Petition — Taylor v. Rodriguez

~ Supreme Court, U. $7

FILED

— MAR 23 1978

SUPREME COURT OF THE UNITED STATES. 5. ccm

October Term, 1977

No. 77-1346

Lewis S. Taytor, Individually and in his official capacity as

_ Director of Personnel of the City of Philadelphia;

HILLEL S. LEvinson, Individually and in his official capacity

as Managing Director of the City of Philadelphia;

FRANK L. Rizzo, Individually and in his official capacity as

Mayor of the City of Philadelphia, and

THE CITY OF PHILADELPHIA, Petitioners

Luts A. RopRIGUEZ, on behalf of himself and all

other persons similarly situated, Respondents

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF

APPEALS FOR THE THIRD CIRCUIT

TYLER E. WREN

Assistant City Solicitor

JAMES M. PENNY, JR.

Deputy City Solicitor

SHELDON L. ALBERT

City Solicitor

15th Floor

Municipal Services Bldg.

Philadelphia, Pennsylvania 19107

THE LEGAL INTELLIGENCER, 66 NORTH JUNIPER STREET, PHILA, PA. 19107 (215) 561-4858 —<qy

TABLE OF CONTENTS

RE ee ee re

DEE “GU EATs ached eae ehececcs hs tcocushaat

REE ane ore ot eye

Statutory Provisions Involved .................

nr wi boseee

Reasons for Granting the Writ .................

EE Rte ire tate. ee eens os

SI SOD ba cute cokbcdeudesecieceee

Appendix:

Findings of Fact and Conclusions of Law of

United States District Court for Eastern Dis-

trict of Pennsylvania of September 2, 1976 ..

Opinion and Judgment of United States Dis-

trict Court for the Eastern District of Penn-

sylvania of October 5, 1976 .................

Opinion and Judgment of the United States

Court of Appeals for the Third Circuit .......

TABLE OF CITATIONS

Cases:

Adams v. Hempstead Heath Co., 426 F. Supp.

BOGE CG Deeds DOPE dei l CEA ies

Albemarle Paper Co. v. Moody, 422 U.S. 405

COU eGR ebWa ok bidder Chih omabedses sebtk ecko ss

Appeal of Steward, 56 Pa. 413 (1868) .........

Baxter v. Savannah Sugar Refining Corp., 495

Pole ee GS ED hd ccc we scctiewene cutee

Bishop v. Jelleff Associates, 398 F. Supp. 579

GENER SPE: cose cert ARS:

Brennan v. Ace Hardware, 495 F.2d 368 (8th Cir.

Oe 6h Rik RR Ie deers

~

~

Seo un wnwnw 8

e

AQ

A19

13

TABLE OF CITATIONS— Continued)

Cases: ..

Dugan v. Monongahela Bridge Co., 27 Pa. 303

CREED 40.04.00500000dcaseudeue en sobeeeee

Franks v. Bowman Transportation Co., 424 U.S.

Uae CHEWED casvcntccscecunabinegaedseduaubene

In Re Southwestern State Normal School, 213

PU. TU RD os wancccsccubibeseensessaminne

Knight v. Auciello, 453 F.2d 852 (1st Cir.. 1972)

Laugesen v. Anaconda Co., 510 F.2d 307 (6th

Gs BPE nc sVccnncccenvcasteesetenessedeensie

Lorillard v. Ponns., ___. U.S. __., 46 U.S. L.W.

GE citincnescace én Ghlokatiensneeishss

Monroe v. Penn Dixie Cement Corp., 335 F. Supp.

ee Ge, Gs SEE nas ccnditecconnsdedubess da

National Resources Defense Council, Inc. v. En-

vironmental Protection Agency, 484 F.2d

fy fe ee

Newman v. Piggie Park Enterprises,-Inc., 390

WH, GP Ce a0 dndéud cidatbenebndGiivie’ sti

Rogers v. Exxon Research & Engineering Co.,

550 F.2d 834 (3d Cir. 1977) ............0000.

Schultz v. Hickok Manufacturing Corp., 358

F. Supp. 1208 (N.D. Ga. 1973) ..............

Souza v. Travisono, 512 F.2d 1137 (1st Cir.

DEG . atv cdcddalbececeditnddndeeenihaam

Stringer v. Dilger, 313 F.2d 536 (10th Cir.

BGG «cpcedetséocuccnneesceneeianees

Wicker v. Hoppock, 6 Wall. 94, 18 L.Ed. 752

8, ee Sr eee

Statutes:

Age Discrimination in Employment Act of 1967,

SD U.B.C. GRRBO-GRS6 . occ cccatbsedétcnsoenens

Civil Rights Attorneys Fee Awards Act of 1976,

GB Ws GED oo ccoceceseseuesbessaunl

Page

16

16

TABLE OF CITATIONS~(Continued)

Statutes: Page

Fair Labor Standards Act of 1938, 29 U.S.C.

SED edn vosekonnbndvest<eetcbensseeenaees 4,18

Legal Service Corporation Act of 1974, 42 |

U.S.C. SBBCS CB) CB). ccc dncccccvcees 5, 9, 16, 17, 18

Regulations:

4B C.F R. GIGODS 2. nccccccccciccccccccccccces 5, 18

GH SIRs GRO bcc cccreccesscsectevcavugses 6, 18

iii

IN THE

SUPREME COURT OF THE

UNITED STATES

October Term, 1977

No. ——

LEWIS S. TAYLOR, Individually and in his official

capacity as Director of Personnel of the City of

Philadelphia; HILLEL S. LEVINSON, Individually and in

his official capacity as Managing Director of the City of

Philadelphia; FRANK L. RIZZO, Individually and in his

official capacity as Mayor of the City of Philadelphia,

and THE CITY OF PHILADELPHIA, Petitioners

v.

LUIS A. RODRIGUEZ, on behalf of himself and all other

persons similarly situated, Respondents

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

TO THE HONORABLE, THE CHIEF JUSTICE OF THE UNITED

STATES, AND THE ASSOCIATE JUSTICES OF THE UNITED

STATES SUPREME COURT:

Petitioners, Lewis S. Taylor, Hillel S. Levinson,

Frank L. Rizzo and the City of Philadelphia, respect-

1

2

fully pray that a Writ of Certiorari issue to review an

Order of the United States Court of Appeals for the

Third Circuit entered in this proceeding on December

27, 1977.

OPINIONS BELOW

The findings of fact and conclusions of law of the

United States District Court for the Eastern District of

Pennsylvania, dated September 2, 1976, granting in-

junctive and legal relief to the Respondent and his

class are reported at 428 F. Supp. 1118 (E.D. Pa. 1976)

and set forth in the Appendix hereto beginning at page

Al.

The opinion of the District Court awarding attor-

neys’ fees to Respondent’s counsel dated October 5,

1976, is reported at 420 F. Supp. 893 (E.D. Pa. 1976)

and is set forth in the Appendix hereto beginning at

page AQ.

The opinion of the United States Court of Appeals

for the Third Circuit, filed December 27, 1977, is not

yet reported and is set forth in the Appendix hereto

beginning at page A19.

JURISDICTION

The judgment of the Court of Appeals for the Third

Circuit was entered on December 27, 1977. This Peti-

tion for Certiorari was filed within ninety days of that

day. The jurisdiction of this Court is invoked under 28

U.S.C. §1254(1).

3

QUESTIONS PRESENTED FOR REVIEW

1. Whether under the Age Discrimination in Em-

ployment Act [ADEA], a plaintiff job applicant who is

not ordered hired by the trial court and who is demon-

strably unqualified for a position by reason of his post-

trial failure of a court ordered pre-employment civil

service examination, is nevertheless entitled to back

pay and liquidated damages?

2. Whether under the ADEA, a plaintiff job appli-

cant who only establishes that he was wrongfully de-

nied the right to take a non-discriminatory pre-

employment civil service examination can shift the

burden of proof to the defendant employer to not only

justify the denial but to affirmatively demonstrate at

trial that the applicant is unqualified under the very

examination he demanded to take?

3. Whether Community Legal Services (CLS), as a

publicly funded legal services corporation, may recover

attorney’s fees under the ADEA?

4. Whether the burden of showing compliance with

federal regulations which authorize exceptions to the

general statutory prohibition in the Legal Services

Corporation Act against taking fee generating cases,

rests with CLS as the party seeking the exception, or

with the defendant?

5. Whether under the ADEA, an award of attor-

neys’ fees to a publicly funded legal services corpora-

tion must be based upon salaries paid to similarly expe-

rienced attorneys in the private bar and not upon the

actual salaries paid to the employee attorneys seeking

the award?

4

STATUTORY PROVISIONS INVOLVED

AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967:

29 U.S.C. Section 626(b): “The provisions of this

chapter shall be enforced in accordance with the pow-

ers, remedies, and procedures provided in sections

211(b), 216 (except for subsection (a) thereof), and 217

of this Title, and subsection (c) of this section. Any act

prohibited under section 623 of this Title shall deemed

to be a prohibited act under section 215 of this Title.

Amounts owing to a person as a result of a violation of

this chapter shall be deemed to be unpaid minimum

wages or unpaid overtime compensation for purposes

of sections 216 and 217 of this title: Provided, that liq-

uidated damages shall be payable only in cases of will-

ful violations of this chapter. In any action brought to

enforce this Chapter the court shall have jurisdiction to

grant such legal or equitable relief as may be appropri-

ate to effectuate the purposes of this chapter, including

without limitation judgments compelling employment,

reinstatement or promotion, or enforcing the liability

for amounts deemed to be unpaid minimum wages or

overtime compensation under this section. . .”

FAIR LABOR STANDARDS ACT OF 1938:

29 U.S.C. Section 216(b): “Any employer who vio-

lates the provisions of section 206 or section 207 of this

title shall be liable to the employee or employees af-

fected in the amount of their unpaid minimum wages,

or their unpaid overtime compensation, as the case

may be, and in additional equal amount as liquidated

damages. Action to recover such liability may be main-

tained against any employer (including a public

agency) in any Federal or State court of competent

‘jurisdiction by any one or more employees for and in

behalf of himself or themselves and other employees

similarly situated. No employee shall be a party plain-

tiff to any such action unless he gives his consent in

——

5

writing to become such a party and such consent is

filed in the court in which such action is brought. The

court in such action shall, in addition to any judgment

awarded to the plaintiff or plaintiffs, allow a reason-

able attorney’s fee to be paid by the defendant, and

costs of the action. The right provided by this subsec-

tion to bring an action by or on behalf of an employee,

and the right of any employee to become a party plain-

tiff to any such action, shall terminate upon the filing

of a complaint by the Secretary of Labor in an action

under section 217 of this title in which restraint is

sought of any further delay in the payment of unpaid

minimum wages, or the amount of unpaid overtime

compensation, as the case may be, owing to such em-

ployee under section 206 or 207 of this title by an em-

Ployer liable therefor under the provisions of this sub-

section.”

LEGAL SERVICE CORPORATION ACT OF 1974:

42 U.S.C. Section 2996(b)(1): “Funds, limitation.

— No funds available by the Corporation under this

title, either by grant or contract, may be used — (1) to

provide legal assistance with respect to any fee-

generating case (except in accordance with guidelines

promulgated by the Corporation), to provide legal as-

sistance with respect to any criminal proceeding, or to

provide legal assistance in civil actions to persons who

have been convicted of a criminal charge where the

civil action arises out of alleged acts or failures to act

and the action is brought against an officer of the

court or against a law enforcement official for the pur-

pose of challenging the validity of the criminal convic-

tion.”

TITLE 45, CODE OF FEDERAL REGULATIONS, §1609.3:

“Prohibition. — No recipient shall use funds re-

ceived from the Corporation to provide legal assistance

6

in a fee-generating case unless other adequate repre-

sentation is unavailable. All recipients shall establish

procedures for the referral of fee-generating cases.”

TITLE 45, CODE OF FEDERAL REGULATIONS, $1609.4:

“Authorized representation in a fee-generating

case. — Other adequate representation is deemed to be

unavailable when (a) the recipient has determined that

free referral is not possible because:

(1) The case has been rejected by the local lawyer

referral service, or by two private attorneys; or

(2) Neither the referral service nor any lawyer will

consider the case without payment of a consultation

fee; or

(3) The case is of the type that private attorneys in

the area ordinarily do not accept, or do not accept with-

out prepayment of a fee; or

(4) Emergency circumstances compel immediate

action before referral can be made, but the client is

advised that, if appropriate and consistent with profes-

sional responsibility, referral will be attempted at a

later time; or

(b) Recovery of damages is not the principal object

of the case and a request for damages is merely ancil-

lary to an action for equitable or other non-pecuniary

relief; or inclusion of a counterclaim requesting dam-

ages is necessary for effective defense or because of

applicable rules governing joinder of counterclaims; or

(c) A court appoints a recipient or an employee of a

recipient pursuant to a statute or a court rule or prac-

tice of equal applicability to all attorneys in the juris-

diction.

7

STATEMENT OF THE CASE

Respondent, Luis Rodriguez, then age 46, applied

on December 23, 1974, to the Petitioner, City of Phila-

delphia, to take the competitive Civil Service examina-

tion for the position of Security Officer I. One month

later, the City’s Personnel Department informed Mr.

Rodriguez that he could not sit for the examination be-

cause he was overage. Since 1966, the City of Phila-

delphia had adhered to a personnel policy requiring

that applicants for the position of Security Officer I be

less than 41 years of age in order to be eligible to take

the requisite competitive Civil Service examination.

Impelled by his rejection, Mr. Rodriguez brought suit on

behalf of himself and all other persons over the age of

41 against Petitioners in the United States District

Court for the Eastern District of Pennsylvania. The Re-

spondent’s complaint, inter alia, alleged that the City’s

maximum age reyuirement for Security Officer I ap-

plicants violated the Age Discrimination in Employ-

ment Act of 1967, 29 U.S.C. §§621-634. The complaint

sought class relief in nature of a permanent injunction

proscribing enforcement of the City’s age limit and in-

dividual relief for Mr. Rodriguez in the form of an op-

portunity to take the competitive examination and an

entitlement to recovery of pecuniary losses.

On December 27, 1976, the District Court certified

the class pursuant to Rule 23(b)(2) and, after a non-

jury trial, concluded that the City’s policy of barring

persons over the age of 41 from taking the competitive

examination for the job of Security Officer I violated

§4(a)(1) of the ADEA, 29 U.S.C. §623(a)(1), and was

not a bona fide occupational qualification under 29

U.S.C. §623((1). The Court did not find that any class

members, including the Respondent, were otherwise

qualified for the position and did not order any hirings.

