United States District Court, N.D. California, San Jose Division
ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR
ATTORNEYS' FEES; GRANTING MOTION FOR COSTS AND SERVICE
AWARDS RE: DKT. NO. 119
J. DAVILA UNITED STATES DISTRICT JUDGE.
court approved the parties' settlement of this consumer
class action suit. Presently before the court is
Plaintiffs' motion for attorneys' fees in the amount
of $2, 750, 000, costs in the amount of $83, 011.78 and $5,
000 service awards to each of the five class representatives.
Having considered the parties' briefing and conducted an
in camera review of the billing records, the court
will grant in part and deny in part Plaintiffs' motion
for attorneys' fees, and will grant Plaintiffs'
motion for costs and service awards.
consumers reported that their HP printers unexpectedly
stopped working on or around September 13, 2016.
Approximately a month later, Plaintiffs Richard San Miguel
and DeLores Lawty filed suit, alleging that HP had violated
California's Unfair Competition Law (“UCL”)
by executing a firmware update that disabled HP inkjet
printers that were fitted with certain replacement ink
cartridges manufactured by HP's competitors. Dkt. No. 1.
Plaintiffs alleged that the failed HP printers displayed a
false or misleading error message that the ink cartridges
were “damaged or missing, ” when in fact HP had
disabled the printers to induce purchases of its own
higher-priced cartridges. Id. ¶ 2.
Approximately a week after the lawsuit was filed, HP issued a
modified apology on its website to add an offer of a remedial
“patch” that HP claimed would restore printer
December of 2016, HP moved to dismiss the action, arguing
that it had no duty to keep its printers compatible with
third-party ink cartridges with infringing security chips,
and that it made no representation of that compatibility.
Dkt. No. 19. After a few cases were related and consolidated,
Plaintiffs filed a consolidated amended complaint adding
several more claims. Dkt. No. 60. HP renewed its motion to
dismiss (Dkt. No. 66) and the matter was taken under
submission. Dkt. No. 83.
the parties engaged in discovery. Plaintiffs learned that
HP's “Dynamic Security” technology caused the
printers to stop functioning, but that HP had “turned
off” the Dynamic Security technology in the Class
Printers as of December 2017. Dynamic Security is “an
HP-developed technology which causes Class Printers to run
authentication checks that change over time on installed ink
cartridges to determine whether the ink cartridges contain a
non-HP security chip, and that may prevent Class Printers
from operating with any such ink cartridges.” Dkt. No.
110-2, p. 6.
later moved for a hybrid Rule 23(b)(2)-(c)(4) certification
of (1) a subclass of California printer owners seeking
injunctive relief under the UCL, and (2) a national class of
consumers who experienced print interruptions for purposes of
adjudicating the liability elements of the Computer Fraud and
Abuse Act (“CFAA”) and trespass-to-chattels
claims, with individualized damages proceedings to follow.
Dkt. No. 91. Plaintiffs also sought and were granted leave to
file a consolidated amended complaint. Dkt. Nos. 92, 94. The
parties stipulated that the pending motion to dismiss would
apply to the consolidated amended complaint. Dkt. No. 92.
March of 2018, the court entered an order granting in part
and denying in part HP's motion to dismiss. Dkt. No. 97.
The court upheld Plaintiffs' computer intrusion claims
under the CFAA and the California Penal Code, the trespass
claims at common law (id. at 7-13), and the
statutory consumer fraud claims to the extent they were based
on HP's misleading error messages and material omissions
(id. at 16-17). The court dismissed Plaintiffs'
UCL unfairness and tortious interference claims and others
with leave to amend. Id. at 17-23. A few days later
the parties entered into settlement discussions and succeeded
in reaching a settlement in principle in mid-July of 2018.
Dkt. No. 106. In November of 2018, the court granted
Plaintiffs' motion for preliminary approval of the
proposed settlement (“Settlement”), and in April
of 2019, the court granted final approval of the settlement.
Dkt. Nos. 116, 139.
the Settlement, HP agreed to pay $1.5 million in compensation
to owners of certain HP inkjet printers. Dkt. No. 110-2
¶ 1.32. HP also agreed to pay for all notice and
administration costs required to effectuate the Settlement.
Id. ¶ 2.2. With respect to non-monetary relief,
HP agreed not to reactivate Dynamic Security on the printers
at issue. Id. ¶ 2.3. HP also agreed to
reimburse Plaintiffs' counsel for out-of-pocket
litigation costs that were “actually and reasonably
incurred.” Id. ¶ 6.1. The Settlement
further provided that Plaintiffs' counsel would apply to
the court for attorneys' fees and expenses to be paid by
Rule of Civil Procedure 23(h) permits the court to award
reasonable attorney's fees and costs in class action
settlements as authorized by law or by the parties'
agreement. Fed.R.Civ.P. 23(h). Here, the Settlement Agreement
provides that “HP shall not dispute that plaintiffs are
successful parties for purposes of California Code of Civil
Procedure section 1021.5.” Settlement Agreement ¶
6.1 (Dkt. No. 110-2).
California law, “absent circumstances rendering the
award unjust, an attorney fee award should ordinarily include
compensation for all the hours reasonably spent, including
those relating solely to the fee.” Ketchum v.
Moses, 24 Cal.4th 1122, 1133 (2001) (emphasis omitted).
Section 1021.5 authorizes fee shifting and provides that a
court may award attorney fees to a successful party when the
action has resulted in the enforcement of an important right
affecting the public interest. See Graham v.
DaimlerChrysler Corp., 34 Cal.4th 553, 560-61 (2004)
(awarding fees in nationwide class settlement under section
1021.5). In addition to section 1021.5, the CLRA-under which
Plaintiffs brought a claim-mandates fee-shifting to the
prevailing party. Cal. Civ. Code §1780(e).
well-accepted method of determining fees is the lodestar
method. Morales v. City of San Rafael, 96 F.3d 359,
363 (9th Cir. 1996). The lodestar is calculated by
multiplying the number of hours the prevailing party
reasonably expended on the litigation by a reasonable hourly
rate. Id. “The reasonableness of an hourly
rate should be determined based on the rates prevailing in
the community for ‘lawyers of reasonably comparable
skill, experience and reputation.'” Lewis v.
Silvertree Mohave Homeonwers' Ass'n, Inc., No.
16-3581 HWA, 2017 WL 5495816, at *3 (N.D. Cal. Nov. 16, 2017)
(quoting Blum v. Stenson, 465 U.S. 886, n.11
(1984)). The lodestar figure may then be increased or
decreased depending on a variety of factors, including the
quality of the representation, the benefit obtained for the
class, the complexity and novelty of the issues presented,
and the risk of nonpayment. Hanlon v. Chrysler
Corp., 150 F.3d 1011, 1029 (9th Cir.
1998). The Supreme Court “has instructed
district courts to . . . ‘award only that amount of
fees that is reasonable in relation to the results
obtained.'” Id. (quoting Hensley v.
Eckerhart, 461 U.S. 424, 436, 440 (1983)). ...