United States Court of Appeals
For the First Circuit
No. 08-1152
UNITED STATES OF AMERICA,
Plaintiff, Appellee,
v.
ONE STAR CLASS SLOOP SAILBOAT BUILT IN 1930 WITH HULL NUMBER 721,
NAMED "FLASH II",
Defendant in Rem.
____________________
KERRY SCOTT LANE,
Claimant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
Before
Lynch, Chief Judge,
Selya, Circuit Judge, and
Schwarzer,* District Judge.
Brenda Grantland for appellant.
Anton P. Giedt, Assistant United States Attorney, with whom
Michael J. Sullivan, United States Attorney, was on brief, for
appellee.
*
Of the Northern District of California, sitting by
designation.
October 20, 2008
SELYA, Circuit Judge. The instant appeal requires us to
revisit the FLASH II, a sailing vessel once owned by the late John
F. Kennedy. This time around, the district court found that the
government had failed to take reasonable steps to notify a part-
owner of the vessel (Dr. Kerry Scott Lane) of its intent to
forfeit. Since the government already had sold the vessel at
auction, the court — which determined that the sales price equalled
the vessel's fair market value — awarded a share of the net sales
proceeds to Lane. It subsequently granted him attorneys' fees in
an amount less than he had requested.
Lane appeals, challenging both the damages and fee
awards. The damages issues are case-specific, but the issues as to
fees are of potentially broader significance. After careful
consideration of these issues against the backdrop of a tangled
record, we affirm the damages award but modify the fee award.
I. BACKGROUND
We sketch the facts and procedural history in order to
place the issues into a workable perspective. In doing so, we
assume the reader's familiarity with our earlier opinion. See
United States v. One Star Class Sloop Sailboat (Sloop I), 458 F.3d
16 (1st Cir. 2006).
On February 1, 2005, the government filed a civil
forfeiture complaint against the FLASH II, charging that the vessel
comprised the avails of narcotics trafficking. After finding
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probable cause to forfeit, the district court ordered the
government to notify those persons who arguably had an interest in
the FLASH II about the pendency of the action. Only one
individual, Harry Crosby, lodged a claim of interest. For reasons
that are no longer important, the government did not provide notice
to Lane.
On June 3, 2005, the clerk of the district court, acting
pursuant to a government motion, entered a default against all
interested parties who had received notice and had not responded
thereto. See Fed. R. Civ. P. 55(a). Crosby and the government
subsequently negotiated a settlement that contemplated the eventual
sale of the vessel. On July 15, 2005, the district court endorsed
that settlement and entered a default judgment of forfeiture.
Although Lane had learned of the seizure shortly after it
transpired, he did not look into it. He became aware of the
forfeiture proceeding only after the entry of default. He secured
counsel; moved unsuccessfully to vacate or amend the default
judgment, see Fed. R. Civ. P. 59(e), 60(b); and then appealed.
Lane asked the district court to stay the forthcoming
forfeiture sale pending resolution of his appeal. The court
refused to do so. The government proceeded to sell the FLASH II
for $100,000 through Guernsey's (an auction house in New York).
Crosby received one-third of the net proceeds and the government
received the balance.
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We decided Lane's original appeal in August of 2006,
remanding to the district court to determine whether Lane had been
afforded constitutionally adequate notice of the forfeiture
proceeding. See Sloop I, 458 F.3d at 25-26. On remand, the case
was reassigned to a different district judge. See D. Mass. R.
40.1(K)(2).
The new judge ruled that the government had not taken
reasonable steps to discover Lane's proprietary interest in the
vessel and, thus, had given inadequate notice of the forfeiture
proceeding. In re One Star Class Sloop Sailboat (Sloop II), 517 F.
Supp. 2d 546, 549 (D. Mass. 2007). Consequently, the judge vacated
the default judgment. Id.
In due course, Lane and the government cross-moved for
summary judgment. These motions focused chiefly upon the
forfeitability of the FLASH II and its value. The parties
submitted various materials related to value, including evidence of
earlier bids and appraisals and an affidavit signed by Guernsey's
president, Arlan Ettinger. On May 15, 2007, the district court
tentatively granted the government's motion for partial summary
judgment, ruling that as long as the vessel had been properly
forfeited sovereign immunity barred the recovery of any sum in
excess of $100,000.
On May 24, the court held a single-day bench trial, which
focused principally upon the issues of (i) forfeitability and (ii)
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the validity and scope Lane's asserted ownership interest. At the
end of the day, the court reserved decision, set a briefing
schedule, and reminded the parties of the approaching deadline for
the completion of discovery.
The briefs arrived on time. Relatedly, Lane requested
reconsideration of the earlier (tentative) ruling on sovereign
immunity. In the same time frame, the government proffered
transcripts of the depositions of Ettinger and Robert Augustus
Harper (an attorney who had represented another investor in the
FLASH II).
On October 1, 2007, the district court handed down a
comprehensive rescript, in which it concluded that the FLASH II was
not forfeitable; that the vessel had a fair market value of
$100,000 at the time of its seizure; and that Lane should receive
his pro rata share of that sum. See Sloop II, 517 F. Supp. 2d at
554-56. The court also pointed out that, given its finding on fair
market value, the sovereign immunity issue had become moot. Id. at
556.
In a supplemental ruling, the district court found that
Crosby had a valid interest at least equal to the amount
($26,101.24) that he had received under his earlier settlement and
awarded Lane the balance of the $100,000 fair market value figure
(i.e., $73,898.76), together with post-seizure interest. Finally,
the court indicated that Lane, as a prevailing party, was entitled
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to reasonable attorneys' fees under the Civil Asset Forfeiture
Reform Act of 2000 (CAFRA), 28 U.S.C. § 2465(b)(1).
