California Court Discovers Improper Billing Practices, Severely Cuts Fee Award

Posted on March 13th, 2018 by Legal Fee Advisors

By Zachary Kalmbach.

A California fee dispute that resulted in a significantly reduced fee award highlights a number of improper billing practices. The case arose from a real estate dispute and was ultimately dismissed because of a multitude of discovery violations. Defendant subsequently moved for $511,279.65 in attorneys’ fees. The Court reduced the award by 52%, largely because of improper billing practices such as block billing and billing for internal communication, associate training, and clerical tasks.

First, the Court found that the rates requested by defendant’s counsel were “high even for the most experienced attorneys in the Eastern District.” In fact, all the attorneys billed at rates higher than the prevailing market rates. Citing Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008) for the rule that rates are to be calculated in line with the market rates in the forum in which the district court sits, the Court applied significant reductions to the requested rates.

Additionally, much of the time billed was found to be unreasonable. For example, the Court concluded that entries for “reviewing the docket, downloading, calendaring deadlines, preparing documents for filing, and filing documents” were clerical in nature and thus excluded 15.8 hours spent on such tasks.

The Court also took issue with the firm’s practice of billing for internal communication, stating “in general, two attorneys cannot bill for attending the same meeting or communicating with each other, as such time is unnecessary.” The Court finding that “there [were] numerous entries indicating internal communications and conferences with counsel, whether in person or via email.” Billing for such communication led the Court to reduce the number of hours by 17.56 hours.

Further, “junior attorneys billed for hours best described as ‘training’ on many occasions.” For example, after an attorney with nearly 10 years of experience drafted a motion to dismiss, an attorney with less than 2 months of experience billed time to “Review and revise” the motion. A senior attorney billed for reviewing the motion on the same date, leading the Court to conclude that the hours were training in nature. Accordingly, the Court reduced time billed for training by 16.4 hours.

Block billing was also an issue. The Court determined that “the use of block billing [wa]s particularly troublesome given the number of entries that include[d] clerical tasks and other tasks for which fees should not be awarded.” For several entries, the Court was unable to ascertain the amount of time spent on compensable vs. non-compensable tasks. Accordingly, the Court applied an across-the-board reduction of 10% to the hours sought.

Finally, the Court reduced time billed in relation to the motion for attorneys’ fees by 27 hours. The Court found that 30 hours billed for “organizing and drafting” the motion was excessive, “particularly given the fact that the memorandum of points and authorities [was] approximately sixteen pages.” The Court also reduced hours billed for time preparing and attending a hearing that never took place, as the matter was taken under submission without oral argument.

The reductions resulted in a final fee award of $246,758.67, 52% less than the amount requested. This case illustrates several billing practices a court may not tolerate. In addition to giving examples of clerical tasks, the Court confirmed that firms should not bill clients for internal communications or time spent on tasks that could be construed as associate training.

Singh v. Hancock Nat. Res. Grp., Inc., No. 115CV01435LJOJLT, 2017 WL 2275029 (E.D. Cal. May 25, 2017), report and recommendation adopted, No. 115CV01435LJOJLT, 2017 WL 2630082 (E.D. Cal. June 19, 2017)

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