Also Sustains Awarding $176,900 To Same Counsel’s Staff For Work Effort, And Remands For Consideration Of Costs Request
Appellate Court Finds that Paralegals Do Not Necessarily Have to Meet California B&P Educational/Certification Requirements in Order to Obtain Compensation.
This next case, Ellis v. Toshiba America Information System, Inc. (Sklar), Case Nos. B220286/B227078 (2d Dist., Div. 1 Aug. 7, 2013) (published), is a wild one authored by Justice Johnson on behalf of a 3-0 panel.
Briefly summarized (if that can be done on this one), one class counsel (Ms. Sklar) was hit with monetary sanctions for failure to allow a forensic inspection of her computers (mainly to obtain her billing records) given that she was claiming $24.7 million in fees for prosecuting the class action, later reduced to $12 million even though defendant Toshiba only agreed in the settlement agreement to pay other class counsel’s fees of $1.125 million and indicated it would contest Ms. Sklar’s requests. Ms. Sklar’s office was hit with discovery sanctions of $165,000, which order was affirmed on appeal. The lower court also denied in entirety Ms. Sklar’s fee request, except it did award $176,900 for work effort by her law firm staff. (By the way, the other class counsel got an award of $1,050,000 in fees and $75,000 in costs in line with the Toshiba settlement agreement “clear-sailing” provision with respect to these attorneys’ fees.) The lower court did not rule on Ms. Sklar’s request for $114,900 in costs, which was contained in a class notice.
Well, all of this prompted an appeal by Ms. Sklar on the sanctions/fee/costs awards, as well as a Toshiba cross-appeal contesting the $176,900 award to Ms. Skalr’s law office staff.
The appellate court affirmed the sanctions and fee denial awards with respect to Ms. Sklar. In the fee area, it especially credited that her credibility had been tarnished in not producing documents/reducing her fee request in half and that the inflated nature of her requests could be weighed greatly in an adverse way by the trial judge, as it was.
Because the lower court failed to rule on the $114,900 costs request, that required a remand in order to consider it.
Finally, Toshiba challenged the law firm staff award on the basis that many of the “paralegals”/legal assistants did not meet the Business & Professions Code educational/certification requirements, so compensating them was not allowed. The appellate court rejected this argument, finding that no California state authority bound the trial judge to require these type of requirements for compensation, finding two unpublished federal decisions to be unpersuasive in this area. It did, however, remand for some small arithmetic error corrections in the law firm staff work award.