GONZALO P. CURIEL, District Judge.
Before the Court is Plaintiff's motion for attorneys' fees and costs. (Dkt. No. 63.) A response was filed by Defendant and a reply was filed by Plaintiff. (Dkt. Nos. 65, 66.) After a review of the briefs, supporting documentation, and legal authority, the Court GRANTS in part Plaintiff's motion for attorneys' fees and costs.
On April 24, 2014, Plaintiff Maho Sako ("Plaintiff") filed a complaint against Defendant Wells Fargo Bank ("Defendant"), her former employer, alleging causes of action for wrongful termination of employment in violation of public policy; race and gender discrimination in violation of the Fair Employment and Housing Act ("FEHA"); intentional infliction of emotional distress; violation of California Labor Code section 201 (unpaid wages); violation of California Labor Code section 203 (waiting time penalties); and violation of California Business and Professions Code section 17200 ("UCL"). (Dkt. No. 1-1, Compl.) On August 21, 2015 the Court granted in part and denied in part Defendant's motion for summary judgment. (Dkt. No. 40.) Specifically, the Court granted summary judgment in favor of Defendant on the claims for wrongful termination, gender and sex discrimination under FEHA, and intentional infliction of emotional distress. (
At the pretrial conference, the Court noted that the issue of unconscionabilty, raised for the first time in Plaintiff's opposition, is an issue of law not to be decided by a jury. Therefore, the Court allowed Plaintiff to file a summary judgment motion on the issue of unconscionability. (Dkt. No. 50.) In compliance with the Court's order, on November 16, 2015, Plaintiff filed a motion for partial summary judgment. (Dkt. No. 51.) After the motion was fully briefed, on January 8, 2016, the Court granted in part and denied in part Plaintiff's motion for partial summary judgment. (Dkt. No. 59.) The Court held that certain provisions of Wells Fargo's Code of Ethics ("Code of Ethics") and the 2013 Incentive Compensation Plan ("ICP") were unconscionable. Since the 2013 ICP and Code of Ethics were unenforceable, the Court addressed the two remaining Labor Code causes of action. (
At a settlement conference with the Magistrate Judge, on January 28, 2016, the parties settled. (Dkt. No. 61.) According to the Confidential Settlement Agreement and General Release, Defendant agreed to pay Plaintiff $35,000 to resolve the case and also agreed to pay Plaintiff's "attorneys' fees and costs as ordered by the Court in an amount no less than $11,000." (Dkt. No. 65-1, Kading Decl. ¶ 7; Ex. F.)
In the instant motion for attorneys' fees and costs, Plaintiff seeks attorneys' fees in the amount of $335,657.50 plus a multiplier of 1.5 for an enhancement of $167,828.75 for a total of $503,486.25, and costs of $11,007.20. Defendant opposes arguing that Plaintiff is entitled to attorney's fees in the range of $11,747.00 to $30,209.00, and costs should not exceed $2,836.00.
Plaintiff argues she is entitled to attorneys' fees under Labor Code section 218.5 as the prevailing party on the unpaid wages claim.
Labor Code section 218.5 provides for fee shifting in favor of the party that prevails on a claim for unpaid wages. Cal. Labor Code § 218.5. California Civil Procedure Code section 1021.5 provides,
Cal. Code Civ. Proc. § 1021.5. It appears that Plaintiff raises section 1021.5 as a reason to be awarded all her attorney's fees. (Dkt. No. 63-1 at 11) ("Because Plaintiff meets all the requirements of CCP 1021.5, all attorneys' fees must be awarded.") However, as discussed below, attorney's fees under section 1021.5 are subject to reduction based on degree of success or other reasons.
Where subject matter jurisdiction is based on diversity, the Ninth Circuit applies state law in determining attorney's fees.
Plaintiff seeks attorneys' fees using the lodestar method. Defendant argues that Plaintiff's attorneys' fees should be reduced to reflect his limited success and the limited effort he expended on his only successful claim and proposes three cuts to the attorneys' fee award.
