No. 81-1374
Argued: January 11, 1984Decided: March 21, 1984
Held:
- 1. The statute and its legislative history establish that “reasonable fees” are to be calculated according to the prevailing market rates in the relevant community, not according to the cost of providing legal services, regardless of whether the prevailing party is represented by private profitmaking attorneys or nonprofit legal aid organizations. Policy arguments in favor of a cost-based standard should be addressed to Congress rather than to this Court. Pp. 892-896.
- 2. The District Court abused its discretion in awarding the 50% upward adjustment in the fee in this case. Pp. 896-902.
-
- (a) There is no merit to the argument that an “upward adjustment” of a reasonable fee – calculated by multiplying the reasonable number of hours expended times a reasonable hourly fee – is never permissible. The statute and its legislative history establish that the “product of reasonable
- hours times a reasonable rate” normally provides a “reasonable” attorney’s fee, but “in some cases of exceptional success an enhanced award may be justified.” Hensley v. Eckerhart, 461 U.S. 424, 435 . Pp. 896-897.
- (b) However, respondent failed to carry her burden of proving that an upward adjustment was necessary to the determination of a reasonable fee in this case. The record contains no evidence supporting the District Court’s conclusions that the upward adjustment was proper because of the complexity of the litigation, the novelty of the issues, the high quality of representation, and the “great benefit” to the class. These factors generally are reflected in the reasonableness of the number of billable hours or the hourly rates. Moreover, the record does not justify the District Court’s upward adjustment on the basis of the “riskiness” of the law suit. Respondent established only that the hourly rates and the hours billed were reasonable. Pp. 898-902.
671 F.2d 493, affirmed in part and reversed in part.
POWELL, J., delivered the opinion for a unanimous Court. BRENNAN, J., filed a concurring opinion, in which MARSHALL, J., joined, post, p. 902.
Melvyn R. Leventhal, Deputy First Assistant Attorney General of New York, argued the cause for petitioner. With him on the briefs were Robert Abrams, Attorney General, Dennis H. Allee, First Assistant Attorney General, Peter H. Schiff, George D. Zuckerman, Deputy Solicitor General, and Marion R. Buchbinder and Frederick K. Mehlman, Assistant Attorneys General.
Leon Silverman argued the cause for respondent. With him on the brief were Kalman Finkel, Arthur J. Fried, John E. Kirklin, and Linda R. Blumkin. *
[ Footnote * ] Briefs of amici curiae urging reversal were filed for the United States by Solicitor General Lee, Assistant Attorney General McGrath, Deputy Solicitor General Geller, Deputy Assistant Attorney General Kuhl, Joshua I. Schwartz, William Kanter, and Mark W. Pennak; for the State of Alabama et al. by Kenneth O. Eikenberry, Attorney General of Washington, and Thomas F. Carr, Senior Assistant Attorney General, joined by the Attorneys General for their respective States as follows: Charles A. Graddick of Alabama, Norman C. Gorsuch of Alaska, Robert K. Corbin of Arizona, Duane Woodard of Colorado, Joseph Lieberman of Connecticut, Jim Smith of Florida, Michael J. Bowers of Georgia, Tany S. Hong of Hawaii, Jim [465 U.S. 886, 888] Jones of Idaho, Neil Hartigan of Illinois, Linley E. Pearson of Indiana, Thomas J. Miller of Iowa, Robert T. Stephan of Kansas, William J. Guste, Jr., of Louisiana, Stephen H. Sachs of Maryland, Frank J. Kelley of Michigan, Hubert H. Humphrey III of Minnesota, John D. Ashcroft of Missouri, Michael T. Greely of Montana, Paul L. Douglas of Nebraska, Brian McKay of Nevada, Gregory H. Smith of New Hampshire, Irwin I. Kimmelman of New Jersey, Rufus L. Edmisten of North Carolina, Robert O. Wefald of North Dakota, Anthony J. Celebrezze, Jr., of Ohio, Michael Turpen of Oklahoma, David B. Frohnmayer of Oregon, LeRoy S. Zimmerman of Pennsylvania, Dennis J. Roberts II of Rhode Island, Mark V. Meierhenry of South Dakota, William M. Leech, Jr., of Tennessee, David L. Wilkinson of Utah, John J. Easton of Vermont, Gerald L. Baliles of Virginia, Chauncey H. Browning of West Virginia, Bronson C. La Follette of Wisconsin, and Archie G. McClintock of Wyoming; and for the Commonwealth of Massachusetts by Francis X. Bellotti, Attorney General, Thomas R. Kiley, First Assistant Attorney General, and Judith S. Yogman and Carl Valvo, Assistant Attorneys General. Briefs of amici curiae urging affirmance were filed for the Alliance for Justice by Laura Macklin; for the California Coalition of Welfare Rights Organizations by Mary S. Burdick and Richard A. Rothschild; for the NAACP Legal Defense and Educational Fund, Inc., et al. by Jack Greenberg, James M. Nabrit III, Charles Stephen Ralston, Steven L. Winter, Fred N. Fishman, Robert H. Kapp, Norman Redlich, William L. Robinson, Norman J. Chachkin, E. Richard Larson, Burt Neuborne, Kenneth Kimerling, Joaquin G. Avila, and Morris J. Baller; for the National Education Association et al. by Michael H. Gottesman, Robert M. Weinberg, Julia Penny Clark, Robert H. Chanin, and Lawrence A. Poltrock; for the New York State Bar Association et al. by Haliburton Fales II; and for Oliver Hill et al. by Armand Derfner and Stephen P. Berzon. [465 U.S. 886, 888]
JUSTICE POWELL delivered the opinion of the Court.
