NO. 34493

IN THE SUPREME COURT OF APPEALS

OF WEST VIRGINIA

______________________________________________

CARL AND TERRY MILAM, Respondents (Plaintiffs Below), v. FLEETWOOD HOMES OF N.C., INC., Petitioner (Defendant Below), AMICI CURIAE BRIEF OF AARP,

NATIONAL ASSOCIATION OF CONSUMER ADVOCATES, THE NATIONAL CONSUMER LAW CENTER, AND

WEST VIRGINIA SENIOR LEGAL AID IN SUPPORT OF PLAINTIFFS-APPELLEES

John W. Barrett WVA Bar No. Bailey & Glasser LLP 209 Capitol Street Charleston, WV 25301 (304) 345-6555 National Association of Consumer Advocates 1730 Rhode Island Ave., Ste 710 Washington, DC 20036 (202) 452-1989 National Consumer Law Center 7 Winthrop Square, 4th Floor Boston, MA 02110 (617) 542-8010 Attorney for Amici Curiae NACA & NCLC

Julie Nepveu DC Bar No. 458305 AARP Foundation Litigation 601 E St., NW Washington, DC 20049 (202) 434-2060 Attorney for Amicus Curiae AARP Cathy McConnell WV Bar No. 7103 West Virginia Senior Legal Aid 235 High Street #519 Morgantown, WV 26505 (304) 296-0082 Attorney for Amicus Curiae West Virginia Senior Legal Aid

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TABLE OF CONTENTS

TABLE OF AUTHORITIES ......................................................................................................... iii

Page

STATEMENT OF INTEREST ....................................................................................................... 1 PRELIMINARY STATEMENT .................................................................................................... 5 STATEMENT OF THE FACTS .................................................................................................... 5 ARGUMENT .................................................................................................................................. 6

I. The Trial Court Followed A Well-Established Body Of Jurisprudence For Awarding Fees To Protect Important Rights

Under A Myriad Of Statutes ....................................................................................6

II. The Court Should Reject Defendant’s Pejorative Portrayal Of The Fee-Shifting Enforcement Mechanism Adopted By The Legislature ......................9 A. Fee-Shifting Provisions Serve Important Public Purposes ...........................10 B. Fee Awards Must Be Sufficient To Attract Qualified Attorneys To Accept The Financial Risk Of Non-Payment Inherent In Fee-Shifting Cases ........................................................................................13

III. Limiting Attorney’s Fees In Proportion To Damages Would Usurp The Legislature’s Role And Undermine The Important Goals Embodied In Fee-Shifting Statutes..........................................................................................18

A. Court Have Rejected Fleetwood’s Proportionality Argument In Similar Cases .........................................................................................19

B. Courts Reject Proportionality Because It Undermines Enforcement

Of Fee-Shifting Statutes That Protect Many Important Rights .................20

C. A Fee Award Based On An Attorney’s Lodestar Is Reasonable Even If Not All Claims Succeed ................................................................26 D. Ability To Pay And Actual Cost Of Representation Are Irrelevant To Establishing What Is A Reasonable Attorney’s Fee ............28

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IV. Plaintiffs Should Not Be Penalized Where, As Here, Defendant’s Litigation Tactics—Not Unnecessary Litigation By Plaintiffs—Drive Up Fees ...................29

CONCLUSION ..............................................................................................................................31 CERTIFICATE OF SERVICE ..................................................................................................... 32

iii

TABLE OF AUTHORITIES

Cases Aetna Cas. & Sur. Co. v. Pitrolo, 176 W. Va. 190, 342 S.E.2d 156 (1986) ............................... 8, 9 Barber v. Kimbrell’s, Inc., 577 F.2d 216 (4th Cir. 1978), cert. denied, 439 U.S. 934 (1978) ............................................................................................................................ 9, 14 Barrow v. Falck, 977 F.2d 1100 (7th Cir. 1992) .................................................................... 13, 15 Birmingham v. Sogen-Swiss Int’l. Corp. Ret. Plan, 718 F.2d 515 (2d Cir. 1983) ........................ 29 Bishop Coal Co. v. Salyers, 181 W.Va. 71, 380 S.E.2d 238 (1989) ............................................... 9 Blanchard v. Bergeron, 489 U.S. 87 (1989) ........................................................................... 18, 28 Blum v. Stenson, 465 U.S. 886 (1984) .......................................................................................... 28 Bond v. Bond, 144 W. Va. 478, 109 S.E.2d 16 (1959) ....................................................................9 Bruce v. City of Gainesville, Ga., 177 F.3d 949 (11th Cir. 1999) ................................................ 11 Bruntaeger v. Zeller, 515 A.2d 123 (Vt. 1986) ............................................................................ 11 Bustamante v. First Fed. Sav. & Loan Ass’n, Etc., 619 F.2d 360 (5th Cir. 1980) ......................... 8 Camacho v. Bridgeport Financial, Inc., NO. C 04-00478 CRB, 2008 WL 3992715 *1 (N.D. Cal. Aug. 25, 2008) ................................................................................................. 23 City of Burlington v. Dague, 505 U.S. 557 (1992) ....................................................................... 19 City of Riverside v. Rivera, 477 U.S. 561 (1986) ..................................... 12, 20, 21, 22, 23, 25, 29 Clarke v. Whitney, 3 F. Supp. 2d 631 (E.D.Pa. 1998) .................................................................. 27 Cooper v. Dyke, 814 F.2d 941 (4th Cir. 1987) ......................................................................... 9, 27 Copeland v. Marshall, 641 F.2d 880 (D.C. Cir. 1980)). ..................................................... 9, 12, 29 Cullens v. Georgia Dep't. of Transp., 29 F.3d 1489 (11th Cir. 1994) .......................................... 25 de Jesus v. Banco Popular de Puerto Rico, 918 F.2d 232 (1st Cir. 1990) .......................... 7, 22, 23 Deposit Guar. Nat’l Bank v. Roper, 445 U.S. 326 (1980). ........................................................... 16 Drouin v. Fleetwood Enterprises, 163 Cal. App. 3d 486 (Ct. App. 1985) ................................... 19

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Eddy v. Colonial Life Ins. Co. of America, 59 F.3d 201 (D.C. Cir. 1995)...............................12, 30 Fegley v. Higgins, 19 F.3d 1126 (6th Cir. 1994) .................................................................... 12, 30 Flint v. Haynes, 651 F.2d 970 (4th Cir. 1981), cert. denied, 454 U.S. 1151 (1982) .......................9 Graciano v. Robinson Ford Sales, Inc., 144 Cal. App. 140 (Ct. App. 2006) ................................21 Gramatan Home Investors Corp. v. Starling, 470 A.2d 1157 (Vt. 1983) .....................................11 Graziano v. Harrison, 950 F.2d 107 (3d Cir. 1991) ..................................................................... 24 Greene v. Gibralter Mortg. Inv. Corp., 529 F. Supp. 186 (D.D.C. 1981) ................................ 7, 26 Harman v. City & County of San Francisco, 158 Cal. App. 4th 407 (Ct. App. 2007) ........... 21, 22 Heldreth v. Rahimian, 219 W.Va. 462, 637 S.E.2d 359 (2006).. ......................... 6, 8, 9, 11, 14, 18 Hensley v. Eckerhart, 461 U.S. 424 (1983) .............................................................. 8, 9, 21, 26, 27 Henson v. Columbus Bank & Trust Co., 770 F.2d 1566 (11th Cir. 1985) .................................... 29 Herrold v. Hajoca Corporation, 864 F.2d 317 (4th Cir. 1989). ................................................... 28 Hicks v. Albertson, 284 N.C. 236, 200 S.E.2d 40 (N.C. 1973) ..................................................... 15 Indep. Fed’n of Flight Attendants v. Zipes, 491 U.S. 754 (1989) ................................................... 7 Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85 (2d Cir. 2008) ......................................... 24 Ketchum v. Moses, 24 Cal. 4th 1122 (2001) ............................................................................ 7, 19 Krebs v. United Ref. Co. of Pa., 893 A.2d 776 (Pa. Super. Ct. 2006) .................................... 25, 26 L’Esperance v. Benware, 830 A.2d 675 (Vt. 2003)...................................................................... 23 Linoski v. Fleetwood Homes of Texas, 873 So. 2d 886 (La. Ct. App. 2004) .......................... 12, 20 Loggins v. Delo, 999 F.2d 364 (8th Cir. 1993) ............................................................................. 29 Lunday v. City of Albany, 42 F.3d 131 (2d. Cir. 1994). ................................................................ 24 Marek v. Chesny, 473 U.S. 1 (1985). ............................................................................................ 30 Mares v. Credit Bureau of Raton, 801 F.2d 1197 (10th Cir. 1986) ................................................ 8

