Rodas et al v. McCullough

Filing 36

ORDER by Judge Hamilton granting 30 Motion for Attorney Fees (pjhlc1, COURT STAFF) (Filed on 9/26/2013)

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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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VICTOR RODAS, et al.,

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For the Northern District of California

United States District Court

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Plaintiffs,

No. C 12-2541 PJH

v.

ORDER GRANTING MOTION FOR
ATTORNEY’S FEES

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ROBERT MCCULLOUGH,

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Defendant.
_______________________________/

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Now before the court is the motion of defendant Robert McCullough (“defendant”) for

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attorney’s fees accrued as a result of a civil action brought by plaintiffs Victor Rodas, Alex

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Rodas, Edy Rodas, Yoni Rodas, Nelson Herrera, and Arnold Mendez (“plaintiffs”). Having

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carefully reviewed defendant’s papers and considered his arguments and the relevant legal

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authority, and good cause appearing, the court hereby GRANTS defendant’s motion for the

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following reasons.

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BACKGROUND
On April 9, 2012, plaintiffs filed a complaint against defendant and unnamed parties,

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asserting twelve causes of action. The complaint’s tenth cause of action, “Wrongful

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Termination in Violation of Public Policy,” includes five “counts.” Cplt ¶ 71-87. One of

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these “counts” alleges infringement of “Public Policy Based on Violation of California’s Anti-

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Discrimination Laws.” Id. ¶ 71-73. This “count” derives from the public policy enshrined in

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California’s Fair Employment and Housing Act (FEHA). Id. ¶ 72.

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On May 17, 2012, defendant removed the case to federal court, alleging federal

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question jurisdiction. The parties participated in a mediation on January 22, 2013, but were

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unsuccessful in reaching a settlement. On May 1, 2013, plaintiffs’ attorneys filed a motion

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to withdraw as counsel, citing irreconcilable differences between themselves and plaintiffs.

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Counsel contended that pursuant to the written representation agreement, costs incurred in

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the litigation were to be paid by the clients; and that they had requested payment for the

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costs incurred for the mediation, but plaintiffs had not made the payment. Counsel also

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claimed that they had learned of disabling conflicts between some of the plaintiffs, as well

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as other matters that they were prohibited from disclosing, but which prevented them from

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continued representation of plaintiffs under a number of California Rules of Professional

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For the Northern District of California

United States District Court

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Conduct.
Counsel advised that the plaintiffs wished to proceed with the case, and had

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indicated that they were actively searching for new counsel to represent them and

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consented to represent themselves in pro se until then. Counsel added that while they had

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previously obtained verbal agreement to substitute plaintiffs in pro se, plaintiffs had been

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“unable to deliver the written substitutions provided to them.”

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The court set a hearing on the motion for June 5, 2013, and directed plaintiffs’

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counsel to serve each of the plaintiffs with the court’s order, which specifically ordered the

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personal appearance of all the plaintiffs and their counsel. Notwithstanding having been

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served with the order, all plaintiffs failed to appear. The court then ordered plaintiffs to

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attend a mandatary case management conference scheduled for July 11, 2013. When the

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conference was convened, however, plaintiffs again failed to appear.

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On July 12, 2013, the court granted the motion to withdraw, and dismissed the case

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under Federal Rule of Civil Procedure 41(b) for failure to prosecute and failure to follow

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court orders. The court specifically found that dismissal was warranted under the factors

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articulated by the Ninth Circuit in Malone v. United States Postal Service, 833 F.3d 128,

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130 (9th Cir. 1978). Defendant now moves pursuant to California Government Code

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Section 12965(b) for an order directing plaintiffs to pay defendant’s attorney’s fees, which

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total $32,005.90
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DISCUSSION

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A.

Legal Standard
A court may award “reasonable attorney’s fees and costs” to the prevailing party in a

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FEHA case. Cal. Gov’t Code § 12965(b). A party prevails when it has received “at least

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some relief on the merits of the claim.” Hewitt v. Helms, 482 U.S. 755, 760 (1987). A Rule

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41 involuntary dismissal “operates as an adjudication on the merits” unless “the dismissal

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states otherwise” or relates to a “lack of jurisdiction, improper venue, or failure to join a

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party.” Fed. R. Civ. P. 41(b).

borrowed the Christiansburg standard from federal Age Discrimination in Employment Act

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For the Northern District of California

To determine when FEHA fee shifting is appropriate, California courts have

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United States District Court

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(ADEA) and Title VII cases. Cummings v. Benco Building Services, 11 Cal. App. 4th 1383,

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1386 (1992). Under this standard, a prevailing defendant’s fees shift when the action in its

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entirety (not just the FEHA claim) was “frivolous, unreasonable, or without foundation, even

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though not brought in subjective bad faith.” Christiansburg Garment Co. v. EEOC, 434

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U.S. 412, 433 (1978); Jersey v. John Muir Med. Ctr., 97 Cal. App. 4th 814, 832 (2002).

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Before shifting fees, courts also consider the defeated plaintiff’s capacity to pay. Villanueva

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v. City of Colton, 160 Cal. App. 4th 1188, 1203 (2008).

