March 20, 2008
MICHAEL HEUSSER, RESPONDENT,
NEW JERSEY HIGHWAY AUTHORITY, APPELLANT.
MICHAEL HEUSSER, APPELLANT,
NEW JERSEY HIGHWAY AUTHORITY, RESPONDENT.
On appeal from a Final Order of the Division on Civil Rights, Docket Nos. EB23HB-33396, EB27HL-33396.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued February 7, 2008
Before Judges Parrillo, S.L. Reisner and Gilroy.
After an administrative determination of handicap discrimination, the Director of the Division on Civil Rights awarded complainant, Michael Heusser, $97,198 for emotional distress, back pay and overtime pay, and interest, and $456,082.22 in counsel fees. On appeal, respondent New Jersey Highway Authority (Authority) challenges both the discrimination finding and counsel fee award. On his appeal, complainant argues the award of emotional distress damages and counsel fees should have been greater. We affirm in all respects.
According to the proofs adduced during the twenty-one day hearing before the Administrative Law Judge (ALJ), complainant was born with cerebral palsy, which affects his coordination and balance. Yet he is able to perform life's functions remarkably well. Recreationally, he bowls, hunts, engages in archery, fishes, canoes, swims, rides a two-wheel bicycle and lifts weights. In addition, complainant played baseball, soccer and football and had been on a wrestling team in high school.
Complainant also drives and has a commercial driver's license (CDL) with air-brake, tanker and hazardous material endorsements. In the past, he has driven a standard-shift Ford Ranger truck, which had no special equipment to accommodate his disability. Working for a landscaper, complainant cut lawns on rider mowers, did weed whacking, used a backpack blower, shoveled mulch and stone and engaged in the construction of railroad-tie walls.
Complainant was first hired by the Authority on September 27, 1987 as a utility person performing janitorial functions. At that time, the Authority maintained and operated the Garden State Parkway (GSP) and the Garden State Arts Center.*fn1
Complainant's main responsibilities were the cleaning of the toll areas - sweeping and mopping floors, receiving and storing supplies, shoveling snow, sweeping sidewalks and walkways, and picking up litter in and around the loading dock area. In the course of his duties, complainant had to walk across live traffic lanes, carry twenty-pound bags of garbage and use a shovel to remove snow and to spread salt in icy weather. Complainant also drove a Parkway van without difficulty. According to his supervisor, Joseph Turant, during an eight-hour day complainant "performed everything that he had to accomplish[,]" and performed satisfactorily.
In response to a job vacancy notice, complainant applied for a maintenance person 1 (MP1) position in the Authority's maintenance department. Although a promotion, the position shared some similar duties with the utility person position. Complainant's application was endorsed by Ollie Davis, the Authority's affirmative action and public agency compliance officer. The position required passing a medical examination and successfully completing a six-month probationary period, which could be extended for another six months. Following a check-up, complainant was cleared as "physically able to perform" without restriction. On February 5, 1992, complainant was promoted to the MP1 position.
A May 5, 1992 Authority memorandum enumerated the job duties of the maintenance department: hand roadway mowing; roadway mowing (involving tractors with 3-wing mowers and smaller tag-along mowers); sign maintenance and installation; bridge deck and bridge maintenance; waste management; stone/slope/berm protection (requiring the employee, among other things, to drive and operate dump trucks and to have a CDL); drainage maintenance and installation; janitorial duties; fence installation and repair; painting; sealing; delineator maintenance; concrete patch and maintenance; litter removal (requiring the employee to have a CDL, have the ability to lift heavy objects, walk a number of miles a day, have good hand and arm coordination and good balance on uneven ground); snow removal; degreasing and traffic safety (requiring the employee to "drive a medium to large size dump truck, rack body and small pickup along with tow behind arrow boards" and to place safety cones requiring "a certain amount of twisting, turning, bending, lifting and coordination"). Of all these duties, litter control was the most commonly performed job by maintenance personnel in 1991 and 1992 according to a union shop steward.
Complainant was assigned to the Clark Maintenance Yard under the supervision of Michael Crilley, who assigned different tasks to crew members on a daily basis. In assigning tasks, Crilley would take preferences and requests into consideration as well as an individual's skill or ability.
Less than two weeks into the position, Crilley observed complainant stumble and fall on a few occasions. The first time was on February 18, 1992, when complainant, while on litter patrol on a level grassy area, fell about ten to fifteen feet from the roadway. He was not injured, however, and picked himself up and continued with his job. Three days later, complainant fell while walking up a slope with a steel bladed weed-whacker. Crilley had complainant stop weed-whacking and "go on litter for the rest of the day." Although nylon cord weed-whackers are used most of the time outside the winter months when steel blades are needed to cut heavy brush, Crilley never considered whether complainant could use the nylon-cord machine.
Complainant also encountered some difficulty performing the "cone-out" procedure, used to close a portion of the roadway. During the process, two men stand on the back of a moving truck; one individual takes a cone from a stack and puts it on a ledge and the other person, located on the back tailgate in a cage, turns to retrieve the cone and place it on the road surface. Crilley had complainant try both positions; he had trouble with both and, while in the upper position, complainant "couldn't pull the cones off of the stack and put the cones on the truck and balance himself at the same time." Crilley saw complainant stumble and bounce off the side of the truck and off the cones. Complainant was tried at the "cone-out" procedure on only one occasion even though, as Crilley acknowledged, it takes a new person more than one cone-out "[t]o get the hang" of it.
On another occasion, Crilley assigned complainant to shovel a pile of Silvex, a pot-hole patching compound, onto the back of a truck. Complainant had difficulty balancing himself and fell into the truck. While Crilley was not concerned because the Silvex was located in the yard, he believed it would be unsafe should complainant lose his balance shoveling Silvex while on the road near live traffic.
Crilley documented these observations as well as his safety concerns. Only one or two weeks after complainant's transfer to maintenance, District Superintendent John Minella advised Dan Noxon, the Authority's Chief Maintenance Engineer, that complainant "was unable to perform some of the duties" and that there was a concern about his getting through the probationary period. At an initial meeting among Noxon, Minella and Crilley, the three "were pretty much convinced that [complainant] was going to be unsatisfactory in his probation [sic] period[.]"
At another meeting among these three men and Grady McMillon, the Authority's labor relations manager, and Davis, the Authority's affirmative action officer, Noxon advised that "it would be unsafe for [complainant], for his co-workers and even for our patrons to continue him in that position and that it was going to be our intent, barring any serious objection from them, that we were going to return him to his original position." Noxon concluded, based on Crilley's observations, "that there was not a significant portion of that job that [complainant] could do[,]" including litter pickup. During the meeting, there was no discussion of whether any protective equipment, other than normal safety equipment, was available to mitigate the stated safety concerns. At the conclusion of the meeting, all attendees agreed that complainant could not safely perform the maintenance job. As a result, complainant was transferred back to the utility position effective March 4, 1992, only one month after his promotion. Notably, complainant was not invited to attend either meeting.
Complainant was demoted despite his proven abilities in the past. For instance, Francisco Jaconetta, for whom complainant once worked as a landscaper, trained complainant to operate ride-on and push mowers that were similar to those used by the Authority, and to use a nylon cord weed-whacker similar to those used by the Authority. Complainant had no difficulty with either type of mower or using the weed-whacker machine on any terrain. Indeed, while working as a landscaper, complainant used a backpack blower and shoveled mulch and stone without observable difficulty. Once or twice during a two-year period, Jaconetta and complainant took turns using a sixteen-pound sledge hammer while the other held a wooden stake. Jaconetta also vouched for complainant's driving ability, rating him "[v]ery good," never having seen complainant stumble or fall getting in and out of any of his trucks, which were the same size step-up as trucks used by the Authority.
