CALIFORNIA ATTORNEY'S FEES

Employment: On Remand, Appellate Court Determines That Employer Did Not Bear Penalties Or Fee Exposure Under Labor Code Section 226 Because Failure To Pay For Meal/Rest Breaks And Failure To Report Same On Wage Statements Was Not Intentional

Employers May Be Happy With Many Aspects Of This Opinion.

            We have posted already on Naranjo v. Spectrum Security Services, Inc., 13 Cal.5^th 93, 102 (see our December 18, 2022 post on top 2022 decisions), which determined that meal/rest break premium charges and failure to report on wage statements could give rise to fee exposure under various Labor Code sections.  On remand, in Naranjo v. Spectrum Security Services, Inc., Case No. B256232 (2d Dist., Div. 4 Feb. 27, 2023) (published, opinion on remand from the California Supreme Court), employers may sigh a little more of a relief.  The appellate court determined that Labor Code section 226 violations, the gist of the remand issues on appeal, only allowed penalties and attorney’s fees if the employer violations were intentional in nature.  Under the record on appeal and after supplemental briefing by the parties, the 2/4 DCA determined employer had good faith defenses, such that the penalties and fees were not recoverable under an “intentional” standard.

Arbitration, Employment: Where Defendant Employer Lost Small Merits Award And Fee Award After Reconsideration By Arbitrator, But Did Not Timely File Motions To Correct Or Vacate, Fee Award Had To Be Affirmed

Bright-Line Rules On Arbitration Procedures Adopted, With Plaintiff Employee Entitled To Fees On Appeal.

            This case may have more tips for practitioners and jurists when it comes to deadlines for parties seeking to correct and vacate arbitration awards, especially where a timely motion to confirm an arbitration award is made.  However, we briefly summarize what happened in Darby v. Sisyphian, LLC, Case No. B314968 (2d Dist., Div. 2 Jan. 26, 2023) (partially published), because an arbitration award was affirmed on appeal and the appellate court acknowledged that the winning plaintiff was entitled to fees on appeal, on remand, to the lower court.

            Plaintiff employee sued employer for various Labor Code violations.  The arbitrator found employee was owed $23,347.25 (only a partial win on the amounts she sought), and then initially found that no fees were awarded based on a prior motion to strike and plaintiff’s failure to apportion between successful/unsuccessful claims.  However, the arbitrator granted a motion for reconsideration by plaintiff, eventually awarding her $82,000 in attorney’s fees out of a requested $283,941.25 being sought.  Plaintiff timely filed a motion to confirm the arbitration award, with employer untimely filing a response to the confirmation petition and untimely filing a motion to vacate/correct the award.  The superior court judge found the employer’s papers were untimely filed, confirming the arbitration award—rulings which were appealed.   Those rulings were affirmed on review.

            Employer’s problem is that it did not timely file the response and vacate/correction papers.  The opinion has a good discussion of the time deadlines for post-arbitration award confirmation, correction, and vacatur papers at the superior court level—with a shorter 10-day deadline to respond or to vacate/correct applying to a petition to confirm awards filed fewer than 90 days after an award is served.  This deadline is jurisdictional, although there is some small amount of flexibility under the applicable statutes.  The import of the appellate decision is that these deadlines are strict in nature; and, if they are violated, the superior court must confirm the award and the appellate court is similarly bound. 

            In the end, the $82,000 in fees on a $23,347.25 award was affirmed, plus employer will be on the hook for plaintiff’s appellate fees (made clear in an unpublished portion of the opinion) as determined by the lower court on remand. 

Employment, POOF!: $55,480.60 Plaintiff Wage/Hour Award And $150,505 Gets Reversed On Appeal

Reason Is That Plaintiff Was Not Allowed A Jury Trial.

            A jury trial is a fundamental right; if that right is abridged, a reversal of a merits judgment and post-judgment fees award may well occur, as it did in Miralda v. Wu, Case Nos. B306324/B313954 (2d Dist., Div. 1 Nov. 2, 2022) (unpublished).

            What happened here is that plaintiff obtained a $55,480.60 judgment in a wage/hour bench trial, followed later by a $150,505 fee award.  All of that went away on appeal, since plaintiff was improperly denied her request for a jury trial (which was made by another defendant, but which also inured to the benefit of the other defendant not being allowed a jury trial and suffering an adverse court decision). 

Costs, Employment: Costs Award, Mainly, Affirmed On Appeal In Case Where Plaintiff Employee Suffered A Summary Judgment Loss On Whistleblower, Retaliation, And Breach Of Contract Claims

Breach Of Contract Costs Were Distinct, So That They Were Warranted Versus Costs On FEHA-Related Claims Never Determined To Be Frivolous.

            In Hussain v. Peralta Community College District, Case No. A164189 et al. (2d Dist., Div. 4 Oct. 5, 2022) (unpublished), plaintiff employee lost his retaliation, whistleblower, and contract claims against defendant through summary judgment, with the trial court awarding apportioned routine costs against him in the amount of $6,974.29.  The appellate court affirmed, although reducing the costs down to $6,812.55.  The lower court’s determination that the breach of contract claim was distinct (which would allow an award of costs unless the contract claim was inextricably intertwined with non-frivolous FEHA claims, not the case here) was sustained on appeal.  The lower court did not abuse its discretion by allocating deposition costs at 33 1/3% based upon the claims at issue.  Finally, because mainly expert witness fees related to a FEHA claim (with no determination that it was frivolous), that cost item had to be reduced from the total awarded by the trial judge. 

Employment: $54,780 Fee Award To Two Ex-Employees Affirmed On Appeal Under Labor Code Section 98.2

Result Reminds Employers To Carefully Request A De Novo Review Of An Adverse Labor Commissioner Ruling In Favor Of Ex-Employees.

            Chilpa v. American Concrete Polishing Co., Case No. B294648 et al. (2d Dist., Div. 4 Oct. 4, 2022) (unpublished) is another opinion with a cautionary warning for employers suffering an adverse wage/hour Labor Commissioner decision:  if you appeal against the ex-employees and lose again in a de novo superior court trial, you will be liable for attorney’s fees which likely will be substantially more than the Labor Commissioner awards made in the first instance.

            Two ex-employees won $15,400 aggregate against ex-employer in a Labor Commissioner hearing.  Employer “appealed” and lost again in a de novo superior court trial where ex-employees won about $31,554 in the aggregate.  But here is the kicker:  ex-employees moved for attorney’s fees under Labor Code section 98.2 (which allows the prevailing party in the de novo trial to obtain fees), and they were awarded $36,520 plus a positive 1.5 multiplier for a total fee award of $54,780.  Employer only challenged the 1.5 multiplier, but there was no indication it opposed the fee request, and the moving papers showed the ex-employees’ attorneys took the matter on contingency (a factor which can justify a positive multiplier).  So, the multiplier challenge was rejected by the appellate court.

            Again, not to beat a drum we have beaten many times before, wouldn’t employer been better off to pay the $15,400 Labor Commissioner award rather than now paying ex-employees $86,334 (inclusive of fees) as well as having to pay its attorneys for the various administrative, superior court, and appellate proceedings? 

EMPLOYMENT: Betancourt Opinion Published

2/8 DCA Reinstates Fees Award Under Wage/Hour Statutes After California Supreme Court Remand.

            On August 26, 2022, we posted on Betancourt v. OS Restaurant Services, LLC, Case No. B293625 (2d Dist., Div. 8 Aug. 25, 2022), which was unpublished at the time.  We can now report it was published on September 12, 2022.  Here is our discussion of it in the prior post:

            The 2/8 DCA had to revisit its denial of attorney’s fees to a plaintiff employee alleging missed rest and meal break violations and waiting penalties even though the lower court had awarded fees of $280,000 to plaintiff.  The reason for the revisit was the California Supreme Court’s decision in Naranjo v. Spectrum Security Services, Inc., 13 Cal.5^th 93, 102 (2022), which held that extra pay for missed breaks constitutes “wages” that must be reported on employment wage statements and give rise to Labor Code fee exposure.  Given this change in the judicial landscape, the 2/8 DCA panel reinstated the $280,000 fee award—even though plaintiff’s compensatory settlement acceptance was only $15,375.  This shows how statutory fee-shifting provisions need to be considered wisely when litigating a case where wage/hour claims can trigger fee exposure.

