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May L. Walker, On Behalf of Herself and All Others v. Carmelo Guiffre

January 25, 2012

MAY L. WALKER, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF-APPELLANT,
v.
CARMELO GUIFFRE, INDIVIDUALLY, CARMELO GIUFFRE, D/B/A BAY RIDGE AUTOMOTIVE MANAGEMENT CORP., ROUTE 22 AUTO SALES, INC., ROUTE 22 AUTOMOBILES, INC., HUDSON AUTO SALES, INC., FREEHOLD AUTO SALES, INC., FREEHOLD AUTOMOTIVE LIMITED INC., AND FREEHOLD JEEP/EAGLE, INC., DEFENDANTS, AND ROUTE 22 NISSAN, INC., DEFENDANT-RESPONDENT.
BOBBIE HUMPHRIES, PLAINTIFF-APPELLANT,
v.
POWDER MILL SHOPPING PLAZA AND HOLLY GARDENS, INC., DEFENDANTS-RESPONDENTS.



On certification to the Superior Court, Appellate Division, whose opinion is reported at The opinion of the court was delivered by: Justice Hoens

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

May L. Walker v. Carmelo Guiffre Bobbie Humphries v. Powder Mill Shopping Plaza (A-72-10) (066969) (A-100-10) (067267)

Argued October 25, 2011 -- Decided January 25, 2012

HOENS, J., writing for a unanimous Court.

In this appeal, the Court considers whether the framework adopted in Rendine v. Pantzer, 141 N.J. 292 (1995), for evaluating attorneys' fee awards made pursuant to state statutory fee-shifting provisions, including the continued validity of contingency enhancements, has been altered by the United States Supreme Court's decision in Perdue v. Kenny A., __ U.S. __, 130 S. Ct. 1662 (2010).

In Walker v. Guiffre (A-72-10), plaintiff, May L. Walker, alleged that defendant violated the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, the Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18, and their applicable regulations. After finding that defendant violated the CFA and TCCWNA, the trial court concluded that plaintiff was entitled to a fee award. The trial court fixed the lodestar amount and applied a forty-five percent contingency enhancement. The Appellate Division found that the trial court's analysis of the reasonableness of plaintiff's attorneys' hourly rate, based only on the judge's personal experience, did not satisfy the Rendine analysis. 415 N.J. Super. 597 (App. Div. 2010). In addition, the Appellate Division concluded that the trial court's declaratory statement that the forty-five percent contingency enhancement was justified because the "history of this case . . . can hardly be classified as 'typical,'" was devoid of analytical support. Moreover, the Appellate Division observed that Perdue had not been decided when the trial judge made his ruling and reasoned that the trial court's analysis was inconsistent with Perdue's standard for fee enhancement in fee-shifting cases. The Appellate Division therefore reversed and vacated the award of counsel fees, and remanded for reconsideration in light of prevailing legal standards. The Court granted plaintiff's petition for certification limited to the issue of the enhancement of the attorney fee award. 205 N.J. 98 (2011).

In Humphries v. Powder Mill Shopping Plaza (A-100-10), plaintiff, Bobbie Humphries, alleged that defendants violated accessibility requirements in the Americans with Disabilities Act (ADA), 42 U.S.C.A. §§ 12181-12189, the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49, and their applicable regulations. The parties entered into a partial stipulation of settlement in which defendants acknowledged failures to comply with the applicable accessibility requirements, agreed to specific modifications, and agreed to pay plaintiff $2,500 in damages. The partial settlement left plaintiff's request for counsel fees unresolved. After the trial court established the lodestar, it determined that the fifty-percent contingency enhancement requested by counsel was too high based on the court's belief that the suit was limited in nature and that the lodestar resulted in a substantial fee. The court instead awarded a twenty percent contingency enhancement. The Appellate Division observed that Walker had adopted the "six important rules" outlined in Perdue, and concluded that only proof of "rare and exceptional circumstances" can justify a contingency enhancement. The panel then noted that plaintiff had not made such a demonstration and that, having searched the record in light of Perdue's stringent standards, there was no support for a contingency enhancement. The Appellate Division therefore reversed the fee enhancement and remanded the matter to the trial court to adjust the counsel fee award. The Court granted plaintiff's petition for certification to consider the standard to be applied to her request for attorneys' fees. 205 N.J. 520 (2011).

