K.W. v. Armstrong

K.W., by his next friend D.W., et al., Plaintiffs, v. RICHARD ARMSTRONG, et al., Defendants.

TOBY SCHULTZ, et al., Plaintiffs, v. RICHARD ARMSTRONG, et al., Defendants.

Nos. 1:12-cv-00022-BLW, 3:12-cv-58-BLW

United States District Court, D. Idaho

August 17, 2021

MEMORANDUM DECISION AND ORDER

B Lynn Winmill United States District Judge

INTRODUCTION

Before the Court are competing attorneys' fee motions. See Dkts 433, 435. Plaintiffs ask for an award of $115, 730. Defendants ask for roughly $99, 000. The Court has reviewed the briefing, as well as the letters submitted by class members during the recent weeks. See Dkts. 455-59. For the reasons explained below, the Court will grant plaintiffs' motion and deny defendants' motion.

BACKGROUND

The Court certified a class of disabled adults to challenge the budget tool, notice form, and hearing procedures. After the Court granted summary judgment in plaintiffs' favor, the parties settled the class claims. In the Class Action Settlement Agreement, approved by the Court on January 12 2017, the Department agreed to develop a new budget tool and to keep plaintiffs' benefits at their prior high level until the new budgets could be approved and implemented. As part of the settlement, the Department set a goal of developing and implementing the new budget tool within 24 months. See Dkt. 306, -1, at 8-9.^[1] If the Department failed to implement the new tool within three years (no later than January 2020), the plaintiffs could ask the Court “to set a reasonable completion deadline.” Id. at 9.

When the Department did not complete its work within 24 months, both sides asked the Court to impose their version of a reasonable completion deadline. In briefs that were filed before the COVID-19 pandemic began, the Department asked the Court to set a completion deadline of January 12, 2023, while plaintiffs wanted the Department to be done in 120 days. After the pandemic hit, the Department asked the Court to extend the completion deadline to January 2024. Plaintiffs asked the Court to send the parties to ADR.

Initially, the Court indicated it would impose a two-track deadline system, with one track being a longer deadline for the restructuring of services and the other track being a shorter deadline for creation of the new budget tool. See Dkt. 396. Later, though, the Court denied plaintiffs' request to send the parties to ADR and scheduled a hearing to resolve outstanding issues. Dkt. 420. In December 2020, after hearing the parties' arguments, the Court ordered a reasonable completion deadline of June 2022.

After the Court decided the reasonable completion deadline, both parties filed the pending motions for attorneys' fees. See Dkts. 433, 435. In an earlier order, the Court approved a form of notice, which informed the class about class counsel's efforts to obtain a fee award. See Dkt. 449.

ANALYSIS

The settlement agreement allows either party to seek an attorneys' fee award if the Court is called upon to resolve a dispute arising under the agreement. The relevant provision provides:

The Parties agree to bear their own attorneys' fees and costs relating to ordinary monitoring of and compliance with this Agreement and any orders or judgment that the Court enters with respect to this Agreement. However, either Party may petition the Court for an award of attorneys' fees and costs if the applicable dispute resolution or noncompliance procedures set forth in this Agreement fail and a motion, petition, or court decision or order therefore resolves a dispute arising under this Agreement (including disputes over approval, compliance, enforcement interpretation, modification, clarification, or termination under the Agreement). As to any such claims for attorneys' fees or costs, the Parties agree that the 42 U.S.C. § 1988 standard for fee awards will apply, including as to whether fees may be assessed against Plaintiffs, whether a Party is a prevailing Party entitled to an award, and the appropriate amount of an award.

Dkt. 306-1 at 34 (emphasis added).

According to this provision, the Court looks to 42 U.S.C. § 1988 to decide which party is the “prevailing party, ” whether fees can be assessed against plaintiffs, and the appropriate amount of any fee award.

1. Plaintiffs are the Prevailing Party

The Court's first task is to determine the “prevailing party.” Under 42 U.S.C. § 1988, “plaintiffs may be considered ‘prevailing parties' for attorney's fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983).

