Unpublished Disposition, 927 F.2d 608 (9th Cir. 1991)

Nos. 89-16344, 89-16460.

United States Court of Appeals, Ninth Circuit.

On Appeal from the United States District Court for the Northern District of California, No. CV-85-8768-TEH; Thelton E. Henderson, District Judge, Presiding.

N.D. Cal.

AFFIRMED.

Before: TANG, SKOPIL, and THOMPSON, Circuit Judges

MEMORANDUM^* 

These are consolidated appeals challenging the district court's award of attorneys' fees to a prevailing plaintiff. Defendant contends that the fee award should be reduced because the district court erroneously (1) included fees for work on unsuccessful claims; (2) used a contingency risk multiplier; and (3) awarded excessive fees for the preparation of the fee petition. We conclude that the district court correctly applied the applicable standards in setting the fee awards and made the necessary findings to support its decision. Accordingly, we affirm.

* In 1985, Dorothy Bucci filed this diversity action against her employer, Chromalloy American Corporation, alleging violations of the California Fair Employment and Housing Act, Cal.Gov't.Code Sec. 12940 (1980), based on claims of sexual harassment and sex discrimination. Following a bench trial, the district court concluded that Bucci had proved "that a hostile environment was created by sexual harassment sufficiently severe and pervasive to alter the conditions of plaintiff's employment and create an abusive working environment." The court awarded Bucci $55,000 in compensatory damages.

Bucci applied for an award of attorneys' fees pursuant to Cal.Gov't.Code Sec. 12965(b). The district court concluded that fees should be awarded "according to the well-established lodestar/multiplier method adopted by both federal and state courts." The court calculated a lodestar of $131,379.50 and applied a contingent risk multiplier of 2.0 for a primary fee award of $262,759.00 In addition, the court awarded Bucci $23,128.00 to compensate her for expenses incurred in the litigation over attorneys' fees. The employer appeals both awards.

II

California law clearly authorizes the district court to make an award of "reasonable attorney fees" to the prevailing party in this case. Cal.Gov't.Code Sec. 12965(b). The employer raises a threshold question of whether state or federal law should govern the determination of a "reasonable fee." We conclude that there are no significant differences between state and federal law in this regard, and elect to apply federal law in determining the reasonableness of a fee award under section 12965(b). See Ackerman v. Western Elec. Co., 860 F.2d 1514, 1520 n. 5 (9th Cir. 1988) (noting there is no significant difference between state and federal law regarding fee awards made under section 12965(b)).

Under federal law, a court awarding attorneys' fees must first determine the lodestar by multiplying the number of hours reasonably spent on the litigation by a reasonable hourly rate. D'Emanuele v. Montgomery Ward & Co., 904 F.2d 1379, 1383 (9th Cir. 1990). The court may thereafter increase or decrease the lodestar based on factors identified in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975), cert. denied, 425 U.S. 951 (1976), that are not subsumed within the initial calculation of the lodestar. D'Emanuele, 904 F.2d at 1383. The employer here challenges both of these steps. We apply an abuse of discretion standard in reviewing the district court's fee award, including the use of a multiplier. Hall v. Bolger, 768 F.2d 1148, 1150 (9th Cir. 1985).

1. Determination of the Hours Reasonably Expended

The starting point for calculating the lodestar is the determination of the number of hours reasonably expended on the case. Hensley v. Eckerhart, 461 U.S. 424, 433-34 (1983). Here, Bucci initially sought compensation for 761 attorney hours and 471.3 law clerk hours. The district court reasoned that a reduction was appropriate in light of the lack of novelty or complexity of the case. Accordingly, the compensable time was reduced to 621 attorney hours and 401.3 law clerk hours.

The employer first contends that the district court erred by not making a further reduction to reflect Bucci's relatively small recovery. We must reject that contention. It is clear that fee awards in civil rights cases cannot be tied to the amount of the recovery. See City of Riverside v. Rivera, 477 U.S. 561, 581 (1986) (refusing to adopt a rule of proportionality of fees and recovery); Quesada v. Thomason, 850 F.2d 537, 540 (9th Cir. 1988) (district court should not reduce attorneys' fees simply because the damage award was less than amount sought).