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McCann v. Coughlin, 698 F.2d 112 (2d Cir. 1983) ...................................................................... 21 Morgan v. Kingen, 169 P.3d 487 (Wash. Ct. App. 2007) ............................................................. 17 Moton v. Nathan & Nathan, P.C., NO. 08-12337, 2008 WL 4747423 (11th Cir. Oct. 28, 2008) ................................................................................................... 25 Newman v. Piggie Park Enters., Inc., 390 U.S. 400 (1968) ................................................... 11, 12 Nigh v. Koons Buick Pontiac GMC, Inc., 478 F.3d 183 (4th Cir. 2007). .................................................................. 14, 15, 18, 22, 23, 26, 27, 29, 31 Northeast Women’s Center v. McMonagle, 889 F.2d 466 (3d. Cir. 1989). .................................. 25 Nusom v. Comh Woodburn, Inc., 122 F.3d 830 (9th Cir. 1997). .................................................. 30 Paxton v. Crabtree, 184 W.Va. 237, 400 S.E.2d 245 (1990) ......................................................... 7 Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22 (2d Cir. 1989) ....................................... 24 Quesada v. Thomason, 850 F.2d 537 (9th Cir. 1988) ................................................................... 21 Robertson v. Fleetwood Travel Trailers of Cal., Inc., NO. F053028, 2008 WL 2780904 (Cal. Ct. App. July 18, 2008) ...................................................................... 19 Robertson v. Fleetwood Travel Trailers of Cal., Inc., 144 Cal. App. 4th 785 (Ct. App. 2006) ................................................................................................................ 19 Robey v. Shapiro, Marianos & Cejda, L.L.C., 434 F.3d 1208 (10th Cir. 2006) ........................... 24 Rode v. Dellarciprete, 892 F.2d 1177 (3d Cir. 1990) ................................................................... 27 Rosie D. v. Patrick, ___ F. Supp. 2d ____, 2009 WL 92664 (D. Mass. 2009) .......................18, 29 Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983) .......................................................................... 7 Skelton v. Gen. Motors Corp., 860 F.2d 250 (7th Cir. 1988) ....................................................... 20 Sosa v. Fite, 498 F.2d 114 (5th Cir. 1974) .................................................................................... 10 Student Pub. Interest Research Group of New Jersey, Inc. v. AT & T Bell Labs., 842 F.2d 1436 (3d Cir.1988)............................................................................................. 13 Tolentino v. Friedman, 46 F.3d 645 (7th Cir. 1995)............................................................... 24, 25 U.S. Football League v. Nat’l Football League, 887 F.2d 408 (2d Cir. 1989). ............................ 23

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West Virginia Human Rights Comm’n v. Wilson Estates, Inc., 202 W.Va. 152, 503 S.E.2d 6 (1998)........................................................................................................................................... 7

Williams v. First Gov’t Mortgage & Investors Corp., 225 F.3d 738 (D.C. Cir. 2000) .......... 22, 27 Williams v. New Hope Found., Inc., 665 S.E.2d 586 (N.C. Ct. App. 2008). .......................... 15, 16 Willis v. Wal-Mart Stores, Inc., 202 W.Va. 413, 504 S.E.2d 648 (1998) ....................................... 6 Yohay v. City of Alexandria Employees Credit Union, Inc., 827 F.2d 967 (4th Cir. 1987). ........ 22 STATUTES Age Discrimination in Employment Act of 1967,

29 U.S.C.A. §§ 621-634.....................................................................................................28 15 U.S.C. § 2310(d)(2) ..................................................................................................................19 42 U.S.C. § 1988(b) .................................................................................................................20, 21 MISCELLANEOUS American Bar Association Code of Professional Responsibility, Disciplinary Rule 2-106. ............9 Findings of Fact and Conclusions of Law and Order, No. 02-C-11, Jan.2, 2008

(Judge David W. Nibert) ..................................................................................11, 14, 17, 29

National Consumer Law Center, Unfair and Deceptive Acts and Practices, (7th ed. 2008). ......................................................................................................................2

S. Rep. No. 95-382, 95th Cong., 1st. Sess., reprinted in 1977 U.S.C.C.A.N.

1695....................................................................................................................................11

S. Rep. No. 93-151, reprinted in 1974 U.S.C.C.A.N. 7702 ..........................................................12 West Virginia State Bar, Rules of Professional Conduct, available at:

http://www.wvbar.org/BARINFO/rulesprofconduct/rules1.htm (last visited January 15, 2008). ..............................................................................................................16

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STATEMENT OF INTEREST

AARP is a non-partisan, non-profit membership organization of more than 40 million

persons aged 50 and older dedicated to addressing the needs and interests of older persons.

There are over 317,000 AARP members in West Virginia.

AARP is deeply concerned about the financial security of the oldest and most vulnerable

portion of the population and is dedicated to preserving their financial security. To this end,

AARP assists older people in numerous ways. For example, West Virginia ElderWatch is a

program of the AARP Foundation and the West Virginia Attorney General’s Office. The

Attorney General’s Office of Consumer Protection refers all calls from consumers age 50+ to

ElderWatch, where trained volunteers help the consumers fill out the consumer complaint

paperwork and guide them through the process. AARP Foundation Litigation provides advocacy

and legal representation to older people, including in cases involving consumer protection, debt

collection abuses, identity theft, predatory lending, mortgage foreclosure, fair housing, disability

rights, employment, health, ERISA, securities, and a variety of other issues.

The National Association of Consumer Advocates, (“NACA”), is a non-profit

corporation whose members are private and public sector attorneys, legal services attorneys, law

professors and law students whose primary focus involves the protection and representation of

consumers. NACA’s mission is to promote justice for all consumers by maintaining a forum for

information sharing among consumer advocates across the country and serving as a voice for its

members as well as consumers in the ongoing effort to curb unfair and abusive business

practices. Enforcement and compliance with consumer protection laws has been a continuing

concern of NACA since its inception.

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The National Consumer Law Center, Inc., (“NCLC”), is a national research and advocacy

organization headquartered in Boston that focuses on the legal needs of low-income, financially

distressed, and elderly consumers. NCLC is a nationally recognized expert on consumer credit

issues and has drawn on this expertise to provide information, legal research, policy analyses,

and market insight to Congress and state legislatures, administrative agencies, and courts for

almost forty years.

NCLC is a non-profit corporation founded in 1969 at Boston College School of

Law. A staff of eighteen attorneys combines over 160 cumulative years of specialized consumer

law expertise. NCLC addresses the legal problems faced daily by low-income and financially

distressed families ranging from illicit contract terms and charges, home improvement frauds,

repossessions, debt collection abuses, usury, mortgage equity scams, and bankruptcy to utility

terminations, fuel assistance benefit programs, and utility rate structures, as well as many other

subjects. A major focus of NCLC’s work has been to increase public awareness of, and to

promote protections against, unfair and deceptive practices perpetrated against low-income and

elderly consumers. NCLC publishes a seventeen-volume Consumer Credit and Sales Legal

Practice Series, including, inter alia, Unfair and Deceptive Acts and Practices (7th ed. 2008).

West Virginia Senior Legal Aid, (“WVSLA”), is a non-profit organization dedicated to

providing free civil legal services and counsel to senior West Virginians age 60 and older.

WVSLA focuses on economically or socially disadvantaged, disabled, and rural seniors and

strives to secure justice for, and to protect the legal rights of, these needy people; to employ

attorneys to assist in furthering the purposes of the organization; to engage the private bar in

assisting us to further these purposes; and to be a significant elderlaw resource for all of West

Virginia.

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This case has wide-ranging implications for consumers because legislatures have enacted

fee-shifting statutes that are interpreted similarly in many types of cases. Older persons and

those with low incomes or who are financially distressed are frequently targets of fraudulent

schemes and unscrupulous practices. Similarly, numerous financial products and investments

are heavily marketed to older people and do not live up to marketing claims. The financial

security of older people will be enhanced through enforcement of laws requiring that products

and services provide the value intended, do not drain financial resources, or worse, cause

physical harm. In order to ensure such enforcement, the standards for awarding attorney’s fees

must not become an obstacle to obtaining relief.

The availability of attorney’s fees through fee-shifting mechanisms provide a means to

enforce those rights, especially where people with low monetary damages or who seek to enforce

non-monetary rights, would be unable to afford to pursue relief for fraud, deceptive practices,

and a host of other legally protected interests but for the availability of attorney’s fees through

fee-shifting statutes. Even if they could afford to pay an attorney, their financial security would

be greatly diminished if they could not recover fees when their lawsuit was successful.

Moreover, this case arises from the purchase of a manufactured home. AARP supports

manufactured housing as a means to provide affordable housing to many older people, especially

in rural areas. Manufactured housing is not a viable option unless it meets minimally acceptable

standards of quality, which AARP and others have worked to improve. Without an ability to

enforce warranties and other contract terms, it is unlikely that the marketplace for manufactured

housing will be held to such high standards.

