CALIFORNIA ATTORNEY'S FEES

In The News . . . . Lead Plaintiffs’ Attorneys Receive Close To $12 Million In Student Athlete Likeness Class Action Against Electronic Arts and NCAA

 

                       Dartmouth Football Team, 1901.

1.7 Multiplier Awarded By N.D. Cal. District Judge.

 

    On December 10, 2015, U.S. District Judge Claudia Wilkens of the Northern District of California awarded lead plaintiffs’ counsel almost $12 million in fees for work leading to the settlements in a class action case brought by student athletes for misappropriation of their likenesses without permission.  District Judge Wilkens awarded a 1.7 multiplier to the $6.8 million base lodestar, citing the outstanding results—about $60 million in settlements between the two defendants—for six years of hard-fought litigation engaged in by lead class counsel.  This award was in Keller/O’Bannon v. NCAA, Nos. C09-1987 CW and C09-3329 CW. 

Private Attorney General: $250,000 Fee Award To Prevailing Plaintiff Affirmed, But Remanded For Redetermination Of Whether Negative Multiplier Was Warranted For Only “Partial Success” And Whether “Fees On Fees” Cut Justified

 

Need For More Expensive Out-Of-Venue Counsel Was Well Justified By Fee Claimant.

     In Habitat and Watershed Caretakers v. City of Santa Cruz, Case No. H040762 (6^th Dist. Oct. 6, 2015) (unpublished), both plaintiff and City appealed a lower court’s decision awarding plaintiff fees of about $250,000 (out of a requested $486,800 on the lodestar and about $30,000 for “fees on fees,” a 60% reduction on the fees on fees request) under California’s private attorney general statute, CCP § 1021.5. No one contested entitlement, just the amount of the fee award—City claiming too high, and plaintiff contesting the lower court’s application of a 50% negative multiplier on lodestar and the “fees on fees” reduction.

     The lower court reduced the lodestar 50% for partial success ($226,725 total) and cut the “fees on fees” request by 60% as indicated above ($22,199.90, which gets to the “total total” of about $250,000) being reviewed.

     Plaintiff got the better end of its challenge on appeal.

     City’s appeal did not resonate because plaintiff did a nice job of showing it needed to obtain Oakland counsel out of the Santa Cruz area, given it could not find anyone else with the expertise or willingness to take a contingent basis. Plaintiff also used Mr. Richard Pearl as a fee expert to justify the higher hourly rates and demonstrate they were commensurate with rates charged by Bay Area practitioners. Also, the contingent nature of the representation justified a higher hourly lodestar rate.

     However, the Sixth District was concerned with the downward adjustment of the lodestar for “partial success.” The problem is that the lower court may have confused not being successful with claims from not being successful with theories. Here, it looked like plaintiff did obtain success on all the claims, although it did admittedly lose on some theories/contentions. But this meant that the downward adjustment needed to be reexamined. While this was being done, the “fees on fees” determination should be reassessed, with the reviewing court somewhat alluding to its belief that the 60% cut was a little excessive in amount.

Civil Rights, Multiplier, Reasonableness Of Fees: Multiplier Determination Remanded But Bulk Of Fee Determinations Sustained In Longstanding Civil Rights Case

 

Out-of-Town Counsel Use/High Hourly Rates And Positive Multiplier Enhancement Dominate Discussion In Lengthy Unpublished Decision From Riverside DCA.

     Although this case should be of interest to civil rights practitioners on the merits (discussing various evidentiary and instructional error issues), Ruelas v. Harper, Case No. E051961 (4^th Dist., Div. 2 Oct. 6, 2015) (unpublished) has some nice takeaways on fee awards under civil rights statutes.

     Although there was a partial reversal and remands, the appellate court did provide some guidance on the fee awards. First, it determined that attorney’s fees under section 1988 should be paid to the individual plaintiffs, not the attorneys. (Astrue v. Ratliff, 130 S.Ct. 2521, 2529 (2010).) Second, the reviewing court did not buy the argument that the fee awards were excessive for 7 years of active litigation and trial time for which verdicts were achieved in favor of numerous civil rights plaintiffs. Third, because the billing substantiation attached to the fee petitions was specific in nature, discovery could be denied by the trial court in its discretion into plaintiffs’ counsel’s billing records. (Riverside Sheriffs’ Assn. v. County of Riverside, 152 Cal.App.4^th 414, 424-425 (2007).) Fourth, the fee claimants did a good job of showing the relevant community for hourly fees was the “greater L.A. area,” not just San Bernardino such that using Los Angeles and Orange County attorneys with $407 and $550 hourly rates was appropriate. Fifth, although acknowledging that one high billing civil rights senior specialist at $850 per hour did a great job, the reviewing court needed some more specificity from the fee claimants and the trial court in order to justify a positive multiplier on this attorney’s rates under Perdue, with the lower court not being able to use quality of representation or complexity factors given that these were already considered under the lodestar analysis of hourly rate reasonableness (put another way, no “double dipping” allowed as far as lodestar and multiplier analyses).

Reasonableness Of Fees/Multiplier: Appellate Court Awards Significant Fees In Labor Case, Providing A Primer On How To Support A Fee Petition, Defend Against Attacks, and Differentiate Federal Fee Petition Differences

 

However, Not All Is Lost … Plaintiffs Only Get About 23% Of Requested Fee Amount, Inclusive Of 1.25 Multiplier.

    We have to say that all readers interested in fee issues need to read Britto v. Zep, Inc., Case No. A141870 (1st Dist., Div. 5 Sept. 25, 2015) (unpublished)—it gives a great roadmap on reasonableness of fees analysis, how someone should attack defense efforts to impeach fee reasonableness, and the difference in standards for fee proceedings in state versus federal courts.

    Briefly stated, two sales representatives—although losing class certification on employment claims—managed to obtain $48,000 in compensation, PAGA civil penalties of $275,000 payable to a state agency, and costs and fees by later court determination.  (No one challenged fee entitlement by the two plaintiffs, based on Labor Code fee-shifting provisions and an accepted CCP § 998 offer which contained a fee-shifting provision.)    They sought $5,031,480 in fees based on about a $1.67 million lodestar and 3 times positive multiplier.  The lower court awarded $1,162,000, with was inclusive of a 1.25 multiplier—only about 23% of the total request.

    Both sides appealed, the defense arguing that too many hours were approved at too high of an hourly rate and no multiplier should have been ordered, while plaintiffs argued a higher hourly rate was appropriate.  Nothing changed on appeal, but we summarize the interesting discussion given that the fee proceeding was highly contested with prolix pleadings.

1.    Plaintiffs’ Showing.  They did provide detailed submissions of qualifications, hourly rates, and billings (some redacted), including submission of prior fee awards in local courts and National Law Journal surveys on fees.

2.    Defense Attack.  The defense did attack the hourly rates with expert testimony and analysis of why some fee components were suspect.

3.    Plaintiffs’ Counterattack.  Plaintiffs deposed the main defense fee expert, showing he was never qualified as an expert and had minimal experience in the area, leading the lower court to strike the defense report.  Plaintiffs also found a declaration by one of the defense attorneys in another case supporting higher hourly rates than she testified to as being reasonable in this case.  Both of these were good impeachment devices, to say the least.  Plaintiffs also introduced SEC filings showing that the defense spent multi-millions in defending the case.

4.    Unsuccessful Motions Versus Unsuccessful Claims Can Get Compensated.  The appellate court reviewed case law showing that unsuccessful motions versus claims can be entitled to compensation; also, unsuccessful motions which lead to successful claims are worthy of compensation.

5.    Redacted Time Entries Fine At State Level.  Federal courts require much more detail in fee submissions, but—in contrast--redacted time entries or detailed attorney declarations summarizing time will suffice in California state courts. 

6.    Comparative Hourly Rates.  Smaller firms should not necessarily be relegated to rates lower than big firm counterparts. 

7.    Multipliers.  Taking a case on a contingent fee basis is a significant basis, combined with a delay in compensation, to justify a positive multiplier.  Contrary to federal case law which is antagonistic to multipliers in certain legal areas, California state law is more liberal. 

    This case is good reading for any attorneys or fee experts when it comes to supporting and attacking fee petitions in California state courts.

In The News . . . . N.D. Cal. District Judge Lucy Koh Approves “No Poaching” Antitrust Class Action Settlement, Awarding $40,043,932.50 In Fees To Class Counsel

 

Award Was Less Than Half Of $81 Million Request, Using Lodestar Billings Augmented By Positive 2.2 Multiplier.

    On September 2, 2015, U.S. District Judge Lucy Koh of the Northern District of California gave final approval to a class action settlement by high tech workers challenging on antitrust grounds a “no poaching” pact reached by Apple, Google, Adobe Systems, and Intel Corp.  (Earlier, Pixar, Lucasfilm, and Intuit settled out with the plaintiffs.)  The September 2015 settlement was $415 million.  District Judge Koh also awarded class counsel $40,043,932.50 in fees, less than half the requested $81 million.  Although finding nothing wrong with the request (which was 19.5% of the total settlement amount), the district court believed that a case involving a large settlement fund was better served by using the lodestar method rather than “blind acceptance of percentages that seem largely untethered to the results achieved in this litigation.”  District Judge Koh applied a positive 2.2 multiplier to the lodestar, as well as awarding about $1.2 million in costs.  The district court also awarded an objector’s attorney a $120,000 service award even though $4.5 million had been requested.  Earlier, one of the class counsel firm trimmed its bills by $2 million when a disagreement arose about its billing practices.

Multiplier, Prevailing Party, Private Attorney General, Settlement, Special Fee Shifting Statute, Substantiation: Three Unpublished “Power Ball” Decisions Synopsized

 

Dept. of Parks and Recreation v. Schoendorf, Case No. H039321 (6th Dist. May 26, 2015) (unpublished).

   In this one, an appellate court denied $300,000 in attorney’s fees against the State under a settlement agreement where “reasonable diligence” governed the fee entitlement.  Given that the prevailing party determination was discretionary under this clause and no one obtained a complete victory, little wonder that Civil Code section 1717 principles required an affirmance of the result in this encroachment case.  After all, “reasonable diligence” does provide a great degree of discretion as to who prevailed, with the lower court decision being entitled to deference on appeal. 

