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The lodestar figure includes most, if not all, of the relevant factors constituting a "reasonable" attorney's fee, and an enhancement may not be awarded based on a factor that is subsumed in the lodestar calculation. Thus, the novelty and complexity of a case generally may not be used as a ground for an enhancement because these factors presumably are fully reflected in the number of billable hours recorded by counsel. The quality of an attorney's performance generally should not be used to adjust the lodestar because considerations concerning the quality of a prevailing party's counsel's representation normally are reflected in the reasonable hourly rate.
Respondents, children in the foster-care system and their next friends, and petitioners, a governor and others, entered into a consent decree which resolved all pending issues other than the fees that respondents' attorneys were entitled to receive under 42 U.S.C.S. § 1988. Awarding fees of about $10.5 million, the District Court found that the proposed hourly rates were “fair and reasonable,” but that some of the entries on counsel's billing records were vague and that the hours claimed for many categories were excessive. The court therefore cut the lodestar to approximately $6 million, but enhanced that award by 75%, or an additional $4.5 million. The Eleventh Circuit affirmed in reliance on its precedent. The Supreme Court granted certiorari.
Did the district court properly enhance the award of attorney’s fees based on superior performance and results?
The court noted that there was a strong presumption that the lodestar figure was reasonable, but that presumption could have been overcome in those rare circumstances in which the lodestar did not adequately take into account a factor that properly may have been considered in determining a reasonable fee. The Supreme Court found that there were a few circumstances in which superior attorney performance was not adequately taken into account in the lodestar calculation, but these circumstances were rare and exceptional, and required specific evidence that the lodestar fee would not have been adequate to attract competent counsel. For example, an enhancement could have been appropriate where the method used in determining the hourly rate employed in the lodestar calculation did not adequately measure the attorney's true market value. The district court did not provide proper justification for the large enhancement that it awarded. Accordingly, the judgment was reversed.