Amicus Curiae Brief — Burlington v. Dague

Supreme Court brief1992

Ask Donna

What actually matters in this document.

Text

1 epee Court, WE

rFihe D

MAR 1 QO R92

No. 91-810 OFFICE OF THE CLERK -

In The

Supreme Court of the United States

OcTroBEerR Term, 1991

City oF BURLINGTON,

Petitioner,

Vv.

ERNEST DaGugE, Sr., ErNeEstT DAGUE, JR.,

Betty DAGUE, AND Rose A. BESSETTE

Respondents.

On Writ of Certiorari

to the United States Court of Appeals

for the Second Circuit

BRIEF OF AMICI CURIAE,

THE DISTRICT OF COLUMBIA AND

SEVERAL OF THE STATES,

IN SUPPORT OF REVERSAL

JOHN PayTon,

Corporation Counsel

CHARLES L. REISCHEL,

Deputy Corporation Counsel

Appellate Division

Donna M. Murasky,

Assistant Corporation Counsel

Counsel of Record

Counsel for the District of Columbia

Room 305, District Building

1350 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

Telephone: (202) 727-6252

{Additional Counsel Listed in Brief]

James H. Evans

Attorney General of Alabama

11 South Union Street

Montgomery, Alabama

36130

(205) 242-7300

DANIEL E. LUNGREN

Attorney General of California

1515 K Street, Suite 600

Sacramento, California

94244-2550

(916) 324-5157

Rosert A. BuTreERWORTH

Attorney General of Florida

Department of Legal Affairs

The Capitol

Tallahassee, Florida

32399-1050

(904) 487-1963

RoLanp W. Burris

Attorney General of Illinois

100 W. Randolph Street

12th Floor

Chicago, Illinois 60601

(312) 814-3698

LINLEY E. PEARSON

Attorney General of Indiana

219 State House

Indianapolis, Indiana 46204

(317) 232-6217

Rospert T. STEPHAN

Attorney General of Kansas

2nd Floor

Kansas Judicial Center

Topeka, Kansas 66612-1597

(913) 296-2215

Scott HARSHBARGER

Attorney General of

Massachusetts

1 Ashburton Place

Boston, Massachusetts 02108

(617) 727-2200

FRANKIE Sue Dev Papa

Attorney General of Nevada

Capitol Complex

Carson City, Nevada 89710

(702) 687-4170

Susan B. LovinG

Attorney General of Oklahoma

Room 112

State Capitol Building

Oklahoma City, Oklahoma

73105

(405) 521-3921

Ernest D. Preare, JR.

Attorney General of

Pennsylvania

16th Floor, Strawberry Square

Harrisburg, Pennsylvania

17120

(717) 787-3391

Mark W. BARNETT

Attorney General of

Sourth Dakota

500 East Capitol Avenue

Pierre, South Dakota

57501-5070

(605) 773-3215

Paut Van Dam

Attorney General of Utah

236 State Capitol

Salt Lake City, Utah 84114

(801) 538-1015

JAMES E. DoyLe

Attorney General of Wisconsin

123 West Washington Avenue

Madison, Wisconsin

53707-7857

(608) 226-9945

TABLE OF CONTENTS

Page

INTERESTS OF AMICI CURIAE l

SUMMARY OF THE ARGUMENT 2

ARGUMENT ... 6

I. THE TYPICAL FEE-SHIFTING STATUTE

SHOULD NOT BE INTERPRETED TO PERMIT

PREVAILING PLAINTIFFS TO SECURE AN

AWARD OF FEES BEYOND THE LODESTAR IN

ORDER TO COMPENSATE THEIR COUNSEL

FOR RISK OF LOSS. 6

A. Prevailing Plaintiffs and the Lodestar Award. 6

B. The Legislative History. 12

C. Reasonable Client-Paid Fees and Reasonable Fee-

Shifting Awards. 14

Il. THE EVIDENCE IN DAGUE, AS IS TYPICAL IN

CASES ATTEMPTING TO APPLY DELAWARE

VALLEY II, 18S WOEFULLY INADEQUATE TO

ESTABLISH THAT RISK ENHANCEMENT IS

NECESSARY TO ENSURE THAT PERSONS

WITH MERITORIOUS CLAIMS UNDER

FEDERAL FEE-SHIFTING LEGISLATION

SECURE COUNSEL. 15

A. Dague. 18

B. McKenzie & King 21

III. RULES GOVERNING AN AWARD OF FEES TO

COMPENSATE COUNSEL FOR RISK OF LOSS

ARE POLITICAL JUDGMENTS TO INTERVENE

IN THE MARKET WHICH SHOULD BE MADE

BY CONGRESS. 24

CONCLUSION 26

TABLE OF AUTHORITIES

Page

CASES

Blanchard v. Bergeron, 489 U.S. 87 (1989) _.. .7, 12, 13, 14, 15

Blum v. Stenson, 465 U.S. 886 (1984) _. Seer: Ff

Christiansburg Garment Co. v. EEOC, 434 U.S. 412

GD ose ore ih g kale we Pence eae dweeewen 9

City of Burlington v. ~~ TP? 935 F.2d 1343 (2d Cir. 1990),

cert. granted, No. 91-810. Pees

Department of Labor v. Triplett, 494 U.S. 715 (1990) 17, 21

Hensley v. Eckerhart, 461 U.S. 424 (1983) >. ae

Independent Federation of Flight Attendants v.

Zipes, 491 U.S. 754 (1989) .......... veeryrer. Ff

Johnson v. Georgia aadttind nessien Inc., 488 F.2d 714

(5th Cir. 1974)....... RAR Per espa ae aes 12,13

King v. Palmer, 906 F.2d 762 (D.C. Cir. 1990), vacated, 950

F.2d 771 (D.C. Cir. 1991) (en banc), petition for a writ

of certiorari pending, No. 91-1370 ...... ay _. passim

Laffey v. Northwest Airlines, Inc., 746 F.2d 4 (D.C. Cir.

1984), cert. denied, 472 U.S. 1021 (1985) er | 8,9

Library of Congress v. Shaw, 478 U.S. 310 (1986) 20

McKenzie v. Kennickell, 875 F.2d 330 (D.C. Cir.), reh'g

denied en banc, 884 F.2d 1405 (D.C. Cir. 1989) passim

Pennsylvania v. Delaware Valley Citizens’ Council for

Clean Air, 478 U.S. 546 (1987)... 6, 7,13

Pennsylvania v. Delaware Valley Citizens’ Council for

Clean Air, 483 U.S. 711 (1987) . * passim

Pierce v. Underwood, 487 U.S. 552 (1988) 10

Riverside v. Rivera, 477 U.S. 561 (1986) 15

Save Our Cumberland Mountains v. Hodel, Inc., 857 F.2d

1516 (D.C. Cir. 1988) (en banc) &

Venegas v. Mitchell, 110 S. Ct. 1679 (1990) 14

TABLE OF AUTHORITIES (continued)

STATUTES

Equal Access to Justice Act, 28 U.S.C. § 2412

Clean Water Act, 33 U.S.C. § 1251 et seg.

33 U.S.C. § 1365(d)

42 U.S.C. § 1988

Resource Conservation and Recovery Act of 1976,

42 U.S.C. § 6901 et seq.

42 U.S.C. § 6972(e)

OTHER AUTHORITIES

H.R. Rep. No. 94-1558 (1976)

S. Rep. No. 94-1011 (1976)

ill

6,14

No. 91-810

In The

Supreme Court of the United States

OcroBer TERM, 1991

City or BURLINGTON,

Petitioner,

Ernest DaGue, Sr., Ernest DaGcue, JR.,

Betry DAGUE, AND Rose A. BESSETTE

Respondents.

On Writ of Certiorari

to the United States Court of Appeals

for the Second Circuit

BRIEF OF AMICI CURIAE,

THE DISTRICT OF COLUMBIA AND

SEVERAL OF THE STATES,

IN SUPPORT OF REVERSAL

INTERESTS OF AMICI CURIAE

Amici are the District of Columbia and several of the

States. These governments, as well as local governments

within the States, are subject to numerous federal statutes

that provide for an award of reasonable attorney's fees to

prevailing plaintiffs. Increasingly under these statutes,

prevailing plaintiffs have requested, and have been granted,

fee awards in excess of lodestar fee awards — that is, awards

in excess of the product of reasonable hourly rates charged

by attorneys and the number of hours reasonably expended

on the litigation. These additional awards are made in cases

in which counsel for plaintiffs have agreed to represent their

clients on a contingent-fee, or partial contingent-fee, basis.

They purport to protect counsel against the risk of receiving

no fee, or a fee that does not fully reflect the value of the time

expended on the case, should they lose. Such risk enhance-

ments, which may equal already costly lodestar awards, have

had a severe impact on the public fisc and on the ability of

state and local governments to pursue litigation policies they

believe will promote the public interest. Such undesirable

effects are likely to become even greater, unless this Court

rules that risk enhancement is not authorized by Congress

in fee-shifting provisions that merely permit an award of a

reasonable attorney's fee to a prevailing party.

As a consequence, amici urge this Court to reverse the deci-

sion of the Second Circuit in this case requiring the City of

Burlington, Vermont, to pay a risk enhancement to counsel

for plaintiffs who prevailed in litigation against it pursuant

to two federal fee-shifting statutes. This Court should rule

that a risk enhancement may never be awarded under the

typical federal fee-shifting statute.

SUMMARY OF THE ARGUMENT

Congress has enacted more than 100 statutes that permit

courts to award a reasonable attorney's fee to a prevailing

party in litigation, including awards to prevailing plaintiffs

against state and local governments. The language of such

fee-shifting provisions should not be interpreted to permit

lodestar awards to be enhanced simply because counsel for

plaintiffs have agreed to represent them on a contingent-fee

basis. Risk enhancement is, in effect, an award of fees for

litigation in which plaintiffs have not prevailed, and it com-

pels defendants to pay attorney’s fees for time expended by

plaintiffs’ counsel in other cases in which defendants have

prevailed.

Neither the purpose nor the legislative history of fee-shift-

ing legislation supports such a result. Instead, as ali but

one of this Court's decisions have indicated, there is a strong

presumption that a reasonable attorney's fee that may be

awarded against a defendant pursuant to the typical fee-

shifting statute is a lodestar award, no more and no less. In

addition, this Court has ruled that parties who defend such

cases should not be required to pay fees for litigation that

does not establish a violation of the law on their part. Final-

ly, this Court has made plain that there is no necessary cor-

relation between the reasonableness of fees that a client may

agree to pay his counsel pursuant to a contingent-fee agree-

ment and the reasonableness of fees that a defendant should

be obliged to pay to plaintiff's counsel when a plaintiff

prevails in a case.

In this Court’s only decision addressing the propriety of

risk enhancements under the typical fee-shifting statute,

Pennsylvania v. Delaware Valley Citizens’ Council for Clean

Air, 483 U.S. 711 (1987), this Court denied a risk enhance-

ment but in a sharply divided decision. A plurality adopted

as an initial position that fee awards may never be enhanced

to compensate for risk of loss because, inter alia, such

enhancements compel defendants to pay fees for cases in

which plaintiffs do not prevail and, if calculated on a case-

by-case basis, would result in awards against defendants that

vary inversely with the strength of the case against them.

Id. at 724-27. The plurality’s secondary position was that,

if risk enhancement is permissible, such awards may be made

only in exceptional cases in which plaintiffs faced a real risk

of not prevailing and such awards may not be greater than

one-third of the lodestar. Jd. at 730.

Justice O'Connor, who concurred in part and in the judg-

ment, refused to rule out the possibility of risk enhancement

but agreed that any risk enhancement could not be based

on a case-by-case assessment of the merits. Jd. at 731, 734.

Instead, she wrote, courts should examine the market to

determine whether a risk enhancement is needed, and in what

amount, and should make those determinations on a class-

wide basis. Jd. at 731-34.

Finally, the dissent, although agreeing that risk enhance-

ment should not be based on the likelihood of success in a

particular case, would have permitted a risk enhancement

in each and every case to the extent that plaintiffs’ counsel

were not able to mitigate the risk of loss by contractual

arrangements with their clients. Jd. at 747-49. In addition,

the dissent would have permitted an extra risk enhancement

in special circumstances. /d. at 751-52.

Amici believe that the experiences of the last five years

under the Delaware Valley I] regime demonstrate the cor-

rectness and wisdom of the initial position taken by the

Delaware Valley II plurality — that risk enhancement of a

lodestar fee award is improper. Those experiences have

revealed that the approaches set forth in the plurality’s

secondary position, and in Justice O'Connor's concurring opi-

nion, as well as in the across-the-board basic contingency

enhancement advocated by the dissent, cannot be applied

in a manner that results in a rational fee-shifting scheme —

one that ensures that persons with meritorious claims, but

modest means, secure counsel, but avoids windfalls to

attorneys.

Some of the problems are illustrated by the case now under

review. The risk enhancement award here is based on an

assessment of the potential merits of the case, as they might

have been perceived at the outset of the litigation; it is also

based on factors, such as delay in payment and the complex-

ity of the case, that are either separately compensable or in-

cluded in the lodestar. These flaws, as well as others, are

also illustrated by the risk enhancement rule adopted, and

then rejected, by the United States Court of Appeals for the

District of Columbia Circuit. In McKenzie v. Kennickell, 875

F.2d 330 (D.C. Cir.), reh'g denied en banc, 884 F.2d 1405 (D.C.

Cir. 1989), and in King v. Palmer, 906 F.2d 762 (D.C. Cir.

1990),' the court developed a rule that there should be a 100%

‘For the convenience of the Court, the panel decision in King is

reproduced in the appendix. App. 49A-67A.

enhancement of the lodestar in each and every case to the

extent that it was contingent. This rule has now been rejected

by the court sitting en banc in favor of a rule that risk

enhancement is never permitted in the absence of express

Congressional authorization. King v. Palmer, 950 F.2d 771

(D.C. Cir. 1991), petition for a writ of certiorari pending, No.

91-1370.?

Furthermore, assuming that it is proper for this Court to

determine whether risk enhancement is needed, Dague and

the decisions of the D.C. Circuit make plain that the evidence

heretofore adduced is woefully insufficient to support a con-

clusion that risk enhancement is needed to ensure that per-

sons with meritorious claims, but modest resources, can

secure legal representation. Instead, the evidence merely

establishes what some attorneys believe is a desirable level

of compensation, as if the purpose of statutory fee-shifting

were to ensure that attorneys replicate the returns they seek

to achieve through private arrangements with clients.

Finally, the experiences of amici under the Delaware Valley

I] regime make two other matters plain. First, requests for

risk enhancement call upon the judiciary to make legislative

judgments that properly belong to Congress. Second, judicial

awards of risk enhancement, rather than reflecting the

market, artificially alter the market in a manner that pro-

duces windfalls for attorneys.’

*For the convenience of the Court, the en banc decision in King is

reproduced in the appendix. App. |A-48A.

‘Citations to the appendix attached to this brief are designated as

“App. —." Citations to the appendix to the petition for the writ of cer-

tiorari in City of Burlington v. Dague are designated “Dague Cert. Pet.

App. —.” Citations to the Petition for a Writ of Certiorari in King v.

Palmer, No. 91-1370, are designated “King Cert. Pet. —.”’

ARGUMENT

I. THE TYPICAL FEE-SHIFTING STATUTE SHOULD

NOT BE INTERPRETED TO PERMIT PREVAILING

PLAINTIFFS TO SECURE AN AWARD OF FEES

BEYOND THE LODESTAR IN ORDER TO COM-

PENSATE THEIR COUNSEL FOR RISK OF LOSS.

In enacting fee-shifting legislation, Congress intervened

in the marketplace to encourage the vindication of selected

federal rights. The issue in this case is the extent of Con-

gress’s intervention. In resolving this issue, ‘‘the judicial

role is to reconcile competing rights that Congress has

established and competing interests that it normally takes

into account.’’ Independent Federation of Flight Attendants

uv. Zipes 491 U.S. 754, 764 n.4 (1989). When the competing

rights that Congress established and the competing interests

it normally takes into account are examined, amici believe

that this Court must conclude that Congress authorized only

lodestar awards to prevailing plaintiffs.

A. Prevailing Plaintiffs and the Lodestar Award.

The language of the typical federal fee-shifting provision,

like the language of the fee-shifting provisions at issue in

this case, merely permits courts to award a reasonable

attorney's fee to a party who prevails in litigation.‘ Both

‘The fee-shifting provisions at issue in this case are those contained

in the Clean Water Act, 33 U.S.C. § 1251 et seq., and in the Resource

Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seg. Both

provisions permit a “reasonable attorney” fee to be awarded to the

“prevailing or substantially prevailing party . . ..". 33 U.S.C. § 1365(d);

42 U.S.C. § 6972(e). This Court has ruled that federal fee-shifting provi-

sions containing this language, or language similar to it, should be inter-

preted in the same way. See, e.g., Independent Federation of Flight Atten-

dants v. Zipes, supra, 491 U.S. at 758 n.2 (explaining that 42 U.S.C. §

1988 was patterned after the fee provision of Title VII and, as a conse-

quence, they should ordinarily be “interpreted alike’); Pennsylvania v.

Delaware Valley Citizens’ Council for Clean Air, 478 U.S. 546, 560 (1986)

(fee-shifting provision of Clean Air Act should be interpreted like 42 U.S.C.

§ 1988, even though the Clean Air Act merely states that parties may

secure fees and does not specify prevailing parties).

before and after Delaware Valley II, this Court has ruled that

a lodestar award is presumptively a reasonable attorney's

fee that may be imposed against an unsuccessful defendant

under such fee-shifting provisions. See, e.g., Blanchard v.

Bergeron, 489 U.S. 87, 94-95 (1989); Pennsylvania v.

Delaware Valley Citizens’ Council for Clean Air, 478 U.S. 546,

565 (1986) (““Delaware Valley I’’); Blum v. Stenson, 465 U.S.

886, 898-901 (1984). A lodestar award, properly computed,

compensates counsel for all time reasonably expended on a

case at a reasonable hourly rate.

This Court has also made clear that fee-shifting statutes

should be interpreted to minimize defense subsidies of unsuc-

cessful litigation and that these statutes do not ordinarily per-

mit fees to be awarded against parties for litigation that does

not establish a violation of law on their part. Thus, in Hensley

v. Eckerhart, 461 U.S. 424, 440 (1983), this Court ruled that

a plaintiff who prevails on one claim in a case may not recover

fees for time spent on distinct unsuccessful claims.

