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February 3, 2003


The opinion of the court was delivered by: Joan B. Gottschall, United States District Judge



Despite defendant's intricately researched and analyzed argument, this court declines to interpret the Seventh Circuit's unexplained statement closing its opinion, "The parties shall bear their own costs in this court," as intended to deprive plaintiff of attorneys' fees for her partially successful appeal. Hertzberg v. SRAM Corp., 261 F.3d 651, 664 (7th Cir. 2001). The issue of plaintiff's entitlement to attorneys' fees on appeal was not argued or discussed in the Seventh Circuit's opinion, leading this court to the conclusion that when the Seventh Circuit spoke of costs, it meant the ordinary costs of appeal as are detailed in Federal Rule of Appellate Procedure 39(e), not attorneys' fees. See Ekanem v. Health & Hosp. Corp. of M.C., Ind., 778 F.2d 1254, 1256-57 (7th Cir. 1985). Despite its observation in Ekanem that various developments left the interplay between Rule 39 and attorneys' fees in civil rights cases unclear, the court of appeals has declined to address the issue in subsequent cases and has said nothing since Ekanem to suggest that the result here should be different from what it was there. The court must attempt to divine the Seventh Circuit's intent as to costs, and this court's best guess is that it had no intention of deciding the unargued, unaddressed and unresolved question of the interplay of costs on appeal and attorneys' fees.

To recover attorneys' fees under the Civil Rights Act, "the plaintiff must be a `prevailing party,'-i.e., he must, `succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.'" Id. at 1257 (quoting Hensley v. Eckerhart, 461 U.S. 424, 435 (1983)). According to the court of appeals' description of what was before it, it considered and issued holdings on four issues in this case: (1) whether plaintiff was entitled to damages for lost pay, given that she did not suffer a discriminatory discharge; (2) whether the evidence at trial on punitive damages was sufficient to go to the jury, or whether SRAM's motion for judgment as a matter of law on this issue should have been granted; (3) whether there was sufficient evidence to establish that the conduct of the employees on whom plaintiff's punitive damages case rested were managerial agents acting within the scope of their employment; and (4) whether there was sufficient evidence to support the jury's verdict that the employer failed to make good faith efforts to implement an antidiscrimination policy such that the punitive damages award could stand. Plaintiff lost on (1), thereby relinquishing $51,000 in compensatory damages awarded by the district court, but won on (2), part of (3) and (4), thereby retaining the $20,000 awarded by the jury on her winning sexual harassment claim. Defendant's argument that this result did not constitute substantial success is unpersuasive. While it is true that the upshot of the appeal was that plaintiff lost about $50,000 in compensatory damages awarded by the district court in connection with her termination, she defeated defendant's multi-pronged attack on her punitive damage award, the only damages she received at trial on her successful sexual harassment claim. As the Seventh Circuit characterized the issues, plaintiff won on 3/4 of the issues decided by that court. Defendant's argument that she was substantially unsuccessful because she lost 70% of her damages fails to take into account the private and public significance of a punitive damages award in a sexual harassment case. See, e.g., Ustrak v. Fairman, 851 F.2d 983, 989 (7th Cir. 1988).

Plaintiff succeeded on a significant issue on her appeal and partially, albeit not totally, prevailed. Plaintiff does not have to win complete success as an appellee in the court of appeals to be entitled to all her fees on appeal. However, plaintiff lost an important part of her recovery in the court of appeals and a significant legal issue, and this court believes that her fees must be reduced to reflect that reality. Accordingly, the court awards plaintiff 60% of her fees and non-taxable costs on appeal, representing this court's view that she was approximately 50% successful on the merits, and is entitled to some small additional percentage for work she was required to do simply to defend her judgment in the court of appeals, regardless of the precise number of issues on which she was successful. The court believes this is consistent with the Seventh Circuit's approach in Ustrak. 851 F.2d at 990 (plaintiff-appellee "incurs expenses in defending against the appeal that are reasonable even though not crowned by complete success.").

Defendant has moved for relief from an order entered by Judge Shadur following the trial of this case in the district court granting plaintiff attorneys' fees and costs. As this judge had no involvement in this case prior to the fee disputes now before the court, its discussion of the relevant facts is based on the parties' papers.

At the trial in this case of plaintiff's two claims, the jury found in plaintiff's favor on her sexual harassment claim but in favor of defendant on plaintiff's retaliatory discharge claim. Because during discovery plaintiff had specified no compensatory damages, the only damages considered by the jury were punitive damages, and the jury returned a $20,000 punitive damage award. Thereafter, as described by defendant, "[b]etween the jury's verdict on November 5, 1999 and entry of judgment, the parties spent months litigating the propriety and amount of lost pay based solely on a finding of sexual harassment." Judge Shadur ruled in plaintiff's favor on this claim and awarded plaintiff $51,829.19 in lost pay, for a total judgment of $71,829.18, which was entered on March 3, 2000.

