Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_12-cv-05868/USCOURTS-cand-3_12-cv-05868-10/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1441 Petition for Removal

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ROSALINA C. RELENTE, et al.,

Plaintiffs,

v.

VIATOR, INC.,

Defendant.

Case No. 12-cv-05868-JD 

ORDER RE PLAINTIFFS’ MOTION 

FOR ATTORNEY’S FEES

Re: Dkt. No. 79

On May 4, 2015, the Court entered final approval of the settlement in this consumer class 

action. See Dkt. No. 108. The settlement resolved plaintiffs’ claim that defendant Viator, a 

company that markets and sells “tours and experiences” through its website, displayed misleading

“strike-through prices” that overstated discounts on tour prices. See Sitkin Decl. ¶ 4, Dkt. No. 80.

Under the terms of the settlement, which are detailed in in prior orders, see Dkt. Nos. 76, 

108, the class received payments from a $515,000 settlement fund, to be divided between the class 

members based on how much they paid for their tour. Proposed Settlement § 2.5, Dkt. No. 63-1. 

Viator is also subject to a permanent injunction requiring it to include a description of the basis for 

a strike-through price whenever it lists one on its website or apps. Id. § 5.

Plaintiffs’ counsel have now moved for $500,000 in attorney’s fees, litigation expenses of 

$22,256.50, and incentive awards of $5,000 for named plaintiff Rosalina Relente and $3,500 for 

named plaintiff Travis Anderson. None of these payments would come out of the class’s 

settlement fund. 

I. ATTORNEY’S FEES

Rule 23(h) of the Federal Rules of Civil Procedure permits the award of reasonable 

attorney’s fees in class actions. Fees are generally determined under the “lodestar” method or the 

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percentage-of-recovery method. The lodestar method uses an hourly rate approach that calculates

fees based on attorney work hours multiplied by a reasonable billing rate. Blanchard v. 

Bergerson, 489 U.S. 87, 94 (1989). The percentage method awards fees by giving the attorneys a 

fixed percentage of the monetary recovery they obtained for the settlement class. Plaintiffs’ 

counsel in this case want fees to be calculated using the lodestar, while Viator urges using the 

percentage-of-recovery method. In either event, plaintiffs’ counsel are limited to a maximum of 

$500,000, as the members of the settlement class were told in the notice of settlement that their 

class counsel would not recover anything more. See Notice of Settlement at 4, Dkt. No. 63-1 at 

31.

A. Lodestar vs. Percentage-of-Recovery

In general, where federal substantive law provides basis for the underlying cause of action, 

it is left up to the district court’s discretion which method to use. See Vizcaino v. Microsoft Corp., 

290 F.3d 1043, 1047 (9th Cir. 2002). But where, as here, plaintiff brings a state law claim, the 

Court looks to the state’s law in deciding which method to use to calculate attorney’s fees. See 

id.; Lilly v. Jamba Juice Co., No. 13-cv-02998-JST, 2015 WL 2062858, at *5 (N.D. Cal. May 4, 

2015) (citing Lealao v. Beneficial California, Inc., 97 Cal. Rptr. 2d 797, 803 (Cal. Ct. App. 

2000)).

Plaintiffs’ counsel base their claim to attorney’s fees on California’s private attorney 

general statute, see Cal. Civ. P. Code § 1021.5, and Viator does not dispute that the statute’s 

requirements are met.

1

 In general, if fees are awarded pursuant to this statute, they must be 

calculated using the lodestar method. See Press v. Lucky Stores, Inc., 34 Cal. 3d 311, 321-22 

 

1

The statute allows a court to award attorney’s fees:

to a successful party against one or more opposing parties in any 

action which has resulted in the enforcement of an important right 

affecting the public interest if: (a) a significant benefit, whether 

pecuniary or nonpecuniary, has been conferred on the general public 

or a large class of persons, (b) the necessity and financial burden of 

private enforcement, or of enforcement by one public entity against 

another public entity, are such as to make the award appropriate, and 

(c) such fees should not in the interest of justice be paid out of the 

recovery, if any.

Id.

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(1983). A California Court of Appeal case has voiced some hesitancy about this rule by 

suggesting that “the lodestar method is not necessarily utilized in common fund cases,” Lealao, 97 

Cal. Rptr. 2d at 803. But that case also recognized that it is “questionable whether a pure 

percentage fee can be awarded even in a conventional common fund case.” Id. at 813. The Court 

finds that Lealao is not a firm enough holding to displace the general use of the lodestar method 

approved by the California Supreme Court, and that this case is likely outside Lealao anyway 

because it is not a “conventional common fund case” -- a “common fund” in the context of 

attorney’s fees refers to situations where class counsel takes a slice of the recovery he or she 

obtained for the class as a whole, not cases where, as here, recovery of attorney’s fees do not 

diminish the class members’ recovery. See Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980); 

Staton v. Boeing Co., 327 F.3d 938, 968 (9th Cir. 2003).

It is also certainly true that the lodestar method has come in for criticism, especially by 

federal courts. See In re Activision Securities Litigation, 723 F. Supp. 1373, 1378 (N.D. Cal.

