GLORIA A. WATKINS, Complainant
MILWAUKEE COUNTY, Respondent
This case is before the Commission for a determination of reasonable attorney' s fees. The case began on May 25, 1971, when the Complainant, a black caseworker for the Milwaukee County Department of Public Welfare, filed a charge of discrimination alleging unlawful race discrimination by Milwaukee County with respect to job transfers, and by her union with respect to failure to process her grievance through the final step. Complainant's claim of discrimination was based upon her denial of an opportunity to transfer into a "service zone" job.
On April 26, 1972, the Equal Rights Division issued an Initial Determination finding probable cause to believe there was unlawful discrimination. Following an unsuccessful attempt at conciliation, a hearing was held on September 14, 1972. On October 30, 1972, the examiner issued a recommended decision finding that Milwaukee County had unlawfully discriminated against Complainant and dismissing the complaint against the union. On February 16, 1973, the Commission, then known as the DILHR Commission, revised the examiner' s recommended decision, dismissing the complaint against Milwaukee County on the ground that Complainant's November 1, 1971 transfer to a service zone position had eliminated the alleged discrimination.
On December 14, 1973, the Circuit Court for Dane County reversed the DILHR Commission's decision and remanded the case for determination of whether unlawful discrimination had occurred. The decision of the circuit court was affirmed on appeal to the Wisconsin Supreme Court (1975).
Following a remand to DILHR, various prehearing matters were decided by the examiner during the summer and fall of 1976. On October 19, 1976, Complainant's attorney filed an amended complaint. By letter dated July 1, 1977, a second amended complaint was filed. On July 19, 1977, the parties filed a stipulation of facts in lieu of a further hearing.
On April 17, 1980 an examiner of the department issued a decision concluding that Complainant was discriminated against by the Respondent Milwaukee County. However, the examiner failed to address Complainant' s request for reasonable attorney's fees. The question of the availability of attorney's fees was then brought before this Commission, the Labor and Industry Review Commission (LIRC). Both LIRC and a Milwaukee County circuit court held that attorney's fees could not be awarded under the Act. However, the Wisconsin Supreme Court held to the contrary and remanded the case to DILHR for further proceedings consistent with its opinion. Watkins v. LIRC, 117 Wis. 2d 753 (March 27, 1984).
Complainant engaged the services of her attorneys herein in 1974. In accordance with their fee arrangement for payment of attorney's fees, Complainant was billed on a monthly basis for the out-of-pocket expenses and services of the attorneys of the firm at their regular hourly billing rates. An interest charge of 12% per annum, compounded monthly, was added to monthly balances due.
Complainant's counsel has made the following attorney fee request: (1) $8,817.96 which constitutes the actual total of all payments made by Complainant to her attorneys for their services billed at their regular hourly rates and their out-of-pocket expenses (lodestar fee); (2) $8,110.64 as accrued interest on Complainant's actual payments of attorney' s fees from the time each was made through January 31, 1985, at 12% per annum, compounded monthly (lodestar fee present value); (3) $8,464.30 which constitutes a 50% enhancement of the lodestar fee present value amount to compensate Complainant for her risk that she would recover nothing and suffer a net loss of the entire lodestar fee present value; and (4) $8,464.30 which constitutes a separate enhancement factor of 50% to compensate Complainant' s counsel for their quality of representation and the extraordinary results they have attained for the Complainant while working at only their basic billing rate.
The Respondent has argued that the Labor and Industry Review Commission is without power to award attorney' s fees. Respondent argues that a reading of Watkins fails to disclose any language empowering LIRC to award attorney's fees; that Watkins held that DILHR has the authority to award reasonable attorney' s fees to a prevailing Complainant; that had the Court wanted LIRC to also have the power to award attorney's fees it would have done so.
The Respondent has not challenged the actual fee request made by Complainant.
Based upon a review of the affidavits and written supporting position statements submitted herein, the Labor and Industry Review Commission hereby issues the following:
1. That Respondent pay Complainant $8,817.96 which constitutes the actual total of all payments she has made to her attorneys for their out-of-pocket expenses and services billed at their regular hourly rates (lodestar fee).
2. That Respondent pay Complainant $4, 022.92 which constitutes accrued interest on her payments of attorney' s fees from the time each was made through June 1975, at 7% per annum, compounded quarterly.
3. That Respondent pay to Complainant' s attorneys the sun of $4,408.98 which constitutes a 50% enhancement of the lodestar fee to compensate Complainant' s counsel for their high quality of representation and the extraordinary results that they have attained in this case while working at only their basic billing rate.