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If the Court imposes a proportionality requirement, as defendant urges, the doors to the

courthouse will be closed to all but those with very substantial damages claims or sufficient

economic resources to pay the cost of litigation. Even for those with sufficient resources, being

required to pay attorney’s fees to enforce their rights threatens their financial security because it

reduces their recovery. Thus, amici have a significant interest in ensuring that the laws are

enforced and that persons injured by unfair, deceptive, abusive, fraudulent, discriminatory or

other prohibited practices have access to attorneys willing to represent them.

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PRELIMINARY STATEMENT

Attorney’s fees awarded pursuant to fee-shifting statutes are an integral part of a

comprehensive, sensible, and fair remedial scheme adopted by legislatures. Legislatures value

fee shifting as a method of citizen enforcement for important constitutional and statutory rights,

including statutes that protect people from unfair, fraudulent, deceptive, or abusive practices.

The shifting of fees provides an incentive to attorneys to represent consumers with meritorious

claims and will encourage and enable private litigants to challenge prohibited practices. In turn,

this private litigation discourages violations of the law generally throughout the marketplace,

because offenses are more likely to be challenged and remedied. Society benefits from increased

enforcement of the law, but is not burdened with paying for a public enforcement agency. Fee-

shifting statutes require defendants to pay the legal fees necessary to enforce the law, which

appropriately places the burden for enforcement on the shoulders of those responsible for

prohibited practices.

Attorney’s fee awards that fairly compensate for all the time reasonably necessary to

obtain the relief granted do not result in windfalls for attorneys or encourage unnecessary

litigation. To the contrary, the legislative goals embodied in the fee-shifting mechanism would

be undermined if attorneys were not adequately compensated for time reasonably necessary to

litigate a case, or if fees had to be proportional to the damages awarded under such statutes.

STATEMENT OF THE FACTS

Amici Curiae AARP, NACA, NCLC, and WVSLA adopt the factual statement of

Plaintiffs-Respondents Carl and Terry Milam.

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ARGUMENT

I. The Trial Court Followed A Well-Established Body Of Jurisprudence For Awarding Fees To Protect Important Rights Under A Myriad Of Statutes

Defendant argues that awarding fees for the full amount of time reasonably necessary to

litigate this case amounts to a windfall and encourages unnecessary fee-driven litigation.

Defendant also argues that an award of fees must be tied to the amount of damages awarded in

order to be deemed reasonable. Defendant’s proportionality challenge, and its overall pejorative

portrayal of the entire fee-shifting mechanism, should be rejected, as it has been by numerous

other courts.

Proportionality undermines the important goal of encouraging enforcement of the many

statutes legislatures pass to protect individuals and the marketplace. Because a large number of

statutes rely on a fee-shifting mechanism for enforcement, the detrimental implications of a

proportionality requirement extend far beyond the confines of this case. It would also undermine

the many substantive rights whose enforcement legislatures have entrusted to private litigants

through fee-shifting provisions.

As the Court instructed in Heldreth v. Rahimian, statutes protecting constitutional, civil,

and consumer rights, and other important mandates, all of which are enforced through a fee-

shifting mechanism, have a similar underlying rationale and should be construed similarly. 219

W.Va. 462, 467, 637 S.E.2d 359, 364 (2006). The Court stated:

Because there is a substantial attorney-fee jurisprudence developed in the area of fee-shifting statutes in civil rights litigation and because the rationale underlying the fee-shifting mechanism in [West Virginia] as well as the language providing for such recovery is the same as that provided for in the federal civil rights area, [West Virginia courts] rely upon that body of law to address the fee issues presented by this case.

Id. at 365 n.9. See also Willis v. Wal-Mart Stores, Inc., 202 W.Va. 413, 417, 504 S.E.2d 648,

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652 (1998) (recognizing the West Virginia court’s “longstanding practice of applying the same

analytical framework used by the federal courts when deciding cases arising under the [W.Va.

Human Rights] Act” especially where “the critical language of our Act . . . parallels the federal

legislation”) (citation and internal quotation omitted); West Virginia Human Rights Comm’n v.

Wilson Estates, Inc., 202 W.Va. 152, 158, 503 S.E.2d 6, 12 (1998) (observing that “[t]his Court

has consistently looked to federal discrimination law dealing with Title VII of the Civil Rights

Act of 1964 . . . when interpreting provisions of our state’s human rights statutes”); Paxton v.

Crabtree, 184 W.Va. 237, 250, 400 S.E.2d 245, 258 n.26 (1990) (noting that “we have adopted

federal precedent when we believed it was compatible with our human rights statute”). The

lodestar adjustment method “is the prevailing rule for statutory attorney fee awards and is to be

applied in the absence of clear legislative intent to the contrary.” Ketchum v. Moses, 24 Cal. 4th

1122, 1135-36 (2001).

The U.S. Supreme Court has further instructed that although there are a multitude of

statutes which include fee-shifting provisions, their similar language is a ‘strong indication’ that

they are to be interpreted alike. Indep. Fed’n of Flight Attendants v. Zipes, 491 U.S. 754, 758 n.2

(1989); Ruckelshaus v. Sierra Club, 463 U.S. 680, 701, 702 n.12 (1983) (grouping statutes that

award fees for “successful actions” together with statutes that award fees to “prevailing” or

“substantially prevailing” parties). See Greene v. Gibraltar Mortg. Inv. Corp., 529 F. Supp.

186, 188 (D.D.C. 1981) (awarding attorney’s fees under the District of Columbia Consumer

Protection Practices Act and adopting the D.C. Circuit’s analysis of Title VII attorney’s fees

cases which hold that prevailing parties are eligible for fees); de Jesus v. Banco Popular de

Puerto Rico, 918 F.2d 232, 235 (1st Cir. 1990) (finding “[t]he amount of the award should be

calculated in accordance with the Supreme Court’s substantial precedent on the standards for

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determining a reasonable attorney’s fee.”); Mares v. Credit Bureau of Raton, 801 F.2d 1197,

1201-10 (10th Cir. 1986) (using Hensley principles for determining fees under the Truth in

Lending Act, Fair Credit Reporting Act and Fair Debt Collection Practices Act); Bustamante v.

First Fed. Sav. & Loan Ass’n, 619 F.2d 360, 365-66 (5th Cir. 1980).

As clearly and persuasively argued in Plaintiffs’ brief, the trial court properly applied the

well-established factors appropriate to determining a reasonable fee. West Virginia Courts

follow the lodestar approach first addressed in Hensley v. Eckerhart, 461 U.S. 424 (1983). “The

most useful starting point for determining the amount of a reasonable fee is the number of hours

reasonably expended on the litigation multiplied by a reasonable hourly rate . . . .” Id. at 433.

“There remain other considerations that may lead the district court to adjust the fee upward or

downward,” id. at 434, but “many of these factors usually are subsumed within the initial

calculation of hours reasonably expended at a reasonable hourly rate.” Id. at 434 n.9 (citation

omitted).

West Virginia courts have adopted the same methodology and factors approved in

Hensley in determining an award of reasonable attorney’s fees under fee-shifting statutes. “The

general factors outlined in Syllabus Point 4 [of] Aetna Cas. & Sur. Co. v. Pitrolo, 176 W. Va.

190, 342 S.E.2d 156 (1986), should be considered to determine: (1) ‘the reasonableness of both

time expended and hourly rate charged; and, (2) the allowance and amount of a contingency

enhancement.’” Heldreth, 219 W.Va. at 464, 637 S.E.2d at 361 (citing Syl. Pt. 4, Pitrolo, 176

W. Va. at 191, 342 S.E.2d at 157). Those factors are:

(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of

9

the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.1

Id. at 361-62 (citing Syl. Pt. 4, Pitrolo, 176 W. Va. at 191; Hensley, 461 U.S. at 430 n.3); Syl. Pt.

3, Bishop Coal Co. v. Salyers, 181 W.Va. 71, 71, 380 S.E.2d 238, 238 (1989). Note that

proportionality is not among them, and would make many of those included unworkable.

Thus the trial court did not abuse its discretion. See Bond v. Bond, 144 W.Va. 478, 478-

79, syl. pt. 3, 109 S.E.2d 16, 17 (1959) (explaining “[T]he trial [court] . . . is vested with a wide

discretion in determining the amount of . . . court costs and counsel fees; and the trial [court’s] .

