BILL ANALYSIS                                                                                                                                                                                                    Ó


          |SENATE RULES COMMITTEE            |                   AB 559|
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                                 THIRD READING

          Bill No:  AB 559
          Author:   Swanson (D)
          Amended:  4/4/11 in Assembly
          Vote:     21

           SENATE JUDICIARY COMMITTEE  :  3-2, 6/14/11
          AYES:  Evans, Corbett, Leno
          NOES:  Harman, Blakeslee
          ASSEMBLY FLOOR  :  47-26, 5/26/11 - See last page for vote

           SUBJECT  :    Civil actions:  costs

           SOURCE  :     California Employment Lawyers Association

           DIGEST  :    This bill exempts civil actions brought pursuant 
          to the Fair Employment and Housing Act from the statute 
          that provides discretion to judges to determine costs, in a 
          case other than a limited civil case, if the prevailing 
          party recovers a judgment that could have been rendered in 
          a limited civil case.

           ANALYSIS  :    Existing law provides that a prevailing party 
          is entitled as a matter of right to recover costs in any 
          action or proceeding, and specifies those items allowable 
          as costs.  Existing law further provides that costs, or any 
          portion of claimed costs, shall be as determined by the 
          court, in its discretion, in a case other than a limited 
          civil case, if the prevailing party recovers a judgment 
          that could have been rendered in a limited civil case.  


                                                                AB 559

          (Code of Civil Procedure Section 1033)

          Existing law, the Fair Employment and Housing Act (FEHA), 
          provides that an employee may bring an action against an 
          employer for workplace discrimination.  (Government Code 
          Section 12900 et seq.)  Under the FEHA, a trial court has 
          discretion to award attorney's fees to the prevailing 
          party.  (Government Code Section 12905(b).)  Existing case 
          law has interpreted this to mean that a trial court should 
          ordinarily award attorney fees to a prevailing plaintiff 
          unless special circumstances would render a fee award 
          unjust.  (  Young v. Exxon Mobil Corp.  (2008) 168 Cal.App.4th 
          1467, 1474)

          This bill exempts civil actions brought pursuant to the 
          FEHA from the latter provision that provides discretion to 
          judges to determine costs, in a case other than a limited 
          civil case, if the prevailing party recovers a judgment 
          that could have been rendered in a limited civil case.

          On January 14, 2010, the California Supreme Court held in 
           Chavez v. City of Los Angeles  (2010) 47 Cal.4th 970, that a 
          trial court has discretion in a civil action brought under 
          the FEHA to deny a successful plaintiff attorney's fees 
          when the plaintiff chooses to proceed in an unlimited civil 
          jurisdiction, but recovers less than the $25,000 
          jurisdictional minimum.  This decision reversed the Court 
          of Appeal's ruling, which had reasoned that the rationale 
          for denying attorney's fees under Section 1033(a) of the 
          California Code of Civil Procedure, which was designed to 
          encourage pursuit of minor grievances in courts of limited 
          jurisdiction, is inapposite to statutory discrimination or 
          civil rights actions because "even a modest financial 
          recovery can serve to vindicate a substantial legal right." 
           (Id. at 982.)  The Court of Appeal also opined that 
          denying attorney's fees under Section 1033(a) would 
          discourage attorneys from taking meritorious cases.  (Id.)
          This bill is substantially similar to AB 2773 (Swanson, 
          2010), which was vetoed by Governor Schwarzenegger who 
          argued that it would have removed a judge's discretion and 
          encouraged frivolous lawsuits.



                                                                AB 559

          This bill, sponsored by the California Employment Lawyers 
          Association, seeks to respond to the  Chavez  decision and 
          specifies that statutory provisions that provide trial 
          courts with discretion to deny costs if the prevailing 
          party recovers a judgment that could have been rendered in 
          a limited civil case does not apply to civil actions 
          brought under the FEHA.

           Prior legislation  .  AB 2773 passed the Senate (22-12) on 
          August 26, 2010, but was vetoed by the Governor.

           Governor Schwarzenegger's Veto of AB 2773
          This bill is substantially similar to the enrolled version 
          of AB 2773 (Swanson, 2010).  In vetoing AB 2773, Governor 
          Schwarzenegger stated:  
          "This measure would require an award of attorney's fees in 
          all fair employment and housing cases even when nominal 
          damages are awarded and even if the case was improperly 
          filed in a court of unlimited jurisdiction.  While there 
          may be instances when an award of attorneys fees may be 
          proper, this measure removes all discretion from a judge 
          and encourages frivolous lawsuits."

