Arbitration: Plaintiff Winning Petition To Compel Arbitration Proceeding Cannot Seek Fee Recovery In A Second Lawsuit

Using “Splitting Cause of Action” Principles, Second District, Division Two Rules That Plaintiff Must Seek Fees In the First Lawsuit.

     The next case reminds all litigators that courts dislike duplicative litigation where litigants seek to recoup fees that are more appropriately sought in a prior action.

     That is exactly what happened in Cohen v. DirecTV, Inc., Case No. B204035 (2d Dist., Div. 2 Dec. 1, 2008) (unpublished).

     Earlier, plaintiff filed an earlier class action and beat a motion to compel arbitration in a proceeding that produced a published decision determining that a contractual bar to class actions was unconscionable. (Cohen v. DirecTV, Inc., 142 Cal.App.4^th 1442 (2006).) After losing a class certification motion (a determination pending for review on appeal), plaintiff filed a second lawsuit under California’s Consumer Legal Remedies Act (CLRA) seeking as actual damages his reasonable attorney’s fees incurred in resisting DirecTV’s motion to compel arbitration in the first lawsuit. Plaintiff lost a demurrer without leave to amend, resulting in a dismissal and an appeal of this dismissal to the Second District, Division Two.

     Under the primary right theory, a litigant cannot split a cause of action that should have been properly settled in some prior action. (Grisham v. Philip Morris U.S.A., Inc., 40 Cal.4^th 623, 642 (2007).) These principles led the Court of Appeal to conclude that plaintiff should litigate his fee entitlement in the earlier action, not the second one—especially since the court that handled the litigation is the venue where the fees should be determined. “Filing a new lawsuit created duplicative and entirely unnecessary litigation when the proper procedure is to file a motion for attorney fees in Cohen I,” citing Kim v. Euromotors West/The Auto Gallery, 149 Cal.App.4^th 170, 175 (2007). (Slip Opn., p. 5.) The judgment of dismissal was affirmed.

     BLOG OBSERVATION—This unnecessary roundelay of litigation theme crops up in many areas of the law. For example, the specter of secondary tort litigation of an unnecessary nature is one of the anchors underpinning decisions that give teeth to the absolute litigation privilege of Civil Code section 47.