     08-4079-cv(L)
     Simmons v. N.Y. City Transit Authority

 1                         UNITED STATES COURT OF APPEALS
 2                             FOR THE SECOND CIRCUIT
 3
 4                            August Term 2008
 5   (Argued: April 8, 2009                    Decided: August 3, 2009)
 6                        Docket No. 08-4079-cv(L)
 7
 8   ----------------------------------------------------x
 9
10   ROSETTA SIMMONS,
11
12         Plaintiff-Appellee-Cross-Appellant,
13
14               - v. -
15
16   NEW YORK CITY TRANSIT AUTHORITY,
17
18         Defendant-Appellant-Cross-Appellee,
19
20               - and -
21
22   JOHN DOE # 1-3,
23
24         Defendants.*
25
26   -----------------------------------------------------x
27
28   B e f o r e :     JACOBS, Chief Judge, WALKER, and LEVAL, Circuit
29                     Judges.

30         Appeal by Defendant from a judgment entered in the United

31   States District Court for the Eastern District of New York

32   (Charles P. Sifton, Judge), granting Plaintiff’s request for

33   attorney’s fees based on the prevailing rates in the Southern, as

34   opposed to the Eastern, District of New York.      On appeal, we


     *
1         The official caption lists appellant as “New York Transit
2    Authority” and defendants as “John Doe #1-3, Defendant.” The
3    Clerk of the Court is respectfully directed to amend the official
4    caption to read “New York City Transit Authority” and “John Doe
5    #1-3, Defendants.”

                                          -1-
1    VACATE the district court’s award of attorney’s fees insofar as

2    they were calculated based on the prevailing rates in the

3    Southern District of New York.   The case is REMANDED for the

4    district court to enter a modified attorney’s fees award based on

5    the prevailing rates in the Eastern District of New York.

 6                                          GREGORY ANTOLLINO, New York,
 7                                          N.Y., for Plaintiff-Appellee-
 8                                          Cross-Appellant.
 9
10                                          STEVE S. EFRON, New York,
11                                          N.Y., for Defendant-Appellant-
12                                          Cross-Appellee.

13   JOHN M. WALKER, JR., Circuit Judge:

14        Once again we are called upon to clarify the boundaries of

15   the attorney’s fees award.   We recently delineated those

16   boundaries in Arbor Hill Concerned Citizens Neighborhood Ass’n v.

17   County of Albany, 493 F.3d 110 (2d Cir. 2007), amended on other

18   grounds by 522 F.3d 182 (2d Cir. 2008), in which we “abandon[ed]”

19   the “lodestar” approach to awarding attorney’s fees, and adopted

20   instead a “presumptively reasonable fee” calculation, whereby

21   district courts are advised “to bear in mind all of the case-

22   specific variables that we and other courts have identified as

23   relevant to the reasonableness of attorney’s fees in setting a

24   reasonable hourly rate,” id. at 117-18 (emphasis in original).

25        In this appeal by the New York City Transit Authority (the

26   “TA”) following a jury verdict in favor of Plaintiff Rosetta

27   Simmons (“Simmons”) on her disability discrimination claim, our


                                      -2-
1    attention is on the parameters of one such “variable”: the

2    circumstances in which a district court may depart from the

3    traditional “forum rule,” under which district courts are

4    directed to calculate attorney’s fees based on the rates

5    prevalent in the forum in which the litigation was brought.     The

6    district court, relying on Arbor Hill, awarded attorney’s fees to

7    Simmons based on the prevailing hourly rates in the Southern

8    District of New York (“Southern District”), where Simmons’

9    attorneys were based, even though the case was litigated in the

10   Eastern District of New York (“Eastern District”), where the

11   prevailing hourly rates are substantially lower.

12        We conclude that in order to receive an attorney’s fee award

13   based on higher out-of-district rates, a litigant must overcome a

14   presumption in favor of the forum rule, by persuasively

15   establishing that a reasonable client would have selected out-of-

16   district counsel because doing so would likely (not just

17   possibly) produce a substantially better net result.   In this

18   case, Simmons has not overcome the presumption in favor of the

19   forum rule.   We address the remaining issues on appeal separately

20   in a summary order filed concurrently with this opinion.

