A recent New Jersey Law Journal story by Charles Toutant, “Judge Approves Fee Enhancement, But Not ‘Dual Fee,’ in GNC Employee’s Case” reports that a federal judge in Camden, pointing to his concern that “hourly or relatively low salaried workers may not obtain the skilled representation they deserve,” granted a 25 percent fee enhancement to a lawyer after his client obtained a $258,926 jury verdict in an age discrimination suit against vitamin and supplement retailer General Nutrition Corp. At the same time, the judge ruled out the possibility of the lawyer recovering a statutory and contingency fee simultaneously.
The enhancement of 25 percent above the $127,215 lodestar brings Vineland attorney Richard Pescatore’s fee to $159,018, warranted because he undertook representation of the plaintiff without assurance that he would be paid, U.S. Magistrate Judge Joel Schneider said in Andujar v. General Nutrition. The judge also approved $1,823 in costs, prejudgment interest of $123,926, and a payment, in an amount to be determined, to offset negative tax consequences of a lump-sum award. The amounts are to be paid by the defendant if the verdict is upheld on appeal. The appeal to the Third Circuit is pending, according to the decision.
“Without the prospect of a potential high fee, the Court is concerned that hourly or relatively low salaried workers may not obtain the skilled representation they deserve,” Schneider said. “Competent counsel should not only represent those with largesse,” he said, citing Norman v. Haddon Township, a July ruling granting a 33.33 percent fee enhancement in a police excessive-force case.
Following the October 2017 jury verdict in his client’s favor, Pescatore sought the enhanced fee as counsel to a prevailing party in a New Jersey Law Against Discrimination claim. His retainer agreement provided him a contingency fee of 45 percent of the net recovery, the decision noted. Initially, Pescatore contended he was entitled to the full amount of his court-awarded fee, in addition to his contingency fee, which Schneider termed “a dual fee recovery.” Counsel for GNC did not object to the prospect of a dual recovery but said any such recovery should be taken into account when determining whether a lodestar enhancement was warranted.
After Schneider asked for supplemental briefing on whether a dual recovery was permissible, Pescatore submitted a new proposal to calculate his attorney fee, seeking 45 percent of the jury award ($115,695), plus his court-awarded lodestar ($127,215), for a total of $242,910. GNC opposed that proposal.
Later, Pescatore sought 45 percent of the total sum of the judgment plus the court-awarded fee. Those two amounts totaled $386,141, and his 45 percent share would have been $173,763. He also sought a 50 percent enhancement of the court-awarded fee, which would bring the total fee award to $237,000. But Schneider rejected those terms as inconsistent with Pescatore’s written fee agreement and applicable case law. Pescatore did not cite any case law approving such an arrangement, while GNC’s lawyer cited persuasive case law to the contrary, Schneider said.
Case law provides that “unless a fee agreement specifically refers to a statutory fee award, a lawyer may receive either the agreed upon contingency fee based on the jury award or the statutory award, whichever is greater. Counsel may not, as is requested here, receive a portion of both,” Schneider said. The judge awarded the $127,215 lodestar, since it was slightly greater than the contingency fee of 45 percent of the net jury award. And since Pescatore sought a 50 percent enhancement, and GNC proposed an enhancement of 5 percent at most, Schneider settled on a “mid-range” enhancement of 25 percent.
“While the Court believes the plaintiff is entitled to an enhancement, it need not be excessive. This was not an unduly complex case. Nor did counsel spend an inordinate amount of time on the case. It is unlikely plaintiff’s counsel had to [forgo] potentially lucrative work on account of his handling of this case,” Schneider said.