affirming bankruptcy court decision requiring Chapter 11 debtor’s counsel to submit evidence of prevailing rates charged by bankruptcy attorneys in the community in order to establish a reasonable hourly rate
How later courts described this case
- affirming bankruptcy court decision requiring Chapter 11 debtor’s counsel to submit evidence of prevailing rates charged by bankruptcy attorneys in the community in order to establish a reasonable hourly rate
Written by the judges who cited it.
The opinion
1 UNITED STATES BANKRUPTCY COURT
2 EASTERN DISTRICT OF CALIFORNIA
3
4 In re: ) Case No. 23-90032-B-13
)
5 RACHELLE EDITH LUPEKHA, ) DC No. CRG-3
)
6 )
Debtor(s). )
7 ________________________________)
8
MEMORANDUM DECISION GRANTING IN PART AND DENYING IN PART
9 APPLICATION FOR COMPENSATION
10
Introduction
11
This is a continued proceeding on an application for
12
compensation filed by attorney Carl R. Gustafson (“Counsel”) as
13
the attorney of record for chapter 13 debtor Rachelle Lupekha.
14
The court issued a conditional ruling on March 5, 2024, granting
15
in part and denying in part the application. See Docket 56.1
16
The conditional ruling approved and allowed paralegal fees
17
in the amount requested, approved and allowed expenses in the
18
amount requested, and reduced the attorney’s fees requested based
19
on a reduction of Counsel’s hourly rate which he unilaterally
20
increased from $375.00 previously approved and allowed in this
21
case to $450.00 based on a 20% California State Bar board
22
certification enhancement reserved for the chapter 13 “no-look”
23
fee. The conditional ruling also permitted any party in interest
24
to file a response by March 8, 2024. Id. at 5-6. Counsel filed
25
a Response to Pre-Disposition Tentative Ruling on March 8, 2024.
26
27
28 1The conditional ruling is incorporated herein and made a
part of this memorandum decision by this reference. It is also
attached as Appendix A.
See Docket 58. The court issues this memorandum decision to
2 |) supplement its conditional ruling and to address the response.*
3
4 || Discussion
5 Counsel disputes only the $375.00 attorney’s fees hourly
rate approved and allowed in the conditional ruling. Counsel
7! wants to be compensated at an hourly rate of $450.00. Counsel
8 || believes he is entitled to a $450.00 hourly rate because he is
9] board certified. He also asserts that a $450.00 hourly rate is
10 || inherently reasonable in the Eastern District of California for
an attorney with his years of experience, i.e., just over sixteen
12 || years. The court disagrees.
13 As an initial matter, Counsel has failed to satisfy the
14 || basic burden of a fee applicant. As the United States Supreme
15 Court stated in Blum v. Stenson, 465 U.S. 886 (1984):
16 To inform and assist the court in the exercise of its
discretion, the burden is on the fee applicant to
17 produce satisfactory evidence-in addition to the
attorney’s own affidavits—that the requested rates are
18 in line with those prevailing in the community for
similar services by lawyers of reasonably comparable
19 skill, experience and reputation.
at 895 n.11. This, of course, is nothing new. In fact, one
21 |) would expect this to be common knowledge for a board certified
22 || —___ SSS
23 "The court has reviewed the response and its related
declaration and exhibits. The court has also reviewed and takes
24 || judicial notice of the docket. See Fed. R. Evid. 201(c) (1).
Oral argument is not necessary and will not assist in the
25 decision-making process. See Local Bankr. R. 1001-1(f£), 9014-
26 1(h). The continued hearing on March 19, 2024, at 1:00 p.m. will
be vacated, and the court will adopt the conditional ruling and
27 | this supplement as its final decision and its findings of fact
and conclusions of law. See Fed. R. Civ. P. 52(a); Fed. R.
28 || Bankr. P. 7052, 9014(c).
- 2? -
1 attorney because this court said the same thing thirty-five years
2 ago in In re Gianulias, 98 B.R. 27 (Bankr. E.D. Cal. 1989),
3 aff’d, 111 B.R. 867 (E.D. Cal. 1989).
