Cardoso v. FCA US LLC

• Court: District Court, N.D. California
• Decided: March 29, 2021
• Docket: 3:20-cv-02250
• Status: Unknown

Opinion

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8 9 LUIZ CARDOSO, et al., Case No. 20-cv-02250-JSC

10 Plaintiffs, ORDER RE: PLAINTIFFS’ MOTION 11 v. FOR ATTORNEYS’ FEES AND COSTS

12 FCA US LLC, Re: Dkt. No. 28 Defendant. 13

14 15 Plaintiffs filed this lemon law action under California’s Song-Beverly Consumer Warranty 16 Act regarding issues with their 2016 Dodge Ram 1500 vehicle. Following mediation, the parties 17 reached a settlement of Plaintiffs’ legal claims and Plaintiffs filed the now pending motion for 18 attorneys’ fees and costs.1 (Dkt. No. 28.) After carefully considering the parties’ briefs and the 19 relevant legal authority, the Court concludes that oral argument is unnecessary, see Civ. L.R. 7- 20 1(b), VACATES the April 1, 2021 hearing, and GRANTS IN PART and DENIES IN PART 21 Plaintiffs’ motion for attorneys’ fees and costs. 22 BACKGROUND 23 On June 24, 2016, Plaintiffs Luiz Cardoso and Select Pavers purchased a new 2016 Dodge 24 Ram 1500 manufactured and/or distributed by FCA US, LLC for a total price of $68,177.12. 25 (Dkt. No. 3-1, Complaint at ¶¶ 2, 5.2) On October 31, 2019, Plaintiffs reported to the dealer that 26 1 All parties have consented to the jurisdiction of a magistrate judge pursuant to 28 U.S.C. § 27 636(c). (Dkt. Nos. 9, 10.) 1 the vehicle emits a strong coolant smell in the air cabin and overheats. (Id. at ¶ 6.) The vehicle 2 remained at the dealer, unrepaired, until January 3, 2020. (Id.) Plaintiffs “informed FCA that the 3 Vehicle was sitting unrepaired due to defects covered under FCA’s warranties. FCA declined to 4 repurchase the Vehicle. FCA also declined to provide Plaintiff with a rental vehicle.” (Id. at ¶ 7.) 5 The dealer advised Plaintiffs that the vehicle could not be repaired and FCA sent Plaintiffs a notice 6 advising Plaintiffs that “the defect to his Vehicle is a known problem and can cause a fire.” (Id. at 7 ¶¶ 8, 9.) Plaintiffs retook possession of the vehicle on January 3, 2020 and Mr. Cardoso towed it 8 to his home where it remained “unuseable due to the strong smell, overheating, and fire defects.” 9 (Id. at ¶ 10.) 10 Plaintiffs filed this action in the Alameda County Superior Court on February 14, 2020. 11 (Dkt. No. 3-1.) Plaintiffs allege that Defendant violated the Song-Beverly Act, California Civil 12 Code § 1790 et seq., because “[i]n accordance with FCA’s warranty, Plaintiffs delivered the 13 Vehicle to a FCA authorized repair facility in this state to perform warranty repairs. Plaintiffs did 14 so within a reasonable time, Plaintiff notified FCA authorized repair facility of the characteristics 15 of the defects. However, FCA representative failed to repair the Vehicle, breaching the terms of 16 the written warranty.” (Id. at ¶ 15.) Defendant thereafter removed the action to this Court based 17 on diversity jurisdiction. (Dkt. No. 1.) 18 At the Initial Case Management Conference, the parties were referred to private ADR to be 19 completed by October 30, 2020. (Dkt. No. 18.) On November 12, 2020, the parties appeared at a 20 Further Case Management Conference and reported that the case had settled, but that Plaintiffs 21 had not yet received the settlement amount nor had the vehicle been towed. (Dkt. No. 23.) The 22 Court held two Further Case Management Conferences on November 19 and December 21, 2020. 23 (Dkt. Nos. 25, 27.) At the latter, Plaintiffs confirmed that the settlement had been finalized and 24 the Court set a deadline for Plaintiffs to file the underlying motion for attorneys’ fees and costs. 25 (Dkt. No. 27.) 26 The motion for attorneys’ fees and costs is now fully briefed. (Dkt. Nos. 28, 32, 34.) 