Patricia Hatfield, Appellant,
v.
Lawrence Garrett, III, Secretary, Department of the Navy, Agency.

Appeal No. 01892909
Agency No. E 86-12

SUMMARY

The Commission reversed the agency's award of attorney's fees and costs to appellant following a settlement agreement, including a cash award, expunction of appellant's termination from her employment records and payment of reasonable attorney's fees. First, the Commission disagreed with the agency that appellant was entitled to be compensated only for approximately 41% of the time recorded and spent on the instant matter. Rather, it found that the detailed month-by-month summaries provided by appellant's attorneys were adequate documentation of their fee request. Because the law firm chose to use, at various times, the services of a senior partner, four associates of varying experience and three law clerks, the Commission found that a 15% across-the-board reduction of the number of compensable hours, suggested by the firm, was a reasonable exercise of billing judgment herein. Further, the Commission disagreed with the agency that appellant's attorneys were entitled only to hourly rates at an amount commonly charged for EEO work in Puerto Rico rather than at the prevailing Washington, D.C. rates as requested by counsel. Appellant had maintained that she was unable to find an attorney in Puerto Rico with the requisite expertise in EEO matters who was willing to take her case; thus, on referral from the Federally Employed Women's Legal Defense Fund, she contacted her current counsel in D.C. and retained them. The Commission, however, found that counsel did not justify how the risk in appellant's case was not fully reflected in their fee; therefore, they were not entitled to receive a 25% enhancement. Finally, it found that counsel was entitled to all the expenses claimed, inasmuch as they were the type routinely charged by law firms in the area to fee-paying clients.

DECISION

INTRODUCTION

On June 13, 1989, Patricia Hatfield (hereinafter referred to as appellant), by and through her attorneys, timely appealed the Department of the Navy's (hereinafter referred to as the agency) final decision on her attorneys' request for fees and costs. See, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. 2000e et seq. and 29 C.F.R. 1613.233. We accept appellant's appeal pursuant to EEOC Order No. 960, as amended. For the reasons that follow, the agency's final decision is REVERSED.

ISSUE PRESENTED

Whether the agency properly determined the reasonable attorney fees and costs to be awarded in this matter.


CONTENTIONS ON APPEAL

On appeal, appellant's attorneys submitted a lengthy brief in which they contest the final agency decision in its entirety on its merits. In summary, appellant's attorneys argue: (1) that their request for fees was adequately detailed and documented; (2) that the agency's decision not to compensate the law firm for 59% of the time spent on this case is arbitrary and without basis; (3) that the law firm should receive the prevailing market rate for attorneys of their experience in the Washington, D.C. area; (4) that the law firm is entitled to a 25% enhancement of their fees due to the 'partial contingency' nature of this case; and (5) expenses for communication by telephone between appellant's home in the Virgin Islands to her attorneys in Washington, D.C. are fully compensable.

BACKGROUND

On December 26, 1985, appellant was terminated by the agency from her position as an Administrative Officer, VA-12, at the U.S. Naval Station, Roosevelt Roads, Puerto Rico. She had started in the position only three months before. On February 27, 1986, appellant filed a pro se EEO complaint with the agency alleging her termination was the result of sex discrimination. Appellant contends that she was unable to find an attorney in Puerto Rico willing to represent her who had the necessary experience in federal employee discrimination matters to handle her case. Upon referral from the Federally Employed Women's Legal Defense Fund, appellant retained her current attorneys, a Washington, D.C. law firm, in May 1986. Brief in Support Of Appeal Of Agency Attorney's Fee Decision (Appellant's Brief), Ex.1.

The agency accepted appellant's EEO complaint and conducted an investigation. On July 31, 1986, the report of the investigation was issued contending appellant had failed to establish a prima facie case of sex discrimination. The investigative report argued that since appellant's predecessor, who she had been comparing herself to, had been a uniformed Navy enlisted man, he was not a 'similarly situated' male with whom she could be compared. Investigative Report at 2-3. Upon reviewing the investigative report, appellant's attorneys, on October 28, 1986, wrote the agency a long and detailed letter making numerous legal and factual arguments that the report was 'seriously deficient,' outlining the issues which needed to be addressed, and requesting that the investigation be reopened. EEO Complaint File, Ex. E-4. On December 5, 1986, the agency replied with a refusal to reopen the investigation. The agency argued that since appellant had failed to establish a prima facie case, further investigation was not warranted. Id.

