No cv IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
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1 No cv IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ARBOR HILL CONCERNED CITIZENS NEIGHBORHOOD ASSOCIATION, ALBANY COUNTY BRANCH OF THE NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE AARON MAIR, MARYAM MAIR, and MILDRED CHANG, Plaintiffs-Appellants, v. COUNTY OF ALBANY and ALBANY COUNTY BOARD OF ELECTIONS, Defendants-Appellees, and THE REPUBLICAN CAUCUS OF THE ALBANY COUNTY LEGISLATURE, Intervenors. On Appeal From The United States District Court For the Northern District of New York BRIEF FOR 29 PUBLIC INTEREST ORGANIZATIONS, LEGAL SERVICE ORGANIZATIONS, AND CIVIL RIGHTS LAW FIRMS AS AMICI CURIAE SUPPORTING PLAINTIFFS-APPELLANTS MOTION FOR PANEL REHEARING OR REHEARING EN BANC David Udell Laura Abel Deborah Goldberg BRENNAN CENTER FOR JUSTICE AT NYU SCHOOL OF LAW 161 Avenue of the Americas, 12th Fl. New York, NY (212) Counsel for Amici Curiae Joshua A. Block Harry Sandick* JENNER & BLOCK LLP 919 Third Avenue New York, NY (212) Counsel for Brennan Center for Justice at NYU School of Law * Counsel of Record (Additional Counsel Inside Cover)
2 Leon Friedman 148 East 78th Street New York, N.Y (212) Counsel for Amici Curiae
3 RULE 26.1 CORPORATE DISCLOSURE STATEMENT None of the amici is owned by a parent corporation, and no publicly held corporation owns more than 10% of stock in any amicus. ii
4 TABLE OF CONTENTS RULE 26.1 CORPORATE DISCLOSURE STATEMENT... ii TABLE OF CONTENTS... iii TABLE OF AUTHORITIES... iv INTEREST OF AMICI CURIAE...1 INTRODUCTION...2 ARGUMENT...4 I. Precedent Requires that Attorney s Fees in Civil Rights Litigation Be Calculated at the Prevailing Market Rates Charged in Comparable Complex Federal Litigation...4 II. The Actual Market, Not the Negotiations of a Thrifty, Hypothetical Client, Should Determine the Reasonableness of Attorney s Fees under 42 U.S.C III. The Panel s Reasoning Will Have a Devastating Impact on the Enforcement of Civil Rights Laws CONCLUSION...18 iii
5 TABLE OF AUTHORITIES Page Cases Am. Booksellers Ass n v. Hudnut, 650 F. Supp. 324 (S.D. Ind. 1986)...13 Barfield v. N.Y. City Health & Hosps. Corp., No. 05-civ-6319, 2006 WL (S.D.N.Y. Aug. 11, 2006)...13 Blanchard v. Bergeron, 489 U.S. 87 (1989)...9 City of Burlington v. Dague, 505 U.S. 557 (1992)... 10, 11, 17 City of Riverside v. Rivera, 477 U.S. 561 (1986)....8, 9 Covington v. District of Columbia, 57 F.3d 1101 (D.C. Cir. 1995)...12 Forbes v. Giuliani, 111 F. Supp. 2d 381 (S.D.N.Y. 2000)...12 Forsyth County v. Nationalist Movement, 505 U.S. 123 (1992)...14 Getty Petroleum Corp. v. Bartco Petroleum Corp., 858 F.2d 103 (2d Cir. 1988)...15 Gusman v. Unisys Corp., 986 F.2d 1146 (7th Cir. 1993)...11 Heng Chan v. Sung Yue Tung Corp., No , 2007 WL (S.D.N.Y. May 8, 2007)...4 Hensley v. Eckerhart, 461 U.S. 424 (1983)...11 In re Cont l Ill. Sec. Litig., 962 F.2d 566 (7th Cir. 1992)...11 Insinga v. Cooperatieve Centrale Raiffeisen Boerenleenbank B.A., No. 03-civ-7775, --- F. Supp. 2d ----, 2007 WL (S.D.N.Y. Mar. 12, 2007)...12 Laffey v. Northwest Airlines, Inc., 572 F.Supp. 354 (D.D.C. 1983)...12 Meriwether v. Coughlin, 727 F. Supp. 823 (S.D.N.Y. 1989)...13 iv
6 Page Miele v. N.Y State Teamsters Conference Pension & Ret. Fund, 831 F.2d 407 (2d Cir. 1987)...7 Miele v. N.Y. State Teamsters Conference Pension & Ret. Fund, 831 F.2d 407 (2d Cir. 1987)...6 N.Y. State Ass n for Retarded Children, Inc. v. Carey, 711 F.2d 1136 (2d Cir. 1983)...7 Nike, Inc. v. Top Brand Co., No. 00-civ WL (S.D.N.Y. Feb. 27, 2006)...12 NLRB v. Local 3, Int l Brotherhood of Elec. Workers, 471 F.3d 399 (2d Cir. 2006)...10 Pennsylvania v. Del. Valley Citizens Council for Clean Air, 478 U.S. 546 (1986)...2 Phoenix Four, Inc. v. Strategic Resources Corp., No. 05-civ-4837, 2006 WL (S.D.N.Y. Aug. 1, 2006)...13 Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169 (4th Cir. 1994)...13 Save Our Cumberland Mountains, Inc. v. Hodel, 857 F.2d 1516 (D.C. Cir. 1988)...8 Stanford Daily v. Zurcher, 64 F.R.D. 680 (N.D. Cal. 1974)...5 Student Public Interest Research Group of New Jersey, Inc. v. AT&T Bell Labs., 842 F.2d 1436 (3d Cir. 1988)...8 Statutes 42 U.S.C , 5, 8 42 U.S.C. 7604(d)...2 Legislative History H.R. Rep. No S. Rep. No , 6, 16, 18 v
7 Page The Legal Fees Equity Act, S. 2802, 98th Cong., 2d Sess. (1984); S. 1580, 99th Cong., 1st Sess. (1985)...9 Other Authorities Harold J. Krent, Explaining One-Way Fee Shifting, 79 Va. L. Rev (1993)...15 Legal Services Corporation, Documenting the Justice Gap in America: Documenting the Current Unmet Legal Needs of Low-Income Americans (2005)...17 Samuel R. Berger, Court Awarded Attorneys Fees: What Is Reasonable?, 126 U. Pa. L. Rev. 281 (1977)...18 Steward J. Schwab & Theodore Eisenberg, Explaining Constitutional Tort Litigation: The Influence of the Attorney Fees Statute and the Government as Defendant, 1988 Cornell L. Rev vi
8 INTEREST OF AMICI CURIAE Amici are 29 public interest organizations, legal service organizations, and civil rights law firms that rely on 42 U.S.C or on analogous fee-shifting statutes. A detailed description of the interest of each amicus is set forth as part of the Appendix to this brief. Amici submit this brief in support of the plaintiffsappellant s petition for panel rehearing or rehearing en banc. The panel s opinion contains language indicating that attorney s fee awards should be reduced in certain civil rights cases on the ground that a hypothetical thrifty client would presume that certain attorneys would be willing to take cases at a reduced rate of compensation because they are handling the matter pro bono, pursuing reputational benefits, or seeking to achieve societal goals. As organizations that depend on 42 U.S.C or other fee-shifting statutes to sustain their work, amici are concerned that the panel s opinion conflicts with Supreme Court and Second Circuit precedent, could weaken their ability to recover attorney s fee awards in civil rights cases, and would thereby diminish their ability to bring such cases and to advance the public interest. Amici believe that their experience with 42 U.S.C and other fee-shifting statutes enables them to provide the Court with additional perspectives not presented by the parties briefs and to illustrate the adverse collateral consequences of the panel s decision.