Furthermore, in Independent Federation of Flight Atten-

dants v. Zipes, supra, this Court ruled that prevailing plain-

tiffs, or their counsel, may not recover their fees when fee-

shifting would require a party to pay fees for litigation which

did not establish that it engaged in wrongdoing. The issue

in Zipes was whether an intervenor — there a union — in a

Title VII case brought by employees against their employer

could be held liable for lodestar fees incurred by prevailing

plaintiffs in successfully meeting the union's arguments. This

Court ruled that an intervenor may not ordinarily be held

liable for such fees. Instead, an intervenor may be held liable

only in those circumstances in which a plaintiff who loses may

be held liable for a defendant's fees under a fee-shifting statute

— only if its claims were ‘frivolous, unreasonable, or without

foundation . : .."’ Id. at 766.

In so ruling, this Court assumed that the time spent by

plaintiffs meeting the arguments of the intervening union,

including arguments against liability, would not be compen-

sated at all. Jd. at 762. However, this fact had to be balanc-

ed against the fact that the intervenor had not been found

guilty of violating plaintiffs’ rights. The Court stated: ““Even

less with regard to an innocent intervenor than with regard

to an allegedly lawbreaking defendant would Congress have

wished to ‘distort’ the adversary process . . . by giving the

plaintiff a disproportionate advantage with regard to fee en-

titlement.’’ Jd. at 764. As this Court explained:

. . . [NJothing in the statute gives . . . [prevailin

plaintiffs] hegemony over all the other rights an

equities that exist in the world. Here as elsewhere,

the judicial role is to reconcile competing rights that

Congress has established and competing interests

that it normally takes into account.

Id. at 764 n.4.

One of the rights that Congress has established in fee-

shifting legislation is that a defendant who prevails in litiga-

tion brought pursuant to such legislation is not obliged to

pay plaintiff's attorney’s fees. Risk enhancement under-

mines this right. Risk enhancement is sought precisely

because, in some cases, plaintiffs fail to establish wrongdo-

ing by defendants. It is thus a defense-paid subsidy for un-

successful litigation. As the plurality in Delaware Valley II

explained:

On a more fundamental level, . . . using the risk

of loss to increase the lodestar figure compensates

attorneys not only for their successful efforts in one

case, but for their unsuccessful claims asserted in

related cases. This not only ‘‘encourag{es] marginal

litigation,’’ but raises ‘‘the reasonable question of

‘why the subsidy [for unsuccessful litigation] should

come from the defendant in another case.’ ’

Delaware Valley II, supra, 483 U.S. at 719-20, quoting Laffey

v. Northwest Airlines, Inc. 746 F.2d 4, 27 n.138 (D.C. Cir.

1984), cert. denied, 472 U.S. 1021 (1985).°

Hensley and Zipes thus strongly support the principle that

a defendant, whom Congress has exonerated from liability

’ Laffey was overruled in part in Save Our Cumberland Mountains v.

Hodel, Inc., 857 F.2d 1516 (D.C. Cir. 1988) fen banc).

for plaintiff's attorney's fees in a case in which defendant

prevails, should not then be obliged to subsidize this loss

in another case by payment of a risk-enhanced award to a

plaintiff who might have lost but who did not. If, under

Hensley, a defendant need not pay even a lodestar award

to a prevailing plaintiff for hours spent on distinct claims

on which the plaintiff did not prevail, the ‘‘same logic”

dictates that this defendant should not have to pay a risk

enhancement to that plaintiff because in a different case, a

plaintiff did not prevail. Laffey v. Northwest Airlines, Inc.,

746 F.2d at 27.

Similarly, insofar as risk enhancement is concerned, a

defendant, like the Zipes intervenor, is a party that is being

asked to pay fees because of litigation which did not establish

any wrongdoing on its part. Furthermore, defendants, in

cases pursuant to federal fee-shifting statutes, are already

disadvantaged with respect to fee entitlement, even without

risk enhancement. Fee-shifting statutes essentially authorize

one-way fee-shifting to prevailing plaintiffs because prevail-

ing defendants, unlike prevailing plaintiffs, ordinarily may

not recover their fees. For prevailing defendants to recover

fees, they must demonstrate that plaintiffs’ action was

‘frivolous, unreasonable, or without foundation . . .."’ Chris-

tiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978).

The conditions under which prevailing plaintiffs and prevail-

ing defendants may receive lodestar fee awards thus sharply

tilt the adversary process in favor of plaintiffs. To permit

counsel for plaintiffs to receive enhanced fee awards because

they might have lost that case, or may have lost others,

would distort the adversary process even more and would

confer on plaintiffs a disproportionate advantage in secur-

ing fee awards. See App. 67A (Williams, J., concurring).

The premise underlying requests by attorneys for a risk

enhancement is that Congress, in altering the American Rule

on fee-shifting to provide for an award of a reasonable attor-

ney’s fee to a prevailing party, must have intended to require

defendants to pay an award reflecting the premium a private

client might agree to pay from the fruits of a successful

lawsuit in exchange for free representation should the case

be unsuccessful. Put another way, Congress must have in-

tended to incorporate into fee-shifting the private-market

model of contingent-fee contracts, but with defendants pay-

ing the bill rather than the client.

This premise overlooks the rights of defendants that Con-

gress established in fee-shifting legislation as well as the in-

terests of defendants that Congress normally would have

taken into account. Court-ordered fee awards pursuant to

the typical fee-shifting statute may run against the public,

as they may whenever the United States, the District of

Columbia, the States, or local governments are defendants.

Furthermore, there are significant differences between

attorney-client fee agreements and court-ordered fee awards.

Thus, when Congress has focused on the competing inter-

ests presented in cases against government, as it did in enact-

ing the Equal Access to Justice Act (“EAJA”’), 28 U.S.C.

§ 2412, it has taken steps to protect the public fisc. Under

the EAJA, a prevailing plaintiff may recover fees against

the United States only if a court finds that the position of

the United States was not substantially justified. Further-

more, the EAJA, which provides that fee awards ‘‘shall be

based on market rates,”’ (28 U.S.C. § 2412 (a)(2)(A)), also

places a general cap on the hourly rate that may be charg-

ed. See Pierce v. Underwood, 487 U.S. 552 (1988). The EA-

JA does not, of course, impeach the validity of this Court's

more generous lodestar approach under the typical fee-

shifting statute. It is, however, evidence that the public fisc

is one of the interests Congress normally considers in enac-

ting fee-shifting statutes that impose obligations on govern-

ment and that the interest of prevailing plaintiffs in recover-

ing their attorney's fees is not always predominant.

In addition, in enacting fee-shifting legislation, Congress

was cognizant of the traditional private contingent-fee ar-

rangement, because it recognized that such arrangements,

in some instances, did not offer incentives to attorneys to

take on cases having no prospect of a substantial damages

award. In a case having such a prospect, however, a client

who cannot pay an attorney his usual fee may agree to pay

a premium for legal services should the attorney succeed.

Free legal services confer a substantial benefit on a client.

In exchange for that benefit, it is reasonable for the attorney

to charge a fee to the client, if the case is won, that is greater

than the fee a fee-paying client would be charged for the time

expended. In such a case, the client is the direct beneficiary

of the agreement, and the attorney, who usually agrees to a

fee that is measured by a percentage of any damages award,

has an incentive not only to win but also to litigate the case

efficiently. The less time an attorney spends in winning the

case, the greater is his profit.

By contrast, defendants, who pay fees pursuant to fee-

shifting legislation, do not bargain with plaintiffs’ counsel over

the terms of a fee agreement and secure no benefit from it.

Furthermore, if such a case is brought on a contingent-fee

basis, the plaintiff has no incentive to monitor how much time

his attorney spends on it and an attorney's incentive to be

efficient may be reduced because the defendant will be obliged

to pay for all time reasonably spent on the litigation at his

market rates.

Given these differences, this Court should not attribute to

Congress a purpose to shift to defendants responsibility to

pay a premium that a client might have agreed to pay for

free representation, or for representation at rates below those

usually charged by an attorney. There is no reason to assume

that, under fee-shifting, Congress intended to make defen-

dants, including public defendants, act as insurers for

misjudgments by plaintiffs’ attorneys. Put another way, there

is no reason to assume that Congress intended to protect

attorneys for plaintiffs against the consequences of their

errors in assessing the merits of a case and to have that pro-

tection paid in part by hard-pressed taxpayers.

. In short, this Court should not interpret Congress's direc-

tive to courts to award a reasonable attorney's fee to a pre-

vailing party as a directive that defendants must pay fee

awards to plaintiffs’ counsel to compensate counsel for risk

of loss in contingent-fee cases. Instead, given the competing

interests that Congress normally takes into account, this

Court should conclude that Congress intended that counsel

be paid only for all time reasonably expended on a case.

B. The Legislative History.

The limited legislative history addressing the issue of what

constitutes a reasonable attorney's fee under the typical

federal fee-shifting statute does not support risk enhance-

ment. This history consists principally of the Senate and

House Reports accompanying 42 U.S.C. § 1988, S. Rep. No.

94-1011 (1976); H.R. Rep. No. 94-1558 (1976). These reports

cite with approval Johnson v. Georgia Highway Express,

Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), a decision that

listed 12 factors that should be considered in calculating a

reasonable attorney's fee under a fee-shifting statute, in-

cluding whether the fee for a case is fixed or contingent.”

To the extent that this legislative history is pertinent, it

supports the lodestar approach that this Court has adopted.

Thus, as this Court stated in Blanchard v. Bergeron, ‘‘|t}he

legislative history . . . is instructive insofar as it tells us:

‘In computing a fee award, counsel for prevailing parties

should be paid, as is traditional with attorneys compensated

by a fee-paying client, for all time reasonably expended on

a matter.’”’ 489 U.S. at 91, quoting S. Rep. 94-1011 at 6

(internal quotation marks omitted) (emphasis added). Fur-

thermore, this Court has eliminated the independent

significance of most of the Johnson factors. For example,

this Court has “specifically held . . . that the ‘novelty [and]

*The Senate Report also approvingly cites three district court cases

applying in various ways Johnson's 12 factors. S. Rep. No. 94-1011 at

6. These three cases have been analyzed by this Court on a number of

occasions. See, e.g., Blanchard v. Bergeron, supra, 489 U.S. at 91-93;

Delaware Valley 11, supra, 483 U.S. 723-24; Blum v. Stenson, supra, 465

U.S. at 893-95.

complexity of the issues,’ ‘the special skili and experience

of counsel,’ the ‘quality of representation,’ and the ‘results

obtained’ from the litigation are presumably fully reflected

in the lodestar amount, and thus cannot serve as indepen-

dent bases for increasing the basic fee award.” Delaware

Valley I, supra, 478 U.S. at 565, quoting Blum, supra, 465

U.S. at 898-900.

As noted, the legislative history refers to Johnson, and

Johnson states that one factor a court should consider is

whether the fee for a case is fixed or contingent. This

reference does not support a risk enhancement, however,

because Johnson goes on to suggest that the purpose of this

inquiry is to set a cap on a fee that may be awarded under

a fee-shifting statute. Johnson states: ‘‘In no

event . . . should the litigant be awarded a fee greater than

that he is contractually bound to pay, if indeed the attorneys

have contracted as to amount."’ 488 F.2d at 718.

In Blanchard v. Bergeron, of course, this Court decided

that this reference did not establish a Congressional intent

to cap fee awards, and instead unanimously ruled that a

contingent-fee agreement may not impose a ceiling on a

statutory fee award, computed by multiplying a reasonable

hourly rate by the number of hours reasonably expended.

In so ruling, this Court underscored the presumption that

the lodestar is a reasonable attorney's fee for defendants to

pay under the typical fee-shifting statute. Thus, in Blan-

chard, the Court reiterated that such a fee-shifting statute:

contemplates reasonable compensation, in light of

all the circumstances, for the time and effort —

ed by the attorney for the prevailing plaintiff, no

more and no less. Should a fee agreement provide

less than a reasonable fee calculated in this manner,

the defendant should nevertheless be required to pay

the higher amount. The defendant is not, however,

required to pay the amount called for in a contingent-

fee contract if it is more than e reasonable fee

calculated in the usual way.

Id. at 93 (emphasis added). Finally, in rejecting the argument

that a statutory fee award against a defendant in excess of

that permitted by a contingent-fee agreement will result in

a windfall to attorneys, the Court stated:

_ . . [The very nature of recovery under [the typical

fee-shifting tatute] is designed to prevent any such

‘windfall. Fee awards are to be reasonable,

reasonable as to billing rates and reasonable as to

the number of hours spent in advancing the suc-

cessful claims. Accordingly, fee awards, proper|

calculated, by definition will represent the reasonab

worth of the services rendered in vindication of a

plaintiff's civil rights claim.

Id. at 96.

In short, the legislative history, to the extent that it is

relevant and instructive, indicates that attorneys receiving

fees pursuant to fee-shifting statutes are entitled to lodestar

awards, no more and no less.

C. Reasonable Client-Paid Fees and Reasonable Fee-Shift-

ing Awards. ,

Given the obvious differences between a purely private fee

agreement and fee liability imposed by law, there is no

apparent reason to equate a reasonable fee that a client may

agree to pay his counsel with a reasonable fee a defendant

may be obliged to pay under a fee-shifting statute. Indeed,

this Court has not done so.

Thus, as this Court unanimously ruled in Venegas v.

Mitchell, 110 S. Ct. 1679 (1990), plaintiffs’ counsel may

enforce promises by their contingent-fee clients to pay them

fees well in excess of a lodestar fee award. In Venegas, this

Court upheld a contract in which the client agreed to pay

his attorney 40% of any damages award; permitted his

attorney to seek fees from the defendant under 42 U.S.C.

§ 1988; and provided that any statutory fee award would be

applied against the fee for which the client was responsible.

The client received a damages award of $2.08 million; and

the court awarded a statutory fee against defendants in the

amount of $117,000, which consisted of a lodestar award

doubled for competent performance. When the client refused

to honor his contract, his attorney sued him for fees of

$406,000.

In upholding the agreement, the Court assumed that

Delaware Valley 1] would not have authorized a defense-paid

risk enhancement of that magnitude. Nevertheless, it ruled

that § 1988 did not invalidate the contingent-fee agreement

even though the fee privately agreed to turned out to be

seven times the lodestar award.

On the other hand, as the Court ruled in Blanchard, a

contingent-fee agreement, bargained for in the marketplace

and presumably producing a reasonable fee, does not place

a cap on a statutory fee award that an attorney may recover

from the defendant. Nor, as this Court ruled in Riverside

uv. Rivera, 477 U.S. 561 (1986), need a statutory fee award

be proportionate to the award of damages received in a case,

as the fee under the typical private contingent-fee contract

necessarily must be. There, this Court upheld a statutory

fee award of $245,456.25 in a case that produced a damages

award of only $33,350.00.

Il. THE EVIDENCE IN DAGUE, AS IS TYPICAL IN

CASES ATTEMPTING TO APPLY DELAWARE

VALLEY II, I8 WOEFULLY INADEQUATE TO

ESTABLISH THAT RISK ENHANCEMENT IS

NECESSARY TO ENSURE THAT PERSONS WITH

MERITORIOUS CLAIMS UNDER FEDERAL FEE-

SHIFTING LEGISLATION SECURE COUNSEL.

Following Delaware Valley 11, courts across the country

struggled to determine whether, and in what amount, a risk

enhancement is necessary to ensure that persons with meri-

torious claims under fee-shifting statutes secure counsel. In

this struggle, courts often asked whether, without risk en-

hancement, a person with a meritorious claim would have

substantial difficulties obtaining counsel. The Second Circuit

in Dague took an ad hoc approach to this concept, an ap-

proach that reflects elements of the plurality’s secondary

position in Delaware Valley II and of Justice O'Connor's con-

curring opinion. Another approach drew upon Justice O'Con-

nor’s class-based, market analysis and reflected elements of

the dissent's basic contingent-fee analysis. This approach

was adopted by panels of the District of Columbia Circuit

in McKenzie and King, and then overturned en banc.

Despite the differences in these approaches, they have

important elements in common: (1) an assumption that

courts should, and can, make judgments on the availability

and level of risk enhancement under federal fee-shifting

statutes even though these judgments are legislative, not

judicial, and even though judicial judgments on risk enhance-

ment are likely to alter the market rather than reflect it; (2)

an assumption that whatever burden plaintiffs must satisfy

to demonstrate need for a risk enhancement may be discharg-

ed by self-serving and anecdotal attorney affidavits even

though such affidavits, in important respects, demonstrate

that a lodestar award, properly computed and adjusted for

delay, is adequate to attract counsel, and even though the

plaintiffs before the court had no difficulty obtaining counsel

without an assurance of a premium for risk; and (3) assump-

tions that each and every attorney in the market is an at-

torney fully employed doing work for fee-paying clients and

that the only motive attorneys have in representing clients

is to maximize profits.

Amici submit that each of these assumptions is erroneous

and that Dague, as well as the cases in the D.C Circuit,

demonstrate that plaintiffs have utterly failed to show that

risk enhancement is necessary. First, as amici already have

discussed, courts should not inquire about need because Con-

gress did not authorize risk enhancements under the typical

fee-shifting statute. In addition, for the reasons set forth

in part III @ - tis brief, the judgments that must be made

to authorize risk enhancements are judgments that are

legislative, not judicial, in character. Concomitantly, judicial

judgments on risk enhancement are bound to alter the

market artificially, not to reflect how the market operates.

Second, plaintiffs and their attorneys may not discharge

their burden to show need for risk enhancement by marshall-

ing affidavits from attorneys that are anecdotal in content

and self-interested in motivation. Thus, in Department of

Labor v. Triplett, 494 U.S. 715 (1990), this Court characteriz-

ed a record based on attorney affidavits virtually identical

to the record in Dague, as “blatantly insufficient to meet

[the] . . . burden of proof, even if entirely unrebutted.”’ /d.

at 724. The affidavits in Dague, like the affidavits in Triplett,

are ‘‘small in volume, anecdotal in character, and self-

interested in motivation . . .."’ Jd. at 725. The attorney

affidavits in McKenzie and King are similar in content and

motivation to those in Dague, and although they are more

numerous, this can hardly be regarded as significant in view

of the fact that there are far more attorneys in Washington,

D.C., than there are in Burlington, Vermont. Here, as in

Triplett, moreover, the hard record evidence, as well as the

attorney affidavits, undercut in important respects the claim

that risk enhancement is needed. Overall, the records in

Dague, McKenzie, and King, far from establishing a need

for a risk enhancement, permit just the opposite inference.

