NOTES ON SOME INTRIGUING RULINGS[Posted December 5, 2008] With the Supreme Court out of session until mid-January, this is a good time to take a closer look at some rulings that aren’t in the limelight – at least not the one usually cast by this web site.
On Wednesday, the Fourth issued an important ruling in an attorney’s fee dispute. The case is Grissom v. The Mills Corp., a Sarbanes-Oxley whistleblower claim by a former employee. The employee added defamation and breach of contract counts to his complaint. Perhaps sensing a potential loss at trial, the employer tendered a Rule 68 offer of judgment, which the employee accepted. Since the offer excluded costs and attorneys’ fees, and since SOX provides for a fee award for successful plaintiffs, the plaintiff then filed a fee claim for about 3½ times the amount of the judgment. The district court reduced the fee request by about 25% and entered an award on that basis.
The appellate court first decides the threshold question of whether the employee is entitled to fees at all. The court finds that the employer’s obligation to pay the employee the amount of the underlying judgment is enough of a victory, in that it works a “material alteration of the legal relationship of the parties.” So the employee gets a fee award.
Now the real fun begins: The Fourth takes up the employer’s challenge to the hourly rates and number of hours claimed by the employee’s lawyers.
Anyone who has litigated an attorney’s fee claim under a fee-shifting statute has heard of Johnson v. Georgia Highway Express, 488 F.2d 714 (5th Cir. 1974). That’s the seminal case that lays out twelve factors to be considered by trial courts in calculating what the courts call the “lodestar amount” of fees that should be awarded. The Fourth Circuit approved of this calculus in a 1987 case, and the Big Supremes even gave it a nod in a 1983 opinion, so the analysis is fairly well-entrenched by now.
Back to the present: The main dispute in Grissom is the question of the employee’s attorneys’ hourly rate. This, as you will imagine, is a topic of keen interest to lawyers, of both the trial and appellate variety. The fee petition claimed hourly rates starting at $300 or less for the baby lawyers, up to $450 for the senior partner in the case. The claimants backed the fee request with an affidavit from that senior partner, setting forth the fact that the claimed rates were those lawyers’ normal billing rates.
This, in my view, is a dangerous way to support your fee petition. Some jurists might decline to afford substantial weight to what they perceive as a self-serving declaration by a clearly interested party. In supporting my infrequent fee petitions, I always try to secure affidavits from experienced, well-respected lawyers who have no connection with the case, in the event I get a skeptical judge asking me what I have to support me other than my own word. (As a practice pointer, I encourage you to talk over your hourly rate claim with your opponent before filing the petition, to see if he will agree to the rate. If you get that agreement, you may be able to avoid the problems that ensue here. Even if you have to reduce your rate a bit in order to get that agreement, it will be worth it to avoid the problems attendant to a big fuss like this one.)
One major problem with this affidavit is that it set forth the normal billing rates for those attorneys, not the “prevailing market rates in the relevant community” for such work. In this latter regard, the fee petition was bare. But the claimants also cited two earlier cases in which particular hourly rates for the senior partner had been approved by the court. (There were apparently no approvals of comparable rates for the associates, so those two cases didn’t help their claims.) Unfortunately, the billing rate claimed in this case was higher than the rate awarded in the more recent of the two cited cases, increasing by a rate far greater than the intervening inflation rate. You see where this is going?
It gets worse. After the Fourth Circuit reduces the hourly rates charged, it then sets its targets on the hours claimed. In my mind, the claimants fare even worse here than they did with the hourly rates. The court remands and directs the district court to reevaluate the claim based on several discrepancies it finds (well, probably with a bit of help from the employer in its brief). The court notes that the employee’s lawyers claimed over 100 hours of time just in drafting discovery motions. I don’t know how complicated this case was (although the employer claims it was “a relatively simple case”), but back in my previous life, when I handled trial litigation, 100 hours was often enough time for me to do everything in a case, including trying it.