Leonard Anderson, an accommodation planning consultant and a provider of engineering for persons with disabilities, videotaped complainant using landscape equipment on irregular, hilly terrain in rural upstate New York in November 1998. During this time, complainant did not fall, lose his balance or incur any injury while using a weed-whacker, a rider mower, a power hedge trimmer, an improvised litter stick or while shoveling or using a wheelbarrow. According to Anderson, complainant possessed a normal level of maturity and judgment with respect to safety and risks. Based on his observations, Anderson opined that complainant was capable of performing litter collection, snow plowing, mowing and degreasing in 1992, with accommodations, without posing materially enhanced risks of serious injury. Furthermore, according to Anderson, the Authority could have accommodated complainant by permitting him to drive the coningout truck or follower truck during coning-out operations; by affording him additional training and practice with respect to shoveling; by permitting him to use a nylon-cord weed whacker with a shut-off device; by requiring him to remain near the safety truck during litter operations and by installing grab- bars on trucks. These accommodations, according to Anderson, would have cost the Authority little or nothing.
Richard Drach, a disability compliance expert, agreed that complainant could have performed the MP1 job with reasonable accommodations. According to Drach, in determining what reasonable accommodations should be offered to a disabled worker, an employer must undertake three steps: 1) analyze the essential functions of the job by reviewing the job description and by considering what is actually done on the job; 2) involve the employee and inquire what that individual needs to be accommodated, and 3) seek the input of others including management, the union, and outside private and governmental resources. Actually, the disabled employee is "the key person in any kind of discussion about an accommodation" because that person knows his or her limitations and what he or she can do. Even if the employee believes that he or she could perform, and the employer is of the opposite opinion, the employer, according to Drach, must nevertheless go through the process to determine whether a reasonable accommodation could be made. In this case, Drach "saw no evidence" that the Authority "had gone through a process that would have determined that there was not a reasonable accommodation that could be made in each of those areas that they had a concern in."
Specifically, as to complainant, Drach concluded that the Authority should have considered: 1) allowing him to use a nylon cord weed-whacker or a smaller shovel and looked into protective personal equipment and grab-bars on trucks; 2) job restructuring by permitting him to exclusively drive during cone-outs or by permitting him to perform litter removal some distance away from the flow of traffic, and 3) providing additional training time to learn how to perform the job safely. Such reasonable accommodations would have allowed complainant to perform the MP1 job satisfactorily. Drach based this ultimate conclusion, in part, on the fact that complainant had been medically cleared for the MP1 position without restrictions; that he had performed satisfactorily in the utility position; and that there were similar duties involved in both positions.
Complainant's demotion affected him both financially and emotionally. He began therapy in February 1994, presenting with symptoms of anxiety, depression and anger. However, about oneand-one-half years later, on October 11, 1995, complainant became a toll collector for the Authority and has since successfully completed his probationary period. He is happy "about holding the job and about being able to succeed"; is earning more money than a third-year MP1 because of a shift differential; has married and purchased a home; and is no longer seeing a psychologist. As a toll collector, complainant carries seventy-pound money vaults and uses a walk-behind forklift across the entire GSP in all kinds of weather. He has had no difficulty accessing the toll booths and has experienced no falls.
On March 11, 1992, complainant filed a complaint with the Division alleging that the Authority discriminated against him based upon his physical handicap when it demoted him from the position of MP1 back to a Utility Person's position. He sought "whatever relief is provided by law including, but not limited to, compensatory damages for economic loss, and humiliation, mental pain and suffering." An amended complaint charged the Authority with failure to provide complainant with reasonable accommodations that would enable him to perform his job.
The matter was transmitted to the Office of Administrative Law (OAL), where it was tried from January 9, 1995 to November 8, 1996. Following the close of evidence, the ALJ, in an initial decision of August 6, 1997, concluded that while complainant established a prima facie case of discriminatory treatment, the Authority successfully established that "the nature and extent of [complainant]'s disability reasonably precluded his performance in the Maintenance Person I position on the basis that [he] posed a safety danger to himself and others" and that the "Authority showed that it made reasonable efforts to accommodate [him] but that no reasonable accommodation was possible."
On February 5, 1998, the Director reversed the ALJ's dismissal, concluding that the Authority unlawfully denied [complainant] employment based on generalized assumptions made with insufficient analysis of his abilities, limitations, and the possibilities of reasonable accommodations that were not shown to cause undue cost or difficulty. . . . [and] failed to establish that it reasonably evaluated the [complainant's] abilities and the possibility of providing reasonable accommodation before determining that . . . [his] disability precluded his safe performance of the essential job duties of his position.
In so concluding, the Director found the Authority "failed to seek input from the [complainant] or to acquire an objective analysis from a physician or vocational rehabilitation expert regarding the nature of the complainant's limitations and possible accommodations." Instead, the Authority returned complainant "to his lower paid position during the initial weeks of his six-month probationary period based largely on the recommendation of supervisors who made untrained, general conclusions about . . . [complainant's] abilities and about the availability of effective accommodation." Ordering the Authority to "cease and desist from doing any act prohibited by the" New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:1-1 to -12, and from engaging in retaliation, the Director remanded the case to the OAL for further determination of remedies in accordance with the standards set forth in [the] order. Specifically, the ALJ shall fashion an appropriate award of pain and humiliation damages and reasonable attorneys fees, and shall assess a statutory penalty against the [Authority]. The ALJ shall also consider additional arguments and evidence of the parties to determine, in accordance with the standards detailed [in the order], whether the [complainant] could have performed the essential job duties of the Maintenance Person I position with reasonable accommodation. If the ALJ resolves this question in the affirmative, she shall fashion an appropriate award of back pay with interest and address the remedy of reinstatement.
In his June 14, 2001 Partial Initial Decision after remand, the ALJ awarded complainant: 1) $25,000 "for the emotional pain, psychological stress and humiliation he suffered[,]" and 2) $34,190 for back pay, $19,249 for back overtime pay with interest of $24,795, calculated pursuant to court rules.*fn2 In the course of his decision, the ALJ concluded that: 1) the Authority had an "absolute obligation" to provide complainant with reasonable accommodations; 2) the Authority "failed to demonstrate that it addressed the matter of reasonable accommodation(s) in any meaningful way, thus permitting inferences to be drawn to the effect that its minuscule efforts were de minimis and inadequate in nature and that it could have done a lot more by exploring other options"; and, 3) the record is devoid of evidence tending to demonstrate the occurrence of undue hardship to the Authority if any one or more of a number of referenced reasonable accommodations were provided to complainant since the MP1 position involved a great multiplicity of tasks. Had the Authority provided complainant with one or more of these "reasonable accommodations," complainant "would have been enabled to perform the essential job duties" of the MP1 position without endangering himself, other employees or the Authority's customers, because: "(a) the deficits of his mild disability would have been rendered congruous; and, (b) those valid concerns of the [Authority] about safety and the potential for harm would have been adequately guarded against."
