Opinion ID: 519278
Heading Depth: 2
Heading Rank: 2

Heading: The Kerr Factors

Text: 21 Our affirmance of the lodestar calculation does not end our inquiry. Cunningham also objects to the district court's use of the Kerr factors to reduce Eiden's fee award from the lodestar figure of $12,000 to $7,500. According to Cunningham, all of the factors relied upon by the district court to lower the award are subsumed in the initial lodestar determination and are therefore impermissible grounds for further reductions. 22 We generally review the application of the Kerr factors to the facts of individual cases for abuse of discretion. This discretion is circumscribed by the pronouncements of the Supreme Court and this Circuit, Jordan, 815 F.2d at 1261, and any elements of legal analysis and statutory interpretation which figure in the district court's decisions are reviewed de novo. Hall v. Bolger, 768 F.2d 1148, 1150 (9th Cir.1985). 23 Under the lodestar approach, many of the Kerr factors have been held subsumed in the lodestar determination as a matter of law. Blum, 465 U.S. at 898-900, 104 S.Ct. at 1548-49. These factors may not act as independent bases for adjustments of the lodestar. Miller v. Los Angeles County Bd. of Educ., 827 F.2d 617, 620 n. 4 (9th Cir.1987); Jordan, 815 F.2d at 1262 n. 6. Those Kerr factors that are not subsumed may support adjustments in rare cases, provided the district court states which factors it is relying on and explains its reasoning. See Pennsylvania v. Delaware Valley Citizens' Council, 478 U.S. 546, 106 S.Ct. 3088, 3098, 92 L.Ed.2d 439 (1986), rev'd after rehearing on other grounds, 483 U.S. 711, 107 S.Ct. 3078, 97 L.Ed.2d 585 (1987) (upward adjustment based on unsubsumed Kerr factors is permissible in certain 'rare' and 'exceptional' cases, provided the adjustment is supported by both 'specific evidence' on the record and detailed findings by the lower courts); Quesada, at 539 (recalling, in a case involving a downward reduction, that [t]he Supreme Court has repeatedly emphasized that the lodestar fee should be presumed reasonable unless some exceptional circumstance justified deviation). While we will give courts latitude to balance and weigh permissible factors, any reliance on factors that have been held to be subsumed in the lodestar determination will be considered an abuse of the trial court's discretion. 24 In this case, the district court gave four justifications for the downward adjustment of the lodestar amount: (1) insufficient documentation of dates and activities with regard to the work done by the law clerks; (2) a mediocre performance by Eiden; (3) the relatively low settlement figure of $5,000, as compared with Cunningham's request in his complaint for compensatory and punitive damages totaling $520,000; and (4) the court's view that there was a substantial doubt as to whether the settling defendants intended to deny the plaintiff of [sic] his civil rights. 25 The precedents make clear that the first two of these reasons are not properly considered under the second step of the hybrid analysis. The Supreme Court held in Hensley that the first rationale, inadequate documentation, is subsumed in the lodestar determination. 461 U.S. at 433, 103 S.Ct. at 1939. Quality of representation, the second justification, has also been held subsumed, at least in the absence of specific evidence that the attorney's performance is exceptional or abysmal. Delaware Valley Citizens' Council, 106 S.Ct. at 3098-99; Blum, 465 U.S. at 899-900, 104 S.Ct. at 1549; Jordan, 815 F.2d at 1262 n. 6. Insofar as the district court relied on these factors to reduce the fee award below the lodestar amount, it abused its discretion. 26 The third factor, a comparison of the damages sought with the settlement figure, raises the question of whether the relief obtained is subsumed in the lodestar determination. The district court sought to distinguish the question of whether the time was reasonably spent, arriving at a figure by examining in part the claims asserted and whether they were successful, from an examination of the final award relative only to the 'amount involved.'  The court allowed that the first part of its dichotomy was accounted for in the lodestar calculation, but nonetheless considered a narrower focus on the final damage award a legitimate Kerr factor. As support for this dichotomy, the court cited the Supreme Court's decisions in Blum and Hensley. As authority for reducing the fee award because the damages recovered were much less than those sought, the court cited our decision in Greater Los Angeles Council on Deafness, 813 F.2d 217. 27 The Supreme Court, in its post-Hensley pronouncements on Sec. 1988, has put considerable force behind its requirements that district courts treat the lodestar figure as presumptively reasonable and adjust it only in rare or exceptional cases. Whereas in Hensley, the Court hinted at a two-part inquiry that first addressed the lodestar and then modified that number upward or downward according to the results obtained, 461 U.S. at 434, 103 S.Ct. at 1940, more recent cases have held that the 'results obtained' generally will be subsumed within other factors used to calculate a reasonable fee, and that this factor normally should not provide an independent basis for increasing the fee award, Blum, 465 U.S. at 900, 104 S.Ct. at 1549. See also Delaware Valley Citizens' Council, 106 S.Ct. at 3098 (reading Blum as modifying the Hensley analysis by expanding upon Hensley's findings that many of the Johnson[/Kerr] factors 'are subsumed within the initial calculation of the lodestar' ). We, too, have acknowledged that the results obtained is among the factors that are ordinarily subsumed in the lodestar. See, e.g., Jordan, 815 F.2d at 1262 n. 6. 