The opinion of the court was delivered by: Hon. Dennis L. Beck
ORDER AWARDING ATTORNEYS' FEES AND COSTS
On June 21, 2007, Plaintiff Marsial Lopez, individually and as class representative, filed the instant civil rights action on March 27, 2007. On June 21, 2007, Plaintiffs Marsial Lopez, Sandra Chavez and Theodore Medina individually, and as class representatives, filed a First Amended Complaint ("FAC") against Kern County, the Kern County Sheriffs Department ("KCSD"), Kern County Sheriff Donny Youngblood (officially and individually), and former Kern County Sheriff Mack Wimbush (individually).
Plaintiffs brought this class action challenging the manner in which people are searched in Kern County‟s jails. Specifically, Plaintiffs, and the classes which they represented, prevailed in District Court with their constitutional challenge of two KCSD policies: strip searching*fn1 persons returning to jail from court who, as a result of their court appearance, became entitled to release, and the policy of strip searching (whether pre-trial, post-trial, or post-release) in groups without individual privacy. For purposes of this motion, these classes shall be referred to as the Post Release Class and Group Strip Search Class, respectively. There is no dispute as to the existence of either of the two above-mentioned policies, or of the fact that KCSD practices were in conformance thereto until their repeal in October, 2007, shortly after the filing of the instant lawsuit.
On March 31, 2009, this Court granted partial summary judgment/summary adjudication on the following: 1) KCSD violated the Fourth Amendment by routinely strip searching court-ordered releasees, and 2) KCSD violated the Fourth Amendment by routinely strip searching inmates in groups without privacy. This Court also denied Defendants‟ motion for summary adjudication on a number of issues, including whether the Sheriffs, in their jail operations function, are state actors and entitled to Eleventh Amendment immunity.
On that same date, this Court granted Plaintiffs‟ Motion for Class Certification. The Court certified the following two classes:
Post-Release Class: People who, from March 27, 2005, up to October 1, 2007, or the time of judgment or settlement of the case: (a) were in KCSD custody; (b) were taken from jail to court; (c) became entitled to release after going to court; and (d) were strip and/or vbc searched before release pursuant to KCSD‟s blanket policy, practice and/or custom to strip/vbc search all court returns, including those entitled to release.
Group Strip Search Class: People who, from March 27, 2005, up to October 1, 2007, or the time of judgment or settlement of the case: (a) were in KCSD custody; (b) were subjected to a strip and/or vbc search in a group with other inmates also being strip/vbc searched, which search did not afford privacy from others; and (c) whose strip searches were conducted pursuant to KCSD‟s blanket policy, practice and/or custom to regularly conduct strip/vbc searches in a group setting.
Defendants filed an appeal on April 28, 2009, on behalf of individual Defendants Donny Youngblood and Mack Wimbish. That was a direct appeal of the denial of 11th Amendment immunity. Defendants also filed a Rule 54(b) motion on April 28, 2009, requesting: 1) entry of judgment on all §1983 claims against the County on 11th Amendment immunity grounds, and 2) entry of judgment on the federal and California law claims for group strip searches (but not for post-release strip searches) regardless of whether 11th Amendment immunity is available. This Court denied the Rule 54(b) motion on July 1, 2009. On May 22, 2009, Defendants filed a §1292(b) motion for certification of issues for appeal along with a request for a stay. The §1292(b) motion was granted on July 15, 2009, but the request for stay pending resolution of this petition was denied without prejudice. This matter was pending on appeal before the Ninth Circuit when the parties reached a mediated class action settlement
The settlement agreement provides as follows:
(a) A person who was subjected for the first time during the class period (between March 27, 2005, and October 1, 2007) to a Kern County strip search after a Court ordered him or her to be released from all pending charges, and the person was in fact entitled to immediate release based on that order, will receive a payment of $1500 (subject to certain possible adjustments described below in ¶¶d and e).
(b) A person who was subjected for a second time during the class period
(between March 27, 2005, and October 1, 2007) to a Kern County strip search after a Court ordered him or her to be released from all pending charges, and the person was in fact entitled to immediate release based on that order, will receive a payment of $750 in addition to the $1500 for the first strip search (again subject to certain possible adjustments described below in ¶d.) No additional payments will be made to persons subjected to more than two such searches.
