Judge Michael P. Linfield, Case Number: 19STCV06669, Date: 2023-06-20 Tentative Ruling

Judge: Michael P. Linfield, Case: 19STCV06669, Date: 2023-06-20 Tentative Ruling

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Case Number: 19STCV06669 Hearing Date: July 21, 2023 Dept: 34

SUBJECT: Motion to Strike or, in the Alternative, Tax Costs

Moving Party: Plaintiff/Cross-Defendant Trellis Research, Inc. and Cross-Defendant Nicole Clark

Moving Party: Defendant/Cross-Complainant Andrew Thaler

SUBJECT: Motion to Tax Costs

Moving Party: Defendant/Cross-Complainant Andrew Thaler

Resp. Party: Plaintiff/Cross-Defendant Trellis Research, Inc.

SUBJECT: Motion for Attorney’s Fees

Moving Party: Defendant/Cross-Complainant Andrew Thaler

Resp. Party: Plaintiff/Cross-Defendant Trellis Research, Inc. and Cross-Defendant Nicole Clark

Thaler’s Motion for Attorney’s Fees is GRANTED in part.

Trellis’s Motion to Tax Costs is GRANTED in part.

Thaler’s Motion to Tax Costs is GRANTED.

Thaler is awarded $89,901.82 against Trellis and Clark, jointly and severally; this consists of attorneys’ fees of $48,706.00, and costs of $41,195.82.

The fees and costs awarded are for those causes of action involving Labor Code section 1194. All other fees and costs are for those causes of action involving Code of Civil Procedure section 1032, and they are to be borne by the Parties that incurred them.

BACKGROUND:

On February 26, 2019, Plaintiff Trellis Research, Inc. filed its Complaint against Defendant Andrew Thaler on causes of action for intentional interference with contractual relations and declaratory relief.

On April 25, 2019, Defendant/Cross-Complainant Andrew Thaler (“Thaler”) filed: (1) Answer to the Complaint; and (2) Cross-Complaint against Cross-Defendants Nicole Clark (“Clark”), Trellis Research, Inc., Anna Barber, Techstars Central LLC, Techstars Los Angeles 2017 LLC, and Techstars Accelerator Investments LLC.

On May 11, 2021, Plaintiff/Cross-Defendant Trellis (“Trellis”) filed its First Amended Complaint.

On June 1, 2021, the Court found related cases 19STCV06669 and 20SMCV01595 and designated 19STCV06669 as the lead case.

On July 30, 2021, by request of Thaler, the Clerk’s Office dismissed without prejudice Cross-Defendants Techstars Los Angeles 2017 LLC and Techstars Accelerator Investments LLC from the Cross-Complaint.

On December 7, 2021, by request of Thaler, the Clerk’s Office dismissed without prejudice Cross-Defendants Techstars Central LLC and Anna Barber from the Cross-Complaint.

On May 1, 2023, the Court entered Judgment in this matter. The Judgment ordered, adjudged, and decreed: (1) that Trellis shall recover $915,000.00 in compensatory and punitive damages from Thaler for intentional interference with contractual relations; (2) that Thaler shall recover $22,265.00 in compensatory damages from Trellis for failure to pay minimum and overtime wages; and (3) that Thaler shall recover 534,000 shares of Trellis from Trellis and Clark as equitable declaratory relief for breach of fiduciary duty.

On May 16, 2023, Thaler filed his MC-010, Memorandum of Costs (“Thaler’s Memorandum”). On May 17, 2023, Thaler filed his MC-011, Cost Worksheet.

On May 16, 2023, Trellis filed its MC-010, Memorandum of Costs (“Trellis’s Memorandum”).

On June 15, 2023, Trellis and Clark filed their Motion to Strike or, in the Alternative, Tax Costs (“Trellis and Clark’s Motion to Tax Costs”). Trellis and Clark concurrently filed Declaration of Alyssa D. Bell.

On June 15, 2023, Thaler filed his Motion to Tax Costs (“Thaler’s Motion to Tax Costs”).

On June 20, 2023, the Court granted in part Thaler’s Motion to Vacate Judgment. The Court vacated, amended, and corrected the Judgment regarding the amount of shares declared to be Thaler’s.

