OTIS D. WRIGHT, II, District Judge.
In 2010, Plaintiffs' attorneys (hereafter "the Attorneys") filed a Motion for Attorneys' Fees requesting $1,025,000. (ECF No. 273.)
The instant Motions arise from the settlement of a 2007 civil rights lawsuit in which twenty-one Plaintiffs sued the City of Maywood, its police department, and government officials for police misconduct and constitutional rights violations. (ECF No. 1.) In 2008, the Court granted Defendants' Motion to Sever, after which Plaintiffs filed nine separate lawsuits. (ECF No. 43.) Over the next two years, in response to various motions, the Court dismissed numerous claims and Defendants. (ECF Nos. 75, 84, 103, 124, 142, 149.) In October 2010, the remaining seventeen Plaintiffs settled and, through their respective counsel, signed a Stipulation for Settlement. (ECF No. 268.) The Court retained jurisdiction to enforce the Settlement. (ECF No. 269.) Pursuant to the Settlement, the Attorneys may seek attorneys' fees subject to Court approval. (Mann Decl. Ex. A.) The Settlement provides, in relevant part:
In November 2010, the Attorneys filed a Motion for Attorneys' Fees requesting $1,025,000. (ECF No. 273.) They provided a chart that purportedly showed the hours worked and prevailing market rate for each attorney and paralegal.
(Mot. 5.)
Defendants contended that the Court should reduce the hourly rates and that the Attorneys did not provide evidence of prevailing market rates. (Opp'n 9-11.) Defendants further contended that the Court should eliminate: unreasonably expended and excessive hours, tasks attorneys should have delegated to secretaries, miscellaneous improper billing, vague entries, and paralegal billing. (Id. at 14-20.)
Defendants noted that around the same time that attorney Ellen Hammill Ellison requested an hourly rate of $300 in a state court filing, she requested $550 in the Motion. (Id. at 13 Ex. D.) Defendants questioned on what legitimate basis Ellison could file a declaration with the Los Angeles Superior Court in June 2010 stating that she believed her rate was $300, and then claim to a federal court in November 2010 that she believed her rate was $550.
Using the hourly rate the Attorneys requested, Defense fee expert James P. Schratz analyzed billing records and calculated a significantly higher lodestar— $1,935,626.50 compared to the Attorneys' $1,455,399. (Schratz Decl.) The day after Defendants filed their Opposition, attorney Donald W. Cook submitted a declaration correcting the chart. (Cook Decl.) Only after reading Defendants' Opposition did Cook realize that he used a decimal instead of a comma when inputting Anderson-Barker's total. (Id.) He wrote $480.755 instead of $480,755. (Id.) Cook's error resulted in an almost-half a million dollar miscalculation. (Id.)
The Court reduced hours across-the-board by 35 percent to account for: inappropriate and ambiguous billing format, billing entries unrelated to the Maywood cases, impossible entries, improper entries, clerical entries, and billing for travel time. (ECF No. 315.) The Court reduced hours by an additional 20 percent to account for numerous problems with the billing records. (Id.)
The Court reduced all attorney rates by 25 percent and adopted the lower paralegal rates provided in the Declaration of Barrett Litt, the Attorneys' fee expert. (Id.) The Court concluded that the Attorneys failed to meet their burden and establish that their requested fees reflected the prevailing market rates in the community. (Id.) This conclusion was based on: (1) the Attorneys' exclusive reliance on personal affidavits and Litt's Declaration; (2) the failure "to demonstrate the quality of representation that would be expected from attorneys charging such high rates;" (3) attorneys receiving rates months prior to filing the Motion that were lower than the rates requested in the Motion; and (4) reliance on factually dissimilar cases to support the requested rates. (Id.)
The Court did not address whether the Attorneys should receive a state-law multiplier and declined to award $25,000 for preparing the Motion "given the myriad of problems in [the Attorneys'] presentation of their Motion." (Id.) Ultimately, the Court awarded $473,138.24. (Id.)
