This is a short one, and the title of this post pretty much sums up the Minnesota Supreme Court’s opinion in State of Minnesota v. Schaffer, No. A23-0036 (June 20, 2024).
The case addressed a frequently-occurring issue in jurisdictions which permit some kind of fee recovery in eminent domain cases. Where a statute permits a property owner to recover “reasonable” attorney fees, how is the recovery calculated? By the usual “lodestar” formula (reasonable time x reasonable fee), or is it limited by the actual contractual arrangement between the property owner and her lawyer (in this case a contingency fee that resulted in a fee less than a lodestar-determined fee).
The court held rejected MDOT’s argument fee recovery under the statute “cannot exceed the amount owed to the landowner’s attorney in a contingency fee agreement[.]” Slip op. at 2. The court held:
We reiterate what we held in Cameron: the phrase “reasonable attorney fees” in section 117.031(a) refers to attorney fees calculated by the lodestar method, and thus we hold an award of reasonable attorney fees is not capped by a contingent fee agreement.
Slip op. at 3.
“Reasonable” means objectively reasonable, and not whatever the owner worked out with his or her lawyer, and is not limited to reimbursement of fees actually incurred or obligated to pay. The fee actually agreed to may be one of the factors a court may consider, but “it is to be just one factor.” Slip op. at 7.
State of Minnesota v. Schaffer, No. A23-0036 (Minn. June 20, 2024)