Judge: Joseph Lipner, Case: 23STCV20562, Date: 2023-12-28 Tentative Ruling

Case Number: 23STCV20562    Hearing Date: April 9, 2024    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Defendant Katie Williams (“Defendant”) moves for an award of attorney’s fees against Plaintiff Sly Spectrum, LLC (“Plaintiff”) pursuant to Code of Civil Procedure section 425.16(c).

The Court GRANTS Defendant’s motion for attorney’s fees in the amount of $63,981.25.  Plaintiff shall pay this amount to Defendant’s counsel within thirty days.

Background

The following facts are taken from the allegations in the FAC. The Court accepts them as true on demurrer.

This action arises out of the termination of Jonathan Dortch’s employment relationship with Part Four, LLC (“Part Four”) and its effects on Plaintiff’s interest in Part Four.

Part Four is a digital marketing and advertising company. Joshua Golsen and Dortch founded Part Four in 2014. Plaintiff became a member of Part Four since February, 2014 with a 20 percent interest. The other members were Rebel Bass, LLC (“Rebel”), in which Plaintiff believes Golsen owns a majority interest, and GOL Capital, LLC (“GOL”), whose members included family of Golsen. Plaintiff was a party to Part Four’s Operating Agreement (the “Operating Agreement”), which required Plaintiff to sell its membership interest for a fixed amount if Dortch’s employment was terminated.

During the time when Plaintiff was a member of Part Four, Golsen hired Defendant as the Director of Operations and HR Representative for Part Four.

Plaintiff alleges that Part Four was operating at a $1.3 million loss as of June 3, 2021 and that Rebel had been committing tax fraud. Dortch confronted Golsen about the substance of these allegations on June 3, 2021. Plaintiff alleges that Golsen and his father began to attempt to remove Dortch from Part Four at that point.

On June 9, 2021, Golsen informed Dortch that Part Four planned to terminate Dortch’s employment. Golsen stated that Part Four would buy out Plaintiff’s membership interest in Part Four. Golsen stated that he would tell other employees that Dortch’s departure was a mutual decision, which Plaintiff characterizes as “weav[ing] a false narrative surrounding Dortch’s departure.” (FAC p. 3:19-20.)

On August 11, 2021, Plaintiff and Dortch filed a lawsuit against Part Four, the Golsens, Rebel, and GOL entitled Dortch v. Golsen, et al., Los Angeles County Superior Court Case No. 21STCV29695 (the “Part Four Action”), which is currently pending in Department 72 of the Stanley Mosk Courthouse.

On September 1, 2021, Golsen sent Plaintiff a notice that the Golsens and Part Four had determined that Plaintiff’s membership interest in Part Four was forfeited and that Part Four would be seizing the funds that represented Plaintiff’s capital account. Plaintiff alleges that this action constituted conversion.

Plaintiff alleges that Defendant assisted in Dortch’s termination and took a number of other actions which Plaintiff alleges influenced Golsen to terminate Dortch.

Plaintiff filed this action against Defendant on September 14, 2023, alleging (1) aiding and abetting breach of fiduciary duty; (2) aiding and abetting conversion; (3) intentional interference with contractual relationship (“IICR”); (4) intentional interference with prospective economic advantage (“IIPEA”); and (5) negligent interference with economic advantage.

On December 28, 2023, the Court granted Defendant’s anti-SLAPP motion brought as to paragraphs 22(o) and 22(s) of the complaint, and sustained Defendant’s demurrer with leave to amend as to the rest of the complaint.

Defendant moved for attorney’s fees pursuant to the anti-SLAPP statute on February 26, 2024. Plaintiff filed an opposition and Defendant filed a reply. 

Legal Standard

Attorney’s fees in anti-SLAPP motions are determined using the lodestar method. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.) “Under the lodestar method, the trial court must first determine the lodestar figure—the reasonable hours spent multiplied by the reasonable hourly rate—based on a careful compilation of the time spent and reasonable hourly compensation of each attorney involved in the presentation of the case.” (Glaviano v. Sacramento City Unified School Dist. (2018) 22 Cal.App.5th 744, 751.) 

The moving party bears the burden of proof as to “reasonableness” of any fee claim. (Code Civ. Proc., § 1033.5, subd. (c)(5).) The party seeking fees has the burden of documenting the appropriate hours expended and hourly rates. (City of Colton v. Singletary (2012) 206 Cal.App.4th 751, 784.) This burden requires competent evidence as to the nature and value of the services rendered. (Martino v. Denevi (1986) 182 Cal.App.3d 553, 559.) A plaintiff’s verified billing invoices are prima facie evidence that the costs, expenses, and services listed were necessarily incurred. (Hadley v. Krepel (1985) 167 Cal.App.3d 677, 682.)

