Judge David S. Cunningham, Case BC391869 2022-09-09 Tentative Ruling

Opposing Party: Los Angeles County Water Works District No. 40 (“District 40”)

The Wood Plaintiffs’ motion for pre-appeal attorney fees and costs is granted.

The recoverable amount of costs is $42,795.24, and District 40’s share is $31,993.72.

The interest rate for postjudgment interest is seven percent and runs from 12/28/15.

The Court orders the Wood Plaintiffs to submit an amended proposed order that is consistent with these findings.

The case at issue is Wood v. Los Angeles County Waterworks District No. 40 (BC391869). It is part of the coordinated Antelope Valley Groundwater Cases (JCCP 4408).

The Antelope Valley Groundwater Cases “concern the existence and priority of water rights in the Antelope Valley Groundwater Basin . . . .” (Antelope Valley Groundwater Cases (August 24, 2021, F083138) 2021 WL 3733015, at *1.)[1] “The basin spans more than 1,000 square miles across arid regions of southeastern Kern County and northeastern Los Angeles County.” (Ibid.) “A large portion of the overlying land is owned by the federal government, but there are thousands of citizens and entities who also own real property in the area.” (Ibid.)

“District 40 is a public agency governed by the Los Angeles County Board of Supervisors.” (Ibid.) “It operates and maintains a public waterworks system, supplying water to over 200,000 people through approximately 56,500 metered connections.” (Ibid.) “District 40 obtains the water it supplies by pumping it from the aquifer and purchasing imported State Water Project water.” (Ibid.)

The Wood Plaintiffs consist of more than “4,000 landowners who obtain groundwater directly from the aquifer.” (Ibid.) “Historically, the class members' individualized pumping did not exceed 25 acre-feet per year (afy).” (Ibid.) “Due to the relatively small amounts of production, this group is also known as the ‘Small Pumper Class.’” (Ibid.)

The extensive procedural history is laid out in the Court of Appeal’s opinion. (See id. at *2-*7.)

Important here, “the Judicial Council coordinated” the Antelope Valley Groundwater Cases in 2005, chose “[t]he Los Angeles Superior Court . . . as the venue[,]” yet “assigned” the matter “to a judge from the Santa Clara Superior Court.” (Id. at *2.)

Then, in 2016, the Wood Plaintiffs filed a motion for attorney fees and costs. The trial judge held that the Wood Plaintiffs were the prevailing party and granted the motion but reduced the requested amounts. The trial judge set the hourly rate at $500 per hour (the Wood Plaintiffs requested $720 per hour) and declined to enhance the award (the Wood Plaintiffs requested a 2.5 positive multiplier). The total amount awarded was $2,269,400 for attorney fees and $80,224 for paralegal fees. (See id. at *6.)

* affirmed that the Wood Plaintiffs are entitled to fees (see, e.g., id. at *1);

* remanded as to the lodestar calculation, particularly regarding the hourly rate (see id. at *19-*20); and

This Court must determine the lodestar and whether a positive multiplier should be applied.

“Statutory attorney fees are ordinarily determined by the court pursuant to the ‘lodestar’ or ‘touchstone’ method. Under this approach, a base amount is calculated from a compilation of” the reasonable hourly rates per attorney and the “time reasonably spent[.]” (Wegner, et al., Cal. Prac. Guide: Civ. Trials and Evidence (The Rutter Group 2021) ¶ 17:730, emphasis deleted.) “The base amount is then adjusted in light of various factors [citation].” (Ibid.)

“Normally, a ‘reasonable’ hourly rate is the prevailing rate charged by attorneys of similar skill and experience in the relevant community.” (Id. at ¶ 17:744.) “However, the court may consider various other factors when determining a reasonable hourly rate—e.g., the attorney's skill and experience, the nature of the work performed, the relevant area of expertise and the attorney's customary billing rates.” (Ibid.)

“The lodestar method vests the court with discretion to decide which of the hours expended by the attorneys were ‘reasonably spent’ on the litigation.” (Wegner, supra, at para. 17:731.) “The predicate of any attorney fee award is the necessity and usefulness of the conduct for which compensation is sought.” (Ibid.. emphasis in original.)

A trial court has discretion to adjust the lodestar amount to take account of unique circumstances in the case. [Citations.] Some factors the court may consider in adjusting 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, [and] (4) the contingent nature of the fee award. [Citations.] “The purpose of such adjustment is to 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.” [Citation.]

(Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4^th 1157, 1216; see also Wegner, supra, at ¶ 17:752 [“The purpose of a fee enhancement is ‘primarily to compensate the attorney for the prevailing party at a rate reflecting the risk of nonpayment in contingency cases as a class”]; ibid. [“The aim is to compensate attorneys for their service at fair market value as an inducement to accept such matters. (‘Fair market value’ typically includes a premium for the risk of nonpayment or delay in payment of attorney fees.)”].)

To reiterate, the Court of Appeal affirmed that the Wood Plaintiffs are entitled to fees. (See Antelope Valley Groundwater Cases, supra, 2021 WL 3733015, at *1, *7-*15, *34.)

