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January 16, 2009 3:37 PM

After Landmark Pro Bono Victory, Davis Wright Wants to Get Paid

Posted by Brian Baxter

In a case touted as a modern version of Brown v. Board of Education, Davis Wright Tremaine won a U.S. Supreme Court victory in June 2007 for parents fighting involuntary desegregation efforts in Seattle public schools.

But now the firm is locked in a dispute over nearly $2 million in legal fees, prompting a federal judge to ask questions and others to wonder what "pro bono" really means.

The compensation conflict stems from the Supreme Court's 5-4 ruling on June 28, 2007, in favor of the plaintiffs in Parents Involved in Community Schools v. Seattle School District No. 1.

The Court determined that public school systems could not take into account a student's race as a means of achieving and maintaining racial integration in its schools. At the same time, the Court also found that plaintiffs had not suffered an irreparable injury and that the school district's policy was conceived in good faith for the benefits of students.

Though mixed, the verdict represented a major victory for Davis Wright and litigation partner Harry Korrell, who argued the case before the Court on behalf of the plaintiffs--PIICS--and had been representing the nonprofit since it first filed suit in U.S. district court in 2000.

After the Court's ruling, in September 2007 the firm petitioned the Ninth Circuit Court of Appeals on behalf of the plaintiffs--and, by extension, on behalf of itself--for $1.8 million in attorneys fees to cover the seven years it had served as counsel for PIICS. By Davis Wright's reasoning, since the group had not sought damages, an award of attorneys fees would discourage future defendants from similar actions.

In making its argument the firm even cited a memo by Georgetown University's Pro Bono Institute supporting the collection of attorneys fees. (Hat Tip: ABA Journal.)

[Ed. Note: The Pro Bono Institute's definition of "pro bono" does not differ all that much from The American Lawyer's. Firms are encouraged to donate court-awarded fees to legal service organizations or their own charitable foundation; they may also deposit funds into an earmarked firm account to cover pro bono expenses. But as The National Law Journal reported in February 2008, the issue remains controversial.]

But the fee request rubbed some, namely the school district, the wrong way.

"The Seattle School District is currently projecting a $26 million budget shortfall," says Shannon McMinimee, assistant general counsel for the school district. "We're in the process of closing five schools in order to save money and doing a massive reduction in force. It's not in the public's interest to take at least another $2 million [for legal fees] from the school district."

McMinimee, a former associate at Dorsey & Whitney, claims that Davis Wright took the case because it got the firm exposure and it helped the firm meet its ABA-mandated pro bono hours. She also doesn't buy the argument that the firm is seeking fees as a means of making sure other firms take civil rights cases.

"Large law firms rarely take plaintiffs civil rights cases anyway," says McMinimee, calling Davis Wright's fee request disingenuous. "When I was in law school I learned that pro bono publico meant 'for the public good,'" she says. "So I just have a hard time understanding how this is for the public good and I would hope those partners at the firm with children in our schools take a good, long look at this and ask themselves if this is what they really want to do."

While McMinimee says that Davis Wright has pledged to plow the fees into future pro bono efforts, she adds that those fees would be counted as profit and put toward the billing partner's per-profit share. After that, she says, the firm can do whatever it wants with the money. Either way, she says, the school district's general fund will feel the pain.

"This is money that would be spent on teachers, books, supplies, and kids," says McMinimee, adding that the school district does not have insurance to cover any potential fee payout. "They say they want to be good corporate citizens, well, they have the opportunity to make things right here and I would hope they choose to do so."

Davis Wright's Korrell did not respond to a request for comment.

McMinimee worries about what Davis Wright's final fee bill might be. The $1.8 million request is for time spent on the case as of September 2007. Reflected in the bill, McMinimee says, are the 27 hours a summer associate spent researching whether the school district was a state or municipal actor when the answer--it's a quasi-municipal corporation--can be found in the school board's bylaws.

"They started associates working on the issue of whether they could recover fees from the district about a week after we got back from Washington, D.C., two years ago," says McMinimee, estimating that a new fee bill will likely be between $2.25 million and $2.5 million.

To put that sum in perspective--and to show that a court-approved bill from Davis Wright would certainly mean cuts in Seattle classrooms--McMinimee says the already-in-the-works closing of five schools will save the district $3.6 million over five years.

McMinimee says that the last time she reviewed the district's legal expenses for their own outside counsel in the case, it had spent roughly $435,000 to lead counsel Michael Madden of Seattle's Bennett Bigelow & Leedom and Hogan & Hartson, which assisted Madden on briefing and preparation before his oral argument before the Supreme Court. (Those bills are likely to be higher now, McMinimee says, because Madden has been fighting Davis Wright on the fee issue.)

Should fees eventually be awarded to Davis Wright, McMinimee anticipates hiring a fee analysis expert to go through and eliminate duplicative charges.

The decision on fees currently sits before U.S. district court judge Barbara Rothstein, who presided over the initial case in 2001. Besides the various motions and cross-motions, the delay in resolving the fee issue partly has to do with Rothstein spending a significant amount of time in Washington, D.C., where she serves as a director with the Federal Judicial Center.

On Monday, Rothstein issued an order denying the plaintiffs and Davis Wright an injunction, declaratory judgment, and attorneys fees, but agreeing that they were the prevailing party in the case.

With regard to the latter, Madden says that Rothstein asked both parties for additional briefing on whether there might be "special circumstances" that would preclude the awarding of attorneys fees.

Both Madden and McMinimee say this is unusual in that prevailing parties are normally automatically entitled to attorneys fees. Madden says that Rothstein's request for additional briefing might be a sign that she's thinking about not awarding fees.

"Otherwise she would have said, 'Submit your fee application and I'll rule on it,'" Madden says. "But there are other aspects of this in the sense that this is a case with no relief. There are analogous cases where the Supreme Court says that prevailing parties can be entitled to nothing."

The next round of briefings is scheduled for late January.

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