Houston v. City of Cocoa Plaintiffs' Objections to the Magistrate's Report and Recommendation

    IN THE UNITED STATES DISTRICT COURT 
FOR THE MIDDLE DISTRICT OF FLORIDA 

ORLANDO DIVISION

BEATRICE HOUSTON, et al. , )
)

Plaintiffs, )
vs. ) CIVIL ACTION

) NO. 89-082-CIV-ORL-19 
THE CITY OF COCOA, et al., )

)
Defendants. )

_____________ )
PLAINTIFFS' OBJECTIONS TO THE 

MAGISTRATE'S REPORT AND RECOMMENDATION

Plaintiffs object to the Magistrate's Report and 

Recommendation ("Report") as follows:
1. The Magistrate's recommendation of a 46% reduction 

in plaintiffs' fee because of alleged inefficiency 
is excessive.

2. Even if the Magistrate did not err in recommending 
a reduction in the hourly rate because of 
inefficiency, his reduction is excessive and below 
the market rate for less experienced lawyers.

3. The Magistrate's reduction of lawyer consultation 
time by 75% is excessive.

4. The Magistrate erred in recommending that the time 
on fee litigation be reduced from 567.4 hours to 
200 hours.

5. The Magistrate erred in not holding an evidentiary 
hearing.

6. The Supreme Court's decision in City of_Burlington— vu_
Dague requires the court to take evidence and rule upon 
the hourly rate for contingent fees.

7. The Magistrate made one technical error which should be 
corrected.

1



A. INTRODUCTION

At the outset, it is important to note that plaintiffs are 

sensitive to the admonition that fee applications should not result 

in a second major litigation, Hensley v. Eckerhard, 461 U.S. 424, 

437 (1983), and understand the extraordinary demands placed upon

this court by this fee application. Nevertheless, it is defendants 

—  not plaintiffs -- who have converted this application into a 

second major litigation by contesting every conceivable issue from 

plaintiffs' status as prevailing party to the reasonableness of the 

hours and rates and by deposing plaintiffs' counsel in New York, 

Washington, D.C., San Antonio, and Cocoa.
B. PLAINTIFFS' OBJECTIONS

1. The Magistrate's draconian reduction for 
inefficiency is excessive.

This lawsuit produced a remarkable settlement for the 

plaintiffs based on a number of legal theories. One illustrative 

example of the complexity and difficulty of the case is the 

"expulsive zoning" claim. Before this lawsuit, plaintiffs 

historic black neighborhood* had for years been zoned by the City of 

Cocoa to allow incompatible and disruptive non-residential uses. 

At the same time, comparable white neighborhoods were zoned in such 

a way as to preserve their residential character. This zoning 

resulted in the replacement of residential uses by commercial or 

industrial uses, and the displacement of Neighborhood residents. 

Professor Rabin refers to this practice as expulsive zoning. 

(Affidavit of Yale Rabin, n  3-7, PX 18) Prior to this case, there 

had been no case in which the issue of expulsive zoning had been

2



litigated- "This case, therefore, was on the frontier of zoning 

theory." (Id./ 118).1
This lawsuit was filed on February, 1989 as a class action 

setting forth , twelve2 claims for relief challenging the 

longstanding actions of defendants to eliminate the historic black 

neighborhood of Cocoa and displace the plaintiff residents from 

their affordable homes. Negotiations with defendants and initial 

discovery began nearly a year prior to the date the complaint was 

filed. Defendants' refusal to adopt any alternative to the 

destruction of the neighborhood led to the preparation of this suit 

and the initiation and prosecution of two related administrative 

proceedings.
While attempting to reach a settlement, plaintiffs conducted 

an exhaustive investigation of the claims and likely defenses. 

Unlike many cases where discovery is the key fact-gathering device, 

plaintiffs here were able to utilize the state Public Records Act 

and the federal Freedom of Information Act. Thousands of public 

documents were reviewed and dozens of potential witnesses were

1 The difficulty in documenting the facts to show that 
expulsive zoning had occurred and that it was race-based is 
described in the Supplemental Declaration of J. Koons, (PX 30), at 
5. The complexity of the law governing this claim is discussed in 
the Supplemental Declaration of P. Hair, (PX 30).

