Amicus Curiae Brief — Burlington v. Dague

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FILED ‘

No. 91-60 APR 13 1982

~ | OFFIGE OF THE Glwk

Supreme Court pe the Anited States

OcToBER TERM, 1991

CITY OF BURLINGTON,

g Petitioner,

DAGUE, et al.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

BRIEF OF THE LAWYERS’ COMMITTEE

FOR CIVIL RIGHTS UNDER LAW

AND THE WOMEN’S LEGAL DEFENSE FUND

AS AMICI CURIAE IN SUPPORT OF RESPONDENTS

ROGER E. WARIN

(Counsel of Record)

JERALD S. Howe, JR.

D. BENSON TESDAHL

STEPTOE & JOHNSON

1830 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 429-3000

Attorneys for Amici Curiae

Lawyers’ Committee and

April 18, 1992 Women’s Legal Defense Fund

(Additional Attorneys Listed on Inside Cover)

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QUESTION PRESENTED

Whether a court, in determining a reasonable attor-

ney’s fee award under one or more federal fee-shifting

statutes, may enhance the fee award above the lodestar

amount in order to reflect the fact that the attorney had

taken the case on a contingent-fee basis, thus assuming

the risk of receiving no attorney’s fees at all.

(i)

ii

LIST OF PARTIES BELOW

CITY OF BURLINGTON, Petitioner

ERNEST DAGUE, SR., ERNEST DAGUE, JR., BETTY

DAGUE, AND ROSE A BESSETTE, Respondents

TABLE OF CONTENTS

INTEREST OF AMICI CURIAE ....

STATEMENT OF THE CASE

SUMMARY OF ARGUMENT |.

I.

Il.

FEDERAL FEE-SHIFTING STATUTES DO

NOT FORECLOSE RISK ENHANCEMENTS

IN APPROPRIATE CASES IN WHICH THE

PREVAILING PARTY HAS BEEN REPRE-

SENTED BY COUNSEL ON A CONTINGENT

FEE BASIS... oe.

A. The Lesiduttee 3 Riceey Of The Civil Rights

Attorney's Fees Award Act Of 1976 Reflects

Congressional Endorsement Of Risk En-

hancement As An Appropriate Consideration

Under That And Similar Fee-Shifting Stat-

B. ae Comat: Leitentten Cons Peter Bo 1008.

Federal Courts Frequently Allowed Risk

Enhancement, And Such Cases Have Been

Referenced With Approval By Congress...

C. In Cases After 1976, Federal Courts Have

Often Continued To Allow Risk Enhance-

ment, And Congress Has Never Attempted

To Overrule Such Cases In Any Fee-Shifting

Legislation Enacted During This Time

D, File Comst Has Alsenty Receantend Tint

a ny

A “REASONABLE ATTORNEY’S FEE” OF-

TEN REQUIRES A RISK ENHANCEMENT

FOR A CASE TAKEN BY A LAWYER ON A

CONTINGENT FEE BASIS

(iii)

11

12

15

iv

TABLE OF CONTENTS—Continued

v

TABLE OF AUTHORITIES

Page

A. Empirical Evidence Of Markets For Legal emacs —-

Services Demonstrates That The Availability Alberti v. Klevenhagen, 896 F.2d 927, modified, 903

Of Risk Enhancement In Appropriate Cases F.2d 352 (5th Cir. 1990), cert. granted in part,

Is Often One Elemient Of A “Reasonable RE SE ES SS 14

[EEE EERE SS en 16 Alyeska Pipeline Serv. Co. v. Wilderness Soc’y,

ETT Ee 12

- Nome Of The Policy Arguments Leveled Angoff v. Goldfine, 270 F.2d 185 (1st Cir. 1959) 9

Against Risk Enhancement Is Of Any Force A m4 of Trade, 372 F. Su 1349

To Rebut The Congressional Mandate For (ND. = me PP. .

ae ee oe = Blum v. Stenson, 465 U.S. 886 (1984) 21

aa WY ee ee eee Bouman v. Block, 940 F.2d 1211 (9th Cir. 1991),

cert. denied, 112 S. Ct. 640 (1991) 14, 19

CONCLUSION nanan nennennenneenneeneeeenneenneennene 3 Burlington v. Dague, 112 S. Ct. 964 (1992) 5

Cherner v. Transitron Elec. Corp., 221 F. Supp. 55

(D. Mass. 1963), modified and aff'd sub nom.

Green v. Transitron Elec. Corp., 326 F.2d 492

Craig v. Department of Health & Human Servs.,

(ist Cir. 1964)... PS SOO i 15

864 F.2d 324 (4th Cir. 1989) 14

Crumbaker v. Merit Sys. Protection Bd., 827 F.2d

ES ES Se 14

Dague v. Burlington, 935 F.2d 1348 (2d Cir. 1991),

cert. granted in part, 112 S. Ct. 964 (1992)... 14

Delaware Valley Citizens’ Council for Clean Air v.

Pennsylvania, 762 F.2d 272 (8d Cir. 1985),

modified, 478 U.S. 546 (1986), rev'd, 483 US.

. EI RT a Bi Se 8

Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir.

OB ES APR 5 SEE NES SEK a 4

Fadhl v. City and County of San Francisco, 859

. F.2d 649 (9th Cir. 1988) . 19

Friends of the Earth v. Eastman Kodak Co., 884

F.2d 295 (2d Cir. 1987)... .... al ieainrteen 4

Green v. Transitron Elec. Corp., 326 F.2d 492 (1st

Cir. 1964) . = i)

Hensley v. Eckerhart, 461 US. 44 (1983) . Sere _ 21,22

In re Osofsky, 50 F.2d 925 (S.D.N.Y. 1931) _......... 9

Jacobs v. Mancuso, 825 F.2d 559 (1st Cir. 1987). 14

vi

TABLE OF AUTHORITIES—Continued

Page

Johnson v. Georgia Highway Express, Inc., 488

a 8

Kelly v. Matlack, Inc., 908 F.2d 978 (3d Cir.

eee ee ee 14

King v. Palmer, 906 F.2d 762 (1990), vacated and

reversed en banc, 950 F.2d 771 (D.C. Cir. 1991),

petition for cert. pending, 60 U.S.L.W. 3615

(U.S. filed Feb. 21, 1992) 000000. 18

King v. Palmer, 950 F.2d 771 (D.C. Cir. 1991),

petition for cert. pending, 60 U.S.L.W. 3615

(US. filed Feb. 21, 1992) 000 10, 11, 14

Lattimore v. Oman Constr., 868 F.2d 487 (11th

EE a Se eee 19

Lewis v. Coughlin, 801 F.2d 570 (2d Cir. 1986) 4

Lindy Bros. Builders, Inc. v. American Radiator &

Standard Sanitary Corp., 487 F.2d 161 (1973),

aff'd in part and vacated in part, 540 F.2d 102

RS ee 9

Martin v. University of South Alabama, 911 F.2d

A ee 14

Morris v. American Nat'l Can Corp., 941 F.2d 710,

opinion withdrawn and substituted, 962 F.2d

200 (8th Cir. 1991) ... 14

National Treasury Employees Union + 0. . Niaon, 621

F.2d 317 (D.C. Cir. 1975) .. i)

