CALIFORNIA ATTORNEY'S FEES

Costs, Fees On Fees, Lodestar: Fee Award Reversed Because Unavailability Of Out-Of-Venue Counsel Should Have Been Considered, 30% Reduction For Pre-Trial Settlement Efforts Was Unwarranted, And Fees On Fees For Reply Work Should Have Been Considered

However, Denial Of Expert Witness Fees As Costs For Non-Court Ordered Witness Was No Abuse Of Discretion.

               In California Open Lands v. Butte County Dept. of Public Works, Case No. C097297 (3d Dist. Mar. 4, 2024) (unpublished), plaintiff reached a settlement with a county government in a conservation easement case with Clean Air Act issues.  Nonprofit plaintiff moved for $766,078 in private attorney general fees and $59,325.07 in costs, with hourly rates based on San Francisco rather than Butte County rates.  The lower court partially granted the fee request, but used lower Butte County rates because it did not deem the matter complex, reduced fees by 30% based on perceived pre-lawsuit settlement proposals by the municipal entity, and did not award work on reply papers for the “fees on fees” request.   It also denied the costs request, most of which encompassed expert witness work for experts neither authorized by the court nor subject to CCP § 998 shifting.

               The appellate court reversed and remanded the fee award on three grounds:  (1) nonprofit did produce evidence that it could not retain local counsel versed in conservation easement and Clean Air Act matters, which needed a revisit for whether higher out-of-market rates were justified; (2) the 30% reduction for settlement efforts had no evidentiary support in the record; and (3) reply paper work should be considered in awarding attorney’s fees on the “fee on fee” request.

               With respect to the expert fee costs denial, those determinations were affirmed.  Nothing showed that one of the experts was ordered by the court, so it was not a proper costs item.  Another expert was a consulting expert, with nothing cited to show this was a proper cost.  Finally, nothing in the routine cost statute allowed staff costs to be awarded for the work of an executive director of the nonprofit to enforce the conservation easement.

Fees On Fees, SLAPP: Trial Court’s Additional Award To Successfully SLAPPing Defendant Of $15,660 In Fees And $368.44 In Costs After Initial Fees Award Of $10,910 And $60 In Costs Was No Abuse Of Discretion

Defendant Was Entitled To Recover Fees And Costs Incurred In Responding To Plaintiff’s Numerous Attempts To Overturn The Trial Court’s Grant Of The SLAPP Motion, Not Just The Fees/Costs She Incurred In Bringing The Anti-SLAPP Motion.

            After successfully SLAPPing plaintiff’s complaint and being awarded $10,910 in attorney fees and $60 in costs under Code Civ. Proc. § 425.16(c), defendant found herself fighting a series of at least nine unsuccessful attempts by plaintiff to reverse the trial court’s anti-SLAPP ruling. Following entry of judgment, defendant moved under § 425.16 for an additional $13,746 in fees and $400.52 in costs she had incurred in responding to plaintiff’s numerous filings.  Additionally, defendant sought fees on fees (fees incurred in bringing the fee motion) – estimating $2,001 in fees (which was adjusted to $2,749.50 in her reply) and $98.52 in costs.  The trial court found defendant was entitled to recover additional fees and costs she incurred that were necessary in litigating her fees award and were related to plaintiff’s numerous attempts to overturn the trial court’s SLAPP ruling – awarding defendant $15,660 in fees and $368.44 in costs after some reductions to fees/costs the trial court determined were not sufficiently related to defendant’s enforcement of the trial court’s SLAPP ruling.

            The result was affirmed on appeal in Pierce v. Heiple, Case No. B300825 (2d Dist., Div. 1 January 22, 2021) (unpublished).   Despite plaintiff’s argument to the contrary, the award of fees/costs under § 425.16(c) is not limited to fees/costs incurred in bringing the SLAPP motion.  California Courts also allow fees/costs for responding to an appeal from the grant of a SLAPP motion and for bringing the fees/costs motion itself.  Here, although plaintiff abandoned his appeal of the trial court’s order granting the SLAPP motion, he challenged the order by bringing other motions – such as moving for a new trial and twice seeking to set aside the order – in the trial court.  Defendant was forced to respond to plaintiff’s filings to preserve the trial court’s SLAPP order.  Plaintiff’s other arguments – that defendant’s attorney’s declaration in support of the additional fees motion contained vague, block-billed time entries and that various line items were improper – were to no avail.  The 2/1 DCA found nothing vague about the entries in attorney’s declaration which provided a summary of hours spent responding to each of plaintiff’s filings followed by a detailed breakdown of each task performed.  Plaintiff’s challenge to particular line items was forfeited on appeal as they were not raised in the trial court.

Fees On Fees, SLAPP: SLAPP Fee Awards To Employee And His Counsel Totaling $136,285.50 Plus Another $33,007.50 In Fees On Fees Affirmed On Appeal

Plaintiff CEO Was Unable To Prove His Claim Against Employee And His Counsel For Their Efforts To Add Him As Judgment Debtor To Underlying Lawsuit Stemmed From Malicious Prosecution As Opposed To Protected Activity.

            Khanna v. Sonasoft Corp. – from our July 13, 2016 and October 15, 2019 posts – is the underlying case for this next one.

            In that case, an employee had sued his employer and its CEO for failure to promptly and fully pay his wages.  In the first appeal, employer was unsuccessful in challenging postjudgment awards of attorneys’ fees, costs and interest.  However, its CEO, Andy Khanna (unrelated to the employee Vince Khanna), was successful in that appeal in challenging an amendment that added him as a judgment debtor under an alter ego theory.  In the second appeal, CEO sought to reverse the trial court’s denial of his request for fees incurred on the first appeal.  There, the 6^th District affirmed – finding CEO was not entitled to fees as he had failed to demonstrate that employee had brought the action against him in bad faith as required by Labor Code section 218.5(a).

