BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 2773|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 2773
Author: Swanson (D)
Amended: 4/8/10 in Assembly
Vote: 21
SENATE JUDICIARY COMMITTEE : 3-1, 6/29/10
AYES: Corbett, Hancock, Leno
NOES: Harman
NO VOTE RECORDED: Walters
ASSEMBLY FLOOR : 46-28, 6/1/10 - 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
CONTINUED
AB 2773
Page
2
that could have been rendered in a limited civil case.
(Code of Civil Procedures Section 1033.)
This bill exempts civil actions brought pursuant to the
Fair Employment and Housing Act (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
FEHA to deny a successful plaintiff attorney 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 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 fees under Section 1033(a) would
discourage attorneys from taking meritorious cases. (Id.)
This bill has been brought in response 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/1/10)
AB 2773
Page
3
California Employment Lawyers Association (source)
California Labor Federation
California Women's Law Center
Consumer Attorneys of California
Equal Rights Advocates
Legal Aid Society - Employment Law Center
OPPOSITION : (Verified 7/1/10)
California Chamber of Commerce
California Employment Law Council
Civil Justice Association of California
ARGUMENTS IN SUPPORT : The author's office states, "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
Association further states, "[The Chavez ] ruling has the
effect of closing the courthouse doors to employees in low
wage industries who suffer discrimination or retaliation
but who are unlikely to be able to establish economic
damages sufficient for an attorney to take their cases on a
contingency fee basis. After Chavez , an attorney taking
the case of a low income employee would have to decide
whether to file the claim in a court of limited
jurisdiction -- which might protect a fee interest, but
AB 2773
Page
4
which drives the claim into a forum which lacks the tools
to actually expose and remedy civil rights violations -- or
to file the claim in Superior Court ? which places the fee
completely at risk should a judge or jury award a low-wage
worker less than $25,000 in damages. Civil rights
enforcement in California should not have to depend upon
this type of risk calculus (emphasis omitted)."
ARGUMENTS IN OPPOSITION : 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 :
AYES: Ammiano, Arambula, Bass, Beall, Block, Blumenfield,
Bradford, Brownley, Charles Calderon, Carter, Chesbro,
Coto, Davis, De La Torre, De Leon, Eng, Evans, Feuer,
Fong, Fuentes, Furutani, Hall, Hayashi, Hernandez, Hill,
Huber, Huffman, Jones, Lieu, Bonnie Lowenthal, Ma,
Mendoza, Monning, Nava, Portantino, Ruskin, Salas,
Saldana, Skinner, Solorio, Swanson, Torlakson, Torres,
Torrico, Yamada, John A. Perez
NOES: Adams, Anderson, Bill Berryhill, Blakeslee,
Caballero, Conway, Cook, DeVore, Emmerson, Fletcher,
Fuller, Gaines, Garrick, Gilmore, Hagman, Harkey,
Jeffries, Knight, Logue, Miller, Nestande, Niello,
Nielsen, Norby, Silva, Smyth, Tran, Villines
NO VOTE RECORDED: Tom Berryhill, Buchanan, Galgiani, V.
AB 2773
Page
5
Manuel Perez, Audra Strickland, Vacancy
RJG:do 7/1/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****