Doe v. Dept. of Education, Case No. C072145 (3d Dist. May 26, 2015) (unpublished).

    This second case was one where plaintiff settled with one defendant, but had some technical victories as to the California Department of Education (CDE).  Ultimately, however, plaintiff did not win as to CDE based on administrative exhaustion arguments.  Although plaintiff sought $840,000 (2.5 multiplier on the lodestar), the trial court denied the request, a result affirmed on appeal.  Reason:  Plaintiff was not “successful” as against CDE, with a pragmatic standard showing plaintiff did not prevail in the case as to this particular defendant.

Robles v. McErlain, Case Nos. A139331/A139532 (1st Dist., Div. 4 May 26, 2015) (unpublished).

    The third cause was an attorney’s fees award in a harassment injunction proceeding, with there being fee entitlement and no necessity to provide good faith as an element.  (Code Civ. Proc., § 527.6; Krug v. Maschmeier, 172 Cal.App.4th 796, 803 (2009).)  The appellate court rejected the idea that detailed billings are required as substantiation under California state law, because an adequate declaration from an attorney as to work will suffice.  However, the reviewing court did reverse a 20% multiplier “bump” given that the case was not complex and not taken on a contingent basis—such that the lodestar factors adequately addressed any fee request and dispensed with the necessity of any positive enhancement.

 

Lodestar, Multiplier, Reasonableness Of Fees: Save Our Uniquely Rural Decision Certified For Publication

 

Deals With Multiple Issues After Lower Court Awarded Only $19,176 Out Of Requested $231,000 In Fees.

     In our March 19, 2015 post, we discussed the unpublished decision of Save Our Uniquely Rural v. County of San Bernardino, Case No. E059521 (4^th Dist., Div. 2 Mar. 18, 2015). We now can update: the decision was certified for publication on April 13, 2015. The decision awarded only $19,176 out of a nearly $231,000 fee request under the private attorney general statute based on excessive hourly rates, limited success, excessive time on some tasks, and partners engaging in clerical tasks/performing undue legal research.

Lodestar, Multiplier, Reasonableness Of Fees: Lower Court Did Not Err By Awarding $19,176 Out Of Requested $231,098 In Fees Under Private Attorney General Statute To Prevailing Plaintiff

 

Limited Success, Excessive Hourly Rates, and Excessive Work Led To Reductions, Although Court Disagrees With One Aspect Of Gorman Decision.

     In Save Our Uniquely Rural Community Environment v. County of San Bernardino, Case No. E059524 (4^th Dist., Div. 2 Mar. 18, 2015) (unpublished), a CEQA plaintiff, a non-profit opposing the development of an Islamic community center and mosque in a San Bernardino County unincorporated residential area, did obtain a mandate on one wastewater disposal issue, although losing five other issues. Plaintiff then moved for private attorney general fees of $231,098 (a 2 multiplier on the lodestar), but the trial court only awarded it fees of $19,176, prompting an appeal.

     The fee award was affirmed. The trial court was within its rights to reduce the request for (a) excessive hourly Los Angeles rates given that plaintiff did not make a showing that CEQA specialists were not available in the San Bernardino/Riverside area; (b) limited degree of success on one out of six issues; (c) excessive time spent on a mandate petition reply brief and on the “fees on fees” motion (plaintiff requested close to $10,000, with the trial judge allowing only $1,500 for this work); and (d) partners engaging in clerical and lots of legal research work, inappropriately charged to the opposition. However, the appellate panel did disagree with a portion of the Fifth District’s analysis in Gorman v. Tassajara Development Corp., 178 Cal.App.4^th 44, 99-101 (2009), which found too whimsical an addition of 37 cents to a fee award where no other precision was shown in the calculation—with the 4/2 DCA finding that this precision cut the other way. A multiplier was properly denied because the matter was not complex and plaintiffs did not show the time expended by attorneys was so large as to preclude other employment.

     Nonetheless, in a footnote, the affirming appellate panel did indicate that it would have been nice if the lower court had provided more detail and calculations in support of its order, namely, state the number of hours being allowed, state the hourly rates being allowed, and state the reasons for applying or not applying a multiplier.

Lodestar, Multiplier, Private Attorney General, Reasonableness Of Fees, Substantiation Of Fees: Plaintiff’s Attorneys Garner $721,994.81 In Fee Recovery For Successfully Arguing City Of Los Angeles Could Not “Outsource” Initial Review Of

 

However, Many of the Nonstatutory Costs Were Taxed.

     Although we do not often post about trial court decisions involving fees and costs, Caleb Marker of Ridout Lyon + Ottoson, LLP in Long Beach sent us copies of the fees and costs rulings in Weiss v. City of Los Angeles, Case No. BC141354 (L.A. County Superior Court). They are worth synopsizing because Judge Chalfant did write detailed tentatives granting $721,994.81 in CCP § 1021.5 fees to Plaintiff’s attorneys, although taxing most of their requested costs. These tentatives do provide an interesting look into the judicial perspective on fees and costs motions.

     In this case, Plaintiff achieved some success—but not all—in obtaining a mandate writ which basically decided that City of Los Angeles could not delegate the task of initially reviewing parking violations to an outside processing entity, with this outsourcing not following under the “home rule” authority of the California Constitution. However, some of Plaintiff’s claims were found to be moot or were dismissed and, in the mandate proceeding, the trial court found that the initial review by the outside entity was adequate and a form letter may be used to deny a challenge after initial review.

     So, that brings us to Plaintiff’s motion for fees and costs. Judge Chalfant had no problem finding that Plaintiff was the “successful” party under Calfornia’s private attorney general statute because he did successfully challenge the outside processor’s initial review of parking tickets, meaning both City and outside processer should be jointly and severally liable for fees. An important right was vindicated by requiring City, as the issuing agency, to initially review parking tickets, which impacted a broad spectrum of motorists who park their cars in L.A and receive a ticket. Plaintiff had to bring this action because City had no interest in doing so, with Plaintiff not receiving any personal gain from the challenge.

     The rest of the discussion focused on the lodestar, multiplier, and costs requests. Plaintiff initially requested a lodestar of $862,448.75 for the work of three firms. The trial judge did ask for supplemental briefing, because of a lack of detail in the fee requests—no time sheets and no attorney declaration explaining work efforts. Judge Chalfant did tax a substantial amount of requested costs, finding that postage, conference calls, photocopying, database legal costs, and travel expenses are not statutory costs which can be recovered.

     After supplemental fee papers were filed, the trial judge then focused on the $859,898.75 lodestar request. He reduced this request for (1) unnecessary redacted entries at a uniform 80% markdown rate; (2) excessive conferencing activities between the different firms, (3) work in a separate federal case, (4) clerical work, and (5) block billing by one firm for a further 20% reduction. That brought the total lodestar down to $687,61.10. From that, however, Judge Chalfant made a further reduction of 30% for limited success, taking the sum down to $481,329.87. Then, he found a 1.5 positive multiplier was justified, such that the total fee recovery to Plaintiff’s attorneys was $721,994.81.

     HAT TIP: Mr. Marker, thanks for sharing these tentatives with us because they are insightful on at least one concrete judicial perspective on how to approach fees and costs requests.

Civil Rights/Lodestar/Multiplier: $433,000 FEHA Recovery To Prevailing Plaintiff Affirmed On Appeal

 

Reduction In Requested Hourly Rate and Denial of Multiplier Were No Abuses of Discretion.

     In Shank v. CRST Van Expedited, Inc., Case No. G049844 (4^th Dist., Div. 3 Jan. 14, 2015) (unpublished), Plaintiff won a sexual harassment jury verdict against an employer and employer’s trainer, to the tune of $391,000 in compensatory damages and $1.17 million against employer/$3,500 against trainer in punitive damages, all occurring in San Bernardino County Superior Court. (The lower court threw out the punitive damages, but they were reinstated in plaintiff’s appeal of this aspect of the proceedings below.) The trial court then awarded plaintiff FEHA fees totaling close to $433,000, but lowered the requested $450 hourly rate to $350 and denied the request for a multiplier.

     The fee award was sustained on appeal.

     Justice Thompson, author for a 3-0 panel, determined the reduction in the hourly rate was no abuse of discretion. Many of the declarations supporting the higher rates were from out-of-venue attorneys, with only one being from a San Bernardino attorney, such that the court could use its own experience of Inland Empire hourly rates rather than credit declarations by attorneys practicing outside the county (or inside, from that matter). Plaintiff argued that a federal court had ruled that a judge cannot rely on personal knowledge/expertise alone if other evidence of hourly rates is in the record (Coleman v. Kay, 87 F.3d 1491, 1510 (3d Cir. 1996)), but the appellate court observed that California state law was to the contrary—a judge can rely on his personal experience as far as awarding an appropriate hourly rate. (Ketchum v. Moses, 24 Cal.4^th 1122, 1137 (2001) [one of our Leading Cases].) Judge Thompson also observed that “[w]ithout some analysis of why the instant case is comparable, the fee rate in another case is irrelevant.” (Slip Op., p. 31.)

     Although hinting that the reviewing panel might have come to a different conclusion on the multiplier question, the abuse of discretion standard required affirmance to the multiplier denial, given the lower court found the case was not that complex, FEHA sexual harassment cases were routinely seen (not that novel), and delay in payment based on the contingency nature of a matter is not a mandatory multiplier factor which must be credited. (Ketchum v. Moses, supra, 24 Cal.4^th at 1138.)

Multiplier/SLAPP/Substantiation Of Fees: $162,000 Fee Award To Two Defendants Affirmed On Appeal

 

1.25 Multiplier Allowed, Lack of Specific Challenges Did Not Lead to Major Reductions, and Prior SLAPP Awards Were Not Dispositive.

     If you have followed our blog, you known there is a mandatory fee-shifting statute in favor of SLAPP defendant winners. In Lunada Biomedical v. Nunez, Case Nos. B243205/B246602 (2d Dist., Div. 5 Oct. 9, 2014) (published), two SLAPP defendant winners won over $162,000 in fees against plaintiff (which included a 1.25 multiplier).

