Opinion

JUSTICE O'CONNOR, concurring in part and concurring in the judgment.

For the reasons explained by the dissent I conclude that Congress did not intend to foreclose consideration of contingency in setting a reasonable fee under fee-shifting provisions such as that of the Clean Air Act, 42 U.S.C. § 7604(d), and the Civil Rights Attorney's Fees Awards Act, 42 U.S.C. § 1988. I also agree that compensation for contingency must be based on the difference in market treatment of contingent fee cases as a class, rather than on an assessment of the "riskiness" of any particular case. But, in my view, the plurality is also correct in holding that the "novelty and difficulty of the issues presented, and... the potential for protracted litigation," ante at 483 U. S. 726, are factors adequately reflected in the lodestar, and that the District Court erred in employing a risk multiplier in the circumstances of this case.

The private market commonly compensates for contingency through arrangements in which the attorney receives a percentage of the damages awarded to the plaintiff. In most fee-shifting cases, however, the private market model of contingency compensation will provide very little guidance. See Riverside v. Rivera, 477 U. S. 561, 477 U. S. 573 -576 (1986). Thus, it is unsurprising that, when courts have enhanced fee awards to compensate for risk,

[p]inpointing the degree of risk [has been] one of the most subjective and difficult components of the fee computation process, and one which [has been] apt to lead to imprecision in the final award.

2 M. Derfner & A. Wolf, Court Awarded Attorney Fees, 16.04[c][i], p. 1688 (1986). Although the dissent suggests a method of calculating compensation for contingency that is theoretically more satisfying than the practice of speculating on the riskiness of each case, the dissent does not explain how the theory should be put into practice. For example, how should a court translate the extra economic risk endured by smaller firms, see post at 483 U. S. 750 -751, or by firms that take unpopular cases, see post at 483 U. S. 751, n. 15, into a percentage enhancement?

Moreover, although the dissent offers no defense of this method of compensating for risk, it leaves the door open for "extra enhancement" for "exceptional cases" that pose great " legal' risk." Post at 483 U. S. 751 -752. The "extra enhancement" presumably would be calculated based on the likelihood at the time the litigation was commenced that the particular legal claims raised by the prevailing party would have been rejected by the court. This type of enhancement clearly is subject to the many difficulties described by the plurality. Ante at 483 U. S. 721 -723. The dissent suggests that the plurality's objections "lose much of their force" because the cases in which "extra enhancement" is granted will be rare. Post at 483 U. S. 752, n. 16. But an arbitrary or unjust result is no less so for its rarity. Furthermore, the difficulties created by this type of enhancement will arise not only when the enhancement is granted, but also whenever it is sought.

To be "reasonable," the method for calculating a fee award must be not merely justifiable in theory, but also objective and nonarbitrary in practice. Moreover, if the concept of treating contingency cases as a class is to be more than symbolic, a court's determination of how the market in a community compensates for contingency should not vary significantly from one case to the next. I agree with the plurality that, without guidance as to the trial court's exercise of discretion, adjustment for risk could result in "severe difficulties and possible inequities." Ante at 483 U. S. 728. In my view, certain constraints on a court's discretion in setting attorney's fees are appropriate.

First, district courts and courts of appeals should treat a determination of how a particular market compensates for contingency as controlling future cases involving the same market. Haphazard and widely divergent compensation for risk can be avoided only if contingency cases are treated as a class; and contingency cases can be treated as a class only if courts strive for consistency from one fee determination to the next. Determinations involving different markets should also comport with each other. Thus, if a fee applicant attempts to prove that the relevant market provides greater compensation for contingency than the markets involved in previous cases, the applicant should be able to point to differences in the markets that would justify the different rates of compensation.

Second, at all times the fee applicant bears the burden of proving the degree to which the relevant market compensates for contingency. See Blum v. Stenson, 465 U. S. 886, 465 U. S. 898 (1984) ("The burden of proving that such an adjustment is necessary to the determination of a reasonable fee is on the fee applicant"); Hensley v. Eckerhart, 461 U. S. 424, 461 U. S. 437 (1983) ("Where settlement is not possible, the fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates"). I would also hold that a court may not enhance a fee award any more than necessary to bring the fee within the range that would attract competent counsel. I agree with the plurality that no enhancement for risk is appropriate unless the applicant can establish that, without an adjustment for risk, the prevailing party "would have faced substantial difficulties in finding counsel in the local or other relevant market." Ante at 483 U. S. 731.

Finally, a court should not award any enhancement based on "legal" risks or risks peculiar to the case. The lodestar -"the product of reasonable hours times a reasonable rate," Hensley v. Eckerhart, supra, at 461 U. S. 434 -is flexible enough to account for great variation in the nature of the work performed in, and the challenges presented by, different cases. "The novelty and complexity of the issues" raised in a case "presumably [would be] fully reflected in the number of billable hours recorded by counsel." Blum, 465 U.S. at 465 U. S. 898. The same can be said for most other problems posed by the litigation, such as the tenacity of the defendant. The "special skill and experience of counsel should be reflected in the reasonableness of the hourly rates." Ibid. Thus, it is presumed that, when counsel demonstrates considerable ability in overcoming unusual difficulties that have arisen in a case, counsel will be compensated for those accomplishments by means of an appropriate hourly rate multiplied by the hours expended.

Based on the above guidelines, the enhancement for risk awarded by the District Court in this case must be reversed. The enhancement is not supported by any findings of fact concerning the degree to which contingency is compensated in the relevant market. Neither the findings nor the evidence indicate that the large enhancements in this case were necessary to attract competent counsel in the relevant community. Moreover, it is clear that the District Court based the enhancement on "legal" risks and risks unique to the case. The considerations used by the District Court to justify the enhancement -the "new and novel issues" raised by the case, and the stubbornness of the defendants, 581 F.Supp. 1412, 1431 (1984) -should already be reflected in the number of hours expended and the hourly rate, and cannot be used again to increase the fee award.

Accordingly, I concur in Parts I, II, and III-A of the plurality, and concur in the judgment reversing the judgment of the Court of Appeals