27 Along with its opposition brief, Defendant filed 24 boilerplate evidentiary objections to several 1 attorneys’ fees and costs (Dkt. No. 29) based on lack of personal knowledge, hearsay, and 2 relevance. (Dkt. No. 32-1.) For the most part, the objected-to evidence is not material to the 3 Court’s decision and it is thus unnecessary to resolve Defendant’s objections. However, to the 4 extent that Defendant objects to the paragraphs of Mr. Klinzke’s Declaration describing the 5 qualifications of the attorneys who worked on this action, Defendants objections are not well- 6 taken and are overruled. “Affidavits of the plaintiffs’ attorney and other attorneys regarding 7 prevailing fees in the community, and rate determinations in other cases, particularly those setting 8 a rate for the plaintiffs’ attorney, are satisfactory evidence of the prevailing market rate.” United 9 Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990); see also Widrig v. 10 Apfel, 140 F.3d 1207, 1209-10 (9th Cir. 1998) (declarations by attorneys regarding the prevailing 11 market rate in the community may be enough to establish a reasonable rate in the market). 12 DISCUSSION 13 State law governs attorneys’ fees in diversity cases such as this. Riordan v. State Farm 14 Mut. Auto. Ins. Co., 589 F.3d 999, 1004 (9th Cir. 2009) (“In a diversity case, the law of the state in 15 which the district court sits determines whether a party is entitled to attorney fees, and the 16 procedure for requesting an award of attorney fees is governed by federal law”). Under California 17 law, buyers who prevail in an action under the Song-Beverly Act are entitled to “the aggregate 18 amount of costs and expenses, including attorney’s fees based on actual time expended, 19 determined by the court to have been reasonably incurred by the buyer in connection with the 20 commencement and prosecution of such action.” Cal. Civ. Code section 1794(d). A party is a 21 prevailing party if the court, guided by equitable principles, decides that the party has achieved its 22 “main litigation objective.” Graciano v. Robinson Ford Sales, Inc., 144 Cal.App.4th 140, 150–51 23 (2006); see also Wohlgemuth v. Caterpillar Inc., 207 Cal. App. 4th 1252, 1262 (2012) (holding 24 that “consumers who successfully achieve the goals of their litigation through a compromise 25 agreement” may recover attorneys’ fees and costs as prevailing parties under the Song-Beverly 26 Act). 27 Courts calculate attorneys’ fees under § 1794(d) using the “lodestar adjustment method.” 1 lodestar figure consists of “the number of hours reasonably expended multiplied by the reasonable 2 hourly rate.” PLCM Grp. v. Drexler, 22 Cal. 4th 1084, 1095 (2000). A reasonable hourly rate is 3 defined as “that prevailing in the community for similar work.” Id. As to the computation of 4 hours, “trial courts must carefully review attorney documentation of hours expended.” Ketchum v. 5 Moses, 24 Cal. 4th 1122, 1132 (2001). 6 The parties do not dispute that Plaintiffs, as the prevailing party in this action, are entitled 7 to recoup reasonable attorneys’ fees, costs, and expenses under the Song-Beverly Act. (Dkt. No. 8 29-3, Settlement Agreement at § 5.) See also Cal. Civ. Code § 1794(d). Instead, the question is 9 whether Plaintiffs’ request for $42,727.45 in attorneys’ fees and costs is reasonable. Defendant 10 insists that it is not because Plaintiffs’ counsels’ hourly rates and hours billed are excessive, and 11 Plaintiffs are not entitled to the 1.3 multiplier sought. 