CALIFORNIA ATTORNEY'S FEES

FOIA: No Fees Recoverable Where Documents Voluntarily Turned Over Before 2007 Amendments

Ninth Circuit Determines 2007 Catalyst Amendments Are Not Retroactive in Nature.

     Under the Freedom of Information Act, 5 U.S.C. § 552, a complainant in a FOIA action is deemed to be eligible for an award of attorney's fees if he has "substantially prevailed" on his claim. 5 U.S.C. § 552(a)(4)(E) (prior to 2007 amendments). However, under 2007 amendments, FOIA was modified to delineate that a complainant has "substantially prevailed" if the complainant has obtained relief through "either (i) a judicial order, or an enforceable written agreement or consent decree, or (ii) a voluntary or unilateral change in position by the agency, if the complainant's claim is not insubstantial." 5 U.S.C. § 552(a)(4)(E)(i) & (ii). (The (ii) prong is also known as the catalyst theory of recovery.)

     In Oregon Natural Desert Assn. v. Locke, Case No. 06-35851 (9^th Cir. July 8, 2009) (for publication), the Ninth Circuit decided that the FOIA 2007 amendments were not retroactive in nature and that the catalyst theory did not allow recovery for pre-2007 voluntary turnovers of documents by an agency in a FOIA case. As a result, an attorney's fees award of $46,889.02 to an FOIA complainant had to be reversed and remanded for purposes of striking portions of the award that represented catalyst theory recovery.

FLSA: Expert Witness Fees Not Recoverable As Attorney's Fees Or Costs

Nontestimonial Expert Costs Cannot Be Recouped Under FLSA.

     A colleague that co-contributor Mike worked with at a past law firm called and asked if expert witness fees for nontestimonial work were recoverable by a plaintiff in an action brought under the Fair Labor Standards Act of 1938 (FLSA), given that 29 U.S.C. § 216(b) provides that a prevailing plaintiff may be reimbursed for "a reasonable attorney's fees … and costs of the action."

     The answer appears to be "no."

Labor Commissioner Appeals: Employer Wins $10,000 Fee Award Against Unsuccessful Ex-Employee

Fees Can Be Awarded Under Labor Code section 98.2(c).

     An employer is entitled to an award of reasonable attorney’s fees, in an amount to be determined by the trial court, when an employee unsuccessfully appeals from a Labor Commissioner’s ruling to the trial court. (Lab. Code sec. 98.2(c).) Cooper v. Golden Gate Reporters, LLC, Case No. A122156 (1^st Dist., Div. 4 June 26, 2009) (unpublished) involved application of this provision, where a trial court awarded winning employer $10,000 out of a requested $16,000 in fees. The award was affirmed under the deferential abuse of discretion standard.

     BLOG UNDERVIEW—The Court of Appeal actually helped employee out upfront. She appealed from a minute order awarding fees, not the later signed judgment. However, the appellate court liberally construed the notice of appeal to encompass the later order—a determination that has or has not been endorsed by other courts depending on the circumstances.

Special Fee Shifting Statute: California Fair Debt Collection Practices Act Does Allow For Enhancement of Fee Awards Using Multipliers

First District, Division 1 Holds that Civil Code section 1788.30(c) Language Does Not Preclude Use of Multipliers.

     Civil Code section 1788.30(c), part of the Robbins-Rosenthal Fair Debt Collection Practices Act, allows a prevailing debtor enforcing any liability under the Act to recover “reasonable attorney’s fees, which shall be based on time necessarily expended to enforce the liability . . . .” Does this language allow for enhancement through use of a multiplier in the right case? Answer: You know already from the headline—yes it does.

     Komarova v. National Credit Acceptance, Inc., Case Nos. A121316 & A122041 (1^st Dist., Div. 1 June 25, 2009) (certified for publication) so held. There, under some egregious circumstances involving mistaken identity theft, plaintiff was awarded $197,905 in compensatory damages under the Act and $67,905 compensatory damages for intentional emotional distress. The jury also awarded her punitive damages of $75,000, all because a collection agency refused to believe that plaintiff (who spells her first name Anastasiya) was not Anastasia Komarova (no “y” in the first name). Later, plaintiff moved to recover a fee award of $378,375 under the Act (a $252,250 lodestar increased by a 1.5 multiplier). After the defense claimed that “at most $60,000” was reasonable, the trial court reduced the lodestar by 35%--to $163,962 (apportioning out work on the emotional distress and other non-fee type of work)—and multiplied by 1.25, resulting in a award of $204,953. After adding more time for posttrial work (with no multiplier), the grand total fee award clocked in at $230,740.50. Defendant appealed.

Arithmetica instructs an algorist (left) and an abacist (right).  Wikipedia.

Contempt Proceedings: $67,392.84 Fee Award For Contempt In Disobeying Injunction Reversed

Third District Affirms Contempt Order, But Reverses Fee Order On Due Process Grounds.

     For those of you having an interest in contempt proceedings (which are quasi-criminal in nature), the next case is for you. It also reinforces that fee awards must be crafted with regard to giving an opponent adequate due process rights.

     In Thompson v. Superior Court (Maxim Crane Works, L.P.), Case No. C060210 (3d Dist. June 25, 2009 ) (unpublished), Maxim won an injunction contempt order against some individuals who sold their stock in a company to Maxim and agreed to some noncompete restrictions. The trial court issued an injunction and then found the individuals in contempt for violating the injunction. The lower court also awarded $67,392.84 in reasonable expenses, including attorney’s fees on the very day it signed the contempt order. (Code of Civil Procedure section 1218(a) does provide that “reasonable attorney’s fees and costs” can be awarded against a person adjudged guilty of contempt for violating a court order, if those expenses were connected with the contempt proceeding.) However, the supplemental declaration detailing the fees and costs was provided the same day as the contempt order was signed.

