Summary
recommending a 35 % reduction in the costs to compensate for the limited degree of success
Summary of this case from Debord v. Mercy Health Sys. of Kan., Inc.Opinion
No. C-03-0603 SBA (EMC).
November 19, 2004
REPORT AND RECOMMENDATION RE PLAINTIFF'S AND DEFENDANT'S MOTIONS FOR ATTORNEY'S FEES (Docket Nos. 293, 296)
Plaintiff Mercedes Navarro and Defendant General Nutrition Corp. ("GNC") have each filed a motion for attorney's fees in the above-referenced case. Both motions have been referred to the undersigned for a report and recommendation. On October 27, 2004, the motions were heard by this Court. Having considered the parties' briefs and accompanying submissions as well as the argument of counsel, and good cause appearing therefor, the Court hereby recommends that Ms. Navarro's motion for attorney's fees be GRANTED and that GNC's motion for attorney's fees be DENIED.
I. FACTUAL BACKGROUND
In 2002, Ms. Navarro was injured at work by falling off a ladder. See Summ. J. Order at 2 (Docket No. 51). Ms. Navarro took workers' compensation leave and then used the remainder of her accumulated sick and vacation days to recuperate. See id. At the end of this period, Ms. Navarro notified her employer that she would need more time off but returned to work nonetheless. See id. Meanwhile, GNC's human resources department, in response to her request, determined that she was likely eligible for FMLA and CRFA leave. See id. However, this eligibility was conditioned on Ms. Navarro's providing the appropriate documentation (such as a doctor's note) for processing and verification. See id. at 2-3.
After returning to work, Ms. Navarro was scheduled to open one of GNC's stores. See id. at 3. However, after a visit to the emergency room the night prior to her opening shift, she failed to report to work. See id. Ms. Navarro allegedly did not provide sufficient documentation of her emergency room visit, which would have supposedly excused the absence. See id. Subsequently, she was terminated for failing to open the store. See id. at 3-4. Ms. Navarro then filed suit. See id. at 4.
In Ms. Navarro's complaint, she asserted several claims: (1) wrongful termination in violation of public policy; (2) violation of the Family Medical Leave Act of 1983 ("FMLA"); (3) violation of the California Family Rights Act ("CFRA"); (4) violation of California's Unfair Competition Statute ("UCL"), see Cal. Bus. Prof. Code §§ 17200, 17203; (5) violation of the California Fair Employment and Housing Act ("FEHA"); and (6) intentional infliction of emotional distress. GNC moved for summary judgment which Judge Armstrong granted in part and denied in part. See id. at 21. More specifically, Judge Armstrong dismissed the UCL and emotional distress claims, thus leaving for trial the following claims: (1) FMLA interference, (2) FMLA retaliation, (3) CRFA violation, (4) CRFA retaliation, (5) wrongful termination in violation of public policy, and (6) violation of FEHA. See id. Judge Armstrong did not rule on the FEHA claim at summary judgment. However, Ms. Navarro withdrew part of the claim ( i.e., race discrimination) prior to summary judgment; the remaining FEHA claim ( i.e., discrimination on the basis of medical condition) was withdrawn during trial. At the conclusion of the trial, the jury found in favor of Ms. Navarro on the FMLA interference claim but in favor of GNC on the remaining claims. See Verdict (Docket No. 261). The jury awarded $60,500 to Ms. Navarro for the FMLA interference claim. See id. Subsequently, Ms. Navarro and GNC both moved for attorney's fees.
II. PLAINTIFF'S MOTION FOR FEES
The Court shall address first Ms. Navarro's motion for fees. Ms. Navarro asks that she be awarded attorney's fees and expenses pursuant to the FMLA. Under the FMLA, "[t]he court . . . shall, in addition to any judgment awarded to the plaintiff, allow a reasonable attorney's fee, reasonable expert witness fees, and other costs of the action to be paid by the defendant." 29 U.S.C.A. § 2617(3). Notably, the FMLA uses the word "shall." Courts have interpreted this to mean that the attorney's fee provision in the FMLA is mandatory as opposed to discretionary. For example, in McDonnell v. Miller Oil Co., 134 F.3d 638 (4th Cir. 1998), the court stated that the "statutory language mandates an award of fees when the plaintiff receives a judgment in an action under the FMLA." Id. at 640; see also id. at 641 (also stating that, "even when an award of attorneys' fees is mandatory, the district court may decrease the amount of fees that might otherwise be awarded in order to account for the plaintiff's limited success"). Similarly, in Churchill v. Star Enterprises, No. CIV. A. 97-3527, 1998 WL 254080 (E.D. Penn. Apr. 17, 1998), the district court held that, "[u]nder the FMLA, an award . . . is mandatory if a plaintiff obtains a judgment in her favor." Id. at *1.
Although the attorney's fee provision in the FMLA is different from the attorney's fee provisions in other civil rights statutes ( e.g., Title VII) because the former is mandatory and not discretionary, courts have analyzed motions for attorney's fees under the FMLA in the same way as motions for attorney's fees under other civil rights statutes. See, e.g., id. at *2 n. 1 ("Although this is an FMLA action, we will apply the law for determining the award of fees under the Civil Rights Act."). That is, courts use the lodestar method to determine the reasonable market rates and hours billed and then, if necessary, make an upward or downward adjustment to that amount. See, e.g., id. at *2 (using the lodestar method to calculate attorney's fees in an FMLA action); see also McDonnell, 134 F.3d at 640 (using the lodestar method when determining fees for a plaintiff who received judgment on an FMLA claim); Shepherd v. Honda of America Mfg., Inc., 160 F. Supp. 2d 860, 874 (S.D. Ohio 2001) (using the lodestar to determine attorney's fees for a party prevailing on FMLA claim, with other unsuccessful claims).
A. Prevailing Party
Because Ms. Navarro was awarded a jury verdict on the FMLA claim, she is a prevailing party. See Farrar v. Hobby, 506 U.S. 103, 111 (1992) ("[T]o qualify as a prevailing party, a civil rights plaintiff must obtain at least some relief on the merits of his claim."). GNC does not seriously contend that Ms. Navarro is not the prevailing party. GNC instead stresses that she prevailed on only one of her many claims that she asserted in her complaint, and thus the amount of attorney's fees sought by Ms. Navarro is unreasonable.
B. Lodestar
The lodestar is determined by a reasonable hourly rate multiplied by the reasonable number of hours expended. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). Ms. Navarro "bears the burden" of proving the reasonableness of both the hourly rate and the number of hours expended. See id. at 437.
1. Reasonable Hourly Rate
a. Legal Standard
A reasonable hourly rate is "calculated according to the prevailing market rates in the relevant community." Blum v. Stenson, 465 U.S. 886, 895 (1984). "[T]he burden is on the fee applicant" to prove a reasonable market rate. Id. at 895 n. 11. To meet this burden, Ms. Navarro must submit "evidence . . . that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Id.
Next, GNC may provide specific evidence rebutting Ms. Navarro's claimed market rate. See Lucas v. White, 63 F. Supp. 2d 1046, 1057 (N.D. Cal. 1999) ("The party opposing the fee application has a burden of rebuttal that requires submission of evidence to the district court challenging the accuracy and reasonableness of the hours charged or the facts asserted by the prevailing party in its submitted affidavits."). Furthermore, "[c]onclusory and unsubstantiated objections are not sufficient to warrant a reduction in fees. See id. at 1058.
b. Current Hourly Rates
Ms. Navarro asks that her attorneys, including the lead attorney, Michael Hoffman, be compensated at their current hourly rates. For Mr. Hoffman, his rate went up from $300 to $325 in June 2003, only a few months after the complaint was filed in February 2003. Mr. Hoffman's current rate is appropriate because the majority of the hours Mr. Hoffman billed occurred after the rate went up. Furthermore, use of current rates compensates for delay in receiving the fee award. See 2 Martin A. Schwartz John E. Kirklin, Section 1983 Litigation § 5.17, at 300 (3d ed. 1997). GNC does not contest the use of Mr. Hoffman's current rate but does object to the reasonableness of his rate altogether.
c. Michael Hoffman
Ms. Navarro asserts that the reasonable hourly rate for Mr. Hoffman is $325. Ms. Navarro submitted a declaration from Mr. Hoffman, as well as declarations from two San Francisco area attorneys, in support of this rate.
Mr. Hoffman, of the Law Offices of R. Michael Hoffman, is the lead attorney of record for Ms. Navarro. See Hoffman Decl. ¶ 1. He received a J.D. degree from Golden Gate University School of Law in 1991 and was admitted to the California Bar in 1991. See id. ¶¶ 2-3. For the past ten years, Mr. Hoffman has spent the majority of his time "representing employees in discrimination and other employment litigation." Id. ¶ 5.
In support of Mr. Hoffman's hourly rate, Ms. Navarro submitted affidavits from two attorneys, Brad Seligman and Michael Rubin. Mr. Seligman believes Mr. Hoffman's rate of $325 to be "at or below the prevailing rates for attorneys of similar experience and length of practice in such cases in this area." Seligman Decl. ¶ 9. Similarly, Mr. Rubin agrees that Mr. Hoffman's rates are "comparable to the billing rates for other California attorneys with comparable experience." Rubin Decl. ¶¶ 4-5. Both declarants appear to be very experienced attorneys and familiar with market rates of attorneys in the Bay Area. However, the declarants' affidavits only provide that Mr. Hoffman's rate appears reasonable for attorneys in employment practice for a similar period of time. These declarations only really address the "experience" of Mr. Hoffman and not his "skill" or "reputation." As such, their opinions may not be dispositive. However, GNC does not provide much helpful evidence to rebut Mr. Hoffman's claimed rate.
GNC argues that Mr. Hoffman's rate should be $150 and not $325. See Opp'n at 17. In support of this argument, GNC offers only its attorney Kenneth Keller's declaration as evidence that Mr. Hoffman's rate should be lower than $325. GNC alleges that several acts of Mr. Hoffman's misconduct during the pendency of the case warrants a rate deduction. An argument could be made that Mr. Hoffman's alleged misconduct might indicate a lack of skill, which would be a basis for a reduction of his reasonable market rate. However, Mr. Keller's declaration is unsupported by probative evidence of this supposed misconduct and is thus unhelpful.
