Texas Supreme Court Tells Bar and Bench to Follow the Lodestar: Post-Opinion Amicus Brief in Rohrmoos v. UTSW, No.16-0006 (Tex. 2019)
6 Pages Posted: 20 Jun 2019
Date Written: June 7, 2019
FROM ARTHUR ANDERSEN TO ROHRMOOS: SCOTX GOES FEDERAL ON FEE-SHIFTING
In April 2019, the Texas Supreme Court handed down what is destined to become the new leading case for the manner in which the prevailing party proves up its attorney’s fees in cases where either a contract or a statute authorizes the shifting of fees to the opponent as an exception to the American Rule. Rohrmoos Venture v. UTSW DVA Healthcare, LLP, No. 16-0006, 2019 WL 1873428 (April 26, 2019).
The Texas High Court said it was clarifying its prior jurisprudence on the matter, rather than overruling it, but Rohrmoos nevertheless marks a major step toward making the determination of reasonable and necessary fee awards more transparent, and more predictable, because it requires more detailed evidence on work-effort compared to what was previously routinely deemed sufficient under the Arthur Andersen fee factors as conventionally applied by trial courts and intermediate courts of appeals. See Arthur Andersen v. Perry Equipment Corporation, 945 S.W. 2d 812 (Tex. 1997).
Rohrmoos sets a new precedent because it essentially adopts the federal Lodestar approach for universal application in Texas state court, which was previously viewed as an optional method to present a fee claim (testimony on an attorney’s hourly rate and actual hours spent on discrete tasks was required when an attorney elected to use the Lodestar method to substantiate a fee claim), or limited to certain contexts, such as employment discrimination cases, where the relevant Texas statute that permits fee recovery (the TCHRA) is an analogue of the federal civil rights act, under which federal court grant fee applications based on the Lodestar method. See El Apple I, Ltd. v. Olivas, 370 S.W. 3d 757 (Tex. 2012).
Under Rohrmoos, specifics on what legal work was actually performed, and by whom, will be required in all fee-shifting cases. Generalities will no longer do. And since there is always an element of uncertainty in predicting how an appellate court will rule, attorneys will do well to err on the side of providing more detail, rather than the minimal amount, and will have every reason to support their fee testimony with contemporaneous time-keeping records.
A motion for rehearing is forthcoming in Rohrmoos in June 2019.
This post-opinion amicus curiae letter brief urges the Texas Supreme Court to additionally address whether, and to what extent, Rohrmoos applies outside the fee shifting context, such as in cases where Texas attorneys sue former clients for unpaid fees, and whether the Lodestar should be used by attorneys and lower courts when the legal theory for fee recovery is not a valid contract, but an alternative theory, such as quantum meruit or common-law suit on account (open account, sworn account under Rule 185 of the Texas Rules of Civil Procedure, or account-stated).
Keywords: attorney’s fees, civil procedure, Texas Supreme Court, reasonableness and necessity of fees, Lodestar, attorney-client relationship
JEL Classification: K10, K12, K31, K40, K41
Suggested Citation: Suggested Citation