     The individuals challenged the contempt order and fee award through a certiorari petition. (Yep, that is how you do it; a contempt judgment is not appealable. See Imuta v. Nakano, 233 Cal.App.3d 1570, 1584 n. 18 (1991).)

                  Brigitte Bardot in Le Mepris [Contempt].

FOIA POOF!: District Court's Award of $146,442 To Prevailing FOIA Plaintiff Reversed In Light Of Partial Reversal of Summary Judgment Grant

District Court Will Reconsider Fees Upon Remand.

     The Freedom of Information Act, 5 U.S.C. § 552 (FOIA), does contain a provision allowing district courts to award fees and costs to parties "substantially prevailing" as against the United States under the statute. (5 U.S.C. § 552(a)(4)(E).) This statute, upon which California's Public Records Act is modeled, was in play in the next case we discuss.

     In Lahr v. National Transportation Safety Board, Case Nos. 06-56717 et al. (9^th Cir. June 22, 2009) (for publication), plaintiff Lahr was not convinced that TWA Flight 800—which exploded midair off the coast of Long Island in 1996—was caused, as the government concluded after an extensive investigation, by a fuel tank explosion initiated by an electrical short circuit. Instead, he maintained the government was covering up the real cause: a strike by a missile launched offshore by the U.S. Navy. To prove his theory, he sent more than 200 FOIA requests to several governmental entities. After the agencies only gave him partial information, Mr. Lahr sued and won a summary judgment requiring release of other documents. The district court awarded him $146,442 in costs and fees after finding Mr. Lahr "substantially prevailed" by its order that governmental agencies produce 26 out of 32 contested records.

998 Offers, CA Tort Claims and Civil Rights Fees: Second District, Division 1 Faces A Potpourri Of Legal Issues On A Hefty ADA Civil Rights Fee Award

Unpublished Decision Faces Some Interesting Fee-Shifting Issues In ADA Case.

     Many of the California intermediate appellate unpublished decisions we examine have some very interesting legal issues for jurists to grapple with and resolve. The next one is no exception, containing some gnarly fee-shifting issues that involve Code of Civil Procedure section 998 (pretrial offer statute), Code of Civil Procedure section 1038 (fees shifting under the California Tort Claims Act), fee shifting under 42 U.S.C. section 1988 (federal civil rights act), and fee shifting under the Americans with Disabilities Act. So, buckle up and here we go on this one: Suarez v. County of Los Angeles, Case No. B210823 (2d Dist., Div. 1 June 19, 2009) (unpublished).

     Suarez (not Betty, of “Ugly Betty” fame) involved civil rights, ADA, and California Torts Claim Act claims brought by a deaf person against Los Angeles County for mistakenly keeping him in jail for 8 days without the assistance of a sign-language interpreter to demonstrate he was wrongfully jailed. After his release, plaintiff sued and won a jury verdict under the ADA claim, a verdict under which he was awarded damages of $5,000. Earlier, County had served Mr. Suarez with a CCP section 998 offer for $8,000, together with a caveat that reasonable fees were to be determined by the trial court in an amount not to exceed $12,000—an offer rejected by Suarez before the jury trial occurred. Mr. Suarez moved to recover $193,582.50 in fees and $9,095.12 in costs under the ADA, while County moved to recoup fees of $113,512.50 and costs of $11,072.26 based on obtaining summary adjudication of the California Tort Claims Act claim and the civil rights violation. County also sought recovery of $12,164 in routine costs by reason of its 998 offer.

     The trial court determined the 998 offer was facially void, ruled that County was not entitled to fees for winning the Tort Claims Act claim, did not address the County’s fee request under the federal civil rights statute, granted Mr. Suarez’s motion to strike County’s costs memorandum, awarded plaintiff his routine costs, and finally awarded Mr. Suarez attorney’s fees in the sum of $193,582.50. County appealed.

POOF!: Second District’s Reversal of Rent Control Ordinance Dispute Requires Remand To Reconsider Fee Awards

Plaintiff’s $719,000 Fees/Costs Award Goes POOF!

     We have surveyed several decisions in our category “POOF” that illustrate the principle that many reversals (partial or in full) will require a reversal of a fee/costs award and remand to reconsider after the dust has finally settled on the reversed claims in subsequent trial court proceedings. That is what exactly happened in the next case, with a $719,000 fees/costs award evaporating until the final battles are waged at the litigation front.

     In Bisno v. Douglas Emmett Realty Fund 1988, Case Nos. B193604, 195422 (2d Dist., Div. 1 June 19, 2009) (certified for publication), a jury awarded plaintiff liability wins and punitive damages of more than $900,000 against apartment owner for violations of two Santa Monica rent control ordinances. After various posttrial motions, the trial court awarded plaintiff compensatory damages of $125,616 under the rent control ordinances and reduced the punitive damages award to $311,420. Because the Santa Monica charter amendments allowed the prevailing party to recover costs and reasonable attorney’s fees, the lower court awarded plaintiff costs of more than $19,000 and attorney’s fees exceeding $700,000. Apartment owner and plaintiff both appealed certain aspects of the proceedings below.

     Based on the effect of the litigation privilege and because the jury should have been instructed on the applicability of the litigation privilege on one of the rent control ordinances, reversal as a matter of law was ordered on one rent ordinance claim and remand for proper instruction on the other. This reversal meant that both parties’ attorney’s fees requests had to be deferred until a final determination of the remaining rent ordinance claim subject to a fee-shifting statute for the winner. Although plaintiff might yet win, the end result was that the $719,000 fees/costs award went … POOF! … for the time being.

Remedies, Fee Shifting Provisions and Settlement Efforts: Appellate Court Partially Reverses Based On Lack Of Privity But Sustains Other Fees In Complex Development Agreement Case

Fourth District, Division 1 “Multitasks” in Covering a Wide Gamut of Fee Issues in Recent Unpublished Opinion.

