What is the appellate standard of review for awards of attorney's fees in the Second Circuit?

Morris's remaining argument is that Cabala and his attorney acted unreasonably in continuing to litigate after communication of the June 25, 2009 settlement offer. We review a district court's award of attorney's fees for abuse of discretion. Townsend v. Benjamin Enters., Inc., 679 F.3d 41, 58 (2d Cir. 2012). The district court observes the parties' litigation directly and is thus best situated to consider the case-specific factors relevant to a reasonable fee assessment. See Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182, 194 (2d Cir.2007). Thus, we accord “substantial deference” to a district court's fee determinations. Fox v. Vice, ––– U.S. ––––, 131 S.Ct. 2205, 2216, 180 L.Ed.2d 45 (2011); see also Ortiz v. Regan, 980 F.2d 138, 141 (2d Cir.1992) (“A district court is in the best position to determine the amount of work that was necessary to achieve the results in a particular case and, therefore, is entitled to ample discretion in its decision.”). We detect no abuse of that discretion here.

The standard of review of an award of attorney's fees is highly deferential to the district court. Seigal v. Merrick, 619 F.2d 160, 161 (2d Cir.1980). "Because attorney's fees are dependent on the unique facts of each case, the resolution of this issue is committed to the discretion of the district court." Clarke v. Frank, 960 F.2d 1146, 1153 (2d Cir.1992). As Justice Brennan, concurring in part and dissenting in part in Hensley v. Eckerhart, 461 U.S. 424, 454, 103 S.Ct. 1933, 1950, 76 L.Ed.2d 40 (1983), a section 1988 case, said: "Paragraph-by-paragraph scrutiny of the explanations for specific exercises of the district courts' broad discretion ... serves no productive purpose...." As a general rule, so long as the district court has applied the correct criteria, its decision will withstand scrutiny.

"The standard of review of an award of attorney's fees is highly deferential to the district court. Because attorney's fees are dependent on the unique facts of each case, the resolution of this issue is committed to the discretion of the district court." Mautner v. Hirsch, 32 F.3d 37, 39 (2d Cir. 1994) (internal quotation marks and citations omitted). However, where an appellant's contention on appeal regarding an award of attorneys' fees is that the district court made an error of law in granting or denying such an award, the district court's rulings of law are reviewed de novo. See id. Siegel contends on appeal that the district court "erred in its interpretation and application of the NYBCL, the governing New York case law, and the judicially created bad faith exception to the American Rule, resulting in the incorrect determination that Mr. Siegel should not be reimbursed his enforcement fees." Thus, we review these legal determinations de novo.

We review a district court's decision to deny attorneys' fees for abuse of discretion. See Reiter v. MTA New York City Transit Auth., 457 F.3d 224, 229 (2d Cir.2006); see also Clarke v. Frank, 960 F.2d 1146, 1153 (2d Cir. 1992) ("Because attorney's fees are dependent on the unique facts of each case, the resolution of this issue is committed to the discretion of the district court."). "As a general rule, so long as the district court has applied the correct criteria, its decision will withstand scrutiny." Mautner v. Hirsch, 32 F.3d 37, 39 (2d Cir.1994). Further, "[a] district court `abuses' or `exceeds' the discretion accorded to it when (1) its decision rests on an error of law (such as application of the wrong legal principle) or a clearly erroneous factual finding, or (2) its decision— though not necessarily the product of a legal error or a clearly erroneous factual finding — cannot be located within the range of permissible decisions." Zervos v. Verizon N.Y., Inc., 252 F.3d 163, 169 (2d Cir.2001) (footnotes omitted).

Under 28 U.S.C. § 1447(c), "[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." We review the fee award for an abuse of discretion. Calabro v. Aniqa Halal Live Poultry Corp., 650 F.3d 163, 166 (2d Cir. 2011) (per curiam). This standard of review "is highly deferential to the district court," and "takes into account that the amount sought for attorney's fees is dependent on the unique facts of each case." Alderman v. Pan Am World Airways, 169 F.3d 99, 102 (2d Cir. 1999) (internal quotation marks omitted).

Generally, a district court determines attorneys' fees by "setting a reasonable hourly rate, taking account of all case-specific variables" and multiplying that rate by the number of hours expended. Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany & Albany Cnty. Bd. of Elections, 522 F.3d 182, 189 (2d Cir. 2008). "The reasonable hourly rate is the rate a

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paying client would be willing to pay," assuming that "a reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively." Id. at 190. There is a rebuttable presumption "that a reasonable, paying client would in most cases hire counsel from within his district, or at least counsel whose rates are consistent with those charged locally." Id. at 191. Thus, in most cases, a reasonable hourly rate is comparable to prevailing rates for attorneys of similar skill, experience, and reputation in the local community. See Blum v. Stenson, 465 U.S. 886, 898-99 (1984). When adjusting it, courts consider, inter alia, each attorney's experience, reputation, and ability; the time, labor, and skill required; the novelty and complexity of the legal issues posed; and awards in similar cases. Arbor Hill, 522 F.3d at 186 n.3. A district court will be found to have abused its discretion in arriving at an award amount only "if it based its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence, or rendered a decision that cannot be located within the range of permissible decisions." Calabro, 650 F.3d at 166 (internal quotation marks omitted).