GNC also provides evidence of its own attorneys' rates to rebut Mr. Hoffman's rate. See id. at 11. However, this evidence is not dispositive. GNC's claimed rates are $275 for lead counsel Mr. Keller and $225 for Christopher Holland during trial. See id. However, these rates are evidence of these attorneys' own skill, experience, and reputation and say little about Mr. Hoffman's. More importantly, these rates are actually discounted rates. See Keller Decl. ISO Def.'s Mot. ¶ 6. Mr. Keller's customary rate is $450 an hour. See id. Furthermore, Mr. Holland's customary rate is $350. See id. Thus, their claimed market rates are actually much lower than their customary rates. If anything, these normal customary rates would tend to support rather than rebut Mr. Hoffman's rate. The Court further notes that GNC has not presented any other evidence, such as surveys, indicative of the market rate for Mr. Hoffman.
GNC provided unrequested supplemental briefing to the Court (as opposed to objections or rebuttal evidence which the Court did permit) which described some of Mr. Hoffman's experience. See Keller Supp. Decl. IOT Pl.'s Mot. ¶ 7. The "electronic docket sheets" research from District Court and Superior Court websites purports to detail Mr. Hoffman's representation and trial experience. See id. ¶¶ 7-8 Exs. A-B. However, the reliability of this search is questionable because the Court does not know how the search was performed. Mr. Hoffman has rebutted this evidence in his request for judicial notice submitted on October 28, 2004. See Pl.'s Req. Judicial Notice (Docket No. 327). The Court takes judicial notice of Mr. Hoffman's submission of U.S. District Court Web Pacer Docket Reports, which detail Mr. Hoffman's experience in federal court. See id. Notably, Mr. Hoffman has appeared in ten District Court cases other than the present case and took three of them to trial. See id. at 2-3.
Finally, the Court notes that the award of $325 per hour for attorneys of Mr. Hoffman's experience appears to be in line with other recent decisions in this District. See Singh v. Jutla, No. C-02-1130 CRB (order of 6/8/04) (awarding $325 per hour for 1987 graduate); Velez v. Roche, No. C-02-0337 EMC (order of 9/22/04) (awarding $325 per hour to 1993 graduates). Therefore, as supported by the declarations of Mr. Rubin and Mr. Seligman, Mr. Hoffman's claimed rate of $325 per hour appears reasonable and consistent with the evidence before this Court.
d. Josh Rosenthal
Ms. Navarro asserts that the reasonable hourly rate for Mr. Rosenthal is $300. See Hoffman Decl. ¶ 8. Mr. Rosenthal was admitted to the California Sate Bar in 1997, and his bar number is 190284. See Hoffman Supp. Decl. ¶ 2. Mr. Rosenthal is employed with Medlin Real Estate Law Group in Oakland. See id. Ms. Navarro provided no other evidence of reasonableness of the market rate requested for Mr. Rosenthal. GNC similarly did not rebut the reasonable market rate of Mr. Rosenthal. Given this Court's recent award of $275 per hour to 1998 and 1999 graduates and its experience in mediating fee shifting cases, it concludes that $275 is the market hourly rate for Mr. Rosenthal.
e. Marilyn Minger
Ms. Navarro contends that the reasonable hourly rate for Ms. Minger is $285. See Minger Decl. ¶ 6. Ms. Minger is an attorney of record for Ms. Navarro. See id. ¶ 1. Ms. Minger earned a BA in applied mathematics in 1988. See id. ¶ 2. She graduated from the University of California at Davis Martin Luther King Junior School of Law in 1991. See id. ¶ 3. She passed the California Bar exam and was admitted in December of 1991. See id. She is a member of all of the courts of the State of California and the U.S. District Court for the Northern District of California. See id. ¶ 4. She has spent about 50 percent of her time in civil litigation since 1991 and about a year on discrimination and employment litigation. See id. ¶ 5.
Mr. Rubin's declaration asserts that Ms. Minger's rate is an accurate market rate for lawyers with her experience and qualifications. See Rubin Decl. ¶¶ 4-5. As with Mr. Hoffman's rate, these declarations may not be dispositive. However, GNC, as with Mr. Hoffman's rates, provides no helpful evidence to rebut Ms. Minger's rates. GNC only asserts that her rate should be lowered to $150 because Mr. Hoffman's rate as lead counsel should be $150. See Opp'n at 17. In light of this weak rebuttal, and the declarations supporting her rate, Ms. Minger's rate of $285 is a reasonable rate.
f. Katie Youngmark and Geraldine Camp
Ms. Navarro asserts that the reasonable hourly rate for both Katie Youngmark and Geraldine Camp is $65. See Hoffman Decl. ¶ 8. GNC does not contest this rate for either Ms. Youngmark or Ms. Camp. Mr. Hoffman's declaration only describes Ms. Youngmark as an experienced paralegal but provides detailed information regarding Ms. Camp's experience. See id. Ms. Camp is an apprentice certified by the California State Commissioner of Bar Examiners to study law under his supervision. See id. Ms. Camp attended St. John Fisher College in Rochester, New York, from 1990-1994 and studied business and psychology. See Camp Decl. ¶ 2. Her work experience includes two years as an executive assistant for The Lurie Company, a real estate development firm in San Francisco. See id. ¶ 3. Ms. Camp has worked for Mr. Hoffman since January of 2001. See id. ¶ 4. In light of the evidence presented by Ms. Navarro, $65 is a reasonable rate for Ms. Youngmark and Ms. Camp. Cf. Velez v. Roche, supra (awarding over $100 per hour for experienced paralegals).
2. Reasonable Number of Hours
Ms. Navarro also bears the burden of proving the reasonableness of the number of hours expended. See Hensley, 461 U.S. at 437 ("[T]he fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended. . . ."). In the present case, Ms. Navarro submitted several exhibits documenting hours which were contemporaneously billed by the members of her legal team. The Court has categorized and reviewed Mr. Hoffman and Ms. Minger's hours according to different tasks or phases of litigation and finds that Ms. Navarro has met the preliminary burden for proving reasonable hours. CATEGORY DATES HOURS Hoffman Hours Hoffman Total: ~772 hours Minger Hours Minger Total: ~207 hours
The Court focuses here on Mr. Hoffman and Ms. Minger's reasonable hours more than other attorney hours and notes that GNC's objections were directed only at Mr. Hoffman's hours. The other persons billing on Ms. Navarro's case documented their hours and spent much less time than Mr. Hoffman working on the case.
a. Partial Success Reduction
GNC contends that, because Ms. Navarro only succeeded on one of the many original claims, her reasonable hours should be cut to reflect that limited success. However, GNC points to no specific hours that were spent on unsuccessful claims. The Court has reviewed the hours spent by Mr. Hoffman on various tasks and found only one entry for time spent on an unsuccessful claim. The 0.3 hours spent by Mr. Hoffman reviewing emails regarding the UCL claim on April 4, 2004, should be subtracted from his reasonable hours. Because GNC fails to identify any other time specifically spent on unsuccessful claims, it failed to meet its burden. Any deduction based on the limited success of the overall litigation is made with a Hensley reduction to the lodestar (as addressed below).
b. Attorney Conduct Reduction
GNC contends that Mr. Hoffman's claimed hours should be lowered because of "contentious conduct" (noted previously). See Opp'n at 12. If Mr. Hoffman's alleged conduct was a result of lack of skill, then an argument could be made to reduce the number of Mr. Hoffman's reasonable hours. However, GNC has made this analysis difficult by not providing the Court with specific examples of which hours were unreasonable or with any evidence that any particular hours were not reasonably billed. GNC has failed to present a quantifiable rebuttal that any of Mr. Hoffman's hours should be subtracted because of these contentions.
c. Comparison to GNC's Hours
In another "inefficiency" argument, GNC alleges that Mr. Hoffman's conduct has wasted the time of its own attorneys. See Opp'n at 10, Keller Decl. ¶¶ 2-4. In GNC's own motion for attorney's fees, GNC offers its only quantifiable opposition to Mr. Hoffman's hours. See Keller Decl. ISO Def.'s Mot. ¶ 14. In Mr. Keller's declaration, he asserts that GNC billed $28,000 by responding to Mr. Hoffman's inefficiencies, including "preparing GNC's Motion to Compel Plaintiff's deposition, . . . opposing Plaintiff's frivolous motion to compel, and . . . defending depositions of GNC [regarding the UCL claim] and producing documents relating to [the UCL claim]." Id.
This argument may support an inference that, because GNC has spent time on these issues, Ms. Navarro spent similar time on these issues. Courts have allowed comparisons of opposing parties hours as an approximation of reasonable hours. See Chalmers v. City of Los Angeles, 796 F.2d 1205, 1214 (9th Cir. 1986) ("[W]e have no counter affidavits from the City indicating the amount of time it expended in litigating this case. Certainly that kind of information would be helpful to us."). But see Ferland v. Conrad Credit Corp., 244 F.3d 1145, 1151 (9th Cir. 2001) ("Comparison of the hours spent in particular tasks . . . does not necessarily indicate whether the hours expended by the party seeking fees were excessive.").
However, even if there was an inference that Ms. Navarro spent equal time as GNC did on these specific issues, the Court cannot recommend a reduction. Inasmuch as the UCL claim was unsuccessfully pursued ( e.g., in a motion to compel, discovery, and GNC depositions), that lack of success will best be accounted for in a reduction to the lodestar since the UCL claim was related to the FMLA claim. As for GNC's motion to compel the deposition of Ms. Navarro, GNC has pointed to no specific hours that Ms. Navarro spent on that motion, and Mr. Hoffman stated that he billed no time regarding that issue. See Reply at 8. Therefore, a reduction cannot be made for that particular motion because there is no evidence that any time was billed for work pertaining to it.
d. Reduction Based on an Alleged Settlement Offer
GNC argues that Ms. Navarro's alleged rejection of a settlement offer is a basis for lowering the amount awarded because Ms. Navarro recovered less at trial than the alleged offer. See Opp'n at 14. This contention might carry some weight if the offer had been made properly pursuant to Federal Rule of Civil Procedure 68. However, GNC concedes that it was not. Despite GNC's concession, GNC contends that the Court may still consider the fact that Ms. Navarro "rejected" their alleged settlement offer and make an appropriate reduction of hours. See id. at 13.
