Court of Appeal Also Refuses to Create a New Rule Requiring A Statement of Decision in an Attorney’s Fee Proceeding.
Plaintiffs in a sexual harassment contingency case against Ralphs Grocery won substantial compensatory and punitive damage awards through years of contentious litigation. After over ten years of litigation, plaintiffs moved for an award of attorney’s fees based on a lodestar on merits work of $6,945,916 and on a lodestar on “fees on fees” work of $373,244.50, to be enhanced by a requested 2.0 multiplier on the merits lodestar component and a requested 1.5 multiplier on the fees on fees lodestar component. Plaintiffs also asked that 2006 billing rates be used to calculate the fee award. Ralphs argued that the hourly rates were unreasonable, the requested multipliers should be denied, and the lodestar amount reduced by $2,722,628.53.
The trial court awarded the 2006 fee rates requested by Plaintiffs even though the rates were not justified as being reasonable for the San Diego market. The trial court calculated the lodestar amount at $6,759,249.77 for merits work and $279,933.38 for fees work, but declined to award any enhancements to the lodestar amounts. The trial court went through the Ketchum v. Moses, 24 Cal.4th 1122 (2001) multiplier factors, finding no enhancement was justified. However, the lower court did award interest on the fees award from the date of the prior judgment. The trial court declined plaintiffs’ request to issue a statement of decision. Plaintiffs later obtained a $444,248.77 supplemental fee award. Ralphs paid all the awarded fees and costs, and plaintiffs appealed the failure to award a multiplier and failure to issue a statement of decision.
In Gober v. Ralphs Grocery Co. (Gober III), Case No. D050962 (4th Dist., Div. 1 Sept. 30, 2008) (unpublished), the Fourth District, Division 1 initially observed that plaintiffs likely waived their challenge to the multiplier by accepting payment from Ralphs. However, the appellate panel proceeded to consider the merits anyway.
Plaintiffs argued that the trial court erred because the use of multipliers for contingent risk is mandated. Appellate response: “Simply put, Plaintiffs are wrong,” citing Ketchum, supra, 24 Cal.4th at 1138; Nichols v. City of Taft, 155 Cal.App.4th 1233, 1240-1241 (2007); Horsford v. Bd. of Trustees of Cal. State Univ., 132 Cal.App.4th 359, 395 (2005); Greene v. Dillingham Constr., N.A., Inc., 101 Cal.App.4th 418, 426-427 (2002).
The Court of Appeal also found that the trial court did consider the contingent risk when it set the lodestar amounts. That meant the question boiled down to whether the lower court abused its discretion in determining that the lodestar amounts adequately compensated counsel for contingent risk. The appellate panel noted that any risk had effectively evaporated in August 2000, when the California Supreme Court denied review of the substantial awards, after which Plaintiffs only had limited success for future activity (after four of them declined consent to a punitive damage award equal to 15 times their compensatory recovery in July 2002). The multiplier was properly refused based on other actions of the lower court—awarding requested higher billing rates that were not justified by proof and awarding interest on the fees award from the date of judgment.
Plaintiffs also requested the appellate panel to “require” trial courts to issue written statements of decision when making attorney’s fees awards. The Court of Appeal refused this invitation, citing cases such as Ketchum, supra, 24 Cal.4th at 1140 for the proposition that a statement of decision is not required in the fee hearing context. “Since a statement of decision was not required, the trial court did not err by failing to issue one and we decline to create a new rule of law requiring a statement of decision when deciding attorney fee motions.” (Slip Opn., at p. 10.)