Many clients have experienced the mixed blessings of winning a lawsuit but having to bear their own attorney’s fees. There are, however, some circumstances in which a winning party can recover its attorney’s fees from the loser. This occurs most often where a fee-shifting statute entitles the winning party to its attorney’s fees.
Lawyers who practice only occasionally in areas where attorney’s fees awards are potentially available may be unfamiliar with the standards and procedures governing fee applications. Most fee-shifting statutes say nothing more than that a court may award reasonable attorney’s fees to a prevailing party. They do not address who is deemed to be a prevailing party, how a court should go about determining an award of attorney’s fees, how much should be awarded, or what kind of documentation is necessary to sustain an award. These questions are the subject of this article.
To be a prevailing party under a fee-shifting statute and, therefore, entitled to an award of attorney’s fees, a party need not ultimately secure all of the relief it was seeking in the case. A party is deemed to have prevailed for attorney’s fees purposes if it achieved any significant aspect of the relief sought.
Of course, the relationship between the relief sought and that ultimately achieved may have a direct bearing on the amount of the fees awarded. For instance, if a party pursued two claims in a case, devoting equal time and effort to each, but prevailed only on one, full compensation for all time expended in the case would not be awarded. Rather, only the time and fees related to the claim on which the party prevailed would be compensated.
For fees to be awarded, a case not need proceed through trial and judgment. Where a lawsuit is settled by the defendant agreeing to provide some or all of the relief sought, the plaintiff may be deemed to be a prevailing party for purposes of entitlement to attorney’s fees. The relevant test is whether the lawsuit was a catalyst which was at least partially responsible for prompting the defendant to take the remedial action.
The procedure to be followed by the court in setting attorney’s fees is well established. The court first should determine the number of hours reasonably expended in the case by the prevailing party’s counsel. In making this determination, the court need not accept all hours recorded by counsel. Rather, the court should examine the time and services involved and include in the fee calculation only time reasonably expended.
The court then must arrive at an appropriate hourly rate for each of the lawyers involved in representing the prevailing party. The court should consider the pertinent lawyers’ normal billing rates, but is not bound to accept and apply those rates. Rather, the most important criterion in fixing appropriate rates is the rates prevailing in the community for similar work.
Once the number of hours reasonably expended and appropriate hourly rates are determined, the hours and rates are multiplied together to arrive at a “lodestar” amount of fees. The court then should consider whether an adjustment to the lodestar figure is warranted, based on several factors, the most popular formulation of which appears in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). The Johnson factors are: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.
In many cases, the award will be simply the lodestar amount of fees. Some reported cases, however, reflect enhancements ranging from 10 to 100 percent of the lodestar.
One of the Johnson factors suggests that where the fee agreement between the lawyer and client is contingent upon success, an enhanced fee award beyond the lodestar amount is warranted, because of the risk involved. That factor has been the subject of some controversy and deserves special mention. In Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 483 U.S. 711 (1987) (popularly known as Delaware Valley II), the U.S. Supreme Court held that a contingency enhancement is appropriate only upon proof that enhanced fees beyond normal hourly rates are customary in contingent fee cases in the relevant legal market, and that without an upward adjustment for risk the prevailing party would have faced substantial difficulties in finding competent counsel.
The Eighth Circuit recently had occasion to address the contingency enhancement issue in Morris v. American National Can Corp., 941 F.2d 710 (8th Cir. 1991), an employment discrimination case involving claims of sexual harassment. Based on affidavits of several local lawyers addressing the considerations discussed in Delaware Valley II in the context of the St. Louis area market, the Eighth Circuit held that the district court’s failure to award a contingency enhancement constituted an abuse of discretion, and remanded the fee award for re-determination.
A typical attorney’s fees submission should include an application in the nature of a brief, which outlines the history of the case, the nature and value of the services rendered, the amount being sought, and how the requested amount has been calculated. If an enhancement is being sought, particular attention should be paid to why the requested enhancement is appropriate.
An affidavit of the prevailing party’s counsel should accompany the application. The affidavit should address, first of all, counsel’s time records, kept contemporaneously throughout the case, detailing the time spent and services rendered. (Keeping such time records on a contemporaneous basis is a must if counsel expects to successfully pursue an attorney’s fee award.) The time records may be attached and attested to by the affidavit. Alternatively, if the time records are voluminous, the affidavit may present a summary of them, broken down by different categories of service with the time devoted to each category set forth.
The affidavit also should set forth counsel’s normal billing rates, and otherwise serve as the evidentiary basis for other facts relied on in the fee application.
Additional materials also may be highly useful. For example, affidavits from other lawyers attesting to the reasonableness of the requested hourly rates and/or the reasonableness of the time spent on the case can be extremely valuable. If a contingency enhancement is being sought, affidavits from other lawyers, establishing that the local market recognizes enhanced fees in contingency cases, and that it would otherwise be difficult to obtain competent counsel for such cases, are essential.
Fee awards in other cases can be helpful, as can published surveys reflecting prevailing hourly rates charged in the relevant market. For example, the St. Louis Business Journal annually publishes a survey of hourly rates charged by the largest St. Louis law firms.
If you can ascertain your opponent’s hours, rates and fees relating to the case, and your requested fees compare favorably with theirs, it can be highly useful to put that information before the court.
Finally, pay attention to particular requirements or limitations that may be pertinent by virtue of the particular fee-shifting statute applicable to the case or the court in which the case is being litigated. For example, under Local Rule 30 of the U.S. District Court for the Eastern District of Missouri, applications for attorney’s fees must be filed no later than 21 days after entry of judgment on the merits. As a further example, where the fee-shifting statute being relied on is the federal Equal Access to Justice Act, there is a statutory cap on the hourly rate that may be awarded of $75 per hour. 28 U.S.C. § 2412.
Pursuing an attorney’s fees application is somewhat like billing your client, except that you are billing the other side and the court ultimately will be passing on the bill. As with billing one’s own client, you can maximize your chances of having your fee request well received by knowing the criteria on which it will be assessed, and making the most effective presentation possible on the relevant criteria.