4. That Respondent shall within 30 days of the expiration of time within which an appeal may be taken herein, submit a compliance report to Kendra DePrey, Labor and Industry Review Commission, P. O. Box 8126, Madison, Wisconsin 53708.
Dated and mailed July 3, 1985
/s/ David A. Pearson, Chairman
/s/ Hugh C. Henderson, Commissioner
/s/ Carl W. Thompson, Commissioner
A. THE LODESTAR
As stated by the U.S. Supreme Court in Hensley v. Eckerhart, 461 U.S.__, 31 FEP Cases 1169 (1983), "the most useful starting point of determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services."
(1) Hours expended
The Commission calculates the total number of hours expended by counsel for Complainant to be approximately 170, and finds that this is a reasonable number of hours to have expended in a matter that has extended over 10 years. As noted by the fee applicant, "an inspection of the time devoted by Complainant' s counsel to various tasks associated with the case discloses that the hours worked by Complainant's counsel are few indeed compared to that which one would expect in a case which has gone to the Wisconsin Supreme Court on two separate occasions and been litigated vigorously at many other levels as well." Additional1y, the fact that the Complainant herself has paid her legal bills as she went along has given her a strong incentive to review her monthly bills and question any expenditures of time and the billing history reflects no adjustment because of a question over the appropriateness of any expenditures of time. The 170 hours of work was compiled by attorneys Percy Julian, Jr., Jeff Scott Olson, Daphne Webb and Randall Aronson, and a law clerk.
(2) Hourly rate
In Blum v. Stenson, __ U.S.__ , 34 FEP Cases 417 (1984), where the Court examined the Civil Rights Attorney' s Fees Awards Act of 1976, 42 U. S.C. 5 1988 (which is patterned in part upon the attorney's fees provision contained in Title VII of the Civil Rights Act of 1964. See note 7 in Hensley v. Eckerhart, supra, at pp. 1172-1173), the Court stated that "reasonable fees" under § 1988 are to be calculated according to the prevailing market rates in the relevant community. The Court defined a prevailing market rate which would control the computation of a basic lodestar fee, and a fee applicant' s burden in establishing it, as follows: "To inform and assist the court in the exercise of its discretion, the burden is on the fee applicant to produce satisfactory evidence -- in addition to the attorney' s own affidavits -- that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonable comparable skill, experience and reputation. A rate determined in this way is normally deemed to be reasonable, and is referred to for convenience -- as the prevailing market rate." Based upon the fee applicant's billing record, Attorney Julian' s fees ranged from $30 per hour when Complainant first consulted him in 1973 to $75 per hour in 1978 when he was last involved in the case. Attorney Olson' s fees ranged from $40 per hour when he first became involved in the case to a current fee of $90 per hour. Work performed by Attorney Webb in 1976 was done at the rate of $40 per hour. Work performed by Attorney Aronson in December 1984 was done at the rate of $60 per hour. The work performed by a law clerk was done at $20 per hour.
The fee applicant's affidavit provides information about the Julian and Olson law firm, how attorney rates are established, and the experience, reputation and ability of attorneys Julian and Olson. The fee applicant has also included affidavits from other attorneys which discuss their hourly rates, and the experience, reputation and ability of attorneys Julian and Olson. The Commission is satisfied that the fee applicant's requested hourly rates are reasonable.
B. LODESTAR FEE PRESENT VALUE
Citing Anderson v. LIRC, 111 Wis. 2d 245, (1983) (Wisconsin Supreme Court established that an award of interest on a backpay judgment under the Act was necessary to effectuate the Act's purpose that prevailing complainants be made whole), the fee applicant argues that to award a lodestar fee only without interest is to ignore the fact that had the Complainant had the use of the money paid in legal fees throughout the. pendency of this case, she could have earned interest on it, and also to ignore the fact that the Complainant was required to compensate her attorneys promptly in part to avoid paying interest to them. The fee applicant has calculated the present value of her money that has been paid in legal fees at 12% per annum, compounded monthly, from the time each payment was made through January 31, 1985, and determined that $8,110.64 represents what she would have earned in interest.
The Commission agrees that the Complainant should be awarded interest on the money she has paid in legal fees throughout the pendency of this case. Such an award is necessary to make the Complainant whole. However, the Commission believes that the interest awarded should be at 7% per annum, compounded quarterly, not 12% per annum, compounded monthly. Anderson v. LIRC.
