author: FRYE, Judge:

text:
    Stephanie E. FORSBERG, individually and on behalf of all similarly situated persons, Plaintiff, v. PACIFIC NORTHWEST BELL TELEPHONE CO., a Washington corporation, Defendant.
    Civ. No. 84-1401-FR.
    United States District Court, D. Oregon.
    July 12, 1985.

      Dan O’Leary, Robert K. Udziela, Pozzi, Wilson, Atchison, O’Leary & Conboy, Henry Kantor, Delo, Kantor & Stamm, Portland, Or., for plaintiff.
    Lester V. Smith, Jr., Kenneth E. Jernstedt, David H. Wilson, Jr., Corbett Gordon, Bullard, Korshoj, Smith & Jernstedt, P.C., Portland, Or., for defendant.
   ORDER

FRYE, Judge:

In the matter before the court, plaintiff Stephanie E. Forsberg moves the court to reconsider its ruling of March 29, 1985, 623 F.Supp. 117, joining the Communications Workers of America and several CWA Locals (the Union) as parties defendants pursuant to Fed.R.Civ.P. 19(a). In the alternative, plaintiff moves the court for an order realigning the Union as a plaintiff.

Plaintiff asks this court to reconsider its decision to join the Union as defendant because the joinder creates a conflict of interest for plaintiff’s counsel in that the Union has agreed to cover certain costs of plaintiff’s case and has retained plaintiff’s counsel. Plaintiff contends that joining the Union is a substantial and unnecessary hardship to plaintiff and not in the interest of justice because no liability can be assessed against the Union. In addition, plaintiff asserts that jurisdiction cannot be properly maintained against the Union because it is not named in the EEOC complaint.

Defendant opposes reconsideration of the merits of joining the Union as defendant. Defendant asserts that it is proper for the Union to be a defendant in this action to accord complete relief and to avoid its being faced with potentially inconsistent obligations, one to the plaintiff and one to the Union. In addition, defendant argues that the Union would be able to avoid its Title VII responsibilities by “planting” a friendly plaintiff, providing her with funds and attorneys, and conspiring to eliminate the claims against the Union if joinder is not proper.

APPLICABLE LEGAL STANDARD

Fed.R.Civ.P. 19(a) grants the court the discretion to join parties found to be essential for a just adjudication of the impending controversy. The inquiry focuses upon the practical effects of joinder and non-joinder, and the determination is heavily influenced by the facts and circumstances of each case. Eldredge v. Carpenters 46, etc., 662 F.2d 534 (9th Cir.1981).

Rule 19 requires two separate inquiries articulated in Bakia v. County of Los Angeles, 687 F.2d 299 (9th Cir.1982):

... The first step is to consider whether non-joinder would prevent the award of complete relief, or the absentee’s interests would otherwise be prejudiced or the persons already parties would be subject to a substantial risk of double or inconsistent obligations.
. There is no precise formula for determining whether a particular nonparty should be joined under Rule 19(a). Underlying policies include plaintiff’s right to decide whom he shall sue, avoiding multiple litigation, providing the parties with complete and effective relief in a single action, protecting the absentee, and fairness to the other party____
The second step is to decide under Rule 19(b) whether “in equity and good conscience” a court should proceed without the absent party. Provident Bank v. Patterson, 390 U.S. 102, 109 [88 S.Ct. 733, 737, 19 L.Ed.2d 936] ... Rule 19(b) lists four factors to be considered in making that determination. They include an analysis of (1) the extent to which a judgment rendered without the absentee would prejudice him or existing parties; (2) the extent to which prejudice could be lessened or avoided by other measures; (3) the adequacy of a judgment rendered without the absentee; and (4) the adequacy of plaintiff’s remedies if an action is dismissed for non-joinder. In this case, litigation strategy and the effect of delay in the state courts appear to be major concerns of the parties____

Id. at 301.

ANALYSIS

In Northwest Airlines, Inc. v. Transport Workers Union of America, 451 U.S. 77, 101 S.Ct. 1571, 67 L.Ed.2d 750 (1981), the Supreme Court held that an employer found liable to its employees for a violation of Title VII and the Equal Pay Act cannot force a union to share the liability in an independent action for contribution. The Court held that there was no statutory or common law right upon which the employer was entitled to recover from the union. Relying upon that decision, other courts have dismissed the claims of employers seeking to force a union to share in the employer’s potential Title VII liability. See, e.g., Am. Fed. of St., Cty. & Mun. v. City of New York, 599 F.Supp. 916 (S.D.N.Y.1984) (employer’s counterclaims for contribution and indemnity against plaintiff/union in a Title VII action dismissed) and Anderson v. Loc. U. No. 3, Intern. Broth, of Elec., 582 F.Supp. 627 (S.D.N.Y.1984) aff'd. 751 F.2d 546 (1984), (no claim for contribution can be asserted against a union where the union and the employer are defendants in the same action).

While the issue in this case does not involve an action for contribution, the reasoning of Northwest Airlines bears upon this court’s decision. While it may be proper to join the Union for certain purposes, it is clear that the defendant-employer is not entitled to join the Union in this action in order to share any potential liability.

Plaintiff filed this action against her employer and not against the Union. The Union was not named in the EEOC charge or the right to sue letter. At this point in the litigation, the court concludes that it is not proper for the plaintiff or the defendant/employer to assert liability against the Union. This is not to say that the Union is insulated from liability for a violation of Title VII or the Equal Pay Act. This plaintiff or any other plaintiff may file the requisite charge with the EEOC and proceed against the Union.

The issue before this court then is whether it is necessary to join the Union as a defendant in this action, given the fact that it cannot be forced to share liability with the employer at this point in the litigation. This is a determination which this court must make, taking into consideration all the facts before it as well as the practical consequences of its decision.

The court is satisfied that complete relief can be afforded to this plaintiff and to any future class by ordering back pay and other relief found to be appropriate, in the event that a violation of Title VII is found. In addition, the court finds that the parties to this action will not be prejudiced by the Union’s absence, given the fact that there is currently no charge by the plaintiff of wrongdoing against the Union or any basis for the employer to hold the Union liable. The Union is therefore not an indispensible party.

However, a union may be joined where the court perceives its participation as necessary for a just adjudication. Fed. R.Civ.P. 19(a). The potential for inconsistent obligations arises when, as in this case, plaintiff challenges specific terms of employment contained within the collective bargaining agreement and appropriate relief may require revision of those terms of employment. See, Karan v. Nabisco, Inc., 78 F.R.D. 388 (W.D.Pa.1978). Under these circumstances, it may be appropriate for the court to fashion relief which will protect the interests of all parties.

IT IS THEREFORE THE ORDER OF THE COURT that the Union be realigned as a non-aligned party joined solely for the limited purposes of assuring (1) that any relief granted to the plaintiff will be binding upon the Union, and (2) that the employer will not be subject to inconsistent obligations based upon any relief this court may grant. Should facts become apparent in later stages of this litigation that the Union should be aligned as plaintiff or defendant, further action can be taken.


source: Caselaw Access Project

license: Public Domain

text:
    Stephanie E. FORSBERG, individually and on behalf of all other similarly situated persons, Plaintiff, v. PACIFIC NORTHWEST BELL TELEPHONE, CO., a Washington corporation, Defendant. Communication Workers of America (International), Communication Workers of America Local 9201, Communication Workers of America Local 9204, Communication Workers of America Local 9206, Communication Workers of America Local 9208, Non-aligned Parties.
    Civ. No. 84-1401-FR.
    United States District Court, D. Oregon.
    Oct. 22, 1985.

      Dan O. Leary, Robert K. Udziela, Pozzi, Wilson, Atchison, O’Leary & Conboy, Henry Kantor, Delo, Kantor & Stamm, Portland, Or., for plaintiff.
    Lester V. Smith, Jr., Kenneth E. Jernstedt, David H. Wilson, Jr., Corbett Gordon, Bullard, Korshoj, Smith & Jernstedt, P.C., Portland, Or., for defendant.
   ORDER

FRYE, Judge:

In the matter before the court, defendant, Pacific Northwest Bell Telephone Co., moves pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss plaintiff's Equal Pay Act claim in her second amended complaint. Defendant asserts that plaintiff has failed to allege facts satisfying the “establishment” element of her Equal Pay Act claim.

BACKGROUND

On March 29, 1984, this court granted defendant’s motion to dismiss plaintiff’s complaint with leave to amend. The court addressed the “establishment” requirement under the Equal Pay Act in addition to other issues and stated:

This court recognizes that a claim under the Equal Pay Act is generally subject to the ‘single establishment’ limitation defined in 29 C.F.R. § 800.108 and discussed in Bartelt v. Berlitz School of Languages of America, 698 F.2d 1003, 1005-1007 (9th Cir.1983). Equal Pay Act claims must ordinarily be presented and proven within a single establishment. However, the definition of ‘establishment’ contained in the EEOC regulations is not without reservation. The definition states that ‘each physically separate place of business is ordinarily considered a separate establishment.’ 29 C.F.R. § 800.108. While the court will not permit this definition to defeat the spirit and purpose of the Equal Pay Act, the limitation is applicable where special circumstances are not presented. Plaintiff in this action has failed to allege any special circumstances which would obviate the single establishment limitation. This issue should be addressed if plaintiff repleads the Equal Pay Act claim.

