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INTERFAITH COMMUNITY ORGANIZATION v. HONEYWELL INT'L

August 26, 2004.

INTERFAITH COMMUNITY ORGANIZATION, et al., Plaintiff,
v.
HONEYWELL INTERNATIONAL, INC., (formerly known as AlliedSignal, Inc.), et al., Defendants.



The opinion of the court was delivered by: DENNIS CAVANAUGH, District Judge

OPINION

Presently before this Court is Plaintiff Interfaith Community Organization's ("ICO"), and ECARG, Inc.'s ("ECARG") (hereinafter collectively referred to as the "Petitioners") application for an award of litigation costs, including attorneys' fees and expert witnesses' fees.

BACKGROUND

  On May 21, 2003, this Court entered an Amended Opinion granting judgment in favor of ICO and ECARG with regard to ICO and ECARG's 42 U.S.C. § 7002(a)(1)(B) claims against Honeywell. See Interfaith Community Organization v. Honeywell Int'l Inc., 263 F.Supp. 2d 796 (D.N.J. 2003). The Amended Opinion Awarded ICO and ECARG fees and costs that were "incurred in furtherance of its RCRA claim against Honeywell in this action." Id. at 850.

  On July 18, 2003, ICO filed Plaintiff's Application for an Award of Litigation Costs, Including Attorneys' Fees and Expert Witness' Fees ("ICO Fee Application"). The ICO Fee Application sought reimbursement of $4,706,506.09 in attorneys fees and expenses. On November 13, 2003, ICO filed Plaintiff's Reply Brief in Support of Their Application for an Award of Litigation Costs, Including Attorneys' Fees and Expert Witness' Fees ("ICO Reply"), reducing ICO's request from $4,706,506.09 to $4,587,990.22.

  On July 21, 2003, ECARG filed a Petition for an Award of Attorneys' Fees, Expert Witness Fees and Other Costs Related to ECARG's RCRA claim ("ECARG Fee Petition"). The ECARG Fee Petition sought $7,652,080.24 in attorneys' fees and expenses. On November 14, ECARG filed a Reply in Further Support of the ECARG Fee Petition ("ECARG Reply"), reducing its request from $7,652,080.24 to $7,642,385.82.

  The parties to this action appeared before this Court on May 4, 2004 for a hearing on the record.

  ANALYSIS

  Section 7002(e) of the Resources Conservation and Recovery Act ("RCRA") 42 U.S.C. 6972(e) provides that the Court "may award costs of litigation (including reasonable attorneys' and expert witness fees) to any prevailing or substantially prevailing party, whenever the court determines such an award is appropriate." This Court having determined that ICO and ECARG are prevailing parties in this litigation, stating in an Order dated May 16, 2003:
Having prevailed on their RCRA claims, [ICO] and ECARG are entitled to an award of attorneys' fees, costs and expenses they have incurred in furtherance of their RCRA claims in this action.
I. FEES

  Lindy Brothers Builders, Inc. of Philadelphia v. American Radiator & Standard Corp., 487 F.2d 161, 167 (3d Cir. 1971) establishes the principle that the "lodestar" is calculated by multiplying the number of hours reasonably expended by a reasonable hourly rate. The lodestar method is presumed to yield a reasonable fee. Washington v. Philadelphia Court of Common Pleas, 89 F.3d 1031, 1035 (3d Cir. 1996) (internal citations omitted).

  There are several issues that must be addressed in determining the award of attorneys' fees and costs in this matter. The first issue is whether the ECARG and ICO petitions are duplicative (i.e. whether these two parties seek separate compensation for the same work — as they both litigated RCRA claims against Honeywell). Second, as applies to counsel for ICO, Terris, Pravlik & Millian, L.L.P. (the "Terris Firm") and counsel for ECARG, Wallace King Marraro & Branson, P.L.C. ("Wallace King"), whether New Jersey or Washington, D.C. rates should apply, and what those rates are. Third, this Court, in calculating the "lodestar" must determine whether the claimed number of hours expended by counsel here are reasonable. Thus, this Court must determine how much of the parties' work is recoverable, what rate to apply to the work, and multiply that rate by the reasonable number of hours expended to arrive at the "lodestar" amount.

