Roa v. Lodi Medical Group, Inc., S.F. 24435

• Citation: 695 P.2d 164,37 Cal.3d 920,211 Cal.Rptr. 77
• Decision Date: 07 February 1985
• Docket Number: S.F. 24435
• Court: United States State Supreme Court (California)
• Parties: , 695 P.2d 164, 53 USLW 2410 Frank ROA, Jr., et al., Plaintiffs and Appellants, v. LODI MEDICAL GROUP, INC., et al., Defendants and Respondents.

Page 77

211 Cal.Rptr. 77

37 Cal.3d 920, 695 P.2d 164, 53 USLW 2410

Frank ROA, Jr., et al., Plaintiffs and Appellants, v. LODI MEDICAL GROUP, INC., et al., Defendants and Respondents.

S.F. 24435.

Supreme Court of California In Bank.

Feb. 7, 1985.

Modification of Majority and Dissenting Opinions May 8, 1985.

Rehearing Denied May 8, 1985.

Miller, Katz, Harlem & Dixon, Robert A. Harlem and Richard L. Katz, San Francisco, for plaintiffs and appellants.

David M. Harney, Michael F. Dillingham, Los Angeles, Arne Werchick, Sausalito, Wylie A. Aitken, Santa Ana, Richard D. Bridgman, Oakland, Glen T. Bashore, North Fork, Edwin Train Caldwell, Robert E. Cartwright, San Francisco, Victoria J. De Goff, Berkeley, Sanford Gage, Beverly Hills, John Gardenal, San Francisco, Ian Herzog, G. Dana Hobart, Los Angeles, Harvey R. Levine, San Francisco, Edward I. Pollock, Los Angeles, Jerome B. Falk, Jr., Dirk M. Schenkkan and Howard, Prim, Rice, Nemerovski, Canady & Pollak, San Francisco, amici curiae, for plaintiffs and appellants.

Nat Brown, Brown, Lane, Calone & Duncan, Stockton, defendants and respondents.

Musick, Peeler & Garrett, James E. Ludlam, Los Angeles, Horvitz & Levy, Ellis J. Horvitz, Kent L. Richland, John L. Klein, Encino, Hassard, Bonnington, Rogers & Huber, David E. Willett, Maureen E. Corcoran and Fred J. Hiestand, San Francisco, amici curiae, for defendants and respondents.

KAUS, Justice.

This is the third in a series of cases involving the constitutionality of various provisions of the Medical Injury Compensation Reform Act of 1975 (MICRA). In American Bank & Trust Co. v. Community Hospital (1984) 36 Cal.3d 359, 204 Cal.Rptr. 671, 683 P.2d 670, we upheld a provision of the act which authorizes the periodic payment of damages in medical malpractice actions. (Code Civ.Proc., § 667.7.) In Barme v. Wood (1984) 37 Cal.3d 174, 207 Cal.Rptr. 816, 689 P.2d 446, we concluded that a provision of the act barring a "collateral source" from obtaining reimbursement from a medical malpractice defendant was also constitutional. (Civ.Code, § 3333.1, subd. (b).) In this case we address a challenge to Business and Professions Code section 6146, which places limits on the amount of fees an attorney may obtain in a medical malpractice action when he represents a party on a contingency fee basis. ¹ As in American Bank and Barme, while we express no view as to the wisdom of the measure, we conclude that the legislation is constitutional.

I

This action was brought by Frank Roa, Jr., individually, and by Yvonne Jean Roa, individually and as guardian ad litem for their minor son, Frank Joseph Roa, for injuries allegedly suffered as a result of negligent treatment and care during the child's birth. The complaint named the Lodi Medical Group, Inc., Dr. Gordon B. Roget, the Lodi Community Hospital and numerous Does as defendants.

After some discovery, plaintiffs negotiated a settlement with two of the defendants, the Lodi Medical Group, Inc., and Dr. Roget. The agreement provided for payment of $495,000 to the minor and $5,000 to the parents. Pursuant to Probate Code section 3500, ² plaintiffs sought court approval of the settlement, advising the court that the $500,000 represented the total policy limits of these two defendants' insurance coverage. The court found the settlement reasonable and approved it.

At the same time, pursuant to Probate Code section 3601, ³ plaintiffs requested that the court approve the payment of fees to their attorneys from the net proceeds of the settlement. Plaintiffs informed the court that they were aware that the maximum fee that could be awarded under the schedule of contingency fees set forth in section 6146 would amount to about $90,800. They explained, however, that they believed that under their contingency fee arrangement, the attorneys were entitled to 25 percent of the minor's net recovery--about $122,800--and asked the court to award their counsel this greater amount. Accompanying this request, plaintiffs' attorneys filed points and authorities asserting that section 6146 was unconstitutional on due process, equal protection and separation of powers grounds.

The trial court found (1) that plaintiffs and their attorneys had entered into an understanding that the attorney fee would be 25 percent of the net recovery and (2) that the $122,800 fee which that percentage would yield "is a fair and reasonable amount for attorneys' fees in this case and is in no way disproportionate to the quality or quantity of the legal services provided to the plaintiffs in this case." The court also noted that "were it not for the existence of Business and Professions Code [section] 6146, the amount of attorneys' fees requested" by plaintiffs would be awarded. The court, however, rejected the constitutional challenge to section 6146 and concluded that it was compelled to award fees in accordance with the statutory limitations. Accordingly, it approved a fee of $90,800.

