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Camacho v. Bridgeport Financial

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA


July 24, 2008

RITA CAMACHO, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
BRIDGEPORT FINANCIAL, INC., ET AL., DEFENDANTS.

The opinion of the court was delivered by: Charles R. Breyer United States District Judge

ORDER GRANTING MOTION FOR ATTORNEY'S FEES

Now pending before the Court is Plaintiff's supplemental motion for attorney's fees. After this Court awarded Plaintiff over $70,000 in attorney's fees on May 2, 2007, Plaintiff successfully appealed the award to the Ninth Circuit Court of Appeals. The Ninth Circuit vacated the Court's decision and directed the Court to recalculate a reasonable fee award "using the 'lodestar' method." Camacho v. Bridgeport Fin., 523 F.3d 973, 978 (9th Cir. 2008) (quoting Ferland v. Conrad Credit Corp., 244 F.3d 1145, 1149 n.4 (9th Cir. 2001) (per curiam)). After a thorough review of the parties' submissions, the Court concludes that faithful application of the lodestar method supports an attorney's fee award of $141,935.00 plus interest, in addition to $6,809.36 in costs.

BACKGROUND

Plaintiff brought this action against Defendant for violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p, arguing that Defendanillegally required debtors to submit their disputes regarding debt collection in writing. Plaintiff prevailed on her claim in this Court, and again in the Ninth Circuit when Defendant appealed. See Camacho v. Bridgeport Fin., 430 F.3d 1078 (9th Cir. 2005). The parties subsequently entered into a classwide settlement, which the Court approved on November 17, 2006. The settlement compelled Defendant to pay Plaintiff $1,000 in damages -- the maximum amount permitted for an individual plaintiff under the FDCPA, see 15 U.S.C. § 1692k(a)(2)(A) -- and resolved the class claims by requiring Defendant to pay the maximum authorized by statute -- 1% of Defendant's net worth or $341.50 -- in the form of a cy pres award to Legal Services of Northern California for use in consumer education or representation. As the prevailing party, Plaintiff sought attorney's fees pursuant to § 1692k(a)(3), which authorizes a grant of reasonable attorney's fees and costs "in the case of any [FDCPA] successful action." In its Second Amended Order on May 2, 2007, this Court awarded Plaintiff's attorneys $6,809.36 in costs and $70,260 in fees.*fn1 The Court arrived at its fee award after finding that Plaintiff's requested hourly rates were excessive and that "numerous other courts" had more properly concluded that $200 was a reasonable rate for representation of a plaintiff in a case under the FDCPA. Plaintiff appealed to the Ninth Circuit, which vacated the award on the ground that this Court "erred by not identifying the relevant community, and by not explaining what was the prevailing hourly rate in that community for similar services by lawyers of reasonably comparable skill, experience and reputation, as well as by awarding a 'flat award' of $500 for fees-on-fees." Camacho, 523 F.3d at 979. On remand, Plaintiff's attorneys seek fees at hourly rates ranging from $425-550. Defendant opposes the request, contending that an award based upon hourly rates of $200-250 is justified in light of the non-complex legal services provided by Plaintiff's counsel.

LEGAL STANDARD

Although litigants in the United States generally pay their own attorney's fees, Congress has legislated that parties who prevail in actions brought under the FDCPA may recover reasonable attorney's fees and costs from the opposing side. Here, Defendant agreed to pay reasonable and necessary attorney's fees and costs pursuant to the parties' settlement agreement. See id. at 978. Fees may be awarded pursuant to settlement just as they may be awarded pursuant to judgment. See Friend v. Kolodzieczak, 72 F.3d 1386, 1391 (9th Cir. 1995).

