Petitioners Brief — Burlington v. Dague

| Supreme Court, U.S.

ktbLED

MAR 1? 1992

No. 91-810 | OFFICE OF THE CLERK

In The

Supreme Court of the United States

October Term, 1991

*

CITY OF BURLINGTON,

Petitioner,

VS.

ERNEST DAGUE, SR., ERNEST DAGUE, JR.,

BETTY DAGUE, AND ROSE A. BESSETTE,

Respondents.

°

On Writ Of Certiorari To The

United States Court Of Appeals

For The Second Circuit

¢

BRIEF FOR PETITIONER

e

Micnaet B. Crarr*

Ropert R. McKEarin

Freperick S. Lane III

Dinse, ERDMANN & CLapr

209 Battery Street

Burlington, Vermont 05402-0988

Telephone: (802-864-5751)

Counsel for Petitioner

*Counsel of Record

COCKLE LAW BRIEF PRINTING CO., (800) 225.6964

OR CALL COLLECT (402) 342-2831

i

QUESTION PRESENTED

May a court, in determining a reasonable attorney’s

fee award under Section 7002 of the Solid Waste Disposal

Act, 42 U.S.C. Section 6972(e), or Section 505 of the Fed-

eral Water Pollution Control Act (Clean Water Act), 33

U.S.C. Section 1365(d), enhance the fee award above the

lodestar amount in order to reflect the fact that the attor-

neys had taken the case on a contingent-fee basis, thus

assuming the risk of receiving no attorney’s fees at all?

ii

LIST OF PARTIES AND CORPORATIONS

CITY OF BURLINGTON,

a municipal corporation with no affiliation

to any parent or subsidiary or related

corporation,

Petitioner

ERNEST DAGUE, SR., ERNEST DAGUE, JR.,

BETTY DAGUE, AND ROSE A. BESSETTE

Respondents

TABLE OF CONTENTS

Page

cess ccccnsccscessccccce |

ee eee anes secscccccccccccees 2

CONSTITUTIONAL AND STATUTORY PROVI-

EEE EEE EE 3

STATEMENT OF THE CASE.....................:. 3

SUMMARY OF ARGUMENT....................... 9

ees us esscccscceccscccces 11

1. The Statutes And Relevant Legislative History

Do Not Authorize, A Separate Award Of Attor-

ney’s Fees To Reflect A Contingency Risk Of

TCU c ee ee de ecccccccccescecccces: 1]

2. The Jurisprudence Of This Court Relating To

Attorney's Fee Awards Militates Against Risk

Of Loss Enhancement Of The Lodestar Fee... 14

3. A Contingency Risk Of Loss Factor Is Sub-

sumed In The Determination Of A Reasonable

Hourly Rate And May Not Serve As A Basis

For Enhancing The Lodestar Award.......... 17

4. Contingency Risk Of Loss Enhancements Of

The Lodestar Amount Cannot Be Justified.... 18

5. The Failure Of The District Court And The

Court Of Appeals To Comply With Require-

ments Set Forth In Hensley v. Eckerhart With

Respect To The Award Of Attorney’s Fees Was

Erroneous And Constitutes An Abuse Of Dis-

DMPUEUPSEMGDGSSGSESS co ccccecccesccccce: 21

6. The Results Obtained In This Case Are Not

Exceptional And Do Not Justify An Increased

Fee. The Results Obtained Are, In Fact, So Lim-

ited As To Require A Reduction Of The Lode-

Nene Ts te ccecccns 24

eee eck saesacscecccccccccces 26

—_—

TABLE OF AUTHORITIES

Page

Cases

Blanchard v. Bergeron, 489 U.S. 87 (1989)...... 12, 17, 20

Blum v. Stenson, 465 U.S. 886 (1984)...... 16, 18, 20, 23

Davis v. County of Los Angeles, & E.P.D. 99444 (C.D.

Ge CPP vc vccccccecécncccnsncansadésesesecvesees 13

Hensley v. Eckerhart, 461 U.S. 424 (1983)......... passim

Johnson v. Georgia Highway Express, 488 F.2d 714

See Ge Frees ncedenssccvcncéasstesaccensss passim

Lewis v. Coughlin, 801 F.2d 570 (2d Cir. 1986)..... 21, 23

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

GP FS cece bbenectecneacessivececnisedvassece 26

Pennsylvania v. Delaware Valley Citizens Counsel for

Clean Air, 478 U.S. 546 (1986).............. 16, 17, 18

Pennsylvania v. Delaware Valley Citizens Counsel for

Clean Air, 483 U.S. 711 (1987)..............000005. 18

Stanford Daily v. Zurcher, 64 F.R.D. 680 (N.D. Cal.

