Court Dissects Fee Application in Discrimination Case - Law Firm Deutsch Atkins, P.C. Attorneys Hackensack, New Jersey

by Andrew M. Moskowitz, Esq. and Christopher J. Carcich, Esq

LAD case provides criteria for fee application, retaliation claim and tax' gross-up'

Joyce Quinlan alleged that she had been the victim of gender discrimination and retaliation in violation of New Jersey's Law Against Discrimination (LAD), NJ.S.A. 1.0:5-1 to -42. After a prior trial ended in a mistrial, the case was tried again between Jan. 17 and Feb. 13. On Feb. 8, the jury-found in Qumran's favor on her lost promotion and retaliation claims and returned a verdict of $4,565,479. On Feb. 13, the jury returned a punitive damages verdict in the identical amount.

In Quinlan v. Curtiss-Wright Corp., Docket No. L-8976-03 (Law Div. June 15, 2007) (available at www.judiciary.state.nj.us/decistons/quiplan-070615.pdf), the court addressed several issues of interest to practitioners. First, it discussed what constituted "protected" activity that would support a retaliation claim. The court also addressed the criteria for awarding an enhancement to a lodestar fee and endorsed the awarding of additional compensation to offset an award's negative tax consequences.

The Quinlan court also dissected plaintiff's fee application. Its analysis provides attorneys with several guide-posts for submitting an application for attorneys' fees. First, the court criticized Quinlan's attorneys for inadequately describing certain tasks, as well as the "lumping" together of several tasks under a single time entry. It also took issue with Quinlan's attorneys' failure to delineate attorneys' or paralegals' qualifications, compensation or billing rates. Finally, the court distinguished between paralegal services, which were compensate, and clerical tasks, which were not.

Initially hired in 1980 as a manager in Curtiss-Wright's human resources department, Joyce Quinlan received several promotions and, in 1999, ascended to the company's highest human resources position. However, in or about 2000, Curtiss-Wright created a new human resources position, which was filled by Kenneth Lewis, a man with little HR experience. At the beginning of 2003, Curtiss-Wright reorganized the human resources department, created a vice president position and promoted Mr. Lewis to this position. Quinlan alleged that Curtiss-Wright's management "did not, promote women to top executive positions and had created a 'glass ceiling' through which qualified women could not pass."

Beginning in the summer of 2003, Quinlan surreptitiously copied 1,830 pages of confidential files containing company employees' personnel files, Social Security numbers and confidential health information. The company learned in late March 2004 that Quinlan had copied and removed these materialso. Subsequently, in late April 2004, Quinlan received "in her human resource capacity" Lewis' performance appraisal. She provided a copy of this document to her attorneys and, on May 12, 2004, Quinlan's attorneys used this material in their deposition of Lewis; on June 4, the company terminated Quinlan's employment. The company claimed that it terminated Quinlan for her initial removal of the 1,830 pages of material, which it said violated company policy and "her common law duty of loyalty."

After ruling on Curtiss-Wright's motion to set aside the verdict on Quinlan's gender discrimination claim, the court addressed whether QuinSan's copying and use of the 1,830 pages was protected activity. The court held that it was not. In so holding, the court cited precedent from various circuits that rejected Quinlan's position" that removing confidential personnel records constituted protected activity.

In contrast, the court determined that Quinlan's use of the Lewis performance appraisal at Lewis' deposition was protected activity that cotsld support a claim for retaliation. The court noted that the performance appraisal "was a document that Curtiss-Wright voluntarily provided to Quinlan in April of 2004." In addition, unlike the 1,830 pages, the document was clearly discoverable and did not contain "personal information such as health records or other irrelevant but personal data."

The court distinguished between the copying and removal of the document and its use at the deposition. According to the court, "only its use at Lewis's deposition was protected." The court therefore instructed the jury that "it could not return a verdict for Quinlan if it found that Curtiss-Wright fired her because she copied and removed a copy of [the Lewis performance appraisal]."

To determine a reasonable counsel fee, the court utilized "current market rates rather than those in effect when the services were performed." Quoting Rendine v. Pantzer, 141 NX 292, 337 (1995). In support of their application for a $550 per hour partner rate, Quintan's attorneys submitted numerous certifications from "prominent and experienced" New Jersey attorneys, as well as a New Jersey Law Journal survey of counsel fees from some of New Jersey's largest law firms. Over Curtiss-Wright's counsel's objection, the court determined that "use of such a survey is proper."

