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Allowing a bonus because of contingency is a means of rewarding counsel for accepting and prevailing in a case that, at the outset, had a low probability of success on the merits.
Plaintiff brought suit under the Employee Retirement Income Security Act (ERISA) of 1974. He alleged that defendant illegally discharged him to deprive him of pension rights. After a three-day bench trial, the district court accepted the plaintiff's position and concluded that the employer had violated ERISA. Defendants, plan administrator and employer companies, appealed the award of a bonus above the attorney fee lodestar awarded to plaintiff employee.
Did the district court properly chose to award an attorney's fee to the prevailing plaintiff in an ERISA case?
The court reversed the fee bonus because the record did not justify it. It held that the district court made no specific findings on either the contingent nature of the case or the quality of the work performed. Moreover, the Plaintiff failed to demonstrate either service or a result of an exceptional nature.