Interfaith Community Organization v. Honeywell International, Inc.

Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
10-19-2005
Interfaith Comm Orgn v. Honeywell Intl
Precedential or Non-Precedential: Precedential
Docket No. 04-3702
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-3702
INTERFAITH COMMUNITY ORGANIZATION;
LAWRENCE BAKER; MARTHA WEBB HERRING;
MARGARET WEBB; REV. WINSTON CLARKE;
MARGARITA NAVAS
v.
HONEYWELL INTERNATIONAL, INC.
formerly known as ALLIEDSIGNAL, INC.;
RONED REALTY OF JERSEY CITY, INC.;
RONED REALTY OF UNION CITY, INC.;
W.R. GRACE & COMPANY; ECARG, INC.;
W.R. GRACE, LTD.
W.R. GRACE & COMPANY; ECARG, INC.;
W.R. GRACE, LTD.,
Defendants/Third-Party Plaintiffs
v.
HELLER-JERSEY CITY, L.L.C.;
HOME DEPOT, U.S.A.;
SEAMAN FURNITURE COMPANY, INC.,
Third-Party Defendants
HACKENSACK RIVERKEEPER, INC.;
WILLIAM SHEEHAN
v.
1
HONEYWELL INTERNATIONAL, INC.
f/k/a ALLIEDSIGNAL, INC.;
RONED REALTY OF JERSEY CITY, INC.;
RONED REALTY OF UNION CITY, INC.;
W.R. GRACE, LTD.
Honeywell International, Inc.,
Appellant
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Nos. 95-cv-02097 & 00-cv-01451)
District Judge: Honorable Dennis M. Cavanaugh
Argued June 30, 2005
Before: RENDELL, BARRY, and BECKER, Circuit Judges.
(Filed: October 19, 2005)
THOMAS H. MILCH
DANIEL A. CANTOR (ARGUED)
Arnold & Porter LLP
555 12th St., N.W.
Washington, DC 20004
RICHARD G. TARANTO
Farr & Taranto
1220 Nineteenth St., N.W.
Suite 800
Washington, DC 20036
DAVID W. FIELD
Lowenstein Sandler PC
65 Livingston Ave.
Roseland, NJ 07068
2
Attorneys for Appellants
BRUCE J. TERRIS
CAROLYN SMITH PRAVLIK
KATHLEEN L. MILLIAN (ARGUED)
SARAH A. ADAMS
LEMUEL B. THOMAS
Terris, Pravlik & Millian, LLP
1121 12th St., N.W.
Washington, DC 20005
Attorneys for Appellees,
Interfaith Community Organization, et al.
JOHN M. AGNELLO
Carella, Byrne, Bain, Gilfillan, Cecchi
Stewart & Olstein
5 Becker Farm Road
Roseland, NJ 07068
CHRISTOPHER H. MARRARO
Wallace, King, Marraro & Branson
1050 Thomas Jefferson Street, N.W.
Suite 500
Washington, DC 20007
Attorneys for Appellees,
W.R. Grace & Co., et al.
OPINION
BECKER, Circuit Judge.
This case stems from a lawsuit filed by Interfaith
Community Organization (“ICO”) against Honeywell
International seeking the cleanup of a heavily polluted area
3
along the banks of the Hackensack River in Northern New
Jersey. ICO prevailed at trial, and, as a result, moved for
attorney fees pursuant to 42 U.S.C. § 6972(e). The District
Court, after holding a hearing on the motion, awarded ICO over
$4.5 million in fees. Honeywell now appeals this award, raising
a number of issues.
First, Honeywell argues that the District Court erred in
awarding fees based on prevailing market rates in Washington,
DC, where ICO’s attorneys practiced, rather than in northern
New Jersey, where the suit was litigated. We agree with
Honeywell that, under normal circumstances, a prevailing
party’s attorneys should be compensated based on market rates
in the vicinage of the litigation. However, if a prevailing party
can show that it required the particular expertise of counsel from
another vicinage, or that local counsel were unwilling to take on
the litigation, then it will be entitled to compensation based on
prevailing rates in the community in which its attorneys practice.
The District Court concluded that ICO had satisfied both
of these exceptions. While we do not agree that ICO satisfied
the first exception, we are satisfied that the District Court’s
finding that ICO had satisfied the second exception was not
clearly erroneous. We will therefore affirm the District Court’s
decision to award compensation based on prevailing market
rates in Washington, DC. Concomitantly, we find that ICO is
entitled to compensation for the travel time of its attorneys as
well as the reasonable fees of its local counsel.
Honeywell also submits that the District Court erred in its
determination of prevailing market rates in Washington, DC.
Specifically, Honeywell contends that the District Court
erroneously awarded compensation based on a matrix of hourly
rates produced by ICO’s attorneys. While we question the
accuracy of the matrix supplied by ICO’s attorneys, we
nonetheless conclude that the District Court’s finding in this
regard was not clearly erroneous. For this reason, we will affirm
the District Court’s determination of the appropriate hourly
rates.
In addition, Honeywell challenges several aspects of the
fee award as excessive or unjustified. Honeywell contends that
ICO’s attorneys and its expert witnesses devoted too many hours
to a variety of tasks, and that the District Court failed to conduct
4
a sufficiently thorough review of the hours claimed by ICO’s
attorneys and expert witnesses. We agree that the District
Court’s review was inadequate, and hence we will vacate those
aspects of the award challenged by Honeywell, and remand for
further proceedings. We also agree that the fee request was
excessive, but do not quantify our conclusion on this point,
leaving its resolution to the District Court on remand.
Honeywell challenges the District Court’s decision to
award fees for the costs of overtime and temporary workers.
We conclude that the District Court’s decision to do so was not
an abuse of discretion, and we will therefore affirm that aspect
of the award. Honeywell also submits that the District Court
erroneously awarded ICO compensation for time spent by
experts who did not testify at trial. Because we conclude that
the relevant statute permits such awards, we reject this
contention.
Honeywell argues that the District Court erroneously
awarded ICO fees for certain time spent by its attorneys
litigating against the other defendants in this suit. We agree
with Honeywell that the District Court failed to determine
whether the time in question was actually related to ICO’s suit
against Honeywell, and will therefore vacate this aspect of the
award and remand for further consideration. Finally, Honeywell
challenges the District Court’s decision to award ICO nearly
$150,000 in photocopying costs based on a rate of twenty cents
per page. Because we conclude that this rate is excessive, and
because we find that the District Court did not conduct a
thorough review of the number of copies claimed by ICO’s
attorneys, we will vacate this portion of the award and, again,
remand for further proceedings.
I. Background Facts and Procedural History1
1
A thorough recitation of the facts giving rise to the
underlying action can be found in our recent decision in Interfaith
Community Organization v. Honeywell International, Inc., 399
F.3d 248 (3d Cir. 2005) (ICO I), cert. denied, 125 S. Ct. 2951(2005).
5
Mutual Chemical Company of America, at one point the
largest chrome manufacturer in the world, operated a plant in
Jersey City, New Jersey from 1895 to 1954. During much of
this time, Mutual dumped industrial waste residue containing
high concentrations of hexavalent chromium, a known
carcinogen, in wetlands along the banks of the Hackensack
River. Over time, Mutual dumped around 1.5 million tons of
waste, which ultimately developed into a separate land mass “15
to 20 feet deep, on some 34 acres.” ICO I, 399 F.3d at 252.
The dumping ended in 1954 when Mutual sold the plant to the
Allied Corporation. Allied was later succeeded by AlliedSignal,
Inc., and then by Honeywell. No significant effort was made to
clean the site for almost three decades.
In 1982, the New Jersey Department of Environmental
Protection (NJDEP) initiated efforts to clean up the site. After a
largely unsuccessful attempt to fashion a temporary solution,
NJDEP filed suit against AlliedSignal seeking to force the
company to take action. In 1993, the parties agreed to a consent
order under which AlliedSignal agreed to pay $60 million to
clean up the site.