On June 28, 2023, Thaler filed his Motion for Attorney’s Fees. Thaler concurrently filed: (1) Memorandum of Points and Authorities; (2) Declaration of Mark Butler; (3) Declaration of Stephen D. Demik; (4) Declaration of Mark Mazda; and (5) Declaration of Robert G. Loewy.

On July 7, 2023, Trellis and Clark filed: (1) Opposition to Motion for Attorney’s Fees; and (2) Opposition to Thaler’s Motion to Tax Costs. In support of their Opposition to Motion for Attorney’s Fees, they concurrently filed: (1) Declaration of Alyssa D. Bell; and (2) Declaration of Guy C. Iversen.

On July 10, 2023, Thaler filed his Opposition to Trellis and Clark’s Motion to Strike, or in the Alternative, Tax Costs.

On July 14, 2023, Trellis and Clark filed their Reply regarding their Motion to Strike or, in the Alternative, Tax Costs.

On July 14, 2023, Thaler filed his Replies regarding his Motion for Attorney’s Fees and his Motion to Tax Costs.

On July 17, 2023, the Court issued its Amended Judgment, which amended to 583,333 the number of shares of Trellis awarded to Thaler from Trellis and Clark as equitable declaratory relief for breach of fiduciary duty.

ANALYSIS:

The Court considers the three motions together.

I. Legal Standard

A. Legal Standard for Motion to Tax Costs

“Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” (Code Civ. Proc., § 1032, subd. (b).)

Prevailing parties seeking to claim costs must comply with California Rules of Court, rule 3.1700(a), and parties seeking to contest costs must comply with California Rules of Court, rule 3.1700(b).

B. Legal Standard for Motion for Attorneys’ Fees

“The following items are allowable as costs under Section 1032: . . . (10) Attorney’s fees, when authorized by any of the following: (A) Contract. (B) Statute. (C) Law.” (Code Civ. Proc., § 1033.5, subd. (a)(10).)

Parties seeking to claim attorneys’ fees must comply with California Rules of Court, rule 3.1702.

II. Discussion

A. The Parties’ Arguments

1. Thaler’s Motion for Attorney’s Fees

Thaler moves the Court to award him $986,591.25 in attorney’s fees for the entire action, or in the alternative to award him $264,000.00 in attorneys’ fees for the recovery of minimum wages and unpaid overtime. (Motion for Attorney’s Fees, p. 13:2–6.)

Thaler argues: (1) that Thaler is entitled to attorney’s fees under Labor Code section 218.5; (2) that Thaler is entitled to attorney’s fees under Labor Code section 1194; (3) that the reasonable amount of fees incurred is $986,591.25; and (4) that at a minimum Thaler is entitled to recover $264,000.00 in attorney’s fees under Labor Code section 1194. (Motion for Attorney’s Fees, pp. 1:17–18, 2:13, 8:7, 8:13, 11:23–24.)

Trellis and Clark disagree, arguing: (1) that Thaler is not entitled to attorney’s fees pursuant to Labor Code section 218.5; and (2) that Thaler is only entitled to a minimal amount of attorney’s fees under Labor Code section 1194. (Opposition to Motion for Attorney’s Fees, pp. 8:25, 14:11–12.)

In his Reply, Thaler reiterates his arguments.

2. Trellis’s Motion to Tax Costs

Thaler claims $58,510.30 in costs. (Thaler’s Memorandum.) This consists of:

(1) $595.00 in filing and motion fees;

(2) $1,089.36 in jury fees;

(3) $25,015.80 in deposition costs;

(4) $1,350.00 in service of process;

(5) $2,674.00 in court reporter fees;

(6) $4,533.66 in models, enlargements, and photocopies;

(7) $924.14 in electronic filing or service fees; and

(8) $22,328.34 in “other” costs.

(Id.) (Although not critical to the Court’s analysis, Thaler’s Memorandum incorrectly notes the total as $58,510.00.) The costs are further broken down in Thaler’s MC-011, Cost Worksheet.

Trellis and Clark move the Court to either: (1) strike Thaler’s Memorandum because he is not the prevailing party; or (2) tax $17,314.48 from Thaler’s Memorandum because those costs are unrecoverable. (Trellis and Clark’s Motion to Tax Costs, pp. 7:6–7, 10:6–7.)

