Cosby v. AutoZone, Inc. et al

Filing 143

ORDER signed by Senior Judge Lawrence K. Karlton on 12/15/10 ORDERING Plaintiff SHALL FILE a statement within twenty-one (21) days of the issuance of this order explaining why Dr. Mahlas expert report and/or testimony were related to the claims upon which judgment was entered in his favor. Defendant may file a response to this statement within fourteen (14) days of service of plaintiffs statement. Upon receipt of these briefs, the court will calculate plaintiffs fee award.(Williams, D)

Cosby v. AutoZone, Inc. et al

Doc. 143

1 2 3 4 5 6 7 8 9 10 11 12 Plaintiff, 13 v. 14 15 16 17 18 19 20 21 22 23 24 25 26 AUTOZONE, INC., JIM KULBACKI and DOES 1-100, inclusive, Defendants. / This case concerns the award of fees to plaintiff after a jury trial. For the reasons discussed below, the court intends to award fees to plaintiff in the manner described below. The court does not calculate the amount at this time, however, because a issue remains that will affect the final award. I. BACKGROUND On January 26, 2010, the court began trial in the above captioned case. Plaintiff tried several claims under California's Fair Employment and Housing Act ("FEHA"). On 1
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UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

RANDY COSBY, NO. CIV. S-08-505 LKK/DAD

ORDER

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February 12, 2010, the jury reached a verdict. The jury found for plaintiff on his claims of failure to engage in the interactive process of accommodation and failure to provide reasonable accommodation. The jury awarded plaintiff $174,000 in economic losses and $1,326,000 in mental suffering damages. No punitive damages were awarded. The jury found for defendant on the remaining claims of failure to prevent discrimination based upon his physical disability and retaliation for engaging in protected activity, and disability discrimination-disparate treatment. On April 21, 2010, plaintiff moved for attorneys' fees and costs. On May 10, 2010, defendant filed an opposition to plaintiff's motion. This motion was heard on May 24, 2010. Subsequently, the court ordered supplemental briefing on the questions of (1) whether and/or under what conditions may the court reduce the fees awarded to plaintiff by a percentage of fees billed and (2) whether Perdue v. Kenny A., 559 U.S. __ (2010), should apply to the calculation of fees in the instant case. The parties filed supplemental briefing on these questions. II. STANDARD Under FEHA, "the court, in its discretion, may award to the prevailing party reasonable attorneys' fees and costs . . . ." Cal. Gov't Code § 12965(b). The Americans with Disabilities Act ("ADA"), the federal analog for disability claims under FEHA, provides for an identical test. 42 U.S.C. § 2000e-5(a) ("In any 2

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action or proceeding under this title, the court, in its discretion, may allow the prevailing party . . . to pay a reasonable attorney's fee as part of the costs. . . ."); see also, Asberry v. City of Sacramento/Sanitation Dept., No. S-01-2343 LKK/PAN, 2004 WL 3636054, *1 (E.D. Cal. Apr. 5, 2004) (applying same test for fees under ADA and FEHA). The propriety of awarding attorney's fees turns on three questions: (1) Is the party to whom attorney fees will be awarded a prevailing party?; (2) Should the court exercise its discretion to award the fees?; and (3) What is a reasonable award? The Supreme Court has articulated the standard for a finding of "prevailing party" as whether the party has "succeed[ed] on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983) (citing Nadeau v. Helgemoe, 581 F.2d 275 (1st Cir. 1978)). The Ninth Circuit, in discussing whether a party has achieved "prevailing" status, has noted that a party can achieve that status by establishing a "clear, causal relationship between the litigation brought and the practical outcome realized." Rutherford v. Pitchess, 713 F.2d 1416, 1419 (9th Cir. 1983). Although the statutes use the terms "discretion" and "may," courts in interpreting the statutes have looked to the legislative history and concluded that in the absence of special circumstances, a prevailing party should ordinarily recover attorney fees. Toussaint v. McCarthy, 826 F.2d 901 (9th Cir. 3

