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Ninth Circuit Affirms Slashing Fees of Potter & Handy
Judges Reject Contention of Firm That Represents Serial Filers of ADA Actions That It Was Wrongfully Denied Recompense for Legal Work at Prevailing Rates, Insisting Lack of Complexity of Cases Is Not Relevant
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday rejected the contention of the San Diego law firm of Potter & Handy, that its fee request of $20,459 was wrongfully spurned by a judge who awarded it, instead, $11,349, citing the lack of complexity of the disability-discrimination case it handled.
Potter & Handy, through its off-shoot, Center for Disability Access (“CDA”), specializes in suing small businesses under the federal Americans With Disabilities Act (“ADA”) and the Unruh Civil Rights Act, generally exacting settlements in a short period of time. It has a stable of disabled plaintiffs, including Brian Whitaker, the appellant in the case decided yesterday, who had, as of a year ago, been the plaintiff in about 1,800 ADA/Unruh actions.
At oral argument in Pasadena on Aug. 22, Potter & Handy name partner Russell Handy quoted District Court Judge Michael W. Fitzgerald of the Central District of California as saying, in explaining the fee award in his June 14, 2022 order:
“If the action had any complexity at all, it is likely that Potter Handy would be awarded the prevailing rate in the community.”
‘Really Bothers’ Lawyer
Handy said that stance “really bothers” him, insisting that lack of complexity of a case is relevant to how many hours should be devoted to it, not the hourly rate.
His firm, he insisted, is “entitled to the prevailing rate.” It sought recompense for 42 hours of work by six lawyers whose hourly rates are $450, $550, and $595.
The lawyer contended that because of its expertise in the area, it can work with efficiency, turning out a complaint in half an hour that would take lawyers who do not specialize in ADA cases hours to prepare.
“There is no reason to mistreat us because of the high volume,” he protested.
In yesterday’s memorandum opinion—signed by Ninth Circuit Judges Daniel Aaron Bress and Johnnie B. Rawlinson and by District Court Judge Jack Zouhar of the Northern District of Ohio, sitting by designation—the court responded:
“At oral argument, Whitaker’s counsel argued strenuously that the court confused efficiency with simplicity, contending he should not be reprimanded for perfecting his craft. Yet, he failed to show how the attorneys in this specific case performed anything but routine tasks, requiring minimal specialized skill. This was a straightforward case that lacked discovery, substantive motion practice, or trial preparation. The district court was entitled to conclude that it required little ‘time and labor,’ favoring a rate reduction.”
Second Decision
The Ninth Circuit, in deciding the case, considered the attorney-fee issue for the second time. On Nov 5, 2021, a three-judge panel reversed Fitzgerald’s initial order, saying:
“We cannot discern that, in its explanation of why it reduced the hourly rates sought by CDA, the district court analyzed the complexity of the case, the type of work involved, rates for non-CDA lawyers of comparable skill in the relevant community, whether the legal work was performed by lawyers at the appropriate levels of seniority, or other relevant factors.”
On remand, Fitzgerald considered each of the relevant factors. Yesterday’s opinion says:
“The district court adequately justified its reduction of CDA’s requested hourly rates. For example, the court considered, as one of several factors, that the fees CDA sought ($20,459) significantly overshadowed the settlement it obtained ($4,000).”
Relevance Disputed
At oral argument, Handy asserted that in a discrimination case, the monetary amount garnered is not relevant, noting that if the case had been brought only under the ADA, which provides only for injunctive relief, there would be no damages, yet attorney fees would have been awardable.
The opinion points out that the 1975 Ninth Circuit opinion in Kerr v. Screen Extras Guild, Inc. “expressly lists ‘the amount involved and the results obtained’ as a factor a district court may consider when assessing an upward or downward departure from the lodestar….The district court properly did not treat this factor as dispositive.”
The judges continued:
“ Whitaker also challenges the district court conclusion that CDA’s strategy of ‘serial ADA litigation.’ in which it employs an ‘assembly-line approach,’ weighs in favor of lower attorney fees. Here again, the court permissibly reached this conclusion based on the facts of this case.”
CDC contended in its appellate brief by attorney Dennis Price that “in the arena of ADA litigation, there is a bias expressed against the area of law that has manifested in the form of punitive fee decisions that threaten the practice.” The Ninth Circuit observed:
“No record evidence suggests animus.”
The opinion says that Fitzgerald “faithfully applied and followed Kerr” and other Ninth Circuit decisions.”
The case is Whitaker v. SMB Group, 22-55668.
Whitaker sued SMB Group, SMB 321 LLC, and Yoon Jeong Row in connection with alleged ADA violations at The Boba Café in Santa Monica.
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