Finally, as Dague, McKenzie, and King demonstrate, not

all attorneys in this country are fully engaged doing work

for fee-paying clients. In addition, as McKenzie and King

demonstrate, there are a range of market players, including

not-for-profit legal services organizations, and for-profit

attorneys and firms willing to do work on a pro bono basis.

These attorneys, of course, are entitled to lodestar fee awards

at market rates should they prevail. lodestar awards,

of course, compensate legal services organizations at levels

that exceed their costs and change dramatically the rewards

of pro bono representation.

A. Dague.

In Dague, plaintiffs’ counsel requested a 100% risk

enhancement. They supported this request by five attorney

affidavits. Two of these affidavits were submitted by counsel

for plaintiffs, Richard N. Bland and William W. Pearson;

three were from attorneys not associated with the case.

The Bland affidavit made two principal points: (1) ‘‘An

important factor in this firm's decision to pursue [this

case] . . . was the opportunity to have any eventual award

of attorneys fees enhanced by the Court beyond the lodestar

amount;”’ and (2)‘‘ . . . I am of the opinion that Plaintiffs

would have faced extreme difficulties in finding other local

counsel of similar experience to pursue their claims . . . on

a hourly rate to be paid only on the contingency of success.”

Bland Aff. ¢ 9 (emphasis added). Mr. Pearson, in turn, ex-

plained that most counsel in complex environmental cases

filed in Vermont are from Boston, New York City, and

Washington, D.C. Pearson Aff. ¢ 4. Risk enhancement was

needed because, in Mr. Pearson's ‘‘considered judgment{,|

. . . plaintiffs could have found no other attorneys to repre-

sent them other than Attorney Bland and myself.’ Pearson

Aff. € 8. The bases for that conclusion were: the case was

fully contingent; there are few attorneys in Vermont who are

experienced environmental attorneys; the defendant was a

municipality, a factor that ‘‘increas|es] the uncertainty of

strategy and outcome;"’ and the time expended on the case

was substantial. Pearson Aff. ¢ 8.’ The three attorneys not

associated with the case merely stated that when they, or

’ As this Court ruled in Delaware Valley 11, however, the fact that a

‘defendant is difficult or obstreperous does not enter into assessing the

risk of loss or determining whether that risk should be compensated. ”

483 U.S. at 716.

attorneys they know, take cases on a contingent-fee basis,

they attempt to set the percentage of recovery allocable to

their fees at a level that would be greater than they would

receive had the clients been able to pay on a hourly basis.

The reality revealed by the record in Dague, however, is

somewniit different from the purpose for which the attorney

affidavits were submitted. Here, counsel took the case on

a contingent-fee basis even though there was only a possi-

bility, not a probability, and certainly not a certainty, of

receiving an enhanced fee award should they prevail. And,

the affidavits do not state that petitioners had any difficulty

persuading Messrs. Bland and Pearson to work on their case

in these circumstances.

The trial court, nevertheless, granted a 25% enhancement,

applying a test that asked “whether ‘[wjithout the possibility

of afeeenhancement . . . competent counsel might refuse

to represent [environmental] clients thereby denying them

effective access to the courts.’ " Dague Cert. Pet. App. 132a

(emphasis added) (brackets supplied by court) (internal quota-

tion marks omitted). The bases for the 25% enhancement

were: this was a contingent-fee case that precluded counsel

from undertaking fee-paying employment; the risk of not

prevailing was ‘‘substantial,’’ as ‘‘evidenced in part by the

court's denial of plaintiffs’ motion for a preliminary injunc-

tion;”’ plaintiffs did not ‘‘ultimately prevail until after trial;”’

and there was ‘‘delay in receiving payment."’ Dague Cert.

Pet. App. 131a-33a. The trial court rejected the argument

that enhancement of the lodestar was proper based on the

novelty of the issues, the complexity of the litigation, and

the skill and experience of counsel because these factors are

reflected in the lodestar. Dague Cert. Pet. App. 131a.

The Second Circuit, in affirming, observed that the case

was fully contingent and that the trial court had determined

that ‘‘the risk of not prevailing was substantial."’ Dague

Cert. Pet. App. 37a. In addition, the Second Circuit noted

that the trial court, ‘‘[a]fter considering the . . . affidavits

on file, . . . also [had] found that absent an opportunity for

enhancement to balance the risk of losing entirely, plaintiffjs]

would have faced substantial difficulty in obtaining counsel

of reasonable skill and competence for this difficult case in

a complicated field of law.’’ Dague Cert. Pet. App. 37a.

These decisions are flawed for several reasons. First, both

the trial court and the Second Circuit took into account the

risks of the specific case in permitting an enhancement."

Second, the trial court considered: (1) the length of the litiga-

tion in its risk enhancement award, even though that ele-

ment should be reflected in the lodestar; and (2) plaintiffs’

counsel's delay in receiving their fees, even though this ele-

ment is quite distinct from risk. See, e.g., Delaware Valley

II, supra, 483 U.S. at 716; Library of Congress v. Shaw, 478

U.S. 310 (1986). Third, preclusion of other employment is

analytically distinct from risk, and irrelevant — since counsel

received a lodestar award for the time they reasonably ex-

pended on the litigation and presumably at rates equivalent

to those they would otherwise have charged to fee-paying

clients.’ Finally, the decisions offer no reasoned basis for

distinguishing this contingent-fee case from any other such

case or for the award of 25%, as opposed to some other

percentage.

* In contrast to the ad hoc approach to risk enhancement for work at

the trial level, the Second Circuit denied an unopposed motion for risk

enhancement for the appeal, stating that ‘‘[t}he ‘risk’ involved in defending

an appeal is not significant and, in the circumstances of this case, calls

for no enhancement to the ‘lodestar’ amount.’’ Dague Cert. Pet. App.

39a. This across-the-board approach to defending appeals, which con-

tradicts what every appellate lawyer knows — that the risks of defen-

ding an appeal vary greatly — also illustrates the difficulties courts have

in making sound determinations concerning risk enhancement.

*The preclusion-of-other-employment determination apparently was

based on an affidavit by one of plaintiffs’ counsel that merely stated that

he and his firm previously had limited their practice ‘‘to representing fee-

paying clients, because of the risk associated with the representation

of . . . plaintiffs on a contingency fee basis’’ and “|t}hus, most of the

hours spent on this matter would have been spent representing other

{Footnote continued on next page|

Even assuming that the lower courts in Dague had focused

solely on risk in determining the propriety of a risk enhance-

ment, the evidence that an enhancement was necessary to

ensure that persons with meritorious claims could secure

counsel without substantial difficulties was wholly lacking.

The Dague affidavits are utterly insufficient under Triplett

to establish that an award limited to the lodestar would cause

persons with meritorious claims substantial difficulties in

finding counsel, or that a 25% risk enhancement is necessary

to ensure that this client, and others with meritorious clainis,

are able to secure counsel without substantial difficulty.

B. McKenzie & King.

The panel decisions in McKenzie and King established an

extraordinary rule on risk enhancements applicable to all liti-

gation brought under most federal fee-shifting statutes in

the District of Columbia: whenever a defendant does not

prevail in such a case, it must pay a 100% enhancement of

the lodestar fee award to the extent that the case was taken

by plaintiff's counsel on a contingent-fee basis. App. 58A.

A 100% enhancement was authorized irrespective of whether

plaintiff ’s counsel is a not-for-profit legal services organiza-

tion whose raison d'etre is to bring suits without charging

a fee; a large law firm engaging in “‘pro bono” litigation; or

a sole practitioner or small firm willing to take a case on a

contingent-fee basis without any assurance of a risk enhance-

ment. See App. 58A; McKenzie v. Kennickell, supra, 875

F.2d at 331-32.

[Footnote continued from previous page]

clients who would pay our hourly rates on a monthly basis."’ Bland Aff

¢ 9. Plaintiffs’ counsel did not state, however, that he or his firm had

turned away fee-paying clients as a result of their representation of peti-

tioners. Even if he or his firm had done so, however, this certainly does

not prove that a risk enhancement was necessary to persuade them to

take the contingent-fee case.

In McKenzie, a panel of the D.C. Circuit relied on Justice

O’Connor’s opinion in Delaware Valley II to reject a

challenge by the United States to a 50% risk enhancement

in a Title VII action taken on a contingent-fee basis. The

court upheld the award even though counsel in McKenzie

were two not-for-profit legal services organizations and a

major District of Columbia law firm, which had made clear

that it would have represented the claimants “‘even if it

believed that no enhancement to the lodestar fee would be

available.’’ 875 F.2d at 338. In its opinion, the panel also

stated, based on ‘“‘more than 20"’ attorney affidavits (id. at

336), that a 100% risk enhancement appeared to be the rate

demanded by counsel in the relevant market, which it defined

as “‘all contingency claims in the District of Columbia, par-

ticularly other types of complex federal litigation . . ..” Jd.

at 334.

In King, also a Title VII action, a panel of the D.C. Cir-

cuit ordered a 100% enhancement based on McKenzie, and

on: (1) affidavits by a handful of Title VII attorneys stating

that they would not accept a case on a contingent-fee basis

unless they could be assured of a 100% enhancement if they

prevailed; and (2) an assumption that a 100% enhancement

is necessary to ensure that attorneys take cases for which

there is at least a 50% chance of prevailing. App. 56A-57A."°

The court ordered a 100% enhancement even though Ms.

King had no difficulty finding counsel, Robert A. Adler, to

represent her on a contingent-fee basis in March, 1983, when

risk enhancements were few in number and small in amount.

App. 4A, 50A. Indeed, Ms. King contacted Mr. Adler after

he had just won a case on behalf of one of her colleagues for

which he had received a risk enhancement of only 10%. App.

4A-5A. Furthermore, the panel awarded 100% even though,

‘© The affidavits are described in various places in the panel and en banc

décisions in King. See App. 6A-7A, 15A-16A, 39A-41A, 44A, 53A, 56A,

59A, 64A. They have been filed with this Court in support of the petition

for a writ of certiorari in King, end are also discussed in King Cert. Pet.

8-13.

before Delaware Valley IJ, Mr. Adler twice sought only a

35% risk enhancement, and the trial court had preliminarily

ruled that 15% would be proper should this Court authorize

risk enhancements in Delaware Valley II. App. 5A. The panel

ordered 100%, moreover, even though the trial court had

awarded 50% and also purported to follow Justice O’Con-

nor’s opinion in Delaware Valley II. See App. 5A-6A, 53A.

The risk enhancements granted in Dague, McKenzie, and

King illustrate the considerable evidentiary and legal dif-

ficulties facing courts in attempting to formulate sensible

rules to govern these issues. Thus, both the Second Circuit

and the D.C. Circuit relied on attorney affidavits to

demonstrate need although such evidence is insufficient as

a matter of law. Furthermore, these affidavits are con-

tradicted by the undeniable fact that attorneys take

contingent-fee cases pursuant to fee-shifting legislation, as

plaintiffs’ counsel did in Dague, McKenzie, and King,

without an assurance of receiving a premium for risk.

In addition, in interpreting Delaware Valley I], the courts

have come up with very different approaches. Insofar as en-

titlement to risk enhancement is concerned, the Second Cir-

cuit purported to adopt an ad hoc approach but did not ade-

quately explain why Dague differs from any other

contingent-fee case. The panels in McKenzie and King, in

turn, took an across-the-board approach purporting to be bas-

ed on an analysis of the market but which, in fact, ignored

variations in the market. The inadequacy of these attempts

to measure the market is demonstrated by the disparity bet-

ween the 25% enhancement granted in Dague, and the 100%

authorized by the panels in McKenzie and King, as well as

the disparity between the 100% enhancement authorized by

those panels and the 50% granted by the trial court in King,

a disparity that arose even though the trial court purported

to apply the test applied by the panels in McKenzie and King.

I1l. RULES GOVERNING AN AWARD OF FEES TO

COMPENSATE COUNSEL FOR RISK OF LOSS

ARE POLITICAL JUDGMENTS TO INTERVENE

IN THE MARKET WHICH SHOULD BE MADE BY

CONGRESS.

Dague and the now-abandoned approach of the D.C. Circuit

demonstrate that the propriety of any award of fees in order

to compensate counsel for risk of loss is a political judgment

to intervene in the market which should be made by Con-

gress. It is not a judgment that this Court, or any court, can

make.

As Judge Williams stated, in commenting on the 100%

risk enhancement adopted in McKenzie and King,

For when we look beneath the veneer of market

analysis, the allowance of a 100% enhancement is

clearly legislative — making the policy judgment

that it is suitable to allow use of enhanced contingent

fee-shifting for cases with a 50-50 chance of success

or better. I know of no basis on which a court would

be competent to set that level — or any other.

App. 65A."' Furthermore, Judge Williams also commented

on the fact that not until Delaware Valley I] was announced,

did Mr. Adler request a risk enhancement of 100%. Judge

Williams concluded: “‘ . . . I view causation as running in

the opposite direction from that supposed by the controll-

ing precedents; I see the judicial judgment as defining the

market, not vice versa."’ App. 64A. Accord App. 18A

The court did not, in fact, undertake to determine whether Ms. King’s

chance of prevailing was at least 50%. Had the court done so, the evidence

suggests that Ms. King may not have overcome that hurdle. Thus, as

the en banc court in King observed, only five of the numerous attorney

affidavits filed in the case addressed the issue of Ms. King’s ability to

secure counsel. Two of them “described the weakness and difficulty of

her case as the principal reason the affiants would have been unwilling

to assume representation,’ and one stated that his firm might have

represented her if she had had an “ ‘exceptionally strong claim.’ ” App.

15A n.4.

Judge Williams is correct Whether to grant a risk enhance.

ment, to whom, in what circumstances, and in what amount,

are judgments that,should be made by Congress. The fun-

damental policy decisions that must be made are how much

litigation under federal fee-shifting statutes should be encour-

aged, and how the costs of this litigation should be allocated.

These decisions necessarily rest not only on an understand-

ing of what are commonly regarded as legislative facts but

also on a balancing of competing interests not ordinarily

encompassed in the judicial function.

. Thus, for example, Congress may well consider the follow-

ing questions in fashioning a law governing risk enhance-

ment:

1. How many cases are successfully brought under federal

fee-shifting legislation? If plaintiffs prevail in fewer than 50%

of these cases, is it sound policy to provide an added incen-

tive to attorneys to bring what necessarily will be even riskier

cases than those already brought, or does public policy favor

a level of incentive to ensure that each and every meritorious

case is brought even though that level may result in 25

ee claims being brought for each successful

claim’?

2. Should a risk enhancement be granted to not-for-profit

legal organizations, which are in the business of bringing

cases without fees to their clients, which already are being

awarded lodestar fees at market rates, and which pay no in-

come taxes? Should a risk enhancement be granted to attor-

neys whose market rates exceed those of the median private

attorney in a market? Should a risk enhancement be given

to attorneys, such as those in McKenzie, who agree to bring

cases as part of a law-firm pro bono program without regard

to risk enhancement?

3. Should a risk enhancement be automatically available

to prevailing plaintiffs against government entities or should

such plaintiffs be entitled to such an award only if the govern-

ment’s position was not substantially justified?

APPENDIX A

4. How does one set an appropriate level of risk enhance- | Notice: This ,

ment? Do cases in which plaintiffs prevail take as much time eo Pehued Reamer o Ginn ne y cosstae tetive pubfiention in

on average as cases in which plaintiffs lose, even though Y a - Users are requested to

plaintiffs must usually go the “full route” to win but may

lose on a motion to dismiss or for summary judgment?

Should the same level of enhancement be granted to all

attorneys who are entitled to risk enhancement, and if not,

who should receive greater risk enhancement?

These policy judgments, and more, must necessarily be

made by this Court if it is to approve risk enhancements

under federal fee-shifting legislation. As the litigation follow-

ing Delaware I/ indicates, moreover, these judgments can-

not be made in the expectation that what is being done

reflects the market. Instead, any court-imposed risk enhance-

ment constitutes an intervention in the market that will yield

endless litigation.

CONCLUSION

This Court should reverse the judgment of the Second Cir-

cuit on the ground that risk enhancements are not permit-

ted under the typical fee-shifting statute.

Respectfully submitted,

Joun Payton,

Corporation Counsel

Cuarwes L. Reiscue,

Deputy Corporation Counsel

Appellate Division

Donna M. Murasky,

Assistant Corporation Counsel

Counsel of Record

Counsel for the District of Columbia

Room 305, District Building

1350 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

Telephone: (202) 727-6252

Gnited States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued En Banc February 27, 1991

- Decided December 13, 1991

No. 89-7027

Manet. A. Kina,

APPELLANT

Vv.

James F. Parmer, Director,

D.C. DepartTMent oF Corrections, et al.

No. 89-7028

Manet A. King

Vv.

James F. Patmer, Director,

D.C. DepartMent oF Corrections, et al.

APPELIANTS

Bills of costs must be filed within 14 days after en

try of judgment.

court looks with disfavor upon motions to file bills d eas out - Rng

Appeals from the United States District Court

for the District of Columbia

(Civil Action No. 83-1980)

Roger E. Warin, with whom Bryan T. Veis was on the

brief, for appellant in 89-7027 and appellee in 89-7028.

Robert M. Adler and Joel P. Bennett also entered appear-

ances for appellants.

Donna M. Murasky, Assistant Corporation Counsel,

with whom Herbert O. Reid, Sr., Corporation Counsel,

John Payton, Acting Corporation Counsel, and Charles L.

Reischel, Deputy Corporation Counsel, were on the brief,

for appellees in 89-7027 and appellants in 89-7028. Susan

S. McDonald, Assistant Corporation Counsel, also entered

an appearance for appellees in 89-7027 and appellants in

89-7028.

Michael J. Ryan, Assistant United States Attorney,

with whom Stuart M. Gerson, Assistant Attorney General,

Jay B. Stephens, United States Attorney, John Oliver

Birch and R. Craig Lawrence, Assistant United States

Attorneys, were on the brief, for amicus curiae the United

States of America in 89-7027 and 89-7028 urging reversal.

