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NAVARRO v. GENERAL NUTRITION CORPORATION

September 20, 2005.

MERCEDES NAVARRO, Plaintiff,
v.
GENERAL NUTRITION CORPORATION, Defendant.



The opinion of the court was delivered by: SAUNDRA ARMSTRONG, District Judge

ORDER

This matter comes before the Court on Plaintiff's Motion for Attorney's Fees [Docket No. 293]; Defendant General Nutrition Corporation's ("GNC") Motion for Attorney's Fees [Docket No. 296]; Magistrate Judge Chen's Report and Recommendation re Plaintiff's and Defendant's Motions for Attorney's Fees [Docket No. 330]; and GNC's Motion for De Novo Determination of the Magistrate's Report and Recommendation [Docket No. 332].

Having read and considered the arguments presented by the parties in the papers submitted to the Court, as well as Magistrate Judge Chen's Report and Recommendation, the Court finds this matter appropriate for resolution without a hearing. The Court hereby GRANTS IN PART AND DENIES IN PART GNC's Motion for De Novo Determination [Docket No. 332]; GRANTS IN PART AND DENIES IN PART Plaintiff's Motion for Attorney's Fees [Docket No. 293]; and GRANTS IN PART AND DENIES IN PART GNC's Motion for Attorney's Fees [Docket No. 296].

  BACKGROUND

  A. Factual Background*fn1

  Plaintiff Mercedes Navarro ("Navarro" or "Plaintiff"), a California resident, was hired by General Nutrition Corporation ("GNC"), a Pennsylvania corporation, in March 1999. In October 1999, she was promoted to manager of the GNC store in San Leandro, California. On May 8, 2002, Plaintiff fell off a ladder while working at the San Leandro GNC store and suffered injuries. After returning to work, however, Plaintiff continued to experience pain as a result of the fall. Plaintiff thereafter took off an additional three weeks using accumulated sick days and vacation time.

  On July 11, 2002, Plaintiff notified GNC's Human Relations department that she wanted to take additional leave under the Family Medical Leave Act of 1983 ("FMLA") and the California Family Rights Act ("CFRA"). On July 15, 2002, GNC's Human Relations department determined that, subject to certain conditions, Plaintiff provisionally met the eligibility requirements for leave.

  Plaintiff returned to work on July 18 and 19, 2002. On the second of the two days, Plaintiff's supervisor, Lorainne Crisp ("Crisp"), asked her to open the Castro Valley GNC store and manage its first shift the next morning, July 20, 2002, at 10:00 a.m. That night, Plaintiff presented to the St. Rose Hospital emergency room with complaints of "anxiety" and "chronic pain." The physician's report indicated that Plaintiff "should be able to return to work/school" on July 22, 2002. Plaintiff was discharged at 1:45 a.m. on July 20, 2002 but did not return to work to open the Castro Valley GNC that day.

  Plaintiff was immediately suspended, but given the opportunity to provide a doctor's note relating to her emergency room visit in order to avoid termination. Plaintiff's employment was subsequently terminated on July 29, 2002. Plaintiff contends that she did not receive notice of her termination until August 8, 2002. Plaintiff also contends that she provided GNC with a medical certification that was signed by Dr. Deborah Greer on August 5, 2002. The certification, which did not address Plaintiff's July 19, 2002 emergency room visit, indicated that Plaintiff had a "serious health condition" under the FMLA. The certification further stated that Plaintiff suffered from continued right shoulder and back pain; that the condition commenced May 8, 2002; and that she would only be able to work intermittently through September 30, 2002.

