May 4, 2012
LOIS LEBBING, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
MIDDLESEX COUNTY CLERK'S OFFICE AND ELAINE M. FLYNN, IN HER CAPACITY AS THE MIDDLESEX COUNTY CLERK, MIDDLESEX COUNTY, THROUGH THE MIDDLESEX COUNTY BOARD OF CHOSEN FREEHOLDERS, DEFENDANTS-APPELLANTS/ CROSS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-9878-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 18, 2011
Before Judges Payne, Reisner and Simonelli.
In this matter, plaintiff Lois Lebbing claimed that defendants Middlesex County, the Middlesex County Clerk and Clerk's Office, and the Middlesex County Board of Chosen Freeholders (collectively, the County) violated the common law right of access and the Open Public Records Act (OPRA), N.J.S.A. 47:1A-1 to -13, by charging a fee for copies of public records made on both self-service photocopy machines owned by a vendor (the self-service photocopiers claim) and County-owned printers connected to the County's computer database (the computer printers claim) that exceeded the County's actual cost for the copies. Plaintiff sought a refund of all sums the County had collected in excess of its actual cost, injunctive relief, an accounting, and attorney's fees and costs.
The County appeals from that part of the September 2, 2010 Law Division order, which denied its motion to dismiss plaintiff from this matter for lack of standing and its motion for summary judgment regarding plaintiff's attorney's fee petition. The County also appeals from the January 11, 2011 order, which awarded plaintiff attorney's fees and costs. Plaintiff cross-appeals from the January 11, 2011 order as to the amount of the attorney's fee award and the denial of a stipend for herself. We affirm all orders.
These are the relevant facts. Following the filing of the complaint, plaintiff filed a motion, seeking, in part, class certification and a determination of the County's actual cost for copies made on the self-service photocopiers and the computer printers. In an April 27, 2007 order, the trial judge granted the motion, appointed plaintiff as class representative, and appointed Sander D. Friedman, Esq. and Donald M. Doherty, Jr., Esq. of the law firm of Friedman Doherty, LLC (collectively, the Law Firm) as class counsel.*fn1 The judge defined the class as "[a]ll natural and corporate persons who utilized the self-service duplicating equipment located in the Middlesex County Clerk's Office from December 12, 2000 to the present, paid $.25 for copies or print-outs and who have not been reimbursed by any other source for the copying/printing charges." The judge also ordered that the calculation of the County's actual cost for copies shall include the costs of paper, toner/ink, the self-service photocopiers, and the computer printers.
On January 31, 2008, the County filed a motion for summary judgment to dismiss the complaint or alternatively, to clarify the April 27, 2007 order as to what items should be included in the actual cost calculation. In an August 4, 2008 order, and a September 3, 2008 amended order, the judge granted the motion, in part, and dismissed the self-service photocopiers claim with prejudice. He held that a vendor owned the self-service photocopiers and charged the copying fee, not the County; the vendor leased space from the County pursuant to N.J.S.A. 40A:12-24 for its photocopiers; and the vendor paid the County $.16 per copy as rent, which was separate and distinct from the copying fee the vendor charged to the public. The judge denied the motion as to the computer printers claim, holding that there was a genuine issue of material fact as to the County's actual cost for copies made on this County-owned equipment.
The Law Firm filed a motion to amend the complaint to add MMI Abstract Co., Inc. (MMI) as co-lead plaintiff. It did so "as a prophylactic measure" in order to avoid any challenge to plaintiff's status as class representative because she was "a sporadic user of the [self-service photocopiers] . . . and may not have used the [computer] printers." MMI, on the other hand, had regularly made copies on the computer printers since 1998. In an October 24, 2008 order, the judge denied the motion, stating that he had previously granted summary judgment on the self-service photocopiers claim "on which the movant seeks to add [MMI]."