Opinion and Order at 13 and 14.

In her second amended complaint plaintiff now alleges at page 2, lines 11-15:

“As the conduct of defendant as alleged herein affected and affects groups of defendant’s employees on a company-wide basis, without distinguishing among geographically separate locations, special circumstances exist which justify consideration of defendant’s entire business operations as a single establishment for the purposes of this case.”

Defendant claims that this allegation is not sufficient to satisfy the “establishment” requirement of plaintiff’s prima facie case and moves to dismiss the Equal Pay Act claim.

APPLICABLE STANDARD

Defendant’s motion to dismiss will not be granted unless it appears beyond doubt that the plaintiff can prove no set of facts in support of her claim which would entitle her to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). In making this determination under Fed.R.Civ.P. 12(b)(6), the court is limited to consideration of the facts that appear on the face of the complaint.

ANALYSIS AND CONCLUSION

Plaintiff relies upon AFSCME, AFL-CIO v. County of Nassau, 609 F.Supp. 695 (D.C.N.Y.1985) in support of her claim that physically separate workplaces can constitute a single establishment under the Equal Pay Act if there is a significant functional relationship between the work of the employees in various location. The court is AFSCME explained:

Recognizing the practical problems inherent in a rigid geographic interpretation of ‘establishment,’ the courts in recent years have adopted a more functional approach in determining the relevant establishment for employers with physically dispersed operations. Several courts have found that operations spread throughout numerous physical locations can constitute a single establishment for purposes of the EPA. See Marshall v. Dallas Independent School District, 605 F.2d 191 (5th Cir.1979) (a school district operating 182 schools is a single establishment); Brennan v. Goose Creek Consolidated Independent School District, 519 F.2d 53 (5th Cir.1975) (a school district operating thirteen schools is a single establishment); Grumbine v. United States, 586 F.Supp. 1144, 34 FEP Cases (BNA) 847 (D.D.C.1984) (the entire federal civil service is a single establishment). Even in the recent cases which held that a single physical place of business is the relevant establishment, the courts acknowledged that physical proximity is just one factor bearing on the establishment determination. Alexander v. Univ. of Michigan-Flint, 509 F.Supp. 627, 629 (E.D.Mich.1980); Wetzel v. Liberty Mutual Insurance Co., 449 F.Supp 397, 407 (W.D.Pa.1978). ‘More important, however, is the amount and degree to which physically separate places of business interact.’ Alemnder, 509 F.Supp. at 629.

609 F.Supp at 705.

The court in AFSCME concluded that physically separate work places can constitute a single establishment under the Equal Pay Act if there is a significant functional relationship between the work of the employees in the various locations. 609 F.Supp at 607.

The defendant argues that plaintiff’s allegation in her second amended complaint is not adequate even under the AFSCME case, but that even if it is adequate, the AFSCME ruling should be limited to cases involving public employers.

The defendant in the AFSCME case was a public employer, but the reasoning of the court in that case applies equally to private employers. The defendant has not convinced this court that there is any reason to treat private employers differently from public employers in relation to this aspect of the Equal Pay Act.

Applying the standard for dismissal under Fed.R.Civ.P. 12(b)(6) to the present case, the court cannot say beyond doubt that plaintiff could not prove that the actions of the defendant are sufficiently interrelated between employees in various location to constitute a single “establishment” under the Equal Pay Act.

IT IS HEREBY ORDERED that defendant’s motion to dismiss plaintiff’s claim under the Equal Pay Act in plaintiff’s second amended complaint is DENIED.


author: LEE R. WEST, District Judge.

text:
    Fred M. WINNER, Plaintiff, v. Loretta CORNELIUS, as Director of the Office of Personnel Management, Joseph F. Spaniol, Jr. as acting Director of the Administrative Office of the United States Courts, and the United States of America, Defendants.
    No. Civ-85 L.W. 1103.
    United States District Court, D. Colorado.
    July 22, 1985.
    Rod W. Snow, Denver, Colo., for plaintiff.
    Hermes Fernandez, Dept, of Justice, Civ. Div., Washington, D.C., for defendants U.S. and Office of Personnel Management.
    Robert Loesche, Deputy Gen. Counsel, Administrative Office of the U.S. Courts, Washington, D.C., for defendant, the Administrative Office of the U.S. Courts.
   ORDER

LEE R. WEST, District Judge.

This matter comes before the Court on the Motion for Summary Judgment of the plaintiff, Fred M. Winner, and on the Motion to Dismiss of the defendants, Loretta Cornelius, as acting Director of the Office of Personnel Management (OPM), and the United States of America. The Court finds that the more expeditious and orderly way of resolving this dispute is to address first those portions of both motions which pertain to statutory interpretation and construction and treat both motions as governed by Rule 56, Fed.R.Civ.P. and in fact the Court has been advised orally by all parties that they have no objection to this procedure. Since both parties have submitted material outside the pleadings and since both motions require consideration of the same arguments and authorities, the ■Court finds no prejudice will result to any party from treating both motions as governed by Rule 56 or from the Court’s heretofore expressed intention to examine legislative history and certain background materials which the Court considers competent aids in ascertaining the circumstances which existed at the time the legislation involved herein was enacted. Defendant Joseph F. Spaniol, as acting Director of the Administrative Office of the United States Court (AO), has adopted plaintiff’s arguments and authorities.

Prior to August 1, 1984, the plaintiff wrote to AO and inquired about life insurance coverage for federal judges who retire/resign from office under 28 U.S.C. § 371(a). The plaintiff although aware of AO’s position on the matter was equally aware that legislation was pending which would impact on this issue. The proposed legislation was an amendment to title 5, section 8701 of the United States Code and it was enacted on July 1, 1984. By letter dated July 25, 1984, William M. Nichols, General Counsel, AO, responded to plaintiff’s several inquiries by stating that such judges, based on AO’s interpretation of this new legislation, were now entitled to continue any coverage then in force and effect without interruption or diminution.

Thereafter on August 1, 1984, the plaintiff, who was seventy years of age and who had served more than ten years, resigned the office of United States District Judge. He had in effect at that time, three types of life insurance offered under the Federal Employees Group Life Insurance (FEGLI) program: basic life insurance, standard life insurance, and optional life insurance.

After his resignation, plaintiff was advised by AO that while his basic insurance coverage could at his option either be reduced or maintained at its preresignation level, the standard and optional life insurance coverage would be reduced. This prompted plaintiff to file this action on April 19, 1985.

The defendants have argued that plaintiff is entitled to no greater life insurance benefits than any other retired federal employee. When a federal employee retires with the requisite number of years of service, he is eligible to receive an annuity equal to some portion of his former salary. Upon separation from service, the retired employee also receives a reduction in the life insurance coverage available to him under the FEGLI program.

Retired federal judges are treated somewhat differently. A judge meeting the eligibility requirements, 28 U.S.C. §§ 371(a), (c), has two options: he may retire from active service but retain the office or he may resign the office. If he chooses the former, he retains full salary, id. § 371(b), and undisputedly is entitled to all life insurance benefits. If he resigns the office, he receives an annuity equal to the salary he was receiving at the time of his resignation. Id. § 371(a).

Whether the new legislation entitles a federal judge who resigns the office to the same insurance benefits as those judges who retire but retain the office or whether his benefits are reduced in a manner similar to other federal retirees is the issue before the Court and because the Court finds that the intent of the legislature in amending section 8701(a) does not appear with reasonable certainty from the amendment itself, the Court has examined the circumstances which existed and the conditions under which Congress acted at the time section 8701(a)(5) was enacted.

Section 8701(a), which is the definitional provision of the FEGLI statutes, read in pertinent part prior to the instant amendment:

“(a) For the purpose of this chapter, ‘employee’ means—
Glenn Johnson, Chief, Division of Personnel, AO, to plaintiff (March 28, 1984)); see also Plaintiffs Exhibit 10 (a memorandum regarding diminution of life insurance coverage drafted by defendant Spaniol (March 21, 1985)).
(1) an employee as defined by section 2105 of this title____”

5 U.S.C. § 8701(a)(1). Federal judges were included in the definition of employees for purposes of insurance coverage only by this reference to 5 U.S.C. § 2105. In 1984, Congress deleted this referential inclusion by amending § 8701(a) to read:

“(a) For the purpose of this chapter, ‘employee’ means—
(5) a justice or judge of the United States appointed to hold office during good behavior (i) who is in regular active judicial service, or (ii) who is retired from regular active service under section 371(b) or 372(a) of title 28, United States Code, or (iii) who has resigned the judicial office under section 371(a) of title 28 with the continued right during the remainder of his lifetime to receive the salary of the office at the time of his resignation____”

5 U.S.C. § 8701(a)(5), as amended by the Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub.L. No. 98-353, § 205.

In response to plaintiff’s argument that the amendment permits him to be eligible to continue to receive insurance benefits equal to those benefits received by both active judges and those judges who have retired but retained the office, the defendants have argued that Congress by making explicit what heretofore had been implicit in amending section 8701(a) did no more than clarify that federal judges are eligible for FEGLI coverage; that eligibility for coverage does not determine the extent of coverage; that questions concerning coverage are resolved by referring to other statutory sections within this title, see, e.g., 5 U.S.C. §§ 8706, 8714a, 8714b, and 8714c, as well as 28 U.S.C. § 371(a); and that the legislative history that does exist demonstrates conclusively that Congress did not intend to permit retired federal judges to maintain their FEGLI coverage in the same manner as active judges or judges who have retired but retained the office.