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1987); Cummings v. Benco Bldg. Serv's, 11 Cal. App. 4th 1383, 1387 (1992). Both federal and California courts have adopted the "lodestar" method for calculating attorney's fees. Hensley, 461 U.S. at 433; Serrano v. Priest, 20 Cal. 3d 25, 48-49 (1977). To determine the appropriate fee amount, the court multiplies the number of hours reasonably expended in the litigation by a reasonable hourly rate. Id. However, California's law of attorneys' fee awards under FEHA has diverged from federal law as developed under civil rights fee-shifting statutes in that the use of multipliers in calculating fees under 42 U.S.C. § 1988 does not control fee awards under FEHA. Flannery v. Calif. Highway Patrol., 61 Cal. App. 4th 629, 645-46 (1998) (stating that there is no evidence that the California legislature "intended or intends federal standards to apply to limit the trial court's exercise of discretion in calculating the amount of reasonable attorney fees under California fee-shifting statutes generally or under the FEHA provision in particular"). Under California law, after developing the touchstone lodestar amount, the trial court may then augment or reduce the fee award in light of a number of relevant factors. Nichols v. City of Taft, 155 Cal. App. 4th 1233, 1240 (2007) (citing Serrano v. Priest, 20 Cal. 3d 25, 48-49 (1977)); Vo v. Las Virgenes Municipal Water Dist., 79 Cal. App. 4th 440, 445-446 (2000). Those factors include: ". . .(1) the novelty and difficulty of the questions involved, (2) the skill displayed in 4

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presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, [and] (4) the contingent nature of the fee award. The purpose of such adjustment is to fix a fee at the fair market value for the particular action." Nichols, 155 Cal. App. 4th at 1240 (quoting Ketchum v. Moses, 24 Cal. 4th 1122, 1132 (2001)) (internal citations omitted).1 "Of course, the trial court is not required to include a fee enhancement to the basic lodestar figure for contingent risk, exceptional skill, or other factors, although it retains discretion to do so in the appropriate case. . . . In each case, the trial court should . . . consider the degree to which the relevant market compensates for contingency risk, extraordinary skill, or other factors under Serrano [v. Priest]. . . . [A] trial court should not consider these factors to the extent they are already encompassed within the lodestar." Ketchum, 24 Cal. 4th at 1138. III. ANALYSIS A. Prevailing Party

The jury awarded judgment to plaintiff in two of his claims. It also awarded plaintiff damages in an amount of $1.5

In Serrano v. Priest, the California Supreme Court listed relevant factors that may weigh in favor of increasing or decreasing the lodestar figure. 20 Cal. 3d at 49. The list is not exclusive and a court may determine that other factors are relevant in a particular case. See Thayer v. Wells Fargo Bank, 92 Cal. App. 4th 819, 834 (2001) (stating that there is "no hard-and-fast rule limiting the factors that may justify an exercise of judicial discretion to increase or decrease a lodestar calculation"). 5

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million. While the jury did award judgment to defendant in two claims, it is clear that plaintiff is a prevailing party. In fact, defendant does not oppose plaintiff's motion on this ground. B. Discretionary Award

The court also finds that it may properly exercise its discretion to award fees. No special circumstances exist here to suggest otherwise. C. Reasonable Fee 1. Attorney Billing Rate

Plaintiff seeks to recover attorneys' fees at the following rates: (1) Trial Counsel Lawrance A. Bohm ("Bohm"), $375 per hour; (2) Joseph Earley, III ("Earley"), $400 per hour; and (3) Charles Moore ("Moore"), $450 per hour. Defendant only opposes the hourly rate for Charles Moore. However, the court finds both Earley's and Moore's hourly rates to be excessive. Specifically, there are no grounds for counsel who assisted trial counsel to bill at a rate higher than that for which trial counsel billed. For this reason, the court reduces Earley and Moore's hourly rates to $375. 2. Number of Hours a. Defendant's Arguments

Defendant raises several concerns about the number of hours billed by plaintiff. First, defendant argues that it should not be responsible for any fees incurred due to inefficiencies resulting from Charles Moore's replacement of Joseph Earley, III 6