1989). But California state courts have not abandoned the primacy of the lodestar approach, 

although they have permitted courts to adjust the result of the lodestar calculation based on other 

factors, including the results of a percentage-of-recovery calculation. See Lealao, 97 Cal. Rptr. 2d

at 821. 

Consequently, the Court’ attorney’s fees analysis will use the lodestar method. That 

method is particularly suited to this case because part of the relief the class obtained is an 

injunction, whose value will not be reflected in the monetary award that is going to the class. See 

Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir. 1998) (“In employment, civil rights and 

other injunctive relief class actions, courts often use a lodestar calculation because there is no way 

to gauge the net value of the settlement or any percentage thereof.”). Viator claims that the 

injunction is of little value, as it simply requires Viator to implement changes that it was already 

planning on doing in any case. But the difficulty in accurately valuing the injunction is itself a 

reason to use the lodestar method, which does not require making factual determinations as to 

what Viator would have done absent the injunction and what the value of the injunctive relief is to 

Viator’s customers.

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B. Lodestar Calculation

Plaintiffs’ counsel claim a lodestar of $506,839.87 based on 798.77 hours of work by five 

attorneys (three partners, one of counsel, and one associate) and three staff members, but 

acknowledge that they cannot actually recover more than $500,000. See Motion for Attorneys’ 

Fees at 3:10-21, Dkt. No. 79. Plaintiffs’ counsel has submitted a declaration by Mark Chavez, a 

partner at a third-party law firm, in support of the hourly rates charged by the lawyers and staff, 

see Chavez Decl. ¶¶ 18-23, Dkt. No. 84. The Court also requested and carefully reviewed in 

camera the time records for the two law firms that represented plaintiffs -- the Law Offices of 

James M. Sitkin (“Sitkin”), and Ram, Olson, Cereghino & Kopczynski LLP (“ROCK”), to 

evaluate fees. 

Viator does not object to the rates but does object to some of the hours claimed as 

duplicative or superfluous. Broadly speaking, Viator’s allegations of duplicative and otherwise 

unnecessary work fit into a number of general categories, but none of the work appears redundant:

1. Communications with co-counsel: In a number of places, Viator alleges 

that the mere fact that Sitkin and ROCK communicated is unnecessarily 

duplicative. See, e.g., Comparison at 1 (“Meet with co-counsel regarding 

legal strategy”); 2 (“debrief ROCK re above”), 7 (“Phone call with cocounsel regarding strategy.”). But it is obvious that co-counsel will have 

to communicate with one another to provide adequate representation.

Because of the way Sitkin’s timesheets are kept, it is unclear exactly what 

proportion of Mr. Sitkin’s time was spent on communications with cocounsel as opposed to other tasks, and it is true that during certain time 

periods, like February 2013, ROCK partner Karl Olson’s time appears to 

have been primarily spent communicating with co-counsel and opposing 

counsel. But with the caveat that “determining whether work is 

unnecessarily duplicative is no easy task,” Moreno v. City of Sacramento, 

534 F.3d 1106, 1112 (9th Cir. 2008), the total number of hours billed does 

not appear to the Court unreasonable in light of the substantive work 

performed during these time periods.

2. Work on similar pleadings and research: Viator points out that entries 

in the summary of time worked show that Sitkin and ROCK both worked 

on certain filings, like the complaint and oppositions to Viator’s motions 

to dismiss, see id. at 1-2, 4-5, or reviewing similar materials, like the 

Court’s rules and orders, see id. at 2, 6, 7-9, 11 (review of Court’s 

standing orders, orders on motions to dismiss, and deposition transcript, 

and preparation for settlement conference). Each of the allegedly 

duplicative tasks, however, involves significant filings on which cocounsel would understandably coordinate, or review of orders and other 

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documents that all counsel would necessarily have to familiarize 

themselves with. This work also appears to be reasonably compensable.

3. Unnecessary work: Viator claims that Mr. Sitkin should not be permitted 

to recover for time spent in February 2013 drafting and discussing a 

motion to amend, because Viator eventually stipulated to the amendment. 

See Sitkin Decl. at 18:1-19:9. The stipulation was only filed on February 

11, however, see Dkt. No. 18, and it was not unreasonable for Mr. Sitkin 

to work on the motion prior to the stipulation being entered into. Mr. 

Sitkin billed 13.3 hours on the case prior to February 13, and while his 

time records only divided up his time only by day, rather than task, the 

total time billed does not appear excessive -- especially given the fact that 

it included time spent negotiating the stipulation with opposing counsel. 

The Court concludes that the work is not obviously unnecessary.

4. Excessive work performed by partners: Viator also argues that a 

disproportionate share of the work performed by plaintiffs’ counsel -- 82% 

of the total hours claimed -- was performed by partners, as opposed to 

associates or staff. This is in part an artifact of the fact that Mr. Sitkin is a 

solo practitioner without significant staff, and while the work could 

potentially have been farmed out to associates at the ROCK firm, the time 

records reveal that Mr. Sitkin took the lead in several substantive aspects 

of the case and may reasonably have been the lawyer best-placed to 

efficiently complete the tasks. Viator specifically objects to Mr. Sitkin’s 

billing time for reviewing Viator’s supplemental document production and 

legal research, but it appears that no significant time was expended on 

either. The former was simply one of many tasks Mr. Sitkin performed 

over the course of three days, all of which took 7.9 hours, while the latter 

appears related to a mediation brief and settlement conference that Mr. 

