March24,2023
Re:RichmondRentalInspectionProgram
DearMayorandCityCouncil:
WewritetoyouonbehalfofourRichmondmembers.Asyouknow,theCity’sBuilding InspectionDepartmenthasfailedtoensurethatRichmond’sHousingstockissafe,secure,and sanitary.Theresultisasystematicviolationoftenants’rightsandacultureoflandlordscorrectly believingtheycandisregardtheCity’slawswithlittlefearofaccountability.
I. RICHMOND’SCURRENTRENTALINSPECTIONORDINANCE
Richmondcurrentlybenefitsfroma“ResidentialRentalDwellingUnitInspectionand Maintenance”Ordinance.1Theordinanceaimstoprovidetenants“aregularandcomprehensive systemofinspectionofresidentialrentaldwelling”andto“proactivelyidentifyblightedand deterioratedrentalhousingstock.”2Unfortunately,despitethisordinance,theCityhasfaced significantchallengesprotectingtenantsfromuninhabitablehousing.
A. AllUnitsarenotInspectedDuetoaPatchworkStrategythatLeavesMost UnitsUnregulated
Theordinanceprovidestenantswithtwotypesofinspectionsfortheirunits.
1.First,tenantscanfileacomplaintandrequestaninspectionatanytime.3
2.Alternatively,aninspectionmayoccurwithoutatenantcomplaintinsomesituations.4 WhiletheordinancecallsfortheCitytoroutinelyinspectsomeunits,itdoesnotprovidefor routineinspectionsofallunits.5Instead,theordinanceprovidesapatchworkofdifferent proceduresfordifferentlandlords,allowingindividualbuildinginspectorssignificantdiscretion.6 B. TheOrdinanceRequirestheCitytoTakeActionAgainstLandlordsWho RentSubstandardUnits.
Whiletheordinance’srulesandproceduresarecomplex,itisclearthatonceaviolationis identified,theCitymusttakeaction.7Whenhabitabilityissuesarepresentinoneunit,the 7RichmondMun.Code§6.40.050(d)(1),6.40.100(a)(1),6.40.110. 6Id.
5RichmondMun.Code§6.40etseq.
4RichmondMun.Code§6.40.050(d),6.40.090(c)(2).
3RichmondMun.Code§6.40.050(d).
2RichmondMun.Code§6.40.010.
1RichmondMun.Code§6.40etseq.
building “shall be subject to inspection of all residential rental dwelling units and required to pay all applicable fees as set forth in the Master Fee Schedule Resolution.”8 The ordinance has clear remedies the City can use against landlords who fail to keep their units habitable.9 When an inspector notices a violation, “the inspector shall issue a written notice of violation.”10 “The notice shall contain a description of the violation, the specific action required to correct the violation, and a demand that the violations be corrected” and “contain the scheduled re-inspection date and time”11 Unless the violations are minor, a compliance re-inspection must occur.12
Following the re-inspection, the City has the legal authority to take action against the landlord if the issues are still present.13 These actions include issuing administrative citations, commencing abatement proceedings, seeking civil injunctions, subjecting the landlord to criminal prosecution, or disallowing the landlord from claiming valuable tax deductions on their California taxes.14 II. RICHMOND’S BUILDING DEPARTMENT ALLOWS LANDLORDS TO
BREAK RICHMOND LAW.
On January 23, 2023, Councilmember Jimenez wrote the building department enquiring as to the state of the rental inspection program.15 This email revealed a shocking inaction on the part of the building department and the private contractors it works with. In response to Councilmember Jimenez inquiring how many fines the department issues, Lina Velasco responded, “The current Program is not set up for our consultants to generate citations.”16 Instead of holding landlords accountable, “subsequent inspections are conducted as needed until the violations are corrected.”17
Even with limited staff, there is no reason the City cannot use its existing legal authority to issue administrative citations or notify California’s Franchise Tax Board of substandard conditions.18 Such tactics do not require any significant resources. It is especially troubling that Richmond landlords face no accountability from the building department, as the private contractors responsible for inspecting buildings and providing administrative support are currently not utilizing their entire budget.19 In 2022, the contractors expended $141,728 even when the city allocates $2,000,000 over four years.20 Essentially, the contractors utilized less than 29% of their 8 Richmond Mun. Code § 6.40.050(d)(1).