Lane applied for approximately $293,000 in fees.1 The
government vigorously contested the amount. The district court
agreed that the request was exorbitant and awarded $51,929.13. See
United States v. One Star Class Sloop Sailboat (Sloop III), No. 05-
10192, 2008 WL 678519, at *2 (D. Mass. Jan. 9, 2008). This timely
appeal ensued.
II. ANALYSIS
Lane characterizes both the damages and fee awards as
inadequate. We address them separately.
A. Damages.
As said, the lower court found that the fair market value
of the FLASH II was $100,000, and awarded Lane his pro rata share
of that amount. See Sloop II, 517 F. Supp. 2d at 556. On appeal
Lane concedes that he is entitled only to his share of fair market
value and does not challenge the court's proration as such. He
contends, however, that the court erred in valuing the FLASH II at
$100,000. His contention rests on two pillars, one procedural and
one substantive.
1. The Procedural Pillar. Lane claims that the district
court determined the value of the FLASH II prematurely, that is,
1
Both Lane's application and the district court's award
include expenses as well as fees. For ease in exposition, we use
the term "fees" as a shorthand for both fees and expenses.
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before affording him an opportunity to submit relevant evidence.
The theoretical underpinnings of this claim are sound: under normal
circumstances, a party must be afforded a fair chance to submit
evidence and arguments in favor of his position before a final
judgment is rendered. See EEOC v. S.S. Clerks Union, Local 1066,
48 F.3d 594, 609 (1st Cir. 1995). But due process does not
necessarily "require a full-scale trial, or even a hearing strictly
conforming to the rules of evidence" on every issue. In re
Nineteen Appeals, 982 F.2d 603, 611 (1st Cir. 1992); see Aoude v.
Mobil Oil Corp., 862 F.2d 890, 894 (1st Cir. 1988) (holding that
preliminary injunction motion may be heard "on the papers,"
provided that parties have had "a fair opportunity to present
relevant facts and arguments to the court"). Moreover, when the
parties consent to proceed in a particular manner (such as through
written submissions), courts understandably are reluctant to give
the loser a second bite at the apple on the ground that the agreed
process was insufficient. See, e.g., Aoude v. Mobil Oil Corp., 892
F.2d 1115, 1120 (1st Cir. 1989).
The court below found the fair market value of the FLASH
II without an evidentiary hearing devoted to that issue.
Nevertheless, the court provided the parties with ample opportunity
to present valuation evidence. The chronology follows.
The parties identified valuation as a key issue in a
joint statement submitted shortly after vacation of the default
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judgment. See D. Mass. R. 16.3(b). In their cross-motions for
summary judgment, both sides contested valuation and submitted
documents to support their respective positions. For example, Lane
pointed out that the FLASH II had received a high bid of $800,000
during an aborted 1998 auction and that Guernsey's had appraised
the vessel at $800,000 to $1,000,000 in 2004. He also argued that
the 2005 auction occurred under adverse conditions. For its part,
the government proffered an affidavit from Guernsey's president,
Ettinger, discussing the reasons for the munificent bid in 1998 and
for Guernsey's original appraisal. Ettinger also opined that the
2005 auction had taken place under favorable conditions.
The short of it is that the district court received a
substantial number of evidentiary submissions relating to the
vessel's value. Lane contributed to that influx of information and
consented to submitting the valuation issue on the papers. In view
of these facts and because the issue was susceptible to adequate
documentary proof, we discern no procedural bevue in the district
court's approach.
In an effort to blunt the force of this reasoning, Lane
complains that the court's ruling of May 15, 2007 — to the effect
that sovereign immunity barred any recovery in excess of $100,000
— pretermitted the presentation of valuation evidence. The record
belies this plaint. In terms, the May 15 ruling was tentative.
Importantly, it made pellucid that Lane could recover the vessel's
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actual value if the court later determined that the FLASH II was
not lawfully forfeited. The court reiterated that message on at
least two occasions during the bench trial. Thus, Lane had both
the incentive and the opportunity to put forth his valuation
evidence.
Lane suggests that the Ettinger deposition and a
deposition given by Crosby yielded relevant evidence of fair market
value, which he would have proffered had the valuation issue been
tried. That suggestion is doubly flawed. For one thing, Lane
fails to explain why he did not submit this evidence when he had
the chance. For another thing, Lane fails to identify any specific
facts not before the district court at the time of its decision on
value that might have affected the court's determination.2 The
latter failure, in itself, renders Lane's suggestion futile. See
Kelly v. Marcantonio, 187 F.3d 192, 203 (1st Cir. 1999); see also
HMG Prop. Investors, Inc. v. Parque Indus. Rio Canas, Inc., 847
F.2d 908, 915 (1st Cir. 1988) (holding that it is not error to deny
oral argument where complaining party fails to identify even a
"single, definable aspect of its position which could not have been
adequately presented by a written submission").
2
With the exception of Crosby's deposition, all the evidence
mentioned by Lane was before the district court at the time the
court ruled. We have reviewed Crosby's deposition and find that it
contains no material pertinent to the valuation question other than
Crosby's recitation that the vessel had received bids of up to
$800,000 during an earlier (failed) auction. This information was
already before the court through other deponents.
