Flannery v. California Highway Patrol

• Decision Date: 11 February 1998
• Docket Number: No. A076872,A076872
• Citation: 61 Cal.App.4th 629,71 Cal.Rptr.2d 632
• Parties: , 76 Fair Empl.Prac.Cas. (BNA) 212, 98 Cal. Daily Op. Serv. 1087 Leslie M. FLANNERY, Plaintiff and Respondent, v. CALIFORNIA HIGHWAY PATROL et al, Defendants and Appellants.
• Court: California Court of Appeals Court of Appeals

Page 632

71 Cal.Rptr.2d 632

61 Cal.App.4th 629, 76 Fair Empl.Prac.Cas. (BNA) 212,

98 Cal. Daily Op. Serv. 1087

Leslie M. FLANNERY, Plaintiff and Respondent, v. CALIFORNIA HIGHWAY PATROL et al, Defendants and Appellants.

No. A076872.

Court of Appeal, First District, Division 1, California.

Feb. 11, 1998.

Daniel E. Lungren, Attorney General, Tyler B. Pon, Supervising Deputy Attorney General, Lisa A. Tillman, Deputy Attorney General, for defendants and appellants.

Amitai Schwartz, Dennis M. Farias, Law Offices of Amitai Schwartz, John Houston Scott, San Francisco, John F. Prentice, Walnut Creek, Prentice & Scott, San Francisco, for plaintiff and respondent.

STRANKMAN, Presiding Justice.

The principal question in this appeal is whether a California court must apply standards applicable to federal fee-shifting statutes when it awards reasonable attorney fees to a prevailing plaintiff in an action under the California Fair Employment and Housing Act (Gov.Code, § 12900 et seq.; FEHA). We conclude that California law, not federal law, applies. Nevertheless, we also conclude that the order awarding fees in this case must be reversed and remanded for reconsideration of the amount of the award.

Factual and Procedural Background

Plaintiff Leslie M. Flannery was terminated from her employment as a California Highway Patrol (CHP) traffic officer in 1993. She sued the CHP and others, alleging harassment and wrongful termination in violation of the FEHA, because of gender-based discrimination or in retaliation for an earlier discrimination claim. She sought reinstatement and damages.

After a lengthy trial, the jury returned a general verdict awarding plaintiff $250,000. The judgment entered upon that verdict also included orders granting injunctive relief as to plaintiff's personnel file and status as a CHP officer.

Plaintiff moved for attorney fees and expenses pursuant to two separate statutory provisions, Government Code section 12965, subdivision (b), which is part of the FEHA, and Code of Civil Procedure section 1021.5 (section 1021.5). The trial court awarded plaintiff $1,088,231 in fees and expenses.

In a written order explaining its reasoning, the court began by finding that plaintiff was entitled to fees under the FEHA. Next, it determined a lodestar based on the hours reasonably spent on the case and a reasonable hourly rate. To establish that reasonable hourly rate, it considered the skill and experience of the attorneys, the nature of the work performed, the relevant area of expertise, their customary billing rates, and the prevailing rate charged by attorneys of similar skill and experience with comparable legal services in the community. The court then concluded that plaintiff was entitled to a multiplier of the lodestar under the FEHA, because the action resulted in enforcement of important rights affecting the public interest, a significant benefit had been conferred on the general public or a large class of persons, the necessity and financial burden of private enforcement were such to make the award appropriate, and the fees should not be paid out of the recovery. ¹ Next, the court found that plaintiff also was entitled to fees under section 1021.5. Although it specifically noted that plaintiff had no difficulty in procuring counsel to represent her in this action, it concluded that her fees under that statute should be enhanced for several reasons, including the contingent nature of the case, the complexity of the contested issues of fact, the high level of skill displayed by plaintiff's attorneys, the "extraordinary" result given the obstacles faced by plaintiff's attorneys, the amount of time involved, and the delay in receiving compensation.

The court awarded $504,075 as the lodestar amount, multiplied by two, totaling $1,008,150 in enhanced fees for work on the merits of the lawsuit. The rest of the award included expenses and the attorney fees for work on the fee motion itself. Defendant has appealed, arguing that plaintiff was not entitled to fees under section 1021.5 and that the court erred in applying a multiplier to calculate the award of fees under the FEHA. ²

Section 1021.5

Code of Civil Procedure section 1021 is the Legislature's affirmation of the "American rule," which provides that each party to a lawsuit must ordinarily pay his or her own attorney fees. (Trope v. Katz (1995) 11 Cal.4th 274, 278, 45 Cal.Rptr.2d 241, 902 P.2d 259.) That statute provides in pertinent part: "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...." The Legislature has enacted dozens of statutory exceptions to the American rule, including those at issue in this case, section 1021.5 and Government Code section 12965, subdivision (b). ³ (See Pearl, Cal. Attorney Fee Awards (Cont.Ed.Bar 2d ed.1997) § 5.1, p. 5-2 & Chart: Selected California Fee-Shifting Statutes; 7 Witkin, Cal. Procedure (4th ed. 1997) Judgment, §§ 190-201, pp. 715-733.) We first consider plaintiff's entitlement to fees under section 1021.5. As plaintiff points out, if the award can be affirmed based on that statute, we need not analyze its validity under the FEHA.