12 A. Lodestar Calculation 13 1) Reasonable Hourly Rate 14 To determine whether counsel’s hourly rates are reasonable, the Court looks to the “hourly 15 amount to which attorneys of like skill in the area would typically be entitled.” Ketchum, 24 Cal. 16 4th at 1133. “The fee applicant has the burden of producing satisfactory evidence, in addition to 17 the affidavits of its counsel, that the requested rates are in line with those prevailing in the 18 community for similar services of lawyers of reasonably comparable skill and reputation.” Jordan 19 v. Multnomah Cty., 815 F.2d 1258, 1263 (9th Cir. 1987). In addition, Civil Local Rule 54-5(b)(3) 20 requires the party seeking fees to submit “[a] brief description of relevant qualifications and 21 experience and a statement of the customary hourly charges of each such person or of comparable 22 prevailing hourly rates or other indication of value of the services.” 23 Here, the bulk of the hours billed were by associate Michael Klinzke who billed 90.6 hours 24 at $340/hour. (Dkt. No. 29-1.) Two partners, Gregory Babbitt and Christoper Barry, billed .8 at 25 $545/hour and .2 hours at $624/hour, respectively. Senior Law Clerk Lilia Guizar billed .1 hours 26 at $150/hour. Mr. Klinzke, a 2014 law graduate, joined Rosner, Barry & Babbitt, LLP as an 27 associate in 2015. (Dkt. No. 29 at ¶¶ 35-36.) Mr. Babbitt is a 1998 law graduate who joined the 1 Barry & Babbitt, LLP. (Id. at ¶ 43.) Plaintiff contends that judges and arbitrators have 2 consistently upheld Rosner, Barry & Babbitt, LLP’s hourly rates in auto fraud and lemon law 3 cases. In his declaration, Mr. Klinzke identifies over 30 cases approving the firm’s hourly rates. 4 (Id. at ¶ 32.3) Although Plaintiff did not attached these decisions or include publication citations, 5 Mr. Klinzke attests that the firm’s attorney fee rate was found reasonable in these cases and 6 specifically identifies decisions from 2020 approving the rates of the attorneys here: Mr. Klinzke, 7 Mr. Babbitt, and Mr. Barry. (Id.) 8 In addition, Plaintiffs attach the United States Consumer Attorney Fee Survey Report for 9 2017-2018. (Dkt. No. 29-24.) “A number of courts, including courts in this District, have also 10 found that the United States Consumer Law Attorney Fee Survey Report may be used as evidence 11 of prevailing rates.” Bratton v. FCA US LLC, No. 17-CV-01458-JCS, 2018 WL 5270581, at *4 12 (N.D. Cal. Oct. 22, 2018) (collecting cases). The median rate for California consumer lawyers who 13 handle vehicle cases is $450/hour. (Dkt. No. 29-24 at 63.) In addition, the Metropolitan area 14 tables for San Francisco contained in the Survey Report reflect an average hourly rate for 15 consumer attorneys in San Francisco with 6-10 years experiences such as Mr. Klinzke is 16 $450/hour. (Id. at 65.) The average for attorneys with 26-30 years of experience such as Mr. 17 Babbitt and Mr. Barry is $638/hour. (Id.) 18 Plaintiffs have thus met their burden of demonstrating that the hourly rates of Mr. Klinzke 19 of $340/hour, Mr. Babbitt of $545/hour, and Mr. Barry of $624/hour are reasonable. The Court 20 also finds that Ms. Guizar’s hourly billing rate of $150/hour is reasonable. See In re Magsafe 21 Apple Power Adapter Litig., No. 5:09-CV-01911-EJD, 2015 WL 428105, at *12 (N.D. Cal. Jan. 22

23 3 To the extent that Defendant objects to this paragraph of Mr. Klinzke’s declaration as having “no evidentiary value,” as hearsay, and as an “improper attempt to have the Court consider 24 unpublished matters” its objections are overruled. As another court noted when rejecting the same FCA objections as frivolous: “It is well established that decisions by other courts addressing 25 prevailing rates may be considered to determine the reasonableness of rates requested on a fee motion.” Bratton v. FCA US LLC, No. 17-CV-01458-JCS, 2018 WL 5270581, at *5 (N.D. Cal. 26 Oct. 22, 2018). As the Bratton court noted, “to the extent other courts have declined to award the rates Plaintiffs seek, FCA was entitled to offer rebuttal evidence – including cases it contends 27 support lower rates.” Id. (citing Sorenson v. Mink, 239 F.3d 1140, 1145 (9th Cir. 2001) (“The 1 30, 2015) (“In the Bay Area, reasonable hourly rates for partners range from $560 to $800, for 2 associates from $285 to $510, and for paralegals and litigation support staff from $150 to $240.”) 