Beryl v. Navient Corporation

District Court, N.D. California·Decided July 13, 2023·No. 3:20-cv-05920·Unknown

Opinion

San Francisco Division LOUIS BERYL, Case No. 20-cv-05920-LB

Plaintiff, ORDER GRANTING ATTORNEY’S FEES AND COSTS v. Re: ECF No. 114 NAVIENT CORPORATION, et al., Defendants. Defendant Navient Corporation acquired Plaintiff Louis Beryl’s online student-lending company called Earnest, Inc. for $155 million and hired Mr. Beryl and his team to run a new Navient entity called Earnest LLC. After several months, Navient fired Mr. Beryl, who sued for breach of his employment contract and benefits under an executive-severance plan. A jury found for Mr. Beryl on his contract and estoppel claims and awarded him damages: a $400,000 severance, a $400,000 bonus, $1 million in Restricted Stock Units, and $1.3 million in Performance Cash Units (reduced by the court to $350,000).1 The court awarded him $920,666.33 for benefits due under the ERISA executive-severance plan and waiting-time penalties under California Labor § 203.2 1 Verdict – ECF No. 88 at 1–2; Order – ECF No. 128. Citations refer to the Electronic Case File (ECF); pinpoint citations are to the ECF-generated page numbers at the top of documents. Mr. Beryl is entitled to fees and costs under ERISA and the Labor Code. Navient does not challenge his entitlement to fees, but it contends that his hourly rate is too high, he billed too many hours, he should not get a multiplier, and the court’s reduction of the jury’s award means that the prejudgment interest must be recalculated. The court generally awards the hourly rate, the hours billed, the costs, and a 1.2 multiplier. The plaintiff seeks fees based on the following rates and hours: Attorney Hours Rate Total Jonathan Sack 317.05 $1,200 $380,460 Daniel Muller 532.4 $ 600 $319,440 Queenie Paniagua 127.5 $ 600 $ 76,500

Total 976.95 $776,400

5% Reduction ($ 38,820)

Total Requested Lodestar $737,580 He asks for a multiplier of 1.6 to account for contingency risk, which brings the fee amount to $1,180,128. He seeks prejudgment interest of $1,649,991.54, and costs of $32,581.25.3 Of the hourly rates, Navient challenges only Mr. Sack’s. Mr. Sack is based in New York, has practiced for thirty-four years, has extensive experience in cases like the one here, and represented Mr. Beryl on a one-third contingency basis. The rates for all lawyers are the rates that they charge their clients and that the clients pay. That said, about ten percent of Mr. Sack’s work is billed hourly: most of his practice is on a contingency basis. (Mr. Muller, based in San Jose, charges eighty percent of his work to clients.)4

3 Mot. – ECF No. 114 at 8, 14. The plaintiff submitted two declarations to support the hourly rates.5 Gregory O’Hara, a partner with Nixon Peabody LLP in San Francisco, has spent his thirty-five- year career in the San Francisco Bay area and has tried, arbitrated, and resolved hundreds of cases. He is familiar with hourly rates in the community, knows that litigators with ten years’ or more experience routinely charge and are paid $600 an hour, and knows that senior attorneys with extensive trial experience charge more than $1,200 an hour. Attorneys in his firm charge similar rates, and the clients pay the rates.6 Rodney Sorensen has been in private practice for twenty-five years in the San Francisco Bay area, including as a partner in the employment-law department of DLA Piper, the managing partner of the Silicon Valley office of Payne & Fears, and the principal of Sorensen Law Group, P.C. He is familiar with hourly rates in the community, knows that litigators with ten years’ or more experience routinely charge and are paid $600 an hour, and knows that senior attorneys with extensive trial experience charge more than $1,200 an hour.7 The attorneys also submitted their billing records and itemized costs.8 And Mr. Muller submitted a supplemental declaration attesting to his need to personally review the documents in the case (3,400 produced by Navient and 5,000 produced by Mr. Beryl).9 As the prevailing party in this case, the plaintiff asserts entitlement to fees and costs under ERISA and the California Labor Code.10 29 U.S.C. § 1132(g)(1) (“the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party”); Cal. Lab. Code § 218.5 (“[i]n any action brought for the nonpayment of wages, . . . the court shall award reasonable 5 The motion references a third declaration by Brian Timmons, but the court does not see it on the docket. 6 O’Hara Decl. – ECF No. 114-14 at 2 (¶¶ 2–4). 7 Sorensen Decl. – ECF No. 114-15 at 2 (¶¶ 2–4). 8 Muller Decl. & Exs.— ECF Nos. 114-1–114-10; Sack Decl. & Exs. – ECF Nos. 114-11–114-13. 9 Muller Decl. – ECF No. 120-1 at 3 (¶ 4). attorney’s fees and costs to the prevailing party if any party to the action requests attorney’s fees and costs upon the initiation of the action”). The defendant does not challenge entitlement to fees and costs but contends that (1) the court should deny the fees motion because counsel did not confer to resolve the fees dispute, as required by N.D. Cal. Civ. L.R. 54-5(b), (2) the fees are not reasonable because Mr. Sack’s $1,200 hourly rate is too high and should be $800, the time sheets show block billing and inflated hours that should be reduced by thirty percent, and a multiplier is not warranted for this straightforward case, (3) travel, lodging, and electronic-research costs should be disallowed, and (4) the prejudgment interest is too high based on the court’s reducing the Performance Cash Units from $1.3 million to $350,000.11 The court does not find procedural default under the local rules, awards the hourly rates and the hours billed, applies a 1.2 multiplier, awards the costs, directs the parties to recalculate prejudgment interest within seven days, and directs the parties to submit a proposed form of order within seven days reflecting these amounts. 1. Procedural Default Under the Local Rules Under the local rules, “[c]ounsel for the respective parties must meet and confer for the purpose of resolving all disputed issues relating to attorney’s fees before making a motion for award of attorney’s fees.” N.D. Cal. Civ. L.R. 54-5(a). Then, the party filing the motion must submit a declaration that contains a “statement that counsel have met and conferred for the purpose of attempting to resolve any disputes with respect to the motion or a statement that no conference was held, with certification that the applying attorney made a good faith effort to arrange such a conference, setting forth the reason the conference was not held.” N.D. Cal. Civ. L.R. 54-5(b)(1). Some courts have denied fees request for failure to comply with this requirement. See, e.g., Gomez v. Braby, No. 22-cv-00036-PJH, 2022 WL 1655679, at *2 (N.D. Cal. Oct. 31, 2022); Hernandez v. Caliber Bodyworks LLC, No. 21-cv-05836-EMC, 2022 WL 2132914, at *4 (N.D. Cal. June 14, 2022). Both were ADA cases, and both denied defense counsel’s motions for fees. In Gomez, the court relied on the procedural defect but still addressed the appropriateness of fee shifting in a civil-rights case and denied fees on that ground too. 2022 WL 1655679, at *2. In Hernandez, the court did not deny fees on the ground of procedural default under the local rules because counsel apologized and tried to comply after she filed the fees motion. 2022 WL 2132914, at *4. Like the Gomez court, the Hernandez court denied the prevailing defendant fees. Id. at *5. ADA cases pose a different context: courts are reluctant to award prevailing defendants fees in civil-rights cases. In any event, like the attorney in Hernandez, counsel here tried to confer after he read the defendant’s opposition.12 That solves the problem sufficiently. Also, in civil-rights cases, it is not typical for prevailing defendants to

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