ELR Citation: ELR 20024
No(s). 85-5984 (D.C. Cir. Aug 7, 1987)

The court holds that the district court's award of attorney fees in a citizen suit under §520 of the Surface Mining Control and Reclamation Act (SMCRA) was proper as to the number of billable hours and the award of nontaxable litigation expenses, but the district court abused its discretion in setting the hourly rates and in applying multipliers for exceptional results and risk of nonpayment. The court first holds that the district court abused its discretion in setting hourly rates for two attorneys above their customary billing rates. Although a large proportion of one attorney's fees were paid under contingency arrangements, the average hourly rate he charged in other cases is still the best indicator of his reasonable hourly rate. The court holds that the other attorney is entitled only to the maximum rate he charges his clients, even though he varies his hourly rate with the client's ability to pay. The court holds that the court erred in awarding fees to two other attorneys, paralegals, and law clerks based on current rates, since the United States has not waived its sovereign immunity to interest payments for delay in payment of attorney fees.

The court holds that the district court properly awarded fees for time spent on plaintiffs' claim that the Secretary of the Interior's 1981 withdrawal of the two-acre rule without opportunity for notice and comment was illegal under the Administrative Procedure Act, since the suit was a catalyst for the issuance of the new rule. The court holds that time spent on a rehearing petition is compensable. Although a parallel case brought by two of the plaintiffs also sought rehearing on the same issue, the cases were never consolidated and separate rehearing petitions were filed.

The court holds that the district court erred in applying a 50 percent multiplier for exceptional results to the hours plaintiffs' counsel spent preparing the petition for rehearing. The granting of a rehearing petition, although rare, does not necessarily imply that counsel's representation was exceptional. Even if the rehearing was granted due to counsel's exceptional work, the district court did not explain why the quality of representation was not fully reflected in the lodestar. The court holds that the district court also erred in applying a 10 percent multiplier for the risk of nonpayment for all time spent prior to settlement. The Supreme Court has recently held that multipliers cannot be awarded for risk of nonpayment in individual cases. The court holds that plaintiffs are entitled to an award of their incidental litigation expenses even though these expenses are not specifically taxable under SMCRA §520(d).

A concurring judge agrees that the court is bound by a prior decision even though that decision goes contrary to Congress' intent by establishing one fee calculation system for legal aid attorneys and high-priced firms that bill by the hour and another system for plaintiffs' attorneys who accept contingency arrangements and bill based on clients' ability to pay.

Another judge dissents from the court's holding that if an attorney has ever billed any client by the hour, then the highest rate he has charged maybe used as the measure of the attorney's statutory fee, regardless of whether it accurately reflects the prevailing community market rate for the lawyer's services. The court's holding is inconsistent with the Supreme Court's mandate that statutory fees not vary depending on the clients a lawyer serves.

[A decision on the merits in this litigation is published at 14 ELR 20199.]

Counsel for Appellants
John Alan Bryson
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2740

Counsel for Appellees
Joseph A. Yablonski, L. Thomas Galloway
Center for Law & Social Policy
1751 N St. NW, Washington DC 20036
(202) 872-0670

Before: WALD, Chief Judge, GINSBURG, and BORK, Circuit Judges.