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Sovereign Immunity Does Apply to Fees on Prospective Relief; Hourly Rate Awarded at Current Market Rate for Paralegals
Awarded at Current Market Rate for Paralegals
The U.S. Supreme Court, in an action where prospective relief was
granted, held that Eleventh Amendment immunity does not apply to the award
of attorney's fees for the hourly rate to employ paralegals, law clerks
and recent law graduates over the years of the litigation to obtain the
relief, and that a windfall" is not provided the attorney by making the
award based on current market rate rather than at historic rates. The
attorney thus can be compensated for the delay in payment.
This was a major school desegregation case in Kansas City,
Missouri, in which various desegregation remedies were granted against the
State of Missouri and other defendants. Since 1982, Kansas City lawyer
Arthur Benson and the NAACP Legal Defense and Educational Fund, Inc. (LDF)
pursued the case. Benson and his associates devoted to the case 10,875
attorney hours, as well as 8,108 hours of paralegal and law clerk time.
LDF devoted 10,845 attorney hours and 15,517 hours for paralegals and law
clerks. The District Court awarded Benson approximately $1.7 million and
LDF $2.3 million in attorney's fees against Missouri. The state appealed
and the Eighth Circuit Court of Appeals affirmed.
The District Court's award was based on current market fees, and
it awarded Benson $200 per hour based upon his expertise in the area of
civil rights," when the normal market rate fell in the $125 to $175 per
hour range. The Court based the increased rate on three additional
factors: The preclusion of other employment, the undesirability of the
case, and the delay in payment for Benson's services. The Court applied
the same factors to LDF and the employees they hired by awarding current
hourly market rates of $35 for law clerks, $40 for paralegals and $50 for
recent law graduates.
Missouri contended it could not, consistent with Eleventh
Amendment immunity principles, be compelled to pay an attorney's fee
enhanced to compensate for delay in payment. The Court held that
sovereign immunity does not apply to an award of attorney's fees,
ancillary to a grant of prospective relief, against a state." Moreover,
an adjustment for delay in payment is & an appropriate factor in
determination of what constitutes a reasonable attorneys fee under [42
Missouri also challenged the award of fees for paralegals, law
clerks and recent law graduates at recent market value, arguing it created
a windfall" for the attorney that was not authorized under §1988. The
Court found that §1988's language provided for a reasonable attorney's
fees as part of the costs," and held §1988 cannot have been meant to
compensate only work performed personally by members of the bar." The
Court rejected the state's request to compensate paralegals at rates
above cost. It has become a part of the market to separately bill for
rates of paralegals at market rates, as it has for lawyers and their
associates. Thus, the Court affirmed the award in this case. [Ed. Note:
The PLRA has substantially altered the language of §1988 since this
decision]. See: Missouri v. Jenkins, 491 U.S. 274, 109 S.Ct. 2463, 105
L.Ed.2d 229 (1989).
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