CALIFORNIA ATTORNEY'S FEES

Special Fee Shifting Statute: Plaintiff Losing A Contested Civil Harassment Restraining Order Proceeding Properly Saddled With $37,139.01 In Attorney’s Fees And Costs

Ability To Pay Was Acknowledged And Was A Minor Consideration.

            Litigants in civil harassment restraining order proceedings need to be aware that there is a discretionary prevailing party fee-shifting statute under Code of Civil Procedure section 527.6(s).   In Nicolino v. Rey, Case No. B307752 (2d Dist., Div. 5 Apr. 27, 2022) (unpublished), plaintiff lost a heavily contested civil harassment restraining order request against defendant, making acerbic remarks before the lower court.  That court awarded defendant $37,139.01 in attorney’s fees and costs as against plaintiff.  Her appeal did not result in any change.  She argued ability to pay (which is a factor) was not considered, but the lower court acknowledged she did have an ability to pay but it was a minor consideration based on the totality of circumstances, a conclusion agreed with by the reviewing court.  She also argued that work relating to a motion to seal records was noncompensable, but it was because the work did occur in the context of the restraining order proceeding.

SLAPP: Although Defendant’s SLAPP Motion Was Frivolous, $5,000 Fee Award Was Reversed As A Matter Of Law Because Plaintiff Law Firm Represented Itself In The SLAPP Proceedings

Self-Represented Attorney Cannot Get Sanctions For Frivolous SLAPP Motion.

            In the SLAPP area, a trial judge can award fees as sanctions against a defendant which files a frivolous SLAPP motion.  That did occur in Stuart Kane LLP v. The Law Offices of J.D. Cuzzolina, Esq., Case No. G060172 (4^th Dist., Div. 3 Apr.27, 2022) (unpublished), with the lower court awarding plaintiff $5,000 in costs and fees as against defendants in the form of sanctions.  (Code Civ. Proc., § 425.16(c)(1).)  The $5,000 sanctions award was reversed as a matter of law because plaintiff law firm represented itself, and a self-represented attorney cannot obtain sanctions under CCP § 128.5 (which is incorporated into the frivolous SLAPP sanctions provision).  (Musaelian v. Adams, 45 Cal.4^th 512, 520 (2009).)

Fee Clause Interpretation, Section 1717: $157,191 Fee And $7,219.60 Costs Award Under A Contractual Fees Clause Affirmed On Appeal

Defendants’ Nonsignatory Status Did Not Change The Result Because Plaintiffs Would Have Been Entitled To Fees Had They Won.

            Based on a broad contractual fees clause in an agreement governing a dispute over the use of large electric sign in the City of Long Beach to advertise car dealerships in the area, defendants obtained a summary judgment against plaintiffs.  The lower court then awarded prevailing party fees and costs to defendants to the tune of $157,191 in fees and $7,219.60 in costs.  The appellate court rejected plaintiffs’ challenges to the fee award in H.T.L. Properties, LLC v. Speck, Case No. B302436 (2d Dist., Div. 2 Apr. 26, 2022) (unpublished).  The principal argument on appeal was that defendants were nonsignatories to the agreement, so no fees were warranted.  Appellants, you are mistaken, said the appellate panel, pointing out that plaintiffs would have been entitled to fees against the nonsignatories such that the reciprocal entitlement ran in favor of the nonsignatories under Civil Code section 1717—citing Brown Bark III, L.P. v. Haver, 219 Cal.App.4^th 809, 819 (2013). 

Family Law, Sanctions: No Abuse Of Discretion In Trial Court’s $37,500 Attorney Fees Award, Which Included A $7,500 Deduction Based On Wife’s Conduct, Against Husband In The Form Of Section 271 Sanctions

Trial Court Had Ensured Against Financial Burden On Husband By Ordering Payment Of The Sanctions Through $200 Monthly Increments, And Its Statement Of Decision Made Clear That The Trial Court Had Considered The Behavior Of Both Parties.

