[00:00:00] Speaker 03:
Case number 16-7035, Josephine McAllister at Elle Appellants versus District of Columbia.

[00:00:07] Speaker 03:
Mr. Tirka for the appellants, Mr. Love for the appellate.

[00:00:59] Speaker 00:
May I please the court?

[00:01:01] Speaker 02:
Go ahead.

[00:01:02] Speaker 00:
Good morning.

[00:01:02] Speaker 00:
I'm Douglas Tirca.

[00:01:03] Speaker 00:
I represent the plaintiff appellants who moved for fees in the court below.

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As this court is aware, the district court had the task of determining the market rate for this type of work for purposes of determining whether the requested rates were out of line with that rate.

[00:01:22] Speaker 00:
The district court aired in determining that rate in two major ways.

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The first is that the district court completely ignored the plaintiff's clear evidence of what the market rate for this work is.

[00:01:32] Speaker 02:
You mean the evidence that you attached to your reply brief?

[00:01:35] Speaker 00:
Yes, that evidence.

[00:01:37] Speaker 00:
Completely ignored that evidence.

[00:01:38] Speaker 02:
How can it be an abuse of discretion for the district court to disregard evidence attached to a reply brief when the local rules permit just that?

[00:01:50] Speaker 00:
Well, first of all, regarding the district's raising of that issue before this court, I'd say the district itself waived that defense when it failed to request leave or a surreply.

[00:02:01] Speaker 02:
Yeah, but the case you cite for that doesn't say that.

[00:02:04] Speaker 02:
The case you cite for that, it's a due process case, and all it says is that there was no due process violation in there because the petitioner, the plaintiff could have filed a surreply.

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I don't know of any rule of this court or the local rule which requires the defendant to file a surreply to raise a forfeiture issue.

[00:02:27] Speaker 02:
I mean, the rule itself says you can't raise things in the reply brief that are new.

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Well, I'll move on to the other reasons for it.

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The second reason is that the rule or the decisions of this court referred to arguments and issues raised for the first time in a reply.

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And that is not what was raised.

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I'm talking about the local rule of the district court.

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The local rule of the district court.

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The district judge was just following the local rule.

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The local rule does not prohibit the introduction of evidence with a reply in support of an existing argument.

[00:02:59] Speaker 02:
But you have to make the point that it's an abuse of discretion, right?

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That's the standard.

[00:03:03] Speaker 00:
Yes.

[00:03:03] Speaker 02:
OK.

[00:03:05] Speaker 02:
So why was it an abuse of discretion?

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And this abuse of discretion regarded the unprincipled disregard of record evidence.

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So that evidence is perfectly allowed to introduce new evidence in support of existing arguments and issues in a reply, which is what we did.

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Secondarily, as the court is aware, the law either changed or was clarified in the intervening time.

[00:03:28] Speaker 02:
By Ely?

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By Ely.

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But this court had made clear years before Ely and Covington that you could prove

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established a reasonable list of rates through other kinds of evidence.

[00:03:41] Speaker 00:
What was clarified in Ely was that a, so coming into the motion for fees for the district court, and this is the fees for fees, the court, as we know, limited it to a five-page motion, I believe, and that motion referred to what had been raised earlier.

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I'm sorry?

[00:03:58] Speaker 00:
Yes, Ron?

[00:03:59] Speaker 02:
I'm sorry.

[00:03:59] Speaker 02:
Say that again.

[00:04:00] Speaker 00:
Sure.

[00:04:01] Speaker 00:
The district court limited the fees for fees motion to five pages.

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Therefore, uh, so the plaintiffs, uh, refer incorporated by reference their earlier arguments for the rates for the substantive idea litigation.

[00:04:15] Speaker 02:
No, my point is, is that the affidavits, the declarations that you say the district court abuses discretion by ignoring, you could have filed with your opening brief.

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Yes, but prior to Ely, this court had not indicated that the evidence submitted in the opening motion was insufficient.

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So the evidence in the motion incorporated by reference was two, there were two branches.

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One was reference to the laughing matrix.

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The other was an affidavit from counsel.

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the district moves for the fees for fees proceeding to be held, to be held in abeyance pending ELE.

[00:04:50] Speaker 00:
Excuse me, not pending ELE, pending an appeal in this case.

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As it happens, in that period, ELE comes down.

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ELE comes down and addresses exactly the type of evidence that had been submitted in this case and said, a Latin matrix alone cannot be used to apply here because you have to prove complexity.