The following excerpts not only set forth the interpretations given to the legislation both prior to and after its enactment by the federal agencies involved but also reveal the actions of the proponents as well as authors of the amendment in securing its passage and their subsequent beliefs that the legislation accomplished its intended purpose.

On June 21, 1983, Donald J. Devine, then Director of the OPM, wrote to David A. Stockman, Director, Office of Management and Budget, setting forth as requested the views of OPM on Senate Bill 1013, the Bankruptcy Court and Federal Judgeship Act of 1983. Director Devine wrote with regard to this bill which also purported to impact on the insurance policies of federal judges who resign under section 371(a) that OPM

“strongly objects to including in the definition of ‘employee’ for FEGLI purposes a judge who has resigned his office with the right to salary continuation. Such an individual is deemed to be an employee retired under a civilian retirement system for Federal employees. Therefore, he is treated like any other retired employee under the FEGLI program. If he has had FEGLI coverage for the 5 years of service immediately preceding retirement or, if less than 5 years, since his first opportunity to enroll, a retired employee may continue his FEGLI coverage after retirement, but his coverage begins to reduce at age 65. If retired judges were defined as ‘employee’ under the FEGLI law, their coverage would never reduce. The Office of Personnel Management opposes offering FEGLI to retired judges on more favorable terms than to retired employees generally.”

Plaintiff’s Exhibit 9(a), at 3 (emphasis added).

The Court is aware that the defendants have argued that this letter reflects at most an internal administrative decision, preliminary in nature, and that Director Devine’s comments on Senate Bill 1013 are not controlling. The Court, of course, has not read the letter in isolation or relied solely on the same to ascertain the problem that section 8701(a)(5) was to remedy. Since Senate Bill 1013 contains sections identical to sections contained in the Bankruptcy Amendments and Federal Judgeship Act of 1984, the Act presently under examination, the Court merely considers the letter to be instructive and a competent aid in understanding the circumstances surrounding the passage of section 8701(a)(5).

Approximately a year after Director Devine’s letter to Mr. Stockman, Congress on July 10, 1984, passed the Bankruptcy Amendments and Federal Judgeship Act of 1984, and despite OPM’s objection, included within the definition of employees a judge who had resigned his office with the right to salary continuation. 5 U.S.C. § 8701(a)(5).

On July 27, 1984, William M. Nichols, General Counsel, AO, wrote to James W. Morrison, Jr., Associate Director for Compensation, OPM, and agreeing with OPM’s interpretation (as reflected in Director Devine’s letter), stated that the effect of the amendment of July 10, 1984, was

“to permit the enumerated judicial officials to maintain their Federal life insurance without interruption or diminution after retirement."

Plaintiff’s Exhibit 9(b), at 1 (emphasis added). Mr. Nichols, after setting forth what his office perceived to be a minor discrepancy in the statutory language, stated further that said discrepancy “does not undermine the legislative intent to provide retiring judges the valuable benefit of maintaining their Federal life insurance.” Id. at 2.

On September 12, 1984, Mr. Morrison responded to Mr. Nichols’ letter of July 27, 1984, and much to AO’s surprise, disagreed with AO’s interpretation of the amended statute. Mr. Morrison wrote:

“You have suggested that the effect of this amendment is to permit all of the enumerated judicial officials to retain lifetime FEGLI coverage without diminution. We, however, must conclude that this provision is a clarification of the former statutory language which implicitly included judges in the coverage of the chapter, and will not affect the status of Federal judges for FEGLI purposes.”

Plaintiff’s Exhibit 9(c), at 1. Mr. Morrison wrote further that

“[o]nce a justice or judge relinquishes the office ... the individual becomes a retired employee for FEGLI purposes and, if eligible to continue insurance, will be subject to the applicable provisions regarding reductions after age 65.”

Id. at 2.

On December 17, 1984, William E. Foley, then Director, AO, wrote to Mr. Define and requested that OPM reconsider the position articulated by Mr. Morrison. Mr. Foley wrote that

“[according to Mr. Morrison, the change in section 8701(a) was merely intended as ‘a clarification of the former statutory language which implicitly included judges in the coverage of the chapter, and will not affect the status of Federal judges for FEGLI purposes.’ He conceded that both active judges and senior judges will continue to be ‘employees’ for FEGLI purposes (and thus will be entitled to full FEGLI coverage), but he opined that when judges retire with an annuity under section 371(a), they must be deemed to be ‘retired’ for insurance purposes and suffer a reduction in coverage. We respectfully submit that this ignores the plain meaning of the new language of the section.
“An ‘employee’ as defined by section 8701(a) is automatically entitled to Federal life insurance unless coverage is specifically waived. 5 U.S.C. § 8702. Now included within the definition of ‘employee’ are three categories of Federal judges: (i) active judges; (ii) senior judges; and (iii) judges who have left office under section 371(a) with an annuity. The plain and ordinary meaning of this section, then, is unmistakably that all three judicial officers are entitled to FEGLI coverage. The insurance of an ‘employee’ diminishes only when he or she ‘retires’ on an immediate annuity, under conditions determined by your agency. 5 U.S.C. § 8706(b). We submit that a judge receiving an annuity under section 371(a) cannot properly be deemed ‘retired’ under this provision, because by definition such a judge is still an ‘employee’ under section 8701(a). That is, despite the fact that they no longer are actively working, judges receiving an annuity under section 371(a) are officially ‘employees’ under the FEGLI law, and remain eligible for full coverage. The only way such judicial officers could ‘retire’ for insurance purposes would be to ‘retire’ from section 371(a), presumably by surrendering their annuities. As long as such judges receive their annuities, however, they must for FEGLI purposes be treated in the same way as active judges and senior judges.”

Plaintiff’s Exhibit 9(d), at 1-2.

On March 6, 1984, Joseph A. Morris, General Counsel, OPM, responded to Mr. Foley’s request that OPM reconsider its position and while noting that OPM (as reflected in Director Devine’s letter of June 21, 1983, see Plaintiff’s Exhibit 9(a), at 3) first took the position that judges who retired under section 371(a) would experience no diminution in FEGLI coverage, stated that Director Devine’s position “was based on the initial reaction of Mr. Morrison and his staff resulting from an isolated reading of the amended definition.” Plaintiff’s Exhibit ((e), at 1. Mr. Morrison stated further that “[a] subsequent, more detailed analysis of the provision in the context of the complete FEGLI [has] led to a decidely different conclusion,” id., and he reaffirmed “the position that section [8701(a)(5) had] no substantive effect on FEGLI coverage for Federal judges.” Id. at 2.

The Court has also examined the legislative history set forth in the Federal Register. In the daily edition of the same is found this reference to section 8701(a)(5), herein referred to as section 205:

“Section 205 ... make[s] certain changes in section 87 of title 5 ... relating to insurance policies held by Federal judges. These changes are explained on page 29 of the Committee Report on S. 1013 (S.Rept. No. 98-55). [This] section[ ] is identical to section [ ] 403 ... of S. 1012.”

Senate Bill 1013 is the legislation on which Director Devine commented in June 1983 and Committee Report cited in the Federal Register reads in pertinent part that the proposed legislation

“makes certain changes in provisions of Title 5 ... relating to insurance policies held by Federal judges. The first change is a series of amendments to section[ ] 8701(a) ... dealing with the [FEGLI] program. It would permit a judge who chooses to retire or resign completely to convert all of his [FEGLI] coverage — both ‘basic’ and ‘optional’ — to an individual life insurance policy in the private sector if he was willing to pay the necessary premium costs of the conversion.”

Senate Committee on the Judiciary, S.Rept. No. 98-55, at 29 (accompanying S. 1013).

The defendants have relied on this portion of the Federal Register to conclude that since the 1984 Act mirrors the 1983 Act in this regard, Congress by amending section 8701(a) at most intended only to provide federal judges conversion rights at their expense. Despite this argument the Court finds that the 1984 Act was intended to accomplish much more (as was arguably the 1983 Act) and that this finding is supported by the following excerpts.

