Judge: Mark H. Epstein, Case: SC128632, Date: 2023-09-01 Tentative Ruling

Case Number: SC128632    Hearing Date: September 1, 2023    Dept: I

The court appreciates the parties’ stipulation.  The court also understands that defendant continues to maintain its objection to the amount of fees.

In light of the stipulation, the court will accept the modified number of hours.

The court also believes that the hourly rates are appropriate.  They are high, but they are not beyond reason and there is support for them.  (The court also notes that, although not dispositive, defense counsel does not state what its hourly rates are.  To the extent that if defense counsel’s rates are roughly equivalent to plaintiff’s counsel’s rates, it is hard to say plaintiff’s rates are unreasonable.  It is possible, of course.  If defendant wants to pay above-market for legal work so that more is paid than is needed, defendant can do so.  But that is not the inference the court would likely draw.)

The major issues are whether plaintiff is entitled to recover all of his fees even though he did not prevail on much of his theory and what to do about the request for an enhancement.

As to the first issue, the court really does not see that it is feasible to slice the hours worked by particular legal theory as to the rent increases.  Were there readily identifiable hours that were spent to pursue a theory that failed that did not do double duty, the court might be inclined to reduce the hours somewhat to account for that.  But it is simply not feasible here, nor is plaintiff required to do so.  Accordingly, while the court is aware that plaintiff did not recover nearly the amount he sought to recover, the court is not inclined to impose some sort of across the board reduction in the fees on that basis.  Recall that these are not fees imposed by contract; they are fees imposed by statute.  In that light, the court believes that a reduction based on success of various different legal theories would not be appropriate.

That said, though, the court will not apply a multiplier or enhancement.  A word on the reasoning.  The court is aware that plaintiff’s counsel took the case on a contingency.  Where there is a real doubt as to liability, the court tends to give an enhancement to reflect the fact that a reasonable attorney with a certainty of fee payment will charge less per hour than an attorney who risks recovering nothing.  Further, an attorney receiving fees each month takes significantly less risk than an attorney who recovers (if at all) only upon the case’s conclusion.  Both of those facts give rise to some enhancement.  Militating against those enhancements generally would be the likelihood of success.  In some cases, success is a virtual certainty; the question is only the amount of the recovery.  In that case, little or no enhancement is proper.  A second consideration is that fees go up periodically, but the lodestar is generally based on the fee at the time of the motion, not necessarily the amount at the time the work was done.  That is not uniformly the case, but it often is.

However, the motivating force here is neither of those things.  Here the motivating force is that many of plaintiff’s theories were unsuccessful, which resulted in a significantly lower recovery than plaintiff sought—about 25% of the amount for which plaintiff prayed.  In a contract case, that might well result in a lower lodestar rate.  Settled case law holds that where there is not an unqualified success courts have significant discretion in a fee award.  There is less discretion in the statutory case.  But at the same time, the fact that there is no reduction to reflect the partial rather than total success already is an enhancement of sorts.  It would not be just to enhance further, nor is such an enhancement necessary to further the legislative purpose underlying the statute.  The need for a fee award even in a case where the recovery of fees is significantly larger than the award is because absent that kind of enticement, lawyers simply would not take the case.  The Legislature recognized, correctly, that if a fee were capped by the amount of the recovery or a percentage of it, lawyers would be reluctant to take landlord/tenant cases involving allegedly improper rents, especially in units that were not high-end luxury units.  Such has happened, for example, in many personal injury cases.  Some have gone without representation because the injury is not severe enough to attract legal counsel operating on a contingent fee basis.  The court’s job is not to reflect on whether that is a good policy or a bad one; the Legislature has spoken on the subject and concluded that there is a need for a fee statute to attract talented counsel.  That is good enough for the court.  But at the same time, that does not mean that the Legislature intended that the reasonable fee be enhanced even where the recovery sought was not obtained.  The recovery obtained versus the recovery sought is a traditional factor in deciding whether there ought to be an enhancement or reduction of the lodestar, and the court believes it is important here.

Accordingly, the court awards no enhancement.

Plaintiff is entitled to its attorneys’ fees in the lodestar amount sought, as modified by the stipulation, but with no enhancement.  Plaintiff to prepare the order.  It should be submitted to the defense for approval as to form only before being submitted to the court.  For purposes of being crystal clear, approval as to form is not approval as to substance; defendant is free to appeal the amount of the fee award (as is plaintiff) on the merits notwithstanding approval as to form.