In a Determination and Order dated December 27, 2001, the Director adopted the ALJ's conclusion that the Authority failed to prove that complainant "could not safely fulfill the essential requirements of the MP1 position with reasonable accommodations, and that effective accommodations would impose an undue hardship on [the Authority]." However, the Director modified the ALJ's recommended decision only to the extent of reducing the emotional distress damages to $15,000. In the course of his decision, the Director noted that, while the Authority may be correct in asserting that an employer "is not in all cases required to include" the employee in such discussions, the Authority's failure to gather complainant's input was evidence that its "decision was not reasonably arrived at." Furthermore, evidence of complainant's safe work performance in his current position, which requires, among other things, "walking in live traffic lanes between toll booths pulling a forklift-like apparatus and lifting and carrying full coin vaults (weighing at least 70 pounds) in all weather conditions," further supported the conclusion that complainant's "disability did not result in a materially enhanced risk of serious harm to himself or others."
In his March 11, 2005 Partial Initial Decision, Part II, the ALJ awarded complainant $380,068.86 in attorney's fees and costs. Based upon a September 12, 2003, amendment to the LAD (N.J.S.A. 10:5-17) which provides that "a prevailing complainant may recover damages to compensate for emotional distress caused by [a violation of the LAD] to the same extent as is available in common law tort actions," complainant moved for reconsideration of the Director's December 27, 2001 Determination and Order, which reduced the emotional distress award to $15,000. The Director denied that application as untimely. In a Determination and Order dated August 30, 2005, the Director increased the ALJ's recommended attorney's fees and costs award to $456,082.22.
The Authority appeals from the Director's Orders of February 5, 1998, December 27, 2001, and August 30, 2005, finding discrimination and fixing the amount of counsel fees. Specifically, the Authority raises the following issues as to the finding of discrimination:
I. DID THE DIRECTOR ACT IMPROPERLY BY APPLYING THE REQUIREMENT OF AN INTERACTIVE PROCESS TO THIS MATTER?
II. DID THE DIRECTOR ERR WHEN HE REJECTED THE AUTHORITY'S CONCLUSION THAT [COMPLAINANT] COULD NOT PERFORM THE ESSENTIAL FUNCTIONS OF THE MAINTENANCE PERSON I POSITION WITH OR WITHOUT REASONABLE ACCOMMODATION?
III. DID THE DIRECTOR IMPROPERLY REJECT THE AUTHORITY'S DETERMINATION THAT [COMPLAINANT] COULD NOT PERFORM THE FUNCTIONS OF HIS POSITION WITHOUT POSING A SAFETY, HEALTH AND WELFARE RISK TO HIMSELF AND OTHERS?
As to counsel fees, the Authority presents the following issues:
I. DID THE DIRECTOR ERR BY NOT CONSIDERING THE AUTHORITY'S STATUS AS A PUBLIC ENTITY WHEN DETERMINING THE AMOUNT OF ATTORNEY'S FEES TO AWARD [COMPLAINANT]?
II. DID THE DIRECTOR ERR IN CONCLUDING THAT THERE SHOULD BE NO PROPORTIONALITY BETWEEN THE RESULT ACHIEVED FOR [COMPLAINANT] AND THE COMPENSATION AWARDED [COMPLAINANT'S] COUNSEL?
III. DID THE DIRECTOR ERR BY INCREASING THE HOURLY RATE OF [COMPLAINANT'S] ATTORNEYS, PETER VAN SCHAICK AND LOUIS S. RAVESON, TO $350 AND $300 AN HOUR, RESPECTIVELY?
IV. DID THE DIRECTOR IMPROPERLY INCLUDE THE FEES PREVIOUSLY PAID TO PER DIEM ATTORNEYS IN THE LODESTAR?
V. DID THE DIRECTOR ERR BY INCLUDING JEFFREY'S DUPLICATIVE HOURS IN THE LODESTAR?
VI. DID THE DIRECTOR ERR BY ADDING A POSITIVE MULTIPLIER?
VII. DID THE COURT ERR IN RELYING UPON THE CONCLUSIONS OF ANDREW DWYER, ESQ. IN FASHIONING A FEE AWARD?
On his appeal, also challenging the counsel fee award, as well as the reduction in emotional distress damages, complainant raises the following issues:
I. DID THE DIRECTOR ERR BY REFUSING TO RECONSIDER HIS REDUCTION OF THE EMOTIONAL DISTRESS AWARD?
II. DID THE DIRECTOR ERR BY NOT AWARDING FEES FOR THE LEGAL SERVICES OF ABRAHAM, LONDON AND JEFFREY BASED ON THEIR CURRENT MARKET RATES?
III. DID THE DIRECTOR ERR BY AWARDING [COMPLAINANT] ONLY A 10% MULTIPLIER FOR RISK AND THE PUBLIC INTEREST?
IV. DID THE DIRECTOR ERR BY EXCLUDING THE COST OF PROVING THE ESSENTIAL DUTIES?
V. DID THE DIRECTOR ERR BY EXCLUDING TIME ON THE PARTIAL SUMMARY JUDGMENT MOTION?
VI. DID THE DIRECTOR ERR BY EXCLUDING HOURS FOR VAGUENESS?
VII. DID THE DIRECTOR ERR IN REDUCING THE HOURLY RATE FOR WORK ON THE FEE APPLICATION?
We address these issues in the following three sections.
As a threshold matter, we note that our review of an agency determination is circumscribed. Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992). Thus, we "will not upset the determination of an administrative agency absent a showing it was arbitrary, capricious or unreasonable, lacked fair support in the evidence, or violated legislative policies." Univ. of Med. & Dentistry v. Grant, 343 N.J. Super. 162, 168 (App. Div. 2001).
We next review some basic principles of employment discrimination law. N.J.S.A. 10:5-4.1, in effect at the time of complainant's demotion,*fn3 provided in part that:
All of the provisions of the act to which this act is a supplement shall be construed to prohibit any unlawful discrimination against any person because such person is or has been at any time handicapped or any unlawful unemployment practice against such person, unless the nature and extent of the handicap reasonably precludes the performance of the particular employment.
The Supreme Court in Jansen v. Food Circus Supermarkets, Inc., 110 N.J. 363 (1988), discussed the burdens to be borne by the employee and the employer in a disability discrimination case:
In a handicap discrimination case, the employee, as part of his or her prima facie case, has the initial burden of proving that he or she can do the job. The employer in such a case often admits the disparate treatment, but claims that it was justified. In effect, the employer asserts an affirmative defense, for which the burden of proof, like that for affirmative defenses generally, is borne by the party asserting it. When the employer admits that he has discriminated against the employee because of the employee's handicap, fairness suggests that the employer bear the burden of persuasion that the nature and extent of the handicap reasonably precludes the performance of the particular employment, thereby justifying the discrimination. Further, the employer, who is in control of the facts needed to determine the qualifications for a particular job, is in a better position to prove that it reasonably arrived at the conclusion that the handicap precluded employment. [S]ee N.J.A.C. 13:13-2.8 ("[t]he burden of proof is upon the employer . . . to demonstrate in each case that the exception [to liability under N.J.S.A. 10:5-4.1] . . . is based upon an objective standard supported by factual evidence . . ."). [Id. at 381 (citations and internal quotations omitted).]
