California
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Garlock Sealing v. Nak Sealing-C050813-3/21/07 CA3

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B.         Appellate Principles

                        We review an anti-SLAPP attorney fee award under the deferential abuse of discretion standard.  (Ketchum, supra, 24 Cal.4th at p. 1130; Maughan v. Google, supra, 143 Cal.App.4th at p. 1249.)  The trial court’s fee determination “will not be disturbed unless the appellate court is convinced that it is clearly wrong.”  (Ketchum, supra, 24 Cal.4th at p. 1132, internal quotation marks omitted.)  An attorney fee dispute is not exempt from generally applicable appellate principles:  “The judgment of the trial court is presumed correct; all intendments and presumptions are indulged to support the judgment; conflicts in the declarations must be resolved in favor of the prevailing party, and the trial court’s resolution of any factual disputes arising from the evidence is conclusive.”  (In re Marriage of Zimmerman (1993) 16 Cal.App.4th 556, 561-562.) 

                        When the trial court substantially reduces a fee or cost request, we infer the court has determined the request was inflated.  (Levy v. Toyota Motor Sales, U.S.A., Inc. (1992) 4 Cal.App.4th 807, 817 (Levy).)  The trial court is not required to issue a statement of decision.  (Ketchum, supra, 24 Cal.4th at p. 1140; Maughan, supra, 143 Cal.App.4th at p. 1252; see In re Marriage of Askmo (2000) 85 Cal.App.4th 1032, 1040 [section 632, providing for statements of decision, does not apply to orders on a motion].)  We may not reweigh on appeal a trial court’s assessment of an attorney’s declaration.  (Johnson v. Pratt & Whitney Canada, Inc. (1994) 28 Cal.App.4th 613, 622-623.)  “The trial court, with declarations and supporting affidavits, [is] able to assess credibility and resolve any conflicts in the evidence.  Its findings . . . are entitled to great weight.  Even though contrary findings could have been made, an appellate court should defer to the factual determinations made by the trial court when the evidence is in conflict.  This is true whether the trial court’s ruling is based on oral testimony or declarations.  [Fn. omitted.]”  (Shamblin v. Brattain (1988) 44 Cal.3d 474, 479.)

                        In sum, “‘“While the concept ‘abuse of discretion’ is not easily susceptible to precise definition, the appropriate test has been enunciated in terms of whether or not the trial court exceeded “‘the bounds of reason, all of the circumstances before it being considered. . . .’”  [Citations.]”  [Citation.]  ‘A decision will not be reversed merely because reasonable people might disagree.  “An appellate tribunal is neither authorized nor warranted in substituting its judgment for the judgment of the trial judge.”  [Citations.] . . .’”  (Maughan, supra, 143 Cal.App.4th at pp. 1249-1250.)

C.        Alnor Fails to Demonstrate the Trial Court Abused Its Discretion

          1.      The Trial Court Applied the Lodestar Method

                   Alnor contends the trial court abused its discretion by failing to utilize the lodestar method approved by the Supreme Court for anti-SLAPP fee awards.  (Ketchum, supra, 24 Cal.4th at pp. 1131-1132; Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359 (Horsford).)  Alnor complains the trial court failed to “acknowledge” the lodestar method.  There is no requirement, however, that the trial court provide a statement of decision (see, e.g., Ketchum, at p. 1140) or otherwise detail its fealty to the law, which we presume.  (Evid. Code, § 664.) 

                   In any event, the record shows the trial court applied the lodestar method.  The lodestar tabulation consists simply of “the reasonable hours spent . . . multiplied by the hourly prevailing rate for private attorneys in the community conducting noncontingent litigation . . . .”  (Ketchum, supra, 24 Cal.4th at p. 1133, italics omitted.)  Here, the trial court identified the reasonably compensable attorney hours, 71, and, based on that figure, awarded Alnor $21,300 in fees.  The court did not specify the billing rate, but basic math — dividing the award by the hours credited — reveals a rate of $300 an hour, which the court determined was reasonable and Alnor does not challenge on appeal.  The court’s comment on the rate, combined with the specific number of compensable hours it identified, demonstrates the court applied the lodestar method.  Alnor’s contrary claim is unsupported by the evidence.

                   In a related claim, Alnor suggests the trial court wholly ignored the billing statements submitted by his counsel.  Alnor observes that, “[w]ithout an examination of the time records, a court may lack the foundation to decide that the hours spent were excessive.”  We agree the attorneys’ submissions form the “starting point”  (Horsford, supra, 132 Cal.App.4th at p. 397)  for the trial court’s determination of the “‘hours reasonably expended’” component of the lodestar analysis.  (Ketchum, supra, 24 Cal.4th at p. 1134; see also id. at pp. 1131-1132, italics added [court “assessing attorney fees begins with a touchstone or lodestar figure, based on the ‘careful compilation of the time spent’”].) 