9 Richmond Mun. Code § 6.40.100, 6.40.110, 6.40.150, 6.40.160. 10 Richmond Mun. Code § 6.40.100(a)(1).
11 Id.
12 Richmond Mun. Code § 6.40.100(a)(4).
13 Richmond Mun. Code § 6.40.110.
14Richmond Mun. Code § 6.40.110.
15 See attached email.
16 Id..
17 Id.
18 Richmond Mun. Code § 6.40.110.
19 See attached email to city council.
20 Id.
yearly budget.21 Even if the City took more drastic actions, such as instituting legal action against an owner, Richmond’s current ordinance specifies that the City can recover its legal fees.22 As such, the issue appears to be less about resources and more about a status quo that has gone unchecked. While the ordinance must be amended, such a rewrite will be ineffective if the City fails to oversee its private contractors tasked with implementing the law.
III. RICHMOND’S EXISTING LAW CONTAINS LOOPHOLES.
While implementation and oversight are significant issues with The Residential Inspection Program, the law itself also fails to protect tenants. Richmond should amend its ordinance to ensure that all rental units are routinely inspected by eliminating the self-certification loophole, eliminating the affordable housing loophole, and adopting clarifying amendments to protect tenants.
A. Large Landlords Should Not Be Able to Obtain an Exemption Through “Self-Certification”
Landlords who own three or more rental units in Richmond receive lax treatment under the law.23 When a landlord owns more than three rental units, they can “self-certify” that their apartments are in good condition.24 Once a landlord is in the “self-certification” program, inspections are limited to twenty percent of the landlord’s units.25 These inspections occur once every three years.26 When a landlord “self-certifies,” they “certify” that they have conducted their own inspection and did not find habitability issues.27 While the ordinance does not allow landlords to continue participating if it becomes clear that bad conditions are present, these provisions require strong enforcement and oversight.
Allowing landlords to inspect their own units and “self-certify” their habitability is problematic for numerous reasons. First, a self-certification process is easily abused by bad-faith actors who are willing to lie about the condition of their units. Second, landlords are not necessarily qualified to conduct health and safety inspections of rental units. Finally, the fact that only landlords who own three properties are eligible discriminates against smaller landlords 27 Richmond. Mun. Code § 6.40.090(c)(3).
26 Id.
25 Richmond. Mun. Code § 6.40.090(c)(2).
24 Id.
23 Richmond Mun. Code § 6.40.090(c).
22 Richmond Mun. Code § 6.40.150. When a city recovers legal fees, it can recover the “market rate” for attorney services as opposed to a rate based of the city attorney’s salary. Stratton v. Beck, 9 Cal. App. 5th 483 (2017). For example, Oakland’s City Attorney office recently obtained an attorney fee award of $2,320,554 for litigating a case against a notorious Oakland Landlord. The People of the State of California et al v. Dodge Corp Et al (see attached ruling). The Court awarded the staff attorney hourly rates between $375-$500 an hour, which the court noted was “very modest…if not at the lower end.” Id.
21 Id.
–especially since large landlords only need to pay rental inspection fees for 20% of their units.28 Effectively, large landlords receive an 80% discount that smaller property owners do not. The City does not even require landlords to submit their self-certification forms.29 The City must eliminate this fundamentally flawed program in its entirety.
B. The City Should Inspect Affordable Housing
Richmond’s ordinance exempts all subsidized housing from the rental inspection program.30 This exemption likely stems from a misunderstanding about the oversight of subsidized properties.
While some subsidized housing is subject to inspections from other agencies, others are not. For example, properties subject to the low-income housing tax credit program are generally never inspected by any outside agency. As such, the City should eliminate the exemption for subsidized rental units to ensure it is not discriminating against low-income tenants by denying them city services based on their income and housing status.
