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World Outreach Conference Center v. City of Chicago

United States District Court, N.D. Illinois, Eastern Division

February 14, 2017

WORLD OUTREACH CONFERENCE CENTER, an Illinois Not-For-Profit Corporation, and PAMELA BLOSSOM, President of WORLD OUTREACH CONFERENCE CENTER, Plaintiffs,
v.
CITY OF CHICAGO, Defendant.

          OPINION AND ORDER

          Joan H. Lefkow U.S. District Judge.

         This case is before the court on the motion of World Outreach Conference Center's attorneys for fees under 42 U.S.C. § 1988 and for costs under Federal Rule of Civil Procedure 54(d) (dkt. 359). On April 1, 2013, this court granted summary judgment in favor of World Outreach and Pamela Blossom, its President, [1] in the amount of $15, 000 on a portion of its claim under the Religious Land Use and Institutionalized Person Act (RLUIPA), 42 U.S.C. § 2000bb et seq., and granted summary judgment in favor of the City of Chicago on all other aspects of the RLUIPA claim and all other counts of the Amended Complaint. (Dkt. 247). The parties stipulated to a final judgment order in the amount of $15, 000, representing damages to World Outreach on the successful claim, both parties reserving their appellate rights. (Dkt. 270.) On appeal, the court affirmed the grant of summary judgment in favor of World Outreach but remanded the remainder of the case for trial. On April 4, 2016, the case came to a close when World Outreach accepted the City's Rule 68 offer of judgment for $25, 001. For the reasons stated below, World Outreach is awarded $467, 973.45 in attorney's fees, and the parties are directed to confer regarding costs as required under Local Rule 54.3.

         LEGAL STANDARD

         Section 1988 provides district courts with discretion to award reasonable attorney's fees to the prevailing party in RLUIPA actions. 42 U.S.C. § 1988(b). While a party who receives even nominal damages is a prevailing party under § 1988, “a reasonable attorney's fee for a nominal victor is usually zero.” Aponte v. City of Chi., 728 F.3d 724, 726-27 (7th Cir. 2013) (citing Farrar v. Hobby, 506 U.S. 103, 115, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992)). If more than nominal damages have been awarded, courts follow the alternative path set forth in Hensley v. Eckerhart, which starts with determining the lodestar amount, i.e., “the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). The court may then adjust the lodestar amount upward or downward depending on a variety of factors, such as the degree of success, the novelty and difficulty of the issues, and awards in similar cases. Id. at 434, n.9 (citing Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974)).

         ANALYSIS

         The parties dispute whether a reasonable attorney's fee should be computed under Farrar or Hensley. Farrar applies if World Outreach obtained a nominal award, which is determined by whether “the plaintiff was aiming high and fell far short, in the process inflicting heavy costs on his opponent and wasting the time of the court, or whether . . . the case was simply a small claim and was tried accordingly.” Hyde v. Small, 123 F.3d 583, 585 (7th Cir. 1997); see also Aponte, 728 F.3d at 728 (noting same). Although the vast majority of cases applying Farrar involve plaintiffs who were awarded $1 or $100-i.e., nominal, de minimis, or technical damages by any definition[2]-the Seventh Circuit has indicated that there is no precise dollar or percent of recovery threshold that triggers Farrar. Rather, a more holistic approach is used: “[I]n determining whether an award should be analyzed under Farrar, district courts should look at the entire litigation history, including the number of victorious versus unsuccessful claims, the amount of damages sought versus recovered, time expended by the parties, and judicial resources.” Aponte, 728 F.3d at 728. In evaluating this case purely in light of Aponte's language, [3] this would seem to be a case in which Farrar provides the appropriate methodology. World Outreach certainly aimed high and achieved meager monetary results, although it did achieve its goal of operating a community center despite the local alderman's opposition, which can partially be attributed to the litigation's ten-year war of attrition.

         But despite Aponte's broad language, the few cases to have considered whether Farrar applied where recovery exceeded the clearly nominal threshold have concluded that Farrar did not apply.[4] Although Aponte allows lower courts to apply Farrar in cases involving a few hundred or perhaps a thousand dollars, the Seventh Circuit continues to indicate that the lodestar is the appropriate methodology when damages are not objectively de minimis. In Montanez v. Simon, 755 F.3d 547 (7th Cir. 2014), the court ruled that a $2, 000 recovery in a “simple civil-rights claim, overlitigated by both sides, ” was not so nominal so as to apply Farrar. Id. at 550, 556-57 (“We don't mean to suggest that [the plaintiff's] victory was purely nominal, in which case he would not be entitled to attorney's fees at all.” (citing Farrar, 506 U.S. at 115)). Rather, such limited success warranted a substantial reduction of the lodestar, and the court affirmed the district court's substantial across-the-board reduction of the modified lodestar to account for the limited success. Montanez, 755 F.3d at 557. The same approach is warranted here. As such, the court will calculate the lodestar.