The court ultimately determined that an hourly rate of $450 was reasonable for both of the two partners who tried the case for Quinlan. (In turn, in instances in which one of the partners tried the case and the other assisted that partner, the court calculated the "second chair" attorney's time "at an appropriate very senior associate's rate" of $375 per hour. In addition to considering the fees of the attorneys who submitted certifications and the 2005 Law Journal survey, the court also factored in the "novelty and difficulty of the question involved and the skill required to perform the legal services properly," quoting R. 4:42-9

For nonpartner attorneys' time, the court rejected the proposed "flat rate" of $400 per hour and held that an hourly rate of $245 was reasonable. The court noted that, in contrast to the application in support of their proposed partner hourly rate, Quinlan's attorneys provided little support for the reasonableness of their proposed nonpartner hourly rate. They failed to delineate these attorneys' compensation, qualifications or customary billing rates. Accordingly, the court utilized the average hourly rate for associates in the Law Journal's 2005 survey, "converted to 2007 dollars."

The court rejected Curtiss-Wright's argument that no hours should be permitted for the first trial, which "ended in a hung jury," or for time expended in support of claims that "were ultimately withdrawn or dismissed." Regarding the first argument, the court held that "a plaintiff who ultimately prevails - who wins the war - [may be rewarded] without deducting for lost battles along the way." Quoting Butler v. Frett. Civ. No. 99-4367 (RBK), 2006 U.S. Dist. LEXIS 44468, at *26-28 (D. NX June 29, 2006} (quoting Buffing ton v. Baltimore County, Md., 913 F.2d 1.1.3. 128 n. 12 (4th Or. 1990), cert, denied, 499 U.S. 906 (1991)). In addition, notwithstanding that plaintiff's claims for hostile work environment, pattern and practice, wage disparity and wage discrimination did not succeed, the court pointed to the $9.13 million verdict as "the ultimate test of success."

Regarding Quinlan's motions for leave to appeal to the Appellate Division and New Jersey Supreme Court, the court held that it did "not have the authority to award fees or expenses incurred before these higher courts," citing Tarr v. Bob Ciasutti's Mack Auto Mall, Inc., 390 N.J. Super. 557, 570 (App. Div. 2007).

The court held that Quinlan's attorneys' hours were not sufficiently documented and, in some cases, excessive.

For example, it took issue with a 17-hour entry for '"trial and trial preparation' which was not sufficiently detailed and would suggest that the attorney neither ate nor showered." The court faulted the practice of "Tumping' several tasks together under a single entry, without specifying the amount of time spent on each particular task," quoting Rucker v. Sheehy Alexandria, Inc., 255 F. Supp. 2d 562, 564 (D. Va. 2003). The court also criticized references to "conferences" "meetings" and "research" without greater specificity such as, for example, "the subject of the research ... " The court therefore deducted 7.5 percent from attorney time.

The court also cut in half the paralegal time because, first, much of the work "was primarily secretarial or clerical in nature." Interviewing clients and preparing legal documents, such as pleadings or motions, constituted paralegal work; photocopying and other clerical tasks did not. Another deficiency in Quinlan's attorneys' application was their failure to include "^;a summary of the paraprofcssionals' qualifications and the attorney's billing rate for paraprofessional services to clients generally,'" quoting R. 4:42-9(b).

The court awarded a 35 percent enhancement to the lodestar fee. The justification for this increase was "the important public interest in combating the 'glass ceiling'" and eradicating discrimination, as well as the "extraordinary" number of hours required to try this case two times, which meant "a potential economic disaster" for Quinlan's attorneys in the event of a defense verdict.

In reliance on Ferrante v. Sciaretta, 365 NX Super. 601 (Law Div. 2003), the court agreed that Quinlan was entitled to additional compensation due to "the negative tax consequences of a discrimination award." The Court issued a supplemental opinion on this issue available at www.judiciary.state.nj.us/decisions/Quinlan_Curtiss070628.pdf.

Moskowitz and Carcich handle employment and commercial litigation matters at Deutsch Atkins of Hackensack.