Title 42 U.S.C. 1988 (1976 ed., Supp. V) provides that in federal civil rights actions “the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs.” The initial estimate of a reasonable attorney’s fee is properly calculated by multiplying the number of hours reasonably expended on the litigation times a reasonable hourly rate. Hensley v. Eckerhart, 461 U.S. 424 (1983). Adjustments to that fee then may be made as necessary in the particular case. The [465 U.S. 886, 889] two issues in this case are whether Congress intended fee awards to nonprofit legal service organizations to be calculated according to cost or to prevailing market rates, and whether, and under what circumstances, an upward adjustment of an award based on prevailing market rates is appropriate under 1988.
I
A
This suit was brought in 1978 by respondent on behalf of a statewide class of Medicaid 1 recipients pursuant to 42 U.S.C. 1983 in the District Court for the Southern District of New York. Under New York law, one who is eligible to receive benefits under the Supplemental Security Income (SSI) program, 42 U.S.C. 1381 et seq. (1976 ed. and Supp. V), automatically is eligible to receive Medicaid benefits. N. Y. Soc. Serv. Law 363 et seq. (McKinney 1976). Prior to this suit, persons who qualified for Medicaid in this fashion automatically lost their benefits if they thereafter became ineligible for SSI payments. The case was decided on cross-motions for summary judgment after only one set of plaintiff’s interrogatories had been served and answered. On these motions, the District Court certified the class 2 and rendered final judgment in favor of the class. [465 U.S. 886, 890]
The court enjoined the prior practice of automatic termination of benefits, and prescribed procedural rights for the certified class that included “(a) an ex parte determination of continued eligibility for Medicaid, independent of eligibility for SSI; (b) timely and adequate notice of such termination; (c) an opportunity for a hearing.” Stenson v. Blum, 476 F. Supp. 1331, 1335 (1979). The Court of Appeals for the Second Circuit affirmed in an unpublished oral opinion from the bench. Affirmance order, Stenson v. Blum, 628 F.2d 1345, cert. denied, 449 U.S. 885 (1980). Respondent’s subsequent request for an award of reasonable attorney’s fees under 1988 is the subject of the present case.
B
Throughout this litigation, respondent was represented by attorneys from the Legal Aid Society of New York, a private nonprofit law office. 3 In November 1980, respondent filed a request for attorney’s fees for the period December 1978 through the end of the litigation. Her three attorneys sought payment for some 809 hours of work at rates varying from $95 to $105 per hour. 4 This amounted to approximately [465 U.S. 886, 891] $79,312. Respondent’s total fee request, however, reflected a 50% increase in that fee. In her brief to the District Court, respondent explained that such an increase was necessary to compensate for the complexity of the case, the novelty of the issues, and the “great benefit” achieved. The total requested fee amounted to approximately $118,968. Petitioner opposed the fee award on the grounds that the rates were exorbitant, the number of hours charged were unreasonable and duplicative, and the 50% “bonus” was improper.