Plaintiffs appeal from the attorney fee order, reasserting their constitutional objections to section 6146. ⁴

II

Plaintiffs, and amici on their behalf, contend that section 6146 is unconstitutional as (1) a denial of due process, (2) a violation of equal protection, and (3) a violation of the separation of powers doctrine. We address each of the contentions in turn.

A

Plaintiffs' due process argument rests on the claim that the statute impermissibly infringes on the right of medical malpractice victims to retain counsel in malpractice actions. Although the right to be represented by retained counsel in civil actions is not expressly enumerated in the federal or state Constitution, our cases have long recognized that the constitutional due process guarantee does embrace such a right. (See, e.g., Powell v. Alabama (1932) 287 U.S. 45, 68-69, 53 S.Ct. 55, 63-64, 77 L.Ed. 158; Mendoza v. Small Claims Court (1958) 49 Cal.2d 668, 673, 321 P.2d 9.) Section 6146, however, does not in any way abrogate the right to retain counsel, but simply limits the compensation that an attorney may obtain when he represents an injured party under a contingency fee arrangement.

Statutory limits on attorney fees are not at all uncommon, either in California or throughout the country generally. In this state, attorney fees have long been legislatively regulated both in workers' compensation proceedings (Lab.Code, § 4906) and in probate matters. (Prob.Code, §§ 910, 901.) Some states have adopted maximum fee schedules which apply to all personal-injury contingency fee arrangements (see, e.g., American Trial Lawyers v. New Jersey Supreme Ct. (1974) 66 N.J. 258, 330 A.2d 350; Gair v. Peck (1959) 6 N.Y.2d 97, 188 N.Y.S.2d 491, 160 N.E.2d 43, app. dismissed (1960) 361 U.S. 374, 80 S.Ct. 401, 4 L.Ed.2d 380); others have enacted limits which, like section 6146, apply only in a specific area, such as medical malpractice. (See, e.g., Johnson v. St. Vincent Hospital, Inc. (1980) 273 Ind. 374, 404 N.E.2d 585, 602-603; Prendergast v. Nelson (1977) 199 Neb. 97, 256 N.W.2d 657, 669-670; DiFilippo v. Beck (D.Del.1981) 520 F.Supp. 1009, 1016.) Congress has passed numerous statutes limiting the fees that an attorney may obtain in representing claimants in a variety of settings. (See, e.g., 28 U.S.C. § 2678 [limit on attorney fee in actions under the Federal Tort Claims Act]; 42 U.S.C. § 406(b)(1) [limit on attorney fee in actions under the Social Security Act]; 38 U.S.C. § 3404 [limit on fee for claims under the Veterans Benefit Act].)

The validity of such legislative regulation of attorney fees is well established. Over 60 years ago, in Calhoun v. Massie (1920) 253 U.S. 170, 40 S.Ct. 474, 64 L.Ed. 843, an attorney who had represented successful claimants in an action against the United States raised a similar due process challenge to a provision of federal law which limited contingent fee recoveries to 20 percent of the amount recovered. In rejecting the challenge, Justice Brandeis explained: "For nearly three-quarters of a century Congress has undertaken to control in some measure the conditions under which claims against the Government may be prosecuted. Its purpose has been in part to protect just claimants from extortion or improvident bargains and in part to protect the Treasury from frauds and imposition. [Citation.] While recognizing the common need for the service of agents and attorneys in the presentation of such claims and that parties would often be denied the opportunity of securing such services if contingent fees were prohibited [citation], Congress has manifested its belief that the causes which gave rise to laws against champerty and maintenance are persistent. By the enactment, from time to time, of laws prohibiting the assignment of claims and placing limitations upon the fees properly chargeable for services, Congress has sought both to prevent the stirring up of unjust claims against the Government and to reduce the temptation to adopt improper methods of prosecution which contracts for large fees contingent upon success have sometimes been supposed to encourage. The constitutionality of such legislation ... resembling in its nature the exercise of the police power, has long been settled. [Citations.]" (Italics added, fn. omitted.) (253 U.S. at pp. 173-174, 40 S.Ct. at pp. 474-475; see, e.g., Frisbie v. United States (1895) 157 U.S. 160, 165-166, 15 S.Ct. 586, 588-589, 39 L.Ed. 657; Yeiser v. Dysart (1925) 267 U.S. 540, 541, 45 S.Ct. 399, 69 L.Ed.2d 775; Margolin v. United States (1925) 269 U.S. 93, 102, 46 S.Ct. 64, 65, 70 L.Ed. 176, Estate of Goodrich (1907) 6 Cal.App. 730, 732, 93 P. 121.) These decisions establish that--contrary to amici's contentions--legislative ceilings on attorney fees are in no respect "constitutionally suspect" or subject to "strict" judicial scrutiny. ⁵ Plaintiffs contend, however, that even if statutory limitations on attorney fees are generally permissible, the limits established by section 6146 are invalid because...