Here, the district court did not abuse its discretion in awarding Wells Fargo 52% of the amount it requested for the attorneys' preparation and filing of the motion to remand. The district court first found that Toczek had no reasonable basis for removing the case and invited Wells Fargo to file an application for costs. Upon receipt of the application for 32.7 hours of attorney time and 16 hours of paralegal time, the district court observed that other recent in-district motions to remand required between 20 and 30 hours of work and reduced the billable time to 29.9 hours. Toczek argues that the district court should have reduced the time calculation further because the attorneys copied and pasted their motion from previous filings in cases like U.S. Bank Trust, N.A. v. Walbert, No. 3:17-cv-00991 (CSH), 2017 WL 4613192 (D. Conn. Oct. 16, 2017). But this

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argument is meritless. This case has a long history spanning more than a decade which sets it apart from other cases like Walbert and, in any event, Toczek produced no evidence that the attorneys inaccurately reported the time they spent tailoring their previous filings to the complexities of this case. Moreover, the district court appropriately considered those previous filings when reducing awardable time for the paralegal's preparation of appearance and corporate disclosure forms.

As Toczek concedes, the district court similarly conducted a careful and case-specific analysis when calculating hourly rates. Proceeding from the sound premise that litigants should not be reimbursed "for hiring costly counsel for simple matters," the district court looked to other recent district court remands—including in Walbert (where Bizar's awarded hourly rate was $425)—and determined they "set the prevailing rate for experienced attorneys handling complex civil litigation at between $400 and $500 and the upper-limit for paralegals at $150." App'x at 202. Based on this information, the district court reduced Bizar's hourly rate from $551 to $425, Kennedy's from $420 to $250, and Lugo's from $195 to $140. Thus, the district court did not abuse its discretion when it awarded $8,106.50 for the motion to remand after reducing the hours expended and rates requested.

We first reject Plaintiffs-Appellants' challenge to the district court's determination of the reasonable hourly rate. We award attorneys' fees according to the "presumptively reasonable fee" method, calculated as the product of the reasonable number of hours worked and a reasonable hourly rate. Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany & Albany Cnty. Bd. of Elections, 522 F.3d 182, 183-84 (2d Cir. 2008), as amended (Apr. 10, 2008). "[T]his Court has instructed that determination of a reasonable hourly rate 'contemplates a case-specific inquiry into the prevailing market rates for counsel of similar experience and skill to the fee applicant's counsel,' an inquiry that may 'include judicial notice of the rates awarded in prior cases and the court's own familiarity with the rates prevailing in the district.'" Townsend v. Benjamin Enters., Inc., 679 F.3d 41, 59 (2d Cir. 2012) (quoting Farbotko v. Clinton County, 433 F.3d 204, 209 (2d Cir. 2005)). In Arbor Hill, we emphasized that "[t]he reasonable hourly rate is the rate a paying client would be willing to pay . . . bear[ing] in mind that a reasonable, paying client wishes

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to spend the minimum necessary to litigate the case effectively." 522 F.3d at 190. "In determining what rate a paying client would be willing to pay, the district court should consider, among others, the Johnson factors." Id.^[2]

Reviewing recent Southern District cases awarding attorneys' fees, the district court first concluded that "there are effective attorneys at lower prices [than those sought by Plaintiffs-Appellants] for experienced litigators." Knox v. John Varvatos Enters. Inc., 520 F.Supp.3d 331, 342 (S.D.N.Y. 2021); see also Simmons v. N.Y.C. Transit Auth., 575 F.3d 170, 174 (2d Cir. 2009) ("According to the forum rule, courts should generally use the hourly rates employed in the district in which the reviewing court sits in calculating the presumptively reasonable fee." (citations and internal quotation marks omitted)). This conclusion was amply supported by recent Southern District cases considering the prevailing rate in the district. See, e.g., Chuk On Chan v. Good Chows Inc., No. 16-CV-02794 (RJS)(SN), 2017 WL 9538901, at *7 (S.D.N.Y. Mar. 3, 2017) ("Courts in this District have determined that a fee ranging from $250 to $450 per hour is appropriate for experienced civil rights and employment law litigators." (citations omitted)).

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The district court further referenced case-specific factors in its determination of an appropriate hourly rate. The court expressly noted "that this case involved novel issues of law, that both sides prosecuted the matter zealously, and that the stakes involved were high." Knox, 520 F.Supp.3d at 342. It placed great emphasis on "the fact that the performance of the plaintiffs' attorneys in the courtroom and the quality of the papers they filed with the Court was extraordinary." Id.; see Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 553 (2010) (reaffirming that "the novelty and complexity of a case generally may not be used as a ground for an enhancement" because these factors are presumably reflected in the reasonable hourly rate and requested hours). But it also considered that "the litigation of this case has positioned counsel to demonstrate expertise in class action and employment law that did not exist before." Knox, 520 F.Supp.3d at 342-43. Under these circumstances, the district court did not abuse its discretion in setting rates that were well within, or at the high end of, the prevailing rate for attorneys of like skill and experience in the Southern District. See Fisher v. Aetna Life Ins. Co., No. 16-CV-144 (RJS), 2020 WL 5898788, at *9 (S.D.N.Y. Oct. 5, 2020) (approving requested rates of $450 for Dunnegan, $225 for Weiss, and $165 for Chung in employee benefits case).

