MARILYN E. COOLEY, APPELLANT,
v.
TOGO D. WEST, JR., ACTING SECRETARY, DEPARTMENT OF VETERANS AFFAIRS, AGENCY.

Request No. 05960748
Appeal No. 01950608
Agency No. 941355

GRANTING OF RECONSIDERATION

INTRODUCTION

On July 29, 1996, Marilyn E. Cooley (hereinafter referred to as the appellant) timely initiated a request to the Equal Employment Opportunity Commission (the Commission) to reconsider the decision in Cooley v. Dep't of Veterans Affairs, EEOC Appeal No. 01950608 (June 24, 1996). EEOC regulations provide that the Commissioners may, in their discretion, reconsider any previous Commission decision. 29 C.F.R. §1614.407(a). The party requesting reconsideration must submit written argument or evidence which tends to establish one or more of the following three criteria: new and material evidence is available that was not readily available when the previous decision was issued, 29 C.F.R. § 1614.407(c) (1); the previous decision involved an erroneous interpretation of law or regulation, or material fact, or a misapplication of established policy, 29 C.F.R. §1614.407(c) (2); and the decision is of such exceptional nature as to have substantial precedential implications, 29 C.F.R. §1614.407(c) (3). For the reasons set forth herein, the appellant's request is granted.

ISSUE PRESENTED

The issue presented is whether the previous decision determined the reasonable amount of attorney's fees and costs to be awarded in this case.

BACKGROUND

Appellant filed an EEO complaint alleging unlawful discrimination when she received a less favorable work assignment. Appellant was represented by an attorney and, in relevant part, the fee agreement between the two contained the following provisions:

2. The fees will be handled on a reduced hourly rate/contingency as follows:

a. Attorney has agreed to reduce his customary hourly rate to $150.00 per hour. Attorney presently charges $250.00 per hour for services regarding Federal employment and related matters. The Client agrees to pay Attorney at the rate of $150.00 per hour [for services regarding her EEO complaint].

b. If attorney's fees, payable to Client or his Attorney, are awarded, or are agreed upon as part of a settlement agreement, the application for fees will be made at the $250.00 per hour rate normally billed by Attorney in these matters as adjusted for passage of time or as reasonably modified by other factors. The Client will be reimbursed out of such award or settlement for amounts actually tendered to Attorney.

In June 1994, the parties entered into an agreement in settlement of appellant's complaint. The settlement agreement did not address the issue of attorney's fees. On July 24, 1994, the attorney submitted to the agency a petition for an award of attorney's fees in the amount of $2,600.00 ($250.00 hourly rate X 10.40 billable hours).

In an affidavit submitted with the fee petition, the attorney stated that:

11. I agreed to take Complainant's case on the basis of a reduced hourly [rate]/contingency basis. This is often the case with employees who are forced to retroactively seek relief regarding an Agency action affecting their employment rights. In addition, I have not required Complainant to pay the entire amount owing on her account at this time because of the financial hardship this would have caused.

In March 1995, the agency issued a final decision (FAD) on the attorney's fee petition. The agency found that the number of hours claimed, i.e., 10.40, was reasonable. The agency, however, concluded that the hourly rate should be $150.00. In this regard, the agency noted that the attorney had agreed to charge appellant a discounted rate of $150.00 per hour rather than the customary rate of $250.00 for Federal employment cases. The agency stated that "[i]n view of this agreement, and since the agreement indicates that the he normally charges Federal sector clients his customary rate (i.e., he does not normally take Federal sector cases for public interest motives)," the compensable hourly rate was the agreed upon rate of $150.00. The agency awarded attorney's fees in the amount of $1,560.00 ($150.00 X 10.40 billable hours). Appellant's attorney appealed from the FAD.

Upon review, the previous decision affirmed the FAD. The previous decision defined the issue as whether the fee agreement between appellant and the attorney properly was classified as a fixed fee or a contingent fee agreement. Nothing that an attorney may not recover an amount greater than the appellant was contractually bound to pay, the previous decision found that the fee agreement was "fixed" and that the agency properly determined the compensable was "fixed" and that the agency properly determined the compensable hourly rate to be $150.00.

In his request for reconsideration, appellant's attorney contends that the previous decision erred in determining that the fee agreement with appellant was a fixed fee agreement rather than a reduced fee/contingency agreement.

The agency opposes the request for reconsideration.

ANALYSIS AND FINDINGS

The Commission may, in its discretion, reconsider any previous decision when the party requesting reconsideration submits written argument or evidence which tends to establish that at least one of the criteria of 29 C.F.R. §1614.407(c) is met. For a decision to be reconsidered, the request must contain specific information that meets the criteria referenced above.

