Judge Mark H. Epstein, Case 19SMCV00057 2023-03-10 Tentative Ruling

Judge: Mark H. Epstein, Case: 19SMCV00057, Date: 2023-03-10 Tentative Ruling

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Case Number: 19SMCV00057 Hearing Date: March 10, 2023 Dept: R

Plaintiff Diana Bronshteyn (“plaintiff”) filed an employment discrimination suit against her former employer, the State of California (“defendant”). A jury verdict in plaintiff’s favor was entered on September 30, 2022. Currently before the court is plaintiff’s motion for attorneys’ fees and costs. Defendant opposes in part, claiming that the fees sought are excessive.

This matter previously came on before the court on January 20, 2023. The court issued a tentative detailing the various issues it had with each parties’ evidence on the hourly rates and claimed costs. The court continued the motion for further briefing and declarations on the hourly rates and to allow the parties’ principal experts to be deposed. The parties have submitted their supplemental briefing. The court observes that only plaintiff’s expert Pearl submitted a supplemental declaration; there is no further declaration from defendant’s expert Schratz. The court resolved a number of issues in the order issued at the earlier hearing and the court stands by its reasoning in that order with one difference. At that hearing, the court had somehow overlooked the initial Pearl declaration, which contains a lot of the underpinning and support for plaintiff’s motion. That was an error on the court’s part, plain and simple. Accordingly, portions of that ruling that suggested that plaintiff had not submitted evidence that in fact is in the Pearl declaration are plainly wrong. The court has since reviewed the original Pearl declaration (as well as the new materials). Because some of the overall ruling and legal analysis is based on that tentative, the court appends it hereto.

Plaintiff’s request for judicial notice is GRANTED. The court further judicially notices the following records from certain Los Angeles Superior Court cases (referenced in some Pearl declarations): BC524471 (7/29/22 Fee Award); BC601844 (4/29/22 Fee Award); and BC699931 (4/8/22 Notice of Ruling re: Fee Award). The court notes that generally superior court rulings are not citable authority. However, the court believes that they can be cited for the proposition that the orders in them were issued, which is the purpose here.

In her moving papers, plaintiff seeks a lodestar amount of fees in the amount of $2,717,303.25, as well as a 2.0 multiplier and additional costs. After an adjustment reducing certain fees but requesting additional fees, plaintiff filed a revised request in reply for $2,867,121.61 and costs of $34,201.82 for a total of $2,901,323.43 and a multiplier enhancement of 2.0. In the supplemental briefing, plaintiff revises this request: she requests a lodestar of $2,987,583.11 with a 2.0 multiplier and costs of $56,591.54.

“ ‘The trial court has broad discretion to determine the amount of a reasonable fee, and the award of such fees is governed by equitable principles.’ (EnPalm, LCC v. Teitler (2008) 162 Cal.App.4th 770, 774.) In fixing a reasonable fee, the court first computes ‘the lodestar figure—a calculation based on the number of hours reasonably expended multiplied by the lawyer's hourly rate.’ (Ibid.) Second, the court may adjust the lodestar to ensure that the fee awarded is reasonable in view of various factors, including ‘the nature and difficulty of the litigation, the amount of money involved, the skill required and employed to handle the case, the attention given, the success or failure, . . . “necessity for and the nature of the litigation,” ’ as well as other circumstances of the case. (Ibid.)” (Hill v. Affirmed Housing Group (2014) 226 Cal.App.4th 1192, 1195–1196, parallel citations omitted.) The court goes through that analysis below.

Hourly Rates. Plaintiff seeks hourly rates as follows: Wendy Musell, $1000 per hour; Jean Hyams, $1100 per hour; Leslie Levy, $1200 per hour; Sharon Vinick, $1100 per hour; Darci Burrell, $1050 per hour; Maraka Willits, $900 per hour; Brittany Wightman, $425 per hour; bar-certified law student rate of $350 per hour; and paralegal/legal assistant rate of $225 per hour. The court previously indicated it felt that Wightman’s hourly rate was proper, and it still agrees with that.