Section 1021.5 codifies the "private attorney general" doctrine of attorney fees articulated in Serrano v. Priest (1977) 20 Cal.3d 25, 141 Cal.Rptr. 315, 569 P.2d 1303 (Serrano III ) and other judicial decisions. (Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 933, 154 Cal.Rptr. 503, 593 P.2d 200.) That statute permits a trial court to award fees to a successful party in any action that "has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons; (b) the necessity and financial burden of private enforcement ... are such as to make the award appropriate; and (c) such fees should not in the interest of justice be paid out of the recovery, if any."

Underlying the private attorney general doctrine is the recognition that privately initiated lawsuits often are essential to effectuate fundamental public policies embodied in constitutional or statutory provisions, and that without some mechanism authorizing a fee award, such private actions often will as a practical matter be infeasible. The basic objective of the doctrine is to encourage suits enforcing important public policies by providing substantial attorney fees to successful litigants in such cases. (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1289, 240 Cal.Rptr. 872, 743 P.2d 932.)

Whether to award fees under this statute is a matter within the trial court's discretion and will not be disturbed on appeal absent a showing of abuse of that discretion. But discretion may not be exercised whimsically, and reversal is required where there is no reasonable basis for the ruling or when the trial court has applied the wrong test to determine if the statutory requirements were satisfied. (Westside Community for Independent Living, Inc. v. Obledo (1983) 33 Cal.3d 348, 354-355, 188 Cal.Rptr. 873, 657 P.2d 365; Baggett v. Gates (1982) 32 Cal.3d 128, 142-143, 185 Cal.Rptr. 232, 649 P.2d 874; California Licensed Foresters Assn. v. State Bd. of Forestry (1994) 30 Cal.App.4th 562, 569-574, 35 Cal.Rptr.2d 396; Angelheart v. City of Burbank (1991) 232 Cal.App.3d 460, 468-469, 285 Cal.Rptr. 463.)

Because the public always has a significant interest in seeing that laws are enforced, it always derives some benefit when illegal private or public conduct is rectified. Nevertheless, the Legislature did not intend to authorize an award of fees under section 1021.5 in every lawsuit enforcing a constitutional or statutory right. (Woodland Hills Residents Assn., Inc. v. City Council, supra, 23 Cal.3d at p. 939, 154 Cal.Rptr. 503, 593 P.2d 200; Press v. Lucky Stores, Inc. (1983) 34 Cal.3d 311, 319, fn. 7, 193 Cal.Rptr. 900, 667 P.2d 704.) The statute specifically provides for an award only when the lawsuit has conferred "a significant benefit" on "the general public or a large class of persons." The trial court must determine the significance of the benefit and the size of the class receiving that benefit by realistically assessing the gains that have resulted in a particular case. (Woodland Hills Residents Assn., Inc., supra, at pp. 939-940, 154 Cal.Rptr. 503, 593 P.2d 200.)

When the record indicates that the primary effect of a lawsuit was to advance or vindicate a plaintiff's personal economic interests, an award of fees under section 1021.5 is improper. (Press v. Lucky Stores, Inc., supra, 34 Cal.3d at pp. 319-320, fn. 7, 193 Cal.Rptr. 900, 667 P.2d 704; Pacific Legal Foundation v. California Coastal Com. (1982) 33 Cal.3d 158, 167, 188 Cal.Rptr. 104, 655 P.2d 306.) "Section 1021.5 was not designed as a method for rewarding litigants motivated by their own pecuniary interests who only coincidentally protect the public interest." (Beach Colony II v. California Coastal Com. (1985) 166 Cal.App.3d 106, 114, 212 Cal.Rptr. 485.) "Instead, its purpose is to provide some incentive for the plaintiff who acts as a true private attorney general, prosecuting a lawsuit that enforces an important public right and confers a significant benefit, despite the fact that his or her own financial stake in the outcome would not by itself constitute an adequate incentive to litigate." (Satrap v. Pacific Gas & Electric Co. (1996) 42 Cal.App.4th 72, 80, 49 Cal.Rptr.2d 348.)

To illustrate, in Pacific Legal Foundation v. California Coastal Com., supra, 33 Cal.3d 158, 188 Cal.Rptr. 104, 655 P.2d 306, plaintiffs successfully challenged a condition imposed on a permit by the California Coastal Commission. The Supreme Court held that plaintiffs were not entitled to attorney fees under section 1021.5 because their lawsuit, while based on the...