REVISED AUGUST 14, 2012

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 11-10774

In the Matter of: PILGRIM’S PRIDE CORP, formerly known as WLR Foods,

Incorporated, formerly known as AgraTech Seeds, Incorporated, formerly known

as Wampler Foods, Incorporated, formerly known as Gold Kist, Incorporated,

formerly known asPilgrimsPride Corporation of Georgia, Incorporated, formerly

known as GK Peanuts, Incorporated, formerly known as WLR, formerly known

as Pilgrims Pride Corporation of Virginia, Incorporated, formerly known as

Pilgrims Pride Corporation of Delaware, Incorporated,

Debtor,

-----------------------------------------------

CRG PARTNERS GROUP, L.L.C.,

Appellee,

v.

WILLIAM T. NEARY, In His Capacity as the United States Trustee for Region

6,

Appellant.

Appeals from the United States Bankruptcy 

Court for the Northern District of Texas

United States Court of Appeals

Fifth Circuit

F I L E D

August 10, 2012

Lyle W. Cayce

Clerk
No. 11-10774

2

Before STEWART, ELROD, and SOUTHWICK, Circuit Judges.

JENNIFER WALKER ELROD, Circuit Judge: 

In this case, we must determine whether the Supreme Court’s decision in

Perdue v. Kenny A. ex rel Winn, 130 S. Ct. 1662 (2010)—which curtailed the

authority of district courts to award fee enhancements in federal fee-shifting

cases—unequivocally, sub silentio overruled our circuit’s precedent in the

bankruptcy arena. We hold that it did not. Therefore, we AFFIRM. 

I.

On December 1, 2008, Pilgrim’s Pride Company and six of its affiliates

(collectively, the “Debtors”) filed for chapter 11 bankruptcy protection. At that

time, the Debtors’ prospects for a successful reorganization were far from

promising. They had lost approximately $1 billion in the fiscal year preceding

their bankruptcy filing and were operating at a negative annual cash flow of over

$300 million. The Debtors anticipated that unsecured creditors would receive,

at best, a debt for equity swap, and that pre-petition shareholders would be left

empty-handed. 

Upon receiving the bankruptcy court’s approval, the Debtors retained CRG

Partners Group, LLC to provide William Snyder as their chief restructuring

officer and other personnel to assist in their chapter 11 restructuring process.

“CRG was highly effective throughout th[e] [restructuring] process and

facilitated a number of changes, including the replacement of certain executive

officers and the development and implementation of a new business model.”

CRG Partners, LLC v. U.S. Tr., 445 B.R. 667, 668 (N.D. Tex. 2011). 

With CRG’s assistance, the Debtors prepared a bankruptcy plan that was

confirmed by the bankruptcy court on December 10, 2009, just over a year after

the petition date. The plan was an absolute success. It provided for a 100%

return to all of the Debtors’ secured and unsecured creditors, and the Debtors’

pre-petition shareholders received $450 million in new equity interests.
No. 11-10774

1Throughoutthis opinion, we also refer to fee “enhancements” as “upwardadjustments”

of the lodestar. 

3

Once the plan was confirmed, CRG sought the bankruptcy court’s approval

of $5.98 million in fees calculated in accordance with the lodestar method. CRG

also requested approval of a $1 million fee enhancement1thatthe Debtors’ board

of directors had recommended be paid to CRG. No party objected to the $5.98

million fee request, and that request was approved by the bankruptcy court. The

United States Trustee did object, however, to the $1 million fee enhancement,

“acknowledging the excellent performance of CRG but nevertheless asserting

that CRG had already received adequate compensation.” CRG Partners, 445

B.R. at 668. No other party filed an objection to CRG’s request for a $1 million

fee enhancement.

After holding an evidentiary hearing, the bankruptcy court found that

CRG had provided superior services that contributed to the outstanding results

in the Debtors’ bankruptcy case. Specifically, the court stated that:

[T]he result in this case [was] rare and exceptional. One hundred

percent dividend cases are rare in Chapter 11, and rarer still in

large cases such as this. And what made this case truly exceptional

was thatit emerged from bankruptcy in about a year, and the Court

can’t begin to estimate how much was saved in administrative costs

due to this quick emergence from bankruptcy.

It also concluded “the evidence showed that Mr. Snyder contributed significantly

to the superior results in” the case. Nonetheless, the bankruptcy court denied

CRG’s enhancement request because CRG failed to satisfy the strict

requirements of the Supreme Court’s 2010 holding in Perdue, 130 S. Ct. at 1662.

CRG appealed the decision to the district court, which held that the

bankruptcy court erred in treating the federal fee-shifting decision in Perdue as

binding authority in a bankruptcy proceeding. CRG Partners, 445 B.R. at

672–73. Notably, the district court opined that “[i]t is one thing for a court to
No. 11-10774

4

seek guidance from a case decided in a different context; it is another thing

entirely for a court to allow such a case to displace its previously-established

precedent.” Id. at 672. The district court reversed the bankruptcy court’s

decision and remanded the case for further proceedings. Id. at 673. 

On remand, the bankruptcy court relied on its prior decision in In re

Mirant Corp., 354 B.R. 113 (Bankr. N.D. Tex. 2006), which held thatfour specific

factors must be satisfied in order for a professional to receive an enhancement

pursuant to 11 U.S.C. § 330(a). The bankruptcy court awarded CRG the

$1 million fee enhancement after finding that it had met all four Mirant factors.

The bankruptcy court then certified its order for direct appeal to this court, and

we granted the parties’ motions for leave to appeal the order pursuant to 28

U.S.C. § 158(d)(2). 

II.

TheTrustee raises one issue on appeal. He contends that the district court

erred in reversing the bankruptcy court because Perdue narrowly circumscribed

the bankruptcy court’s discretion to grant fee enhancements. The Trustee

requests that we reverse the bankruptcy court’s order under Mirant and

“reinstate the bankruptcy court’s order entered on June 21, 2010 denying the

requested bonus under Perdue.”

CRG counters that Perdue was not intended to upend our settled

precedent concerning fee enhancements in bankruptcy proceedings. CRG

requests that we affirm the bankruptcy court’s order under Mirant because

“Perdue does not control fee enhancement requests in bankruptcy cases.” 