Pacific Coast Agricultural Ezport ‘Ase’n v. . Sunkist

Growers, Inc., 526 F.2d 1196 (9th Cir. 1975),

cert. denied, 4256 U.S. 959 (1976)... 9

Patterson v. United States, 359 U.S. 495 (1959) . 13

Pennsylvania v. Delaware Valley Citizens’ Council

for Clean Air, 478 U.S. 546 (1986) ... x

Pennsylvania v. Delaware Valley Citizens’ Council

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

Perotti v. Seiter, 985 F.2d 761 (6th Cir. 1991)... 14

Peter v. UMW Welfare & Retirement Fund of 1950,

517 F.2d 1276 (D.C. Cir. 1975) 000 9

Smith v. Freeman, 921 F.2d 1120 (10th Cir. 1990) . 14

Soto v. Adams Elevator Equip. Co., 941 F.2d 543

(7th Cir. 1991) 00. eet 22” ied 14

vii

TABLE OF AUTHORITIES—Continued

Page

Stanford Daily v. Zurcher, 64 F.R.D. 680 (N.D.

Cal. 1974), aff'd, 550 F.2d 464 (9th Cir. 1977),

rev'd on other grounds, 436 U.S. 547 (1978) .... x

United States v. South Buffalo Ry., 333 U.S. 771

ea ETE EE NE ES 18

Wildman v. Lerner Stores Corp., 771 F.2d 605 (1st

ETS Nee R

STATUTES

33 U.S.C. § 1866(d) (1988) 00, 3

i passim

42 U.S.C. § 6972 (e) (1988) 0... 3

ACTS

Comprehensive Older Americans Act Amendments

of 1978, 42 U.S.C. § 6104(e) (1) (1988)... 12

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

a 12

National Cooperative Research Act of 1984, 15

U.S.C. § 4808(a) (1) (1988) 000 o 12

LEGISLATIVE MATERIALS

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

S. Rep. No. 1011, 94th Cong., 2d Seas. 6 (1976),

reprinted in 1976 U.S.C.C.A.N. 5908, 5913... 8, 9,12

MISCELLANEOUS

2 Mary F. Derfner & Arthur D. Wolf, Court

Awarded Attorney Fees § 16.04[4] (1991) 10, 11

1 Mary F. Derfner & Arthur D. Wolf, Court

Awarded Attorney Fees © 5.01[1] (1985) 11

ae a eT, _—

IN THE

Supreme Court of the United States

OCTOBER TERM, 1991

No. 91-810

CITY OF BURLINGTON,

‘“ Petitioner,

DAGUE, et al.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

BRIEF OF THE LAWYERS’ COMMITTEE

FOR CIVIL RIGHTS UNDER LAW

AND THE WOMEN’S LEGAL DEFENSE FUND

AS AMICI CURIAE IN SUPPORT OF RESPONDENTS

INTEREST OF AMICI CURIAE

The Lawyers’ Committee for Civil Rights Under Law

(“Lawyers’ Committee”) is a nationwide civil rights or-

ganization that was formed in 1963 by leaders of the

American Bar Association, at the request of President

Kennedy, to provide legal representation to African

Americans who were being deprived of their civil rights.

The national office of the Lawyers’ Committee and its

local affiliates have represented the interests of minorities

and women in hundreds of class actions relating to em-

ployment and housing discrimination, voting rights, equal-

ization of municipal services, and school desegregation.

2

The Women’s Legal Defense Fund (“WLDF”) is a

national advocacy organization that was founded in 1971

to advance the rights of women in the areas of work and

family. WLDF works to challenge gender discrimination

in the workplace through litigation of significant sex-dis-

crimination cases, public education, and lobbying for im-

provements in the equal employment opportunity laws and

their interpretation before Congress and the federal

agencies charged with their enforcement.

Over one thousand members of the private bar, includ-

ing former Attorneys General, former presidents of the

American Bar Association and other leading lawyers,

have assisted the Lawyers’ Committee in litigating cases

arising, inter alia, under the Civil Rights Acts of 1866,

1877, and 1964, the Voting Rights Act, and the Fair

Housing Act. Similarly, since its inception, the WLDF

has relied almost exclusively on members of the private

bar to litigate sex-discrimination cases, and lawyers rep-

resenting clients in WLDF’s sex-discrimination cases have

brought scores of cases under Title VII. Pursuant to

the terms of WLDF’s tax exemption, these lawyers re-

ceive no compensation for their time except that provided

pursuant to fee-shifting statutes, primarily Title VII of

the Civil Rights Act of 1964.

These and numerous other federal statutes allow a pre-

vailing plaintiff to recover reasonable attorney’s fees.

The purpose of these statutes is to attract lawyers to as-

sist those with viable claims who could not otherwise af-

ford legal counsel, by providing reasonable compensation.

Indeed, it has been WLDF’s experience that lawyers will-

ing to litigate employment discrimination cases are scarce;

without the strong incentives the fee-shifting statutes

provide, many of those who would challenge discrim-

ination would find it extremely difficult to secure legal

representation. Thus, the interpretation of federal fee-

shifting statutes is of critical importance to the vindica-

tion of civil rights through the jederal courts—the goals

of the Lawyers’ Committee and the WLDF.

3

STATEMENT OF THE CASE

Respondents are owners of land adjacent to a landfill

operated by petitioner City of Burlington, Vermont (the

“City”). Respondents brought suit in federal district

court against the City, alleging that the City was oper-

ating the landfill in violation of a variety of federal and

state laws.

In April 1985, respondents retained William W. Pear-

son and other attorneys to represent them in their law-

suit against the City. The attorneys agreed to take the

case with their fee totally contingent on winning. The

contingency fee arrangement was used, in part, because

respondents had no funds with which to pay for lega!

services. In addition, respondents would have faced ex-

treme difficulty in finding an experienced counsel willing

to represent them with the payment of any fee totally

contingent on winning.’

Following a bench trial, the district court entered judg-

ment for respondents on some, but not all, of their claims.

Pet. App. 59-117a. The district court subsequently awarded

attorney’s fees to respondents pursuant to 42 U.S.C. § 6972

(e) (1988) and 33 U.S.C. §13865(d) (1988)—the fee-

shifting provisions of the Resource Conservation and Re-

covery Act (“RCRA”) and the Clean Water Act, respec-

tively. Pet. App. 130-34a.* The court awarded respondents

their “lodestar” fee ($198,027.50) and also added a 25%

contingency enhancement ($49,506.87), which was in-

tended to compensate respondents’ attorney for having

assumed the risk that he would receive nothing had re-

spondents not prevailed. The district court explained its’

1See Affidavits of Heather Briggs and William Pearson in

Support of “Plaintiffs’ Supplemental Application for Award of

Fees and Costs,” Civil Action No. 85-269, Appellate No. 90-7544, at

339-42 and 371-76 (filed June 25, 1991).

* The two provisions are identically worded and provide for an

award of “reasonable attorney and expert witness fees” to any

party, whenever appropriate.

4

decision to award a contingency enhancement by stating

that respondents’ “risk of not prevailing was substantial

under the facts here” and that “absent an opportunity for

enhancement, [respondents] would have faced substantial

difficulty in obtaining counsel of reasonable skill and com-

petence in this complicated field of law.” Pet. App. 132-

33a.