Appellant's attorney contends that both the fee agreement and his affidavit specifically aver that the rate charged was a reduced rate because of appellant's financial condition. He argues that it often is the case that Federal employees cannot afford to pay the "going commercial rate" for representation before the EEOC and other Federal agencies, and that is why he provides representation at a reduced rate. The attorney asserts that the previous decision's "narrow" concern with the existence of a traditional contingency fee arrangement was misplaced. He explains that a traditional contingency fee arrangement (percentage) rarely would be justified because of the lack of significant monetary relief available. Instead, a lowered hourly rate with the possibility of payment at the customary rate provides a practical means of taking most Federal sector discrimination cases. The attorney avers that he should not be foreclosed from his customary compensation because he took a case at a reduced rate based on the client's financial condition.

The agency argues that the fee agreement specified that the attorney normally charges Federal sector clients his customary rate, indicating that he does not normally take Federal sector cases for public interest motives. The agency also contends that the evidence is insufficient to establish that appellant was charged a lower hourly rate based on her financial inability to pay a higher rate.

In general, reasonable hourly rates are measured by the "prevailing market rates in the relevant community." Blum v. Stenson, 465 U.S. 886, 895 (1984). The applicable rate for fee awards to public interest attorneys is the prevailing hourly rate for the community in general. Hodge v. Dep't of Transportation, EEOC Request No. 05920057 (April 23, 1992). For private attorneys, the best evidence of a reasonable hourly rate is the hourly rate customarily charged by the attorney or law firm for fee paying clients. Nat'l Assoc. of Concerned Veterans v. Sect'y of Defense, 675 F.2d 1319, 1325 (D.C. Cir. 1982). In Save Our Cumberland Mountains, Inc. v. Hodel, 857 F. 2d 1516 (D.C. Cir. 1988), the court held that the prevailing market rate should also be used to determine fee awards to private, for-profit attorneys who represent certain clients at reduced rates, which reflect "non-economic" goals.

Appellant's attorney- -who is a for-profit attorney- -has offered evidence establishing that his customary hourly rate for 1994 was $250.00 and that the prevailing market rate for 1994 was at least $250.00 an hour for an attorney with his background and experience.1 Further, the attorney has offered an adequate reason why, in determining his hourly rate, the agency erred in relying on the hourly rate set forth in the fee agreement. The attorney explained that the billing rate agreed to between him and appellant was a reduced rate based on appellant's ability to pay, i.e., her financial situation, and that he has accepted other cases at a reduced rate for similar reasons. Thus, notwithstanding the agency's arguments to the contrary, the Commission finds that the attorney demonstrates the "public spiritedness" recognized in the Cumberland decision, and which was found worthy of compensation at the prevailing market rate.

Based on the foregoing, the Commission finds that the agency should have used the prevailing market rate- - rather than the reduced hourly rate in the fee agreement - - in determining reasonable attorney's fees in this case. The Commission finds that the attorney is entitled to reasonable attorney's fees in the amount of $2,600.00 ($250.00 x 10.40 billable hours), less any amount he already has received from the agency.

Finally, the Commission acknowledges that appellant's attorney requests payment for an additional 1.3 hours in 1994 ($250.00 hourly rate) and an additional 13.95 hours in 1996 ($295.00 hourly rate) spent in preparing the prior appeal and the instant request for reconsideration. The attorney is advised that he first must submit this request for additional fees to the agency pursuant to 29 C.F.R. §1614.501(e) (2).

CONCLUSION

After a review of the appellant's request for reconsideration, the agency's response, and the entire record, the Commission finds that appellant's request for reconsideration meets the criteria of 29 C.F.R. §1614.407(c), and the request hereby is GRANTED. The decision in EEOC Appeal No. 01950608 hereby is REVERSED.

ORDER

The agency is ORDERED to take the following remedial action:

1) The agency shall award attorney's fees in the amount of $2600.00, less any amount he already has received from the agency.

2) Inasmuch as the attorney made a further request to the Commission for payment for additional hours (1.3 hours @ $250.00 per hour and 13.95 hours @ $295.00 per hour) incurred subsequent to the July 24, 1994 fee petition, in connection with the prior appeal and the instant reconsideration request, we REMAND this request to the agency pursuant to 29 C.F.R. §1614.501(e). The agency shall request additional information from the attorney, if necessary, to enable it to make a fully informed decision on this additional request for attorney's fees. Both the agency and the attorney shall make all possible efforts to agree upon reasonable attorney's fees.

The agency is further directed to submit a report of compliance as provided in the section entitled "Implementation of Commission's Decision." The report shall include supporting documentation verifying that the corrective action has been implemented.

