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No. 01-115
IN THE SUPREME COURT OF THE STATE OF MONTANA
2001 MT 287
MICHAEL LAUDERT,
Petitioner and Respondent,
v.
RICHLAND COUNTY SHERIFF'S
DEPARTMENT and HUMAN RIGHTS
COMMISSION of the STATE OF MONTANA,
Respondents and Appellants.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
The Honorable Dorothy McCarter, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Kenneth D. Tolliver, Wright Tolliver Guthals, P.C., Billings, Montana
For Respondents:
E. June Lord, Attorney at Law, Great Falls, Montana
Barbara E. Bell, Bell & Marra, P.L.L.C., Great Falls, Montana
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Submitted on Briefs: July 12, 2001
Decided: December 20, 2001
Filed:
__________________________________________
Clerk
Justice Terry N. Trieweiler delivered the Opinion of the Court.
¶1 The Respondent, Michael Laudert, as the prevailing party in a discrimination suit,
petitioned the District Court for the First Judicial District in Lewis & Clark County to
award attorney fees and costs from the Appellant, Richland County Sheriff's Department
(RCSD). The District Court awarded attorney fees and costs in the full amount claimed.
RCSD appeals the District Court's order awarding attorney fees. We affirm the order of
the District Court.
¶2 The sole issue on appeal is whether the District Court erred when it awarded the full
amount of attorney fees claimed by Laudert.
FACTUAL BACKGROUND
¶3 Because this is the second time we have considered this case on appeal, the following
factual background relates only to the attorney fee dispute. A more detailed statement of
the factual background can be found in Laudert v. Richland County Sheriff's Department,
2000 MT 218, 301 Mont. 114, 7 P.3d 386 (Laudert I).
¶4 In 1992, Laudert filed a discrimination complaint with the Montana Human Rights
Commission in which he alleged that the RCSD considered his physical disability when it
hired someone else for the county's deputy sheriff position.
¶5 The Hearing Examiner from the Human Rights Commission (HRC) found that RCSD
had improperly considered Laudert's health condition during the interview, but found a
sufficient non-discriminatory reason for RCSD's decision to hire another applicant. The
Hearing Examiner determined that Laudert was not harmed as a result of the unlawful
consideration of his disability and denied Laudert's claim for $196,000 in damages.
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However, RCSD was ordered to submit a written policy on hiring procedures, with
specific guidelines for inquiry into applicant disabilities, and ordered to refrain from
making pre-hire inquiries on health conditions unless the applicant voluntarily revealed
the disability and RCSD was inquiring about the accommodation needs of the applicant
should he or she be hired.
¶6 The Hearing Examiner's findings were upheld on appeal to the HRC. The HRC
affirmed both the Hearing Examiner's finding of discrimination and his decision not to
award damages.
¶7 Laudert filed a Petition for Judicial Review to the District Court, reasserting his
monetary damage claim and seeking reasonable attorney fees pursuant to § 49-2-505(7),
MCA. RCSD did not contest the order to submit a written policy before the District Court.
Laudert's requests for damages and attorney fees were denied. On appeal to this Court, we
reversed the denial of attorney fees, based on our determination that Laudert was the
prevailing party even though he had not recovered damages. Laudert I, ¶ 57. We
concluded that his victory was not purely "technical" or "de minimis," because the
injunctive relief from RCSD provides the public with a measure of protection from future
civil rights violations by RCSD, and the success of Laudert's action serves the broader
public interest of eliminating discrimination in employment. Laudert I, ¶ 57.
¶8 We remanded to the District Court to determine a reasonable fee award pursuant to §
49-2-505(7), MCA. Laudert's attorneys sought recovery for every hour devoted to the case
and expressed their inability to isolate that time related to the affirmative relief which the
Hearings Examiner granted. RCSD challenged the recovery of attorney fees for
unsuccessful claims and the failure of Laudert's attorneys to segregate the costs and fees
attributable to the issues upon which Laudert prevailed. With the legal issues resolved in
Laudert I, the HRC did not participate in the attorney fee dispute.
¶9 RCSD did not object to either the hourly rate charged by Laudert's attorneys or to any
particular costs or time spent by counsel.
¶10 Following a hearing on November 8, 2000, the District Court awarded Laudert's
counsel fees for all time expended, citing the testimony of Peter Michael Meloy that the
fee was reasonable, this Court's determination in Laudert I that Laudert was the prevailing
party for purposes of an attorney fee award, and this Court's analysis which formed the
basis for that determination in Laudert I.