            Family Code section 271(a) – the purpose of which is to promote settlement and encourage cooperation – authorizes a trial court to “base an award of attorney’s fees and costs on the extent to which the conduct of each party or attorney furthers or frustrates the policy of the law to promote settlement of litigation and, where possible, to reduce the cost of litigation by encouraging cooperation between the parties and attorneys.”  These attorneys’ fees and costs are imposed as a sanction under the broad discretion afforded the trial court.

            In Marriage of Bonner, Case No. D078148 (4^th Dist., Div. 1 April 22, 2022) (unpublished), husband appealed the $37,500 attorney fees award issued against him as a § 271 sanction, as well as the trial court’s ruling on his own dueling request for § 271 sanctions against wife. 

            Husband’s attempt to relitigate on appeal the issue of whether his conduct warranted sanctions, his claim that some of the $73,000 in attorney fees wife claimed to have incurred were unnecessary, and his claim that the sanctions order placed an unreasonable financial burden on him all proved unsuccessful.  Determination as to husband’s conduct fell within the trial court’s broad discretion and was not subject to reversal absent a showing that the trial court exceeded the bounds of reason. (In re Marriage of Rosevear, 65 Cal.App.4th 673, 682 (1998).)  Additionally, section 271 does not limit the trial court’s sanctions award by the type of attorney fees incurred by the other party (In re Marriage of Corona, 172 Cal.App.4th 1205, 1226 (2009)), and the trial court awarded wife considerably less than the $73,000 she claimed.  Finally, there was no merit to husband’s financial burden claim as the trial court ensured against such burden by ordering the sanctions to be paid in monthly increments of $250. 

            The trial court declined to issue $12,000 in section 271 sanctions against wife, but, based on wife’s conduct, did reduce by $7,500 the sanctions amount it would have otherwise awarded wife. Husband argued he was entitled to a higher amount, but the trial court’s Statement of Decision made clear that the trial court had considered the behavior of both parties.  Additionally, husband failed to demonstrate the reasonableness of the attorney fees he sought, and was not entitled to costs – such as travel costs – incurred during the litigation for which he was mostly self-represented. A self-represented litigant attorney is not entitled to fees recovery under § 271 because sanctions must be tethered to attorney fees and costs (In re Marriage of Erndt and Terhorst, 59 Cal.App.5th 898, 904 (2021) [discussed in our January 13, 2021 post), and a party’s travel costs are not attorney fees or costs that may be awarded under § 271 (Menezes v. McDaniel, 44 Cal.App.5th 340, 351 (2019) [discussed in our January 16, 2020 post].

            The 4/1 DCA did remand for recalculation, however, as the trial court had reduced the $37,500 sanctions award by $19,016.30 to account for an equalization payment the trial court determined wife owed to husband, but the record did not support the $19,016.30 calculation. 

Estoppel, Fee Clause Interpretation: A Little Over $320,000 Fee Award Gets Reversed As A Matter Of Law Because The Clause Did Not Cover The Scope of the Adjudicated Dispute

Interpretation Of Fee Clause Wording Is A Fertile De Novo Review Issue For Losing Litigants Facing Fee Exposure.

            On appeal, one of the best issues is whether there is fee entitlement. In many disputes, this means does the fee clause cover the dispute which was adjudicated before a court or jury?  If the answer is no, even though a trial judge decides otherwise, an appellate court can reverse the fee award as a matter of law.

            That is what happened in BFCAP Investments, LLC v. Lifehouse Parkview Properties, LLC, Case No. B307388 (2d Dist., Div. 4 Apr. 21, 2022) (unpublished). There, defendant sellers won a summary judgment against plaintiff buyer, with the trial judge awarding a full request of a little over $320,000 in attorney’s fees under a contractual fees clause. (Even then, the trial judge was concerned that the defendants failed to quote the full fees clause so that a proper consideration of the fee award could be made, with the defense apologizing at some stage for this omission.) Nonetheless, the appellate court reversed, deciding that the fees clause only related to disputes over Acquired Assets rather than property post-default issues.  Even though plaintiff had prayed for fees, the reviewing court did not view this as an estoppel because defendants still had to show their own entitlement to fees.

