Thursday, February 10, 2011
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C.A. Overturns Attorney Fee Award Against DFEH
Panel Says Department’s Statutory Immunity Extends to Monetary Sanctions
By KENNETH OFGANG, Staff Writer
A statute immunizing the state Department of Fair Employment and Housing against attorney fee awards precludes such an award as a sanction for initiating meritless litigation, the Sixth District Court of Appeal ruled yesterday.
The court threw out an order that the DFEH pay $19,200 in costs and attorney fees to a property owner, a property manager, and the manager’s firm. Santa Cruz Superior Court Judge Ariadne Symons issued the order after finding that the department lacked “substantial justification” for its accusation that the defendants had coerced, intimidated, harassed and discriminated against a tenant family because they were Hispanic.
Symons awarded the fees under Code of Civil Procedure Sec. 1028.5. It provides that when a state agency unjustifiably sues a “small business,” as defined by that section, or a licensee, each such defendant may be awarded up to $7,500 in attorney fees and costs.
The judge rejected the department’s contention that the award violated Government Code Sec. 12989.2(a), which provides that in an action based on housing discrimination, the court may “award the prevailing party, other than the state, reasonable attorney’s fees and costs, including expert witness fees, against any party other than the state.”
Symons reasoned that Sec. 1028.5 “is a more specific statute,” and that the Government Code section “does not specifically preclude an award based on another basis.” Since Sec. 1028.5 requires the defendant to show that the action lacked merit and not merely to prevail, it may be applied to a housing discrimination case, the judge said.
But Justice Franklin Elia, writing for the Court of Appeal, disagreed.
He wrote:
“We cannot endorse the disregard of clearly expressed statutory language with the excuse that it applies only when the ‘basis’ is prevailing party status. In section 12989.2 the Legislature has simply permitted recovery of costs and fees by the prevailing party—except when the prevailing party is the state or the recovery is sought against the state. The successful party’s entitlement to fees does not depend on any condition except that very fact: that he or she has prevailed. Nothing in the statute limits its application to a finding that the successful party is eligible for costs and fees ‘solely because’ he or she prevailed. The court is accorded wide discretion to make such an award—unless either the prevailing party or the losing party is the state.”
The legislative history, the justice went on to say, is consistent with the plain language. The bill that created the code section, Elia said, was enacted in 1999 specifically to clarify that the state was not subject to an award of fees and costs in a housing discrimination case.
The case is Department of Fair Employment and Housing v. Mayr, H034935.
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