IMPLEMENTATION OF THE COMMISSION'S DECISION (K0595)

Compliance with the Commission's corrective action is mandatory. The agency shall submit its compliance report within thirty (30) calendar days of the completion of all ordered corrective action. The report shall be submitted to the Compliance Officer, Office of Federal Operations, Equal Employment Opportunity Commission, P.O. Box 19848, Washington, D.C. 20036. The agency's report must contain supporting documentation, and the agency must send a copy of all submissions to the appellant. If the agency does not comply with the Commission's order, the appellant may petition the Commission for enforcement of the order. 29 C.F.R. §1614.503 (a). The appellant also has the right to file a civil action to enforce compliance with the Commission's order prior to or following an administrative petition for enforcement. See 29 C.F.R. §§ 1614.408, 1614.409, and 1614.503 (g). Alternatively, the appellant has the right to file a civil action on the underlying complaint in accordance with the paragraph below entitled "Right to File A Civil Action."29 C.F.R. §§ 1614.408 and 1614.409. A civil action for enforcement or a civil action on the underlying complaint is subject to the deadline stated in 42 U.S.C. §2000e-16(c) (Supp. V 1993). If the appellant files a civil action, the administrative processing of the complaint, including any petition for enforcement, will be terminated. See 29 C.F.R. §1614.410.

ATTORNEY'S FEES (H1092)

If appellant has been represented by an attorney (as defined by 29 C.F.R. § 1614.501 (e) (1) (iii)), he/she is entitled to an award of reasonable attorney's fees incurred in the processing of the complaint. 29 C.F.R. § 1614.501 (e). The award of attorney's fees shall be paid by the agency. The attorney shall submit a verified statement of fees to the agency - - not to the Equal Employment Opportunity Commission, Office of Federal Operations -- within thirty (30) calendar days of this decision becoming final. The agency shall then process the claim for attorney's fees in accordance with 29 C.F.R. § 1614.501.

RIGHT TO FILE A CIVIL ACTION (R0993)

This is a decision requiring the agency to continue its administrative processing of your complaint. However, if you wish to file a civil action, you have the right to file such action in an appropriate United States District Court. It is the position of the Commission that you have the right to file a civil action in an appropriate United States District Court WITHIN NINETY (90) CALENDAR DAYS from the date that you receive this decision. You should be aware, however, that courts in some jurisdictions have interpreted the Civil Rights Act of 1991 in a manner suggesting that a civil action must be filed WITHIN THIRTY (30) CALENDAR DAYS from the date that you receive this decision. To ensure that your civil action is considered timely, you are advised to file it WITHIN THIRTY (30) CALENDAR DAYS from the date that you receive this decision or to consult an attorney concerning the applicable time period in the jurisdiction in which your action would be filed. In the alternative, you may file a civil action AFTER ONE HUNDRED AND EIGHTY (180) CALENDAR DAYS of the date you filed your complaint with the agency, or filed your appeal with the Commission. If you file a civil action, YOU MUST NAME AS THE DEFENDANT IN THE COMPLAINT THE PERSON WHO IS THE OFFICIAL AGENCY HEAD OR DEPARTMENT HEAD, IDENTIFYING THAT PERSON BY HIS OR HER FULL NAME AND OFFICIAL TITLE. Failure to do so may result in the dismissal of your case in court. "Agency" or "department" means the national organization, and not the local office, facility or department in which you work. Filing a civil action will terminate the administrative processing of your complaint.

RIGHT TO REQUEST COUNSEL (Z1092)

If you decide to file a civil action, and if you do not have or cannot afford the services of an attorney, you may request that the Court appoint an attorney to represent you and that the Court permit you to file the action without payment of fees, costs, or other security. See Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e etseq.; the Rehabilitation Act of 1973, as amended, 29 U.S.C. §§791, 794(c).The grant or denial of the request is within the sole discretion of the Court. Filing a request for an attorney does not extend your time in which to file a civil action. Both the request and the civil action must be filed within the time limits as stated in the paragraph above ("Right to File A Civil Action").

FOR THE COMMISSION:

Frances M. Hart
Executive Officer
Executive Secretariat

July 30, 1998

1. Specifically, the attorney provided an affidavit with the following information: 1) his experience in labor law and Federal employment law; 2) his hourly rates for 1991-94 ($185.00 for 1991; $210.00 for 1992; $225.00 for 1993; $250.00 for 1994); and, 3) a list of fee awards in cases in his geographic area before the Merit Systems Protection Board (MSPB) and the Commission for 1992 ($210.00 an hour) and 1993 ($225.00 an hour). In addition, the attorney provided a copy of Johnson v. Dep't of the Army, EEOC Appeal No. 01933776 (June 2, 1994), in which he was awarded attorney's fees based on an hourly rate of $225.00 an hour for 1993 work. Finally, the attorney provided copies of MSPB decisions awarding attorney's fees that show hourly rates for 2 attorneys in appellant's geographic area of $240.00 for 1992 and $225.00 for 1991, respectively.