Miller v. Vicorp Restaurants, Inc.

Full title: GEORGE MILLER, JR., Plaintiff, v. VICORP RESTAURANTS, INC., and DOES 1…

Court: United States District Court, N.D. California, San Jose Division

Date published: Jan 11, 2006

No. C-03-00777 RMW, Re Docket No. 158, 206 (N.D. Cal. Jan. 11, 2006)

Opinion

No. C-03-00777 RMW, Re Docket No. 158, 206.

January 11, 2006

John Ota, Jack W. Lee, Richard Pearl, Counsel for Plaintiff.

David Robert Sidran, Counsel for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR AWARD OF REASONABLE ATTORNEY'S FEES

RONALD WHYTE, District Judge

On April 5, 2005 a jury returned a verdict in favor of George Miller, Jr. ("Miller") on his claim that Vicorp Restaurants, Inc. ("Vicorp") violated the California Fair Employment and Housing Act ("FEHA"), Cal. Gov't Code §§ 12940 et seq. and public policy by firing him on the basis of disability. The jury found in favor of Vicorp on Miller's age and race discrimination claims. The jury awarded Miller $350,000 in economic damages. The court then granted Vicorp's motion for a remittitur, reducing Miller's damages to $308,734. Miller moves for an award of reasonable attorney's fees in the amount of $907,676.03.¹ Vicorp opposes the motion. The court has read the moving and responding papers and considered the arguments of counsel.² For the reasons set forth below, the court grants Miller an award of fees in the amount of $410,728.95.

1 Miller's reply brief includes an updated calculation of $1,019,095.40 taking into account work done on the reply. See Lee Supp. Decl. Supp. Mot. Attorney's Fees ("Lee Reply Decl.") Ex. D.

2 Shortly before the hearing on the attorney's fees motion, Vicorp filed an ex parte motion for leave to file a sur reply to Miller's reply brief. The court denies Vicorp's motion. Vicorp claims a sur reply is necessary to respond to Miller's motion to exclude the declaration of Vicorp's attorney fee auditor, James P. Schratz. As noted below, even without Miller's formal objections, the court does not find Schratz's declaration helpful. A sur reply is thus unnecessary.

I. ANALYSIS

A. Fee Award under the FEHA

California law empowers a court "in its discretion, [to] award to the prevailing party reasonable attorney's fees and costs" in a FEHA case. Cal. Code Civ. P. § 1296.5. In addition, courts may award attorney's fees in cases where a plaintiff's success "has resulted in the enforcement of an important right affecting the public interest." Cal. Code Civ. P. § 1021.5. The Ninth Circuit "applie[s] state law in determining not only the right to fees, but also in the method of calculating the fees." Mangold v. California Public Utilities Com'n, 67 F.3d 1470, 1478 (9th Cir. 1995). Vicorp does not dispute that Miller is entitled to a fee award here.

B. Amount of Award

1. The Lodestar Figure

"[A] court assessing attorney fees begins with a touchstone or lodestar figure, based on the `careful compilation of the time spent and reasonable hourly compensation of each attorney . . . involved in the presentation of the case.'" Ketchum v. Moses, 24 Cal.4th 1122, 1131-32 (2001) (quoting Serrano v. Priest, 20 Cal.3d 25, 49 (1977). "[A]bsent circumstances rendering the award unjust, an attorney fee award should ordinarily include compensation for all the hours reasonably spent, including those relating solely to the fee." Id. at 1133. "The party seeking an award of fees should submit evidence supporting the hours worked and rates claimed." Hensley v. Eckerhart, 461 U.S. 424, 433-34 (1983). The court must look to "prevailing market rate[s] in the relevant community" to "establish the appropriate rate for lodestar purposes." Bouman v. Block, 940 F.2d 1211, 1235 (9th Cir. 1991). "The party opposing the fee application has a burden of rebuttal that requires submission of evidence to the district court challenging the accuracy and reasonableness of the hours charged or the facts asserted by the prevailing party in its submitted affidavits." Gates v. Deukmejian, 987 F.2d 1392, 1397-98 (9th Cir. 1992).