3 (collecting cases). 4 2) Hours Reasonably Expended 5 An attorneys’ fee award should include compensation for all hours reasonably expended 6 prosecuting the matter, but “hours that are excessive, redundant, or otherwise unnecessary” should 7 be excluded. Costa v. Comm'r of Soc. Sec. Admin., 690 F.3d 1132, 1135 (9th Cir. 2012). “[T]he 8 standard is whether a reasonable attorney would have believed the work to be reasonably 9 expended in pursuit of success at the point in time when the work was performed.” Moore v. Jas. 10 H. Matthews & Co., 682 F.2d 830, 839 (9th Cir. 1982). Here, Plaintiffs’ counsel billed 91.7 hours 11 over the course of the slightly more than one year that this action has been pending. (Dkt. No. 29- 12 1.) 13 Defendant raises three objections to Plaintiffs’ billing records. First, Defendant insists that 14 the Court should reduce counsels’ hours for time spent reviewing and preparing emails with his 15 client, FCA, defense counsel, and the mediator. Defendant contends that the generic descriptions 16 of the emails make it “impossible to tell why the email was reviewed or generated based on this 17 non-descript explanation.” (Dkt. No. 32 at 9-10.) Second, Defendant objects to several entries 18 which are incomplete; the entries state, for example, “Send e-mail to” but the recipient is blank. 19 Finally, Defendant contends that Plaintiffs’ request for $4,556.00 for 13.4 hours to prepare this 20 motion for attorneys’ fees and costs is excessive. 21 First, with respect to the emails, the Court has reviewed the billing records and concludes 22 that the percentage of time characterized as reviewing or sending an email is excessive. (Dkt. No. 23 29-1.) The percentage of the time billed for either “reviewing emails from client” or “e-mail 24 client” is 20 percent of the total time billed. The Court further notes that while these are generally 25 billed at .1 of an hour, the majority of the days which include an entry for such emails include 26 three entries for a total of .3 of an hour. Many days include more. For example, the April 16, 2020 27 time entries are as follows: 1 4/16/2020 eal Se 340 o1 |s 34.00] 2 4/16/2020 ara [Review e-mail from client 340 | o1 | so 4 anior20x0 | Michael A Jena client ao | or [s 3400) 4 anie/20.0 | Michael A Review e-mail from client 340 : s 34.00| 4/16/2020 aera Review e-mail from client 340 | o1 [S$ 34.00

6 7 (Dkt. No. 29-1 at 5.) There is a similar pattern with respect to emails with defense counsel. For 8 example, on June 25, 2020, counsel billed 1.3 hours for emails back and forth with defense 9 counsel in 13 separate entries. (Ud. at 8-9.) On September 4, 2020, counsel billed .4 hours for 10 || emailing back and forth with defense counsel in 4 separate entries. (Dkt. No. 29-1 at 13; see also 11 id. at 14 (September 18, 2020 entries) (same)).) On September 21, counsel billed .8 in 8 separate 12 entries. Ud. at 14; see also id. at 19 (December 1, 2020 entries (same).) On November 13, 2020, 5 13 counsel billed 1.1 (in 11 separate entries) for back and forth emails with defense counsel. (/d. at 14 16-17.) 