Greenwood v. United States , 2017 U.S. Claims LEXIS 294 ( 2017 )

In the United States Court of Federal Claims
No. 10-15L
(Filed: April 10, 2017)
)
ROSALIE GREENWOOD, et al., )
Individually and as Representatives of )
a Class of Similarly Situated )
Individuals, ) Rails-to-Trails; Class Action; Final
) Approval of Settlement Agreement;
Plaintiffs, ) Attorneys’ Fees and Costs; Uniform
) Relocation Assistance and Real
v. ) Property Acquisition Policies Act of
) 1970, 42 U.S.C. § 4654(c) (“URA”);
THE UNITED STATES, ) Partial Final Judgment; RCFC 54(b)
)
Defendant. )
)
Steven M. Wald, St. Louis, MO, for plaintiffs. Michael J. Smith and J. Robert
Sears, St. Louis, MO, and Thomas S. Stewart and Elizabeth G. McCulley, Kansas City,
MO, of counsel.
Sean C. Duffy, Natural Resources Section, Environment & Natural Resources
Division, United States Department of Justice, Washington, DC, with whom was Jeffrey
H. Wood, Acting Assistant Attorney General, for defendant.
ORDER GRANTING FINAL APPROVAL OF PARTIES’ PROPOSED
SETTLEMENT AND GRANTING-IN-PART AND DENYING-IN-PART
PLAINTIFFS’ MOTION FOR ATTORNEYS’ FEES AND COSTS
Pending before the court in this rails-to-trails class action are the parties’ request
for final approval of the proposed settlement agreement pursuant to Rule 23(e) of the
Rules of the United States Court of Federal Claims (“RCFC”), and plaintiffs’ motion for
attorneys’ fees and costs under the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970, 42 U.S.C. § 4654(c) (“URA”). The court held a
telephonic fairness hearing in this matter on March 24, 2017 at which 6 plaintiffs were on
the call. During the hearing none of the plaintiffs spoke in opposition to the settlement
nor had any plaintiffs filed objections to the settlement. 1
With regard to the parties’ request for final approval of the proposed settlement
agreement, the court finds for the reasons discussed below that the proposed settlement
agreement is fair, reasonable, and adequate and warrants approval.
With regard to plaintiffs’ motion for attorneys’ fees and costs, the court for the
reasons discussed below grants-in-part and denies-in-part plaintiffs’ request. In this
connection, the court also finds for the reasons discussed below that it may resolve
plaintiffs’ motion for attorneys’ fees and costs without providing plaintiffs with any
additional notice. As discussed further below, the court finds that the notice sent to
plaintiffs regarding the settlement and request for fees met the requirements of RCFC
23(h). RCFC 23(h)(1) states that “[n]otice of the motion [for attorneys’ fees and costs in
a certified class action] must be served on all parties and, for motions by class counsel,
directed to class members in a reasonable manner.”
Accordingly, the parties’ proposed settlement is APPROVED and plaintiffs’
motion for fees and costs is GRANTED-IN-PART and DENIED-IN-PART.
1
As discussed infra, the court received one comment to the effect that the plaintiff’s property
had increased in value since the date of the taking, but the comment did not object to the
settlement amount based on the valuation as of the date of the taking.
2
I. BACKGROUND AND PROCEDURAL HISTORY
This rails-to-trails case arises from the conversion of a railroad corridor in
Lawrence County, Arkansas to a recreational trail. This action was brought on behalf of
53 landowners who collectively own 78 parcels of land along the 6.70-mile corridor. On
March 5, 2013, upon agreement of the parties, the court certified this matter as a class
action and adopted the parties’ proposed schedule for providing notice to class members
and preparation of a claims book (ECF No. 30). Thereafter, the parties engaged in
extensive discovery and settlement discussions.
The parties retained an expert real estate appraiser, Sara W. Stephens, CRE, MAI,
who assisted in valuing the easements so that the parties could negotiate a compromise
settlement of all of the claims. Pls.’ Mot. for Prelim. Approval of Settlement, Approval
of Notice to Class Members Regarding Proposed Class Action Settlement, and Req. to
Set Date for Public Hr’g under RCFC 23(e) at 2-3 (“Pls.’ Mot. for Prelim. Approval”)
(ECF No. 81); Def.’s Resp. to Pls.’ Mot. for Prelim. Approval 2 (ECF No. 82); Joint
Status Report filed Nov. 5, 2013 (ECF No. 35). The parties instructed Ms. Stephens to
estimate the fair market value of representative parcels in their condition before and after
the Notice of Interim Trail Use was issued. Pls.’ Mot. for Prelim. Approval 3; Def.’s
Resp. to Pls.’ Mot. for Prelim. Approval 2. In the “before” condition, the parcels were
valued as unburdened by an easement, and in the “after” condition the parcels were
valued subject to an easement for recreational trail use, with the possibility of future
reactivation of rail service. Pls.’ Mot. for Prelim. Approval 3; Def.’s Resp. to Pls.’ Mot.
for Prelim. Approval 2. The parties asked Ms. Stephens to prepare the appraisals in
3
conformance with the Uniform Standards of Professional Appraisal Practice and the
Uniform Appraisal Standards for Federal Land Acquisitions. Pls.’ Mot. for Prelim.
