March 2021 Update
In Aerotek, Inc. v Johnson Group Staffing Co. (2020) 54 CA5th 670, the court of appeal reiterated that conflicts between attorneys and clients over the disposition of statutory fee awards are not subject to the mandatory arbitrary provisions governing other attorney-client fee disputes, nor do they entitle the client to a jury trial. See §1.17.
In Reeve v Meleyco (2020) 46 CA5th 1092, the court of appeal rejected an attorney’s claim for a referral fee because the client had not given written consent as required by the Rules of Professional Conduct. See §§1.17, 1.19.
In Taylor v County of Los Angeles (2020) 50 CA5th 205, an attorney’s lien on a former client’s settlement was dramatically reduced due in large part due to the attorney’s failure to keep contemporaneous time records. See §§1.19, 9.82, 9.83, 11.50.
In Hance v Super Store Indus. (2020) 44 CA5th 676, the court held that a fee division agreement among class counsel was unenforceable because of an attorney’s ethical violation but the attorney could raise a claim for a quantum meruit fee; and the fee was not limited to compensation for hours worked, but could also compensate the attorney for the value of referring the case to an experienced class action attorney. See §1.19, 8.32.
Eligibility and Entitlement to Fees
In Doc’s Dream LLC v Dolores Press, Inc. (9th Cir 2020) 959 F3d 357, the Ninth Circuit held that the fee provision of the Copyright Act (17 USC §505) applies to a declaratory relief action. See §2.73.
In Department of Fair Employment & Hous. v Cathy’s Creations, Inc. (2020) 54 CA5th 404, the court of appeal held that a prevailing defendant in an action brought by the Department of Fair Employment and Housing (DFEH) is not entitled to fees under CCP §1021.5 because Govt C §12974, a unilateral fee-shifting statute that provides fees to DFEH only, is the later and more specific statute. See §§2.9, 2.70, 2.78, 3.24.
In Patel v Chavez (2020) 48 CA5th 484, the court of appeal held that the anti-SLAPP statute’s fee-shifting provision (CCP §425.16(c)) applies to 42 USC §1983 claims brought in state court. See §2.12.
In Vosburg v County of Fresno (2020) 54 CA5th 439, the court of appeal held that a “de facto” intervenor, an association appearing as a representative for its members, was the successful party under CCP §1021.5 because it achieved the results sought, contributed to the briefing, and presented relevant evidence. The court’s discussion of CCP §1021.5 cites this text. See §§2.28, 2.51, 3.18.
In Patel v Mercedes-Benz (2019) 43 CA5th 1007, a Song-Beverly Act (CC §1794(d)) case, the court of appeal held that a plaintiff who litigated the action to a successful judgment was a prevailing party, even though the jury awarded damages only to a co-plaintiff who was added to the case near the end of trial, and trial court’s ruling limiting plaintiff only to hours incurred after the co-plaintiff was added violated purposes of the Act. See §§2.45, 2.85, 2.86.
In Beames v City of Visalia (2019) 43 CA5th 741, the court of appeal held that fees were properly awarded in state court under 42 USC §1988, even though a writ petitioner’s federal claim was not decided, because the federal claim was substantial and arose from the same facts on which relief was afforded. The court also held that the city respondent’s unjustified resistance to the lawsuit was a factor supporting an award of fees. See §§2.56, 2.57, 2.97, 2.98, 2.102.
In Ajaxo, Inc. v E*Trade Fin. Corp. (2020) 48 CA5th 129, the court of appeal affirmed an award of costs to a defendant who had satisfied the plaintiff’s initial judgment on one cause of action but defeated the plaintiff’s post-judgment efforts on a different cause of action. See §§2.47, 2.93.
In Canyon View Ltd. v Lakeview Loan Servicing, LLC (2019) 42 CA5th 1096, the court of appeal held that the Mobilehome Residency Law (MRL) (CC §798.85) requires a fee award to the party in whose favor judgment is rendered, even if the plaintiff failed to obtain a net recovery and the liable party never attempted to enforce the rights the judgment extinguished. See §§2.75, 3.100.
In Skinner v Ken’s Foods, Inc. (2020) 53 CA5th 938, plaintiffs were entitled to fees under CCP §1021.5 when their prelitigation demand led to a change in behavior before the suit was filed, although the plaintiffs were not made aware of the change when they filed their action. See §§2.85, 2.111, 2.112, 2.113, 2.114, 3.104.