2 The Magistrate criticizes plaintiffs for asserting 
different causes of action which would have yielded the same 
relief. Report at 6, n.3. The Magistrate fails to note that 
although the causes of action might have yielded_similar relief, 
the elements of liability were very different. Given the novelty 
and uncertainty of each cause of action, the assertion of twelve 
causes of action was reasonable and, in fact, evidences the high 
level of competence of plaintiffs' counsel.

3



interviewed during this eighteen month period. (Affidavit of 

Judith Koons, 5J4 , PX 3) The record reflects not only the legal and 

factual intensity of the case but also the magnitude of the 

challenge facing plaintiffs to bring this case from the initial 

conceptual Agreement in Principle to the approval of the Consent 

Decree and the adoption of the Zoning Ordinance, the Housing 

Rehabilitation Program, and the Comprehensive Plan Amendments. As 

noted by Professor Rabin:
Plaintiffs in this case obtained relief on theories which 
heretofore had never been tested. The relief obtained 
for plaintiffs is outstanding: $675,000 for single­
family housing rehabilitation; low density residential 
zoning; affirmative action to seek and maintain rental 
rehabilitation; a program to construct new homes for very 
low income residents; a neighborhood community center; a 
historic preservation plan that recognized the historic 
significance of Cocoa's black neighborhood (including the 
designation of Richard E. Stone Historic District); and 
(the only item noted by defendants) an aggregate sum of 
$20,000 for dismissal with prejudice^ of the class 
representatives' individual damages claims.

Affidavit of Yale Rabin, 51 11.
Nearly three years were consumed in this effort to obtain

relief for the plaintiffs. Plaintiffs' Application for Attorneys'
*

Fees, Costs and Expenses accurately denotes that time and effort 

which were expended to bring relief to the class. During this 

nearly three year time span, the vast majority of the work done on 

this case was divided among three groups of lawyers who have 
nationally recognized expertise and reputations in civil rights and 

environmental litigation. These lawyers carefully allocated their 

duties and responsibilities for their work on this case so that 

their combined efforts would not be duplicative.

4



The lawyers in this case spent a significant amount of time 

preparing the case so that plaintiffs could, prevail by way of 

settlement rather than protected litigation- Our circuit has 

specifically commented on the skills of those lawyers who prepare 

their case well enough in advance that they prevail by way of 

settlement rather than full scale, multi-year litigation:

At the beginning of a case skill is manifested in the 
kind of judgment shown in case assessment. This is 
evidenced by efforts where feasible to seek dispute 
resolution without litigation, or if litigation appears 
necessary, by the decisions on theories to be included 
and parties to be sued.
From the beginning and throughout a case, expertise in 
negotiations and tactics often advances a client's cause 
more quickly and effectively than the sustained and 
methodical trench warfare of the classical litigation 
mode.

Norman v. Housing Authority of City of Montgomery, 836 F.2d 1292,

1300 (11th Cir. 1988).
Several significant pro-plaintiff rulings were made by the 

Court in the Order denying Defendants' Motion to Dismiss.3 

Moreover, this case bears a number of novel features. See Appendix 

A to Plaintiffs' Reply to * Defendants' Response In Opposition to

3 The Court's ruling on standing has not only legal but 
societal significance. Minority residents in the position of 
plaintiffs may not be limited solely to relocation benefits but may 
enjoy legal standing to seek to enjoin the threat of destruction of 
their community. Further, granting recognition to the legal 
relationship between civil rights and environmental claims may be 
a ruling of first impression, which may serve to protect other 
minority communities singled out for development that adversely 
impacts the environment. K. Coplan, Protecting—Minority—Communi­
ties With Environmental, Civil Rights Claims, New York Law Journal, 
August 20, 1991, p. 1. [The Houston case "shows how civil rights 
and environmental claims may not be merely consistent, but 
complementary."] (PX 19)

5



Plaintiffs' Application for Attorneys' Fees and Costs, Affidavits 

of Y. Rabin and F. Roisman.
A court may not reduce a fee award because of his common 

sense" and experience as a lawyer and judge without identifying the 

hours disallowed and explaining why an award for each hour would be 

improper. Carmichael v. Birmingham Saw Works, 814 F.2d 590, 592 

(11th Cir. 1987); see Norman, 836 F .2d at 1304; Perkins, 847 F.2d 

at 7 38. Hours may not be deducted unless the court determines that 

the profession generally would not bill at all "for the type of 

activity or for the quantity of time devoted to the activities. 

