CALIFORNIA ATTORNEY'S FEES

Civil Rights: Plaintiff Winning $820,000 Against Orange County Properly Awarded $194,581 In Attorney’s Fees

 

$628,083.75 Fee Request (Lodestar With 1.5 Multiplier) Was Rejected by Trial Court.

     Espinoza v. County of Orange, Case No. G043067/G043345 (4th Dist., Div. 3 Feb. 9, 2012) (unpublished) is a situation where a civil rights plaintiff did win $820,000 in damages against Orange County, but was less than happy when the lower court only awarded fees of $194,581 rather than the $628,083.75 (lodestar plus 1.5 proposed multiplier) requested by plaintiff.

     Plaintiff’s appeal did not gain him any more fees.

     Acting Presiding Justice Rylaarsdam, writing for a 3-0 panel, found no abuse of discretion in the amount of the fee award and found no indication that the lower court misapplied lodestar standards in fashioning the award. The defense suggested a $167,741.25 award, based on a lodestar de-enhanced by a .5 multiplier reduction. The lower court found plaintiff’s request--75% of damages--to be “astonishing” in nature, because it believed the case was not that complex or intellectually demanding. Beyond that, plaintiff did not prevail on all claims, so that limited success was another basis justiying the reduced award.

     The lower court also properly denied $45,000 in expert witness fees when it found that the expert was not very illuminating during trial.

Civil Rights/POOF!: $494,714.40 Fee Award Against Roommate Web Sorting Service Vacated Upon Reversal of Summary Judgment/Permanent Injunction Against Litigant

 

No Place Like Home:  FHA/FEHA Restrictions Held Not Applicable to Roommate Selection for Sharing Inside of Living Units.

     Roomate.com, LLC, which maintains a website asking questions about sex, sexual orientation, and familial status for individuals seeking roommates, must have been shocked when a district judge granted a summary judgment/permanent injunction based on finding that this selection process violated the Fair Housing Act (FHA). Even worse, San Fernando’s Fair Housing Council was awarded $494,714.40 in attorney’s fees.

     Roommate appealed. Good move.

     In a 2-1 opinion, Chief Judge Kozinski authored a Ninth Circuit opinion vacating both the merits and fee orders in Fair Housing Council of San Fernando Valley v. Roommate.com, LLC, Case Nos. 09-55272 et al. (9th Cir. Feb. 2, 2012) (for publication). The majority found that FHA and FEHA did not apply to the roommate selection process for the sharing of living units. With that determination, the substantial fee award went POOF! also.

     BLOG UNDERVIEW--Here is the colorful beginning of this opinion: “There’s no place like home. In the privacy of your own home, you can take off your coat, kick off your shoes, let your guard down and be completely yourself. While we usually share our homes only with friends and family, sometimes we need to take in a stranger to help pay the rent. When that happens, can the government limit whom we choose?”

Allocation/Civil Rights: $645,534 Attorney’s Fees Award To Successful FEHA Plaintiff Affirmed On Appeal

 

Compensatory Award Was $560,709; 1.5 Fee Multiplier Also Justified.

     In the FEHA civil rights area, the law is intentionally designed to confer reasonable attorney’s fees upon winning civil rights plaintiffs and only impose fees against them should the case be shown as frivolous/baseless in nature. The next case illustrates how substantial fee awards will be affirmed, rebuffing governmental entity arguments that mutlipliers are not justified or that the dismal state of the public fisc should somehow prevent fee recoveries to plaintiffs.

     Rodriguez v. California Dept. of Justice, Case No. C064756 (3d Dist. Jan. 31, 2012) (unpublished) was a case where a FEHA plaintiff won damages of $560,709 and was subsequently awarded attorney’s fees as the prevailing party to the tune of $645,534 (full request award, including a 1.5 multiplier). The State DOJ was not happy and appealed the fee award.

In The News . . . . Orange County Settles Federal Excessive Force Civil Rights Lawsuit For $375,000

 

Big Chunk of Settlement Went to Attorney’s Fees for Winning Plaintiff.

     As reported by Tony Saavedra in an article in the January 26, 2012 Orange County Register, Orange County has paid $375,000 to end a federal lawsuit alleging that sheriff’s deputies arrested the wrong man, ordered him to strip naked, and beat him while taking pictures with their camera phones—a successful excessive force civil rights lawsuit can result in plaintiff recovering mandatory fees under a fee-shifting statute (though the fees must be reasonable in nature).

     The actual lawsuit by plaintiff Jason Deats of Lake Forest went to trial before a Los Angeles federal jury, which concluded that excessive force was used by the deputies and that he was maliciously prosecuted by the Orange County District Attorney’s Office. Jurors did not buy that he was stripped and beaten, or that the conduct justified punitive damages. The jury did award Mr. Deats $49,451 in compensatory damages. Orange County was also ordered to pay Mr. Deats’ legal fees to the tune of $325,549. This meant the settlement was a $25,000 concession plus waiver of interest and additional costs/fees. A large part of the settlement was for reimbursement of attorney’s fees, with civil rights case law written to encourage fee shifting in favor of prevailing plaintiffs.

Civil Rights/Reasonableness Of Fees: $717,828.50 Fee Request For $6,500 FEHA Recovery Properly Denied

 

“Inflated” Fee Request Justified Outright Denial By Trial Court.

     Plaintiff won $6,359.10 on a FEHA claim, plus $168 for missed lunch breaks. Then, this litigant sought to recover fees of $717,828.50 under FEHA for “prevailing” in the trial court.

     Get outta here, said the appellate court more eloquently than we in Romero v. Leon Max, Inc., Case Nos. B226820/B230313 (2d Dist., Div. 1 Jan. 25, 2012) (unpublished).

     Relying upon Chavez v. City of Los Angeles, 47 Cal.4th 970 (2010) [one of our Leading Cases], Presiding Justice Mallano on behalf of a 3-0 panel affirmed the fee denial. “Inflated” requests alone can allow for such a denial (in this case, a 110 times request on the small judgment amount), which was bolstered by other facts--among others, plaintiff turned down a reasonable pre-trial settlement offer of $75,000.

Civil Rights/In The News . . . . Civil Rights Plaintiff Winning $500 Entitled To Fee Award Of $80,000

 

U.S. Magistrate Judge’s Recommendations Has Some Nice “Fees on Fees” Hints.

     In a January 13, 2012 post of the Courthouse News Service, we are informed that U.S. District Judge Jack Weinstein accepted U.S. Magistrate Judge Roanne L. Mann’s recommendation that a civil rights plaintiff should be awarded $80,000 in attorney’s fees for prevailing in the interesting civil rights case of Brown v. Starrett City Associates, Case No. 09-CV-3282 (JBW) (E.D.N.Y.).

     Civil rights plaintiff, a Brooklyn woman, was handcuffed by a policeperson after she adjusted the shoulder strap of a young woman who was earlier handcuffed in an altercation occurring outside plaintiff’s abode. Plaintiff allegedly told officers that she had existing wrist problems, but was cuffed very tightly and only had the pressure alleviated after her wrist became swollen from the cuffing. She filed a civil rights lawsuit against the police, with a jury awarding her $500 for excessive force.

     Recently, District Judge Weinstein accepted the magistrate judge’s recommendation that plaintiff be awarded $80,000 in attorney’s fees under the pro-plaintiff fee-shifting provision codified at 42 U.S.C. § 1988. See Judge Weinstein’s January 6, 2012 Order.  Plaintiff was found to have prevailed, with even the modest damages awarded supporting an affirmative fee order under the civil rights statutes. The magistrate judge rejected that plaintiff was limited to the 33 1/3% contingency fee bargain when it came to awarding reasonable fees under section 1988.

     The biggest reduction was registered in the “fees on fees” area--plaintiff’s counsel’s request for fees in preparing the fee motion itself. Counsel claimed 29 hours for this work, but the magistrate judge reduced it by 7 hours--observing, in the process, that the norm for fee application work in the E.D.N.Y. is 5-15 hours, citing Murray ex rel. Murray v. Mills, 354 F.Supp.2d 231, 241 (E.D.N.Y. 2005) as support for this generalized work effort with respect to “fees on fees.”

     For a copy of the magistrate judge’s recommendation (Doc. 89, filed on 10/27/11), see Courthouse News Service’s January 13, 2012 post for a link to the recommendation.

        BLAWG BONUS:  “Jack Bertrand Weinstein (born August 10, 1921) is a United States federal judge in the Eastern District of New York. Judge Weinstein was appointed in 1967 by President Lyndon Johnson. From 1980 to 1988, he served as chief judge of the district. On March 1, 1993, he took senior status; however, unlike some senior judges, he has maintained a full docket. He is the author of a leading treatise on evidence and numerous articles and books, and is widely regarded as one of the most respected and influential living judges in America.”  Source:  Wikipedia.

Year in Review - 2011

Wrapping It Up:  M & M’s Top 25 Attorney’s Fees Decisions For 2011  Part 1 of 2

     It is that time of year, at year end, for us to list our top published attorney’s fees decisions from the U.S. Supreme Court, Ninth Circuit Court of Appeals, and California Courts of Appeal. Although we normally do the “Top 20” decisions, the 2011 year was prolific for many, many decisions of interest, so we expanded it to the top 25.

