The question addressed by the Court of Appeal in Hogar v. Community Development Commission is whether you are entitled to fees for those pre-litigation activities.  The court ruled that fees for pre-complaint activities were not precluded under section 1021.5, but that a litigant seeking such fees will “bear a heavier burden of demonstrating how that activity contributed to the success of the litigation.”

The lesson for counsel involved in these actions is to keep accurate records of their time from the first contact with the government agency — even if you are unsure at that point that your client will pursue litigation if those initial contacts are unsuccessful.

The standard for calculating the “lodestar” under section 1021.5 is not the rate the attorney charges.  Instead, “[t]he lodestar figure is calculated using the reasonable rates for comparable legal services in the local community for noncontingent litigation of the same type…” (emphsis in original).

Out of town attorneys can get their higher standard fee only by establishing that local counsel is not available for the case.  Thus, in this action, the San Francisco attorneys will have to settle for Kern County rates — unless they can convince the trial court to add a multiplier on remand.

 ”The State also complains that the court did not make the proper findings on the record under section 1021.5 before awarding Vasquez attorney fees. Where, however, the court was not asked to make findings on factual issues and did not do so, we must infer all findings necessary to support the order on fees and uphold it if it is based on substantial evidence.”

Another portion of the Vasquez case currently before the California Supreme Court will be of great interest to attorneys who rely on fees under Section 1021.5.  In that case, the court will be deciding how far to extend its ruling in Graham v. Daimler-Chrysler, requiring a pre-litigation settlement offer in order to recoup attorney fees in certain instances.

The court in Estrada v. Fedex Ground did not issue any new rules or particular guidelines.  It did comment, however, that the trial court “[in recalculating an appropriate award on remand … must determine anew whether any multiplier is appropriate in this case” in light of both the limited success andthe fact that the fee award without the multiplier already exceeded the amount of the recovery.

The court acknowledge that it was only reviewing the trial court’s order for “abuse of discretion,” but cautioned that “the fee must above all else be reasonable.”

Further — and this is the point counsel must keep in mind in the fee applications and in drafting proposed orders awarding fees — “a multiplier, if used, must be based on facts other than those used to trigger the application of section 1021.5.”  In a footnote, the court noted that in this case “the reasons justifying any award at all and an award based on high hourly rates … were the same as those used to justify the multiplier — the benefit to the class, the risk taken, the lawyers’ skill, the excellent results.”