23CA1135 Nakauchi v Desbien 08-29-2024

COLORADO COURT OF APPEALS

Court of Appeals No. 23CA1135

Jefferson County District Court No. 16CV30654

Honorable Diego G. Hunt, Judge

Laurie Nakauchi,

Plaintiff-Appellant,

v.

Larry Desbien, in his official capacity as State Director of Colorado Child

Support Services, and Michelle Barnes, in her official capacity as Executive

Director of the Colorado Department of Human Services,

Defendants-Appellees.

ORDER REVERSED AND CASE

REMANDED WITH DIRECTIONS

Division I

Opinion by JUDGE WELLING

Martinez* and Taubman*, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)

Announced August 29, 2024

Dynamic Policy Law, LLC, Matthew J. Morrissey, Arvada, Colorado, for

Plaintiff-Appellant

Philip J. Weiser, Attorney General, Allison R. Ailer, Senior Assistant Attorney

General, Denver, Colorado, for Defendants-Appellees

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.

VI, § 5(3), and § 24-51-1105, C.R.S. 2024.

1

¶ 1 Plaintiff, Laurie Nakauchi, appeals the trial court’s order

awarding her attorney fees and costs. We reverse the trial court’s

order and remand the case for further proceedings consistent with

this opinion.

I. Background

A. Factual and Procedural Background

¶ 2 In February 2016, employees of Jefferson County Child

Support Services (the county employees) garnished Nakauchi’s

wages from her paycheck without notice or the opportunity to

present evidence that she had already made her child support

payment directly to the other parent. When she challenged this

action, the county employees stated that they were following a

policy set by the State of Colorado’s Division of Child Support

Services, which allowed for the garnishment of wages without

notice.

¶ 3 In April 2016, Nakauchi filed a civil rights action pursuant to

42 U.S.C. § 1983 against Jefferson County and a Jefferson County

employee in her official capacity (the county defendants) and the

State of Colorado, Larry Desbien, in his official capacity as State

Director of Colorado Child Support Services, and Michelle Barnes,

2

in her official capacity as Executive Director of the Colorado

Department of Human Services (the state defendants) (collectively,

the defendants), alleging a violation of her civil and due process

rights.

¶ 4 In September 2016, the defendants filed a joint motion to

dismiss pursuant to C.R.C.P. 12(b)(5). In June 2017, the trial court

granted the defendants’ joint motion to dismiss. Nakauchi

appealed, and a division of this court reversed, concluding that

Nakauchi’s complaint stated plausible claims for relief under the

Due Process Clauses of the Fifth and Fourteenth Amendments.

Nakauchi v. Tafoya, (Colo. App. No. 17CA1089, Apr. 12, 2018) (not

published pursuant to C.A.R. 35(e)).

¶ 5 On remand, the case proceeded to trial and Nakauchi sought

an injunction against the defendants mandating that all child

support obligors in the state be provided with notice and an

opportunity to be heard before wages could be garnished for child

support. The joint trial management order was filed on June 11,

2019.

¶ 6 The court held a three-day bench trial in July 2019. The trial

court didn’t issue its final judgment until December 13, 2020. In

3

its thirty-five-page final judgment, the trial court concluded that the

defendants had deprived Nakauchi of her due process rights when

the county employees garnished her wages without notice, but only

the state defendants were liable because the county employees were

complying with state policies when they garnished Nakauchi’s

wages. The trial court issued a statewide injunction against the

state defendants and all local child support service units under

their management, enjoining them from initiating wage

withholdings via an income withholding order (IWO) in direct pay

cases

1

without first providing concurrent notice and complying with

federal regulations.

2

¶ 7 Nakauchi appealed the final judgment, asserting that the

concurrent notice requirement imposed by the trial court was

inadequate because due process required advance notice and an

1

In a direct pay case, the court has determined that the parents

can independently manage their child support obligations, so the

court doesn’t activate an income assignment because the parents

have entered into an “alternative agreement” in which the obligor

pays the obligee directly — i.e., without going through the Family

Support Registry. See Nakauchi v. Cowart, 2022 COA 77, ¶ 14

(citing § 14-14-111.5(3)(a)(II)(B), C.R.S. 2024).