Thaler disagrees, arguing: (1) that Thaler is entitled to costs under Labor Code section 218.5; (2) that Thaler is entitled to costs under Labor Code section 1194; and (3) that Thaler’s claimed costs were all reasonably necessary to the conduct of the litigation. (Opposition to Trellis and Clark’s Motion to Tax Costs, pp. 2:1–2, 3:10–11.)

In their Reply, Trellis and Clark reiterate their arguments, although they now concede that Thaler should be awarded $1,000.00 in costs pursuant to Labor Code section 1194. (Reply regarding Trellis and Clark’s Motion to Tax Costs, p. 7:6–7.)

3. Thaler’s Motion to Tax Costs

Trellis claims $49,531.21 in costs. (Trellis’s Memorandum.) This consists of:

(1) $2,902.66 in filing and motion fees;

(2) $17,587.40 in deposition costs;

(3) $7,080.50 in service of process;

(4) $10,813.25 in court reporter fees;

(5) $3,637.78 in models, enlargements, and photocopies of exhibits; and

(6) $7,509.62 in “other” costs.

(Id.)

Thaler moves the Court to tax Trellis’s Memorandum, arguing: (1) that after the post-judgment motions filed in this case, the Court should not award Trellis its costs because Thaler does not expect that Trellis will have a net monetary recovery in this case; (2) that even if Trellis prevails on the post-judgment motions, the Court should exercise its discretion pursuant to Code of Civil Procedure section 1032, subdivision (a)(4) to deny Trellis its costs; and (3) that if the Court is inclined to award costs to Trellis, it should defer its ruling until considering Thaler’s Motion for Attorney’s Fees. (Thaler’s Motion to Tax Costs, p. 2:3–24.)

Trellis and Clark disagree, arguing: (1) that Thaler is not the prevailing party pursuant to Code of Civil Procedure section 1032 because he did not receive damages for his breach of fiduciary duty claim; (2) that fees allowed by statute are costs, not damages, and thus they are not part of the prevailing party analysis pursuant to Code of Civil Procedure section 1032; (3) that after considering the outcomes of the post-judgment motions, it is clear that Trellis is the prevailing party because Trellis accomplished its litigation objectives. (Opposition to Thaler’s Motion to Tax Costs, pp. 3–5.)

In his Reply, Thaler concedes that Thaler’s Motion to Tax Costs is largely moot as a result of the Court’s Minute Order dated June 20, 2023, which denied three of the post-judgment motions and only granted limited relief on the last post-judgment motion. (Reply regarding Thaler’s Motion to Tax Costs, p. 2:1–4.) Thaler now proposes that the Court issue two cost awards: one award for the wage claims and one award for the interference with contract claim. (Id. at p. 2:5-8.) Thaler cites Cruz v. Fusion Buffet, Inc. (2020) 57 Cal.App.5th 221, 235 in support of his proposal. (Id.)

B. Linkages of “Prevailing Party” and the Causes of Action

The Court agrees that costs (and, where applicable, attorneys’ fees as costs) should be split based on the causes of action.

“By providing that the prevailing party under one statute is entitled to fees, and that a different prevailing party under another statute is entitled to fees, the Legislature expressed an intent that there can be two different prevailing parties under separate statutes in the same action. Thus, a net monetary award to a party does not determine the prevailing party when there are two fee-shifting statutes involved in one action.” (Sharif v. Mehusa (2015) 241 Cal.App.4th 185, 194; accord Aleman v. Airtouch Cellular (2012) 209 Cal.App.4th 556, 583–84 [holding that when there are multiple fee awards based on different causes of action, a trial court must determine the amount of reasonable attorney’s fees and apportion them by the separate causes of action as appropriate].)

Here, the Amended Judgment ordered that: (1) Trellis shall recover $915,000.00 in compensatory and punitive damages from Thaler for intentional interference with contractual relations; (2) Thaler shall recover $22,265.00 in compensatory damages from Trellis for failure to pay minimum and overtime wages; and (3) Thaler shall recover 583,333 shares of Trellis from Trellis and Clark as equitable declaratory relief for breach of fiduciary duty. Notably, the Jury found for Thaler on Trellis’s cause of action for commercial disparagement, and the Jury also found that Thaler was terminated for cause.