The City appealed the entire judgment, including the

award of attorney’s fees and the risk enhancement, to the

United States Court of Appeals for the Second Circuit.

On June 12, 1991, the Second Circuit affirmed the deci-

sion of the district court in all respects. Pet. App. 1-37a.

With respect to the contingency enhancement issue, the

court below analyzed this Court’s split, 4-1-4 decision in

Pennsylvania v. Delaware Valley Citizens’ Council for

Clean Air, 483 U.S. 711 (1987) (“Delaware Valley II’’),

and concluded that none of the three opinions in that case

was controlling as a matter of law. Pet. App. 36. Turn-

ing then to its own precedents, the Second Circuit stated

that the critical inquiry was “whether ‘[w]lithout the

possibility of a fee enhancement . . . competent counsel

might refuse to represent clients thereby denying them

effective access to the courts.’” Pet. App. 37a (quoting

Friends of the Earth v. Eastman Kodak Co., 834 F.2d 295,

298 (2d Cir. 1987) and Lewis v. Coughlin, 801 F.2d 570,

576 (2d Cir. 1986)). Applying that standard, the ap-

peals court upheld the district court’s decision to award a

25% contingency enhancement. /d.

On November 18, 1991, the City filed its petition for a

writ of certiorari, seeking review of all aspects of the

Second Circuit’s decision. The Court granted the petition,

limiting the question to:

May a court, in determining a reasonable attorney’s

fee award under [the two environmental protection

statutes], enhance the fee award above the lodestar

amount in order to reflect the fact that the attorneys

had taken the case on a contingent-fee basis, thus

5

assuming the risk of receiving no attorney’s fees at

all?

Burlington v. Dague, 112 S. Ct. 964 (1992) (No. 91-

810).

SUMMARY OF ARGUMENT

Five years ago in Delaware Valley II, a majority of

the justices of this Court concluded that a risk enhance-

ment may be awarded in appropriate circumstances. In

recognition of that fact, all nine justices joined in one of

three separate opinions, each of which attempted to ar-

ticulate the circumstances when such awards are appro-

priate and how they should be calculated. The plurality

opinion of four justices acknowledged that a majority

of the justices would permit risk enhancement in ap-

propriate cases; that plurality opinion, which would have

denied such enhancements, also addressed the standards

for such awards, stating that “enhancement for the risk

of non-payment should be reserved for exceptional cases

where the need and justification ... are readily ap-

parent and are supported by evidence in the record and

specific findings by the courts.” Jd. at 728 (White, J.,

joined by Rehnquist, C.J., Powell, J., and Scalia, J.). Jus-

tice O’Connor, joining with the plurality to deny the re-

quested enhancement in that case, nevertheless agreed

with four dissenting justices that “Congress did not intend

to foreclose consideration of contingency in setting a rea-

sonable fee under fee-shifting provisions . .. .” 483

U.S. at 731 (O’Connor, J., concurring in part and con-

curring in the judgment). The four other justices, in

dissent, plainly expressed the view that contingency en-

hancement is available in appropriate cases. Jd. at 755

(Blackmun, J., dissenting, joined by Brennan, J., Mar-

shall, J., and Stevens, J.).

The majority of this Court was correct in 1987, and

the answer can be no different today: Congress recog-

nized that a reasonable attorney’s fee may often include

a reasonable contingency enhancement. The purpose of

6

fee-shifting statutes is to attract sufficient competent

counsel to take cases which Congress has determined vin-

dicate important public or personal rights. The statutory

standard of “a reasonable attorney’s fee” means one suf-

ficient to attract such counsel. This standard leaves courts

with appropriate discretion to determine what is reason-

able under the circumstances of a particular case. A

lodestar fee calculated using a reasonable non-contingent

hourly rate, for hours reasonably incurred, obviously in-

cludes two key elements of the reasonable overall at-

torney’s fee. But in a case taken on a contingent fee

basis—with a risk that the lawyer will receive a frac-

tional fee or no fee at all in the even of an unsuccess-

ful outcome—compensation for this risk of non-payment

is also eminently reasonable.

Simply put, lawyers will normally be unwilling to ac-

cept cases which present the risk of no payment, for the

same fee they would charge if payment is non-contingent.

If the evidence establishes that an unenhanced lodestar

fee based on the same hourly rate a lawyer charges for

non-contingent cases is inadequate to attract sufficient

competent counsel to take meritorious cases on a contin-

gent fee basis, such a fee is not reasonable. Even peti-

tioner appears to recognize this conclusion, through its

repeated assertions that the risk of non-payment is prop-

erly to be encompassed within the setting of the hourly

rate used to determine the lodestar fee amount. Pet. Br.

at 9, 17-18. In this sense, petitioner and respondents dif-

fer chiefly as to the point in the overall mathematical

formula at which risk enhancement is to be accomplished.

What is agreed is that additional compensation for tak-

ing a case on a contingent fee basis, whether through

an increased hourly rate or an overall contingency en-

hancement, is often necessary to make a fee reasonable.

While the fractured opinions in Delaware Valley II

have led to some uncertainty in the lower federal courts

as to how to calculate a contingency enhancement, courts

across the Nation have been largely in agreement on one

7

empirical point. That point is that in the marketplace

for legal services, litigating lawyers seek and obtain ad-

ditional compensation (that is, above normal non-

contingent rates time normal hours) for cases taken on

a contingency basis. This is an established economic fact

in areas of practice not implicated by federal fee-shifting

Statutes. Permitting risk enhancement under fee-shifting

statutes simply affords an equal level of compensa-

tion that recognizes this economic fact. This Court has

consistently looked to the marketplace for evidence of

reasonableness in statutory attorney’s fees, and the ques-

tion of risk enhancement should be no different.

This Court should recognize this basic economic reality

and re-affirm the availability of contingency enhancement

when the market requires it as part of a reasonable at-

torney’s fee. Only this conclusion will place such cases

on an equal footing with other cases in the legal services

marketplace, and fulfill the congressional purpose of en-

suring that those persons with legitimate grievances but

limited financial means have effective access to the courts

for vindication of their rights.

ARGUMENT

I. FEDERAL FEE-SHIFTING STATUTES DO NOT

FORECLOSE RISK ENHANCEMENTS IN APPRO-

PRIATE CASES IN WHICH THE PREVAILING

PARTY HAS BEEN REPRESENTED BY COUNSEL

ON A CONTINGENT FEE BASIS

There is nothing in the enactment of the panoply of

federal fee-shifting statutes to suggest a foreclosure of

risk enhancement in appropriate cases. Certainly, noth-

ing in the text of these statutes supports such a con-

clusion. Nor does anything in the actions of Congress

leading up to the enactment of these laws even remotely

Suggest such a result. To the contrary, risk enhancement

was considered by Congress and was effectively endorsed

for statutory fee awards.

A. The Legislative History Of The Civil Rights Attor-

ney’s Fees Award Act Of 1976 Reflects Congressional

Endorsement Of Risk Enhancement As An Appro-

priate Consideration Under That And Similar Fee-

Shifting Statutes

The legislative history of the Civil Rights Attorney’s

Fees Awards Act of 1976 (“Section 1988”), 42 U.S.C.