C. ENHANCEMENT OF THE LODESTAR FEE PRESENT VALUE BY 50% TO COMPENSATE COMPLAINANT FOR THE RISK THAT SHE WOULD RECOVER NOTHING AND SUFFER A NET LOSS OF THE ENTIRE LODESTAR FEE PRESENT VALUE
After asserting that there are two controlling factors for approving an upward adjustment of lodestar fee awards to compensate prevailing complainant's attorneys for risks that they would never be paid (to simulate the results that would be obtained if the lawyer were dealing with a paying client; that lawyers who are to be compensated only in the event of victory are entitled to he paid more when successful than those who are assured of compensation regardless of the result (1) ) the fee applicant argues as follows:
"While almost all of the cases which have dealt with the contingency factor increase, or enhancement for risk, have discussed the risks attorneys have taken that they would recover no fees, the same rationale should apply to this case, where the attorneys took no risk of nonpayment but the Complainant herself took all the risk that she would lose her entire investment in the case. For Wisconsin to hold that attorneys who take risks are entitled to be compensated for them, but paying clients who take heroic risks in bringing landmark civil rights cases should not be compensated would discourage complainants, who can pay their attorneys to litigate such cases, from doing so. This in turn would have a deleterious effect on the level of enforcement of the Fair Employment Act."
The Commission is not aware of any case in which a court has allowed the complainant herself an upward adjustment of the fee award for the risk of not prevailing in a civil rights action. More importantly, however, the Commission does not believe that the rationale for enhancing a fee award for the risks undertaken by attorneys in a contingency fee arrangement would equally apply to the complainants themselves. An upward adjustment of the basic fee award by a contingency factor is to insure that the fee award is consistent with prevailing market rates and adequate to attract competent counsel to represent other civil rights clients. Neither of these objectives would be accomplished by awarding the Complainant for the risk of not prevailing. Further, a denial of compensation for the risk of not prevailing to complainants who can pay their attorneys' fees should not discourage such complainants from litigating meritorious cases.(2) Indeed, Complainant Watkins' perseverance in her claim in this case, knowing that she might "lose her entire investment in the case," stands as a prime example.
D. ENHANCEMENT OF THE LODESTAR FEE PRESENT VALUE BY 50% TO COMPENSATE COMPLAINANT'S ATTORNEYS FOR THE QUALITY OF THEIR REPRESENTATION AND THE EXTRAORDINARY RESULTS THEY HAVE OBTAINED.
The Commission believes that counsel for Complainant should be allowed an upward adjustment of. the "basic lodestar fee," but not the "lodestar fee present value," for the quality of their representation and the excellent results they obtained. Unlike the Complainant who has been awarded the lodestar fee present value because she could have invested and earned interest on money that she has paid in attorney's fees throughout the pendency of this case, Complainant' s counsel obtained and had the actual use of the money paid for their services as such services were rendered. Since Complainant's counsel suffered no delay in the payment of their fees there is no need to start with the "lodestar fee present value" in making an award for their quality of representation and results obtained.
The Commission believes that an enhancement of the basic lodestar fee by a factor of 50%, or $4, 408. 98, is justified to compensate counsel for their quality of representation and the results obtained. Counsel pursued this case with great skill and persuasiveness. For example, despite unfavorable case law and the absence of any express provision for awarding attorney' s fees under the Act, counsel successfully convinced the Wisconsin Supreme Court that attorney's fees could (and should) be awarded to a prevailing complainant. Even more important, however, are the exceptional results obtained by counsel. The results obtained by Complainant's counsel are exceptional for the precedents set by the case and the impact the case can be expected to have upon fair employment litigation in general. New law developed by this case significantly advances the Act's goals of making a prevailing complainant whole and discouraging discriminatory practices in employment.
Lastly, the Commission finds no merit in Respondent' s argument that the Watkins decision did not empower LIRC to award attorney' s fees. Respondent' s argument is one of form over substance. As the body with authority to enter the final decision in these matters LIRC' s authority encompasses the power to enter remedial orders, including attorney' s fees awards. In any case, since the original DILHR examiners that were involved with this case are no longer employed by DILHR, there is no reason for DILHR to make the determination of reasonable attorney's fees in the first instance.
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(1)( Back ) The Concurring Opinion in Blum has stated that it is necessary to compensate attorneys working on a contingency basis to insure that their fees are consistent with prevailing market rates and that the fees awarded are adequate to attract competent counsel to represent other clients with civil rights grievances.
(2)( Back ) The Wisconsin Supreme Court has held that the primary purpose of the Act is to make the prevailing complainant whole and that prejudgment interest on backpay awards, as well as reasonable attorney's fees, effectuate this goal. See Anderson and Watkins, supra.