As to an employer's duty to accommodate a disabled employee, the Supreme Court in Potente v. County of Hudson, 187 N.J. 103, 110-11 (2006), observed:
"The LAD does not specifically address reasonable accommodation, but our courts have uniformly held that the law nevertheless requires an employer to reasonably accommodate an employee's handicap." Tynan v. Vicinage 13 of the Superior Court of N.J., 351 N.J. Super. 385, 396 (App. Div. 2002). Administrative regulations set out the specific requirements of the reasonable accommodation process mandated by the LAD. In brief, unless it would impose an undue hardship on the operation of the business, N.J.A.C. 13:13-2.5(b) requires an employer to make a "reasonable accommodation to the limitations of an employee . . . who is a person with a disability." However, an employer is not required to take action "where it can reasonably be determined that an . . . employee, as a result of the individual's disability, cannot perform the essential function of the job even with reasonable accommodation." N.J.A.C. 13:13-2.8(a).
Thus, an employer must consider the possibility of "reasonable accommodation" before demoting a handicapped person.*fn4 Examples of reasonable accommodation include:
i. Making facilities used by employees readily accessible and usable by handicapped persons;
ii. Job restructuring, part-time or modified work schedules or leaves of absence;
iii. Acquisition or modification of equipment or devices; and
iv. Job reassignment and other similar actions.
To be sure, an employer is permitted to take adverse action against a handicapped person when the disabled employee cannot perform the "essential functions of the job" even with reasonable accommodation. N.J.A.C. 13:13-2.8(a). However, such adverse action "must be based upon an objective standard supported by factual evidence rather than on the basis of general assumptions that a particular handicap would interfere with the individual's ability to perform the duties of the job[,]" N.J.A.C. 13:13-2.8(a)(1), and must demonstrate that employment of the handicapped person in a particular position would "be hazardous to the safety or health of such individual, other employees, clients or customers." N.J.A.C. 13:13-2.8(a)(2). The burden of proving this by "factual or scientifically validated evidence[,]" ibid., is upon the employer. N.J.A.C. 13:13-2.8(a)(3).
We assess the Authority's contentions against this backdrop. First, the Authority argues that the Director acted improperly by imposing on the employer the requirement of an "interactive process" that did not exist at the time of complainant's demotion on March 4, 1992.*fn5 We find no merit in this contention.
We discussed the federal regulation in Tynan, supra, 351 N.J. Super. at 400-01 (citations omitted), where we stated:
To determine what appropriate accommodation is necessary, the employer must initiate an informal interactive process with the employee. 29 C.F.R. § 1630.2(o)(3). This process must identify the potential reasonable accommodations that could be adopted to overcome the employee's precise limitations resulting from the disability. Ibid. Once a handicapped employee has requested assistance, it is the employer who must make the reasonable effort to determine the appropriate accommodation.
To show that an employer failed to participate in the interactive process, a disabled employee must demonstrate: (1) the employer knew about the employee's disability; (2) the employee requested accommodations or assistance for her disability; (3) the employer did not make a good faith effort to assist the employee in seeking accommodations; and (4) the employee could have been reasonably accommodated but for the employer's lack of good faith.
Even assuming the federal regulation has prospective effect only, undoubtedly the Authority's failure to engage complainant is at the very least both evidential of whether the employer's decision was reasonable and relevant in determining whether the Authority met its burden of proving that no reasonable accommodation was possible to minimize the risks posed by complainant's disability. Indeed, the Court in Potente, supra, implicitly recognized the benefits of employee participation: "[p]lainly, an employee cannot refuse to cooperate with an employer's efforts to accommodate his disability and then claim failure to accommodate." 187 N.J. at 111.
In any event, the federal regulation, by requiring an interactive process, does no more than incorporate existing law in this State. In this regard, N.J.A.C. 13:13-2.5(a) (emphasis added) provides that "[e]ach individual's ability to perform a particular job must be assessed on an individual basis." Moreover, "[t]he determination as to whether an employer has failed to make reasonable accommodation will be made on a case-by-case basis." N.J.A.C. 13:13-2.5(b) (emphasis added). It is difficult to fathom how an individual assessment of whether a disabled employee could do his or her work without posing a serious threat of injury to himself or herself or other employees can be made without the input and involvement of the affected person. This is especially so here where it appears that the meetings attended only by Authority supervisory, managerial and human resource staff were little more than pro forma in nature and resulted in a pre-ordained "done deal." Particularly telling is Noxon's testimony that "it was going to be our intent, barring any serious objection from them, that we were going to return him to his original position."
Even more significant, the Director's final decision was not predicated upon the Authority's failure to engage complainant in the employment decision. On the contrary, the Director explicitly agreed with the Authority that an employer need not always include an employee in accommodation planning, but that in this case, the Authority failed to gather input from any sources, medical or otherwise, pertaining to complainant's disability and possible accommodation and, furthermore, in the process bypassed its own "fitness for duty" procedures provided under union contract. Consequently, the Director concluded that the Authority failed to meet its burden of proving that it reasonably determined that complainant's disability precluded safe performance of the essential job duties of an MP1, even with reasonable accommodation.
Lastly, contrary to the Authority's argument, the fact that complainant may not have explicitly asked for an accommodation does not prove fatal to his claim. As we noted in Tynan, supra:
It is not necessary that requests for reasonable accommodations be in writing or even use the phrase "reasonable accommodation." Taylor v. Phoenixville Sch[.] Dist[.], 184 F.3d 296, 313 (3d Cir. 1999) (quoting EEOC manual). "[A]n employer cannot expect an employee to read its mind and know that he or she must specifically say 'I want reasonable accommodation.'" Ibid. (quoting Bultemeyer v. Fort Wayne Community Sch[.], 100 F.3d 1281, 128 (7th Cir. 1996)). [351 N.J. Super. at 400 (fourth alteration in original).]
Here, such a request may reasonably be inferred from the evidence. Complainant became upset when Crilley observed him having difficulty shoveling Silvex. When Crilley attempted to calm complainant by telling him "to not worry about it, just go out and do the job the best he could[,]" complainant expressed fear that he would be demoted to his former utility position. According to Crilley, complainant "was very upset." Indeed, after bidding for the MP1 position again in February 1993 and receiving a denial letter, complainant telephoned Noxon "begging" for a second chance, and asking Noxon to personally observe his work habits to determine whether he was capable of doing the job. Noxon described complainant as "very distraught" during the telephone conversation. We, therefore, conclude that complainant's actions make clear his desire for accommodation of his disability. Jones v. United Parcel Service, 214 F.3d 402, 408 (3d Cir. 2000). In sum, we conclude that the Authority's failure to engage in an "interactive process" with complainant, although clearly not dispositive in this case, nevertheless was properly considered in determining the reasonableness of the Authority's employment actions.
The Authority next contends the Director erred in finding complainant could perform the essential functions of the MP1 position with reasonable accommodation. The Authority argues that it "acted reasonably and lawfully, . . . was not obligated to create a new job for [complainant]" and, "there is no evidence in the record that certain simple safety provisions would have been sufficient to accommodate [complainant] here." We disagree, as there is substantial evidence in the record to support the Director's findings.
First, there is no dispute that Crilley attempted to accommodate his crew by assigning jobs, where possible, according to individual abilities and preferences. There is also no question that some jobs were continuous and on-going such as grass cutting in the summer, weed-whacking and litter all year round.
The evidence demonstrates that complainant, who had a CDL license, was capable of driving many different kinds of trucks, including those with stick-shifts, and that he could have easily driven the cone-out truck or the safety vehicles that followed the truck. Complainant also could have operated riding and push lawn mowers as well as nylon-cord weed whackers without difficulty, except perhaps on the steepest grades.
