PERDUE v. KENNY A.
In 2005, the Georgia Department of Human Resources (DHR) and related state agencies settled a class action lawsuit with plaintiff foster children under the care of the DHR. However, the parties could not agree on the appropriate amount of attorneys' fees to be included in the settlement. Subsequently, the plaintiffs filed a motion in a Georgia federal district court for that court to make a fee determination and award. The plaintiffs argued that they were owed over $7 million for services rendered and also deserved a $7 million fee enhancement for a job well done. The district court largely agreed with the plaintiffs and awarded $10,522,405.08 in compensation, over $4 million of which was a fee enhancement. The district court reasoned that "the superb quality of counsel's representation far exceeded what could reasonably be expected for the standard hourly rates used to calculate the fee" and thus justified the enhancement.
On appeal, the Eleventh Circuit affirmed, holding that the district court did not abuse its discretion when it enhanced the lodestar figure (hours reasonably expended multiplied by a reasonable hourly rate) because of counsel's skill, commitment, dedication, and professionalism. The Court reasoned that the enhancement of the lodestar amount of attorney's fees may be allowed for superior representation coupled with the exceptional nature of results.
- Brief of the States of Alabama, Alaska, Arkansas, Colorado, Florida, Hawaii, Idaho, Indiana, Maine, Maryland, Massachusetts, Michigan, Nebraska, Nevada, New Hampshire, New Jersey, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, S
- Brief of Amicus Curiae Association County Commissioners of Georgia In Support of Petitioners
- Amicus Curiae Brief of National School Boards Association In Support of Petitioners
- Brief of Amici Curiae of the Lawyers’ Committee for Civil Rights Under Law, Aarp, Alliance for Justice, American Civil Liberties Union, Mexican American Legal Defense And Education Fund, National Disability Rights Network, National Partnership for Women A
- Brief for Law And Economics Scholars Lucian a. Bebchuk, Albert Choi, Andrew F. Daughety, John J. Donohue III, Theodore Eisenberg, Bruce L. Hay, Avery W. Katz, Herbert M. Kritzer, Jennifer F. Reinganum, And Kathryn Spier as Amici Curiae Supporting Responde
- Brief of the American Association for Justice, Public Justice, P.c., the National Employment Lawyers Association, And the Impact Fund as Amici Curiae In Support of Respondents
- Brief Amici Curiae of Liberty Legal Institute, American Center for Law And Justice, Cato Institute, Institute for Justice, Liberty Counsel, Alliance Defense Fund, James Madison Center for Free Speech In Support of Respondents
- Brief of Small Private Law Firms That Rely On Statutory Fee Awards In Public Interest Litigation as Amici Curiae In Support of Respondents
Can the reasonable attorneys' fee award under a federal fee-shifting statute ever be enhanced based solely on the quality of performance and results obtained?
Legal provision: 42 U. S. C. §1988
Yes. The 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. With Justice Samuel A. Alito writing for the majority, the Court rejected the contention that a fee determined by the lodestar method may not be enhanced in any situation. The Court then explained that there were circumstances where superior attorney performance is not adequately taken into account by the lodestar. However, the Court counseled that such enhancements should not be awarded without specific evidence that the lodestar fee would not have been "adequate to attract competent counsel."
Justice Anthony M. Kennedy wrote separately, concurring. He lauded the Court for rejecting that all enhancements under the lodestar method should be barred. Justice Clarence Thomas also wrote separately, concurring. He was careful to note that the majority opinion placed precise limitations on the availability of lodestar enhancements. Justice Stephen G. Breyer, joined by Justices John Paul Stevens, Ruth Bader Ginsburg, and Sonia Sotomayor, concurred in part and dissented in part. He agreed that lodestar enhancements may sometimes be permissible. However, he would have affirmed the Eleventh Circuit because the Supreme Court was too far removed from the fact intensive inquiry as to whether a fee enhancement in this case was warranted.
ORAL ARGUMENT OF MARK H. COHEN ON BEHALF OF THE PETITIONERS
Chief Justice John G. Roberts: We will hear argument next in Case 08-970, Perdue v. Kenny A. Counsel.
Mr. Cohen: Mr. Chief Justice, and may it please the Court: Plaintiff's counsel in this case earned a large fee award based on prevailing market hourly rates and a substantial number of hours expended.
However, the district court determined that the $6 million lodestar was insufficient to compensate them for the quality of their representation or their results obtained.
This Court has previously held that factors, such as novelty and complexity of the issues, contingency, and superior performance cannot be used to increase the lodestar amount because the factors are subsumed within that determination.
But because of this Court's indication that, in rare or exceptional circumstances, upward adjustments may be permissible, district courts, such as the one below, have used quality and results to increase lodestar awards, even though the -- the multiplication of the reasonable number of hours expended times the reasonable hourly rate constitutes a fully compensatory fee and serves the purpose of the statute, which is to attract competent counsel without providing a windfall.
Now, with respect to quality of representation, that normally involves two factors: the skill and experience of the attorney, and also the effort it takes to succeed in the case.
In this case, the lead counsel submitted affidavits indicating that they sought hourly rates that were within the prevailing market rates in the Atlanta market; and, in fact, lead counsel's market rate, the court found, was at the upper end of that market.
When the district court determined--
Justice Sonia Sotomayor: I'm sorry.
Could you repeat what the market was?
Was it the market for all attorneys or only for attorneys doing this type of work?
Mr. Cohen: --It was the market for attorneys with similar skill or experience doing similar work as these counsel did.
So what the court--
Justice Antonin Scalia: What is similar -- what is similar work?
Mr. Cohen: --Similar work would be Federal court work, where you -- involving class actions, for example.
But the focus is mostly on the skill and experience and reputation of the attorney.
Justice Antonin Scalia: Okay.
Mr. Cohen: What the court did in this case, though, was, rather than take those hourly rates, which were prevailing, which the record was clear were prevailing, the court determined the quality factor justified an increase because they advanced case expenses, because they were not paid on an ongoing basis, and because their fees were contingent upon the success of the case.
Justice Antonin Scalia: Well, that has nothing to do with the -- with the quality of the representation, does it?
Mr. Cohen: No, it doesn't, Your Honor.
Justice Antonin Scalia: Why didn't it name those factors as -- as the determinative factors, instead of saying, and therefore they should get more money for quality?
Mr. Cohen: Well, for whatever reason, the court determined to use contingency-related factors to increase the fee award based on the quality factor.
Justice Antonin Scalia: Okay.
They advanced -- they advanced money for experts--
Mr. Cohen: Correct.
Justice Antonin Scalia: --during the case.
The contingency, which we rejected as a -- as a basis.
And what was the third one?
Mr. Cohen: And the third one was that they weren't paid on an ongoing basis.
Justice Antonin Scalia: They weren't paid on--
Mr. Cohen: That's right.
But that is not a rare--
Justice Antonin Scalia: --Isn't that -- isn't that the same as contingency?
Mr. Cohen: --Yes, it is, Your Honor, and it's not a rare or exceptional circumstance when you're talking about a fee-shifting statute.
Justice Ruth Bader Ginsburg: Mr. Cohen, I thought this judge, Judge Shoob, said: These lawyers were amazingly good; I have never seen a better performance.
So don't we take him at his word?
I mean, he certainly talked about the quality of the performance of these lawyers.
Mr. Cohen: He did say that they exhibited the best skill and professionalism, Justice Ginsburg, that he had seen in his time on the bench.
