Filipino Accountants' Assn. v. State Bd. of Accountancy

• Decision Date: 25 April 1984
• Citation: 204 Cal.Rptr. 913,155 Cal.App.3d 1023
• Court: California Court of Appeals
• Parties: FILIPINO ACCOUNTANTS' ASSOCIATION, INC. et al., Plaintiffs and Respondents, v. STATE BOARD OF ACCOUNTANCY et al., Defendants and Appellants. Civ. 22735.

Page 913

204 Cal.Rptr. 913

155 Cal.App.3d 1023

FILIPINO ACCOUNTANTS' ASSOCIATION, INC. et al., Plaintiffs and Respondents, v.STATE BOARD OF ACCOUNTANCY et al., Defendants and Appellants.

Civ. 22735.

Court of Appeal, Third District, California.

April 25, 1984.

As Modified on Denial of Rehearing

May 25, 1984.

John K. Van de Kamp, Atty. Gen., Roy S. Liebman, Deputy Atty. Gen., for defendants and appellants.

Altshuler & Berzon, Fred H. Altshuler, Robert L. Gnaizda and Armando M. Menocal, III, San Francisco, for plaintiffs and respondents.

SIMS, Associate Justice.

RespondentsCalifornia State Board of Accountancy and its individual members (hereafter Board) appeal from a judgment awarding attorneys' fees to counsel for petitionersFilipino Accountants Association, Inc., et al. (hereafter petitioners) pursuant to section 1988 of Title 42 of the United States Code¹ after petitioners had prevailed in litigation against the Board.The Board does not contest the amount of fees awarded; it simply challenges the authority of the court to award fees under section 1988.

We conclude that, pursuant to decisions of the United States Supreme Court, petitioners were legally eligible for an award of fees under section 1988.Since the Board has not contended the magnitude of the award of fees was unreasonable, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Former Business and Professions Code section 5087 allowed the Board to grant waivers of the California Certified Public Accountant (CPA) Examination to any applicant for certification who held a comparable certificate or degree issued in another state or in a foreign country, "if the [Board of Accountancy] determines that the standards under which the applicant received such certificate or degree were as high as the standards established in [California] ...."²

On June 13, 1978, petitioners filed a petition for writ of mandate(Code Civ.Proc., § 1085) in Sacramento County Superior Court alleging that, since at least 1957, the Board had refused to exercise its authority under former Business and Professions Code section 5087 to grant waivers to accountants certified in the Philippines.Petitioners alleged that the Board consistently granted waivers of the California CPA examination to "Chartered Accountants," those licensed to practice in British Commonwealth countries, ³ although the standards for licensure in Commonwealth countries were not as high as those in the Philippines.Petitioners alleged the Board's history of granting waivers to Commonwealth--but not Philippine--licensed CPA's was arbitrary, unreasonable and an abuse of discretion, and constituted "intentional irrational discrimination against Philippine Certified Accountants and in favor of white persons based on race and national origin."

Petitioners alleged the Board violated mandatory duties imposed upon it by the due process and equal protection clauses of the United States and California constitutions, by 42 United States Code section 1981,⁴Civil Code sections 51and52,Labor Code section 1412, andBusiness and Professions Code section 16721.The petition requested a case-by-case review of the qualifications of Philippine CPA's who would otherwise qualify for examination waivers pursuant to former Business and Professions Code section 5087, as well as temporary admission to practice for Philippine CPA's whose waiver requests were not processed within six months after the alternative writ issued.

The case went to trial on the merits, and on October 29, 1980, the trial court issued its "Notice of Intended Decision," which provided in pertinent part that: "1.The Court finds that [the Board] abused its discretion by denying waivers under California Business and Professions Code section 5087 to applicants who were duly licensed as CPA's in the Philippines during the period 1957 through 1977.[p] 2.[The Board] is, therefore, commanded to reevaluate applications received during the period 1957 through 1977 from all applicants who were duly licensed as CPA's in the Philippines using the same standard as was used in evaluating applicants from New Zealand, India and Australia, for the purpose of determining whether waivers pursuant to section 5087 should be granted."The trial court made no mention of petitioners' claims of racial or national origin discrimination, or of section 1981.

Following the trial court's announcement of its intended decision the parties entered into a stipulation for judgment, and judgment was entered pursuant to the stipulation on December 18, 1980.The judgment ordered the Board to reevaluate applications of Philippine CPA's as outlined in the notice of intended decision.The judgment expressly reserved the issue of attorneys' fees for later proceedings.

On March 27, 1981, petitioners noticed a motion for award of attorneys' fees pursuant to Code of Civil Procedure 1021.5, the court's equitable powers under the "private attorney general" doctrine, and the federal Civil Rights Attorneys' Fees Awards Act.(§ 1988).⁵Petitioners thought it important to obtain an award pursuant to section 1988 because the 1982 California Budget Act contained a provision ostensibly limiting attorneys' fees awards payable by the state pursuant to Code of Civil Procedure section 1021.5 to a maximum of $50,000.(Stats.1982, ch. 326, p. 357.)Petitioners reasoned the state would be compelled to honor a judgment validly awarding fees in excess of $50,000 pursuant to the federal statute, an issue we explicitly refrain from addressing here.

