Court's Failure To Explain Fee Award Reduction Is An Abuse of Discretion
SOTTORIVA v. CLAPS (August 17, 2010)
Joseph Sottoriva was a State of Illinois employee and a member of the United States Army Reserve. He was on leave from the State for approximately 17 months in 2003 and 2004. The State's policy was to retain reservists on the payroll and continue to compensate them at their regular rate of pay, minus their military income. The State consistently overcompensated Sottoriva, despite its best efforts to calculate the proper amounts. Shortly before Sottoriva's return, the State calculated that he owed approximately $18,000 in excess compensation. He filed a union grievance, which the union (apparently without his consent) resolved with the State by agreeing to repay the $18,000 under a payment plan. While still negotiating the payment plan, the State recalculated the excess compensation as $24,000. Sottoriva was given several repayment options. When he selected none of them, the State notified him that it would begin involuntary withholding. Sottoriva brought a three count complaint against the department's director and the State Comptroller: a) Count I sought to enjoin any wage reduction, alleging due process violations with respect both to the original union grievance procedure and the State's failure to conduct any hearing with respect to the recalculation, b) Count II sought monetary damages for Sottoriva’s tax losses, and c) Count III sought to remove the director from office for an alleged violation of the State Finance Act. On Count I, Judge Scott (C.D. Ill.) granted summary judgment to the defendants with respect to the $18,000 calculation but granted summary judgment to Sottoriva on any amount above the $18,000 figure, concluding that the State had not provided a meaningful hearing. Sottoriva withdrew Count II. The court held that Count III was barred by the Eleventh Amendment. Sottoriva sought an award of attorney's fees. The court carefully calculated a "lodestar" figure and reduced it by 67%. Sottoriva appeals.
In their opinion, Judges Ripple, Kanne, and Sykes vacated and remanded. The Court noted that § 1988(b) allows the district court, in its discretion, to award attorney's fees to a prevailing party. Although the Court grants great latitude in setting a fee award, a district court must justify its award. The Court applied a two-part test to the district court's reduction of the "lodestar." The first question was whether a downward reduction was appropriate. The second question was whether the amount of the reduction was reasonable. Here, the Court answered the first question affirmatively. Although Sottoriva prevailed on one portion of his due process claim, he also failed on a significant part of his request for relief. With respect to the amount of the reduction, however, the Court vacated. Although it expressed no opinion on the reasonableness of the 67% reduction, it concluded that the district court did not sufficiently explain its rationale for imposing that reduction. In particular, the Court was concerned that the lower court was engaged in unacceptable "claim counting" and simply awarded one third of the fees incurred because Sottoriva prevailed on one of the three counts asserted. The lack of explanation amounted to an abuse of discretion.
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