Wednesday, July 15, 2015
C.A. Affirms Denial of Attorney Fees to Out-of-State Counsel
By KENNETH OFGANG, Staff Writer
The Fourth District Court of Appeal yesterday upheld an Orange Superior Court judge’s ruling that out-of-state attorneys who claimed to have worked hundreds of hours on a consumer class action were not entitled to attorney fees.
Div. Three said in an unpublished opinion that Judge Kim G. Dunning was correct in holding that, even in the absence of opposition, attorney’s fees may not be awarded to counsel who are neither members of the State Bar of California nor admitted pro hac vice.
The ruling came in connection with the settlement of a class action against Dick’s Sporting Goods, Inc. The plaintiff, Leslie Golba, claimed that Dick’s had a practice of asking for personal identifying information, such as ZIP codes, in connection with credit card purchases at California stores. By doing so, the plaintiff alleged, the company was violating the Song-Beverly Credit Card Act of 1971.
The complaint listed Los Angeles attorney Sean Reis of Edelson McGuire, LLP, as counsel for the plaintiff, along with several out-of-state attorneys with the notation, “[pro] hac vice admittance to be sought.”
In July 2011, a month after the filing of the complaint, Reis filed an application for Joseph Siprut of the Chicago firm Siprut PC to be admitted pro hac vice. The application was accompanied by declaration by Siprut saying he had not been pro hac vice in California in the previous two years.
No order was entered on the application. Apparently unbeknownst to the plaintiffs’ lawyers, a court clerk made a handwritten notification on the application indicating that they had not complied with Rule 9.40 of the California Rules of Court, which requires that copies of such applications be served on, and a fee paid to, the State Bar.
The attorneys ultimately reached a settlement with Dick’s, which agreed to provide coupons to anyone who had been asked for personal identifying information when paying by credit card at a California store within the limitations period. The coupons provided a discount of $5 on purchases under $50, $10 on purchases of $50 to $75, and $15 on purchases of over $75.
Dick’s agreed to give notice by posting a sign in each California store, posting a notice on its website, and creating a special website related to the settlement. It also agreed not to oppose the plaintiff’s request for $210,000 in attorney fees and costs and a $3,500 incentive award.
Only two of the estimated 232,000 class members claimed the coupons.
Days prior to the final hearing on approval of the settlement, a new application for Siprut’s admission pro hac vice was filed. In their supporting declarations, Reis and Siprut both said they had assumed the first application was granted, and were unaware that it had not been until they reviewed the court file in preparation for the hearing and saw the clerk’s handwritten notation for the first time.
Dunning denied the application, on the ground that Siprut had made 12 such applications in the previous 11 months and had failed to show that special circumstances under Rule 9.40 applied. Because Reis was not present and Siprut could not practice in California, the judge took the settlement hearing off calendar without prejudice.
Todd Atkins, a California-admitted lawyer in the Siprut firm, subsequently associated as counsel for plaintiff. Dunning eventually approved the settlement, but expressed doubts as to whether she could award fees for work done by non-admitted attorneys and put the issue over to a hearing in December 2013.
In support of its fee request, the firm submitted declarations showing its attorneys had performed $150,000 worth of work on the case, with all but $36,000 of that performed by non-admitted attorneys. The claimed that a multiplier was appropriate based on the results obtained, and urged that Siprut be admitted for purposes of the case, retroactive to the date of his first application.
Dunning ruled there was no authority to award fees to out-of-state counsel, and that if there were any discretion to award such fees, they would be denied anyway. The judge also said there was no justification for a multiplier, and that the work of the California lawyers was largely duplicative of that performed by the out-of-state lawyers.
She awarded $11,000.
Justice Richard Fybel, writing for the Court of Appeal, said Dunning was correct, and that affirmance was required, even though Dick’s did not oppose the award in the trial court and did not appear on appeal.
“Plaintiff’s reliance on federal authorities and scant mention of California law lead us to begin by stating what should be obvious: Admission to practice law in California state court is governed by California law,” the justice wrote.
He noted that under the State Bar Act, it is a misdemeanor for anyone other than an active member to practice in this state. And he cited, among other cases, Birbrower, Montalbano, Condon& Frank, P.C. v. Superior Court (1998) 17 Cal.4th 119 which held that a California client wasn’t bound by its attorney fees contract, to the extent the agreement purported to require it to pay its New York law firm for services rendered in California by attorneys who were not admitted here.
The Birbrower court, Fybel noted, held that activities by lawyers not physically present in the state may be deemed to constitute the practice of law “in California,” such as when an attorney advises a California client on a California matter “by telephone, fax, computer, or other modern technological means.”
In the present case, the justice said, the bulk of the work for plaintiff was performed by Siprut and another non-admitted lawyer in his office. Since the dispute involved California law and California class members and was litigated in a California court, all of that work constituted practice of law in this state under Birbrower, he concluded.
The case is Golba v. Dick’s Sporting Goods, Inc., G049611.
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