On certification to Superior Court, Law Division, Mercer County.
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
In this appeal, the Court reviews the methodology to be applied in respect of applications for counsel fees and costs in those instances where fee-shifting is permitted.
R.M. filed an action challenging certain provisions of Rule 1:20-9, which mandated that a grievance filed against an attorney remain confidential until a formal complaint is filed. According to R.M., those provisions violated the federal Civil Rights Act, 42 U.S.C. § 1983, because they infringed on the free speech guarantees of the U.S. and New Jersey Constitutions. This Court directly certified the action, and referred the issue to the Professional Responsibility Rules Committee (PRRC). The PRRC recommended that Rule 1:20-9 be amended, in part, to lift the veil of confidentiality in certain situations. In R.M. v. Supreme Court, 185 N.J. 208 (2005), this Court sustained R.M.'s constitutional challenge, finding that Rule 1:20-9 violates the First Amendment. The Court held that a grievant may publicly discuss the fact that a grievance has been filed, the content of the grievance, and the result of the process. As a result, R.M. was the "prevailing party" in that action.
R.M. applied for counsel fees and costs, citing the fee-shifting provisions of 42 U.S.C. § 1988(b). She sought fees and costs before the trial court and, separately, in respect of the proceedings before this Court. Before the trial court, R.M. certified that her counsel had worked 130.8 hours, and requested an hourly rate of $394, for a total of $51,535.20. R.M.'s application for fees and costs before this Court sought reimbursement for 166.57 hours at the rate of $394, plus costs of $193.12, for a total of $65,822.12. In the aggregate, then, for investigation, research, and filing of a complaint in the Law Division, the preparation and filing of summary judgment briefs and collateral material before the Law Division, the preparation and filing of briefs before this Court, and the presentation of argument before this Court, R.M. claimed her counsel expended a total of 297.37 hours of work, for which she sought a total of $117,537.32. R.M. at no time sought an enhancement of her claimed counsel fees.
The Attorney General, representing all defendants in the matter, opposed R.M.'s requests before both the Law Division and this Court. The Law Division stayed its consideration of the motion while this Court addressed R.M.'s similar motion. The Attorney General argued before this Court that the $394 hourly rate sought by R.M. was "unreasonable" and labeled as "excessive" the 166.57 hours of work. By an order dated May 9, 2006, this Court granted R.M.'s motion and awarded her counsel fees and costs "for work done in the Supreme Court . . . limited to $25,194, inclusive of fees and costs."
R.M. returned to the Law Division and pressed her stayed motion for counsel fees and costs. The Attorney General asserted once again that both the number of hours claimed and the suggested hourly rate were unreasonable and excessive. The Attorney General explained that the vast majority of the hours asserted were duplicative of the hours presented in R.M.'s application for fees before this Court. On June 23, 2006, the trial court heard argument on R.M.'s application and, later that day, issued an order awarding a total of $19,726 for the work done before the Law Division. Neither that order, nor an amended order, nor the transcript of the argument discloses the trial court's reasoning. However, the amount awarded by the trial court bears the same proportionate relationship to the amount originally sought by R.M. in the Law Division as the amount awarded by this Court bears to the amount sought by R.M. in this Court (38 percent).
R.M. appealed, and the Supreme Court directly certified the matter on its own motion.
HELD: Because the trial court did not explain how or why it arrived at the amount of counsel fees awarded, this Court cannot ascertain whether the appropriate methodology was used to determine the award. For that reason, the trial court's order is vacated and the matter is remanded for disposition of R.M.'s counsel fees claim.
1. As a matter of policy, the scope of counsel fees recoverable under the Civil Rights Act is purposefully broad. The manner in which a reasonable counsel fee is to be determined under the Act is well-settled. First, the court must determine the "lodestar," which is "the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." This involves two separate inquiries: whether the number of hours of work claimed is reasonable, and whether the hourly rate sought is reasonable. Because the determination to award counsel fees and, if so, in what amount, is entrusted to the court's exercise of discretion, the amount of the "lodestar" may be reduced or enhanced. The analysis required in respect of an award of counsel fees is governed by several factors in addition to the actual hours expended by the attorney and his or her hourly rate. These factors include the novelty and difficulty of the questions presented, the skill required to perform the legal service, the preclusion of other employment opportunities for the attorney, and the amount in controversy. (pp. 8-12)
2. In a parallel context this Court has stressed that a trial court must analyze the relevant factors in determining an award of reasonable counsel fees and then must state its reasons on the record for awarding a particular fee. In this instance, however, the trial court did not explain how or why it arrived at the amount of counsel fees it awarded. The Court cannot ascertain with confidence whether the trial court applied the long-standing "lodestar" methodology for the determination of the counsel fee awards. For that reason, the Court vacates the order awarding R.M. counsel fees and costs. The Court remands the case to the Assignment Judge of the Mercer Vicinage as a more suitable forum for the disposition of R.M.'s counsel fees claims. (pp. 12-14)
3. On remand, the Assignment Judge is tasked to determine the lodestar for the work done by R.M.'s counsel in four venues: (1) work done in the Law Division before this Court granted direct certification; (2) work done in prosecuting her counsel fees application in the Law Division; (3) work done in prosecuting this appeal; and (4) work done before the Assignment Judge on remand. The number of hours claimed must be carefully scrutinized so that no duplication or overlap exists between the work for which R.M. already received an award from this Court and the work for which R.M. seeks an additional award. The hourly rate sought by R.M. must be reasonably defined, taking into account any additional submissions R.M. may make and any rebuttal proffered. (p. 14-15)
The order of the Law Division awarding counsel fees and costs is VACATED and the matter is REMANDED for further proceedings consistent with this opinion.
CHIEF JUSTICE ZAZZALI and JUSTICES LONG, LaVECCHIA, ALBIN, WALLACE and HOENS join in ...