April 21, 2010

Supreme Court Decides Perdue v. Kenny A.

On April 21, the Supreme Court decided Perdue v. Kenny A., No. 08-970, holding that, although an award of "reasonable" attorney's fees in a civil rights action ordinarily is limited to the "lodestar" amount determined by applying a reasonable hourly rate to the time devoted to the case by the attorney, the award may be enhanced based on the attorney's superior performance or other factors, but such an enhancement is permitted only in "a few" circumstances that are "rare" and "exceptional."

After plaintiffs successfully challenged Georgia's foster-care system on constitutional grounds, they sought an award of attorney's fees under 28 U.S.C. § 1988. The district court accepted their proposed hourly rate for their attorneys' services, reduced the amount they requested based on the time devoted, and calculated a "lodestar" amount based on those factors. It then increased this amount by 75 percent based on the delay in recovering the expenses that the attorneys had advanced during the litigation, the fact that they were not being paid on an ongoing basis during the case, the high degree of skill and dedication exhibited by the attorneys, and the extraordinary result that had been achieved. The Eleventh Circuit held that the district court had not abused its discretion in determining the amount of the fee award and therefore affirmed.

The Supreme Court reversed. A "reasonable" fee, as permitted by the statute, is a fee that is sufficient to induce a capable attorney to undertake the representation of a meritorious civil rights case. The lodestar method, based on the time actually devoted by the attorney to the case and the prevailing hourly market rate in the relevant community for the attorney's services, is "presumptively sufficient to achieve this objective." An enhancement of the lodestar amount is permitted in circumstances that are truly "rare" and "exceptional," but it may not be based on circumstances that are subsumed in the lodestar calculation, such as circumstances that affect either the time required to achieve the result or the reasonable hourly rate. The fee applicant bears the burden of providing specific evidence to support any enhancement, and the amount of the enhancement must be specifically tied to that evidence.

In particular, the Court said, an attorney's superior skill and the superior results achieved are a single factor, since the results may be rewarded only if they are caused by the attorney's skills, rather than some other factor such as the inferiority of the opposition. And in any case, the lodestar amount may be enhanced for superior attorney performance only in "a few" circumstances that are "indeed ‘rare' and exceptional,'" where specific evidence shows that the lodestar fee would not have been sufficient to attract competent counsel. Such circumstances may exist where it is shown that the true value of the attorney's services are not reflected in the prevailing community hourly rate (in which case the enhancement should be achieved by adjusting the hourly rate). Or an enhancement may be appropriate for an unusual outlay of expenses or an unusually protracted litigation (in which case the enhancement should be achieved by applying an appropriate rate of interest to the relevant portion of the award). The district court's simple increase of the lodestar amount by 75 percent failed to meet these requirements. A court's explanation of the basis for its determination of a "reasonable fee" must be sufficiently specific to permit appellate review.

Justice Alito delivered the opinion of the Court, in which Chief Justice Roberts and Justices Scalia, Kennedy, and Thomas joined. Justices Kennedy and Thomas also filed concurring opinions. Justice Breyer filed an opinion concurring in part and dissenting in part, in which Justices Stevens, Ginsburg, and Sotomayor joined.

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