     Plaintiff’s appeal did not get any further reduction, with defendants getting further fees on remand for prevailing on appeal.

     Plaintiff complained about “block billing,” but the billing submissions were sufficient to allow for a reasoned award. Plaintiff then argued that a counsel declaration on time spent, even with after-the-fact estimates, did not suffice, but this is simply contrary to California law allowing for an attorney declaration to be good enough. (City of Colton v. Singletary, 206 Cal.App.4^th 751, 785 (2012).) Plaintiff protested loudly about the excessive nature of the fees, but its generalized arguments on “too high” did not suffice because specific challenges were not raised at the trial court stage. (Premier Medical Mgt. Systems, Inc. v. CIGA, 163 Cal.App.4^th 550, 564 (2008).) Plaintiff next argued that this particular SLAPP award was way off the charts given a comparison to fee awards in other SLAPP cases. However, this argument was rejected because each fee application stands and falls on its own unique set of facts. The multiplier was just fine based on a contingent factor, with excessive underlying fees not among the factors to be considered in determining if a positive enhancement was in order.

Allocation/Multiplier/Prevailing Party/Reasonableness Of Fees/Section 1717: $180,648 Contractual Fee Recovery Affirmed In Case Where Plaintiffs Recovered Total Contract/Tort Underlying Award Of $109,000

 

$425,000 Fee Request Plus 1.5 Multiplier Nixed on Appeal.

     In Holquin v. Dish Network LLC, Case No. D059983 (4^th Dist., Div. 1 Sept. 22, 2014) (published), plaintiffs won a combined economic/noneconomic verdict against DISH Network and others in a satellite T.V. dispute. However, the rub was an attorney’s fees clause in the Residential Customer Agreement, to which the lower court was attuned throughout the proceedings. Plaintiffs, on mixed contract/tort claims, won a jury verdict of $109,000. They then moved for attorney’s fees based on Civil Code section 1717 for $425,000 plus a 1.5 positive enhancement. The lower court awarded plaintiffs fees of $180,648 (rejecting any positive multiplier), prompting an appeal on the merits decision by DISH (a merits appeal which was unsuccessful) and Plaintiffs’ appeal claiming the fee award was too low (no different result, as we explain).

     The appellate court had no problem determining Plaintiffs were entitled to fees under Civil Code section 1717 or determining Plaintiff was the prevailing party. The amount of fees being claimed was the real issue.

     So, was the $180,648 fee award an abuse of discretion? Hardly. The first reduction involved a prior attorney’s fees even though he had to step out of the case—the reductions were just fine. The next set of reductions involved apportionment between contractual and tort claims. The lower court basically adopted this formula based on the peculiar circumstances of the case: full fees for 20% of the work on liability issues (which spanned everything) and 80% of the damages apportioned to reduce for work on noneconomic damages relating to tort claims (which tried to reach a reasonable estimation of the contractual fee work). The reviewing court sustained this formula, especially reminding all fee claimants that contingency fee agreements will not be ignored in this context--$180,648 was a lot more than the possible contingency awards of $16,200 or $38,200, so the award was reasonable and no multiplier was justified.

     There is a good case to show how California state reviewing courts will use a contingency agreement to “cross-check” the reasonableness of a fee award. (See Vella v. Hudgins, 151 Cal.App.3d 515, 520 (1984).)

In The News . . . . N.D. Cal. District Judge Grants Reduced Lodestar Plus 2.59 Multiplier To Class Counsel In Bank of America Automated Call Settlement

 

$8 Million Percentage of Recovery Request Nixed; Reductions Made for Inefficient Work Efforts and High Settlement/Mediation Work Requests.

     In Rose v. Bank of America Corp., Case Nos. 5:11-CV-02390 & 5:12-CV-04009-EJD (N.D. Cal. Aug. 29, 2014) (Doc. No. 180), U.S. District Judge Edward J. Davila gave final approval to a settlement of a class action against Bank of America for alleged automated phone dialing system or prerecorded call violations without customers’ prior express consent under the Telephone Consumer Protection Act. He then had to assess plaintiffs’ request for fee compensation to class counsel.

     District Judge Davila did not give plaintiffs’ counsel all that they wanted.

     Plaintiffs’ counsel had around $1.4 million in lodestar time, comprising billing efforts by attorneys and paralegals at 10 firms. They asked for about $8 million in fees based on a 25% percentage of recovery approach, which would come to a 5.34 multiplier based on the $1.4 million lodestar or an 8.65 multiplier based on the reduced lodestar of $927,507.80 which the district judge ultimately found to be reasonable.

     District Judge Davila initially found that the hourly rates being claimed for Northern California legal work were reasonable: $100-$305 for paralegals; $325-525 for associates; and $350-775 for partners. His real “beef” was in compensating for some of the requested work, such as inefficient allocation of work by which higher billing attorneys did a bulk of the work and an excessive claim of 800 hours of mediation/settlement negotiation work. (He also questioned the need for litigation by 10 firms.) As indicated above, that brought the lodestar down to $927,507.80.

     The district court found that most class members might receive monetary payments between $20-40 and that the prospective relief was not that great given that the settlement allowed for ambiguity on the key “prior express consent” language—meaning banking customers still might get automated calls without their approval. He then surveyed multipliers in other cases, finding that 2.59 was an appropriate one, not the 5.34 or 8.65 requested by plaintiffs’ class counsel. So, in the end, $2,402,231.91 was the fee award (inclusive of costs).

     For those of you wanting to read his opinion, here is a link.

Appeal Sanctions/SLAPP: $18,456.58 Fee/Costs Award Affirmed To Defense Affirmed On Appeal

 

Appellate Court Found No Abuse of Discretion, Given Trial Court Reduced From Requested $39,104.58 Fees/Costs—However, 1.5 Multiplier Was Proper.

     In Meaux v. Springfield, Case No. A139840 (1^st Dist., Div. 5 July 16, 2014) (unpublished), defense prevailing on a SLAPP motion requested $39,104.58 in fees/costs (inclusive of a 2.0 multiplier, but not for “fees on fees” work). The requested hourly rate was $400 for the San Francisco legal community. The lower court awarded the defense $18,456.58 in fees/costs, reducing for excessive hours but granting the lodestar request augmented by a 1.5 multiplier at the $400 hourly rate.

     Plaintiffs appealed, but lost.

     Most of the appeal failed because plaintiffs did not challenge the fee order with specific record cites about duplicative or specific line item billings. (Plaintiffs did in the reply brief, but this was too late.)

     The defense asked for appellate sanctions, but the First District—in line with some prior decisions in this area—found it sufficient to allow defendants to seek additional SLAPP fees for winning on appeal. Punishment enough, already, to boil it down for you with respect to the ultimate appellate ruling.

Equity/Lodestar/Multiplier/Retainer Agreement: $7.8 Million Fee Recovery For Well Known L.A. Attorney’s Work In Divorce Cases Reversed

 

No Written Retainer Agreement, With Quantum Meruit Jury Verdict Overturned And Reduced To $1.8 Million Plus Some Other Deductions.

     This is a doozy of a case involving well known Los Angeles attorney Hillel Chodos, who happened to not have had a written hourly or contingency retainer agreement with an ex-client, a wife involved in an imbroglio of divorce cases (including a Marvin suit). Mr. Chodos charged $1,000 an hour for his time but had to sue ex-client for quantum meruit recovery based on the absence of a retainer and had a jury award him $7.8 million, his lodestar of 1,800 hour for the divorce work plus a multiplier of five—meaning the jury increased his hourly rate to $5,000. Such a result came after a trial where Mr. Chodos and his ex-client put on very conflicting testimony about the value of his services, the time he spent (or should have spent), and the results obtained in the divorce cases (although the results appeared to be quite extraordinary).

     The Second District, Division 5, in a 3-0 opinion authored by Justice Mosk, reversed and remanded in Chodos v. Borman, Case No. B252446 (2d Dist., Div. 2 June 18, 2014) (published).

     The appellate court determined that it was erroneous for the lower court to have instructed the jury on the availability of a multiplier in these circumstances. In this instance, Mr. Chodos did not bear true contingency risk because there was an hourly arrangement even under a quantum meruit theory. Because quantum meruit theory is fundamentally equitable in application (although legal for purposes of the right to a jury trial), the reviewing panel simply found it would be unfair to allow Mr. Chodos to obtain a recovery in excess of the lodestar.

     This result was buttressed by the panel’s belief that Mr. Chodos would be rewarded for violating Business and Professions Code provisions requiring a written retainer agreement. “Therefore, to reward attorney for not complying with the laws requiring written fee agreements would be inequitable and contrary to public policy.” (Slip Opn., p. 28.)

     Although not said in the opinion, we believe the appellate court actually took matters in its own hands to avoid further litigation. Based on Mr. Chodos’ testimony about 1,800 hours and a $1,000 hourly rate, it reduced the judgment from $7.8 million down to $1.8 million, with further deductions of about $132,000 to the $1.8 million figure (remanding to the lower court with instructions to enter this judgment).

     BLOG OBSERVATION—Especially in the punitive damages area, California appellate courts often will simply reduce an excessive award and direct the trial court to enter judgment based on such a reduction—doing this frequently in cases where it divines that the parties will only litigate for years more if a completely new trial is granted. For an example, see a case co-contributor Mike was involved with many years ago, Las Palmas Associates v. Las Palmas Center Associates, 235 Cal.App.3d 1220 (1991).

Lodestar/Multiplier/Reasonableness Of Fees: Second District, Division 4 Unpublished Decision Has Outstanding Discussion Of Lodestar/Multiplier Factors, Limited Success, And Opposing Counsel Fees In Sustaining Lower Court Fee Award In Overtime Employee Cas

 

$603,150 Out of Requested $1,512,794.50 Was the Award, With Defense Counsel Getting Paid $1,070,000 by Safeway.

