Billing Rates 2023: State says fee multipliers should face higher burden

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Fee multipliers are firmly entrenched in Missouri law and are frequently requested by prevailing attorneys. But that hasn’t kept defendants from pushing back.

In a recent opinion, the Court of Appeals Eastern District affirmed a verdict for a former prison guard who was sexually harassed on the job. A St. Francois County jury had awarded the plaintiff, Samantha Kelley $120,000 in compensatory damages and $750,000 in punitive damages on her claims that she was subjected to repeated sexual comments and lewd gestures by two male colleagues at the Farmington Correctional Center.

Kelley’s claims were brought under the Missouri Human Rights Act, which allows the prevailing party to recover attorneys’ fees from the losing side. After trial, Judge Wendy L. Wexler Horn added about $220,000 in attorneys’ fees and costs, bringing the total judgment to nearly $1.1 million.

Kelley’s attorneys at Dobson, Berns & Rich in St. Louis had cited a “lodestar” amount — that is, the hours they spent on the case multiplied by their normal hourly rates — of $144,000, but they also asked the court to apply a 1.5 multiplier to account for the risk they had taken. The judge agreed, finding that they had “demonstrated that their fee in this case has always been contingent, that taking this case precluded them from accepting other employment that would have been less risky, and that the time required by the demands of preparing this case for trial delayed work on their other cases.”

Wexler Horn drew those three factors from Berry v. Volkswagen Group of America Inc., a 2013 Missouri Supreme Court opinion that had allowed a firm to recover twice its lodestar amount. On appeal, the attorney general’s office argued that Kelley’s attorneys had failed to meet the standards set by that precedent.

Specifically, the defense argued that nothing in the affidavit filed by Dobson, Berns & Rich proved that they’d rejected less risky matters while litigating Kelley’s case — or that they would have billed for those cases by the hour. The firm specializes in plaintiffs’ side employment law and personal injury cases, where contingency fees are typical.

In other words, the attorney general’s office argued that each factor in the Berry case had to be met for a multiplier to be upheld. The Eastern District, however, declined to read the case so strictly in its Sept. 26 opinion.

“While hourly-billed cases are generally considered to be less risky than contingent-fee cases (such as this one), hourly billing is far from the only factor in assessing the relative risk assumed by counsel in representing clients, as we take judicial notice that each case has a unique risk profile, and there can be varying degrees of risk even among contingent fee cases,” the court said in an unsigned opinion.

Adding that the three Berry factors “were not held to be strict requirements or elements,” the court said “we believe that each case should be decided on a case-by-case basis, with due regard given to the three aforementioned factors relied upon by the trial court in Berry.”

The Eastern District remanded the case to St. Francois County to determine the amount of additional fees the plaintiff could recover for the time spent on the appeal. However, the attorney general’s office has indicated that it would like the Supreme Court to weigh in.

In a motion for rehearing, Matthew J. Laudano, an assistant attorney general, argued that the plaintiff’s counsel needed to demonstrate “some coherent basis for determining that the refused work presented less risk,” and that Kelley’s attorney’s assertion that the firm had rejected “other potential fee-generating cases” wasn’t enough.

“The [Eastern District]’s decision to uphold this multiplier award despite a lack of support for this second Berry factor misinterprets applicable Missouri case law,” Laudano wrote.

In an Oct. 30 order, the Eastern District declined to rehear the case. However, the attorney general’s office could still ask the Supreme Court to grant a transfer and reconsider the case.

The case is Kelley v. Missouri Department of Corrections, ED110609.