Thus, this action involves two different statutes that allow for the recovery of costs: (1) Code of Civil Procedure section 1032; and (2) Labor Code section 1194.

Code of Civil Procedure section 1032 applies to the following causes of action: (1) Trellis’s cause of action for intentional interference with contractual relations; (2) Trellis’s cause of action for commercial disparagement; (3) Trellis’s cause of action for declaratory relief; (4) Thaler’s cause of action for declaratory relief; and (5) Thaler’s cause of action for breach of fiduciary duty. These causes of action implicate section 1032 because there is no other cost recovery statute that applies to these causes of action. (Code Civ. Proc., § 1032, subd. (b) [“Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.”].)

The Court notes that, contrary to Thaler’s arguments, the award of shares to Thaler does not implicate Labor Code section 218.5. It is true that a grant of stock can be considered as part of one’s wages. (Lab. Code, § 200, subd. (a); see also Schachter v. Citigroup, Inc. (2009) 47 Cal.4th 610, 618 [“Incentive compensation, such as bonuses and profit-sharing plans, also constitutes wages.”].) However, the Jury found that Thaler was terminated for cause, and Thaler lost his initial right to the shares as wages when he was fired for cause. The shares awarded to Thaler in this case were granted as equitable declaratory relief for Thaler’s cause of action for breach of fiduciary duty — not for his cause of action for unpaid wages. Thus, any issues with the shares implicate Code of Civil Procedure section 1032, not Labor Code section 218.5.

Labor Code section 1194 applies to the following causes of action: (1) Thaler’s cause of action for payment of minimum wages; and (2) Thaler’s cause of action for payment of overtime wages.

“Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney’s fees, and costs of suit.” (Labor Code section 1194.)

“Where Labor Code section 1194 applies, it displaces any application of Code of Civil Procedure section 1032, subdivision (b).” (Cruz, supra, 57 Cal.App.5th at p. 242.)

The Court notes that, contrary to Thaler’s arguments, Labor Code section 218.5 does not cover an employer’s failure to pay minimum wages and/or overtime wages. (Lab. Code, § 218.5, subd. (b) [“This section does not apply to any cause of action for which attorney’s fees are recoverable under Section 1194.”]; see also Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1258–59, citing Early v. Super. Ct. (2000) 79 Cal.App.4th 1420, 1427–30.) While Thaler could have — and did — sue for unpaid wages, that is not an issue that was ultimately determined by the Jury. (See Cross-Complaint, p. 6; see also Minute Order dated January 25, 2023.)

The Court next considers: (1) who is the prevailing party under Code of Civil Procedure section 1032; and (2) who is the prevailing party under Labor Code section 1194. The Court then considers what fee and cost awards, if any, would be appropriate here.

C. The Prevailing Party under Code of Civil Procedure Section 1032

1. Legal Standard

“‘Prevailing party’ includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. If any party recovers other than monetary relief and in situations other than as specified, the ‘prevailing party’ shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed, may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034.” (Code Civ. Proc., § 1032, subd. (a)(4).)

2. Discussion

Code of Civil Procedure section 1032, subdivision (a)(4) contains two sentences. The first sentence contains a list of specific examples to determine who is the “prevailing party” under that statute. The second sentence applies “[i]f any party recovers other than monetary relief and in situations other than as specified”.

a. CCP §1032(a)(4) – First Sentence

Trellis argues that “Thaler has the burden to prove that he is the prevailing party under Section 1032.” (Trellis and Clark’s Motion to Strike, p. 10, fn. 5, citing McKenzie v. Kaiser-Aetna (1976) 55 Cal.App.3d 84, 88.) Trellis is only partly correct on this point. Trellis is the Complainant, and Thaler is the Cross-Complainant; they both claim that they are the prevailing party in this action. Thus, Trellis and Thaler both have the burden to prove that they are the prevailing party on the complaint they filed.

Trellis was awarded $915,000.00 in damages against Thaler, and Thaler was awarded 583,333 in shares of Trellis. Trellis submits evidence that the share price on February 19, 2019 was $0.34 per share. (Decl. Bell in support of Trellis and Clark’s Motion to Strike, Exh. A [Trial Transcript from January 25, 2023], p. 62.) Trellis further argues that Thaler contended in his Motion to Vacate Judgment that each share should be valued at $0.15. (Trellis and Clark’s Motion to Strike, p. 10, fn. 6.)

