The $5 Million Man
Paul Clement schools the high court on why some attorneys are worth every last penny.
It's easy to forget that all nine Supreme Court justices are, at bottom, just recovering attorneys with long experience and strong opinions about lawyers, judges, the legal system, money, and trials. And that's why a simple little argument about attorneys' fees tells us a lot about how the justices think about the business of doing justice.
Perdue v. Kenny A. sounds more complicated than it is. About 100 different federal laws provide for fee shifting. They let the winner of a civil rights case recover attorney's fees as an incentive for lawyers to take these tricky cases. In 2002, a suit was filed in Georgia on behalf of the 3,000 abused and neglected children in the foster-care system. The issues were resolved through mediation and a consent decree, with the plaintiffs winning on everything they'd asked for, save for their attorney's fees, which remained in dispute. The district court judge found a base-line—or what's known as a "lodestar"—fee of $6 million, which he then adjusted up to $10.5 million dollars. He said that in his 27 years on the bench, he had never seen more brilliant lawyering. The 11th Circuit Court of Appeals upheld the hefty increase. The state of Georgia appealed.
The question for the court today is whether, under the relevant civil rights statute, a judge can bump up an attorney's fee award based on the quality of the lawyers' performance. The court has left the door open for a fee bump under extraordinary circumstances but has remained somewhat blurry on what such circumstances might look like.
Mark Cohen represents the state, and he opens by telling the court that the purpose of the statute is "to attract competent counsel without providing a windfall." The statute we're talking about (42 USC Section 1988(b), if you must know) lets trial-court judges award the prevailing party "reasonable attorney's fees," and Supreme Court cases say that courts must come up with a base-line, "lodestar" figure by multiplying billable hours by a reasonable hourly rate. Cohen thinks the district court turned that lodestar into a supernova when he tacked on about $4.5 million for lawyerly fabulousness.
Justice Sonia Sotomayor asks why courts shouldn't be able to recognize "extraordinary circumstances" when, say, "a second-year associate whose billing rate for two years of experience is $200 … did the quality and kind of work of someone far superior in years in skill and experience?" Shouldn't the judge be allowed to reward such prowess with higher attorney's fees?
Justice Antonin Scalia asks whether a law firm could reasonably do the same thing in billing its clients. Could the firm just say, "We're going to kick it up another $10,000 because this—this second-year associate, boy, he's a whiz, and he performed like a senior partner. So we are billing him at the $500 rate, instead of the $200!" When Cohen says a firm couldn't do that, Sotomayor interrupts him: "That's not true. Law firms get bonuses from clients all the time."
Pratik Shah is an assistant to the solicitor general, and he is on Georgia's side in this case. When Scalia asks him whether there is ever a situation in which a judge can crank up the lodestar amount, Shah can only think of one: If an attorney "takes on a particularly unpopular client or cause that causes some harm to his practice or income." Chief Justice John Roberts responds loftily that "it's one of the outstanding traditions of the bar that lawyers are expected to do that in the normal course, and it's not a special circumstance."
He adds philosophically: "And how do you tell whether a client is popular or unpopular? … I suppose one of the more unpopular clients these days is a Wall Street banker. But you wouldn't suggest that law firms charge more when they represent them?"
Shah replies that he means unpopular in the sense that "all my clients will leave my firm if I take on this case." To which Scalia retorts: "You think that is what we had in mind, huh? When we said they are 'extraordinary circumstances'? I think it's very imaginative, but I never would have thought of it …"
Justice Ruth Bader Ginsburg asks whether judges have the discretion to reduce a lodestar award for a rotten performance, saying, "You have the hourly rate, the number of hours, and the judge then says, even though they prevailed, the lawyer wasn't prepared, and I am not going to give the hourly rate?" Justice Anthony Kennedy giggles through that question and adds his own: "And what about a very, very popular cause, and [the lawyer] wins, and they are beating his door down? Can we reduce it for that?"
Shah says no. But Scalia reminds him "what is sauce for the goose is sauce for the gander. … If you get rewarded for unpopularity, you ought to be get penalized for popularity."
Sotomayor notes that "one of the purposes of Congress was to ensure that litigants could attract competent counsel, correct?" She continues: "If the market doesn't give them attorneys to start with because there are so many risks involved in this process, how do you attract counsel that is better than the norm in that field to pursue … cases that Congress has determined are worthy of being pursued?"
Dahlia Lithwick writes about the courts and the law for Slate.
Photograph of man with money by Getty Creative Images.