The court has reviewed (and re-reviewed) the declarations filed on this motion. The court generally observes that all three Pearl declarations, when read together, offer the most compelling analysis in the record of a proper hourly rate for the Los Angeles area. Defendant’s supplemental brief almost amounts to a series of evidentiary objections, but those objections do not significantly undercut Pearl’s conclusions in the court’s view. (They are not really just evidentiary objections. Defendant is not really seeking only to strike the Pearl declaration; a fair reading of defendant’s position is that even if the Pearl declarations are admissible, they ought to be given little weight for the reasons set forth in defendant’s papers.) For example, defendant asserts that Pearl’s opinions on the complexity of the litigation are without foundation because he did not review the entire case file and could not recall when he last litigated a FEHA case at the trial level. These sorts of issues go to the weight of Pearl’s declaration, of course. But the court does not agree that these issues detract from his opinion materially. Pearl has established himself as an expert on fee disputes. The court notes that Pearl is no stranger to acting as an expert in fee disputes, has previously attested to such matters for the State of California, and has authored some secondary sources on this issue. Additionally, his most supplemental declaration goes a long way in addressing the court’s concerns from the January 20th hearing. Pearl’s emphasis on the rates in the Los Angeles area has also aided the court’s analysis. While the court agrees that in some respects, it might have been even stronger had Pearl had more FEHA experience, the court does not believe that this issue materially undercuts Pearl’s reasoned analysis. While he apparently did not read the lengthy trial transcript, the court does not believe that doing so is a prerequisite to his offering an opinion on fees.

There is no further declaration from Schratz. The court’s concerns regarding the sufficiency of his opinions and conclusions still exist have not been addressed and they still cause the court to view the declaration with skepticism at the least. On balance, the court finds the Pearl declaration(s) to be far weightier.

In its prior ruling, the court indicated (and Pearl agrees in his most recent declaration) that the contingent nature of plaintiff counsel’s representation should either be reflected in the hourly rate or the multiplier, not both and not neither. (See 3/3/23 Pearl Decl., ¶8.) Generally, the better approach is to consider the hourly rate from the non-contingent perspective and then consider a multiplier. Indeed, that is the teaching of the cases discussing attorneys’ fee awards, and that is what the court does here. Pearl’s most recent declaration has a chart that lists hourly rates granted in the Los Angeles area. (Id. at ¶12.) The chart is not entirely accurate. For example, it lists a July 2022 fee award in the case T.J. Simers v. Los Angeles Times Communications (BC524471) as awarding $1,300/hour to three attorneys (Shegerian, Nick Rowley, and Courtney Rowley), and $1,000/hour to another (Nguyen). But the court actually awarded $900 to Shegerian and Nick Rowley, $700 to Courtney Rowley, and $600 to Nguyen. (BC524471 Order, p. 12.) The court is not especially convinced by Pearl’s reliance on BC601844 (Southern California Gas Leak Cases). That is a class action lawsuit. While FEHA claims are complex, they do not require the sort of juggling and coordination that class action suits require. The case BC699931 (Thu Nugyet Thi “Nicki” Tran v. Golden State FC, LLC et al.) contains fees at the higher end of the spectrum. For example, Shegerian was granted $1,300 per hour. The order, however, does not explain what factors the trial court considered in coming to this decision, except to say that Shegerian’s advocacy was “excellent.” Pearl makes clear that his hourly rate opinion is for non-contingent rates; the hourly rates are not increased to reflect the risk that a contingent fee imposes on counsel. While the chart is not entirely dispositive, the court does believe that it, and the other points raised in the Pearl declaration(s) are sufficient to establish a reasonable baseline of fees in cases that, though not identical, are reasonably comparable to the one at bench. And the Los Angeles-area numbers helpfully establish a range of hourly rates that the court can consider.

The court next considers the individual hourly rates presented by plaintiff’s attorneys in this matter. The court has used the older rates disclosed in the prior declarations as a baseline for plaintiff’s counsels’ hourly rates and has increased those slightly to account for inflation, increased experience, and the quality of legal services offered in this case. The baseline hourly rates should already account for counsels’ established reputations as leading attorneys in the field, considering that they have all attested to the length of their experience. However, where the court feels the baseline rates are not accurate, the court will make the necessary adjustments.

