Opinion
Proceedings: (IN CHAMBERS) Order Re: Plaintiff's Motion for Attorneys' Fees and Non-Taxable Costs (DE: 239)
R. GARY KLAUSNER, District Judge.
I. INTRODUCTION
On August 5, 2010, Plaintiffs Gerald Fleming, Sergio Montenegro, Robert Morales, and Eddie Ramirez (collectively "Plaintiffs"), filed a class action complaint against Covidien, Inc. ("Covidien") and Tyco Healthcare Group, L.P. ("Tyco") (collectively "Defendants"). Plaintiffs additionally sued Kimco Staffing Services Inc. ("Kimco"), and Kimstaffher, Inc. ("Kimstaffher"), who were subsequently dismissed from the suit and are not party to this Motion. On May 9, 2011, the Court certified Plaintiffs' proposed class on a single cause of action, failure to provide itemized wage statements under California Labor Code § 226. The Court denied certification on Plaintiffs' three remaining claims and these claims were subsequently dismissed following settlement. On August 12, 2011, after a one day bench trial, the Court granted judgment in favor of Plaintiffs on the surviving § 226 claim as a representative action under the California Private Attorney General Act ("PAGA"). The Court held that, under California Labor Code § 2699(g)(1), Plaintiffs were entitled to reasonable attorneys' fees and costs, and ordered Plaintiffs to request fees by application to the Court within twenty days.
Presently before the Court is Plaintiffs' Motion for Attorneys' Fees and Non-Taxable Costs. For the following reasons, the Court GRANTS Plaintiffs' Motion up to $60,000.
II. FACTUAL BACKGROUND
On August 5, 2010, Plaintiffs sued Covidien, Tyco, and Kimco Staffing Services, Inc., for four causes of action under various California Labor Code sections, IWC Orders, and California Business and Professions Code sections. Plaintiffs alleged that these violations arose because Defendants (1) failed to pay Plaintiffs for work they performed while "off the clock, " (2) failed to include discretionary bonus pay in the regular rate of pay, and (3) failed to include various pieces of information on wage statements as required by law. After Plaintiffs amended their complaint to seek penalties under California's Private Attorney General Act ("PAGA"), Defendants answered, and then removed this case to the United States District Court on September 30, 2011. On January 18, 2011 Plaintiffs amended their Complaint, adding Kimstaffher, Inc. as a defendant.
On May 9, 2011, the Court granted class certification as to one defective wage statement class. On June 14, 2011, Plaintiffs settled all claims against defendants Kimco and Kimstaffher and the claims that had not been certified as part of the class action against defendants Covidien and Tyco. All settled claims and defendants Kimco and Kimstaffher were dismissed from the case. Only the class action claim against Tyco and Covidien for defective wage statements proceeded on the merits.
On July 28, 2011, the Court held a one day bench trial on the defective wage statement claim. On August 12, 2011, the Court ruled in favor of Plaintiffs, awarding the class $125,000 in damages and the State of California $375,000 in civil penalties. The Court additionally found Plaintiffs entitled to reasonable attorneys' fees and costs under PAGA. The Court ordered Plaintiffs to request by motion attorneys' fees and costs within twenty days, which Plaintiffs did on September 1, 2011.
III. JUDICIAL STANDARD
A prevailing litigant ordinarily may not collect attorneys' fees from the losing party. Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247 (1975). However, exceptions exist where courts award fees pursuant to a statute or rule providing for the shifting of fees to the losing party. Id. at 257. Under Federal Rule of Civil Procedure 54(d)(2)(B), a party must specify the judgment and the statute, rule, or other grounds entitling them to the award and "state the amount sought or provide a fair estimate of it."
Because state statutes denying or granting attorneys' fees to parties are considered substantive law, federal courts consult state statutes to determine what costs are appropriate in diversity cases. Alyeska, 421 U.S. at 260. State statutes govern both the right to fees as well as the method of calculating fees. Mangold v. Cal. Pub. Util. Comm'n, 67 F.3d 1470, 1478 (9th Cir. 1995) (citing Kern Oil and Refining Co. v. Tenneco Oil Co., 792 F.2d 1380, 1388-89 (9th Cir. 1986)).
IV. DISCUSSION
Plaintiffs argue that they are entitled to the following attorneys' fees and costs pursuant to California Labor Code § 2699(g)(1):
(1) Attorney fees totaling $476,307.50;
(2) Paralegal time totaling $7,087.50;
(3) Non-taxable costs totaling $10,237.40; and
(4) Class representative enhancements of $4,000.00 for each the four class representatives, totaling $16,000.
For the following reasons, the Court awards Plaintiffs $60,000.00.
A. Calculation of Attorneys' Fees Under Cal. Labor Code § 2699
California Labor Code § 2699(g) states that an employee whose action results in the payment of civil penalties "shall be entitled to an award of reasonable attorneys' fees and costs." To calculate a reasonable attorneys' fees award, the Court uses the lodestar adjustment method. See Amaral v. Cintas Corp. No. 2, 163 Cal.Rptr.3d 1157, 1216 (Ct. App. 2008) (citing Ketchum v. Moses, 17 P.3d 735, 741-744 (Cal. 2001)). The Court multiplies the number of hours reasonably expended by the reasonable hourly rate. PLCM Group, Inc. v. Drexler, 997 P.2d 511, 518 (Cal. 2000). Courts have included paralegal time and rates as part of this calculation. See, e.g. Lealao v. Beneficial Cal., Inc., 97 Cal.Rptr.2d 797, 802 (Ct. App. 2000). "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." Id. In adjusting the lodestar, the court may consider "(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, [and] (4) the contingent nature of the fee award." Amaral, 163 Cal.Rptr.3d at 1216. It is well established that the determination of reasonable attorneys' fees is committed to the discretion of the trial court, in light of the fact that the value of legal services performed in a case is a matter in which the trial court has its own expertise. PLCM Group, 997 P.2d at 519.