  B. Procedural Background

  On December 26, 2002, Plaintiff filed a complaint in Alameda County Superior Court against Defendants GNC and Crisp alleging: (1) wrongful termination in violation of public policy (against GNC); (2) violation of the FMLA (against GNC); (3) violation of the CFRA (against GNC); (4) unfair competition in violation of California Business and Professions Code § 17203 (against GNC); (5) violation of the California Fair Employment & Housing Act ("FEHA") for race discrimination and discrimination on the basis of medical condition (against GNC); and (6) intentional infliction of emotional distress (against GNC and Crisp). GNC removed the action to this Court on February 12, 2003 based on federal question jurisdiction. GNC also alleged in the Notice of Removal that the Court had diversity jurisdiction because Defendant Crisp*fn2 was a "sham" defendant. Plaintiff did not oppose removal.

  On March 18, 2003, this Court issued an Order setting the initial Case Management Conference for July 23, 2003. On July 7, 2003, pursuant to the Court's Order, the parties filed a Joint Case Management Conference Statement. However, on July 23, 2003, Plaintiff failed to appear for the telephonic Case Management Conference. Accordingly, on July 29, 2003, the Court issued an Order to Show Cause why the action should not be dismissed. Per the Court's instructions, Plaintiff's counsel, Mr. Hoffman, filed a Declaration on August 11, 2003 explaining Plaintiff's failure to initiate the telephone conference call. The Court set aside the Order to Show Cause on August 21, 2003.

  On October 16, 2003, a further Case Management Conference was held. At the Case Management Conference, the Court set the case for a March 22, 2004 trial. The parties were ordered to attend a pretrial conference on March 9, 2004.

  On January 7, 2004, the parties attended a mediation but were unable to reach settlement. On January 15, 2004, the parties attended a Settlement Conference with Magistrate Judge Chen but, again, were unable to reach settlement.

  On January 16, 2004, GNC filed a motion requesting a continuance of the pretrial conference and trial date [see Docket No. 35]. In the motion, GNC stated that it had been attempting for months to informally resolve its dispute with Plaintiff and that, due to what it believed was a mutual desire between the parties to keep the costs of litigation low, it had not served Plaintiff with formal discovery requests but, instead, had voluntarily provided Plaintiff with a significant amount of information and documentary evidence relevant to her claims. GNC also alleged that it had a reasonable expectation that the case would not proceed to trial and did not realize until the January 7, 2004 mediation that the parties would not be able to reach settlement. GNC further alleged that Plaintiff had informed GNC that she was willing to extend the discovery deadline but was unwilling to stipulate to a continuance of the trial date because she wanted to prevent GNC from being able to file any dispositive pretrial motions.

  On January 27, 2004, Plaintiff's counsel signed a stipulation agreeing that Plaintiff's claim for race discrimination was baseless and that Plaintiff would no longer pursue that claim. Plaintiff did not, however, move to dismiss that claim.

  On February 10, 2004, Plaintiff filed an untimely opposition to GNC's motion for a continuance of the pretrial and trial dates [see Docket No. 42]. Plaintiff's opposition did not respond substantively to any of the arguments set forth in GNC's motion. However, in a supporting declaration, Plaintiff's counsel stated that Plaintiff was opposed to the continuance because Plaintiff was "completely ready for trial" [see Docket No. 43].

  On February 13, 2004, GNC filed a reply brief, in which it informed the Court that Plaintiff's counsel's representation that Plaintiff was "completely ready for trial" was patently false, as Plaintiff had propounded a significant amount of discovery requests on GNC that had not been completed, and had noticed eleven depositions of GNC's current and former employees, nine of which had not yet taken place [see Docket No. 46]. GNC also stated that Plaintiff had not yet responded to GNC's written discovery requests, despite the fact that the corresponding deadlines had passed, and that Plaintiff had failed to disclose the identity of her purported expert(s).

  On February 17, 2004, the Court granted GNC's motion and continued the trial date to May 17, 2004, with the pretrial conference to take place on May 4, 2004.

