Woosley v. State, No. B209890 (Cal. App. 4/16/2010)

• Decision Date: 16 April 2010
• Docket Number: No. B209890.,B209890.
• Court: California Court of Appeals Court of Appeals
• Parties: CHARLES PATRICK WOOSLEY, Plaintiff, Respondent, and Cross-Appellant, v. STATE OF CALIFORNIA et al., Appellants and Cross-Respondents.

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CHARLES PATRICK WOOSLEY, Plaintiff, Respondent, and Cross-Appellant, v. STATE OF CALIFORNIA et al., Appellants and Cross-Respondents.

No. B209890.

Court of Appeals of California, Second District, Division Five.

Filed April 16, 2010.

Appeal from an order of the Superior Court of Los Angeles County, No. CA00499, Elihu M. Berle, Judge. Reversed with directions.

Edmund G. Brown, Jr., Attorney General, Dane R. Gillette, Chief Assistant Attorney General, Paul D. Gifford, Senior Assistant Attorney General, Felix E. Leatherwood, W. Dean Freeman and Diane S. Shaw, Deputy Attorneys General, for Appellants and Cross-Respondents.

Patrick G. Woosley and Frear Stephen Schmid for Plaintiff, Respondent and Cross-Appellant Charles Patrick Woosley.

Jones, Bell, Abbot, Fleming & Fitzgerald, Michael J. Abbott and Craig R. Bockman for Respondent Jones, Bell, Abbot, Fleming & Fitzgerald L.L.P.

James M. Gansinger for Respondents Gansinger Firm and the Law Offices of John F. Busetti.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

WEISMAN, J.^*

I. INTRODUCTION

This appeal and cross-appeal involve attorneys' fees and costs awarded against the State of California, acting through the Department of Motor Vehicles and State Board of Equalization (hereinafter collectively referred to as "DMV") as a result of a 1978 class action challenging the assessment of vehicle license fees and use taxes collected on out-of-state vehicles. The 1978 action, which was brought by Patrick G. Woosley, on behalf of himself and others, alleged that the fees and use taxes violated the Commerce Clause of the United States Constitution (U.S. Const., art. I, § 8, cl. 3). The action further alleged violations of the equal protection clauses of the federal and state constitutions. The 1978 action was subsequently consolidated with a number of other cases.

On May 30, 2008, after almost 30 years of litigation, the trial court entered judgment in the class action and consolidated matters. The 2008 judgment included an award of over $23 million in attorneys' fees and costs under a private attorney general theory as set forth in Code of Civil Procedure¹ section 1021.5. The fees were awarded to various attorneys and law firms that had represented the class or assisted in the class action including the named plaintiff, Mr. Woosley in his capacity as an attorney.² DMV has appealed from the determination that the fees were payable under the private attorney general doctrine as opposed to being paid from a common fund. DMV also appeals the amount of the attorneys' fees and costs awarded in the final judgment. Mr. Woosley has cross-appealed from the judgment on the ground the trial court improperly reduced his lodestar hours and by only awarding him a 1.5 multiplier when class counsel received a 3.0 multiplier.

We conclude the trial court acted within its discretion to award the attorneys fees under section 1021.5 but reverse the attorney fees award and remand for further proceedings to determine the correct amount of fees that should be awarded.

II. BACKGROUND

A. The 1978 Through 1992 Litigation

As previously noted, this class action was filed in 1978. The trial court initially identified and certified two classes. The first class was a discrimination class of approximately 2.8 million people. The discrimination class was for those persons, who had from within three years prior to October 20, 1977 to the date of refund paid excess license fees or use taxes for registering vehicles that had been purchased out-of-state. The second class was identified as a "post-1976" class of about 14 million persons who since November 14, 1976 paid excess use tax on the vehicles.

In 1985, a judgment was entered in favor of the two classes. With respect to the discrimination class, the trial court determined the higher fees and use taxes violated the commerce clause of the federal Constitution and the equal protection clauses of the Constitutions of the United States and California. The trial court also concluded a second class had paid excess use taxes in violation of the Revenue and Tax Code. Based on the judgment, the trial court awarded attorney fees to: the former class counsel, Jones, Bell, Simpson and Abbott, in the amount of $1,700,000; the current class counsel, Gansinger & Pick and John F. Busetti, in the amount of $12,000,000; and Mr. Woosley in the amount of $1,000,000. The fee awards were made under the common fund principle (Serrano v. Priest (1977) 20 Cal.3d 25, 35) in light of the judgment for refunds. The 1985 judgment ordered: "That Class Counsel ... recover as and for their attorneys' fees rendered on behalf of the class, the sum of $12,000,000.00, payable out of the common fund recovered herein,...." The judgment ordered: "That representative plaintiff Charles Patrick Woosley recover as fees for services rendered as class representative the sum $1,000,000.00, payable out of the common fund recovered herein, ...."

