114 | 2024 Cal-Peculiarities ©2024 Seyfarth Shaw LLP www.seyfarth.com this “catalyst” theory of fee recovery.336 In California it’s different. The California Supreme Court has endorsed the recovery of attorney fees for a plaintiff if the defendant changes its behavior substantially because of, and in the manner sought by, the plaintiff’s lawsuit.337 The California Supreme Court thus permitted qualifying plaintiffs—who never won their lawsuit—to recover not only (1) attorney fees for litigating the underlying lawsuit but also (2) a multiplier on those fees, (3) attorney fees for litigating their entitlement to attorney fees, and (4) a multiplier on the fees for litigating entitlement to fees.338 This development led the dissenting justice to note forlornly: “The majority today goes further than this court has ever gone before—indeed, so far as I can tell, further than any other court has ever gone—in permitting plaintiffs to win large attorney fee awards. … Lest California truly become a mecca for plaintiffs and plaintiffs’ attorneys throughout the country, we need to be at least somewhat in step with the rest of the country.”339 In the wage and hour context, California has departed from the conventional view that courts should reduce attorney-fee awards to account for the plaintiff’s lack of success. The Court of Appeal has held that an employer, on appeal from a Labor Commission award, owed over $85,000 in plaintiff’s attorney fees and costs even though the plaintiff had minimally prevailed on but one of three claims, winning just $4,250: “[The employer] chose to appeal and seek a trial de novo after suffering only a relatively modest loss before the commissioner, having defeated two other claims for which [the plaintiff] sought considerably higher damages. If [the plaintiff] consequently was required to incur substantial attorney fees to retry the entire case, including issues on which she did not prevail before the commissioner, defendant has only itself to blame.”340 5.12.4 Attorney fees awards can dwarf actual recoveries In federal cases, the amount of attorney fees awarded to a plaintiff generally must be in reasonable proportion to the plaintiff’s success.341 In California it’s different. The Court of Appeal refused to reduce a $1.1 million attorneyfee award where the plaintiff failed to succeed on certain claims and won only a $30,500 jury award.342 The California Supreme Court corrected a similar situation in 2010. A plaintiff winning an $11,500 FEHA verdict had sought $871,000 in attorney fees. The trial court denied the fee request because the recovery was so modest that the case could have been brought in a court of limited jurisdiction (with recoveries limited to $25,000). When the Court of Appeal reversed, holding that it was an abuse of discretion to deny attorney fees in a FEHA case solely because the amount of the damages award was modest,343 the California Supreme Court reversed the Court of Appeal and upheld the trial court, concluding that the trial court could deny attorney fees on the basis of the plaintiff’s minimal success and the grossly inflated fee request.344 Yet courts continue to countenance grossly disproportionate fee awards. The Ninth Circuit has applied California law to uphold an award of $700,000 in plaintiff’s attorney fees where the jury had rejected most of her claims and had awarded her just $30,000 in damages.345 5.12.5 Windfall fees for plaintiffs’ attorneys in class action settlements Federal courts, to protect the interests of unnamed class members, often restrict plaintiff’s attorney fees to a maximum of 25% of the common-fund settlement, absent “special circumstances.”346 In California it’s different. The California Supreme Court—approving attorney fees amounting to a full one-third of the common fund—has held that an attorney fee is not unreasonable merely because it is a fixed percentage of the common fund.347 In the wage and hour case in question, the plaintiffs’ attorneys estimated that their lodestar (hours worked times hourly billing rate) were about $3 million, but successfully claimed fees in excess of $6 million (one-third of a $19 million gross settlement).348
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