U.S. Supreme Court Issues Attorney Fee Decision

The United States Supreme Court has issued a decision addressing an attorney fee award in a section 1983 civil rights action. In Perdue v. Kenny A. ex rel Winn, 130 S.Ct. 1662 (2010), the claimants filed suit against state and local agencies and individuals, alleging that foster child services were inadequate. Following entry of a consent decree, the claimants sought to recover their attorney fees and costs. The District Court denied the request for an award of fees under the common fund doctrine, calculated a lodestar of $6 million, and awarded a $4.5 million enhancement based, inter alia, on the quality of the representation provided by the claimants' attorneys and the results obtained. Both sides appealed, the Eleventh Circuit Court of Appeals affirmed, and the Supreme Court granted certiorari.

Justice Alito wrote the 5-4 majority opinion, which held:

[T]he "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 for further proceedings consistent with this opinion.

Id. at 1669.

In dissent, Justice Breyer wrote that he agreed that "an increase to the lodestar due to superior performance and results is permitted in extraordinary circumstances.” Id. at 1683. However, the dissent would not have considered the question decided by the majority, that is, whether the District Court abused its discretion in awarding a 1.75 multiplier on the reduced lodestar in this action. Id. at 1678.

Interestingly, although the dissent examines the course of the litigation to support its conclusion that the attorneys in this case achieved "superior performance and results," neither the majority nor the dissent paid much attention to the following premise, which is prominent in California law:

A lawyer who both bears the risk of not being paid and provides legal services is not receiving the fair market value of his work if he is paid only for the second of these functions. If he is paid no more, competent counsel will be reluctant to accept fee award cases.

Ketchum v. Moses (2001) 24 Cal. 4th 1122, 1133. California law thus seems to differ significantly from federal law on this issue.