Obrien v. FCA US LLC

Background

Kristi M. O’Brien and John D. O’Brien brought claims against FCA US LLC under the Song-Beverly Consumer Warranty Act, a California law governing consumer warranties. They alleged problems with their 2012 Jeep Grand Cherokee, including transmission and electrical issues connected to its Totally Integrated Power Module. The action was removed from state court to federal court based on diversity jurisdiction.

FCA offered to pay $152,000 plus reasonable attorneys’ fees and costs in a settlement offer made under Federal Rule of Civil Procedure 68. The plaintiffs initially rejected the offer but accepted it on April 5, 2019. Before acceptance, their attorneys conducted additional discovery and prepared for trial. The court had previously granted summary judgment for FCA on the plaintiffs’ punitive-damages claim after excluding both of the plaintiffs’ experts because the plaintiffs did not meet the deadline for submitting an expert report.

The plaintiffs sought $107,718.75 in attorneys’ fees, consisting of a $71,812.50 lodestar—the basic fee calculated from reasonable hours and hourly rates—plus a 0.5 multiplier, and $15,953.16 in costs. FCA opposed the requested fees and costs on several grounds, including excessive time, unreasonable rates, work performed after the settlement offer, duplicative staffing, and unsupported or unrecoverable costs.

Attorneys’ Fees

The court applied California law. Under the Song-Beverly Act, a buyer who prevails may recover attorneys’ fees and costs that the court finds were reasonably incurred. The court concluded that the plaintiffs were prevailing parties because they achieved the main objective of their litigation through the settlement.

The court found that the total time billed was unreasonable in part. FCA’s settlement offer did not automatically end the plaintiffs’ right to seek fees and costs, but it was relevant to whether later work was reasonable. The plaintiffs accepted the offer nearly a year after it was made and received no additional benefit from the litigation during that period. The court therefore reduced by 70 percent the lodestar for work performed between May 5, 2018, and April 5, 2019.

The court also eliminated 15.5 hours of anticipated work by Erik K. Schmidt because the plaintiffs did not provide supporting documentation. It declined to reduce fees for attorney travel, the use of two law firms, multiple attorneys, or HDMN’s use of 15-minute billing increments. The court found that the billing records did not show excessive staffing or excessive time from those practices.

The court adjusted several hourly rates. It declined to award fees for work billed by Ilan Isaacs and Michael Morris-Nussbaum because the plaintiffs did not provide enough evidence to establish reasonable rates for their work. It reduced Lauren B. Veggian’s rate from $350 to $325 per hour and Russell Higgins’s rate from $450 to $400 per hour. It applied other rates discussed in the opinion based on prior fee determinations and the court’s assessment of reasonable rates.

After these adjustments, the court calculated a reasonable lodestar of $29,196.25. It denied the plaintiffs’ request for a 0.5 positive multiplier. The court found that the case was not particularly novel or complex and that the awarded rates adequately compensated counsel for the contingent nature of the representation and any delay in payment.

Costs

The plaintiffs requested costs for items including filing, service, depositions, expert witnesses, mediation, travel, and other litigation expenses. FCA argued that many of these costs were not allowable under federal cost statutes and local rules, and that some were excessive.

The court rejected FCA’s argument that the plaintiffs’ costs were limited to items recoverable under federal law. It also rejected FCA’s objection to the cost of serving multiple deposition subpoenas because FCA did not provide evidence that the subpoenas could have been served more cheaply. But, for the same reason it reduced post-offer attorneys’ fees, the court reduced by 70 percent the costs incurred after May 4, 2018.

Disposition

The court granted in part and denied in part the plaintiffs’ Motion for Attorneys’ Fees, Costs and Expenses. It awarded $29,196.25 in attorneys’ fees and $5,975.63 in costs, for a total award of $35,171.88. The order was signed by Judge Joseph C. Spero on October 18, 2019.