Before we can reach the merits of the parties’ arguments, we first must

discuss our:(1) framework for analyzing applications for compensation under the

Bankruptcy Code; and (2) case law specifically addressing fee enhancements in

bankruptcy proceedings. This discussion is critical to resolving the ultimate

question presented in this case: whether Perdue extends to bankruptcy cases.
No. 11-10774

5

A.

We begin with a brief review of the relevant precepts that have governed

the compensation of professionals employed by the estate for over three decades.

First, in the year preceding the enactment of the Bankruptcy Code in 1978, we

held that bankruptcy courts must address the following twelve Johnson factors

when determining reasonable attorney’s fees under the Bankruptcy Act of 1898:

(1) The time and labor required; (2) The novelty and difficulty of the

questions; (3) The skill requisite to perform the legal service

properly; (4) The preclusion of other employment by the attorney

due to acceptance ofthe case; (5) The customary fee; (6) Whether the

fee is fixed or contingent; (7) Time limitations imposed by the client

or other circumstances; (8) The amount involved and the results

obtained; (9) The experience, reputation, and ability of the

attorneys; (10) The “undesirability” of the case; (11) The nature and

length of the professional relationship with the client; (12) Awards

in similar cases.

In re First Colonial Corp. of Am., 544 F.2d 1291, 1298–99 (5th Cir. 1977)

(quoting Johnson v. Ga. Highway Express, Inc. 488 F.2d 714, 717–19 (5th Cir.

1974)). We explained that, although the Johnson factors were established in the

context of the fee-shifting provision of Title VII of the Civil Rights Act of 1964,

“the guidelines we established there are equally useful whenever the award of

reasonable attorneys’ fee is authorized by statute.” Id. at 1299. 

We also recognized, however,thatthe unique nature of proceedings under

the Bankruptcy Act of 1898 merited consideration of two additional factors. Id.

First, in light of the “strong policy of the Bankruptcy Act that estates be

administered as efficiently as possible,” bankruptcy courts were required to

award fees that were “at the lower end of the spectrum of reasonableness.” Id.

(quotation omitted). Second, we advised bankruptcy courts to remain vigilant

that there were “a number of peculiarities of bankruptcy practice such as the

award of ad interim allowances and the possibility that some officers ofthe court

may be furnishing services to the estate in more than one capacity which could
No. 11-10774

2 Although Lawler was decided nine years after the Bankruptcy Code’s enactment, the

debtor’s bankruptcy case was initiated before its enactment, and the case was therefore

governed by the Bankruptcy Act. Id. at 1209–10. 

3 Professionals’ fees may also be awarded pursuant to 11 U.S.C. § 328. See In re Texas

Sec., Inc., 218 F.3d 443, 445 (5th Cir. 2000) (“We have interpreted § 328 to limit the power of

the bankruptcy court to alter the compensation of professionals: ‘[t]he court must therefore set

the compensation award either according to § 328 or § 330. If prior approval is given to a

certain compensation, § 328 controls and the court starts with that approved compensation,

modifying it only for developments unforeseen when originally approved.’” (quoting In re Nat’l

Gypsum Co., 123 F.3d 861, 862–63 (5th Cir. 1997))). However, both parties agree that the

provision governing CRG’s compensation is § 330. Section 328 is inapplicable in this case. 

6

lead to the award of duplicative fees or compensation for non-legal services if

overlooked.” Id.

Next, in another case decided under the Bankruptcy Act, we held that the

lodestar method for calculating reasonable attorney’s fees applied in the

bankruptcy arena. In re Lawler, 807 F.2d 1207, 1211 (5th Cir. 1987).2 The

lodestar amount “is equal to the number of hours reasonably expended

multiplied by the prevailing hourly rate in the community for similar work.” Id.

We further explained that, after calculating the lodestar, bankruptcy courts

retained the discretion to adjust the lodestar upwards or downwards to reflect

their consideration of the Johnson factors. Id. 

This framework was then slightly modified for cases governed by the

Bankruptcy Code. In addition to considering the lodestar and the Johnson

factors, bankruptcy courts became required to consult 11 U.S.C. § 330(a), the

Bankruptcy Code provision governing compensation of professionals employed

by the estate.3 See In re Cahill, 428 F.3d 536, 539–40 (5th Cir. 2005); In re

Fender, 12 F.3d 480, 487 (5th Cir. 1994). As discussed in II.B., infra,the original

language of § 330(a) was—and, despite subsequent minor amendments, has

remained—quite similar to the rule that governed professional compensation

under the Bankruptcy Act. The only major change effected by the Code was the

abandonment of the Act’s “economy of the estate” consideration. See 3 Collier
No. 11-10774

7

on Bankruptcy § 330.03[2] (Alan N. Resnick & Henry J. Sommer eds., 16th ed.

2009) (“In other respects [unrelated to the ‘economy of the estate’ factor], most

of the criteria [between the Act and the Code] are the same . . . .”). This enabled

bankruptcy professionals to earn fees comparable to those earned by nonbankruptcy practitioners. See 11 U.S.C. § 330(a)(3)(F); In re Babcock & Wilcox

Co., 526 F.3d 824, 827 (5th Cir. 2008) (“Prior to being amended in 1978, this

statute favored economy of the estate over competitive compensation to

attorneys for the debtors.”) (citation and internal quotation marks omitted).

The current version of § 330(a) provides, in relevant part, that a

bankruptcy court may award “a professional person employed under section 327

or 1103 . . . reasonable compensation for actual, necessary services.” 11 U.S.C.

§ 330(a)(1)(A). It also sets forth a non-exclusive list of factors for courts to

examine when determining the reasonableness of fees requested by

professionals: 

In determining the amount of reasonable compensation to be awarded to

an examiner, trustee under chapter 11, or professional person, the court

shall consider the nature, the extent, and the value of such services,

taking into account all relevant factors, including–

(A) the time spent on such services;

(B) the rates charged for such services;

(C) whether the services were necessary to the administration of, or

beneficial at the time at which the service was rendered toward the

completion of, a case under this title;

(D) whether the services were performed within a reasonable amount

of time commensurate with the complexity, importance, and nature of

the problem, issue, or task addressed;

(E) with respect to a professional person, whether the person is board

certified or otherwise has demonstrated skill and experience in the

bankruptcy field; and
No. 11-10774

4 Section 330(a)(3)’s list of factors was not found in the original version of the statute

but was included in a 1994 amendment to the Code. See Bankruptcy Reform Act of 1994, Pub.