C. Routine inspections should be a right of all tenants.
While the purpose of the rental inspection ordinance is “to proactively identify blighted and deteriorated rental housing stock,” clarifying language is needed to ensure all tenants benefit from proactive inspections. In addition to exempting many units from inspections outright, the ordinance does not mandate ongoing inspections of all properties. ACCE recommends clarifying that all units should be inspected at least once every three years. ACCE further suggests technical amendments that ensure tenants’ rights are protected in the process.
IV. RICHMOND SHOULD ADOPT A TENANT HABITABILITY PLAN.
It is imperative that the City routinely identify habitability violations and demands that landlords make repairs. However, this cannot be the end of the City’s involvement – especially when a landlord has demonstrated a lack of concern for the wellbeing of tenants. Once it becomes clear that significant repairs are required, the tenant should be part of the process.
ACCE recommends adopting a “tenant habitability plan” ordinance. A tenant habitability plan ordinance requires that when a landlord is required to make repairs, they account for tenants’ existence as part of the repair process. A tenant habitability plan requires landlords making significant repairs to submit a plan on how they will conduct the repairs with minimal disruption to existing tenants. The tenant then has an opportunity to suggest changes to the landlord’s plan based on their living situation. If the landlord chooses not to follow the plan, the tenant can take action at Richmond’s Rent Board or as part of a lawsuit. 30 Richmond Mun. Code § 6.40.090(b).
29 Richmond. Mun. Code § 6.40.090(c)(3)(D).
28 Richmond. Mun. Code § 6.40.090(c)(3)(C).
Attached, you will find ACCE’s model ordinance based on the City of Los Angeles’ successful program. Passing this ordinance will ensure that tenants who have already been subjected to uninhabitable conditions are not further harmed by landlords rushing to comply with orders to correct violations.
V. CONCLUSION
The status quo of housing inspections in Richmond is unacceptable. ACCE members often report inspections that result in no or minimal action from landlords. In some cases, inspectors do not even bother to issue the required violation notices. While the above changes can and must occur, with or without staffing changes, ACCE asks the City to seriously consider the wisdom of staffing the building department with private contractors who have a demonstrated pattern of failing to protect Richmond Tenants. ACCE looks forward to a much-needed reform in how Richmond addresses uninhabitable living conditions.
David Sharples
Director of Contra-Costa ACCE
3/24/23, 1:54 AM Alliance Of Californians For Community Empowerment Mail - Fwd: Rental inspections https://mail.google.com/mail/u/0/?ik=5bdd151729&view=pt&search=all&permmsgid=msg-f:1759223292794362674&simpl=msg-f:1759223292794362674 1/2 Ethan Silverstein <[email protected]>
Fwd: Rental inspections
David Sharples <[email protected]> Wed, Mar 1, 2023 at 7:00 PMTo: Edith Pastrano <[email protected]>, Ethan Silverstein <[email protected]>, Leah Simon-Weisberg <[email protected]> ---------- Forwarded message ---------From: Claudia Jimenez <[email protected]>Date: Wed, Mar 1, 2023 at 6:59 PMSubject: Rental inspectionsTo: David Sharples <[email protected]> Councilmember Jimenez (and Mayor Martinez and Councilmembers via bcc): Below are responses to Councilmember Jimenez’s questions regarding the Residential Rental Inspection Program (RRIP) (responses are in red font): Can you inform the council what happen and correct the website error?At the start of the Residential Rental Inspection Program (August 2005), 510-781-5174 was the Help Line number. This was changed severalyears ago to the current Help Line number (510-690-8260). The current/correct Help Line number is published on the actual RRIPwebpage. Apparently, the old number on the Building Division main page was not changed, which was an oversight on staff’s part. We werenot aware of this error until it was brought to our attention. We truly regret the oversight. It was corrected immediately upon our learning ofit the morning of 01/24/2023. How many inspections they do during the year? Historically, the program averages approximately 2,500 inspections per fiscal year, though