CALIFORNIA ATTORNEY'S FEES

Special Fee Shifting Statutes: Chacon Opinion – Involving San Francisco Rent Stabilization and Arbitration Ordinance – Is Published.

 

     In our January 19, 2010 post, we examined Chacon v. Litke, Case Nos. A122026 & A123889 (1^st Dist., Div. 2 published Feb. 8, 2010), which was unpublished at the time. This decision established that the lodestar analysis was the presumptive method for gauging special fee-shifting provisions, including those enacted under governmental ordinances. On February 8, 2010, the Court of Appeal certified it for publication so that it can now be cited. 

Special Fee Shifting Statute: Fee Recovery Under Hyde Amendment Overturned

Ninth Circuit Finds Government Reliance on Expert Opinion Not Tantamount to Misconduct.

     Here is a rare one for you federal criminal practitioners.

     The Hyde Amendment, 18 U.S.C. § 3006A, permits the court to award attorney’s fees to a defendant in a criminal prosecution where the government has acted in a manner that was “vexatious, frivolous, or in bad faith ….”

     In U.S. v. Capener, 2010 L.A.D.J. DAR 392 (2010), the Ninth Circuit overturned a fee award under the Hyde Amendment, finding that it was not misconduct for the government to rely on an expert opinion for a certain theory even though the criminal charges were ultimately dismissed. The record simply contained no facts showing that further investigation was needed or that bad faith was involved.

Rent Stabilization Ordinance: East Palo Alto Ordinance Does Not Allow For Fee Recovery in Actions Between Landlord And The City

Appellate Court Reverses Fee Award in Favor of Landlord.

     Woodland Park Mgt., LLC v. City of East Palo Alto Rent Stabilization Bd., Case No. A124154 (1^st Dist., Div. 5 Feb. 1, 2010) (certified for publication) involved “prevailing party” fee recovery language in East Palo Alto’s Rent Stabilization and Eviction for Good Cause Ordinance (RSO) in a mandate proceeding where landlord successfully challenged an increase in a landlord registration fee imposed by the City. Landlord was also awarded $20,037.25 in fees under the RSO fee recovery provision.

     On appeal, Justice Bruiniers, writing for a 3-0 panel of the First District, Division 5, reversed. Based on an examination of all the provisions of the RSO, the appellate court concluded that fees are only authorized in actions between landlords and tenants to determine their respective rights. However, the RSO does not grant fee recovery in actions between landlords and the City.

     For a plot summary of the television movie Rent Control, click here.

Partition: Trial Court Did Not Err In Awarding $95,267.41 In Attorney’s Fees To Plaintiff In Partition Action, Where Incurred For A “Common Benefit”

Plaintiff Sought $415,458.75 In Fees, But Trial Court Reductions and Apportionments Lowered Actual Award to $95,267.41.

     In partition actions, Code of Civil Procedure section 874.010(a) authorizes an award of costs to include reasonable attorney’s fees that have been “incurred or paid by a party for the common benefit.” When you get into this area of fee recovery, you will find that much older precedents come into play, which was the situation when the court reviewed defendant’s challenge to a partition fee award in Charco Ventures v. Sandoval, Case No. C060305 (3d Dist. Jan. 22, 2010) (unpublished).

 

    Above:  Partition action.  Judgment of Solomon.  Nicolas Poussin.  1649.  Louvre. 

 

     There, plaintiff was awarded damages of $190,500 for defendant’s breach of fiduciary duty, ordered paid from the partition sale proceeds of certain property in which plaintiff and defendants were 50/50 cotenants. Plaintiff then sought $415,458.75 for the services of both current and prior counsel. The trial court awarded plaintiff $95,227.61 in fees and $40 in other costs, for a total award of $95,267.41. Because plaintiff (along with another affiliated party) made numerous claims in addition to the partition claim, the primary reductions were for apportioned-out work relating to claims that were “not for the common benefit” of the cotenants. (The trial court actually applied a 54.6% allocation formula, further reduced by a 60/40 split of fees between the two cotenants.)

     Defendant appealed.

     The fee award was affirmed by a 3-0 panel in a decision authored by Justice Cantil-Sakauye.

     Defendant primarily argued that no fees should have been awarded because plaintiff’s fees related to claims not incurred for the “common benefit” of the cotenants. The appellate court rejected this notion, observing that common benefit fees could still be awarded even in contested partition suits. (Capuccio v. Caire, 215 Cal. 518, 528-529 (1932); Riley v. Turpin, 53 Cal.2d 598, 602 (1960).) Because plaintiff’s claims were not spurious, cases refusing to award fees were found distinguishable because they had a very different sets of facts. (E.g., Forrest v. Elam, 88 Cal.App.3d 164, 167, 172-174 [involving spurious claims].) With respect to claims that do involve personal interests alone, the appellate court stated that section 874.040 takes this in account by allowing the court to make an equitable apportionment of fees—something actually done in the Sandoval matter.

     Defendant also challenged the 60/40 apportionment in fees made by the lower court, arguing this was askew from the 50/50 presumptive apportionment. However, the appellate panel found the lower court apportioned as a matter of equity—not based on property interests—because defendant undertook pre-litigation efforts to obstruct sale of the property and took meritless positions in the partition suit. The equitable apportionment, under the circumstances, was no abuse of discretion.

Rent Stabilization Ordinance: Winning Plaintiffs In Wrongful Eviction Action Awarded $306,321.50 In Attorney’s Fees

Lodestar Is the Standard, and Attorney Still Entitled to Lodestar Fees Even Where Client Agreement Was Below Market or Discounted in Nature.

The lodestar method is the one used most often by trial courts in awarding both attorney’s fees under contractual provisions and fee-shifting statutes. What about county ordinances containing fee-shifting sections? Answer: lodestar also.

In Chacon v. Litke, Case Nos. A1220261/A123883 (1^st Dist., Div. 2 Jan. 19, 2010) (unpublished), winning plaintiffs in a wrongful eviction suit against defendants were awarded $306,321.50 in attorney’s fees and costs under a section of the San Francisco Rent Stabilization and Arbitration Ordinance that simply allows the trial court to award a prevailing party reasonable attorney’s fees and costs “pursuant to court order.” The lower court did just that, also determining that $350/hour was a reasonable lodestar rate for plaintiffs’ lead attorney. (Lead attorney, in a contingency arrangement, agreed to charge plaintiffs $300/hour.) Miffed defendants appealed, challenging use of the lodestar and allowance of an hourly rate in derogation of the contractual agreement with client.

Result: affirmed.

The lodestar is the presumptive method in all fee-shifting statutes, unless some contrary intention appears. (Ketchum v. Moses, 24 Cal.4^th 1122, 1126 (2001).) The Court of Appeal also relied on treatise writer Mr. Pearl’s commentary that Ketchum so held. The appellate panel presumed that the Board of Supervisors also intended to use the lodestar method in setting a fee award.

