CALIFORNIA EMPLOYMENT LAWYERS ASSOCIATION ("CELA")


ATTORNEYS FEES


By Michelle A. Reinglass, Esq.



1. STATUTORY OR CONTRACTUAL AUTHORITY FOR FEES


            A. No fees absent statute or contract provision:


            "Except as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys...is left to the agreement, express or implied, of the parties." (CCP 1021).


            B. Fees Based on Contract:


            Civil Code 1717: "(a) In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to the other costs."

 

            C. Allowable as costs:


            Regardless of whether authorized by contract, statute or law, attorney's fees are allowable as costs. (CCP 1033.5(a)(1).).


            D. Awarded as damages:


            Fees sought as damages may not be asserted by post-trial motion. In order to recover fees as damages, they must be pleaded and proved to the trier of fact. (See Brandt v. Superior Court (1985) 37 C3d 813, 819, 210 CR 211; Hsu v. Abbara (1995) 9 C4th 863, 869, 39 CR2d 824.)

 


2. PREVAILING PARTY:


            A. General:


            Plaintiffs need only obtain relatively minimal benefits for purposes of fee entitlement. Plaintiffs are "considered to have prevailed when they vindicate rights." (Maher v. Gagne (1980) 448 U.S. 754, 757 (citation omitted).)


 

            B. Discrimination cases:


                        In cases brought under FEHA, the "prevailing plaintiff 'should ordinarily recover an attorney's fee unless special circumstances would render such an award unjust.'" (Stephens v. Coldwell Banker Commercial Group, Inc. (1988) 199 Cal.App.3d 1394, 1405, 245 Cal.Rptr. 606, 612, citing Newman v. Piggle Park Enterprises (1968) 390 U.S. 400, 402.)

 

            C.        Differences in prevailing plaintiff vs. defendent:


                        If defendant is prevailing party, there is not automatic fee shifting to the plaintiff. (Christiansburg Garment Co. v. EEOC 434 U.S. 412 (1978)



3. PROCEDURE:

 

            A. Based on contract:


            Attorney's fees authorized by contract, including those awarded pursuant to CC 1717 are allowable costs under CCP 1032. (CCP 1033.5(a)(10)(A).) Absent the entry of default or a stipulation, the fees must be fixed on a noticed motion. (CCP 1033.5(c)(5).)


            CCP 1033.5 was enacted to confirm that such attorney's fees are costs awardable only on noticed motion. (Bankes v. Lucas (1992) 9 CA 4th 365, 370-371, 11 CR2d 723.)

 

            Strict compliance required? (See Gunlock Corp. v. Walk on Water (1993) 15 CA4th 1301, 19 CR2d 197; Hydratec v. Sun Valley 260 Orchard & Vineyard Co. (1990) 223 CA3d 924, 272 CR 899; Russell v. Trans. Pac. Group (1994) 19 CA4th 1717, 24 CR2d 274.)

 


            B. Based on statute:


            Attorney's fees based on statute may be fixed (a) on a noticed motion, (b) at the time a statement of decision is rendered, (c) on application supported by an affidavit made concurrently with a claim for other costs, or (d) on entry of a default judgment. (CCP 1033.5(c)(5).)


            As to all motions for attorney's fees, the motion procedure is set forth in CRC, Rule 870.2, "except as otherwise provided by statute". (CRC Rule 870.2(a).)


            C. Authorized by "law":


            Procedure same as with fees based on contract. (CCP 1033.5(c)(5); 1033.5(a)(10).)


            D. Private Attorney general doctrine:


            Amount of fees determined by calculating "lodestar" figure (hours times reasonable hourly rate), and then adjusting that figure by a multiplier based on other factors. (see below) (Press v. Lucky Stores (1983) 34 C3d 311, 322, 193 CR 900).


            The "Private Attorney General" doctrine is designed to encourage lawsuits effectuating a strong public policy by awarding attorney fees to those who bring such suit and thereby benefit the public interest." (Hospital Systems, Inc. v. Office of Statewide Health Etc. Development (1994) 25 Cal.App.4th 1686, 1690, 30 Cal.Rptr.2d 922, 925.) The prevailing party must show:

 

            (1)       the action "has resulted in the enforcement of an important right affecting the public interest,"

 

            (2)       "a significant benefit" has been "conferred on the general public or large class of persons,"

 

            (3)       "the necessity and financial burden of private enforcement are such as to make the award appropriate", and

 

            (4)       the fees "should not in the interest of justice be paid out of the recovery, if any."


