Alison Terry v. City of San Diego ( 2014 )

FILED
NOT FOR PUBLICATION JUL 25 2014
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ALISON N. TERRY, No. 12-56779
Plaintiff - Appellant, D.C. No. 3:06-cv-01459-MMA-
KSC
v.
CITY OF SAN DIEGO, MEMORANDUM*
Defendant - Appellee.
Appeal from the United States District Court
for the Southern District of California
Michael M. Anello, District Judge, Presiding
Argued and Submitted April 10, 2014
Pasadena, California
Before: TASHIMA, N.R. SMITH, and MURGUIA, Circuit Judges.
Alison Terry appeals the partial grant of her motion for attorneys’ fees,
which she brought as the prevailing party under 42 U.S.C. § 2000e-5(k) and
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
California Government Code section 12965.1 Reviewing for abuse of discretion,
Dannenberg v. Valadez, 338 F.3d 1070, 1073 (9th Cir. 2003), we affirm in part and
vacate and remand in part.
Guardian of the purse strings. The district court did not abuse its discretion
by improperly assuming a role not supported by law. When read in context, the
district court’s statement that it served as “guardian of the purse strings” is merely
another way of stating the district court’s role—determining a reasonable fee when
there has not been an agreed-upon amount. See Moreno v. City of Sacramento, 534
F.3d 1106, 1111 (9th Cir. 2008) (“[F]ee awards are not negotiated at arm’s length,
so there is a risk of overcompensation. A district court thus awards only the fee that
it deems reasonable.”); Horsford v. Bd. of Trs. of Cal. State Univ., 33 Cal. Rptr. 3d
644, 670-72 (Ct. App. 2005) (discussing process of setting a reasonable fee); 42
U.S.C. § 2000e-5(k); Cal. Gov’t Code § 12965(b).
Reducing requested hours. In calculating the lodestar amount, the district
court did not reduce requested hours for unreasonableness in a manner prescribed
1
Although California courts often look for guidance to federal decisions
construing 42 U.S.C. § 2000e-5(k) to interpret California Government Code
section 12965(b), federal decisions do not control section 12965(b)’s
interpretation. Flannery v. Cal. Highway Patrol, 71 Cal. Rptr. 2d 632, 639 (Ct.
App. 1998). Thus, we review the district court’s order under the precedent
interpreting each statute.
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by law. The district court should have (1) “conduct[ed] an hour-by-hour analysis of
the fee request, and exclud[ed] those hours for which it would be unreasonable to
compensate”; or (2) made “across-the-board percentage cuts either in the number
of hours claimed or in the final lodestar figure.”2 Gonzalez v. City of Maywood,
729 F.3d 1196, 1203 (9th Cir. 2013) (internal quotation marks omitted); Graciano
v. Robinson Ford Sales, Inc., 50 Cal. Rptr. 3d 273, 288 (Ct. App. 2006) (allowing
elimination of hours or reduction of award). When the district court chooses the
latter option, it must explain “its reasons for choosing [the] given percentage
reduction,” Gates v. Deukmejian, 987 F.2d 1392, 1400 (9th Cir. 1993), unless the
total cut is “no greater than 10 percent,” Moreno, 534 F.3d at 1112; see also
Gonzalez, 729 F.3d at 1204, 1205 n.5 (requiring explanations for a five percent cut
when the cumulative percentage of cuts exceeded ten percent). The explanation
requirement applies when a federal court reviews an award of attorneys’ fees under
California Government Code section 12965(b). See Muniz v. United Parcel Serv.,
Inc., 738 F.3d 214, 226-27 (9th Cir. 2013). Here, the district court did not properly
follow either method: Under the first method, the district court did not identify
2
The second option only applies to “massive fee application[s].” Gonzalez,
729 F.3d at 1203. We consider Terry’s fee application “massive,” and the parties
do not argue otherwise.
3
which hours were being eliminated. Under the second method, it did not explain its
reasoning for the particular number of hours reduced, which exceeded ten percent.
Most of Terry’s specific arguments regarding categories of claimed hours
the district court eliminated fail. The district court did not abuse its discretion
under Horsford by reducing claimed hours from counsel’s verified time records,
because the district court did not “disregard[] the time records completely.” 33 Cal.
Rptr. 3d at 673.
