Labor & Employment Law

Lodestar attorney fee enhancement for superior performance limited to "rare" and "exceptional" circumstances

Perdue v. Kenny A. (US Supreme Court 04/21/2010):

42 USC Section 1988 provides a "reasonable" attorney fee for prevailing parties in civil rights actions. In this case the trial court calculated the lodestar amount, and then enhanced that by 75 percent for superior work and results.

The US Supreme Court held that the calculation of an attorney's fee based on the lodestar may be increased due to superior performance, but only in extraordinary circumstances. The Court reasoned that superior attorney performance typically "is adequately taken into account in the lodestar calculation." The Court said, "We conclude that there are a few such circumstances but that these circumstances are indeed "rare" and "exceptional," and require specific evidence that the lodestar fee would not have been "adequate to attract competent counsel."

Based on this principle, the Court reversed because the trial court "did not provide proper justification for the large enhancement that it awarded. The court increased the lodestar award by 75% but, as far as the court's opinion reveals, this figure appears to have been essentially arbitrary."

Four Justices CONCURRED in part, but DISSENTED, saying that they "would hold that the District Court did not abuse its discretion in awarding an enhancement."

Full post as published by Ross' Employment Law Blog on April 21, 2010 (boomark / email).