Approval 3; Def.’s Resp. to Pls.’ Mot. for Prelim. Approval 2. The parties also asked
Ms. Stephens to assist in identifying representative parcels. Pls.’ Mot. for Prelim.
Approval 3; Def.’s Resp. to Pls.’ Mot. for Prelim. Approval 2.
Counsel for the parties and Ms. Stephens conducted a site visit on February 20,
2014. Pls.’ Mot. for Prelim. Approval 3; Def.’s Resp. to Pls.’ Mot. for Prelim. Approval
2; Joint Status Report filed Mar. 24, 2014 (ECF No. 38). During the site visit, counsel for
the parties and Ms. Stephens inspected the length of the corridor, and viewed all of the
properties at issue in this case. Pls.’ Mot. for Prelim. Approval 3; Def.’s Resp. to Pls.’
Mot. for Prelim. Approval 2. In addition, class counsel called attention to unique parcels
and legal and factual issues that class counsel believed should be addressed in the
appraisal process. Pls.’ Mot. for Prelim. Approval 3; Def.’s Resp. to Pls.’ Mot. for
Prelim. Approval 2. Ms. Stephens subsequently returned to view the properties at issue
without counsel present. Pls.’ Mot. for Prelim. Approval 3; Def.’s Resp. to Pls.’ Mot. for
Prelim. Approval 2.
The parties agreed to group similarly situated properties into seven categories
based upon location, highest and best use, and other characteristics. Pls.’ Mot. for
Prelim. Approval 3; Def.’s Resp. to Pls.’ Mot. for Prelim. Approval 3. These included
three residential categories, three commercial/industrial categories, and one agricultural
category. Pls.’ Mot. for Prelim. Approval 3; Def.’s Resp. to Pls.’ Mot. for Prelim.
Approval 3. The parties and Ms. Stephens selected a representative parcel from each of
4
the seven categories and Ms. Stephens prepared and provided an appraisal report for each
representative parcel in August to October 2014. Pls.’ Mot. for Prelim. Approval 3-4;
Def.’s Resp. to Pls.’ Mot. for Prelim. Approval 3. The parties reviewed and analyzed the
appraisal reports and agreed to use those appraisals for settlement purposes. Pls.’ Mot.
for Prelim. Approval 4; Def.’s Resp. to Pls.’ Mot. for Prelim. Approval 3.
The parties also retained a mapping expert to measure the frontage for each of the
parcels along the corridor to calculate the area of land allegedly taken. Pls.’ Mot. for
Prelim. Approval 4; Def.’s Resp. to Pls.’ Mot. for Prelim. Approval 3; Joint Status Report
filed Mar. 24, 2014 (ECF No. 38). The frontage measurements were provided to the
parties and Ms. Stephens. Pls.’ Mot. for Prelim. Approval 4; Def.’s Resp. to Pls.’ Mot.
for Prelim. Approval 3. The appraised values of the representative parcels were applied
to the remaining parcels using the frontage measurements to estimate the value of the
easement allegedly taken from the remaining properties in each category. Pls.’ Mot. for
Prelim. Approval 4; Def.’s Resp. to Pls.’ Mot. for Prelim. Approval 3.
Class counsel on October 26, 2016 mailed a letter to each class member informing
each class member of the proposed settlement agreement and class counsel’s motion for
URA fees. Pls.’ Mot. for Prelim. Approval 7.
Thereafter, on December 1, 2016, class counsel filed a motion for preliminary
approval of the settlement, approval of notice to class members regarding the proposed
class action settlement, and request for a public hearing under RCFC 23(e) (ECF No. 81).
The parties’ proposed settlement agreement was filed with the court on December 1,
2016. Pls.’ Mot. for Prelim. Approval Ex. B (ECF No. 81-2). Under the settlement, class
5
members would receive a total of $1,025,595.00, of which $611,795.00 is principal for
the value of the land allegedly taken and $413,800.00 is interest as of August 31, 2016.
Pls.’ Mot. for Prelim. Approval Ex. B ¶ 4. The amount of principal to be paid for each
claim was set forth in Attachment A to the proposed settlement agreement and attached to
plaintiffs’ motion. Pls.’ Mot. for Prelim. Approval Ex. B Attach. A. The government did
not oppose preliminary approval of the class action settlement but asked the court to
adopt different notice and forms than proposed by plaintiffs’ counsel (ECF No. 82).
On January 25, 2017, the court granted preliminary approval of the parties’
proposed settlement and scheduled a public fairness hearing for March 24, 2017 (ECF
No. 86). With regard to the dispute over the notice and forms to be sent to the plaintiffs,
the court rejected the government’s request that class counsel create a website for 53
plaintiffs to review the parties’ settlement methodology and motion for fees and costs.