This argument is irrelevant because the Ninth Circuit has held that when a plaintiff has not received a Rule 68 offer of judgment, "he cannot be deprived of costs." See Berkla v. Corel Corp., 302 F.3d 909, 922 (9th Cir. 2002) ("[A]bsent a Rule 68 offer of judgment, a plaintiff's failure to accept a settlement offer that turns out to be less than the amount recovered at trial is not a legitimate basis for denying an award of costs. To hold otherwise would render Rule 68 largely meaningless."). Therefore, the Court cannot reduce any hours based on an alleged informal settlement offer because the offer was not made in the proper Rule 68 form. One of the requirements of a Rule 68 offer is that the offer to settle must be served upon the other party. See, e.g., Magnuson v. Video Yesteryear, 85 F.3d 1424, 1429 (9th Cir. 1996) (holding that "cases involving Rule 68 offers, must comply with Fed.R.Civ.P. 5(b)"). In the present case, even if GNC offered to settle, neither party has suggested the offer was in writing or was served upon Ms. Navarro. Thus, any supposed offer GNC made did not comport with Rule 68's requirements, and a reduction of all "post-offer" time is not appropriate. Finally, GNC has presented no admissible evidence that this Court can credit an offer greater than the jury verdict that was in fact made.
e. Clerical Tasks
GNC objects to some of the hours billed by Ms. Camp, Ms. Navarro's paralegal, as clerical work. See Opp'n at 5-6. The Supreme Court held in Missouri v. Jenkins, 491 U.S. 274 (1989) that, while paralegal hours are recoverable, "purely clerical or secretarial tasks should not be billed at a paralegal rate, regardless of who performs them." Id. at 288. Time spent on clerical activities, such as "filing, document organization and other clerical matters" should be accounted for by the firm's overhead and are included in the attorney's hourly rate. See Keith v. Volpe, 644 F. Supp. 1312, 1316 (1986); see also Frevach Land Co. v. Multnomah County, No. CV-99-1295-HU, 2001 U.S. Dist. LEXIS 22255, at *38 (D. Ore. Dec. 18, 2001) (excluding hours for staff tasks such as faxing, photocopying, transcription, and collation); Alvarez v. IBP, Inc., No. CT-98-5005-RHW 2001, U.S. Dist. LEXIS 25341, at *28 (E.D. Wash. Dec. 14, 2001) (discounting paralegal hours spent "envelope stuffing and photocopying.").
Ms. Camp's challenged tasks include:Date Hours Description
12/3/2002 4.0 "organize client file" 4/6/2004 12 "Save as PDF files and assist in the preparation of: Memorandum in Opposition to Defendant's Motion for Summary Judgment, Memorandum in Opposition Cover page for points and authorities in opposition, Statement of Facts in opposition to defendant's motion for summary judgment, Declaration of Andrew A. Abarbanel, M.D. re Opposition to Defendant's Motion for Summary Judgment, Declaration of Mercedes Navarro in Support re Opposition to Defendant's Motion to Summary Judgment . . . [etc]" 4/9/2004 7 "save as PDF files and assist in the preparation of" numerous motions, declarations, etc. 4/20/2004 2 "save as PDF files and assist in the preparation of" numerous motions, declarations, etc. 5/4/2004 10.5 "save as PDF files and assist in the preparation of" numerous motions, declarations, etc. 5/7/2004 20 "save as PDF files and assist in the preparation of" numerous motions, declarations, etc. 3/16-4/5/2004 76 "Assist in preparation for Summary Judgment Opposition and Counter motion. Worked on Saturdays and Sundays averaging out to 4 hours per day spent doing legal research, briefs, deposition summarizations, dictation, copying, table of authorities and Appendix work-19 days." 1/2004 20 "file maintenance for the month of January" 2/2004 20 "file maintenance for the month of February" 3/2004 20 "file maintenance for the month of March" 4/2004 20 "file maintenance for the month of April" 5/2004 20 "file maintenance for the month of May" GNC correctly notes that these billed tasks include clerical tasks. However, some of the hours also appear to include properly billable tasks. For example, the nonbillable hours involving saving documents as PDF files are "block billed" with hours including billable document preparation tasks. Also, the 76 hours of nonbillable dictation and copying also include billable legal research and deposition summaries. Courts generally "frow[n] on block billing where discrete and unrelated tasks are lumped into one entry, as the practice can make it impossible . . . to determine the reasonableness of the hours spent on each task." See Defenbaugh v. JBC Associates, Inc., No. C-03-0651 JCS, 2004 WL 1874978, at *9 (N.D. Cal. Aug. 10, 2004) (reducing hours billed for separate tasks billed as one entry).In the present case, the billable tasks are very difficult to separate from the nonbillable tasks. Ms. Camp spent around 60 hours assisting with preparation of many of the court documents in this case and saving them as PDF files. Without more information, it is almost impossible to ascertain if she spent more time preparing or saving these documents. This Court's best estimate is that a 50 percent reduction for these block-billed entries is appropriate. Additionally, the purely clerical task entries, such as file maintenance and organization, are eliminated altogether. Therefore, of the 272.6 hours requested, 167.75 hours will be deducted for clerical tasks, leaving a total of 104.85 hours billable for Ms. Camp.
f. Billing Judgment
Ms. Navarro must also exercise "billing judgment," which means that she should exclude from her request "hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated to exclude such hours" from the client's bills. Hensley, 461 U.S. at 434. Billing judgment is ideally demonstrated by contemporaneous time records, and an identification of both hours for which the applicant is seeking reimbursement and hours for which the applicant is not seeking compensation. See 2 Schwartz Kirklin, Section 1983 Litigation § 4.13, at 220.
In City of Riverside v. Rivera, 477 U.S. 561 (1986), the Supreme Court explained Hensley's billing judgment requirement is that all hours be reasonable. See id. at 570 n. 4 (noting that Hensley requires billing judgment because the hours must be reasonable, and not because the fee applicant "should necessarily be compensated for less than the actual number of hours spent litigating a case."). In Gates v. Deukmejian, 987 F.2d 1392 (1993), the Ninth Circuit emphasized that Hensley's "concise but clear" requirement did not require a district court to analyze a fee application for billing judgment line by line but did require a very specific explanation for a percentage reduction. See id. at 1402 ("Because the district court neither provided this court with a 'concise but clear' explanation of its reasons for selecting the ten percent figure nor independently reviewed plaintiffs' fee application, we vacate its determination . . . that plaintiffs' discrete billing judgment reductions and ten percent across-the-board reduction in the lodestar compensated for any overbilling or duplication.").
Ms. Navarro submitted fairly detailed time records, satisfying a preliminary requirement for demonstrating billing judgment. Unfortunately, however, Ms. Navarro has not addressed whether she has exercised "billing judgment." Neither has she offered evidence that she has reduced any hours billed for inefficiency just as attorneys would do for regular clients. The one exception is that Mr. Hoffman declared that he did not bill for all of his trial time. See Hoffman Decl. ¶ 9. A review of Ms. Navarro's billing records has failed to reveal any overbilling or duplication in effort. As noted above, the time spent by Mr. Hoffman at the various stages of litigation appear reasonable. GNC has similarly not pointed to any entries that should be excised for billing judgment. Without being able to point out any specific time entries as example, the Court cannot recommend a percentage reduction for billing judgment.
g. Work on Fee Application
Ms. Navarro also requests that her attorneys' time spent litigating the fee motion be reimbursed. In civil rights actions, prevailing plaintiffs are generally entitled to recover attorney's fees incurred in the preparation of an attorney's fees motion. "[T]ime spent by counsel in establishing the right to a fee award is compensable." Davis v. City of San Francisco, 976 F.2d 1536, 1544 (9th Cir. 1992). However, even if Ms. Navarro is entitled to attorney's fees, the full amount may have to be lowered in light of the Hensley requirements of level of success achieved as discussed below. See Atkins v. Apfel, 154 F.3d 986, 989 (9th Cir. 1998) ("[T]he district court was required to consider the results achieved on appeal when determining whether those fees were reasonable."); see also Schwarz v. Secretary of Health Human Services, 73 F.3d 895, 909 (9th Cir. 1995) ("[A] district court does not abuse its discretion by applying the same percentage of merits fees ultimately recovered to determine the proper amount of the fees-on-fees award.").
Ms. Navarro's requested hours spent on the fee petition are as follows:
Mr. Hoffman: 88 hours Ms. Minger: 4.5 hours Ms. Camp: 8 hours TOTAL: 100.5 hours
In light of the complicated nature of fee applications, these hours appear reasonable. GNC does not challenge the reasonableness of the hours spent preparing the fee petition. However, as discussed below, if a downward adjustment is warranted on the merits claim, a similar adjustment may apply to the fee claim.
3. Lodestar Summary
Ms. Navarro has met her burden of proving the lodestar with the submission of detailed time records and evidence in declarations regarding reasonable hourly rates. Moreover, as discussed further below, the claims are all sufficiently related to be included in the lodestar. Notwithstanding GNC's opposition, GNC has not met the burden of rebutting the reasonableness of Ms. Navarro's reasonable hourly rates. Nor has GNC quantitatively rebutted any of Ms. Navarro's reasonable hours. Thus the Court recommends the following lodestar calculation: NAME HOURLY RATE HOURS AMOUNT Total Attorney's $320,031.00 Fees
Costs are addressed below.
C. Upward or Downward Adjustment to Lodestar
1. Burden of Proof
In Hensley, the Supreme Court noted that in some cases there should be an upward or downward adjustment to the lodestar, depending on the "results obtained" in the lawsuit. See Hensley, 461 U.S. at 434. In Blum, the Supreme Court stated that the fee applicant had the burden of proving an upward adjustment. See Blum, 465 U.S. at 898. Other courts have noted that the burden is on the party seeking the adjustment. See, e.g., Copeland v. Marshall, 641 F.2d 880, 892 (D.C. Cir. 1980) (where "[t]he burden of justifying any deviation from the "lodestar" rests on the party proposing the deviation."). In the present case, Ms. Navarro requests a 2.0 multiplier to the lodestar. See Mot. at 13. GNC proposes a downward adjustment. See Opp'n at 14. Therefore, Ms. Navarro bears the burden of proving the need for an upward adjustment, and GNC the burden of proof for a downward adjustment.