         I. Reasonableness of Hourly Rate

         World Outreach bears the initial burden of demonstrating that the requested hourly rates for its attorneys are “in line with those prevailing in the community.” Pickett v. Sheridan Health Care Ctr., 664 F.3d 632, 640 (7th Cir. 2011) (quoting Blum v. Stenson, 465 U.S. 886, 895 n.11, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984)). If this burden is met, the City then has the burden to “offer evidence that sets forth ‘a good reason why a lower rate is essential.'” Id. (quoting People Who Care v. Rockford Bd. of Educ., 90 F.3d 1307, 1313 (7th Cir. 1996)). If World Outreach fails to satisfy its burden, the court may determine a reasonable rate. See Uphoff v. Elegant Bath, Ltd., 176 F.3d 399, 409 (7th Cir. 1999).

         For the most part World Outreach has met its burden of showing that its proposed rates are reasonable. The City argues that counsel seek a windfall and proposes significantly reduced rates. The court has considered the arguments raised and will address only those it considers substantial.

         First, Daniel Dalton's declaration in support of World Outreach opining that certain of World Outreach's attorneys rates are reasonable have little value, “unlike affidavits describing what ‘comparable attorneys charge for similar services.'” Montanez, 755 F.3d at 554 (quoting Pickett, 664 F.3d at 647). Similarly, Dalton's statement that a number of courts have found that $580 per hour is a reasonable fee for his services in RLUIPA litigation is not helpful since he fails to document it. That omission led the court to review the readily available RLUIPA cases in which Dalton has petitioned for fees. These cases suggest that Dalton, at least in some instances, received a much lower rate than he claims in his declaration. See Church of Our Savior v. City of Jacksonville Beach, 108 F.Supp.3d 1259, 1273 (M.D. Fla. 2015) (finding $325 a reasonable rate for Dalton); Lighthouse Rescue Mission, Inc. v. City of Hattiesburg, No. 12 C 184, 2014 WL 1653108, at *4 (S.D.Miss. Apr. 23, 2014) (finding $325 a reasonable rate for Dalton); Paeth v. Worth Twp., 08 C 13926, 2010 WL 4867406, at *4 (E.D. Mich. Nov. 23, 2010) (finding $300 a reasonable rate for Dalton).

         Second, the City argues that, to the extent that World Outreach's attorneys have a practice of discounting the rates they charge to clients so as to fulfill their charitable mission, the City too should benefit from that reduced rate. However laudable that practice, the relevant inquiry is not what a particular attorney charges but what is a reasonable rate in the community. See Blum, 465 U.S. at 895 (“‘[R]easonable fees' under § 1988 are to be calculated according to the prevailing market rates in the relevant community, regardless of whether plaintiff is represented by private or nonprofit counsel.”); see also People Who Care, 90 F.3d at 1310 (“If the court is unable to determine the attorney's true billing rate, however (because he maintains a contingent fee or public interest practice, for example), then the court should look to the next best evidence-the rate charged by lawyers in the community of reasonably comparable skill, experience, and reputation.” (quotation marks and citations omitted)). For this reason, the evidence of hourly fees of World Outreach's attorneys that the City has put into the record are of little value in establishing a reasonable hourly rate, as is the $125-200 per hour rate that the Alliance Defending Freedom (ADF) agreed to compensate World Outreach's attorneys as part of a non-recourse grant.

         Third, just as the City tries to inject inapplicable hourly rates into the analysis, so does World Outreach. The fact that one of World Outreach's attorneys was able to recently obtain a $750 hourly rate is of little value given that the matter was the representation of a limited partnership in its sale of a hotel in Memphis, Tennessee. That representation is not indicative of a reasonable rate in the relevant community.

         Fourth, the City cites case law that this court may veer from previous fee awards if it has justification, but the City has not provided any reason why the fee awards in RLUIPA cases obtained by World Outreach's counsel should not be followed here.

