On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civ. No. 72-2272.
Before SEITZ HUNTER, BECKER, Circuit Judges
These appeals require us to review a comprehensive award of counsel fees under 42 U.S.C. § 1988 (1982) against the Commonwealth of Pennsylvania in a protracted civil rights case dealing with procedures for admitting mentally ill and mentally retarded juveniles to mental health facilities. Both sides appeal virtually all aspects of the fee award. The appeal and cross-appeal present numerous questions, spanning the burgeoning jurisprudence of counsel fees. The appeals present particularly difficult questions concerning prevailing party status and the use of both negative and enhancement multipliers.
For the reasons that follow, we shall vacate the district court's judgment and remand the case to the district court for further proceedings consistent with this opinion.
1. THE UNDERLYING LITIGATION
Because these appeals present challenges to a fee award that are directly related to the history of the litigation, particularly in terms of the extent to which the plaintiffs are prevailing parties, we must trace in detail the course of the underlying litigation and the results it allegedly achieved.
A. Plaintiffs Original Complaint
On November 16, 1972, six named plaintiffs filed a class action suit on behalf of all persons 18 years of age or under who have been, are, or may be committed to mental health facilities in Pennsylvania under section 402 and 403 of the Pennsylvania Mental Health and Mental Retardation Act of 1966 ("1966 Act") (codified at Pa. Stat. Ann. tit. 50, §§ 4402 & 4403 (Purdon 1969)).*fn1
The original action, Bartley v. Kremens, 402 F. Supp. 1039, was brought against the Director of Haverford State Hospital, the Secretary of Public Welfare of the Commonwealth, and the Deputy Secretary for Mental Health and Mental Retardation of the Department of Public Welfare. Plaintiffs challenged the portion of the 1966 Act concerning "voluntary" admissions and commitments of mentally ill and retarded juveniles to mental health facilities.*fn2 Plaintiffs alleged that those provisions, which enabled a parent or guardian to admit or commit a juvenile to care without the juvenile's approval if a medical examination indicated a need for care or observation, violated the due process clause and equal protection clause of the fourteenth amendment to the United States Constitution.
Plaintiffs alleged that they had a constitutional right to a full panoply of procedural safeguards prior to any admission or commitment to a state mental health facility. The rights asserted were: (a) the right to notice: (b) the right to a pre-admission hearing: (c) the right to counsel (including appointment of counsel for indigent juveniles): (d) the right to present evidence and testimony: (e) the right to subpoena witnesses and documents; (f) the right to confront and cross-examine witnesses against them and those favoring commitment: (g) the right to independent expert examination and assistance: (h) the right to involuntary commitment only after the decision of an impartial decision-maker: (i) the right to involuntary commitment only when clear and convincing evidence indicates that there is a need for care or observation: and (j) the right to appellate review, including appointment of counsel and a free hearing transcript if indigent. It is important to recognize as a general matter that the relief sought by plaintiffs related only to the procedures for admitting an individual to a mental health facility. The requested relief did not suggest in any way that the plaintiffs were challenging the quality of care provided to juveniles once they were admitted to facilities. The scope of relief sought by plaintiffs is critical when assessing plaintiffs, status as prevailing parties. See infra part III.A.1.
A three-judge court was convened to hear the case pursuant to 28 U.S.C. § 2281,*fn3 and the case was listed for trial.
Before the case reached trial, the Secretary of Public Welfare promulgated regulations, which became effective September 1, 1973, implementing the 1966 Act. See 3 Pa. Admin. bull. 1840 (1973) ("1973 Regulations").*fn4
The regulations conferred limited procedural rights upon all juveniles. They required a referral from a pediatrician, general physician, or psychologist that included a specific psychiatric evaluation indicating why institutional care was warranted. Following admission of an individual, the regulations called for an independent examination at the direction of the institution's director and for discharge of the patient if the findings indicated that institutionalization was not necessary. Juveniles 13 and older were to be given notification of their legal rights, the telephone number of either the local public defender or legal services organization, and the ability to object to their continued institutionalization.
The sum, the 1973 Regulations provided generally that parents could not unilaterally admit a juvenile to a mental health facility. Admission would follow only after evaluation by a health care practitioner that was subject to full review by the director of the institution. Plaintiffs, however, continued to contend that the procedures, even as substantially modified by the regulations, did not comport with due process requirements.