21                               BACKGROUND

22        The facts relevant to the attorney’s fees claim are as

23   follows.   Simmons, a TA train operator since 1988, filed the

24   instant complaint in February 2003 after she was removed from


                                     -3-
1    train operator duty.    She alleged that the TA had discriminated

2    against her on the basis of her disability in violation of the

3    Rehabilitation Act of 1973, 29 U.S.C. §§ 701-796l, the Americans

4    with Disabilities Act (“ADA”), 42 U.S.C. §§ 12101-12213, the New

5    York City Human Rights Law, N.Y. City Admin. Code §§ 8-101-1001,

6    and the New York State Human Rights Law, N.Y. Exec. L. §§ 290-

7    301, by failing to reasonably accommodate her impairment.     After

8    extensive discovery, the district court denied the TA’s motion

9    for summary judgment.   The first trial ended in a mistrial when

10   the jury failed to reach a verdict.     After the mistrial, the

11   district court denied the TA’s post-trial and renewed summary

12   judgment motions.   At the close of the second trial, the district

13   court reserved decision on the TA’s motion for a directed

14   verdict.   On December 10, 2007, the jury returned a verdict for

15   Simmons and awarded her $150,000 in non-economic damages.

16        The hard-fought battle was not over.     Although the parties

17   agreed to try issues of economic damages to the court and

18   stipulated to the calculation of back wages and pension credits,

19   the parties disputed whether Simmons was entitled to compensation

20   for “lost fringe benefit time.”    In March 2008, the district

21   court found against Simmons on that issue.     The TA then moved for

22   judgment as a matter of law in the underlying discrimination case

23   pursuant to Federal Rule of Civil Procedure 50, or in the

24   alternative, for a new trial pursuant to Federal Rule of Civil


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1    Procedure 59, and the district court denied the TA’s motions in

2    their entirety.

3         Simmons then moved for attorney’s fees, as a prevailing

4    party under the ADA, 42 U.S.C. § 12205, the Rehabilitation Act,

5    29 U.S.C. § 794a(b), and the New York City Human Rights Law,

6    N.Y.C. Admin. Code § 8-502(f).   She calculated her attorney’s

7    fees based on the hourly rates in the Southern District where her

8    attorneys were based, which, as the district court recognized,

9    “are higher than the hourly rates charged in the Eastern

10   District.”   Simmons v. N.Y. City Transit Auth., No. CV-02-1575,

11   2008 WL 630060, at *2 (E.D.N.Y. March 5, 2008); see also Luciano

12   v. The Olsten Corp., 109 F.3d 111, 115 (2d Cir. 1997).     The TA

13   challenged Simmons’ fees calculation, on the basis that, inter

14   alia, the correct hourly rates were those that prevailed in the

15   Eastern District, where the case was litigated.

16        The district court agreed with Simmons’ position.   The

17   district court first acknowledged that, according to the forum

18   rule, “[t]he reasonable rate used to determine the amount of

19   attorney[’s] fees to award is calculated according to the

20   prevailing rates in the district in which the court sits.”

21   Simmons, 2008 WL 630060, at *2 (citing Polk v. N.Y. State Dep’t

22   of Corr. Servs., 722 F.2d 23, 25 (2d Cir. 1983)).   The district

23   court concluded, however, that Simmons was justified in retaining

24   out-of-district counsel under the circumstances, and therefore


                                      -5-
1    the court was permitted, under Arbor Hill, to “adjust th[e] base

2    hourly rate to account for [Simmons’] reasonable decision.”    Id.

3    (quoting Arbor Hill, 493 F.3d at 111-12 (first alteration in

4    original)).   The district court found that, “[a]lthough there may

5    be other civil rights attorneys in the Eastern District,”

6    Simmons’ decision to hire out-of-district counsel was reasonable

7    due to counsel’s experience and “success rate” in litigating

8    disability discrimination cases, and the fact that “travel time”

9    between the Southern and Eastern districts is “minimal.”    Id. at

10   *2-3.

11        Following motions for interest on attorney’s fees, the

12   district court awarded Simmons attorney’s fees in the total

13   amount of $213,085.25.

14        The TA appealed this award.

15                               DISCUSSION

16   I.   Legal Standard

17        “We . . . review decisions to award or deny attorney[’s]

18   fees for abuse of discretion.”   Jacobson v. Healthcare Fin.