II. Reduction in Hours

We likewise reject Plaintiffs-Appellants' challenge to the district court's determination of the reasonable hours expended during the litigation. Plaintiffs-Appellants primarily argue that the district court erred in comparing their requested hours to those approved in more routine cases, rather than those billed by Varvatos' attorneys. When reviewing a fee application, a district court should "examine[] the particular hours expended by counsel with a view to the value of the work product of the specific expenditures to the client's case," and if it "concludes that any expenditure of time was unreasonable, it should exclude these hours" from the fee calculation. Luciano v. Olsten Corp.,

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109 F.3d 111, 116 (2d Cir. 1997) (citations omitted); Hensley, 461 U.S. at 434-35 (holding that only those hours "reasonably expended" should be awarded). In dealing with hours that are "excessive, redundant, or otherwise unnecessary, . . . the court has discretion simply to deduct a reasonable percentage of the number of hours claimed as a practical means of trimming fat from a fee application." Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998) (citations and internal quotation marks omitted).

Here, the district court acted well within its discretion in reducing Plaintiffs-Appellants' claimed hourly total by 50%. The court concluded that some of Plaintiffs-Appellants' excessive hours were "undoubtedly attributable to the attorneys' utter lack of experience in either class actions or employment litigation." Knox, 520 F.Supp.3d at 346; see Hensley, 461 U.S. at 438 n.13 (approving the district court's 30% reduction of an attorney's requested hours, in part, "to account for [the attorney's] inexperience"). The court also properly compared the hours sought by Plaintiffs-Appellants to those awarded in other employment discrimination suits. Knox, 520 F.Supp.3d at 346; see Cabrera v. Fischler, 814 F.Supp. 269, 289 (E.D.N.Y 1993), aff'd in relevant part sub nom. Cabrera v. Jakabovitz, 24 F.3d 372 (2d Cir. 1994) (finding unreasonable the 4, 800 attorney hours and 1, 500 paralegal hours claimed by plaintiffs when, in a similar case, counsel sought to recover for 2, 359.75 hours of work performed over the course of nine years). Although Plaintiffs-Appellants argue that it was inappropriate for the district court to compare the present case with single-plaintiff discrimination suits, they did not provide the district court with any class action cases to which the hours expended on this case could be compared. In any event, class actions are not categorically more complex than individual actions, and the district court appropriately considered the nature of the case as a class action lawsuit when formulating the award. See Knox, 520 F.Supp.3d at 347. On the record before us, we cannot conclude that the

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district court abused its discretion in applying a 50% reduction to the claimed hours. See Kirsch, 148 F.3d at 173.

Although we recognize that the abuse of discretion standard is a highly deferential one, "'abuse of discretion' is not the equivalent of 'unreviewable.'" In re Bolar Pharm. Co., Inc., Sec. Litig., 966 F.2d 731, 732 (2d Cir. 1992) (per curiam). In the past, we have found an abuse of discretion when district courts issued sanctions or deviated from the lodestar figure without sufficient explanation. See, e.g., Shcherbakovskiy v. Da Capo Al Fine, Ltd., 490 F.3d 130, 140 (2d Cir. 2007); Cohen v. W. Haven Bd. of Police Comm'rs, 638 F.2d 496, 505-06 (2d Cir. 1980). In this case, even though the district court approved the fee award without deviating from counsel's proposed lodestar figure, we are unable to assess the reasonableness of the fees in the absence of any explanation by the district court. See Hensley v. Eckerhart, 461 U.S. 424, 437 (1983) ("[T]he district court [should] provide a concise but clear explanation of its reasons for the fee award."). In fact, the district court granted the fee application in full before defendants' time to respond, under the Federal Rules of Civil Procedure, had expired.⁸ Because the district court granted the motion without any legal analysis, we are unable to discern whether it applied the correct legal standard and properly exercised its discretion in determining that the fee award was indeed

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reasonable. See In re Bolar Pharm. Co. Sec. Litig., 966 F.2d at 732 (stating that "[i]f we are to be satisfied that a district court has properly exercised its discretion, we must be informed by the record of why the district court acted as it did"); see generally United States v. Cavera, 550 F.3d 180, 193 (2d Cir. 2008) (en banc) ("We cannot uphold a discretionary decision unless we have confidence that the district court exercised its discretion and did so on the basis of reasons that survive our limited review.").

Accordingly, we remand the issue to the district court to allow it to fully consider defendants' opposition and to provide the grounds for its discretionary decision in connection with the fees motion.