Plaintiff seeks rates of $475.00 per hour for Attorney Alvin Gomez, and $425 per hour for Attorney Stephen Ilg. Defendant does not dispute the reasonableness of the hourly rates.
Plaintiff's counsel assert they spent a total of 714.7 hours on the case with Alvin Gomez spending 638.2 hours and Stephen Ilg spending 76.5 hours. Defendant does not dispute
A trial court may reduce attorney's fees when a plaintiff achieves limited success.
First, Defendant contends that the fees should be reduced by 80% because Plaintiff's counsel only obtained relief on one of the five
Second, Defendant proposes a second cut of 50% where fees should be reduced because Plaintiff obtained relief after "piggybacking" or "cribbing the work" on the
Second, while the legal standard in this case was similar to the
Third, Defendant proposes a third cut where the fees should be reduced an additional 10% because counsel's effort in recovering commissions were unnecessary because Defendant sought to resolve the case with Plaintiff but Plaintiff refused to consider a settlement in the range of the amount of unpaid commissions and would not consider a settlement demand of less than $885,000. (Dkt. No. 65-1, Kading Decl. ¶ 10.) Therefore, any work from preparing for the September 2015 settlement conference, the November 2015 motion for partial summary judgment and the January 2016 settlement conference should be excluded. Defendant argues that the court should not award attorney fees for the period of time after Plaintiff refused to settle.
A trial court cannot reduce an attorney fee award because the opposing party declined an informal settlement offer which exceeded his ultimate recovery.
While the Court rejects Defendant's proposed cuts, the Court conducts its own analysis based on Plaintiff's limited success. Plaintiff's complaint alleged six causes of action for wrongful termination; race and gender discrimination; intentional infliction of emotional distress; unpaid wages; waiting time penalties; and violation of the UCL. (Dkt. No. 1-1, Compl.) After two rounds of summary judgment, Plaintiff prevailed solely on the unpaid wages cause of action and related UCL claim. Eventually, the parties settled for the unpaid wages claim for $35,000.
Defendant argues that the claims for gender and sex discrimination, wrongful termination and emotional distress are distinct and not related to the unpaid wages claim. Defendant contends that Plaintiff's counsel did not pay attention to the commission issue until he prepared his opposition to Defendant's motion for summary judgment, two years after filing the complaint. To support its argument, Defendant notes that the commission issue was not raised until much later in the ligation and note that the word "commission" was hardly raised during several depositions. For example, Defendant argues that of the 769 pages of deposition testimony in eight depositions, the word "commission" appears on only 23 pages. (Dkt. No. 65 at 17.) Defendant also contends that the termination related claims are not "inextricably intertwined" with the commissions claims. Her termination related claims were premised on the theory that Wells Fargo relied on Sako's use of fraudulent preapproval letters as a pretext for the termination and that the real reason was race and gender, complaints that other HMCs solicited customers in their own "book of business" and her complaints that she needed an assistant.
Plaintiff argues that counting the word "commission" in a deposition transcript does not show that commission was not the focus of discovery. She contends that any discovery regarding the termination policies, and nature of the termination relate to the commissions and are intertwined and related.
Plaintiff does not address whether the causes of action for wrongful termination, gender and sex discrimination, and emotional distress claims are "inextricably intertwined" with the termination/commissions issue and appears to concede this issue. The Court agrees with Defendant that the facts and legal issues of wrongful termination, gender and race discrimination and emotional distress are not intertwined, and should be excluded from attorney's fees as these claims are based on different facts and legal theories.