On January 16, 1987, the parties held a settlement meeting by telephone conference pursuant to 29 C.F.R. 1613.217. The agency continued to assert that appellant had failed to show a prima facie case of sex discrimination and refused to grant her the relief she requested. The agency did offer to pay $5,000.00 towards appellant's moving expenses back to the Virgin Islands as full settlement of the case. Appellant rejected this offer. EEO Complaint File, Ex. G.

On February 4, 1987, the agency issued its Proposed Disposition repeating its finding that no prima facie case of discrimination had been established. Dissatisfied with this result, appellant requested a hearing before an EEOC Administrative Judge. EEO Complaint File, Exs. G-1 and H. Appellant also made a second request to reopen the investigation, which was subsequently rejected by the agency. EEO Complaint File, Ex. J-1.

The case was originally set for a hearing in February 1988, but due to scheduling conflicts was postponed until later that year. In the meantime, the law firm representing appellant began conducting the fuller investigation the agency had refused to do and to prepare for the hearing. The work at the law firm on appellant's case was performed by a senior partner, four associates and three law clerks. During this period, the agency informed appellant that they were going to move her household goods which were in Navy storage to commercial storage at her expense. After considerable effort (nearly 50 hours of firm time), appellant's attorneys persuaded the agency to ship the property at agency expense to appellant's home in the Virgin Islands.

The law firm also sought through a Freedom of Information Act (FOIA) request to obtain the EEO complaint file in two related cases which involved the same management official as the person responsible for appellant's termination. One of those complaints was settled and the other resulted in a final agency decision finding discrimination. The law firm sought these files to show that this management official had shown a predisposition to discriminate against women. The agency refused to comply with this FOIA request, and denied the subsequent appeal from that decision. The law firm had to conduct their own investigation to compile this critical evidence which they believe led to the agency's agreement to settle this case.

In August 1988, the agency began to seriously negotiate with appellant towards a settlement. As a result of four months of intensive negotiations, on December 21, 1988, a settlement agreement was executed in which the parties agreed to settle the matter on the following terms: a payment of $25,000 in cash to appellant, expungement of the termination from appellant's employment records, and payment of reasonable attorney's fees to be determined later. EEO Complaint File, Ex. M-3.

On January 10, 1989, appellant's attorneys submitted a timely application for attorney fees and expenses. EEO Complaint File, Ex. N. The application included an affidavit, detailed month-by-month summaries describing services performed and time spent, and a verified statement in accordance with the requirements of 29 C.F.R. 1613.271. The application listed and requested compensation for all time spent on this case at the prevailing rates in Washington, D.C. Appellant's attorneys determined the prevailing rates to be charged based upon a fee schedule that was developed in two D.C. federal court statutory fee cases involving agencies of the federal government as defendants. EEO Complaint File, Ex. No. The amount of attorney fees requested was $40,627.17 plus $1,867.35 in expenses. The expenses included $884.25 in appellant's own long distances telephone charges used to pursue her case.

On April 20, 1989, the agency responded to the attorney fee request with a proposal to pay $12,910.00 for attorney fees and $935.00 for expenses. Appellant's Brief, Ex. 2. Appellant counter offered $36,000 for both fees and expenses. The agency ended negotiations at this point, and on June 1, 1989, issued a final agency decision at its initial $12,910.00 for fees and $935.00 for expenses. EEO Complaint File, Ex. Q. It is from this decision that appellant is now appealing.

ANALYSIS AND FINDINGS

By federal regulation, the agency shall award attorney fees for the successful processing of an EEO complaint in accordance with existing case law and regulatory standards. 29 C.F.R. 1613.271(d)(2). The fee awarded is normally determined by multiplying the number of hours reasonably expended by a reasonable hourly rate. Hensley v. Eckerhart, 461 U.S. 424 (1983); Blum v. Stenson, 465 U.S. 886 (1984); 29 C.F.R. 1613.271(d)(2)(i)(A). The attorney requesting the fee award has the burden of proving, by specific evidence, his entitlement to the requested award. Copeland v. Marshall, 641 F.2d 880, 892 (D.C. Cir. 1980). Adjustments, both upward and downward, may be made to the fee as necessary in the 'exceptional 'case. Hensley, 461 U.S. at 434-436.Factors to be considered in adjusting the initial fee are set out in the federal regulations. 29 C.F.R. 1613.271(d)(2)(i)(B). However, many of these factors have been held by the Supreme Court to be usually 'subsumed within the initial calculation of hours reasonably expended at a reasonable hourly rate. 'Hensley, 461 U.S. at 434 n. 9. The burden of justifying any deviation from a fee calculation of reasonable hours times reasonable hourly rate rests on the party proposing the deviation. Copeland, 641 F.2d at 892.