But this claim is more problematic than just the number of hours; there are some embarrassing disclosures here, including the fact that the lawyers started working on motions to compel three months before discovery began in the case. In another instance, the lawyers started billing for another motion to compel the day after the discovery was served. Ex-cuse me? I recognize that this is a Rocket Docket case, but don’t the Bad Guys have a chance to answer on time before you start crafting motions?
Yes, they do, the court at least implicitly rules in this case, in directing the district court to take a closer look. I suspect that on remand, the district court’s award will be far lower than the original award, and not just because of the decrease in the hourly rate. The remand does make me wonder whether the employee’s lawyers will ask for appellate fees as well, since they at least partially prevailed (remember, the employer had sought a ruling that the employee wasn’t a prevailing party, and the employee won that). Perhaps the fee litigation will swallow the underlying dispute once again.
I cannot conclude this discussion without mentioning something that seems glaring to me, but might not be apparent on the surface. The appellate court has broadly hinted that the employee’s lawyers may have engaged in significant overbilling in this case. Never mind the fuss over the hourly rate; that’s a fair topic for dispute. I’m talking about the suggestion that more hours are being claimed than were warranted. If the district court agrees and reduces the fee award for this factor, then the lawyers will have lost more than just the amount of money they sought. They will have lost something that money cannot replace: Personal credibility with the courts. Lawyers making fee requests face internal pressure to claim the highest possible fee award. After all, one of the reasons we’re in business is to earn a living. But an aggressive posture on a fee claim can backfire if the court perceives that you’re overreaching. I am assuming that the senior partner in this case, who is a very accomplished lawyer herself, was unaware of this incongruous-looking element of her associates’ claims.
A lawyer’s personal credibility places a ceiling upon his effectiveness in any given courtroom. The more the court believes that you are a straight shooter, the more you can achieve as an advocate. If the court feels that it has to view your assertions with distrust, then you’re facing an uphill battle every time you enter the well of the court. For this reason, fee petitions should be the product of restraint, even if it costs you a bit of money in the short term.
One last tidbit from the Grissom opinion: The district court had set the original award in part because it found that the “deadlines imposed by the court required [employee’s] counsel to work at a faster pace.” (These deadlines were nothing different from what the court usually imposes, but remember, this is the Eastern District of Virginia we’re talking about here.) That is, because of where the case was filed, the court allowed a bit more leeway in the fees claimed. The Fourth categorically rejects this as a legitimate factor for fee petitions. In essence, there is no “Rocket Docket multiplier” in fee disputes.
Court of Appeals of Virginia
My long-time readers know that I almost never cover unpublished opinions from the CAV. They carry little or no precedential weight (depending on which judge on the court you talk to), and they outnumber the published ones, so I don’t have time to address each of them. But occasionally I see one that calls for comment, and one such came down this week. I thank Virginia Lawyers Weekly for the tip on this case (scroll down to December 2).
Two months ago, the court handed down a published opinion in Singleton v. Commonwealth, a contempt citation against a lawyer who had arranged with the prosecutor for a continuance of a criminal case, and told his client to show up on the new date instead of the original date. When neither client nor lawyer showed up on the original return date, the trial judge bristled at the suggestion that a lawyer could take over from the court control over whether a continuance would be granted. The court found the lawyer in contempt, and the CAV affirmed. It held that the lawyer should have had his client show up to see if the continuance was granted, instead of simply assuming that it would be granted.
Before the Singleton opinion was handed down, another criminal defense lawyer in a Norfolk case called a prosecutor to seek a continuance in his case. The prosecutor agreed, since the state trooper had a schedule conflict and couldn’t appear anyway. This, you should know, is a perfectly routine exchange, whether it comes originally from the Commonwealth or from the defense, and lawyers almost always say yes to such requests. We are all part of a fraternity of sorts, and most lawyers understand the value of acceding to reasonable requests, something that’s contained in the Principles of Professionalism recently approved by the Supreme Court. And after all, one day you’ll be the one who needs the favor.
Standard operating procedure held true here, and the lawyers agreed to the continuance. The defense lawyer then called his client and, also as SOP, told him about the new date, and not to come to court on the original return date. This time, the lawyer showed up, and he and the prosecutor presented the judge with an agreed continuance order.