Perkins, 847 F.2d at 738; see Norman, 836 F.2d at 1306. "Sworn 

testimony that, in fact, it took the time claimed is evidence of 

considerable weight on the issue of the time required in the usual 

case and therefore, it must appear that the time claimed is 
obviously and convincingly excessive under the circumstances. 

Perkins, 847 F.2d at 738.
The plaintiffs' fee application requests compensation for over 

4,000 hours for services expended through December 16, 1990 on this 

litigation. Each of the attorneys for whom compensation is sought 

submitted an affidavit in which he or she swears that the time 

included in the fee application is the actual time required to 

perform the task described in the application. Plaintiffs prepared 

a detailed summary of the hours spent by each attorney, breaking 

the time into categories such as fact-gathering, legal research and 

complaint drafting. See Appendix B to Plaintiffs' Reply dated 

February 28, 1992. Thus, under the Eleventh Circuit's directive in

6



Perkins, the Court should not deduct time unless the time claimed 

is "obviously and convincingly excessive under the circumstances. 

Perkins, 847 F.2d at 738.
Following the urging of both the Supreme Court and our circuit 

(Id. at 1301), the plaintiffs' lawyers exercised billing judgment 

in their fee application. For example, Ms. Koons does not seek any 

compensation whatever for the 977.6 hours in time spent in her 

successful state administrative work concerning the Comprehensive 

Plan,4 67.1 hours for implementing the historic preservation plan, 

23.9 hours for community organizing, 55.5 hours expended in the 

attempted intervention proceeding, and 89.5 hours for other time 

such as working with the media, for a total reduction of 1,213.6 

hours.
Because of alleged insufficiency, the Magistrate recommends a 

draconian reduction in the compensation of plaintiffs' counsel. 

The Magistrate recommends both a huge reduction (840 hours) in the 

number of hours to be compensated and further cuts plaintiffs' fee

by 33 percent. When the Magistrate's recommended reductions are
*

totalled, they add up to 2021 hours, or 46 percent of the time 

spent by plaintiffs' counsel on the merits of the case.5 (This

4 Plaintiffs' counsel's time spent on state administrative 
work would be compensable where, as here, those^ "proceedings took 
the form of developing a theory of the case, filing a complaint, 
gathering evidence, and engaging in settlement negotiations. 
ECOS, Inc, v. Brinegar, 671 F. Supp. 381, 393 (M.D. N.C., 1987).

5 Although the recommended 33% reduction is characterized 
as a reduction in the hourly rates of plaintiffs'^counsel, it is 
the equivalent of a 33% across-the-board reduction in the number of 
hours to be compensated. The 33% reduction thus translates into 
exclusion of 1181 hours (33 percent times 3878 hours). When added

7



does not include further reductions recommended by the Magistrate 

in compensation for time spent on the fee litigation. Those 

reductions are discussed in Point 3 below).
Such a huge reduction in plaintiffs' compensation amounts to 

a double penalty for alleged inefficiency and is excessive. The 

fact that the Magistrate's recommendation exacts a double penalty 

is illustrated by the treatment of time spent preparing the 

Complaint. The Magistrate uses the fact that plaintiffs' attorneys 

spent approximately 250 hours preparing the Complaint to justify 

the 33% across-the-board reduction in compensation.6 7 Yet, those 

250 hours include many conferences and meetings about the 

Complaint, during which plaintiffs' counsel brainstormed about 

legal theories and coordinated their efforts. The Magistrate 

recommends a separate 75 percent reduction in hours spent in 

attorney conferences, thereby exacting a double penalty.

to the 840 hours excluded by the Magistrate, the total reduction is 
equal to 2021 hours or 46 percent of time spent by plaintiffs 
counsel.

6 Plaintiffs' counsel explained that hours billed to 
Complaint preparation also included valuable trial preparation 
activities. See PX 30 p. 15 1̂30 (Supp. Decl. of P. Hair) . For 
example, plaintiffs' first draft of the Complaint set out the facts 
in such detail that this document was retained to serve as the 
Plaintiffs' trial notebook. Ic|» The Complaint in later drafts was 
edited to eliminate this factual detail, but the work was 
nonetheless extremely valuable to the litigation. Therefore, 
although 250 hours seems high for the drafting of the Complaint, in 
fact it is a reasonable amount of time for the work that was 
accomplished.