Miller claims that the lodestar figure in this case is $480,296.75. This figure includes (1) about 450 hours at $495.00 per hour, or $229,729.50 for Jack Lee ("Lee"), (2) 620 hours at $325.00 per hour, or $202,865.00 for John Ota ("Ota"), (3) $34,065.00 for work performed by staff at Minami Lew Tamaki ("Minami Lew"), Miller's law firm, and (4) 27.55 hours at $495.00 per hour, or $13,637.25 for Richard Pearl ("Pearl")'s work on the fee motion itself.

a. Reasonableness of Miller's Claimed Rates

Miller submits declarations by Barry Goldesten, Steven G. Zieff, and James M. Finberg — local practitioners with knowledge of the rates charged by lawyers in employment discrimination cases — to support the proposition that Miller's claimed rates are reasonable. See Declaration of Barry Goldstein Supp. Mot. Attorney's Fees ("Goldstein Decl.") ¶ 11 ("the hourly rates sought for plaintiff's attorneys in Miller are in line with rates charged for comparable complex employment litigation"); Declaration of Steven G. Zieff Supp. Mot. Attorney's Fees ("Zieff Decl.") ¶ 22 ("the hourly rates sought for [p]laintiff's attorneys in Miller are in line with rates charged for comparable employment litigation for individual or class cases"); Declaration of James M. Finberg Supp. Mot. Attorney's Fees ("Finberg Decl.") ¶ 5 ("[t]hese rates are consistent with the market rates charged by law firms of comparable caliber, experience level and reputation").

Vicorp counters with a declaration by James P. Schratz, a professional auditor of attorney's fees. See Declaration of James P. Schratz Supp. Opp. Mot. Attorney's Fees ("Schratz Decl.") ¶ 5.³ Vicorp also cites a recent order by Magistrate Judge Chen of this court in Velez v. Roche, USDCT N.D.Cal. No. C-02-0335 EMC, Sept. 22, 2004 (" Velez"). Velez, like this case, involved a request for attorney's fees by Lee, Ota, and Minami Lew attorneys and staff. Minami Lew submitted declarations from the same lawyers — Barry Goldstein, Steven G. Zieff, and James M. Finberg — attesting to the reasonableness of Minami Lew's hourly rates. Magistrate Judge Chen noted that these declarations, although "competent and probative," provided "little specific information." Id. at *12. Moreover, Magistrate Judge Chen noted a discrepancy between the "actual fee customarily charged to fee playing clients," which often reflects discounts, and Minami Lew's claimed billing rates. Id. at *11. Finally, Magistrate Judge Chen drew upon his own experience in comparable cases to conclude that prevailing rates were lower than Minami Lew asserted. Id. at *13. Magistrate Judge Chen thus held that (1) Lee's reasonable rate was $425 per hour, (2) Ota's reasonable rate was $230 per hour, and (3) Minami Lew's paralegals' reasonable rates ranged from $120 to $110 per hour.

3 Miller objects to Schratz's declaration on the grounds that (1) Vicorp has not qualified Schratz as an expert and (2) Schratz's statements are not based on personal knowledge. Miller's arguments appear to be well-taken. The court need not resolve this issue, however, as it does not rely on Schratz's declaration to calculate the fee award.

Miller urges this court to ignore Velez because it is not properly the subject of judicial notice. Miller notes that "[a] court may not take judicial notice of another court's findings of fact or of the truth of the facts recited in a court opinion." Obj. Jud. Notice at 1:25-26. Although Miller is correct that a court may not adopt another court's "findings . . . as undisputed facts," Wyatt v. Terhune, 315 F.3d 1108, 1113 (9th Cir. 2003), Vicorp offers Velez as precedent: for Magistrate Judge Chen's resolution of mixed questions of fact and law. Because the court does not accept Magistrate Judge Chen's conclusions as factual findings, the issue of judicial notice is irrelevant.