Instead, the court approved a notice that informed the plaintiffs of the terms of the
settlement and provided them with the right and information needed to request copies of
all relevant materials, including the motion for attorneys’ fees, from class counsel. In
nearly all other respects, the court adopted the government’s proposed notice. The court
determined that this approach satisfied the requirements of RCFC 23. The various notice
provisions in the letter to be sent to plaintiffs stated as follows:
You may request additional information regarding the proposed
settlement from Class Counsel, including: a copy of the representative
appraisals applicable to the claims of class members, a spreadsheet
identifying the properties in each appraisal group and the class member’s
property and showing how the value of each property in that group was
extrapolated or derived from the appraisal of the representative parcels, a
6
copy of the proposed Settlement Agreement, and the Parties’ filings on
Class Counsel’s motion for attorney’s fees.
ECF No. 87-1 at 2 (emphasis added).
The notice also specifically informed class members of their right to attend the
March 24, 2017 fairness hearing and comment on the pending settlement and motion for
attorneys’ fees and costs. The notice stated:
Members of the class, as well as members of the public, are invited to
attend and participate in person or by telephone, in a public hearing on
Friday, March 24, 2017 at 1:00 PM central time (2:00 PM eastern time)
before the Honorable Nancy B. Firestone, United States Court of Federal
Claims Judge.
...
Any member of the class who would like an opportunity to comment on the
proposed settlement or Class Counsel’s motion for an award of attorney’s
fees at the hearing must advise the Court in writing at the address listed
below by March 6, 2017.
Id. at 2-3 (emphasis in original).
Under a section titled “ATTORNEY’S FEES,” the notice to class members
further stated:
The Court will make a separate determination regarding the reimbursement
of your attorney’s fees and costs. Because you will not pay any costs, Class
Counsel will retain the reimbursement for costs which they have incurred
as out-of-pocket expenses in this litigation. Class Counsel has requested
that the Court award it reasonable fees pursuant to the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. §
4654(a) (“URA”). The United States has agreed to reimburse the class for
URA fees.
Your legal rights are affected whether you act or do not act. Read this
notice carefully. If you do not take the opportunity to object to the
proposed settlement either in writing or during the forthcoming
hearing, you may be deemed to have waived your right to later object
7
and to appeal from any court order approving the settlement and/or
from any judgment that may be entered in this case.
You may obtain a copy of the proposed Settlement Agreement and the
Parties’ filings on Class Counsel’s motion for attorney’s fees by
requesting a copy from Class Counsel. These requests may be made by
calling Class Counsel at 1-314-720-0220 or sending an email to Class
Counsel at wald@swm.legal.
Id. at 3 (emphasis in original).
Under a section titled “YOUR LEGAL RIGHTS AND OPTIONS IN
THIS CLASS ACTION,” the notice informed class members that they were not
required to take any additional action as a class member at the time but “[a]s a
member of the Class, you may approve of, object to, or comment on the proposed
settlement and Class Counsel’s request for fees.” Id. at 4.
With regard to requesting additional information, the notice reiterated that:
This notice is intended to provide you with general information
about the proposed settlement of this class action. You may request
additional information about the terms of the proposed settlement,
including information about how the settlement amount for your
claim was determined, or information concerning Class Counsel’s
request for fees, by contacting Class Counsel, Steven M. Wald of
the law firm Stewart, Wald & McCulley by telephone at 1-314-720-
0220 or by sending an email to wald@swm.legal.
Id. (emphasis added).
For class members who might want to participate in the fairness hearing,
the notice stated:
As a class member, if you choose to provide written comments, you
may (but are not required to) ask to speak in Court about the fairness
of the proposed Settlement Agreement and Class Counsel’s request
for fees. The space to request such permission is included in section
“C” of the attached form. All forms must be sent to the address listed
8
above and postmarked or faxed to the fax number listed above by
March 6, 2017.
Id. (emphasis removed).
Accompanying the notice for each class member were (1) a disclosure
statement, and (2) a form titled “INDIVIDUAL CLASS MEMBER’S
COMMENTS ON PROPOSED SETTLEMENT, CLASS COUNSEL’S
REQUEST FOR ATTORNEY’S FEES AND/OR REQUEST TO ADDRESS
THE COURT AT PUBLIC HEARING.” Id. at 5-6. The form offered class
members (a) the option of approving or rejecting the proposed settlement and
requesting to appear at the fairness hearing, (b) a space to provide “COMMENTS
/ OBJECTIONS ON THE PROPOSED SETTLEMENT OR CLASS
COUNSEL’S REQUEST FOR FEES,” and (c) the option of requesting to speak
at the fairness hearing. Id. at 6-7. A note regarding this space for comments on
the form explained:
If you do not intend to appear at the hearing to state your objections
on the record, you must submit specific objections in writing, or risk
waiving those objections for the purposes of an appeal. Attach
additional sheets setting forth your comments/objections if needed.
Id.As noted, the court held a hearing on March 24, 2017. The court
received 40 notices of approval and 1 comment. The comment, as noted in
footnote 1, related to the timing of the valuation of the property and was
discussed at the hearing. None of the 6 plaintiffs who participated at the
hearing made any comments. Only the government raised an issue at the
9
hearing concerning the adequacy of the notice with regard to plaintiffs’
motion for attorneys’ fees and costs under RCFC 23(h) which the court has
rejected.
