Walker v. Giuffre

35 A.3d 1177, 209 N.J. 124
Supreme Court of New Jersey·Decided January 25, 2012·Published·Cited by 46 cases

Opinion

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 Ms 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 [128] 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 [129] 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 [130] operate so as to “[e]neourag[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.

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Walker v. Giuffre, 35 A.3d 1177, 209 N.J. 124 (N.J. 2012).

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