the COVID-19 years resulted in fewerinspections as the program was stopped temporarily due to the health advisory and allowances were given to reschedule inspections attenant’s request due to positive infection cases or other health concerns. Thus far this fiscal year, the program has completedapproximately 1,300 inspections. How many fines they do?The current Program is not set up for our consultants to generate citations. Over the past 6 months, we have been working with ouroutside counsel, Silver & Wright, on updating our notices and strengthening these parts of the program with our Building and CodeEnforcement staff issuing citations and corrections notices after failure to comply is not obtained by our contractors. Given staffingconstraints, we are piloting our enforcement work with a non-responsive owner who operates a 20-unit development in the City tounderstand costs the City may incur and the amount of staff time it takes to achieve enforcement. This will help inform our budget requestfor next FY year. We’ll provide an update on progress of this soon. How they or the city follow up to make sure landlords are fixing the problems?When violations are noted, owners are provided a correction list by mail with a scheduled reinspection date and time. Subsequentinspections are conducted as needed until the violations are corrected. We do have some outstanding cases where owners fail to makecorrections and as noted above these are the parts of the program that we are working on strengthening. After we pilot the non-responsiveowner, we be testing a non-compliant owner due to uncompleted corrections. Again, we’ll report on this soon. How long is the contract for? / When will their contract expire?Current contracts are effective January 1, 2022 – December 31, 2024, with an option to extend for two additional years. We have twocontractors that operate the program, one does program administration, and the other provides the related inspection services. How much money the city pays to this contractor?The current contract limit is $ 1 million per vendor over the life of the contracts. The current contract expenditures per vendor as ofDecember 31, 2022, are:OutsourceIt (Program Administration) - $ 92,232.90 ISterling (Program Inspections) - $ 49,495.36 Please note that the RRIP is in addition to our Building inspectors addressing habitability complaints or violations related to the adopted Building Codes. These inspections occur as issues arise and are not on the same 3-year cycle that the RRIP has. Building inspectors follow up on these types of complaintsas they are received. I know in the recent past there has been a desire to bring the RRIP in-house; however, please know that I and the other Community Development staffinvolved cannot take this on right now. I need to continue to work with Code Enforcement on preparing RMC amendments to take on the work of RPD’sformer Regulatory Unit, as well as continue to work and support Jesus on coordinating all the City’s unhoused efforts. We are also going to be kicking off theCity’s $35 million TCC grant project in July and the oversight and management of these projects will be critical to complete within the grant timeframe. WhileI recognize there are areas we need to improve, my staff and I are working to cover these gaps within the existing program framework. Thank you for yourcontinued support and please know we are doing our best to meet the needs of tenants, while also being realistic of what we can do at this time given othercity needs and Council priorities. -Lina Lina VelascoShe/her/hersDirector of Comm--______________Claudia Jiménez --David SharplesDirector, Contra Costa CountyACCE Institute and ACCE [email protected]
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
Rene C. Davidson Courthouse
ORDER re: Hearing on Motion for Attorney Fees filed by The People of the State of California (Plaintiff); City of Oakland (Plaintiff) Page 1 of 6 The People of the State of California
et al
Plaintiff/Petitioner(s)
vs.
Dodg Corp et al
Defendant/Respondent(s)
No. RG19022353
Date: 02/01/2022
Time: 3:00 PM
Dept: 23
Judge: Brad Seligman
ORDER re: Hearing on Motion for
Attorney Fees filed by The
People of the State of
California (Plaintiff); City of
Oakland (Plaintiff)
The Motion for Attorney Fees filed by The People of the State of California, City of Oakland on 11/29/2021 is Granted.