The cleanup was slow in getting started. As a result, ICO
and five residents of the surrounding community brought suit
against AlliedSignal and several other defendants under the
citizen suit provisions of the Resource Conservation and
Recovery Act (RCRA), 42 U.S.C. § 6972(a)(1)(B). That section
permits individuals to bring suit against any person “who has
contributed or who is contributing to the past or present
handling, storage, treatment, transportation, or disposal of any
solid or hazardous waste which may present an imminent and
substantial endangerment to health or the environment.”
Following a two-week bench trial, the District Court ruled in
favor of ICO and issued an injunction requiring Honeywell
(which had succeeded AlliedSignal by that time) to clean up the
site. A panel of this Court affirmed the District Court’s
decision, see ICO I, 399 F.3d at 252, and the Supreme Court
denied certiorari, see Honeywell Int’l, Inc. v. Interfaith Cmty.
Org., 125 S. Ct. 2951 (2005).
In its opinion granting injunctive relief, the District Court
also granted ICO attorney fees pursuant to 42 U.S.C. § 6972(e),
which provides that, in actions brought under RCRA, the court
6
“may award costs of litigation (including reasonable attorney
and expert witness fees) to the prevailing or substantially
prevailing party, whenever the court determines such an award
is appropriate.”2 ICO then filed a Fee Application seeking
reimbursement of $4,706,506.09 in fees; in a subsequent filing,
it reduced its request to $4,587,990.22. Following extensive
briefing and a hearing, the District Court found that ICO was
entitled to $4,530,327.00 in fees. See Interfaith Cmty. Org. v.
Honeywell Int’l, Inc., 336 F. Supp. 2d 370, 404 (D.N.J. 2004)
Honeywell then filed a timely notice of appeal.
II. Appellate Jurisdiction
The District Court properly exercised jurisdiction
pursuant to the RCRA, 42 U.S.C. § 6972. The parties submit
that the August 26, 2004, order of the District Court was a “final
decision” and that we therefore may exercise jurisdiction under
28 U.S.C. § 1291, which grants us jurisdiction to review “all
final decisions of the district courts.” A fee award is not
appealable until it is reduced to a definite amount. See Polonski
v. Trump Taj Mahal Assocs., 137 F.3d 139, 144 (3d Cir. 1998).
There is no dispute that the August 26, 2004, order reduced
ICO’s fee award to a definite amount for the period leading up
to the verdict in this case. However, in two subsequent orders
dated August 30, 2004, and June 15, 2005, the District Court
granted ICO additional fees to cover the expenses of litigating
the first fee application.
In the June 15, 2005, order, the District Court granted
ICO an additional $362,505.44 in fees. Moreover, the District
Court indicated in its August 26, 2004, opinion that it would
consider a later application for fees relating to the costs of
monitoring the cleanup. The question thus arises as to whether
2
One of the initial defendants was ECARG, a subsidiary of
W.R. Grace & Co., which owns part of the site. ECARG filed a
successful cross claim against Honeywell, and the District Court
found that ECARG was therefore entitled to attorney fees as well.
In the same opinion granting ICO $4.5 million, the District Court
granted ECARG over $7.3 million. That award is not before us.
7
these later orders and declarations deprive us of jurisdiction,
which we always have the independent duty to consider. See
Richman Bros. Records, Inc. v. U.S. Sprint Communications
Co., 953 F.2d 1431, 1446 (3d Cir. 1991).3
The Court of Appeals for the Ninth Circuit addressed a
similar set of facts in Gates v. Rowland, 39 F.3d 1439 (9th Cir.
1994). In concluding that it had jurisdiction over a partial fee
award, that Court observed:
The facts weigh in favor of review now. Legal
issues determined at this stage will smooth the
process for future awards. The fees orders are
final, and the defendants must pay the plaintiffs’
counsel. The compliance period has not been
limited to a definite time frame, thus review could
be postponed for many years, if not granted now.
The defendants suggest that the periodic motions
before the district court could be grouped annually
for possible appeals. We encourage the district
court to group the motions in some such manner.
However, we hold that the claim presently before
us is reviewable.
3
By letter dated August 30, 2004, ICO notified the District
Court that it made a minor error in calculating the final fee award.
(The Court held that ICO was not entitled to compensation for
$541.08 relating to “local travel expenses,” but it neglected to
deduct this amount from its final award.) Honeywell suggests that
the District Court may have treated this letter as a motion to amend
the judgment pursuant to Rule 59(e) or a motion to correct a
clerical mistake pursuant to Rule 60(a), either of which might call
into question the validity of the notice of appeal. See Fed. R. App.
P. 4(a)(4)(B)(i). However, there is no evidence in the record that
the District Court construed ICO’s letter as a motion under either
Rule 59 or Rule 60, so we conclude that it is not a bar to our
jurisdiction. Because the District Court does not appear to have
acted on this letter, we will vacate the portion of the award relating
to the error noted by ICO.
8
Id. at 1450. We are persuaded by this logic.4 In a complex
environmental action such as this, monitoring will likely
continue well into the future. Were we to conclude that § 1291
bars jurisdiction over awards such as this, we would delay
meaningful appellate review for years if not decades. Such a
holding would contravene the Supreme Court’s admonition that
“the requirement of finality is to be given a ‘practical rather than
a technical construction.’” Gillespie v. United States Steel Corp.,
379 U.S. 148, 152 (1964) (citation omitted).
We therefore conclude that, in a complex and ongoing
action such as this, § 1291 should not act as a bar to our exercise
of jurisdiction over a fee award which resolves all fee claims for
the period leading up to a verdict. In so holding, we do not
decide whether we will have jurisdiction over any possible
appeals from future fee awards, but note our agreement with the
sentiment expressed in Gates that a district court is well-advised
to group such awards so as to allow for meaningful appellate
review.
III. The Appropriate Hourly Rate: The Forum Rule and its
Exceptions
A. Introduction
The general jurisprudence governing the calculation of
an award of attorney fees and the standard of appellate review is
familiar, and we summarize it in the margin.5 What is less clear
4
We recently distinguished Gates in In re Diet Drugs Prods.
Liab. Lit., 401 F.3d 143, 157 (3d Cir. 2005). In Diet Drugs, we
noted that “future adjustments (if any) to the [fee award being
appealed] will include services that have been performed as well
as those to be performed in the future.” Id. at 157 n.24. Such is
not the case here, as the August 26, 2004, order definitively
resolved ICO’s fee request for the period in question.
5
To fix the size of a prevailing party’s fee award, a court
must determine the appropriate billing rate for the party’s attorneys
as well as the number of hours those attorneys reasonably
expended on the action. See Blum v. Stenson, 465 U.S. 886, 888
9
from this jurisprudence is the question central to this appeal,
which is whether courts should award fees to out-of-town
counsel based on prevailing hourly rates in the forum of the
litigation or those in the vicinage in which the fee applicant’s
attorneys practice law.
The District Court concluded that ICO’s attorneys, who
did not charge the organization for their services, were entitled
to compensation based on prevailing rates in Washington, DC,
(1984) (citing Hensley v. Eckerhart, 461 U.S. 424 (1983)). The
product of an attorney’s hourly rate and the number of hours spent
is referred to as the “lodestar.” See, e.g., Student Pub. Interest
Research Group v. AT & T Bell Labs., 842 F.2d 1436, 1441 (3d
Cir. 1988) (“SPIRG”); see also Pennsylvania v. Delaware Valley
Citizens’ Council for Clean Air, 478 U.S. 546 (1986).
A party seeking attorney fees bears the ultimate burden of
showing that its requested hourly rates and the hours it claims are
reasonable. See Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d
Cir. 1990). To initially satisfy this burden, “the fee petitioner must
‘submit evidence supporting the hours worked and rates claimed.’”
Id. (quoting Hensley, 461 U.S. at 433). If it wishes to challenge
the fee award, the opposing party must then object “with sufficient
specificity” to the request. Id. Once the opposing party has
objected, the party requesting fees must demonstrate to the
satisfaction of the court that its fee request is reasonable. In
reviewing a fee application, a district court must conduct “a
thorough and searching analysis.” Evans v. Port Auth. of N.Y. &
N.J., 273 F.3d 346, 362 (3d Cir. 2001). Such an analysis is
essential, for without it we cannot engage in meaningful appellate
review.
