Opinion
B163335.
11-25-2003
NATIONAL COUNCIL AGAINST HEALTH FRAUD, INC., Plaintiff and Appellant, v. BOTANICAL LABORATORIES, INC., Defendants and Respondents.
Law Offices of Morse Mehrban, Morse Mehrban for Plaintiff and Appellant. Foley & Lardner, Tami S. Smason, Shana T. Mintz; Alvin J. Lorman for Defendants and Respondents.
This is the second appeal in this case. Previously, we affirmed the trial courts dismissal of appellants lawsuit on the grounds that it is a Strategic Lawsuit Against Public Participation (SLAPP), which is prohibited by Code of Civil Procedure section 425.16. (National Council Against Health Fraud, Inc. v. Botanical Laboratories, Inc. (July 8, 2003, B160352 [nonpub. opn.].) The present appeal addresses the trial courts award of attorney fees to respondents.
After prevailing on their anti-SLAPP motion, respondents asked the trial court to award them attorney fees of $94,117. Respondents argued that they maximized their efficiency in defending this case by consolidating five different lawsuits into one. Over appellants objections, the trial court awarded respondents $ 88,000.
As the prevailing party on the special motion to strike, respondents are entitled to recover their attorney fees. (§ 425.16, subd. (c).) Indeed, an award of fees is mandatory. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131.) The goal is to discourage lawsuits that chill the exercise of First Amendment rights by shifting fees to the culpable party. (Ibid.)
The courts employ a "lodestar adjustment method" when determining an award of attorney fees in SLAPP cases. (Ketchum v. Moses, supra, 24 Cal.4th at p. 1131.) The court begins by examining a "`careful compilation of the time spent and reasonable hourly compensation of each attorney . . . involved in the presentation of the case." A reasonable fee is the basic fee for comparable legal services in the community. (Id. at pp. 1131-1132.) The court may also 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, (4) the contingent nature of the fee award." (Id. at p. 1132.)
The court must "fix a fee at the fair market value for the particular action. In effect, the court determines, retrospectively, whether the litigation involved a contingent risk or required extraordinary legal skill justifying augmentation of the unadorned lodestar in order to approximate the fair market rate for such services. The `"experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong."" (Ketchum v. Moses, supra, 24 Cal.4th at p. 1132.)
In this case, respondents did not request an augmented or enhanced fee. Appellant does not deny that respondents are entitled to recover their reasonable fees. Instead, appellant seeks to reduce the amount of the award. Appellants reasons for requesting the reduction are detailed below.
1. Fees Not Connected with the Motion to Strike
The legislative history of section 425.16 shows that "the Legislature intended that a prevailing defendant on a motion to strike be allowed to recover attorney fees and costs only on the motion to strike, not the entire suit." (Lafayette Morehouse, Inc. v. Chronicle Publishing Co. (1995) 39 Cal.App.4th 1379, 1383, citing a Senate report stating that a prevailing defendant on a motion to strike may recover its attorney fees "for that motion." Italics added.)
Randomly leafing through respondents legal bills, we promptly find a bill dated May 10, 2002, from local counsel, with close to $3,700 in charges solely associated with respondents demurrer to the complaint. Washington counsel billed $480 on March 9, 2001, and another $280 on March 20-21, 2001, to review the Los Angeles court rules and conduct research on demurrers. As far as we can tell, Washington counsel spent at least $20,000 drafting the demurrer. Here is another interesting charge for $390 on June 15, 2002: "Research attorneys fees for demurrer." The $390 spent on this research should have unearthed Lafayette Morehouse, Inc. v. Chronicle Publishing Co., supra, 39 Cal.App.4th 1379, holding that respondents can only recover fees for the motion to strike.
In short, after reviewing a few of respondents bills, we see some $24,000 in charges related solely to respondents demurrer to the complaint. This alone drops respondents allowable charges to under $70,000 . . . an amount that will be even lower once all of the demurrer charges are omitted.
Respondents chose to pursue a demurrer concurrently with their motion to strike, but appellant need not pay for that tactical maneuver. Respondents attorneys must go through their bills and remove all charges not incurred in connection with the motion to strike, honestly apportioning the time allotted to the demurrer in instances where the attorneys or paralegals worked on both motions. Respondents cannot oblige the trial court and this court to guess at what the proper apportionment is. As directed by the Supreme Court, respondents must submit a "`careful compilation of the time spent" on the motion to strike. (Ketchum v. Moses, supra, 24 Cal.4th at p. 1131.)
2. Pro Hac Vice Counsel
Appellant complains that respondents retained local counsel as well as counsel in Washington, D.C., and that the two law firms did duplicative work. In this regard, the trial court "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, supra, 24 Cal.4th at p. 1132.) Respondents maintain that national counsel was necessary because the case involves "complex factual and legal matters."
We take judicial notice of the appellate record in the first appeal. The record proves unremarkable in complexity. Respondents consolidated motion to strike is a mere 12 pages long; their reply is 11 pages long. The argument is straightforward. Virtually the entire record consists of copies of respondents product advertisements. This Court disposed of appellants arguments in short order. It was readily apparent from appellants pleadings and its expert affidavits that appellant could not prevail on its claims. No particular expertise was required to discern the inadequacy of appellants claims.
The trial court needs to take a closer look at the attorney fees demanded by respondents. Did respondents 23 pages worth of motion and reply warrant the $94,117 in fees billed by respondents, at $4,092 per page? Or were these bills the result of inefficiency and duplication? The large size of the legal bill—when measured against the modest motion—demands answers to the questions we have posed. (See, e.g., Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 777, 785, characterizing as "generous" an attorney fees award of $27,000 for an anti-SLAPP motion.)
3. Mathematical Error
Appellant points out a mathematical error in which one hour of time was billed out at $600. The hourly billing rate is actually $300 for respondents attorneys. This error can be addressed on remand.
DISPOSITION
The order awarding attorney fees is reversed and the case is remanded for further proceedings consistent with this opinion. Appellant is awarded its costs on appeal.
We concur: NOTT, J., DOI TODD, J. --------------- Notes: All future statutory references are to the Code of Civil Procedure.