     Although unpublished, the Second District, Division 4 has done an outstanding job of analyzing a reasonableness of fee award where both sides (prevailing employee and defending former employers) appealed, with employee arguing the fee award was too small and the opponents arguing it was way too high. In the end, the fee award stood as fashioned by the lower court in Heyen v. Safeway, Inc., Case No. B243610 (2d Dist., Div. 4 May 23, 2014) (unpublished).

     Plaintiff, after 10 years of litigation when an overtime class was not certified, finally prevailed by obtaining an award of a little over $26,000 under an exempt employee theory from former employers Safeway and Vons. Because the prevailing employee is entitled to fees under Labor Code section 1194(a), she sought to recover $1,512,794.50 in fees in a heavily contested proceeding, but was awarded $603,150 instead—only 40% of the request. Both sides appealed, and the result did not change following appellate review.

      In setting the amount of fees, a lower court has considerable discretion and the award usually has to shock the conscience to be overturned. (In re Tobacco Cases I, 218 Cal.App.4^th 570, 587 (2013).) Here is how various issues were handled by the 2/4 DCA:

      1. Hourly Rates. Plaintiffs claimed hourly rates ranging from $150-$1,000. Although the appellate court was somewhat concerned about the $1,000 rate (given the proof showed top L.A. earners at the time billed out around $850-860 per hour), the trial court’s 60% reduction in the fee request caused the awarded “blended” rate to be $258 per hour. In tandem with the fact the defense was paid $1,070,000 by its clients, the smaller $603,150 award based on some $1,000/hourly time was not deemed enough to remand on this issue.

      2. Plaintiff’s Limited Success. This was the main factor leading the lower court to apply a .4 negative multiplier (60% reduction in the request). Here, plaintiff did not succeed in showing policy-wide problems in 3 stores (just 1) and only obtained recovery of about 25% of her requested unpaid time. The reviewing court had a nice discussion of the “limited success” lodestar factor, especially cases talking about the relatedness of claims, compensation being okay for unsuccessful legal theories (versus claims), and discretionary lower court authority to reduce for limited success. (See, e.g., Sokolow v. County of San Mateo, 213 Cal.App.3d 231, 249 (1989); Harman v. City & County of San Francisco, 158 Cal.App.4^th 407, 417-418 (2007) [Harman II].)

     3. Multipliers. Even with the negative multiplier, the lower court did find that exceptional skill was shown by plaintiffs’ attorneys, who had to combat an experienced defense team of 35 lawyers at different times—with the reviewing court finding probative the amount of time and expense incurred on the defense side of the picture. Also, the preclusion of other employment and contingent risk factors were present in the case.

     4. Multiple Recovery and “Double Counting” Defense Arguments. In contending the fee award was too high, the defense first argued that giving credit for pre-December 2006 discovery work could result in a multiple recovery in other cases. However, the lower court dealt with that concern by saying it would award for this work in this case but would not allow a fee petition in other cases relating to this work. With respect to the “double counting” argument that the lower court unwittingly applied overlapping lodestar and multiplier factors, the reviewing court—after acknowledging that some inherent tension exists in this area—found that not to be the case because the exceptional skill, employment preclusion, and contingent risks factors were independently at play so as to justify the award.

      Here is the poignant ending remark by the appellate court: “In conclusion, we note, as did the Court of Appeal in Harman II, that there is a great degree of subjectivity inherent in any attorney fee award. The Harman II court expressed it this way: “In this appeal we are confronted with the taxing problem of determining the reasonableness of an attorney fee award that far exceeds the monetary award recovered at the end of protracted and hard-fought litigation. The lodestar method . . . is so fraught with subjective factors that its real-life application is not easily reduced to the mathematical precision the method seems to invite. [Citation.] Application of the lodestar method in this case also comes at a time when the trial court and the parties have the benefit of hindsight of over seven years of litigation. In this era of ever increasing legal fees and costs, few would claim to have the prescient abilities necessary to predict the final outcome of this litigation that started [eight years earlier].” (Harman II, supra, 158 Cal.App.4th at p. 415.) These observations are as relevant in the present case as they were in Harman II. The trial court’s determination of reasonable attorney fees and our review of that award is necessarily subjective, as reasonable minds may differ regarding how many hours were fairly expended in prosecuting this case, what a reasonable hourly rate is, and what degree of success Heyen achieved. Nonetheless, despite the subjective nature of the inquiry, an attorney fee award is statutorily required in this case. Having reviewed the entire record, we conclude that the attorney fee award did not constitute an abuse of the trial court’s broad discretion.”

Civil Rights/Lodestar/Multiplier/Substantiation Of Reasonableness Of Fees: 88% Court Ordered Reduction In Civil Rights Fee Request Reversed

 

Remanded To Decide If Multiplier Appropriate Upon Reversal of State Claim Giving Rise To Positive Enhancement.

     The Ninth Circuit in Chaudhry v. Interfaith Communities United For Justice and Peace, Case No. 11-55820 (9^th Cir. May 19, 2014) (published) is an interesting decision involving federal civil rights/attendant state law (CA Civil Code section 52.1) claims arising out of Los Angeles’ delay in notifying a Muslim family about the death of a family member so he could be buried in accordance with religious beliefs.

     After the appellate court reversed a damage limitation order on the civil rights claim and a dismissal of the state court excessive force claim, it had to address the district judge’s award of only $73,125 in attorney’s fees under the federal civil rights fee-shifting statute out of a requested $1,007,849.25—an 88% reduction of the requested fees. It vacated the fee award.

     The first problem was the district judge’s decision to award only a “blended” hourly rate of $325 per hour given the involvement of attorneys with different experience and different hourly rates. Plaintiff did submit attorney affidavits to meet the initial burden of proof, shifting the burden of the rebuttal on the defense. The district judge did not explain why $325 was the prevailing rate in the community for all of the variant attorneys involved.

     The second problem was that the 88% reduction, a big one, was not adequately explained by generalized district court conclusions of duplication/overstaffing. After all, Plaintiff had voluntarily reduced the request by 10%, and City defendants only asked for a 20% reduction. The district court also reduced the lodestar another 25% for limited success, but this had to be revisited because of the reversal of the dismissal of some of the claims.

     The third issue was that the state law claim dismissal was reversed, which carried a possible upside of a multiplier under California state law—with a remand being in order. (Mangold v. Cal. PUC, 67 F.3d 1470, 1478-1479 (9^th Cir. 1995).)

     Fee fix “re-do” ordered in this one.

In The News . . . Two Federal Court Of Appeals Decisions Use Different Methods To Fix Attorney’s Fees In Class Actions

 

Third Circuit Sustains Using Percentage of Recovery Method, “Cross Checked” By Lodestar Analysis, In Setting Class Action Counsel Fees.

     In Dewey v. Volkswagen of America Inc., Case Nos. 13-1123/1124 (3d Cir. Feb. 12, 2014) (not published/not precedential), the Third Circuit Court of Appeals sustained a $9,207,248 attorney’s fees award to class action counsel representing plaintiffs in a class action against V.W. resulting in a $69,277,430 settlement over leaky sunroofs. The district judge primarily used the percentage of recovery method, using 15.38% to get to a $10,967,773 “base line.” However, she “cross-checked” the result based on the lodestar analysis, determining that the percentage of recovery figure was inclusive of a 2.38 multiplier. However, because the case was not that complex, she reduced the multiplier to 2.0 and awarded $9,207,248, 13.3% percentage of settlement recovery as fees. Some objectors challenged the result, arguing that New Jersey law required the district judge to use the lodestar analysis. However, the Third Circuit rejected the notion that federal law could not be used, with the percentage of recovery being the main index applied among federal circuits in normal circumstances.

Seventh Circuit Affirms District Court’s Use of Lodestar in Fixing Class Counsel Fees Where Class Action Claims Rate Was Low.

     Well, apparently normal circumstances were not in play for a district judge fixing class action counsel fees in Americana Art China Co., Inc. v. Foxfire Printing & Packaging, Inc., 743 F.3d 243 (7^th Cir. Feb. 18, 2014). There, in a “FAX blasting” (also known as junk FAX) class action, a district court used a lodestar rather than a percentage of recovery method for purposes of awarding attorney’s fees to class counsel. The settlement was $6.1 million and, using a one-third percentage of recovery standard, fees would have been $2,033,333.33. However, because the class action claim rate to the settlement fund was only around 7%, the district judge utilized the lodestar analysis and augmented it with a 1.5 positive multiplier, producing a fee award of $1,147,698.70, a $855,634.63 reduction from the percentage of recovery result. Plaintiffs appealed, but the Seventh Circuit affirmed. It especially liked the district judge doing some “equitable balancing”—something, the federal appeals court remarked, district courts should do--by making the fees have some proportionality to the actual amount paid to the class.

Civil Rights/Multiplier: Plaintiffs’ Attorneys In Fairfield Wrongful Citizens Right Arrest Garner $308,221.80 Fee Award Despite Limited Success In Civil Rights Case

 

E.D. Cal. Federal Magistrate Judge Applied 40% Downward Adjustment Based on Limited Success.

     Hall v City of Fairfield, Case No. 2:10-cv-0508 DAD (E.D. Cal. Doc. No. 227 Mar. 31, 2014 [order granting attorney’s fees]) is a tutorial on principles governing award of attorney’s fees in the civil rights area under 42 U.S.C. § 1988(b).

     What happened in this one is that some civil rights plaintiffs sued after they claimed to the wrongful subjects of citizen arrests by a manager of In-N-Out Burgers, Inc. in arrests involving City of Fairfield law enforcement officers. The incident arose from apparently confusing plaintiffs, African Americans, with another group of unruly patrons in the area. In-N-Out settled out with three plaintiffs for $180,000, while City of Fairfield went to trial. The three plaintiffs prevailed in the aggregate amount of $12,150, even though they had rejected an aggregate F.R.Civ.P. 68 offer of $15,000 ($5,000 each). After the merits verdict (which was only based on some claims), U.S. Magistrate Judge Dale A. Drozd, who presided over the trial, awarded plaintiffs fees of $308,221.80 under the federal civil rights statute (out of a requested $692,870.75) against City.