DMV appealed the 1985 judgment on the merits and on the class certification issue. Mr. Woosley appealed from the attorney fee award. No party appealed from the portion of the judgment determining that the fees should be paid from the common fund. Nevertheless, as shown below, both reviewing courts made some determinations about the parties' rights concerning entitlement to and amounts of fees. But, and perhaps, understandably because no party raised the issue, neither reviewing court considered the source for payments (under common fund or private attorney general theories).

In 1990, a prior panel of this Division issued a majority opinion in which the 1985 judgment was affirmed in part; reversed in part and remanded. The Court of Appeal stated: "[Mr.] Woosley complains the court improperly based its fee award to him on a standard for a layman, rather than compensating him for the legal services he rendered to the class. It is important to note that the fact [Mr.] Woosley was not made co-counsel of record in this case does not automatically preclude him from receiving compensation for legal services; if he in fact rendered legal services to the class in connection with this case, he may be awarded fees reflecting the reasonable value of those services without being named attorney of record. [Citation.] We also note that [Mr.] Woosley's involvement as class representative does not preclude him from recovering fees for legal services rendered to the class. [Citations.] [¶] The record gives many indications that an award to [Mr.] Woosley for legal services might have been appropriate. [Mr.] Woosley's fee application and supporting declaration refer only to his legal work on this case. As quoted, earlier, the trial court expressly recognized that [Mr.] Woosley had `contributed both legally and factually' to the case; class counsel admitted [Mr.] Woosley's work on the case had been particularly beneficial because he is a tax specialist, and counsel for DMV expressed his awareness that [Mr.] Woosley had been acting as an attorney in the case. [¶] Yet it is unclear whether the award to [Mr.] Woosley was to compensate him for these professional services as attorney, for services as a tax specialist, for his contributions as a classic car collector, or merely for the inconveniences he suffered as class representative. The court's assurance to him that he would be `perfectly, totally protected' regarding the matter of compensation provides us with no insight, either, as to the specific services the court's award encompassed. The record is inadequate to permit meaningful appellate review of the court's exercise of discretion as to [Mr.] Woosley's entitlement to an award for legal services rendered to the class. We note the original trial judge retired shortly after the entry of judgment in this action. Therefore we remand not merely to obtain an adequate record, but for the new trial judge to independently exercise his discretion on the record as to whether [Mr.] Woosley is entitled to an award for his legal services. [¶] This brings us to an additional contention in [Mr.] Woosley's cross-appeal, that the trial court's award to him is not supported by a record showing that it was calculated in accordance with the lodestar adjustment method required by Serrano III, supra.... [¶] To the extent the trial court determines on remand that [Mr.] Woosley is entitled to fees based on his legal services, the record must reflect the application of the lodestar adjustment method required under Serrano III for the calculation of the amount of the award. Proper analysis will require the court to first make a lodestar determination of time spent and reasonable hourly compensation for [Mr.] Woosley, and then to decide on an appropriate multiplier based on factors which include the novelty and difficulty of the questions involved in the case, the skill displayed in presenting them, and the fact that more than one law firm contributed in some share to the success of the litigation. (Serrano III, supra, 20 Cal.3d at p. 48-49.) [¶] Evaluation of these factors for [Mr.] Woosley's legal contribution to the case may necessitate an adjustment in the valuation of other counsel's work on the case in order that the total fees awarded in the case remain reasonable in light of the Serrano III factors. Thus, if the court decides that [Mr.] Woosley should be compensated for his legal services in this case, and if it finds that valuation of all fees are interdependent, then its determination of the amount of [Mr.] Woosley's fees must also involve an examination and perhaps a redetermination of the fees awarded to all other counsel for the class. [Citation.] Any redetermination must, of course, include a proper calculation on the record of the lodestar and multiplier. If the trial court, in its exercise of discretion, determines that [Mr.] Woosley is not entitled to attorney's fees, then the award of attorneys' fees to current and former class counsel is affirmed. [¶] Current counsel...