Opinion
Civ. No. 89-0820GT(LSP).
June 13, 2007
ORDER
On May 21, 2007, Plaintiff's, Philip K. Paulson ("Mr. Paulson"), Motion for Attorney Fees and Costs came on for hearing before the Court. The Court has fully considered this matter, including the briefs filed, the authorities cited therein and the arguments presented. For the reasons stated below, Mr. Paulson's Motion for Attorney fees and Costs is GRANTED.
All the parties are well versed in the facts and protracted procedural history of this case. Therefore, the Court will not reiterate those facts or history here.
CONCLUSIONS OF LAW
A. State Law Controls The Award of Attorney's Fees in this Case
In diversity actions and cases of pendant jurisdiction, the Ninth Circuit utilizes substantive state law for determining both the right to attorney fees and the method of calculating those fees. Mangold v. California Public Utilities Com'n, 67 F.3d 1470, 1478 (9th Cir. 1995). The issues in this case were decided entirely on California constitutional law. Additionally, Mr. Paulson asserts that state law applies for the award of attorney's fees and the Defendant, the City of San Diego ("City") does not argue against this assertion. Hence, the Court is utilizing state law for the determination of attorney's fees in this case.B. Private Attorney General Doctrine
Generally, under the American rule, litigants are to bear their own attorney fees and costs. The exception to this general rule is the Private Attorney General Doctrine which has been codified in California Code of Civil Procedure § 1021.5. Under this section, the Court may award attorney's fees to the
"successful party . . . in any action which has resulted in the enforcement of an important right affecting public interest if: (a) a significant benefit, whether pecuniary or non-pecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement . . . are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any. . . ."
The fundamental objective of this section and the doctrine in general is to "encourage suits enforcing important public policies by providing substantial attorney fees to successful litigants in such case." Graham v. DaimlerChryseler Corp., 34 Cal. 4th 553 (2004); Maria P. V. Riles, 43 Cal. 3d 1281 (1987).
Essentially, the sole issue before the Court on the entitlement to fees is whether or not Mr. Paulson is the "successful party" for the purpose of § 1021.5. Mr. Paulson asserts he is the "successful party" under § 1021.5 and that the catalyst theory further supports this claim. The City argues that Mr. Paulson has not succeeded and that he has not met the basic criteria for the catalyst theory.
a. Successful Party
As the City correctly points out, the threshold requirement for a fee award under § 1021.5 is that the party is "successful."Schmier v. Supreme Court, 96 Cal. App. 4th 873, 877 (2002). The term "successful" as used in § 1021.5 is synonymous with "prevailing." Id. However, a favorable final judgment is not required for a party to be designated "successful" under § 1021.5. Schmier, 96 Cal. App. 4th at 878; Graham v. DaimlerChrysler Corp., 34 Cal. 4th 553, 565-66 (2004); Maria P.V. Riles, 43 Cal. 3d 1281 (1987). The critical inquiry is the "impact of the action." Schmier, 96 Cal. App. 4th at 877. The trial court must realistically assess, from a practical standpoint, whether the action "served to vindicate an important right so as to justify a fee award." Id. This inquiry is "intensely factual" and requires the trial court to look "outside the merits" and "focus on the condition the fee claimant sought to change." Id. The court looks to the outcome of the litigation and asks if the "claimant's efforts contributed in a significant way" to the change in the condition. Id.
Though not decided under federal law, the Ninth Circuit has held that dismissal due to mootness and vacatur does not "affect the fact that for the pertinent time period appellees obtained the desired relief" and claimants were entitled to a fee award.Paulson v. City of San Diego, 475 F.3d 1047, 1049 (9th Cir. 2007) ( quoting Williams v. Alioto, 625 F.2d 845 (9th Cir. 1980)).
