Arizona Dream Act Coalition v. Brewer

          ORDER

          DAVID G. CAMPBELL, SENIOR UNITED STATES DISTRICT JUDGE

         Plaintiffs have filed a motion for attorneys' fees and non-taxable expenses. Doc. 336. The motion is fully briefed, and oral argument has not been requested. The Court will grant the motion in part.

         I. Legal Standards.

         A party requesting an award of attorneys' fees and non-taxable expenses must show that it is eligible for an award, entitled to an award, and requesting a reasonable amount. See LR Civ 54.2(c). Plaintiffs request attorneys' fees under 42 U.S.C.A § 1988, which allows “the court, in its discretion, ” to award reasonable attorneys' fees to a prevailing party in federal civil rights cases. “[A] court's discretion to deny fees under § 1988 is very narrow and . . . fee awards should be the rule rather than the exception.” Herrington v. County of Sonoma, 883 F.2d 739, 743 (9th Cir. 1989) (internal quotation marks omitted).

         To determine the reasonableness of attorneys' fees, federal courts generally use the “lodestar” method. See Blanchard v. Bergeron, 489 U.S. 87, 94 (1989); United States v. $186, 416.00 in U.S. Currency, 642 F.3d 753, 755 (9th Cir. 2011). The Court must first determine the initial lodestar figure by taking a reasonable hourly rate and multiplying it by the number of hours reasonably expended on the litigation. Blanchard, 489 U.S. at 94 (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). The Court next “determines whether to modify the lodestar figure, upward or downward, based on factors not subsumed in the lodestar figure.” Kelly v. Wengler, 822 F.3d 1085, 1099 (9th Cir. 2016). “These factors are known as the Kerr factors.” Stetson v. Grissom, 821 F.3d 1157, 1166-67 (9th Cir. 2016) (citing Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975)). Such an adjustment is appropriate “only in rare or exceptional circumstances.” Cunningham v. City of Los Angeles, 879 F.2d 481, 488 (9th Cir. 1988).

         II. Discussion.

         Plaintiffs request $3, 173, 480.10 in attorneys' fees and $89, 174.63 in nontaxable expenses. These amounts include $71, 504.00 in fees and $2, 497.39 in costs for the ACLU-Arizona (“ACLU-AZ”) (Doc. 340 ¶¶ 15-16); $878, 007.50 in fees and $13, 549.78 in costs for the Mexican American Legal Defense and Educational Fund (“MALDEF”) (Doc. 339-8 ¶¶ 15-16); $1, 108, 491.50 in fees and $35, 295.09 in costs for the National Immigration Law Center (“NILC”) (Doc. 339-4 at 2); and $1, 115, 477.10 in fees and $37, 832.37 in costs for the ACLU Immigration Rights Project (“ACLU-IRP”) (Doc. 339-10 ¶ 24). Doc. 339 at 17.^[1]

         Defendants make three arguments for reducing Plaintiffs' attorneys' fees: (1) Plaintiffs fees on appeal are not recoverable, (2) Plaintiffs' fee request is unreasonable, and (3) Plaintiffs' nontaxable expenses are unreasonable.

         A. Plaintiffs' Appeals Fees.

         Defendants argue that 818 hours of work for appeals to the Ninth Circuit and the United States Supreme Court should be excluded from Plaintiffs' fee request because appeals fees must be filed with the Ninth Circuit clerk. Doc. 337 at 2.

