Private Attorney General: Award Of $387,593 In Attorney Fees And $15,771 In Costs To Plaintiffs Who Dismissed Their Lawsuit Was Proper And Consistent With California Policy Under Catalyst Theory

Plaintiffs Filed A Class-Action Lawsuit After Making Several Pre-Litigation Attempts At Settlement, And Dismissed The Case After Achieving Their Main Litigation Objective.

            Skinner v. Ken’s Foods, Inc., Case No. B299907 (2d. Dist., Div. 6 August 21, 2020) (published) has a nice discussion on the requirements for a Code Civ. Proc. section 1021.5 fee award under a catalyst theory.

            Plaintiffs filed a class action complaint against defendant for CLRA (Consumer Legal Remedies Act), FAL (False Advertising Law), and UCL (Unfair Competition Law) violations – alleging false and misleading labels and advertising based on the front labels of defendant’s salad dressings describing them as being made with “olive oil” when, in reality, the dressings contained mostly vegetable or canola oil and only a miniscule amount of olive oil. 

            Within five days of learning that defendant had permanently changed their labels to eliminate the misleading information, plaintiffs notified defendant that their primary litigation objective – the cessation of the “made with olive oil” claims on the front labels – had been met, and their claims for injunctive relief appeared to be moot.  Plaintiffs offered to settle the case or file a motion for catalyst fees.  Defendant rejected the offer to discuss settlement, so a motion for catalyst fees followed – with the trial court granting $387,593 in attorney fees and $15,771 in costs once plaintiffs dismissed their lawsuit.

            Defendant’s appeal went nowhere.  The 2/6 DCA found the fees/costs award proper and entirely consistent with the public policy of this state.  Plaintiffs met all of the requirements for a fees award under the catalyst theory – with defendant’s actions dragging out the case. 

            First, plaintiffs exceeded the standard requirement that they “reasonably attempt to settle the matter short of litigation,” as set forth in Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4^th 553, 577.  Plaintiffs made a requisite pre-litigation demand, which was denied by defendant.  Plaintiffs then attended a neutral case evaluation conducted by a retired judge who concluded plaintiffs could likely show defendant’s conduct was deceptive under the CLRA, would likely be able to establish liability pursuant to the FAL and UCL, and could likely get the FAL and UCL claims certified as class actions.   When defendant continued to dig its heels into the ground, plaintiffs offered to attend mediation – to which defendant responded that it was “not prepared to make any offer of settlement” and would “vigorously defend [itself] against any and all claims.” 

            Next, plaintiffs’ lawsuit had merit, and defendant executives admitted that plaintiffs’ lawsuit was a motivating factor in defendant’s label change.

            Finally, because plaintiffs achieved their main litigation goal of having defendant change its salad dressing labels, the trial court correctly found them to be the successful party under Code Civ. Proc. section 1021.5.