4 Here, Counsel submitted no evidence with his fee application
5 or the response, in the form of declarations or otherwise, that
6 establishes other bankruptcy attorneys in the Eastern District of
7 California with just sixteen years of experience, board certified
8 or not, charge an hourly rate of $450.00. Instead, counsel
9 relies entirely on legal arguments that he is entitled to be
10 compensated at an hourly rate of $450.00 based on a 20% board
11 certification enhancement - whether by analogy to the local rules
12 that allow a 20% enhancement to the chapter 13 “no-look” fee or
13 under 11 U.S.C. §§ 330(a)(3)(E) and 330(a)(4)(B) - and the
14 enhanced hourly rate of $450.00 is inherently reasonable. Of
15 course, legal arguments are not evidence. And in any event,
16 Counsel’s legal arguments are without merit.
17 Counsel’s arguments are based on a single district court
18 decision the court cited in its conditional ruling, i.e.,
19 Momentum Commercial Funding, LLC v. Project Storm, LLC, 2022 WL
20 2817429 (E.D. Cal. July 18, 2022), adopted in full, 2022 WL
21 3578571 (E.D. Cal. Aug. 19, 2022). Counsel attempts to
22 substantiate both his entitlement to an enhanced hourly rate of
23 $450.00 and the reasonableness of a $450.00 enhanced hourly rate
24 by manipulating the actual and approved hourly rates of the
25 attorney involved in Momentum Commercial under what is commonly
26 referred to as the Laffey matrix. Problem is, the Ninth Circuit
27 has discredited the Laffey matrix as unreliable and rejected it
28 as unworkable in this Circuit. As the Nevada district court
- 3 -
1] explained in Voggenthaler v. Maryland Square, LLC, 2010 WL
21 4316883 (D. Nev. Oct. 20, 2010):
3 In this matter, the Court rejects the use of the Laffey
matrix to determine the reasonable hourly rate for
4 purposes of awarding attorneys’ fees. In Prison Legal
News, [608 F.3d 446 (9th Cir. 2010})] the Ninth Circuit
5 stated that a district court does not need to use the
Laffey matrix for purposes of determining appropriate
6 hourly rates. 608 F.3d at 454. The Ninth Circuit
noted that the ‘Laffey matrix is an inflation-adjusted
7 grid of hourly rates for lawyers of varying levels of
experience in Washington D.C.’ Id. According to the
8 Ninth Circuit, ‘just because the Laffey matrix has been
accepted in the District of Columbia does not mean that
9 it is a sound basis for determining rates elsewhere,
let alone in a legal market 3,000 miles away.’ Id.
10 Thus, the Court will apply the Lodestar method and look
to the prevailing market rates in Las Vegas, Nevada.
11
Id. at *3.
12
This court agrees with Voggenthaler to the extent it relied
13
on Prison Legal to discredit and reject the Laffey matrix and
14
instead looked to prevailing local market rates. The Hastern
15
District of California district court shares the same view. See
16
e.g., Cabardo v. Patacsil, 2022 WL 956951, at *3 (E.D. Cal. March
17
30, 2022) (“The Eastern District has repeatedly declined to adopt
18
the Laffey matrix, as it only surveys prevailing rates in the
19
Washington, D.C. legal community and does not directly correlate
20
to hourly rates for attorneys and paralegals in other parts of
21
the country.”); Chapman v. Jacobs, 2019 WL 4259765, at *4 (E.D.
22
Cal. Sept. 9, 2019) (declining to use the Laffey matrix to
23
determine a reasonable hourly rate because ‘it is not an accurate
24
tool to assess market rates in this district’) aff’d, 836 Fed.
25
App’ x 606 (9th Cir. 2021). So too does the Northern District of
26
California. See e.g., Theodore Broomfield v. Craft Brew
27
Alliance, Inc., 2020 WL 1972505, at *27 (N.D. Cal. Feb. 5, 2020).
28
- 4 -
1] Accordingly, this court will not use the Laffey matrix for any
2 ||) purpose, generally, and, particularly, it will not use it to
3 manipulate a reasonable hourly rate in this case or in this
4 district.
5 Without evidence from Counsel that satisfies his basic
burden as the fee applicant, and with the Laffey matrix rejected,
7 the court will rely on its own knowledge of local customary
hourly rates based on years of experience within the Eastern
District of California as the relevant legal market. Ingram v.
