Petition for Writ of Certiorari — Sprenger, Olson & Shutes, P. A. v. Burlington Northern Railroad
Supreme Court brief1987
Ask Donna
What actually matters in this document.
Text
In THE
Supreme Court of the Anited States
Octroser TERM, 1986
SPRENGER, OLSON & SHUTES, P.A.
and DAVIS, MINER, BARNHILL & GALLAND,
Petitioners,
Vv.
BURLINGTON NORTHERN RAILROAD COMPANY,
Respondent.
PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
Lee A. FREEMAN, JR.*
James T. Matysiak
AxvBEertT F. ETTINGER
Attorneys for Petitioners
Of Counsel:
FREEMAN, Freeman & Sauzman, P.C.
401 North Michigan Avenue
Suite 2700
Chicago, Illinois 60611
(312) 222-5100
* Counsel of Record
Midwest Law Printing Co., Chicago 60611, (312) 321-0220
i
QUESTIONS PRESENTED
1. In the award of attorney’s fees to successful plain-
tiffs in civil rights litigation, is there a right to a multi-
plier to enhance fees because of the risk borne by plain-
tiffs’ attorneys where compensation was entirely depen-
dent upon success?
2. Should the undertaking of risk by civil rights attor-
neys be compensated only where the risk arises from reli-
ance on new legal theories of recovery or new remedies?
3. Does the District Court possess unreviewable discre-
tion to deny an attorney’s fees multiplier for risk borne
by plaintiffs’ attorneys in a civil rights case?
4. Is there a right to a multiplier of attorney’s fees
for obtaining outstanding results in a civil rights case?
ii
TABLE OF CONTENTS
QUESTIONS PRESENTED ..................
TABLE OF APPENDICES. . «...0666issccsuuss
TABLE OF AUTIBORITIBS 6.6 secs cncetcnass
CEN: ECAP ono kcvsccusnwnwscensaaces
STATEMENT OF JURISDICTION ...........
STATUTES INVOLVED cccacisnsicacsudcnes
STATEMENT OF THE CASE ...............
REASONS FOR GRANTING THE WRIT ....
I.
THE DECISION BELOW CONFLICTS WITH
CONGRESSIONAL POLICY BEHIND THE
CIVIL RIGHTS ATTORNEY’S FEES STAT-
UTES AND WITH THE DECISIONS OF OTHER
CTROCUETS ..icccncknnd kee seneeuenaeeenean
II.
THE RISKS OF NOT PREVAILING AT TRIAL
ON FACTUAL ISSUES MUST BE FULLY COM-
PENSATED TO ENCOURAGE VICTIMS OF
RACIAL DISCRIMINATION TO SEEK REM.-
EDIES UNDER THE CIVIL RIGHTS LAWS ..
III.
DISTRICT COURTS CANNOT BE GIVEN UN-
REVIEWABLE DISCRETION TO DENY EN-
HANCEMENT OF ATTORNEY’S FEES DE-
SPITE THE GREAT RISK BORNE BY THE
LITIGANTS AND THEIR COUNSEL ......
ill
IV.
PETITIONERS SHOULD BE REWARDED
FOR THE OUTSTANDING RESULTS OB-
TE te ia ek b-s 4500 deed kd ecesees 14
TABLE OF APPENDICES
APP.
PAGE
A— Opinion of Seventh Circuit, 810 F.2d 601 (7th
gas kd od Kd 404s dv eens danee A-1
B— Decision on Petition for Rehearing, 810 F.2d
TRIMMED 5g csc cccdcacssccecce B-1
C— Decision of District Court, 618 F.Supp. 1046
ee eons eS ska ev csoessecees C-1
D— Affidavit of Frank H. Easterbrook and Robert
ds guy iv cuaeavedeecccncs D-1
E— Unreported Decision of District Court, No.
78 C 269 (N.D. Ill., May 15, 1986) ......... E-1
lv
TABLE OF AUTHORITIES -
CASES: PAGE(S)
Almond v. Boyles, 792 F.2d 451 (4th Cir. 1986) ..
Bebchick v. Washington Metropolitan Area Transit
Commission, 805 F.2d 396 (D.C. Cir. 1986) ..
Craik v. Minnesota State University Board, 738
ee 8 Bk ae. rrr err
Davis v. Combustion Engineering, Inc., 742 F.2d
fF es |) eer errr r rer rrr ere
Fine Paper Antitrust Litigation, In re, 751 F.2d
Se ee Gs NE Siok wk as Fed v ca ncesceedses
General Telephone Co. of the Southwest v. Falcon,
rk Sg error rrr errr
Hall v. Board of School Commissioners of Conecuh
County, 707 F.2d 464 (11th Cir. 1983) .....
Hensley v. Eckerhart, 461 U.S. 424 (1983) ....
Jones v. Diamond, 636 F.2d 1364 (4th Cir. 1981) .
Kirchoff v. Flynn, 786 F.2d 320 (7th Cir. 1986) ..
Lattimore v. Oman Construction, 795 F.2d 930
es Oe Ee 5s ven e uve Coes saeak eas oo
Lewis v. Coughlin, 801 F.2d 570 (2d Vir. 1986) ..
Movement for Opportunity & Equality, Inc. v.
General Motors, Inc., 622 F.2d 1235 (7th Cir.
SD A iacs <x d cud new ke iuee dees kan
Northcross v. Bd. of Education, 611 F.2d 624 (6th
Cir. 1979), cert. denied, 447 U.S. 911 (1980) ..
7
13
Vv
Pennsylvania, Commonwealth of v. Delaware Valley
Citizens’ Council for Clean Air, No. 85-5 .... 5,6,7
Pennsylvania, Commonwealth of v. Delaware Valley
Citizens’ Council for Clean Air, ___ US.
—omenp BOO OL, BORD COORD wo ccc wccuce 14
Ridenour v. Montgomery Ward & Co., 786 F.2d
ae Gee: Gee SUE bo oboe se ekdkaee 7
Waters v. City of Atlanta, 803 F.2d 1135 (11th Cir.
OE EET ee MRT Symes fon 6
Wildman v. Lerner Stores Corp., 771 F.2d 605 (1st
CA POU heed béckadacdecetsadael eee 6
STATUTES:
Civil Rights Act
Te Wide, WOE noah ceca bisinecee ee 3
SE UB. GOO hie weiscasscaccss 2,6, 10, 14, 15, 16
3,6
In THE
Supreme Court of the Anited States
Octoser Term, 1986
SPRENGER, OLSON & SHUTES, P.A.
and DAVIS, MINER, BARNHILL & GALLAND,
Petitioners,
Vv.
BURLINGTON NORTHERN RAILROAD COMPANY,
Respondent.
PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
Petitioners respectfully pray that a writ of certiorari be
issued to review the decision of the Court of Appeals for
the Seventh Circuit entered in this proceeding on October
2, 1986. Despite the risks faced by petitioners in litigating
a vigorously defended racial discrimination case against
Burlington Northern, Inc. for six years strictly on a con-
tingency basis, the District Court and Court of Appeals
denied any enhancement of the hourly fees awarded. Even
though petitioners prevailed through a settlement reached
in the early morning hours of the day trial was to begin,
gaining thereby a $10 million monetary recovery and in-
junctive relief worth millions of dollars more for the vic-
tims of racial discrimination, the courts below held that
there is no right to a multiplier of the hourly fees based
on risk or on the outstanding results achieved.
ae
OPINIONS BELOW
——_———_
The opinion of the Court of Appeals, attached hereto
as Appendix A, is reported at 810 F.2d 601 (7th Cir. 1986).
The order of the Court of Appeals denying rehearing, at-
tached hereto as Appendix B, is reported at 810 F.2d 611
‘7th Cir. 1987). The decision of the District Court, at-
tached hereto as Appendix C, is reported at 618 F.Supp.
1046 (N.D. Ill. 1985).
STATEMENT OF JURISDICTION
The Court of Appeals decision was made on October 2,
1986. Petitioners’ petition for rehearing and suggestion
for rehearing en banc was filed October 14, 1986. The
petition was denied on February 23, 1987. Therefore, this
petition for writ of certiorari is timely filed under 28
U.S.C. §2101(e).
STATUTES INVOLVED
42 U.S.C. §1988:
* * * In any action or proceeding to enforce a pro-
vision of sections 1981, 1982, 1983, 1985, and 1986 of
this title, title IX of Public Law 92-318, or title VI
of the Civil Rights Act of 1964, the court in its dis-
cretion, «:.uy allow the prevailing party, other than
the United States, a reasonable attorney’s fee as part
of the costs.
=
42 U.S.C. §2000-e(k):
In any action or proceeding under this subchapter
the court, in its discretion, may allow the prevailing
party, other than the Commission or the United States,
a reasonable attorney’s fee as part of the costs * * *.
STATEMENT OF THE CASE
In 1978, petitioners, two small law firms from Minne-
apolis and Chicago, filed lawsuits under 42 U.S.C. §1981
and Title VII on behalf of several black employees of Bur-
lington Northern, Inc. (“BN”). These suits were ultimately
consolidated into a class action alleging that throughout
its railroad operations, BN had discriminated against blacks
in hiring, firing, discipline, promotion, and transfer.
Over a six year period, petitioners invested over 17,000
hours of attorney and paralegal time in the case, which
settled only a few hours before trial was to begin on
November 7, 1983. Petitioners made this investment with-
out any assurance that they would be awarded any fee
or even be reimbursed for almost $1 million in expenses
that lead counsel were forced to incur in order to prose-
cute the case to a successful conclusion.
Despite this risk, petitioners conducted extensive dis-
covery and fully prepared the case for trial against vigor-
ous opposition by two nationally prominent defense firms;
no substantial settlement discussions occurred until trial
was imminent. All of the witnesses in the fee petition
hearing agreed that had the case gone to trial, plaintiffs
had less than a fifty-fifty chance of prevailing, and even
less possibility of obtaining the type and scope of relief
embodied in the Consent Decree.
a wn
The settlement achieved is the largest Title VII race
discrimination settlement ever reached. BN agreed to set
up a non-reversionary back pay fund of $10 million, with
plaintiffs receiving the benefit of interest earned on the
fund until distributed, and to injunctive relief that, accord-
ing to one expert witness, was worth an estimated $57.5.
million to the class, depending upon BN’s future business
operations. The settlement also provided that BN would
pay the reasonable fees and costs of plaintiffs’ counsel.
Petitioners filed their request for fees and expenses in
May 1984. Petitioners requested an aggregate hourly rate
fee (or “lodestar’’) of $2,184,165.50 and an enhancement
or multiplier under Hensley v. Eckerhart, 461 U.S. 424
(1983).
Following extensive discovery by BN, the District Court
held an evidentiary hearing on the fee petition in Novem-
ber 1984. On September 20, 1985, it awarded the “‘lode-
star” fees sought but refused to award a multiplier to
compensate for risk or to reward the outstanding results
obtained for the class. The District Court held that “the
chance of not prevailing” and the unique “difficulties of
trial’ posed by this case did not constitute the type of
“risk” that is relevant in determining the amount of fees
to be awarded in civil rights cases. The District Court
acknowledged that plaintiffs could lose this case, because
of the serious claims asserted and the intense opposition
by BN, but it held, as a matter of law, that the only type
of “risk” that would justify enhancement was reliance on
novel legal theories or remedies, a concept that the Dis-
trict Court equated with “exceptional success.” 618 F.
Supp. at 1062; App. C-31. The District Court further held
that the extraordinary extent of relief obtained in the face
of the conceded evidentiary and practical obstacles over-
come by plaintiffs did not qualify as exceptional, because
onlin
counsel “did not create any new form of remedy” or es-
tablish any new rule of law. Jd. at 1064; App. C-35.
The Court of Appeals, while recognizing that the law
regarding enhancement to compensate for risk is unsettled
and that this Court will likely rule on the propriety of
risk multipliers in Pennsylvania v. Delaware Valley Citi-
zens’ Council for Clean Air, No. 85-5, affirmed the Dis-
trict Court decision on all major issues. The Court of Ap-
peals stated that the District Court had not abused its
discretion in awarding only the lodestar fees, but its opin-
ion in effect held that a risk multiplier should never be
used:
Even in the absence of questions concerning the pro-
priety of risk multipliers, we would consider disposi-
tive the district court’s finding that this case involved
factual complexities and difficulties of trial prepara-
tion, but not the kind of significant risk engendered
by having to rely on new legal theories of recovery
or new remedies. 810 F.2d at 608; App. A-12.
The Seventh Circuit also affirmed the District Court’s
holding that lodestar fees can be enhanced for the results
achieved only in rare, “landmark” cases that create new
theories or remedies. Jd. at 607; App. A-10-11.
= =
REASONS FOR GRANTING THE WRIT
——<$—————
THE DECISION BELOW CONFLICTS WITH CONGRES-
SIONAL POLICY BEHIND THE CIVIL RIGHTS ATTOR-
NEY’S FEES STATUTES AND WITH THE DECISIONS OF
OTHER CIRCUITS.
The Seventh Circuit refused to uphold the use of a risk
multiplier under 42 U.S.C. §§1988 and 2000e-(k). While
holding open a slim possibility that a risk multiplier might
be appropriate in the rarest of cases, its denial of enhance-
ment of fees here demonstrates a conflict with the Con-
gressional policy behind Section 1988 to encourage the fil-
ing of meritorious, but risky civil rights litigation.
The question whether a risk multiplier can ever be ap-
propriate is before the Court in Pennsylvania v. Delaware
Valley Citizens’ Council for Clean Air, No. 85-5, argued
October 15, 1986. Certiorari was granted in that case in
part to resolve the conflict among the circuits on the pro-
priety of a risk multiplier.
The circuit courts certainly are in complete disarray.
Many courts have held or clearly stated that a multiplier
should be given in a contingent case involving significant
risk. See Waters v. City of Atlanta, 803 F.2d 1135, 1152
(11th Cir. 1986); Lewis v. Coughlin, 801 F.2d 570, 576 (2d
Cir. 1986); Kirchoff v. Flynn, 786 F.2d 320, 326 (7th Cir.
1986); Wildman v. Lerner Stores Corp., 771 F.2d 605, 613
(1st Cir. 1985); In re Fine Paper Antitrust Litigation, 751
F.2d 562, 587 (3d Cir. 1984); Craik v. Minnesota State
University Board, 738 F.2d 348, 350 (8th Cir. 1984); Jones
v. Diamond, 636 F.2d 1364, 1382 (4th Cir. 1981). Other
circuit courts have held that a multiplier should be given
to compensate for risk only in the unusual or exceptional
pa AM
case. See Bebchick v. Washington Metropolitan Area Transit
Commission, 805 F.2d 396, 407 (D.C. Cir. 1986); Lattimore
v. Oman Construction, 795 F.2d 930 (11th Cir. 1986); Al-
mond v. Boyles, 792 F.2d 451, 457 (4th Cir. 1986); Davis
v. Combustion Engineering, Inc., 742 F.2d 916, 924 (6th
Cir. 1984).
The court below and the court in Ridenour v. Mont-
gomery Ward & Co., 786 F.2d 867, 869 (8th Cir. 1986),
appear to hold that there is never a right to receive a
multiplier as compensation for having undertaken risk.
Moreover, the lower courts in this case have now created
a new conflict. Unlike other courts upholding or denying
a risk multiplier based on the risk faced by plaintiffs of
losing on the merits, the courts below redefined “risk”
to mean reliance on novel legal theories or remedies.
If the use of a risk multiplier is approved in Delaware
Valley, the judgment below in this case must, at the very
least, be vacated for reconsideration in light of this Court’s
decision. However, this case presents the Court with a
suitable and compelling opportunity for determining how
a risk riultiplier should be applied in civil rights litiga-
tion and the extent of discretion that a district court has
in this area. Indeed, given the Seventh Circuit’s lack of
a clear holding, a mere vacating of its decision without
specific guidance will likely be futile.
Il.
THE RISKS OF NOT PREVAILING AT TRIAL ON FAC-
TUAL ISSUES MUST BE FULLY COMPENSATED TO EN-
COURAGE VICTIMS OF RACIAL DISCRIMINATION TO
SEEK REMEDIES UNDER THE CIVIL RIGHTS LAWS.
The standards applied by the courts below foreclose
multipliers in virtually all circumstances. Both courts,
though some of their reasoning is unclear, clearly held
=
that such a multiplier may be appropriate only when the
litigants successfully establish new legal theories or create
new remedies. On the other hand, if, as in this case, a
civil rights case involves difficult evidentiary issues and
problems of proof that might lead to plaintiffs’ defeat at
trial, the courts held that no risk multiplier is proper:
This Court must immediately correct this significant error
in construction of the civil rights laws. The courts below
have turned the law on its head in this area. Incentives
for bringing risky cases certainly should not be limited
to lawyers who rely upon new theories or advance exotic
remedies. The law should encourage filing racial discrim-
ination claims that are well-founded on prior case law and
statutes, but require difficult discovery and evidentiary
proceedings to establish the fact of racial discrimination,
particularly on a class-wide basis in employment cases.