The trial court has broad authority to determine the amount of a reasonable fee. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.)  

Discussion

Plaintiff argues that Defendant did not achieve success on the anti-SLAPP motion because it did not dispose of the entire case. However, a defendant prevailing on an anti-SLAPP motion does not need to dispose of the entire case to obtain attorney’s fees. “[T]he anti-SLAPP statute does not refer to parties that have “prevail[ed]” in a lawsuit; it refers specifically to defendants that have prevailed ‘on [the] special motion to strike.’ (Code Civ. Proc., § 425.16, subd. (c)(1), italics added.) A defendant that successfully moves to strike a plaintiff's cause of action, whether on merits or nonmerits grounds, has ‘prevailed’ on the motion, and therefore is entitled to attorney's fees and costs under Code of Civil Procedure section 425.16, subdivision (c). This understanding of the scope of the anti-SLAPP's fee-shifting provision is consistent with its apparent purpose: namely, compensating the prevailing defendant for the undue burden of defending against litigation designed to chill the exercise of free speech and petition rights.” (Barry v. State Bar of California (2017) 2 Cal.5th 318, 327–328 [emphasis in original].) The fact that Defendant’s motion only challenged part of a cause of action is also permissible (see Baral v. Schnitt (2016) 1 Cal.5th 376, 393), and the Court stated as much in its ruling on the anti-SLAPP motion.

Defendant requests an hourly rate of $725.00 per hour for attorney Jillian Harris. The Court finds this rate to be reasonable based on Harris’s 9 years of litigation experience and the evidence submitted by Defendant of courts’ approval of similar rates.

Defendant requests a total of 150.5 hours for Harris, for a total of $109,112.50 in attorney’s fees. (Harris Decl. ¶ 17, Ex. H.) These hours were limited to those spent on the anti-SLAPP motion and this fees motion and do not include time spent by partner Julie Gerchik reviewing and editing both motions. (Harris Decl. ¶¶ 16-17.) The bulk of this time includes 89.5 hours spent researching and drafting the anti-SLAPP moving papers and 35.0 hours spent researching and preparing the anti-SLAPP reply. (Harris Decl. ¶ 17.)

This is a complicated case. Moreover, Defendant’s counsel was required to determine the interplay between this case and the Part Four Action, including the fact that key allegations in the complaint assertedly concerned privileged attorney-client communications from the Part Four Action. (Harris Decl. ¶ 18.) Furthermore, the protected activity at issue in the anti-SLAPP motion comprised only part of a cause of action. Although an anti-SLAPP motion may permissibly split a cause of action in such a manner to strike only allegations of protected activity (see Baral v. Schnitt (2016) 1 Cal.5th 376, 393), this issue would have required additional research and expenditure of time by defense counsel. Finally, the anti-SLAPP motion was vigorously litigated by both parties, including a large number of evidentiary objections by both sides.

Plaintiff argues that Defendant improperly requested fees for her regular motion to strike because the regular motion to strike included substantially similar arguments that were also in the anti-SLAPP motion – specifically, arguments that paragraphs 22(s) and (o) were barred by litigation privilege. This, however, does not rebut the proposition that time constructing the arguments was reasonably expended in support of the anti-SLAPP motion. If Defendant had never filed the motion to strike, she would still have had to construct those arguments in their entirety for the anti-SLAPP. That the same arguments constructed for the anti-SLAPP would find utility elsewhere is not evidence of poor billing practices; rather, it is evidence of efficient use of attorney time. If Defendant were seeking attorney’s fees for both the anti-SLAPP and the regular motion to strike, this would raise an issue of double billing if Defendant requested those hours separately under each motion. That is not the case here.

Nonetheless, the Court has significant concerns about approving 150.5 hours given the limited scope of the anti-SLAPP motion and the motion’s success. For example, Defendant’s counsel appears to have spent substantial time proving that Plaintiff could not succeed on the merits of causes of action which the motion did not object to. “[I]n cases involving allegations of both protected and unprotected activity, the plaintiff is required to establish a probability of prevailing on any claim for relief based on allegations of protected activity.” (Baral, supra, 1 Cal.5th at p. 395.)

The Court approves as reasonable 50 hours spent drafting the anti-SLAPP motion, 25 hours on the anti-SLAPP reply, 2.25 hours for preparing for and attending the anti-SLAPP hearing, 10 hours for preparing the fee motion and a reply to the fee motion, and 1 hour for the hearing on the fee motion. This results in a total of 88.25 hours, for a total fee of $63,981.25.