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If fee shifting is appropriate, it is only for those fees that are “reasonable.” Cal. Gov’t

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Code § 12965(b). Under the lodestar method, reasonable fees are those that the moving

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party shows represent “the number of hours reasonably expended on the litigation

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multiplied by a reasonable hourly rate.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1980).

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B.

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Defendant’s Motion for Attorney’s Fees
Defendant’s fee shifting motion is viable because California Government Code

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Section 12965(b) authorizes fee shifting in FEHA litigation, and plaintiffs stated a FEHA

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claim in their complaint. Section 12965(b) states, “In civil actions brought under [FEHA],

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the court, in its discretion, may award to the prevailing party . . . reasonable attorney’s fees

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and costs. . . .” To award attorney’s fees under this section, the court must determine

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(1) whether defendant is a “prevailing party,” (2) whether plaintiff’s action was “frivolous,
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unreasonable, or without foundation,” and (3) whether defendant’s attorney’s fees are

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“reasonable.” See Cal. Gov’t Code § 12965(b); Cummings, 11 Cal. App. 4th at 1386.

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As for the first determination, the court finds defendant is a prevailing party by virtue

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of the order dismissing plaintiffs’ case pursuant to Rule 41(b). To prevail, a party must win

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on the merits. Hewitt, 482 U.S. at 760. In dismissing plaintiffs’ case, the court did not

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examine the merits of plaintiffs’ case. Rather, the dismissal was for plaintiffs’ failure to

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prosecute and failure to follow court orders. The court acknowledged as much in the

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course of the order by reasoning that dismissal was appropriate even though “public policy

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may generally favor disposition on the merits.”
Rule 41, however, creates a fiction whereby even dismissals not based on the merits

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For the Northern District of California

United States District Court

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operate as if on the merits unless the dismissing court states otherwise. See Fed. R. Civ.

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Pro. 41(b) (“[u]nless the dismissal order states otherwise, a dismissal order under

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. . . this rule . . . operates as an adjudication on the merits.”) In the order dismissing

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plaintiffs’ case, the court did not “state[ ] otherwise.” See id. Thus, defendant is a

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prevailing party.

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As for the second determination, the court finds that plaintiffs’ case was “without

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foundation.” See Christiansburg, 434 U.S. at 433 (holding attorney’s fees awardable to a

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prevailing defendant where the action was “frivolous, unreasonable, or without foundation,

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even though not brought in subjective bad faith.”). In addition to failing to attend court

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mandated hearings and settlement conferences, plaintiffs failed to respond to the motion

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for attorney’s fees. Plaintiffs’ failure to respond provides the court with no evidence to

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support the claims and assertions found in plaintiffs’ complaint. This applies to all the

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claims in plaintiffs’ complaint, not just the FEHA claim. See Jersey, 97 Cal. App. 4th at 832

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(holding the Christiansburg determination must be made toward the entirety of the action,

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and not just the FEHA claim). Thus, the court finds this case meets the Christiansburg

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standard for shifting a prevailing defendant’s fees.

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Relatedly, because plaintiffs did not respond to defendant’s motion, the court has no
basis upon which to determine that plaintiffs cannot afford to pay defendant’s fees. See
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Villanueva, 160 Cal. App. 4th at 1203 (upholding fee shifting where there was no evidence

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regarding the inability of plaintiffs to pay).

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Finally, as for the third determination, the court finds that defendant’s fees are

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reasonable. Over the course of sixteen months of litigation, defendant’s fees totaled

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$32,005.90. The total consists of fees from work performed by defendant’s lead counsel

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(who charged a rate of $450 an hour), and a junior associate (who charged rates of $125

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and $175 an hour), and of a onetime $971.88 outlay to a mediator for the failed January

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2013 mediation. The court examines the fees according to the lodestar method and finds

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them reasonable for a number of reasons.
First, defendant’s counsel has provided the court with a declaration wherein he

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For the Northern District of California

United States District Court

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asserts the reasonableness of his fees, and plaintiffs have not challenged the assertion.

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See Declaration of Mark C. Peters, at ¶ 5.

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Second, defendant’s counsel actually billed to defendant the fees sought in this

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motion. See Peters Decl., Ex. D. Much of this billing took place long before defendant

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could have known he would prevail and be able to avail himself of fee shifting under

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Section 12965(b).

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Third, the fees fluctuate with the amount of work one would expect at certain points

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in the case. For instance, the period when defendant’s counsel billed the most was in

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January 2013, which corresponds with the period when the parties were preparing for and

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attending the mediation.

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Fourth, the court takes notice that the rates charged by defendant’s counsel are

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comparable to published prevailing rates. For instance, as of 2011, the median hourly rate

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for attorneys practicing consumer law in California was $412. See 2010-2011 U.S.

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Consumer Law Attorney Survey Report (available at

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http://www.lb7.uscourts.gov/documents/ILSD/11-53.pdf). The court finds that the labor and

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employment law issues raised in this case are comparable to many of the consumer law

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issues raised in cases within the district. Thus, the rate defendant’s lead counsel charged

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for his work is not unreasonable in comparison to prevailing rates.
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CONCLUSION
For the forgoing reasons, the court hereby GRANTS defendant’s motion for
attorney’s fees.

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IT IS SO ORDERED.

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Dated: September 26, 2013
______________________________
PHYLLIS J. HAMILTON
United States District Judge

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For the Northern District of California

United States District Court

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