The courts below disparaged the risks that result from
evidentiary as well as other trial problems without ex-
tended discussion. The lower courts completely ignored
the affidavit filed by then Professor, now Judge, Frank
H. Easterbrook fully explaining why the risk in this type
of case called for application of a multiplier. The Easter-
brook affidavit pointed out, for example, that:
Burlington Northern has attempted throughout to es-
tablish that any evidence of discrimination should be
treated as isolated, that each plant or line of progres-
sion must be analyzed on its own. That defense multi-
plies the costs and the risks plaintiffs face. Impor-
tant non-statistical evidence in this case was obtained
only after this Court’s order of December 10, 1982,
required Burlington Northern to release its “self-
critical analysis,” which contained damning evidence
of system-wide discrimination. When this litigation
began in 1978, the plaintiffs did not know that Bur-
lington Northern would assemble such evidence, and
~
they certainly had no assurance of receiving it. (Bur-
lington Northern litigated to keep the evidence from
plaintiffs’ hands, and it took a decision of the Eighth
Circuit to override the claim of privilege.) App. D-11-12.1
This case is a prime example of the severity of the risk
faced by plaintiffs’ counsel in a case supposedly without
“novel” elements. During the course of discovery the
Seventh Circuit changed the governing law on the nature
of evidence required to prove systematic employment dis-
crimination. Plaintiffs had planned to use “snapshot”
Statistics to show at a given time the large discrepancy
between BN’s employment of blacks in particular areas
and the racial composition of the labor force in those
areas. This type of plaintiffs’ case could have been
prepared without the enormous time and expense ulti-
mately incurred. But the Seventh Circuit held in Move-
ment for Opportunity & Equality, Inc. v. General Motors,
Inc., 622 F.2d 1235 (7th Cir. 1981), that “snapshot’’ statis-
tical proof was insufficient and that proof of the racial
pattern of particular employment decisions over particular
time periods would be demanded. During the same period,
courts began insisting on sophisticated multiple regres-
sion analyses to take account of the simultaneous effects
of the different variables that affect employment decisions.
As a result, plaintiffs had to scrap their original plan and
instead assemble, over a two-year period, a massive amount
of employment data at a cost of nearly a million dollars,
to make out their case.
In addition, BN used two major law firms over the course
of the case and paid nearly $3 million in fees to the firm
that took over responsibility for trial preparation in
"The Easterbrook affidavit is reproduced in its entirety as Appendix
D hereto.
=
August 1982, and charged BN for more than 22,000 hours
of work in only 18 months. Plainly, BN’s marching orders
to its counsel were to spare no expense in conducting dis-
covery and raising vigorous defenses to each of plaintiffs’
claims. This strategy magnified both the risk and the cost
of not prevailing faced by petitioners.
It is also indisputable that the economic reasons for a
risk multiplier—to induce competent counsel to undertake
civil rights litigation rather than cases that they could
take under a normal fee arrangement—are the same whether
the risk arises from difficult legal questions, substantial
evidentiary issues, or a combination of both. As Professor
Easterbrook concluded:
(1) in order to induce competent counsel to take diffi-
cult litigation of this sort, it is necessary to offer the
prospect of fees that will make them at least as well
off as if they worked at their market rates for clients
who paid when billed; (2) when payment will be de-
layed and there is a risk of non-payment or payment
at a level insufficient to meet the market value stan-
dard, it is necessary to increase the payment (to award
a multiplier) so that the anticipated remuneration
equals the market rate; (3) this case was marked by
both delay and substantial risk. We therefore con-
clude that a substantial multiplier is in order. App.
D-1-2.
The decisions below obviously lost track of the real pur-
pose of these civil rights laws, including Section 1988.
These statutes were not enacted merely to reward attor-
neys for work voluntarily undertaken, but rather to see
that the civil rights of minorities in particular are vindi-
cated and that violations are fully remedied. By denying
an award of attorney’s fees that compensates for risk, the
lower courts have guaranteed that similar meritorious
eases, particularly involving substantial classes of black
=|
employees, will not be filed in the future. It is complete-
ly illogical to suggest that victims of racial discrimination
whose cases happen to involve novel legal theories or
remedies should be encouraged to bring their lawsuits,
whereas victims of pervasive but subtle racial discrimi-
nation who face evidentiary problems in establishing their
claims, in part because of the scope and magnitude of the
illegal discrimination, should be deterred from filing their
actions. Yet that is what the reasoning of the courts be-
low entails. Further, the decisions below perversely en-
courage the filing of pleadings artfully drafted to appear
novel in either theory or remedy, and discourage straight-
forward use of established theories of liability and rem-
edies in cases’ in which the risk arises mainly from evi-
dentiary issues. It is also clear that the decisions below
will encourage defense counsel to employ dilatory tactics
to wear plaintiffs down and increase the cost of losing
faced by plaintiffs’ counsel.
ITI.
DISTRICT COURTS CANNOT BE GIVEN UNREVIEW-
ABLE DISCRETION TO DENY ENHANCEMENT OF AT-
TORNEY’S FEES DESPITE THE GREAT RISK BORNE
BY THE LITIGANTS AND THEIR COUNSEL.
The Seventh Circuit, in its order denying rehearing, cau-
tioned that it was not holding that a risk multiplier could
never be used to enhance awards of attorney’s fees to
successful civil rights litigants:
[W]e did not address whether the lodestar amount
should ever be adjusted upward to compensate for
the risk of loss. Neither did we address whether,
assuming this type of adjustment is legitimate, the
use of a multiplier is an appropriate means to achieve
this purpose. App. B-3.
=e
Instead, it claimed that it was relying upon the District
Court’s exercise of discretion under all the circumstances
of the case. App. B-2. Under the facts here, this “hold-
ing” is revealed as nothing more than empty rhetoric to
dispose conveniently of a troublesome trial court decision.”
The District Court exercised no discretion. It refused to
apply a multiplier as a matter of law. Therefore, the Court
of Appeals could not properly dodge the multiplier issue;
indeed, that was the main issue before it.
The evidence was uncontradicted at the District Court
hearing that plaintiffs’ chances at trial were less than
“fifty-fifty”’ of securing the relief sought because their evi-
dence may have been found insufficient to establish sys-
tematic racial discrimination.* Moreover, there was a serious
risk after the decision in General Telephone Co. of the South-
west v. Falcon, 457 U.S. 147 (1982), that the class action
determination may have been reversed by the District Court
or on appeal, which effectively would have terminated the
case. There was still the further risk that plaintiffs might
2 That the District Court’s denial of a multiplier was based on
a misunderstanding of the law is further demonstrated by the
Court’s later order allowing only 65% of the hourly fees incurred
in litigating the first attorney’s fees request. The District Court
justified this substantial cut from the lodestar on the basis that
it was “unreasonable” for petitioners to have even asked for a
multiplier. Memorandum opinion dated May 15, 1986, App. E-8,
n.10. However, at the time petitioners requested a multiplier there
was abundant case law, even in the Seventh Circuit, upholding
the practice, and the testimony that plaintiffs introduced regard-
ing the risk of losing the case and for the enhancement to en-
courage talented lawyers to represent civil rights plaintiffs was
uncontroverted.
3 Indeed, the Assistant General Counsel of the EEOC evaluated
plaintiffs’ odds at the start of the case of achieving all the relief
rg class members received from the settlement at less than one
in five.
=< =
fail to establish damages. Under these circumstances, the
Seventh Circuit necessarily held that the District Court
had unreviewable discretion to deny a risk multiplier
despite the uncontroverted presence of substantial risk
and the admission by the District Court that such risk
of losing the case existed.4 At least two circuit court deci-
sions directly conflict with the court below on this issue
by reversing as an abuse of discretion district court denials
of a multiplier for risk. In re Fine Paper, 751 F.2d at
587; Hall v. Board of Commissioners of Conecuh County,
707 F.2d 464 (11th Cir. 1983).5
Plainly, the trial court must be given considerable scope
to weigh the various factors that bear on the attorney’s
4 The uncontradicted evidence at trial submitted to the District
Court established that, without the availability of a multiplier to
compensate for risk of loss, no competent attorney could be ex-
pected to undertake the tremendous financial burden of a case such
as this one. The District Court made no findings on this point be-
cause it found it irrelevant. Its decision instead rests on the view
that a multiplier for risk or exceptional success is unnecessary be-
cause dedicated counsel will be found who will be willing to make
an economic sacrifice to help vindicate their clients’ rights.
Congress, however, plainly disagreed when it enacted Section 1988.
The purpose of that statute “was to ensure that the representation
of important national concerns would not depend upon the charitable
instincts of a few generous attorneys.” Northcross v. Bd. of Educa-
tion, 611 F.2d 624, 638 (6th Cir. 1979), cert. denied, 447 U.S. 911
(1980).
5 The Court of Appeals also sidestepped the real issues by rely-
ing on the fact that petitioners were awarded fees based upon
their 1984 rates, giving this fact three improper applications: as
a reason for not awarding a success multiplier, 810 F.2d at 607,
as a reason for not awarding a risk multiplier, 810 F.2d at 608,
and as a reason not to give a multiplier to compensate for delay
in payment, 810 F.2d at 609. This is particularly unfair in view
of the fact that the only evidence in the case on the effect of pay-
ing at 1984 rates is that it did not adequately compensate even
for the delay factor. See App. D-8-9.
=o
fee decision, but simply ignoring the presence of risk, or
rejecting its significance, is no exercise of discretion. If
risk is to be a factor in enhancing attorney’s fees awards,
then the District Court decision here, rubber-stamped by
the Court of Appeals, was completely arbitrary and un-
founded.
IV.
PETITIONERS SHOULD BE REWARDED FOR THE
OUTSTANDING RESULTS OBTAINED.
It is firmly established that attorney’s fees awards should
be enhanced under Section 1988 if outstanding results are
obtained by plaintiff's counsel. See Pennsylvania v. Dela-
ware Valley Citizens’ Council, __ U.S. , 106 S. Ct.
3088, 3099 (1986); Hensley v. Eckerhart, 461 U.S. 424, 435
(1983). The courts below grudgingly admitted that plain-
tiffs achieved a great success in the settlement finally
reached on the eve of trial.* Yet the District Court warped
6 The evidence before the District Court demonstrated that the
relief achieved by petitioners was truly exceptional. Julius LaVonne
Chambers, Director-Counsel of the NAACP Legal Defense and Edu-
cational Fund, in an affidavit, which was admitted in the fee hear-
ing and was uncontraverted, stated that:
“This case resulted in extraordinary relief for the plaintiffs.
If not the largest, it is one of the largest race discrimination
cases ever settled. To my knowledge, there has never been
a settlement in the railroad industry with comparable relief.”
Bruce Elvin, Assistant General Counsel of the Equal Employment
Opportunity Commission, further confirmed that:
“Since the passage of the Civil Rights Act of 1964 . . . thousands
of class actions of EEOC pattern or practice cases have been
settled or litigated . . . and well over a thousand EEOC charges
have been filed against railroads. And yet in not a single one
of these instances has a class of race decriminetion plaintiffs
secured relief greater than that obtained here.”
==
the “exceptional success” standard by construing it to
mean only “historic” cases establishing new legal theories
or remedies. Perversely, this would mean that each suc-
cessful result obtained by civil rights attorneys would
make it more difficult for subsequent victims of racial dis-
crimination to find the wherewithal to obtain their rem-
edies. Here plaintiffs and their attorneys fought for years
against a major corporation willing to expend great sums
to keep its history of racial discrimination hidden. Plain-
ly, BN sought to wear down plaintiffs and their counsel
and to make the case too expensive for them to pursue
to trial. The plaintiffs and their attorneys took the full
brunt of that challenge, assumed the full risk that no re-
covery for the class would be achieved, that 17,000 hours
of time would never be compensated and that nearly $1
million in costs would not be reimbursed, and finally forced
BN into a sweeping settlement that obtained millions of
dollars in remedies for thousands of class members and
opened up many new job opportunities in an industry that
has been traditionally closed to racial minorities. It is in-
explicable that the courts below, given this record, would
deny even the possibility that these achievements merit
special rewards so that other attorneys are encouraged
to bring similar actions.
CONCLUSION
The courts below lost sight of the goals of the civil
rights laws and the reasons why Congress enacted Sec-
tion 1988. They approached this matter as cost-conscious
accountants limiting attorney’s fees to the minimal amount
required for reimbursement based upon hours spent on
oe
the case. But Section 1988 clearly intended to do more
than that: to ensure that civil rights victims could retain
strong and competent counsel to pursue difficult litigation
and achieve significant remedies. The decisions below
represent a resounding step backward in the enforcement
of the civil rights laws.
Petitioners ask the Court to grant their petition and
set this case for full argument and decision.
Respectfully submitted,
LEE A. FREEMAN, JR.*
JAMES T. MALYSIAK
ALBERT F. ETTINGER
Attorneys for Petitioners
Of Counsel:
FREEMAN, FREEMAN & SALZMAN, P.C.
401 North Michigan Avenue
Suite 2700
Chicago, Illinois 60611
(312) 222-5100
Dated: May 22, 1987 * Counsel of Record
A-1
APPENDIX A
IN THE
UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
Nos. 85-2898, 85-3087
IN RE: BURLINGTON NORTHERN, INC.
EMPLOYMENT PRACTICES LITIGATION
APPEALS OF: PAUL C. SPRENGER, et al.,
Lead Counsel-Appellants,
WILLIAM E. MCBRIDE, et al.,
Plaintiffs-Appellants,
and
AMERICAN TRAIN DISPATCHERS
ASSOCIATION, AFL-CIO, et al.,
Defendants-Appellants.
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 78 C 269—George N. Leighton, Judge.
ARGUED May 16, 1986—DeEcIDED OcTOBER 2, 1986
Before CUDAHY and FLAuM, Circuit Judges, and CAMP.
BELL, Senior District Judge.*
* The Honorable William J. Campbell, Senior District Judge for
the Northern District of Illinois, is sitting by designation.
A-2
FLaum, Circuit Judge. This appeal involves two issues
left unresolved after the settlement of a multi-million-
dollar Title VII race discrimination class action against
the Burlington Northern railroad and its unions. The dis-
trict court in Chicago certified the class, composed of black
employees throughout the BN system, in 1978, and in 1979
the Judicial Panel on Multidistrict Litigation consolidated
in Chicago all the Title VII race discrimination cases pend-
ing againt BN in several districts. The district court ap-
pointed as lead counsel for plaintiffs the Minneapolis firm
of Sprenger, Olson & Shutes and the Chicago firm of Davis,
Miner, Barnhill & Galland. After years of preparation and
discovery, the case was settled a few hours before trial
was to begin on November 7, 1983. The settlement, as
embodied in a consent decree, provided injunctive relief
and created a fund of $10 million for back pay compensa-
tion, as well as providing that plaintiffs’ counsel would
be paid reasonable fees. This fees provision is the basis
for the two issues presented in this action: (1) what is
a reasonable fee and (2) who among the defendants shares
responsibility for paying the fees. The lead law firms ap-
peal the district court’s refusal to award them anything
above the “lodestar” figure, obtained by multiplying their
reasonable hours by reasonable hourly rates, plus post-
judgment interest. The unions appeal the district court’s
order requiring them to contribute to BN’s payment of
the lead counsel’s fees. We affirm both of the district
court’s rulings, although we reverse a minor part of the
district court’s order concerning the apportionment of the
fees awarded.
I. FACTS.
A. The Consent Decree. The class action against BN
involved claims of discrimination in hiring, discipline, dis-
charge, assignment, and promotion, and the defendants
mounted a vigorous defense to the case. Many of the
plaintiffs’ discovery requests were opposed, see In Re
Burlington Northern, Inc., 679 F.2d 762 (8th Cir. 1982),
and plaintiffs’ lead counsel alone (there were additional
A3
counsel pursuing “tagalong” cases and representing the
intervening EEOC) expended some 12,228 hours and 5,158
hours of paralegal time in prosecuting the action. The re-
lief provided by the consent decree was extensive. In ad-
dition to the $10 million fund, which was to be paid out
to claimants who could establish that they had been sub-
jected to racial discrimination in hiring, promotion, or dis-
charge, the decree bound Burlington Northern to a wide
range of injunctive measures, including hiring and promo-
tional requirements, references for discharged employees,
seniority protection for promoted employees, and training
programs.
The last provision of the consent decree provided the
following:
Counsel for private plaintiffs and EEOC shall be
paid their costs including experts’ fees, and including
(except as to EEOC) reasonable attorneys’ fees, on
all issues involved in this litigation, determined as
follows. The parties shall meet and attempt to agree
upon the amount of such fees and costs within four-
teen days of the entry of the decree. Counsel for
plaintiffs and EEOC will to the extent feasible iden-
tify the portion of their costs and fees chargeable to
the scheduled transfer and promotion or craft seniori-
ty issue. In the event the parties are unable to agree
in whole or in part within an additional 30 days, any
unresolved issues, including any issue as to the ap-
portionment of those costs and fees among all defen-
dants, shall be presented to the court for resolution
upon petition of counsel for plaintiffs and EEOC. BN
and the unions may litigate the amount of the costs
and fees sought.
BN will not dispute the entitlement of counsel for
private plaintiffs and EEOC to reasonable costs, in-
cluding (except as to EEOC) reasonable attorney’s
fees, as provided above, on any issue but may seek
apportionment of those costs and fees among all de-
fendants or contribution from the unions for an allo-
cable portion of those costs and fees.
A-4
The defendant unions do not agree that private
plaintiffs and EEOC are entitled to any costs and
fees from them. The defendant unions may make
whatever objections they deem appropriate to the
private plaintiffs’ and EEOC’s petition as well as to
any effort by BN to secure apportionment or contri-
bution for an allocable portion of those costs and fees.:
The decree was signed by counsel for plaintiffs, BN, the
EEOC, and the unions on November 21, 1983 and was
formally approved by the court on April 2, 1984.
B. The Attorneys Fees Action. The EEOC and “‘tag-
along’ counsel came to an agreement with BN and the
unions whereby they would receive nearly $1 million in
fees and costs. The two lead counsel were unable to set-
tle with the defendants on the issue of fees, however, and
filed petitions for fees and costs with the district court.
