Scott v. Pro's Choice Beauty Care, Inc.

Filing 56

SUPPLEMENTAL ORDER REGARDING ATTORNEY'S FEES IN CLASS ACTION SETTLEMENT by Judge Alsup granting in part and denying in part 47 Motion for Attorney Fees (whalc1, COURT STAFF) (Filed on 1/26/2010)

1 2 3 4 5 6 7 8 9 10 BONNIE SCOTT, an individual, on behalf of herself, and all others similarly situated, Plaintiff, v. PRO'S CHOICE BEAUTY CARE, INC., a Delaware corporation with its principal place of business in the State of New York, Defendant. / No. C 08-04697 WHA CLASS ACTION SUPPLEMENTAL ORDER REGARDING FINAL APPROVAL OF SETTLEMENT AGREEMENT IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

United States District Court

11
For the Northern District of California

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On January 26, 2010, the undersigned granted final approval of the settlement agreement in this certified class action involving allegedly under-compensated employees of Pro's Choice Beauty Care, a company that sells beauty products throughout California (Dkt. No. 55). This supplemental order, filed in conjunction with the order granting final approval of the settlement, addresses class counsel's request for an award of $105,000 in attorney's fees and costs. For the reasons set forth below, an award of $97,073 is GRANTED. As part of the settlement agreement, defendant agreed to pay class counsel up to $105,000 for attorney's fees, costs, and expenses. This award was separate from the $400,000 allocated to class members. "That the defendant in form agrees to pay the fees independently of any monetary award or injunctive relief provided to the class in the agreement does not detract from the need carefully to scrutinize the fee award." Staton v. Boeing Co., 327 F.3d 938, 964 (9th Cir. 2003).

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Thus, even if defendant does not dispute an award of $105,000 in attorney's fees, the undersigned must still ensure that the fee amount is reasonable. Lobatz v. U.S. West Cellular of California, Inc., 222 F.3d 1142, 1148 (9th Cir. 2000). Where attorney's fees are not awarded from a common fund, a reasonableness inquiry begins with a lodestar analysis. Boeing, 327 F.3d at 965. The lodestar is calculated by "multiplying the number of hours the prevailing party reasonably expended on the litigation by a reasonable hourly rate." Ibid. (citations omitted). Both the hours expended and the billing rate employed should be supported by adequate documentation and other evidence; thus, attorneys working on cases where a lodestar may be employed should keep records and time sheets documenting their work and time spent. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir. 1998). Then, if circumstances warrant it, the lodestar may be adjusted upwards or downwards to account for other factors which are not subsumed within it. Ibid. Three entities provided legal services to plaintiff and class members in this litigation: (1) Clark & Markham LLP, (2) United Employees Law Group, and (3) the Law Offices of Barron E. Ramos. Each entity submitted declarations setting forth attorney qualifications, their individual billing rates, a listing of all tasks performed by each attorney (or paralegal) showing the time spent on the matter, and a summary of fees by timekeeper. Clark & Markham, who served as lead counsel in this case, also submitted a list of billable costs. The following table summarizes the timekeeper and billable cost information reported by Clark & Markham (Markham Decl. Exh. 2):
NA M E David R. Markham James M. Treglio Todd White POSITION Partner Associate Paralegal HOURS 65.70 156.70 23.80 RATE $575.00 $275.00 $150.00 TOTAL FEES ADDITIONAL BILLABLE CHARGES TOTAL INCLUDING COSTS TOTAL $37,777.50 $43,092.50 $3,570.00 $84,440.00 $6,540.61 $90,980.61

United States District Court

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For the Northern District of California

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The United Employees Law Group, a boutique employment litigation firm who was initially contacted by plaintiff and worked alongside Clark & Markham throughout the litigation, also submitted a detailed, itemized fee declaration, summarized below (Haines Decl. Exh. 5):
NA M E Walter Haines POSITION Attorney HOURS 13.3 RATE $400.00 TOTAL $5,320.00

Finally, the Law Offices of Barron E. Ramos submitted a fee declaration for the legal services performed, summarized below (Ramos Decl. Exh B):
NA M E Barron E. Ramos POSITION A ttorney HOURS 34.0 RATE $550.00 TOTAL $22,825.00

United States District Court

11
For the Northern District of California

To determine whether the hours and billing rates reported by counsel are reasonable, an examination of supporting documentation and other evidence is appropriate. Hanlon, 150 F.3d at 1029. In this case, both Clark & Markham and the United Employee Law Group provided -- for the most part -- sufficiently detailed time records, broken down by date and individual tasks, and accompanied by reasonably detailed task descriptions. Attorney Ramos, however, did not provide this level of detail. Rather, Attorney Ramos' fee declaration summarized attorney's fees by category, without showing the time spent on individual tasks. The entirety of this billing information is reproduced below (Ramos Decl. Exh B):
CATEGORY Correspondence Pleadings Document Analysis LEGAL SERVICES PROVIDED Draft and revise and/or respond to correspondence and e-mail to co-counsel Analysis and review of complaint, initial disclosures, discovery propounded and responses thereto Review and analyze plaintiff's employment documents and paystubs; review and analyze voluminous documents produced by defendant re analysis of class data; assist in case valuation; crafted the additional theory of unpaid reporting time Analysis of Stipulation and related Exhibits; draft and revise decl in support of final approval TOTAL HOURS TOTAL FEES @ $550/HR TIME 2.5 2.0 34.0