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Secondarily, council's affidavit alone cannot establish the market.

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We're back in this case following Ely.

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The district files its opposition.

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And in an out reply, because of the Ely holding, we bolster our case with two more affidavits regarding the market.

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We said nothing more about the matrix.

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That part was not addressed any further.

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But we bolstered it with two more affidavits.

[00:05:34] Speaker 02:
But my only question was, under Covington, you could have submitted that evidence in your opening brief.

[00:05:39] Speaker 00:
We could have.

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But prior to Ely, there had been no statement from this court.

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What about Covington?

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No statement from this court that the council's affidavit alone was insufficient to establish the market.

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That's what Ely held for the first time.

[00:05:55] Speaker 04:
Did you have a separate problem that you submitted these exact same declarations in Reed versus D.C.

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and it was an abuse of discretion not to address them there, so why would it be here?

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I don't think the court said it wasn't an abuse of discretion not to address them, but the court did find the evidence.

[00:06:14] Speaker 04:
We found no abuse of discretion, and the court didn't address them.

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The court found insufficient evidence of something very specific.

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The court found insufficient evidence that the fees litigation was, I don't remember if the court said more complex, which is different than the substantive litigation.

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In this case, both parties and the court agreed that the rate for the fees litigation should be a different rate than the substantive fees.

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The fees for the substantive litigation.

[00:06:39] Speaker 02:
You don't have a problem with that.

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Is that right?

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The idea that the fees are different because the work is different?

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No, I argued for it.

[00:06:49] Speaker 02:
I thought before us you argued two things as far as I can tell.

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One, that the district court disregarded or refused to consider your two declarations, right?

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And number two, that the district court erred by relying on previous district court decisions establishing rates, right?

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Relying solely on those cases, yes.

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Those are your two arguments.

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Correct.

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You didn't argue that

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Well, having established that the rate for the underlying case was 75 percent of laughing rates, that that was automatically the rate for the fees on fee part, right?

[00:07:22] Speaker 00:
I did not make that argument.

[00:07:23] Speaker 00:
You're arguing for a rate higher than that.

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So coming into the fees- That's a problem.

[00:07:28] Speaker 02:
I didn't- You're arguing for a rate- So your argument is that the fees on fee litigation is more complex than the underlying merits case?

[00:07:37] Speaker 00:
No, and I think that's an interesting part of the decision.

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The decision talks only about complexity.

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The complexity question is only relevant to a matrix question.

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As the court knows from Reed and Judge Tatel in particular in your concurrence in Reed, that discussion of complexity has everything to do with the word complex and Laffey and some cases following it.

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And Ely made that a major issue regarding the applicability of a matrix to the IDEA.

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Ely said you have to prove complexity.

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In our reply in the fees for fees motion in this case, we said nothing more about the matrix.

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So we made no attempt to meet that complexity burden in this case.

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Instead, we focused entirely on what the actual market rate is, which is independent of the complexity question.

[00:08:19] Speaker 04:
Well, on the showing that you made about the rate,

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If you didn't disregard what you said, we'd like more, 640.

[00:08:28] Speaker 04:
We realize you denied that for the underlying litigation.

[00:08:31] Speaker 04:
We'll rely on the court's judgment of whether any rate beyond what the court awarded is reasonable.

[00:08:38] Speaker 04:
And then,

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you submitted an attorney declaration and then two declarations that don't mention a rate.

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So I'm having trouble understanding what you even did to show a rate, other than saying we'd like 640, we recognize that's a problem, we'll rely on your judgment, and then neither of your declarations mentions a rate, unless I'm misreading them.

[00:08:58] Speaker 00:
If I may, Your Honor, so if we look at the declarations, these are on 121 through 124 of the appendix.

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And the first one on 121.

[00:09:12] Speaker 04:
Talks about total bills and hourly rate, but doesn't tell me what the rate is.

[00:09:16] Speaker 00:
Oh, well, that rate had already been presented to the court.

[00:09:18] Speaker 04:
How do we know that's what the rate the declaration is talking about?

[00:09:21] Speaker 00:
Because they refer to standard rates, and they also refer to, excuse me.

[00:09:30] Speaker 00:
So in paragraph five on 121, this is the first affidavit.

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The other firm available charges rates comparable to those charged by Tyrkin Associates.

[00:09:38] Speaker 03:
How do we know what that is?

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That is in the original affidavit, which is... Okay.

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We're supposed to trust that they were looking at that and using that number, but it's not in their declaration.