Reasonable Hours Expended

The month-by-month time summaries submitted to the agency by appellant's attorneys attest to the fact that the law firm spent the following number of hours working on the case:

1986 Attorneys: 75.15 Law Clerks: 10.50 1987 Attorneys: 12.25 1988 Attorneys: 83.25 Law Clerks: 138

Total 1986-1988 Hours --------------- 319.15

The agency, in its final decision, found that appellant's attorneys were only entitled to be compensated for approximately 41% of the time recorded and spent on this matter (132.10 hours of attorney and law clerk time out of the 319.15 recorded). First, the agency argues that the month-by-month summaries submitted by the law firm did not adequately document the claim for fees. Second, the agency argues that the time spent on the case by the law firm was excessive for a number of reasons. The agency asserts that the case did not involve any complex legal work or issues, although it does admit that appellant's prima facie case which involved comparing a civilian employee to active military personnel was a novel legal issue. Responses To Appellant's Brief (Agency Brief) at 5-6. The agency also argues that the time spent in 1988 preparing for the week-long scheduled administrative hearing was especially excessive because it should have been apparent to appellant's attorneys that the case would be settled and the hearing would not occur. The agency further asserts that because there were many firm members involved in this case, an excessive amount of time was spent reviewing documents as each individual began working on the case and in conferring with each other. Finally, the agency points out that as of June 30, 1988, appellant's attorneys had estimated their fee for work already performed as totaling approximately $10,000 and yet the actual request made six months later was for four times that amount.

Regarding the documentation of hours expended on this case, the Commission disagrees with the agency and finds that the detailed month-by-month summaries provided by appellant's attorneys are adequate documentation of their fee request. It is uncontroverted that the summaries were prepared from contemporaneous time records which the law firm still maintains, and which it offered to the agency for inspection prior to the issuance of the final agency decision. EEO Complaint File, Ex. P. The time summaries identify the person in the firm performing the work and provide a relatively detailed description of the work performed on the case. Appellant's attorneys assert that in numerous other cases in which the law firm has submitted similar month-by-month summaries in statutory fee requests, the reviewing courts have not ever before objected to this form of documentation of hours. Appellant's Brief at 9 n. 6.

The U.S. Supreme Court has specifically found that an attorney in a fee request 'is not required to record in great detail how each minute of his time was expended. 'Hensley v. Eckerhart, 461 U.S. 424, 437 n. 12 (1983). Rather, 'counsel should identify the general subject matter of his time expenditures.' Id. The summaries submitted by the law firm in this case give adequately detailed information 'as to the hours devoted to various general activities attorneys.' Copeland v. Marshall, 641 F.2d 880, 891 (D.C. 1980). Strengthening our finding that the summaries submitted are adequate is the fact that the law firm maintained their contemporaneous time records as a guarantee that the time spent was accurately recorded, and offered to allow the agency to inspect these records, which the agency chose not to do. Grendel's Den, Inc. v. Larkin, 749 F.2d 945, 952 (1st Cir. 1984). We further note that unlike the case cited to us by the agency, the summaries submitted by appellant's attorneys do give dates, by month and year, when the specific tasks were performed and the amount of time spent on those tasks. Calhoun v. Acme Cleveland Corporation, 801 F.2d 558 (1st Cir. 1986).

Regarding the agency's assertion that the hours recorded on this case were excessive, we note that it does not always follow that the amount of time actually expended is the amount of time reasonably expended. 'Billing judgment' is an important component in fee setting, and hours that would not be properly billed to a private client are also not properly billed to the agency pursuant to a successful EEO claim. Copeland v. Marshall, 641 F.2d at 891.Counsel for the prevailing party should make a 'good faith effort to exclude from a fee request hours that are excessive, redundant or otherwise unnecessary. 'Hensley v. Eckerhart, 461 U.S. at 434.