2

Although the court issued a statewide injunction, this case wasn’t

filed or pursued as a class action.

4

opportunity to be heard before any deprivation of wages could take

place. Nakauchi v. Cowart, 2022 COA 77, ¶ 2. The state

defendants cross-appealed, arguing that their original no-notice

policy was constitutional and the trial court’s injunction was thus

unwarranted. Id. at ¶ 3.

¶ 8 In a fifty-one-page opinion, a division of this court agreed with

Nakauchi, concluding that due process required advance notice and

an opportunity to challenge an IWO before any wages could be

garnished for child support obligations. Id. at ¶ 54. The division

also concluded that the county’s no-notice policy didn’t comport

with due process and the injunction needed to be modified to

require some type of predeprivation notice, but it affirmed that the

county defendants weren’t liable to Nakauchi. Id. at ¶¶ 65-67, 76.

Accordingly, the division reversed the final judgment in part and

remanded the case to the trial court to modify the injunction to

mandate that a child support obligor must receive advance notice

and an opportunity to challenge an IWO before any wage

garnishment could take place. Id. at ¶¶ 78-79.

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B. The Attorney Fees and Costs Proceeding

¶ 9 As the prevailing party in a civil rights action, Nakauchi

sought an award of her attorney fees and costs pursuant to

42 U.S.C. § 1988. Nakauchi filed an initial request for attorney fees

and costs on December 23, 2020, and a supplemental request for

attorney fees and costs on September 23, 2022.

¶ 10 In her December 23, 2020, request, Nakauchi sought

reimbursement for (1) 484.3 hours of her lead counsel’s time billed

at an hourly rate of $250; (2) 24.9 hours for her co-counsel’s time

billed at an hourly rate of $375 per hour; and (3) $2,088.27 in

costs. In total, Nakauchi sought $130,412.50 in attorney fees and

$2,088.27 in costs in her first request.

¶ 11 In her September 23, 2022, supplemental request for attorney

fees and costs, Nakauchi sought reimbursement for (1) an

additional 115.7 hours of her lead counsel’s time billed at an hourly

rate of $250; (2) 18.5 hours of paralegal time billed at an hourly

rate of $100; and (3) $870.25 for additional costs. In total, in her

second request, Nakauchi sought an additional $28,925 in attorney

fees, $1,850 in paralegal fees, and $870.25 in costs. This brought

Nakauchi’s requested total for the six years her lead counsel

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litigated this case to $161,187.50 in attorney fees and $2,958.72 in

costs.

¶ 12 In sworn affidavits attached to both requests for attorney fees

and costs, Nakauchi’s lead counsel stated that he based his

requested hourly rate of $250 on the Colorado Bar Association’s

2017 Economic Survey Snapshot (2017 Survey Snapshot), which

reflected that the median hourly billing rate for a private solo

practitioner in the state was $250 per hour. Additionally, in his

sworn affidavit attached to the September 23, 2022, request for

attorney fees and costs, Nakauchi’s lead counsel stated that he

based the requested $100 hourly rate for paralegal time based on

the 2017 Survey Snapshot, which reflected an hourly rate of $100

for a paralegal with one to two years of experience. In his sworn

affidavit attached to the December 23, 2020, request for attorney

fees and costs, Nakauchi’s co-counsel stated that his requested rate

of $375 per hour was the rate he customarily billed his clients and

was the reasonable market rate for an attorney of his skill and

experience.

¶ 13 The trial court held an evidentiary hearing on January 6,

2023. Nakauchi’s lead counsel was the only witness who testified.

7

After considering the evidence and the court file in this case, the

trial court ruled that Nakauchi was entitled to an award of attorney

fees and costs against the state defendants but couldn’t recover

against the county defendants or for her failed state law claim. The

trial court also found that Nakauchi couldn’t recover any fees

sought for her co-counsel’s time because co-counsel “was not

reasonably necessary to the case.” Furthermore, the trial court

found that Nakauchi’s lead counsel’s requested hourly rate of $250

per hour was “unreasonable given his level of experience.” While

the state defendants argued that Nakauchi’s attorney should only

be able to recover at a rate of $150 an hour, the trial court found a

rate of $200 an hour to be reasonable. The trial court further found

that the 600 hours for which Nakauchi had sought reimbursement

for her lead counsel’s time were “excessive and unnecessary.” As a

result, the trial court concluded that “a reasonable amount of time

for prosecuting Nakauchi’s claim through the two-and-a-half day

court trial was 130 hours and 25 hours for each appeal.” The trial

court made no findings or conclusions regarding Nakauchi’s

request for paralegal time and denied that request without

explanation.

