$18,900 Fee Award Goes POOF!, But Opponent’s CCP § 128.7 Motion Correctly Denied Where Defendants Trimmed Fee Request Down After Getting Safe Harbor Documents.
This next opinion, Ashegian v. Beirne, Case No. B254020 (2d Dist., Div. 4 Nov. 19, 2014) (unpublished), is interesting because it deals with a first impression issue relating to the proper interpretation of Business and Professions Code section 6158.4(i), which allows a litigant to obtain a mandatory fee award for prevailing in an action involving a challenge to the propriety of legal advertising if fees are proper under Code of Civil Procedure section 1021.5 (the private attorney general statute), assuming “the court finds that the action has resulted in the enforcement of an important public interest or that a significant benefit has been conferred on the public.” (This “or” language would be of importance in the appellate court’s ultimate decision.)
The facts are that defendant attorneys successfully demurred to a plaintiff’s action challenging that the attorneys’ Internet advertising violated State Bar Act regulations. (As observed already, there is a fee-shifting provision for a prevailing party under this scheme.) The attorneys successfully demurred to the complaint on the basis that plaintiff failed to satisfy the procedural requirement by first submitting a complaint to the State Bar, a determination affirmed earlier in an unpublished appellate decision. However, attorneys then moved for fees under B&P section 6158.4(i), prompting plaintiff to send a CCP § 128.7 safe harbor missive in an attempt to coax withdrawal of the motion. In response, attorneys scaled back their fee request from $46,300 to $18,900 for fees only incurred on appeal and for “fees on fees” associated with the fee motion itself. The lower court granted the $18,900 “trimmed down” fee request and denied plaintiff’s request for 128.7 sanctions. Plaintiff appealed, obtaining a partial reversal on the fees order but not winning the challenge to the sanctions denial.
Acknowledging that a first impression issue was presented about whether fee entitlement was proper under B&P section 6158.4(i), the appellate court first determined that defendant attorneys, even though not plaintiffs, were just as entitled to fee recovery under the statute. However, it then had to confront the “or” language in section 6158.4(i), because the trial judge did find that there was an enforcement of an important public interest, but determined he did not have to find a significant benefit. The conundrum was that section 6158.4(i) incorporated fee entitlement under the private attorney general statute, which requires that both of these elements satisfied. In the end, the appellate court agreed that both elements had to be satisfied under section 6158.4(i), which set the stage for reversal.
Reversal was predicated on the appellate court’s determination that defendant attorneys could not show a significant benefit was conferred on the general public/a large class of persons as a matter of law. Rather, the prior opinion was unpublished, setting no precedent, and there really had not been many suits under the Internet advertising statute such that the “win” mainly benefited only the defendant attorneys themselves. POOF! went the fee award.
As far as the sanctions denial, that was no abuse of discretion. After all, defendant attorneys did trim down their fee request and the request was by no means unwarranted in nature so as to satisfy 128.7’s requirements.