  On March 15, 2004, Defendants GNC and Crisp filed a Motion for Summary Judgment. On March 24, 2004, GNC and Crisp filed a Motion to Shorten Time on Defendants' Motion for Summary Judgment, in which Defendants requested a hearing date of April 6, 2004, so that the Motion for Summary Judgment could be heard by the Court-ordered motion cut-off deadline. On March 29, 2004, the Court granted Defendants' Motion to Shorten Time, and ordered the parties to complete the briefing on Defendants' Motion for Summary Judgment on or before April 13, 2004. On April 6, 2004, Plaintiff filed an Opposition to Defendants' Motion for Summary Judgment which included an untimely cross-motion for summary adjudication.*fn3 The Court subsequently sustained Defendants' objection to Plaintiff's cross-motion and ordered it stricken from the record [see Docket No. 96].

  On April 23, 2004, the Court issued an Order granting in part and denying in part Defendants' Motion for Summary Judgment. Pursuant to the Court's April 23, 2004 Order, Plaintiff's unfair competition and intentional infliction of emotional distress claims were dismissed. However, Defendants' Motion for Summary Judgment was denied with respect to Plaintiff's claims for: (1) FMLA/CFRA interference, (2) FMLA/CFRA retaliation, and (3) wrongful termination.*fn4 Also pursuant to the Court's April 23, 2004 Order, the parties were referred to Magistrate Judge Chen for a further Settlement Conference.

  On April 29, 2004, the parties participated in a Settlement Conference with Magistrate Judge Chen. During the Settlement Conference, GNC offered Plaintiff $65,000 to settle the case. Plaintiff's counsel contends, however, that Judge Chen did not communicate the $65,000 offer to him. See Supp. Decl. of Michael Hoffman ("Supp. Hoffman Decl.") at ¶ 1. Since Plaintiff was not willing to settle for an amount below six figures, the Settlement Conference was terminated. Id.

  Trial commenced on May 17, 2004. On May 26, 2004, Plaintiff filed a Motion to Amend the Complaint [Docket No. 251]. In the Motion to Amend, Plaintiff conceded that, although her complaint alleged that Defendants had violated FEHA by discriminating against her on the basis ofa "medical condition," she had no evidence in support of that claim. Plaintiff contended, however, that the evidence at trial supported a claim under FEHA for discrimination on the basis of physical disability and requested leave to amend the complaint accordingly. The Court denied Plaintiff's Motion to Amend the Complaint on May 26, 2004.

  On May 27, 2004, the jury returned to Court with a unanimous verdict in favor of Plaintiff on her cause of action for FMLA interference and awarded Plaintiff past economic loss damages in the amount of $60,500. With respect to Plaintiff's claims for FMLA retaliation, violation of CFRA rights, CFRA rights retaliation, and wrongful discharge in violation of public policy, the jury returned a unanimous verdict for GNC.*fn5

  On June 17, 2004, Plaintiff filed a Bill of Costs in the amount of $15,945.12 and GNC filed a Bill of Costs in the amount of $64,400.00. Also on June 17, 2004, Plaintiff filed a Motion for Attorney's Fees, requesting an award of attorney's fees in the total amount of $687,647.87.

  On June 18, 2004, GNC filed its Motion for Attorney's Fees, requesting an award offees in the amount of $494,386.00.

  On July 7, 2004, costs were taxed in the amount of $9,374.88 against GNC and $34,300.68 against Plaintiff.

  On September 21, 2004, this Court referred Plaintiff's and GNC's Motions for Attorney's Fees to Magistrate Judge Chen for a report and recommendation.

  On November 19, 2004, Magistrate Judge Chen issued his Report and Recommendation [Docket No. 330].

  On December 7, 2004, GNC filed its Objections to Portions of Magistrate Judge Chen's Report and Recommendation and the instant Motion for De Novo Determination.

