The opinion of the court was delivered by: Marshall, District Judge.
In this class action brought under 42 U.S.C. § 1983,
plaintiffs challenged the defendants' method of processing
applications under the Illinois General Assistance Program.
Plaintiffs, who are Chicago resident applicants for benefits
under the program, alleged that defendant Illinois Department
of Public Aid (IDPA) imposed unreasonable delays in processing
applications, contrary to plaintiffs' Fourteenth Amendment due
process and equal protection rights. After extensive pre-trial
discovery and motion practice, the parties entered into a
consent declaratory judgment, pursuant to which the defendants
have agreed to process and dispose of all general assistance
applications within forty-five days of application, and in
cases in which the applicants are entitled to benefits, to
distribute the benefits to the applicants within that same
forty-five day period. Thereafter plaintiffs submitted a motion
for attorney's fees pursuant to the Civil Rights Attorney's
Fees Awards Act of 1976, 42 U.S.C. § 1988. This motion has been
extensively briefed and is now ready for decision.
The parties' original briefs were filed prior to the Supreme
Court's decision in Hutto v. Finney, 437 U.S. 678, 98 S.Ct.
2565, 57 L.Ed.2d 522 (1978), and a crucial argument in
defendants' opposition was based on the Eleventh Amendment.
When Finney firmly established that the Eleventh Amendment is
not a bar to assessing attorney's fees against a state or one
of its agencies, the defendants here took another tack in
opposition to plaintiffs' motion. Defendants first contend that
plaintiffs did not substantially prevail. Alternatively they
argue that even if attorney's fees are awarded, the plaintiffs'
attorneys, who are employed by the Legal Assistance Foundation
(LAF), a public interest legal aid organization, are not
entitled to the same fees as a privately employed attorney.
Finally, defendants challenge some of the hours charged by
plaintiff's attorneys as duplicative.
In a hearing relating to attorney's fees held on September
15, 1978, we orally ruled that plaintiffs have substantially
prevailed and are thus entitled to fees under § 1988, and that
plaintiffs' attorneys are entitled to fees for all of the hours
charged. We tentatively ruled, however, that when a plaintiff
is represented by a public interest legal services agency, the
defendant is obliged only to recompense the provider of the
legal services for the cost of providing the services. We
indicated that this cost was to be calculated by dividing the
total budget of LAF by the product of the number of attorneys
multiplied by a reasonable number of
hours per year.*fn1 Although we announced that we would
calculate fees in this manner, the only order entered on
September 15, 1978 was one directing LAF to submit data
relating to its budget.
Upon further reflection we have reconsidered our position on
the issue of the proper hourly attorney's fee for legal aid
organizations. We see no need, however, to reconsider or
discuss any of the other issues defendants have raised in
their response to plaintiff's motion. Accordingly, our oral
ruling of September 15, 1978 that plaintiffs substantially
prevailed and that all of the 308 hours charged by plaintiffs'
attorneys are reasonable will stand. We now turn to the
question of the proper hourly rate for those hours.
Defendants do not contend that public interest legal aid
attorneys are not entitled to any fees. Rather, they contend
that a fee commensurate with the customary fees earned by
private counsel would provide a windfall to plaintiffs'
attorneys here, given the lower salaries said to be paid to
LAF attorneys and LAF's nonprofit status. Moreover, defendants
argue that a lesser rate will not have a detrimental effect on
the attorney's fee statute's purpose of encouraging
enforcement of the civil rights acts. Thus defendants urge
that legal aid attorneys should receive an hourly attorney's
fee measured by their salaries. Alternatively, they contend
that the Criminal Justice Act's fee scale for appointed
attorneys, which allows for $20 per hour for out of court time
and $30 per hour for in court time, is a fair measure here.
See 18 U.S.C. § 3006A(d)(1). Finally defendants argue that the
amount of fees should be moderated because the funds will come
from the state treasury.
Plaintiffs contend that the legislative history to § 1988
indicates that no distinction should be made between private
attorneys and attorneys employed by public interest legal aid
organizations. Moreover, plaintiffs attack the basis for such a
distinction, arguing that it would frustrate the purpose of the
Act by unduly restricting the services afforded to civil rights
At the outset we emphasize that the only dispute remaining
is the amount of fees, because defendants do not contend that
legal aid attorneys for a prevailing party are not entitled to
any fees. Most courts applying statutory grants of fees have
held that legal aid organizations are entitled to fees.