The appellate opinion notes that, despite awarding $500 per hour, “the trial court [seemingly] agreed $720 was within the prevailing market rates for purposes of determining the lodestar.” (Id. at *16; see also id. at *19-*20 [finding District 40’s evidence unsupportive of the $500 rate].)

District 40 does not contest the requested $720 rate. (See Opposition, pp. 10-14 [merely challenging the hours worked]; see also Reply, p. 6.)

The Court awards $720 per hour for the attorney work because the motion is unopposed, and, given the evidence and the Court’s own experience, $720 is a reasonable rate.

The Wood Plaintiffs “requested compensation for 4,538.8 hours of attorney time . . . .” (Antelope Valley Groundwater Cases, supra, 2021 WL 3733015, at *15.)

The trial judge “found ‘that the hours claimed were reasonably spent on the case[,]” and he subsequently “approved an additional 260.6 hours of postjudgment attorney time . . . .” (Id. at *16.)

District 40 asks this Court to reconsider the awarded hours. (See, e.g., Opposition, pp. 10-14.)

The Court denies District 40’s request. The Court of Appeal’s opinion does not criticize the trial judge’s determination of the reasonable hours worked and, instead, limits the analysis to “the hourly rate of $500.” (Antelope Valley Groundwater Cases, supra, 2021 WL 3733015, at *16.) It follows that the trial judge’s finding should stand because the Court of Appeal did not question it or disturb it, and the trial judge had intimate knowledge of the work performed and the hours expended by the Wood Plaintiffs’ counsel.

The Court finds that the reasonable hours worked should be 4,538.8 + 260.6 = 4,799.4 hours.

The trial judge rejected the Wood Plaintiffs’ request for a 2.5 positive multiplier. He apparently applied either no multiplier or a negative multiplier.

The Court of Appeal reversed because the trial judge used incorrect criteria and misinterpreted the evidence. (See id. at *21-*25.)

The Wood Plaintiffs continue to request a 2.5 multiplier. (See Motion, pp. 9-11.)

The Court finds that a reduced positive multiplier of 2.0 is appropriate because:

* the case involved complex motions and issues regarding groundwater rights and the diverging interests of municipal, agricultural, industrial, and individual parties (see, e.g., Reply, pp. 9-10);

* the trial judge praised counsel’s work and skill, and the Court of Appeal disagreed with the evidence District 40 cited to show counsel’s purported lack of experience (see, e.g., id. at pp. 10-11; see also Antelope Valley Groundwater Cases, supra, 2021 WL 3733015, at *21-*22);

* counsel declare that they were precluded from accepting other work (see, e.g., Appendix, Vol. I, Ex. E, ¶¶ 51-56);

* counsel litigated the case on a contingency basis (see, e.g., id. at Ex. E, ¶ 44; see also McLachlan Decl., ¶ 12; O’Leary Decl., ¶ 7); and

* District 40 is a public entity, meaning the public and taxpayers bear the burden.[2]

The appellate opinion identifies “discrepancies and computational errors” in both the Wood Plaintiffs’ “own costs requests” and the trial judge’s costs ruling. (Id. at *29.) The Court of Appeal remanded for the “limited” purpose of “reconciling the arithmetical inconsistencies.” (Ibid.)

The Wood Plaintiffs assert that the correct amount of taxed costs should be $32,213.99 and that the correct amount of recoverable costs should be $42,795.24, making District 40’s correct share (74.76%) $31,993.72. (See Motion, p. 12.)

The Wood Plaintiffs contend they are “entitled to interest on the fees and costs dating from” 12/28/15, “the date of entry of judgment[.]” (Motion, p. 12.) “Since District 40 is a public entity,” the Wood Plaintiffs claim “the interest rate is seven percent.” (Ibid.)

The Court grants the motion. Postjudgment interest at seven percent shall run from 12/28/15.

The Court orders the Wood Plaintiffs to recalculate the recoverable amounts based on the Court’s findings and to submit an amended proposed order.

[1] The Court of Appeal’s opinion is unpublished. The Court is quoting it because it is law of the case.

[2] The Court of Appeal stated that denial of a positive multiplier cannot be based “sole[ly] or primar[ily]” on the impact taxpayers will suffer. (Antelope Valley Groundwater Cases, supra, 2021 WL 3733015, at *25.) Here, by contrast, the Court is awarding a positive multiplier, just reducing it.

Opposing Party: Los Angeles County Water Works District No. 40 (“District 40”)

District 40’s objections to Richard Pearl’s 2016 declaration: objections 1 through 6 are overruled.

District 40’s objections to Richard Pearl’s 2022 declaration: objections 1, 2, 3, 4, 5, 6, 7, 8, 9, 11, 12, 13, 14, and 15 are sustained; objection 10 is overruled.

District 40’s objections to Michael McLachlan’s declaration: objections 1, 2, 3, 7, and 8 are overruled; objections 4, 5, 6, 9, and 10 are sustained.

District 40’s objections to Daniel O’Leary’s declaration: objections 1 and 3 are overruled; objections 2 and 4 are sustained.

The Wood Plaintiffs shall submit an amended proposed order that is consistent with these findings.