1. The Amount of Hours Worked Is Unreasonable
a. The Wage Statement Claim
Plaintiffs contend that counsel worked 746.9 hours and paralegals worked 56.70 hours on the defective wage statement claim. The Court finds these numbers unreasonable. First, Plaintiffs prevailed on only one out of three substantive claims against two of four defendants. While work on related claims may be compensable, courts have reduced hours spent inefficiently or on duplicative work. See Ketchum v. Moses, 17 P.3d 735, 741 (Cal. 2001).
The Court finds it unreasonable that nearly 750 hours of the 900 total hours billed on this case were spent on the defective wage statement claim. Even if counsel did work such hours, the Court finds that the bulk of these hours were duplicative and inefficient, as the defective wage statement claim was relatively simple. Courts have reduced the number of hours requested on claims which appear to be relatively simple. Consumer Def. Grp. v. Rental Housing Indus. Mbrs., 40 Cal.Rptr.3d 832, 852, 855 (Ct. App. 2006). Here, the number and character of the Labor Code violations was fairly easy to determine. The parties only litigated a one day bench trial, and the Defendants "took prompt steps to correct all violations once notified." (Order 5:15.)
Therefore, the Court finds 210 attorney hours and eight paralegal hours to be reasonable for the defective wage statement claim.
b. The Attorneys' Fees Motion
Plaintiffs contend that counsel worked 43.70 hours on preparing the current Motion. The Court, in its discretion, finds this number unreasonable. The Court reduces the amount of compensable hours spent on the current motion to eighteen hours.
2. The Hourly Rate Charged Is Unreasonable
The average hourly rate requested by Plaintiffs' counsel is $512.50, with many hours billed at $700 per hour. The Court finds this rate to be unreasonable.
Although this appears to be the first case in which California Labor Code § 226 was applied to this specific set of facts, the case did not present a complicated issue that required particularly specialized expertise. Plaintiffs' counsel was responsible solely for finding the ways in which the wage statements were non-compliant under § 226 and the number of non-compliant wage statements. The Court finds that $250 per hour is a reasonable rate for the level of skill required for the defective wage statement claim. In addition, the Court finds $125 an hour to be a reasonable rate for Plaintiffs' paralegal.
Based on the above calculations, the Court GRANTS Plaintiffs' request for attorneys' fees and awards Plaintiffs $58,000.
B. Litigation Expenses and Class Representative Premiums Under California Labor Code § 2699
Plaintiffs request $26,237.40 for various litigation expenses, including expert witness fees, mediation fees, travel costs, non-taxable copying costs, class notice, and class representative premiums. For the following reasons, the Court awards Plaintiffs $2,000 for litigation expenses and class representative premiums.
1. Expenses Disallowed by California Code of Civil Procedure § 1033.5 Are Not Recoverable Under California Labor Code § 2699
Litigation expenses disallowed by California Code of Civil Procedure § 1033.5 are not recoverable unless the moving party can point to some other statutory basis for recovery. Amaral v. Cintas Corp. No. 2, 78 Cal.Rptr. 572, 621 (Ct. App. 2008). Where plaintiffs offer "no statutory basis for a recovery of... witness fees and other litigation expenses, ' these sums [are] not allowable as costs" and are thus not recoverable. Id. Plaintiffs request fees for an expert witness not ordered by the Court and non-taxable copying expenses. The recovery of these two expenses is expressly disallowed under California Code of Civil Procedure § 1033.5 (b)(1) and (b)(3), respectively, and Plaintiffs point to no other statutory authority for awarding these costs. Therefore, these two expenses are not recoverable. See Amaral, 78 Cal.Rptr. at 621.
2. Expenses Allowed by California Code of Civil Procedure § 1033.5 Should Be Requested by Application to Clerk
Plaintiffs request that the Court award them $5,018.55 as compensation for travel expenses to depositions and for providing notice to the class. Deposition travel costs are recoverable under § 1033.5(a)(3) and service of process costs are recoverable under § 1033.5(a)(4). The Court defers ruling on these costs to allow Plaintiffs to amend their application to the Court Clerk and add these to their Bill of Costs.
3. Expenses Not Provided for by California Code of Civil Procedure § 1033.5
Plaintiffs request compensation for class representative enhancements and mediation fees, two expenses not explicitly addressed in California Code of Civil Procedure § 1033.5. California courts have awarded mediation expenses to prevailing parties as "reasonably necessary to the conduct of the litigation." Gibson v. Bobroff, 57 Cal.Rptr.2d 235, 239 (Ct. App. 1996). The Court in its discretion awards Plaintiffs $2,000 for mediation expenses.
For the foregoing reasons, the Court GRANTS Plaintiffs' request as to litigation expenses, awarding Plaintiffs $2,000.
IV. CONCLUSION
Based on the foregoing discussion and calculations, the Court GRANTS Plaintiffs' Motion for Attorneys' Fees and Non-Taxable Costs, awarding Plaintiffs $60,000.
IT IS SO ORDERED.