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Settlement

3.0 41.5 $22,825.00

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Based upon the information above, it is impossible to gauge the reasonableness of the time spent by Attorney Ramos performing "document analysis" in this case. This is a crucial inquiry, given that it represents nearly $19,000 in attorney's fees, and over 15% of class counsel's proposed lodestar. While Attorney Ramos' twelve years of experience as a litigator lends reasonable credence to his hourly rate, he should have known better than submit a fee declaration impervious to a meaningful reasonableness analysis. Inadequate documentation has long been a proper basis to reduce the number of "reasonable hours" in a lodestar determination. In re Washington Public Power Supply System Securities Litigation, 19 F.3d 1291, 1305­6 (9th Cir. 1994) (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). This is because the party petitioning for attorney's fees "bears the burden of submitting detailed time records justifying the hours claimed to have been expended." Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210 (9th Cir.1986). Attorney Ramos has not meet this burden with respect to his "document analysis" time records. As such, the time attributed to "document analysis" work shall be reduced to ten hours, based upon a reasonable allocation of 2.5 hours for each of the four "document analysis" tasks listed. The total lodestar attributable to Attorney Ramos, therefore, is reduced to $9,625.00. By contrast, a line-by-line review of United Employees Law Group's fee declaration reveals no unreasonable billing judgment -- indeed, it is the most detailed fee declaration among the three provided. A detailed review of Clark & Markham's fee declaration, however, reveals a number of insufficiently documented entries. For example, "Review Documents" is provided as a task description for over 19 hours of work by Attorney Treglio, who bills at a rate of $275/hour. Some of these entries are as short as one hour, while others are as long as six. Given that no description whatsoever is provided for the type or subject matter of these documents, the Court cannot gauge whether this time spent was reasonable.1 Additionally, a billing task appears on October 8, 2009, with the description "calls w/co-counsel re new case; conf call client" for 4.5 hours of Attorney Markham's time. From this description, it is unclear what "new case" this task This lack of specificity, however, is the exception rather than the norm in Clark & Markham's declaration. Indeed, most entries in the declaration sufficiently describe the type of documents being drafted or reviewed.
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United States District Court

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For the Northern District of California

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relates to, and whether class counsel may be seeking attorney's fees for time spent developing new business. Due to these inadequate task descriptions, Clark & Markham's lodestar will be reduced by $7,812.50, which reflects a reduction of 19 hours attributed to Attorney Treglio, and 4.5 hours attributed to Attorney Markham. Therefore, the total lodestar for all three billing entities, adjusted to account for inadequate time reporting, now becomes:
NA M E David R. Markham James M. Treglio Todd White Walter Haines Barron E. Ramos POSITION Partner Associate Paralegal Attorney A ttorney HOURS 61.20 137.70 23.80 13.3 17.5 RATE $575.00 $275.00 $150.00 $400.00 $550.00 TOTAL $35,190.50 $37,867.50 $3,570.00 $5,320.00 $9,625.00 $91,573.00

United States District Court

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For the Northern District of California

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TOTAL LODESTAR

With respect to counsel's claimed costs, the declaration submitted by counsel generally reflect reasonable expenditures. For example, counsel's use of low-cost air carriers (Southwest and Virgin America), public transportation (BART), and low-cost hotel booking services (Priceline) does not raise any questions of unreasonableness. Counsel's largest cost expenditures are approximately $2000.00 billed to "Lexis" -- which is presumably legal research -- and a $775.00 fee for "Expert," whose identity is unclear. Indeed, a handful of counsel's cost entries are like "Expert" in that they lack sufficient descriptions to be reviewable. For example, a generic "Research" charge of $212.00 appears for June 30, 2009, preceeded by four charges to the "LA Superior Court." Being that this action is set in the Northern District of California, these latter charges -- without additional explanation -- do not appear justified. Additional unclear cost entries, such as the "04.21.09" charge appearing on March 23, 2009, necessitate a discount on counsel's requested costs. Taking into account these defective cost entries, counsel's awarded costs will be discounted from $6,540.61 to $5,500.00. The final inquiry is whether an upward or downward adjustment of the lodestar is appropriate. Several factors may be considered in making this determination, including the

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quality of the representation, the benefit obtained for the class, the complexity and novelty of the issues presented, and the risk of nonpayment. Hanlon, 150 F.3d at 1029. Having considered these factors, the undersigned finds that no departure -- upward or downward -- is warranted. As such, attorney's fees and costs are awarded to counsel in the amount of $97,073. CONCLUSION For the reasons stated above, it is hereby ordered that class counsel is awarded $91,573 in attorney's fees and $5,500 in costs, for A TOTAL AWARD OF $97,073 to be paid by defendant under the terms of the settlement agreement. The file shall remain open until counsel file a statement advising that all funds have been properly distributed and there is nothing left to do.

United States District Court

11
For the Northern District of California

IT IS SO ORDERED.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 Dated: January 26, 2010.

WILLIAM ALSUP UNITED STATES DISTRICT JUDGE