The petitions documented some $1.1 million in advanced
expenses, and the district court ordered BN to pay this
sum “subject to its right to seek contribution from the
union defendants.”’ As to fees, the lead counsel presented
a “lodestar” figure of $2,184,165.50, which represented
12,228.2 attorney hours and 5,157.8 paralegal hours mul-
tiplied by various hourly rates. Lead counsel sought in-
terest on this figure from the date of the consent decree’s
approval. Counsel further requested that the lodestar fig-
ure be subjected to a multiplier of 2.5 for the attorney
fees, bringing the total fees requested to $4,981,145.00,
plus interest. BN conceded that the hours expended were
reasonable, but objected to the hourly rates requested by
the lead counsel and to the use of a multiplier. BN fur-
ther claimed that 'ead counsel were not entitled to inter-
est on the fees from April 2, 1984, the date of the con-
sent decree’s final approval. Finally, BN requested that
the district court order the defendant unions to assume
responsibility for some portion of the fees and costs.
The district court received briefing and affidavit testi-
mony regarding these remaining disputes, and it issued
an opinion on September 20, 1985. The district court found
A-5
that the requested hourly rates were reasonable, given
that “the object of a fee determination is to simulate the
results which would be obtained if the lawyer involved
were dealing with a paying client.” The district court
noted that as to each lawyer involved, “there is evidence
that the hourly rates requested have either been paid by
clients or awarded to them by a court in the past,” and
that “(t]he requested rates approximate, as close as these
matters can, the prevailing ones paid to comparable at-
torneys in the relevant community.” The total lodestar
fee of $2,184,165.50 thus was awarded, along with interest
from the date of the “order entered in accordance with
this memorandum.” The district court concluded that in-
terest should not be calculated from the date of the
decree’s approval, since prejudgment interest was not
merited and would be “grossly unfair” to BN.
The district court further declined to apply a multiplier
to the lodestar figure. The lead counsel had argued that
the exceptional success they achieved, and the extreme
risk they undertook in representing the plaintiff class,
merited upward adjustment of the fee award, and that
multipliers are necessary in order to attract sufficient
numbers of counsel to represent Title VII plaintiffs. The
district court undertook a review of the applicable Su-
preme Court precedent involving fee-shifting provisions
in civil rights laws, as well as case law from the circuits,
and noted that one factor in the determination of whether
to apply a multiplier is “exceptional success.” Hensley v.
Eckerhart, 461 U.S. 424, 435 (1983) (‘Where a plaintiff has
obtained excellent results, his attorney should recover a
fully compensatory fee. Normally this will encompass all
hours reasonably expended on the litigation, and indeed
in some cases of exceptional success an enhanced award
may be justified.”). The district court went on to acknowl-
edge that the later case of Blum v. Stenson, 465 U.S.
886, 898 (1984), clearly burdened the fee applicant with
proving that an upward adjustment was necessary in order
to obtain a reasonable fee. The district court went on to
review the evidence submitted by the parties and found
A-6
that the lead counsel had failed to establish that the suc-
cess they had achieved was so “rare or uncommon”’ as
to warrant a multiplier.
In addition to identifying exceptional success as a factor
in its determination, the district court evaluated the lead
counsel’s argument that the ex ante risk they took in un-
dergoing the representation was so great that the lodestar
had to be adjusted upward in order to compensate them
fully ex post. The district court concluded that although
the risks of Title VII litigation may be relevant to the
fee determination, the lead counsel had not met their
burden of demonstrating that anything beyond the general
risks of litigation were present at the outset of this class
action. The district judge found that counsel’s evidence
concerned merely the difficulties associated with preparing
any big case for trial, as opposed to the kind of risk war-
ranting greater-than-lodestar compensation. Distinguishing
the case of Thompson v. Sawyer, 678 F.2d 257 (D.C. Cir.
1982), in which a multiplier had been awarded, the district
court pointed out that the Thompson plaintiffs had relied
on a new theory of discrimination and a new form of rem-
edy for their success, and had created a new rule of law
in the process. Since the district court found that the BN
litigation involved none of these features, it held that the
kind of risk warranting the use of a multiplier was not
present. The court also found incredible the lead counsel’s
evidence claiming that the risks of Title VII litigation in
general were such that multipliers were necessary in order
to attract competent counsel. As a final factor in its deci-
sion to deny a multiplier, the district court commented
that in its award of a full lodestar, it had granted top
current hourly rates for all of the hours that counsel had
expended during the six years of litigation, even though
during many of those years they could not have commanded
those rates. As a result, the district court was convinced
that it had awarded a fully compensable fee.
On the final issue of the unions’ contribution to the lead
counsel’s fees and costs, the district court found that: (1)
the consent decree contemplated that BN would seek con-
A-7
tribution from the unions, which preserved their rights
to object; (2) Title VII case law does not prohibit contri-
bution from defendant unions and in fact provides numer-
ous examples of such an allocation of attorneys fees and
costs; and (3) the plaintiffs obtained enough success in
seniority-related issues against the unions to be considered
“prevailing parties” as to them. Accordingly, the district
court ordered that fifty percent of fees and costs clearly
attributable to seniority-related issues be borne by the
unions, as well as ten percent of the remaining fees and
costs.
In its conclusion, the district court summarized its order
and added one provision: the lodestar fees were to be dis-
tributed to the attorneys and paralegals in the amounts
listed in the fee petitions. This appeal by the lead counsel
and the unions followed.
II. TIMELINESS OF THE APPEALS.
Before we reach the merits of the appeals, we must ad-
dress BN’s assertion that the appeals should be dismissed
because both the lead counsel and the unions failed to file
their notices of appeal within the thirty-day period man-
dated by Rule 4(aX1) of the Federal Rules of Appellate
Procedure. It is true that lead counsel filed their notice
of appeal on October 28, 1985, thirty-eight days after the
district court’s September 20 decision, and that the unions
filed their notice on November 27, 1985, thirty-three days
(see Rule 4(aX4)) after the district court on October 25
denied their motion to alter or amend the September deci-
sion. Nevertheless, we find that both appeals are timely. -
Rule 4(aX1) has a special sixty-day rule for cases in
which the United States is a party: “if the United States
or an officer or agency thereof is a party, the notice of
appeal may be filed by any party within 60 days.” Since
the EEOC was a party in the class action against BN,
a signatory to the consent decree, and remains a party
to the decree-monitoring proceedings in the district court,
it clearly has a sufficient interest in the action to be a
A-8
“party” for purposes of Rule 4(aX1). See, e.g., United
States v. American Society of Composers, Authors & Pub-
lishers (ASCAP), 331 F.2d 117, 119-20 (2d Cir.) (distin-
guishing situation in which consent decree gives United
States a continuing role in action from situation in which
United States has “long since become a merely nominal
party”), cert. denied, 377 U.S. 997 (1964). Moreover, the
fact that the United States was not directly concerned
with the particular decision appealed (the EEOC definitely
has a policy interest in attorney fee awards in Title VII
actions) is irrelevant. See, e.g., ASCAP, 331 F.2d at 119
(“{tJhe stated criterion is whether the United States is
a party to the action, . . . and not whether the United
States is concerned with the particular order sought to
be appealed—something that often cannot be accurately
determined when the order is made’’); see also, e.g.,
Rochester Methodist Hospital v. Travelers Insurance Co.,
728 F.2d 1006, 1011-12 (8th Cir. 1984); In re Paris Air
Crash of March 3, 1974, 578 F.2d 264, 265 (9th Cir. 1978).
Thus, the sixty-day period of Rule 4(aX1) is applicable,
and the appeals are timely.
III. LEAD COUNSEL’S FEES.
The lead counsel appeal four aspects of the district
court’s decision. First, they argue that the exceptional suc-
cess they achieved in the litigation merits a multiplier,
and that the district judge erred by comparing their suc-
cess only to other cases of exceptional success. Second,
they assert that the district court erred when it refused
to award them a multiplier to compensate them for the
risk of not prevailing, and they believe this error is
grounded in the court’s alleged decision that risk analysis
is irrelevant to multiplier determinations and on an erro-
neous finding that lead counsel had not proved by specific
evidence that they were entitled to a risk multiplier.
Third, lead counsel claim that the district court’s order
erroneously left them uncompensated for the delay in pay-
ment. Finally, they urge us to reverse the district court’s
order requiring that the fees be paid to the attorneys and
A-9
paralegals in the amounts listed in the fee petitions. For
the reasons we discuss below, we affirm the district court
on the first three of these issues and reverse that por-
tion of the district court’s order directing payment of the
award to the firms’ attorneys and paralegals.
A. The “exceptional success”? multiplier. Since oral
argument in this case, the Supreme Court has issued a
minor opinion relating to the proper use of multipliers in
fee-shifting situations, Pennsylvania v. Delaware Valley
Citizens’ Council for Clean Air, 106 S.Ct. 3088 (1986).
Delaware Valley involved attorneys fees under the Clean
Air Act, 42 U.S.C. § 7401 et seg., which, like Title VII,
contains a fee-shifting provision authorizing awards of rea-
sonable attorneys fees. In the underlying litigation, the
Delaware Valley Citizens’ Council filed suit to compel
Pennsylvania to implement a vehicle emission inspection
and maintenance program. The parties eventually entered
into a consent decree and Delaware Valley sought at-
torneys fees and costs. The district court calculated the
lodestar figure by multiplying reasonable hours by reason-
able hourly rates. It then applied a multiplier based on
the risk of not prevailing and on “superior”? work that
‘culminated in an outstanding result.’” 106 S.Ct. at
3088, quoting the district court’s opinion, 581 F.Supp.
1412, 1431 (E.D. Pa. 1984). The Court of Appeals for the
Third Circuit affirmed, saying with respect to the excep-
tional success factor that ‘this was ‘the rare case where
the fee applicant offer[ed] specific evidence to show that
the quality of service rendered was superior to that one
reasonably should expect in light of the hourly rates charged
and that the success was exceptional.’ ” 762 F.2d 272, 280
(3d Cir. 1985), quoting Blum v. Stenson, 465 U.S. 886,
899 (1984).
The Supreme Court reversed the exceptional success
multiplier, but set the risk multiplier issue for reargu-
ment, as we discuss in the next section. The Court’s posi-
tion on the use of multipliers to reward exceptional suc-
cess leaves little doubt that this factor is disfavored. The
Court reiterated the position it took in Blum that “the
A-10
proper first step in determining a reasonable attorney’s
fee is to multiply ‘the number of hours reasonably ex-
pended on the litigation times a reasonable hourly rate.’ ”
106 S.Ct. at 3098, quoting Blum, 465 U.S. at 888. The
Court reemphasized that the resultant figure is “more
than a mere rough guess or initial approximation of the
final award to be made. Instead, . . . [wJhen . . . the ap-
plicant for a fee has carried his burden of showing that
the claimed rate and number of hours are reasonable, the
resulting product is presumed to be the reasonable fee’
to which counsel is entitled.” Jd. at 3098, quoting Blum,
465 U.S. at 897.
The Court enunciated two rationales for this presump-
tion. The first is that fee-shifting provisions ordinarily are
not meant to provide a windfall to attorneys or to “repli-
cate exactly the fee an attorney could earn through a pri-
vate fee arrangement with his client.” Jd. at 3098. Rather,
the aim of fee-shifting statutes is to enable private par-
ties to obtain legal counsel. The Court concluded that
since Delaware Valley “was able to obtain counsel without
any promise of regard for extraordinary performance,”
the purpose of the Clean Air Act’s statutory fee provi-
sion was satisfied. Jd. at 3099.
The second rationale for presuming that the lodestar
constitutes a reasonable fee is that “when an attorney
first accepts a case and agrees to represent the client,
he obligates himself to perform to the best of his ability
and to produce the best possible results commensurate
with his skill and his client’s interests. Calculating the
fee award in a manner that accounts for these factors,
either in determining the reasonable number of hours ex-
pended on the litigation or in setting the reasonable hour-
ly rate, thus adequately compensates the attorney, and
leaves very little room for enhancing the award based on
his post-engagement performance.”’ Id.
In the face of this strong presumption that the lodestar
figure encompasses the factor of performance, we will not
reverse as an abuse of discretion the district court’s re-
A-11
fusal to award a multiplier based on exceptional success.
See Evans v. Jeff D., 106 S.Ct. 1531, 1542 & n.26 (1986).
The district court found that the success in this case did
not replicate that of other, pre-Delaware Valley, cases in
which multipliers had been awarded, and although we have
nothing but admiration for the lead counsel’s performance,
we cannot disturb that finding. Moreover, the hourly rates
granted lead counsel were, in the words of the district
court, “the top they can request,” and all of counsel’s re-
quested hours were awarded. Thus, lead counsel were given
the top current billing rates for every hour they expended
on the litigation—cleariy, in light of Delaware Valley, a
fee that fully compensates them for their fine work and
successful results. Finally, one can question whether en-
hancement for exceptional success is ever appropriate.
“(The lodestar figure includes most, if not all, of the rele-
vant factors comprising a ‘reasonable’ attorney’s fee, and
it is unnecessary to enhance the fee for superior perfor-
mance in order to serve the statutory purpose of enabl-
ing plaintiffs to secure legal assistance.’’ Delaware Valley
at 3098-99 (emphasis added). We accordingly affirm the
district court’s refusal to award a multiplier for excep-
tional success.
B. The risk multiplier. In Delaware Valley, the Su-
preme Court expressly left undecided the question of up-
ward adjustment of the lodestar in order to compensate
for the risk of loss, a question it has also declined to
decide in Blum. The Court noted that the circuits were
not in complete agreement on the issue, and it set the
case for reargument. Until it issues an opinion on that
question, therefore, we are left with some uncertainty
regarding the wisdom of risk multipliers. Existing Su-
preme Court precedent, however, emphasizes that the
lodestar figure is the presumptively reasonable attorneys
fee and thus does not encourage us to find that the dis-
trict court abused its discretion in denying a multiplier.
See Delaware Valley, 106 S.Ct. at 3098; City of River-
side v. Rivera, 106 S.Ct. 2686, 2696 (1986) (‘‘In order to
ensure that lawyers would be willing to represent persons
A-12
with legitimate civil righis grievances, Congress deter-
mined that it would be necessary to compensate lawyers
for all time reasonably expended on a case.’’); Blum, 465
U.S. at 901.
Nevertheless, we have noted that “{olnly by offering to
pay the lawyer his opportunity wage, the compensation he.
could obtain by representing paying clients, may a court
induce the lawyer to take civil rights cases.”’ Kirchoff v.
Flynn, 786 F.2d 320, 326 (7th Cir. 1986). This opportunity
wage may be difficult to derive using hourly rates as the
basis, because hourly rates usually are those “fees that
lawyers charge to clients who pay promptly when billed.”
Id. Payment pursuant to fee-shifting statutes, however,
is contingent on success in the litigation and is delayed
until after the underlying litigation is over, two charac-
teristics that normally are not factored into hourly rates.
One way to attempt to compensate attorneys fully, there-
fore, is to multiply the lodestar. We noted in Kirchoff,
however, that such an adjustment is artificial and prob-
lematic: “{oIme common concern with compensation for risk
is that the multiplier should rise as the probability of suc-
cess falls, soaking the unlucky defendant who had a good
case ... but lost anyway and therefore faced a huge mul-
tiplier.” Jd. Conversely, risk multipliers may reward law-
yers for bringing unmeritorious litigation. See McKinnon
v. City of Berwyn, 750 F.2d 1383, 1392 (7th Cir. 1985).
For these reasons, this circuit has not favored the use
of risk multipliers. See, e.g., id.; Bonner v. Coughlin, 657
F.2d 931, 936 (7th Cir. 1981) (per curiam).
With this case law in mind, we will not find that the
district court abused its discretion in awarding only the
lodestar. Even in the absence of questions concerning the
propriety of risk multipliers, we would consider dispositive
the district court’s finding that this case involved factual
om eID and difficulties of trial preparation, but not
the kind of significant risk engendered by having to rely
on new legal theories of recovery or new remedies. See
Kamberos v. GTE Automatic Electric, Inc., 603 F.2d 598,
604 (7th Cir. 1979). Moreover, lead counsel in fact received
A-13
some compensation over and above that which they would
have received from a regular paying client, since they
were compensated for all their hours at current rates that
they would not have been able consistently to charge over
the six-year span of the litigation, a factor that also miti-
gates the delay in payment, as we discuss below. For
these reasons we affirm the district court’s refusal to ap-
ply a risk multiplier to the fee award.
C. Interest as compensation for delay in payment.
Lead counsel sought interest on the fee award from the
April 1984 approval of the consent decree in order to com-
pensate them for the delay in payment. Counsel argue
that since they submitted fee petitions in June of 1984
and based their figures on then-current hourly rates, they
were uncompensated for the delay between that date and
September 1985, when the district court entered its deci-
sion and order. While we are concerned with the delays
that counsel in these kinds of cases face when litigating
fee awards, we are bound by the statutory presumption
that interest on money judgments “shall be calculated
from the date of the entry of the judgment.” 28 U.S.C.
§ 1961(a). While this statute does not preclude prejudg-
ment interest, the award of such interest is committed to
the discretion of the district court and is to be based on
equitable considerations. See, e.g., Michaels v. Michaels,
767 F.2d 1185, 1204 (7th Cir. 1985).
Here, the delay in judgment was occasioned by a legiti-
mate dispute over several issues, notably the question of
fee multipliers. BN vigorously asserted that lead counsel
were not entitled to the award of a multiplier, and in light
of our holding, their position was not a vexacious or un-
reasonable one. The district court found that it would be
“grossly unfair” to penalize BN for asserting a defense
to the lead counsel’s request, and we cannot characterize
this decision as an abuse of discretion.