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as co-counsel. Defendant does not, however identify any fees that demonstrate such an inefficiency. Further, plaintiff argues that there were no such inefficiencies. Accordingly, the court finds that defendant is not entitled to a reduction in the number of hours billed on this ground. Second, defendant argues that there was no reason for both Bohm and Earley to travel to Albuquerque, New Mexico to take the deposition of Nicole McCollum. Plaintiff contends that it was necessary for both counsel to attend this deposition because "Earley's attendance was required to assist with preparation, strategizing the day before as well as on the spot." Reply at 34. Plaintiff continues to state that he reasonably believed that he would require Earley's assistance "as a back up in case there was any problem attending or completing the deposition" "[d]ue to the remote location of the deposition." Plaintiff concludes noting that defendant had two counsel at every deposition. The court is not persuaded that two counsel were necessary at this deposition. Plaintiff has not explained why the remote location of the deposition in any way required the attendance of two attorneys. Further, plaintiff has provided no information asidw from geography as to why this deposition required two counsel when every other deposition only required one. For this reason, the court deducts the hours billed by Earley to attend this deposition. Third, defendants argue that it was unreasonable for Earley to spend 16.5 hours accompanying a witness from Northern 7

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California so that he could testify at trial. Plaintiff states that it was necessary for Earley to do so because this witness was suffering serious medical problems. Specifically, plaintiff contends that the medical concerns "made interviewing and preparing Mr. Gasero complicated and challenging." Plaintiff has not, however, provided any indication that Earley was doing legal work while accompanying this witness. In particular, plaintiff has not demonstrated that a paralegal would not have been capable of performing the same tasks as Earley. For this reason, the court reduces Earley's lodestar for these 16.5 hours to $100, the rate billed by paralegals. Fourth, defendant argues that Bohm engaged in significant "overkill" in his trial presentation. Specifically, defendant contends that much of plaintiff's trial brief concerned matters outside the scope of the trial and most of his exhibits were not used in the case. The court finds that plaintiff's trial preparation was not so excessive to cause a reduction in fees. However, as described below, the fee request is reduced as a result of numerous problematic time entries not identified by defendant. Fifth, defendant argues that many of the fees billed in this case concerned work done in Kell v. AutoZone, and is therefore not properly billed here. Defendant, however did not identify which entries should be stricken on this grounds, but rather challenges that the time spent on document review should be reduced. The court is troubled by many time entries listed by 8

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plaintiff which appear to be related to the Kell matter. These include numerous telephone calls with Kell (see, e.g., entries dated 1/8/10, 1/10/10, 1/11/10, 1/14/10, 1/19/10, 1/21/10, 1/27/10, 2/2/10, 2/9/10). The court cannot determine from plaintiff's fee petition whether he has double-billed work done in Kell and in Cosby. Nonetheless, the court declines to reduce plaintiffs' fees on this ground because the defendant and counsel for defendant are identical in both cases and defendant failed to identify any instances of double billing. The court trusts, although somewhat reluctantly, that counsel for defendant would have provided such evidence of double billing if it existed. b. The Court's Concerns

There are several time entries in plaintiff's application that cause the court serious concern. These include time entries for events at the court where the court knows that plaintiff has over-billed and several entries which appear to the court to be unreasonable. "[T]rial courts must carefully review attorney documentation of hours expended; `padding' in the form of inefficient or duplicative efforts is not subject to compensation." Ketchum v. Moses, 24 Cal. 4th 1122, 1132 (2001). Even in civil rights cases, a trial court may "reduce the award or deny one altogether" if the fee request "appears unreasonably inflated." Chavez v. City of Los Angeles, 47 Cal. 4th 970, 990

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(Cal. 2010) (quoting Serrano v. Unruh,2 32 Cal. 3d 621, 635 (1982)); see also PLCM Group, Inc. v. Drexler, 22 Cal. 4th 1084, 1095 (2000). Here, it appears that plaintiff's counsel spent excessive time on various tasks related to the litigation, which are described below. In an effort to compensate for the known overbilling, duplication of effort as a result of having three attorneys working on the case, as well as any additional "padding" in the fee petition that the court was unable to ascertain, the court will reduce plaintiff's fees by 10% acrossthe board. See Cal. Common Cause v. Duffy, 200 Cal. App. 3d 730, 752-54 (1987) (reducing award by 50% based on duplication of effort, requests for compensation for time spent on media relations, and unnecessary adversarial "skirmishes"); see also Schwarz v. Secretary of Health & Human Services, 73 F.3d 895, 905 (1995); Gates v. Deukmejian, 987 F.2d 1392, 1400 (9th Cir. 1992). i. Bohm Known Exaggerated Fee Requests

The California Supreme Court provided several examples of situations warranting such reductions. Serrano, 32 Cal. 3d 635 n.21 (citing Copeland v. Marshall, 641 F.2d 880, 902-903 (1979) (stating that compensation is unavailable for hours spent litigating issues on which plaintiff did not prevail or where attorneys' efforts are unorganized or duplicative); Gagne v. Maher, 594 F.2d 336, 345 (1979) (finding that district court did not abuse its discretion by reducing fee award based on excessive time spent litigating a relatively simple case); Farris v. Cox, 508 F. Supp. 222, 227 (N.D. Cal. 1981) (reducing fee award for "overreaching" on fee petition).

