Fee Fees

The United States Court of Appeals for the Fourth Circuit (reluctantly) remanded a fee award matter

After winning at trial, two plaintiffs asked a district court to award them attorney’s fees. The court granted fees, but at lower hourly rates than the plaintiffs requested. We conclude the district court erred in treating the hourly rates contained in official District of Maryland guidelines as presumptively correct and higher rates as requiring special justification. We thus vacate the fee order and remand for further proceedings.

Deference presumed

One can “hardly think of a sphere of judicial decisionmaking in which appellate micromanagement has less to recommend it” than reviewing a district court’s fee award. Fox v. Vice, 563 U.S. 826, 838 (2011). “The essential goal in shifting fees (to either party) is to do rough justice, not to achieve auditing perfection,” and “the determination of fees should not result in a second major litigation.” Id. (quotation marks removed). The district court—not the appellate court— “has close and intimate knowledge of the efforts expended and the value of the services rendered,” Harwood v. American Airlines, Inc., 37 F.4th 954, 960 (4th Cir. 2022) (quotation marks removed), and “appellate courts must give substantial deference to these determinations,” Fox, 563 U.S. at 838. We thus review the district court’s fee award for abuse of discretion. See Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169, 174 (4th Cir. 1994).

Still, “a motion to a court’s discretion is a motion, not to its inclination, but to its judgment; and its judgment is to be guided by sound legal principles.”

Result

We read the district court’s fee order as falling on the impermissible side of that line. That order describes the local rules as “provid[ing] presumptively reasonable hourly rates,” JA 807, and notes that the plaintiffs’ requested rates all “exceed[ed]” or were “higher than the applicable Local Rules guideline range,” JA 808. To be sure, the order also references the plaintiffs’ evidence, their arguments about inflation, the court’s assessments about the case’s complexity and skill required, and the attorney’s reasonable expectations. But even then, the order returns to the district court’s local rules, stating that the court “will not approve hourly rates above those contemplated by the Local Rules” and finding that “the reasonable hourly rates are those at the high end of the guideline ranges set forth in the Local Rules.” JA 809. The fee ranges listed in the district court’s local rules thus appear to have had a substantial anchoring effect on the court’s ultimate fee award. See Jon D. Hanson & Douglas A. Kysar, Taking Behavioralism Seriously: Some Evidence of Market Manipulation, 112 Harv. L. Rev. 1420, 1440–41 (1999) (discussing the anchoring effect).

That was legal error. Just as district courts “may not presume that the Guidelines range is reasonable” when sentencing a criminal defendant, Gall v. United States, 552 U.S. 38, 50 (2007), they may not treat court-produced fee matrices as setting a baseline from which departures are disfavored and require special justification. Because we read the district court’s order as having done so, we vacate the fee award and remand for further proceedings.

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We express no opinion about the appropriate hourly rates here and issue no marching orders to award more fees than the district court previously did. Instead, we reaffirm our “confidence in th[e] district court’s capacity and willingness to engage in a true reconsideration that accepts and takes into account the specific concerns with the decision under review that are expressed in this opinion” and “our recognition of the continued superiority of the trial court’s vantage point in” determining a reasonable fee. James v. Jacobson, 6 F.3d 233, 243 (4th Cir. 1993).

(Mike Frisch)