     Magistrate Judge Drozd found that the small jury verdict alone was not the proper lodestar measure for an award of civil rights fee given that a fee award had to vindicate plaintiffs’ civil rights and send a deterrent message to law enforcement officials.

     The defense argued that plaintiffs did not beat the Rule 68 offer, but this was rejected because preoffer costs of $183,899.09 had to be considered such that the meager offer was indeed “beaten” by plaintiffs.

     The federal magistrate judge sustained awarding hourly rates of $260 and $350 to the civil rights attorneys prosecuting the case on behalf of plaintiffs, commensurate with Sacramento hourly rates.

     Generalized defense objections to hours expended did not trump specific billings, although the magistrate judge did find some reductions were in order to arrive at a base lodestar of $513,703.

     However, the limited success of plaintiffs—both as to claims and the amount of damages ultimately obtained—did lead to a 40% downward adjustment to the ultimate $308,221.80 fee award.

     HAT TIP—To our follower Carter C. White of U.C. Davis School of Law, who called this case to our attention.

Lodestar/Multiplier/Settlement/Reasonableness Of Fees: Plaintiff Recovering $2.25 Million Dependent Abuse Verdict Also Recoups Additional $333,727.56 In Fees And $31,016.22 In Costs

 

Much Less Awarded Than Requested $1.042-1.390 Million in Fees; Plaintiff Stipulated to Costs Reduction, With Modified Judgment Entered Accordingly.

     This case is an interesting illustration of how lower courts will reduce an inflated fee request to calculate a lodestar as well as enforce a “high/low” stipulation that was silent with regard to fees/costs. The opinion shows good some good and bad things each side did in this case, providing practice pointers (or, as co-contributor Mike says, “we all learn good case management through mistakes”).

     Gerard v. BHC Alhambra Hospital, Inc., Case No. B248197 (2d Dist., Div. 7 Mar. 18, 2014) (unpublished) involved a plaintiff suing defendant for claims mainly coalescing around dependent adult abuse charges. The good defense preventive action was getting both sides to agree, before the jury returned from deliberations, to a “high/low” stipulation putting a ceiling and floor on any gross jury verdict, namely no more than $2.25 million as the “high” and $250,000 as the “low.” The bad thing for the defense is it was silent on the issue of fees and costs, although a defense representative felt it had been conceptually agreed to the restriction also encompassing fees/costs before—although nothing was put on the record about such an arrangement. Wanna guess the jury verdict? Answer: a little shy of $6 million, with the lower court honoring the $2.25 million ceiling parameter. Then, plaintiff moved to recover statutory fees under the dependent abuse statute (Wel. & Inst. Code, § 15657(a)) of a requested $1,042,898.62 - $1,390,531.50 range (inclusive of a requested 1.5-2.0 multiplier). This was found by the lower court to be an inflated request, which made deductions for excessive/inefficient/block billed time, excessive hourly rates (rejecting $375 and $600 requested rates because the case was not that complex), and non-recoverable medical negligence work time, also denying any positive multiplier to plaintiff. The lower court gave a 52% across –the-board reduction, awarding fees of $333,727.56 plus eventual costs of $118,229.80.

     Defendant hospital appealed on numerous bases, obtaining only a costs reduction conceded by plaintiff.

     The defense argument that no fees/costs were awardable based on the “high/low” stipulation failed because the stipulation was silent on this important topic and also only discussed the arrangement in connection with the “gross jury verdict.” (PRACTICE TIP #1: Deal expressly with fees/costs in any such stipulation, a settlement agreement, or a 998 offer.) Also, unlike federal courts, the superior judge here did not have to “show his/her work” by providing the math breakout of the award, given that the reasons for the reduction were articulated. (PRACTICE TIP #2: Although no statement of decision is required in state courts, co-contributor Mike likes to provide the math in the ultimate fee order—listing the hourly rate and amount of work found reasonable, plus any reasons for an enhancement or an award of “fees on fees”.) Plaintiff did agree that certain expert witness fees and investigation/copying/postage fees were not recoverable under Davis v. KGO-T.V., Inc., 17 Cal.4^th 436, 438 (1998) [statutory FEHA case], stipulating to a costs recovery of $31,016.32 which was adopted by the appellate court. (PRACTICE TIP #3: If you recognize that an award should be reduced either substantively or due to arithmetic errors, concede it in the brief so that the appellate court can just modify the judgment and affirm—avoiding time by another trip before the lower court.)

Class Actions/In The News: New York District Judge Approves $544.8 Million Fee Award In Visa/MasterCard Antitrust Merchant Class Action

 

Court Utilizes “Sliding Scale” Percentage of Fund Approach, Checked by Lodestar With Multiplier.

The Price?  Priceless.

     After approving a settlement producing a $5.7 billion settlement fund in a class action case brought by merchants against Visa, MasterCard, and several banks relating to certain interchange rates, U.S. District Judge John Gleeson then had to deal with the motion for an award of attorney’s fees and expenses in In re Payment Card Interchange Fee & Merchant Discount Antitrust Litig., Case No. 1:13-cv-03059-JG-JO (E.D.N.Y. Jan. 10, 2014, Doc. No. 18) (for publication). He produced a published decision with an interesting approach, after noting there were few comparators to help guide judges in these types of mega-cases.

     He eventually awarded $544.8 million in fees and a little over $27 million in expenses, although class counsel had requested a fee of $570 million (about 10% of the common fund).

     District Judge Gleeson primarily relied on the percentage of fund approach, but decided that a graduated decreasing schedule was in order, going from 33% of the initial zero-10 million tranche and then winding down in intervals to 6% for the $4-5.7 billion tranche. He observed that this was in keeping with cases finding that the percentage of fund fees should decrease as the size of the fund increases. A lodestar “check” also confirmed the propriety of the award--$160 million was expended in fees, such that the eventual award was one with a 3.41 multiplier—well within the acceptable range for mega-cases.

Civil Rights/Multiplier: $680,520 Fee Award Under FEHA Affirmed On Appeal Even Though Winning Civil Rights Plaintiff Only Won $150,000 In Damages

 

No Statement of Decision Required, and Not Requested—No Fee Award Error.

     This one has quite a lot of permutations for everyone to consider. On the merits, in a first impression case, the appellate held that a defective special verdict is reviewed under a harmless error analysis. However, it also has some nice themes to be scrutinized on attorney’s fees issues.

     In Taylor v. Nabors Drilling USA, LP, Case No. B241914 (2d Dist., Div. 6 Jan. 13, 2014) (published), plaintiff won a jury FEHA verdict of $160,000, which was only reduced by $10,000 to $150,000 on appeal. He also was awarded pro-plaintiff oriented attorney’s fees under the FEHA shifting statute (Gov. Code, § 12965(b)) of $680,520.

     Aside from the important special jury verdict ruling, the fee award was affirmed.

     Plaintiff’s counsel had requested fees of $764,676, inclusive of a 1.5 multiplier. It was clear from the award that a multiplier of 1.4 or 1.5 was applied by the lower court. Although suggesting that appellate review would have been facilitated if the multiplier factors had been specified, the 2/6 Court did acknowledge that no statement of decision was required, and one was not requested either—although it was incumbent on a party to request one. (California Common Cause v. Duffy, 200 Cal.App.3d 730, 754-755 (1987).) No apportionment was necessary because the causes of action were inextricably intertwined. (Wysinger v. Auto. Club of So.Cal., 157 Cal.App.4^th 413, 431 (2007).)

     The lower court did not abuse its discretion in applying a multiplier given that the plaintiff’s counsel was precluded from other employment and took it on a risky contingency basis. (Horsford v. Bd. of Trustees of Cal. State Univ., 132 Cal.App.4^th 359, 399-400 (2005 [failure to compensate for plaintiff risk in bringing even a wholly meritorious case “would effectively immunize large or politically powerful defendants from being held to answer for constitutional deprivations, resulting in harm to the public”].)

     Justice Yegan authored the 3-0 decision on behalf of the appellate court.

     BLOG OBSERVATION—At some point, the appellate courts must face a somewhat interesting inconsistency: is a statement of decision required in fee proceedings? The problem is that if no statement is required, then wouldn’t it be futile for a fee claimant to request one? I guess the theoretical answer is no, the trial judge could still issue one if asked, although not required. However, we do see some pragmatic dissonance such that the issue will have to be confronted one day—although maybe it is resolved on the basis we have just discussed.

Multipliers: New Jersey Supreme Court Applies Its Own Contingency Enhancement Principles

 

Court Rejected Applying U.S. Supreme Court’s Perdue v. Kenny A. To Consumer-Fee Shifting Situations.

     In Walker v. Giuffre, 209 N.J. 124 (2012), the New Jersey Supreme Court consolidated two cases --Walker (where a multiplier was rejected under New Jersey’s fee-shifting Consumer Fraud Act) and Humphries v. Power Mill Shopping Plaza (considering whether a multiplier was justified under the New Jersey Law Against Discrimination)--to consider whether the U.S. Supreme Court’s restrictive anti-enhancement language in Perdue v. Kenny A., 599 U.S. __, 130 S.Ct. 1662 (2010) (occurring in a federal civil rights context) should apply to fee awards under the two New Jersey fee-shifting statutes.

     The Walker court answered “no,” determining that nothing in Perdue caused this state supreme court to vary from its pro-contingency enhancement approach in state fee-shifting statutory contexts. New Jersey, in Rendline v. Pantzer, 141 N.J. 292 (1995), endorsed an “ordinary range” of 5-50% and a “typical range” of 20-35% for contingency enhancements. In Humphries, the 50% enhancement approved by the lower court was justified, although it too is not a cap. Rendine itself allowed up to a 100% enhancement.