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Well, Mrs. Hahn also refers on 123, paragraph 3.

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I have retained Tyrkin Associates at the firm's customary rates.

[00:10:01] Speaker 03:
But we are told again in the declaration, she's not attesting to what that rate is.

[00:10:06] Speaker 00:
Well, those customary rates were already established on 138 now with the appendix.

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There's, again, an unchallenged affidavit that those are what the customary rates are.

[00:10:18] Speaker 02:
But the only, let me go back to your arguments here.

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You just agreed with me that the two arguments you make here are first that the district court

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error by not considering your two declarations and second, that the district court relied on district court decisions in other cases, correct?

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Solely.

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Solely on those, yes.

[00:10:37] Speaker 02:
Yeah.

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And so if I think, if I don't agree with you on the first point, because I think the district court had discretion to do that, and if I think Covington

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that district courts can rely on other district court decisions when those decisions themselves have evidence of prevailing rate.

[00:11:01] Speaker 02:
Do you lose?

[00:11:05] Speaker 00:
If this court's interpretation of Covington is that it allows the district court to do what it did in this case,

[00:11:13] Speaker 02:
But the district court just relied on other district court decisions, which themselves had evidence of market rates, namely the Laffey matrix, right?

[00:11:21] Speaker 00:
Respectfully, the second part of that statement is not true.

[00:11:23] Speaker 02:
It isn't?

[00:11:24] Speaker 00:
No.

[00:11:25] Speaker 00:
If we go to those decisions, so they start with Smith.

[00:11:32] Speaker 00:
Oddly, in Smith, despite the fact that it is cited in later cases, in Smith itself, the rates are not determined from any matrix, as far as I can tell.

[00:11:39] Speaker 00:
What I see in Smith, and this is... What about the other three cases?

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So the other three cases just trace back to Smith.

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So we have Wright, which cites only Smith.

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Then we have Garbin, which cites only Wright.

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And then we have means, which cites an RNR, which cites only Garvin, Wright, and Smith.

[00:11:58] Speaker 02:
So your approach, you bring a lot of these cases, so this is sort of a generic question.

[00:12:08] Speaker 02:
Your theory is that you're not worried about ELE and the whole complexity issue because you think you can get the higher rates based on showing that there's actually a higher market rate.

[00:12:22] Speaker 02:
That's your strategy, right?

[00:12:23] Speaker 00:
In this case, for fees on fees, the argument has nothing to do with the matrix, therefore nothing to do with the complexity part of ELE.

[00:12:30] Speaker 02:
It does just a question of what do other lawyers handling this kind of case get?

[00:12:36] Speaker 00:
Yes.

[00:12:36] Speaker 00:
It is limited by ELE to the degree, again, that ELE said you can't have counsel's affidavit alone.

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That was a new part of ELE.

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So you do have to bolster with more than counsel's affidavit as we have.

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But yes, this has nothing to do with the matrix anymore.

[00:12:48] Speaker 00:
It was, at the time of the motion, pre-ELE, that was one of the two arguments.

[00:12:52] Speaker 00:
I see.

[00:12:53] Speaker 02:
Okay.

[00:12:54] Speaker 02:
Anything else?

[00:12:57] Speaker 02:
No?

[00:12:57] Speaker 02:
Okay.

[00:12:58] Speaker 02:
Thank you.

[00:13:09] Speaker 01:
Good morning, and may it please the Court Richard Love for the District of Columbia.

[00:13:13] Speaker 01:
I think counsel has just admitted, first of all, that there was a new argument raised in the reply brief.

[00:13:19] Speaker 01:
In the reply brief, he makes an argument based on evidence of the market for idea fee litigation, but his prior argument was based solely on his billing rate and that it matched those in the laughing matrix.

[00:13:31] Speaker 01:
So there is a new argument here, and the Court wasn't required

[00:13:35] Speaker 01:
to consider these statements.

[00:13:37] Speaker 04:
We're curious why you didn't move to strike in the district court.

[00:13:41] Speaker 01:
I don't think we have any requirement to strike the affidavits, and that's the best I can answer.

[00:13:50] Speaker 01:
I didn't handle the case.

[00:13:51] Speaker 04:
We just don't have any evidence the district court exercises discretion not to look at the declaration.

[00:13:55] Speaker 04:
We just don't know one way or the other because no one raised the issue at the district court.

[00:13:59] Speaker 01:
Correct.

[00:14:00] Speaker 01:
We have no evidence one way or the other.

