Judge Bruce G. Iwasaki, Case Number: 22STCV06689, Date: 2024-02-22 Tentative Ruling

On February 23, 2022, Plaintiff Sarah Stage filed her complaint against Defendants Unruly and its founders, Tara Niknejad and Nicky Gathrite, alleging that Defendants induced Plaintiff to enter into an agreement based on representations made by Defendants in their Services Agreement, including that Defendants would act to protect Plaintiff’s interests. She alleged that Defendants sent explicit messages and disseminated photos to online users of OnlyFans without Plaintiff’s consent. The Complaint contains causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, intentional misrepresentation, negligent misrepresentation, misappropriation of name and likeness, intentional infliction of emotional distress, negligent interference with prospective economic advantage, unfair competition, and declaratory relief.

On February 25, 2022, Unruly filed a Cross-Complaint against Stage for breach of contract, breach of the implied covenant of good faith and fair dealing, intentional misrepresentation, negligent misrepresentation, and intentional interference with economic relations.

On March 23, 2022, Plaintiff/Cross-Defendant Stage filed a special motion to strike (anti-SLAPP) as to Unruly’s to Cross-Complaint. On April 19, 2022, the Court denied Plaintiff/Cross-Defendant Stage’s anti-SLAPP motion.

Following an appeal of this decision, on October 23, 2023, the Court of Appeal reversed the trial court’s order on the anti-SLAPP as to Unruly’s fifth cause of action for intentional interference with contractual relations.

Plaintiff now seeks attorney fees in the amount of $99,875. No opposition was filed.[1]

Code of Civil Procedure section 425.16, subdivision (c) provides, in pertinent part: “in any action subject to subdivision (b), a prevailing defendant on a special motion to strike shall be entitled to recover that defendant's attorney's fees and costs.” (Code Civ. Proc., § 425.16, subd. (c)(1).) “Thus, under ... section 425.16, subdivision (c), any SLAPP defendant who brings a successful motion to strike is entitled to mandatory attorney fees.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131.)

Further, “any award of attorney’s fees under section 425.16, subdivision (c), shall also include the fees incurred in prosecuting [an] appeal.” (Liu v. Moore (1999) 69 Cal.App.4th 745, 755.)

Stage seeks attorney fees in the amount of $99,875, which includes a multiplier of 1.25.

In moving for attorney fees and costs, Cross-Defendant Stage argues that she is entitled to fees pursuant to Code of Civil Procedure section 425.16, subdivision (c).

In the absence of an opposition, there is no dispute that Cross-Defendant Stage is entitled to fees as the prevailing party on her anti-SLAPP motion.[2]

Cross-Defendant Stage first argues that her counsels’ hourly rates are reasonable.

In assessing the reasonableness of hourly billing rates,¿“the court may rely on its own knowledge and familiarity with the legal market, as well as the experience, skill, and reputation of the attorney requesting fees [citation], the difficulty or complexity of the litigation to which that skill was applied [citations], and affidavits from other attorneys regarding prevailing fees in the community and rate determinations in other cases.”¿(569 East County Boulevard LLC v. Backcountry Against the Dump, Inc.¿(2016) 6 Cal.App.5th 426, 437; see¿Mountjoy v. Bank of America, N.A.¿(2016) 245 Cal.App.4th 266, 272 [“ ‘ “a reasonable hourly rate is the product of a multiplicity of factors…[including] the level of skill necessary, time limitations, the amount to be obtained in the litigation, the attorney’s reputation, and the undesirability of the case” ’ ”].)¿

Here, Attorney Dowlatshahi billed at an hourly rate of $575 in 2022 and 2023. (Dowlatshahi Decl., ¶ 10.) In 2022 and 2023, Attorney Sadat billed at an hourly rate of $625. (Sadat Decl., ¶ 6.) In 2022 and 2023, Paralegal Anleu billed at an hourly rate of $250. (Dowlatshahi Decl., ¶ 11.) In 2024, Attorney Sadat’s rate increased to $650 per hour and Attorney Dowlatshahi’s rate increased to $600 per hour. (Dowlatshahi Decl., ¶ 10; Sadat Decl., ¶ 6.)

A review of the declarations in support of the motion for attorney’s fees – which contains the descriptions of each attorneys’ education and experience – supports finding Stage’s attorneys’ hourly rates ranging from $250 to $650 were reasonable; the rates are supported by substantial evidence under the present circumstances. (Dowlatshahi Decl., ¶¶ 9-11; Sadat Decl., ¶¶ 4-6.) Based on the Court's familiarity with the current local market, and Stage’s evidence of the experience and skills of the various attorneys – Stage’s requested rates per hour are reasonable.