On appeal, we review a district court’s grant of a fee award
for abuse of discretion. See Rode, 892 F.2d at 1182. In doing so,
we will not upset a district court’s factual determinations,
including its determination of an attorney’s reasonable hourly rate
and the number of hours he or she reasonably worked on the case,
unless we find them to be clearly erroneous. Evans, 273 F.3d at
358. However, we subject the legal standard employed by the
district court in calculating these values to plenary review. Id.10
where they practiced, rather than in northern New Jersey, the
litigation forum. Honeywell contends that this conclusion was
erroneous.
B. The Relevant Market; The Forum Rate Rule
ICO was represented at trial by Terris, Pravlik & Millian
(“the Terris firm” or “Terris”), a Washington, DC public-interest
firm that specializes in complex environmental cases. We have
held that public-interest law firms that typically charge clients
below-market fees, or no fees at all, are nonetheless entitled to
compensation based on prevailing market rates in the relevant
community. Student Pub. Interest Research Group v. AT & T
Bell Labs., 842 F.2d 1436, 1448 (3d Cir. 1988) (“SPIRG”).6 In
SPIRG, we concluded that this rule (the “Community Market
Rate” rule) represented “the best compromise among the
conflicting policies behind the fee shifting statutes” and that it
was “the simplest, most workable rule [available].” Id.What SPIRG did not resolve, however, was how we
choose the “relevant community” for purposes of determining
the appropriate billing rate for a public interest law firm. In this
case, there are two obvious choices: Washington, DC, where the
Terris firm is located, or northern New Jersey, where the
underlying suit was litigated.
Two decades ago, we commissioned a Task Force on
court-awarded attorney fees that addressed this and numerous
other questions. The Task Force recommended that we adopt
the “forum rate” rule, whereby an “out-of-town lawyer would
receive not the hourly rate prescribed by his district but rather
the hourly rate prevailing in the forum in which the litigation is
lodged.” Report of the Third Circuit Task Force on Court
Awarded Attorney Fees, 108 F.R.D. 237, 261 (1985). The Task
Force recommended that deviation from this rule be permitted
“only when the need for ‘the special expertise of counsel from a
distant district’ is shown or when local counsel are unwilling to
handle the case.” Id. (footnote omitted).
6
Ironically, the attorney fee applicant in SPIRG was also the
Terris firm.
11
In recommending that we adopt the forum rate rule, the
Task Force observed that it was “contrary to current Third
Circuit practices,” id., citing our decisions in Cunningham v.
City of McKeesport, 753 F.2d 262, 267 (3d Cir. 1985) and In re
Fine Paper Antitrust Litigation, 751 F.2d 562, 590-91 (3d Cir.
1984). In Fine Paper, we reviewed a decision by the District
Court for the Eastern District of Pennsylvania to award attorney
fees based on a three-tiered hourly rate structure which did not
take into account the market in which the attorney actually
practiced. See 98 F.R.D. at 83. We reversed, finding that “the
approach taken by the trial court in this case, of applying
hypothetical national rates to all attorneys, regardless of the
market rate they would command in the community in which
they practice, was legal error.” 751 F.2d at 591. We further
observed:
Our premise has been that the reasonable value of
an attorney’s time is the price that time normally
commands in the marketplace for legal services in
which those services are offered.
Id. at 590.
The locution “the marketplace for legal services in which
those services are offered” is somewhat opaque, and, in the
wake of Fine Paper, panels of this Court have, consistent with
the Task Force’s recommendations, applied the forum rate rule.
In Public Interest Research Group v. Windall (“PIRG”), we
concluded that Fine Paper and other relevant cases did not
“establish[] a per se rule in favor of the market rate for the
community in which the law firm is located. Indeed, we think
these cases eschew any rigid rule.” 51 F.3d 1179, 1186 n.9 (3d
Cir. 1995); see SPIRG, 842 F.2d at 1442 n.4 (“This opinion
should not be construed, however, as endorsing a fee based
upon an outside market rate at variance with the market rate of
the site of the litigation, for we do not reach that issue.”). In no
case since the Task Force Report was issued have we set aside a
decision employing the forum rate rule on the ground that earlier
decisions require courts to award fees on the basis of prevailing
rates in the community in which the attorney practices.
ICO nonetheless argues that Fine Paper held that the
12
relevant community for determining an attorney’s billing rate is
where the attorney practices, not the locus of the litigation.
Thus, to the extent that these later cases conflict with our
holding in Fine Paper, ICO claims that they impermissibly
attempted to overrule that earlier decision. It is well settled in
this Circuit that a three-judge panel may not overrule a decision
by an earlier panel. See Third Circuit Internal Operating
Procedure 9.1; O. Hommel Co. v. Ferro Corp., 659 F.2d 340,
354 (3d Cir. 1981). Thus, if ICO is correct that Fine Paper held
that we look to an attorney’s place of business to determine his
or her hourly rate, then we must follow that decision. We do not
think that it so holds.
As noted above, Fine Paper held that it was error for a
district court to apply “hypothetical national rates” in
determining the size of a fee award. Thus, Fine Paper does not
answer the question we address today, which is whether a court
should look to prevailing rates in the attorney’s home
community or the locus of the litigation in determining the
appropriate compensation for an out-of-town attorney. We
agree with the Task Force that, in most cases, the relevant rate is
the prevailing rate in the forum of the litigation. We therefore
hold that district courts in the Third Circuit should award
attorney fees based on the “forum rate” rule as set forth in the
Task Force Report.
As noted above, the forum rate rule recommended by the
Task Force contains two exceptions: first, “when the need for
‘the special expertise of counsel from a distant district’ is
shown”; and, second, “when local counsel are unwilling to
handle the case.” 108 F.R.D. at 261 (footnote omitted). Both of
these exceptions are sensible. Thus, when a party can show that
it qualifies for either exception, the Court may award attorney
fees based on prevailing rates in the community in which the
parties’ attorneys practice. The District Court held that ICO
satisfied both exceptions, and it therefore awarded fees based on
prevailing rates in Washington, DC. We now turn to this issue.
C. Exceptions to the Forum Rate Rule
The District Court found that ICO had shown that it
required the expertise of the Terris firm and that, moreover, no
13
firm in northern New Jersey would have been willing to
represent ICO in its action against Honeywell. A decision by a
district court that a party qualifies for one or both of the
exceptions to the forum rate rule is a factual finding that we may
not upset unless we find it to be clearly erroneous; however, we
will not affirm if the District Court failed to make the necessary
factual findings.
1. Whether ICO demonstrated a need for “the special expertise
of counsel from a distant district”
The District Court’s discussion of the first exception is
extremely brief. It noted that Terris had extensive experience
litigating similar environmental suits, and that all other parties
involved retained Washington, DC counsel. Yet in so doing, the
District Court failed to address the precise issue, namely the
extent to which other counsel practicing in northern New Jersey
did or did not possess “special expertise” in order to represent
ICO. The fact that Terris was suited to such representation does
not imply that firms from northern New Jersey were not.
Similarly, the fact that all parties retained counsel from
Washington, DC is not directly relevant to the question whether
New Jersey counsel had the necessary expertise to represent
ICO; indeed, as Honeywell notes, its trial counsel was from
New Jersey.
The record is devoid of any evidence that ICO conducted
a significant search for counsel with the ability to handle this
case. According to an affidavit filed by Joseph Morris, ICO’s
Lead Organizer, ICO contacted a very small number of attorneys
as part of its efforts to retain counsel in a cognate case, ICO v.
Shinn. Morris’s affidavit recounted that he approached and was
turned down by Christopher Placitella of Wilentz, Goldman &
Spitzer; Father Eugene Squeo of Schiller Squeo and Hartnett;
Edward Lloyd of the Rutgers Environmental Law Clinic, who
served as ICO’s local counsel in this case; Charles Warren of
Berle Kass and Case in New York City; and Barbara Olshansky
of the Environmental Defense Fund in New York City.
