Appeals Court Considers What’s A ‘Reasonable’ Attorney’s Fee in Minor Payroll Dispute

A California appeals court recently considered
what a “reasonable” attorney’s fee is in a wage and hour lawsuit. Michael
Harrington sued to recover $44.63 in unpaid wages from his employer’s payroll
provider. Although Harrington filed the case as a class action, he eventually
settled his claim for $10,500—and his lawyer then asked the court to award an
eye-popping $46,000 in attorney’s fees. Apparently, five lawyers and one
paralegal worked on the case. One lawyer billed 55.6 hours at $525 per hour,
and another lawyer billed 55.6 hours at $275 per hour.

The appeals court agreed
that Harrington was entitled to an award for reasonable attorney’s fees. But, said
the court, reasonable in the context of what started out as a $44.63 dispute
was $500 in fees, not $46,000. The court pointed to the minor nature of the
dispute, the settlement amount, and the fact that the case never warranted
class action status. What’s more, the wage underpayment was the result of a
mistake rather than willful or knowingly wrongful conduct. “At the risk of understatement,
there is no way on earth this case justified the hours purportedly billed by
Harrington’s lawyers,” the court said.1

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1 Harrington v. Payroll Entertainment Services, Inc., Calif. Court of Appeals (Dist.
2) B198883, 2008

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