  A. Is the Total Fee Recovery Duplicative?

  The first issue that this Court must assess in deriving the "lodestar" is whether or not ICO and ECARG's pursuit of their RCRA claims were unnecessarily duplicative. Honeywell argues that whatever fee this Court awards, it should be tailored to reflect the reasonable and necessary costs for trying the RCRA claim one time. Honeywell asserts that ICO and ECARG's fee applications seek reimbursement as if each applicant was the sole RCRA plaintiff and was required to bear the entire cost of prosecuting the RCRA claim, but that in reality the two applicants prosecuted nearly identical RCRA citizen suit claims that sought and achieved a single result.

  Both ICO and ECARG incurred an enormous amount of attorney hours; more than 10,000 by ICO and 9,000 by ECARG, and paralegal hours; 2,797 by ICO and 4,738 by ECARG, prosecuting their RCRA claims. Honeywell asserts even where ICO and ECARG claim to have coordinated efforts, that they have done so in name only. As an example, Honeywell notes that ICO and ECARG filed a joint motion for summary judgment, but each spent large amounts of time on the unsuccessful effort; 362.5 attorney hours by ICO and 200 attorney hours by ECARG. While this is a significant amount of time, Plaintiff does not demonstrate how a large number of hours is necessarily indicative of duplicative efforts or lack of coordination.

  Ultimately, it is the duty of the party seeking fees to exclude such hours from its initial calculation of the total hours expended. Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). Honeywell asserts that while ICO and ECARG are within their rights to pursue very similar claims independently, that duplicative and redundant costs cannot be shifted to Honeywell. See e.g. Halderman v. Pennhurst State Sch. & Hosp., 49 F.3d 939, 943-44 (3d Cir. 1995). Honeywell insists that it should only be liable for the fees and costs necessary to the litigation of a "single and well-managed action." Gerena-Valentin v. Koch, 739 F.2d 755, 759 (2d Cir. 1984).

  ECARG is essentially an intervener in this matter, independently choosing to file a complaint against the Defendant, Honeywell. Courts in other circuits have awarded interveners attorneys' fees under fee-shifting statutes. See e.g. EPA v. Envtl. Waste Control, Inc., 710 F.Supp. 1172, 1248 (N.D.Ind. 1989) aff'd, 917 F.2d 327 (7th Cir. 1990) (intervener entitled to fees under RCRA).

  Furthermore, ICO and ECARG are not fully aligned in interest. ECARG was a Defendant for the entire litigation against whom Plaintiffs sought a finding of liability. Only later did ECARG choose to pursue its RCRA claim against Honeywell.

  Furthermore, ECARG and ICO are adverse parties in this litigation, thus ECARG had no control over ICO's case. Also, while ICO, as an environmental group, focused its claim on the imminent and substantial endangerment that the chromium contamination presents to the environment at or near the Site, ECARG, as owner of the Site, presented a RCRA claim that was more focused on the human health risks posed by contamination at the Site.

  While it is the case that both ICO and ECARG pursued RCRA claims, this similarity alone is insufficient to render all of their work as duplicative. This was an immensely complicated litigation, and ICO and ECARG were adverse parties throughout. Accordingly, this Court declines Honeywell's request to treat ICO and ECARG as a "single prevailing party" for fee recovery purposes

  B. Appropriate Billing Rate

  The second issue that must be determined with regard to this fee application is what fee should apply to the Terris Firm and to Wallace King.*fn1 Both of these firms are based in Washington, D.C. and wish to have the Washington, D.C. market rates apply to their fee applications. Honeywell asserts that New Jersey rates should apply, but that if this Court is to determine that Washington, D.C. rates should apply, that those rates be controlled by the Laffey Matrix.*fn2

  The starting point in determining a reasonable hourly rate is the attorneys' usual billing rate, but this is not dispositive. See Alan Hirsch & Diane Sheehey, Federal Judicial Center, Awarding Attorneys' Fees & Managing Fee Litigation 20 (1994); compare Cunningham v. City of McKeesport, 753 F.2d 262, 268 (3d Cir. 1985) (adopting firm's regular billing of $100 per hour for purposes of lodestar calculation), vacated on other grounds, 478 U.S. 1015 (1986), original decision reinstated, 807 F.2d 49 (3d Cir. 1986), cert. denied, 481 U.S. 1049 (1987) with Student Pub. Interest Research Group v. AT & T Bell Lab., 842 F.2d 1436, 1443-45 (3d Cir. 1988) (rejecting approach of adopting attorneys' actual billing rates for more flexible community market rate approach).