The evidence also reasonably permits the finding that complainant could have performed litter operations with minimal safety precautions, such as working away from the immediate flow of traffic. He could have also driven snow removal equipment, as he previously had done for the Township of Wayne. To the extent that MP1 personnel perform janitorial duties, complainant could have easily done them, since he successfully completed these tasks as a utility person. Moreover, complainant could have taken care of tools and equipment in the yard. Finally, the evidence demonstrates that complainant could safely navigate around live traffic lanes, as he presently does as a toll collector, where he jockeys heavy bags of coins and pushes forklifts in all weather conditions around toll plazas.
Lastly, the Authority contends that the Director improperly rejected its determination that complainant could not perform the functions of his position without posing a safety, health and welfare risk to himself and others. Once again, we disagree.
As the Court in Jansen, supra, noted with respect to another disability, "[t]he appropriate test is not whether the employee suffers from epilepsy or whether he or she may experience a seizure on the job, but whether the continued employment of the employee in his or her present position poses a reasonable probability of substantial harm." ll0 N.J. at 374-75. The Court further identified the means by which an employer undertakes to "independently reach an objectively reasonable decision about . . . the probability that the employee will cause harm to himself or other employees." Id. at 379. Thus,
[i]n arriving at its decision, the employer should review not only the report of its medical experts, but also relevant records such as the employee's work and medical histories. . . . In an appropriate case, an employer might reasonably be expected to communicate with its expert about the meaning of the report. [Id. at 379-80.]
In Greenwood, supra, the New Jersey Police Training Commission dismissed from training a sheriff's officer candidate, who had impaired vision in his right eye. 127 N.J. at 504-05. In reversing, the Court held: the record reveals that Greenwood's eye impairment did not interfere with his ability to pursue a variety of physical activities, including those mandated by the program. The uncontradicted evidence in the record indicates that he had performed successfully during his six-week stay at the Academy. Nor was there substantial evidence indicating that Greenwood's impairment will expose him to greater risk of injury than that confronting any other trainee, or that his participation would create a risk of injury to others. Although Dr. Lanciano testified that Greenwood might be at greater risk of injury, he offered no explanation of the connection between any enhanced risk and Greenwood's physical limitation, and offered no objective medical evidence in support of his opinion. Thus, we find no basis in the record to support a determination that Greenwood's impaired vision in his right eye will affect his ability to complete the training program or increase his risk of injury. Neither did his visual limitation affect his ability to perform as a temporary sheriff's officer. [Id. at 514.]
Thus, the appropriate inquiry here is not whether complainant suffers from cerebral palsy or whether he fell or stumbled on the job, but whether his continued employment as an MP1 posed a reasonable probability of substantial harm. Relying only upon anecdotal evidence, without any supporting expert proof, and without considering input from either complainant or any medical or accommodation expert, the Authority blanketly and summarily concluded that complainant was a danger to himself or others. Yet there was ample proof to the contrary, including, most notably, that complainant was able to safely operate vehicles and various pieces of equipment and actually safely functioned in proximity to live traffic lanes in his capacity as both an Authority toll collector and, before that, a utility person. Moreover, as already noted, the Authority failed to consider relatively simple and inexpensive accommodations that could have mitigated any safety concern.
For all these reasons, therefore, we conclude that the Director's findings of disability discrimination and failure to accommodate are supported by substantial credible evidence in the record.
On his appeal, complainant contends the Director erred in denying his motion to reconsider the emotional distress damage award in light of an interim statutory amendment making clear that such damages are recoverable to the same extent available in common law tort actions. We disagree.
Briefly, by way of background, in excepting to the ALJ's recommended award of $25,000 in emotional distress damages, complainant argued it was insufficient and should be increased to $50,000. In its exceptions, the Authority argued just the opposite, namely that the award was excessive in light of court-imposed limitations "on such damages as ancillary, rather than primary relief in administrative LAD actions." In reducing the award to $15,000, the Director noted that complainant "suffered the loss of position he held for only several weeks and retained his employment," and further that $25,000 had been awarded only in cases "where the complainant suffered exceptionally egregious emotional distress[,]" which was simply not the case here.
Following the Director's December 27, 2001 decision, N.J.S.A. 10:5-17 was amended by L. 2003, c. 180, § 16 to provide that "[i]n addition to any other remedies provided by P.L. 1945, c. 169 (C. 10:5-1 et seq.), a prevailing complainant may recover damages to compensate for emotional distress caused by the activities found to be in violation of P.L. 1945, c. 169 (C. 10:5-1 et seq.) to the same extent as is available in common law tort actions." Presumably based exclusively on this amendment, on July 8, 2005, complainant moved for reconsideration of the Director's $15,000 award of emotional distress damages, requesting $100,000 instead. The motion was denied as untimely since it was filed over three-and-one-half years after the Director's initial decision reducing the emotional distress damage award, and one-and-one-half years after enactment of the statutory amendment, effective January 1, 2004.
Initially, we note that N.J.A.C. 13:4-14.1, in effect at the time of complainant's motion, provided, in part, that "[a]ny party may, within 30 days after the service of a finding of probable cause or no probable cause or other final order of the Director, file a motion for reconsideration." N.J.A.C. 13:4-14.2(a), also in effect at the time of the motion, provided in part, that "[a]ny party may, within 180 days of the service of a final order of the Director, file a motion to reopen the record in a proceeding." That provision empowered the Director to vacate or modify the challenged order, reopen the record or grant a hearing, upon a showing, among other things, of "[a]ny other reason consistent with the public policy of the Law Against Discrimination and in the interest of justice."
Regardless of whether the December 27, 2001 determination of the Director was "final," or simply interlocutory in view of the Director's later August 30, 2005 counsel fee determination, it is nevertheless clear that "[a]dministrative agencies have the inherent power to reconsider and redetermine prior decisions in appropriate circumstances. Absent legislative restrictions, the agency's power to reopen and modify prior decisions is limited by considerations of fairness and reasonableness." In re Hotel & Rest. Employees & Bartenders Int'l Union Local 54, 203 N.J. Super. 297, 340 (App. Div.) (citations omitted), certif. denied, 102 N.J. 352 (1985), cert. denied, 475 U.S. 1085, 106 S.Ct. 1467, 89 L.Ed. 2d 723 (1986).
We find no abuse of discretion in the denial of complainant's motion for reconsideration as untimely. After all, complainant's motion was filed three years after the Director's December 27, 2001 decision dispositively fixing the amount of complainant's emotional distress damages at $15,000. Moreover, the motion, based on a claimed change in the law, was filed over one-and-one-half years after the statutory amendment. And, as we noted in L.W. v. Toms River Regional Schools Board of Education, 381 N.J. Super. 465 (App. Div. 2005), aff'd and modified, 189 N.J. 381 (2007), the 2003 LAD amendment did no more than simply "'clarify' that complainants in proceedings before the Division could recover emotional distress damages to the same extent as complainants in the Superior Court." 381 N.J. Super. at 499 (citing Sponsor's Statement to Assembly Bill No. 3774, at 32 (June 12, 2003)). As we found in L.W., where we upheld the Director's award of $50,000 in emotional distress damages to a student-victim of peer harassment, ibid., there is nothing in the record to indicate that the Director's $15,000 award was inconsistent with the governing standard in the amended statute, even if found to apply retroactively to conduct occurring fourteen years earlier. For those reasons, then, we find no error in the denial of complainant's motion for reconsideration.
