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Walsh v. Kindred Healthcare

United States District Court, Ninth Circuit

December 16, 2013

HAZEL WALSH, et al., Plaintiffs,
v.
KINDRED HEALTHCARE, et al., Defendants.

ORDER GRANTING MOTION FOR FEES, COSTS AND INCENTIVE AWARDS (Docket No. 134.)

JEFFREY S. WHITE, District Judge.

INTRODUCTION

This matter comes before the Court for consideration of the motion for attorneys' fees, costs, and incentive awards filed by Plaintiffs. (Docket No. 134.) The Court has considered the parties' papers, the supplemental declarations submitted, relevant legal authority, and the record in this case. The Court also held a final fairness hearing on December 6, 2013.

For the reasons set forth in the remainder of this Order, the Court HEREBY GRANTS the motion. The Court has set forth the facts underlying this dispute in prior orders, and shall not repeat them here.

ANALYSIS

On August 23, 2013, the Court granted Plaintiffs' motion for preliminary approval of this class action settlement, and it appointed Robert J. Nelson, Robert S. Arns, Michael D. Thamer, Kathryn A. Stebner, Christopher J. Healey, and W. Timothy Needham, and their respective law firms, to serve as Settlement Class Counsel. ( See Docket No. 132, Preliminary Approval Order at 5:24-27.) Settlement Class Counsel move the Court for an award of $2, 489, 337.54 in attorneys' fees, $110, 662.46 in costs, and incentive awards in the amount of $3, 500.00 for each of the Class Representatives.

A. Objections.

The Court received one objection to the request for attorneys fees from Maureen Keating, who argues, inter alia, that the attorneys expended an excessive number of hours addressing the issues related to Plaintiffs' alter-ego theory, and that they have already been compensated for their efforts in similar cases. Ms. Keating urges the Court to award Settlement Class Counsel twenty-five percent of the claims made. ( See Docket No. 140.) With respect to the latter argument, the Ninth Circuit has held that it is an abuse of discretion for a court to award fees based on the value of claims made, rather than on the lodestar or a percentage of the entire fund made available to a class. See Williams v. MGM-Pathe Communications, 129 F.3d 1026, 1026-27 (9th Cir. 1997). Therefore, the Court overrules this objection. For the reasons set forth in the remainder of this Order, the Court overrules Ms. Keating's remaining objections to the amount of fees that Settlement Class Counsel seeks.

B. The Court Concludes the Fees Requested Are Reasonable.

Defendants removed this case under the Class Action Fairness Act. In a diversity case, the Court applies state law to determine an award of attorneys' fees, unless state law runs counter to a federal statute. See Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002); MRO Communications, Inc. v. American Tel. & Tel. Co., 197 F.3d 1276, 1281 (9th Cir. 1999). Because there is no conflict, the Court applies California law.

Under California law, "[t]he primary method for establishing the amount of reasonable attorney fees is the lodestar method." In re Vitamin Cases, 110 Cal.App.4th 1041, 1053 (2003) (internal quotation marks and citations omitted). California courts have held that, "in cases in which the value of the class recovery can be monetized with a reasonable degree of certainty and it is not otherwise inappropriate, a trial court has discretion to adjust the basic lodestar through the application of a positive or negative multiplier where necessary to ensure that the fee awarded is within the range of fees freely negotiated in the legal marketplace in comparable litigation." Lealao v. Beneficial California, Inc., 82 Cal.App.4th 19, 49-50 (2000). A percentage-of-the-benefit analysis "provides a credible measure of the market value of the legal services, " and therefore, may be used to cross-check the propriety of the lodestar fee award. Id. at 49; cf. In re Blue Tooth Headset Products Liability Litig., 654 F.3d 935, 942 (9th Cir. 2011). (where "the settlement produces a common fund for the benefit of the entire class, courts have discretion to employ either the lodestar method or the percentage-of-recovery method").

1. Lodestar.

The Court applies the lodestar method by multiplying a reasonable hourly rate by the number of hours reasonably spent litigating the case. See Ferland v. Conrad Credit Corp., 244 F.3d 1145, 1149 (9th Cir. 2001); Lealao, 82 Cal.App.4th at 26 ("The lodestar (or touchstone) is produced by multiplying the number of hours reasonably expended by counsel by a reasonable hourly rate."). "Once the court has fixed the lodestar, it may increase or decrease that amount by applying a positive or negative multiplier' to take into account a variety of other factors, including the quality of the representation, the novelty and complexity of the issues, the results obtained, and the contingent risk presented." Lealao, 82 Cal.App.4th at 26.; see also id. at 40 n.8 (citing Serrano v. Priest, 20 Cal.3d 25, 49 (1977)). In this case, Settlement Class Counsel seek fees that are less than their base lodestar, thus they apply a negative multiplier.

Settlement Class Counsel attest that, in total, they have expended 5, 728 hours for an unadjusted lodestar of $2, 566, 947.90.[1] As a starting point, the Court examines whether Settlement Class Counsel's hourly rates are reasonable within the "relevant community, " i.e. the Northern District of California. Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008). Plaintiffs bear the burden to "produce satisfactory evidence - in addition to the attorney's own affidavits - that the requested rates are in line with those ...


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