John J. Curtin, Jr., Rex E. Lee, Carter G. Phillips, and

Joseph R. Guerra were on the brief for amicus curiae The

American Bar Association in 89-7027 and 89-7028 urging

that the panel's decision be reinstated without modifica-

tion.

Daniel B. Edelman, Barry Goldstein, and Mari Mayeda

were on the brief for amici curiae Joel P. Bennett, et al.

in 89-7027 and 89-7028 urging that the panel's decision

be reinstated without modification.

Blair G. Brown, Brenda V. Smith, and Richard S. Selig-

man were on the brief for amicus curiae the District of

Columbia Bar in 89-7027 and 89-7028 urging that the

panel's decision be reinstated.

Charles Stephen Ralston for NAACP Legal Defense

Fund and Educational Fund; E. Richard Larson for Mexi-

can American Legal Defense and Educational Fund;

Joseph M. Sellers for Washington Lawyers’ Committee for

Civil Rights under Law; Gregory O’Duden, Elaine Kaplan,

and Timothy Hannapel for Nationa! Treasury Employees

Union; and Paul M. Smith for Washington Council of

Lawyers, were on the joint brief for amici curiae in 89-

7027 and 89-7028 urging that the panel's opinion be rein-

stated.

Daniel J. Popeo entered an appearance for amicus

curiae The Washington Legal Foundation and the Allied

Educational Foundation in 89-7027 and 89-7028 urging

reversal.

Before: Mikxva, Chief Judge, Wain, Enwarvs, Rutu B.

Ginspurc, SILBERMAN, Buckiey, Wiiiams, D.H. Ginspura,

SenTeELLE, THomas,* Henperson, and Ranpoupu, Circuit

Judges.

Opinion for the Court filed by St_nerman, Circuit Judge,

in which Buckiey, Wisiams, D.H. Ginspurc, SenTen.e,

Henperson, and Ranpoiru, Circuit Judges, concur.

Dissenting opinion filed by Epwarps, Circuit Judge,

with whom Mikva, Chief Judge, Wain and Rum B.

Ginspurc, Circuit Judges, join.

Su.BerRMAN, Circuit Judge, in which Buckiey, Wu..iams,

D.H. Ginssurc, Sentence, Henperson, and Ranpo.pn,

Circuit Judges, concur: This case concerns the circum-

stances in which a court making an award of reasonable

attorney's fees under federal fee-shifting statutes may

augment the lodestar with a contingency enhancement

designed to compensate the prevailing party's attorney for

the risk of losing the case. The panel opinion in this case,

King v. Palmer, 906 F.2d 762 (D.C. Cir. 1990), reviewed

a district court award of attorney's fees and costs made

to the plaintiff, Mabel King, pursuant to the fee-shifting

*Shortly after oral argument, Judge (now Justice) Thomas

recused himself and has aot participated in this decision.

provisions of Title VII. See 42 U.S.C. §§ 2000e-5( k), 2000e-

16(d).' The panel rejected the District of Columbia's con-

tention that no enhancement for the risk of nonpayment

was proper but set aside the district court’s award of an

enhancement of 50% of attorney's fees subject to contin-

gency, holding instead that Ms. King was entitled to a full

100% enhancement of those fees, relying on this court's

decision in McKenzie v. Kennickell, 875 F.2d 330 (D.C.

Cir. 1989). On September 12, 1990, we granted the Dis-

trict of Columbia’s petition suggesting rehearing en banc

to reconsider the holding on contingency enhancements in

McKenzie. Having reviewed the issue en banc, we overrule

McKenzie and reverse the award of a_ contingency

enhancement to Ms. King.

Mabel King brought a gender discrimination claim

against her employer, the District of Columbia, and ulti-

mately received an award of back pay and retroactive pro-

motion. See King v. Palmer, 778 F.2d 878, 882 n.7 (D.C.

Cir. 1985), on remand, Civ. No. 83-1980, Mem. at 1-5

(D.D.C. June 11, 1986). The history of the substantive liti-

gation underlying the dispute over attorney's fees is sum-

marized in the panel opinion. See King, 906 F.2d at 764.

Ms. King experienced no difficulty in securing an attor-

ney. She was represented throughout the litigation by the

first attorney she contacted, Robert Adler, who took the

case on a partial contingency basis. Ms. King contacted

Mr. Adler as a result of his successful representation of

142 U.S.C. § 2000e-5(k) provides in pertinent part:

In any action or proceeding under this subchapter the

court, in its discretion, may allow the prevailing party ... a

reasonable attorney's fee as part of the costs... .

Section 2000e-16(d) extends the provisions of § 2000e-5(k) to

actions by employees the District of Columbia. Congress has

made clear that it intends the courts to resolve the policy ques-

tions inherent in determining what is “reasonable.” See H.R. Rep.

No. 1558, 94th Cong., 2d Sess. 8 (1976).

a colleague of hers in another Title VII case, for which he

had received a 10% contingency enhancement. Ms. King

and Mr. Adler agreed that she would be responsible for

litigation costs and expenses, as well as for fees of up to

$5000, and that she would receive any award of damages,

while Mr. Adler would receive any statutory attorney's

fees that might be awarded, should Ms. King prevail. See

id.

Mr. Adler averred that he took the case expecting that

a contingency enhancement would be available. In his

applications for attorney's fees following Ms. King’s suc-

cess on the merits, Mr. Adler twice requested a 35% fee

bonus to compensate him for the risk of nonpayment he

had borne during the litigation, but the district court held

this request in abeyance pending the Supreme Court's

decision concerning the availability of contingency

enhancements in Pennsylvania v. Delaware Valley Citi-

zens’ Council for Clean Air, 483 U.S. 711 (1987) (Delaware

Valley II). In the interim, the district court awarded a

lodestar fee totaling $232,707.62, which comprised the

reasonable number of hours Mr. Adler spent on the case

multiplied by a reasonable hourly rate, and noted that a

“15 (percent) bonus for the risk of not prevailing would

... be appropriate in the event that such an award is

authorized by the Supreme Court.” King v. Palmer, Civ.

No. 83-1980, Rev. Mem. at 13 (D.D.C. June 10, 1987)

(Mem. Op. 1).

After the Court issued its fragmented decision in

Delaware Valley II, Mr. Adler reapplied for a contingency

enhancement, increasing his request to 100%. Reading

Justice O'Connor's concurrence in Delaware Valley II as

controlling the availability and degree of contingency

enhancement, the district court held that the plaintiff

must establish how the market compensates for contin-

gent cases on a class-wide basis and then show that with-

out such enhancement she would have had substantial

difficulty attracting competent counsel to her case. See

King v. Palmer, Civ. No. 83-1980-LFO, Mem. at 2 (D.D.C.

Sept. 20, 1988) (Mem. Op. 11). In the district court's view,

Ms. King met these requirements by introducing affida-

vits from a number of local attorneys experienced in Title

VII work asserting that they would not accept fee-shifting

cases where fees were available only if the case was won,

absent the prospect of contingency enhancements. See id.

at 3. Since Ms. King had agreed to pay all costs and

expenses and the first $5000 of fees, however, the district

court found that Mr. Adler’s representation of her was

only partially contingent and awarded a 50% enhance-

ment instead of the 100% requested, on the authority of

an earlier district court opinion in Palmer v. Schultz, 679

F. Supp. 68 (D.D.C. 1988), appeal dismissed, No. 88-5108

(D.C. Cir. 1988). See Mem. Op. li at 3-4. Both parties

appealed.

The panel, following our previous opinion in McKenzie

v. Kennickell, 875 F.2d 330 (D.C. Cir. 1989), affirmed the

district court’s award of a contingency enhancement but

increased it from 50% of the lodestar to 100%. McKenzie

established a regime in which contingency enhancements

would be routinely available in statutory fee-shifting

cases. In reaching this result, the McKenzie panel treated

Justice O’Connor’s concurring opinion in Delaware Valley

II as controlling and explicitly applied her admonition

that “no enhancement for risk is appropriate unless the

applicant can establish that without an adjustment for

risk the prevailing party ‘would have faced substantial

difficulties in finding counsel in the local or other relevant

market.’” Delaware Valley II, 483 U.S. at 733 (O’Connor,

J., concurring in part and concurring in the judgment)

(quoting plurality opinion at 731). The McKenzie majority

described the inquiry to be conducted under this test as

“counterfactual,” meaning that plaintiffs “need not show

that (they) actually experienced difficulty in obtaining

representation,” but merely that, “absent a contingency

enhancement, plaintiffs would have encountered substan-

tial difficulties in finding counsel ... [at the time) they

commenced their lawsuit.” McKenzie, 875 F.2d at 337

(first emphasis added, second in original). Thus, the

majority concluded that a prevailing plaintiff under the

typical fee shifting-statute could gain a contingency

enhancement by producing affidavits from lawyers in the

District of Columbia stating that those lawyers would not

normally take a case on contingency unless they were

paid more than their normal hourly fees if they won.

Indeed, according to the majority, it was entirely irrele-

vant whether counsel in the case had been “attracted by

the possibility of a contingency enhancement”; the panel

dismissed as beside the point the fact that one of the law-

yers who took the case, the head of the pro bono section

of a major Washington law firm, candidly stated that his

firm would have taken the case even without the prospect

of a contingency enhancement. /d. at 338. The majority

reasoned that were it to deny a contingency enhancement

on an “actual difficulty” basis, it would simply encourage

a “charade” in which “public interest lawyers would accept

a case only after announcing loudly that they were doing

so on the assumption of a contingency enhancement.” /d.

at 337-38. In short, under the McKenzie holding, even a

plaintiff who easily found counsel and whose counsel pre-

sumably expected no contingency bonus could satisfy the

“substantial difficulties” test.

Judge Buckley, dissenting on this issue, thought the

McKenzie majority misread Delaware Valley II. He

pointed out that “Justice O'Connor joined the plurality in

requiring proof that the prevailing party ‘would have faced

substantial difficulties’ in obtaining competent counsel .. .

absent an upward fee adjustment for contingency risks.”

Id. at 340-41 (Buckley, J., concurring in part and dissent-

ing in part) (quoting Delaware Valley II, 483 U.S. at 733)

(emphasis in original). That meant, according to Judge

Buckley, that we were required to pursue an

“individualized approach” in which evidence of actual

difficulties would be extremely important. Jd. at 341.

Because the record establishes that McKenzie and

his fellow plaintiffs had in fact located qualified law-

yers willing to represent them in Washington, D.C.

in the early 1970's, I conclude that under Delaware

Valley II these fee applicants have failed to prove that

lca iil iii

the prevailing party “would have faced substantial

difficulties” in securing competent attorneys absent

the incentive of an enhanced fee.

Id. (emphasis added).

In accordance with McKenzie, the panel in this case

thought the failure of the district court to makea specific

finding that Ms. King would have faced substantial diffi-

culties in obtaining counsel without a risk enhancement

was of no real significance. See King, 906 F.2d at 768. The

district court had instead relied on Ms. King’s attorney

affidavits and on a case in which a different district judge

had made a blanket finding “that attorneys in the District

would not accept contingent cases without some risk

enhancement.” Jd. (citing Mem. Op. Il at 2, 4 (citing

Palmer v. Schultz, 679 F. Supp. 68 (D.D.C. 1988), appeal

dismissed, No. 88-5108 (D.C. Cir. 1988})). The panel held

that the cross-citation to the other district judge’s finding

in conjunction with the affidavits filed in the case was suf-

ficient to satisfy McKenzie’s reading of Justice O’Connor’s

opinion.

We decided to rehear the case en banc in order to recon-

sider the interpretation of Delaware Valley II that the

panel in McKenzie adopted. It is our view that the

approach followed by the majority in McKenzie is, as

Judge Buckley argued, a misreading of Justice O’Connor’s

concurring opinion. Moreover, we do not think that Jus-

tice O'Connor's concurring opinion in Delaware Valley Il

controls the issue of the circumstances under which con-

tingency enhancements are permitted. We conclude that

the fragmented decision in Delaware Valley II provides no

test for determining the availability, much less the calcu-

lation, of contingency enhancements under fee-shifting

statutes and that we are therefore obliged to continue the

search for the most sensible rule to govern contingency

enhancements. The rule we adopt is that of the Delaware

Valley Il plurality: a reasonable lodestar fee awarded

under federal fee-shifting statutes may not be enhanced

to compensate a prevailing party for his initial risk of

loss.

Delaware Valley II has given rise to a spate of circuit

court opinions that attempt—with varying degrees of

confidence—to interpret the Supreme Court's position.

See, e.g., Rode v. Dellarciprete, 892 F.2d 1177, 1184-85 (3d

Cir. 1990); Student Pub. Interest Research Group v. AT &

T Bell Laboratories, 842 F.2d 1436, 1451 (3d Cir. 1988);

Blum v. Witco Chem. Corp., 829 F.2d 367, 379-82 (3d Cir.

1987); Craig v. Secretary, Dep't of Health and Human

Servs., (864 F.2d 324, 327-28 (4th Cir. 1989): Spell v.

McDaniel, 824 F.2d 1380, 1403-05 (4th Cir. 1987), cert.

denied, 484 U.S. 1027 (1988): Leroy v. City of Houston

831 F.2d 576, 583-84 (5th Cir. 1987), cert. denied 486

U.S. 1008 (1988); Skelton v. General Motors Corp. 860

F.2d 250, 254 (7th Cir. 1988); Hendrickson v. Branstad

934 F.2d 158, 162-63 (8th Cir. 1991); D’Emanuele v. Mont.

gomery Ward & Co., 904 F.2d 1379, 1384 (9th Cir. 1990):

Fadhl v. City of San Francisco, 859 F.2d 649, 650-51 (9th

Cir. 1988) (per curiam); Smith v. Freeman, 921 F.2d 1120

1122-23 (10th Cir. 1990); Wulf v. City of Wichita, 883 F.2d

842, 876 (10th Cir. 1989); Norman v. Housing Auth., 836

F.2d 1292, 1302 (11th Cir. 1988). We, like our sister

courts of appeal, have struggled to take from the case a

rule of law that defines the circumstances in which contin-

gency enhancements may be awarded to the lawyers who

represent prevailing plaintiffs under the myriad of federal

fee-shifting statutes. See McKenzie v. Kennickell, 875 F.2d

330, 332-38 (D.C. Cir. 1989); id. at 340-43 (Buckley, J.,

dissenting); Weisberg v. U.S. Dep't of Justice, 848 F.2d

1265, 1272-73 (D.C. Cir. 1988); Thompson v. Kennickell

836 F.2d 616, 621 (D.C. Cir. 1988); Save Our Cumberland

Mountains, Inc. v. Hodel, 826 F.2d 43, 53 n.6 (D.C. Cir.

1987), vacated on other grounds, 857 F.2d 1516 (D.C. Ci

1988) (en banc). —

The Supreme Court's decisions on attorney's fees prior

to Delaware Valley II had established the lodestar—a

10A

measure of fees defined by the number of hours reason-

ably expended on a case multiplied by a reasonable mar-

ket rate per hour—-as the presumptively reasonabie

award, steadily subsuming most other factors into that

single calculation. See Hensley v. Eckerhart, 461 U.S. 424,

433 (1983); Blum v. Stenson, 465 U.S. 886, 897-902

(1984); Pennsylvania v. Delaware Valley Citizens’ Council

for Clean Air, 478 U.S. 546, 564-66 (1986) (Delaware Val-

ley I). Twice, however, the Supreme Court had specifically

reserved the question whether the lodestar could ever be

enhanced to reflect the risk of nonpayment assumed by

an attorney accepting a case under a statute that autho-

rized fees only to the prevailing party. See Blum, 465 U.S.

at 901 n.17; Delaware Valley I, 478 U.S. at 568. Delaware

Valley II attempted to resolve this issue.’

The judgment in Delaware Valley II reversed an award

of a 100% contingency enhancement.’ Justice White, writ-

ing for a plurality of four Justices, concluded in Part IV

of his opinion that contingency enhancements under fee-

shifting statutes are simply “impermissible.” Delaware

Valley II, 483 U.S. at 727 (plurality opinion). Neverthe-

less, the plurality went on in Part V to suggest that if con-

tingency bonuses were to be made available at all, they

*We do not understand how, as the dissent suggests, the dis-

crete question presented in this case—whether a contingency

enhancement is properly included within an award of attorney's

fees—can possibly be thought a matter for the discretion of the

trial judge. If the overall reasonableness of a statutory attorney's

fee award were always a matter for the trial judge’s discretion,

unguided by a legal structure, the Supreme Court certainly has

wasted a good deal of time and effort attempting to develop uni-

form rules. See Blanchard v. Bergeron, 489 U.S. 87 (1989);

Delaware Valley Il, 483 U.S. 711 (1987); Delaware Valley I, 478

U.S. 546 (1986); Blum, 465 U.S. 886 (1984); Hensley, 461 U.S. 424

(1983).

*Delaware Valley II interpreted the fee-shifting provision of the

Clean Air Act, suse § 7604(d). However, the Court has said

that its standards for determining “reasonable” fees apply to all

federal statutes awarding “reasonable” attorney's fees to a

“prevailing party,” including Title VII See Hensley, 461 US. at

433 n.7.

11A

“should be reserved for exceptional cases.” Jd. at 728. Four

Justices in dissent would have allowed a contingency

enhancement in any case in which “an attorney and client

have been unable to mitigate the risk of nonpayment,” id.

at 749 (Blackmun, J., dissenting), as well as “additional

enhancement” in those cases posing great “ ‘legal’ risks.”

Id. at 751. Under the dissent’s test, contingency enhance-

ments would be “appropriate in most circumstances.” /d.

at 3741.

Justice O'Connor concurred in part and concurred in

the judgment reversing the award. She agreed with the

dissenters that “Congress did not intend to foreclose con-

sideration of contingency in setting a reasonable fee.” Id.

at 731 (O'Connor, J., concurring in part and concurring

in the judgment). But she joined in the plurality’s judg-

ment that the record before the Court did not justify a

contingency enhancement. See id. at 734. She also agreed

with the plurality that no enhancement could be awarded

for the “legal” risks peculiar to the specific case. See id.

at 731, 734. Finally, Justice O'Connor agreed with the

statement in Part V of the plurality opinion “that no

enhancement for risk is appropriate unless the applicant

can establish that without an adjustment for risk the pre-

vailing party ‘would have faced substantial difficulties in

finding counsel in the local or other relevant market.’ ” Id.

at 733 (quoting plurality opinion at 731).

