BILL ANALYSIS �
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 559 (Swanson)
As Amended April 4, 2011
Hearing Date: June 14, 2011
Fiscal: No
Urgency: No
TW
SUBJECT
Civil Actions: Costs
DESCRIPTION
This bill would exempt civil actions brought pursuant to the
Fair Employment and Housing Act (FEHA) 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.
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),
(more)
AB 559 (Swanson)
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which was vetoed by Governor Schwarzenegger who argued that it
would have removed a judge's discretion and encouraged frivolous
lawsuits.
This bill, sponsored by the California Employment Lawyers
Association, seeks to respond to the Chavez decision and would
specify 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.
CHANGES TO EXISTING LAW
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. (Code Civ. Proc. Sec. 1033.)
Existing law , the FEHA, provides that an employee may bring an
action against an employer for workplace discrimination. (Gov.
Code Sec. 12900 et seq.) Under the FEHA, a trial court has
discretion to award attorney's fees to the prevailing party.
(Gov. Code Sec. 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 would exempt 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.
COMMENT
1. Stated need for the bill
The author writes:
The reality is that limited jurisdiction case procedure has
significant consequences in terms of the quantity of discovery
AB 559 (Swanson)
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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:
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.
2.Distinction between a limited and unlimited civil case
As a general rule, a limited civil case is one that, before the
unification of the municipal and superior courts, would have
been within the jurisdiction of a municipal court. Actions may
be brought as limited civil cases when the amount in controversy
does not exceed $25,000. (Code Civ. Proc. Secs. 85-86.)
Limited civil cases are subject to specified procedural
restrictions that are intended to control the cost of
litigation. (Code Civ. Proc. Secs. 92-98.) This includes
limitations on discovery a party may conduct. (Code Civ. Proc.
Sec. 94.) Discovery is part of the pre-trial litigation process
during which each party requests relevant information and
documents from the other side in an attempt to ascertain
pertinent facts. Generally discovery devices include
depositions, interrogatories, requests for admissions, document
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production requests, and requests for inspection. In a limited
civil action, discovery is typically limited to one deposition
and a combined maximum of 35 interrogatories, document requests,
or requests for admission. This is in contrast to the unlimited
discovery parties generally have in unlimited civil actions,
which can play a critical role in exposing evidence of unlawful
conduct.
3.Implications of Chavez v. City of Los Angeles
As previously stated, the Chavez Court interpreted Code of Civil
Procedure Section 1033 as providing the trial court with
discretion to deny, in whole or in part, a prevailing
plaintiff's recovery of litigation costs when the plaintiff
obtains a judgment for money damages ($25,000 or less) in a FEHA
case that could have been recovered in a limited civil case, but
the case was instead brought as an unlimited civil case.
On February 23, 2010, this Committee held a joint oversight
hearing with the Assembly Judiciary Committee entitled "Fair
Employment and Housing 50 Years After the FEHA: Where do we go
from here?" The first panel of the hearing featured testimony
by Dr. Gary Blasi and Joseph W. Doherty, who presented a
comprehensive study of employment discrimination enforcement
recently published by the UCLA/Rand Center for Law & Public
Policy. (G. Blasi & J. Doherty, California Employment
Discrimination Law and Its Enforcement: The Fair Employment and
Housing Act at 50, 2010, available at
www.law.ucla.edu/UCLARAND .) The study contained numerous
findings and recommendations on how to improve current
enforcement. Among other things, the study highlighted that
lower-wage workers have a harder time securing private counsel
who operate on contingency fees, and thus are less likely to be
able to access the civil justice system.
The report further states:
The barrier to private counsel has been raised even higher
very recently. The California Supreme Court held in Chavez v.
City of Los Angeles (2010 WL 114941, January 14, 2010) that in
FEHA cases that might have been brought in a limited
jurisdiction Superior Court but were litigated to a verdict of
less than the $25,000 in a general jurisdiction Superior
Court, the court may deny attorneys' fees to the prevailing
plaintiff. Thus any attorney who considers accepting a case
that may result in a verdict under the jurisdictional amount
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risks being paid nothing at all, even if he or she prevails at
trial, based on his or her inability to predict a jury
verdict. Although most plaintiffs' lawyers were already
reluctant to accept smaller cases, their disincentive to do so
is now increased. (FEHA Study Executive Summary, page 64.)
This bill, by exempting civil actions brought under the FEHA
from Code of Civil Procedure Section 1330, would arguably lower
one of the barriers for employees and tenants with limited means
to obtaining private counsel so that they may access the civil
justice system to enforce their civil rights.
Notably, courts would still have discretion in awarding
attorney's fees in FEHA cases under Government Code Section
12965, which has been interpreted to mean that a trial court
should ordinarily award attorney fees to a prevailing plaintiff,
unless special circumstances would render an award of fees
unjust. (See Young v. Exxon Mobil Corp. (2008) 168 Cal.App.4th
1467, 1474.) Thus, should AB 559 become law, a court would
still have discretion in determining the amount of reasonable
fees and to augment or reduce the award depending on the
specific facts of each case.
4.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."
5. Governor Schwarzenegger's veto of AB 2773
AB 559 (Swanson)
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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.
Support : California Labor Federation; California Rural Legal
Assistance Foundation; California Conference Board of the
Amalgamated Transit Union; California Conference of Machinists;
California Official Court Reporters Association; California
Teamsters Public Affairs Council; Church State Council; Consumer
Attorneys of California; Disability Rights California;
Employment Law Center, Legal Aid Society of San Francisco;
Engineers and Scientists of California; Equal Rights Advocates;
International Longshoremen and Warehouse Union; Labor Project
for Working Families; Law Office of Mary-Alice Coleman; Law
Offices of Victor L. George; 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 U. School of Law
Opposition : California Chamber of Commerce; Civil Justice
Association of California
HISTORY
Source : California Employment Lawyers Association
Related Pending Legislation : None Known
Prior Legislation : See Background.
Prior Vote :
Assembly Floor (Ayes 47, Noes 26)
Assembly Judiciary Committee (Ayes 7, Noes 2)
AB 559 (Swanson)
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