     Here is a review of a complex and wild decision covering a myriad of remedy and fees issues in the context of City of Novato’s dispute with a developer and its successor over performance of two separate development agreements to build streets and make improvements to seven homes as well as preserve certain acreage as open space in a residential subdivision. Developer later transferred four buildable lots to Mr. Morf, even though there was no assignment or direct assumption of any development agreement with City. Litigation began in 2002 over development agreement performance, with City cross-complaining for both damages and specific performance. The jury awarded zero damages to City (finding damages were too difficult to ascertain), but the trial court granted specific performance of the development agreements in favor of City and against developer and Mr. Morf. Eventually, City was awarded net attorney’s fees of $476,713 as the prevailing party under contractual fee clauses as against developer and Morf, with both appealing the adverse determinations.

     The First District, Division 3, in a 3-0 opinion authored by Presiding Justice McGuiness, addressed a myriad of remedy and fee issues in City of Novato v. MCCE Development, LLC, Case Nos. A116957, 120137 (1^st Dist., Div. 3 June 17, 2009) (unpublished), reversing the specific performance decree against Mr. Morf and reversing the award of fees to City as against Mr. Morf. Except for these limited reversals, the judgment was affirmed, but remanded for reconsideration of the scope of equitable relief against Mr. Morf and a reconsideration of the amount of the City’s fees to be reimbursed by developer in light of the Morf reversal. So, here we go on synopsizing this 43-page opinion on fee topics.

FDCPA: Attorney’s Fees For “Bad Faith” Actions Cannot Be Assessed Against Plaintiff’s Attorneys

Ninth Circuit Addresses First Impression Issue, Departing From Result Reached by Other Federal Courts.

     The Federal Debt Collection Practices Act (FDCPA), at 15 U.S.C. section 1692k(a)(3), provides that a district judge may award to the defendant reasonable attorney’s fees on a finding that an FDCPA action was brought “in bad faith and for the purpose of harassment.” Although this provision can obviously result in fees being assessment against the FDCPA plaintiff, can it also mean that plaintiff’s attorney can be exposed to fee exposure under this statutory provision?

     The Ninth Circuit recently answered “no,” in Hyde v. Midland Credit Mgt., Inc., Case No. 07-55326 (9^th Cir. June 9, 2009) (for publication).

     It based its decision on similar reasoning employed in a False Claims Act case, Pfingston v. Ronan Engineering Co., 284 F.3d 999, 1006 (9^th Cir. 2002). The Court of Appeals also was not persuaded by limited contrary analysis in Fourth Circuit and S.D.N.Y. decisions, which either involved imposition of sanctions based on multiple grounds or without precise consideration of the narrow issue under consideration in Hyde.

EAJA: No Prevailing Party Unless Some Type Of Formal Relief Is Entered

Ninth Circuit Finds No Fee Entitlement to Citizens Group Under Buckhannon.

     This next one is for you federal practitioners, determining a very narrow fee entitlement issue under the Equal Access to Justice Act, 28 U.S.C. sec. 2412(d)(1)(A) (EAJA). Do not snooze, anyone out there if this is outside your realm of interest, because we do cater to your area at other times—instances outside the zone of interest for others.

     EAJA directs district courts to award attorney’s fees to “a prevailing party” in qualifying civil actions against the United States respecting review of agency actions. The United States Supreme Court, in Buckhannon Board & Care Home, Inc. v. West Virginia Dept. of Health & Human Resources, 532 U.S. 598, 603 (2001), determined that this meant the party must have some formal judgment or consent decree favorably entered in order to prevail—although it did not draw the lines that tightly.

     The Ninth Circuit confronted applying Buckhannon in a very peculiar context. The majority found there was no prevailing party, although the dissent disagreed based on the vagaries not addressed in Buckhannon.

     In Citizens for Better Forestry v. U.S.D.A., Case No. 07-16077 (9^th Cir. June 9, 2009) (for publication), a public interest group sued under various federal environmental statutes alleging that the USDA was wrong in promulgating new rules for the management of the National Forest System lands. USDA announced it would promulgate a new rule shortly after commencement of the litigation, and the Ninth Circuit reversed an adverse standing ruling in summary judgment proceedings brought by the public interest group in the ongoing federal action. USDA then issued a new final rule, and public interest group dismissed its case and moved for EAJA fees. The district court awarded attorney’s fees to the public interest group, with USDA appealing the award.

                The Forest Ranger.  c1913.  Library of Congress.

Special Fee Shifting Statute: Third District Affirms $29,674 Fee Award Against Sacramento County In A Contempt Proceeding To Enforce Injunction Abating A Nuisance

Court of Appeal Enforces Faces the Conflict Between Civil Code Section 1717 and Government Code Section 25845(c).

     Civil Code section 1717 is straightforward in allowing for mutual recovery of attorney’s fees in California by a prevailing party where a contractual clause so authorizes such a recovery. However, sometimes this provision seemingly comes into conflict with other statutes. For example, Government Code section 25845(c) limits the amount of prevailing party attorney’s fees to those incurred by the losing county in an action, administrative proceeding, or special proceeding to a abate a nuisance, but only if the attorney’s fees were authorized by a county ordinance. However, Government Code section 25845(b) also makes clear that the recovery of attorney’s fees not predicated upon a county ordinance “shall be in addition to and shall not limit any prevailing party’s right to recover costs pursuant to [Code of Civil Procedure] section 1032 and 1033.5 [with section 1033.5 including as costs attorney’s fees authorized by contract] …”

     The collision between these Civil Code and Government Code sections was confronted by the Third District, recently, in County of Sacramento v. Sandison, Case No. C058396 (3d Dist. May 29, 2009) (certified for partial publication).