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If more were needed — and we doubt that it is — at the
close of the bench trial the court reminded Lane that he had a
limited time left within which to conclude discovery, including
discovery directed to valuation.3 The court mused that it might
convene a further evidentiary hearing on valuation. At that point,
Lane indicated that such a hearing was unnecessary because the
valuation question could be adjudicated on the papers. This was a
waiver, pure and simple. See, e.g., United States v. Jiménez, 512
F.3d 1, 7 (1st Cir. 2007).
That ends this aspect of the matter. Because the court
below provided Lane an adequate opportunity to present valuation
evidence through procedures to which Lane consented, his procedural
attack is easily repulsed.4
2. The Substantive Pillar. We come now to the
substantive component of Lane's argument. In this regard, he
3
This gentle prodding may have been lost on Lane, but it was
not lost on the government. Following the bench trial, the parties
conducted discovery relevant to the valuation issue, including the
taking of Ettinger's deposition. In the supplemental brief that it
submitted on June 29, 2007, the government relied heavily on the
Ettinger deposition to argue that the fair market value of the
FLASH II was $100,000.
4
During oral argument in this court, Lane raised for the
first time a claim that he was denied his right to trial by jury on
valuation. We have been unable to find any hint in the record that
Lane asserted such a right either before the district court or in
his appellate briefs. In view of these omissions, we have no
occasion to address the argument here. See Pratt v. United States,
129 F.3d 54, 62 (1st Cir. 1997); United States v. Zannino, 895 F.2d
1, 17 (1st Cir. 1990).
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maintains that the evidence shows that the fair market value of the
FLASH II far exceeds $100,000. We review the accuracy of the lower
court's valuation finding for clear error. See McMurray v. C.I.R.,
985 F.2d 36, 40 (1st Cir. 1993); see also Fed. R. Civ. P. 52(a)(6).
Accordingly, we will override the court's valuation only if "on the
whole of the evidence we reach the irresistible conclusion that a
mistake has been made." Smith v. F.W. Morse & Co., 76 F.3d 413,
420 (1st Cir. 1996). If, however, "the district court's account of
the evidence is plausible in light of the record viewed in its
entirety," we must accept it. Anderson v. City of Bessemer City,
470 U.S. 564, 573-74 (1985).
We need not tarry. In the case at hand, the district
court's valuation rested principally upon its conclusion that the
2005 auction was conducted under particularly auspicious
circumstances. See Sloop II, 517 F. Supp. 2d at 551-52. The court
observed that the government had contractually obligated itself (in
the Crosby agreement) to sell the vessel at the highest possible
price; hired Guernsey's, a reputable auction house, in an effort to
fulfill that obligation; and tied Guernsey's commission to the
price actually received. Id. at 552. The court then noted that
the FLASH II was sold at an auction for Kennedy memorabilia that
had received widespread publicity. Id. Given these favorable
conditions, the court determined that the $100,000 price fetched at
the auction reflected fair market value. See id.
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Lane has identified several pieces of evidence that
purportedly undermine this finding of fact. For example, he cites
to negative publicity surrounding the FLASH II at the time of its
sale, including a Boston Globe article reporting that the vessel
was seized from a convicted narcotics trafficker and that Lane
would likely appeal the default judgment. He also points to
Ettinger's original estimate of the vessel's value ($800,000 to
$1,000,000) and to certain communications between the government
and Guernsey's. But all of this is simply whistling past the
graveyard; whatever the persuasive force of these materials, they
do not compel the conclusion that the FLASH II had a fair market
value exceeding $100,000.
Despite the conflicting evidence, the district court had
a solid basis on which to conclude that the auction of the FLASH II
accurately captured its fair market value. The auction sale was
conducted in a commercially reasonable manner, and the district
court plausibly determined that the vessel sold for considerably
less than earlier estimates because there had been a general
decline in the price of Kennedy memorabilia. Id. No more was
exigible. See United States v. Mahone, 453 F.3d 68, 73-74 (1st
Cir. 2006) (upholding district court determination that item's
selling price at auction reflected its fair market value).
Lane also argues that we should find as a matter of law
that the FLASH II had a fair market value of at least $600,000.
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His reasoning is somewhat convoluted. He begins with the notion
that the government was obligated to obtain estimates from no fewer
than three disinterested appraisers and to establish a minimum
reserve price equal to at least two-thirds the average appraised
value before carrying out an auction sale. This notion derives
from Lane's reading of the Department of Justice publication, A
Guide to Interlocutory Sales and Expedited Settlement (2003)
(Guide), and his invocation of 28 U.S.C. §§ 2001(b) and 2004.
Lane's argument confuses plums with pomegranates. The
sale of property forfeited to the United States is governed by 21
U.S.C. § 881(e). That statute provides in pertinent part that the
Attorney General may "sell, by public sale or any other
commercially feasible means, any forfeited property which is not
required to be destroyed by law and which is not harmful to the
public." 21 U.S.C. § 881(e)(1)(B). The record makes manifest that
the 2005 auction constituted, at the very least, a commercially
reasonable means of selling the FLASH II.
Lane's attempt to shift the focus to the Guide is
unpersuasive. Because the government sold the vessel pursuant to
a judgment of forfeiture entered on July 15, 2005, the Guide is
inapposite.5 And in all events, Lane has failed to explain how or
5
Lane maintains that the government could not reasonably have
relied upon the validity of the judgment because it had provided
constitutionally inadequate notice of the forfeiture proceeding.
