Can a Court Reduce a Serial ADA Litigant’s Attorney’s Fees Award?

Fees

A private plaintiff suing under the Americans with Disabilities Act (ADA) may recover injunctive relief and attorney's fees (plus costs) but not monetary damages. The ability to recover attorney's fees has given rise to a wave of "get-money quick" lawsuits brought by a small number of professional, serial plaintiffs, with the threat of attorneys’ fees surpassing liability. A district judge in the Central District of California explained the phenomenon like this:

The scheme is simple: an unscrupulous law firm sends a disabled individual to as many businesses as possible, in order to have him aggressively seek out any and all violations of the ADA. Then, rather than simply informing a business of the violations, and attempting to remedy the matter through conciliation and voluntary compliance, a lawsuit is filed . . . . Faced with the specter of costly litigation and a potentially fatal judgment against them, most businesses quickly settle the matter.

Furthermore, California's Unruh Civil Rights Act and the California Disabled Persons Act (CDPA) create private rights of action under state law when there’s been an ADA violation. A plaintiff suing for violations under these acts can recover monetary damages.

However, plaintiffs can circumvent the restrictions on high-frequency litigants by filing their complaints in federal court, asserting federal question jurisdiction over the ADA claim and supplemental jurisdiction over the state-law claims. In light of this, the number of ADA cases in the Central District of California (where this case originated) has ballooned from 3% of its civil docket to roughly 20% in recent years.

A hallmark of abusive ADA litigation is the use of form complaints with numerous boilerplate allegations of varying merit. The ability to file essentially the same complaints over and over again, combined with the hope of intimidating the defendant into an early settlement (or of obtaining a default judgment), results in a quick recovery of attorney's fees with relatively little effort. This decision may help to curb such abuse by Plaintiffs’ lawyers.

Background

In November 2020, Shayler sued PCH for ADA and Unruh Act violations, seeking injunctive relief and attorney's fees, as well as monetary damages for the Unruh Act claim. He asserted that PCH owned a property that failed to comply with regulatory requirements regarding accessible parking spaces.

At a scheduling conference early in the case, the district court judge George H. Wu identified Shayler as a "high-frequency litigant" as defined in Cal Civ. P. Code § 425.55(b) and later declined to exercise supplemental jurisdiction over the Unruh Act claim. Even so, Shayler's amended complaint "[i]nexplicably" continued to allege it.

Shayler later moved for summary judgment, and PCH filed a notice of non-opposition to the motion. Despite this, Shayler filed a reply brief anyway. The district court granted summary judgment to Shayler on the ADA claim and awarded injunctive relief but declined to award damages pursuant to the Unruh Act based on its earlier jurisdictional ruling.

After prevailing on the merits, Shayler moved for an award of over $34,000 in attorney's fees and costs. The district court reduced this award significantly, finding that factors such as the routine nature of the work performed by Shayler's attorneys and the lack of meaningful opposition by PCH warranted the use of a $300/hour "blended billing rate" for all the work performed by Shayler's counsel, as well as a 65% downward multiplier to the total amount of fees. Ultimately, the district court awarded just under $10,000 in fees and costs.

The District Court’s Reasoning for Its Award Reduction

First, while acknowledging the attorneys' experience, the district court explained:

these relatively straightforward ADA actions often include boilerplate filings and rarely involve complex legal issues or any difficult factual discovery. Plaintiff's counsel appear to involve two partner-level attorneys for tasks that could have been performed by paralegals or low level associates at substantially lower rates and [with] review[] by an attorney.

The district court then "elect[ed] to join several other courts in the Central District by adopting a blended rate of $300 [per hour] that is more commensurate with the complexity level of these ADA cases," citing other recent district court decisions that have applied a $300/hour rate to work performed in similar cases.

Judge Wu in the district court also found that Shayler's lawyers had "devoted an unreasonable amount of time on several tasks that should have been done more efficiently" in light of their experience. For example, the district court found that spending nine hours on filing the complaint was "excessive" because Shayler's counsel "often . . . files nearly identical complaints . . . in scores of ADA cases." Judge Wu was also “flummoxed” by the fact that Shayler's counsel spent 17 hours on the unopposed motion for summary judgment, which included seven hours expended after PCH had notified the court of its non-opposition. Judge Wu noted that roughly two-thirds of the hours expended by Shayler's attorneys on the case were accrued after PCH had admitted fault.

As a result, the district court applied "a downward 65% multiplier to the requests for fees." Shayler appealed, arguing that this downward reduction was unjustified.

The Ninth Circuit’s Analysis

Judge Milan D. Smith, Jr. of the United States Ninth Circuit Court of Appeals noted in his opinion that Shayler challenged both the district court's use of a blended billing rate and its use of a 65% downward multiplier.

The judge said that most of his briefing concerned his claim that the district court inadequately explained its reasons for the billing rate and the multiplier. That approach is understandable, Judge Smith said, because the Ninth Circuit hasn’t categorically foreclosed the use of blended billing rates or downward multipliers, saying only that these approaches to calculating a fee award must be adequately explained.

Nonetheless, the district court wasn’t required to write “the equivalent of a law review article justifying its fee award,” Judge Smith quipped. It only had to provide a "concise but clear explanation" of the grounds for its decision. And the Ninth Circuit felt it did so in this case.

The district court's discussion of the unreasonable amount of hours expended by Shayler's attorneys and why a 65% downward multiplier was appropriate as a result, was very detailed, Judge Smith found. The district court identified specific line items in the billing record and explained why they reflected unnecessary uses of time by Shayler's attorneys.

Also, the district court's concerns about the lack of complexity with respect to the legal, factual, and procedural issues in this case, as well as its reliance on the use of $300/hour rates in similar cases, track the factors that a court is supposed to consider in calculating a fee award, Judge Smith said. Shayler's opening brief didn’t dispute the district court's finding that he’s a high-frequency ADA litigant, nor does it provide any explanation as to why his case involved more complex issues than the cases relied upon by the district court.

This was a simple, relatively uncontested case, and given the repetitive nature of high-frequency ADA litigation, there was nothing irrational about the district court's conclusions that, in effect, much of the work here could have been performed by junior associates or even paralegals, or that much of the motion practice in the case was superfluous. As a result, the district court did not abuse its broad discretion. The district court's ruling on the reduced award of attorney’s fees was affirmed. Shayler v. 1310 PCH, LLC, 2022 U.S. App. LEXIS 29512, __ F.4th __ (9th Cir. October 24, 2022).

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