Dyke v. Gulf Oil Corp.

• Decision Date: 23 August 1983
• Docket Number: 77-791-PA and 77-849-PA.,Civ. No. 77-10-PA
• Citation: 571 F. Supp. 780
• Parties: Richard W. DYKE, dba Western Stations Co., Plaintiff, v. GULF OIL CORPORATION, a Pennsylvania corporation, Defendant. COLVIN OIL COMPANY, an Oregon corporation, Plaintiff, v. GULF OIL CORPORATION, a Pennsylvania corporation, Defendant. F.O. FLETCHER, INC., dba Fletcher Oil Company, Plaintiff, v. GULF OIL CORPORATION, a Pennsylvania corporation, Defendant.
• Court: U.S. District Court — District of Oregon

571 F. Supp. 780

Richard W. DYKE, dba Western Stations Co., Plaintiff, v. GULF OIL CORPORATION, a Pennsylvania corporation, Defendant.

COLVIN OIL COMPANY, an Oregon corporation, Plaintiff, v. GULF OIL CORPORATION, a Pennsylvania corporation, Defendant.

F.O. FLETCHER, INC., dba Fletcher Oil Company, Plaintiff, v. GULF OIL CORPORATION, a Pennsylvania corporation, Defendant.

Civ. Nos. 77-10-PA, 77-791-PA and 77-849-PA.

United States District Court, D. Oregon.

August 23, 1983.

COPYRIGHT MATERIAL OMITTED

John L. Schwabe, Neva T. Campbell, Mary E. Egan, Schwabe, Williamson, Wyatt, Moore & Roberts, Portland, Or., for plaintiff.

John R. Brooke, Wood, Tatum, Mosser, Brooke & Holden, Portland, Or., Jack D. Fudge, Michael L. Hickok, Douglas J. Del Tondo, McCutchen, Black, Verleger & Shea, Los Angeles, Cal., for defendant.

PANNER, District Judge.

The remaining issue in these consolidated cases is the award of attorneys' fees. I previously ruled that such an award was appropriate pursuant to section 210(b) of the Economic Stabilization Act, 12 U.S.C. § 1904, note. Defendant argues that a recent decision of the Temporary Emergency Court of Appeals precludes me from awarding attorneys' fees in the circumstances of this case. Although TECA's decision in Eastern Air Lines, Inc. v. Atlantic Richfield, 712 F.2d 1402, (Em.App.1983), contains strong dicta on the subject, I find the decision is not controlling.

In Eastern Air Lines, TECA upheld the decision of a district court not to award attorneys' fees. The appeals court based its decision partly on what it regarded as the trial court's "sound application of discretion." Id. at 1413. TECA was not required in that opinion to carefully analyze the language of the statute authorizing attorneys' fees. Such an analysis reveals that Congress did not specify that attorneys' fees could only be awarded in cases of intentional overcharges.

The relevant statute provides:

the court may, in its discretion, award the plaintiff reasonable attorney's fees and costs, plus whichever of the following sums is greater:

(1) an amount not more than three times the amount of the overcharge upon which the action is based, or

(2) not less than $100 or more than $1000;

except that in any case where the defendant establishes that the overcharge was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to the avoidance of such error the liability of the defendant shall be limited to the amount of the overcharge ....

12 U.S.C. § 1904 note (1980).

It seems quite clear that the language of exception beginning with the word "except" modifies only the language that follows the word "plus." That is, a court may discretionarily award attorney's fees. In addition, the court may award treble damages or damages in an amount between $100 and $1,000, unless the defendant establishes the overcharge was unintentional and resulted from a bona fide error.

I hold that a reasonable award of attorneys' fees in these cases is $750,000.00.

BACKGROUND

These actions were brought in 1977 against Gulf Oil Corporation ("Gulf") pursuant to the Emergency Petroleum Allocation Act, 15 U.S.C. § 751, et seq. and various U.S. Department of Energy regulations. Plaintiffs sought to recover overcharges for gasoline sold by Gulf. There were years of extensive discovery and pretrial proceedings before the case was set for trial. Because of the complexity of the issues involved, the trial was split into several phases. In phase I, I held that Gulf's method of setting plaintiffs' May 15, 1973 base price was improper. In phase II, I ruled that a reasonable existing May 15, 1973 classification for plaintiffs was the three-tier geographic prices paid by a nonbranded distributor in California. In phase III, I selected the theory and means of calculating plaintiffs' damages. As a result of that ruling the parties stipulated to an amount of damages of $2,000,000.00 for Dyke, $745,000.00 for Colvin, and $790,000.00 for Fletcher. In phase IV, I held that Fletcher was a real-party-in-interest. Finally, in phase V, I ruled that an award of attorneys' fees in these cases was appropriate. The trial proceedings were spread over a period of seven months.

