Supreme Court Says Extraordinary Children’s Rights Lawyers Are Merely Ordinary

Marcia Lowry and Ira Lustbader are extraordinary lawyers. They are the public interest lawyers at Children’s Rights who, with the assistance of Don Keenan (remember him?) and attorneys at Bondurant, Mixson & Elmore, sued the State of Georgia:

In June 2002, Children’s Rights filed a class action against state and county officials responsible for the foster care system in metropolitan Atlanta, on behalf of the approximately 3,000 children in foster care in Atlanta. The federal complaint cites numerous systemic problems with dangerous consequences for children, among them:

  • Children languish for months in dangerous emergency shelters without necessary treatment and services, exposed to violence, sexual assault, and other illegal activity;
  • Children in foster care experience high levels of abuse and neglect;
  • Children are routinely shuffled from foster home to foster home, spending many years in state custody; and
  • Children in foster care receive inadequate health care and educational services.
  • Children in foster care are denied adequate legal representation in the Juvenile Courts due to high caseloads of attorneys assigned to represent children.

Case overview here. Complaint here.

Together, the attorneys and their staff put over 30,000 hours into the case, including reviewing a half-million documents and conducting 60 depositions. In addition to the time spent on the case, they incurred $1.65 million in out-of-pocket costs.

With that devotion and investment, they achieved an extraordinary result:

A settlement agreement was reached with Georgia officials in July 2005, requiring infrastructure changes, service guarantees, and improved oversight over child safety; and requiring the state to meet 31 specific benchmarks in reforming the child welfare system. The federal court approved the settlement in October 2005 and appointed two independent monitors to report on the state’s performance in implementing the required reforms.

Two additional settlements were subsequently reached with Fulton and DeKalb counties (metro Atlanta) which guarantee every child the right to effective legal representation throughout their involvement with the child welfare system. In May 2006, the federal court approved the right-to-counsel settlements and appointed two separate, independent monitors for Fulton and DeKalb counties, respectively. The reports issued by those independent monitors reflect how legal representation for children has improved as a result of the right-to-counsel settlements. In Fulton County, caseloads have been reduced and an independent Child Advocate Attorney’s Office has been created, but the County still has far to go to implement the required reforms. However, the legal representation of foster children in DeKalb County has improved so dramatically that in October 2008, the federal judge ended court oversight of the County’s compliance, following the monitor’s finding that DeKalb was meeting or exceeding all of the requirements of the settlement.

It’s no stretch to say those lawyers single-handedly reformed the foster care system in metropolitan Atlanta.

And they did that by spending their own money and putting in their own time, with no guarantee they would recoup any of their out-of-pocket costs, much less get paid a fee for their services. Had they been paid by the hour as they went along, their services would have been worth more than $7 million.

But they weren’t paid by the hour to pursue the case. They were paid nothing at all; instead, they paid money — $1.65 million — for the privilege of cleaning up abuse and neglect in the foster care system.

As Blawgletter explains, there’s a big difference between getting paid to defend a case and paying to pursue one. The former is safe and simple and can be done in perpetuity. The latter is risky and complicated and can only be done for as long as funds are available. 

Class actions are, by their nature, extraordinary. Few firms pursue them; they’re too expensive, too time-consuming, and too risky. Just ask Jan Schlichtmann. We do them and, like most plaintiffs’ firms, are very selective about which ones we take.

The District Court that oversaw the litigation against the State of Georgia recognized that risk, recognized the protracted and contentious nature of the litigation, and recognized that the plaintiffs’ attorneys had displayed "a higher degree of skill, commitment, dedication, and professionalism . . . than the Court has seen displayed by the attorneys in any other case during its 27 years on the bench." The District Court also recognized that, "[a]fter 58 years as a practicing attorney and federal judge, the Court is unaware of any other case in which a plaintiff class has achieved such a favorable result on such a comprehensive scale.”

Accordingly, the District Court, pursuant to 42 U.S.C. § 1988, awarded the plaintiffs’ attorneys their costs, their $7 million or so in hourly fees, and then gave them an "enhancement" of $4.5 million.

Not so fast, the Supreme Court said yesterday in Perdue v. Kenny A.

Despite the risk and expense, the Court said, the plaintiffs’ attorneys should only receive a fee "that roughly approximates the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case." Slip op., 7.

Such is commonly known as the "lodestar" analysis. The "lodestar" analysis instructs District Courts to ignore the fiscal reality of contingent fee litigation — like, as here, civil rights class actions — and pretend, after the fact, that the plaintiffs’ lawyers had been paid the whole time, just like the defense lawyers, and that the plaintiffs’ lawyers didn’t advance a dime on the case.

It’s a legal fiction, of course, adopted for a specific purpose: to penalize lawyers who pursue class action cases, despite Congress’ laws and the discretion District Courts are afforded in determining fee awards.

Sure, the Supreme Court made a few remarks about how departures from the "lodestar" could be allowed in "extraordinary" situations, and it allowed the plaintiffs’ lawyers to take another shot at "enhancement,"  but it also didn’t provide much explanation for what would make a particular case "extraordinary," other than to say that it’s "rare."

Which begs the question: if these lawyers aren’t extraordinary, then who is?

Tweet Like Email LinkedIn