It did, however, grant the named Respondent an oppor-

tunity to take the same written examination he had

been denied in 1975 on account of his age. He was to be

8

offered the position of Security Guard I with full re-

troactive benefits if, and only if, he passed the exami-

nation. Notwithstanding this contingent entitlement to

the position, the Court went on to award the Respon-

dent unpaid wages or back pay under 29 U.S.C. §626(b)

' for the period from the date of the first hiring after his

rejection and the date of the final order. The District

Court further ruled that because the City’s violation

was willful, the Respondent was entitled to liquidated

damages in the amount of the calculated unpaid min-

imum wages under 29 U.S.C. §626(b). The District

Court specifically held that the respondent “having

proved the violation, is not required to prove that ‘but

for’ the violation he would have been hired in order to

be entitled to an award of money both as an ‘amount

owing’ to him and as liquidated damages.” (A6).

In a subsequent opinion on October 5, 1976, the

District Court awarded attorneys’ fees to Respondent’s

counsel, Community Legal Services, a federally

funded legal services corporation. Adopting a rate of

$30.00 per hour, the Court rejected the requested

hourly rates of $80.00 “in court” and $50.00 “out of

court” on the basis that they were excessive in view of

(a) the experience of the attorneys; (b) their annual

salaries; and (c) comparable attorney’s compensation.

The Court concluded that $30.00 an hour was more than

reasonable considering that the actual compensation of

the two petitioning CLS attorneys was only approxi-

mately $9.00 and $6.75 an hour respectively, and that

comparable “public interest” attorneys received rela-

tively modest rates like the $30.00 per hour compensa-

tion for criminal appointment under the Criminal Jus-

tice Act of 1974.

Petitioners appealed to the United States Court of

Appeals for the Third Circuit from that portion of the

September 2, 1976 order awarding damages to the

named respondent and from the order of October 5,

1976, granting attorneys’ fees. Respondent cross-

9

appealed from the attorneys’ fee order, challenging the

sufficiency of the hourly rate granted. The various ap-

peals were subsequently consolidated for briefing and

argument puposes.

At oral argument before the Court of Appeals, it

was revealed that pursuant to the District Court’s or-

der, Mr. Rodriguez had been given the written exami-

nation for the job of Security Officer I, but that he had

received a failing score. The Respondent was accord-

ingly unqualified and.would never have been hired

during the period in question.

On December 27, 1977, the Court of Appeals ren-

dered its judgment in this matter, affirming the back

pay and liquidated damages awarded to the named Re-

spondent. The Court specifically recognized that the

Respondent’s failure on the Civil Service exam meant

that the District Court’s order would enable him to col-

lect back pay for a job for which he was unqualified.

Nevertheless, the Court found a prima facie entitle-

ment to back pay arose without regard to Respondent’s

entitlement to employment. The Court concluded that

once discrimination is found under the ADEA, it is the

defendant’s burden to prove that the plaintiff is not

qualified for the position, even where the plaintiff ’s

only demonstrated injury was the denial of a right to

compete in an objective written examination. The

Court concluded that the fact that the named Respon-

dent subsequently failed the competitive examination

and was thereby demonstrably unqualified was unim-

portant, since it came after the close of the evidence at

trial.

As to the order of October 5, 1976, the Court af- ©

firmed in principle the District Court’s award of attor-

neys’ fees to CLS under the ADEA. The Court held that

the statutory prohibition in the Legal Services Corpora-

tion Act of 1974 against providing legal assistance in

fee-generating cases did not bar attorneys’ fee awards

in such cases in the absence of proof that CLS had

10

failed to comply with federal regulations allowing ex-

ceptions to the general prohibition. Rather than requir-

ing CLS to prove that the facts of the particular case

justified an exception under the regulations, the Court

instead presumed such facts and imposed the burden

on the Petitioners to show that CLS had acted improp-

erly.

In addition, the Court held that the absolute pro-

hibition in the local CLS articles of incorporation

against the handling of fee generating cases under any

circumstances was satisfied by CLS’s presumed com-

pliance with the federal regulations. Finally, the Court

held that the appropriate referents in awarding attor-

neys’ fees to the CLS attorneys were not the actual

salaries paid to them by their public employer but the

salaries prevailing in the private legal market for simi-

larly experienced attorneys in similar cases.

The case was remanded to the District Court for

re-calculation of the Respondent’s monetary award to

account for necessary set-offs and the recalculation of

the attorneys’ fee award. This petition for a Writ of Cer-

tiorari followed.

11

‘REASONS FOR GRANTING THE WRIT

I. The Decision Below Raises an Important Federal

Question as to Whether Back Pay and Liquidated

Damages Are Allowable Under the ADEA Without a

Finding of Actual Injury to the Plaintiff or Entitle-

ment to the Disputed Position.

Despite recent dicta in Lorillard v. Ponns, ——

U.S. ——, 46 U.S. L.W. 4150 (1978), this Court has

never directly considered the question of whether

under the ADEA a plaintiff job applicant who is not

ordered hired by the trial court and who is demonstra-

bly unqualified for a position by reason of his post-trial

failure of a court ordered civil service examination, is

nevertheless entitled to back pay and liquidated dam-

ages. In the instant case, the Respondent was wrong-

fully denied only the right to compete for the position of

Security Guard. That injury was properly compensated

by the opportunity to compete and not by back pay and

liquidated damages.

From its inception, this Court had consistently held

that a plaintiff’s injury dictates his remedy:

The general rule is, that when a wrong has been

done, and the law gives a remedy, the compensa-

tion shall be equal to the injury. The latter is the

standard by which the former is to be measured.

The injured party is to be placed as near as may be

in the situation he would have occupied if the

wrong had not been committed. Wicker v. Hop-

pock, 6 Wall 94, 99; 18 L.Ed. 752 (1867).

In discrimination law, this time honored principle

has heretofore been strictly followed. In fashioning

back pay remedies under Title VII, this Court has rec-

ognized the intent of Congress to compensate dis-

criminatees rather than to punish offenders. Congress

12

intended for Title VII to make persons whole for in-

juries suffered on account of unlawful employment

discrimination. Franks v. Bowman Transportation

Co., 424 U.S. 747 (1976); Albemarle Paper Co. ¥.

Moody, 422 U.S. 405 (1975). With respect to dis-

criminatory refusals to hire, this Court has routinely

applied these principles to award back pay only to those

individuals who are qualified for the positions in ques-

tion and who would have been hired: “but for” the dis-

crimination. Id.

In the instant case, the District Court awarded

back pay to the Respondent, but specifically held that

having proved a violation, he was not required to prove

that “but for” the violation he would have been hired in

order to be entitled to the award (A9). Back pay was

given with no showing of entitlement to the position.

The Court reserved the question of entitlement until

after the Respondent had taken the written examina-

tion, ordering him hired, if and only if, he passed the

test. The Respondent did not pass the exam and was

not ordered hired.

Since the District Court correctly concluded that

the Respondent was not entitled to the position of Secu-

rity Guard but only the opportunity to compete for it,

the Respondent suffered no demonstrable economic

loss as a result of the discrimination. He nevertheless

was awarded back pay under the Act. Such an award

was not compensation, but a windfall to the Respon-

dent, and tantamount to punitive damages against the

Petitioners.' Such a result could not have been en-

visioned by Congress. As Senator Yarborough in the

Senate Report on the Act stated: |

1. The Third Circuit has concluded that punitive damages

under the ADEA are limited to the liquidated damage provision

under 29 U.S.C. §626(b). Rogers v. Exxon Research & Engineer-

ing Co., 550 F.2d 834 (3d Cir. 1977).

13

We now have the enforcement plan which I think

is best adopted to carry out the age discrimination

in employment ban with the least anxiety or diffi-

culty on the part of American business and with

complete fairness to the workers. 113 Cong. Rec.

31254 (1967).

“The least anxiety or difficulty on part of American

business” would not be obtained by the imposition of

penalties totally disproportionate to the wrong commit-

ted.

A majority of lower courts have held that back pay

under the ADEA is contingent upon a demonstrated

entitlement under the traditional “but for” test. Lauge-

sen v. Anaconda Co., 510 F.2d 307 (6th Cir. 1975);

Brennan v. Ace Hardware, 495 F.2d 368 (8th Cir.

1974); Bishop v. Jelleff Associates, 398 F. Supp. 579

(D.D.C. 1974); Schultz v. Hickok Manufacturing

Corp., 358 F. Supp. 1208 (N.D. Ga. 1973); Monroe v.

Penn Dixie Cement Corp., 335 F. Supp. 231 (N.D. Ga.

1971).

The Court of Appeals recognized the ‘“‘but for”

principle but paid it only passing lip service. In spite of

the Respondent’s lack of entitlement to the position,

the Court justified the back pay award on the basis of

the “emotional costs of the [Respondent’s] uncertainty”

in finding out whether he would be hired. (A33). All

plaintiffs face such uncertainty. However, a plaintiff

who doesn’t prove his entitlement has merely shown

that he was justified in that uncertainty. Compensa-

tion in such an instance serves no public purpose. As a

general rule an injured party, except where punitive

damages may be awarded, may recover damages for

only the actual loss he suffers. He is to be made whole,

but is not to be put in a better condition that if he would

have been if the wrong had not been committed.

Stringer v. Dilger, 313 F.2d 536 (10th Cir. 1963). The

14

Respondent here suffered no actual wage loss because

he was not qualified for the position.

By concluding that the award of back pay was ap-

propriate here, the Court of Appeals abdicated its

responsibility to produce a just result in light of the cir-

cumstances peculiar to this case. The Court should ac-

cept jurisdiction of this case to resolve these serious

questions regarding the construction of the ADEA.

II. The Decision Below Raises a Significant Federal

Question as to the Proper Allocation of the Burdens

of Proof in Damage Proceedings Under the ADEA.

athe Court of Appeals justified the decision of the

District Court by holding that, regardless of the Re-

spondent’s present qualification as evidenced by his

post-trial failure of the civil service examination, the

Respondent was presumptively entitled to back pay be-

cause the City failed to prove at trial that he was un-

qualified. The Court held that in an ADEA case an ap-

plicant who proves a violation bears the initial burden

of demonstrating entitlement to damages. If the appli-

cant established the existence of vacancies and his

general qualifications for work of the type sought, the

burden shifts to the employer to prove that the appli-

cant would not have been hired, regardless of the age

discrimination, because he lacked the necessary qual-

ifications for the position.

Despite the fact that the Respondent failed the

written examination, the Court of Appeals held that

the City had not met its burden because the failure

occurred after trial. The Court concluded that the Peti-

tioners could have given the test to the Respondent

prior to trial and introduced his failure at that time.

The conclusion ignored the obvious fact that the only

issue in the case was whether the Respondent had the

right to enter the selection process and take the exam

15

in the first place. To require Petitioners to administer

the exam and other pre-employment screening devices

including physical, psychiatric and background exams

to a plaintiff whose claim is pending, is to give him the

relief he seeks without trial.* In any event, the District

Court obviously did not close the inquiry in regard to

the Respondent’s qualifications at the end of the trial.

The Court specifically left open the Respondent’s per-

formance on the exam and his subsequent entitlement

to the position. The appropriate time for the Petitioners

to introduce evidence of non-qualification was when it

became available, subsequent to the examination.

This is a burden which the Petitioners stand ready to

meet, but have been denied by the Court of Appeals.

The Court of Appeals acknowledged that the Re-

spondent had failed the exam and that he would be

receiving back pay for a job to which he was not enti-

tled (A24). It nevertheless affirmed. The necessity of

reversing this holding and fairly distributing the bur-

dens of proof under the ADEA is an important reason

for this Court to grant certiorari.

III. The Decision Below Raises an Important but Previ-

ously Unanswered Federal Question as to Whether

pen May Be Awarded Attorneys’ Fees Under the

ADEA.

The Court of Appeals upheld the District Court’s

award of fees on the basis that they could see nothing

in the ADEA which suggested that legal service or-

ganizations were to be treated any different from regu-

2. Carried to its logical conclusion, the Court’s holding will

require an employer, at great expense, to process fully every appli-

cant who would otherwise be properly eliminated from the competi-

tion because he might bring a claim in the future. Moreover, to

blithely suggest that written examinations can be given at any time

is also to ignore the important requirement of exam security.

16

lar attorneys with respect to their entitlement to fees.

This simplistic approach ignored the congressional

purposes underlying the availability of attorneys fees

under the ADEA and the availability of counsel under

the Legal Services Corporation Act. Both Acts were de-

signed to ensure that deserving plaintiffs would be able

to secure their day in court regardless of their income

or the financial prospects of their claim. With respect to

the attorneys’ fees guarantees under the ADEA, and

the recent Civil Rights Attorneys’ Fees Awards Act of

1976, it is apparent that Congress was only concerned

with aiding those plaintiffs whose access to courts de-

pended upon their ability to hire private counsel. Noth-

ing in the legislative history suggests that the provi-

sions were intended to assist civil rights plaintiffs who,

by access to free legal services at taxpayer expense,

bear no attorneys’ fees. Indeed, the availability of such

services to qualified plaintiffs through legal services

corporations, removes the exact same barriers to the

courts which the attorneys’ fees award provisions are

designed to eliminate. .

The House Report on the Civil Rights Attorneys’

Fees Awards Act of 1976 stated:

The application of the standards will insure that

reasonable fees are awarded to attract competent

counsel in cases involving civil and constitutional

rights, while avoiding windfalls to attorneys. The

effect of this [Act] will be to promote the enforce-

ment of the Federal Civil Rights Acts as Congress

intended and to achieve uniformity in those stat-

utes and justice for all citizens. House Report

(Judiciary Committee) No. 94-1558 Sept. 15, 1976

at p. 9.

Obviously, attorneys’ fees guarantees were not de-

signed to encourage those attorneys who needed no en-

couragement. Attorneys employed by CLS are paid

with public funds and are mandated to provide repre-

17

sentation in just such cases where the prospect of a fee

recovery is so remote that private counsel will not take

the case. Attorneys’ fees awards provisions and the

Legal Services Corporation Act are compatible reme-

dies to the same problem. CLS was established to

guarantee qualified plaintiffs their day in court by pro-

viding free representation by public attorneys, while

the attorneys’ fees awards approaches the problem

from the opposite direction by encouraging participa-

tion of the profit oriented private bar. To award attor-

neys’ fees to CLS, whose very purpose is to prosecute

such cases, furthers no apparent legislative purpose.

What it does do is to grant CLS a windfall and a double

dip at public funds.

Finally, attorneys’ fee awards are generally in-

tended only to compensate plaintiffs for their expenses,

and not to punish errant defendants. To award fees

here to an organization already compensated through

public funding is to transform the award into a puni-

tive measure against the defendant. Shifting the fee

does not further any legitimate interest of the indi-

vidual plaintiff who owes nothing anyway; nor any

legitimate interest of CLS itself, which is already

funded to provided representation. However, it does

clearly punish the defendant for no discernable public

purpose.

Legality of attorneys’ fees award to CLS and simi-

lar publicly funded legal aid organizations is an impor-

tant federal question which should be answered by this

Court.

