Government Liability Update

Court Considering Whether to Award Attorney Fees under 42 U.S.C. Section 1988 May Consider Degree of Success in Settlements As Well As in Litigation

In Bravo v. City of Santa Maria, published January 12, 2016, the 9th Circuit affirmed in part and reversed in part a district court's award of attorney fees and costs in a 42 U.S.C. section 1983 case.  The plaintiffs settled with one group of defendants (the city whose police carried out a search of their home) for $360,000.  Their claims against another group of defendants (the police who sought the warrant) went to trial, resulting in a jury verdict of $5,000.  In determining the degree of success the plaintiffs achieved, the district court considered both the amount obtained at trial and the amount obtained through settlement, and awarded fees of over $1 million.  The 9th Circuit affirmed.  In an issue of first impression, it held that a court may consider success obtained through both settlement and trial in determining a party's degree of success for 42 U.S.C. section 1988 fee award purposes.

The 9th Circuit reversed the district court's cost award, however.  The district court refused to offset the costs awarded against the defendants who lost at trial with the costs already reimbursed by the settling defendants.  In another issue of first impression, the 9th Circuit held that such an offset is appropriate.

Plaintiff Who Sought Policy Change, Obtained Voluntary Compliance, and Received Nominal Damages Is Entitled to Fees under 42 U.S.C. Section 1988

In Klein v. City of Laguna Beach, published January 14, 2016, the 9th Circuit reversed an order denying the plaintiff an attorney fee award under 42 U.S.C. section 1988.  Plaintiff sued the city under 42 U.S.C. section 1983 and California's Bane Act in an attempt to invalidate aspects of city ordinances prohibiting use of sound-amplification devices on city sidewalks.  The city eventually amended its ordinances, and the plaintiff obtained nominal damages on his federal cause of action.  He lost on the state cause of action.  The district court denied him attorney fees under Farrar v. Hobby (2002) 506 U.S. 103, which holds that where a plaintiff seeks a large compensatory damages award but receives only nominal damages, the court may deny him attorney fees under section 1988.

The 9th Circuit held that Farrar does not apply where the plaintiff's main goal is not a large compensatory damages award, but a change in policy, and the plaintiff obtains that goal.  Buckhannon Board and Care Home, Inc. v. West Virginia Department of Health & Human Resources (2001) 532 U.S. 598, which bars attorney fees under section 1988 where the lawsuit simply brings about a voluntary change in the defendant's behavior, did not apply, because the plaintiff received nominal damages in addition to voluntary compliance.

The 9th Circuit affirmed, however, the district court's ruling that the plaintiff was not entitled to fees under California's attorney general statute.  The plaintiff lost on his California law claims, and success under his federal claims entitled him to fees only under the federal statute.

Under California Public Records Act, Person May Seek Production of Documents Person Already Has; Public Interest in Response to Whistleblower Complaint Outweighs Privacy Rights in Records

In Caldecott v. Superior Court (Newport-Mesa School Dist.), published December 21, 2015, the Fourth District Court of Appeal, Division 3, issued a writ reversing a trial court's decision denying production of documents under the California Public Records Act.  The petitioner was the former executive director of human resources for the real party school district.  While he held that position, the petitioner filed a complaint against the district superintendent.  The petitioner alleged that the complaint alleged that the superintendent created a hostile work environment, and also alleged improprieties with money.  The district alleged that the complaint discussed only personnel matters. The school board responded in writing that it would take no action on the complaint.  Shortly afterward, the superintendent terminated the petitioner's employment, and the school board approved the action.  The petitioner sought production of the documents under the CPRA.   The trial court denied the petitioner's writ petition, on the ground that the petitioner already had the documents.

The appellate court held that the fact the petitioner already had the documents was not a ground for denying the request.  The motive of a person requesting documents under the CPRA is irrelevant.  Further, the petitioner sought the documents so that he could disseminate them without concern that the district would object.  The appellate court ruled that the documents were personnel documents, requiring the court to balance the privacy interest in the documents against the public interest in their disclosure.  Since the documents concerned allegations of conduct by a high-ranking official, the appellate court (after an in camera review) determined that the public interest in them outweighed privacy.  The court overruled the official information privilege objection to their production, ruling that production would not affect internal deliberation.  It directed the trial court, on remand, to review the documents for attorney-client privileged matters, which would not be subject to production.  It awarded the petitioner his attorney fees.

Court Awarding Fees under 42 U.S.C. Section 1988 Must Explain Substantial Reduction of Claimed Fees; Settlement Permitting Fee Award under Section 1988 Does Not Permit Fee Award Under a Different Statute

In Kerkeles v. City of San Jose, published December 18, 2015, the Sixth District Court of Appeal reversed a trial court's decision that effectively reduced by more than 80% a fee award under 42 U.S.C. section 1988.  The parties had settled a civil rights decision.  The settlement agreement provided that plaintiff could seek in court a fee award under 42 U.S.C. section 1988.  The fee motion sought over $2 million, including a multiplier to the lodestar amount under the California Private Attorney General statute, Code of Civil Procedure section 1021.5.  The trial court's order deemed the hours expended excessive.  Yet the ultimate order did not reduce the number of hours used in the lodestar calculation.  Instead, it reduced the hourly fees of the counsel used in the lodestar calculation, and then reduced the total lodestar by half.  It also declined to award fees under section 1021.5.