Given that there are hundreds of firms in northern New
Jersey that identify themselves as practicing environmental law,
we do not think that such a search is adequate to justify
14
concluding that ICO needed to turn to Terris because no
attorney in the region had the necessary expertise to represent
ICO in this action. Indeed, we would have great difficulty in
accepting that no attorney in northern New Jersey possessed the
ability—as opposed to the willingness—to handle a case such as
this. We therefore agree with Honeywell that ICO failed to
make the necessary showing, and that the District Court failed to
make the necessary finding, that no local counsel had the
expertise necessary to represent ICO. We thus cannot affirm the
District Court’s conclusion that ICO qualified for the first
exception.
2. Whether ICO demonstrated that local counsel
were “unwilling to handle the case”
In contrast, the District Court did make the proper
finding with regard to the second exception, and we will
therefore review this determination for clear error.7 In
concluding that ICO had shown that local counsel were
“unwilling to handle the case,” the District Court relied
primarily on the Morris affidavit, which recounted the
organization’s efforts to find counsel in Shinn, a lawsuit filed
against various state officials in an effort to compel government
action to clean up chromium pollution in Hudson County, New
Jersey. As discussed supra, Morris stated that ICO contacted at
least five attorneys in northern New Jersey and New York, all of
whom declined to take on the case.
7
Honeywell argues that the District Court applied an
incorrect legal standard in “holding that a fee applicant can meet its
burden of proving the unavailability of forum counsel where the
fee applicant has made no attempt to retain forum counsel in the
case at issue” and that we therefore may exercise de novo review.
We disagree. The District Court applied the proper legal standard
in that it focused its analysis on whether ICO had shown that “local
counsel are unwilling to handle the case.” In challenging the
District Court’s reliance on the Morris Affidavit, Honeywell is, in
essence, challenging the District Court’s weighing of the evidence
in making a factual determination.
15
Morris’s affidavit stated that he did not recall the specific
justifications given by the attorneys for declining to represent
the organization, but it did list his “general impressions” of their
reasons: “the cases involved too much political risk (Governor
Florio would be a named defendant), or too much intensive
factual work, or too unfamiliar legal terrain. Since ICO could
not afford to pay attorney’s fees or costs, the firms also
expressed concern over absorbing the costs associated with
litigating a case which they feared might become very large and
expensive.”
As a result of its inability to find representation, ICO
filed Shinn pro se. After it became clear that it could not
proceed on that basis, the organization contacted the Terris firm,
which agreed to take on the case. Soon after it agreed to
represent ICO in Shinn, Terris agreed to represent ICO in this
action.8
The District Court relied primarily on Morris’s affidavit
in concluding that ICO had shown that local counsel were
unwilling to represent it in this action. In addition, Terris points
to an affidavit from Edward Lloyd, who previously served as the
director of the Environmental Law Clinic at Rutgers School of
Law and acted as local counsel for Terris. Lloyd stated:
11. At the time this suit was initiated, I was not
aware of any attorneys or law firms who would
have been willing to assume the risks of litigating
cases of this type, particularly without
8
ICO argues that its efforts to recruit counsel in Shinn were
part of a larger effort to obtain counsel to represent it in suits
seeking to clean up chromium pollution in Hudson County, and
that these efforts were not limited to Shinn. While it concedes that
Terris partner Bruce Terris admitted at oral argument that ICO’s
efforts were limited to Shinn, it claims that he “mis-spoke.” The
District Court found that ICO’s earlier efforts were limited to the
Shinn case and not part of a broader effort. Because we conclude
that the District Court’s conclusion that ICO satisfied the second
exception was not clearly erroneous, we need not address this
question.
16
contemporaneous payment for their services and
expenses. Nor was I aware of any New Jersey
firms with any experience litigating environmental
issues on behalf of plaintiffs. I was aware of a few
sole practitioners who litigated environmental
issues on behalf of plaintiffs. However, none of
them was in a position to handle litigation of this
magnitude, particularly without compensation for
even their out-of-pocket expenses.
12. In fact, my experience through 29 years of the
practice of environmental law in New Jersey is
that the Terris law firm and the Rutgers
Environmental Law Clinic are the only two firms
that have brought citizen suit cases in federal court
on behalf of citizens without contemporaneous
payment of fees and expenses. The only exception
of which I am aware is a single citizen suit during
this period of time brought by a small Newark
firm on behalf of a labor union. The firm has
since broken up. I do not know if the labor union
paid the attorneys for this suit. The suit did not
involve anywhere near the size, complexity and
cost of this litigation.
While the Lloyd Affidavit provides significant support for
ICO’s contention that local counsel were unwilling to represent
it in this action, the District Court did not mention it in
concluding that ICO satisfied the second exception.
Honeywell argues that the District Court erred in finding
that ICO had satisfied the second exception absent a showing
that ICO sought counsel in this particular case. In particular,
Honeywell claims that it was unreasonable to rely on the
unwillingness of local counsel to represent ICO in Shinn, as that
case involved a factor—political risk—not present here. We
agree.9 However, ICO submits that political risk was just one of
9
ICO argues that this case involved political risk as well,
inasmuch as it is “an indictment of the state’s mishandling” of the
efforts to clean up the site. This seems dubious. At all events, the
17
the reasons given by the various attorneys contacted by Morris
for declining to participate in that action.
We do not believe that the District Court’s conclusion
that ICO satisfied the second exception to the forum rate rule is
clearly erroneous. What persuades us is the Lloyd affidavit,
insofar as it states that no attorney in northern New Jersey would
have been willing to handle this case without an immediate
advance of out of pocket costs which, in this case, foreseeably
amounted to over one million dollars. In this respect, the Terris
firm is a “rare bird.”
Because we conclude that the District Court’s
determination that ICO satisfied the second exception to the
forum rate rule was not clearly erroneous, we will affirm its
decision to award fees based on prevailing rates in Washington,
DC.
D. Determination of the Appropriate Hourly Rate for the District
of Columbia; the Laffey Matrix
We have settled that to determine “the prevailing market
rates in the relevant community,” a court must “assess the
experience and skill of the prevailing party’s attorneys and
compare their rates to the rates prevailing in the community for
similar services by lawyers of reasonably comparable skill,
experience, and reputation.” See Loughner v. Univ. of
Pittsburgh, 260 F.3d 173, 180 (3d Cir. 2001) (citations and
internal quotations omitted). The party seeking fees “bears the
burden of establishing by way of satisfactory evidence, in
addition to [the] attorney’s own affidavits . . . that the requested
hourly rates meet this standard.” Id. (citations and internal
quotations omitted) (alterations in original). In its fee
application, ICO requested compensation based on an updated
version of the so-called “Laffey Matrix,” and the briefing and
arguments on the hourly rate issue have been totally within the
Laffey Matrix framework. Accordingly, for better or worse, our
discussion of that issue will be within the framework as well.
political risk involved in Shinn was certainly greater than the risk
involved in this case.
18
The Laffey Matrix, which takes its name from the case in
which it was first employed, Laffey v. Northwest Airlines, 572 F.
Supp. 354 (D.D.C. 1983), aff’d, 746 F.2d 4 (D.C. Cir. 1984),
overruled in part on other grounds by Save Our Cumberland
Mountains v. Hodel, 857 F.2d 1516, 1525 (D.C. Cir. 1988) (en
banc) (“SOCM”), provides billing rates for attorneys in the
Washington, DC market with various degrees of experience.
The initial Laffey Matrix, set forth in the margin,10 was based on
prevailing market rates from 1981-1982. The parties do not
dispute that the Laffey Matrix was a valid index of prevailing
rates in Washington, DC at that time.
The Laffey Matrix was subsequently updated through
1989 pursuant to a settlement by the parties in SOCM. See
Trout v. Ball, 705 F. Supp. 705, 709 n.10 (D.D.C. 1989). The
use of the SOCM-updated Laffey Matrix has subsequently been
approved by judges on the District Court for the District of
Columbia. See, e.g., id. (“Although the updated matrix was
never expressly approved by the court because the parties settled
the issue of fees, it does provide an accurate and updated
schedule of attorney fees in this District.”); Sexcius v. District of
10
The original Laffey Matrix reimbursed attorneys at the
following rates:
- $ 175 an hour for very experienced federal court
litigators, i.e., lawyers in their 20th year or more
after graduation from law school;
- $ 150 an hour for experienced federal court
litigators in their 11th through 19th years after law
school graduation;
- $ 125 an hour for experienced federal court
litigators in their 8th through 10th years after
graduation from law school;
- $ 100 an hour for senior associates, i.e., 4 to 7 years
after graduation from law school; and
- $ 75 an hour for junior associates, i.e., 1 to 3 years
after law school graduation.
