48:0931(100)AR - - Treasury, IRS, Washington, DC and NTEU - - 1993 FLRAdec AR - - v48 p931



[ v48 p931 ]
48:0931(100)AR
The decision of the Authority follows:


48 FLRA No. 100

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

_____

U.S. DEPARTMENT OF THE TREASURY

INTERNAL REVENUE SERVICE

WASHINGTON, D.C.

(Agency)

and

NATIONAL TREASURY EMPLOYEES UNION

(Union)

0-AR-2447

_____

DECISION

November 24, 1993

_____

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This matter is before the Authority on exceptions to an award of Arbitrator Jerome H. Ross filed by the Agency under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Rules and Regulations. The Union filed an opposition to the Agency's exceptions.

The Arbitrator issued an award of attorney fees in connection with his previous awards finding that certain Agency employees were entitled to backpay and liquidated damages because they were improperly excluded from coverage under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. The Agency contends in its exceptions that the award is deficient because the Arbitrator used an unreasonable hourly rate in computing attorney fees. For the following reasons, we will deny the Agency's exceptions.

II. Background and Arbitrator's Award

In U.S. Department of the Treasury, Internal Revenue Service, Washington, D.C. and National Treasury Employees Union, 46 FLRA 1063 (1992), the Authority denied the Agency's exceptions to the Arbitrator's award sustaining a grievance filed by the Union on behalf of Revenue Officers paid at rates higher than GS-10, Step 1 who had been declared exempt by the Agency from coverage under the FLSA for purposes of overtime pay. The Arbitrator found that the primary duties of Revenue Officers did not qualify those employees as bona fide administrative employees exempt from FLSA coverage under section 213(a) of the FLSA and regulations of the Office of Personnel Management (OPM). The Arbitrator issued a supplemental award in which he ordered the Agency to pay the affected employees backpay for lost overtime wages plus an equal amount as liquidated damages.

Subsequently, the Union filed a petition for attorney fees with the Arbitrator. The Agency contended before the Arbitrator that the Union's petition for attorney fees was untimely filed with the Arbitrator. Further, the Agency contended that if attorney fees were awarded, such fees must be computed on a "cost-plus" basis rather than the market rate requested by the Union. Award at 3. The Agency also contended that the Union failed to substantiate the total amount of hours claimed and that the Union claimed an excessive amount of reimbursement for photocopying expenses.

The Arbitrator ruled that the Union's petition for attorney fees was timely filed. Turning to the merits of the petition for attorney fees, the Arbitrator found that computation of attorney fees on a market rate rather than cost-plus basis was in accordance with standards adopted by Federal courts and the Authority and he ruled that he would apply market rates in this case.

The Agency argued before the Arbitrator that the amount requested by the Union was unreasonable because of "the Union's use of the 'Laffey Matrix' to establish the market rate for attorneys practicing in the District of Columbia." Id. (*) The Arbitrator rejected that argument and held that "the Agency [had] not submitted any evidence to rebut the Union's claim that use of the Laffey Matrix and its updated versions [was] appropriate." Id.

The Agency also argued before the Arbitrator that the Union had charged fees at a lower hourly rate in other cases than it was requesting in this case. The Arbitrator rejected that argument and stated that "the Agency's reliance upon affidavits submitted by the Union's Controller in connection with attorney fee requests in prior cases, which reflect the fee schedule for attorneys used by the Union, is not evidence which rebuts the Union's claim in this case." Id. The Arbitrator stated, with regard to the appropriate fee rate, that "based upon the evidence in this record, I find that the best evidence of the market rate in the Washington, D.C. area is the Laffey Matrix." Id.

The Arbitrator made adjustments to the hours and rates claimed for individual attorneys and the amount claimed for photocopying expenses. He concluded that "[a]fter reviewing the remainder of the Union's Petition not addressed hereinabove, I find that the number of claimed hours was reasonably expended and the claimed hourly rates for those hours are reasonable." Id. at 5.

