Monday, November 6, 2017
Enhancement Based on ‘Risk’ Factor Inapplicable In Seeking ‘Fees on Fees’ Award—C.A.
Case, In Litigation for Nearly 40 Years, Has Spawned State Supreme Court Opinion, Three Opinions of the Court of Appeal
By a MetNews Staff Writer
An attorney fee award in connection with work done in securing fees in a private attorney general action would logically not be enhanced based on “risk,” the Court of Appeal for this district held on Friday.
The decision came in a case in which trial court ordered the state to pay $836,211.25 in attorney fees to lawyers for work they did in defending previous attorney fee awards in the case, a case which stretches back to the filing of a complaint on June 20, 1978, and includes a decision by the California Supreme Court. It was alleged in the class action that the state unconstitutionally collected higher vehicle license fees and use taxes on vehicles purchased out of state.
The state appealed the latest fee awards, divided among three firms and one sole practitioner, now located in Houston; the sole practitioner and plaintiff, Patrick G. Woosley, cross appealed.
Broken down, the awards were: $14,332.50 to Jones, Bell, Abbott, Fleming & Fitzgerald L.L.P, $80,010 to the Gansinger Firm, $15,600 to the Law Offices of John F. Busetti, and $70,000 to Woosley.
Enhancements Properly Denied
Writing for Div. Five, Justice Lamar Baker said Los Angeles Superior Court Judge Stephanie M. Bowick did not abuse her discretion in making the awards. With respect to the enhancements Woolsey sought in connection with the risk a lawyer in a private attorney general action takes that no fees will be ordered, should there be a lack of success, and based on a delay in payment, Baker wrote:
“[W]e conclude the trial court’s decision not to enhance Woosley’s fee award for risk and delay was not error. By the time Plaintiffs’ Counsel applied for the attorney fees at issue here, their entitlement to an award of some amount was all but inevitable (notwithstanding the State’s arguments to the contrary) based on their success in the underlying litigation and their earlier fee award….Thus, the trial court did not abuse its discretion in failing to enhance Woosley’s award for risk.”
He went on to say that while a small enhancement based on delay in payment is permissible, being akin to interest, the award is discretionary.
Woosley contested deductions Bowick made from the amount he requested, but Baker declared:
“The court’s method and results were both sound.”
Serrano IV Cited
Bowick rebuffed the state’s contention that the attorneys were entitled to no further fees. She cited the California Supreme Court’s 1982 decision in Serrano v. Unruh (Serrano IV) for the proposition if a party has received attorney fees in a private attorney general action, pursuant to Code of Civil Procedure §1021.5, entitlement to fees in connection with gaining fees follows.
In that decision, the high court said:
“We conclude that, absent circumstances rendering an award unjust, the fee should ordinarily include compensation for all hours reasonably spent, including those relating solely to the fee.”
Woosley initially scored a victory in the trial court. Then-Los Angeles Superior Court Judge Lester M. Olson awarded $13.7 million to class counsel and $1 million in fees to Woosley “for services rendered as class representative.”
The state appealed from a judgment in favor of the two classes Olson certified, and Woosley appealed from the denial of fees for his legal services. The Court of Appeal affirmed the judgment for the classes and reversed the denial of fees for Woosley’s legal work.
The California Supreme Court in 1992 affirmed and reversed the Court of Appeal.
Then-Chief Justice Ronald George (now retired) wrote:
“[W]e hold the state violated the commerce clause of the United States Constitution by imposing vehicle license fees and use taxes on vehicles originally sold outside California that were higher than the fees and taxes charged on similar vehicles first sold within the state….
“[W]e hold the class claim filed in this case was not authorized by statute. That claim is valid only as to Woosley in his individual capacity. Although our ruling does not automatically preclude continuation of this suit as a class action, the class may include only persons who timely filed valid claims for refunds.”
$1 Billion Consequences
George noted that under the judgment as it stood, refunds, according to the state’s reckoning, would amount to more than $1 billion. He also noted that the state had ceased its discriminatory practice on 1976.
The chief justice added:
“Because our opinion will result in a substantial reduction in the amount of the judgment, the trial court shall reconsider the amount of its award of attorney fees to counsel for the class and the amount of its award to Woosley ‘as fees for services rendered as class representative.’ ”
On remand, there came a $23 million attorney fee award, with costs, which the Court of Appeal in 2010 reversed because consideration had not given “any consideration to the lack of success.” In 2014, the trial court pared the award to $2.8 million, and the lawyers appealed.
Last April 24, the Court of Appeal, in an opinion by Baker, affirmed in part, and reversed part.
In issue in the appeal decided Friday were attorney fees sought in 2015 for work done in the case subsequent to the period covered by the 2014 award.
Woosley commented Friday:
“Overall, I am pleased with the Court of Appeal’s ruling today upholding the judgment in appeal B275402. This was part of litigation that stopped the DMV from discriminating in the calculation of the annual vehicle license fees (‘Car Tax’) on vehicles originally purchased outside of California. The amount of discrimination eliminated has been estimated between one and two billion dollars.
“The litigation started in 1978 relating to a vehicle purchased in 1976.”
The case is Woosley v. State of California, B275402.
Woosley represented himself in the appeal. Other attorneys on the appeal were Deputy Attorney General Hutchison B. Meltzer for the state; John B. Murdock for Law Offices of John F. Busetti; James M. Gansinger and Eric L. Troff for The Gansinger Firm; Craig R. Bockman and Kevin K. Fitzgerald for their own firm of Jones, Bell, Abbott, Fleming & Fitzgerald.
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