UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK -----------------------------------------X DEREK DZUGAS-SMITH, DONNA DZUGAS-SMITH and STEPHEN DZUGAS-SMITH,
Plaintiffs, MEMORANDUM & ORDER 07-CV-3760 (JS)(ARL) -against-
SOUTHOLD UNION FREE SCHOOL DISTRICT,
Defendant. -----------------------------------------X APPEARANCES: For Plaintiff: Anne Marie Richmond, Esq. Law Office of A.M. Richmond Post Office Box 1215 Buffalo, NY 14213
Richard H. Wyssling, Esq. 375 Linwood Avenue Buffalo, NY 14209
For Defendants: Christopher F. Venator, Esq. Ethan D. Balsam, Esq. Ingerman Smith, LLP 150 Motor Parkway, Suite 400 Hauppauge, NY 11788
SEYBERT, District Judge:
Plaintiffs have moved for fees-on-fees under the
Individuals with Disabilities Education Act, 20 U.S.C. § 1400 et
seq. (“IDEA”). For the foregoing reasons, Plaintiffs’ motion is
GRANTED IN PART AND DENIED IN PART.
BACKGROUND
Plaintiffs are Derek Dzugas-Smith and his parents. In
2002, a neuro-psychologist diagnosed Derek as learning disabled.
In response, the Southold Union Free School District classified
him as learning disabled, and granting him special assistance in
reading. In May 2003, the School District recommended
declassifying him. Plaintiffs objected to the declassification
and sought an impartial hearing. For this impartial hearing,
Plaintiffs retained John J. McGrath, Esq. to represent them.
The impartial hearing concluded with the hearing
officer determining that Derek was properly declassified, but
ordering that Plaintiffs be reimbursed for the cost of the
laptop computer they bought him. Plaintiffs appealed this
decision, but Mr. McGrath did not represent them in the appeal.
On appeal, the State Review Officer vacated the decision to
declassify Derek, finding that Defendant had committed numerous
procedural errors in declassifying him, and remanded for further
proceedings. A second impartial hearing took place. This time,
the hearing officer sided with the Plaintiffs, concluding that
Derek suffered from a speech or language impediment. Defendant
appealed, but the hearing officer’s decision was upheld.
Plaintiffs then sued under IDEA to recover Mr.
McGrath’s attorney fees and costs incurred in connection with
his representation of them during the first impartial hearing.
Under IDEA, the Court “in its discretion, may award reasonable
attorneys' fees as part of the costs” to “a prevailing party who
is the parent of a child with a disability.” 20 U.S.C. §
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1415(i)(3)(B)(i)(I). Initially, Plaintiffs demanded $42,980 in
attorney’s fees and costs. See Compl. at p. 7. On April 2008,
Plaintiffs filed an Amended Complaint which increased their
demands to $81,163.35 in attorney’s fees and $2,750 in
reimbursement for the cost of the laptop computer. On September
25, 2008, Defendant served a FED. R. CIV. P. 68 Offer of Judgment,
in which they agreed to: (1) pay $42,980 in attorney’s fees and
costs to Mr. McGrath; (2) pay $8,000 in attorney’s fees to Ann
Richmond, Esq., who represents Plaintiffs in this action; and
(3) pay Plaintiffs $2,350 for the computer, provided that
Plaintiffs return it to Defendant. On October 6, 2008,
Plaintiffs rejected this Offer of Judgment.
On September 17, 2009, the Court conducted an
evidentiary hearing. After the hearing, the Court awarded
Plaintiffs $13,524.75 in attorneys’ fees and costs and $2,150
for the cost of the laptop computer. In so ordering, the Court
severally discounted Mr. McGrath’s requested fees because, among
other things: (1) he achieved no direct success himself; (2)
while his work contributed to Plaintiffs’ ultimate success on
appeal, the Court believed it was not primarily responsible for
this success; and (3) at the time he represented Plaintiffs, he
had limited experience as an IDEA lawyer, and thus could not
justify the rates he sought, which substantially exceeded the
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rate Plaintiffs agreed to pay him. The Court’s award did not
require Plaintiffs to return the computer to Defendant.
Plaintiffs now seek $36,723.51 in attorney’s fees and
costs for bringing this action, and an additional $1,800 in
attorney’s fees for bringing this fees-on-fees motion.