Justice Ruth Bader Ginsburg: Yes.
Mr. Cohen: But I would submit to you that that is not a reason to enhance the lodestar because--
Justice Sonia Sotomayor: How about you get a second-year associate whose billing rate for 2 years of experience is $200, and a partner's rate is $500, and a judge says: This individual didn't perform like a 2-year associate; he did the quality and kind of work of someone far superior in years in skill and experience.
That would not, under your argument, entitle the court to give an enhancement?
Mr. Cohen: --No, it wouldn't, Your Honor, because, if that $200-an-hour associate was doing other work for other clients, the bill would be for $200 an hour, regardless of what the result would have been or how good that associate would have been.
Justice Ruth Bader Ginsburg: Mr. Cohen, you said in your brief that, in such a case, the prevailing party could argue that counsel should obtain a higher hourly rate in the litigation than the customary rate he or she charges in other cases, and that's the situation Justice Sotomayor inquired about.
But that sounds to me -- you take the second-year associate, pay him at the rate of the top partner because her performance was so outstanding.
That's an enhancement, but it isn't as transparent as the one that Judge Shoob gave.
But you -- this suggestion -- maybe you are going to retreat from it -- that it would be appropriate to take the second-year associate and pay at a higher hourly rate than the customary rate for that associate.
Mr. Cohen: --What I meant by that position in the brief, Your Honor, was that, in presenting affidavits to support the hourly rate of that associate, that associate may present hourly affidavits that the rate was between $200 and $300 per hour, and the judge could determine, because of how good he did, I'm going to give him at the upper end of that market.
Justice Sonia Sotomayor: But you haven't dealt with my hypothetical.
He didn't perform like a second-year associate.
He performed like a 15-year lawyer.
The difference is not with respect to skill and experience.
It's with respect to performance.
And so what Justice Ginsburg was asking is, what you are basically saying, the quality of that representation, even though it reflected more than the market one would look at objectively on the basis of the years of experience, that judge can't enhance, even though someone performed far above whatever else the market would consider his or her skills at the moment.
Mr. Cohen: --Well, remember, Your Honor, that, when the statute was enacted, it was said in the congressional reports that they wanted to compensate for the expenditure of time and to reimburse the plaintiff, if you will, for what the plaintiff put out in terms of expenses and fees.
Well, if you are -- if you are going to basically treat that second-year associate as a 15-year partner and award him a $500-an-hour rate, what you are actually doing is overcompensating that person for what the expenditure of time was and for what the actual fee they would have charged to their client was.
Justice Antonin Scalia: Well, I suppose the question under the statute is whether it would be a reasonable attorney's fee, and I guess one way to determine that is to ask whether it would be considered reasonable if a law firm that billed a client according to their regular hourly rates came in and said, but we're going to kick it up another -- you know, another $10,000 because this -- this second-year associate, boy, he's a whiz, and he performed like a senior partner.
So we are going to -- we are billing him at the $500 rate, instead of the $200.
Would -- would that be considered a reasonable attorney's fee?
Mr. Cohen: No, it wouldn't--
Justice Antonin Scalia: I didn't think so.
Mr. Cohen: --and no reasonable law firm would do that, which is why a judge would be beyond his discretion -- or her discretion--
Justice Sonia Sotomayor: That's not true.
Law firms get bonuses from clients all the time.
They get negotiated.
Some of the amici gave examples of what's happening in the -- what happens in the marketplace.
Mr. Cohen: --But those are private agreements that are entered into with a client.
Justice Sonia Sotomayor: So why can't the judge determine a reasonable fee in the same way the market does?
Mr. Cohen: That's not the -- I'm sorry.
That's not the traditional market, Your Honor.
The traditional market is the hourly rate that's envisioned by the lodestar.
We don't replicate all possible private fee agreements into fee-shifting statutes.
That's what this Court has said.
Justice Sonia Sotomayor: --No, but the -- but the Congress didn't use the per-hour lodestar--
Mr. Cohen: No.
Justice Sonia Sotomayor: --as the method.
If that's all it wanted, it could have, and there were suggestions that it consider limiting the -- the award to just a lodestar calculation.
So obviously Congress was thinking of something broader than just that.
Mr. Cohen: Well, Congress was--
Justice Sonia Sotomayor: That part of the market anyway.
Mr. Cohen: --I'm sorry.
Congress also was not thinking of replicating all possible private fee arrangements because they also indicated that the -- the amount of the fee should not be dependent on a proportion of the damage award.
Justice Sonia Sotomayor: Well, but that's why we have held in our cases that it should be a rare and exceptional circumstance.
The difference that we are engaged in is whether the quality of performance can ever constitute that rare exception that would justify a district court saying, you performed greater than what the market would have valued you at before your performance.
That's really what the issue is.
Mr. Cohen: Well, that's -- in answer to your hypothetical, again, in the market where you have an hourly rate for an associate, that's the hourly rate that that client is going to be billed by that law firm, and they are not going to have a results fee or a bonus fee because that attorney happened to do better.
The hourly rates--
Chief Justice John G. Roberts: Counsel, this -- this brilliant second-year associate we are talking about, the way these submissions to the Court are -- the way they're presented, do they carve out her contribution to a particular filing?
To the extent I have looked at them they have something like, you know, draft motion to dismiss, and the associate has 40 hours and the junior partner has 10 hours and the senior partner has 5 hours dedicated to that.
I mean, if the associate is doing -- in the hypothetical, is doing work at the partner level, how do you know that the brilliance isn't contributed by the 4 hours of the partner rather than the 40 hours of the associate?
Mr. Cohen: --You don't in the traditional way of billing that you are talking about, Your Honor.
Justice Antonin Scalia: Or, indeed, you don't know that the brilliance of the second-year associate enables the $500-an-hour partner to spend less time on the matter.
Presumably it does.
It's so great when it comes to him, he doesn't have to do much work.
Mr. Cohen: Well, that's true, Your Honor.
The other thing to point out is that when the submissions are made to the court, they are supposed to be broken down by tasks actually.
And here the district court considered the submissions not by what lawyer did what task, but how many hours were expended on individual tasks.
And when the court determined to actually lower the amount because of excessive hours, they looked at tasks and said, for summary judgment, for example, too many hours were expended.
So they -- the court doesn't normally look at lawyer doing particular tasks.
It looks at tasks being done by the lawyers in general.
Justice Anthony Kennedy: It is not clear to me what the district judge should do in making the lodestar calculation when he considers quality of performance.
I guess you are saying -- I think maybe you have already said -- that he can consider quality of performance, but only within the confines of what is a reasonable rate.
Mr. Cohen: That's correct, Your Honor.
Justice Anthony Kennedy: Because the brief for the Respondent said: Well, you know, you are really counting this at the front end, and if you can do that, why not put it in at the back end?
And I'm just having problems with that still.
Suppose the judge at the outset said: This quality of performance is so good that, so far as the lodestar is concerned, I think a reasonable fee is above the usual hourly rate.
Mr. Cohen: Well, I would submit, though, that when the judge decides how to do the lodestar rate, he is looking at the affidavits, talking about what the range of the market is for that area.
He's also looking at the number of hours reasonably expended.
Justice Anthony Kennedy: But -- so that in computing the lodestar rate, he cannot consider quality of performance?