L. No. 103-394, § 224, 108 Stat. 4106 (1994). 

5 We explained the rationale for this broad discretion in Lawler: 

[T]his Court emphasizes that the bankruptcy court has broad discretion in

determining compensation for services performed in a bankruptcy proceeding

and that its exercise of discretion will not be disturbed unless it has been

abused. In re Consolidated Bancshares, Inc., 785 F.2d 1249, 1252 (5th Cir.

1986). The bankruptcy court is more familiar with the actual services

performed and “has a far better means of knowing what is just and reasonable

than an appellate court can have.”ù First Colonial, 544 F.2d at 1298 (citation

omitted).

807 F.2d at 1211.

8

(F) whether the compensation is reasonable based on the customary

compensation charged by comparably skilled practitioners in cases

other than cases under this title.

11 U.S.C. § 330(a)(3); see also In re Lan Assocs. XI, L.P., 192 F.3d 109, 123 (3d

Cir. 1999) (explaining that “in spite of the factors enumerated in § 330, many

courts continue to employ the twelve factors set forth in Johnson,” and holding

that “the factors enumerated in section § 330(a) [sic] are not all-inclusive”).4

Following the Bankruptcy Code’s enactment, we made clear that the

lodestar, Johnson factors, and § 330 coalesced to form the framework that

regulates the compensation of professionals employed by the bankruptcy estate.

See Cahill, 428 F.3d at 539–40. Under this framework, bankruptcy courts must

first calculate the amount of the lodestar. Id. at 539. After doing so, bankruptcy

courts “then may adjust the lodestar up or down based on the factors contained

in § 330 and [their] consideration of the twelve factors listed in Johnson.” Id. at

540. We also have emphasized that bankruptcy courts have “considerable

discretion” when determining whether an upward or downward adjustment of

the lodestar is warranted.5 Cahill, 428 F.3d at 540.
No. 11-10774

9

However, as we held in Fender, bankruptcy courts must remain mindful

that“[f]our of the Johnson factors—the novelty and complexity ofthe issues,the

special skill and experience of counsel, the quality ofthe representation, and the

results obtained from the litigation—are presumably fully reflected in the

lodestar amount.” Fender, 12 F.3d at 488 (quoting Shipes v. Trinity Indus., 987

F.2d 311, 320 (5th Cir. 1993)). Accordingly, those four Johnson factors may only

form the basis for an upwardly adjusted fee in rare and exceptional

circumstances: “[a]lthough upward adjustments of the lodestar figure based on

these [four] factors are still permissible, such modifications are proper only in

certain rare and exceptional cases supported by both specific evidence on the

record and detailed findings by the lower courts.” Id. (quoting Shipes, 987 F.2d

at 320); see also Cahill, 428 F.3d at 540 (bankruptcy court must “explain the

weight given to each factor that it considers and how each factor affects its

award”). 

B.

With this framework in mind, we now turn to our previous decisions that

specifically addressed the reasonableness of fee enhancements in the bankruptcy

context. First, in Rose Pass Mines, Inc. v. Howard, which was decided under the

Bankruptcy Act, we determined that the bankruptcy court did not abuse its

discretion in awarding a 16% enhancement to the fee earned by the debtor’s

attorney. 615 F.2d 1088, 1092 (5th Cir. 1980). After consulting the Johnson

factors, the bankruptcy court had awarded the enhancement because the

debtor’s attorney: (1) provided “excellent services” that helped produce an

“unusually good result”; (2) “evidenced a very high degree of expertise and

competence in various areas of the law”; and (3) obtained “outstanding results”

in the form of a 100% dividend to all creditors. Id. at 1090–92, 1091 n.6, n.8.

Based on these findings, we held that the 16% fee enhancement constituted

reasonable compensation under the Bankruptcy Act. Id. at 1092. 
No. 11-10774

6 The bankruptcy court had awarded a 130% enhancement of the lodestar, which we

reduced to 70%. Id. at 1212, 1214. 

10

Similarly, in Lawler, we held that it was reasonable under Johnson to

enhance the lodestar by 70% based primarily on the contingent structure of

counsel’s employment as well as on the unusual nature of the case, novel legal

questions presented, exceptional results obtained for the estate’s creditors, and

counsel’s “outstanding professional accomplishment” in handling the case. 807

F.2d at 1213. This high praise and significant fee enhancement was justified

because the estate’s attorneys transformed a valueless estate into one worth

approximately $29 million. Id. at 1209. The substantial and unexpected

recovery enabled the confirmation of a bankruptcy plan that provided for a 100%

return to all creditors and a return of approximately $8.8 million to the

previously insolvent debtor. Id. Accordingly, while explicitly acknowledging the

Bankruptcy Act’s requirementthat fees must remain “within the lower spectrum

of reasonableness,” we held that a 70% enhancement ofthe lodestar based on the

Johnson factors was appropriate.6Id. at 1213–14 (internal quotation marks

omitted). 

We recognize that both Rose Pass Mines and Lawler were decided under

the Bankruptcy Act. However, notwithstanding the enactment of the

Bankruptcy Code, this precedent remains intact. With regard to Rose Pass

Mines in particular, we already held as much in Consolidated Bancshares, 785

F.2d at 1249. In that case, the debtor’s counsel sought a fee enhancement under

§ 330 and Rose Pass Mines based on counsel’s alleged substantial recovery for

the estate. Id. The bankruptcy court denied the enhancement and the district

court affirmed the decision. Id. at 1251. We subsequently affirmed, holding that

although counsel’s efforts were certainly laudable, the bankruptcy court acted

within its broad discretion in denying the enhancement. Id. at 1257. Despite
No. 11-10774

11

this outcome, Consolidated Bancshares is significant because, in rejecting the

appellant’s arguments, we reaffirmed that bankruptcy courts retain discretion

to “enhance[] a fee for a job performed in an excellent manner”:

A high level of expertise in a complicated reorganization case does

not automatically warrant a bonus. Southwestern Media Inc. v.

