principally on its reading of the plain language of the Act and of the Act's legislative history. Court's November 3, 1977 Memorandum.
As this skeletal history of the case shows, it did involve several novel and somewhat complex issues. In light of these issues and the defendant's tenacious defense of its position on each, the Court finds that the 270 hours spent by plaintiffs' attorneys on the case to be reasonable and will not reduce those hours. On the other hand, the Court does not find that the issues and their treatment by plaintiffs' attorneys was such that an increase in the hours claimed or, more appropriately, an increase in the hourly rate assessed for the attorneys' services is warranted. The briefs and arguments of plaintiffs' counsel were helpful to the Court, but often they provided only a mere impetus to the Court's ultimate resolution of the issues. On some of the key issues, such as the application of the Act's statute of limitations, and the appropriate statutory damages, the Court was required to rely on its own investigation and analysis of precedents and the Act's legislative history to reach its final decision. Thus, the Court notes that the attorneys' overall treatment of the issues was adequate, but not of such an unusually good quality to merit an increase in the fees awarded. See Lindy Bros. Builders, Inc. v. American Radiator & Standard Sanitary Corp., 487 F.2d 161, 168-169 (3rd Cir. 1973).
3. The skill requisite to perform the legal services properly.
As was touched upon immediately above, plaintiffs' attorneys had the necessary skill to address the substantive issues adequately, and they also had the required skill to handle the procedural difficulties inherent in prosecuting a class action.
4. The preclusion of other employment.
Plaintiffs' attorneys do not claim a specific, direct preclusion of other employment, but they assert that they have an "active practice" so that the 270 hours spent on this case forced them to turn down employment. It is difficult for the Court to accord any weight to this factor in light of this broad, unsupported statement. Furthermore, the Court finds some merit in defendant's contention that the publicity surrounding this case may well generate future offers of employment that will more than compensate the attorneys for their present, unspecified lost opportunities.
5. The customary fee.
Plaintiffs state that the customary fee charged by both their attorneys and by attorneys of comparable skill is $ 75.00 an hour. The Court takes notice that such an hourly rate is reasonable for experienced lawyers in the Washington, D.C. area for the work that was performed in this case. As defendant points out, however, the younger of plaintiffs' two attorneys was but two years out of law school at the instigation of this suit. The affidavits filed by the attorneys also disclose an apparent partner-associate relationship between the attorneys with the younger attorney conferring with the senior attorney and preparing memoranda, motions, and briefs which were later reviewed by the senior attorney. The time spent in conferences and on drafts and reviews does not appear to be unduly repetitive or overlapping that a reduction of the hours claimed would be appropriate. See Parker v. Matthews, 411 F. Supp. 1059, 1067 (D.D.C.1976), Aff'd 182 U.S.App.D.C. 322, 561 F.2d 320 (1977); United Federation of Postal Clerks v. United States, 61 F.R.D. 13, 19 n. 16 (D.D.C.1973). But, when added to the consideration of the younger attorney's relative inexperience at the outset of the case, this apparent relationship provides a clear signal to the Court that a reduction of the rate charged for the younger attorney's services is in order. The Court will accordingly set the rate of compensation for the work of the younger attorney, whose hours, incidentally, represent approximately two thirds of the total hours claimed, at $ 60.00 an hour.
6. Whether the fee is fixed or contingent.
Attorneys typically charge higher fees for work performed on a contingency fee basis to compensate the attorneys for the risk factor in such employment. Some courts have attempted to incorporate this consideration into their statutory award of attorneys' fees by adding "bonus" or "incentive" awards commensurate with the risk of loss undertaken. See, e.g., Lindy Bros. Bldrs. v. American Radiator & Standard Sanitary Corp., 540 F.2d 102 (3d Cir. 1976); Pete v. UMW Welfare & Retirement Fund, 171 U.S.App.D.C. 1, 517 F.2d 1275 (1974); National Assoc. of Regional Medical Programs, Inc. v. Weinberger, 396 F. Supp. 842 (D.D.C.1975) rev'd 179 U.S.App.D.C. 154, 551 F.2d 340 (1976), Cert. denied, 431 U.S. 954, 97 S. Ct. 2674, 53 L. Ed. 2d 270 (1977). The risk of loss to the attorneys dissipated early in this action when the plaintiffs prevailed on the merits by the Court's March 1975 decision on the defendant's motion for summary judgment. With success on the merits, the attorneys were assured of receiving reasonable compensation for their efforts because of the Act's mandatory provision of attorneys' fees. At that time, the attorneys had logged approximately 30% Of the total hours now claimed and still had the bulk of their work concerning the class action, such as discovery, notification of the class, and the determination of statutory damages before them.