Both parties raise numerous challenges to the counsel fee award. We have reviewed the record in light of the submissions and arguments of counsel and find that none of the issues raised by complainant in this regard is of sufficient merit to warrant discussion in a written opinion, R. 2:11-3(e)(1)(E), save for two, namely the claims of error in adding only a 10% multiplier for risk and the public interest, and in failing to award fees for the legal services of Abraham, London and Jeffrey based on their current market rates. We also find the issues raised by the Authority as to counsel fees to be without sufficient merit to address in a written opinion, R. 2:11-3(e)(1)(E), with the exception of the claims that the Director erred: (1) in including the fees previously paid to the per diem attorneys in the lodestar; (2) in concluding that there should be no proportionality between the result achieved for complainant and the compensation awarded his counsel; and (3) by not considering the Authority's status as a public entity. We address these issues in inverse order, but first we provide some background and review basic principles of law governing attorneys' fees in LAD matters.
The June 15, 1992, retainer agreement between complainant and Peter van Schaick provided in relevant part:
I offered to represent you at an hourly rate of $195 per hour plus 10% of any recovery, but you agreed instead to the following contingent fee agreement. You are unable to pay a retainer. If I am unsuccessful in your case, you will have no obligation to pay any additional attorney's fees.
If I obtain your maintenance job back, you will pay me an additional $5,000, or twice my hourly rate for the time I actually spend on your case. If I recover money for you, you will pay me 33% of the money recovered, or twice my hourly rate for the time I spend on your case.
If you choose to drop your case against my advice, you agree to pay me my standard hourly fee owing at that time. If you choose to continue your case against my advice, you will pay me at my full hourly rate from that time forward, and at the end of the case, win or lose, you will pay me what I would have been paid if you had followed my advice.
Once the matter proceeded to trial, however, the agreement was modified to provide that complainant "would pay costs, as he could, . . . [van Schaick] would take attorney's fees as awarded, and [complainant] would take damages as awarded."
Seeking "to leverage their trial skills" with his knowledge as an expert lawyer in handicap discrimination cases, van Schaick retained Susan Abraham as lead attorney, and Diana Jeffrey and Louis Raveson, Abraham's husband, to assist. Ross London was retained to replace Abraham at the end of 1995, and Jeffrey Fogel was retained at a later date. Van Schaick contracted to pay Abraham and London on a per diem rate of $60 an hour, and Jeffrey at $25 an hour. Van Schaick also contracted to pay Fogel at an unspecified hourly rate and Raveson was paid $120 an hour to prepare a narrative summary as well as a contingent fee for legal work to be performed.
Following the Director's finding of disability discrimination, complainant sought the following fees for each of his attorneys: van Schaick and Fogel, $350 an hour; Raveson, $300 an hour; London, $275 an hour; Abraham, $250 an hour; and for paralegal work performed by Jeffrey and by van Schaick (organizing files), $75 and $100 an hour, respectively. Complainant sought these rates for a total of 27,623 hours expended by his attorneys in this matter, broken down as follows: van Schaick (433 hours between 6/10/92 and 9/25/02 and 28.3 hours between 10/22/02 and 10/29/03); Abraham (1007.9 hours); London (668.1 hours); Jeffrey (110.2 hours); Raveson (64.6 hours); Fogel (93.7 hours between 10/5/00 and 9/26/02; 63.1 hours between 10/22/02 and 8/28/03; 163.4 hours between 9/3/03 and 10/29/04; 65.9 hours between 3/17/05 and 5/20/05, and 20.5 hours between 6/2/05 and 7/6/05); and van Schaick paralegal hours (43.6 hours between 8/16/00 and 11/27/00).
After finding that New Jersey's fee shifting statutes do not require proportionality between the result achieved and the compensation ultimately awarded, the ALJ determined appropriate market rates for complainant's attorneys*fn6 and that with respect to Abraham, London and Jeffrey, there is "no legal authority . . . whereby it would be permissible for an orchestrating attorney to now bill the work of other independently hired, contractual, paid-in-full, per diem attorneys at a rate higher than they themselves negotiated, charged and were paid for." After reducing the number of claimed hours for various reasons, and enhancing the fee by a 25% lodestar multiplier, the ALJ awarded: $116,645.11 for costs (including per diem legal services performed by Abraham, London and Jeffrey); $95,030 for nonenhanceable fee application efforts of Fogel and van Schaick; $134,715 in lodestar amounts attributable to Raveson, Fogel and van Schaick, and a 25% enhancement of $33,678.75, totaling $380,068.86.
On review, the Director agreed that proportionality was not required and further that the Authority's status as a public entity should not be considered in determining the amount of fees to be awarded. The Director, however, found that the ALJ erred in designating the per diem hours of Abraham, London and Jeffrey as costs. The Director, therefore, concluded that the amounts actually paid them, plus interest should be included in the lodestar, and further reduced the 25% lodestar enhancement to 10%. After making other adjustments in terms of both rates and hours allowed, the Director awarded a total of $456,082.22 comprised of: $25,894.66 in costs; $70,225 for non-enhanceable fee application efforts of Fogel and van Schaick; $16,037.50 for non-enhanceable exceptions/reply of Fogel and van Schaick; a lodestar amount of $312,659.15; and a 10% enhancement of $31,265.91.
The parties' conflicting challenges to the counsel fee award are governed by the following principles of law.
"In any action or proceeding brought under [the LAD], the prevailing party may be awarded a reasonable attorney's fee as part of the cost . . . ." N.J.S.A. 10:5-27.1. "Under the LAD and other state fee-shifting statutes, the first step in the fee-setting process is to determine the 'lodestar': the number of hours reasonably expended multiplied by a reasonable hourly rate." Rendine v. Pantzer, 141 N.J. 292, 334-35 (1995).
Determining the "lodestar" is not a mechanical function. Thus, the trial court must "evaluate carefully and critically the aggregate hours and specific hourly rates advanced by counsel for the prevailing party to support the fee application." Id. at 335. "[N]o compensation is due for non productive time. For example, where three attorneys are present at a hearing when one would suffice, compensation should be denied for the excess time." Ibid. (quoting from Copeland v. Marshall, 641 F.2d 880, 891 (D.C. Cir. 1980)). Further, quoting from Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990), the Rendine Court noted at 335 (citations and internal quotes omitted):
[t]he . . . court should exclude hours that are not reasonably expended. Hours are not reasonably expended if they are excessive, redundant, or otherwise unnecessary. Further, the court can reduce the hours claimed by the number of hours spent litigating claims on which the party did not succeed and that were distinct in all respects from claims on which the party did succeed. The court also can deduct hours when the fee petition inadequately documents the hours claimed.
As to the reasonableness of the hourly rates of participating attorneys, quoting from Rode, supra, 892 F.2d at 1183, the Rendine Court noted:
Generally, a reasonable hourly rate is to be calculated according to the prevailing market rates in the relevant community.
Thus, the court should assess the experience and skill of the prevailing party's attorneys and compare their rates to the rates prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation. [Rendine, supra, 141 N.J. at 337.]
The reasonableness determination "need not be unnecessarily complex or protracted, but the trial court should satisfy itself that the assigned hourly rates are fair, realistic, and accurate, or should make appropriate adjustments." Ibid. Moreover, "[t]o take into account delay in payment, the hourly rate at which compensation is to be awarded should be based on current rates rather than those in effect when the services were performed." Ibid.