Pepe ev wcnnccccntencectstsacdenncenesnesssescosces 13

Swann v. Charlotte-Mecklenburg Board of Education,

66 F.R.D. 483 (W.D.N.C. 1975) ...... 6.6 eee n ee 13

STATUTES

Be es OF SED a cidccccudnncovsndssndscevecssstnes 2

BP te Ur PE on wccdcccccscnéccennsuccnecsaans 3,9

Ge Wes OF ong cccvedecccccecoccesesscsncudvoes 11

iss cal clei din Gabeemeenl 3, 9

v

TABLE OF AUTHORITIES - Continued

Page

OrHer AUTHORITIES

SENATE REPORT NO. 94-1011 (1976)............ 11, 13

HOUSE REPORT NO. 94-1558 (1976)................ 11

No. 91-810

e

In The

Supreme Court of the United States

October Term, 1991

r

CITY OF BURLINGTON,

Petitioner,

vs.

ERNEST DAGUE, SR., ERNEST DAGUE, JR.,

BETTY DAGUE, AND ROSE A. BESSETTE,

Respondents.

¢

On Writ Of Certiorari To The

United States Court Of Appeals

For The Second Circuit

S

BRIEF FOR PETITIONER

¢

OPINIONS BELOW'

The opinion of the court of appeals (App. 1-37) is

reported at 935 F.2d 1343. The opinion of the district court

dated October 16, 1989 (App. 59-115) is reported at 732 F.

Supp. 458. The opinion of the district court dated March

' Citations to the Joint Appendix filed with this brief are

designated as “Jt. App. __”. Citations to the Appendix

attached to the Petition for a Writ of Certiorari are designated

as “App. __”.

15, 1990 (App. 118-129) is reported at 733 F. Supp. 23. The

balance of the court of appeals and district court opinions

and orders are not reported: Opinion and Order of United

States District Court for the District of Vermont, March

26, 1986 (App. 44-53); Opinion and Order of Second Cir-

cuit Court of Appeals, August 20, 1986 (App. 142-144);

Opinion and Order of the United States District Court for

the District of Vermont, April 2, 1990 (App. 130-134);

Order of the United States District Court for the District

of Vermont, May 4, 1990 (Jt. App. 296-301); Judgment of

United States District Court for the District of Vermont,

May 7, 1990 (App. 116-117); Order of Second Circuit

Court of Appeals, August 20, 1991 (App. 145-146); Order

of United States District Court for the District of Vermont,

October 11, 1991 (App. 137-138); and Order of Second

Circuit Court of Appeals, October 25, 1991 (App. 38-39).

e

JURISDICTION

The opinion of the court of appeals was entered on

june 12, 1991. A timely motion for reafgument was

denied on August 20, 1991. (App. 145). A petition for a

writ of certiorari was timely filed on November 18, 1991.

The petition was granted on January 27, 1992. The juris-

diction of this Court is invoked under 28 U.S.C. § 1254(1).

S

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

The following statutes are set out verbatim in the

Appendix:

Section 505 of Clean Water Act (33 U.S.C. § 1365).

(App. 183).

Section 7002 of the Resource Conservation and

Recovery Act of 1976 (42 U.S.C. § 6972). (App. 232).

S

STATEMENT OF CASE

Respondents own property adjacent to the City of

Burlington municipal landfill. At the time Respondents

filed their complaint, the City was operating its landfill

pursuant to authority granted by the State of Vermont

and subject to a state court order requiring the City to

install a leachate collection system designed to prevent

the migration of 90% of the leachate produced at the

landfill, and a methane control system designed to pre-

vent the migration of methane gas in explosive limits

beyond the landfill boundary. In addition, the state court

order required that the landfill cease waste acceptance

and close on or before January 1, 1990.

Respondents’ multi-count complaint included citizen

suit actions brought pursuant to the Clean Water Act and

the Resource Conservation and Recovery Act alleging

violation of those Acts and seeking injunctive relief. The

complaint also sought injunctive relief and damages in

connection with various state law claims. The injunctive

relief sought by Respondents included inter alia: (1) the

issuance of preliminary and permanent injunctions man-

dating immediate closure of the landfill, and cessation of

unlawful discharges of hazardous and toxic pollutants;

(2) an order requiring Petitioner to present to the court

within 30 days a plan to excavate and properly dispose of

hazardous wastes in the landfill and continued court

supervision of the implementation of any court-ordered

remedial action; (3) an order prohibiting any alteration of

the landfill without the approval of a court-appointed

monitor to be paid for by Petitioner; (4) an order requir-

ing the City to present to the court within 30 days a plan

to purge hazardous and toxic materials from groundwa-

ter and surface water beneath and adjacent to the landfill

and to implement any approved plan under the supervi-

sion of the court; (5) an order requiring the City to install

and operate a leachate collection drain system; (6) an

order requiring presentation to the court within 30 days

of a methane gas control and abatement plan, and instal-

lation of any such approved system under the court’s

supervision; (7) an order requiring the City to report

monthly to the court-appointed monitor; (8) an order

requiring the City to post a bond or other equivalent

security; (9) imposition of civil penalties; and (10) an

award of attorney’s and expert witness fees (see Com-

plaint, App. 244, 267-69).

Shortly after the complaint was filed, hearings on the

motion for a preliminary injunction were commenced

before the United States Magistrate. Subsequently, the

court issued an order on March 26, 1986, denying the

Respondents’ motion for a preliminary injunction. (App.

40-53).