7 See Cunningham v. County of Los Angeles, 879 F .2d 473,
488 (9th Cir. 1988) (reversing district court reduction in 
lodestar because it represented "a double penalty for the modest 
success of the lawsuit").

8



Plaintiffs continue to believe that the total number of hours 

expended on this complex and novel litigation is extremely 

reasonable. However, assuming arguendo, that some reduction for 

inefficiency or duplication will be imposed, a draconian 46 percent 

reduction is much too high. The Eleventh Circuit has made clear 

that the preferred method for dealing with alleged inefficiency or 

duplication is for the Court, aided by the party opposing the fee, 

specifically to identify excessive time. Perkins, 847 F.2d at 738; 

Norman, 836 F.2d at 1304; Carmichael, 814 F.2d at 542. In this 
case, the defendants and the Magistrate have specifically 

identified only a few activities as having taken too much time.
The bulk of the Magistrate's proposed reduction is the general 

feeling that plaintiffs' counsel were inefficient. Reductions of 

the basis of such vague beliefs are generally disfavored. Although 

there is one case in this Circuit, Perkins v. Mobile Housing Bd., 

847 F .2d 735 (11th Cir. 1988), that appears to support an across- 

the-board reduction, that case did not specify any particular 

percentage to be deducted. Plaintiffs suggest that a 5 to 10 

percent reduction is all that can be justified by a general feeling 

of inefficiency or duplication. For example, in Daggett— vj_ 

Kimmelman, 811 F.2d 793, 797-98 (3rd Cir. 1987), the Court affirmed

a 10 percent across-the-board reduction for duplication but found 

this reduction to be a "close question" because specific 

identification of hours is preferred. The Court specifically 

relied upon the fact that only a "slight" across-the-board 

reduction had been made and distinguished a 50 percent reduction.

9



In the alternative, even assuming that the Court accepts the 

Magistrate's general theory that the hourly rate can be reduced to 

the "market rate charged by lawyers of less skill and experience, 

there is no basis in the record to support the hourly rates reached 

by the Magistrate: $117.25 per hour for senior attorneys and

$83.75 per hour for staff attorneys. See Report at 19, n. 15.

2. The Magistrate erred in recommending that the 
hourly rate for plaintiffs' counsel be reduced to 
the market rate charged by lawyers of less skill 
and experience.

The Magistrate determined that the reasonable rate for

experienced lead counsel is $175 per hour and for less experienced 

supporting attorneys the rate is $125 per hour. Report, p. 8. He 

further found that because the litigation was not handled 

efficiently, the hourly rate could be reduced to the "market rate 

charged by lawyers of less skill and experience," Id. p. 12, which 

in this case he had previously determined to be $125 per hour. 

However, he reduced the hourly rate for experienced counsel by 33% 

to $117.25 per hour, which is below the market rate charged by

lawyers of less skill and experience. This reduction is not only

erroneous as a matter of law because it is below market rate, it is 

also excessive. See Daggett v. Kimmelman, 617 F. Supp. 1269, 1280 

81 (D.N.J. 1985) aff'd in relevant part, 811 F.2d 793, 797-98 (3d 

Cir. 1987) (acknowledging appropriateness of several attorneys 

participation in strategy sessions, but applying 10 percent across- 

the-board reduction in award for duplication of effort).

10



3 . The Court erred in reducing lawyer consultation 
time by 75%.

Even though the Magistrate found that this was a faxrly 

complex case and the legal work of good quality, Report, p. 6, he 

determined that the 985 hours billed for intra-lawyer conferencing 

resulted in "inefficiency," Report, p. 14, and recommended 

disallowance of 75 percent or 738.75 hours.
The work of multiple attorneys on the same activity is 

justified in difficult or complex cases such as this that require 

a litigation team approach. See, e .q ._, Probe v.— State Teachers., 

Retirement Sys. , 780 F.2d 776, 785 (9th Cir. 1986) (Title VII suit) 

(stating that "in an important class action litigation such as 

this, the participation of more than one attorney does not 

constitute an unnecessary duplication of effort"), Boston & Maine 

Coro. v. Moore, 776 F.2d, 7-8 (1st Cir. 1985) (bankruptcy

proceeding); New York State Ass'n for Retarded Children v. Carey, 

711 F .2d 1136, 1146-47 (2d Cir. 1983); Ramos v. Lamm, 632 F. Supp. 

376, 383 (D. Colo. 1986) (multiple attorneys in complex

institutional reform litigation); Spell v, McDaniel, 616 F. Supp.T ♦
1069, 1093 (D.C.N.C. 1985); Williamsburg Fair Hous.— Comm, v.— Ross- 

Rodnev Hous. Corp., 599 F. Supp. 509, 518 (S.D.N.Y. 1984); Roe JL 
City of Chicago, 586 F. Supp. 513, 514 (N.D. 111. 1984) (dictum).