Rau, 708 F.2d 419, 428 (9th Cir. 1983). Moreover, the attorneys for

the debtor had the opportunity at the evidentiary hearing to show

that the settlement achieved in the case would have been lost but

for their efforts. From the record, this court can discern no abuse of

discretion in the bankruptcy court’s ruling that the fine job done by

debtor’s attorneys is properly compensable by their hourly rate

without a bonus. . . . We note in passing that the case relied on by

debtor’s counsel stands only for the proposition that the bankruptcy

judge does not abuse his discretion when he enhances a fee for a job

performed in an excellent manner. Rose Pass Mines, 615 F.2d at

1092. Similarly, a bankruptcy judge does not abuse his discretion

when he decides not to enhance the hourly fee with a bonus.

Id. at 1257 (emphasis added). By explaining the current meaning of Rose Pass

Mines in a case governed by the Bankruptcy Code, we made clear to bankruptcy

courts that our holding remained precedential. And it appears that the

bankruptcy courts did not overlook this significant aspect of Consolidated

Bancshares as they have continued to rely on Rose Pass Mines even though it

was decided under the Bankruptcy Act. See, e.g., In re ASARCO LLC, 2011 WL

2974957, at *36 (Bankr. S.D. Tex. July 20, 2011); In re Nucentrix Broadband

Networks, Inc., 314 B.R. 574, 578 (Bankr. N.D. Tex. 2004); In re Farah, 141 B.R.

920, 925 (Bankr. W.D. Tex. 1992).

Although we have not explicitly reaffirmed Lawler in the same manner as

Rose Pass Mines, we have cited the decision favorably in multiple cases that

were decided under the Bankruptcy Code, thereby indicating that the decision

continues to stand. See In re DP Partners Ltd. P’ship, 106 F.3d 667, 674 n.29

(5th Cir. 1997) (citing Lawler for the proposition that “Johnson and [its]

progeny” govern awards of professional compensation pursuant to 11 U.S.C.
No. 11-10774

12

§ 503(b)(4)); In re Anderson, 936 F.2d 199, 204 (5th Cir. 1991) (citing Lawler

after explaining that bankruptcy courts “ha[ve] broad equitable—and hence

discretionary—powers to award attorney’s fees”); In re Evangeline Refining Co.,

890 F.2d 1312, 1326 (5th Cir. 1989) (relying on Lawler when explaining the level

of detail that must be included in a fee application). There is also little reason

not to extend to Lawler the same favorable treatment that Rose Pass Mines

enjoys. Although case-specific distinctions exist, both decisions upheld

enhancements of the lodestar because the estate’s counsel provided outstanding

services that generated exceptional results in the form of a 100% return to all

creditors. 

Moreover, the continued vitality of Rose Pass Mines and Lawler should

hardly be surprising, as § 330(a) is substantially similar to the Bankruptcy Act

provision it replaced, and the only material distinction between the relevant

provisions supports our reaffirmation of the two cases. See also 3 Collier on

Bankruptcy § 330.03[2] (“[M]ost of the criteria are the same and prior

[Bankruptcy Act] case law remains relevant.”) (emphasis added). When

determining reasonable compensation under the Bankruptcy Act, Bankruptcy

Rule 219(c)(1) instructed bankruptcy courts to give “due consideration to the

nature, extent, and value of the services rendered as well as to the conservation

of the estate and the interests of creditors.” Rose Pass Mines, 615 F.2d at 1091

(emphasis added). Similarly, as it first appeared in 1978, § 330(a)(1) authorized

courts to award “reasonable compensation for actual, necessary services . . .

based on the time, the nature, the extent, and the value of such services, and the

cost of comparable services other than in a case under this title . . . .” Act of Nov.

6, 1978, ch. 3, Pub. L. No. 95–598, § 330, 92 Stat. 2549 (1978). Thus, the only

significant shift in the law was that Congress removed the “conservation of the

estate” consideration—which required courts to award fees “at the lower end of

the spectrum of reasonableness”—so that bankruptcy professionals could be paid
No. 11-10774

7 We note that the fee awarded in Fender was not owed by the estate to its attorneys

pursuant to § 330. See 12 F.3d at 484. Because the award was not governed by § 330, Fender

only constitutes persuasive authority. We nevertheless consult the case because it addresses

the lodestar and Johnson factors in the bankruptcy arena. 

8 Although we did not cite Lawler in support of this proposition, the statement is

consistent with our previous discussion in Lawler. See Lawler, 807 F.2d at 1213 (“They are

well entitled under the application of the Johnson factors to an award significantly above the

lodestar.”). 

13

fees comparable to those earned for similar services in the non-bankruptcy

arena. See also 3 Collier on Bankruptcy § 330.03[2] (“The economy factor was

abandoned under the Bankruptcy Code in favor of the new policy that attorneys

engaged in bankruptcy cases should receive compensation in parity with that

received by attorneys performing services in comparable situations.”).

Otherwise, the relevant Bankruptcy Act and Bankruptcy Code compensation

provisions were nearly identical. And these similarities persist today. See 11

U.S.C. § 330(a). Accordingly, there is a solid textual foundation buttressing our

conclusion that Rose Pass Mines and Lawler survived the Code’s enactment: if

enhancements were possible when fees were awarded “at the lower end of the

spectrum of reasonableness,” then they surely remained possible after that

ceiling was removed and the statutory text was otherwise unchanged. 

Our conclusion is also supported by the two compensation decisions we

rendered after deciding Consolidated Bancshares. In Fender,

7 we reiterated that

a bankruptcy court may adjust “the lodestar upward or downward depending

upon the respective weights of the twelve factors set forth in Johnson.”8 12 F.3d

at 487. We explained, however, that the court’s discretion to adjust the fee

upwards is partially constrained by the lodestar, which is presumed to fully

account for four of the twelve Johnson factors—“the novelty and complexity of

the issues, the special skill and experience of counsel, the quality of the

representation, and the results obtained from the litigation.” Id. at 488 (quoting

Shipes, 987 F.2d at 320). A court may overcome this presumption and “double
No. 11-10774

9 The Fender opinion also includes language that, whenviewedinisolation,is internally

inconsistent with its analysis and ultimate holding. Specifically, Fender states that “[t]he

lodestar may be adjusted according to a Johnson factor only if that factor is not already taken

into account by the lodestar” and cites Shipes, 987 F.3d at 319–20 in support of that

proposition. Id. at 487. When this language is viewed in the context of the opinion as a whole,

it is clear that the four factors subsumed by the lodestar may still be “double counted” in rare

and exceptional cases. Thus, we refrain from viewing this seemingly inconsistent language in

isolation. 