The employer also argues that Bucci should not have been compensated for work performed on unsuccessful claims. We have stated that a reduction in the lodestar is justified when a plaintiff fails "to obtain relief on all claims, and if hours spent on unsuccessful claims were not needed to pursue successful claims." Id. at 539. The applicable test is whether plaintiff's unsuccessful claims were related to her successful claims. See Thorne v. City of El Segundo, 802 F.2d 1131, 1141 (9th Cir. 1986). The test is not precise, but generally, claims are related if they "involve 'a common core of facts' or will be based on related legal theories, ... while unrelated claims will be 'distinctly different,' and based on different facts and legal theories." Id. (quoting Hensley, 461 U.S. at 434 & 435).

Here, we agree with the district court that all of Bucci's claims were related and closely intertwined. The commonality of her claims was that she challenged a single course of conduct consisting of harassing and unequal treatment by her employer. Nevertheless, even when unsuccessful and successful claims are related, a court must also evaluate " 'the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation.' " Thorne, 802 F.2d at 1141 (quoting Hensley, 461 U.S. at 435). Full compensation is appropriate only when a plaintiff obtains excellent results; if only partial or limited success is obtained, full compensation may be excessive. Id.

We agree with the district court that Bucci's success was not limited. The court found that "plaintiff prevailed on the most significant claim in her complaint ... and received a $55,000 judgment in a sexual harassment case where there was no actual wage or benefit loss." The court further noted that "plaintiff's victory served an important public interest in that it re-affirmed the right to a work environment free of demeaning and discriminatory treatment based on sex." Such determinations "are within the district court's discretion." Id. We agree with the court's conclusion that Bucci's success was substantial in that she prevailed on the most significant claim in her complaint.

There is a strong presumption that the lodestar is reasonable and should be adjusted "only in rare or exceptional cases." Cunningham v. County of Los Angeles, 879 F.2d 481, 488 (9th Cir. 1988), cert. denied, 110 S. Ct. 757 (1990). One such "circumstance that may lead to an adjustment of the lodestar figure is whether payment for the attorney's services is contingent upon success and the attorney bears the risk of nonpayment in case of failure." D'Emanuele, 904 F.2d at 1384. There is no dispute here that payment to Bucci's attorney was contingent upon success and that the attorney risked nonpayment.

We have noted that the presence of a risky contingent fee arrangement permits enhancement of the lodestar if two conditions are met. Id. First, the fee applicant must establish that without an adjustment for risk, there would have been substantial difficulties in finding counsel in the relevant market. Id. Second, any enhancement must reflect the market treatment of contingent fee cases as a class rather than the riskiness of the particular case. Id. The district court, relying principally on our decision in Fadhl v. City and County of San Francisco, 859 F.2d 649, 650-51 (9th Cir. 1988), concluded that Bucci satisfied both conditions.

In Fadhl, the plaintiff "approached 35 lawyers before she found one who would represent her." Id. at 651. We found that fact to be "strong support for the proposition that in the absence of risk enhancement, [plaintiff] would have faced substantial difficulties in retaining an attorney." Id. In contrast, Bucci was able to secure counsel on her first inquiry. We nevertheless agree with the district court that Bucci satisfied the first condition of demonstrating substantial difficulty in obtaining counsel. She did so by submitting unopposed attorneys' affidavits detailing their reluctance to take on such cases without the potential of enhanced compensation. See McKenzie v. Kennickell, 875 F.2d 330, 337 (D.C. Cir. 1989) (plaintiffs should be required only to establish that they would have faced substantial difficulties securing counsel for their cases).

Bucci also satisfied the second requirement by submitting evidence to demonstrate the market treatment of similar cases. In fact, Bucci submitted the same evidence that we determined was sufficient to support a multiplier in Title VII litigation in the same relevant market. See Fadhl, 859 F.2d at 650-51.

Under both state and federal law, a court may award attorneys' fees to a prevailing party to compensate for the expense of preparing an application for fees. Serrano v. Unruh, 32 Cal. 3d 621, 623-24, 186 Cal. Rptr. 754, 754-55, 652 P.2d 985, 985-86 (1982); Clark v. City of Los Angeles, 803 F.2d 987, 992 (9th Cir. 1986). The district court here awarded a lodestar amount of $23,128.00, representing 110.8 hours of attorney time at varying rates and 18 hours of paralegal and secretarial time at varying rates. The employer's only argument is that Bucci unduly complicated the fee application process by submitting unnecessary authority in support of fees. Given the complexity of the law in this area, however, we reject the argument that the work on the fee application was either excessive or unnecessary.

AFFIRMED.