Mr. Cohen: Quality of performance is built within, I would say subsumed within, the hourly rate and the number of hours expended, as this Court has said in Delaware Valley I.
Justice Anthony Kennedy: Well, then it seems to me you're saying that he does not look to actual quality of performance.
He just looks to market rates without reference to that.
I -- I--
Mr. Cohen: Well, but--
Justice Anthony Kennedy: --That's why I'm having -- I'm -- I mean, you know, the -- the question presented is -- is just quality of performance and results obtained; that's all we're talking about.
Mr. Cohen: --Correct.
Justice Anthony Kennedy: And I don't see why that can't be considered as part of the lodestar, and if it can be, then I don't see what the argument is about.
Mr. Cohen: --But superior performance is just the reason that hourly rates are what they are.
That's what this Court said in Pierce v. Underwood.
Justice Ruth Bader Ginsburg: But not necessarily--
Justice John Paul Stevens: But does that -- does that mean that the fee would be the same under the lodestar whether the lawyer won or lost?
Mr. Cohen: Well, no.
The -- the lawyer doesn't get a fee in a fee-shifting statute if he loses.
Justice John Paul Stevens: But if for some reason, if -- if you did had some reason to calculate it, theoretically it would be the same fee as if he had lost?
Mr. Cohen: That's correct.
Justice John Paul Stevens: And so the quality of performance really is totally irrelevant.
Mr. Cohen: As it is for the normal lawyer working on a private matter for a client.
Justice John Paul Stevens: Right.
Mr. Cohen: They get paid an hourly rate and it's win or lose.
And what the judge tried to do here is to say, well, I need to give them a little extra because their winning this case was dependent upon a contingency, and the factors that he built into that enhancement were contingency-related factors.
Justice Ruth Bader Ginsburg: --But we are going back to the judge, who did say that this was the best performance he ever saw.
So I can't credit just that it was just contingency.
But, first, you have clarified that what you said in your brief meant only the top range for a lawyer of this, period.
So this is more limited than -- than one might take it to be.
In some circuits, like the D.C. Circuit, the rate is set by the number of years that the person is out of law school, and there isn't any flexibility.
I mean, you give the 1-year associate so much, the 5-year associate so much.
So how in a system like that could you take into account quality at all?
Mr. Cohen: Well, but in the normal system, Your Honor -- and I would ask to reserve some time for rebuttal -- that that hourly rate that that first-year or second-year associate gets is the rate that they bill their clients.
They don't adjust it afterwards unless they have a special fee arrangement, as -- as Justice Sotomayor said.
They don't adjust it when they send the final bill and they say: This associate is the best -- did the best work that you have ever seen, and we're going to increase that hourly rate exponentially because of that work.
That's not the market with respect to billable rates.
Chief Justice John G. Roberts: Thank you, counsel.
Mr. Cohen: Thank you.
Chief Justice John G. Roberts: Mr. Shah.
ORAL ARGUMENT OF PRATIK A. SHAH ON BEHALF OF THE UNITED STATES, AS AMICUS CURIAE, SUPPORTING THE PETITIONERS
Mr. Shah: Mr. Chief Justice, and may it please the Court: Section 1988 permits reasonable attorney's fees.
That means going above and beyond the lodestar amount can be justified only if the lodestar is unreasonably low.
We submit that a lodestar based on prevailing market rates does not require a performance bonus on top of the lodestar to make an award reasonable.
Justice Antonin Scalia: You are saying we can never exceed the lodestar amount?
I mean, we have said in some cases that in extraordinary circumstances it can.
What are those extraordinary circumstances, or do you think there are none?
Mr. Shah: There are none for attorney performance, Your Honor.
There may be other circumstances--
Justice Antonin Scalia: Such as?
That's what I'm asking.
Mr. Shah: --Right.
Justice Antonin Scalia: What are you referring to, if not attorney performance?
Mr. Shah: Right.
The government sets out one example in our brief of where we think an upward enhancement might be appropriate, and that's where an attorney takes on a particularly unpopular client or cause that causes some external harm, external to the case, to his practice or income, where--
Chief Justice John G. Roberts: But it's one of the long-standing traditions of the bar that lawyers are expected to do that in the normal course.
So why would that be a special circumstance?
Mr. Shah: --Well, Your Honor, I think that circumstance is much more closely tied to the statutory purpose of section 1988, which is to attract competent counsel in this subset of--
Chief Justice John G. Roberts: Well, how do you tell -- how do you tell whether a client is popular or unpopular?
I mean, a lot of unpopular clients in the abstract sense are in fact -- they have a lot of support in the community.
I suppose one of the more unpopular clients these days is a Wall Street banker.
But I mean, you wouldn't say -- you wouldn't suggest that law firms charge more when they represent them?
Mr. Shah: --No, Your Honor.
I think what our -- what our enhancement would allow for, even if you can't make the ex ante determination that taking on this representation is going to cause me some special harm; that is, all my clients will leave my firm if I take on this case -- even if you don't know that before the fact, the fact that there is an ability for the court to give you an enhancement when that occurs -- remember, this is done after -- after the case is already complete is when the -- fee hearing determination is made.
The ability of a court to give that sort of compensation would provide an insurance, a guarantee to the attorney before they take on a case that if it turns out badly that -- that they will still get compensated.
Justice Antonin Scalia: You think that's what we had in mind, huh?
You think that's what we had in mind when we said they are extraordinary circumstances?
Mr. Shah: Well -- well, Your Honor, I--
Justice Antonin Scalia: I think it's very imaginative, but I would never--
--but I would never have thought of it, and I doubt whether we did.
Mr. Shah: --Well, it is -- Your Honor, it is one of the 10 -- one of the Johnson factors set forth, so it's not coming out of thin air.
And I think it is--
Justice Ruth Bader Ginsburg: Is -- is there another example?
I mean, you -- you are saying the rule isn't never; it is sometimes.
And you have given us one sometime.
Is there any other illustration?
Mr. Shah: --Your Honor, that is the only one that I think is left after this Court's fee-setting jurisprudence over the last 25 years.
It has consistently knocked down other bases for an enhancement such as complexity of issues, novelty of issues, contingency risk, delayed payment.
All of those other grounds of potential enhancement that the legislative history refers to have been categorically prohibited by this Court's jurisprudence.
I think that--
Justice Ruth Bader Ginsburg: How about a downward adjustment?
You have the hourly rate, the number of hours, and the judge, after trimming the hours, then says: This has been a case, even though they prevailed, the lawyer wasn't prepared; I am not going to give the hourly rate.
Can a judge adjust the lodestar down for poor performance?
Mr. Shah: --Your Honor, I think the limited circumstances which allow for a downward adjustment would be those set forth in this Court's decision in Hensley.
I don't think that poor performance alone would justify a downward departure--
Justice Ruth Bader Ginsburg: Hensley is you lost on an issue, so you don't get paid for what you've done.
Mr. Shah: --Right.
So if there were certain claims that the poor performance led -- led the plaintiff to be unsuccessful on certain claims but not all the claims, I think a downward departure would be appropriate.
Justice Ruth Bader Ginsburg: But the plaintiff -- the plaintiff prevailed on everything.
It's just that the judge said this was a really poor -- poor performance.
Mr. Shah: No, Your Honor, I don't think a downward departure would be appropriate in that circumstance, because that's what the -- the prevailing market would not allow for a downward departure.
Normally, these are standard--
Justice John Paul Stevens: Even if the judge found as a fact that this lawyer spent 50 hours doing what any good lawyer could do in 5 hours?