HELD: The mechanisms for awarding attorneys' fees, including contingency enhancements, adopted in Rendine remain in full force and effect as the governing principles for awards made pursuant to New Jersey fee-shifting statutes.

1. Statutory fee-shifting provisions address the problem of unequal access to the courts; provide the individuals, whose rights are being protected by the statutes, with the resources to enforce those rights in court; operate to encourage adequate representation which is essential to ensuring that those laws will be enforced; and promote respect for the underlying law. Pursuant to Rendine, calculating an award of attorneys' fees pursuant to state statutory fee-shifting provisions begins with determining the lodestar. The lodestar is derived by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate. Rendine, and its companion case Szczepanski v. Newcomb Medical Ctr., 141 N.J. 346 (1995), included specific guidance that informs both aspects of the lodestar equation. In addition, under Rendine, after the lodestar has been established, the trial court may increase the fee to reflect the risk of nonpayment in all cases in which the attorney's compensation entirely or substantially is contingent on a successful outcome. The Court's authorization of contingency enhancements arose from its conclusion that a fee award cannot be "reasonable" unless the lodestar is adjusted to reflect the actual risk that the attorney would not receive payment if the suit did not succeed. (pp. 5-11)

2. The consolidated appeals call into question the continuing validity of Rendine's authorization for contingency enhancements based on the federal approach to the calculation of fee awards arising from federal statutes. Prior to Rendine, the federal courts had set forth their approach, which evolved over time. Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974), listed twelve factors to be considered, including whether the fee is fixed or contingent, which gave rise to some federal decisions finding contingency enhancements appropriate. When the United States Supreme Court adopted the lodestar approach, it commented that Johnson factors could be used to enhance the lodestar, but cautioned that not all would be appropriate. Hensley v. Eckerhart, 461 U.S. 424 (1983). The Court subsequently rejected other lodestar enhancements, but reserved the issue of the propriety of the Johnson factor relating to a contingency enhancement. Blum v. Stenson, 465 U.S. 886 (1984). When the Court directly considered whether the lodestar could be subject to a contingency enhancement, the Justices split three ways, with no clear majority view. Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 483 U.S. 711 (1987). By the time that this Court decided Rendine, however, the United States Supreme Court had directly confronted the propriety of a contingency enhancement and, over a strong dissent, rejected it. City of Burlington v. Dague, 505 U.S. 557 (1992). Dague settled the methodology of fee award calculations in cases arising under federal fee-shifting statutes and thoroughly identified the reasons both for and against the inclusion of a contingency enhancement. (pp. 11-17)

3. The federal precedents were squarely presented and considered when Rendine was decided. In clear and unmistakable terms, Rendine rejected the federal framework adopted in Dague. In its place, Rendine held that courts making attorneys' fee awards based on state statutory fee-shifting provisions, after having carefully established the lodestar fee, should consider whether to increase that fee to reflect the risk of nonpayment in all cases in which the attorney's compensation entirely or substantially is contingent on a successful outcome. Rendine established a framework and guidelines for awarding contingency enhancements that were designed to effectuate the purposes of statutory fee-shifting provisions. Rendine also fixed the ordinary range for a contingency enhancement as being between five and fifty percent of the lodestar; identified the typical range as being between twenty and thirty-five percent; reserved one hundred percent enhancements for the rare and exceptional case; and precluded an award of a contingency enhancement in excess of one hundred percent. (pp. 17-21)