Thus, since Plaintiff had limited success, the Court now calculates the attorney fees based on her degree of success. On August 21, 2015, the Court issued its order granting Defendant's motion for summary judgment where the unrelated claims for wrongful termination, gender and sex discrimination under FEHA and intentional infliction of emotional distress were disposed. Therefore, all attorney work conducted after August 21, 2015 is allowable as it concerned the remaining labor code issues
In her moving papers, Plaintiff seeks a multiplier of 1.5 for an additional sum of $167,828.75 because there is significant benefit to the public and to Home Mortgage Consultants of Wells Fargo throughout California based on the Court's ruling that the ICP was unconscionable. In her reply, she additionally argues a multiplier is appropriate because contingent risk is a valid consideration to enhance a fee award.
California courts permit a court to include a fee enhancement to an attorney fee award based on "(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award." Ketchum, 24 Cal. 4th at 1132. A trial court is not required to include a fee enhancement but has discretion to do so in appropriate cases. Id. at 1138. The party moving for the fee enhancement bears the burden of proof. Id. "Unlike federal law, California law allows for a multiplier of the lodestar to compensate for the risk of contingent representation."
A contingency enhancement "is intended to approximate market-level compensation for such services, which typically includes a premium for the risk of nonpayment or delay in payment of attorney fees."
While Plaintiff's counsel asserts that contingent risk is a valid consideration to enhance a fee award, he provides no justification or reasons for a fee enhancement besides the fact he took the case on a contingency basis.
The Court also disagrees with Mr. Gomez' statement that the case was novel and difficult. If the public interest were a factor in assessing an enhancement, which Mr. Gomez argues, the
Plaintiff seeks costs in the amount of $11,007.20. (Dkt. No. 63-2, Gomez Decl. Ex. 2 at 20-21.) Without providing any legal support, Defendant opposes arguing that for the same reasons as to attorney fees, Plaintiff's counsel is not entitled to recover 100% of his costs, and the Court should award 25% of the claimed deposition costs, or $2,267, because the word "commissions" was barely mentioned in the depositions, which comprise most of the costs claimed. Defendant also urges the Court to decline to award any costs for travel to Florida to take Yvonne Killian's deposition, because the word "commission" was not even mentioned in her deposition. Lastly, Defendant argues that the travel costs for Mr. Ilg to come from San Francisco to San Diego to argue Plaintiff's motion for partial summary judgment was unnecessary especially since Mr. Gomez is based in San Diego and could have argued the motion. Plaintiff replies that Killian's deposition was necessary because her deposition focused on Defendant's policies which triggered her loss of commissions. Plaintiff concedes that the depositions of Kristin Skura and Nancy Ruiz were of "minimal importance." (Dkt. No. 67, Gomez Decl. ¶¶ 11, 12.)
A federal court sitting in diversity applies state substantive law and federal procedural law.
Based on the above, the Court reduces the deposition costs of $9068.40 by 50% to $4534.20. The Court also deducts the witness fee of Nancy Ruiz of $45.00 since Plaintiff agrees her involvement in the case was minimal. The Court declines to deduct the travel costs to Florida to take Killians's deposition as her deposition was relevant to the issue of unconscionability and Plaintiff's termination. The Court also declines to deduct the travel fee for Mr. Ilg to attend the hearing on Plaintiff's motion for partial summary judgment. Thus, the Court awards costs in the amount of
Based on the above, the Court GRANTS in part Plaintiff's motion for attorneys' fees and costs. Specifically, the Court awards Plaintiff
Defendant also challenges Mr. Gomez' decision to associate in Mr. Ilg, from San Francisco, well over two years after the case had been proceeding which resulted in duplication of work and unnecessary fees for attorney travel. In response, Mr. Ilg submitted a declaration stating that he spent more than a dozen hours prior to November 2015 reviewing the documents and transcripts in the case that were not included in the fee motion. (Dkt. No. 66-1, Ilg Decl. ¶ 2.) Defendant fails to provide legal authority that a decision to associate in new counsel during a case is prohibited and not subject to attorneys' fees or costs. After a court's review of the billing records, it does not appear that there was duplication or unnecessary fees incurred. Either Mr. Gomez or Mr. Ilg appeared at depositions, or at the hearings; both were not billing for the same activity.
