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Dupuy v. McEwen

August 13, 2009


The opinion of the court was delivered by: Judge Rebecca R. Pallmeyer


Plaintiffs, a class of child care employees, initially filed this action against Defendant, the Director of the Illinois Department of Children and Family Services (DCFS), in 1997. Plaintiffs alleged that DCFS violated their due process rights when it issued "indicated" reports concluding that credible evidence supported allegations charging Plaintiffs with child abuse or neglect. Over the course of the next decade, the case traveled from this court to the Seventh Circuit several times. The substantive litigation having come to an end, Plaintiffs now seek an award of attorneys' fees for time spent on those claims on which they prevailed.

More complete recitations of the facts and procedural history are available elsewhere. See, e.g., Dupuy v. Samuels, 141 F. Supp. 2d 1090 (N.D. Ill. 2001). For the purposes of deciding the pending petition for fees, the court focuses on the first of three separate sets of claims that Plaintiffs advanced during the litigation. The initial set of claims ("Dupuy I") "challenge[d] the constitutionality of certain DCFS policies and procedures for investigating allegations of child abuse and neglect and for issuing 'indicated' reports." Id. at 1092. In 2001, this court issued an opinion finding that certain DCFS policies did deprive Plaintiffs of their constitutional rights. Specifically, the court found that Plaintiffs were deprived of their due process rights by DCFS's failure to consider any exculpatory evidence when indicating a report of abuse or neglect; by failing to provide indicated persons with adequate notice and the opportunity to contest the adverse finding; and by the disclosure of these procedurally deficient reports to licensing agencies and potential employers. Id. at 1134-40. After several months of negotiations between the parties, the court entered a preliminary injunction enforcing the substance of its 2001 opinion by mandating certain changes in DCFS practice. Dupuy v. McDonald, No. 97 C 4199, 2003 WL 21557911 (N.D. Ill. July 10, 2003). Both parties appealed that injunction order, but the Seventh Circuit largely affirmed it, extending its reach only by requiring that the amended processes be made available to persons seeking to enter the child-care field, as well. Dupuy v. Samuels, 397 F.3d 493, 512 (7th Cir. 2005).

Plaintiffs now seek fees for the Dupuy I litigation. Previously, in 2004, this court awarded Plaintiffs interim attorney's fees for their work on Dupuy I, but the Seventh Circuit reversed that award on the ground that the claims were not yet finally resolved and Plaintiffs therefore were not "prevailing parties" within the meaning of 42 U.S.C. § 1988. Dupuy v. Samuels, 423 F.3d 714, 719 (7th Cir. 2005). In the fee petition now before the court, Plaintiffs initially sought more than $6.1 million in fees and $81,124.51 in costs. After Defendant filed his opposition, Plaintiffs agreed that certain line items were improperly included in their initial petition, and revised their requests downward to $5,892,826.10 in attorney's fees and $65,329.17 in related costs and expenses.*fn1 Plaintiffs also claim they are entitled to interest on their fee award since the filing of their fee petition in 2007. Defendant objects in large part to these numbers, arguing that Plaintiffs are in fact entitled only to $1,803,590.56 in fees and $12,421.08 for costs and expenses. While the court sustains certain of Defendant's objections, the court nevertheless awards Plaintiffs the majority of the fees they have requested.


I. Jurisdiction

Defendant initially challenges this court's jurisdiction to rule upon Plaintiffs' fee petition. On March 9, 2007, the court entered an order declaring, "This case is terminated, but the court retains jurisdiction as provided by the parties' stipulation." (3/9/07 Minute Order [969].) In support of his argument that jurisdiction is nevertheless lacking, Defendant relies principally upon language in the Seventh Circuit's 2007 opinion affirming this court's dismissal of the Dupuy II claims. See Dupuy v. McEwen, 495 F.3d 807 (7th Cir. 2007). In that opinion, the Seventh Circuit expressed concern that this court was attempting to retain "jurisdiction to enforce the stipulation" despite having dismissed the case with prejudice. Id. at 809. The Seventh Circuit recognized "that when a suit is dismissed with prejudice, it is gone, and the district court cannot adjudicate disputes arising out of the settlement that led to the dismissal merely by stating that it is retaining jurisdiction." Id. Defendant argues that in order for this court to reach the fee issue, the court would need to retain jurisdiction over a case it has already dismissed with prejudice, which it cannot do.