Special Fee Shifting Provisions: Financial Condition Of Indigent Litigant Is A Factor To Consider

Second District, Seven 7 So Holds Under Civil Code Section 1354(c), But Splinters Badly in the Process.

     We all know that fundamental access to the courts is more than just rhetoric; it is a bulwark of our whole legal system. This principle took “front and center” importance in the next case, where entitlement to fees was not in doubt under a special mandatory fee-shifting statute. What was in doubt was whether the financial condition of the losing indigent litigant should be taken into account—the “pocketbook” factor frequently factored into the mix of things, especially a fee award. The lower court denied fees on the indigency basis alone, a determination that was reversed and remanded—but not necessarily for why you might think. (So, read on!)

     Plaintiff, a housing cooperative tenant who was represented for a time by counsel but then proceeded in pro per, lost an unopposed summary judgment motion against owner, which moved for mandatory attorney’s fees of $48,328 under Civil Code section 1354(c) (a fee-shifting clause under the Davis-Stirling Act that we have frequently discussed under our category “Homeowner Associations”). The trial court denied fees based on plaintiff’s financial condition alone.

     In Garcia v. Santana, Case No. B206513 (2d Dist., Div. 7 May 28, 2009) (certified for publication), the Second District, Division 7—in a published opinion generating majority, concurring, and dissenting opinions—reversed and remanded.

People living in miserable poverty.  August 1936.  Elm Grove,      Oklahoma.  Dorothea Lange, photographer.  Library of Congress.

Mobilehome Residency Law: Fees Awardable To Prevailing Party Even If He/She Is Not A “Homeowner”

 

First District, Division 5 Interprets Civil Code Section 798.85 Fee-Shifting Provision.

     Civil Code section 798.85 is a special fee-shifting provision arising under the Mobilehome Residency Law (MRL, Civil Code section 798 et seq). It provides: “In any action arising out of the provisions of this chapter the prevailing party shall be entitled to reasonable attorney’s fees and costs. A part shall be deemed a prevailing party for the purposes of this section if the judgment is rendered in his or her favor . . . .” The next decision explores whether a prevailing party must be a “homeowner” for purposes of fee recovery under section 798.85. The First District, Division 5 answered “no” on the issue.

     In De Los Santos v. KOMAR, LLC, Case No. A121043 (1^st Dist., Div. 5 May 14, 2009) (unpublished), plaintiffs won an $8,000 interference award against mobile home park, with the trial court indicating that park also violated Civil Code section 798.4(a) in unreasonably failing to approve plaintiffs’ new buyer for their mobile home. Then, plaintiffs were awarded $18,630 in attorney’s fees pursuant to section 798.85. Defendant appealed.

Prevailing Party In U.S. Tax Proceeding: 26 U.S.C. Section 7430 Allows Award Of Fees To Prevailing Party Even Though Paid By A Third Party

Noncontingent Obligation to Repay Fees or Contingent Obligation to Repay In Event of Recovery Justifies Fee Award Under Section 7430, the Ninth Circuit Rules.

     The U.S. Tax Code, 26 U.S.C. section 7430(a), (c), permits a discretionary award of litigation costs, including attorney's fees paid or incurred for attorney services, to the prevailing party in any civil tax proceeding brought by or against the United States, unless the United States' position was substantially justified and subject to the prevailing party having net worth under certain limits. Furthermore, the prevailing party must show that it exhausted IRS administrative remedies and did not unreasonably protract the tax proceedings that generated fees in the first place. However, what happens if a third party (albeit a related corporate affiliate also sued) paid the fees for an individual prevailing party? Has the prevailing party still "incurred" fees for purposes of an award under section 7430? The Ninth Circuit has recently answered "yes" to this question.

     In Morrison v. Comm'r of Internal Revenue, Case No. 06-75332 (9^th Cir. May 13, 2009) (for publication), the Ninth Circuit adopted a broad definition of "incur" under section 7430, holding that a taxpayer can "incur" attorney's fees if he assumes either (1) a noncontingent obligation to repay the fees advanced on his behalf at some later time, or (2) a contingent obligation to repay the fees in the event of their eventual recovery. In coming to this conclusion, it sided with the reasoning of the Federal Circuit in an EAJA case because of the immaterial differences between section 7430 and the EAJA. (See Ed A. Wilson, Inc. v. General Servs. Admin., 126 F.3d 1406, 1407, 1410-1411 (Fed. Cir. 1997).) It also found support in decisions where courts had awarded fees to petitioners represented by pro bono counsel in related legal contexts. (Slip Opn., at pp. 5759-5760.)

Longshoremen: Ninth Circuit Departs From Other Circuits On Fee Entitlement During “Pre-controversion” Time Frame

Federal Court of Appeals Refuses to Follow Contrary Fourth, Fifth, and Sixth Circuit Decisions on the Issue.

     For all you attorneys specializing in practice under the Longshore and Harbor Workers’ Compensation Act (LHWCA), the next one is for you.

     LHWCA section 928 provides that under certain circumstances employers must pay a “reasonable attorney’s fees” to the successful claimant. (33 U.S.C. sec. 928.) Section 928(a) imposes four conditions that must be satisfied in order to receive fees: (1) the claimant must file a claim with the Deputy Commissioner of the Office of Workers’ Compensation Programs (OWCP); (2) the employer must receive notice of the claim from the Deputy Commissioner; (3) the employer must decline to pay compensation or not respond within 30 days; and (4) the claimant must “thereafter” utilize the services of an attorney to prosecute his claim. (Day v. James Marine, Inc., 518 F.3d 411, 414 (6^th Cir. 2008).)

     In Dyer v. Cenex Harvest States Cooperative, Case No. 07-73549 (9^th Cir. May 1, 2009) (for publication), employee’s attorney was not allowed to recover fees for the period between his client’s injury and Cenex’s refusal to compensate, known as the “pre-controversion” period. Counsel was awarded fees in the post-controversion period, but his hourly rate was reduced from $350 to $235. The fee award was vacated and remanded.