The County subsequently filed a motion to dismiss plaintiff from this matter arguing that she lacked standing because the judge had dismissed the self-service photocopiers claim, and plaintiff did not use the computer printers to make copies.*fn2 The County also sought to dismiss the complaint pursuant to Rule 4:37-2(a) or alternatively, for reconsideration of the April 27, 2007 order to limit the "look-back" period for refunds from six years to forty-five days.
Thereafter, the parties agreed to extend discovery and withdraw all pending motions without prejudice*fn3 subject to our decision in Smith v. Hudson County Register, 411 N.J. Super. 538 (App. Div. 2010) (Smith I). In seeking the judge's approval of the agreement, defense counsel represented that Smith I involved "a material issue common with this case and that could be dispositive of it, namely, whether the $.25 per page charge for self-service copies made by the public on equipment in [the] County Clerk's Office is lawful under either [OPRA] or the common law." The judge approved the agreement, and the matter was effectively stayed.
Smith I, decided on February 10, 2010, concerned three back-to-back appeals involving other common law right-to-access and OPRA class action complaints the Law Firm had filed against Hunterdon, Hudson and Sussex counties. The County participated as an amicus in Smith I, but plaintiff did not. We held that under the then-existing version of OPRA, a public entity could not lawfully charge a blanket $.25 per-page copying fee for public records if that rate exceeded its actual cost for the copy. Id. at 562-70. We found no need to address "the quantum of damages or other retroactive relief, and the various other issues and sub-issues raised[,]" including a lack of standing defense raised by defendant Sussex County. Id. at 573. Our decision was made prospective, and took effect on July 1, 2010. Id. at 572. We deconsolidated the appeals, and remanded each case to its respective trial court to address the respective plaintiffs' attorney's fees claims under N.J.S.A. 47:1A-6. Id. at 573-74.
In compliance with Smith I, the County lowered its copying fee to $.05 per page for copies made on the computer printers. Thereafter, on September 10, 2010, the Legislature amended N.J.S.A. 47:1A-5b, effective November 9, 2010, and set the public records copying fee at $.05 per page for letter-size copies, $.07 per page for legal-size copies, and no fee for electronic access, except for the cost of supplies, such as computer discs.
The County filed a summary judgment motion, arguing that Smith I precluded retroactive relief in this case. The County also argued that plaintiff was not entitled to attorney's fees and costs because she was not denied access to public records, and the $.25 per page copying fee she paid for her copies did not discourage her access.
The County also filed a motion for summary judgment to, in part, dismiss the complaint with prejudice as a matter of law or alternatively, to dismiss plaintiff for lack of standing. Plaintiff filed a cross-motion for injunctive relief and attorney's fees and costs, and reconsideration of that part of the August 4, 2008 order, which dismissed the self-service photocopiers claim.
In a July 20, 2010 written decision, Judge Stroumtsos*fn4 rejected the County's lack of standing argument, holding that Smith I did not require him to consider any defenses. The judge granted summary judgment, in part, and dismissed plaintiff's refund claim based on Smith I's prospective application.
Judge Stroumtsos denied plaintiff's cross-motion for reconsideration of that part of the August 4, 2008 order, which dismissed the self-service photocopiers claim. He held that Smith I did not affect the first judge's decision to dismiss that claim since that judge "took into account that the charge for copying was based on the charge that [the vendor] was charging and not a charge that the County was imposing that went beyond 'actual cost.'" Judge Stroumtsos nonetheless held that plaintiff was the prevailing party, and directed the Law Firm to submit an affidavit of services and time records from the other class actions "so that the [c]court can better evaluate the reasonable attorneys' fees attributable to this litigation." The judge permitted the County to file opposition, and entered the September 2, 2010 order memorializing his decision.
Plaintiff filed a petition for attorney's fees and costs, seeking a lodestar of $83,597.50, a fifty-percent fee enhancement, plus costs of $658.54, for a total award of $126,054.79. She argued that she was the prevailing party and entitled to the maximum fee enhancement due to the novelty of the case and the important public policy concerns it advanced. She also requested a stipend for herself, and suggested that $7500 might be an appropriate amount.