Plaintiffs contend that the Seventh Circuit did not clearly hold that the court's retention of jurisdiction in this case was improper. In order to retain jurisdiction over some provision of a settled case while at the same time foreclosing a repeat suit by the plaintiff, the Seventh Circuit suggested an alternative procedure to dismissal with prejudice: "The obvious alternative . . . is for the court to dismiss without prejudice but the parties to include in the settlement a release of the defendant." Id. at 810 (citing Shapo v. Engle, 463 F.3d 641, 646 (7th Cir. 2006)). The Seventh Circuit noted that such a procedure was in fact followed in this case, as the stipulation approved by the court contained a release of the Defendant, "making dismissal with prejudice redundant." Dupuy, 495 F.3d at 810. Plaintiffs argue that this statement by the Seventh Circuit, that dismissal with prejudice was redundant since the stipulation released from liability for future claims, "meant that this court retained jurisdiction to enforce the Stipulation." (Pl.'s Protective Mot. [985] at 5-6.)

Should the court disagree with this analysis, Plaintiffs have also moved to amend the March 9, 2007 order pursuant to Rule 60(b) to clear up any ambiguity in that order. The Rule permits a court to relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise or excusable neglect; . . . (5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable . . . .

FED. R. CIV. P. 60(b). Generally speaking, "relief from a judgment under Rule 60(b) is an extraordinary remedy and is granted only in exceptional circumstances." Bakery Mach. & Fabrication, Inc. v. Traditional Baking, Inc., 570 F.3d 845, 848 (7th Cir. 2009) (citing Reinsurance Co. of America, Inc. v. Administratia Asiqurarilor de Stat, 902 F.2d 1275, 1277 (7th Cir. 1990)). In their reply brief, Plaintiffs also argue that they may be entitled to relief under Rule 60(a). That Rule permits the court to correct "a mistake arising from oversight or omission whenever one is found in a judgment [or] order."*fn2 FED. R. CIV. P. 60(a). This provision is similar to Rule 60(b)(1); as the Seventh Circuit has noted, "[t]here is some overlap between Rule 60(a) and Rule 60(b)(1) for correcting errors . . . of oversight . . . ." Smith v. Peters, No. 89-3180, 1991 WL 100822, at *2 (7th Cir. June 10, 1991). "If the flaw lies in the translation of the original meaning to the judgment, then Rule 60(a) allows a correction; if the judgment captures the original meaning but is infected by error, then the parties must seek another source of authority to correct the mistake." United States v. Griffin, 782 F.2d 1393, 1396-97 (7th Cir. 1986).

The parties' dispute essentially comes down to this: does the "dismissal with prejudice" trump the court's purported retention of jurisdiction, or does the court's retention of jurisdiction demonstrate that the case was not actually dismissed with prejudice? Given the understanding of the parties as well as the court at the time the March 9 order was entered, the court concludes the latter interpretation must be correct. The March 9 order stated that "the court retains jurisdiction as provided by the parties' stipulation." The Stipulation, in turn, expressly preserves Plaintiffs' right to seek fees for Dupuy I in this court, and preserves Defendant's right to "contest the extent to which plaintiffs have prevailed and the amount and reasonableness of the attorneys' fees, expenses and costs." (Stipulation ¶ 18.) Other provisions of the Stipulation also contemplate that the court would retain jurisdiction to enforce the terms of the Stipulation. For example, Paragraph 15 of the Stipulation states: "The Court will retain jurisdiction to enforce plaintiffs' right to have in place such Rules, Procedures, notices and other written policies . . . ." The parties appeared to share the court's expectation, expressed in the March 9 order, that the court would retain jurisdiction after the termination of the litigation; specifically, the Stipulation states that, "except as provided in ¶ 15 below, all DuPuy I and III claims of the plaintiffs shall be dismissed with prejudice." (Id. ¶ 14.) The Seventh Circuit found the language of dismissal with prejudice incongruous with retention of jurisdiction, and suggested that one had to give. The language quoted from the Stipulation satisfies the court that the parties intended that the court would retain jurisdiction even after it approved the settlement. As the Seventh Circuit made clear, the parties, as well as this court, imprecisely used the phrase "dismissal with prejudice," particularly as that phrase was "redundant" with the Stipulation's release of Plaintiffs' claims against the Defendant. See Brandon v. Chicago Bd. of Educ., 143 F.3d 293, 295 (7th Cir. 1998) ("Rule 60(b)(1) applies to errors by judicial officers as well as parties." (citing Wesco Prods. Co. v. Alloy Auto. Co., 880 F.2d 981, 984-85 (7th Cir. 1989))).