The condition that Mr. Paulson sought to change was the enforcement of the injunction that prohibited the Mount Soledad cross to remain on City property. It had already been decided that the presence of the Latin cross, a sectarian symbol, on the City's property, violated the California Constitution. This Court issued an injunction, ordering the City to remedy this constitutional violation. The City delayed remedying that violation for many years. Finally, after many delay tactics and political maneuvering that were clearly efforts to "save the cross," this Court ordered that its original injunction be enforced on May 3, 2006. At the last minute, the federal government stepped in and took the Mount Soledad cross and memorial by eminent domain, which mooted the enforcement order. Now, for the moment, though the need to enforce the injunction has been obviated, the original constitutional concerns, that a Latin cross, the preeminent symbol of Christianity, does not stand on City property, have been remedied. The Court is convinced nothing would have been done to cure those constitutional problems nor remedy the situation but for the continuous and persistent efforts of Mr. Paulson. Hence, Mr. Paulson did obtain the result he sought, that this Court order the enforcement of the original injunction even though that order was eventually mooted by the federal government taking the property. Accordingly, the Court finds that Mr. Paulson is the successful party for the purposes of § 1021.5.
b. Catalyst Theory
Mr. Paulson also asserts that the catalyst theory provides further support for awarding him attorney fees. The catalyst theory is a pragmatic application of the principal that courts are to "look to the practical impact of the public interest litigation in order to determine whether the party was successful, and therefore eligible for attorney fees." Graham 34 Cal. 4th at 567. The plaintiff may be considered "successful" if the lawsuit was a catalyst in motivating defendants to modify their behavior. Id. To be eligible for attorney fees under § 1021.5, the plaintiff, 1) must be a catalyst to the defendant's changed behavior, 2) the lawsuit must have some merit, and 3) the plaintiff must have engaged in a reasonable attempt to settle prior to litigation. Graham, 34 Cal. 4th at 561.
Although the Supreme Court disapproved the catalyst theory inBuckhannon Board and Car Home, Inc. V. West Virginia Dept. Of Health and Human Resources, 532 U.S. 598 (2001), The California Supreme Court subsequently endorsed the catalyst theory inDaimlerChrysler and tailored the standards in applying the catalyst theory in answer to the Supreme Court's concerns.
As stated above, the Court is convinced that but for the consistent and persistent efforts of Mr. Paulson to enforce the injunction nothing would have been done to cure the constitutional ills that surrounded the Mount Soledad cross sitting on public City property. The City tries to argue that it did not change its behavior, that it was the federal government's taking of the land that altered the landscape of this litigation. However, if Mr. Paulson had not persisted for so many years throughout all the City's maneuvers until this Court ordered the injunction enforced, the federal government would not have stepped in to take the land. The sponsor of the bill in the House, the sponsor of the bill in the Senate, the Administration and the Mayor of the City all state on legislative record that the federal legislation was proposed as a direct response to this Court's May 6, 2006 order to enforce the injunction. For example, Congressman Duncan Hunter wrote to the President requesting condemnation proceedings and stated "this matter deserves your urgent attention as a District Judge recently ruled that the Mt. Soledad Memorial Cross must be removed from City property within 90 days, or the City will face a daily fine of $5,000.00." The mayor of San Diego, Mayor Jerry Sanders, also lobbied the President to exercise the powers of eminent domain to avoid this Court's injunction. Mayor Sanders wrote the President stating that this Court ordered the removal of the cross within 90 days and supported Congressman Hunter's recommendation that the federal government take the property on which the Mt. Soledad cross stands. Hence, it is clear to this Court that it was Mr. Paulson's persistent efforts and lawsuit that was the impetus in the federal government taking the land and changing the course of this litigation.
The second factor, that the lawsuit has some merit is obvious. The lawsuit was brought to cure a fundamental constitutional violation. Once the injunction was obtained, Mr. Paulson doggedly continued for several years until this Court ordered that the original injunction be enforced. There is no question in the Court's mind that the lawsuit had merit.
