Salazar Ex Rel. Salazar v. District of Columbia

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 11, 2015 Decided December 18, 2015

No. 14-7035

OSCAR SALAZAR, BY HIS PARENTS AND NEXT FRIENDS,

ADELA AND OSCAR SALAZAR, ET AL.,

APPELLEES

v.

DISTRICT OF COLUMBIA, ET AL.,

APPELLANTS

CHARTERED HEALTH PLAN AND D.C. CHARTERED HEALTH

PLAN, INC.,

APPELLEES

Consolidated with 14-7050

Appeals from the United States District Court

for the District of Columbia

(No. 1:93-cv-00452)

Richard S. Love, Senior Assistant Attorney General, Office

of the Attorney General for the District of Columbia, argued the

cause for appellants. With him on the briefs were Karl A.

Racine, Attorney General, Todd S. Kim, Solicitor General, and

Loren L. AliKhan, Deputy Solicitor General.

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Kathleen L. Millian argued the cause for appellees. With

her on the brief were Bruce J. Terris, Zenia Sanchez Fuentes,

Jane Perkins and Lynn E. Cunningham.

Before: SRINIVASAN and PILLARD, Circuit Judges, and

SENTELLE, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

SENTELLE.

SENTELLE, Senior Circuit Judge: Appellants the District of

Columbia, the District’s Mayor, and the Director of the

District’s Department of Human Services (collectively, the

“District”) appeal two separate awards of attorneys’ fees and

expenses for work performed from 2010 to 2012 on this 42

U.S.C. § 1983 Medicaid class action. In this consolidated

appeal, the District raises three grounds for its position that the

district court’s decisions amounted to an abuse of discretion.

First, the District argues that the district court abused its

discretion by making targeted reductions in Plaintiff-Appellees’

(“Plaintiffs”) fee requests, as opposed to the District’s requested

across-the-board reductions. Second, the District contends that

the district court abused its discretion in awarding hourly rates

to Plaintiffs based on the Legal Services Index (“LSI”) update

to the Laffey Matrix. See Laffey v. Nw. Airlines, Inc. (Laffey I),

572 F. Supp. 354, 371 (D.D.C. 1983), aff’d in part, rev’d in part

on other grounds, Laffey v. Nw. Airlines, Inc. (Laffey II), 746

F.2d 4 (D.C. Cir. 1984), overruled in part on other grounds en

banc by Save Our Cumberland Mountains, Inc. v. Hodel

(SOCM), 857 F.2d 1516 (D.C. Cir. 1988). Finally, the District

states that the district court improperly ordered the District to

pay for the time Plaintiffs’ counsel spent on a third-party appeal.

We disagree. The district court thoroughly analyzed both

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parties’ positions in awarding some, but not all, of the requested

fees. For the reasons stated below, we affirm.

BACKGROUND

In 1993, Plaintiffs filed a class action against the District

challenging the District’s provision of medical assistance,

including certain services for all enrolled children, under the

District’s Medicaid program. In 1996, the district court

concluded that the District had violated 42 U.S.C. § 1983 by

depriving Plaintiffs of their statutory and constitutional rights.

Salazar v. District of Columbia, 954 F. Supp. 278, 334 (D.D.C.

1996). In 1999, while the judgment was pending on appeal, the

parties entered into a comprehensive settlement agreement (the

“Settlement Order”).