See, e.g. Hairston v. R & R Apartments, 510 F.2d 1090, 1093
(7th Cir. 1975); EEOC v. Enterprise Assoc. Steamfitters Local
No. 638 of U.A., 542 F.2d 579 (2d Cir. 1976), cert. denied,
430 U.S. 911, 97 S.Ct. 1186, 51 L.Ed.2d 588 (1977). The legislative
history to § 1988 also indicates that such organizations are
entitled to fees.*fn2 See also, Note, Awards of Attorney's
Fees to Legal Aid Offices, 87 Harv.L.Rev. 411 (1973). We must
also emphasize that § 1988, which states only that "the court,
in its discretion, may allow the prevailing party . . ., a
reasonable attorney's fee as part of the costs," does not
indicate how to determine what amount is reasonable. The
statute leaves that determination to our discretion. But
because a prevailing party should ordinarily receive fees
unless "special circumstances would render an award unjust,"
Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402, 88
S.Ct. 964, 966, 19 L.Ed.2d 1263 (1968),*fn3 an award
of fees that is so low as to frustrate the purpose of the act
would constitute an abuse of this discretion. See Berger, Court
Awarded Attorney's Fees: What Is "Reasonable"?, 126 U.Pa.L.Rev.
281, 306 (1977).
Defendants' argument that LAF is entitled to fees at a
reduced rate is premised on the fact that LAF may not and,
accordingly, does not attempt to earn a profit. But this
premise does not recognize that a court assessing attorney's
fees may approach the determination of amount from two
possible perspectives. From one perspective, which defendants
presume that we should use, a court decides what fee is
necessary to adequately compensate the attorney for his or her
time. Adequate compensation would include a reasonable profit.
There is another approach, however, pursuant to which a court
attempts to calculate the "value" of the attorney's services.
Value of service is not rigidly tied to profits but is figured
with an eye toward what the services are worth to the client
and what prices those services would bring in the marketplace.
Although these two approaches are different, a court will come
to the same result regardless of the approach it uses, so long
as the fee award is based on the hourly rate of the
plaintiff's attorney. The hourly rate, established by market
forces, will reflect both the value of service and a
When, however, the fee is to go to a nonprofit legal
services organization, no hourly rate guides our path, and the
profit motive is by definition absent, or at least reduced to
the extent of an award of fees above the organization's cost
of doing business. But the value of the services is not
equivalently diminished. Thus to determine what hourly rate is
appropriate here, we must first inquire whether Congress
intended an award of fees to reflect both the value of the
services and a reasonable profit. Then, after determining
whether the value of LAF's services is equivalent to that of
a private practitioner, we will consider whether the absence
of a profit motive justifies a reduction of fees to LAF.
The statute's purpose is clear from its legislative history.
Because civil rights laws depend heavily on private
enforcement, "fee awards have proved an essential remedy if
citizens are to have a meaningful opportunity to vindicate the
important Congressional policies which these laws contain."
S.Rep.No. 94-1011, 1976 U.S.Code Cong. & Admin.News at 5910.
Thus the attorney's fee statute was designed "to promote the
enforcement of the Federal civil rights acts, as Congress
intended, and to achieve uniformity in those statutes and
justice for all citizens." H.R.Rep.No. 94-1558, 94th Cong., 2d
Sess. 1, 19 (1976). See also Remarks of Senator Tunney, 122
Cong.Rec. 33313 (Sept. 29, 1976); Remarks of Congresswoman
Holtzman, 122 Cong.Rec. 35127 (Oct. 1, 1976) ("The act will
help to assure that all Americans can have access to the courts
to obtain the protections against discrimination contained in
our laws and the Constitution."). Congress intended to
facilitate the effective implementation of civil rights laws by
all citizens, and to prevent those laws from becoming "mere
hollow pronouncements which the average citizen cannot
enforce." S.Rep.No. 94-1011, 1976 U.S.Code Cong. & Admin.News
at p. 5913. In addition, Congress recognized the potential
complexity of civil rights cases. The legislative history
It is intended that the amount of fees awarded
under S. 2278 [42 U.S.C. § 1988] be governed by the
same standards which prevail in other types of
equally complex federal litigation, such as
antitrust cases and not be reduced because the
rights involved may be nonpecuniary in nature.