Celebrities: Trump Campaign Ordered To Pay $1.3M Attorney's Fees To Omarosa Manigault Newman

Celebrities Clash Over Attorney's Fees.

        Maggie Haberman of the NYT reported on April 20, 2022, that the campaign organization of celebrity and former president Donald Trump has been ordered to pay celebrity Omarosa Manigault Newman $1.3M in atttorney's fees. The subject of the dispute was apparently an unsuccessful attempt to enforce a nondisclosure agreement against Newman who wrote a book entitled "Unhinged" that embarrassed Trump. 

Partition: Court Of Appeal Affirms A Proportionate Share Of Partition Attorney’s Fees Being Awarded Among Litigants In Partition Action Based On Common Benefit Analysis Under CCP § 874.040

Lin Decision Was Followed, Which Seems To Be The Reasoning Adopted By Most Appellate Courts.

            In Thornber v. Colby, Case No. C089687 (3d Dist. Apr. 20, 2022) (unpublished), a trial judge decided that $60,000 in fees incurred by plaintiffs in a successful partition by sale action should be proportionately allocated between plaintiffs and defendants under Code of Civil Procedure section 874.040, which allows for such an allocation where the litigants’ efforts served a “common benefit.”  The appellate court agreed, determining that the allocation can be based on the parties’ respective interests and equitable interests—citing Lin v. Jeng (2012) 203 Cal.App.4^th 1008, 1025 in support of its conclusion.  Given that defendant raised many meritless arguments along the way, the trial court’s ruling was no abuse of discretion.

            BLOG OBSERVATION—The broader “equitable consideration” test in Lin, as this decision demonstrates, is the majority approach, which is at odds with the Finney opinion.  The Third District lines up with Lin.  For a good post delineating this split in appellate thinking on the issue and the emerging majority view, see our December 9, 2020 post on the unpublished case of Tolley v. Kobzoff. 

Undertaking: Home Foreclosure Preliminary Injunction Can Include Amount Of Attorney’s Fees Lender Would Likely Incur As A Result Of The Injunction

Even If Deed Of Trust Only Allows Fees Added To The Debt, Fees Can Be Included For Provisional Relief Pending Future Actions On Whether Fees Recovered Through A Foreclosure Sale.

            In Johansen v. Bayview Loan Servicing LLC, Case No. C089085 (3d Dist. Apr. 19, 2022) (unpublished), residential borrower obtained a preliminary injunction to prevent a foreclosure of her house, but the trial judge conditioned the preliminary injunction under Code of Civil Procedure section 529 on an undertaking which included attorney’s fees the lender would likely incur as a result of the injunction.  Borrower appealed, arguing it was error to include the fees as an undertaking component.  The appellate court disagreed.  An undertaking is required by statute, separate and apart from deed of trust provisions which only allowed the fees to be added to the debt.  The Third District did agree that future events would determine what happened—lender, if it does get fee recovery through a foreclosure sale, cannot “double dip” by claiming fees against the injunction bond later on.

Probate, Sanctions: Sanctions Issued Against Beneficiary Contesting Trustee’s Account, Which Included $72,699 In Attorneys’ Fees, Affirmed On Appeal

Appellant’s Conclusionary Statements Were Not Sufficient To Meet Appellant’s Burden To Overcome Deferential Substantial Evidence Standard On Appeal.

            This next case provides a cautionary tale and affirms what we’ve said before – fee shifting statutes can be a real game changer.

            Appellant in Cavanagh v. Cavanagh, Case Nos. B294140/B299039 (2d Dist., Div. 6 April 18, 2022) (unpublished) incurred an alleged $105,021.48 in sanctions, which included $72,699 in attorneys’ fees, pursuant to Probate Code § 17211(a) – which allows for an award of the compensation and costs of the trustee and other expenses and costs of litigation, including attorney’s fees, against a beneficiary contesting the trustee’s account if the probate court determines that the contest was without reasonable cause and in bad faith.