In our prior opinions interpreting Delaware Valley II,

we, like other circuit courts, have assumed that Justice

O’Connor’s concurrence controls. See McKenzie v. Kennick-

ell, 875 F.2d 330, 332-38 (D.C. Cir. 1989): id. at 340-43

(Buckley, J., dissenting); Weisberg v. U.S. Dep't of Justice,

848 F.2d 1265, 1272-73 (D.C. Cir. 1988): Thompson v.

Kennickell, 836 F.2d 616, 621 (D.C. Cir. 1988); Save Our

Cumberland Mountains, Inc. v. Hodel, 826 F.2d 43, 53 n.6

(D.C. Cir. 1987), vacated on other grounds, 857 F.2d 1516

(D.C. Cir. 1988) (en banc). But we have not focused on the

ey eT ee

12A

fact that there are two analytically distinct questions

involved in awarding a contingency enhancement. First,

a court must decide whether an enhancement is available

at all. Then, assuming an enhancement is warranted, the

court must calculate its amount. Virtually all of Justice

O’Connor’s relatively brief opinion deals with the second

question. But the question of availability of enhancements

logically precedes the question of their calculation.

To ascertain when contingency enhancements should be

made available under Delaware Valley II, we have looked

for some common ground between Justice O’Connor’s con-

currence and the plurality opinion. We have had little dif-

ficulty placing a label on that common ground, since

Justice O’Connor expressly joined the plurality’s state-

ment in Part V that enhancements should be available

only when a plaintiff would have faced “substantial

difficulties” in attracting counsel to his case without the

prospect of an enhancement. However, we and the other

courts of appeals have had considerable trouble determin-

ing the content of that “substantial difficulties” label—that

is, determining just how “substantial” the “difficulties” in

attracting counsel have to be, and how they must be

proven.

In this search for content, several of our sister circuits

have read Justice O’Connor’s concurrence as implicitly

agreeing with the plurality’s statement, Delaware Valley

Il, 483 U.S. at 727 (plurality opinion), that contingency

bonuses should be available only in “exceptional cases.”

See, e.g., Student Pub. Interest Research Group v. AT &

T Bell Laboratories, 842 ¥.2d 1436, 1451-52 (3d Cir. 1988)

(“(Cjontingency multipliers should be granted only

rarely.”); Norman v. Housing Auth., 836 F.2d 1292, 1302

(11th Cir. 1988) (“{I]n the rare case enhancement may be

appropriate ....”). Appellant presses this position upon us

here. And in Thompson v. Kennickell, we made a similar

suggestion, describing Delaware Valley II in Gilbert and

Sullivan terms: “What, never? No, never!” for the plural-

ity, and “What, never? Hardly ever!” for Justice O'Connor.

Thompson, 836 F.2d at 621 (emphasis in original).

13A

To be sure, Justice O'Connor does not say at any point

that she disagrees with the plurality’s “exceptional cases”

position. And she does endorse the plurality’s view that

the lodestar is a presumptively adequate fee. See Dela-

ware Valley II, 483 U.S. at 733-34 (O'Connor, J., concur-

ring in part and concurring in the judgment). Moreover,

Justice O'Connor joited the reversal of the award of a

contingency enhancement without a remand, notwith-

standing the dissenters’ powerful argument that the

applicant should be given an opportunity to develop the

record to meet the Supreme Court's standard. See id. at

754-55 (Blackmun, J., dissenting); cf. Thompson, 836 F.2d

at 621 (remanding for application of Delaware Valley 11).

This at least suggests that Justice O'Connor believed that

contingency enhancements should be available only in

those presumably rare situations in which the need was

readil ily apparent. Still, she did not join Part V of the plu-

rality opinion, so we cannot be sure that she accepted the

“exceptional cases” limitation.

There is only one point concerning the availability of

contingency enhancements that a fair reading of Justice

O'Connor's concurrence clearly supports. This point is

that evidence of actual difficulties is highly probative of

the “substantial difficulties” Delaware Valley II describes.

In adopting the plurality’s “substantial difficulties” test,

Justice O'Connor quotes from Part V of the plurality opin-

ion. The oe oe concludes with a footnote that

we presume Justice nor adopted along with the tex-

tual language she cited. The footnote states: “‘an attor-

ney’s fee award should be only as large as necessary to

attract competent counsel, and ‘one relevant factor bear-

ing on high-risk is whether other counsel had declined to

take the case because there was little or no prospect of

earning a fee.” Id. at 731 n.12 (plurality opinion) (quoting

Lewis v. Coughlin, 801 F.2d 570, 576 (2d Cir. 1986))

(emphasis added). And, as Judge Buckley noted in

McKenzie, “Justice O'Connor joined the plurality in

requiring proof that the prevailing party ‘would have faced

substantial difficulties’ obtaining competent counsel ‘in

es ee

14A

the relevant market, absent an upward fee adjustment

for contingency risks.” McKenzie, 875 F.2d at 340-41

(Buckley, J., concurring in part and dissenting in part)

(quoting Delaware Valley Il, 483 U.S. at 733 (O'Connor,

J., concurring in part and concurring in the judgment))

(emphasis in original). We thus believe that five Justices

- envisioned a particularized factual inquiry into the plain-

tiffs actual difficulties in retaining counsel—the kind of

inquiry that Judge Buckley thought necessary but the

majority in McKenzie eschewed. But see Morris v. Ameri-

can Natl Can Corp., Nos. 90-1235, 90-2289, 1991 WL

15315, *5 (8th Cir. Aug. 14, 1991) (stating no actual diffi-

culties need be shown) (citing McKenzie, 875 F.2d at 337).

This is, we recognize, a hard standard to meet. Indeed,

if evidence that other counsel actually refused the case is

only “one relevant factor” in determining whether the

plaintiff would have had “substantial difficulties” in

obtaining counsel without a risk enhancement—a factor

insufficient by itself to justify awarding an enhancement

—the plaintiffs burden in producing sufficient evidence to

meet the test must be quite daunting. And it also follows

that a plaintiffs failure to put on any evidence of actual

difficulties in attracting counsel without extra compensa-

tion would severely undermine a claim for a contingency

enhancement.

The district court here made no finding that Ms. King

would have faced substantial difficulties in attracting

counsel without a contingency bonus. Nor was there any

evidence that Ms. King faced actual difficulties in secur-

ing representation. As it happened, Robert Adler was the

first attorney the plaintiff contacted, and, although he

later stated that he weuld not have accepted representa-

tion without the “definite possibility” of a coningency

enhancement, his fee award in a previous case had been

enhanced by only 10%. Given the uncertain state of the

law at the time he took this case (which is not to say that

it is particularly clear today) and his previous experience,

the “definite possibility” to which he referred does not

seem very weighty. In his engagement letter to Ms. King,

15A

Mr. Adler referred only to charging his “hourly rates” and

stated that he would “seek an award of attorneys’ fees

from the defendants with respect to those amounts, should

we be the prevailing party.” Joint Appendix (J.A.) at 73a

(emphasis added). It does not seem to us that Mr. Adler's

testimony goes very far to meet the plaintiffs burden

under the “substantial difficulties” test.

Before the district court and again before us, Ms. King

has also sought to rely on the affidavits of attorneys who

were not approached by Ms. King and were never involved

in the case.‘ These affidavits—some from Title VII practi-

tioners, some from practitioners from other areas—

contend that lawyers would not take cases on a non-fee-

paying basis without contingency enhancements. We do

not think that we can accept such evidence as meeting the

substantial difficulties test. Without in any way denigrat-

ing the bona fides of these lawyers, we cannot blink the

fact that they are obviously self-interested. We think it is

indisputable that if such evidence were treated as deter-

minative, or even weighty, the substantial difficulties test

would be met so easily as to become a mere formality. The

Supreme Court has itself recently disparaged such anec-

dotal evidence from attorneys unconnected with the case

in the context of attorney's fees disputes. See United

States Dep't of Labor v. Triplett, 110 S. Ct. 1428, 1433-34

would not take Ms. King’s case because of the unavailability of

contingency enhancements. See J.A. at 177 (Gottfried)

VE ——

16A

(1990) (holding such evidence to be “blatantly insufficient”

to raise a constitutional doubt about federal limits on

attorney's fees, “even if entirely unrebutted”).

Nor do we believe the few affidavits presented that

expressed a view as to whether the affiant lawyer would

or would not have taken Ms. King’s case add much to her

claim for an enhancement. Insofar as they seek to hypoth-

esize whether the affiants would have taken her case,

they focus (inevitably it seems to us) on the strength or

weakness of her claim. See supra note 3. But in Delaware

Valley II, it will be recalled, both the plurality and Justice

O'Connor regarded that factor as inappropriate. See Dela-

ware Valley Il, 483 U.S. at 726 (plurality opinion); id. at

734 (O'Connor, J., concurring in part and concurring in

the judgment).

In sum, even if we were to apply Justice O'Connor's

concurrence as the holding of Delaware Valley II, we think

Ms. King’s evidence does not paint a picture of a situation

where a contingency enhancement is necessary to “mak(e})

it possible for poor clients with good claims to secure com-

petent help.” Jd. at 730-31.

Although we have determined that Ms. King failed to

carry her burden under Justice O’Connor’s opinion in

Delaware Valley Il, candor obliges us to concede that we

are unable to set forth a conceptual framework that would

govern further litigation on the subject of contingency

enhancements. We have certainly suggested, in accor-

dance with our understanding of the substantial difficul-

ties test, that actual evidence that attorneys did refuse a

case is of greater probative value than the hypothetical

testimony of non-involved and self-interested lawyers. But

we are sorely troubled by, and indeed we have no answer

to, the McKenzie majority's argument that focusing on

actual difficulties will encourage “a charade in which cli-

ents seeking representation under fee shifting statutes

would be steered to several attorneys whose pre-arranged

17A

role it would be to ‘refuse’ the case, knowing that such

refusals were necessary to permit the eventual award of

fees.” pee 875 F.2d at 337. We think the McKenzie

majority was also correct in suggesting that em izi

the actual difficulties a plaintiff had x » te mom

will create perverse incentives by discouraging those very

reference services ... that make it easier for litigants to

find legal representation.” /d.

To add to our quandary, even if we did have evidence

that several lawyers had declined Ms. King’s case, we

think it would be impossible to separate out from their

decision not to represent her the strength or weakness of

her claim as it appeared to them at the time. After all,

this is surely the principal reason a lawyer will turn down

a case under a fee-shifting statute. Delaware Valley II,

however, tells us unequivocally that the risk of loss in a

particular case is not a factor that courts may look at in

determining whether a contingency enhancement is

appropriate. “[A] court should not award any enhance-

ment based on ‘legal’ risks or risks peculiar to the case.”

Delaware Valley II, 483 U.S. at 734 (O'Connor, J., concur-

ring in part and concurring in the judgment): see also id.

at 726-27 (plurality opinion).’ If the courts cannot do so

directly, how can it be appropriate to do so vicariously

through the eyes of lawyers who declined the case?

The more we struggle with this problem, the more we

are convinced that it is virtually impossible to determine

whether a given plaintiff would have had “substantial

difficulties” in obtaining counsel without a contingency

enhancement. The inquiry is quite artificial, because, by

definition, the plaintiff stands before the cou:t with coun-

plaintiff's lawyer in each case. As the plurality in Delaware Valley

Il noted, that approach would provide incentives to bring the

weakest cases to court, and it would put the district judge who

ture. See Delaware Valley Il, 483 U.S. at 722: id. at 725 (plurality

18A

sel. And since counsel could not possibly know whether

a risk enhancement was in the offing until a court decides

the question years later, our inquiry is circular. As Judge

Williams noted in his concurrence in the panel opinion in

this case, whether a plaintiff would have faced substantial

difficulties absent the possibility of a contingency

enhancement is essentially unknowable when the most

critical assumption necessary to make such a counterfac-

tual judgment is itself the issue before the court. See

King, 906 F.2d at 770 (Williams, J., concurring) (“I view

causation as running in the opposite direction from that

supposed by the controlling precedents; I see the Judicial

judgment as defining the market, not vice versa.”).

As J Buckley correctly observed in McKenzie, if

Justice gy ey opinion controls the hoiding of

Delaware Valley Il, we would be obliged to apply the

“substantial difficulties” test, notwithstanding these ana-

lytical difficulties, “like it or not.” McKenzie, 875 F.2d at

342 (Buckley, J., concurring in part and dissenting in

part). But the difficulties we have described have

prompted us to think harder about what the controlling

principles of Delaware Valley !1 really are; specifically, we

have reconsidered whether we have been correct in

assuming that Justice O’Connor’s concurring opinion gov-

erns the subject of ‘contingency enhancements. We have

regarded her concurrence as controlling largely in reliance

on the Supreme Court's admonition in Marks v. United

States, 430 U.S. 188 (1977), that when the Court issues

fragmented opinions, the opinion of the Justices concur-

ring in the judgment on the “ ‘narrowest grounds should

be regarded as the Court's holding. /d. at 193 (quoting

Gregg v. Georgia, 428 U.S. 153, 169 n.15 (1976) (opinion

of Stewart, Powell, and Stevens, JJ.)). But Marks is

workable—one opinion can be meaningfully regarded as

“narrower” than another—only when one opinion is a logi-

cal subset of other, broader opinions. In essence, the nar-

rowest opinion must represent a common denominator of

the Court's reasoning; it must embody a position implic-

itly approved by at least five Justices who support the

judgment.

19A

In Gregg v. Georgia, 428 U.S. 153 ( 1976), for example,

the Court interpreted its earlier nine-way split in Furman

v. Georgia, 408 U.S. 238 (1972) (per curiam). In Furman,

the five Justices who supported the judgment that Geor-

gia’s death penalty statute was unconstitutional produced

five separate opinions. Two Justices concluded that the

death penalty was unconstitutional in all circumstances.

See id. at 305-06 (Brennan, J., concurring); id. at 370-71

(Marshall, J., concurring). Three others found specific

defects in the Georgia statute but declined to decide

whether capital punishment might be constitutional

under other circumstances. Of these, Justices Stewart and

White felt that the Georgia death penalty was unconstitu-

tional because it was applied in an arbitrary and capri-

cious manner, see id. at 309-10 (Stewart, J., concurring);

id. at 313 (White, J., concurring), while Justice Douglas

stated that it was unconstitutional because it was

“pregnant with discrimination,” falling more harshly on

minorities and the poor both because its application was

discretionary rather than mandatory and because wealthy

defendants could afford better counsel. See id at 255-57

(Douglas, J., concurring).

In Gregg, the Court—in another fragmented opinion—

treated the opinions of Justices Stewart and White as con-

trolling. See Gregg, 428 U.S. at 169 n.15 (plurality opin-

ion). Justices Marshall and Brennan, who believed the

death penalty unconstitutional in all circumstances,

surely agreed with Justices Stewart and White that it was

unconstitutional when administered in an arbitrary and

capricious manner. By the same token, Justice Douglas,

who insisted that any discretion in the judge or jury to

decide when to impose capital punishment rendered the

arrangement unconstitutional, would certainly have sub-

scribed to Justice Stewart's notion that the death penalty

could not be administered constitutionally to “a capri-

ciously selected random handful” of criminals. Furman,

408 U.S. at 309-10 (Stewart, J.. concurring). Selecting the

opinions of Justices Stewart and White as the holding of

Furman in Gregg was thus unproblematic.

20A

Similarly, in Marks itself, the Court adopted as the gov-

erning definition of obscenity the position of the plurality

from the earlier case of A Book Named “John Cleland’s

Memoirs of a Woman of Pleasure” v. Attorney General of

Massachusetts, 383 U.S. 413 (1966) (Fanny Hill). In

Fanny Hill, three separate views supported the judgment

that the book was not obscene: the view expressed in the

plurality opinion, which said that a book had to be

“utterly without redeeming social value” to be considered

obscene, see id. at 419 (opinion of Brennan and Fortas,

JJ., and Warren, C.J.) (emphasis omitted); the view of

Justice Stewart that only “hardcore” pornography could be

banned as obscene, see id. at 421 (opinion of Stewart, J.):

and the view of Justices Black and Douglas, who believed

that obscenity could never be banned. See id. at 421 (opin-

ion of Black, J.); id. at 433 (opinion of Douglas, J.).

Because Justices Black and Douglas had to agree, as a

logical consequence of their own position, with the plurali-

ty’s view that anything with redeeming social value is not

obscene, the plurality of three in effect spoke for five Jus-

tices: Marks’ “narrowest grounds” approach yielded a logi-

cal result.®

When, however, one opinion supporting the judgment

does not fit entirely within a broader circle drawn by the

others, Marks is problematic. If applied in situations

where the various opinions supporting the judgment are

mutually exclusive, Marks will turn a single opinion that

lacks majority support into national law. When eight of

nine Justices do not subscribe to a given approach to a

legal question, it surely cannot be proper to endow that

approach with controlling force, no matter how persuasive

it may be.

The Court itself appears not to apply Marks in cases

of this type. To take one example, in Coolidge v. New

“Justice Stewart’s “hardcore” test, though it was also a logical

subset of Justice Black and Dougias’ opinion, would only have

spoken for three Justices and could therefore not have been the

controlling rationale.

