Opinion ID: 789053
Heading Depth: 2
Heading Rank: 7

Heading: Lodestar Cross-Check

Text: 41 In addition to the percentage-of-recovery approach, we have suggested it is sensible for district courts to cross-check the percentage fee award against the lodestar method. Prudential, 148 F.3d at 333. Here, it was proper for the District Court to apply the percentage-of-recovery method, with an abridged lodestar analysis serving as a cross-check. The lodestar award is calculated by multiplying the number of hours reasonably worked on a client's case by a reasonable hourly billing rate for such services based on the given geographical area, the nature of the services provided, and the experience of the attorneys. The multiplier 13 is a device that attempts to account for the contingent nature or risk involved in a particular case and the quality of the attorneys' work. See, e.g., Report of the Third Circuit Task Force, Court Awarded Attorney Fees, 108 F.R.D. 237, 243 (1985). The lodestar cross-check serves the purpose of alerting the trial judge that when the multiplier is too great, the court should reconsider its calculation under the percentage-of-recovery method, with an eye toward reducing the award. Even when used as a cross-check, courts should explain how the application of a multiplier is justified by the facts of a particular case. Prudential, 148 F.3d at 340-41. 42 Here, the District Court approved a lodestar cross-check multiplier of 4.07, using an average hourly billing rate of $605, the combined hourly rates of the senior-most partners at lead co-counsel firms, and 12,906 billed hours from the time the first appeal was filed in Rite Aid I. Rite Aid II, 269 F.Supp.2d at 611 and n. 10. Kaufmann contends the District Court improperly applied the billing rates of only the most senior partners of plaintiffs' co-lead counsel, resulting in an artificially low multiplier. On this point, we agree. In performing the lodestar cross-check, the district courts should apply blended billing rates that approximate the fee structure of all the attorneys who worked on the matter. 14 That did not occur here. Had the hourly rates been properly blended, taking into account the approximate hourly billing rates of the partners and associates who worked on the case, 15 the multiplier would have been a higher figure, alerting the trial court to reconsider the propriety of its fee award. Failure to apply a blended rate, we believe, is inconsistent with the exercise of sound discretion and requires vacating and remanding for further consideration. 43 At the same time, we reiterate that the percentage of common fund approach is the proper method of awarding attorneys' fees. The lodestar cross-check calculation need entail neither mathematical precision nor bean-counting. 16 The district courts may rely on summaries submitted by the attorneys and need not review actual billing records. See Prudential, 148 F.3d at 342 (finding no abuse of discretion where district court reli[ed] on time summaries, rather than detailed time records). Furthermore, the resulting multiplier need not fall within any pre-defined range, provided that the District Court's analysis justifies the award. 17 Lodestar multipliers are relevant to the abuse of discretion analysis. But the lodestar cross-check does not trump the primary reliance on the percentage of common fund method.