Moreover, lead counsel may have been compensated, at
least in part, by the fact that they were paid at the top
1984 hourly rates for all of the work they performed
A-14
throughout the litigation. We have noted that “‘if the fee
award was based upon prevailing hourly rates, as opposed
to those in effect at the time services were rendered, any
harm resulting from the delay would be greatly dimin-
ished or altogether eliminated.” Bonner, 657 F.2d at 937.
In the absence of evidence, we have no basis on which
to conclude that payment based on 1984 rates compen.- '
sated lead counsel only for the delay in payment up to
that time; in fact, it may also have ameliorated the delay
from June 1984 to September 1985. We therefore will not
reverse the district court’s refusal to order interest from
the date of the consent decree’s approval.
D. Apportionment of fee award. In the last part of its
decision, the district court ordered that the individual at-
torneys and paralegals in the lead counsel’s firm be paid
the amounts shown in the fee petitions. According to the
judge’s order, for example, an associate whose lodestar
figure came to $140,000 would receive that sum from the
fee award. This amount represents a billing rate of $110
per hour, a rate that we can assume with some confidence
is not equivalent to what the attorney earns on an hourly
basis. Law firms, like other businesses that sell time, must
set their hourly rates at an amount greater than that
needed to pay their attorneys’ or paralegals’ salaries; they
must figure into those rates all their costs of doing busi-
ness. A reasonable hourly rate for purposes of a fee award,
therefore, is not the same as reasonable compensation for
an individual attorney, and we therefore reverse this por-
tion of the district court’s order and direct that the award
be paid to the respective law firms, not the individual at-
torneys and paralegals.
IV. THE UNIONS’ CONTRIBUTION.
The district court ordered that the thirteen union defen-
dants should assume responsibility for some portion of the
fees and costs awarded to lead counsel, and it granted
BN contribution from the unions in the following manner:
fifty percent of the fees and expenses clearly attributable
A-15
to seniority-related issues was allocated to the unions, as
well as ten percent of fees and expenses not clearly at-
tributable to seniority-related issues. The unions thereafter
filed a motion pursuant to Rule 5%e) of the Federal Rules
of Civil Procedure, requesting that the district court modify
its order to the extent that the unions not be required
to contribute ten percent of the fees and expenses at-
tributable to issues concerning hiring, discipline, and dis-
charge, since the consent decree provided that BN was
to bear full responsibility for fees and expenses relating
to these issues. The district court denied this motion and
the unions now appeal, asserting as grounds for reversal:
(1) their alleged immunity from liability for any portion
of the lead counsel’s fees and expenses; and (2) the dis-
trict court’s alleged error in denying their Rule 59(e) mo-
tion. We are unconvinced that either of these grounds
merits reversal, and we therefore affirm the district court’s
decision.
A. Immunity from liability. The unions argue that un-
der the rule of Northwest Airlines v. Transport Workers
Union of America, 451 U.S. 77 (1981), BN has no right
of contribution from the unions. We cannot agree that
Northwest Airlines extends that far. The Court there held
that an employer has no federal statutory or common law
right of contribution from a non-defendant union, 451 U.S.
at 94, 98, but the Court clearly did not preclude recovery
from a union that was a named defendant in a Title VII
action. Such a reading of Northwest Airlines ignores the
Court’s explicit statement that “{a] court’s broad power
under [Title VII]. . . to fashion relief against all respon-
dents named in a properly filed charge [was] not at issue
in this litigation since no charge was filed against either
of the respondent unions.” Jd. at 93 n.28. The unions have
not presented a persuasive argument for limiting the dis-
trict court’s power to award attorneys fees to the pre-
vailing party in this case and to require all of the named
defendants to share the responsibility for those fees. Ac-
cordingly, we find that nothing in the statute or case law
prohibits the order of contribution.
A-16
The unions also claim immunity from liability for a por-
tion of the fees because lead counsel addressed their fee
petitions to BN, and not to the unions. We agree with
the district court that the consent decree clearly provided
for the procedural events that transpired here. The decree
states that “BN ... may seek apportionment of those
costs and fees among all defendants or contribution from ’
the unions.”’ The decree further provided that the unions
preserved their right to object to the fee petitions “as
well as to any effort by BN to secure apportionment of
contribution.’’ This language contemplates, as the district
court found, that “fees and expenses would be sought
from Burlington; that the railroad would then seek ap-
portionment among and contribution from the unions; and
that the unions preserved the right to object to any ap-
portionment or contribution.” We therefore cannot find
the unions-immune from liability for a portion of the pre-
vailing party’s attorneys fees.
B. The Rule 59(e) motion. The unions moved the dis-
trict court, pursuant to Rule 5%e), to alter or amend its
order requiring the unions to pay, in addition to fifty per-
cent of the seniority-related fees and expenses, ten per-
cent of fees and expenses unattributable to seniority is-
sues. The unions based their argument on the consent
decree, which states in an addendum that “BN will not
seek apportionment of or contribution towards the costs
and fees relating to the issues [of hiring, discipline, or dis-
charge] from the unions.” The district court denied this
motion, in part because of its finding that the unions had
waived this argument by not bringing it before the court
in the underlying contribution proceeding. The unions’
failure to make its argument to the district court at the
appropriate time was a fatal error. BN’s request for con-
tribution from the unions contained a detailed calculation
by attorney and firm of how much the unions would have
to pay under the proposed ten percent formula. The unions
failed to counter with their own calculation of a proper
allocation; instead, they waited until they filed the Rule
59e) motion to present figures to the district court. Al-
A-17
though the district court obviously was aware of the lan-
guage of the consent decree addendum, the unions could
not e to wait until after the court issued its judgment
to make an argument based on that language. We agree,
therefore, that the unions waived whatever argument they
may have had regarding the ten percent allocation. Ac-
cordingly, we affirm the district court’s order requiring
contribution.
V.
For the reasons stated above, the district court’s order
of September 20, 1985 is AFFIRMED, with the exception
of that portion directing payment of the fees award to
the attorneys and paralegals in the amounts listed in the
fee petitions. That portion of the district court’s order is
REVERSED in accordance with our opinion above.
A true Copy:
Teste:
Clerk of the United States Court of
Appeals for the Seventh Circuit
B-1
APPENDIX B
UNITED STATES COURT OF APPEALS
For the Seventh Circuit
Chicago, Illinois 60604
Submitted October 14, 1986
February 23, 1987.
Before
Hon. RICHARD D. CuDAHy, Circuit Judge
Hon. JOEL M. FLaum, Circuit Judge
Hon. WILLIAM J. CAMPBELL, Senior District Judge*
IN RE: BURLINGTON NORTHERN, INC.
EMPLOYMENT PRACTICES LITIGATION
No. 85-2898 V.
APPEALS OF: SPRENGER, OLSON & SHUTES, P.A. and
Davis, MINER, BARNHILL & GALLAND,
Lead Counsel-Appellants,
and
WILLIAM E. MCBRIDE, et al.,
Plaintiffs-A ppellants,
Va
BURLINGTON NORTHERN, INC.,
Defendant-Appellee.
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 78 C 269—George N. Leighton, Judge.
* The Honorable William J. Campbell, Senior District Judge for
the Northern District of Illinois, is sitting by designation.
B-2
ORDER
In denying this petition for rehearing, we wish to em-
phasize that our holding was a narrow one. We held only
that, in light of recent Supreme Court precedent, the dis-
trict court’s failure to apply a multiplier to the appellants’
fee award in order to compensate them for the risk of
losing the case was not an abuse of discretion.
The Supreme Court appeared to be open to the con-
cept of risk compensation in Hensley v. Eckerhart, 461
U.S. 424 (1983). In Hensley, the Court stressed that “(t]he
product of reasonable hours times a reasonable rate does
not end the inquiry. There remain other considerations
that may lead the district court to adjust the fee upward
or downward, .. .” 424 U.S. at 434. Justices Brennan,
Marshall, Blackmun, and Stevens, concurring in part, were
more explicit, stating that a district court awarding fees
should “consider both delays in payment and the prelitiga-
tion likelihood that the claims which did in fact prevail
would prevail.” Jd. at 449.
However, the Court retreated from this position in
Blum v. Stenson, 465 U.S. 886 (1984). In Blum, the Court
held that the lodestar amount, rather than being a mere
“rough guess” or initial approximation of the final award,
should be presumed to be the reasonable fee. Jd. at 897.
The Court stated that a district court should make up-
ward adjustments to the lodestar amount only in “the
rare case where the fee application offers specific evidence
to show that the quality of service rendered was superior
to that one reasonably should expect in light of the hourly
rates charged and that the success was ‘exceptional.’ ”’
Id. at 899. Blum expressly left open the question of
whether the risk of not being the prevailing party could
ever justify an upward fee adjustment. 465 U.S. at 901,
n.17. As we noted in the opinion, the Supreme Court has
called for re-argument in Pennsylvania v. Delaware
Valley Citizens’ Council for Clean Air, 106 S.Ct. 3088,
3100 (1986), on this question.
B-3
In this case, the district court did not find that the
plaintiffs’ success was exceptional within the meaning of
Blum, and in the absence of evidence to demonstrate that
this finding was an abuse of discretion, we were constrained
to follow Blum and affirm the district court’s judgment.
In so deciding, we did not address whether the lodestar
amount should ever be adjusted upward to compensate
for the risk of loss. Neither did we address whether,
assuming this type of adjustment is legitimate, the use
of a multiplier is an appropriate means to achieve this
purpose. These questions remain open in our circuit. See
Kirchoff v. Flynn, 786 F.2d 320, 326 (7th Cir. 1986). We
look to the decision in Delaware Valley to shed more light
on this area.
On consideration of the petition for rehearing and sug-
gestion for rehearing en banc filed in the above-entitled
cause by attorneys for plaintiffs-appellants, no judge in
active service has requested a vote thereon,** and all of
the judges on the original panel have voted to deny a re-
hearing. Accordingly, it is ordered that the aforesaid peti-
tion for rehearing be, and the same is hereby, denied.
** The Honorable Frank H. Easterbrook, Circuit Judge, did not
participate in the consideration of this petition for rehearing.
C-1
APPENDIX C
[September 20, 1985]
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
MDL 374 — No. 78 C 269
The Equal Employment Opportunity Commission, Gregory
Jones, Owen T. Sloan and Robert Jeffrey, Jr.,
Plaintiff-Intervenors,
and
William E. McBride, William H. Butler, Lenno Edwards,
Albert White, Brunice McNeal, Ruben McGaughy, William
Forbush, Tyrone Coffee, Hilary R. Jones, Dubois Gilliam,
and Michael Love, on behalf of themselves and all others
similarly situated,
Plaintiffs,
v.
Burlington Northern Inc.; Brotherhood of Locomctive Engi-
neers; United Transportation Union, AFL-CIO; Railroad
Yardmasters of America, AFL-CIO; Brotherhood of Rail-
way, Airline & Steamship Clerks, Freight Handlers, Ex-
press & Station Employees, AFL-CIO; Brotherhood of Main-
tenance of Way Employees, AFL-CIO; American Train Dis-
patchers Association, AFL-CIO; International Association
of Machinists & Aerospace Workers; International Brother-
hood of Boilermakers, Iron Shipbuilders, Blacksmiths,
(Caption continued on following page)
C-2
Forgers & Helpers, AFL-CIO; Sheet Metal Workers’ In-
ternational Association, AFL-CIO; International Brother-
hood of Electrical Workers, AFL-CIO; Brotherhood of Rail-
way Carmen of U.S. and Canada, AFL-CIO; International
Brotherhood of Firemen & Oilers, AFL-CIO; Brotherhood
of Railroad Signalmen, AFL-CIO,
Defendants. :
Before the Honorable George N. Leighton
U.S. District Judge
Memorandum
I
This multi-district litigation involves suits, some of them
class actions, and intervenor complaints which allege that
a railroad corporation and its unions have discriminated
_— Negroes in employment opportunities. On the day
of trial, in a spirit of compromise, cooperation, and amica-
bility, lead counsel for plaintiffs and the class, and the
chief lawyer for the railroad, settled all the claims of the
soo ae and members of the class, a group whose size
been estimated as between 5,000 and 20,000 Negroes.
Then, the lawyers agreed on a consent decree which granted
plaintiffs, members of the class, and charging parties,
monetary recovery and general as well as special relief.
In addition, the railroad agreed to pay the attorney fees
of counsel for the private plaintiffs. Later, this court ap-
proved the consent decree; and in accordance with its
terms, the railroad has paid the fees and expenses of all
the lawyers in the case except lead counsel for plaintiffs
and the class. Further, without consent, it has paid EEOC
the costs which the agency has disbursed in the course
of this litigation.
Now, lead counsel have filed petitions asking this court
to determine the attorney fees, plus a multiplier, which
C-3
the railroad should pay them, and the amount of the ad-
vanced costs for which they should be reimbursed.! The
petitions have been briefed; and in the course of its writ-
ten submissions, the railroad concedes that titioning
counsel are entitled to reasonable fees; that the number
of hours claimed were worked by counsel and their legal
assistants; and that the expenses for which reimbursement
is sought were advanced and would be paid by the rail-
road.
However, the railroad contends that lead counsel seek
hourly rates which are at least ten percent to twenty per-
cent too high; and that the lower rates it proposes are
equal to those charged by experienced lawyers who de-
fend employment discrimination suits in the communities
where petitioning counsel practice. The railroad argues
that the fees, plus a multiplier, which petitioning counsel
seek, are unreasonable; it insists that the record of this
case does not support any enhancement of the lodestar
figure to which lead counsel undoubtedly are entitled.
Therefore, the parties ask this court to resolve four issues:
first, whether the rates per“hour at which lead counsel
seek attorneys’ fees are reasonable; second, whether the
fees awarded to lead counsel should bear interest from
April 2, 1984, the date this court fully approved the con-
sent decree; third, whether this case was the kind of “ex-
ceptional success” that would justify lead counsel being
given a multiplier as a bonus for the legal work they have
1 Burlington does not question the standing of lead counsel to
file these petitions. In view of this, the court does not either, al-
though it is aware of at least one recent case holding that lawyers
“have no standing whatsoever to file an application for a direct
award of attorneys’ fees under section 5k) [of Title VII).”
Rainsbarger v. Columbia Glass & Window Co., 600 F. Supp. 299,
301 (W.D. Mo. 1984). This court, as did the court in Rainsbarger,
will construe the petitions as having been filed by the named plain-
tiffs, it being conceded they are the prevailing parties as required
by Section 706(k) of Title VII. Further, the court will assume that
these petitions were filed in accordance with the wishes of named
plaintiffs, and at their direction, or with their permission.
C-4
performed; and fourth, whether the defendant unions should
be ordered to assume the responsibility for some portion
of the fees and expenses which are ordered paid to coun-
sel for plaintiffs and the class.
II
On August 22, 1974, an EEOC commissioner, acting pur-
suant to Sections 706 and 707 of the Civil Rights Act of
1964, as amended, filed a charge which alleged that Bur-
lington Northern, Inc., a multi-state railroad corporation,?
and thirteen international unions representing BN em-
een had been “unlawfully d’s«riminating against Blacks,
panish-surnamed Americans, vu: ‘entals, American Indians
and women because of their race, color, national origin and
sex with respect to recruitment, hiring, job assignment,
job classification, discharge, wages, promotional opportun-
ity, training and other terms, conditions and benefits of
employment.’”’ EEOC propounded interrogatories which -
were answered by the railroad, demanded documents which
were produced, and interviewed or deposed BN officials.
This process, which was mainly investigatory, continued
for a number of years.
In July 1977, the first of some thirteen or fourteen civil
actions was filed against Burlington in the United States
District Court for the District of Minnesota. It was a
suit by Claude Brown against BN and one of its unions
alleging race discrimination in employment opportunities.
Thereafter, different suits were filed by other plaintiffs
in federal courts in Washington, Nebraska, Missouri, and
in this district. All of the complaints alleged racial dis-
crimination in employment, some asserting claims under
42 U.S.C. § 1981, but all invoked Title VII of the Civil
Rights Act of 1964. Some of the plaintiffs sought relief
only for themselves, others were class suits against BN
2 Hereafter, Burlington Northern, Inc., will be referred to as “Bur-
lington”, “the railroad”, or by the acronym “BN”.
C-5
alone, while others named as co-defendants a number of
unions that represented BN employees.
The first of the suits filed in this district was by William
E. McBride and William H. Butler, Jr., as a system-wide
class action.? The case was assigned to the docket of
Judge John Powers Crowley; the lawyers representing the
plaintiffs were from Davis, Miner & Barnhill, a small but
experienced Chicago law firm that specializes in civil
rights litigation. Among the suits filed in the district court
of Minnesota, was a class action by William E. Forbush,
against BN and unions representing its employees. Plain-
tiff and the class in that civil action were represented by
Paul C. Sprenger of Sprenger, Olson and Schutes, also
a smail firm that specializes in civil rights litigation. In
both McBride and Forbush the lawyers undertook repre-
sentation of plaintiffs and the class under contingency fee
agreements.
In McBride, plaintiffs moved for class certification to
which BN objected. At the same time, EEOC filed a mo-
tion to intervene in the case. On December 22, 1978,
Judge Crowley granted the plaintiffs’ motion for class cer-
tification and EEOC’s motion to intervene.‘ A little more
than a month later, January 31, 1979, Sprenger, represent-
ing Forbush in the district court in Minnesota, Barnhill,
3 Lead counsel persist in calling this “a nation-wide” class action.
However, as this court understands it, Burlington is not a nation-
wide railroad yarn | it operates in twenty states, all in the
western part of the country. yo not employ workers nation-
wide. Therefore, it is more accurate to refer to this suit as “a
system-wide class action.”