            BLOG OBSERVATION—This case also is must reading for employment practitioners, given that Naranjo overruled Ling and similar cases on waiting penalties. 

Employment: Nonprevailing Employees May Not Be Assessed With Routine Costs Under California’s Fair Pay Act

Court Of Appeal Follows Analogous Reasoning Which Relates To Labor Code Section 1194.

            In Lohman v. City of Mountain View, Case No. H046681 et seq. (6^th Dist. Sept. 7, 2022) (unpublished), the Sixth District reversed a $10,082 routine costs award—a sixth of the ask—against a nonprevailing employee plaintiff under a California Fair Pay Act, Labor Code § 1197.5, claim.  It determined that only prevailing employees, not employers, are entitled to costs under the Fair Pay Act, accepting the reasoning of cases under Labor Code section 1194 (an analogous statute in the court’s view) which came to the same conclusion. 

Employment: $280,000 Labor Code Fee Award Affirmed, After Remand From California Supreme Court, Where Plaintiff Employee Recovered On Missed Break Claims

Naranjo Decision Changed The Landscape.

            In Betancourt v. OS Restaurant Services, LLC, Case No. B293625 (2d Dist., Div. 8 Aug. 25, 2022) (unpublished), the 2/8 DCA had to revisit its denial of attorney’s fees to a plaintiff employee alleging missed rest and meal break violations and waiting penalties even though the lower court had awarded fees of $280,000 to plaintiff.  The reason for the revisit was the California Supreme Court’s decision in Naranjo v. Spectrum Security Services, Inc., 13 Cal.5^th 93, 102 (2022), which held that extra pay for missed breaks constitutes “wages” that must be reported on employment wage statements and give rise to Labor Code fee exposure.  Given this change in the judicial landscape, the 2/8 DCA panel reinstated the $280,000 fee award—even though plaintiff’s compensatory settlement acceptance was only $15,375.  This shows how statutory fee-shifting provisions need to be considered wisely when litigating a case where wage/hour claims can trigger fee exposure.

            BLOG NOTE:  This decision was certified for publication on September 12, 2022.

Fees, Civil Rights, Employment: USDC Central District Judge Awards Full Freight Fee Award In Waiting-Time Penalties Case

Judge Finds That Fee Award Of $342,782.50 Is Reasonable In Waiting-Time Penalties Case.

        On June 17, 2022, the Hon. R. Gary Klausner issued a fee award to the prevailing plaintiff in a waiting-time penalties case. Caley Rae Pavillard v. Ignite International, Ltd. et al., USDC Central District No. 2:21-cv-01306-RGK-Ex.

        Though the fee award is not part of a published opinion, it is interesting in several respects. 

        First, this case arose out of what should have been a payment of $3,000 to plaintiff for her modeling work during a photo shoot. The court describes the factual background: "The shoot took place on October 5, 2018. However, despite Plaintiff's request for payment, Defendant did not pay her wages until May 22, 2020 -- nearly two years later. On that date, Defendant wired $3,000 to Plaintiff's agent, LA Models, who took a 20% cut and sent the remaining amount to Plaintiff." 

         Second, while it would seem unusual for a $3,000 case to generate $342,782.50 in fees, keep in mind that thirty days of waiting time penalties could amount to $3,000 X 30 = $90,000 -- and here, payment was not made immediately after 30 days, but rather made only after more than 1 1/2 years. And the Labor Code provided a basis for awarding attorney's fees.

        Third, Judge Klausner considered the bases for the award: the legal basis for fee entitlement and the reasonableness of the request: reasonableness of hourly rates, reasonableness of hours expended, and reasonableness of a lodestar multiplier of 1.5. A request for a lodestar multiplier was rejected by the judge.

        Fourth, the judge considered that the case lasted 2 years, proceeded to a jury trial, and plaintiff "achieved complete success."

        COMMENT: Defendant could have had a better outcome by timely paying $3,000. Indeed, Defendant would have had a better outcome if the waiting-time penalties had been paid, without proceeding to a jury trial. If the fee award is upheld on appeal, Defendant will be on the hook for the fee award, and will have likely incurred significant attorney's fees defending itself. While an attorney's fees award can be appealed by a defendant, it may well be an uphill battle when an experienced judge who has participated in a jury trial considers and analyzes the factors that support a fee award, and incidentally, denies plaintiff's request for a lodestar multiplier. And appeals to the 9th Circuit are not inexpensive.

        

Employment: Defendant Winning Heavily Contested Commission Dispute Was Correctly Denied Wage/Hour Attorney’s Fees Because Plaintiff’s Case Was Not Frivolous

Even Though Plaintiff Principally Brought The Case Based On Greed/Anger, Objective Factors Showed The Denied Commission Calculation Was Complex Such That No Frivolity Was Involved.

            We have discussed this issue in the past—Labor Code section 218.5 wage/hour cases allow fees to prevailing plaintiffs liberally, but only allow prevailing defendants to recover if a case was brought or maintained in bad faith (a frivolousness standard).

            The lower and appellate courts concluded that the plaintiff’s commission case was not frivolous in Kleinberg v. Landmark Dividend, LLC, Case No. B306650 (2d Dist., Div. 8 June 1, 2022) (unpublished).  Plaintiff did lose after a 31-day bench trial.  However, the commission calculations were complex, driven by new rent figures.  Given this objective complexity, the mere fact that plaintiff was somewhat motivated by greed and anger did not override the lower court’s determination that plaintiff’s action was not brought in bad faith.  “We cannot equate ‘greed and anger’ with actual malice or ill will or furtive design or personal animosity, where there was an arguable basis, identified by the trial court, for litigating the suit.”

Costs, Employment: $17,274.23 Costs To Prevailing Defendant In FEHA Case Affirmed Because Plaintiff’s Case Was Frivolous

Rosenman Written Finding Requirement Did Not Apply To Statutory Costs Award, With 2/1 DCA Articulating A Split In Thinking On The Written Requirement Dictate of Rosenman.

            In Schoensiegel v. Abbott Laboratories, Inc., Case Nos. B312628/B314633 (2d Dist., Div. 1 May 24, 2022) (unpublished), plaintiff lost her FEHA action based on a successful summary judgment motion, with the trial court awarding the defense $17,274.23 in statutory costs based on the perception that plaintiff’s case was frivolous.  (If a case is deemed frivolous, this is a ground upon which to award costs to a prevailing FEHA defendant.)

            On appeal, plaintiff principally argued that the lower court failed to issue written predicate findings before awarding costs as required by Rosenman v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, 91 Cal.App.4^th 859, 868 (2001).  The 2/1 DCA held that the Rosenman requirement only applied to attorney’s fees, not statutory costs.  Further, it did note that Rosenman was disagreed with by Robert v. Stanford University, 224 Cal.App.4^th 67, 72 (2014), which found that the failure to issue findings should not give rise to an automatic reversal in the absence of prejudice.  The 2/1 DCA panel did not take a position on this difference in appellate thinking, but its overall reasoning seems to suggest it liked the conclusion reached in Robert. 

Employment: Plaintiff Winning A Determination That He Was An Employee Hit With Adverse Attorney Fees Award Of $34,505 Under Fee-Shifting Statute

Lower Court, Determining That The $25,753.25 Paid To Plaintiff For His Work Exceeded The Minimum Wage Rate He Was Entitled To, Awarded Plaintiff $0 On His Wage Claim – Opening The Door For Defendant To Seek Fees Under Labor Code § 98.2(c)

            In Gantman v. Stephan, Schreiber & Tabachnick CPA’s, Case No. B291932 (2d Dist., Div. 7 April 18, 2022) (unpublished), CPA plaintiff entered into a business relationship with defendant CPA firm.  The relationship fell apart after only a few months, and plaintiff filed an unsuccessful wage claim with the Labor Commissioner.  Plaintiff then appealed the adverse award to the superior court – claiming unpaid wages and unreimbursed expenses. (Labor Code § 98.2(a).)  Although the lower court found plaintiff had been an employee of defendant, it found that an agreement had not been reached as to the hourly pay rate – resulting in plaintiff’s entitlement to only the $9/hour minimum wage rate at the time, not the $200/hour rate plaintiff sought.  Because the $25,753.25 defendant had paid plaintiff for his work exceeded the minimum wage rate, the trial court awarded plaintiff $0 on his wage claim – which resulted in defendant’s entitlement to an award of attorney fees, which the lower court granted to the tune of $34,505. (Labor Code § 98.2(c).) Plaintiff appealed.

