Walker v. Giuffre

• Decision Date: 25 January 2012
• Citation: 35 A.3d 1177,209 N.J. 124
• Parties: May L. WALKER, on behalf of herself and all others similarly situated, Plaintiff–Appellant, v. Carmelo GIUFFRE, individually, Carmelo Giuffre, d/b/a Bay Ridge Automotive Management Corp., Route 22 Auto Sales, Inc., Route 22 Automobiles, Inc., Hudson Auto Sales, Inc., Freehold Auto Sales, Inc., Freehold Automotive Limited Inc., and Freehold Jeep/Eagle, Inc., Defendants,andRoute 22 Nissan, Inc., Defendant–Respondent.Bobbie Humphries, Plaintiff–Appellant, v. Powder Mill Shopping Plaza and Holly Gardens, Inc., Defendants–Respondents.
• Court: New Jersey Supreme Court

209 N.J. 124

35 A.3d 1177

May L. WALKER, on behalf of herself and all others similarly situated, Plaintiff–Appellant,

v.Carmelo GIUFFRE, individually, Carmelo Giuffre, d/b/a Bay Ridge Automotive Management Corp., Route 22 Auto Sales, Inc., Route 22 Automobiles, Inc., Hudson Auto Sales, Inc., Freehold Auto Sales, Inc., Freehold Automotive Limited Inc., and Freehold Jeep/Eagle, Inc., Defendants,andRoute 22 Nissan, Inc., Defendant–Respondent.Bobbie Humphries, Plaintiff–Appellant,

v.Powder Mill Shopping Plaza and Holly Gardens, Inc., Defendants–Respondents.

Supreme Court of New Jersey.

Argued Oct. 25, 2011.Decided Jan. 25, 2012.

Bruce D. Greenberg, Newark, argued the cause for appellant May L. Walker (Lite DePalma Greenberg, Galex Wolf, and Mehri & Skalet, attorneys; Mr. Greenberg, Andrew R. Wolf, North Brunswick, and Steven A. Skalet, a member of the District of Columbia bar, on the briefs).

Edward A. Kopelson, Morristown, argued the cause for appellant Bobbie Humphries.

Salvatore A. Giampiccolo argued the cause for respondent Route 22 Nissan, Inc. (McElroy, Deutsch, Mulvaney & Carpenter, attorneys; Mr. Giampiccolo and Lisbeth W. Cload, Ridgewood, on the briefs).Joseph A. O'Neill argued the cause for respondents Powder Mill Shopping Plaza and Holly Gardens, Inc. (Garofalo & O'Neill, attorneys).David A. Mazie argued the cause for amicus curiae Consumers League of New Jersey (Mazie Slater Katz & Freeman, attorneys; Adam M. Slater, Roseland, on the brief).

Lisa Manshel, Millburn, and Frederic J. Gross submitted briefs on behalf of amicus curiae National Employment Lawyers Association–New Jersey (Francis & Manshel and Frederic J. Gross Law Firm, attorneys).Justice HOENS delivered the opinion of the Court.

Courts in New Jersey have traditionally adhered to the American Rule as the principle that governs attorneys' fees. This guiding concept provides that, absent authorization by contract, statute or rule, each party to a litigation is responsible for the fees charged by his or her attorney. Fees charged by one's own attorney, of course, must comply with our Rules of Professional Conduct, see RPC 1.5, and fees awarded by courts, regardless of their basis, are governed by principles of reasonableness, see R. 4:42–9; see, e.g., Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 386, 982 A.2d 420 (2009) (commenting upon reasonableness in contract-based fee award).

Notwithstanding our continued adherence to the American Rule, there are numerous statutes that include fee-shifting provisions. Those statutes do not define the method for quantification of fees, but uniformly are in accord with the overarching principles of reasonableness that we have fixed. As a result, over time, we have provided guidance and direction to our courts to utilize in considering fee applications brought pursuant to fee-shifting statutes.

Today we are called upon to consider the principles that govern attorneys' fee awards arising from statutory fee-shifting provisions anew, and we do so in the context of two separate appeals. Each of these appeals raises a threshold challenge to the continued validity of the “contingency enhancement” that this Court first adopted nearly two decades ago in the context of a fee-shifting provision, N.J.S.A. 10:5–27.1, found in our Law Against Discrimination (LAD), N.J.S.A. 10:5–1 to –49; see Rendine v. Pantzer, 141 N.J. 292, 316–45, 661 A.2d 1202 (1995). Each appeal arises from the Appellate Division's decision that recent guidance from the United States Supreme Court rejecting contingency enhancements now precludes our courts from including them in awards made pursuant to any of our statutory fee-shifting provisions. Walker v. Giuffre, 415 N.J.Super. 597, 601, 2 A.3d 1165 (App.Div.2010) (citing and construing Perdue v. Kenny A., ––– U.S. ––––, 130 S.Ct. 1662, 176 L.Ed.2d 494 (2010)). Although the two appeals arise in the context of different fee-shifting statutes and although each confronts this Court with its own unique challenges, because they present one overarching question concerning the continuing validity of the Rendine approach, we have elected to consolidate them for the purpose of issuing this single opinion.

