Fourth Circuit Weighs in on Fee Matrices When Evaluating Fee Petitions
July 22, 2025
By: Stephen B. Stern
In Paredes v. Zen Nails Studio, LLC, 134 F.4th 750 (4th Cir. 2025), the United States Court of Appeals for the Fourth Circuit ruled that, although fee matrices are a useful starting point to determine a fee petition, a district court “may not treat court-produced fee matrices as setting a baseline from which departures are disfavored” and must consider multiple factors when evaluating a fee petition.
In Paredes, the plaintiffs prevailed at trial on their claims under the Fair Labor Standards Act (“FLSA”) and comparable Maryland state law and were awarded approximately 60% of their claimed damages. Following the verdict, the plaintiffs’ attorneys filed a fee petition pursuant to the fee-shifting provision of the FLSA seeking $343,189.85 in fees, which the defendants opposed without proposing a specific reduction in the amount that should be awarded. The district court awarded $167,115.49 after setting a reasonable hourly rate for the timekeepers, calculating the reasonable hours worked by each timekeeper, and reducing the total figure by 35% due to the “moderately successful outcome [that was] not a complete victory.” The plaintiffs appealed, challenging only the court’s determination of the hourly rates.
The district court relied on the district court’s “Guidelines Regarding Hourly Rates” adopted in the district court’s local rules and applied hourly rates for all timekeepers that were well below those requested by the plaintiffs. According to the district court, the hourly rates sought by the plaintiffs were well above the rates adopted in the Guidelines, which were “presumptively reasonable hourly rates keyed to an attorney’s years of experience.” In issuing its award, the district court acknowledged that the Guidelines rates had not been increased in several years and, therefore, it applied the rates that were at the higher end of the Guidelines.
On appeal, the Fourth Circuit noted that a district court, not an appellate court, “has close and intimate knowledge of the efforts expended and the value of the services rendered,” and “appellate courts must give substantial deference to these determinations.” Although district courts have wide discretion when issuing fee awards, a district court must still exercise that discretion by “call[ing] the game by the right rules.” While fee matrices are “a useful starting point to determine fees,” a district court “is not bound by” any matrix. In fact, a district court may not determine a fee award by treating a fee matrix as ‘“presumptively reasonable’ and require special justification to deviate from it – even when that matrix is contained in the district court’s local rules.” Instead, according to the Fourth Circuit, a district court “must consider all relevant evidence to determine ‘the prevailing market rates in the relevant community,’ . . .including lawyer affidavits, fee awards in similar cases, general surveys, fee matrices, and even its ‘own personal knowledge.’” A district court “may not elevate a matrix above all other types of evidence or treat a matrix as establishing a presumptive answer or range of answers.” The Fourth Circuit found that the district court in this case did just that – applied the Guidelines rates as presumptively valid without considering other factors and, thus, giving them “a substantial anchoring effect” on the ultimate fee award that was issued.
Although the Fourth Circuit vacated the fee award and remanded the case for further consideration consistent with its decision, the Fourth Circuit also made clear that it “express[ed] no opinion about the appropriate hourly rates here and issue[d] no marching orders to award more fees than the district court previously did.” In a footnote toward the end of its opinion, the Fourth Circuit also “urge[d] the district court” to update the rates in the Guidelines because the “matrix has remained unchanged for more than a decade.”
The court’s decision in Paredes is significant because it provides clarification and guidance on the significance of fee matrices when district court’s evaluate fee petitions. In addition, the decision in Paredes also serves as a reminder that fee matrices should be updated periodically and not left unchanged for many years.