§ 1988 (1988), contains detailed congressional guidance

on calculating reasonable attorney’s fees, and it is per-

suasive authority for the interpretation of similarly-

worded federal fee-shifting statutes. In that legislative

history, Congress stated that the case of Johnson v.

Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.

1974), contained “appropriate standards” for determin-

ing a reasonable attorney’s fee under federal fee-shifting

statutes. See S. Rep. No. 1011, 94th Cong., 2d Sess. 6

(1976), reprinted in 1976 U.S.C.C.A.N. 5908, 5913;

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

Among the twelve factors cited in Johnson for determin-

ing a reasonable attorney’s fee is “whether the fee is

fixed or contingent.” 488 F.2d at 714-19 (factor num-

ber 6).

Moreover, as an example of a decision correctly apply-

ing the Johnson factors, Congress expressly cited the

district court decision in Stanford Daily v. Zurcher, 64

F.R.D. 680 (N.D. Cal. 1974), aff'd, 550 F.2d 464 (9th

Cir. 1977), rev'd on other grounds, 436 U.S. 547 (1978),

in which the district court concluded that it “must in-

crease the [lodestar amount] . . . to reflect the fact that

the attorneys’ compensation, at least in part, was contin-

gent in nature.” Jd. at 686. Thus, the legislative history

5 See, e.g., Pennsylvania v. Delaware Valley Citizens’ Council for

Clean Air, 478 U.S. 546 (1986) (“Delaware Valley I") ; Pennsylvania

v. Delaware Valley Citizens’ Council for Clean Air, 483 U.S. at 737

(dissent); Wildman v. Lerner Stores Corp., 771 F.2d 605, 611-12

(Ist Cir. 1985); Delaware Valley Citizens’ Council for Clean Air v.

Pennsylvania, 762 F.2d 272, 275 (3d Cir. 1985), modified, 478 U.S.

546 1019 (1986), rev'd, 483 U.S. 711 (1987). Accord Pet. Brief at

11; Brief for the United States as Amicus Curiae Supporting Peti-

tioner (“U.S. Br.”) at 6.

of Section 1988 strongly suggests that Congress intended

contingency enhancement to be a proper consideration in

arriving at a “reasonable” attorney’s fee in cases involv-

ing that and similar fee-shifting statutes.

B. In Complex Litigation Cases Prior To 1976, Federal

Courts Frequently Allowed Risk Enhancement, And

Such Cases Have Been Referenced With Approval

By Congress

Congress also stated in the legislative history of Sec-

tion 1988 that attorney’s fees should be equivalent to

those awarded “in other types of equally complex Federal

litigation, such as antitrust cases... .” S. Rep. No. 1011

at 6, reprinted in 1976 U.S.C.C.A.N. at 5913. A review

of such cases is instructive on the issue of risk en-

hancement.

In antitrust fee-shifting cases decided prior to the

enactment of Section 1988, federal courts awarding at-

torney’s fees frequently permitted an upward adjustment

in the fee to compensate for the contingency of payment.‘

Similarly, in other types of complex federal litigation

where fee-shifting is permitted, federal courts, in deci-

sions dating as early as 1931, frequently took account of

the contingency of payment in determining a reasonable

fee.” As this long line of cases indicates, “[t]he con-

* See, e.g., Lindy Bros. Builders, Inc. v. American Radiator &

Standard Sanitary Corp., 487 F.2d 161, 168 (1973), aff'd in part

and vacated in part, 540 F 2d 102 (3d Cir. 1976) ; Detroit v. Grinnell

Corp., 495 F.2d 448, 471 (2d Cir. 1974); Pacific Coast Agricultural

Export Ass'n v. Sunkist Growers, Inc., 526 F.2d 1196, 1210 (9th Cir.

1975), cert. denied, 425 U.S. 959 (1976) ; Arenson v. Board of Trade,

372 F. Supp. 1349 (N.D. Ill. 1974).

® See, e.g., National Treasury Employees Union v. Nixon, 521 F.2d

317, 322 (D.C. Cir. 1975) (labor law class action): Peter v. UMW

Welfare & Retirement Fund of 1950, 517 F.2d 1275, 1290 (D.C. Cir.

1975) (en banc) (labor law class action) ; Green v. Transitron Elec.

Corp., 326 F.2d 492, 496 (1st Cir. 1964) (securities class action) ;

Angoff v. Goldfine, 270 F 2d 185, 189 (1st Cir. 1959) (securities class

action); Jn re Osofsky, 50 F.2d 925, 927 (S.D.N.Y. 1931) (bank-

ruptcy).

10

cept of enhancing a court awarded fee to reflect con-

tingency stems from the earliest days of court awarded

attorney fees in federal courts ....”* In fact, this is

precisely what Congress was referring to when it men-

tioned complex federal litigation in the legislative history

of Section 1988.

Congress’ approving reference to antitrust and com-

plex litigation cases in the legislative history of Section

1988 is thus further evidence of its acceptance of risk

enhancement as a consideration in determining reason-

able attorney’s fees under federal fee-shifting statutes.

The empirical evidence across the Nation, as found by

federal district courts, is that the legal services market-

place does in fact compensate lawyers who have taken

antitrust and other cases on a contingency basis, and

have prevailed, at more than their normal hourly rates.’

*2 Mary F. Derfner & Arthur D. Wolf, Court Awarded Attorney

Fees { 16.04[4), at 16-154 (1991) (citations omitted) (“Derfner &

Wolf”).

* For instance, in King v. Palmer, 950 F.2d 771 (D.C. Cir. 1991)

(en banc), petition for cert. pending, 60 U.S.L.W. 3615 (U.S. filed

Feb. 21, 1992) (No. 91-1370), there were a number of affidavits in-

troduced on this point. The joint appendix in that case (cited below

as “King Rec.”) has been lodged with this Court in connection with

the petition for certiorari. Each of the relevant King affidavits

shows that the lawyer and his or her firm accept contingent fee

cases only if there is a reasonable prospect of at least doubling their

standard hourly fees in the event of a successful outcome: King

Rec. 82-83 (Decl. of Nora Bailey: tax disputes; multiple of two or

three); King Rec. 133 (Decl. of John Clifford: general practice

including employment and personal injury cases ; accepts contingency

case only when there is a prospect of recovering triple the normal

fees, if successful) ; King Rec. 146-49 (Decl. of Vincent Curtis, Jr. :

comparative license proceedings before the FCC) : King Rec. 165-66

(Decl. of Steven Engleberg: civil litigation including personal in-

jury, commercial, and malpractice cases) : King Rec. 191-92 (Decl.

of Peter Kadzik: various types of complex federal litigation) : King

Rec. 193-200 (Decl. of Chester Kamin: partial contingent fee ar-

rangement in antitrust case); King Rec. 276-77 (Decl. of Arnold

Spevak: represent of tenant associations in condominium conver-

11

Continued availability of risk enhancement under federal

fee-shifting statutes would merely treat cases under those

Statutes as the marketplace already treats other, com-

parable cases. Clearly, Congress wanted attorneys to be

compensated on the same basis as in other contingency

cases.