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¶11 On January 5, 2001, RCSD appealed the District Court's decision.
STANDARD OF REVIEW
¶12 We review a district court's award of attorney fees under § 49-2-505(7), MCA, of the
Montana Human Rights Act, to determine whether the court abused its discretion. Laudert
I, ¶ 48. A district court abuses its discretion if its fee award is based on an inaccurate view
of the law or a finding of fact is clearly erroneous. Ihler v. Chisholm, 2000 MT 37, ¶ 24,
298 Mont. 254, ¶ 24, 995 P.2d 439, ¶ 24.
DISCUSSION
¶13 Did the District Court err when it awarded the full amount of attorney fees claimed by
Laudert?
¶14 The District Court awarded attorney fees to Laudert for the entire lodestar fee, which
is arrived at by taking the number of hours reasonably expended and multiplying it by a
reasonable hourly rate. The District Court cited a variety of factors for its decision. First,
Laudert's expert witness, Peter Michael Meloy, a Helena attorney with extensive
discrimination litigation experience, testified that lawyers and law firms do not ordinarily
segregate issues for billing purposes, the fees itemized in this case were reasonable, and
the focus of civil rights litigation should be the outcome of the entire case, not just issues
on which the claimant prevailed. Second, the District Court interpreted our holding in
Laudert I to mean that as a matter of law, Laudert was entitled to the full amount of
attorney fees claimed as the prevailing party. The District Court concluded, based on this
Court's analysis, that Laudert should be awarded attorney fees for the entire lawsuit, not
just for certain issues.
¶15 RCSD contends that Laudert's counsel should not be entitled to recover at their
normal hourly rate for all hours expended in the case because they did not prevail on every
claim advanced, and, in fact, achieved only limited success in the case. Appellants claim
the only issue on which Laudert prevailed was related to injunctive relief not specifically
requested by Laudert, and that the relief was minor compared to the monetary damages
requested. RCSD cites a line of United States Supreme Court authority for its ultimate
contention that an attorney fee award must be proportionate to the degree of a claimant's
success and adjusted downward for limited success.
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¶16 The basis for attorney fees in the Montana Human Rights Act is § 49-2-505(7), MCA,
which provides in part: "The court in its discretion may allow the prevailing party
reasonable attorney fees." We must determine whether the District Court's award of fees
was "reasonable" given the extent of Laudert's success as the prevailing party. Given its
similarity to fee shifting provisions in federal civil rights statutes (most notably, the Civil
Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988), it is helpful to examine
pertinent federal case law before applying § 49-2-505(7), MCA.
¶17 From the outset, there is a strong presumption, given the rationale behind fee-shifting
provisions, that the lodestar fee is a reasonable fee. Pennsylvania v. Delaware Valley
Citizens' Council for Clean Air (1986), 478 U.S. 546, 565, 106 S.Ct. 3088, 3098, 92 L.
Ed.2d 439. Fee-shifting statutes were not designed to be windfalls for attorneys or to
replicate the amount a private attorney would receive in other types of litigation, but to
enable private parties to retain the legal assistance necessary to seek redress when their
rights are violated. Delaware Valley, 478 U.S. at 565.
¶18 On the issue of appropriately adjusting the lodestar fee, several United States Supreme
Court decisions provide guidance. In Hensley v. Eckerhart (1983), 461 U.S. 424, 103 S.Ct.
1933, 76 L.Ed.2d 40, the Court discussed whether a partially prevailing plaintiff may
recover attorney fees for legal services provided in pursuit of unsuccessful claims. After
determining the lodestar amount, Hensley established a two-step approach to address other
considerations which may lead a district court to adjust a fee award upward or downward:
First, did the plaintiff fail to prevail on claims that were unrelated to the claims on
which he succeeded? Second, did the plaintiff achieve a level of success that makes
the hours reasonably expended a satisfactory basis for making a fee award?
Hensley, 461 U.S. at 434.
¶19 Pursuant to Hensley, a court must first determine whether fees were incurred for
claims that were distinct or interrelated. Distinctly different claims for relief based on
different facts and legal theories which are unsuccessful should be excluded from a
reasonable fee calculation. Hensley, 461 U.S. at 434-35. Unrelated claims should be
treated as if they had been raised in separate lawsuits. Hensley, 461 U.S. at 435. However,
cases which present only a single claim (like most civil rights cases), involve a common
core of facts or are based on related legal theories are not as easily separable. Hensley, 461
U.S. at 435. In these situations, the district court should move to the second step and focus
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on the overall significance of the relief obtained by the plaintiff in relation to the hours
reasonably expended on the litigation. Hensley, 461 U.S. at 435.
