United States District Court, N.D. California
ORDER GRANTING MOTION FOR ATTORNEYS' FEES RE:
DKT. NO. 224
PHYLLIS J. HAMILTON UNITED STATES DISTRICT JUDGE
Cadence Design Systems, Inc.'s (“Cadence”)
motion for attorneys' fees came on for hearing before
this court on June 19, 2019. Plaintiff appeared through its
counsel, Guy Ruttenberg and Michael Eshaghian. Defendants
Pounce Consulting, Inc. (“Pounce USA”) and Pounce
Consulting, S.A. de C.V. (“Pounce Mexico, ”
together with Pounce USA, the “Pounce
defendants”), both of which are in default, did not
appear. Having read the papers filed by plaintiff and
carefully considered the arguments therein and the relevant
legal authority, and good cause appearing, the court hereby
GRANTS plaintiff's motion, for the following reasons.
court declines to recite this action's tortured
procedural history. The court finds it enough to note that
throughout this action's nearly two-year history, the
Pounce defendants' on-and-off again participation has
delayed resolution of this action and hindered
plaintiff's ability to obtain necessary discovery.
Eventually, after both defendants failed to retain substitute
counsel, the court entered default against the Pounce
defendants. On April 22, 2019, the court granted
plaintiff's motions for default judgment against the both
defendants and entered final judgment three days later on
April 25, 2019.
relevant here, that judgment awarded plaintiff $6, 983,
178.29 against the Pounce defendants for breach of contract,
copyright infringement, and circumvention of copyright
protections. Dkt. 221 at 2-3. In addition, the judgment
awarded plaintiff “attorneys' fees and costs . . .
based on section 28 of the Software License Agreement[,
]” which was the contract that defendants had breached.
Id. at 3. The judgment directed plaintiff to file a
motion for attorneys' fees within 14 days. That motion is
presently before the court.
California, “the prevailing party in an action is
entitled to recover its costs, ” including
“[a]ttorney fees, when authorized by” (1)
“[c]ontract, ” (2) “[s]tatute, ” or
(3) “[l]aw.” Royster Constr. Co. v. Urban W.
Cmtys., 40 Cal.App.4th 1158, 1169 (1995). Here, the
Software Licensing Agreement expressly authorizes the award
of attorneys' fees and costs. Thus, because the basis for
the attorneys' fee award is a state law breach of
contract claim, “this court must apply California law
on attorneys' fees.” Suretec Ins. Co. v. BRC
Constr., Inc., 2013 WL 6199021, at *2 (E.D. Cal. Nov.
27, 2013) (citing Vizcaino v. Microsoft Corp., 290
F.3d 1043, 1047 (9th Cir. 2002)).
Civil Code § 1717 “governs the issue of
attorneys' fees under a contract, ” Makreas v.
First Nat'l Bank of N. California, 2014 WL 2582027,
at *5 (N.D. Cal. June 9, 2014), and provides for the
provision of “reasonable attorney[s'] fees”
when due under a contract, Cal. Civ. Code § 1717(a).
That “fee setting inquiry in California ordinarily
begins with the ‘lodestar,' i.e., the number of
hours reasonably expended multiplied by the reasonable hourly
rate.” PLCM Grp. V. Drexler, 22 Cal.4th 1084,
as of May 9, 2019, plaintiff's counsel's total
lodestar equaled $748, 334.50. Having reviewed
plaintiff's counsel's billing records and billing
rates, the court finds that both the total number of hours
plaintiff's counsel expended on this litigation and
plaintiff's counsel's hourly rates are reasonable. In
addition, the court finds that because plaintiff's
contract claim and other claims are “inextricably
intertwined, ” apportioning plaintiff's
counsel's time between the claims is
“impracticable, if not impossible” and therefore
unnecessary. Abdallah v. United Savings Bank, 43
Cal.App.4th 1101, 1111 (1996) (“[A]ttorney[s'] fees
need not be apportioned when incurred for representation on
an issue common to both a cause of action in which fees are
proper and one in which they are not allowed.”).
determining the lodestar, the trial court may adjust the
lodestar figure based on factors including, but not limited
to[:] (1) the novelty and difficulty of the questions
involved, (2) the skill displayed in presenting them, (3)
success or failure, (4) the extent to which the nature of the
litigation precluded other employment by the attorneys, (5)
the contingent nature of the fee award . . . .”
Glaviano v. Sacramento City Unified Sch. Dist., 22
Cal.App. 5th 744, 751 (Ct. App. 2018).
the court finds that a significant upward multiplier is
warranted based on the above factors as well as case-specific
factors. “The purpose of such adjustment is to fix a
fee at the fair market value for the particular action. In
effect, the court [must] determine[ ], retrospectively,
whether the litigation involved a contingent risk or required
extraordinary legal skill[.]” Nishiki v. Danko
Meredith, APC, 25 Cal.App. 5th 883, 897 (Ct. App. 2018).
“Of these factors, one of the most common fee enhancers
is for contingency risk.” Id. The court finds
that factor particularly relevant here.
plaintiff's counsel has litigated this action on a
contingency basis. “A lawyer who both bears the risk of
not being paid and provides legal services is not receiving
the fair market value of his work if he is paid only for the
second of those functions.” Id. at 898. As
relevant here, the plaintiff and its counsel's
representation agreement provided that plaintiff's
counsel would be awarded 30% of plaintiff's recovery plus
$2, 500. Dkt. 224-2 ¶¶ 15, 17. Under that fee
arrangement, plaintiff would be entitled to an award of $2,
097, 453.49. Id. That figure shows that
plaintiff's lodestar significantly undercompensates
plaintiff's counsel for the risk it took on by
representing plaintiff on a contingency basis. See
Glendora Cmty. Redevelopment Agency v. Demeter, 155
Cal.App.3d 465, 480 (Ct. App. 1984) (affirming fee award that
matched contingency fee amount after trial court determined
it was reasonable after weighing reasonableness factors).
and relatedly, plaintiffs counsel faces a significant
continued risk that it will not recover any fees. The Pounce
defendants have abandoned this litigation and have apparently
refused to voluntarily pay any amount due pursuant to the
judgment against them. Such conduct has resulted in
plaintiffs counsel expending a significant number of hours in
post-judgment litigation. See, e.g., Dkt. 229
(motion to amend judgment); Dkt. 238 (motion to for
assignment order and for order restraining judgment debtor).
In all respects, it appears that plaintiff and its counsel
have a long road ahead to recover any money due under the
judgment. Thus, plaintiffs counsel faces the continued risk
of never collecting any fees despite successfully litigating
into account those risks and the difference between the
contractual contingency fee amount and the lodestar amount,
and taking into account all the other attorneys' fees
factors, the court finds that an award of $2, 097, 453.49 is
reasonable. Because that amount matches the amount plaintiffs
counsel could have received under its agreement with
plaintiff, any additional attorneys' fees-e.g., for
post-judgment litigation-would give ...