4. Perdue breaks no new ground; rather, it reiterates the framework that applies to fee awards in federal courts arising from federal statutes. Perdue itself describes the six important rules it identifies as having been established in prior decisions. Although in applying those rules Perdue reiterated that a contingency enhancement is not permitted, the opinion made it clear that, for federal fee-shifting purposes, this issue had been settled in Dague. There are no decisions relied upon in Perdue that were not considered, and rejected, in Rendine. There is nothing in Perdue that causes this Court to vary from its previously adopted approach. Awards made pursuant to New Jersey fee-shifting statutes must continue to conform to the principles announced in Rendine. (pp. 21-22)

5. Regarding Walker, the Court concurs with the panel's conclusion that the trial court failed to sufficiently address the Rendine framework to guide the selection of the appropriate percentage to use as a contingency enhancement. However, the Court rejects the Appellate Division's conclusion that the Rendine framework has been altered in any way by Perdue. (pp. 22-34)

6. The record in the Humphries appeal presents an opportunity to illustrate the proper application of Rendine and to fix where this case falls on the spectrum of typical and ordinary contingency enhancements. Because contingency awards at the high end of the range are appropriate in cases in which there is no mechanism to mitigate the risk of non-payment, there is no possibility of payment absent an award of fees, and the relief sought is primarily equitable in nature, a fifty percent contingency enhancement was reasonable and appropriate in this case. The relief sought was equitable in nature and designed to serve a broad social purpose. Plaintiff's counsel was not afforded the opportunity to mitigate the risk of non-payment because, in light of the relief sought, he could not expect that he would be compensated through a large contingent fee award or that plaintiff would be able to pay his fees when she prevailed. Therefore, this matter is remanded to the trial court for entry of a judgment in plaintiff's favor in the amount of $97,706.81--the previously-calculated lodestar plus a fifty percent contingency enhancement and costs. (pp. 34-47)

The judgments of the Appellate Division are AFFIRMED IN PART and REVERSED IN PART, and the matters are REMANDED to the trial court for further proceedings consistent with the Court's opinion.

CHIEF JUSTICE RABNER and JUSTICES LONG, LaVECCHIA, and ALBIN join in JUSTICE HOENS's opinion.

JUSTICE PATTERSON and JUDGE WEFING (temporarily assigned) did not participate.

Argued October 25, 2011 --

JUSTICE HOENS delivered the opinion of the Court.

Courts in New Jersey have traditionally adhered to the American Rule as the principle that governs attorneys' fees. This guiding concept provides that, absent authorization by contract, statute or rule, each party to a litigation is responsible for the fees charged by his or her attorney. Fees charged by one's own attorney, of course, must comply with our Rules of Professional Conduct, see RPC 1.5, and fees awarded by courts, regardless of their basis, are governed by principles of reasonableness, see R. 4:42-9; see, e.g., Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 386 (2009) (commenting upon reasonableness in contract-based fee award).

Notwithstanding our continued adherence to the American Rule, there are numerous statutes that include fee-shifting provisions. Those statutes do not define the method for quantification of fees, but uniformly are in accord with the overarching principles of reasonableness that we have fixed. As a result, over time, we have provided guidance and direction to our courts to utilize in considering fee applications brought pursuant to fee-shifting statutes.

Today we are called upon to consider the principles that govern attorneys' fee awards arising from statutory fee-shifting provisions anew, and we do so in the context of two separate appeals. Each of these appeals raises a threshold challenge to the continued validity of the "contingency enhancement" that this Court first adopted nearly two decades ago in the context of a fee-shifting provision, N.J.S.A. 10:5-27.1, found in our Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49; see Rendine v. Pantzer, 141 N.J. 292, 316-45 (1995). Each appeal arises from the Appellate Division's decision that recent guidance from the United States Supreme Court rejecting contingency enhancements now precludes our courts from including them in awards made pursuant to any of our statutory fee-shifting provisions. Walker v. Giuffre, 415 N.J. Super. 597, 601 (App. Div. 2010) (citing and construing Perdue v. Kenny A., ___ U.S. ___, 130 S. Ct. 1662, 176 L. Ed. 2d 494 (2010)). Although the two appeals arise in the context of different fee-shifting statutes and although each confronts this Court with its own unique challenges, because they present one overarching question concerning the continuing validity of the Rendine approach, we have elected to consolidate them for the purpose of issuing this single opinion.