II. DISCUSSION
A. The Settlement Agreement is Fair, Reasonable, and Adequate
Under RCFC 23(e), “[t]he claims, issues, or defenses of a certified class may be
settled, voluntarily dismissed, or compromised only with the court’s approval.” The
court may approve a proposed settlement “only after a hearing and on finding that it is
fair, reasonable, and adequate.” RCFC 23(e)(2); see also Haggart v. Woodley, 809 F.3d
1336, 1348-49 (Fed. Cir. 2016), cert. denied, 136 S. Ct. 2509 (2016). The court has
discretion to accept or reject a proposed settlement, but it may not alter the proposed
settlement, nor may it decide the merits of the case or resolve unsettled legal questions.
Adams v. United States, 107 Fed. Cl. 74, 75-76 (2012) (citing Evans v. Jeff D., 475 U.S.
717, 726-27 (1986); Nat’l Treasury Emps. Union v. United States, 54 Fed. Cl. 791, 797
(2002)).
There is no definitive list of factors that the court must apply in considering a class
action settlement. Raulerson v. United States, 108 Fed. Cl. 675, 677 (2013). However,
in determining whether a settlement agreement is “fair, reasonable, and adequate,” courts
have found the following factors instructive:
1. The relative strengths of plaintiff’s case compared to the proposed
settlement;
10
2. The recommendation of the counsel for the class regarding the proposed
settlement, taking into account the adequacy of class counsel’s
representation of the class;
3. The reaction of the class members to the proposed settlement, taking
into account the adequacy of notice to the class members of the
settlement terms;
4. The fairness of the settlement to the entire class;
5. The fairness of the provision for attorney fees; and
6. The ability of the defendants to withstand a greater judgment, taking
into account whether the defendant is a governmental actor or private
entity.
E.g., Sabo v. United States, 102 Fed. Cl. 619, 627 (2011) (quotation marks and citation
omitted).
As discussed in the court’s January 25, 2017 order granting preliminary approval
of the proposed settlement agreement (ECF No. 86), the court does not find any evidence
of collusive activity, preferential treatment, or other deficiencies in the proposed
settlement. In this case, in reaching the proposed settlement agreement, the parties
conducted discovery, a thorough joint appraisal of the fair market value of class
members’ property interests for the alleged taking, and negotiations indicating no
preferential treatment or other deficiencies. Pls.’ Mot. for Prelim. Approval 2-4; Def.’s
Resp. to Pls.’ Mot. for Prelim. Approval 2-3.
In addition, consistent with the Federal Circuit’s decision in Haggart, 809 F.3d at
1359, the proposed agreement does not provide for plaintiffs’ attorneys’ fees to be paid
out of the settlement proceeds under the “common fund” doctrine. See also Sabo, 102
11
Fed. Cl. at 630; Barnes v. United States, No. 04-1335C, 2010 WL 1904503, at *2 (Fed.
Cl. May 7, 2010).
The court received forms approving the settlement from 40 of the 53 claimants.
See Notice of Class Members Responses 1 (ECF No. 94, filed Mar. 17, 2017). As noted,
only one class member, WRW Oil Co., Inc., through its president Douglas Wayland,
commented on the settlement agreement. Mr. Wayland wrote: “The land was appraise[d]
in 2004, land has taken a large jump in the last 13 years.” Id. Ex. A at 77-78. Mr.
Wayland was a participant at the March 24, 2017 fairness hearing but did not speak. The
court has considered WRW Oil’s comment and finds that it does not suggest that the
settlement is unfair, unreasonable, or inadequate. Although WRW Oil might well be
correct that the property taken has increased in value, as counsel discussed at the hearing,
WRW Oil is entitled to compensation based on the property’s value at the date of the
taking and will receive an amount that is commensurate with the value at that time. See,
e.g., Horne v. Dep’t of Agric., 135 S. Ct. 2419, 2432 (2015) (“The Court has repeatedly
held that just compensation normally is to be measured by the market value of the
property at the time of the taking.” (citation omitted)).
In view of the foregoing, the court finds that the parties’ settlement agreement is
fair, reasonable, and adequate and warrants approval.
B. Attorneys’ Fees and Costs
RCFC 23(h) provides that “[i]n a certified class action, the court may award
reasonable attorney’s fees and nontaxable costs that are authorized by law or by the
parties’ agreement.”
12
The URA, 42 U.S.C. § 4654(c), provides that:
The court rendering a judgment for the plaintiff in a proceeding brought
under section 1346(a)(2) or 1491 of Title 28, awarding compensation for
the taking of property by a Federal agency, or the Attorney General
effecting a settlement of any such proceeding, shall determine and award or
allow to such plaintiff, as a part of such judgment or settlement, such sum
as will in the opinion of the court or the Attorney General reimburse such
plaintiff for his reasonable costs, disbursements, and expenses, including
reasonable attorney, appraisal, and engineering fees, actually incurred
because of such proceeding.
