Slashed Fees Award Puts Lawyers in a Tizzy

     PASADENA, Calif. (CN) – An attorney on Tuesday urged the 9th Circuit to award more than $1 million to civil rights attorneys who challenged abuses from the now-dismantled Maywood Police Department.
     Maywood, pop. 29,000, is part of the Los Angeles metroplex.
     Attorneys challenged a 2011 federal ruling that cut fees for settling eight consolidated civil rights complaints against Maywood. The court reduced the fees by 75 percent, to $473,138.24.
     Multiple plaintiffs in 2008 challenged unconstitutional tactics by the Maywood police.
     The consolidated complaints alleged civil rights and RICO violations, accusing Maywood police of racial profiling and extorting people for sex, kickbacks and bribes. They also claimed the city ran an unlawful towing scheme.
     Settlement was reached on the eve of trial. Maywood paid roughly $1.5 million, $500,000 of it to the plaintiffs. The $1 million for attorneys was about half the amount they initially estimated in fees.
     At a 2011 hearing, U.S. District Judge Otis Wright censured counsel for requesting more in attorney fees than the plaintiffs received in the settlement.
     In a 33-page order later that year, Wright reduced the fee award to $473,138.24, imposing an across-the-board reduction of counsel’s rates.
     Wright found that the attorneys performed poorly for their clients and charged unreasonable fees, calling out counsel for “impossible and ridiculous” billing, and finding that one paralegal billed for 60 hours in one day – more “than are humanly possible.”
     On Tuesday morning, Paul Hoffman, with Schonbrun DeSimone Seplow Harris Hoffman & Harrison, of Venice, asked the 9th Circuit panel to overturn Wright’s ruling.
     Hoffman claimed Wright made “numerous legal and factual errors,” and committed an “impropriety” by capping fees at the amount of the underlying $500,000 settlement.
     “He used words that go pretty far in saying that there was no way he was ever going to give us fees that exceeded our clients’ settlement in the case, which is an absolute improper limit on fees,” Hoffman said in court.
     Judge Ronald Gould, appearing via video link-up, asked Hoffman how the court should approach the billing errors cited in Wright’s order.
     Hoffman said that Wright had found improperly that counsel worked only 1,400 hours. That reduced by tens of thousands of hours the actual time spent litigating the case, Hoffman said.
     In contrast, defendant’s counsel was paid $3 million for 17,000 hours of work, Hoffman said.
     Designated U.S. District Judge Sharon Gleason asked: “So, is it your position, with regard to defendant’s fees, that the trial court would abuse its discretion not to consider those?”
     “Yes,” Hoffman said.
     He called it a “hotly litigated” and complex case, and said it was “absurd” that he “only could spend 8 percent of what the defendants’ did.”
     Attorneys need reasonable fees to tackle civil rights cases that are difficult to litigate and settle, Hoffman said. He said the settlement was fair.
     “When the judge says we ripped off our clients or something, I don’t know where he’s coming from,” Hoffman said.
     City of Maywood attorney Richard Semon, with The Augilera Law Group of Costa Mesa, claimed that Judge Wright had broad discretion to determine the market rate for attorney fees and whether the fees were reasonable.
     The “cases were poorly litigated,” Semon claimed, noting that it took the plaintiffs more than two years to file an operative complaint.
     Judge Norman Randy Smith, however, was more concerned about the absence in Wright’s ruling of prevailing market rates.
     “If he didn’t make an error, where do I ever find that he made a finding about a prevailing rate?” Smith asked. “I never saw a prevailing rate made.”
     Semon seemed rattled. Unable to point to anything in the record, he cited Wright’s order, while arguing, somewhat vaguely, that the court had been “very generous.”
     “The court is correct here that Judge Wright never says, ‘And this is what I knew to be the prevailing rate.’ He doesn’t use that sentence. But by my reading of it, it’s clear that he ends up saying this is what the rate is,” Semon said.
     Smith was not persuaded. He voiced concern over other aspects of Wright’s determination, including across-the-board reductions, and Wright’s justification for reducing the “lodestar” amount requested by attorneys after they calculated their fees.
     “We don’t say, ‘Just throw out for crapshoot whatever you want to put together,’ and then say that fee’s reasonable, and we’re supposed to bless it,” Smith told an attorney for two Maywood officers, Brian Keighron with Wisotsky, Procter & Shyer of Oxnard.
     During rebuttal, Hoffman said that if remanded, the judge should compare the defendant’s hours to determine reasonable fees.
     “I hope you’re not really going there,” Smith said. Smith said Wright had the discretion to reduce fees, and that there was no case law which “says you have to look at the defendant’s hours.”
     Hoffman urged the court to skip remand, and grant the $1 million fee award.
     One of the smallest incorporated cities in Los Angeles County, Maywood dismantled its police department in 2010, and dismissed most city employees, in response to legal and financial issues. It now outsources nearly all city services to contractors.

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