Finally, the third factor, that the Plaintiff try to settle the lawsuit prior to litigation has also been met. At one point in time, Mr. Paulson had secured a settlement agreement with the City, which included a waiver of fees. (Plaintiff's Motion at 1-4; Defendant's Opposition at 2) At the last minute, the City backed out of the proposed settlement agreement. (Plaintiff's Motion at 4-5; Defendant's Opposition at 2-3). It is clear to this Court that Mr. Paulson has been diligent in trying to secure a settlement rather than prolong the litigation. Hence this factor is met.
c. Other Private Attorney Doctrine Requirements
Although the City does not argue that the remaining factors of the Private Attorney doctrine have not been met, the Court will address them briefly here.
The second factor is that the lawsuit resulted in the enforcement of important rights affecting public interest. Upholding and enforcing the Constitution, whether it is the federal or state constitution is always an important right that affects public interest.
The third factor is that a significant benefit was conferred on the public. Again, defending and upholding the Constitution is always a significant benefit to the public. Everyone benefits when the rights enumerated in the Constitution are preserved, even if it appears to be unpopular at the time.
The fourth prong is also met, that the necessity and financial burden of private enforcement favor the award of fees. In this case, the lawsuit was against the City, a public entity. It has been abundantly clear to this Court that the City was not going to remedy the constitutional problems of its own accord.
Finally, the last prong, that attorneys' fees should not be paid out of plaintiff's own recovery. There was no pecuniary relief claimed or awarded in this case.
d. Conclusion
In conclusion, the Court finds that Mr. Paulson was the successful party for the purposes of § 1021.5 and that the catalyst theory further supports this finding.
C. Calculation of Attorney's Fees
Under California law there are two methods for calculating attorney's fees for civil rights actions, the lodestar/multiplier method and the percentage of recovery method. Wershba v. Apple Computer, Inc., 91 Cal. App. 4th 224, 254 (2001). The lodestar/multiplier method is utilized for calculating fees pursuant to § 1021.5. With this method, the lodestar is calculated by multiplying the reasonable hours expended by a reasonable hourly rate. Id. If appropriate, the court may then enhance the lodestar with a multiplier. Id. Under California case law, fee awards are permitted without supporting detailed time sheets. Wershba, 91 Cal. App. 4th at 255; Sommers v. Erb, 2 Cal. App. 4th 1644, 1651 (1992); Rebney v. Wells Fargo Bank, 232 Cal. App. 3d 1344, 1349 (1991). Declarations of the attorney establishing the number of hours worked and the hourly rate is sufficient to support an award of attorney's fees. Wershba, 91 Cal.App. at 255; Rebney, 232 Cal. App. at 1349. An experienced trial judge is in the best position to assess the value of services rendered in his or her court. Wershba, 91 Cal. App. at 255; Serrano v. Priest, 20 Cal. 3d 25, 49 (1977). A trial judge's assessment of reasonable attorney's fees will not be disturbed on appeal unless it is clearly wrong. Id.
a. Lodestar Calculation
In this case Mr. James McElroy ("Mr. McElroy") submitted a declaration sworn under penalty of perjury stating the number of hours worked and the hourly rate for both himself and his associate, Shannon Nugent. (Declaration, Motion Exhibit 1) Mr. McElroy also submitted a copy of curriculum vitae evidencing both his litigation experience and expertise to support his claim. Based on the Court's intimate knowledge and review of the case, the Court finds that Mr. McElroy's claim for both hours worked and hourly rate are reasonable. Therefore, the total lodestar is calculated as follows:
James McElroy: 1104.65 hours × $400 per hour = $ 441,860.00 Shannon Nugent 183.7 hours × $275 per hour = $ 50,517.00 Total Lodestar $ 492,377.00 This total lodestar figure includes $ 469,474.50 for attorney's fees on the merits and $ 22,902.50 in attorneys' fees for litigating attorney's fees.b. Multiplier Calculation
Under California law, the lodestar is considered the basic fee for comparable legal services in the community. Graham v. DaimlerChrysler, 34 Cal. 4th 553, 579 (2004) citing, Serrano v. Priest, 20 Cal. 3d 25 (1977). The court may adjust the lodestar with a multiplier based on several factors, including: 1) the novelty and difficulty of the question involved, 2) the skill displayed in presenting them, 3) the extent that litigation precluded other employment, and 4) the contingent nature of the fee award. Id. Under California law, a multiplier may be added on fees for fee-related litigation. Id. at 581. For the reasons stated below, the Court applies a multiplier of 2 on the underlying litigation lodestar and no multiplier for the fees on the fee litigation lodestar.
