Court of Appeal Applies Ninth Circuit’s Gates And Moreno Decisions.
Getting a haircut. Camp Shelby. 1941. William Perlitch, photographer. Library of Congress.
Kerkeles v. City of San Jose, Case No. H040915 (6th Dist. Dec. 18, 2015) (published) is a significant 2015 end-of-the year decision, where an appellate court adopted the Ninth Circuit’s heightened scrutiny for civil rights fee awards that were severely reduced in amount as compared to the fee claimant’s request for fees.
In this case, the parties reached a settlement in a civil rights case which expressly allowed the claimant to seek fees under a liberal 42 U.S.C. § 1988 fee-shifting statute, with the defense not contesting that fee entitlement could be had by plaintiff under this federal provision. Plaintiff subsequently requested $2.351 million in fees and costs, consisting of (1) a base lodestar of $1.448 million; (2) a 1.5 multiplier to this amount, which got the request to $2.25 million; (3) $103,000 in “fees on fees;” and (4) costs of a little over $75,000. For you readers out there, plaintiff’s counsel did a great job of providing a “roadmap” for the trial judge by submitting detailed declarations about the case, hourly rates (percipient and expert), work effort, and reasons for a positive multiplier based on counsel working 6 years on a risk-laden contingency basis. In response, the defense opposed with declarations challenging the hourly rate but only objecting to 23.85 hours of total time, then advocating that the lower court should reduce the hourly rates and further reduce the requested lodestar by 50%. The trial judge took the defense’s suggestion hook, line and sinker—reducing the hourly rates, then reducing the lodestar by another 50%, and denying a multiplier, for a total 80% reduced fee award of $436,807.50. (Costs of $23,935.07 were awarded, but plaintiff did not contest that award.) Plaintiff, however, did appeal the fee award.
The Sixth District reversed, finding that the trial judge did not provide an adequate explanation for the large reduction, especially given the pro-fee bent of section 1988 in the civil rights area. In doing so, the appellate court found that the federal approach on fee decision making needed to be followed, heavily relying on Gates v. Deukmejian, 987 F.2d 1392, 1399-1400 (9th Cir. 1992) and Moreno v. City of Sacramento, 534 F.3d 1106, 1111-1119—both of which held that substantial reductions would be subject to heightened scrutiny and that fee “haircuts” over 10% had to be explained in depth by the lower court. The panel even quoted Perdue v. Kenny A., 559 U.S. 542, 558 (2010) for the proposition that a lower court needs to provide a fee decision methodology permitting meaningful review rather than one on “an impressionistic basis.” By sending the matter back down for a “re-do,” the Sixth District also instructed the trial judge to revisit the hourly rate determination by keeping in mind that the contingency risk is a factor to be considered in lodestar analysis.