Friday, September 13, 2002
C.A. Upholds Most of $600,000 Fee Award in Class Action Over Pay
By KENNETH OFGANG, Staff Writer/Appellate Courts
A $614,000 attorney fee award to a Los Angeles firm that represented employees of the Spanish-language Telemundo network in a class action for unpaid overtime compensation, wages and benefits was largely upheld yesterday by this district’s Court of Appeal.
Div. Five, in an unpublished opinion by Presiding Justice Paul A. Turner, agreed with Los Angeles Superior Court Commissioner Bruce Mitchell that Daar & Newman could reasonably bill $325 per hour for its work on the case.
The panel also upheld the commissioner’s decision to double the award based on the contingent nature of the fee arrangement in the case. But the justices concluded, based on a recent state Supreme Court decision, that Mitchell may have erred in applying the multiplier to work the firm did after Telemundo, which was sold last year to NBC, agreed to settle.
Five former Telemundo employees sued in 1997. In 1999, a class of about 100 employees was certified.
The following year—three years after suit was filed and just 11 days before a trial was to begin—the case settled, with Telemundo agreeing to pay reasonable attorney fees as determined by the court.
In granting the firm’s fee request for just under 1,000 hours of work, the commissioner noted that the suit “was a contingency case” that “was litigated for three years” by lawyers who “waited three years to be paid.”
Mitchell added that Telemundo had “put on quite a fight through th[e] case” and opined that “a multiplier of 2 is kind of minimum.”
The commissioner was in the best position to assess the reasonableness of the fee request, Turner concluded for the appeals panel.
Telemundo argued that the plaintiffs’ lawyers were neither “exceptional or outstanding,” that the $307,000 lodestar adequately reflected their skill and the complexity of the case, and that the prospect of settlement diminished the risk of nonpayment.
But the presiding justice, noting that Telemundo did not object to the hourly rate or the number of claimed hours, only to the multiplier, said the record did not show an abuse of discretion on the part of the trial jurist.
Fair Market Value
“The trial court could reasonably conclude $325 per hour was consistent with the prevailing rate in the community. Further, with good reason, the trial court rationally could conclude the $325 minimum hourly rate did not reflect the particular skill [lead counsel Jeffrey] Daar and his firm brought to bear in this action particularly in view of the complexity of the case. Furthermore, the trial court could reasonably conclude that the fair market value of plaintiffs’ counsel’s services included not only compensation for the legal assistance rendered, i.e., the lodestar amount, but further recompense for the loan of those services and for bearing the risk of not being paid….The trial court could reasonably find that to limit recovery to the lodestar amount would deprive plaintiffs’ counsel of the fair market value of their work.”
Remand is required, Turner went on to say, solely to reconsider the post-settlement fees. The presiding justice explained that under Ketchum v. Moses (2001) 24 Cal.4th 1122—decided subsequent to Mitchell’s ruling—an award of fees for litigation solely over the amount of fees to be awarded cannot be enhanced by a multiplier based on the no-longer-present risk of not recovering fees.
Ketchum, which dealt with an award of fees for an anti-SLAPP motion, is controlling, Turner said.
“Once the case settled…there was no longer any risk of not recovering attorney’s fee[s] in some reasonable amount,” he explained. The trial judge may, however, consider a multiplier based on factors other than contingent risk, Turner said.
The case is Magallanes v. Telemundo Network, Inc., B147043.
Copyright 2002, Metropolitan News Company