10 The pre-calculated lodestar was found in General Order 2004-5, which “provide[d]

bankruptcy courts with reasonable attorney time estimates for completing a ‘typical’ Chapter

13 case and customary rates for Chapter 13 services in the Southern District of Texas, which,

when multiplied together, yield[ed] a typical lodestar amount of $1737.” Id. at 540. This

“typical” lodestar amount enabled courts to dispose of “run-of-the-mill Chapter 13 fee

applications expeditiously and uniformly.” Id. at 541. “General Order 2004-5 nevertheless

anticipate[d] that bankruptcy courts evaluating traditional fee applications [would] continue

to analyze and adjust fee applications on a case-by-case basis using the lodestar analysis and

flexible Johnson factors, ensuring that the lodestar amount in an atypical case [would] be

adjusted to reflect the specifics of that case.” Id.

14

count” one or more of these presumably subsumed Johnson factors “only in

certain rare and exceptional cases supported by both specific evidence on the

record and detailed findings by the lower courts.”9Id. (quoting Shipes, 987 F.2d

at 320). In the underlying case, we reversed the bankruptcy court’s 70% fee

enhancement because: (1) it was a “substantial upward departure from the

lodestar” based on the presumably subsumed Johnson factors; and (2)“[n]othing

in the bankruptcy court’s findings show[ed] th[e] case to be ‘rare and

exceptional.’” Id.

Finally, we most recently analyzed professional compensation in Cahill,

428 F.3d 536. In that case, the bankruptcy court had refused to award the full

amount of the $3,758.08 requested by counsel for the chapter 13 debtor, and

instead limited counsel’s fee award to $1,737.00, which was the pre-calculated

lodestar rate for chapter 13 bankruptcies filed in the Southern District of

Texas.10 Id. at 538–39. We explained that, after calculating the lodestar, a

“court then may adjust the lodestar up or down based on the factors contained

in § 330 and its consideration of the twelve factors listed in Johnson.” Id. at 540.
No. 11-10774

15

We held, however, that the bankruptcy court did not abuse its discretion in

refusing to enhance the pre-calculated lodestar rate up to the $3,758.08 sought

by the debtor’s counsel because: 

[The bankruptcy court’s] findings that Walker & Patterson’s

attorneys spent an unreasonable amount of time on the case,

duplicated each other’s efforts, performed unnecessary work, were

unprepared for the confirmation hearing, and were handling a case

that presented no novel or complex issues support[ed] its conclusion

thatthis case did not warrant an upward adjustment of the lodestar

amount under § 330 or Johnson. 

Id. at 541. Thus, although we declined to enhance the lodestar, our analysis

indicated that enhancements are permissible when warranted by § 330 or the

Johnson factors. 

In sum, we have consistently held that bankruptcy courts have broad

discretion to adjust the lodestar upwards or downwards when awarding

reasonable compensation to professionals employed by the estate pursuant to

§ 330(a). However, this discretion is far from limitless. Upward adjustments,

for instance, are still only permissible in rare and exceptional

circumstances—such as in Rose Pass Mines and Lawler, where the applicants

had provided superior services that produced outstanding results—that are

supported by detailed findings from the bankruptcy court and specific evidence

in the record. 

III.

We now address the focal point of this case: whether the Supreme Court’s

fee-shifting decision in Perdue unequivocally, sub silentio overruled our circuit’s

bankruptcy precedent. 

A.

In Perdue, the Supreme Court analyzed “whether the calculation of an

attorney’s fee, under federal fee-shifting statutes, based on the ‘lodestar’ . . . may

be increased due to superior performance and results.” 130 S. Ct. at 1669
No. 11-10774

16

(emphasis added). The underlying case dealt with a class action lawsuit

commenced by approximately 3,000 children in the Georgia foster care system

against the Governor of Georgia and various state officials, alleging violations

of their constitutional and statutory rights. Id. The plaintiffs reached a

favorable settlement and their attorneys sought to recover their fees from the

defendants pursuant to 42 U.S.C. § 1988, which provides, in pertinent part,that

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

attorney’s fee as part of the costs.” Perdue, 130 S. Ct. at 1670. The district court

calculated a $6 million lodestar figure and then enhanced the award by 75%

based on: (1) the attorneys’ advancement of $1.7 million of expenses over three

years without receiving any reimbursements; (2) the absence of ongoing pay to

the attorneys; (3) the fully contingent nature of the case; and (4) the attorneys’

extraordinarily high degree of “skill, commitment, dedication, and

professionalism.” Id. The district court also found that the results obtained in

the case were truly extraordinary, explaining that“after 58 years as a practicing

attorney and federal judge, the Court is unaware of any other case in which a

plaintiff class has achieved such a favorable result on such a comprehensive

scale.” Id. at 1682 (citation and alteration omitted). 

The Supreme Court began its discussion by explaining that the text of

§ 1988 “[u]nfortunately . . . does not explain what Congress meant by a

‘reasonable’ fee, and therefore the task of identifying an appropriate

methodology for determining a ‘reasonable’ fee was left for the courts.” Id. at

1671. The twelve Johnson factors were the first attempt at such a methodology.

Id. at 1671–72. However, “[t]his method . . . ‘gave very little actual guidance to

the district courts,” and “placed unlimited discretion in trial judges and produced

disparate results.” Id. at 1672 (quoting Pennsylvania v. Del. Valley Citizens’

Council for Clean Air, 478 U.S. 546, 563 (1986) (Delaware Valley I)). The Court

then referenced the emergence of an “alternative approach” in the form of the
No. 11-10774

11 In Delaware Valley I, the Court held that: 

These [fee-shifting] statutes were not designed as a form of economic relief to

improve the financial lot of attorneys, nor were they intended to replicate

exactly the fee an attorney could earn through a private fee arrangement with

his client. Instead, the aim of such statutes was to enable private parties to

obtain legal help in seeking redress for injuries resulting from the actual or

threatened violation of specific federal laws. 

478 U.S. at 565. 

12 The Court also stated a sixth rule, that the burden of proving an enhancement is

borne by the applicant. Id. This rule is not relevant in this case. 

