In Caldera v. Department of Corrections and Rehabilitation, the California Court of Appeal was asked to determine the proper amount of attorneys’ fees that should be awarded to a disabled employee who won a $500,000 verdict at trial.
The employee, Augustine Caldera, complained that his supervisors regularly harassed and mocked him because of his stutter. The employee could not find a local lawyer in San Bernardino County to take his case, but he was able to find a lawyer in Los Angeles County. That lawyer took the case, traveled to San Bernardino, and ultimately prevailed after a 13-day jury trial and two subsequent successful appeals.
Plaintiff’s Counsel Requests $2,468,365 in Attorneys’ Fees
As the prevailing party on a disability discrimination claim, Mr. Caldera was entitled to his attorneys’ fees as well. His lawyer requested fees totaling $2,468,365, which represented (a) 1610.7 hours at $750/hour and 40.30 hours at $650/hour, the “lodestar” amount of $1,234,182.50, plus (b) a “multiplier” of 2.0 as a reward for the lawyer taking a civil rights case with significant risk involved. At the hearing on the motion for attorneys’ fees, the trial court ruled that $450/hour to $550/hour were more reasonable rates for the San Bernardino area. The trial court also cut the number of attorney-hours. The lower hours, at the lower rates, yielded an attorneys’ fee award of “only” $810,067.60. Mr. Caldera then appealed.
Calculating the Lodestar: Courts Must Use the Lawyer’s “Home Market” Rates
The Court of Appeal rejected the trial court’s rationale. “When a plaintiff hires out-of-town counsel, a trial court must consider counsel’s ‘home market rate’ when setting the hourly rate, rather than the local market rate,” the Court ruled. This is especially true in cases like this one that involve claims for harassment or discrimination under California’s Fair Employment and Housing Act (“FEHA”), said the Court. That’s because the clear public policy of FEHA is to encourage lawyers to take these important civil rights cases.
Thus, the Court of Appeal rejected the trial court’s attorneys’ fee calculations based on the lower $550/hour rate for San Bernardino county. Instead, the Court of Appeal remanded the case back to the trial court with instructions to perform new calculations using the much higher average rates in Los Angeles County for lawyers with comparable skill and experience.
Calculating the Multiplier: The Ketchum Factors
In addition, the Court ruled that the trial court must also consider whether a a separate “multiplier” is warranted based on the factors elaborated by the California Supreme Court in Ketchum v. Moses, 24 Cal. 4th 1122 (2001):
- The extent to which taking the case precluded the lawyer from taking other work;
- The quality of the representation;
- The undesirability of the case given the risks involved; and
- The results obtained.
What This Means for California Employers
The bottom line: once this case gets back to the trial Court, we’ll likely see a multi-million dollar attorneys’ fee award to Mr. Caldera, possibly larger than the $2,468,365 originally requested. We’ll update this post once the trial court issues its revised calculation, applying the guidance and rationale expressed by the Court of Appeal here.
This is yet another example of how costly employment and HR mistakes are in California. You can read the Court’s opinion in Caldera v. Department of Corrections and Rehabilitation here.