ADA: Reversal Of Lawsuit Based On Lack Of Standing Requires Vacating Of Monetary Sanctions

Ninth Circuit Reverses District Court’s Sanctions Order.

     In an American with Disabilities Act (ADA) case, a district judge dismissed a lawsuit based on plaintiff’s lack of standing and imposed monetary sanctions against plaintiff and his counsel for bringing a frivolous case. The Ninth Circuit reversed the standing determination, which also meant that the sanctions order “went away.”

     Because the Ninth Circuit had subsequently found standing in a similar situation, Doran v. 7-Eleven, 524 F.3d 1034, 1041 (9^th Cir. 2008), reversal was required in this case before it, where the summary judgment motion was decided before issuance of Doran.

     The reversals came in Wilson v. Kayo Oil Company, Case Nos. 07-56765 & 08-55444 (9^th Cir. Apr. 24, 2009) (published per curiam opinion).

FEHA: $1,059,350.60 Fee Award, Based on 1.5 Multiplier, Affirmed On Appeal

Use of Multiplier Appropriate Even Where Substantial Punitive Damages Also Were Awarded.

     Bimbo Bakeries, known for selling such brands of Orowheat and Entemann’s, suffered an adverse jury verdict based on plaintiff’s complaint for wrongful termination, gender and pregnancy discrimination, and violation of related California statutes. The jury awarded plaintiff $340,700 in compensatory damages and also assessed $2 million in punitive damages against Bimbo Bakeries. Because section 12965(b) of the Fair Employment and Housing Act (FEHA) permits the trial court to award attorney’s fees and costs to a prevailing party, the lower court also awarded plaintiff fees in the amount of $1,059,350.60 using a 1.5 multiplier. Bimbo Bakeries appealed use of the multiplier.

     The First District, Division 4, in Lopez v. Bimbo Bakeries USA, Inc., Case Nos. A119263 & A119720 (Apr. 23, 2009) (unpublished), rejected defendant’s arguments relating to the use of the multiplier.

           1939 World's Fair. Wonder Bakery.  Library of Congress.

Unruh Act: Court Of Appeal Affirms $12,436 Attorney’s Fees Award Based On Limited Success Of Plaintiff

 

In a Split Opinion, Second District, Division 6 Rejects Plaintiff’s Requested $24,871.75 In Light of His Recovery of $4,000 Minimum Statutory Damages.

     In cases involving mandatory fee-shifting statutes (such as the Unruh Act, Civil Code section 52(a)), we have seen an emerging theme that encompasses a large number of attorney’s fees recoveries: the success of the litigant usually has a great deal to do with the fee award in connection with the trial court’s discretionary decision making calculus. The next decision we examine is no exception to this observation even though a dissenting justice saw things differently.

     Plaintiff in Barrette v. Costco Wholesale Corp., Case No. B202606 (2d Dist., Div. 6 Apr. 16, 2009) (unpublished) won minimum statutory damages of $4,000 under the Unruh Act arising out of a violation under the American with Disabilities Act (ADA, 42 U.S.C. sec. 12182). The small award was the result of defendant moving quickly to put policies in place to rectify future ADA violations. The trial court awarded plaintiff only about one half of requested fees--$12,436 out of the sought-after $24,871.75 lodestar (originally, plaintiff sought $27,278, but the trial court eliminated $2,856.25 to reach the lodestar amount). Plaintiff appealed, claiming a higher fee award was in order.

Special Fee Shifting Ordinances: Can Rent Stabilization Ordinances Result In Fee Exposure?

You Betcha, Just Ask East Palo Alto—As the Next Post Shows.

     Page Mill Properties, the largest residential landlord in East Palo Alto, has been doing battle in court with the city over the proper interpretation of certain rent exemption decisions made by the East Palo Alto Rent Stabilization Board under the local rent stabilization ordinance.

     Can these types of ordinances result in fee shifting? Yes they can. See the ordinance for East Palo Alto, Section XV.A.5.

Class Action POOF!: Plaintiffs Lose $253,800 Summary Judgment Award And $107,000 Postjudgment Attorney’s Fees Award Then Evaporates

Fourth District, Division 1 Reverses Summary Judgment Grant Under Marijuana Reform Statute Involving Job Applicants.

     The next case is an interesting one, although it again illustrates the POOF! principle—if a merits judgment is reversed, the fees award vanishes with it.

     Larson v. Casual Male Stores, LLC, Case Nos. D051554 & D052185 (4^th Dist., Div. 1 Apr. 8, 2009) (unpublished) focused on Labor Code sections 432.7 and 432.8.

Is A Prevailing Party Still Entitled to Attorney’s Fees When A Claim Is Defeated By Mootness?

Ninth Circuit Holds That Fees Are Still In Order, Although Circuit Judges Are Badly Splintered on the Issue.

     The next issue—whether a prevailing party is entitled to attorney’s fees under a fee-shifting statute where the controversy has been mooted—may be destined for U.S. Supreme Court review. The opinions of the circuit judges in an amended decision, Center For Biological Diversity v. Marina Point Development Co., Case No. 06-56193 (9^th Cir. Mar. 27, 2009 amended) (for publication), may have sealed the fate for this particular issue.

American Bald Eagle.   Library of Congress.

Civil Harassment: Prevailing Defendants May Obtain Discretionary Awards Of Attorney’s Fees

First District, Division 4 So Rules In Interpreting CCP section 527.6(i).

     Krug v. Maschmeier, Case No. A121940 (1^st Dist., Div. 4 Mar. 25, 2009) (certified for partial publication) determined that a prevailing defendant in a civil harassment action can recover attorney’s fees even if the action was not frivolous or not brought in bad faith.

