New York Court Slashes Fees by 60% for Inefficiencies and Excessive, Vague, and Block-Billed Time Entries

Posted on December 19th, 2017 by Legal Fee Advisors

By Zachary Kalmbach.

A fee award in a December 2013 Southern District of New York case, Baez v. New York City Housing Authority, demonstrates several factors which can lead to a reduction to a fee award in fee-shifting cases.  Public housing tenants filed a class action suit against the New York City Housing Authority (NYCHA), claiming NYCHA failed to abate mold in their apartments. Plaintiffs were represented by the Natural Resources Defense Counsel (NRDC), the National Center for Law and Economic Justice (NCLEJ), as well as a private law firm. Rather than contest the allegations, NYCHA entered into a Consent Decree in April 2014, which Plaintiffs moved to enforce in April 2015. The Court granted the motion in part with the Plaintiffs subsequently seeking $1,040,045.19 in attorneys’ fees and costs for their work on the motion. The Court reduced the fees sought by 60% for several reasons, including block-billing, NYCHA’s status as a public benefit corporation, and the fact that attorneys billed for training, field work, work performed prior to filing the suit, and excessive meetings with co-counsel.

To begin, the Court reduced the proposed hourly rates for several reasons. First, Plaintiffs did not obtain all the relief they sought, with the Court holding that NYCHA’s “lack of diligence” in handling the matter “did not rise to the level of willful misconduct or bad faith” to impose contempt sanctions on the organization. Further, NYCHA is a public benefit corporation, and any sum awarded would derive from public funds. Finally, much of the time billed was for work that the Court did not view as warranting hourly rates near the higher end of the jurisdiction’s customary range. This work included training associates to inspect for mold, visiting tenants’ apartments, and statistical analysis of “inaccurate and incomplete” NYCHA reports.

The Court then analyzed the reasonableness of the hours billed.  First, the Court credited the private firm for reducing its hours by removing time for superfluous attendees at meetings, administrative tasks, summer law clerks, and for deleting most 0.1 hour charges. However, the Court found that NCLEJ and NRDC made no such efforts. The Court found that NCLEJ used “dubious practices,” including a plethora of 0.1 and 0.2 hour entries. Moreover, both NCLEJ and NRDC block-billed time.

Further, the Court agreed with NYCHA’s argument that the timeframe for which Plaintiffs’ counsel sought fees was over-expansive, finding that much of the hours could not be fairly characterized as “in connection with” the enforcement action. Although Plaintiffs needed to establish noncompliance with the decree before bringing the action, the court stated that “not all community outreach is compensable.” The Court also found that many hours billed for meetings with co-counsel was excessive and duplicative. For example, “nearly 200 hours of conferencing” was excessive and warranted reductions.

Finally, the Court found that Plaintiffs’ counsel should have used non-attorneys to make field visits and gather facts. Plaintiffs’ counsel billed for time associates spent inspecting apartments and the time associates were trained to do so. This work “did not need to be performed by associates from an elite law firm who had no previous training.” Also, the Court held that associates’ analysis of NYCHA reports was not legal work. These issues led to Court to conclude that “some reduction [was] appropriate.”

In light of the “inefficiencies, and excessive, vague, and block-billed entries,” the Court only awarded $418,557.69 in fees and costs. This case illustrates a number of improper billing practices, such as charging for training and meetings between co-counsel. The case also shows that a court may hesitate to award fees for work completed prior to filing a complaint, and demonstrates the importance of the source of a potential award in fee disputes. Attorneys should keep cases such as this in mind when determining billing practices and setting hourly rates.

Baez v. New York City Hous. Auth., No. 13CV8916, 2017 WL 1048089 (S.D.N.Y. Mar. 20, 2017)

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