¶20 Based on this second consideration, "[t]he result is what matters." Hensley, 461 U.S.
at 435. An attorney should receive fees for the full services provided where a plaintiff has
obtained excellent results. Hensley, 461 U.S. at 435. Even if a plaintiff does not prevail on
every claim raised, if the plaintiff achieves significant success, all hours reasonably
expended on litigation should be included within the attorney fee award. Hensley, 461 U.
S. at 435. In footnote eleven, the Court explained:
Nor is it necessarily significant that a prevailing party did not receive all the relief
requested. For example, a plaintiff who failed to recover damages but obtained
injunctive relief, or vice versa, may recover a fee based on all hours reasonably
expended if the relief obtained justified that expenditure of attorney time.
Hensley, 461 U.S. at 435 n.11. Where the plaintiff is said to have achieved only "limited success" on
the remaining interrelated claims, a reduction to the lodestar may be justified. Hensley, 461 U.S. at 436.
¶21 Following Hensley, the Court elaborated on its approach. The amount of attorney fees
does not have to be proportionate to the damages awarded to the plaintiff. City of
Riverside v. Rivera (1986), 477 U.S. 561, 574, 106 S.Ct. 2686, 2694, 91 L.Ed.2d 466
(holding an attorney fee award of $245,456.25 in a class action where the damages
awarded was only $33,350.00 was reasonable). The amount of damages is "only one of
many factors that a court should consider in calculating an award of attorney's fees."
Riverside, 477 U.S. at 574. Important to its determination in Riverside were the underlying
societal implications of civil rights actions:
[W]e reject the notion that a civil rights action for damages constitutes nothing more
than a private tort suit benefitting only the individual plaintiffs whose rights were
violated. Unlike most private tort litigants, a civil rights plaintiff seeks to vindicate
important civil and constitutional rights that cannot be valued solely in monetary
terms. [citation omitted] . . . Because damages awards do not reflect fully the public
benefit advanced by civil rights litigation, Congress did not intend for fees in civil
rights cases, unlike most private law cases, to depend on obtaining substantial
monetary relief.
Riverside, 477 U.S. at 574-75. The Court also acknowledged Congress' recognition that a plaintiff who
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obtains relief in a civil rights lawsuit "'does so not for himself alone but also as a 'private attorney
general.'" Riverside, 477 U.S. at 575 (citing H.R. Rep. No. 94-1558, at 2 (1973)(quoting Newman v.
Piggie Park Enters., Inc. (1968), 390 U.S. 400, 402, 88 S.Ct. 964, 966, 19 L.Ed.2d 1263)).
¶22 In 1989, the Court held that the critical factor in determining the reasonableness of a
fee is the "degree of the plaintiff's success in relation to the other goals of the lawsuit."
Texas State Teachers Ass'n v. Garland Indep. Sch. Dist. (1989), 489 U.S. 782, 790, 109 S.
Ct. 1486, 1492, 103 L.Ed.2d 866. Applying Hensley, the Court in Farrar v. Hobby held
that no fee may be a "reasonable fee" in certain situations. 506 U.S. 103, 115, 113 S.Ct.
566, 575, 121 L.Ed.2d 494 (plaintiff seeking a $17 million dollar damage award who was
awarded a nominal damage award of $1.00 was declared to be the prevailing party but
entitled to no attorney fees).
¶23 This line of cases is helpful but not authoritative as we enforce Montana's Human
Rights Act. We agree that Hensley is an appropriate starting point for our analysis, but
disagree with RCSD's contention that based on Hensley, the attorney fees in this case
should be adjusted downward.
¶24 As to the issue of whether attorney fees were expended upon distinct or interrelated
claims, the only claim presented was that of discrimination. That single claim was based
on a common core of facts. Because we conclude there was only one claim, we move to
the second, and more difficult, step of the Hensley approach and analyze the level of the
claimant's success.
¶25 If the claimant achieves "limited" success, a downward adjustment may be in order.
However, if the plaintiff achieved significant success, attorney fees should be awarded.