                                    Here, there is no basis for Alnor’s charge that the trial court “fail[ed] to begin the [lodestar] process by examining the billing entries and supporting evidence . . . .”  As the trier of fact, it is the trial court’s role to examine the evidence, and we presume the court performed its duty.  (Evid. Code, § 664.)  Moreover, the record amply demonstrates the trial court’s familiarity with Alnor’s billing submissions.  The trial court specified in its tentative decision that “much of the work done by the different lawyers was duplicative and unnecessary,” “the use of ‘block billing’ obscured the nature of some of the work claimed,” and “[m]uch of the work claimed also appeared more related to preparing the case for trial rather th[a]n advancing the anti-SLAPP motion.”  Thus, Alnor’s suggestion that the trial court failed to review the billing records is baseless.     

          2.      The Trial Court Reasonably Concluded the Billing Hours Alnor Submitted Were Padded and Vague and Therefore Noncredible

                   Alnor contends the trial court “had no reasonable basis for disregarding counsel[’]s   time records.”  It is well-established, however, that the anti-SLAPP statute’s fee provision “‘applies only to the motion to strike, and not to the entire action.’”  (Berti, supra, 39 Cal.4th at p. 381; Lafayette Morehouse, supra, 39 Cal.App.4th at p. 1383.)  Nevertheless, counsel inflated the fee claim with a multitude of time entries devoted to matters other than the motion to strike, thereby undermining the credibility of counsel’s other entries.  For example, counsel sought reimbursement for non-anti-SLAPP efforts such as attacking service of process, preparing and revising an answer to the complaint, summary judgment research, a senior associate’s “[w]ork on [a] press release,” and a conference “regarding the appropriate way to address opposing counsel and the client.” 

                   The record suggests Alnor sought to transfer to the opposing parties the cost of every minute counsel expended on the case, whether or not anti-SLAPP work was involved.  The fee request included, for example, billings for obtaining the docket at the inception of the case, obtaining unspecified but “numerous court documents,” and attending the trial court’s mandatory case management conference — all of which would have been incurred whether or not Alnor filed the motion to strike.  Indeed, counsel even sought reimbursement for drafting the client retention agreement, which does not appear to have been limited to anti-SLAPP measures given the hours counsel billed for other work.  Counsel’s willingness to flout the statutory restriction on the scope of anti-SLAPP fee claims justified the trial court in taking a jaundiced view of the fee request.

                   Counsel compounded the boldness of unauthorized reimbursement requests with vague billing entries.  At least 20 entries described the trial-level work for which counsel sought fees as merely “further handling.”  And more than one-third of the billing entries submitted for counsel’s trial-level work made no reference at all to the motion to strike or otherwise designated the hours expended as anti-SLAPP work.  “The ‘experienced trial judge is the best judge of the value of professional services rendered in his court . . . .’”  (Priest, supra, 20 Cal.3d at p. 49.)  Substantial evidence supports the trial court’s conclusion blockbilling “obscured the nature of some of the work claimed,” further damaging counsel’s credibility.  Blockbilling, while not objectionable per se in our view, exacerbated the vagueness of counsel’s fee request, a risky choice since the burden of proving entitlement to fees rests on the moving party.  (Computer Xpress, supra, 93 Cal.App.4th at p. 1020.) 

                   Where, as here, the trial court severely curtails the number of compensable hours in a fee award, we presume the court concluded the fee request was padded.  (Levy, supra, 4 Cal.App.4th at p. 817 [substantial fee reduction “indicat[es] Levy improperly inflated his claimed” attorney fees]; see Maughan, supra, 143 Cal.App.4th at pp. 1251-1252.)  An attorney’s chief asset in submitting a fee request is his or her credibility, and where vague, blockbilled time entries inflated with noncompensable hours destroy an attorney’s credibility with the trial court, we have no power on appeal to restore it.  (See Vella v. Hudgins (1984) 151 Cal.App.3d 515, 524  [“The trial court is not bound by an attorney’s evidence in support of his requested fee”].)

                        We note Alnor’s anti-SLAPP motion did not require intensive discovery.  The billing entries in the fee request reveal Alnor furnished counsel with the requisite supporting documents, which do not appear to have been voluminous because, to the extent discernible in the blockbilled entries, counsel only spent a couple hours reviewing them.  They appear to consist simply of excerpts from plaintiffs’ website and five republications of Alnor’s comments by two media outlets. 

                        There is no evidence counsel devoted extensive time to investigation.  Counsel’s two-paragraph declaration attached to the motion to strike states merely that she conducted a Google search yielding hits on “Christian Research Institute” and “Hank Hanegraaff.”  The lone reference in the billing entries to any postal service investigation is a single telephone call.  In addition to her own declaration, counsel prepared a two-page declaration for Jay Howard, director of The Religious Research Project, and a seven-page effort for Alnor, which devoted four pages to his lifetime employment history and three pages to his version of his earlier telephone calls to the post office.

