BILL ANALYSIS �
AB 559
Page 1
ASSEMBLY THIRD READING
AB 559 (Swanson)
As Amended April 4, 2011
Majority vote
JUDICIARY 7-2
-----------------------------------------------------------------
|Ayes:|Feuer, Atkins, Dickinson, | | |
| |Huber, Huffman, Monning, | | |
| |Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Wagner, Jones | | |
| | | | |
-----------------------------------------------------------------
SUMMARY : Revises attorney's fees awards in smaller
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 low-income victims of unlawful discrimination have fair and
equitable access to the civil justice system for claims brought
under the Fair Employment and Housing Act (FEHA) by removing a
significant barrier to securing private counsel.
In any action brought under the California Fair Employment and
Housing Act (FEHA), 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.
AB 559
Page 2
The litigation costs that the prevailing party may recover
include attorney's fees when recovery of such fees is authorized
by statute. 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
twenty-five thousand dollars ($25,000) or one defined by statute
as 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 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
Section 1033(a) of the 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." The
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-income victims 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.
As the California Supreme Court noted in its decision,
attorney's 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
AB 559
Page 3
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).
The California Chamber of Commerce (Chamber) argues that the
bill is unnecessary, would undermine judicial discretion,
eliminate the incentive to use limited civil proceedings, and
force tax payers to foot the bill for exorbitant legal fees when
public entities are involved. The Chamber "opposes legislative
attempts to carve out an entire category of claims from any
statute, particularly where there is no showing that such a bold
step is necessary to protect the rights of individuals. Doing
so creates uncertainty for parties who rely on the laws being
applied equally and fairly to all cases. ? AB 559 would expose
employers to unanticipated costs after the fact, merely because
a plaintiff happens to allege a FEHA claim."
The Civil Justice Association of California (CJAC) opposes the
bill, arguing that it "will undo a judicial deterrent to filing
frivolous lawsuits."
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334
FN: 0000258