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general / Court Rules and Procedures

Courts’ calculation of attorney fees

The objective of this article and self-study test is to familiarize bench officers and attorneys on how courts determine the amount of attorney fees to be awarded in civil cases. Readers will learn about the lodestar method of fee calculation, adjustments to awards, how fee requests should be substantiated, and a court's discretion to deny fees altogether when the fee request is inflated

Lodestar

A court can award attorney fees when authorized by statute, a contract provision, or when otherwise permitted by law. Code Civ. Proc. Section 1033.5(a)(10). Securing an entitlement to an award is not enough, because the court must be satisfied that the fees requested are appropriate and reasonable.

The court will start with the lodestar, which is "the number of hours reasonably expended multiplied by the reasonable hourly rate." PLCM Group, Inc. v. Drexler, 22 Ca1. 4th 1084 (2000) (listing lodestar factors). The lodestar figure may then be adjusted, based on a consideration of various factors, "to fix the fee at the fair market value for the legal services provided." PLCM Group. "[T]he lodestar is the basic fee for comparable legal services in the community." Ketchum v. Moses, 24 Ca1. 4th 1122 (2001).

Lodestar is the presumptive method under all fee-shifting statutes unless a contrary intention appears. Ketchum; see Consumer Privacy Cases, 175 Cal. App. 4th 545 (2009) (lodestar used for attorney fees in class action). Lodestar also applies to fee recovery for in-house counsel. PLCM Group.

Adjustments

The lodestar figure may be adjusted up or down based on factors including (1) the novelty and difficulty of the litigation and 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, and (4) the contingent nature of the fee award. Serrano v. Priest, 20 Cal. 3d 25 (1977). The court also may consider the attorney's success or failure and the fee agreement with the client. PLCM Group.

"The purpose of such adjustment is to fix a fee at the fair market value for the particular action. In effect, the court determines, retrospectively, whether the litigation involved a contingent risk or required extraordinary legal skill justifying augmentation of the unadorned lodestar in order to approximate the fair market rate for such services." Ketchum. Fees based on a percentage of the benefits recovered in the litigation may be appropriate in large class actions when the benefit per class member is relatively low. Chavez v. Netflix, Inc., 162 Cal. App. 4th 43 (2008).

In exercising its discretion in deciding whether to enhance the lodestar, the trial court "must not intertwine considerations relevant to the determination of the lodestar amount with factors relevant to whether the lodestar should be adjusted upward." Northwest Energetic Services, LLC v. California Franchise Tax Bd., 159 Cal. App. 4th 841 (2008).

The U.S. Supreme Court in Hensley v. Eckerhart, 461 U.S. 424 (1983), held that "where the plaintiff achieved only limited success, the district court should award only that amount of fees that is reasonable in relation to the results obtained." While California courts recognize the trial court must consider the degree of success obtained, they also recognize the trial court has discretion, at least in civil rights and private attorney general cases, in deciding whether or not to reduce the lodestar. See Harman v. City and County of San Francisco, 158 Cal. App. 4th 407 (2007) ("a slight monetary recovery will not control assessment of the appropriate amount of attorney fees where a constitutional right is vindicated or a significant public benefit conferred"); RiverWatch v. County of San Diego Dept. of Environmental Health, 175 Cal. App. 4th 768 (2009) (trial court did not abuse discretion by not reducing private attorney general fees under Code of Civ. Proc. Section 1021.5 for prevailing party's lack of success on numerous issues).

Fee Substantiation

The general rule is that the party seeking fees must present evidence of the time spent and the hourly rate of each attorney. The party seeking attorney fees thus has the "burden of showing that the fees incurred were allowable, were reasonably necessary to the conduct of the litigation, and were reasonable in amount." Levy v. Toyota Motor Sales, U.S.A., Inc., 4 Cal. App. 4th 807 (1992); see El Escorial Owners' Assn. v. DLC Plastering, Inc., 154 Cal. App. 4th 1337 (2007) (prevailing parties "must prove the hours they sought were reasonable and necessary"). "The evidence should allow the court to consider whether the case was overstaffed, how much time the attorneys spent on particular claims, and whether the hours were reasonably expended." Christian Research Institute v. Alnor, 165 Cal. App. 4th 1315 (2008).

An award of attorney fees may be based on declarations of counsel, made under penalty of perjury, without production of detailed time records. City of Colton v. Singletary, 206 Cal. App. 4th 751 (2012); Raining Data Corp. v. Barrenechea, 175 Cal. App. 4th 1363 (2009). Detailed and contemporaneous time records are not required and, "[t]he court may award fees based on time estimates for attorneys who do not keep time records." Chavez.