Here, both sides declare victory. Plaintiffs focus on the overall result -pointing out that after the latest round of motion practice, they have emerged with a deadline in hand: the Department must implement the new budget tool by June 2022. Before that ruling, plaintiffs had only “goals” and “estimated dates.” See Dkt. 306, at 7-8. Now they have a firm deadline. Plus, by securing that June 2022 deadline, plaintiffs were able to stave off two years' worth of delay that the Department insisted was necessary. In that regard, plaintiffs now report that “despite IDHW's [earlier] protestations that it would not be able to finish the budget tool before 2024, IDHW has now adjusted its schedule to meet the June 2022 deadline.” Motion Mem., Dkt. 433-1, at 5.

The Department, however, says it won the day, because plaintiffs asked for a much earlier “reasonable completion date” than they got. (To recap: Plaintiffs asked for 120 days from the date of the ruling; the Department said it needed until January 2024. The Court ruled in December 2020, allowing the Department until January 2022 (roughly 18 months) in which to complete the new budget tool.) The Department also correctly states that plaintiffs asked for other forms of relief which the Court denied. See Def. Mtn. Mem., Dkt. 435-1, at 8. The Court did not send the parties to ADR, and it did not put certain requested safeguards in place.

Given this record, the Department created an issue-by-issue wins-and-losses chart and chalked up more wins for itself. See Response, Dkt. 440, at 5-6. At one point, the Department even goes so far as to characterize plaintiff as having suffered a complete loss: “Plaintiffs had no success with their motion, and Defendants should not pay for Plaintiffs' unsuccessful motion.” Response, Dkt. 440, at 10.

The Court is not persuaded. First, the Supreme Court has counseled against such a “mathematical approach comparing the total number of issues in the case with those actually prevailed upon.'” Sottoriva v. Claps, 617 F.3d 971, 976 (7th Cir. 2010) (quoting Hensley, 461 U.S. at 435). Put differently, § 1988 doesn't require plaintiffs to run the table to achieve prevailing-party status. Rather, if they obtain relief that “materially alters the legal relationship between the parties by modifying the defendants' behavior in a way that directly benefits the plaintiffs, ” they may be a prevailing party. Farrar v. Hobby, 506 U.S. 103, 111 (1992).

As already noted, the Department's behavior has been modified in a way that directly benefits the plaintiffs: the budget tool will be finished two years earlier than the Department had wanted. Of course, the other side of that argument is that the Department got far more time than plaintiffs had wanted. But, as already pointed out, a significant win for the plaintiffs is that they now have a firm deadline, rather than just goals.

All told, this is enough to push plaintiffs across the statutory threshold into prevailing-party status. As already noted, the governing legal standard here is generous: “‘plaintiffs may be considered ‘prevailing parties' for attorney's fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.'” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983) (citation omitted; emphasis added).

2. Plaintiffs Are Entitled to a Reasonable Fee Award

The next step is to determine a reasonable fee award.

As a threshold matter, the Court is not persuaded by defendants' argument that plaintiffs should not recover any fees, even if the Court determines - as it has - that plaintiffs are the prevailing parties. Here, the Department argues that it would be “unfair to Defendants to force it to pay for Plaintiff's losing efforts, when Defendants had to present evidence to the Court of a reasonable deadline.” Resp., Dkt. 440, at 9. For all the reasons discussed earlier, though, the Court does not view the plaintiffs as having mounted a “losing effort.” Nor does the Court find “special circumstances” that would justify denying plaintiffs' attorney's fees. See San Francisco NAACP v. San Francisco Unified Sch. Dist., 284 F.3d 1163, 1169 (9th Cir. 2002). Plaintiffs were the prevailing parties, and a fee award is warranted.

3. The Lodestar Calculation

To determine a reasonable fee, the Court begins by calculating the lodestar figure, which is done “by multiplying the number of hours reasonably expended on the litigation by the reasonable hourly rate.” Gracie v. Gracie, 217 F.3d 1060, 1070 (9th Cir. 2000). Then, where appropriate, the Court should “adjust the ‘presumptively reasonable' lodestar figure based upon the factors listed in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 69-70 (9th Cir. 1975), that have not been subsumed in the lodestar calculation.” Id.^[2]

a. Reasonable Hourly Rates

To determine whether an hourly rate is reasonable, the Court looks to hourly rates prevailing in the relevant legal community for similar work performed by attorneys of comparable skill, experience, and reputation. Ingram v Oroudjian, 647 F.3d 925, 928 (9th Cir. 2011) ...