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Ninth Circuit Approves Fee Award Greater Than Damages

December 16, 2013 | Posted in : Billing Practices, Contingency Fees / POF, Fee Award, Fee Award Factors, Fee Issues on Appeal, Fee Jurisprudence, Fee Reduction, Fee Request, Hourly Rates

A divided Ninth Circuit panel has rejected the United Parcel Service’s challenge to a nearly $700,000 attorney fee award in a gender discrimination case that resulted in a jury verdict of just $27,280.  U.S. District Chief Judge Claudia Wilken of the Northern District of California had awarded about 36 percent of the $1.95 million in attorney fees sought by lawyers at Kerr & Wagstaffe and The Jaffe Law Firm in San Francisco.  But the attorneys for UPS at Paul Hastings argued that the fee award should be chopped further because plaintiff Kim Muniz recovered comparatively little in damages and had not prevailed on most of her claims.

In Muniz v. UPS, Muniz sued UPS in 2009 alleging retaliation as well as age and gender discrimination after she was demoted from a management position.  A three-judge panel in the U.S. Court of Appeals for the Ninth Circuit ruled that Wilken had acted within the considerable discretion that California law allowed her.

Kerr & Wagstaffe partner Michael von Loewenfedt, who represented in the appeal, said the panel’s verdict is an important victory for low-wage workers.  The law’s flexible standard for attorney fees ensures that employee of limited means are able to secure representation in costly discrimination suits, he said.  He added that Wilken had already given the fee award a “pretty severe haircut.”  Wilken reduced the hourly rates requested by plaintiffs lawyers as well as the total number of hours they could claim due to insufficient recordkeeping, according to the ruling.  She then reduced that figure by another 10 percent because Muniz’s claims for age discrimination and retaliation did not pan out.

UPS said that discount fell far short but did not attempt to calculate how many hours Muniz’s lawyers had spent working on the failed claims.  After finding the fee request was inflated, Wilken had the authority to hack it severely or decline to award attorney fees altogether, the judges noted.  But they found she could not be faulted for leaving considerable fees intact.  Wilken “concluded that a total denial of fees or limited the award to a nominal amount would be too severe a sanction,” Singleton wrote.