But the district court had denied Lane's motion for a stay, and
Lane had not appealed that denial. Particularly given that
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why the Department of Justice's internal guidelines regarding the
interlocutory sale of assets give rise to a private right of action
enforceable in the federal courts. See United States v. Henry, 482
F.3d 27, 33 (1st Cir. 2007) (holding that "Justice Department
guidelines were not compelled by statute, nor intended to create
private rights") (citation omitted).
Lane's endeavor to shift the statutory center of gravity
is equally unavailing. Assuming arguendo that the strictures of 28
U.S.C. §§ 2001(b) and 2004 apply at all to the sale of forfeited
assets — a matter on which we take no view — Lane has failed to
demonstrate that the government transgressed either of these
provisions.
The three-appraisal and reserve requirements of section
2001(b) apply to the judicial sale of personal property "unless the
court orders otherwise." 28 U.S.C. § 2004. In this case, the
district court "order[ed] otherwise"; its judgment directed the
Marshals Service "to arrange for the sale of the [FLASH II] in
accordance with United States Department of Justice policies
regarding the disposition of forfeited property."
circumstance, we think that the government was entitled to rely
upon the validity of the forfeiture judgment even though Lane had
filed an appeal. See, e.g., Acevedo-García v. Vera-Monroig, 368
F.3d 49, 58 (1st Cir. 2004) ("The federal rules contemplate that,
absent a stay, a victorious plaintiff may execute on the judgment
even while an appeal of that judgment is pending.").
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The relevant policies are embedded in the Department of
Justice's Asset Forfeiture Policy Manual (2005). That manual
provides in pertinent part that the Attorney General is empowered
"to dispose of [forfeited] property however he or she deems
suitable," id. at 86-87, because "forfeiture sales do not require
judicial confirmation pursuant to 28 U.S.C. § 2001," id. at 85. As
the district court ordered the Marshals Service to dispose of the
FLASH II in accordance with policies that expressly disavow
compliance with 28 U.S.C. § 2001, the three-appraisal and reserve
requirements were not triggered. See 28 U.S.C. § 2004.
To conclude, we hold without serious question that the
district court supportably found that the FLASH II had a fair
market value of $100,000. We therefore uphold the district court's
damages award.
B. Fees.
The district court declared Lane, as a prevailing party,
entitled to attorneys' fees under CAFRA's fee-shifting provision,
28 U.S.C. § 2465(b)(1). Lane asked for $293,591.42 in fees.
Deeming this request excessive, the court awarded $51,929.13.
Sloop III, 2008 WL 678519, at *2. Lane challenges the award as too
meagre.
When fee-shifting is in prospect, "district judges have
great discretion in deciding what claimed legal services should be
compensated." Brewster v. Dukakis, 3 F.3d 488, 492 (1st Cir.
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1993). Consequently, we generally review fee-shifting awards for
abuse of discretion. See Torres-Rivera v. O'Neill-Cancel, 524 F.3d
331, 335 (1st Cir. 2008). Lane suggests, without citation to any
persuasive authority, that CAFRA fee awards may warrant a different
standard of review. That argument lacks force. We have used abuse
of discretion as the standard of review for fee awards under fee-
shifting statutes that employ language similar to CAFRA's, see,
e.g., DeJesús v. Banco Popular, 951 F.2d 3, 5 (1st Cir. 1991)
(Truth-in-Lending Act), and we see no reason to employ a different
standard here.
"[A]n abuse of discretion occurs when a material factor
deserving significant weight is ignored, when an improper factor is
relied upon, or when all proper and no improper factors are
assessed, but the court makes a serious mistake in weighing them."
Coutin v. Young & Rubicam P.R., Inc., 124 F.3d 331, 336 (1st Cir.
1997) (citation and internal quotation marks omitted). Within this
rubric, "an error of law is always tantamount to an abuse of
discretion." Torres-Rivera, 524 F.3d at 336.
None of this is to say that appellate review is a mere
formality. Even though we respect a district court's superior
coign of vantage, see Gay Officers Action League v. Puerto Rico,
247 F.3d 288, 292 (1st Cir. 2001), we nonetheless take seriously
our responsibility to assure that a fee award falls within the
universe of acceptable outcomes.
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Our starting point is familiar. Where fee-shifting under
an open-ended statute is at issue, courts typically ascertain
reasonable attorneys' fees by means of the lodestar method.6
Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). That method
entails "multiplying the number of hours productively spent by a
reasonable hourly rate." Torres-Rivera, 524 F.3d at 336. In
determining the number of hours productively spent, the court
should "eliminate time that was unreasonably, unnecessarily, or
inefficiently devoted to the case" and may, under appropriate
circumstances, "disallow time spent in litigating failed claims."
Id. (citations omitted). Reasonable hourly rates will vary
depending on the nature of the work, the locality in which it is
performed, the qualifications of the lawyers, and other criteria.
See Gay Officers Action League, 247 F.3d at 295; see also United
States v. Metro. Dist. Comm'n, 847 F.2d 12, 19-20 (1st Cir. 1988).
Even after the basic lodestar is calculated, the court may adjust
it, up or down, to reflect other considerations, such as the
results obtained. Coutin, 124 F.3d at 337 & n.3.
In the case at bar, the district court wrote tersely. It
seems to have performed a modified lodestar analysis. The time
6
Lane's entitlement to fees arises under CAFRA. Because that
statute does not explicitly dictate a method for calculating fees,
the lodestar method constitutes the preferred approach. See United
States v. Metro. Dist. Comm'n, 847 F.2d 12, 15 (1st Cir. 1988). As
a necessary corollary, we are free to apply the vast body of
precedents that have sprung up under an array of similarly
configured federal fee-shifting statutes. See id.
