Setting Fees Under Wage/Hour Statutes Different From Collectibility of Fees, Remand to Award Fees Under Common Fund Doctrine With Directions.
Barboza v. West Coast Digital GSM, Inc., Case No. B227692 (2d Dist., Div. 4 Mar. 24, 2011) (unpublished) has a tortured history, with this being the fourth appeal--with many of the past ones involving attorney’s fees issues.
Boiled down to its essence, the lower court had previously awarded certain fees to plaintiffs’ attorneys in a wage/hour class action for successfully prevailing on individual claims after initially denying class certification. After the class certification decision was reversed, the lower court granted certification and then awarded fees to plaintiff’s class counsel fees based on a percentage of collection of certain amounts because defendant looked to be impecunious. (Plaintiffs had requested fees to be paid on a percentage of the common fund or based on a 4 times multiplier.) Plaintiffs had to engage special special postjudgment enforcement counsel, finding that a 40% contingency was the norm here, but the lower court thought the deal should be changed to align with the milestone recovery order for regular class counsel’s fees. Plaintiffs, class counsel, and special enforcement counsel appealed.
They were successful.
The lower court first erred in not basing the fee award to class counsel on the overall reasonableness of the fee given that wage/hour fee-shifting statute dictated that the award be paid by defendant rather than the class. The matter was remanded for the trial court to determine reasonable statutory attorney’s fees and devise a schedule for distributing the amounts after payment of enforcement counsel’s fees in a fair manner to the class and class counsel in the even the full amount of the judgment could not be recovered.
Next, the lower court should not have changed the 40% contingency arrangement by special enforcement counsel
Other remand instructions were issued to help guide the lower court. For example, the award from the common fund for class fee work is separate from the statutory fees, with the statutory fee award (paid by defendant) offset again the common fund award. (Lealao v. Beneficial California, Inc., 82 Cal.App.4th 19, 27 (2000).) There is a nice discussion of the common fund doctrine by the appellate court, emphasizing how it is rooted in equity and that statutory fees should be set in a way to be fully compensatory for the work performed by class counsel. The lower court was directed to determine class counsel’s fees under the wage/hour statutes, determine fee entitlement under the common fund doctrine, and determine a schedule for distribution of the amounts collected.
Comments