On December 7, 1982, Charles E. Simons, Jr., Chief Judge for the United States District Court of South Carolina, wrote to the plaintiff (a letter which the Court finds properly before it for all purposes) concerning the proposed legislation.

“You and I have had discussions about [FEGLI] from time to time and you have indicated an interest in having the law amended so that a fully retired or ‘resigned’ federal judge could continue to carry his optional term life insurance____
“I asked Bill Weller and Mike Remington of the Administrative Office Legislative Liaison Department to prepare a proposed amendment to Title 5 ... to take care of this matter.
“Last Tuesday I went to Washington at the invitation of the Chief Justice to meet with him and Senator Thurmond about bankruptcy legislation, with particular reference to Article 3 judges____ “At that time I gave to Dee Lide ... on the Senate Judiciary Committee, a copy of the proposed amendment dealing with amending Section 8701(a) ... to include fully resigned judges as ‘employees’ so that such judge could continue to carry his optional life insurance under the federal statutes.
“I also asked him to get Senator Thurmond to push this amendment____”

Plaintiff’s Exhibit 26. Attached to the letter is a copy of the proposed amendment which contains verbatim the language found in section 8701(a)(5) as it was enacted.

Judge Simons has also submitted for the Court’s consideration a declaration which reads at paragraph 2:

“I am familiar with the background leading up to the enactment of Section 205 ...; and I am the one who asked the Legislative Affairs Office of the Administrative Office to prepare a proposed amendment which would permit retention of all Federal Employees’ Group Life Insurance by a judge who resigned under 28 U.S.C. [§] 371(a). Some time prior to April 1, 1983, this proposed Amendment was presented to me and I submitted it to Senator Thurmond, who agreed to endeavor to have it included in the Bankruptcy Courts and Federal Judgeship Act of 1984, so that fully retired judges under § 371(a) could retain, without diminution, their full life insurance coverage on the same basis as a senior judge. Thereafter Senator Thurmond informed me that his Amendment had been incorporated in this legislation, and I ... relied upon his Amendment to accomplish its purpose.”

Declaration of Charles E. Simons, Jr. (June 11, 1985), at 112.

Attached to Judge Simons’ Declaration is a letter from Strom Thurmond, United States Senator from South Carolina and Chairman of the Committee on the Judiciary, which was written on May 31, 1985, and addressed to Judge Simons. Senator Thurmond, whose committee was responsible for drafting the legislation under consideration, wrote that

“one of the amendments [of the Bankruptcy Amendments and Federal Judgeship Act of 1984] was intended to allow fully retired judges to continue their life insurance after their retirement, without diminution.”

Also in the letter, Senator Thurmond advised Judge Simons that he had contacted defendant Cornelius and asked her to reconsider OPM’s belated shift in position and to conform to its first interpretation of the legislation, “which reflects Congressional intent.” See Plaintiff’s Exhibit 9(a), at 3 (letter from Director Devine to David A. Stockman).

The Court has also reviewed a letter written by Charles E. Wiggins, United States Circuit Judge for the United States Court of Appeals for the Ninth Circuit, on April 4, 1985, to defendant Spaniol. Judge Wiggins, after reviewing AO’s memorandum reporting on OPM’s present interpretation of the amendment, wrote:

“The conclusions of the General Counsel for OPM are discouraging. He finds that Congress failed to achieve what it specifically intended to accomplish. As you know, during the time of Congressional consideration of this issue, I was local counsel for the Federal Judges Association. One of my objectives was to secure passage of legislation continuing FEGLI coverage for judges who retire under 28 U.S.C. § 371(a). I worked closely with Bill Weller of your office to this end. Last summer, I thought we had succeeded. Unless one attributes to Congress an amendment empty of all practical meaning, one must assume that Congress shared our sense of achievement.”

Plaintiff’s Exhibit 21. Judge Wiggins has also submitted a declaration for the Court’s consideration which reaffirms his understanding that the intended purpose for the amendment as reflected in his letter to defendant Spaniol was communicated to Senator Thurmond prior to April 1, 1983. Declaration of Charles E. Wiggins 112.

The Court finds the foregoing clearly demonstrates that it was everyone’s belief prior to the enactment as well as AO’s and Congress’ belief after the legislation passed that the amendment would and did have the effect of providing coverage, without diminution, to judges who resigned under section 371(a). While this intent could arguably have been more carefully expressed in the statute, the Court finds that it is this very ambiguity which required consideration of the circumstances surrounding the legislation’s enactment. These circumstances coupled with those canons of statutory construction that Congress is presumed never to have done a vain thing and that an amendment to an existing statute is indicative of legislative intent to change existing law mandate a finding that Congress in this instance accomplished what it intended, which was providing coverage, without diminution, to judges who resigned under section 371(a).

The Court finds that the plaintiff is entitled to judgment as a matter of law on his claim that he is entitled under section 8701(a) to receive the same life insurance benefits as those judges who retire but retain the office and that there are no disputed factual questions which render summary adjudication in this instance inappropriate under Rule 56. The Court finds further that it need not address the merits of the plaintiffs claim of contractual right to coverage or the more complex issue of estoppel save to note with regard to the latter claim that substantial evidence exists in support of plaintiffs theory ■ that the government through AO may have induced the plaintiff to resign due to its assurances that his coverage would be undiminished.

Therefore, it' is ORDERED that the Plaintiffs Motion for Summary Judgment is GRANTED and judgment will be entered accordingly.

      . Ms. Cornelius was substituted as defendant under Rule 15(d), Fed.R.Civ.P., by Order of this Court on June 17, 1985.

      . See, e.g., Plaintiffs Exhibit 1 (March 3, 1983).

      . "Any justice or judge of the United States appointed to hold office during good behavior may retire from the office after attaining the age and meeting the service requirements, whether continuous or otherwise, of subsection (c) and shall, during the remainder of his lifetime, receive an annuity equal to the salary he was receiving at the time he retired." 28 U.S.C. § 371(a).

      . Federal judges who resigned lost their life insurance coverage under a long standing rule of the Civil Service Commission (now OPM) that they were no longer "employees" for insurance purposes. See Plaintiffs Exhibit 2(a), at 4 wherein William M. Nichols, General Counsel, AO, advised William E. Foley, then Director, AO, that "[a]s long ago as 1960, the [OPM] advised us that judges resigning under section 371(a) were to be regarded for life insurance purposes as retiring under an immediate annuity____ We conclude, then that the law requires termination of the life insurance of a judge resigning under section 371(a).”

      . See Plaintiffs Exhibits 3 (April 12, 1983), 4 (July 16, 1984).

      . 5 U.S.C. § 8701(a)(5), as amended by the Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub.L. No. 98-353, § 205.

      . Plaintiffs Exhibit 5 (July 25, 1984).

      . See Plaintiffs Exhibits 9 (a letter from Robert K. Loesche, Assistant General Counsel, AO, to plaintiff (March 19, 1985)), 11 (a letter from R.

      . 5 U.S.C. § 2105 defines employee inter alia as "an individual who is ... engaged in the performance of a Federal function under authority of law or an Executive act____" Id. § 2105(a)(2).

      . "Mr. Morrison's response took us by surprise by addressing a more basic question — whether the amendment to section 8701(a) was intended to permit judges who retire under section 371(a) to maintain their insurance without the diminution of coverage experienced by other civil services retirees. We had assumed that the answer to that question was clearly yes, but Mr. Morrison answered in the negative." Plaintiffs Exhibit 9(d), at 1.


author: CHARLES R. RICHEY, District Judge.

text:
    SAVE OUR CUMBERLAND MOUNTAINS, INC., et al., Plaintiffs, v. Donald P. HODEL, et al., Defendants.
    Civ. A. No. 81-2238.
    United States District Court, District of Columbia.
    July 25,1985.
    See also, D.C.Cir., 725 F.2d 1434.

      Joseph A. Yablonski, Yablonski, Both & Edelman, L. Thomas Galloway, Galloway & Greenberg, Washington, D.C., for plaintiffs.
    Jose R. Allen, Alfred T. Ghiorzi, Dept, of Justice, Washington, D.C., for defendants.
   ORDER

CHARLES R. RICHEY, District Judge.

This case is before the Court on plaintiffs’ petition for an award of fair and reasonable attorneys’ fees and costs. This action was brought over four years ago by the plaintiffs, three Appalachian citizens groups, in an effort to curb the widespread avoidance of the environmental protections set forth in the Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. § 1201, et seq. (the “Act”), through the misuse and abuse of the “two-acre” exemption to that Act. Under the “two-acre” exemption, the provisions of the Act would not apply to “the extraction of coal for commercial purposes where the surface mining operation affected two-acres or less.” 30 U.S.C. § 1278(2). Specifically, mines falling under this exemption are not required to obtain the normally required permits or pay fees into the Abandoned Mine Reclamation Fund. Further, there is no statutory requirement that such mines be inspected.

