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Pham v. City of Seattle12/20/2004
This appeal concerns the attorney fees awarded against Seattle City Light in an employment discrimination lawsuit, and an award of supplemental damages for the increased tax liability. We hold that the weakness of a plaintiff's case is not an appropriate basis for denying a request for an attorney fees multiplier otherwise justified by the risk involved. We also hold the supplemental damages a successful plaintiff may obtain to cover the adverse tax consequences of a lump sum award may include the consequences attributable to an award for emotional distress. Chuong Van Pham and Heliodoro Lara sued Seattle City Light in 1997. Five years of litigation, including a detour to federal court and two appeals, whittled their lawsuit down to a claim of disparate treatment on the basis of race and national origin. Plaintiffs tried this claim to a jury for three weeks and obtained a verdict for over $550,000. The award was for front and back pay, and for non-economic damages of $120,000.
ATTORNEY FEE MULTIPLIER
The verdict entitled plaintiffs to an award of reasonable attorneys' fees under the Washington Law Against Discrimination, RCW 49.60.030(2). Trial courts must independently determine what are reasonable attorneys' fees, beginning first by calculating a lodestar figure. The lodestar method is grounded in the market value of the lawyer's services, and is determined by multiplying the hours reasonably expended in the litigation by each attorney's reasonable hourly rate of compensation. Steele v. Lundgren, 96 Wn. App. 773, 780, 982 P.2d 619 (1999).
Plaintiffs calculated a lodestar of $347,588.27. The trial court found the hourly rates and the overall time claimed to be generally reasonable. The court made specific modifications resulting in a deduction of some $50,000, to reach a final lodestar amount of $297,532.77 for fees.
In cases where the attorney's compensation is contingent on success, the court may consider the necessity of adjusting the lodestar figure to account for the risk factor. Bowers v. Transamerica Title Ins. Co., 100 Wn.2d 581, 598-99, 675 P.2d 193 (1983). This calls for an assessment of what the likelihood of success was at the outset of litigation. Bowers, 100 Wn.2d at 598-99. The contingency adjustment is designed solely to compensate for the possibility that the litigation would be unsuccessful and that no fee would be obtained. It should not be granted in a case where the hourly rate underlying the lodestar figure already comprehends an allowance for the contingent nature of counsel's work. The burden of justifying any deviation from the lodestar rests on the party proposing the deviation. Bowers, 100 Wn.2d at 598.
In this case, plaintiffs requested a contingency adjustment. Attorney John Sheridan declared that the difficulties of proof were apparent to him as soon as he met plaintiffs Pham and Lara. 'Their case was a difficult one in that each . . . knew that he had been discriminated against but was unable to provide details of the discrimination only a strong belief that each was treated unfairly owing to his race or national origin.' Sheridan explained how he overcame this problem by pursuing a high-risk litigation strategy of proving the case through cross-examination and the testimony of adverse witnesses. 'I chose to call nine adverse witnesses before calling my first friendly witness, because my clients were unable to explain their claims and because the evidence of discrimination was in the actions or inaction of management.'
The court, tracking the factors mentioned in Bowers, found that counsel worked on a contingent fee agreement and that the lodestar hourly rate was consistent with ordinary market rate
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