In Kelly v House (2020) 47 CA5th 384, the court of appeal held that plaintiffs could recover attorney fees under CCP §1021.9 (trespass to agricultural land) when they demonstrate concrete injury to real or personal property. See §2.98.
Labor Code §1102.5, which protects California employees generally against retaliation for whistleblowing activity, was amended to authorize the court to award reasonable attorney fees to a plaintiff who brings a successful action for a violation of the statute. See §3.97.
In Carlsbad Police Officers Ass’n v City of Carlsbad (2020) 49 CA5th 135, the court of appeal held that the right to intervene under CCP §387 in a Public Records Act lawsuit could not be conditioned on the waiver of a right to claim attorney fees under CCP §1021.5. See §§3.10, 3.11. 3.87.
In Sandlin v McLaughlin (2020) 50 CA5th 805, the court of appeal held that successfully defending against a challenge to candidate statements enforced an important right and conferred a significant public benefit under CCP §1021.5, but the issues of necessity and burden of private enforcement were remanded to the trial court. See §§3.19, 3.46, 3.52, 3.110.
In City of Los Angeles v Metropolitan Water Dist. of S. Cal. (2019) 42 CA5th 290, the court of appeal held that a newspaper’s intervention in a “reverse-CPRA” action between public utilities conferred a significant benefit because it resulted in disclosure of documents that would allow the public to monitor “how the government uses public money.” See §§3.51, 3.54.
In Cruz v Fusion Buffet (2020) 57 CA5th 221, the court of appeal held that an employer’s costs claim under CCP §998 was trumped by the one-sided fee provision in Lab C §1194, which grants fees only to a prevailing employee. See §§2.9, 2.78, 3.97.
In Arace v Medico Invs., LLC (2020) 48 CA5th 977, the court of appeal held that a plaintiff prevailing on a financial elder abuse claim under the Elder Abuse and Dependent Adult Civil Protection Act (EADACPA) (Welf & I C §15657.5) may recover fees even though no damages were awarded on that claim. See §§2.75, 3.106.
Fee Awards Based on Contractual Fee Clauses
Under the federal “Holder Rule,” a consumer who buys a defective product or service on an installment contract arranged by the seller can sue an assignee (holder in due course) but cannot recover both damages and attorney fees if the total exceeds the payments made on the contract. In Spikener v Ally Fin., Inc. (2020) 50 CA5th 151, the court of appeal held that CC §1459.5, which was enacted to prevent application of the Holder Role in California consumer cases, is preempted by federal law. See §4.8.
In MSY Trading, Inc. v Saleen Automotive, Inc. (2020) 51 CA5th 395, the court held that a nonsignator party from whom the judgment creditor sought to collect a judgment as an alter ego of the defendant was entitled to contractual fees because the judgment creditor would have been entitled to fees had it prevailed. See §§4.43, 4.62.
In Regency Midland Constr., Inc. v Legendary Structures, Inc. (2019) 41 CA5th 994, the court of appeal held that a plaintiff who established liability under a contract but recovered only $1 of the relief sought was nevertheless the prevailing party. See §§2.45, 2.56, 2.86, 4.77.
Attorney Fees Awarded as Sanctions
In Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 CA5th 124, the court of appeal held that a party seeking sanctions under CCP §128.5 must show both bad faith—i.e., inappropriate conduct, vexatious tactics, or improper motive (“subjective bad faith”)—and a frivolous action or tactic (“objective bad faith”). See §§6.29, 6.31.
In Changhsa Metro Group Co. v Xufeng (2020) 57 CA5th 1, the court of appeal held when a plaintiff seeks sanctions under CCP §425.16(c) for a frivolous anti-SLAPP motion, the safe-harbor and separate motion requirements of CCP §128.5 (incorporated by reference) do not apply because they are incompatible with the time limits in the anti-SLAPP statute. See §§6.32, 6.39.
In Cornerstone Realty Advisors v Summit Healthcare REIT (2020) 56 CA5th 771, the court of appeal did a detailed review of costs-of-proof sanctions imposed by the trial court, and reduced them to reasonable costs and fees. See §6.52.