The Attorneys appealed to the Ninth Circuit Court of Appeals. (ECF No. 318.) In November 2013, the Ninth Circuit vacated the fee award and remanded for re-computation. (ECF No. 335.) The Ninth Circuit determined that the District Court: erroneously applied across-the-board cuts to the lodestar, failed to find a reasonable hourly rate on which to compute the lodestar, declined to award a state-law multiplier, and declined to award fees for work performed on the Motion. Gonzalez v. City of Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013).
Per Ninth Circuit instructions, the District Court must: (1) compute the fee award using a reasonable hourly rate based on the "prevailing market rates in the relevant community;" (2) provide a "clear and concise explanation" if the Court reduces the number of hours or lodestar by more than 10 percent; (3) "analyze and explain whether [the Attorneys] should receive a state-law multiplier;" and (4) "employ the lodestar method" for determining a reasonable fee for the Attorneys' work on the Motion. Id. at 1209-1211.
In May 2014, the Attorneys submitted a revised Motion for Attorneys' Fees. (ECF No. 346.) They conclude that they have been awarded $473,138.24 and only $551,861.76 is currently in dispute. (Mot. 1.)
They also submitted "additional declarations which address the issues raised by the Ninth Circuit." (ECF No. 336.) Defendants argued that the Attorneys should not be given another opportunity to submit evidence in support of the 2010 Motion. (ECF No. 338.) The Court granted leave to submit additional declarations on the grounds that "the Court would be aided by the parties rebriefing the attorneys' fees issue, and by presentation of any additional relevant or clarifying evidence." (ECF No. 345.)
The Attorneys re-submitted billing records that, according to the Attorneys, correct the entries the district court took issue with in 2011. (Mot. 4.) Examples of such entries include a paralegal billing sixty hours in one day, the same paralegal billing 22.95 hours in a day on numerous occasions, and another paralegal billing 22.95 hours in a day. (Order 21-22.) After filing the 2010 Motion, reading the Court's Order, appealing to the Ninth Circuit, and reading the Ninth Circuit's Opinion, the Attorneys attempted to correct obviously inaccurate billing.
In the re-submitted billing records, attorney time records are grouped by case rather than individual attorney; time the Court thought unnecessary, such as Maywood clinic time and vehicle towing time, was eliminated; time expended on other matters or involving persons the Court thought irrelevant was explained as reasonably necessary to litigate the cases that settled; and the errors in billing records the Court noted were corrected or explained. (Mot. 4)
The Attorneys provided a chart that purportedly shows the lodestar "[a]fter deducting for time identified above, and correcting for certain errors." (Id. at 6.)
(Id. at 7-8.)
Defendants contend that there is currently no fee award because the Ninth Circuit vacated the 2011 award with instructions for re-computation. (Opp'n 2.) However, Defendants reason that the Attorneys may only obtain $551,861.76 because that is all they requested in the 2014 Motion. (Id.)
Similar to their 2010 Opposition, Defendants contend that the Court should reduce the hourly rates and that the Attorneys did not provide evidence of prevailing market rates. (Id. at 5-8.) They recommend the Court eliminate: vague entries, unreasonably expended hours, non-settlement case hours, irrelevant claims, and miscellaneous improper billing. (Id. at 10-18.) According to Defendants, the declarations do not support the Motion and the Attorneys fail to provide evidence of small law firm market rates. (Id. at 10-13.) They also note that except Victoria Don, the Attorneys did not re-submit the time and fees of paralegals. (Id. at 15.) Therefore, they contend, "the same deficiencies that the auditor and the District Court found" apply to the time and fees of the paralegals. (Id.)
The Attorneys argue that the Court should strike the Declaration of James P. Schratz because it contains legal argument, fails to provide a clear and concise explanation of reductions to the number of hours or lodestar by more than 10 percent, and fails to use required methodology to determine rates. (Mot. 2-5.)
Defendants contend that the Court should deny the Motion because the arguments against the Declaration do not fall under the enumerated circumstances in which courts may grant a Motion to Strike. (Opp'n 3-4.)
