Update, 11/18/15: After the District and landlord requested rehearing of this matter by the full Court of Appeals, Legal Aid was invited by the court to file a response to the rehearing petition. Our response, which was drafted by pro bono counsel from Jenner & Block LLP and filed yesterday, explained that the Court of Appeals Division decision correctly determined that generally applicable hourly rates apply to this situation and that the Division's decision does not conflict with any other relevant authority.
Last month, Legal Aid won a victory in the D.C. Court of Appeals that will impact the way D.C. courts determine attorney fee awards when the prevailing party is a nonprofit legal services organization. The case, Tenants of 710 Jefferson Street v. D.C. Rental Housing Commission, spanned 11 years and required two trips to the Court of Appeals. In a 45-page opinion, a three judge division of the court held that the hourly billing rate schedule known as the “Laffey Matrix,” which is frequently used to estimate the value of legal services provided by groups like Legal Aid, is to be considered “presumptively reasonable” in fee award disputes.
Legal Aid was represented in this appeal by Paul M. Smith and Melissa A. Cox of Jenner & Block LLP. A petition for rehearing has been sought and is under consideration by the Court of Appeals, but for now, the decision clarifies the standard for assessing fee requests in matters involving organizations that provide free legal services to their clients.
Although opposing parties typically bear their own legal costs, some statutes contain fee-shifting provisions that entitle the prevailing party to recover their expenses from the losing party. Such provisions are often included to incentivize litigation in subject areas beneficial to the public interest but not being served by the market. This case arose under D.C.’s Rental Housing Act, which shifts fees to encourage tenants to enforce their rights and to provide a financial incentive for attorneys to accept cases. It began as a challenge by a building’s tenants, represented by Legal Aid, to their landlord’s petition for a substantial rehabilitation of the property. The landlord’s plan would have allowed for a massive increase in rent and threatened the tenants’ continued access to affordable housing. The case reached the Court of Appeals in 2010, and the division affirmed the denial of the landlord’s petition, but litigation continued over the fees to which the tenants were statutorily entitled.
Because Legal Aid provides representation for indigent clients free of charge and therefore lacks established billing rates, it submitted a fee request based on the Laffey Matrix. The Matrix, based on years of legal experience and adjusted for inflation, is designed to be a guideline for determining reasonable rates for legal services in the District of Columbia. A version of the Matrix is published by the Department of Justice and represents rates that the federal government will not contest in fee requests. It also has been used in a wide variety of cases to award fees to attorneys without a customary billing rate.
The Court’s ruling in this case will make it more difficult for a losing party to challenge fee requests that rely on the Laffey Matrix. The division wrote that departure from the Laffey rates “should not be lightly undertaken,” and that a losing party disputing the rates must provide “specific countervailing evidence.” The decision should preserve resources by decreasing the likelihood of protracted fee-related litigation.