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Dzugas-Smith v. Southold Union Free School District

September 27, 2010

DEREK DZUGAS-SMITH, DONNA DZUGAS-SMITH AND STEPHEN DZUGAS-SMITH, PLAINTIFFS,
v.
SOUTHOLD UNION FREE SCHOOL DISTRICT, DEFENDANT.



The opinion of the court was delivered by: Seybert, District Judge.

MEMORANDUM & ORDER

Plaintiffs have moved for fees-on-fees under the Individuals with Disabilities Education Act, 20 U.S.C. § 1400 et seq. ("IDEA"). For the foregoing reasons, Plaintiffs' motion is GRANTED IN PART AND DENIED IN PART.

BACKGROUND

Plaintiffs are Derek Dzugas-Smith and his parents. In 2002, a neuro-psychologist diagnosed Derek as learning disabled. In response, the Southold Union Free School District classified him as learning disabled, and granting him special assistance in reading. In May 2003, the School District recommended declassifying him. Plaintiffs objected to the declassification and sought an impartial hearing. For this impartial hearing, Plaintiffs retained John J. McGrath, Esq. to represent them.

The impartial hearing concluded with the hearing officer determining that Derek was properly declassified, but ordering that Plaintiffs be reimbursed for the cost of the laptop computer they bought him. Plaintiffs appealed this decision, but Mr. McGrath did not represent them in the appeal. On appeal, the State Review Officer vacated the decision to declassify Derek, finding that Defendant had committed numerous procedural errors in declassifying him, and remanded for further proceedings. A second impartial hearing took place. This time, the hearing officer sided with the Plaintiffs, concluding that Derek suffered from a speech or language impediment. Defendant appealed, but the hearing officer's decision was upheld. Plaintiffs then sued under IDEA to recover Mr. McGrath's attorney fees and costs incurred in connection with his representation of them during the first impartial hearing. Under IDEA, the Court "in its discretion, may award reasonable attorneys' fees as part of the costs" to "a prevailing party who is the parent of a child with a disability." 20 U.S.C. § 1415(i)(3)(B)(i)(I). Initially, Plaintiffs demanded $42,980 in attorney's fees and costs. See Compl. at p. 7. On April 2008, Plaintiffs filed an Amended Complaint which increased their demands to $81,163.35 in attorney's fees and $2,750 in reimbursement for the cost of the laptop computer. On September 25, 2008, Defendant served a FED. R. CIV. P. 68 Offer of Judgment, in which they agreed to: (1) pay $42,980 in attorney's fees and costs to Mr. McGrath; (2) pay $8,000 in attorney's fees to Ann Richmond, Esq., who represents Plaintiffs in this action; and (3) pay Plaintiffs $2,350 for the computer, provided that Plaintiffs return it to Defendant. On October 6, 2008, Plaintiffs rejected this Offer of Judgment.

On September 17, 2009, the Court conducted an evidentiary hearing. After the hearing, the Court awarded Plaintiffs $13,524.75 in attorneys' fees and costs and $2,150 for the cost of the laptop computer. In so ordering, the Court severally discounted Mr. McGrath's requested fees because, among other things: (1) he achieved no direct success himself; (2) while his work contributed to Plaintiffs' ultimate success on appeal, the Court believed it was not primarily responsible for this success; and (3) at the time he represented Plaintiffs, he had limited experience as an IDEA lawyer, and thus could not justify the rates he sought, which substantially exceeded the rate Plaintiffs agreed to pay him. The Court's award did not require Plaintiffs to return the computer to Defendant.

Plaintiffs now seek $36,723.51 in attorney's fees and costs for bringing this action, and an additional $1,800 in attorney's fees for bringing this fees-on-fees motion.

DISCUSSION

IDEA permits prevailing parties to recover attorney's fees and costs incurred to enforce a disabled child's rights under the statute. See 20 U.S.C. § 1415(i)(3)(B)(i). IDEA also permits prevailing parties to recover fees incurred in seeking attorney's fees under IDEA, sometimes known as a fees-on-fees motion. See A.R. ex rel. R.V. v. New York City Dept. of Educ., 407 F.3d 65, 83 (2d Cir. 2005).

A prevailing party's right to attorney's fees rests in the Court's "discretion." 20 U.S.C. § 1415(i)(3)(B)(i). And, even if the Court chooses to award fees, it may reduce the fees awarded for numerous reasons, depending on a case's facts.

Here, the Court finds that Plaintiffs are entitled to fees-on-fees. However, Plaintiffs are not entitled to anywhere near what they seek as a fees-on-fees award.

To begin with, on September 25, 2008, Defendant conveyed a FED. R. CIV. P. 68 Offer of Judgment. When applied to fee shifting statutes, an Offer of Judgment "precludes a plaintiff from recovering attorneys' fees incurred after the making of the Rule 68 offer," if "the plaintiff does not ultimately receive a "more favorable judgment." Boisson v. Banian Ltd., 221 F.R.D. 378, 380 (E.D.N.Y. 2004) (interpreting Marek v. Chesny, 473 U.S. 1, 12, 105 S.Ct. 3012, 87 L.Ed. 2d 1 (1985)); FED. R. CIV. P. 68(d).*fn1

Here, Defendant's Offer of Judgment entitled Plaintiffs to $45,330, plus $8,000 in attorney's fees for bringing this action. Plaintiffs rejected this Offer, and ultimately collected only $15,674.75. Thus, Defendant argues, Plaintiffs did not receive a "more favorable judgment," and cannot recover any attorney's fees post-dating the September 25, 2008 Offer of Judgment. In response, Plaintiffs argue that "it cannot be disputed that the Court's no-strings-attached judgment was more favorable," because the Court did not require Plaintiffs to return the computer they purchased for their son. Plaintiffs' argument is ridiculous. As the Court found, the laptop computer was worth $2,150 when purchased. It has surely depreciated by now. Plaintiffs (and/or Mr. McGrath) could have purchased several dozen laptop computers with the roughly $30,000 they left on the table by not accepting Defendants' Rule 68 Offer. It follows then that Plaintiffs did not receive a more favorable judgment than the rejected Offer of Judgment, so they cannot collect any fees post-dating September 25, 2008, including fees incurred in making this motion.

Considering Plaintiffs' fee request only to the extent it pre-dates the Offer of Judgment, Plaintiffs request $29,418.35 in fees, representing 78.93 hours at $350 per hour, 8.5 hours of travel time at $175 per hour, and $305.35 in disbursements. Richmond ...


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