By enacting 42 U.S.C. § 1988, Congress "recognized that private enforcement of civil rights legislation relies on the availability of fee awards." Moreno v. City of Sacramento, 534 F.3d 1106, 1111 (9th Cir. 2008). To minimize the risk of overcompensation, the district court should award "only the fee that it deems reasonable." Id. (citing Hensley v. Eckhart, 461 U.S. 424, 433 (1983)). In determining what fee is reasonable, "the district court must strike a balance between granting sufficient fees to attract qualified counsel to civil rights cases, and avoiding a windfall to counsel." Moreno, 534 F.3d at 1111 (citing City of Riverside v. Rivera, 477 U.S. 561, 579-80 (1986); Blum v. Stenson, 465 U.S. 886, 897 (1984)).
The court must compute the "lodestar" by multiplying the hours reasonably expended on litigation by a reasonable hourly rate. United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 406 (9th Cir. 1990) (citing Hensley, 461 U.S. at 433; Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210 (9th Cir. 1986)). A reasonable hourly rate "compensate[s] counsel at the prevailing rate in the community for similar work; no more, no less." Moreno, 534 F.3d at 1111.
Kerr factors are used in the preliminary determination of the lodestar. Id. The factors are: (1) the time and labor required; (2) the novelty and difficulty of the questions involved; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the `undesirability' of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975). These factors are "intended to provide district courts with guidance" when adjusting the lodestar and "were never intended to be exhaustive or exclusive." Chalmers, 796 F.2d at 1211.
The court may reduce the number of hours or lodestar by more than 10 percent but must provide a clear and concise explanation for the percentage(s) selected. See Gates v. Deukmejian, 987 F.2d 1392, 1398 (9th Cir. 1992); Moreno, 534 F.3d at 1112. The court may adjust the award upward or downward based on additional factors that bear upon reasonableness. Chalmers, 796 F.2d at 1212; Kerr, 526 F.2d at 70; Hensley, 461 U.S. at 434. However, "the Kerr factors are largely subsumed within the initial calculation of reasonable hours expended at a reasonable hourly rate, rather than the subsequent determination of whether to adjust the fee upward or downward." Hensley, 461 U.S. at 434 n.9.
Fee applicants bear the burden of proof and must "submit evidence supporting the hours worked and rates claimed." Id. at 433.
The court may strike "from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). The decision whether to grant a motion to strike is made at the court's discretion. Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010.) Rule 12(f) motions to strike are generally disfavored. Bureerong v. Uvawas, 922 F.Supp. 1450, 1478 (C.D. Cal. 1996); see also Stanbury Law Firm v. I.R.S., 221 F.3d 1059, 1063 (8th Cir. 2000).
Without citing any supporting authority, the Attorneys conclude that they have been awarded $473,138.24 and only $551,861.76 is currently in dispute. (Mot. 1.) The Ninth Circuit vacated the Court's 2011 fee award and remanded with instructions for re-computation. Therefore, there is no fee award. The Court rejects Defendants' contention that the Attorneys' may only obtain $551,861.76 because that is all they requested in the 2014 Motion. Since 2010, the Attorneys have argued that they are entitled to the $1,025,000 maximum allowed under the Settlement. The Court will re-compute the entire fee award and determine whether $1,025,000 is reasonable.
"The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley, 461 U.S. at 433. This method of calculation provides the court "an objective basis on which to make an initial estimate of the value of a lawyer's services." Id.
Attorneys requesting a fee award "should make a good faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated to exclude such hours from his fee submission." Id. at 434. "Hours that are not properly billed to one's client also are not properly billed to one's adversary pursuant to statutory authority." Id. (original emphasis) (citing Copeland v. Marhsall, 641 F.2d 880, 891 (1980)). The district court "should exclude from this initial fee calculation hours that were not `reasonably expended.'" Id. at 433-434.
"[W]hen faced with a massive fee application the district court has the authority to make across-the-board percentage cuts in either the number of hours claimed or in the final lodestar figure `as a practical means of trimming the fat from a fee application.'" Gates, 987 F.2d at 1399 (quoting New York State Ass'n for Retarded Children v. Carey, 711 F.2d 1136, 1146 (2d Cir. 1983)). "Despite the `concise but clear' requirement, in cases where a voluminous fee application is filed in exercising its billing judgment the district court is not required to set forth an hour-by-hour analysis of the fee request." Gates, 987 F.2d at 1399 (citing Jacobs v. Mancuso, 825 F.2d 559, 562 (1st Cir. 1987); In re "Agent Orange" Product Liability Litigation, 818 F.2d 226, 237-238 (2d Cir. 1987) ("no item-by-item accounting of the hours disallowed is necessary or desirable"); Ohio-Sealy Mattress Mfg. Co. v. Sealy Inc., 776 F.2d 646, 657-58 (7th Cir. 1985)).
