Arbor Hill—Is Three Times a Charm?

It’s unusual for any court to issue three versions of one opinion, but in Arbor Hill Concerned Citizens Neighborhood Ass’n, No. 06–0086 (2d Cir. Apr. 10, 2008), a civil rights case involving an award of attorneys fees, the U.S. Court of Appeals for the Second Circuit is at three, and counting.   One might ask “why?”

The Court got into difficulty with its first decision in July 2007.  It took the discouraging step of declaring that a judge could reduce an award of civil rights attorneys fees if a winning client’s lawyer originally took the case in order to advance a “reputational” or “societal” goal.  According to the Court of Appeals, a judge’s task should be to determine whether “a thrifty hypothetical client” would have been able to get a lawyer to take a civil rights case for less than the usual rate.  If the conclusion is yes, then the judge could reduce the fee award.

But the court’s reasoning was unpersuasive to many. 

For one thing, a central premise of the laws that provide for attorneys fees awards in civil rights cases is that there aren’t enough lawyers willing to take these cases without compensation at the market rate payable to attorneys in conventional matters.  Civil rights fees laws are designed to create a financial incentive sufficient to ensure that laws will be enforced and rights vindicated.  A rationale that destroys this financial incentive, on the theory that nonfinancial motivations are enough to enable an imaginary client to secure a lawyer, destroys the guiding purpose of these fees provisions, and eliminates their protection for civil rights. 

Moreover, since lawyers outside of the civil rights community take cases for all kinds of reasons—including for “the money,” or for the reputational value that accompanies the representation of certain high profile commercial clients—it hardly makes sense to penalize civil rights lawyers for pursuing the noble cause of enforcing the rule of law, or claiming the prestige that comes with doing good.

And how could such a rule ever work?  Will American courts start quizzing lawyers about their inner thoughts?  Hopefully not—our society generally still rejects big brother-ish mind probing that is this blatant.  Nor could such inquiries be easily carried out, if only because lawyers and their firms commonly have multiple, and often contradictory, reasons for taking cases. 

And what about that concept of the “thrifty hypothetical client” who can be deemed, in hindsight, able to obtain bargain rates from lawyers motivated by reputational and societal goals.  Does that occur?  Do these clients see the altruism and ambition in their lawyers minds?  That would be making a large assumption.

If this weren’t enough of a mess, the Arbor Hill decision was also notable for having omitted to mention and to distinguish certain key precedents—past decisions, presumably still good law, that had rejected the idea of discounting fee awards for these reasons.

Since in recent years, the opportunities for people to vindicate their civil rights have been limited by a Supreme Court that has made it ever more difficult to claim attorneys fees, Arbor Hill was an alarming development.

With attorneys at Jenner and Block, and with Hofstra Law Professor and civil rights attorney, Leon Friedman, the Brennan Center urged the Circuit Court, in an amicus brief, to fix the Circuit’s civil rights fees jurisprudence by granting a request for rehearing.  We also supported a request for the entire Second Circuit to re-decide the case en banc.  And, we brought together in the amicus brief a coalition of 29 public interest groups anxious for the court to issue a new decision.

The Court acted, but in the most modest of ways.  It denied the request for rehearing, but amended its opinion with a new footnote, explaining that it had never meant to change the law on civil rights attorneys fees:  “Our decision today in no way suggests that attorneys from nonprofit organizations or attorneys with private law firms engaged in pro bono are excluded from the usual approach to determining attorneys fees.”  But the court left the rest of its opinion unchanged, and the civil rights community was left to speculate about the opinion’s import and effect.  

Months passed, with the court’s confusing second opinion unchanged, and in place.  But then, on April 11, 2008 the court issued a third version of its opinion.  This time, the court enlarged the same footnote, and quoted one of its previously omitted precedents for the proposition that:  “[N]or is the award necessarily limited because the attorney has agreed to undertake the case for a reduced fee compared to the customary market rate.” 

Of course, this language, still tentative, hardly puts the problem to rest, and the original petition for rehearing by the entire Circuit Court, en banc, is still pending before the court—so perhaps yet another opinion, a fourth, is on the way.  But the newest footnote does take a significant step toward normalizing the Circuit’s civil rights fees jurisprudence. 

Can we conclude that civil rights lawyers may avoid discounts of fee awards based on inquiries into their inner motivations in taking cases?   In the wake of the three Arbor Hill decisions, that’s still anything but clear, but the court has given us reason to hope so.