The trial court’s fee award was not excessive. The lower court rejected a 1.5 multiplier request and plaintiffs’ request for a $400/hour rate for their lead attorney. However, the appellate court found no abuse in allowing $350/hour as a reasonable hourly rate. Beyond that, it held—citing Mr. Pearl’s CEB treatise at § 12.26—that the lodestar applies even if the attorney charges nothing, charges below market, or charges at a discounted rate.

Above:  Evicted sharecroppers along Hwy. 60.  New Madrid County, Missouri.  Arthur Rothstein, photographer.  January, 1939.  Library of Congress.

Civil Rights: CCP § 1038 Does Not Apply To Unsuccessful 1983 Civil Rights Claims

First District, Division 4 So Decides, Also Denying Fees on a Different Theory Raised After Losing the § 1038 Request—Counseling to Seek Fees on Multiple Grounds the First Time Around.

     State entities eventually defended against a civil rights claim brought by a peace officer organization under 42 U.S.C. § 1983. State entities then moved to recover $370,529.29 in attorney’s fees under Code of Civil Procedure section 1038, which permits trial courts to award defendants their costs and fees in defending against unmeritorious and frivolous claims brought under the California Tort Claims Act. That request was denied, so state entities made a second request under 42 U.S.C. § 1988, which allows fee recovery in civil rights cases to prevailing defendants where plaintiff’s action was frivolous, unreasonable, or without foundation. That request, too, was denied. State entities appealed.

     Their appeals were unsuccessful.

     In California Correctional Peace Officers Assn. v. Virga, Case No. A123989 (1^st Dist., Div. 4 Jan. 15, 2010) (certified for publication), the appellate decision decided: (1) a section 1983 civil rights action is not a “civil proceeding under the California Tort Claims Act” for purposes of a fee award under section 1038; and (2) prevailing defendants were obligated to put forth all of their reasons for an award of attorney’s fees when they made their initial request, not attempting to use a later motion for renewal as a device to get a “second bite at the apple.” In doing so, the Court of Appeal has a nice discussion on motions for reconsideration and motions for renewal that is must reading for all litigators who contemplate the filing of such motions.

Special Fee Shifting Statute: Failure To File Certificate Of Merit Did Not Give Rise To Fee Recovery Where Indemnity Cross-Complainant Had Obtained Expert Opinion Before Filing Cross-Complaint

“No Harm, No Foul” Means No Real Reason to Award Fees Under a Discretionary Statute.

     For those of you who litigate construction actions, you likely are familiar with the requirement that indemnity cross-complainants must file a certificate of merit—after obtaining a favorable expert opinion—in cross-claims filed against professional engineers, architects, or surveyors. (Code Civ. Proc., § 411.35.) If this requirement is not complied with, a demurrer or motion to strike will lie. (§ 411.35(g).) Further, section 411.35(h) provides that a trial court may order a party, a party’s attorney, or both, to pay reasonable expenses, including attorney’s fees, incurred by another party as a result of the failure to comply with the COD requirement upon favorable conclusion of the litigation for the indemnity cross-defendant. The purpose of this fee statute is to discourage frivolous professional negligence suits against certain professionals. (Ponderosa Center Partners v. McClellan/Cruz/Gaylord & Associates, 45 Cal.App.4^th 913, 915 (1996).)

     Fees were not levied against a noncompliant party in the recently published decision of UDC-Universal Development, L.P. v. CH2M Hill, Case No. H033610 (6^th Dist. Jan. 15, 2010) (certified for publication). There, a discretionary denial of fees was upheld where the circumstances demonstrated that (1) the failure to file the COD had not caused the cross-defendant any further expense of any kind; and (2) cross-complainant had consulted an expert and obtained a favorable decision before filing the cross-claim. “No harm, no foul” was the basic conclusion of the appellate panel in upholding the fee denial.

FEHA And CCP § 1033(a): The California Supreme Court Has Spoken—Trial Courts Have Discretion To Deny Or Dramatically Reduce Fee Awards Where FEHA Judgment In Superior Court Was Under the $25,000 Jurisdictional Limit

 

No Abuse of Discretion in Denying Fees Altogether Where Plaintiff Awarded $11,500 But Requested $870,935.50 In Fees.

     In Chavez v. City of Los Angeles, Case No. S162313 (Cal.Sup.Ct. Jan. 14, 2010) (certified for publication), our state supreme court faced the collision of two statutory schemes: the California Fair Employment and Housing Act (FEHA), which encourages fee shifting for successful plaintiffs, and California Code of Civil Procedure section 1033(a), which allows the court discretion in awarding fees and costs where the prevailing party plaintiff recovers a judgment that could have been rendered in a limited civil case (under $25,000 in amount).

     It resolved the collision in favor of section 1033(a), holding that trial courts still have discretion to deny or reduce a fee request in a FEHA case where plaintiff's success is minimal and a grossly inflated fee request is involved. Under the circumstances in Chavez, the lower court did not abuse its discretion by denying a $870,935.50 fee request where plaintiff recovered damages of $11,500.

     The Court did caution that lower courts must give due consideration to the pro-plaintiff considerations governing FEHA fee requests, but certainly could consider such factors as plaintiff's success in deciding that the requests were too exorbitant or not warranted at all.

     Justice Kennard was the author of Chavez on behalf of a 7-0 court.

     Below:  King Pyrrhus.

                                                         

Finding that Plaintiff's Actions and Omissions Were "Exceptional" in Patent Lawsuit, USDC Judge Gary Feess Awards Substantial Fees to Defendant

 

Feess on Fees:  Award Equals $779,100.34 in Fees, $11,769.20 in Expenses, and $28,776.49 in Other Costs.

     We learned from an unpublished order in the next case that according to a recent American Intellectual Property Lawyers Association survey, "the average patent infringement suit with between $1 million and $25 million at stake costs $1.794 million to litigate through the end of discovery." Intamin, Ltd. v. Magnetar Technologies Corp., Case No. CV 04-0511 GAF (JWJx) (USDC, CA) (unpublished Order Re: Magnetar's Application for Reasonable Attorneys' Fees and Costs filed 12/28/2009).

     In patent infringement cases, 35 U.S.C. § 285 provides for the possibility of fee shifting when the Court finds "exceptional" circumstances. In Intamin, Ltd. v. Magnetar Technologies Corp., Judge Gary Feess, United States District Court Judge for the Central District of California, granted summary judgment in favor of Magnetar, the alleged patent infringer. The grant of summary judgment was in part the result of a finding that there was no infringement, and in part "an acknowledgment of Magnetar's 'unclean hands' affirmative defense." Finding that Intamin's actions and omissions were "exceptional", the Court awarded attorneys' fees under § 285.