A second reason given for bonus awards for contingency litigation is to attract more lawyers into accepting such cases where a public benefit might be conferred by their success. This consideration is especially appropriate in areas of litigation generally considered undesirable by the bar. This case does confer a public benefit, but it is difficult to quantify how great a benefit or how much of the benefit is the result of the work of the plaintiffs' attorneys. As noted above, the attorneys often provided merely the impetus for the Court's decision on the several issues raised in the case. Finally, the Court notes that consumer litigation is not an undesirable area of practice in this age of consumerism.
In light of the limited nature of attorneys' risk in litigating this case, their limited personal contribution to the aspects of the case conferring a benefit to the public as well as to their clients, and the general acceptability of Truth in Lending litigation, the Court finds that the base award it will make to the plaintiffs' attorneys will adequately compensate them for the risks they assumed in prosecuting this case on a contingency fee basis, sufficiently reward them for their contributions to the public's benefit, and encourage other attorneys to bring such meritorious litigation.
7. Time limitations imposed by the client or the circumstances.
Plaintiffs assert that the short statute of limitations provided by the Act required their attorneys to research and prepare for the basic suit in a "relatively short period of time." Defendant counters with the unrefuted assertion that the named plaintiffs in the basic suit had retained these attorneys as their counsel in the loan transaction on which the basic suit was brought. Thus, the attorneys had the full statutory time within which to file this suit. They stand in the same position as any other attorney who represents a client in a Truth in Lending suit and the Court is not inclined to rule that every such attorney should automatically have his attorneys' fees increased because Congress has decided that suits should be filed soon after the alleged violations occur.
8. The amount involved and the results obtained.
This factor is not as determinative in Truth in Lending litigation as it might be in other types of cases because of the limits placed on the award of damages by the Act. As noted before, Truth in Lending cases do not usually result in awards of actual damages because of problems of proof or the purely technical nature of the violation. The statutory damages provided by the Act were limited to $ 1,000 for individual actions and $ 100,000 or 1% of the creditor's net worth in class actions. 15 U.S.C. section 1640(a)(2) as amended in 1972.
The Act also requires the courts to consider in determining the amount of the award in a class action, among other relevant factors: the amount of actual damages, the frequency and persistency of the creditor's non-compliance, the creditor's resources, the number of persons affected, the extent to which the creditor's non-compliance was intentional. The limits on class damages are to prevent the catastrophic loss that could otherwise occur in class actions with many persons in the class. S.Rep.No.93-278, pp. 14-15. The additional considerations direct the courts to individualize the damages to fit the nature of the violation and the ability of the violator to pay. No limit is placed on the awards of actual damages. The obvious concern in limiting statutory damages is to avoid unduly penalizing a creditor with an assessment of damages which are essentially a windfall to the successful plaintiffs. This concern does not apply to the awards of attorneys' fees for these fees represent actual expenses incurred by the plaintiffs or, in contingency cases such as this, compensation for their attorneys. The award of attorneys' fees is not a windfall to plaintiffs, and their reduction or denial would occasion a real loss to them. There is little reason to look to the limited award of statutory damages to determine the reasonableness of attorneys' fees which are generated by the unlimited costs of litigation.
Plaintiffs did not seek actual damages in this case. Because of the net worth of the defendant, damages were limited to $ 44,700.84. Upon examination of the aforementioned additional considerations for the Court to review in assessing damages, the Court further reduced the award to one half of the amount allowed. See Court's November 3, 1977 Memorandum. The attorneys' fees sought by plaintiffs exceeds this award, and the fees that the Court will eventually award will approximate it. Defendant objects that it is an "unreasonable judicial system which would permit the attorney to get an award larger than the client's." Defendant's contention ignores the purpose for limiting statutory damages and the fact that attorneys' fees do not confer any benefit on the plaintiffs or their attorneys other than to make them whole.