     California Response to Perdue--California intermediate appellate courts, also, have followed Ketchum enhancement principles enunciated by the California Supreme Court. Although right now expressed in unpublished decisions, intermediate appellate courts have not found Perdue persuasive in handcuffing multiplier analysis under state supreme court authority. (See, e.g., Khazan v. Braynin, Case No. A128536 (1st Dist., Div. 4 Sept. 12, 2012) (unpublished) [California law different from Perdue, not disfavoring enhancements]; Henderson v. Carter, No. B243220 (2d Dist., Div. 5 Sept. 11, 2013) (unpublished) [rejecting Perdue’s reasoning of disallowing multipliers against losing local governments in state civil rights cases]; Good Nite Inn Mgt., Inc. v. Ahmed, Case No. A129488 (1st Dist., Div. 2 June 29, 2011) (unpublished) [Perdue not relied on; upward/downward adjustments from lodestars far more common under California law than federal law].

     HAT TIP--For more on the Walker decision, see New Jersey attorney Bruce D. Greenberg’s January 5, 2012 post on New Jersey Appellate Law Blog, which looks to be a good informational source for New Jersey practitioners wanting to stay up to date on appellate decisions issued by this state’s judiciary.

Civil Rights/Multiplier: FEHA Plaintiff Winning $470,000 Compensatory Damages Properly Awarded Prevailing Party Fees Of $431,884.25

 

1.33 Multiplier Was Justified.

     Plaintiff in Pena v. Central Freight Lines, Case Nos. A134753/A138014 (1st Dist., Div. 3 Oct. 4, 2013) (unpublished) won $470,000 in economic/noneconomic damages after a bench trial, with the lower court subsequently awarding $431,884.25 in fees under the FEHA fee-shifting statute--including a 1.33 multiplier, despite plaintiff requesting fees of $789,125 (lodestar plus a requested 2.5 multiplier).

     The defense challenge to the award did not succeed on appeal.

     The 1.33 multiplier was justified based on these factors: plaintiff’s attorney took it on a contingency; he worked 4 years without receiving any fees; the attorney incurred $38,000 in costs; and he was successful on his client’s behalf.

Class Actions/Costs/Multiplier/Reasonableness Of Fees: Plaintiffs Winning Vacation Pay Labor Code Class Action Also Garner Costs Of $145,341.93 And Attorney’s Fees Of $5,722,008

 

2.0 Multiplier Enhancement Was Justified.

     In Molina v. Lexmark International, Inc., Case Nos. B227746 et al. (2d Dist., Div. 2 Sept. 19, 2013) (unpublished), an employer suffered a $7,777,620 adverse amended judgment in a class action involving employer’s vacation policy violations of Labor Code section 227.3. The lower court also awarded plaintiffs $145,341.93 in costs and $5,722,008 in attorney’s fees (based on a 2.0 positive multiplier).

     Employer’s challenges to the costs/fees awards were not successful on appeal.

     Costs. Because the lower court had ordered the parties to submit additional expert testimony in the partial new trial damages phase, the $65,030 in expert fees were proper. The costs for “high tech” equipment in the amount of $18,393.87 also was justified. (El Dorado Meat Co. v. Yosemite Meat & Locker Service, Inc., 150 Cal.App.4th 612, 617-618 (2007).) Unspecified travel costs, messenger service fees, parking/hotel/rental car expenses, and weekend air conditioning were properly allowable costs items. Finally in this area, $8,204.07 for computerized legal research was not a cost, but properly awarded as fees. (Plumbers & Steamfitters, Local 290 v. Duncan, 157 Cal.App.4th 1083, 1099 (2007).)

     Fee Award. Although arguing the fee motion was untimely, it actually was not: because a partial new trial motion was granted, time began to run from the date of the amended judgment such that the fee motion was filed within 60 days after entry of the amended judgment. The 2.0 multiplier was warranted because the case had been going on for 5 years, the matter was complex/contentious, the $7 million-plus award was a good result, the thousands of hours expended on the case precluded plaintiffs’ attorneys from other employment, and the case was risk-laden. Also, the appellate court found plaintiffs’ counsel was reasonable in excluding time for an individual claim and that work on the B&P section 17200 claim was interrelated to work on the Labor Code claims. Finally, the $146,783.50 award for “fees on fees” work--129.15 hours for fee-related work--was proper given that the proceeding was contested.

Costs/Lodestar/Multiplier/Section 998: $989,258 Plaintiff Fee Award Affirmed Under Bane Act

 

Additional Costs Awards for Experts and Trial Technology Also Sustained.

     In Bender v. County of Los Angeles, Case No. B236294 (2d Dist., Div. 8 July 9, 2013) (published), plaintiff won an excessive police force Bane Act suit, with the Bane Act containing a fee-shifting clause. The lower court also awarded $989,258 to plaintiff (applying a 1.2 multiplier to the lodestar) as prevailing party attorney’s fees, $26,953.72 for expert witness costs after the defense rejected a CCP § 998 offer beat by plaintiff in the subsequent jury verdict, and $24,103.75 for a trial video computer/PowerPoint presentation/videotaped deposition synchronizing/costs of a trial technician for nine days of trial.

     The appellate court rebuffed defense challenges to the fee and costs awards.

     On the fee challenge, the appellate court liked what the trial court did: it gave a tentative decision “roadmap” on analyzing fee billings and applying a multiplier it deemed appropriate, inviting and receiving supplemental briefing to cement its final decision on fees. Given this expansive record, the reviewing court had no problem sustaining the fee award, especially given that plaintiff had initially requested $1.5 million in fees. (BLOG OBSERVATION--In the words of Justice Fybel (4th Dist., Div. 3), litigants need to provide a “roadmap” to the lower and reviewing courts on fees issues. In this one, the trial court actually crafted it for the litigants.)

     Early road map.  Tabula Peutingeriana, copy of scroll originally dating to about 350 AD, plots part of Roman road network running from Europe and North Africa to West Asia.  Wikipedia.

     The expert fee witness costs were proper because plaintiff did beat the 998 offer, with the defense having criminal testimony for a merits evaluation of the underlying case--notwithstanding that the 998 offer was made “early on” in the case.

      As far as the trial technology costs, the reviewing court found no abuse of discretion in the award. It actually intimated that a contrary denial of trial technology costs in Science Applications Internat. Corp. v. Superior Court, 39 Cal.App.4th 1095, 1103 (1995)--involving much higher costs--might be a dated determination given that use of courtroom technology has become commonplace and much less expensive in nature. So, this decision is one to use when confronting Science Applications in the future. (In Science Applications, $2 million in technology expenses were sought after, compared to the $24,000-plus here--demonstrating that courtroom technology expenses have indeed plummeted in amount.)

Civil Rights/Lodestar/Multiplier: Lower Court Correctly Awarded $165,781 Fee Lodestar Rather Than Requested $2.169 Million

 

Multipliers Also Correctly Denied.

     After a decades long FEHA litigation involving multiple appeals and four litigation phases, partially winning plaintiff in Fotheringham v. Avery Dennison Corp., Case No. B238282 (2d Dist., Div. 7 Feb. 13, 2013) (unpublished) must have felt dismayed when the lower court awarded her only $165,781 in fees (out of a requested $2.169 million, inclusive of requested 2-3 multipliers) and $7,047.05 in costs. She appealed.

     No abuse of discretion here, said the appellate panel. The trial court had discretionn to award a much lower lodestar and correctly denied the multiplier requests because the two germane litigation phases were not that complicated in nature.

     As far as costs, the lower court also cut a 4,800 page “printing/reproduction” costs request of $5,848.81 down to $875.50. This, too, was just fine because the record showed plaintiff was also seeking impermissible paralegal time rather than just out-of-pocket printing/reproduction expenses.

The red snapper’s dream:  Ebisu using an abacus. Toyohiru Utagawa. 1805.  Library of Congress.

Lodestar/Multiplier/Private Attorney General/Substantiation Of Reasonableness Of Fees: Catalyst Theory Fee Recovery Against Gambling Control Commission Affirmed, But Strikes Multiplier For “Fees On Fees” Work On Amount Of Fees

 

Reconstructed Time Sheet Evidence Went Only to Weight, Not Admissibility Of Fee Submissions.

     In Cates v. John Chiang, as State Controller, Case No. D060570 (4th Dist., Div. 1 Feb. 7, 2013) (published), plaintiff received $2,011,844 in fees under a private attorney general “catalyst theory” (lodestar at a blended hourly rate of $451 for 2,398 of attorney hours plus 1.85 multiplier), which was substantially less than her request ($3,073,912-$3,200,000) and much more than advocated by the defense (“no fees” at all). This followed on the heels of plaintiff successfully challenging the Gambling Control Commission’s failure to collect over $12 million in taxes from certain Indian tribes. After both defendants hit with fees, the State Controller and Gambling Control Commission, appealed.

     Controller won a reversal, because the appellate court could not conclude plaintiff showed she was a catalyst as far as this defendant. However, she certainly showed she was a catalyst vis-a-vis the Commission; after all, it made further audits and collected $11.5 million of the over $12 million in tax “underbilling.” Plaintiff was not penalized for failing in attempts to make prelitigation settlement demands, because both defendants adamantly contended they did nothing wrong--the law does not require idle acts, in other words. (Civ. Code, § 3532, which was cited by the court.)

     Well, that turned attention to the amount of fee awarded to plaintiff as against defendant Commission. Fee expert Gerry Knapton seemed to do a good job for plaintiff and was credited at least partially by the lower court in setting the lodestar with a 15% reduction in all time by two attorneys. On appeal, the defense challenged the fact that some of the fee substantiation was reconstructed time, but found this went to the weight rather than admissibility of the evidence--with Mr. Knapton indicating that this likely led to underbilling rather than overbilling. Although finding the 1.85 multiplier deserving on the actual lodestar, the appellate court found multipliers are rarely deserved for “fees on fees” services relating to the amount of fees to be awarded, given that the risk of not obtaining fees is essentially eliminated once fee entitlement is found. So, the fee award against the Commission was affirmed, but with the lower court needing to strike time spent on litigating the amount of fees which should be awarded to plaintiff.

Multipliers/Interest On Fee Awards: Khazan III Comes Down, Affirming Trial Court Award Of Lodestar And Multiplier

 

Appellate Court Dismisses Applying Perdue in California State Court Cases and Affirms that Interest Ran From Date of Remanded New Fee Determination.