            Plaintiff, who was self-represented on appeal, failed to provide argument that the lower court erred in determining the legal basis for the award and/or abused its discretion in determining the amount of the award.  Instead, plaintiff argued simply that defendant was not entitled to fees under section 98.2(c) because the lower court erred in awarding plaintiff $0 – a decision plaintiff had already appealed to no avail, and the result of which could no longer be reconsidered based on the lapse of time since the decision in that appeal. (Cal. Rules of Court, Rule 8.264(b)(1).) As a result, the 2/7 DCA affirmed.  Additionally, the panel awarded defendant recovery of its costs on appeal.

Employment: $625,000 Fee Award To Prevailing Plaintiff Under California Family Rights Act Affirmed On Appeal

Lower Court Correctly Awarded Lodestar Fees And Properly Denied The Multiplier Request.

            The California Family Rights Act allows eligible employees to attend to family serious health conditions and bond with a newly born child.  Government Code section 12965(b)(6) allows a trial judge discretion to award attorney’s fees to a prevailing plaintiff, much like the FEHA shifting fee statute.

            In Monterroso v. Hydraulics International Inc., Case No. B299946 et al. (2d Dist., Div. 1 Jan. 4, 2022) (unpublished), plaintiff won a jury verdict under both the California Family Rights Act and FEHA, even though the FEHA interactive process verdict was reversed on appeal.  However, given that the damages under both statutes were the same, the fee entitlement was the same such that a lower court award of $625,000 in attorney’s fees was at issue, a little lower than a lodestar request of $692,616 and also factoring in a denial of a positive 2.0 multiplier request.

            The 2/1 DCA affirmed the award as being no abuse of discretion.  Although there might have been less than across-the-board success, the claims were so related such that the reduced lodestar fee award was not erroneous.  With respect to the multiplier denial, the trial judge could conclude that the hourly rates requested were sufficient to encompass contingency risk so that no further augmentation was necessary. 

Employment: Plaintiff Prevailing On 10% Of Primarily FEHA-Based Claims Properly Awarded $320,000 In Attorney’s Fees Out Of A Requested $2.1 Million Based On Overlitigation Of The Case, Limited Success, And Unexceptional Nature Of The Case

However, Denial Of Expert Fees Remanded Because Trial Judge May Have Believed He Had No Discretion To Award.

            Herron v. County of Los Angeles, Case No. B295184 (2d Dist., Div. 7 Dec. 8, 2021) (unpublished) is an interesting case which shows how trial judges have wide discretion in awarding attorney’s fees of a reasonable amount with respect to hourly rates, activities in the litigation, degree of success in the litigation, and comparison to other attorney efforts in other like kind cases.

            In Herron, a plaintiff sought to recover $2 million from County, but only won 10% of his claims to the tune of a jury verdict of $200,000.  Under FEHA, plaintiff’s counsel moved for a fee award of over $2.1 million (inclusive of a 2.0 positive multiplier) and for costs of $121,000 (including expert witness expenses).  The trial judge awarded counsel $320,000 in fees and $28,472.58 in costs (awarding no expert witness fees).  The 2/7 DCA affirmed the fee award, but it reversed and remanded on the expert witness fee denial.

            The lower court reduced lead counsel’s requested $600 hourly rate to $500 based on that attorney being a solo practitioner and previously never being awarded $600 as an hourly rate.       The appellate court found no flaw with this analysis.  The trial judge also reduced by quite a bit the hours being requested because of overlitigation, limited success, and comparison of hours the presiding jurist had seen in a more complicated employment case by another experienced lawyer in that other matter.  The Court of Appeal found that consideration of these factors was proper, especially the comparative analysis to the activities spent by an employment lawyer in a different FEHA case.  (See, e.g., Stratton v. Beck (2017) 9 Cal.App.5th 483, 496 [finding no abuse of discretion in court setting attorney’s hourly rate based on comparison of rates from similarly experienced attorneys in same field and area]; Children’s Hospital & Medical Center v. Bonta (2002) 97 Cal.App.4th 740, 783 [affirming award where “the hourly rates allowed by the trial court are within the range of reasonable rates charged by and judicially awarded comparable attorneys for comparable work”].)   Finally, given an express finding that the case was not exceptional in nature, awarding no multiplier was within the trial judge’s discretion.

            However, the refusal to award expert fees was reversed because FEHA, unlike the routine costs statute, does allow a lower court discretion to award them, with no limitation that the experts had to be ones appointed under court order.  A further examination was in order.

Employment: Even Though Wage Statement Penalty Award Is Reversed, $944,860 Fee Award To Prevailing Flight Attendants Sustained Upon Review

Penalties Will Be Recalculated And Likely Still Result In A Sizeable Penalty Award Despite Reversal, So Fee Award Was Not Disturbed.

            In Gunther v. Alaska Airlines, Inc., Case No. D077313 (4^th Dist., Div. 1 Dec. 1, 2021) (partially published; fee discussion published), Alaska Airlines was found to be in noncompliance with California state wage statement requirements, resulting in a substantial PAGA penalty award of $25 million under Labor Code section 226.3.  The lower court, substantially adopting a lodestar request but only granting a 1.25 positive multiplier rather than the 4.3 requested multiplier, awarded plaintiffs postjudgment fees of $944,860 under Labor Code sections 226(h) and 2699(g)(1)—with the defense not contesting fee entitlement.  However, the appellate court reversed the PAGA penalty award, finding it should be calculated under the less heavy-handed penalty of PAGA section 2699(f)(2).

            Alaska Airlines argued that this reversal meant the fee award should fall also, along with other challenges.  The 4/1 DCA upheld the fee award.  It found that the error in adoption of an incorrect penalty would not disturb the overall success of plaintiff, given penalties were still going to be recalculated and likely would be substantial in nature.  Put another way, plaintiffs still succeeded.  The trial court’s refusal to reduce for time spent on dismissed claims was sustained because jettisoning those claims resulted in a more efficient trial such that plaintiffs would be awarded for their counsel’s good judgment.  The appellate court also rejected the defense’s limited success challenge, finding that the unsuccessful claims were related to the successful claims, drawing upon civil rights and CEQA cases for its analysis.  Fee award affirmed even though the penalty award was sent for a remand calculation. 

Arbitration, Civil Rights, Employment: Employee’s Petition For Writ Of Mandate Granted Where Employer Was Awarded $6,912 In Attorney Fees For Successfully Bringing Motion To Compel Arbitration Of FEHA Claims

Based On The Standards Set Forth For Imposition Of Fees Under FEHA, Employer’s Arbitration Agreement Did Not Authorize Recovery Of Attorney Fees Absent A Finding That Employee’s Opposition To Motion To Compel Arbitration Was Groundless.

            California Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.) provides that a prevailing FEHA defendant may not recover attorney fees or costs absent a finding that the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so. (§ 12965(b).)

            In Patterson v. Superior Court, Case No. B312411, (2d Dist., Div. 7 October 18, 2021) (published), employer successfully sought to compel arbitration of plaintiff employee’s FEHA claims.  Afterward, employer sought $10,583 in attorney fees pursuant to a prevailing party fee provision in its arbitration agreement – with the trial court awarding it $6,912 in fees and determining that the standard set forth in § 12965(b) applied only after adjudication of the case on the merits.

            Employee petitioned for writ of mandate – with the question before the 2/7 DCA being whether an employer’s arbitration agreement may authorize the recovery of attorney fees for a successful motion to compel arbitration of a FEHA lawsuit even if the plaintiff’s opposition to arbitration was not frivolous, unreasonable or groundless.     

            Pursuant to the standards set forth under FEHA regarding the imposition of fees and costs, the answer was no – with the panel concluding “[b]ecause a fee-shifting clause directed to a motion to compel arbitration, like a general prevailing party fee provision, risks chilling an employee’s access to court in a FEHA case absent section 12965(b)’s asymmetric standard for an award of fees, a prevailing defendant may recover fees in this situation only if it demonstrates the plaintiff’s opposition was groundless.”

            The panel granted employee’s petition and directed the trial court to vacate its order granting employer’s fees and to conduct a new hearing on the fee request to determine whether employee’s opposition to the motion to compel arbitration was frivolous, unreasonable or groundless.

