, 465 U.S. at 893-96; see also Central States,
Southeast and Southwest Areas Pension Fund v. Central
Cartage Co., 76 F.3d 114, 116 (7th Cir.), cert. denied, 117 S.
Ct. 56 (1996) (citing this principle in reading section
1132(g)(2) to permit an award of attorney's fees at market
rates to an organization represented by salaried staff coun-
sel); Louisiana Power & Light Co. v. Kellstrom, 50 F.3d 319,
328 (5th Cir. 1995).
JPR argues that the singular purpose of section 1132(g)(2)
is to make plans whole, and that a fee award that exceeds the
amount actually charged by a plan's attorneys is inconsistent
with this purpose. Making plans whole is indeed one impor-
tant purpose of section 1132(g)(2). See Senate Committee
Print, at 44 (stating that the section's intent is to "assist plans
in recovering the costs incurred in connection with delinquen-
cies"). But, as we have established, section 1132(g)(2) has
other, equally important goals, which are best served by a
__________
13 Under the collateral-source rule, "[p]ayments made to or bene-
fits conferred on the injured party from other sources are not
credited against the tortfeasor's liability, although they cover all or
a part of the harm for which the tortfeasor is liable." Restatement
(Second) of Torts s 920A (1979). This rule would seem to apply by
analogy to in-kind donations of an attorney's services. Charitable
contributions are ordinarily treated as a collateral source like any
other, for precisely the reason identified by Judge Easterbrook, the
desire to ensure that the benefit of the gift accrues to the donee,
not to the tortfeasor. See 4 Fowler V. Harper et al, The Law of
Torts s 25.22 at 661-63 (2d ed. 1986); see also Hudson v. Lazarus,
217 F.2d 344, 346-47 (D.C. Cir. 1954) (in a case under D.C. law,
applying the collateral-source rule to free care received at a veter-
ans' hospital).
market-rate award. Furthermore, there is a real sense in
which a market-rate award may be a peculiarly appropriate
instrument by which to make the Funds whole. An ERISA
plan may have only a finite pool of discounted or free legal
assistance available to it; once this pool is used up, the plan
will then be required to pay higher rates for legal services.
Compelling a plan to draw on its limited stock of discounted
legal help thus has meaningful costs to the plan, and should
be compensable.14
We also reject JPR's argument that this case is governed
by Eddy v. Colonial Life Ins. Co. of America, 59 F.3d 201(D.C. Cir. 1995). In Eddy, we interpreted a different ERISA
fee-shifting provision, section 1132(g)(1). Under that provi-
sion, in any action under subchapter I of ERISA "by a
participant, beneficiary, or fiduciary," a court may, "in its
discretion," make an award of a "reasonable attorney's fee
and costs of action to either party." 29 U.S.C. s 1132(g)(1)
(1994). Subchapter I of ERISA can support a wide range of
actions, including actions to enforce Plan terms or to recover
benefits, suits for breach of fiduciary duty, actions to obtain
information from plans, and equitable proceedings. See 29
U.S.C. ss 1132(a), 1132(c). Eddy concluded that the pre-
sumption applied under civil-rights fee-shifting statutes that
successful plaintiffs should receive an attorney's fee award
should not apply to section 1132(g)(1). JPR points to Eddy's
observation that ERISA protects economic interests, while
the civil rights statutes protect "dignitary as well as economic
interests," 59 F.3d at 204, and claims that the same logic
argues against applying SOCM to this case.
Eddy was a straightforward application of Fogerty's com-
mand to consider the purposes of a fee-shifting statute in
__________
14 For this reason, the dissent is mistaken in suggesting that we
are offering a "windfall" to those plans that decide to keep the
excess of a fee award over the amount billed. Diss. op. at 2. If
only a limited amount of discounted legal help is available to a plan,
then drawing on that pool of legal help has an opportunity cost to
the plan. When the pool runs out, the plan will need the supposed
"windfall" to pay its lawyers.
deciding whether to apply caselaw developed under another
fee-shifting provision. See Eddy, 59 F.3d at 205 (citing
Fogerty ). ERISA's legislative history contained no evidence
that Congress's goals in enacting section 1132(g)(1) would
have been furthered by establishing a presumption in favor of
awards to successful plaintiffs. See id. (This is no surprise,
given the smorgasbord of proceedings in which section
1132(g)(1) may be invoked.) In the absence of legislative
history, Eddy considered the broad purposes of ERISA; it
cited the civil rights laws as an example of a category of
statute that would justify a presumption in favor of an award
of fees, and contrasted the dignitary interests protected by
the civil rights statutes with the economic interests furthered
by ERISA. In this case, by contrast, the legislative history
and specific purposes of section 1132(g)(2) both point towards
allowing market-rate fee awards. We therefore need not, as
we did in Eddy, resort to considering the general nature of
ERISA as a statute protecting economic interests.
