Slashed Fees for Lawyers Was Arbitrary, 9th Says

     PASADENA, Calif. (CN) - Civil rights lawyers who challenged abuses from the now-dismantled Maywood Police Department deserve more fees, the 9th Circuit ruled Monday.
     Multiple residents of Maywood, Calif., had claimed in 2008 that police there engaged in racial profiling and extorted people for sex, kickbacks and bribes, while the city allegedly ran an unlawful towing scheme.
     With eight cases against Maywood consolidated for trial, the parties reached a settlement that required the city to pay roughly $1.5 million. Just $500,000 of that amount was meant for the residents, however, with the remainder covering attorneys' fees.
     U.S. District Judge Otis Wright ultimately slashed the attorneys' fees figure to just $473,138.24.
     In addition to noting his dismay that lawyers had asked for almost double the amount of the recovery, Wright condemned counsel for "impossible and ridiculous" billing.
     One paralegal had billed for 60 hours in one day, more "than are humanly possible," the August 2011 decision stated.
     After hearing an appeal of that order, the 9th Circuit suggested Monday that Wright had let the gap between the fees and recovery figure cloud his judgment.
     It had been arbitrary for Wright to apply across-the-board cuts to the "lodestar" - an amount reached by multiplying hours spent by a reasonable hourly billing rate, the court found.
     Wright was required to explain a reduction greater than a 10 percent "haircut," but "failed to justify" or explain the percentages he settled on, the 27-page opinion states.
     On remand, the court must calculate fees "based on a reasonable number of hours."
     "If the District Court concludes that making one or more across-the-board cuts is the most practicable way to arrive at this figure, then it must provide a clear and concise explanation to justify the specific percentage cuts it decides to apply," Judge Randy Smith wrote for a three-person panel.
     Lawyers' fees must also be calculated using prevailing market rates, the panel found.
     Judge Wright instead "simply split the difference between hourly rates proposed by both sides for plaintiffs' most-experienced attorney, and then extrapolated that result to all of plaintiffs' attorneys, disregarding the varied levels of skill, experience, and reputation among them," Smith wrote.
     At a 2011 hearing, Judge Wright called the fees request "offensive on its face," and said "it literally shocks the conscience."
     The appellate panel, though, declined to mirror the federal judge's outrage. It is "not per se unreasonable for attorneys," especially in civil rights cases, to seek fees that diminish a client's settlement, Smith said.
     "Here, the eight cases against the city at issue in this appeal appear to be the type of civil rights cases that confer such non-monetary benefits, possibly justifying a higher fee award," he added. "The filing and prosecution of these lawsuits, all of which alleged misconduct by city police officers, may have contributed to the city's loss of insurance coverage, and subsequent decision to shut down its beleaguered police department."
     The appeals court denied a request to reassign the case to a different judge.
     Judges Ronald Gould and U.S. District Judge Sharon Gleason, sitting on designation from Alaska, joined Smith's opinion.