In opposition, the County argued that the Law Firm had already received substantial counsel fees in nine of the other class actions it had filed; the Law Firm's affidavit of services did not comply with Rule 1:6-6; the Law Firm submitted a substitute affidavit of services, which showed that its first affidavit contained materially false statements about how the Law Firm prepared the invoice in this matter; and the requested fee was unreasonable and included improper and duplicative charges. The County also argued that plaintiff was not entitled to a fee enhancement, the lodestar should be reduced because she was not denied access to public records, the County voluntarily reduced its copying fee after Smith I, and plaintiff was not entitled to a stipend. The County also objected to the Law Firm's billing invoices, and requested a hearing.
In a January 11, 2011 written decision and order, rendered without a hearing, Judge Stroumtsos awarded plaintiff attorney's fees and costs in the amount of $43,266.04, and denied her request for a stipend. This appeal and cross-appeal followed.
On appeal from the September 2, 2010 and January 11, 2011 orders, the
County argues that Judge Stroumtsos erred in denying its motions for
summary judgment because plaintiff lacked standing; holding that
plaintiff was a prevailing party under
OPRA; and awarding plaintiff attorney's fees and costs.*fn5
On cross-appeal from the January 11, 2011 order, plaintiff
challenges the amount of the fee award and the denial of a stipend.
The County again argues that plaintiff lacked standing because the first judge had dismissed the self-service photocopier claim, and plaintiff never made copies on the computer printers. This argument places form over substance, and we reject it.
Rule 4:32-1(a) provides that:
One or more members of a class may sue . . . as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
The Law Firm represented the entire class, not just plaintiff. The County does not argue that no class member used the computer printers, or that the lawsuit did not meet the requirements of Rule 4:32-1(a) to maintain class certification. Accordingly, it is immaterial whether plaintiff or some other class member represented the class in this case. The grounds for class certification continued after the dismissal of the self-service photocopiers claim.
In addition, the first judge's denial of the Law Firm's motion to amend the complaint to add MMI as co-lead plaintiff was a mistaken use of discretion. Kernan v. One Washington Park Urban Renewal Assocs., 154 N.J. 437, 456-57 (1998); R. 4:9-1. The Law Firm did not seek to add MMI as co-lead plaintiff on the self-service photocopier claim; rather, it sought to add MMI on the computer printer claim, which was not dismissed. There was no dispute that MMI had made copies on the computer printers on a daily basis for a very long period of time. Accordingly, MMI should have been added as a co-lead plaintiff in this case.
The County challenges Judge Stroumtsos's holding that plaintiff was the prevailing party under OPRA. The judge held that according to Smith I, public entities may only charge their actual cost for copies of public records, and although plaintiff was not denied access to public records, case law established that excessive fees are an improper barrier to access. The County argues that the judge erred because (1) plaintiff was not denied access to public records; rather, she made copies on the self-service photocopiers at $.25 per copy, a fee the first judge found was appropriate; (2) plaintiff received no refund; and (3) the County did not lower its copying fee as a result of this litigation. We reject these arguments.
Although a party is not denied physical access to public records, by charging an excessive copying fee, a public entity "thwart[s] a citizen's right to access public records under OPRA." Smith II, supra, 422 N.J. Super. at 396-97.*fn6 Thus, a plaintiff who was charged excessive copying fees for public records is a prevailing party under OPRA. Ibid.; see also HiggA-Rella, Inc. v. Cnty. of Essex, 141 N.J. 35, 53 (1995) (holding that any fee for access to records "must be reasonable, and cannot be used as a tool to discourage access"); Moore v. Mercer Cnty., 39 N.J. 26, 31 (1962) (holding that where a reasonable charge would nonetheless impair public access, "the public official should calculate his charge on the basis of actual costs"); Libertarian Party of Cent. New Jersey v. Murphy, 384 N.J. Super. 136, 139 (App. Div.) (noting that "[t]he imposition of a facially inordinate fee . . . places an unreasonable burden on the right of access guaranteed by OPRA"), certif. granted, remanded on other grounds, 188 N.J. 487 (2006). Plaintiff is a prevailing party under OPRA because she was charged a $.25 per-page copying fee for public records, which is excessive under N.J.S.A. 47:1A-5b.