Respondents unsuccessfully appealed the denial of

their motion for a preliminary injunction to the Second

Circuit Court of Appeals. (App. 142-144).

Thereafter, the trial court severed Respondents’

actions seeking injunctive relief, including the claim

based upon state law, for a bench trial. The district court

heard the motion for a permanent injunction during May

of 1989 and issued its opinion on October 16, 1989. (App.

115). The opinion includes findings that the City was in

violation of certain provisions of the Clean Water Act and

the Resource Conservation and Recovery Act and Ver-

mont’s Groundwater Protection Act. The court also found

that a closure date of January 1, 1990 was established

under an existing state court order (App. 63-64); that the

state considered the January 1, 1990 closing date appro-

priate (App. 65); and that the state intended to enforce

the state court order requiring closure on that date. (App.

65). The district court then issued an order requiring that

the landfill be closed on January 1, 1990, the same date

fixed by the state court order. Otherwise, the court did

not grant Respondents any of the injunctive relief which

they sought. Nevertheless, the same opinion concluded

that the Respondents had “substantially prevailed in both

their RCRA and CWA claims” and ordered the City to

pay costs of litigation, “including reasonable attorney

and expert witness fees to be assessed.” (App. 88-89).

Respondents then filed an application for attorney

fees seeking a lodestar fee of $198,027.50 based upon

3185.4 hours of attorney and paralegal time at various

hourly rates ranging from $30 to $125 per hour, (Jt.App.

10) which Respondents represented were “reasonable”.

(Jt-App. 5-6) Respondents also sought a 100% enhance-

ment of the lodestar. (See Memorandum of Respondents

(Jt.App. 1-11, 14)).

Petitioner opposed the award of attorney fees on the

grounds that Respondents had not substantially pre-

vailed in light of the fact that the judgment issued by the

court did nothing more than approve a closing date for

the landfill which had been established prior to initiation

of the action, and did not otherwise grant Respondents

any of the relief sought by their litigation. (See Memoran-

dum of Petitioner, (Jt.App. 219-226)).

Petitioner did not contest that the hourly rates pro-

posed by the Respondents were reasonable. Rather, the

City contended that the Respondents’ lack of success in

the litigation required that all time associated with those

claims for relief on which the Respondents did not suc-

ceed be eliminated from the lodestar calculation and that

the properly computed lodestar be reduced to reflect the

Respondents’ very limited success to the extent they

could be said to have prevailed. (See Memorandum of

Petitioner (Jt.App. 219-226)).

The district court thereafter issued its opinion of

April 2, 1990 in which it found that the hourly rates

proposed by Respondents were reasonable. It also found

that the number of hours expended were “reasonable in

connection with this complex action” and awarded a

lodestar fee of $198,027.50 as requested by Respondents

(App. 130-134).

Without commenting upon the results obtained or

discussing how it had considered the relationship

between the amount of the lodestar fee and the results

obtained by Respondents in the litigation, the district

court awarded Respondents a 25% risk/contingency

enhancement ($49,506.87) based on conclusions that: (1)

“Plaintiffs’ attorneys would not have been compensated

at all unless plaintiffs prevailed”; (2) the risk of not

prevailing was substantial; (3) plaintiffs did not ulti-

mately prevail until after trial; and (4) without the oppor-

tunity for enhancement, plaintiffs would have faced

substantial difficulty obtaining counsel of reasonable skill

and competence in this complicated field of law. (App.

130-174).

On May 7, 1990 the court entered judgment with

respect to the federal law actions. (App. 116-117). The

judgment required the closure of the landfill on or before

January 1, 1990. It specifically denied the imposition of

civil penalties and was silent with respect to all other

relief requested by the complaint, except that it ordered

payment of the lodestar fee, expenses, and the enhance-

ment award set forth in its opinion of April 2, 1991.

The judgment of the trial court was appealed on

several grounds, including the award of attorney fees in

the lodestar amount and the award of enhancement. The

Second Circuit affirmed the trial court’s judgment in all

respects. (App. 1-37). Im particular, it determined that no

reduction in the lodestar was appropriate because the

case was complex. (App. 33). The appellate court did not

attempt to relate the amount of the lodestar to the degree

of success obtained, saying only that the district court

“did not err by rejecting the city’s efforts to trivialize the

plaintiffs’ success.” (App. 34).

The Second Circuit also upheld the 25% enhance-

ment, holding that enhancement of the lodestar was

appropriate if “without the possibility of fee enhance-

ment . . . competent counsel might refuse to represent

clients thereby denying them effective access to the

court.” (App. 34-37).

On June 25, 1991 Respondents filed a supplemental

application for an award of attorney fees with the district

court covering work performed after the date covered by

its initial application. Respondents’ sought a lodestar fee

of $24,113, a 25% enhancement of $6,028.25, and expenses

of $2,707.61. (Jt-App. 311-312). That application was

granted by the district court on October 11, 1991. (App.

137-138).

Finally, Respondents filed an application with the

court of appeals for work connected with the appeal to

that court, seeking a lodestar fee of $53,315.00, an enhan-

cement of $13,328.75 and expenses of $2,240.34. (Jt.App.

