Commercial Litigation and Arbitration

ChatGBT Evidence Excluded As “Notorious for Inventing False Information About Market Rates”

M.B. v. N.Y.C. Dep't of Educ., 2024 U.S. Dist. LEXIS 13836 (S.D.N.Y. Jan. 24, 2024) (R&R)


SARAH NETBURN, United States Magistrate Judge.


On behalf of her son K.B., M.B. seeks reasonable fees as a prevailing party under the fee-shifting provisions of the Individuals with Disabilities Education Act ("IDEA") and Section 504 of the Rehabilitation Act of 1973. In an administrative due process hearing, M.B. sought reimbursement from the New York City Department of Education ("DOE") for K.B.'s unilateral placement at Winston Preparatory School. The impartial hearing officer ("IHO") ordered M.B.'s requested relief, making her the prevailing party under the IDEA and entitling her to reasonable attorneys' fees. The DOE does not contest that M.B. is the prevailing party but argues that the rates and hours sought by M.B.'s counsel are unreasonable. [*2] 

I recommend that the Court grant M.B.'s motion for attorneys' fees and costs in part but reduce the award from $69,767.50 in fees and $515.45 in costs to $18,740.55 in fees and $433.85 in costs.


  1. Administrative Proceedings

At the time of the underlying administrative proceedings, K.B. was an 18-year-old student with "attention deficits, a language disorder, and learning disabilities in math and writing." M. Cuddy Decl., ¶ 5. Pursuant to a prior settlement, the DOE funded K.B.'s attendance at Winston Preparatory School's Transitions Program for the 2019-2020 school year. Hrg. Rq. at 3.

On June 21, 2020, Cuddy Law Firm ("CLF") attorney Michael Cuddy requested an impartial hearing pursuant to the IDEA, 20 U.S.C. § 1415(f)(1), and Part 200 of the Regulations of the Commissioner of Education of the State of New York. Id. at 1. M.B. sought K.B.'s continued funded placement at Winston's Transitions Program, as well as an independent vocational assessment and extended school-year services for K.B. Id. at 6-7. Additionally, M.B. requested that the IHO find that the DOE had denied K.B. a Free Appropriate Public Education ("FAPE"). Id. at 3. The DOE expressed that the matter would likely settle but did not [*3]  engage in any settlement negotiations. M. Cuddy Decl., ¶¶ 12, 16, 17.

The DOE appointed an IHO, who conducted an administrative hearing on February 10, 2021. Hrg. Tr. The hearing lasted one hour and 21 minutes. Id. The DOE did not introduce any documentary evidence or call any witnesses. Id. M.B. offered 14 documents into evidence and called three witnesses, including herself. Id. At the hearing, the DOE conceded denial of a FAPE. On the remaining issue - the DOE's funding of K.B.'s placement at Winston's Transition Program - M.B. had the burden of proof. M. Cuddy Decl., ¶ 19. After the hearing, M.B. submitted a 21-page closing brief to the IHO. On April 1, 2021, the IHO issued a decision on the merits, finding that the DOE had denied K.B. a FAPE. The IHO ordered the DOE to fund both K.B.'s placement at the Winston Preparatory School for the 2020-2021 school year and an independent vocational assessment. The IHO further ordered the DOE to make related payments to M.B. by May 31, 2021. Despite repeated follow-ups from M.B.'s counsel, the DOE did not provide the required authorization for K.B.'s vocational assessment until December 2022. Murray Rep. Decl., ¶¶ 12, 18.

  1. Federal Proceedings [*4] 

Through CLF, M.B. filed this action on July 28, 2022. ECF No. 1. Pursuant to the fee-shifting provisions of the IDEA and Rehabilitation Act, M.B. submitted a fee demand to the DOE on December 27, 2022. A. Cuddy Decl., ¶ 23. Three months later, the DOE made a formal offer, pursuant to 20 U.S.C. § 1415(i)(3)(D), to settle the action for $23,000. Lindeman Decl., ¶ 47. M.B. made a counteroffer of $25,200, which the DOE did not accept. Kopp Rep. Decl., ¶ 12. M.B. then moved for attorneys' fees, costs, and interest, seeking a total of $70,282.95. A. Cuddy Rep. Decl., ¶ 60. The DOE argues that the Court should award M.B. no more than $7,537.24. Def. Br. at 3.


  1. Fees
  2. Legal Standard

The fees that the Court awards must be "reasonable" and "based on rates prevailing in the community in which the action or proceeding arose for the kind and quality of services furnished." 20 U.S.C. § 1415(i)(3)(B)-(C). After determining a reasonable hourly rate, the court multiplies that rate by "the number of hours reasonably expended on the litigation," i.e. the "lodestar method." A.R. v. New York City Dep't of Educ., 407 F.3d, 65, 79 (2d Cir. 2005) (quoting G.M. v. New Britain Bd. of Educ., 173 F.3d 77, 84 (2d Cir. 1999)). There is a "strong presumption that the lodestar figure . . . represents a 'reasonable' fee." Pa. v. Del. Valley Citizens' Council for Clean Air, 478 U.S. 546, 565 (1986).