The Court does not find Trellis’s evidence or arguments to be convincing.

First, Thaler did not make an argument about the share price in any of his current filings, much less in his Motion to Vacate Judgment. Rather, Thaler argued: (1) that he elected to receive shares instead of the cash awarded by the Jury; (2) that if the Court were to grant nonduplicative relief in a post-judgment motion, it should be proportionate to the other shares not granted by the Court as declaratory relief; and (3) that such proportionate, nonduplicative relief would be valued at $519,000.00. (See Thaler’s Motion to Tax Costs, p. 1:21–24; Motion to Vacate Judgment, p. 8:12–22.) Put differently, Thaler had no reason to equate the shares he received to $600,000.00 — he only used that number as a stand-in figure to request additional relief on a proportionate basis. Thaler has not provided the Court with any evidence as to the actual value, past or present, of the shares.

Second, Trellis has not explained to the Court why it should matter that the stock price was $0.34 on February 19, 2019. Given the unspecified language of the statute, it could very well be that the present value of the stock price (or the value of the stock price at the time of the Judgment) is the relevant price. Trellis has not provided the Court with any argument, prior case law, or legislative history on this point, nor has Trellis provided the Court with any evidence of what the present price is for the shares.

Finally, even if the Court assumes that the relevant price is the price as of February 19, 2019, Trellis’s evidence is insufficient to meet its evidentiary burden on what was that actual price. The transcript Trellis provides does not identify which witness is being asked the questions. (Decl. Bell in support of Trellis and Clark’s Motion to Strike, Exh. A [Trial Transcript from January 25, 2023], p. 62.) More importantly, just because investors at a seed round paid $0.34 a share does not prove that the shares were worth that amount. Even at that time, the shares could have been worth less or more — it is difficult for the Court to make a finding on price based solely on what private investors paid for it before it was publicly available.

Neither party has met their burden to demonstrate that they obtained a net monetary recovery. Thus, no part of the first sentence of Code of Civil Procedure section 1032, subdivision (a)(4) applies here.

b. CCP §1032(a)(4) – Second Sentence

The second sentence of Code of Civil Procedure section 1032, subdivision (a)(4) applies “[i]f any party recovers other than monetary relief and in situations other than as specified”.

That is the situation here: (1) Thaler recovered shares, which is a form of non-monetary relief; and (2) none of the other situations listed in the first sentence of the subdivision applied.

Under those circumstances, the prevailing party shall be as determined by the Court, and the Court “in its discretion, may allow costs or not and, if allowed, may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034.” (Code Civ. Proc., § 1032, subd. (a)(4).)

The Court determines that Trellis is the prevailing party. While both Trellis and Thaler appear to have accomplished some of their litigation objectives, Trellis has prevailed. Trellis won $915,000.00 in damages against Thaler; Thaler only managed to obtain a small fraction of the shares he claimed, and an even smaller fraction of Trellis’ overall number of shares. Even if Thaler had taken monetary compensation instead of the shares, that would only have been for $600,000.00.

However, the Court also determines that it would be most appropriate for the Parties to bear their own costs pursuant to Code of Civil Procedure section 1032, subdivision (a)(4). The Jury found that Trellis succeeded on its cause of action for intentional interference with contractual relations and that Thaler succeeded on his cause of action for breach of fiduciary duty. Upon considering the equities, the Court awarded Thaler some, but not all, of the shares he requested. The Judgment ultimately reflects that both sides had legitimate reasons for litigating this action — and that both sides were at least partly at fault. Thus, cost shifting is not appropriate regarding these causes of action under Code of Civil Procedure section 1032.

D. The Prevailing Party under Labor Code Section 1194

1. Legal Standard

“Labor Code section 1194 provides that employees who prevail in an action for any unpaid ‘legal minimum wage or . . . legal overtime compensation’ are entitled to recover attorney’s fees. It is a one-way fee shifting provision.” (Kirby, supra, 53 Cal.4th at p. 1248, emphasis omitted.)