28 Thus, in ordinary cases, a plaintiff's degree of success or the results obtained should be adequately accounted for in the lodestar. Only in rare or exceptional cases will an attorney's reasonable expenditure of time on a case not be commensurate with the fees to which he is entitled. Adjustments to the lodestar based on results obtained must be supported by evidence in the record demonstrating why such a deviation from the lodestar is appropriate. See Blum, 465 U.S. at 900, 104 S.Ct. at 1549. In the case at bar, neither the record before us nor the district court's order shows why the downward adjustment was necessary to provide fair and reasonable compensation. Id. at 901, 104 S.Ct. at 1550. This deviation from the lodestar, therefore, cannot stand. 29 What the district court did was assess Cunningham and his counsel a double penalty for the modest success of the lawsuit. There is no justification in the case law for bifurcating the results obtained test in this fashion. To the contrary, Blum held that the district court had abused its discretion by adjusting the lodestar upward for quality of representation in the absence of specific evidence to show that the quality of service rendered was superior to that one reasonably should expect in light of the hourly rates charged and that the success was 'exceptional.'  465 U.S. at 899, 104 S.Ct. at 1548 (citing Hensley, 461 U.S. at 435, 103 S.Ct. at 1940). Because the quality of representation, like the results obtained, generally is reflected in the reasonable hourly rate, the Court reasoned that the adjustment represented a clear example of double counting. Id. Hence, while allowing for the possibility that deviations from the lodestar may be justified in certain situations, the Court made clear that where a factor is generally considered as part of the lodestar, further adjustments based on that factor will ordinarily amount to impermissible double counting and will rarely be sustained. 30 Contrary to the district court's assertion, therefore, Blum does not stand for the proposition that a requested attorney's fee may be reduced twice--for unsuccessful claims, and again if the final award reflects only partial success. Nor does Hensley, which although it reflected the Court's thinking before it explicitly held that the results obtained inquiry is subsumed in the lodestar, allowed for only a single reduction of the fee award to reflect a plaintiff's degree of success. See 461 U.S. at 434-36, 103 S.Ct. at 1940-41. In ordinary cases, the results obtained or degree of success inquiry is indivisible and should not be parsed up. 31 Our decision in Quesada sheds further light on why the double penalty in this case must be considered an abuse of the district court's discretion. In Quesada, as in the instant case, the district court reduced the lodestar figure because plaintiff settled for much less than he requested in his complaint. We reversed on the ground that it is inappropriate for a district court to reduce a fee award below the lodestar simply because the damages obtained are small. At 539-40. We added that the relief obtained in a case may sometimes justify a fee reduction--for example, if plaintiffs fail to obtain relief on all claims or if hours spent on unsuccessful claims were not needed to pursue successful claims. Id. But in Quesada, no such showing was made. Similarly, defendants have made no such showing in this case, and the district court did not articulate any connection between the settlement figure and the fee award that was not accounted for in the lodestar. 2 32 Our decision in Greater Los Angeles Council on Deafness, upon which the court relied, is not to the contrary. In that case, we held that the district court abused its discretion by failing to consider the results obtained and degree of success under either the lodestar or the Kerr/Johnson steps of its analysis. See 813 F.2d at 222. This holding did no more than confirm the Supreme Court's statement in Hensley that courts must 'consider the relationship between the extent of [a plaintiff's] success and the amount of the fee award.'  461 U.S. at 438, 103 S.Ct. at 1942, quoted in Greater Los Angeles Council on Deafness, 813 F.2d at 222. 33 By contrast, the instant case does not raise the question of whether a court may totally disregard the results obtained, but rather, whether it may count this factor twice. We hold that in ordinary cases, such double counting is impermissible. In exceptional cases, such deviations may be proper, but the court must explain why the results of the lawsuit are not adequately factored into the lodestar. Because the district court did not do so, it abused its discretion. 34 The fourth factor cited by the court in support of the reduction from $12,000 to $7,500--its doubt that defendants intended to violate plaintiff's civil rights--was also an improper ground on which to base a Kerr reduction. We have held as a threshold matter that a plaintiff cannot be a prevailing party where a defendant's action is only gratuitous. California Ass'n of the Physically Handicapped, Inc. v. Federal Communications Comm'n, 721 F.2d 667, 672 (9th Cir.1983), cert. denied, 469 U.S. 832, 105 S.Ct. 121, 83 L.Ed.2d 63 (1984); see also Greater Los Angeles Council on Deafness, 813 F.2d at 220. But once it is determined that a plaintiff is a prevailing party, a defendant's legal liability is only relevant insofar as it bears on plaintiff's degree of success. See id. at 222-23. 35 The settlement agreement labels Cunningham the prevailing party in this lawsuit, and the government does not seek to overturn this characterization. We therefore do not address the question of whether the County and Sheriff Block acted gratuitously in agreeing to this label. In any event, if the district court wanted to address this factor, it should have done so as a threshold matter, not to justify its Kerr adjustment. Or, if the district court meant this factor as a surrogate for the results obtained or degree of success, it should have considered it under the lodestar calculation. In either case, the court abused its discretion. 36 Because all of the factors relied on by the court to support the downward adjustment were improper, we reverse the second round of reductions and set the attorney's fee award at the lodestar figure of $12,000.