Reductions

• Jurisdiction: Maryland

V. REDUCTIONS

A. Voluntary Reductions

Counsel might consider, as a way of preventing a time consuming debate, whether it is worthwhile to propose a voluntary reduction off the top of the initial lodestar figure. Notwithstanding the myriad legal doctrines to be applied, courts still adhere to the notion that fee shifting should not spawn a "second major litigation."¹⁶⁰ A voluntary reduction may signal that counsel would like to avoid protracted arguments.¹⁶¹ Indeed, counsel is expected to show prudent billing judgment, and may benefit from doing so in counsel's negotiations with her counterparty.¹⁶²

B. Nonmovant Must Provide Specific Countervailing Evidence

"[T]he burden falls on the [nonmovant] to go forward with evidence that [movant's attorney's fee application and] rate [are both] erroneous."¹⁶³ When the nonmovant seeks to rebut a rate or calculation of hours billed, it must provide "equally specific countervailing evidence."¹⁶⁴

C. Successful and Unsuccessful Claims Together

When the plaintiff "prevailed on the merits and achieved excellent results [. . .] plaintiff's counsel are entitled to an award of fees for all time reasonably expended in pursuit of the ultimate result achieved in the same manner that an attorney traditionally is compensated by a fee-paying client for all time reasonably expended on a matter."¹⁶⁵ However, under this formulation, as already discussed, the fee award may be reduced first by the exclusion of hours expended exclusively on successful claims which are "truly fractionable" from the successful claims.¹⁶⁶

Critically, when there is substantial factual overlap in claims, the claims are related and full fees may be awarded.¹⁶⁷ For example, where the claimant lost on an alternate ground as to which success would not have increased the award, but has won all she could have expected, the loss on the alternate ground should not result in a reduction in fees.¹⁶⁸

"Where a lawsuit consists of related claims, a plaintiff who has won substantial relief should not have his attorney's fees reduced simply because the district court did not adopt each contention raised[.]"¹⁶⁹ "So long as the time expended [. . .] reflected sound legal judgment under the circumstances and produced sufficiently satisfactory results, the time is deemed to have been reasonably expended to justify an award of attorney's fees."¹⁷⁰ "If claims are related, failure on some claims should not preclude full recovery if plaintiff achieves success on a significant, interrelated claim."¹⁷¹

The doctrine permitting fee shifting for related but unsuccessful claims may have sanguine results, since "a lawyer may not be able to meet her ethical obligations if she does not pursue reasonable, alternate claims."¹⁷² "[A]warding fees for unsuccessful, related claims "supports the underlying purpose of [. . .] encouraging attorneys to take civil rights actions in view of the ethical duty of zealous representation."¹⁷³

The court has held that where unsuccessful and successful claims are based on a "common core of fact," reductions based on the failure of the unsuccessful claim reflect abuse of discretion.¹⁷⁴ The court has also held that where pursuit of an ultimately unsuccessful claim opened the door to discovery on a successful claim, the claims are interrelated.¹⁷⁵ In Goos,¹⁷⁶ the D.C. Circuit explained how this doctrine fits with the overall fee shifting system:

After the fact, it is of course easier to identify which arguments were winners and which were losers and state forcefully how an attorney's time could have been better spent. But litigation is not an exact science. In some cases, a lawyer's flagship argument may not carry the day, while the court embraces a secondary argument the lawyer rated less favorably. That is precisely why lawyers raise alternative grounds—a practice which is explicitly sanctioned by our Rules of Civil Procedure. See Fed. R. Civ. P. 8(e) ("A party may set forth two or more statements of a claim or defense alternately [. . .]").

Goos could create an impression that all the plaintiff must do is show a connection between the successful and unsuccessful claim and fees incurred even if support of the unsuccessful claim will be compensable, but the reality is far more complicated. Experience indicates that the history of fee shifting decisions include many examples of courts treating such related unsuccessful claims as non-compensable notwithstanding evidence that shows a linkage between the successful and unsuccessful claims.¹⁷⁷

D. Rule 68 and Settlement Negotiations for Fee Awards

The intent behind Federal Rule 68, the "offer of judgment," is to reduce litigation costs and to move the parties to a resolution without the added expense of trial. Once the defendant offers to pay the fair price (including costs) as of the day of her offer, and the plaintiff refuses, the defendant will not be required to pay for continued litigation.¹⁷⁸ The rule states: "if the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made."¹⁷⁹ Thus, a civil rights defendant ceases to be liable for fees incurred after a pretrial offer of judgment, where the judgment ultimately recovered by the plaintiff, including fees, is less than the offer.¹⁸⁰

Federal courts have also at times considered settlement offers not proffered under Rule 68 in determining fees.¹⁸¹ However, in those cases, fees were reduced only when a plaintiff unreasonably rejected settlements that would have provided superior relief to what she ultimately obtained through continued litigation.¹⁸²

There is no Rule 68 equivalent in Maryland civil procedure.¹⁸³

One additional note arises from the case of Manna v. Johnny's Pizza.¹⁸⁴ There, U.S. District Court Judge Blake reduced a prevailing plaintiff's fee because counsel had not attempted to resolve the Fair Labor Standards and Maryland Wage and Hour Law dispute before filing suit. In other words, failure to make a pre-filing settlement demand can subject a plaintiff to reduced fees.

E. Fee Eliminated Because Plaintiff Prevails Only Technically

Where the plaintiff receives one dollar from the least culpable of six defendants and nothing from the rest, the Supreme Court viewed it as a "hollow" victory for the plaintiff, and really "game, set, match all went to the defendants."¹⁸⁵ The Court noted that there was a substantial difference between the judgment recovered and the recovery sought, suggesting that the victory was in fact purely technical.¹⁸⁶

F. Ad Damnum Based Reduction

Following the prevailing logic, the number of counts as to which the plaintiff prevails should not be, in and of itself, determinative with regard to fee shifting.¹⁸⁷

Defendants have often argued that there should be a fee reduction based on the amount of money originally sought by the plaintiff, generally referring to any specific amount identified in the complaint (an ad damnum clause).¹⁸⁸ In one instance, the U.S. Attorney's Office sought to reduce the attorneys' fees based on the plaintiff's civil cover sheet which indicates that the lawsuit had an aspirational value for compensatory damages of $300,000.

Critics of the ad damnum approach cite to the common wisdom that a plaintiff's initial demand, or their demand on their civil cover sheet, does not reflect their firm valuation of the litigant, their harm and the probability of success on the merits.

Notwithstanding this criticism, some courts have reduced a fee award on this basis.¹⁸⁹ This is particularly likely to be the case where the plaintiff obtains only nominal damages.¹⁹⁰

G. Reductions Based on...