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Exceptional Performance May Mean Higher Attorneys’ Fees Award

An April 21, 2010 U.S. Supreme Court decision can increase employer exposure to enhanced attorneys’ fees in contingency cases filed in Federal Court. The decision, Perdue v. Kenny A., 08-C.D.O.S. 4896, held that the plaintiffs’ lawyer’s performance, a key factor once used only to set the amount of the attorney’s fees, may now also be used to enhance or multiply those fees.

Prior to this decision, certain factors such as attorney performance, risk, and expense advancement, were used by Courts to calculate reasonable attorney’s fees in contingency cases. Those fees are referred to as Lodestar fees. Under the Lodestar method, the Court multiplied the number of hours a lawyer worked by the prevailing hourly rates in the lawyer’s area, to determine the reasonable attorneys’ fees. However, in extraordinary circumstances, a Court could then use other factors to enhance the attorneys’ fee, for example, multiplying the fee by two.

In this case, however, the Court held that attorney performance, a factor previously limited to calculating the Lodestar fee, could also be used in enhancing that fee. The Court reasoned that in extraordinary circumstances, Lodestar calculation factors might not adequately take into account the justification for enhanced fees, and should not, therefore, be per se subsumed in fee calculation only.

This case opens up the possibility that numerous other factors, such as an extraordinary result, advancement of expenses, or delay caused by defendants, could be used to increase the size of the plaintiff’s attorneys fees beyond the ordinary Lodestar calculation.

Employment related legal issues can present significant exposure to employers.  Employees and employers should consult with an attorney to ascertain their rights.

The Law Office of Phillip J. Griego
95 South Market Street, Suite 520
San Jose, CA 95113
Tel. 408-293-6341
Original article by Rutger J. Heymann, former associate of The Law Office of Phillip J. Griego.

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Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.