4 The class was defined as:
All Negro citizens who have been or will be employed by the
Railroad System of the Transportation Division of BNI in the
United States and who have been, are being, or as a result
of the operation of current policies will be discriminated against
in hire and terms or conditions of employment such as senior-
ity, training, promotion, wages, transfers, lay off or discharge
because of their race.
C-6
representing McBride and Butler, three attorneys in two
other cases pending in this district, and Bruce Elfvin, staff
attorney for EEOC, appeared before Judge Crowley and
proposed an agreed order “concerning the organization
of plaintiffs’ Steering Committee, Committee of the Whole,
and to the designation of Lead Counsel,....” The pro-
ponents stated that their purpose was “to assist the Court »
in the coordination of this litigation.” The duties and re-
sponsibilities of the lawyers who were to be lead and co-
lead counsel were described and the function of the Steer-
ing Committee and Committee of the Whole were defined.
Judge Crowley approved the proposed order; it was en-
tered as of the date of its presentation. Sprenger and Barn-
hill, or Judson Miner of the Barnhill firm, were designated
as lead counsel for plaintiffs and the class; Bruce Elfvin
was named co-lead counsel.
At the time, the suit in McBride had been on file more
than one year. Both Barnhill and Sprenger knew the com-
plexity of the cases, the scope of the allegations and
charges made against BN, and the difficulties of proof.
The lawyers who accepted the responsibilities of lead
counsel knew by then the positions that had been taken
by BN in the defense of the charges of race discrimina-
tion. Neither at the time the order was presented nor
at any other proceeding before Judge Crowley was there
any statement made by the designated lead counsel con-
cerning the difficulties of proof, the burdensomeness of
the cases with regard to expenses, or the obligations as-
sumed by them under the contingency agreements each
had entered with their plaintiffs.
Soon after Judge Crowley certified the class in McBride,
prompted by the pendency of a number of cases in other
districts, BN moved before the Judicial Panel on Multi-
district Litigation for consolidation of the cases in order
to coordinate pretrial proceedings. On April 11, 1979, the
panel ordered the cases transferred to this district and
assigned to Judge Crowley as In Re Burlington North-
ern, Inc. Employment Practices Litigation, MDL 374.
Thereafter, subsequently filed cases were also transferred
C-7
to the district as “tagalong actions.” Then in June 1979,
twelve of the named plaintiffs in six of the cases against
BN, together with EEOC, filed a first consolidated com-
plaint in this district under the case number of McBride.
This consolidated complaint invoked the provisions of both
Title VII and 42 U.S.C. § 1981. The defendants were BN
and thirteen unions that represented BN employees.
In the balance of 1979, the parties continued with dis-
covery. Plaintiffs obtained detailed information concern-
ing the railroad’s workforce from BN computer tapes and
from the Railroad Retirement Board, reflecting BN’s year-
ly reports for the period from the 1970 merger that created
BN, to 1980. Based on these tapes, lead counsel caused
to be prepared statistical printouts which were served on
BN in conjunction with requests for admission and pro-
pounded interrogatories. The discovery conducted by lead
counsel extended to BN’s employment policies and deposi-
tions of its regional personnel managers as well as sev-
eral members of its Human Resources Department staff.
Union representatives were also deposed and requests for
production of documents were served on defendant unions.
Lead counsel also sought computer tapes and hard copy
documents from the unions. These detailed discovery ef-
forts proceeded through the year 1980. During the spring
of 1981, Judge Crowley announced he was going to resign
from the federal bench, effective as of June 30, 1981.
Thereupon, EEOC moved to transfer MDL 374 as the case
stood before Judge Crowley to a judge in the United
States District Court for the District of Minnesota. The
MDL panel ruled in October 1981 that the consolidated
cases were to be assigned to this docket for the remainder
of the coordinated pretrial proceedings.
These were extensive; typical of litigation like as this
one. They included rulings on a multitude of discovery
disputes that involved what lead counsel have said were
“hundreds of thousands of documents” produced by BN
and the union defendants. These documents were stored
in two depositories, one in Chicago, Illinois, and one in
C-8
St. Paul, Minnesota, established by a pretrial order which
Judge Crowley had entered early in the litigation. The
depositions involved all of BN’s top management person-
nel, and included responsible officials of the unions. The
court was required to rule on a motion filed by BN to
redefine the class and one asking for vacature of the order
that had permitted EEOC to intervene in the lawsuit.
Status hearings were conducted by this court beginning
January 22, 1982 and involved the entry of several pretrial
orders, one setting out detailed discovery deadlines includ-
ing dates for exchange of exhibits as well as other matters
preparatory to trial. Orders were also entered relating
to an appeal from a district court order concerning cer-
tain BN witnesses’ answers to questions about the rail-
road’s affirmative action program.
By the end of 1982, lead counsel made certain decisions
concerning preparation for trial. These included the selec-
tion, retention and employment of experts. They decided
to retain Dr. Richard Barrett, a well-known testing ex-
pert; Dr. Richard Hoyt, an expert in economics who was
to testify about the compiled computer data base and on
issues of damages; Dr. Stephan Michaelson, a top expert
in the interpretation and analysis of race data; Dr. Rebecca
Krem, an expert in statistics; Dr. Charlotte Striebel, a
Ph.D. in mathematics, who was to testify in rebuttal; and
Dr. Herbert Hill, a former NAACP staff member and a
recognized student of race discrimination in the railroad
industry. Compensation of these experts was assumed by
lead counsel in accordance with agreements entered into
with each expert.
Throughout the early part of 1983, lawyers for Burling-
ton and lead counsel submitted to the court agreed orders
concerning anticipated trial exhibits and other matters.
Also, a number of orders were entered allowing interven-
tion of additional plaintiffs, the filing of an amended con-
solidated complaint, and the transfer to this docket of
tagalong cases that had been filed after this court was
assigned the multidistrict litigation. In the meantime, the
parties proceeded with intensive discovery and final prepa-
C-9
ration. The case was set to be called for trial on Novem-
ber 7, 1983 and the final pretrial conference was held Oc-
tober 25, 1983. Then, in the early morning hours of the
day of trial, a complete settlement was reached. The par-
ties negotiated a consent decree which received the court’s
preliminary approval on November 22, 1983, and full ap-
proval on April 2, 1984.
Under the terms of the decree, BN agreed to pay $10
million, to be held in a fund for those who claimed, and
who could establish, that during the designated period,
they had been subjected to racial discrimination in hir-
ing, promotion, or discharge. The fund was non-revision-
ary so that the full $10 million plus interest it may earn,
will be paid to qualified claimants under the consent de-
cree. BN retained no interest in the fund and distribution
now depends on the number of claims filed and allowed.
The $10 million dollars was deposited soon after full ap-
proval of the consent decree and has been earning inter-
est since that time.
Class members entitled to make claims against the fund
are defined broadly, thus making them eligible for injunc-
tive relief which requires BN to hire Negroes at specified
rates for nine years after approval of the decree. For ex-
ample, each year BN must hire Negroes as officials, man-
agers, and salespeople at two times the Negro national
availability for these jobs as determined by relevant census
information. In all other jobs which did not have Negroes
ual to their availability in the preceding year, each year
BN must hire Negroes at rates ranging from 2 to 1.5 times
their availability.
Further, by the terms of the decree, BN must promote
Negroes from scheduled to exempt jobs at a rate of 1.5
times their availability for such promotions and it must
circulate information about job opportunities in a mean-
ingful manner, particularly to Negro organizations. BN
agreed to a priority hiring of rejected Negro applicants
for jobs and providing neutral references for those it had
previously listed as discharged for cause. The decree pro-
vides that all persons who have been locked into certain
C-10
lower paying positions—those jobs to which Negroes tradi-
tionally have been assigned—have the right to transfer
to higher paying positions, and retain the seniority of their
lower paying jobs. BN also agreed to train Negroes to
be locomotive engineers at a rate of no less than 15% of
the persons trained. In the last subdivision of the decree,
BN agreed to pay all lawyers for the plaintiffs and EEOC’
“their costs including experts’ fees, and including (except
as EEOC) reasonable attorneys’ fees... .”
Based on this provision, BN has paid EEOC $512,940.33
of an agreed sum of $675,000 and through agreements ap-
proved by this court, it has paid ten lawyers for the plain-
tiffs in the tagalong and related cases a total of $324,200
for fees and advanced expenses. However, no agreement
has been reached with lead counsel for plaintiffs and the
class, consequently they have filed separate petitions for
fees and for reimbursement of expenses.
The lead counsel in this case, as designated by the
agreed order of January 31, 1979, are “Charles Barnhill,
Jr., ... or Judson H. Miner” of Davis, Miner, Barnhill &
Galland, a three-partner, three-associate law firm located
in Chicago; and Paul C. Sprenger of Sprenger, Olson &
Shutes, P.A., a three-attorney law firm whose offices are
in Minneapolis, Minnesota. Both firms in which lead coun-
sel are senior partners specialize in representing plain-
tiffs in civil rights and Title VII cases. They and members
of their firms are able and experienced practitioners in
complex class litigation involving charges of race discrimi-
nation in employment opportunities. Charles Barnhill has
been principal attorney for plaintiffs in numerous land-
mark civil rights cases. In fact, he and members of his
firm have earned the reputation of being among the lead-
ing lawyers in civil rights cases. Paul Sprenger and his
firm are recognized as experienced in complex litigation
defending and prosecuting civil rights cases, as well as
antitrust suits.
Both firms undertake their employment discrimination
class actions on a contingency basis, depending on court-
awarded fees. As to Charles Barnhill, two judges of this
C-11
court have recently held that $170 was a reasonable hour-
ly rate for his services and awarded him that basic rate.
Between seventy-five and eighty-five per cent of the law
firm hours expended by the Sprenger firm were on a con-
tingency basis. When billing fee-paying clients, it has
charged $180 or more per hour for Paul C. Sprenger’s
services and $160 or more per hour for the firm’s other
two partners. These private clients have included, among
others, the Swedish and West German governments, the
Smead Manufacturing Company, the American Lutheran
Church, and the Minnesota Education Association. Al-
though there is a dispute between the parties concern-
ing the reasonableness of the rates requested by lead
counsel, there is evidence that the rates requested by
them are consistent with what lawyers of comparable skill
and experience charge for similar services in Chicago and
Minneapolis, and what lead counsel could charge for their
services in other litigation.
Relevant to these facts, it appears that sometime in
1977, William E. McBride and William H. Butler, Jr.,
went to the offices of Davis, Miner, Barnhill & Galland
about the possibility of their representing them in a class
action lawsuit against BN. Charles Barnhill, who conducted
the initial investigation, interviewed a number of the com-
pany’s employees, both Negro and Caucasian, and did re-
search concerning the experiences of Negroes with Amer-
ican railroads regarding discrimination in employment op-
portunities. He concluded that historically BN, as well as
other railroad and railway unions, discriminated against
Negroes in hiring, promotions, and other employment prac-
tices. He noticed that a number of Burlington job classifi-
cations were filled by a disproportionate number of Negroes
or Caucasians; that many employment practices were sub-
jective and standardless; and that actual hiring or pro-
motion patterns in the years immediately prior to 1977
could not be determined. Consequently, on January 24,
1978, Barnhill filed McBride, et al., etc. v. Burlington
Northern, Inc., No. 78 C 269, in this court, the case which
became the hub of all the consolidated actions in this
multidistrict litigation.
C-12
Later that year, on October 17, Paul Sprenger filed
William E. Forbush, etc. v. Burlington Northern, Inc.,
et al., No. Civ. 4-78-461, in the district of Minnesota, one
of the cases that was consolidated in this court with McBride.
Thereafter, Barnhill and Sprenger, assisted by members
of their respective firms, cooperated in handling the two.
suits. In January 1979, by an agreed order, they were
designated lead counsel for plaintiffs and the class. In the
six years of litigation from January 1978 to March 31,
1984, they, their partners and associates, worked and ade-
quately documented a total of 12,228.2 attorney hours for
which they seek reimbursement in fees. In addition, they
ask to be paid for a total of 5,157.8 hours of work by their
paralegals. Burlington concedes that the total number of
hours claimed is reasonable and properly substantiated.
The Barnhill firm advanced $206,672.15 in expenses, the
Sprenger firm $925,257.04, which have been properly docu-
mented and will be paid by the railroad, subject to its
right to seek contribution from the union defendants.
The rates per hour which lead counsel ask this court
to award range from $180 for Sprenger, $170 for Barn-
hill, to $95 per hour for an associate in the Barnhill firm.
Each lead counsel asks that the paralegals in his firm be
paid $40 per hour. Thus, at the requested rates, the follow-
ing is the lodestar fee for lead counsel, each lawyer, and
— who assisted them in representing plaintiffs and
the class.
Hourly Lodestar
The Attorney Total Hours Rates Fees
Paul C. Sprenger 3,222.25 $180 $530,005.00
Erie L. Olson 1,206.50 160 193,040.00
Robert L. Shutes 3,227.25 160 516,360.00
SO&S Paralegals 3,587.00 40 143,480.00
$1,432,885.00
Charles Barnhill 2,918.50 : $170 $49€,145.00
Judson S. Miner 97.50 170 16,575.00
George F. Galland 5.00 170 850.00
Briget Arimond 1,267.50 110 139,425.00
Nancy J. Anderson 212.50 135 28,687.50
Paul Strauss 72.20 95 6,764.00
DMB&G Paralegals 1,570.85 40 62,834.00
$751,280.50
Total Lodestar Fees: $2,184,165.50
C-13
Lead counsel request that these fees be subjected to
a multiplier. In their original applications, supported by
affidavits of two highly respected academic lawyers, those
of a number of practitioners in employment discrimina-
tion cases, several from experts, and the testimony of ex-
perienced trial lawyers, petitioning counsel had asked for
a multiplier of 3.5, but after the matter was heard, the
multiplier requested was reduced to 2.5. The following is
the amount of fees, the lodestar plus the multiplier, which
lead counsel are asking for themselves, their partners, as-
sociates, and paralegals.
Lodestar Requested
The Attorney Fees Multipliers Amount
Paul C. Sprenger $580,005.00 2.52/ $1,347,345.00
Erie L. Olson 193,040.00 2.5 478,340.00
Robert L. Shutes 516,360.00 2.9 1,286,340.00
SO&S Paralegals 143,480.00 a 143,480.00
$3,255,505.00
Charles Barnhill $496,145.00 2.35 $1,186,991.00
Judson S. Miner 16,575.00 29 41,437.50
George F. Galland 850.00 2.3 2,125.00
Briget Arimond 139,425.00 2.5 343,695.00
Nancy J.Anderson 28,687.50 253 1,716.7
Paul Strauss 6,764.00 2.5 16,838.75
DMB&G Paralegals 62,834.00 re 62,834.00
$1,725,640.00
Total Fees Requested: $4,981,145.00
III
A
Despite conceding that the total hours claimed are rea-
sonable, that lead counsel, their partners and associates
are able and experienced EEOC practitioners and that
they are entitled to an award of reasonable fees which
it is willing to pay, Burlington contends that the hourly
lawyer rates which lead counsel seek are ten to twenty
5 From the date of settlement, November 7, 1983 through March
31, 1984, the multiplier requested is 1.0 which does not affect the
total lodestar fees for that period.
C-14
per cent too high. It argues that an award of attorneys’
fees such as is sought in this case should be calculated
according to prevailing market rates and that in this process,
the burden is on the fee applicant to prove the requested
rates are in line with those prevailing in the community
for similar services by lawyers of reasonably comparable
skill, experience, and reputation. Lead counsel, according
to Burlington, have not carried this burden; instead, they
proceed on a theory of “national” rates which are-not rele-
vant to a proper consideration of their petitions.
Petitioning counsel, of course, do not agree. They argue
that this record now contains abundant evidence proving
that the requested rates are reasonable. They say that
the rates they request have been awarded them in the
past; that the Sprenger firm charges its hourly-billed
clients the rates requested; and that the rates requested
are those being charged by attorneys practicing complex
Title VII litigation in Chicago, Minneapolis, and across
the country. Moreover, lead counsel contend that the hour-
ly rates in question are well below those paid by Burling-
ton to its lawyers, even if allowance is made for the volume
discount given Burlington in this case.
As is usual in disputes of this kind, there is some merit
in the arguments of both sides. Lead counsel are correct
in saying that they and members of their firms are able,
experienced, and qualified practitioners in class action
suits involving issues arising from race discrimination in
employment; in fact, Burlington does not claim otherwise.
And, it is true, as they assert, that two judges of this
court have awarded Charles Barnhill attorney’s fees at
the hourly rate he seeks in this case. Burlington argues,
however, that those instances did not involve contests
over fee awards or, at least, awards that were as vigor-
ously opposed as it opposes the applications of lead coun-
sel here.
While it may be true that the two fee awards to Barn-
hill were not vigorously contested or were by agreement,
this fact would increase their relevancy to this case be-
C-15
cause it would show complete agreement, by the judges
and the parties, that the rate of $170 per hour was reason-
able. In contrast with the Barnhill firm, Paul Sprenger’s
firm does considerable work on an hourly-billed basis for
which the charge per hour is $180 for Sprenger and $160
for the services of his two associates, Olson and Shutes.
These are the rates they seek in this case.
It is well settled in this circuit that the object of a fee
determination is to simulate the results which would be
obtained if the lawyer involved were dealing with a pay-
ing client. McKinnon v. City of Berwyn, 750 F.2d 1383,
1393 (7th Cir. 1985); Henry v. Webermeier, 738 F.2d 188,
195 (7th Cir. 1984). This is so because the hourly rate a
private attorney ordinarily charges his clients for the
hours worked is generally the proper hourly market rate
for his services. Chrapliwy v. Uniroyal, Inc., 670 F.2d
760, 769 (7th Cir. 1982). However, if there is no evidence
of hourly rates charged paying clients or awarded previ-
ously to petitioning counsel, the fee determination should
be based on the market rate for the services the lawyer
rendered; that is, the rate that lawyers of similar ability
and experience in the community normally charge their
paying clients for work and responsibility undertaken in
similar litigation. Henry v. Webermeier, 738 F.2d at 193.
