Thursday, April 22, 2010

SCOTUS Issues Attorney's Fee Ruling

The Supreme Court recently decided Perdue v. Kenny, a case in which they held that a reasonable attorney's fee in civil rights actions must be based on the lodestar and may only be enhanced in extraordinary circumstances, leading them to reject the performance bonus granted to counsel in the case below. Here is an excerpt from the Syllabus:

Title 42 U. S. C. §1988 authorizes courts to award a “reasonable” attorney’s fee for prevailing parties in civil rights actions. Half of respondents’ $14 million fee request was based on their calculation of the “lodestar,” i.e., the number of hours the attorneys and their employees worked multiplied by the hourly rates prevailing in the community. The other half represented a fee enhancement for superior work and results, supported by affidavits claiming that the lodestar would be insufficient to induce lawyers of comparable skill and experience to litigate this case. Awarding fees of about $10.5 million, the District Court found that the proposed hourly rates were “fair and reasonable,” but that some of the entries on counsel’s billing records were vague and that the hours claimed for many categories were excessive. The court therefore cut the lodestar to approximately $6 million, but enhanced that award by 75%, or an additional $4.5 million. The Eleventh Circuit affirmed in reliance on its precedent.

Held :

1. The calculation of an attorney’s fee based on the lodestar may be increased due to superior performance, but only in extraordinary circumstances. Pp. 5–12.* * *

2. The District Court did not provide proper justification for the 75% fee enhancement it awarded in this case. * * *

532 F. 3d 1209, reversed and remanded.

Alito, J., delivered the opinion of the Court, in which Roberts, C. J., and Scalia, Kennedy, and Thomas, JJ., joined. Kennedy, J., and Thomas, J., filed concurring opinions. Breyer, J., filed an opinion concurring in part and dissenting in part, in which Stevens, Ginsburg, and Sotomayor, JJ., joined.

The opinions in this case are available from Cornell's Legal Information Institute.


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