IV. The Decision Below Raises Important Federal

Questions as to Scope of the Authority of Community

Legal Services to Take Fee Generating Cases Under

Federal and State Law.

Petitioners contend that the legality of CLS’s initial

representation of a plaintiff is a threshold question in

18

any determination of the propriety of an award of at-

torney’s fee for such representation. Under the Legal

Services Corporation Act, 42 U.S.C. §2996(b)(1), Re-

spondent’s counsel, CLS, is prohibited from using cor-

poration funds to provide legal assistance with respect

to any fee generating cases, except in certain limited

situations where the private bar has refused to take

such cases. 45 CFR 1609. Under the ADEA enforce-

ment provisions, attorneys’ fees are guaranteed to suc-

cessful counsel. 29 U.S.C. §626(b) and §216(b). Given

the mandatory language employed, every case brought

under the ADEA is automatically transformed into acon-

tingent fee case which CLS must accordingly decline,

unless it has first been rejected by private counsel.

Although the Court of Appeals recognized this pro-

hibition in principle, it presumed, absent contrary evi-

dence, that CLS was entitled to an exception from the

general prohibition. It placed the burden of proof on the

City, the party to whom such evidence was the least

available, to demonstrate that CLS had not complied

with the federal regulations. Petitioners contend that

the burden rightfully belonged on CLS to make a prima

facie showing that it had only accepted this case as a

matter of last resort. Any other allocation of the burden

is inequitable and contrary to the clear intention of

Congress. This Court should correct this error.

The Court of Appeals also rejected the Petitioners’

argument that this local CLS was prohibited from re-

ceiving attorneys’ fees on the basis that its particular

articles of incorporation prohibited it from handling

any fee-generating cases. These self-imposed articles

are more restrictive than the Legal Services Corpora-

tion Act with respect to the propriety of CLS accepting

fee-generating cases. Article IX of its articles of incor-

poration provides:

These standards require that persons who, by rea-

sons of pcverty, are financially unable to secure

counsel wiil not be provided legal services in mat-

19

ters of a contingent nature, including, but not lim-

ited to, personal injury cases and any other type

cases normally handled on a contingent basis by

attorneys, and any other cases as may yield a re-

covery sufficient to interest a private attorney in

accepting such a case.

Under Pennsylvania law, the articles of a corpora-

tion must be strictly construed and any authority not

expressly granted is prohibited. In Re Southwestern

State Normal School, 213 Pa. 244 (1906); Appeal of

Steward, 56 Pa. 413 (1868). Moreover, if two construc-

tions of a charter are possible, the one that limits cor-

porate power must be chosen. Dugan v. Monongahela

Bridge Co., 27 Pa. 303 (1856).

The Court of Appeals ignored the clear language of

CLS’s corporate article and held that the prohibition

therein regarding fee-generating cases could be

waived if CLS otherwise complied with the related fed-

eral regulations. The Court was clearly in error. Penn-

sylvania law requires and federal law allows a strict

enforcement of the self imposed local restrictions, re-

gardless of what the more liberal federal regulations

might permit. The Court of Appeal’s decision is in di-

rect conflict with the law of Pennsylvania and this

Court should accordingly grant certiorari to resolve

this error.

V. The Decision Below Raises a Significant Federal

Question as to Whether Under the ADEA, an Award

of Attorneys’ Fees to a Publicly Funded Legal Ser-

vices Corporation Must Be Based Upon Salaries

Paid to Similarly Experienced Attorneys in the Pri-

vate Bar and Not Upon the Actual Salaries Paid to

the Employee Attorneys Seeking the Award.

This Court has not heretofore considered the ques-

tion of whether legal service organizations must be

20

awarded statutory attorneys’ fees at rates which are

tied to the income of the private bar and which bear no

relation to their actual salaries. The District Court

awarded fees to the Respondent’s attorneys at the rate

of $30.00 an hour because of its understanding of their

limited experience, their annual salaries at CLS, and

comparable attorneys’ compensation. The Court of Ap-

peals rejected this determination on the theory that the

appropriate referent in cases of this nature was not the

actual salaries earned by the petitioning attorneys dur-

ing the representation, but the salaries paid to attor-

neys of similar skills within the private bar. This deci-

sion to base fees on the earnings of attorneys who had

nothing to do with the litigation at hand was in error

and must be reversed by this Court.

In considering the question of an appropriate fee,

the Court of Appeals observed that legal service

salaries are generally lower than salaries paid as-

sociates in private firms with comparable experience

and credentials. The Court correctly noted that “Courts

in awarding fees are not empowered to rectify this gen-

eral disparity.” (A47). However, in spite of this self-

admonition, the Court proceeded to do just what it said

it had no power to do. It held that the legal service

attorneys and private attorneys should be compensated

at the same rates, regardless of actual salary differ-

ences.

The holding by the Court of Appeals does not

further the purposes of statutory attorneys’ fees. The

prospect of awards of attorneys’ fees is intended to act

as an incentive to privete attorneys to offer their ser-

vices in legitimate discrimination cases. However, the

amount of an award need only be sufficient to

adequately compensate the particular attorneys in-

volved and to attract competent counsel to such cases

in the future. Newman v. Piggie Park Enterprises,

Inc., 390 U.S. 400 (1968); Baxter v. Savannah Sugar

Refining Corporation, 495 F.2d 437 (Sth Cir. 1974).

21

Unlike a private law firm, CLS is not organized for the

purpose of generating profits, but rather to serve those

who could otherwise not afford legal aid. CLS is obli-

gated to provide representation regardless of the pros-

pect of payment and does not need the incentive of a

fee award to comply with its statutory mandate. The

award by the District Court actually went far beyond

the regular hourly salary rates of the petitioning attor-

neys, but was still held inadequate by the Court of Ap-

peals as below the market place rate. A rate which

bears no relation whatsoever to the actual salaries

commanded by the petitioning attorneys is a legal fic-

tion and results in a windfall to the attorneys rather

than reasonable compensation.

A number of courts have awarded fees to private

attorneys at reduced rates because of the pro bono pub-

lico aspect of the litigation. Souza v. Travisono, 512F.2d

1137 (1st Cir. 1975); Knight v. Auciello, 453 F.2d

852 (ist Cir. 1972); National Resources Defense

Council, Inc. v. Environmental Protection Agency,

484 F.2d 1331 (1st Cir. 1973); Adams v. Hempstead

Heath Co., 426 F. Supp. 1141 (D.C. N.Y. 1974). The

Court of Appeals in Souza was explicit:

We disagree with the assumption of the District

Court and with parties that the hourly rate is to be

based on a reasonable market place rate for such

services. This is not a case in which attorneys sold

their services to a private client willing to pay the

market price for them. 512 F.2d at 1141.

The reasons for awarding a lower rate to a legal service

attorney who is compensated regardless of the outcome

of his suit are even more compelling.

The questicn of the proper standards to be applied

in determining hourly rates for legal services organiza-

tions is an important federal question and one for

which this Court should grant certiorari.

22

CONCLUSION

For the foregoing reasons, your petitioners respect-

fully submit that a Writ of Certiorari should issue to

review the judgment and opinion of the United States

Court of Appeals for the Third Circuit.

Respectfully submitted:

Gh. E. th

TYLER E. WREN

Assistant City Solicitor

JAMES M. PENNY, JR.

Deputy City Solicitor

SHELDON L. ALBERT

City Solicitor

Counsel for Petitioners

23

CERTIFICATE OF SERVICE

I hereby certify that on this 23rd day of March,

1978 three copies of the Petition for Writ of Certiorari

were served by First Class Mail on Andrew Erba, Es-

quire, 5219 Chestnut Street, Philadelphia, Pennsylva-

nia 19107, Counsel for the Respondent. I further certify

that all parties required to be served have been served.

TYLER E. WREN

Assistant City Solicitor

Counsel for Petitioners

Room 1580, Municipal Services Bldg:

Philadelphia, Pa. 19107

—

IN THE

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

Civil Action

Class Action

No. 75-1738

LUIS A. RODRIGUEZ, Plaintiff

v.

LEWIS S. TAYLOR, HILLEL S. LEVINSON, |

FRANK L. RIZZO

and

THE CITY OF PHILADELPHIA

VAN ARTSDALEN, J. September 2, 1976

I.

Findings of Fact

1. Luis A. Rodriguez on December 23, 1974, filed

an application for employment with the City of Phila-

delphia for the position of Security Officer I. The appli-

cation was rejected and Luis A, Rodriguez was not

permitted to take the competitive examination that

was conducted by the City of Philadelphia for such po-

sition solely because Luis A. Rodriguez was “over

maximum age” for being hired.

2. The City of Philadelphia from 1966 and con-

tinuously thereafter has maintained an inflexible re-

quirement and policy that applicants for the position of

Security Officer I must be less than 41 years of age, in

order to be permitted to take the competitive examina-

tion for the position, and to be originally hired by the

City of Philadelphia as a Security Officer I. This age

Al

A2

restriction was promulgated by the City Personnel Of-

fice of the City of Philadelphia in conjunction with City

Departments and was approved by the City’s Civil Ser-

vice Commission.

3. The City of Philadelphia does not require an ap-

plicant for the position of Security Officer I to present

or obtain any medical certification prior to or as a req-

uisite for filing an application for such employment, or

for qualifying to take the competitive examination.

4. The City of Philadelphia employs approxi-

mately 48 security officers; the median age is approx-

imately 39 years, and approximately 15 are over the

age of 41 years. Those who have been hired as Security

Officer I are not discharged, nor are they required to

retire, resign, or accept other job assignments or clas-

sifications after becoming 41 years of age. Of those se-

curity officers presently employed by the City of Phila-

delphia who are over 41 years old, the duties and work

to which they are assigned are being satisfactorily per-

formed by them and are the same or not significantly

different from the duties assigned to those security of-

ficers who are under 41 years of age.

5. All of the work and duties of a Security Officer I,

based on the job qualifications and description pub-

lished by the City of Philadelphia (Exhibit R 11) and

from actual past experience, can be safely and satis-

factorily performed by a person over the age of 41 years

who is in good physical health and of normal physical

strength.

6. Inexpensive tests can be devised which can ac-

curately determine whether a particular individual

over the age of 41 years will be able from a physical and

mental standpoint to perform satisfactorily all of the

duties and tasks which may be assigned to a Security

Officer I.

7. The City of Philadelphia has made no job task

analysis and has undertaken no studies to determine

the extent and frequency of physical and mental effort

A3

and stress required or anticipated in the performance

of the duties of a Security Officer I. The City of Phila-

delphia has made no objective analysis, and has relied

upon no statistical or scientific studies to establish its

contention that the 41 year maximum age requirement

for being initially hired as a Security Officer I is a bona

fide occupational qualification, reasonably necessary

to the normal operation of the city government.

8. The duties of Security Officer I primarily in-

volve policing the facilities of the Philadelphia General

Hospital and the Water Department.

9. Luis A. Rodriguez was born on December 12,

1928 (Exhibit P-8). Both at the time of the filing of the

application and the time of the trial he was strong

physically and in good health. He has had extensive

experience in security guard work and duties, and is

presently so employed, part-time at the rectory of St.

Peter’s Roman Catholic Church, 5th and Girard Av-

enue, Philadelphia, Pennsylvania. He has taken and

completed the training course conducted at the Phila-

delphia Police Academy in connection with qualifying

for and obtaining a Private Patrolman’s license pur-

suant to the laws of the Commonwealth of Pennsylva-

nia. The said training course is likewise required of

Security Officers I. He is also prese.itly an active en-

listed soldier in the Pennsylvania National Guard and

participates in the regularly scheduled training exer-

cises and summer camp training. He does, however,

receive a non-service connected Veterans Administra-

tion disability pension for a back condition, but this

does not interfere with his ability to perform heavy |

physical labor. He regularly engages in personal physi-

cal exercises such as weight lifting and calisthenics.

The present state of his physical strength and capacity

for hard physical labor (based on both testimony and

personal observation in court) exceeds that of many

healthy men who are under 40 years of age.

10. Although on a statistical average persons who

A4

are 40 years of age or over are not as physically strong

nor as physically quick in movement and reaction time

as persons who are under 40 years of age, there are

many persons over 40 years of age who are physically

stronger and quicker than many persons under 40

years of age. Most persons, as individuals, reach their

maximum physical strength and capabilities at ap-

proximately age 25 and thereafter gradually decline.

However, the rapidity of decline varies among indi-

viduals, as does the maximum physical strength and

capabilities, and with proper exercise and practice it is

possible for an individval to have strength and physical

alertness over the age of 40 superior to that which the

individual had at the normal age of maximum capabil-

ity.

11. Hiring and/or retaining persons over the age of

41 years as Security Officers I by the City of Philadel-

phia will in no way endanger such employees, the effi-

ciency of the city government operation, or the public

safety, provided proper physical, medical and mental

objective standards based on factors other than age are

applied. Such standards, based on factors other than

age, would provide a greater degree of safety and effi-

ciency than would any standard based solely on age.

12. The United State Government has no re-

quirement that would preclude hiring and employment

by the United States in job classifications having

duties similar to that of Security Officer I of persons

between the ages of 40 and 65.

13. The City of Philadelphia’s maximum age re-

quirement of 41 years for initial hiring and employ-

ment on a Security Officer I is not a bona fide occupa-

tional qualification, and it is not reasonably necessary

to the normal operation of the city government or any

of its departments or agencies.

14. Luis A. Rodriguez has complied with all

statutory and administrative requirements prerequi-

site to filing and maintaining this action.

AS

15. The last examination for Security Officer I

was conducted by the City of Philadelphia on or about

February 27, 1975, and the first person hired as a Secu-

rity Officer I by the City of Philadelphia subsequent to

the rejection of the application of Luis A. Rodriguez

was June 2, 1975. Additional persons have been em-

ployed as Security Officer I subsequent to June 2, 1975.

16. The salary of a Security Officer I commences

at $11,275.00, and the maximum for such position is

$12,303.00. |

II.

Conclusions of Law

1. The court has jurisdiction of the subject-matter

and the parties, and venue is proper in the Eastern

District of Pennsylvania.

2. The City of Philadelphia, by its policy of reject-

ing applications, refusing to permit applicants to take

the competitive examinations, and refusing to hire any

person over the age of 41 years as a Security Officer I

violates section 4(a)(1) of the “Age Discrimination in

Employment Act,” Act of December 15, 1967, Pub. L.

90-202, 81 Stat. 603, 29 U.S.C. §623(a)(1).

3. The requirement that an applicant for the posi-

tion of Security Officer I be under the age of 41 years is

not a bona fide occupational qualification reasonably

necessary to the normal operation of the city govern-

ment.

4. The City of Philadelphia refused to hire and

otherwise discriminated against Luis A. Rodriguez in-

dividually and the plaintiff class in respect .o employ-

ment as a Security Officer I because of the age of Luis ©

A. Rodriguez individually and the age of all members

of the plaintiff class in violation of section 4(a)(1) of the

“Age Discrimination in Employment Act,” Act of De-

cember 15, 1967, Pub. L. 90-202, 81 Stat. 603, 29

U.S.C. §623(aX(1).