2. Detecting Public-Spirited Discounts
Having decided that the policies underlying section
1132(g)(2) support an allowance to the Trustees of fees at
market rates, assuming the fees actually paid were discount-
ed for public-spirited reasons, the task remains of deciding
whether the fees paid did in fact reflect a public-spirited
discount by the counsel. We leave this task initially for the
district court, with a brief discussion of the guiding principles
of law.
We explained in Covington that the fee applicant bears the
burden of demonstrating that a fee incorporates a public-
spirited discount:
[T]he attorney must show that his or her custom of
charging reduced rates is in fact attributable to "public
spiritedness." Implicit in this line of inquiry is the
assumption that the law was not written to subsidize
attorneys who charge below-market rates because they
cannot command anything more. And a defendant is
free to rebut a fee claim on these terms in cases in which
this issue is posed. We recognize that, in some cases,
this may be a difficult line of inquiry, for an attorney who
cannot command market rates invariably will have a
"custom" of charging rates below the market. This
problem is diminished with respect to attorneys who
charge variable rates (both at and below the market, with
the latter attributable to public-spirited goals).
Covington, 57 F.3d at 1108. We concluded that it was within
the district court's "sound discretion" to determine whether
an attorney had public-spirited reasons for charging reduced
rates. Id.Deciding whether an attorney has a public-spirited reason
for a representation should not be all that difficult. An
important part of this inquiry will focus on whether the fee
charged in fact differs significantly from the market value of
the attorney's services. We discuss the process of deciding
the correct market rate for an attorney's services in the next
section of this opinion; because the district court may find it
easier to decide the market value of an attorney's work than
to analyze her motivations, it may be appropriate to perform
this analysis first.
Turning to the question of the attorney's motivations, we
emphasize that it is only necessary for the attorney to show
that public-spiritedness was a principal reason for the dis-
count, and not that it was the only reason. It is rare to find a
person who has only one reason for the things she does, and
the presence of other motivations need not vitiate an attor-
ney's public-spiritedness. Client development and attorney
training, for instance, are accepted corollaries of pro bono
representation. See Esther F. Lardent, Structuring Law
Firm Pro Bono Programs, The Law Firm and the Public
Good 59, 72 (Robert A. Katzmann ed., 1995). Nor does the
possibility of a fee award necessarily taint an attorney's
motives. Such an award will only be forthcoming if the
attorney wins, and will be no more than the amount the
attorney could have obtained for her time on the free market.
An attorney who was principally motivated by the desire to
make money would not rely on such awards, but would seek
out clients who were able to pay the full market rate, so that
she could be assured of being paid at that rate whether she
won or lost.
As officers of the court, attorneys will presumably not be
inclined to misrepresent their reasons for granting a discount,
and we assume that it will only rarely be necessary to second-
guess those reasons. An affidavit from the client may also
help to establish that the client understood that the fee it was
being charged reflected a public-spirited discount, even if it
may not have been expressly stated that this was the case.
In some circumstances, however, there may be a clear expla-
nation for a discount other than a desire to serve the public
good (or market forces, which are taken into account in the
market-rate inquiry). For instance, an attorney who gives a
discount to a relative would need to make a strong showing
that the discount was actually motivated by the public inter-
est, and not by familial ties. We leave to the district court, in
the first instance, the task of deciding the motivations of the
Funds' attorneys.
3. Determining the Market Rate
As we explained in Covington, a party who avers that the
rate charged by her attorneys incorporated a public-spirited
discount must offer evidence as to the correct market rate for
the attorneys' services. The party must both "offer evidence
to demonstrate [her] attorneys' experience, skill, reputation,
and the complexity of the case" and "produce data concerning
the prevailing market rates in the relevant community for
attorneys of reasonably comparable skill, experience, and
reputation." 57 F.3d at 1108. In setting the market rate, the
district court should consider what rate would be commensu-
rate with the attorneys' skill and experience, and with the
quality of the attorneys' work. To cite one of the dissent's
examples, if a firm uses a case as a training-ground for young
attorneys, the district court might find that the discounted
rate charged by the firm reflected the attorneys' inexperi-
ence, and is the actual market value of the attorneys' services.