15 Collectively, over 40 percent of the time billed in this action was for back and forth emails 16 with defense counsel, FCA, or Plaintiff, and none of these entries include information regarding 3 17 the substance of the email exchange. The Supreme Court held in Hensley that counsel is not S 18 || required to record in great detail how each minute of time is expended but should at least identify 19 the general subject matter of his time expenditures. Hensley v. Eckerhart, 461 U.S. 424, 437 20 (1983). “Work entries are inadequately vague when the district court is unable to discern how the 21 time spent is attributable to the case at hand.” Center for Food Safety v. Vilsack, No. C-08—00484 22 JSW, 2011 WL 6259891, at *8 (N.D. Cal. Oct. 13, 2011). Likewise, excessive billing for non- 23 substantive email exchanges is improper. See, e.g., Uriarte-Limon v. Leyva, 2017 WL 5665016, at 24 *4 (C.D. Cal. June 30, 2017) (reducing fee award based in part on “excessive hours devoted to 25 non-substantive email exchanges); Whitaker v. Beverly Falafel, Inc., 2020 WL 6494193, at *4 26 || (C.D. Cal. Sept. 15, 2020) (“Counsel routinely billed its client for non-substantive emails 27 || involving deadlines and information about new trial dates. The Court finds these entries are 28 unreasonable and strikes them.”); Kries v. City of San Diego, No. 17-CV-1464-GPC-BGS, 2021

1 WL 120830, at *9 (S.D. Cal. Jan. 13, 2021) (“Although attorneys owe a duty to their clients to 2 effectively communicate and the Court does not doubt that Mr. Conger’s communication practices 3 were appreciated by his clients, the Court’s mandate is to determine whether the hours were 4 reasonably expended, not whether the time spent was in line with each attorney’s regular 5 practice.”). Accordingly, the Court makes an across-the-board 10 percent deduction to account for 6 counsels’ excessive billing for vague email exchanges. Moreno v. City of Sacramento, 534 F.3d 7 1106, 1112 (9th Cir. 2008) (“the district court can impose a small reduction, no greater than 10 8 percent—a ‘haircut’—based on its exercise of discretion and without a more specific 9 explanation.”). 10 Second, as for the incomplete billing entries, Plaintiffs billed for three emails and one letter 11 where the entry is incomplete and does not indicate the recipient of the communication (and as 12 noted above, includes no description of the nature of the email). (Dkt. No. 29-1 at 6 (4/30/20 13 entry), 15 (10/16/20 entry), 19 (12/14/20 entry), 20 (12/21/20 entry).) On reply, Plaintiffs 14 produced the emails and argue that Defendant could have figured out who they were to because 15 they were sent to FCA directly. (Dkt. No. 34 at 6-7.) Plaintiffs insist that it was not “impossible” 16 for Defendant to tell who the emails were to “it just required a very slight amount of effort to 17 determine the origin or destination of these documents.” (Id. at 6:28-7:10.) But it is Plaintiffs’ 18 burden—not Defendant’s—to put forward evidence in support of their request for fees. See 19 Hensley, 461 U.S. at 437 (as the moving party, Plaintiff “bears the burden of documenting the 20 appropriate hours expended in the litigation and must submit evidence in support of those hours 21 worked.”). And the motion is made to the Court—not Defendant—and the Court has no way to 22 know who the email was to. Accordingly, the Court strikes Plaintiffs’ request for fees for 23 incomplete time entries. This results in a deduction of $136. 24 Finally, Plaintiffs seek $4,556 for 13.4 hours of work preparing the underlying motion. 25 (Dkt. No. 29-1 at 20.) Generally, fees related to the preparation and defense of a motion for 26 attorneys’ fees are recoverable. Ketchum v. Moses, 24 Cal. 4th 1122, 1141 (2001). Accordingly, 27 while this amount is a bit more than the Court would expect for a motion such a this, the Court 1 used by counsel—and Defendant has made no such showing here. See Pollard v. FCA US LLC, 2 No. 817CV00591JLSJCG, 2020 WL 57270, at *5 (C.D. Cal. Jan. 3, 2020), appeal dismissed, No. 3 20-55128, 2020 WL 2204270 (9th Cir. Mar. 25, 2020) (finding that 14.5 hours spent on a motion 4 for attorney's fees under the Song-Beverly Act was unreasonable given that it was substantially 5 identical to an earlier motion). 