The court sets out below the rates it will award. An additional word as to attorneys Musell and Hyams is appropriate given that they did the lion’s share of the work are at the proverbial “top of the pleadings.” They were also trial counsel.

Musell originally attested that she was awarded $700/hour for a religious discrimination case in Sacramento Superior Court. (1/12/23 Reply Musell Decl., Exh. A [Brown v. California Dept. of Corrections and Rehabilitation Order].) This rate obviously does not take into account the general rates in Los Angeles. An additional increase is necessary due to her excellent work in this case, inflation, and increased expertise in the interim. The court believes that taking all of that into account, her requested hourly rate is reasonable.

As for Hyams, her most recent fee award is a December 20, 2021, arbitration fee award based on a Bay Area hourly rate of $950. (12/5/22 Hyams Decl., ¶56.) This is a relatively recent fee award, meaning there is little need to adjust for inflation. The court has a lot of evidence before it and it is not sure if Hyams explains the nature of the case, but given her area of practice, the court assumes it was an employment-related case. Further, Bay Area rates are similar (though not the same) as Los Angeles-area rates. The court will award Hyams $1100, reflecting a reasonable increase given the hard fought nature of the instant case as well as the court’s observation of the quality of her work at trial.

Defendant suggests that Pearl’s opinion supporting those rates is flawed because the rates he uses are not the median or mean rates, but rather are at the highest quartile of rates (that is, the 75th percentile). The court agrees that this is what Pearl has done. However, the court agrees with Pearl that such is appropriate here. The quality of lawyering was high; far beyond what the court would expect of an average lawyer—even with the years of experience the lawyers here exhibited. The court believes it is therefore appropriate to award fees at the higher level. Of course, one cannot count that twice. Many of the considerations that go to the enhancement are duplicative of the justification for the higher hourly rate. The court has considered that issue, but has done so in the enhancement analysis rather than the hourly rate analysis.

The above examples are the court’s view on the requested hourly rates. The court will not go through each analysis individually, but its general approach is reflected above. The court grants the non-contingent hourly rates as follows:

Wendy Musell $1000

Jean Hyams $1100

Leslie Levy $1000

Sharon Vinick $1000 (The court notes that there is very little in the official record to support the requested rate here for Vinick)

Darci Burrell $1000

Maraka Willits $850 (The court is aware that the most recent approved rate for Willits is $550, but the court believes that her experience level warrants a higher rate)

Brittany Wightman $425

Bar-Certified Law Student $350

Paralegal/Legal Assistant $225

Multiplier. “Under Serrano III, the lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including, as relevant herein, (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. (Serrano III, supra, 20 Cal.3d at p. 49.) 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. 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.” ’ (Ibid.)” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132, parallel citations omitted.)

The court believes a multiplier is warranted here. Turning to the specific factors, the court cannot say that there were tons of novel and difficult legal questions involved, although there were some issues. That said, the facts in the case were not as straightforward as some FEHA cases and there was the confounding factor whether plaintiff had resigned or actually suffered an adverse employment action, as well as factual questions concerning accommodations. Given the high hourly rates, though, no multiplier is appropriate for this factor. One would expect a thorough analysis to be completed without undue burden by counsel in the top quartile of advocates in Los Angeles. Turning to the level of skill, as the court stated above, the skill level here was high. But again, that is expected at the rates the court just approved. There is no upward adjustment based on this factor. The third factor considers whether counsel had to turn away other work to handle this case. The court believes that plaintiff made that showing. The case was hard fought, and the State of California never conceded or came close to conceding liability (nor was it obligated to do so). The case was tried all the way to verdict. The number of hours counsel put into the case (almost none of which are challenged) suggests that taking on this case and litigating it properly imposed a limit on counsel’s ability to take on other clients. The court notes that other, less dedicated counsel, might have settled the case before trial to avoid the heavy burden that this trial imposed. The court believes that an upward adjustment is appropriate based on this factor. Finally, the case was certainly contingent. Defendant argued strongly that plaintiff should take nothing at all, and counsel here faced a very real risk that the jury would agree. That matters. This is not a case where settlement is a virtual certainty, as is the case in many actions with fee-shifting statutes. (Lemon Law cases, for example, rarely result in defense judgments.) It is one where plaintiff’s counsel rolled the dice and the dice could well have come up against them. Had that occurred, counsel would have been left with years of work and nothing (financially) to show for it. In the court’s view, the contingent nature of the case warrants a substantial enhancement. The court is not quite willing, however, to agree that a full 100% enhancement is appropriate. While the contingent risk was significant, the court is not quite prepared to say that the case was little more than a coin toss. The court will award a 75% enhancement, meaning that the lodestar fees will be multiplied by 1.75. That enhancement applies only for fees incurred up to and including the jury verdict. After that, the likelihood of recovery was significantly higher. Of course the motion for a new trial/jnov might have been granted and the appeal may well turn out to be successful, but it is fair to say that the likelihood of a recovery is higher after the verdict came in than before. For hours billed after the verdict, the court will award a 25% enhancement, meaning that the lodestar fees will be multiplied by 1.25.

