Losing plaintiffs often argue after an anti-SLAPP shellacking that a defendant is limited to what an insurance company paid defense counsel. Typically, those rates are “insurance rates,” and are thus way below market rates. But this is wrong.
Courts have consistently declined to cap the reasonable hourly rate to what was paid by an insurer. In Pasternack v. McCullough (2021) 65 Cal.App.5th at 1059, for example, plaintiff argued that there was no need for the trial court to set a reasonable hourly fee award. The reason was give was that the fee award should have been limited to the substantially lower amount defendant’s insurer paid for his defense. The Pasternak court rejected plaintiff’s argument. The court concluded that California law is well-established that an attorney who accepts a reduced rate from a client may still seek a reasonable hourly rate pursuant to the lodestar method. Pasternak held that the trial court properly determined the market rate for defendant’s attorneys based on their experience and complexity of the case, instead of narrowly focusing on the “package rate” defendant’s attorneys accepted from defendant’s insurer in the matter. See also Nemecek & Cole v. Horn (2012) 208 Cal.App.4th 641, 650-651 (affirming trial court’s decision applying an hourly rate to its lodestar that was approximately double what the insurer actually paid for the law firm’s defense).
As the above authorities show, the prevailing lodestar adjustment method is the proper method for determining fees in this case, not the actual rates billed to the insurance company. The law is clear that courts should use the reasonable hourly rate in the community (i.e, market rates) to calculate the lodestar in a case where anti-SLAPP fees are sought.
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