Stephen Stetson v. West Publishing Corporation

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS OCT 30 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT

STEPHEN STETSON, individual and all No. 16-56313
others similarly situated; SHANE
LAVIGNE, individual and all others D.C. No.
similarly situated; CHRISTINE LEIGH 2:08-cv-00810-RGK-E
BROWN-ROBERTS, individual and all
others similarly situated; VALENTIN YURI
KARPENKO, individual and all others MEMORANDUM *
similarly situated; JAKE JEREMIAH
FATHY, individual and all others similarly
situated,

Plaintiffs - Appellants,

v.

WEST PUBLISHING CORPORATION, a
Minnesota Corporation, dba BAR/BRI;
KAPLAN, INC.,

Defendants - Appellees,

and

SETH BRYANT GRISSOM; JAMES
RALPH GARRISON, III; DUSTIN
KENNEMER; NATHAN HUNT; JOHN
KELLEY; JOHN AMARI,

Objectors - Appellees.

*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
 Appeal from the United States District Court
for the Central District of California
R. Gary Klausner, District Judge, Presiding

Submitted October 25, 2017**
Pasadena, California

Before: REINHARDT, PAEZ, and M. SMITH, Circuit Judges.

Plaintiffs-Appellants appeal from an award of attorney’s fees and costs

issued on remand after a previous appeal. We have jurisdiction pursuant to 28

U.S.C. § 1291, and we affirm in part, vacate in part, and remand.

1. In a common-fund case such as this one, the district court has discretion

to apply either the lodestar or the percentage-of-the-fund method in calculating a

fee award. Stetson v. Grissom, 821 F.3d 1157, 1165 (9th Cir. 2016). In our

previous opinion, we held that the district court acted within its discretion in using

the lodestar method. Id. Our remand instructions directed the district court to

“clearly provide reasons for the factors in its lodestar computation.” Id. at 1167.

Therefore, the district court did not err in once again employing the lodestar

method to determine a new fee award on remand.

2. “Attorneys in common fund cases must be compensated for any delay in

payment.” Fischel v. Equitable Life Assurance Soc’y, 307 F.3d 997, 1010 (9th Cir.

**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).

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2002). “The lodestar should be computed either using an hourly rate that reflects

the prevailing rate as of the date of the fee request, to compensate class counsel for

delays in payment inherent in contingency-fee cases, or using historical rates and

compensating for delays with a prime-rate enhancement.” Grissom, 821 F.3d at

1166. On remand, Appellants submitted supplemental briefing on these two delay

compensation methods as well as a declaration with updated hourly and prime

rates as of June 22, 2016. However, the district court’s fee award omitted any

mention of delay compensation methods or updated 2016 hourly rates and instead

cited a 2013 filing for class counsel’s claimed rates. The district court erred by

failing to update the lodestar calculation to compensate for the delayed payment.

3. The district court based its decision to deny a risk multiplier solely on its

conclusion that class counsel’s hourly rates already reflected the risks of this

action. See id. (quoting Stanger v. China Elec. Motor, Inc., 812 F.3d 734, 741 (9th

Cir. 2016)). Because its determination of the hourly rates was in error, that

determination cannot support the denial of a risk multiplier. Furthermore, the

district court based its assessment of the hourly rates on counsel’s 2013 rates and

the 2015 Real Rate Report, a publication that is not in the record. The district

court’s decision reveals nothing of the report’s methodology. Use of the Real Rate

Report may, however, be appropriate if supported by findings that the report

reflects contemporaneous rates. On remand, the district court should consider anew

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whether to apply a risk factor using class counsel’s updated hourly rate. “We

emphasize that regardless of whether or not the district court ultimately finds that

this case requires application of a risk multiplier, it must fully and adequately

explain the basis for its decision.” Stanger, 812 F.3d at 741.

4. A district court “has discretion to adjust the lodestar upward or downward

using a multiplier that reflects a host of ‘reasonableness’ factors,” known as the

Kerr factors. Grissom, 821 F.3d at 1166–67 (internal quotation marks omitted)

(quoting In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 941–42 (9th

Cir. 2011)). “[T]he Kerr factors only warrant a departure from the lodestar figure

in ‘rare and exceptional cases.’” In re Bluetooth Headset Prods. Liab. Litig., 654

F.3d at 942 n.7 (quoting Fischer v. SJB-P.D., Inc., 214 F.3d 1115, 1119 n. 4 (9th

Cir. 2000)). Appellants have not shown that the district court abused its discretion

in determining that this was not a rare and exceptional case.

5. The district court denied costs for expert fees because the amount

requested for two experts was not justified and the time records submitted by

Appellants did not reveal which fees were attributed to which expert. Appellants

rely on a declaration that reveals nothing more specific about the contributions of

these two experts to the litigation than that Appellants engaged in “extensive

communications” with them and “consulted with [them] regarding both the range

of possible damages and the various ways in which settlement might be achieved.”

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This is a vague foundation upon which to rest an entitlement to $29,000 in costs.

We review a denial of costs for abuse of discretion, see Escriba v. Foster Poultry

Farms, Inc., 743 F.3d 1236, 1247–48 (9th Cir. 2014), and Appellants have not

shown that the district court abused its discretion in denying costs for these expert

fees.

We therefore vacate the award of fees and remand for the district court to

update the lodestar figure with a delay compensation method and to reconsider

whether or not to apply a risk multiplier. We affirm the award of costs. Each party

shall bear its own costs on appeal.

AFFIRMED IN PART, VACATED IN PART, REMANDED.

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