21A

Hampshire, 403 U.S. 443 (1971), a plurality of four Jus-

tices held that only when evidence was discovered

“inadvertently” could it be seized pursuant to the plain

view exception to the Fourth Amendment’s warrant

requirement. See id. at 469 (plurality opinion). Four other

Justices believed that inadvertence was not necessary for

a valid seizure of evidence in plain view. See id. at 492

(Burger, C.J., concurring in part and dissenting in part);

id. at 506 (Black, J., concurring in part and dissenting in

part); id. at 510 (Blackmun, J., concurring in part and dis-

senting in part); id. at 516 (White, J., concurring in part

and dissenting in part). Justice Harlan concurred in the

judgment that the search in question was unconstitu-

tional but provided no reasoning by which one could dis-

cern his position on the inadvertence requirement. See id.

at 490 (Harlan, J., concurring in the judgment). The Court

subsequently stated that the inadvertence requirement

was “not a binding precedent” and was merely “the con-

sidered opinion of four Members of this Court” that should

be “the point of reference for further discussion of the

issue.” Texas v. Brown, 460 U.S. 730, 737 (1983) (plurality

opinion). The Court eventually disavowed the inadver-

tence requirement entirely. See Horton v. California, 110

S. Ct. 2301, 2308-10 (1990).

It seems to us that Delaware Valley II is one of the frag-

mented opinion cases that cannot be resolved satisfacto-

rily by Marks. Unlike Furman or Fanny Hill, Delaware

Valley II is not a case in which the concurrence posits a

narrow test to which the plurality must necessarily agree

as a logical consequence of its own, broader position. In

other words, it is not a case in which there is an implicit

majority of the Court. Rather, Delaware Valley II involves

three distinct approaches to the issue of contingency

enhancements in fee-shifting statutes, none of which

enjoys the support of five Justices.

Superficially, to be sure, there is a common link

between the plurality opinion and Justice O'Connor's con-

currence; both Part V of the plurality opinion and Justice

O'Connor seem to endorse the substantial difficulties test

22A

we sought to apply earlier in this opinion. But the plural-

ity quite clearly indicated in Part IV that it did not

believe that contingency enhancements were ever avail-

able. See Delaware Valley II, 483 U.S. at 727 (plurality

opinion). Therefore, Part V appears to have been com-

posed not as an alternative holding but rather as°a fall-

back position, an invitation, as it were, to Justice

O’Connor to reach common ground. Since Justice

O'Connor did not accept the plurality’s invitation, explic-

itly declining to join Part V, the plurality’s true position

remains that expressed in Part IV.

Justice O’Connor does appear to accept the bare concept

that contingency enhancements should not be awarded

unless the plaintiff shows substantial difficulties, but it is

far from clear, as we noted earlier, what content she

would give to the “substantial difficulties” test the plural-

ity articulates in Part V. Her concurrence does not contain

enough independent reasoning on the question of avail-

ability to allow us to compare her position analytically to

that of the plurality. In that sense, her opinion on that

issue approaches Justice Harlan’s in Coolidge.

Even if it were possible to determine from Justice

O’Connor’s opinion when to apply a contingency enhance-

ment and to conclude that her views on that subject were

somehow narrower than the plurality’s, it is quite clear

that one could not say in the Marks sense that her care-

fully explained view of how the contingency enhancement

should be calculated is narrower than the plurality’s

answer to that question. The plurality in Part IV stated

that if an upward adjustment for contingency risk were

applied, the amount should be based on the “real risk-of-

not-prevailing” in the case—but as a general rule should

be “no more than one-third of the lodestar.” Jd. at 730.

Justice O'Connor, on the other hand, takes a different

approach altogether, one that does not vary with the riski-

ness of the individual case but rather is based on a class

determination of the amount of contingency enhancement

usually paid in the relevant market, with no explicit ceil-

ing. See id. at 731-34 (O'Connor, J. concurring in part and

23A

concurring in the judgment). We do not see how either

approach can be thought “narrower” than the other: they

are simply different.

To apply Marks to Delaware Valley II, we would have

to conclude that Justice O'Connor's answers to both the

“when” and the. “how” questions were “narrower” than the

plurality’s in Part V. Without implicit agreement on both,

it is simply impossible to regard the substantial difficul-

ties test as controlling. Of course, as we have recognized,

how one calculates a contingency enhancement could be

thought to be a separate analytic issue from the question

whether and under what circumstances a contingency

enhancement is available. But as the panel opinion and

other cases demonstrate, the two questions tend to run

together. See King, 906 F.2d at 765-68: McKenzie, 875

F.2d at 334-37; Student Pub. Interest Research Group v.

AT & T Bell Laboratories, 842 F.2d 1436, 1451 (3d Cir.

1988). It is very difficult to consider the circumstances

under which a contingency enhancement is “necessary” to

attract counsel without contemplating the amount of the

enhancement; each part of the inquiry has inevitable ram-

ifications for the other. This may be the reason Justice

O’Connor’s opinion focuses so heavily on the “how” ques-

tion. Because her answer to that question is so clearly at

odds with that of the plurality, however, we are left with-

out a controlling opinion or a governing test for awarding

contingency enhancements under Delaware Valley II.

The Third Circuit, taking a different approach, has rea-

soned that Justice O'Connor's opinion can be regarded as

a subset of the dissent if not the plurality. As such, Jus-

tice O'Connor's concurrence would speak for a majority of

the Court. See id. (“Because the four dissenters would

allow contingency multipliers in all cases in which Justice

O'Connor would allow them, her position commands a

majority of the Court.”). The Third Circuit appears to

apply the Marks methodology to reach this result, but it

does not explicitly rely on Marks. See id. at 1451 n.16 (cit-

ing Marks as a “see also” in a footnote appended to the

citation of a circuit opinion). This is understandable.

24A

because Marks has never been so applied by the Supreme

Court, and we do not think we are free to combine a dis-

sent with a concurrence to form a Marks majority. As the

Court said in Marks itself, “When a fragmented Court

decides a case and no single rationale explaining the

result enjoys the assent of five Justices, ‘the holding of the

Court may be viewed as that position taken by those mem-

bers who concurred in the judgments on the narrowest

grounds.’” Marks, 430 U.S. at 193 (quoting Gregg, 428

U.S. at 169 n.15 (opinion of Stewart, Powell, and Stevens,

JJ.)).

To be sure, in Vasquez v. Hillery, 474 U.S. 254 (1986),

the Supreme Court, in interpreting Rose v. Mitchell, 443

U.S. 545 (1979), emphasized that an opinion that com-

bines shifting majorities in various portions is no less

binding than would be an opinion in which the same Jus-

tices formed the majority for all the sections. See Vasquez,

474 U.S. at 261-62 n.4; see also Arizona v. Fulminante,

111 S. Ct. 1246 (1991) (employing two distinct majorities

to arrive at a judgment, both of which therefore constitute

binding law). That, however, is quite a different situation

than the one that the Marks methodology addresses,

where there is no explicit majority agreement on all the

analytically necessary portions of a Supreme Court opin-

ion. Under these latter circumstances, if the application

of Marks will not yield a majority holding, nothing will.’

To say that Delaware Valley II provides no controlling

legal holding is not to say that it has no binding impact

on us. Because the Court’s result was to deny a contin-

"In our view, even applying the Third Circuit’s reasoning, we

do not think Justice O’Connor’s concurrence constitutes a control-

ling opinion in Delaware Valley Il. For similar reasons to those

we outlined in our discussion as to whether her opinion could be

thought narrower than the plurality opinion, Justice O’Connor’s

thoughtful answer to the question of how to calculate a contin-

gency enhancement should it be available cannot possibly be

thought a subset of the dissent’s approach to the same issue. She

herself recognizes this. See Delaware Valley II, 483 U.S. at 732

(O'Connor, J., concurring in part and concurring in the judgment).

25A

gency enhancement without even a remand, we think we

could not authorize the routine awarding of contingency

enhancements of whatever size. Cf. National Mut. Ins. Co.

v. Tidewater Transfer Co., 337 U.S. 582, 655 (1949)

(Frankfurter, J., dissenting) (noting that the result is

binding even when the Court fails to agree on reasoning).

We furthermore believe, as this opinion and the dissent

make clear, that there simply is no practical middle

ground between providing enhancements routinely and

not providing them at all. Keeping in mind that a major-

ity of the Supreme Court clearly agrees that the question

of attorney’s fees must not turn into major litigation in

itself, see Delaware Valley II, 483 U.S. at 722, we think

the appropriate course is to hold that contingency

enhancements will not be available in this Circuit.? We

note that although other circuit courts have set forth vari-

ous tests for awarding contingency enhancements under

Delaware Valley II, most of the tests appear to be difficult,

if not impossible, to meet in practice. See, e.g., Student

Pub. Interest Research Group v. AT & T Bell Laboratories,

842 F.2d 1436, 1451-52 (3d Cir. 1988) (“(C]ontingency

multipliers should be granted only rarely.”): Craig v. Sec-

retary, Dep't of Health and Human Servs., 864 F.2d 324,

327 (4th Cir. 1989) (no contingency enhancement avail-

able “in the absence of exceptional circumstances”): Leroy

v. City of Houston, 831 F.2d 576, 583 (5th Cir. 1987) (con-

tingency enhancements should be “reserved for ‘excep-

tional cases’” (citation omitted)); Skelton v. General

"The dissent’s reliance on the legislative history of 42 U.S.C.

§ 1988—particularly citations to Johnson v. Georgia Highway

Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974)—comes too

late. The Supreme Court has, on several occasions, indicated that

it does not regard factors listed separately in Johnson as appro-

priate enhancements to the lodestar. See Blum v. Stenson, 465

U.S. 886, 898-99 (1984); Delaware Valley I, 478 U.S. 546, 564, 566

(1986). And the dissent’s citation of Blanchard v. Bergeron, 489

U.S. 87 (1989), is also misplaced. There the Supreme Court was

dealing with an entirely different issue—the question whether an

actual, private contingency fee arrangement limited a statutory

award, not whether a contingency factor should be added to the

lodestar.

26A

Motors Corp., 860 F.2d 250, 254 (7th Cir. 1988) (contin-

gency enhancements available only if plaintiffs meet

“stringent requirements”); Hendrickson v. Branstad, 934

F.2d 158, 162 (8th Cir. 1991) (“[E]nhancement is reserved

for ‘rare’ and ‘exceptional’ cases ....”); Smith v. Freeman,

921 F.2d 1120, 1123 (10th Cir. 1990) (quoting plurality’s

view that “enhancement for the risk of nonpayment

should be reserved for exceptional cases”); Norman v.

Housing Auth., 836 F.2d 1292, 1302 (11th Cir. 1988) (“{I}n

the rare case enhancement may be appropriate ....”). But

cf. D’Emanuele v. Montgomery Ward & Co., 904 F.2d

1379, 1383 (9th Cir. 1990) (implying that routine contin-

gency enhancements might be justified).

We have done our best to apply Delaware Valley II but

have been unable to derive a governing rule from the

opinion. Considering our struggle to understand and

apply Delaware Valley I] as well as the difficulties our sis-

ter circuits have experienced, we urge the Supreme Court

to clarify its position.

** * &

For the foregoing reasons, we overrule McKenzie v. Ken-

nickell, 875 F.2d 330 (D.C. Cir. 1989), and those portions

of our other previous opinions inconsistent with our cur-

rent disposition, and reverse the contingency enhance-

ment portion of the attorney’s fees allowed to appellant.

It is so ordered.

27A

Epwarps, Circuit Judge, with whom Mixva, Chief

Judge, Wap and Rutu B. Ginspurc, Circuit Judges, join,

dissenting: In deciding this appeal, we are constrained to

apply a specific statutory provision, section 706(k) of Title

VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5(k)

(1988), under which the District Court has broad author-

ity to assess the reasonableness of a fee request. In the

absence of legal error, the trial judge’s determination as

to reasonableness may not be disturbed unless it is an

abuse of discretion. Given this highly deferential standard

of review, there is no legitimate basis whatsoever for this

court to overturn the judgment of the trial judge on the

facts of this case.

Furthermore, the majority's new rule, that contingency

awards are never justified, is completely without founda-

tion. Twelve other circuits have reviewed the question at

hand, and not one other circuit has adopted a rule that

completely bars contingency enhancements.

The plaintiff, Mable King, was awarded an attorney's

fee pursuant to section 706(k), which reads, in pertinent

part, as follows:

In any action or proceeding under this subchapter

the court, in its discretion, may allow the prevailing

party ... a reasonable attorney's fee as part of the

costs [of bringing the action] ....

42 U.S.C. § 2000e-5(k) (1988) (emphasis added). As may

be seen from the clear terms of the statute, the “district

court is expressly empowered to exercise discretion in

determining whether an award is to be made and if so its

reasonableness.” Blum v. Stenson, 465 U.S. 886, 902 n.19

(1984). The Supreme Court has emphasized that it is

entirely “appropriate” that the trial judge have broad

authority in determining the amount of a fee award “in

view of the district court’s superior understanding of the

litigation and the desirability of avoiding frequent appel-

late review of what essentially are factual matters.”

Hensley v. Eckerhart, 461 U.S. 424, 437 (1983).'

'See also Blanchard v. Bergeron, 489 U.S. 87, 96 (1989) (“It is

central to the awarding of attorney's fees _.. that the district

28A

In this case, the District Court awarded an attorney's

fee that compensates Ms. King’s counsel for the risk of

having taken the case on a contingent-fee basis. In reach-

ing its conclusion that a 50% enhancement over normal

hourly rates was “reasonable” compensation in this case,

the District Court properly looked to evidence of prevail-

ing market practices to ensure that the fee award was

roughly commensurable with what counsel could obtain

on the open market. There is no doubt, given the language

of the statute, that the District Court’s judgment in this

regard is to be reviewed under a highly deferential, abuse-

of-discretion standard. See Blum, 465 USS. at 896;

Pennsylvania v. Delaware Valley Citizens’ Council for

Clean Air, 478 U.S. 546, 569 (1986) (“Delaware Valley I”)

(Blackmun, J., concurring in part and dissenting in part);

City of Riverside v. Rivera, 477 U.S. 561, 586 (1986) (Pow-

ell, J., concurring in the judgment). Under this standard

of review, we are not to substitute our judgment of what

is “reasonable” for that of the District Court; rather, we

are to review the trial court’s judgment only to ensure

that it is not founded upon an error of law or a clearly

erroneous finding of fact and that there is some evidence

in the record upon which the court “rationally could have

based its decision.” Heat & Control, Inc. v. Hester Indus.,

Inc., 785 F.2d 1017, 1022 (Fed. Cir. 1986); see also Found-

ing Church of Scientology of Washington, D.C., Inc. v.

Webster, 802 F.2d 1448, 1457 (D.C. Cir. 1986) (“The

abuse-of-discretion standard calls on the appellate depart-

ment, in a spirit of humility occasioned by not having par-

ticipated in what has gone before, not just to scrutinize

court judge, in his or her good judgment, make the assessment

of what is a reasonable fee under the circumstances of the case.”).

Although some of these precedents focus upon the parallel fee-

shifting anes set out in the Civil Rights Attorney's Fee

Awards Act of 1976, Pub. L. No. 94-559, 90 Stat. 2641, codified

at 42 U.S.C. § 1988 (1988), Congress and the Supreme Court have

made clear that the fee-shifting provisions of that statute and

Title VII are to be interpreted alike. See Hensley, 461 U.S. at 433

n.7: S. Rev. No. 1011, 94th Cong., 2d Sess. 4 (1976).

29A

the conclusion but to examine with care and respect the

process that led up to it.”), cert. denied, 484 U.S. 871

(1987); Gomez v. Chody, 867 F.2d 395, 405 (7th Cir. 1989)

(““To find an abuse of discretion, we must conclude that

“no reasonable [person] ... could agree with the district

court.”’”) (quoting Mumford v. Bowen, 814 F.2d 328, 329

(7th Cir. 1986)).

Notwithstanding the latitude vested by Congress in

trial courts to craft “reasonable” fee awards, the District

of Columbia (“Government”) defendants in this case urge

this court to substitute its judgment for that of the trial

judge in overturning the award of fees. In following this

suggestion, the majority seizes upon the “substantial

difficulties” test found in Pennsylvania v. Delaware Valley

Citizens’ Council for Clear Air, 483 U.S. 711, 731 (1987)

(“Delaware Valley IT’); id. at 733 (O'Connor, J., concurring

in part and concurring in the judgment), which purports

to measure risk enhancement pursuant to prevailing

“market” rates in the relevant legal community. The

majority, however, turns the test on its head by convert-

ing it to a test whereby an individual plaintiff must estab-

lish that she personally encountered difficulty securing

competent representation without the promise of a contin-

gency enhancement. The problem with this result, how-

ever, is that it defies the premise upon which it is based.

If there is a “substantial difficulties” requirement under

section 706(k), it does not seek to determine whether a

particular plaintiff “actually faced substantial difficulty in

retaining counsel.” Morris v. American Nat'l Can Corp.,

941 F.2d 710, 715 (8th Cir. 1991) (citing McKenzie v. Ken-

nickel, 875 F.2d 330, 337-38 (D.C. Cir. 1989); see 875 F.2d

at 338 (“Justice O’Connor’s opinion instructs us to adopt

a class-wide view of contingent cases; if the unavailability

of risk enhancements would have caused plaintiffs to have

experienced ‘substantial difficulty’ in locating counsel,

then, notwithstanding the particular circumstances of

their case, such an enhancement may be granted.”)).

Therefore, the trial judge surely did not abuse his discre-

tion in failing to apply the majority's distorted construc-

30A

tion of the so-called “substantial difficulties” test. There

is no “actual difficulties” requirement under section

706(k), and this court has no authority to amend the stat-

ute to include such a restriction.

Just recently, in rejecting a claim for expert fees as a

part of a claim for attorney's fees, the Supreme Court

reminded us that we must enforce fee statutes as written.

On this point, Justice Scalia, borrowing a well-known pas-

sage from an opinion by Justice Brandeis, said:

(The statute’s) language is plain and unambiguous.

What the Government asks is not a construction of

a statute, but, in effect, an enlargement of it by the

court, so that what was omitted, presumably by inad-

vertence, may be included within its scope. To supply

omissions transcends the judicial function.

West Va. Univ. Hosps., Inc. v. Casey, 111 S. Ct. 1138, 1148

(1991) (quoting Jselin v. United States, 270 U.S. 245, 250-

51 (1926)). In first utilizing an actual difficulties gloss to

section 706(k), and then completely barring contingency

enhancements, the majority opinion in this case

“transcends the judicial function.” Because there is noth-

ing in the statute or the relevant Supreme Court case law

that would support the majority's conclusion. we dissent.

By now, it should be beyond dispute that the fee-

shifting provision of Title VII permits district courts to

enhance time-based fee awards to take account of the fact

that an attorney has taken a case on a contingent-fee

basis. It is, of course, true that, in determining what is

“a reasonable attorney's fee” in any given case, the trial

judge normally begins by calculating the prevailing attor-

ney’s so-called “lodestar” fee. As the Supreme Court has

explained:

The most useful starting point for determining the

amount of a reasonable fee is the number of hours

reasonably expended on the litigation multiplied by

a reasonable hourly rate. This calculation provides an

SIA

objective basis on which to make an initial estimate

of the value of a lawyer's services.