For the most part, the Commission does not agree with the agency's attempts to second-guess appellant's attorneys and their finding that almost 60% of the hours expended by the law firm was excessive. A thorough review of the record in this matter reveals that counsel provided appellant with high quality, zealous representation which achieved excellent results for appellant and reflected sound legal judgement. City of Riverside v. Rivera, 477 U.S. 561, 572 (1986). In some instances, the actions of the agency directly resulted in many hours of work for the law firm such as the refusal to comply with the FOIA requests regarding the other two successful EEO complainants. The law firm was forced to conduct their own investigation into these two cases which revealed critical information which directly led to the settling of this case. We find it unreasonable for the agency to argue that counsel should not have prepared for the scheduled week-long administrative hearing in the hopes that the case would be settled. The agency now has the advantage of hindsight, and it seems clear that appellant's attorneys were ethically bound to prepare for the hearing as it might well have occurred. The discrepancy between the law firm's estimate to the agency in June 1988 and their final request has been adequately explained by counsel as the law firm spent 240.55 hours on this case after June 30, 1988, which accounts for over 60% of the total hours claimed in this case.

The one area in which we are concerned with the hours submitted is the fact that the law firm chose to use, at various times, the services of a senior partner, four associates of varying experience and three law clerks. This widespread involvement required some excessive expenditure of time as each new firm member familiarized themselves with the facts and issues involved and conferred with each other. Jennings v. Lennox Hill Hospital, 42 F.E.P. 555, 558 (S.D.N.Y. 1986). Appellant's attorneys, however, in their Brief submitted an appeal have addressed this concern by proposing a 15% across-the-board reduction of compensable time to eliminate any redundant or excessive time. Appellant's Brief at 14. We find such an approach to be a far superior solution to our concerns than attempting to examine each hour spent or task performed for redundancy. McKenzie v. Kennickell, 645 F.Supp. 437, 446-451 (D.D.C. 1986). The Commission finds that a 15% across-the-board reduction of the number of compensable hours to be a reasonable exercise of billing judgement in this case.

Reasonable Hourly Rate

The agency's final decision concluded that appellant's attorneys are only entitled to hourly rates at an amount it believes are commonly charged for EEO work in Puerto Rico, rather than at the prevailing Washington, D.C. rates as counsel is requesting. The agency's main argument is that fully qualified attorneys were available to appellant in San Juan, Puerto Rico at a market rate of approximately $125.00 per hour. To support this contention, the agency enclosed with its final decision a copy of the San Juan telephone yellow pages for attorneys in which the agency has highlighted six law firms which the agency claims are experienced federal employment EEO practitioners. EEO Complaint File, Ex. Q. Other than these yellow pages, the agency presented no evidence of how it selected those firms highlighted, whether they do in fact have experience and expertise in EEO matters, whether they would be willing to represent an EEO complainant or what hourly rates they actually charge. The agency also submitted a statement from One of its own attorneys in which he asserts that he was involved in a number of cases in which competent local counsel from Puerto Rico represented EEO complainants.

Appellant asserts that she was unable to find an attorney in Puerto Rico with the requisite expertise in EEO matters who was willing to take her case. Therefore, on a referral from the Federally Employed Women's Legal Defense Fund she contacted her current counsel in Washington, D.C. and retained them. The law firm has an extensive background and expertise in handling employment discrimination cases, especially in the federal sector. Appellant's Brief Ex. C. Appellant's attorneys contacted each of the six law firms highlighted in the San Juan yellow pages by the agency. Four of these law firms responded, and two indicated they would not have represented appellant in this matter, while the other two might have considered representing her but indicated no particular experience in federal employee discrimination matters. The two nonresponses raise an inference that they also would not have been interested in accepting this case. Appellant's Brief, Ex. A. The hourly rates cited by the four firms responding also dispute the agency's characterization of the prevailing rates in San Juan as around $125.00 per hour. The hourly rates quoted ranged from $70.00 to $150.00 for junior associates and $150.00 to $225.00 for senior attorneys and partners. Id.

The Commission finds that, under the facts of this particular case, appellant's attorneys should be compensated at Washington, D.C. rates. While the fee customarily charged in the locality of the case remains a factor to be considered in determining hourly rates, when 'a party does not find counsel readily available in that locality with whatever degree of skill may reasonably be required, it is reasonable that the party go elsewhere to find an attorney, and the court should make the allowance on the basis of the chosen attorney's billing rate. Chrapliwy v. Uniroyal Inc., 670 F.2d 760, 769 (7th Cir. 1982) (emphasis added). See also, Maceira v. Pagan, 698, F.2d 38, 40 (1st Cir. 1983).