2. Upward Adjustment
In Blum, the Supreme Court discussed what might be a basis for an upward adjustment to the lodestar. See Blum, 465 U.S. at 886. The Court noted that certain suggested bases for an upward adjustment were not warranted because they were already reflected in the lodestar. See id. at 898. For example, "[t]he novelty and complexity of the issues presumably were fully reflected in the number of billable hours recorded by counsel and thus do not warrant an upward adjustment in a fee based on the number of billable hours times reasonable hourly rates. . . . [Also,] the special skill and experience of counsel should be reflected in the reasonableness of the hourly rates." Id. Similarly, "[b]ecause acknowledgment of the 'results obtained' generally will be subsumed within other factors used to calculate a reasonable fee, it normally should not provide an independent basis for increasing the fee award." Id. at 900. Ms. Navarro offers several reasons for an upward adjustment.
First, Ms. Navarro asserts that a delay in payment may be grounds for an upward adjustment. See Mot. at 13. However, Ms. Navarro has offered no evidence or authority to support an upward enhancement for delay in payment in this case. In fact, the delay in payment is accounted for in two ways — (1) getting the current hourly rates for her legal team as opposed to their historic rates and (2) getting post-judgment interest on jury award and attorney's fees. See 28 U.S.C. § 1961(a) ("Interest shall be allowed on any money judgment in a civil case recovered in a district court.").
Second, Ms. Navarro alleges that the fee should be adjusted upward because of the supposed "unlimited resources" of GNC, the allegedly risky nature of taking the case to trial because of "public . . . [deference] . . . to corporate decision-making," the difficulty in establishing the merits of case, and the allegedly novel issues involved in the case because of the "youth of the FMLA laws." Mot. at 14. However, Ms. Navarro offers no authority or evidence otherwise to establish that these alleged conditions warrant an upward fee enhancement. Furthermore, Blum specifically noted that risk, novelty, and complexity are all properly "reflected in the number of billable hours recorded by counsel and thus do not warrant an upward adjustment in the fee." Blum, 465 U.S. at 898-899. Thus, Ms. Navarro's arguments for an upward adjustment on these bases is moot.
Third, Ms. Navarro argues that an upward enhancement is necessary because the case was "taken on a contingency basis." Mot. at 15. However, Ms. Navarro offers no authority for this proposition. Furthermore, the Supreme Court explicitly disallowed awarding enhancements for contingency in City of Burlington v. Dague, 505 U.S. 557, 566 (1992). In this case, the Supreme Court held that "[c]ontingency enhancement is . . . not consistent with our general rejection of the contingent-fee model for fee awards, nor is it necessary to the determination of a reasonable fee." Id. Therefore, an upward fee enhancement is inappropriate.
Fourth, Ms. Navarro contends that her attorneys' "exceptional quality of representation and results" requires an upward fee enhancement. Mot. at 13. In Blum, the Supreme Court held that the "quality of representation . . . generally is reflected in the reasonable hourly rate." Blum, 465 U.S. at 899. Furthermore, the Court continued, "[i]t . . . may justify an upward adjustment only in the rare case where the fee applicant offers specific evidence" to support an enhancement. Id. (emphasis added). Ms. Navarro has offered no specific evidence of exceptional representation or results that is not already accounted for in her hourly rates apart from the fact that she prevailed on one claim. Therefore, there appears to be no compelling reason to upwardly adjust the lodestar.
3. Downward Adjustment
Where plaintiff prevails on some claims and/or obtains only partial success in obtaining limited relief, a downward adjustment to the lodestar may be warranted under Hensley. See Hensley, 461 U.S. at 436. Under Hensley, the Court applies a two-part test for determining whether a downward adjustment is warranted: (1) the lodestar is reduced to account for unsuccessful claims unrelated to the prevailing claims and (2) the lodestar is reduced to account for only partial overall success where successful and unsuccessful claims are related and cannot be discretely parsed. See id. at 435-436.
a. Reduction for Unrelated Claims
In examining the first test, the Court must first determine whether the unsuccessful claims are related to the successful claims. If they are related, no downward adjustment applies simply because those related claims were unsuccessful. Generally, a lodestar reduction for unsuccessful claims is not warranted if the successful and unsuccessful claims all "involve a common core of facts or [are] based on related legal theories." Id. at 435. In determining whether claims are related, the Court also considers "whether the evidence concerning one issue was material and relevant to the other issues," whether the issues shared a "common core of facts," whether they sought "relief for . . . the same course of conduct," whether "the testimony presented overlapped" and whether "it seems unlikely that trial preparation time on the [multiple] claims could be separated." Thorne v. City of El Segundo, 802 F.2d 1131, 1141-42 (9th 1986) (further noting that, "in civil rights suits, cases involving unrelated claims may be unlikely to arise with great frequency," citing Hensley, 461 U.S. at 435). As to related claims, "[l]itigants in good faith may raise alternative legal grounds for a desired outcome, and the court's rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee." Id. On the other hand, completely separate or unrelated unsuccessful claims could warrant a reduction in hours. See id.
The majority of Ms. Navarro's claims ( i.e., FMLA/CFRA, wrongful termination, emotional distress) are related. These claims arise out of the same set of facts and required essentially the same discovery regarding Ms. Navarro's physical injuries and the incidents leading up to her termination and inability to receive FMLA benefits.
GNC agrees that Ms. Navarro's claims are related. See Def.'s Bill of Costs at 5. ("Plaintiff's claims involved common facts and were based on related legal theories. . . .").
The UCL claim, while not exactly simply an alternative theory of relief, is sufficiently related for purposes of Hensley. Although the claim involved additional elements — e.g., practice or pattern of violating the FMLA or CFRA — it would be predicated on establishing in the first instance an FMLA or CFRA here. There is, therefore, substantial overlap in the case facts that would have to be proven.
The unsuccessful FEHA claims, as initially plead, however, are not related. The facts needed to prove a "medical condition" ( i.e., cancer or genetic defect) are completely different from the facts to prove Ms. Navarro's physical condition entitling her to leave under the FMLA and CFRA. See Cal. Gov't Code 12926(h). Indeed, the parties appear to agree that the FEHA medical condition was erroneously plead instead of a FEHA physical condition. Ms. Navarro's erroneously plead FEHA medical condition claim was unrelated to the FMLA claim on which she prevailed. However, neither party has indicated or proven that any hours were spent on this claim so there is no factual basis for a downward adjustment under Hensley. The FEHA physical condition claim (erroneously plead as a medical condition and then sought to be corrected just before trial), however, is related to the FMLA claim. The facts regarding Ms. Navarro's "physicial condition" overlapped with the facts supporting her FMLA claim. Thus, no downward adjustment is warranted on this account.
Ms. Navarro's FEHA claim of race discrimination is unrelated to the FMLA claim on which she succeeded. The facts needed to prove race discrimination are quite distinct from the facts needed to prove an FMLA claim. Proof would have focused on treatment of similarly situated individuals, and the gravamen of the claim would have been GNC's intent to discriminate against Ms. Navarro on the basis of race, facts entirely different than those needed to establish an FMLA claim. However, Ms. Navarro dropped her race discrimination allegations prior to summary judgment, and neither party has pointed to or proven any hours were spent on that unsuccessful claim. Thus, there is no factual basis for a Hensley reduction.
b. Reduction for Partial Success
GNC's request for judicial notice of a 1994 case on this issue is rejected as unnecessary. The local rules only allow supplementary materials to this effect to be submitted "by serving and filing a Statement of Recent Decision" when the materials were "published after the date the opposition or reply" and before the hearing date. See Civ. L.R. 7-3(d) (emphasis added). Furthermore, there was no prior Court approval for filing this case. See id.
Where the plaintiff succeeded on some but not on all related claims and obtained less than full relief, Hensley holds that "[t]he district court should focus on the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation." Id. at 435 ("[A] plaintiff . . . may recover a fee award based on all hours reasonably expended if the relief obtained justifie[s] that expenditure of attorney time." Id. at 436 n. 11.). The Court has discretion in determining whether excellent (as opposed to only partially successful) results have been obtained. See 2 Schwartz Kirklin, Section 1983 Litigation § 6.5, at 327 ("In a case of mixed results with related successful and unsuccessful claims, considerable discretion inheres in the district court's discharge of its obligation to determine whether the prevailing plaintiff achieved excellent results warrant a fully compensatory fee or only limited success requiring a reduction in the fee awarded."). However, "this discretion . . . must be accompanied by a clear explanation that the district court 'has considered the relationship between the amount of fees awarded and the results obtained.'" Id. § 6.3, at 314-15 (citing Hensley, 461 U.S. at 436-437).
"The Supreme Court suggested [in Hensley] that the prevailing party's success on the 'major issue' in the suit warrants the conclusion that the success achieved was excellent, even if not complete, thereby entitling the prevailing party to compensation for all time reasonably expended on the litigation." Id. § 6.5, at 328 (citing Hensley, 461 U.S. at 438 n. 14); see also Gates v. Deukmejian, 987 F.2d 1392, 1404 (9th Cir. 1992) (citing Hensley and stating that a "district court should not reduce the lodestar merely because the prevailing party did not receive the type of relief that it requested") (emphasis added); Swanson v. Martwick, 726 F. Supp. 210, 211 (N.D. Ill. 1989) (stating that an over-optimistic prayer for relief should not count against the success of the plaintiff if they otherwise achieved excellent results). On the other hand, where the plaintiff's failure to succeed a certain claim resulted in limited relief, a downward adjustment may be warranted.
In Hensley, the Supreme Court found illustrative a case where a "fired school teacher had sought reinstatement, lost wages, . . . damages, and expungement of her record." Hensley, 461 U.S. at 440 n. 14. "She obtained lost wages and expungement, but not reinstatement or damages." Id. The Supreme Court noted that the district court was entitled to take into account the "minor relief obtained" and accordingly "make a limited fee award." Id.