To calculate attorney's fees awarded under § 1692k, district courts must utilize the lodestar method. See Camacho, 523 F.3d at 978. "The 'lodestar' is calculated by multiplying the number of hours the prevailing party reasonably expended on the litigation by a reasonable hourly rate." Ferland, 244 F.3d at 1149 n. 4 (citation and internal quotation marks omitted). The party seeking fees bears the burden of documenting the hours expended in the litigation and must submit evidence supporting those hours and the rates claimed. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). In determining the appropriate lodestar amount, the court may exclude from the fee request any hours that are "excessive, redundant, or otherwise unnecessary." Id. at 434. In addition to setting the number of hours, the court must also determine a reasonable hourly rate, "considering the experience, skill, and reputation of the attorney requesting fees." Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210 (9th Cir. 1986). In rare and exceptional cases, the court may adjust the lodestar upward or downward using a multiplier based on facts not subsumed in the initial lodestar calculation. See Welch v. Metropolitan Life Ins. Co., 480 F.3d 942, 946 (9th Cir. 2007). These factors include, inter alia, the "undesirability" of the case, the preclusion of employment by the attorney due to acceptance of the case, and the nature and length of the professional relationship with the client. See Van Gerwen v. Guar. Mut. Life Co., 214 F.3d 1041, 1045 n.2 (9th Cir. 2000).

DISCUSSION

I. Reasonable Hourly Rate

To determine a reasonable hourly rate for the work performed by Plaintiff's counsel, the Court must look to the "rate prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation." Barjon v. Dalton, 132 F.3d 496, 502 (9th Cir. 1997) (internal quotation marks omitted). For purposes of Plaintiff's feemotion, the relevant "community" is the Northern District of California. See Camacho, 523 F.3d at 979. "[T]he burden is on the fee applicant to produce satisfactory evidence -- in addition to the attorney's own affidavits -- that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation." Blum, 465 U.S. at 895 n. 11. Here, Plaintiff submitted declarations from all four fee applicants as well as from two other attorneys in support of her argument that the requested hourly rates -- $425 per hour for Mr. Berg, $465 an hour for Mr. Bragg, $500 for Mr. Rubin, and $550 for Mr. Pearl -- are reasonable. Furthermore, Plaintiff cited to several recently-litigated cases in the Northern District of California where her attorneys' hourly rates were found to be reasonable. Plaintiff also cited to several non-FDCPA cases from the Northern District of California where the reasonable hourly rate determinations were found to be in the $325 to $700 range. For the most part, Plaintiff's evidentiary submission supports the conclusion that an award of fees in the range of $325-500 per hour is reasonable for attorneys of like skill and experience. However, "declarations filed by the fee applicant do not conclusively establish the prevailing market rate[. T]he party opposing the fee application has a burden of rebuttal that requires submission of evidence to the district court challenging the accuracy and reasonableness of the facts asserted by the prevailing party in its submitted affidavits." Camacho, 430 F.3d at 980 (internal citations omitted). In support of its opposition motion, Bridgeport Financial submitted declarations from its own attorney and another attorney in a different case, in support of its argument that (1) the rates requested by Plaintiff's attorneys do not reflect the prevailing market rates and that the prevailing market rate for the services provided by Plaintiff's three attorneys is actually in the $200 to $250 range; (2) that this case is simple and involved non-complex issues of law and fact that did not justify the rates requested; and (3) that Plaintiff's "limited success" in this case does not justify the rates requested. The Court concludes that neither party has persuasively justified its requested rate, and that a reasonable rate falls somewhere in the middle of the parties' positions. With respect to Bridgeport Financial, the Court finds that it relies primarily on inapposite case law. Although Bridgeport Financial cites several cases in the Northern District where the court set rates in the $200 to $250 range, these cases are distinguishable or may be invalid in light of the Ninth's Circuit's most recent decision in Camacho. For example, Lea v. Cypress Collections, 2007 WL 988184, at *1-2 (N.D. Cal Apr. 2, 2007), was much simpler than the case at hand. There, the court found that the action was "a relatively simple FDCPA case" with no dispositive motion, and thus required no "sophisticated knowledge of FDCPA." Id. at *2. Similarly, in Abad v. Williams, Cohen & Gray, 2007 WL 1839914, at *1 (N.D. Cal. June 26, 2007), no dispositive motion practice occurred; in fact, the case settled only five months after the complaint was filed. In Antiel v. G.C.S. Credit Sys. Inc., slip. op., case no. C-05-04604 RMW (N.D. Cal. Mar. 17, 2006), the court noted that the "case was relatively simple" because "all [plaintiff] did was formulate a complaint and accept an offer of judgment under Rule 68 before bringing this instant motion for attorney's fees." Id. at 5. The cases above are in stark contrast to this case, which was certified as a class action with more than 7,000 members and involved an issue of first impression in this Circuit: whether collection agencies may limit consumers to disputing their debts only in writing. Plaintiff successfully prevailed on that issue, after extensive briefing before this Court and the Ninth Circuit. Bridgeport Financial also relies on cases that are distinguishable because, unlike here, the fee requests were largely unopposed. In Breon v. Capital Recovery Associates, Inc., slip op., case no. C-05-00766 JW (N.D. Cal. Nov. 8, 2005), and Montez v. Capital Recovery Associates, Inc., slip op., case no. C-05-01207 JW (N.D. Cal. Nov 8, 2005), the judge noted that "[a]ll Plaintiff did [] was formulate the complaint, obtain an entry of default, and immediately thereafter, file an unopposed motion for judgment." Breon, C-05-00766 at 4; Montez, C-05-01207 at 4. Cases involving unopposed fee motions provide an unreliable gauge of reasonable rates because "the court might simply approve a request for fees without adequate inquiry or comment." In re Quantum Health Res., Inc., 962 F. Supp. 1254, 1256 (C.D. Cal. 1997). Bridgeport Financial also cites Johnson v. Credit International, Inc., 2005 WL 2401890, *4 (N.D. Cal. July 28, 2005). However, the court in Johnson relied on cases outside of the Northern District of California, which the Ninth Circuit held in Camacho to be erroneous.