            Appellant argued that the probate court did not have the authority to award sanctions because he did not contest Trustee’s account within the meaning of section 17211(a), but the appellate panel found the argument to be without merit based on appellant’s written objections to Trustee’s first draft account.  Appellant’s additional arguments – that he had not acted without reasonable cause and in bad faith, and that he had no reasonable alternative but to object – also went nowhere.  Determination as to reasonable cause – where the facts are disputed as they were in this case – and bad faith is made under the deferential substantial evidence standard.  As such, appellant had the burden of affirmatively showing that the record did not contain substantial evidence supporting the probate court’s findings.  (Denham v. Superior Court, 2 Cal.3d 557, 564 (1970).) However, appellant instead relied on conclusionary statements to prove his case on appeal.  Finally, as to appellant’s claim that he had no alternative but to object to Trustee’s account, he failed to show that Trustee’s account was facially defective.  In addition to the six-figure sanction award imposed on appellant, the 2/6 DCA also awarded Trustee his costs on appeal.

Employment: Plaintiff Winning A Determination That He Was An Employee Hit With Adverse Attorney Fees Award Of $34,505 Under Fee-Shifting Statute

Lower Court, Determining That The $25,753.25 Paid To Plaintiff For His Work Exceeded The Minimum Wage Rate He Was Entitled To, Awarded Plaintiff $0 On His Wage Claim – Opening The Door For Defendant To Seek Fees Under Labor Code § 98.2(c)

            In Gantman v. Stephan, Schreiber & Tabachnick CPA’s, Case No. B291932 (2d Dist., Div. 7 April 18, 2022) (unpublished), CPA plaintiff entered into a business relationship with defendant CPA firm.  The relationship fell apart after only a few months, and plaintiff filed an unsuccessful wage claim with the Labor Commissioner.  Plaintiff then appealed the adverse award to the superior court – claiming unpaid wages and unreimbursed expenses. (Labor Code § 98.2(a).)  Although the lower court found plaintiff had been an employee of defendant, it found that an agreement had not been reached as to the hourly pay rate – resulting in plaintiff’s entitlement to only the $9/hour minimum wage rate at the time, not the $200/hour rate plaintiff sought.  Because the $25,753.25 defendant had paid plaintiff for his work exceeded the minimum wage rate, the trial court awarded plaintiff $0 on his wage claim – which resulted in defendant’s entitlement to an award of attorney fees, which the lower court granted to the tune of $34,505. (Labor Code § 98.2(c).) Plaintiff appealed.

            Plaintiff, who was self-represented on appeal, failed to provide argument that the lower court erred in determining the legal basis for the award and/or abused its discretion in determining the amount of the award.  Instead, plaintiff argued simply that defendant was not entitled to fees under section 98.2(c) because the lower court erred in awarding plaintiff $0 – a decision plaintiff had already appealed to no avail, and the result of which could no longer be reconsidered based on the lapse of time since the decision in that appeal. (Cal. Rules of Court, Rule 8.264(b)(1).) As a result, the 2/7 DCA affirmed.  Additionally, the panel awarded defendant recovery of its costs on appeal.

Private Attorney General: Plaintiffs’ Fee Award Of $2,123,591 In DUI Conflict Of Interest Case Affirmed

However, Because Plaintiffs Entitled To Judgment On All Claims, Matter Remanded To See If Additional Trial Fees Should Be Awarded As Well As Calculation Of Winning Appellate Fees.

            Boy, oh boy, what appellate decisions can do with respect to fee awards.

            In California DUI Lawyers Assn. v. Cal. Dept. of Motor Vehicles, Case Nos. B305604/B309145 (2d Dist., Div. 4 Apr. 15, 2022) (published), plaintiffs had won some pieces and lost some pieces on summary judgment/adjudication motions relating to civil rights, due process, and illegal expenditure of funds claims relating to the theory that hearing officers have an irreconcilable conflict of interest in advocating DMV interests and acting as triers of fact in DUI hearings.  The lower court, based on plaintiffs’ partial victories, found plaintiffs were the prevailing parties, awarding them $2,123,591 in attorney’s fees under California’s private attorney general statute, but denying their request for fees of $5,242,243 (the lodestar plus a two-times positive multiplier—mainly denying the multiplier and cutting down the lodestar request from $2,621,121.50 to $2,123,591).