  In Blum v. Stenson, 465 U.S. 886, 890 (1984), the Supreme Court held that attorneys from the Legal Aid Society of New York, a non-profit law office, were entitled to a fee based on prevailing market rates rather than the cost to such lawyers for providing their services. In AT&T Bell Laboratories, the Third Circuit has determined the, under Blum, that the normal billing rate of the Terris Firm was below the market rate and that fee awards for the Terris Firm should be based on community market rates rather than the Terris Firm's actual billing rate. AT&T Bell Lab., 842 F.2d at 1448. That Court also affirmed the district court's use of rates based on the Washington, D.C. market, in which the Terris Firm is located. Id.

  In fee cases involving out of state counsel, the question arises as to whether the governing hourly rate should be the prevailing rate of the forum community or the out of state counsel's home community. The Third Circuit has not developed a universal, per se, answer to this issue.

  In 1985, the Third Circuit established a Task Force on Court Awarded Attorney Fees to address the issue of fee awards in this circuit. The Task Force recommended the adoption of the "forum rate" rule. Report of the Third Circuit Task Force on Court Awarded Attorney Fees, 108 F.R.D. 237, 260 (1985). The Task Force explicitly indicated that this recommendation was "contrary to current Third Circuit practices." Id. at 261, n. 73. The Task Force unequivocally stated that where there is a difference between the forum's rate and that of the petitioning attorney, "[t]he Third Circuit uses the rate applicable in the locale in which the attorney practices." Id. at 249, n. 40.

  Here, ICO and ECARG seek an award based on market rates in Washington, D.C., where the Terris Firm and Wallace King are located. Despite the recommendation of the Task Force, "[n]either a task force report nor a subsequent panel can overrule a published opinion of this Court." PIRG v. Windall, 51 F.3d 1179, at 1186 n. 9 (3d Cir. 1995). It is curious that ICO has cited Windall because, in that case, the Third Circuit adopted a general rule that the forum community is the relevant community for the purposes of determining hourly rates unless the fee applicant can show that the case requires the special expertise of counsel from the non-forum location or that counsel from the local forum are unwilling to take the case. Id. at 1187-88. Ultimately, however, case law is inconsistent with regard to this issue.

  Most Courts in this Circuit have held that, absent special expertise or inability to obtain local counsel, the forum rates should apply. The Task Force has indicated that the forum rate rule should be applied except "when the need for `special expertise of counsel from a distant district is shown' or when local counsel are unwilling to handle the case." 108 F.R.D. at 261. Accordingly, this Court must determine whether this matter required the special expertise of the Terris Firm or Wallace King, or, in the alternative, that local counsel were unwilling or unable to handle this case.

  1. Terris Firm

  At the time that this suit was initiated, the Terris Firm had litigated hundreds of major environmental cases on behalf of citizens for more than twenty-five years. The Terris Firm's experience was directly related to such issues in this case as the notice requirement, standing, and preclusion due to governmental activities. Furthermore, when this matter was initiated, the Terris Firm was litigating another RCRA matter involving the same New Jersey statutes and standards at issue here. ICO v. Shinn, Civ. No. 93-4774 (JCL), Slip. Op. (D.N.J. November 24, 1998). Thus, ICO had expertise not only in the general field of environmental cases brought by citizens, but more specifically, with regard to the particular issues of this case. Indeed, this Court is well aware that the Terris Firm has successfully litigated many citizen suits before this Court, various Courts of Appeal, and the United States Supreme Court.

  This Court further notes that when ECARG decided to pursue its RCRA claim against Honeywell, that they retained Washington, D.C. counsel. Moreover, after Honeywell lost the RCRA claim in district court, it too retained counsel from Washington, D.C. Since all of the major parties involved in this litigation have retained counsel from Washington, D.C., ICO's retention of Washington D.C. counsel strikes this Court as imminently reasonable. In a case where all counsel were from Washington, D.C., the Third Circuit used Washington, D.C. rates because "the case was briefed and argued based on the [Washington] D.C. market." AT&T Bell Laboratories, 842 F.2d at 1442, n. 4 (1988).

