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May 16, 1983


The opinion of the court was delivered by: Shadur, District Judge.


Following the trial of these bitterly-contested Age Discrimination in Employment ("ADEA") lawsuits, in which plaintiffs obtained a jury verdict of some $9 million — doubled to about $18 million because the jury found United Air Lines, Inc. ("United") had wilfully violated ADEA — individual plaintiffs' counsel have moved for an award of fees, costs and expenses and plaintiff-intervenor Equal Employment Opportunity Commission ("EEOC") has moved for an award of costs. For the reasons stated in this memorandum opinion and order fees, costs and expenses are awarded, but not in the full amount sought.

Attorneys' Fees

There is no dispute as to the $895,472.98 "lodestar" figure covering fees for individual plaintiffs' counsel, for United has contested neither the time they spent nor the various hourly rates they request.*fn1 That limits the area of controversy (so far as fees are concerned) to whether any premium should be applied to the time spent by plaintiffs' lead co-counsel, Raymond C. Fay, Esq. ("Fay") and Alan M. Serwer, Esq. ("Serwer"). At lodestar figures their time charges represent some $635,000, more than 70% of the total time charges.*fn2 Plaintiffs' counsel ask for a 2.5 multiplier for the Fay-Serwer time, while United says no multiplier at all is appropriate.

One preliminary issue should be gotten out of the way first. Despite their agreement referred to in the preceding paragraph as to the proper hourly rates to be used in arriving at the lodestar figure, United's counsel have effectively tried to back into disputing the principal rate: They argue that a multiplier is inappropriate because the agreed-upon $125 hourly rate for Fay and Serwer already represents a "multiplier" of the $75 per hour rate that was originally referred to in the 1978 fee agreement between the first few plaintiffs and their counsel.*fn3 Because the reasonable hourly rate — mutually agreed upon as $125 — is the "convenient starting point,"*fn4 and not the end of the line, in the analysis whether a multiplier is appropriate, this Court will pause briefly to deal with United's invalid argument.*fn5

Most courts (including our own Court of Appeals) considering fee awards in related contexts, usually under 42 U.S.C. § 1988, have consistently made plain that the proper test is not what a plaintiff's lawyer has charged in fact, but rather what the reasonable value of the lawyer's services is. That may arguably be a contradiction in free market terms, but it is one the courts have accepted. Losing civil rights defendants have not been successful in challenging awards to lawyers acting pro bono, or salaried lawyers, on the ground plaintiffs would not in fact have had to pay the amount of fees actually awarded. See, e.g., Gautreaux v. Chicago Housing Authority, 690 F.2d 601, 612-13 (7th Cir. 1982), petition for cert. filed, 51 U.S.L.W. 3583 (U.S. Jan. 31, 1983) (No. 82-1289). Were the rule otherwise, the civil rights violator would stand to obtain a windfall from the fact the plaintiff had to resort to a Legal Assistance Foundation lawyer or an ACLU volunteer lawyer. In another variant of the same concept, our Court of Appeals has recently rejected both the "bright prospects" standard and the notion that a contingent fee contract should serve "as an automatic ceiling on the amount of a [Section 1983 case] award." Sanchez v. Schwartz, 688 F.2d 503, 505 (7th Cir. 1982), followed in Lenard v. Argento, 699 F.2d 874, 900 (7th Cir. 1983), petition for cert. filed, 51 U.S.L.W. 3775 (U.S. Apr. 14, 1983) (No. 82-1692).*fn6

Because the issue has been confronted by our Court of Appeals only inferentially, and because the matter is one of such wide-ranging applicability, this Court will risk laboring the subject a bit. In sum the operative principles line up this way:

1. Our search is for "a reasonable attorney's fee."

    2. What is "reasonable" is not limited by what the
  individual lawyer involved has contracted to charge
  in the case in which fees are being awarded. Sanchez;
    3. What is "reasonable" is also not limited by what
  the individual lawyer charges in his or her practice
  generally. Gautreaux.

Accordingly one indicium of the "reasonable" fee may be the price the lawyer places on his or her services in this or other situations, but the cases have rejected that as the conclusive factor in ascertaining the market rate.

