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Category: Lodestar / Multiplier

CA Appeals Court: Cutting Fee Award By 28 Percent Was Warranted

April 2, 2020

A recent Metropolitan News story, “Slashing Fee Award to 28 Percent of Amount Claimed Was Warranted,” reports that the Court of Appeal for this district has affirmed Los Angeles Superior Court Judge Randolph Hammock’s award of $95,900 in attorney fees to the successful plaintiff in a “lemon law” case, holding that there was no abuse of discretion in spurning the trial lawyers’ request for $344,639.

Plaintiff Lorik Mikhaeilpoor was represented in the trial court by Strategic Legal Practices, APC (“SLP”), a Century City firm that is headed by Payam Shahian and specializes in actions under the Song Beverly Consumer Warranty Act.  Its telephone number is 888-SLP-LEMON and the firm promotes itself as providing services of “Lemon law attorneys for the toughest cases.”  Mikhaeilpoor sued BMW of North America LLC and Finchey Corporation of California alleging failed efforts to repair her 2013 BMW 328i and a refusal to replace the vehicle or make restitution.

A jury on Feb. 28, 2018, awarded her $17,902.54 in compensatory damages, which was doubled, as provided for by the Song Beverly Act, for a total of $35,805.08.  The act also mandates an award of attorney fees “reasonably incurred”—although, under case law, an award may be denied where the amount sought is unconscionable.  In his Sept. 21, 2018 order granting $95,900 in attorney fees—reduced to $94,864 in light of awards of attorney fees and costs to the defendants—Hammock said “that the amounts billed” by SLP “are unreasonable, including dual billing of attorneys when the work of only one (at times) was reasonably required.”

The SLP attorneys sought fees at rates ranging from $325/hour to $595 an hour.  Those rates, the judge found, are “reasonable in the community,” but added that attorneys who bill at such rates “should not need to research routine issue of law and should resort to boilerplate when it will serve the client’s purposes.”

Hammock commented:  “This was not a complicated case. Plaintiff was lucky, in this Court’s opinion, to win anything.  This Court will not compound the generosity of the jury.”  He added: “Plaintiffs attorneys should be forewarned: This Court did seriously consider denying the motion for fees in its entirety, since the request of almost $350,000 was quite shocking and ‘unreasonably inflated.’

“This Court is aware of the substantial fees and costs which are incurred in bringing a case to trial before a jury.  It is also aware of the pro-consumer rationale of the Song Beverly Act in liberally awarding such fees and costs….A request of almost $350,000 in fees for this particular case— which this Court has essentially handled from beginning to end—is simply unacceptable.  Indeed, the request for a multiplier was specious.”

Mikhaeilpoor argued on appeal that Hammock  acted arbitrarily in setting the fee award and had neglected to begin his analysis by setting a lodestar amount.  “In finding that $95,900 was the reasonable amount of attorney fees in this case, the trial court expressly invoked the lodestar method.”  White wrote.

The order says: “In light of the foregoing, the Court finds that the lodestar amount of attorney’s fees is $95,900.00, which includes the fees incurred in connection with bringing the instant motion.  This was calculated by finding a total amount of 274 hours which were reasonably incurred to  date, at the average rate of $350 per hour.”

White remarked: “Despite the trial court’s clarity, Mikhaeilpoor mischaracterizes the analysis the court employed in order to create the illusion of error where there is none.”  The jurist pointed to Hammock’s findings and declared, in agreement with him: “Plaintiff ’s counsel spent an unreasonably excessive amount of time dealing with this non-complex case.”

Rejecting Mikhaeilpoor’s contrary contention, she said Hammock did not impermissibly tie the attorney fee award to the amount of compensatory damages that were recovered.  The $344,639 award proposed by Mikhaeilpoor was comprised of $226,426 in fees allegedly earned, with a .50 multiplier enhancement—or $113,213—plus $5,000 for work in connection with the defendants’ objection to the amount that was sought.  Hammock’s award included recompense for time spent on the fee motion but there was no enhancement.

“While the court’s rationale for the lodestar reduction also  influenced the denial of a multiplier, the court went further as to  the multiplier issue, emphasizing that this was ‘not a complicated  case,’ and the ‘request for a multiplier was specious,’ ” White wrote.  This, she said, has a bearing on the issue of whether an enhancement is warranted based on the “novelty and difficulty of the  questions involved.”  That the case was a simple one, White noted, is borne out by evidence that Shahian only becomes personally involved in a case if it’s complex, and there was no billing for his time.

Christine Haw was lead counsel in the case. Haw, who is no longer with SLP, had been an attorney for only about five years, but, it was claimed, she had handled “hundreds of automotive defect cases involving Song-Beverly.” Hourly rates were sought for her at $365 and $375.