The problem was, this was the same judge who had found Singleton to be in contempt. He reacted the same way this time, holding this attorney in contempt of court for daring to advise his client not to come to court on a day in which there would be no trial.
On appeal, the attorney argues that he had no contumacious intent. Unfortunately for him, that issue was resolved adversely in Singleton. He then tried to distinguish Singleton (which must have been issued about the time this case was argued, and must have given the appellate lawyer in this case a heart attack) by contending that he had showed up on the return date, unlike Singleton. No dice, the appellate court rules; that’s “a distinction without a difference.” The gravamen of this offense is telling your client not to come to court; it doesn’t matter whether the lawyer shows up or not. Finally, the lawyer argues that the prosecutor contributed to the problem because, unlike in Singleton, he also needed the extra time.
The CAV rejects this argument, too, ultimately affirming in Zedd v. Commonwealth, handed down on December 2. It holds that “the court could have denied the continuance and then dismissed the case if the Commonwealth were unable to proceed.” This ruling leads me to muse that if the trial court had not wanted to grant the continuance, it could have dismissed the case with or without the presence of the defendant, since the Commonwealth has the burden of proof. But I suppose we’ll never know the response to this musing.
I found Singleton to be very troubling when it came down, and this one is even more so. Both defense lawyers did what is normally done in crowded misdemeanor dockets, and almost all judges allow the lawyers to exercise the same form of professionalism I mentioned above. This particular judge decided that he, not the lawyers, would decide who should show up, and when, in his courtroom, and decided to exercise his authority over the “offending” lawyers. In these two cases, it turned out that these two lawyers just happened to be unlucky enough to be in the wrong courtroom.
I would have hoped that the Court of Appeals would have found a way to rule that this contempt finding was an abuse of discretion. I acknowledge that that isn’t easy, given the deferential standard of review. But these two lawyers, in my opinion, never should have been cited in the first place. The problem, as appellate lawyers know well, is that just because a trial court’s ruling is wrong, or even patently unfair, doesn’t mean that it’s reversible. (But as VLW suggests in its report of the case, this is the kind of thing that likely cost this judge his robe and his gavel earlier this year.)
In my view, very few judges will follow the lead of this erstwhile jurist; the overwhelming majority will continue to allow the parties to make reasonable schedule accommodations in situations like this. But lawyers have to look out for other judges who might follow this unfortunate lead, and refuse to permit agreements like this very common one. I hasten to add that in smaller jurisdictions, where very few cases are on a given misdemeanor docket, an agreement like this can have a more drastic effect; in those circumstances, it is essential that the lawyers notify the court as soon as possible, so judicial resources are not wasted. But these two rulings will require cautious lawyers to tell their clients to make a wholly wasted trip to the courthouse, especially when they travel to unfamiliar venues, just to ensure that the wrong judge doesn’t get the case, and decide to make an example of the lawyer. That, in my opinion, is but one unfortunate legacy of these two rulings.
The Supreme Court decides one case today by unpublished order. It reverses the dismissal of a wrongful death claim in Halsey v. Grafton School, a Winchester case in which the trial court had found the school to be entitled to charitable immunity. The administrator pleaded gross negligence in order to avoid that immunity doctrine, but the trial court ruled that the allegations in the complaint were insufficient to make out a case for gross negligence.
Today, by a 6-1 margin (Justice Kinser dissents, but does not file an opinion saying why), the court reinstates the case, finding that the allegations, if proved, would lead to a jury question on whether the school acted with gross negligence. If any of my readers would like a copy of the order, you may contact me for one. As befits an unpublished order, there’s not much that will be of use to you, but I’m happy to pass it along if you want a copy.
There are plenty of opinions parsing the limits of gross negligence, and the court doesn’t find this one to be sufficiently new or groundbreaking to be worthy of precedential value; hence the unpublished order. But it does reinforce my view that, taken as a whole and individually, the court and the justices are firmly committed to jury determination of fact issues.