DISCUSSION

A. Standards.

The amount of reasonable attorneys' fees is within the court's discretion. Sapper v. Lenco Blade, Inc., 704 F.2d 1069, 1073 (9th Cir.1983). While the statute is silent on what is "reasonable," many courts have enumerated factors for consideration. The Ninth Circuit has adopted the twelve factors recited in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir.1975), cert. denied sub nom., Perkins v. Screen Extras Guild, Inc., 425 U.S. 951, 96 S.Ct. 1726, 48 L.Ed.2d 195 (1976). Although it is not necessary for the court to specifically discuss each factor, Sapper, 704 F.2d at 1073, the court may abuse its discretion in setting fees if it does not at least consider the various factors and discuss the relevant ones. Harmon v. San Diego County, 664 F.2d 770, 772 (9th Cir. 1981); O'Neil v. City of Lake Oswego, 642 F.2d 367, 370 (9th Cir.1981). A court may rely upon a single factor if it appears to be controlling and so long as the remaining factors are considered. Vanelli v. Reynolds School District # 7, 667 F.2d 773, 781 (9th Cir.1982).

The twelve Johnson factors are: (1) the time and labor required; (2) the novelty and difficulty of the questions involved; (3) the skill necessary to perform the legal services properly; (4) the preclusion of other employment by the attorney due to the acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relations with the client; and (12) awards in similar cases. Johnson, 488 F.2d at 717-19. To these factors I add another: the attorneys' efforts to bring the matter to a prompt and reasonable conclusion.

Before turning to the relevant factors in these cases I note that this circuit has warned against inflexible application of the Johnson factors. In Moore v. Jas. H. Matthews & Co., 682 F.2d 830 (9th Cir.1982), the court reviewed the "lodestar" method of setting fees utilized in several other circuits. E.g., Copeland v. Marshall, 641 F.2d 880 (D.C.Cir.1980); Furtado v. Bishop, 635 F.2d 915 (1st Cir.1980); Detroit v. Grinnell Corp., 560 F.2d 1093 (2d Cir.1977); Lindy Bros. Builders, Inc. of Philadelphia v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir.1973). Lodestar analysis involves the calculation of a "lodestar" figure by multiplying the number of attorney hours times the prevailing billing rate for comparable legal services. That lodestar figure is then adjusted based on the quality of work and the risk taken by the attorney. Moore, 682 F.2d at 840.

The Moore panel noted with approval the increased use by district courts of a combined Johnson and lodestar approach. Id. While the technique varies from case to case, this "blended" approach involves use of the lodestar analysis as "a procedure for ordering the examination of the factors listed in Kerr." Moore, 682 F.2d at 840, citing In re Capital Underwriters, Inc. Securities Litigation, 519 F.Supp. 92, 100 (N.D.Cal.1981), aff'd in part, remanded in part, 705 F.2d 466 (9th Cir.1983), and Knutson v. Daily Review, Inc., 479 F.Supp. 1263, 1270 n. 10 (N.D.Cal.1979). Typically, a court utilizing the blended approach would examine the first element of the lodestar formula, "hours spent," just as it would examine the Johnson element of "time and labor required." The remaining Johnson elements would then be used to determine the second lodestar factor, "hourly rate," and to augment or decrease the overall award based on quality or contingency consideration. Moore, 682 F.2d at 840-41.

While there is obvious merit to this blended method, I prefer not to give undue emphasis to mechanical, mathematical calculations. In most cases, the work product of an attorney is not easily quantified. Use of the Johnson factors to establish the lodestar elements creates the unjustified appearance of reliability and "scientific" methodology. The setting of fees by the district court necessarily requires the use of subjective analysis. Such analysis is imprecise and is therefore entrusted to the discretion of the district court because of that court's intimate knowledge of the proceedings. Hensley v. Eckerhart, ___ U.S. ___, 103 S.Ct. 1933, 1941, 76 L.Ed.2d 40 (1983).

The number of hours expended by the attorneys and the prevailing hourly rate must, of course, be examined and considered by the court. I am not required, however, to make precise calculations on the record. Hensley, 103 S.Ct. at 1940. The requirements established by Kerr can be met by a review of the relevant factors and disclosure of the court's reasoning. Harmon v. San Diego County, 664 F.2d at 772.

B. Application.

1. Time and Labor Required.

These were difficult, complex cases involving an area of the law that has received very little exploration. The "guiding" regulations were often tortuously constructed and contradictory. Combining these circumstances with defendant's aggressive and persistent defense, plaintiffs' attorneys necessarily expended considerable time and effort. Specifically, plaintiffs' attorneys have submitted affidavits showing that they spent 228 hours in trial and approximately 7437 hours in research and nontrial work. Additionally, they claim 1543 hours of paralegal work.

I find that the submitted attorney hours were reasonably expended in the prosecution of these cases. While I am not bound by the hours claimed by an attorney, e.g., Seymour v. Hull & Moreland...