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Taco Bell Workers Lose Big Portion of $7.3M Fee Request

July 19, 2016 | Posted in : Billing Practices, Fee Award, Fee Award Factors, Fee Reduction, Fee Request, Hourly Rates, Lodestar

A recent Law 360 story “Taco Bell Workers Win Fraction of ‘Inflated’ $7.3M Fee Bid,” reports that a California federal judge on gutted a $7.3 million attorneys’ fees bid from Taco Bell workers who won on claims they were shortchanged on meal breaks but lost on other claims, calling the request “inflated” and “unreasonable,” particularly with the action’s limited success.

In a 40-page order, U.S. Magistrate Judge Stanley A. Boone gave a detailed explanation on why he awarded the legal team only $1.15 million, about 16 percent of the amount requested.  “Considering plaintiffs' limited success in this action and the damages awarded by the jury to the underpaid meal premium class, the court finds that this amount reasonably compensates plaintiffs for their efforts in this action," he said.

The fee award is the latest twist in the long-winding case, which centered on allegations from a class of workers who claimed the fast food chain didn’t pay them for a full hour’s work when they missed meal breaks, as required by California law.  First filed in September 2007, the suit was consolidated in 2009 with several others that accused Taco Bell of similar wage violations.

In March, a federal jury found that Taco Bell underpaid its workers when they missed their meal breaks, a violation of California law, and awarded the class nearly $496,000 though the jury found no issue with the chain’s other rest and meal break policies.

For their work in the case, counsel for the plaintiffs, representing five different firms, sought to be compensated for 12,876 hours they said was expended in this litigation: nearly half, 6,333.5 hours, attributed to Capstone Law APC, and another 4,767.3 hours on behalf of Initiative Legal Group APC.  The remainder is roughly split between Sutary Chandler APC, the Law Offices of Mark Yablonovich and Bisnar Chase.  The judge found the billing “excessive.”

“Plaintiffs are seeking recovery for fees for multiple firms, some of whom did not present any evidence that any work in this action was on the claims that went to trial,” the judge said.

Attorneys billed over 180 hours for performing duties that “should be part of the overhead,” the judge said, adding that multiple attorneys billed time for the same events and to review the same documents.

Although plaintiffs told the court the class claims in the action are related and intertwined and they should be reimbursed for the work done on all claims, the judge disagreed and reduced the hours for work done on the unsuccessful claims.

Additionally, the judge found fault with the plaintiffs’ use of attorneys who charged rates not aligned with those of counsel in their area of Fresno.  “The court finds that plaintiffs have not met their burden to show it was impracticable to hire a local attorney to litigate this action on behalf of their class,” the judge said.  “The rates applied in this action shall be for those attorneys in the local community.”

As a result, rates from partners to associates were slashed, most up to one half, with Initiative Legal Group partner G. Arthur Meneses seeing his requested rate of $710 per hour adjusted to $400 and Capstone Law partner Matthew Theriault’s hourly rate dropping from $670 to $325.

Finally, the Taco Bell workers sought to have the fees multiplied by 1.5 in light of the work done, but the judge found it wasn’t warranted.  He noted that plaintiffs sought $10 million for the underpaid meal premium class “and were only awarded damages in the amount of $495,913.”

The case is Sandrika Medlock v. Taco Bell Corp. et al., case number 1:07-cv-01314. in the U.S. District Court for the Eastern District of California.