     The opinion provides a nice summary of how to apply § 285 to determine reasonable attorney's fees and expenses. The Court reviewed survey data on hourly rates, the reasonableness of hours billed, and the application of the guideline factors cited in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67 (9^th Cir. 1975). The Court awarded nearly the full amounts requested, except for prejudgment interest. While finding misconduct in the case, the Court did not believe that it was "highly egregious conduct" that would support an award of prejudgment interest in addition to what it awarded as fees and costs.

     The Court gave a nod to the experience and "high reputation" of Magnetar's patent counsel, Knobbe Martens. The Court's task was undoubtedly simplified by the fact that Intamin never submitted any opposition to the motion for attorney's fees.

     Marc knows Magnetar's counsel John B. Sganga, Jr., and one of the declarants in the case, Ed Pribonic, and sends them his regards and best wishes for 2010. For them, not a bad start to the New Year.

Insurance Special Fee-Shifting Statute: Consumer Interest Intervener Entitled To Fee Compensation For Upholding Amended Regulations Under Insurance Code Section 1861.10(b)

$121,848.16 Compensation Award to Intervener Upheld on Appeal.

     In a very scholarly opinion, Presiding Justice Mallano—on behalf of a 3-0 panel—upheld a $121,848.16 compensation award (including attorney's fees) to a consumer interest intervener in an unsuccessful challenge to certain amended regulations made by insurance companies. The basis for the award was Insurance Code section 1861.10(b), with the appellate court determining that the insurance companies' petition for a peremptory writ of mandate—seeking judicial review of the amended regulations—was a qualifying proceeding for compensation under section 1861.10(b). The case is Association of California Ins. Cos. v. Poizner, Case No. B208402 (2d Dist., Div. 1 Dec. 30, 2009) (certified for publication).

Mike And Marc’s Top Twenty Decisions For 2009

Part 2 of 2: Second Ten Grouping—Nos. 1-10.

     We already gave you our top 11-20 decisions previously this month.

     As noted in an earlier post, we have accumulated our “top 20” attorney’s fees decisions, recognizing that we limit the list to published decisions and that the order reflects nothing about the importance of the decision. Rather, we try to survey decisions of interest in different areas of the substantive law based on all the decisions we have examined during 2009.

     Without further ado, here we go for nos. 1-10. Happy New Year. 

10. Christensen v. Stevedoring Services of America, 557 F.3d 1049 (9^th Cir. Mar.

2, 2009) and Van Skike v. Director, Office of Workers’ Compensation

Programs, 557 F.3d 1041 (9^th Cir. Mar. 2, 2009)

Author: Chief U.S. Dist. Judge Roll, By Designation

     Longshore and Harbor Workers’ Compensation Act attorneys entitled to higher attorney’s fees under broader “prevailing market” test in venue fora rather than just having fees keyed to LHWCA past awards (which have been generally lower in amount).

(See our March 5, 2009 post on this decision.)

9. Peak-Las Positas Partners v. Bollag, 172 Cal.App.4^th 101 (2d Dist., Div. 6

Mar. 16, 2009)

Author: Presiding Justice Gilbert

     Aggressive/tenacious litigation posturing is a factor to be weighed when awarding fees under Civil Code section 1717.

(See our March 16, 2009 post on this decision.)

8. Silver Creek, LLC v. Blackrock Realty Advisors, Inc., 173 Cal.App.4^th 1533

(4^th Dist., Div. 1 May 20, 2009)

Author: Justice McIntyre

     Scoreboard “tie” approach to deciding Civil Code section 1717 “prevailing party” status rejected, with courts needing to determine if either side won their true litigation objectives for purposes of determining which party prevailed.

(See our May 21, 2009 post on this decision.)

7. Hyde v. Midland Credit Mgt., Inc., 567 F.3d 1137 (9^th Cir. June 9, 2009)

Author: Circuit Judge Fletcher

     Attorney’s fees for “bad faith” actions cannot be assessed against plaintiff’s attorneys in Fair Debt Collection Practices Act cases.

(See our June 10, 2009 post on this decision.)

6. Wood v. Santa Monica Escrow Co., 176 Cal.App.4^th 802 (2d Dist., Div. 6

Aug. 13, 2009)

Author: Presiding Justice Gilbert

     Civil Code section 1717 attorney’s fees are only awardable to the overall winner in the litigation, not just the winner of a discrete attorney’s fees proceeding in the case.

(See our August 14, 2009 post on this decision.)

5. Barrientos v. 1801-182 Morton LLC, 583 F.3d 1197 (9^th Cir. Oct. 9, 2009)

Author: Circuit Judge Wardlaw

     Party winning a preemption issue is entitled to fee award under California Civil Code section 1717.

(See our October 10, 2009 post on this decision.)

4. One Star, Inc. v. Staar Surgical Co., 2009 WL 4193643 (2d Dist., Div. 4

Nov. 30, 2009)

Author: Justice Suzukawa

     Revocation of second Code of Civil Procedure section 998 offer means that the first, nonwithdrawn 998 offer is the measuring stick for an award of costs and fees to prevailing party vis-à-vis the ultimate judgment.

(See our December 1, 2009 post on this decision.)

3. Flir Systems, Inc. v. Parrish, 174 Cal.App.4^th 1270 (2d Dist., Div. 6

June 15, 2009)

Author: Justice Yegan

     Fees and costs can be awarded to a prevailing party in a bad faith trade secret misappropriation case even though the losing party won an earlier denial of a summary judgment motion.

(See our June 16, 2009 post on this decision.)

2. Gilman v. Dalby, 176 Cal.App.4^th 606 (3d Dist. Aug. 10, 2009)

Author: Justice Scotland

     Attorney’s liens in personal injury actions have priority over previously-filed medical liens even where plaintiff’s attorney had awareness of the prior medical lien.

(See our August 13, 2009 post on this decision.)

1. Schatz v. Allen Matkins Leck Gamble & Mallory LLP, 45 Cal.4^th 557 (Cal.

Supreme Ct. Jan. 26, 2009)

Author: Justice Moreno

     Predispute provision in attorney retainer agreement, which specifies binding arbitration for fee/costs disputes, is enforceable after Mandatory Fee Arbitration Act (MFAA) requirements are exhausted.

(See our January 26, 2009 post on this decision.)

     BLOG UNDERVIEW—We used “fora” rather than “forums.” There is a big controversy on which word to use, so we simply go with our gut—even though some Internet commentators prefer use of the word “forums.” Guess we better don our togas!

Marc And Mike’s Top Twenty Decisions For 2009

Part 1 of 2: First Ten Grouping—Nos. 11-20.

     As noted in an earlier post, we have accumulated our “top 20” attorney’s fees decisions, recognizing that we limit the list to published decisions and that the order reflects nothing about the importance of the decision. Rather, we try to survey decisions of interest in different areas of the substantive law based on all the decisions we have examined during 2009. Without further ado, here we go.