C. In Cases After 1976, Federal Courts Have Often

Continued To Allow Risk Enhancement, And Con-

gress Has Never Attempted To Overrule Such Cases

In Any Fee-Shifting Legislation Ennanced During

Contingency enhancement of the lodestar under federal

fee-shifting statutes has continued to be widely

by federal courts in the years since the Civil Rights At-

torney’s Fees Awards Act was passed.* Over those same

years, Congress has also continued to enact a variety of

fee-shifting statutes on various subjects.” In all of this

sions, and representation of a commercial client in contesting a local

tax assessment); King Rec. 296-98 (Decl. of Robert Weinberg:

firm’s contingent practice in tort cases) ; King Rec. 300-01 (Decl. of

Kirkwood White: rezoning cases) : King Rec. 303-06 (Decl. of

Henry Zapruder: tax disputes and litigation ).

* See, e.g., Delaware Valley 11, 483 U.S. at 741 n.6 (Blackmun, J.,

dissenting). See also 2 Derfner & Wolf, supra, at 16-156, noti-¢

that “the federal courts have been unanimous in awarding increa: °

fees or in holding that the fee for contingent litigation may be

increased to account for the risk that counsel will recover no fee

at all.” As support for the above statement, Derfner & Wolf cite

nearly twenty post-1976 cases covering all of the federal circuits.

Id. n.162. But see King v. Palmer, 950 F.2d 771 (D.C. Cir. 1991),

petition for cert. pending, 60 U.S.L.W. 3615 (filed Feb. 21, 1992)

(No. 91-1370).

* Presently, there are attorney fee provisions covering over 200

separate causes of action in the United States Code, and over two-

thirds of those federe! attorney fee provisions fall into the fee-

shifting category. Furthermore, since 1964, the number of fee-

shifting statutes in the United States Code has more than doubled.

See 1 Derfner & Wolf, supra, © 5.01[1], at 5-8, 5-6, 5-19 (1985).

Many of these fee-shifting statutes were passed after the enact-

ment of Section 1988 by Congress in 1976. Sce, ¢.g., National Co-

12

legislative activity, it is remarkable that in not one of

its post-1976 fee-shifting statutes has Congress ever pro-

hibited risk-based enhancement, nor has Congress, in the

legislative history of those same fee-shifting statutes,

ever commented with disfavor on any of the numerous

federal cases in which contingency enhancement was al-

lowed. If Congress had wished to foreclose the use of

contingency enhancement as an appropriate factor in

court-awarded attorney’s fees, it could have (and no

doubt would have) done so. This could easily have been

accomplished either by direct language in the fee-

shifting statutes themselves ® or by an appropriate com-

ment in the legislative history of the statutes." That

Congress kh»: ot precluded the widespread practice of

risk-based enhancement in any of the many post-1976 fee-

shifting statutes is once again strong evidence of its ac-

ceptance of contingency enhancement as an appropriate

factor in arriving at a reasonable attorney’s fee. In

sum, petitioner is now asking this Court to shut a door

that Congress chose to leave open.

D. This Court Has Already Recognized That Congress

Has Not Foreclosed Contingency Enhancement

Amici are far from the first to conclude that Congress

has not precluded consideration of risk enhancement in

appropriate fee-shifting cases. Indeed, this Court has it-

operative Research Act of 1984, 15 U.S.C. §4308(a)(1) (1988);

Comprehensive Older Americans Act Amendments of 1978, 42

U.S.C. § 6104(e) (1) (1988).

” When it wants to, Congress knows how to limit fee awards, as

in a per hour dollar limit. See Equal Access to Justice Act, 28

U.S.C. § 2412(d)}(2)(A) (1988) (in suits against United States,

“attorney fees shal! not be awarded in excess of $75 per hour”).

"! See, e.g., 8. Rep. No. 1011 at 4, reprinted in 1976 U.S.C.C.A.N.

at 5911-12, in which Congress specifically noted that its enactment

of the Civil Rights Attorney's Fees Award Act of 1976 was “an

appropriate response to the A/yeska decision,” which created “anom-

alous gaps” in the provision of attorney’s fees in civil rights cases.

Congress was referring to the case of Alyeska Pipeline Serv. Co. v.

Wilderness Soc’y, 421 U.S. 240 (1975).

13

self reached this conclusion. In Delaware Valley Il, Jus-

tice O’Connor specifically concluded that “Congress did

not intend to foreclose consideration of contingency in

setting a reasonable fee under fee-shifting provisions

-..+.” 483 U.S. at 731. The plurality opinion acknowl-

edged the existence of a majority in favor of risk enhance-

ment by commenting on the circumstances under which

it should be permitted. /d. at 728. Although Justice

O’Connor was writing for herself, the dissenting opinion

of Justice Blackmun, which was joined by three other

justices, specifically embraced Justice O’Connor’s conclu-

sion that risk enhancement had not been foreclosed by

Congress.

Thus, a clear majority of this Court has already ac-

knowledged that Congress has never foreclosed considera-

tion of contingency enhancement in an appropriate case.

There is no reason for this fundamental conclusion to be

reversed five years later."* The lower federal courts have

had some difficulty in applying the 4-1-4 decision in Dela-

ware Valley II, but they have not found fault with the

principle that risk enhancement should be available in

The dissent also recognized that the plurality opinion was not

inconsistent with such a conclusion. In addition to embracing Jus-

tice O’Connor’s conclusion, the dissent noted that the “plurality

also recognizes, after a fashion, that fee-shifting statutes might be

‘construed to permit supplementing the lodestar in appropriate

cases by paying counsel for assuming the risk of nonpayment.’ ”

Id. at 735 n.1.

8 Id. at 735 n.1 (citing with approval Justice O’Connor’s recog-

nition that “Congress did not interd to foreclose enhancements for

contingency in the setting of reasonable attorney's fees.”’)

“The doctrine of stare decisis is especially applicable in cases

involving the interpretation of statutory law. See, e.g., Patterson

v. United States, 359 U.S. 495, 496 (1959): United States v. South

Buffalo Ry., 333 U.S. 771, 774-75 (1948) (“When the questions

are of statutory construction, not of censtitutional import, Congress

can rectify our mistake, if such it was, or change its policy at any

time, and in these circumstances reversal is not readily to be

made.”).

14

some cases. To the contrary, in the wake of Delaware

Valley II all circuits had granted risk enhancements in

appropriate cases.'" These same circuits had also rejected

1S After having concluded in several previous opinions that con-

tingency enhancements were available in appropriate cases under

the standards announced by Justice O’Connor, in King v. Palmer,

the D.C. Circuit reversed direction and concluded, contrary to the

views of every other circuit, that contingency enhancements are

never permitted. King v. Palmer, 950 F.2d 771 (D.C. Cir. 1991)

(en banc), petition for cert. pending, 60 U.S.L.W. 3615 (U.S. filed

Feb, 21, 1992) (No. 91-1370). In numerical order, the other cir-

cuit’s decisions approving contingency enhancements are: Jacobs

v. Mancuso, 825 F.2d 559, 561 (1st Cir. 1987) (disallowing con-

tingency, 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”) (citation omitted); Dague v. Bur-

lington, 935 F.2d 1343, 1360 (2d Cir. 1991), cert. granted in part,

112 S. Ct. 964 (1992); Kelly v. Matlack, Inc., 903 F.2d 978, 986-87

(3d Cir. 1990) (mandatory prerequisite to award of an enhance-

ment is that plaintiff “establish that without adjustment it would

have faced substantial difficulties in finding counsel in the...

relevant market”) (citations omitted); Craig v. Department of

Health & Human Servs., 864 F.2d 324, 328 (4th Cir. 1989) (dicta) ;

Alberti v. Klevenhagen, 896 F.2d 927, 935-36 (5th Cir.) (enhance-

ment available when district court “make[s] the findings required

by Justice O’Connor’s concurrence in Delaware Valley II” which is

considered “the authoritative pronouncement of the Court”), modi-

fied, 903 F.2d 352 (5th Cir. 1990), cert. granted in part, 112 5. Ct.