In addition, a party is considered a prevailing party even if he or she did not obtain all the relief sought in the lawsuit. See Henderson v. Camden Cnty. Mun. Util. Auth., 176 N.J. 554, 558, 566 (2003) (awarding counsel fees even though the court did not grant the retroactive relief the plaintiff requested). "To the extent plaintiff succeeded on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit, plaintiff has obtained prevailing party status entitling it to seek an attorney fee award[.]" Porreca v. City of Millville, 419 N.J. Super. 212, 229 (App. Div. 2011) (internal citation and quotation marks omitted). The prevailing party is one that is able to "point to a resolution of the dispute [that] changes the legal relationship between itself and" the other party. Szczepanski v. Newcomb Med. Ctr., 141 N.J. 346, 355 (1995) (internal citation and quotation marks omitted); see also Mason v. City of Hoboken, 196 N.J. 51, 74 (2008) (citing New Jersey caselaw holding that "courts must look to whether a plaintiff's lawsuit acted as a catalyst that prompted defendant to take action and correct an unlawful practice"); New Jerseyans for a Death Penalty Moratorium v. New Jersey Dep't of Corr., 185 N.J. 137, 153 (2005) (acknowledging the role an award of counsel fees served to allow plaintiffs to retain competent representation, and to "even the fight" against a public entity, in order to seek redress of statutory rights).
Our Supreme Court has also emphasized that deeming the plaintiff to be a prevailing party under the catalyst theory, instead of a higher standard of victory, prevents a defendant from unilaterally complying with OPRA at the eleventh hour to avoid a court order and the resulting award of attorney's fees. Mason, supra, 196 N.J. at 75-76. A party can be considered the prevailing party under the catalyst theory if he or she can show "a factual causal nexus between plaintiff's litigation and the relief ultimately achieved" and "that the relief ultimately secured by plaintiffs had a basis in law." Id. at 76.
As in Henderson, supra, 176 N.J. at 563, plaintiff did not achieve retroactive relief in this case. However, she did achieve "some of the benefit" she sought, that is, a change in the County's copying fee policy. See Porreca, supra, 419 N.J. Super. at 229; Szczepanski, supra, 141 N.J. at 355. Further, plaintiff was a catalyst for the change and should not be deprived of attorney's fees by the County's eleventh-hour unilateral change of its copying fee policy. See Mason, supra, 196 N.J. at 75-76; New Jerseyans, supra, 185 N.J. at 153.
The County's argument that it changed its copying fee policy pursuant to Smith I, and not under pressure from this litigation, is somewhat disingenuous. The County agreed not to pursue its motions and to extend discovery pending the outcome of Smith I, with the express understanding that this would effectively stay this matter. In fact, the County admits in its merits brief that the outcome in Smith I, establishing an unfavorable precedent, determined its subsequent course of action.
Like the County, the first judge awaited the outcome of Smith I instead of proceeding independently based on existing law. The County essentially agreed to wed its fate to Smith I, filing an amicus brief and earning a reference in Smith I under the collective group of "Counties," both parties and amici. Smith I, supra, 411 N.J. Super. at 546, 551 & n.2. Had the County not asked to delay this matter and, instead, proceeded independently to litigate this case, it would have run the risk of an unfavorable independent adjudication. The County sought to avoid that risk by joining in Smith I as amicus and then changing its copying fee policy at the eleventh hour in compliance with Smith I. See Mason, supra, 196 N.J. at 75-76. The County complied with Smith I, sought dismissal of this matter under Smith I, but refused to acknowledge plaintiff as a prevailing party in this litigation, even though the County had agreed to effectively stay this matter pending the outcome in Smith I instead of prosecuting this matter independently. This is precisely the kind of unilateral action to avoid paying attorney's fees that Mason targeted in adopting the prevailing party catalyst theory under OPRA for purposes of awarding attorney's fees and costs. See, Mason, supra, 196 N.J. at 75-76.