Miller next argues that Velez is inapposite because it applied federal law, while this case involves state law. According to Miller, unlike federal law, "California law . . . hold[s] that `absent circumstances rendering the award unjust, an attorney fee award should ordinarily include compensation for all the hours reasonably spent.'" Rep. Supp. Mot. Attorney's Fees at 8:10-13 (emphasis in original). This assertion — that Miller's hours are reasonable because he is entitled to compensation for all reasonable hours — is circular. Miller fails to distinguish Velez on this ground. In addition, Miller contends that Velez has been appealed and is therefore not citable. Nevertheless, given the substantial similarity between Velez and this case, the court finds Velez instructive. Finally, Miller claims that Magistrate Judge Chen erred by focusing on the lack of evidence of "actual fee[s] customarily charged to fee paying clients." Id. at *11. According to Miller, "the rates that public interest attorneys actually charge to their fee-paying clients, who often have very limited funds, is not determinative of the reasonable hourly rate for fee-shifting purposes." Rep. Supp. Mot. Attorney's Fees at 3:24-4:1 (emphasis in original). Miller misunderstands Velez. Magistrate Judge Chen did not discount Minami Lew's claimed rates because their clients "often have limited funds." Instead, Magistrate Judge Chen observed that because lawyers often give clients price breaks, billing rates tend to be more aspirational than reflective of actual practice. See Velez at *11 ("Lee also conceded at the hearing that he often gives discounted rates to his clients" and thus "$475 per hour may be [his] stated hourly rate but not necessarily his actual customary rate"). Because Magistrate Judge Chen's observations are rooted in real-world billing practices, they are consistent with the Ninth Circuit's command that courts employ "[t]he prevailing rate in the community." Jordan v. Multnomah County, 815 F.2d 1258, 1262 (9th Cir. 1987).⁴ In accordance with this principle, the court notes that it has seen other competent counsel claim hourly rates of around $350 per hour for similar cases. It has not seen rates higher than those claimed here. The court finds that (1) Lee's reasonable rate is $450 per hour, (2) Ota's reasonable rate is $250 per hour, and (3) Minami Lew paralegals' reasonable rates range from $130 to $115 as noted below.⁵

4 Notably, Lee submitted a supplemental declaration stating that, when he works on an hourly basis, he typically charges between "$375 to $495." Lee Reply Decl. ¶ 13. This suggests that a rate of $495 would be at the extreme high end of the spectrum.

5 Four paralegals worked on Miller. Two of these individuals also worked on Velez. In Velez, Magistrate Judge Chen awarded Rosalinda Valdez, a law school graduate, a reasonable rate of $120 per hour. The court adjusts this rate upward to $125 per hour. Magistrate Judge Chen also awarded Lisa Bellard $110 per hour. The court adjusts this rate upward to $115 per hour. In addition, the court awards Glicel Sumagasay $115 per hour and Susan Chan, who is a law school graduate and member of the California bar, $130 per hour.

b.Reasonableness of Miller's Claimed Number of Hours Preparing For and During Trial

According to Schratz, Miller billed (1) 73.80 hours on motions in limine, (2) 65.20 hours on jury instructions, (3) 59.00 hours on paralegal trial preparation, (4) 27.90 hours on the trial brief, and (5) 287.60 hours on miscellaneous trial preparation. Vicorp argues that these hours were excessive. The court disagrees. First, the court notes that the parties filed a total of sixteen motions in limine. Miller's average of about 4.5 hours per motion does not seem unreasonable. Cf. Velez at *21 (7.5 hours per motion in limine not unreasonable). Second, the court is aware that (1) Magistrate Judge Chen reduced Minami Lew's billing on jury instructions to 50 hours, see Velez at *22, and (2) Schratz opines that Minami Lew spent 65.20 hours on that task here. Nevertheless, Schratz conflates numerous jury-related tasks within the broad category of "jury instructions," including drafting voir dire questions and a jury questionnaire. Lee Reply Decl. ¶ 11. Moreover, it is unclear from Schratz's declaration whether the 65.20 figure represents attorney time or both attorney and paralegal time. Third, Vicorp claims that because Miller called only eleven witnesses at trial for twenty-two hours of testimony, yet billed 513.50 hours in trial preparation, Miller "ha[s] billed on a trial preparation to trial attendance ratio of approximately 23 to 1." Opp. Mot. Attorney's Fees at 8:26-28. This calculation is misleading given the length of the trial. See Lee Decl. Supp. Mot. Attorney's Fees ¶ 9. Moreover, because Miller bore the burden of proving his case at trial, it was not unreasonable to prepare carefully. Finally, Vicorp asserts that its own attorney billed only 34.8 hours for trial attendance, while Ota and Lee billed 43.20 and 38.50 respective hours for that task. See Schratz Decl. at 17:3-17. However, it is well-established that "[c]omparison of the hours spent in particular tasks by the attorney for the party seeking fees and by the attorney for the opposing party . . . does not necessarily indicate whether the hours expended by the party seeking fees were excessive." Ferland v. Conrad Credit Corp., 244 F.3d 1145, 1151 (9th Cir. 2001) (per curiam). Here, Vicorp has failed to articulate how Ota and Lee's efforts were unnecessarily duplicative.⁶ Therefore, the court does not find that Miller billed an excessive number of hours for the trial.