Having considered the arguments of the parties to these appeals concerning the continuing validity of the Rendine framework both generally and as it relates to contingency enhancements, and having further considered the contrary approach to fee-shifting utilized by the United States Supreme Court in Perdue, we hold that the mechanisms for awarding fees, including contingency enhancements, that we adopted in Rendine shall remain in full force and effect as the governing principles for attorneys' fee awards made pursuant to fee-shifting provisions in our state statutes and rules. That holding notwithstanding, these appeals have made it apparent that some of the principles set forth in Rendine are in need of further explanation so that our trial courts may properly apply them and, in the process, create adequate records for review on appeal. We therefore both reiterate and explain the principles that shall henceforth govern such awards.

I.

Although it is customary to begin opinions of this Court with a recitation of the facts, the procedural history and arguments raised in the particular dispute, we depart from that tradition today. Instead, because our analysis of the two disputes that we have elected to consolidate for purposes of this opinion rests largely on our resolution of the questions raised in the Appellate Division about Rendine, we begin our analysis there.

Well prior to the time when this Court decided Rendine, we had explained the purposes behind statutory fee-shifting provisions. See Coleman v. Fiore Bros., 113 N.J. 594, 597 (1989). Relying principally on the legislative history that informed the enactment by Congress of the fee-shifting provision in the federal Civil Rights Act of 1976, P.L. 94-559 § 2, 90 Stat. 2641 (codified at 42 U.S.C.A. § 1988(b)), we identified three essential purposes for such statutes. Ibid. (quoting 122 Cong. Rec. 33,313 (1976) (statement of Sen. Tunney, sponsor of federal fee-shifting statute)). First, they are designed to address the "problem of unequal access to the courts." Ibid. Second, they are intended to provide the individuals, whose rights are being protected by the statutes, with the resources to enforce those rights in court. Ibid. Finally, they operate so as to "[e]ncourag[e] adequate representation [which] is essential" to ensuring that those laws will be enforced. Ibid. In addition, we observed that fee-shifting provisions "are designed . . . to promote respect for the underlying law and to deter potential violators of such laws." Ibid.

Those expressions of purpose, as we commented, see ibid., are consonant with our understanding of the reasons that underlie the inclusion of fee-shifting provisions in similar statutes by our own Legislature. Although we found support in the federal statutes for our analysis of what our own Legislature intended when it included fee-shifting provisions in similar state statutes, we did not directly consider the mechanisms that govern the operation of those statutory fee-shifting provisions until we analyzed fee applications made in the context of two claims arising pursuant to our LAD. See Rendine, supra, 141 N.J. at 316; Szczepanski v. Newcomb Medical Ctr., 141 N.J. 346, 355-56 (1995).

A.

The framework we devised for calculating an award of fees pursuant to state statutory fee-shifting provisions is well-established, but the issues before us in these appeals require us to briefly reiterate that framework and, in particular, to explain the role that the contingency enhancement was intended to play. Making an award of attorneys' fees in the context of the LAD and similar state statutes begins with determining the lodestar,*fn1 a calculation that we described as "the most significant element in the award of a reasonable fee." Rendine, supra, 141 N.J. at 334-35. Although the lodestar is essentially derived by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate, ibid., our opinion in Rendine included specific guidance, consistent with the requirements of RPC 1.5(a), that informs both aspects of the lodestar equation.