964 (1992): Perotti v. Seiter, 935 F.2d 761, 765 (6th Cir. 1991) ;

Soto v. Adams Elevator Equip. Co., 941 F.2d 543, 553 (7th Cir. 1991) ;

Morris v. Americen Nat'l Can Corp., 941 F.2d 710, 715 (“Justice

O’Connor’s opinion in Delaware Valley II is the current legal

standard for awarding contingency enhancements.”), opinion with-

drawn and substituted, 952 F.2d 200 (8th Cir. 1991); Bouman v.

Block, 940 F.2d 1211, 1235-36 (9th Cir. 1991), cert. denied, 112 §. Ct.

640 (1991) (upholding fee on the basis of district court’s findings

matching Justice O’Connor’s test); Smith v. Freeman, 921 F.2d

1120, 1123 (10th Cir. 1990); Martin v. University of South Ala-

bama, 911 F.2d 604, 612 (11th Cir. 1990); Crumbaker v. Merit

Sys. Protection Bd., 827 F.2d 761 (Fed. Cir. 1987) (“the Board on

remand shall consider the degree to which the relevant market com-

pensates for contingency and whether any enhancement is necessary

15

contingency enhancement when the trial court concluded

that plaintiff had not made the necessary market show-

ing, usually under Justice O’Connor’s standard. When

risk enhancements were awarded, they were based largely

on the large and accumulating body of evidence, and trial

court findings, that risk enhancement is necessary in

many parts of the country to attract competent counsel

to take congressionally-identified classes of cases on a

contingent fee basis.

II. A “REASONABLE ATTORNEY’S FEE” OFTEN RE-

QUIRES A RISK ENHANCEMENT FOR A CASE

en BY A LAWYER ON A CONTINGENT FEE

In light of Congress’ clear indication that compensation

in fee-shifting cases should be equal to other types of

cases, the question then becomes a relatively simple and

practical one. Under statutes providing for the award of

“a reasonable attorney’s fee” to a prevailing party, the

issue is whether it is reasonable to permit risk en-

hancement when the case has been taken on a contingent

fee basis. Or conversely, the question is whether it is

reasonable to expect what one esteemed trial judge ob-

served years ago that “[n]o one expects’”—that “a lawyer

whose compensation is contingent upon his success

[should] charge, when successful, as little as he would

charge a client who in advance had agreed to pay for his

services, regardless of success.”’ ™*

Amici submit that under the statutory standard of a

“reasonable attorney’s fee,” it is inconceivable that risk

to bring the fee within a range that would attract competent

counsel”).

1 Cherner v. Transitron Elec. Corp., 221 F. Supp. 55, 61 (D.

Mass, 1963) (Wyzanski, J.) (emphasis added), modified and aff'd

sub nom. Gree v. Transitron Elec. Corp., 326 F.2d 492 (1st Cir.

1964),

16

enhancement can never be available—regardless of the

prevailing market conditions and the substantial diffi-

culties that could confront impecunious plaintiffs with

meritorious claims seeking to retain competent counsel.

An absolute prohibition of risk enhancement is simply

not reasonable as applied to a number of possible situa-

tions. If, for instance, the relevant market were to place

such a premium on the risk of non-payment that it would

be impossible for deserving plaintiffs to find lawyers

absent the prospect of risk enhancement, then some such

enhancement would plainly be required by statute. In ad-

dition, cases of substantial difficulty in the absence of risk

enhancement should also qualify under the statutory

standard of a “reasonable attorney’s fee.”

A. Empirical Evidence Of Markets For Legal Services

Demonstrates That The Availability Of Risk En-

hancement In Appropriate Cases Is Often One Ele-

ment Of A “Reasonable Attorney’s Fee”

Whether viewed as a matter of economics or one of

common sense, it seems obvious that risk enhancement is

entirely reasonable in order to place contingent fee cases

on an equal footing with those cases in which the plaintiff

has agreed to pay his or her lawyer, win-or-lose. Even

those amici in favor of reversal have conceded that :

Free legal services [those provided on a contingent

fee basis] confer a substantial benefit on a client. In

exchange for that benefit, it is reasonable for the at-

torney to charge a fee to a client, if the case is won,

that is greater than the fee a fee-paying client would

be charged for the time expended.”

Indeed, petitioner itself concedes the fundamental reason-

ableness of risk enhancement, arguing that the risk of

non-payment is properly to be subsumed within the setting

of the hourly rate used to generate the lodestar fee

17 Brief of Amici Curiae, The District of Columbia and Several

of the States, In Support of Reversal (“D.C. Br.”) at 11.

17

amount."* Pet. Br. at 9, 17-18. This is an unconventional

ordering of the mathematical formula for determining the

“reasonable attorney’s fee,” but the end result of such an

approach would be perfectly consistent with risk enhance-

ment as it has been applied by the lower federal courts

following Delaware Valley II. Whether taken into account

at the beginning or the end of the process, the risk of

non-payment in a contingent fee case calls for enhance-

ment of the lodestar fee amount when the market requires

such enhancement in order to arrive at a reasonable fee.

This Court need not rely, however, on logic or intuition

alone. There is a wealth of economic evidence available

that in a number of legal services markets across the

Nation, risk enhancement is commonplace. Furthermore,

this extensive and uncontradicted body of evidence relates

not only to practice in fields covered by fee-shifting stat-

utes, but also to practice in other, comparable areas of

complex federal litigation."

The case of King v. Palmer, an employment discrimina-

tion case arising in the District of Columbia market, is

illustrative. In that case, the prevailing plaintiff intro-

duced scores of affidavits on the risk enhancement issue

from many different sources, including: (1) counsel in

the underlying case; (2) other lawyers, specifically re-

garding the case; (3) local Title VII and employment law

lawyers in private practice; (4) lawyers who practice in

other areas of complex federal litigation in the District of

Columbia, sometimes on a contingent fee basis; (5)

18 There is absolutely no evidence that normal hourly rates in-

clude a factor for the risk of nonpayment for losing cases. In

fact, the unrebutted evidence in many cases establishes that normal

hourly rates are based exclusively on the notion that they are non-

contingent with no factor for the risk of nonpayment because of

unsuccessful litigation.

1% Thus, contrary to the concerns of some, this evidence is not

merely demonstrative of judicial fee-shifting determinations driving

the marketplace, instead of vice versa. See U.S. Br. at 19-21: D.C.