8

¶ 14 After calculating the lodestar amount, substantially reducing

the number of hours Nakauchi’s lead counsel had spent on this

litigation, and reducing the hours by another ten percent to account

for lead counsel’s time spent on Nakauchi’s failed state law claim,

the trial court awarded $32,400 in attorney fees and $2,455.24 in

costs.

II. Analysis

¶ 15 Nakauchi appeals the trial court’s order awarding her attorney

fees and costs, arguing that the court abused its discretion when it

calculated its award. We agree.

A. The Trial Court Abused Its Discretion in Calculating

Nakauchi’s Attorney Fees and Costs Award

¶ 16 On appeal, Nakauchi contends that the trial court abused its

discretion when it calculated an attorney fees award that was eighty

percent below the requested amount and further did not award the

full costs requested. We agree.

1. Standard of Review and Applicable Legal Principles

¶ 17 We review the reasonableness of a trial court’s award of

attorney fees and costs pursuant to 42 U.S.C. § 1988 for an abuse

of discretion. Deighton v. City Council, 3 P.3d 488, 490 (Colo. App.

9

2000). “A trial court abuses its discretion when its decision is

manifestly arbitrary, unreasonable, unfair, or based on a

misapplication of the law.” Black v. Black, 2020 COA 64M, ¶ 118.

Further, “[t]he trial court must make findings sufficient to allow

meaningful appellate review of an award.” Brody v. Hellman, 167

P.3d 192, 198 (Colo. App. 2007).

¶ 18 Generally, an award of attorney fees can’t be recovered “absent

an express statute, court rule, or private contract providing for

them.” Id. A prevailing plaintiff in a federal civil rights action may,

at the court’s discretion, recover reasonable attorney fees and costs.

42 U.S.C. § 1988(b); Ramos v. Lamm, 713 F.2d 546, 559 (10th Cir.

1983), disapproved on other grounds by Pennsylvania v. Del. Valley

Citizens’ Council for Clean Air, 483 U.S. 711 (1987); see also Beaver

Creek Prop. Owners Ass’n v. Bachelor Gulch Metro. Dist., 271 P.3d

578, 581 (Colo. App. 2011). If an attorney fees award is authorized

by federal statute, federal law governs the procedures for

computation of those fees. Catlin v. Tormey Bewley Corp., 219 P.3d

407, 410 (Colo. App. 2009).

¶ 19 To calculate the attorney fees rate, a court “starts with

calculating the lodestar amount by multiplying the number of hours

10

reasonably spent by counsel for the party seeking the fees times a

reasonabl[e] hourly rate.” Id. at 411 (citing Case v. Unified Sch.

Dist. No. 233, 157 F.3d 1243, 1249 (10th Cir. 1998)). After the

lodestar amount is calculated, the court may then adjust the

lodestar rate either up or down by accounting for several factors.

similar, but not identical, to those under state law.

¶ 20 For example, both state and federal law consider: (1) the labor

and time required; (2) the difficulty and novelty of the legal

questions involved; (3) the skill requisite to perform the legal

services properly; (4) the preclusion of the attorney’s ability to take

on other cases; (5) the fee customarily charged; (6) time limitations

imposed by the client or circumstances involved; (7) the amount

involved and the results obtained; (8) the experience, reputation,

and ability of the attorneys; (9) the nature and length of the

professional relationship; (10) awards in similar cases; and

(11) whether the fee is fixed or contingent. Hensley v. Eckerhart,

461 U.S. 424, 430 n.3 (1983); Colo. RPC 1.5(a) (which frames the

above list as eight factors).

