Mary Johnson v. Metro-Goldwyn-Mayer Studios

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MARY L. JOHNSON, individually No. 18-35967
and on behalf of all others
similarly situated, D.C. No.
Plaintiff-Appellant, 2:17-cv-00541-RSM
v.
OPINION
MGM HOLDINGS, INC,
Defendant,
and
METRO-GOLDWYN-MAYER
STUDIOS, INC.; TWENTIETH
CENTURY FOX HOME
ENTERTAINMENT, LLC,
Defendants-Appellees.
Appeal from the United States District Court
for the Western District of Washington
Ricardo S. Martinez, Chief District Judge, Presiding
Submitted October 21, 2019 *
Seattle, Washington
*
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
2 JOHNSON V. METRO-GOLDWYN MAYER STUDIOS
Filed December 2, 2019
Before: Sandra S. Ikuta and Mark J. Bennett, Circuit
Judges, and Jennifer A. Dorsey, ** District Judge.
Opinion by Judge Bennett
SUMMARY ***
Attorneys’ Fees
The panel affirmed the district court’s order awarding
attorneys’ fees to plaintiff class counsel following the
settlement of a consumer protection class action.
Plaintiff challenged the award, arguing that it was
arbitrary because the district court did not adequately explain
its decision to cut the number of hours by 25%.
The panel held that the district court’s order awarding
attorneys’ fees, when read in its entirety, explained the
lodestar calculation it conducted and its application of the
percentage-of-recovery analysis as a cross-check of
reasonableness. The panel concluded that the district court
adequately explained its reasoning and did not abuse its
discretion.
**
The Honorable Jennifer A. Dorsey, United States District Judge
for the District of Nevada, sitting by designation.
***
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
JOHNSON V. METRO-GOLDWYN MAYER STUDIOS 3
In a concurrently filed memorandum disposition, the
panel rejected plaintiff’s remaining arguments for reversal.
COUNSEL
Alexander S. Kleinberg, Eisenhower Carlson PLLC,
Tacoma, Washington, for Plaintiff-Appellant.
Tamerlin J. Godley, Munger Tolles & Olson LLP, Los
Angeles, California, for Defendants-Appellees.
OPINION
BENNETT, Circuit Judge:
Plaintiff moved for an award of $350,000 in fees
following the settlement of a consumer protection class
action. The district court conducted a lodestar analysis of
class counsel’s billing, applied a 25% cut to the hours
expended by class counsel, and ultimately awarded Plaintiff
$184,665 in attorneys’ fees. Plaintiff challenges the award,
arguing that the entire award was arbitrary because the
district court did not adequately explain its decision to cut
the number of hours by 25%. We disagree. The district
court’s order awarding attorneys’ fees, when read in its
entirety, explains the lodestar calculation it conducted and
its application of the percentage-of-recovery analysis as a
cross-check for reasonableness. We find that the district
court adequately explained its reasoning and did not abuse
its discretion.
4 JOHNSON V. METRO-GOLDWYN MAYER STUDIOS
FACTS AND PROCEEDINGS
Goldwyn-Mayer Studios, Inc. and Twentieth Century
Fox Home Entertainment LLC (collectively, “Defendants”)
marketed several James Bond DVD and Blu-ray boxsets as
containing “[a]ll the Bond films” and “every gorgeous girl,
nefarious villain and charismatic star.” But the boxsets failed
to include Casino Royale and Never Say Never Again.
Plaintiff, Mary Johnson as class representative, instituted an
action on behalf of a nationwide class of consumers, alleging
a violation of Washington’s Consumer Protection Act,
breach of express warranties, and breach of the implied
warranty of merchantability.
The parties settled, and the settlement agreement
included Defendants’ agreement to pay attorneys’ fees and
costs in an amount not exceeding $350,000 and an incentive
award of $5,000 to Ms. Johnson. Defendants agreed not to
oppose or challenge awards not exceeding those amounts.
Plaintiff filed an unopposed Motion for Attorneys’ Fees
and Expenses and Named Plaintiff Enhancement Award
(“Motion”) requesting $350,000 for fees and costs and a
$5,000 incentive award for Ms. Johnson. The district court
approved the settlement but awarded $184,655 in attorneys’
fees, not $350,000. The district court conducted its own
lodestar calculation and applied a 25% across the board cut
to class counsel’s requested hours to “reflect a more
reasonable representation of the work required.” Plaintiff
appeals from the district court’s order.
STANDARD OF REVIEW
We review a district court’s award of attorneys’ fees and
its chosen method of calculation for an abuse of discretion.
In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935,
JOHNSON V. METRO-GOLDWYN MAYER STUDIOS 5
940 (9th Cir. 2011). Under the abuse of discretion standard,
we “affirm unless the district court applied the wrong legal
standard or its findings were illogical, implausible, or
without support in the record.” Gonzalez v. City of
Maywood, 729 F.3d 1196, 1201–02 (9th Cir. 2013) (quoting
TrafficSchool.com v. Edriver Inc., 653 F.3d 820, 832 (9th
Cir. 2011)).