5. The plaintiff class and Luis A. Rodriguez indi-

vidually are entitled to injunctive relief.

A6

6. Luis A. Rodriguez is entitled to an award in ac-

cordance with section 7(b) of the “Age Discrimination

in Employment Act,” Act of December 15, 1967, Pub.

L. 90-202, 81 Stat. 603, 29 U.S.C. §626(b). The amount

owing as a result of the violation is deemed to be the

unpaid minimum wage of $11,275 per annum calcu-

lated from June 2, 1975 (the date the first person was

hired for the job subsequent to rejection of the applica-

tion of Luis A. Rodriguez), to August 12, 1976 (the date

of the entry of the award by oral order of the court).

7. The violation of the Act by the City of Philadel-

phia was willful.

8. Luis A. Rodriguez is entitled to liquidated dam-

ages in an amount equal to the award of the unpaid

minimum wage.

9. Luis A. Rodriguez, having proved the violation,

is not required to prove that “but for” the violation he

would have been hired in order to be entitled to an

award of money both as an “amount owing” to him and

as liquidated damages.

AND NOW, this 2nd day of September, 1976, in

accordance with findings of fact, conclusions of law,

decision and order of the court entered orally in open

court on August 12, 1976 at the conclusion of the trial

on the merits, and as supplemented by written findings

of fact and conclusions of law to be filed herewith, it is

ORDERED and DECREED as follows:

1. The refusal of the City of Philadelphia to

hire anyone as Security Officer I who is 41 years of

age or older, and to reject all applications for such

position by such persons on account of the age of

such applicants, and to prohibit such applicants

from taking the competitive examination for such

positions because of the age of such persons, vio-

lates the express provisions of 29 U.S.C.

§623(a)(1), being section 4(a)(1) of the Act of De-

cember 15, 1967, Pub. L. 90-202, 81 Stat. 603,

commonly called the “Age Discrimination in Em-

ployment Act.”

A7

2. The City of Philadelphia and the individual

defendants jointly and severally and in their offi-

cial capacities are permanently restrained and en-

joined from henceforth rejecting any application

and/or prohibiting any applicant from taking the

required competitive examination for the position

of Security Officer I with the City of Philadelphia

because of the age of any such applicant who is at

least 40 years old and less than 65 years old. This

shall not prevent establishment of bona fide job

related physical and mental qualifications and

tests based on standards other than age, nor pre-

vent age qualifications wherein the minimum age

is less than 40 years and the maximum age is 65

years or older.

3. Prior to the City of Philadelphia hiring any

additional person or persons as Security Officer I

(excepting only the named plaintiff, Luis A. Rod-

riguez, as hereinafter set forth), the City of Phila-

delphia shall:

(a) receive, during a reasonable period of

time, applications for the position of Security

Officer I;

(b) conduct a new competitive examina-

tion, containing no age qualification inconsis-

tent with this order; and

(c) give adequate and proper public no-

tice, including utilization of the local public

news media that applications will be received

and a competitive examination held, and that

no person, who is at least 40 years of age and .

less than 65 years shall be disqualified or

scored at a competitive disadvantage because

of age.

4. Luis A. Rodriguez shall be afforded the op-

portunity to take the examination for Security Of-

ficer I that was held in February, 1975, within 90

days from this date, the examination to be scored

A8

and the test or tests administered the same as if he

had been permitted to take the examination when

it was held in February, 1975, provided no score or

qualification solely because of age shall be calcu-

lated. Should he take the examination and receive

a score such that under the City of Philadelphia

procedures he would have been hired, except for

his age as a Security Officer I at sometime between

February, 1975 and August 12, 1976 in preference

to some other pf rson who was so hired, he shall be

forthwith hired as a Security Officer I, with senior-

ity and promotion rights, pension, retirement and

similar employee benefits retroactive to the date he

would have been hired, and with salary retroactive

to August 12, 1976.

5. Luis A. Rodriguez is awarded, in accord-

ance with section 7 of the Age Discrimination in

Employment Act, 29 U.S.C. §626(b) as the amount

owing to him as a result of the violation of said Act

by the City of Philadelphia, the sum of $13,768.70

(calculated on an annual minimum salary of

$11,275 from June 2, 1975 to August 12, 1976—

63% weeks at $216.83 per week), plus an equal

sum of $13,768.70 as liquidated damages for the

willful violation of the Act. Judgment shall forth-

with be entered in FAVOR of Luis A. Rodriguez

and AGAINST the City of Philadelphia in the sum

of Twenty-seven Thousand, Five Hundred Thirty-

seven Dollars and Forty Cents ($27,537.40).

6. Defendants shall pay the costs of this pro-

ceeding and counsel fees to plaintiff ’s counsel.

7. Jurisdiction of this action and over the par-

ties shall be retained for the purposes of enforcing

this order and to enter such further and additional

orders as may be appropriate.

BY THE COURT:

DONALD W. VANARTSDALEN

IN THE

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

Civil Action

Class Action

No. 75-1738

LUIS A. RODRIGUEZ, Plaintiff

v.

LEwIs S. TAYLOR, HILLEL S. LEVINSON, FRANK L. RIZZO

and

THE CITY OF PHILADELPHIA

A9

Al10

VAN ARTSDALEN, J. October 5, 1976

Judgment has been entered for injunctive relief for

the class, and injunctive relief and monetary damages

awarded to the class representative plaintiff in his in-

dividual capacity. Plaintiff ’s counsel has filed motion

for the award of counsel fees.

This action was brought against the City of Phila-

delphia for its violation of the Federal Age Discrimina-

tion in Employment Act, 29 U.S.C. §§621-634, by rea-

son of an imposition by the City of a 41 years-of-age

limitation on accepting applications for the position of

Security Officer I. The Act expressly provides for an

award of reasonable attorney’s fees to a successful

plaintiff, adopting by reference in 29 U.S.C. §626(b)

the provisions of the Fair Labor Standards Act of 1938,

29 U.S.C. §216(b). Thus, under Alyeska Pipeline Serv.

Co. v. Wilderness Society, 421 U.S. 240 (1975), attor-

ney’s fees may be properly awarded.

Plaintiff has submitted two affidavits in support of

the motion for counsel fees. Defendants do not dispute

the factual allegations of the affidavits. The affidavits

appear to set forth the relevant information that must

be taken into account in awarding counsel fees, under

the guidelines of Lindy Bros. Bldrs., Inc. of Philadel-

phia v. American Radiator and Standard Sanitary

Corp., 487 F.2d 161 (3d Cir. 1973). The affidavits

itemize the dates, hours, nature of work and services,

and identification of personnel that performed attorney

services on behalf of plaintiffs. Mr. Erba and his lawyer

assistant, Sheryl Dicker, and a law student, Ricardo

Cuevas, all of whom performed legal services for plain-

tiff in this litigation, are employees of Community

Legal Services, Inc. (CLS), a publicly funded agency

that provides civil legal services for certain qualified

indigent persons. One of the affidavits sets forth Mr.

Erba’s annual salary of $17,800.00 and Sheryl] Dicker’s

of $13,500.00. Ricardo Cuevas receives $150 per week

of which $10 per week is paid by CLS and $140 is paid

All

by the University of Pennsylvania under a “work-

study” program.

Although plaintiff's counsel suggests in the brief

that Brennan v. Ace Hardware Corp., 495 F.2d 368,

374 (8th Cir. 1974), and Hodgson v. First National

Savings and Loan Association, 455 F.2d 818, 820 (5th

Cir. 1972), indicate the propriety of an award of attor-

ney’s fees to the Department of Labor, I do not so inter-

pret those cases, which merely make passing reference

to the statutory language providing for attorney’s fees.

Neither counsel has cited any case directly on point as

to whether CLS is entitled to receive attorney’s fees. I

conclude that an award of such fees to CLS is appro-

priate.

The Act utilizes mandatory language. 29 U.S.C.

§216(b) states: “The court... shall . . . allow a reason-

able attorney’s fee. . . .” Thus the court would appear to

have no discretion to deny counsel fees. See Wright v.

Carrigg, 275 F. 2d 448 (4th Cir. 1960). Likewise, it is of

no moment that the plaintiff himself may not owe or

otherwise be obligated to pay counsel an attorney’s fee,

because the statute provides the attorney with a direct

interest. In Maddrix v. Dize, 153 F.2d 274, 276 (4th

Cir. 1946), the court stated:

There is no merit in the suggestion that the

present appeal must fall because the right to the

fee does not belong to the attorney but to the client

who in this case did not join in the petition for the

additional allowance. The Act endows the attorney

with a direct interest in the fee. . . .

There is no logical reason to lessen defendant’s

burden simply because an indigent plaintiff obtains

representation by an entity such as CLS. The extent of

defendant’s liability should not depend upon the ability

of plaintiff to hire private counsel. Because CLS is pub-

licly financed, reimbursement to it for the time and

Al2

effort its attorneys and staff expended in vindicating

the rights of plaintiff individually and the plaintiff

class is all the more compelling. By awarding reason-

able fees to CLS, its limited resources will be increased

to expand its present services, or conversely, the same

services may be rendered with less expenditure of pub-

lic funds. In either event the public benefits. and at no

greater expense to defendants than if plaintiffs had

privately retained an attorney.

This is not to suggest that CLS should engage in

litigation that by statute or otherwise is normally fee

generating. That is a delicate matter, not presently be-

fore me, for resolution between the private sector of the

bar and CLS. The record in no way suggests that CLS

failed to follow its routine procedures in attempting to

encourage private representation for plaintiff and the

plaintiff class. Private attorneys apparently lacked in-

terest. This alone evidences that plaintiff's counsel

undertook difficult litigation.

Because any award of attorney’s fees will go to

CLS, the amount to be awarded is more complicated

than if an award was to be made to a privately-retained

attorney. Should the award be strictly one of reim-

bursement for the salaries paid to the attorneys, or

should fees be awarded on the same basis as if the’

attorneys were in private practice? Without any case

law for guidance, I see no reason for applying a differ-

ent standard in awarding attorney’s fees to a quasi-

public legal services program such as CLS.

The Lindy Bros. case, supra, set forth the

guidelines for a district court in determining allowable

attorney’s fees. Those guidelines are:

1. Computation of hours spent by the attor-

neys; how many, in what mannexz, 2nd by whom.

2. Valuation of services rendered, including in

class actions an attempt to identify, if feasible, the

Al3

hours spent as those benefitting the individual

client, the unrepresented claimants, or both.

3. Fixing a reasonable hourly rate for time

spent, both as to personnel utilized and their ac-

tivities.

4. Consideration of the contingent nature of

success, i.e., whether there should be an increased

allowance to reflect the risk taken that there would

be no recovery.

5. Evaluating the services rendered in terms

of their quality.

These matters insofar as applicable will be sepa-

rately considered.

1. Hours spent.

The affidavits set forth that Mr. Erba spent 77

hours “office time” and 12 hours “court time.” Al-

though a different rate of hourly charge is often made

for “in court” as opposed to “office time.” I find no

practical reason to differentiate in this case. Possibly,

to some attorneys, “in court” time requires more undi-

vided concentration. To others, “in court” time in ac-

tual trial may be less tedious and no more difficult than

“office time.” Although a skilled trial attorney might

well feel entitled to charge a greater hourly rate for “in

court” time, I suspect the difference arises more from a

vague subconscious comparison with the British divi-

sion of legal services between barristers and solicitors.

Another reason for charging more for trial time may be

a genuine apprehension with which many extremely

capable lawyers face a court trial.

2. Valuation of services rendered.

The individual plaintiff was awarded $27,537.40

plus, by way of equitable relief, the possibility of being

employed in the future as a Security Officer I. The

plaintiff class will now be able to compete on an equal

Al4

basis with younger applicants for the position of Secu-

rity Officer I. Whether any of the plaintiff class will in

the future ever be employed is speculative, but assur-

ing the class members of their right to apply on an

equal footing is of concrete value to them, even though

such assurance cannot be monetarily valued.

3. A reasonable hourly rate or rates.

This, multiplied by the hours of work, appears to be

the “lodestar” of any fee determination. In many cases

this determination may easily be made, but where, as

here, the attorneys are employees of a quasi-public

agency, a reasonable hourly rate is difficult to compute

unless calculated on the sole basis of their salaries. Mr.

Erba’s annual salary is $17,800.00. Sheryl Dicker is

paid $13,500 per year. The law student receives $150

per week of which CLS pays $10 and $140 is paid by

the University of Pennsylvania under a work-study

program. Mr. Erba has four years’ experience with

CLS; Sheryl Dicker has one year’s experience.

The petition requests an hourly “in-court” rate for

Mr. Erba of $80 and “out-of-court” rate of $50.00; a

rate of $30 per hour for Sheryl Dicker, and $15 per hour

for the law student.' These amounts appear to be ex-

cessive considering (a) the experience of the attorneys,

(b) their annual salaries, and (c) comparable attorney’s

compensation.

By way of analogy, Congress has provided a pay

scale for attorneys appointed under the Criminal Jus-

tice Act to represent indigent defendants in criminal

cases and certain other similar proceedings. 18 U.S.C.

1. Simple arithmetic shows that if one works a normal 40 hour |

work week, 50 weeks of the year, the yearly hours of work is 2,000.

At $80 per hour an attorney’s annual gross income would be

$160,000.00. At $50 per hour, $100,000 and at $30 per hour,

$60,000.00. Any of these figures is far above the actual salaries of

the attorneys in this case, even allowing for “overhead” expenses

that a private attorney would have to pay out of his gross income.

a.

- —Siage ~~. ee =

Al5

§3006A. The rate is $30 per hour “in-court” and $20 per

hour “out-of-court” with certain maximum limitations

that are flexible.* The only qualification is that the ap-

pointed lawyers be admitted to the bar. The rates of pay

are applicable to private attorneys, as well as “bar as-

sociations”, “legal aid agencies,” and “community de-

fender organizations” that supply representation for

indigents. Considering the actual salaries received by

the attorneys in this case, the “public interest” nature

of the work of CLS and the difficulty of the present

litigation, I believe the rates provided by Congress

under the Criminal Justice Act to be a fair guide, bear-

ing in mind that the rate was last established in 1974,

approximately two years ago.

4. The contingent nature of success.

Based solely on the initial admitted facts, the City,

superficially at least, appeared to have been in clear

violation of the express terms of the Act. Nevertheless,

that portion of the private bar that was contacted was

apparently uninterested in undertaking the case, de-

spite the statutory provision for counsel fees in the

event of success. This lack of interest may have been

due to a variety of factors, but most likely was because

of potential problems of litigation in that the prospects

of such being “profitable” to a lawyer were less than

attractive. Viewed prospectively, however, at the time

litigation was instituted, I would have to conclude that

the “contingent nature of success” was extremely fa-

vorable for obtaining injunctive relief. The prospects of

obtaining a substantial monetary award, however,

were far less favorable because of uncertain issues as

to the measure of damages, which issues are presently

on appeal.