Fee Sanctions Under $5,000: Not Appealable

Second District, Division Two Applies CCP section 904.1(a)(12) in Venue Transfer Dispute.

     A.Z. Mashiah, Ltd. v. Christopher Ranch, LLC, Case No. B204185 (2d Dist., Div. 2 Mar. 23, 2009) (unpublished) reminds us all that only a sanctions order greater than $5,000 is immediately appealable under Code of Civil Procedure section 904.1(a)(12), one of the key appeal jurisdictional subdivisions.

     There, defendant lost a venue transfer battle and his attorney was sanctioned $2,090 under Code of Civil Procedure section 396b(b), which authorizes a court to order fees against a venue loser (with the fees being the personal liability of the attorney as between attorney and losing client in such an instance). Defendant and his attorney appealed the adverse rulings.

     Both lost. Defendant lost because a venue transfer order can only be reviewed through an appellate mandate petition. (Code Civ. Proc., sec. 400.) Attorney lost because the $2,090 sanctions order was not immediately appealable under section 904.1(a)(12), but could only be reviewed on appeal from any final judgment or by extraordinary writ petition. (Code Civ. Proc., sec. 904.1(b).) Thus, both appeals were dismissed.

FEHA: Court of Appeal Affirms Award Of Lower Fee Award To Winning Plaintiff

First District, Division 4 Sustains Fee Award of $676,001 Based on a 1.25 Multiplier, Rather than Plaintiff’s Requested $940,590.87 Lodestar Plus a Proposed 2.0 Multiplier.

     The First District, Division 4, in the unpublished decision of Tarver v. City and County of San Francisco, Case No. A116731 (1^st Dist., Div. 4 Mar. 23, 2009) (unpublished), has penned a nice opinion showing the deference that appellate courts will give to well-reasoned decisions by trial courts, even where the lower courts reduce proposed lodestars and award diminished multipliers.

Labor Code Violations: Trial Court Award Of $236,760 To A Single Prevailing Plaintiff Affirmed On Appeal

First District, Division Two Sustains Lower Court’s Application of 1.5 Multiplier.

     Labor Code section 218.5 authorizes a mandatory award of attorney’s fees to a prevailing party in any action for nonpayment of wages if any party requests fees and costs upon initiation of the action. Labor Code section 1194(a) mandates an award of reasonable fees and costs to an employee recovering unpaid minimum wages or overtime compensation. These two statutes were the ones that led to a substantial fee recovery by a prevailing single plaintiff, with the Court of Appeal sustaining the award on appeal.

     In Ahmed v. Good Nite Management, Inc., Case No. A120400 (1^st Dist., Div. 2 Mar. 19, 2009) (unpublished), plaintiff won a bench trial by which he was awarded $293,999.55 in compensation for overtime and missed meal periods. The defendant hotel claimed he was an exempt employee, but that defense did not prevail. Plaintiff was able to take advantage of the four-year limitations reach-back period under Business and Professions Code section 17200. Plaintiff was also awarded attorney’s fees under sections 218.5 and 1194(a) in the amount of $236,760. Hotel appealed, but did not overturn either the merits or fee determinations.

POOF!: Summary Judgment Reversal In City’s Favor Causes Tumble Of $245,130 Fee Recovery By Plaintiff

Fourth District, Division 1 Gives Domino Effect to Reversal.

     POOF! again strikes.

     City of San Diego obtained a partial reversal of a summary judgment in favor of a plaintiff who had also been awarded postjudgment fees of $245,130 under Government Code section 996.4, which pertains to a public employee’s right to reimbursement of defense costs incurred in litigation arising from the performance of his/her job duties.

     In City of San Diego v. Means, Case No. D052499 (4^th Dist., Div. 1 Mar. 12, 2009) (unpublished), both sides raised very interesting argument as to why the fees should or should not have been awarded—a virtual primer for any practitioners needing to make arguments about Government Code section 996.4’s reach (and construction of one of its exceptions in section 995.4(a)). However, the appellate panel concluded that the reversal of the judgment meant the matter was not yet “final, final”—after all, the complicated issues raised on the fee award “may settle or otherwise be resolved without the parties’ further resort to his court.” Although plaintiff could renew the defense costs reimbursement request after the remaining counts were resolved upon remand, the Court of Appeal dodged having to resolve the complicated issues. POOF! (for the time being).

Post-Judgment Enforcement and Fraudulent Conveyance: Fees Are Awardable Based On Jury Determination That Parties Conspired/Aided and Abetted In Efforts To Avoid Enforcement of Judgment Against Predecessor

Second District, Division 7 Also Decides That Alter Ego Should Have Been Added As a Defendant For Purposes of Exposure to Anti-SLAPP Fees.

     The next case shows that appellate courts will reinstate fee exposure where they are convinced that a party was part and parcel of a scheme to evade a judgment or was held liable as an alter ego.

     Red Hill Enterprises v. Gould, Case No. B193939 (2d Dist., Div. 7 Mar. 18, 2009) (unpublished) arose out of a judgment owing by defunct judgment debtor Learning Tree University (with the judgment containing a contractual fees clause relating to enforcement efforts). Learning Tree affiliates then lost a jury verdict by which they were found to have attempted to make fraudulent conveyances and conspired/aided and abetted in efforts to avoid the prior judgment. In addition, one of the individual affiliates was found to have been Learning Tree’s alter ego. (Earlier, Learning Tree lost an anti-SLAPP motion for which fees were awarded.) The trial court, however, denied fee motions brought against the affiliates in connection with the fraudulent judgment avoidance verdict and denied a motion to make the individual affiliate liable for satisfaction of the anti-SLAPP fee judgment.

     On appeal, the party challenging the fee orders was granted reversal.