Under the terms of the Settlement Order, Plaintiffs’

counsel is entitled to compensation for monitoring the District’s

compliance with the provisions of the Settlement Order, for

representing individual class members to enforce their rights

under federal Medicaid law and the Settlement Order, and for

work not designated as monitoring work, such as enforcement,

attorneys’ fees, and appeals work. Paragraphs 64 and 65 of the

settlement establish certain rates, which are adjusted annually

for inflation, for Plaintiffs’ counsel to monitor and enforce the

District’s compliance with the Settlement Order. For instance,

if a purported member of the class seeks Plaintiffs’ counsel’s

assistance, the reasonable time and expenses of Plaintiffs’

counsel in determining whether the individual is a member of

the class and in providing legal assistance “shall be deemed

compensable monitoring of [the Settlement] Order under 42

U.S.C. § 1988 [at a rate of]” $75/hr. In addition, for rates set

under Paragraphs 64 and 65, the Settlement Order specifies that

those “hourly rates shall be adjusted annually, beginning on

January 1, 1999, based on the U.S. Department of Commerce

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Consumer Price Index for Legal Services.” Under Paragraph 66,

the parties left open the rates for work not specified as

monitoring work under Paragraphs 64 and 65 of the Settlement

Order.

The Settlement Order provides no further guidance for

determining an appropriate fee award where the rate is

unspecified. However, this Court has developed a three-part

analysis to assess appropriate fee awards under fee-shifting

statutes in cases involving complex federal litigation. See Eley

v. District of Columbia, 793 F.3d 97, 100 (D.C. Cir. 2015)

(citing SOCM, 857 F.2d at 1517). A court must: (1) determine

the “number of hours reasonably expended in litigation”; (2) set

the “reasonable hourly rate”; and (3) use multipliers as

“warranted.” Id. In addition, the “fee applicant bears the burden

of establishing entitlement to an award, documenting the

appropriate hours, and justifying the reasonableness of the

rates,” with the opposing party remaining “free to rebut [the] fee

claim.” Covington v. District of Columbia, 57 F.3d 1101, 1107-

08 (D.C. Cir. 1995), cert. denied, 516 U.S. 1115 (1996).

Here, the District challenges the district court’s analysis

of the hours Plaintiffs’ counsel spent litigating the multiple

issues arising from the monitoring and enforcement of the

Settlement Order. Broadly, the District argues that the district

court abused its discretion by failing to rein in Plaintiffs’

counsel’s fees further than it did.

The District also challenges the “reasonable hourly rate”

determination. That determination requires showing at least

three elements: (1) “the attorneys’ billing practices”; (2) “the

attorneys’ skills, experience, and reputation”; and (3) “the

prevailing market rates in the relevant community.” Covington,

57 F.3d at 1107. As to these three sub-elements, the District

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focuses its challenge on the district court’s determination of the

“prevailing market rates in the relevant community.”

A court calculating a prevailing market rate allows fee

applicants to submit attorneys’ fee matrices as one type of

evidence. Covington, 57 F.3d at 1109. As we have previously

noted in Eley, 793 F.3d at 100, “[t]he most commonly used fee

matrix is the ‘Laffey Matrix’—the schedule of prevailing rates

compiled in [Laffey I].”

The Laffey Matrix sets out a general guideline for

awarding attorneys’ fees based on experience. See, e.g., Eley,

793 F.3d at 101 (discussing Laffey Matrix rates). For instance,

the Laffey Matrix sets the rate for “experienced federal court

litigators in their 11th through 19th years after law school

graduation” at $150/hr. Id. (citing Laffey II, 746 F.2d at 8 n.14).

But these 30-year-old rates must also be adjusted for inflation.

See Eley, 793 F.3d at 101 (citing SOCM, 857 F.2d at 1525). For

this reason, updated Laffey Matrices developed, including the

two at issue here—(i) the Laffey Matrix as updated by the Legal

Services Index (“LSI”) of the Nationwide Consumer Price Index

(“CPI”) (the “LSI Laffey Matrix”), and (ii) the All-Items CPI for

the Washington, D.C. area (also known as the “USAO Laffey

Matrix”). See also Eley, 793 F.3d at 101-02 (elaborating on the

differences between the LSI and the USAO Laffey Matrices).

