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CA Appeals Court Affirms Fee Award with High Rate But No Multiplier

July 16, 2020 | Posted in : Contingency Fees / POF, Fee Agreement, Fee Award, Fee Award / Request Case Data, Fee Award Factors, Fee Calculation Method, Fee Data / Fee Analytics, Fee Issues on Appeal, Fee Jurisprudence, Hourly Rates, Lodestar, Prevailing Party Issues

A recent Metropolitan News story, “C.A. Affirms Attorney-Fee Award Not Boosted by Multiplier reports that a California Court of Appeal has affirmed a decision by a Los Angeles Superior Court judge who declined to apply a multiplier to an attorney fee award in an action that produced a $1 million judgment for a plaintiff who sued his employer for racial harassment, saying it assumes that the high hourly rate that was applied takes into account that the case was taken on a contingency basis.  However, the judge who made the award—Victor E. Chavez—made no such indication, saying in his order that the attorneys were worth the rates they proclaimed for themselves, but the nature of the case did not warrant an enhancement.

Justice Dorothy Kim of Div. Five wrote the unpublished opinion.  It upholds a post-judgment order by Chavez assessing attorney fees in favor of the Law Offices of Kyle Todd, located in downtown Los Angeles, in the amount of $592,075, the total lodestar amount the firm claimed based on 1,392.5 hours of work on the case over a three-year period.  The award was made under Government Code §12965(b) which provides for attorney fees to a prevailing party in an action brought—as was the that of the Todd firm’s client, Tracy Scudder—under the state’s Fair Employment and Housing Act.

In particular, Chavez granted Todd the $500-per-hour figure he claimed as reasonable for the 904.3 hours he said he devoted to the case, rejecting the defendant’s protest that such a rate exceeded the $360.27 norm for lawyers in Los Angeles County during the relevant period, from 2015-18.  The judge also honored the rate of $400-per-hour which, it was contended, represented the value of services of an associate in the office, Maximilian Lee, who said he spent 250.5 hours pursuing the interests of the client.

Chavez said that $360.27-per-hour figure, contained in the United States Attorney’s Office fees matrix “is not sufficient to compensate Mr. Todd based on his experience and the facts showing that he is an exceptional attorney” and also found that $400-an-hour was “a reasonable rate to bill for the legal services” that Lee provided.  The amount sought by Todd’s firm, with a multiplier of 200 percent, was $1,184,150. The award which the defendant, the state Department of Transportation, asserted would be appropriate was $289,458.04.

Chavez, a former presiding judge of the Superior Court, said in his Sept. 11, 2018 order: “There is no evidence that the questions in this case were novel or difficult.  This case concerned workplace harassment and discrimination based on race and there were no unusual or complex issues that required exceptional skill to resolve.

“Further, a review of the Court file does not reveal any exceptional skill displayed by counsel that far exceeds the quality of representation that would have been provided by an attorney of comparable skill and experience.  The Plaintiff’s attorneys identify the time that they spent or the case and the above amount of $592,075 will compensate them for their legal services.”  The judge found that Todd “does not provide specific facts to demonstrate that his attorneys were precluded from other employment” by virtue of devoting their concerted efforts to Scrudder’s case. He viewed as inadequate a declaration from Victoria Rolon, a legal assistant in the firm, who said:

“This case took up a large portion of our firm’s time since I joined in early 2016, and by November 2017, as the first genuine trial date approached, our firm’s work on other matters went down significantly.  From then through the end of trial on March 9, 2018, our firm was almost exclusively engaged in work on this case, at the expense of taking in new cases.  For example, I typically provide the first-line intake of new case matters, and for the preparation of trial and during, we were telling prospective clients we were simply too busy to accept new cases at the firm.”

Chavez remarked: “[A]lthough Victoria Rolon states in paragraph 6 that, as the trial date approached, the Plaintiffs firm was telling prospective clients that it was too busy to accept new cases, Ms. Rolon provides no specific facts to show that the Plaintiff’s firm was precluded from accepting such a substantial amount of business that a multiplier should be applied.”

Kim said that some of the assaults by the Todd firm on Chavez’s ruling cannot be addressed owing to the lack of a transcript of the fee-hearing before the judge.  But, she declared, based on the record that was presented, it is clear that the firm is in error in asserting that Chavez “refused to consider the relevant ‘contingency and delay factors’ present in this case” in declining to apply a multiplier.

She wrote: “[W]e…reject any argument by plaintiff that the trial court did not adjust the fee amount in any ‘manner to reflect the fact that the fair market value of legal services provided on [a contingent basis] is greater than the equivalent non-contingent hourly rate.’…The court rejected defendant’s request to lower counsel’s fees to the Los Angeles market rate as calculated by an attorney fee matrix, finding that the full rates sought by plaintiff’s counsel were reasonable.  Further, the court found that counsel, who worked on a contingency basis, would be ‘fully compensated’ by the lodestar amount.  We presume the court concluded that its lodestar calculation already accounted for the contingent nature of the fee award.”

It was conceded by the Todd firm, Kim noted, that Chavez did allude in his order to the contingency-fee arrangement.  He said in his order: “[A]lthough the Plaintiffs attorneys took this case based on a contingent fee retainer agreement, the above analysis of the Plaintiffs fee request demonstrates that the Plaintiff’s attorneys will be fully compensated for the time they spent on this case and this offers no grounds to award a multiplier.”

Kim said the Todd firm is in error in asserting that Chavez was legally obliged to apply a multiplier, and remarked: “The trial court was in the best position to evaluate the reasonableness of plaintiff’s requested attorney fees.  We find the court did not abuse its discretion.”