District Court (Cal.) Rejects Reliance on Consumer Attorneys’ National Survey as Evidence of Reasonableness of Attorneys’ Rates in Southern California

We recently argued, in opposing an attorneys’ fee motion, that a survey of attorneys fee rates across the country – and in California –was unreliable as supporting evidence of a reasonable attorneys’ fee rate.  We argued  

Plaintiffs’ counsel states that they “maintain an updated survey of free rates charged by other California consumer protection attorneys.”  No they don’t.  They just attach a document entitled United States Consumer Law Attorney Fee Survey Report (2010-2011) . . .It’s a publication prepared for the consumer bar’s trade group – the National Consumer Law Center – prepared to give the appearance of a market so the consumer bar has something to submit to justify exorbitant rates. Again, the Report does not reflect economic market forces. To determine a rate structure range, the Report’s author simply asked Plaintiffs’ lawyers what they set their rates at.  Not how; not why; not what market forces act to control or set the rates.  In fact, Plaintiffs omit from the Report the pages that state that only 10.7% of the Plaintiffs’ lawyers in California as a whole even responded to the survey.  And, the survey offers no indication whether the lawyers were southern California, northern California, or somewhere between – as Gorman requires.   Plaintiffs do not demonstrate the statistical significance of the Report, nor do they demonstrate that the Report is geographically relevant under Gorman.

  Judge Otis Wright recently adopted similar arguments in Rubenstein v. National Recovery Agency, Inc., 2012 WL 1425144 (C.D.Cal. 2012), although we were not involved in the Rubenstein case.  In Rubenstein, Judge Otis Wright struck down a Plaintiffs’ counsel’s use of a National Association of Consumer Advocates survey as evidence of supporting a reasonable rate in California.  

The Court must evaluate whether Counsel may reasonably charge $325.00 per hour to litigate a case involving FDCPA and RFDCPA claims. In determining a reasonable hourly rate, a court should con-sider the prevailing rate in the community for similar work by attorneys of comparable skill, experience, and reputation. Van Skike v. Dir. of Office of Workers’ Comp. Programs, 557 F.3d 1041, 1046 (9th Cir.2009). The relevant community is where the district court sits. Id. Accordingly, the Court considers attorney’s fees awards in the Central District of California.  ¶  “Affidavits of the plaintiffs’ attorney and other attorneys regarding prevailing fees in the community, and rate determinations in other cases, particularly those setting a rate for the plaintiffs’ attorney, are satisfactory evidence of the prevailing market rate.” United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir.1990). Counsel has been practicing law for just over 10 years and has substantial experience litigating FDCPA and RFDCPA claims. (Mot. Goldstein Decl. ¶¶ 4–5.) The Court considers these qualifications in analyzing reasonableness of Counsel’s hourly rate. ¶  Plaintiff contends $325.00 is a reasonable hourly rate for an attorney litigating a case involving FDCPA and RFDCPA claims. (Mot.9–10.) Plaintiff supports his contention by citing a consumer law attorney’s fee survey published in 2007 (“2007 Survey”) and two cases where Counsel was previously awarded that rate. (Mot. 9–10 (citing Cuevas v. Check Resolution Servs. Inc., No. 09–CV–8823 (C.D.Cal. Sept. 9, 2010) and Martinez v. Cross Point Assocs., LLC, No. 11–CV–7389 (C.D.Cal. Mar. 12, 2012); Goldstein Decl. 3.) The Court is not persuaded by Plaintiff’s supporting evidence.  ¶  The 2007 Survey reports an average hourly rate of $367.00 for a consumer law attorney in the California Region with 6–10 years of experience. Were the survey results reliable, Plaintiff’s requested hourly rate of $325.00 might seem reasonable; however, the survey is highly suspect. For example, the author is a consumer law attorney and therefore has an inherent conflict of interest in the results of his survey. (Mot.Ex. D.) Likewise, the consumer law attorneys who responded to the survey—if aware it would be used as evidence in the future to support a reasonable hourly rate—had an incentive to inflate their wages. (Id. at 2.) Furthermore, there is an unexplained drop in the reported average hourly rate for attorneys with 21 to 25 years of experience in the California Region. (Id. at 9 (reporting an average hourly rate of $450.00 for attorneys with 16 to 20 years of experience but a rate of only $297.00 for attorneys with 21 to 25 years of experience).) One might suppose this is simply a typographical error, but there are similar instances throughout the report. (Id. at 8 (reporting an abnormally high rate for attorneys with 11 to 15 years of experience in the Atlantic Region); id. at 11 (same for Mid West Region).) Instead, the Court is persuaded that these unexplained drops in the average hourly rate are more likely due to a small survey sample size. The survey fails to indicate how many attorneys provided responses; rather, the survey states only that all active members of the National Association of Consumer Advocates—a group with nationwide membership of apparently less than 2,000—and other consumer law attorneys were invited to participate. (Id. at 2; National Association Of Consumer Advocates, http://www.naca.net (last visited Apr. 20, 2012) (reporting nationwide membership “of more than 1,500 attorneys”).) The survey does not, however, provide the actual response rate. Additionally, the survey admits the results are “for informational purposes only and may or may not be indicative of a particular attorney’s reasonable hourly rate.” (Mot. Ex. D, at 4.) Accordingly, the Court finds the 2007 Survey unreliable as evidence of a reasonable hourly rate.