17

lodestar method, which eventually became “the guiding light of our fee-shifting

jurisprudence.” Id. (citation omitted). According to the Court, “unlike the

Johnson approach, the lodestar calculation is objective . . . and thus cabins the

discretion of trial judges, permits meaningful judicial review, and produces

reasonably predictable results.” Id. (internal citation and quotation marks

omitted). 

The Court next summarized the “important rules” from its prior decisions

concerning federal fee-shifting statutes that led to its holding in Perdue. Id.

“First, a ‘reasonable’ fee is a fee that is sufficient to induce a capable attorney to

undertake the representation of a meritorious civil rights case.”11Id. (citing

Delaware Valley I, 478 U.S. at 565). “Second, the lodestar method yields a fee

that is presumptively sufficientto achieve this objective.” Id. at 1673. Third, fee

enhancements “may be awarded in rare and exceptional circumstances.” Id.

(citations and internal quotation marks omitted). Fourth, the lodestar “includes

most, if not all, of the relevant factors constituting a reasonable attorney’s fee

and . . . an enhancement may not be awarded based on a factor that is subsumed

in the lodestar calculation.” Id. (internal citation and quotation marks omitted).

“Finally, a fee applicant seeking an enhancement must produce specific evidence

that supports the award.”12 Id.
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13 The Court was originally “asked to decide whether either the quality of an attorney’s

performance or the results obtained are factors that may properly provide a basis for an

enhancement.” Id. However, the Court determined that those two factors should be treated

as one because “superior results are relevant only to the extent it can be shown that they are

the result of superior attorney performance.” Id.

14 For instance, with regard to the second circumstance, the Court provided that “the

amount of the enhancement must be calculated using a method that is reasonable, objective,

and capable of being reviewed on appeal, such as by applying a standard rate of interest to the

qualifying outlays of expenses.” Id. at 1674. 

15 See id. at 1674 (“[W]hen an attorney agrees to represent a civil rights plaintiff who

cannot afford to pay the attorney, the attorney presumably understands that no

18

The Courtthen moved to the precise issue presented in the case: “whether

there are circumstances in which superior attorney performance is not

adequately taken into account in the lodestar calculation.”13Id. at 1674. The

Court held that only the following three rare and exceptional circumstances

could justify a fee enhancement based on superior performance: (1) when “the

hourly rate employed in the lodestar calculation does not adequately measure

the attorney’s true market value”; (2) “if the attorney’s performance includes an

extraordinary outlay of expenses and the litigation is exceptionally protracted”;

and (3) when there is an “exceptional delay in the payment of fees,” especially

“where the delay is unjustifiably caused by the defense.” Id. at 1674–75. Any

enhancement must be based, however, on objective criteria that are capable of

being reviewed by an appellate court.14 Id. The Court then reversed and

remanded because the district court failed to provide proper, objective

justification for the significant fee enhancement. Id. at 1675–77. 

We further note that Perdue’s holding was founded primarily upon

justifications that are unique to cases governed by § 1988 or other fee-shifting

statutes. For example, the Court explained that the second and third

circumstances arise only in rare and exceptional cases because attorneys in feeshifting cases generally understand that they will not receive attorney’s fees or

expense reimbursements until the end of a case.15Id. at 1674–75. The Court
No. 11-10774

reimbursement is likely to be received until the successful resolution of the case, . . . and

therefore enhancements to compensate for delay in reimbursement for expenses must be

reserved for unusual cases.”) (internal citation omitted). 

19

also commented that defendants are less likely to settle when there is

uncertainty regarding the amount of fees that could be awarded by a judge who

is relying on his “subjective opinion regarding particular attorneys or the

importance of the case.” Id. at 1676. And the Court made clear that the

ultimate burden of paying for attorney’s fee enhancements in § 1988 cases is

often borne by taxpayers: 

Section 1988 serves an important public purpose by making it

possible for persons without means to bring suit to vindicate their

rights. But unjustified enhancements that serve only to enrich

attorneys are not consistent with the statute’s aim. In many cases,

attorney’s fees awarded under § 1988 are not paid by the individuals

responsible for the constitutional or statutory violations on which

the judgment is based. Instead, the fees are paid in effect by state

and local taxpayers, and because state and local governments have

limited budgets, money that is used to pay attorney’s fees is money

that cannot be used for programs that provide vital public services.

Id. at 1676–77 (footnote omitted). 

B.

TheTrustee argues that we should extend Perdue to the bankruptcy arena

because the decision clarifies how to apply the lodestar method, cabins the

discretion of bankruptcy judges, and leads to more uniform and predictable

results. We decline this invitation because Perdue did not unequivocally, sub

silentio overrule our legion of precedent in the field of bankruptcy.

1.

In this circuit, we abide by the rule of orderliness. Technical Automation

Servs. Corp. v. Liberty Surplus Ins. Corp., 673 F.3d 399, 405 (5th Cir. 2012).

Under this rule, a panel of three judges may not unilaterally overrule or

disregard the precedent that has been established by our previous decisions.
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20

Teague v. City of Flower Mound, Tex., 179 F.3d 377, 383 (5th Cir. 1999) (“[T]he

rule of orderliness forbids one of our panels from overruling a prior panel.”);

Dornbusch v. Comm’r, 860 F.2d 611, 612 n.1 (5th Cir. 1988) (“We recognize, of

course, that one panel of this Court ‘cannot disregard the precedent set by a

prior panel.’” (quoting Wilson v. Taylor, 658 F.2d 1021, 1034 (5th Cir. 1981))).

In order for one panel to overrule another,there must be “an intervening change

in the law, such as by a statutory amendment, or the Supreme Court, or by our

en banc court.” Technical Automation, 673 F.3d at 405 (quoting Jacobs v. Nat’l

Drug Intelligence Ctr., 548 F.3d 375, 378 (5th Cir. 2008)). Furthermore, we

exercise restraint when determining whether a Supreme Court decision has

produced an intervening change in the law: “for a Supreme Court decision to

change our Circuit’s law, it must be more than merely illuminating with respect

to the case before the court and must unequivocally overrule prior precedent.”

Id. (citations, internal quotation marks, and alterations omitted). 

We recently followed the rule of orderliness in Technical Automation. In

that case, we considered whether the Supreme Court’s decision in Stern v.