     YEARLY ROUNDUP

20. Crawford v. Astrue, 2009 WL 3617989 (9^th Cir. Nov. 4, 2009) (en banc)

Majority Author: Circuit Judge Fletcher; Concurring/Dissenting Author:

Circuit Judge Clifton; Dissenting Author: Circuit Judge Ben

     Attorneys representing Social Security disability insurance claimants are presumptively entitled to fee awards under their contingency arrangements; majority reversed magistrate reductions of awards to only 6.68-11.61% of past-due benefits award.

(See our November 5, 2009 post on this decision.)

19. Krug v. Maschmeier, 172 Cal.App.4^th 796 (lst Dist., Div. 4 Mar. 25, 2009)

Author: Presiding Justice Ruvolo

     Prevailing defendants in civil harassment actions can recover discretionary attorney’s fees even if the underlying action was not frivolous or was not brought in bad faith.

(See our March 25, 2009 post on this decision.)

18. Garcia v. Santana, 174 Cal.App.4^th 464 (2d Dist., Div. 7 May 28, 2009)

Majority Author: Justice Zelon; Concurring Author: Justice Woods;

Dissenting Author: Justice Jackson

     Financial condition of indigent litigant is a factor to consider in assessing fees to a prevailing party in a Davis-Stirling Act action.

(See our May 28, 2009 post on this decision.)

17. In re SNTL Corp., 571 F.3d 826 (9^th Cir. June 23, 2009)

Per Curiam Opinion

     Unsecured creditor’s request for postpetition-incurred contractual/statutory fees, arising from prepetition claim, is allowable.

(See our June 23, 2009 post on this decision.)

16. Biltmore Associates, LLC v. Twin City Fire Ins. Co., 572 F.3d 663 (9^th Cir.

July 10, 2009)

Author: Justice Kleinfield

     Attorney’s fees, if other than sanctions or if not awarded for trustee wrongdoing, can only be awarded against trustee in a representative capacity.

(See our July 10, 2009 post on this decision.)

15. Center For Biological Diversity v. Marina Point Development Co., 566 F.3d

794 (9^th Cir. May 14, 2009) (second amendment)

Majority Author: Circuit Judge Fernandez; Concurring Author: Circuit

Judge Rymer; Dissenting Author: Justice Kleinfield

     Attorney’s fees were properly awarded under the Endangered Species Act even though underlying controversy was moot; court will not review the merits determination, if moot, for purposes of testing the fees award; concurring opinion suggests that the U.S. Supreme Court may want to review the issue.

(See our March 28, 2009 post on this decision.)

14. Alan T.S., Jr. v. Superior Court, 172 Cal.App.4^th 238 (4^th Dist., Div. 3 Mar.

18, 2009)

Author: Presiding Justice Sills

     Interesting discussion of problems that plague the family law court system, made in the course of reversing awards for failure to consider the relevant “need” factors under Family Code sections 2030 and 2032.

(See our March 21, 2009 post on this decision.)

13. Ramon v. County of Santa Clara, 173 Cal.App.4^th 915 (6^th Dist. May 4, 2009)

Author: Acting Presiding Justice Mihara

     Plaintiff’s amicus curiae work in related action was proper basis for additional fee award under California Code of Civil Procedure section 1021.5 (the private attorney general statute).

(See our May 4, 2009 post on this decision.)

12. Law Offices of Andrew L. Ellis v. Yang, 178 Cal.App.4^th 869 (2d Dist., Div. 3

Oct. 27, 2009)

Author: Justice Aldrich

     Trial courts have discretion to award or deny anti-SLAPP attorney’s fees to defendants in cases where plaintiffs dismiss their actions without prejudice.

(See our October 28, 2009 post on this decision.)

11. Galleria Plus, Inc. v. Hanmi Bank, 2009 WL 3859491 (2d Dist., Div. 4

Nov. 19, 2009)

Author: Presiding Justice Epstein

     Code of Civil Procedure section 128.7 sanctions cannot be granted unless a prior, unfiled “safe harbor” motion has set a definitive hearing date in the motion sent to the opponent.

(See our November 20, 2009 post on this decision.)

Our next top 10 will follow shortly before the New Year. Happy Holidays to everyone.

EAJA: Ninth Circuit Reverses Fee Award Because Various Federal Court Actions Were Not Equivalent To Judicially Sanctioned Relief

Temporary Stay, Magistrate Tentative Summary Judgment Ruling, and Dismissal Based on Ripeness/Mootness Did Not Justify Fee Award.

     The prevailing party in a dispute governed by the Equal Access to Justice Act (EAJA), 28 U.S.C. sec. 2412, is entitled to an award of attorney’s fees if the party achieved “a material alteration in the legal relationship of the parties that is judicially sanctioned.” This provision was front and center in a recent Ninth Circuit case, reversing an award of EAJA fees to environmental organizations, in Klamath Siskiyou Wildlands Ctr. v. Bureau of Land Mgt., Case No. 98-35463 (9^th Cir. Dec. 15, 2009) (for publication).

     The real issue in this case was whether environmental organizations were EAJA prevailing parties when, before judgment, BLM withdrew its challenge to a timber sale. The district court awarded plaintiffs fees, but the Ninth Circuit reversed—so that the answer to the question was “no” under the particular circumstances at issue.

     “All together, [the] case law establishes that the sine qua non of prevailing party status is an enforceable, judicially sanctioned award of much of the relief the plaintiff sought.” (Slip Opn., p. 16553.) Based on this precept, the Ninth Circuit found that none of the following developments in the litigation qualified as judicially sanctioned relief:

• A stipulated order temporarily staying a timber sale (this was not equivalent to a preliminary injunction under the specific facts);
• A magistrate judge’s findings and recommendations in favor of plaintiffs on summary judgment motions, which were never adopted by the district court with any finality;
• A district judge’s dismissal based only on ripeness/mootness grounds (which demonstrated no judicial relief should be granted); and
• The ruling of the Ninth Circuit in the separate case of Klamath Siskiyou Wildlands Ctr. v. Boody, 468 F.3d 549 (9^th Cir. 2006), because it did not constitute direct judicially sanctioned relief in the pertinent, pending action—even if the earlier actions caused a capitulation in favor of plaintiffs.

     BLOG UNDERVIEW—This case has an interesting discussion of how to treat badly splintered decisions from the U.S. Supreme Court from a precedential standpoint.

Public Construction Prompt Payment Statutes: Winning Contractor, Surety, And Bonding Company Entitled To $150,000 In Fees After Prevailing Against Losing Subcontractor

Third District’s Affirmance of Prompt Payment Statute Result Ices Correctness of Fee Award.

     In one of our past posts (see January 16, 2009 discussion of the unpublished decision of Li v. Wu), we briefly discussed one of the construction prompt payment statutes. The Legislature has enacted several “prompt payment” statutes designed to make sure that payments (retention, progress, or otherwise) are promptly paid by owner, contractor or subcontractors to other construction professionals.

     Public Contract Code section 7107, one of these statutes, was at play in Martin Bros. Constr., Inc. v. Thompson Pacific Constr., Inc., Case No. C058944 (3d Dist. Dec. 4, 2009) (certified for publication).