. . determination of such matters will not be disturbed upon appeal to this Court unless it clearly

appears that [it] has abused [its] discretion.”); Bishop Coal, 181 W.Va. at 80, 380 S.E.2d at 247;

Cooper v. Dyke, 814 F.2d 941, 950 (4th Cir. 1987) (holding “We will not disturb a trial court’s

award of attorney’s fees and costs absent an abuse of discretion.”); Barber v. Kimbrell’s, Inc.,

577 F.2d 216, 226 (4th Cir. 1978), cert. denied, 439 U.S. 934 (1978) (same); Flint v. Haynes,

651 F.2d 970, 973 (4th Cir. 1981), cert. denied, 454 U.S. 1151 (1982) (costs). The lower court

properly calculated the lodestar and carefully and properly considered the Pitrolo factors to

arrive at a reasonable attorney’s fee award in this case.

II. The Court Should Reject Defendant’s Pejorative Portrayal Of The Fee- Shifting Enforcement Mechanism Adopted By The Legislature

The Court should reject Defendant’s argument that attorney’s fees disproportionate to the

amount of damages awarded are unreasonable by definition. In so arguing, Defendant invites the

Court to second-guess the will of the legislature in assigning, to a losing defendant, the full cost

to enforce plaintiffs’ rights through private litigation. At the outset, it must be recognized that

1 These factors derive directly from the American Bar Association Code of Professional Responsibility, Disciplinary Rule 2-106. See also Hensley, 461 U.S. at 430 (favorably citing Copeland v. Marshall, 641 F.2d 880, 889 (D.C. Cir. 1980)).

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the award of fees is a direct result of Defendant’s violation of the law, enacted to protect

Plaintiffs and provide them with a private remedy. An award of reasonable attorney’s fees arises

from—and cannot be viewed as wholly independent from—the underlying substantive rights the

fee-shifting provision is designed to enforce. Courts must “begin with the settled proposition

that congressional goals underlying . . . [enactment] include the creation of a system of private

attorney generals who will be able to aid the effective enforcement of the Act.” Sosa v. Fite, 498

F.2d 114, 121 (5th Cir. 1974) (citations and internal quotation marks omitted). Rather than

comply voluntarily with the law, Defendant violated it and then chose to defend against

Plaintiffs’ efforts to obtain a remedy, perhaps hoping to avoid liability, or seeking to use this case

as a vehicle to establish favorable precedent to weaken the enforcement of the underlying

substantive rights in future cases. Because a fee award adequate to fully compensate time

reasonably spent at a reasonable hourly rate is essential to provide an incentive for attorneys to

represent individuals seeking to enforce their underlying substantive rights, Defendant’s

challenge to the fee award here may be viewed as an alternative approach to the same end.

A. Fee-Shifting Provisions Serve Important Public Purposes

Fee-shifting mechanisms should not be viewed pejoratively. Rather, they are specifically

designed to encourage private litigation to enforce many important rights, without burdening

either taxpayers or individuals whom the legislature intended to protect. Plaintiff’s attorneys

should not be denigrated for participating successfully in the enforcement mechanism designed

to accomplish the important goals established by the legislature, especially where, as here, such

criticism is wholly unwarranted. “The outcome of this case was excellent for Plaintiffs. They

not only prevailed on all of their legal claims, but they obtained virtually all of the legal and

11

equitable relief they sought in the litigation.” Findings of Fact and Conclusions of Law and

Order, ¶ 43, No. 02-C-11, Jan.2, 2008, (Judge David W. Nibert) (“Order”).

By enacting statutes with fee-shifting provisions, legislatures intentionally assign the cost

of enforcement to defendants who have violated the law. “The interests of both the business

community and the public at large are best served by shifting the burden of the expense of

consumer fraud litigation onto the shoulders of those whose unfair or fraudulent acts are

responsible for the litigation in the first place.” Gramatan Home Investors Corp. v. Starling, 470

A.2d 1157, 1162 (Vt. 1983); accord Bruntaeger v. Zeller, 515 A.2d 123 (Vt. 1986). In Heldreth,

the Court noted that

inherent in any statutory fee award made pursuant to West Virginia Code § 5-11-13(c) is a recognition that the economic incentive provided by such a fee-shifting mechanism is necessary to attract competent counsel for the purpose of enforcing civil rights laws that serve to protect the interests of this state’s citizenry.

219 W.Va. at 467, 637 S.E.2d at 364.

Similar principles underlie fee-shifting positions in federal laws. For example, the Senate

Report accompanying adoption of the Fair Debt Collection Practices Act (“FDCPA”), which

contains a fee-shifting provision, states that the “committee views this legislation as primarily

self-enforcing; consumers who have been subject to collection abuses will be enforcing

compliance.” S. Rep. No. 95-382, 95th Cong., 1st. Sess., at 5, reprinted in 1977 U.S.C.C.A.N.

1695, 1699. Thus, the underlying theory is that plaintiffs litigating their own claims using fee-

shifting provisions further the public interest while seeking a remedy for their own injuries. By

enforcing the law, a litigant acts as a “‘private attorney general,’ vindicating a policy that

Congress considered of the highest priority.” Newman v. Piggie Park Enters., Inc., 390 U.S.

400, 402, (1968); see also Bruce v. City of Gainesville, Ga., 177 F.3d 949 (11th Cir. 1999)

(same).

12

In addition, fee-shifting provisions help curb marketplace abuses, the rationale being that

increased enforcement will deter illegal conduct. See Fegley v. Higgins, 19 F.3d 1126, 1135 (6th

Cir. 1994) (awarding $40,000 in attorney fees, noting that “this lawsuit furthers the objectives of

the [Fair Labor Standards Act] by penalizing an employer who neglected to pay an employee

overtime or to even maintain any records of his hours worked; it therefore encourages employer

adherence to the mandates of the FLSA in the future.”); S. Rep. No. 93-151, reprinted in 1974

U.S.C.C.A.N. 7702, 7709 (“It is difficult for a company to conform to high standards and

practices if it has competitors who continue to reap greater profits by pursuing less honorable

tactics.”) Thus, fee-shifting provisions promote high standards of compliance with the law by

ensuring that companies that follow the law are not competitively disadvantaged by “less

honorable” companies. Id. See also Linoski v. Fleetwood Homes of Texas, 873 So. 2d 886, 889

(La. Ct. App. 2004) (finding “an award of attorney’s fees in addition to damages discourages

sellers and manufacturers from selling shoddy, defective products in the marketplace.”). By

shifting the cost of attorney’s fees onto a “less honorable” company, fee-shifting statutes foster

better market competition as well as faster resolution of meritorious consumer disputes. See

Copeland, 641 F.2d at 889 (finding that liability for attorney’s fees deters illegal behavior); Eddy

v. Colonial Life Ins. Co. of Am., 59 F.3d 201, 207-08 (D.C. Cir. 1995) (same).

The U.S. Supreme Court consistently has recognized the importance of fee awards that

meet public interest goals through enforcement of fee-shifting statutes. If “plaintiffs were

routinely forced to bear their own attorney’s fees, few aggrieved parties would be in a position to

advance the public interest.” Newman, 390 U.S. at 402. In City of Riverside v. Rivera, the Court

observed:

13

Unlike most private tort litigants, a civil rights plaintiff seeks to vindicate important civil and constitutional rights that cannot be valued solely in monetary terms. . . . And, Congress has determined that the public as a whole has an interest in the vindication of the rights conferred by the statutes enumerated in § 1988, over and above the value of a civil rights remedy to a particular plaintiff.

477 U.S. 561, 574 (1986) (citations omitted).

The Seventh Circuit described in practical terms the significant public benefit of shifting

fees in private cases that would otherwise be uneconomical to bring:

Although private parties looking only to their own interests would not invest more in litigation than the stakes of the case, the combination of self-interest with the American Rule on the allocation of legal costs means that people can get away with small offenses. A two-day suspension may be unconstitutional, but a few hours of legal time costs more than the wages lost. Section 1988 helps to discourage petty tyranny.

Barrow v. Falck, 977 F.2d 1100, 1103 (7th Cir. 1992).

Thus, “Congress provided fee-shifting to enhance enforcement of important civil rights,

consumer-protection, and environmental policies. By providing competitive rates we assure that

attorneys will take such cases, and hence increase the likelihood that the congressional policy of

redressing public interest claims will be vindicated.” Student Pub. Interest Research Group of

New Jersey, Inc. v. AT & T Bell Labs., 842 F.2d 1436, 1449-50 (3d Cir.1988). Further, fee-

shifting provisions open the doors to the courthouse, which would otherwise be closed to all but

those with either potentially very substantial damages or sufficient economic resources to pay

litigation fees.

