Supreme Court restricts enhanced attorney fees, tightens lodestar standard

The Supreme Court issued a closely divided ruling on November 29, 2025, that significantly narrowed the circumstances under which federal courts may grant enhancements to the lodestar calculation for attorney fees in civil rights cases. Writing for the majority, Justice Alito reversed and remanded the lower court award of enhanced fees in Perdue v. Kenny A., holding that enhancements for exceptional performance by civil rights counsel are permissible only in extraordinary circumstances and must meet tightened standards.

The lodestar method, which multiplies reasonable hours by a reasonable hourly rate, has long formed the baseline for fee awards under statutes that permit prevailing plaintiffs to recover attorney fees. Lower courts could historically adjust that lodestar upward to account for factors such as risk, novelty, or exceptional performance. The new decision clarifies and narrows the situations that justify those adjustments, instructing trial courts to apply a more exacting analysis before deviating from the lodestar figure.

The immediate legal consequence is procedural. The case will return to the district court to reassess the award under the Supreme Court's new framework. For plaintiffs and their counsel, the ruling raises material stakes. Enhanced awards have been an important tool to make complex civil rights and public interest litigation economically viable, particularly where statutory damages are limited or nonexistent. By tightening the path to enhancements, the Court reduces the upside for firms and nonprofit practitioners who take on high risk and high cost cases.

The economic implications ripple beyond individual litigants. Attorney fee awards shape incentives in the market for legal services, influencing which cases lawyers accept on contingency, how public interest groups allocate scarce budgets, and the structure of litigation finance. Reduced prospects for exceptionally large fee enhancements could tilt the economics toward cases with clearer monetary relief or toward defense side work where fees are assured. This may lead to fewer high cost confrontations over systemic practices that yield social value but limited direct monetary recovery for plaintiffs.

Policymakers and state actors will be watching the impact on enforcement of civil rights laws. Many civil rights statutes rely on private enforcement to supplement public regulatory capacity. If the decision deters private attorneys from pursuing borderline claims, enforcement may shift back toward public agencies that face budget constraints. Legislative responses are possible, such as clarifying statutory fee provisions or adjusting fee award standards, though any congressional intervention would require careful drafting to navigate separation of powers concerns.

The ruling is consistent with a broader trend in recent years of the Court narrowing remedial and procedural tools that expand private enforcement. Lower courts will now face a detailed task of applying the new standard and articulating factual findings when denying or granting lodestar adjustments. Observers can expect a wave of litigation over fee petitions as counsel test the contours of what qualifies as extraordinary performance under the Court's guidance. For civil rights practitioners, funders, and clients, the decision signals a new era in which fee awards will face closer judicial scrutiny and where economic trade offs will increasingly shape litigation strategy.

For background, SCOTUSblog maintains a case file with the opinion date and links to briefs and commentary.