In March 1979 a regulation was promulgated by the Office of Surface Mining (“OSM”) construing the applicability of the two-acre exemption. 30 C.F.R. § 700.11(b) (1982). On November 27, 1979, OSM suspended a portion of that regulation which applied to “physically unrelated sites.” 44 Fed.Reg. 67,942 (1979). In January 1981, the Secretary of the Interior published a second two-acre rule. 46 Fed.Reg. 7,902 (1981). That second rule however was met with a series of postponements, deferrals and suspensions, until it was finally withdrawn completely.

Plaintiffs brought suit under Section 520 of the Act, which expressly provides for such “citizens’ suits” which Congress saw as a necessary back-up to the limited ability of the OSM to inspect and monitor the thousands of surface mines around the country. H.R.Rep. No. 95-218, 95th Cong., 1st Sess. 88-89 (1977). An award of reasonable attorneys’ fees and costs for these “citizens’ suits” is authorized by Section 520(d).

Count I of the plaintiffs’ Complaint alleged that the suspension and withdrawal of the second two-acre rule was arbitrary and capricious and violated the notice and comment requirements of the Administrative Procedure Act, 5 U.S.C. § 553. Counts II and III alleged that the Secretary violated the Act by failing to perform inspections, institute enforcement procedures, and collect reclamation fees at numerous mining concerns which were alleged to have been evading the terms of the Act by improperly claiming the two-acre exemption.

On July 8, 1982, this Court granted the secretary’s motion to dismiss Counts II and III for lack of venue. The parties thereupon filed cross-motions for summary judgment on the remaining Count I. By Order of October 28, 1982, 558 F.Supp. 22 (D.C.D.Col.1982), the Court dismissed Count I as moot following promulgation of a new two-acre rule by OSM. 47 Fed.Reg. 33,424 (1982). On appeal, both orders were affirmed by the Court of Appeals, 725 F.2d 1422 (D.C.Cir.1984). Plaintiffs thereupon filed a petition for rehearing en banc, which was granted. Before that rehearing was scheduled to take place, however, the Secretary waived the venue defense, and the parties jointly requested that the case be remanded back to this Court for further proceedings. The parties then engaged in lengthy settlement discussions which resulted in an agreement being signed on June 6, 1985.

The first question with which the Court must deal when acting upon a fee petition such as this is whether the petitioning party can be considered a “prevailing party” in the litigation and thus entitled to an award. Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). Clearly, such is the case here. The action succeeded completely in its two major objectives. First, the promulgation of a new two-acre rule was the direct result of this litigation being filed. It appears to the Court to be more than mere coincidence that the new rule was published on the very day that the cross-motions for summary judgment were due on Count I. Second, the settlement agreement provides for a nationwide plan to curb the abuses which had been rampant in the past by establishing a detailed and realistic timetable for identification of two-acre sites, subsequent inspection and enforcement action against the sites, and citizen monitoring to ensure the Secretary complies with the agreement. It is, of course, well settled that fees are equally appropriate when relief is obtained through settlement as when ordered by the Court. Maher v. Gagne, 448 U.S. 122, 129, 100 S.Ct. 2570, 2574, 65 L.Ed.2d 653 (1980).

The Secretary argues, however, that the plaintiffs did not prevail on Count I, in that they claim that the promulgation of the new two-acre rule was not a result of this lawsuit, but was done pursuant to a review of a wide spectrum of rules promulgated under the Act, of which the two-acre rule was but one. But the Secretary’s brief goes on to admit that this suit was “in part, a catalyst which forced the agency to issue a new rule.” Defendant’s Opposition at 10. The Court notes further that the settlement agreement provides that the regulation promulgated in August 1982 would be retroactively applied to both the collection of reclamation fees and the reclamation of minesites. Thus, it is clear that the end result is precisely that which the plaintiffs sought in their complaint under this Count — the effective reinstatement of the two-acre rule to cover the period when it was not in effect. The fact that the second two-acre rule itself was not reinstated is not controlling where, as here, the result was the same as if that rule had been so reinstated. In fact, the new rule promulgated by OSM as a result of this litigation was if anything stronger than the rule the plaintiffs sought to have reinstated.

Once entitlement has been established, the Court must apply a three-part analysis to determine the appropriate award. First, the Court must determine the number of hours reasonably expended in the litigation; second, there must be a determination of a reasonable hourly rate by which these hours can be multiplied to arrive at a “lodestar” figure; and third, the “lodestar” may, in certain instances be adjusted through the use of multipliers if merited. Blum v. Stetson, 465 U.S. 886, 104 S.Ct. 1541, 1548, 79 L.Ed.2d 891 (1984); Hensley v. Eckerhart, 461 U.S. 424, 434, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983); Copeland v. Marshall, 641 F.2d 880, 892 (D.C.Cir.1980) (en banc).

The first step of the lodestar analysis is to determine the number of hours reasonably expended by the prevailing attorneys in the litigation. During the more than four-year history of this case, two attorneys, Joseph A. Yablonski and L. Thomas Galloway, were principally responsible for prosecuting the case on behalf of the plaintiffs. Less than a hundred hours of additional work was performed by two other attorneys, Daniel B. Edelman, a partner of Mr. Yablonski, and Lee Bishop, who was active only in the very early stages of the case. Mr. Yablonski acted as lead litigator while Mr. Galloway was in charge of the substantive elements of proof as well as the settlement negotiations. The Court finds that, given the background of these two members of the bar, this division of labor was reasonable and efficient. Mr. Yablonski has a great deal of litigation experience in complex cases garnered over a period of close to twenty years. Mr. Galloway has had a coal-related practice for over ten years, and is considered on of the leading experts on the Surface Mining Act. The Secretary’s argument that it was wasteful to assign two senior partners of the caliber of Messrs. Yablonski and Galloway to this case is without merit. It is completely reasonable to utilize the talents of high quality attorneys such as these men clearly are in a case of such importance and magnitude.

Mr. Yablonski seeks compensation for a total of 410.25 hours he expended on this litigation. Mr. Galloway seeks an award based upon 711.50 hours spent working on this case. The Court finds that both these figures are reasonable given the circumstances of this case. First, this action spanned a period of over four years and involved issues of great importance and complexity. Second, of the 1121.75 total hours claimed by the two lead counsel, 318.75, or nearly 30% of that total, were spent developing the inventory necessary for this litigation to proceed. This inventory has already been compensated for by a $50,000 payment from the Secretary. Thus, the total the Court need now deal with is 803 hours, well within a reasonable number of hours which this Court can approve.

Further, the Court does not agree with the Secretary that substantial hours should be disallowed because of duplicative work between this case and the companion “megabucks” case, SOCM v. Clark, D.D.C. Civil No. 81-2134. These suits were brought and prosecuted separately. Each case presented unique issues unto itself which required separate research, briefing and presentation before the Court of Appeals, which in turn issued separate decisions. There was no suggestion at any prior stage of these actions that they be consolidated for any purpose whatsoever. Thus, two separate petitions for re-hearing were required. Not even after the Court of Appeals granted the petition in this case for re-hearing was it thought necessary by any party or by the Appeals Court to consolidate.

The Secretary then argues that the hours spent on settlement negotiations were excessive and protracted. The Court again disagrees with that allegation. There is no indication anywhere in the record that the plaintiffs’ counsel acted in anything but good faith throughout the negotiations. On the contrary, the Court is fully aware of the difficulties which plaintiffs’ counsel encountered in trying to put together a settlement agreement amenable to all sides. If the settlement negotiations were of greater length than the Secretary might have liked, a major factor in that delay was the inability of the numerous governmental entities to agree on what ought to be done to resolve the issues in the case. Thus, the Court finds that the 324.50 hours claimed for settlement negotiations are reasonable.

After a careful review of the record and the declarations submitted with the fee petition, the Court finds that all the hours claimed for Mr. Yablonski, Mr. Galloway, Mr. Edelman and Mr. Bishop are reasonable, and therefore compensable. The Court also finds the number of hours claimed for the services of law clerks and paralegals, which are largely undisputed, to be reasonable, except for the 291.25 hours claimed for Galloway paralegal work on the inventory. It was the Court’s understanding that the $50,000 payment was for the entire inventory, and not merely a down payment thereon. Therefore, these hours will be disallowed to the extent that they cause the final total of the inventory to surpass the $50,000 amount agreed upon by the parties. The Court calculates that, at the $30 an hour rate requested by the plaintiffs, a rate the Court finds fair and reasonable, a total of 218.33 hours of para-legal time spent working on the inventory will be disallowed. The remaining 72.-92 hours spent by Galloway paralegals, multiplied by the $30 an hour rate, equals $2187.60. When this figure is added to the $47,812.50 requested by Mr. Galloway as compensation for his efforts in preparing the inventory, the total equals $50,000.10 which is almost precisely the amount agreed upon by the parties. The $50,000 payment already made by the government for the inventory will be deducted out from the final amount of the total award.