The court therefore declines to enforce the "dismissal with prejudice" language from the March 9 order at the expense of the language recognizing the court's limited retention of jurisdiction over the Stipulation. Dismissing the case with prejudice and refusing to exercise jurisdiction over the settlement would produce an overly formalistic result that needlessly upsets the parties' settled expectations at the time they entered into the Stipulation. Both the court and the parties believed then that the court could both dismiss the case with prejudice and retain jurisdiction as outlined in the Stipulation, a belief the court acknowledges has been characterized as "troublesome." Dupuy, 495 F.3d at 809. Indeed, the court's oversight authority to monitor compliance with the Stipulation was likely essential to the agreement. Accordingly, both because the court's dismissal with prejudice was redundant of the general release contained in the Stipulation and because a contrary interpretation would disrupt the parties' settled expectations, the court concludes that failing to retain jurisdiction would be inequitable. Cf. Haagen-Dazs Co., Inc. v. Marina Ice Cream Co., Inc., 935 F.2d 542, 543 (2d Cir. 1991) (per curiam) (granting a Rule 60(b) motion because a "consent judgment should reflect the understanding of both parties [but in this case] the final judgment issued by the district court does not reflect" the agreement).

Defendant's objections are unpersuasive. Defendant initially objected to Plaintiffs' Rule 60(b) motion on the ground that the issue was only of hypothetical importance and therefore not ripe for review. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). This argument no longer applies; Defendant has raised the jurisdictional issue as a defense to the fee petition, placing the question squarely before the court. Defendant also claims that Plaintiff improperly disclosed confidential information from settlement discussions in its Rule 60(b) motion, but as the court now decides this question on the basis of the parties' expectations reflected in a publicly-filed document without reference to the confidential materials, this objection, too, is moot; any impropriety on Plaintiffs' part is simply irrelevant to determining whether Rule 60 relief is appropriate.

Finally, Defendant argues that this matter is not appropriate for Rule 60(b), both because it is not an extraordinary circumstance and because the Seventh Circuit foreclosed the possibility of relief. As to the first objection, the court determines that Rule 60(a), which does not require a finding of extraordinary circumstances, is the proper vehicle by which to amend the March 9 order, because "the flaw lies in the translation of the original meaning to the judgment." Griffin, 782 F.2d at 1396-97. This case is analogous to Blue Cross & Blue Shield Ass'n v. American Express Co., 225 F.R.D. 230 (N.D. Ill. 2004). In that case, the district court entered an order similar to this court's March 9 order, which stated both that it was retaining jurisdiction to enforce the settlement and that it was dismissing the claims with prejudice. Id. at 231. The plaintiff in Blue Cross "simply want[ed] to fix the dismissal order so that it provides what both parties and the Court intended at the time: retention by this Court of jurisdiction to enforce the settlement agreement." Id. at 233. The court concluded that amendment pursuant to Rule 60(a) was appropriate because the change sought did not alter the original meaning of the order, but rather "implement[ed] the result intended by the court at the time the order was entered." Id. (citing Kokomo Tube Co. v. Dayton Equipment Servs. Co., 123 F.3d 616, 623 (7th Cir. 1997)). Here, too, Plaintiffs' proposed change to the March 9 order better implements the aims of both the parties and the court at the time the order was entered. Contrary to Defendant's second argument, the Seventh Circuit did not foreclose this avenue of relief in its earlier opinion, as it nowhere stated that the court no longer possessed jurisdiction over the case; rather, the appellate court sought to "provide helpful guidance" to this court by noting its concern about the March 9 order, "which purports to retain jurisdiction of a terminated case." Dupuy, 495 F.3d at 809.

