Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County. No. BC405848 Ann I. Jones, Judge.
Kingsley & Kingsley, Eric B. Kingsley, Elana R. Levine, Kelsey M. Peterson-More for Plaintiff and Appellant.
No appearance for Defendant and Respondent.
BOREN, P.J.
Plaintiff challenges the attorney fees awarded by the trial court following settlement of a class action lawsuit. He argues on appeal that a higher award is warranted. The trial court did not abuse its discretion in making its attorney fee award.
FACTS
In November 2008, Scott Knik sued Marriott International, Inc. (Marriott) in superior court. The complaint alleged a plaintiff class of all nonsalaried Marriott employees in the state of California. The lawsuit was removed to federal court. After discussions among the parties, Knik decided to limit the size of the proposed class. The federal case was dismissed without prejudice.
In January 2009, Knik filed the present action against Marriott. He alleged that Marriott violated the Labor Code by denying nonsalaried employees appropriate meal and rest periods, without providing compensation in lieu thereof. Knik brought suit on behalf of himself and all current and former nonsalaried employees at the Marriott in Anaheim, for compensation owing from November 2004 to the present.
Marriott is not participating in this appeal.
In April 2009, Knik filed a motion for preliminary approval of a class settlement. The gross settlement figure is $700,000. Of this amount, Knik asked that $5,000 be paid to him, as the class representative. The settlement contemplated that up to 30 percent of the gross settlement amount, or $210,000, would be allocated as attorney fees and costs. The remaining settlement money will be divided among approximately 1, 300 class members. The actual value of the class members’ unpaid time is $1,048,270. In the event that the court did not approve the full amount of attorney fees requested by class counsel, any remaining portion will be paid to class members.
According to plaintiff’s brief, once the court pleadings were filed, the parties conducted “informal discovery” to prepare for mediation. The mediation resulted in settlement. The signed joint settlement agreement was submitted to the court for its approval. Marriott denies any wrongdoing.
Knik is represented in this litigation by the law firm of Kingsley & Kingsley (the Firm). The Firm submitted declarations in support of the proposed settlement, describing the case as “extensively litigated including the production of documents, ” culminating in mediation and settlement. Counsel acknowledged that the law is unsettled regarding meal break claims, and will be addressed in two cases pending before the Supreme Court. To demonstrate its experience, the Firm listed 12 class action cases that it settled and requested attorney fees of 25 percent or more.
In May 2009, the court (Judge Victoria Chaney) granted preliminary approval to the settlement, finding that it falls within the range of reasonableness. At the hearing, the court observed that the amount of time the Firm spent analyzing the class members’ time records “doesn’t look like very much, ” and expressed concerns about the number of e-mails among the Firm’s attorneys. The court noted that the Firm was “asking for a whole lot of money and I’m really wondering what was done to justify that, ” opining that a $200,000 attorney fee award is “significant” relative to the total recovery of $700,000. The court scheduled a fairness hearing to determine whether the proposed settlement, attorney fees, and payment to the class representative should be finally approved.
In September 2009, plaintiff requested final court approval of the class settlement. He sought $210,000 in attorney fees; litigation costs of $15,583; $21,000 in class administrative costs; and $5,000 for himself. Knik stated that no objections were made to the settlement, and 717 claims were filed by class members who received notice of the proposed settlement.
Counsel declared that 231.9 hours of attorney time were spent on this litigation since its inception. The principal attorney, Eric Kingsley, charged $605 per hour for 77.7 hours ($47,000); seven associate attorneys charged between $250 and $485 per hour; and a law clerk billed out at $125 per hour. The actual fees already expended are $102,551.50. In addition, Eric Kingsley asked to be compensated for 15 future hours of his time plus 15 future hours for an associate, totaling $14,850, to prepare for the final approval hearing and to resolve any disputes. With the future hours, the aggregate fees are $117,401.50. The Firm maintained that its hourly rates reflect the reasonable market value of its legal services, based on its experience and expertise in handling complex employment litigation, including wage disputes. The Firm has incurred litigation costs of $15,583.
The Firm requested a multiplier of 2.05 to augment the award. It noted that the risk was great, because the law relating to meal break claims is unresolved. Further, the Firm expected a significantly higher fee than an attorney who is paid as the case goes along, win or lose. During the litigation, the Firm interviewed Knik; researched his employer and claims; drafted pleadings, discovery requests, a mediation brief and the motions for court approval of the settlement agreement; conducted informal discovery and reviewed documents produced by Marriott; appeared for hearings; had discussions with defense counsel; attended a mediation; helped draft the joint settlement agreement; and monitored the class claims, among other activities. The majority of the Firm’s charges are e-mails. The Firm explained that its work “is largely collaborative” and “many communications between the attorneys at [the Firm] are by way of email or group strategy meetings.”
The court (Judge Ann Jones) entered a final judgment on October 5, 2009. It found that the settlement was entered into in good faith, following arm’s-length negotiations, and the terms are fair, just, reasonable and adequate. It disallowed $73.75 in express mail delivery charges and computer research fees. With regard to attorney fees, the court indicated that it “reviewed carefully the declarations filed in support [of the fee request] as well as the hourly submissions.” The court found that “the amounts sought are not reasonable” because (1) some of the e-mails were not clearly related to this case, so 11.5 hours were deducted, and (2) the rates charged by the Firm are “excessive, ” in the court’s view, “in light of the particular lack of complexity of the instant case, the very short period of time in which this fairly routine wage and hour issue was adjudicated, and the overall duties and responsibilities assumed by each of these attorneys.” The court applied a multiplier of 1.1 because “this was a case of short duration. The risk was slight. These matters were relatively routine and at the end of the day it’s a fairly modest recovery for the claimants in this case.”