     We might note that 2012 looms as an important year for the California Supreme Court to decide the issues involved in Kirby v. Immoos Fire Protection, United Parcel Service Wage & Hour Cases (McGann), and related cases considering whether a prevailing defendant is entitled to recover Labor Code section 218.5 attorney’s fees for successfully defending against a plaintiff employee’s claims for meal/rest break violations even if those claims were joined with Labor Code section 1194 overtime compensation claims subject to a unilateral pro-plaintiff fee shifting provision. (See our posts of September 28, October 25, and November 25, 2011.)

     However, we can only report and score on the top 25, keeping in mind that appellate jurists did decide many other important cases. These are our favorites in a wide range of areas, so enjoy. This will be the first 13 cases, with 12 more to follow in a subsequent post--likely closer to year’s end.

     25. La Cuesta v. Benham, 193 Cal.App.4th 1287 (2011) [4th Dist., Div. 3]; author--Presiding Justice Sills (who, unfortunately, passed away earlier this year after a long and distinguished career):  Under Civil Code section 1717, a lopsided win by landlord in obtaining repossession and compensation from tenant made landlord the prevailing party, reversing denial of fees even under an abuse of discretion standard. [Discussed in our March 30, 2011 post.]

     24. Ferwerda v. Bordon, 193 Cal.App.4th 1178 (2011) [3d Dist.]; author--Justice Robie:  Attorney’s fees cannot be awarded to a homeowners’ association based on unrecorded CC&R enforcement documents and manuals.  [Discussed in our March 26, 2011 post.]

     23. Turner v. Assn. of American Medical Colleges, 193 Cal.App.4th 1047 (2011) [1st Dist., Div. 5]; author--Justice Simons:  Attorney’s fees are not awardable to defendant prevailing on Unruh Civil Rights Act, Civil Code sections 52 and 54.3 claims even though defendant did prevail (but did not claim entitlement to work) under a broader fee-shifting provision contained in section 55. [Discussed in our March 25, 2011 post.]

     22. In re Marriage of Fong, 193 Cal.App.4th 278 (2011) [2d Dist., Div. 3]; author-- Justice Croskey:  Wife not complying with her financial disclosure requirements in family law proceeding could not seek fee award from noncompliant husband under Family Code section 2107(c). [Discussed in our March 4, 2011 post.]

     21. Marriage of Fossum, 192 Cal.App.4th 336 (2011) [2d Dist., Div. 1]; author--Justice Johnson, writing for the majority; Justice Rothschild, dissenting:  Spouse/domestic partner’s breach of Family Code section 721(b) fiduciary duty gives rise to mandatory fee award under Family Code section 1101(g); dissenting justice spelled out anomalous results from this interpretation and suggested a legislative amendment to the statute to make it discretionary in nature. [Discussed in our January 29, 2011 post.]

     20. Harris v. Maricopa County Superior Court, 631 F.3d 963 (9th Cir. 2011); author--Circuit Judge Reinhardt for the majority; Circuit Judge Bybee, concurring and dissenting:  “But for” test, not pro-rata allocation of fees between frivolous and nonfrivolous claims, was proper standard for fee recovery under federal civil rights fee-shifting statute; dissenting judge argues that “but for” test will make it impossible for defense to argue fee apportionment in mixed-bag cases. [Discussed in our January 16, 2011 post.]

     19. Garcia v. Politis, 192 Cal.App.4th 1474 (2011) [2d Dist., Div. 4]; author--Justice Willhite: Plaintiff seeking fees in default judgment context cannot file a fee motion post-judgment, but must make a fees request in plaintiff’s default judgment packet paperwork. [Discussed in our February 26, 2011 post.]

     18. First National Mortgage Co. v. Federal Realty Investment Trust, 631 F.3d 1058 (9th Cir. 2011); author--Senior Circuit Judge Thompson: 28 U.S.C. § 1821(b) $40-per-day limitation on witness expenses “preempted” application of California Code of Civil Procedure section 998’s allowance of broader “reasonable” expert witness fees in diversity cases. [Discussed in our February 1, 2011 post.]   Justice Thompson died February 19, 2011.

     17. Simke, Chodos, Silberfeld & Anteau, Inc. v. Athans, 195 Cal.App.4th1275 (2011) [2d Dist., Div. 1]; author--Presiding Justice Mallano:  Unspecified attorney’s fees prayer in complaint did not void future default judgment based on terminating sanctions conduct. [Discussed in our May 26, 2011 post.]

      16. Puerta v. Torres, 195 Cal.App.4th 1267 (2011) [4th Dist., Div. 3]; author--Justice Moore: Failure to include some type of acceptance language in Code of Civil Procedure section 998 offer invalidates the offer. [Discussed in our May 25, 2011 post.]

      15. Martinez v. L.A. County Metropolitan Transp. Auth., 195 Cal.App.4th 1038 (2011) [2d Dist., Div. 1]; author--Justice Rothschild:  Code of Civil Procedure section 998 offer excluding “costs” from recovery also means that attorney’s fees are excluded from the ambit of the offer. [Discussed in our May 23, 2011 post.]

     14. Ilshin Investment Co., Ltd v. Buena Vista Home Entertainment, Inc., 195 Cal.App.4th 612 [2d Dist., Div. 1]; author—Justice Chaney:  Attorney’s fees are not allowable for prevailing party in post-judgment enforcement independent creditor’s suit. [Discussed in our May 15, 2011 post.]

      13. In re Marriage of Davenport, 194 Cal.App.4th 1507 (2011) [lst Dist., Div. 2]; author--Justice Richman:  Scorched earth litigation practices justified denial of family sanction fees to wife and allowed for substantial fees against her/in favor of husband; case distinguishes between zealous advocacy and “attack dog”/”scorched earth” litigation. [Discussed in our May 6, 2011 post.]

      BLOG UNDERVIEW--This last one is a good one to end on, because both co-contributors have dogs--Mike has Riffle, a Labrador, and Marc has Watson, a mixed-breed dog, but still a good dog! Watch for our ensuing post before the end of the year with the next 12 decisions rounding out our “Top 25.” Happy Holidays to all of our readers.

Earlier Year End Wrap-Ups:

     2010  Part I; Part II     2009 Part I; Part II     2008 Part I; Part II

 

Allocation/Civil Rights: Successor For Elderly Patient Entitled to Mandatory Fee Award In Suit Brought Under California’s Patient Bill Of Rights

 

$305,000 Fee Award Sustained For Violation Even Though No Damages Awarded.

     Anderson v. AG Seal Beach, Case No. B228683 (2d Dist., Div. 7 Dec. 14, 2011) (unpublished) is a case where a successor won a $171,000 jury verdict for her mother’s alleged skilled nursing home injuries, even though the jury did not enter any specified damages but did determine that defendant violated California’s Patient Bill of Rights by apparently failing to provide mother with requisite personal hygiene and to prevent bedsores. Subsequently, the lower court granted mother’s successor attorney’s fees of $305,000 under the Patient Bill of Rights fee-shifting provision (Health & Safety Code section 1430(b)), even though the fee request was much more--about $600,000 in fees.

     Defendant appealed the fee award, but was rebuffed in its bid to overturn the award.

     Section 1430(b) is a mandatory fee-shifting statute, only requiring a violation. So, the failure of the jury to award a specific monetary amount was not fatal as long as a violation was found (as the jury did in a special verdict). Defendant argued that the work should have been apportioned between the section 1430 claim and other negligence, elder abuse, and wrongful death claims. However, there was a lot of factual overlap such that the claims were intertwined, not requiring any allocation. Finally, the $450 hourly rate for lead trial counsel and $275 hourly rate for an associate were reasonable for the L.A. venue where the trial occurred.

Civil Rights/Section 998: Winning Civil Rights Litigant Being Awarded $416,000 In Fees With A 1.5 Multiplier Was Properly Compensated, With Dueling 998 Costs Awards Also Being Sustained

 

Lower Court Properly Scaled Back Expert Fee Costs Award Against Plaintiff Based on Her Financial Situation.

     Hernandez v. The Regents of the University of California, Case Nos. A129427/A130063 (1st Dist., Div. 4 Dec. 12, 2011) (unpublished) involved some interesting fees and costs issues, especially given the shifting impact of Code of Civil Procedure section 998 when woven into the FEHA pro-plaintiff fee shifting provision.

     In this one, a Native American assistant professor at University of California, Berkeley brought a FEHA claim against the Regents. She rejected a 998 offer of $300,000 plus reasonable attorney’s fees, costs, and expenses. After a jury trial, plaintiff was awarded a total of $266,347, which was less than the defense 998 offer.

