Beryl v. Navient Corporation

Background

Navient Corporation acquired Beryl’s online student-lending company, Earnest, Inc., for $155 million and hired Beryl and his team to run Earnest LLC, a new Navient entity. Navient later fired Beryl. He sued for breach of his employment contract and benefits under an executive-severance plan.

A jury found for Beryl on his contract and estoppel claims and awarded $400,000 in severance, a $400,000 bonus, $1 million in restricted stock units, and $1.3 million in performance cash units. The court later reduced the performance-cash-unit award to $350,000. The court also awarded Beryl $920,666.33 for benefits due under the Employee Retirement Income Security Act (ERISA) executive-severance plan and waiting-time penalties under California Labor Code section 203.

Beryl sought attorney’s fees based on 976.95 hours of work, including a $1,200 hourly rate for Jonathan Sack and $600 hourly rates for Daniel Muller and Queenie Paniagua. After a five-percent reduction, the requested lodestar—the hours reasonably worked multiplied by reasonable hourly rates—was $737,580. Beryl requested a 1.6 multiplier, $1,649,991.54 in prejudgment interest, and $32,581.25 in costs.

Navient’s objections

Navient did not challenge Beryl’s entitlement to fees and costs. It argued that the motion should be denied because counsel had not properly conferred under the court’s local rules. It also argued that Sack’s hourly rate should be reduced from $1,200 to $800, that the hours should be reduced by 30 percent because of block billing and inflated time, that no multiplier was warranted, that travel, lodging, and electronic-research costs should be disallowed, and that prejudgment interest should be recalculated after the reduction in the performance-cash-unit award.

Court’s analysis and ruling

The court found no procedural default under the local rules. Counsel had attempted to confer after Navient filed its opposition, which the court found sufficient in the circumstances.

The court awarded Sack’s $1,200 hourly rate. It relied on declarations about prevailing rates, Sack’s experience, comparable rates in the district, and the nature of the executive-compensation and employment litigation. The court also found the billed hours reasonable. It found that the records did not improperly combine multiple tasks, that Muller adequately explained his personal review of documents, that the time spent was appropriate, and that Beryl’s five-percent across-the-board reduction addressed duplication.

The court applied a 1.2 multiplier rather than the requested 1.6 multiplier. It concluded that the case’s executive-compensation issues, counsel’s skill, and the contingent nature of the representation supported a multiplier, while the record did not show that the case prevented counsel from taking other work. Applying 1.2 to the $737,580 lodestar produced $885,096 in attorney’s fees.

Because the court had previously reduced the performance-cash-unit award from $1.3 million to $350,000, it directed the parties to confer and submit an updated prejudgment-interest calculation within seven days. The court found the requested travel, lodging, and electronic-research expenses reasonable and awarded the full $32,581.25 in costs.

Disposition

The court awarded the hourly rates and hours billed, applied a 1.2 multiplier, awarded the costs, directed the parties to recalculate prejudgment interest within seven days, and directed them to submit a proposed form of order reflecting those amounts. The order disposed of Beryl’s attorney-fee motion, ECF No. 114.