10 | Oroudjian, 647 F.3d 925, 928 (9th Cir. 2011). And it does so
11} guided by the two other decisions cited in the conditional ruling
12 | which the response ignores, i.e., Ambrose v. US Med-Equip, LLC,
13] 2024 WL 307843 (E.D. Cal. Jan. 26, 2024), and In re Howell, 2023
WL 3486669 (Bankr. E.D. Cal. May 14, 2023).
15 The district court in Ambrose recognized that “[i]n the
16 || Fresno Division of the Eastern District of California, across a
17 || variety of types of litigation, generally, attorneys with
18 || experience of twenty or more years of experience are awarded
19} $350.00 to $400.00 per hour; attorneys with ten to twenty years
20 | of experience are awarded $250.00 to $350.00 per hour[.]”
21 |] Ambrose, 2024 WL 307843 at *15.° This court in Howell approved a
221 $450.00 hourly rate as reasonable rate for an attorney with “more
23} than three decades” of bankruptcy experience. Howell, 2023 WL
24 3486669 at *11. Ambrose is instructive because it recognizes
25
26 *Perez v. All Ag., Inc., 2021 WL 3129602, at *5 & n.7 (E.D.
27" Cal. July 23, 2021), notes there is no distinction in hourly
rates between Sacramento and Fresno divisions, particularly in
28 || soecialized areas of practice.
~5 -
1 that an hourly rate of $400.00 is reasonable for attorneys with
2 over twenty years experience. Howell is instructive because it
3 recognizes that an hourly rate of $450.00 is reasonable for an
4 attorney with over thirty years of experience. Counsel’s years
5 of experience fall short of both thresholds.
6 Ambrose and Howell are also recent decisions which means
7 they are more timely and more relevant snapshots of reasonable
8 rates in the Eastern District of California without the need for
9 any Laffey matrix manipulation. Ambrose was decided less than
10 two months ago and Howell was decided less than ten months ago.
11 The court does not completely discount Momentum Commercial
12 in its analysis. In fact, the decision remains relevant not for
13 the actual or requested rates involved in the case, or for a
14 manipulation of those rates under the Laffey matrix, but for
15 evidence the fee applicant submitted to demonstrate that the
16 hourly rate at which he requested to be compensated was below
17 local market rates and therefore reasonable. To demonstrate
18 this, the fee applicant surveyed actual rates charged by Eastern
19 District of California bankruptcy practitioners with whom he best
20 compared and found as follows:
21 a. one bankruptcy attorney with forty-two years of
experience billed at $490.00;
22
b. another bankruptcy attorney with forty-one years
23 of experience billed at $600.00;
24 c. another bankruptcy attorney with thirty-four years of
experience billed at $525.00;
25
d. another bankruptcy attorney with thirty-two years of
26 experience billed at $525.00;
27 e. another bankruptcy attorney with forty-nine years of
experience billed at $625.00;
28
- 6 -
1 f. another bankruptcy attorney with fifteen years of
experience billed between $390.00-$500.00; and
2
g. another bankruptcy attorney with forty-one years of
3 experience billed at $435.00.
4 Momentum Commercial Funding, LLC, v. Project Storm, LLC, Case
5 2:21-cv-00981-KJM-KJN, Docket 19 at ¶¶ 8-11 (supplemental
6 declaration filed May 24, 2022).
7 The important take-aways from the Momentum Commercial
8 bankruptcy practitioner hourly rate survey are twofold. First,
9 Eastern District of California bankruptcy attorneys with
10 substantially more years of experience than Counsel’s sixteen
11 years bill at hourly rates closer to Counsel’s requested $450.00
12 hourly rate. Second, a $450.00 hourly rate for an Eastern
13 District of California bankruptcy attorney with just over sixteen
14 years of experience is not reasonable.4
15 Taking all of this into consideration, the court concludes
16 that, in this case, $375.00 is a reasonable hourly rate for an
17 attorney, such as Counsel, with just over sixteen years
18 experience. In fact, not only is a $375.00 hourly rate
19 reasonable under the facts and circumstance of this case, but it
20 is extremely generous inasmuch as it falls above the range of
21 reasonable hourly rates for attorneys, like Counsel, with
22 experience in the ten to twenty year range noted in Ambrose,
23 i.e., $250.00 to $350.00.
