First District, Division Two Sustains Lower Court’s Application of 1.5 Multiplier.
Labor Code section 218.5 authorizes a mandatory award of attorney’s fees to a prevailing party in any action for nonpayment of wages if any party requests fees and costs upon initiation of the action. Labor Code section 1194(a) mandates an award of reasonable fees and costs to an employee recovering unpaid minimum wages or overtime compensation. These two statutes were the ones that led to a substantial fee recovery by a prevailing single plaintiff, with the Court of Appeal sustaining the award on appeal.
In Ahmed v. Good Nite Management, Inc., Case No. A120400 (1st Dist., Div. 2 Mar. 19, 2009) (unpublished), plaintiff won a bench trial by which he was awarded $293,999.55 in compensation for overtime and missed meal periods. The defendant hotel claimed he was an exempt employee, but that defense did not prevail. Plaintiff was able to take advantage of the four-year limitations reach-back period under Business and Professions Code section 17200. Plaintiff was also awarded attorney’s fees under sections 218.5 and 1194(a) in the amount of $236,760. Hotel appealed, but did not overturn either the merits or fee determinations.
Hotel did not challenge the legal entitlement bases for the award, just the amount of the award. That left the defense with a high hurdle to overcome—the abuse of discretion standard. (Wakefield v. Bohlin, 145 Cal.App.4th 963, 978 (2006).)
In this particular case, plaintiff requested fees under the two statutes in an amount totaling $250,537.50, based on a requested 1.5 multiplier. The lower court found that the lodestar amount should be $157,840, determining there was little duplication but excluding some hours on a dismissed retaliation claim and reducing some hours by one law firm involved in the case. The trial court did grant the 1.5 multiplier based primarily on the contingency fee risks in litigating the action. Although agreeing that the case was neither novel or complex, the contingency nature of the case justified the multiplier, with the lower court demonstrating awareness of the adjustment factors set forth in Ketchum v. Moses, 24 Cal.4th 1122, 1132-1133 (2001) and Horsford v. Bd. of Trustees of Cal. State Univ., 132 Cal.App.4th 359, 394-395 (2005).
The appellate court found that the lower court properly considered the lodestar adjustment factors. Although finding the matter noncomplex in nature, the contingency risk factor certainly could be weighted favorably as far as adjusting the lodestar. The lower court did not err in its weighting of the contingency fee agreement with plaintiff or the deferred work claimed by plaintiff’s counsel. No abuse of discretion was found based on a detailed record created by the lower court in proceedings below.