[00:14:02] Speaker 01:
The second, if I could address the intervening change of the law, Ely was not an intervening change in the law.

[00:14:08] Speaker 01:
It merely applied law.

[00:14:10] Speaker 01:
It applied Blum, which required attorneys to supply this kind of information in addition to their own affidavit.

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And that was a 1984 case, and then Covington as well.

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reiterated that requirement and that's a 1995 case.

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So Ely didn't apply new law and wasn't an intervening change in the law.

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And moreover, I don't think that the statements for the reasons we've articulated in our brief provide any material evidence of what the prevailing market rate for fee litigation is in idea cases.

[00:14:49] Speaker 01:
It doesn't indicate what the precise fee

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that was received in those two cases that the affidavit's reference was, let alone establish what attorneys receive on average from fee-paying clients in IDFP litigation.

[00:15:06] Speaker 02:
So I think... But don't the affidavits just say these are the fees we receive?

[00:15:10] Speaker 02:
The fees they're seeking are the fees we receive.

[00:15:13] Speaker 01:
No, it simply says that they retained the Turca firm at its customary rates, and it doesn't indicate what was paid at all.

[00:15:24] Speaker 01:
I don't know what the retainer agreement says, even if you accept that their customary rate actually refers back to some affidavit that Mr. Turca filed two years earlier.

[00:15:37] Speaker 01:
So it doesn't indicate that, and it doesn't indicate clearly, you know, what, well, is that an aberrant rate, even if it did indicate it was actually paid, whether that's the average rate that attorneys receive for this type of litigation.

[00:15:53] Speaker 04:
What is your answer to their argument about the lack of evidence in the district court cases that this district court relied on?

[00:16:01] Speaker 01:
Well, I disagree.

[00:16:03] Speaker 01:
I mean, when he refers back to Garvin, which relates back to Smith, they're talking about fees on fees decisions that reduced

[00:16:19] Speaker 01:
are made some downward reduction because of the lack of complexity or the simplicity of the fee litigation.

[00:16:27] Speaker 01:
But the underlying decision was based on laughing market rates in Garvin and in Means, in all three of those cases.

[00:16:39] Speaker 04:
In Means they say it wasn't disputed what the rate was.

[00:16:41] Speaker 04:
There just wasn't a contest about it.

[00:16:44] Speaker 04:
So there wasn't an evidentiary determination.

[00:16:49] Speaker 01:
Yes, but the underlying decision which applied the rate for the substantive work was based on the Laffey matrix, and it was based on decisions that applied the Laffey matrix.

[00:17:02] Speaker 01:
All three cases were, and then they made a downward reduction from that rate to account for the simplicity of the fee litigation.

[00:17:12] Speaker 01:
So, I mean, the root

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of the decisions was based on Laffey rates.

[00:17:20] Speaker 01:
They decided in all three of those cases, means Garvin and Wright.

[00:17:28] Speaker 01:
The substantive rate, the rate for the substantive ideal litigation was based on some percentage of the Laffey matrix.

[00:17:39] Speaker 01:
In one of them, it was 100%.

[00:17:41] Speaker 01:
The other two were 75%.

[00:17:43] Speaker 01:
And then all three made a reduction from whatever rate they had applied for the substantive work to account for the simplicity of the fee litigation.

[00:17:53] Speaker 01:
And that's how it got reduced to 50%.

[00:17:56] Speaker 04:
Do you need evidence for that second reduction?

[00:17:58] Speaker 04:
I think that's their point.

[00:18:00] Speaker 04:
There's no evidence.

[00:18:02] Speaker 04:
They just said, well, this was simple.

[00:18:05] Speaker 04:
And then it happened.

[00:18:08] Speaker 01:
I think the evidence was that the district court, particularly in the absence of the plaintiffs establishing the reasonableness of the rate that they requested, had to make a decision as to what the reasonable rate was.

[00:18:23] Speaker 01:
And based on the difference in the complexity of the work between the substantive litigation and the fee litigation, the district court reasonably assigned some different valuation in that rate.

[00:18:37] Speaker 01:
Here, it was only 25%.

[00:18:39] Speaker 01:
In one of those four cases, it was actually a 50% reduction from 100% to 50%.

[00:18:45] Speaker 01:
I think it was reasonable for the district court to assign a lower value, but it wasn't based on a vacuum.

[00:18:52] Speaker 01:
It was based basically on a reduction from Laffey, which, back in the 80s, was based on a market survey and then has been increased pursuant to different methods.

[00:19:03] Speaker 04:
And it was the same district court judge at both stages?