The fee applicant bears the burden of establishing the hours expended [*5]  and the hourly rates. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). The applicant must present "satisfactory evidence [of the hourly rates] - in addition to the attorney's own affidavits." Chambless v. Masters, Mates & Pilots Pension Plan, 885 F.2d 1053, 1059 (2d Cir. 1989) (quoting Blum v. Stenson, 465 U.S. 886, n.11 (1984)).

In determining an attorney's hourly rate, the Court "must ascertain whether 'the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.'" Id. "The reasonable hourly rate is the rate a paying client would be willing to pay . . . bear[ing] in mind that a reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively." Ortiz v. City of New York, 843 F. App'x 355, 359 (2d Cir. 2021) (quoting Lilly v. City of New York, 934 F.3d 222, 231 (2d Cir. 2019)). The Court is required to perform "a case-specific inquiry into the prevailing market rates for counsel of similar experience and skill to the fee applicant's counsel" evaluating the "evidence proffered by the parties." Fartboko v. Clinton County, 433 F.3d 204, 209 (2d Cir. 2005).

In addition to the prevailing market rate, the Court must also consider the Johnson factors to determine each attorney's reasonable hourly rate:

(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance [*6]  of the case; (5) the attorney's customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or the circumstances; (8) the amount involved in the case and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the "undesirability" of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.

Lilly, 934 F.3d at 228 (citing Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (1974)). "A district court need not recite and make separate findings as to all twelve Johnson factors, provided that it takes each into account in setting the attorneys' fee award." A.G. v. New York City Dep't of Educ., No. 20-cv-7577 (LJL), 2021 WL 4896227, at *4 (S.D.N.Y. Oct. 19, 2021) (quoting C.D. v. Minisink Valley Cent. Sch. Dist., No. 17-cv-7632 (PAE), 2018 WL 3769972, at *4 (S.D.N.Y. Aug. 9, 2018)).

More than a decade ago, District Judge Karas cautioned that while "the rates awarded in IDEA cases . . . are low compared to the rates awarded to attorneys in other civil rights cases . . . the law does not support the contention that attorneys handling IDEA cases should be compensated at a lower rate than that which they normally command in other cases." G.B. ex rel. N.B. v. Tuxedo Union Free Sch. Dist., 894 F. Supp. 2d 415, 430-31 (S.D.N.Y. 2012) (quoting Mr. X v. New York State Educ. Dep't, 20 F. Supp. 2d 561, 564 (S.D.N.Y. 1998)). Fees "should be based on prevailing market rates, and current rates, rather than historical rates." LeBlanc-Sternberg v. Fletcher, 143 F.3d 748, 764 (2d Cir. 1998). This is especially true where fee-shifting statutes like the IDEA are concerned because "[r]ecycling [*7]  rates awarded in prior cases without considering whether they continue to prevail may create disparity between compensation available under [a fee shifting statute] and compensation available in the marketplace . . . [which] undermines [the statute's] central purpose of attracting competent counsel to public interest litigation." Farbotko, 433 F.3d at 209.

After determining each attorney's hourly rate, the Court must then determine the number of hours the attorneys reasonably spent on litigation. "In determining the number of hours reasonably expended for purposes of calculating the lodestar, the district court should exclude excessive, redundant or otherwise unnecessary hours." Quarantino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1999). However, "[a] request for attorney's fees should not result in a second major litigation," in part because extensive litigation on fees "increase[s] the costs to plaintiffs of vindicating their rights." Hensley, 461 U.S. at 43. Accordingly, "trial courts need not, and indeed should not, become green-eyeshade accountants. The essential goal in shifting fees (to either party) is to do rough justice, not to achieve auditing perfection." Fox v. Vice, 563 U.S. 826, 838 (2011).

  1. Reasonable Hourly Rate
  2. Prevailing Market Rate

The DOE argues that, because CLF's office is in Auburn, New York, the [*8]  Northern District of New York is the appropriate community of reference for the determination of the prevailing market rate.1 Def. Br. at 7. But "[n]ormally a district court, awarding attorney's fees under [a fee-shifting statute], will consider the prevailing rates in the district in which the court sits." A.R., 407 F.3d at 79 (quoting Polk v. New York State Dep't of Corr. Servs., 722 F.2d 23, 25 (2d Cir. 1983)). "Courts have found the relevant community to be the Southern District of New York, where 'both [the] litigation and the underlying administrative proceedings are centered' in this district." H.W., 2023 WL 5529932, at *5 (citing C.D., 2018 WL 3769972, at *6). K.B.'s school and this litigation are both located in the Southern District of New York. Aside from CLF's office, the DOE points to no Northern District ties. As such, the Court uses the Southern District as the community of reference for determining the prevailing market rate.