Contempt Attorney’s Fees Under Code Of Civil Procedure Section 1218(a) Are Vacated Based On Failure To Apportion And On Due Process Grounds

 

Fourth District, Division 3 Also Finds That Fee Clarifying Substantiation in Reply Brief Was Too Late Unless Opponent Given Opportunity for Further Response.

     Code of Civil Procedure section 1218(a) provides for attorney’s fees to “the party initiating the contempt” for fees which that party incurred “in connection with the contempt proceeding.” It is not a general prevailing-party-at the-end-of-litigation-statute (such as Civil Code section 1717), but is limited to fees incurred with regard to a specific contempt proceeding. In the next case, our local Court of Appeal reversed a $25,000 contempt fee award under section 1218 for failure to apportion and on due process grounds.

      In Gates v. Pfeiffer, Case No. G039450 (4^th Dist., Div. 3 Mar. 17, 2009) (unpublished), a family restraining order battle involving multiple family members finally peaked when a contempt order was entered against one of the family members who happened to be a licensed attorney representing other involved family members. After obtaining a contempt order, the winning party sought to seek $41,630.08 in fees under section 1218(a) based on one-page, cursory invoices. Attorney opposed, and the winning party boosted the total to $90,631.49 but did provide more detail in reply papers

--albeit asking for fees based on all work done in the matter rather than just isolating the time spent on the contempt. The lower court awarded $25,000 in fees, a determination reversed on appeal.

     Presiding Justice Sills, on behalf of a 3-0 panel, found the fee award should have been denied on two grounds.

Winning County Teacher's Challenge To $180,000 Fee Award Under Education Code Section 44944(e)(2) Affirmed

Second District, Division Two Finds No Abuse of Discretion in Not Awarding $300,670 in Attorney's Fees to Winning Teacher.

     The next case concerns a statutory fee-shifting statute—Education Code section 44944(e)(2). It also is an interesting illustration of how appellate courts vary in finding whether a lower court should have articulated the basis for its fee award for purposes of satisfying the abuse of discretion standard.

FEHA: 25% Of Requested Fees Awarded Based On Apportionment

Second District, Division 3 Sustains Application of Negative Multiplier Based on Plaintiff Prevailing On Only One of Four Claims.

     The California Fair Employment and Housing Act, Government Code section 12900 et seq. (FEHA), has a mandatory fee-shifting provision for prevailing plaintiffs. (Gov. Code, sec. 12965(b).) Nonetheless, it is tempered by mandating only awards of reasonable fees and costs in the discretion of the trial court. This means that the lower court can either enhance or reduce the award depending on the circumstances, as the next case illustrates.

     In Weisdorf-Mahserjian v. Serco, Inc., Case No. B206243 (2d Dist., Div. 3 Mar. 6, 2009) (unpublished), plaintiff pled 5 FEHA cause of action but only prevailed on a retaliation claim for which a jury awarded $43,866.58 for past economic loss. Plaintiff then moved for a $180,545.50 fee award—broken down as a lodestar of $144,434 (number of hours worked by attorneys times their applicable hourly rates) plus a requested 1.25 multiplier. The defendant opposed, arguing fees should be denied outright or that plaintiff should only be awarded 25% of the lodestar because she only prevailed on one out of her four claims.

Harassment Prohibition Orders: Attorney’s Fees Awarded To Winning Defendant

 

CCP Section 527.6(i) “Prevailing Party” Language Is Broad, Rules the First District.

     Code of Civil Procedure section 527.6(i) authorizes a discretionary award of attorney’s fees and court costs to the prevailing party in an action to obtain a TRO or preliminary injunction prohibiting harassment. The First District, Division 5 rebuffed a losing litigant’s argument that it was more limited in scope.

Another POOF!: Defendants’ $55,000 Fees/Costs Award Goes Away When Court of Appeal Reverses Summary Judgment In Landlord-Tenant Lawsuit

 

Reversal Means Award Goes POOF!

     The POOF! principle got illustrated again, recently, in Spinks v. Equity Residential Briarwood Apartments, Case No. H031468 (6^th Dist. Mar. 4, 2009) (certified for publication). There, landlords had obtained a summary judgment against tenant in a contentious landlord-tenant lawsuit after tenant’s employer terminated her and asked the landlord to change the lock on the apartment unit she was occupying. The lower court awarded defendants a judgment exceeding $55,000, including attorney’s fees of more than $52,000, plus costs of just over $3,000. This was based on Civil Code section 789.3(b), which provides that a court shall award reasonable attorney’s fees to a prevailing party in an action involving the claim that landlord used self-help to terminate a residential tenancy.

     On appeal, the Sixth District reversed the summary judgment in favor of the defense. Accordingly, it did not have to address the fee-shifting statute because “[w]here summary judgment is reversed on appeal, there is no prevailing party and thus no basis for an award of fees.” (Rich v. Schwab, 162 Cal.App.3d 739, 745 (1984).) Or, put another way, POOF!

Longshore and Harbor Workers’ Compensation Act and Fair Debt Collection Practices Act: Practitioners Should Get Higher Hourly Rates Based On Two Companion Ninth Circuit Decisions

Federal Court of Appeals Determines That A Broader Relevant Market Study, Not Just Past LHWCA Awards, Is In Order.

     The Ninth Circuit recently decided two decisions that will likely result in higher hourly rates in the lodestar analysis for practitioners submitting fee recovery requests in LHWCA cases, a result that follows from a past decision that seems to countenance a boost in hourly rates for FDCPA practitioners.