Petitioner submitted no evidence to support her claim that the hours and rates charged by respondent were unreasonable. Instead, petitioner rested her claim that the hours were duplicative and excessive and the rates exorbitant on arguments contained in her brief to the District Court and on that court’s discretion. Petitioner requested an evidentiary hearing on the issue of reasonable billable hours only if the District Court found that the discussion in her brief did not justify reductions in the number of hours charged. Finally, petitioner argued that the 50% “bonus” requested by respondent was improper because it would be paid by the public.
The District Court held that both the hours expended and the rates charged were reasonable. It also held that the fee calculated by multiplying the number of hours times the hourly rates should be increased by the requested 50% because of the quality of representation, the complexity of the issues, the riskiness of success, and the “great benefit to a large class” that was achieved. 512 F. Supp. 680, 685 (1981). The District Court awarded the plaintiff class the requested fee of $118,968.
The Court of Appeals affirmed in an unpublished opinion. No. 81-7385 (CA2, Oct. 19, 1981). Affirmance order, 671 F.{4)d 493 [465 U.S. 886, 892] (1981). We granted certiorari to consider whether it was proper for the District Court to use prevailing market rates in awarding attorney’s fees to nonprofit legal services organizations and whether the District Court abused its discretion in increasing the fee award above that based on market rates. 461 U.S. 956 (1983). 5
II
Petitioner argues that the use of prevailing market rates to calculate attorney’s fees under 1988 leads to exorbitant fee awards and provides windfalls to civil rights counsel contrary to the express intent of Congress. To avoid this result, petitioner urges this Court to require that all fee awards under 1988 be calculated according to the cost of providing legal services rather than according to the prevailing market rate. 6 The Solicitor General, for the United States as amicus curiae, urges the Court to adopt a cost-related standard only for fee awards made to nonprofit legal aid organizations. He [465 U.S. 886, 893] argues that market rates reflect the level of compensation necessary to attract profit-making attorneys, but that such rates provide excessive fees to nonprofit counsel. Because market rates incorporate operating expenses that may exceed the expenses of nonprofit legal services organizations, and include an element of profit unnecessary to attract nonprofit counsel, the Solicitor General argues that fee awards based on market rates “confer an unjustified windfall or subsidy upon legal services organizations.” Brief for United States as Amicus Curiae 6.
Resolution of these two arguments begins and ends with an interpretation of the attorney’s fee statute. The Civil Rights Attorney’s Fees Awards Act of 1976, 90 Stat. 2641, 42 U.S.C. 1988 (1976 ed., Supp. V), authorizes district courts to award a reasonable attorney’s fee to prevailing civil rights litigants. 7 In enacting the statute, Congress directed that attorney’s fees be calculated according to standards currently in use under other fee-shifting statutes:
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- “It is intended that the amount of fees awarded under [ 1988] be governed by the same standards which prevail in other types of equally complex Federal litigation, such as antitrust cases[,] and not be reduced because the rights involved may be nonpecuniary in nature. The appropriate standards, see Johnson v. Georgia Highway Express, 488 F.2d 714 (5th Cir. 1974), are correctly applied in such cases as Stanford Daily v. Zurcher, 64 F. R. D. 680 (N. D. Cal. 1974); Davis v. County of Los Angeles, 8 E. P. D. § 9444 (C. D. Cal. 1974); and Swann v. Charlotte-Mecklenburg Board of Education, 66 F. R. D. 483 (W. D. N.C. 1975). These cases have resulted in fees which are adequate to attract competent
-
- counsel, but which do not produce windfalls to attorneys.” S. Rep. No. 94-1011, p. 6 (1976).
In all four of the cases cited by the Senate Report, fee awards were calculated according to prevailing market rates. 9 None of these four cases made any mention of a cost-based standard. 10 Petitioner’s argument that the use of market rates violates congressional intent, therefore, is flatly contradicted by the legislative history of 1988.
It is also clear from the legislative history that Congress did not intend the calculation of fee awards to vary depending on whether plaintiff was represented by private counsel or by a nonprofit legal services organization. The citations to Stanford Daily v. Zurcher, 64 F. R. D. 680 (ND Cal. 1974), and Davis v. County of Los Angeles, 8 EPD § 9444 (CD Cal. [465 U.S. 886, 895] 1974), make this explicit. In Stanford Daily, the court held that it “must avoid . . . decreasing reasonable fees because the attorneys conducted the litigation more as an act of pro bono publico than as an effort at securing a large monetary return.” 64 F. R. D., at 681. In Davis, the court held:
- “In determining the amount of fees to be awarded, it is not legally relevant that plaintiffs’ counsel . . . are employed by . . . a privately funded non-profit public interest law firm. It is in the interest of the public that such law firms be awarded reasonable attorney’s fees to be computed in the traditional manner when its counsel perform legal services otherwise entitling them to the award of attorneys’ fees.” 8 EPD, at 5048-5049.