                        Faced with a motion that involved little or no time spent on discovery, the trial court was justifiably puzzled at the size of the fee request.  The trial court observed the matter was not particularly complicated for an anti-SLAPP motion, and nothing in counsel’s billing submission establishes otherwise.  The attorneys’ legal research entries do not suggest the pertinent issues were difficult, since counsel spent almost as much time on mundane research concerning page-limit extensions and whether the trial court had discretion to delay the motion hearing beyond 30 days as on any particular substantive question.  Indeed, the five attorneys Alnor deployed on the motion appear to have expended more time telephoning, conferencing, and e-mailing each other than on identifiable legal research for the motion, supporting the trial court’s conclusion the matter was overstaffed.  In sum, based on the trial court’s own observations in managing the proceedings up to the hearing and on the billing record eventually submitted, the court could reasonably determine counsel’s fee request was unreasonably padded, vague, and worthy of little credence.

                   As the trier of fact, the trial court’s assessment of the reasonableness of counsel’s efforts in his or her courtroom on a motion to strike naturally informs that court’s conclusions regarding fees on appeal, which the trial court determines.  Our experience, while not determinative, confirms the trial court’s conclusion the matter was not so complex as to require anywhere near the massive number of hours for which counsel demanded fees.  Counsel repeatedly refers to the six following issues as particularly complex, but we note the first two are settled as hornbook law in the anti-SLAPP context (see Christian Research Institute v. Alnor (2007) 148 Cal.App.4th 71, 80 (Christian Research)) and the final three are duplicative, merely reiterating application of the actual malice standard in this case. 

                   Counsel contends:  “One need only skim the opinion of this Court to see how complex, and sometimes novel, the issues involved in this anti-SLAPP motion were. Those issues included:  (1) whether a plaintiff was required to present admissible evidence to demonstrate a probability of prevailing on the merits; (2) whether it is proper for the trial court to weigh the evidence in ruling on anti-SLAPP motions; (3) whether Plaintiffs were required to prove falsity by clear and convincing evidence or by a preponderance of the evidence; (4) whether Plaintiffs had shown actual malice by clear and convincing evidence, including reviewing each piece of evidence and each step of Alnor’s investigation; (5) whether Plaintiffs’ showing that the evidence supported an inference that Alnor acted with actual malice met the clear and convincing standard; and (6) whether Plaintiffs had demonstrated any connection between Alnor’s alleged ill will toward them and Alnor’s belief about the truth of his publication.”  

                        True, the third issue presented a First Amendment question still unanswered by the United States Supreme Court, and we were the first California court to hold a defamation plaintiff need only demonstrate falsity by a preponderance of evidence, disagreeing with Annette F. v. Sharon S. (2004) 119 Cal.App.4th 1146.  (See Christian Research, supra, 148 Cal.App.4th at pp. 81-82.)  But we resolved this issue without any aid from Alnor, specifically noting in our opinion that “Alnor provide[d] no argument why the element of falsity requires a clear and convincing evidence standard to protect freedom of expression.”  (Id. at p. 82.)  We resolved the issue simply based on the Evidence Code’s default rule that the burden of proof is a preponderance of the evidence unless otherwise specified.  (Ibid.; Evid. Code, § 115.)

                   That is not to say Christian Research was an easy case.  Our dissenting colleague there ably demonstrated reasonable minds could disagree concerning “application of the law to the facts in this case.”  (Christian Research, supra, 148 Cal.App.4th at p. 93 (dis. opn. of Rylaarsdam, J.).)  But a case that presents a close question based on the facts is not necessarily a complex or time-consuming one.  Here, for instance, the dissent concurred the legal issues were not overly complex, “wholly agree[ing] with my colleagues’ legal analysis.”  (Ibid.)  Indeed, as we discussed, and the dissent agreed, ample precedent dating back more than two decades established that a reviewing court exercises its independent judgment to determine whether a defamation plaintiff has presented evidence of malice “‘“sufficiently strong to command the unhesitating assent of every reasonable mind.”’”  (Id. at p. 85, italics added.) 

                   Given that precedent so amply established the controlling issue, the trial court was entitled to note, in assessing the reasonableness of more than 400 hours counsel logged on appeal, that counsel failed to uncover or cite the seminal cases applying the dispositive standard.  (Fletcher v. San Jose Mercury News (1989) 216 Cal.App.3d 172; see McCoy v. Hearst Corp. (1986) 42 Cal.3d 835, 846 [reviewing “court is not bound to consider the evidence of actual malice in the light most favorable to respondents or to draw all permissible inferences in favor of respondents”]; rather, see Bose Corp. v. Consumers Union of U.S., Inc. (1984) 466 U.S. 485, 511 [reviewing judges, “as expositors of the Constitution, must independently decide whether the evidence in the record is sufficient to cross the constitutional threshold [to establish] clear and convincing proof of ‘actual malice’”]; see generally Christian Research, supra, 148 Cal.App.4th at p. 86.)  Alnor points to our resubmission of the case as evidence of its complexity but, as the trial court no doubt understood, other cases compete for our attention, sometimes requiring resubmission.