2. Of passing interest, based on a 40 hour week, 50 weeks per

year, Congress may be said to have established an “hourly rate of

pay” for district judges of $21 per hour, and slightly higher rates for

Circuit Court Judges and Justices of the Supreme Court.

Al6

5. The quality of the attorney’s work.

The quality of the attorney’s work was good, and

the results to the individual plaintiff and the class

plaintiffs, excellent. Nevertheless, the litigation did

not involve difficult trial preparation, nor complex

legal issues. Thus, the litigation was such that the

quality of the attorney’s work could be categorized as

neither requiring nor being of any greater or lesser de-

gree of skill and diligence than that of normally compe-

tent Philadelphia lawyers.

The petition seeks compensation as attorney’s fees

for the services of the law student. Even if it be con-

ceded that the services rendered were of the type nor-

mally performed by attorneys, and, if they had been

performed by attorneys, would be allowable as attor-

ney’s fees, I know of no basis for awarding a monetary

sum as attorney’s fees for services rendered by a non-

lawyer. Whether services rendered by a law student

might be claimed as “costs” is not before me. If a

lawyer, who hires a law student, is entitled to claim

attorney’s fees for the law student’s work, logically a

claim could be made for the so-called “paralegals,” and

also the skilled legal secretary, who may draft plead-

ings or otherwise perform other legal-related functions.

A private attorney, who is allowed attorney’s fees, or-

dinarily receives a substantial rate of pay in order to

cover the expenses of running a law office, including

the employment of capable assistants as well as regu-

lar office overhead. The same principle, it seems to me,

should apply in making an award in this case, which in

reality will go to CLS.

Taking the foregoing factors into consideration,

based upon the affidavits showing that Mr. Erba and

Sheryl Dicker spent a total of 94 hours including both

“in-court” and “out-of-court” time, an award of counsel

fees of $2,820 will be made. This is based on an aver-

age hourly rate of $30.00 neither adding nor deducting

———— ee ee ST

Al7

for the other factors considered as they appear to bal-

ance out equally on the plus and minus side.

AND NOW, this 5th day of October, 1976, the de-

fendants are hereby ORDERED to pay to Community

Legal Services, Inc., as counsel fees for ‘cannes the

sum of $2,820.00.

BY THE COURT:

/S/

DONALD W. VAN ARTSDALEN

A19

UNITED STATES COURT OF APPEALS

For tae Turmp Circuit

Nos. 76-2609, 76-2610 & 76-2611

LUIS A. RODRIGUEZ, On behalf of Himself and All other

persons similarly situated

v.

LEWIS 8S. TAYLOR, Individually and in his official

capacity as Director of Personnel of the City of Phila-

delphia :

HILLEL 8S. LEVINSON, Individually and in his official

capacity as Managing Director of the City of Phila-

delphia

FRANK L. RIZZO, Individually and in his official capacity

as Mayor of the City of Philadelphia and THE CITY

OF PHILADELPHIA

LUIS A. RODRIGUEZ, On behalf of Himself and

All other persons similarly situated,

Appellant in No. 76-2609

LEWIS S. TAYLOR, Individually and in his offi-

cial capacity as Director of Personnel of the City

of Philadelphia

HILLEL 8S. LEVINSON, Individually and in his

official capacity as Managing Director of the City

of Philadelphia

FRANK L. RIZZO, Individually and in his official

capacity as Mayor of the City of Philadelphia and

THE CITY OF PHILADELPHIA

Appellants in Nos. 76-2610 & 76-2611

(D.C. Civil No. 75-1738)

Apprat From tHe Usrrep States District Court ror THE

Easterns District or Pexxsy.vania

A20

Argued September 9, 1977

Before Apams, Van Dusen and Hunter, Circuit Judges

Andrew F. Erba, Esq. &

Shery] Dicker, Esq.,

Community Legal Services, Inc.,

Philadelphia, Pa.,

Attorneys for Appellant in No.

76-2609 & Appellee in Nos. 76-2610

& 76-2611

Tyler E. Wren, Esq., Assistant City

Solicitor ;

James M. Penny, Jr., Esq., Assistant

City Solicitor ;

Sheldon L. Albert, Esq., City Solicitor ;

Philadelphia, Pa.,

Attorneys for Appellants in Nos.

76-2610 & 76-2611 and Appellee in

No. 76-2609

OPINION OF THE COURT

(Filed December 27, 1977)

Van Dusen, Circuit Judge.

This appeal raises diverse issues resulting from a dis-

trict court award of back pay, liquidated damages and at-

torneys’ fees to a plaintiff who successfully proved that the

City of Philadelphia violated the Age Discrimination in

Employment Act of 1967, 29 U.S.C. §§ 621-634 (1970 &

Supp. IV 1974) (ADEA). We affirm in part and reverse

in part the district court’s award of monetary relief and

attorneys’ fees. fo

\

=

A21

L

Plaintiff, Luis Rodriguez, then age 46, applied on De-

cember 23, 1974, to the City of Philadelphia to take the

competitive Civil Service examination for the position of

Security Officer I. One month later, the City’s Personnel

Department informed Mr. Rodriguez that he could not sit

for the examination because he was overage. Since 1966,

the City of Philadelphia had adhered to a personnel policy

requiring that applicants for the position of Security Of-

ficer I be less than 41 years of age in order to be eligible

to take the requisite competitive examination.’ Impelled

by his rejection, and having exhausted federal and state

administrative remedies, Mr. Rodriguez brought suit on

behalf of himself and all other persons over the age of 41

against the City of Philadelphia (City) in the Eastern Dis-

trict of Pennsylvania. The gist of plaintiff’s complaint

alleged that the City’s inflexible maximium age require-

ment for Security Officer I applicants violated the Age

Discrimination in Employment Act of 1967, 29 U.S.C.

$$ 621-634 (1970 & Supp. IV 1974). The complaint sought

class relief in the nature of a permanent injunction pro-

scribing enforcement of the City’s age limit and individual

relief for Mr. Rodriguez in the form of an opportunity to

take the competitive examination and an entitlement to

recovery of pecuniary losses.’

The district court certified the class pursuant to Rule

23(b)(2) and, after a non-jury trial, concluded that the

wages,

retroactive benefits and seniority” (clause . 12a). The complaint

fit and proper (clause f, p. 13a).

A22

City’s policy of barring persons over the age of 41 from

taking the competitive examination for the job of Security

Officer I violated § 4(a)(1) of the ADEA, 29 U.S.C. § 623

(a)(1), and was not a bona fide occupational qualification,

see 29 U.S.C. § 623(f)(1). Accordingly, the district court

ordered the requested class injunctive relief * but did not

order any monetary relief to the class members other than

the named plaintiff. Also, it granted the plaintiff an op-

portunity to take the examination he would have taken had

he not been disqualified on the basis of his age. Were the

plaintiff to score high enough to have been hired, but for

his age, sometime between his original application and the

time of trial, a period of one year and a half, he would

have been entitled to the position of Security Officer I with

full retroactive benefits. Whether or not Mr. Rodriguez

proved to be successful on the exam, the district court

awarded him, under §7(b) of ADEA, 29 U.S.C. § 626(b),

amounts owing as unpaid wages for the period between the

date the first applicant was hired subsequent to the

plaintiff’s rejection and the date the final order was issued.

The district court further ruled that because the City’s

violation was willful, the plaintiff was entitled to liquidated

damages in the amount of the calculated unpaid minimum

wages, see 29 U.S.C. § 626(b).° The district court ruled

that the plaintiff, ‘‘having proved the violation, is not re-

quired to prove that ‘but for’ the violation he would have

been hired in order to be entitled to an award of money

both as an ‘amount owing’ to him and as liquidated dam-

ages’’ (119a). In a subsequent memorandum opinion of

October 5, 1976, the district court awarded plaintiff’s coun-

sel, Community Legal Services, Inc., $2,820. in attorneys’

fees.

4. The district judge supplemented his injunction barring enforcement of

the age requirement by ordering certain corrective measures designed to pub-

licize his order and to encourage middle-aged persons to sit for a new examina-

tion to be held to fill subsequent vacancies.

5. In describing his formula for calculating the back pay award, the district

judge made no provision for offsetting any wages earned in the interim period

tween the rejection of plaintiff's application and trial.

_

A23

The City has taken no appeal from the district court’s

conclusions of law that the personnel policy erecting age

as a barrier to application for the position of Security Of-

ficer I willfully violated the ADEA and was not saved as

a bona fide occupational qualification. Thus, for purposes

of this appeal, the City stands as an undisputed willful

violator of the ADEA, both with respect to the plaintiff,

Luis Rodriguez, and the class of persons over age 41 which

he represented. The City in this appeal challenges only

certain aspects of the individual relief ordered by the dis-

trict court.* The City contends that Mr. Rodriguez did not

suffer pecuniary losses as a result of its discriminatory re-

fusal to administer the employment examination and, there-

fore, he was not entitled to an unconditional award of

unpaid wages or liquidated damages. The City also con-

tends that the district court erred in not reducing the plain-

tiff’s monetary award to account for wages he earned from

other sources during the interim period for which back

pay was calculated.

Furthermore, the City also appeals that portion of the

district court’s order entitling Mr. Rodriguez to be hired

as a Security Officer I solely on the basis of his written

examination performance. The City urges that the plain-

tiff’s hiring should have been made contingent on his satis-

faction of preexisting physical requirements for employ-

ment as a Security Officer I. Finally, the City maintains

that the district court erred in awarding attorneys’ fees

under the ADEA to plaintiff’s counsel, Community Legal

Services. The plaintiff, while disputing all the grounds of

appeal advanced by the City, has cross-appealed the calcu-

lation of attorneys’ fees. The plaintiff contends that the

district court employed incorrect standards in calculating ©

6. The City has not a the prospective non-monetary injunctive relief

oumk aca In light of its acquiescence, we pretermit consideration of

the City’s assertion that under the ADEA class actions may only be maintained

if class members affirmatively “opt in” in contrast to the Federal Rules of

Civil Procedure Rule 23(c) “opt out” provision. See appellant's brief at p. 5,

nl.

A24 A

the reasonable value of his attorneys’ time devoted to this

litigation.

At oral argument it was revealed that pursuant to the

district court’s order, Mr. Rodriguez was administered the

competitive written examination for the job of Security

Officer I, but that he failed to score high enough to have

been hired during the time between rejection of his applica-

tion and trial.’ Mr. Rodriguez’s examination failure moots

the City’s contention that he should not be hired without

also passing a physical examination.’ In view of Mr. Rod-

riguez’s failure on the civil service exam, the district court’s

order will enable him to collect unpaid wages for a job for

which he may have been unqualified on grounds other than

his age. For the reasons stated below, we hold that the

district court did not err in awarding both back pay and

liquidated damages to Mr. Rodriguez. However, we con-

clude that the district court did err in not setting off wages

earned during the same period for which back pay was

calculated. Thus, we remand for a recalculation of the

monetary relief accorded Mr. Rodriguez. The district

court similarly erred in the manner in which it calculated

attorneys’ fees which we hold Community Legal Services

is entitled to under the mandatory attorneys’ fees award

9. The district court assessed liquidated : in an amount equal to the

underlying award of unpaid wages. Thus, insofar as the district court on

compe ae ease Se See fay Guard ty Sng 6S Steen ean Ce

equivalent liquidated damages penalty must be likewise reduced.

A25

I.

The Age Discrimination in Employment Act of 1967

was enacted to ensure that employers base their hiring de-

cisions on expectations of individuals’ job performance

rather than on unwarranted irrebuttable presumptions that

all persons of a certain age less than 65 would be unable to

satisfactorily perform a given job. Age became a pro-

scribed basis for employment decisions in much the same

manner as Title VII of the 1964 Civil Rights Act, 42 U.S.C.

§$§ 2000e e¢ seg. (1970 & Supp. IV 1974), had earlier pro-

hibited employment discrimination on the basis of other

immutable personal characteristics such as race, color, re-

ligion, sex or national origin. Age concededly differs from

the Title VII classifications in that, for some jobs, statis-

tically significant correlations might demonstrate that per-

sons above certain middle ages are inherently disabled

from performing as satisfactorily as their younger counter-

parts. Congress recognized the likelihood of legitimate

connections between age and ability and saved from its

statutory strictures employment decisions ‘‘where age is a

bona fide occupational qualification reasonably necessary

to the formal operation of the. particular business ... ,’’

§4(f) of the ADEA, 29 U.S.C. § 623(f) (1970).

At trial, the plaintiff presented uncontroverted evi-

dence that the City had established an absolute age limit

of 41 for applicants for the position of Security Officer I.

The plaintiff’s evidence conclusively proved that his ap-

plication for such a job had been rejected solely on the

basis of his overage. Moreover, the City presented at trial

no evidence indicating that Mr. Rodriguez was in any way

unqualified for a job as a security guard or that there had

not been vacancies which he might have filled. The City’s

evidence that its maximum age limit was a bona fide oc-

cupational qualification was found wanting by the district

court and is not reiterated on appeal. Thus, the posture of

plaintiff’s suit as it stands before this court is that the

City has committed a willful per se violation of the ADEA,

A26

see Houghton v. McDonnell Douglas Corp., 553 F.2d 561

(8th Cir.) cert. denied, 46 U.S.L.W. 3354 (Nov. 28, 1977).

Notwithstanding its indisputable liability, the City now

claims that the district court’s grant of legal relief to Mr.

Rodriguez was unauthorized by statute.

A.

Relief available to victims of unlawful age discrimina-

tion is governed by §7 of the ADEA, 29 U.S.C. § 626

(1970), in conjunction with its incorporated enforcement

provisions of the Fair Labor Standards Act (FLSA). See

29 U.S.C. §626(b), tmcorporating 29 U.S.C. §§ 211(b),

216(b), 216(c), 217, 626(b), 626(c). The FLSA makes ac-

tionable employer violations of minimum wage and maxi-

mum hour laws and entitles aggrieved employees to re-

cover ‘‘unpaid minimum wages”’ or ‘‘ unpaid overtime com-

pensation,’’ as well as an equal amount of mandatory

‘*liquidated damages.’’ 29 U.S.C. § 216(b) (1970). Viola-

tions of the ADEA do not typically involve an employer’s

failure to pay minimum or overtime wages. A discrimina-

tory refusal to hire or promote workers on the basis of

age is likely to result in monetary damages less precisely

measurable. Section 7(b) of the ADEA defines available

monetary relief only in terms of ‘‘amounts owing to a per-

son as a result of a violation of this chapter.’’ Such

amounts ‘‘shall be enforced’’ as are unpaid minimum wages

and unpaid overtime compensation under the FLSA en-

forcement provisions incorporated by reference. See 29

U.S.C. § 626(b). Liquidated damages under the ADEA are

available only in case of ‘‘ willful violations’’ of the statute.