B. Fee Awards Must Be Sufficient To Attract Qualified Attorneys To Accept The Financial Risk Of Non-Payment Inherent In Fee- Shifting Cases

Defendant argues that permitting plaintiffs to recover their full lodestar in this case

produces a windfall and encourages fee-driven litigation. Further, according to Defendant,

awarding fees here discourages settlement by encouraging attorneys to engage in unnecessary

14

litigation designed to drive up fees. Such criticism is invalid and illogical. Obviously, all of the

work performed under fee-shifting statutes is fee-driven in the sense that the legislature has

intentionally provided fee-shifting as an incentive to protect important rights and enforce

important public policies. But the facts in this case belie Defendant’s claims, which do not fit

the Defendant’s unflattering – and undeserved – paradigm of a plaintiff’s attorney scrounging for

work and driving up fees through shot gun pleadings, slipshod performance, and unnecessary

litigation in the hopes of obtaining a higher fee. See also Heldreth, 219 W.Va. at 475, 637

S.E.2d at 372 (Benjamin, J. concurring). Rather, the trial court judge, who monitored this

litigation first hand, found “that the amount of time expended in this case, and the resulting

amount of attorney’s fees, are directly related to Fleetwood’s calculated defense strategy and

refusal to engage in settlement negotiations.” Order at ¶46. See Barber, 577 F.2d at 226

(holding “[T]he allowance of attorneys’ fees is within the judicial discretion of the trial judge,

who has close and intimate knowledge of the efforts expended and the value of the services

rendered” (citations omitted)). Plaintiffs’ willingness to settle this case is manifested by their

settlements with the two other parties in this case. Fleetwood was sanctioned by the court for

refusing to negotiate settlement in good faith. Order at ¶ 6.

Defendant was unable to defeat Plaintiffs’ claims in any respect, or to establish favorable

precedent. Through this appeal of the attorney fee award, Defendant may now hope to create a

significant economic disincentive for attorneys to represent clients in fee-shifting cases, thereby

undermining enforcement of the substantive law in future cases.

In Nigh v. Koons Buick Pontiac GMC, Inc., the court considered the economic incentive

of a “repeat violator” under the Truth in Lending Act to spend more in fees in a particular case in

hopes of saving damages in later ones. 478 F.3d 183, 188-89 (4th Cir. 2007). The Court stated:

15

Only with fee-shifting does the prosecution of a typical individual TILA claim become an economically sensible possibility. Defending against a TILA claim is another matter. Defendants in TILA suits are more likely to be repeat violators than plaintiffs are to be repeat victims. For a defendant like Koons, the risk of losing more in costs and fees than is gained in refunded damages in one particular appeal may well be a risk worth taking: what is lost in fees in that case may be saved in damages in a later one. If Koons ever finds itself in TILA litigation of this sort again, it can now rest assured that its damages will be capped at $1,000. For a repeat player, this security has great value, likely much more than the additional fees Koons has been ordered to pay in this litigation as a result of its choice to appeal to the Supreme Court.

Id. at 188-89 (footnote omitted).

The cost of litigation in one case may understate the stakes of the litigation. As the

Seventh Circuit observed,

Awarding the full cost of litigation, which looks excessive in the single case, is sensible because it aids in the enforcement of rules of law. [citation] Put another way: Monetary awards understate the real stakes. Judicial decisions have effects on strangers. This litigation was prosecuted by a lawyer retained by a union of public employees and stoutly resisted by the county. If as the defendants say “only” $3,700 was at stake, why the tenacious resistance?

Barrow, 977 F.2d at 1103-04.

In Williams v. New Hope Found., Inc., the court rejected defendant’s arguments that the

trial court abused its discretion when it awarded $25,000.00 in attorney’s fees and $2,534.14 in

costs when a judgment of only $72.00 was awarded to plaintiff under the Wage and Hours Act

and the remaining claims were dismissed with prejudice. 665 S.E.2d 586 (N.C. Ct. App. 2008).

The Court noted:

The obvious purpose of th[e] statute [at issue was] to provide relief for a person who has sustained injury or property damage in an amount so small that, if he must pay his attorney out of his recovery, he may well conclude that is not economically feasible to bring suit on his claim. In such a situation the Legislature apparently concluded that the defendant, though at fault, would have an unjustly superior bargaining power in settlement negotiations.

Id. 665 S.E.2d at 589 (citing Hicks v. Albertson, 284 N.C. 236, 200 S.E.2d 40 (N.C. 1973)

16

(awarding attorney’s fees in a property damage case where attorney fees and costs might

outweigh the award received).

Thus, the fee award in this case, as in all fee-shifting cases, must be understood in the

overall context of the fee-shifting enforcement mechanism. Legislatures and courts recognize

that in order to serve the intended public benefits of increased enforcement by private litigants, a

financial incentive is necessary to entice qualified attorneys to devote their time to complex,

time-consuming cases in which they risk non-payment. Deposit Guar. Nat’l Bank v. Roper, 445

U.S. 326, 338-39 (1980) (affirming fee award).

The incentive must also overcome various disincentives affecting the availability of

attorneys willing or able to represent clients to enforce fee-shifting statutes, due to the significant

financial constraints. Private attorneys who represent the interests of business clients may be

prevented by ethical constraints from representing plaintiffs in fee-shifting cases, either as part of

their regular practice or on a pro bono basis.2

2 Rule 1.7. Conflict of interest: General rules. (a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless: (1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and (2) each client consents after consultation. (b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person, or by the lawyer’s own interests, unless: (1) the lawyer reasonably believes the representation will not be adversely affected; and (2) the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantage and risks involved. West Virginia State Bar, Rules of Professional Conduct, available at:

Even if corporate counsel or retained attorneys do

not have a direct conflict, they may well have institutional conflicts that prevent them from

taking litigation positions that would harm the interests of their corporate clients or affiliates.

For example, attorneys representing a bank are unlikely to represent individual clients against

http://www.wvbar.org/BARINFO/rulesprofconduct/rules1.htm (last visited January 15, 2008).

17

another bank simply to obtain fees, because doing so may establish a legal principle that will

harm the interests of their other clients in subsequent litigation.

Contrary to Defendant’s assertions, it is illogical and against the self-interest of those few

attorneys who are willing to represent plaintiffs—without a guarantee of payment—to engage in

unnecessary legal work in fee-shifting cases in the hopes that it may result in a higher fee. They

do not receive a salary or retainer, as a corporate or defense lawyer typically would. Before

being paid for any of their services, they must win the lawsuit and all appeals. They will often

advance significant costs. Performing unnecessary legal work puts such attorneys at

considerably higher financial risk, because they could instead be working on cases for which

they are paid a salary or retainer.

Consider, for example, the risk of nonpayment for Plaintiffs in this case. This case has

already taken six years to litigate. Order at ¶ 41. This litigation has cost the attorneys

$16,700.33 in expenses advanced to the client, as well as over 1,278 hours of legal work valued

at $413,551.60. Order at ¶ 28. Plaintiffs’ attorneys did not recover a cent for any of this work

during the pendency of the case. Order at ¶ 42. Nor are they guaranteed payment, even now.

The realistic possibility that any given defendant may not be solvent by the time a fee award is

made, if ever, is one which further increases the risk of representing plaintiffs to protect rights

enforced through fee-shifting statutes. Morgan v. Kingen, 169 P.3d 487, 499 (Wash. Ct. App.

2007) (concluding “it is counterintuitive to exclude from the risk assessment whether a

judgment, once obtained, may be satisfied. The court found Morgan’s counsel included

collectability of a judgment as part of its assessment of whether to take this case.”).

Moreover, unnecessary litigation will not likely withstand the court’s scrutiny under the

proper lodestar calculation. Just as the trial court scrutinized defense counsel’s litigation tactics,

18

courts routinely scrutinize plaintiff’s counsel’s performance. See Heldreth, 219 W.Va. at 471,

637 S.E.2d at 368 (citing Blanchard v. Bergeron, 489 U.S. 87 (1989)). While it may be

necessary for a court to reduce fee requests accordingly, often it is not. In Rosie D. v. Patrick,

for example, the court awarded $6,885,108.75 to plaintiffs counsel, and rejected the notion that a

high fee award reflects poorly on plaintiff’s attorneys, stating:

Plaintiffs’ counsel’s requested fees and costs are more than reasonable. Indeed, counsel’s request, substantially reduced before submission, reflects laudable restraint and scrupulousness . . . . [T]heir reduced request constitutes both a testament to their dedication to the disabled children and an expression of the highest values of the bar. The firm’s willingness to charge at rates far lower, and for hours far less, than would be accepted as a matter of course from other clients deserves, and has, the respect of this court.

___ F. Supp. 2d ____, 2009 WL 92664 (D. Mass. 2009).

III. Limiting Attorney’s Fees In Proportion To Damages Would Usurp The Legislature’s Role And Undermine The Important Goals Embodied In Fee-Shifting Statutes

Fleetwood argues, as it has in numerous other cases, that fees can only be deemed

reasonable if they are proportional to damages awarded. Courts have soundly rejected this

proposition. A court must not substitute its judgment for the attorney general role that the

legislature has assigned a private litigant under a fee-shifting statute. See Nigh, 478 F.3d at 189

(noting “If it seems harsh that litigants in Koons’s position might be forced to choose between

paying additional fees and forsaking an appeal, the complaint is more properly lodged with

Congress than with the courts.”). Given that so many of the statutes protecting individual rights

and the overall marketplace are enforced through fee-shifting, a proportionality requirement

could have significant chilling effects on hundreds of statutes, and close the doors to the

courthouse for all but a few with the resources to pursue enforcement.