(Code Civ. Proc. § 1021.5; Beasley v. Wells Fargo Bank, N.A. (1991) 235 Cal.App.3d 1407, 1413, 1 Cal.Rptr.2d. 459.)



4. DETERMINATION OF AMOUNT OF FEES TO AWARD


            In order to determine what constitutes a reasonable award, the Supreme Court has held that "[t]he most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." (Hensley v. Eckerhart, (1983) 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d. 2d 40; see also, Serrano v. Priest (1977) 20 Cal. 3d 25, 48, 141 Cal.Rptr. 315, 328; Serrano v. Unruh (1982) 32 Cal.3d 621, 625, 186 Cal.Rptr. 754, 756, fn. 6.) This calculation is known as the "lodestar" amount, and is "presumed to be the reasonable fee." (Blum v. Stenson (1984) 465 U.S. 886, 897, 104 S.Ct. 1541, 79 L.Ed.2d 891.)  


            A. Lodestar: Serrano v. Priest (1977) 20 C3d 25, 48, 141 CR 315 (Serrano III): Court approved guidelines for determining amount of a fee award: First, the trial judge may multiply the time spent and reasonable hourly compensation of each attorney involved in the presentation of the case. Then using this figure as the "touchstone" (or lodestar), the judge may take into consideration various relevant factors, of which some militate in favor of augmentation and some in favor of diminution. Additional factors considered are:


            (a) the novelty and difficulty of the questions involved, and the skill displayed in presenting them;


            (b) the extent to which the nature of the litigation precluded other employment by the attorneys;


            (c) the contingent nature of the fee award, both from the point of view of eventual victory on the merits and the point of view of establishing eligibility for an award;


            (d) whether an award against the state would ultimately fall upon the taxpayers;


            (e) whether the attorneys in question received public and charitable funding for the purpose of bringing lawsuits of the character involved;


            (f) whether the monies awarded would inure to the individual benefit of the attorneys involved or to the organizations by which they are employed; and


            (g) whether the attorneys involved, if more than one, had approximately an equal share in the success of the litigation.


(See also C.E.B. Attorney Fee Awards 2d, Chaps. 12, 13).

 

            B. Johnson/Kerr factors: The amount of fees to be awarded is within the discretion of the trial court and will be not disturbed absent an abuse of discretion. (Kerr v. Screen Extras Guild, Inc. (1975), 526 F2d 67. Factors to be considered are:


            (1) the time and labor required;


            (2) the novelty and difficulty of the questions involved;


            (3) the skill requisite to perform the legal service property;


            (4) the preclusion of other employment by the attorney due to acceptance of the case;


            (5) the customary fee;


            (6) whether the fee is fixed or contingent;


            (7) time limitations imposed by the client or circumstances;

 

            (8) the amount involved and the results obtained;


            (9) the experience, reputation and ability of the attorneys;


            (10) the "undesirability" of the case;


            (11) the nature and length of the professional relationship with the client; and


            (12) awards in similar cases.

(Johnson v. Georgia Highway Express 488 F2d 714 (5th Cir. 1974; Kerr v. Screen Extras Guild, Inc., supra.)


            C. Private Attorney general action: (Serrano v. Priest, supra). The fee must bear some reasonable relationship to the lodestar figure and to the purpose of the private attorney general doctrine. (Press v. Lucky, supra, 34 C3d 324.)

 

                        (1) Class actions: When fees are awarded in a class action, they must be based on time spent and a reasonable hourly rate. (Mandel v. Lackner (1979) 92 CA3d 747, 155 CR 269.



            D. Multipliers: CCP 1021.5 was amended in 1993 to permit recovery of attorneys' fees under the private attorney general doctrine by successful public entity against another public entity; however awards may not be increased or decreased by a multiplier for a public entity.

 

            Both Federal and State courts have applied the 2.0 multiplier: Coalition for L.A. County Planning Interests v. Board of Supervisors (1977) 76 Cal.App.3d 241, 251, 142 Cal.Rptr. 766,773; Crommie v. State of Cal.Public Utilities Comm'n (1994, N.D. Cal.) 840 F. Supp. 719, 726; and McCallion v. Oakland Unified School Dist. (1997) Alameda Superior Court Case No. 657622-2.