Employment, Multipliers, Reasonableness of Fees: No Abuse Of Discretion In Trial Court’s Award Of Attorney Fees To Prevailing Plaintiffs In DJOA Action

Amount Of Fee Award Was Justified Given Trial Court’s Analysis Of The Complexity Of The Case, Results Achieved By Plaintiffs, And Plaintiffs’ Showing To Support The Fee Request.

            The Displaced Janitors Opportunity Act (Lab. Code, §§ 1060–1065) “requires contractors who are awarded contracts for janitorial or building maintenance services at a particular site to retain certain employees working for the terminated contractor for a 60-day transition employment period, and to offer those workers continued employment if their performance during the 60-day period is satisfactory.” (§ 1061, subds. (b)(1) & (f).) Under the DJOA, an employee of the terminated contractor who was not offered employment by the successor contractor may sue the successor for back pay, including the value of any lost employment benefits. (§ 1062, subd. (a).) An employee prevailing in such an action “shall” be awarded “reasonable attorney’s fees and costs as part of the costs recoverable.” (§ 1062, subd. (c).) (Jones v. Quality Coast, Inc. (2021), 62 Cal.App.5th 372, 379–380 (2021) [discussed in our February 27, 2021 post].) The Displaced Worker Protection Act (S.F. Police Code, §§ 3300C.1–3300C.6) provides for a similar 90-day transition period. (§§ 3300C.1(c) & (f), 3300C.2(b).)

            In SEIU-USWW v. Preferred Building Services, Inc., Case No. A159790 (1^st Dist., Div. 5 October 15, 2021) (partially published – fees discussion not published), a successor janitorial contractor appealed after a class of displaced janitors and their union – suing for violations of the DJOA and DWPA – successfully moved for summary judgment and were subsequently awarded attorneys’ fees.

            On appeal, Defendant challenged the amount of fees awarded – arguing the trial court should have adjusted the lodestar downward due to overstaffing with eight attorneys, double counted the attorneys’ skill by applying a multiplier when the skill level was already factored into the lodestar, and that the 1.4 multiplier (reduced from Plaintiffs’ requested 2.0) was not supported by the factors involved in the case.  The 1/5 DCA affirmed.  The trial court properly considered and analyzed the complexity of the case, results achieved by Plaintiffs, and Plaintiffs’ showing to support the fee request.  Ninety percent of Plaintiffs’ billed hours came from lead counsel and four associates, time for attorneys billing less than 10 hours was excluded, and Plaintiffs had applied an across-the-board lodestar reduction of ten percent.  As to its other contentions, Defendant did not demonstrate that the trial court improperly double counted counsel’s skill nor abused its discretion in applying the multiplier. The trial court identified four factors warranting the multiplier – where “any one of those factors may be responsible for enhancing or reducing the lodestar.” (Krumme v. Mercury Ins. Co., 123 Cal.App.4th 924, 947 (2004).)

Employment: Employee Winning About $23,646 In Compensatory Damages In Wage Hour Dispute Properly Awarded $41,000 In Attorney’s Fees

Fee Award Was Reduced From The “Asked” $63,550 In Requested Fees.

            In Bastida v. Zairi, Case No. B301319 (2d Dist., Div. 5 Sept. 29, 2021) (unpublished), an employee (although that characterization was disputed) won about $23,646 in compensatory damages under wage/hour claims.  Plaintiff then sought $63,550 in attorney’s fees under California wage/hour fee-shifting statutes, with the attorney asking for $410 per hour—an hourly rate deemed reasonable.  However, the trial judge reduced the claimed hours such that plaintiff was awarded $41,000 in fees.  That was affirmed on appeal because the defense did not demonstrate how the award was an abuse of discretion as far as amount.

Employment, Section 998: Section 998 Offer Is Invalid If Employer Did Not Attempt To Pay Undisputed Wage Amounts Before Sending Section 998 Offer

Timing Is Everything—Pay Undisputed Amount Before The 998 Offer Or Pay Later/Issue A New 998 Offer.

            Wasito v. Kazali, Case No. B308826 (2d Dist., Div. 6 Aug. 31, 2021) (published) is must reading for employers wishing to resolve unpaid wage claims through a CCP § 998 offer where undisputed wages are due.

            In essence, employees filed a complaint seeking unpaid wages, including bonuses.  Employers made a $300,000 section 998 offer.  After that 998 offer expired, employer sent a substantial check for unpaid bonuses, interest, and penalties, a check accepted by employees.  A jury found only small amounts still owed to employees, with employer arguing that the 998 offer beat the small amounts awarded by the jury.  The lower court disagreed and awarded employees $66,700 in attorney’s fees for prevailing in small amounts under Labor Code section 218.5, a one-way fee shifting statute. 

            The 2/6 DCA affirmed.  Relying on Reid v. Overland Machined Products, 55 Cal.2d 203, 206-207 (1961), which held that undisputed wages must be paid without condition, the reviewing justices found that the section 998 offer was invalid under the Labor Code provisions requiring payment of undisputed wages.  Although employer did pay the undisputed wages after the 998 offer was not accepted, that was too late as to retroactively validate it.  The employer had two choices, neither of which were met:  pay the undisputed wages before making the 998 offer or make a new 998 offer after paying the undisputed wages.

Class Action, Employment: Eighth Circuit Court Of Appeals Reverses $1 Fee Award To Class Counsel Where Some Work Was Done Despite Failing to Segregate Compensatory/Fee Negotiations And Despite Billing Problems

Dissenting Circuit Judge Would Have Affirmed District Judge Fee Award.

            Vines v. Welspun Pipes Inc., No. 20-2168 (8^th Cir. Aug. 18, 2021) is an interesting case which shows how appellate circuit judges can have differing perspectives on approaching class action fee awards.

            What happened in this one is that class action counsel on federal/state wage hour claims, after not much litigation and after limited success on some defendants, had to take three swings at a class action settlement of the wage/hour claims against the main defendant, failing to heed the Eighth Circuit’s prohibition of not settling the merits claims and fees award issue in FLSA cases in tandem.  For purposes of forging a settlement, class counsel basically insinuated to the defense that they would be subject to exposure in much more in unearned fees if the defense did not capitulate, which it did.  The settlement valuation eventually came to around $308,000 (but at least $270,000), with class counsel wanting $96,000 in fees.  The district judge granted only $1 in fees due to certain billing practices and class counsel’s conduct in not segregating merits/fees negotiations.  (If $1 was not the correct amount, the district judge indicated that it would only award $25,000.) 

            The Eighth Circuit, in a 2-1 opinion, reversed.  The majority found that reversal was required because the district judge failed to determine the lodestar (although ruling on the appropriate hourly rates, but not calculating the rest of the equation) and to opine that some amount over $1 was likely due based on class counsel’s efforts.   However, the majority did not hamstring the district judge as far as discounting for unprofessional conduct on the merits/fees negotiations snafu.

            The dissenting judge found the $1 award was no abuse of discretion based on the conduct of class counsel, not condoning those attorneys squeezing extra fees based on the leverage of obtaining future unearned fees from the defense and failing to segregate merits/fees negotiations.

            However, the appeals court refused a reassignment to a different district judge request, such that it will be interesting to see if this is little more than a pyrrhic victory for the plaintiffs’ side.

Employment, In The News . . . . Attorney’s Fees Average More Than $405,000 Per Case And Average Settlement Is $1.2 Million In PAGA Cases

A Recent Study By CABIA So Concludes.

            Under the Private Attorneys General Act (PAGA), prevailing plaintiffs can obtain attorney’s fees for success on certain employment and workplace claims.  As reported in an OpEd article “Help business recovery, end PAGA” written by Ken Monroe in the July 18, 2021 edition of The Orange County Register, a recent study by the California Business and Industrial Alliance (CABIA) demonstrates that since creation of the law, attorney’s fees average more than $405,000 per case and the average settlement in such cases with PAGA claims is $1.2 million. 

Employment, In The News . . . . Attorney’s Fees Average More Than $405,000 Per Case And Average Settlement Is $1.2 Million In PAGA Cases

A Recent Study By CABIA So Concludes.

            Under the Private Attorneys General Act (PAGA), prevailing plaintiffs can obtain attorney’s fees for success on certain employment and workplace claims.  As reported in an OpEd article “Help business recovery, end PAGA” written by Ken Monroe in the July 18, 2021 edition of The Orange County Register, a recent study by the California Business and Industrial Alliance (CABIA) demonstrates that since creation of the law, attorney’s fees average more than $405,000 per case and the average settlement in such cases with PAGA claims is $1.2 million. 