6 Vicorp also argues that Miller should not have billed for travel time or "clerical" work. The court disagrees. Most lawyers in this community bill for travel time. See Zieff Decl. ¶ 25; Goldstein Decl. ¶ 13. In addition, Vicorp fails to specify to which items of "clerical" work it objects.

c.Reasonableness of Miller's Hours With Respect to the Fees Motion

Minami Lew claims the following fee-related hours: (1) 73.5 on behalf of Lee, (2) 98.0 on behalf of Ota, (3) 55.2 on behalf of Pearl, and (4) 90.55 on behalf of paralegals. See Lee Decl. Supp. Rep. Mot. Attorney's Fees Ex. D. The court agrees with Vicorp that these hours are excessive. For example, Lee and Ota spent a total of 1,041.7 hours preparing for and litigating the trial itself: a major task that spanned several years and included taking depositions, opposing a summary judgment motion, filing and opposing motions in limine, examining and cross-examining witnesses, and delivering opening and closing statements. Yet Lee and Ota purport to have spent 171.5 hours on the fee motion alone, despite the fact that Pearl also billed 55.2 hours on the motion and claims to have done the majority of the heavy lifting. See Pearl Supp. Decl. Supp. Mot. Attorney's Fees ¶ 5 ("I spent most of my time revising the original draft memo prepared by . . . Ota [and] directed the overall strategy for the motion: what declarations to get, what topics they should cover, and the like"). When lawyers can research, prepare, and litigate a six day jury trial in about a thousand hours, it is unreasonable for them to spend nearly a quarter of that time on a fee motion. Likewise, although Minami Lew's paralegals only billed 190.15 hours on the case through trial, they claim to have spent nearly half that amount — 90.85 hours — on the fee motion. The court discounts Ota, Lee, and Pearl's hours by 40% and Minami Lew paralegals' hours by 60%.

c.Final Lodestar Amount

In light of the above analysis, Minami Lew's final lodestar figure is as follows.

Timekeeper Adjusted Liability Total Adjusted Total Fee- Grand Total Hourly Stage Hours Liability- Fee- Related $ $ Rate Related $ Related Hours Lee $450 427.8 $192,510 29.4 $13,230 Ota $250 613.9 $153,475 39.2 $9,800 Chan $130 151.6 $19,708 11.13 $1,469 Valdez $125 12.6 $1,575 0 $0 Bellard $115 24.05 $2,765.75 0 $0 Sumagaysay $115 1.9 $218.50 43.38 $4,988.70 Pearl $495.00 0 $0 22.2 $10,989.00 Total $40,476.70 $410,728.95 $370,252.25 2. Lodestar Multiplier

"[A] trial court should award a multiplier for exceptional representation only when the quality of representation far exceeds the quality of representation that would have been provided by an attorney of comparable skill and experience billing at the hourly rate used in the lodestar calculation." Ketchum, 24 Cal.4th at 1139. At the same time, however, "[t]o the extent a trial court is concerned that a particular award is excessive, it has broad discretion to adjust the fee downward." Id. at 1138. Courts apply a two-part test when a plaintiff "succeeded on only some of his claims for relief." Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). The first step focuses on whether "the plaintiff fail[ed] to prevail on claims that were unrelated to the claims on which he succeeded." Id. The second step hinges on whether "the plaintiff achieve[d] a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award." Id. Although California law presumes that courts will not reduce lodestars for "partial success" in FEHA cases, it permits such a reduction "[o]nly in the unusual case in which there are `special circumstances [which] render such an award' — that is, an award of the full lodestar `for all hours reasonably spent' — `unjust.'" Beaty v. BET Holdings, Inc., 222 F.3d 607, 612 (9th Cir. 2000) (quoting Vo v. Las Virgenes Municipal Water Dist., 79 Cal. App. 4th 440, 447 (2000)).

