Ellis v. Toshiba America Information Systems., Inc.

218 Cal. App. 4th 853, 160 Cal. Rptr. 3d 557
CourtCalifornia Court of Appeal
DecidedAugust 7, 2013
DocketB220286; B227078
StatusPublished
Cited by74 cases

This text of 218 Cal. App. 4th 853 (Ellis v. Toshiba America Information Systems., Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ellis v. Toshiba America Information Systems., Inc., 218 Cal. App. 4th 853, 160 Cal. Rptr. 3d 557 (Cal. Ct. App. 2013).

Opinion

Opinion

JOHNSON, J.

Lori J. Sklar represented plaintiffs in a class action against Toshiba America Information Systems, Inc. (Toshiba). Sklar appeals from the *856 trial court’s orders awarding monetary sanctions against her and the court’s order awarding her no attorney fees. Toshiba cross-appeals the order awarding staff fees to Sklar Law Offices. We affirm the order awarding monetary sanctions against Sklar, and affirm in part and reverse in part the order regarding attorney fees.

SUMMARY

In February 2005, Caddell & Chapman, a Texas law firm with experience litigating class actions, and Sklar, a sole practitioner and a member of the California Bar doing business as Sklar Law Offices (SLO) out of her home office in Minnesota, 1 filed a class action against Toshiba, 2 on behalf of a class of purchasers of a Toshiba laptop computer which had an electrostatic discharge problem with the top cover. After a two-day mediation, in November 2005 Sklar and all other counsel signed a settlement term sheet, giving each class member a 12-month repair warranty extension (or, if the class member already had the extended warranty, a $35 credit voucher), and either $25 in cash or a $50 voucher for the repair to replace the defective top cover. Conflicts ensued between counsel regarding the drafting of a settlement agreement. Sklar later objected to the settlement, including an objection to the inclusion of the amount of her fees in the class notice, and the proposed settlement initially was submitted to the court without her signature in May 2006.

After further negotiations, Sklar filed a motion for preliminary approval of the settlement in August 2006. In an attached declaration, Sklar stated that she would seek legal fees of more than $24.7 million (represented as 25 percent of a settlement value placed at $98,975,862), 3 to be apportioned between Sklar and Caddell & Chapman, plus expenses of $99,750. Toshiba filed a declaration by counsel stating that it had agreed not to oppose the application by Caddell & Chapman for $1,125,000 in fees, but Toshiba intended to take discovery into the basis of Sklar’s “exorbitant” fee request, and would seek the production of documents and the depositions of Sklar and others, including Sklar’s expert.

The trial court granted preliminary approval of the settlement in October 2006. The class notice, disseminated in October and November 2006, stated: “Sklar Law Offices will ask the Court for attorneys’ fees in the amount of *857 $24,743,965.50, less whatever the Court awards Caddell & Chapman for its attorneys’ fees. Sklar Law Offices will ask for litigation expenses in the amount of $114,900. Toshiba will oppose these requests.” In May 2007, the court granted final approval and entered judgment.

In January 2008 the trial court awarded Caddell & Chapman $1.05 million in attorney fees and $75,000 in costs, for a total of $1,125,000. Sklar’s initial fee petition, filed later in January 2008, requested fees of either $7,847,362.50 under a lodestar/multipher approach, or $24,743,965.50 as a percentage of the settlement value, and $410,383.53 in expenses (this time for Sklar alone). Sklar’s subsequent fee application in October 2009 requested fees of $12,079,534.69, plus expenses for SLO of $905,752.72.

As promised, Toshiba opposed Sklar’s fee request, and protracted litigation and many discovery disputes followed Sklar’s initial fee estimate in 2006. On August 31, 2009, the trial court granted Toshiba’s motion for monetary sanctions against Sklar in the amount of $165,000 for fees and costs Toshiba incurred related to Sklar’s failure to comply with court discovery orders and her failure to meet and confer in good faith. Sklar appealed, and the sanctions order is the subject of appeal No. B220286.

On June 30, 2010, the trial court issued a 27-page ruling awarding SLO $176,900 in fees (for work during the merits phase of the class action by the staff of SLO), and awarding nothing for Sklar’s work; subtracting the $165,000 sanctions award, the net award to SLO was $11,900. Sklar appealed the order denying attorney fees, Toshiba cross-appealed from the award of fees for work by SLO staff, and the fee award is the subject of appeal No. B227078.

We consolidated the two appeals. For the reasons detailed below, we affirm the order awarding monetary sanctions against Sklar, and affirm in part and reverse in part the order regarding attorney fees.

BACKGROUND

I. Sklar disobeyed the court order to allow forensic computer inspections, and the trial court imposed monetary sanctions.

We describe in some detail the arduous procedural history of Toshiba’s attempt to obtain discovery of electronically stored information regarding Sklar’s request for attorney fees.

*858 A. Toshiba sought Sklar’s electronic billing records.

After the preliminary approval of the settlement in October 2006, Toshiba began to seek discovery, including document production and Sklar’s deposition, related to Sklar’s August 2006 statement that she would make a fee request of over $24 million. Among other items, Toshiba sought an electronic, searchable copy of time records Sklar had produced in hard copy. Toshiba characterized those records as showing that Sklar worked on the class action “nearly all day (sometimes as much as 16.75 hours), every day, seven days a week, including holidays, for some 22 months.” Toshiba served subpoenas in October 2006 and January 2007, each of which sought computer data and files related to time billed by Sklar or SLO in the class action. In response, Sklar produced a compact disc (CD) containing Portable Document Format (PDF) copies of the time records, which on appeal she characterizes as “redacted to protect attorney-client and work product privileges.” Toshiba continued to request a searchable electronic copy of Sklar’s time records.

The trial court held a hearing on January 26, 2007, on Sklar’s objections to Toshiba’s discovery requests, asking Sklar’s counsel and Sklar: “[D]o you really think that I’m going to allow this to proceed and give Ms. Sklar the benefit of $24 million in fees without having her be deposed, without having her produce any documents?” Given that Sklar’s fee request included time records showing she worked “up to 16-hour days seven days a week for a number of weeks,” the court stated that Sklar would have to produce time records which were not redacted. Sklar’s counsel argued that the records were complete; counsel for Toshiba rejoined that Sklar had represented that the time records were redacted, and Toshiba was unable to tell what had been excised. The court responded: “I’m not going to take your [(Sklar’s)] word for it, I must tell you. . . . [N]ot with this kind of a request. The amount of money you want is staggering, and I think it has to be . . . scrutinized . . .

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Cite This Page — Counsel Stack

Bluebook (online)
218 Cal. App. 4th 853, 160 Cal. Rptr. 3d 557, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ellis-v-toshiba-america-information-systems-inc-calctapp-2013.