White said that despite that experience, Hammock “reasonably found that Haw did not leverage her experience to produce efficient litigation,” noting: “Haw personally billed more than 240 hours, and required the help of nine other attorneys at various points in the litigation.”  She said Hammock was in the best position to determine the reasonableness of the amount sought, substantial evidence supported his decision, and there was no abuse of discretion.

Ohio Supreme Court Cuts $4M in Fees; Redefines Lodestar

March 26, 2020

A recent Bloomberg Law story by Alex Ebert, “$4M Attorney Fee Award Cut in Half by Ohio High Court,” reports that a nearly $4 million payday for a prevailing group of attorneys was lopped in half by the Ohio Supreme Court, which ruled an “enhancement” that doubled the winning lawyers’ fees went too far.  Ohio’s lodestar calculation, the method for determining a reasonable attorneys fee, already factors in the complexity and time of litigation, and the expertise of the attorneys involved, the court said in its opinion issued.

A state trial and appellate court were wrong to look to these factors and double the more than $1.99 million in attorneys fees awarded to Phoenix Lighting Group LLC’s lawyers, the high court said.  The legal team won the lighting business a $5,518,335 judgment following years of litigation over claims that its value was reduced by unlawful actions by a competitor, Genlyte Thomas Group LLC, dating back to incidents that occurred in 2009.

“Today’s decision communicates the Ohio Supreme Court’s desire to limit an attorney’s ability to receive an enhancement in attorney fees in cases where his or her performance was exceptional or where the attorney, for the best interest of the client, took on a case with exceptional risk,” Phoenix Lighting Group’s attorney Jeffrey Witschey, a partner with Akron-based Witschey Witschey & and Firestine Co., LPA, said in an email.

“The danger with the decision is the potential chilling effect on attorneys taking cases for clients that are unable to financially support long legal battles with wealthier opponents,” he said.  The court made the “right decision and established appropriate limitations that will make enhancements rare in Ohio and require the rare enhancement to be based on objective evidence that is reviewable on appeal,” Genlyte Thomas Group’s attorney Benjamin Sasse, a partner in Tucker Ellis LLP’s Cleveland office, said in an email.

The court shouldn’t increase the fees just because the payoff took a long time, the justices said.  “Enhancements to the lodestar should be granted rarely and are appropriate when an attorney produces objective and specific evidence that an enhancement of the lodestar is necessary to account for a factor not already subsumed in the lodestar calculation,” Justice Melody Stewart wrote in the majority opinion signed by seven justices.

Justice Sharon Kennedy issued a concurring opinion that agreed with Stewart but said trial courts must weigh each reasonable-fee factor individually, and not believe all factors are bound-up perfectly in the lodestar analysis.  Justice Patrick Fischer also a separate concurring opinion saying that courts must also be mindful of the “time value of money” in cases that take years to resolve.  The underlying issues in this matter began in 2004.  “Prevailing plaintiffs who have paid their attorneys over the course of the lawsuit and attorneys working on a contingent-fee basis have been deprived of the use of their money throughout the lawsuit,” Fischer said in his concurrence.

Class Counsel Earn $8.3M in Fees in Resistor Antitrust Action

March 25, 2020

A recent Law 360 story by Nadia Dreid, “Cotchett Pitre Gets $8.3M in Fees in Resistor Antitrust Fight,” reports that Cotchett Pitre & McCarthy LLP will walk away with $8.3 million for its role in securing a $33.4 million deal for indirect buyers who say that Panasonic Corp. and other electronics companies overcharged them for resistors.  A California federal judge gave the settlement and accompanying attorney fee request his final blessing, finding that both were "fair and reasonable" and that the firm asked for less than it could have.

"Counsel for [indirect purchaser plaintiffs'] requested fee award represents less than 73% of their reasonable lodestar, a negative multiplier.  This further supports the reasonableness of class counsel for [indirect purchaser plaintiffs'] attorney fee request," U.S. District Judge James Donato said in his ruling.  The firm requested — and will be pocketing — about 25% of the settlement as attorney fees, as well as an additional $1.4 million as reimbursement for expenses, according to the court's order.

Class counsel ended up going with the percentage method to calculate its fees.  In cases where classes opt for the percentage method, 25% is normally used as a benchmark in California, with a possibility for attorneys to receive up to 30% of the settlement fund, depending on the circumstances.  But Cotchett Pitre won't get all those funds yet.  A quarter of the $8.3 million in attorney fees will be held back until the firm has finished up its post-distribution accounting, Judge Donato said in his order.

The fee approval was smooth sailing for the indirect purchaser attorneys compared to the ordeal faced by their colleagues representing direct purchasers of the resistors.  Judge Donato ripped into their $10 million fee bid for being "insufficient" in a September order, scolding Hagens Berman Sobol Shapiro LLP and Cohen Milstein Sellers & Toll PLLC for failing to provide enough detail and reasoning in their fee request in what he called a "disservice to the class and the court."  The judge did eventually greenlight the $10 million in attorney fees at a second hearing, after receiving billing charts that assured him everything was on the up-and-up.