19

A. Courts Have Rejected Fleetwood’s Proportionality Argument In Similar Cases

Fleetwood has unsuccessfully made similar arguments before numerous courts. Most

recently, in Robertson v. Fleetwood Travel Trailers of Cal., Inc., the Court rejected Defendant’s

proportionality arguments and claims that fees for the appeals should be reduced in calculating

the lodestar. No. F053028, 2008 WL 2780904 (Cal. Ct. App. July 18, 2008). The total award of

fees and costs, including those for the appeal came to $545,723. The Court found a $340 per

hour rate, before applying multipliers, to be reasonable and, in fact, well below the prevailing

market rate for contingent and non-contingent fee cases. Id. The court also rejected the

contention that fee multipliers are no longer appropriate, noting that the California Supreme

Court declined to follow City of Burlington v. Dague, 505 U.S. 557 (1992), for fee awards under

California statutes. Id. at *6 (citing Ketchum, 24 Cal. 4th at 1136-38). Thus, Burlington is not

binding on state courts in cases arising under state law.

In an earlier appeal of fees in that case, the court interpreted language identical to the

attorneys’ fee provision contained in the Magnuson-Moss Warranty Act passed by Congress in

1975. See 15 U.S.C. § 2310(d)(2). It rejected Fleetwood’s proportionality argument, noting that

awards “based on actual time expended” as used by Congress in the Magnuson-Moss Warranty

Act had a definite purpose. Robertson v. Fleetwood Travel Trailers of Cal., Inc., 144 Cal. App.

4th 785 (Ct. App. 2006) (same). In Drouin v. Fleetwood Enterprises, the Court of Appeal

explained the intent of Congress in using this particular wording:

The Senate Report concerning this language makes its purpose clear: ‘It should be noted that an attorney’s fee is to be based upon actual time expended rather than being tied to any percentage of the recovery. This requirement is designed to make the pursuit of consumer rights involving inexpensive consumer products economically feasible.’ (Sen. Rep. No. 93-151, 1st Sess., pp. 23-24 (1973).) We believe this rationale applies with equal force to purchases of products which may

20

not be ‘inexpensive.’ The trial court did not err in calculating attorneys fees based on actual time expended.

163 Cal. App. 3d 486, 493 (Ct. App. 1985); see also Skelton v. Gen. Motors Corp., 860 F.2d 250

(7th Cir. 1988) (holding that the statutory language of the Magnuson-Moss Warranty Act

attorney fee provision is consistent with the use of a multiplier and rejecting proportionality,

noting that because a risk enhancer is applicable to the lodestar—it multiplies the lodestar by a

number representing the probability of loss—it is based on the number of hours the attorneys

worked and not the size of plaintiff’s recovery).

In Linoski, the court also rejected a proportionality argument made by Fleetwood in a

similar case.

[R]easonable attorney’s fees should be awarded to justly compensate plaintiffs who succeed in establishing liability on the part of the seller or manufacturer . . . . An award of attorney’s fees encourages both plaintiffs to pursue meritorious [ ] actions and attorneys to represent plaintiffs with solid claims. Moreover, an award of attorney’s fees in addition to damages discourages sellers and manufacturers from selling shoddy, defective products in the marketplace.

873 So. 2d 889 (La. Ct. App. 2004).

B. Courts Reject Proportionality Because It Undermines Enforcement Of Fee-Shifting Statutes That Protect Many Important Rights

In Riverside, the Supreme Court held that under 42 U.S.C. § 1988(b), an award of

attorneys’ fees is not “per se ‘unreasonable’ within the meaning of the statute if it exceeds the

amount of damages recovered by the plaintiff in the underlying civil rights action.” 477 U.S. at

564. In affirming an award of $245,450 fees on a $33,350 recovery, the Supreme Court pointed

out that “[a] rule of proportionality would make it difficult, if not impossible, for individuals

with meritorious civil rights claims but relatively small potential damages to obtain redress from

the courts,” which undermines the purpose of the civil rights statute. Id. at 578. “Permitting such

reductions [only because damages are small] would create an incentive to bring only those civil-

21

rights cases that would produce large damage awards. This incentive conflicts with the purposes

of section 1988.” Quesada v. Thomason, 850 F.2d 537, 540 (9th Cir. 1988).

Even where no damages may be recovered (i.e. injunctive relief), a plaintiff may still

recover a fee award. See Hensley, 461 U.S. at 436 n.11 (1983). The Second Circuit also rejected

a proportionality requirement, recognizing the important deterrent effect of attorney’s fee awards

in constitutional rights cases:

A plaintiff who is successful in establishing certain practices as violative of his constitutional rights will deter officials from continuing this conduct, and thereby help assure that others are not subjected to similar constitutional deprivations. This deterrent effect of successful §1983 actions is wholly independent of the relief which the plaintiff seeks or is ultimately awarded, and therefore it is inappropriate to condition attorney’s fee awards on the nature of the relief granted.

McCann v. Coughlin, 698 F.2d 112, 129 (2d Cir. 1983).

In Harman v. City & County of San Francisco, the court rejected a proportionality rule in

a case arising under the Fair Labor Standards Act. The court affirmed an award of over $1.1

million in attorney fees, though the award far exceeded the $30,300 in compensatory damages

received by the employee. 158 Cal. App. 4th 407 (Ct. App. 2007). The Court explained:

A rule that limits attorney’s fees in civil rights cases to a proportion of the damages awarded would seriously undermine Congress’ purpose in enacting [42 United States Code section] 1988. Congress enacted [42 United States Code section] 1988 specifically because it found that the private market for legal services failed to provide many victims of civil rights violations with effective access to the judicial process. [Citation.] These victims ordinarily cannot afford to purchase legal services at the rates set by the private market.... Moreover, the contingent fee arrangements that make legal services available to many victims of personal injuries would often not encourage lawyers to accept civil rights cases, which frequently involve substantial expenditures of time and effort but produce only small monetary recoveries. [Citation.] ‘A rule of proportionality would make it difficult, if not impossible, for individuals with meritorious civil rights claims but relatively small potential damages to obtain redress from the courts.’

Id. at 420 (citing Graciano v. Robinson Ford Sales, Inc., 144 Cal. App. 4th 140, 164 (Ct. App.

2006), quoting Riverside, 477 U.S. at 576-578.).

22

Legislatures have set low statutory damages in many consumer protection statutes

enacted to prohibit abusive practices or mandate fair dealing. The amount of damages available

should not bear on the amount of fees necessary to accomplish the substantive goals of those

laws. The Fourth Circuit noted that “[s]ince there will rarely be extensive damages in [a Fair

Credit Reporting Act] action, requiring that attorney’s fees be proportionate to the amount

recovered would discourage vigorous enforcement of the Act.” Yohay v. City of Alexandria

Employees Credit Union, Inc., 827 F.2d 967, 974 (4th Cir. 1987). The Court of Appeals for the

District of Columbia explicitly rejected a proportionality rule in determining fee awards.

Williams v. First Gov’t Mortgage & Investors Corp., 225 F.3d 738, 746-47 (D.C. Cir. 2000)

(holding attorney’s fees award in the amount of $199,340 against home refinancing lender for

violation of District of Columbia Consumer Protection Procedures Act (CPPA) was reasonable,

even though it was disproportionate to borrower’s CPPA damages award of $25,200; given

public policy interests served by CPPA, court would decline to read rule of proportionality into

the statute, as such rule would make it difficult, if not impossible, for individuals with

meritorious claims but relatively small potential damages to obtain redress from courts. Only

hours on unsuccessful TILA claims that “were distinct in every respect” would be excluded).

Similarly, courts have considered the importance of vindicating the goals of the Truth in

Lending Act (“TILA”), which “unequivocally entitles a successful [ ] plaintiff to an award of

attorney’s fees, and leaves only the amount of the award to the court’s discretion.” de Jesus, 918

F.2d at 233. “The court must, however, upon proper proof, award attorney’s fees to a prevailing

plaintiff sufficient to vindicate the Congressional goal of creating a system of private attorneys

general to aid in effective enforcement of the [Truth in Lending] Act.” Id. at 235 (citations

omitted). In Nigh, the Fourth Circuit denied Koons’ request to reduce the fee award to reflect the

23

reduction in damages from $24,192.80 requested to $1,000 awarded, where the plaintiff obtained

the maximum $1,000 recovery available under the act. The Court noted that “TILA awards will

rarely be enough to cover the costs of representation; in most cases, they scarcely will cover the

costs of filing a claim. . . . Only with fee-shifting does the prosecution of a typical individual

TILA claim become an economically sensible possibility.” Nigh, 478 F.3d at 188.