The court therefore amends the March 9, 2007 order pursuant to Rule 60(a). The March 9, 2007 order is amended to read as follows:

Motion To Vacate February 26 Dismissal Order (967) is granted. With the final resolution of the three sets of claims asserted in this case (referred to as Dupuy I, Dupuy II, and Dupuy III), a final judgment in the case is hereby entered, and all pending motions are dismissed as moot. This court retains jurisdiction over this case as set forth in the parties' Stipulation (providing for the Stipulation's enforcement), under which Stipulation the Dupuy I/III claims of the unnamed class members have been dismissed without prejudice and there has been a release of Dupuy I/III claims by the named plaintiffs. The "without prejudice" language in the Stipulation does not permit the parties to reopen issues resolved by the judgment.

With this revision, the court clearly possesses jurisdiction to resolve the present fee dispute, as contemplated by the Stipulation itself, and now by the language of the March 9, 2007 order.

II. Attorney's Fees

42 U.S.C. § 1988(b) permits courts to award "a reasonable attorney's fee" to the "prevailing party" in a § 1983 action. "Initially, the court must determine the 'lodestar' amount by multiplying the reasonable number of hours expended by a reasonable hourly rate." Spellan v. Bd. of Educ. for Dist. 111, 59 F.3d 642, 645 (7th Cir. 1995); see also Hensley v. Eckerhart, 461 U.S. 424 (1983). "Once that figure is determined, the court may consider other factors set out in Hensley," including whether plaintiffs' fee should be reduced because they were unsuccessful on some of their claims. Estate of Enoch ex rel. Enoch v. Tienor, 570 F.3d 821, 823 (7th Cir. 2009). The court cannot, however, "simply 'eyeball the fee request and cut it down by an arbitrary percentage because it seem[s] excessive to the court.'" Small v. Richard Wolf Med. Instruments Corp., 264 F.3d 702, 708 (7th Cir. 2001) (quoting People Who Care v. Rockford Bd. of Educ., Sch. Dist. No. 205, 90 F.3d 1307, 1314 (7th Cir. 1996)). Defendant disputes the reasonableness of both the number of hours claimed by Plaintiffs and the rate Plaintiffs charged. As the parties submitting the petition, Plaintiffs have "the burden of justifying the fees requested." Spellan, 59 F.3d at 646. The court considers Defendant's various objections to the rate and hours before arriving at a lodestar figure, then considers Defendant's other arguments for reducing the lodestar.

A. Reasonable Hourly Rate

Defendant first argues that the hourly rates claimed by Plaintiff are unreasonable. To determine the hourly rate for attorney's fees under § 1988, the court considers "the prevailing market rates in the relevant community." Blum v. Stenson, 465 U.S. 886, 895 (1984). The rate at which an attorney actually bills paying clients for similar work is "presumptively appropriate" for calculating the market rate. Denius v. Dunlap, 330 F.3d 919, 930 (7th Cir. 2003) (citing Uphoff v. Elegant Bath, Ltd., 176 F.3d 399, 407 (7th Cir. 1999)). The vast majority of the hours spent on Dupuy I were spent by the named principals of Lehrer and Redleaf, Robert E. Lehrer (Harvard Law School, 1970) and Diane L. Redleaf (Stanford Law School, 1979). Their 2007 rates, the year in which this petition was originally filed, were $460 and $415, respectively. Other attorneys who worked on the case billed their time at rates that ranged from $275/hour to $520/hour; recent law graduates at $230/hour; law clerks at $130-$145/hour; and paralegals and interns between $85/hour and $175/hour.