19   Servs., Inc., 516 F.3d 85, 96 (2d Cir. 2008).   “A district court

20   abuses its discretion if it relies on ‘an erroneous view of the

21   law or on a clearly erroneous assessment of the evidence.’”

22   Kerin v. U.S. Postal Serv., 218 F.3d 185, 188-89 (2d Cir. 2000)

23   (quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405

24   (1990)).


                                      -6-
1    II.   The Forum Rule

2          In Arbor Hill, we undertook to simplify the complexities

3    surrounding attorney’s fees awards that had accumulated over time

4    under the traditional “lodestar” approach to attorney’s fees (the

5    product of the attorney’s usual hourly rate and the number of

6    hours worked, which could then be adjusted by the court to set

7    “the reasonable fee”), and the separate “Johnson” approach (a

8    one-step inquiry that considered twelve specified factors to

9    establish a reasonable fee).   493 F.3d at 114.   Relying on the

10   substance of both approaches, we set forth a standard that we

11   termed the “presumptively reasonable fee.”   Id. at 118.   We

12   directed district courts, in calculating the presumptively

13   reasonable fee, “to bear in mind all of the case-specific

14   variables that we and other courts have identified as relevant to

15   the reasonableness of attorney’s fees in setting a reasonable

16   hourly rate.”   Id. at 117 (emphasis in original).   The

17   presumptively reasonable fee boils down to “what a reasonable,

18   paying client would be willing to pay,” given that such a party

19   wishes “to spend the minimum necessary to litigate the case

20   effectively.”   Id. at 112, 118.

21         The facts of Arbor Hill also required us to further develop

22   the parameters of the “forum rule,” a methodology first developed

23   by the Supreme Court in Blum v. Stenson, 465 U.S. 886 (1984).

24   According to the forum rule, courts “should generally use ‘the


                                        -7-
1    hourly rates employed in the district in which the reviewing

2    court sits’ in calculating the presumptively reasonable fee.”

3    Arbor Hill, 493 F.3d at 119 (quoting In re “Agent Orange” Prod.

4    Liab. Litig., 818 F.2d 226, 232 (2d Cir. 1987)); see also Blum,

5    465 U.S. at 895; Polk, 722 F.2d at 25.   The court may apply an

6    out-of-district rate (or some other rate, based on the

7    aforementioned “case-specific variables”) if, “in calculating the

8    presumptively reasonable fee[,] . . . it is clear that a

9    reasonable, paying client would have paid those higher rates.”

10   493 F.3d at 119.

11        Arbor Hill had no occasion to draw the exact parameters of

12   the forum rule and, specifically, the exception to the rule.    In

13   defining the exception to the rule, we stated that

14        [w]e presume . . . a reasonable, paying client would in
15        most cases hire counsel from within his district, or at
16        least counsel whose rates are consistent with those
17        charged locally. This presumption may be rebutted –
18        albeit only in the unusual case – if the party wishing
19        the district court to use a higher rate demonstrates
20        that his or her retention of an out-of-district
21        attorney was reasonable under the circumstances as they
22        would be reckoned by a client paying the attorney’s
23        bill.
24
25   Id. (emphasis added).   Thus, while we disavowed “strict adherence

26   to the forum rule” where “circumstances have warranted it,” id.

27   at 120 (citing Polk, 722 F.2d at 25; Agent Orange, 818 F.2d at

28   232), due to our “belief that district courts should award fees

29   just high enough ‘to attract competent counsel,’” id. at 121

30   (quoting Lewis v. Coughlin, 801 F.2d 570, 576 (2d Cir. 1986)), we

                                     -8-
1    still emphasized that deviation from the forum rule is only

2    appropriate “in the unusual case,” in which a litigant

3    demonstrates that her selection of counsel was “reasonable under

4    the circumstances,” id. at 119.    We suggested in Arbor Hill that

5    district courts should consider factors such as “geograph[ical]”

6    proximity between districts, id. at 120, and the “workings of

7    today’s market for legal services,” id., to determine whether the

8    litigant’s selection of counsel was “reasonable” enough to permit

9    deviation from the forum rule.

10        We had considered the forum rule in cases prior to Arbor

11   Hill.   But in those cases we had stated that district courts may

12   deviate from the forum rule where litigants can “show[] . . .