Employment: Denial Of Multiplier In Single-Plaintiff FEHA Case, Simply Based On One Plaintiff Case, Was An Abuse Of Discretion

Remand Was Required.

            In Guerrero v. Crown Energy Services, Inc., Case Nos. D076299/D077201 (4^th Dist., Div. 1 July 7, 2021) (unpublished), a single FEHA plaintiff won a compensatory damage verdict of $207,855.60 and a punitive damage verdict of $900,000 against defendants.  Plaintiff moved for $553,835 in lodestar fees enhanced by a 2.0 positive multiplier, for a total request of $1,107,671.  The trial judge awarded $342,284 in fees, denying a positive enhancement because it was a single-plaintiff case.  The 4/1 DCA reversed, because it chronicled many cases and found that a positive multiplier is not per se unallowable in a single-plaintiff case.  A remand will occur to reassess the multiplier request.

Employment, Reasonableness Of Fees, Substantiation Of Reasonableness Of Fees: Third Circuit Court Of Appeals Affirms Denial Of Fees Where Wage/Hour Plaintiffs Had Limited Success And Fee Petition Was Not Properly Documented

Plaintiffs Only Recovered $6,601 Out Of Requested $180,000 In Damages And Attorneys Sought $118,569 In Fees.

            In Wang v. Chapei, LLC, Case No. 20-2975 (3d Cir. June 10, 2021) (nonprecendential), two wage/hour plaintiffs had their federal claim dismissed, were unsuccessful on class certification tries, and won about $6,601 out of a requested $180,000 in damages under a state statute with an employee-friendly fee shifting provision.  The district judge denied their $118,569 fee request in entirety based on (1) plaintiffs’ limited success, (2) the attorneys failing to justify their claimed hourly rates, and (3) sloppy fee petition drafting where the rate request was erroneously requested for over ten times the correct amount.  The Third Circuit affirmed, finding no abuse of discretion as well as indicating employment litigators should not expect large fee awards where the results were meager.

Employment: Employee Winning Only $32.00 On Unpaid Wages/Penalties Was Entitled To A Remand To Seek Additional Attorney’s Fees And Routine Costs

Lower Court Awarded Just $3.20 In Fees Under CCP § 1031; Only Costs Solely Incurred On Losing FEHA Claims Had To Be Excluded So As To Require A Remand.

            FEHA is a statute which has very liberal fee- and costs-shifting provisions, as interpreted by a very robust California jurisprudence under the governing statute.  Moreno v. Bassi, Case No. F078400 (5^th Dist. June 8, 2021 partially published; fee and costs issues published) is yet another case law addition to this jurisprudence.

            In this one, plaintiff was awarded $32.00 in unpaid wages/penalties under Labor Code claim, losing on all FEHA claims, losing on some non-FEHA claims, and prevailing on some non-FEHA claims.  The lower court did this: (1) awarded her $19,523 in costs; and (2) $3.20 in attorney’s fees based on a CCP § 1031 formula multiplying the wages recovered by 20%. 

            The costs award got reversed because the only costs which were barred were those due solely (and solely is an important caveat) to inclusion of the FEHA claims because plaintiff did not prevail on them and the defense did not prevail on them given that the lower court found they were not frivolous in nature. However, plaintiff was entitled to costs on the non-FEHA claims, including costs related to non-FEHA claims intertwined with the FEHA claims, the Fifth District agreeing with the analysis in Roman v. BRE Properties, Inc., 237 Cal.App.4^th 1040, 1059 (2015) to the same effect.

            On the fee issue, the lower court needed to exercise its discretion under Labor Code section 1194 to award reasonable attorney’s fees for the unpaid wage victory given that section 1194 was specific and overrode the more restricted formula under CCP § 1031. 

Employment, Section 1717: Defendant Winning Independent Contractor Determination Against Real Estate Agent Under Labor Commissioner And De Novo Superior Court Action Was Entitled To $72,519.03 In Fees

Fees Were Justified Based On Broad Contractual Fees Clause.

            In Peng v. F.M. Tarbell Co., Case No. B307484 (2d Dist., Div. 2 May 27, 2021) (unpublished), a plaintiff—a licensed real estate agent—lost a fight on whether he was an employee, versus an independent contractor, both at a Labor Commissioner and a superior court de novo level.  The problem for plaintiff was that there was a broad contractual fees clause in an independent contractor agreement which encompassed “any action, proceeding, or arbitration” between plaintiff and Tarbell “arising from or related to the agreement.”  The lower court awarded Tarbell contractual fees of $72,519.03, the full ask.  (Of interest, plaintiff was disputing $20,168.01 in unpaid wages under Labor Code provisions.)  The fee award was affirmed based on the broad contractual fees clause. 

Employment, SLAPP: Reversal Of Defendant’s Successful SLAPP Motion Necessitated Reversal Of Defendant’s $44,800 § 425.16(c)(1) Attorney Fees Award.

The Protected Activity Claimed By Defendant Supported Only An Element Of Plaintiff’s Causes Of Action, But Did Not Subject Those Causes Of Action To A Challenge Under Code Civ. Proc. § 425.16.

            In Verceles v. Los Angeles Unified School Dist., Case No. B303182 (2d Dist., Div. 7 April 19, 2021) (unpublished), FEHA plaintiff sued LAUSD claiming race and age discrimination, based on a disparate impact theory, and retaliation after being terminated from his teaching position.  Prior to termination, plaintiff had been placed on paid suspension for more than three years pending the outcome of LAUSD’s investigation into a student’s assault accusation, and had filed a discrimination complaint with the California Department of Fair Employment and Housing (DEFH) approximately a year into his paid suspension. 

            After successfully SLAPPing plaintiff’s FEHA action, by claiming each of plaintiff’s causes of action arose from its investigation which were acts in furtherance of its rights of petition and free speech within the meaning of Code Civ. Proc. § 425.16, and that plaintiff could not establish a probability of prevailing on his claims, LAUSD was granted the full amount of its motion for $44,800 in attorney fees pursuant to § 425.16(c)(1). 

            Plaintiff appealed and the 2/7 DCA reversed – finding that LAUSD had not shown that plaintiff’s causes of action arose from LAUSD’s investigation as a whole, nor from any communications made during its investigation.  In fact, plaintiff agreed that LAUSD was obligated to investigate the student’s accusation, and the existence of an official proceeding does not necessarily transform any claim related to that proceeding into an action subject to challenge pursuant to § 425.16(e)(2). 

            Because the appellate panel reversed the trial court’s granting of LAUSD’s anti-SLAPP motion, the § 425.16(c)(1) attorney fees award was also reversed.

Employment: Appellate Court Refused To Award Appellate Fees To Three Prevailing Respondent Employees In Wage/Hour Overtime Case

Reason Was That Respondents Wanted 1.33 Positive Enhancement To The Lodestar Appellate Fee Request, Necessitating A Remand To The Trial Court To Determine Appellate Fees.

            In Frattini v. First American Title Co. of Napa, Case No. A158995 (1^st Dist., Div. 1 Mar. 30, 2021) (unpublished), three misclassified employees won a total of $414,743.80 against defendant, as well as mandatory costs and attorney’s fees of an undisclosed amount under wage/hour fee shifting provisions.  Defendant appealed the merits determination, but not the costs and fees awards.  The defense lost on appeal.  Respondent employees then requested appellate fees from the 1/1 DCA (which were also allowed under the wage/hour fee shifting provisions), but their greed may have got the better of them.  The appellate court remanded to the trial court given that employees asked for a 1.33 positive lodestar enhancement from the reviewing panel (which they received by the lower court).  The lower court was best to adjudge appellate fees in light of the enhancement request being added to the mix. 

Allocation, Employment, Reasonableness Of Fees: Employee’s Limited Success On Some Compensable Wage/Hour Claims Led To Affirmance Of $17,234 Fee Award

Employee Had Requested Fees Of $168,749.47 After Garnering Compensatory Award Of $6,958.36.

            This case is another example of how non-compensable claim allocation and limited success can lead to a substantial reduction of a fee request even where there is some fee entitlement basis.

