Monday, December 26, 2016

What's a Reasonable Rate?

569 E. Cnty. Blvd LLC v. Backcountry Against the Dump, No. D068538 (D4d1 as modified Dec. 29, 2016)

This is on rehearing of from this prior opinion.

The lawsuit is a quintessential SLAPP. Developer sued Activist group for gettin’ up in its business and “interfering” with its prospective economic advantage. See Briggs v. Eden Council for Hope & Opportunity, 19 Cal. 4th 1106, 1125 (1999) (“The paradigm SLAPP is a suit filed by a large land developer against environmental activists or a neighborhood association intended to chill the defendants continued political or legal opposition to the developers plans. The favored causes of action in SLAPP suits are defamation, various business torts such as interference with prospective economic advantage, nuisance and intentional infliction of emotional distress. (quotes and alterations omitted)) The trial court got that and struck the claim. This appeal is only about how much fees Activist’s lawyers get.

Activist asked for $153k, but the court awarded only $28k. Activist asked for 170 hours of partner work, at $750/hr. and another 40 hours of midlevel associate work at $350/hr. Plus 87 hours on the fee app. The trial court dropped the blended rate to $275, finding that to be the reasonable market rate in San Diego, and the hours to 103.6, because the lawyer block billed and appeared to have wasted a lot of time. Activist appealed.

The Court of Appeal starts with the background rules. A successful movant can get the fees in litigating the motion, plus the fees on the fee app, but not other fees incurred in defending the case. The fees are calculated by the lodestar (hours times reasonable rate) method, they need to be reasonable, and the moving defendant bears the burden of showing that they are. A trial court’s determinations on these issues are entitled to deference, and its ruling is reviewed for abuse of discretion.

So really the appeal comes down to rate and hours. Both parties put in experts on the fees. Activist’s expert supported the $750/$350 rates, while Developer’s suggested $450 or $500/$200. Given the conflict in evidence, and particularly given that an experienced lawyer representing another defendant (who is not in this appeal) was charging $275, the trial court didn’t err in finding Activist’s counsel
’s rate excessive and that a $275 blended rate was reasonable.*

As far as the hours go, the trial court was also within its discretion to cut them back to about 100 total. Many of the hours billed had no apparent relationship to the anti-SLAPP motion. Plus there was a bunch of block billing and many of the entries were very vague. On top of that, it looks like counsel misapprehended the issues and made the whole thing much more complicated than it really needed to be. 


* Maybe I’ve spent too much time in biglaw, but it seems like the primary focus of the trial court’s rate analysis shouldn’t have been “could Defendant have found someone to competently do this work for $275/hour?” The fact that a client retains a particular counsel who might have higher hourly rates than cheapest or even the average-priced attorney who could be found to do an adequate job does not mean that a higher rate is unreasonable. Reasonableness shouldn
t require a reverse auction. 

In particular, the question of “has this client actually paid this rate for non-fee-shifted work” should come into the equation somewhere. That, after all, is evidence (maybe the best evidence) of the markets assessment of whether the rate is reasonable. If the answer is “yes,” something more than the availability of competent cheaper lawyers in that particular market should be needed to show that the rate is not reasonable.

No comments:

Post a Comment