Sitkin worked extensively on, see Sitkin Decl. 22:10-23:7. Again, 

compensating plaintiffs’ counsel for the work does not seem unreasonable.

Viator also argues that plaintiffs’ hours should be cut down based on cross-checking 

against the results that would be obtained under a percentage-of-recovery calculation. Under 

Viator’s proposed methodology, the percentage-of-recovery method should start with the size of a 

“constructive common fund” composed of the $515,000 payment to the class, the $500,000 cap on 

attorney’s fees, and the $35,000 cap on costs -- or $1,050,000 in total. The Ninth Circuit has set a 

benchmark of 25% of the common fund when using the percentage-of-recovery method, see In re 

Bluetooth Headset Products Liab. Litig., 654 F.3d 935, 942 (2011), which would yield attorney’s 

fees of $262,500. But this calculation of course assumes that the injunction that the parties’ 

settlement agreement requires is valueless. Viator tries to downplay the value of the injunction, 

based on a declaration by its Chief Financial Officer, Scott Halstead, that “[a]s its business has 

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grown, . . . Viator has increased the percentage of products displaying a Strikethrough Price with 

Special Offer Text . . . .” But this is a far cry from establishing that the injunction has zero value. 

It appears undisputed that as of February 2014, Viator did advertise strikethrough prices without 

any explanatory text -- Viator’s corporate representative testified at deposition that that was the 

case. See Deposition of Timothy Lewis at 173:15-174:5, 174:13-22, Sitkin Supp. Decl. Ex. A, 

Dkt. No. 103. And as a general matter, injunctive relief in a consumer case alleging misleading 

advertising is almost always likely to be an important remedy. See In re Tobacco II Cases, 46 Cal. 

4th 298, 319 (2009) (“the primary form of relief available under the UCL to protect consumers 

from unfair business practices is an injunction”); Colgan v. Leatherman Tool Grp., 38 Cal. Rptr. 

3d 36, 64 (Cal. Ct. App. 2006) (“Injunctive relief is one of the principal remedies available for 

violations of §§ 17200 and 17500.” (citation omitted)). That importance cannot be readily 

quantified, and the difficulty of valuing the injunction overall makes it all but impossible for the 

Court to use the percentage-of-recovery method as a cross-check against the lodestar.

Accordingly, the Court awards plaintiffs’ counsel attorney’s fees of $500,000, the 

maximum allowed under the settlement agreement. Because this award is all that is available 

under the agreement, the Court does not need to reach plaintiffs’ counsel’s argument that an 

upward multiplier to the lodestar is appropriate. 

II. EXPENSES AND COSTS

Plaintiffs’ counsel also claim $22,256.50 in costs, which is below the $35,000 limit set 

forth in the class notice. See Notice of Settlement at 4. Viator does not oppose the fee awards. 

The Court has reviewed the declarations from plaintiffs’ counsel justifying the claimed expenses 

and costs, see Sitkin Decl. ¶ 36; Olson Decl. ¶ 31, Dkt. No. 81, finds them reasonable, and awards 

them. 

III. INCENTIVE AWARDS

Plaintiffs also seek “inventive awards” for the two named plaintiffs: $5,000 for Rosalina 

Relente, and $3,500 for Travis Anderson. The Court, following the Ninth Circuit, has previously 

expressed strong skepticism of arrangements whereby named plaintiffs do better than ordinary 

members of the class, based on the danger that it may lead to collusive settlements. See Myles v. 

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AlliedBarton Sec. Servs., LLC, No. 12-cv-05761, 2014 WL 6065602, at *6 (N.D. Cal. Nov. 12, 

2014) (“Absent a particularized showing of expenses incurred or injury suffered by [the named 

plaintiff] (above and beyond those of the other proposed class members), an enhancement award is 

inappropriate.”); Stokes v. Interline Brands, Inc., No. 12-cv-05527-JD, 2014 WL 5826335, at *6 

(N.D. Cal. Nov. 10, 2012). There is nothing in this case that warrants overcoming that skepticism. 

This is not a situation where the named plaintiffs may be retaliated against, or where the plaintiffs 

have undertaken unusually extensive work on behalf of the class. See Staton, 327 F.3d at 977. 

Rather, their participation in the case appears to have been limited to occasional and routine 

meetings with counsel and sitting for deposition. See Declaration of Rosalina Relente ¶ 5, Dkt. 

No. 89; Declaration of Travis Anderson ¶¶ 7-10. Incentive awards are denied, but both named 

plaintiffs may be reimbursed any out-of-pocket costs and any work missed.

IT IS SO ORDERED.

Dated: June 9, 2015

________________________

JAMES DONATO

United States District Judge

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