Number of Hours. The minor billing disputes over travel time and conferences have been resolved by the Musell’s 5 percent cut across all hours requested by her, as well as an extraordinary voluntary 50 percent cut for all hours incurred for the supplemental briefing. (3/3/23 Musell Decl., ¶12, Exh. E.) In its prior order, the court found very few hours to be of concern other than the time to travel to and from Los Angeles. The voluntary cuts essentially capture that problem and the court believes that no additional hours need be rejected.

Additional Fees Requested in Reply and Supplemental Briefing. Defendant previously objected to plaintiff’s request for additional costs in reply. It claimed that by providing the number for the first time in reply, it lacked notice of the costs. Defendant further asserted that plaintiff could not recover any costs for Pearl.

As to Pearl, the court believes that his fees are recoverable. Those costs are reasonable and come within the ambit of Government Code section 12965. “In civil actions brought under this section, the court, in its discretion, may award to the prevailing party, including the department, reasonable attorney's fees and costs, including expert witness fees, except that, notwithstanding Section 998 of the Code of Civil Procedure, a prevailing defendant shall not be awarded fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so.” (Gov. Code, § 12965, subd. (c)(6).) Given that the hourly rate was so hotly contested, the court believes that plaintiff acted quite reasonably in retaining an expert.

As to the amount, it is true that defendant has not had an opportunity to object or brief the reasonableness of the additional fees sought. The court will therefore allow defendant to submit an opposition brief limited only to the number of hours sought. The court’s determination above as to hourly rates and enhancements will apply. (The only exception is if a new timekeeper was added, in which case the hourly rate may be challenged.)

Summary. The court therefore GRANTS the motion for attorneys’ fees and costs per the above analysis. A proposed order should be submitted to the court setting forth the hours billed (after the voluntary cuts as noted by both Hyams and Musell), rates as ordered by the court, the enhancement, costs, and the final amount with regard to the hours sought in the original motion. The proposed order should be submitted to defendant to approve as to form. Defendant will have two weeks from today to submit a supplemental opposition going to the additional fees and costs. Plaintiff will have one week from then to submit a supplemental reply. The court urges the parties to attempt simply to resolve that issue as between them.

PRIOR TENTATIVE RULING

This is a motion for fees. The court will discuss it with counsel.

Plaintiff seeks a lodestar fee recovery of $2,901,323.43 (as set forth in reply) plus a 100% enhancement as to fees. Defendant concedes that plaintiff is the prevailing party, but disputes the lodestar amount and the enhancement request.

The lodestar is the first item of inquiry. In a fee recovery motion, the court must first determine the “lodestar” amount, which is defined as the reasonable hourly rate multiplied by the number of hours worked. After that, the court must determine whether an enhancement (or, at least in theory, reduction) is appropriate based on the circumstances of the case. (Hill v. Affirmed housing Group (2014) 226 Cal.App.4th 1192.) No one really disputes that methodology.

Plaintiff seeks hourly rates for the principal lawyers, Musell and Hyams, of $1000 and $1100, respectively. Other lawyers have requested rates of $1200 (Levy), $1100 (Vinick), $1050 (Burrell), $900 (Willits), and $425 (Wightman). Law students are billed at $350 and paralegals are billed at $225. As for the attorneys, these rates are steep (except perhaps for Wightman). That is not to say that they are excessively high, but they are not so low that they are facially proper without more.

