2012-00119161-CU-OE

Janis S McLean vs. State of California

Nature of Proceeding: Motion for Attorney Fees

Filed By: Darden, William T.

Defendants State of California, et al.’s motion pursuant to Labor Code §218.5 for
attorney fees as the prevailing party in this action is GRANTED in the amount of
$37,060, representing 218 hours at the reasonable hourly rate of $170.

This litigation is a class action brought by a former employee of the State of California
who has alleged that defendants violated Labor Code §202 and that the class members are entitled to relief under Labor Code §203, which provides for a “penalty”
st
as a result of violating §202. (See, Compl. filed 2/22/2012, ¶¶1, 2, 13; 1 Am. Compl.
filed 11/9/2012, ¶¶1, 2, 13.) On 5/23/2013, this Court sustained without leave to
st
amend defendants’ demurrer to the 1 Amended Complaint and judgment thereon was
entered on 7/9/2013. Shortly thereafter, plaintiff filed a notice of appeal and it appears
this appeal is still pending.

On 8/9/2013, defendants filed the present motion for attorney fees as the prevailing
party in this action and based on the attorney fee provision in Labor Code §218.5.
Defendants originally requested an award of $86,361.25, representing 292.75 hours of
attorney time at an hourly rate of $295 but in their supplemental reply discussed below,
defendants reduced their request to $76,478.75, representing 259.25 hours of attorney
time at an hourly rate of $295.

Plaintiff filed an opposition, arguing first that the present motion is “unnecessary” and
“premature” and should be deferred while the underlying judgment is being reviewed
by the Court of Appeal. (Oppos., p.5:2-p.6:23.) The opposition next asserts that the
motion should be denied because the present action does not seek any “unpaid
wages” as required for an award of fees under Labor Code §218.5 and as support for
this assertion, plaintiff relies primarily on two recent California Supreme Court
decisions, Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244 and Pineda v.
Bank of America (2010) 50 Cal.4th 1389. Finally, plaintiff insists that the $295 hourly
rate sought by defendants is unreasonable and that the number of hours spent on this
matter were “unnecessary, inefficient and should not be compensated.” (Oppos.,
p.10:2-p.15:16.)

The hearing on this motion was originally set for 9/6/2013 but it was continued for
further briefing because defendants’ summaries of the hours spent by the three
different attorneys during a particular month did not provide plaintiff or this Court with
sufficient information to prepare a meaningful opposition to or a meaningful ruling on
this motion.

According to plaintiff’s supplemental opposition, the billing records provided by
defendants show that the attorney fees requested are “overstated by $9,882.50” and
that defendants spent “over 50 hours…on the attorneys’ fees motion before filing the
opening papers” plus “close to 14 additional hours on the reply.” (Supp. Oppos., p.1:3-
6, 22-25.) The remainder of the supplemental opposition reiterates the request for a
stay while the appeal is pending and the argument that attorney fees pursuant to Labor
Code §218.5 are not properly awarded in an action seeking only penalties under §203.

Defendants’ supplemental reply responds to the supplemental opposition but
concludes with a reduced request for an award of $76,478.75 in attorney fees,
representing 259.25 hours of attorney time at an hourly rate of $295.

At the outset, the Court notes that plaintiff has cited no authority which compels
deferring a ruling on the present motion for fees even when there is pending an appeal
of the underlying judgment. Accordingly, the Court declines the invitation to “stay” this
action until the appeal is resolved.

The threshold question here is whether Labor Code §218.5’s provision for an award of
fees is even applicable to this case. Labor Code §218.5 provides in pertinent part:
“In any action brought for the nonpayment of wages, fringe benefits, or health
and welfare or pension fund contributions, the court shall award reasonable
attorney’s fees and cost to the prevailing party if any party to the action requests
attorney’s fees and costs upon initiation of the action.” (Emphasis added.)

Plaintiff contends this action does not seek to recover any ‘unpaid wages’ but rather
only ‘penalties’ under Labor Code §203 for defendants’ alleged failure to make timely
payment of wages to class members, §218.5 is simply inapplicable to the present
case. However, this contention that §218.5 does not apply here must be and is
rejected.

First, plaintiff’s reliance on the 2010 Supreme Court decision in Pineda v. Bank of
America is misplaced because that decision addressed and resolved only two narrow
issues: (1) What statute of limitations applies when an employee seeks to recover
only penalties under Labor Code §203, rather than seeking both final wages and
penalties; and (2) are §203 penalties recoverable as “restitution” under California’s
unfair competition law. (Pineda, at 1393.) Neither of these two issues has any bearing
on the present case and thus, Pineda requires no further discussion since it is well
established that a decision cannot be cited as authority for a proposition not
considered therein. (See, e.g., McWilliams v. City of Long Beach (2013) 56 Cal.4th
613, 626.)