9 The parties to this appeal have consented to the filing of this brief. Amici have also submitted a motion dated May 22, 2007 seeking leave to file. INTRODUCTION In an effort to resolve the endemic confusion surrounding the proper application of the forum rule, see Slip Op. at 19 n.3, the panel s opinion threatens to upend long-settled case law governing attorney s fees in civil rights cases. Amici express no opinion regarding whether the attorney s fee award in this case was reasonable in light of all the case-specific variables. See Slip Op. at 17 (emphasis omitted). But amici urge the Court to reconsider language that could be construed as holding that reasonable attorney s awards in civil rights cases should reflect a hypothetical bargaining process in which a reasonable plaintiff negotiates for a lower hourly rate in consideration for the lawyer s non-monetary returns in experience, reputation, or achievement of the attorneys own interests and agendas. Id. at 26. If left unaddressed, this language has the potential to inflict enormous collateral damage on the civil rights bar, and consequently on the enforcement of civil rights laws. 1 1 Indeed, because the Supreme Court has used its analysis of 42 U.S.C to interpret the fee-shifting provisions of other statutes, see, e.g., Pennsylvania v. Del. Valley Citizens Council for Clean Air, 478 U.S. 546 (1986) (construing reasonable attorney s fee provision of Clean Air Act, 42 U.S.C. 7604(d) (1982)), the panel s analysis will have important ramifications for environmental law, consumer protection statutes, and a wide array of congressional policies that depend on such fee-shifting provisions for enforcement. 2
10 Although the parties never briefed the issue, the panel opinion without citing to any legal authority, empirical study, or factual finding in the record speculates in four different places about the ability of civil rights plaintiffs to negotiate for reduced attorney s fees for pro bono representation. See id. at 4 (stating that the district court should consider whether the attorney had an interest (independent of that of his client) in achieving the ends of the litigation or initiated the representation himself, whether the attorney was initially acting pro bono (such that a client might be aware that the attorney expected low or non-existent remuneration), and other returns (such as reputation, etc.) the attorney expected from the representation ); id. at 17 ( The district court should also consider that such an individual might be able to negotiate with his or her attorneys, using their desire to obtain the reputational benefits that might accrue from being associated with the case. ); id. at 22 ( Not incidentally, a reasonable, paying client might consider whether a lawyer is willing to offer his services in whole or in part pro bono, or to promote the lawyer s own reputational or societal goals. ); id. at ( We are confident that a reasonable, paying client would have known that law firms undertaking representation such as that of plaintiffs often obtain considerable non-monetary returns in experience, reputation, or achievement of the attorney s own interests and agendas and would have insisted on paying his attorneys at a rate no higher than that charged by Albany attorneys.... ). None of this 3
11 speculation is essential to the panel s analysis of the forum rule or its ultimate conclusion that, on the specific facts of this case, the plaintiffs attorneys should be paid at a rate no higher than that charged by Albany attorneys, even though the attorneys in question are located in New York City. Id. at These portions of the panel s opinion are both inconsistent with governing law and unnecessary to resolve this case. Amici respectfully urge this Court to grant the plaintiffs petition for panel rehearing or rehearing en banc and excise the four passages quoted above. ARGUMENT I. Precedent Requires that Attorney s Fees in Civil Rights Litigation Be Calculated at the Prevailing Market Rates Charged in Comparable Complex Federal Litigation. If left in place, the panel s language threatens to have far-reaching effects beyond the facts of this case. The opinion suggests that the reasonable fees in civil rights cases should be lower than normal billing rates because, the panel hypothesizes, a reasonable, paying client might consider whether a lawyer is willing to offer his services in whole or in part pro bono, or to promote the lawyer s own reputational or societal goals. Slip Op. at Lower courts have already begun to rely on these passages as controlling authority. See Heng Chan v. Sung Yue Tung Corp., No , 2007 WL , at *3 (S.D.N.Y. May 8, 2007) (Lynch, J.) (citing to the panel s opinion and noting that the requested attorney s fees already reflect a substantial discount from the regular market rates charged by Skadden for the services of these attorneys ). 4
12 Such a conclusion flies in the face of congressional intent and long-settled precedent. The Senate Report accompanying 42 U.S.C declared in no uncertain terms that [i]t is intended that the amount of fees awarded under [the statute] be governed by the same standards which prevail in other types of equally complex Federal litigation, such as antitrust cases and not be reduced because the rights involved may be non pecuniary in nature. S. Rep. No , at 6, 1976 U.S.C.C.A.N. 5908, The Senate Report cited approvingly to Stanford Daily v. Zurcher, 64 F.R.D. 680 (N.D. Cal. 1974), in which the court warned that it must avoid... decreasing reasonable fees because the attorneys conducted the litigation more as an act of pro bono publico than as an effort at securing a large monetary return. Id. at 682. The rationale of awarding reasonable attorneys fees, after all, springs from the need for placing the legal defense of certain constitutional principles and some congressional policies on an equal footing with the protection of private interests. Id. 3 3 As recounted in the Senate Report: The remedy of attorneys fees has always been recognized as particularly appropriate in the civil rights area, and civil rights and attorneys fees have always been closely interwoven. In the civil rights area, Congress has instructed the courts to use the broadest and most effective remedies available to achieve the goals of our civil rights laws. The very first attorneys fee statute was a civil rights law, 5