In support of the hourly rates, plaintiff has submitted declarations by other lawyers. Those declarations are inadequate. They are from other lawyers who litigate similar sorts of cases. But the declarations are not fully sufficient. The Derubertis declaration is a good start, though. That declaration sets forth other fee awards given. However, while there is evidence that certain fees were awarded, there is no effort to determine whether those fees were at the very highest end of the range or are typical of fees awarded in the Los Angeles (or maybe Bay Area) market. There is also no real discussion as to the experience and details of those attorneys and cases as compared to counsel here. (Derubertis also relies on declarations in the other cases for their truth, which strikes the court as hearsay. While experts can rely on hearsay, under the Sanchez rule they cannot rely on case specific hearsay. Whether this kind of hearsay is case specific or general is an interesting question, but not one that the court must resolve right now. At a minimum, though, to the extent that fees were in fact awarded by a court is not hearsay; the award is a jural act.) The Harrison declaration, in contrast, if far more conclusory and it is hard to say that it truly gives the kind of support needed for these hourly numbers. The Henning declaration provides some support, but it is also somewhat conclusory and relies on surveys about which it is hard for this court to judge. The Alexander declaration is relatively conclusory. The Reinach declaration is also conclusory and of little help. In short, the Derubertis declaration is the one that comes closest to justifying these rates. While not fully sufficient, it does explain the reasoning underlying the conclusion and the bases therefor and has some discussion comparing counsel here to others who were awarded rates that are commensurate with those being sought.

In opposition, defendant submitted a detailed declaration by Schratz, an expert who has set forth credentials in reviewing bills from lawyers. Schratz’s declaration is very detailed, but it also has problems. The court addresses some of the specific ones.

The court disagrees with Schratz that small firms should be presumed to command lesser rates than large ones. The hourly rate to set is based on a myriad of factors, but size of firm is not one that the court believes any firm touts. Rather, the court agrees that the lawyer’s reputation and experience play into the rate, but there is no reason to believe that lawyers at smaller firms have a lesser reputation than lawyers at larger firms. In some cases that may be true, but in others the opposite will be true. The question of the reasonable hourly rate is not, in the court’s view, influenced by firm size, or at least not directly so.

The court agrees with Schratz that the market pressure that exists when a firm charges and collects based on hourly rates is not present here. In other words, a firm that bills by the hour and collects the fees billed from the client on a regular basis has provided some evidence—based on that alone—that the hourly rate is reasonable. Clients, especially sophisticated ones, are not in the habit of paying inflated hourly rates. The market forces at work will therefore compel the firm to bill at a reasonable rate or it will price itself out of the market. On the other hand, a firm that does not bill in that manner—which is the case here—cannot rely on that market check as an indicator of reasonableness. Bronshteyn was not billed by the hour and knew that she would never have to pay counsel their hourly rate out of her own pocket. As such, the court cannot rely on the market to act as a check on the hourly rate.

The court disagrees with Schratz that the lack of sending out actual bills that must be paid encourages counsel to over work or over bill. (The court recognizes that this goes more to the number of hours than the hourly rate, but the court discusses it here because the court is discussing the Schratz declaration.) Plaintiff’s counsel here appears to have kept contemporaneous billing records to reflect the time actually spent. The court has no reason to believe that the records are false. True, in the case of actual bills there is a client looking at the bills in real time and able to question any time that appears excessive—something that is not present here. But that does not translate into any reason to doubt that the work was actually done. That is, the court rejects the notion that there were entries for time not actually spent. To be clear, Schratz does not accuse plaintiff’s counsel of including any time not actually spent. The court wants to make it clear that while the market does not impose an independent dis-incentive for that, neither does the lack of a market cause the court to question the entries in that way. The other side of that coin is that plaintiff’s counsel has an incentive to bill time unnecessarily—that is, counsel can add a bunch of time doing tasks that might not need to be done because no one will actually be looking over the bill in real time. But in fact, the court suspects that the opposite is true. Unless the lawyers here simply have nothing better to do, plaintiff’s counsel in a contingency case has every incentive not to do unnecessary work. If the additional work will not translate into a greater recover for the client, then the additional work may not lead to a greater fee at all. (That is more obviously true in a regular contingency case, where the fee comes solely from the recovery and not from a fee-shifting statute, but even in the fee-shifting context, plaintiff’s counsel takes a greater risk doing unnecessary work because in the event the contingency does not come to pass, the work is for naught and no compensation for it will be paid.) In other words, the court is of the view that the hours billed are reliable given that the records are contemporaneous. That is not to say that they are conclusively reasonable; it is only to say that the court does not look at them askance.