Contemporaneous billing records, however, "would facilitate accurate calculation of the lodestar and minimize possible inaccuracies in reconstructing time spent on a matter months or even years after the fact." PLCM Group; see Best v. California Apprenticeship Council, 193 Cal. App. 3d 1448 (1987) (preferred practice is contemporaneous time record presentation, but not an absolute requirement).

Nonetheless, reconstruction of time records may be permissible to support a fee motion if there is adequate information to reach reasonable estimates of the work described. Cates v. Chiang, 213 Cal. App. 4th 791 (2013). Although no specific level of detail in the supporting evidence is required, declarations setting forth block billing and general descriptions of work performed might be deemed insufficient by the court. Maughan v. Google Technology, Inc., 143 Cal. App. 4th 1242 (2007); see Christian Research Institute (vague billing entries and block billing held insufficient to substantiate award).

The trial court should give credence to verified billings statements submitted by attorneys. Bender v. County of Los Angeles, 217 Cal. App. 4th 968 (2013). But, the court has discretion to ignore "contradictory and multiple billing" records as lacking credibility. Ellis v. Toshiba America Information Systems, Inc., 218 Cal. App. 4th 853 (2013). From such billing records, the trial court may conclude the party seeking fees concealed or destroyed evidence. Ellis. The Court of Appeal also stated that such a credibility determination is "uniquely the province of the trial court."

Expert testimony is not required, but is a good idea in complex cases or certain kinds of proceedings. PLCM Group; see Donahue v. Donahue, 182 Cal. App. 4th 259 (2010) (testimony or declarations of fee experts "may assist the trial court" in determining the appropriate amount of attorney fees).

The reasonableness of an attorney's hourly rate may be substantiated by counsel's own declaration that the rate was in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation. Davis v. City of San Diego, 106 Cal. App. 4th 893 (2003). Declarations from experts in the area of court-awarded attorney fees also may be used to establish the reasonableness of the attorney's hourly rate. Children's Hospital & Medical Center v. Bonta, 97 Cal. App. 4th 740 (2002).

A trial court has discretion to request additional substantiation of a fee request. For example, in Bender v. County of Los Angeles, the trial court initially found fault with both the plaintiff's application for fees and defendants' opposition. After preparing a tabulation to determine a lodestar and suggesting a multiplier, the court requested that each side submit new calculations of recoverable attorney fees. In response, "[b]oth parties submitted extensive supplemental briefing and documentation on the attorney fees. Defendants submitted a chronological table organizing plaintiff's billing entries and showing defendants' objections and proposed deductions for entries they claimed were vague, duplicative, and for travel time that should not be compensated."

Discretion to Deny Recovery When Request Is Inflated

The common response by a trial court to an inflated fee request is to reduce it. See, e.g., Christian Research Institute. But, the court also has discretion to deny attorney fees altogether in such a situation. E.g., Chavez v. City of Los Angeles, 47 Cal. 4th 970 (2010) (grossly inflated attorney fee request justified denying fees altogether).

In Serrano v. Unruh, 32 Cal. 3d 621, 635 (1982) (Serrano IV), the California Supreme Court stated, "A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether." The court reasoned that the ability to seek attorney fees "does not license prevailing parties to force their opponents to a Hobson's choice of acceding to exorbitant fee demands or incurring further expense by voicing legitimate objections." As the court further explained, "[i]f ... the Court were required to award a reasonable fee when an outrageously unreasonable one has been asked for, claimants would be encouraged to make unreasonable demands, knowing that the only unfavorable consequence of such misconduct would be reduction of their fee to what they should have asked in the first place. To discourage such greed, a severer reaction is needful."

Serrano IV's special circumstance authorizing the total denial of an attorney fee request due to an inflated claim has been cited with approval in cases applying various California attorney fees provisions. See Chavez v. City of Los Angeles (Gov. Code Section 12965(b), California Fair Employment and Housing Act attorney fee claim); Ketchum (Code of Civ. Proc. Section 425.16(c)(1), anti-SLAPP attorney fee provision); Meister v. Regents of University of California, 67 Cal. App. 4th 437 (1998) (Civ. Code Section 1798.48(b), attorney fee provision relating to cause of action against a public agency for public disclosure of personal information); People ex rel. Cooper v. Mitchell Brothers' Santa Ana Theater, 165 Cal. App. 3d 378 (1995) (Civ. Code Section 3496 attorney fee provision due to improper government action relating to pornographic materials).

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