Civil rights cases are generally hard to win, the plaintiffs are often unsavory and controversial, and the damages available are generally lower than most other types of cases. Given that the cases are hard to win, and the lawyer's ability to obtain a reasonable contingency fee are low, why do civil rights actions still get filed?
In 1976 Congress enacted the Civil Rights Attorney's Fees Awards Act. The purpose of the law was to encourage lawyers to take civil rights cases. Thus, Congress made reasonable attorney's fees available to plaintiff's lawyers in prevailing cases. Under the common law doctrine that has developed since the enactment of this law, lawyers are generally entitled to recoup a reasonable hourly rate for legal issues that prevailed in a civil rights action. Often, attorney's fees eclipse the damage award the client received.
Which isn't surprising, since cities fight these cases fang and claw. Suing a government official is a direct attack on the government's power to do with you as they will. Cities often refuse to settle claims for reasonable amounts in an effort to maintain power over its subjects.
Sometimes cities are reasonable, however, and they offer the plaintiff a "lump sum" settlement. What does this mean?
It means that the city will give the plaintiff some money to settle her claims, and then tell the plaintiff to pay the lawyer out of this lump sum. In other words, under a lump-sum settlement system, the lawyer is not entitled to seek attorney's fees under 42 U.S.C. 1988.
This system creates an ethical problem for the lawyer: A lawyer must not have any legal conflicts with his client. A lump-sum settlement generally offers the attorney much less in potential legal fees than he'd have received under 42 U.S.C. 1988. Yet it's uncertain whether the client would win at trial. Lawyers - at least the good ones - try to settle cases whenever possible, since trials are too risky. An ethical lawyer thus must struggle with the ability to get paid and earn a living, with the client's ability to receive redress for his rights violation. So the lump-sum system undeniably creates a problem.
Problematic or not, the Supreme Court affirmed this practice many years ago.
A lawyer in the Ninth Circuit tried getting around the Supreme Court's acceptance of the lump-sum settlement system by having his client assign the client's right to seek legal fees, to the lawyers. That is, the lawyer likely said something like this to the client: "You have a right to seek legal fees. If you give me the right to seek these legal fees on my own, I won't deduct any fees from the settlement. But if I do collect legal fees, I get to keep them all." The Ninth Circuit properly rejected this effort in Pony v. Mitchell, No. 03-56855.
I say properly because the client, in accepting the lump-sum settlement, no longer had a right to seek legal fees. If the client has no right to seek legal fees, then by definition, the client had nothing to assign to the lawyer.
The lawyer bringing the case gets, as they say, an A for effort. But the Ninth properly denied his claim.
UPDATE: Law.com has this story on the case.