Court Opinion

ID: 6927438
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:31:17.151268+00
Date Added: 2024-06-11T16:06:58.515159
License: Public Domain

Circuit Judge D.H. GINSBURG,
concurring in part and dissenting in part:
I join in the opinion of the court insofar as it upholds the district court’s decision to reduce the fee award from $5.6 million to $2 *1273million. I dissent, however, insofar as the court relies upon the percentage-of-the-fund approach as the only permissible measure of a reasonable fee in a common fund case.
The authority controlling a common fund case in this circuit is Bebchick v. W.M.A.T.A., 805 F.2d 396, 406-07 (D.C.Cir.1986). Under that precedent, the lodestar is the starting point for calculating a fee award and the percentage-of-the-fund it represents is merely a secondary check upon the reasonableness of the resulting award.
Neither this court nor the Supreme Court has ever in a common case cast doubt upon the continuing vitality of this approach. Cf. Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984) (dictum in a statutory fee shifting case). Both City of Burlington v. Dague, —— U.S. -, 112 S.Ct. 2638, 120 L.Ed.2d 449 (1992), and King v. Palmer, 950 F.2d 771 (D.C.Cir.1991), were brought under fee-shifting statutes. According to the Supreme Court, the plaintiffs were not entitled to a risk enhancement principally because the statute authorized the award of a fee only to a “prevailing parity].” Because that constraint is absent in a non-statutory common fund case, we find the question of enhancement in such a case precisely where Bebchick left it.
Far from being indicated by the Supreme Court’s decision in City of Burlington, as the court implies, the percentage-of-the-fund approach seems actually to be at odds with that decision. The Supreme Court there clearly assumed that the lodestar was the appropriate starting point in calculating a reasonable fee. Contrary to my colleague’s implication, however, that assumption was not compelled; many cases brought under fee-shifting statutes produce a common fund that could provide the measure of a reasonable fee. See e.g. Kientzy v. McDonnell Douglas Co., 990 F.2d 1051 (8th Cir.1993) ($600,000 award in sex discrimination case); King v. Palmer, 950 F.2d 771 (award of back pay). Were a percentage-of-the-fund approach so clearly preferable, it could be applied to such eases, with the lodestar reserved for instances in which there is no fund from which to calculate a reasonable award.
I realize that the percentage-of-the-fund approach is appealingly simple to administer. Whatever the problems associated with applying the lodestar, however, see supra Ct. Op. at 1267,1268-69, they are no greater in a common fund case than in a fee-shifting case. Moreover, reliance upon the percentage-of-the-fund approach without any regard for the lodestar may produce excessively high awards and thus encourage even relatively non-meritorious cases to be brought. This is a case in point: since the fee award here comes to about 3.3 times what it would be using the lodestar, the case would have been worth bringing (i.e., would have given counsel an ex ante probability of earning the lodestar rate) even if the plaintiff had only a 30% chance of success.
In order to ensure that we do not encourage the litigation of less meritorious claims, any enhancement above the lodestar should be limited to what is reasonable in the particular case — again as illustrated in Bebchick. The district court ought to be required to give some special reason for authorizing any amount more than twice the lodestar — which is to say, any amount that makes it remunerative for lawyers to bring cases with less than a 50% chance of success. Perversely, however, the approach adopted by the court today will encourage counsel to bring just such relatively non-meritorious claims. The potential for recovering a fee that is all out of proportion to the resources expended on the litigation means that counsel need win only occasionally in order to make a profit. The result will be to burden with crap-shoot cases a system already overburdened with close cases.
In this case the district court offered no justification whatsoever for an award so disproportionate to (3.3x) the lodestar. I would remand the matter for the district court either to explain or to revise its award of $2 million for legal work that, if billed at counsels’ hourly rate, would have fetched only $619,000.