572 F. Supp. at 371.
19
Columbia, 839 F. Supp. 919, 924 (D.D.C. 1993). In its fee
application, ICO requested payment based on the rates in the
SOCM-updated Laffey Matrix, further updated to 2003-2004.
In updating the matrix to account for inflation from 1989-2003,
ICO relied on the legal services component of the nationwide
Consumer Price Index (“the Legal Services Index”), a measure
of inflation in the cost of legal services maintained by the
Bureau of Labor Statistics. We rescribe in the margin the rates
produced by ICO’s methodology.11
Honeywell argued in the District Court and before us that
the proper measure of hourly rates in Washington, DC can be
found in a separate matrix maintained by the Office of the
United States Attorney for the District of Columbia. That
matrix is based on the original Laffey Matrix from 1981-1982,
also adjusted for inflation. However, in updating this matrix,
the U.S. Attorney’s Office uses the Consumer Price Index
(“CPI”) for the District of Columbia. But there is no available
data on the legal services component of the District of Columbia
CPI. Since the District of Columbia CPI is typically lower than
the Legal Services Index, the rates in the U.S. Attorney’s
Matrix, also rescribed in the margin, are lower than those in
ICO’s proposed matrix.12 The use of the U.S. Attorney’s Laffey
11
Years of Attorney Experience Hourly Rate
20+ $549
11-19 $456
8-10 $404
4-7 $280
1-3 $228
paralegals $124
12
The U.S. Attorney’s Matrix yields the following rates for
2003-2004:
Years of Attorney Experience Hourly Rate
20+ $380
11-19 $335
8-10 $270
4-7 $220
1-3 $180
20
Matrix as a measure of billing rates in Washington, DC has been
approved on numerous occasions by courts in the District of
Columbia Circuit. E.g., Covington v. District of Columbia, 57
F.3d 1101, 1109 (D.C. Cir. 1995); Piper v. United States Dep’t
of Justice, 339 F. Supp. 2d 13, 24 (D.D.C. 2004).
The District Court reviewed both indices and decided
that ICO’s represented a better measure of prevailing rates in
Washington, DC. In so doing, it relied on a decision by the
District Court for the District of Columbia, Salazar v. District of
Columbia, 123 F. Supp. 2d 8 (D.D.C. 2000), which compared
the U.S. Attorney’s Laffey Matrix with a matrix similar to that
put forward by ICO in this case and concluded that the latter
method was superior. Salazar is one of the few decisions
approving the use of this approach, and it is, according to ICO,
the only decision (prior to the District Court decision in this
case) comparing the two approaches.
The determination of the appropriate billing rate is a
factual finding which we review for clear error. See SPIRG,
842 F.2d at 1455-56; Black Grievance Committee v.
Philadelphia Electric Co., 802 F.2d 648, 652 (3d Cir. 1986),
vacated on other grounds by 483 U.S. 1015 (1987). Both
parties agree that the original Laffey Matrix is an appropriate
starting point from which to determine prevailing billing rates in
Washington, DC. As stated above, the updated Laffey Matrix
relied on in SOCM has been met with approval by judges in the
District of Columbia Circuit.13 But the question remains whether
ICO’s method of updating the Laffey Matrix is acceptable.
Honeywell contends that “the overwhelming use of the
U.S. Attorney Laffey matrix . . . by federal courts in the District
of Columbia” requires that we employ the U.S. Attorney Matrix
as well. The District Court rejected this argument, observing:
“Moreover, that the number of cases approving the U.S.
Attorney’s matrix is large is of no moment, because those fee
applicants did not challenge the appropriateness of the U.S.
paralegal $105
13
Obviously we are not bound by the decisions of these
judges, but we certainly accord them substantial weight on this
peculiarly local question.
21
Attorney’s matrix.” 336 F. Supp. 2d at 388 n.4. We do not
believe that the number of cases approving the U.S. Attorney’s
matrix is “of no moment,” but we do agree with ICO that the
simple fact that numerous courts in the District of Columbia
have upheld the U.S. Attorney’s Matrix as a reasonable measure
of billing rates is not a sufficient ground for us to conclude that
reliance by the District Court on ICO’s updated Laffey Matrix
was clearly erroneous.
In this regard, it is relevant that in none of those decisions
cited by Honeywell did the court engage in a comparison
between the competing methodologies advanced in this case.
Indeed, the District Court for the District of Columbia recently
observed that the U.S. Attorney’s Laffey Matrix “is a concession
by that office of what it will deem reasonable when a
fee-shifting statute applies and its opponent prevails and seeks
attorney fees. That concession relieves that office from having
to litigate the market rate in the hundreds of fee-shifting cases
that it defends.” See Adolph Coors Co. v. Truck Ins. Exch., Civ.
No. 04-2150, 2005 U.S. Dist. LEXIS 17538, at *11-*12
(D.D.C. Aug. 23, 2005).
Still, we recognize that the burden is on ICO to show that
the rates it proposes are comparable to the “‘rates prevailing in
the community for similar services by lawyers of reasonably
comparable skill, experience, and reputation.’” Loughner, 260
F.3d at 180 (3d Cir. 2001) (quoting Rode v. Dellarciprete, 892
F.2d 1177, 1183 (3d Cir. 1990)). As with the question whether
ICO satisfied the exceptions to the forum rate rule, we are
underwhelmed by the evidence relied on by the District Court in
concluding that the rates ICO proposed satisfied this standard.
That said, and while we recognize that the statistics ICO relies
on are in no way specific to attorneys who practice
environmental law, we are satisfied that the methodology relied
on by ICO in updating the Laffey Matrix was reasonable.
In addition, we note that ICO submitted the results of a
2002 survey from the National Law Journal showing high and
low billing rates for numerous firms (including several in
Washington, DC) that are largely consistent with the rates it
proposes in its matrix. While the article, standing alone,
provides little support for ICO’s proposed matrix, it does further
bolster our conclusion, which is that the District Court’s
22
findings were not clearly erroneous.14 Accordingly, on remand,
the District Court may use ICO’s proffered Laffey Matrix to
calculate the Terris firm’s hourly rates.
IV. Travel Time and Costs of Local Counsel
Honeywell challenges the District Court’s decision to
award ICO fees for its costs of travel and travel time, as well as
fees for its local counsel, Edward Lloyd. We agree that, under
normal circumstances, a party that hires counsel from outside the
forum of the litigation may not be compensated for travel time,
travel costs, or the costs of local counsel. However, where
forum counsel are unwilling to represent the plaintiff, such costs
are compensable. Therefore, because we have affirmed the
District Court’s conclusion that forum counsel were unwilling to
represent ICO in this action, we affirm the District Court’s
decision to award compensation for travel time, travel costs, and
the costs of local counsel. Of course, local counsel should be
compensated based on prevailing rates in the forum of the
litigation.
Honeywell also disputes the District Court’s
determination that ICO’s attorneys were entitled to
compensation for their travel time at their full billing rate.
According to Honeywell, the District Court should have
compensated the travel time of ICO’s attorneys at 50% of their
regular rate. In support, Honeywell notes that some courts in
other jurisdictions have held that travel time should not be
compensated at the same rate as time spent engaged in
meaningful work. E.g., Clark v. Phillips, 965 F. Supp. 331, 336
(N.D.N.Y. 1997). In response, ICO argues that the opportunity
cost of travel time is the same as that of time spent working on
the case, and that hours spent traveling should be compensated at
14
Despite so declaring, we add the observation that any
index that is updated based on a statistical measure of
inflation—rather than regular recalibration in light of prevailing
rates—will tend to diminish in accuracy over time. For this reason,
district courts in this Circuit should be assiduous in evaluating fee
requests in light of all the evidence.
23
an attorney’s full rate.