     Section 7107(d) mandates that a general contractor must pay subcontractors within 7 days after contractor receives construction work proceeds from the public entity owner. The prevailing party in a prompt payment dispute under this provision is entitled to an award of attorney’s fees and costs. (Pub. Contract Code, sec. 7107(f).)

     Here, the trial court concluded that defendants (a contractor, its surety, and its bonding company) did not violate the prompt payment statute, awarding them $150,000 in fees. That merits determination was affirmed on appeal, which means the fee award stood also.

Res Judicata: Trial Court Awarding Fees To Director Under Corporate Indemnification Statute Reversed On Res Judicata Grounds

Prior Adjudication Precluded the Subsequent Award.

     In South Bay Rod and Gun Club v. Dashiell, Case No. D053658 (4^th Dist., Div. 1 Dec. 4, 2009) (unpublished), director/real estate broker won a lawsuit against non-profit Club over a real estate option transaction. Winning director then sought fees in connection with his slander of title claim (Civil Code section 880.36) or under corporate indemnification statutes (certain Corporations Code sections). The court found no entitlement to fees and entered judgment, which was appealed by Club(but with no cross-appeal filed by director). Eventually, director filed a new motion for fees that was stayed while the Club’s appeal was decided—with Club losing its appeal. Director then brought his amended motion, seeking attorney’ fees under Corporations Code sections 317, 5047.5, 5238, and 7237. This time around, the lower court found that director was entitled to be indemnified for fees under the relevant Corporations Code provisions. Club then appealed.

     Anyone want to guess what happened?

Civil Rights: ADA Total Fee Recovery Denial Reversed Where Trial Court Incorrectly Concluded That Plaintiff’s Fee-Driven Recovery Required Altogether Fee Denial

Fourth District, Division 3 Reverses and Remands, But Does Allow Consideration of How Fee-Driven Motivation Impacts Reasonableness of Fee Request.

     In the civil rights area, the American Disabilities Act (ADA) does have a mandatory fee-shifting provision in favor of prevailing plaintiffs, although it has the important caveat that only reasonable fees should be awarded. In the next case, the trial court denied fees altogether because it felt that the whole suit was motivated by fees rather than to really remediate a handicap parking violation. That altogether fee denial was reversed, although the motivation factor was not excised as a consideration on the reasonableness of plaintiff’s fee request.

     Plaintiff, a disabled, wheelchair-bound individual, sued because a restaurant was apparently one space short of complying with ADA handicap space requirements. Plaintiff won a summary judgment for compliance and $1,000. Plaintiff then sought attorney’s and expert fees of a little under $22,000, with the defendant only arguing as to the reasonableness of the fees request. However, the trial court did go farther, denying fees altogether based on the ambiguity of the compliance order and mainly on its perception that the sole purpose of the action was to “generate fees.”

     The Fourth District, Division 3, in a 3-0 panel decision authored by Presiding Justice Sills, reversed in Miller v. Neal, Case No. G041424 (4^th Dist., Div. 3 Oct. 29, 2009) (unpublished).

     Reason for the reversal? The appellate court could find no authority indicating that fees should be denied across the board simply based on the motivation of plaintiff or plaintiff’s counsel in bringing the suit. The panel remanded the case for reconsideration of the fee requests, although it did not prevent the lower court from considering (one way or the other) the motivation factor in the calculus of determining the reasonableness of the requested fees.

Special Fee Shifting Statute: Plaintiff Hit With Attorney’s Fees Under The State Public Safety Officers Procedural Act

Inoperability of CCP Section 128.6 Does Not Impact Defendants’ Ability to Award Fee Recovery Under POBR’s Fee-Shifting Provision.

     California’s Public Safety Officers Procedural Bill of Rights (POBR) (Gov. Code sec. 3300 et seq.), which has certain safeguards for police persons, does provide for an award of attorney’s fees against a party who brings a bad faith or frivolous action under the guidelines set forth in CCP section 128.6. (See Gov. Code sec. 3309.5(d)(2).) The next case deals with a fee award under section 3309.5(d)(2).

     Lancaster v. County of Yolo, Case No. C058651 (3d Dist. Oct. 29, 2009) (unpublished) deals with a situation where a former deputy sheriff’s case brought under POBR was dismissed upon demurrer, with the trial court awarding defendants fees and costs of $34,487.50 as against plaintiff and her attorneys under POBR’s fee-shifting provision.

     Both sides appealed the fee award, but it was affirmed.

     Plaintiff argued that the fee order was effectively void because CCP section 128.6 was inoperative. The Court of Appeal rejected this argument, observing that the POBR fee-shifting provision still allowed the lower court to use the procedure and substantive standards outlined in an inoperative provision, such that section128.6’s inoperability was inconsequential.

     One of plaintiff’s attorneys complained that the fee motion was improperly noticed as to him, because it was only addressed against “plaintiff and her attorney.” This attorney argued he was but one of the attorneys so that the notice was not specific enough. Wrong. The supporting brief to the fee motion did refer to the specific attorney and mentioned his experience as a factor favoring a fee award against this particular attorney as well. In a word, he was on notice.

Costs And Fees: Defendants “Unified In Interest” Liable For Routine Costs And Are Denied Substantial Attorney’s Fees Because Allocation Was Proper

Second District, Division 3 Address Many, Many Procedural Issues in Unpublished Opinion.

     In Matusek v. Benn, Case No. B206776 (2d Dist., Div. 3 Oct. 29, 2009) (unpublished), two sets of defendants (the Murad and Benn defendants, each set composed of businesses and their principals) contracted to create an infomercial using an appearance by plaintiff Matusek. Matusek sued for breach of contract, fraud and misappropriation of likeness under Civil Code section 3344, while defendants cross-complained on various counts. The jury awarded plaintiff compensatory and punitive damages against three of the four defendants, although the trial court nonsuited the 3344 claim. The lower court granted some JNOV and new trial motions by which the verdicts were substantially reduced or eliminated as to the three remaining defendants (including Mr. Murad personally). Plaintiff appealed to the Second District, which undid some of the postjudgment rulings and awarded costs to plaintiff. Eventually, the lower court entered a post-appeal judgment, finding that plaintiff was the prevailing party for cost purposes against all defendants because they had unified interests (even though Mr. Benn was exonerated completely). The trial court awarded costs of appeal to plaintiff of $5,778.09 against all defendants, and three defendants prevailing on the 3344 count recovered combined, apportioned attorney’s fees of about $13,500 for nonsuiting the 3344 claim. The Benn defendants appealed, and Matusek moved to dismiss the appeal by the Benn corporate defendant.

     With this convoluted procedural history in mind (which we have truncated tremendously), the Second District, Division 3 addressed many gnarly procedural issues that do sometimes pop up for consideration.