            In Crommie v. State of Cal. Public Utilities Comm'n, supra, an age discrimination case, the court awarded a 2.0 multiplier based on the difficulty of the litigation (protracted and complicated three week trial), the success on the merits, and the public interest value. (Id.)


            E. Sworn testimony: "Sworn testimony that, in fact, it took the time claimed is evidence of considerable weight on the issue of the time required in the usual case." (Perkins v. Mobile Housing Board (11th Cir 1988) 847 F.2d 735, 738).


            F. Fees higher than award: The fact that the attorneys' fees incurred exceed the amount of the award is not a deterrent to awarding full fees. (California Housing Finance Agency v. E.R. Fairway Assoc., et al. (1995) 37 Cal.App.4th 1508, 44 Cal.Rptr.2d 591.)



6. ITEMIZED, CONTEMPORANEOUS BILLING RECORDS:


            Detailed, itemized, contemporaneous billing records often form the basis for determining whether to award fees, and the amount thereof. They are extremely helpful aid to the Court.



7. LIMITED SUCCESS:


            In Sundance v. Municipal Court (1987) 192 CA3d 268, 237 CR 269, the court addressed whether the successful plaintiffs were entitled to an award based on all hours reasonably spent in pursuit of the litigation, or whether time spent on unsuccessful theories should be excluded. Court declined to follow federal precedent supporting exclusion (e.g. Hensley v. Eckerhart (1983) 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed. 2d 40); Under 42 U.S.C. Section 1988, trial court required to determine "reasonable" amount; under Hensley v. Eckerhart, supra, "the degree or extent of appellant's success in obtaining results which they sought must be taken into consideration in determining the extent of attorney fees which it would be reasonable for them to recover." (213 CA 3d 248). "[u]nder state law as well as federal law, a reduced fee award is appropriate when a claimant achieves only limited success." (213 CA3d 249).


            Plaintiffs may be considered "prevailing parties" for attorneys' fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit. (Hensley v. Eckerhart (1983) 461 U.S. 424, 433.)



8. 998 offers:


            One of the main incentives to accept a section 998 offer is to avoid the "penalties" resulting from failure to accept it if the case goes to trial. (Bay of San Pedro v. Sup. Ct. (Goodstein) (1992) 3 Cal.4th 797, 804, Cal.Rptr.2d 696, 700-701 (parentheses in original).)


            Thus, all costs incurred (preoffer and postoffer) are included in determining whether the judgment is more favorable than the pretrial section 998 demand. (Code Civ. Proc. §998; see also, Stallman v. Bell (1991) 235 Cal.App.3d 740, 748, 286 Cal.Rptr. 755, 760.)



9. EXAMPLES OF STATUTES AUTHORIZING ATTORNEYS FEES:


            Remand: 28 USCA 1447 -- An order remanding a case back to state court from federal court may require payment of just costs and any actual expenses including attorney fees, incurred as a result of the removal. (See Schmitt v. Ins. Co. No. Amer. 845 F2d 1546, 1552 (9th Cir. 1988) - requires showing of bad faith).


            Discrimination: (federal) 42 USCA 2000e-5: Subsection (k)-In any action or proceeding under this subchapter the court in its discretion, may allow the prevailing party, other than the Commission or the United States, a reasonable attorney's fee (including expert fees) as part of the costs..."

                                      (state) Govt.Code 12965(b): [I]n actions brought under this section, the court, in its discretion may award to the prevailing party reasonable attorney fees and costs except where such action is filed by a public agency or a public official, acting in an official capacity.


            Equal Access to Justice Act 28 U.S.C. Section 2142(b)--must establish United States acted in bad faith, vexatiously, wantonly, or for oppressive reasons.


            California Tort Claims Act, CCP 1038--In an action under the California tort claims statutes, attorneys fees may be awarded upon the granting of summary judgment, motion for directed verdict, motion for judgment under Section 631.8, or any nonsuit, if the court determines that the plaintiff did not bring the proceeding with reasonable cause and in a good faith belief that there was a justifiable controversy which warranted the filing of the complaint.