In this case, appellant alleges she could not find any attorneys in Puerto Rico experienced in federal EEO matters willing to take her case. Therefore, on a referral from a federal employee women's group, appellant sought out and retained her current counsel, a law firm with extensive experience in federal sector employment discrimination cases. The agency has not shown that appellant's decision to retain out-of-town counsel was unreasonable. Maceira, 698 at 40. Using the agency's own evidence from the telephone book, counsel discovered that none of these attorneys would have been willing to represent appellant or had the requisite expertise to do so. It is clear from the record that this case involved a novel, peculiarly federal, EEO issue regarding the comparison of a civilian employee to active duty military personnel. Appellant clearly benefitted from her counsel's knowledge of Title VII law and experience in dealing with federal agencies in federal sector employment discrimination matters. Counsel did not incur unreasonable expenses in this matter, conducting all proceedings by mail or the telephone.

We further note that the agency never once suggested that appellant should have retained local counsel or voiced an objection to her choice of attorneys during the over two-year period it took to settle this case. The agency negotiated the settlement agreement to pay attorney fees in this matter still not raising the issue of appellant's retention of non-local counsel. It was only after the agency received counsel's fee request and was not happy with it that this self-serving objection was raised. Equity requires that we consider this lack of prior objection by the agency to be another factor supporting our decision that counsel should be compensated at Washington, D.C. rates.

Having decided that appellant's attorneys should receive Washington, D.C. rates, the next issue is how to determine those rates in this case. Evidence of record indicates that appellant's attorneys are a private law firm which has historically charged below-market hourly rates for a particular class of clients, mainly federal employees with a claim of race, sex, age or handicap discrimination. Appellant's Brief, Ex. 1. Appellant was within this class of clients. For the period of 1986-1988, when the firm represented appellant, they charged prevailing market rates to their other clients and charged federal employment discrimination clients below-market hourly rates of $160.00 for very experienced attorneys (more than 20 years), $125.00 for attorneys with 11-20 years of experience, $75.00 for junior attorneys and $30.00 for law clerks. Id. The agency, in its final decision, agreed to pay these below-market hourly rates usually charged by the law firm to federal employment discrimination clients. EEO Complaint File, Ex. Q. However, appellant's attorneys argue that, due to a recent change in case law involving statutory fee cases, they are entitled to receive hourly rates at the market rates prevailing in the D.C. community at the time, and not the far lower rates the law firm historically charged this special class of clients. Appellant's Brief, Ex. 1. The law firm provided the agency with a matrix of D.C. prevailing rates developed in a statutory attorney fees case involving the federal government which was heard in the D.C. federal courts. Id. According to this matrix, the prevailing market hourly rates for attorneys between 1986-1988 was $225.00 to $265.00 for attorneys with over 20 years experience, $190.00 to $220.00 for attorneys with 11-20 years experience, $125.00 for associates with 4-7 years experience, $105.00 for associates with 1-3 years of experience, and $55.00 to $60.00 for law clerks. Id.

The United States Supreme Court has held that a 'reasonable fee' is 'to be calculated according to the prevailing market rates in the relevant community, regardless of whether plaintiff is represented by private or nonprofit counsel. Blum v. Stenson, 465 U.S. 886, 895 (1984). The Blum decision reasoned that congress in authorizing the award of reasonable attorney fees to prevailing civil rights litigants did not intend the calculation of those fees to vary depending upon whether plaintiff was represented by a traditional for-profit attorney or by a non-profit legal services organization. Blum, 465 U.S. at 894.Indeed Blum appears to refute the contention that an attorney's actual billing history is relevant to the calculation of a reasonable fee.

However while Blum settled the question of setting a reasonable fee for a pure, non-profit legal services organization, the privately practicing attorney with public interest motivations who charges certain clients reduced rates created a special problem in statutory fee cases. Do the reduced rates this attorney charges certain 'worthy' clients create a cap for his or her services in statutory fee cases even though the rates are significantly below what a traditional for-profit practitioner would be compensated for the same case?