11

¶ 21 But importantly, federal law also requires a court to consider

the “undesirability” of the case. Hensley, 461 U.S. at 430 n.3. The

“undesirability” factor considers that “[o]ftentimes” a civil rights

attorney’s “decision to help eradicate discrimination is not

pleasantly received by the community or [the attorney’s]

contemporaries. This can have an economic impact on [the

attorney’s] practice which can be considered by the Court.”

Johnson v. Ga. Highway Exp., Inc., 488 F.2d 714, 719 (5th Cir.

1974), abrogated on other grounds by Blanchard v. Bergeron, 489

U.S. 87 (1989).

¶ 22 Moreover, certain “out-of-pocket costs not normally absorbed

as part of law firm overhead may be reimbursed under 42 U.S.C.

§ 1988.” Ramos, 713 F.2d at 559 (stating that costs such as

photocopying, postage, telephone charges, books, and overtime

secretarial work are normally absorbed as overhead and not

recoverable as costs).

2. Application

a. Attorney Fees

¶ 23 Nakauchi contends that the trial court abused its discretion

when it arbitrarily cut Nakauchi’s requested attorney fees award by

12

eighty percent. Specifically, she contends that the trial court erred

by (1) lowering the hourly billing rate sought by her lead counsel;

(2) arbitrarily awarding only 130 hours for trial work; (3) arbitrarily

cutting hours billed for appellate proceedings without an adequate

basis; (4) making assumptions about the fees sought that weren’t

grounded in the evidence presented to the court; (5) criticizing her

lead counsel for billing for hours that weren’t actually billed;

(6) presuming necessary work wasn’t required; (7) reducing

compensable hours as a penalty against her lead counsel;

(8) applying the wrong legal test to determine the hourly rate and

only considering one of eight factors of the legal test; (9) concluding

that the twenty-five hours billed for co-counsel’s time wasn’t

“reasonably necessary”; (10) not awarding attorney fees for post-

trial motions; and (11) declining to award attorney fees for

Nakauchi’s statutory claim. We agree the trial court abused its

discretion. We reach this conclusion for four reasons.

¶ 24 As a threshold matter, the trial court applied the wrong legal

standard to calculate the lodestar amount, which is an abuse of

discretion. Black, ¶ 118. When determining the applicable lodestar

amount, the trial court relied on state law rather than federal law.

13

Compounding this error, the trial court seemingly considered only

the trial “experience,” or lack thereof, of Nakauchi’s lead counsel, a

single factor in the eight-factor state legal test. Indeed, the trial

court didn’t address or make findings regarding any other factor in

its order.

¶ 25 But because Nakauchi sought relief under the federal civil

rights statutes, federal law governs the analysis. See Catlin, 219

P.3d at 410. And the federal analysis includes additional factors

that the court must consider, such as the undesirability of the case.

Hensley, 461 U.S. at 430 n.3. Although the court cited the state

factors, it’s otherwise unclear whether the court considered any

factors outside of Nakauchi’s lead counsel’s experience in civil

rights litigation when determining the lodestar amount, including

“the novelty and difficulty of the questions,” “the time and labor

required,” “whether the fee is fixed or contingent,” “the preclusion of

[other] employment by the attorney due to acceptance of the case,”

and “the amount involved and the results obtained.” Id. These

omissions are glaring in light of the undisputed fact that Nakauchi

prevailed in two appeals and succeeded in obtaining statewide

injunctive relief.

14

¶ 26 Second, the trial court based its determination that a

significant number of billed hours were not recoverable on a

mischaracterization of the record. This was an abuse of discretion.

E-470 Pub. Highway Auth. v. Revenig, 140 P.3d 227, 230-31 (Colo.

App. 2006) (“In assessing whether a trial court’s decision is

manifestly unreasonable, arbitrary, or unfair, we ask not whether

we would have reached a different result but, rather, whether the

trial court’s decision fell within a range of reasonable options.”). In

criticizing what it believed were counsel’s excessive billings, the trial

court opined that Nakauchi’s lead counsel unreasonably billed for

time spent (1) “attempting to secure a transcript of the trial via an

Open Records Acts request”; (2) twice filing requests for clarification

while the parties awaited a final ruling; (3) attempting to

supplement the record while the case was on appeal and the trial

court lacked jurisdiction to do so; and (4) drafting an unsuccessful

certiorari petition in the first appeal and reply to the defendants’

certiorari petition, billing over twenty hours per filing.

