Wednesday, December 28, 2005

Reasonable Attorney's Fees

Section 505 of the Copyright Act permits (but does not require) the award of "reasonable" attorney's fees to the prevailing party (as part of costs). How does the court figure out what is "reasonable" and must there be an evidentiary hearing when reasonableness is disputed? On December 23d, the Second Circuit addressed these questions in a non-copyright (Section 1983 class action) case, Farbotko v. Clinton County (from the link go to "Decisions" and then "Current Month").

Plaintiff had requested fees of $200 and $250 an hour and presented evidence of the prevailing rates within the district. The District Court for the Northern District of New York) awarded attorney's fees at an hourly rate of $175 (and reduced the number of hours by 40% to reflect only partial success). No findings of fact or comment on plaintiff's evidence were made; the court apparently relied solely on the hourly awarded in other cases in the district.

In vacating, the Court of Appeals, per Judge Feinberg, noted that "a reasonable hourly rate is not itself a matter of binding precedent. Rather, ... a reasonable hourly rate is the 'prevailing market rate,' i.e., the rate 'prevailing in the [relevant] community for similar services by lawyers of reasonably comparable skill, experience, and reputation.'" A reasonable hourly rate "is not ordinarily ascertained simply by reference to rates awarded in prior cases." Instead, the court of appeals observed, the inquiry "contemplates a case-specific inquiry into the prevailing market rates for counsel of similar experience and skill to the fee applicant's counsel."

This leads to the question of how one determines that rate. Citing by analogy to a copyright case, Crescent Publishing Group, Inc. v. Playboy Enterprises, 246 F.3d 142, 147 (2d Cir. 2001), Judge Feinberg noted that "while not required in every case, an evidentiary hearing, or at the very least an opportunity to submit evidence, is necessary to determine the propriety of a fee award and the amount of such award if it is evident that the material facts necessary for those determinations are genuinely in dispute and cannot be resolved from the record."

For those of us who practice in the Southern District of New York, I should point out that the court noted that even for the rather straightforward type of 1983 action involved, the prevailing hourly rate in Manhattan is more than twice the rate in the Northern District of New York.

1 comment:

Max said...

I have to admit that the Court of Appeals decision gave me the mental picture of a judge saying "this attorney was a nit-wit, so we'll compare his rate to other nit-wits in the district."