Opinion ID: 2638074
Heading Depth: 1
Heading Rank: 5

Heading: Contingency Adjustment

Text: ¶ 21 After the lodestar has been calculated, the court may consider adjusting the award to reflect additional factors. Bowers, 100 Wash.2d at 598, 675 P.2d 193. The party requesting a deviation from the lodestar bears the burden of justifying it. Id. Adjustments to the lodestar are considered under two broad categories: the contingent nature of success, and the quality of work performed. Id. Pham and Lara seek an adjustment to the lodestar amount based only on the contingent nature of their case. ¶ 22 The contingency adjustment is based on the notion that attorneys generally will not take high risk contingency cases, for which they risk no recovery at all for their services, unless they can receive a premium for taking that risk. Id. As an initial matter, we note that Seattle City Light encourages us to reject contingency enhancements altogether. The United States Supreme Court in City of Burlington v. Dague, 505 U.S. 557, 559, 112 S.Ct. 2638, 120 L.Ed.2d 449 (1992), addressed a contingency multiplier in the context of a federal statute that provided for attorney fees. The Dague Court reasoned that the lodestar calculation is presumptively reasonable and that a contingency multiplier would likely duplicate in substantial part factors already subsumed in the lodestar. Id. at 562, 112 S.Ct. 2638. Specifically, the Court explained that the risk of loss in a particular case is the product of (1) the legal and factual merits of the claim and (2) the difficulty of establishing those merits. Id. The difficulty of establishing the merits of the case is thus already reflected in the lodestar amount because the more difficult a case is, the more hours an attorney will have to prepare and the more skilled an attorney will have to be to succeed. Id. A contingency enhancement would result in double payment. Id. at 563, 112 S.Ct. 2638. With regard to the relative merits of the claim, the Court reasoned that this is a factor that always exists to some degree. Id. Applying contingency or risk multipliers results in a social cost of indiscriminately encouraging nonmeritorious claims to be brought as well [as meritorious ones]. Id. ¶ 23 While subsequent Washington cases have considered contingency enhancements, none has directly addressed whether the Dague reasoning should apply to prohibit contingency multipliers in Washington. See Faraj v. Chulisie, 125 Wash.App. 536, 550, 105 P.3d 36 (2004) (recognizing that multipliers can be appropriate in contingency cases but declining to apply one where the trial court did not); Carlson v. Lake Chelan Cmty. Hosp., 116 Wash.App. 718, 743, 75 P.3d 533 (2003) (upholding trial court's award of 1.5 multiplier). However, the WLAD places a premium on encouraging private enforcement and as discussed above, the possibility of a multiplier works to encourage civil rights attorneys to accept difficult cases. RCW 49.60.020; Martinez, 81 Wash.App. at 235, 914 P.2d 86. While we presume that the lodestar represents a reasonable fee, occasionally a risk multiplier will be warranted because the lodestar figure does not adequately account for the high risk nature of a case. Therefore, we decline to disapprove of contingency multipliers altogether. ¶ 24 When determining whether a contingency multiplier is warranted in a particular case, we have explained that In adjusting the lodestar to account for this risk factor, the trial court must assess the likelihood of success at the outset of the litigation. This is necessarily an imprecise calculation and must largely be a matter of the trial court's discretion. Nevertheless certain guiding principles should be followed [T]o the extent, if any, that the hourly rate underlying the lodestar fee comprehends an allowance for the contingent nature of the availability of fees, no further adjustment duplicating that allowance should be made. Bowers, 100 Wash.2d at 598-99, 675 P.2d 193 (emphasis added). ¶ 25 In this case, the trial court declined to apply a fee multiplier. In explaining his decision, the trial court acknowledged that this was a high risk case, but much of that risk was a consequence of the plaintiffs' own difficulty in articulating the nature of the claims of discrimination against them and the marginal nature of [the] plaintiffs' evidence. CP at 653. The trial court found that [a]lthough plaintiffs' counsel should be fairly compensated for his perseverance in pursuing a difficult case with a modicum of evidence of discrimination, this [c]ourt concludes that the lodestar amount, without a multiplier, grants just compensation.  CP at 653 (emphasis added). ¶ 26 We agree with Pham and Lara that the trial court should not have used their inability to articulate their claims as justification for denying the multiplier. A plaintiff's difficulty in articulating his or her claims is one of many possible sources of risk. But both the trial court and Seattle City Light have failed to explain why this source of risk should weigh against application of a contingency adjustment. Cf. Boeing Co., 108 Wash.2d at 65, 738 P.2d 665 (finding abuse of discretion where the trial court reduced attorney fees based on the novelty of the claim involved because novelty was not a relevant concern). Indeed, as the Court of Appeals explained, at the outset of a disparate treatment case, a plaintiff's inability to articulate claims and a lack of known evidence are not uncommon. Pham, 124 Wash.App. at 723, 103 P.3d 827. Neither the trial court nor Seattle City Light has offered an explanation as to why the source of risk should impact the determination of whether a contingency multiplier should be applied. ¶ 27 In considering the propriety of a contingency adjustment, we have held that the trial court abuses its discretion when it takes irrelevant factors into account. Boeing Co., 108 Wash.2d at 65, 738 P.2d 665; see also Perry v. Costco Wholesale, Inc., 123 Wash. App. 783, 809, 98 P.3d 1264 (2004). Here the trial court considered an improper factor when evaluating the propriety of a contingency adjustment in this case. ¶ 28 However, the trial court also concluded that the lodestar amount, without a multiplier, grants just compensation. CP at 653. It is possible that the trial court would have denied the multiplier based on this conclusion alone. We therefore remand to the trial court to exercise its discretion as to the propriety of a multiplier without consideration of the improper factor. Perry, 123 Wash.App. at 809, 98 P.3d 1264.