 

The appellate court agreed that the plaintiff was not entitled to fees under section 1021.5, since the settlement agreement specified that plaintiff was entitled to fees under 42 U.S.C. section 1988.  It therefore applied only the standards for attorney fees under section 1988.  Under that statute, reduction of claimed attorney fees that are more than a "haircut" require an explanation of the reductions by the trial court.  Because the fee order here did not provide a sufficient explanation, the appellate court remanded the fee award to the trial court.

Municipality That Confesses Error in Response to Petition for Writ of Mandate May Be Deemed "Opposing Party" under Private Attorney General Statute

In Animal Protection League v. City of San Diego, published May 27, 2015, the Fourth District Court of Appeal, Division 1, affirmed (with modifications)  a trial court decision awarding petitioners for a writ of mandate attorney fees under Code of Civil Procedure section 1021.5, the Private Attorney General Statute, against the city appellant.  The petitioners petitioned the trial court for a writ of mandate challenging a city planning commission decision denying a permit.  The city filed an answer in which it confessed error and conceded that the planning commission erred in denying the permit.  The answer stated that it did not oppose lawful writ relief.  When the petitioners moved for entry of judgment, the city filed a nonopposition to the motion.  

Section 1021.5 provides that a court may award attorneys fees to a successful against "one or more opposing parties" in an action that has resulted in the enforcement of an important right affecting the public interest.  Interpreting the statute de novo, the appellate court concluded that a municipality that does not contest liability may nevertheless be an "opposing party," defining "opposing party" as the party against whom the suit is brought.  Since, under the catalyst theory, private attorney general fees may be awarded even when litigation does not result in a judicial resolution if the defendant changes its behavior because of the litigation, fees should be awarded when an entity confesses error in response to litigation.

CCP 1038 Sanctions Cannot Be Awarded Against Attorneys, but Can Be Granted by Different Judge Than the One Who Granted Summary Judgment

In Suarez v. City of Corona, published August 29, 2014, the Fourth District Court of Appeal, Division 1, reversed in part and affirmed in part an award of defense-fee sanctions under Code of Civil Procedure section 1038.  The plaintiff and his counsel maintained an action against the defendant city arising out of the explosion of a compressed natural gas tank in a van in which he rode, while the tank was being filled at a city-owned filling station.  He contended that the city maintained a dangerous condition of public property.  Discovery turned up no evidence of a dangerous condition, as well as evidence that factors unrelated to the city caused the explosion.  The plaintiff rejected demands to dismiss the city, or to provide a theory of liability against the city.  The city won summary judgment.  It then moved for defense fees under section 1038.  Although the judge who granted summary judgment was available, a commissioner heard the motion.  Neither party objected to the commissioner presiding over the motion.  The commissioner awarded defense fees of over $100,000 against the plaintiff and his counsel.

The appellate court reversed the award of fees against the plaintiff's counsel.  It agreed with the recent decision in Settle v. State of California (2014) 228 Cal.App.4th 215 that section 1038 cannot be interpreted to provide for awards of attorney fees against counsel.  It upheld the award against the plaintiff in full.  It rejected the argument that the commissioner had no jurisdiction to hear the motion.  Although a section 1038 motion must be heard by the same judge who granted summary judgment unless that judge is available, parties may stipulate to a commissioner hearing a matter, and the stipulation may be inferred form counsel's conduct.  Plaintiff's counsel could not wait until after the commissioner ruled against him to object to the commissioner hearing the matter.  The appellate court, reviewing the finding of lack of reasonable cause de novo, agreed with the commissioner's finding that the suit against the city lacked reasonable cause.  It rejected the argument that to provide due process the motion for sanctions had to be noticed to be heard at the same time as the summary judgment motion.  The motion need only be filed at the earliest practical time before the entry of judgment.

Section 1038 Sanctions May Not Be Awarded against a Party's Attorney

In Settle v. State of California, published July 23, 2014, the Second District Court of Appeal, Division 8, reversed an award of defense fees and costs to the defendant state, under Code of Civil Procedure section 1038, against both the plaintiff and the plaintiff's attorney.  The attorney appealed the order, on the ground that section 1038 does not provide for awards of fees or costs against a party's attorney.  The appellate court agreed.  Section 1038, a statutory substitute for malicious prosecution actions against parties who sue public entities, permits an award against a "plaintiff, petitioner, cross-complainant, or intervenor" who files suit without both reasonable cause and a good faith belief that the complaint is warranted.  The statute's list of persons against whom fees and costs may be awarded does not include attorneys.  The court cannot rewrite the statute to insert language permitting awards against attorneys.  A previous case that upheld a fee award against an attorney, Carroll v. State of California, did not analyze whether subjecting attorneys to fees was proper, and so does not stand for that proposition.  Other statutes that provide for fee awards against counsel are numerous and explicit.  Absent specific language in the statute permitting fee awards against attorneys, such awards are not permitted.