As to the effect of a contingent-fee agreement upon a counsel fee award under a fee-shifting statute, the Court in Szczepanski v. Newcomb Med. Ctr., 141 N.J. 346 (1995), explained: the reasonable counsel fee payable to the prevailing party under fee-shifting statutes is determined independently of the provisions of the fee agreement between that party and his or her counsel. The statutory-fee award may be comparable to or substantially different from the amount payable under a negotiated fee agreement. The agreement determines the fee payable by the prevailing party to counsel, and might reflect the risks inherent in the litigation, the complainant's financial resources, and the prospect that counsel will receive a significant fee in the event of a large verdict but no fee at all if the suit is unsuccessful. The statutory-fee award determines the fee payable by the unsuccessful party to the prevailing party. As our opinion in Rendine emphasizes, the focus of that determination is to ascertain what fee is reasonable, taking into account the hours expended, the lawyer's customary hourly rate, the success achieved, the risk of nonpayment, and other material factors. 141 N.J. at 345. Although relevant, the fee payable under a contingent-fee agreement may bear little relation to the reasonable fee award authorized by statute, and in no event should the amount payable under the contingent-fee agreement serve as a ceiling on the amount payable by statute.
[141 N.J. at 358-59 (emphasis added).]
Once the lodestar is established, the trial court "should consider whether to increase that fee to reflect the risk of nonpayment in all cases in which the attorney's compensation entirely or substantially is contingent on a successful outcome." Rendine, supra, 141 N.J. at 337. The Rendine Court further wrote that
[b]oth as a matter of economic reality and simple fairness, we have concluded that a counsel fee awarded under a fee-shifting statute cannot be "reasonable" unless the lodestar, calculated as if the attorney's compensation were guaranteed irrespective of result, is adjusted to reflect the actual risk that the attorney will not receive payment if the suit does not succeed.
[Id. at 338.]
The Rendine Court concluded that "contingency enhancements in fee-shifting cases ordinarily should range between five and fifty-percent of the lodestar fee, with the enhancement in typical contingency cases ranging between twenty and thirty-five percent of the lodestar." Id. at 343. Finally, fee determinations require an exercise of discretion and "will be disturbed only on the rarest occasions, and then only because of a clear abuse of discretion." Id. at 317.
The Authority first contends the Director erred in not considering its status as a public entity when determining the amount of attorneys' fees to award complainant. We disagree.
In his August 30, 2005, Findings, Determination and Order, the Director considered and denied the Authority's exception to the ALJ's ruling that its public entity status "shall not be taken into account as a vehicle to diminish or to lessen whatever attorneys' fees are ultimately awarded in this matter." In reaching this conclusion, the Director distinguished Tort Claims Act cases, where "the defendant is always a public entity or public employee, and for that reason the public entity status of the payor has implications that go to the crux of that statute[,]" from the LAD and policies underlying its fee shifting provisions.
In Potente, supra, we concluded that "pre-judgment interest is permitted under the LAD" against the County of Hudson. 187 N.J. at 112. Although the Supreme Court remanded the matter for a new trial and therefore did not have to decide the correctness of our ruling on this score, the Court nevertheless addressed the issue, citing to a 1990 amendment to N.J.S.A. 10:5-3 and reasoning:
The Legislature further finds that because of discrimination, people suffer personal hardships, and the State suffers a grievous harm. The personal hardships include: economic loss; time loss; physical and emotional stress; and in some cases severe emotional trauma, illness, homelessness or other irreparable harm resulting from the strain of employment controversies . . . . Such harms have, under the common law, given rise to legal remedies, including compensatory and punitive damages. The Legislature intends that such damages be available to all persons protected by this act and that this act shall be liberally construed in combination with other protections available under the laws of this State. [Id. at 112.]
While the defendant did not disagree that pre-judgment interest is generally available in a LAD case, Hudson County urged that "it may not be assessed against a public entity." Id. at 113. Referring to Rule 4:42-11(b), the Court distinguished the Tort Claims Act and explained:
[w]hat the rule actually says is that prejudgment interest shall be awarded against all defendants unless it is prohibited by applicable law. For example, the Tort Claims Act (TCA) states, in relevant part, that "[n]o interest shall accrue prior to the entry of judgment against a public entity or public employee." N.J.S.A. 59:9-2(a). Therefore, TCA claims are not subject to Rule 4:42-11(b). . . . A similar provision excluding pre-judgment interest, however, does not exist under the LAD. Thus, there is no bar to a prejudgment interest award under that statute. [Id. at 114.]
Hudson County contended alternatively that "the bar against pre-judgment interest in the TCA should be imported into the LAD." Ibid. The Court rejected that contention as well:
But LAD claims are not subject to the strictures of the TCA. See Fuchilla v. Layman, 109 N.J. 319, 335, [cert. denied, 488 U.S. 826, 109 S.Ct. 75, 102 L.Ed. 2d 51] (1988) (stating, "the Legislature did not intend that the [TCA] apply to discrimination claims under the [LAD]"). Indeed, this Court has allowed LAD complainants to recover punitive damages against public entities, despite the TCA's bar on such awards. Cavuoti v. N.J. Transit Corp., 161 N.J. 107, 133 (1999). Therefore, because the LAD does not itself prohibit the award of pre-judgment interest against public entities, and the TCA's bar on prejudgment interest does not apply to LAD claims, if complainant is successful on retrial, he will be entitled to that remedy. [Id. at 114-15 (second and third alterations in original).]
We see no reason to treat counsel fees any differently. Given the underlying purpose of the LAD and the fact that this statutory enactment is invested with an overarching public interest, a respondent's "public entity" status should not work to lessen what is otherwise considered fair and reasonable attorney compensation.
The Authority next contends that the Director erred in concluding that there should be no proportionality between the result achieved for complainant, i.e., $97,198, and the compensation awarded to his counsel, i.e., $456,082.22. Again, we disagree.
In rejecting the Authority's proportionality argument below, the Director, in his August 30, 2005 decision, reasoned: the magnitude of the relief obtained in relation to the relief sought is irrelevant to determining whether a litigant is a prevailing party for the purposes of a fee award under the LAD. . . . Although a prevailing party's failure to prevail on all distinct claims may justify reducing the fee award, in the present case Complainant prevailed on all of his legal claims; he merely waived one particular form of equitable remedy [reinstatement] to redress Respondent's LAD violations. In furtherance of the LAD's public interest objectives, counsel fees need not be proportional to the amount of monetary relief awarded to the prevailing party.
In Szczepanski, supra, the Court declined "to construe New Jersey's fee-shifting statutes to require proportionality between damages recovered and counsel-fee awards even if the litigation . . . vindicates no rights other than those of the complainant." 141 N.J. at 366. The Court added that an overriding public interest is also served by complainant's successful prosecution of this suit for retaliatory discharge under the LAD. Complainant's recovery of damages fulfills and vindicates the legislative purpose of preventing employers from retaliating unjustly against employees who oppose practices or acts forbidden by the LAD. The LAD's fee-shifting provision, N.J.S.A. 10:5-27.1, was intended to assure that counsel for litigants like complainant will receive reasonable compensation for services reasonably rendered to effectuate the LAD's objectives, even if the contingent fee payable based on the damages recovered did not constitute a reasonable fee for those services. [Ibid.]