(c) A person who was strip searched in a group while in Kern County custody will receive a one time only payment (regardless of the number of times the person was strip searched in a group) of $200 (subject to certain possible adjustments described below in ¶¶2(d)).
(d) Notwithstanding the amounts set forth above to be paid to each class member, the parties have agreed to a maximum payout for each class, the amount of which was derived from their joint estimate that claims are unlikely to exceed approximately 28% of the class members (and, based on past experience, will likely be meaningfully lower than that). Accordingly, the amounts to be paid Class Members (not including class representatives) will be adjusted if the amount to be awarded eligible Class Members in either the Post-Release or Group Strip Search who make claims exceeds the total amount to be paid to that Class. In that event, the amount that members of that class receive will be adjusted on a pro-rated basis, which would result in payment to individual Class Members of amounts lower than those set forth above. The total amount paid to Post-Release Class Members is capped at $2,335,830.00 and, if claims exceed that, they will be adjusted on a prorated basis so that the total payment to such Post-Release Class Members (first and second time combined) will not exceed that total. The amount paid to Group Strip Search Class Members is capped at $2,016,000.00 and, if claims exceed that, they will be adjusted on a pro-rated basis so that the total payment to such Group Strip Search Class Members will not exceed that total.
(e) The Claims Administrator shall deduct from any claim payment amounts owed by a claim participant for liens or court orders for restitution, child support, debts owed to the County of Kern or any statutory liens, not to exceed 50% of the amount to which the class member would otherwise be entitled. By filing a Claim Form, the class member agrees to allow the Claims Administrator access to his or her records regarding child support or potential statutory liens.
(f) Class administration costs.
(g) $2,000,000 in attorneys‟ fees, plus class counsel costs not to exceed $65,000.
(h) $30,000 damages award to each Named Plaintiff, of whom there are three. This Court has approved that settlement in a separate order. See Final Order of Approval and Settlement, dated August 31, 2011.
Plaintiffs filed a motion for attorneys‟ fees seeking $2,000,000 (28% of the class fund) in fees plus class counsel costs of $$44,393.60. For the reasons stated below, the Court awards Plaintiffs‟ counsel $2,000,000 as attorneys‟ fees, plus $$44,393.60 in costs.
II.ANALYSIS OF THE FACTORS IN DETERMINING AN APPROPRIATE ATTORNEYS' FEE AWARD.
It is well settled in the Ninth Circuit that, "[i]n a common fund case, the district court has discretion to apply either the lodestar method or the percentage-of-the-fund method in calculating a fee award." Fischel v. Equitable Life Assurance Soc'y of the U.S., 307 F.3d 997, 1006 (9th Cir.2002); see also, e.g., Paul, Johnson, Alston & Hunt v. Graulty, 886 F.2d 268, 272 (9th Cir. 1989); In re Washington Public Power Supply System Securities Litigation, 19 F.3d 1291, 1295 (9th Cir. 1994)). While the court has discretion to use either method, "the primary basis of the fee award remains the percentage method." Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1050 (9th Cir. 2002). See also Six Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1311 (9th Cir.1990) ("benchmark percentage [of 25% of the fund] should be adjusted, or replaced by a lodestar calculation, when special circumstances indicate that the percentage recovery would be either too small or too large in light of the hours devoted to the case or other relevant factors"); In Re Rite Aid Corp. Securities Litigation, 396 F.3d 294, 307 (3d Cir. 2005)) ("the lodestar cross-check does not trump the primary reliance on the percentage of common fund method").
Many courts and commentators have recognized that the percentage of the available fund analysis is the preferred approach in class action fee requests because it more closely aligns the interests of the counsel and the class, i.e., class counsel directly benefit from increasing the size of the class fund and working in the most efficient manner. See, e.g., Swedish Hosp. Corp. v. Shalala, 1 F.3d 1261, 1266-67 & fn.3, 1269-71 (D.C.Cir.1993) (noting that the lodestar approach "encourages significant elements of inefficiency", by giving attorneys an "incentive to spend as many hours as possible" and "a strong incentive against early settlement"; the percentage approach "more accurately reflects the economics of litigation practice", and "the monetary amount of the victory is often the true measure of success, and therefore it is most efficient that it influence the fee award"; accordingly, "we join the Third Circuit Task Force and the Eleventh Circuit, among others, in concluding that a percentage-of-the-fund method is the appropriate mechanism for determining the attorney fees award in common fund cases"); Camden I Condominium Ass'n v. Dunkle, 946 F.2d 768, 774 (11th Cir.1991) (holding in a reversionary common fund case "that the percentage of the fund approach is the better reasoned in a common fund case. Henceforth in this circuit, attorneys' fees awarded from a common fund shall be based upon a reasonable percentage of the fund established for the benefit of the class."); Silber and Goodrich, Common Funds and Common Problems: Fee Objections and Class Counsel's Response, 17 RevLitig 525, 534 (1998) (the percentage approach avoids numerous drawbacks of the lodestar approach and is preferable because "the attorneys will receive the best fee when the attorneys obtain the best recovery for the class. Hence, under the percentage approach, the class members and the class counsel have the same interest -- maximizing the recovery of the class.").