13 The Supreme Court cited the Senate Report extensively in its unanimous decision in Blum v. Stenson, 465 U.S. 886 (1984). Although the panel opinion references Blum in other respects, it does not refer to Blum s central holding: that reasonable fees should be calculated according to the prevailing market rates in the relevant community regardless of whether plaintiff is represented by private or nonprofit counsel. Id. at 895 (emphasis added; footnote omitted). The Supreme Court considered and squarely rejected the Solicitor General s argument that awarding attorney s fees at the market rate would confer an unjustified windfall or subsidy upon legal services organizations. Id. at 893 (quoting Solicitor General s Br. at 6). After examining the legislative history, the Court concluded that Congress did not intend the calculation of fee awards to vary depending on whether plaintiff was represented by private counsel or by a nonprofit legal services organization. Id. at 894. The Second Circuit has long honored Blum s clear command that prevailing market rates are fully applicable to fee awards to non-profit organizations. Miele v. N.Y. Teamsters Conference Pension & Ret. Fund, 831 F.2d 407, 409 (2d Cir. 1987). In doing so, this Court abrogated prior decisions the Enforcement Act of 1870, 16 Stat. 140, which provided for attorneys fees in three separate provisions protecting voting rights. S. Rep. No , at 3, reprinted in 1976 U.S.C.C.A.N. 5908, (footnote omitted). 6
14 expressing concern that the calculation of fee awards based on the hourly rate of private law firms would produce a windfall for the prevailing party. See id. (citing N.Y. State Ass n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, (2d Cir. 1983)). Instead, Miele declared that the district court s discretion in setting a reasonable attorney s fee award must be exercised on the basis of rates charged to clients of private law firms. Otherwise, the concept of prevailing market rates would mean less for legal services organizations than for law firms, a position the Supreme Court has rejected. Id. The panel opinion s speculation about the bargaining abilities of a thrifty, hypothetical client is all the more puzzling because this Court has already held that civil rights attorneys should be compensated at the prevailing market rate, even when they have already agreed to charge their client at a discounted rate. In Reiter v. MTA New York City Transit Authority, 457 F.3d 224 (2d Cir. 2006), the plaintiff s counsel agreed to offer representation at a reduced rate because the plaintiff was bringing a civil rights case under Title VII. In light of this fee arrangement, the magistrate judge concluded that Reiter s attorneys could not recover a fee award at the prevailing market rate because the amount actually charged by counsel was a dispositive indicator of a reasonable rate. Id. at 228. This Court vacated and remanded. The Reiter panel explained that [i]mportant public policy considerations dictate that we should not punish an under-charging 7
15 civil rights attorney and that courts must avoid decreasing reasonable fees because the attorneys conducted the litigation more as an act of pro bono publico than as an effort at securing a large monetary return. Reiter, 457 F.3d at 233 (quoting Blum, 465 U.S. at 895) (alterations incorporated). 4 If an attorney s fee award cannot be reduced because of a deal that was actually negotiated between a paying civil rights client and his or her attorney, then it defies logic to reduce attorney s fees across the board based on a hypothetical negotiation process that never took place. The panel opinion never mentioned Miele and relegated Reiter to a but see citation in a footnote as part of unrelated discussion. See Slip Op. at 25 n.6. Panel rehearing or rehearing en banc should be granted if for no other reason than to correct this clear departure from binding precedent. See Fed. R. App. P. 35(b)(1)(A). II. The Actual Market Rate, Not the Negotiations of a Thrifty, Hypothetical Client, Should Determine the Reasonableness of Attorney s Fees under 42 U.S.C In calculating attorney s fees by imagining a hypothetical bargaining process between a thrifty, hypothetical client and a lawyer with reputational and societal goals, the panel also ignored City of Riverside v. Rivera, 477 U.S. 561 (1986). City of Riverside explained that Congress enacted the fee-shifting 4 Other Circuits have reached the same conclusion. See Save Our Cumberland Mountains, Inc. v. Hodel, 857 F.2d 1516, (D.C. Cir. 1988) (en banc); Student Public Interest Research Group of New Jersey, Inc. v. AT&T Bell Labs., 842 F.2d 1436, (3d Cir. 1988) (Becker, J.). 8
16 provisions precisely because it determined that private-sector fee arrangements were inadequate to ensure sufficiently vigorous enforcement of civil rights. Id. at 578 (plurality opinion); see also id. at 586 (Powell, J., concurring) ( It is clear from the legislative history that 1988 was enacted because existing fee arrangements were thought not to provide an adequate incentive to lawyers particularly to represent plaintiffs in unpopular civil rights cases. ). It makes no sense to calculate fees under the statute by referencing a negotiation process that Congress determined to be inadequate. 5 Similarly, in Blanchard v. Bergeron, 489 U.S. 87 (1989), the Supreme Court unanimously rejected the argument that a civil rights attorney s fee award should be capped by contingency fee arrangements negotiated with clients. As the Court explained, Congress sought to correct for market distortions that would otherwise encourage lawyers to pursue monetary recovery in civil rights cases instead of pursuing appropriate injunctive and declaratory relief: If a contingent-fee agreement were to govern as a strict limitation on the award of attorney s fees, an undesirable emphasis might be placed on the importance of the recovery of damages in civil rights litigation. Id. at 95. By placing an undue emphasis on the 5 Notably, in the mid-1980s, Congress considered and rejected legislation that would have required attorney s fees to be limited to a proportional share of the damages actually recovered. See The Legal Fees Equity Act, S. 2802, 98th Cong., 2d Sess. (1984); S. 1580, 99th Cong., 1st Sess. (1985); see also City of Riverside, 477 U.S. at 581 n.12 (plurality opinion). 9