            On appeal, the 2/4 DCA decided that plaintiffs were entitled to judgment as a matter of law on all claims.  As such, it affirmed the fees award, finding that the trial judge did not abuse her discretion in determining that no multiplier was required because the matter did go to trial, there some skill missteps on the summary judgment motions, and the contingency risk was reflected in the hourly rates awarded to winning attorneys.  However, because plaintiffs had additional success, the matter was remanded to see if any more trial fees were warranted as well as to calculate reasonable appellate fees to be awarded to plaintiffs for winning on appeal.

Consumer Statutes: Split Ninth Circuit Panel Decides That Attorney’s Fees Can Be Included In Determining $50,000 Amount In Controversy Jurisdictional Threshold Under The Federal Magnuson-Moss Warranty Act

Dissent Disagrees; However, Because No Fee Entitlement Was Available Under Michigan State Statutes, Fees Were Not Includable So Federal Jurisdiction Was Not Present—A Conclusion Endorsed By All The Panel Justices.

            The federal Magnuson-Moss Warranty Act (MMWA) has a $50,000 amount-in-controversy jurisdictional threshold (exclusive of interests and costs), computed on the basis of all claims in the suit.  15 U.S.C. § 231(d)(3)(B).   In the particular case before it, in Shoner v. Carrier Corp., Case No. 20-56327 (9^th Cir. Apr. 14, 2022) (published), plaintiff brought a putative class action against Carrier for a defective air conditioner which was based on Michigan implied/warranty claims and the Michigan Consumer Protection Act.  The Ninth Circuit had to determine a split in sister circuit on whether attorney’s fees were “costs” which had to be excluded and further determine if there was fee entitlement anyway so as to confer federal jurisdiction on the district court with respect to the MMWA claim.

            In a 2-1 opinion, the majority found that attorney’s fees could be included in determining the jurisdictional threshold and were not “costs,” disagreeing with four sister circuit courts and siding with the Seventh Circuit on the issue.  The dissent believed that this issue did not have to be resolved based on the ultimate conclusion of the majority, but the dissenting justice had strong doubts that fees were to be counted in the calculus.

            However, that brought the panel to the issue of whether fees were allowable under the Michigan state law claims for purposes of being included.  Unanimously (with the dissenting justice concurring in this conclusion), the panel concluded there was no fee entitlement under Michigan law such that the statutory threshold could not be met and the MMWA claim was dismissed.

SLAPP: Where In Pro Per Litigant Hired An Assisting Attorney To Help With A SLAPP Motion And Apportioned Requested Fees 50% To Reflect Winning On One Out Of Two Claims, Appellate Court Affirmed Trial Judge’s SLAPP Fee Award

A Little Over $38,000 Was The Final Fee Award.

            Although an in pro per litigant cannot obtain a SLAPP fees award, he can get an award where he retains an attorney to assist him with prosecuting a SLAPP motion, even if the attorney is not of record.  (Witte v. Kaufman, 141 Cal.App.4^th 1201, 1207 (2006); Mix v. Tumanjan Development Corp., 102 Cal.App.4^th 1318, 1324 (2002).)

            An in pro per litigant and his retained attorney won a reversal of a SLAPP denial on one claim, then sought mandatory, reasonable SLAPP fees in Zilberstein v. Petersen, Case No. B311978 (2d Dist., Div. 4 Apr. 13, 2022) (unpublished).  But they did a smart thing:  they only asked for 50% of the incurred fees based on a 50% victory.  Both the trial and appellate courts liked this apportionment approach, with the appellate court sustaining the lower court’s entire award of the requested approximately $38,000 in fees for the SLAPP win. 

Costs, Prevailing Party, Section 1717, Section 998: Fifth District Deals With Various Prevailing Party Issues For Costs And Fees Award To Litigants Who Both Claimed To Have Prevailed

Plaintiff Winning Some Money Entitled To Routine Costs, But Defense Entitled To Prevailing Party Fees And Some Other Routine Costs Relating To Fee And Expert Witness Work, Some Other CCP § 998.