The Court also notes the litigation expenses incurred by the plaintiffs were largely generated in response to defendant's tenacious defense on every procedural and substantive issue in the case, up to and including the present motions. Defendant set the pace in this suit from filing a dispositive motion before the completion of discovery, to resisting discovery, to challenging the award of any damages and attorneys' fees. Defendant certainly has the right to assert all defenses, but it must bear the cost incurred by the necessary responses to it tactics. See Starks v. Orleans Motors, Inc., 372 F. Supp. 928, 933 (E.D.La.), Aff'd 500 F.2d 1182 (5th Cir. 1974).
Finally, as the Court noted heretofore, there is precedent for an award of attorneys' fees in Truth in Lending cases exceeding or approximating the award of damages. See note 6, supra.
9. The experience, reputation, and ability of attorneys.
Defendant does not challenge the qualifications of plaintiffs' attorneys except in noting the younger attorney's relative inexperience at the commencement of the suit. This factor has been discussed above.
10. The undesirability of the suit.
This factor is directed toward cases that may be unpopular in the community. A suit under the Truth in Lending Act is not such a case.
11. The nature and length of the professional relationship with the client.
The named plaintiff employed the class plaintiffs' attorney Kass as their counsel for the transaction which gave rise to the basic suit.
12. Awards in similar cases.
Courts have made numerous awards of attorneys' fees under the Act. As noted above, awards of attorneys' fees exceeding or approximating the award of damages are not uncommon. Defendant's opposition to the award of fees on this factor is limited to this point which was discussed above and dismissed.
There being no question of the court's statutory authority to make an award of attorneys' fees, the only other relevant consideration under this factor would be the absolute amount of the award. Comparison with other class actions brought under the Truth in Lending Act does not show the award that the Court is making herein to be unduly large. See, e.g., Barber v. Kimbrell's, Inc., 424 F. Supp. 42 (W.D.N.C.1976) ($ 25,000 awarded for attorneys' fees); Welmaker v. W. T. Grant Co., supra, ($ 17,500 awarded as attorneys' fees even though class was never certified).
The attorneys' fees that the Court will award plaintiffs' counsel are:
n.11 Mr. Skalet's hours include the ten hours spent on the petition for attorneys' fees.
The Clerk of the Court has taxed the defendant for costs of $ 189.03. Both parties have moved for the Court to review this assessment. Defendant contends that it is premature because the November 3, 1977 Order of this Court, which awarded damages to plaintiffs, is not a final appealable judgment. But the Court's November 3, 1977 Order expressly directed plaintiffs to file their motion for costs with the Clerk within ten days of that Order. Plaintiffs complied with that Order. The Court will deny defendant's motion.
Plaintiffs' motion seeks to augment the costs awarded by the Clerk. Specifically, plaintiffs seek reimbursement for $ 1,414.20 spent for an expert witness, $ 180.66 for the costs of depositions, $ 136.23 for "postage and copying, taxis and out-of-pocket expenses."
Generally, costs for expert witnesses are limited to the statutory fee for witnesses rather than the actual fees charged by the witness, which is what plaintiffs seek by their motion. E. g., Taylor v. Washington Terminal Co., 308 F. Supp. 1152 (D.D.C.1970); Firtag v. Gendleman, 152 F. Supp. 226 (D.D.C.1957). Peck, Taxation of Costs, 37 F.R.D. 478 at 481, 490 (1965). An exception is sometimes made when the proponent of the expert witness has secured the prior approval of the Court. Plaintiffs did not obtain the Court's approval, but they argue that they should still be awarded the actual fees because it was defendant's obstinate resistance to discovery regarding its net worth which required the employment of the expert. There is no question that the defendant would not stipulate to its net worth, an item of information necessary to the determination of the maximum statutory damages the Court could award. 15 U.S.C. section 1640(a)(2). Plaintiffs' expert provided the Court with this information. The federal rules, however, provide less expensive ways to obtain this same information, such as requests for admissions and the service of interrogatories, and plaintiffs' failure to employ these available methods precludes them now from receiving the $ 1414.20 they seek as expert witness fees.