ANALYSIS
We need a sufficient basis for determining the
reasonableness of an attorneys’ fee award. See In re
Bluetooth, 654 F.3d at 943 (reversing and remanding where
the district court provided “(1) no explicit calculation of a
reasonable lodestar amount; (2) no comparison between the
settlement’s attorneys’ fees award and the benefit to the class
or degree of success in the litigation; and (3) no comparison
between the lodestar amount and a reasonable percentage
award”). Here the district court provided an adequate
explanation for us to review its decision.
First, the district court provided an explicit lodestar
calculation, determining the reasonable hourly rate and
number of reasonable hours expended by class counsel. 1 The
district court provided six reasons 2 why a 25% reduction
1
Plaintiff does not challenge the district court’s determination of a
reasonable hourly rate.
2
The six reasons were: (1) some block billing; (2) excessive time
spent on law firm conferences that did not advance the case or the
interests of the class; (3) unreasonable travel time billed without any
showing that substantive work was performed; (4) duplicative work;
(5) unsupported identical conclusory statements of class counsel as the
only explanation for why the hours requested were reasonable; and
(6) puffery in describing work performed.
6 JOHNSON V. METRO-GOLDWYN MAYER STUDIOS
was appropriate. The district court then conducted a
percentage-of-recovery analysis as a cross-check.
We encourage district courts to cross-check their
attorneys’ fee awards using a second method of fee
calculation. Id. at 944. This helps guard against unreasonable
awards. Id. For example, when a court conducts a lodestar
analysis, a percentage-of-recovery method can be used to
ensure that “counsel’s fee does not dwarf class recovery.” Id.
at 945 (quoting In re Gen. Motors Corp. Pick-up Truck Fuel
Tank Prods. Liab. Litig., 55 F.3d 768, 821 n.40 (3d Cir.
1995)). If the lodestar amount exceeds the 25% benchmark
for percentage-of-recovery awards, a second look to evaluate
the reasonableness of the lodestar calculation is appropriate.
Id.Here, in comparing its lodestar calculation ($184,665) to
its calculation of the benefit achieved for the class
($138,600), the district court observed that the lodestar
award exceeded our 25% benchmark for percentage-of-
recovery awards. While the district court noted that even the
lodestar amount (which was approximately half the amount
sought) seemed unreasonably large, the district court
ultimately decided the case did not warrant continued action
and that it was preferable that Class Counsel—as opposed to
Defendants—receive any excess. The district court’s final
decision not to further reduce the award was reasonable.
The district court provided a clear and concise
explanation for its lodestar calculation and its
reasonableness cross-check, enabling us to determine that
the district court’s award was reasonable, based on the
record before it—our case law requires nothing more. See,
e.g., McCown v. City of Fontana, 565 F.3d 1097, 1102 (9th
Cir. 2009) (“[The district court] must explain how it arrived
at its determination with sufficient specificity to permit an
JOHNSON V. METRO-GOLDWYN MAYER STUDIOS 7
appellate court to determine whether the district court abused
its discretion in the way the analysis was undertaken.”); see
also Hensley v. Eckerhart, 461 U.S. 424, 437 (1983) (“[It is]
important . . . for the district court to provide a concise but
clear explanation of its reasons for the fee award.”). The
district court acted well within its discretion.
Plaintiff contends that the district court failed to provide
an explanation as to why it chose a 25% cut, and claims this
means the cut was arbitrary, relying entirely on our opinion
in Gonzalez v. City of Maywood, 729 F.3d 1196 (9th Cir.
2013). We disagree. The district court in Gonzalez
considered an attorneys’ fee award in a civil rights case,
where the lodestar method is typically used. 729 F.3d
at 1202. 3 We reversed and remanded the district court’s
award because given the district court’s explanation, we
thought the percentage cuts to the reasonable hours seemed
arbitrary. Id. at 1204–05. And the cuts were “irreconcilable”
with certain of the district court’s stated conclusions. Id.
at 1205. We simply couldn’t conclude that the lodestar
method, as applied by the district court, produced a
reasonable attorneys’ fee. Id. at 1208–09. Our decision did
not rise or fall on the use or omission of any “magic words.”
Here, by contrast, the district court provided a detailed
explanation of the lodestar calculation and a percentage
cross-check. Cf. Moreno v. City of Sacramento, 534 F.3d
1106, 1112 (9th Cir. 2008) (stating that district court’s
reduction of more than ten percent requires a reasoned
explanation). The district court’s cross-check provided
support for the ultimate reasonableness of the district court’s
3
Gonzalez does not mention a cross-check analysis, presumably
because the percentage-of-recovery method is not typically used in civil
rights cases, and the district court did not conduct one.
8 JOHNSON V. METRO-GOLDWYN MAYER STUDIOS
award. The cross-check also demonstrated that even with the
25% cut to class counsel’s hours, the fee award was higher
than the percentage-of-recovery benchmark amount of 25%
of the recovery to the class. The district court provided a
more than sufficient basis for us to evaluate the award, and
we have no difficulty understanding why the court made the
award it did. The district court’s six reasons for a cut to the
hours combined with its additional cross-check analysis
demonstrates reasonable action—the very opposite of
arbitrary action. No further explanation for the 25% cut was
necessary.
AFFIRMED. 4
4
In a concurrently filed memorandum disposition, we reject
Plaintiff’s remaining arguments for reversal.