13   that the case required special expertise beyond the competence of

14   [forum district] law firms.”   Arbor Hill Concerned Citizens

15   Neighborhood Ass’n v. County of Albany, 369 F.3d 91, 96-97 (2d

16   Cir. 2004) (per curiam); see also Agent Orange, 818 F.2d at 232

17   (“We . . . have strayed from [the forum] rule only in the rare

18   case where the special expertise of non-local counsel was

19   essential to the case, it was clearly shown that local counsel

20   was unwilling to take the case, or other special circumstances

21   existed.”) (internal quotation marks omitted, emphasis added).

22   Arbor Hill thus could be read to have expanded the exception to

23   the forum rule.

24        Since Arbor Hill, district courts in this circuit have


                                       -9-
1    variously applied the exception to the forum rule.   Compare

2    Mikrut v. Unum Life Ins. Co., No. 3:03cv1714(SRU), 2007 WL

3    2874801, at *4 (D. Conn. Sept. 28, 2007) (reducing fees to

4    District of Connecticut rates based on the court’s conclusion

5    that “[m]any attorneys practicing in this District could have

6    ably handled this case for [plaintiff] at much lower rates than

7    those sought”), with Luca v. County of Nassau, No. 04-CV-

8    4894(FB), 2008 WL 2435569, at *9 (E.D.N.Y. June 16, 2008)

9    (awarding Southern District rates in a case litigated in the

10   Eastern District due to the “uniquely permeable” border between

11   the districts), and Wash. Mut. Bank v. Forgue, No. 07-MC-6027-

12   CJS, 2008 WL 282201, at *1 (W.D.N.Y. Jan. 30, 2008) (awarding

13   Southern District rates in a case litigated in the Western

14   District of New York where “[p]etitioner would have retained [his

15   counsel] for this matter in the Western District . . . since [the

16   same counsel] has been representing [p]etitioner throughout these

17   proceedings and is familiar with ancillary proceedings by other

18   parties against [p]etitioner”); cf. Disabled Patriots of Am.,

19   Inc. v. Niagara Group Hotels, LLC, No. 07CV284S, 2008 WL 1867968,

20   at *4 (W.D.N.Y. Apr. 24, 2008) (awarding Southern District of

21   Florida rates where defendant did not object to the calculation,

22   but deeming the rate to be “[un]reasonable for this District”).

23   The instant case requires us to provide further guidance to

24   district courts by delineating to a greater degree the


                                   -10-
1    “circumstances” that will justify the “reasonable” selection of

2    out-of-district counsel, and the concomitant payment of out-of-

3    district rates.

4         We now hold that, when faced with a request for an award of

5    higher out-of-district rates, a district court must first apply a

6    presumption in favor of application of the forum rule.   In order

7    to overcome that presumption, a litigant must persuasively

8    establish that a reasonable client would have selected out-of-

9    district counsel because doing so would likely (not just

10   possibly) produce a substantially better net result.   In

11   determining whether a litigant has established such a likelihood,

12   the district court must consider experience-based, objective

13   factors.   Among the objective factors that may be pertinent is

14   counsel’s special expertise in litigating the particular type of

15   case, if the case is of such nature as to benefit from special

16   expertise.   A litigant cannot overcome the presumption through

17   mere proximity of the districts, nor can a litigant overcome the

18   presumption by relying on the prestige or “brand name” of her

19   selected counsel.   Lawyers can achieve prestige and fame in

20   numerous ways that do not necessarily translate into better

21   results.   The party seeking the award must make a particularized

22   showing, not only that the selection of out-of-district counsel

23   was predicated on experience-based, objective factors, but also

24   of the likelihood that use of in-district counsel would produce a


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1    substantially inferior result.    Unless these limitations are

2    observed, the award of attorney’s fees would not respect what we

3    described in Arbor Hill as the “touchstone” of the doctrine,

4    “that district courts should award fees just high enough ‘to

5    attract competent counsel.’”   493 F.3d at 121 (emphasis added).

6    Among the ways an applicant may make such a showing is by

7    establishing that local counsel possessing requisite experience

8    were unwilling or unable to take the case, Agent Orange, 818 F.2d

9    at 232, or by establishing, in a case requiring special

10   expertise, that no in-district counsel possessed such expertise.

11        In Arbor Hill, we rejected application of a “strict forum

12   rule” as the “settled law of this circuit.”    493 F.3d at 121 n.8.