            In Caballero v. Bill Muncey Industries, Inc., Case No. D076628 (4^th Dist., Div. 1 Mar. 17, 2021) (unpublished), an employee cook at Galley at the Marina restaurant sued an individual and company who he believed were employers under wage/hour laws (including meal and rest break statutes) as well as the Unfair Competition Law.  It looks like employee sued on behalf of a class, but certification was denied, and no recovery was had on the UCL claim.  Eventually, the individual was not found liable, but the company was found to have violated unpaid overtime and wage statement violations to the tune of $6,958.36.  Employee moved to recover $168,749.47 in fees (the full value of services—with some entitlement existing, but not for losing meal/rest break claims which are not compensable under wage/hour laws), but the lower court only awarded $17,234, apportioning out non-compensable fees on some claims and also reducing for employee’s limited success in the litigation overall.

            That determination was affirmed by the 4/1 DCA.  After all, employee only prevailed against one defendant and only prevailed on two minor wage/hour claims, with the records showing that an apportionment was possible but one which was eschewed by employee’s counsel wanting the whole thing (not a good strategy, based on many, many prior blog posts).  The problem for employee is that non-compensable claims which are apportionable and limited success are prime candidates for reduction of a large fee request where there are modest returns.  That was the “end result” conclusion by the trial court, with the Court of Appeal finding no abuse of discretion in what was decided in the superior court fee proceedings. 

Allocation, Employment, Mulitpliers, Private Attorney General: 1/1 DCA Reverses $2,905,200 In PAGA Penalties Against Defendant, But Affirms $7,793,030 In Attorney Fees Inclusive Of A 2.0 Multiplier

The Fees Award Was Supported By PAGA, Section 1021.5, And The Catalyst Theory, And Apportionment Of Fees Among The Retaliation And PAGA Claims Was Neither Necessary Nor Possible, While Complexity Of Issues And Skill Of Attorneys Supported Multiplier In This Intensely Litigated Case.

            In Sargeant v. Board of Trustees of The California State University, Case Nos. A153072/A154926 (1^st Dist., Div. 1 March 5, 2021) (published) (fees discussion unpublished), a health-and-safety technician employed at Sonoma State University sued Cal State University and his supervisor alleging five retaliation causes of action for the way he was treated after raising environmental concerns related to lead paint and asbestos.  Specifically, plaintiff's causes of action fell under the Whistleblower Protection Act (Lab. Code §§ 1102.5, 6310, 6399.7, 232.5), the California Fair Employment and Housing Act (FEHA, Gov. Code, § 12900 et seq.), and one cause of action for civil penalties under the Labor Code Private Attorneys General Act of 2004 (Labor Code, § 2698 et seq.,) (“PAGA”) premised on allegations that CSU had violated various provisions of Cal-OSHA.

            The jury returned special verdicts against defendants – finding in plaintiff’s favor on three retaliation claims and on the PAGA claim, and awarding plaintiff $271,895 in past and future economic damages, plus $116,000 in noneconomic damages.  Because plaintiff elected the equitable remedy of reinstatement in lieu of the past and future economic damages, only the noneconomic damages were included in the judgment.  Additionally, the trial court ordered CSU to pay civil penalties of $2,905,200 for its various violations.

            Plaintiff then moved for more than $11.5 million in fees which included a 3.0 multiplier for three of the five attorneys representing him.  The trial court awarded $7,793,030 in fees – finding that three legal bases supported the award: (1) PAGA itself, which authorizes a fee award to a prevailing employee (§ 2699, subd. (g)(1)), (2) Code of Civil Procedure section 1021.5, which authorizes a fees award when an action results in the enforcement of an important right affecting the public interest; and (3) the “catalyst doctrine.”  Additionally, the trial court found that it was neither necessary nor possible to apportion the fees among the retaliation and PAGA causes of action.  Finally, the trial court concluded that a multiplier was appropriate given the complexity of the case, the skill of plaintiff’s attorneys, the extent to which the litigation precluded other employment, the contingent nature of the fee award, and the fact an award against the state would ultimately fall on the taxpayers, but reduced plaintiff’s requested 3.0 multiplier to 2.0.

            Defendants raised a number of challenges on appeal, but in the published portion of its decision, the appellate panel affirmed – with exception to the PAGA penalties.  The panel reversed the entire $2,905,200 in PAGA penalties – finding that although plaintiff brought viable PAGA claims, some of the PAGA claims did not themselves provide for penalties, and plaintiff did not suffer personally on those claims premised on the Cal-OSHA violations.

            In the unpublished portion of its opinion, the 1/1 DCA affirmed the attorney fees award – agreeing with the trial court’s conclusions and reasoning, and finding no abuse of discretion.

Allocation, Civil Rights, Costs, Employment: Former Employer Properly Was Denied Attorney’s Fees Where FEHA Case Had Some Substance

However, 2/3 DCA Follows Roman Opinion On When To Award Costs On Non-FEHA Claims.

            In Chevreaux v. Long Beach Memorial Medical Center, Case Nos. B291268/B292937 (2d Dist., Div. 3 Feb. 24, 2021) (unpublished), a jury returned a defense verdict in favor of a former employer on a non-FEHA, Tameny retaliation claim after she dismissed two FEHA claims (age discrimination and a CFCA violation) on the eve of trial.   The lower court subsequently denied attorney’s fees to defendant after finding the dismissed FEHA claims were not baseless.  The trial judge also granted plaintiff’s motion to tax costs finding he could not award any costs to the defense because it did not apportion the costs expended to defend non-FEHA claims from those attributable to its defense of her FEHA claims, as required by the 2/7 DCA’s decision in Roman v. BRE Properties, Inc., 237 Cal.App.4^th 1040, 1059 (2015). 

            The 2/3 DCA mainly affirmed, but it reversed and remanded to see if the defense might be awarded some routine costs for jury fees, court reporter fees, and trial exhibits.  It agreed that there was enough evidence to show an inference of age discrimination because plaintiff, aged 62, was replaced with women who were 50 and 44 even though the claims were dismissed before trial.  This Division also agreed with the reasoning in Roman, which allows a lower court discretion to see if non-FEHA claims did not overlap so as to be able to apportion out costs not related to the nonfrivolous FEHA claims.  Because the jury only considered one non-FEHA claim, it was fair game for the trial judge make factual determinations as far as awarding jury fees, court reporter fees, and trial exhibit costs in favor of the defense (considering whether the costs were reasonable, necessary, and whether there was an agreement to split court reporter fees). 

Costs, Employment: Trial Court’s Costs Award To Defendant Prevailing Against FEHA And DJOA Claims Proper Where The Costs Were Awarded Only For The DJOA Claims

Costs May Not Be Awarded To Prevailing FEHA Defendants Unless Plaintiff’s Action Was Frivolous, Unreasonable, Or Groundless When Brought Or Continued, But A Trial Court May Award Costs To A Prevailing Defendant For Non-FEHA Claims Litigated With FEHA Claims.

            In Jones v. Quality Coast, Case No. B297425 (2d Dist., Div.5 February 22, 2021) (unpublished), plaintiff had worked as a janitor for approximately 11 years at an air traffic control facility administered by the FAA – being employed by various janitorial companies which contracted with the FAA during those years.  When defendant became the janitorial service provider, it did not hire plaintiff.

            Plaintiff sued – claiming race and gender discrimination pursuant to FEHA, and a violation of the Displaced Janitor Opportunity Act (DJOA) (Labor Code § 1060 et seq.) which obligated defendant to hire “employees” of the predecessor company for a 60-day period following termination of predecessor company’s contract with the FAA. 

            When plaintiff’s FEHA claims were defeated by jury verdict, and plaintiff advised the trial court that he had presented at trial all of the evidence he would present in the DJOA claim, defendant successfully moved for judgment on the basis that plaintiff was a supervisor, not an employee as defined by the DJOA, and, therefore, not entitled to protection under the DJOA.  Additionally, the trial court determined defendant to be the prevailing party and awarded it the costs it incurred in the DJOA claim.

            Plaintiff appealed, but the appellate panel affirmed.  Substantial evidence supported the trial court’s finding that plaintiff was a supervisory employee and, therefore, not entitled to protection under the DJOA which requires contractors who are awarded contracts for janitorial or building maintenance services at a particular site to retain certain employees working for the terminated contractor for a 60-day transition employment period, and to offer those workers continued employment if their performance during the 60-day period is satisfactory. (Lab. Code § 1061(b)(1) & (f).) The DJOA defines an “employee” as a person who works at least 15 hours per week providing janitorial or building maintenance services but who is not a “managerial, supervisory, or confidential employee, including those employees who would be so defined under the federal Fair Labor Standards Act.” (§ 1060(c).)