Plaintiffs seek an award of attorneys’ fees after substantially prevailing in this multi-location tenant protection and nuisance case. The case was heavily litigated, fully tried and resulted in a $3.9 million judgment and a broad 5-year city-wide injunction. It is one of the largest judgments this court is aware of for this type of case. While defendant Dodg now describes the case as a straightforward, non-complex case, the court has concluded otherwise. It granted the case complex status and has been involved in multiple discovery and motion matters as well as an extensive trial which led to a lengthy Statement of Decision and liability findings against multiple defendants. Belying the suggested simplicity of the case, Dodg assigned 3 partner level lawyers to try the case.
Plaintiffs seek $2,555,979.36 in fees, based on a merit’s lodestar of 1,105,026.95 enhanced by a
2.25 multiplier, and $69,668.75 for the fee motion (“fees on fees.”). Defendant’s opposition is narrowly focused. Other than a timeliness objection discussed below, defendant does not dispute plaintiffs’ entitlement to an award of attorney’s fees, which are mandatory under both Oakland’s Tenant Protection Ordinance and for public nuisance claims. (O.M.C.§8.22.670(D)(1), §1.08.040(G).). Dodg does not dispute the hourly rates sought by plaintiff, nor does it assert that fees should be reduced for partial success. Rather, it targets some timekeeping and staffing practices in arguing the number of hours claimed are excessive and disputes the appropriateness of and the size of the requested fee multiplier.
The court concludes the requested award of fees is largely appropriate, although it modestly reduces the fees sought for litigating the fee motion, and awards a multiplier of 2.1.
Timeliness
Dodg contends the motion for attorney’s fees should be denied as untimely. The motion was filed two court days after the time specified for a motion in CRC 3.1702(b). The missed deadline
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
Rene C. Davidson Courthouse
ORDER re: Hearing on Motion for Attorney Fees filed by The People of the State of California (Plaintiff); City of Oakland (Plaintiff) Page 2 of 6 was the result of an honest mistake in calculating the due date, as explained by plaintiffs’ counsel. There is no evidence of bad faith or prejudice to defendant. As Dodg concedes, CRC 1702(b) does not set a jurisdictional deadline. The court has the discretion to consider late motion. (Jones v. Goodman (2020) 57 Cal.App.5th 521, 542.) Moreover, the court may for good cause extend the time for filing a fee motion even where, as here, the request to extend is made after the fee motion deadline has passed. (CRC 1702(d); Robinson v. U-Haul Co. of Cal. (2016) 4 Cal.App.5th 304, 311.) The court finds good cause to extend the deadline here, where the error of plaintiff’s counsel was inadvertent and not prejudicial, and the alternative would be to grant a very substantial windfall to defendant and impose a severe forfeiture of a mandatory fee entitlement on plaintiffs.
Lodestar Analysis
The starting point for a fee determination is the lodestar: the court calculates the reasonable number of hours times the reasonable hourly rate. (PLCM Group v. Drexler (2000) 22 Cal. 4th 1084, 1094.)
Dodg does not dispute the reasonableness of the hourly rates sought. Plaintiffs’ counsel for whom fees are calculated, were all staff level attorneys with 1-7 years of experience, for which rates of $375-$500 are sought. A paralegal’s work, whose rate is not contested by defendant, is valued at $235 an hour. Of particular note are lead counsel Zarah Rahman, a 2016 law graduate, for whom $475 per hour is sought, and second lead counsel Scott Hugo, a 2015 law graduate, for whom $500 per hour is sought. Rahman and Hugo incurred the most hours of work among the plaintiffs’ team. The undisputed evidence is that their rates are not merely reasonable but are “very modest…if not at the lower end” of the range for non-contingent rates charged for similar work in the San Francisco Bay Area by attorneys with similar experience. (Pearl Dec. at p.11,
12.) Declarant Pearl, who defendant concedes has “a well-deserved reputation for expertise in attorney’s fees” (Opp. at p.8), concluded that Rahman and Hugo’s rates could have been set 50% higher and still have been in the applicable reasonable range. (Pearl Dec. at p. 13.) Another declarant with expertise in attorney’s fees, Michael Rubin, describes the hourly rates sought by plaintiffs as “uniformly lower than the market rates customarily charged by attorneys with comparable skills and expertise int eh San Francisco Bay area. (Rubin Dec. at p.4-5.) Dodg does challenge some of the hours sought by plaintiff, but this challenge is narrow. It does not argue that any task was unnecessary or unreasonable. Nor does it dispute that the litigation was protracted. With the exception of one hearing and depositions, it does not challenge the division of labor among the plaintiffs’ legal team or otherwise argue that the case was not staffed appropriately. It rightfully notes it cannot be faulted for mounting a zealous defense and the court at the close of trial did in fact acknowledge the diligence, professionalism and civility of all counsel in the case. The court does not base its fee determination on anything other than the result of a hard and honorably fought litigation. But a well fought litigation resulted here in hours of compensable work for plaintiffs counsel.
