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CITY OF BURLINGTON v. DAGUE ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

No. 91-810. Argued April 21, 1992-Decided June 24, 1992 After ruling on the merits for respondents, the District Court determined that they were "substantially prevailing" parties entitled to "reasonable" attorney's fees under the attorney's fee provisions of the Solid Waste Disposal Act and the Clean Water Act. The District Court calculated the fee award by, inter alia, enhancing the "lodestar" amount by 25% on the grounds that respondents' attorneys were retained on a contingent-fee basis and that without such enhancement respondents would have faced substantial difficulties in obtaining suitable counsel. The Court of Appeals affirmed the fee award.

Held: The fee-shifting statutes at issue do not permit enhancement of a fee award beyond the lodestar amount to reflect the fact that a party's attorneys were retained on a contingent-fee basis. In Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 483 U. S. 711 (Delaware Valley II), this Court addressed, but did not resolve, a question essentially identical to the one presented here. The position taken by the principal opinion in that case, id., at 723-727 (opinion of WHITE, J.)— that the typical federal fee-shifting statute does not permit an attorney's fee award to be enhanced on account of contingency-is adopted. The position advocated by Delaware Valley II's concurrence, id., at 731, 733 (O'CONNOR, J., concurring in part and concurring in judgment)— that contingency enhancement is appropriate in defined limited circumstances is rejected, since it is based upon propositions that are mutually inconsistent as a practical matter; would make enhancement turn upon a circular test for a very large proportion of contingency-fee cases; and could not possibly achieve its supposed goal of mirroring market incentives to attorneys to take cases. Beyond that approach, there is no other basis, fairly derivable from the fee-shifting statutes, by which contingency enhancement, if adopted, could be restricted to fewer than all contingent-fee cases. Moreover, contingency enhancement is not compatible with the fee-shifting statutes at issue, since such enhancement would in effect pay for the attorney's time (or anticipated time) in cases where his client does not prevail; is unnecessary to the determination of a reasonable fee and inconsistent with this Court's general rejection of the contingent-fee model in favor of the lodestar model, see, e. g., Blanchard v. Bergeron, 489 U. S. 87, 96; and would make the setting of

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fees more complex and arbitrary, hence more unpredictable, and hence more litigable. Pp. 560-567.

935 F. 2d 1343, reversed in part.

SCALIA, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and WHITE, KENNEDY, SOUTER, and THOMAS, JJ., joined. BLACKMUN, J., filed a dissenting opinion, in which STEVENS, J., joined, post, p. 567. O'CONNOR, J., filed a dissenting opinion, post, p. 575.

Michael B. Clapp argued the cause and filed briefs for petitioner.

Barry L. Goldstein argued the cause for respondents. With him on the brief were William W. Pearson, Guy T Saperstein, and Mari Mayeda.

Richard H. Seamon argued the cause for the United States as amicus curiae urging reversal. On the brief were Solicitor General Starr, Acting Assistant Attorney General Hartman, Deputy Solicitor General Mahoney, Deputy Assistant Attorney General Clegg, Harriet S. Shapiro, Anne S. Almy, and Mark R. Haag.*

*Briefs of amici curiae urging reversal were filed for the District of Columbia et al. by John Payton, Corporation Counsel for the District of Columbia, Charles L. Reischel, Deputy Corporation Counsel, and Donna M. Murasky, Assistant Corporation Counsel, and by the Attorneys General for their respective States as follows: James H. Evans of Alabama, Daniel E. Lungren of California, Robert A. Butterworth of Florida, Roland W. Burris of Illinois, Linley E. Pearson of Indiana, Robert T. Stephan of Kansas, Scott Harshbarger of Massachusetts, Frankie Sue Del Papa of Nevada, Susan B. Loving of Oklahoma, Ernest D. Preate, Jr., of Pennsylvania, Mark W. Barnett of South Dakota, Paul Van Dam of Utah, and James E. Doyle of Wisconsin; and for the Washington Legal Foundation et al. by Daniel J. Popeo and Richard A. Samp.

Briefs of amici curiae urging affirmance were filed for the Alabama Employment Lawyers Association et al. by Sanford Jay Rosen, Andrea G. Asaro, Steven R. Shapiro, John A. Powell, Leon Friedman, Julius L. Chambers, Charles Stephen Ralston, and Terisa E. Chaw; for the American Bar Association by Talbot S. D'Alemberte and Carter G. Phillips; and for the Lawyer's Committee for Civil Rights Under Law et al. by Roger E. Warin, Jerald S. Howe, Jr., D. Benson Tesdahl, Herbert M. Wachtell, William H. Brown III, Thomas J. Henderson, and Richard T. Seymour.

Opinion of the Court

JUSTICE SCALIA delivered the opinion of the Court.

