A U.S. appeals court is considering whether smaller law firms should be awarded the same billing rates as their Big Law counterparts. The Ninth Circuit heard arguments this summer in a case that could redefine how courts assess attorney fees in California and other western states.

The dispute stems from San Francisco-based boutique Gaw Poe LLP, which won a jury verdict finding that Prestige Consumer Healthcare—maker of Clear Eyes—violated antitrust law under the Robinson-Patman Act by charging wholesalers higher prices than retailer Costco. After the trial, Gaw Poe sought $7.6 million in attorney fees, arguing that its work justified rates of up to $1,314 per hour for partners.

U.S. District Judge Michael Fitzgerald disagreed, awarding about $3.1 million and noting that granting “Big Law rates to a four-person firm” risked setting a new precedent for future fee petitions. His ruling drew scrutiny from both sides of the bar. At the Ninth Circuit hearing in July, Judge Kim McLane Wardlaw questioned whether firm size should matter at all. “Logically, why would firm size make a difference?” she asked.

Prestige, represented by Duane Morris, defended the lower award, contending that Fitzgerald appropriately considered what rates Gaw Poe could “actually command.” Gaw Poe partner Mark Poe countered that tying fees to firm size would unfairly disadvantage plaintiffs’ firms, which often operate with leaner structures. “If we say that firm size is relevant,” he said, “then there will be a directional disparity between what defendants are paid versus what plaintiffs are paid.”

Legal experts watching the case say the court’s decision could have far-reaching implications for how judges calculate reasonable fees. Nancy Rapoport, a University of Nevada law professor and veteran fee examiner, noted that larger firms often charge more due to higher overhead—but that doesn’t always correlate with quality. “There are exceptions,” she said. Jessica Erickson, who teaches at the University of Richmond, added that “firm size should have no bearing on fee awards.”

Adam Levitin, a Georgetown University law professor, echoed that sentiment, saying fees should reflect “the skill, experience, and reputation of the attorneys and the particular challenges of a case, not the details of the attorneys’ business organization.”

The Ninth Circuit’s ruling, expected soon, may clarify whether the market rate test under federal fee-shifting statutes should adjust for firm size—or remain focused solely on individual lawyer competence and case complexity.

Meanwhile, other courts continue to grapple with large fee petitions in antitrust cases. In late September, U.S. District Judge Haywood Gilliam Jr. approved more than $19 million in fees to firms including Cohen Milstein, Farella Braun, and Quinn Emanuel for their work representing Pacific Steel Group in a $330 million verdict against Commercial Metals Company. The ruling underscores how courts are increasingly transparent in evaluating what constitutes reasonable compensation for complex commercial litigation.