Br. at 5, 24 (citation omitted).

18

lawyers from civil rights organizations; (6) pro se plain-

tiffs in similar cases, who were turned down in seeking

competent counsel on a contingency basis; and (7) a rep-

resentative of the bar lawyer referral service. The affi-

ants represented the billing practices of more than 500

lawyers from aimost every facet of the local legal prac-

tice—large firms, solo practitioners, partners, associates,

and public interest practitioners—and a significant part

of the entire District of Columbia bar.

Furthermore, those affidavits contained exactly the type

of market-oriented, empirical evidence that Justice O’Con-

nor’s test in Delaware Valley II requires to make an ac-

curate determination. All of the evidence in King v.

Palmer showed that lawyers who took contingent fee cases

in the District of Columbia during the relevant time

frame required at least 100 percent risk enhancement as

an inducement to do so. This was demonstrated to be

true both of employment law litigators* and of lawyers

who handle other types of complex federal litigation not

reached by fee-shifting statutes.*" This evidence led to

the D.C. Circuit’s panel decision in favor of risk enhance-

ment of 100 percent in that case, a decision that was sub-

sequently overturned only by the legal conclusion of that

court en banc that contingency enhancement is never

available, as a matter of law, King v. Palmer, 906 F.2d

762 (1990), vacated and reversed en banc, 950 F.2d 771

(D.C. Cir. 1991), petition for cert. pending, 60 U.S.L.W.

3615 (U.S. filed Feb. 21, 1992) (No. 91-1370). Under

King, even if the parties had stipulated or the trial court

had found that no lawyers would take meritorious cases

on a contingent fee basis without the possibility of an

20 See King Rec. 92-93 (Decl. of Joel Bennett) ; King Rec. 168-69

(Decl. of John Erickson: at least 100 percent enhancement) ; King.

Rec. 266 (Decl. of Gary Simpson: would accept a discrimination

case on a contingent basis only with a 100 percent contingency

bonus).

21 See supra at 10-11, note 7.

19

enhancement if successful, no contingency enhancement

could be awarded.”

Notably, market-based evidence comparable to that in

the District of Columbia has been brought forward else-

where as well. See, e.g., Bowman v. Block, supra, 940 F.2d

at 1236 (9th Cir. 1991) (Los Angeles: remanding for de-

termination of multiplier between 1.3 and 2.0) ; Lattimore

v. Oman Constr., 868 F.2d 437, 489 (11th Cir.), reh’g

denied en banc, 875 F.2d 874 (11th Cir. 1989) (Alabama:

100% risk enhancement); Fadhl v. City and County of

San Francisco, 859 F.2d 649, 650-51 (9th Cir. 1988)

(San Francisco: multiplier of 2.0).

In contrast to the hard evidence available favoring the

availability of contingency enhancement, petitioner and

amici arguing in petitioner’s support rely only on bald

factual assertions. For instance, they proclaim that:

* “Compensation at a reasonable hourly rate for all

hours worked will be sufficient to attract competent

counsel.” Pet. Br. at 18-19.

* “A contingency enhancement over the lodestar is

not necessary to enable plaintiff with a case involv-

ing a fair chance of success to obtain competent

counsel.” U.S. Br. at 17.

* “There is no shortage of lawyers willing to take

their cases on a non-fee-paying basis.” Brief of

the Washington Legal Foundation and the Allied

Education Foundation as Amici Curiae In Support

of Petitioner (“WLF Br.’’) at 17.

Tellingly, none of these contentions is accompanied by any

factual support—either from the record below or from

*2 Even if the trial court made a factual finding based on uncon-

tradicted evidence from the local market that lawyers universally

charge higher hourly rates for contingent cases (i.e. an enhance-

ment) than for cases in which payment is certain, King holds that

contingency enhancements under statutes which require award of

“reasonable attorney’s fees” are barred as a matter of law—

concluding that regardless of the facts, a risk enhancement can

never be reasonable.

20

elsewhere. Indeed, the only factual references contained

in petitioner’s entire brief are two strained criticisms of

the affidavits filed below by respondents. Pet. Br. at 22-

23 n.3. The Brief for the United States is entirely devoid

of any empirical evidence. This should not be surprising,

for the available evidence thoroughly contradicts these

hypotheses. The factual showings made in cases such as

King v. Palmer are unrebutted as to the need for risk

enhancement as an inducement to competent lawyers to

take many cases on a contingent fee basis. In fact, in the

instant case, in King v. Palmer, and in virtually every

other reported case, the losing defendant has been unable

to identify even a single lawyer, much less a pool of com-

petent attorneys, willing to take such cases solely on a

contingent lodestar fee basis with no possibility of risk

enhancement.

Having no evidence of their own upon which to draw,

petitioner and its supporters resort to wholesale attack on

the large body of evidence regarding the need for con-

tingency enhancement in many cases. Affidavits of prac-

ticing lawyers, the evidentiary staple of all other aspects

of attorney’s fees litigation, are scorned as inherently

unreliable. For instance, amici maintain that affidavits

submitted in risk enhancement cases “should be viewed

with an extremely critical eye.” * In effect, the critics of

these affidavits invite this Court to make an across-the-

board credibility determination, reversing the factual

findings of dozens of federal trial courts—and to do so

with no explanation of what other evidence might be

more suitable or persuasive.

Yet evidence of the case intake and billing practices of

litigating lawyers is absolutely essential to what is “rea-

sonable” in the way of risk enhancement under the many

fee-shifting statutes that adopt the reasonableness stand-

28 WLF Br. at 13. The District of Columbia asserts flatly that

attorney affidavits “are anecdotal in content and self-interested in

motivation.” D.C. Br. at 17.

|

|

21

ao ge the a = the financial services market-

at issue, it is logical to look in large part to

financial institutions for evidence of their economic be-

havior. When agricultural markets are at issue, it is

sensible to look to farmers for such evidence. There is no

reason it should be any different for legal services and

lawyers. Trial judges are perfectly capable of assessing

the cory — weight of attorney affidavits in this

area, as handle a multitude of other t

economic evidence. ie

In truth, what petitioner and its supporters resist is

less the form of the evidence than the pant conclu-

sion dictated by it. Based on the evidence taken from

various legal services markets across the country, many

trial courts have reached a common factual conclusion,

which has been affirmed by almost all of the courts of

appeals. That inescapable fact is that the prospect of

significant risk enhancement is often necessary as an

inducement to lawyers to take on cases on a contingent

fee basis. The marketplace is the most reliable benchmark

of reasonableness, and should be the primary source of

guidance in determining the availability and magnitude

of contingency enhancements. A market-oriented approach

permits judges to make their decisions on risk enhance-

ment based on the economic evidence available, rather than

requiring them to substitute their own values for the

private valuations that markets exist to balance out. For

other issues arising under fee-shifting statutes, a market-

oriented approach has predominated. See, e.g., Blum v.

