BILL ANALYSIS Ó
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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.
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(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.
Background
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.
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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
Union
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
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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
Conference
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
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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,
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Gorell, Jones, Perea
RJG:mw 6/15/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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