The second step in the loadstar analysis is a determination of a reasonable hourly rate for each attorney involved in the litigation. Blum v. Stetson, 104 S.Ct. at 1541. Such a reasonable hourly rate is that “prevailing in the community for similar work.” Id. at 1547. For an attorney who has a customary rate at which he or she bills fee-paying clients, the prevailing community rate has been said to be that customarily charged rate. Laffey v. Northwest Airlines, 746 F.2d 4 (D.C.Cir.1984). However, for an attorney who has no customary hourly rate, the Court must look to the prevailing community rates in order to determine the appropriate hourly rate. Id.; Blum v. Stetson, 104 S.Ct. at 1546, 1547; Copeland v. Marshall, 641 F.2d at 892.

Here, Mr. Yablonski and Mr. Galloway seek a rate of $150 per hour, and Mr. Bishop a rate of $110. The Court finds these rates to be reasonable and within the bracket of prevailing rates within this community for similar work. Mr. Yablonski has over twenty years experience in the law, much of it working in highly complex matters of national importance. Mr. Galloway has been practicing for almost twelve years in a very specialized field in which he has become a noted authority and leading national expert. Because of their background and experience, they should be paid an hourly rate commensurate with prevailing community standards. Blum v. Stetson, 104 S.Ct. at 1541. For an attorney with 11 to 19 years of experience, the reasonable rate has been found to be $150. Laffey v. Northwest Airlines, Inc., 572 F.Supp. 354, 371 (D.D.C.1983), affirmed, Laffey v. Northwest Airlines, Inc., 746 F.2d 4 (D.C.Cir.1984); Thompson v. Barrett, 599 F.Supp 806, 814 (D.D.C.1984). Mr. Edelman seeks $125 an hour which is his customary billing rate. Under the Court of Appeals decision in Laffey, the Court finds this to be clearly reasonable.

Once the loadstar figure is achieved, the case law allows for that figure to be adjusted by the use of multipliers in certain very exceptional circumstances. Laffey, 746 F.2d at 13; Murray v. Weinberger, 741 F.2d 1423, 1428 (D.C.Cir.1984); Action on Smoking and Health v. Civil Aeronautics Board, 724 F.2d 211, 218 (D.C.Cir.1984); Donnell v. United States, 682 F.2d 240, 253 (D.C.Cir.), cert. denied, 459 U.S. 1204, 103 S.Ct. 1190, 75 L.Ed.2d 436 (1982). Here, the plaintiffs seek two independent multipliers. First, they seek a 20% multiplier on all work performed prior to the filing of the joint motion for remand based upon what they perceive as the exceptional risk they faced that they would never obtain compensation at all in this case. Second, they seek a 100% multiplier for the 44.75 hours logged in preparing and filing the petition for re-hearing in the Court of Appeals.

Initially, it must be noted that the case law in this area regards the loadstar as the presumptively reasonable fee to which an attorney is entitled. Hensley, 461 U.S. at 435, 103 S.Ct. at 1940; Murray, 741 F.2d at 1428. In Blum v. Stetson, 104 S.Ct. at 1541, the Supreme Court reaffirmed this principle, holding that only in exceptional circumstances will the loadstar be inadequate to fully compensate the attorneys under the meaning of the relevant statute. Id. at 1548. The Court there stated that it is a “rare case in which an upward adjustment to the presumptively reasonable fee of rate times hours is appropriate.” Id. at 1550. Thus there exists a “heavy burden” on the petitioning party to justify any upward adjustments. Id. This burden can only be met if the prevailing attorney makes a specific claim based on a particular factor and supported by specific evidence. Murray, supra at 1429. Concurrent with this burden is the duty of the Court to justify with particularity why an adjustment is needed to fully compensate the attorneys. Blum v. Stetson, 104 S.Ct. at 1548-50.

This burden appears to be particularly heavy when the requested multiplier is based on risk or contingency. In the recent decision of Blum v. Stetson, supra, the Supreme Court said: “We have no occasion in this case to consider whether the risk of not being the prevailing party ... may ever justify an upward adjustment.” Id. at 1550 n. 17. The Court of Appeals, in Murray v. Weinberger, emphasized that Blum did not expressly approve upward adjustments of the loadstar for contingency, and that, in any event, “an upward adjustment to compensate for the risk of losing ... is permissible only in an exceptional case.” 741 F.2d at 1432 (emphasis supplied).

Plaintiffs argue that this is just such an “exceptional case” envisioned by the Court in Murray. They note that when this action was filed there were no form complaints or models to be followed, nor did there exist any statistical data of any sort on which counsel's risk of not being compensated could be calculated. They also point out that they knew going in that the defendants had very strong venue and other procedural defenses. Indeed, this very Court held against them on the venue issue and was affirmed by the Court of Appeals prior to the petition for re-hearing being granted. The Defendants, on the other hand, argue that the risk plaintiffs took of non-compensation was a direct result of plaintiffs’ tactical choice in bringing this case in this district, and that, in any event, the plaintiffs are not entitled for any additional award for achieving only a procedural success.

The Court finds that the plaintiffs have sustained their burden of proof that this was an “exceptional case” under Blum and Murray. The risks of non-compensation were indeed substantial. The plaintiffs fought an uphill battle all the way until the petition for re-hearing was granted. Only then did the government agree to withdraw their venue defense and sit down to negotiate a settlement. Both this Court and the Court of Appeals found against the plaintiffs on the venue issue, thus illustrating the degree of difficulty the plaintiffs faced in having their case heard at all in this district, much less prevailing on all the issues. Thus some small upward adjustment on those hours of service prior to the remand sought here is plainly reasonable and will be allowed. However, the Court finds that 10%, rather than the 20% sought by the plaintiffs, will be sufficient to fully compensate them for the risks involved in bringing this litigation. The Court, however, will not award any multiplier to the 318.50 hours spent by Mr. Galloway on the inventory. That remains a separate item, fully compensated for by the $50,000 amount agreed upon by the parties.

The second multiplier sought by the plaintiffs is a 100% upward adjustment for the “exceptional success” they obtained in having their petition for re-hearing en banc granted in the Court of Appeals. Plaintiffs only seek to have this multiplier apply to the 44.75 hours spent actually working on the re-hearing petition. The Court agrees that some upward adjustment of these hours is appropriate in this instance. The Supreme Court in Blum, supra, held that in a rare case an upward adjustment may be warranted by virtue of exceptional results achieved. The granting of plaintiffs’ petition for re-hearing where the panel decision was unanimous is most certainly an exceptional result. The Court notes that petitions for re-hearings en banc, while often filed, are rarely granted. Indeed, one of the standards of Rule 35(a) of the Federal Rules of Appellate Procedure which relates to such applications is that “the proceeding involves a question of exceptional importance.” Thus, under the facts of this case, the hours spent on the petition for re-hearing will be adjusted upward. However, the Court does not agree with the plaintiffs that the loadstar for this work ought to be doubled. Instead, the Court will award a 50% multiplier for the exceptional success achieved on the petition.

The final item which the Court must decide is whether the plaintiffs are entitled to all of the $4,195.11 in costs and expenses which they claim. The defendant argues, without citation, that costs other than reasonable attorneys fees and expert witness fees are not compensable. However, the test for compensability turns on whether the claimed expenses are of a type routinely billed to clients, whether they are of a reasonable amount, and are adequately documented. Laffey, 572 F.Supp. at 382-83; Palmer v. Shultz, 594 F.Supp. 433, 442 (D.D.C.1983). The evidence in the record before the Court shows that these expenses claimed here are of a type routinely passed on to clients by plaintiffs’ counsel. The Court finds that, given the scope of this litigation, the amount requested is fair and reasonable and will be awarded.

Based on the forgoing discussion, the Court hereby awards plaintiffs the total amount of $147,670.96. This figure reflects the reasonable hours expended by all attorneys, para-legals and law clerks in this case multiplied by a reasonable hourly rate for each. In addition, the figure includes a 50% upward adjustment on the 44.75 hours spent on the rehearing petition, and a 10% upward adjustment for the time spent before the remand back to this Court. The figure also reflects a $50,000 deduction to take into account the payment agreed on and already paid to the plaintiffs for work done on the inventory. Finally, the figure includes $4,195.11 in reasonable litigation costs and expenses. The breakdown is as follows:

Hourly
Hours X Rate = Lodestar x Mult. = Total Fees
Joseph A. Yablonski
Pre-Appeal 104.00 $150 $15,600.00 1.1 $ 17,160.00
Appeal (except rehearing) 98.75 $150 $14,812.50 1.1 $ 16,293.75
Rehearing Petition 42.25 $150 $ 6,337.50 1.5 $ 9,506.25
Post Remand 125.00 $150 $18,750.00 $ 18,750.00
Fee Application 40.25 $150 $ 6,037.50 $ 6,037.50
Subtotal 410.25 $ 67,747.50
L. Thomas Galloway
Inventory 318.75 $150 $47,812.50 - $ 47,812.50
Pre-Appeal 29.25 $150 $ 4,387.50 1.1 $ 4,826.25
Appeal (except rehearing) 80.00 $150 $12,000.00 1.1 $ 13,200.00
Rehearing Petition 2.50 $150 $ 375.00 1.5 $ 562.50
Post Remand 246.75 $150 $37,012.50 - $ 37,012.50
Fee Application 34.25 $150 $ 5,137.50 - $ 5,137.50
Subtotal 711.50 ! 108,551.25
Hourly
Hours x Rate = Lodestar x Mult. = Total Fees
Daniel B. Edelman
Pre-Appeal 36.25 $125 $ 4,531.25 1.1 $ 4,984.38
Appeal 10.75 $125 $ 1,343.75 1.1 $ 1,478.12
Fee Application 1.00 $125 $ 125.00 $ 125.00
Subtotal 48.00 6,587.50
Lee Bishop
Pre-Appeal 50.00 $110 $ 5,500.00 1.1 6,050.00
Law Clerks and Para-Legals
G&G 72.92 $ 30 $ 2,187.60 2,187.60
Y.B.&E. 78.40 $ 30 $ 2,352.00 2,352.00
SUBTOTAL $ 193,475.85
Less Payment for Inventory ~$ 50,000.00
$ 143,475.85 ■
Costs and Expenses Reasonably Incurred $ 4,195.11
TOTAL AWARD $ 147,670.96

For the reasons set forth above, it is by the Court this 24 day of July, 1985, hereby

ORDERED that the defendant in this action remit the amount of $147,670.96 to the plaintiffs in satisfaction of the plaintiffs’ application for an award of fair and reasonable attorneys’ fees and costs.


author: GAGLIARDI, Senior District Judge.

text:
    CUISINARTS, INC., Plaintiff, v. JOHN BOOS & CO., Defendant.
    No. 84 Civ. 4262.
    United States District Court, S.D. New York.
    July 30, 1985.

      Garold E. Bramblett, Jr., Parmalee, Bollinger & Bramblett, Stamford, Conn., for plaintiff.
    Ronald P. Kananen, Vorys, Sater, Seymour & Pease, Washington, D.C., Anthony J. Casella, New York City, for defendant.
   MEMORANDUM DECISION

GAGLIARDI, Senior District Judge.

Plaintiff Cuisinarts, Inc., a Connecticut corporation, commenced this action seeking án injunction against defendant’s continued use of the name “Cuisi Cart” as a trademark in sale and distribution of one of its products, a wooden kitchen cart designed for use by gourmet home cooking enthusiasts. Plaintiff claims that use of the name “Cuisi Cart” infringes on its valid trademark registrations. Defendant John Boos & Co. (“Boos”), an Illinois corporation, claims that there is no infringement, maintaining that use of the name does not cause and is not likely to cause confusion in the mind of consumers. Boos also raises a defense of laches.

The parties have submitted a joint stipulation of facts. Trial of the remaining factual questions was held before the court on June 6,1985. The court now makes the following findings of fact and conclusions of law pursuant to Rule 52(a), Fed.R.Civ.P.

Background

Plaintiff owns a number of trademark registrations for use of the terms “Cuisinart” and “Cuisinarts” in connection with food preparation equipment, aprons, and foodstuffs. Defendant Boos uses the term “Cuisi Cart” on a kitchen cart usable with a number of kitchen appliances, including food processors and related accessories. The cart, which is wooden and has an electrical outlet strip on one side of the working surface, has the name “Cuisi Cart” branded on the front of the single drawer. No other trademark or name is used on the cart; nowhere does the name of “John Boos & Co.” appear.

Boos has produced and sold the “Cuisi Cart” in interstate commerce since on or before 1982. Cuisinarts became aware of the cart’s production in 1981. An exchange of letters followed. In September, 1981, Cuisinarts advised Boos that it considered use of the “Cuisi Cart” mark to infringe two of its trademark registrations. By letter dated December, 1981, Cuisinarts rejected a proposal by Boos to rename the cart “Cuisine Cart,” and reiterated its demand that use of the mark “Cuisi Cart” be stopped. Neither Boos nor its attorneys responded to the December letter.

During the years 1982 and 1983, Cuisinarts received no reports that use of the mark continued; no further communications were sent. In 1984, Cuisinarts learned that Boos’s use of the mark had continued unchanged during 1982, 1983, and 1984. Cuisinarts then commenced this action.

Discussion

I. Likelihood of Confusion

In deciding a claim of infringement of a valid trademark registration, the court must determine whether the allegedly infringing use is such that “an appreciable number of ordinarily prudent purchasers [will] be misled, or indeed simply confused, as to the source of the goods in question.” McGregor-Doniger, Inc. v. Drizzle, Inc., 599 F.2d 1126, 1130 (2d Cir.1979), quoting Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 47 (2d Cir.1978), cert. denied, 439 U.S. 1116, 99 S.Ct. 1022, 59 L.Ed.2d 75 (1979). In analyzing whether appreciable confusion is likely, the court must examine a number of factors, including the strength of the mark, the similarity of the marks, the proximity of the products, the likelihood that the trademark owner will “bridge the gap” between the products, actual confusion, sophistication of the buyers, defendant’s good faith in adopting the mark, and the quality of defendant’s product. Additional factors to be considered will be determined by the nature of the particular case. See Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir.), cert. denied, 368 U.S. 820, 82 S.Ct. 36, 7 L.Ed.2d 25 (1961); Thompson Medical Co., Inc. v. Pfizer, Inc., 753 F.2d 208 (2d Cir.1985); C.L.A.S.S. Promotions v. D.S. Magazines, Inc., 753 F.2d 14, 17 (2d Cir.1985).

Upon consideration of the factors outlined in Polaroid, the court finds it likely that use of the “Cuisi Cart” mark will mislead or confuse an appreciable number of consumers.

A. Strength of the Cuisinarts and Cuisinart Trademarks

“The term 'strength’ as applied to trademarks refers to the distinctiveness of the mark, or more precisely, its tendency to identify the goods sold under the mark as emanating from a particular, although possibly anonymous source.” McGregor-Doniger, Inc. v. Drizzle, Inc., supra, 599 F.2d at 1131. Cuisinarts received the first of its seven trademark registrations in 1973. Where the Patent and Trademark Office has registered a mark without proof of secondary meaning, a presumption arises that a trademark is more than simply “descriptive,” and thus is “strong.” See id., 599 F.2d at 1132; Del Laboratories, Inc. v. Alleghany Pharmacal Corp., 516 F.Supp. 777 (S.D.N.Y.1981). Other indicators of trademark strength are sales figures and advertising expenditures. See, e.g., Mushroom Makers, Inc. v. R.G. Barry Corp., 441 F.Supp. 1220, 1224 (S.D.N.Y.1977), aff'd, 580 F.2d 44 (2d Cir.1978), cert. denied, 439 U.S. 1116, 99 S.Ct. 1022, 59 L.Ed.2d 75 (1979); Del Laboratories, Inc. v. Alleghany Pharmacal Corp., supra. In this case, Cuisinarts presented unchallenged evidence of large (and increasing) sales under the Cuisinart and Cuisinarts marks, and of large advertising expenditures. For these reasons, the court finds that the Cuisinarts and Cuisinart marks are strong.

B. Similarity of the Marks

The court finds that the mark as branded on Boos’s product is very similar to the Cuisinart and Cuisinarts marks. In spelling, the mark “Cuisi Cart” differs by only one letter from the mark “Cuisinart.” Since no designation “by John Boos & Co.” appears on the cart, the word “Cuisi Cart” is not a fragment of the mark. It is the entire mark. Cf. Thompson Medical Co., Inc. v. Pfizer, Inc., supra, (“Sportsgel” is a fragment of mark Ben-Gay Sportsgel, where Ben-Gay name is used prominently on the product).

This similarity of the marks persists whether or not the court accepts the testimony that within Boos the name of the product was pronounced “Q-Z cart.” From the testimony at trial of witnesses for Boos, it is clear that pronunciation within the company would have minimal effects on consumers, since the staff of Boos has little, if any, direct contact with retail or “ultimate” customers. Virtually all sales are at wholesale.

C. Proximity of the Products

The court finds a considerable proximity between Cuisinarts’s products and Boos’s “Cuisi Cart.” Plaintiff’s products and defendant’s cart are intended to reach the “gourmet home-cooking enthusiast.” Cuisinarts’s product line stresses electrical appliances and stainless steel cookware; Boos’s cart incorporates a knife rack and stainless steel bowl, and specifically accommodates electrical appliances. Both Cuisinarts products and the “Cuisi Cart” are directed at the “high end” of the market, costing the consumer a considerable sum.

Although it is certainly true that the flat work surface of the cart could be used with appliances of a type not produced by Cuisinarts, the features which distinguish the cart from any plain counter-top or work surface make it more likely, not less, that the potential for use with an appliance such as a food processor would occur to a consumer. In this connection, the court notes that Cuisinarts has shown that retailers such as Spiegel have chosen to advertise Cuisinarts’s food processor together with the “Cuisi Cart,” even to the extent of pairing them in photographs or other artwork. A product so suited to advertising that suggests both complementarity and relatedness simply cannot be said to be competitively “distant” from Cuisinarts’s products.