17 bargaining abilities of a thrifty, hypothetical client, the panel opinion re-imports those market distortions in the guise of calculating a reasonable fee. Even if a focus on the bargaining process could be reconciled with City of Riverside and Blanchard or with congressional intent, the panel s approach would create only confusion and uncertainty by focusing attention away from the objective rates that actually prevail in the marketplace and toward hypothetical rates in a marketplace that does not exist. This approach is at odds with the Supreme Court s warnings that Congress has created an artificial market for [civil rights cases] by fee shifting and looking to that market for the meaning of fee shifting is obviously circular. Our decrees would follow the market, which in turn is based on our decrees. City of Burlington v. Dague, 505 U.S. 557, 564 (1992); see also Blum, 564 U.S. at 895 n.11 ( The 1988 fee determination is made by the court in an entirely different setting: there is no negotiation or even discussion with the prevailing client.... ). For example, this Court has already held that the government can also recover attorney s fees at the prevailing market rate. See NLRB v. Local 3, Int l Brotherhood of Elec. Workers, 471 F.3d 399 (2d Cir. 2006) (awarding attorney s fees to government in contempt motion). It is hard to comprehend how a lower court should approximate the bargaining process that a thrifty, hypothetical client would use in securing representation for an NLRB enforcement action. At 10
18 a minimum, the uncertainty inherent in the panel s new approach will likely create a substantial amount of wasteful motion practice in the lower courts as defendants use this new subjective inquiry to argue that standard market rates should not apply for the plaintiff s counsel. Cf. City of Burlington, 505 U.S. at (warning against an approach that would make the setting of fees more complex and arbitrary, hence more unpredictable, and hence more litigable and stating that [i]t is neither necessary nor even possible for application of the fee-shifting statutes to mimic the intricacies of the fee-paying market in every respect ); Hensley v. Eckerhart, 461 U.S. 424, 437 (1983) ( A request for attorney s fees should not result in a second major litigation. ). The panel s decision will require district court judges removed from the day-to-day workings of an actual practice to speculate on what a hypothetical market would pay prevailing civil rights counsel, rather than rely on a more predictable measure of the actual market rate. Cf. In re Cont l Ill. Sec. Litig., 962 F.2d 566, 568 (7th Cir. 1992) (Posner, J.) ( It is apparent what the district court s mistake was. He thought he knew the value of the class lawyers services better than the market did. What the market valued at $350 he thought worth only half as much.... [I]t is not the function of judges in fee litigation to determine the equivalent of the medieval just price. ); Gusman v. Unisys Corp., 986 F.2d 1146, (7th Cir. 1993) (Easterbrook, J.). Instead of embarking on a thought 11
19 experiment about hypothetical rates and bargaining processes, courts have had no difficulty determining appropriate hourly rates in civil rights cases by applying relatively objective criteria. In the federal courts in the District of Columbia area, fees are typically based on the Laffey Matrix, originally devised in Laffey v. Northwest Airlines, Inc., 572 F. Supp. 354 (D.D.C. 1983), rev d on other grounds, 746 F.2d 4 (D.C. Cir.1984), which sets forth a schedule of hourly rates based largely on years of experience. See Covington v. District of Columbia, 57 F.3d 1101, 1108 n.17, 1109 (D.C. Cir. 1995). 6 Courts within this Circuit have similarly set forth rough matrices of attorney s reasonable hourly rates based on their years of experience. See, e.g., Marisol A. ex rel. Forbes v. Giuliani, 111 F. Supp. 2d 381, 386 (S.D.N.Y. 2000) (setting forth a reasonable rate scale ); Insinga v. Cooperatieve Centrale Raiffeisen Boerenleenbank B.A., No. 03-civ-7775, --- F. Supp. 2d ----, 2007 WL , at *1 (S.D.N.Y. Mar. 12, 2007) (endorsing rates used in Marisol); Nike, Inc. v. Top Brand Co., No. 00-civ WL , *5 (S.D.N.Y. Feb. 27, 2006) (same). In addition, courts can consult professional publications, such as the National Law Journal, which publishes surveys of billing rates around the country each year. See, e.g., Barfield v. N.Y. City Health & Hosps. Corp., No. 05-civ-6319, 2006 WL , at *1 (S.D.N.Y. 6 The Laffey Matrix has since been promulgated annually by the office of the U.S. Attorney for the District of Columbia. See 12
20 Aug. 11, 2006) (citing to the rates in the National Law Journal); Phoenix Four, Inc. v. Strategic Resources Corp., No. 05-civ-4837, 2006 WL , at *2 (S.D.N.Y. Aug. 1, 2006) (same). For attorneys in private practice, courts may also consult the actual billing rates that an attorney uses to charge his or her paying clients. See, e.g., Meriwether v. Coughlin, 727 F. Supp. 823, 831 (S.D.N.Y. 1989) (holding that the usual hourly rates charged to paying clients by [counsel] are reasonable rates of compensation for their work in this [civil rights] action ). 7 The panel s analysis departs from these objective measurements and introduces a subjective psychological analysis of a lawyer s motives in taking a case Do you believe in the plaintiff s cause? This analysis will be impossible for lower courts to apply in a consistent and even-handed fashion, and it will put attorneys in potential conflict with their clients. 8 7 In deciding whether to award higher rates for lawyers outside the forum district, courts have similarly looked to objective criteria instead of trying to psychoanalyze the lawyers reasons for taking the case. See Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169, 180 (4th Cir. 1994) (non-forum rates may be awarded when the complexity and specialized nature of a case may mean that no attorney, with the required skills, is available locally ); Am. Booksellers Ass n v. Hudnut, 650 F. Supp. 324, (S.D. Ind. 1986) (applying New York City rates in Indianapolis case where complex First Amendment issues involved and services of equal quality not available in local forum). 8 Indeed, the same reputational benefits might not exist for lawyers who represent unpopular civil rights plaintiffs or causes. And, presumably, the lawyer s interest in vindicating his or her societal goals would be undermined by representing a client he or she disagrees with. The panel s reasoning would thus seem to make the fee award depend on the relative popularity of a client s cause or the sympathies of the attorney that happens to have accepted the representation. 13