EAJA Federal Circuit Court Split: U.S. Supreme Court To Hear Case On Whether Social Security Disability Fee Awards Are Payable To Client Or Client’s Attorney

High Court To Resolve Split Among Federal Courts of Appeals.

     In our September 12, 2009 post on Stephens v. Astrue, 565 F.3d 131 (4^th Cir. 2009), the case involved a split among the federal circuit courts on whether Social Security disability fee awards go to the claimants or their attorneys. This is not an insignificant issue, because the Government takes the view that if the award goes to the claimant that means it is subject to offset for pre-existing debts owed by claimant to governmental entities (such as child support or delinquent taxes). This could mean claimant’s attorney recovers no fees for winning disability benefits for the client. We predicted in our post that this case would need to be resolved at some point.

     Well, it obviously was—in the near future!

     On September 30, 2009, the U.S. Supreme Court granted certiorari in Ratliff v. Astrue, an Eighth Circuit case addressing this very issue. The Supreme Court case is Astrue v. Ratliff, assigned case no. 08-1322.

Special Fee Shifting Statute and Fee Clause Interpretation: Singapore Law Governs Non-Statutory Issues

 

Ninth Circuit Reverses Denial of Fees Award, Remanding for A New Look in COGSA, Bill of Lading Case.

     So what happens when you have a seemingly statutory choice-of-law clause (that means no attorney’s fees) and a contractual clause (that may mean attorney’s fees) in the same case? Well, if you are the litigant arguing for a fee award—argue that the contractual clause governs. That is what the litigant argued in the next case did and—wonders of wonders—it obtained a reversal of a fee denial on appeal.

     The case is APL Co. Pte. Ltd. v. UK Aerosols Ltd., Case No. 07-16739 (9^th Cir. Sept. 21, 2009) (for publication), which involved a bill of lading governed by Singapore law and the operation of the Carriage of Goods by Sea Act (COGSA). The district judge essentially held that COGSA was the governing choice-of-law provision in a bill of lading that “preempted” a fees clause applying Singapore law (which adopted the English Rule that the prevailing party wins). Federal law generally does not permit the prevailing party in an admiralty case to recovery attorney’s fees. (B.P.N. Am. Trading, Inc. v. Vessel Panamax Nova, 784 F.2d 975, 977 (9^th Cir. 1986).) However, notwithstanding this rule, admiralty courts will generally give effect to a contractual agreement that holds otherwise. (Chan v. Soc’y Expeditions, Inc., 123 F.3d 1287, 1297-97 (9^th Cir. 1997).) Because the contractual bill of lading clause specified Singapore law (winner obtains fees) and Singapore law was the proper choice of law over COGSA, the matter had to be reversed and remanded for a calculation of fees due to the prevailing party.

Special Fee Shifting Statute: Split Among Federal Circuit Courts On Whether EAJA Fee Awards Are Payable To Claimant Rather Than Attorney, Allowing Offsets By Government Entities

Fourth Circuit Concludes Fees Are Payable to Claimant.

     Here is an interesting issue that has drawn a split among federal courts of appeals: whether attorney’s fees payable under the Equal Access to Justice Act, 28 U.S.C. section 2812 (EAJA), in Social Security Act benefit cases go to the claimant or the attorney. The importance of the answer to this issue may have a wide-ranging impact on the claimant--if the fees go to the claimant, the government can take the position they are subject to administrative offset for the collection of other debts (such as child support or state income taxes). See 31 U.S.C. section 3716.

     The Fourth Circuit, in Stephens v. Astrue, 565 F.3d 131 (4^th Cir. 2009), decided that the plain meaning of section 2412(d)(1)(A) of the EAJA shows that fees go to the “prevailing party,” namely the claimant. It observed that, in other areas, Congress has directed payments of fee awards to attorneys, when this result was desired. (See SSA section 206(b).) A contrary award to an attorney by a magistrate judge was vacated.

     Stephens is in conflict with decisions to the contrary in the Sixth, Eighth, and Eleventh Circuits, which hold that attorney’s fees are payable directly to the attorney.

     This issue appears one that may be reviewed and resolved by the U.S. Supreme Court at some point in time, given that the result in Stephens might provide a disincentive for attorneys to take on SSA benefit cases if fees go to the claimant and could be offset by other debts in entirety.

Federal Question Cases: Local Rules On Diversity Cases Cannot Dictate Fee Award

Ninth Circuit So Holds in Alaska Case.

     Although we generally limit ourselves to California cases, we do a short report on Disability Law Center of Alaska, Inc. v. Anchorage School Dist., Case No. 08-35057 (9^th Cir. Sept. 9, 2009) (for publication) because of its potential importance in future California cases.

     There, plaintiff—an Alaskan designated agency for the disabled individuals—sought to enjoin a school district about contact information for students’ guardians or legal representatives. The injunctive request was firmly based in federal statutes. Plaintiff lost, with the district court awarding attorney’s fees to the school district based on an Alaskan civil procedure rule.

     Plaintiff appealed the fee award—and won.

     Federal law governs a pure federal question case. Because no state law issue was raised, it was error to award fees based on a rule that applied to diversity cases or federal question cases with supplemental jurisdiction over state-law claims.

COPYRIGHT: Ninth Circuit Affirms $338,493.97 In Attorney's Fees Awarded To Copyright Plaintiff Obtaining But $34,875.97 In Compensatory Damages

Dissenting Circuit Judge Intimates No Fees Were Deserved Based on Scathing Comments of District Judge.

     Just to show you how attorney's fees make the world go round and affirm our Mission Statement that they are often a controversial (and determinative) factor in commercial litigation, we have decided to do a quick synopsis of an interesting federal copyright case. To say the least, plaintiffs prevailed (but not that much), asked for a lot of fees, received about 45% of what they asked for, and barely sustained the result on appeal—with a dissenting Ninth Circuit Judge suggesting that nothing should have been awarded in the fee award category. So, here we go with Milton H. Greene Archives, Inc. v. Julien's Auction House, LLC, Case No. CV 05-7686 AHM (FMOx) (C.D.Cal.) (12/20/07 fees decision), aff'd, Case No. 07-55614 (9^th Cir. Sept. 1, 2009) (unpublished).   

     In Greene Archives, plaintiff Milton H. Greene Archives, Inc.sued for federal copyright infringement, but only recovered $34,875.97 against defendant Julien's Auction House (even though suing another defendant Barclay Butera, Inc, seeking $2.9 million from both defendants). Because there is a fee-shifting statute under the federal copyright scheme, plaintiff sought to initially recover $611,597.33 from both defendants. The district judge directed plaintiff to recalculate that amount, because Barclay prevailed such that work allotted to that defendant had to be excluded. (As an aside, the district judge ultimately did award fees to Barclay as a prevailing party.) Plaintiff responded by increasing its fee request against Julien's to $752,208.83, an additional $140,611.50 from the previous request which needed discounting. In the end, the district judge, after applying the factors in Wall Data, Inc. v. Los Angeles County Sheriff's Dept., 447 F.3d 769, 787 (9^th Cir. 2006), only awarded 45% of the total request, or $338,493.97. The district judge did so in a written order that was far from complimentary of plaintiff's counsel, making such observations and findings as "flagrant greed," "systematically engag[ing] in conduct that caused the case to be blown out of proportion," "embarrassing sloppiness," "miscit[ing] the law," and incorrectly characterizing the district court's own order. He even noted that "[t]he outcome of this case and of the trial was a bust."