$7.3M in Attorney Fees in Fitbit Class Action

March 20, 2020

A recent Law 360 story by Mike Curley, “Atty Awarded $7M Fee in Fitbit Sleep-Tracker Class Suit,” reports that a California federal judge approved just over $7 million in fees to attorneys representing a class that sued Fitbit over an allegedly faulty sleep-tracking function in its wrist-mounted devices, trimming the initially requested award by about $300,000.  In a final order approving a settlement between the class, led by named plaintiff James P. Brickman, and Fitbit, U.S. District Judge James Donato slashed the lodestar amount for the suit from $3.85 million to $2.75 million, but increased the multiplier from 1.9 to 2.5, resulting in a dip from the initially requested $7.3 million to just more than $7 million.  The $7 million includes $6.9 million in fees, and $151,610 for all costs, according to the order.

In a separate order approving the attorney fees, Judge Donato noted the unusually good recovery in the settlement, which sees each class member receiving a $12.50 payment, while the maximum recovery they could have expected through litigation would have been $15.  Also included in the settlement are $5,000 service awards for named plaintiffs Brickman and Margaret Clingman and $500 service awards for each of the other seven named plaintiffs.

Patrick J. Perotti of Dworken & Bernstein Co. LPA, representing the proposed class, told Law360 that the judge recognized it was a very complicated case as well as the amount of work that class counsel put into litigating the unusual claim.  "The outcome is excellent and extraordinary because there's never been a case in history which has addressed and challenged sleep-tracking in an app or otherwise, as a consumer function," Perotti said.  "The case was extremely hotly contested by Morrison & Foerster and its client."

Customer James P. Brickman filed suit in May 2015, claiming customers paid extra — at least $30 more than what they would've paid for the basic Fitbit Zip — for Fitbit's premium sleep-tracking products, according to court filings.  But an academic study found that Fitbit devices overcount sleep time by about 67 minutes per night compared to the most accurate sleep-measuring technology, Brickman said in the complaint.  Margaret Clingman, another lead plaintiff, joined the suit later.  They alleged Fitbit violated California and Florida consumer protection statutes by falsely claiming the devices track sleep time, sleep quality and when users wake up.

Following several rounds of pleading and Fitbit's failed motion to dismiss, the court certified a Florida class and California class in November 2017. The classes included consumers who purchased and registered online a Fitbit Flex, a Fitbit One or a Fitbit Ultra between 2009 and October 2014, according to the filings.  In August 2018, Fitbit reached a deal with customers, which was then rejected before an amended deal garnered approval in October 2018.

In May 2019, class counsel for the customers requested the $7.3 million in attorney fees along with $367,000 in reimbursement of out-of-pocket costs, according to the plaintiffs' motion.  In June, Fitbit moved to reduce the fees, arguing the $7.3 million request for fees and court costs amounts to 133% of the total $5.52 million settlement and was "excessive, unsupported and disproportionate" to the class' recovery.

Second Circuit Affirms $15M Fee Award in Dam Breach Action

March 16, 2020

A recent Law 360 story by Morgan Conley, “2nd Circ. Affirms $15M Fee Award for Dam Breach Deal Attys,” reports that the Second Circuit ruled attorneys from Robbins Geller Rudman & Dowd LLP and Pomerantz LLP earned their $15 million cut of a $50 million deal between investors and mining giant BHP Billiton Ltd. despite an objector’s argument they were overpaid.

In a unanimous summary order, a three-judge panel found the lower court did not err when it approved the attorneys receiving 30% of the $50 million fund they secured for investors in a consolidated suit alleging BHP lied to investors about lax safety standards at a Brazilian processing facility prior to a massive dam breach.  The panel shut down claims from investor John W. Davis, a regular class action objector, that the attorneys were unfairly paid at a “roughly 172% premium” on top of their usual hourly rates.

The court explained that plaintiffs’ counsel spent more than 10,000 hours working on the case, which it described as having “a complicated procedural and factual history, difficult legal issues, and a settlement amount that was statistically above- average.”  “On this record, we cannot say that the district court exceeded its considerable discretion in awarding attorneys’ fees,” the court said.

Davis had contended the attorneys' normal hourly rate of between $400 and $1,030 would have been sufficient but that the New York district court wrongfully applied a 2.72 multiplier to raise the payment window to $1,088 and $2,800.  The panel said a lodestar multiplier is appropriate when attorney fees are being paid from a common fund.  Davis also alleged the lower court did not adequately defend its reasoning for the fee award.  The court again disagreed, citing evidence in the record of how much work went into the case.