E-Alert Case Updates

Recent Fourth Circuit Opinion Reminds Attorneys that You May Not be a Mathematician, but You Should Still Check Your Math

Michelle Papanicolas v. Project Execution and Control Consulting, LLC
No. 16-1398 (United States Court of Appeals for the Fourth Circuit)
by Marie Claire Langlois, Law Clerk
Semmes, Bowen & Semmes (www.semmes.com)

Available at: http://www.ca4.uscourts.gov/Opinions/Unpublished/161398.U.pdf

Ms. Papanicolas filed a complaint for unlawful sexual harassment and retaliatory discharge in the Circuit Court for Prince George’s County, Maryland against Barrington Cromuel and his company, Project Execution and Control Consulting, LLC (“PEAC”). PEAC removed the case to Federal Court and shortly after, the parties entered a confidential settlement agreement. The terms of the settlement were a dismissal of all claims, but reserved Ms. Papanicolas right to seek attorney’s fees and costs.

Ms. Papanicolas subsequently filed a motion for attorney’s fees and costs, seeking $357,092 in attorney’s fees ad $7759.75 in costs. In response, PEAC filed an opposition to the motion, arguing that counsel for Ms. Papanicolas filed and billed for frivolous pleadings without regard for economy. Moreover, PEAC further contended that the manner in which counsel had billed was in a manner which made it impossible to determine was work was actually being done. PEAC’s second argument was that the court failed to take into consideration PEAC’s financial hardship and therefore, their ability to pay such fees.

The court granted in part and denied in part Ms. Papanicolas’ motion, but ultimately granted her $313,792 in attorneys’ fees and $7759.75 in costs. PEAC appealed claiming first, that the court erred in awarding fees and costs in general, or in the alternative, that the court erred in failing to adequately reduce the award giving the inappropriate billing practices of Ms. Papanicolas’ counsel and PEAC’s ability to pay.

The Fourth Circuit issued their opinion per curiam after reviewing the briefs and chose not to hear oral arguments on the issue. In their opinion, the Court chose not to determine the appropriateness or legal strength of PEAC’s arguments, but instead relied on the “Guidelines Regarding Hourly Rates in Local Rules of the District of Maryland” which was the rule the district court used in calculations.

The court quoted ClearOne Commc’ns. Inc. v. Biamp Sys., saying that “the basic purpose of attorney fees is to indemnify the prevailing party and not to punish the losing party by allowing the winner a windfall or profit.” 653 F.3d 1163, 1185 (10th Cir. 2011)(internal quotations omitted). And after careful analysis, the Fourth Circuit found that at various times, the district court used the wrong billing rate. Specifically, hours for four of the firm’s employees, whose billing rates were only $130, were calculated with a $150 billing rate from July 2014 to 2015. Those instances of improper billing, under the guidelines, equated to unjust enrichment of Ms. Papanicolas.

For this reason, the court vacated and remanded the order with directions for the district court to recalculate the fees generated by those four employees using “a billing rate that does not exceed the rate actually charged by the law firm for those individuals[.]”