     She moved to recover $2,662,645 in fees and $46,312.82 in costs under the FEHA fee-shifting provision. In turn, based on the winning 998 offer, the defense sought a total of $144,560.74 in costs (mainly expert witness fees). After a comprehensive fee/costs hearing, the lower court awarded plaintiff $415,938.75 in fees (with a 1.5 multiplier). awarded plaintiff $26,932.84 in pre-998 offer costs, and awarded the defense $33,414.25 in post-998 offer costs as well as $50,000 in expert witness fees (scaled down from its request for more than $111,000 due to plaintiff’s financial situation).

     Plaintiff appealed the fees and costs awards across the board, all to no avail.

     The hourly rates awarded and multiplier were not incorrect under an abuse of discretion standard. Because plaintiff failed to obtain a more favorable award than the defense 998 offer, the defense was treated as the prevailing party for purposes of postoffer attorney’s fees as costs. The preoffer award of costs was justified. So, too, was the postoffer award of expert witness fees to the defense, because the record did reveal that the trial court “scaled back” the requested $111,000 award to $50,000 based on plaintiff’s financial situation. (Seever v. Copley Press, Inc., 141 Cal.App.4th 1550, 1561-1562 (2006); Holman v. Altana Pharma US, Inc., 186 Cal.App.4th 262, 284 (2010).)

 

The University Library.  Berkeley. c1911.

Civil Rights/Reasonableness Of Fees: $677,025 Fee Award Affirmed On Appeal

 

60% Reduction by Trial Court Dispatched Inefficiency/Padding/Overcharge Challenges.

     In Fuentes v. Autozone, Inc., Case No. B224034 (2d Dist., Div. 4 Nov. 16, 2011) (certified for partial publication; fee discussion unpublished), plaintiff won a $160,000 FEHA damages award, with the lower court subsequently awarding attorney’s fees of $677,025 under the fee-shifting statute. In doing so, the lower court reduced by 60% the $963,330 requested lodestar and denied a 2.0 multiplier request. The trial court found that its award was substantial in an uncomplicated case. Although unhappy defendant challenged the award for inflated hourly rates, padding and overreaching, the appellate court sustained the fee award based on the 60% reduction and the lower court’s setting of the reasonable hourly rate at $425 (compared to requested rates ranging from $395-$675 per hour).

Civil Rights: Fee Recovery Erroneously Denied To Prevailing Civil Rights Plaintiff Defended By Her Attorney-Spouse

 

In Pro Per Restrictions Do Not Apply to Representation by One’s Spouse.

     A plaintiff prevailed on a civil rights claim and then sought recovery for work done by her attorney spouse and a co-counsel non-spouse. The district judge awarded plaintiff fees charged by co-counsel in the amount of $13,770 (out of a requested $21,420) under the federal civil rights fee-shifting statute, but denied entirely the request to reimburse any part of her spouse’s work (requested fees of $124,510).

     The Ninth Circuit, in Rickley v. County of Los Angeles, Case No. 09-56498 (9th Cir. Aug. 19, 2011; amended Oct. 4, 2011) (for publication), reversed.

     Nothing in 42 U.S.C. § 1988 (the civil rights fee-shifting statute) or IDEA (a statute having an analogous fee shifting provision in the educationally disabled area) imposes a general rule requiring counsel to be independent and emotionally detached. Plaintiff did not represent herself, such that her spouse’s representation did not trigger the in pro per bans applicable to both plaintiffs and defendants in the civil rights area. To further support the result, the Ninth Circuit cited two federal district court decisions refusing to apply the in pro per restrictions to attorney spouses.

Civil Rights/Special Fee Shifting Statute: Defendant/Cross-Complainant Losing Adverse Elder Abuse Claim and FEHA Cross-claim Properly Hit With $1.312 Million Fee Order

 

She Lost Elder Abuse Claim by Plaintiff and Did Not Prevail on Her Frivolous FEHA Sexual Harassment Cross-claim.

     Bad facts can result in large jury verdicts; they also tend to guide the dispositon of the trial judge when it comes to awarding attorney’s fees against the non-prevailing litigant. That is what happened in Flowers v. Hillyer, Case Nos. A120478/A121941 (1st Dist., Div. 5 Sept. 23, 2011) (unpublished).

     Here is a summary of the bad facts: Plaintiffs, including an elderly man with an ownership interest in another of one of the plaintiff companies, sued defendant, a former CFO, for making 72 unauthorized transactions and embezzling millions of dollars from Ramsell Corporation as well as elderly man’s personal accounts. Defendant cross-claimed for defamation and sexual harassment/retaliation under FEHA, based primarily on the claim that the elderly plaintiff harassed her even though the evidence showed that he only accompanied her to hotels for some physical intimacy during a vulnerable time of his life but not have sexual intercourse. The jury awarded plaintiffs over $11.7 million on the embezzlement-related claims (including elderly abuse claims for taking money from the elderly man’s personal bank accounts) and returned a defense verdict on defendant’s sexual harassment cross-claim (after dismissal of the defamation cross-claim). Later, the trial court awarded the elderly plaintiff $770,576 in fees on his elder abuse claims and awarded elderly plaintiff/Ramsell $542,056 in fees for successfully defending against defendant’s frivolous sexual harassment cross-claim.

     Defendant appealed. Although the appellate court reversed the $4.8 million punitive damages component of the jury award, the remainder of the merits judgment and fee awards were affirmed.

     One firm representing plaintiffs/cross-defendants sought a total of $1,983,721 in fees (from filing of complaint until some time before trial) and another firm sought $886,619.19 in fees for work on the sexual harassment claim (with the court denying plaintiffs’ request for fees generated by the second firm on the elder abuse claims because that firm did not represent elderly plaintiff until after trial).

     The lower court determined that 45.7% of first firm’s fees were attributable to the elder abuse claims, and reduced this amount by 15% due to “block billing” and redacted time entries. That came to the $770,576 in total fees awarded. Defendant argued that the lower court should have reduced fees by 20% or more, but the appellate court determined that the 15% reduction ($130,000) was well within the lower court’s discretion. (See, e.g., Nightingale v. Hyundai Motor America (1994) 31 Cal.App.4th 99, 103; Welch v. Metropolitan Life Ins. Co. (9th Cir. 2007) 480 F.3d 942, 948 [discretion to disregard or reduce appropriately in “block billing” cases].)

Civil Rights: Financial Status Of Losing Plaintiff Properly Fueled Fee Denial

 

“Pocketbook” Was the Dispositive Factor in this One.

     In a FEHA lawsuit, a prevailing defendant is only entitled to an attorney’s fees award upon a finding that the action was frivolous, unreasonable, or without foundation, with lower courts instructed to refrain from use of post hoc reasoning that translates a loss of the case into a chilling fee award in the civil rights area even though the more stringent frivolity requirements are not met. (Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421-422 (1978) [with California courts often looking to federal decisions in interpreting FEHA].) A key factor in a defense award is what we would term the “pocketbook” factor--such an award should not result in the financial ruin of an unsuccessful plaintiff. (Rosenman v. Christensen, Miller, Fink, Glaser, Weil & Shapiro, 91 Cal.App.4th 859, 868 (2001).) This pocketbook factor was dispositive in leading to an affirmance of an order denying the winning defense’s request for substantial fees in the next case we examine.

Above:  The Pocketbook Factor.  Shopping 1942.  Library of Congress.

Civil Rights: Violent Video Advocates Slam California With Fee Motion in US Supreme Court

Another Mortal Kombat Fatality Looming in Video Game Litigation?    

     Fresh from killing the ban on children’s access to violent video games in California, the legal team advocating First Amendment rights for the video industry may taste more blood with a fee motion to the United States Supreme Court.  The motion seeks $1,144,602.64 from California, including $23,979 for conducting a moot court exercise.  Brown v. Entertainment Merchants Association, et al., No. 08-1448 (2011).  

     This rare request for Supreme Court fees in a civil rights case is the subject of Lyle Denniston’s post on SCOTUSblog on July 25, 2011.  A copy of the motion may be read by clicking here.

     The request for fees is brought under the civil rights statute, 42 USC section 1988.  On June 27, 2011, in a writ proceeding, the Supreme Court affirmed the 9th Circuit ruling liquidating the ban, presumably making the video industry writ respondents the prevailing parties.

     The video industry advocates have already obtained stipulated agreements for $276,000 plus interest in the District Court, and for $94,000 in the 9th Circuit Court of Appeals.

     Lyle Denniston points out, “[t]he motion cites no Supreme Court ruling directly ordering a fee shift in a case before the Justices.”  But the civil rights laws do allow for fee shifting to the prevailing party, and the Supreme Court could order a fee shift or pass the buck to the 9th Circuit or the District Court.

     HAT TIP to Carter C. White, Supervising Attorney, King Hall Civil Rights Clinic, UC Davis, for bringing to our attention Lyle Denniston’s article about the case in SCOTUSblog.