In setting an appropriate fee award on these applica-
tions (since the reasonableness of the total hours claimed
is conceded), this court must determine whether petition-
ing counsel have shown that rates they seek are those
they charge paying clients, or are ones at which they have
been awarded fees, or are the prevailing rates paid to
comparable attorneys in the community where they prac-
tice. The product of the number of hours multiplied by
the reasonable hourly rate is the amount of the reasonable
fee. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). This
is normally the award of attorneys’ fees contemplated by
Title VII; it is the amount that is presumably reasonable
and petitioners for fees have the burden of rebutting this
presumption. Blum v. Stenson, 104 S.Ct. 1541, 1548
(1984). Burlington, on the other hand, is correct in point-
C-16
ing out that the aim of a fees award “is to permit and
encourage the redress of the civil rights violations of vic-
tims but not to create a civil rights fee bank to be liberal-
ly drawn upon by lawyers for their own welfare.” Coop
v. City of South Bend, 635 F.2d 652, 655 (7th Cir. 1980);
see also McPherson v. School Dist. No. 186, 465 F. Supp.
749, 756 (S.D. Ill. 1978).
This latter point leads the court to observe that there
is some merit in Burlington’s contention that the hourly
rates sought by lead counsel are too high. For one thing, i
the arguments in support of the petitions involve a degree
of self-touting. There is justification for the criticism that
lead counsel’s witnesses on hourly rates, although capable
and respected attorneys, disclose little familiarity with
petitioning counsel, with this litigation, or with rates
charged by similar practitioners in class suits involving
claims of race discrimination in employment opportunities.
However, on balance, the pertinent factors having been
considered, see Johnson v. Georgia Highway Express, 488
F.2d 714 (5th Cir. 1974), this court concludes that the re-
quested hourly rates are not so high as to warrant their
rejection. As to each lawyer involved, there is evidence
that the hourly rates requested have either been paid by
clients or awarded to them by a court in the past. Con-
trary to Burlington’s contentions, these matters are not
subject to precise mathematical determinations. Lead
counsel have shown that the Sprenger firm has charged
clients the rates requested for Paul Sprenger and his part-
ners; Charles Barnhill, on at least two occasions, has been
awarded fees at the rate requested for him. The requested
rates approximate, as close as these matters can, the pre-
vailing ones paid to comparable attorneys in the relevant
community. In this case this is Chicago, Illinois, for
Charles Barnhill or Judson Miner and their associates;
Minneapolis, Minnesota, for Paul Sprenger and his part-
ners. Hensley v. Eckerhart, 461 U.S. at 433-34 (1983);
Blum v. Stenson, 104 S. Ct. at 1548. Therefore, for the
total hours they worked, to and including March 31, 1984,
lead counsel, their partners, associates, and paralegals, are
lian
C-17
awarded the hourly rates they ask for. Based thereon,
the following are the lodestar fees to which they are en-
titled.
Hourly Lodestar
The Attorney Total Hours Rates Fees
Paul C. Sprenger 3,222.25 $180 $580,005.00
Erie L. Olson 1,206.50 160 193,040.00
Robert L. Shutes 3,227.25 160 $16,360.00
SO&S Paralegals 3,587.00 40 143,480.00
$1,432,885 .00
Charles Barnhill 2,918.50 $170 $496,145.00
Judson S. Miner 97.50 170 16,575.00
George F. Galland 5.00 170 850.00
Briget Arimond 1,267.50 110 139,425.00
Nancy J. Anderson 212.50 135 28,687.50
Paul Strauss 71.20 95 6,764.00
DMB&G Paralegals 1,570.85 40 62,834.00
$751,280.50
Total: $2,184,165.50
Burlington will be ordered to pay this total sum in fees
to lead counsel, with interest from the date of the order
entered in accordance with this memorandum. Preston v.
Thompson, 565 F. Supp. 294, 297 (N.D. Ill. 1983).
B
Lead counsel, however, do not agree with this deter-
mination of the date their fees are to earn interest. They
assert that interest on their fees should be calculated from
the date this court fully approved the consent decree be-
cause that approval fixed Burlington’s obligation to pay
plaintiffs’ attorney fees, and left only the amount to be
determined. They argue that, as this court ruled earlier,
and as the Seventh Circuit explained in Gatreauz v.
Chicago Housing Authority, 690 F.2d 601, 612 (7th Cir.
1982), current rates should be awarded to adjust for in-
flation of the period lead counsel waited for payment of
their fees. They point out that almost a year has passed
since this court heard evidence on the fee petitions, dur-
ing which there has been a substantial increase in the
costs of living, and some law firms have increased their
hourly rates. Accordingly, lead counsel argue that there
C-18
should be either an upward adjustment of the hourly rates
or interest retroactive to the date the consent decree was
fully approved. “This use of current rates simplifies the
Court’s task and roughly counterbalances the inflationary
loss suffered by the attorneys because of the long delay
in recovery of their fees.” In re Ampicillin Antitrust
Litigation, 81 F.R.D. 395, 402 (D.D.C. 1978). |
Although they do not use the term nor discuss the con-
cept, it is obvious that what lead counsel are asking is
yon ore interest on the fees awarded them. General-
, prejudgment interest in a case governed by federal
law is a matter left to the trial court. Twin City Sport-
service, Inc. v. Charles O. Finley & Co., Inc., 676 F.2d
1291, 1310 (9th Cir. 1982). An award of prejudgment in-
terest is responsive to considerations of fairness; if it will
act as a penalty on a relatively innocent defendant, the
district court has discretion to refuse to make such an
award. Sanders v. John Nuveen & Co., 524 F.2d 1064,
1075 (7th Cir. 1975).
Stating the principles of these cases serve to reveal why
lead counsels’ contentions and arguments on this matter
must be rejected. It was they who petitioned for fees at
an hourly rate they considered high enough, and re-
quested a multiplier, first of 3.5, and then at 2.5. As they
had a right to, they chose to litigate with Burlington the
issues thus raised, and defendant, as it had the right to,
opposed both the hourly rates requested and the multi-
plier sought. In other words, this was a good faith dispute
originated by lead counsel and joined in, with vigor, by
Burlington. Despite the Supreme Court’s admonition that
“{a] request for attorney’s fees should not result in a se-
cond major litigation,” Hensley v. Eckerhart, 461 U.S. at
437, the proceedings on these petitions have developed
into just that. This court has permitted a liberal sched-
ule for hearing of evidence and the submission of briefs,
memoranda, affidavits, and exhibits. The last filing, one
that interfered with this court’s ruling schedule, was on
September 4, 1985. Lead counsel cannot have it both
ways. They cannot elect to litigate, take all the time af-
C-19
forded them by the court, and then get interest applied
retroactively on a fee award of over $2 million, to the
date the court fully approved the consent decree, a period
of almost eighteen months. To put it bluntly, what lead
counsel argue for, if granted them, would be grossly un-
fair.
For these reasons, in the exercise of its sound discre-
tion, this court will not order an upward adjustment of
the lodestar fees; and, in its judgment, lead counsel are
not entitled to interest on fees awarded them retroactive
to the date full approval was given to the consent decree.
Cf. Greenspan v. Automobile Club of Michigan, 536 F.
Supp. 411 (E.D. Mich. 1982).
C
This brings up the issue whether the results achieved
by lead counsel make this the kind of “exceptional suc-
cess” that would entitle their being paid not only the lode-
star fees but a multiplier as “an upward adjustment”’ for
the legal work they have performed. They argue that on
the record there must be a multiplier in order to compen-
sate for the extreme risk they undertook in representing
plaintiffs and the class, the delay they have experienced
in receiving payment, and the relief, monetary and injunc-
tive, they have obtained for their clients in this somewhat
extended employment discrimination case. Lead counsel
insist that they have shown by proper evidence, and have
demonstrated beyond question, that no lawyer competent
to litigate this kind of vigorously defended lawsuit would
have been willing to handle the litigation for the normal
hourly fee. They point to the huge amount of attorney
time they have devoted and to the expenses they have
advanced; between them, their two firms have expended
a total of $1,131,929.19 in expenses on behalf of evident-
ly indigent litigants. Lead counsel detail the catalog of
difficulties they encountered and overcame because of
their professional abilities and devotion to the cause of
their clients. They now contend that unless Burlington is
C-20
ordered to pay a multiplier of at least 2.5,® in cases such
as this one, enforcement of Title VII will suffer.
Burlington, with an intensity of litigation vehemence its
lawyers have not displayed during any other aspect of this
controversy, contends that no multiplier should be awarded.
It argues that while the consent decree contains signifi-.
cant and appropriate relief, one that some might view as
very good or even excellent, this case cannot be regarded
as an “exceptional success” as that term has been used
by the Supreme Court of the United States. It points out
that this was a settlement; the consent decree does not
establish any legal precedent benefiting anyone outside
of plaintiffs and the class; therefore, the relief granted
was not exceptional in the sense of representing a land-
mark decision. Burlington asserts that while the $10,000,000
it paid into the fund is a large sum of money, the amount
must be considered in light of the number of persons who
will share in it and who total, according to lead counsel,
as many as 20,000. Of these, a substantial portion will re-
ceive no money and of those 7,000 to 8,000 who will re-
ceive some monetary award, the average amount will be
approximately $1,400 to $1,250.
As to the injunctive provisions of the decree, Burlington
insists that none is unprecedented, unusual, or otherwise
exceptional. The “‘fill rates’’ which lead counsel say make
6 When lead counsel first filed their petitions for fees, they re-
uested, with detailed arguments, a multiplier of 3.5. But when
they submitted their proposed findings of fact and conclusions of
oy a requested multiplier, without explanation, was reduced
to 2.0.
7 This is the position Burlington takes in closing brief on the issue
of a multiplier or upward fee although its answer to the petitions
for fees contains the somewhat vague concession that ‘[bJecause
this was a large case and involved substantial expenses, some en-
hancement may be permissible, but under no circumstances should
the multiplier exceed 1.15.” It is obvious, however, that this state-
ment was made in the context of Burlington’s contention that the
hourly rates sought by lead counsel should be reduced.
C-21
this case an exceptional one are not new and may not
result in any increased employment of plaintiffs or mem-
bers of the class; the “priority hiring” provisions about
which petitioning counsel speak so highly actually provide
the class with no benefits beyond that given them by the
fill rates; and the transfer provisions are, in fact, less sig-
nificant as relief devices than lead counsel believe. These
details of the consent decree, according to Burlington, do
not support the claim that in this case lead counsel have
achieved that degree of “exceptional success’’ or that this
is a “rare case” so as to justify the multiplier requested.
Hensley v. Eckerhart, 461 U.S. 424 (1983) is the first
opinion, as far as this court can ascertain, in which the
Supreme Court of the United States, without defining the
term, used the expression ‘exceptional success.” There,
the Court had before it the issue of whether in a civil
rights suit a partially prevailing plaintiff may recover an
attorney’s fee for legal services rendered in pursuing un-
successful claims. The Court held that the extent of a
plaintiff's success is a crucial factor in determining the
proper amount of an award of attorney’s fees under 42
U.S.C. § 1988;8 and that where a plaintiff achieved only
limited success, a district court should award only that
amount of fees that is reasonable in relation to the results
obtained. Hensley v. Eckerhart, 461 U.S. at 436. In re-
solving the issue, the Court said, “Where a plaintiff has
obtained excellent results, his attorney should recover a
fully compensatory fee. Normally this will encompass all
hours reasonably expended on the litigation, and indeed
in some cases of exceptional success an enhanced award
may be justified.’’ Jd. at 435.
8 In this case, the award of fees is sought under Section 2000e-5
of Title VII. It was held in Doe v. Busbee, 684 F.2d 1375, 1380
n.3 (11th Cir. 1982), that:
Although the Title VII attorney’s fees provision and § 1988
are separate and distinct statutory bases for awards of attor-
ney’s fees, both employ the “prevailing party” concept and
both have received similar construction.
C-22
Then, in Blum v. Stenson, 104 S. Ct. 1541 (1984), a 1978
suit filed on behalf of a statewide class of Medicaid re-
cipients, the Court was called upon to decide under what
circumstances an upward adjustment of an attorney’s fees
award based on prevailing market rates is appropriate '
under Section 1988. It ruled “that the ‘product of reason- !'
able hours times a reasonable rate’ normally provides a ’
‘reasonable’ attorney’s fee within the me of the stat-
ute.” Blum v. Stenson,-t04 S. Ct. at 1548 548. Referring to
its opinion in Hensley, the Court said that decision “recog-
nized that ‘in some cases of exceptional success an en-
hanced award may be justified.’”’ Jd. at 1548. The burden
is on the fee applicant to prove that in the relief obtained
there has been “exceptional success.” Jd. at 1550. How-
ever, because this burden had not been discharged by
Stenson, the Court held that it was an abuse of discre-
tion for the district judge to give a 50 percent upward
adjustment in the fee. /d.®
Again, as in Hensley, the Court neither explained nor
defined “‘exceptional success” when used with regard to [
the relief obtained in a civil rights case. But this is not
a technical term; it consists of words that have a com-
mon ordinary meaning and there is no reason to believe
that the Court used them in any other way. Webster, al-
ways a reliable source for the meaning of English words,
tells us that “exceptional”, an adjective, means “form-
ing an exception: being out of the ordinary: uncommon,
® It appears from the decided cases that the concept of enhance-
ment 0 a lawyer's fees is referred to sometimes as “a bonus”,
as “a multiplier”, or as “an upward adjustment”. In Blum v. Sten- i
son, 104 S. Ct. at 1547 n. 12 the Court said: |
The District Court characterized the 50% increase as a |
“bonus.” The Court of Appeals, in-its brief opinion, spoke of Fl
it as an “upward adjustment.” As we think the latter char-
acterization is fairer, we will use it.
This court will also use the expression “upward adjustment” but
on occasion, to emphasiz the point, it will also use the term
“multiplier.”
ES
C-23
rare . .”’ Webster’s Third New International Diction-
ary (G&C Merriam Co., 1966). Therefore, for success in
a suit like this one to be exceptional, the relief obtained
must be out of the ordinary, uncommon, or rare.
In this case, the complaints that McBride and Butler
made to Charles Barnhill sometime in 1977 concerned
their experiences as Negro employees of Burlington.
There was nothing esoteric, complex, or unusual about
what they must have told him. They wanted damages for
what they said were injuries they suffered from being
denied employment opportunities in the Burlington system
and they wanted injunctive relief from the alleged race
discriminatory policies and practices that infringed their
rights as employees of the railroad. Investigation by Barn-
hill led him to conclude that the claims of the two men
could be cast into a class suit.
As to the suit filed by Paul Sprenger for William For-
bush, nothing in this record suggests that the complaint
made to him was any different; the allegations in the suit
filed in the United States District Court for Minnesota
were like those made in this court for McBride and Butler.
This is just as true of the other suits, the tagalongs and
the cases consolidated with this one. The consent decree
and the relief it gave McBride, Butler, Forbush, the other
plaintiffs, and members of the class, conform to what was
sought in the complaints. It gave plaintiffs and the class
money, that is, $10,000,000 in settlement. This sum, though
large, is not an unusual or an extraordinary amount to
be shared by members of a class consisting of as many
as 20,000 people, with 7,000 to 8,000 of them being al-
located sums ranging from substantial to minimal.!° In
fact, as lead counsel know from cases they have handled,
0 The named plaintiffs, a total of twenty-three persons, have
been allocated sums ranging from $197,595 for McBride and Butler
down to $35,000, the minimum given five of them. The class mem-
bers have been allocated sums under $35,000 and as little as $100,
a majority receiving less than $1,000 each.
C-24
large, multi-million dollar sums are recovered in employ-
ment discrimination class suits.
For example, in Elliott v. Sperry Rand Corp., 680 F.2d
1225 (8th Cir. 1982), the sum involved $1.5 million as
monetary relief for past discriminatory practices, the total
class consisting of approximately 3,000 members. Laffey
v. Northwest Airlines, Inc., 746 F. 2d 4 (D.D.C. 1984), pro-’
duced a $52 million recovery for a class ‘of more than
3,300 women employed by Northwest Airlines, Inc. .. .”
Id. at 7. In re Southern Pacific Transportation Company
Employment Practices Litigation, MDL 262 (S.D. Tex.),
was a settlement that created a $3 million fund for plain-
tiffs and the class. Mays v. Motorola, 18 EPD 48902 (N.D.
Ill. 1979), was settled before appeal for monetary and af-
firmative relief valued at $15 million. Liberles v. County
of Cook, 709 F.2d 1122 (7th Cir. 1983), a race discrimina-
tion class action, resulted in a money jucgment in excess
of $14 million, described by lead counsel as ‘the largest
backpay judgment in the history of Title VII.” The cases
vary in their details, but they show that large monetary
relief in employment discrimination class suits, although
not recovered as a matter of course, is not uncommon.
See generally 4 H. Newburg on Class Actions, §24.116
(2d ed. 1985).
Lead counsel insist, however, that the dollar value of
the settlement fund is not the only measure of the success
they achieved in this case. They say that the hiring, pro-
motions and locomotive engineer training provisions of the
consent decree have an economic value that make this
case ‘an unprecedented settlement . , one that “was
the largest pretrial Title VII race settlement that had
ever been achieved as of the time it was reached . s
that they “achieved an extraordinary result . an ac.
complishment that “was of an unprecedented character.”