24 That Counsel may be board certified does not change the
25
4Even when compared with the surveyed rates on an average
26
basis, a $450.00 hourly rate is disproportionate to just over
27 sixteen years of experience. The average hourly rate of the
surveyed bankruptcy attorneys is $528.57 and their average years
28 of experience is 36.28.
- 7 -
1 result, at least in this case.5 Board certification by the
2 California State Bar requires “demonstration of a broad-based and
3 comprehensive experience in the specialty area based on
4 completion of a variety of matters in the specialty area[.]”
5 https://www.calbar.ca.gov/attorneys/legal-specialization (viewed
6 on March 14, 2024). The court is not convinced that Counsel
7 satisfied this standard, at least when this case was filed on
8 January 27, 2023, and during the time it has been pending. The
9 court recently discovered that throughout 2023 Counsel excluded
10 services the local rules characterize as “basic services” that
11 attorneys who represent debtors must provide in bankruptcy cases.
12 See In re Pegany, Case No. 23-23448, Dockets 22, 30, and 34
13 (order to show cause regarding Counsel’s exclusion in chapter 7
14 cases of services required under Local Bankr. R. 2017-1(a)(1)
15 which Local Bankr. R. 2016-3 characterizes as “basic services”).
16 Although the problem has been fixed, as a board certified
17 attorney who represents an overwhelming number of debtors,
18 Counsel is expected to be intimately familiar with the court’s
19 local rules and proficient in their application particularly with
20 regard to local rules that apply directly to debtors’ attorneys
21 and govern the scope of their representation in bankruptcy cases
22 filed in this district. Having failed in that endeavor during
23 the relevant period, the court is hard-pressed to find that an
24 hourly rate enhancement for board certification is appropriate or
25
5Since Counsel repeatedly touts his board certification as a
26
reason to enhance his hourly rate, as support for an increase in
27 the $375.00 hourly rate to $450.00, and as support for the
argument that a $450.00 hourly rate is reasonable in this case
28 the court must address it.
- 8 -
1 warranted in this case.
2
3 Conclusion
4 The conditional ruling of March 5, 2024, as supplemented
5 herein, is adopted as the court’s final decision and as its
6 findings of fact and conclusions of law. Counsel’s application
7 for compensation will be ORDERED APPROVED IN PART AND DENIED IN
8 PART as stated in the conditional ruling.
9 The court’s decision is firm. Counsel’s arguments have been
10 thoroughly considered in the context of the initial fee
11 application and the response. The court will therefore not
12 entertain any motion for reconsideration on the basis it
13 “overlooked” an argument. See Arellano v. Blahnik, 2021 WL
14 1515564 (S.D. Cal. April 16, 2021). Absent highly unusual
15 circumstances, a motion for reconsideration is appropriate, and
16 therefore will be entertained, only if the court is “presented
17 with newly discovered evidence, committed clear error, or if
18 there is an intervening change in the controlling law.” Kona
19 Enterprises, Inc. v. Estate of Bishop, 229 F3d 877, 890 (9th Cir.
20 2000) (internal quotes omitted).
21 A separate order will issue.
22
23
24
25
26
27
28
- 9 -
1 APPENDIX A
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF CALIFORNIA
CIVIL MINUTES
_____________________________________________________________________
Case Title: Rachelle Edith Case No.: 23-90032 - B - 13
Lupekha
Docket Control No. CRG-3
Date: 03/05/2024
Time: 1:00 PM
Matter: [50] - Motion/Application for Compensation [CRG-3] by the
Law Office of Lincoln Law for Carl R Gustafson, Debtors Attorney(s).