Recently, in a lengthy en banc decision, the United States Court of Appeals, D.C. Circuit, expressly rejected the view that the reduced profit public interest lawyer would be limited to be compensated for his or her below market 'actual' rates should his or her clients prevail in cases which allow statutory fees. Save Our Cumberland Mountains, Inc. v. Hodel, 857 F.2d 1516 (D.C. Cir. 1988).1 Instead, the Court held, the attorney will be entitled to a fee award based upon the higher, prevailing market rates. Cumberland, 857 F.2d at 1524.While Cumberland was a statutory fee case involving federal environmental statutes, its holding has been expressly applied since to both Title VII and age discrimination cases. American Ass'n of Retired Persons v. EEOC, 873 F.2d 402, 405 (D.C. Cir. 1989); Thompson v. Kennickell, 710 F.Supp. 1, 3 (D.D.C. 1989); Palmer v. Barry, 704 F.Supp. 296, 298 (D.D.C. 1989); Trout v. Ball, 705 F.Supp. 705, 708 (D.D.C. 1989). See also, Missouri v. Jenkins, No. 88-64, slip op. (U.S. June 19, 1989) at 10 (finding that in a school desegregation case which involved attorney's fees, the work of paralegals should be compensated at their market rates rather than their cost to the prevailing attorney).

The Court in Cumberland outlined important policy reasons for their holding. The Court observed that to hold differently would force the 'privately practicing but public interest motivated attorneys' to either refuse to engage in pro bono work by directing those potential clients to the larger, traditional for-profit law firms or to legal aid organizations, if either of those entities was available and willing to undertake the representation. Or, the attorney would quote fictitious but market-based rates, which neither the attorney nor the client had any intention of actually seeing totally collected unless court-awarded fees are ultimately available. Cumberland, 857 at 1520. However, neither of these alternatives is consistent with the policies behind fee shifting statutes or accepted principles of legal ethics. An even more negative impact, the Court found, would result on the client as reduced profit public interest lawyers often acquire particular experience and expertise in specific public interest areas. Without these practitioners, expertise in these areas is likely to be found only in those attorneys who regularly litigate against public interest groups (or in the case of federal sector EEO complaints, those attorneys who regularly represent the agencys). The reduced profit public interest lawyer is also often willing to take on unpopular cases and to carry the costs of protracted cases that is indispensable to the full enforcement of federal law such as the anti-discrimination statutes. Cumberland, 857 F.2d 1521. For all these policy reasons, the Cumberland Court concluded that 'Congress did not intend the private but public-spirited rate-cutting attorney to be penalized for his public spiritedness by being paid on a lower scale than either his higher priced fellow barrister from a more established firm or his salaried neighbor at a legal services clinic. 'Cumberland, 857 F.2d at 1524.

For all the policy reasons enunciated by the Court, this Commission expressly adopts the holding in Cumberland. We further find that the current case on appeal is exactly on point. The law firm representing appellant is a private firm who charge reduced rates to federal employees in race, sex, age or handicap discrimination cases. As a result of this public interest representation, the law firm has developed considerable experience and expertise in the area of federal sector discrimination cases. It is clear from the record that appellant benefitted greatly from this expertise. We therefore conclude that the principles of Cumberland squarely apply to this case, and appellant's attorneys should be compensated at the prevailing D.C. community rates rather than the reduced rates they historically charged for federal sector EEO cases.

Appellant's attorneys have produced credible evidence of the prevailing D.C. rates in the record by providing the agency with a matrix of rates ('Laffey matrix') for the years 1980 through 1989 which were used to settle the Cumberland case with the Government. EEO Complaint File, Ex. N. The agency has made no attempt to produce evidence or even argue that this matrix is incorrect or does not fairly represent the prevailing hourly rates in the D.C. community. Therefore, using the matrix, we find that appellant's attorneys should be compensated for their work on this case by the following hourly rates: the senior partner who had more than 20 years experience shall receive $225.00 per hour; the two experienced attorneys with more than 11 years experience shall receive $190.00 per hour; the associate with 7 years experience shall receive $119.00 per hour; the junior associate with 3 years experience shall receive $105.00 per hour; and the work of the law clerks shall be compensated at a rate of $55.00 per hour.2  The agency shall apply these rates to the hours claimed by appellant's attorneys after those hours have been reduced across-the-board by 15% as explained in the previous section of this decision.

