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The State Supreme Court's Rejection of Federal Limits in
Fee-Shifting Cases is a Win for All Californians |
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March 2001 |
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| How attorneys get paid in civil rights and public interest cases has a profound impact on whether rights affecting the public interest will be vindicated. When important rights remain trammeled for lack of qualified counsel willing to accept such cases, both the rule of law and the integrity of the profession itself are compromised. That's why the California Supreme Court's decision last week in Ketchum v. Moses, 01 C.D.O.S. 1549, is so important. |
| At issue in Ketchum was whether or not California should adopt the federal approach that limits the fees lawyers in successful public interest cases may recover. The origin of the federal rule is the U.S. Supreme Court decision, City of Burlington v. Dague, 505 U.S. 557 (1992). In Dague, the U.S. Supreme Court determined that in federal statutory fee-shifting cases (i.e., cases where Congress has determined that the prevailing plaintiff's attorney be paid by the losing party because the case vindicates an important public right), the trial court cannot add a multiplier to a successful lawyer's lodestar when calculating his or her fee. Thus, according to Dague, the very best fee an attorney could hope to expect in a federal civil rights or public interest case — no matter how successful the result or the enormity of the difficulties counsel had to overcome — is the lawyer's lodestar, i.e., the hourly rate multiplied by the number of hours worked on the case. |
| Because these cases are typically litigated on a contingency basis, take years to litigate, and often seek primarily injunctive relief, many public interest-minded lawyers cannot afford to take on such cases. The result in the federal courts has been a drop in private lawyers bringing the kinds of fee-shifting cases that Congress has recognized to be of great public import. |
| That private civil rights lawyers would pass on such cases makes economic sense. As the Third Circuit U.S. Court of Appeals long ago observed: "No one expects a lawyer whose compensation is contingent upon his success to charge, when successful, as little as he would charge a client who in advance had agreed to pay for his services, regardless of success." Lindy Bros. Builders v. American Radiator Standard Corp., 487 F.2d 161, 168 (3d Cir. 1973). Recognizing this, the California Supreme Court in Serrano v. Priest, 20 Cal. 3d 25 (1977) ("Serrano III"), adopted the "lodestar-adjustment method" of determining attorneys' fees in California statutory fee-shifting cases. When determining attorneys' fees in such cases, trial courts would start with counsel's lodestar, and adjust counsel's fee upward or downward depending upon the contingent nature of the risk undertaken, counsel's performance and the results achieved. In this way, the trial court at least has the discretion to award a fee that could fairly compensate counsel for the economic risks inherent in contingent litigation, something the federal courts may not do under Dague. Private counsel could accept a risky public interest case that held out little promise of substantial damages (from which a contingent fee could be achieved) and know, down the road, if he or she were successful and performed admirably by obtaining a significant injunctive relief, the court could award a multiplier to the lodestar. |
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LIEFF
CABRASER HEIMANN & BERNSTEIN, LLP
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| Notice: Lieff
Cabraser attorneys provide legal advice and practice law for clients in
federal district courts throughout the United States and in state courts
where we are licensed to practice. In states in which our lawyers are not
licensed to practice, we have affiliations with local attorneys who serve
as co-counsel with our firm. Please read our disclaimer. |
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Copyright © 2008 Lieff Cabraser Heimann & Bernstein,
LLP
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