Filed by Carl R. Gustafson (vrof)
Judge: Christopher D. Jaime
Courtroom Deputy: Michelle
Peterson
Reporter: Not Recorded
Department: B
_____________________________________________________________________
APPEARANCES for:
Movant(s):
None
Respondent(s):
None
_____________________________________________________________________
CIVIL MINUTES
Motion Conditionally Approved in Part, Denied in Part and Motion and
Hearing Continued to 3/12/2024 at 1:00 PM at Modesto Courtroom
See Findings of fact and conclusions of law below
Introduction
Before the court is an Application for Additional Attorney’s Fees
filed by Carl R. Gustafson (“Counsel”) as the attorney of record for
Chapter 13 debtor Rachelle Edith Lupekha (“Debtor”). The application
requests additional compensation in the amount of $8,695.50 which
includes the following: (i) attorney’s fees in the amount of $6,885.00
(15.30 hours x $450.00/hr.); (ii) paralegal fees in the amount of
$1,757.50 (9.50 hours x $185.00/hr); and (iii) expenses in the amount
of $53.00.
The court has reviewed the application and all related declarations
and exhibits. The court has also reviewed and takes judicial notice
of the docket. See Fed. R. Evid. 201(c)(1). Oral argument is not
necessary and will not assist in the decision-making process. See
Local Bankr. R. 1001-1(f), 9014-1(h). For the reasons explained
below, paralegal fees and expenses will be allowed in the amount
requested. However, attorney’s fees will be reduced.
The court’s decision is to conditionally approve in part and deny in
part the application for additional compensation and continue the
hearing to March 12, 2024, at 1:00 p.m.
Discussion
Counsel has elected to receive compensation in this Chapter 13 case
pursuant to Local Bankr. R. 2016-1(b) that requires a fee application
and court approval under 11 U.S.C. § 330 rather than pursuant to Local
Bankr. R. 2016-1(c), which provides for a flat-rate “no-look” fee
1
without the need for court approval and a fee application.
Counsel states that he contracted with the Debtor for attorney’s fees
at an hourly rate of $525.00 and paralegal fees at an hourly rate of
$215.00. Counsel acknowledges that his hourly rate of $525.00 has
previously been determined by this court to be unreasonable and has
been reduced as such. For that reason, Counsel voluntarily reduced
his hourly rate for purposes of the current fee application from
$525.00 to $450.00.
Counsel states that his reduced hourly rate of $450.00 includes a 20%
increase to a previously-approved hourly rate in this case of $375.00.
Counsel bases the 20% increase on the board certification enhancement
to the “no-look” fee permitted for opt-in attorneys under Local Bankr.
2
R. 2016-1(c)(1)(C). Counsel recognizes that the 20% enhancement
directly applies only to the “no-look” fee and only to board certified
opt-in attorneys. Nevertheless, as a board certified opt-out
1
Receipt of compensation pursuant to a § 330 fee application under
Local Bankr. R. 2016-1(b) is typically referred as an “opt-out”
election whereas receipt of the “no-look” fee under Local Bankr. R.
2016-1(c) is typically referred to as an “opt-in” election. See Local
Bankr. R. 2016-1(a). The court will use these terms for purposes of
clarity.
2
Local Bankr. R. 2016-1(c)(1)(C) states as follows:
Attorneys who are board certified in bankruptcy law by the
State Bar of California Board of Legal Specialization or by
the American Board of Certification on the date of the
petition may increase the fee to which they would be
entitled under subdivision (c)(1), or any later increased
fee thereunder, by 20%. Not later than 28 days after filing
the petition, any attorney contending entitlement to the
fee enhancement under this provision shall file EDC Form 3-
750.
attorney, Counsel asserts that he, too, is entitled to the same 20%
enhancement to his hourly rate by analogy to Local Bankr. R. 2016-
1(c)(1)(C). Counsel raises a valid but probably unnecessary point
because § 330(a)(3)(E), applicable to requests for compensation by
opt-out Chapter 13 debtors’ attorneys through § 330(a)(4)(B), already
allows the court to consider board certification as a factor in the
context of fee applications filed under § 330.
In any event, the result in this case is the same regardless of
whether the 20% hourly-rate enhancement is sought by analogy to Local
Bankr. R. 2016-1(c)(1)(C) or under § 330(a)(3)(E)/§ 330(a)(4)(B).
That is, under the facts and circumstances of this case, the enhanced
hourly rate is unreasonable.