Plaintiff offers various bases of support for these rates. First, Plaintiff submitted five declarations from practicing attorneys in Chicago, stating the compensation rates prevailing at their various firms.

* Robert D. Allison, a 1974 Northwestern Law graduate who specializes in complex federal litigation, billed his hours at $475 in 2006; $415 in 2003; and $310 in 1998. Courts have accepted these rates when approving settlements in which Mr. Allison received attorney's fees for his work. (Ex. 2 to Pl.'s Pet.)

* Fay Clayton, a 1978 Chicago-Kent law school graduate, is a litigation partner with Robinson Curley & Clayton, P.C., specializing in complex federal litigation. Clayton analyzed Lehrer & Redleaf's rates and stated that those rates were "substantially the same as or lower than the rates charged by my firm for work by attorneys of comparable skill and experience," and are comparable to the rates charged "in the Chicago legal community generally." (Ex. 4 to Pl.'s Pet.)

* Judson H. Miner, a 1967 University of Chicago Law School graduate who concentrates in federal civil rights litigation, also found Lehrer & Redleaf's rates to be "reasonable and well within the range of normal hourly rates charged by attorneys of comparable ability and experience." (Ex. 5 to Pl.'s Pet.)

* Roger Pascal, a 1965 Harvard Law School graduate who practices in complex and multiparty litigation in Chicago, considered Lehrer & Redleaf's rates "eminently reasonable" and "well within the range of current hourly rates charged for attorneys, paralegals, and law clerks."*fn3 (Ex. 3 to Pl.'s Pet.)

* Robert L. Graham, a 1972 Harvard Law School graduate engaged in a federal litigation practice with Jenner & Block, also testified that fees charged by the attorneys, paralegals, and clerks in this matter were "well within or below the range of current billing rates of legal professionals." (Ex. 7 to Pl.'s Pet.)

In response to this evidence, Defendant submitted just one affidavit that directly addressed the reasonableness of the rates. Howard Swibel, a 1975 Harvard Law School alumnus and partner at Arnstein & Lehr LLP with a practice in both transactional law and complex litigation, asserts that the 2007 rates claimed by Plaintiffs are unreasonably high. Furthermore, he notes, in the years between 2005 and 2007, reasonable attorney's fees in civil rights cases rose substantially, suggesting that awarding Plaintiffs attorneys fees at 2007 rates for their work in 2005 and earlier would result in a windfall for Plaintiffs. (Ex. 3 to Def.'s Resp. ¶¶ 22-23.) Mr. Swibel did not provide any evidence of rates paid for his own work or that of other attorneys for similar matters.

Plaintiff next points to several cases in which Lehrer and Redleaf were compensated at similar rates. (Pl.'s.' Ex. 15.) In Terry v. Richardson, No. 97-1196 (C.D. Ill. Mar. 12, 2002), Lehrer was awarded fees at a $325/hour rate for 2000-2001, and Redleaf was awarded fees at a rate of $310/hour. In Norman v. McDonald, No. 89 C 1624 (N.D. Ill. Apr. 13, 2000), the court approved a settlement agreement wherein the DCFS director agreed to compensate Lehrer at $310/hour for her work in 1999 and 2000.*fn4 Defendant objects to Plaintiffs' failure to produce evidence that counsel in fact charged the rates they claimed to have charged in 2007. The court agrees that actual paid bills from 2007 would have provided useful support for Plaintiffs' attorneys' claimed hourly rates, but the failure to include such bills is not fatal; indeed, given the public interest nature of Plaintiffs' counsel's practice, such bills may simply not exist. See People Who Care, 90 F.3d at 1310. In any event, Plaintiffs have provided ample evidence that the listed rates are comparable to those "charged by lawyers in the community of 'reasonably comparable skill, experience, and reputation.'" Id. (quoting Blum, 465 U.S. at 895 n.11).

