A California judge has ordered Farmers Insurance to pay almost $2.3 million in attorney’s fees to the lawyers of a successful whistleblower/former in-house attorney who claimed his role as a potential witness in a sex bias class action got him fired. The underlying judgment in favor of the whistleblower was $24.36 million – after the Judge reduced the punitive damages award by more than $131 million.
The employee’s attorneys had sought $6.7 million in prevailing-party attorney’s fees, including a “multiplier” of 2 times the actual fees incurred. The employer, on the other hand, recommended an award of approximately $1 million. On Jan. 20, 2023, Los Angeles Superior Court Judge Ruth A. Kwan awarded the employee’s lawyers $2,266,704, “inclusive of a modest multiplier of 1.1.”
Judge Kwan found the employee’s attorneys’ hourly rates to be excessive. The Judge conducted an analysis of “what amount of fees would be ‘reasonable’ in light of the relative extent or degree of the party’s success in obtaining the results sought.” The lead lawyer for the employee sought an hourly rate of $1,425, hourly rates of up to $1,100 for other senior lawyers and up to $850 for associates who had worked on the case. The Judge reduced these hourly rates across the board in part because they reflected a mix between current and past rates that were in place when the case was first filed in August 2016. The hourly rates for the lead lawyer were reduced to $1,050 and for the other lawyers who worked on the case to a maximum of $825.
In addition, Judge Kwan made an across-the-board reduction of 10% to the attorney’s fees due to perceived duplicative billing. “Excessive billing was evident” from several attorneys who billed for days at trial without “meaningfully contributing.” This 10% reduction in fees also covered challenges regarding “excessive travel time.” Judge Kwan did note, however, that a 1.1 multiplier was appropriate in this case in light of the attorneys’ “exceptional skill” in successfully advocating on behalf of an older white male during the height of the “Me Too” movement.
We previously reported about this case in December 2021, when a Los Angeles jury rendered the eye-popping $155.4 million verdict in favor of the employee, including $150 million in punitive damages. However, in May 2022, Judge Kwan determined that the punitive damages award was excessive and significantly reduced it to $18.945 million (resulting in an approximate 3.5:1 ratio of punitive to compensatory damages). Although the employee accepted the reduced award in lieu of a new trial, Farmers Insurance appealed the reduced verdict, and the employee has since filed an appeal as well.
The appeal is pending in the California Court of Appeal, Second Appellate District, Rudnicki v. Farmers Ins. Exch., et al., Docket No. B321691 (Cal. Ct. App. Jun 27, 2022).
(Link to appeal docket: California Courts – Appellate Court Case Information)