Marshall, 131 S. Ct. 2594 (2011), which held that Article I bankruptcy courts

lack constitutional authority to enter final judgment on certain state law

counterclaims, should be extended so as to circumscribe the authority of Article I

magistrate judges to enter final judgments. Technical Automation, 673 F.3d at

406. Despite acknowledging the “many similarities” between the statutory

powers of bankruptcy judges and those of magistrate judges, we declined this

invitation to extend Stern. Id. at 406–07. Instead, we held that the rule of

orderliness prevented such an outcome because Stern did not unequivocally

overrule our contrary precedent:

Although the similarities between bankruptcy judges and

magistrate judges suggest that the Court’s analysis in Stern could

be extended to this case, the plain fact is that our precedent in

Puryear [v. Ede’s Ltd., 731 F.3d 1153, 1154 (5th Cir. 1984)] is there,
No. 11-10774

21

and the authority upon which it was based has not been overruled.

Moreover, we are unwilling to say that Stern does that job sub

silentio, especially when the Supreme Court repeatedly emphasized

that Stern had very limited application.

Id. at 407.

2.

The Perdue opinion illuminates two significant distinctions that exist

between the Supreme Court’s fee-shifting jurisprudence and our framework for

analyzing professional compensation under 11 U.S.C. § 330(a). First, the

Johnson factors are personae non gratae in Perdue’s eyes. The decision casts

them in a negative light, commenting that they provided “very little guidance,”

bestowed “unlimited discretion in trial judges and produced disparate results.”

Perdue, 130 S. Ct. at 1672. The Court goes on to state that the lodestar is the

more favorable “alternative” to the Johnson factors, indicating that the lodestar

has superseded the Johnson factors in the fee-shifting arena. Id. Conversely,

we have never treated the lodestar and Johnson factors as mutually exclusive

methods for determining reasonable compensation under either the Bankruptcy

Act or the Bankruptcy Code. Instead, we have consistently viewed them as

complementary methodologies, using the lodestar as the starting point that

yields a presumptively reasonable fee, and then permitting upward adjustments

based on the factors set forth in Johnson and, after the 1994 amendment,

§ 330(a). See, e.g., Cahill, 428 F.3d at 540; Lawler, 807 F.2d at 1213 (“They are

well entitled under the application of the Johnson factors to an award

significantly above the lodestar.”). 

Second, our discussion in II.B., supra, illustrates that bankruptcy courts

have discretion to enhance fees for professionals when their superior

performance produced outstanding results. And, in accordance with that rule,

we have affirmed fee awards that would have been proscribed under Perdue. In

Rose Pass Mines, for example, we affirmed the enhancement of an attorney’s fee
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22

from $85 to $100 per hour “despite [the attorney’s] testimony that his maximum

fee in bankruptcy matters had been $85 per hour.” 615 F.2d at 1092 (emphasis

added); see also Consolidated Bancshares, 785 F.2d at 1257 (explaining thatfees

may be enhanced under Rose Pass Mines “for a job performed in an excellent

manner”). This fee award is inconsistent with Perdue, as it does not fall within

any of the three circumstances where Perdue permits enhancements based on

superior attorney performance. The most notable distinction between the two

cases is that Perdue permits enhancements “where the method used in

determining the hourly rate employed in the lodestar calculation does not

adequately measure the attorney’s true market value.” Perdue, 130 S. Ct. at 1674

(emphasis added). In Rose Pass Mines, on the other hand, we affirmed an

enhancement despite the fact that the attorney was still receiving his market

rate before the enhancement was taken into account. 615 F.2d at 1092. Under

our current framework, therefore, enhancements are possible in situations not

delineated in Perdue. 

The question thus becomes whether Perdue unequivocally, sub silentio

overruled our bankruptcy framework, which currently permits bankruptcy

courts to: (1) consider the Johnson factors after calculating the lodestar; and

(2) award fee enhancements in situations that fall outside of the three specific

circumstances set forth in Perdue. See Technical Automation, 673 F.3d at 405

(“In the light of our prior panel precedent and our observance of the rule of

orderliness, our inquiry turns to whether the Supreme Court’s decision in Stern

v. Marshall unequivocally, sub silentio overruled Puryear.”). We cannot say that

it did.

We begin with the obvious: Perdue is a federal fee-shifting case. Perdue,

130 S. Ct. at 1672. The Court made this clear at the outset of the opinion and

relied solely on its prior fee-shifting jurisprudence to support its holding. See id.
No. 11-10774

16 This lack of intent to extend Perdue is evidenced, for instance, by the fact that the

three circumstances justifying a fee enhancement are essentially non-existent in the

bankruptcy arena because they are already addressed by the Bankruptcy Code. Section 331

of the Bankruptcy Code enables professionals to request fee awards and expense

reimbursements “every 120 days . . . or more often if the court permits,” and to receive

disbursements after notice and a hearing. 11 U.S.C. § 331. This provision eliminates the

prospect that there could be either an “extraordinary outlay of expenses” or the “exceptional

delay in the payment of fees” during a bankruptcy proceeding. See Perdue, 130 S. Ct. at

1674–75. Similarly, § 330(a)(3)(F) requires courts to consider whether “compensation is

reasonable based on the customary compensation charged by comparably skilled practitioners

in cases other than cases under this title.” 11 U.S.C. § 330(a)(3)(F). This alleviates Perdue’s

concern that “an enhancement may be appropriate so that an attorney is compensated at the

rate thatthe attorney would receive in cases not governed by the federal fee-shifting statutes.”

Perdue, 130 S. Ct. at 1674. Accordingly, because the Bankruptcy Code renders Perdue’s three

“rare and exceptional” circumstances essentially non-existent in bankruptcy proceedings, we

doubt that the Court intended for Perdue to extend to cases governed by § 330(a). 

17 This interpretation of § 330(a)(3) is also consistent with our past practice. We would

not have continued to instruct courts that enhancements may be based on the Johnson factors

23

at 1669, 1672–75. The opinion neither explicitly touched on bankruptcy law nor

indicated that the Supreme Court intended Perdue to extend to non-fee-shifting

cases.16 We, therefore, take the Supreme Court at its word when it described

Perdue as a federal fee-shifting case, and decline to extend it further. See

Perdue, 130 S. Ct. at 1669; see also Technical Automation, 673 F.3d at 407

(“[W]e are unwilling to say that Stern does that job sub silentio, especially when

the Supreme Court repeatedly emphasized that Stern had very limited

application.”). 