                  [Still from Erich von Stroheim's Greed, circa 1924]

     Although both sides appealed, the Ninth Circuit affirmed across the board. However, there was a split opinion on the award of fees to plaintiff and against Julien's.

     The majority acknowledged that plaintiff's limited success in receiving essentially nominal damages would have supported an award of no fees (or significantly lower fees). They also indicated that a fee award ten times more than the amount of the compensatory damage could seem "unreasonable under the circumstances." However, the majority affirmed based on the abuse of discretion standard, especially given the district judge's birds' eye view of the litigation and consideration of the correct factors under Wall Data.

     Circuit Judge Wardlaw dissented on the fee award. She found that plaintiff only "won" a judgment amounting to approximately 1% of his damage request (described by the district judge as "a bust") and that the award of almost $340,000 was inexplicable based on the totality of feedback about the performance of counsel in the district judge's order. "Under these circumstances, the attorneys should have received nothing at all, and certainly not an amount in fees that was worth ten times their client's recovery."

     BLOG UNDERVIEW—Quite a case. We note that Benjamin G. Shatz, who specializes in appellate law and is with Manatt, Phelps & Phillips, LLP, was one of the counsel representing Julien's (and almost got a fee reversal). We thank him for sending us District Judge Matz's fee decision and the subsequent unpublished Ninth Circuit opinion in Greene Archives.

California Public Records Act: Court Of Appeal Affirms Denial Of Fees To CPRA Petitioner

Causation Issue Is Decided Under Substantial Evidence Review Standard.

     The next case involves a dispute under the California Public Records Act (CPRA), which does allow recovery of fees by a "prevailing" plaintiff. (Gov't Code, § 6259(d).) The next case, where a CPRA petitioner was denied fees, demonstrates two things: (1) how government entities should act and "paper" activities in order to avoid a fee award; and (2) how the appellate standard of review can steer the outcome of an appeal.

     In Jentz v. City of Chula Vista, Case No. D053525 (4^th Dist., Div. 1 Aug. 31, 2009) (unpublished), two petitioners and City of Chula Vista were involved in CPRA disputes involving the Urban Core Specific Plan for the downtown Chula Vista area. Although City did produce documents to petitioners after petitioners filed a CPRA action to obtain the documents, the trial court refused to award fees to petitioners under section 6259(d), determining that petitioners did not "prevail" because nothing demonstrated City would not have produced the documents anyway (a causation element—showing the CPRA action was the motivation for the document production).

     The Court of Appeal affirmed the fee denial.

     The definition of "prevailing party" under the CPRA is a pragmatic one. The focal concern is whether the CPRA motivated a defendant to produce the documents. (Galbiso v. Orosi Public Utility Dist., 167 Cal.App.4^th 1063, 1085 (2008).) Importantly, however, this determination is a factual one reviewed under the deferential substantial evidence standard on appeal. (Ibid.) Because many factors must be considered on this causation issue, the appellate court deferred to the trial court's conclusion that City did not decide to produce based on the instigation of the CPRA action.

     For city attorneys, this case is great reading to show the type of detailed declarations from counsel that might lead a trial court to conclude the CPRA action was not spurring the City's production of documents or its amenability to produce further documents. Rather, here are the factors that led to affirmance by the appellate court in Jentz—ones that can be utilized successfully by city lawyers in the future: (1) documents were produced to petitioners shortly after the action was filed; (2) petitioners had failed to provide clarification in response to the City's written requests to clear up ambiguities; (3) City did a "rolling" production of documents in batches as they were located (or after they were screened for privileged documents); (4) petitioners' requests involved a detailed search and time-consuming examination of documents that had to be culled out on the basis of certain privileges; (5) City produced a privilege log; (6) City demonstrated that the production was slowed by unavoidable administrative difficulties; and (7) the City's attorneys kept in regular contract with petitioners' counsel regarding the timing and logistics of document production.

Hate Crime Statutes: Arbitration Expense and Fee Award Reversed And Remanded Because Armendariz Prohibition on Expenses Applies To Statutory Hate Crime Claims

Second District, Division One, Does Remand For Proper Expense/Fee Determination and For Examination of Allocation Issues.

     Armendariz v. Foundation Health Psychcare, 24 Cal.4^th 83, 110-113 (2000) determined that arbitral expenses beyond what a plaintiff litigant would have borne in a court case cannot be imposed in cases involving statutory rights enacted for a public reason. (In Armendariz, the claims were brought under FEHA; other cases have extended Armendariz to wrongful employment termination claims (if based on violation of public policy), California consumer vehicle leasing statutes, franchise investment statutes, the trade secret statute, and California’s unfair competition statute.)

     Recently, the Second District, Division One confronted the issue of whether the Armendariz prohibitions applies to civil claims brought under California’s hate crime statutes, namely, the Ralph Civil Rights Act (Civil Code sections 51.7 and 52.1) and the Tom Bane Civil Rights Act (Civil Code section 52.1). By a 2-1 panel vote, it decided that Armendariz did apply.

     In brief, D.C. v. Harvard-Westlake School, Case No. B204634 (2d Dist., Div. 1 Aug. 14, 2009) (certified for publication) involved a hate crimes case (involving both statutory and common law tort violations) that was ordered to arbitration based on an enrollment agreement between student and school mandating arbitration. A student sued Harvard-Westlake School alleging it was liable under the state’s hate crimes laws for death threats he received from classmates who misperceived his sexual orientation. The enrollment agreement specified JAMS arbitration and provided that the prevailing party was entitled to recover all reasonable attorney’s fees incurred in any arbitration or litigation. The matter was ordered to arbitration, where school prevailed on all claims and was awarded all requested fees and costs in the hefty sum of $521,227.68 by the arbitrator ($12,492.15 of which was arbitration fees and costs). The trial court confirmed the claims were arbitrable but did not rule on the propriety of arbitral expense/attorney’s fees award.

     Student appealed, and won a reversal in a 2-1 opinion authored by Presiding Justice Mallano.

Elder Abuse: Senate Bill 1140, Effective January 1, 2009, Strengthens Elder Abuse Protections And Has Fee-Shifting Impetus

Effect of New Law Explored in Steven Riess’ Article in August 2009 California Lawyer.

     For those attorney readers practicing in the elder abuse area, there is an excellent article that is must reading in the August 2009 edition of California Lawyer. It is authored by Steven Riess and is entitled “Combating Financial Abuse of Elders.”

