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Supreme Court rules attorney's fees may be enhanced in 'extraordinary circumstances'

[JURIST] The US Supreme Court [official website; JURIST news archive] on Wednesday ruled [opinion, PDF] in Perdue v. Kentucky [Cornell LII backgrounder; JURIST report] that calculation of an attorney's fee based on the lodestar may be increased due to superior performance, but only in extraordinary circumstances. The US Court of Appeals for the Eleventh Circuit affirmed [opinion, PDF] the lower court's enhancement of attorney's fees in a class action suit, finding that even though factors such as quality of performance and results obtained are already included in the lodestar calculation, they may appropriately be considered to enhance the fees. In reversing the lower court decision, Justice Samuel Alito wrote:

We have stated in previous cases that such an increase is permitted in extraordinary circumstances, and we reaffirm that rule. But as we have also said in prior cases, there is a strong presumption that the lodestar is sufficient; factors subsumed in the lodestar calculation cannot be used as a ground for increasing an award above the lodestar; and a party seeking fees has the burden of identifying a factor that the lodestar does not adequately take into account and proving with specificity that an enhanced fee is justified. Because the District Court did not apply these standards, we reverse the decision below and remand for further proceedings consistent with this opinion.

Justice Stephen Breyer filed an opinion concurring in part and dissenting in part, in which Justice John Paul Stevens, Ruth Bader Ginsburg, and Sonia Sotomayor joined. Breyer would not have reached the question of whether the fees were appropriately calculated in this case. Had he reached that question, he would have upheld the lower court's decision.

The lodestar calculation is used by courts in awarding attorney's fees and is the product of reasonable hours worked and a reasonable hourly rate. The class action suit was filed on behalf of 3,000 children in the Georgia foster care system. After reaching a settlement, plaintiffs requested more than $14 million in attorney's fees. Half that amount was based on the lodestar, and the other half was an enhancement for superior work and results.

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