  Furthermore, the forum rate rule is allowed "when local counsel are unwilling to handle the case." 108 F.R.D. at 261. There is some disagreement between the parties as to what quantum of proof is necessary in order to demonstrate that local counsel are unwilling to handle a matter. Honeywell asserts that ICO must demonstrate that they were unable to obtain competent New Jersey counsel in this case. This Court does not read the case law to be so narrow. When a litigant has reason to know that competent local counsel are unavailable, it strikes this Court as a needless exercise in futility to go through the process of searching for something that is not there. See e.g., Charles Q. by & Through Beilharz v. Houston, 1997 U.S. Dist. LEXIS 17308 (M.D.Pa 1997); Church of the Am. Knights of the Ku Klux Klan v. City of Erie, 2000 U.S. Dist., LEXIS 20019 (W.D. Pa 1998).

  ICO had previously sought to protect residents from chromium exposure and to clean up properties. Affidavit of Joseph Morris, ¶ 2. ICO sought to bring litigation to clean up the contamination. Id. at ¶ 4. However, as a community group, ICO was not in a position to pay an attorney any compensation, not even for expenses. Id. at ¶ 5. In their search for competent legal counsel, ICO was repeatedly turned down by local attorneys for a number of reasons: the case involved political risk, the case involved intensive factual work, the legal terrain was extremely specialized, and the costs would be too great. Ibid. As a result, ICO brought its suit pro se. ICO v. Shinn, Civ. No. 93-4774 (JCL), Slip Op. (D.N.J. November 24, 1998).

  When ICO faced dismissal because it might not be able to proceed as a pro se litigant, ICO brought their case to the attention of the Terris Firm. During the litigation of that case, ICO and the Terris Firm discussed the contamination at issue in this case. Affidavit of Joseph Morris, ¶ 6. Honeywell seems to assert that ICO's inability to retain competent counsel in Shinn is irrelevant because it does not explain why ICO failed to retain competent local counsel in this particular case. However, the law does not require ICO to engage in acts of futility, but rather that local counsel be unavailable or unwilling to take the case.

  Accordingly, this Court will apply Washington, D.C. market rates to the Terris Firm.

  2. Wallace King

  Wallace King is based in Washington, D.C. Furthermore Wallace King has extensive experience litigating RCRA matters and other complex environmental claims. Wallace King was retained to represent the Grace Defendants in this matter in April, 1999. Part of their representation was the prosecution of cross-claims, including the RCRA cross-claim against Honeywell.

  ECARG asserts that Wallace King was retained due to its substantial expertise in RCRA and other complex environmental litigation matters, Mr. Marraro's prior experience handling chromium-related matters in New Jersey, and other matters before the NJDEP, and the unwillingness of ECARG's prior law firm, Pitney, Hardin Kipp & Szuch, to pursue ECARG's RCRA claims against Honeywell.

  Honeywell has asserted that ECARG has failed to introduce any evidence that there were no lawyers in New Jersey with the necessary expertise to represent it in this matter. Indeed, ECARG's primary trial counsel was a New Jersey attorney, Mr. Agnello of Carella Byrne.

  Accordingly, this Court shall apply New Jersey rates to Wallace King. However, it should be noted that the rates charged in this matter by Wallace King are in line with prevailing hourly rates charged by New Jersey attorneys with comparable skill, experience and reputation.

  3. Washington D.C. Rates

  Generally, the "reasonable hourly rate" needed to calculate the lodestar is based on the attorney's normal billing rate so long as it is reasonable. In Lindy I, the Court of Appeals for the Third Circuit stated that "[t]he value of an attorney's time is reflected in his normal billing rate." 487 F.2d at 167. The attorney's normal billing rate is then compared to the market value of legal services to assure that an attorney's normal billing rate is reasonable. Lindy I, supra, 487 F.2d at 167; Daggett v. Kimmelman, 617 F.Supp. 1269, 1281-1282 (D.N.J. 1985), aff'd, 811 F.2d 793 (3d Cir. 1987).

  The reasonableness of an attorney's hourly rate is judged by comparing it to the prevailing market rate in the community in which the attorney's office is located or, in the case of the Terris firm, using market rates for the community since it is below the market rate.

  Based upon the analysis of Third Circuit decisions, supra, this Court concludes that the fees to be awarded are based on the market rates where the attorney's office is located. Accordingly, the Terris firm is to be awarded fees based on the rates for Washington, D.C.

