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First Circuit Affirms Ruling That Civil Rights Plaintiff Entitled To $104,626.34 In Attorney's Fees And Costs For $7,650 Damage Verdict

Based on Massachusetts law, the First Circuit has affirmed a district court finding that a civil rights plaintiff was entitled to $104,626.34 in attorney's fees and costs when her damage award was $7,650. The Court said Massachusetts did not require that the fee award be proportional to the damage award and the case had produced two significant court rulings.

Plaintiff had brought six federal and state claims against her former employer alleging age discrimination and common law torts. Four of the claims were dismissed, voluntarily or involuntarily. Plaintiff ultimately obtained a $7,650 verdict on a state statutory discrimination claim. With respect to attorney's fees, defendant argued that plaintiff should not recover fees for claims that were dismissed. The district court agreed and initially reduced plaintiff's fee award by two thirds, arriving at a "reduced lodestar" of $44,766. It further reduced the fee award to $25,000 because plaintiff's counsel had rejected a fee award that would have given counsel a $25,000 contingent fee and plaintiff an amount in excess of the jury verdict.

Plaintiff appealed the fee award. The First Circuit reversed. It affirmed the two thirds reduction but held the district court abused its discretion in further reducing the fee award based on the rejection of the settlement offer. It remanded the case for consideration of the appropriate fees in light of the twelve Hensley factors, as well as other considerations. On remand, plaintiff filed a Rule 60(a) motion to correct the fee award. Plaintiff argued the district court should have used a different, more refined methodology than the "two thirds" reduction in analyzing the fee award. The district court granted the motion and awarded $93,945 in fees and $10,681.34 in costs without expressly addressing the Hensley factors. Defendant appealed.

Defendant raised three arguments on appeal: (1) the so-called "mandate" rule precluded the district court from granting the Rule 60(a) motion, (2) the district court erred by not enumerating and analyzing the Hensley factors, and (3) the district court abused its discretion by awarding attorney's fees disproportionate to the jury verdict.

The First Circuit said the mandate rule requires a lower court to "scrupulously and fully" carry out a higher court's order after remand. However, it does not divest the district court of its ability to correct clerical mistakes, oversights or omissions pursuant to Rule 60(a) so long as the appellate court has not expressly or implicitly ruled on the issue. The Court said nothing in its prior decision precluded the district court from conducting the review that it did.

The Hensley factors are: (1) the time and labor required, (2) the novelty and difficult of the questions, (3) the skill requisite to perform the legal services properly, (4) the preclusion of employment by the attorney due to acceptance of the case, (5) the customary fee, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys, (10) the "undesirability" of the case, (11) the nature and length of the professional relationship with the client, and (12) awards in similar cases. Hensley v. Eckerhart, 461 U.S. 424, 430 n.3 (1983). The First Circuit inferred that the district court had reconsidered the application of the factors when it incorporated by reference its prior decision that referenced eight of the factors and its statement that it saw no reason to make any further adjustments.

Finally, the Circuit Court rejected defendant's argument that the fee award must be proportional to the damages verdict. The Court said fee-shifting statutes like the Massachusetts one are designed to encourage attorneys to take these types of cases and are based on full compensation for the work performed. The Supreme Judicial Court has said such provision are intended to encourage suits that are not likely to pay for themselves, but are nonetheless desirable because they vindicate important rights. This case resulted in two significant, published court decisions. The First Circuit said disproportionality alone is not a basis to vacate a trial court's fee award.

Diaz v. Jiten Hotel Management, Inc., No. 13-1444, 2013 WL 6645585 (1st Cir. Dec. 18, 2013)

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