Mortal Combat 9 - Fatalities

Civil Rights: Fox v. Vice Discussed By Attorneys Knapton and Karelis In Recent Article

Suggestions for Maximizing Fee Recovery Under “But For” Standard Pertaining to Prevailing Public Entities in Civil Rights Cases

     In a July 22, 2011 post at PublicCEO.com, attorneys Gerry Knapton and Kim Karelis discuss the recent U.S. Supreme Court decision of Fox v. Vice, 2011 U.S. LEXIS 4182 (U.S. June 6, 2011), where a “but for” standard in awarding attorney’s fees to prevailing public entities in civil rights cases was adopted in cases involving both frivolous and nonfrivolous claims. Mr. Knapton is a well acknowledged expert in the area of fee audits and related attorney’s fees issues, and both gentlemen are partners at L.A.’s Ropers, Majeski, Kohn & Bentley.

     Messrs. Knapton and Karelis have these tips for maximizing recovery under this “but for” standard: (1) the public entity must keep detailed billings allowing for apportionment; (2) no block billing or vague entries should be made; and (3) potential prevailing defendants should document the costs of retaining specialized defense counsel on “but for” claims of a non-standard nature.

     Our discussion of Fox v. Vice can be found at the June 8, 2011 post.

Civil Rights/Special Fee Shifting Statute: Winner In Public Disclosure Bar False Claims Dispute Was Entitled To Fees Even Though There Was A Merits Dismissal And Did Prevail For Fee-Shifting Purposes

 

First District, Division 4 Adds to State False Claims Act Fee Shifting Jurisprudence.

     In our June 6, 2011 post, we explored the Second District, Division 6’s recent decision in County of Kern v. Jadwin, where Justice Yegan on behalf of a unanimous panel discussed the California False Claims Act (“CFCA”) (explained, along with the public disclosure bar, at the end of the post) fee shifting provision codified at former Government Code section 12652(g)(9) [a provision allowing fee recovery to a defendant where a false CFCA suit was brought solely for harassment purposes, with the present statutory version containing even broader primarily language].

     Now, the First District, Division 4 in State of California ex rel. Standard Elevator Co. v. West Bay Builders, Inc., Case Nos. A124892/A125340 (1st Dist., Div. 4 July 22, 2011) (certified for publication) also has considered issues arising under the former section 12652(g)(9) version with the “solely” language.

     In this most recent decision, an unlicensed subcontractor was found liable to contractor for fraud in a bid submission on a public works project. Contractor was awarded damages from using a replacement licensed sub when the work exceeded the unlicensed sub’s agreed-to costs. Subcontractor then sued the general contractor under the state CFCA, based on the theory that gen made illegal certifications based on improperly substituting the unlicensed sub. The trial court granted summary judgment to general contractor and awarded it $201,483.75 in attorney’s fees for defending against a frivolous/harassing lawsuit under former section 12652(g)(9).

     Appealing sub raised numerous challenges to the fee award.

Civil Rights/Specific Fee Shifting Statute: $50,820 Fee Award Against Plaintiff Bringing Frivolous False Claim Act Action Affirmed On Appeal

Second District, Division 6 Uses Analogous Federal Case Law in Reaching Result.

     Under the False Claim Act (Gov Code, § 12650 et seq.), former section 12652(g)(9) provided that a trial court may award the prevailing defendant attorney’s fees if “the claim was clearly frivolous, clearly vexatious, or brought for purposes of harassment.” (Now, the current section effective January 1, 2010 has liberalized the discretionary award to encompass actions “brought primarily for purposes of harassment.”) This former section was front and center in the next case we examine, which is County of Kern v. Jadwin, Case No. B227276 (2d Dist., Div. 6 July 5, 2011) (certified for publication).

     Plaintiff County of Kern was hit with a $50,820 fee award under FCA after the trial court found that its FCA claim had no support and was brought to retaliate against a former employee’s federal employment retaliation lawsuit in which he garnered a $505,457 judgment against County. A judicial arbitrator denied the FCA claim, and a trial court vacated County’s attempt to dismiss without prejudice and awarded $50.820 in fees to plaintiff after finding the FCA action was frivolous and brought to harass plaintiff.

     County’s appeals of the merits and fee determinations were sustained on appeal.

     Justice Yegan, writing on behalf of a unanimous panel of the 2/6 appellate court, used federal False Claims Act cases specifying that fee shifting will occur if the action has no reasonable chance of success from an objective standpoint. (Mikes v. Straus, 274 F.3d 687, 704 (2d Cir. 2001); U.S. ex rel. Vuyyuru v. Jadhav, 555 F.3d 337, 356 (4th Cir. 2009).) The total pattern of conduct showed that there was a “bad smell” to the FCA claim, with the appellate court seeing the same picture of harassment as did the trial court.

     BLOG UNDERVIEW--Justice Yegan began by stating that post hoc, ergo propter hoc is a Latin phrase used to describe the logical fallacy that the propinquity of two events necessarily establishes cause and effect. Although County argued at the appellate argument that plaintiff’s lawsuit and the FCA action had nothing to do with each other, both the trial and appellate courts rejected this proposition, finding the FCA complaint was caused by the plaintiff employee’s lawsuit against County.

Civil Rights: Fee Denial Reversed Even Though Disabled Plaintiff Did Not Make Prelitigation Demand

 

Key Difference Was Stipulated Injunction Versus Stipulated Dismissal.

     In this category before, we have seen cases where disabled plaintiffs were denied fee award requests because they failed to make a prelitigation demand. Where there is a stipulated dismissal, a prelitigation demand is a necessity under the catalyst theory for purposes of a fee award, with the courts borrowing a private attorney general statute analytical decision-making process. (Mundy v. Neal, 186 Cal.App.4th 256, 260 (2010).)

     However, a fee denial of a requested $8,087.50 was reversed in Rodriguez v. Russi, Case No. B227161 (2d Dist., Div. 3 July 1, 2011) (unpublished), where the defense stipulated to judgment through an accepted CCP § 998 offer to $1,000 in statutory damages, an injunction to mount a full-length mirror, and statutory costs. (BLOG OBSERVATION--Note there was a stipulated injunction rather than a stipulated dismissal.) The lower court rationale was that no prelitigation demand had been made by plaintiff.

 

Manzanar.  Photographer:  Ansel Adams.  1943.

Civil Rights Two-Fer: Fee Awards Reversed And Affirmed In Two Different Contexts

 

Disability Fee Reversal--Mundy v. RLA Properties, Case Nos. B224667/B225612 (2d Dist., Div. 1 June 23, 2011) (unpublished).

     In this one, plaintiff in a Disabled Persons Act case, which has a fee-shifting provision in favor of the “prevailing party” (Civ. Code, § 55), lost his attempt to obtain statutory damages in a bench trial, with the lower court ultimately awarding the defense $7,052 in attorney’s fees. The merits judgment was affirmed, but the fee award was reversed. Because plaintiff’s suit did cause a remediation of ADA violations, it was an abuse of discretion to find that the defense was the clear “prevailing party.”

Anti-Harassment Fee Affirmance--Rahmat v. Miller, Case No. B226053 (2d Dist., Div. 6 June 23, 2011) (unpublished).

     Here, the defendant was awarded $2,950 in total fees in an anti-harassment lawsuit, which also has a fee-shifting provision (Code Civ. Proc., § 527.6(i)). Even though a symmetrical injunction was entered into by both sides, “prevailing party” status does not turn on a rigid definition. The appellate court found there was no abuse of discretion because an appearance had to be made by the defense because plaintiff did not timely get settlement papers to the court containing the mutual stay-aways.

Civil Rights: Substantial $311,218.26 Excessive Force Fee Award Affirmed On Appeal Using Up to $750 Hourly Rates

 

Fee Petitioner Shows How a Successful Fee Request Should Be Structured.

     In Jochimsen v. County of Los Angeles, Case No. B223518 (2d Dist., Div. 1 June 23, 2011) (unpublished), plaintiff narrowed an excessive police force case down to one civil rights claim, won a difficult jury verdict of $35,000, and then won attorney’s fees of $311,218.26 (out of a requested $406,821.26, or a 23.5% reduction after fee petitioners recommended a 20% reduction). The unhappy County (who was likely funding the litigation as well as being one of the named defendants) appealed. The result was affirmed in a well-written opinion by Justice Johnson of the Second District, Division 1.

     The fee petition proceeding was quite contentious, with lots of papers/objections filed with the lower court, and the trial judge was not pleased with the approximate $60,000 spent on the fee motion alone. However, the fee petitioners did provide the lower court with a good roadmap of how to successfully obtain a large award. Here is what we picked up from what was done below as tips for a good fee petition:

Civil Rights: TRO Win, Mooted When Opponent Voluntarily Changed Position To Moot Further injunctive Proceedings, Was Not Merits Win To Justify Civil Rights Fee Award

 

Third Circuit Court of Appeals, in Divided Ruling, Felt Bound by Buckhannon, With Interesting Dissents on the Merits and on Jurisprudential Thinking.

     The federal civil rights statute has a pro-plaintiff fee shifting provision in 42 U.S.C. § 1988. The U.S. Supreme Court, in Buckhannon Bd. & Care Home v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598 (2001), decided that a civil rights plaintiff must get a change in the legal relationships between the parties in a “judicially sanctioned” context, identifying a merits-judgment or court-ordered consent decree as examples of those that would qualify. Buckhannon, which did change the seascape as what qualified as a catalyst in this area, drew a very divided en banc decision from the Third Circuit Court of Appeals.