The Federal Circuit has found that under a fee-shifting statute such as the URA,
“the court calculates awards for attorney fees using the ‘lodestar method’ which is ‘the
product of reasonable hours times a reasonable rate.’” Haggart, 809 F.3d at 1355
(quoting City of Burlington v. Dague, 505 U.S. 557, 559-60 (1992)). “A fee award that is
determined through the use of a lodestar calculation carries a ‘strong presumption’ that it
represents a ‘reasonable’ attorney fee.” Biery v. United States, 818 F.3d 704, 710 (Fed.
Cir. 2016), cert. denied, 137 S. Ct. 389 (2016) (quoting Bywaters v. United States, 670
F.3d 1221, 1229 (Fed. Cir. 2012)). “Departures from the lodestar figure, once calculated,
must be supported by ‘specific evidence’ justifying the award.” Id. (quoting Perdue v.
Kenny A. ex rel. Winn, 559 U.S. 542, 553 (2010). “Ultimately, a fee award must ‘be
adequate to attract competent counsel,’ but must not “produce windfalls to attorneys.’”
Id. (quoting Hensley v. Eckerhart, 461 U.S. 424, 444 (1983)).
1. Rates
Plaintiffs argue that they are entitled to reasonable compensation for class counsel
at hourly rates of up to $475 for partners, $275 for associates, and $150-$175 for
paralegals. Plaintiffs argue that this court has approved the requested rates as reasonable
13
in other recent rails-to-trails class actions. See Thomas v. United States, No. 10-459L,
2014 WL 1347221, at *4 (Fed. Cl. Apr. 4, 2014) (awarding fees based on an hourly rate
of $475 for Steven M. Wald and J. Robert Sears for work performed from 2009 through
2013); Adkins v. United States, No. 09-503L (Opinion on Fees and Costs, ECF No. 140,
filed Jan. 30, 2014) (awarding fees based on hourly rates of $475 for Thomas S. Stewart
and $375 for Elizabeth G. McCulley for work performed from 2009 through 2013);
Gregory v. United States, 110 Fed. Cl. 400, 406 (2013) (awarding fees based on hourly
rates of $475 for Mr. Stewart and other partners, and $375 for Ms. McCulley “to reflect
her transition from associate to partner,” for work performed from 2009 through 2013).
Plaintiffs also provide several affidavits from attorneys who state that they have personal
knowledge and experience concerning prevailing billable hour rates or complex
commercial litigation in Kansas City and St. Louis and that class counsel’s requested
rates are reasonable. See Pls.’ Fees Mot. Exs. C-G (ECF No. 76).
Plaintiffs acknowledge that in contingent fee agreements between class counsel
and 4 of the 53 class members, signed in 2009 and 2010, the class members agreed to pay
the greater of (a) 35% of the “gross settlement or verdict,” or (b) “statutory attorneys’
fees as determined by the appropriate court and to be paid by the United States, which
[the class members] understand and agree to be $375 per hour for [Partners], $350 per
hour for Of Counsel attorneys, $225 to $275 per hour for associate attorneys, and $150
per hour for paralegals.” Def.’s Resp. to Pls.’ Fees Mot. Ex. 1 at 2-5 (ECF No. 83). The
agreements further state that the class members “understand the statutory attorneys’ fees
are based on the Law Firm’s hourly rate.” Id. Plaintiffs argue that these rates are not
14
binding on the court on the grounds that the agreements expressly state that statutory
attorneys’ fees will be “determined by the appropriate court” and in any case are only one
factor the court may consider in determining whether a fee is reasonable. See Bywaters,
670 F.3d at 1231.
The government argues that plaintiffs should not be permitted to collect fees from
the United States at higher rates than class counsel would have collected from its clients
and thus the rates stated in the contingent fee agreements should serve as a ceiling for the
hourly rates class counsel may be permitted to collect in this case. The government also
argues that plaintiffs’ requested rates above $375 per hour are unreasonable as they are
higher than rates awarded in other fee-shifting matters in the same location and
timeframe for attorneys with comparable experience.
The court has examined plaintiffs’ affidavits and the attorneys’ fee award cases
plaintiffs cite in support of the claimed rates and finds that the work of class counsel on
this rails to trails case from 2009 to 2010 should be reimbursed at the rates stated in class
counsel’s contingent fee agreements with class members and at the requested rates for
later years. Plaintiffs are correct that the court is not bound by the fees quoted in the
contingent fee agreements but may consider those rates. In Bywaters, 670 F.3d at 1231,
the Federal Circuit found that a “fee agreement between [class members] and their
counsel . . . is not a proper basis for reducing the lodestar figure, though it may be taken
into account in the lodestar calculation.” Id. The Federal Circuit and the Supreme Court
have noted that contingent-fee agreements may “aid in determining reasonableness,”
even if “such an agreement does not impose an ‘automatic ceiling’ on an award of
15
attorneys’ fees.” Id. at 1232 n.7 (quoting Blanchard v. Bergeron, 489 U.S. 87, 93
(1989)). The court finds that the contingent fee rate represented a reasonable rate when
this litigation was first initiated in 2009 on the grounds that the contingent fee agreements
state that the rates are based on the law firm’s then current billing rates.