            The trial court’s costs award to defendant was proper.  Under FEHA, costs may only be awarded to a prevailing defendant if plaintiff’s action was frivolous, unreasonable, or groundless when brought, or if plaintiff continued to litigate after it clearly became so.  However, a trial court may award costs for non-FEHA claims litigated with FEHA claims.  The trial court properly awarded costs to defendant, under Code Civ. Proc. § 1032, for prevailing on plaintiff’s DJOA claim.

Deadlines, Employment, Reasonableness Of Fees: $84,107.50 Fee Award, With Stipulated-To Small Reduction, Affirmed On Appeal In Wage/Hour Win After Two-Day Bench Trial

Small Claims Work Excluded, So The Ultimate Modified Award Was $83,555; Compensatory Award Was $30,929.94 Plus Interest.

            In Ojeda v. Azulay, Case No. B302440 (2d Dist., Div. 3 Feb. 10, 2021) (unpublished), plaintiff employee prevailed against defendant employers on three of eight Labor Code claims after a two-day bench trial, and was awarded $30,929.94 in damages plus interest.  That, of course, gave rise to wage/hour fee entitlement, with plaintiff moving for $126,161.25 (lodestar of $84,107.50 plus a 1.5 multiplier) in fees and $4,910.99 in costs.  Plaintiff had to admit that he was a couple of days late in filing the fee motion, but he explained why.  Despite an opposition, the lower court awarded the $84,107.50 lodestar request without a multiplier, prompting an appeal by the other side.

            The untimeliness argument did not resonate because plaintiff fell on his sword and the lower court impliedly found good cause to consider the merits of the fee motion, all the more so because there was no reporter’s transcript of the fee hearing to show otherwise.  On the merits as to the amount of the fee award, no abuse of discretion was shown, with plaintiff admitting that a minor $552.50 for related small claims work should not have been included—something the lower court failed to deduct, but the appellate court did, affirming the remainder of the award.  Requesting compensation for a 2-day bench trial, 197.9 hours at $425/hour, was not seen as being patently outrageous as far as a lodestar fee request. 

Appealability, Employment, Intervenors, Prevailing Party, Section 1717: Bevy Of Appealability Issues And Prevailing Party Issues Were Resolved By 4/1 DCA Dispute Between Former Employer And Employee Over Return And Use Of Documents On A Jump Drive

Employee Did Prevail On Employer’s Contract Claims, But Lower Court’s Reduced Fee Award For Prevailing On Labor Code Claims Was No Abuse Of Discretion—Given Attorney Intervenors Did Timely Appeal And Contest Merits Based On Their Attorney’s Lien Interest In Fees/Costs Awards.

            This next case, Premier Mechanical Group, Inc. v. Harvey (Edwards), Case No. D075663 (4^th Dist., Div. 1 Jan. 20, 2021) (unpublished), is procedurally complicated, but confronted numerous issues on appealability, prevailing party, and reduced Labor Code fee award issues.

            There, former employer and former employee got involved in a real ado centering on employee’s return and use of documents on a jump drive, inspiring various contract/tort claims by employer as plaintiff and primarily Labor Code claims by employee as cross-complainant.  Employee was represented by counsel during some phases of the litigation.  Eventually, a jury found against employer on its contract claim (finding a breach, but no damages), but awarding employer $95,000 on a non-contract unlawful audio/video recording claim against employee.  On the cross-complaint, the jury found employer had failed to pay employee for all work performed, awarding $1,940, although finding against employee on the remaining cross-claims.  Employee then moved to recover over $1 million in attorney’s fees and $57,039 in costs as the prevailing party under both the complaint and cross-complaint.  The lower court did not believe employee prevailed under the contract on the complaint and awarded $10,500 in reduced fees on the cross-complaint.  $57,039 in statutory and nonstatutory costs also were awarded to employee.  That provoked a lot of appeals, with employee’s attorney filing a notice of attorney’s lien against the client’s monetary recoveries and with employee then proceeding in pro per.  Employer then successfully moved to strike the costs award in entirety.  Employee’s substituted-out attorneys then moved to intervene for purposes of protecting their rights to recover attorney’s fees and costs in the litigation, which was eventually granted after employee in pro per and employer reached a settlement.  Attorneys filed appeals, as proposed intervenors, of various fee and costs rulings, with the lower court granting the motion to intervene to address claims for fees and costs against employer but not to seek any relief from employee.  However, the lower court did amend the fees order to direct the fees paid to the attorneys rather than employee.  Another appeal followed by employee’s attorneys. 

            Employer moved to dismiss the attorneys’ appeal, but that was denied.  As intervenors, the attorneys had an independent right to pursue fees and costs, no matter what settlement was reached between employee (former client) and employer.  Their notice of appeal was timely based on the prior entry of judgment not including the fees/costs order and based on the fact that the new order awarding them fees and costs as intervenors, later, was independently appealable.  The fact that the case, as pled, was unlimited civil in nature did not mean an appeal had to be made to the superior court appellate division; the DCA had appellate jurisdiction. 

            On the merits, the 4/1 DCA panel decided that prior orders on fees and costs could be revisited by attorneys because the later order directing fees/costs to them was a substantial modification which was independently appealable.  The lower court erred in not awarding fees and costs to employee (which would be for the benefit of her counsel filing the attorney’s lien) on employer’s complaint because employee beat contract claims, with the unlawful recording claim being a non-contractual claim.  Given that fact, the prior order vacating costs had to be considered in fairness to the intervenor attorneys.  With respect to the Labor Code attorney’s fees award, the reduction by the lower court was reasonable, compensating for 30 hours of work at the rate of $350 per hour.  Nothing demonstrated that the lower court’s apportionments and reductions were out of line under an abuse-of-discretion standard.  Remand ordered to the superior court on fees and costs to employee’s attorneys on employer’s contract-based complaint claim. 

Employment: Reversal Of Shoulder Injury Portion Of Jury Verdict Required A Retrial And Reversal Of $503,273.50 FEHA Fee Recovery Award Until Retrial/Settlement Is Achieved

Case Is Must Reading On Reasonable Accommodation/Interactive Process FEHA Claims.

            FEHA plaintiff in Shirvanyan v. L.A. Community College Dist., Case Nos. B296593/B297419 (2d Dist., Div. 1 Nov. 30, 2020 unpublished; Dec. 29, 2020 published) won a $2,899,670 economic/emotional distress damages award based on claims that District failed to make reasonable accommodations and engage in an interactive process relating to her wrist and shoulder injuries.   The trial judge then awarded plaintiff $503,273.50 in fees under the FEA attorney’s fee shifting provision—which highlights how large fee awards can be in this substantive area. 

            District’s appeal resulted in a reversal and remand of both the jury verdict and fees award.  The verdict was reversed and remanded for a new trial because there was insufficient evidence on the shoulder injury component of the case, such that both liability and damages needed to be retried to see what occurred when the matter was limited to the wrist injury.  When the underlying judgment fell, the fees award fell also—with the appellate court reminding the trial judge to adjudge any future fee proceeding based on plaintiff obtaining limited success based on the outcome of this very appeal. 

Employment, Section 998: 998 Offer During Arbitration Did Not Allow Arbitrator To Determine There Was A Prevailing Party, Just Reasonable Fees/Costs Under Wage/Hour Statutes

Arbitrator’s “Prevailing Party” Determination Properly Corrected By Superior Court.

            In Geiger v. Floyd’s 99-California, LLC, Case No. G056747 (4^th Dist., Div. 3 Nov. 18, 2020) (unpublished), employee sued for wage/hour violations, with the individual claims ordered to arbitration.  The employer served a CCP § 998 offer offering to settle those claims for $10,000, with reasonable attorney’s fees and costs to be determined by the arbitrator.  The employee accepted the 998 offer.  Employee moved for $31,775 in fees under various wage/hour fee-shifting provisions and $2,402.29 in costs.  The arbitrator awarded employee $12,500 in fees and $2,327.29 in costs, in addition to the $10,000 base settlement amount under the 998 offer.  However, the arbitrator also indicated that employee was the prevailing party, which prompted employer moving to correct the award to delete this determination.  The trial judge confirmed the award, but he did correct it to remove the “prevailing party” determination, prompting an appeal by employee.