In addition, §7(b) empowers the courts to grant such

‘*legal or equitable relief as may be appropriate to ef-

fectuate the purposes of this chapter, including without

limitation judgments compelling employment, reinstatement

or promotion, or enforcing the liability for amounts deemed

to be unpaid minimum wages or unpaid overtime compen-

sation under this section.’’

A27

The ‘‘amounts owing’’ to a victim of age discrimina-

tion are not further defined by statute. Thus, the scope of

pecuniary relief available under the ADEA must be ascer-

tained from examination of the whole statutory scheme.

Damage standards should effectuate the purposes of anti-

discrimination statutes. See generally Rogers v. Exxon

Research & Engineering Co., 550 F.2d 834, 839-42 (3d Cir.

1977).

Monetary awards exacted from employers who practice

unlawful discrimination serve two primary functions.

First, the prospect of economic penalties more certainly

deters illegal employment practice than does exposure to

injunctive relief or prospective equitable remedies such as

reinstatement. Second, economic exactions recompense in-

dividuals for injuries inflicted by employers’ discriminatory

conduct. These prophylactic and compensatory purposes

are the basis of most recent anti-employment discrimina-

tion legislation, including the ADEA and Title VII. See

Albemarle Paper Co. v. Moody, 422 U.S. 405, 417-21

(1975); H.R. Rep. No. 805, 90th Cong., Ist Sess. 2 (1967).

Thus, the Supreme Court’s mandate on the exercise of trial

court’s discretion in granting monetary relief in Title VII

suits, as stated in Albemarle, supra, is equally compelling

in the context of ADEA actions:

‘*(G]Jiven a finding of unlawful discrimination, back

pay should be denied only for reasons which, if applied

generally, would not frustrate the central statutory

purposes of eradicating discrimination throughout the

economy and making persons whole for injuries suf-

fered through past discrimination.’’

422 U.S. at 421.

The make whole standard of relief should be the touch-

stone for the district courts in fashioning both legal and

equitable remedies in age discrimination cases. Victims of

discrimination are entitled to be restored to the economic

position they would have occupied but for the intervening

A28

unlawful conduct of employers. See Franks v. Bowman

Transportation Co., 424 U.S. 747, 763-64 (1976) (Title VII

standard). The difficulty arises in applying the concepts

of a make whole restorative remedy and, but for causation,

to facts developed in particular cases. Trial courts and

the parties themselves invariably lack perfect hindsight to

forecast what would have happened had there been no

unlawful acts. Even in those cases where a retrospective

fact finder can” confidently determine where a plaintiff

would have stood had there been no discrimination, the

plaintiff is subjected, for often long periods of time prior

to trial, to burdensome uncertainty.

For example, in the case at hand, Mr. Rodriguez did

not and could not have known at the time of his application

whether he would have obtained a job as Security Officer I

had the City not unlawfully rejected his application. The

City might have immediately discovered Mr. Rodriguez’s

true qualifications had they simply administered the ex-

amination prior to trial, thereby adducing direct evidence

on Mr. Rodriguez’s ability to perform the job of a security

guard. Even by the time of trial, the parties had no evi-

dence that Mr. Rodriguez was unqualified on grounds other

than age. Given what the trial court did know on the basis

of evidence introduced at trial, a dispositive issue on

appeal is. whether the trial court erred in awarding Mr.

Rodriguez back pay unconditioned by his future perform-

ance on a competitive, written examination.

Resolution of this focal issue requires examination of

the substantive and evidentiary rules governing retro-

spective compensatory relief. A substantive rule requiring

recipients of back pay to have been able to satisfy all prior

job qualifications except unlawful age standards is con-

sistent with commonly understood meanings of make whole

relief and but for causation. If an applicant would not

have been hired because of a legitimate disqualification,

then any lost wages are not properly attributable to unlaw-

epee ——

A29

ful age discrimination.” Consistent application of such a

substantive rule in the context of diverse employment dis-

crimination cases requires careful allocations of the evi-

dentiary burdens of proof. Evidence of what might have

happened will often be incomplete or in dispute.

In civil litigation generally, the plaintiff must present

a quantum of evidence sufficient to withstand a defense

motion for a directed verdict." On those basic facts crucial

to the plaintiff’s case, he or she is said to bear the burden

of production or of going forward.” The operation of

presumptions in conjunction with burdens of production

to implement substantive rules of law is especially prom-

inent in the context of establishing liability for employment

discrimination. To facilitate enforcement of Title VII and

ADEA, courts have recognized certain presumptions and

production burdens which have influenced the development

of liability rules."* Recognition of evidentiary presump-

tions and burdens of proof will similarly clarify standards

for the measurement of damages in ADEA actions.

In order to establish an employer’s liability, Title VII

plaintiffs, as an initial matter, need only present a prima

facie case of employment discrimination. Plaintiffs satisfy

their burden of production if they show that they are mem-

bers of a protected class and that they were rejected for

job vacancies for which they were qualified. Plaintiffs need

not submit proof that a discriminatory motive underlay

an employer’s decisions. The burden of production then

shifts to the defendant to adduce evidence of non-discrim-

inatory motivation. See McDonnell Douglas Corp. v.

Green, 411 U.S. 792, 800-03 (1973) ; Ostapowicz v. Johnson

Bronze Co., 541 F.2d 394, 399-400 (3d Cir. 1976); Baxter v.

10. See Stewart v. General Motors Corp., 542 F.2d 445, 451-53 (7th Cir.

1976) ; Brennan v. Ace yy ~ Corp., 495 F.2d 368, 373-74 (8th Cir. 1974) ;

Baxter «. Savannah Sugar Corp., 495 F.2d 437, 443-45 (Sth Cir.),

cert. denied, 419 U.S. 1033 ds 44).

onl 6. McCormick, Handbook on the Law of Evidence, §§ 337, 338 (2d ed.

12. See authorities cited at 90 Harv. L. Rev. at 389 n.53.

13. See Note, The Age in Employment Act of 1967, 9

Harv. L. Rev. 380, 388-99 (1976).

A30

Savannah Sugar Refining Corp., 495 F.2d 437, 443-45 (5th

Cir.), cert. denied, 419 U.S. 1033 (1974). Absent such

rebuttal evidence, courts presume unlawful discriminatory

purpose. Moreover, if an employer produces evidence of

a non-discriminatory reason for an employment decision, he

may bear the burden of persuasion on that ultimate issue.

Thus, under Title VII the courts have developed a set of

shifting evidentiary burdens and presumptions that facili-

tates proof of employer’s liability. See Intnt’l B’hood of

Teamsters v. United States, 431 U.S. 324, 357-62 & nn.44-

46 (1977).

Under the ADEA also plaintiffs are held to a produc-

tion burden of presenting only a prima facie case of age

discrimination. See, e.g., Hodgson v. First Federal Sav.

é Loan Ass’n, 455 F.2d 818 (5th Cir. 1972). On presenta-

tion of a prima facie case, the burden of production shifts

to the employer to justify differential treatment of older

workers on a basis other than age.“* Thus, liability under

ADEA is enforced by means of evidentiary rules facilitat-

ing plaintiff’s proof of an employer’s discriminatory pur-

pose.

The case at hand advances us beyond proven liability to

the matter of evidentiary rules for the individualized relief

phase of ADEA actions. Just as with the underlying li-

ability determination, the twin objectives of monetary relief

—deterring discrimination and making victims of discrim-

14. The majority of circuits have construed the Green case as shifting the

capten ot cue) & So See eee eS ee ee

facie case of em t discrimination. See, ‘o. Cae

leheoes Beemer Go. $41 F.2d 394, 399 (3d Cir. 1976); J °. Goodyear

i © nee 491 F.2d 1364, 1380 (Sth Cir. 1 4); Gates v. Georgi

Corp. | 492 F.2d 292, 295-96 (9th Cir. 1974) ; Vulcan Soc’y of the

City ire Dept. v. Civil Serv. Comm'n of New Fhe 500, 905-08 F.2d 387, 393

ir. 1974) ; Gilliam v. +. of Omaha, 388 F. Soon. See, 508 (De way aff'd,

524 F.2d 1013 (8th Cir. 1975).

paint yoy « EB the et of aK. S if condiainn equivocal

tuft or t or

gy pe mw yrip - + ay te tig Compare Hodgson

Soe He, Se, © See ee Se ee Cir. 1972) (burden

shifts to employer), with Laugesen v. Anaconda Co., 510 F.2d 307, 3 (6th

Cir. 1975). See also Note, supra note 13, at 390-99.

A31

ination whole—are furthered by judicial recognition of evi-

dentiary presumptions and burdens of proof designed to

resolve uncertainties in favor of the aggrieved employee

or applicant. Thus, we hold, in view of this record which

inter alia awards back pay only to an individual plaintiff,

not to a class of numerous applicants, that an employee

who has prevailed in proving that an employer committed

a per se violation of the ADEA shoulders the initial burden

of production to present a prima facie case of entitlement

to damages. This burden is discharged upon a showing

that at the time of the unlawful discrimination (1) va-

cancies existed from which plaintiff was impermissibly

excluded, and (2) that the plaintiff possessed physical and

mental capabilities generally required of employees per-

forming the type of work for which he applied. Upon such

a showing, the burdens of production and persuasion shift

to the employer to prove that the plaintiff would not have

been hired even absent discriminatory age barriers. The

defendant must, therefore, adduce evidence of either no

job vacancies or plaintiff’s lack of qualifications for the

particular job.**

Mr. Rodriguez presented evidence at trial of existing

vacancies for the job of Security Officer I that were filled

by other applicants hired subsequent to his rejection. Mr.

Rodriguez was also portrayed to the district court as a man

generally qualified to perform security guard tasks. He

had occupied similar positions both before and after his

rejected application to the City. The trial court found Mr.

Rodriguez sound of body and mind. Findings of Fact #9,

district court opinion reprinted at 115a. On the trial record

as a whole, we conclude that Mr. Rodriguez satisfied his

16. Our 2 ee oe Ss a ae

A32

burden of production and proved a prima facie case of

entitlement to damages. Moreover, there is no evidence

on the record that the City rebutted plaintiff’s prima facie

case with proof of either Mr. Rodriguez’s disqualifying

mental attributes or his inability to pass any City examina-

tion. The City, with its silence in the face of plaintiff’s

prima facie case, simply did not meet its burden of rebut-

tal on the issue of whether Mr. Rodriguez would have been

hired as a Security Officer but for the unlawful age dis-

crimination. Thus, the district court did not err in its

allocation of evidentiary burdens, nor did it err in conclud-

ing that plaintiff had proven his entitlement to a back pay

award.”’

The City might well have satisfied its burden of pro-

duction and conclusively settled the ultimate issue of Mr.

Rodriguez’s qualifications had they only administered to

him the written civil service exam prior to trial. Instead,

the City failed to promptly administer the written exam

precluding development of material evidence on this issue

until after trial. The importance of requiring employers

to adhere to their evidentiary burdens at trial is under-

scored by consideration of the consequences of delaying

final determinations of Mr. Rodriguez’s back pay award

until the exam was taken.

During the period between the discriminatory employ-

ment decision and trial, Mr. Rodriguez faced considerable

uncertainty as to whether he would eventually be adjudged

entitled to back pay and/or future employment. Where a

rejected job applicant, such as Mr. Rodriguez, was reason-

ably certain that an employer discriminated against him or

her on the basis of age alone, that employee would have a

reasonable expectation of subsequent vindication and re-

A33

lief. The applicant would be deterred from seeking interim

employment or a more permanent position lest it interfere

with his opportunity to gain the preferred job from which

he was unlawfully rejected. Significantly, making future

employment conditioned on current qualifications does not

place so harsh a burden of uncertainty on the discrimi-

nated against applicant. After Mr. Rodriguez failed to

pass the court-ordered exam, he could freely seek other fu-

ture employment without sacrifice of opportunities. But

for the interim period prior to trial, Mr. Rodriguez cannot

now make up his lost, past opportunity to seek alternative

employment. Had the City administered and graded the

exam shortly after his application, and had the results been

the same, Mr. Rodriguez could have more determinedly

pursued other employment.’™

We do not advocate that courts attempt to measure the

Rogers v. Exxon Research & Engineering Co., 550 F.2d 834,

839-42 (3d Cir. 1977). However, compensatory relief as

measured solely by lost wages should be awarded pursuant

to rules and procedures which reflect and minimize the

burdens of uncertainty. On the facts of this case, involving

a damage award to an individual applicant, rather than to

a class, requiring the defendant employer to come forward

with evidence at trial of specific factors, such as low test

scores, which would have disqualified an applicant irre-

A34

spective of discrimination best effectuates the restorative

principle of make whole relief.’*

Our recognition of a prima facie case for entitlement

to back pay conforms to the Supreme Court’s recent ex-

plications of evidentiary presumptions and burdens of

proof governing individual claims for retroactvie seniority

relief in Title VII actions. In Franks v. Bowman Trans-

portation Co., 424 U.S. 747 (1976), the Court considered

whether individual unnamed members of the class of black

non-employee applicants for positions as over-the-road

(OTR) truck drivers could be awarded retroactive seniority

on proof that the employer engaged in a pattern of dis-

criminatory hiring practices violative of Title VII."* The

district court had denied seniority benefits claims to the

class because ‘‘such claims ‘presuppose a vacancy, quali-

fication and performance by every member. There is no

evidence on which to base these multiple conclusions

....’?? Id, at 772. The Court ruled that such concern

should not bar relief to the entire class but would be

18. Further factors militating in favor of a prima facie entitlement to back

pay concerns the nature of proof of an applicant's qualifications. In the instant

case, the City wished to rely on a civil service exam from which an applicant’s

could be —-, marked and measured against competitors.

Other employers might inister more subjectively exams. The more

subjective an evaluation is, the greater is the need for an employer to come

forward with it at trial. Such evaluations may provoke challenges by the

a. which should be resolved at trial rather than at a second proceeding.

oreover, challenges to the legitimacy of employment tests are also facilitated

by evidentiary rules which require all relevant evidence to be developed at an

initial trial, rather than in a we proceeding, which would merely pro-

tract the applicant’s uncertainty. Finally, in other cases the interval of time

between application and trial may be so as to cast doubts on the equiva-

lence of testing periods. Where time may dissipate an individual's chances of

scoring highly on an exam, evidentiary rules may beneficially encourage em-

ployers to administer exams promptly despite age barriers.

19. The district court had permanently enjoined the employer and certain

labor unions from perpetuating discriminatory practices found to exist. The

district court had refused to award any individual legal relief to unnamed

members of the class. The court of appeals reversed in part, holding that

back pay could be awarded to members of the te classes of non-employee

applicants and employee applicants denied transfer to OTR jobs. Franks v.