Mr. Shah: --Well -- well, Your Honor, that would be taken care of in the setting of the lodestar rate.
Remember, there are two components--
Justice John Paul Stevens: I don't -- I don't see how that is set forth in the lodestar rate.
Mr. Shah: --Well, it -- not in the lodestar rate, but in the number of reasonable -- there are two components to the lodestar calculation: the number of -- number of hours reasonably spent on the matter and the reasonable hourly rate.
The situation you posit would be addressed by a downward adjustment of the number of hours reasonably spent working on the case.
If the judge made a determination that any competent lawyer could have done this in 10 hours, he would not credit 50 hours of work.
And that's -- that's how that situation would be taken care of.
Justice Anthony Kennedy: For extraordinary circumstances, what about a very, very popular cause and he wins and they are beating his door down?
Can we reduce it for that?
Mr. Shah: No, Your Honor, that would not require a reduction.
That would be an extra award for the attorney taking on that type of -- of case.
Justice Antonin Scalia: Well, I mean, what is sauce for the goose is sauce for the gander.
I mean, if -- if you get rewarded for unpopularity, you ought to be get penalized for popularity.
You got a lot more clients because of this case.
Mr. Shah: Well, Your Honor, I don't think there is any basis in the -- in the private market for that sort of downward adjustment.
Justice Sotomayor, if I can address your concern about these alternative arrangements that -- that occur in -- that are starting to emerge -- at least Respondents suggest in their brief to this Court by citing a few newspaper articles and the proverbial word on the street that these are an emerging trend.
First of all, there's no -- absolutely no evidence in the record in this case that those type of arrangements were available in the relevant market.
But even if they were, those sort of alternative arrangements are essentially modified contingency arrangements.
And this is made most clear in Respondents' own amicus brief, the brief of the law and economic scholars.
And this is at page 10 and 11 of their brief.
They call these partial contingency or hybrid contingency arrangements.
It's not the same standard hourly rate and then a client decides to throw in a kicker of a million dollar bonus.
Rather, these are discounted rates with a success bonus, essentially a modified form of contingency arrangement.
They are prohibited for exactly the same reason that this Court prohibited a contingency risk enhancement in Dague.
The same reasons would prohibit relying on those sort of alternative arrangements to provide an attorney enhancement for performance.
Justice Sonia Sotomayor: One of the purposes of Congress -- one of the purposes of Congress was to ensure that litigants under these fee-shifting statutes could attract competent counsel, correct?
Mr. Shah: Yes, Your Honor.
Justice Sonia Sotomayor: If the market doesn't give them attorneys to start with because there are so many risks involved in this process and it sets a reduced fee because of those risks, how do you attract competent counsel?
How do you attract counsel that is better than the norm in that field to pursue as private attorney generals cases that Congress has determined are worthy of being pursued, unless you have a quality adjustment factor?
Mr. Shah: Two responses, Your Honor: First, the problem that you posit about attorneys having -- being deterred by having to absorb, you know, the -- the upfront outlay of significant expert expenses or to having absorbed the contingency risks, those are problems created by this Court's precedent in Dague, not before this Court now.
Justice Sonia Sotomayor: That doesn't mean Dague was right, right?
Mr. Shah: Well, Your Honor, no one has asked--
Justice Sonia Sotomayor: No one is arguing a different point?
Mr. Shah: --No one in this case has asked the Court to revisit Dague.
But more -- more to the point of your question, the type -- even accepting Respondents' formulation of this enhancement, it would only be available in the rare and exceptional case.
And no reasonable attorney making an ex ante determination to whether to take on a representation would rely on the speculative and remote possibility that the district judge is going to have found this to be one of the best cases he has ever seen in making that calculation.
Respondents' own numbers suggest that these are granted less than one time -- once a year.
That suggests that no reasonable attorney would take that into consideration, and it does not, in fact, further the statutory purpose in that event of attracting competent counsel.
I would like to make one last point, and this is to bring us back to the facts of this case.
I think Respondents' own trial counsel -- the discussion that they give of the lodestar rates used in this case I think is particularly telling.
And this is the affidavit of Marcia Lowry, who was the lead plaintiff's trial counsel, and this was submitted during the fee -- setting hearing, and the relevant excerpt appears on page 41 of the Joint Appendix.
And I want to read from paragraph 25, and here's what she has to say about the rates used by the court:
"The standard hourly rates reflected in Exhibit 2. "
--and those are the rates used by the district court --
"are fair, reasonable and consistent with the hourly rates in the Atlanta market for the price of legal services of comparable quality rendered in cases demanding similar skill, judgment, and performance. "
Now, the affidavit goes on to say that the rates are still too low for the other factors that Mr. Cohen discussed -- contingency risk, delayed payment, expert fees -- but not for attorney performance.
Chief Justice John G. Roberts: Thank you, counsel.
Mr. Shah: Thank you, Your Honor.
Chief Justice John G. Roberts: Mr. Clement.
ORAL ARGUMENT OF PAUL D. CLEMENT ON BEHALF OF THE RESPONDENTS
Mr. Clement: Thank you, Mr. Chief Justice, and may it please the Court: Let me begin with the colloquy that involved Justices Ginsburg and Justice Kennedy about the rates and whether you can have sort of pre-enhanced rates as part of the lodestar or whether you can only do the enhancement after the fact.
At the end of the day, as long as it is established in this case that you can have an enhancement for quality, I suppose that my -- my clients would be satisfied.
The point is, though, that the preexisting law in the Eleventh Circuit and most circuits does not allow for a pre-enhanced rate to be used to calculate the lodestar.
They are either done completely mechanically, as Justice Ginsburg suggests -- the Laffey index in the D.C. Circuit -- or they are done through a simple calculation of the prevailing market rates.
Justice Samuel Alito: But sometimes there's a great advantage in doing things mechanically, because it -- it provides an element of fairness.
And I'll tell you what troubles me about this, and maybe you can convince me that I shouldn't be troubled by it.
Here the district judge in effect takes four plus million dollars from the taxpayers of Georgia and -- and awards it above the lodestar calculation to these attorneys and says -- and I -- I certainly take him at his word -- this was the best performance I have seen in 28 years.
But it seems totally standardless, and I see no way of policing it, and I see a great danger that trial judges are going to use this as a way of favoring their favorite nonprofit foundation or their favorite cause or their favorite attorneys, because they think they generally do good work.
And this is not -- this is not like private litigation where the money is coming out of the pocket of a corporation.
It's coming out of the pocket of taxpayers.
So that is very troubling.
And I don't know how you can provide standards for determining whether this kind of transfer is based on anything reasonable.
Mr. Clement: Well, Justice Alito, let me say that I don't think that you need any more standards for the possibility of an upward departure than you need for the possibility of a downward departure.
And this Court has already held in Farrar v. Hobby that the results obtained is an adequate basis for departure, and not a small departure.
In Farrar v. Hobby, the lodestar amount, the mechanical calculation that we're talking about, was $280,000.
What was the reasonable attorney's fee?
Justice Antonin Scalia: Well, but wait.
That's pretty objective: results obtained.
I mean, if, you know, the -- what was sought in the complaint was 100, and in fact you got only 30, you are still a prevailing party, but you shouldn't -- you shouldn't be compensated as though you got everything that was sought.