Plaintiffs' request for an award to cover their counsel's unspecified out-of-pocket expenses must also be denied. Such expenses are not normally taxable as costs. Blankenship v. Boyle, 337 F. Supp. 296, 302 (D.D.C.1972). Plaintiffs offer no statutory support for their request other than noting the "mandatory" nature of the award of costs under the Act. Because normally taxable costs are awarded as a matter of course to prevailing litigants under 28 U.S.C. § 1920, plaintiffs contend that the mandatory award of costs under the Act was intended to expand the meaning of "costs" to include out-of-pocket expenses. Obviously, other equally logical interpretations can be given to the provision of a mandatory award, and if Congress intended to expand the coverage of costs they could have done so more clearly than as suggested by plaintiffs.
As case law support for their contention, plaintiffs cite Bradley v. School Board of City of Richmond, 53 F.R.D. 28 (E.D.Va.1971), Rev'd 472 F.2d 318 (4th Cir. 1972), Vacated 416 U.S. 696, 94 S. Ct. 2006, 40 L. Ed. 2d 476 (1974),
for the proposition that an award for disbursements is proper when a litigant functions as a "private attorney general." Plaintiffs note that other courts have expressly found that Congress intended to utilize private plaintiffs under the Act to serve as private attorneys general. E. g., McGowan v. Credit Center of North Jackson, Inc., supra ; Sosa v. Fite, 498 F.2d 114 (5th Cir. 1974); Ratner v. Chemical Bank New York Trust Co., 329 F. Supp. 270 (S.D.N.Y.1971).
Bradley, however, was decided prior to Alyeska, supra, which stated that:
Congressional utilization of the private-attorney-general concept can in no sense be construed as a grant of authority to the Judiciary to jettison the traditional rule against nonstatutory allowances to the prevailing party and to award attorneys' fees whenever the courts deem the public policy furthered by a particular statute important enough to warrant the award. 421 U.S. at 263, 95 S. Ct. at 1624.
Moreover, Bradley presented a more compelling case than that here for a court to exercise whatever equitable authority it has after Alyeska to award attorneys' fees and costs. Bradley was a class action brought under 42 U.S.C. § 1983 to end racial discrimination in the operation of public schools in Richmond, Virginia. The case was litigated for sixteen years in the face of what the district judge found to be "obdurate obstinacy" on the part of the defendant. Of particular relevance here, the district judge noted that the complexity and unpopularity of the case necessitated the utilization of out-of-town counsel, whose travel expenses accounted for the bulk of the disbursements claimed.
The Court does find some potential merit in plaintiffs' request for the enlargement of the costs awarded for the taking of depositions. Expenses incident to the taking of depositions are taxable as costs if the depositions are reasonably necessary for use in the case, but not if the depositions are necessary only for preparation for the case. Moore's Federal Practice P 54.77(4). The Court received several of plaintiffs' depositions in an evidentiary hearing on damages and relied on these depositions in determining the propriety and amount of statutory damages. November 3, 1977 Memorandum, p. 5 nn. 4, 6 & 7. It is not apparent from plaintiffs' motion or from the Clerk of Court's Bill of Costs whether plaintiffs were denied compensation for these depositions or for other depositions which were not reasonably necessary for use in this case. The Court will therefore deny this aspect of plaintiffs' motion without prejudice to its refiling within ten days of this Memorandum.
Finally, defendant's motion to revise the November 3, 1977 Order to include Fed.R.Civ.P. 54(b) certification will be denied as moot, because the Order accompanying this Memorandum will direct the Clerk of the Court to enter judgment for the plaintiffs.
One final matter pending before the Court is the defendant's motion to strike the name of Mr. and Mrs. Keiper from the list of persons in plaintiffs' class and to reduce the damage award proportionately. In support of its motion the defendant has filed the Keipers' letter of December 5, 1977, to plaintiffs' counsel which expressed the Keipers' "wish to be excluded from the class in the Postow class action suit against Oriental Building Association." Plaintiffs do not oppose striking the name of the Keipers, but they do oppose any reduction in the award, correctly noting that the Court did not base the award on the individual statutory remedy. Instead, the Court made the award pursuant to the class statutory remedy, and granted only one half the maximum allowable according to the statute and the defendant's net worth. The relatively few plaintiffs in this case had a marginal effect on the Court's award. As the Court expressly noted in its November 3, 1977 Memorandum: "(the) number of persons adversely affected . . . (does) not weigh heavily toward exacting a heavy penalty from defendant." It was, however, only one of several factors that the Court considered in awarding less than the full amount of damages authorized. The loss of one set of plaintiffs, therefore, does not demand a further reduction in the award.