Reply Brief of Lead Counsel at 5, 18, 20, 22. Lead coun-
sel support these appraisals of their work with the affi-
davit of an expert in economics and with what they say
is “a compendium of some of the [newspaper] stories gen-
erated by the BN settlement.” Reply Brief of Lead Coun-
NN ae Seah NEI eS ASLO ASIN ais om ten
C-25
sel at 23-24. They say that “(t]he BN settlement was one
of the lead civil litigation stories of the year. It was re-
ported on national television and scores of newspapers
nationwide.” Reply Brief of Lead Counsel at 23. Exami-
nation of the newspaper articles discloses that most of
them reported the April 2, 1984 fairness hearing which
this court held on the consent decree; and in a number
of them there appeared the information that this case
represented the largest civil rights settlement in United
States history, the payment of $60.5 million in benefits
to thousands of Negroes who had sued Burlington for al-
leged bias in personnel policies. Charles Barnhill, or a
spokesperson for EEOC, was quoted as the source for this
value of the settlement.
In reading these articles, the court is compelled to notice
that the economic value of the consent decree has never
been adjudicated in any proceeding in this case. On April
2, 1984 when the fairness hearing was held, lead counsel
were present. Intervenor EEOC was represented by one
of its staff lawyers; and Thompson Powers, the lawyer
who had represented Burlington in negotiating the con-
sent decree appeared for the railroad. The record shows
that Barnhill made the first presentation in support of
the consent decree. After a general review of the litiga-
tion, he said that an expert, one he and Sprenger had
hired, ‘“‘has valued this injunctive relief conservatively—
and I mean conservatively—in excess of $50 million. In
sum, the settlement is the largest pretrial settlement ever
achieved in a racial discrimination case since the passage
of Title VII.’’!! Tr. 4/2/84 at 7. When Paul Sprenger spoke,
he referred to the affidavit of the expert which expressed
the opinion “‘that the economic benefit to the class of people
that we are talking about here is about $60.5 million... .”
Tr. 4/2/84 at 12.
11 This designation refers to the Transcript of Proceedings for
April 2, 1984.
C-26
When Thompson Powers responded for the railroad, he
reviewed his role in the negotiation process, referred to
the estimates of the decree’s value which Barnhill and
Sprenger had made, and then said:
Plaintiffs are certainly entitled to their own esti-
mate of what they have achieved, and except for its
outcome on other stages of the proceeding, the com-
pany has little reason to challenge their estimates.
But we must observe, as we have in our brief, that
we think that their efforts to quantify the injunctive
aspects of this decree are highly speculative, are ex-
travagant, and in our judgment, may represent attor-
ney fees puffery.
Tr. 4/2/84 at 33.
Powers made this statement a long time before the peti-
tions for fees were filed by lead counsel; it was somewhat
prophetic. The affidavit in support of the petitions is now
a part of the record. A reading of it discloses it was pre-
pared to support the representations made to this court
and statements made to newspaper reporters by Barnhill
and EEOC staff members after the fairness hearing. The
expert swore to the affidavit on March 31, 1984 and after
describing his relationship with lead counsel, he stated the
conclusion “‘that there are substantial economic benefits
to the class from the Consent Decree which will exceed
$60 million.” This evaluation included the cash, hiring, pro-
motions and locomotive engineer training provisions of the
consent decree. On September 8, 1984, the expert issued
another affidavit in which he acknowledged a $3 million sub-
traction error, thus reducing his estimate to $57.5 million.
Burlington counters this opinion with one from an ex-
pert employed by its lawyers, and one who comes into
the record through an affidavit that exudes exemplary
academic qualifications. This expert devotes careful atten-
tion to the many errors he says were made by lead coun-
sel’s expert when he progressed to his conclusions con-
cerning the economic value of the consent decree. The ex-
pert then comes to the conclusion that after weighing all
ee ne
C-27
the economic imponderables, the subtlety of the employ-
ment factors, the uncertainties of the speculative business
possibilities of the future, and correcting the errors of lead
counsel’s expert, the economic value of the injunctive pro-
visions of the consent decree could not be worth more
than $6 million. Plainly, the views of these experts are
in irreconcilable conflict. Of what value are they to this
court in its resolution of the issue presented? Actually,
very little.
First, there are serious questions concerning the ac-
curacy of the calculations made by lead counsel’s expert.
As to both experts, they remind this court that it has
been patiently waiting for the day when it will hear an
expert give an opinion that does not slavishly parrot the
case theory of the lawyer who employs him. Second, this
court does not need the opinion of experts for it to grasp
that the injunctive provisions of this consent decree has
a money value; common sense, alone, makes this evident.
Therefore, it will, as it may, “‘substitute its own common-
sense judgment for that of the experts.”’ Webster v. Off-
shore Food Service, Inc., 434 F.2d 1191, 1193 (5th Cir.
1970), and discount such testimony entirely. United States
v. Makris, 535 F.2d 899, 908 (5th Cir. 1976).
The court proceeds, then, on the assumption that the
right to fill job vacancies as they occur in the relevant
period, to priority hirings and promotions, and to oppor-
tunities for locomotive engineer training have an economic
value, perhaps not as little as Burlington’s expert claims
and most likely not as much as lead counsel’s expert con-
tends. Contrary to lead counsel’s arguments, this kind of
relief is not extraordinary or uncommon in employment
discrimination class suits. In fact, Section 706(g) of Title
VII, 42 U.S.C., Sec. 2000e-5(g), provides that “ilf the
court finds . . . [an employer] has intentionally engaged
in or is intentionally engaging in an unlawful employment
practice as charged in the complaint, . . . [it may] enjoin
the [employer] from engaging in such. . . practice, and
order such affirmative action as may be appropriate, which
may include, but is not limited to, reinstatement or hir-
C-28
ing of employees, . . . or any other equitable relief as the
court deems appropriate.” Cases are common where such
relief is granted, either in consent decrees or adjudicated
judgments. Cf’ EEOC v. American Tel. & Tel. Co., 556
F.2d 167 (8d Cir. 1977); Officers for Justice v. Civil Ser-
vice Comm’n, etc., 688 F.2d 615 (9th Cir. 1982); see also
B. Schlei and P. Grossman, Employment Discrimination
Law 1395-1417 (2d ed. 1983), 1983 Supp. 168-172 (listing
and discussion of the leading and current cases).
But while keeping in mind the size and extent of the
relief which lead counsel obtained for their clients through
the consent decree in this case, this court will follow the
admonition that “judges determining fee awards should
not be unduly influenced by the monetary size of the class
settlement or judgment; a large settlement can as much
reflect the number of potential class members or the scope
of the defendant’s past acts as it can indicate the prestige,
skill, and vigor of the class’s counsel.” City of Detroit v.
Grinnell Corp., 560 F.2d 1098, 1099 (6th Cir. 1977).
Of course, the size of the settlement is not the only
feature of this case that should be considered in deter-
mining whether lead counsel are entitled to a fee enhance-
ment or multiplier. Consistent with this notion, lead coun-
sel argue that the risk they took in representing plain-
tiffs and the class were so great that unless their lode-
star fees are subjected to an upward enhancement or
multiplier, they will not receive the compensation to which
they are entitled. They point to the testimony of witnesses
as to their chances of recovery. Burlington, according to
some of the testimony, “had a better than 50/50 chance
to prevail”; other witnesses said that the “chance of [plain-
tiffs] prevailing was less than 50%.’’ Based on these per-
centages, lead counsel argue that when they filed and pur-
sued this litigation, they took the risk of not prevailing,
and losing all they had put into it. They took the chance
that there would be changes in the law, that they would
be defeated by Burlington’s litigation and settlement
strategies, and that they may not have been able to con-
tinue financing the suits in the face of heavy costs and
C-29
expenses. Despite these risks, lead counsel say they ad-
vanced more than $1 million to their clients and devoted
thousands of attorney hours, all of which they would have
lost had they not obtained the success they achieved in
the case. Counsel strongly urge the point that unless they
are granted the multiplier of 2.5 they request and thus
are compensated fully, competent lawyers in Title VII
cases will not take the responsibility of such litigation.}?
Undoubtedly, this is a broad and sweeping argument.
But the court must remind lead counsel that by the lode-
star fees awarded them, they, their partners, associates,
and paralegals, will receive the top hourly rate they have
ever been paid by clients or awarded by a court, for every
hour they have worked in this case, going back six years.
In addition, lead counsel are being reimbursed, without
any issue being raised concerning any item, all the money
they have advanced toward the costs and expenses of liti-
gation, a total of $1,131,929.19. Moreover, counsel are being
paid at current rate, the top they can request, for hours
worked during years they did not command that kind of
compensation. The court has done this in order to compen-
sate for the long delay in lead counsel’s being paid a fee.
It has kept uppermost in mind that when Congress en-
acted the fee-shifting provisions of Title VII, its purpose
was “to ensure ‘effective access to the judicial process’
for persons with civil rights grievances,” Hensley v. Ecker-
hart, 461 U.S. at 429 (quoting H.R. Rep. No. 94-1558 p. 1
(1976)), and that this court must award “fees which are
adequate to attract competent counsel, but which do not
produce windfalls for attorneys.”’ Blum v. Stenson, 104
S. Ct. at 1546.
And as it must, the court has carefully and thought-
fully read the affidavits of the many distinguished mem-
12 This multiplier will increase the hourly rate at which Paul
Sprenger will be paid to $450; and Barnhill’s, to $425. On the
average, all the lawyers will be paid $390.47 per hour. Neither
Barnhill, Sprenger, nor any partner or associate can claim ever
being paid at this hourly rate.
C-30
bers of the civil rights and Title VII bar obtained by lead
counsel as evidence in these proceedings. It has listened,
again carefully and thoughtfully, to the testimony of a dis-
tinguished lawyer of this community, one this court knows
rsonally, and the testimony of a scholar, a former
AACP staff member with whom this court became ac-
quainted in the days of the Civil Rights Movement in the
1950s and 1960s. It is unpleasant, even painful, for it to
disagree with these witnesses but the court must. It must
say it is just not true that unless lead counsel are given
the 2.5 multiplier they request in this case, competent
lawyers in Title VII cases will be discouraged from under-
taking representation of persons with such civil rights
grievances. Those who think so either do not know or
remember the history of the struggle for equality under
law in this country or they have no faith in the stamina
and potential of American lawyers to come forward aid
vindicate, in the courts, the claims of those whose civil
rights have been violated. In fact, these consolidated cases
prove this point. So many lawyers, most of them advanc-
ing costs and expenses, were willing to represent com-
plaining Negro employees of the railroad and so many
suits were filed in different United States district courts
against it, that Burlington had to seek relief from the
Multi-District Litigation Panel.
The lodestar fees which this court has awarded lead
counsel, their partners, associates, and paralegals, are
presumptively the reasonable fees to which they are en-
titled. Hensley v. Eckerhart, 461 U.S. at 437. It is “the
rare case in which an upward adjustment to the presump-
tively reasonable fee of rate time hours is appropriate.”
Blum v. Stenson, 104 S. Ct. at 1550 n. 18. There is heavy
burden on attorneys for prevailing parties who seek to
justify any an | adjustment; this burden is met only
if there are specific claims based on particular factors and
-_ rted by specific evidence. Thompson v. Barrett, 599
upp. 806, 815 (D.D.C. 1984). If this burden is met,
it is the duty of this court to state with particularity why
an upward adjustment is necessary in order that the at-
C-31
torneys be adequately compensated. Murray v. Weinberger,
741 F.2d 1423, 1428 (D.C. Cir. 1984); Thompson v. Barrett,
599 F. Supp. at 815.
Here, however, lead counsel have not met the required
burden; they only refer in general terms to the chances
the parties had of prevailing. Other than the general
agreement among lead counsel’s affiants about the difficul-
ties of Title VII cases, there is no specific evidence in
support. The fact is, every Title VII case, like civil cases
generally, presents the chance of not prevailing. It seems
to this court that lead counsel are confusing the difficulties
of trial with risk, as that term is used in this area of the
law. One need not be a specialist in the hazards of civil
litigation to know that if the claims of individual plain-
tiffs are cast into a 20,000 member class suit against a
viable, ongoing, solvent railroad corporation that does
business in twenty states, there are chances that plain-
tiffs will not prevail. Particularly is this true if the cor-
poration is charged with race discrimination against its
employees. Corporations, even when they are guilty, do
not take lightly to charges that they commit wrongs
against those they employ.
Thompson v. Barrett, 599 F.Supp. 806 (D.D.C. 1984),
cited by both parties to this controversy, is a good ex-
ample of what is “exceptional success” in a civil rights
case as that term was used in Blum v. Stenson, 104 S.
Ct. at 1548. Therefore, the case is worth examining in
some detail because its facts and the legal principles it
represents aid this court in resolving the issue whether,
in this case, lead counsel are entitled to an enhancement
or multiplier of their lodestar fees.
In Thompson, five female employees in the bindery divi-
sion of the Government Printing Office (GPO), on May 25,
1973, filed an administrative complaint on behalf of ap-
proximately 325 Journeyman Bindery Workers (“JBWs’’)
employed by the GPO. They alleged Title VII and Equal
Pay Act violations, and access violations under Title VII.
They sought reclassification of all JBWs as Bookbinders,
C-32
with pay commensurate with that reclassification. They
also sought monetary and injunctive relief for what they
all were illegal and discriminatory impediments to
JBWs renege, by weer They lost the administrative
proceedings, GPO finding that the females, and those on
whose behalf they had filed the administrative complaint,
were not victims of sex discrimination. .
Then on July 24, 1974, a class suit was filed in the
United States District Court for the District of Columbia.
Again, as in the administrative complaint, plaintiffs relied,
inter alia, on Title VII of the Civil Rights Act of 1964,
as amended, 42 U.S.C. § 2000e-16; the Equal Pay Act of
1963, as amended, 29 U.S.C. § 206(d); and Executive
Order 11478, 34 C.F.R. 12985, as amended. Plaintiffs al-
leged a broad pattern and practice of discrimination on
the part of GPO extending to all class of plaintiffs; they
sought injunctive, declaratory, and monetary relief, both
prospective and retrospective.
When the case was filed, it was the first in that dis-
trict to seek the use of quotas as a remedy for discrimi-
nation; it was one of the very few cases in the nation that
challenged an established apprenticeship program; it was
the first case to seek a determination that Equal Pay Act
violations occur when males and females operated differ-
ent machines; and it raised several important questions
regarding the retroactive and prospective effect of Title
VII and the Equal Pay Act. The case first went to trial
before the judge to whom it was assigned and at the close
of plaintiffs’ case, he granted summary judgment in favor
of the government on the Equal Pay Act claims. The case
was then tried to a conclusion bwt no decision was ren-
dered because the judge died before making the requisite
findings under Title VII. The case was randomly assigned
to another member of the court: That judge, after care-
ful consideration, ruled that plaintiffs were entitled to a
new trial on all issues and after discovery and pretrial
proceedings, a second trial began on March 7, 1979. On
October 1, 1979 a memorandum opinion on the issue of
liability was issued. In it, the court held that Grade 4
C-33
JBW plaintiffs who operated Smyth Sewing Machines were
entitled to relief under the Equal Pay Act, and that all
plaintiffs were entitled to relief under Title VII on the
grounds, among others, that the four-year apprenticeship
nt ogg was unnecessary and constituted a violation of
itle VII as applied to the plaintiffs, and that the classifi-
cation of all plaintiffs differently from Bookbinders also
violated Title VII.
On May 20, 1980, a relief order was issued, together
with a supporting memorandum which ruled that the plain-
tiffs were entitled to back-pay relief under the Equal Pay
Act and Title VII, prior to the effective date of those
statutes, that they were entitled to hiring preferences
over males until fifty percent were women, and other pro-
spective relief. The government appealed. On April 27,
1982, the Court of Appeals for the District of Columbia
Circuit affirmed the trial court’s decision in almost every
respect. Thompson v. Sawyer, 678 F.2d 257 (D.C. Cir.
1982). The court remanded for the narrow ground of re-
fashioning the quotas or goals which the trial court had
established and for revising the formula for front pay to
make it consistent with the formula used for rewarding
back pay for Title VII access violations. Although the gov-
ernment petitioned for an extension of time in which to
file a petition for rehearing before the court of appeals,
the motion was denied; GPO did not seek certiorari re-
view by the Supreme Court. Then, the lawyer who had
filed the case originally, and two others, petitioned for
fees and costs through June 25, 1982. Request was made
for two separate fifty — upward adjustments to the
lodestar amount, the first for exceptional risk involved in
handling the case; the second for the exceptional results
obtained.
The court first analyzed the claim of the lawyers that
the risks involved justified an upward adjustment of the
lodestar fees. After applying recent case law, decisions
of the Supreme Court and of the circuit, and looking at
the evidence presented in support of the request, the
court found that plaintiffs had less than a nineteen per-
C-34
cent chance of success. It reviewed the history of the case,
the first trial and the adverse ruling on the Equal Pay
Act claims, the success of the plaintiffs in second trial,
the appeal by the government, and the affirmance of the
trial court in almost every respect. The court ruled that
the lawyers had established grounds for a fifty percent
upward adjustment of the lodestar fees for the risks in-
volved in their handling the case.
Then it turned to the question whether the attorneys
had met the burden regarding award of an upward adjust-
ment for exceptional success. On this point, the court re-
viewed the results obtained. First, the monetary awards,
for a class of 382 women, totalled more than $20 million;
second, the “‘case resulted in many other improvements
in the plaintiffs’ workplace, including elimination of the
4-year apprenticeship requirement for bookbinders and the
opening of the door for women and other minorities to
achieve supervisory status.” Thompson v. Barrett, 599 F.