I think that's much more objective than whether -- whether this attorney is the best one I've seen in 28 years.
I have another problem with it.
I don't like judges -- it's certainly not in the tradition of the bench to comment upon the performance of lawyers.
I can't tell you how often I would like to give a separate grade for--
--for the lawyer who won a case.
You know, one grade for the case and the other for the lawyer.
But we don't do that.
And if you do this going up, you've got to do it going down.
And you could expect the judge to say: This is the worst performance I have seen in 28 years.
Judges don't do that in our system, and I don't think -- I don't think we should set up a mechanism that induces them to do it.
Mr. Clement: --Well, two things, Your Honor.
I mean, the results obtained is one of the two factors that are at issue in this case.
And I think results obtained can be objective and be a basis for an upward adjustment as well as a downward adjustment.
As you heard the lawyer in the earlier case say, you know, in a complaint, it is a wish list.
And it's a rare case where the attorney gets everything they ask for in the complaint.
This is that rare case where everything that was asked for in the complaint was obtained.
So that's one factor, Your Honor.
Chief Justice John G. Roberts: I will let you answer your second point, but just on that, I don't understand the concept of extraordinary success or results obtained.
The results that are obtained are presumably the results that are dictated or command or required under the law.
And it's not like, well, you had a really good attorney, so I'm going to say the law means this, which gives you a lot more, but if you had a bad attorney I would say the law has this and so he doesn't get a multiplier.
The results obtained under our theory should be what the law requires, and not different results because you have different lawyers.
Mr. Clement: Well, Mr. Chief Justice, I mean, I defer to you, but I'm not sure that comports with my experience.
I have seen lawyers come into this Court and concede a point in oral argument, and I have seen that prominently featured in this Court's opinion, so it does seem to me that sometimes the quality of the performance and the results obtained do depend on the lawyer's performance and are not foreordained just by the four corners of the complaint.
And so I think, again--
Chief Justice John G. Roberts: Well, but what does a judge say when he said, you have achieved extraordinary results?
That if you weren't there, I would have made a mistake on the law?
Mr. Clement: --No, I think what he says is, in the hands of another counsel, the relief that was obtained might have been significantly less.
This was an enormous--
Chief Justice John G. Roberts: Well, I guess that's saying the same thing I said, which if it weren't for how good you are, I would have made a mistake.
Mr. Clement: --Well, maybe not -- no, not how good.
I mean, this case settled.
With a different lawyer for the plaintiffs in this case than--
Chief Justice John G. Roberts: Maybe we have a different perspective.
You think the lawyers are responsible for a good result, and I think the judges are.
Mr. Clement: --And maybe your perspective's changed, Your Honor.
But I would say certainly in the context of a consent decree, when to give up, when to fight further, is going to be factored into the results.
And I think it's a fair point that a judge in today's system, especially in the context of class relief like this, sees a lot of cases that end up with a coupon settlement that really doesn't do any good for the class.
Justice Samuel Alito: Maybe -- maybe your perspective has changed too, Mr. Clement.
But your argument is that, you know, for $495 an hour you really can't get a good lawyer?
You need to have -- you need to pay more than that?
Mr. Clement: --Well, on that my perspective has changed, Your Honor.
But let me say two things: One is, less than 10 percent of the total rates here, the total compensable hours here, were top-of-the-market rates.
Only the two lead counsel were compensated, at sort of $495 and $450 an hour.
If you want to talk about the -- the Lowry declaration, which is one thing that Mr. Shah brought up, what he quoted from was essentially the conclusion of that, where as part of the existing Eleventh Circuit precedent that looks to prevailing rates in the Atlanta market, there is a recitation that that is the sort of the prevailing rate consistent with the quality.
That's essentially something that the Eleventh Circuit requires you to say.
I think the more relevant part of that declaration is at Joint Appendix at page 35, where Ms. Lowry points out that as a matter of fact these rates in the Atlanta market do nothing to account for the fact that she has to pay New York overhead, and that her real rates are a national rate based on providing a service that almost no one else in the country can provide.
This is really a unique--
Justice Stephen G. Breyer: What is the overhead?
Mr. Clement: --What's that?
Justice Stephen G. Breyer: What is the overhead?
I mean, that's something that I find interesting and important, and I can't find it anywhere.
The numbers began to bother me in the same way they did with Justice Alito.
I'm thinking: There are 30,000 hours.
They got 10.5 million.
That translates into, what is it, $350 an hour.
Now, if the lawyer works for 2,000 hours of the year, which is a little high, he is being compensated at $700,000 on average in this case.
But he has to pay overhead.
So what's that?
Mr. Clement: Justice Breyer, the numbers aren't broken down.
But I can tell you--
Justice Stephen G. Breyer: Well, I mean, if you have any rough idea at all, because I think if it's anywhere near $700,000 on average, you say to a taxpayer: You are going to pay this, and that's more money than 99 percent of the taxpayers hope to see in their lives, and suddenly they are paying that money to somebody, which is -- I could say: Okay, pay them 400,000.
That's what he would get as the average fee for the toppest, most top lawyer.
And that's, you know, pretty high.
And -- but $700,000 a year for a lawyer.
And that's what this judge paid.
Now, what is it that came out of that?
That's what I want to know before I make up my mind, frankly.
And I'm going to try to look it up, but I'm trying -- I'm trying to get a rough idea here.
Mr. Clement: --Well, what I think you can say for sure, Justice Breyer, is that what came out of that is a lot more if you have your office in New York--
Justice Stephen G. Breyer: Oh, I know, but--
Mr. Clement: --than if you have your office in Atlanta.
Justice Stephen G. Breyer: --that doesn't help me, and the reason it doesn't help me is because if it's a very, very high number in dollars per year, then I am tempted to think: Well, very high is enough.
You don't need very, very, very high.
You see my point?
Mr. Clement: I do, Justice Breyer, but I also think the question presented here is whether you can ever have an enhancement.
Justice Stephen G. Breyer: Yes.
I would be saying: Be satisfied forever with very, very high, the most top pay that any top lawyer gets; do not want even more than that.
And if in fact I doubt that I have really made a difference to incentives on that one, for the reason that the Solicitor General said -- and my goodness, how do we explain this to the average person?
That -- those are the questions that are genuinely going through my mind.
I haven't made up my mind how I will come out in this case.
So it's not a kind of putting this to you.
I don't know.
Mr. Clement: Right.
Well, Justice Breyer, let me take issue, though, with the hypothetical that all these lawyers are getting the top, top rate.
That's not -- that's not what is happening, either in this case or in general.
And one of the things, if you look out at the circuits, you will see that, because this Court has always said that the lodestar method is a two-step process, the first step, as this Court has repeatedly described it, is an estimate.
Because of that, the circuits have some looseness as to how they go about estimating the reasonable hourly rate.
They do not say: Let's take the tippy-tip-top rate and use that to calculate the rate.
They use a variety of formulas.
As I say, the Laffey index in the D.C. Circuit is quite formulistic and doesn't -- it puts you in three-year groups and doesn't change your compensation between your 8th and 11th year and your 12th and 20th year, so it's very mechanical.
In some circuits, you can get a national rate.
So in a circuit -- if this case would have been litigated in Cincinnati in the Sixth Circuit, then Ms. Lowry may have been able to get $700 an hour, which is a national rate.
On the other hand, because this was in Atlanta, she was able to get the prevailing market rate in Atlanta, which was 495.