21 Even if a construction of a hypothetical bargaining process were administratively workable, the Court s assumptions do not necessarily reflect the reality of how the legal market operates. Representation of a major financial institution can arguably bring a law firm more opportunities for valuable experience and media coverage than, for example, an individual Title VII case of workplace discrimination. But, notwithstanding the potential collateral benefits involved in handling major commercial cases, a law firm still typically charges high-profile litigants the same standard billing rates it uses for lower-profile clients. What separates civil rights plaintiffs from high-profile institutional plaintiffs in commercial cases is not the reputational benefits the cases bring to the firm, but the clients ability to pay. Finally, even if it were true that lawyers routinely subsidize their civil rights clients to vindicate their own societal goals, there is no reason why that subsidy should be effectively transferred to the wrong-doing defendant, who has, after all, been found to have violated the plaintiff s civil rights. The fee-shifting statutes are designed to force defendants to internalize the costs of their own misconduct. See Harold J. Krent, Explaining One-Way Fee Shifting, 79 Va. L. Rev. 2039, Lower courts applying this test would thus seem to be required to engage in content and viewpoint discrimination, potentially in violation of the First Amendment. Cf. Forsyth County v. Nationalist Movement, 505 U.S. 123, (1992) (explaining that [s]peech cannot be financially burdened, any more than it can be punished or banned based on the public s reaction to it). 14
22 2044 (1993) (explaining that fee shifting may force the executive branch and private firms to internalize more fully the costs of their misdeeds ). Under the panel opinion s reasoning, however, a hypothetical lawyer who forgoes other paying work in order to serve the public interest would be, in effect, subsidizing the defendant s wrongdoing. The Second Circuit recognized the fallacy of such an approach long ago in Getty Petroleum Corp. v. Bartco Petroleum Corp., 858 F.2d 103 (2d Cir. 1988) (fee shifting under the Lanham Act). This Court held that a prevailing plaintiff s attorney s fees should be calculated by the market rate, not by the special reduced billing arrangement that for which the plaintiff had bargained. The court explained that the defendant should not benefit by the agreement between plaintiff and counsel. Id. at 114. Awarding reasonable fees to plaintiff s counsel accords with the statute and results in no benefit to plaintiff, whereas an award based on the special arrangement would result in a windfall to the appellants as wrongdoers, who would pay less. Id. If it costs a certain amount of money (including the opportunity cost) for an attorney to correct a defendant s misconduct, then the congressional policy is that those costs should be borne by the wrongdoing defendant, not by the aggrieved plaintiff or the civic-minded lawyer. Because these issues were not addressed by the parties briefs, the panel did not have the benefit of full briefing on the implications of its new thrifty, 15
23 hypothetical client standard. Amici urge the Court to re-examine the opinion s illconsidered language on panel rehearing or en banc. III. The Panel s Reasoning Will Have a Devastating Impact on the Enforcement of Civil Rights Laws. When applied by lower courts, the panel s language could be devastating to the civil rights bar and, consequently, to the enforcement of civil rights laws. In enacting 42 U.S.C. 1988, Congress recognized that the government lacks the resources to fully enforce those laws. S. Rep. No , at 3; H.R. Rep. No , at 1. As a result, enforcement falls largely on the private bar and public interest law firms. Although the panel seems to have had white-shoe Manhattan law firms in mind, the thrifty, hypothetical client would bargain for the same reduced rate with any prospective counsel. In the perfectly efficient market that the Court hypothesizes, if the solo practitioner cannot match the lower price, the thrifty bargainer would simply turn to the white-shoe firm instead. Thus, one interpretation of the panel s language is that the reasonable market rates for civil rights cases should be categorically lower than the reasonable market rates for comparable complex federal litigation. Many of the amici are small or mid-sized civil rights firms. Even if some firms might have the luxury of donating pro bono hours to vindicate their societal goals, not all civil rights attorneys would be similarly insulated. In most cases the 16
24 relevant bar is the local-small-firm lawyer who brings the bulk of constitutional tort litigation. Steward J. Schwab & Theodore Eisenberg, Explaining Constitutional Tort Litigation: The Influence of the Attorney Fees Statute and the Government as Defendant, 1988 Cornell L. Rev. 719, [T]he institutional civil rights litigator, the major-law-firm pro bono case, and the government-funded legal services case are the exceptions rather than the rule. Id. at If the Court s language is interpreted as covering non-profit organizations as well, the results will be similarly devastating. The availability of attorney s fees can be an important tool in recruiting lawyers in private practice to take on civil rights cases and will often help defray the cost of an organization s own litigation efforts. See Amicus Statements, Appendix A. Nationally, the resources available for representing people unable to afford counsel are grossly inadequate to meet the need, 10 meaning that any diminution in the amount of fee awards available to public interest organizations will deprive those organizations of the ability to represent clients they would otherwise serve. See also Samuel R. Berger, Court Awarded Attorneys Fees: What Is Reasonable?, 126 U. Pa. L. Rev. 281, 9 Any reputational benefits that lawyers gain from taking on these cases are more than offset by the risk of not being paid at all. Under current law, the fee-shifting statutes provide no added compensation for this contingency risk. See City of Burlington, 505 U.S. at See Legal Services Corporation, Documenting the Justice Gap in America: The Current Unmet Legal Needs of Low-Income Americans 4, (2005), available at 17