Bowman Transportation Co., 495 F.2d 398 (Sth Cir. 1974). The court of

appeals also authorized the award of retroactive — to members of the

class of emp who sought transfer but not to individual non-employee

applicants for OTR positions. The Supreme Court reviewed only the claim by

— a ~~ a the class of non-employees black applicants for retroactive

seniority relief.

A35

material to individual claims for relief. After noting that

the make-whole objective of Title VII should govern the

trial court’s discretion in awarding legal relief, id. at

762-66, the Court allocated the requisite burdens of pro-

duction in cases where individual class members seek retro-

active seniority:

‘*[P]etitioners [non-employee applicants] here have

carried their burden of demonstrating the existence of

a discriminatory hiring pattern and practice by the re-

spondents [employer] and, therefore, the burden will

be upon respondents [employer] to prove that indi-

viduals who reapply were not in fact victims of pre-

vious hiring discrimination.’’

Id. at 772 (citations omitted).

Finally, the Court emphasizei that the employer, to

defeat individual claims for -elief, would bear the burden

of proof on the lack of vacancies and an ‘‘individual’s lack

of qualification . . . under nondiscriminatory standards

actually applied to individuals who were in fact hired.’’

Id. at 773 n.32 (emphasis in original).”

In International Brotherhood of Teamsters v. United

States, 431 U.S. 324, 357-62 (1977), the Supreme Court re-

iterated that the evidentiary rules prescribed in Franks

created a rebuttable presumption that individual members

of a class subjected to a pattern of discriminatory hiring

practices are entitled to relief. In Teamsters, the Court

justified the presumption in favor of individual relief on

the ground that the employer stood as a ‘‘prove . wrong-

doer’’ and controlled access to proof of matters such as an

applicant’s qualifications. See id. at 359 n.45. Thus, the

thrust of the Supreme Court's Title VII cases is to shift

20. The Court did not distinguish between shifting the burdens of produc-

tion or persuasion. At the least, the Court meant to shift the former.

an s tions

the In this

its burden coming forward at trial with any evidence

i

Bi

A36

the burden of production to defendants-employers on the

issue of what would have happened to job applicants had

there been no discriminatory employment practices. Our

holding, applicable in ADEA actions, creates a similar re-

buttable presumption by shifting to employers the burden

of production ef evidence of an individual’s lack of quali-

fications in cases where victims of proven discrimination

seek retroactive relief.”

B.

Having determined that Mr. Rodriguez is entitled to a

back pay award, it is necessary to consider a further ob-

jection raised by the City to the manner in which the

award was calculated. The City contends that the district

court erred in not setting off against unpaid wages amounts

Mr. Rodriguez earned from other employment. The dis-

trict court’s findings of fact and trial testimony indicate

that Mr. Rodriguez worked part-time for his local parish

and irregularly as a self-employed private security guard

during the interim period for which back pay was cal-

culated (9, 115a; 54a-56a). Yet the district court did not

subtract from its calculation of back pay the income Mr.

Rodriguez earned from his part-time jobs.”

Reiterating the principle of make-whoie relief, a victim

of employment discrimination is entitled to be restored to

the economic position he would have occupied but for the

unlawful discrimination. The only provision in ADEA

authorizing more favorable pecuniary relief stipulates

liquidated damages be calculated on the basis of the under-

lying compensatory award in the event of a willful viola-

where siniariysitanted plaints sock fortard locking equicbte reel Orders

for reinstatement or hiring are of on-going consequence to both employee and

employer and involve more than making a victim of discrimination whole for

district court made no finding as to the amount Mr. Rodriguez

interim period. Nor did the court express a conclusion of

off to the back pay award was inaprosite.

A37

tion. By not setting off Mr. Rodriguez’s earnings during

the interim period, the district court’s order affords him

income from two jobs that he could not have simultaneously

performed. Thus, the plaintiff was placed in a better

economic position than he would have achieved had he not

been discriminated against in the first place.

Plaintiff contends that Congress did not contemplate

set-offs to ADEA back pay awards. He points to Title

VII’s back pay provision, which expressly requires that

interim earnings be set off against back pay otherwise

owing. 42 U.S.C. § 2000e-5(g) (1970). By contrast, the

ADEA enforcement provisions do not explicitly mandate

such a set-off. It is true that we have stated that the ADEA

and Title VII are not to be read as providing wholly con-

sistent enforcement provisions. Rogers v. Exxon Research

& Engimeering Co., 550 F.2d 834, 840 n.10 (1977). How-

ever, the absence of express set-off language in the ADEA

enforcement provisions does not compel the inference that

Congress intended to preclude set-offs. The make-whole

relief objective is common to both Title VII and ADEA

awards have a set off of at least income

ane. See EEOC v. Detroit Edison Co., 51S F.2d 301,

315 (6th Cir. 1975) ; sen v. Anaconda Co., 510 F.2d 307, 317-18 (6th Cir

ict court Title VII award formula which factored

a set off a, oe Ostapowics v. Johnson Bronze Co.,

A38

We hold that rejected job applicants who prevail under

ADEA are entitled to back pay in the amounts they would

have earned but for the discrimination, less wages actually

earned from other employment that could not have been

simultaneously performed with the jobs to which they

aspired. Defendant-employers must assume the burdens

of production and persuasion on the issue of set-offs. Thus,

on remand, the district court must consider whether the

City proved by a preponderance of the evidence that Mr.

Rodriguez’s part-time and irregular employment could not

have been undertaken had the City hired him as a Security

Officer I.

The City also takes exception to the district court’s

award of liquidated damages on the ground that if no

compensatory relief is owing, as they contend, liquidated

damages may not be assessed. Having affirmed the grant-

ing of compensatory relief, subject only to the modification

as to amount, we leave the award of liquidated damages

to the trial judge’s discretion, see, e.g., Hayes v. Republic

Steel Corp., 531 #.2d 1307 (5th Cir. 1976). In light of our

holding relating to the mitigation of compensatory damages~

under the ADEA, the district court should reconsider on

remand its award of liquidated damages on the record as it

then exists in this case.

Iil.

Both parties appeal from the district court’s order of

October 5, 1976, awarding attorneys’ fees to plaintiff’s

counsel, Community Legal Services, Inc. (CLS). The City

contends that CLS, a non-profit, federally-funded, legal

services organization is barred by federal law and its own

charter from receiving court-awarded attorneys’ fees.

Plaintiff appeals the calculation of the amount of the

award. Specifically, plaintiff contends that the district

court’s use of a $30.00 per hour rate of compensation based

on fee rates in the Criminal Justice Act, 18 U.S.C. § 3006A

A39

(d)(1) (1974), constitutes reversible error.“ We turn to

the threshold issue of CLS’s eligibility to receive attorneys’

fee awards for successfully prosecuting a suit brought

under ADEA.

A.

Community Legal Services, Inc. was chartered under

the provisions of Pennsylvania’s Non-Profit Corporation

Law. According to its charter, CLS may provide legal

services to persons financially unable to secure counsel

except in matters of a contingent nature or which may

yield ‘‘a recovery sufficient to interest a private attorney

in accepting such a case.’’ Art. IX, Articles of Incorpora-

tion of Community Legal Services, Inc., June 23, 1966,

reprinted im appellants’ reply brief at p. 29. CLS receives

funds from the federal Legal Services Corporation and,

therefore, operates subject to the restriction of the Legal

Services Corporation Act of 1974, which prohibits recipient

legal services organizations from using federal funds in

fee generating cases, 42 U.S.C. § 2996f(b)(1) (1974).

The ADEA enforcement provision, 29 U.S.C. § 626(b),

incorporates that part of the Fair Labor Standards Act

which provides: ‘‘The court . . . shall, in addition to any

judgment awarded to the plaintiff or plaintiffs, allow a rea-

sonable attorney’s fee to be paid by the defendant... .’’

29 U.S.C. § 216(b) (1970). Given this mandatory language

without apparent exception, the district court had to de-

termine whether CLS was implicitly barred by either the

Legal Services Corporation Act or other federal law

from receiving attorneys’ fees awards. In its memo-

randum opinion the district court found no reason to spare _

the City an assessment of fees to reimburse CLS (126a).

We agree with the district court’s conclusion and hold that

publicly funded legal services organizations, such as CLS,

are not absolutely barred from receiving mandatory ADEA

24. Plaintiff does not the hourly rate allowed Ms. Dicker, but

requests modification in the ly rate applied to the time expended by

A40

attorneys’ fee awards by virtue of the legal limitations on

their authority to handle fee generating or contingent fee

cases.

The attorneys’ fee provisions in the Fair Labor

Standards Act have been construed to mandate awards to

successful plaintiffs. Alyeska Pipeline Service Co. v.

Wilderness Society, 421 U.S. 240, 261 n.34 (1975) (dictum) ;

Wright v. Carrigg, 275 F.2d 448, 449 (4th Cir. 1960);

Whitington v. Roberts, 360 F. Supp. 335, 338 (N.D. Miss.

1973). This court has previously stated that ‘‘[c]onse-

quently, attorneys’ fees are to be awarded in age discrim-

ination suits in which the employee prevails.’’ Rogers v.

Exxon Research & Engineering Co., 550 F.2d 834, 842

(1977). In spite of this unqualified legislative and judicial

authority for an award of fees to all successful plaintiffs,

the City urges this court to judicially except those plain-

tiffs represented by organizations such as CLS which are

publicly funded and furnish legal services free of charge

to needy citizens.

As a general matter, awards of attorneys’ fees where

otherwise authorized are not obviated by the fact that

individual plaintiffs are not obligated to compensate their

counsel. The presence of an attorney-client relationship

suffices to entitle prevailing litigants to receive fee awards.

Torres v. Sachs, 538 F.2d 10, 13 (2d Cir. 1976); Branden-

burger v. Thompson, 494 F.2d 885, 889 (9th Cir. 1974);

Miller v. Amusement Enterprises, Inc., 426 F.2d 534, 538-39

(5th Cir. 1970). Of course, since the object of fee awards

is not to provide a windfall to individual plaintiffs, fee

awards must accrue to counsel. Hairston v. R d R Apart-

ments, 510 F.2d 1090, 1093 (7th Cir. 1975).

The statutory policies underlying the award of fees

justify such shifting without regard to whether the in-

dividual plaintiff initially assumed the financial burdens of

representation. The traditional, and generally applicable,

‘*American Rule’’ denies successful litigants the possibility

of recovering fees from their opponents. Beyond the ap-

A4l1

plicability of severa] narrow judicially recognized excep-

tions to the American Rule, the Supreme Court insists that

Congress must affirmatively authorize fee awards. Alyeska

Pipeline Service Co. v. Wilderness Society, 421 U.S. 240

(1975). Congress, in fact, has often taken up the cudgel

and authorized or mandated fee awards in suits brought

under diverse statutes. See id. at 260 n.33. Typically,

congressionally approved awards are designed to encourage

private enforcement of individual rights and to deter

socially harmful conduct. For example, Congress, in pass-

ing the Civil Rights Act of 1964, authorized fee awards

for ‘‘private attorneys general’’ who might otherwise be

deterred from bringing suit because of the burdensome

costs of litigation. Newman v. Piggie Park Enterprises,

Inc., 390 U.S. 400, 401-02 (1968) (per curiam). More re-

cently, Congress responded to the Supreme Court’s deci-

sion in Alyeska Pipeline by closing ‘‘gaps’’ left in other

civil rights laws and authorized the award of attorneys’

fees in actions brought under several provisions, includ-

ing 42 U.S.C. §§ 1981, 1982, 1983 and 1985. Civil Rights

Attorney’s Fees Awards Act of 1976, amending 42 U.S.C.

$1988 (1976). See Sen. Rep. No. 94-1011, 94th Cong., 2d

Sess. The award of fees to legal aid offices and other

groups furnishing pro bono publico representation pro-

motes the enforcement of the underlying statutes as much

as an award to privately retained counsel. Legal services

organizations often must ration their limited financial

and manpower resources. Allowing them to recover fees

enhances their capabilities to assist in the enforcement of

congressionally favored individual rights. See Hairston

v. R &d R Apartments, 510 F.2d 1090, 1092-93 (7th Cir.

1975) ; Palmer v. Columbia Gas of Ohio, Inc., 375 F. Supp.

634, 636 (N.D. Ohio 1974); Jones v. Seldon’s Furniture

Warehouse, Inc., 357 F. Supp. 886, 887-88 (E.D. Va. 1973) ;

Note, Awards of Attorney’s Fees to Legal Aid Offices, 87

Harv. L. Rev. 411, 413-14 (1973). Moreover, assessing

fees against defendants in all circumstances may deter

A42

wrongdoing in the first place. See Jones v. Seldon’s Furni-

ture Warehouse, Inc., supra.

The City concedes that the purpose in funding legal

services organizations and in authorizing awards of fees

are in part identical—removing financial barriers to access

to the courts. The City contends, however, that the separate

congressional initiatives are mutually exclusive solutions

to the problem of enhancing access to the courts. There

are no persuasive logical or policy reasons why awards of

fees to legal services organizations in particular cases can-

not complement the base funding of such groups. Nor

have we been referred to any expressions of congressional

intent to exclude legal aid offices from receipt of attorneys’

fees awards. The City instead presses a construction of

the Legal Services Corporation Act’s prohibition of the

use of federal funds for fee generating cases as covering

all suits brought under statutes authorizing awards of fees

to successful plaintiffs.”

The Legal Services Corporation Act bars recipient

organizations from using federal funds ‘‘to provide legal

assistance with respect to any fee-generating case (except

in accordance with guidelines promulgated by the Corpora-

tion) ....’’ 42 U.S.C. § 2996f(b)(1) (1974). The Legal

Services Corporation has adopted implementing regula-

tions which do not flatly prohibit legal services organiza-

tions from maintaining fee-generating cases in all situa-

tions. 45 C.F.R. §§ 1609 et seq. (1976). The regulations

qualify the statutory bar by permitting legal services or-

ganizations to provide counsel in fee-generating cases as a

25. It should be noted that the City’s argument has far broader ramifica-

tions than that legal services organizations may not receive fee awards. The

statutory provision on which the City relies forbids the use of federal funds in

maintaining the suits from the outset. Thus, were we to rule that 42 U.S.C.

2996f(b)(1) absolutely bars awards of fees to legal aid offices, we would

restrict legal services from participation in many matters, such as civil

rights suits, in which Congress must have contemplated an active role for

legal services izations. See Alycska Pipeline Service Co. v. Wilderness

Society, 421 y, 421 US. 240, 262-63 54 (1975) (remarks during congressional

debates on passage of the Legal Services Corporation Act of 1974 indicate

that legal services organizations would be able to accept fee awards where

pursuing the role of private attorneys general).

A43

matter of last resort if no other adequate private repre-

sentation is available. Jd. § 1609.3. The thrust of the

enabling regulations is that legal services organizations

should not compete with private practitioners but that if no

private attorneys were willing to accept a particular fee-

generating case, then legal aid offices may furnish counsel.

