In Concepcion v. Amscan Holdings, Inc. et al., — Cal.Rptr.3d —-, 2014 WL 595822 (Cal.App. 2 Dist. Feb. 18, 2014) the California Court of Appeal rejected class counsel’s fee award where class counsel’s billing records were provided to the trial court for review, but were not provided to the defendant’s counsel.
Concepcion was one of five, virtually identical putative class actions filed against retailer Party City for alleged violations of section 1747.08 of the California Civil Code – part of the Song-Beverly Credit Card Act of 1971. The plaintiffs in these actions alleged that Party City impermissibly required customers to provide ZIP Code information to complete credit card purchases. All five lawsuits were mediated jointly.
The mediation produced a class settlement wherein Party City agreed to issue a total of $300,000 in merchandise certificates and to bear all costs of class notice and settlement administration. The settlement agreement also provided that class counsel would be entitled to seek recovery of their fees pursuant to a motion.
Class counsel requested an aggregate award of $350,000 in attorneys’ fees. Instead of submitting their billing records, an attorney from each of the five class counsel firms submitted a declaration generally describing the categories of work performed and stating the total hours of work performed by firm attorneys, the specific number of hours worked by each attorney, and their respective billing rates. Party City agreed class counsel was entitled to fair compensation but argued the fees and costs claimed were excessive, the time charges duplicative, and the declarations inadequate and subject to proper evidentiary objections.
The trial court allowed class counsel to provide further evidence that the hours claimed were “necessary and nonduplicative” and requested that class counsel provide “the detail of hours expended” for in camera review. After all but one of the class counsel firms provided the trial court with their billing records for in camera review, the court awarded all requested fees.
The Court of Appeal noted the trial court’s obligation to refrain from “rubberstamping” a fee request and instead to “determine the number of hours reasonably expended” by counsel. But the Court also stated that “with respect to the amount of fees awarded, there is no question our review must be highly deferential to the views of the trial court.”
The Court ultimately reversed the fee award and remanded the matter for further proceedings because the award was based, at least in part, on evidence Party City’s counsel was not privy to – class counsel’s billing records. “[O]nce class counsel presented evidence to support their fee request, Party City was entitled to see and respond to it and to present its own arguments as to why it failed to justify the fees requested.”
Concepcion can certainly be cited for the proposition that any evidence submitted in support of a motion for attorney’s fees must be provided to all parties. But, based on the generally skeptical tone of the opinion, the Court of Appeal also seems to implicitly encourage trial courts to take seriously their obligation to “determine the number of hours reasonably expended” by class counsel to guard against multiple sets of class counsel being compensated for duplicative and unproductive services.
For further information, please contact Isaiah Weedn at (714) 424-2828.