In particular, we admonished trial courts "not [to] accept passively" the submissions of counsel, Rendine, supra, 141 N.J. at 335, directing them instead to "evaluate carefully and critically the aggregate hours and specific hourly rates advanced by counsel for the prevailing party to support the fee application," ibid.; see also Szczepanski, supra, 141 N.J. at 366 (holding that "a trial court should carefully and closely examine the lodestar-fee request to verify that the attorney's hours were reasonably expended").

The evaluation of hours expended includes several components, including a recognition that the focus must be on "the amount of time reasonably expended" rather than merely an acceptance of "the amount of time actually expended." Rendine, supra, 141 N.J. at 335 (quoting Copeland v. Marshall, 641 F.2d 880, 891 (D.C. Cir. 1980)) (emphasis in original). Moreover, we required the attorney seeking the fee award to prepare and provide a request in the form of a certification of services that is sufficiently detailed to enable the court to accurately calculate the lodestar. Rendine, supra, 141 N.J. at 337 (citing Lindy Bros. Builders, Inc. v. Am. Radiator & Standard Sanitary Corp. (Lindy I), 487 F.2d 161, 167 (3d Cir. 1973)).

In that regard, although we did not require exactitude, we embraced the concept that "fairly definite information as to the hours devoted to various general activities . . . and the hours spent by various classes of attorneys" was essential for the court to analyze the fee request and to perform the lodestar calculation. Ibid. In Rendine's companion case, we further explained that "we would assume that applications for counsel fees invariably would be accompanied by contemporaneously recorded time records that fully support the calculation of hours expended by all attorneys who participated in the matter," Szczepanski, supra, 141 N.J. at 367, and we permitted reliance on reconstructed records only in "exceptional" circumstances, id. at 368. In particular, we explicitly observed that the trial court retains the "discretion to exclude from the lodestar calculation hours for which counsel's documentary support is marginal." Ibid.; see also Rendine, supra, 141 N.J. at 335 (quoting Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990)).

In addressing the calculation of the lodestar, we further identified other circumstances that permit the trial court to reduce the hours that were expended. Although rejecting a strict proportionality rule, we cautioned our trial courts that "[f]ee-shifting cases are not an invitation to prolix or repetitious legal maneuvering. Courts should consider the extent to which a defendant's discovery posture, or a plaintiff's, has caused any excess expenses to be incurred." Szczepanski, supra, 141 N.J. at 366. Therefore, a reduction may be appropriate if "the hours expended, taking into account the damages prospectively recoverable, the interests to be vindicated, and the underlying statutory objectives, exceed those that competent counsel reasonably would have expended." Rendine, supra, 141 N.J. at 336. We also observed that the "trial court should reduce the lodestar fee if the level of success achieved in the litigation is limited as compared to the relief sought." Ibid.

Our decision in Rendine also articulated the principles that inform the calculation of a reasonable hourly rate, noting that it "is to be calculated according to the prevailing market rates in the relevant community" and should include an assessment of the "experience and skill of the prevailing party's attorneys and [a] compar[ison] . . . to the rates prevailing in the community for similar services" by comparable lawyers. Id. at 337 (quoting Rode, supra, 892 F.2d at 1183). We directed trial courts to ensure that the hourly rate awarded is "fair, realistic, and accurate," allowing for adjustments to the requested rate when appropriate. Ibid. In another context, this Court described a reasonable hourly rate as being one "that would be charged by an adequately experienced attorney possessed of average skill and ordinary competence --- not those that would be set by the most successful or highly specialized attorney in the context of private practice." Singer v. State, 95 N.J. 487, 500-01, cert. denied, 469 U.S. 832, 105 S. Ct. 121, 83 L. Ed. 2d 64 (1984).

B.