Second, the Court finds that plaintiff’s assertion is directly contrary to the Supreme
Court’s language in its 2012 decision of Kirby v. Immoos Fire Protection, Inc. There,
the High Court considered whether the plaintiffs’ claims that their employer failed to
provide rest breaks as required by Labor Code §226.7 could be the basis for an award
of attorney fees to the employer under §218.5 given that the remedy for a violation of
§226.7 is “one additional hour of pay…” (Kirby, at 1248.) Although the court of appeal
was ultimately reversed on this issue, the Supreme Court’s analysis included the
following:

“[Labor Code §226.7] is not aimed at protecting or providing employees’ wages.
Instead, the statute is primarily concerned with ensuring the health and welfare
of employees by requiring that employers provide meal and rest periods as
mandated by the IWC. [Cites.] When an employee sues for a violation of
[§226.7], he or she is suing because an employer has allegedly ‘require[d] [the]
employee to work during [a] meal or rest period mandated by an applicable
order of the [IWC].’ (§ 226.7(a).) In other words, a 226.7 action is brought for
the nonprovision of meal and rest periods, not for the ‘nonpayment of
wages.’ [¶] [Labor Code §201 and §202] provide a useful contrast to section
226.7. Section 201 provides that when ‘an employer discharges an employee,
the wages earned and unpaid at the time of discharge are due and payable
immediately’ (§201, subd. (a)), and section 202 provides that when an
‘employee has given 72 hours previous notice of his or her intention to quit, …
the employee is entitled to his or her wages at the time of quitting’ (§202, subd.
(a)). When an employee sues on the ground that his or her former employer
has violated one of these provisions, the suit is an “action brought for the
nonpayment of wages.” (§ 218.5.) In other words, the employer’s nonpayment
of wages is the basis for the lawsuit. By contrast, when an employee sues on
the ground that his or her employer has violated section 226.7, the basis for the
lawsuit is the employer’s nonprovision of statutorily required rest breaks or meal
breaks.” (Kirby, at 1255-1256 (italics in original, underline added for emphasis).)
st
In the present case, the complaint and the 1 Amended Complaint both specifically
st
assert that defendants violated Labor Code §202. (See, Compl., ¶¶1, 2, 13; 1 Am.
Compl., ¶¶1, 2, 13.) Consequently, even if defendants themselves did not cite the
above-quoted passage, this Court has little doubt that plaintiff’s suggestion of §218.5
being inapplicable is incorrect. To be sure, the Supreme Court even explained that
§218.5’s phrase “action brought for” does not lead to a different conclusion merely
because plaintiff here claims to seek only “penalties” under §203. (See, Kirby, at 1256
[§218.5’s phrase ‘action brought for’ means something different from what the phrase
means when it is coupled with a particular remedy (e.g., ‘action brought for damages’
or ‘action brought for injunctive relief’). … The words ‘nonpayment of wages’ in
[§218.5] refer to an alleged legal violation, not a desired remedy.” (Emphasis added.)])

Third, plaintiff’s reliance on the Supreme Court affirming in Kirby the Third District’s
ruling that no attorney fees be awarded on the cause of action based on Labor Code
§203 is unavailing. Aside from the fact that the present case alleges defendants
violated §202, not §203, it is clear from the Third District’s now de-published decision
that the Court never actually considered or attempted to resolve the question of
whether a claim based on either §202 or §203 gave rise to attorney fees under §218.5.
Thus, the fact that the Supreme Court otherwise affirmed the Third District’s ruling
does nothing to advance plaintiff’s position.

Holding that the claims alleged in the present case give rise to attorney fees pursuant
to Labor Code §218.5, the Court must now consider whether the amount of fees
claimed by defendants is both reasonable and necessary. Plaintiff objects to the
asserted hourly rate of $295 when defendants’ moving papers admit the actual hourly
rate charged on this matter was only $170. Although there may be authority to support
a rate higher than the one actually charged, this Court is not persuaded that this is
justified here even though defendants’ current lead attorney may have charged over
$400 per hour when in private practice. Instead, the $170 hourly rate should apply and
this alone reduces the attorney fees claimed from nearly $76,500 to just under
$44,000.

According to the supplemental declaration of attorney Darden, he billed roughly 55.5
hours to research and draft the moving papers supporting the present motion plus
another 13.75 reviewing the opposition and preparing the reply brief. The Court finds
that both amounts are unreasonably excessive and permit the recovery of only 20
hours for preparation of the moving papers and only eight (8) for the reply. In other
words, of the 69.25 total hours claimed in connection with this motion, 41.25 hours are
disallowed.

In light of the foregoing and coupled with plaintiff’s failure to challenge any other
specific billings submitted by defendants, the Court fixes the attorney fees to which
defendants are entitled at $37,060, representing 218 hours (259.25 total hours claimed
minus 41.25 in connection with this motion) all at the reasonable hourly rate of $170.

This minute order is effective immediately. Pursuant to CRC Rule 3.1312, counsel for
defendants to prepare formal order and proposed amended judgment reflecting this
award of attorney fees.