Under the fee-shifting device in OPRA, which the court in Smith I held to be controlling authority in such cases, and because plaintiff is the prevailing party, she is entitled to, and the County must pay her, attorney's fees and costs under OPRA.
The County argues that even if plaintiff were entitled to attorney's fees under OPRA, Judge Stroumtsos should have declined an award because the Law Firm did not make its affidavit of services on personal knowledge, as required by Rule 1:6-6, and thus, its billing invoice lacked a proper foundation. In her cross-appeal, plaintiff argues that Judge Stroumtsos erred in denying a fee enhancement and stipend, and reducing the amount of attorney's fees she sought.
Judge Stroumtsos found that the Law Firm's "detailed" affidavit of services was sufficient, and resolved the fee petition without a hearing so as to avoid prolonging the litigation and increasing attorneys' fees. The judge declined to award a fee enhancement, reasoning as follows:
[B]ased on the numerous other cases that [the Law Firm has] been involved in that have produced fees for them and settlements on behalf of their clients, as well as the fact that [this] case was not one of the cases that the [Smith I] case heard on appeal (although amici briefs were submitted by the parties), the [c]court cannot grant [p]laintiff's counsel such relief. The time frame of the litigation is suggestive of the fact that this litigation . . . was not necessary to achieve the result that was achieved in [Smith I]. The entire class action litigation began with [lawsuits] filed in Camden and Burlington counties which the court notes are within the geographic area of the [Law Firm]. Those cases settled, and then [the Law Firm] turned [its] attention on eighteen other counties including [the County]. Several of those other counties settled and three counties - Hudson, Hunterdon, and Sussex -dismissed the claims, resulting in the consolidated [Smith I] appeal.
The goal of the [p]laintiff in this [c]court's opinion was to achieve a [statewide] goal of reduction in copying costs. This could have easily been achieved by litigation in only a few key venues and did not require the filing of litigation in every [c]county save one. The [Smith I] [c]court, in its decision, rendered an opinion which effectively reduced the copying costs [throughout] the [S]tate. Therefore, it can be reasonably concluded that the rate would have been changed regardless of this particular case being brought by [p]laintiff in [the County.] Therefore, neither the enhancement multiplier nor an incentive award for [p]laintiff will be awarded[.]
The judge also found that although the relief plaintiff obtained resulted from Smith I and that this litigation "was not a necessary and important factor in achieving [a reduction in copying fees]", plaintiff was nonetheless entitled to attorney's fees, with only the overall amount affected. The judge reasoned that to hold otherwise "would have a chilling effect on future litigation where a [p]laintiff determines that suit must be brought in multiple counties."
Judge Stroumtsos painstakingly analyzed and dissected the Law Firm's affidavit of services and billing invoice to establish the lodestar. He reduced the number of hours expended to reflect the reasonable number of hours for each event recorded, and excluded unnecessary billings, billings where two attorneys charged for a task that a single attorney could have performed, and "billing for time spent either reviewing work or other such task such as 'brainstorming.'" He also accepted the Law Firm's hourly billing rates. He concluded that "[t]o an extent, a great deal of the litigation in this action was unnecessary and duplicative[.]" The judge also denied plaintiff's request for a stipend, holding that she "[did] not appear to have suffered any appreciable injury and there is nothing in the record which the court deems sufficient to justify such an award."
Although plaintiff is the prevailing party, limited success calls for a limited reward. If a plaintiff has achieved "'only partial or limited success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount.'" Rendine v. Pantzer, 141 N.J. 292, 336 (1995) (quoting Hensley v. Eckerhart, 461 U.S. 424, 436, 103 S. Ct. 1933, 1941, 76 L. Ed. 2d 40, 52 (1983)); see also Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 386-88 (2009); R. 4:42-9.
