Joseph Padgett v. Brian Loventhal ( 2013 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOSEPH PADGETT ; DARLA PADGETT , No. 10-16533
Plaintiffs-Appellees,
D.C. No.
v. 5:04-cv-03946-
JW
BRIAN LOVENTHAL; A. CURTIS
WRIGHT ; BARBARA NESBET ; ERIN
GARNER; MARK BRODSKY ; DAVID OPINION
BAXTER,
Defendants-Appellants,
and
LISA M. RICE ,
Defendant.
Appeal from the United States District Court
for the Northern District of California
James Ware, District Judge, Presiding
Argued and Submitted
December 5, 2012—San Francisco, California
Filed February 11, 2013
Before: Alex Kozinski, Chief Judge, Michael Daly
Hawkins and Mary H. Murguia, Circuit Judges.
Opinion by Judge Murguia
2 PADGETT V . LOVENTHAL
SUMMARY*
Civil Rights / Attorneys’ Fees
The panel vacated the district court’s award of costs and
attorneys’ fees in a 42 U.S.C. § 1983 action, and remanded to
the district court for an explanation of how it used the
lodestar method to reduce plaintiff’s fees and how it
calculated plaintiff’s reduced costs.
The panel held that in reducing plaintiff’s fee request for
$3.2 million in fees and $900,000 in costs, the district court
did not explain how it determined that $500,000 in fees and
$100,000 in costs was appropriate or why it denied costs to
the prevailing defendants. As a result, the panel was unable
to review the district court’s reasoning. The panel stated that
the mandate that district courts show their work in calculating
fees was all the more important in cases such as this one
where there were many overlapping claims and a very mixed
result. Therefore, the panel vacated and remanded for a more
complete explanation.
COUNSEL
M. Jeffery Kallis, The Law Firm of Kallis & Associates, San
Jose, California; Andrew V. Stearns and Steven M. Berki,
Bustamante O’Hara & Gagliasso, San Jose, California, for
Appellees.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
PADGETT V . LOVENTHAL 3
Todd H. Master and Joseph C. Howard, Jr., Howard Rome
Martin & Ridley, LLP, Redwood City, California, for
Appellants.
OPINION
MURGUIA, Circuit Judge:
I. Background
Joseph and Darla Padgett filed a complaint asserting state
and federal causes of action against eight defendants,
stemming from a dispute with the City of Monte Sereno,
California about enforcement of a fence height ordinance.
The eight defendants were: the City; Brian Loventhal, the
City Manager; A. Curtis Wright, the Mayor and member of
the City Council; Erin Garner, Mark Brodsky, Barbara
Nesbet, and David Baxter, members of the City Council; and
Lisa Rice, a former City employee. Against all defendants
the Padgetts asserted civil rights claims under 42 U.S.C.
§ 1983 for violations of their First Amendment right to free
speech and their Fourteenth Amendment right not to be
subjected to selective enforcement of the law; a claim under
California Civil Code § 52.1; civil extortion; intentional
infliction of emotional distress; and negligent infliction of
emotional distress. The Padgetts also asserted a 42 U.S.C.
§ 1983 claim against all defendants except Rice for a
violation of the Fourth Amendment relating to a measurement
of their fence that they claimed was made without their
consent.
Defendants began to chip away at the Padgetts’ claims
and by the eve of trial, only the Padgetts’ First and Fourteenth
4 PADGETT V . LOVENTHAL
Amendment claims against Loventhal and Wright survived.
The case proceeded to trial on those claims. The district court
dismissed the Fourteenth Amendment claims against Wright
before the case went to the jury. The jury returned a verdict
in favor of Wright on Darla Padgett’s First Amendment
claim, but in favor of Joseph Padgett on his First Amendment
claim. Joseph Padgett was awarded $1.00 in nominal
damages and $200,000 in punitive damages. The jury was
unable to reach a verdict on any of the claims against
Loventhal.
All remaining parties then moved, pursuant to Federal
Rule of Civil Procedure 50(b), for judgment as a matter of
law. Wright’s motion was denied, as was his motion in the
alternative for a new trial under Rule 59. The district court
entered judgment against Wright and in favor of Joseph
Padgett. Because Darla Padgett did not file a motion for
judgment as a matter of law with respect to Wright, the
district court entered a judgment in Wright’s favor on her
claim. The district court granted Loventhal’s motion on all
claims. After the dust settled, Joseph Padgett prevailed on
one claim—a § 1983 First Amendment retaliation
claim—against one defendant—Wright. Darla Padgett
prevailed on none.
Joseph Padgett moved for attorney’s fees pursuant to
42 U.S.C. § 1988. The district court, citing Thomas v. City of
Tacoma, 410 F.3d 644, 647–49 (9th Cir. 2005), noted that
when a plaintiff prevails on only some of his claims, fees for
the entire litigation may be excessive. Noting that this case
was “a textbook example of disproportionate litigation in
relation to the actual damages,” the district court denied
Padgett’s full fee request because it represented the cost of
PADGETT V . LOVENTHAL 5
the entire litigation. The district court explained its fee award
as follows:
Thus, the Court finds that minimum
attorney[’s] fees are warranted for the
prosecution of a minimally successful claim.
Upon review of the claims, the result
obtained, and Joseph Padgett’s request for
attorney[’s] fees totaling approximately $3.2
million dollars, the Court finds that an award
of $500,000 in attorney[’s] fees is reasonable.
The district court justified this award with only a footnote,
which read:
See Hensley v. Eckerhart, 461 U.S. 424,
436–37 (1983) (“The district court may
attempt to identify specific hours that should
be eliminated, or it may simply reduce the
award to account for the limited success.”) In
reaching this determination, the Court has
considered factors relevant to determining the
reasonableness of attorney[’s] fees. See
Gisbrecht v. Barnhart, 535 U.S. 789, 801
(2002); Morales v. City of San Rafael, 96 F.3d
359, 363–64 (9th Cir. 1996).