Thus, prosecution of individual consumer fraud claims “would be frustrated if the courts

were required to measure a fee award against the limited amount of recoverable damages in a

consumer fraud claim.” L’Esperance v. Benware, 830 A.2d 675, 684 (Vt. 2003); see Camacho v.

Bridgeport Fin.,, Inc., No. C 04-00478 2008 WL 3992715 at *1 (N.D. Cal. Aug. 25, 2008)

(holding “Plaintiffs correctly argue that a reduction in fees in a Truth in Lending Act Claim

cannot be justified on the basis of ‘proportionality.’ The Supreme Court has rejected the notion

that attorney’s fees ‘should necessarily be proportionate to the amount of damages a civil rights

plaintiff actually recovers.”) (citing Riverside, 477 U.S. at 574).

The Second Circuit affirmed a fee award of over $5.5 million when damages were only

$3 under the Clayton Act. “What is important is encouraging the detection and cessation of

anticompetitive behavior, not the amount of damages found. Because of the importance of the

policy of encouraging private parties to bring antitrust actions, recovery of their reasonable

attorney’s fees must be sustained regardless of the amount of damages awarded.” U.S. Football

League v. Nat’l Football League, 887 F.2d 408, 412 (2d Cir. 1989).

The fact that Congress chose to limit FDCPA statutory damages to $1,000 per violation,

even when a plaintiff has no damages, is hardly a basis for a court to disparage private litigants

or their attorneys or to abandon effective enforcement of important protections. To do so would

usurp the role of Congress. As noted by the Second Circuit, “It is clear that Congress painted

24

with a broad brush in the FDCPA to protect consumers from abusive and deceptive debt

collection practices, and courts are not at a liberty to excuse violations where the language of the

statute clearly comprehends them.” Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22, 27-

28 (2d Cir. 1989). The Second Circuit affirmed the lower court finding that plaintiff’s recovery

was a ‘substantial success’ where the award of $35,000 fell short of $7.13 million demanded by

plaintiff, and rejected a proportionality requirement in awarding attorney’s fees. Lunday v. City

of Albany, 42 F.3d 131, 134-35 (2d Cir. 1994) (affirming fee award).

More recently, the Second Circuit stated that “by providing for statutory damages and

attorneys fees for successful plaintiffs, the [FDCPA] permits and encourages parties who have

suffered no loss to bring civil actions for statutory violations.” Jacobson v. Healthcare Fin.

Servs., Inc., 516 F.3d 85, 96 (2d Cir. 2008); see generally Robey v. Shapiro, Marianos & Cejda,

L.L.C., 434 F.3d 1208, 1210-12 (10th Cir. 2006) (affirming the authority of Congress to create

the FDCPA non-damage based statutory scheme, and collecting supporting cases). Similarly, the

Third Circuit held that “attorney’s fees should not be construed as a special or discretionary

remedy; rather, the [Fair Debt Collection Practices] Act mandates an award of attorney’s fees as

a means of fulfilling Congress’s intent that the Act should be enforced by debtors acting as

private attorneys general.” Graziano v. Harrison, 950 F.2d 107, 113 (3d Cir. 1991).

The Seventh Circuit rejected a similar challenge. The district court had reduced the

lodestar rate, reasoning that “few paying clients would be inclined to pay voluntarily an hourly

rate of $275 to seek damages not exceeding $1,000.” Tolentino v. Friedman, 46 F.3d 645, 652

(7th Cir. 1995). The Seventh Circuit reversed that reduction, rejected its rationale, and instead

found “a high degree of success” because “Tolentino prevailed on summary judgment, thereby

25

protecting her rights under the statute, and has recovered the maximum statutory damages

allowed to an individual plaintiff.” Id. at 653.

Defendant’s proposed type of judicial usurpation of the legislative function was also

rejected by the Eleventh Circuit when it vacated a multiplier-based fee, holding that the use of a

multiplier was an attempt to impose a prohibited rule of proportionality that “diminish[es] the

public benefit” by “mak[ing] the fee depend upon substantiality of monetary relief.” Cullens v.

Georgia Dep’t. of Transp., 29 F.3d 1489, 1494 (11th Cir. 1994); accord Riverside, 477 U.S. at

576-78. The Eleventh Circuit likewise rejected a lower court’s conclusion that Congress’s

decision to cap statutory damages at $1,000 renders any greater fee award “ridiculous, teetering

on the point of absurdity.” Moton v. Nathan & Nathan, P.C., No. 08-12337, 2008 WL 4747423

at *1 (11th Cir. Oct. 28, 2008) (unpublished).

In a case arising under a civil RICO statute, the Third Circuit refused to use a

proportionality rule in upholding attorney fees and costs in excess of $60,000 when damages

were $2,661. It was clear that the fee-shifting provision in the statute “was designed to

encourage private litigants to promote the policies underlying the substantive legislation.”

Northeast Women’s Center v. McMonagle, 889 F.2d 466, 474 (3d. Cir. 1989). The Court

declined to usurp the legislative role, noting that if the legislature believed attorney fees should

only be awarded in proportion to damages, “it could have easily eliminated or modified the

attorneys’ fees provision.” Id.

Permissive language in the fee-shifting provision of the Storage Tank and Spill

Prevention Act was interpreted liberally so the section “has the requisite ‘teeth’ to help realize

the STSPA’s goals of preventing, providing liability for, and collecting costs of cleanup related

to storage tank spills in the Commonwealth.” Krebs v. United Ref. Co. of Pa., 893 A.2d 776, 788

26

(Pa. Super. Ct. 2006). Even if the statute itself makes an award of fees discretionary, the “court

must nevertheless exercise its discretion within the framework of the legislative purpose behind

the enactment of the fee-shifting provision.” Id. “[U]nder all federal fee-shifting statutes,

reasonable attorneys’ fees were essentially calculated by multiplying the number of hours

reasonably expended on the litigation times a reasonable hourly rate,” with a “strong

presumption” of reasonableness. Id. at 790. Thus, success in a case is not just defined in

monetary terms. Id. at 791.

C. A Fee Award Based On An Attorney’s Lodestar Is Reasonable Even If Not All Claims Succeed

Importantly, because of the need to provide an incentive, courts may even award fees to

compensate the full amount of time reasonably spent on the litigation when plaintiffs do not

succeed on all of their claims. “Courts should recognize that reasonable counsel . . . in much

litigation, must often advance a number of related legal claims in order to give plaintiffs the best

possible chance of obtaining significant relief.” Hensley, 461 U.S. at 448 (Brennan, J.

concurring in part and dissenting in part); Greene, 529 F. Supp. at 188 (“This court would defeat

the legislative intent of the fee provisions of the statutes here involved, which is to encourage

vindication of important rights on the part of plaintiffs who ordinarily could not afford to

ventilate their claims, were it to deny recovery merely because the fee-generating claim was not

reached.”).

In Nigh, the Fourth Circuit upheld an award of fees for the full amount of litigation after a

large damages award was significantly reduced on appeal. The court found:

In this case, Nigh’s action was successful. True, many of the claims he originally brought were dismissed, but a jury found Koons liable to Nigh under the TILA, and its finding has not been upset by any court since. Nigh recovered not a trifle,

27

but the maximum amount permissible under the statute. Simply put, Nigh is the prevailing party.

478 F.3d at 186. Similarly, in Cooper, the Court held:

Full compensation for hours expended does not require plaintiff to prevail on every claim. For example, where all claims are closely related because based on common facts or related legal theories, a court is not obligated to determine which hours were spent on which claims. A contrary rule would be unworkable, and would discourage innovative litigation.

814 F.2d at 950-51 (citations omitted).

While the court may appropriately reduce the lodestar for time spent litigating

unsuccessful claims, Hensley further cautioned against using “a mathematical approach

comparing the total number of issues in the case with those actually prevailed upon,” which

would deter a plaintiff from bringing meritorious claims. 461 U.S. at 435 n.11. As Hensley

explains,

In [some] cases the plaintiff’s claims for relief will involve a common core of facts or will be based on related legal theories. Much of counsel’s time will be devoted generally to the litigation as a whole, making it difficult to divide the hours expended on a claim-by-claim basis. Such a lawsuit cannot be viewed as a series of discrete claims. Instead [the court] should focus on the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation.

Id. at 435. See First Gov’t Mortg. & Investors Corp., 225 F.3d at 746 (holding time spent on

unsuccessful claims is only excluded if it is “distinct in all respects” from the successful claims.);

see also Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990) (finding the defendant bears

the burden to show that time spent on unsuccessful claims are “distinct in all respects”); Clarke

v. Whitney, 3 F. Supp. 2d 631, 634 (E.D. Pa. 1998) (same).