     Singer Management Consultants, Inc. v. Milgram, 2011 WL 2342733 (3d Cir. June 15, 2011), was a situation where plaintiff obtained a TRO against the State of New Jersey so that a concert could go ahead in Atlantic City, with the State later taking a 180 degree change in position at the preliminary injunction hearing which led to a concession that the constitutional claims had been resolved. Plaintiff then moved for civil rights fees as the prevailing party, but the both the district judge and Third Circuit majority (12 circuit judges) found that the TRO was not a merits-based decision under Buckhannon. The majority did seem to concede that the law might have been different under its own pre-Buckhannon decisions, but found itself bound by Buckhannon.

     Circuit Judge Roth, who obtained the concurrence of three other jurists, dissented, finding that the TRO grant was the functional equivalent of a merits-based “judicially sanctioned” decision. The dissenters agreed that the proper test was whether the relief placed a judicial imprimatur on plaintiff’s entitlement to substantially all the relief it sought in the complaint, a test they believed was readily met under the circumstances.

     Circuit Judge Aldisert, in a separate dissent (although he joined In Circuit Judge Roth’s dissent), has a very interesting discussion of jurisprudential decisionmaking and reasoning. He described the evolution of American jurisprudence from conceptual jurisprudence to a new school of thought factoring in a concern for society’s welfare into judicial process. Judge Aldisert believed the majority was backtracking from the civil rights reforms in precedents past and employed a “stingy interpretation” of Buckhannon’s “judicially sanctioned” requirement.

     In describing what happens when judges are faced with a result that is not pre-determined and law that is not clear, Judge Aldisert colorfully observed: “Some judges have lower thresholds than others, and are more inclined to find solace in shades and fringes rather than the black-letter law.” The decision is interesting reading for practitioners, as well as legal philosophers. (Or, as Justice Bedsworth was apt to observe while on the trial bench, “Welcome to the Hotel California.”)

Civil Rights/Allocation: U.S. Supreme Court Adopts “But For” Standard For Awarding Fees In Mixed Frivolous/Non-Frivolous Claims Case

 

Justice Kagan Delivers Unanimous Opinion For The Court.

     In Fox v. Vice, Case No. 10-114 (U.S. June 6, 2011), a unanimous U.S. Supreme Court decided that a “but-for” standard applies when determining whether a prevailing defendant should recover attorney’s fees under 42 U.S.C. § 1988 in a plaintiff’s suit involving both frivolous and non-frivolous claims. It ruled that section 1988 allows a defendant to recover reasonable attorney’s fees incurred because of, but only because of, a frivolous claim. “. . . the dispositive question is not whether attorney costs at all relate to a non-frivolous claim, but whether the costs would have been incurred in the absence of the frivolous allegation. The answers to those inquiries will usually track each other, but when they diverge, it is the second that matters.” (Slip Opn., pp. 10-11.) As a result, the district court’s use of a mere “focus” test was reversed, vacating a $48,681 fee award against plaintiff admitting federal civil rights claims were not valid.

     Justice Kagan authored the decision. Here is one of our favorite colorable passages from Fox:

     “In Hollywood, litigation most often concludes with a dramatic verdict that leaves one party fully triumphant and the other utterly prostrate. The court in such a case would know exactly how to award fees (even if that anti-climactic scene is generally left on the cutting-room floor). But in the real world, litigation is more complex, involving multiple claims for relief that implicate a mix of legal theories and have different merits. Some claims succeed; others fail. Some charges are frivolous; others (even if not ultimately successful) have a reasonable basis. In short, litigation is messy, and courts must deal with this untidiness in awarding fees.” (Slip Opn, p. 6.)

Supreme Court Justices’ wives attend breakfast in honor of Mrs. Roosevelt.  1938.

Post-Memorial Day Unpublished Troika: Reduced Fee Award Reversed; Res Judicata Supports Another Fee Award; Implied Covenant’s Operation Justifies Finding Opt-In Defendants Not Liable For Fee In Proposition 65 Case

 

$23,600 Fee Award Out of Requested $223,615.50 Reversed in Civil Rights Case.

     In Williams v. Hei Long Beach, LLC, Case No. B224211 (2d Dist., Div. 2 May 31, 2011) (unpublished), the appellate court reversed a fee award of $23,600 out of attorneys’ requested $223,615.50 in an Unruh Civil Rights hotel accommodation case resulting in a permanent injunction by which hotel agreed to accommodate disabled patrons with service animals. Although agreeing that the lower court had discretion to apportion time out on other noncompensable claims, the appellate court found that the injunction was an important public win in the case justifying more fees even though plaintiff won rather small damages. Also, it could not fathom why compensation was denied to one attorney who tried the case and was lead counsel. Remanded to reconsider the fees to be awarded to plaintiff’s attorneys.

Prior Federal Court Judgment Given Res Judicata Impact, Sustaining Fees Awarded in Favor of Three Individual Defendants Having Qualified Immunity.

     The next case involved the application of res judicata to sustain a $36,501 fee award (out of a requested $45,773 in fees) based on a prior federal judgment finding that three individual defendants were protected under the qualified immunity defense in a civil rights action. Because res judicata barred plaintiff’s effort to relitigate in the later-filed action based on the qualified immunity federal ruling, the lower court correctly concluded that the result was obvious, triggering the meritless/groundless fee-shifting provision of 42 U.S.C. § 1988(b) in favor of winning defendants. The decision so applying res judicata principles is California County Superintendents Educational Services Assn. v. Marzion, Case No. A129527 (1st Dist., Div. 4 May 31, 2011) (unpublished).

Implied Covenant of Good Faith and Fair Dealing Justified Not Awarding Fees to Plaintiff in Proposition 65 Opt-In Defendant Case.

     This last one, Consumer Advocacy Group, Inc. v. Sanders Paving, Inc., Case No. A127125 (1st Dist., Div. 5 May 31, 2011) (unpublished), involved a Proposition 65 consent judgment with language allowing potential defendants who were not parties to the initial action to “opt-in” to the judgment by agreeing to its terms and making certain payments--including an “opt-in premium” of reimbursing the plaintiff for documented out-of-pocket costs and fees incurred in commencing suit following the initial opt-in period. The trial court entered a corollary order indicating it would resolve fee/costs disputes if the parties were unable to do so. The lower court did not like the opt-in premium provision, indicating that the fees had to be reasonably incurred and that potential defendants opting-in had to be given notice of the consent decree before fee exposure would be triggered. On this basis, the trial court denied awarding additional fees from three defendants not given the requisite notice. The appellate court affirmed based on the implied covenant of good faith and fair dealing, having a good discussion of how it applies in consent decree situations involving Proposition 65.

Civil Rights: Nonprevailing Plaintiff in Unruh Act, DPA, And ADA Lawsuit Was Properly Not Hit With Adverse Fee Award

 

ADA Frivolousness Was Only Fee Basis, Which Was Not Established.

     Handicapped plaintiff in Pike v. Fillmore & Western Railway, Inc., Case No. B225578 (2d Dist., Div. 6 May 17, 2011) (unpublished) dodged a fee exposure bullet after not prevailing in a lawsuit brought under California’s Unruh Civil Rights Act, the California Disabled Persons Act (DPA), and the American with Disabilities Act of 1990 (ADA). Defendant moved for fee recovery, but was rebuffed at the lower court level. This prompted an appeal of the fee denial.

Civil Rights/Retainer Agreements: Section 1988 Fee Recovery Right Cannot Be Assigned By Litigant/Client To Attorney

 

Ninth Circuit So Held in Pony.

     A recent memorandum decision in a Ninth Circuit case reminds all of you civil rights practitioner of an important caveat: clients own the rights to fees under federal civil rights cases such that they cannot be assigned to their attorneys. However, attorney’s lien rights might lead to a different result.

     In Benas v. Baca, Case No. 09-56561 (9th Cir. May 11, 2011) (unpublished memorandum decision), Yagman & Yagman & Reichmann, who represented a plaintiff in a 42 U.S.C. § 1983 federal civil rights action, had a retainer agreement providing that plaintiff irrevocably assigned her right to any fee award to the attorneys. Later, after plaintiff filed for bankruptcy protection, the bankruptcy trustee and defendants settled for $35,000 in return for a full release/with prejudice dismissal of the lawsuit. Trustee moved to dismiss the action, while YYR moved for an award of § 1988 fees based on the retainer agreement assignment provision.

     The district judge denied YRR’s motion for fees based on Pony v. County of Los Angeles, 433 F.3d 1138, 1140 (9th Cir.), cert. den. sub nom., 547 U.S. 1193 (2006), which held that a plaintiff may not assign her right to seek attorney’s fees.

     YYR’s appeal argued that Pony was wrongly decided, but this challenge did not get much traction because only an en banc panel can overturn an existing Ninth Circuit decision. YYR also argued that its situation was distinguishable because plaintiff joined the attorneys’ fee request. However, this argument was rejected because the trustee was the owner of the claim such that plaintiff had no interest in the outcome. Afffirmed.