C. Three-Judge Court Decision
After a three-day trial in September and October, 1974, the three-judge court, with one judge dissenting, granted plaintiffs much of the relief sought. Bartley v. Kremens, 402 F. Supp. 1039 (E.D. Pa.1975). The court declared unconstitutional sections 402 and 403 of the 1966 Act and enjoined the Secretary from enforcing them. The court based this conclusion upon a finding that plaintiffs were entitled to the following procedural safeguards: (a) a probable cause hearing within 72 hours of an individual's initial commitment; (b) a post-commitment hearing within two weeks of the initial commitment; (c) notice of the hearing and the grounds for any proposed commitment; (d) counsel at all "significant stages of the commitment process: and free counsel if indigent; (e) the right to be present at the commitment hearing; (f) the right to be committed only after a finding of clear and convincing proof of its need; and (g) the right to offer evidence and witnesses in his or her behalf and the confront and cross-examine adverse witnesses. Id. at 1053-54.
Defendants appealed this decision and the Supreme Court noted probable jurisdiction on March 22, 1976. Kremens v. Bartley, 424 U.S. 964, 47 L. Ed. 2d 731, 96 S. Ct. 1457 (1976).
D. The 1976 Act and Regulations
On July 9, 1976, before the Supreme Court heard oral argument in Kremens, the Commonwealth enacted the Mental health Procedures Act ("1976 Act"), Pa. Stat. Ann. tit. 50, §§ 7101-7503 (Purdon Supp. 1984). The 1976 Act specifically repealed the 1966 Act with respect to all persons except those who are mentally retarded. See id. § 7502. The 1966 Act continued in force for all mentally retarded persons.*fn5 The Commonwealth thus created two statutory schemes: one for mentally retarded persons (the 1966 Act and 1973 Regulations) and one for mentally ill persons (the 1976 Act).
Article II of the 1976 Act Pa. Stat. Ann. tit. 50, §§ 7201-7207 (Purdon Supp. 1984), established new rights and procedures for voluntary examination, admission, and treatment of all mentally ill persons in the Commonwealth. First, the 1976 Act lowered to 14 years the age at which a parent or guardian may act on behalf of a juvenile and admit him or her to a facility without the juvenile's permission. Id. § 7201. It thus treated all mentally ill individuals 14 years old or above as adults. Second, the 1976 Act contained additional procedural safeguards for persons admitted voluntarily to mental health facilities. The Act ensured that the consent granted by a patient who seeks voluntary admission (or by the parent in the case of minors under 14) is truly informed.*fn6 Parents or guardians may object to the voluntary commitment of minors between 14 and 18 years old, in which case a hearing will be held within 72 hours.*fn7
Once an individual of any age is admitted he or she must be given a physical examination and provided with an individualized treatment plan within 72 hours. See id § 7205. The 1976 Act also sets forth specific procedures for withdrawal from voluntary treatment. Persons 14 years old and over may withdraw at any time in most circumstances. Persons under 14 years old may be released by their parent or guardian, and any other "responsible party" may petition the Juvenile Division of the court of common pleas to effect the child's release, in which case counsel shall be appointed and a hearing must be held within 10 days. See id § 7206.
Finally, the 1976 Act seeks to ensure that any person admitted to a mental health facility will be released from treatment as soon as such treatment is no longer necessary. Specifically, the Act requires that the facility conduct a reexamination and review of the treatment plan every 30 days, id § 7108(a), and provides that an individual shall not remain "in treatment or under any particular mode of treatment for longer than such treatment is necessary and appropriate to his needs." Id. § 7108(b).
On September 4, 1976, the Secretary adopted implementing regulations 6 Pa. Admin. Bull. 2115 (1976) ("1976 Regulations").*fn8 Two aspects of the new regulations appear to expand the procedural rights of individuals admitted to a mental health facility. First, the regulations establish an appeal system for considering objections by an individual to his or her treatment plan. See id. at 2117, § 718.104.22.168. This provision is very important because, under the 1976 Act, the treatment plan is reviewed every 30 days and an individual must be released when it is determined that treatment is not needed. By allowing an individual to object to a treatment plan in a formal manner, this provision helps to ensure that a juvenile will be treated at a facility for no longer than necessary. Second, the 1976 Regulations establish a "Bill of Rights" for patients of mental institutions, describing and guaranteeing rights to private communication, access to an attorney, involvement in the development and review of the treatment plan, and care in the least restrictive environment. See id at 2119. This aspect of the 1973 Regulations is less important because it concerns only the quality of care provided at a facility.