We cannot assume that Congress would endorse the standards used in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (CA5 1974), Stanford Daily, Davis, and Swann v. Charlotte-Mecklenburg Board of Education, 66 F. R. D. 483 (WDNC 1975), if fee awards based on market rates were viewed as the kind of “windfall profits” it expressly intended to prohibit.
The statute and legislative history establish that “reasonable fees” under 1988 are to be calculated according to the prevailing market rates in the relevant community, regardless of whether plaintiff is represented by private or non-profit counsel. 11 The policy arguments advanced in favor of a [465 U.S. 886, 896] cost-based standard should be addressed to Congress rather than to this Court.
III
We address now the second question presented: whether a 50% upward adjustment in the fee was – as petitioner argues – an abuse of discretion by the District Court. 12 Petitioner makes two separate but related arguments. First, she asserts that a reasonable attorney’s fee is calculated by multiplying the reasonable number of hours expended times a reasonable hourly rate and that any upward adjustment of that fee is improper. In the alternative, she argues that the 50% upward adjustment in this case constitutes a clear abuse of discretion.
A
Where, as here, resolution of a question of federal law turns on a statute and the intention of Congress, we look first to the statutory language and then to the legislative history if the statutory language is unclear. In actions to enforce federal civil rights, 1988 authorizes a court, “in its discretion,” [465 U.S. 886, 897] to “allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs.” The legislative history explains that “a reasonable attorney’s fee” is one that is “adequate to attract competent counsel, but . . . [that does] not produce windfalls to attorneys.” S. Rep. No. 94-1011, p. 6 (1976). As noted, the Senate Report identified four cases that had calculated correctly a reasonable attorney’s fee. 13
In Hensley v. Eckerhart, 461 U.S. 424 (1983), we reviewed the cases cited in the legislative history of 1988 and concluded that the “product of reasonable hours times a reasonable rate” normally provides a “reasonable” attorney’s fee within the meaning of the statute. Id., at 434. Hensley also recognized that “in some cases of exceptional success an enhanced award may be justified.” Id., at 435. 14 In view of our recognition that an enhanced award may be justified “in some cases of exceptional success,” we cannot agree with petitioner’s argument that an “upward adjustment” is never permissible. The statute requires a “reasonable fee,” and there may be circumstances in which the basic standard of reasonable rates multiplied by reasonably expended hours results in a fee that is either unreasonably low or unreasonably high. When, however, the applicant for a fee has carried his burden of showing that the claimed rate and number of hours are reasonable, the resulting product is presumed to be the reasonable fee contemplated by 1988. [465 U.S. 886, 898]
B
The issue remaining is the appropriateness of an upward adjustment to the fee award in this case. The burden of proving that such an adjustment is necessary to the determination of a reasonable fee is on the fee applicant. The record before us contains no evidence supporting an upward adjustment to fees calculated under the basic standard of reasonable rates times reasonable hours. The affidavits of respondent’s attorneys do not claim, or even mention, entitlement to a bonus or upward revision. Respondent’s brief to the District Court merely states in conclusory fashion that an upward adjustment to the fee is necessary because the issues were novel, the litigation was complex, and the results were of far-reaching significance to a large class of people. The District Court, without elaboration, accepted these conclusory reasons for approving the upward adjustment and supplied additional reasons of its own. In awarding the 50% increase, the court referred to the complexity of the litigation, the novelty of the issues, the high quality of representation, the “great benefit” to the class, and the “riskiness” of the lawsuit. The Court of Appeals, in affirming, shed no light on why it thought this substantial upward adjustment was appropriate. In a single sentence, it simply repeated the unsupported conclusions of the District Court.
The reasons offered by the District Court to support the upward adjustment do not withstand examination. The novelty and complexity of the issues presumably were fully reflected in the number of billable hours recorded by counsel and thus do not warrant an upward adjustment in a fee based on the number of billable hours times reasonable hourly rates. There may be cases, of course, where the experience and special skill of the attorney will require the expenditure of fewer hours than counsel normally would be expected to spend on a particularly novel or complex issue. In those cases, the special skill and experience of counsel should be reflected in the reasonableness of the hourly rates. Neither complexity nor novelty of the issues, therefore, is an appropriate [465 U.S. 886, 899] factor in determining whether to increase the basic fee award.
