Courts can award attorneys’ fees to the prevailing plaintiff in a discrimination or harassment claim brought under the Fair Employment and Housing Act (FEHA). These attorney fee awards are designed to incentivize and reward a plaintiff’s counsel for litigating a civil rights case that is generally taken on a contingency fee basis and therefore has inherent risks. Trial courts first calculate the lodestar amount, which is the product of the hours spent and the prevailing hourly rate of attorneys in the community conducting similar non-contingent litigation. Then courts can increase this amount by adding a multiplier or increasing the lodestar amount by looking at various factors, such as the risk of non-payment, the public interest in advancing civil rights cases, the complexity of the issues involved, and the skill of the attorneys. These are known as the Ketchum factors.
Recently, the California Court of Appeal, Fourth Appellate District, determined that the trial court abused its discretion when it failed to correctly apply these guidelines when calculating attorneys’ fees in a FEHA case. (Caldera v. California Department of Corrections and Rehabilitation, G057343, G057478, filed April 30, 2020.)
A prison correctional officer, Augustine Caldera, brought a lawsuit against his employer, the California Department of Corrections and Rehabilitation, and his supervisor (collectively referred to as “CDCR”) because he was harassed in the workplace on the basis of his disability, stuttering. Initially, the CDCR attempted to get Mr. Caldera’s case dismissed by arguing that stuttering is not a disability. The trial court granted the motion, but on appeal, the appellate court reversed. The case went to trial and the jury awarded Mr. Caldera $500,000 for being subjected to severe and pervasive harassment over a period of two years. The CDCR then filed a motion for a new trial on the grounds that the award was excessive. The trial court granted this motion as well, and Mr. Caldera again appealed. The appellate court once again reversed the trial court’s ruling. After ten years of litigating, Mr. Caldera sought over $2.4 million in attorneys’ fees. The trial court awarded Plaintiff only $800,000. For a third time, Mr. Caldera appealed.
The trial court determined the lodestar amount by applying hourly rates of attorneys practicing in the Inland Empire (San Bernadino and Riverside). It then looked at the Ketchum factors, acknowledging that some of them had been satisfied. However, the trial court did not add a multiplier and it did not appear that the trial court raised the lodestar amount.
Trial courts need to consider attorneys’ “home market rate” when calculating the lodestar amount. Here, the trial court incorrectly used rates in San Bernadino County rather than Los Angeles County, where Mr. Caldera’s counsel practiced law. Local firms had refused to take Mr. Caldera’s case, forcing him to seek representation from an out-of-town firm, where attorneys’ fees are significantly higher.
The appellate court emphasized that in FEHA cases, the trial courts should apply out-of-town rates particularly when a plaintiff cannot secure local counsel. It directed the trial court to recalculate the lodestar amount based on counsel’s local market rate in Los Angeles County.
Turning next to the Ketchum factors, the appellate court acknowledged that the trial court looked at these issues. Mr. Caldera’s attorneys litigated his case for a decade, including prevailing on two appeals and conducting a jury trial. The jury also awarded Mr. Caldera $500,000 when the highest settlement amount the CDCR had offered Mr. Caldera prior to trial was $70,000. However, the appellate court was unable to determine whether the trial court increased to the lodestar rate after considering the Ketchum factors. Thus, it instructed the trial court on remand to use a multiplier to account for the Ketchum factors to make clear how the attorneys’ fees were calculated.
If you feel that you have been discriminated against or harassed in the workplace, please feel free to call Hunter Pyle Law for a free consultation at (510)-444-4400 or firstname.lastname@example.org.