     In our March 31, 2009 post, we extensively discussed Khazan v. Braynin (Khazan II), an unpublished appellate court decision where the First District, Division 4 remanded a fee award because it felt some apportionment and relook at the degree of success justifying the fees actually awarded was warranted on the part of the lower court. It also wanted the lower court to consider when interest should run -- from the date of earlier awards or the date of the new fee decision on remand.

     We can now report that the trial judge did award significant fees to prevailing plaintiffs, to the tune of $1,370,604, under Civil Code section 1717 based on a fees clause, apportioning out some time and also considering the degree of success. The judge also found that the prior appellate opinion was a reversal, so interest on the fee award ran from the date of its new fee decision on remand. The appellate court was happy with these determinations, affirming in Khazan v. Braynin (Khazan III), Case No. A128536 (1st Dist., Div. 4 Sept. 12, 2012) (opinion following rehearing).

     Two points caught our eye in Khazan III.

     First, appellants argued that the 1.5 multiplier awarded by the lower court did not follow the directives of Perdue v. Kenny A., 130 S.Ct. 1662 (2010), which in a civil rights context indicated positive enhancements are only appropriate for rare and exceptional cases. The Khazan III court rejected the invitation to apply the standards of Perdue to the case, determining that California law was different and did not disfavor enhancements. (Ketchum--one of our Leading Cases--confirmed that enhancements are appropriate under section 1717, although we might add that have not seen multipliers awarded in many 1717 cases.)

     Second, because the appellate remand was tantamount to a reversal requiring the lower court to review evidence and reset the award, interest on the fee award was found to run only as of the date of the new remand decision affirmed on appeal. (Discussing Stockton Theatres, Inc. v. Palermo, 55 Cal.2d 439, 440-444 (1961); Snapp v. State Farm Fire & Cas. Co., 60 Cal.2d 816, 817-820 (1964); Munoz v. City of Union City, 173 Cal.App.4th 199, 202-203, 207 (2009); Ehret v. Congoleum Corp., 87 Cal.App.4th 202, 204, 210 (2001) [discussing difference between reversal and mere modification for purposes of when interest should run on a fee award].)

In The News . . . . District Judge Awards Wage/Hour Class Counsel 25% Percentage Of Recovery As Attorney’s Fees

 

Award Represented a 3.2 Multiplier.

     In McKenzie v. Federal Express Corporation, U.S.D.C., C.D. Cal. Case No. CV 10-02420 GAF (PLAx) (Doc. No. 139 July 2, 2012), U.S. District Judge Gary Allen Feess (appropriate last name for this post) awarded plaintiffs’ class counsel $2,062,500 in attorney’s fees in a California Labor Code wage/hour case, which represented compliance with the Ninth Circuit’s 25% “benchmark”--25% of the Gross Settlement Amount This award represented a 3.2 positive multiplier, with District Judge Feess refusing to award 33% percentage of recovery, or class counsel’s $2.75 million fee request. Although finding class counsel obtained a positive recovery for the class, the litigation was not exceptional in nature so as to require a deviance from the 25% “benchmark.”

     For those of you wanting to read the class action settlement approval/fee award opinion, you can access it on NALFA’s attorney’s fees blog. We “hat tip” NALFA for bringing this case to our attention.

Lodestar/Multiplier/Postjudgment Enforcement Interest: Published Decision Considers When Interest Runs On California State Fee Awards

 

Also Rejects Application of Perdue v. Kenny A. To State Cases Involving Lodestar Multipliers.

     Khazan v. Braynin, Case No. A128536 (1st Dist., Div. 4 May 30, 2012) (certified for partial publication; fee interest issue published) is an interesting decision that has a scholarly discussion on when interest begins to run on a fee award. The opinion basically held that Stockton Theatres, Inc. v. Palermo, 55 Cal.2d 439 (1961) is still good law, and that interest accrual timing depends on whether there was a reversal versus just a modification of a prior fee award. If a reversal (as in Khazan, where the fee award papers had to be reconsidered on remand), then interest runs from the new award as compared to interest running from the original award if there was just a modification. Khazan also has an interesting discussion of the federal rule, where there is a split on whether interest runs from the date of a fee entitlement award or from the date of the fixing of the amount of fees, and the differences in rates of interest (10% per year in California state courts versus interest tied to T-bill rate in the federal system).

     In the unpublished portion of the case, the appellate court affirmed a substantial lodestar award, reduced by 30% on remand after apportionment of noncompensable or unsuccessful claims, and then enhanced by a 1.5 multiplier (for a total award of $1,115,204 to the lead counsel). The interesting aspect of the discussion here is that the appellate court rejected application of Kenny A. v. Perdue, 130 S.Ct. 1662 (2010) to state multiplier situations, finding that the considerations in federal fee-shifting cases were distinguishable and that California is more liberal in allowing enhancements.

Civil Rights/Section 998: Winning Civil Rights Litigant Being Awarded $416,000 In Fees With A 1.5 Multiplier Was Properly Compensated, With Dueling 998 Costs Awards Also Being Sustained

 

Lower Court Properly Scaled Back Expert Fee Costs Award Against Plaintiff Based on Her Financial Situation.

     Hernandez v. The Regents of the University of California, Case Nos. A129427/A130063 (1st Dist., Div. 4 Dec. 12, 2011) (unpublished) involved some interesting fees and costs issues, especially given the shifting impact of Code of Civil Procedure section 998 when woven into the FEHA pro-plaintiff fee shifting provision.

     In this one, a Native American assistant professor at University of California, Berkeley brought a FEHA claim against the Regents. She rejected a 998 offer of $300,000 plus reasonable attorney’s fees, costs, and expenses. After a jury trial, plaintiff was awarded a total of $266,347, which was less than the defense 998 offer.

     She moved to recover $2,662,645 in fees and $46,312.82 in costs under the FEHA fee-shifting provision. In turn, based on the winning 998 offer, the defense sought a total of $144,560.74 in costs (mainly expert witness fees). After a comprehensive fee/costs hearing, the lower court awarded plaintiff $415,938.75 in fees (with a 1.5 multiplier). awarded plaintiff $26,932.84 in pre-998 offer costs, and awarded the defense $33,414.25 in post-998 offer costs as well as $50,000 in expert witness fees (scaled down from its request for more than $111,000 due to plaintiff’s financial situation).

     Plaintiff appealed the fees and costs awards across the board, all to no avail.

     The hourly rates awarded and multiplier were not incorrect under an abuse of discretion standard. Because plaintiff failed to obtain a more favorable award than the defense 998 offer, the defense was treated as the prevailing party for purposes of postoffer attorney’s fees as costs. The preoffer award of costs was justified. So, too, was the postoffer award of expert witness fees to the defense, because the record did reveal that the trial court “scaled back” the requested $111,000 award to $50,000 based on plaintiff’s financial situation. (Seever v. Copley Press, Inc., 141 Cal.App.4th 1550, 1561-1562 (2006); Holman v. Altana Pharma US, Inc., 186 Cal.App.4th 262, 284 (2010).)

 

The University Library.  Berkeley. c1911.

Multipliers: New Jersey Supreme Court Hears Oral Argument On Impact Of Federal Perdue v. Kenny A. Decision On Fee Enhancements In State Cases

 

October 25, 2011 Oral Argument Heard on Walker and Humphries Cases.

     In our May 30, 2011 post, we discussed Walker v. Giuffre, a New Jersey appellate division decision which disallowed a 45% fee enhancement in a state consumer fraud case based on the perceived more rigorous analysis applied to multipliers by the U.S. Supreme Court in Perdue v. Kenny A, 130 S.Ct. 1662, 1669 (2010).

     Incidentally, the New Jersey Supreme Court on April 14, 2011 certified for review the companion case of Humphries v. Power Mills Shopping Plaza, N.J.App.Div. Docket No. A-6038-08T1 (Nov. 4, 2010 unpublished), which disallowed a 20% fee enhancement in an ADA/New Jersey disability discrimination case based on Perdue.

     We can now report that both Walker and Humphries were argued before the New Jersey Supreme Court on October 25, 2011, so stay tuned for future developments.

Allocation/Multiplier: Winning Overtime/Meal Break Plaintiff Reaps $210,625.75 In Fees

 

1.5 Multiplier Sustained by Appellate Court, Rejecting Application of Federal Perdue Analysis.

     Well, well. This next unpublished decision is interesting on a couple of fronts. First, it illustrates that courts will not hesitate to vindicate wage/hour violations through an award of fees enhanced by a multiplier. Second, it also demonstrates that state courts will not kowtow to federal decisions that are not seen as binding in areas where there is a strong state policy encouraging fee shifting in favors of a certain class of litigants (in this case, employees proving wage/hour violations).

Kowtowing in a court.  Source:  Wikipedia.

     Good Nite Inn Management, Inc. v. Ahmed, Case No. A129488 (1st Dist., Div 2 June 29, 2011) (unpublished) is the case.

     There, a plaintiff seeking regress under California wage/hour violation statutes prevailed (garnering damages of $26,590.66). She then sought substantial fees for both defending against employer claims and litigating her prosecuting her own wage/hour claims. The trial court granted her all but 71.5 hours of her attorney’s time that was allocated to different work, but applied a 1.5 multiplier--resulting in a grand total fee award of $210,625.75.

     Disgrunted employer appealed; disgruntled employer was not any less grumpy after it lost the appeal.

     Employer was swimming upstream on the allocation issue, which is discretionary anyway, because the lower court excised 71.5 hours of work on other tasks. Hard to get over? You bet, and so ruled the appellate court, given that the other work was “inextricably intertwined.” Employer’s citation to unique allocation issues applicable to insurance bad faith cases (Cassim/Brandt) and Cartwright cases (Carver v. Chevron, U.S.A., Inc., 119 Cal.App.4th 498 (2004)) did not strike a receptive chord with the court.

     The 1.5 multiplier issue brought us to an interesting point. Employer relied on the U.S. Supreme Court’s decision in Perdue v. Kenny A., 130 S.Ct. 1662 (2010) for the proposition that the lodestar usually gets it done so multiplier enhancements are taboo. Here is the response: “[Employer’s] reliance on federal authority, however, is misplaced. Our state courts have observed that ‘an upward or downward adjustment from the lodestar figure will be far more common under California law than under federal law.’” (Slip Opn., p. 17.) Yipee, we would guess, would be the response of a lot of state practitioners on this particular topic.