362-363). On October 25, 1991 the Second Circuit granted

the motion to the extent of the requested lodestar and

expenses, but denied the request for “risk enhancement”

holding that the “risk” involved in defending on appeal

is “not significant” and “in the circumstances of this case

calls for no enhancement to the lodestar amount.” (App.

38-39).

SUMMARY OF ARGUMENT

The attorney fee provisions of the Clean Water Act,

32 U.S.C. § 1365(d) and the Solid Waste Disposal Act, 42

U.S.C. § 6972(e), as well as the legislative history of

federal fee shifting statutes in general, allow the award of

reasonable attorney’s fees to prevailing plaintiffs. The

intent of the statutes is to provide for an award in an

amount no more than is sufficient to attract competent

counsel. Nothing in the statutes or the legislative history

authorizes a separate award of attorney’s fees in addition

to a properly computed lodestar fee to compensate plain-

tiffs’ counsel for taking the case on a contingent fee basis.

Jurisprudence developed by this Court respecting the

award of statutory attorney’s fees, including the adoption

of a particular lodestar method of determining reasonable

fee awards, militates against an enhancement of the lode-

star fee to reflect a contingency risk of loss. The lodestar

method of fee determination requires the district court to

follow a two-step process in determining a reasonable

fee. The first step requires the trial court objectively to

determine a reasonable hourly rate, based upon evidence

of market rates presented to it, sufficient to attract com-

petent counsel to perform the work involved. The deter-

mination of a reasonable hourly rate subsumes any

contingency risk of loss factor which might affect the

market rate. The court must also determine from evi-

dence presented the number of hours reasonably

expended on the case. The lodestar fee - the product of

all hours reasonably expended multiplied by the reason-

able hourly rate - represents the maximum reasonable fee

in all cases where essentially complete relief is obtained;

but such an award is excessive where the relief obtained

is limited in relation to the relief requested and scope of

the litigation as a whole. Step two of the lodestar method,

therefore, requires that the lodestar fee be reduced where

limited relief is obtained. Step two may not be avoided

and is essential to assure that an award of fees is reason-

able under the circumstances of the case.

The principles underlying the lodestar method will

not logically admit of an enhancement for risk of loss

contingency since any enhancement would, by definition,

constitute a windfall to plaintiffs’ counsel.

Use of a risk of loss contingency enhancement is

inconsistent with the primary objective of the lodestar

method, which was formulated by this Court to consider

all relevant factors in awarding fees, while at the same

time avoiding arbitrary and inconsistent results. It also

demeans the judicial process and the integrity of the

courts, since its application requires that the trial court

make inconsistent findings.

Even if enhancement of the lodestar amount to reflect

risk of loss contingency were compatible with logic and

the lodestar method of fee determination, it should be

rejected as a matter of policy because any such enhance-

ment is necessarily arbitrary, results in a defendant pay-

ing plaintiffs’ counsel for losing efforts, and involves the

courts in policy assessments which are properly a ques-

tion for Congress to resolve.

Finally, the results of this litigation, far from justify-

ing an enhancement of the lodestar amount, in fact,

11

demand its reduction. The relief obtained by Respondents

was so limited in comparison to the relief requested and

the scope of the litigation that both the trial court and the

Second Circuit Court of Appeals erred in not reducing

the lodestar amount to reflect Respondents’ limited suc-

cess.

ARGUMENT

1. The Statutes And Relevant Legislative History Do

Not Authorize A Separate Award Of Attorney’s Fees

To Reflect A Contingency Risk Of Loss.

Each of the statutes under which attorney's fees were

awarded in this case provides that the district court “may

award costs of litigation (including reasonable attorney

and expert witness fees) to the prevailing or substantially

prevailing party, whenever the court determines such an

awara is appropriate.” The statutes provide only that any

award of fees must be reasonable. Otherwise, théy pro-

vide no guidance with respect to what amount of attor-

ney’s fees may be awarded in a particular case.

Although the legislative history of these statutes

offers no-guidance with respect to the issue of what

amount constitutes a reasonable fee or what factors the

courts should consider in determining a reasonable fee,

recourse is often taken to the legislative history of the

Civil Rights Attorney’s Fees Award Act, 42 U.S.C. § 1988.

That history is contained primarily in the House and

Senate Reports which accompany the Act, H.R. Rep. No.

94-1558 (1976) and S. Rep. No. 94-1011 (1976). Both

reports cite Johnson v. Georgia Highway Express, Inc., 488

12

F.2d 714 (Sth Cir. 1974), a case which sets out twelve

factors? governing the amount of attorney's fee awards.

Of the criteria identified, only one - “whether the fee

is fixed or contingent” - refers to contingency. But when

the text of the Johnson opinion relating to that factor-is

read, it is apparent that the reference to the fee being

contingent has nothing to do with the risk that a statutory

fee will not be awarded. Instead, that section of the

opinion makes clear that what was intended was a refer-

ence to the existence of any fee agreement with the client,

be it fixed or contingent. The Johnson court reasoned that

any such agreement would fix a ceiling for any statutory

fee award. Id. at 718.5

The Johnson case itself, therefore, does not stand for

nor even suggest the proposition that a contingency risk

of nonpayment should be the subject of a separate award.