DISCUSSION
IDEA permits prevailing parties to recover attorney’s
fees and costs incurred to enforce a disabled child’s rights
under the statute. See 20 U.S.C. § 1415(i)(3)(B)(i). IDEA also
permits prevailing parties to recover fees incurred in seeking
attorney’s fees under IDEA, sometimes known as a fees-on-fees
motion. See A.R. ex rel. R.V. v. New York City Dept. of Educ.,
407 F.3d 65, 83 (2d Cir. 2005).
A prevailing party’s right to attorney’s fees rests in
the Court’s “discretion.” 20 U.S.C. § 1415(i)(3)(B)(i). And,
even if the Court chooses to award fees, it may reduce the fees
awarded for numerous reasons, depending on a case’s facts.
Here, the Court finds that Plaintiffs are entitled to
fees-on-fees. However, Plaintiffs are not entitled to anywhere
near what they seek as a fees-on-fees award.
To begin with, on September 25, 2008, Defendant
conveyed a FED. R. CIV. P. 68 Offer of Judgment. When applied to
fee shifting statutes, an Offer of Judgment “precludes a
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plaintiff from recovering attorneys’ fees incurred after the
making of the Rule 68 offer,” if “the plaintiff does not
ultimately receive a “more favorable judgment.” Boisson v.
Banian Ltd., 221 F.R.D. 378, 380 (E.D.N.Y. 2004) (interpreting
Marek v. Chesny, 473 U.S. 1, 12, 105 S. Ct. 3012, 87 L. Ed. 2d 1
(1985)); FED. R. CIV. P. 68(d).1
Here, Defendant’s Offer of Judgment entitled
Plaintiffs to $45,330, plus $8,000 in attorney’s fees for
bringing this action. Plaintiffs rejected this Offer, and
ultimately collected only $15,674.75. Thus, Defendant argues,
Plaintiffs did not receive a “more favorable judgment,” and
cannot recover any attorney’s fees post-dating the September 25,
2008 Offer of Judgment. In response, Plaintiffs argue that “it
cannot be disputed that the Court’s no-strings-attached judgment
1 There is some authority which defines the cut-off period as the date plaintiffs reject the offer, not the date the offer was made. See Rozell v. Ross-Holst, 576 F. Supp. 2d 527, 542 (S.D.N.Y. 2008). This authority apparently stems from some careless dicta in Marek which, in contrast with the case’s holding, spoke about plaintiffs not recovering attorney’s fees “after the offer is rejected.” Marek, 473 U.S. at 10. Most cases have interpreted Marek in accord with its holding, not its dicta. See, e.g., Boisson, 221 F.R.D. at 380; Ciraolo v. City of New York, 97-CV-8208, 2000 WL 1521180, at *2 (S.D.N.Y. 2000) Christian v. R. Wood Motors, Inc., 91-CV-1348, 1995 WL 238981, at *6 (N.D.N.Y. 1995). And, as FED. R. CIV. P. 68(d) specifically defines the cut-off period as when “the offer was made,” this is interpretation not only comports with Marek’s holding, but also with Rule 68’s plain meaning. Accordingly, the Court adopts the date the offer was made as the cut-off date. 5
was more favorable,” because the Court did not require
Plaintiffs to return the computer they purchased for their son.
Plaintiffs’ argument is ridiculous. As the Court found, the
laptop computer was worth $2,150 when purchased. It has surely
depreciated by now. Plaintiffs (and/or Mr. McGrath) could have
purchased several dozen laptop computers with the roughly
$30,000 they left on the table by not accepting Defendants’ Rule
68 Offer. It follows then that Plaintiffs did not receive a
more favorable judgment than the rejected Offer of Judgment, so
they cannot collect any fees post-dating September 25, 2008,
including fees incurred in making this motion.
Considering Plaintiffs’ fee request only to the extent
it pre-dates the Offer of Judgment, Plaintiffs request
$29,418.35 in fees, representing 78.93 hours at $350 per hour,
8.5 hours of travel time at $175 per hour, and $305.35 in
disbursements. Richmond Aff. ¶ 42. This request is much too
high, for several reasons.
First, as an initial matter, Plaintiffs miscalculated
Ms. Richmond’s total hours. The Court’s own count (checked by
two members of the Court’s staff) comes to 77.05 total attorney
hours through September 25, 2008, not 78.93 hours.
