ELR Citation: ELR 21419
No(s). 85-5984 (D.C. Cir. Sep 16, 1988)

The court, sitting en banc, reverses an earlier panel decision, 18 ELR 20024, and rules that where a public interest law firm that customarily charges below market rate is awarded attorney fees pursuant to a fee-shifting citizen suit provision, the lodestar should be calculated according to the prevailing community rate for similar legal services. Supreme Court precedent establishes that the proper standard for salaried legal services attorneys is the prevailing market rate, but offers no guidance about the appropriate standard for private law firms that adjust fees downward because of public interest motives. The D.C. Circuit had earlier ruled that prevailing market rates should only be used where, as in the case of salaried legal services attorneys, counsel has no billing history from which to figure the lodestar. The panel opinion in the instant case applied this rule and held that the private attorneys' award in this case should be based on their customary billing rate. This approach produces the anomalous result of rewarding attorneys who usually charge higher fees or who never charge for their services at all, while providing only limited compensation to attorneys whose practices are comprised mostly of public interest work at reduced rates. Moreover, this approach may lead to the concentration of specialized expertise in firms that customarily charge higher fees and most often represent commercial interests.

In addition, use of the prevailing market rate furthers the intent of Congress by making competent counsel available to all parties. Although Congress wished to avoid providing windfalls to attorneys, no windfalls should result from paying attorneys at rates commensurate with the prevailing community standards. Furthermore, attorney fees cases cited approvingly by Congress are not inconsistent with use of the community market rate. Calculation of the market rate cannot be prohibitively difficult, since it is clearly required for awards to salaried legal services attorneys under existing Supreme Court precedent. Finally, the court holds that the attorney fees in this case must be based on reasonable hourly rates at the time the services were rendered.

The dissent would retain the use of customary billing rates to determine awards for private law firms that routinely charge below market rate. The customary billing rate approach accords with Congress' intent to ensure access to competent representation, but not to maximize the range of private-party choice. Even when using the customary billing rate approach, courts are not compelled to look solely to past billing practices where counsel's rates are aberrationally high or low. Any anomalies produced by reference to an attorney's billing practices only mirror those resulting in the marketplace, and judicial interference with the market may produce the windfalls that Congress wishes to avoid. In addition, reliance on customary billing practices offers a clear and workable means of calculating fee awards.

[The earlier panel decision is published at 18 ELR 20024. The court's decision on the merits is published at 14 ELR 20199.]

Counsel are listed at 18 ELR 20024.

Before WALD, Chief Judge, ROBINSON, MIKVA, EDWARDS, RUTH B. GINSBURG, STARR, SILBERMAN, BUCKLEY, WILLIAMS, D.H. GINSBURG, and SENTELLE, Circuit Judges.