            The 4/3 DCA, in an opinion penned by Acting Presiding Justice Fybel, agreed that the “prevailing party” deletion by the superior court was correct.  Employee only gained fees and costs through the 998 “settlement agreement,” given that employer denied liability in the 998 offer.  As such, employee was correctly determined not to be a “prevailing party” under any other rubric. 

Allocation, Employment, Section 998: Cruz v. Fusion Buffet, Inc. Is Now A Published Decision

Labor Code Cost-Shifting Provisions Trumped Code of Civil Procedure Section 998’s Cost-Shifting And Meant No Fees/Costs Recovery For Successful Section 998 Defendants.

            We discussed Cruz v. Fusion Buffet, Inc., Case No. D075479 (4^th Dist., Div. 1), in our October 17, 2020 post, which was unpublished at the time.

            In Cruz, defendants unsuccessfully appealed the fees/costs awarded to plaintiff who had prevailed in various wage/hour violations against her former employer but not against certain alter ego individual defendants.  Defendants argued that the fees/costs should have been apportioned between compensable and non-compensable claims, that the trial court was required to deny plaintiff’s motion for fees/costs because she had obtained a less than $25,000 compensatory award in a civil unlimited case, but the alter ego defendants also argued that the trial court abused its discretion in failing to award their requested Code Civ. Proc. § 998 fees/costs for beating their respective § 998 offers of one dollar.

            Although the 4/2 DCA panel acknowledged that Plancich v. United Parcel Service, Inc., 198 Cal.App.4^th 308, 310-312 (2011) might dictate a different result under Labor Code section 1194, the panel disagreed with Plancich’s analysis and sided with the view that the one-sided, pro-plaintiff statute prevailed over section 998 (which dealt only with section 1032 costs).

            Cruz was certified for publication on November 9, 2020.

Employment, Multipliers, Costs: Employee Obtaining Partial Success In FEHA Case Properly Awarded $695,000 In Attorney’s Fees, No Expert Witness Fees, And Some Routine Costs

Plaintiff’s $2 Million Request, Inclusive Of A 2.0 Positive Multiplier, Did Not Gain Traction.

            Partial success and high hourly rates can often lead to reductions and rejection of a multiplier in contingency-driven cases under FEHA.  That is what basically occurred in Do v. Raytheon Co., Case No. B293950 (2d Dist., Div. 4 Oct 27, 2020) (unpublished).

            A FEHA plaintiff obtained a total $1.75 million compensatory/punitive damages award against his employer, prevailing on two out of eight claims.  Plaintiff then moved to recover close to $2 million in attorney’s fees under a FEHA shifting statute, $55,322.29 in expert witness fees, and other routine costs.  At the end of the day, the lower court awarded $695,000 in attorney’s fees, no expert witnesses fees, and some routine costs (taxing some messenger, mock trial, and jury consultant expenses).

            All of these determinations were affirmed on appeal.  No multiplier was justified, despite this being a contingency matter, because high hourly rates were being requested and plaintiff did not prevail on a significant number of claims.  Decreasing the fee claim for partial success was totally acceptable under California law, with the reduction off of the lodestar amount (around 20%) being okay.  Expert witness fees were properly denied because the experts did not testify at trial, such that they were not presumptively necessary or reasonable.  Finally, CCP § 1033.5 reasonableness requirements do govern FEHA costs requests, with the lower court’s discount of certain routine requests—messenger, mock trial, and jury consultant expenses—not being an abuse of discretion. 

Allocation, Employment, Section 998: Plaintiff Employee, In Unlimited Civil Case, Winning Limited Jurisdiction Damages Properly Awarded Wage/Hour And Break Claim Intertwined Fees

Section 998 Cost-Shifting Did Not Preempt Labor Code Cost-Shifting Provisions So As To Allow Fee and Costs Recovery To Certain Defendants.

            Cruz v. Fusion Buffet, Inc., Case No. D075479 (4^th Dist., Div. 1 Oct. 15, 2020) (unpublished) is an interesting unpublished decision discussing the intersection of Labor Code costs shifting and CCP § 998 costs shifting.  In the end, which scheme prevailed—stay tuned, but the employment provisions did.

            Plaintiff ex-employee sued for various wage/hour violations, including meal and rest breaks, eventually winning a compensatory bench trial award under $25,000 against employer but not against certain putative alter ego individual defendants, even though the matter was filed as an unlimited jurisdiction matter.   Plaintiff moved for fees under various Labor Code provisions against employer to the tune of $107,118.75 in fees (inclusive of a 1.25 multiplier) and to the tune of $4,583.35 in costs.  The alter ego defendants moved for fees and costs against plaintiff in the sum of $22,735.  Defendants moved to strike/tax costs claimed by plaintiff, and plaintiff moved to strike/tax costs asserted by the alter ego defendants.  In the end, the lower court granted plaintiff’s fees motion for the much lesser amount of $47,132.50, denied the defense motions to strike/tax costs, denied the alter ego defendant’s fees motion, and granted plaintiff’s motion to strike/tax costs as to the alter ego defendants. 

            Defendants timely appealed, but all of the post-judgment orders were affirmed.

            Plaintiff’s fee/costs award was proper because the lower court was not required to deny a fee/costs request where the compensatory award in an unlimited matter was one which could have been awarded by a limited jurisdiction court—it was a discretionary decision, and there was no abuse of discretion under the circumstances.  The defense argued that the lower court should have apportioned fees between compensable wage/hour claims and non-compensable meal/rest break claims, but the trial judge’s determination that the fees were inextricably intertwined ended the challenge based on the interrelated nature of proof relating to all of these claims.  Finally, the fees were not grossly inflated and unreasonable given there was fairly detailed fee substantiation and the trial court observed the conduct of counsel in a fee request which was not hugely substantial in nature—bolstered by a more than half reduction in requested fees.

            The interesting part of this opinion is whether the alter ego defendants, who sent a CCP § 998 offer which was successful, were properly refused costs requested against plaintiff.  The problem here was that the Labor Code costs-shifting provisions were inapt for these defendants, such that section 998 was the only avenue--but it could not prevail over the more specific employment costs-shifting provisions.  The 4/2 DCA panel acknowledged that Plancich v. United Parcel Service, Inc., 198 Cal.App.4^th 308, 310-312 (2011) might dictate a different result under Labor Code section 1194, but the panel disagreed with Plancich’s analysis and sided with the view that the one-sided, pro-plaintiff statute prevailed over section 998 (which dealt only with section 1032 costs).  On the alter ego defendants’ argument that fees and costs were justified under Labor Code section 218.5, no fees/costs-shifting was warranted based on the lower court’s finding that plaintiff did not bring the alter ego case in bad faith; she presented proof of same, but simply lost.  All post-judgment orders affirmed.

BLOG UPDATE: Cruz was certified for publication on November 9, 2020.

Arbitration, Employment: Although Arbitration Clause Had Invalid Attorney’s Fees/Costs Provision Relating To FEHA Claims, It Was Severed Such That Motion Denying Arbitration Was Reversed

Severability Saved The Day!

            In Conyer v. Hula Media Services, LLC, Case No. B296738 (2d Dist., Div. 8 Aug. 26, 2020) (published), the appellate court reversed a trial judge’s decision denying arbitration to an employer even though employee acknowledged receiving a handbook with the arbitration clause but argued that there was an employer duty to highlight the clause.  However, the arbitration clause did have an infirm attorney’s fees/costs provision, requiring each party to pay a pro rata share of the arbitrator’s fees and costs.  For FEHA claims, the employee does not have to pay fees and costs greater than the amount to file a claim under Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4^th 83, 112 (2000).  The arbitration clause also provided that the arbitrator shall award fees to the prevailing party carte blanche, despite the fact that a prevailing defendant in a FEHA case can only recover fees if the plaintiff’s action was frivolous in nature.  (Chavez v. City of Los Angeles, 47 Cal.4^th 970, 985 (2010).)  However, the severability doctrine came to the rescue—the agreement was not so permeated with unconscionability such that the fees provisions could be severed out so as to leave an enforceable agreement.  That is how the appellate court ruled, reversing the denial of the motion to compel arbitration.