As this Court made clear in Rendine, calculating the lodestar is not the end of the inquiry involved in fixing an appropriate award of fees. After the lodestar has been established, the trial court may increase the fee "to reflect the risk of nonpayment in all cases in which the attorney's compensation entirely or substantially is contingent on a successful outcome." Rendine, supra, 141 N.J. at 337. This Court's authorization of a contingency enhancement arose from our conclusion that a fee award cannot be "reasonable" unless the lodestar is adjusted to reflect the actual risk that the attorney would not receive payment if the suit did not succeed. Id. at 338. Because the appeals now before this Court call into question the continuing validity of our authorization in Rendine for awards of contingency enhancements, we must consider both the basis on which we first concluded that they were permitted and the manner in which our guidelines for such awards retain viability.

The consolidated appeals present this Court with a direct challenge to the continued viability of contingency enhancements that emanates from the United States Supreme Court's governing rubric for fee awards in the federal context. We turn, then, to an analysis of the competing state and federal principles that undergird this Court's traditional approach to the award of contingency enhancements and that, therefore, inform the central issue before the Court.

Well prior to the time when this Court issued the Rendine opinion, the federal courts had set forth their interpretation of the way in which fee awards arising from federal statutes should be calculated. The federal approach to the calculation of fee awards evolved over time, largely because the only benchmark for an award in the federal statutes was reasonableness.

The principal statutory authorization for fee awards enacted by Congress is found in the Civil Rights Act of 1976, 42 U.S.C.A. § 1988(b). Its language is spare, providing that "the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee." Ibid. Although the statute itself provides no guidance concerning the manner in which a reasonable fee should be calculated, federal courts found assistance in the statute's legislative history. The Senate Report that accompanied the Civil Rights Act of 1976 referred with approval to a series of federal court opinions that had considered the general subject of awards of attorneys' fees. S. Rep. No. 94-1011, at 6 (1976), reprinted in 1976 U.S.C.C.A.N. 5908, 5913. As a result, those opinions soon came to be regarded as the framework for the federal courts to use in making their calculations of fee awards.

In particular, the Senate Report relied on an opinion in which the United States Court of Appeals for the Fifth Circuit had created standards for a fee award, describing that decision as identifying "[t]he appropriate standards." Id. at 5913 (citing with approval Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974)). The Johnson framework for fixing a fee did not use a lodestar analysis, but instead listed twelve factors to be considered. Johnson, supra, 488 F.2d at 717-19. Because Johnson included among its twelve factors a consideration of "[w]hether the fee is fixed or contingent," it gave rise to a series of decisions in which some federal courts concluded that a contingency enhancement would be appropriate. See, e.g., Copeland, supra, 641 F.2d at 892; Crumbaker v. Merit Sys. Prot. Bd., 781 F.2d 191, 196 (Fed. Cir. 1986); Northcross v. Bd. of Educ., 611 F.2d 624, 643 (6th Cir. 1979). When the question about the appropriate method for calculating counsel fees first reached the United States Supreme Court, it did not involve a contingency enhancement. See Hensley v. Eckerhart, 461 U.S. 424, 103 S. Ct. 1933, 76 L. Ed. 2d 40 (1983). Rather, the Court first adopted the lodestar approach, id. at 433, 103 S. Ct. at 1940, 76 L. Ed. 2d at 50, which was an alternate method for calculating a fee award that had been "pioneered" in Lindy I by the United States Court of Appeals for the Third Circuit, see Perdue, supra, ___ U.S. at ___, 130 S. Ct. at 1672, 176 L. Ed. 2d at 504.

Turning to a consideration of the Johnson factors, the United States Supreme Court then addressed whether the lodestar could be enhanced or decreased based upon an analysis of the results obtained in the litigation. Hensley, supra, 461 U.S. at 434-37, 103 S. Ct. at 1940-41, 76 L. Ed. 2d 51-53. Because of that limited focus, the Court did not specifically consider the other Johnson factors. Instead, the Court commented that the lodestar could be enhanced by using some of them, but cautioned that not all would be appropriate because the twelve Johnson factors included some matters that were subsumed within the lodestar itself. Id. at 434 n.9, 103 S. Ct. at 1940 n.9, 76 L. Ed. 2d at 51 n.9.

