Robert Stanger v. China Electric Motor, Inc. et al

Filing 216

ORDER GRANTING PLAINTIFF'S MOTION FOR ADDITIONAL ATTORNEYS' FEES AFTER NINTH CIRCUIT MANDATE by Judge Manuel L. Real: Upon Plaintiffs Counsel's Request for Additional Attorneys' Fees, in conjunction with the Ninth Circuit's Mandate 200 , IT IS HEREBY ORDERED that Plaintiffs' Counsel is to be awarded an additional $478,545.00 in attorneys' fees. See document for details. (gk)

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CLOSED

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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MIKE MCGEE, et al.,

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Plaintiffs,

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v.
CHINA ELECTRIC MOTOR INC., et al.,

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Defendants.
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CASE NO. CV 11-2794-R
ORDER GRANTING PLAINTIFF’S
MOTION FOR ADDITIONAL
ATTORNEYS’ FEES AFTER NINTH
CIRCUIT MANDATE

Before the Court is Plaintiffs Counsel’s Request for Additional Attorneys’ Fees, in

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conjunction with the Ninth Circuit’s Mandate, which took effect on February 9, 2016 (Dkt. No.

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200).

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As explained by the Ninth Circuit in its Opinion Remanding this action back to this Court,

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“under the lodestar method, the court multiplies a reasonable number of hours by a reasonable

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hourly rate.” As a preliminary matter, the $475 “blended” hourly rate was an attempt by this

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Court to account for “high-cost-lawyers” being placed on issues and tasks that less experienced

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and less costly professionals could have successfully completed. The blended hourly rate allowed

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this Court to find an hourly rate which would adequately compensate Plaintiffs’ entire legal team,

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in light of the attorney’s chosen allocation of time and resources, while not penalizing the class for

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any personnel and staffing inefficiency. Since a court in a common fund case “must look out for

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the interests of the beneficiaries” who neither hired the attorneys in question nor agreed to their

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hourly rate, this Court is not strictly bound to the requested hourly rate suggested by the attorneys

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at the conclusion of the case through settlement. See generally In re Coordinated Pretrial

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Proceedings in Petroleum Prods. Antitrust Litig., 109 F.3d 602 (9th Cir. 1997). In any event, after

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calculating the delay and other factors into the fees calculation, the Lodestar figure will be

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adjusted going forward.

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The Lodestar figure is presumed to represent a reasonable fee. Fischel v. Equitable Life

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Assur. Soc’y of U.S., 307 F.3d 997 (9th Cir. 2002). After finding the presumptive Lodestar figure,

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the Court then may make adjustments to the amount of attorneys’ fees based on the Kerr factors.

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Gracie, 217. F.3d at 1070. The Kerr factors include: “(1) the time and labor required, (2) the

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novelty and difficulty of the questions involved, (3) the skill requisite to perform the legal service

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properly, (4) the preclusion of other employment by the attorney due to acceptance of the case, (5)

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the customary fee, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the

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client or the circumstances, (8) the amount involved and the results obtained, (9) the experience,

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reputation, and ability of the attorneys, (10) the ‘undesirability’ of the case, (11) the nature and

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length of the professional relationship with the client, and (12) awards in similar cases.” Kerr v.

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Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975) (abrogation in part recognized by

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Jordan v. Multnomah Cnty., 815 F.2d 1258 (9th Cir. 1987) (explaining that a district court need

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only apply some of these factors in its analysis of the reasonableness of attorneys’ fees); Davis v.

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City and Cnty. of S.F., 976 F.2d 1536 (9th Cir. 1992) (vacated on other grounds by Davis v. City

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and Cnty. of S.F., 984 F.2d 345 (1993) (explaining the current irrelevance of the sixth factor))).

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Having reexamined Plaintiffs Counsel’s request in light of the Ninth Circuit’s Opinion, and

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the position papers presented by Plaintiffs’ Counsel, this Court is now satisfied that an upward

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adjustment of the Lodestar value is appropriate.

