The opinion of the court was delivered by: Kessler, District Judge.
Plaintiffs have filed a Motion for An Award of Litigation Costs,
Including Attorneys' Fees and Out-of-Pocket Expenses, for 1998.
Defendants do not contest Plaintiffs' entitlement to an award of fees
and costs but strongly oppose the actual amounts sought, which total
$434,009.83. Upon consideration of the Motion, the Opposition, the
Reply, the Supplemental Opposition, the numerous exhibits submitted
by the parties, the applicable case law, and this Court's knowledge of
the long history of this case, the Court concludes that Plaintiffs'
Motion should be granted in part and denied in part for the following
In 1993, Plaintiffs filed this class action, pursuant to
42 U.S.C. § 1983, on behalf of themselves and impoverished children
and adults seeking Medicaid coverage and services in the District of
Columbia. After a seven-day bench trial, in April of 1996, this Court
issued a comprehensive opinion on liability on October 16, 1996, in
Salazar v. District of Columbia, 954 F. Supp. 278 (D.D.C. 1996). A
Remedial Order was entered on January 21, 1997, and an Amended Remedial
Order was entered on May 6, 1997. Both parties filed timely appeals
with the United States Court of Appeals for the District of Columbia
Ultimately, after lengthy settlement discussions and on the eve of
oral argument in the Court of Appeals, the parties were able to reach a
settlement on September 24, 1998, and presented an Order Modifying the
Amended Remedial Order of May 6, 1997, and Vacating the Order of March
27, 1997. See Order of September 28, 1998. ("Settlement Order" or
"Order"). After public notice and a hearing, the final Settlement Order
was entered on January 25, 1999. The Settlement Order provided for the
payment of $1,600,000 to cover all attorneys' fees and expenses incurred
through December 31, 1997 (¶ 69).*fn1 The parties agree that the
Plaintiffs' claims for appellate, settlement, and attorneys' fees work
were specifically exempted from the Settlement Order.
Plaintiffs presented the present fee petition to Defendants on May 7,
1999, in an effort to settle the issue without involving the Court. As
of the formal filing date of the Motion, December 9, 1999, Defendants
had still not provided any response to Plaintiffs' settlement proposal.
II. Does the Settlement Order Govern the Hourly Rates At Which
Plaintiffs Are To Be Paid?
Defendants argue, as a threshold matter, that Paragraphs 64 and 65 of
the Settlement Order provide the standard for determining the hourly
rates at which the lawyers representing Plaintiffs should be paid. In
the Order, the parties agreed that the hourly rate for all attorneys
handling claims of individual class members would be $75.00 per hour,
regardless of the experience level of the lawyer performing the
services; and they agreed that for attorney time spent monitoring
compliance with the Settlement Order, Bruce Terris and Lynn Cunningham
would be compensated at $315.00 per hour, Kathleen Millian and Jane
Perkins would be compensated at $265 per hour, paralegals would be
compensated at $75 per hour, and all other attorney time would not
exceed $200 per hour.
Defendants make two arguments. First, they contend that the Settlement
Order should be interpreted, as a matter of contract construction, to
apply to the 1998 fee request; and second, that the Settlement Order,
based as it is on arms-length bargaining between the parties, provides
the best evidence of what constitutes a reasonable hourly rate for
attorneys fees in this jurisdiction. Neither argument proves persuasive.
First, as to the meaning of the Settlement Order itself, Defendants
concede that fees sought for the work of Plaintiffs' counsel on the
cross-appeals, settlement, and prior attorneys' fees litigation over
"are not specifically covered by the settlement order." Del's Opp'n at 6.
What Defendants are really asking is that the Settlement Order be
applied retroactively, in other words to work performed in 1998 even
though the Order was not entered until January 25, 1999. That is not
what the parties agreed to, nor is there any such provision in the
Settlement Order. Clearly both parties knew that 1998 fees were being
incurred during the hiatus between the December 31, 1997, closure date
provided in Paragraph 69 and the presentation of the Order for approval
on September 24, 1998. What is more, the parties also knew that even
after filing of the Settlement Order, some type of public notice would
be required because the interests of the class were substantially
affected by the settlement; in fact, despite cooperation by the parties
and an expedited schedule, final approval could not be granted until
January, 25, 1999, some four months after the parties' initial request
for Court approval.
Thus, the parties, both represented by very experienced and
knowledgeable counsel,*fn2 had to know that legal representation was
being provided to and for class members during 1988, while they were
hammering out the details of their settlement and while the Court
provided notice and an opportunity to be heard to class members. They
also had to know that no Settlement Order could be approved and signed
until those steps in the process were completed. Despite that certain
knowledge, the Order clearly states that it only settles claims through
December 31, 1997, and contains no provisions for retroactive
application. Given this analysis, Defendants' arguments in favor of
retroactivity lack persuasiveness.
With regard to Defendants' second argument (that the hourly rates
contained in the Settlement Order provide the best evidence of what
constitutes a reasonable hourly rate in this jurisdiction), Defendants
are simply wrong. First, as noted above, Paragraph 66 of the Settlement
Order explicitly notes that "these rates were based on compromise and
the parties do not intend these rates to apply for any purpose other
than those set forth in Paragraphs 64 and 65." Defendants' argument is
flatly inconsistent with this language to which they have agreed.
Second, rates which are the product of compromise and settlement, by
definition, cannot represent an objectively reasonable market rate for
similar work in this jurisdiction. It is the very nature of compromise
and settlement for each party to give up something and therefore the
rates contained in Paragraphs 64 and 65 are, of necessity, more than the
Defendants would like to pay and less than the Plaintiffs would like to
For these-reasons, the Court concludes that the hourly rates set forth
in Paragraphs 64 and 65 of the Settlement Order do not provide the
standard for determining the hourly rates at which the lawyers
representing Plaintiffs should be paid.
III. At What Hourly Rates Are Plaintiffs Entitled to be Paid?
In Blum v. Stenson, 465 U.S. 886, 895, 104 S.Ct. 1541, 79 L.Ed.2d 891
(1984), the Supreme Court determined ...