The use of multiple attorneys is particularly appropriate in 

a "documents" case such as this in order to "manage the logistics 

of handling a paper blizzard." Id.,_ (See Affidavit of Judith 
Koons, 114, PX 3) It is reasonable for several attorneys to 

participate in strategy meetings and discussions in complex cases.

11



Rprhprpna v. Coler, 753 F.2d 629, 633 (7th Cir. 1985); Shakman_v^ 

np.mocratic Ora, of Cook County, 634 F. Supp. 895, 902 (N.D. 111.

1986) (finding no duplication of effort in frequent telephone 

conferences between plaintiffs' attorneys when the "size and 

complexity of the case certainly would require conferences between 

plaintiffs' attorneys for coordination and strategy"); Williamsburq 

Fair Hous. Comm, v. Ross-Rodney Hous. Corp^, 599 F. Supp. 509, 518, 

Trujillo v. Heckler, 596 F. Supp. 396, 401 (D. Colo. 1984).
Obviously, however, there "is a limit to how many attorneys 

should be paid to discuss strategy and plan the lawsuit." May v. 
Cooperman, 582 F. Supp. 1458, 1461 (D.N.J. 1984); see also In_^e

Olson, 884 F.2d 1415, 1429 (D.C. Cir. 1989) (reducing fee award

under Ethics in Government Act, 28 U.S.C. §593(f)(l), because of 

excessive number of intra-firm "strategy" conferences attended by 

numerous attorneys, by 10 percent); Keith v. Volqe, 644 F. Supp. 

1317, 1324 (D.C. Cal. 1986) (in order to eliminate the excessive

time spent by plaintiffs' attorneys' conference time by nearly 20

percent).
If there is to be * a reduction in hours for lawyer 

conferencing, plaintiffs suggest that a reduction in the range of 

10 to 20 percent would be less unreasonable than the 75 percent

reduction recommended by the magistrate.
4. The Magistrate erred in recommending that the time 

on fee litigation be reduced from 567.4 hours to 
200 hours.

The Magistrate recommended that of the 567.4 hours spent on 

fee litigation, only 200 hours should be compensable. The 200

12



compensable hours apparently represent the 110 hours spent on the 

initial petition and 90 hours spent on preparation of the 

supplemental petition and mediation. Report, p. 23.
The Magistrate recommends disallowal of the remaining 367.4 

hours spent on discovery, supplementing the initial petition, and 

preparing various motions which he found to be without merit. This 

recommendation should be rejected. First, the "mere statement that 

[those] hours are excessive without an explanation for deducting 

hours claimed" is inadequate. Gilmere— v.— City— of— Atlanta, 931

F . 2d 811, 815 (11th Cir. 1991).
Second, it was the defendants, not plaintiffs, who forced 

plaintiffs to spend over 100 hours on discovery by taking 
depositions in New York, Melbourne, San Antonio, and Washington, 

D.C. While the Magistrate correctly noted that plaintiffs' initial 

petition lacked "a summary, grouping time entries by the nature of

the activity or state of the case," Norman v ._Housing Authority of

G-itv of Montgomery, 836 F.2d 1292 , 1303 ( 11th Cir. 1988), there is 

no requirement that such a summary be prepared. Plaintiffs

counsel were "not required to record in great detail how each 

minute of [their] time was expended", but "at least . . . should

identify the general subject matter of [their] time expenditure. 

