Sheffer v. Experian Information Solutions, Inc.

290 F.Supp.2d 538

Richard L. SHEFFER, Plaintiff, v. EXPERIAN INFORMATION SOLUTIONS, INC., et al., Defendants.

Civil Action No. 02-7407.

United States District Court, E.D. Pennsylvania.

October 15, 2003.

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James A. Francis, John Soumilas, Francis & Mailman, P.C., Philadelphia, PA, Thomas J. Lyons, Jr., Thomas J. Lyons, Sr., Thomas Lyons & Assoc., Little Canada, MN, for Plaintiff.

Robert O. Lindefjeld, Shweta Gupta, Jones Day Reavis & Pogue, Pittsburgh, PA, Catherine Olanich Raymond, Christie Pabarue Mortensen & Young PC, Philadelphia, PA, Ewis P. Perling, Mara McRae, Kilpatrick Stockton LLP, Atlanta, GA, Bruce S. Luckman, Timothy P. Creech, Satzberg, Trichon, et al, Philadelphia, PA, Abraham J. Colman, Deborah E. Yim, John Patrick Petrullo, Jonathan D. Fink, Sandra Stevens, Shiao-Wen Huang, Buchalter, Nemer, Fields & Younger, Los Angeles, CA, Louis J. Isaacsohn, Wendy D. Testa, Wilson Elser Moskowitz Edelman & Dicker LLP, Philadelphia, PA, for Defendants.

MEMORANDUM AND ORDER

SCHILLER, District Judge.

This case reveals the potential problems that accompany the generally salutary effects of fee-shifting statutes. While fee-shifting provisions are intended to facilitate the pursuit of claims that vindicate both individual rights and the larger public interest, they can be misused when they become a mechanism for obtaining large attorney's fee awards in cases with de minimis returns for the client and society in general. Furthermore, the prospect of a fee award can skew attorneys' incentives when confronted with settlement offers that would more than compensate their clients, but that fall short of the large fees already incurred. These concerns are most prevalent in cases such as this, where recovery of private damages, rather than the vindication of constitutional rights, is the primary purpose. While it is Congress' duty to re-shape fee-shifting provisions to alleviate these concerns, it is this Court's duty to determine a reasonable fee in light of the de minimis victory achieved in this case. See Hensley v. Eckerhart, 461 U.S. 424, 436, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983) (holding that "the most critical factor" in the analysis of a reasonable fee is "the degree of success obtained").

I. BACKGROUND

After a jury trial before this Court in the above-captioned matter, judgment was entered against Defendant Sears & Roebuck, Inc. ("Sears") in favor of Plaintiff's claims under the Fair Credit Reporting Act ("FCRA"). The jury awarded Plaintiff Richard Sheffer $1,000.00 in actual damages, but declined to award punitive damages. Now before the Court is Plaintiff's motion for attorneys' fees and costs pursuant to the fee-shifting provision of the FCRA, 15 U.S.C. § 1681o(a)(2), and Federal Rules of Civil Procedure 54(d)(1) and 54(d)(2)(B). For the reasons that follow, I grant in part and deny in part Plaintiff's motion for attorneys' fees.

II. DISCUSSION

Plaintiff seeks an award of $126,543.33 in fees and $14,010.75 in costs, representing the work of the following three firms: Francis & Mailman, P.C., Thomas Lyons & Associates, P.A., and the Consumer Justice Center, P.A.¹ Defendant Sears contests $54,024.47 of Plaintiff's fee request and $8,495.21 of Plaintiff's cost request. Defendant also broadly challenges the reasonableness of Plaintiff's attorneys' hourly rates and requests an overall two-thirds reduction due to Plaintiff's limited success.

The FCRA provides explicit statutory authority to award costs and counsel fees to a prevailing party "in the case of any successful action to enforce any liability under this section." 15 U.S.C. § 1681o(a)(2) (2003). Plaintiff, as the prevailing party in this litigation, bears the burden of demonstrating that the fee request is reasonable. See Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir.1990). Courts assess the reasonableness of a claimed fee using the "lodestar" formula, which entails multiplying the number of hours reasonably expended by the appropriate hourly rate. See Hensley, 461 U.S. at 433, 103 S.Ct. 1933; Maldonado v. Houstoun, 256 F.3d 181, 184 (3d Cir.2001). Although the lodestar is presumed to yield a reasonable fee, a district court has considerable discretion to adjust the lodestar upward or downward after the opposing party objects to the fee request. See Rode, 892 F.2d at 1183 (citing Bell v. United Princeton Props., 884 F.2d 713, 721 (3d Cir.1989)).