At the beginning of the litigation, when the agreements were signed, in 2009 and
2010, the quoted rates were consistent with partner, associate, and paralegal rates for
Kansas City and St. Louis firms and those rates will be used to guide the court. Thus, for
2009 and 2010, the rates for plaintiffs’ attorneys’ fee award is $375 per hour for partners,
$275 per hour for associates, and $150 per hour for paralegals.
The court is persuaded by plaintiffs that the fees they seek for 2011 and later years
are reasonable and consistent with fee awards in comparable cases for attorneys in and
around Kansas City and St. Louis. See Tussey v. ABB, Inc., 746 F.3d 327, 340-41 (8th
Cir. 2014) (affirming award of attorneys’ fees at “blended rate” of $514.60 per hour for
partners and associates in ERISA action); Betton v. St. Louis Cty., Mo., 405 F. App’x 101
(8th Cir. 2010) (per curiam) (affirming award of attorneys’ fees at $450 per hour for
partners in Missouri Human Rights Act case); Exec. Affiliates, Inc. v. AAF-McQuay, Inc.,
No. 4:12-CV-175-CEJ, 2013 WL 6571595, at *3 (E.D. Mo. Dec. 13, 2013) (awarding
attorneys’ fees at $450 per hour for partner in tort case); Albright v. Bi-State Dev. Agency
of Missouri-Illinois Metro. Dist., No. 4:11-CV-01691-AGF, 2013 WL 4855304, at *8
(E.D. Mo. Sept. 11, 2013) (awarding attorneys’ fees at $500 per hour for lead counsel in
class action under the Fair and Accurate Credit Transactions Act); United States ex rel.
Joe Liotine v. CDW-Government, Inc., No. 3:05-CV-00033-DRH-PMF, 2013 WL
1611267176, at *11 (S.D. Ill. May 17, 2013) (awarding attorneys’ fees at $525 per hour for
senior partners in False Claims Act case); Holland v. City of Gerald, Mo., No. 4:08-CV-
707-HEA, 2013 WL 1688300, at *4 (E.D. Mo. Apr. 18, 2013) (awarding attorneys’ fees
at $450 per hour for partners in civil rights litigation); Wilfong v. Rent-A-Center, 2002
U.S. Dist. LEXIS 28016, *1 (S.D. Ill. Oct. 4, 2002) (awarding attorneys’ fees at $400 per
hour for partners in employment discrimination class action). The court is also mindful
that this court has awarded the higher requested rates in similar cases. See Thomas, 2014
WL 1347221, at *4; Adkins, No. 09-503L (Opinion on Fees and Costs, ECF No. 140,
filed Jan. 30, 2014); and Gregory, 110 Fed. Cl. at 406. Thus, the hourly rates awarded
are $475 for partners, $275 for associates, and $150 to $175 for paralegals for time billed
on January 1, 2011 forward.
2. Hours
Plaintiffs bear the burden of proving that the number of hours submitted for
payment is reasonable and should not include hours that are “excessive, redundant, or
otherwise unnecessary.” Hensley, 461 U.S. at 434, 437. Plaintiffs request an award of
fees associated with more than 1,174.50 hours of attorney time, including: (1) 911.8
hours of work class counsel performed up to August 31, 2016, the date the parties filed a
joint status report (ECF No. 70) requesting that the court set a briefing schedule for
plaintiffs’ motion for attorneys’ fees; (2) 191.8 hours of work on plaintiffs’ initial fee
motion and reply; (3) 70.9 hours of work class counsel performed after August 31, 2016
on other “matters necessary to the litigation,” including “additional class management
and preparation of the recent motion and reply in support of preliminary approval of the
17
class action settlement”; and (4) additional hours class counsel spent or will spend
closing this case. The government asserts that plaintiffs’ requested number of hours is
unreasonable. Below the court addresses in turn each category of disputed hours.
a. Prior to Filing the Complaint
The government argues that the court should exclude 62.7 hours class counsel
spent on what the government characterizes as non-reimbursable client development and
background research activities, consisting of 32.0 partner hours, 20.8 associate hours, and
9.9 paralegal hours.
Plaintiffs argue that they are entitled to reimbursement for all of the hours class
counsel spent investigating and building the class members’ claims prior to the filing of
the complaint in this case, which plaintiffs assert are not non-reimbursable “client
development” activities.
The court agrees with plaintiffs that class counsel’s work investigating plaintiffs’
claims, establishing the facts necessary to file a case on behalf of a class, prior to the
filing of the complaint was not client development but necessary to ensure proper
property claims and critical to every plaintiff achieving an award in this case. Plaintiffs
have provided the court with detailed entries regarding the work performed in order to
file the complaint. This court has found that while hours spent on client development are
not the type of hours that are typically billed to a paying client, and therefore should be
excluded from a reimbursement request, the URA allows for reimbursement of a
reasonable number of hours spent preparing a complaint. See Thomas, 2014 WL
181347221, at *2. The court finds the hours spent in preparing the complaint are
reimbursable.
b. Vague Descriptions
The government objects to plaintiffs’ request for fees associated with 3.6 hours
class counsel spent on vaguely described activities, consisting of 2 partner hours and 1.6
associate hours. Plaintiffs assert that the contested time entries related to case strategy
and investigation are sufficiently detailed, even though no specific client is identified, and
should be fully reimbursable.