In 2013, Plaintiffs filed two fee applications for work

done from 2010 through 2012. The district court granted in part

and denied in part those fee applications, which decisions the

District appeals now. In both decisions, and in spite of the

District’s arguments otherwise, the district court ruled that the

LSI Laffey Matrix provided the appropriate billing rates for

work lacking a specified rate in the Settlement Order. See

Salazar v. District of Columbia (Salazar III), 991 F. Supp. 2d

39, 47 (D.D.C. 2014); see also Salazar v. District of Columbia

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(Salazar IV), 30 F. Supp. 3d 47, 51-52 (D.D.C. 2014) (adopting

analysis of Salazar III). Citing to previous resolutions of other

fee applications in this on-going litigation, the district court

reiterated that “the [LSI-adjusted][ [sic] Laffey index has the

distinct advantage of capturing the more relevant data because

it is based on the legal services component of the Consumer

Price Index rather than the general CPI on which the U.S.

Attorney’s Office matrix is based.” Salazar III, 991 F. Supp. 2d

at 47 (quoting Salazar v. District of Columbia (Salazar I), 123

F. Supp. 2d 8, 14-15 (D.D.C. 2000)) (adopting and citing

Salazar v. District of Columbia (Salazar II), 750 F. Supp. 2d 70,

72-74 (D.D.C. 2011)); see also Salazar IV, 30 F. Supp. 3d at 51-

52. After concluding that the LSI Laffey Matrix was the

appropriate rate index, the district court addressed the District’s

many arguments related to the appropriateness of Plaintiffs’

counsel’s billing. See Salazar III, 991 F. Supp. 2d at 49-64;

Salazar IV, 30 F. Supp. 3d at 52-65.

The district court awarded some but not all of the fees

and costs Plaintiffs sought; and where the district court found

that Plaintiffs’ counsel’s fees were not reasonable, the court

either reduced the hours sought, or denied the fee request. See,

e.g., Salazar III, 991 F. Supp. 2d at 53 (reducing billing for

some individual claims by 15% as the court found the hours

spent “excessive”); Salazar IV, 991 F. Supp. 2d at 61 (denying

request for fees for categories of work that were “unrelated” to

the case). In the end, the district court awarded Plaintiffs

$655,587.98 for fees and expenses related to the 2011 fee

application, and also awarded Plaintiffs $522,990.63 for fees

and expenses related to the 2012 fee application. J.A. at 2344-

45, 2390-91.

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DISCUSSION

We review the district court’s fee awards for abuse of

discretion, “and will not upset its hourly rate determination

absent clear misapplication of legal principles, arbitrary fact

finding, or unprincipled disregard for the record evidence.”

Eley, 793 F.3d at 103 (citation and quotation marks omitted).

“This limited standard of review is appropriate in view of the

district court’s superior understanding of the litigation and the

desirability of avoiding frequent appellate review of what

essentially are factual matters.” Id. at 104 (quoting Covington,

57 F.3d at 1110). We do, however, “examine de novo whether

the district court applied the correct legal standard.” Id. (citation

and quotation marks omitted).

A.

As noted, the District takes issue with the district court’s

calculation of the reasonableness of the attorney hours.

Specifically, the District argues that the district court should

have applied across-the-board reductions to Plaintiffs’ counsel’s

fee applications, in light of purportedly excessive and vague

billing. For example, the District would have preferred the

district court to reduce the 2011 fee application by 20% and the

2012 fee application by 15% rather than the specific reductions

in certain categories of the fee application that the district court

made.

With respect to the district court’s determinations about

the reasonableness of the attorneys’ hours in the fee

applications, the court acted within its discretion. The district

court conducted a comprehensive and careful analysis of the

parties’ positions, and its resolution of the parties’ disputes

concerning the amount of attorney hours was reasonable. See,

e.g., Blum v. Stenson, 465 U.S. 886, 902 n.19 (1984) (“A district

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court is expressly empowered to exercise discretion in

determining whether an award is to be made and if so its

reasonableness.”). Indeed, the district court addressed the

adequacy of the time records at issue, purported overbilling or

excessive billing, and the District’s requested across-the-board

reductions. See Salazar III, 991 F. Supp. 2d at 50, 57, 64; see

also Salazar IV, 30 F. Supp. 3d at 52, 54, 61, 64-65. What is

more, the district court has supervised this case for at least the

last fifteen years, making it well-situated to determine the

reasonableness of Plaintiffs’ counsel’s fees. Accordingly, we

will not disturb the district court’s decisions.