Finally, Bridgeport Financial relies on two cases where the court used Census Bureau data to find the prevailing market rate. These cases, Baerthlein v. Electronic Data Systems Corp., No. C-05-00196 VRW, 2005 WL 818381, at *5 (N.D. Cal. Apr. 7, 2005), and Wingate v. South San Francisco Scavenger Co., slip op., case no. C-01-4334 VRM (N.D. Cal. March 11, 2003), utilized Judge Walker's fee calculation method from Yahoo! Inc. v. Net Games, Inc., 329 F. Supp. 2d 1179, 1183 (N.D. Cal. 2004). The Yahoo! methodology employs Bureau of Labor Statistics data to determine the average market rate for attorneys in the San Francisco Bay Area. However, in light of the Ninth Circuit's decision in Camacho II, this Court declines to apply the Yahoo! method and instead uses the legal standard articulated by the Ninth Circuit -- that is, determining a reasonable hourly rate by analyzing the prevailing rates in the Northern District of California for similar services by lawyers of comparable skill, experience, and reputation. Thus, the Court does not find Defendant's reliance on cases awarding $200-250 persuasive under the circumstances. With respect to Plaintiff's position, the Court is reluctant to award the rate requested in light of the "results obtained." See Van Gerwen, 214 F.3d at 1045 n.2 (citing Blum v. Stenson, 465 U.S. 886, 898-901 (1984)). Although Plaintiff's victory in prevailing on an unsettled issue of FDCPA law is not to be discounted, the Court must consider the significance of Plaintiff's limited financial recovery.*fn2

Through settlement, Plaintiff obtained just $1,000 on her own behalf and $341.50 for a cy pres fund. It is unsettling, to say the least, that Plaintiff's counsel -- who prosecuted an action that they must have known would allow for de minimus financial relief -- now seek an award that dwarfs damages by a factor of almost 200. The tail is not just wagging the dog, but whipping it about violently. It may be, as Plaintiff argues, that the imbalance between damages and fees results from Congressional design. Regardless, the Court is entitled to take Plaintiff's exceptionally-limited success into account in setting a reasonable hourly rate. See Sorenson v. Mink, 239 F.3d 1140, 1147 (9th Cir. 2001) (holding that a district court may reduce a fee award on the basis of limited success).

In light of the evidence proffered by the parties, in combination with the Court's view of the results obtained by Plaintiff, the Court finds that a reasonable hourly rate falls somewhere in between the rates proposed by the parties. Accordingly, the Court will award attorney's fees at the rate of $375 per hour for Plaintiff's counsel, and at the rates requested by Plaintiff for the associate, clerk and paralegal who performed work on the matter.

