On Wednesday, the U.S. Supreme Court decided the most important attorney fees cases in years: Perdue v. Kenny A. (08-970).  In a 5-4 majority opinion, the Court overturned a lodestar multiplier of $4.5 million in attorney fees.  Under federal fee-shifting statutes, judges can award enhanced attorney fees (i.e. multiplier) above the lodestar amount.  However, the court in the Georgia case did not provide “proper justification” for the [fee] enhancement.  The underlying case involved a successful class action, challenging deficiencies in Georgia’s foster care system.  The prevailing attorneys sought more than $14 million in attorney fees.  Half was based on the lodestar calculation – about 30,000 hours multiplied by the hourly rates of $200 to $495.

One the one hand, the Court ruled that a strong performance can lead to a fee enhancement, but the Court also used words like “rare” and “exceptional”.  The Court offered no test for what constitutes an “extraordinary circumstances” for a fee enhancement, only writing that “the burden of proving that a [fee] enhancement is necessary must be borne by the fee applicant…producing “specific evidence” that supports the award” and that such [fee] enhancements should be “objective and reviewable”.

Court observers, reading in-between the lines of the spare 15-page ruling, see a deep-seated skepticism about “superior performance” – unless it can be measured by hard, objective, and measurable factors.  Prevailing attorneys who provide better-than-usual performances will no doubt seek ways to quantify performance as a lodestar “entry”, rather than a lodestar “bonus”.  This may be done by increasing the hourly rate or perhaps quantifying “lawyering” into numbers.  What is clear from this ruling is that prevailing attorneys will require additional supporting evidence (i.e. expert opinion) in order to justify a fee enhancement.