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First, Plaintiffs’ Counsel provided 1,402 hours of legal work on this case, which is
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admittedly a significant investment in time and resources. These hours appear presumptively

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reasonable in light of the unique complexities present in litigating a complex civil case requiring

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significant work in foreign countries, and finding common ground between multiple defendants.

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This presumption is strengthened by the fact that Plaintiffs’ Counsel had to negotiate the

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settlement despite the breakdown of the initial good faith attempts at mediation between parties.

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Second, while much of Plaintiffs’ arguments concerning the novelty and difficulty of the

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issues involved in this case appear a bit overstated, dealing with issues of research in production

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that comply with both United States and Chinese law do raise the complexity of this case beyond a

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standard domestic class action.

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Third, the skill of both Plaintiffs’ Counsel and Opposing Counsel in this case were

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unquestionably noteworthy. Thus the third and ninth Kerr Factors favor an upward enhancement.

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Fourth, working over 1400 hours on this case clearly precludes other employment options

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for Plaintiffs’ Counsel.
Fifth, the presumed reasonable rate in common fund cases will often be 25% or higher of

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the overall award received by the class. In re Activision Secs. Litig., 723 F. Supp. 1373 (N.D. Cal.

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1989). The original full Lodestar value in this case was significantly below that amount and thus

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both the fifth and twelfth Kerr factors favor an enhancement above the Lodestar figure.

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Sixth, the results obtained, as already noted by this Court in its original order, were

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admittedly quite favorable to the class members. The eighth Kerr factor thus weighs in favor of

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an enhancement.

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Seventh, given the legitimate concerns of being able to collect against foreign defendants
with questionable solvency, the risk of non-payment was high in this case as well.
While this Court finds Plaintiffs Counsel’s articulation of the undesirability of this case to

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be a bit overstated, the Kerr factors, when examined as a whole, do make Plaintiffs Counsel’s

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requested upward adjustment of the Lodestar value to appear reasonable to this Court.

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Having examined the reasonableness factors in determining the appropriateness of an

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upward adjustment to the Lodestar rate, this Court must next examine the delay factor. This Court

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may use either of two methods for calculating the appropriate compensation for a delay in
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payment: “(1) by applying the attorneys' current rates to all hours billed during the course of the

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litigation; or (2) by using the attorneys' historical rates and adding a prime rate enhancement.”

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Fischel, 307 F.3d at 1010. This Court will use the first method in this case. Based on the numbers

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provided in Plaintiffs’ Second Position Paper, using Counsel’s current rates yields a lodestar of

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$534,092 for the Rosen Law Firm, $98,105 for Glancy, and $127,542 for Lieff. This adds up to

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$759,739. This fee enhancement is appropriate given both the length of the underlying litigation,

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and the delay inherent in Plaintiffs Counsel’s successful appeal to the Circuit court.

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Plaintiffs Counsel’s next request for a risk multiplier of around 1.24 is reasonable
considering the significant risk in both taking this case and obtaining a recovery as explained

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above, and the much higher risk adjustment that is often awarded in these cases. See generally

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Van Vranken v. Atl. Richfield Co., 901 F. Supp. 294 (N.D. Cal. 1995). Since the reasonableness

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factors, delay factor, and risk factor all support an upward enhancement of Plaintiffs Counsel’s

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original Lodestar value, this Court GRANTS Counsel’s request for additional attorneys’ fees.

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Plaintiffs Counsel’s specific fee enhancement appears reasonable for the reasons explained above.

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This Court therefore ORDERS that Plaintiffs’ Counsel receive an additional award of
$478,545.00.
IT IS HEREBY ORDERED that Plaintiffs’ Counsel is to be awarded an additional

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$478,545.00 in attorneys’ fees.

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Dated: May 5, 2016.

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___________________________________
MANUEL L. REAL
UNITED STATES DISTRICT JUDGE

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