We must determine from what perspective success is measured. RCSD contends the
lodestar amount should be reduced because Laudert did not receive personal relief in the
form of damages. In Garland, the Supreme Court distinguished between the plaintiff's
success from the overall outcome of the case. However, in Laudert I, we rejected the
Supreme Court's requirement in Garland that a plaintiff secure a direct benefit when
judgment is entered to be a prevailing party because it failed to further the purpose behind
the fee shifting provision of the Montana Human Rights Act. Laudert I, ¶ 56. For similar
reasons, we again reject the Garland rationale.
¶26 Civil rights statutes like the Montana Human Rights Act serve to not only benefit
individual plaintiffs but also the broader vindication of important civil and constitutional
rights. We should examine success not only in terms of the direct benefit to the plaintiff,
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which is an important factor, but also whether the claimant's actions further effectuated the
purpose for which the statute was enacted. To deny attorney fees simply because there was
no award of substantial monetary relief, without also looking at the overall outcome of the
case, is short-sighted. The purpose of fee shifting provisions in civil rights laws like the
Montana Human Rights Act, is to encourage "meritorious civil rights litigation" and
ensure "effective access to the judicial process" for persons with discrimination
grievances. Laudert I, ¶ 51 (quoting Hensley, 461 U.S. at 429 n.2). We agree with the
Supreme Court's analysis in Riverside, that plaintiffs in civil rights cases play an important
role in enforcement as private attorneys general. Denial of attorney fees based simply on
lack of personal reward would undermine the purpose for which they are awarded.
¶27 As a result of Laudert's claim, the Hearing Examiner determined that RCSD had
engaged in discriminatory conduct, and granted injunctive relief to ensure the elimination
of such discrimination in the future. RCSD was ordered to submit a written policy
regarding hiring procedures, including specific guidelines on how to inquire into an
applicant's disabilities. Such a determination vindicates the rights of other Montana
citizens similarly situated to be free from future discriminating treatment. Because of
Laudert's initiative and his attorneys' efforts, discriminatory employment practices of this
type will no longer occur in Richland County. This result amounts to significant success
by Laudert's attorneys and merits a full attorney fee award.
¶28 The ability of civil rights plaintiffs with bona fide claims to attract competent counsel
is also of concern. Without attorney fees for successful litigants, meritorious civil rights
litigation often would not be brought. Wagner v. Empire Dev. Corp. (1987), 228 Mont.
370, 372, 743 P.2d 586, 587. A reluctance to accept civil rights cases already exists, where
costs can be high and, generally, the monetary relief is significantly lower than other
private law litigation. Ihler, ¶ 36 n.1. With increasing cuts to entities like Montana Legal
Services, the function of civil rights attorneys to raise meritorious claims is increasingly
important. To significantly reduce the attorney fees in this case, despite the success of the
discrimination claim against RCSD, would further hamper the ability of Montana citizens
to attract counsel with the time and expertise necessary to enforce their civil rights. See
Ihler, ¶ 39.
¶29 Therefore, we conclude that Laudert achieved the level of success necessary to
support an award of the full amount of fees claimed and the District Court did not err by
the amount of fees awarded.
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¶30 In addition, Laudert requests that it be awarded attorney fees and costs on appeal.
Costs on appeal in civil actions are automatically awarded to the prevailing party pursuant
to Rule 33, M.R.App.P. As to attorney fees, we stated in Ihler:
As the prevailing party in the underlying civil rights action, [the plaintiff] is entitled
to reimbursement of fees reasonably incurred, whether they are fees incurred in the
original civil rights trial and appeal, fees incurred in proving those fees, or fees
incurred in defending the district court's fee award.
Ihler, ¶ 67 (quoting Ustrak v. Fariman (7th Cir. 1988), 851 F.2d 983, 990). Accordingly, we hold that
Laudert is entitled to costs and reasonable attorney fees incurred on appeal.
¶31 We affirm the order of the District Court and remand to the District Court for a
determination of attorney fees incurred on appeal.
/S/ TERRY N. TRIEWEILER
We Concur:
/S/ JIM REGNIER
/S/ JAMES C. NELSON
/S/ W. WILLIAM LEAPHART
/S/ PATRICIA COTTER
Justice Patricia O. Cotter concurs.
¶32 I concur in the result reached by the majority. Although I find ample support in the
record for the result reached here, I would not categorically hold, as the majority does at ¶
27, that the result obtained by Laudert's attorneys ". . . merits a full attorney fee award."
Rather, I would simply hold that the District Court did not abuse its discretion when it
awarded a full attorney fee to Laudert. In all other respects, I concur.
/S/ PATRICIA COTTER
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