Counsel's Request For A Fee Enhancement

Appellant's attorneys are further requesting that they receive a 25% enhancement over the amount arrived at by multiplying the appropriate number of compensable hours by the reasonable hourly rates because they characterize this as a 'partial contingency' case. The law firm asserts that although appellant was initially liable for all attorney's fees and costs, she was soon unable to pay the fees out of her limited resources. Therefore, the law firm told her to pay what she could and they would seek the balance from any potential fee award. Over the two year period of this case, appellant paid the firm a total of $8000.00. Appellant's Brief at 16-17. The law firm collected no fees from appellant's settlement check of $25,000 from the agency. Id.

Both our regulations and case law hold that enhancement to reasonable attorney's fees based on the risk of contingency is only appropriate in 'exceptional' cases. 29 C.F.R. 1613.27(d)(2)(i)(B); Hensley, 461 U.S. at 434-436; Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 107 S.Ct. 3078, 97 L.Ed.2d 585 (1987). In all but the rarest of circumstances, the risk in a contingency case is 'subsumed with the initial calculation of hours reasonably expended at a reasonable hourly rate. 'Hensley, 461 U.S. at 434 n.9; Delaware Valley, 97 L.Ed.2d at 598.The burden of justifying any enhancement to the reasonable fees rests on the party proposing the deviation. Copeland, 641 F.2d at 892.

The Commission finds that appellant's attorneys have failed to meet their burden to justify any enhancement to their fees. First, we note that this is only a partial contingency fee case, and appellant paid the firm $8000 towards their estimate, made 1 1/2 years into the case (June 1988), that she had thus far incurred $10,000 in compensable fees. Clearly, some of the risk incurred by the firm was eliminated by appellant's apparently faithful payments over the two year period.

More importantly, the primary purpose for granting an enhancement in a contingency fee case is to insure parties will not face substantial difficulties in finding counsel in the relevant market. Delaware Valley, 97 L.Ed.2d at 601-603.In this case, appellant's counsel was willing to take many federal sector discrimination clients at below market rates and has already been compensated for the risk and public interest motivation by being awarded prevailing market hourly rates rather than the firm's historically lower billing rates for these types of cases. The Commission therefore concludes that appellant's attorneys have not justified how any risk in this case was not fully reflected in their fee based upon reasonable billable hours times a reasonable hourly rate.

Expenses

Appellant's attorneys filed a request for $1,867.35 in expenses which included approximately $884.00 in appellant's personal long-distance telephone bills which she incurred communicating with her attorneys. The balances of the expenses incurred by the law firm were for copying, postage, telephone calls and Westlaw computer research. EEO Complaint File, Ex. N. The agency, in its final decision, simply offered to pay about half ($935.00) of the expenses incurred.

While our regulation, 29 C.F.R. 1613.271(c)(2)(i) appears at first reading to limit reimbursement for expenses to the taxable 'costs' specified in 28 U.S.C. 1920 (witness fees, transcript costs and copying costs), in numerous employment discrimination cases, the courts have rejected government agency assertions that expense awards are limited to those costs expressly cited in our regulation. Rather, the award of reasonable out-of-pocket expenses shall include those incurred by the attorney which are normally charged to a fee-paying private client in the normal course of providing representation. Laffey v. Northwest Airlines, 746 F.2d 4, 30 (D.C. Cir. 1984), cert. denied, 472 U.S. 1021 (1985). See also, Save Our Cumberland Mountains v. Hodel, 826 F.2d 43, 54 (D.C. Cir. 1987), reversed on other grounds en banc, 857 F.2d 1516 (D.C. Cir. 1988); Northcross v. Board of Education, 611 F.2d 624, 639-40 (6th Cir. 1979). We, therefore, concur with the case law, and allow all expenses claimed by appellant's attorneys as they are of the sort routinely charged by law firms in the area to fee-paying clients.

Regarding the claim for appellant's own personal long distance telephone calls incurred to communicate with her attorneys, case law also holds that prevailing plaintiffs should clearly be compensated for reasonable expenses incurred in litigating their claims. Laffey, 746 F.2d at 30.We find the long distance telephone charges incurred by appellant were critical to the successful pursuit of her EEO complaint against the agency and should be fully compensated.

CONCLUSION

Based upon a thorough review of the record, and for the foregoing reasons, it is the decision of the Equal Employment Opportunity Commission to reverse the final agency decision in this matter regarding attorney's fees. Pursuant to the findings and conclusions of this decision, the Commission orders the agency to comply with the following order.