  LEGAL STANDARD

  Under Federal Rule of Civil Procedure ("Rule") 54(d)(2)(D), the Court may refer a motion for attorneys' fees to a magistrate judge under Rule 72(b) as a dispositive pretrial matter. See Fed.R.Civ.P. 54(d)(2)(D). Rule 72(b) allows a magistrate judge to "hear a pretrial matter dispositive of a claim or defense of a party." Fed.R.Civ.P. 72(b). Rule 72(b) also governs the procedure for objecting to a magistrate judge's determination of a dispositive pretrial matter:
A party objecting to the recommended disposition of the matter shall promptly arrange for the transcription of the record, or portions of it as all parties may agree upon or the magistrate judge deems sufficient, unless the district judge otherwise directs. Within 10 days after being served with a copy of the recommended disposition, a party may serve and file specific, written objections to the proposed findings and recommendations. A party may respond to another party's objections within 10 days after being served with a copy thereof. The district judge to whom the case is assigned shall make a de novo determination upon the record, or after additional evidence, of any portion of the magistrate judge's disposition to which specific written objection has been made in accordance with this rule. The district judge may accept, reject, or modify the recommended decision, receive further evidence, or recommit the matter to the magistrate judge with instructions.
Fed.R.Civ.P. 72(b).

  Northern District Civil Local Rule 72-3 requires that an objection filed pursuant to Rule 72(b) "must be accompanied by a motion for de novo determination, specifically identify the portions of the Magistrate Judge's findings, recommendation or report to which objection is made and the reasons and authority therefor." N.D. Civil L.R. 72-3(a). In addition, the Court's review and determination of objections filed pursuant to Civil Local Rule 72-3(a) shall be upon the record of the proceedings before the Magistrate, except when the Court grants a motion for expansion or addition to the record or for an evidentiary hearing. Id. at 72-3(c).

  The Court evaluating a Magistrate Judge's recommendation may adopt those portions of the recommendation to which no specific objection is made, as long as those sections are not clearly erroneous. 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(b). However, "[t]he district court cannot simply `concur' in the magistrate's findings, . . . it must conduct its own review in order to adopt the recommendations." McCombs v. Meijer, Inc., 2005 U.S. App. LEXIS 949 *31 (6th Cir. 2005) (citing Massey v. City of Ferndale, 7 F. 3d 506, 510-11 (6th Cir. 1993)). Further, in computing an award, the Court should provide a "detailed account of how it arrives at appropriate figures for `the number of hours reasonably expended' and `a reasonable hourly rate.'" Hensley v. Eckerhart, 461 U.S. 424, 436 (1983). The Court must also conduct a de novo review of all of the Magistrate Judge's conclusions of law. See Barilla v. Ervin, 886 F.2d 1514, 1518 (9th Cir. 1989).

  ANALYSIS

  I. Plaintiff's Motion for Attorney's Fees

  In Plaintiff's Motion for Attorney's Fees, Plaintiff requests an award of attorney's fees in the amount of $687,647.87, based on a lodestar value of $343,823.81 and a multiplier of 2.0. Plaintiff's Motion is premised on the fact that Plaintiff was the prevailing party on her FMLA interference claim.*fn6

  In its opposition, GNC argues that the Court should deny Plaintiff's Motion in its entirety, or, alternatively, award fees and costs in the total amount of $6,518.50. In support of this argument, GNC sets forth the following points: (1) Plaintiff's counsel's requested rates are not in line with those prevailing in the community for lawyers of comparable skill and reputation; (2) Plaintiff's counsel's requested hours should be reduced to exclude hours billed by Mr. Rosenthal, since Plaintiff did not provide the Court with any documentation concerning Mr. Rosenthal or his background and did not provide a statement of the actual hours billed by Mr. Rosenthal; (3) Plaintiff's counsel's requested hours should be reduced to exclude hours based on uncooperative and contentious conduct; (4) Plaintiff's counsel's requested hours should be reduced to exclude time spent pursuing frivolous claims; (5) Plaintiff's counsel's requested hours should be reduced to account for the fact that Plaintiff rejected a settlement offer that was more favorable than the award she received from the jury; (6) Plaintiff's requested paralegal hours should be reduced to exclude time spent on purely clericalwork; (7) Plaintiff's requested 2.0 multiplier is unfounded; (8) Plaintiff's lodestar should be reduced to account for Plaintiff's limited success; and (9) Plaintiff's total award should be reduced to exclude certain costs already included in Plaintiff's Bill of Costs. GNC also argues that any award of attorney's fees to Plaintiff should be offset by GNC's attorney's fees award.