Hensley, 461 U.S. at 433 (emphasis added). This calcula-

tion, however, is only a “starting point” and “does not end

the inquiry. There remain other considerations that may

lead the district court to adjust the fee upward or down-

ward ....” Id. at 434; see also Blanchard v. Bergeron, 489

U.S. 87, 94 (1989); Blum, 465 U.S. at 888 (“[aldjustments

to that [lodestar] fee then may be made as necessary in

the particular case”).

Among these “other considerations,” it appears quite

certain that Congress intended that the courts would take

into account whether a lawyer had taken a case on a

fixed- or contingent-fee basis. This can be inferred from

Congress’ approving citation of a 1974 Fifth Circuit deci-

sion, Johnson v. Georgia Highway Express, Inc., 488 F.2d

714 (5th Cir. 1974), which included the contingent nature

of payment among 12 factors that trial courts should con-

sider in calculating fee awards. See S. Rev. No. 1011, 94th

Cong., 2d Sess. 6 (1976); H.R. Rep. No. 1558, 94th Cong.,

2d Sess. 8-9 (1976); see also Blum, 465 U.S. at 902-03

(Brennan, J., concurring) (Congress’ approval of Johnson

and related cases makes it “clear ... that Congress autho-

rized district courts to award ward adjustments to com-

pensate for the contingent nature of success”). “Johnson's

‘list of 12,” the Supreme Court has often observed,

“provides a useful catalog of the many factors to be con-

sidered in assessing the reasonableness of an award of

attorney's fees ....” Blanchard, 489 U.S. at 93; see also

Hensley, 461 U.S. at 429-30, 434 n.9 (looking to Fifth Cir-

cuit’s Johnson opinion in determining congressional intent

with regard to fee awards); Blum, 465 U.S. at 893-95

(same); id. at 902-03 (Brennan, J., concurring) (same).

Apart from these indications of congressional intent,

the Supreme Court also has acknowledged the propriety

of considering the uncertainty of payment in calculating

a fee award. Five Justices undoubtedly agreed in

Delaware Valley Il that “Congress did not intend to fore-

32A

close consideration of contingency in setting a reasonable

fee under fee-shifting provisions” such as that found in

Title VII. 483 U.S. at 731 (O'Connor, J., concurring in

part and concurring in the judgment); see also id. at 739

(Blackmun, J., dissenting, joined by Brennan, Marshall &

Stevens, JJ.) (“Congress envisioned that district courts

would take the fact of contingency into account when cal-

culating a reasonable attorney's fee”). Two years later, in

Blanchard, the Court held that, while a plaintiff's

contingent-fee contract with her attorney is by no means

dispositive of a subsequent judicial assessment of “a rea-

sonable attorney's fee” in a case, “(t]he Johnson

contingency-fee factor is ... a factor.” 489 U.S. at 93

(emphasis added).

Moreover, perhaps the one rule that has emerged more

clearly than any other from the Supreme Court's pro-

nouncements in this area is that court-ordered attorney's

fees are to reflect prevailing market rates and practices.

See, e.g., Missouri v. Jenkins, 491 U.S. 274, 283 (1989)

(“Our cases have repeatedly stressed that attorney's fees

awarded [by a court] ... are to be based on market rates

for the services rendered.”): Blum, 465 U.S. at 895 (“The

statute and legislative history establish that ‘reasonable

fees’... are to be calculated according to the prevailing

market rates in the relevant community ....”); Delaware

Valley II, 483 U.S. at 733 (O'Connor, J., concurring in part

and concurring in the judgment): id. at 754 ( Blackmun,

J., dissenting). In this way, court-ordered fees will track

market forces, fulfilling the congressional purpose of

ensuring that attorneys will be available to prosecute

Title VII cases and vindicate the fundamental national

policies embodied in that statute. See Jenkins, 491 U.S.

at 283 n.6; Blum, 465 U.S. at 903-04 (Brennan, J., concur-

ring); Hensley, 461 U.S. at 447 (Brennan. J., concurring

in part and dissenting in part).

There should be no controversy in the observation that

attorneys in the private legal-services market ordinarily

demand somewhat greater compensation in exchange for

taking a case on a contingent-fee basis. It appears indis-

33A

putable that “[lJawyers operating in the marketplace can

be expected to charge a higher hourly rate when their

compensation is contingent on success than when they

will be promptly paid[ ] irrespective of whether they win

or lose.” Blum, 465 U.S. at 903 (Brennan, J., concurring);

see also Berger, Court Awarded Attorneys’ Fees: What Is

“Reasonable”?, 126 U. Pa. L. Rev. 281, 324-25 (1977) (“The

experience of the marketplace indicates that lawyers gen-

erally will not provide legal representation on a contin-

gent basis unless they receive a premium for taking that

risk.”). Thus, commentators and courts have long and

widely agreed that, in assessing the fair market value of

legal services, both inside and outside the court-ordered

fee context, some enhancement is required to compensate

for the attorney’s assumption of risk in a contingent-fee

case. See, e.g., Copeland v. Marshall, 641 F.2d 880, 892-

93 (D.C. Cir. 1980) (en banc); id. at 927 (Wilkey, J., dis-

senting); Evans v. Sheraton Park Hotel, 503 F.2d 177, 188

(D.C. Cir. 1974) (adopting Johnson's “list of 12”); 2 M.

Derrnek & A. Wor, Court Orperen Atrrorney Fees

4} 15.01[2}ic], at 15-16 (rev. ed. 1990) (“Most courts realize

that where payment of a fee is contingent on success an

attorney should receive a larger overall fee than where

payment is guaranteed regardless of outcome ... .”) (foot-

note omitted); id., 4 16.04[4]; S. Spriser, Arrorneys’ Frees

$ 8:10, at 319 (1973) (“The fact that an attorney's employ-

ment is undertaken on a contingent basis is a proper fac-

tor to be considered in assessing a _ reasonable

compensation for his services, the courts generally taking

the view that a larger fee will be authorized where its

payment depends upon the attorney's success than where

he is to be paid whether or not his efforts are successful.”)

(footnote omitted); Leubsdorf, The Contingency Factor in

Attorney Fee Awards, 90 Yas L.J. 473, 501 (1981); Ber-

ger, supra, at 324-26.

Furthermore, it is absolutely clear that the lodestar is

not the sole measure of a reasonable attorney's fee. It is

true that the Supreme Court has said that “many of the

Johnson factors,” such as “* ‘novelty [and] complexity of the

34A

issues, ‘the special skill and experience of counsel,’ the

‘quality of representation, and the ‘results obtained’ from

the litigation{,) are presumably fully reflected in the lode-

star amount, and thus cannot serve as independent bases

for increasing the basic fee award,” see Delaware Valley

I, 478 U.S. at 565 (quoting Blum, 465 U.S. at 898-900);

but, in making this observation, the Court has excluded

the consideration of “enhancement of the lodestar! ] based

on the likelihood of success[ | or ... the risk of loss” from

any presumption that the lodestar represents a reason-

able fee, id. at 568.* Indeed, in Delaware Valley I, the

Court reserved until Delaware Valley I] the question of

when and to what extent contingency enhancements

might be awarded. As indicated earlier, a majority of the

Court in Delaware Valley Il agreed that contingency

enhancements may be awarded as a part of a reasonable

attorney's fee. In other words, a majority of the Court in

Delaware Valley II declined to apply any “presumption”

that the lodestar normally represents a reasonable fee so

as to defeat claims of enhancement based on the

likelihood-of-success/risk-of-loss factor.”

We recognize that the contingency factor could be

accounted for within the initial lodestar calculation. A

court could simply enhance the “reasonable” hourly rate

used in calculating the lodestar and forgo post-lodestar

adjustments. See, e.g., Copeland, 641 F.2d at 893 (“To the

extent ... that an hourly rate underlying the ‘lodestar’ fee

*The Court reiterated the presumptive reasonableness of the

lodestar fee in Blanchard, but did so there only to rebut the sug-

gestion that a fee arrangement set in a contingent-fee contract

should govern as a strict ceiling on a court-ordered fee in the

same case. See 489 U.S. at 95.

“The majority’s extended discussion of whether the five votes

that adopt this position constitute a binding majority of the Court

seems to us overly pedantic, and mostly irrelevant. It is axiomatic

that lower court judges routinely consider and weigh the diverse

statements in Supreme Court opinions, especially those proposi-

tions garnering a majority, to seek guidance in the disposition of

subsequent cases. Indeed, that is precisely what our sister circuits

have done in construing Delaware Valley 11.

35A

itself comprehends an allowance for the contingent nature

of the availability of fees in Title VII litigation ... , no fur-

ther adjustment duplicating that allowance will be

made.”); Berger, supra, at 325-26. This approach is prob-

lematic because there really is “no such thing as a market

hourly rate in contingent litigation.” 2 M. Derrner & A.

Wor, supra, 9 16.04[4)[a], at 16-100.15. Accordingly,

most courts choose to employ “real” hourly rates in the

lodestar calculation — i.e., “the normal hourly charge in

the community for noncontingent, contemporaneous pay-

ment in litigation of similar complexity and difficulty, by

a lawyer with similar experience and reputation,” id,

q 16.03{1)[a], at 16-47 (footnotes omitted)‘ — and only

later adjust the product upward to account for the contin-

gency factor. See id., {j 16.04(4)[a], at 16-100.15-.16. The

difference in the mathematical formulas makes no differ-

ence in the result, of course, so long as the court is careful

to avoid “double-counting” by blending the _ two

approaches. See Copeland, 641 F.2d at 893. The point

here is, however, that under the approach followed by

most courts — and followed by the District Court in this

case — the contingency factor is not subsumed within the

initial lodestar calculation; consequently, if the lodestar is

not itself adjusted upward, the lawyer's economic risk will

go uncompensated.

The majority rejects the prevailing view that enhance-

ments are available because it can find no governing prin-

ciple in Delaware Valley II. With no precedent or logic to

support its opinion, the majority simply decides that con-

tingency enhancements never should be permitted. This

rule is created completely out of new cloth. Neither the

plurality, concurring, nor dissenting opinion in Delaware

Valley II holds that contingency enhancements are never

available. In a sweep of reasoning that defies comprehen-

sion, the majority attempts to dismiss Part V of Justice

*The Supreme Court acknowledged as much in Blanchard when

it stated that the lodestar figure is to be derived by “applying

prevailing billing rates to the hours reasonably expended on suc-

cessful claims.” 489 U.S. at 94 (emphasis added).

—

36A

White’s plurality opinion because Justice O’Connor

declined to join this portion of the plurality. But, of

course, as is clear from the Court's opinion, Part V

remains as written and means what it says: see, e.g., 483

U.S. at 728 (“enhancement for the risk of nonpayment

should be reserved for exceptional cases where the need

and justification ... are readily apparent and are sup-

ported by evidence in the record and specific findings by

the courts”); id. at 731 (“[A] fee award should be informed

by the statutory purpose of making it possible for poor cli-

ents with good claims to secure competent help. Before

adjusting for risk assumption, there should be evidence in

the record, and the trial court should so find, that without

risk enhancement plaintiff would have faced substantial

difficulties in finding counsel in the local or other relevant

market.”). Whatever substantive criteria these statements

may stand for, they certainly do not reflect a per se rule

against contingency enhancements. In any event, the one

thing that is absolutely clear from Delaware Valley II is

that the Supreme Court declined to reject the possibility

of contingency enhancements.

Furthermore, the majority in this case, having decided

that Delaware Valley II does not control interpretation of

the fees statute, does absolutely no work to interpret the

statute. Rather, the majority relies on the utterly irrele-

vant proposition that “the question of attorney's fees must

not turn into major litigation itself,” see Delaware Valley

Il, 483 U.S. at 722, to reach a per se rule barring all con-

tingency enhancements. Of course, the majority's fear

could be avoided equally well by routinely granting con-

tingency enhancements. Even a test which looks to

whether, in the relevant market, contingency fees are

needed to induce attorneys to represent plaintiffs in these

actions, will not create much hardship after district and

circuit courts establish precedent regarding the major

markets. Given that the contingency enhancement ques-

tion merely asks the court to decide the prevailing market

for legal services, it is no more onerous than any other fee

inquiry.

37A

The majority's result also files in the face of the deci-

sions from every circuit that has considered the issue since

Delaware Valley II. In creating a split in the circuits, the

majority now causes the D.C. Circuit to stand oddly alone

on this question. Of the thirteen circuits applying

Delaware Valley II, none — save the D.C. Circuit — has

completely ruled out contingency enhancements. See, e.g.,

Jacobs v. Mancuso, 825 F.2d 559, 561 (1st Cir. 1987) (dis-

allowing contingency, not because of per se rule, but

because “liability here was so plain ... that, as a practical

matter, the risk of not recovering a fee was all but

eliminated”); Friends of the Earth v. Eastman Kodak Co.,

834 F.2d 295, 298 (2d Cir. 1987) (fee enhancement avail-

able when “(without the possibility of a fee enhancement

. competent counsel might refuse to represent ... cli-

ents thereby denying them effective access to the courts”)

(quoting Lewis v. Coughlin, 801 F.2d 570, 576 (2d Cir.

1986)); Kelly v. Matlack, 903 F.2d 978 (3d Cir. 1990) (“in

order to qualify for an enhancement, a plaintiff must

establish that without adjustment it would have faced

substantial difficulties in finding counsel in the ... rele-

vant market”) (citations omitted); Craig v. Dep't of Health

& Human Servs., 864 F.2d 324, 327 (4th Cir. 1989) (dicta)

(reading Delaware Valley II to permit fees in “exceptional

circumstances”); Alberti v. Klevenhagen, 896 F.2d 927, 936

(5th Cir.) (enhancement available when district court

“make[s] the findings required by Justice O’Connor’s con-

currence in Delaware Valley II”), reh’g granted in part,

903 F.2d 352 (5th Cir. 1990); Perotti v. Seiter, 935 F.2d

761, 765 (6th Cir. 1991) (“This court has upheld multipli-

ers for the risk of non-compensation in contingent-fee

cases subsequent to Delaware Valley.”) (citing Fite v. First

Tennessee Production Credit Ass’n, 861 F.2d 884 (6th Cir.

1988)); Soto v. Adams Elevator Equip. Co., 941 F.2d 543,

553 (7th Cir. 1991) (following Justice O’Connor’s test as

the Delaware Valley Il “holding”); Morris v. American

Natl Can Corp., 941 F.2d 710, 715 (8th Cir. 1991)

(“Justice O’Connor’s opinion in Delaware Valley Il is the

current legal standard for awarding contingency enhance-

ments.... We are persuaded that the district court

38A

abused its discretion in concluding that [plaintiff] failed

to establish that she would have faced substantial difficul-

ties in retaining counsel absent risk enhancement.”);

Bouman v. Block, 940 F.2d 1211, 1235-36 (9th Cir. 1991)

(upholding fee on the basis of district court’s findings

matching Justice O’Connor’s test), petition for cert. filed,

60 U.S.L.W. 3344 (Nov. 5, 1991); Smith v. Freeman, 921

F.2d 1120, 1123 (10th Cir. 1990) (quoting the Delaware

Valley II plurality that “enhancement for the risk of non-

payment should be reserved for exceptional cases where

the need and justification for such enhancement are read-

ily apparent and are supported by evidence in the record

and specific findings by the courts”); Martin v. University

of South Alabama, 911 F.2d 604, 610-12 (11th Cir. 1990)

(following Justice O’Connor’s test); Crumbaker v. Merit

Systems Protection Board, 827 F.2d 761, 761 (Fed. Cir.

1987) (“the Board on remand shall consider the degree to

which the relevant market compensates for contingency

and whether any enhancement is necessary to bring the

fee within a range that would attract competent counsel”).

Additionally, despite the majority’s assertion that the

tests developed in many circuits are “difficult, if not

impossible, to meet,” even courts of those circuits have

continued to award contingency enhancements in some

circumstances. See, e.g., Morris v. American Nat’ Can

Corp., 941 F.2d 710, 716 n.2 (8th Cir. 1991); Curry v. Con-

tract Fabricators Inc. Profit Sharing Plan, 891 F.2d 842,

849-50 (11th Cir. 1990); Shirley v. Chrysler First, Inc., 763

F. Supp. 856, 860 (N.D. Miss. 1991); Vargas v. Calabrese,

750 F. Supp. 677 (D.N.J. 1990); Bauman v. Jacobs

Suchard, Inc., No. 89 C 5452, 1991 U.S. Dist. LEXIS 8847

(N.D. Ill. 1991).

Thus, setting aside the more contentious question of

what degree of enhancement is appropriate, there ought

to be no dispute that some upward adjustment of the lode-

star fee is permissible where the prevailing attorney

assumed the greater risk inherent in contingent-fee cases.

There is simply no justification — in the statute, in the

case law or in common sense — for the suggestion that

39A

contingent-fee lawyers may not be fully compensated for

their services.

Il.

With regard to the particular facts of this case, there

is no basis under the abuse-of-discretion standard of

review to overturn the District Court’s decision to allow

a 50% enhancement of the lodestar fee submitted by Ms.

King’s counsel. Although the Supreme Court’s guidance

concerning the appropriate method for calculating a con-

tingency adjustment has been regrettably uncertain, the

trial court’s decision in this case is consistent with what

standards can be gleaned from recent cases.

The clearest instruction found in the Supreme Court’s

cases is that fee awards must be tied to evidence of the

fee practices prevailing in the local legal market. See, e.g.,

Jenkins, 491 U.S. at 283, 285; Blum, 465 U.S. at 894-95;

Delaware Valley II, 483 U.S. at 733 (O’Connor, J., concur-

ring in part and concurring in the judgment); id. at 754

(Blackmun, J., dissenting). That was done in this case. In

reaching its determination, the District Court expressly

relied upon attorney affidavits filed by the plaintiff and

an earlier decision in the same district in which another

trial judge had found that “attorneys in the Washington{,]

D.C.{,] community will only accept a fully contingent case

if their recovery will be at least double their normal

hourly billing rate and will only accept a partially contin-

gent case if their recovery is enhanced by at least 50

percent.” See Palmer v. Shultz, 679 F. Supp. 68, 74

(D.D.C. 1988), quoted in King v. Palmer, Civ. Action No.

