The Fifth Circuit Court of Appeals has held that when it becomes necessary to secure out-of-district counsel to adequately represent a civil rights plaintiff, the prevailing rates charged by that firm are the starting point for the lodestar calculation for an award of attorney’s fees. This ruling is an exception to the usual rule that attorney’s fees will be judged by the prevailing rate in the jurisdiction where the court is located.
McClain v. Lufkin Industries Inc. is a Title VII class action employment discrimination case. The Plaintiffs presented unrebutted evidence that it was necessary for them to retain counsel outside of the Eastern District of Texas–the location of the suit. No other counsel was present in the location with the resources to handle the size and nature of the lawsuit; accordingly, local counsel for the plaintiffs retained a California law firm to help with the case. The district court rejected consideration of the California firm’s $650 hourly rate, which was the prevailing rate in the San Francisco Bay Area, and awarded $400 per hour for the partners at the California firm.
The Fifth Circuit noted the consistent precedent from that circuit that the "prevailing rate in the community" refers to the community where the district court is located. The court also observd that other circuit courts have allowed out-of-district counsel to recover fees at rates in their home districts under limited circumstances. Based upon the unrebutted evidence, the Fifth Circuit held that the district court "clearly erred" in finding that local attorneys were available to assist in the representation of the plaintiffs, and the court held that the attorneys could recover fees using the rates in their home district because they had proven that there was no counsel available locally to assist the plaintiffs. The court’s opinion may be found here.