This case presents the question whether a court, in determining an award of reasonable attorney's fees under § 7002(e) of the Solid Waste Disposal Act (SWDA), 90 Stat. 2826, as amended, 42 U. S. C. § 6972(e), or § 505(d) of the Federal Water Pollution Control Act (Clean Water Act (CWA)), 86 Stat. 889, as amended, 33 U. S. C. § 1365(d), may enhance the fee award above the "lodestar" amount in order to reflect the fact that the party's attorneys were retained on a contingent-fee basis and thus assumed the risk of receiving no payment at all for their services. Although different fee-shifting statutes are involved, the question is essentially identical to the one we addressed, but did not resolve, in Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 483 U. S. 711 (1987) (Delaware Valley II).

I

Respondent Ernest Dague, Sr. (whom we will refer to in place of all the respondents), owns land in Vermont adjacent to a landfill that was owned and operated by petitioner city of Burlington. Represented by attorneys retained on a contingent-fee basis, he sued Burlington over its operation of the landfill. The District Court ruled, inter alia, that Burlington had violated provisions of the SWDA and the CWA, and ordered Burlington to close the landfill by January 1, 1990. It also determined that Dague was a "substantially prevailing party" entitled to an award of attorney's fees under the Acts, see 42 U. S. C. § 6972(e); 33 U. S. C. § 1365(d). 732 F. Supp. 458 (Vt. 1989).

In calculating the attorney's fees award, the District Court first found reasonable the figures advanced by Dague for his attorneys' hourly rates and for the number of hours expended by them, producing a resulting "lodestar" attorney's fee of $198,027.50. (What our cases have termed the "lodestar" is "the product of reasonable hours times a reasonable rate," Pennsylvania v. Delaware Valley Citizens' Council

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for Clean Air, 478 U. S. 546, 565 (1986) (Delaware Valley I).) Addressing Dague's request for a contingency enhancement, the court looked to Circuit precedent, which provided that "the rationale that should guide the court's discretion is whether "[w]ithout the possibility of a fee enhancement . . . competent counsel might refuse to represent [environmental] clients thereby denying them effective access to the courts."," App. to Pet. for Cert. 131-132 (quoting Friends of the Earth v. Eastman Kodak Co., 834 F. 2d 295, 298 (CA2 1987), in turn quoting Lewis v. Coughlin, 801 F. 2d 570, 576 (CA2 1986)). Following this guidance, the court declared that Dague's "risk of not prevailing was substantial" and that "absent an opportunity for enhancement, [Dague] would have faced substantial difficulty in obtaining counsel of reasonable skill and competence in this complicated field of law." It concluded that "a 25% enhancement is appropriate, but anything more would be a windfall to the attorneys." It therefore enhanced the lodestar amount by 25%-$49,506.87. App. to Pet. for Cert. 133, 134.

The Court of Appeals affirmed in all respects. Reviewing the various opinions in Delaware Valley II, the court concluded that the issue whether and when a contingency enhancement is warranted remained open, and expressly disagreed with the position taken by some Courts of Appeals that the concurrence in Delaware Valley II was controlling. The court stated that the District Court had correctly relied on Circuit precedent, and, holding that the District Court's findings were not clearly erroneous, it upheld the 25% contingency enhancement. 935 F. 2d 1343, 1359–1360 (CA2 1991). We granted certiorari only with respect to the propriety of the contingency enhancement. 502 U. S. 1071 (1992).

II

We first provide some background to the issue before us. Fees for legal services in litigation may be either "certain" or "contingent" (or some hybrid of the two). A fee is certain

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if it is payable without regard to the outcome of the suit; it is contingent if the obligation to pay depends on a particular result's being obtained. Under the most common contingent-fee contract for litigation, the attorney receives no payment for his services if his client loses. Under this arrangement, the attorney bears a contingent risk of nonpayment that is the inverse of the case's prospects of success: if his client has an 80% chance of winning, the attorney's contingent risk is 20%.

In Delaware Valley II, we reversed a judgment that had affirmed enhancement of a fee award to reflect the contingent risk of nonpayment. In the process, we addressed whether the typical federal fee-shifting statute (there, § 304(d) of the Clean Air Act, 42 U. S. C. § 7604(d)) permits an attorney's fees award to be enhanced on account of contingency. In the principal opinion, JUSTICE WHITE, joined on this point by three other Justices, determined that such enhancement is not permitted. 483 U. S., at 723-727. JusTICE O'CONNOR, in an opinion concurring in part and concurring in the judgment, concluded that no enhancement for contingency is appropriate "unless the applicant can establish that without an adjustment for risk the prevailing party would have faced substantial difficulties in finding counsel in the local or other relevant market," id., at 733 (internal quotation marks omitted), and that any enhancement "must be based on the difference in market treatment of contingent fee cases as a class, rather than on an assessment of the 'riskiness' of any particular case," id., at 731 (emphasis in original). JUSTICE BLACKMUN's dissenting opinion, joined by three other Justices, concluded that enhancement for contingency is always statutorily required. Id., at 737–742, 754. We turn again to this same issue.

III

Section 7002(e) of the SWDA and § 505(d) of the CWA authorize a court to "award costs of litigation (including rea