     BLOG UNDERVIEW--We wonder why attorneys did not insist on an attorney’s lien in the retainer agreement, which might have been binding on the trustee if validly created.

Civil Rights/Lodestar/Allocation: Appellate Court Affirms Decision To Award $1,000 Winning Plaintiffs Fees Of $60,400 Out Of A Requested $566,510

 

Trial Court Had Discretion to Reduce Lodestar, Parsing Out Unsuccessful Claim Fee Work.

     This next case describes the discretion allowed trial courts in calculating the lodestar as well as a nice job by the defense in mitigating fee exposure by providing the trial court with a basis for awarding fees only on successful claim work.

     In Lorenzen v. Vermont Restaurant, Case No. B219625 (2d Dist., Div. 5 Apr. 25, 2011) (unpublished), plaintiffs prevailed on some, but not all, FEHA claims against defendant former employers. Plaintiffs only garnered $1,000 in damages on their harassment claims, but sought to recover fees of $566,510 (lodestar of $283,255 augmented by a 2 multiplier). Defendants filed papers in opposition to the fee request showing that 75-80% of plaintiffs’ time was expended on unsuccessful claims, further arguing that plaintiffs should only be awarded $8,693.50 using a .15 negative multiplier. After two hearings, the trial court award plaintiffs $60,400 in fees, finding the reasonable fee for all work was $181,200 but that only one-third of that amount should be awarded as the lodestar given the time spent on unsuccessful claims (as shown by the pleadings and trial proof). Plaintiffs appealed, although unsuccessfully as you shall see.

Landlord/Tenant & Civil Rights: Plaintiff Not Entitled To Fee Recovery Under Retaliatory Eviction Or FEHA Fee Shifting Provisions

 

Published Decision Affirms Lower Court Denial of Fees.

     In Morrison v. Vineyard Creek, Case No. A127476 (1st Dist., Div. 5 Mar. 29, 2011) (certified for publication), plaintiff resolved a retaliatory eviction/FEHA dispute via settlement with defendants by which no wrongdoing was admitted but agreed that plaintiff could operate a family child care home without fear of retaliation and also paid her some damages for their delay in acknowledging her right to operate the home. Plaintiff then filed to recover a whopping total of $318,212.80 in attorney’s fees from defendants, a request denied by the lower court.

Civil Rights: Prevailing Defendant Over Claims Under Civil Code Sections 52 And 54.3 Not Entitled To Fee-Shifting Recovery Under Section 55

Sections 52 and 54.3 Held to Create Implied Exception to Section 55.

     The appellate court in Turner v. Assn. of American Medical Colleges, Case No. A126742 (1st Dist., Div. 5 Mar. 24, 2011) (certified for publication) had to consider dueling fee-shifting provisions under the Unruh Civil Rights Act: sections 52 and 54.3 only allowing fee awards to prevailing plaintiffs and section 55 which provides that prevailing parties in an action for injunctive relief under the Disabled Persons Act was entitled to fee recovery. Defendant prevailed after an earlier appellate reversal, seeking to recover $1,631,787.50 and $35,690.22 in costs--after all, defendant beat injunctive relief so as to claim fee entitlement under section 55. The trial court denied the fee request, but did award the requested costs.

     Reconciling the three fee-shifting provisions, the appellate court determined--in a case presenting a first impression issue--that the prevailing defendant was not entitled to fee recovery for hours because the work related to fee incurred in defending claims under sections 52 and 54.3. These provisions created an exception to section 55 by implication, prohibiting a fee award to a prevailing defendant for the same hours devoted to defending claims under sections 52 and 54.3. The lower court properly denied fees given the defense concession that the work was spent on 52/54.3 claims.

     BLOG UNDERVIEW--Earlier in Turner I (Turner v. Assn. of American Medical Colleges, 167 Cal.App.4th 1401 (2008) [explored in our October 30, 2008 post]), this same appellate court reversed a favorable merits judgment for the plaintiff here, which meant $1,969,000 in fees and costs to plaintiff at that stage went POOF!

Civil Rights: FEHA Winning Plaintiff, Despite Appellate Merry-Go-Round, Retains Substantial Fee/Costs Award

. . . And Gets Remand For More Retrial and Appellate Fees!

     Although this case took a very circuitous appellate route (through two appeals), tenacity sometimes pays off. It did in this one, especially where there was a mandatory FEHA fee-shifting provision in favor of the prevailing plaintiff.

     Fotheringham v. Avery Dennison Corp., Case No. B217757 (2d Dist., Div. 7 Mar. 22, 2011) (unpublished) involved a FEHA plaintiff who, after a prior appellate decision reversing a summary adjudication of two claims and a punitive damages demand even after plaintiff won damages for emotional distress and lost wages, still won $24,000 for mental suffering against defendant employer in a retrial. However, the trial court erroneously refused to add the $24,000 in retrial damages to the damages award in the first trial ($30,000, for a grand total of $54,000). After the first trial, the trial judge awarded plaintiff $383,810 in attorney’s fees, with another judge awarding the same amount after the result reached in the retrial. The lower court also awarded some costs, but taxed about $15,000 in expert witness fees. Both sides appealed in this confusing back-and-forth litigation.

Civil Rights/Allocation: Nonfrivolous Federal Civil Right Claim Fees Awarded As Part Of Anti-SLAPP Fee Recovery Would Not Withstand Appellate Scrutiny

Ninth Circuit Reverses and Remands To Craft Fee Recovery Only for anti-SLAPP Work.

     In Fox v. Vice, No. 10-114 (U.S. Sup. Ct., cert. granted, 131 S. Ct. 505 [Nov. 1, 2010]), the United States Supreme Court will consider whether attorney’s fees can be awarded for intertwined work when the civil rights claims are determined to be frivolous and fee-worthy in nature. The next case deals with a somewhat related, yet different, issue: can a defendant collect fees for nonfrivolous civil rights work under an anti-SLAPP motion successful on a different claim?

 

     The answer is no, according to the Ninth Circuit in Fabbrini v. City of Dunsmuir, Case No. 09-16292 (9th Cir. Feb. 11, 2011) (for publication).

     The problem with the district judge’s award was not in allowing recovery for the anti-SLAPP win on a defamation claim. However, the district judge also awarded fees to the defense even though plaintiff’s federal civil rights claim was never found to be nonfrivolous in nature. (Fees are only awardable to defendants in a civil rights suit if the § 1983 claim is found to be frivolous. See Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978).) The fee time work on the civil rights claim could not be added to the anti-SLAPP recoery unless there was a proper finding the civil rights claim was frivolous in nature. Also, the district court erred in its award of time for “fees on fees,” especially given that some of the entries did not relate to fee motion preparation. Reversed and remanded.

Civil Rights: Winning Defendants Could Not Recoup Attorney’s Fees Against DFEH Under CCP § 1028.5 Sanctions Statute

Government Code Section 12989.2 Prohibition Trumped Award Under § 1028.5.

     In Dept. of Fair Employment and Housing v. Mayr, Case No. H034935 (6th Dist. Feb. 9, 2011) (certified for publication), defendants won against Department of Fair Employment and Hosuing (DFEH) in a housing discrimination action, with the lower court awarding defendants attorney’s fees aggregating $19,200 under Code of Civil Procedure section 1028.5 (a sanctions statute allowing imposition of fees).

     DFEH appealed and won a reversal.

     The Sixth District, in a 3-0 opinion authored by Justice Elia, found that Government Code section 12989.2(a)--containing a prohibition against awarding fees and costs against the state--effectively trumped section 1028.5. Both the statutory language, legislative history, and “specific over general” statutory canons were used in reaching this determination.

Civil Rights: $140,000 Fee Award To School District Revised Under IDEA Fee Shifting Provision

Chief Judge Kozinski, on behalf of Ninth Circuit, Clarifies IDEA Fee Recovery Provision As to Defendants.

     R.P. v. Prescott Unified School Dist., Case Nos. 09-15651/09-16786 (9th Cir. Feb. 4, 2011) (for publication) involved a situation where a district court affirmed an ALJ’s determinations in a parent-commenced suit on behalf of a child claiming child was denied a free appropriate public education and then dismissed the remaining allegations in the complaint. The district judge then found the action was without foundation and brought for an improper purpose, awarding school district about $140,000 in attorney’s fees and costs against parents and their attorneys under 20 U.S.C. § 1415(i)(3)(B)(i)(II), (III). Losing parties appealed.

     Chief Judge Kozinski, writing on behalf of a 3-0 panel of the Ninth Circuit, reversed the fee award against parents and their attorneys.

     With respect to the “without foundation” fee award under (II), the Ninth Circuit began by observing that IDEA (Individuals with Disabilities Education Act) fashioned the (II) fee statute after the stringent § 1988 standard in Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421-422 (1978) and fashioned the (III) fee statute after F.R.Civ. P. 11. In this case, parents did make plausible arguments for equitable relief under both their IDEA and non-IDEA claims. The fact they did not prevail hardly warranted fee recovery, with such hindsight logic deterring attorneys from taking IDEA cases in contravention of the legislative purpose behind IDEA.