The district court also did not abuse its discretion in subtracting some of
Terry’s hours claimed for motion practice as unnecessary or excessive. See
Gonzalez, 729 F.3d at 1203; Horsford, 33 Cal. Rptr. 3d at 673. Terry’s contention
that the district court erred by deducting hours spent on successful motions is
unavailing, because the district court did not find the motions unnecessary or
excessive. Rather, the district court deemed the filing of written briefs unnecessary.
Contrary to Terry’s argument, the law does not require the district court to
compensate for all the time her counsel spent conferring among themselves. She
cites no controlling authority demonstrating such activity is always compensable as
a matter of law. Thus, the district court had discretion to reduce hours so spent,
which it deemed unnecessary or excessive. Gonzalez, 729 F.3d at 1203; Horsford,
33 Cal. Rptr. 3d at 673.
4
The district court did not clearly err, see Richard S. v. Dep’t of Dev. Servs. of
Cal., 317 F.3d 1080, 1086 (9th Cir. 2003), in finding Terry sought to recover fees
for time spent “gossiping.” Terry sought compensation for conversing about the
fact the district judge once worked for the defendant City of San Diego (“the
City”). However, the district court did clearly err by finding Richard Benes billed
14.3 hours on “case administration” when the billing record only reflects 0.9 hours.
Terry contends the district court erred under the federal statute by
disallowing compensation for time spent reading a news article and communicating
with the media. The district court did not abuse its discretion by denying
compensation for such activity after trial, because compensable public relations
work must be “directly and intimately related to the successful representation of a
client.” Davis v. City of S.F., 976 F.2d 1536, 1545 (9th Cir. 1992), vacated in part
on other grounds, 984 F.2d 345 (9th Cir. 1993).
The district court correctly held that attorney hours devoted to clerical work
should be deducted. See id. at 1543; Collins v. City of L.A., 139 Cal. Rptr. 3d 880,
895 (Ct. App. 2012). Terry misapplies Moreno when she claims the district court
impermissibly criticized “how Terry’s counsel staffed the case” when it deducted
for clerical work. Moreno refers to criticism of attorney staffing decisions,
5
specifically whether the prevailing party should have “used a less skilled attorney,
rather than the lead counsel, to perform document review.” 534 F.3d at 1114.
Terry concedes the law recognizes that co-counsel editing each other’s briefs
can constitute unreasonably duplicative time. Additionally, the district court need
not allow compensation for all time a lawyer spends preparing for and attending
district court hearings, when the lawyer does not participate at such hearings. Thus,
deducting such duplicative time was squarely within the district court’s discretion.
Id. at 1112; Horsford, 33 Cal. Rptr. 3d at 672.
The district court correctly held that Terry’s successful and unsuccessful
claims were related. See Odima v. Westin Tucson Hotel, 53 F.3d 1484, 1499 (9th
Cir. 1995). Accordingly, it was error to deduct hours for unsuccessful claims,
effectively impermissibly “divid[ing] the request for attorney’s fees on a claim-by-
claim basis.” McCown v. City of Fontana, 565 F.3d 1097, 1103 (9th Cir. 2009).
This constitutes error under the state statute as well. See Wysinger v. Auto. Club of
S. Cal., 69 Cal. Rptr. 3d 1, 15 (Ct. App. 2007). The district court should have
considered limited success of the overall litigation when determining whether to
adjust the lodestar downward. Odima, 53 F.3d at 1499.
Under the state statute, the district court did not abuse its discretion by not
awarding fees on fees. Hours spent on an unreasonably inflated fee request are not
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reasonable and therefore may be deducted. Meister v. Regents of Univ. of Cal., 78
Cal. Rptr. 2d 913, 925 (Ct. App. 1998). However, under the federal statute, the
district court was required to award some fees on fees, although it retained
discretion to reduce the hours or total award for unreasonableness. See Anderson v.
Dir., Office of Workers Comp. Programs, 91 F.3d 1322, 1325 (9th Cir. 1996).
Determining reasonable hourly rate. The district court rejected Terry’s
evidence of reasonable hourly rate, although the City did not produce any evidence
on this factor. Thus, under the federal statute, the district court impermissibly
relied solely on its own knowledge and experience to determine a reasonable
hourly rate. See Gonzalez, 729 F.3d at 1206. Under the state statute, the district
court also abused its discretion, because unrebutted evidence submitted to establish
the requested rate is the prevailing rate in the community for attorneys with
comparable skills and expertise compels the district court to find the requested rate
reasonable. See Graciano, 50 Cal. Rptr. 3d at 287.