We addressed this issue in Planned Parenthood of
Central New Jersey v. Attorney General of State of New Jersey,
297 F.3d 253, 267-68 (3d Cir. 2002). In that case, we held that,
in order to determine the rate at which attorneys may be
compensated for their travel time, “a court must look to the
practice in the local community.” Id. at 267. In this case, since
we have concluded that the Terris firm is entitled to
compensation based on prevailing rates in Washington, DC, the
District Court should have determined whether attorneys in
Washington are typically compensated for their travel time at
their full billing rate. The District Court did not make any such
finding, so we will vacate and remand this portion of the
award.15
V. ICO’s Claimed Hours
A prevailing party is not automatically entitled to
compensation for all the time its attorneys spent working on the
case; rather, a court awarding fees must “decide whether the
hours set out were reasonably expended for each of the
particular purposes described and then exclude those that are
‘excessive, redundant, or otherwise unnecessary.’” PIRG, 51
F.3d at 1188 (citation omitted). Thus, in reviewing the hours
claimed in a fee application, a district court must conduct a
“thorough and searching analysis” to identify such charges.
Evans, 273 F.3d at 362. The court may not reduce an award sua
sponte; rather, it can only do so in response to specific
objections made by the opposing party. Bell v. United Princeton
Properties, Inc., 884 F.2d 713, 719 (3d Cir. 1989). But once the
opposing party has made a specific objection, the burden is on
the prevailing party to justify the size of its request.
Honeywell argues that the District Court erred in
refusing to slash the size of Terris’s fee award to account for
billing that was “excessive, duplicative, or otherwise
15
To the extent that ICO’s attorneys did actual work on this
case while traveling, that time should be incorporated into other
portions of the fee award.
24
redundant.” In Honeywell’s submission, the following charges
claimed by ICO are grossly excessive:
• 1,058 hours spent preparing proposed
pretrial findings of fact and conclusions of
law
• 471 hours spent preparing post-trial
findings of fact and conclusions of law
• More than 890 hours “dedicated to matters
related to the pretrial order”
• More than 730 hours of attorney time spent
reviewing documents.
• More than 360 hours preparing a motion
for summary judgment
• More than 2,790 hours of paralegal time16
Honeywell objected to these charges before the District
Court. In support of its objections, Honeywell submitted an
affidavit prepared by Michael Caffrey, an attorney with the New
Jersey law firm of Lowenstein Sandler, Honeywell’s trial
counsel, detailing the results of a review he conducted of ICO’s
submission. Caffrey’s affidavit compared the time claimed by
ICO for the above tasks with what he concluded would have
been a reasonable amount of time for the same work.
Where Caffrey concluded that ICO’s attorneys had spent
more time than required on a given task, he “reduced” the hours
to what he considered to be an appropriate level. He offered
justifications for his proposed reductions, although in many
cases the explanation he offered consisted of the word
“Excessive.” On appeal, Honeywell argues that the District
16
The District Court deducted 91.21 hours from the
paralegal time for “essentially clerical tasks.” See 336 F. Supp. 2d
at 393.
25
Court erred in refusing to reduce ICO’s award in accordance
with the recommendations in Caffrey’s affidavit. In addition, it
argues that the findings made by the District Court in granting
ICO’s fee request were inadequate.17
In support of its excessiveness argument, Honeywell
concentrates on a number of areas, starting with the 1,529 hours
spent on preparing findings of fact and conclusions of law. That
amounts to approximately thirty-eight forty-hour weeks, a sum
that seems to us to be staggering, and well beyond the pale. This
amount represents, under Honeywell’s calculations, over four
hours for drafting each page, as well as 471 hours to update,
post-trial, the proposals which were prepared pretrial in 1058
hours. This also is excessive, especially in light of the fact that
the pre-trial and post-trial findings of fact and conclusions of
law were so similar. As Honeywell points out:
[M]ore than 130 out of 165 of Plaintiff’s proposed
post-trial conclusions of law were identical to its
pretrial conclusions of law. And, more than 330
out of 494 of Plaintiff’s proposed post-trial
findings of fact were identical or substantively
identical (with the exception of the substitution of
a trial record citation) to Plaintiff’s pretrial
proposed findings of fact.
17
Following argument in this case, the parties entered into an
agreement pursuant to which Honeywell agreed to make a partial
payment of $1,380,148.79 prior to resolution of the appeal, that
being the amount that Honeywell suggested was the maximum
reasonable and necessary fee award. Under the terms of the
stipulation, which has been approved, the judgment entered
pursuant thereto is without prejudice to defendant-appellant’s
objections and arguments with regard to any fee award (including
the fee award that is the subject of this appeal) or request for fees
and costs by plaintiffs-appellees or any other party or third party.
Moreover, if, when the proper amount of attorney fees and costs is
ultimately resolved, the ultimate award of fees and costs exceeds
$1,380,148.79, the $1,380,148.79 being paid pursuant to the
stipulation is to be subtracted from the award.
26
Furthermore, Honeywell notes that the overall time spent
preparing the findings of fact includes 228 hours of partner time,
which, under the matrix adopted by the District Court, is
compensable at a rate of $456 per hour. That factor seems to us
to warrant close scrutiny.
While the trial was indeed protracted, and the record
huge, there must be some limit. We need not decide these points
because we agree with Honeywell’s second argument: that the
District Court’s review of the hours claimed by ICO’s attorneys
was simply inadequate. However, we do express our reaction
for the benefit of the District Court which will have to address
these issues on remand.
In most respects, the District Court approved the
challenged aspects of the fee award with little more than a
sentence. For example, in approving the 471 hours spent
preparing post-trial findings of fact and conclusions of law, the
District Court observed:
Honeywell asserts that the time expended on the
preparation of post-trial findings was excessive
and should be reduced to 200 hours. However,
Honeywell provides no justification for this figure.
Accordingly, this Court concludes that the hours
expended by Plaintiffs are reasonable.
336 F. Supp. 2d at 391. The District Court appears to have
misapprehended its role, improperly placing a burden of proof
on Honeywell that simply does not exist.18 While it is true that,
18
For instance, in regard to the time spent on the pretrial
proposed findings of fact, the Court observed:
Honeywell asserts that the time spent in preparing
Plaintiff's pretrial findings of fact and conclusions of
law should be excluded because this document was
not ultimately required by the Court. However, until
October 16, 2002, when this Court decided to make
such pretrial findings optional, the deadline for the
27
as we have noted, the “district court cannot decrease a fee award
based on factors not raised at all by the adverse party,”
Loughner, 260 F.3d at 178 (citations and internal quotations
omitted), nonetheless, the burden remains on the party
requesting the fee to prove its reasonableness, and the court has
“a positive and affirmative function in the fee fixing process, not
merely a passive role,” id. Here, the District Court’s conclusory
reasoning constituted an abdication of that function.
Where an opposing party lodges a sufficiently specific
objection to an aspect of a fee award, the burden is on the party
requesting the fees to justify the size of its award. In
determining whether the moving party has met its burden, we
have stressed that “it is necessary that the [District] Court ‘go
submission of each party's pretrial findings was
October 24, 2002. Clearly, it is reasonable for
Plaintiff to have substantially prepared their pretrial
findings by October 16, 2002. Furthermore, since the
preparation of the pretrial document advanced
Plaintiff's preparation of their post trial findings, it is
substantially related to their successful RCRA
substantial endangerment claim and is therefore
recoverable.
336 F. Supp. 2d at 391. The Court later found:
Likewise, Honeywell makes the assertion that the
number of hours spent preparing the Pretrial Order
should be reduced to 300 hours but provides no
justification for this figure. Nor does Honeywell
provide any justification for their assertion that the
document review time should be reduced to 350
hours or that the time spent preparing the second
motion for summary judgment should be reduced to
100 hours. Accordingly, this Court will allow
reimbursement [to] Plaintiffs for the actual time
expended on these activities.
Id at 391-92.
28
line, by line, by line’ through the billing records supporting the
fee request.” Evans, 273 F.3d at 362. Where the opinion of the
District Court “is so terse, vague, or conclusory that we have no
basis to review it, we must vacate the fee-award order and
remand for further proceedings.” Gunter v. Ridgewood Energy
Corp., 223 F.3d 190, 196 (3d Cir. 2000). Such is the case here.