            Mike Murphy’s Enterprises, Inc. v. Fineline Industries, Inc., Case No. F080503 (5^th Dist. Apr. 13, 2022) (unpublished) is a good opinion to show the logical analysis of determining routine costs and fees awards where there is a mixed result and a CCP § 998 offer is involved.  Here is what the appellate court developed as the analytical framework:  (1) a court determines the prevailing party for a purpose of routine costs under CCP § 1032, with the prevailing party for 1032 purposes obtaining at least its preoffer costs; (2) if a party qualifies as a prevailing party under § 1032, the court turns to whether the prevailing party’s net monetary recovery exceeds any qualifying but rejected § 998 offer (which entails taking the amount awarded and adding preoffer interest and any properly requested costs), with costs including attorney’s fees if allowed by statute or contract); (3) in conjunction with the 998 analysis, the court must determine if the plaintiff is the prevailing party under section 1717 such that those preoffer fees may be included in the 998 net recovery analysis; (4) the court then considers the contractual provisions, the effect of section 1717 on the fees provisions, and finally the effect of the rejected 998 settlement offer such that if the net recovery is greater, the plaintiff is the prevailing party for the whole case or if the net recovery is lower, defendant will be treated as the prevailing party at all times after the settlement was made.

            In the actual case, plaintiff lost many of his contractual theories to defendant, but did win about $63,000 on his contractual claim.  Earlier in the case, defendant sent a 998 offer for $85,000 which was not accepted.  Eventually, the lower court determined defendant was the prevailing party for both fees and costs, especially under 998, awarding it about $564,300 in fees, costs, and expert witness fees—when offset against the $63,000 award to plaintiff, defendant had a favorable judgment of $501,284.95.  Plaintiff appealed.

            The Fifth District affirmed most of the trial judge’s awards, except for a routine costs award denial to plaintiff and except for taxing some of defendant’s routine costs a little.  Plaintiff was the prevailing 1032 party because it did receive positive money, such that it was entitled to its preoffer costs.  However, the trial judge was correct in determining that plaintiff properly excluded preoffer fees because he did determine that defendant was the prevailing party on the contract under section 1717, not plaintiff, in a mixed-results case—meaning that plaintiff did not have the net recovery for purposes of preoffer fees or postoffer costs.  Then, because defendant was entitled to fees and costs as prevailing party under both sections 1717 and CCP § 998, the appellate court only disagreed with the trial judge in minor respects, finding these costs were not recoverable: (1) past discovery sanctions; (2) filing costs in a separate federal action (which cannot be deemed costs awarded to a prevailing state court party); and (3) some County of Tulare production fees.  It did find that items such as CourtCall expenses and pro hac vice costs were proper.  In the end, it remanded to award plaintiff preoffer costs and to strike some defense costs items, but otherwise enter judgment pretty close to what occurred before the trial judge.

In The News . . . . Plaintiff Winning About $309,500 In Damages Against Amazon In Disparate Treatment Accommodation Case Garners Fee Award Of $2.47 Million

She Asked For $3.46 Million In Fees.

            Even though not winning all of her claims against Amazon, a female employee who won a disparate treatment claim based on pregnancy accommodation issues to the tune of about $309,500 in damages also requested a fees award of $3.46 million as prevailing party.  The trial court agreed she prevailed, awarding her $2.47 million in fees.  The result goes to show you how game changing a fee-shifting statute or contract can be in litigation. 

In The News: Mike and Marc Are Interviewed On The Subject Of Attorney's Fees

California Appellate Law Podcast.

        Because we have published our attorney's fees blog since 2008, Mike and Marc were recently interviewed by Tim Kowal and Jeff Lewis, the creators of the California Appellate Law Podcast. Thanks, Tim and Jeff for the opportunity to speak about attorney's fees. Our interview is the 28th episode of their excellent podcast. Here is a link to the interview.

Costs, Deadlines, Requests For Admission, Section 998: 2/8 DCA Affirms Denial Of Costs Of Proof Sanctions And Untimely Fee Request, Sustains Some Costs Despite A Costs Memo Verification, And Reversed Expert Fee Award Based On Invalidity Of 998 Offer

Panoply Of Issues Addressed In This One.