Sheriff Not Entitled to Summary Judgment on Discrimination Claim of Deputies Regarding Same-Sex Supervision of Female Jail Inmates

In Anderson v. City and County of San Francisco, published July 2, 2014, the 9th Circuit Court of Appeals reversed in part and affirmed in part summary judgment granted to the defendant county in a sex-discrimination lawsuit brought under Title VII and FEHA by a group of deputies who worked at county jails. In 2006, the then-sheriff adopted a policy prohibiting male deputies from supervising female inmates in the housing units of the jails.  The sheriff adopted the policy to protect the female inmates from sexual misconduct by male deputies, to maintain security in light of female inmates' ability to manipulate male deputies and the deputies' fear of false allegations of sexual misconduct, to protect the inmates' privacy, and to promote rehabilitation of the inmates. The county asserted that the policy was permissible under sex-discrimination statutes as a bona fide occupational qualification, or BFOQ.

The district court ruled that issues of fact barred summary judgment.  In granting summary judgment, the district court relied in part on deference to the sheriff's discretion.  The 9th Circuit ruled that although such deference is a legitimate consideration, genuine issues of fact existed on whether the sheriff made a sufficiently reasoned and informed decision.  Summary judgment therefore could not be based on that deference.  The court further ruled that genuine issues of fact existed on whether gender was a BFOQ for supervising the female inmates.  To establish a BFOQ, the county had to establish that the job qualification was reasonably necessary to the essence of its business, and that sex is a legitimate proxy for the qualification, because the county had a substantial basis for believing that all or nearly all men lack the qualification or that it was impossible or highly impractical to individually test for that qualification.  Although all of the reasons the sheriff gave for the possibility were reasonably necessary to the essence of running the jail, issues of fact existed on whether all or nearly all men lacked the qualifications, or that was impossible or highly impractical to test them individually.

The court upheld the district court's award of only a fraction of attorney fees claimed by some plaintiffs who had settled; and affirmed summary judgment as to one plaintiff's retaliation claims, since the county had shown that there was no genuine issue of fact on his claims.

The Rules for Determining the Successful Party under the Private Attorney General Fee Statute Governing Awards of Fees under the California Public Records Act

In Garcia v. Governing Board of Bellflower Unified School Dist., published October 24, 2013, the Second District Court of Appeal, Division Three, affirmed an award of attorney fees to a petitioner who obtained a writ of mandate from the superior court compelling the a school district to produce records under a California Public Records Act (Gov. Code, section 6250 et seq.) request.  The court ordered the district to produce documents responsive to three of the petitioner's requests, deniedthe petition as to three requests, and ruled that two of the requests had been resolved and were no longer at issue.  The court determined that under the Act's fee statute, Government Code section 6259, the petitioner was the prevailing party and entitled to her fees.  The appellate court affirmed.  Although section 6259 does not define the term "prevailing party," the appellate court held that the term was synonymous with "successful party," the term used in the Private Attorney General fee statute, Code of Civil Procedure section 1021.5.  It therefore held that the same definition applies:  a party prevails if it succeeds on any significant issue in the petition or lawsuit enforcing the Act, and achieves some of the benefit sought.  The trial court acted within its discretion in determining that the petition was the prevailing party under this definition.

Public Entity May Not Contract to Indemnify Employee against Suit Brought on Entity's Behalf against Employee for Alleged Criminal Conduct Committed in Bad Faith and with Malice

In City of Bell v. Superior Court (Rizzo), published October 4, 2013, the Second District Court of Appeal, Division Three, addressed whether Government Code section 996.6 permits public entities to enter into defense and indemnity contracts with its employees that would provide a defense against the city's own lawsuit (or a lawsuit brought by the Attorney General on the city's behalf) against the employee for alleged corruption.  The court answered the question in the negative.  Government Code section 995.8 prevents a public entity from providing its employee a defense to a criminal action unless the public entity determines that the defense would be in the best interests of the public entity and that the public employee had acted in good faith and without malice.  Section 996.6 provides that an employee's or former employee's rights under the Government Code are in addition to, and not in lieu of, any rights he may have under a contract or other enactment providing for his defense.  The court concluded that under this statute, if an employee has a contractual right to defense (such as his own insurance policy), the entity cannot escape a statutory duty to defend him on the ground that the employee has another source of defense.  The statute does not permit the public entity to enter into a defense or indemnity contract that would exceed the entity's statutory powers.  Since under section 995.8 the entity has no power to contract to defend or indemnify an employee it is suing (or is sued on the entity's behalf) for corruption, section 996.6 does not permit it to do so.