Nor does the decision state that a court should consider

required; 2. the novelty and difficulty of the questions; 3. the

skill requisite to perform the legal service properly; 4. the

preclusion of other employment by the attorney due to accep-

tance of the case; 5. the customary fee; 6. whether the fee is

fixed or contingent; 7. time limitations imposed by the client or

obtained; 9. the experience, reputation, and ability of the attor-

neys; 10. the undesirability of the case; 11. the nature and

length of the professional relationship with the client; and 12.

awards in similar cases. ~

* This position has since been rejected by this Court in

Blanchard v. Bergeron, 489 U.S. 87, 92-93 (1989) (the Johnson

contingency fee factor is just a factor and is not dispositive.)

13

the contingency risk that no statutory award will be made

in determining a statutory award of fees.

The Senate Report, but not the House Report, also

cites three cases which it concluded “correctly applied”

the Johnson factors so that the resulting fee awards were

“adequate to attract competent counsel,” but were not

“windfalls to attorneys.” S. Rep. No. 94-1011, p. 6 (1976).

One of the cases cited, Stanford Daily v. Zurcher, 64

F.R.D. 680 (N.D. Cal. 1974) awarded an enhancement for

contingency, quality of the attormey’s work, and results

obtained, but the “lodestar” amount in that case was

computed using an “average” hourly rate, as contrasted

with a “reasonable” or “market” hourly rate.

The second case cited in the Senate Report as cor-

rectly applying the Johnson standards is Davis v. County of

Los Angeles, 8 E.P.D. 99444 (C.D Cal. 1974). That case

awarded an enhancement to a lodestar, apparently also

calculated with reference to “normal hourly rates,” but

the enhancement was premised upon “the excellent

results obtained” and the fact that the case was “difficult

to litigate.” The Davis opinion did not reference a contin-

gency risk of loss factor.

In the third cited case, Swann v. Charlotte-Mecklenburg

Board of Education, 66 F.R.D. 483 (W.D.N.C. 1975), the

court, despite the excellent results obtained by the litiga-

tion, reduced a fee request of $204,237.50 which the court

specifically found was reasonable, to a lower amount of

$175,000 also determined by the court to be reasonable.

The opinion refers to the Johnson factor of whether there

was a fee contract, notes that there was no evidence of a

fixed fee agreement, but holds that under the statute

14

reasonable fees should be determined by the court and

awarded without reference to any fee agreement.

Given the divergence of the rationale and results

reflected in the three cases cited by the Senate Report, no

conclusion may be reached as to what the Senate

intended by its reference to those cases. Furthermore,

since the House Report does not refer to any of those

cases it is questionable whether any significance can be

placed on their citation by the Senate Report.

What is clear from the legislative history is that Con-

gress considered a reasonable fee to be one sufficient to

attract competent counsel, but no more; that the courts

are directed to employ the factors set forth in Johnson,

supra, in making reasonable fee awards; that attorney's

fees should reflect time reasonably expended on a matter;

and that fee awards should not be reduced simply

because the relief sought is non-pecuniary in nature.

Nothing in the statutes or the legislative history, however,

instructs the courts how to apply the Johnson factors so as

to convert them to dollars in a reasonable fee award.

2. The Jurisprudence Of This Court Relating To Attor-

ney’s Fee Awards Militates Against Risk Of Loss

Enhancement Of The Lodestar Fee.

It was in light of the fact that neither the fee statutes

nor the Johnson approach provide any framework in

which to apply the various factors that this Court

adopted the lodestar approach set out in Hensley v.

Eckerhart, 461 U.S. 424 (1983). The Hensley lodestar

method envisions a two-step process. In the first step, a

15

“lodestar” fee - defined as the product of all hours rea-

sonably expended on the litigation, multiplied by a rea-

sonable hourly rate - is determined. In the second step,

the trial court is required to determine whether the lode-

star fee should be adjusted upward or downward so as to

properly reflect “reasonableness.” The Hensley opinion

establishes that the step two adjustment must reflect the

Johnson “result obtained” factor, Hensley, supra at 434, and

might reflect other Johnson factors to the extent they are

not subsumed within the basic lodestar calculation.

Hensley, supra at 434, n.9. The Court was unanimous with

respect to the importance of the trial court’s consider-

ation of the results obtained factor. The majority opinion

observed that the “important factor of the results

obtained” is “particularly crucial where a plaintiff is

deemed prevailing even though he succeeded on only

some of his claims for relief,” Hensley, supra at 434; that

the “result is what matters,” id. at 435; that “the most

critical factor is the degree of success obtained,” id. at

436; and that “the extent of plaintiffs’ success is a crucial

factor in determining the proper amount of an award of

attorney's fees,” id. at 440. The concurring portion of the

opinion of Justice Brennan, joined by Justices Marshall,

Blackmun and Stevens, agreed with the Court's holding

that “the extent of the plaintiffs’ success is a crucial factor

in determining the amount of a fee award,” id. at 441, and

went on to observe that:

Any system for awarding attorney’s fees that

did not take account of the relationship between

results and fees would fail to accomplish Con-

gress’ goal of checking insubstantial litigation.

