Piping Rock Partners, Inc. v. David Lerner Associates, Inc.
3:12-cv-04634
N.D. Cal.Aug 18, 2015Background
- Plaintiff Chris Germain (sole shareholder of Piping Rock Partners, Inc.) operated the blog REIT Wrecks and posted criticisms of defendants’ conduct regarding non-traded REITs; FINRA later filed a complaint against defendant broker DLA.
- Defendants (David Lerner, DLA, and broker George Dobbs) allegedly ran a retaliatory online “smear campaign” in June 2011; Dobbs admitted authoring eight identical posts accusing Germain/Piping Rock of fraud.
- Plaintiffs sued in state court for libel and intentional interference; defendants removed to federal court and filed counterclaims; both sides filed anti‑SLAPP motions.
- The district court granted plaintiffs’ special motion to strike under California’s anti‑SLAPP statute; the Ninth Circuit affirmed.
- Plaintiffs moved for mandatory attorney fees under Cal. Civ. Proc. Code § 425.16(c)(1), seeking $102,561.80 for work on the anti‑SLAPP motion and the fees motion; defendants contested reasonableness, block billing, duplication, Mr. Ball’s eligibility for fees, and proof of payment.
- The court reduced the requested award by $7,361.50 for conceded and vacated-argument time and awarded plaintiffs $95,200.30 in fees and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to mandatory fees under the anti‑SLAPP statute | Prevailing on special motion to strike entitles them to mandatory fees and costs | Defendants did not dispute entitlement after prevailing motion outcome | Court applied §425.16(c)(1) and granted fees (statute mandates fees for prevailing defendant on special motion to strike) |
| Reasonableness of hours (block billing / documentation) | Billing and declarations sufficiently documented hours; conceded small number of non‑compensable hours | Block billing prevents disaggregation of compensable vs. non‑compensable work; some entries vague | Court found documentation adequate, accepted block billing here, deducted 3.1 hours plaintiffs conceded, and declined larger reductions for vagueness |
| Duplication / overlapping work (two firms, oral argument prep) | Use of two firms and joint preparation was reasonable given complexity and overlap; travel and oral argument time were tied to compensable issues | Hiring two firms and having both attend argued to duplication and excessive billing | Court held use of two firms reasonable, travel and oral argument prep compensable because motions were inextricably intertwined; allowed related hours |
| Fees for attorney who was formerly affiliated with plaintiff (Mr. Ball) | Ball was a private partner at Ball Law during litigation and acted as outside counsel entitled to fees | Ball previously listed on Piping Rock site; defendants argued his fees should be disallowed as "self‑representation" or ineligible | Court found Ball was not in‑house/party representative during litigation and ruled he may recover fees (PLCM analysis applies) |
Key Cases Cited
- Ketchum v. Moses, 24 Cal.4th 1122 (mandatory attorney fees for successful anti‑SLAPP defendant)
- PLCM Group v. Drexler, 22 Cal.4th 1084 (in‑house counsel may recover attorney fees)
- Maughan v. Google Tech., Inc., 143 Cal. App.4th 1242 (court may reduce unreasonable hours claimed for anti‑SLAPP motion)
- Christian Research Institute v. Alnor, 165 Cal. App.4th 1315 (fees recoverable only for motion to strike, but may include related enforcement work)
- Graham‑Sult v. Clainos, 756 F.3d 724 (each fee application assessed on its own circumstances; inextricably intertwined work may be compensable)
- Hensley v. Eckerhart, 461 U.S. 424 (lodestar method; exclude hours excessive, redundant, unnecessary)
- Kearney v. Foley & Lardner, 553 F. Supp.2d 1178 (work on common issues need not be apportioned under anti‑SLAPP)