The court finds that, on balance, no adjustment in the final lodestar figure is appropriate. Miller succeeded on his disability discrimination and tortious discharge claims. However, Miller's complaint included seven causes of action: (1) age discrimination, (2) race discrimination, (3) disability discrimination, (4) violation of California Labor Code § 132a, (5) tortious discharge in violation of public policy, (6) failure to pay overtime, and (7) violation of California Labor Code § 201. Although the first five claims sought redress for Vicorp's firing Miller, Miller's age, disability, and race discrimination claims stemmed from separate incidents. For example, Miller predicated his age discrimination claim on purported statements by Vicorp managers Richard Sambolin and Kevin Jacobe. See Opp. Mot. Summ. J. at 1:27-2:3. Miller's race discrimination claim proceeded from a different premise: that Vicorp treated African American employees differently than employees of other races. See id. at 14:10-15:15. Finally, Miller's disability discrimination cause of action centered on his work-related injury and Vicorp's response to it. See id. at 8:28-10:13. Miller's age and race claims are thus not sufficiently related to his successful claims to justify full compensation.⁷ Moreover, Miller voluntarily dismissed his causes of action for failure to pay overtime and for violation of California Labor Code § 201. The court granted summary judgment sua sponte on Miller's violation of California Labor Code § 132a claim. Although the court is cognizant of the fact that Miller is entitled to pursue as many viable theories as possible, Miller's dismissed claims lacked merit. Granting Miller a fee recovery on these claims would be anomalous. See Beaty, 222 F.3d at 612 (a trial court's discretion to reduce the lodestar "serves the important function of deterring the litigation of claims with little merit"). In light of these considerations, "work on [the] unsuccessful claim[s] cannot be deemed to have been `expended in pursuit of the ultimate result achieved.'" Hensley, 461 U.S. at 435 (quoting Davis v. County of Los Angeles, 8 E.P.D. ¶ 9444 at 5049 (C.D. Cal. 1974)).

7 Miller contends otherwise, relying on Greene v. Dillingham Construction, N.A., Inc., 101 Cal. App. 4th 418 (2002) and Odima v. Westin Tuscon Hotel, 53 F.3d 1484 (9th Cir. 1995) for the proposition that his race, age, and disability claims are related because they sought to remedy the same wrongful conduct. But neither case sweeps so broadly. In Greene, not only did the plaintiff's attorneys voluntarily reduce the lodestar to compensate for unsuccessful claims, but all the plaintiff's claims stemmed from a single factual incident. See Greene, 101 Cal. App. 4th at 423-24 (noting that (1) "Greene reduced the lodestar by an additional 15 percent to reflect time that might not have been spent had he not pursued claims for retaliation and punitive damages" and (2) "Greene's claims of harassment and retaliation were based on the common core of facts that the presence of hangman's nooses in the workplace, including one with an effigy, created a hostile work environment"). Similarly, in Odima, the plaintiff's unsuccessful and successful claims "required virtually the same evidence." Odima, 53 F.3d at 1499. That is not the case here.

On the other hand, Minami Lew's lawyering was very good, Miller received an excellent result, and counsel took the case despite the risk that they might recover nothing. Further, the public interest favors the pursuit of meritorious discrimination claims. Therefore, the court finds plaintiff is entitled to an enhancement to offset the reduction for work on the unsuccessful claims. The court holds that Minami Lew's fee recovery (1) is $370,252.25 for the underlying litigation and (2) $40,476.70 for the fee motion, for a total recovery of $410,728.95.

II. ORDER

For the foregoing reasons, the court grants in part and denies in part Miller's motion and awards Minami Lew $410,728.95 in attorney's fees.