Attorney Fees as Damages
In Aerotek, Inc. v Johnson Group Staffing Co. (2020) 54 CA5th 670, the court of appeal held that a dispute over ownership of a statutory fee award involving interpretation of the fee agreement is not an action for damages and does not confer the right to a jury trial. See §§7.21, 11.6.
Methods of Fee Calculation
In Johnson v MGM Holdings, Inc. (9th Cir 2019) 943 F3d 1239, a consumer protection class action, the Ninth Circuit held that the district court properly applied the lodestar method, with a percentage cross-check, to calculate a “clear-sailing” fee award. The court approved a fee set under the lodestar method that exceeded the 25 percent benchmark that is usually applied in common fund cases. See §§8.10, 8.18.
In Indirect Purchaser Class v Erwin (In re Optical Disk Drive Prods. Antitrust Litig.) (9th Cir 2020) 959 F3d 922, the Ninth Circuit discussed class actions in which prospective class counsel propose a fee structure in a competitive bidding process to become lead counsel, and indicated that the bid becomes the starting point for determining a reasonable fee. See §8.18.
In Campbell v Facebook, Inc. (9th Cir 2020) 951 F3d 1106, the Ninth Circuit affirmed a lodestar-based fee in a common fund case and rejected a challenge to a “clear sailing” settlement. See §8.19.
In Reynolds v Ford Motor Co. (2020) 47 CA5th 1105, a Song-Beverly Act case, the court of appeal affirmed a 1.2 multiplier, holding that the fee award could not be reduced using the proportion of fees to damages. The court also found the trial court did not err in declining to examine the attorney’s contingent fee agreement to determine counsel’s fee. See §§8.30, 8.31, 8.36, 10.14.
Determining the Lodestar
In Parsons v Ryan (9th Cir 2020) 949 F3d 443, the Ninth Circuit held that time compensable for winning an enforcement motion was not limited to time spent on the motion itself but included time spent in the process leading up to the motion, and in Vargas v Howell (9th Cir 2020) 949 F3d 1188, the court ruled that fees may include time spent on “dead-ends” and unfiled motions. See §§9.9, 9.24.
In Santana v FCA US, LLC (2020) 56 CA5th 334, the court of appeal refused to apportion fees between fee-shifting and non-fee-shifting claims, even though it reversed on two causes of action, because the same facts were involved and the defendant failed to show that time was spent solely on the non-fee-shifting claim. See §9.66.
In Mikhaeilpoor v BMW of N. Am., LLC (2020) 48 CA5th 240 and Morris v Hyundai Motor Am. (2019) 41 CA5th 24, the appellate courts affirmed a reduction of the lodestar due to inefficient use of multiple counsel. See §9.73.
In Caldera v Department of Corrections & Rehabilitation (2020) 48 CA5th 601, a FEHA case, the court of appeal held that out-of-town counsel’s home office rates should not have been reduced when the undisputed evidence showed the plaintiff had been unable to find local counsel to take his case. In Marshall v Webster (2020) 54 CA5th 275, an anti-SLAPP case, the court upheld the trial court’s determination that the prevailing defendant’s attorney was entitled to home-office rates when the defendant lacked resources to pay an attorney, and could not find an attorney to take the case on a contingency basis. See §9.115.
The California Supreme Court has granted review in Segal v ASICS Am. Corp. (review granted Sept. 30, 2020, S263569; superseded opinion at 50 CA5th 659) to determine whether a party may recover costs for multiple sets of trial exhibits and closing slides not used at trial. The underlying court of appeal opinion also examines other costs, including deposition travel fees and interpreter fees for depositions and trial. See §9.127.
Adjustments to the Lodestar
A recent law review article, Carroll, Fee-Shifting Statutes and Compensation for Risk, 95 Ind LJ 1021 (Fall 2020), extensively examines and criticizes the federal restriction on using risk as a factor to enhance the lodestar. See §§10.18, 10.42, 10.45.
In Santana v FCA US, LLC (2020) 56 CA5th 334, a Song-Beverly Act case, the court of appeal rejected the claim that a risk multiplier was “double-counted” in counsel’s hourly rates, and affirmed plaintiff’s fee award even though one cause of action involving significant damages was reversed. See §§10.5, 10.8, 10.42.