“Where the documentation of hours is inadequate, the . . . court may reduce the
award accordingly.” Hensley, 461 U.S. at 433. After reviewing the time entries at issue,
the court finds that plaintiffs may not be reimbursed for fees associated with the 2 hours
class counsel spent on “[r]eview and planning” of the case and “[w]ork on strategy.” See
Thomas, 2014 WL 1347221, at *4 (finding that hours represented by similar entries were
not reimbursable because the entries were too vague and appeared to be covered by other
hours plaintiffs claimed). The remaining 1.6 hours for “[i]nvestigate and analyze class
members’ claims” are reimbursable. Id.c. Travel
The government contends that plaintiffs’ request for fees associated with travel
time should be reduced. The government argues that 68.8 hours of travel time, consisting
of 19 hours of partner time and 49.8 hours of associate time, should be reduced by 50%
in light of case law reducing the amount a prevailing plaintiff can recover for an
19
attorney’s travel time on the grounds that while traveling the attorney was not otherwise
working on client-billable tasks. 2
Plaintiffs argue that because nearly all of the travel in this case was by car,
foreclosing the possibility of class counsel doing any other work, those hours should be
reimbursable in full.
The court agrees with plaintiffs that they are entitled to attorneys’ fees associated
with hours class counsel spent traveling. Plaintiffs rely on Crumbaker v. Merit Systems
Protection Board, 781 F.2d 191, 193 (Fed. Cir. 1986), modified on other grounds, 827
F.2d 761 (Fed. Cir. 1987), to support their position that class counsel’s travel time should
be fully reimbursed. In Crumbaker, the Federal Circuit found that the appropriate billing
rate for time spent traveling “is the same billing rate as would be appropriate for the other
time the lawyers put in on the case.” Id. (quoting Henry v. Webermeier, 738 F.2d 188,
194 (7th Cir. 1984)). The Federal Circuit adopted the Seventh Circuit’s reasoning that
“[w]hen a lawyer travels for one client he incurs an opportunity cost that is equal to the
fee he would have charged that or another client if he had not been traveling.” Id.(quoting Henry, 788 F.2d at 194). However, the Federal Circuit noted that unnecessary
or unreasonable travel time “should be subtracted out.” Id. (quoting Henry, 788 F.2d at
2
The government also argues that 6.8 partner hours for “[p]reparation for research at [the
National Archives and Records Administration (“NARA”)] and travel to College Park, MD” on
June 23, 2009 should be eliminated on the grounds that it was non-compensable client
development and background research activity. Plaintiffs note that as part of the verification of
individual claims and work with title documents and issues, class counsel identified and obtained
“[v]aluation maps showing the original source conveyances . . . from the National Archives in
College Park, Maryland,” which “were then electronically digitized and overlain on parcel maps
created by Plaintiffs’ Counsel.” Pls.’ Fees Mot. 10. For the reasons above, the court agrees with
plaintiffs that this work prior to the filing of the complaint is reimbursable.
20
194). Therefore, attorney travel time may be fully compensable but plaintiffs must still
show that the requested hours are reasonable. The court agrees with plaintiffs that the
hours class counsel spent travelling were reasonable and therefore reimbursable. See id.
In this case, because the transit time was spent driving, it would not have been possible
for class counsel to work while in transit and thus they are entitled to their fees while in
transit.
d. Hours Spent on Unsuccessful Arguments Regarding Plaintiffs’ Proposed
Notice to Class Members and Plaintiffs’ Motion for Fees and Costs
The government asserts that plaintiffs’ request should be reduced by 11.9 hours on
the grounds that the court did not adopt plaintiffs’ version of the notice to class members
regarding the proposed class action settlement. The government also argues that
plaintiffs should not be allowed to recover attorneys’ fees associated with any of the
191.8 hours class counsel spent on plaintiffs’ fees motion, or at least the time spent on
unsuccessful arguments. The government identifies 11 additional hours it claims should
be characterized as pertaining to plaintiffs’ fees motion and should be excluded on that
basis.
The court agrees with the government that plaintiffs may not recover fees
associated with time spent on unsuccessful arguments. This court may eliminate hours or
reduce an award “based on the degree of success obtained.” Biery, 818 F.3d at 712.
First, plaintiffs’ requested hours for time class counsel spent on plaintiffs’ fees motion
and reply in support of the motion are not all reimbursable. Plaintiffs initially proposed
that class counsel could collect contingent fees pursuant to agreements with four class
21
members or treat the settlement as a common fund and recover an unspecified contingent
fee. However, plaintiffs withdrew the request for contingent fees pursuant to the
agreements with four class members. See Pls.’ Reply in Support of Fees Mot. 1 (ECF
No. 85). Plaintiffs also initially requested that the court apply the “common fund
doctrine,” which the court found was foreclosed by the Federal Circuit’s decision in
Haggart, 809 F.3d at 1354-59. See Order on Plaintiffs’ “Notice Regarding Class
Counsel’s Position” (ECF No. 89, filed Jan. 30, 2017). Therefore, plaintiffs’ requested
hours for time class counsel spent on these arguments must be eliminated.