Id. at 448.

16

Noting that the fact that a plaintiff achieved “prevail-

ing party” status “may say little about whether the

expenditures of counsel’s time was reasonable in relation

to the success achieved,” id. at 436, the Hensley opinion

required that “when an adjustment to the lodestar is

requested on the basis of either the exceptional or limited

nature of the relief obtained by the plaintiff, the district

court should make clear that it has considered the rela-

tionship between the amount of the fee awarded and the

results obtained.” Id. at 437. The opinion then held that a

reduction from the lodestar fee “is appropriate if the

relief, however significant, is limited in comparison to the

scope of the litigation as a whole” and “where the plain-

tiff achieved only limited success the district court should

award only that amount of fees that is reasonable in

relation to the results obtained.” Id. at 440.

The lodestar concept adopted in Hensley was

prompted by the Court’s perception that the Johnson

approach, because it provided no framework for applica-

tion of the fee-shifting factors and placed unlimited dis-

cretion in trial judges, led to arbitrary and disparate

results. Pennsylvania v. Delaware Valley Citizens Counsel for

Clean Air, 478 U.S. 546, 562-64 (1986) (“Delaware Valley I).

In its decisions since Hensley, this Court has increasingly

emphasized that the basic lodestar fee usually defines the

upper limit of a reasonable fee award.

Blum v. Stenson, 465 U.S. 886 (1984) thus observed

that the lodestar fee is presumptively the “reasonable

fee,” id. at 897 and held that “novelty” and “complexity

of the issues,” the “special skill and experience of coun-

sel,” and “quality of representation” and the “results

obtained” from the litigation were all subsumed in the

17

lodestar calculation and could not serve as a basis for

increasing the lodestar amount. Id. at 898-900.

In Delaware Valley I, this Court, observing that fee

shifting statutes were not designed “to provide economic

relief” to attorneys or “to replicate exactly the fee an

attorney could earn through a private fee arrangement,”

characterized the lodestar figure as being strongly pre-

sumptive of a reasonable fee, which could be adjusted

upward only in rare and exceptional cases. Id. at 565.

Finally, in Blanchard v. Bergeron, 489 U.S. 87 (1989) the

Court indicated that lodestar fee awards, “properly calcu-

lated, by definition will represent the reasonable worth of

services” and protect against windfall awards. Id. at 96.

(Emphasis added).

3. A Contingency Risk Of Loss Factor Is Subsumed In

The Determination Of A Reasonable Hourly Rate

And May Not Serve As A Basis For Enhancing The

Lodestar Amount.

The award of an attorney’s fee under fee-shifting

statutes is always contingent upon the attainment of

“prevailing party” status. The presentation-and selection

of a reasonable hourly rate for use in a lodestar calcula-

tion is made in light of that known contingency. The

amount of a reasonable hourly rate is determined by

reference to the prevailing market rate in the relevant

community and “the burden is on the fee applicant to

produce satisfactory evidence - in addition to the aitor-

ney’s own affidavits — that the requested rates are in line

18

with those prevailing in the community for similar services

by lawyers of reasonably comparable skill, experience

and reputation.” Blum, 465 U.S. at 895 and n.11 (emphasis

added).

Assessment of the contingency factor is an integral

part of the selection of a reasonable hourly rate during

step one of the Hensley calculus. This is consistent with

the Court’s objective of reducing the opportunity for

arbitrary results when it adopted the Hensley approach.

The resulting lodestar figure therefore necessarily reflects

contingency considerations. Any enhancement of the

lodestar based on contingent risk of loss, then, is inher-

ently duplicative.

Contrary to the concerns expressed in the concurring

and dissenting opinions in Delaware Valley II, 483 U.S. at

711, 730, 735, prohibiting enhancement of a lodestar fee

does not foreclose consideration of contingency in setting

a reasonable attorney’s fee. Instead, the prohibition

results from the fact that the lodestar calculation already

reflects consideration of contingency. The contingency

factor cannot serve as an independent basis for enhancing

the fee award. Hensley, 461 U.S. at 434, n.9; Blum, 465 U.S.

at 898-900; Delaware Valley I, 478 U.S. at 565.

4. Contingency Risk Of Loss Enhancements Of The

Lodestar Amount Cannot Be Justified.

The presumption that compensation at a reasonable

hourly rate for all hours worked will be sufficient to

19

attract competent counsel is basic to fee-shifting statutes.

Without that presumption, there is no means by which

trial courts can make reasoned decisions respecting the

proper amount of an attorney’s fee award, nor is there

any means by which appellate courts can review deci-

sions of the lower courts to enforce the statutory require-

ment that fee awards be reasonable. Taking the

presumption as valid, the enhancement of a lodestar

amount computed, as it was in this case, by multiplying

all hours claimed to have been expended on litigation by

the reasonable hourly rate proposed by Respondents, is

not logically supportable. Such a lodestar figure, by defi-

nition, represents the maximum reasonably fee which

could be awarded under the fee-shifting statutes.