            In Bogdan v. Polak, Case Nos. B306264/B309780 (2d Dist., Div. 8 Apr. 6, 2022) (unpublished), landlord won a gnarly retaliatory eviction lawsuit against tenant based on some nonsuits and an eventual jury trial.  In postjudgment proceedings, the lower court denied landlord’s attorney’s fees request as untimely, awarded some routine costs even though landlord failed to verify the costs memorandum, awarded expert witness fees under a CCP § 998 offer to landlord, and refused a costs-of-proof sanctions request for RFA denials.

            Everything was affirmed by the appellate court, except for a reversal of the expert witness award.

            Landlord’s fee motion was untimely; despite landlord’s argument that more time was allowed based on specific emergency orders during the pandemic, the appellate court found that those orders only allowed for “grace” if the litigant had difficulty filing documents, which it did on other items during the COVID-19 crisis.  The denial of tenant’s motion to tax costs was correct because attaching a costs memorandum verification is not jurisdictional and landlord substantially complied with the requirements.   However, the expert witness costs award was overturned because the CCP § 998 offer conditioned entry of any judgment on the offering party giving additional authority for the entry, which made the offer conditional and invalid.  Finally, no costs-of-proof sanctions could be awarded because the requesting party provided a table of RFAs, answers, and trial proof, but—alas!—did not provide the record citations to support the argument.

In The News . . . . Facebook And Gibson Dunn Are Being Targeted For Discovery Sanctions Of Over $854,000 In Privacy Class Action In Northern California

Motion Has Been Filed And Unsealed, With Opposition Due In The Future.

            Just to show you how civil discovery is a financially draining part of litigation and is also the source of substantial sanctions motion for delay, one only needs to look at a motion filed by Plaintiffs in a privacy class action against Facebook (Meta)—In re Facebook Inc. Privacy User Litig., Case No. 18-md-02843-VC-JSC (N.D. Cal. Apr. 1, 2022) (Doc. No. 907-5) [previously sealed and now unsealed].  Based on comments at a prior hearing by the district judge presiding over the case, Plaintiffs are seeking $854,195.72 is discovery sanctions against Facebook and its counsel Gibson Dunn.  No opposition has yet been filed, but it would be ironic if the defense wants more time given the district judge’s earlier comments chastised them for delays in producing information.  We shall see!

Costs: Trial Court’s Judgment Vacating Costs Awarded Against Gambling Licensee By The California Gambling Control Commission And Authorizing Remand To Administrative Law Judge Affirmed On Appeal

The Commission Awarded Costs To The Bureau Of Gambling Control After Concluding ALJ’s Denial Of Costs Was Based On Misinterpretation Of The Law Governing Costs Awards, But Should Have Remanded The Issue To The ALJ, And Nothing In Bus. & Prof. Code § 19930(d)(1) Prevented Trial Court From Vacating The Award And Remanding To The Commission With Leave For It To Remand The Issue To The ALJ.

Gambling Room, Looking East – Town of Locke, Dai Loy Gambling Museum, 13951 Main Street, Locke, Sacramento County, CA. Jet Lowe, Creator. 1984. Library of Congress.

            The Department of Justice, through its Bureau of Gambling Control, investigates gambling license applicants, monitors the conduct of licensees, and initiates and prosecutes disciplinary actions against licensees accused of committing violations of the Gambling Control Act (Bus. & Prof. Code, div. 8, ch. 5; § 19800).  One such licensee saw his gambling license revoked/not renewed by the California Gambling Control Commission following a hearing before an administrative law judge (ALJ) where licensee was found to have committed 21.5 violations (and for those who are curious – no, there is no explanation for how a half-violation could be committed).  Additionally, the Commission hit licensee with a monetary penalty of $13,672,000 and costs of $127,880. 