In addition, the court agrees with the government that plaintiffs’ requested hours
should be reduced to reflect their partial success with regard to the parties’ disagreement
about which notice and forms to use to inform class members of the proposed settlement
in this case. The court approved the government’s version of the notice and forms with
the exception of references to a proposed website and the references to class counsel’s
request for contingent fees. See Order Granting Preliminary Approval to Parties’
Proposed Settlement and Notice Forms to Class Members and Scheduling a Public
Fairness Hearing 3-5 (ECF No. 86, filed Jan. 25, 2017). Plaintiffs’ requested hours
should be reduced by 50% for this work because class counsel could have objected only
to the government’s proposal to create a website and thus saved time spent briefing other
issues regarding the adequacy of their proposed notice. Plaintiffs are entitled to their fees
and costs for this round of briefing on fees and costs for continuing litigation and the
court understands that those amounts may need to be recalculated.
22
3. Notice was Directed to Class Members as Required by
RCFC 23(h)
Finally, as discussed above, the court finds that the government’s contention
raised for the first time at the fairness hearing regarding plaintiffs’ compliance with
RCFC 23(h) must be rejected. RCFC 23(h) sets out the following procedures for
approving a motion for attorneys’ fees and nontaxable costs:
(1) A claim for an award must be made by motion under RCFC 54(d)(2),
subject to the provisions of this subdivision (h), at a time the court sets.
Notice of the motion must be served on all parties and, for motions by class
counsel, directed to class members in a reasonable manner.
(2) A class member, or party from whom payment is sought, may object to
the motion.
(3) The court may hold a hearing and must find the facts and state its legal
conclusions under RCFC 52(a).
RCFC 23(h).
At the hearing, plaintiffs’ counsel argued that RCFC 23(h) only requires that
“[n]otice of the motion,” not actual copies of the motion and related filings, “must be
served on all parties and, for motions by class counsel, directed to class members in a
reasonable manner,” and that the notice sent to class members more than satisfied that
requirement. The court agrees. As detailed above, the notice and forms provided to class
members expressly identified plaintiffs’ motion for attorneys’ fees and costs and
provided an opportunity to “request additional information regarding the proposed
settlement from Class Counsel, including . . . the Parties’ filings on Class Counsel’s
motion for attorney’s fees.” E.g., ECF No. 87-1 at 2. In Haggart, the Federal Circuit
noted that “[c]ourts have approved notices that did not contain some of the precise details
23
of the settlement, such as the distribution or allocation plan, or the amount of attorney
fees to be taken out, as long as sufficient contact information is provided to allow the
class members to obtain more detailed information about those matters.” 809 F.3d at
1348 (quoting Charles A. Wright & Arthur R. Miller, Settlement, Voluntary Dismissal, or
Compromise of Class Actions—Settlement Notice, 7B Fed. Prac. & Proc. Civ. § 1797.6
(3d ed. 2004)). Similarly, the Advisory Committee notes regarding the analogous notice
requirement under Rule 23(h)(1) of the Federal Rules of Civil Procedure state:
Besides service of the motion on all parties, notice of class counsel’s
motion for attorney fees must be ‘directed to the class in a reasonable
manner.’ Because members of the class have an interest in the
arrangements for payment of class counsel whether that payment comes
from the class fund or is made directly by another party, notice is required
in all instances. In cases in which settlement approval is contemplated
under Rule 23(e), notice of class counsel's fee motion should be combined
with notice of the proposed settlement, and the provision regarding notice
to the class is parallel to the requirements for notice under Rule 23(e). In
adjudicated class actions, the court may calibrate the notice to avoid undue
expense.
In this case, the notice and forms sent to class members regarding the proposed
settlement, which were based on the government’s proposed notice and forms, expressly
discussed plaintiffs’ motion for attorneys’ fees and costs. The notice and forms included
information about plaintiffs’ motion for attorneys’ fees and costs and provided class
members an opportunity to obtain copies of the parties’ filings from class counsel. The
notice and forms also provided class members the opportunity to object or comment on
plaintiffs’ motion for attorneys’ fees and costs in writing and at the fairness hearing.
Therefore, the court finds that the requirements of RCFC 23(h) have been met and thus a
ruling on attorneys’ fees and costs is appropriate.
24
III. CONCLUSION
For the reasons above, the parties’ proposed settlement is APPROVED. Because
there is no just reason for delay, the clerk is directed to enter judgment pursuant to RCFC
54(b) in the amount of $611,795.00 in principal apportioned among the plaintiffs as
shown in the table attached to this opinion. Interest shall be payable on these amounts at
a rate of 4.3 percent, compounded annually, beginning on May 24, 2004, until the date
the judgment is paid.
Plaintiffs’ motion for attorneys’ fees and costs is GRANTED-IN-PART and
DENIED-IN-PART. The parties shall have until April 24, 2017 to file a joint status
report with a final proposed judgment for attorneys’ fees and costs.
IS SO ORDERED.
s/Nancy B. Firestone
NANCY B. FIRESTONE
Senior Judge
25