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sheets that Lane submitted showed work done by two lawyers (Brenda
Grantland and Eric Goldberg) and a paralegal (Judy Osburn). The
court determined that the legal team's efforts were largely
unsuccessful; Lane was thwarted in most of the initiatives that he
undertook and recovered only a fraction of the damages that he
sought. Sloop III, 2008 WL 678519, at *1. Accordingly, the court
disallowed everything related to issues that Lane had litigated and
lost. Id.
The court proceeded to reduce by two-thirds the time
claimed by Grantland in relation to removal of the default
judgment.7 Id. It then eliminated all of Goldberg's time. See
id. The hours remaining after these excisions constituted the time
reasonably spent. See id.
Turning from the multiplicand to the multiplier, the
court concluded that Grantland's base hourly rate was what she
normally charged in her home community and reduced that rate to
account for "egregious overlitigation." Id. at *2. These and
other determinations, not contested on appeal, yielded the amount
of the award. In the pages that follow, we address Lane's
principal arguments about where the district court supposedly went
astray.
7
The court stated at one point that it also would disregard
two-thirds of the time relating to the forfeitability issue. But
in the end, this proved to be an empty threat; the court instead
adopted the government's recasting of those hours. See Sloop III,
2008 WL 678519, at *1 n.2.
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1. Limited Success. The extent of success achieved by
a prevailing party is "a crucial factor" in shaping a fee award.
Hensley, 461 U.S. at 440. In this context, the term "success" is
multi-dimensional. It refers among other things to an evaluation
of success "claim by claim" and to an appreciation of "the relief
actually achieved." Coutin, 124 F.3d at 338. If a prevailing
party has achieved only limited success, the trial court may reduce
the fee request to an amount that reasonably reflects that
circumstance. See Hensley, 461 U.S. at 440.
The method employed to calibrate the appropriate fee
reduction in a case of limited success depends on the nature of the
shortfall. When, for example, a fee adjustment is intended to
reflect the success or failure of claims that are themselves
separate and distinct, an inquiring court may simply exclude time
spent in litigating the unsuccessful claims. See Coutin, 124 F.3d
at 338; cf. Aubin v. Fudala, 821 F.2d 45, 47 (1st Cir. 1987)
(explaining that fees may be awarded for "interconnected" claims
despite failure on some of them). Even when a party prevails on a
particular claim, however, he is only entitled to recover fees for
time productively spent. Consequently, time invested in issues
that are litigated profligately, unnecessarily, or without benefit
to the prevailing party may be disallowed. See, e.g., Lipsett v.
Blanco, 975 F.2d 934, 937 (1st Cir. 1992); Grendel's Den, Inc. v.
Larkin, 749 F.2d 945, 952-55 (1st Cir. 1984); see also Hensley, 461
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U.S. at 436-37 (explaining that an adjustment designed to reflect
the scantiness of a prevailing party's recovery may take the form
of a global reduction).
Here, the district court's finding of limited success
hinged on two separate rationales. First, it determined that Lane
had prevailed on only one issue — forfeitability — and had failed
on others to which he had quixotically dedicated time and
resources. See Sloop III, 2008 WL 678519, at *1. Second, it
determined that Lane's ultimate recovery ($73,898.76) paled in
comparison to the remuneration that he had sought throughout. See
id.
We discern no abuse of discretion in the court's
conclusion that Lane had achieved only limited success. Lane
attempted to obtain discovery to which he was not entitled, served
a subpoena on Crosby that was quashed, and ineffectually contested
the applicability of sovereign immunity. Moreover, Lane raised and
devoted appreciable energy to a number of valuation theories that
proved to be blind alleys. Finally, Lane recovered much less than
the amount he had sought (indeed, he continues to maintain on
appeal, without any cogent basis, that as a matter of law the FLASH
II had a value of at least $600,000).
Faced with this stark reality, Lane tries a diversionary
tactic. He notes that the district court mentioned that his lowest
settlement demand was $300,000. See id. He now says that evidence
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of this demand was inadmissible. See Fed. R. Evid. 408(a)(1)
(prohibiting use of certain offers in compromise). But Lane did
not object below to the admission of this evidence. To the
contrary, he brought it up and referred repeatedly to it. This was
a waiver — and waived issues cannot be resurrected on appeal. See
United States v. Walker, 538 F.3d 21, 23 (1st Cir. 2008); United
States v. Rodríguez, 311 F.3d 435, 437 (1st Cir. 2002).
Lane also takes umbrage at the remedy chosen by the
district court to account for his limited success. His argument in
this regard rests on the premise that a district court may not deny
fees relating to subsidiary issues on which the prevailing party
lost so long as that party won on the overarching claim. Noting
that he prevailed on the only "claim" involved in this litigation
— forfeitability — Lane insists that he is entitled to fees for
litigating all the issues raised in the case. We disagree.
A court may reduce a prevailing party's requested fees
even if the party has succeeded on all or substantially all of his
claims. See Hensley, 461 U.S. at 440; Coutin, 124 F.3d at 339.
There is no rigid prescription that must be followed in effecting
such a reduction. The district court may either eliminate specific
hours or reduce the overall fee to account for the prevailing
party's limited success. Hensley, 461 U.S. at 436-37.
Here, the district court chose the former route. That
court was uniquely situated to determine whether Lane's lawyers
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wasted their time (and the court's) by unreasonably or
unnecessarily litigating issues that were hopeless, peripheral, or
otherwise extraneous. See Torres-Rivera, 524 F.3d at 336; Metro.