     In the companion cases of Christensen v. Stevedoring Services of America, Case No. 07-70247 and Van Skike v. Director, Office of Workers’ Compensation Programs, Case No. 07-73886 (9^th Cir. Mar. 2, 2009) (for publication), some longshoremen challenged fee awards to their attorneys at the hourly rate of $235-$250 based on the Benefits Review Board’s past awards at these rates to practitioners specializing in LHWCA cases, which at 33 U.S.C. sec. 928(a) provides for a “reasonable attorney’s fees” in regard to services performed before the BRB. The attorneys had sought higher rates in the $350 per hour range. On appeal, the Ninth Circuit vacated and remanded so that the fee award could be evaluated under a “market rate” test that likely will lead to awards at higher hourly rates for the LHWCA attorneys.

Trade Secret Misappropriation: Sixth District Affirms $1,114,930 Attorney’s Fees Award To Defense For Bad Faith Trade Secret Misappropriation Claim

Court of Appeal Applies Gemini Bad Faith Test Under Civil Code Section 3426.4.

     Civil Code section 3426.4 is a special fee-shifting provision in the trade secret misappropriation area. It authorizes a trial court to make a discretionary award of fees and costs to the prevailing party “if a claim of misappropriation is made in bad faith, a motion to terminate an injunction is made or resisted in bad faith, or willful and malicious misappropriation exists.” The Sixth District recently affirmed a substantial fee award to the defense under the first prong of section 3426.4. We now review that decision.

     In K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Case No. H031026 (6^th Dist. Mar. 3, 2009) (unpublished), plaintiff lost a jury trial on a trade secret misappropriation claim. The jury expressly found that the plaintiff made its misappropriation claims in bad faith, a finding endorsed by the trial judge. (As we shall see, this was based on the fact that plaintiff attempted to support its case with forged documents.) Defendants moved for attorney’s fees in a multi-pronged attack: (1) they asked for $1,114,930 in fees under section 3426.4; (2) they requested fees of $782,883.80 under Civil Code section 1717 based on a fees clause; and (3) they requested fees of $1,100,068.75 based on plaintiff’s failure to admit requests for admissions that resulted in substantial expenses in proving the non-admitted facts as true. The trial court granted the fee request of $1,114,930 under section 3426.4.

California Supreme Court Refuses To Depublish Bernardi Decision

Decision Affirming $244,287.50 Fee Award Under the California Public Records Act Remains Citable.

     We would like to thank Ina Bendis, an attorney practicing in Santa Clara and one of our readers, for an update on Bernardi v. County of Monterey, a Sixth District decision sustaining a $244,287.50 fee award in favor of plaintiffs and against Monterey County under the California Public Records Act (first discussed in our October 1, 2008 post).

     Bernardi was subsequently certified for publication, even though County of Monterey opposed the publication request. County even requested the California Supreme Court to depublish the decision, but that request was denied on February 20, 2009. That means Bernardi is a good precedent for CPRA victors to cite in any battle over fees.

     Thanks to Ina for the update.

Tree Injury: Successful Plaintiff Not Awarded Attorney’s Fees In Light Of Plaintiff’s Recovery Of Doubling “Penalty”

 

Fourth District, Division 1 Affirms Trial Court’s Discretionary Refusal to Award Fees.

      Trees seem to be a popular subject of dispute between neighbors, either because they are destroyed as part of new construction or because they block scenic views of the ocean/nearby canyons. There are some special penalty and fee-shifting provisions relating to timber destruction, statutes that were considered in the next case.

Shareholder Derivative Actions: Prevailing Defendants Must Look To Bond For Recovery Unless Independent Basis Exists For More Fees

Fifth District Finds that Corporations Code Section 800 Is a Bond/Security Statute, Not Fee Liability Statute.

     The Fifth District, in West Hills Farms, Inc. v. RCO Ag Credit, Inc., Case No. F054748 (5^th Dist. Jan. 26, 2009) (certified for partial publication), found that a prevailing defendant in a shareholder derivative action is limited to recovering under any bond posted by the plaintiff under Corporations Code section 800 (even though the bond cannot exceed $50,000). Defendant moved to recover fees and costs of more than $350,000, rather than the $50,000 bond posted by plaintiff under section 800. Both the lower and appellate courts limited defendant to the bond amount, finding that section 800 was a “bond or security” statute rather than “an open-ended attorney fee liability” statute. The appellate panel relied on Freeman v. Goldberg, 55 Cal.2d 622 (1961) and Alcott v. M.E.V. Corp., 193 Cal.App.3d 797 (1987) in support of its conclusion.

     However, in a footnote, the West Hills Farms court did note that the defendant could look to legal or statutory authority independent of section 800 to recover fees and costs beyond the amount of the bond. (Slip Opn., at p. 10 n. 11, citing Brusso v. Running Springs Country Club, Inc., 228 Cal.App.3d 92, 107 (1991).)

Withdrawn Cross-Claim Subject to Fee Shifting Means No Prevailing Party Under Retention “Prompt Payment” Statute

 

Owners Did Not Prevail Because Contractor Withdrew Cross-Claim During Deposition and Never Pursued Recovery Under It.

     Courts like to encourage narrowing of disputes by litigants. The next case illustrates how a non-prevailing contractor avoided attorney’s fees exposure under Civil Code section 3260(g), which authorizes fees/costs to the prevailing party involving a claim that retention payments were improperly withheld to a contractor, by withdrawing the 3260 claim during litigation.

Arbitration: Arbitrator’s Fee Award Modified By Appellate Court Based On Finding “No Anchor” For Fee Recovery

First District, Division 2 Demonstrates Appellate Scrutiny Of Basis For Fee Award.

     In past posts (see, e.g., our July 15, 2008 post on Patel v. Sagar), we have reviewed appellate decisions involving scrutiny of arbitration awards. Several decisions have affirmed arbitrator fee awards even though there was no clear basis, either by contract or statute, for such recovery by the winning arbitration claimant. Lest readers think that arbitration awards are always governed by “equitable” principles that drive many practitioners crazy, the next case may give you solace that many appellate courts will modify awards by deleting fee recoveries lacking in substantive bases.