Henslev v. Eckerhart, 461 U.S. 424 , 437, n. 12. Plaintiffs

petition clearly identified the general subject matters of their 

time expenditures and met the requirements of Hensley..
Third, even if such a summary were required, there is no 

evidence that such a summary would have obviated the extensive

13



discovery conducted by defendants especially, where as here, 

defendants hotly contested every fee issue, including the

threshhold issue of prevailing party.
Fourth, the hours spent on unsuccessful motions was 

productive. As noted above, defendants hotly contested every issue 

in this fee litigation. They even contested plaintiffs' status as 

a prevailing party, which plaintiffs responded to in their Motion 

to Strike Portion of Defendants' Response on the Prevailing Party

Issue. Defendants also submitted affidavits from various lawyers, 

who while well respected, simply lacked the experience in complex 

civil rights litigation which would qualify them to render an 

opinion as to the amount of plaintiffs' fees. While plaintiffs' 

Motion to Strike Their Affidavits was denied, the motion was 
productive to the extent that it identified the insufficiency of 

those affidavits and resulted in opinions therein being rejected, 

in substantial part. The time spent on those motions, even if they 

were denied, is fully compensible. Hensley v. Eckerhart, 461 U.S. 

424, 435 "[T]he court's rejection of certain grounds is not a 

sufficient reason for reducing a fee. The result is what 

matters."]
5. The Magistrate erred in not holding an evidentiary 

hearing.
Plaintiffs rely on their Request for Evidentiary Hearing and 

Memorandum of Law.
6. The Supreme Court's decision in City_of— Burlington— v̂ _

Dacrue requires the court to take evidence and rule upon 
the hourly rate for contingent fee cases.

Although the Supreme Court's in City of Burlington v_.— Daque,

14



505 U.S. ___ 112 S.Ct. 2638 (1992) held that enhancement for the

risk of contingency is inappropriate under federal fee-shifting 

statutes, the Court did not prohibit compensation for the 

contingency risk. Rather, the Court indicated that such 

compensation is appropriately factored into the lodestar.

Accordingly, plaintiffs abandon their request for a 

contingency enhancement to the lodestar. Consistent with the 

Supreme Court's opinions, including Dague, plaintiffs seek a 

lodestar calculated with the hourly rates expected and realized by 

attorneys who take cases on a contingent fee basis in the Middle 

District of Florida. This prevailing market rate for contingent 

fee cases is the appropriate hourly rate to be used in the lodestar 

calculation for an award of attorneys' fees to comparably skilled 

attorneys performing comparable work in a civil rights case.
It is well settled that lodestar calculations must be based on 

the prevailing market rates in the relevant community, regardless 

of whether plaintiff is represented by private or nonprofit 

counsel. Blum v. Stenson, 465 U.S. 886, 895 ( 1984). See— also 

Copeland v. Marshall, 641 F.2d 880, 890-900 (D.C. Cir. 1980) (en 

banc) (attorneys in civil rights cases must be paid the full value 

their efforts would receive on the open market in other cases); 

Save Our Cumberland Mountains, Inc, v. Hodel, 857 F.2d 1516, 1521, 
1524 (D.C. Cir. 1988) (prevailing market rate awarded to attorneys 

who charge below market rates). Although many contingency fee 

attorneys do not usually charge by the hour, the expert testimony 

will demonstrate that the prevailing compensation for an attorney

15



who takes a case on a contingent basis, expressed as an hourly 

rate, is at least twice the prevailing market rate for attorneys of 

comparable skill who take their cases on a non-contingent basis.8

This is particularly evident with attorneys who take both 

contingent and non-contingent cases. These attorneys have, in 

effect, two different rates.9
The evidence which plaintiffs' expert has gathered thus far

shows that the risk factor is incorporated into the effective

prevailing market rate for lawyers who work on a contingent fee

basis, resulting in a higher rate. Justice Scalia recognized this

principle in his majority opinion in Dague:
The risk of loss in a particular case (and, 
therefore, the attorney's contingent risk) is

8 This fact has been recognized by judges and others 
examining the economic realities of the contingent fee market. As 
Justice Brennan stated in Blum, "[l]awyers operating in the 
marketplace can be expected to charge a higher hourly rate when 
their compensation is contingent on success than^when they will be 
promptly paid[] irrespective of whether they win or lose." 465 
U.S. at 903 (Brennan, J., concurring). See also Samuel R. Berger, 
Court Awarded Attorneys' Fees: What is "Reasonable?", 126 U. Pa. 
L. Rev. 281, 324-25 ( 1977) ("The experience of the market place 
indicates that lawyers + generally will not provide legal 
representation on a contingent basis unless they receive a premium 
for taking that risk"). Accord Richard A. Posner, Economic 
Analysis of Law, §21.9, at 534-35 (3rd ed. 1986).