The DOE has repeatedly made this argument in fee cases against CLF, and Southern District judges have repeatedly denied it. See, e.g., H.W. v. New York City Dep't of Educ., No. 21-cv-08604 (JLR), 2023 WL 5529932, at *12 (S.D.N.Y. Aug. 28, 2023) (using Southern District market rates because the DOE did not "assert that any action or proceeding arose in the Northern District of New York, or that ties to the Northern District predominate this case"); M.Z. v. New York City Dep't of Educ., No. 21-cv-9451 (AT), 2023 WL 2499964, n.3 (S.D.N.Y. Mar. 14, 2023) ("The Court rejects the DOE's argument that the Court should look to prevailing market rates in the Northern District of New York, where CLF is located, instead of the Southern District of New York."); T.A. v. New York City Dep't of Educ., No. 21-cv-7104 (GHW), 2022 WL 3577885, n.1 (S.D.N.Y. Aug. 19, 2022) (deciding that "the Court will not apply the rates in the Northern District of New York" because "CLF is practicing in the Southern District of New York").

As of 2018, the Southern District of New York's prevailing market rate for experienced special education attorneys ranged from $350 to $475. See J.R. v. New York City Dep't of Educ., No. 19-cv-11783 (RA), 2021 WL 3406370, at *3 (S.D.N.Y. Aug. 4, 2021) (collecting cases). This range is consistent with some of the market rate-related evidence submitted by M.B., including a 2022 retainer between the DOE and Drohan Lee, LLP.2 Based on that retainer for fee-only cases, the DOE pays partners $400 [*9]  per hour, associates $300 per hour, and paralegals $100 per hour. A declaration from Barbara Ebenstein, an experienced New York-based special education solo practitioner, suggests a slightly higher market rate. Ebenstein lists the hourly rates for about 80 New York City-based IDEA practitioners with various experience levels based on her "communications with other attorneys" in the IDEA field. Ebenstein Decl., ¶ 8. The hourly rates for those 80 attorneys range from $275 to $750, with an average rate of about $475. Ebenstein Decl., ¶ 20. Combining the Drohan Lee, LLP retainer, Ebenstein's declaration, the 2018 Southern District market rate range, and that a court "may consider the passage of time in justifying a higher reasonable rate," I find that $375 to $500 is the prevailing Southern District market rate for experienced special education attorneys practicing from 2020 to 2023 (the timeframe of this case). H.W., 2023 WL 5529932, at *8.

The DOE argues that the Court should disregard retainer agreements with other firms because the DOE made those agreements "on an emergency basis to handle dozens of IDEA fees-only cases at the end of 2020." Def. Br. at n.10. But the agreement between the DOE and Drohan Lee, LLP was made in 2022, presumably after the COVID-19 pandemic no longer necessitated emergency agreements. A. Cuddy Rep. Decl., ¶ 55(a).

M.B. urges the Court to find a higher market rate, but the Court is not persuaded by M.B.'s related evidence. M.B. cites the Real Rate Reports and the National Association of Legal Fee Analysis' December 2022 Litigation Hourly Rate Survey & Report, but those reports "contain mean [*10]  rates for litigation generally in New York; they do not contain rates for IDEA litigation." N.G.B. v. New York City Dep't of Educ., No. 21-cv-11211 (LJL), 2023 WL

2711753, at *35-36 (S.D.N.Y. Mar. 30, 2023). The Bureau of Labor Statistics' Consumer Price Index cited by M.B. is also of little value because M.B. assumes - without support - that "wages increase one-for-one with the CPI." Id. M.B. also offers the Laffey matrix, but "[n]o court in this Circuit has approved the use of the Laffey Matrix to determine the rates of lawyers practicing in New York City." Id. at *37 (collecting cases). Finally, M.B. offers a 14-page conversation with ChatGPT - a chatbot notorious for inventing false information - about prevailing market rates. See, e.g., Mata v. Avianca, Inc., No. 22-cv-1461 (PKC), 2023 WL 4114965, at *2 (S.D.N.Y. June 22, 2023) (finding that attorneys "abandoned their responsibilities when they submitted non-existent judicial opinions with fake quotes and citations created by the artificial intelligence tool ChatGPT"). The Court declines to consider ChatGPT's claims. For these reasons, the Court disregards the above-listed evidence and finds a prevailing market rate ranging from $375 to $500 per hour for experienced Southern District IDEA attorneys.



I recommend that M.B.'s motion for attorney's fees and costs be granted in part and that M.B. be awarded $18,740.55 in fees and $433.85 in costs.

/s/ Sarah Netburn


United States Magistrate Judge

DATED: January 24, 2024


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