         The case law on this topic is somewhat unsettled. In Cummings v. Connell, 402 F.3d 936, 940, 947-48 (9th Cir. 2005), the Ninth Circuit held that attorneys' fees for appeals under § 1988 must be filed in the Ninth Circuit pursuant to Ninth Circuit Rule 39-1.6. The fees may be determined by the District Court only after the Ninth Circuit transfers a fee request under Rule 39-1.8. See id. But in Twentieth Century Fox Film Corp. v. Entertainment Distributing, 429 F.3d 869, 884 (9th Cir. 2005), the Ninth Circuit allowed the district court to award attorneys' fees in a copyright case for all “services that contributed to the ultimate victory in the lawsuit, ” including two petitions for certiorari, despite Rules 39-1.6 and 39.18. Twentieth Century Fox relied on Cabrales v. Los Angeles, 935 F.2d 1050 (9th Cir. 1991), which remanded a case to the district court for an award of all appellate fees under a § 1988 attorneys' fee request. 429 F.3d at 884; see also Cabrales, 935 F.2d at 1053(remanding to district court for attorneys' fees related to the petition for certiorari and for Ninth Circuit appeal to determine that attorneys' fees were owed).

         In both Twentieth Century Fox and Cabrales, the prevailing party filed its initial request for attorneys' fees in the United States Supreme Court, and the Supreme Court referred the parties to the district court for an award. Id. at 1051-52; Twentieth Century Fox, 429 F.3d at 875. Further, in Cabrales, the Ninth Circuit specifically directed the district court to determine the prevailing party's fees on appeal. 935 F.2d at 1053.

         This case is like Cummings, where the parties first sought appellate fees from the district court. 402 F.3d at 947. The Court will follow Cummings and not consider the request for fees on appeal. Plaintiffs' fee request will be reduced by 818 hours, consisting of 9.6 hours for ACLU-AZ, 291.9 hours for ACLU-IRP, 156.5 hours for MALDEF, and 360 hours for NILC. See Doc. 338-8 at 9.

         B. Reasonableness of Plaintiffs' Fees.

         1. Hourly Rates.

         Reasonable hourly rates are determined “by the rate prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation.” Schwarz v. Sec'y of Health & Human Servs., 73 F.3d 895, 908 (9th Cir. 1995) (internal quotation marks omitted); see also Blum v. Stenson, 465 U.S. 886, 895 (1984) (“‘[R]easonable fees' under § 1988 are to be calculated according to the prevailing market rates in the relevant community”). The relevant community is generally the forum in which the district court sits. Prison Legal News v. Schwarzenegger, 608 F.3d 446, 454 (9th Cir. 2010).

         Defendants make four arguments on the reasonableness of Plaintiffs' proposed hourly rates: (1) out-of-forum rates are inappropriate here; (2) raters should not be based solely on current rates; (3) Plaintiffs' claimed rates are unreasonable; and (4) the Court should adopt the 2016 Arizona State Bar survey rates. Doc. 337 at 3-6.

         a. Out-of-Forum Rates.

         Plaintiffs seek to recover out-of-state hourly rates for attorneys from ACLU-IRP, NILC, and MALDEF. Doc. 336 at 15; see also Docs. 336-6 ¶ 24, 336-12 ¶ 68, 336-19 ¶ 31. Defendants argue that Plaintiffs should be limited to Arizona rates because they have not shown that it was necessary to hire out-of-state counsel. Doc. 337 at 3-4.

         Rates outside the relevant community can be used if “local counsel was unavailable, either because they are unwilling or unable to perform or because they lack the degree of experience, expertise, or specialization required to handle properly the case.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008). The prevailing party must demonstrate that local counsel was not available. See Gates v. Deukmejian, 987 F.2d 1392, 1405 (9th Cir. 1992).

         Plaintiffs argue that local counsel lacked the experience, expertise, or specialization to handle the case. Plaintiffs provided a statement from Daniel Pochoda that from “his own experience with other complex impact and constitutional litigation matters, there were not sufficient lawyers or law firms in Arizona with the necessary expertise, capacity, and willingness to take on a case of this magnitude and complexity.” Doc. 336-25 ¶ 6. Mr. Pochoda further stated that ACLU-AZ could not have handled this case alone, as there were only two other lawyers on staff besides Mr. Pochoda. Id. ¶ 5.