Ms. Navarro succeeded on the FMLA violation, a major claim in her case, and obtained an award of $60,500 for back pay. However, her success is limited by the fact that she did not prevail on any of her other claims, resulting in her ability to recover only one component of damages. Ms. Navarro's prayer for relief in her complaint included general economic and non-economic damages, special damages, punitive damages, injunctive relief or reinstatement, prejudgment interest, cost, attorney's fees, and "other and further relief as [the] Court deems just and proper." Complaint at 13. In effect, Ms. Navarro sought four components of relief: back pay, front pay, emotional distress damages, and injunctive relief ( i.e., reinstatement and UCL). Quantitatively, GNC alleges that she sought $750,000 in emotional distress damages and that her total demand "would have well totaled almost $1,000,000 in compensatory damages." Opp'n at 5. GNC further contends that Ms. Navarro requested $665,500 from the jury. See id. Ms. Navarro did not contest this allegation.
Ms. Navarro alleges that the FMLA claim was the "gravaman [sic] of [her] case" and that, because she prevailed at trial on that claim, she achieved excellent results. Reply at 12. There is no question that Ms. Navarro succeeded on her FMLA claim. However, given the scope of relief sought via Ms. Navarro's unsuccessful claims, it is clear that Ms. Navarro achieved only partial success. Ms. Navarro was denied reinstatement. Her UCL claim failed at the summary judgment stage, resulting in no injunction against GNC. Ms. Navarro was also denied future wages or front pay which she could have recovered had she prevailed on her CFRA or wrongful discharge claims. Ms. Navarro was completely denied emotional distress damages, recoverable on three other claims that went to the jury ( i.e., CFRA violation, CFRA retaliation, and wrongful discharge). Ms. Navarro's FEHA claims also could have provided emotional distress damages, reinstatement, or lost pay. See Cal. Gov't Code § 12970; see also 7-A Chin et al., Cal. Prac. Guide: Employment Litig. § 1110 (2003). Instead, because Ms. Navarro prevailed only on her FMLA interference claim, her relief was limited to lost back pay.
Accordingly, Ms. Navarro achieved only partial or limited success. This warrants a reduction under the second test of Hensley. The question is how much of a reduction is warranted to account for this limited success. The Supreme Court disallowed a strict mathematical approach in Hensley, but the Ninth Circuit has approved percentage reductions to the lodestar to account for partial success. See, e.g., Harris v. Marhoefer, 24 F.3d 16, 18-19 (9th Cir. 1994) (approving the district court's 50 percent reduction to the lodestar based on the partial success of the prevailing party, a comparison of relief requested versus relief obtained, and the number of successful claims versus unsuccessful claims); see also Schwarz v. Secretary of Health Human Servs., 73 F.3d 985, 904-05 (9th Cir. 1995) (holding that the district court did not abuse its discretion by applying a mathematical formula to approximate hours spent on unsuccessful, unrelated claims).
In this regard the Court notes that the relief Ms. Navarro obtained was considerately short, both qualitatively and quantitatively, of what she sought in this litigation. Moreover, although the claims are related, different proof was necessary for at least some of the related claims. For instance, although the jury found for Ms. Navarro on the FMLA interference claim, it did not find her discharge was motivated by retaliation or by her request for medical leave. Taking into account the "significance of the overall relief obtained" in relation to the "hours reasonably expended," and the fact that certain key facts which were the subject of some discovery independent of her FMLA claim were resolved against her, the Court concludes that a 35 percent reduction of the lodestar is appropriate.
D. FMLA Costs
As a preliminary matter, the Court notes that statutory costs of $9,374.88 have already been taxed by the Clerk of Court pursuant to 28 U.S.C. § 1920 and Federal Rule of Civil Procedure 54(d). See also Civ. L.R. 54-3 (providing more details about recoverable statutory costs). Therefore, as GNC points out, Ms. Navarro cannot request this total amount as part of her attorneys' fees request. She may, however, request approximately $6,570.24 (the difference of costs taxed and total costs requested in Ms. Navarro's Bill of Costs). These costs are recoverable under the fee shifting provision of FMLA.
The FMLA statute expressly provides for, "in addition to any judgment awarded to the plaintiff, . . . a reasonable attorney's fee, reasonable expert witness fees, and other costs of the action to be paid by the defendant." 29 U.S.C.A. § 2617(a); see also Churchill, 1998 WL 254080, at *10 (awarding an expert witness fee to prevailing plaintiff without "bill, invoice, or other support for the claimed expert fee"; instead relying on the expert's testimony at his deposition for proof of his rate). Thus the Court may consider expert witness fees and other costs, including attorney travel and lodging, as part of her request for attorneys' fees.
1. Expert Witness Fees
In support of Ms. Navarro's request for expert witness fee reimbursement, she has submitted an itemization of three doctors' fees, totaling $4,350. The fees, respectively, are $187.50 for Dr. Marina Furtado, $3,412 for Dr. Andrew Abarbanel, and $750 for Dr. Vicki Economou. Ms. Navarro has not provided the Court with bills or invoices to support the fees. GNC objected to the $3,412 charged for Dr. Abarbanel in its opposition to Ms. Navarro's Bill of Costs. See Opp'n to Pl.'s Bill Costs at 4. GNC objected to Dr. Abarbanel's fee because he allegedly did not testify at trial. See id.
GNC's cited authority is not exactly on point but is persuasive. Hodges v. El Torito Restaurants, Inc., No. C-96-2242 VRW, 1998 WL 95398 (N.D. Cal. 1998) provides for subtracting witness fees for witnesses that do not testify at trial. See id. at *3. However, the court in Hodges did allow half of the witnesses fees because their expertise aided in preparation for trial. This is compensable in part even though their services were not used at trial. See id. GNC has failed to demonstrate that these fees were not reasonably incurred in connection with the prosecution of the FMLA and related claims. To the extent a portion of these expenses relate primarily to unsuccessful claims, they are subject to a Hensley adjustment discussed below.
GNC contends Dr. Abarbanel was a "psychological expert for the emotional distress claim." Opp'n to Pl.'s Bill Costs at 4-5. But this was a claim related to Plaintiff's FMLA interference claim. It was not unreasonable to employ Dr. Abarbanel on this issue, though ultimately the evidence related to an unsuccessful claim.
2. Other Costs
A prevailing plaintiff "may recover as part of the award of attorney's fees those out-of-pocket expenses that would normally be charged to a fee paying client." Harris v. Marhoefer, 24 F.3d 16, 19 (9th Cir. 1994) (reimbursing plaintiff for "necessary and reasonable costs" including "service of summons and complaint, service of trial subpoenas, fee for defense expert at deposition, postage, investigator, copying costs, hotel bills, meals, messenger service and employment record reproduction" in a civil rights action). As to Ms. Navarro's other costs, she has itemized several expenses, for a total of $2,200.24:
Airfare to Depositions in Pittsburgh $239.65 Airfare to Orange County Deposition $177.70 Hotel Reservation for Pittsburgh $352.51 Lodging during Trial $1,411.00 Travel Expense $3.00 Transportation $8.10
TOTAL $2,200.24
"California courts . . . allow travel expenses, as long as they are 'reasonable and necessary.'" In re Media Vision Technology Securities Litigation, 913 F. Supp. 1362, 1369 (N.D. Cal. 1996) (granting a motion for costs after a successful settlement of a securities class action) (citing Thornberry v. Delta Air Lines, 676 F.2d 1240, 1244 (9th Cir. 1982), remanded on other grounds, 461 U.S. 952 (1983)). Mr. Hoffman's expenses for travel and lodging during depositions, and travel during trial, appear to be reasonable. Additionally, Mr. Hoffman's lodging expense during trial also meets the "reasonable and necessary" standard despite GNC's objection in its opposition to Ms. Navarro's Bill of Costs. See Opp'n to Pl.'s Bill Costs at 3. However, as some of the expenses relate to unsuccessful claims, a Hensley adjustment is warranted.
3. Costs Summary
All requested costs are appropriate but, because of the related nature of the claims and the limited degree of success, an overall Hensley downward adjustment is appropriate. See Hensley, 461 U.S. at 435. Therefore the Court recommends a 35 percent reduction in the costs to compensate for the limited degree of success. This reduction brings the costs to $4,257.66.
REQUESTED RECOMMENDED
Expert Witness Fees $4,350 $4,350
Costs $2,200.24 $2,200.24
Subtotal $6,550.24
Total with a 35% Hensley $4,257.66 reduction
E. Ms. Navarro's Fees and Costs Summary
Based on the foregoing, the Court recommends that Ms. Navarro be granted her motion for attorney's fees. To summarize, Ms. Navarro's lodestar, after minimal deductions for time spent on unsuccessful claims and clerical tasks, remains mostly untouched at $320,031.00. However, because of the unsuccessful nature of the several related claims, the inability to subtract out hours for unrelated claims, and the success on only one component of damages, a 35 percent reduction is necessary. The adjusted lodestar totals $208,020.15. Costs after a similar Hensley reduction equal $4,257.66. The total fees and costs recommended is thus $212,277.80. This award is exclusive of costs already taxed by the Clerk of the Court.
III. DEFENDANT'S MOTION FOR FEES
GNC argues that, because it prevailed on seven out of the eight claims, it is entitled to seven-eighths of the attorney's fees that it incurred litigating this case. GNC further contends that it should be awarded one-third of its fees under 28 U.S.C. § 1927, Federal Rule of Civil Procedure 11, and the Court's inherent powers.
As a preliminary matter, GNC's argument that it is entitled to seven-eighths of its fees is problematic. Status as a "prevailing defendant" alone is not the standard for an award of attorney's fees to a defendant. See Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978). GNC has identified only one claim that provides for fee shifting: the FEHA claim. See Cal. Gov't Code § 12965(b) ("In actions brought under this section, the court, in its discretion, may award to the prevailing party reasonable attorney's fees and costs. . . .").