Chief Justice John G. Roberts: Counsel, this lawyer -- I'm sorry, this judge said they were extraordinarily good, but, I mean, where's the cutoff?
If the judge said, this is in the top 10 lawyers I've ever seen, or the top 20, where do you get an enhancement and where do you not?
Mr. Clement: --Well, Mr. Chief Justice--
Chief Justice John G. Roberts: Yes, that's the thing.
It's hard to tell.
Mr. Clement: --No, no.
But I don't mean to -- I would start with this Court's cases that say it is to be in a rare case.
Now, they say that repeatedly, so I take this Court at its word, and I would think that the rare case might--
Chief Justice John G. Roberts: Well, for 28 years -- the judge was on the bench 28 years, right?
Well, if you are in the top 28, is that a rare case or not?
It's once a year.
Mr. Clement: --Well -- but he had one case in 28 years, so, I mean, whatever the denominator is--
Chief Justice John G. Roberts: I know, but we are trying--
Mr. Clement: --it's a huge denominator, and this--
Chief Justice John G. Roberts: --We are trying to establish a principle, and other judges are going to have to follow this.
And do they think, well, this was really good, but it wasn't as good as that law firm or lawyers we had 3 years ago; they were really good.
Mr. Clement: --I mean, actually, I don't think that's a crazy way to approach it, which is this really is supposed to be something that's reserved for the rare case.
I am not -- I don't want to see--
Chief Justice John G. Roberts: And I assume -- how long -- how does a judge, who is on the bench in his or her first year, do this?
Well, this is the best lawyer I've had in the eight months I have been here.
But how does he or she know that that -- that may be as good as it gets, for the next 28 years?
Mr. Clement: --Well, maybe the judge stays his or her hand in the first year.
I mean, this is a discretionary judgment.
There is an element of discretion in this, that starts with the statutory text -- which is "may", not "must" -- and this Court has recognized time and time again that the--
Justice Antonin Scalia: You say discretion.
I say randomness.
I mean, that is not a matter of discretion.
It is a matter of randomness.
How -- how long has the judge who observed this case been on the bench?
If he has been there just a couple of years, kiss good-bye to your -- your extra money for being excellent.
That's not discretion.
Mr. Clement: --Well, no, I think it's a -- it's a discretionary judgment.
I mean, the -- the district courts are going to be exercising that discretion guided by what this Court has said.
This Court has said it should be the rare case in which there's an enhancement.
I think they are entitled to take this case -- this Court at its word, and I think there's a reason, by the way, as this Court has rejected enhancement based on other factors, that it has always held out the possibility for the enhancement in the rare case, for the quality of service and the excellence of results.
The reason is, if you take that off the table, then the statute becomes unrecognizable to the Congress that passed it.
This is not a difficult question about whether the Congress that passed the statute intended for there to be bonuses or enhancements based on exceptional quality and results.
Those of you that look to legislative history, in this context of interpreting this statute, have repeatedly looked to the Senate report.
The Senate report provides three exemplary cases as to how you should correctly apply an attorney's fee.
Two of those three cases applied enhancements based on exceptional performance and results.
Justice Antonin Scalia: So you want this Court to look to those cases -- you know, it's the world turned upside down.
Instead of the lower courts reading our cases, we have to read lower court cases to decide what this statute means.
Is that it?
Mr. Clement: Well, two -- two responses, Justice Scalia.
Justice Antonin Scalia: I don't do that.
Mr. Clement: I know you don't, and I know that because I read your dissent -- or your concurrence--
Justice Antonin Scalia: Yes.
Mr. Clement: --in Blanchard.
The rest of the Court did that in Blanchard, and I think it should continue to do that because you are interpreting a word like "reasonable", and I think have you to look somewhere, and the -- and the Senate report provides guidance.
The second thing though is, Justice Scalia, you, in a number of contexts, have pointed out that, if you don't look to legislative history, it's okay to look at how a term was interpreted by courts at the time that Congress adopted it.
And that's another way to get at the same result, which is, in this is case--
Justice Stephen G. Breyer: Should I -- should I look at the fact that, in the early 1970s, when this was done, legal fees were not quite so high?
And perhaps, comparatively so, they weren't quite so high, either.
Mr. Clement: --Well, Justice Breyer, I would say that -- you know, you can look to the fact that we have had a lot of inflation since then.
You can make the--
Justice Stephen G. Breyer: Not just inflation.
I think the discrepancy between these top legal fees and the fee of the average person -- or the work of the average person, the average wage for a family of four has changed quite a lot.
I suspect that's true, but I could look it up.
But should I look it up?
Mr. Clement: --I don't think you should because, again, what Congress said it was trying to do here was not to try to make people indifferent between whether they became lawyers or not.
They were looking at lawyers and they were trying to determine, we want to essentially make you indifferent between engaging in civil rights work and other complex civil litigation, like antitrust, and if that--
Justice Antonin Scalia: Of course, this statute was passed before we adopted the lodestar approach, wasn't it?
Mr. Clement: --Before you adopted the lodestar, sure.
Justice Antonin Scalia: Before this Court--
Mr. Clement: But not before the lower courts had adopted the lodestar, and which way does that cut?
I think that cuts very strongly against adopting a rule that says, the lodestar is not just a guiding principle but is an absolute ceiling on the award.
Justice Antonin Scalia: --No.
I would think it cuts the other way.
Congress was not contemplating that we would adopt approach -- an approach which takes into account the excellence of counsel.
Mr. Clement: Well, again, Your Honor, with respect, I don't think, in any direct way, the lodestar takes into account the quality of counsel.
Prevailing market rates, as Justice Stevens indicated, win or lose -- those are the prevailing market rates.
So I don't think it directly takes it into Account.
And, the question here is whether you can ever take that into account.
And I actually think, if you are looking for guidance, you can look to the early Third Circuit cases that were decided before Congress passed the statute, and what those Third Circuit cases decided -- there was an en banc case, Lindy II, by Judge Aldisert and a panel opinion in Merola by Judge Garth.
And what those decisions did is they said the great thing about having a lodestar with adjustments is that, in the mine run of cases, the rates are going to get quality of performance results about right.
But what they--
Justice Samuel Alito: But you, yourself, make the point in your brief that the -- that legal fees are changing.
And do you think that's relevant?
Are they going up?
Or are they going down now?
Mr. Clement: --Well, I think, right now, they are sort of, at best, staying stagnant and maybe going down a little bit.
I think this Court has always looked to the market in setting rates a bit.
I think the main thing the fact that rates are not going up in sort of an inevitable cycle suggests to me is that this Court has to recognize that the one basis for enhancement that it has already consistently recognized, which is an enhancement for delay, which is not the same thing as contingency.
This Court recognized that enhancement for delay was appropriate in the case of Missouri v. Jenkins.
Now, this Court indicated that you can take account for delay, either through current rates, instead of historical rates, or through an enhancement.
I think the one thing we know now is you have to be careful about using current rates to take into account for delay because the assumption that that would work was based on this assumption that rates inevitably go up.
Chief Justice John G. Roberts: There is a flip side to the unpopular case situation the S.G. talked about, which is lawyers and law firms sometimes take on a particular high-profile case to increase their profile, and they would have done it for a lot less.
We have lawyers who argue here, who are doing it for free, because it's a big deal to be recognized as doing something in the Supreme Court.
So when you use prevailing rates with respect to that type of work, you are overcompensating them.
