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Ninth Circuit Doubles Fee Award in California Medicare Litigation

April 8, 2021 | Posted in : Fee Award, Fee Award Factors, Fee Doctrine / Fee Theory, Fee Issues on Appeal, Fee Reduction, Fee Statute, Fees & Judicial Discretion, Hourly Rates, Hours Billled, Lodestar, Lodestar Multiplier, Practice Area: Civil Rights / Public Interest, SCOTUS

A recent Metropolitan News story, “Ninth Circuit Ups Attorney Fee Award Against California From $4 Million to $8.2 Million,” reports that the Ninth U.S. Circuit Court of Appeals has decided that a District Court judge, at the tail end of years-long litigation to bar slashes in California’s Medicare program, short-changed a law firm in her award of attorney fees by reducing its hours and declining to employ a multiplier, with the appeals panel declaring that the firm is entitled to nearly $8.2 million.

The action was brought in Los Angeles Superior Court on April 22, 2008, and the state removed it to the U.S. District Court for the Central District of California on May 19, 2008.  Plaintiffs are the Independent Living Center of Southern California, two branches of the Gray Panthers, and several pharmacies and pharmacists, along with individual Medicaid recipients.  “Litigation in this case spanned twelve years and included argument at every level of the federal courts,” the Ninth Circuit’s latest opinion in the case notes.

The case, which spawned a U.S. Supreme Court opinion in 2012, was settled in 2014.  District Court Judge Christina A. Snyder of the Central District of California ruled on July 6, 2015 that California Code of Civil Procedure §1021.5, the private attorney general statute, “cannot support an award of attorneys’ fees in this case”; the Ninth Circuit vacated her order and remanded on Nov. 21, 2018; on Jan. 24, 2020, Snyder awarded the Los Angeles law firm of Stanley L. Friedman $2,731,800, saying:

“This amount reflects the product of the $628/hour rate that the Court found to be a reasonable lodestar rate for the Friedman firm, and the 4.350 hours that the Court found to be a reasonable lodestar for the total number of hours spent by the Friedman firm litigating this case.”  The intervenors’ counsel did most of the work, she remarked, concluding: “The Friedman firm’s supporting role during the merits stage of this case simply does not support a fee enhancement.”

The Ninth U.S. Circuit Court disagreed.  “Here, the district court inadequately justified awarding Friedman only fifty percent of his requested hours, while awarding Intervenors’ counsel one hundred percent of theirs,” the opinion says.  It adds that in light of the usual factors militating in favor of a multiplier, “the need to ensure that, in the future, lawyers are not dissuaded from taking up claims that will benefit the public interest,” Snyder “erred by failing to apply a multiplier.”

The court, itself, set the amount the firm is to receive, saying: “Because of the district court’s thorough fact-finding, we are able to modify the attorney’s fees award on appeal, conserving judicial resources by avoiding the need to remand for further proceedings.  Pursuant to the foregoing, we hold that the Friedman Firm is entitled to payment for seventy-five percent of its billed hours, at the rates set forth by the district court.  We further hold that the Friedman Firm is entitled to a multiplier of 2.  The Friedman Firm billed 8.699 hours.  Seventy-five percent of this amount, multiplied by the hourly rate of $628 yields an award of $4,097.229.00.  With a multiplier of 2, the Friedman Firm is entitled to $8,194,458.00 pursuant to California Code of Civil Procedure § 1021.5.”