25 312 (1977) (criticizing concept of a public interest discount and arguing that [r]educing the fees awarded on the ground that lawyers should be inspired by their sense of civic responsibility reduces the economic attractiveness of such cases, thereby restricting the supply of legal resources made available ). Congress determined that [i]f our civil rights laws are not to become mere hollow pronouncements which the average citizen cannot enforce, we must maintain the traditionally effective remedy of fee shifting in these cases. S. Rep. No , at 6. But if the panel s language is applied more broadly, there will be fewer lawyers able to litigate civil rights cases and fewer resources for the lawyers that continue to do so. This Court should grant panel rehearing or rehearing en banc to reconsider its opinion in light of these serious practical implications. CONCLUSION For the foregoing reasons, the plaintiffs petition for panel rehearing or rehearing en banc should be granted. Specifically, amici request that the Court amend its opinion to excise the following four passages: Slip. Op at 4:9-15; 17:13-17; 22:19-22; 25:16-26:5. For the Court s convenience, the complete text of these passages is set forth in amici s appendix. 18
26 Respectfully submitted, David Udell Laura Abel Deborah Goldberg BRENNAN CENTER FOR JUSTICE AT NYU SCHOOL OF LAW 161 Avenue of the Americas, 12th Fl. New York, NY (212) Leon Friedman 148 East 78th Street New York, N.Y (212) Joshua A. Block Harry Sandick* JENNER & BLOCK LLP 919 Third Avenue New York, NY (212) Counsel for Brennan Center for Justice at NYU School of Law Counsel for Amici Curiae May 22, 2007 *Counsel of Record 19
27 Appendix Table of Contents Page Excerpts From Panel Opinion...1 Interest of Amici Curiae...2 i
28 EXCERPTS FROM PANEL OPINION Amici request that the Court amend its opinion to excise the following four passages, which are below reproduced for the Court s convenience: Slip Op. 4:9-15 (stating that the district court should consider whether the attorney had an interest (independent of that of his client) in achieving the ends of the litigation or initiated the representation himself, whether the attorney was initially acting pro bono (such that a client might be aware that the attorney expected low or non-existent remuneration), and other returns (such as reputation, etc.) the attorney expected from the representation ); Slip Op. at 17:13-17 ( The district court should also consider that such an individual might be able to negotiate with his or her attorneys, using their desire to obtain the reputational benefits that might accrue from being associated with the case. ); Slip Op. at 22:19-22 ( Not incidentally, a reasonable, paying client might consider whether a lawyer is willing to offer his services in whole or in part pro bono, or to promote the lawyer s own reputational or societal goals. ); Slip Op. at 25:16-26:5 ( We are confident that a reasonable, paying client would have known that law firms undertaking representation such as that of plaintiffs often obtain considerable non-monetary returns in experience, reputation, or achievement of the attorney s own interests and agendas and would have insisted on paying his attorneys at a rate no higher than that charged by Albany attorneys.... ). 1-a
29 INTEREST OF AMICI CURIAE Statement of Interest for The American Civil Liberties Union Foundation, the New York Civil Liberties Union Foundation, and the American Civil Liberties Union Foundation of Connecticut The American Civil Liberties Union Foundation ( ACLU ) is a not-forprofit organization that, among other things, carries on an extensive program of civil liberties litigation throughout the country, including the Second Circuit. The NYCLU Foundation ( NYCLU ) and the American Civil Liberties Union Foundation of Connecticut are two of its statewide affiliates. The ACLU, the NYCLU, and the ACLU of Connecticut each regularly seek and receive statutory fees that help support the litigation programs of the organizations. Statement of Interest for David Bliven, Esq. The Law Offices of David Bliven provides representation in a wide range of civil legal matters including civil rights cases. I join this amicus brief not only to urge protection for civil rights fee awards which we rely on to finance our work, but also to voice concern that the Court s decision would make fee awards contingent on the outcome of district court inquiries into the personal viewpoints of the lawyers who handle the cases. I am frightened by the thought that my fees may be denied in a case where a court subjectively thinks I am pursuing a case due to my political beliefs or affiliations. I am also frightened about the prospect of the 2-a
30 court or opposing counsel being allowed to investigate me based on those beliefs or affiliations. Statement of Interest for the Brennan Center for Justice Named for late Associate Justice William J. Brennan, Jr., the Brennan Center is a not-for-profit, non-partisan public policy and law institute that focuses on issues of democracy and justice. Founded by the Justice s former law clerks, family, and friends, the Brennan Center is a living monument to the legacy of the Justice. Among its goals, the Brennan Center works to ensure that low-income people have access to effective, enduring, and unrestricted legal assistance in civil cases. The Brennan Center is also dedicated to protecting the rights of citizens to vote, including by litigating voting rights claims in the federal courts. If the panel s decision stands, the reduced compensation rates it requires would, as a practical matter, reduce the number of lawyers available to handle civil rights cases, and effectively prevent many individuals from vindicating their legal rights. The Brennan Center s own capacity to take on such cases would also be reduced. Because access to the courts and the vindication of citizens voting rights and other civil rights are goals essential to a democratic and just society, the Brennan Center joins the amicus brief, and supports the request for rehearing and rehearing en banc. 3-a