The court also disagrees with Schratz’s use of hourly rates in other contexts. Again, the court must look at rates in Los Angeles, and the evidence as to Los Angeles rates has to be granular enough so that the rates relate to attorneys similarly situated to those here. Schratz does not really do that.

Schratz also attempts to use rates that were awarded to these lawyers in the past and simply move them forward using the average rate increase of 4%. That is too simplistic. Even assuming that the 4% number is correct as a general matter to account for hourly rate inflation, it does not answer the question. Hourly rates also change due to experience. The easy example, though not really applicable here, is the increase in rates between a first year lawyer and a second year lawyer. A law firm might well increase its hourly rate by 4% in January of a given year. But the specific attorney’s rate will increase by more than that because the specific attorney will not longer be billed at first year levels. Thus, the increase will account for both the general 4% increase and the increase in experience and will thus likely be more than 4%. Of course, that stark example is less telling with senior lawyers. There is a great difference between an attorney who passed the bar last week and one that passed the bar a year ago. There is far less of a difference between an attorney who passed the bar 26 years ago and one who passed the bar 27 years ago. But there can still be differences. Thus, an attorney awarded a specific hourly rate in 2014 might have had a lot of additional experience in the 8 years after; that attorney may have won a major and notorious case during that time; that attorney may have received impressive accolades. All of those things can easily cause the reasonable hourly rate to climb by far more than the 4% that Schratz uses. Schratz makes no effort here to determine whether any such factors might apply to counsel, although plaintiff makes no effort to do so either to explain why the much larger hourly rate increases are justified.

The court also disagrees with Schratz in terms of the contingent effect. Schratz essentially opines that the lodestar should be calculated independent of the contingent nature of the fee, and that no enhancement is appropriate either. Plaintiff, on the other hand, seems to argue that the contingent nature of the fee justifies a higher hourly rate and an enhancement. The court is in the middle. The contingent nature of the fee must be incorporated into the calculation, but once and not twice.

Thus, one could argue that the reasonable hourly rate for a contingent fee is higher than for a non-contingent one. By way of example, the court has seen fee agreements where the hourly rate is billed at a premium to the lawyer’s regular hourly rate but the lawyer agrees to collect any fees only from a recovery. (That is usually done by firms that generally bill by the hour, but the court has seen such agreements and the increase is expressly tied to the contingent nature of the fee.) One could argue that the higher hourly rate is the “reasonable” rate given the increased risk of non-payment. If that is the case, however, an enhancement would not be appropriate, for the increased risk was incorporated into the hourly rate. However, the opposite is also true. One could look at the hourly rate as being the same whether collection is contingent or not, but then add an enhancement to deal with the added risk. In theory, the total fee ought to be about the same either way; it is just where in the calculation the risk is placed. Here, plaintiff’s evidence does not explain whether the supporting hourly rates were then subject to enhancement or not, so the court cannot tell whether it is double-counting or not. The court is aware that plaintiff also seeks an enhancement due to the result obtained and the skill brought to bear. The court disagrees. As to the skill brought to bear, that ought to be considered in setting the hourly rate. And, while the case was certainly significant and hard fought, the court does not see any truly cutting-edge issues that would warrant an enhancement on this basis nor does the court see a basis for an enhancement based on the quality of the work. By that, the court does not mean to disparage the quality of the work. Far from it. But at the hourly rates counsel seeks, that kind of quality is assumed. As for the result obtained, the court is not of the view that this factor translates into an enhancement. The court is also aware that there were a lot of hours and that this plainly had an impact on counsel’s ability to take on other matters. Even so, that is adequately reflected in the hourly rate and the contingent nature of the case (in other words, if the contingent nature yields an enhancement, then enhancing it again based on the same risk is double-counting; and if the contingent nature yields a higher hourly rate, then again enhancing it again is double counting.)