III. Positions of the Parties

A. The Agency

The Agency excepts to that portion of the Arbitrator's award in which he found that the Agency failed to produce evidence rebutting the Union's claim that the Laffey Matrix should be used to determine appropriate hourly rates in this case and to the Arbitrator's finding that the Laffey Matrix best reflects the market rate for attorneys in the Washington, D.C. area. The Agency contends that the Arbitrator failed to provide a fully articulated, reasoned decision as required under Authority precedent and that the award "provides for an unreasonably high hourly rate, [and] produces a windfall to [the Union], therefore violating law, rule, or regulation." Memorandum in Support of Exceptions at 1.

The Agency contends that the Arbitrator improperly relied on the Laffey Matrix and disregarded Agency evidence showing that the Union historically had claimed and received attorney fees at a lower hourly rate than provided by the Laffey Matrix. The Agency notes that the Union had claimed attorney fees at a lower rate in another case and maintained that that rate represented the Union's historical rate. The Agency contends that the Union's declaration as to fees in the other case, "rather than a matrix unrelated to the administrative process, is the appropriate basis for determining a legally reasonable market rate for [the Union's] services in this arbitration." Id. at 4.

B. The Union

The Union contends that the Agency's exceptions fail to establish that the award is deficient. The Union maintains that the evidence based on affidavits by Union attorneys and the Laffey Matrix which it provided was sufficient to show "'that the prevailing requested rates are in line with those in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.'" Opposition at 1 (quoting United States Department of Justice, Bureau of Prisons, Washington, D.C. and Bureau of Prisons Federal Correctional Institution, Ray Brook, New York, 46 FLRA 1002, 1009 (1992) (Bureau of Prisons)).

The Union cites various cases in which Federal courts have approved the use of the Laffey Matrix in determining prevailing market rates for attorneys in the District of Columbia. See Trout v. Ball, 705 F. Supp. 705, 709 n.10 (D.D.C. 1989) (Trout); Fischbach v. District of Columbia, No. 87-0646 (D.D.C. Jan. 3, 1993) (mem.) (Fischbach); Robles v. United States, No. 84-3635 (D.D.C. Jan. 10, 1992) (mem.) (Robles); Ellison v. United States, No. 663-88C (Cl.Ct. Nov. 13, 1992) (order) (Ellison). The Union also notes that the Equal Employment Opportunity Commission (EEOC) approved use of the Laffey Matrix in determining attorney fees in Hatfield v. Garrett, 90 FEOR 1046 (EEOC 1989). The Union points out that the original Laffey Matrix was for the period June 1, 1988, through May 31, 1989, and that the court in Robles "approved updating the matrix in $5 and $10 annual increments, depending on the experience level of the attorney." Opposition at 2 n.2 (citing Robles at 16 nn.7 & 8). The Union contends that the Arbitrator properly considered evidence relating to the prevailing market rates for attorneys and made "a finding of fact, based upon his analysis of the unrebutted record before him." Id. at 4. The Union asserts that the Agency's exceptions merely disagree with the Arbitrator's factual findings and provide no basis for finding the award deficient.

IV. Analysis and Conclusions

Initially, we note that the Agency does not dispute that the grievants in the underlying case were affected by an unjustified or unwarranted personnel action, that the award of attorney fees was in conjunction with an award of backpay, that the grievants were the prevailing parties, or that the award of attorney fees satisfies the interest of justice standard set forth in 5 U.S.C. § 7701(g)(1). Accordingly, we conclude that those requirements have been satisfied and we will not address them further. See U.S. Department of Defense, Defense Mapping Agency, Hydrographic/Topographic Center, Washington, D.C. and American Federation of Government Employees, Local 3407, 47 FLRA 1187, 1192 (1993) (Defense Mapping Agency).

The Agency asserts that the award is deficient because the amount of fees awarded is not reasonable and is based on an improper standard for determining the hourly rate of the Union's attorneys. We find that the Arbitrator's award of attorney fees is not deficient and we will deny the Agency's exceptions.

The Authority previously has described the requirements that are necessary for determining the reasonableness of attorney fee awards under the Back Pay Act, 5 U.S.C. § 5596. See, for example, Department of the Air Force Headquarters, 832D Combat Support Group DPCE, Luke Air Force Base, Arizona, 32 FLRA 1084, 1099-1101 (1988) (Luke AFB) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (Hensley)). Generally speaking, fee requests must be closely examined to ensure that the number of hours expended were reasonable. See U.S. Customs Service, 46 FLRA 1080, 1092 (1992) (Customs). The hours expended multiplied by the rate establish "'an objective basis on which to make an initial estimate of the value of a lawyer's services.'" Luke AFB, 32 FLRA at 1100 (quoting Hensley, 461 U.S. at 433).