The case at issue is Wood v. Los Angeles County Waterworks District No. 40 (BC391869). It is part of the coordinated Antelope Valley Groundwater Cases (JCCP 4408).

The extensive procedural history is laid out in the Court of Appeal’s opinion. (See id. at *2-*7.)

* affirmed that the Wood Plaintiffs are entitled to fees (see, e.g., id. at *1);

* remanded as to the lodestar calculation, particularly regarding the hourly rate (see id. at *19-*20);

* “defer[red] to the trial court to rule on issues of fees on appeal” (id. at *34, emphasis added).

Here, the Wood Plaintiffs ask this Court to award appellate attorney fees and costs.

It is undisputed that the Wood Plaintiffs prevailed on appeal, and District 40 does not challenge the Wood Plaintiffs’ entitlement to appellate attorney fees. (See Motion, p. 5; see also Opposition, pp. 9-16 [merely contesting the amount of the requested lodestar and whether a positive multiplier should be applied].)

District 40 does not contest the requested rates. (See Opposition, pp. 9-11 [only challenging the hours worked]; see also Reply, pp. 2, 6.)

The Court finds that the rates should be reduced. The Wood Plaintiffs’ own authority recognizes that the moving party’s “initial duty of production is not excused by lack of opposition.” (U.S. v. $28,000.00 in U.S. Currency (9^th Cir. 2015) 802 F.3d 1100, 1105.) Based on the evidence and the Court’s considerable experience deciding motions for attorney fees in complex cases in Los Angeles County, the Court awards $800 per hour for McLachlan and O’Leary, $650 per hour for LippSmith, $550 per hour for Gutierrez, and $150 per hour for the paralegals.

In the moving brief, the Wood Plaintiffs seek compensation for 971.4 attorney hours and 102.3 paralegal hours. (See Motion, p. 8.)

District 40 asserts that 225.4 of the attorney hours do not relate to the appeal and should be excluded. (See Opposition, p. 10.)

In reply, the Wood Plaintiffs agree to reduce the attorney hours by 4.5 hours. (See Reply, p. 3.)

The Court accepts the Wood Plaintiffs’ reduction. No other reduction is necessary.[3]

The Court finds that the reasonable hours worked are 966.9 attorney hours and 102.3 paralegal hours.

* the requested hourly rates “already take into consideration the difficulty of the issues presented, counsel’s skill and the results achieved” (Opposition, p. 12);

* counsel “have not presented any evidence that they appellate and post-judgment work ‘substantially precluded’ them from taking other work” (ibid.);

* “District 40 is a public entity, which litigated the adjudication for the public’s benefit” (ibid.);

The Court incorporates the order on the Wood Plaintiffs’ motion for pre-appeal attorney fees. There, the Court applies a 2.0 positive multiplier because:

* “the case involved complex motions and issues regarding groundwater rights and the diverging interests of municipal, agricultural, industrial, and individual parties [citation]” (Order Re: Motion for Modified Attorney Fees Award Consistent with Court of Appeal Opinion, p. 5);

* “the trial judge praised counsel’s work and skill, and the Court of Appeal disagreed with the evidence District 40 cited to show counsel’s purported lack of experience [citations]” (ibid.);

* “counsel declare that they were precluded from accepting other work [citation]” (ibid.);

* “District 40 is a public entity, meaning the public and taxpayers bear the burden.” (Ibid., footnote omitted.)

Those reasons apply equally here, and the law permits a positive multiplier under the circumstances (see Wegner, supra, at ¶ 17:668 [noting that prevailing attorneys are “entitled to compensation for the time expended in litigating the fee award (‘fees on fees’)” and that a “multiplier may also apply to [the] ‘fees on fees’ award”], emphasis added), so the Court grants a 1.5 positive multiplier.

The Wood Plaintiffs ask the Court to award $5,020.78 for appellate costs. (See Motion, p. 3; see also Reply, p. 2 n.3.)

The Court orders the Wood Plaintiffs to recalculate the recoverable amounts based on the Court’s findings and to submit an amended proposed order.

[1] The Court of Appeal’s opinion is unpublished. The Court is quoting it because it is law of the case.

[2] The hourly rates requested here are higher than the rate ($720 per hour) requested in the Wood Plaintiffs’ motion for pre-appeal attorney fees. The pre-appeal motion requests a lower rate because it regards work performed up to approximately 2016. This motion requests higher rates to reflect the attorneys’ increased experience levels as to work performed from approximately 2016 to the present.

[3] The tentative ruling states:

Additionally, the Court is inclined to reduce the partner hours by 10%. The fact that they billed 889 of the 966.9 requested attorney hours, many on tasks that could have been handled by associates, appears egregious and unnecessary. Indeed, the associates billed less than 80 of the total requested hours. [Citation.] A 10% reduction is appropriate to address this apparent excessiveness.

(Tentative Ruling Re: Motion for Appellate Attorney Fees and Costs, p. 5.) At the hearing, however, the Wood Plaintiffs’ counsel clarified that McLachlan and O’Leary are solo practitioners. LippSmith and Gutierrez did not work for them as associates. These facts impact the analysis and render the 10% reduction unwarranted.