Perdue v. Kenny A.: Can Attorney’s Fee Awards Be Enhanced Based On Quality Of Performance? (Argument Preview)
Below, Akin Gump’s Scott Street previews Perdue v. Kenny A., one of two cases to be heard by the Supreme Court on Wednesday, October 14. Check the Perdue v. Kenny A. (08-970) SCOTUSwiki page for additional updates.
It is tempting to think of Perdue v. Kenny A., in which the Supreme Court will hear oral argument on Wednesday, as just another case involving statutory interpretation. In fact, the Court may ultimately treat it as such and resolve the case on narrow grounds. But the case raises important questions about how civil rights should be enforced and what compensation lawyers should receive for enforcing them. Thus, although Perdue has received less attention than other cases the Court has heard recently, and will hear this Term, it may have a greater impact on the future of civil rights litigation"”no doubt something that former Solicitor General Paul Clement realized when he signed on as counsel of record for the respondents and agreed to argue the case on their behalf.
Perdue arose out of Georgia's dysfunctional foster care system. Respondents' trial counsel"”including lawyers from a non-profit children's rights advocacy group and private attorneys who took the case as a pro bono matter"”sued the State of Georgia in 2002 on behalf of foster children, alleging that the deficiencies in the State's foster care system violated various federal and state laws, including 42 U.S.C. § 1983. Although the case was filed in state court, the State removed the case to federal court. It initially opposed the children's efforts to obtain expedited discovery and to enjoin the operation of two emergency shelters in the Atlanta area, but subsequently agreed to close the shelters after a hearing on the matter. The two sides then engaged in extensive discovery, during which the State rejected a request to conduct joint record review. The State also filed a motion for summary judgment and moved to exclude expert witnesses that the children planned to call. The district court eventually denied those motions in December 2004. After a series of mediation sessions aimed at resolving the litigation without trial, in July 2005 the parties agreed to a proposed consent decree that was intended to eliminate the greatest problems in the foster care system through what the district court described as "sweeping" reforms.
In addition to the reforms implemented by the consent decree, the parties also agreed that the children's lawyers should recover a reasonable amount of attorney's fees, in accordance with 42 U.S.C. § 1988. However, when the parties failed to agree on an amount for the attorney's fees, the task fell to the district court. The court first calculated the number of hours that the children's attorneys reasonably spent on the case (reducing the hours by fifteen percent for excessive, duplicative, and unclear billing entries) and then multiplied those hours by what it determined to be reasonable hourly rates for the various attorneys and paralegals who worked on the case, yielding a "lodestar" figure of roughly $6 million. The court then enhanced the lodestar by a factor of 1.75, to a total of $10.5 million. The court reasoned that: (1) the children's lawyers did superb work that "far exceeded" the quality of representation the children could have gotten if they had paid for such representation in the private market; and (2) the children's attorneys achieved "exceptional" success on a "comprehensive scale." The judge also noted that the children's lawyers had invested a great deal of their own money in the case, advancing more than $1.7 million to their clients to pay various legal expenses.
On appeal, the Eleventh Circuit affirmed the district court's decision to enhance the award. Notably, Judge Carnes, who authored the opinion affirming the award, said that he disagreed with the decision but felt bound to follow circuit precedent allowing a judge to enhance a fee award under Section 1988 based on the quality of representation and on the type of results obtained (a position that every federal circuit has adopted). The court of appeals later denied en banc review.
The State filed a petition for certiorari, which the Supreme Court granted with regard to a narrow question: "Can a reasonable attorney's fee award under a federal fee-shifting statute ever be enhanced based solely on quality of performance and results obtained when these factors already are included in the lodestar calculation?"
Oral Argument Preview
It would take pages to discuss every argument that the parties and their supporters make in this case, but a few stand out.
On one side, the State and its amici, including the United States, contend that a fee award under Section 1988 cannot include an enhancement based solely on an attorney's quality of performance and the results the attorney obtains in litigation because doing so would result in double counting "“ which, the Court has previously indicated, Section 1988 prohibits "“ and would produce a windfall to attorneys "“ which, Congress indicated, Section 1988 should not do. Moreover, even if double counting is not prohibited, enhancements are not needed to induce competent counsel to take on civil rights cases and therefore it does not serve the purpose of Section 1988 to authorize them.
The State's amici echo those arguments but focus on three other themes. First, they contend that allowing enhancements for quality of performance and results obtained would harm the public interest by forcing taxpayers to pay additional compensation to attorneys who do outstanding civil rights work, diverting money that could be used to help implement the very reforms that the attorneys fought to achieve. Second, they say it would violate Congressional intent by leading to arbitrary and unpredictable fee awards. Third, they claim that it would discourage settlements and encourage protracted fee litigation, which would conflict with Congress's goals in enacting Section 1988.
The children counter that results-based enhancements comply with prior Supreme Court case law and help to ensure "“ as Congress intended in enacting Section 1988 "“ that civil rights laws are vigorously enforced. Second, they contend that enhancements are needed to deter governments from opposing claims that, as in this case, even the government itself regards as meritorious. Third, they question whether the lodestar accurately reflects the value of legal services that attorneys provide to civil rights plaintiffs and to society in general and, thus, challenge the use of the lodestar as the barometer for measuring fee awards under Section 1988. Fourth, they claim that it would violate the purpose of Section 1988 to give courts discretion to lower fee awards for lack of success but, at the same time, give them almost no discretion to enhance awards for attorneys who obtain exceptional results and who do great work.
In sum, both sides present compelling policy arguments. But this case is still being argued before the Supreme Court, not Congress, and the Court's goal is to figure out whether Congress intended to let courts enhance attorney's fees awards when using the lodestar method. In doing that, it also must consider its prior decisions, in which the Court has heightened the importance of the lodestar while chipping away at the availability of enhancements.
It would be easy for the Court to continue that trend and prohibit enhancements based on results obtained and quality of representation, while directing district courts to adjust their lodestar calculations to accommodate those considerations. Indeed, the phrasing of the question presented suggests that the Court will do just that. But the oral argument may reveal whether some of the justices are willing to reconsider the importance of the lodestar or, at least, to recognize that calculating fees based solely on the lodestar may not fully serve the purpose of Section 1988 unless district judges have the option to enhance the award for truly exceptional results.