D. Likelihood that Cuisinarts Would Seek to Bridge the Gap

Little evidence presented by either party addresses this issue. At this time, Cuisinarts’s primary products include electrical appliances for the kitchen and stainless steel cookware. It does not produce any wooden carts. It has, however, been asked to approve such carts in the past, and has refused to do so because of potential difficulties in quality control. Also, the court notes that Cuisinarts’s product line has expanded quite rapidly over the years, as have its sales. For these reasons, it cannot be said that the Cuisinart and Cuisinarts marks are confined to a defined subcategory of kitchen products. Thus, although the court cannot fix the probability that plaintiff would someday seek to produce (or license production of) a wooden kitchen cart, it determines that there is a real possibility that they would consider doing so.

E. Actual Confusion

It is well-settled that a plaintiff may establish the likelihood of confusion without proof of actual confusion. See McGregor-Doniger, Inc. v. Drizzle, Inc., supra, 599 F.2d at 1136. Actual confusion is, however, one of the Polaroid factors to be analyzed.

Plaintiffs do not dispute that Boos has received no reports indicating consumer confusion as to the producer of the “Cuisi Cart.” Boos’s argument that appreciable confusion therefore does not exist, however, is unconvincing because of Boos’s lack of direct contact with the ultimate consumers. Cuisinarts, on the other hand, has presented evidence suggesting that actual confusion exists. First, it has submitted as exhibits retailer advertising that fails to clearly distinguish between the two manufacturers. Second, it has presented testimony that Cuisinarts has received inquiries concerning the “Cuisi Cart” through its toll-free consumer line. Although the number of recorded inquiries is small, the court infers from the nature of the source (a telephone “hot line”) that the number of consumers who actually have been confused may be considerably larger.

F. Defendant’s Bad Faith

There is no direct evidence that Boos adopted its mark with the intent of benefit-ting from Cuisinarts’s reputation and good will. For example, it is uncontested that Boos did not submit or approve the artwork used in retailer advertising that paired the “Cuisi Cart” with a Cuisinart food processor. Some circumstantial evidence that Boos may have sought to benefit from confusion exists, however. The similarity of the marks has already been noted, as has the absence of any reference to John Boos & Co. on the “Cuisi Cart” itself. Further, Boos concedes that it was aware of the Cuisinart food processor line prior to the time it adopted the “Cuisi Cart” mark and that by September, 1981, it was aware of at least two of Cuisinarts’s trademark registrations.

Boos attempts to rebut this circumstantial evidence by testimony (1) that the product was referred to in conversation as the “Q-Z cart,” and (2) that lack of space preeluded branding of “by John Boos & Co.” on the cart itself. The court finds not credible the suggestion that Boos believed its pronunciation of “Cuisi Cart” would control retailers’ and consumers’ pronunciations and thus preclude any confusion with Cuisinarts’s products. It is not persuaded by the argument that lack of space on the cart was a problem, since apparently no attempt is made to brand the designation of other carts in Boos’s product line, e.g., “Townhouse Table”, “Chef’s Cupboard Cart,” “Americana Work Bar,” and “Party Cart,” on the products themselves.

The court thus concludes that intent to capitalize on Cuisinarts’s reputation may have played a role in Boos’s use of the term “Cuisi Cart.”

G. Sophistication of the Buyers and Quality of Products

Since the evidence is that both Boos’s “Cuisi Cart” and the primary products of Cuisinarts are high-quality products with price tags in the hundreds of dollars, there is no obvious disparity in quality such as would lead a sophisticated buyer to question that the source of the “Cuisi Cart” is Cuisinarts. Even were the presumably relatively sophisticated buyer of a “Cuisi Cart” to examine it carefully, he or she would find no help in the way of a brand, hang-tag, or other label. It would take a sophisticated and meticulous buyer indeed to closely examine the shipping boxes and infer that Cuisinarts had neither produced, licensed, nor approved the “Cuisi Cart.”

Taken together, these findings and conclusions lead the court to conclude that plaintiff has established the requisite “likelihood that an appreciable number of ordinarily prudent consumers [will] be misled.” Plaintiff, however, has failed to demonstrate the intent to trade on Cuisinarts’s good will necessary to justify an award of attorneys’ fees.

II. Laches

In addition to its claim of non-infringement, Boos defends this action by urging the court to apply the doctrine of laches.

“The existence of laches is a question primarily addressed to the discretion of the trial court.” Public Administrator v. Angela Compania Naviera, S.A., 592 F.2d 58, 63 (2d Cir.), cert. dismissed, 443 U.S. 928, 100 S.Ct. 15, 61 L.Ed.2d 897 (1979) quoting Czaplicki v. The Hoegh Silver-cloud, 351 U.S. 525, 534, 76 S.Ct. 946, 951, 100 L.Ed. 1387 (1956). In cases where the owner of a trademark seeks to enjoin use on non-competing goods of a mark which may cause confusion over their source, the court must “weigh the opposed interests in the scales of conscience and fair dealing.” Polaroid Corporation v. Polarad Electronics Corp., supra, 287 F.2d at 497 (laches properly found where plaintiff failed to sue until 1956, though it first learned of defendant’s actions in 1945 and, by 1951, was aware of large sales by defendant). Laches is less likely to be found, however, where the non-competing goods are closely related to plaintiff’s products. See generally id. The critical question is whether the defendant can show that it has been unfairly prejudiced by an unreasonable failure of the plaintiff to assert its rights. See Lottie Joplin Thomas Trust v. Crown Publishers, 592 F.2d 651, 655 (2d Cir.1978) (copyright); cf. De Silvio v. Prudential Lines, Inc., 541 F.Supp. 625 (S.D.N.Y.1982) (admiralty).

In this case, Boos has not shown that Cuisinarts unreasonably failed to assert its rights in a manner which unfairly prejudiced the defendant. Cuisinarts contacted Boos promptly when it first learned of Boos’s use of the mark “Cuisi Cart.” It promptly notified Boos of its rejection of a proposed name change to “Cuisine Cart.” While it is true that Cuisinarts did not contact Boos in 1982 and 1983, Cuisinarts has presented testimony that it was not aware that Boos continued to produce the “Cuisi Cart” during those years. Boos has been unable to produce any evidence of knowledge other than the fact that Boos exhibited at the 1982 and 1983 National Housewares Show in Chicago. Cuisinarts attended those fairs but specifically denies learning of the continued production and sale of the “Cuisi Cart.”

Under the circumstances, where there is little evidence of actual knowledge of the continued production, where plaintiff made known its objections in 1981, and where defendant’s failure to respond to plaintiff’s letter of December, 1981, was at least partially responsible for the delay in filing suit, the court concludes that it would be inequitable to make a finding of laches.

Conclusion

For the foregoing reasons, judgment shall be for the plaintiff. Defendant’s counterclaim is dismissed with prejudice. Submit judgment.

So Ordered.

      . The first ten pages of document no. 21 (filed Feb. 20, 1985), entitled "Joint Statement of Uncontested Facts and Statement of Contested Areas of Fact," constitute the "stipulation."

      . The stipulation of the parties is adopted by the court and incorporated by reference. Familiarity with its content is assumed.

      . Built into the kitchen cart are a knife rack and a removable stainless steel bowl quite suitable for use with a food processor. An earlier version of the cart was also equipped with a rack for food processor blades.

      . Some of Boos’s products are branded with the name of the product, followed by a reference to John Boos & Company. Other than the "Cuisi Cart,” it does not appear that any of the carts produced by Boos is branded with a particular name. The “Cuisi Cart” is the only Boos cart branded with a specific name, without any reference to Boos.

      . The first sales in interstate commerce may have been earlier than 1982. The precise timing does not affect the court’s decision.

      . Testimony at trial places Cuisinarts’s sales at approximately $60 million in 1982, and "higher" in 1984. Cuisinarts has spent more than $7 million over the years on advertising.

      . See n. 4, supra.

      . The current model of the "Cuisi Cart" has a recommended retail list price of $368. Cuisinart food processors range in price from $100 to $400.

      . See plaintiffs ex. 9 (Spiegel catalog).

      . See p. 5, supra.

      . See n. 8, supra. Cuisinarts cookware sets sell for $150 to $400 a set.

      . Such a conclusion would require an inference. There is no indication that the shipping box or any insert disavows any association with Cuisinarts.

      . Defendant’s pre-trial memorandum of law requests the court, as part of its ruling on defendant’s counterclaim, to enjoin plaintiff from asserting that "Cuisine Cart” is within the scope of its registrations. This question of use of the term "Cuisine Cart” was not fairly raised by Defendant’s counterclaim; no evidence with respect to use of that term was presented at trial. The court therefore declines to consider the issue.