83-1980, mem. op. at 4 (D.D.C. Sept. 20, 1988).

Another way to assess the reasonableness of the fee

amount awarded by the District Court is pursuant to the

two-prong test set forth in Justice O’Connor’s concurring

opinion in Delaware Valley II. Although it is unclear what

precedential force that opinion should be given, cf. Marks

v. United States, 430 U.S. 188, 193 (1977), it is nonethe-

less a source of some guidance and it is further indication

40A

that the judgment of the District Court should be affirmed

in this case. Under the first prong of Justice O’Connor’s

test, lower courts would be required to “treat a determina-

tion of how a particular market compensates for contin-

gency as controlling future cases involving the same

market.” 483 U.S. at 733 (O'Connor, J., concurring in part

and concurring in the judgment). Under the second prong,

“the fee applicant bears the burden of proving the degree

to which the relevant market compensates for

contingency.” /d. Under this second prong, “no enhance-

ment for risk is appropriate unless the applicant can

establish that without an adjustment for risk the prevail-

ing party ‘would have faced substantial difficulties in find-

ing counsel in the local or other relevant market.” /d.

(quoting from plurality opinion, 483 U.S. at 731).

Under the first prong of Justice O’Connor’s test, the

District Court here reasonably concluded that “the rele-

vant market” does in fact compensate lawyers for assum-

ing the risk of contingent payment. In addition to the

evidence cited in Palmer v. Shultz, which went directly to

the degree to which the Washington, D.C., legal market

customarily compensates for contingency, the court had

before it several dozen affidavits from local attorneys

swearing either that they generally demand an enhance-

ment over normal hourly rates in order to accept

contingent-fee cases or that they refuse such cases alto-

gether because of the risk involved.

Under the second prong of Justice O’Connor’s test, Ms.

King was required to show that she “would have faced

substantial difficulties in finding counsel” had contingency

enhancements not been customarily available in the

Washington, 1).C., legal market. This proposition, of

course, turning as it does on a counterfactual supposition,

is difficult to prove. Nonetheless, Ms. King produced an

affidavit from her attorney stating that he would not have

taken her case without the prospect of a fee enhancement.

See Declaration of Robert M. Adler at 2 (Sept. 11, 1987),

reprinted in Joint Appendix (“J.A.”) 74, 75. In addition,

she produced further affidavits from several Washington,

41A

D.C., Title VII plaintiffs’ attorneys corroborating that Ms.

King likely would have faced substantial difficulties secur-

ing counsel without the promise of a contingency premium.’

These attestations were reinforced by others documenting

the general unwillingness of local attorneys to accept such

cases absent some likelihood of receiving an enhancement

for risk. On this record, we believe that Ms. King carried

her burden under both prongs of Justice O’Connor’s test.

Because Title VII and the governing case law clearly

permit trial courts to enhance attorney's fees to compen-

sate for the risk of contingent payment, and because the

facts of the instant case satisfy whatever standards can

be gleaned from recent Supreme Court cases, it cannot be

found that the District Court abused its discretion in

shaping the fee award in this case. As we noted at the

outset, the standard of review in this case is abuse of dis-

"In one affidavit, attorney George Chuzi stated:

During 1983, | was personally familiar with most of the

attorneys regularly bringing Title VII suits in the District of

Columbia on behalf of plaintiffs. Had Mr. Adler not agreed

to represent Mrs. King in this case, | am unaware of any

other Title VII attorney who would have agreed in 1983 to

represent her on a contingency fee basis (even had she agreed

to pay up to $5,000 in legal fees). The only way in which |

believe that a competent Title VII attorney would have been

convinced to seriously consider this representation was if

there was a reasonable possibility of receiving an enhanced

fee for risk (over and above hourly rates) if Mrs. King pre-

vailed.

Supplemental Declaration of George M. Chuzi at 2 (Dec. 21,

1987), reprinted in J.A. 130, 131; see also Declaration of David

R. Cashdan at 4 (Apr. 25, 1986) (“I believe that it is highly

unlikely that | would have agreed to act as sole counsel in this

case.”), reprinted in J.A. 112a, 112d; Declaration of Robert B. Fitz-

patrick at 2 (Apr. 24, 1986) (“I believe that the chances of prevail-

ing in this case ... were so remote that my firm would not have

accepted representation of Mrs. King.”), reprinted in J.A. 173a,

173b; Declaration of Barry H. Gottfried at 2 (July 31, 1987) (“Had

the plaintiff sought to retain me to represent her by filing a suit

for the claims involved herein | do not believe that | would have

accepted representation.”), reprinted in J.A. 176, 177.

42A

cretion. The majority, however, has simply ignored the

constraints of appellate review in second-guessing the

findings of the trial judge. Indeed, the majority's approach

in this case borders on de novo review, in flat defiance of

the Supreme Court's instruction that “[i]t is central to the

awarding of attorney's fees ... that the district court

judge, in his or her good judgment, make the assessment

of what is a reasonable fee under the circumstances of the

case.” Blanchard, 489 U.S. at 96.

iil.

The fundamental problem with this case, as with other

fee cases, is that the Supreme Court has yet to give us

coherent guidance about how to determine the reasonable-

ness of fee awards under Title VII and similar fee-shifting

statutes. In this, we share the majority's frustration, if

not its solution. In particular, we do not yet know under

what circumstances to award a contingency enhancement,

nor do we know whether the degree of enhancement

allowed by the courts merely reflects prevailing market

rates or actually creates the relevant market forces by

defining the extent to which economic risk will be

compensated. In our view, the proper answers to these

questions ultimately must come from Congress.

Logically, of course, the size of a contingency enhance-

ment should be determined in each case according to the

degree of risk actually incurred by the prevailing attor-

ney. It is impossible to determine with any confidence

what a “reasonable fee” would be in any particular contin-

gency case without first assessing just how much risk the

*For example, as Judge Williams has pointed out, if courts gen-

erally allow a contingency enhancement of 50°:, lawyers will have

an economic incentive to bring only those cases in which the odds

of succeeding on the merits are at least two-to-one; if the court-

ordered enhancement figure rises to 100°, lawyers will presum.

ably bring any case in which the chances of winning are at least

50%. See King v. Palmer, 906 F.2d 762, 770 (D.C. Cir.) (Williams,

J., concurring in panel decision), vacated & reh'g en banc granted,

906 F.2d 772 (D.C. Cir. 1990).

43A

plaintiffs lawyer actually assumed.’ See, e.g., S. Spriser,

supra, § 8:10, at 320; Berger, supra, at 326. In this regard,

the Court’s apparent disapproval of case-by-case risk

assessment, see Delaware Valley Il, 483 U.S. at 731

(O'Connor, J., concurring in part and concurring in the

judgment); id. at 745-46 (Blackmun, J., dissenting), serves

only to frustrate the lower courts as they struggle to

shape fee awards that, consistent with legislative purpose,

will be “adequate to attract competent counsel” while

stopping short of “produciing) windfalls” for plaintiffs’

lawyers, see Blum, 465 U.S. at 897 (quoting S. Rep. No.

1011, 94th Cong., 2d Sess. 6 (1976)).

Although we share Justice O'Connor's concern that risk

enhancements not be calculated or awarded in “an arbi-

trary or unjust” manner, Delaware Valley Il, 483 U.S. at

732 (O'Connor, J., concurring in part and concurring in

the judgment), our experience suggests that the two-prong

test enunciated in the concurring opinion in Delaware

Valley Il cannot be applied without difficulty. The panel

‘In this respect, a risk enhancement arguably should not

encompass hours of labor for which compensation was secure. In

the instant case, the argument could well be made that the risk

of nonpayment incurred by Ms. King’s counsel virtually vanished

after this court decided the merits in Ms. King’s favor in 1985.

In King v. Palmer, 778 F.2d 878 (D.C. Cir. 1985), this court

reversed the District Court’s entry of judgment for the defendants

and remanded the matter with instructions “to enter judgment for

Ms. King and to determine an appropriate remedy.” Jd. at 882

(footnote omitted). “At a minimum,” we noted, “it appears that the

appropriate remedy in this case should include the promotion of

Ms. King ... , her receipt of back pay, and a full consideration

of any further relief.” Jd. at 882 n.7. Once Ms. King prevailed on

the merits of her main claim, the defendants recognize, she quali-

fied for an award of fees for “hours reasonably expended |thereaf-

ter! on remedial and similar ancillary matters.” See Brief for

Appellees/Cross-Appellants at 39. At least once it was established

that there would be no review of the merits in the Supreme

Court, there remained no risk of nonrecovery. Accordingly, the

District Court probably could have, within the bounds of its dis-

cretion, eliminated from the risk-enhancement calculation fees for

post-1985 work for which lodestar payment was certainly due.

44A

opinions in this case and in McKenzie v. Kennickell, 875

F.2d 330 (D.C. Cir. 1989), illustrate the two dilemmas

inherent in this test. First, although the affidavits in both

cases clearly establish that lawyers routinely demand the

equivalent of a significantly higher hourly fee if they

accept a case on a contingent-fee basis, those same affida-

vits also demonstrate that there is no one “market rate”

or contingency fee arrangement for all such cases.”

Instead, lawyers predictably evaluate the case of each

potential client independently and decide whether to

accept representation and what to charge based on their

estimation of the likelihood of success and the amount of

fees they will receive if they do, in fact, prevail.’ Conse-

quently, it is arguably unrealistic to assume that a court

can determine one specific level of enhancement that the

market demands in contingent-fee cases “as a class.”

Second, the so-called “substantial difficulties” test is a

confusing and potentially mischievous requirement. For

example, the requirements that the court determine the

amount of enhancement by looking at contingency cases

as a class, and that it look at the circumstances of the

particular case only to determine if the plaintiff would

have had substantial difficulty in obtaining counsel with-

out the enhancement, force trial judges to award contin-

gency enhancements on an all-or-nothing basis. The judge

“To the contrary, lawyers claimed to demand contingency

enhancements from 33°7 to 300° of their regular hourly rates.

Other lawyers did not specify a percentage, saying only that they

needed a “reasonable” risk enhancement to accept a Title VII case

on a contingent basis.

*As a result, the lawyer and client may tailor the terms of the

contract to address the risks and potential rewards involved in

each case. See, e.g., Declaration of Nora A. Bailey at 2 ‘Aug. 12,

1987), reprinted in J.A. 82, 83; Declaration of John R. Erickson

at 2 ‘Nov. 16, 1987), reprinted in J.A. 168, 169; Declaration of

Chester T. Kamin at 2-3 (Aug. 24, 1987), reprinted in J.A. 193,

194-95; Affidavit of David N. Webster at 6 (Sept. 20, 1982) (“The

greater the uncertainty of result, the greater the percentage fee

may be, albeit always within the limit of reasonableness.”),

reprinted in J.A. 289, 294.

45A

must either award the supposed “market” risk enhance-

ment or no enhancement at all; there is no leeway for the

court to decide that some enhancement is appropriate, but

that it should be less than the previously determined

“market” rate. Although the awards calculated by this

method are concededly uniform, they may be nonsensical

insofar as they overcompensate some plaintiffs with not-

so-risky cases while inadequately compensating others

with especially risky ones.

Consequently, we believe that district judges, in

enhancing the lodestar to account for the risk of nonpay-

ment, should have the same discretion that they have in

determiging other components of the reasonable fee.

Although no one formula ean be devised for all cases, we

think that district courts should consider both the size of

the attorney's investment in the case and the likelihood

that that investment would not be recouped. For one

thing, in determining whether a contingency enhance-

ment is necessary to enable the plaintiff to secure counsel,

the court could consider the amount that the lawyer

would lose if the plaintiff did not prevail. See Delaware

Valley Il, 483 U.S. at 747-48 & n.12 (Blackmun, J., dis-

senting); Wildman v. Lerner Stores Corp., 771 F.2d 605,

613-14 (1st Cir. 1985). The court thus might consider fac-

tors such as

what, if any, payment the attorneys would have

received had the suit not been successful; what, if

any, costs or expenses the attorneys would have

incurred if the case had been lost; the extent to which

the attorneys were required to compensate associates

and to carry overhead expenses without assurance of

compensation; and whether other attorneys refused

to take the case because of the risk of nonpayment.

Delaware Valley Il, 483 U.S. at 748 n.12 (Blackmun, J.,

dissenting). In our view, contingency enhancements are

appropriate if the lawyer has to expend a substantial

amount of her time and resources to litigate a case and

there is a significant risk of not prevailing (and thus of

not recouping her investment).

46A

For another thing, the court could consider the plain-

tiffs likely “ability to prove liability and damages ... [and

the legal precedent) either in favor of or against the theo-

ries put forth in the case” in order to determine the mag-

nitude of the risk that the plaintiff would not prevail. See

Wildman, 771 F.2d at 612. We recognize that it is impos-

sible to determine such risk with any mathematical preci-

sion, and we are cognizant of the supposed ethical

tensions such calculations may engender,'” but we do

» "The plurality summarized these concerns in Delaware Valley

|E}valuation of the risk of loss creates a potential conflict of

interest ——- — rr y and his client, for in order to

increase a fee award, a plaintiff's la must ex all of

the weaknesses and inconsistencies in his dents cnen, and

a defendant's attorney must either concede the strength of

the plaintiff's case in order to keep down the fee award, or

“allolw| the fee to be boosted by the contingency bonus |by|

insisting that the plaintiff's victory was freakish.”

483 U.S. at 721-22 (quoting Leubsdorf, supra, at 483). The latter

of these concerns is, of course, not an attorney-client conflict at

all, but simply a strategic dilemma for the defendant of the sort

that is not unknown in litigation. To the extent that the first rep-

resents a genuine potential for attorney-client conflict, we are

reassured by the confidence the Supreme Court has previously

expressed for lawyers’ ability to put their clients’ interests ahead

of their own. See Evans v. Jeff D., 475 U.S. 717, 727-28 (1986)

(“Although respondents contend that Johnson, as counsel for the

class, was faced with an ‘ethical dilemma’ when petitioners

offered him relief greater than that which he could reasonably

have expected to obtain for his clients at trial (if only he would

stipulate to a waiver of the statutory fee award), and although

we recognize Johnson's conflicting interests between pursuing

relief for the class and a fee for the Idaho Legal Aid Society, we

do not believe that the ‘dilemma’ was an ‘ethical’ one in the sense

that Johnson had to choose between conflicting duties under the

prevailing norms of professional conduct. Plainly, Johnson had no

ethical obligation to seek a statutory fee award. His ethical duty

was to serve his clients loyally and competently.”) (footnote omit-

ted; emphasis in original). If a lawyer can be trusted to serve his

client faithfully at the cost of his entire statutory fee award, we

feel sure he can be trusted to do so at the cost of some potential

diminution of it

47A

think that a district court judge, who is familiar with the

factual and legal development of the case, can differenti-

ate — after the fact — among cases based on the probabil-

ity of success in the beginning. As the plurality in

Delaware Valiey II recognized, in some cases there is very

little risk of not prevailing, and no enhancement for con-

tingency, or only a very small one, should be awarded.''

In other cases, the risk of not prevailing would be sub-

stantial and the enhancement should be correspondingly

enlarged."

In the absence of further guidance in this area from

Congress or the Supreme Court, however, we would

adhere to the only secure legislative directive available to

us — that assessments of what constitutes a “reasonable

attorney's fee” are to be left to the sound and reasoned

discretion of trial judges. A decade ago, this court, sitting

en banc, acknowledged the inherent lack of certainty in

this enterprise but concluded that such determinations

were nonetheless best left, as Congress intended, with

trial judges:

To the district court judge falls the task of calculat-

ing as closely as possible a contingency adjustment

with which fairly to compensate the successful attor-

ney. We have not ... lost sight of the fact that this

adjustment is inherently imprecise and that certain

estimations must be made. For example, it is difficult

in hindsight to determine the risk of failure at the

commencement of a lawsuit that ultimately proved to

be successful. Thus, we ask only that the district

court judges exercise their discretion as conscien-

''The plurality in Delaware Valley I! voted to reverse the 50°%

risk enhancement of lodestar fees incurred to enforce a consent

decree in part because there was not “a real risk of not persuad-

ing the District Court to enforce its own decree.” 483 U.S. at 730.

“In saying that the district court should have the discretion to

tailor the contingency enhancement to the particular case, we are

not saying that the experience of other similarly situated plain-

tiffs can be disregarded. To the contrary, we think that the suc-

cess rate of other plaintiffs who have filed suits based on similar

legal theories is a good indicator of the risk presented in the case.

48A

tiously as possible, and state their reasons as clearly

as possible.

Copeland, 641 F.2d at 893 (footnote omitted).'® We can

perceive no reason to depart from that conclusion today.

Because we discern nothing in the District Court's judg-

ment that would suggest an abuse of discretion justifying

reversal, and nothing at all supporting the majority’s new

legal rule, we dissent.

'The court further observed:

The setting of contingency adjustments is particularly

within the expertise of the District Judge. As the Supreme

Court said long ago, the District Court “has far better means

of knowing what is just and reasonable than an appellate

court can have.” Trustees v. Greenough, 105 U.S. 527, 537.

26 L.Ed. 1157 (1882).

Copeland, 641 F.2d at 893 n.24.

49A

otice: This opinion is subject to formal revision before publication un

=x Federal one or U.S.App.D.C. Reports. Users are requested to

Clerk of any formal errors in order that corrections may be made

— a bound volumes go to press.

Anited States Cort of Apprals <<

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 17, 1989 Decided June 26, 1990

No. 89-7027

Mase A. KING, APPELLANT

Vv.

JAMES F. PALMER, Director, D.C. DEPARTMENT OF

CORRECTIONS, et al.

No. 89-7028

Mase. A. KING

Vv.

JAMES F. PALMER, Director, D.C. DEPARTMENT OF

CORRECTIONS, et al., APPELLANTS

Appeals from the United States District Court

for the District of Columbia

(D.C. Civil Action No. 83-1980)

i coats be filed within 14 days after entry of judgment. The

——* b. with disfavor upon motions to file bills of costs out of time.

50A

Robert M. Adler for appellant/cross-appellee Mabel A.

King. Joel P. Bennett also entered an appearance for

Mabel A. King.

Donna M. Murasky, Assistant Corporation Counsel,

with whom

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.