Trial Court Had Discretion to Reduce Lodestar, Parsing Out Unsuccessful Claim Fee Work.
This next case describes the discretion allowed trial courts in calculating the lodestar as well as a nice job by the defense in mitigating fee exposure by providing the trial court with a basis for awarding fees only on successful claim work.
In Lorenzen v. Vermont Restaurant, Case No. B219625 (2d Dist., Div. 5 Apr. 25, 2011) (unpublished), plaintiffs prevailed on some, but not all, FEHA claims against defendant former employers. Plaintiffs only garnered $1,000 in damages on their harassment claims, but sought to recover fees of $566,510 (lodestar of $283,255 augmented by a 2 multiplier). Defendants filed papers in opposition to the fee request showing that 75-80% of plaintiffs’ time was expended on unsuccessful claims, further arguing that plaintiffs should only be awarded $8,693.50 using a .15 negative multiplier. After two hearings, the trial court award plaintiffs $60,400 in fees, finding the reasonable fee for all work was $181,200 but that only one-third of that amount should be awarded as the lodestar given the time spent on unsuccessful claims (as shown by the pleadings and trial proof). Plaintiffs appealed, although unsuccessfully as you shall see.
No one disputed that the lodestar method was the appropriate yardstick under the FEHA fee-shifting statute.
Plaintiffs argued that the trial court did not provide supporting analysis for its lodestar conclusion. This argument was rejected because no statement of decision is required when ruling on a fee request in California state courts. (Gorman v. Tassajara Development Corp., 178 Cal.App.4th 44, 67 (2009).)
The trial court properly had discretion to reduce plaintiffs’ inflated fee request given that their claim was based on 78% of their fees being expended on unsuccessful claims versus the defense position that only 20-25% of plaintiffs’ fee time was compensable. Beyond that, plaintiffs’ failure to provide an adequate record–providing no billing statements, no trial transcripts, or no post-trial motion paperwork–was damning as far as proving any error by the lower court.
The appellate court also determined that the lower court did not err in using both pleadings and trial proof to demonstrate whether unsuccessful claim work was or was not related to time spent on the successful claims. (Wysinger v. Auto. Club of So. Cal., 157 Cal.App.4th 413, 419, 431 (2007); Odima v. Westin Tucson Hotel, 53 F.3d 1484, 1489-1491, 1499 (9th Cir. 1995).)
Finally, the lower court was justified in reducing fees due to the modest damages award obtained by plaintiffs under the rubric of Chavez v. City of Los Angeles, 47 Cal.4th 970, 991 (2010) [one of our Leading Cases–right hand side of our home page].