As discussed below, there is no factual basis for the award of any dollar amount for the unsuccessful FEHA claim. Moreover, the vast majority of claims, as previously discussed, are related to Ms. Navarro's successful FMLA claim. As to those claims, GNC cannot recover for fees under Hensley. Hensley noted that if a claim is unrelated, it may be treated as if it had been raised in a separate suit, and thus, if any such unrelated unsuccessful claim were deemed frivolous, the defendant may recover fees incurred in responding to it. See Hensley, 461 U.S. at 435 n. 10. If the claims are related, however, the proper way to account for unsuccessful claims is in the downward adjustment under Hensley. See 2 Schwartz Kirklin, Section 1983 Litigation § 10.3, at 482-83 ("[T]he courts often apply the Hensley analysis to conclude that if the frivolous and nonfrivolous claims are closely related because of shared facts, evidence, or legal theories, or because the attorney time spent on the different claims is inseparable, the defendant is not entitled to § 1988 fees for time expended in defending against the frivolous claim(s).").GNC was unable to provide the Court with any case in which a plaintiff prevailed on at least one claim, was entitled to attorney's fees based on that claim, and then was forced to pay attorney's fees to defendant for prevailing on another related claim.
The only claim ultimately deemed frivolous is Ms. Navarro's FEHA claim (both the race and medical condition component). Despite this conclusion, attorney's fees should still be denied based on GNC's failure to identify precisely how much was spent defending that claim. See Part III.A, infra.
Finally, GNC provides no explanation for why "1/3" is the appropriate amount under § 1927, Rule 11, and/or the court's inherent powers. To the extent that GNC is complaining about the expense of discovery resulting from conduct by Plaintiff, they make no showing that any sanctions were first sought under Rule 37. Fed.R.Civ.P. 37 (providing for sanctions upon "failure to make disclosures or cooperate in discovery"). Ultimately, none of GNC's grounds prove convincing.
A. Attorney's Fees Under FEHA
The only claim that is unrelated to Ms. Navarro's successful FMLA claim and for which there is a legal basis for fee shifting is the FEHA claim based on (1) race and (2) medical condition. The race discrimination claim was withdrawn in January 2004, and the medical condition claim was withdrawn at the Jury Instruction Conference on May 24, 2004. GNC therefore "prevailed" on both elements of the FEHA claim.
In determining whether GNC should be awarded attorney's fees under FEHA pursuant to California Government Code § 12965(B), the Court applies the standard laid out by the Supreme Court in Christianburg, a Title VII case. Christiansburg provides that "a district court may in its discretion award attorney's fees to a prevailing defendant . . . upon a finding that the plaintiff's action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith," or that the "plaintiff continued to litigate after it clearly became so." Christiansburg, 434 U.S. at 421-22. Although Christiansburg is a Title VII case, California courts have used the Christiansburg standard for assessing attorney's fees under FEHA. See Cummings v. Benco Bldg. Servs., 11 Cal. App. 4th 1383, 1386 (1992) (noting that California courts have "adopt[ed] methods and principles developed by federal courts in employment discrimination cases under Title VII and under ADEA").
In applying the Christiansburg standard, courts have awarded attorney's fees to defendants where plaintiff's cause of action was either "egregious" or "patently baseless for objective reasons." Id. at 1389; see also Rosenman v. Christensen, 91 Cal. App. 4th 859, 869 (2001) (concluding that attorney's fees inappropriate in part because cause of action was not "obviously contrary to undisputed facts or well established legal principles" specifically precluding recovery for the type of injury alleged); Nat'l Org. for Women v. Bank of Cal., 680 F.2d 1291, 1293 (9th Cir. 1982) (awarding defendant attorney's fees after plaintiff sought to continuously avoid adverse legal rulings by intentionally submitting renewed motions which disguised subject matter of previously denied motion); E.E.O.C. v. Jordan Graphics, Inc., 769 F. Supp. 1357, 1385 (W.D.N.C. 1991) (noting that plaintiff pursued litigation after discovery disclosed the factual basis for the alleged discrimination was patently nonexistent).
1. Discrimination on the Basis of Race
According to GNC, Ms. Navarro had absolutely no support for her racial discrimination claim, rendering the claim "frivolous, unreasonable and groundless." Mot. at 4. This was evidenced supposedly by Ms. Navarro's eventual "concession" that GNC had not discriminated against her based on race. Specifically, in January 2004, Ms. Navarro stipulated that she would not pursue any racial discrimination claims against GNC. See id. While stipulating not to pursue a claim does not necessarily infer that the claim is frivolous, unreasonable, or groundless under Christiansburg, GNC is correct in its ultimate conclusion that it has met the Christianburg standard.
It appears the race discrimination claim was frivolous and had no factual basis. The only allegation in the complaint that could be construed as grounds for a race discrimination claim was the statement that "Plaintiff is informed and believes . . . that Defendant Crisp, a Caucasian female, has assisted other non-Filipino or non-minority employees in obtaining FMLA/CFRA leaves." Compl. ¶ 8. Ms. Navarro's attorney, Mr. Hoffman, has stated in open court that he had not spent "any time" investigating her race claim; at the hearing herein he stated this claim was only added to the complaint because "she really wanted it there." Based on these representations, it appears that Mr. Hoffman had no evidence and made no effort to uncover evidence supporting the allegation that GNC provided greater assistance to non-minority employees in obtaining FMLA leave than to minorities. He then waited over a year to withdraw the claim.
Despite the conclusion that, absent any evidentiary support, the claim was frivolous, GNC should not be awarded attorney's fees under FEHA. GNC has not shown how much attorney time, if any, was spent defending the race claim. It appears the claim was never pursued by Ms. Navarro. GNC cannot take a mathematical approach based on the number of claims since that approach was explicitly rejected by Hensley. See Hensley, 461 U.S. at 435 ("We agree with the District Court's rejection of 'a mathematical approach comparing total number of issues in the case with those actually prevailed upon.'").
In conclusion, GNC should not be awarded any attorney's fees for Ms. Navarro's race discrimination claim under FEHA because it has made no factual showing of attorney fees actually spent responding to this claim.
2. Discrimination Based on Medical Condition
GNC alleges that Ms. Navarro had no support for her FEHA medical condition claim because under California Government § 12926(h), "medical condition" is limited to health impairments related to cancer or genetic characteristics. GNC argues therefore that this claim as framed in the complaint was frivolous. However, it appears that the parties spent virtually no time litigating this issue. It appears that the claim was simply misplead as a "medical condition" rather than "physical disability." GNC provides no evidence of attorney time specifically devoted to defending this claim.
To the extent attorney time was spent on the amended claim alleging physicial disability discrimination, GNC fees are not recoverable because that claim did arise out of the same set of facts as Ms. Navarro's FMLA claim and is therefore related. As noted above, under Hensley, fee shifting is not available to the defendant under those circumstances.
GNC argues that even if Ms. Navarro had claimed "physical disability" discrimination under FEHA, it would conflict with the FMLA claim. "Medical leave" (as requested by Ms. Navarro) under FMLA relates to a serious health condition making an employee unable to work, see Cal. Gov't Code § 12845.2(c)(3)(c)), whereas an employer does not violate FEHA if they provide reasonable accommodation to an employee with a "physical disability." See § 12940(a)(1) and (m)) (Hence, how can you claim you were simultaneously unable to work altogether, and that had your employer provided reasonable accommodation you could have worked?) However, Federal Rule of Civil Procedure 8(e)(2) states that "[a] party may set forth two or more statements of a claim or defense alternately or hypothetically" and that "a party may also state as many separate claims or defenses as the party has regardless of consistency." Therefore, this argument has no merit.
B. Attorney's Fees Based on 28 U.S.C. § 1927, Rule 11, and Court's Inherent Powers
GNC argues that one-third of the attorney's fees it incurred in this case were the result of the improper and bad faith conduct engaged in by Ms. Navarro and her counsel. Accordingly, they argue that it should be awarded one-third of its lodestar amount pursuant to sanctions under 28 U.S.C. § 1927, Rule 11, and the Court's inherent powers. While the Court recognizes GNC's frustration in dealing with Mr. Hoffman and his perceived "misconduct," his actions do not rise to the level of sanctionable conduct as contemplated by either statute or case law.
Section 1927 states in relevant part that "[a]ny attorney . . . who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses and attorneys' fees reasonably incurred because of such conduct." 28 U.S.C. § 1927. The principal purpose of § 1927 is the deterrence of intentional and unnecessary delay in the proceedings. See Beatrice Foods Co. v. New England Printing and Lithographing Co., 899 F.2d 1171, 1177 (Fed. Cir. 1990). The statute, by its terms, applies exclusively to attorneys. See Travelers Ins. Co. v. St. Jude Medical Office Bldg., 154 F.R.D. 143, 144 (E.D. La. 1994).
Under the statute, a district court may assess an award of fees against an attorney if (1) the actions of the attorney multiply the proceedings and (2) the attorney's actions are vexatious and unreasonable. See Dreiling v. Peutot Motors of America, 768 F.2d 1159, 1165 (10th Cir. 1985). In addition to these two requirements, the Ninth Circuit has added that counsel must have acted recklessly or in bad faith. See United States v. Blodgett, 709 F.2d 608, 610 (9th Cir. 1983). Even if all three elements have been satisfied, a court still has discretion in deciding whether to award sanctions. See Harper v. San Diego Transit Corp., 764 F.2d 663, 669 (9th Cir. 1985).
The type of behavior constituting the unreasonable and vexatious multiplication of proceedings (the first requirement) has not been specifically defined by any circuit, including the Ninth. Still, case law is instructive. For example, courts have commonly found multiplication of proceedings when there has been excessive motion filing. See, e.g., Travelers Ins. Co., 154 F.R.D. at 144 (concluding that defendants had unreasonably and vexatiously multiplied proceedings by filing motions that were repetitive of those in three earlier related motions, all of which were denied); Beatrice Foods Co., 899 F.2d at 1176 (finding sanctions appropriate for multiplied proceedings where defendant's weighty four motions and memoranda, along with oppositions and replies generated by the motions, were made for purposes of delay).
Courts have also found multiplication of proceedings where a party has continued to litigate despite a clear lack of factual evidence or relief under law. For example, in Trulis v. Barton, 107 F.3d 685 (9th Cir. 1997), the court awarded sanctions because plaintiffs had maintained the suit despite clear bankruptcy law barring it. See id. at 692. And in Cinquini v. Donahoe, No. C 95-4168 FMS, 1996 WL 79822, at *8 (N.D. Cal. Feb. 8, 1996), defendants were awarded attorney's fees pursuant to § 1927 because plaintiffs pursued meritless claims — even in the fact of repeated sanctions and clear authority that the appeals were frivolous. See id. at *2.
