Supreme Court of Texas, No. 16-0006 (April 26, 2019)
Justice Green (opinion available here)
At the outset, the Court noted there is no legal distinction between the phrases “reasonable and necessary attorney’s fees” and “reasonable attorney’s fees.” In either case, “when a claimant wishes to obtain attorney’s fees from the opposing party, the claimant must prove that the requested fees are both reasonable and necessary.” And the amount contracted between attorney and client is relevant, but is not conclusive on the issue of reasonableness.
The Court explained that, although the lodestar method and the Arthur Andersen factors are “two seemingly different methods” for evaluating attorney’s fees, the lodestar method was always meant simply as a short-hand for the Arthur Andersen factors as opposed to a separate test or method of proof. After a review of both federal and state precedent on attorney’s fees, the Court held the “fact finder’s starting point for calculating an attorney’s fee award is determining the reasonable hours worked multiplied by a reasonable hourly rate, and the fee claimant bears the burden of providing sufficient evidence on both counts.” Sufficient evidence includes, at a minimum, evidence of (1) particular services performed, (2) who performed those services, (3) approximately when the services were performed, (4) the reasonable amount of time required to perform the services, and (5) the reasonable hourly rate for each person performing such services. Charges for duplicative, excessive, or inadequately documented work should be excluded. Although there is no per se requirement to create and introduce contemporaneous billing records, “billing records are strongly encouraged to prove the reasonableness and necessity of requested fees when those elements are contested.” (Emphasis in original).
If properly supported by evidence, this “lodestar” calculation is presumed to reflect the reasonable and necessary attorney’s fees. The lodestar calculation reflects most of the relevant Arthur Andersen factors and, therefore, an enhancement or reduction of the lodestar figure cannot be based on a consideration that is subsumed in the initial calculation (such as time and labor required, and the fee customarily charged for similar services). In order to achieve an enhancement or reduction of the lodestar figure, a litigant must produce specific evidence that would overcome the presumption of reasonableness.
For several years, the pendulum has been swinging toward courts requiring less evidence to support an attorney’s fee award, but this opinion firmly bats the pendulum back in the other direction.