Dist. Comm'n, 847 F.2d at 18-19; Wojtkowski v. Cade, 725 F.2d 127,
130 (1st Cir. 1984). Because the district court plausibly could
have determined that efficient counsel would not have invested the
time that Lane's counsel claimed to have invested in litigating
marginal issues, the court acted within the wide encincture of its
discretion in refusing to include any part of that time in the fee
award.8 See, e.g., Pearson v. Fair, 980 F.2d 37, 47 (1st Cir.
1992); Grendel's Den, 749 F.2d at 952-55.
2. Grantland's Hourly Rate. In determining the
multiplier for a lodestar award — the applicable hourly rate — an
inquiring court should look to "the prevailing market rates in the
relevant community." Blum v. Stenson, 465 U.S. 886, 895 (1984).
When a party recruits counsel from outside the vicinage of the
forum court, that court may deem the "relevant community" to be the
community in which the lawyer maintains his or her principal
office. See Maceira v. Pagán, 698 F.2d 38, 40 (1st Cir. 1983). In
8
To be sure, in holding that Lane had achieved only limited
success, the lower court also referred to the disparity between
damages sought and damages awarded. See Sloop III, 2008 WL 678519,
at *1. While such a disparity is not a per se justification for a
fee reduction, see Coutin, 124 F.3d at 340, a trial court is
entitled to take it into account as part of the totality of the
circumstances, see Farrar v. Hobby, 506 U.S. 103, 114-15 (1992).
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that event, the court may look to the outside lawyer's actual
billing practices to determine the relevant rate. See id.
Here, Grantland filed an affidavit attesting that her
customary billing rate was $275 per hour, and that she had agreed
to charge Lane $250 per hour. Nevertheless, because she thought
that the prevailing market rate for civil rights attorneys in
Boston exceeded these levels, she asserted an entitlement to
compensation at $325 per hour.
The district court, citing Maceira and the fee agreement,
set Grantland's base rate at $250 per hour.9 See Sloop III, 2008
WL 678519, at *2. Lane objects, arguing that the Maceira rule
should apply only when the prevailing out-of-state rate exceeds the
prevailing local rate. We reject that curious construct.
In the fee-shifting context, a district court's primary
concern is with the market value of counsel's services. See In re
Cont'l III. Sec. Litig., 962 F.2d 566, 568 (7th Cir. 1992). Thus,
the rate that private counsel actually charges for her services,
while not conclusive, is a reliable indicium of market value. See,
e.g., Crescent Publ'g Group, Inc. v. Playboy Enters., Inc., 246
F.3d 142, 151 (2d Cir. 2001); People Who Care v. Rockford Bd. of
Educ., 90 F.3d 1307, 1310 (7th Cir. 1996); Scales v. J.C. Bradford
9
The court repeatedly referred to a base rate range of $250-
$275 per hour. For ease in exposition, we use the lesser of these
figures. Since this was only an intermediate calculation, that
choice does not in any way affect our rationale.
-24-
& Co., 925 F.2d 901, 909-10 (6th Cir. 1991); Spell v. McDaniel, 824
F.2d 1380, 1402 (4th Cir. 1987); Bebchick v. Wash. Metro. Area
Transit Comm'n, 805 F.2d 396, 404 (D.C. Cir. 1986). This
proposition in effect allows the court to use counsel's standard
rate, or the prevailing market rate in the forum, or a reasonable
rate in between. This court's Maceira decision accords with this
well-settled proposition.
It is true, of course, that Maceira involved an out-of-
state lawyer who customarily charged an hourly rate in excess of
the prevailing local rate. See 698 F.2d at 40. District court
cases in this circuit applying Maceira often feature the same
configuration. See, e.g., R.I. Med. Soc'y v. Whitehouse, 323 F.
Supp. 2d 283, 292 (D.R.I. 2004); Libertad v. Sánchez, 134 F. Supp.
2d 218, 234-35 (D.P.R. 2001); Guckenberger v. Boston Univ., 8 F.
Supp. 2d 91, 103-04 (D. Mass. 1998). But we perceive no reason why
the Maceira rule must act as a one-way rachet, entitling out-of-
state counsel to earn more than local attorneys but not less.
Here, moreover, the base rate favored by the district court — $250
per hour — is in keeping with the rates customarily charged by
civil rights practitioners in Boston during the relevant period.
See Cerqueira v. Am. Airlines, Inc., 484 F. Supp. 2d 241, 250 (D.
Mass. 2007) (collecting cases holding that "the prevailing rate for
lead civil rights attorneys in the Boston area ranges between $200
-25-
and $350 per hour"), vacated on other grounds, 520 F.3d 1 (1st Cir.
2008).
In a related vein, Lane strives to convince us that the
district court abused its discretion by considering the terms of
his idiosyncratic fee arrangement with Grantland. We are not
persuaded.
Although a prevailing party's fees are not necessarily
limited by a preexisting agreement between lawyer and client, such
an agreement is some evidence of the prevailing market rate for the
lawyer's services. See Blanchard v. Bergeron, 489 U.S. 87, 93
(1989); Pennsylvania v. Del. Valley Citizens' Council for Clean
Air, 483 U.S. 711, 723 (1987). And when, as in this case, the rate
agreed to between the prevailing party and his attorney is within
the universe of reasonable rates, a district court does not abuse
its discretion by taking the agreed rate into account in its fee-
determination calculus. See, e.g., Vernon v. Port Auth. of N.Y. &
N.J., 220 F. Supp. 2d 223, 230 (S.D.N.Y. 2002); Easter House v.