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(1) (2) (3) (4)

10/26/09: Attend final pretrial conference3: 1.1 1/29/10: Attend Cosby trial: 8.0 2/5/10: Attend Cosby trial: 8.0 2/12/10: Attend trial for jury deliberation and verdict: 8.0

Moore (1) 1/28/10: Attendance at Cosby trial: 8.0 (2) 1/29/10: Attendance at Cosby trial: 8.0 (3) 2/5/10: Attendance at Cosby trial: 8.0 Torres (paralegal) (1) 1/28/10: Attend trial: 8.0 (2) 1/29/10: Attend trial: 8.0 (3) 2/4/10: Attend trial: 8.0 Jennings (paralegal) (1) 3/9/10-4/14/10: Research, verify and document Cosby Billing records for attorney fee motion: 137.0 ii. (1) Dubious Fee Requests

1/8/07: Research Regulations and Statutes Re Admin Exhaustion: 2.8 (2) 3/6/08: Review court documents commencing removal and instructions for further proceedings in federal court: 3.4 (3) 7/28/08: Review Status Order: 3.9 (4) 4/7/09: Review seven notices of deposition: 0.7 (5) 5/7/09: Prepare draft mid litigation statement (only law and motion matter concerned whether a defendant should be dismissed as "fraudulent"): 0.7 (6) 6/29/09: Review M. Nelson, M.D. Exhibits: 4.4 (7) 8/17/09: Review Deposition of Bonnie Shaw in preparation for pretrial statement: 3.8 (8) 8/18/09: Review Deposition of Rick Smith in preparation for pretrial statement: 5.2 (9) 8/19/09: Review Deposition of Kathy Pope in preparation for pretrial statement: 1.4 (10) 8/19/09: Review Deposition of Dr. Marcia Nelson in preparation for pretrial statement: 1.1 At oral argument, plaintiff's counsel expressed that many of these entries represent the correct number of hours, yet were sloppy records. For example, when he wrote "Attend final pretrial conference," he included billing for hours preparing for the conference. The court cannot correct for the sloppiness of plaintiff's counsel. Counsel testified under penalty of perjury only that they engaged in certain conduct. It is not appropriate for the court to infer preparation and other activity based on the representations of plaintiff's counsel at oral argument. 11
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(11) 8/19/09: Review Deposition of Nicole McCollum in preparation for pretrial statement: 4.2 (12) 8/20/09: Review Deposition of Sheri Lemond in preparation for pretrial statement: 3.4 (13) 8/21/09: Review Deposition of Steve Bender in preparation for pretrial statement: 1.2 (14) 9/11/09: Review sample pretrial statements from other federal cases pulled from PACER: 6.4 (15) 9/21/09-9/28/09: Prepare case summary: 19.4 (16) 11/13/09: Review Nazir v. United Airlines - For Opposition to Defendant Reply: 5.6 (17) 1/22/10: Billed 19.1 hours in one day. iii. Travel Time

8 9 10 11 The travel billing rates were not reduced by 50%. Rather, 12 plaintiff billed for travel at their full lodestar. 13 iv. Conclusion 14 As an initial matter, the court reduces the lodestar for 15 travel time by 50%. 16 Further, in light of the problems identified above, the 17 court intends to reduce the lodestar of all attorneys and 18 paralegals by 10%. The court finds that doing so is appropriate 19 in light of the problems it identifies above. This reduction is 20 in addition to any specific reductions discussed in this order. 21 3. 22 Defendant argues that the hours billed by plaintiff's 23 paralegals should not be recovered because they performed 24 administrative functions for plaintiff's office. Defendant also 25 argues that they should not be recovered because only one of the 26 12 Paralegal Hours (1) (2) (3) 5/25/09: Travel to Albuquerque, NM for McCollum Depo: 9.0 6/29/09: Travel to Ontario for Deposition of Rick Smith: 4.0 6/29/09: Travel time from Ontario: 4.0