There is also textual support for our decision. Unlike § 1988, which

“[u]nfortunately . . . does not explain what Congress meant by a ‘reasonable’ fee,”

Perdue, 130 S. Ct. at 1671, § 330(a) provides specific considerations (i.e. the

nature, extent, and value of the services) and six factors for bankruptcy courts

to consider when determining a reasonable fee. See 11 U.S.C. § 330(a)(3).

Section 330(a)(3)’s text also indicates that its list of factors is not exclusive:

bankruptcy courts may consider “all relevant factors,” including factors not

specified in the statute.17 See id.; see also Lan Assocs. XI, 192 F.3d at 123 (“[T]he
No. 11-10774

if the factors listed in § 330(a)(3) were all-inclusive. See Cahill, 428 F.3d at 540. 

18 On a related point, the Trustee argues that we should extend Perdue because in the

past we have relied on fee-shifting cases when resolving fee disputes in bankruptcy

proceedings. We certainly agree that fee-shifting case law can provide persuasive authority,

and we may continue to consider it in future cases. See Fender, 12 F.3d at 487. This is

particularly true when the matter is one of first impression in the bankruptcy context. See,

e.g., Babcock & Wilcox Co., 526 F.3d at 827–28 (relying on a Voting Rights Act case when

determining whether the bankruptcy court abused its discretionby reducing the attorney’s fees

for non-working traveltime under § 330). We do not, however, automatically apply fee-shifting

case law wholesale into the bankruptcy arena or automatically treat fee-shifting and

bankruptcy cases as interchangeable. See, e.g., First Colonial, 544 F.2d at 1299 (extending the

Johnson factors to bankruptcy but adding two additional considerations that were unique to

bankruptcy law). Most importantly, when a particular principle is well-settled in the

bankruptcy arena, a panel has no choice but to continue to abide by it, irrespective of the

changes occurring in other, related areas of the law. 

24

factors enumerated in section § 330(a) are not all-inclusive.”); In re Mkt. Ctr. E.

Retail Prop., Inc., 469 B.R. 44, 52 (B.A.P. 10th Cir. 2012) (“The list contained in

§ 330(a)(3) is not meant to be exhaustive; had Congress wished to limit a

bankruptcy court’s consideration to the factors listed in § 330(a)(3), it knew how

to do so.”). This differs markedly from the near ubiquitous application of the

lodestar in fee-shifting cases, as, in those cases, the lodestar “figure includes

most, if not all, of the relevant factors constituting a ‘reasonable’ attorney’s fee.”

Perdue, 130 S. Ct. at 1673. Accordingly, given the factors that bankruptcy courts

are expected to consider under § 330(a)’s plain language, it is inappropriate to

automatically extend Perdue into the bankruptcy arena.18 See also Mkt. Ctr. E.

Retail Prop., 469 B.R. at 53 (“There are significant differences between fee

awards in civil rights actions and bankruptcy cases.”). 

We are also persuaded by the fact that the Court’s justifications for the

holding in Perdue do not transfer to this case. Unlike cases under § 1988, where

fee enhancements often come at the expense of the taxpayer, the public’s purse

is left untouched in bankruptcy proceedings. The Trustee’s related
No. 11-10774

19 The Trustee states in his brief that “creditors primarily will bear the burden of those

bonuses because creditors’ claims are paid from the estate assets that remain after

professionals’ fees have been paid.” 

20 At oral argument, the Trustee argued that there could be future cases where a

bankruptcy court awards an enhancement even though all creditors were not paid in full. Such

an enhancement, according to the Trustee, would be paid at the expense of creditors. That

future case is not before us today, and we decline to definitively answer whether fee

enhancements may ever be awarded when one or more creditors has not received 100 cents on

the dollar. We merely note, on the other hand, that we have never sustained an enhancement

where all creditors did not receive a 100% return and, given the Trustee’s failure to cite even

one case to support its theory, the Trustee’s concern seems more theoretical than real. 

25

argument—that the enhancement comes at the expense of creditors19—is

similarly unavailing where, as here, all creditors receive a 100% return on their

claims.20 The Debtors are the only party whose bottom-line was reduced by the

enhancement and, because their own board of directors recommended paying the

enhancement, we can hardly compare the Debtors’ situation to that of the nonconsenting taxpayers. 

Likewise, this case does not implicate Perdue’s concern that defendants

may be unwilling to settle cases when they can be exposed to the unconstrained,

subjective discretion of the courts once it comes time to pay the plaintiff’s tab.

See Perdue, 130 S. Ct. at 1676. That concern makes sense in the § 1988 feeshifting realm where, contrary to the American Rule,the “prevailing party” may

recover fees and expenses from its adversary. This recovery necessarily involves

the redistribution of a finite sum of money from the pocket of the adversary into

the hands ofthe prevailing party. On the other hand, enhancements like the one

sought by CRG are only paid in the parallel universe where everyone is a winner

(e.g. because everyone has received 100 cents on the dollar). In these rare cases,

the professionals may potentially receive an enhancement only after

transforming a carcass into a cheetah, so to speak,thereby enlarging the pie that
No. 11-10774

21 This is particularly true where, as here, the debtor’s board of directors recommends

paying the enhancement. 

26

is shared by all of the debtor’s creditors. In this parallel universe, there is no

settling or losing party to protect from the discretion of the bankruptcy courts.21

In Technical Automation, we declined to extend Stern v. Marshall to

Article I magistrate judges even though there are “many similarities” between

the statutory powers of bankruptcy judges and those of magistrate judges.

Technical Automation, 673 F.3d at 406–07. Here, there are fewer similarities

and significant textual and structural differences between fee-shifting and

bankruptcy cases. Given these differences, and the Supreme Court’s failure to

indicate thatPerdue was intended to apply outside ofthe fee-shifting context, we

hold that Perdue did not unequivocally, sub silentio overrule our existing

bankruptcy framework merely because the lodestar is used in both types of

cases. 

IV.

There may be sound justifications for implementing a Perdue-like

approach to the compensation of professionals employed under § 330, but those

justifications must be voiced to our en banc court, the Supreme Court, or

Congress. We hold that Perdue did not unequivocally, sub silentio overrule our

prior precedent and we are, therefore, bound to apply it. Accordingly, the

bankruptcy court’s order awarding CRG a $1 million fee enhancement is

AFFIRMED.