Keep Accurate Billing Records for Your Class Action Fee Application
If you think one of the benefits of a plaintiff’s practice is that you don’t have to keep timely and accurate time records, you are badly mistaken if you prosecute class actions. Class action settlements must be presented to a court for approval. Pursuant to recent Court of Appeal decisions in Kullar v Foot Locker Retail, Inc. 168 Cal. App. 4th 116 (2008) and Clark v American Residential Services LLC 175 Cal. App. 4th 785 (2009), courts are increasingly scrutinizing settlements, including accompanying applications for attorneys’ fees and costs. (Despite any agreement by the parties to the contrary, the court has an “independent duty to evaluate the requested amount [in a class settlement agreement] and award only what is reasonable.” Garabedian v. Los Angeles Cellular Telephone Company 118 Cal.App.4th 123, 128. (2004)) If your fee application seeks a percentage of a common fund created for the settlement, courts will often require that the percentage requested be cross-checked with class counsel’s lodestar (hours billed x reasonable hourly rate). If the lodestar is less than the percentage fee requested, the court will determine what, if any, multiplier to award to arrive at an approved fee. See, PLCM Group, Inc. v. Drexler , 22 Cal.4th 1084, 1095-96 (2000); Ramos v. Countrywide Home Loans, Inc. 82 Cal. App. 4th 615, 625-26 (2000); Ketchum III v. Moses 24 Cal.4th 1122, 1132-36 (2000).
In order to present the court with an accurate lodestar, class counsel must track hours billed by timekeeper (i.e. attorney, paralegal, law clerk). And, courts are increasingly reluctant to take counsel’s word for hours billed via a summary declaration. For example, in a case recently handled by our office, the court issued a tentative ruling approving the settlement as fair and reasonable but deferred its decision on our fee application pending the submission of detailed billing records reflecting hours billed and billing descriptions for each entry. The court wanted to confirm that there was little or no duplication of efforts in the time records. The court also insisted that a detailed cost bill be submitted including copies of invoices reflecting payment. Because we were diligent in tracking our time and costs, we were able to provide the requested documentation to the court at the final approval hearing held two days later, resulting in prompt approval of the full fee request.