The United States Supreme Court next addressed the question of fee calculations in the context of rejecting enhancements to the lodestar for considerations about novelty and complexity as well as quality of representation. Reasoning that the former were part of the reasonable hours and the latter would be reflected in a reasonable hourly rate, the Court concluded that they were adequately reflected in the lodestar calculation and that an enhancement would be duplicative. Blum v. Stenson, 465 U.S. 886, 898-99, 104 S. Ct. 1541, 1549, 79 L. Ed. 2d 891, 902 (1984). The Court specifically reserved the issue of the propriety of the Johnson factor relating to a contingency enhancement for the future. Id. at 901 n.17, 104 S. Ct. at 1550 n.17, 79 L. Ed. 2d at 903 n.17.

When the United States Supreme Court directly considered whether the lodestar could be subject to a contingency enhancement, the Justices split three ways, with the result that there was no clear majority view. Pennsylvania v. Delaware Valley Citizens' Council for Clean Air (Delaware Valley II), 483 U.S. 711, 107 S. Ct. 3078, 97 L. Ed. 2d 585 (1987). The Court's plurality, consisting of four Justices, reasoned that Congress had not explicitly authorized such an enhancement. Id. at 723-25, 107 S. Ct. at 3085-87, 97 L. Ed. 2d at 596-98. Because in their view a contingency enhancement is related to the risk of a loss, they found no basis in the statute to permit such an award. Id. at 727, 107 S. Ct. at 3088, 97 L. Ed. 2d at 599. Further, the Justices in the plurality concluded that because there is always uncertainty in litigation, a contingency enhancement, at least in theory, would become a routine part of an award, contrary to the statute's design. Id. at 725, 107 S. Ct. at 3086, 97 L. Ed. 2d at 597.

Justice O'Connor concurred in the judgment, but did not entirely foreclose the possibility of a contingency enhancement. Delaware Valley II, supra, 483 U.S. at 730-31, 107 S. Ct. at 3089-90, 97 L. Ed. 2d at 601 (O'Connor, J., concurring in part).

Instead, she proposed a two-part test that would govern such enhancements, using an analysis of the market realities of contingent fee cases coupled with evidence that the party would have faced "substantial difficulties" in attracting counsel absent the availability of a contingent fee arrangement. Id. at 731-33, 107 S. Ct. at 3090-91, 97 L. Ed. 2d at 601-03. Finally, Justice Blackmun, joined by three others, dissented, arguing that a contingency enhancement was necessary to ensure that plaintiffs would be able to attract competent counsel. Delaware Valley II, supra, 483 U.S. at 735-42, 107 S. Ct. at 3091-95, 97 L. Ed. 2d at 604-08 (Blackmun, J., dissenting).

By the time that this Court issued its opinion in Rendine, however, the United States Supreme Court had directly confronted the propriety of a contingency enhancement and, over a strong dissent, had rejected it. See City of Burlington v. Dague, 505 U.S. 557, 112 S. Ct. 2638, 120 L. Ed. 2d 449 (1992). In Dague, the Court referred to the lodestar analysis as "the guiding light of our fee-shifting jurisprudence . . . [and to the] strong presumption that the lodestar represents the reasonable fee[.]" Id. at 562, 112 S. Ct. at 2641, 120 L. Ed. 2d at 456 (internal citations and quotations omitted). Commenting that there is a burden on one who seeks an enhancement to demonstrate that it is "necessary," ibid. (quoting Blum, supra, 465 U.S. at 898, 104 S. Ct. at 1541, 79 L. Ed. 2d at 891), the Court held that enhancing the lodestar because a case was taken on a contingent fee basis was inappropriate. In the process, the majority rejected, as impossible to apply, the middle ground approach advocated by Justice O'Connor, see id. at ...


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