Stenson, 465 U.S. 886, 895-96 (1984) (reasonable hourly

rate is the prevailing market rate in the relevant legal

** Perhaps respondents would prefer to place on prevailing plain-

tiffs the burden of producing formal econometric studies of the

marketplace for legal services. But the empirical data for such

studies would still come largely from lawyers. In addition. there

is No reason to go to such lengths and expense. As this Court has

held, “({a) request for attorney's fees should not result in a second

major litigation.” Hensley v. Eckerhart, 461 US. 424, 437 (1983).

community); Hensley v. Eckerhart, 461 U.S. at 4387

(number of hours reasonably expended determinable by

reference to “billing judgment” common in private prac-

tice). The market is equally trustworthy with respect

to risk enhancement.

B. None Of The Policy Arguments Leveled Against

Risk Enhancement Is Of Any Force To Rebut The

Congressional Mandate For The Award Of “Reason-

able Attorney's Fees”

Petitioner and its supporting amici raise a number of

policy arguments against the availability of risk enhance-

ment under any circumstances. None of these contentions

is well grounded, and certainly none of them is of suffi-

cient weight to override the congressional mandate for

the awarding of “reasonable attorney’s fees” to prevail-

ing plaintiffs in statutorily selected cases.

The first policy argument is that risk enhancement com-

pensates “persons who were not ‘prevailing’ parties.” *

The theory underlying this argument appears to be that

contingency enhancement is not truly compensation for

the case at hand, but compensation for other cases (un-

identified) which may already have been lost. U.S. Br.

at 14. But this is all legerdemain. No one is asking that

anyone but “prevailing plaintiffs” be entitled to any at-

torney’s fees awards under fee-shifting statutes, let alone

enhancement of such awards. Moreover, the availability

of fee enhancement for the risk of non-payment does not

depend under existing law, and .would not depend on

whether the plaintiff has ever been involved in other

cases, winning or losing. The connection to actual losing

cases is only hypothetical. Nor does or would risk enhance-

ment depend on the prior involvement of the prevailing

plaintiff's lawyer in lost cases—risk enhancement could

2231U.S. Br. at 18 (removing initial capitalization from argument

heading); see also Pet. Br. at 10 (“results in paying plaintiff's

counsel for losing efforts”); D.C. Br. at 8 (risk enhancement as “a

defense-paid subsidy for unsuccessful litigation”) .

a

and should be available for a lawyer’s first case, if other-

wise appropriate. Properly understood, the purpose of

risk enhancement is not to create a form of back-door

compensation for other, undeserving efforts—it is to com-

pensate for the risk that the instant case might have been

lost and no fee paid to the lawyer.

The second policy argument is that contingency en-

hancement is improper because it inevitably compensates

the prevailing plaintiff for the risk of winning or losing

the individual case: “ ‘if the courts cannot . . . directly

[consider the risks undertaken by an individual fee ap-

plicant], how can it be appropriate to do so vicariously

through the eyes of lawyers who declined the case.’ ” *

This contention, however, misses the key point of Justice

O’Connor’s pivotal concurrence in Delaware Valley II:

that risk enhancement should be “based on the difference

in market treatment of [contingency] cases as a class,

rather than on an assessment of the ‘riskiness’ of any

particular case.” 483 U.S. at 731 (O’Connor, J., concur-

ring in part and concurring in the judgment).”” There

is a substantial difference between a trial court taking

it upon itself to determine the risks of a particular case,

especially ex post facto, and that same trial court weigh-

ing evidence of how the market evaluates the risk of non-

payment in certain types of cases. Case-by-case review

would be far more burdensome, far less reliable, and far

more open to subjectivity on the part of the trial judge.

Review of market evidence obviates the need for the trial

judge to engage in such a particularized evaluation. Un-

der Justice O’Connor’s approach, the market is looked to

—as it should be—as the process for the filtering and

balancing of interests and demands of various parties.

Market-oriented analysis, regarding contingent fee prac-

tice both under fee-shifting statutes and in other areas

where such statutes do not apply, provides an objective

**WLF Br. at 14 (quoting King v. Palmer, 950 F.2d 771, 780

(1991); see also id. at 8-9; U.S. Br. at 22.

27 See also id. at 730-31 (plurality opinion) ; id. at 745-46 (dissent).

basis for reasonable and consistent determinations of risk

enhancement.

Last, it is contended that “there is no middle ground

between routinely awarding contingency enhancements or

not awarding them at all.” WLF Br. at 16-17. If this

were true, there would be a far greater regularity of risk

enhancement than has been experienced to date. A num-

ber of courts have either declined to award risk enhance-

ment or have awarded relatively minimal percentages of

risk enhancement. Variations between different markets

for legal services—in geography, in classes of cases, and

in time—have proven to be significant. The lower courts

remain free at all times to take such market differences

into account, and to rule accordingly based on the evi-

dence presented. The frequency and magnitude of risk

enhancement will ultimately depend upon the evolution

of legal services marketplaces and on the evidence pre-

sented in specific cases."

If, over time, the prevailing circumstance emerges across

the nation that competent attorneys are willing to take on

cases on a contingent fee basis and without the prospect

of risk enhancement, and this can be proven in court,

then risk enhancement will gradually be rendered obsolete.

But, in fact, the trend has been exactly in the opposite

direction. For instance, the record in King v. Palmer is

replete with evidence establishing that the number of at-

torneys willing to accept contingent Title VII cases has

diminished greatly. No one would welcome more than

2 It is conceivable, too, that market practice could evolve so as

to build a risk enhancement factor into the hourly rate only for

those cases taken on a contingent fee, with that hourly rate then

used to set the “lodestar” fee amount without need for further risk

enhancement. But that is certainly not the current practice. Fur-

thermore, there is absolutely no evidence that lawyers’ normal

hourly rates, set for clients who pay win-or-lose, contain any im-

bedded factor for contingency enhancement. Neither such clients,

nor defendants in fee-shifting cases litigated on a non-contingent

fee basis, would tolerate the use of such increased rates for their

cases, in which there is no risk of non-payment based on adverse

outcomes.

25

amici the day when all plaintiffs with legitimate griev-

ances are readily able to locate lawyers willing to take

their cases to court. This Court, however, should not ig-

nore the current state of affairs and anticipate such a

day. Risk enhancement must continue to be available

when the market requires such enhancement as part of a

reasonable attorney’s fee.

CONCLUSION

For the foregoing reasons, the Court should reaffirm

the availability of risk enhancement for certain attor-

ney’s fees awards under federal fee-shifting statutes, and

should affirm the decision and order of the United States

Court of Appeals for the Second Circuit.

Respectfully submitted,

RoGer E. WARIN

(Counsel of Record)

JERALD S. Howe, Jr.

D. BENSON TESDAHL

STEPTOE & JOHNSON

1330 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 429-3000

DONNA LENTHOFF HERBERT M. WACHTELL

WOMEN’S LEGAL Co-Chairman

DEFENSE FUND WILLiaM H. Brown, III

2000 P Street, N.W. Co-Chairman

Washington, D.C. 20036 NORMAN RADLICH

(202) 986-2600 Trustee

BARBARA R. ARNWINE

THOMAS J. HENDERSON

RICHARD T. SEYMOUR

LAWYERS’ COMMITTEE FOR

Crvi_ RiGHTs UNDER Law

1400 Eye Street, N.W.

Washington, D.C. 20005

(202) 371-1212

Attorneys for Amici Curiae

Lawyers’ Committee and

April 13, 1992 Women’s Legal Defense Fund