E. The 1977 Decision by the United States Supreme Court
The Supreme Court decided the appeal on May 16, 1977, Kremens v. Bartley, 431 U.S. 119, 52 L. Ed. 2d 184, 97 S. Ct. 1709 (1977). The Court noted that each of the named plaintiffs was over 14 years of age and mentally ill. It then concluded that because the 1976 Act provided that mentally ill persons 14 and older would be admitted to mental health facilities as adults, the named plaintiffs' claims were moot. Id. at 128-29. The Court also decided that the remaining members of the class were affected in such a variety of ways by the 1973 Regulations and the 1976 Act, depending upon their age and mental impairment, as to make a decision on the merits inappropriate.*fn9 The Court therefore vacated the district court's judgment and ordered substitution of named plaintiffs and reconsideration of the class definition in order to obtain a class with live claims. Id. at 134-37.
F. The Second Three-Judge Court Decision
On remand, pursuant to leave, appellees presented the district court with an amended complaint that proposed a plaintiff class consisting of two subclasses; one of mentally ill juveniles under the age of 14 committed to a state institution under the 1976 Act; the other of mentally retarded juveniles age 18 or younger committed to a state institution under the 1966 Act and 1973 Regulations.*fn10 The amended complaint thus alleged that the 1966 Act, the 1973 Regulations, the 1976 Act, and the 1976 Regulations were all unconstitutional.
The district court, with one judge dissenting, found the set of procedural safeguards prescribed in the 1966 Act, 1973 Regulations, and 1976 Act unconstitutional on their face and enjoined their enforcement. Institutionalized Juveniles v. Secretary of Public Welfare, 459 F. Supp. 30 (E.D. Pa. 1978).*fn11 The court held that its prior conclusions in Bartley concerning specific procedural rights, including the need for an automatic post-commitment hearing, were still valid and thus held that the Commonwealth's procedures violated due process standards. See id. at 43-45, 47.
Defendants once again appealed the decision of the three-judge court, and the Supreme Court noted probable jurisdiction on June 19, 1978. Secretary of Public Welfare v. Institutionalized Juveniles, 437 U.S. 902, 57 L. Ed. 2d 1132, 98 S. Ct. 3087 (1978).
Prior to oral argument before the Supreme Court, the Secretary promulgated new regulations further implementing the 1976 Act. 8 Pa. Admin. Bull. 2432 (1978) ("1978 Regulations").*fn12 The 1978 Regulations elaborated the Commonwealth's procedures concerning confidentiality of mental health records, see id at 2436-40, and included a "Manual of rights for patients in mental hospitals," id. at 2440, which discussed in great detail the specific rights to which patients are entitled. Included in this "manual" was a detailed grievance procedure that made appellate review available to any patient objecting to the general conditions of care at the facility. Id. at 2443-44.*fn13 Thus, the reforms included in the 1978 Regulations related to the quality of care at institutions.
H. The 1979 Decision by the United States Supreme Court
The Supreme Court consolidated the instant case for hearing with Parham v. J.R., a case challenging the constitutionality of Georgia's procedures for institutionalization of persons under 18 years of age. The court filed opinions on June 20, 1979, in both cases. See Parham v. J.R., 442 U.S. 584, 61 L. Ed. 2d 101, 99 S. Ct. 2493 (1979); Secretary of Public Welfare v. Institutionalized Juveniles, 442 U.S. 640, 61 L. Ed. 2d 142, 99 S. Ct. 2523 (1979). In Parham, the Court concluded that parents should retain the dominant role in the decision to admit a mentally ill juvenile, but that their discretion is not absolute and thus that an independent decision by a state authority is required. Parham, 442 U.S. at 604. The Court then outlined the due process standard for the institutionalization of minors:
We conclude that the risk of error inherent in the parental decision to have a child institutionalized for mental health care is sufficiently great that some kind of inquiry should b made by a "neutral fact finder" to determine whether the statutory requirements for admission are satisfied. That inquiry must carefully probe the child's background using all available sources, including, but not limited to, parents, schools, and other social agencies. Of course, the review must also include an an interview with the child. It is necessary that the decision maker have the authority to refuse to admit any child who does not satisfy the medical standards for admission. Finally, it is necessary that the child's continuing need for commitment be reviewed periodically by a similarly independent procedure.
Id. at 606-07 (footnotes and citations omitted).