Further, plaintiff's status as a prevailing party might "say little about whether the expenditure of counsel's time was reasonable in relation to the success achieved." Szczepanski, supra, 141 N.J. at 355-56 (internal citation omitted). Thus, Hensley, supra, 461 U.S. at 436, 103 S. Ct. at 1941, 76 L. Ed. 2d at 52, "authorized trial courts either to 'attempt to identify specific hours . . . that should be eliminated [or] simply reduce the award to account for the limited success.'" Id. at 356.
In Szczepanski, supra, 141 N.J. at 354-56, and Rendine, supra, 141 N.J. 292, companion cases decided on the same day, the Court established a procedure for determining reasonable attorney's fees under fee-shifting statutes. See Szczepanski, supra, 141 N.J. at 354. The most important determination is the lodestar, or "the number of hours reasonably expended multiplied by a reasonable hourly rate." Id. at 354. Our Supreme Court has stated that trial courts are obligated to exclude from the lodestar calculation hours not reasonably expended, relying on City of Riverside v. Rivera, 477 U.S. 561, 106 S. Ct. 2686, 91 L. Ed. 2d 466 (1986), in which the Supreme Court of the United States held that the federal fee-shifting statutes do not require proportionality between counsel fees and damage recoveries, although the latter is a material factor in determining a reasonable counsel fee. Ibid. Our Supreme Court further found that in some cases a trial court may exclude hours from the calculation if in its view the expended hours exceed "those that competent counsel reasonably would have expended to achieve a comparable result," relative to "the damages prospectively recoverable, the interests to be vindicated, and the underlying statutory objectives[.]" Rendine, supra, 141 N.J. at 336.
The additional inquiry about the fee enhancement is related to the trial court's analysis of reasonable fees. The following standard applies to an enhancement:
[T]he trial court, after having carefully established the amount of the lodestar fee, 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. . . . Both as a matter of economic reality and simple fairness . . . 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 337-38.]
Further, "mindful of the Supreme Court's desire expressed in Rendine," for a litigation-minimizing approach to enhancement problems, we review a fee enhancement determination under an abuse of discretion standard. Gallo v. Salesian Soc'y, 290 N.J. Super. 616, 659 (App. Div. 1996). "Our expectation is that future fee determinations by trial courts will be disturbed only on the rarest occasions, and then only because of a clear abuse of discretion." Id. at 659-60 (internal quotation omitted); see also Litton, supra, 200 N.J. at 389 ("Th[e enhancement] analysis is necessarily fact-sensitive as there is no precise test or mathematical calculation for that adjustment. The trial court is in the best position to weigh the competing arguments in making any fee adjustment to ensure that the counsel fee award is reasonable"). The above factors establish a strong presumption against a fee enhancement and "[n]owhere does the Court [in Rendine, supra, 141 N.J. 292] say that a fee enhancement multiplier must be awarded in every case." Gallo, supra, 290 N.J. Super. at 660.
Judge Stroumtsos analyzed the fee petition in great detail and arrived at a reasonable attorney's fee award. See Scullion v. State Farm Ins. Co., 345 N.J. Super. 431, 439 (App. Div. 2001). Balancing the need for some compensation for the prevailing party's counsel working on a contingency basis,*fn7 under New Jerseyans, supra, 185 N.J. at 153; Mason, supra, 196 N.J. at 75-76, against the reality that plaintiff did not achieve the desired result through the present case alone, Szczepanski, supra, 141 N.J. at 335, coupled with the lack of evidence that plaintiff suffered any personal difficulties or expended any resources or significant time on this case, we conclude that Judge Stroumtsos properly declined to award a fee enhancement and stipend. We affirm the attorney's fee award substantially for the reasons set forth in the judge's well-reasoned, comprehensive January 11, 2011 written decision. See Gallo, supra, 290 N.J. Super. at 659-60; Litton, supra, 200 N.J. at 389.