Second, the Court disputes Plaintiffs’ position that
Ms. Richmond is entitled to a rate of $350 per hour. Under
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IDEA, attorneys are entitled to fees “based on rates prevailing
in the community in which the action or proceeding arose for the
kind and quality of services furnished.” 20 U.S.C. §
1415(i)(3)(B)-(C); A.R. ex rel. R.V., 407 F.3d at 79. Here,
Plaintiffs have submitted no evidence of what the “prevailing”
rate for the “kind and quality of services” Ms. Richmond
rendered would be. At most, Plaintiffs have provided: (1) the
Retainer Agreement they signed with Ms. Richmond; and (2) Ms.
Richmond’s statement that another attorney, Andrew Cuddy,
suggested charging $350 an hour as an appropriate prevailing
rate. Because whatever Mr. Cuddy told Ms. Richmond is hearsay,
the Court ignores it. That leaves the Retainer Agreement as the
sole piece of evidence concerning the kinds of rates an attorney
with Ms. Richmond’s skill and experience can charge. The
Retainer Agreement provides for a $250 an hour fee. So this is
what the Court awards Ms. Richmond.
Third, the Second Circuit has instructed that
defendants should not be penalized for a plaintiff’s choice of
out-of-district counsel, unless “the case required special
expertise beyond the competence of [forum district] law firms.”
See Simmons v. New York City Transit Authority, 575 F.3d 170,
175 (2d Cir. 2009). Although Simmons concerned hourly rates,
not travel time, its logic applies with at least equal force to
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travel time. There is no reason why Defendants should incur
greater liability simply because Plaintiffs inexplicably
retained a Buffalo-based attorney, when legions of competent
Eastern District lawyers could have represented them. See
Hahnemann University Hosp. v. All Shore, Inc., 514 F.3d 300, 312
(3rd Cir. 2008) (“under normal circumstances, a party that hires
counsel from outside the forum of the litigation may not be
compensated for travel time, travel costs, or the costs of local
counsel”). Accordingly, the Court awards Plaintiffs only a
single hour of attorney travel time, at $125 an hour (half Ms.
Richmond’s awarded rate).
Fourth, Ms. Richmond has not sufficiently documented
her work. Ms. Richmond’s time records are replete with terse
and cryptic entries, such as “Correspondence:, client, AKC re
McG case,” and “Correspondence: to client re developments,” that
make it difficult for the Court to determine whether Ms.
Richmond billed an appropriate number of hours. Courts are
entitled to reduce an attorney’s fee request for “vagueness,
inconsistencies, and other deficiencies in the billing records.”
Kirsch v. Fleet Street, Ltd., 148 F.3d 149, 173 (2d Cir. 1998).
Here, as in Kirsch, the Court finds that a 20% haircut is
appropriate.
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Finally, the Court has broad discretion to reduce a
fee award based on Plaintiffs “partial or limited success” on
the merits. Kassim v. City of Schenectady, 415 F.3d 246, 256
(2d Cir. 2005); Todaro v. Siegel Fenchel & Peddy, P.C., 697 F.
Supp. 2d 395, 401 (E.D.N.Y. 2010). Here, the Court believes
that a significant discount is appropriate. Including the
laptop computer’s alleged cost, Plaintiffs sought $83,913 in
fees and costs. They recovered 18.68% of that, or $15,674.75.
Given the circumstances of this case, including a rejected Offer
of Judgment that would have provided Plaintiffs with
substantially more relief, the Court – in its discretion - finds
that Plaintiffs’ percentage of recovery provides compelling
guidance on how much it should discount Plaintiffs’ fee request.
Accordingly, the Court reduces Plaintiffs’ fee recovery by an
additional 81.32%, to reflect Plaintiffs’ limited success on the
merits.
To summarize: the Court awards Ms. Richmond a rate of
$250/hr for 77.05 hours of attorney time, and $125/hr for one
hour of travel time. This comes to $19,387.50. The Court then
reduces this sum by 20%, or $3,877.50, because of Ms. Richmond’s
vague time records. This leaves a fee award of $15,510. The
Court further reduces this fee award by 81.32%, or $12,612.73,
to reflect Plaintiffs’ limited success on the merits. It
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follows then that the Court awards Plaintiffs only $2,897.27 in
attorney’s fees. The Court also awards Plaintiffs $305.35 for
costs and disbursements that predate the Offer of Judgment.
CONCLUSION
Plaintiffs’ motion for attorney’s fees and costs
(Docket No. 38) is GRANTED IN PART AND DENIED IN PART. The
Court awards Plaintiffs $2,897.27 in attorney’s fees, and
$305.35 in costs.
SO ORDERED.
/s/ JOANNA SEYBERT Joanna Seybert, U.S.D.J.
Dated: September 27 , 2010 Central Islip, New York
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