[00:19:07] Speaker 04:
here or not?

[00:19:09] Speaker 04:
Did Judge Contreras handle the merits?

[00:19:11] Speaker 04:
You mean in the four cases?

[00:19:13] Speaker 04:
No, no, I'm saying just in your case, in the two stages of the McAlester case, same one.

[00:19:18] Speaker 01:
Yes, it's the same judge.

[00:19:19] Speaker 04:
So how does that factor into our?

[00:19:22] Speaker 01:
Well, I think that the fact is that the same district judge who made a decision based on market evidence and other fee decisions of the value of the substantive work

[00:19:34] Speaker 01:
the same judge who then knew what the particulars of the fee litigation were and made a factual finding as to its simplicity.

[00:19:43] Speaker 01:
was in a position to know whether or not that work merited the same rate or some reduction for some reason that I think is acceptable and complexity is an acceptable reason and reasonably applied a 25% reduction to account for that.

[00:20:01] Speaker 01:
So I think it bolsters the reasonableness of the district court's decision here because the district court evaluated both the substantive and the fee litigation.

[00:20:14] Speaker 01:
If nothing further, I'd ask the court to affirm the court's decision.

[00:20:19] Speaker 02:
Thank you.

[00:20:19] Speaker 02:
Did Mr. Turk have any time left?

[00:20:22] Speaker 02:
You can take one minute.

[00:20:23] Speaker 00:
Thank you, Your Honor.

[00:20:29] Speaker 00:
The prior cases did not use the matrix.

[00:20:32] Speaker 00:
As noted by Judge Williams, they used a percentage of the matrix.

[00:20:35] Speaker 00:
And we heard counsel repeatedly say... But they did begin with the matrix.

[00:20:38] Speaker 00:
They did begin with the matrix, which, of course, was then invalidated later on by Ely.

[00:20:43] Speaker 00:
But we just heard counsel say repeatedly that what the court did was reasonable here and reasonable there.

[00:20:49] Speaker 00:
It is not as broad a standard as reasonable.

[00:20:51] Speaker 00:
It has to be based on market evidence.

[00:20:53] Speaker 00:
And as Judge Williams, I think, was noting, whether or not the original rates for the substantive litigation in those cases was based on market evidence, and in fact, it was not,

[00:21:04] Speaker 00:
whether or not it was, the reduction to 50% was entirely arbitrary based on nothing.

[00:21:10] Speaker 00:
The district has not pointed to a single piece of evidence of the market.

[00:21:15] Speaker 00:
Getting back to another question of Judge Williams, when I was up here before, I didn't fully finish it.

[00:21:22] Speaker 00:
Another question from Judge Millett.

[00:21:28] Speaker 00:
When I was here before, if REIT is to be applied in this case, then what we would be left with is something that neither side has argued for, but would be the applicability of the same rate to both phases of the litigation.

[00:21:41] Speaker 00:
So, neither was asked for that, but that's where we would be, a rate that would be in between what we have requested and what the districts sought.

[00:21:49] Speaker 00:
Finally, regarding the impact of Ely, Ely did make it impossible for IDEA field litigants to rely entirely on the Laffey matrix.

[00:21:59] Speaker 00:
That was a substantial change that certainly had never been said before.

[00:22:02] Speaker 00:
And that is exactly what caused us to have to bolster our case in our reply, again, with just additional facts.

[00:22:09] Speaker 02:
But couldn't you always have relied on the rates that other lawyers handling similar cases charge?

[00:22:16] Speaker 00:
We could have done that.

[00:22:17] Speaker 00:
We could have generated an entire survey.

[00:22:19] Speaker 00:
There's much we could have done.

[00:22:20] Speaker 02:
That's what Covington said.

[00:22:23] Speaker 02:
Covington allowed that.

[00:22:24] Speaker 00:
But we made a case that was, prior to Ely,

[00:22:28] Speaker 00:
believed to be sufficient that had been used by other district court judges before, in fact, in Ely itself.

[00:22:34] Speaker 00:
And so when this court came down in Ely and said, no, that case is no longer sufficient, it had to be bolstered.

[00:22:41] Speaker 00:
But it was in support of the same arguments that these were the prevailing market rates, an argument we had always made.

[00:22:46] Speaker 00:
OK.

[00:22:46] Speaker 00:
All right.

[00:22:46] Speaker 02:
Thank you.

[00:22:47] Speaker 02:
Case submitted.

[00:22:47] Speaker 02:
Thank you.