13   But in saying the forum rule is not “strict,” we mean not

14   absolute.   In delineating the parameters of the exception, we

15   continue to adhere both to our previous holdings and those of

16   other circuits.   As the Seventh Circuit has stated:

17        If a high priced, out of town attorney renders services
18        which local attorneys could do as well, and there is no
19        other reason to have them performed by the former, then
20        the judge . . . m[ay] allow only an hourly rate which
21        local attorneys would have charged for the same
22        service. On the other hand, there are undoubtedly
23        services which a local attorney may not be willing or
24        able to perform. The complexity and specialized nature
25        of a case may mean that no attorney, with the required
26        skills, is available locally.
27
28   Chrapliwy v. Uniroyal, Inc., 670 F.2d 760, 768 (7th Cir. 1982);

29   see also Maceira v. Pagan, 698 F.2d 38, 40 (1st Cir. 1983);

30   Avalon Cinema Corp. v. Thompson, 689 F.2d 137, 140-41 (8th Cir.

                                      -12-
1    1982).

2         Our interpretation of the exception to the forum rule

3    provides a roadmap for district courts to follow, and guidance

4    for litigants, and their counsel, to consider in taking cases and

5    seeking attorney’s fees.   There are sound policy reasons for a

6    clarified exception to the forum rule as opposed to a more

7    nebulous test, among them predictability and economy.   As

8    discussed infra, the instant case demonstrates that replacing a

9    less defined, more opaque rule with the one we announce promotes

10   cost-consciousness, increases the probability that attorneys will

11   receive no more than the relevant market would normally permit,

12   and encourages litigants to litigate with their own pocketbooks

13   in mind, instead of their opponents’.

14   III. The Instant Appeal

15        In this case, the district court awarded attorney’s fees to

16   Simmons’ counsel based on the prevailing hourly rates in the

17   Southern District, where her counsel was based, as opposed to the

18   Eastern District, where the suit was litigated.   The district

19   court concluded that the exception to the forum rule applied to

20   this case because of (1) counsel’s “experience in the area of

21   employment law, and in particular, his experience litigating

22   disability discrimination cases, both in the Southern and Eastern

23   Districts,” Simmons, 2008 WL 630060, at *2, (2) counsel’s

24   “success rate” in litigating such cases, id. at *3, and (3) the


                                    -13-
1    “proximity” of counsel’s Southern District office to the Eastern

2    District, id.; see also id. (noting that “travel time between the

3    Southern and Eastern District is minimal as the principal

4    courthouses for each district are minutes away from each other,

5    on either side of the East River”).       The district court concluded

6    that, “[a]lthough there may be other civil rights attorneys in

7    the Eastern District,” Simmons had satisfied the exception to the

8    forum rule by hiring an attorney that a “reasonable paying

9    client” would have hired.    Id.

10        In light of our clarification of the exception to the forum

11   rule, it is apparent that Simmons has not overcome the

12   presumption in favor of the forum rule.      Although the district

13   court properly considered counsel’s experience and success rate

14   in assessing the merits of Simmons’ application for out-of-

15   district rates, Simmons presented no evidence to the district

16   court or on appeal that, had she retained Eastern District

17   counsel instead of Southern District counsel, she would have

18   received a substantially inferior result to that provided by her

19   selected counsel.   Nor has she shown that Eastern District

20   counsel were unable or unwilling to take her case; indeed, the

21   district court itself noted that other “civil rights attorneys in

22   the Eastern District” may have been able to competently prosecute

23   Simmons’ litigation.   Id.   While Simmons cannot be faulted for

24   wanting to retain counsel with the best possible reputation, it


                                        -14-
1    is not the TA’s responsibility to compensate for such counsel

2    based on higher out-of-district rates where Simmons has not shown

3    that they were likely to produce a substantially better result

4    than competent counsel in the Eastern District would produce for

5    less – in this case, substantially less – money.   The TA should

6    not be required to pay for a limousine when a sedan could have

7    done the job.

8         Accordingly, Simmons cannot satisfy the exception to the

9    forum rule as we have articulated it, and the district court

10   erred in deviating from the forum rule in this case.

11                              CONCLUSION

12        For the foregoing reasons, the district court’s attorney’s

13   fees award is VACATED, and the case is REMANDED for the district

14   court to reduce the attorney’s fees award by $45,000, which

15   represents the difference between the prevailing hourly rates of

16   the Southern District and Eastern District.




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