ORDER

Accordingly, the agency's decision is hereby REVERSED. The agency shall compute and issue a check to appellant's attorneys in accordance with the findings and conclusions of this decision. In addition, the agency shall also compensate appellant's attorneys for the reasonable time expended in pursuing this appeal. Counsel for appellant shall provide the agency with all necessary documentation of time spent on this appeal within ten (10) days of the date this decision becomes final. The agency shall accomplish this action within thirty (30) days of the date this decision becomes final.

The agency is further ORDERED to submit a report of compliance, as provided below. The report shall include supporting documentation to verify that the action has been implemented.

IMPLEMENTATION OF THE COMMISSION DECISION

This decision will become final within thirty (30) calendar days of the date the agency receives it, unless the agency files a request for reconsideration within the thirty (30)-day period. See 29 C.F.R. 1613.237(b), (c) (1988).

Compliance with the Commission's corrective action is mandatory. The agency shall report completion of the corrective action within thirty (30) calendar days of the date the decision becomes final by writing the compliance Officer, Office of Review and Appeals, Equal Employment Opportunity Commission, P.O. Box 19848, Washington, D.C. 20036. The agency's report must contain supporting documentation, and it must send a copy of all submissions to the appellant.

RIGHT TO REQUEST REOPENING

This decision is final unless a timely request to reopen is filed.

The Commissioners may, in their discretion, reopen and reconsider the decision in this case if you or the agency submits a written request and argument which tend to establish that:

1. New and material evidence is available that was not readily available when the previous decision was issued; or

2. The previous decision involves an erroneous interpretation of law or regulation or misapplication of established policy; or

3. The previous decision is of a precedential nature involving a new or unreviewed policy consideration that may have effects beyond the actual case at hand or is otherwise of such an exceptional nature as to merit the personal attention of the Commissioners.

Requests and supporting arguments MUST be submitted to the Commission and the opposing party within the 30-day time frame for filing a request to reopen. A cross request to reopen, or any argument in opposition to the request to reopen, MUST be submitted to the Commission and the opposing party within 20 days of receipt of the request to reopen. See, 29 C.F.R. 1613.235. All requests and arguments must bear proof of postmark and be submitted to the Director Office of Review and Appeals, Equal Employment Opportunity Commission, P.O. Box 19848, Washington, D.C. 20036. In the absence of a postmark, the request to reopen shall be deemed filed on the date it is received by the Commission.

RIGHT TO FILE A CIVIL ACTION

You have the right to file a civil action in an appropriate United States District Court WITHIN THIRTY (30) DAYS of the date that you receive this decision, unless within that time you decide to file a request to reopen. As to any claim based on the Age Discrimination in Employment Act of 1967 (29 U.S.C. 633a), you MAY have up to six years after the right of action first accrued. See Lehman v. Nakshian, 453 U.S. 156 (1981); 29 U.S.C. 633a(f); and 28 U.S.C. 2401(a). If you file a civil action, YOU MUST NAME THE PERSON WHO IS THE OFFICIAL AGENCY HEAD OR DEPARTMENT HEAD AS THE DEFENDANT. Agency or department means the national organization, and not the local office, facility or department in which you might work. DO NOT NAME JUST THE AGENCY OR DEPARTMENT. You must also state the official title of the agency head or department head. Failure to provide the NAME OR OFFICIAL TITLE of the agency head or department head may result in the dismissal of your case.

RIGHT TO COUNSEL

If you decide to file a civil action and do not have or cannot afford the services of an attorney, under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq., as amended, and the Rehabilitation Act of 1973, 29 U.S.C. 791 and 794c, as amended, you may request that the Court appoint an attorney to represent you and that the court permit you to file the civil action without payment of fees, costs or security. Your request must be FILED WITH THE COURT WITHIN THIRTY (30) DAYS from the date that you receive the Commission's decision.

FOR THE COMMISSION:

Dolores L. Rozzi
Director
Office of Federal Operations

December 12, 1989

1. The Government did not seek certiorari to the United States Supreme Court in this case.

2. The U.S. Supreme Court has settled the issue that law clerks may be compensated at the market-rates for their services, rather than at their cost to the attorneys. Missouri v. Jenkins, No, 88-64, slip op. (U.S. June 19, 1989).