On November 23, 1982, the trial court issued a statement of decision regarding the issue of attorneys' fees, which provided in pertinent part that: "California Code of Civil Procedure section 1021.5andTitle 42 United States Code section 1988 provide authority for an award of attorneys' fees to petitioners.[p] This action has resulted in the enforcement of important rights affecting the public interest.These rights include the rights of Filipino CPAs to equal protection of the laws under United States and California Constitutions; the right of such individuals to practice their profession; the right of such individuals to be free from arbitrary and capricious treatment by the Board of Accountancy; and the right of minority communities and the public generally to be served by a wide range of professionals without regard to national origin."(Emphasis added.)

DISCUSSION

I

At the outset we note that this case assumes an unusual posture.The Board concedes the judgment's validity under Code of Civil Procedure section 1021.5 and challenges only the trial court's reliance on section 1988 as an alternative ground for its decision.

Ordinarily, when an appellate court concludes that affirmance of the judgment is proper on certain grounds it will rest its decision on those grounds and not consider alternative grounds which may be available.(6 Witkin, Cal.Procedure (2d ed. 1971) Appeal, § 223, p. 4212;seeAgricultural Labor Relations Bd. v. Laflin & Laflin(1979)89 Cal.App.3d 651, 662-663, fn. 11, 152 Cal.Rptr. 800;Coalition for L.A. County Planning etc. Interest v. Board of Supervisors(1977)76 Cal.App.3d 241, 246, 142 Cal.Rptr. 766.)

However, appellate courts depart from this general rule in cases where the determination is of great importance to the parties and may serve to avoid future litigation (6 Witkin, op. cit. supra, § 225, p. 4214;Eye Dog Foundation v. State Board of Guide Dogs for the Blind(1967)67 Cal.2d 536, 542, 63 Cal.Rptr. 21, 432 P.2d 717), or where the issue presented is of continuing public interest and is likely to recur.(John A. v. San Bernardino City Unified School Dist.(1982)33 Cal.3d 301, 307, 187 Cal.Rptr. 472, 654 P.2d 242.)

As we noted, the Legislature has placed an apparent limitation on the amount of attorneys' fees payable under Code of Civil Procedure section 1021.5.Without intimating that there may be a dispute as to collection of the judgment herein, we recognize that this appeal affords the Board its only opportunity to contest the award of fees under section 1988 lest the issue be waived and the judgment be entitled to res judicata effect.(SeeWall v. Donovan(1980)113 Cal.App.3d 122, 126, 169 Cal.Rptr. 644;Evans v. Horton(1953)115 Cal.App.2d 281, 286, 251 P.2d 1013.)Moreover, we believe the matter is of general public interest.Accordingly, we entertain the Board's appeal.

II

We first examine the federal Civil Rights Attorneys' Fees Awards Act."In Alyeska Pipeline Service Co. v. Wilderness Society, 421 US 240, 44 LEd2d 141, 95 SCt 1612 (1975), [the United States Supreme Court] reaffirmed the 'American Rule' that each party in a lawsuit ordinarily shall bear its own attorney's fees unless there is express statutory authorization to the contrary.In response Congress enacted the Civil Rights Attorneys' Fees Awards Act of 1976, 42 USC § 1988[42 USCS § 1988], authorizing the district courts to award a reasonable attorney's fee to prevailing parties in civil rights litigation.The purpose of § 1988 is to ensure 'effective access to the judicial process' for persons with civil rights grievances.HR RepNo. 94-1558, p 1(1976).Accordingly, a prevailing plaintiff' "should ordinarily recover an attorney's fee unless special circumstances would render such an award unjust." 'S RepNo. 94-1011, p 4(1976)(quotingNewman v. Piggie Park Enterprises, 390 US 400, 402, 19 LEd2d 1263, 88 SCt 964 (1968))."(Hensley v. Eckerhart(1983)461 U.S. 424, ---- - ----, 103 S.Ct. 1933, 1937-1938, 76 L.Ed.2d 40, 47-48, footnote omitted.)

In passing the Civil Rights Attorneys' Fees Act, Congress exercised its power under section 5 of the Fourteenth Amendment to set aside the states' Eleventh Amendment immunity from retroactive relief.(Hutto v. Finney(1978)437 U.S. 678, 693-694, 98 S.Ct. 2565, 2574-2575, 57 L.Ed.2d 522, 536-537;seeMaher v. Gagne(1980)448 U.S. 122, 131-132, 100 S.Ct. 2570, 2575-2576, 65 L.Ed.2d 653,...