Ill. Dep't of Children & Family Servs., 663 F. Supp. 456, 459 (N.D.
Ill. 1987).
In sum, the district court did not abuse its discretion
in (i) relying on Grantland's customary billing practices; (ii)
taking into account the rate negotiated between Lane and Grantland
for purposes of this case; or (iii) fixing Grantland's base rate at
$250 per hour.
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There is another chapter to this story. The district
court next adjusted Grantland's rate downward to $175 per hour on
the basis of "egregious overlitigation." Sloop III, 2008 WL
678519, at *2. Lane claims that this reduction constituted an
abuse of discretion because the court did not simultaneously
recount particular instances of overlitigation.
It is always helpful for a nisi prius court to elaborate
upon its findings, and we encourage that practice. Still, no such
elaboration is essential if a reviewing court can without
difficulty discern the basis for the unexplained or poorly
explained finding from the record. See Torres-Rivera, 524 F.3d at
337. So it is here.
The district court, citing book and verse, found that
Lane had stubbornly persisted in litigating (and then losing) a
cavalcade of issues. Sloop III, 2008 WL 678519, at *1. This
persistent tilting at windmills provides several examples of
egregious overlitigation. In addition, the court adopted the
recasting contained in the government's opposition to Lane's fee
application. See id. at *1 n.2. By interpolation, these recasted
figures limn a great many excessive, duplicative, or otherwise
unnecessary hours.
The Supreme Court has warned that ancillary litigation
over fees should not be allowed to become the tail that wags the
dog. See City of Burlington v. Dague, 505 U.S. 557, 566 (1992)
-27-
(discussing need to avoid "burdensome satellite litigation" to
resolve fee applications). In that spirit, the trier's fee
determinations must be reasonably clear — but they need not be
precise to the point of pedantry. See Foley v. City of Lowell, 948
F.2d 10, 20 (1st Cir. 1991) (indicating that district court's
findings "need not be infinitely precise, deluged with details, or
even fully articulated") (citations, internal quotation marks, and
alterations omitted). Because the foundation for the district
court's finding of egregious overlitigation is easily discerned,
the court did not abuse its discretion by neglecting to provide a
further quarry of specific examples to support that finding.
In addition, Lane accuses the district court of "double
counting." His thesis runs along the line that by eliminating time
spent on losing issues and then by making a global reduction for
egregious overlitigation, he has been twice penalized for the same
conduct. But that thesis does not hold together: the district
court implied — and the record bears out — that Lane egregiously
overlitigated the issues on which he prevailed. For example, as we
describe below, see infra Part II(B)(5), Lane spent nearly twice
the amount of time that we deem reasonable litigating the default
issue. There was no double counting here.
This leaves the size of the downward adjustment. That
shrinkage — from $250 to $175 per hour — is significant but not
unprecedented. See, e.g., Maldonado v. Houstoun, 256 F.3d 181, 188
-28-
(3d Cir. 2001) (reducing fees by 50% on account of limited
success); Cooke v. Stefani Mgmt. Servs., Inc., 250 F.3d 564, 570
(7th Cir. 2001) (upholding 50% limited-success reduction); Harris
v. Marhoefer, 24 F.3d 16, 18-19 (9th Cir. 1994) (same); Zook v.
Brown, 865 F.2d 887, 895-96 (7th Cir. 1989) (upholding 75% limited-
success reduction); see also Miles v. Sampson, 675 F.2d 5, 9 (1st
Cir. 1982) (confirming that court may reduce fees on account of
unnecessary and duplicative work by decreasing hourly rate).10 We
descry no abuse of discretion here.
3. The Default Judgment. Although district courts
possess broad discretion to determine appropriate attorneys' fees,
they overstep that discretion when they rely on an improper factor.
See Coutin, 124 F.3d at 341. Here, the district court disallowed
two-thirds of the fees related to the vacation of the default
judgment due to Lane's perceived lack of diligence in seeking to
intervene in the forfeiture proceeding. Sloop III, 2008 WL 678519,
at *1. Disallowing fees on this basis is in tension with our pre-
remand holding that, regardless of Lane's knowledge of the seizure,
the government had an unflagging obligation to take reasonable
steps to identify the owners of the FLASH II and provide them with
10
While it is permissible to use a rate reduction as a method
of accounting for an extravagant commitment of time, we suggested
in Miles, 675 F.2d at 9, and today reaffirm, that this is not the
preferred methodology. Reducing hours is generally a more
effective antidote to cure excess time.
-29-
specific notice of the forfeiture proceeding itself. Sloop I, 458
F.3d at 25.
On remand, the district court found that the government
had failed to take reasonable steps to identify and locate Lane.
Sloop II, 517 F. Supp. 2d at 549. Accordingly, it granted Lane's
motion to vacate the default judgment of forfeiture. Id. This
finding leads to the inevitable conclusion that, had the government
complied with its constitutional obligation to provide adequate
notice, there would have been no need to litigate the propriety of
the default judgment. Thus, even though Lane might have come
forward to make a claim earlier, we see no compelling reason either
to lighten the government's constitutional burden or to ease the
consequences of its constitutional breach. Cf. United States v.
Harrigan, 557 F.2d 879, 884 (1st Cir. 1977) ("If this statutory
duty is to have any practical significance, we think it is
necessary to attach consequences to its violation which discourage
abuse and which protect against resulting injury.") (citation and
internal quotation marks omitted).