As an initial matter, the 20% board certification enhancement allowed
under Local Bankr. R. 2016-1(c)(1)(C) increases the “no-look” fee and
not opt-in attorneys’ hourly rates. Indeed, hourly rates are largely
irrelevant in the context of a “no-look” fee and, to the extent they
are relevant, they are presumed to be reasonable. In re Villaverde,
2016 WL 1179343, at *1 (Bankr. S.D. Fla. March 25, 2016) (“A no look
fee is a flat fee, usually adopted within a district by local rule or
guideline ... It is a presumptively reasonable fee based on local
hourly rates, and the general amount of work required by a typical
chapter 13 case.”).
The same is not true with regard to compensation requested by opt-out
attorneys, generally, or, specifically, their hourly rates. Hourly
rates of opt-out attorneys do not enjoy the same presumption of
reasonableness incorporated into the “no-look” fee. Rather, it is
incumbent on opt-out attorneys requesting compensation under Local
Bankr. R. 2016-1(b) and § 330 to demonstrate - and for the court to
find - that hourly rates charged debtors are reasonable rates in the
Eastern District of California bankruptcy court. See e.g., 11 U.S.C.
§ 330(a)(3)(B), 330(a)(4)(B); see also In re Gire, 107 B.R. 739, 742
(Bankr. E.D. Cal. 1989). The court sees no reason - and Counsel has
offered none - why the same analysis should not apply equally when an
hourly-rate enhancement is requested by opt-out attorneys. In other
words, assuming board certified opt-out attorneys may increase hourly
rates by 20% - by analogy to Local Bankr. R. 2016-1(c)(1)(C) or
otherwise - the burden still remains with board certified opt-out
attorneys to demonstrate the enhanced hourly rate is reasonable. To
hold otherwise, i.e., to hold that opt-out board certified attorneys
are always entitled to enhance their hourly rates by 20%, would
essentially eviscerate the bankruptcy court’s statutory obligation to
determine reasonableness under § 330 insofar as it would effectively
negate §§ 330(a)(3)(B), 330(a)(3)(E), and 330(a)(4)(B) by rendering
these provisions meaningless in the context of fee applications filed
under § 330. Such a conclusion would also violate Fed. R. Bankr. P.
9029 insofar as it would put the local rules at odds with § 330.
In assessing fee applications filed under § 330, reasonable hourly
rates are calculated according to the prevailing market rates in the
relevant legal community. Blum v. Stenson, 465 U.S. 886, 895 (1984);
Gonzalez v. City of Maywood, 729 F.3d 1196, 1205 (9th Cir. 2013);
Ingram v. Oroudjian, 647 F.3d 925, 928 (9th Cir. 2011). Typically,
the “relevant legal community” is the forum district and the local
hourly rates for similar work should normally be employed. Gonzalez,
729 F.3d at 1205; In re Gianulias, 111 B.R. 867, 869-70 (E.D. Cal.
1989) (affirming bankruptcy court decision requiring Chapter 11
debtor’s counsel to submit evidence of prevailing rates charged by
bankruptcy attorneys in the community in order to establish a
reasonable hourly rate).
The district court Momentum Commercial Funding, LLC v. Project Storm,
LLC, 2022 WL 2817429 (E.D. Cal. July 18, 2022), adopted in full, 2022
WL 3578571 (E.D. Cal. Aug. 19, 2022), recently reviewed the hourly
rates of bankruptcy attorneys who practice in the Eastern District of
California and who have substantially more experience and expertise
than Counsel. 2022 WL 2817429 at *9-*10. The district court noted
that “[t]he cited rates for attorneys with 30-plus years in practice
range from $435 per hour to $600 per hour.” Id. It therefore found
that a $395.00 hourly rate requested by two attorneys in the case
before it who were similarly-situated to the bankruptcy attorneys
whose rates were reviewed, one with over 40 years experience and the
other with over 30 years experience, to be reasonable. Id. See also
Ambrose v. US Med-Equip, LLC, 2024 WL 307843, at *15 (E.D. Cal. Jan.