II. Reasonable Hours

This Court previously determined that the hours spent litigating the merits of this case were reasonable. Defendant has proffered no new evidence to convince the Court that its prior determination was incorrect. Accordingly, the Court reaffirms that Plaintiff's counsel are entitled to compensation for the following time spent on litigating the merits: 120.9 hours by Mr. Berg, 155.7 hours by Mr. Bragg, and 58.7 hours by Mr. Rubin.*fn3 In addition, the Court finds that Mr. Bragg is entitled to an award of $1,610 for the hours billed by his law clerk (13 hours at $115) and his paralegal (1 hour at $115), which this Court previously found to be reasonable. In addition to time spent on the merits, Plaintiff seeks fees for those hours spent litigating the issue of fees. The "time spent in establishing the entitlement to and amount of the fee is compensable." Camacho, 523 F.3d at 981 (citing In re Nucorp Energy, Inc., 764 F.2d 655, 659-660 (9th Cir.1985)). A calculation of fees-on-fees also uses the lodestar method, which requires multiplying "the number of hours the prevailing party reasonable expended on the litigation by a reasonable hourly rate." Camacho, 523 F.3d at 978. Here, in addition to the time spent on litigating the merits, Mr. Bragg requested fees for 17 hours of his time and 24.2 hours of his associate's time for the preparation of the original fee motion. Mr. Berg spent approximately 11.2 hours preparing his fee motion, and Mr. Rubin spent 1.5 hours preparing his application. Bridgeport opposes the request for fees- on-fees primarily on the ground that the work preparing the fee motion involved only "cutting and pasting." Def. Opp. at 13. It is true that Plaintiff's attorneys are exceedingly well-versed on this issue and had prepared similar motions in the past. Accordingly, this Court finds that a reduction of hours is appropriate; Mr. Bragg is entitled to fees for 10 hours of his time and 12 hours of his associate's time, and Mr. Berg is entitled to compensation for 6 hours of his time. See Welch, 480 F.3d at 950 ("A reduction in hours is appropriate if the court reasonably concludes that preparation of a motion demanded little of counsel's time.") (internal quotation and citation omitted). Plaintiff also seeks fees for the time spent litigating the issue of fees after remand from the Ninth Circuit. The Ninth Circuit has held that "Plaintiffs are entitled to compensation for all time reasonably spent defending this court's original orders awarding fees and costs," including the time spent on the case after remand. Friend, 72 F.3d at 1391. However, this Court finds that the hours requested by Mr. Pearl for the supplemental fee motion -- 17.7 hours on the opening brief and 13.7 hours on the reply -- are excessive in light of: (1) Mr. Pearl's breadth experience in these types of cases; and (2) the fact that many of the issues briefed by Mr. Pearl had already received attention in the first round of briefing.

This Court finds that only 15 hours can be deemed reasonable and thus compensable for time spent on post-appeal matters.

III. Calculation of Fees & Costs

Pursuant to the preceding analysis, the Court will award fees to the Plaintiff as follows:

Irving L. Berg 126.9 hours x $375/hour = $47,587.50

O. Randolph Bragg 165.7 hours x $375/hour = $62,137.50

Richard J. Rubin 60.2 hours x $375/hour = $22,575.00

Richard M. Pearl 15 hours x $375/hour = $5,625.00

Craig M. Shapiro 12 hours x $200/hour = $2,400.00

Craig M. Shapiro 13 hours x $115/hour = $1,495.00

Shannon Carter 1 hour x $115/hour = $115.00

In addition, the Court reaffirms its prior determination that Plaintiff is entitled to $6,809.36 in costs.

IV. Interest

Interest on an award for attorney's fees is mandatory once a judgment is obtained, even if the award is later reduced on appeal. See Perkins v. Standard Oil Co. of California, 487 F.2d 672, 676 (9th Cir. 1973). Interest is to be calculated from the date of the initial entry of judgement. Id. Bridgeport Financial argues that Federal Rule of Appellate Procedure 37(b) precludes an award of interest. See Def. Opp. at 14. However, Rule 37 only applies if the appellate court "modifies or reverses a judgment with a direction that a money judgment be entered in the district court." Fed. R. App. Proc. 37(b) (emphasis added). Where, as here, the court of appeals remands to the district court to determine the amount of a damages award, then the mandate does not direct the entry of a money judgment and Rule 37(b) is not implicated, and the district court is free to award post-judgment interest. See Planned Parenthood v. Am. Coalition of Life Activities, 518 F.3d 1013, 1018-19 (9th Cir. 2008). Accordingly, Plaintiff is entitled to the amount of interest requested -- 5.10% -- from January 24, 2007 to the date of this Order.*fn4

IT IS SO ORDERED.


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