     On the “improper purpose” (III) fee ground, Judge Kozinski stated that recovery against parents required findings of both frivolousness and improper purpose, while only frivolousness need be demonstrated against plaintiffs’ attorneys. The district court relied on parents’ anger as the anchor for its fee award, but the Ninth Circuit found this was not an improper motive under (III). The IDEA and non-IDEA related claims also were not frivolousness in nature.

     Although parents sought fees on appeal, they did not get them. After all, they did not prevail on the merits of the IDEA claims. Fee award reversed, with no costs awarded to either side.

Civil Rights: Ninth Circuit, In Sharply Divided Opinion, Finds That Pro-Rata Allocation Of Fees Between Frivolous And Nonfrivolous Claims Is Impermissible

Majority Acknowledges Tough Burden Resulting to Defense Under Its “But For” Documentation Test, Drawing a Sharp Dissent from Circuit Judge Bybee.

     The next Ninth Circuit decision is an interesting one for defendants seeking fees in civil rights cases. It involves a situation where there were multiple claims, some based on civil rights, some on contract, and some on state law theories. The district judge, in essence, based a fee award on a pro-rata allocation of fees on the number of claims that were comparatively speaking found to be frivolous in nature, reduced by a financial hardship factor (a factor typically recognized in civil rights case fee reduction matters). This pro-rata allocation methodology drew a reversal by the Ninth Circuit, although there was a strong dissent by Circuit Judge Bybee.

     In Harris v. Maricopa County Superior Court, Case No. 09-15833 (9th Cir. Jan. 20, 2011) (for publication), the district judge awarded defendants fees of $85,514.84 and non-taxable costs of $40,150.23 (out of a defense request of $315,974.65 in fees and $ 53,533.66 in costs). However, the district judge basically used a formulaic approach of dividing fees equally across the total 10 claims and then allocating to each claim for which he determined fees to be appropriate one-tenth of the total general fees, reduced by a financial hardship factor.

Civil Rights/Sanctions: Federal Court of Appeals Provides Guidance on When Fees Should Be Awarded Against Losing Civil Rights Plaintiffs

 

First Circuit Finds Excluded Trial Evidence Could Be Used to Determine Reasonableness of Suit, Reversing Fee Award; Reviewing Court Also Scaled Down Sanctions Against Plaintiffs’ Attorney.

      In a civil rights political discrimination case, a district judge granted the defendants’ motion for judgment as a matter of law after a 15 day trial, in a ruling adverse to suing public employees. Plaintiff officers were then hit with an attorney’s fees award of $194,808 in favor of defendant mayor when the district judge found the suit was groundless and unreasonable. The district judge also ordered plaintiffs’ attorney to pay a third of the fee award ($64,936) for vexatious trial conduct under 28 U.S.C. § 1927, reducing the fee award against the plaintiffs to $129,872. The First Circuit, in Lamboy-Ortiz v. Ortiz-Velez, No. 09-1640 (1st Cir. Dec. 17, 2010), reversed the fee award against plaintiffs and scaled back the sanctions award against plaintiffs’ attorney.

     Fee Award

     The major problem with the district judge’s approach was putting too much weight on the ultimate failure of plaintiffs’ claims and ignoring excluded trial evidence that showed the reasonableness of the claims. Because the reasonableness compass focuses on circumstances existing at the time the complaint was filed, the fee order contravened the “non-hindsight” test of Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978).

     Attorney Sanctions

     F.R.Civ. P. 11 was out as a basis for sanctions, because the “safe harbor” provisions were not satisfied and it only applies to misconduct in written papers filed with the district judge. The sanctions here were imposed for plaintiffs’ attorney’s trial conduct, meaning that they had to be gauged under 27 U.S.C. § 1927.

     Although finding that § 1927 has both compensatory and punishment purposes (agreeing with the Seventh and Tenth Circuit versus the punitive goal singularly latched onto by the Second, Third, Sixth, and Federal Circuits), the sanctions were justified given the trial misconduct at issue. However, it was the amount of the sanctions that troubled the First Circuit. It found that the nearly $65,000 amount was “outside the mainstream in this circuit,” reducing the sanction to $5,000. (The federal court of appeals also noted the earlier sanctions would impose an unjustifiable hardship on plaintiff’s attorney, who operates a small law office with his son--a rationale we would label the “pocketbook mitigation rule.”)

Class Actions/Civil Rights/Private Attorney General/Settlements: California Lawyer Article Explores Negotiation Of Attorney’s Fees In Public Agency Cases

 

Concurrent Negotiation of Substantive Relief and Fees in Public Agency Cases Is Allowable.

     Adam W. Hofmann, an attorney in the San Francisco office of Hanson Bridgett, has written an article entitled “Negotiating Attorneys Fees” in the January 2011 edition of The California Lawyer. In it, he explains that California cases expressly reject any blanket prohibition against concurrent negotiation of substantive relief and fees, citing Ramirez v. Sturdevant, 21 Cal.App.4th 904, 919-920 (1994) and applying it to civil rights/private attorney general cases. He does write that many plaintiffs’ counsel appear to split substantive relief and fee negotiations, but suggests that in settlements with public agencies negotiations should proceed concurrently on both these issues. He ends with this paragraph: “And don’t forget: In a case where the court must approve a settlement, a fairness hearing may be the best protection of all, and for all.”

Year End Wrap-Up: Mike & Marc’s Top 20 Attorney’s Decision Fees Decisions--Part 2 of 2.

     Here is the second installment of our top 20 decisions.

     10. Jankey v. Lee, 181 Cal.App.4th 1173 (1st Dist., Div. 4 2010), review granted, No. S180890 (May 12, 2010) -- authored by Presiding Justice Ruvolo; discussed in our Feb. 6, 2010 post.

     Attorney’s fees are awardable to a prevailing defendant under Civil Code § 55 without the necessity of showing a plaintiff’s action was “frivolous, unreasonable, or groundless,” disagreeing with Ninth Circuit’s Hubbard decision. This has been accepted for review by the California Supreme Court and is not published anymore, but available for reading in the California Reporter or research databases.

     9. Plummer v. Day/Eisenberg, LLP, 184 Cal.App.4th 38 (4th Dist., Div. 3 2010) -- authored by Justice Ikola; discussed in our Apr. 30, 2010 post.

     Contingency fee agreement-driven case with an attorney charging lien is not subject to the disclosure/consent requirements of Fletcher v. Davis, 33 Cal.4th 61, 71-72 (2004).

     8. Conservatorship of Whitley, 50 Cal.4th 1206 (Cal. Sup. Cto. 2010) -- authored by Justice Moreno; discussed in our Dec. 22, 2010 post on Pappas v. Farr (2d Dist., Div. 6 2010) (unpublished).

     Litigant’s personal pecuniary interests may not be used to disqualify the litigant from obtaining fees under California’s private attorney general statute (CCP § 1021.5); rather, the deciding court must focus on the financial burdens and incentives involved in bringing the lawsuit.

     7. PNEC Corp. v. Meyer, 190 Cal.App.4th 66 (4th Dist., Div. 3 2010) -- authored by Justice Ikola; discussed in our Nov. 18, 2010 post.

     Defendant successfully obtaining dismissal of action based on forum non conveniens is a prevailing party under Civil Code section 1717, extending the reasoning from Profits Concepts Mgt., Inc. v. Griffith, 162 Cal.App.4th 950 (2008) (an earlier case determining that a defendant successfully moving to quash service for lack of personal jurisdiction is a prevailing party, authored by Justice Fybel of the 4th Dist., Div. 3).

     6. Lockton v. O’Rourke, 184 Cal.App.4th 1051 (2d Dist., Div. 4 2010) -- authored by Presiding Justice Epstein; discussed in our Apr. 24, 2010 post.

     Contractual clause in retainer agreement allows attorney parties to recover for their efforts in collecting fees against clients, avoiding application of the Trope bar.

     5. In re Mercury Interactive Corp., 618 F.3d 988 (9th Cir. 2010) -- authored by Circuit Judge Tashima (with a dissent by Circuit Judge Bybee); discussed in our Aug. 18, 2010 post.

     Although refusing to articulate a bright-line rule, F.R.Civ. P. 23(h) does not contemplate that class members’ objections to class counsel fee requests have to be filed before the fee motion itself is filed, which denies the class the full and fair opportunity to examine and oppose the motion.

     4. Estate of Manuel, 187 Cal.App.4th 400 (2d Dist., Div. 3 2010) -- authored by Acting Presiding Justice Croskey; discussed in our Aug. 11, 2010 post.

     Costs of proof sanctions for failure to admit requests for admissions under Code of Civil Procedure § 2033.420(a) can only be assessed against a party, not the party’s counsel.

     3. Thrifty Payless, Inc. v. Mariners Mile Gateway, LLC, 185 Cal.App.4th 1050 (4th Dist., Div. 3 2010) -- authored by Justice Moore; discussed in our June 23, 2010 post.