In 2010, the Attorneys submitted billing records grouped by attorney. This format made it impossible for the Court to reasonably determine whether excessive, redundant, or otherwise unnecessary hours were billed. The Attorneys have re-submitted billing records grouped by case rather than attorney. They provided the following description of their billing practice:
Mot. 4. (citing Cook Decl. ¶¶ (A)-(B), 14-27, 34) (emphasis added).
The American Bar Association and California Bar agree that billing for work performed on multiple matters at the same time presents serious ethical considerations. The ABA Committee on Ethics and Professional Responsibility explained that:
ABA Comm. On Ethics and Prof'l Responsibility, Formal Op. 93-379 (1993) (citing Model Rule 1.5). According to the State Bar of California Standing Committee on Professional Responsibility and Conduct:
Cal. State Bar Standing Comm. On Prof'l Responsibility and Conduct, Formal Op. 1996-147 (1996) (emphasis added).
When litigating the Maywood cases, the Attorneys performed work for one case and allocated time "across all the cases." That is, they—and the paralegals whose work and billing they supervised—performed once and billed at least eight times.
The Attorneys cite no authority that permits this billing practice because it is expressly contemplated and prohibited by the ABA and Model Rule of Professional Conduct. Just as "[a] lawyer who spends four hours of time on behalf of three clients has not earned twelve billable hours," a lawyer who conducts one deposition has not earned compensation for eight.
The California Bar requires that attorneys who "bill a full hourly rate to more than one client for the same time period, or bill one client a multiple of that hourly fee for the same time period [. . .] disclose[] this billing practice at the outset of the relationship; obtain[] client consent; and [make] sure that the fee charged to each client is not `unconscionable.'" There is no evidence that the Attorneys complied with any of these requirements.
The Court recognizes that generally it "should defer to the winning lawyer's professional judgment as to how much time he was required to spend on the case." Moreno, 534 F.3d at 1112. However, in the instant action, the Attorneys have demonstrated that deference to their professional judgment would be contrary to the ABA, Model Rules, and California Bar.
Because the Attorneys performed once and billed eight times in many circumstances, the Court
The Court acknowledges that its reduction is significant, but the Attorneys have the burden and proof and failed to submit evidence supporting the hours worked. In fact, the evidence they submitted impugned their requested hours and overall billing judgment. The Court does not apply any additional reductions to the hours and finds that the 7/8 reduction adequately accounts for any other billing issues that may have carried over from the 2010 Motion to 2014.
A reasonable hourly rate is the "rate prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation." Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008). "[T]he burden is on the fee applicant to produce satisfactory evidence—in addition to the attorneys' own affidavits—that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation; a rate determined in this manner will be normally deemed to be reasonable, and is referred to, for convenience, as the prevailing market rate." Sierra Club v. EPA, 625 F.Supp.2d 863, 866 (N.D. Cal. 2005). "Once the fee applicant has proffered such evidence, the opposing party must produce its own affidavits or other evidence to rebut the proposed rate." Cortes v. Metro Life Ins. Co., 308 F.Supp.2d 1125, 1229 (C.D. Cal. 2005) (citing United Steelworkers of Am., 896 F.2d at 407).
The Attorneys filed nine declarations in support of the reasonableness of their requested rates. (ECF No. 347.) While these declarations do not contain systematically obtained information, they help guide the Court in selecting an hourly rate.
Ellison requested $300 per hour around the filing of the 2010 Motion from a state court, and Koerner previously requested $490 per hour from this Court in this action. The Attorneys fail to explain how, within months, Ellison and Koerner's rates each increase to $550. Therefore, the Court
In the 2014 Motion, the Attorneys did not provide additional evidence for the rates of paralegals. As a result, the Court must rely on Litt's Declaration submitted in support of the 2010 Motion. Litt is a licensed practitioner and has extensive experience and familiarity with civil rights litigation. He is also familiar with the rates of junior and experienced paralegals. The Court finds that the Attorneys have produced satisfactory evidence for the requested rates and no reductions are necessary. Therefore, the Court
Applying the reductions to hours and rates discussed above results in the following calculations:
The Court applies the 7/8 reduction to the hours without the Attorneys' proposed 10 percent reduction.
