Federal Judge Again Approves Bonus Fees to Civil Rights Lawyers

Law.com - Federal Judge Again Approves Bonus Fees to Civil Rights Lawyers


Despite high court's limits on bonuses to civil rights lawyers, judge says counsel for foster kids deserve one; the question is: 'How much?'
R. Robin McDonald
Fulton County Daily ReportApril 11, 2011

The federal judge in Atlanta, whose bonus award to civil rights attorneys prompted the U.S. Supreme Court last year to place strict limits on such fees, has again found that a child welfare organization and its Atlanta legal partners deserve additional money for their work in reforming Georgia's foster care system.

"The question is," asked U.S. District Senior Judge Marvin H. Shoob on April 1, "'How much?'"

Shoob was presiding over a hearing on a new request for enhanced legal fees by Children's Rights Inc., a New York-based nonprofit organization, and attorneys with Atlanta's Bondurant Mixson & Elmore. Bondurant attorneys worked with Children's Rights during nine years of the foster care litigation that ultimately forced major changes in Georgia's crisis-ridden child foster care system.

It was the first hearing in the case since the Supreme Court last year remanded Shoob's 2006 ruling that attorneys for the class of more than 3,000 foster children -- to whom he had awarded $6.1 million in legal fees and expenses in the now nine-year-old case -- should be paid a $4.5 million fee enhancement.

Shoob determined that the enhanced fees were warranted because of major reforms that were achieved by counsel for foster children. In awarding the fees, he also cited the difficulties their attorneys encountered during the course of the litigation, including what Shoob described as protracted delays by the state.

In settling the litigation in 2005, the state agreed to institute sweeping systemic reforms of a system that had regularly exposed children to physical abuse; held them in dangerous, unsanitary and dilapidated shelters; placed them in the care of criminals; and deprived them of essential medical care.

The state had agreed to pay reasonable legal fees in the case, but had fought all efforts to enhance those fees for any reason. The Supreme Court took the case to consider whether fee enhancements in successful civil rights cases are ever warranted.

In remanding the case to Shoob, the high court refused to eliminate fee enhancements in cases. But it directed that such fees should be levied "due to superior performance but only in extraordinary circumstances."

In the hearing on April 1, Shoob signaled that the foster care litigation is one of those cases.

The lawyers for the class, Jeffrey O. Bramlett and Michael A. Caplan of Bondurant and Children's Rights lawyer Marcia Robinson Lowry petitioned the court for $5.8 million in enhanced fees, about 97 percent of Shoob's original "lodestar" fee award. The lodestar is calculated by the number of hours worked by attorneys and their staffs, multiplied by the prevailing hourly rates for their work.

The enhanced fees include an additional $3 million to "true up" what Bondurant lawyers said was a lodestar hourly rate of $235 that "didn't measure the true market value" of counsel's time in the case. The request also included $1.2 million in "lost opportunity" costs for funds that Bondurant and Children's Rights used to finance the litigation; $1.3 million to offset delays by the state in the payment of attorney fees; and nearly $400,000 to compensate for the state's delays in paying opposing counsel's legal expenses.

The lodestar, which the state withheld payment on for four years while it appealed the enhanced fees, did not take into account "the extraordinary outlay of expenses" by Children's Rights and Bondurant or the "extraordinary" and protracted nature of the litigation, Bramlett said.

Shoob, he said, had justified his original enhanced fee award in 2006 by finding that the results achieved by the class counsel, the difficulties encountered before the case settled and "protracted delay caused by state defendants ... far exceeded what could reasonably be expected for the standard hourly rates."

"We believe the court, on the basis of settled fact-finding, has within its discretion to find an enhancement of the lodestar determination," despite the Supreme Court ruling, Bramlett argued.

Bramlett also asked Shoob to consider what incentives might be required to persuade Georgia lawyers to take some future case in which the state "acts in a way that damages some of its citizens" if he were to deny enhanced fees in this case.

"As a practical matter, what reasonable rate would be sufficient to induce counsel to take the case?" he asked. "To bring a case of this magnitude, it's a very thin market."

Troutman Sanders attorney Mark H. Cohen, who has represented the state in the litigation and successfully argued the case before the U.S. Supreme Court, challenged the enhanced fee request. "Based on the plaintiffs, you would think the Supreme Court blessed the fact that this counsel fit into the 'rare exception,'" he said, adding that the language of the high court's opinion suggested that it did not.

Cohen challenged assertions by his opposing counsel that, without fee enhancements, no competent attorney would take a similar civil rights case against the state. "That's just flat wrong," he said.

"You don't need enhancements to do what you do very well," he said, noting that Children's Rights routinely enlists "some of the best counsel ... around the country" for help with their child welfare class action cases.

"What makes Georgia so different?" he asked. "Was this case so difficult in Georgia? Was it so much more protracted? Was it so much more obstreperous? On behalf of the defendants, I would submit it wasn't."

Cohen pointed to other cases Children's Rights initiated in other states where he said the litigation was more protracted but the nonprofit organization did not ask for enhanced fees and billed lower fees than those they collected in Georgia.

"You don't need enhancements to get Children's Rights, which does this for a living, or to get the Bondurant firm," he argued. Following the Supreme Court's ruling in the Georgia case, he said, Children's Rights filed a new suit in Texas and enlisted three Texas firms to assist them.

Cohen disputed Shoob's earlier finding that the state had engaged in protracted delay tactics before settling the case. "We didn't do anything but represent our client within the bounds of the law," he said. "Now, we're being punished for it."

Cohen also said although attorneys who represent civil rights litigants most likely will not get paid until the end of the litigation, if they get paid at all, that is not grounds for an enhanced fees. "That's not a rare and exceptional circumstance," he said. "That's standard operating procedure."

Cohen challenged assertions that "private law firms would never take cases, would never advance expenses, would never wait for payment. It happens all the time. ... No law firm that agrees to participate with Children's Rights is doing so because they have any expectation of enhancements. ... Private law firms continue to join Children's Rights to do lawsuits just like they did in Georgia with no enhancements."

Cohen contended that the three-and-a-half years that the state took to settle the case -- even though it closed shelters for foster children in Fulton and DeKalb counties within months of when the case was filed -- and the state's decision to withhold paying any legal fees for nearly five years did not mean the litigation was "exceptionally protracted."

"This case resolved itself as fast as any other case Children's Rights has handled," he said. Georgia's taxpayers, he said -- who have now paid $6 million in legal fees, $740,000 in legal expenses, $1.4 million in accumulated interest payments and $1 million to monitors to oversee the state's compliance with the settlement agreement -- "have paid enough."

But Robinson, Children's Rights' executive director, countered that the case warranted enhanced fees.

"It was the most difficult case my organization has litigated," she said. "This was the most contentious case my organization has been involved in to date," and the resulting changes in the state's child welfare system that were codified in the settlement were "extraordinary," she said, and clearly within the Supreme Court's new mandate.

Shoob said he agreed, noting that enhancements were warranted, in part, because "I don't feel they [the state] fully cooperated." The case, he added, "did take a lot of time and money."

The case is Kenny A. v. Perdue, No. 1:02-CV-1686.