Opinion ID: 753270
Heading Depth: 4
Heading Rank: 2

Heading: Fees Calculation

Text: 14 The district court, however, erred in computing the fee award. As stated above, the district court determined Plaintiff's fee award by reducing his requested fee by 80 percent. The district court arrived at this percentage by adding the 15 percent reduction for overstaffing, the 15 percent reduction for inaccurate time records, and the 50 percent reduction for results obtained. Plaintiff argues that the district court mistakenly computed the fees under Hensley . 15 Plaintiff is correct. A district court in assessing a reasonable fee should determine the lodestar by reducing the number of hours reasonably expended in the litigation, or by reducing the requested hourly rate, or both. Here, the district court did not identify and exclude specific hours from the initial fee request. Where as here, a district court does not reduce the number of hours requested in the fee application to account for limited success, in the alternative a court may reduce the lodestar by a certain percentage to account for limited success. See Cabrales v. County of Los Angeles, 864 F.2d 1454, 1464 (9th Cir.1988), cert. granted, judgment vacated on other grounds, 490 U.S. 1087, 109 S.Ct. 2425, 104 L.Ed.2d 982 (1989), opinion reinstated by, 886 F.2d 25 (9th Cir.1988), cert. denied, 494 U .S. 1091. 16 Here, the district court erred by not calculating a lodestar. Cf. Harris v. Marhoefer, 24 F.3d 16, 18 (9th Cir.1994) (Calculating the lodestar figure is the starting point for determining a reasonable fee.). Instead, the court simply reduced the initial fee request (not the lodestar) by 80 percent. This method of calculating the fee award is incorrect because it failed to determine the lodestar by excluding from the initial fee request hours attributed to overstaffing and poor record keeping. The district court computed Plaintiff's fee award as follows: 17 $2,500,000 - 2,000,000 (representing 80% reduction of fee request to account for overstaffing, inaccurate time records, and limited results obtained) 18 The district court's calculation results in a significant mathematical discrepancy from the amount of fees that would have been awarded had the district court employed the proper approach in determining the lodestar. Under the proper approach, the computation would be as follows: 19 $2,500,000 Initial Fee Request - 750,000 (representing 30% reduction for overstaffing and inaccurate records) $1,750,000 Lodestar - 875,000 (representing 50% reduction for limited results obtained) 20 Thus, proper calculation of the fee award required the court first to reduce the fee request for overstaffing and inaccurate records to determine the lodestar because these problems pervade the entire fee application. Once this lodestar figure is calculated, the district court reduces the lodestar to reflect the results obtained if, as here, the number of hours spent on unrelated and unsuccessful claims is unclear. Cabrales, 864 F.2d at 1464. 21 Here, the district court determined that a reasonable fee for the entire litigation required it to reduce the initial fee request by 30 percent to account for overstaffing and inaccurate time records. Adopting this determination, the resulting figure of $1,750,000 represents a reasonable lodestar. The district court, however, thought it necessary to reduce the initial fee request by an additional 50 percent to account for the Plaintiff's limited success. The problem with the district court's math is that the identified percentage reductions (15 percent for overstaffing, 15 percent for inaccurate time records, and 50 percent for limited success) were lumped together and the initial fee request was reduced by 80 percent. This lumping-together approach inaccurately applies the district court's identified reductions. The following example illustrates the inaccuracy of the lumping together approach: Let us assume that the district court had thought it should deduct 50 percent for overstaffing and inaccurate time records and 50 percent for limited success. Under the lumping together approach the amount requested in the initial fee application would be reduced by 100 percent, and a prevailing plaintiff would be left with a fee award of zero. 22 The district court clearly erred in reducing the initial fee request by 80 percent. Based on the court's identified reductions, which we accept, (15 percent for inaccurate records, 15 percent for overstaffing, and 50 percent for limited success) as shown above, the proper calculation of the fee award should be $875,000, not $500,000.