  Here, the Terris firm's request for a fee reward is based on the current hourly rates for all of the work performed in this case through May 31, 2003.*fn3 In Missouri v. Jenkins, 491 U.S. 274, 283-84 (1989), the Supreme Court held:
Clearly, compensation received several years after the services were rendered — as it frequently is in complex civil rights litigation — is not equivalent to the same dollar amount received reasonably promptly as the legal services are preformed, as would normally be the case with private billings. We agree, therefore, that an appropriate adjustment for dely in payment — whether by the application of current rather than historic hourly rates or otherwise — is within the contemplation of the statute. [footnote omitted].
In Lanni v. New Jersey, 259 F.2d 146, 149-150 (2001), the Third Circuit held:
When an attorney's fees are awarded, the current market rate must be used. The current market rate is the rate at the time of the fee petition, not the rate at the time the services were performed. . . . A current rate is exactly that — a reasonable rate based on the currently prevailing rate in the community for comparable legal services.
  Accordingly, this Court will award Plaintiffs their fees based on the current market rates for Washington, D.C. This Court must now determine the applicable market rates for Washington, D.C.

  Plaintiff has requested that the fee awarded be based on a fee schedule for Washington, D.C., that has been accepted by the District Court for the District of Columbia and the Court of Appeals for the District of Columbia. The fee schedule is called the "Laffey Matrix" because it was first accepted by the District Court for the District of Columbia in Laffey v. Northwest Airlines, Inc., 572 F.Supp. 354 (D.D.C. 1983), aff'd, 746 F.2d 4 (D.C. Cir. 1984), overruled in part on other grounds, Save Our Cumberland Mountains v. Hodel, 857 F.2d 1516, 1525 (D.D. Cir. 1988) (en banc).

  The original and updated Laffey Matrix has been consistently used to determine appropriate fee awards by Courts in the District of Columbia. See Salazar v. The District of Columbia, 123 F.Supp.2d 8, 13-15 (D.D.C. 2000); Fischbach v. District of Columbia, 1993 U.S. Dist. LEXIS 19756, *10 (D.D.C. 1993); Palmer v. Barry, 704 F.Supp. 296, 298 (D.D.C. 1989).

  There is some disagreement as to how the Laffey Matrix is properly updated. Defendant argues that the Laffey Matrix ought to be updated using the consumer price index, or CPI, for the Washington, D.C., metropolitan area to the original 1981-1982 Laffey Matrix. This updating methodology was developed by the U.S. Attorney for the District of Columbia for use in settlement negotiations. Covington v. District of Columbia, supra, 839 F.Supp. at 898. This methodology produces lower hourly rates than the Plaintiff's methodology.

  Plaintiff has updated the Laffey Matrix to more accurately reflect the presently existing market rates in Washington, D.C. This updating has been accepted by the District Court for the District of Columbia, this Court, and the Middle District of North Carolina. Salazar v. The District of Columbia, supra, 123 F.Supp.2d at 13-15; PIRG v. Magnesium Elecktron, Inc., Civ. No. 89-3193, Slip op. 2, 10 (D.N.J. December 28, 1995), vacated on other grounds, 123 F.3d 111 (3d Cir. 1997); North Carolina Alliance for Transportation Reform v. North Carolina Department of Transportation, 168 F.Supp. 2d 569, 579-580 (M.D.N.C. 2001).

  There has been one instance where the District of Columbia has considered these two alternate methods for updating the Laffey Matrix. In that case, Salazar v. District of Columbia, supra, 123 F.Supp. at 13-15, the plaintiffs requested fees based on the methodology for updating the Laffey Matrix used by Plaintiffs here. The defendant, like Honeywell, requested that the U.S. Attorney's matrix be used to reflect market rates. In its decision, the court evaluated the approaches and found that the approach used by plaintiffs was more appropriate.*fn4 Ibid.

  Plaintiffs have also submitted the 2002 survey of billing rates from the National Law Journal in support of their assertion that the Laffey Matrix as updated is reasonable. Although Defendant argues that the National Law Journal survey is inadmissible hearsay, rate surveys have long been recognized as a means of demonstrating market rates in fee litigation. See, e.g. Covington v. District of Columbia, supra, 57 F.3d at 1109; Mathis v. Spears, 857 F.2d 749, 755-756 (Fed. Cir. 1988); Salazar v. District of Columbia, supra, 123 F.Supp.2d at 14.

  Accordingly, this Court will award Plaintiff's their fees based upon the Laffey Matrix as updated ...


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