            Licensee challenged the Commission’s decision through a petition for a writ of mandate before the trial court – achieving partial success with the trial court’s determination that the Commission may have relied on unproven misconduct in reaching its decision, and by having the penalty and costs vacated for exceeding the amount supported by law and remanded for redetermination based on the trial court’s conclusion that the monetary penalty exceeded the amount supported by law and that the costs could only be assessed by the ALJ on remand from the Commission.  This led to an appeal by both the licensee and the Commission in Swallow v. Cal. Gambling Control Com., Case No. C089329 (Third Dist., April 4, 2022) (unpublished).

            The Third District affirmed the trial court’s judgment with exception to the monetary penalty – although finding that the penalty was not supported by law, analyzing the issue differently than the trial court and ordering the Commission to reconsider the penalty in line with the appellate panel’s opinion.  However, we focus on the costs issue, which the licensee unsuccessfully argued on appeal had been improperly remanded for further proceedings.

            The Bureau of Gambling Control’s request for an award of costs under § 19930(d) was denied by the ALJ because the Bureau submitted its proof of costs after the conclusion of, rather than during, the hearing on the charges against licensee.  Based on its determination that the ALJ made an error of law, the Commission awarded costs to the Bureau – which the trial court reversed and remanded to the Commission with leave for it to remand the case back to the ALJ.  On appeal, licensee did not address ALJ’s mistake, but argued that the trial court’s remand violated § 19930(d)(1).  The Third District – finding licensee’s argument to be without merit – agreed with the trial court that § 19930(d)(1) does not prohibit such remand to the ALJ for reconsideration of the Bureau’s costs request under a proper interpretation of § 19930(d), and affirmed.

Family Law: Appellate Court Affirms 80/20 Total Fee Division Between Husband And Wife Where Husband Had A Disparate Net Worth Variance

What Caught Our Eye On This One—Total Fees And Court Costs Were $7.5 Million Altogether!

            Marriage of Zucker, Case Nos. B281051 et al. (2d Dist., Div. 4 Mar. 3, 2022, modified Apr. 1, 2022) (partially published on invalidity of spousal support provision; fee discussion unpublished) involved a dissolution proceeding where the husband had a much more substantial net worth position than wife, who was unfortunately plagued by psychological problems before and during their marriage.  The trial judge’s determinations, which were for the most part affirmed except for a math correction, are not that glaring, but what caught our eye was the amount that can be spent in a contentious divorce case.  But, first, we do the technical discussion of the opinion.

            What happened here is that the trial court found a premarital agreement (PMA) was valid (a husband win), but it did invalidate the spousal support provision (a wife win).  Although there was a prevailing party PMA fees clause, the trial judge found there was no prevailing party given the mixed result, a determination affirmed by the appellate court. 

            The divorce action was intensively and exhaustively litigated by both sides, such that Family Code section 271 sanctions requests by both sides were properly denied.

            Based on wife’s financial disparity in net worth and net spendable income, it was not error to decide that an 80/20 division of fees was proper, with husband bearing the higher brunt of the load.

            What really caught our eye was this:  each side spent about $3.6 million in attorney’s fees and another $300,000 in court costs were altogether expended – a total of $7.5 million.  Wowzer!

Appealability, POOF!: Reversal Of Merits Judgment For $390,184 In Damages Also Meant That A $365,065 Prevailing Parties’ Fees Award Went POOF!

No Separate Appeal Of The Fees Award Was Necessary To Extinguish The Fees Award—Although Prudent Appellate Practitioners Usually Appeal Separately To Be Cautious.

            In Medical Benefits Administration, Inc. v. Nivano Physicians, Case No. C093214 (3d Dist. Apr. 1, 2022) (unpublished), prevailing parties were awarded $365,065 in attorney’s fees after winning $390,184 in damages.   However, defendant in a prior appeal turned the merits judgment totally around, with the appellate court determining that agreements underlying that judgment were illegal and unenforceable.  So, given that prior result, the fees award went POOF!  also.  The Third District reminded appellate practitioners that it is not necessary to appeal the postjudgment fee award to get the fee award to go POOF! (Center for Biological Diversity v. County of San Bernardino, 188 Cal.App.4^th 603, 613 n. 4 (2010)), but many appellate practitioners separately appeal the award just to be safe.