In its opinion in Institutionalized Juveniles, the Court reviewed Pennsylvania's scheme as established by the 1966 Act, 1973 Regulations, 1976 Act, and 1978 Regulations. The Court examined separately the procedures for mentally ill juveniles and those for mentally retarded juveniles. It held that the regulatory scheme comported in all respects with the due process requirements set out in Parham. Institutionalized Juveniles, 442 U.S. at 649-50. The Court thus reversed and remanded the case for further proceedings. The district court subsequently entered judgment for defendants, terminated the class, and dissolved the three-judge panel. Institutionalized Juveniles v. Secretary of Public Welfare, 87 F.R.D. 463 (E.D. Pa. 1980).
II. PLAINTIFFS' PETITION FOR COUNSEL FEES
On August 20, 1975, plaintiffs moved to amend the district court's opinion and order in Bartley to include attorneys fees and costs under the Civil Rights Attorneys Fees Awards Act of 1976, 42 U.S.C. § 1988 (1982), which permits a court to award attorney fees to the prevailing party in civil rights litigation. After the two appeals to the Supreme Court were completed, the district court on August 25, 1980, ordered plaintiffs to file all fee petitions and supporting memoranda. Plaintiffs filed affidavits shortly thereafter. They sought an award for David Ferleger, plaintiff's lead counsel, of $92,341, reflecting 1376.6 hours of legal work on the case from 1972 to 1981, billed at the historical hourly rates Ferleger used during that period.*fn14 Plaintiffs also requested fees for Ferleger to compensate him for work performed as guardian ad litem for the class. Additionally, plaintiffs sought fees of $3210 for 107 hours of work performed by Penelope A. Boyd in 1978 while she was a law student, and $9400 for 470 hours of work performed from 1972 to 1975 by other law students. Finally, plaintiffs applied for $12,392 to compensate Herbert Newberg for 92.2 hours spent preparing and litigating the fee petition from 1975 to the date of the district court's ruling on the fee petition.*fn15
Plaintiffs also sought an award above the lodestar for the work of Ferleger, Boyd, and the law students. They requested that the court apply a multiplier to reflect the quality of the work performed, the extent of benefits achieved, the constitutional significance of the case, the contingent nature of the case, and the delay in payment to counsel. The requested multiplier was unspecified.
Both parties petitioned the court for an award of costs under Fed. R. Civ. P. 54(d). Plaintiffs sought $7,082 for expenses incurred by Ferleger and $136.46 for expenses incurred by Newberg. Defendants sought $2,034.15 in costs.
B. The Proceedings in District Court
After hearing oral argument, the district court issued a comprehensive and thoughtful memorandum opinion on July 26, 1983. Institutionalized Juveniles v. Secretary of Public Welfare, 568 F. Supp. 1020 (E.D. Pa. 1983). The Court found that plaintiffs essentially succeeded on the merits because they received some of the benefits they sought when the Commonwealth enacted the 1973 Regulations, the 1976 Act, and the 1978 Regulations to protect mentally ill and retarded juveniles.*fn16
The court further found that the litigation was a catalyst for these changes. Based upon this court's criteria in Ross v. Horn, 598 F.2d 1312 (3d Cir. 1979), and NAACP v. Wilmington Medical Center, 689 F.2d 1161 (3d Cir. 1982), the district court concluded that, despite the Supreme Court's entry of Judgment in favor of the defendants, plaintiffs were a prevailing party for purposes of § 1988 and thus were entitled to attorneys fees. The court decided, however, that plaintiffs were not prevailing parties as to any work performed after the promulgation of the 1978 Regulations. Because the Supreme Court had ruled that the Commonwealth's procedures as of the promulgation of the 1978 Regulations were constitutionally sufficient, the court concluded that the plaintiffs had received a mere "gratuitous judicial endorsement of legislative and administrative action," 568 F. Supp. at 1027, and that plaintiffs therefore had obtained no relief in the Supreme Court.
The court awarded the following fees and cost: A. For the work performed by Ferleger, after eliminating the hours spent after 1978 on the merits of the case, reducing some of the hours spent prior to that date, and basing its calculation on Ferleger's historic hourly rates that reflect his growth in experience as an attorney from 1972 to 1978, a lodestar of $72,957.00 for work on the merits and $2,123.50 for work on the fee petition.*fn17 for the work performed by Boyd and the other law students, no fee.*fn18 c. for the work performed on the fee petition by Newberg, after reducing some of the hours spent and accepting as reasonable the hourly rate Newberg used in his affidavit, a lodestar of $14,880.00*fn19 d. No award of costs to either party, based upon the discretion of the district court in deciding whether to make such an award. See Fed. R. Civ. P. 54(d).
Date Hours x Rate = Subtotal
Merits 1972-197 493.2 $50.00 $24,660.00