         Based on all the submissions and arguments, the court concludes that the fee awards referenced by World Outreach are most relevant, particularly the two RLUIPA awards it frequently cites: Power of Praise Worship Ctr. Church v. Vill. of Dixmoor, No. 10 C 5436, 2011 WL 1157550 (N.D. Ill. Mar. 29, 2011), and The King's Tabernacle v. Town of Johnson, No. 16 C 30 (D.R.I Mar. 30, 2016).

         1. John W. Mauck

         A reasonable rate for Mr. Mauck is $600 per hour. In Power of Praise, Mauck's rate was set at $550 in 2011, and in The King's Tabernacle, $600 in 2016. These rates are reasonable, as is the $50 increase in the later award.

         The City argues that a reasonable hourly rate for Mauck is $450, which appears to be primarily based on the Legal Services Agreement entered into for this case between World Outreach and its attorneys. The Legal Services Agreement, entered into in 2006, does not account for the delay in payment, however. See Pickett v. Sheridan Health Care Ctr., 813 F.3d 640, 647 (7th Cir. 2016) (“Since payment for services in civil rights litigation often comes by court order years after the services were performed, the court must account for the delay in payment of attorney's fees. To account for delay, a district court … may calculate the fee award for services rendered in prior years using the attorney's current hourly billing rate. Or it may calculate the fee award using the hourly rate the lawyer charged at the time the lawyer performed the services for the client (the ‘historical rate') and add interest to that amount.” (citations omitted)).

         Six hundred dollars per hour is a $150 increase over ten years, which is reasonable. Although higher than fee awards in other RLUIPA cases, Mauck's services have recently been valued at that level. Further, many of these other RLUIPA fee awards were issued in less expensive legal markets than Chicago. The evidence of fee awards in RLUIPA cases from more expensive-and, thus, more comparable to Chicago-legal markets suggests that Mauck's rate is reasonable. See, e.g., Congregation Rabbinical Coll. of Tartikov, Inc. v. Vill. of Pomona, No. 07 C 6304, 2016 WL 3030253, at *3-4 (S.D.N.Y. May 25, 2016) (accepting the plaintiff's requested blended hourly rate of $375 as reasonable, but finding that the rate falls below the reasonable rate generally received for complex litigation in the Southern District of New York and significantly below the $700 per hour that the defendant's RLUIPA counsel was charging its client).

         2.Andy Norman

         A reasonable rate for Mr. Norman is $550 per hour. World Outreach provided sufficient support for this rate based on the past fee awards cited in Norman's declaration. The City counters that such a rate cannot be supported because Norman regularly charges paying clients substantially less. The argument does not recognize the distinction noted above between what nonprofit counsel may charge a client and what is a reasonable market rate for services. The argument also does not take into account that the other cases the City cites were not as complicated as this one.

         3. Noel W. Sterett

         A reasonable rate for Mr. Sterett is $400. His declaration demonstrates significant RLUIPA litigation experience. Additionally, Sterett's services were recently valued in The King's Tabernacle at $400 per hour. While Sterett believes he is entitled to an additional $25 in this case, he does not provide any support for this increase. Further, in 2011, Sterett's services were valued at $300 in Power of Praise. The $100 jump in that rate from 2011 to the present is commensurate with Sterett's increased experience, which was on display in the case. While the City proposes a rate of $225 per hour, that rate is inconsistent with Sterett's expertise and the rate of similarly skilled RLUIPA attorneys.

         4. Richard C. Baker, Richard S. Bell, J. Lee McCoy, Jr., Amy J. Parrish

         Reasonable rates for Mr. Baker, Mr. Bell, Mr. McCoy, and Ms. Parrish are $500, $400, $300, and $300, respectively. These rates reflect World Outreach's proposal for Baker and Bell-which are supported by their experience and are consistent with the fee awards that Mauck, Norman, and Sterett have been granted in other RLUIPA cases-but are $50[5] less than World Outreach's proposed rates for McCoy and Parish.[6] The proposed rates for McCoy and Parrish are inconsistent with a reasonable current rate for the type of work that they actually performed in this case.

         From Norman's declaration it appears that McCoy did not begin to work on RLUIPA cases until he joined Mauck & Baker, which coincided with the beginning of this case. Given the enormous number of hours that McCoy spent on this litigation (in excess of 2, 000), it appears that he was a novice at the time, as the City points out in their specific objections to the type of work he performed. Given the work performed, the $300 rate that was established in Power of Praise in 2011, remains an adequate rate here. The same is true of Parrish. In Power of Praise, her services too were valued at $300 per hour, and World Outreach has provided no information that would justify a higher fee in this case based on the type of work that she performed here.

         B. ...


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