¶ 27 But the record contradicts the court’s findings. The record

makes clear that Nakauchi’s lead counsel never sought

reimbursement for his time spent on the open records requests

15

because they appear as “zero” hour entries on the billing statements

submitted to the court. Similarly, the record doesn’t support the

conclusion that Nakauchi’s lead counsel billed for his requests for

clarification because there are no billing records submitted in

connection with either motion. Nakauchi’s lead counsel also didn’t

bill for any of his time spent on correcting his mistake concerning

the motion to supplement the record while the second appeal was

pending — in fact, the submitted billing records indicate that lead

counsel billed zero hours for work on this motion, explicitly noting

that he “[c]hanged to no charge because it was [his] mistake.”

Finally, the billing records support the conclusion that Nakauchi’s

lead counsel billed approximately twenty-eight hours for both the

certiorari petition in the first appeal and his reply in opposition to

the defendants’ certiorari petition, not “nearly [twenty] more hours

each,” as the trial court stated.

¶ 28 Third, it was also arbitrary for the trial court to decline to

award any attorney fees for Nakauchi’s co-counsel’s work on the

basis that co-counsel “was not reasonably necessary to the case.”

Throughout its order, the trial court criticized Nakauchi’s lead

counsel for his lack of civil rights litigation and trial experience —

16

using these findings to support a reduction in lead counsel’s

recoverable billing rate — and then declined to award any attorney

fees for the engagement of a more experienced litigator whom lead

counsel consulted and brought on to assist in trial matters. See

Colo. RPC 1.1 cmt. 2 (“Competent representation can also be

provided through the association of a lawyer of established

competence in the field in question.”). The trial court doesn’t

explain, or make sufficient findings on, Brody, 167 P.3d at 198, why

it deemed that co-counsel wasn’t reasonably necessary, particularly

given the court’s findings regarding lead counsel’s lack of civil rights

litigation experience.

¶ 29 Fourth, from the trial court’s order, we simply can’t determine

how the court arrived at its conclusion that Nakauchi’s lead counsel

could recover only one hundred thirty hours for trial work and

twenty-five hours for each appeal in this case. While the court

explained that it reduced the fee recovery by ten percent because it

determined that Nakauchi couldn’t recover attorney fees for work

spent unsuccessfully litigating against the county defendants, that

doesn’t account for the full scope of the reduction, nor did the court

explain how each of the identified deficiencies impacted the award.

17

Similarly, the trial court made no findings or conclusions regarding

Nakauchi’s requested reimbursement for paralegal time and

whether, if at all, the eighteen and a half paralegal hours

Nakauchi’s attorney sought reimbursement for were subtracted

from the 600 hours Nakauchi sought for lead counsel’s time.

Simply put, the trial court did not make findings sufficient for us to

meaningfully review its basis for the award, see id., and we

therefore must remand it for further proceedings.

¶ 30 Accordingly, we reverse the trial court’s award of attorney fees

and remand the case to recalculate the lodestar amount under the

federal guidelines and to recalculate the amount of billed hours

Nakauchi can reasonably recover, including whether Nakauchi’s

lead counsel can recover attorney fees for co-counsel and his

paralegal.

b. Costs

¶ 31 Nakauchi contends that the trial court also erred by declining

to award $455.25 for a second copy of a transcript. We agree.

18

¶ 32 Generally, costs normally billed to a client are recoverable as

part of a fee award pursuant to 42 U.S.C. § 1988,

3

expenses are usually charged separately in the area.” Sussman v.

Patterson, 108 F.3d 1206, 1213 (10th Cir. 1997) (quoting Ramos,

713 F.2d at 559). Costs that are generally recoverable under

42 U.S.C. § 1988 include fees for reasonably necessary transcripts.

See Vialpando v. Johanns, 619 F. Supp. 2d 1107, 1130 (D. Colo.