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   
          Local:  No

           SUPPORT  :   (Verified  6/15/11)

          California Employment Lawyers Association (source)
          California Conference Board of the Amalgamated Transit 
          California Conference of Machinists
          California Labor Federation
          California Official Court Reporters Association
          California Rural Legal Assistance Foundation
          California Teamsters Public Affairs Council
          Church State Council
          Consumer Attorneys of California
          Disability Rights California
          Employment Law Center
          Engineers and Scientists of California
          Equal Rights Advocates
          International Longshoremen and Warehouse Union



                                                                AB 559

          Labor Project for Working Families
          Law Office of Mary-Alice Coleman
          Law Offices of Victor L. George
          Legal Aid Society of San Francisco
          Professional and Technical Engineers, Local 21
          SCOPE, Laborers International of North America
          UNITE HERE!
          United Food and Commercial Workers - Western States 
          Utility Workers Union of America, Local 132
          Western Center on Law and Poverty
          Women's Employment Rights Clinic of Golden Gate University 
            School of Law

           OPPOSITION  :    (Verified  6/15/11)

          California Chamber of Commerce
          Civil Justice Association of California

           ARGUMENTS IN SUPPORT  :    The author writes:

            "The reality is that limited jurisdiction case procedure 
            has significant consequences in terms of the quantity of 
            discovery the parties may conduct and may be 
            inappropriate for FEHA claims given the complexity of the 
            claim and the importance of the civil rights afforded 
            under the FEHA.  Furthermore, damages amounts in FEHA 
            claims, which often involve non-pecuniary damages, are 
            difficult to quantify and hard to predict.

            "The Legislature must step in to help ensure that 
            plaintiffs' attorneys are not discouraged from taking 
            FEHA cases, as these cases are integral to protect and 
            vindicate important civil rights.  As the California 
            Supreme Court noted in its decision, attorney fee awards 
            in FEHA actions make it easier for plaintiffs of limited 
            means to pursue meritorious claims (  Cummings v. Benco 
            Building Services  (1992) 11 Cal.App.4th 1383, 1387), are 
            intended to provide fair compensation to the attorneys 
            involved in the litigation at hand, and encourage 
            litigation of claims that are of public interest 
            (  Flannery v. Prentice  (2001) 26 Cal.4th 572, 584)."

          In support of this bill, the California Employment Lawyers 



                                                                AB 559

          Association further states:  "AB 559 will clarify that 
          Civil Procedure Code section 1033(a) does not apply to 
          actions brought under the California Fair Employment and 
          Housing Act.  Such a statutory amendment will ensure that 
          plaintiffs are not penalized for being unable to predict 
          damage awards and are allowed more extensive discovery 
          procedures to address the complex nature of claims brought 
          under the FEHA."

           ARGUMENTS IN OPPOSITION  :    The Civil Justice Association 
          of California (CJAC) writes that this bill will "undo a 
          judicial deterrent to filing frivolous lawsuits."  CJAC 
          further writes:  "CJAC believes it is appropriate for 
          judges to use their discretion to refuse to award 
          attorney's fees in cases of nominal value and therefore 
          opposes the bill.  Allowing the award of attorney's fees to 
          successful plaintiffs should not be a routine event.  While 
          our Legislature and our courts have allowed the award of 
          attorney's fees, the rationale behind such awards is to 
          compensate the attorneys for involvement in litigation that 
          somehow benefits the public.  Such awards are discretionary 
          and should remain so."  CJAC further asserts that, "limited 
          civil cases have procedural restrictions to limit the time 
          and costs of litigation.  If we allowed all cases involving 
          $5,000 in controversy to be filed and litigated as 
          unlimited civil cases, our courts would be even more 
          clogged and backlogged than they are."

           ASSEMBLY FLOOR  :  47-26, 5/26/11
          AYES:  Alejo, Allen, Ammiano, Atkins, Beall, Block, 
            Blumenfield, Bonilla, Bradford, Brownley, Butler, Charles 
            Calderon, Campos, Carter, Chesbro, Dickinson, Eng, Feuer, 
            Fong, Fuentes, Furutani, Gatto, Gordon, Hall, Hayashi, 
            Roger Hernández, Hill, Huber, Hueso, Huffman, Lara, 
            Bonnie Lowenthal, Ma, Mendoza, Mitchell, Monning, Pan, V. 
            Manuel Pérez, Portantino, Skinner, Solorio, Swanson, 
            Torres, Wieckowski, Williams, Yamada, John A. Pérez
          NOES:  Achadjian, Bill Berryhill, Conway, Cook, Donnelly, 
            Fletcher, Beth Gaines, Garrick, Grove, Hagman, Halderman, 
            Harkey, Jeffries, Knight, Logue, Mansoor, Miller, 
            Morrell, Nestande, Nielsen, Norby, Olsen, Silva, Smyth, 
            Valadao, Wagner
          NO VOTE RECORDED:  Buchanan, Cedillo, Davis, Galgiani, 



                                                                AB 559

            Gorell, Jones, Perea

          RJG:mw  6/15/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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