Among the drawbacks to the lodestar method listed by Silber & Goodrich are that the lodestar method increases the amount of fee litigation; the lodestar method lacks objectivity; the lodestar method can result in churning, padding of hours, and inefficient use of resources; when the lodestar method is used, class counsel may be less willing to take an early settlement since settlement reduces the amount of time available for the attorneys to record hours; and the lodestar method inadequately responds to the problem of risk. Id. at pp. 529-532. See also Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1050 n.5 (9th Cir. 2002) ("it is widely recognized that the lodestar method creates incentives for counsel to expend more hours than may be necessary on litigating a case so as to recover a reasonable fee"); Mashburn v. National Healthcare, Inc., 684 F.Supp. 679, 689-91 (M.D.Ala.1988) (cataloguing criticisms of the lodestar approach to fee calculation); Manual for Complex Litigation 4th Ed. §14.121 (2004) ("in practice, the lodestar method is difficult to apply, time consuming to administer, inconsistent in result, .capable of manipulation, .[and] creates inherent incentive to prolong the litigation").
Silber and Goodrich advocate that class fund fees should not diminish on a percentage basis, as some courts have done, because that undermines the full alignment between class counsel and the class. This is because, if the percentage of fees go down as the size of the fund goes up, a substantial increase in the size of the fund may be only marginally beneficial to the class counsel while it may be extremely beneficial to the class, with the result being that the economic interests of the class and counsel become misaligned. They also reviewed two studies of fee awards in common fund cases. One study was the FJC Report discussed above. The other study, done by National Economic Research Associates, an economics consulting firm, in 1994, found that attorneys' fees in these class actions averaged approximately 32% of the recovery, regardless of the case size, and averaged 34.74% when the fees and expenses were added together. Silber and Goodrich, supra, at 545-546. Silber and Goodrich conclude with the observation that a 33% fee award is both reasonable, and in line with the general market for contingent fee work. Id. at 546-549.
Although not mandated by the Ninth Circuit, courts often consider the following factors when determining the benchmark percentage to be applied: (1) the result obtained for the class; (2) the effort expended by counsel; (3) counsel's experience; (4) counsel's skill; (5) the complexity of the issues; (6) the risks of non-payment assumed by counsel;
(7) the reaction of the class; and (8) comparison with counsel's lodestar. See, e.g., In re Heritage Bond Litigation, 2005 WL 1594403, *18 (C.D. Cal. 2005); In re Quintus Sec. Litig., 148 F.Supp.2d 967, 973-74 (N.D. Cal. 2001).
A.THE COMPLEXITY OF THE ISSUES AND THE RISK OF NON-PAYMENT
Congress recognized the complexity of civil rights cases when the civil rights attorneys‟ fee statute (42 U.S.C. §1988) was passed in 1976. The legislative history states, "It is intended that the amount of fees awarded under S. 2278 (42 U.S.C. §1988) be governed by the same standards which prevail in other types of equally complex federal litigation, such as antitrust cases and not be reduced because the rights involved may be non-pecuniary in nature." S.Rep.No. 94-1011, 1976 U.S.Code Cong. & Admin.News at 5913.
1.The Legal Issues Are Complex And Unsettled.
The issues involved in this case involve complex issues of constitutional law in an area where considerable deference is given to jail officials. See Way v. County of Ventura, 445 F.3d 1157, 1161 (9th Cir. 2006) ("We recognize the difficulty of operating a detention facility safely, the seriousness of the risk of smuggled weapons and contraband, and the deference we owe jail officials' exercise of judgment in adopting and executing policies necessary to maintain ...