Following the entry of judgment, plaintiff petitioned for attorneys' fees and expenses. Judge Shadur granted fees and costs, reducing the requested lodestar amount by 20% to reflect plaintiff's incomplete success. (Order of August 11, 2000.) Including the amounts plaintiff incurred in petitioning for fees which were awarded in full, plaintiff was granted fees in the amount of $93,967.78 and expenses in the amount of $7,037.10. On defendant's appeal, the court of appeals reversed the lost pay award in its entirety and affirmed the jury's $20,000 punitive damages award.

Defendant now moves pursuant to Federal Rule of Civil Procedure 60(b) to set aside the final judgment in this case in order to allow this court to adjust the award of fees and costs to reflect the ultimate failure of plaintiff's lost pay award. Defendant, having argued to this court that plaintiff should get nothing for her fees on appeal, and having argued unsuccessfully to Judge Shadur that she should get no more than 50% of her fees incurred in the trial court, now seeks an 80% reduction of her trial court fees, rather than the 20% reduction ordered by Judge Shadur.

The court is constrained to point out that portions of plaintiff's Corrected Brief in Opposition are gibberish (part of page 4 is a good example) and much of it is difficult to understand. The court has done its best to make sense of plaintiff's arguments. As far as the court can determine, plaintiff does not take issue with the applicability of Rule 60 to address this situation, nor does plaintiff contend that the court lacks power to reconsider plaintiff's prevailing party status in light of the Seventh Circuit's decision. Plaintiff rather argues merely that no reduction is appropriate.*fn1 The court disagrees. Plaintiff has now lost on an important issue, lost pay, on which she prevailed in the trial court and as to which she was a prevailing party at the time Judge Shadur found that she was entitled to 80% of her fees and non-taxable costs. Judged from today's perspective, plaintiff was less successful than she appeared to Judge Shadur. Some additional reduction must be made to reflect plaintiff's reduced degree of success.

The court rejects defendant's focus on the percentage of the damages sought which plaintiff ultimately recovered, an approach to attorneys' fees in this case which Judge Shadur appropriately rejected. This was primarily a civil rights case about sexual harassment. The termination of plaintiff's employment and her claim for lost pay were claims intimately related to the harassment by defendant which plaintiff successfully proved. Not only did plaintiff prove that she was the victim of unlawful discrimination, but the trier of fact awarded her substantial punitive damages. In such a situation, plaintiff's victory has vindicated important public interests and defendant's insistence that this case was a largely unsuccessful quest for "the recovery of private damages" is incorrect. While the court must be cognizant of plaintiff's relatively modest monetary award, as it must be cognizant of the claims on which she did not prevail, she prevailed on the driving issue of her case, her claim of serious sexual harassment worthy of punitive damages.

The court is not certain that an additional percentage reduction is the most appropriate approach to this case. According to the parties' descriptions of what occurred in the trial court, the parties' focus shifted to lost pay only after the jury's verdict. Defendant's description of the history of this case, which plaintiff does not contest, asserts that the litigation of the lost pay issues, both as to the propriety of lost pay and its amount, took place "[b]etween the jury's verdict on November 5, 1999 and entry of judgment." If this is true, it should be possible simply to deduct the fees and costs for that period of time. But the parties have not briefed the issue of the propriety of that approach, and the court does not have before it the evidence that would permit it to decide fees on that basis. This case, and its seemingly endless fee disputes, have gone on much too long to delay any longer in the hope of achieving greater precision.

Accordingly, the court orders that plaintiff's fees and non-taxable expenses for work in the trial court, exclusive of fees incurred in litigating fees, be reduced by an additional 15% for a total reduction from the lodestar of 35%. This reduction is intended to recognize that plaintiff succeeded on the central issue of her case but failed to succeed on two claims, discharge and lost pay, which plaintiff claimed resulted from the sexual harassment she successfully proved. It attempts to take into account that a substantial part of the attorneys' fees incurred in trial preparation would almost certainly have been incurred had plaintiff attempted to prove only her sexual harassment claim and entitlement to punitive damages, and that a significant portion of the litigation of her losing back pay claim took place in the relatively short span of time between the jury's verdict and the entry of judgment. In this court's view, plaintiff succeeded on a significant and indeed central issue in this case, sexual harassment, and satisfied the jury that punitive damages were warranted, thus implicating significant public as well as private interests. Defendant's contention that ...

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