9 One recent contingent fee agreement which has been widely 
reported is the agreement between the law firm of Cravath, Swaine 
& Moore and its client, the Federal Deposit Insurance Corporation. 
See Rifka Rosenwein, Legal Times, June 3, 1991 at 19. The FDIC 
agreed to pay Cravath attorneys less than the firm's^ usual rate. 
However, if Cravath collects more than $200 million for the 
government, the rates for Cravath's lead attorneys, Thomas Barr and 
David Boies, will double (from $300 and hour to $600 an hour) for 
all of the work done toward achieving the $200 million. Other 
Cravath attorneys rates will also increase. A proposed settlement 
between the FDIC and Drexel Burham Lambert, Inc. reportedly exceeds 
the $200 million threshold. Id.

16



the product of two factors: (1) the legal
and factual merits of the claim, and^(2) the 
difficulty of establishing those merits. The
second factor, however, i_s-- o^din a r j.ly
reflected in the lodestar either in the
number of hours expended to overcome the
difficulty, or in the higher hourly_rate— of
the attorney skilled and experienced to do so.

Dague, 112 S. Ct. at 2641 (emphasis added). The parties in Dague 

also recognized that compensation expected from a contingent fee 

case should be reflected in the lodestar. Petitioner in Dague, the 

City of Burlington, argued in its brief that the risk of non­

payment is properly to be subsumed with the setting of the hourly 

rate used to generate the lodestar fee amount. Dague, Amici Curiae 

Br. at 16-17 (citing Pet. Br. at 9, 17-18) . See also Pennsylvania. 

v. Delaware Valley Citizens' Council for Clean Air, 483 U.S. 711, 

726 (1987) ["Delaware Valley II"1 (degree of risk of a particular 

lawsuit is incorporated into the lodestar amount by determining 

what the reasonable hourly rate should be); King .v .— Palmer, 950 

F .2d 771, 776 (1991). (Lodestar is "steadily subsuming most other 

factors into that single calculation") (citations omitted).10

Plaintiffs are not advocating that their attorneys' fees 

should be enhanced above and beyond what the prevailing market rate 

is for attorneys taking cases on a contingent fee basis. The 

market rate for contingent fee attorneys, however, takes into

i° in King one judge " recognize [ d ] that the contingency 
factor could be accounted for within the initial lodestar 
calculation." 950 F.2d at 789 (Edwards, J., dissenting). Thus, 
"[al court could simply enhance the 'reasonable' hourly rate used 
in calculating the lodestar and forego postlodestar adjustments" 
Id.

17



account several considerations not pertinent to attorneys who are 

paid regardless of the outcome. Cf._ Missouri v. Jenkins, 491 U.S. 

274, 286 (1989) (reasonable fee is to be "calculated on the basis 

of rates and practices prevailing in the relevant market) (emphasis 

added); Blum, 465 U.S. at 895 ("'reasonable fees'. . . are to be 

calculated according to the prevailing market rates in the relevant 

community") (emphasis added).
Plaintiffs also are not advocating one market rate for all 

attorneys who take cases on a contingent basis. CJL. Delaware 

Valiev II, 493 U.S. at 731 (O'Connor, J., concurring) (contingency 

enhancement should be based on the difference in market treatment 

of contingent fee cases as a class.") (emphasis in original). The 

Supreme Court in Daque stated that the factors relevant to a 

contingent fee should be reflected in the lodestar. See 112 S. Ct. 

at 2642. Plaintiffs assert that, when contingency fees are 

converted into hourly rates, the variations among attorneys wrll 

reflect the level of skill of the attorney and/or the degree of 

difficulty of a particular case -- as do the billing rates of 

attorneys paid on a non-contingent basis -- plus the additional 

factors of risk of nonpayment and deferment of payment inherent in 

contingent fee cases.
The reasons underlying the Supreme Court's and the D.C. 

Circuit's reluctance to endorse a contingency enhancement do not 

apply here. For example, there is no "double-counting"11 by using

11 Justice Scalia's majority determined that if risk of loss 
is reflected in the lodestar calculation by using a higher hourly 
rate, "[t]aking account of it again through lodestar enhancements

18



the market rate for lawyers hired on a contingent fee basis; risk 

is included, but only once —  in the lodestar calculation. 