Plaintiffs exercised billing judgment in their motion, excluding supervising attorney time (valued at $82,575) 211.33 hours of duplicative or unnecessary work (valued to $77,175), and reducing the reminder by 5% (valued at $58,159). Plaintiffs overall cut roughly 12% of their fees in the exercise of billing judgment.
The court considers defendant’s specific challenges to the number of hours.
First, Dodg notes that there are numerous .25 hour entries, and asserts that these increments—the smallest listed - overstate the value of routine functions. It cites its expert, David Hadley, a risk
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
Rene C. Davidson Courthouse
ORDER re: Hearing on Motion for Attorney Fees filed by The People of the State of California (Plaintiff); City of Oakland (Plaintiff) Page 3 of 6 manager and paralegal who handles billing in litigated, mostly personal injury cases, for the largest taxicab company in the bay area. He asserts that .1, not .25, is the “gold standard” for timekeeping, and claims that many entries for which .25 hours is sought are for routine tasks. He cites three examples and then broadly asserts that over-half of the entries listed could have been done in 6 minutes or less. He calculates the value of this in excessive billing as $21,741.38. (Handley Dec.at p. 2.) While plaintiffs do not dispute the three entries listed by Hadley, they note they exercised billing judgment and cut substantial hours from their fee request and submitted sworn declarations regarding the hours incurred. Neither Dodg nor its expert cite any authority requiring time entries be based on .1 increments, nor is the broad assertion of its expert that half of the entries are over-stated documented in any way that permits review. The court has independently reviewed the time entries and notes that the .25 entries generally pertain to tasks, sometimes multiple tasks, that could well have exceed 6, 10 or more minutes. The court accordingly rejects this defense claim.
Second, Dodg asserts that excessive time was incurred in drafting the complaint by attorney Dershowitz, which involved 127.75 hours of attorney time valued at $56,187.50. Hadley, who has no apparent expertise in similar litigation, asserts that $45,987 should be deducted as excessive. Dodg argues that the complaint was “far more detailed than what a court might expect from a judicial council form…” (Opp. at p. 6.) The complaint—23 pages long—is indeed longer than a judicial council form, as is appropriate given the scope and complexity of the case.
Moreover, the complaint addresses complex factual and legal issues and was prescient about the primary issues in the case. The scope of the case—and the draft—increased over time to reflect additional properties and factual developments. Moreover, the complaint itself led to several admissions at trial based on verified answers, thus confirming the utility of the detailed complaint. While there were numerous revisions and re-edits of the complaint to take into account input from other lawyers and factual developments, the court cannot say that the time incurred was unreasonable, especially given that the complaint turned out to be a largely accurate roadmap of the case leading to judgment.
Third, defendant challenges asserted “double staffing” at depositions and appearances. It does not challenge staffing at trial. It notes that two attorneys attended a single case management conference—the only one of many such conferences attended by more than one plaintiff-side biller. Plaintiffs note this was the last conference before trial where substantive issues were addressed. Defendant questions the attendance of two attorneys at depositions, again relying on Hadley, who lacks experience in cases like this and is not a lawyer. In any event, the court does not find it unreasonable to have two attorneys at depositions where multiple properties and overlapping issues were involved.
