(2001) 24 Cal.4th 1122
Supreme Court of California · Decided February 26, 2001
01. Facts
Smith A. Ketchum III owned a multi-unit apartment building in Sausalito; his tenant, John M. Moses, reported numerous code violations to government agencies (24 Cal.4th at p. 1127). According to another tenant, Ketchum called Moses a “troublemaker” and vowed to “get [him] into court” and “keep him there,” boasting he could afford the best lawyers while Moses could only get “cheap legal aid” (id. at p. 1127). In October 1995, Ketchum sued Moses; Moses prevailed on an anti-SLAPP motion and sought attorney fees, raising how such fees should be calculated (id. at p. 1127).
02. Procedural posture
The Supreme Court addressed the proper method for calculating statutory attorney fees, including the use of a multiplier, and reversed in part (24 Cal.4th at p. 1127).
03. Issue
How statutory attorney fees should be calculated — specifically, whether courts should use the lodestar method (reasonable hours times a reasonable hourly rate) and whether the lodestar may be enhanced by a multiplier to account for factors such as the contingent risk of nonpayment.
Holding
Statutory attorney fees are calculated by the lodestar method — the reasonable hours expended multiplied by a reasonable hourly rate — and the lodestar may be adjusted by a multiplier based on factors including the contingent risk of the representation, the novelty and difficulty of the issues, the skill displayed, and the extent to which the litigation precluded other work, so that the fee approximates the market value of comparable legal services.
05. Reasoning
The court explained that the lodestar is the basic, objective starting point for a reasonable fee, and that enhancements (or reductions) calibrate the award to the market value of the services and the risk counsel assumed. A contingency-risk multiplier compensates for the possibility of no recovery and is essential to attracting competent counsel to risky public-interest and fee-shifting cases; the trial court must exercise informed discretion in setting any multiplier.
Practice Pointer
Ketchum is the controlling authority on the lodestar method and fee multipliers across California fee-shifting statutes, including FEHA. Plaintiff’s counsel should document hours and prevailing market rates meticulously to establish a strong lodestar, then build the record for a multiplier — especially the contingent risk undertaken and the difficulty and significance of the case.
06. Open questions
Ketchum framed the lodestar-and-multiplier approach but left the size and propriety of any enhancement to the trial court’s discretion, and the permissible factors and limits on multipliers (and their interaction with statutory fee provisions like FEHA’s) continue to be refined in later fee litigation.
Cite this entry
Ketchum v. Moses (2001) 24 Cal.4th 1122.
“Plaintiff Smith A. Ketchum III owns a multi-unit apartment building in Sausalito.” — 24 Cal.4th at p. 1127
Source: California Official Reports – [insert durable courts.ca.gov / Official Reports link at verification].
Read the full opinion (free full text · Justia) →
See also: FEHA Fee Haircuts and the Scrutiny Split