Purdue v. Kenny A.: A New Supreme Court Attorney’s Fees Decision
The Civil Rights Attorney’s Fees Awards Act of 1976, 42 U.S.C. § 1988, provides that prevailing plaintiffs in § 1983 and other civil rights cases (excluding prisoners who are separately covered by the Prison Litigation Reform Act of 1995) are ordinarily entitled to a reasonable attorney’s fee unless special circumstances render such an award unjust. Typically, and to oversimplify, a reasonable attorney’s fee is based on what is called the “lodestar,” namely, the number of hours worked multiplied by the normal hourly billing rate. This lodestar is then modified to take account of the extent of the plaintiff’s success. See Hensley v. Eckerhart, 461 U.S. 424 (1983), dealing with the extent of success, and Blum v. Stenson, 465 U.S. 886 (1984), addressing prevailing market rates. The Court has declared that enhancements to the lodestar based on the contingency of success are not permissible under other statutory attorney’s fees provisions, City of Burlington v. Dague, 505 U.S. 557 (1992), and therefore are not permissible under § 1988 as well because of similar statutory language.
Question: What about enhancements to the lodestar based on the quality of an attorney’s performance and the results obtained? After Purdue v. Kenny A., 130 S. Ct. — (2010), the short answer is that these are permissible only in truly extraordinary circumstances.
Purdue v. Kenny A.
Purdue v. Kenny A., which involved a consent decree arising out of the plaintiff childrens’ successful class action against Georgia officials alleging structural deficiencies in Georgia’s foster-care system, dealt with the question of whether an attorney’s fees award based on the lodestar can ever be enhanced based solely on the quality of an attorney’s performance and the results obtained. A panel of the Eleventh Circuit had affirmed the district court’s $4.5 million enhancement of the $6 million lodestar figure based on these two factors.
Reversing and remanding, Justice Alito declared for the Court:
“This case presents the question whether the calculation of an attorney’s fee, under federal fee-shifting statutes, based on the “lodestar,” i.e., the number of hours worked multiplied by the prevailing hourly rates, may be increased due to superior performance and results. We have stated in previous cases that such an increase is permitted in extraordinary circumstances, and we reaffirm that rule. But as we have also said in prior cases, there is a strong presumption that the lodestar is sufficient; 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. Because the District Court did not apply these standards, we reverse the decision below and remand ….”
According to the Court, the two factors—the quality of the attorney’s performance and the results obtained—should be treated as one because “superior results are relevant only to the extent it can be shown that they are the result of superior attorney performance.” It then went on to list those rare and exceptional situations in which an enhancement to the lodestar may be appropriate: (1) “where the method used in determining the hourly rate employed in the lodestar calculation does not adequately measure the attorney’s true market value”; (2) “if the attorney’s performance includes an extraordinary outlay of expenses and the litigation is exceptionally protracted”; and (3) where “an attorney’s performance involves exceptional delay in payment.”
The Court next rejected the suggestion that performance enhancements were appropriate because departures from hourly billing were becoming more common. At this time hourly billing was still common; if it became “unusual, an alternative to the lodestar method may have to be found.”
The Court went on to reverse the district court because it did not explain why it had increased the lodestar by 75 percent and not some other percentage. In addition, the district court did not specify the connection between the enhancing factors it had identified and the actual amounts attributed to these factors. It was also inappropriate for the district court to compare the performance of the attorneys here with the performance of attorneys in unnamed other cases because this did not allow for meaningful judicial review. The Court, reversing and remanding, concluded: “[U]njustified enhancements that serve only to enrich attorneys are not consistent with [§ 1988’s] aim” particularly since in most cases the fees are paid by state and local taxpayers.
Another Split Decision
While Justices Kennedy and Thomas filed concurring opinions, Justice Breyer, joined by Justices Stevens, Ginsburg and Sotomayor, concurred in part and dissented in part. They argued that the Question Presented, on which certiorari had been granted—whether the calculation an attorney’s fee based on the lodestar can ever be enhanced based solely on the quality of an attorney’s performance and the results obtained—should be answered in the affirmative (as the Court had done here), without getting into a determination of whether the lower courts had correctly found in this case that exceptional circumstances justified an enhancement to the lodestar. Nevertheless, in their view the enhancement was justified in this case: the attorneys’ objective–reforming the foster-care system–was extremely important, the lawsuit was “lengthy and arduous,” the results obtained were exceptional in light of the defense opposition, the district court was in the best position to evaluate the plaintiffs’ attorneys’ performance and there was no fees “windfall.”
Although the Court answered the Question Presented in the affirmative, pretty clearly it did so in a purely technical and very narrow way. As a practical matter, the Court sent a strong message to the lower courts when it reversed and remanded in Purdue.
It will be an exceedingly rare case in which the lodestar may be enhanced based upon superior performance by a prevailing plaintiff’s attorney. As a general principle, according to the Court, the lodestar will have already taken account of this factor.