2. Discussion

Thaler is undisputedly the prevailing party regarding the causes of action that fall under Labor Code section 1194. The Jury found in favor of Thaler on both the cause of action for failure to pay minimum wages and the cause of action for failure to pay overtime wages. Even Trellis and Clark now concede that Thaler should be awarded some costs pursuant to Labor Code section 1194, although they disagree with the amount. (Reply regarding Trellis and Clark’s Motion to Tax Costs, p. 7:6–7.)

E. Method for Calculating Recovery

The Parties do not dispute that the appropriate approach for calculating recovery of attorneys’ fees is the lodestar adjustment method, which involves multiplying the number of hours reasonably expended by the reasonably hourly rate. The Court uses the lodestar adjustment method here.¿¿¿

F. Fees and Costs Pursuant to Labor Code Section 1194

1. Apportionment of Fees and Costs

At the top, the Court notes that Labor Code section 1194 allows for recovery of attorney’s fees and costs. However, the only attorney’s fees and costs allowed are those incurred in litigating the minimum wage and overtime causes of action.

2. Attorneys’ Fees and Multiplier

a. The Parties’ Arguments

Thaler’s Counsel argue that their work was “inextricably intertwined,” such that all of their work on this action should be covered. (Thaler’s Motion for Attorney’s Fees, p. 8:20–25.) However, Thaler’s Counsel concede that, by their best estimates, 25% of their time can be apportioned to the causes of action covered by Labor Code section 1194. (Id. at p. 12:1–6.)

Counsel Loewy declares that he spent 220 hours at $645.00 per hour on these causes of action, while Counsel Demik declares that he spent 77 hours at $900.00 per hour on these causes of action. (Decl. Loewy, ¶¶ 18–19; Decl. Demik, ¶¶ 12, 17–18.) This totals $211,200.00 in attorneys’ fees.

Thaler’s Counsel also argue that they should receive a 1.25 multiplier enhancement to the lodestar, which accounts for the contingent risk of this case and the delay in obtaining payment. (Thaler’s Motion for Attorney’s Fees, p. 11:14–22.)

Trellis and Clark argue: (1) that Thaler’s Counsel did not spend as many hours as they claimed on the Labor Code section 1194 causes of action; (2) that Counsel Demik’s hourly rate should not be higher than Counsel Loewy’s hourly rate because Counsel Loewy has significantly more experience handling civil litigation; (3) that Thaler is ultimately entitled to only $22,265.00 in attorneys’ fees; and (4) that Thaler is not entitled to a multiplier. (Opposition to Thaler’s Motion for Attorney’s Fees, pp. 14:11–17, 15:24–26, 17:17–18, 18:15.)

Thaler’s Counsel reiterate their arguments in their Reply regarding the Motion for Attorney’s Fees.

b. Whether the Work was Inextricably Intertwined

The Court finds that the work done on these causes of action was not “inextricably intertwined” with the work done on the other causes of action. The causes of action for failure to pay minimum wages and failure to pay overtime wages are distinct from those for the other causes of action. They involved different issues, and they could have been separately apportioned and accounted for by Thaler’s Counsel.

c. The Number of Hours

The Court agrees with Trellis’s Counsel that the amount of hours claimed for resolution of these causes of action is excessive.

“A plaintiff is not automatically entitled to all hours claimed in the fee request. Rather, the plaintiff must prove the hours sought were reasonable and necessary.” (Rey v. Madera Unified School Dist. (2012) 203 Cal.App.4th 1223, 1243–44.)

“If . . . the Court were required to award a reasonable fee when an outrageously unreasonable one has been asked for, claimants would be encouraged to make unreasonable demands, knowing that the only unfavorable consequence of such misconduct would be reduction of their fee to what they should have asked in the first place. To discourage such greed, a severer reaction is needful.” (Serrano v. Unruh (1982) 32 Cal.3d 621, 635 [cleaned up].)¿¿

“A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.” (Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 990; Ketchum v. Moses (2001) 24 Cal.4th 1122, 1137; Serrano v. Unruh (1982) 32 Cal.3d 621, 635.)¿¿