26, 2024) (“In the Fresno Division of the Eastern District of
California, across a variety of types of litigation, generally,
attorneys with experience of twenty or more years of experience are
awarded $350.00 to $400.00 per hour; attorneys with ten to twenty
years of experience are awarded $250.00 to $350.00 per hour; attorneys
with five to ten years of experience are awarded $225.00 to $300.00
per hour; and less than $200.00 per hour for attorneys with less than
five years of experience.”); Perez v. All Ag., Inc., 2021 WL 3129602,
at *5 & n.7 (E.D. Cal. July 23, 2021) (noting no distinction in rates
between Sacramento and Fresno divisions, particularly in specialized
areas of practice).
For purposes of reviewing the reasonableness of Counsel’s enhanced
$450.00 hourly rate in this case, the court takes judicial notice of
the State Bar of California website which reflects Counsel’s
California bar admission date is December 29, 2007.
https://apps.calbar.ca.gov/attorney/Licensee/Detail/254881 (when
viewed on March 2, 2024). In this court’s view, an hourly rate of
$450.00 charged by a consumer bankruptcy attorney with just slightly
over 16 years of experience, board certified or otherwise, is not a
3
reasonable hourly rate. It is also inconsistent with the hourly rates
3
The court is aware that another bankruptcy judge in this district
recently approved a $450.00 hourly rate as reasonable; however, the
attorney in that case had nearly 40 years of experience. In re
Howell, 2023 WL 3486669 (Bankr. E.D. Cal. May 14, 2023).
of Eastern District of California bankruptcy attorneys reviewed by the
district court in Momentum Commercial. So, at least in this case, the
20% enhancement requested by Counsel will not be applied to Counsel’s
previously approved and allowed hourly rate of $375.00 because doing
4
so would result in an unreasonable hourly rate.
Consistent with this court’s prior award of compensation to Counsel in
this case, Counsel will be awarded compensation for attorney’s fees at
an hourly rate of $375.00 as a reasonable hourly rate. Reduction in
Counsel’s hourly rate from $450.00 to $375.00 results in approved and
allowed compensation as follows:
Attorney @ $375.00/hr 15.30 hours $5,737.50
Paralegal @ $185.00/hr 9.50 hours $1,757.50
$7,495.00
Expenses $53.00
Total Compensation $7,548.00
Approved & Allowed
Counsel’s application for compensation is ORDERED APPROVED IN PART AND
DENIED IN PART for the reasons stated in the minutes.
Conditional Nature of this Ruling
Any party in interest shall have until 5:00 p.m. on Friday, March 8,
2024, to file and serve a response to this ruling. See Law Offices of
David A. Boone v. Devin Derham-Burk (In re Eliapo), 468 F.3d 592, 601-
03 (9th Cir. 2006). Any response shall be served on the Chapter 13
Trustee by facsimile or email.
If no response is timely filed and served, the application will be
deemed granted in part and denied in part for the reasons stated
4
This decision does not foreclose the possibility of an opt-out board
certified attorney obtaining approval of a 20% hourly-rate enhancement
by analogy to Local Bankr. R. 2016-1(c)(1)(C) or otherwise. For
example, a board certified opt-out attorney who bills at $325.00 per
hour could request a 20% enhancement which would increase the
attorney’s hourly rate to $390.00. In most cases, depending on
experience and expertise, that would be a reasonable hourly rate in
this district. Alternatively, an attorney billing at a higher rate
could request an enhancement in a lesser percentage. Neither of these
circumstances are present here. The request here is for automatic
application of the 20% enhancement applicable to the “no-look” fee by
analogy to Local Bankr. R. 2016-1(c)(1)(C). And as noted above, that
renders Counsel’s hourly rate unreasonable under § 330.
hereinabove, this ruling will no longer be conditional and will become
the court’s final decision, and the continued hearing on March 12,
2024, at 1:00 p.m. will be vacated.
If a response is timely filed and served, the court will hear the
application on March 12, 2024, at 1:00 p.m., or as soon thereafter as
the court’s calendar permits.
The court will issue an order.
1 INSTRUCTIONS TO CLERK OF COURT
SERVICE LIST
2
The Clerk of Court is instructed to send the attached
3 document, via the BNC, to the following parties:
4
Carl R. Gustafson
5 1525 Contra Costa Blvd.
Pleasant Hill CA 94523
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