Multipliers: New Jersey Supreme Court Grants Certification Of Fee Enhancement Reversal Based On Perdue v. Kenny A.

 

Walker v. Giuffre Is the Case Under Review.

     In Walker v. Giuffre, 415 N.J. Super. 597 (App. Div. 2010), the Appellate Division reversed a 45% fee enhancement to plaintiffs’ attorneys under the New Jersey Consumer Fraud Act and New Jersey Truth in Consumer Contract, Warranty, and Notice Act. The Appellate Division did so based primarily on Perdue v. Kenny A., 130 S. Ct. 1662 (2010) [reviewed in our prior April 24, 2010 post], where the U.S. Supreme Court majority indicated fee enhancements should be available in only rare and exceptional cases.

     However, the New Jersey Supreme Court fairly recently granted certification to review the fee enhancement issue in the case in light of the Appellate Division’s reversal.

     We would like to thank Bruce D. Greenberg, who has a blog called New Jersey Appellate Law, for bringing this to our attention in his February 11, 2011 post.

          

 

           Above:  Circular Slide Rule from the Museum of HP Calculators.

Common Fund/Multipliers: Recent Vioxx Products Liability Decision Has “Must Reading” Discussion of Common Fund Theory

 

Case Discusses It in Class Action and MDL Complex Litigation Contexts, Also Indicating Perdue Decision Did Not Apply to Using Lodestar as Check on Percentage of Recovery Fee Award.

     For those practitioners dealing with cases where a common fund is created (from which fee awards are frequently sought), we came across a case that is must reading. It is In re Vioxx Products Liability Litig., __ F.Supp.2d __, 2010 WL 5576193 (E.D.La. Oct. 19, 2010), authored by U.S. District Judge Eldon E. Fallon.

     Aside from having a very scholarly discussion of the reasons behind the common fund doctrine, Vioxx was interesting in that it involved the settlement of astronomical litigation where over $4.3 billion was funded and distributed to numerous claimants within 31 months. District Judge Fallon found that the common fund doctrine had been creatively used to assess common benefit fees in favor of attorneys who render legal services beneficial to all MDL plaintiffs, even though they only represented a small segment of the plaintiffs directly.

     Eventually, the district court adopted a “blended” percentage method to determine a reasonable fee award, determining first the valuation of the benefit received by claimants, then selecting a benchmark percentage, and finally adjusting upwards/downwards through a multiplier process. District Judge Fallon determined that 6% of the settlement amount was a reasonable benchmark for a common benefit fee award, but coming out of the contingent fee recoveries of all Vioxx primary plaintiffs’ attorneys. However, the district court then adjusted this percentage upward by .5% to a total of 6.5%.

     Lastly, the district court used a lodestar “check” on the reasonableness of the common fund award. The common benefit fee award came to $315,250,000, not bad at all. In a footnote, District Judge Fallon dismissed that Perdue v. Kenny A., 130 S.Ct. 1662 (2010) impacted using the lodestar as a cross-check of a common benefit awarded as a percentage of a common fund, finding that “[t]he Supreme Court’s holding was informed by the Supreme Court’s lodestar jurisprudence and the statutory purpose of [42 U.S.C.] § 1988.” Id. at *17 n. 25.

Lodestar/Private Attorney General Statute: Negative Multiplier Based On Perception Fee-Owing Government Agency Could Use Money To Fund Ongoing Operations Was No Reason To Reduce Lodestar

 

Second District, Division 8 Believed Financial Factor Could Be Considered Based on Settlement Agreement, But Did Not Beiieve Ongoing Operational “Cut” Rationale Was Justified.

     A redevelopment agency in Rogel v. Lynwood Redevelopment Agency, Case No. B219626 (2d Dist., Div. 8 May 2, 2011) (certified for publication) was exposed to up to $2.7 million in attorneys’ fees requested by plaintiffs prevailing in a public interest suit based upon the private attorney general statute (CCP § 1021.5). However, after the parties settled under an agreement allowing the trial court to consider agency’s financial condition, the lower court cut the $2.7 million lodestar down to $540,000, applying a 0.2 negative multiplier in the process. The reasoning? Agency introduced proof that a fee award in excess of $536,000 would be made at the expense of low and moderate income housing for the City of Lynwood’s residents, with the lower court determining that the money was bettter spent funding ongoing governmental operations rather than paying the prevailing parties in the litigation.

     The appellate court, on review, found this constituted an inappropriate reason to cut the lodestar. Although the settlement agreement allowed consideration of agency’s financial situation, it should not be allowed to override the fact prevailing parties were entitled to a lodestar compensating their attorneys for the market value of their work. “In our view, Serrano III [Serrano v. Priest, 20 Cal.3d 25, 49 (1977)], Horsford [v. Board of Trustees of California State University, 132 Cal.App.4th 359, 400-401 (2005], and Schmid [v. Lovette, 154 Cal.App.3d 466, 476 (1984)] preclude a rule which awards less than the fair market value of attorneys’ fees merely because the case was filed against a government agency. We also see a strong public policy against such a rule. Allowing properly documented attorneys’ fees to be cut simply because a losing party is a governmental entity would defeat the purpose of the private attorney general doctrine codified in Code of Civil Procedure section 1021.5 and would also incentivize governmental entities to negligently or deliberately run up a claimant’s attorneys’ fees, without any concern for consequences.” (Slip Opn., p. 15.) Reversed and remanded for reconsideration of a proper fees award.

Class Action/Lodestar/Multiplier: First District, Division 1 Affirms $1,664,777.48 Fee Award, Using A 1.4 Multiplier, When Total Damages/Interest Award Was About $1.2 Milliion

 

Requested 2.0 Multiplier Scaled Back to 1.4.

     Just to show you how class action fee awards can often be larger than the damages awards in protracted, contentious cases, we now digest Alcoser v. Thomas, Case Nos. A124848 et al. (1st Dist., Div. 1 Feb. 16, 2011) (unpublished).

     There, a tenant successfully won a case against a landlord about withholding rent deposits on behalf of a class. After post-trial motions, the total damages/interest award came to about $1.2 million. The lower court, noting landlord’s “scorched earth manner of defending the case,” awarded plaintiffs $1,664,777.48 in attorney’s fees and costs, applying a 1.4 multiplier to the lodestar (a little lower than the 2.0 requested by plaintiffs).

     Landlord’s challenges to the fee award were rejected on appeal, in a 3-0 opinion authored by Justice Dondero. CCP § 1021.5 allowed for recovery of fees in this class action context. Winning plaintiffs presented contemporaneous time records and task-based summaries, sufficient substantiation for fee petition purposes. The 1.4 multiplier was justified based on the “scorched earth” defense of landlord, among other factors.

Allocation/Reasonableness Of Fees/Special Fee Shifting Statutes/Lodestar/Multiplier/Costs/Standard Of Review: Lower Court Did Abuse Discretion In Awarding Certain Expenses As Fees, In Failing To Allocate, And In Applying A Multiplier

Abuse of Discretion Standard Did Not Prevent Reversal When Record Showed Errors, According to Sixth District.

     In an interesting contrast to the way the abuse of discretion standard was deferentially applied in our contemporaneous post in Murrell v. Rolling Hills Community Association, the Sixth District found that the trial court abused its discretion in numerous ways in the amount of fees awarded in a financial elder abuse case (even though the issue of fee entitlement was not disputed).

     Defendant in Bell v. Bunch, Case No. H032980 (6th Dist. Jan. 31, 2011) (unpublished) was found to have committed financial elder abuse against plaintiff. Welfare and Institutions Code section 15657.5(a) has a fee shifting statute. In a postjudgment order which was separately appealed (something we have argued should be done in all cases), the trial court awarded plaintiff statutory fees and costs of $290,684.93 inclusive of a 1.2 multiplier on everything but “fees on fees” plus $5,824 in expert witness and investigation fees. Defendant appealed, challenging entitlement on some of the costs and the amount of fees awarded. (Plaintiff had sought a lodestar of $256,138.75, plus $5,824.43 in expert witness/investigation fees, or a total lodestar of $261,963.18 plus addition of a 1.5 multiplier for a total request of $392,944.77.) Defendant Bunch’s appeal was a good move.

Elderly man clasping cane.  c1900.  H.L. Bundy, photographer.  Library of Congress.

Civil Rights Multipliers: U.S. Supreme Court Narrows Use Of Enhancements In Federal Civil Rights Case

Lodestar Should Capture the Usual Fee Recovery; Federal Judges Must Provide a Reasonably Specific Explanation for All Aspects of a Fee Determination.

At least in the area of federal civil rights cases (although the opinion may have broader applicability), the U.S. Supreme Court has issued an important decision relating to fee enhancements in Perdue v. Kenny A., Case No. 08-970 (U.S. April 21, 2010).

Here are the highlights from Perdue:

· The lodestar carries with it a strong presumption that its methodology yields a sufficient fee;

· A fee enhancement in civil rights cases may be awarded in rare circumstances where the lodestar does not adequately account for reasonable fee factors;

· Quality of an attorney's performance is an enhancement factor, but only to the extent that it stems from a superior performance rather than the inferior performance by opposing counsel;

· Enhancements are appropriate where (1) the method used to determine the hourly rate does not adequately measure the attorney's true market value; (2) the attorney's performance includes an extraordinary outlay of expenses and the litigation is exceptionally protracted; and (3) an attorney's performance involves exceptional delay in the payment of fees; and

· Federal judges must provide proper justification for fee enhancements, providing a reasonably specific explanation for all aspects of a fee determination inclusive of any enhancement.

The interesting questions are whether this decision will be applied outside the federal civil rights area and whether California state courts will borrow from its reasoning.

  Postscript:  Hat Tip to Julie Brook, of Continuing Education of the Bar, who on May 5 brought to our attention a CEB post on some questions left open by Perdue.