Lodestar Should Capture the Usual Fee Recovery; Federal Judges Must Provide a Reasonably Specific Explanation for All Aspects of a Fee Determination.
At least in the area of federal civil rights cases (although the opinion may have broader applicability), the U.S. Supreme Court has issued an important decision relating to fee enhancements in Perdue v. Kenny A., Case No. 08-970 (U.S. April 21, 2010).
Here are the highlights from Perdue:
· The lodestar carries with it a strong presumption that its methodology yields a sufficient fee;
· A fee enhancement in civil rights cases may be awarded in rare circumstances where the lodestar does not adequately account for reasonable fee factors;
· Quality of an attorney's performance is an enhancement factor, but only to the extent that it stems from a superior performance rather than the inferior performance by opposing counsel;
· Enhancements are appropriate where (1) the method used to determine the hourly rate does not adequately measure the attorney's true market value; (2) the attorney's performance includes an extraordinary outlay of expenses and the litigation is exceptionally protracted; and (3) an attorney's performance involves exceptional delay in the payment of fees; and
· Federal judges must provide proper justification for fee enhancements, providing a reasonably specific explanation for all aspects of a fee determination inclusive of any enhancement.
The interesting questions are whether this decision will be applied outside the federal civil rights area and whether California state courts will borrow from its reasoning.
Postscript: Hat Tip to Julie Brook, of Continuing Education of the Bar, who on May 5 brought to our attention a CEB post on some questions left open by Perdue.