For this reason, we will vacate the award in this case with
respect to the six items Honeywell challenges in its appeal.
This is a voluminous and protracted case, and we are not
unmindful of the difficult job the District Court faces in
reviewing the fee application. In performing this task, the
District Court is entitled to help from the fee objector. Indeed,
we have observed:
[T]he adverse party’s submissions cannot merely
allege in general terms that the time spent was
excessive. In order to be sufficient, the briefs or
answers challenging the fee request must be clear
in two respects. First, they must generally identify
the type of work being challenged, and second,
they must specifically state the adverse party’s
grounds for contending that the hours claimed in
that area are unreasonable. The briefs must be
specific and clear enough that the fee applicants
have a fair chance to respond and defend their
request.
Bell, 884 F.2d at 720 (footnote omitted). Honeywell objected to
numerous aspects of ICO’s fee request on the ground that the
time spent by specific attorneys was excessive. It could (and
should) have been more specific. Still, as Honeywell points out,
Bell and later cases have accepted as sufficient objections of a
more general nature than the ones at issue here. E.g., Bell, 884
F.2d. at 721; Planned Parenthood, 297 F.3d at 269.
Thus, since Honeywell carried its burden in objecting to
certain aspects of the proposed fee award, ICO had an obligation
to justify those portions of the award, and the District Court had
an obligation to conduct a searching review of ICO’s request. It
did not, hence we vacate and remand for further proceedings.
VI. Work Related to Other Defendants
29
The District Court found that ICO could only be
compensated by Honeywell for time spent by ICO’s attorneys
“in furtherance of ICO’s successful RCRA claim against
Honeywell.” 336 F. Supp. 2d at 390. Honeywell contends that
the court failed to exclude six charges ICO’s attorneys claimed
for work related to other defendants in the action. ICO concedes
that Honeywell is correct with respect to five of the charges.
Our judgment will reflect that concession and hence we need
deal only with the sixth, which involves two in limine motions
filed by W.R. Grace & Co., one of the defendants in the action,
see supra note 2. ICO argues that both of these motions, if
granted, would have weakened ICO’s case against Honeywell,
and that it was therefore justified in seeking reimbursement from
Honeywell.
For instance, Grace moved to limit the evidence that
could be used at trial relating to soil clean up standards; ICO
alleges that such a limitation would have weakened its case
against Honeywell. If true, ICO’s contention would be justified.
But it does not appear from the record that the District Court
considered whether the time spent contesting either motion was
truly “in furtherance of ICO’s successful RCRA claim against
Honeywell.” For this reason, we will vacate and remand the
award with respect to these motions so that the District Court
may make such a determination.
VII. ICO’s Expert Witnesses
A. Testifying Experts
Honeywell challenges the District Court’s decision to
award more than $780,000 for the time and costs of three expert
witnesses and their respective business entities, i.e. the award of
(1) $389,807.59 for the work of Dr. Bruce Bell and Carpenter
Environmental Associates; (2) $194,491.54 for the work of Dr.
Ben Ross and Disposal Safety Incorporated (DSI); and (3)
$184,492.31 for the work of Dr. Cheryl Montgomery and
Cambridge Environmental.
As with the time claimed by counsel, the prevailing party
bears the burden of justifying the time claimed by its expert
witnesses. Similarly, the district court has the obligation to
30
conduct a thorough and searching review of the time claimed by
a prevailing party’s experts. In this case, the District Court failed
to do so. While the District Court did address one substantive
argument raised by Honeywell (that ICO and ECARG should
have retained the same experts), its analysis of the hours claimed
by ICO’s three experts was limited to the following:
The work performed by the experts retained by
Plaintiff in this matter was vital to their success at
trial. The work of the experts greatly assisted this
Court in evaluating some of the more technical
aspects of the litigation, and was also necessary to
rebut the technical information presented by
Honeywell. Accordingly, this Court finds that the
work done by each of ICO’s experts was
reasonable based on the length and complexity of
this litigation.
336 F. Supp. 2d at 398.
The fact that the work of the experts assisted the Court
does not, by itself, imply that the amount of time claimed by the
three experts was reasonable. Rather, as was the case with the
time ICO’s attorneys claimed, the District Court has an
obligation to “‘go line, by line, by line’ through the billing
records supporting the fee request.” Evans, 273 F.3d at 362.
Similarly, the Court must give us a sufficiently detailed
explanation of its reasoning so that we can engage in meaningful
appellate review. Since it failed to do so, we will vacate the
award of fees for the three experts (and their respective business
entities).
We also note that duplicative billing may have occurred.
For example, Dr. Montgomery claimed that it took her 246 hours
to prepare an expert report because she needed to review
documents, but Dr. Montgomery separately billed another 570
hours for document review.
B. Non-testifying Experts
ICO requested reimbursement for costs incurred by three
additional experts who assisted with trial preparation but did not
31
testify. The District Court correctly observed that the law is not
entirely clear as to whether a prevailing party may be
compensated for the time of non-testifying experts, but it
resolved the uncertainty in favor of granting ICO’s request. It
reasoned that, due to the complex and technical nature of the
case, it was necessary for ICO’s attorneys to consult with outside
experts, even if those experts did not ultimately testify.
RCRA provides that the court “may award costs of
litigation (including reasonable attorney and expert witness fees)
to the prevailing or substantially prevailing party, whenever the
court determines such an award is appropriate.” 42 U.S.C.
§ 6972(e). Honeywell submits that, since non-testifying experts
are neither attorneys nor expert witnesses, a prevailing party may
not be reimbursed for the costs of their time.
We have held that the fees of non-testifying experts are
compensable in contempt proceedings, see Halderman by
Halderman v. Pennhurst State Sch. & Hosp., 49 F.3d 939, 942-
43 (3d Cir. 1995), but we have not yet determined whether a
prevailing party is entitled to compensation for the costs of non-
testifying experts under a fee-shifting statute. The circuit
caselaw is, for the most part, not on point, and is a mixed bag.
The Court of Appeals for the District of Columbia Circuit
addressed this question in a case involving a fee award under a
provision of the Clean Air Act, 42 U.S.C. § 7607(d), which is
virtually identical to the statute at issue here. See Sierra Club v.
E.P.A., 769 F.2d 796, 812 (D.C. Cir. 1985). In Sierra Club, the
Court concluded that a party could not be reimbursed for the
cost of hiring a non-testifying expert. It observed:
Mr. Lazaro [the non-testifying expert] is obviously
not an attorney. He is also not an “expert witness,”
since review of the regulations was undertaken in
this case on the administrative record without any
new hearings before this or any other court. Cf.
Asarco, Inc. v. EPA, 616 F.2d 1153, 1157-61 (9th
Cir.1980) (allowing limited use of expert
testimony before District Court in reviewing order
by EPA). This leaves only the general rubric of
“costs” under which to compensate petitioners for
making use of Mr. Lazaro's services. Those
32
services do not fall under the traditional concept of
costs . . . .
Id.; see also Natural Resources Defense Council, Inc. v. E.P.A.,
1998 U.S. App. Lexis 26041 (D.C. Cir. Sept. 3, 1998) (per
curiam) (unpublished opinion). Sierra Club is only partially
relevant to our analysis, however, because the opposing party in
that case was the federal government. Thus, the fee-shifting
statute acted as a waiver of sovereign immunity, and the Court
was obligated to interpret the language of the statute in light of
the principle that “waivers of sovereign immunity are to be
construed narrowly.” See Sierra Club, 769 F.2d at 812 (citing
Ruckelshaus v. Sierra Club, 463 U.S. 680, 685 (1983)).
The Court of Appeals for the Eleventh Circuit, in
contrast, has held that the fees of non-testifying experts are
recoverable. See Sierra Club v. Hankinson, 351 F.3d 1358 (11th
Cir. 2003). Hankinson interpreted 33 U.S.C. § 1365(d), a fee-
shifting statute which is virtually identical to 42 U.S.C. §
6972(e). Yet Hankinson is not directly on point either, as the
fees in that case were incurred during the monitoring of a
consent decree. Thus, since there was no ongoing judicial
proceeding, all experts involved were “non-testifying.” Indeed,
the Hankinson Court relied on this fact to distinguish Sierra
Club v. E.P.A. See Hankinson, 351 F.3d at 1363.