The government argues that a footnote in our earlier
opinion left open the possibility that Lane would bear the brunt of
his failure to act more expeditiously. See Sloop I, 458 F.3d at 25
n.10 (suggesting that Lane's failure to make the government aware
of his interest before the entry of default was "not necessarily
irrelevant to the final outcome of the Rule 60(b) motion," since
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that failure might inform equitable considerations pertinent to
Rule 60(b) relief). The government reads this footnote through
rose-colored glasses.
The footnote cannot be construed to suggest that Lane's
failure to come forward earlier could shift to him responsibility
for the litigation needed to test the propriety of the default
judgment. In other words, once the court below had determined that
Lane was entitled to relief despite his failure to make his
identity known sooner and had vacated the default, the conclusion
became inevitable that the government was to blame for the
litigation surrounding the default judgment. Under these
circumstances, it was an abuse of discretion for the court to
reduce the fee award based on Lane's procrastination. Cf. Coutin,
124 F.3d at 341-42 (explaining that a district court may not reduce
attorneys' fees "to assuage lingering doubts about the legal
viability of [a successful] claim").
4. Goldberg's Hours. The district court disallowed all
fees attributable to Lane's other lawyer, Eric Goldberg. Sloop
III, 2008 WL 678519, at *1. Goldberg's time seems to have focused
mainly on vacation of the default judgment. The records give us
little insight, however, into why Goldberg's time should be
considered productively spent. It is not clear that Goldberg
worked successfully on any issue not also fully addressed by
Grantland. Indeed, there is nothing to indicate that Lane may have
-31-
needed a second lawyer to handle a case on which Grantland spent so
many hours.
Lane does little to resolve this quandary. While he
mentions the disallowance of Goldberg's time on two occasions in
his opening brief, he fails to develop a meaningful rationale
either for why Goldberg's involvement was necessary or for why
jettisoning Goldberg's hours constituted error. As such, we
believe that Lane can fairly be said to have abandoned his
objection to the disallowance of Goldberg's fees. See United
States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).
At any rate, overstaffing is a familiar problem in cases
in which fee-shifting is in prospect. See, e.g., Pearson, 980 F.2d
at 47; Metro. Dist. Comm'n, 847 F.2d at 18-19; Grendel's Den, 749
F.2d at 953. Goldberg's work, taken at face value, appears to
mimic portions of Grantland's work; and there is absolutely nothing
in the record that suggests a legitimate need for a second
attorney. Thus, refusing to allow Lane to claim time for both
Goldberg and Grantland on apparently overlapping work appears to be
an appropriate exercise of the district court's discretion.
To sum up, although the district court was not explicit,
the record supports a reasonable inference that Goldberg's work
duplicated portions of Grantland's work. The government suggested
that Goldberg's time should be disregarded on that theory, and we
can assume that the district court bought into that suggestion.
-32-
See Sloop III, 2008 WL 678519, at *1 n.2 (adopting government's
calculation of hours reasonably expended). That was not an abuse
of discretion. Grendel's Den, 749 F.2d at 950 (indicating that
court should eliminate hours that are "duplicative, unproductive,
excessive, or otherwise unnecessary").
5. Reconciliation. To recapitulate, we have determined
that the court below erred in only one respect. Because this error
requires recalculation of the fee award, we ordinarily would remand
for that purpose. We have, however, eschewed a remand in some
cases in which the recalculation can be performed by this court.
See, e.g., Gay Officers Action League, 247 F.3d at 299; Lipsett,
975 F.2d at 943. In this instance, we elect to follow the latter
course.
The solitary error that taints the fee award concerns the
district court's across-the-board disallowance of two-thirds of the
time that Grantland claims to have spent in litigating the default
judgment. See supra Part II(B)(3). Grantland lists a total of
223.25 hours relating to that aspect of the litigation. The
district court cut this time to 74.42 hours — but it used an
impermissible factor to justify that reduction.
This does not mean, however, that Lane is automatically
entitled to restoration of the full 148.83 hours that the district
court cut. In an effort to isolate time productively spent, we
have examined Grantland's time sheets in light of the record. That
-33-
examination persuades us to adjust the time spent litigating the
propriety of the default judgment to 145 hours. We believe that
this is the maximum amount of time that a reasonably efficient
lawyer would have spent in litigating this issue.
This determination brings the total number of compensable
hours in the case to 307.2. Multiplying that number by the hourly
rate that the district court supportably assigned to Grantland, see
supra Part II(B)(2), we arrive at an overall fee award of $53,760,
exclusive of expenses. Lane is also entitled to recover the sum of
$7,117.50, which represents the district court's assessment of the
fair market value of the work performed by Grantland's paralegal
(Osburn).
The district court also reduced the expenses incurred in
connection with litigating the default judgment by two-thirds. We
restore that cut ($1,030.61) in full. Doing so brings Lane's
recoverable expenses to $4,434.74.
These computations yield a total of $65,312.24 in fees
and expenses. The fee award should be increased to this amount.
III. CONCLUSION
We need go no further. To the extent that Lane has made
other arguments, they are plainly meritless, insufficiently
developed, or both. We reject them out of hand.
For the reasons elucidated above, we affirm the judgment
awarding Lane $73,898.76 in damages; order modification of the
-34-
ancillary fee award to $65,312.24; and affirm that award as
modified. Interest shall accrue on these amounts as provided by 28
U.S.C. § 1961. No fees, expenses, or costs shall be taxed for
services rendered in connection with this appeal.
So Ordered.
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