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three paralegals is specifically trained as a paralegal. These arguments are without merit. Plaintiff's paralegals performed functions specific to this case, such as interviewing witnesses and attending trial. These fees are recoverable. Additionally, the rate of $100 per hour for paralegal time is a reasonable rate in Sacramento. 4. Expert Costs

Defendant argues that plaintiff should not recover costs from its expert, Dr. Mahla, because his testimony concerned plaintiff's past and future economic losses resulting from his termination. The jury found against plaintiff on grounds that his termination was unlawful. Plaintiff does not provide any substantive response to this argument. Plaintiff is only entitled to recover fees and costs relating to claims upon which it prevailed. Again, the parties do not provide sufficient information upon which the court can decide whether these costs should be awarded to plaintiff. Plaintiff is thereby ordered to file a statement within twenty-one (21) days of the issuance of this order explaining why Dr. Mahla's expert report and/or testimony were related to the claims upon which judgment was entered in his favor. Defendant may file a response to this statement within fourteen (14) days of service of plaintiff's statement. D. Multipliers

Plaintiff seeks a multiplier of 2 of the lodestar rates for attorneys' fees incurred prior to trial. Plaintiff contends that 13

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he is entitled to an increase in attorneys' fees because of "the contingent nature of the fee award, the novelty and difficulty of the issues presented, and the quality of representation." Application at 8. The court is not persuaded. "[T]he trial court is not required to include a fee enhancement to the basic lodestar figure for contingent risk, exceptional skill, or other factors. . . . In each case, the trial court should . . . consider the degree to which the relevant market compensates for contingency risk, extraordinary skill, or other factors under Serrano [v. Priest]. . . . [W]hen determining the appropriate enhancement, a trial court should not consider these factors to the extent they are already encompassed within the lodestar." Ketchum, 24 Cal. 4th at 1138. As for the contingency risk, the court finds that the hourly rate that counsel will be awarded is "higher than a fee for the same legal services paid as . . . performed" in light of the apparent padding and, thus, the risk is encompassed within the original lodestar and a fee enhancement would be inappropriate. See Ketchum, 24 Cal. 4th at 1132. As to difficulty and novelty, there is no novelty in this case plaintiff did not change the law or expand the coverage of FEHA or bring a sort of case that has never been brought before. Further, prevailing parties are not entitled to a multiplier merely because they were busy during trial - such is the norm. Lastly, while plaintiff's counsel achieved a great result for their client, the quality of representation does not warrant 14

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enhancement of the lodestar in this case. Plaintiff's counsel did not demonstrate exceptional skills "beyond those that might be expected of attorneys of comparable expertise or experience." Weeks v. Baker & McKenzie, 63 Cal. App. 4th 1128, 1176 (1998); see also Ketchum, 24 Cal. 4th at 1139 ("[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 . . . ."). Plaintiff has not shown that the results obtained justify a fee enhancement. This is especially so when it appears to the court highly likely that plaintiff has padded his fee petition. Defendant moves to decrease the fees sought by plaintiff by 50% because plaintiff lost on two of his claims. Defendant contends that these claims were the ones that required the most work. However, the only specific item that defendant challenges as not appropriate on this ground is the expert report discussed above. The court cannot determine which efforts plaintiff exhausted in pursuing the unsuccessful claims. In fact, it appears to the court that the unsuccessful claims are strongly related to the successful ones. Because defendant cannot refer the court to any specific entries that are problematic because they only concern unsuccessful claims, the court declines to reduce the amount of fees sought by plaintiff on this ground. IV. CONCLUSION For the foregoing reasons, the court ORDERS that plaintiff 15

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SHALL FILE a statement within twenty-one (21) days of the issuance of this order explaining why Dr. Mahla's expert report and/or testimony were related to the claims upon which judgment was entered in his favor. Defendant may file a response to this statement within fourteen (14) days of service of plaintiff's statement. Upon receipt of these briefs, the court will calculate plaintiff's fee award. The court intends to stay the fee award in this case pending resolution of defendant's appeal. The parties may indicate any objections to the court doing so along with their briefing on the expert question. IT IS SO ORDERED. DATED: December 15, 2010.

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