Having considered the arguments of the parties to these appeals concerning the continuing validity of the Rendine framework both generally and as it relates to contingency enhancements, and having further considered the contrary approach to fee-shifting utilized by the United States Supreme Court in Perdue, we hold that the mechanisms for awarding fees, including contingency enhancements, that we adopted in Rendine shall remain in full force and effect as the governing principles for attorneys' fee awards made pursuant to fee-shifting provisions in our state statutes and rules. That holding notwithstanding, these appeals have made it apparent that some of the principles set forth in Rendine are in need of further explanation so that our trial courts may properly apply them and, in the process, create adequate records for review on appeal. We therefore both reiterate and explain the principles that shall henceforth govern such awards.

I.

Although it is customary to begin opinions of this Court with a recitation of the facts, the procedural history and arguments raised in the particular dispute, we depart from that tradition today. Instead, because our analysis of the two disputes that we have elected to consolidate for purposes of this opinion rests largely on our resolution of the questions raised in the Appellate Division about Rendine, we begin our analysis there.

Well prior to the time when this Court decided Rendine, we had explained the purposes behind statutory fee-shifting provisions. See Coleman v. Fiore Bros., 113 N.J. 594, 597, 552 A.2d 141 (1989). Relying principally on the legislative history that informed the enactment by Congress of the fee-shifting provision in the federal Civil Rights Act of 1976, P.L. 94–559 § 2, 90 Stat. 2641 (codified at 42 U.S.C.A. § 1988(b)), we identified three essential purposes for such statutes. Ibid. (quoting 122 Cong. Rec. 33,313 (1976) (statement of Sen. Tunney, sponsor of federal fee-shifting statute)). First, they are designed to address the “problem of unequal access to the courts.” Ibid. Second, they are intended to provide the individuals, whose rights are being protected by the statutes, with the resources to enforce those rights in court. Ibid. Finally, they operate so as to “[e]ncourag [e] adequate representation [which] is essential” to ensuring that those laws will be enforced. Ibid. In addition, we observed that fee-shifting provisions “are designed ... to promote respect for the underlying law and to deter potential violators of such laws.” Ibid.

Those expressions of purpose, as we commented, see ibid., are consonant with our understanding of the reasons that underlie the inclusion of fee-shifting provisions in similar statutes by our own Legislature. Although we found support in the federal statutes for our analysis of what our own Legislature intended when it included fee-shifting provisions in similar state statutes, we did not directly consider the mechanisms that govern the operation of those statutory fee-shifting provisions until we analyzed fee applications made in the context of two claims arising pursuant to our LAD. See Rendine, supra, 141 N.J. at 316, 661 A.2d 1202; Szczepanski v. Newcomb Medical Ctr., 141 N.J. 346, 355–56, 661 A.2d 1232 (1995).

A.

The framework we devised for calculating an award of fees pursuant to state statutory fee-shifting provisions is well-established, but the issues before us in these appeals require us to briefly reiterate that framework and, in particular, to explain the role that the contingency enhancement was intended to play. Making an award of attorneys' fees in the context of the LAD and similar state statutes begins with determining the lodestar,¹ a calculation that we described as “the most significant element in the award of a reasonable fee.” Rendine, supra, 141 N.J. at 334–35, 661 A.2d 1202. Although the lodestar is essentially derived by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate, ibid., our opinion in Ren dine included specific guidance, consistent with the requirements of RPC 1.5(a), that informs both aspects of the lodestar equation.

In particular, we admonished trial courts “not [to] accept passively” the submissions of counsel, Rendine, supra, 141 N.J. at 335, 661 A.2d 1202, directing them instead to “evaluate carefully and critically the aggregate hours and specific hourly rates advanced by counsel for the prevailing party to support the fee application,” ibid.; see also Szczepanski, supra, 141 N.J. at 366, 661 A.2d 1232 (holding that “a trial court should carefully and closely examine the lodestar-fee request to verify that the attorney's hours were reasonably expended”).

The evaluation of hours expended includes several components, including a recognition that the focus must be on “the amount of time reasonably expended” rather than merely an acceptance of “the amount of time actually expended.” Rendine, supra, 141 N.J. at 335, 661 A.2d 1202 (quoting Copeland v. Marshall, 641 F.2d 880, 891 (D.C.Cir.1980)) (emphasis in original). Moreover, we required the attorney seeking the fee award to prepare and provide a request in the form of a certification of services that is sufficiently detailed to enable the court to accurately calculate the lodestar. Rendine, supra, 141 N.J. at 337, 661 A.2d 1202 (citing Lindy Bros. Builders, Inc. v. Am. Radiator & Standard Sanitary Corp. (Lindy I ), 487 F.2d 161, 167 (3d Cir.1973)).

In that regard, although we did not require exactitude, we embraced the concept that “fairly definite information as to the hours devoted to various general activities ... and the hours spent by various classes of attorneys” was essential for the court to analyze the fee request and to...