With this policy rationale as a backdrop, the Corporations’

guidelines expressly permit recipient organizations to ac-

cept court-awarded fees if there are certain assurances

that private counsel is unavailable.” Id. §§ 1609.4, 1609.5.

The district court found nothing on the record to sug-

gest that CLS failed to follow its routine procedures to

determine whether there might have been private counsel

available to accept Mr. Rodriguez’s suit (126a). Nor is

there any suggestion on the record that CLS’s internal

procedures are deficient in identifying those cases where

private attorneys might be available to accept a case on

the contingency of a fee award. The City contends that

CLS should bear the burden of introducing evidence that

this particular case was indeed one in which private rep-

resentation was unavailable and that, absent such affirma-

tive evidence, a violation of federal regulations must be

presumed. If a legal services organization’s routine pro-

cedures comply with Legal Services Corporation regula-

tions on fee-generating cases, 45 C.F.R. § 1609.4, as CLS’s

apparently do, we see no reason to establish a presumption

that the organization circumvents its own procedures.

Thus, as to this particular request for attorney’s fees we

perceive no basis for disturbing the district court’s finding

that ‘‘[pJrivate attorneys apparently lacked interest.’’

(126a) Given such a finding that CLS’s acceptance of

26. The tions define ing cases as those which “reasonably

Tan na ane Sie beat nag STE Ties tee

or - t

unnecessary to determine + whelker of adil Seema eader

A44

Mr. Rodriguez’s suit in no way competed with the private

bar, CLS may be awarded attorney’s fees in accord with

the enabling regulation, 45 C.F.R. § 1609.5.”

We have consistently deferred to the informed dis-

cretion of the district court in calculating an award of

attorneys’ fees. Lindy Bros. Builders, Inc. v. American

Radiator & Standard Sanitary Corp., 540 F.2d 102, 115 (3d

Cir. 1976) (Lindy II); Merola v. Atlantic Richfield Co., 493

F.2d 292, 295 (3d Cir. 1974) (Merola I); Lindy Bros.

Builders, Inc. v. American Radiator & Standard Sanitary

Corp., 487 F.2d 161, 166 (3d Cir. 1973) (Lindy I). The ex-

ercise of such discretion must, however, conform to proper

standards and procedures. The failure of a trial court to

adhere to generally applicable rules and criteria may con-

stitute a ‘‘misuse’’ uf discretion unentitled to the appellate

court deference generally accorded factually oriented cal-

culations by a trial judge. Lindy II, supra at 116; Merola

I, supra at 295. On this appeal we are confronted with

plaintiff’s argument that the district court misused its

discretion by relying on impermissible criteria in formulat-

ing its award of fees.

The leading case governing calculation of attorneys’

fees awards in this circuit is Lindy I. There Chief Judge

Seitz prescribed generally applicable standards to guide

district courts in measuring reasonable attorneys’ fees.

The focal point of the Lindy I standards is the purpose of

fee awards—compensation of attorneys for the reasonable

value of services benefiting the plaintiffs. Lindy I at 167.

27. In its supplemental pealy Eek, Se Gy ceem Gat fet TX of

Set ee restrictive than nen copenee ant saceenty Cave

Article IX does not expressly ponadl = seems ; aed with

which are expressly proscribed by charter. Article IX seems

‘orestall CLS's incursion into the domain of the private bar, thereby

po one the federal regulations with the same purpose. Satisfaction of

the latter regulations should imply satisfaction of the similarly conceived, Me

more vaguely worded, charter restrictions.

Li

itis

§

fe

bie

a

is

fle

A45

The ‘‘lodestar’’ for an objective calculation of the reason-

able value of attorneys’ services involves determining the

number of compensable hours and multiplying those hours

by a reasonable hourly rate. Id. at 167-68. The resulting

product constitutes an expected market value of attorneys’

services. Merola I, supra at 298. The objective market

value figure is then adjusted to reflect more subjective

factors indicative of the value of the delivered performance

such as the quality of work, the contingency of success and

the benefit conferred. Merola v. Atlantic Richfield Co., 515

F.2d 165, 173 (3d Cir. 1975) (Merola II); Merola I, supra

at 298; Lindy I, supra at 168-69.

The instant appeal concerns the criteria employed by

the district court in fixing a reasonable hourly rate for legal

services organization attorneys. In Lindy I we noted that

‘*[t]}he value of an attorney’s time generally is reflected in

his normal billing rate.’’ Lindy 1, supra at 167 (emphasis

added). An obvious difficulty arises when the attorneys

entitled to fees do not have a normal billing rate and, in-

stead, are salaried employees of a publicly-funded legal

services organization. Lacking a precise referent for de-

riving a reasonable hourly rate for CLS employees, the

district court seized upon three factors—the attorneys’ ex-

perience, their annual salaries, and compensation for law-

yers appointed under the Criminal Justice Act, 18 U.S.C.

§ 3006A (1970). We are called upon to determine whether

reliance on any of these factors in estimating a reasonable

hourly rate may constitute a misuse of discretion in cal-

culating an amount of a fees award.”

The absolute levels of billing rates for attorneys in a

private firm depend i in large measure on the financial stakes

clients have in particular matters. While partnership

A46

shares and associates’ salaries may vary on the basis of

relative experience and responsibility, the structure of a

firm’s billing rates is generally a function of the type of

work performed and the affluence of its clients. Whether

the practitioners be top flight antitrust or securities liti-

gators or contingent fee tort lawyers, billing rates reflect

their clients’ monetary stakes, whether in the form of

potential cash awards or liabilities. Whenever private

counsel petition for reasonable fee awards, they will point

to their market billing rates, which are determined in large

part by the financial stakes in contested matters.”

Legal services attorneys and other public interest law-

yers do not have normal billing rates because they have no

‘‘market’’ for their skills. These attorneys typically do

not bill their clients at all. As a result, the reasonable value

of these attorneys’ time cannot be simply measured by

observing their market rates. Moreover, legal services at-

torneys’ work cannot be valued by comparing the pecuniary

benefits conferred on their clients to the larger financial

stakes in matters handled by the private bar.

As we have observed above, CLS cannot generally

represent clients, however impecunious, if substantial

monetary benefits might be won. Thus, legal services

organizations may win only modest cash awards or non-

monetized equitable relief for their clients. Despite the

often insignificant potential monetary benefits in individual

cases, legal services organizations render valuable services

to their clients and their communities. Legal aid organi-

zations often are the sole representatives of the econom-

ically, socially and culturally deprived in their disputes with

landlords, government welfare agencies, employers and

creditors. The cumulative value to society, and hence the

derivative value of individual attorney’s time, from legal

services representation of the needy is substantial, albeit

29. Admittedly, when private firms handle pro bono publico —s oy

often request reduced hourly rates of compensation so as not to 4

See, ¢.g. Commonwealth of Pennsylvania v. O'Neill, 431 F. Supp. 707

(ED. Pa. 1977). Nevertheless, the referent for determining a break even

hourly rate remains their prevailing market rates for their regular clients.

A47

not easily monetized. The only fair conclusion that can be

reached is that, with the present structure for the delivery

of legal services, relative compensation of private firm

attorneys and legal aid lawyers does not entirely reflect

differences in the reasonable value of their respective pro-

fessional time. Courts, in awarding attorneys’ fees, are

not empowered to rectify this general disparity. However,

they may properly take account of these market disparities

in fixing reasonable hourly rates for particular awards.

We believe that excessive consideration to either legal aid

salaries or to Criminal Justice Act (CJA) fee scales de-

flects calculation of a reasonable hourly rate of compensa-

tion for legal services attorneys.

Legal services salaries are generally considerably

lower than salaries paid associates in private firms who

have comparable experience and credentials. This salary

differential need bear no relation to the quality of repre-

sentation, in general or in a particular case, or to the ben-

efits received by clients. Compensation disparities usually

reflect the relative poverty of legal services funding. While

a CLS attorney’s salary need not be ignored by the trial

court, neither shou’ ' it serve as the polestar for fixing a

reasonable hourly iate of compensation. Relative salaries

within the legal services unit reflect relative expertise and

responsibility and, therefore, provide an objective guide

to setting relative hourly rates.*° Reference to absolute

salary levels is about as reasonable as deriving the reason-

able value of a federal judge’s time from his or her salary.”

Thus, we hold that the district court misused its dis-

cretion by emphasizing the factor of absolute salaries paid

by CLS in deriving an hourly rate of compensation. To

the extent salary levels are relevant, the appropriate

referent would be comparable salaries earned by private

A48

attorneys with similar experience and expertise in equiv-

alent litigation.

The district court, in addition to factoring in CLS

salaries, used as a benchmark congressionally specified fees

for court-appointed attorneys who represent indigent crim-

inal defendants. Under the Criminal Justice Act, court-

appointed counsel, whether they be from the private bar or

a public defender organization, are entitled to the limited

amounts of $30.00 per hour for in-court representation and

$20.00 per hour for out-of-court preparation, subject as

well to maximum limits on the total fee. 18 U.S.C.

§ 3006A(d) (1970). Compensation is awarded regardless

of the outcome of the criminal proceeding. At issue here

is whether a district court misuses its discretion by apply-

ing CJA rates as a primary basis for calculating a reason-

able hourly rate for legal services representation in age

discrimination suits.

The Criminal Justice Act fee rates apply by force of

statute only to court-appointed counsel for indigent crim-

inal defendants. Congress has not explicitly incorporated

these fee rates in the ADEA. Instead, Congress incor-

porated the more flexible standard from the Fair Labor

Standards Act, which provides for a judicially calculated

award of ‘‘a reasonable attorney’s fee.’’ 29 U.S.C.

§216(b) (1974). The district court judge in this case

deemed the non-incorporated CJA fee rates a suitable guide

for determining a reasonable hourly rate. We believe that

CJA fees rates are a product of several factors unique to

the criminal defense context which militate against their

application in employment discrimination suits.

The Federal Government is obligated, as a matter of

constitutional law, to furnish counsel for indigent criminal

defendants. Gideon v. Wainwright, 372 U.S. 335 (1963).

No such obligation extends to civil litigants. Thus, com-

pensation must be accorded court-appointed counsel under

the CJA regardless of the outcome of the proceedings. In

ADEA suits, only a successful plaintiff may recover fees.

A49

In the criminal context, the Federal Government must

assume the entire burden of paying court-awarded fees,

even where the prosecution prevails in obtaining convic-

tions. In employment discrimination suits, defendants who

pay fee awards must have been found liable for unlawful

practices. Significantly, the ADEA applies to private and

public employers.** Moreover, members of the bar may

have a greater duty to their profession to accept criminal

defense representation than civil plaintiffs at less than cus-

tomary compensation.” Thus, the modest fee allowances

in the CJA reflect in large measure these unique features

of the criminal defense system.

In civil rights litigation, closely analogous to ADEA,

Congress has directed judges, in calculating attorneys’ fee

awards, to consider factors other than adoption of CJA fee

schedules. The Civil Rights Attorney’s Fees Awards Act

of 1976 (Fees Act), amending 42 .S.C. 4 1988, applicable

to suits brought under 42 U.S.C. § 1983 and companion civil

rights provisions, authorizes discretionary awards to pre-

vailing parties of ‘‘reasonable’’ attorneys’ fees. The legis-

lative history of the Fees Act makes clear that Congress

intended the referent for reasonable fees to be awards in

comparable litigation. The Senate Report accompanying

the bill enacted into law expresses the congressional direc-

tive as follows:

‘*Tt is intended that the amount of fees awarded under

S. 2278 be governed by the same standards which pre-

vail in other types of equally complex Federal litiga-

32. The fact that the of Phi ia’

suet ne 8 Te te ae oe ee ee

The reasonable value of an attorney's time does not on who his or her

adversary is. See Torres v. Sachs, $38 F.2d 10, 12-13 & n2 (2d Cir. 1976).

33. The islative committee reports accompanying the CJA reveal that

Congress the fee awards to “offer some but not full compensation for

oe ee

ca oan a Senate Report No. 91-790).

ASO

tion, such as antitrust cases and not be reduced because

the rights involved may be non-pecuniary in nature.’’

Senate Report No. 94-1011, 94th Cong., 2d Sess. 6, re-

printed in [1976] U.S. Cong. & Ad. News 5913.

The First Circuit Court of Appeals has recently con-

sidered the appropriateness of reliance on CJA fee rates

in calculating awards granted under the newly enacted

Fees Act. After considering the legislative history cited

above, the court concluded that, ‘‘[m]echanical application

of the Criminal Justice act fees scale obviously does not

meet these criteria....’’ King v. Greenblatt, No. 74-1425

(1st Cir., Aug. 15, 1977), slip op. at 4, overruling Souza v.

Travisano, 512 F.2d 1137 (1st Cir.), vacated, 423 U.S. 809

(1975). See also Torres v. Sachs, 538 F.2d 10, 12-13 & n.2

(2d Cir. 1976) (fees in actions under the Voting Rights

Act of 1964 are to be measured by same standards as in

other complex litigation); Palmer v. Rogers, 10 E.P.D.

| 10,499 at p. 6131 (D. D.C. 1975) (rejecting application of

CJA fee scales in the calculation of awards under Title

VII). We agree with the First Circuit and rule that in

the analogous context of ADEA suits, district court judges

should look to cases of similar complexity, in particular

other employment discrimination and related civil rights

suits, to determine reasonable hourly rates for counsel

who do not have normal private practice billing rates.

We do not hold that awards figured on the basis of a

$30.00 per hour rate of compensation are unreasonable or

that they are out of line with rates used in calculating

awards in comparably complex litigation. Nor do we pass

judgment on the reasonableness of the requested $50.00

per hour rate for the senior CLS attorney. We hold only

that the district court judge misused his discretion in fix-

ing hourly rates of compensation on the basis of CLS’s

absolute salary levels and the CJA fee scale. On remand,

the district court should undertake appropriate fact find-

ing to apply the criteria discussed in this opinion for de-

termining a reasonable hourly rate of compensation for

AS1

CLS attorneys.“ See Richerson v. Jones 551 F.2d 918

928-29 (3d Cir. 1977); Merola II, supra at 168-69. :

IV.

For the foregoing reasons, paragraph 5 of the district

court’s order of September 2, 1976, and the district court’s

order of October 5, 1976, will be vacated and the case will

be remanded for further action in accordance with this

opinion, including determination of these issues: the re-

calculation of plaintiff’s monetary award to account for

necessary set-offs, and the recalculation of the attorneys’

fee award to reflect the reasonable value of the CLS at-

torney’s time devoted to this litigation.

dri te eat ti re de wt

to

for an award for

these hours should be addressed

A

True Copy:

Teste

Clerk of the United Stotes Court of Appeals

for the Third

(A.0.—U. S. Courts, International Printing Co., Phila., Pa.)