Mr. Clement: Well -- and maybe that's right, and maybe there should be adjustment in those cases.
Maybe you shouldn't just take the prevailing rate for the general provision of services.
You should take into account that, actually, you have lawyers here who are willing to do it for free.
Sometimes, I think you get what you pay for, but that's a different subject.
I do think that you can make adjustments, and that's what is -- think about the term "the lodestar".
I mean, the lodestar is not a destination.
It's not a complete calculation.
The lodestar is a guiding light.
It gets you--
Chief Justice John G. Roberts: Well, it's also not the term Congress used.
Mr. Clement: --It's not, but if we want to resort to what Congress had in mind, I think that only favors the idea that you would have adjustments upward and downward.
Chief Justice John G. Roberts: I want to resort to what Congress said, which was--
Mr. Clement: And the term is "reasonable", and, again, I think, if you were looking for fertile ground to derive a bright-line rule that you never, ever have an enhancement for quality--
Justice Sonia Sotomayor: Aren't you -- most of your arguments are suggesting that the counter -- that your adversary is now limiting, that the adjustment should be made -- tied to something, and that something would be the actual rate.
And most of the factors you are talking about -- whether the person's a national attorney with overhead or whether that person's a -- has done better work -- the example I used, a second-year associate, could be adjusted just in the rate, and that would give you a grounded place to make a judgment about the exercise of a court's discretion.
Why isn't that a more structured, more--
Mr. Clement: --Well, I guess what I would say, Justice Sotomayor, is that that potentially could be more structured.
I'm not sure it inherently is, which is to say I think -- you know, in some ways, it may be more transparent to say, we are just going to use the Laffey index, or we are going to use the prevailing market rates, and then we are really going to hone in on the issue of quality and exceptional results after the fact.
I think, if the Court wants to suggest that you should take those factors into account in setting the rate -- and the rate should not be just a rigidly calculated rate that comes from an index or comes from the prevailing market -- I think the one thing I would very much want to urge on you is, if you take that route, that you allow a remand for an opportunity for my clients to make that showing to the district court because there's no question, from the record here, that they were responding to extant law of the Eleventh Circuit.
And that extant law did not provide that possibility for adjustment with the prevailing market rates.
Justice Ruth Bader Ginsburg: But Mr. Cohen said that that would be a very limited adjustment.
He wasn't contemplating in his suggestion in his brief that you could go outside what the associate would get; you just go to the top.
Let's say it could be 200 to 400, you give him 400, but you don't give him 500.
Justice Alito asked -- he was concerned about standard list enhancements, so one question is when do you enhance?
Another is, in this case it was 75 percent.
How do you know what's the right multiplier?
That -- the concern is you are going to have variations from district judge to district judge in how good the performance was, in what is the appropriate multiplier.
Are there any handles that would prevent this from becoming just random, just rudderless?
Mr. Clement: --Well, Justice Ginsburg, first let me say that I had understood, and perhaps this was wishful thinking, but I had understood that Justice Sotomayor was suggesting the possibility of a broader inquiry at the rate-setting stage, not just a narrow focus sort of within bands.
So I just -- that's what I was trying to respond to.
As to trying to cabin the discretion, let me try to offer some thoughts about cabining the discretion, but let me also say that, to paraphrase Justice Scalia, what sauce for the goose is sauce for the gander.
I mean, this Court has said that there are bases for downward departures, and including downward departures all the way to zero in Farrar v. Hobby, and the Court has not been overly concerned about cabining that discretion.
And that kind of discretion goes on downward all the time.
It can take place in the terms of looking at a particular motion and saying that wasn't a very good motion; you were wasting your time.
There are a variety of ways that that can be taken into account downward, and this Court hasn't felt that concerned about cabining the discretion.
Now, if this Court wants to cabin the discretion, I think certainly there's two factors here: There's the quality of service and there is the exceptional results.
As to the quality of service, I would certainly say that you ought not to have a rigid rule, which is essentially what Petitioners are asking for, that would cap you with prevailing market rates.
There ought to be some flexibility for that, for the judge to take into account the actual experience that the judge has with the lawyers in the courtroom.
The second thing I would say is that I do think it ought to be fair, if you are going to do this kind of calculation, that you don't base it on something like the Laffey index, and you don't base it on a rule that a national expert can never get a national prevailing rate, but even though they are sitting in New York, they have to get the top rate only in the Atlanta market.
I think those differences should be taken into account on the compensation side of things.
And then if at some point, the judge wants to say, and I want to give either this rate or this multiplier for the quality of the performance, then that's something that you can certainly assess.
As to the exceptional results, I also think there, too, you can focus on specific factors of the case before you, and you can say things.
Now, I would say, for example in this case, part of the reason the results are exceptional -- I would point to at least three things: One is the advance of capital here in order to take on a case of this breadth and undertaking is really an exceptional undertaking.
And if you look at the Goldberg declaration at Joint Appendix 75, that declaration points out that a smaller firm would have essentially been bankrupted by this case.
Justice Anthony Kennedy: Were -- were expert witness fees reimbursable in this case, under -- under the statute?
I noticed they were cut down, but I didn't know if he cut out all of them or just part of them.
Mr. Clement: The district judge cut -- cut out all of them following this Court's decision in Casey, Your Honor.
Justice Anthony Kennedy: All right.
Mr. Clement: There was still, though, I should say, something on the order of $750,000 in reimbursable expenses that had to be advanced.
It's worth pointing out that one factor that Judge Shoob took into account in giving an enhancement here was the delay in payment.
That is a permissible factor under Missouri v. Jenkins, and even if you use current rates, that doesn't do anything to compensate you for the delay in reimbursement of expenses.
Chief Justice John G. Roberts: --Oh, I think it does.
I think rates are set with -- based on a law firm's record of -- I mean, just because you bill a client doesn't mean that they are going to pay or that they are going to pay at what you billed them.
And I think the rates are set to take into account that over the past year whatever you have a realization rate of -- whatever, 80 percent or 85 percent.
Mr. Clement: Oh, I was just making a narrow point, Mr. Chief Justice, which is the current rates don't take into account the fact that there was a delay in repayment for reimbursable expenses.
Some of these expenses were paid out 4 years ago, I mean at the time of the fee calculation.
You don't get sort of, you know, today's copying expenses or today's FedEx expenses.
You get the expenses at the time you did them, and you don't get any prejudgment interest on that.
So that is one thing Judge Shoob thought ought to be compensated here.
Again, that's one factor that makes this exceptional.
Another factor is that this was an entrenched problem that they were dealing with.
In 1989 the foster care child system in Georgia was described as a crisis; by 1996 it had been upgraded to a catastrophe.
This is a very difficult problem.
The last thing is the scope of the relief, which really is, I think, very broad here and that's what Judge Shoob was recognizing.
And as I said earlier, I do think in an era of coupon settlements, a judge is entitled to look at a case like this and say this is really a remarkable result that has been achieved here, and the normal rates -- normal prevailing market rates don't compensate for this kind of result.
So I do think there are things that the Court could point to in this case or in other cases to try to cabin that discretion.
I do think, though, that discretion is an inherent feature of this statutory regime, and this Court has tolerated a degree of discretion in a variety of contexts including with respect in the area of downward departures.
I do want to get, before I sit down, this point about getting the incentives right, because one thing that Congress was clearly very concerned about was getting the incentive rights for counsel.
