Posted Apr 21, 2010 02:59 pm CDT
The U.S. Supreme Court has reversed an award of an extra $4.5 million in attorney fees for good lawyering in a case that uncovered deficiencies in Georgia’s foster care system.
In his majority opinion (PDF) in Perdue v. Kenny A., Justice Samuel A. Alito Jr. said fee enhancements are allowed in extraordinary circumstances, but the district court failed to apply established standards that determine when they are available and didn’t provide sufficient details to justify its decision.
Children’s Rights Inc. and Atlanta’s Bondurant, Mixson & Elmore were awarded $10.5 million under a fee-shifting statute for their work in the case, the National Law Journal reported in a prior story. Of that amount, they received $4.5 million above the lodestar fee of $6 million, in part because of the extraordinary results achieved. The lodestar is based on the number of hours worked multiplied by the prevailing hourly rate for attorney fees.
The 75 percent fee enhancement “appears to have been essentially arbitrary,” Alito said. “Why, for example, did the court grant a 75 percent enhancement instead of the 100 percent increase that respondents sought? And why 75 percent rather than 50 percent or 25 percent or 10 percent?” The effect of the enhancement, he said, was to hike the hourly rate for the top attorneys to more than $866.
“There is a strong presumption that the lodestar is sufficient,” Alito wrote. “Factors subsumed in the lodestar calculation cannot be used as a ground for increasing an award above the lodestar; and a party seeking fees has the burden of identifying a factor that the lodestar does not adequately take into account and proving with specificity that an enhanced fee is justified.”
Alito said the district court failed to calculate how much of the enhancement was because of outlays for litigation expenses, did not determine whether the lawyers’ wait for fees was extraordinary or unwarranted, and improperly considered the contingent nature of the case.
“Section 1988 [the fee-shifting statute] serves an important public purpose by making it possible for persons without means to bring suit to vindicate their rights,” Alito said. “But unjustified enhancements that serve only to enrich attorneys are not consistent with the statute’s aim.”
Justices Stephen G. Breyer, John Paul Stevens, Ruth Bader Ginsburg and Sonia Sotomayor concurred in part and dissented in part. They agreed with the majority’s conclusion that fee enhancements are allowed, but stressed that the district court is in the best position to make the determination.
The 11th U.S. Circuit Court of Appeals had upheld the enhanced award. Writing separately, Judge Edward Carnes had affirmed the enhanced fee, but expressed reservations that increasing an award for good lawyering double counts qualities captured by hourly billing or the contingent nature of the case.