B.

The District also takes issue with the district court’s

determination that the LSI Laffey rates apply in this case. As a

preliminary matter, we reject Plaintiffs’ threshold contention

that the District waived its challenge to the LSI Laffey rates.

Plaintiffs maintain that the law-of-the-case doctrine bars the

District from raising that challenge because the District failed to

appeal the district court’s prior fee decisions applying the LSI

Laffey Matrix, as opposed to the USAO Laffey Matrix, in setting

hourly rates under Paragraph 66 of the Settlement Order. See

Salazar I, 123 F. Supp. 2d at 11-15; Salazar II, 750 F. Supp. 2d

at 72-74. But the law-of-the-case doctrine does not apply here.

Under that doctrine, “a legal decision made at one stage of

litigation, unchallenged in a subsequent appeal when the

opportunity to do so existed, becomes the law of the case for

future stages of the same litigation, and the parties are deemed

to have waived the right to challenge that decision at a later

time.” Kimberlin v. Quinlan, 199 F.3d 496, 500 (D.C. Cir.

1999) (emphasis added) (citation and internal quotation marks

omitted). While the District failed to appeal the district court’s

use of the LSI Laffey Matrix rates in Salazar I or Salazar II, the

District is taking the opportunity now to challenge the

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application of the LSI Laffey Matrix rates to the 2010-2012

attorneys’ fees, which were not at issue in those prior decisions.

Therefore, we consider on its merits the District’s challenge to

the district court’s market-rate determination for 2010-2012.

The district court did not abuse its discretion. The

district court’s selection of LSI Laffey rates is consistent with

this Court’s intervening decision in Eley. The district court

appropriately required the Plaintiffs to demonstrate the propriety

of the rates they sought (i.e., under the LSI Laffey Matrix). In

Eley, we vacated a district court’s fee award based on evidence

submitted by the District tending to show that, in the particular

context of IDEA claims, there is a submarket in which

attorneys’ hourly fees are generally lower than the rates in either

of the Laffey Matrices. Eley, 793 F.3d at 105. In this case, by

contrast, the District identifies no such submarket, instead

acquiescing in the notion that the litigation at issue qualifies as

complex federal litigation (as to which the Laffey Matrices

apply). See, e.g., Appellant Br. at 48-49 (discussing that “in

complex federal court litigation” the USAO update to the Laffey

Matrix is a more appropriate method for determining the

prevailing market rate).

Accordingly, unlike in Eley, 793 F.3d at 103, the District

does not argue for rates lower than both of the Laffey matrices,

but instead argues that one Laffey Matrix should apply instead

of the other. See Appellant Br. at 48-54 (arguing that the USAO

Laffey Matrix is the preferable market-rate index). Moreover,

our decision in Eley, 793 F.3d at 104-05, reaffirmed our prior

decision in Covington, 57 F.3d at 1110, in which we held that

the fee applicants “clearly” met their burden of justifying their

requested rates and “were properly accorded a presumption of

reasonableness.” In Covington, the fee applicants’ evidentiary

submissions for the prevailing market rates in complex federal

litigation included “the Laffey matrix, the U.S. Attorney’s Office

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matrix, affidavits attesting to increases in the market rates since

the original Laffey matrix, and memorandum opinions in district

court cases which relied on these matrices.” 57 F.3d at 1110.