The second requirement for sanctions under § 1927 is a finding of recklessness or bad faith. See Blodgett, 709 F.2d at 608. "Bad faith is present when an attorney knowingly or recklessly raises a frivolous argument or argues a meritorious claim for the purpose of harassing an opponent." Estate of Blas ex rel. Chargualaf v. Winkler, 792 F.2d 858, 860 (9th Cir. 1986). Bad faith may be inferred from a totally baseless course of conduct. See Cinquini, 1996 WL 79822, at *8. However, the frivolousness of a claim or argument does not by itself justify an award of sanctions under § 1927; the additional element of wrongful purpose is required. See id.
The Ninth Circuit has provided several helpful examples of the level of conduct (inferring bad faith) sufficient to warrant § 1927 sanctions. See, e.g., Gomez v. Vernon, 255 F.3d 1118, 1131 (9th Cir. 2001) (affirming sanctions and finding of bad faith where party willfully and repeatedly examined prisoners' attorney-client privileged materials); Pacific Harbor Capital, Inc. v. Carnival Airlines, Inc., 210 F.3d 1112, 1115-18 (9th Cir. 2000) (affirming sanctions and finding of bad faith where attorney advised client to violate temporary restraining order).
Ignorance or negligence does not support a finding of recklessness or bad faith, however. See Barber v. Miller, 146 F.3d 707, 711 (9th Cir. 1998). In Stiver v. Olsten Kimberly Quality Care, Inc., 24 Fed. Appx. 666 (9th Cir. 2001), the court stated that, while it was "sensitive to the difficulties caused by uncooperative counsel" and that counsel had acted "negligently" and demonstrated "a lack of professional courtesy," it declined to find bad faith. Id. at 668; see also Cruz v. Savage, 896 F.2d 626, 630 (1st Cir. 1990) ("[C]onduct sanctioned [under § 1927] should be more severe than mere negligence, inadvertence, or incompetence."). Furthermore, bad faith may be inferred "only if actions taken are so completely without merit as to require the conclusion that they must have been undertaken for some improper purpose, such as delay." Salovaara v. Eckert, 222 F.3d 19, 35 (2d Cir. 2000).
GNC argues that it should be awarded one-third of the attorney's fees it incurred pursuant to § 1927 because of litigation misconduct by Mr. Hoffman (including frivolous motion practice and obstructive discovery tactics) and filing frivolous claims (FEHA and California Business Profession Code §§ 17200 and 17203).
First, examples of Mr. Hoffman's alleged misconduct include late arrival to meetings, failure to attend the initial case management conference, refusal to provide witness disclosures, filing a frivolous motion to compel (frivolous because GNC had already agreed to produce the documents at issue), revoking Ms. Navarro's medical records release, and interfering with GNC's deposition of Ms. Navarro. See Mot. at 7-9. While an attorney's litigation misconduct might under certain circumstances lead to multiplied proceedings, GNC has not demonstrated that Ms. Navarro's counsel multiplied proceedings in the instant case that rises to the level found sufficient in the case law. Late arrivals, for example, are not uncommon in litigation; GNC has not alleged a pattern-or-practice of late arrivals by Mr. Hoffman. Similarly, discovery battles are to be expected in litigation; GNC has not demonstrated that Mr. Hoffman has engaged in a pattern of taking positions in discovery disputes that had no justification. GNC has not demonstrated Ms. Navarro's counsel has engaged in bad faith efforts for an improper purpose.
While it appears that Mr. Hoffman's conduct may have been both frustrating and sometimes disruptive, GNC presents no evidence that Mr. Hoffman's alleged litigation misconduct was in bad faith and rose to the level identified by courts as worthy of sanctions — e.g., acting in contravention of court orders, continuing to litigate issues despite an explicit ruling to the contrary, or pursuing claims previously determined by the court to have no legal remedy. The Court further notes that, at no time did GNC pursue discovery sanctions under Federal Rule of Civil Procedure 37. If Mr. Hoffman had obstructed discovery without substantial justification, that would have been the appropriate vehicle to pursue monetary sanctions.
Second, while Ms. Navarro's FEHA claim was frivolous, GNC has again made no allegation of bad faith. In any event, GNC has failed to prove it incurred any fees in responding to the claim
Third, GNC argues that the §§ 17200/17203 claim was brought in bad faith and vexatiously multiplied proceedings. On April 23, 2004, Judge Armstrong issued an order granting GNC's motion for summary judgment with respect to the UCL claim. Judge Armstrong noted as a preliminary matter that Ms. Navarro's claim for attorney's fees is precluded as a matter of law. One of Ms. Navarro's theories underlying the UCL claim was that GNC, as the employer, had the responsibility of determining whether its employees needed family leave. Judge Armstrong essentially rejected this theory because of well-established case law indicating that it was the employee's responsibility to alert his or her employer of the need for family leave. Given that this theory presented by Mr. Hoffman lacked legal support — and seems to be against clear legal authority — GNC does have an argument that the UCL claim was frivolous, at least with respect to this theory, and therefore Mr. Hoffman multiplied proceedings.
See Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134, 1148 (2003) (stating that attorney's fees are not available under § 17203.).
This partly constituted one of the "pattern-or-practice" claims underlying the § 17200 claim: that GNC failed to train its employees regarding FMLA/CFRA. The other claim was that GNC violated its record keeping requirement. See Order at 16.
GNC also states that even from the outset of the case, Ms. Navarro lacked evidence to support the claim (calling it a "fishing expedition"), and that her counsel continued to litigate it (therefore multiplying proceedings) despite deposition testimony and documentation revealing no pattern or practice by GNC of violating the FMLA or CFRA. GNC does not specifically state what Ms. Navarro or her counsel "knew from the outset." The "continued litigation" appears to constitute pursuing the UCL claim even after (1) Ken Wunchel's deposition testimony and other discovery uncovered factual evidence stating that FMLA/CFRA related records are kept and (2) it was clear that under the law it is the employee's obligation to notify employer of need to leave and that nothing in FMLA requires employer response to employee request within ten days.
While GNC makes no specific allegations, it seems to infer bad faith based on the fact that either (1) Mr. Hoffman should not have continued to litigate the claim after Mr. Wunchel's testimony about FMLA practices and/or (2) Mr. Hoffman knew (or should have known) from the beginning the absence of a legal foundation regarding the claim that (a) it is not the employee's responsibility to notify of employer of family medical leave and that (b) no "ten day requirement" exists for an employer to respond to an employee's request for information under the FMLA.
Had counsel for Ms. Navarro continued to litigate long after Mr. Wunchel's deposition which uncovered facts contradicting her position, perhaps an inference of bad faith might be warranted. But the claim was dismissed the following month on summary judgment. The only possible inference of bad faith arises from the lack of any legal foundation to support the UCL claim. However, it does not appear that the law was so specific and clear as to make the assertion of the claim an obvious act of bad faith. This is not a case where the plaintiff persisted in pursuing a claim after it was made clear by the Court that it was meritless, the paradigm example of bad faith.
Finally, even if the Court were to determine that Mr. Hoffman's various acts of misconduct constituted the vexatious/unreasonable multiplication of proceedings (and assuming bad faith), § 1927 "only authorizes the taxing of excess costs arising from an attorney's unreasonable and vexatious conduct." Blodgett, 709 F.2d at 610-11 (emphasis added). GNC offers no explanation as to why it is entitled to one-third of its attorney's fees given this fact, nor does GNC provide any reference to specific times or events when the multiplication of proceedings began. It has provided no specific factual support for its attorney's fee claim.
2. Attorney's Fees Under Rule 11
GNC argues next that it should be awarded one-third of the attorney's fees it incurred during the litigation pursuant to Rule 11. Rule 11(b) provides that,
[b]y presenting to the court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, —
(1) it is not being presented by any improper purpose . . .
(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
(3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted or, if specifically so identified, are reasonably based on a lack of information or belief. Fed.R.Civ.P. 11(b). Rule 11(c) provides that a court may sanction an attorney and/or party for violating subdivision (b). See Fed.R.Civ.P. 11(c). "Courts must apply an objective test in assessing whether the rule has been violated. A violation of the rule does not require subjective bad faith." Yagman v. Republic Ins., 987 F.2d 622, 628 (9th Cir. 1993).
According to GNC, Ms. Navarro and/or her attorney violated Rule 11(b) in two ways: (1) by including the baseless FEHA and UCL claims in her complaint and (2) by filing a frivolous motion to compel — frivolous because GNC had already agreed to produce the documents at issue. See Mot. at 13-14. Each argument is addressed below.
3. Including FEHA and UCL Claims in Complaint
Even if the FEHA and UCL claims were baseless, that does not mean that GNC should be entitled to attorney's fees. GNC has failed to meet procedural requirements for making a Rule 11 motion for sanctions.
Rule 11(c)(1)(A) provides that
sanctions under this rule . . . shall be served as provided in Rule 5, but shall not be filed with or presented to the court unless, within 21 days after service of the motion (or such other period as the court may prescribe), the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected.
Fed.R.Civ.Proc. 11(c)(1)(A). This is often known as the "safe harbor" provision.
It is clear from the language of the rule that it imposes mandatory obligations upon the party seeking sanctions, so that failure to comply with the procedural requirements preclude the imposition of the requested sanctions.
Rule 11(c)(1)(A) thus establishes conditions precedent to the imposition of sanctions under the rule. If those conditions are not satisfied, the Rule 11 motion for sanctions may not be filed with the district court. If a non-compliant motion nonetheless is filed with the court, the district court lacks authority to impose the requested sanctions.Brickwood., 369 F.3d at 389.
A court may also sua sponte impose sanctions pursuant to Rule 11(c)(1)(B) and in doing so need not comply with the safe harbor procedural requirements. See Brickwood Contractors, Inc. v. Datanet Eng'g, Inc., 369 F.3d 385, 389 n. 2 (4th Cir. 2004).