However, the Court chooses not to deny the fee application on this ground.¿

“When a ‘voluminous fee application’ is made, the court may, as it did here, ‘make across-the-board percentage cuts either in the number of hours claimed or in the final lodestar figure.’ These percentage cuts to large fee requests are, however, ‘subject to heightened scrutiny and the use of percentages, in any case, neither discharges the district court from its responsibility to set forth a ‘concise but clear’ explanation of its reasons for choosing a given percentage reduction nor from its duty to independently review the applicant's fee request.’” (Kerkeles v. City of San Jose (2015) 243 Cal.App.4th 88, 102, quoting Gates v. Deukmejian (9th Cir. 1992) 987 F.2d 1392, 1399.)¿

In making an across-the-board percentage cut, the Court considers, among other factors, that: (1) these Labor Code causes of action involved simple issues that did not require substantial hours of attorney work; (2) the issues at hand – whether minimum wages and overtime wages were paid – was subject to minimal testimony and was not hotly contested at triali; and (3) the invoices do not indicate that these issues were, in fact, actually the subject of significant attorney work.

Rather than nearly 300 hours for these Labor Code causes of action, the Court will award 25% of the requested hours for Thaler’s Counsel.

d. The Hourly Rates

Based upon the information submitted in the various declarations and the Court’s assessment of the prevailing rate for attorneys of comparable skill and experience in the relevant community, the Court finds that Counsel Loewy’s hourly rate is reasonable but that Counsel Demik’s hourly rate is excessive. The Court will award Counsel Loewy’s hours at the rate of $645.00 per hour and Counsel Demik’s hours at the rate of $750.00 per hour.

e. The Multiplier

“The amount of attorney fees awarded pursuant to the lodestar adjustment method may be increased or decreased.¿Such an adjustment is commonly referred to as a fee enhancement or multiplier. The trial court is neither foreclosed from, nor required to, award a multiplier. The Supreme Court has set forth a number of factors the trial court may consider in adjusting the lodestar figure. These include: (1) the novelty and difficulty of the questions involved, and the skill displayed in presenting them; (2) the extent to which the nature of the litigation precluded other employment by the attorneys; and (3) the contingent nature of the fee award, both from the point of view of eventual victory on the merits and the point of view of establishing eligibility for an award.” (Mikhaeilpoor v. BMW of N. Am., LLC (2020) 48 Cal.App.5th 240, 247–28 [cleaned up].)

The Court agrees with Thaler’s Counsel that a multiplier enhancement of 1.25 is appropriate here. This multiplier appropriately accounts for the skill of Thaler’s Counsel in their conduct of this litigation, and the fact that the award of Thaler of minimum wage and overtime for working at a start-up is a new and unresolved area of the law. It has been over 1½ years since attorney Demick entered the case as a contingent lawyer; attorney Loewy has been working on the contingent aspects of this case for even longer.

The Court AWARDS $48,706.00 in total attorneys’ fees for Thaler and against Trellis and Clark, jointly and severally, which consists of a lodestar of $38,964.80 and a multiplier enhancement of 1.25.

3. Costs

Thaler claims $58,510.00 in claimed costs. (See Thaler’s Memorandum.)

Thaler’s Counsel did not make any arguments about apportionment of the $58,510.30 in claimed costs. Based on a review of Thaler’s Costs Worksheet, Thaler’s declarations, and the Parties’ respective filings, it would normally be appropriate to apportion the costs such that only 25% of the costs claimed are allocated to those costs incurred pursuant to Labor Code section 1194.

However, this would tax Thaler’s costs by $43,882.72 — far more than the $17,314.48 that Trellis requests. (See Trellis and Clark’s Motion to Tax Costs, p. 16:25.) The Court will reduce Thaler’s costs by the amount that Trellis requests. The Court does not strike the costs because it is unclear to what extent the costs on these causes of action (unlike the attorneys’ fees) are inextricably intertwined with the costs on the other causes of action, and Trellis has not met its burden on that point.

The Court AWARDS $41,195.82 in costs for Thaler and against Trellis and Clark, jointly and severally.

III. Conclusion

Thaler’s Motion for Attorney’s Fees is GRANTED in part.

Trellis’s Motion to Tax Costs is GRANTED in part.

Thaler’s Motion to Tax Costs is GRANTED.

Thaler is awarded $89,901.82 against Trellis and Clark, jointly and severally, which consists of attorneys’ fees of $48,706.00, and costs of $41,195.82.