Consequently the agreed-upon $125 — realistic in terms of the current market — is indeed Chrapliwy's "starting point" for determining whether a premium is appropriate and, if so, how much. With all deference our Court of Appeals does not provide much assistance in that latter respect. Two things are plain from its opinions:

    1. It does not like multipliers. It seldom approves
  them and, when it does, it usually cuts back on what
  has been allowed by the District Court that lived
  with the litigation. See its opinion of a month ago,
  In re Congressional Districts Reapportionment Cases,
  704 F.2d 380 (7th Cir. 1983); and its earlier opinion
  in Kamberos v. GTE Automatic Electric, Inc.,
  603 F.2d 598, 603-04 (7th Cir. 1979), cert. denied,
  454 U.S. 1060, 102 S.Ct. 612, 70 L.Ed.2d 599 (1981).
    2. As in both Reapportionment Cases and Kamberos,
  its own numbers are announced without a hint of their
  source. If we laborers in the District Court
  vineyards are to deal with the subject in a reasoned
  way, we ought to have more than a recital of the ABA
  Code of Professional Responsibility factors as
  announced in Waters v. Wisconsin Steel Works,
  502 F.2d 1309, 1322 (7th Cir. 1974), cert. denied,
  425 U.S. 997, 96 S.Ct. 2214, 48 L.Ed.2d 823 (1976) (and
  regularly repeated since Waters), followed by a
  bottom-line conclusion that the District Court's
  multiplier is too high but another unexplained figure
  is not.*fn7

This Court will try to bring to bear on the current problem its own recent experience in the practice as the senior active partner (and the principal billing partner) in a Chicago firm, familiar with (1) the "going rate" for lawyers of the skill and seniority of Fay and Serwer and (2) what the market is commanding where hours times usual hourly rates do not provide adequate compensation under the circumstances.

1. Time and Labor Required, Novelty and Difficulty of Questions Involved and Skill Required

Simply to recite these criteria is to confirm their strong applicability here. These cases were extraordinarily difficult to prepare and try. Plaintiffs' counsel faced much larger teams of highly skilled lawyers (and, it may safely be wagered, far more highly compensated lawyers, at least as to the team leaders). These actions posed a host of novel problems with which the litigators and this Court (itself operating of course under the inverse multiplier applicable to the hourly rates of the federal judiciary) had to wrestle, right up through the jury instruction conference that had to plow considerable new ground.*fn8 Though this Court has not itself counted them, plaintiffs' Mem. 16 says more than 40 memorandum opinions and orders were issued during the course of the litigation, mostly in the discovery area.

It comes with ill grace for the loser, United, to denigrate these factors of difficulty and skill with the benefit of hindsight. These actions were hard-fought under hard conditions. They took seven weeks of trial time and thousands of exhibits. And when word came that the jury had reached its verdict after a day's deliberations, and counsel and their clients had assembled in the courtroom for the dramatic moment of the verdict's return, it is fair to say neither the litigants nor their counsel were confident of what that verdict would be. United will not now be heard to underrate the difficulties plaintiffs' counsel overcame with real skill.

2. Likelihood the Particular Employment Precludes Other Employment by the Lawyer

Haley, Bader & Potts, the firm in whose small Chicago office Fay and Serwer are principal partners, has been forced by this litigation to curtail substantially its plans for which the Chicago office was established. These actions proved a very active tiger whose thrashing tail was being held by Fay, Serwer and colleagues. As United points out, Fay and Serwer have become experienced specialists in airline ADEA litigation, but that experience was bought in the high-risk climate of these lawsuits as already discussed. Because the litigation proved so demanding, the ability of the Chicago office to take on other employment as planned was inhibited in a major way.

3. Fee Customarily Charged in the Locality for Similar Legal Services

There are no truly "similar legal services" for purposes of comparison, for the combination of experience required for these actions is not found elsewhere. Without question $125 is at the low end of the spectrum for such activity, and though this Court has not been furnished the information (because of the parties' agreement on the $125 figure), it seems likely lead counsel for United (himself a highly-skilled practitioner) has almost certainly been compensated at a substantially higher rate.

4. Amount Involved and Results Obtained

This speaks for itself. In addition to the very large $18 million award, this Court has ordered reinstatement for all individual plaintiffs who wanted it, and questions of further relief (such as pension benefits) are still in litigation.

5. Time Limitations Imposed by Clients and Circumstances

Every step of the way was battled vigorously, reflecting a classic example of what Judge Will of this District Court refers to as the "Stalingrad defense." Time was plaintiffs' enemy. They wanted to be restored to active service, and they had been terminated because of age. Their prospects of reinstatement would necessarily dim with greater age and prolonged inactivity. As a result of that and other factors, both sides were subjected to a crash program of discovery of truly enormous proportions to meet a firm trial date established by this Court.

6. Nature and Length of Professional Relationship with Clients

This was not a factor.

7. Experience, Reputation and Ability of the Lawyers

Both Fay and Serwer, though younger lawyers by this Court's standards, had impressive experience and reputations. They handled themselves with great ability against opposing forces of great ability (and whose experience and reputation were greater than those of Fay and Serwer). This Court will not repeat their credentials, for they ...

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