BILL ANALYSIS
AB 2773
Page 1
ASSEMBLY THIRD READING
AB 2773 (Swanson)
As Amended April 8, 2010
Majority vote
JUDICIARY 7-3
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|Ayes:|Feuer, Brownley, Evans, | | |
| |Jones, Monning, Nava, | | |
| |Skinner | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Tran, Hagman, Knight | | |
| | | | |
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SUMMARY : Revises attorney's fees awards in small employment
discrimination cases. Specifically, this bill exempts cases
brought under the Fair Employment and Housing Act (FEHA) from
the rule giving discretion to judges to deny fees 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.
FISCAL EFFECT : None
COMMENTS : The author states that this bill will help ensure
that California workers have fair and equitable access to the
civil justice system for claims brought under FEHA by removing a
significant barrier to securing private counsel for lower wage
workers.
The sponsor, California Employment Lawyers Association, argues
that this bill will ensure that plaintiffs are not punished 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. Supporters note that this
proposal would still leave the trial court with broad authority
under Government Code Section 12965 to determine the amount of
reasonable attorney's fees, and the court may, if appropriate,
reduce a fee award if a plaintiff obtains only limited success,
so long as the claims on which the plaintiff prevails are
distinct from and unrelated to the unsuccessful claims. (Harman
v. City and County of San Francisco (2006) 136 Cal. App.4th
AB 2773
Page 2
1279, 1307, 39 Cal.Rptr.3d 589; Greene v. Dillingham
Construction N.A., Inc., supra, 101 Cal.App.4th at p. 423, 124
Cal.Rptr.2d 250.)
In any action brought under the California Fair Employment and
Housing Act (FEHA) (Government Code Section 12900 et seq.),
Government Code Section 12965(b) grants the trial court
discretion to award attorney's fees to a prevailing party. This
statute has been interpreted to mean that in a FEHA action a
trial court should ordinarily award attorney's 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; Steele v. Jensen Instrument Co. (1997)
59 Cal.App.4th 326, 331.)
Under existing law, a prevailing party is generally entitled as
a matter of right to recover costs in any action or proceeding
(Code of Civil Procedure Section 1032(b)). The litigation costs
that the prevailing party may recover include attorney's fees
when recovery of such fees is authorized by statute (Id.,
Section 1033.5(a)(10)(B)). But when "the prevailing party
recovers a judgment that could have been rendered in a limited
civil case," and the action was not brought as a limited civil
case, Code of Civil Procedure Section 1033(a) states that "costs
or any portion of claimed costs shall be as determined by the
court in its discretion . . . ." A limited civil case is one in
which the plaintiff believes the amount in controversy does not
exceed $25,000 or one defined by statute as a limited civil case
(Code of Civil Procedure Section 86.)
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 FEHA case to deny a successful plaintiff his
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
reasoned that the rationale for denying attorney's fees under
California Code of Civil Procedure Section 1033(a), 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." The
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Court of Appeal also opined that denying attorney's fees under
Section 1033(a) would discourage attorneys from taking
meritorious cases.
The decision unfairly penalizes lower-wage workers and deters
enforcement actions, supporters state, because damages amounts
in FEHA claims, which often involve non-pecuniary damages, are
difficult to quantify and hard to predict. They contend that
the Legislature must step in to help ensure that plaintiffs'
attorneys are not discouraged from taking FEHA cases because
these cases are integral to protect and vindicate important
civil rights.
The Civil Justice Association of California (CJAC) opposes the
bill, arguing that it "will undo a judicial deterrent to filing
frivolous lawsuits." CJAC "believes it is appropriate for
judges to use their discretion to refuse to award attorney's
fees in case 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."
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334
FN: 0004138