The district court similarly decided, without explanation, to
reduce Padgett’s bill of costs from $900,000 to $100,000.
The district court also denied costs to the prevailing
defendants.
Because the district court did not explain how it
determined that $500,000 in fees and $100,000 in costs was
6 PADGETT V . LOVENTHAL
appropriate or why it denied costs to the prevailing
defendants, we are unable to review the court’s reasoning.
Therefore, we vacate and remand for a more complete
explanation.
II. Discussion
We do not quarrel with the district court’s conclusion that
awarding Padgett $3.2 million in fees and $900,000 in costs
might overcompensate him in light of his failure to prevail on
the vast majority of his claims. See Thomas, 410 F.3d at 649.
Additionally, the district court’s citation to Gisbrecht and
Morales correctly identified the lodestar method of
calculating fees. But identifying the legal rules that guide the
calculation of fees, and then producing a number that is
purportedly a result of that calculation, does not allow us to
review the decision for an abuse of discretion.
We have long held that district courts must show their
work when calculating attorney’s fees. In Chalmers v. City
of Los Angeles, we vacated an award of attorney’s fees when
the district court noted that it was reducing the plaintiff’s fees
because the plaintiff was only partially successful, but the
order “contain[ed] no explanation of how the court arrived at
the” award. 796 F.2d 1205, 1213 (9th Cir. 1986), amended
by 808 F.2d 1373 (9th Cir. 1987). The lack of explanation
was problematic because,
Without some indication or explanation of
how the district court arrived at the amount of
fees awarded, it is simply not possible for this
court to review such an award in a meaningful
manner. Absent some indication of how the
district court’s discretion was exercised, this
PADGETT V . LOVENTHAL 7
court has no way of knowing whether that
discretion was abused.
Id.More recently, in Tutor-Saliba Corp. v. City of Hailey, we
relied on Chalmers to vacate an award of fees in favor of the
defendant, noting,
Although the district court stated that it
utilized the ‘lodestar’ method to calculate the
fee award, and that it had considered the
factors enunciated in Kerr [v. Screen Extras
Guild, Inc.,] 526 F.2d [67,] 70 [(9th Cir.
1975),] its order failed to reveal the number
of hours being compensated, the hourly rate
being applied, and how it reached the
conclusion that 20 percent of counsel’s time
and costs were apportionable to the defense
against [plaintiff’s] frivolous claims.
452 F.3d 1055, 1065 (9th Cir. 2006).
Similarly, we have held that a district court must “specify
reasons” for not awarding costs, Ass’n of Mexican-Am.
Educators v. State of California, 231 F.3d 572, 591 (9th Cir.
2000) (en banc), and the same reasoning applies to reducing
costs based on a partial victory. Without an adequate
explanation by the district court, an appellate court is unable
to determine if the district court abused its discretion. Id. at
592–93.
It is worth repeating that “[s]ince [the district court] is
already doing the relevant calculation, it is a small matter to
8 PADGETT V . LOVENTHAL
abide by the injunction of the arithmetic teacher: Show your
work!” City of Holyoke Gas & Elec. Dep’t v. FERC,
954 F.2d 740, 743 (D.C. Cir. 1992). The requirement that
district courts show their work is frequently forgotten, and we
have often needed to reiterate its importance. See, e.g., Evon
v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1034 (9th
Cir. 2012) (remanding fee award for lack of explanation);
McCown v. City of Fontana, 550 F.3d 918, 922–23 (9th Cir.
2008), amended by 565 F.3d 1097 (9th Cir. 2008) (same);
McGrath v. Cnty. of Nevada, 67 F.3d 248, 254 (9th Cir. 1995)
(same); United Steelworkers of Am. v. Phelps Dodge Corp.,
896 F.2d 403, 406–07 (9th Cir. 1990) (same); Jordan v.
Multnomah Cnty., 815 F.2d 1258, 1263–64 (9th Cir. 1987)
(same).
The mandate that district courts show their work is all the
more important in cases where, as here, there are many
overlapping claims and a very mixed result. See Thomas,
410 F.3d at 648–49. Failure on a claim does not
automatically reduce the fee award. See Hensley v.
Eckerhart, 461 U.S. 424, 436 (1983). Often, attorney work
will bear on multiple claims, only some of which are
successful. Fees for work which relates only to unsuccessful
claims should not be awarded. See id. But where attorney
work proves beneficial to a successful claim, district courts
should generally award these fees in full, even if the work is
also useful to an unsuccessful claim. In other words, the
district court must award fees for the work that contributed to
a successful result as if the successful claims were the only
ones litigated. This, of course, is subject to the general
constraint that the fees must be reasonable. Id.The district court made an unfortunately common
mistake. While it identified the correct rules, it provided no
PADGETT V . LOVENTHAL 9
explanation for how it applied those rules in calculating the
costs and attorney’s fees. Therefore, we vacate the district
court’s award of costs and fees and remand to the district
court for an explanation of how it used the lodestar method to
reduce Padgett’s fees and how it calculated Padgett’s reduced
costs.
For the same reason, the district court erred in failing to
explain why it denied costs to the prevailing defendants.
Prevailing parties are generally able to recover their costs.
See Fed. R. Civ. P. 54(d). While the district court has
discretion to depart from the rule in appropriate cases, we
cannot review its unexplained order for abuse of discretion.
See Ass’n of Mexican-Am. Educators, 231 F.3d at 593.
VACATED and REMANDED. Each party to bear its
own costs on appeal.