Further, in determining the market rate, the Authority has held that "where an applicant for a fee award has a prior billing history, the reasonable hourly rate will be counsel's established billing rate." Id. at 1109. "'[T]he rates charged in private representations may afford relevant comparisons' in determining the market rate." Bureau of Prisons, 46 FLRA at 1008 (quoting Blum v. Stenson, 465 U.S. 886, 895-96 n.11 (1984) (Blum)). However, where the attorneys involved are also employees of a nonprofit organization, such as a union, which does not have a customary billing rate, it is necessary to consider evidence as to whether the rate requested is in line with the prevailing billing rate "'in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation.'" Id. at 1009 (quoting Blum, 465 U.S. at 895-96 n.11). See also Customs, 46 FLRA at 1096 ("in assessing the appropriate market-rate, it is no longer necessary to rely on an attorney's customary billing rate that is lower than the prevailing market-rate").

In this case, the Arbitrator properly found that the Union's attorneys were entitled to reimbursement at the prevailing market rate rather than on a cost-plus basis. See Bureau of Prisons, 46 FLRA at 1007. The Arbitrator reviewed the number of hours expended by the Union's attorneys and, with certain exceptions explained in his award, determined that the number of hours expended was reasonable. The Arbitrator then reviewed the information provided in the Union's petition for attorney fees and found that the Laffey Matrix constituted the best evidence of the market rate for attorneys in the Washington, D.C. area. We find nothing in the Arbitrator's findings in this regard that is contrary to any law, rule, or regulation. Contrary to the Agency's contentions, we find that the Arbitrator provided a fully articulated, reasoned decision concerning the reasonableness of the amount of attorney fees awarded. Further, we note that the Arbitrator considered and rejected the Agency's argument that the attorney fee rate requested by the Union in another case should be used in this case instead of the Laffey Matrix. The Agency's exceptions in this regard constitute mere disagreement with the Arbitrator's findings and evaluation of the evidence and provide no basis for finding the award deficient. See Defense Mapping Agency, 47 FLRA at 1194.

Although the Agency disagrees with the Arbitrator's findings in this regard, the Agency has failed to provide any information that demonstrates that the hourly rates set forth in the Laffey Matrix submitted by the Union do not reflect hourly rates that are consistent with those in the community for similar services of lawyers of comparable skill. We note that the Laffey Matrix has been approved and used by Federal courts and the EEOC in cases that are similar to this case. See Trout; Fischbach; Robles; and Ellison. In particular, in Trout, the United States District Court for the District of Columbia stated:

The attorney fee matrix approved in [Laffey] was embraced by the Court of Appeals for this Circuit in Save Our Cumberland Mountains v. Hodel, 857 F.2d 1516 (D.C. Cir. 1988) (en banc), and updated in connection with that case. Although the updated matrix was never expressly approved by the court because the parties settled the issue of fees, it does provide an accurate and updated schedule of attorney fees in this District.

705 F. Supp. at 709 n.10. In accordance with Trout, Fischbach, Robles, and Ellison, we find that the Agency has failed to establish that the Arbitrator's use of the Laffey Matrix in determining the prevailing market rate in the District of Columbia for attorney fees in cases under the Back Pay Act is contrary to law, rule, or regulation.

In summary, we find that the Arbitrator issued a fully articulated and reasoned attorney fee award that supported his conclusion as to the amount of attorney fees to which the Union was entitled, including specific findings demonstrating how the hourly rate and number of hours expended were determined. Although the Agency disagrees with the Arbitrator, the Agency has failed to demonstrate that the hourly rates applied by the Arbitrator are not consistent with those in the community for similar services of lawyers of comparable skill. Rather, the Agency is merely disagreeing with the Arbitrator's findings of fact and evaluation of the evidence as to the prevailing market rates for attorneys. Such disagreement provides no basis for f