If a fee in excess of the lodestar is awarded, one of

two unavoidable conclusions must be drawn - either the

attorneys receiving such a fee are being compensated for

more hours that they expended on the matter or they are

being compensated at larger than reasonable hourly rate.

Either result constitutes a windfall, measured by the

amount of the enhancement, and represents an abuse of

discretion on the part of the court making the award.

As this case illustrates, a correctly computed lodestar

amount is more than presumptively indicative of a rea-

sonable attorney’s fee. It is the definitive maximum rea-

sonable fee which can be awarded under the fee-shifting

statutes.

In its prior decisions on the subject, this Court has

made passing reference to the possible circumstances

which might justify enhancement of a correctly computed

lodestar. Thus, in Hensley, the Court held “there remain

20

other considerations that may lead the district court to

adjust the [lodestar] fee upward or downward, including

the important factor of “results obtained.” 461 U.S. at 434.

The Court identified other Johnson factors which were not

subsumed in the lodestar calculation as possible bases for

such adjustments, id. at 434, n. 9, and provided that “in

some cases of exceptional success, an enhanced award

may be justified.” In Blum, the Court refused to rule out

the possibility of an upward adjustment of the lodestar,

saying “there may be circumstances in which the basic

standard of reasonable rates multiplied by reasonably

expended hours results in a fee that is unreasonably low

or unreasonably high.” 465 U.S. at 897. The opinion pro-

ceeded, however, to hold that the crucial “results

obtained” factor would normally not provide an indepen-

dent basis for increasing the fee award. Id. at 900. In its

most recent decision, the Court observed only that (1) the

courts may . . . adjust [the] lodestar calculation by other

factors,” Blanchard, 489 U.S. at 94, but that the lodestar

approach was the “centerpiece of attorney’s fees awards.”

Despite the Court’s apparent reluctance to abandon

enhancement, it is simply inconceivable that any adjust-

ment factor or combination of factors could ever justify a

fee award in excess of a correctly calculated lodestar. No

amount of success in obtaining relief would justify a

court compensating Respondents’ counsel for hours that

were not expended or at an excessive hourly rate.

21

5. The Failure Of The District Court And The Court Of

Appeals To Comply With Requirements Set Forth In

Hensley v. Eckerhart With Respect To The Award Of

Attorney’s Fees Was Erroneous And Constitutes An

Abuse Of Discretion.

For reasons set forth earlier in this brief, the Second

Circuit approach to the enhancement fee awards must be

rejected. The Circuit’s method, followed by the trial court

in this case is set forth in Lewis v. Coughlin, 801 F.2d 570

(2d Cir. 1986). The trial court is instructed to look to the

time that counsel agreed to take the case on a contingency

basis and determines if, at that time, competent counsel

would have perceived that there was a significant risk of

not prevailing and, if so, might have refused to accept the

case without the possibility of fee enhancement. Lewis, 801

F.2d at 576. If the answer is in the affirmative, the court

may, in its discretion, increase the lodestar fee by what-

ever amount the court, in its unfettered discretion, deems

necessary to bring the fee to the minimal amount neces-

sary to attract competent counsel.

All that a prevailing plaintiff must show, therefore, to

be entitled to an enhancement is the existence of a contin-

gent fee arrangement, an averment by counsel that there

was a significant risk of not prevailing, and an assertion

that competent counsel would not accept the case under

those conditions. Not surprisingly, affidavits of counsel in

this case to that effect were forthcoming. See, Affidavit of

Richard Bland (Jt.App. 18-24) (stating that all work asso-

ciated with the statutory liability claims was taken on a

contingent basis and opining that without the oppor-

tunity for enhancement, Respondents “would have faced

extreme difficulty in finding other counsel of similar

2

22

experience to pursue their claims . . . on an hourly rate to

be paid only on the contingency of success”); Affidavit of

William W. Pearson (Jt.App. 25-28) (opining that applica-

ble laws are complex, technical issues, are sophisticated,

and defendant is a political subdivision which does not

function or have priorities like a private sector party,

thereby increasing the uncertainty of strategy and out-

come).3

The trial court awarded Respondents attorney’s fees

of $198,027.50, expenses of $10,929.66 and a 25% risk/

contingency enhancement of $49,506.87 on findings that

Respondents’ attorneys would not have been compen-

sated unless Respondents prevailed, that the risk of not

prevailing was substantial as evidenced by the court's

denial of the preliminary injunction motion and the fact

that Respondents did not ultimately prevail until after

trial, and that Respondents would have faced substantial

difficulty obtaining competent counsel without the

opportunity for enhancement. (App. 133). The court alsc

found that no rare or exceptional circumstance: existed,

(App. 131), and made no findings as to whether the

Respondents’ success was exceptional or if the relief

° It is instructive to note that while Mr. Bland’s affidavit

indicates that the “opportunity” for enhancement was an

important factor in his firm’s decision to pursue the statutory

claims, his affidavit also indicates that he was still in law

school in April, 1985, when Respondents became Mr. Pearson’s

clients. Mr. Pearson said nothing in his affidavit about an

Opportunity for enhancement as motivating his decision to

take the case.