Because the district court is most familiar with the quality of
the attorneys' work, we will defer to its reasonable assess-
ment of that work's market value.
Both the Trustees and JPR submitted evidence on prevail-
ing market rates and on the skill and experience of the
Funds' attorneys. Because the district court did not reach
the question of the appropriate market rate, we will not
discuss these two factors further; Covington contains a de-
tailed discussion of these questions. See Covington, 57 F.3d
at 1108-10. We leave the issue of the prevailing market rate
to the initial discretion of the district court.
C. Fees for This Appeal
Finally, the Trustees seek an award of the attorney's fees
expended in prosecuting this appeal. As a rule, in fee
disputes, if an award of attorney's fees is appropriate in the
underlying litigation, such an award is also appropriate for a
successful appeal (or defense of an appeal) of an issue relating
to the fee award itself. This is so because, for fee-shifting
provisions to serve their purposes (which may include, de-
pending on the particular provision at issue, improving access
to the courts, encouraging or discouraging certain types of
litigation, or making litigants whole), their beneficiaries must
be assured that they will be able to collect the fee awards that
they are due. See American Federation of Government
Employees v. FLRA, 994 F.2d 20, 22 (D.C. Cir. 1993) ("No
matter what the purpose of an attorney's fee provision ...
the availability of 'fees for fees' is essential to carrying out
Congress's goal in including the provision in the first place.").
This rule is fully applicable to fee awards under section
1132(g)(2). See Building Service Local 47 Cleaning Contrac-
tors Pension Plan v. Grandview Raceway, 46 F.3d 1392, 1404
(6th Cir.1995) (finding that fees for successful appeals of
attorney's fee disputes are recoverable under section
1132(g)(2)); Operating Engineers Pension Trusts v. B & E
Backhoe, Inc., 911 F.2d 1347, 1356 (9th Cir. 1990) (same).
The Trustees cannot be said to be successful in their appeal
of the attorney's fee issue, however, until they establish on
remand that their attorneys did indeed discount their fees for
public-spirited reasons. Cf. Hanrahan v. Hampton, 446 U.S.
754, 758-59 (1980) (party is a "prevailing party" under section
1988 only by virtue of success on the merits, not success in
obtaining remand on appeal); Waterman Steamship Corp. v.
Maritime Subsidy Board, 901 F.2d 1119, 1122 (D.C. Cir.
1990) (in a fee-shifting case under the Equal Access to Justice
Act, observing that "award of EAJA fees for corrective
efforts that yield no real-world benefit would reduce the
normal deterrent to litigative nit-picking").15 If the Trustees
do meet success on remand, the district court should make an
additional award of fees reflecting those legal expenses the
Trustees incurred in their appeal of the attorney's fees issue
(but not that of the audit fees issue).
III. Conclusion
We affirm the district court's conclusion that the Trustees
were not entitled to audit fees. The language of the Default
and Payment Clause cited by the Trustees does not cover the
routine audit that is at issue in this case. As to the auditor's
services in the litigation before the district court, we affirm
the district court's conclusion that the Trustees failed to
provide adequate documentation of the need for this work.
We conclude, however, that the district court was mistaken
in finding that section 1132(g)(2) necessarily limits the Trust-
ees to recovering their actual legal fees. If the Trustees can
establish that their attorneys charged them a discounted rate
for public-spirited reasons, they may recover a fee award at
the market rate, rather than at actual cost. If the district
court finds on remand that the Trustees are entitled to an
__________
15 Section 1132(g)(2) does provide that "in any action under this
subchapter ... in which a judgment in favor of the plan is awarded,
the court shall award the plan ... (D) reasonable attorney's fees
and costs of the action...." 29 U.S.C. s 1132(g)(2). The decision
of this court vacating and remanding the district court's ruling on
the fees issue is denominated a "judgment," see Fed. R. App. P. 36,
and could be said to be "in favor of the plan" in the sense that the
Trustees have achieved the relief that they sought from this court
on the issue they appealed. But a more natural reading of "judg-
ment" in this context limits it to the original proceeding before the
district court, in view of the subsequent listing of the content of the
award, which includes "the unpaid contributions," interest, and
liquidated damages, in addition to "attorney's fees and costs of the
action."
award of fees at market rates, the district court should also
make an award of fees incurred by the Trustees in bringing
their appeal of the attorney's fees issue.