On remand, the district court may, in its discretion, accept new evidence to
determine a reasonable rate. See Welch v. Metro. Life Ins. Co., 480 F.3d 942, 947-
48 (9th Cir. 2007) (holding district court on remand could reduce requested rates
based on “evidence that undermines the reasonableness of the rate requested”
7
although the party opposing the request for fees had not previously introduced any
evidence undermining requested rates).
Multipliers. Under the federal statute, the district court properly denied
Terry’s request for a 2.0 multiplier. The Supreme Court has specifically forbidden
adjusting upward an award for contingent risk, City of Burlington v. Dague, 505
U.S. 557, 565 (1992); Mangold v. Cal. Pub. Utils. Comm’n, 67 F.3d 1470, 1478
(9th Cir. 1995), and no “exceptional circumstances” justify such an enhancement
in this case, see Chalmers v. City of L.A., 796 F.2d 1205, 1212 (9th Cir. 1986).
Under the state statute, the district court had discretion whether to decline to
apply a positive multiplier. Graham v. DaimlerChrysler Corp., 101 P.3d 140, 157
(Cal. 2005); Nichols v. City of Taft, 66 Cal. Rptr. 3d 680, 687 (Ct. App. 2007); see
also Chaudhry v. City of L.A., 751 F.3d 1096, 1112 (9th Cir. 2014) (noting that
“California law allows for a multiplier of the lodestar to compensate for the risk of
contingent representation”). The district court did not consider the multiplier
question under state law, including the possibility of an upward adjustment for
contingency risk. A court abuses its discretion when it fails “to consider the
relevant factors for awarding an enhancement multiplier.” Nichols, 66 Cal. Rptr. 3d
at 686 (requiring that a trial court’s “discretion be exercised based on an actual
evaluation of the relevant criteria”). On remand, the district court should consider
8
whether a multiplier under state law is warranted. See Gonzalez, 729 F.3d at 1210-
11.3
Under the federal statute, we conclude that the district court abused its
discretion in applying a negative 0.8 multiplier for limited success. Terry obtained
a $100,001 damages award. Her request for injunctive relief was denied, not on
the merits, but because it was moot. In any event, the damages award
alone—$100,000+— is significantly higher than awards in other civil rights cases
in which we have found that the plaintiff had achieved a significant public benefit.
See, e.g., Morales v. City of San Rafael, 96 F.3d 359, 364-65 (9th Cir.1996)
(stating that a section 1983 plaintiff achieved a “significant” public benefit by
virtue of the jury’s holding “the city and officer responsible for his unlawful
arrest,” and by virtue of a $17,500 damages award, concluding that it “established
a deterrent to the city, its law enforcement officials and others”).4 On remand, after
explicit consideration of the applicable factors, the district court should explain the
3
Terry is wrong that the district court failed to compensate her for delay in
payment. The district court applied the current attorney rate rather than historic
rates to hours billed in earlier years.
4
We note that the only case the district court cited in support of its finding
that Terry achieved only “limited success,” Velez v. Wynne, was reversed on appeal
because the district court “failed to properly apply the process required to
determine attorneys’ fees.” Velez v. Wynne, 220 F. App’x 512, 513 (9th Cir. 2002).
9
reasons for its decision to apply a particular (negative or positive) multiplier. See
Gates, 987 F.2d at 1400.
The district court abused its discretion by reducing the lodestar without an
adequate explanation of its reasons for choosing the particular negative lodestar.
See id. On remand, after fully considering the applicable factors, the district court
should explain its reasons for applying any adjustment to the lodestar.
Double-counting. It appears the district court both reduced hours and applied
the 0.8 multiplier for limited success, and the district court erred in so doing. Both
statutes prohibit such double-counting. See Moreno, 534 F.3d at 1115; Flannery,
71 Cal. Rptr. 2d at 644.
Request to remand to different judge. We do not remand to a different
district judge, because Terry’s arguments and evidence do not reveal “unusual
circumstances necessitat[ing] reassignment both for the judge’s sake and for the
appearance of justice.” Sederquist v. City of Tiburon, 765 F.2d 756, 763 (9th Cir.
1985) (internal quotation marks omitted).
AFFIRMED in part, VACATED and REMANDED in part.
The parties shall bear their own costs.
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