Finally, defendant challenges the time spent on the motion for fees, noting that plaintiff’s counsel Hugo incurred 75.75 hours and Rahman 41.25 hours on the motion, for a value of $69,668.75.
The fee motion was supported by extensive declarations of counsel documenting hours and five declarations of expert attorneys regarding the lodestar and multiplier calculations. While defendant does not point to any specific excessive time involved in drafting the motion and plaintiffs’ counsel’s declarations, it faults plaintiff for submitting 5 expert declarations, although it did not quantify the time it asserts was unnecessary in preparing these declarations. Given the substantial hours incurred in this case and the multiplier sought, it was not unreasonable for plaintiffs to submit a robust motion. That said, the motion does appear to include redundant declarations and an inordinate amount of time by the two lead attorneys. Unlike at CCP §1021.5
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
Rene C. Davidson Courthouse
ORDER re: Hearing on Motion for Attorney Fees filed by The People of the State of California (Plaintiff); City of Oakland (Plaintiff) Page 4 of 6 motion, where there are substantial issues of entitlement to fees, or a catalyst case where causation is a central question, the right to fees here was mandatory. Since the court granted a broad judgment for plaintiffs, there was no question that plaintiffs were entitled to a fully compensable fee. The court accordingly exercises its discretion to reduce the amount awarded for the motion to $49,000. Plaintiffs are entitled to additional fees incurred in reply and for the hearing. The court will consider an increase of the award to reflect this additional time based on a declaration of counsel.
Multiplier
The lodestar calculation is but the first step of the fee calculation. It may be increased or lowered to take into account numerous factors “in order to fix the fee at the fair market value for the legal services provided.” (PLCM, supra 22 Cal. 4th at p. 1095.) Plaintiffs seek an enhancement of their merits (excluding fee motion) work based on: 1. exceptional skill and results; 2. novelty and difficulty of questions involved; 3. contingent risk; 4. preclusion of other employment; 5. public Funding and 6. advancement of public interest. There is authority allowing the court to consider each of these factors, (Serrano v. Priest (1977) 20 Cal.3d 25, 49; Ketchum v. Moses (2001) 24 Cal.4th 1122.) The court must be mindful, however, that the lodestar may fully take into account some of these factors and should not be double counted. (See e.g. Flannery v. California Highway Patrol (1998) 61 Cal. App. 4th 629, 647; Northwest Energetic Services, LLC v.
California Franchise Tax Board (2008) 159 Cal.App.4th 841, 880.) But it is also important to consider what the lodestar does not normally consider: “the unadorned lodestar reflects the general local hourly rate for a fee-bearing case; it does not include any compensation for contingent risk, extraordinary skill, or any other factors a trial court may consider under Serrano III.” (Ketchum, supra. 24 Cal.4th at p.1138.) Thus, normally the lodestar is enough to take into account factors such as the skill of counsel and the result obtained as well as the complexity and novelty of the issues in the case. In this case, the plaintiffs incurred over 2800 hours of work to litigate this case (2621 hours for which they seek compensation). The number of hours itself reflects the complexity of the action. But the court considers several factors that augment the lodestar analysis. First, there is no question that plaintiffs not only succeeded in this case to an extraordinary extent, obtaining one of the largest judgments in a case like this as well as a broad injunction. The judgment will not only deter defendants but will likely have a broad effect in the city as whole as well as other communities.
The case thus undoubtedly advanced the public interest. What makes this result all the more remarkable is that it was the product of a group of relatively inexperienced lawyers. Lead counsel Rahman graduated from law school in 2016 and co-lead Hugo in 2015. These are associate level, not partner level counsel. They faced off at trial against 3 partner level attorneys from a major law firm. To use a sports analogy, plaintiffs’ counsel punched well above their weight.