We therefore vacate the district court's award of attorney's
fees, and remand for proceedings consistent with this opinion.
So ordered.
Randolph, Circuit Judge, concurring in part and dissent-
ing in part: I dissent from the portion of the majority
opinion relating to attorney's fees. In my view, employee
plans are not entitled to recover more than their actual cost
of legal services.
When a plan wins its case, the court "shall award" the plan
"reasonable attorney's fees and costs of the action, to be paid
by the defendant," 29 U.S.C. s 1132(g)(2). It is true that
language like this appears in 42 U.S.C. s 1988 (and countless
other fee-shifting statutes); that Blum v. Stenson, 465 U.S.
886 (1984), interpreted s 1988 to mean that a "reasonable"
fee should be calculated by using the market hourly rate
rather than the rate actually charged; and that Independent
Federation of Flight Attendants v. Zipes, 491 U.S. 754, 758
n.2 (1989), said that similarities in the language of fee-shifting
statutes are a "strong" indicator of similarities in meaning.
But Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994),
"squelched"--to use the Seventh Circuit's word--"[a]ny ten-
dency to treat all attorneys' fees statutes as if they were
insignificant variations on s 1988." Stomper v. Amalgamated
Transit Union, Local 241, 27 F.3d 316, 318 (7th Cir. 1994).
After Fogerty, "[d]ifferent statutes receive individual analy-
sis," or should. Id.As to the particular statute before us, it seems to me that a
cost-of-service award, in combination with the other provi-
sions in s 1132(g)(2), fully accomplishes "Congress's preemi-
nent purpose ... to keep ERISA plans solvent," maj. op. at
18. Victorious plans are entitled not only to reasonable
attorney's fees and the amount of the delinquent contribu-
tions, but also to double interest on those contributions and to
any other "legal and equitable relief ... the court deems
appropriate." 29 U.S.C. s 1132(g)(2)(A)-(E). In the face of
provisions furnishing ample deterrence for delinquent em-
ployers and ample compensation to victorious plans, I see no
good reason why a plan should also be awarded more than its
lawyers charged it. The majority thinks that unless market-
based fees are awarded, plans will be unable to hire "compe-
tent counsel." Maj. op. at 17. This strikes me as doubly
mistaken. For one thing it assumes that expensive counsel
necessarily equals competent counsel, an equation not borne
out by my experience. For another thing it contemplates
only one kind of fee arrangement--one requiring the client to
turn over the excess to its lawyer. We apparently have that
arrangement in this case. But in other cases the retainer
agreement may be such that the plan, rather than its below-
market-rate lawyer, keeps the windfall. I have no way of
knowing which is the more common fee agreement in these
sorts of cases and neither do the other judges on this court.
My colleagues charge the district court with the duty of
deciding whether the lawyers in this case gave the plan a
discount for "public-spirited reasons." This sounds like a rule
saying that market rates will be awarded only if the lawyers
never expected to receive market rates. A lawyer cannot be
acting out of public spirit in a case, I suppose, if he hopes or
expects to collect the full going rate. At least that is the
theory. Yet once the majority's rule goes into place, every
reasonable lawyer representing an employee benefit plan
against an employer--reasonable because the lawyer has read
my colleagues' opinion--will hope to recover fees at the
market rate. And that is scarcely the only difficulty. Con-
sider the conundrum posed by lawyers who had mixed mo-
tives for taking the case at less than the market rate.
Suppose, for instance, the law firm thought that by represent-
ing the plan at a discount, it was doing some public good;
that besides, the case would help fill in some gaps on the
firm's timesheets; that the case would be a useful training
ground for a young associate or two; that taking the case
might lead to, or help retain, full-fee paying clients; and that
if the firm won, it would wind up getting the going rate
anyway. I suspect that such a range of motives would
typically be uncovered if one probed deeply enough. Then no
one would be able to say where "public spiritedness" ended
and self interest began, or what imaginary scale determines
which outweighs the other. This only reinforces my belief
that s 1132(g)(2)--correctly interpreted--permits victorious
plans to be reimbursed for no more than their cost of legal
services. But as between a rule awarding market rates only
when the below-market lawyer satisfies the majority's motiva-
tional criterion, and a rule awarding market rates in every
case, the latter is clearly the lesser evil, if for no other reason
than it is better to clear up a mess than to create one.