31 Statement of Interest for Brian L. Bromberg The Bromberg Law Office, P.C. is a private, for-profit office that litigates consumer-law cases primarily in the Eastern and Southern Districts of New York. Because all consumer cases provide for an award of fees to the prevailing party, almost all of the office s cases are fee-eligible. Most private attorneys in the New York area will not take these cases either because they are not familiar with the practice of consumer law or because they are not comfortable enough with this litigation to take the case without a big retainer. Statement of Interest for Children s Rights Children s Rights is a national non-profit organization advocating on behalf of abused and neglected children in the United States. Since 1995, Children Rights has used legal action almost entirely through claims brought under 42 U.S.C. 1983, seeking declarative and injunctive relief on behalf of minor children in state custody to stop violations of the constitutional and statutory rights of abused and neglected children, and to ensure that executive state officials responsible for operating child welfare systems provide the care, treatment, and protection to which children are legally entitled. Children s Rights receives no government funding, receives some private donations, but depends most heavily on reasonable fees awarded under Section 1988 to fund its work. 4-a
32 Statement of Interest for Chittur & Associates Chittur & Associates, P.C., is a Manhattan law firm with principal offices at 286 Madison Avenue, Suite 1100, New York, New York. A significant portion of the firm s practice is civil rights and consumer rights actions. The fee-shifting provisions of these statutes are extremely important even when the firm evaluates whether to accept/prosecute a potential civil rights or consumer rights litigation. Chittur & Associates is committed to the advancement of civil rights and consumer rights, but the economic realities of litigation can hardly be ignored. Most potential plaintiffs cannot afford to pay on an ongoing basis, and the only realistic expectation is to be paid by the defendants when we prevail. Judicial pronouncements on the criteria for fee awards are thus, extremely significant from the firm s perspective. Every litigation, by definition, adds to Chittur & Associates experience and will affect our reputation. However, we still need to pay for our grocery and other bills. Hence, if fee awards were to be made at rates lower than our normal billing rates, our ability to handle civil rights or consumer rights cases would be affected very adversely. Chittur & Associates believes that this Court s pronouncements at issue may unintentionally affect fee awards, and thereby weaken the enforcement of civil rights and consumer rights statutes. 5-a
33 Statement of Interest for Community Service Society of New York Through research, advocacy, volunteerism, training, community organizing, direct service, and litigation, the Community Service Society ( CSS ) works to tackle the causes of poverty and has been doing so for 160 years. The Department of Legal Counsel at CSS was created in 1987 to conduct impact litigation in public interest law. Some areas of its recent advocacy work include: voting rights, including felon disfranchisement; litigation under the National Voter Registration Act; challenges to the barriers to the full re-entry of persons leaving prison; protecting the rights of public housing tenants; and health issues, including continued access by the poor and uninsured to the City s public hospitals. Since 1989 CSS has used voting rights litigation to benefit our most marginalized communities by ensuring the full and fair representation of New York s poorest neighborhoods, especially African American and Latino voters. To this end, CSS has a specific interest in the outcome of this litigation. An overly broad interpretation of the ruling in this case could directly impact CSS s ability to continue its voting rights litigation in the future. Statement of Interest for Connecticut Legal Services, Inc. Connecticut Legal Services, Inc. ( CLS ) is a private nonprofit law firm which has been providing free legal services in civil matters to low-income residents since As the largest legal aid law firm in Connecticut, CLS s 6-a
34 mission is to represent, advise, and educate low-income individuals and families and thereby help them secure the protections, privileges, benefits, rights, and opportunities available under the law. The low-income population eligible for the services of CLS consists of approximately 180,000 persons, which CLS represents from 6 local and 5 satellite offices throughout the state. CLS provides legal representation in the following specialized areas: Family, Housing, Elderly, Disability, Government Benefits, Immigration, and Children at Risk. CLS regularly accepts fee-eligible cases in matters where the private bar declines to serve low income clients. Attorney s fees in these cases are critical in assisting CLS to continue serving indigent clients at no cost. Statement of Interest for Emery Celli Brinckerhoff & Abady LLP Emery Celli Brinckerhoff & Abady LLP ( ECBA ) is one of the largest private law firms in New York City with a significant civil rights docket. At least half of the firm s cases seek to vindicate constitutional rights by way of 42 U.S.C. 1983, and ECBA has served as lead plaintiffs' counsel in some of the most important civil rights cases in New York City and in the country. With twelve lawyers and a full support staff, ECBA offers its clients experienced civil rights representation, and a strong reputation with the judiciary, among government attorneys, and in the bar generally. ECBA s extensive and varied civil rights docket includes both individual actions where the damages are relatively 7-a