Using a lodestar of $84,692 and a multiplier of 1.1, the court awarded attorney fees of $93,161 to the Firm, plus actual costs of $15,509. No objection was made at the hearing to the court’s reduction of the requested attorney fees. This timely appeal was filed, challenging only paragraph 8 of the judgment, relating to the award of attorney fees.
DISCUSSION
Appeal is taken from the judgment. (Code Civ. Proc., § 904.1, subd. (a)(1).) “An appellate court reviews an award of attorneys’ fees in the settlement of a class action under an abuse of discretion standard.” (7-Eleven Owners for Fair Franchising v. Southland Corp. (2000) 85 Cal.App.4th 1135, 1164; Lealao v. Beneficial California, Inc. (2000) 82 Cal.App.4th 19, 25.) “We do not reweigh the evidence or substitute our notions of fairness for the trial court’s.” (Cho v. Seagate Technology Holdings, Inc. (2009) 177 Cal.App.4th 734, 743.) The trial court has “‘wide latitude’” in making the attorney fees award, and an appellate court will not interfere with the lower court’s determination unless it is “‘clearly wrong’” and there has been “‘a manifest abuse of discretion.’” (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.)
“[T]he fee setting inquiry in California ordinarily begins with the ‘lodestar, ’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate, ” which is the rate “prevailing in the community for similar work.” (PLCM Group, Inc. v. Drexler, supra, 22 Cal.4th at p. 1095.) The amount of time spent on a case-and the reasonable value of that time-is “‘fundamental to a determination of an appropriate attorneys’ fee award.’” (Ibid.) “The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided.” (Ibid.) After the trial court has calculated the lodestar, “‘it shall consider whether the total award so calculated under all of the circumstances of the case is more than a reasonable amount and, if so, shall reduce the... award so that it is a reasonable figure.’” (Id. at pp. 1095-1096.) In arriving at a “‘reasonable figure’” for an award of attorney fees, the trial court uses “‘its own expertise.’” (Id. at p. 1096.)
The lodestar produced by multiplying hours spent by a reasonable hourly rate “may then be increased or reduced by application of a ‘multiplier’ after the trial court has considered other factors concerning the lawsuit.” (Press v. Lucky Stores, Inc. (1983) 34 Cal.3d 311, 322.) The factors the trial court may consider to determine whether to augment or diminish the lodestar include: “‘(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them; (3) the extent to which the nature of the litigation precluded other employment by the attorneys; (4) the contingent nature of the fee award.’” (Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 579; Press v. Lucky Stores, supra, 34 Cal.3d at p. 322, fn. 12; Serrano v. Priest (1977) 20 Cal.3d 25, 49.)
Two different trial judges closely examined the Firm’s request for attorney fees. First, Judge Chaney reviewed the Firm’s records and expressed doubts about the fee request when it granted preliminary approval to the proposed settlement. Later, Judge Jones examined the billing records when plaintiff sought final approval for the settlement. After reviewing the billing and the costs records with a fine-tooth comb-and ferreting out some unjustified charges-the court formed the impression that the Firm spent relatively little time reviewing evidence or conducting research.
The Firm’s billing records support the trial court’s impressions. The vast majority of the Firm’s charges arise from e-mail communications between the Firm’s lawyers, all billed in small increments. Almost none of the billing entries relate to discovery or legal research. It appears that the Firm’s prior experience in employment-related class actions is so extensive that its lawyers are already familiar with the controlling legal principles, and did not need to perform additional research for this particular case. With respect to the evidence, a brief period (.50) was spent reviewing documents from Knik, on July 21, 2008. An even briefer period (.20) was spent reviewing documents from defense counsel on February 20, 2009. From there, the case moved directly to mediation and settlement. The Firm did not seek class certification from the court.
An expert apparently spent time analyzing time records, which is subsumed in the ledger for litigation costs.
Under the circumstances, the trial court could conclude that the reasonable value of the time spent on the case was $93,161. The case was litigated for less than one year, for a total of some 230 hours (or 28 eight-hour days) spread among eight attorneys and a law clerk. This appears to have been a routine case for the Firm, not a difficult or complex one. The small increments of time spent on it by the various lawyers certainly would not have precluded other employment while the case was pending. Given the Firm’s minimal investment of time, it did not face a substantial risk of financial loss by the time it settled the case. For this reason, the trial court was justified in using a small multiplier. (Compare Coalition for L.A. County Planning etc. Interest v. Board of Supervisors (1977) 76 Cal.App.3d 241 [multiplier of 2.1 used after extensive discovery was conducted and following a 10-day trial].)
We do not mean to criticize the Firm’s efforts in this litigation. On the contrary, we applaud its efficiency in achieving a favorable result with relatively little effort and virtually no expenditure of judicial resources. However, we cannot see any improper methodology, gross unfairness, or “palpable abuse of discretion” by the trial court. (Press v. Lucky Stores, supra, 34 Cal.3d at p. 324.) In the Press case, the trial court awarded grossly inadequate fees of $112.98 to attorneys who spent 181.5 hours to vindicate the plaintiffs’ constitutional rights of free expression and petition, i.e., a compensation rate of 62 cents per hour. (Id. at pp. 316-319.) By contrast, the Firm received $93,161 for about 230 hours of work: that works out to over $3,240 per day (or $405 per hour) for 28 days of work over the course of one year, in three different courts, both state and federal. Given the trial court’s wide latitude in fashioning an award that it deems fair, we cannot say that the court abused its discretion.
DISPOSITION
The judgment is affirmed.
We concur: DOI TODD, J., CHAVEZ, J.