A. Plaintiff's Request for Attorneys' Fees

1. Reasonableness of the Hourly Rate

A court determines a reasonable hourly rate by assessing the prevailing party's attorneys' experience and skill compared to the market rates in the relevant community for lawyers of reasonably comparable skill, experience, and reputation. See Maldonado, 256 F.3d at 184; see also Student Pub. Interest Research Group of N.J., Inc. v. AT & T Bell Labs., 842 F.2d 1436, 1450 (3d Cir.1988). The prevailing party bears the burden of showing that the requested hourly rates are reasonable. See Becker v. ARCO Chem. Co., 15 F.Supp.2d 621, 628 (E.D.Pa.1998) (citing Washington v. Phila. County Ct. of Com. Pl., 89 F.3d 1031, 1036 (3d Cir.1996)). The opposing party must then show a sufficient basis to contest the reasonableness of the fees. See Orson, Inc. v. Miramax Film Corp., 14 F.Supp.2d 721, 724 (E.D.Pa.1998). Once the opposing party's objection is made with the required support, a court has considerable discretion to adjust the fee in light of the objections of the adverse party. See Bell, 884 F.2d at 721.

The Third Circuit has held that the attorney's fee schedule composed by Community Legal Services ("CLS") is "a fair reflection of market rates in Philadelphia." Maldonado, 256 F.3d at 187. Defendant contests the hourly rates of four of Plaintiff's attorneys because they exceed the prevailing market rates as set by the CLS schedule. The CLS schedule suggests that attorneys with six to ten years of experience should charge hourly rates between $190.00 and $240.00. Mr. Francis and Mr. Mailman, each possessing eight years of experience, have proposed $250.00 hourly rates and Mr. Lyons, Jr., possessing nine years of experience, has proposed a rate of $300.00 per hour. Mr. Soumalis, with four years of experience, has proposed a $200.00 hourly rate, despite the CLS schedule's suggestion that attorneys with two to five years of experience should receive between $160.00 and $180.00 per hour.

In response, Plaintiff has both submitted an affidavit of an experienced consumer protection attorney attesting to the reasonableness of Plaintiff's rates and also cited to several cases in the Eastern District of Pennsylvania that approved Plaintiff's previous fee requests. (Pl.'s Mot. for Att'ys' Fees & Costs App. 1, Ex. B (Goldberg Aff.).) Interestingly, the cases Plaintiff cites for the reasonableness of Mr. Mailman and Mr. Francis' rates affirm hourly rates of $225.00 per hour. (Id. at App. 1 (Francis Aff.)) (citing Bonett v. Educ. Debt Servs., Inc., No. 01-6528, slip op. at 8, 2003 WL 21658267 (E.D.Pa. May 9, 2003) (approving $225.00 per hour for Mr. Mailman and Mr. Francis); Oslan v. Law Offices of Mitchell N. Kay, 232 F.Supp.2d 436 (E.D.Pa.2002) (same)). Given their relative experience, the guidelines set in the CLS fee schedule and the rates approved in comparable cases in this district, I find that Mr. Mailman, Mr. Francis and Mr. Lyons Jr. should reasonably receive $235.00 per hour. The $235.00 hourly figure is near the top of the guideline range and represents a slight increase above the hourly rates approved for these attorneys in the two recent cases cited above. I find that Mr. Soumalis should receive $160.00 per hour based on his experience and skill and because he performed the tasks of a junior associate in this litigation. Adjusted accordingly, Plaintiff's fee petition totals $106,569.38. This figure is the starting point for the further reductions enumerated below.

2. Reasonableness of Hours Expended

A prevailing party may request fees for work that is "useful and the type ordinarily necessary to secure the final result obtained." Commonwealth of Pennsylvania v. Del. Valley Citizens' Council, 478 U.S. 546, 560-61, 106 S.Ct. 3088, 92 L.Ed.2d 439 (1986) (internal quotation omitted). The fee petition must be sufficiently specific to allow the court to determine if the hours claimed are unreasonable for the work performed. See Washington, 89 F.3d at 1037; Dellarciprete, 892 F.2d at 1190. A court has "the affirmative function" to "review the time charged, decide whether the hours set out were reasonably expended for each of the particular purposes described and then exclude those that are `excessive, redundant, or otherwise unnecessary.'" Maldonado, 256 F.3d at 184 (quoting Pub. Interest Research Group v. Windall, 51 F.3d 1179, 1188 (3d Cir.1995)). A court, however, cannot generally reduce hours sua sponte, rather, objections must be specific for a court to reduce the amount of fees requested. See United States v. Eleven Vehicles, 200 F.3d 203, 211-12 (3d Cir.2000). Of course, this process should not result in a "second major litigation." See Hensley, 461 U.S. at 437, 103 S.Ct. 1933.

Defendant Sears contests the reasonableness of Plaintiff's counsel's specific time entries on numerous grounds. To facilitate the Court's evaluation of each contested time entry, Defendants have submitted a chart that groups Plaintiff's contemporaneous time entries into various categories and includes a column detailing Sears' specific dispute with each entry. (Def.'s Opp'n to Pl.'s Mot. for Att'ys' Fees & Costs Ex. A.) Although mindful of the Supreme Court's admonition that "this process should not result in a second major litigation," this Court has endeavored to address each of Defendant's numerous disputes.² Hensley, 461 U.S. at 437, 103 S.Ct. 1933.

a. Apportionment of Fees Among All Defendants

At commencement, this action involved four defendants: Experian...