The District Court, having tried the case, was in the best position to conclude that “the quality of representation was high.” In view of the reputation of the Legal Aid Society and its staff, we have no doubt that this was true. 15 The “quality of representation,” however, generally is reflected in the reasonable hourly rate. It, therefore, may justify an upward adjustment only in the rare case where the fee applicant offers specific evidence to show that the quality of service rendered was superior to that one reasonably should expect in light of the hourly rates charged and that the success was “exceptional.” See Hensley, 461 U.S., at 435 . Respondent offered no such evidence in this case, and on this record the District Court’s rationale for providing an upward adjustment for quality of representation is a clear example of double counting. In justifying the high hourly rates used to calculate the fee award, the District Court explained:
- “The rates requested here are consonant with fee awards in cases of similar complexity and difficulty. . . . [T]hey are fair in view of these attorneys[‘] experience and expertise . . . . The quality of work performed by counsel throughout this case was high. In view of all these considerations, I do not find the requested rates, from $95 per hour to $105 per hour, excessive.” 512 F. Supp., at 683.
In justifying the upward adjustment to the fee award, the District Court merely restated these same two factors: “The quality of representation was high. The litigation was complex.” Id., at 685. [465 U.S. 886, 900]
Not only has respondent failed to show that the hourly rates failed to provide a reasonable fee for the quality of representation provided, but she candidly concedes that the “fees awarded [to her attorneys] may be at the upper end of the market for awards under 1988 . . . .” Brief for Respondent 42. Absent specific evidence to the contrary, we cannot say that rates from $95 per hour to $105 per hour for these three attorneys do not fully reflect the quality of their representation.
The 50% upward adjustment also was based in part on the District Court’s determination that the ultimate outcome of the litigation “was of great benefit to a large class of needy people.” 512 F. Supp., at 685. The court did not explain, however, exactly how this determination affected the fee award. “Results obtained” is one of the 12 factors identified in Johnson v. Georgia Highway Express, 488 F.2d, at 718, as relevant to the calculation of a reasonable attorney’s fee. It is “particularly crucial where a plaintiff is deemed `prevailing’ even though he succeeded on only some of his claims for relief.” Hensley, supra, at 434 (fee award must be reduced by the number of hours spent on unsuccessful claims). Because acknowledgment of the “results obtained” generally will be subsumed within other factors used to calculate a reasonable fee, it normally should not provide an independent basis for increasing the fee award. 16 Neither the District Court’s opinion nor respondent’s briefs have identified record evidence that shows that the benefit achieved requires an upward adjustment to the fee. [465 U.S. 886, 901]
Finally, the District Court included among its reasons for an upward adjustment a statement that the “issues presented were novel and the undertaking therefore risky.” 512 F. Supp., at 685. Absent any claim in the affidavits or briefs submitted in support of respondent’s fee request, seeking such an adjustment, we cannot be sure what prompted the court’s statement. Nowhere in the affidavits submitted in support of respondent’s fee request, nor in her brief to the District Court, did respondent identify any risks associated with the litigation or claim that the risk of nonpayment required an upward adjustment to provide a reasonable fee. On this record, therefore, any upward adjustment for the contingent nature of the litigation was unjustified. 17
In sum, we reiterate what was said in Hensley: “Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee. Normally this will encompass all hours reasonably expended on the litigation, and indeed in some cases of exceptional success an enhanced award may be justified.” 461 U.S., at 435 . We therefore reject petitioner’s argument that an upward adjustment to an attorney’s fee is never appropriate under 1988. 18 On the record before us, however, respondent established only that hourly rates ranging from $95 per hour to $105 per hour for the full 809.75 hours billed were reasonable. This resulted in a charge of $79,312. Respondent introduced no evidence that enhancement was necessary to provide fair and reasonable compensation. She therefore has failed to carry her burden [465 U.S. 886, 902] of justifying entitlement to an upward adjustment. 19 On this record, we conclude that the fee of $79,312 was “fully compensatory.” Accordingly, the judgment below is reversed only insofar as the fee award was increased by the sum of $39,656, and is otherwise affirmed.