And if you accept Petitioner's position that the lodestar is a ceiling and not something that is subject to adjustment up or down, then what you are telling lawyers is the that the maximum amount they can make in a civil rights case is the minimum amount they can make in a different case, where by the way they will get paid every 30 days and their expenses will get reimbursed in real time.
Then you are also telling them something else, which is, that's actually just a starter because there are multiple ways for district courts to cut down on the lodestar amount, either because you spent too much time on this or we didn't like your travel expenditures.
And so there are multiple ways for those hours to be cut down.
If you accept Petitioner's rule and there is no way to get those rates bumped up in any circumstances, then you are basically guaranteeing that, as I say, the maximum you can make in a civil rights is the minimum you can make in any other kind of cases.
Chief Justice John G. Roberts: Well, but there -- general counsel do that all the time when they get a bill from a law firm.
They cut it down.
They say you spent -- you've spent too much time with this associate only because he or she is a first-year associate and is learning and training; I'm not going to pay for that.
Mr. Clement: Two things, Mr. Chief--
Chief Justice John G. Roberts: So it's the same -- it's the same thing that happens when a district court looks at the -- the lodestar and cuts it down.
Mr. Clement: --Two things, Mr. Chief Justice: One, it's the law of the Eleventh Circuit and I think every circuit that before submitting your fees to the court you are supposed to use billing judgment and take care of some of those things, approximating maybe what your client would do for you.
But, second, and I think more tellingly, the client may do that to you.
The client doesn't have the help of your opposing counsel to egg them on and give them suggestions, and that's what a district court does in the context of one of these cases.
So I really think, as a practical matter, you are systematically undercompensating counsel.
And I mean, if you want to take into account practicalities, I am not here to reargue the Dague case, but if you want to talk about practicalities, the fact that all of these cases are contingency cases and the rational market for those would be much higher than -- if you are worried about sort of windfalls for plaintiff counsel in these kind of cases, you really can worry about something else, with all due respect, because the combined effect of Dague and Casey makes it very difficult to get sort of comparable compensation.
As I say, I am not here to reargue those cases.
I do think, frankly, Dague is distinguishable because there you had the prevailing party language.
The other thing about Dague that's distinguishable that I will say before I sit down is one of this Court's concerns in Dague was creating an asymmetry.
Blanchard had already said that contingency fees could not cap your awards; they didn't want to have an asymmetrical system.
That's exactly what Petitioners are asking you for, is a completely asymmetrical system.
Farrar v. Hobby says you can reduce downwards based on exceptionally poor results.
There would be no basis whatsoever to even adjust a little bit under their rule for exceptional results on the upside.
Chief Justice John G. Roberts: Thank you Mr. Clement.
Mr. Cohen, you have 4 minutes.
REBUTTAL ARGUMENT OF MARK H. COHEN ON BEHALF OF THE PETITIONERS
Mr. Cohen: Than you, Your Honor.
I would like to start out with the little joke that Mr. Clement made, is that you get what you pay for.
You do get what you pay for.
Is because I am getting paid half my hourly rate in this case means I exert half of what I would do for another client who would pay my full rate?
Because my professional responsibility is that when I'm hired by a client for an hourly rate, I'm supposed to represent that client zealously within the bounds of the law.
So to say that in a case like this that these lawyers would have done a different type of job had they not known there was a possibility of a quality enhancement is an insult, frankly, to Ms. Lowry and her group, because they do this all the time.
They do it without getting an enhancement; they never asked for one before.
And, clearly, if this Court determines that a quality enhancement is going to be available even in rare or exceptional circumstances, you are going to have arbitrary results and you are going to have inconsistency which the analytical part of the lodestar guards against.
Second point I would make is that Mr. Clement mentioned about the New York rates and the overhead.
That was not the rationale for the district court's awarding a quality -- or an enhancement here.
That was not part of it at all.
Getting back to what the court has mentioned:
"The best lawyer I have ever seen. "
Look at what the purpose of this fee-shifting statute is.
It's to attract competent counsel by awarding them a reasonable fee.
What attorney is going -- who wouldn't normally take a civil rights case is going to say: Maybe I will take it, because maybe the judge will say I'm the best he's ever seen or one of the best I've ever seen?
It's not a rational reason to give out there to attract competent counsel.
Counsel are going to take a civil rights case because they know if they prevail they are going to get their prevailing market rate, they are going to get all their hours, their reasonable number of hours put in.
In this case, it was 25,000 hours over a 3-year period.
And they got their reasonable rates.
The judge also double-counted for quality because Ms. Lowry got a $495 rate in part because of her, quote, "stellar performance", as the district judge decided.
So to count that again by giving an enhancement is impermissible double-counting, as this Court has held in previous cases, including Delaware Valley.
Finally, I would say that the district judge's order in this case, if left undisturbed, will create additional applications for enhancements and whether they are granted or not, as Justice O'Connor pointed out in the Delaware Valley II case in her concurrence, it's not the issue of the rarity of the granting of the enhancement.
The issue is the requesting of it.
And the requests are going to come out the wazoo, and district courts are going to be deciding things arbitrarily and on different bases.
And for those reasons, we would respectfully urge this Court to reverse.
Justice John Paul Stevens: May I ask this one final question: We have a question of law before us, whether there's an absolute ceiling here.
Am I justified in assuming that if we could reach the question of whether it was a reasonable enhancement, there's no argument about that?
Mr. Cohen: I'm sorry, Your Honor.
If you determine that the enhancement was--
Justice John Paul Stevens: We are assuming for purposes of decision that the enhancement was reasonable, if that was -- if it's ever available, because you are not challenging the amount.
In other words, you are making an argument of law.
Even if they give them a $10 enhancement, it would be exactly the same issue before us.
Mr. Cohen: --We are arguing that the enhancement in this case was unreasonable, Your Honor, and--
Justice John Paul Stevens: That is not the question presented in the cert petition.
Mr. Cohen: --Well, no, I understand that.
Justice John Paul Stevens: If I understand it, the question of law presented is that even if the enhancement had only been $1,000--
Mr. Cohen: That's correct.
Justice John Paul Stevens: --you would say that was equally wrong.
Mr. Cohen: For quality or result.
Justice John Paul Stevens: Right.
Mr. Cohen: For those two factors.
Chief Justice John G. Roberts: Thank you, counsel.
The case is submitted.
Chief Justice Mr. Chief Justice Robers Jr.: And justice Alito has her opinion this morning case 08-970 Perdue versus Kenny A.
Justice Samuel Alito: This case comes to us on writ of certiorari to the United States Court of Appeals for the 11th circuit 42 U.S.C section 1988 authorizes courts to award a reasonable attorney's fees for prevailing parties in civil rights actions.
In awarding fees in this action in this record calculated the so-called load-star amount, the hours worked multiplied by a reasonable hourly fee and enhanced that amount by an additional 75% for superior performance and results obtained.
For the reasons set out in our opinion, we conclude that the load-star amount may be increased due to superior performance but only in unusual circumstances under which the load-star does not adequately account for performance.
In addition any enhancement must be based on a reviewable methodology and must be supported by specific evidence because the Court of Appeals did not apply these standards in this case we reverse and remand for the case for further proceedings consistent with this opinion.
Justice Kennedy and Justice Thomas have filed concurring opinions, Justice Breyer has filed an opinion concurring in part and dissenting in part in which Justices Stevens Ginsburg and Sotomayor have joined.