Further, it is not necessary for a plaintiff to prove, after 

prevailing, that he or she had difficulties in obtaining counsel 

without a contingency enhancement;12 as noted above, thrs 

difficulty is already incorporated into the prevailing market rate 

for contingency fee cases. Finally, the fact that a contingency 

enhancement cannot be determined with complete accuracy is 

irrelevant if a contingency fee rate is used in the lodestar 

calculation.13 "Contingency enhancement is a feature inherent in 

the contingent-fee model (since attorneys factor in the particular 

risks of a case in negotiating their fee and in deciding whether to

accept the case)".14 15
Plaintiffs respectfully request that this Court adopt the 

hourly rate which attorneys expect and realize in similar 

contingent fee cases. This is consistent with Daque and other 

Supreme Court precedent requiring that all relevant factors be 

considered in calculating the prevailing market rate.
♦v

[would] amount to double-counting." Id. at 2641.

12 See King. 950 F.2d at 780.
13 See Delaware Valley II, 483 U.S. at 722

14 Dague, 112 S. Ct. at 2643.
15 E.g. Hensley, 461 U.S. at 435 (reasonable fee must be a 

"fully compensatory fee").
19



7 . The Magistrate's Report and Recommendation Contarns A 
Calculation Error That Must Be Corrected.

Even accepting the Magistrate's 33 percent across-the-board 

reduction in hourly rates, the Magistrate's calculation of the 

revised hourly rates includes a mathematical error that must be 

corrected. At page 19, footnote 15, the Magistrate sets out the 

calculation of the dollar amount of the fee award. The Magistrate 

states that all hourly rates should be reduced by 33 percent. 

Applying this reduction to the staff attorney rate of $125, the 

Magistrate reaches a revised rate of $70.35. However, when $125 is 

reduced by 33 percent, the result is $83.75. Correction of this 

mathematical error results in an increase in the fee award of 

$17,260.16
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy hereof has been 

furnished, by U.S. Mail, to all counsel indicated on the attached 

mailing list, on this /# day of November, 1992.

Respjectfully submitted,

’ * ILL— — _____________
Jafoes K. Green, Esq.
JAMES K. GREEN, P.A.
One Clearlake Centre, Suite 1300 
250 Australian Avenue South 
West Palm Beach, FL 33401 
(-407) 659-2009 
Fla. Bar No. 229466

16 $13.4 per hour (Magistrate's mathematical error) times
36% times 3578 hours.

20



and
Penda D. Hair, Esq.
NAACP Legal Defense and Educational 
Fund, Inc.
1275 K Street, N.W., Suite 301 
Washington, D. C. 20005 
(202) 682-1300
COUNSEL FOR PLAINTIFFS

❖*

21



BEATRICE HOUSTON, et al., Plaintiffs 
vs. THE CITY OF COCOA, et al., Defendants 
CIVIL ACTION NO. 89-082-CIV-ORL-19

MAILING LIST

Frank M. Bedell, Esq.
MATHEWS, SMITH & RAILEY, P.A.
801 Firstate Tower 
255 South Orange Avenue 
P.O. Box 4976 
Orlando, FL 32802-4976

Bradly Roger Bettin, Esq.
AMARI, THERIAC, ROBERTS 

AND RUNYONS, P.A.
96 Willard Street, Suite 302 
Cocoa, Florida 32922

B.J. Owens, Esq.
CENTRAL FLORIDA LEGAL SERVICES, INC.
Rockledge Plaza, Suite F 
1255 South Florida Avenue 
Rockledge, FL 32955
Julius Levonne Chambers, Esq.
Alice L. Brown, Esq.
NAACP Legal Defense and Educational Fund, Inc. 
99 Hudson Street, Suite 1600 
New York, New York 10013

Penda D. Hair, Esq.
NAACP Legal Defense and Educational Fund, Inc. 
1275 K Street, N.W., Suite 301 
Washington, D. C. 20005

Jean M. McCarroll, Esq.
Karl Coplan, Esq.
BERLE, KASS & CASE 
45 Rockefeller Plaza, Suite 2350 
New York, New York 10011

Jon C. Dubin
St. Mary's University Law School
One Camino Santa Maria
San Antonio, TX 78228-8602

Judith E. Koons, Esq.
The University of Mississippi Law Center 
Housing Law Clinic 
P.O. Box 8048
University, Mississippi 38677

James K. Green, Esq.
JAMES K. GREEN, P.A.
One Clearlake Centre, Suite 1300 
250 Australian Avenue South 
West Palm Beach, FL 33401