In the instant case, there is no evidence that GNC served its Rule 11 motion on Ms. Navarro twenty-one days before filing it with the Court. Moreover, because GNC waited until after summary judgment had been rendered on the UCL claim to make any motion for sanctions, Ms. Navarro was not given the opportunity to withdraw or otherwise correct her claim. Under such circumstances, a Rule 11 motion is untimely. See Barber v. Miller, 146 F.3d 707, 711 (9th Cir. 1998) ("[W]e agree with the Sixth Circuit that "'a party cannot wait until after summary judgment to move for sanctions under Rule 11.'").
A district court in Virginia did conclude that a Rule 11 motion should not be rejected for a failure to comply with the safe harbor provision but under distinguishable circumstances in which a waiver of the provision was found. See Joseph Giganti Veritas Media Group, Inc. v. Gen-X Strategies, Inc., 222 F.R.D. 299, 306-07 (E.D. Va. 2004) ("Plaintiffs never had any intention of withdrawing any of the challenged claims, nor of availing themselves of the protection of the safe harbor provision. Put differently, by choosing to remain steadfast in their support of the offending claims during the hearing on the motion to dismiss, even in the face of defendants' cited authorities and the Court's suggestion that the RICO and Sherman Act claims might well violate Rule 11, plaintiffs, by counsel, knowingly waived the benefit of the twenty-one day period and knowingly waived any right to complain about loss of no more than approximately five hours of the twenty-one day period.").
The Court notes that the Ninth Circuit has held in one case that a district court did not abuse its discretion in allowing a Rule 11 motion even though it was filed after judgment. See Community Elec. Serv., Inc. v. National Elec. Contractors Ass'n, Inc., 869 F.2d 1235, 1242 (9th Cir. 1989) (stating that "[t]he timeliness of the Rule 11 motion rests within the judge's discretion" and concluding that the district court did not abuse its discretion by allowing the Rule 11 motion "filed within 30 days of the entry of judgment, the time required to request attorney's fees"). But the court did not adopt a per se rule allowing such motions and instead emphasized that the matter was left to the discretion of the district court: "Although we agree with that court's concerns regarding early notification and the efficient use of judicial resources, we believe these matters rest properly within the sound discretion of the trial judge." Id. This Court believes that the fairness considerations which underlie the safe harbor provision should bar the claim here.
The fact that Ms. Navarro failed to make the timeliness argument does not preclude its application. Although a party can forfeit the right to argue a failure to comply with Rule 11's safe harbor provision, see Brickwood, 369 F.3d at 395 ("[T]he issue of whether a party has complied with the rule [ i.e., Rule 11(c)(1)(A)] is subject to forfeiture if not timely raised."), the Ninth Circuit has indicated that the matter is subject to some discretion. See Retail Flooring Dealers of America v. Beaulieu of America, LLC, 339 F.3d 1146, 1150 n. 5 (9th Cir. 2003) ("Although Retail Flooring did not raise this argument before the district court [ i.e., failure to comply with Rule 11's safe harbor provision], an appellate court can review an issue not raised nor objected to prior to appeal if necessary to prevent manifest injustice."); see also Brickwood, 369 F.3d at 398-99 ("[G]iven the important purposes served by Rule 11(c)(1)(A) and the mandatory nature of its language, we believe that in most cases involving failure to comply with the safe-harbor provisions, a proper application of the Olano-Taylor standards [ i.e., plain error on appeal] will lead to correction of the error."). But see Rector v. Approved Fed. Sav. Bank, 265 F.3d 248, 251-54 (4th Cir. 2001) (holding that the safe harbor provision was not jurisdictional and that the attorney waived the defense when he failed to raise the argument to the district court in the first instance and he failed to raise it on the first appeal).
4. Filing a Frivolous Motion to Compel
GNC also asks for attorney's fees based on Ms. Navarro's filing of what GNC calls a frivolous motion to compel. The motion to compel at issue appears to be the one located at Docket Nos. 69-70 (filed on April 9, 2004). In the motion, Ms. Navarro argued that GNC failed to produce records that were requested pursuant to two deposition notices for corporate designees. The records were relevant to the UCL claim. For example, Ms. Navarro asked for records relating to requests made by other GNC employees in the Bay Area for leave under CFRA or FMLA from 1993 to the present. See Mot. at 3 (Docket No. 70, Ex. A). In the motion, Ms. Navarro articulated both of the pattern-and-practice claims that Judge Armstrong later dismissed on summary judgment.
By the time that GNC filed its opposition to the motion to compel (Docket No. 113), the motion was moot because Judge Armstrong had dismissed the UCL claim (both pattern-and-practice claims) on summary judgment. GNC made this point in its opposition but also argued that, even before the order on summary judgment, the motion to compel was meritless because GNC had already "expressly agreed to produce the requested documents, and had, in fact, start[ed] a rolling production of documents before Plaintiff filed her motion to compel." Opp'n at 1-2 (Docket No. 113). A rolling production was necessary because of the alleged breadth of the document requests. See Holland Decl. ¶ 6 (Docket No. 114).
GNC added that it had "repeatedly advised Plaintiff that it planned to produce the remaining documents once the parties entered into an appropriate protective order, as Plaintiff [sought] documents containing confidential and privileged information relating to GNC employees who are not parties to this lawsuit." Opp'n at 2. However, according to GNC, Ms. Navarro never provided a draft protective order even though her counsel specifically agreed to do so. "Instead of simply providing GNC with a draft protective order, Plaintiff [brought] this motion to compel . . ." Opp'n at 3. GNC did produce some documents to Ms. Navarro without a protective order, but the documents produced were redacted to protect employee confidentiality. See Holland Decl. ¶ 9.
Ms. Navarro never makes clear why she did not prepare a protective order for GNC's consideration, which probably did delay things. Even so, the problem for GNC is that it was not wholly unreasonable (and thus frivolous) for Ms. Navarro to move forward with the motion to compel even though GNC had said it would be producing documents. First, arguably, it was not enough for GNC to simply promise a rolling production; given that trial was to begin in May 2004, it was not unreasonable for Ms. Navarro to file a motion to compel to ensure that all documents would be produced and by a date certain. Second, and more important, the documents that GNC was willing to produce were more limited in nature than the document that Ms. Navarro wanted.
For example, Ms. Navarro wanted GNC to produce for Bay Area employees who had asked for leave under FMLA or CFRA (1) the application, (2) the doctor's certification, and (3) something to show that GNC had designated the employee's leave as FMLA or CFRA. See Mot. at 4. It appears that GNC produced some but not all of these documents, as reflected in one of its meet-and-confer letters, which said: "The documents that we have produced to you . . . include actual confirmation that the employees were certified for FMLA leave — that could not have happened without the submission of an application and a doctor's certification." Holland Decl., Ex. E (also stating that "[t]he records we have already agreed to produce contain the information you want"). This letter thus suggests that GNC produced documents in category (3) but not necessarily those in (1) and (2).
In addition, Ms. Navarro wanted GNC to produce documents related to the termination of GNC employees under the supervision of Loraine Crisp and documents related to the termination of GNC employees in the Bay Area whose terminations were related to absences, attendance, or "no call, no shows." In a meet-and-confer letter, GNC stated that it had
compiled spreadsheets that include information about employees who left the company as a result of job abandonment or excessive absence between January 1, 1993[,] and March 5, 2004. . . . Once we have a protective order in place, we will provide you with those spreadsheets. You will then be able to compare that list to the FMLA files we have offered to produce to ascertain (1) whether any of the employees were terminated while on or after having requested medical leave, and (2) by looking at the dates and regions, whether that occurred under Ms. Crisp's supervision."
Holland Decl., Ex. E. But what Ms. Navarro wanted was not the spreadsheets but the actual documents themselves. Arguably, the spreadsheets would not have been sufficient because Ms. Navarro should have been able to look at the underlying documents to test the accuracy of the spreadsheets.
Ms. Navarro's motion to compel was thus not so frivolous so as to justify Rule 11 sanctions.
5. Attorney's Fees Pursuant to Court's Inherent Powers
Finally, GNC argues that it is entitled to attorney's fees — more specifically, one-third of the fees it incurred during the litigation — pursuant to the Court's inherent powers. "Because of their very potency, inherent powers must be exercised with restraint and discretion." Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991). The Ninth Circuit has stated that sanctions pursuant to a court's inherent powers "'are available if the court specifically finds bad faith or conduct tantamount to bad faith.'" B.K.B. v. Maui Police Dep't, 276 F.3d 1091, 1108 (9th Cir. 2002); see also Fink v. Gomez, 239 F.3d 989, 993 (9th Cir. 2001) (noting that "bad faith is required for inherent power sanctions"). Notably, "a finding of bad faith does not require that the legal and factual basis for the action prove totally frivolous; where a litigant is substantially motivated by vindictiveness, obduracy, or mala fides, the assertion of a colorable claim will not bar the assessment of attorney's fees." Id. at 992. In addition, "mere recklessness, without more, does not justify sanctions under a court's inherent power;" however, "[s]anctions are available for a variety of types of willful actions, including recklessness when combined with an additional factor such as frivolousness, harassment, or an improper purpose." Id. at 993-94; see also Roadway Express, Inc. v. Piper, 447 U.S. 752, 766 (1980) (holding that federal courts have inherent power to levy sanctions for "willful disobedience of a court order . . . or when the losing party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons").
Because sanctions pursuant to a court's inherent powers requires a finding of bad faith or something tantamount to bad faith, the analysis for this section is substantially the same as that for the section on § 1927. For those same reasons, the Court rejects GNC's argument.
C. Conclusion
In conclusion, GNC has not provided sufficient evidence that it should be awarded attorney's fees. While Ms. Navarro's FEHA arguments may be regarded as frivolous, in the absence of any specific documentation of attorney time spent defending the FEHA claim, the Court cannot recommend an award of fees to GNC.
GNC has also not provided sufficient evidence to warrant sanctions under § 1927, Rule 11, or the Court's inherent powers. While there is some evidence that Ms. Navarro's counsel may have been less than cooperative and caused some inefficiencies at times, GNC has not met the requisite substantial showing needed for § 1927 sanctions. Failure to follow procedural requirements precludes sanctions under Rule 11. GNC did not demonstrate sufficient bad faith for an award pursuant to the Court's inherent powers.
IV. CONCLUSION
For the above reasons, this Court recommends that $212,277.80 in fees and expenses be awarded to Ms. Navarro and that GNC's motion for fees be denied.