     Expert witness fees awardable under contract clause can be recovered under routine costs memorandum approach, disagreeing with Carwash’s approach that the fees must be pled and proven at trial.

     2. Donahue v. Donahue, 182 Cal.App.4th 259 (4th Dist., Div. 3 2010) -- authored by Justice Aronson; discussed in our Feb. 27, 2010 post.

     Extensive discussion of factors that are probative in gauging the reasonableness of fees requested in probate trust litigation involving multiple attorneys, billings with duplicative entries, litigation inefficiencies, and block billing time entries.

     1. Chavez v. City of Los Angeles, 47 Cal.4th 970 (Cal. Sup. Ct. 2010) -- authored by Justice Kennard; discussed in our Jan. 14, 2010 post.

     Trial courts have discretion to deny or reduce fee requests to winning plaintiffs in FEHA cases where a plaintiff’s success is minimal or there is a grossly inflated fee request.

Year End Wrap-Up: Mike & Marc’s Top 20 Attorney’s Fees Decisions In 2010--Part 1 of 2.

     Above:  Wrapping It Up.

      As we wish all readers the happiest of Holidays, we now present our top 20 published decisions from California appellate courts or the Ninth Circuit. This list is not meant to slight other important decisions in certain areas, but these are the ones that “rose to the top” from our perspective. We will post 10 today and 10 in an ensuing post. The number of ranking is not geared at all to the decision’s relative importance.

     20. Quan v. Computer Sciences Corp., 623 F.3d 870 (9th Cir. 2010) -- authored by N.D. Iowa District Judge Bennett, siting by designation; discussed in our Oct. 21, 2010 post.

     District courts retain discretion to award or deny routine costs to a prevailing party in an ERISA case as long as a proper record of the decision making process is made.

     19. California Correctional Peace Officers Assn. v. Virga, 181 Cal.App.4th 30 (1st Dist., Div. 4 2010) -- authored by Justice Sepulveda; discussed in our Jan. 16, 2010 post.

     A civil rights case arising under 42 U.S.C. § 1983 is not a “civil proceeding under the California Torts Claim Act” for purposes of Code of Civil Procedure § 1038 fee awards to state entities.

     18. Pipefitters Local No. 636 Defined Benefit Plan v. Oakley, Inc., 180 Cal.App.4th 1542 (4th Dist., Div. 3 2010) -- authored by Justice Aronson; discussed in our Jan. 14, 2010 post.

     Shareholder in publicly-traded company properly denied fee recovery under “substantial benefit” equitable rule where shareholder provided no pre-suit notification to the company and achieved fairly immaterial changes in a challenged proxy statement.

     17. Mundy v. Neal, 186 Cal.App.4th 256 (2d Dist., Div. 2 2010) -- authored by Justice Ashmann-Gerst; discussed in our July 1, 2010 post.

Disabled plaintiff’s failure to make a prelitigation demand for corrective action barred fees requested under California’s “catalyst theory.”

     16. Uzyel v. Kadisha, 188 Cal.App.4th 866 (2d Dist., Div. 3 2010) -- authored by Justice Croskey; discussed in our Sept. 23, 2010 post.

Probate Code § 17211(b) fee recovery to beneficiaries, as against trustees, has a “reasonable cause” element akin to the same element in a malicious prosecution action.

     15. Kirby v. Immoos Fire Protection, Inc., 186 Cal.App.4th 1361 (3d Dist. 2010), review granted, No. S185827 (Nov. 17, 2010) -- authored by Justice Sims; discussed in our July 27, 2010 post.

     Employer can recover fees in action containing Labor Code § 218 claims other than minimum wage/overtime compensation claims. In granting review, the California Supreme Court framed the issues to be considered as being these: (1) Does Labor Code § 1940 apply to a cause of action alleging meal and rest period violations or may attorney’s fees be awarded under Labor Code § 218.5?, and (2) Is our analysis affected by whether meal and rest period claims are brought alone or accompanied by wage/overtime claims?

     14. Leader v. Cords, 182 Cal.App.4th 1588 (4th Dist., Div. 1 2010) -- authored by Presiding Justice McConnell; discussed in our Mar. 24, 2010 post.

     Probate Code § 17211(b) is to be liberally construed in favor of trust beneficiaries successfully challenging a trustee’s failure to make trust distributions (construing “contests the trustee’s account” language in the fee-entitling statute).

     13. Barnett v. First National Ins. Co. of America, 184 Cal.App.4th 1454 (2d Dist., Div. 7 2010) -- authored by Justice Jackson; discussed in our May 28, 2010 post.

     Joint offers under Code of Civil Procedure § 998 to husband and wife are valid without need for apportionment on a going-forward basis, disagreeing with its prior Weinberg decision.

     12. County of Santa Clara v. Superior Court, 50 Cal.4th 35 (Cal. Sup. Ct. 2010) -- authored by Chief Justice George; discussed in our July 27, 2010 post.

     Public entities may compensate private counsel through contingency fee agreements if governmental entities retain control and provide proper supervision over private counsel.

     11. Moore v. Kaufman, 189 Cal.App.4th 604 (2d Dist., Div. 1 2010) -- authored by Justice Rothschild; discussed in our Oct. 24, 2010 post.

     SLAPP attorney’s fees award to successful defendant cannot be imposed against losing plaintiff’s attorney.

     The next 10 decisions are coming soon, so stay tuned--storm watch notwithstanding.

 

Stay tuned for more . . .

Civil Rights: Fee Award Remanded To Explore Waiver Argument By Ninth Circuit

Plaintiff’s Case Was Hardly Frivolous.

     In the “Civil Rights” category, we have explored cases under the federal statutory scheme known as Individuals with Disabilities Education Act (IDEA), which does have a fee shifting provision allowing an award of fees to a defendant where a plaintiff continues to litigate after the litigation clearly became frivolous, unreasonable, or without foundation. (20 U.S.C. §1415(i)(3)(B)(1)(II).) This next section was in play, but resulted in a remand.

     Plaintiffs in A.M. v. Monrovia Unified School Dist., Case No. 09-55169 (9th Cir. Dec. 15, 2010) (for publication) suffered summary judgment against a school district on an IDEA violation. Plaintiffs claimed reimbursement of expenses for minor’s caring at home when he should have been cared for at school. The district judge awarded attorney’s fees to defendant and against plaintiffs’ counsel in the amount of $49,245 on the ground that A.M.’s death mooted the case and plaintiffs should not have continued the litigation after it became moot.

     Result on appeal? Split decision.

     The majority, in a decision authored by Circuit Judge Goodwin, remanded the fee determination because (1) the Ninth Circuit addressed an issue of first impression on appeal such that its determination could hardly taint the IDEA issue as being frivolous in nature or moot, and (2) the district judge did not address defendant’s issue that the reimbursement issue was waived because plaintiffs did not present it before the administrative agency (a pre-district court stage).

     In dissent, District Judge Bennett (N.D. Iowa), sitting by designation, would have reversed the fee award completely based on the conclusion that plaintiffs did not waive the reimbursement claim before either the administrative agency or the district court.

Civil Rights: $211,111.63 Fee Award To Former Paralegal Affirmed On Appeal

 

Substantial Fee Recovery in Sexual Harassment Case Sustained.

     In a gnarly sexual harassment case involving a former paralegal, a jury awarded plaintiff $68,000 in compensatory damages against a law firm, the husband of the law firm’s principal owner, and the principal’s son, as well as punitive damages of $75,000 against firm and husband as well as punitive damages of $150,000 against son. The trial court later awarded plaintiff attorney’s fees of $211,111.63.

     Defendants appealed in Vargas v. Martinez-Senftner Law Firm, Case No. C055633 (3d Dist. Dec. 10, 2010) (unpublished), but to no avail.

     Their excessive fee/duplicative attorney work argument was forfeited because the appealing parties failed to support their arguments with citations to the record or to legal authority. That was the end of the matter on the fee challenge. (Lewis v. County of Sacramento, 93 Cal.App.4th 107, 113 (2001); In re Marriage of Nichols, 27 Cal.App4th 661, 672-673 n. 3 (1994).

Section 1717, Allocation, Civil Rights Cost Recovery, Prevailing Party, And Section 998: Court Of Appeal Faces A Melange Of Fee/Costs Issues

Fourth District, Division One Affirms Trial Court’s “Wash” Decision on Issues.

     The next case involves a melange of fee and costs issues arising from a contract and civil rights case in which plaintiff recovered nothing on her claims but beat school district’s contract cross-claim. That gave rise to all sort of prevailing party claims for both fees and costs. The trial court basically found it all came to a close “wash,”  with plaintiff getting some fees and defendant getting some costs by which it was about $1,250 ahead when the ultimate math calculus is done.

     Both sides appealed in Manoogian v. San Diego Unified School Dist., Case No. D053953 (4th Dist., Div. 1 Dec. 2, 2010) (unpublished). Care to guess the result? Well, our post headings give it away--affirmance across the board.