March 28, 2023

Volume XIII, Number 87


March 27, 2023

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Los Angeles Court Orders Employer To Pay Whistleblower $2.3 Million In Attorney’s Fees On Top Of $24 Million Judgment

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). The plaintiff accepted the reduced award in lieu of a new trial.  However, Farmers Insurance appealed the reduced verdict.

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).

© 2023 Proskauer Rose LLP. National Law Review, Volume XIII, Number 26

About this Author

Anthony J Oncidi, Employment Attorney, Proskauer Rose Law Firm

Anthony J. Oncidi heads the Labor & Employment Law Group in the Los Angeles office. Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection....

David R. Gobel Labor and Employment Lawyer Proskauer Rose

David R Gobel is an associate in the Labor Department and a member of the Employment Litigation & Counseling Group. 

David Gobel earned his J.D at USC Gould School of Law, where he was a Senior Citations Editor of the USC Journal of Interdisciplinary Law, and part of the executive committee of USC’s Music Law Society. Prior to law school, David worked as a research executive for a marketing research firm in New York.