The Supreme Court has held that the phrase “reasonable
attorney’s fee” can encompass work performed by individuals
who are not attorneys. See Missouri v. Jenkins ex rel. Agyei, 491
U.S. 274, 285 (1989). In Jenkins, the Court observed, “Clearly,
a ‘reasonable attorney’s fee’ cannot have been meant to
compensate only work performed personally by members of the
bar. Rather, the term must refer to a reasonable fee for the work
product of an attorney.” Id. In light of Jenkins, ICO has a
strong claim that it is entitled to compensation for the work of
the non-testifying experts, as they assisted the attorneys in
preparing their ultimate work product. This view finds support
in a decision of the Court of Appeals for the Seventh Circuit
holding that, while the fees of testifying witnesses were not
recoverable as attorney fees under a statute that did not
separately reference expert witnesses, the fees of non-testifying
witnesses were. That Court observed:
33
Experts are not only hired to testify; sometimes
they are hired, also or instead, to educate counsel
in a technical matter germane to the suit. The time
so spent by the expert is a substitute for lawyer
time, just as paralegal time is, for if prohibited (or
deterred by the cost) from hiring an expert the
lawyer would attempt to educate himself about the
expert's area of expertise. To forbid the shifting of
the expert’s fee would encourage
underspecialization and inefficient trial
preparation, just as to forbid shifting the cost of
paralegals would encourage lawyers to do
paralegals’ work.
Friedrich v. Chicago, 888 F.2d 511, 514 (7th Cir. 1989).19
We agree with this logic. The purposes of RCRA’s fee-
shifting provision would not be well-served by prohibiting
reimbursement for the fees of non-testifying experts, at least to
the extent that these experts serve to “educate counsel in a
technical matter germane to the suit.” It is not unreasonable to
expect that attorneys will rely on experts to educate them as to
scientific and technical issues involved in a given case. Indeed,
as the Seventh Circuit observed, prohibiting reimbursement for
the fees of non-testifying experts would simply encourage
attorneys to educate themselves, undoubtedly at a higher cost.
Thus, we will affirm the District Court on this point.
VIII. Copying Costs
The District Court awarded Terris $148,715 in copying
costs. This award posited a cost of 20 cents per page claimed for
19
Friedrich, a decision interpreting 42 U.S.C. § 1988, was
vacated and remanded for reconsideration, see 499 U.S. 933 (1991), in
light of West Virginia Univ. Hospitals, Inc. v. Casey, 499 U.S. 83 (1991),
which held that § 1988 did not permit non-testifying expert fees to be
shifted to the government. Casey has been superceded by statute. See
Landgraf v. USI Film Prods., 511 U.S. 244, 251 (1994) (observing that
Ҥ 113 [of the Civil Rights Act of 1991] responds to [Casey] by
providing that an award of attorney’s fees may include expert fees”).
34
internal copying; external copying was billed at cost. While the
District Court acknowledged that this 20 cents per page rate was
higher than the “10 to 15 cents deemed reasonable by most
federal courts,” 336 F. Supp. 2d at 400 n.7, it concluded that 20
cents was acceptable.
This Court taxes copying costs at 10 cents per page.
See Third Circuit L.A.R. 39.3(c). As the District Court found,
most courts to consider the issue have found that a rate of 10 to
15 cents per copy is appropriate.20 We have serious concerns
about the District Court’s decision to grant ICO reimbursement
at the rate of 20 cents per page. We judicially notice that Fed
Ex/Kinko’s charges less than 7 cents per page for large volume
copying. The District Court did note that different types of
copies have different costs; obviously color copies are more
expensive than black and white ones. However, it is not clear
from the record whether ICO’s attorneys performed their more
expensive copying in house.
The District Court seems not to have given this aspect of
the case sufficient attention. Since we are remanding so many
aspects of the award, we will also vacate and remand on this
issue for fuller consideration.21 In the same vein we will also
vacate and remand for a more adequate review of the number of
copies made by plaintiffs. ICO’s attorneys submitted
documentation for their internal and external copying, and the
District Court concluded that the total number of copies was not
excessive. But ICO requested reimbursement for 387,619
internal copies, and an unknown number of external copies.
Thus, more than a conclusory ruling is called for.22
20
On two occasions, district judges in this Circuit have
found that 25 cents per copy was a reasonable amount to charge.
See James v. Norton, 176 F. Supp. 2d 385, 400 (E.D. Pa. 2001);
Churchill v. Star Enters., 1998 U.S. Dist. LEXIS 6068 at 29-30
(E.D. Pa. Apr. 17, 1998) (unpublished opinion).
21
We affirm the award for external copying, which was
billed at cost.
22
ICO concedes that its copying award should be reduced by
$53.40 for copying relating to the other defendants. The District
35
IX. Costs of Overtime and Temporary Employees
Finally, Honeywell challenges the District Court’s
decision to compensate ICO for overtime costs, the costs of
temporary employees, and the cost of meals associated with
overtime. The Court correctly noted that overtime and related
costs are only reimbursable “where there is a need for the
additional employee or overtime, such as with an emergency.”
See 336 F. Supp. 2d at 401. Honeywell argues that the District
Court misapplied this principle, as it failed to identify “a single
instance in which the incurrence of temporary employee costs,
staff overtime, or overtime meal costs corresponded to an
unavoidable emergency.”
Honeywell is correct that overtime costs may only be
reimbursed when reasonably necessary. However, the District
Court concluded that the amount of overtime at issue—97.75
hours over approximately nine years—was reasonable in light of
“the complexity of the litigation and the tremendous number of
documents that were produced and deadlines set by this Court.”
Id. at 402. We agree with the District Court that, in a complex,
multi-year action such as this, a certain amount of overtime is
inevitable. The amount at issue in this case (just over ten hours
per year) does not strike us as at all excessive. Moreover, the
District Court has a far greater understanding of the deadlines it
imposed and the complexity of the underlying action. For this
reason, we find that the District Court’s conclusion that the
amount of overtime and related costs claimed by ICO was
justified by the complexity of the underlying action and the
deadlines set by the Court was not an abuse of discretion. We
will therefore affirm this portion of the fee award.
Court also awarded ICO $17 for copying expenses related to the
two in limine motions filed by Grace discussed above. See supra
Part VI. If the District Court determines that the time spent by
ICO’s attorneys contesting these motions may not be charged to
Honeywell, then it should reduce the photocopying award
accordingly. We realize that these sums are tiny in the grand
scheme of things, but we mention them in the interest of
completeness.
36
X. Summary
To summarize, we affirm the award in all respects with
the exception of the following charges:
• We will vacate that portion of the award associated with
the six specific charges referenced above (the time spent
preparing pretrial and post-trial findings of fact and
conclusions of law; the time “dedicated to matters related
to the pretrial order”; the time spent reviewing documents;
the time spent preparing a motion for summary judgment;
and the total award of paralegal time), and remand so that
the District Court may conduct a more searching analysis
of the time claimed by ICO’s attorneys.
• We will vacate the $768,791.44 awarded for the work of
Dr. Bruce Bell, Dr. Ben Ross, and Dr. Cheryl
Montgomery and their respective business entities, so that
the District Court may conduct a more thorough analysis
of the time claimed by these experts.
• We will vacate the $148,715 for photocopying costs, and
remand so that the District Court may conduct a more
searching review of the number of copies claimed by ICO
as well as the appropriate billing rate for in-house copies.
• We will vacate the $46,970.48 awarded for travel time
and travel costs, and remand so that the District Court
may make a determination as to the regular practice in the
relevant market for billing such time.
• We will vacate the portion of the award, including the
$70.40 in photocopying costs, relating to the time spent on
motions which Honeywell alleges involve other
defendants. On remand, the District Court shall consider
whether the 41.78 hours ICO claims relating to the two in
limine motions filed by Grace were related to its suit
against Honeywell.
• Finally, we will vacate the award of $541.08 relating to
37
“local travel expenses” which the District Court neglected
to deduct from its final award. ICO does not contest this
reduction. See supra note 3.
38