23

obtained was limited with respect to the litigation as a

whole, other than its conclusion that the expenditure of

all hours claimed by Respondents’ counsel was reason-

able because the litigation was complex. (App. 130).

Following the initial award of attorney’s fees, the

district court, by reference to its previous findings,

granted Respondents’ Supplemental Application for Fees

in the amount of $24,113, expenses in the amount of

$2,707.61 and a 25% enhancement of the fees, or $6,028.25

(App. 132). The district court offered no explanation for

its decision applying a 25% enhancement.

The Second Circuit Court subsequently granted

Respondents’ application for fees (Jt.App. 356) in the

amount of $53,315 for work associated with the appeal to

that court together with $2,240.34 in expenses, but denied

their request for a 25% risk enhancement, holding that

“the risk” involved in defending on appeal is not signifi-

cant and, in the circumstances of this case, called for no

enhancement. (App. 38-39).

The Second Circuit contingency risk of loss approach

to enhancement of the lodestar amount specifically rejects

the Hensley/Blum requirement that enhancement of the

lodestar fee is justified only in cases of exceptional suc-

cess. See, e.g., Lewis, 801 F.2d at 576 (“The district court

need not find the results achieved ‘exceptional’ within

the meaning of Blum.”).

The failure of the district court and the Second Cir-

cuit Court of Appeals to consider the relationship

between the amount of the fee awarded and the results

obtained, Hensley, 461 U.S. at 437, their failure to include

24

in their opinions and orders an explanation of their con-

sideration of the relationship between the amount of the

fees awarded and the results obtained, id. at 437, and

their failure to reduce the lodestar award, as more fully

explained in the following section of this brief, all consti-

tute abuses of discretion and require reversal of those

awards.

6. The Results Obtained In This Case Are Not Excep-

tional And Do Not Justify An Increased Fee. The

Results Obtained Are, In Fact, So Limited As To

Require A Reduction Of The Lodestar Amount.

The awards of attorney’s fees made by the district

court and the Second Circuit underscore the importance

of this Court’s holding in Hensley, 461 U.S. 424, emphasiz-

ing the importance of the “results obtained” justification

for any adjustment of the lodestar amount, and requiring

that any enhancement be justified by a finding of excep-

tional success. Id. at 435. No enhancement should occur if

comparison of the results obtained in the litigation to the

lodestar amount indicates that the “prevailing” party

enjoyed limited success. This case exemplifies that situa-

tion and underscores the importance of the second step in

the Hensley lodestar approach, a step which both courts

below wholly ignored.

The relief sought by Respondents in this case was

extensive. See Complaint, App. 244, 267-69. When faced

with the complaint, the City was forced to determine

whether the public interest justified the expenditure of

public funds and the incurrence of other costs which

25

compliance with the demanded relief would entail. Hav-

ing concluded that the public interest did not justify

those costs, the City defended against the imposition of

the relief sought by the Respondents, seeking to preserve

its rights under an existing state court order to operate its

landfill until January 1, 1990 and to otherwise continue

with its planned operations of the landfill. A review of

the orders and judgment issued by the district court

reveals that the City was entirely successful - none of the

relief sought by the Respondents was granted.‘ The status

quo ante did not change as a result of the Respondents’

complaint or the litigation that followed.

Neither the district court nor the court of appeals

considered the relationship of the lodestar to the results

obtained in this litigation. Under no reasonable standard

could a court, given the facts of this case, conclude that

Respondents achieved exceptional success or even excel-

lent results justifying a fully compensatory lodestar

award. There should be no enhancement for risk of loss

contingency or on any other basis. It is submitted instead

that a significant downward adjustment of the lodestar is

* The judgment entered in this matter requiring closure of

the landfill on January 1, 1990, should not be misconstrued.

The Respondents sought immediate closure of the landfill. As

indicated above, the ordered closure date was the same date

that had been set for closure prior to the filing of the com-

plaint. The “relief” reflected in the judgment is an indication of

the City’s position in the litigation, not any success on the part

of the Respondents.

26

required if, indeed, the results obtained in this litigation

can justify any award of attorney’s fees at all.5

°

CONCLUSION

For the reasons advanced in this brief, Petitioner

respectfully submits that this Court should reverse the

decision of the Second Circuit Court of Appeals with

respect to the award of both the lodestar fees and enhan-

cement thereof and remand this case to the district court

for determination of an award of reasonable attorney's

fees, if any, consistent with this Court’s holdings in

Hensley v. Eckerhart, 461 U.S. 424 (1983).

Respectfully submitted,

Micnaet B. Capp

Rosert R. McKeEarin

Freperick S. Lane III

Dinse, ERDMANN & CLapp

209 Battery Street

Burlington, Vermont 05402-0988

(802) 864-5751

Attorneys for Petitioner

March 12, 1992

> See Hensley v. Eckerhart, 461 U.S. 424, 429 (1986) (A

prevailing plaintiff “ ‘should ordinarily recover an attorney's

fee unless special circumstances would render an award

unjust.’ ” (quoting S. Rep. No. 94-1011, p. 4 (1976) quoting

Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402 (1968).