35 modest, and large, complex injunctive cases where the only relief sought is institutional reform. ECBA relies on a steady recovery of its fees pursuant to awards or settlements under 42 U.S.C to support the firm economically. Historically, ECBA has been able to predict with a high degree of accuracy how much income it will recover by representing individuals and organizations in civil rights actions. Moreover, because of its experience in the field and reputation with government attorneys, ECBA is able to settle nearly all of its fee disputes without formal motion practice under 42 U.S.C The Arbor Hill decision if allowed to stand will unquestionably lead to a greater number of contested attorneys fee motions in the federal courts; indeed, it will create an incentive for defense counsel to litigate, rather than settle, attorneys' fee disputes, increasing the burden on courts and reducing the system's efficiency overall. Statement of Interest for Aaron David Frishberg Aaron David Frishberg is an attorney admitted to the U.S. District Courts for the Southern, Eastern, and Northern Districts of New York. He practices as a solo practitioner, litigating disability discrimination and other civil rights cases on behalf of clients who are most often unable to pay for his services. Mr. Frishberg s livelihood and his ability to accept these cases depends significantly on his ability to receive fair compensation through fee-shifting statutes when his client is a prevailing party. If fee awards were reduced, Mr. Frishberg would be forced to shy 8-a
36 away from representing clients with riskier cases that have a lesser likelihood of success, even when those cases appear to be meritorious. Statement of Interest for Greater Hartford Legal Aid Greater Hartford Legal Aid, Inc., serves the majority of Hartford County in addition to the City of Hartford. It is a non-profit organization that provides legal services, including representation in federal court litigation, in civil matters to needy individuals in its service area in the State of Connecticut. The legal assistance rendered by Greater Hartford Legal Aid to these destitute clients is greatly facilitated, in both settlement negotiations through and court-rendered verdicts alike, by the ability to petition the court for attorney's fees allowed by federal statute. Statement of Interest for The Impact Fund The Impact Fund is a nonprofit foundation that provides funding, training, and co-counsel to public interest litigators across the country. It is also a California State Bar Legal Service Trust Fund Support Center, providing services to legal services projects across the state. In its funding role, the Impact Fund reviews requests for grants to cover expenses of complex litigation, and is frequently called upon to assist firms in finding financing, co-counsel, or other resources necessary to bring significant litigation. It offers training programs, 9-a
37 advice and counseling, and amicus representation to nonprofit organizations regarding class action and related issues. As a grantor, the Impact Fund has funded a number of civil rights cases in Second Circuit, including Robinson v. Metro-North Commuter R.R. Co., 267 F.3d 147 (2d Cir. 2001). The Impact Fund's grant program provides grants to cover out of pocket expenses, such as deposition and expert fees, in class action litigation. It normally does not fund attorney or staff salaries. Successful grantees who recover their attorney s fees and costs are required to repay the grant, which helps fund future grants. The Impact fund also litigates class cases, including disability discrimination access and employment cases. In its own litigation, it relies upon attorneys fee statutes for recovery of its fees. It also advises and has represented other non-profit firms about fee recoveries, and has served as amicus in a number of appellate fee proceedings. Statement of Interest for David J. Lansner & Carolyn A. Kubitschek The law firm of Lansner & Kubitschek handles primarily lawsuits under 42 U.S.C Approximately 75% of their time is devoted to those cases. David J. Lansner and Carolyn A. Kubitschek formed the firm of Lansner & Kubitschek in January, 1991, to create a firm of private attorneys general who would obtain legal redress for individuals whose constitutional rights had been violated by government employees. Over the past 16 years, the firm has grown to 20 people, 10-a
38 including eight attorneys, and the percentage of civil rights work that they do has increased. One of their cases, Nicholson v. Scoppetta, 203 F. Supp. 2d 153 (E.D.N.Y. 2002), on appeal 344 F.3d 154 (2d Cir. 2003), on certified questions 3 N.Y.3d 357 (2004), a class action lawsuit, stopped the City of New York from removing children from mothers who were victims of domestic violence, solely because the mothers had been battered, and set important procedural and substantive standards for government intervention in the lives of all parents and children. Other important cases include Tenenbaum v. Williams, 193 F.3d 581 (2d Cir. 1999) (on due process rights of parents and children in child welfare investigations); Miller v. Gammie, 335 F.3d 889 (9th Cir. 2003) (establishing the right of foster children to be protected by their government caretakers); Valmonte v. Bane, 18 F.3d 992 (2d Cir. 1994) (on due process rights of individuals who are listed on the register of suspected child abusers). They have also authored and coauthored numerous amicus briefs in the United States Supreme Court and United States Courts of Appeals, completely pro bono. Lansner & Kubitschek depends on 1988 fees to survive, to pay rent and operating expenses, and to pay the salaries of their 18 employees. This is not an easy way to make a living. The landlord expects his rent check every month, the staff expect paychecks every two weeks, the suppliers expect to be paid upon delivery, but the money arrives only when the case is over, and only if the client 11-a
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