Nance et al v. Interior

ATTORNEY FEES: $1,483,449 fees/costs recommended by Strong approved by Christensen for decades of stonewalling by US which forced Plaintiffs to litigate statutory right to coal tract transfer, over objection by US to rates of $500 for 1 attorney, $300 for 6.

An amendment to the Surface Mining Control & Reclamation Act of 1977 entitled coal owners to exchange their coal interests for equally valuable coal owned by the US in situations where mining was prohibited. Notwithstanding the promise of an exchange, Plaintiffs were stymied for many years. They at least twice reached agreement with BLM, but the agreements were never finalized. Thus they were compelled to sue. After 6 years of litigation the exchange was consummated and they received exchange coal valued at $5,536,000. The final issue is the compensation to be paid to Plaintiffs’ attorneys. Magistrate Strong’s task in determining the amount was complicated by Edwards, Frickle & Culver not maintaining contemporaneous time & billing records. The Court suspects that Plaintiffs would not have achieved justice had they not found competent counsel to represent them on a contingency — they would not have been able to fund 6 years of litigation by lawyers charging on an hourly basis. In any event, Judge Cebull found that they should be awarded fees & costs, calculated on a lodestar basis rather than a percentage of the value of the coal. Strong heeded Cebull’s order, applied the appropriate standards, and awarded $1,483,449.12:

Fees for 917.2 hours by Clifford Edwards at $500/hr, totaling $458,600.

Fees for 2,443.2 hours by the 6 other attorneys in the firm at $300/hr, totaling $732,960.

Litigation costs of $180,384.74.

Pre-litigation costs of $111,504.38.

The US urges a lower hourly rate.

A reasonable rate is determined by referencing “the prevailing market rates in the relevant community,” Perdue (US 2010), and “the experience, skill, and reputation of the attorney requesting fees,” Chalmers (9th Cir. 1986). Pursuant to the “no-interest rule,” fees awarded against the US must be based on the rate when the work was performed rather than when the fees are awarded. Shaw (US 1986). The party seeking fees bears the burden of submitting “detailed time records justifying the hours claimed.” Chalmers. Hours may be reduced “where documentation of the hours is inadequate.” Id. Under the SMCRA, fees & costs should only be awarded for hours associated with claims that were intimately tied to resolution of the judicial action and where the claimant achieved “some degree of success on the merits.” Ohio River Valley (4th Cir. 2007). While there is a strong presumption that a lodestar calculation is reasonable without enhancement, it may be overcome in rare cases. Perdue. The USSC has recognized 3 situations where enhancement may be appropriate: the method for determining the rate in the lodestar calculation does not adequately measure the attorney’s true market value, as demonstrated in part during the litigation; the attorney’s performance includes extraordinary outlay of expenses and the litigation is exceptionally protracted; the attorney’s performance involves exceptional delay in payment of fees. (EFC advanced significant litigation costs of $180,384.74, underscoring that had Plaintiffs not had the good fortune of retaining it on a contingency they probably would not have been able to pursue the case.)

The US contends that EFC failed to carry its burden of producing evidence that the requested rate represents the prevailing rate in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation. It emphasizes that determining a reasonable rate “is not made by reference to rates actually charged the prevailing party.” Chalmers. This is without merit. EFC, as its standard practice, took the case on a contingency. The total awarded represents a significant reduction from the rate it charged. Further, it has shown that the requested rate represents the prevailing rate in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation. The affidavit of James Goetz clears this hurdle.

The US also contends that the rate is based on current rather than historical rates. This is unsubstantiated speculation and conflicts with EFC’s undisputed affidavits that in the last several years EFC clients agreed to pay Edwards $500/hr and all others in the firm $300. This hurdle is also cleared.

The Court appreciates, as evidenced by Steven Ruffatto’s affidavit, that other skilled Montana attorneys perform natural resources work at rates less than those charged by EFC. That does not mean that EFC’s rates are therefore unreasonable. Market prices of commodities and services are determined by supply & demand, and thus, in a traditional sense, there really is no such thing as a prevailing market rate for lawyers in a particular community. Blum (US 1994). Experience, skill, and reputation vary greatly within the community and can vary greatly within firms, as evidenced by the rates charged by the attorneys in Ruffatto’s firm. The reality is that Plaintiffs did not, and probably could not, afford lawyers who billed in a traditional hourly manner. Instead, they found highly competent and skilled lawyers who were willing to put aside their other work and risk hundreds of hours and tens of thousands of dollars of costs to pursue their claims for many years. Had Plaintiffs not been successful, their lawyers would have recovered nothing. But Plaintiffs were successful, and their lawyers are entitled to be paid for their efforts.

The Court finds no clear error in any of Strong’s other findings. Fees & costs are awarded as recommended.

Nance, Boedecker, Hayes, Rodolph, and Brown Cattle Shareholders Coal Trust v. Interior, 41 MFR 343, 3/11/14.

Clifford Edwards, Philip McGrady, Christopher Edwards, John Edwards, Roger Frickle, Triel Culver, and Jackie Shields (Edwards, Frickle & Culver), Billings, for Plaintiffs; Ruth Storey (DOJ Natural Resources), DC, and AUSA Victoria Francis.