In short, the court does not believe that plaintiff has made out its case justifying the hourly rates of its lawyers (except Wightman, whose rate does not appear to the court to be excessive based on the court’s own experience). But defendant has not really done the job either. The difference is significant, as Schratz is proposing about a 1/3 reduction in the hourly rate. Based on this evidence, the court is reluctant to set its own rate.

As to the number of hours billed, the court notes with some satisfaction that Schratz actually has only minimal disputes with the number of hours. Generally, the court agrees with plaintiff as to the number of hours billed. There is one exception, though, and that is travel time. Plaintiff was, of course, entitled to choose out of town lawyers to run the case. The court has no quarrel with it, and plainly plaintiff’s lawyers did their job. The court has also agreed to award as costs the various travel expenses. However, billing for travel time is a bridge too far. Note that this is not time that a lawyer was travelling but also working—that time can be billed because of the work done, not the travel. The court is aware that many clients refuse to pay for travel time, even where the travel is to locations outside the lawyers’ home and outside the jurisdiction where the case is pending. It is far from clear that such time—especially at these rates—is appropriate. In other words, the court agrees with Schratz that plaintiff could retain out of town lawyers, but it is unreasonable to include as part of the lodestar their hourly rate to get to the jurisdiction or for travel generally.

A quick note on additional costs in reply. Plaintiff added some additional requests to which defendants have objected. Because (as discussed below) the court believes more needs to be done, the court is disinclined to strike those requests on the theory that they were brought forward in reply. There is an additional question whether plaintiff’s declarants are truly “experts.” Given the abbreviated nature of the declarations they submitted thus far, the court is not inclined to include their fees as experts. However, if plaintiff chooses to employ an expert as discussed below, that cost is properly sought. While the court understands that these experts are not the typical experts in that their testimony does not go to anything decided at trial, to the extent that they are needed to support the hourly rates here, the court at least tentatively agrees that they come within Government Code section 12965.

So where does that leave us? There is a pretty large difference. In terms of lodestars, Plaintiff is at $2.9 million and defendant is at $1.7 million. And, of course, plaintiff wants an enhancement. That is a $1.2 million difference in lodestar plus the enhancement. For that kind of money—which is more than most cases in the Superior Court all in—a little more evidence and a little more process is appropriate. The court is inclined to allow both sides to supplement their supporting papers as to hourly rate (only). The court is also inclined to allow those who submit expert declarations to be deposed. The court is inclined to follow the federal practice here: the experts ought to exchange reports setting forth the hourly rate to which they opine and the reasoning therefor, to be followed by depositions. Plaintiff’s expert(s) ought to be deposed first, as plaintiff ultimately has the burden here. While the court is reluctant to add yet more briefing to an already large docket, the amount in controversy is between $1.2 million and about $3.5 million (depending on the enhancement), and that is worth taking the time to do right. The court will not likely base its decision on the number of declarations; rather it will be the strength of the declarations. Plaintiff might well prevail with just one expert declaration.

The court also does not mean to suggest that it views the rates sought as unreasonable. The court notes that this was hard fought litigation and counsel were experienced and able. The rates here may well fall within the range of reason and be approved. The court is merely saying that before awarding millions in fees or ordering over $1 million in fee reductions and denying any enhancement, more is needed.

The court also suggests that the parties might want to see if they can settle this aspect of the case. That is, to avoid risk and uncertainty, the parties might be able to reach an agreement as to a reasonable fee amount. In so agreeing, defendant would not be agreeing to waive any rights it has to appeal the judgment on any ground (other than the amount of fees), nor would defendant be agreeing to waive a challenge to the amount of fees if there is a material change in the underlying judgment. But if the judgment stands, defendant would agree that the agreed-upon fee is proper. The court is not (of course) ordering the parties to agree; it is merely saying that because the largest two issues are the hourly rate and how to deal with the contingent nature of the case, it might be something to which an agreement can be had. If not, then not.

The court will discuss an appropriate schedule with the parties.