In Caldera v Department of Corrections & Rehabilitation (2020) 48 CA5th 601, the court of appeal agreed that the FEHA action was “a novel lawsuit of statewide importance” but found that the trial court’s incorporation of multiplier factors into the hourly rate did not allow the appellate court to determine exactly what impact those factors had. The trial court was directed on remand to consider the multiplier factors separate from determination of the hourly rate. See §§10.5, 10.39.
In Vargas v Howell (9th Cir 2020) 949 F3d 1188, the Ninth Circuit held that a 90 percent reduction of fees was not justified by the fact that plaintiff’s case settled for much less than the initial demand. The court noted that had counsel started from a lower number, the settlement might have been lower, and the settlement also included the right to claim fees. See §§10.56, 10.58.
In Indirect Purchaser Class v Erwin (In re Optical Disk Drive Prods. Antitrust Litig.) (9th Cir 2020) 959 F3d 922, a megafund case, the Ninth Circuit held that the district court properly refused to consider the prospect of future settlements against other parties in assessing a percentage-based fee. See §10.73.
Claiming and Opposing Trial Court Fees
Documentation required in support of a fee application in federal court can vary from court to court and judge to judge, but the Ninth Circuit in Parsons v Ryan (9th Cir 2020) 949 F3d 443 clarified that attorneys need only “keep records in sufficient detail that a neutral judge can make a fair evaluation of the time expended, the nature and need for the service, and the reasonable fees to be allowed.” See §11.49. In contrast, the state court of appeal in Taylor v County of Los Angeles (2020) 50 CA5th 205 stressed that contemporaneous time records are most credible and strongly preferred. See §11.50.
The court of appeal in Highland Springs Conf. & Training Ctr. v City of Banning (2020) 42 CA5th 416, citing this text, held that when a new judgment on the merits has been entered following an appeal, the timeline in Cal Rules of Ct 3.1702(b) applies to a claim for trial court and appellate fees; the fee motion must generally be filed within 60 days from the notice of entry of the judgment. See §11.37.
In Hernandez v FCA US LLC (2020) 50 CA5th 329, the court of appeal held that relief under CCP §473(b) was not available after a case was settled and dismissed, and counsel failed to file a fee motion within the time set by the court. See §11.40.
Fees for Work in Arbitration
In Conyer v Hula Media Servs., LLC (review granted Dec. 16, 2020, S264821, superseded opinion at 53 CA5th 1189), a Fair Employment and Housing Act (FEHA) case, the court of appeal invalidated an arbitration agreement’s two-sided attorney fee clause but severed the impermissible clause and upheld the agreement. The California Supreme Court granted review to decide whether it was error to sever unconscionable terms and order the agreement enforced without determining whether the invalid provisions were included in the agreement in bad faith. See §14.2.
In Storm v Standard Fire Ins. Co. (2020) 52 CA5th 636, the court of appeal held that when an arbitration agreement strictly limited the arbitrator’s decisional authority to issues of damages, the proper forum to request costs under CCP §998 was the trial court that confirmed the arbitration award. See §14.9.
Appellate Review of Fee Orders
In K.J. v Los Angeles Unified Sch. Dist. (2020) 8 C5th 875, the California Supreme Court held that a notice of appeal listing only the party as appellant but addressing a discovery sanctions order directed at the party’s trial attorney was sufficient to allow the trial attorney to challenge the order on appeal. See §§16.4, 16.12.
The party challenging a fee award has the burden of producing an adequate record and it is becoming more and more essential to have the fee hearing recorded and made a part of the record. In Taylor v County of Los Angeles (2020) 50 CA5th 205, for example, the court of appeal upheld denial of fees in part for failure to provide a transcript of the fee hearing. See §16.17.
In Patel v Mercedes-Benz (2019) 43 CA5th 1007, a Song-Beverly Act case, the court of appeal held that denying plaintiff the attorney fees that he incurred before a co-plaintiff was added at trial was inconsistent with the purposes behind fee awards in consumer protection legislation. See §§16.24, 16.30.
Mikhaeilpoor v BMW of N. Am., LLC (2020) 48 CA5th 240 and Morris v Hyundai Motor Am. (2019) 41 CA5th 24 both discuss how fee awards in Song-Beverly Act cases are not subject to the heightened standard of review applicable to federal civil rights claims, and so do not require specific findings on reductions. See §16.24.