US Supreme Court Limits Fee Enhancements

Civil rights jurisprudence seems to spend as much time discussing how much the lawyers get paid as the intricacies of the substantive law controlling those suits. The battleground is usually fought over what constitutes the “lodestar” and the extent to which the lodestar should be increased after considering a number of factors.

In Perdue v. Kenny A., the United States Supreme Court, in a 5-4 decision, put the brakes on routine fee enhancements. A brief word about the controlling terminology. Pursuant to 42 U.S.C. 1988, a prevailing party is entitled to reasonable attorneys fees in a civil rights case. The trial court must approve a “lodestar” amount, that is, a reasonable hourly rate in the prevailing market for similar cases multiplied by the reasonable number of hours spent on the matter. Thereafter, the courts routinely consider whether the lodestar should be enhanced by some percentage that reflects a number of factors including the complexities of the work or the superior performance of counsel.

In Kenny A., the Supreme Court set a high bar for fee enhancements. It noted that there is a “strong” presumption that the lodestar alone is adequate to compensate the prevailing attorney. Thus, fee enhancements of the lodestar should only be granted in “rare” and “extraordinary” cases. To overcome this hurdle, the fee applicant must satisfy the burden of demonstrating that the lodestar amount is insufficient compensation and the district courts must provide a detailed explanation of the objective factors used to justify any increase.

If you have any questions or comments about this post, please email Paul at pclark@wcmlaw.com

http://www.supremecourt.gov/opinions/09pdf/08-970.pdf