Title VII Plaintiff's Attorneys' Fees Awards Can Be Reduced Based on Degree of Success; No Strict Proportionality Rule Applies: Fifth Circuit

Practical Law Legal Update w-002-8485 (Approx. 6 pages)

Title VII Plaintiff's Attorneys' Fees Awards Can Be Reduced Based on Degree of Success; No Strict Proportionality Rule Applies: Fifth Circuit

by Practical Law Labor & Employment

Background

Deadra Combs worked as a municipal court clerk for the City of Huntington (City) from September 2008 until she was terminated in February 2011. Combs alleged that during the course of her employment the City Manager subjected her to frequent sexual harassment.

In December 2010, Combs filed a Charge of Discrimination with the EEOC. Then, following her termination, Combs filed a Title VII sexual harassment suit against the City, arguing that:

She was the victim of quid pro quo harassment.
The City failed to alleviate a hostile work environment.
Her discharge was in retaliation for filing an EEOC charge.

The case proceeded to a jury trial, and Combs sought a total of $323,027.35 in damages. The jury found for Combs's only on her hostile work environment claim, awarding only $5,000 in damages.

Combs then moved for attorneys' fees, seeking compensation for the counsel who represented her during the litigation (Mark Aronowitz and Julia Hatcher) (counsel).

In calculating the lodestar, the district court:

Determined that some of the requested hours were not properly included and therefore reduced the total number of hours billed.
Accepted the hourly rates proposed by counsel ($305 for Aronowitz and $375 for Hatcher).
Accepted the 20% voluntary reduction in the number of hours proposed by plaintiffs' counsel due to Combs's "limited recovery."
Calculated the lodestar to be a total of $94,612.80, made up of:
- $38,722.80 for Aronowitz (126.96 hours x $305/hour); and
- $55,890.00 for Hatcher (149.04 hours x $375/hour).

The district court then:

Considered whether the lodestar should be adjusted due to any of the Johnson factors (Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717–19 (5th Cir. 1974)).
Agreed with the City's contention (relying on Migis v. Pearle Vision, Inc., 135 F.3d 1041 (5th Cir. 1998)) that Combs's limited success (prevailing on only one claim and receiving only $5,000 in damages) required a reduction of the lodestar.
Concluded that it was "constrained by the holding in Migis, to reduce the total to something less than 6.5 times the actual damages awarded."
Reduced the fee award to $25,000 (five times the damages awarded to Combs).

Combs appealed to the Fifth Circuit, contending that:

The Supreme Court has overruled this court's method of calculating attorneys' fees.
A low damages award is an inadequate basis to adjust the lodestar.
The district court abused its discretion in proportionally reducing the lodestar under Migis.

Outcome

The Fifth Circuit vacated the district court's award of attorneys' fees and remanded, holding that there is no requirement of strict proportionality between attorneys' fees and damages.

The Fifth Circuit noted that:

Unlike most statutes, Title VII allows a district court to award reasonable attorneys' fees to the prevailing party (42 U.S.C. § 2000e-5(k)).
In the Fifth Circuit, courts apply a two-step method for determining reasonable attorneys' fees:
- first the court must calculate the lodestar, "which is equal to the number of hours reasonably expended multiplied by the prevailing hourly rate in the community for similar work." To calculate the lodestar, "[t]he court should exclude all time that is excessive, duplicative, or inadequately documented" (Jimenez v. Wood Cty., 621 F.3d 372, at 379–80 (5th Cir. 2010)); and
- second, although the lodestar is presumed reasonable, the court may enhance or decrease it based on the twelve Johnson factors (Jimenez, 621 F.3d 372, at 380). "The court must provide a reasonably specific explanation for all aspects of a fee determination" (Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, at 558 (2010)).
In Perdue, the Supreme Court:
- criticized the Johnson method, noting that this method "gave very little actual guidance to district courts," "placed unlimited discretion in trial judges," and "produced disparate results;"
- in contrast praised the lodestar method of calculating attorneys' fees, because it "cabins the discretion of trial judges, permits meaningful judicial review, and produces reasonably predictable results" (Perdue, 559 U.S. 542, at 551–552); and
- explained that "a 'reasonable' fee is a fee that is sufficient to induce a capable attorney to undertake the representation of a meritorious civil rights case" and observed that "the lodestar method yields a fee that is presumptively sufficient to achieve this objective" (Perdue, 559 U.S. 542, at 552).

The Fifth Circuit found that:

The district court:
- should begin by calculating the lodestar;
- may then determine whether any other considerations should enhance or decrease the lodestar. There is a "strong presumption" that the lodestar represents a sufficient fee, and therefore enhancements must be rare. "[S]uperior results are relevant only to the extent it can be shown that they are the result of superior attorney performance." (Perdue, 559 U.S. 542, at 553–554); and
- in considering whether to decrease the lodestar, must consider the plaintiff's degree of success. "[W]here the plaintiff achieved only limited success, the district court should award only that amount of fees that is reasonable in relation to the results obtained." (Hensley v. Eckerhart, 461 U.S. 424, at 436–37, 440 (1983).)
"Awarding attorneys' fees based on the damages, or degree of success obtained, is completely in line with the holdings of the Supreme Court and this Circuit" (Flowers v. S. Reg'l Physician Servs., Inc., 286 F.3d 798, 802 (5th Cir. 2002)). Therefore, in a private civil rights suit, a district court must consider any disparity between damages sought and damages awarded (Migis, 135 F.3d 1041, at 1048).
The district court erred by adjusting the lodestar amount based solely on strict proportionality considerations.
In determining a reasonable attorneys' fee award based on the plaintiff's degree of success, "[t]here is no precise rule or formula"; instead, the district court "necessarily has discretion in making this equitable judgment" (Hensley, 461 U.S. at 436–37).
A proportionality rule "would make it difficult, if not impossible, for individuals with meritorious civil rights claims but relatively small potential damages to obtain redress from the courts" and therefore undermine Congress's purpose in enacting civil rights statutes such as Section 1988 (City of Riverside v. Rivera, 477 U.S. 561, at 576–78 (1986)).
Migis:
- recognizes that "the most critical factor" to determine the reasonableness of a fee award in a civil rights suit is "the degree of success obtained;" but
- does not impose a strict proportionality requirement.
(135 F.3d 1041, at 1047.)
Although the district court properly recognized that proportionality between attorneys' fees and damages may be considered in determining a reasonable fee (Migis, 135 F.3d 1041, at 1048; Hernandez v. Hill Country Tel. Co-Op., Inc., 849 F.2d 139, at 144 (5th Cir. 1988)), Fifth Circuit precedent rejects, and Migis does not impose, a per se proportionality requirement. Therefore the fee award must be vacated.

Practical Implications

This decision provides guidance on what factors are relevant in determining a reasonable award of attorneys' fees, and clarifies that it was erroneous to do so based solely on strict proportionality considerations.

Title VII Plaintiff's Attorneys' Fees Awards Can Be Reduced Based on Degree of Success; No Strict Proportionality Rule Applies: Fifth Circuit | Practical Law