     This article explores the expansion of protections in the elder abuse areas that occurred with the January 1, 2009 effectiveness of Senate Bill 1140, which amended various parts of the Welfare and Institutions Code. Mr. Riess explores the impact of these amendments in detail.

     Among other things, Senate Bill 1140 now authorizes the recovery of attorney’s fees and costs to prevailing plaintiffs in elder abuse “undue influence” and abusive sale practice cases. (See, e.g., Welf. & Inst. Code sections 15657.5(a) and 15657.6.)

     Mr. Riess is a San Francisco attorney who participated in the drafting of Senate Bill 1140.

Special Fee Shifting Statute: Stung by District Court's Denial of Fees, Appellant Gets Some Relief from Ninth Circuit in Mosquito Spraying Case

 

Ninth Circuit Explains Standards for Collecting Fees under Clean Water Act.

     The next case involves alphabet soup:  GCMAD, NPDES, EPA, CWA, and the spraying of adulticides.  Translation:  Gem County Mosquito Abatement District, National Pollutant Discharge Elimination System, Environmental Protection Agency, Clean Water Act, and the spraying of pesticides used to kill adult mosquitoes. St. John's Organic Farm, et al. v. Gem County Mosquito Abatement District, et al., Case No. 07-35797 (9th Cir., filed July 16, amended Aug. 3, 2009) (for publication).

     Plaintiffs Saint John’s Organic Farm and Peter Dill sued under the citizen-suit provisions of the Clean Water Act, 33 U.S.C. § 1365, against GCMAD and Gem County, alleging pesticide discharges into the waters of the United States without an NPDES permit violated the CWA Gem County Mosquito Abatement District and Gem County (collectively, “GCMAD”). Dill alleged that GCMAD’s discharges of pesticides directly into United States waters, without an NPDES permit, violated the CW.   Dill and GCMAD settled the suit. The Settlement Agreement limited GCMAD’s pesticide spraying and provided an application for “costs of litigation (including reasonable attorney and expert witness fees)” under 33 U.S.C. § 1365(d) could be made to the district court.

     The district court denied a request by plaintiffs for fees, holding that they were not prevailing parties, and that fees were not appropriate.  The Court of Appeals, in an opinion authored by Justice William A. Fletcher, with a separate concurrence written by Justice Tallman, reversed and remanded to the district court for a determination of whether fees were appropriate under the standards articulated in the opinion.

     Plaintiffs satisfied the three tests necessary to be declared prevailing parties:  (1) the settlement was judicially enforceable; (2) there was a material alteration of the legal relationship between the parties; and (3) there was actual relief on the merits in favor of plaintiffs.

     The Court of Appeal adopted the “special circumstances” standard elaborated in Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400 (1968), as the proper standard for determining whether an award of attorney’s fees to a prevailing plaintiff is “appropriate” under § 1365(d).   In Piggie Park, the Supreme Court held, “one who succeeds in obtaining an injunction under [Title II] should ordinarily recover an attorney’s fee unless special circumstances would render such an award unjust.”  Now the district court will have to decide whether there are any "special circumstances" that would render  unjust an award to Saint John's Organic Farm and Peter Dill.

     To hear what the Dalai Lama has to say about mosquitoes, just click on the video below..

 

Special-Fee Shifting Statute: $83,545 Attorney's Fees Award Affirmed As Against Losing Employee And In Favor Of Palos Verdes Peninsula Unified School District

Summary Judgment Affirmed, and Fees Properly Awarded For Bringing Torts Claim Without Basis.

     Under Code of Civil Procedure section 1038, when a defendant in a case brought under the Torts Claim Act prevails on summary judgment, the defendant may obtain an award of attorney's fees if the trial court determines the action was not brought in good faith and with reasonable cause.

     That is exactly what happened in Bosetti v. The U.S. Life Ins. Co. in the City of N.Y., Case Nos. B206896/B208835 (2d Dist., Div. 3 July 17, 2009) (certified for publication). PVSD employee lost her disability claim by never opposing a summary judgment by the School District as to why it was named in the suit. The trial court awarded School District $83,545 in fees under section 1038. Employee did not overturn the summary judgment on appeal, such that the fee award was affirmed and the matter remanded so the lower court could consider awarding School District more fees for prevailing on appeal. Ouch! That can be the price of continued war.

Special Fee-Shifting Statute In Taxpayer Dispute: Appellate Court Reverses $220,000 Fee Award In Taxpayer's Favor As Against Franchise Tax Board

First District, Division 4 Determines FTB Was Substantially Justified in Defending Case.

     In a lawsuit against the State of California (including the Franchise Tax Board) for a tax refund, a prevailing taxpayer may be awarded attorney's fees unless the State of California "establishes that its position in the proceeding was substantially justified." (Rev. & Tax. Code, §§ 19717(a), (c)(2)(B)(i).) The next case is one where taxpayer garnered a substantial fees award of $220,000 against the Franchise Tax Board in a vigorously contested case in which there was divergent documentary evidence and oral testimony that needed to be sorted out. On appeal, the First District, Division 4 reversed the fee award in Garcia v. Franchise Tax Board, Case No. A122710 (1^st Dist., Div. 4 July 16, 2009) (unpublished).

     The main reason for the reversal was the appellate panel's belief that the fee award was done "in hindsight" rather than looking at whether FTB's position was tenable at the outset of trial. Under the specific facts, the documentary evidence was subject to conflicting interpretations and the evidence was far from conclusive. Due to these factors, reversal was dictated.

Update on 2008 Blog: Second District, Division 6 Affirms Judgment, Including $319,097.50 Fee Award In Citrus Farmer Litigation

 

Co-contributor Mike Was Co-Trial and Co-Appellate Counsel in Case.

     Co-contributor Mike did not want to do this post; co-contributor Marc told him to do it. Just to show you that Mike is not that cantankerous, Marc won on this one.

     In our May 19, 2008 post, we looked at a special fee-shifting statute that allows a prevailing party in a farming case to obtain attorney’s fees in a trespass case. Mike’s clients did just that, obtaining a jury verdict of $255,598.14 and $319,097.50 in attorney’s fees. The other side appealed. The Court of Appeal has spoken as of yesterday.

     The Second District, Division 6, in a 3-0 opinion authored by Justice Yegan, affirmed in Hobson v. Leavens, Case No. B206403 (2d Dist., Div. 6 July 15, 2009).

                  Charles Laughton in Hobson's Choice.

 

     Mike is not only thrilled for the clients, but had a great experience co-counseling at trial and on appeal with Greg Regier, a shareholder with the Westlake Village office of Jackson, DeMarco, Tidus & Peckenpaugh. He also compliments his opponents’ appellate counsel, Curt Cutting and Mary Christine Sungaila of Horvitz & Levy, who were professional throughout the process. (Mr. Cutting also has a superb blog on punitive damages for all of you who read us bloggers on the Internet.)

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.