1.5 Multipler Must Be Revisited, But Likely Proper.
After a bench trial, taxpayers of a closely-held corporation obtained invalidation of a decades-long Board of Equalization practice and obtained tax refunds, with the lower court finding that a public benefit had been provided to other closely-held companies so as to trigger fee entitlement under California’s private attorney general statute (Code Civ. Proc., § 1021.5). As a result, the trial court awarded the winning plaintiffs $627,796.74 in attorney’s fees (out of a 1.8 multiplier requested $1,392,577.40), an award using a 1.5 multiplier.
Although there was a partial reversal on a standing issue, the fee award was remanded too for recalculation in Parmar v. Board of Equalization, Case No. B215789 (2d Dist., Div. 7 June 14, 2011) (partially published; fee discussion unpublished). However, the Court of Appeal found that there was public benefit aplenty to justify a fee award.
Presiding Justice Perluss, for a unanimous panel, determined that the lodestar amount had been miscalculated, with the lower court adopting an aggregate lodestar sum from the defense’s fee expert which did not jive with the $450 reasonable hourly rate calculation adopted in fashioning the award. Also, because of the partial reversal, the lower court needed to determine if there was a further need to back out work on successful versus unsuccessful claims. The appellate court found that the 1.5 multiplier was no abuse of discretion, but also remanded that ruling given the overall need for a redetermination of the fee award.
Here was a more than subtle hint to the litigants found in a concluding footnote: “In light of the trial court’s finding the case achieved significant nonpecuniary objectives, a finding unaffected by our reduction of the amount of compensatory damages awarded, the trial court’s intention to award substantial attorney fees in the case would seem clear. Thus, it appears the parties would do well to resolve their dispute over the amount of fees without an additional evidentiary hearing, which would require further expenditure of attorney fees and resources.” (Slip Opn., p. 23 n. 19.)