2008) (rejecting plaintiff’s requests for cost of deposition transcripts

because she hadn’t “shown that these witnesses had [relevant]

testimony” and because a party can’t “recover expenses incurred on

[unsuccessful] claims”). Additionally, where local rules allow for the

reimbursement of a single transcript, courts can take judicial notice

that the company producing the transcript automatically produces

two copies and award costs for both copies. Cf. Coal. to Save Our

Child. v. State Bd. of Educ., 901 F. Supp. 824, 833 (D. Del. 1995).

¶ 33 The trial court determined that Nakauchi couldn’t recover

costs for a second copy of the trial transcript because the court

3

On appeal, neither party challenges the notion that 42 U.S.C.

§ 1988(b) applies to the award of costs in this case rather than

C.R.C.P. 54(d). Therefore, for the purpose of this appeal, we accept

that as true.

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believed “Nakauchi [was] seeking to recover twice for the trial

transcript.” On appeal, Nakauchi contends that the trial court

mischaracterized the transcript request because the transcript

company required that she purchase two copies of the trial

transcripts at $455.25 per copy.

¶ 34 We conclude that the trial court abused its discretion when it

declined to award all costs incurred for the trial transcript. The

record supports the conclusion that Nakauchi had to purchase two

copies of the trial transcript — one for her and one for the court of

appeals — as part of the record for the second appeal, and thus the

two copies are recoverable if both are reasonably necessary to the

litigation. See Vialpando, 619 F. Supp. 2d at 1130. From the trial

court’s order, it’s unclear whether the trial court considered this

fact when it declined to award the transcript fee twice because the

order stated that, in the court’s opinion, “Nakauchi is seeking to

recover twice for [the] trial transcripts.” Furthermore, the trial

court could take judicial notice that the transcript company

automatically produced two copies and award reimbursement for

both copies as a result. Coal. to Save Our Child., 901 F. Supp. at

833.

20

¶ 35 Accordingly, we reverse the trial court’s award of costs and

remand the case for further proceedings to determine whether

Nakauchi can recover $455.25 for a second copy of the transcript.

B. Attorney Fees and Costs on Appeal

¶ 36 Nakauchi requests an award of her attorney fees and costs

incurred on appeal pursuant to 42 U.S.C. §§ 1983 and 1988, as the

prevailing party on appeal. Section 1988 allows the court, in its

discretion, to award reasonable attorney fees to the prevailing party

in an action to enforce a provision of § 1983. We conclude that, as

the prevailing party, Nakauchi is entitled to her reasonable attorney

fees and costs incurred in this appeal. We remand for the trial

court to determine the amount of such fees and costs. See C.A.R.

39.5; see also Mahaney v. City of Englewood, 226 P.3d 1214, 1221

(Colo. App. 2009).

C. Reassignment to a Different Judge on Remand

¶ 37 Finally, Nakauchi requests that this case be assigned to a new

judge on remand because of the significant delay, among other

reasons. Based on our review of the record, we grant this request.

See, e.g., State ex rel. Weiser v. Ctr. for Excellence in Higher Educ.,

Inc., 2021 COA 117, ¶ 120 (observing that a court’s “significant

21

delay in issuing the court’s order” may “require[] a new judge to

take over the case on remand to ‘preserve the appearance of

justice’” (quoting United States v. Aragon, 922 F.3d 1102, 1113

(10th Cir. 2019))), aff’d in part and rev’d in part on other grounds,

2023 CO 23. And we conclude that reassignment won’t result in a

significant inefficiency of judicial resources due to “waste and

duplication out of proportion to any gain in preserving the

appearance of fairness.” Aragon, 922 F.3d at 1113 (quoting Mitchell

v. Maynard, 80 F.3d 1433, 1450 (10th Cir. 1996)). While the

original trial judge is surely familiar with the course of this

litigation, our reversal of the fees and costs award in its entirety will

require a fresh look at Nakauchi’s request for attorney fees and

costs applying the proper standard. A newly assigned judge won’t

be at a significant disadvantage in performing this task.

III. Disposition

¶ 38 The trial court’s order is reversed, and the case is remanded

for further proceedings consistent with this opinion before a new

judge. In its discretion, the trial court on remand may consider

additional evidence on any remanded issue.

JUSTICE MARTINEZ and JUDGE TAUBMAN concur.