In support of the motion for fees, Stage’s attorneys represent that the firm worked approximately 141.50 hours litigating the anti-SLAPP, which includes time incurred on the appeal and for the related fee motion. (Dowlatshahi Decl., ¶¶ 2, 11-12; Sadat Decl., ¶¶ 2, 7.) Specifically, Cross-Defendant Stage’s counsel represents that Attorney Dowlatshahi incurred 78 hours, Attorney Sadat incurred 38 hours, and Paralegal Anleu incurred 12.0 hours.

In drafting and defending the special motion to strike, counsel incurred 58.5 hours. In preparing and prosecuting the appeal, counsel incurred 69.5 hours. Finally, counsel contends that they incurred 13.5 hours the attorney fee motion, including estimated time for the reply and hearing.

In the absence of billing records, the Court has only the number of hours incurred generally for these tasks related to this motion to consider. (Mot., 5:12-6:11.) The hours incurred on these tasks are excessive on their face. The Court notes that on appeal, Stage prevailed on only one cause of action, and the statutory basis on which the appellate court reversed – Code of Civil Procedure section 425.16, subdivision (e)(2) – had not been raised here. It is appropriate therefore to reduce the fee request for time spent on matters that were unsuccessful. (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1020 [“Defendants consequently are entitled to recover attorney fees and costs incurred in moving to strike the claims on which they prevailed, but not fees and costs incurred in moving to strike the remaining claims”].)

Applying a blended rate of $500, the court will reduce the number of hours incurred on the anti-SLAPP motion by 15 hours for a reduction of $7,500. The Court will reduce the number of hours incurred on the appeal by 20 hours for a reduction of $10,000. Finally, the hours on the attorney fee motion must be reduced as excessive but must also be reduced in light of the fact that there was no opposition or reply; the Court will reduce these hours by 5 hours for a reduction of $2,500.

Thus, the Court will reduce the lodestar fees requested by Stage ($79,900) in the total amount of $20,000, for a total of $59,900.

Finally, Stage seeks a 1.5 lodestar multiplier based on the risk of taking on the case on contingency, the complexity of the issues involved, and for forgoing employment from other business.

Relevant factors to determine whether an enhancement is appropriate 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. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

Although this matter was apparently taken on contingency, none of the other factors support the application of a multiplier. The anti-SLAPP issue was not novel. Stage achieved only partial success and displayed no extraordinary skill. Stage did not raise section 425.16, subdivision (e)(2) in the trial court and on appeal abandoned its motion regarding the first and second cross-claims. Its filings in this court ignored relevant Supreme Court authority. The evidence only shows that counsel was forced to reduce the amount of time dedicated to other matters because of this litigation but does not specifically indicate that any employment was turned down. (Dowlatshahi Decl., ¶ 10; Sadat Decl., ¶ 6.) Further, the¿contingent risks, skill, and difficulty¿Stage’s attorneys¿assert are absorbed by¿their¿already high (albeit reasonable) hourly rates. (See¿Robertson v. Fleetwood Travel Trailers of California. Inc.¿(2006) 144 Cal.App.4th 785, 822.)

Plaintiff Stage’s motion for attorney fees and costs is granted in the amount of $59,900. Defendant Unruly shall pay to Plaintiff’s counsel this amount on or before March 22, 2024.

[1] Defendant sought ex parte relief to file a late opposition and continue the hearing to allow time for a reply. The Court denied this ex parte request.

[2] Even if the Court considered the Opposition filed as an attachment to the ex parte, the Opposition does nothing more than mischaracterize the Court of Appeal decision. The disposition in the Court of Appeal opinion is clear: “We reverse the trial court’s April 19, 2022 order insofar as the trial court denied appellant Sarah Stage’s special motion to strike respondent Unruly Agency, LLC’s (Unruly’s) fifth crossclaim. We affirm the trial court’s order to the extent the court denied Stage’s motion to strike Unruly’s first and second crossclaims. The matter is remanded to the trial court with instructions to (1) enter a new order granting Stage’s motion to strike Unruly’s fifth cross-claim, and (2) conduct further proceedings consistent with this opinion.” Furthermore, Defendant Unruly’s arguments that the Court of Appeal’s decision was wrong have no bearing on the issue of fees.