Private Attorney General: Trial Court’s Calculation Of Benefits To Intervenors’ Retirees Was Overblown Such That The Whitley Financial Benefit/Cost Analysis Required A Remand To Award Section 1021.5 Fees To Intervenors

$588,000 Fee Request Gets A Second Study, Based On Whitley And Other Factors.

           In City of Oakland v. Oakland Police and Fire Retirement System, Case No. A144653 (1^st Dist., Div. 4 Nov. 29, 2018) (published), intervenors sought to recover $588,000 in attorney’s fees under the private attorney general statute (CCP § 1021.5) and the federal civil rights statute (42 U.S.C. § 1988) based on some successes in defending the legitimacy of certain retirement benefits with respect to some public retirees and firefighters. The trial judge denied the fee request altogether, prompting an appeal by intervenors.

            The appellate court reversed and remanded, finding section 1021.5 fee recovery was proper under the circumstances.

            The first flaw was that the trial judge way overexaggerated the financial benefits being defended by intervenors. The lower court estimated they were $13 million (after making deductions from a “top ceiling” $39 million potential benefit estimated number).   However, the appellate court found that they actually were more like $3.5 million in benefits versus the $500,000 in litigation costs which would be incurred. Under Conservatorship of Whitley (2010) 50 Cal.4^th 1206, 1215-1216, 1220-1221 [our Leading Case No. 14], a trial judge can award section 1021.5 even if the expected benefits exceed costs by a substantial margin. Here, the expected value figure looked to be overblown, such that the expenses to be borne as compared to the expected benefits justified fee recovery.

            The second problem was that the lower court refused to consider the financial status of the litigants in determining an award. After analyzing a number of cases, the 1/4 DCA decided that this is a relevant consideration under section 1021.5.

            Although the degree of success can influence both the entitlement to and amount of the award, intervenors were able to halt the Board from demanding repayments of $4.5 million in past benefits by retirees—a strong degree of success and enforcement of pension rights which are of importance. With respect to the significant benefit factor, intervenors protected 590 live pensioners, so that was large enough to warrant section 1021.5 fees. Reversed and remanded.