Supp. at 816. The court noted that the case set precedents
in many areas which were unclear when the suit was filed.
It was the first one in the circuit to use quotas as a
remedy for employment discrimination; it was one of the
very few cases in the nation that successfully challenged
an established apprenticeship program; it was the first
case to hold that Equal Pay Act violations can occur when
males and females operate different machines in the book-
binding industry; and the case resolved several important
questions regarding retroactive and prospective effect of
Title VII and Equal Pay Act provisions. The court went
on to say that
Even beyond this, the impact of this suit has affected
the entire printing industry. Sex-segregated unions
have merged together. The shock waves of this case
have spurred inquiries and. investigations into the
work environment of all public and private printers.
This was certainly an exceptional case, with far-reach-
ing impact on the entire business or profession.
C-35
Id. The court awarded the prevailing attorneys a twenty-
five percent upward adjustment to the lodestar fee for
exceptional results. The fee as adjusted for the three
lawyers, one of whom had been in the case for twelve
years from the date of the original filing, their associates
and paralegals, totaled $1,566,232.50. In summarizing the
reasons for his ruling, the able and experienced district
judge said, without equivocation, that “(in every respect,
this case represents an outstanding example of tenacious
advocacy, the making of new law, and doing so in the face
of extreme odds and in the finest tradition of legal ad-
vocacy at its very best.” Jd. at 808.
Nothing like this can be said of this case. It is not one
that invoked any new theory of law; the risks were not
as great; it did not create any new form of remedy for
race discrimination victims in the area of employment; it
did not establish any new rule of law; and in fact, the
relief, in terms of money and employment opportunities,
was spectacularly greater in Thompson than in the case
at bar. Of course, lead counsel here deserve, and they
are extended, the commendations of this court for the
good work they have done and for that they are being
paid reasonable and adequately compensatory fees.
The court is constrained to conclude, therefore, that this
is not the kind of “‘exceptional success” that would en-
title lead counsel being paid not only the lodestar fees
awarded but in addition any multiplier as “an upward ad-
justment” for the legal work they have performed. They
have not carried the burden of proof imposed on them
by the cases; therefore, a multiplier, of any amount, would
be improper. McKinnon v. City of Berwyn, 750 F.2d 1383
(7th Cir. 1984); Strama v. Peterson, 669 F.2d 661 (7th Cir.
1982); see also Laffy v. Northwest Airlines, Inc., 746 F.2d
4 (D.C. Cir. 1985); cf. Jones v. Central Soya Co., 748 F.2d
586 (11th Cir. 1984). On the evidence lead counsel have
introduced, it would be an abuse of discretion for this
court to grant an upward adjustment of the lodestar fees.
Blum v. Stenson, 104 8. Ct. at 1550.
C-36
D
Having thus concluded, and the amount of attorneys’
fees and expenses having been determined,!* the remain-
ing issue is whether the thirteen union defendants!4
should be ordered to assume responsibility for some por-
tion of the fees and expenses which are ordered paid to
counsel for plaintiffs and the class. Burlington contends
that this should be done because some of the fees and
expenses are attributable to seniority issues on which
plaintiffs are the prevailing parties. The unions do not
agree; they contend that no portion of the fees and ex-
penses should be their responsibility because (1) the appli-
cations for fees and expenses by lead counsel were not
filed against them; (2) that under Northwest Airlines v.
Transport Workers Union, 451 U.S. 77 (1981), Burlington
is not entitled to any contribution of fees and expenses
from them; and (3) in any event, plaintiffs were not “pre-
vailing parties” as to the unions.
18 The amount to be paid lead counsel will include their claimed
expenses. But since Burli n agrees that the amount of expenses
shown in the petitions is fair, reasonable, was advanced by lead
counsel, and that it will pay them, the court will not include the
expenses in the order to be entered. This is without prejudice to
lead counsel to apply for an order concerning expenses, if, for some
reason, this becomes necessary.
14 The unions who have been defendants in this case, and who
joined in the consent decree are: (1) Brotherhood of Railway, Air-
line & Steamship Clerks, Freight Handlers, Express & Station
Employees; (2) Brotherhood of motive vy eoete (3) Railroad
Yardmasters of America; (4) Brotherhood of Maintenance of Way
Employees, AFL-CIO; (5) Brotherhood of Railway Carmen of the
United States and Canada, AFL-CIO; (6) International Associa-
tion of Machinists & Aerospace Workers; (7) International Associa-
tion of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers &
Helpers, AFL-CIO; (8) International Brotherhood of Electrical
Workers, AFL- 10; (9) International Brotherhood of Firemen &
Oilers, AFL-CIO; (10) Sheet Metal Workers International ‘Associa-
tion, AFL-CIO; (11) American Train Dispatchers Association, AF L-
CIO; (12) United Transportation Union, AFL-CIO; (13) Brother-
hood of Railroad Signalmen, AFL-CIO.
a
C-37
These contentions require an examination of the consent
decree, and particularly, the provisions relating to antici-
pated attorneys’ fees and expenses. Article IX states, in
part, that:
BN will not dispute the entitlement of counsel for
private plaintiffs and EEOC to reasonable costs, in-
cluding (except as to EEOC) reasonable attorneys’
fees, as provided [in the consent decree], on any issue
but may seek apportionment of those costs and fees
among all defendants or contribution from the unions
for allocable portion of those costs and fees.
The defendant unions do not agree that private
plaintiffs and EEOC are entitled to any costs and
fees from them. The defendant unions may make
whatever objections they deem appropriate to the
private plaintiffs’ and the EEOC’s petition as well
as to any effort by BN to secure apportionment of
= tion for an allocable portion of those costs and
ees. :
An addendum to the decree, agreed to by the unions, in
part provides:
Plaintiffs’ counsel will seek costs and fees with re-
spect to the hiring and discipline/discharge issues, in-
cluding claims as defined in paragraph II.B.2 (page
4) of the Decree, from BN only. As provided in Part
IX of the Decree, BN does not dispute the entitle-
ment of counsel for private plaintiffs and EEOC to
reasonable costs as determined under Part IX, includ-
ing (except as to EEOC) reasonable attorneys’ fees,
as to those issues. BN will not seek apportionment
of or contribution towards the costs and fees relating
to the issues specified in this paragraph from the
unions.
Clearly, under these provisions, it was contemplated
that fees and expenses would be sought from Burlington;
that the railroad would then seek apportionment among
and contribution from the unions; and that the unions pre-
served the right to object to any apportionment or contri-
C-38
bution. Therefore, the procedure used here, namely, lead
counsel seeking their fees and expenses from Burlington
with the railroad seeking allocation among the unions, is
as provided for by Article IX and the addendum to the
consent decree. For these reasons, lead counsels’ filing
their petitions only against Burlington does not prevent
the unions from being ordered to assume some responsibil-
ity for the fees and expenses of this case.
The unions’ reliance on Northwest Airlines v. Transport
Workers Union, 451 U.S. 77 (1981) is misplaced; the facts
there are clearly distinguishable from the ones at bar.
Northwest Airlines is a case in which an employer was
sund liable for violations of Title VII and brought suit
against a union representing its employees, seeking contri-
bution for money damages the employer was required to
pay in Title VII damages. The union was not a defen-
dant in the underlying litigation. The Supreme Court held
that an employer cannot maintain an action for contribu-
tion toward Title VII damages against a union which was
not a defendant in the suit that resulted in a money award
against the employer. This case is different. Burlington
is not seeking contribution from non-party unions toward
damages it has agreed to pay; it seeks an allocation of
attorneys’ fees and expenses it must pay lead counsel for
plaintiffs and the class. And, more importantly, the unions
are, and have been for years, defendants in this litiga-
tion; the question of attorneys’ fees and expenses is all
part of the suit in which the unions have participated.
As was noted in Northwest Airlines, a district court
has broad power under Section 706(g), 42 U.S.C. Section
20002-(g) to fashion relief against all defendants in a Title
VII action. 451 U.S. at 93 n. 28. These defendants being
unions does not immunize them from their obligation, im-
posed by statute, to pay reasonable attorneys’ fees and
costs to a prevailing plaintiff. Numerous reported deci-
sions have allocated attorneys’ fees awards among em-
ployer and union defendants. See, e.g., Sagers v. Yellow
Freight Systems, 529 F.2d 721 (5th Cir. 1976); Barnett v.
W. T. Grant Co., 518 F.2d 543 (4th Cir. 1975); Rogers v.
C-39
International Paper Co., 510 F.2d 1340 (8th Cir. 1975);
Johnson v. Goodyear Tire & Rubber Co., 491 F.2d 1364
(5th Cir. 1974); Vulcan Society v. Fire Dep’t of White
Plains, 583 F.Supp. 1054 (S.D.N.Y. 1982); Walker v.
Ralston Purina Co., 409 F. Supp. 101 (M.D. Ga. 1976) and
Harsiton v. McLean Trucking Co., 62 F.R.D. 642 (M.D.
N.C. 1974). In all of these cases, union defendants were
held responsible for portions of attorneys’ fees and costs.
This being a Title VII action, the union defendants in this
case are similarly responsible for allocable portions of at-
torney fees and expenses, if they were prevailed against
by plaintiffs.
Some of the unions contend, however, that plaintiffs are
not “prevailing parties” as to them. For examp's, the
Brotherhood of Railway and Airline Clerks (BRAvw), has
presented evidence to the effect that on November 6,
1975, it signed an agreement with the National Railway
Labor Conference, consisting of all United States Class
I Trunk Rail Carriers, including Burlington, which gave
Negro employees a special opportunity to transfer from
a BRAC craft to any other craft, if permitted by the em-
ployer-carrier. In such transfers, Negro transferees re-
tained fallback seniority and any employee transferring
into a BRAC class or craft would bring with him or her
all previous seniority. BRAC claims that these transfer
provisions were equal or superior to the relief obtained
by the consent decree and that signing it was a gratuity
on BRAC’s part, thus resulting in plaintiffs not being pre-
vailing parties. United Transportation Union (UTU), con-
tends that the special transfer provisions of the consent
decree do not affect its practices or benefit its members;
therefore, plaintiffs also are not prevailing parties against
it.
It is axiomatic that a plaintiff must be a “prevailing par-
ty” in order to recover attorneys’ fees and costs in a civil
rights suit, the standard for making this threshold deter-
mination being that “plaintiffs may be considered ‘prevail-
ing parties’ for attorneys’ fees purposes if they succeed
on any significant issue in litigation which achieves some
C-40
of the benefits the parties sought in bringing suit.”
Hensley v. Eckerhart, 461 U.S. at 483 (quoting Nadeau
v. Helgemde, 581 F.2d 275, 278-79 (1st Gir 1978)). This
standard has been said by ‘the Supreme Court to be “a
generous formulation.” Jd.
It is well established that the consent decree in this case
is a contract enforceable against all the parties to it. Dun-
away v. Storm, 334 N.E. 2d 825, 829, 30 Ill. App. 3d 880
(5th Dist. 1975); cf. Dotson v. United States Department
of Housing & Urban Development, 731 F.2d 313, 318 (6th
Cir. 1984). This includes the unions; they were defendants
to the suit, they participated in negotiating the decree,
and they signed it. The special transfer provisions require
the unions to modify their procedures and practices with
respect to fallback seniority and while this relief is less
than what plaintiffs initially sued for, it ‘achieves some
of the benefits [they] sought in bringing suit.” It is true
that this case was not the “exceptional success” which
entitle lead counsel to an upward adjustment of their lode-
star fees but the results obtained against the unions were
still significant enough to support the conclusion that
plaintiffs have prevailed against them.
With regard to BRAC’s prior transfer agreement, a read-
ing of it reveals it did not apply to Negro employees hired
by Burlington after August 31, 1971, while members of
the class in this suit include Negro employees hired after
that date; therefore, the consent decree requires BRAC
to change its seniority practices with respect to such em-
ployees. Similarly, while the special transfer provisions
of the consent decree may not affect members of United
Transportation Union directly, they can be used by mem-
bers who began work before 1978 in a non-UTU job. In
such a case, UTU will have to modify its seniority reten-
tion provisions as to those members of the class in this
suit.
Nor is there merit to the position of the unions that
they were merely nominal defendants in this suit, and,
therefore, are in no way responsible for any vortion of
C-41
the fees and expenses which Burlington must pay to lead
counsel. They were active throughout this civil action.
They conducted discovery, objected to discovery requests,
and made a number of motions, including one by BRAC
and UTU with supporting memoranda urging grant of Bur-
lington’s motion to redefine the class, one denied by this
court and described by lead counsel as a critical ruling
in this litigation. While it is true that Burlington was the
principal defendant, the unions were more than just nominal
ones. It is also true that plaintiffs were significantly more
successful in the relief obtained against Burlington; still,
they obtained enough success against the unions to be con-
sidered “prevailing parties” as to them. Accordingly, the
court concludes that the thirteen union defendants should
assume responsibility for a portion of the fees and ex-
penses of this case. The remaining question is what should
be that portion.
The consent decree provides that Burlington is to bear
full responsibility for all fees and expenses related to
litigating issues concerning hiring, discipline, and discharge.
The parties agree that if any allocation is made, the
unions should be responsible only for a portion of the fees
and expenses attributable to seniority-related issues. In
its post-hearing memorandum, Burlington proposes that
the unions pay one-half of the fees and expenses which,
based on lead counsel’s records, are clearly attributable
to seniority-related issues. It contends that this division
would understate the union’s fair share of the fees and
expenses, and that an additional allocation of ten percent
of the sums not clearly attributable to seniority-related
issues should also be paid by the unions. Its reasons for
this additional allocation are three-fold. First, though gen-
erally detailed, not all of lead counsel’s expense and fee
entries provide enovgh information to determine whether
seniority-related issues are involved. Second, some items
have application to many issues; for example, lead counsel
incurred substantial expense for statistical analysis of Bur-
lington’s workforce, and some of that analysis surely re-
lated to seniority issues. Third, there were many activ-
C-42
ities in this litigation, like attendance at status calls, which
concerned the entire case, not only Burlington.
This court, on review of Burlington’s proposal, finds
merit in the suggested allocation. Fifty percent of the fees
and expenses clearly attributable to seniority-related
issues appears to the court to be an accurate, fair, and
equitable allocation. The court also agrees that ten per-
cent of the fees and expenses not clearly attributable to
seniority-related issues should be allocated to the unions.
As is the case in any litigation involving multiple defen-
dants, portions of the time spent by lead counsel, such
as attendance at status calls, is attributable to all issues
in the suit, and some of the expenses borne by plaintiffs’
counsel have application to all defendants.
With respect to the actual allocations, it appears that
one attorney, Bridget Arimond of the Barnhill firm, was
assigned the task of preparing plaintiffs’ case on the
seniority-related issues. Therefore, fifty percent of her fees
should be allocated to the unions. As to the remaining
attorneys with both firms, the record does not clearly dis-
close what portions of their hours were related to the sub-
ject of seniority; for this reason, a straight ten percent
of their fees should be allocated to the unions. A review
of the expenses does not disclose which are clearly attribu-
table to the subject of seniority; therefore, ten percent
of the expenses should be allocated to the unions. Based
on this formulation, the lodestar fees and expenses are
apportioned between Burlington and the unions as follows.
C-43
FEES
Lodestar BN's Unions'
Attorney Fees Share* Share®
Paul C. Sprenger $ 580,005.00 $ 522,004.50 $ 58,000.50
Erie L. Olson 193,040.00 173,736.00 19,304.00
Robert L. Shutes 516,360.00 464,724.00 51,636.00
SO&S Paralegals 143,480.00 129,132.00 14,348.00
Subtotal: $1,432,885.00 $1,289,596.50 $143,288.50
Charles Barnhill $ 496,145.00 $ 446,530.50 $ 49,614.50
Judson S. Miner 16,575.00 14,917.30 1,657.50
George F. Galland 850.00 765.00 85.00
Briget Arimond*® 139,425.00 69,712.50 69,712.50
Nancy J. Anderson 28,687.50 25,818.75 2,868.75
Paul Strauss 6,764.00 6,083.60 676.40
DMB&G Paralegals 62,834.00 56,550.60 6.283.40
Subtotal: $ 751,280.50 $ 620,382.45 $130,898.05
Total: $2,184,165.50 $1,909,978.95 $274,186.55
*Allocated 90% to BN and 10% to the unions, with the exception
of the fees of Briget Arimond.
**Briget Arimond's fees are allocated 50% to BN and 50% to the
unions.
EXPENSES
Actual BN's Union's
Attorney Expenses Share*® Share®
Paul C. Sprenger $ 763,852.95 $ 687,467.65 $ 74,395.20
Charles Barnhill 206,672.15 186,004.94 20,667.21
Total: $ 970,525.10 $ 873,472.59 $ 97,052.51
*Allocated 90% to BN and 10% to the unions.
C-44
IV
For the reasons stated, lead counsel, their partners, as-
sociates, and paralegals, are awarded lodestar fees total-
ing $2,184,165.50 to be paid to them by Burlington. This
court finds this sum is reasonable. Of this total sum, Paul
C. Sprenger shall be paid $1,432,885.00 from which he
shall pay his partners and the paralegals of his firm in
the amounts shown at the end of Part III-A, page [C-17] of
this memorandum, if they have not already been paid.
Charles Barnhill or Judson S. Miner is entitled to receive
$751,280.50, from which sum, his partners, associates, and
the paralegals of his firm shall be paid the amounts shown
at the end of Part III-A, page [C-17] of this memorandum,
if they have not already been paid. In addition, as Bur-
lington has agree, lead counsel are to be reimbursed their
advanced expenses totaling $1,131,929.19: $925,257.04 to
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.