Supreme Court of New Jersey Will Review Attorneys’ Fee Enhancement Case

The Supreme Court of New Jersey has granted certification to review that portion of the decision in Walker v. Giuffre, 415 N.J. Super. 597 (App. Div. 2010), that involved an enhancement of the fees of the plaintiff’s counsel under the New Jersey Consumer Fraud Act and New Jersey’s Truth in Consumer Contract, Warranty and Notice Act.  [Disclosure:  I represent in the Supreme Court the plaintiff and the attorneys whose fees are at issue in Walker].  Both of those statutes contain fee-shifting provisions.  The case was at one time a class action, but the class was later decertified.

In Rendine v. Pantzer, 141 N.J. 292 (1995), the Supreme Court of New Jersey held that attorneys’ fees of a prevailing plaintiff in a fee-shifting case under the New Jersey Law Against Discrimination could be enhanced above the lodestar amount based on the contingent nature of the case.  That ruling declined to follow the 5-4 decision of the Supreme Court of the United States in City of Burlington v. Dague, 505 U.S. 557 (1992), which had rejected any enhancements for contingency under federal fee-shifting statutes.    

Last year, a 5-4 majority of the Supreme Court of the United States decided Perdue v. Kenny A., ___ U.S. ___, 130 S.Ct. 1662 (2010).  Continuing on the path set by Dague, the majority rejected a fee enhancement for the plaintiffs’ counsel that had been awarded by the district court based on counsel’s “superior work and results.”  The majority held that such an enhancement would be available only in “rare and exceptional” cases.  Both the philosophy of the majority opinion and its standards for when enhancements could be awarded appeared to conflict sharply with Rendine.

Perdue was decided one day after the Appellate Division heard oral argument in Walker.  In Walker, the Law Division, acting under the standards of Rendine, awarded the plaintiff’s counsel a 45% fee enhancement.  That percentage was within the area in which Rendine said that enhancements “ordinarily should range.”

The Appellate Division reversed the fee award and the enhancement.  That court remanded the case and directed the Law Division to apply both Rendine and Perdue in reevaluating the fee enhancement issue. 

The decision of the Supreme Court of New Jersey to grant certification on the fee enhancement issue will test whether the Appellate Division’s importation of Perdue into New Jersey law was proper.  Our Supreme Court has departed from United States Supreme Court attorneys’ fee precedents on several prior occasions.  This should be another one of those times.