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D. Ability To Pay And Actual Cost Of Representation Are Irrelevant To Establishing What Is A Reasonable Attorney’s Fee

The nature of the fee arrangements between attorney and client is irrelevant. The public

policy behind shifting the full amount of attorney’s fees to defendants is so strong that they are

awarded even where the plaintiff is being represented at no charge. The Supreme Court held:

In determining the amount of fees to be awarded, it is not legally relevant that plaintiffs counsel . . . are employed by . . . a privately funded non-profit public interest law firm. It is in the interest of the public that such law firms be awarded reasonable attorneys fees to be computed in the traditional manner when its counsel performs legal services otherwise entitling them to the award of attorneys fees.

Blum v. Stenson, 465 U.S. 886, 895 (1984).

Fees are also proper in cases involving large damages awards, for which an attorney may

be willing to undertake representation pursuant to a contingency agreement. In Blanchard, the

Court wrote:

Respondent cautions us that refusing to limit recovery to the amount of the contingency agreement will result in a “windfall” to attorneys who accept § 1983 actions. Yet the very nature of recovery under § 1988 is designed to prevent any such “windfall.” Fee awards are to be reasonable . . . .

489 U.S. at 96 (emphasis added). In Herrold v. Hajoca Corp., an award of $47,382.25 to a

prevailing plaintiff in an action brought under the Age Discrimination in Employment Act of

1967, 29 U.S.C.A. §§ 621-634, was upheld as not an abuse of discretion despite the contention

that, because of a contingent fee arrangement, the award was nearly four times as much as

plaintiff was obligated to pay his counsel. 864 F.2d 317 (4th Cir. 1989).

Thus, courts have soundly rejected defendant’s proportionality arguments. The public

benefit served by fee-shifting statutes is not to be valued solely in monetary terms. Imposing a

proportionality requirement would undermine enforcement of the substantive rights and the

rationale of a myriad of statutes enforced through a private attorney general model.

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IV. Plaintiffs Should Not Be Penalized Where, As Here, Defendant’s Litigation Tactics—Not Unnecessary Litigation By Plaintiffs—Drive Up Fees

The lower court found that much of the fees in this case were necessitated by

Defendant’s own actions. Order at ¶46. Any excessive “disproportionality” was due entirely to

Fleetwood’s legal defense strategy. The Supreme Court has upheld fees awarded in response to

defense litigation strategies. “[T]he [defendant] cannot litigate tenaciously and then be heard to

complain about the time necessarily spent by the plaintiff in response.” Riverside, 477 U.S. at

581 n.11. Many other courts agree. In Rosie D., the court found “It is especially significant that

Defendants, as was their right, litigated this case to the hilt”. Id 2009 WL 92664 at *17.

In the Second Circuit, the court can consider the substantial effort of plaintiff’s attorney

caused by defendant’s “counsel who fought the case bitterly to the very end and even now

continue their recalcitrant posture.” Birmingham v. Sogen-Swiss Int’l. Corp. Ret. Plan, 718 F.2d

515, 523 (2d Cir. 1983). In Nigh, the Fourth Circuit affirmed fees necessary to defend a

successful Fourth Circuit ruling that was vacated by the U.S. Supreme Court. As, the Fourth

Circuit explained “[w]hen Koons chose to appeal our initial ruling, it accepted responsibility for

the reasonable attorneys’ fees Nigh would incur defending his judgment before the Supreme

Court and in subsequent proceedings.” 478 F.3d at 189.

The Eleventh Circuit has held that “[w]hile [defendant] is entitled to contest vigorously

[plaintiff’s] claim, once it does so it cannot then complain that the fees award should be less than

claimed because the case could have been tried with less resources and with fewer hours

expended.” Henson v. Columbus Bank & Trust Co., 770 F.2d 1566, 1575 (11th Cir. 1985); see

also Copeland, 641 F.2d at 904 (finding contentious litigation strategy forced Title VII plaintiff

to respond in kind); Loggins v. Delo, 999 F.2d 364, 368 (8th Cir. 1993) ($25,000 attorney’s fee

award for recovery of $102.50 in actual damages).

30

Moreover, Defendant’s Rule 68 challenge should be rejected, as previous courts have

done. In Marek v. Chesny, a § 1983 and § 1988 case, the Supreme Court held that where the

plaintiff recovered less than the defendant’s Rule 68 offer, the plaintiff could not recover

attorney fees for work performed after that offer if “the underlying statute defines ‘costs’ to

include attorney’s fees.” 473 U.S. 1, 9 (1985). Since Rule 68 does not define “costs,” “it

incorporates the definition of costs that otherwise applies to the case.” Id. at 9 n.2. In Nusom v.

Comh Woodburn, Inc., in which Fleetwood Homes of Oregon was a defendant, the Ninth Circuit

stated “[w]e hold only that a Rule 68 offer for judgment in a specific sum together with costs,

which is silent as to attorney fees, does not preclude the plaintiff from seeking fees when the

underlying statute does not make attorney fees a part of costs.” 122 F.3d 830, 835 (9th Cir.

1997).

In the statutes at issue here, attorney’s fees are defined separately from costs. Therefore,

a Rule 68 offer does not affect the trial court’s award of attorney fees. See Fegley, 19 F.3d at

1135 (citing Marek, 473 U.S. at 13, 43-44 (Brennan, J. dissenting) (noting that for “[s]tatutes

that do not refer to attorney’s fees as part of the costs. . . . [W]here an action otherwise is

governed by Rule 68, attorney’s fees that are potentially awardable under these statutes are not

subject to Rule 68 and instead are to be evaluated solely under the reasonableness standard”).

Thus, the goal of promoting settlement does not trump the goal of the legislature to encourage

enforcement through fee-shifting. See Eddy, 59 F.3d 201 (D.C. Cir. 1995) (finding an attorney’s

fee award deters noncompliance with the law and encourages settlement).

In addition, applying Rule 68 here is inappropriate because settlement should not be

coerced at the expense of accepting less protection than the law provides. If the rule were

applied, a party with superior financial power could easily take advantage of a plaintiff in a fee-

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shifting context where the plaintiff sustained a minor loss and, shortly before the trial, the

defendant makes an offer to pay the plaintiff her damages, but perhaps with no provision for

attorney’s fees or injunctive relief. Applying Rule 68 in such a scenario does not take into

account the value of any available injunctive relief.

The fee-shifting mechanism itself—not only Rule 68—encourages settlement because

defendants risk paying higher fees if they choose to litigate meritorious cases rather than to

resolve them early. See Nigh, 478 F.3d at188. Rule 68 should not be elevated over the fee-

shifting mechanism chosen by legislatures as a powerful, efficient tool for law enforcement.

Doing so would shift the burden to pay for enforcement back to the victims and society, and

defeat the goals of the entire fee-shifting enforcement mechanism.

CONCLUSION

For the reasons stated, this Court should reject a proportionality requirement and

application of Rule 68 and affirm the award of fees in this case.

Respectfully submitted,

________________________________ John W. Barrett WVA Bar No. Bailey & Glasser LLP 209 Capitol Street Charleston, WV 25301 (304) 345-6555 National Association of Consumer Advocates 1730 Rhode Island Ave., Ste 710 Washington, DC 20036 (202) 452-1989 ext. 101

32

National Consumer Law Center 7 Winthrop Square, 4th Floor Boston, MA 02110 (617) 542-9595 Attorney for Amici Curiae NACA & NCLC

Julie Nepveu DC Bar No. 458305 AARP Foundation Litigation 601 E St., NW Washington, DC 20049 (202) 434-2060 Attorney for Amicus Curiae AARP

Cathy McConnell WV Bar No. 7103 West Virginia Senior Legal Aid 235 High Street #519

Morgantown,WV 26505 (304) 296-0082 Attorney for Amicus Curiae West Virginia Legal Services

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CERTIFICATE OF SERVICE

I, John W. Barrett, do hereby certify that I have this 16th day of January, 2009, served a true and accurate copy of the foregoing document, entitled AMICI CURIAE BRIEF OF AARP, NATIONAL ASSOCIATION OF CONSUMER ADVOCATES, AND THE NATIONAL CONSUMER LAW CENTER IN SUPPORT OF PLAINTIFFS-APPELLEES, on counsel of record, via United States Mail, as follows:

Johnnie E. Brown, Esq. Bryan N. Price, Esq.

PULLIN FOWLER & FLANAGAN PLLC Post Office Box 1791

Charleston, WV 25326

David Grubb, Esq. THE GRUBB LAW GROUP

1324 Virginia Street, East Charleston, WV 25301

_______________________________ John W. Barrett Bailey & Glasser LLP 209 Capitol Street Charleston, WV 25301 (304) 345-6555