The District, in rebuttal, failed to cite any relevant cases

supporting its requested rates. Id. at 1111. Therefore, we

affirmed the district court’s “determination that the relevant

market is that of complex federal litigation.” Id. at 1112.

As the District concedes that the relevant market is that of

complex federal litigation, the only issue is whether Plaintiffs

submitted sufficient evidence for the district court to conclude

that the LSI Laffey Matrix applies. Like the fee applicants in

Covington, 57 F.3d at 1110, Plaintiffs submitted “a great deal of

evidence regarding prevailing market rates for complex federal

litigation.” Plaintiffs submitted evidence for their preferred

Laffey Matrix update, including the affidavit of the economist

that developed the LSI Laffey Matrix—Dr. Michael Kavanaugh.

Dr. Kavanaugh’s affidavit explained why the LSI is a better

measure of the change in prices for legal services in

Washington, D.C. than the USAO update to the Laffey Matrix.

J.A. at 2038-65. The affidavit also noted other federal courts

that have adopted the LSI Laffey Matrix. See J.A. at 2039-40

¶ 6.

In addition to this evidence, Plaintiffs went further and

submitted more evidence supporting the use of the rates

approved by the district court than the submissions found

adequate in Covington. For instance, Plaintiffs submitted billing

rates tables demonstrating the difference between average

national law firm rates and the LSI update to the Laffey Matrix,

as well as the difference between average national law firm rates

and the USAO update to the Laffey Matrix. J.A. at 2292. As an

example, for lawyers with experience levels between eleven and

nineteen years from the date of law school graduation, the

average national law firm rate in 2012 to 2013 was $672. Id.

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For the same experience level in the same time frame, the LSI

updated rate was closer to the average national law firm rate at

$626, while the USAO updated rate was $445. Id. On average,

the LSI Laffey Matrix rates were 14% lower than the average

national law firm rates for all experience levels in this time

period. See id. On the other hand, the USAO Laffey Matrix

rates were 38% lower than the average national law firm rates.

See id.

Furthermore, a 2012 National Law Journal Rates Survey

showed that the rates for partners in Washington, D.C. on the

high-end of the market far exceeded the rates in the LSI update.

See J.A. at 2293. With these numbers and submissions in the

record, the district court’s point that “the LSI-adjusted matrix is

probably a conservative estimate of the actual cost of legal

services in this area,” does not appear illogical. See Salazar III,

991 F. Supp. 2d at 48 (citation and internal quotation marks

omitted). The District, neither below nor on appeal, rebuts this

logic with relevant arguments. The District makes much about

the fact that this prolonged litigation is depleting public funds in

a case in which Plaintiffs no longer need to pay LSI updated

Laffey rates to “attract competent counsel.” Appellant Br. at 49.

But as the district court correctly noted, and as we have made

clear, “fees should be neither lower, nor calculated differently,

when the losing defendant is the government.” Salazar III, 991

F. Supp. 2d at 49 (quoting Copeland v. Marshall, 641 F.2d 880,

896 (D.C. Cir. 1980) (en banc)).1

1

The District’s argument that other courts within this Circuit have

applied the USAO update to the Laffey Matrix is not compelling. The

cases cited by the District are district court cases, not binding

precedent for this Court or the trial court we review.

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C.

As to the final matter on appeal, the District takes issue with

the district court’s order requiring the District to pay for the time

Plaintiffs’ counsel spent responding to an appeal involving an

effort to obtain information used by one of the District’s

contractors. See Salazar III, 991 F. Supp. 2d at 59-60 (awarding

Plaintiffs’ appeal fees). We affirm the award of fees for this

work, despite the District not entering an appearance in the

appeal. See id. at 60. In the particular circumstances of that

appeal, where the information was necessary for Plaintiffs’

counsel to litigate some of the claims underlying the Settlement

Order, see id., the award of fees was not inappropriate.

CONCLUSION

For the foregoing reasons, and based on the particular facts

of this case, the decisions of the district court are affirmed.

So ordered.