         The Court finds that Plaintiffs have submitted persuasive evidence that there was insufficient local counsel with the willingness and requisite “degree of experience, expertise or specialization required to handle properly the case.” Camacho, 523 F.3d at 979 (citing Barjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997)). Mr. Pochoda served as legal director of the ACLU-AZ for years and is familiar with the local legal market and the pool of civil rights attorneys available to handle a case like this. See Puente Ariz. v. Penzone, No. CV-14-01356-PHX-DGC, 2017 WL 4805116, at *2 (D. Ariz. Oct. 25, 2017).

         The Court will, however, cap out-of-state attorneys' fees at $750 per hour. The Court concludes that this cap is reasonable given the fact that rates above this level represent premium billing in large legal markets.

         b. Current Rates.

         Plaintiffs argue that 2018 rates are reasonable for all attorneys because the protracted litigation caused a delay in payment. Doc. 339 at 7. Defendants argues in response that Plaintiffs have presented no evidence that their work on this case precluded them from engaging in other opportunities, and 2018 rates are inappropriate here because the attorneys' rates have changed dramatically since 2012. Doc. 337 at 5.

         The Court may consider a rate adjustment for a complex civil rights action where compensation is received several years after services are rendered. See Missouri v. Jenkins, 491 U.S. 274, 283-84 (1989). The Court may use an interest adjustment or may base the fee award on current rates rather than historic rates. Gates, 987 F.2d at 1406; see also In re Wash. Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291, 1305 (9th Cir. 1994) (“Full compensation requires charging current rates for all work done during the litigation, or by using historical rates enhanced by an interest factor.”). A fee award at current rates is intended to compensate prevailing attorneys for lost income they might have received through missed investment opportunities as well as lost interest.” Id. (citing Jenkins, 491 U.S. at 283 n.6). Where the case has lasted a few years, current rather than historical rates may be an adequate remedy for delayed payment. See Ohio-Sealy Mattress Mfg. Co. v. Sealy Inc., 776 F.2d 646, 663 (7th Cir. 1985); New York State Assoc. for Retarded Children v. Carey, 711 F.2d 1136, 1152 (2d Cir. 2010) (current rate is appropriate for two to three years of litigation).

         Because this case has been in litigation since 2012, awarding an adjustment for delay in payment is appropriate. See Gates, 987 F.2d at 1406 (“[T]he length of the delay in payment is a consideration in deciding whether an award of current rather than historic rates is warranted.”.) Further, Plaintiffs have provided several affidavits supporting their assertion that their organizations had to forgo taking other cases because of this litigation. See Doc. 339 at 8. For example, Linton Joaquin avowed that as general counsel for NILC, he participates in case selection and knows that NILC had to decline other critical civil rights matters “specifically as a result of [their] existing commitments in the instant case.” Doc. 339-1 ¶ 23. Similarly, Julia Gomez of MALDEF and Jennifer Chang Newell of the ACULU-IRP both stated that their organizations declined litigation in relation to their work in this litigation. Docs. 339-8 ¶ 4, 339-10 ¶ 3.

         The Court will award current rates. Plaintiffs' counsel forewent other work that might well have paid them sooner, and, while rates have increased, the increase compensates Plaintiffs' counsel for income they forewent over the last six years. This approach comports with the purpose of § 1988 to encourage lawyers to accept meritorious civil rights cases. Ohio-Sealy Mattress, 776 F.2d at 662.

         c. Defendants' Other Arguments.

         Defendants argue that Plaintiffs' rates are high in comparison to their claimed rates in other cases. For example, Ms. Tumlin of NILC claims an hourly rate of $600, but claimed a rate of $325 as of September 26, 2017. Mr. Danjuma of ACLU-IRP claims an hourly rate of $445 but claimed an hourly rate of $350 for work performed in 2017 and 2018. Doc. 337 at 6. Moreover, Plaintiffs informed Defendants that MALDEF attorney Mr. Viramontes's hourly rate was $640 in May 2018, but now claim it is $700. Doc. 337 at 6.

         Defendants also argue that the Court should use the 2016 State Bar of Arizona survey to determine rates for the attorneys based on their years of experience and, in doing so, ...