Appeal from a Decision of the Benefits Review Board of the United States Department of Labor No. 2006-LHC-01156-Donald W. Mosser, Administrative Law Judge.
The opinion of the court was delivered by: Flaum, Circuit Judge.
Before FLAUM, WOOD, and WILLIAMS,Circuit Judges.
This case comes to us from a decision by the Benefits Review Board upholding the Administrative Law Judge's (ALJ) award of attorneys' fees to Larry Furrow, who filed a workers' compensation claim against his employer, Jeffboat, LLC, that was settled shortly before trial was scheduled. On appeal, Jeffboat argues that Furrow's counsel never established that the hourly rate that she requested was in line with the prevailing market rate for legal services in Indiana, where Furrow brought this case. Jeffboat also argues that the Administrative Law Judge improperly resorted to discretionary factors, in particular the quality of representation from Furrow's counsel, when he made the award. Jeffboat claims that such factors are only appropriate once the ALJ has made a proper determination about the applicable market rate.
For the following reasons, we affirm the decision of the Benefits Review Board.
Larry Furrow, an employee of Jeffboat, LLC in Jeffersonville, Indiana, suffered from hearing loss and filed a workers' compensation claim under the Long-shoreman and Harbor Workers' Compensation Act, 33 U.S.C. § 901 et seq. The Office of Workers' Compensation Programs originally approved the petition but, when Jeffboat continued to contest it, referred the matter for a formal hearing before Administrative Law Judge Donald W. Mosser in the summer of 2006. Approximately six days before the hearing, at a pre-trial conference, the parties reached an agreement on the amount of compensation that Jeffboat would pay to Furrow; the only issue the parties did not settle at the conference was Jeffboat's liability for any attorneys' fees.
Furrow filed a petition for attorneys' fees on August 31, 2006, attaching an affidavit claiming $1,689.66 in attorneys' fees from his case. As an appendix, he attached a previous case, Decker v. Jeffboat, decided in the same locality by ALJ Rudolf Jansen, approving attorneys' fees ranging from $250 to $261 per hour. His appendix also included citations to the Connecticut Law Tribune, The National Law Journal, the 1994 Survey of Law Firm Economics by Altman Weil, and other sources, establishing that billing rates for partners in Connecticut, where Furrow's attorney was based, usually ranged from $199 to $420 per hour. Jeffboat filed its objection to the claim for attorneys' fees on November 21, 2006, including appendices. The appendices included a case from nearby Covington, Kentucky in 1999 establishing the rate for a Longshore Act case at $150 per hour, and three reported cases from Indiana which, while not involving the Longshore Act, found reasonable attorneys' fees in a range from $136 to $175 per hour.
On January 10, 2007, Judge Mosser granted Furrow's petition for attorneys' fees in the amount Furrow requested. In approving the petition, Judge Mosser cited Decker v. Jeffboat and 20 C.F.R. 702.132, which provides that an ALJ can consider the quality of an attorney's representation when making an award of attorneys' fees. Judge Mosser concluded that, "Ms. Olson's excellent representation of her client produced successful results for which she should be compensated with the reasonable amount requested." App. 2. Jeffboat appealed the award to the Benefits Review Board, which upheld the award. Jeffboat then appealed to this court.
This court reviews the ALJ's award of attorneys' fees for an abuse of discretion. Ziegler Coal Co. v. Director, OWCP, 326 F.3d 894, 902 (7th Cir. 2003). Attorneys' fees are calculated using a "lodestar" amount, which is the number of hours that an attorney worked on the case multiplied by a reasonable hourly rate. Mathur v. Bd. of Trustees of Southern Il. Univ., 317 F.3d 738, 742 (7th Cir. 2003); see also Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). An administrative law judge is also allowed to consider various discretionary factors, such as the quality of an attorney's representation, when making an award. See 20 C.F.R. 702.132.
Jeffboat argues that the attorneys' fee award was im-proper in this case because Furrow's attorney established that the hourly rate she requested ($261 per hour) was the prevailing market rate in Connecticut, where Furrow's attorney is based, but did not establish that it was in line with the prevailing market rate in Indiana, where the case was litigated. In support of its contention that the attorney must show that her request for a reasonable attorneys' fee is in line with local market rates, Jeffboat cites the Supreme Court's decision in Blum v. Stenson, 465 U.S. 886, 895 (1984), which holds that the applicant for attorneys' fees bears the burden of demonstrating that the amount requested is in line with the prevailing hourly rate in the "community for similar services by lawyers of reasonably comparable skill, experience and reputation." Id.
Jeffboat concedes that this circuit has allowed the party seeking attorneys' fees to create a presumption that an hourly rate is reasonable where the attorney demonstrates that the hourly rate she has requested is in line with what she charges other clients for similar work. Mathur, 317 F.3d at 743. They argue, however, that where the hourly rate is greater than the market rate in the area in which the case was litigated, the party requesting the attorneys' fees must first demonstrate that he was unable to secure local counsel. Furrow never made such a showing in this case, they argue. Nor did Furrow's counsel present evidence that the rate she had requested was the rate that she normally charged clients for workers' compensation cases. Without such a foundational showing, Jeffboat argues that the discretionary factors, such as those contained in 20 C.F.R. 702.132, are irrelevant, since those factors can only be used to increase an hourly rate that the plaintiff has already shown to be reasonable.
Jeffboat then argues that the attorneys' fees requested in this case were unreasonable. Their supporting evidence comes from the four cases that they brought before the ALJ establishing that the market rate for attorneys' fees in southern Indiana is considerably less than the $261 per hour that the ALJ awarded. Only one of these cases, James E. Huff v. Mike Fink Restaurant, Benson's Inc., 33 BRBS 179 (Nov. 22, 1999), involved the Longshore Act, and that case was decided in 1999. Of the other three cases, Franklin College v. Turner, 844 N.E.2d 99, 105 (Ind. App. 2006), was a collection action for delinquent Perkins Loans; Hill v. Davis, 850 N.E.2d 993, 997 (Ind. App. ...