To be sure, where the relief requested is disparate to the fees sought, "a trial court should carefully and closely examine the lodestar-fee request to verify that the attorney's hours were reasonably expended." Ibid. (citing Rendine, supra, 141 N.J. at 334-37). "Fee-shifting cases are not an invitation to prolix or repetitious legal maneuvering." Ibid. Thus,
[t]he trial court's responsibility to review carefully the lodestar fee request is heightened in cases in which the fee requested is disproportionate to the damages recovered. In such cases the trial court should evaluate not only the damages prospectively recoverable and actually recovered, but also the interest to be vindicated in the context of the statutory objectives, as well as any circumstances incidental to the litigation that directly or indirectly affected the extent of counsel's efforts. Based on that evaluation, if the court determines that the hours expended exceed those that competent counsel reasonably would have expended to achieve a comparable result, a trial court may exercise its discretion to exclude excessive hours from the lodestar calculation. [Id. at 366-67 (citation and internal quotes omitted).]
Accordingly, the Director did not err in rejecting the Authority's proportionality argument, but rather carefully examined complainant's lodestar request and made adjustments where appropriate.
One of those adjustments concerns fees attributable to the per diem attorneys. Both parties challenge this determination, but on different grounds. The Authority contends that the Director improperly included fees previously paid to per diem attorneys (Abraham, Jeffrey and London) in the lodestar, rather than treat them as out-of-pocket expenses. Complainant claims that the Director erred by fixing their fees at the per diem rates contracted for, and paid them, rather than at current market rates.
As to the former, the Director concluded: the ALJ erred in treating legal services provided by Abraham, London and Jeffrey . . . as "costs" and excluding them from the lodestar. Although van Schaick contracted with outside counsel to take on parts of this litigation, his periodic payments to them for hours billed are in some relevant ways similar to a law firm's disbursement of salaries to associates or paralegals. In paying the per diems while this case was pending, van Schaick bore the risk that he would not be reimbursed for those expenditures. A law firm bears a similar risk that, after paying wages to its employees for time devoted to a particular case, it may be denied a counsel fee award at the close of the case. For this reason, hours billed by associates and paralegals are included in the lodestar and are subject to enhancement to compensate for the firm's risk of non-payment. In this respect, there is no reason payments to the per diems should be treated differently from a law firm's fees for its associates or paralegals, since the same need to attract competent counsel applies to this arrangement as well.
As to the latter, the Director held:
[I]t is appropriate to set the hourly rate for each of the per diems at the actual rate paid for their work on this case, plus interest. Current rather than historical rates are normally awarded to compensate for hardships incurred due to delayed payment of counsel fees, because an attorney's expenses are not deferred while waiting for payment that will be awarded only at the close of a case. Rendine, supra, 141 N.J. at 337. However based on the specific working relationship between van Schaick and the per diems, the Director concludes that it is appropriate to employ an alternative method to compensate for the delay in this case. Based on van Schaick's peculiar staffing arrangement, awarding current rates for the per diems would provide him with a greater award than is reasonable. . . .
In the present case, van Schaick himself devoted a relatively small number of hours to this matter as compared with the per diems, and for that reason he was available to take on other cases which would provide direct payment to him during the pendency of this matter. Moreover, in a traditional law firm arrangement, the owners or partners bear the cost of dedicating the billable hours of their associates and other employees to a case in which payment must wait for a fee award. In contrast, van Schaick bore no lost opportunity cost for the work hours of the per diems, as any other fee-generating work the per diems declined would have paid them directly, rather than generating income for van Schaick. Thus his arrangement with the per diems preserved van Schaick's ability to generate income and greatly mitigated the impact of the delay in payment. Therefore, the primary justification for awarding current rates does not exist in an arrangement where a coordinating attorney contracts out a substantial portion of legal services.
That stated, van Schaick's out of pocket payments to the per diems clearly deprived him of use of his money, and it is appropriate to compensate him for that loss.
Because his payment to the per diems was a form of investment, a more appropriate vehicle for compensating for the delay in this case is to award interest on the historical rates, at the rates provided by the Rules of Court.
We agree with both determinations essentially for the reasons stated by the Director. Suffice it to say, as to the former, the lodestar amount consists of "the aggregate hours and specific hourly rates advanced by counsel for the prevailing party to support the fee application." Rendine, supra, 141 N.J. at 335. Here, it is undisputed that Abraham, London and Jeffrey functioned as attorneys on behalf of complainant, the prevailing party. Their "aggregate hours" contributed to complainant's success and no sound reason has been proffered to justify excluding them from the trial court's determination of the lodestar amounts.
As to the latter, we discern no abuse of discretion in treating contract attorneys differently than paralegals, law clerks and associates whose services are compensable at market rates rather than at cost to their law firm. It may reasonably be inferred as to the former that the rates at which these independent contract attorneys voluntarily agree to be paid for their outsourced services are prevailing rates in the market. Indeed, "[a]n attorney's usual billing rate is a good starting point for assessing reasonableness, though it is not dispositive." Potence v. Hazelton Area Sch. Dist., 357 F.3d 366, 374 (3d Cir. 2004). By parity of reasoning, there was no abuse of discretion in the Director's alternate finding of unfairness in awarding an enhanced amount for services performed at a freely negotiated lower rate.
The Authority challenges the addition of a multiplier and complainant protests its reduction from 25% to 10%. We disagree with both contentions, finding the former without merit and not deserving of further comment. R. 2:11-3(e)(1)(E).
In reducing the ALJ's recommended multiplier from 25% to 10%, and in rejecting complainant's claim for a 75% enhancement, the Director held:
After a careful review of the record, the Director concludes that [complainant] is a prevailing party under the LAD, and that this was substantially a contingency fee arrangement. . . . Accordingly, some enhancement or multiplier of the lodestar is warranted. Moreover, [complainant] correctly asserts that this case provided an advancement of the public interest in that it helped clarify standards governing an employer's duty to engage in the "interactive process" and clarified responsibilities of the employer to the employee in the context of reasonably accommodating employees with disabilities.
However, the Director finds that the risk of non-payment to [complainant's] counsel was significantly mitigated by the language in the retainer agreement . . . . The agreement allowed for the payment of fees in the event [complainant] did not accept Mr. van Schaick's advice to either proceed with or terminate litigation, depending on the circumstances. Van Schaik [sic] testified that this provision was a form of "client control" to protect him from a client forcing him to go to trial on a case that he felt should not be tried. This language significantly reduced counsel's risk of non-payment. The Director also finds that counsel mitigated his risk by contracting out substantial portions of this litigation, which dramatically reduced the time he personally invested in [complainant's] case. Accordingly, in view of the totality of the circumstances in this case, the Director finds that an enhancement or multiplier of the lodestar in the amount of ten percent is reasonable. [(internal citations omitted).]
Undoubtedly, a 10% multiplier falls at the lower end of the scale. See Rendine, supra, 141 N.J. at 334-35. Yet, although complainant did indeed prevail, the lodestar ($312,659.15) is equivalent to approximately 3.2 times complainant's damage award ($97,198). And, while the agreement eventually called for a contingent fee, the original arrangement afforded complainant's counsel significant protection. Counsel also mitigated his exposure by outsourcing the bulk of legal services to per diem counsel at contracted-for reduced rates. Lastly, while complainant advanced the argument that the Authority failed to engage in an "interactive process," the Director did not predicate his finding of discrimination on this ground and the litigation, in vindicating a purely private wrong, neither established new law nor realized a salutary public interest effect. Considering all these mitigating factors, we find the award of a 10% enhancement well within the Director's discretion.