Mr. Paulson asserts he is entitled to a multiplier of 3 based on all the above factors. The Court agrees that each of the factors weigh in Mr. Paulson's favor, just not to the same extent. For example, the first factor is the novelty and difficulty of the question involved. Mr. Paulson claims that the constitutional questions were complex. The Court disagrees that the underlying issues were unusually difficult or complex. The constitutionality of a sectarian symbol on public property has been litigated many times with much relevant law on the subject. However, the Court does find that this case was very difficult in that Mr. Paulson had to contend with the City's various ploys to circumvent this Court's order. There were numerous settlement negotiations and conferences, motions on the ownership of the cross, motions to enforce the settlement agreement, motions to enforce the injunction, appellate briefing and mediations, and oppositions to emergency stays to both the Ninth Circuit and the Supreme Court. The difficulty in this case lay in the many unexpected twists and turns it took as the City tried to delay complying with this Court's order. Hence, the first factor does weigh in favor of a multiplier.
The second factor is the skill in presenting the various relevant legal arguments. The Court was impressed with the efforts and the skill of Mr. McElroy in representing his client and accurately presenting the relevant law on the various issues. Hence, this factor weighs in favor of a multiplier.
The third factor is that the litigation precluded other employment. The Court is aware that the present litigation involved extensive settlement conferences and many last minute filings of emergency briefing. The course of the litigation changed continually as the City altered its tactics. This was indisputably time consuming and took away from representing other clients. Additionally, this was an extremely unpopular and highly publicized case. Mr. McElroy asserts that he lost potential clients because of this case. (Motion at 21-22). Hence, this factor also favors a multiplier.
The fourth factor considers the contingent nature of the fee award. The court in DaimlerChrysler stated that "[t]he contingent fee compensates the lawyer not only for the legal services he renders but for the loan of those services. . . . A lawyer who bears the risk of not being paid and provides legal services is not receiving fair market value of his work if he is paid only for the second of these functions." Graham v. DaimlerChrysler, 34 Cal. 4th at 580 ( citing Ketchum v. Moses, 24 Cal. 4th 1122 (2001)). This is the factor that most favors an addition of a multiplier. No one expected the many twists and turns of this litigation, least of all Mr. McElroy. For four years he has persistently pursued the City through a near settlement and various attempts to divest itself of the property with no assurance of either winning or being paid. Clearly Mr. McElroy bore the risk of not being paid for four years of hard work. Hence, this factor also favors a multiplier.
Applying these same factors to the litigation for fees, the Court does not find that a multiplier is appropriate. There are no novel or difficult questions that require special skill in presenting the motion for attorney's fees. Also, the fee litigation has been relatively straight forward and should not have precluded other employment. Finally, although there is some contingency risk involved, the Court does not think it is high enough to merit a multiplier.
c. Conclusion
In conclusion, the Court finds that a multiplier of 2 is appropriate on the underlying litigation and no multiplier is added for the fees on fees litigation. Mr. Paulson is also entitled to payment for any costs involved. Accordingly, the fee award is as follows:
Lodestar for underlying litigation $ 469,474.50 Multiplier of 2 $ 938,949.00 Lodestar for fee litigation $ 22,920.50 Costs $ 821.78 ____________ Total Award $ 962,691.28 Accordingly,IT IS ORDERED that the total fee award is $ 962,691.28.
IT IS FURTHER ORDERED that these fees are to be paid directly to Mr. McElroy.