Defendant next challenges Plaintiffs' right to recover fees at 2007 rates for any of their time. The Dupuy I matter was more or less resolved in 2005, when the Seventh Circuit affirmed entry of the injunction in that phase of the case. Dupuy, 397 F.3d 393. Defendant acknowledges that in some instances, use of current billing rates, rather than historical billing rates, is an appropriate method of ameliorating the delay in payment until the end of the litigation, see, e.g., Lightfoot v. Walker, 826 F.2d 516, 523 (7th Cir. 1987), but argues that such an approach is inappropriate here because the delay in recovery of the fees in this case is the result of Plaintiffs' pursuit of unsuccessful claims from 2005 through 2007.*fn5 The "blame" for the lengthy duration of this litigation, however, has little relevance for determining the appropriate rate. Defendant does not cite any case for the proposition that a plaintiff's unsuccessful pursuit of non-frivolous issues bars the plaintiff from recovery of current market rates for her fee award.

While Defendant is correct that the vast majority of work on Dupuy I was finished in 2005, it does not follow that Plaintiffs must be limited to recovery at 2005 rates. To "compensat[e] for the delay in payment of attorney's fees" between the end of the litigation and the present, the Seventh Circuit has authorized two methods: either applying current market rates for the attorney's work, or applying the rates that prevailed at the time the services were rendered and adding interest on that amount to the present. Smith v. Village of Maywood, 17 F.3d 219, 221 (7th Cir. 1994). "A court may elect to use either of these two methods-current rates or past rates with interest-as acceptable compensation for the delay in payment of fees." Id. Defendant argues that the fee award must be based on counsel's 2005 rates, but does not appear to recognize that interest should then be added. Based on the court's own calculations, applying Plaintiffs' 2003 rates (the court has no information on Plaintiffs' 2005 rates) and adding interest from 2003 to the present (compounded annually) results in a higher total award to Plaintiffs than using the 2007 rates with interest only for 2008 and part of 2009. Accordingly, as Plaintiffs seek 2007 rates (plus interest for the last 19 months), and as those rates are actually in Defendant's best interest, the court will apply the 2007 rates for the attorneys involved in the matter, plus interest for 2008 and part of 2009. See Lightfoot, 826 F.2d at 523 (the point of using the current rate is to "approximate the value today of the historic rates charged at the time when the legal services actually were rendered" (citing Murray v. Weinberger, 741 F.2d 1423, 1433 (D.C. Cir. 1984))).

Two years have passed since Plaintiffs initially moved for fees, and Plaintiffs seek interest on their fee award to account for the passage of time. The court rejects Defendant's argument that no interest should be awarded-for the same reasons discussed above, the time value of money dictates that a 2009 award based strictly on 2007 rates would undercompensate Plaintiffs. See In re Continental Illinois Sec. Litig., 962 F.2d 566, 571 (7th Cir. 1992) (when the court uses current rates, it "must be sure to make some provision for the interval between the 'current' period and the date the lawyers actually receive their money"). Although 28 U.S.C. § 1961 sets a rate for postjudgment interest, the court turns to federal common law to determine the appropriate rate to apply for prejudgment interest. Gorenstein Enterprises, Inc. v. Quality Care-USA, Inc., 874 F.2d 431, 437 (7th Cir. 1989). Plaintiffs contend that the court should use the prime rate, which is the rate banks generally charge to their most creditworthy customers.*fn6 The Seventh Circuit has endorsed the use of this rate as a "reasonable although rough estimate of the interest rate necessary to compensate plaintiffs not only for the loss of the use of their money but also for the risk of default." Id. at 436. Accordingly, this court will award interest on Plaintiffs' fee award at the annual average of the prime rate, compounded annually, for 2008 and seven months and thirteen days in 2009. Id. at 1116 (endorsing compounding of prejudgment interest).

B. Reasonable Hours Expended

District courts "should exclude from this initial fee calculation hours that were not 'reasonably expended.'" Hensley, 461 U.S. at 434. Defendants' objections to the amount of hours claimed by Plaintiffs fall into two categories: that the case was frequently overstaffed by experienced attorneys, making their expenditure of time on the matter unreasonable, and ...

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