            Now, in Khanna v. Khanna, Case Nos. H044973 and H045555, (6^th Dist., April 3, 2020) (unpublished), CEO appeals the trial court’s order granting employee and his counsel’s anti-SLAPP motions brought in response to CEO’s lawsuit against them for malicious prosecution stemming from the alter-ego allegations and adding CEO as judgment debtor – alleging the trial court erred in finding that employee and his counsel made the required threshold showing that CEO’s single cause of action arose from a protected activity, and in finding that CEO failed to demonstrate the required probability of prevailing on the claim.  Additionally, CEO appeals the trial court’s orders granting employee and his counsel’s motions for attorneys’ fees and costs – alleging the trial court abused its discretion in awarding fees in their “entirety” and by not reducing the fees to reasonable amounts.

            However, CEO fared no better on appeal – with the 6^th District finding no error, nor abuse of discretion, in the trial court’s orders and affirming.

            First, as to the anti-SLAPP motions, the 6^th District found that CEO failed to provide sufficient evidence that employee and his counsel pursued the alter ego theory and had him added as judgment debtor through malice, fraud, or concealment.  Employee and his counsel pursued CEO as additional judgment debtor when employer failed to perform under the parties’ settlement agreement and demonstrated no intention of performing and paying the judgment.

            Second, as to the attorneys’ fees, the trial court – finding  employee and his counsel had each met their burden of establishing entitlement to fees, and of documenting the time spent/hourly rates charged – awarded to attorney defendants their requested $86,365.50 in fees, with no multiplier, and $1,267.90 in costs for defeating CEO in malicious prosecution claim.  Likewise, the trial court also awarded employee $49,920.00 in fees – with no multiplier – and $947.18 in costs.  Additionally, the trial court also awarded the attorney defendants with an additional fees-on-fees award of $33,007.50 in fees, without a multiplier, and $325.15 in costs for litigating their first motion for attorney fees and costs. 

            The 6^th District found no abuse of discretion as to any of the fee awards.  Rather, they found that employee and his counsel were entitled to fees under Code Civ. Proc. section 425.16(c)(1) for successfully defeating the malicious prosecution claim with their anti-SLAPP motions.  CEO failed to show that the Anti-SLAPP motions were simple or routine as he asserted, the requested hourly rates were supported by evidence, and CEO failed to support his claims of block-billing and unnecessary, redundant or excessive hours.

Fees On Fees: Trial Court Did Not Abuse Its Discretion In Not Reducing Fees On Fees Request For Lack Of Success

Long-Time Class Action Battle May Be Ended, Appropriately On Fee Issues.

 

            In a long-running class action dispute which the appellate court characterized as rivaling Jarndyce and Jarndyce (Dickens’ Bleak House case which ran on for years and drained most litigants’ resources), the 2/5 DCA likely put an end to class action litigation in Woosley v. State of California, Case No. B275402 (2d Dist., Div. 5 Nov. 3, 2017) (unpublished).

            What happened here is that the trial judge awarded class counsel substantial “fees on fees” for various fee applications during the course of the litigation.  Although some reductions were made on general reasonableness grounds, the lower court did not reduce the “fees on fees” applications for lack of success, although it was considered.  The appellate court affirmed the failure to reduce for lack of success.  Recognizing there are significant differences between litigation on the merits and litigation on fee entitlement, it was no abuse of discretion to not credit lack of success on the “fees on fees” issues under consideration based on the circumstances of record.

Fees On Fees: Ninth Circuit Reverses District Judge’s Failure To Award Appellate Fees-on-Fees For Litigant’s Successful Appellate Defense Of Prior Fee Award

Court Of Appeals Applied Hummell Test, But Suggested It Might Adopt Seventh Circuit’s Automatic-Entitlement Rule If It Had Been Properly Raised Below.

            Today we inaugurate a new sidebar category:  fees on fees.  This refers to fee entitlement for successfully defending or attacking an earlier award, or denial of an award, of fees.  Given that we now have over 4000 posts on our blog, we're not going to go back to when we started in 2008 and add the new category to older cases involving fees on fees.  But we will do our best to apply the new category going forward.

            In Micha v. Sun Life Assurance of Canada, No. 16-55053 (9^th Cir. Oct. 31, 2017) (published), the district judge refused to award appellate attorney’s fees (appellate fees-on-fees) for a litigant’s successful defense on appeal of an ERISA-based attorney’s fees award.  In doing so, it applied the five factors in Hummell v. S.E. Rykoff & Co., 634 F.2d 446 (9^th Cir. 1980)—namely, (1) degree of culpability or bad faith; (2) ability to pay; (3) deterrence; (4) significance of legal issue/benefit to all ERISA plan participants; and (5) relative merits of the parties’ positions—in denying fees to the appellate fees-on-fees claimant.

            The Ninth Circuit reversed and remanded, determining that the district judge had failed to apply the Hummell factors correctly by failing to consider the entire course of the litigation rather than focusing exclusively on the prior appeal.  In addition, although it had not been raised at all before the district court, the Ninth Circuit panel (both the majority and a concurring circuit judge) strongly hinted that it might have applied the Seventh Circuit’s automatic-entitlement rule from Bandak v. Eli Lilly & Co. Ret. Plan, 587 F.3d 798, 803 (7^th Cir. 2009) had it been properly raised below.