The Attorneys argue that if the Court's lodestar calculation is less than the $1,025,000 maximum allowed under the Settlement, they are entitled to a "multiplier of at least 2.0" under California law. (Mot. 14.)
Risk of loss or contingency-fee multipliers are not available under federal fee-shifting statutes, but California law allows prevailing plaintiffs to recover an enhancement to the fee award as compensation for the risk of loss. Mangold v. Cal. Pub. Util. Comm'n, 67 F.3d 1470, 1478 (9th Cir. 1995).
The Attorneys cite several cases in which courts have awarded a 2.0 multiplier. (Mot. 16.) However, they provide no factual information. The Court cannot compare these cases to the instant action and determine whether the latter is sufficiently similar and warrants a 2.0 multiplier. The Attorneys argue that the Ninth Circuit "has previously found that a 2.0 multiplier reflected the expected market return for contingent fee cases." Again, they provide no factual information. The mere fact that the Ninth Circuit has upheld a 2.0 multiplier in some cases does not persuade the Court that one should be awarded in this case. In fact, one case the Attorneys cite does just the opposite.
In Fadhl v. City and County of San Francisco, 859 F.2d 649, 650 (9th Cir. 1988):
The plaintiff brought a sexual harassment suit in San Francisco and the district court "found the fact that Fadhl approached 35 lawyers before she found one who would represent her was strong support for the proposition that in the absence of risk enhancement, she would have faced substantial difficulties in retaining an attorney." Id. at 651. There is no evidence that any Plaintiffs in the instant action encountered similar difficulty obtaining legal representation.
The Court finds that
Per Ninth Circuit instructions, the Court must "employ the lodestar method" for determining a reasonable fee for the Attorneys' work on the Motion. Gonzalez, 729 F.3d at 1209-1211. The Court must multiply the number of hours reasonably expended on the litigation by the prevailing market rate.
The Attorneys provided the following chart that purportedly shows the hours worked and prevailing rate for each attorney who worked on the Motion:
(Cook Decl. ¶ 36.)
The hours are based on the billing records submitted in 2010. (Id. ¶ 37.) Despite knowing that they would request compensation for work on the 2010 Motion, the Attorneys failed to distinguish Motion and non-Motion related tasks. The Court will not sift through billing entries to decipher whether tasks relate to the Motion.
Therefore, because the billing records do not distinguish Motion and non-related tasks, the Court can only conclude that the same deficiencies that permeated the Attorneys' billing during litigation and settlement also affect the Motion. The Court
For the reasons discussed above, the Court
Applying the reductions and rates discussed above results in the following:
In sum, the Court
The Attorneys argue that the Court should strike portions of the Declaration of Defense fee expert James P. Schratz because they contain legal argument and fail to comply with the Ninth Circuit mandate.
The Court is not persuaded that Rule 12(f) applies. Rule 12(f) states that a court "may strike from a pleading an insufficient defense or any redundant, immaterial, or scandalous matter." Fed. R. Civ. P. 12(f). However, the Attorneys make no attempt to explain how the disputed portions of the Declaration constitute "an insufficient defense" or "redundant, immaterial, or scandalous matter."
The Court is also not persuaded by the Attorneys' mischaracterizations. They argue that portions of the Declaration contain "legal argument." These portions summarize the procedural history of the Maywood cases and explain the bases for Schratz's proposed fee reductions. The Court considers this relevant background and foundational information. The Attorneys next argue that Schratz must provide a clear and concise explanation of reductions to the number of hours or lodestar by more than 10 percent and use specific methodology to determine rates. Nowhere in Gonzalez does the Ninth Circuit state that its mandate applies to experts. Expert opinion is one of many sources to which the Court may look for guidance in determining a reasonable fee award. Only the Court is bound by the Ninth Circuit's decision.
Therefore, the Court
For the reasons discussed above, the Court