6 *** 7 Based on the hours and rates discussed above, and taking into account the $3,274 in 8 deductions, Plaintiffs’ lodestar amount, without a multiplier, is $28,206. 9 B. Whether a Multiplier is Warranted 10 Each side asks the Court to adjust the lodestar amount: Defendant insists that the Court 11 should apply a negative multiplier and Plaintiffs maintain that a positive multiplier of 1.3 is 12 appropriate. The Court concludes that neither is warranted. 13 This case did not involve particularly novel or complex issues; however, counsel obtained 14 an excellent result for Plaintiffs. As such, a negative multiplier is not appropriate. On the other 15 hand, an enhancement is unnecessary. Plaintiffs emphasize the risk associated with counsel 16 representing them on a fully contingent basis, as well as Defendant’s delay in resolving the action 17 which further delayed their compensation. However, attorneys’ fees are guaranteed to prevailing 18 parties under the Song-Beverly Act and based on Plaintiffs’ description of the facts, they had a 19 strong case, making the risk that counsel would receive nothing relatively small. See Weeks v. 20 Baker & McKenzie, 63 Cal. App. 4th 1128, 1175 (1998) (noting that a fee enhancement may not 21 be appropriate when a statutory guarantee eliminates any uncertainty about whether costs will be 22 awarded to the prevailing party.). As to the delay, the rates the Court has awarded are sufficient to 23 compensate counsel for the cost of any delay in receiving their attorney fees. Therefore, the Court 24 awards the lodestar amount without a multiplier, negative or positive, which it finds to be a 25 reasonable amount in light of all the circumstances. 26 C. Costs 27 Plaintiffs seek $1,933.45 is litigation costs and expenses. This amount is based on (1) 1 (4) fees for messenger services related to court filings ($138.90); and (5) mediation fees ($1,275).* 2 (Dkt. No. 29-2.) Defendant does not challenge these costs, which the Court finds are reasonable. 3 || See Cal. Civ. Code section 1794(d) (providing that a prevailing party is entitled to “costs and 4 || expenses ... determined by the court to have been reasonably incurred by the buyer in connection 5 || with the commencement and prosecution of [the] action”); Jensen v. BMW of N. Am., Inc., 35 Cal. 6 || App. 4th 112, 137 (1995), as modified on denial of reh’g (June 22, 1995) (holding that by 7 including “expenses” in the Song Beverly Act’s cost provision, the Legislature intended that the 8 || provision would not be limited to the costs that are available under Cal. Code Civ. Proc. Section 9 1033.5, which defines the items that are generally available to prevailing parties). Accordingly, the 10 || Court awards $1,928.45 in litigation costs and expenses. 11 CONCLUSION 12 For the reasons stated above, the Court GRANTS IN PART and DENIES IN PART 13 || Plaintiffs’ motion for attorneys’ fees and costs. The Court awards a total of $30,134.45. 14 This Order disposes of Docket No. 28. 3 15 IT IS SO ORDERED. a 16 Dated: March 29, 2021

Jeux Soto JACQUELINE SCOTT CORL 19 United States Magistrate Judge 20 21 22 23 24 25 26 27 Plaintiffs’ bill of costs also includes $5 in $1 increments for things that do not apply here such as 9g || “docket fees under 28 U.S.C. 1923” and “compensation of court-appointed experts.” (Dkt. No. 29-2 at 4.) The Court deducts these amounts from the total.