In the genteel corridors of the United States Court of Appeals, the judges preserve their differences in their written opinions. If they really want to duke it out, they do it in the footnotes. Last week, in the third round of Copeland v. Marshall, fighting words were thrown in every direction from one corner of the court.
The issue in the Copeland contest was more than ripe for a fight: How much is a good lawyer worth when the taxpayer is footing the bill? The big punch was thrown last week by Circuit Judge Malcolm R. Wilkey, who is trying with all his might to convince his brethern that the time has come to adopt a new, tougher and cheaper formula for determining how to pay lawyers who have sued the government and won.
"Exactly why he's taken this one on with so much vengence is a mystery. And he has only one judge going with him," commented one lawyer, referring to Judge Edward A. Tamm, so far the lone member of the court to support Wilkey's idea.
"Off the wall" is what another lawyer called Wilkey's formula. "Novel" is how the majority of the court described the idea when they methodically disposed of it last week.
Wilkey however is clearly undeterred and rightly so. His notions, carefully spelled out in a biting dissent to last week's decision are at the least thought provoking. And his theory of treating the government somewhat differently than other defendants may not be so bad -- especially since the government is a sitting duck for litigation, paid for out of the U.S. Treasury's deep pocket. So before the judge is summarily dismissed, he deserves a hearing.
The Copeland case began seven years ago when Dolores Copeland, a computer specialist at the Labor Department, complained that she was a victim of sex discrimination. The law firm of Wilmer, Cutler & Pickering (now minus the Cutler) took her case to the federal court for free and won. Copeland got $6,169 in back pay and a promotion. In sum, 13 women at labor got a total of about $33,000 in back pay, and the department agreed to a new affirmative action program.
The victory, won under Title Vii [TEXT ILLEGIBLE] the civil Rights Act of 1964, meant the government had to pay the firm's fee. The question for both the trial and later the appeals court was how to calculate the bill.
Wilmer & Pickering asked Judge Gerhard A. Gesell for $206,000 for 3,602 hours work at $57.17 an hour. Gesell gave the $160,000, a cut of 22 per cent, and about $11,000 in costs.
The government protested to the appeals court that the firm had spent too much time on the case (especially considering the amount of money won), which it described as "litigious overkill" by "relatively junior attorneys."
What happened next, in October 1978, surprised the government and sent chills through the private law firms and the public interest groups that handle these type of cases.
The appeals panel -- Wilkey, Tamm and a senior judge from the trial court -- sent the case back to Gesell and, on their own , suggested that he use a new formula to calculate the fee award.
The traditional formula (used by Gesell) is to take the reasonable commercial market value of a lawyer's services -- the hourly rate charged to a regular customer -- multiplied by a reasonable number of hours worked on the case, to come up with what's called a "lodestar" or starting point for computation of the total fee award. From there, the judge can move the figure up or down based on a variety of factors, including the quality of lawyering and the risk involved in taking the case.
Wilkey proposed the following formula instead: a reasonable fee equals the actual cost to the firm (meaning the lawyers' salaries and overhead per person) plus a reasonable profit.
Wilkey's notion is to give the firms a baseline figure for what they are owed and then let the judge set any extras deserved via the "reasonable" profit award. He objects to the traditional formula because its base figure -- the hourly rate -- already includes factors like risks, lawyer quality, profit and overhead.
Wilkey concludes, therefore, that the majority's formula allows the trial judge to consider those factors twice, which he says amounts to duplication, excess fees and sheer gravy for the law firms.
Wilmer & Pickering, joined by the public interest bar, asked the three-judge panel to rehear the case. In June 1979, the panel said no and issued Copeland Ii instead, a clarification of the original idea.The same day, however, the full court granted a request from the private and public interest lawyers for a rehearing. g
Last week, the panel's idea was tossed out and the full court voted 6 to 2, with Wilkey and Tamm dissenting, to uphold Gesell's fee award.
The six-member majority, led by Judge Carl McGowan, produced a 57-page primer on how to calculate a "reasonable" fee, based on the market value of services rendered in a case, a mechanism that has been used in federal courts.
The cost-plus formula would require massive discovery into law firm business that might discourage those firms from taking cases if such prying had been done for a fee, McGowan said. The law firms, for example, had complained that they didn't keep figures to determine the overhead costs for each individual lawyer.
Anyway, McGowan said, the government's main complaint in the case was that the firm had spent too many hours on the case; Gesell had agreed and reduced the fee. Cost-plus (which the government endorsed) would do nothing to reduce the wasted hours that were complained of in the Copeland case, the majority said, noting the reputation of government cost-plus contracts for discouraging efficiency.
The majority opinion also put the government squarely on a par with other defendants in discrimination cases.
Copeland I and Copeland II "suggested that, where the government is the losing defendant, a fee award should be subject to greater scrutiny -- i.e., the fee should be lower -- than one against a private defendant," McGowan wrote. "We agree that a judge setting any award should scrutinize the amount with care. But we do not think that the amount of the fee should depend on the indentity of the losing party," he wrote.
Wilkey protests that what the case really involves is a "market" created by the government -- a market for government legal services -- where lawyers are paid to defend and to sue the government. After all, Wilkey said, the lawyers who take on cases like Dolores Copeland's are doing "government legal work." And "government legal work has never been expected to pay the same as the top private legal work," Wilkey said.
Wilkey summarized his attack on the formula approved by the majority of the court in Footnote 53, where he retold a joke about one of the few lawyers who ever reached the Pearly Gates, only to find that St. Peter had miscalculated his age by an extra 87 years. St. Peter discovered the mistake had been made because the Powers That Be in heaven had figured the lawyer's age by adding up his time sheets.
"It is time the courts put the calculation of attorney's fees on a basis which can be respected," Wilkey said, closing out the joke. That may be overstated criticism of the majority opinion, but it was in keeping with the harsh tone of Wilkey's lengthy opinion. Harsh words, however may be the only way to get a lawyer's attention when you dare to question how he makes money.