The court had the opportunity to observe plaintiffs’ counsel throughout this litigation and can attest to the superior representation they gave. They were superbly prepared and organized. They had a strategic plan that they flawlessly executed. In short, they did the work the court would expect to see from much more senior level counsel. Even at the lodestar level, as plaintiffs ’experts attest, the hourly rates sought for plaintiffs’ counsel were at the lower end of the market and could easily have been increased substantially and still been within the market range. Even if the court accepts the hourly rates as appropriate for counsel of these years of experience, these rates should be augmented to take into account representation that would have been expected for
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
Rene C. Davidson Courthouse
ORDER re: Hearing on Motion for Attorney Fees filed by The People of the State of California (Plaintiff); City of Oakland (Plaintiff) Page 5 of 6 a more senior level of experience. Here “the quality of representation far exceeds the quality of representation that would have been provided by an attorney of comparable skill and experience billing at the hourly rate used in the lodestar calculation.” (Ketchum, supra. 24 Cal.4th at p. 1139.)
The court accordingly finds that the rates of Rahman and Hugo should be augmented by 50%, which would mean they would be valued at $712 and $750 per hour, still relatively modest rates.
Since these two attorneys account for nearly 63% of the lodestar, this means an enhancement their rates would yield an overall enhancement of at least 30%.
The court also considers the fact that not only was this case publicly funded, but that it precluded other representation by the relatively small affirmative litigation unit of the City. Any fees awarded would not inure to the individuals who acted as counsel, but to the City that employed them, a factor defendant concedes supports a multiplier. What makes these factors particularly significant is that there was no guarantee of success and that if plaintiffs failed, there would be no fee recovery. In short this was a fully contingent case. While defendant notes the plaintiffs’ counsel were salaried employees and there was no retainer agreement, these are not relevant factors. Indeed, the market-based fee analysis doesn’t turn on whether a lawyer has paying clients, or the cost of counsel. Rather, the issue is how the market would value the work of counsel of similar skill and experience doing similar work. “The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided.” (Ketchum at p. 1134, quoting PLCM Group, Inc., supra 22 Cal.4th at p. 1095.). Thus, in-house counsel in PLCM was properly awarded fees based on market rates, not based on their salaries or overhead. (Id. at p. 1096-1097). The same is true for other types of non-billing, salaried lawyers, like non-profit legal aid lawyers. (Blum v.
Stenson (1984) 465 U.S. 886, 895-896.). There is no authority denying this same approach for in-house government attorneys.
As Ketchum noted (Id. at 1138), the contingency factor addresses how the market would value work where there is no guarantee of payment. The hourly rates used in the lodestar analysis are based on rates where there is a guarantee of payment. Here, the case was contingent, and plaintiffs faced a formidable opposition that led to a full trial on the merits. Defendant’s post-hoc assertion that the case presented no risk is simply not credible, particularly where the case failed to settle despite multiple settlement conferences and negotiations. Simply put, cases do not go to trial where there is no risk, at least where there is competent counsel on both sides, as is true in this case.
The court considers the opinions of plaintiffs’ experts as to the appropriateness of a contingency multiplier, reported cases, and the court’s own knowledge and experience. Dodg offers no contrary expert opinion nor any market-based analysis regarding contingent risk. Case law provides no specific mandatory benchmark—multipliers of .25 to 4 have been reported. The court finds an appropriate multiplier for contingent risk in this case is at least 1.75, if not more.
Combined with the enhancement based on superior representation and considering the other multiplier factors listed above such as preclusion of employment, exceptional results, public funding and public interest, the court finds that an overall multiplier of 2.1 is appropriate for the case.
The court accordingly awards plaintiffs $2,320,554 for the case in chief, based on a lodestar of $1,105,026 and a 2.1 multiplier, and $49,000 fees on fees. Plaintiff may submit a declaration for additional fees incurred in preparing the reply and attending any hearing on this matter.
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
Rene C. Davidson Courthouse
ORDER re: Hearing on Motion for Attorney Fees filed by The People of the State of California (Plaintiff); City of Oakland (Plaintiff) Page 6 of 6
IT IS SO ORDERED
The Court orders counsel to obtain a copy of this order from the eCourt portal.
Dated: 02/01/2022