  In his Report and Recommendation, Magistrate Judge Chen rejects most of GNC's arguments*fn7 and recommends a total lodestar of $320,031.00. In establishing the lodestar, Judge Chen finds Plaintiff's requested hourly rates to be reasonable and, with a few minor modifications,*fn8 finds Plaintiff's purported hours to be reasonable as well. However, because Plaintiff achieved limited success in the litigation, Judge Chen recommends a thirty-five percent (35%) reduction to the lodestar. Judge Chen also recommends an award ofcosts in the gross amount of $6,550.24, reduced by thirty-five percent, for a total cost award of $4,257.66. The total fees and costs award recommended is therefore $212,277.80.

  GNC objects to the amount of fees awarded to Plaintiff in general and, specifically, contends that Judge Chen erred by: (1) failing to reduce Plaintiff's lodestar for fees pertaining to the unsuccessful and unrelated FEHA claims; and (2) failing to adjust Plaintiff's lodestar by a greater amount to account for Plaintiff's limited success in the litigation.

  Having reviewed the record in its entirety, including Judge Chen's Report and Recommendation, the Court finds that only some of Judge Chen's recommendations should be adopted by the Court. Judge Chen's specific recommendations, and the Court's own findings and conclusions, are detailed below.

  A. Reasonable Hourly Rate

  The first step in the lodestar analysis is to establish a reasonable hourly rate for Plaintiff's attorneys and paralegal staff. Determining a reasonable hourly rate is a critical inquiry. Jordan v. Multnomah County, 815 F.2d 1258, 1262 (9th Cir. 1987) (citing Blum v. Stenson, 465 U.S. 886, 895 n. 11 (1984)). The Court must consider several factors, including the experience, skill and reputation of the applicant, and must look to the rate prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation. Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210-11 (9th Cir. 1985). The Court may not merely refer to the rates actually charged to the prevailing party. Id. at 1210-11. Instead, the reasonable hourly rate is based on the "market rate" for the services rendered. See People Who Care v. Rockford Bd. of Educ., 90 F.3d 1307, 1310 (7th Cir. 1996). It is the applicant's burden to produce evidence, other than the declarations of interested counsel, that "the requested rates are in line with those prevailing in the community for similar services of lawyers of reasonably comparable skill and reputation." Jordan, 815 F.2d at 1263. In addition, in figuring a reasonable fee, the Court should consider the outcome of the action, the customary fees, and the novelty or difficulty of the issues presented. Chalmers, 796 F.2d at 1211 (citing Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975)). Once counsel has established the reasonableness of his or her rate, then the burden shifts to the opposing party to demonstrate why the rate should be lower. Spegon v. Catholic Bishop of Chicago, 175 F.3d 544, 554 (7th Cir. 1999).

  Plaintiff requests that her attorneys be awarded fees at the following hourly rates: (1) $325 per hour for attorney Michael Hoffman; (2) $300 per hour for attorney Josh Rosenthal; (3) $285 per hour for attorney Marilyn Minger; (4) $65 per hour for paralegal Katie Youngmark; and (5) $65 per hour for apprentice Geraldine Camp. GNC objects to the hourly rates requested for Mr. Hoffman and Ms. Minger on the grounds that they are unreasonable in light of Mr. Hoffman and Ms. Minger's demonstrated lack of skill in the litigation. GNC contends that an hourly rate of $150 for Mr. Hoffman and Ms. Minger is more in line with their demonstrated skill and experience. GNC also objects to the requested hourly ...


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