Tuesday, November 26, 2019
Page 3
Court of Appeal:
No Fees Under CCP §1021.5 Based on Speculative Public Benefit
Decision Draws Dissent Saying That Prospect of Deterring Prospective Misapplication Of Law by Government Agency Justifies Award Under Private Attorney General Law
By a MetNews Staff Writer
Div. One of the Fourth District Court of Appeal, over a dissent, has snatched a $53,165.95 attorney-fee award to a contractor against a government agency, holding that the plaintiff, by establishing that the government’s interpretation of the law was wrong, benefited only itself, and that an award under the private attorney general statute was therefore improper.
The dissenter protested that other companies that contract with the defendant, the state Department of Industrial Relations’s Division of Labor Standards Enforcement, or other state agencies, will be benefited.
The point of disagreement was whether a pattern of misapplication of the law by the specific agency involved in the litigation must be shown to establish entitlement to attorney fees under the private attorney general statute, Code of Civil Procedure §1021.5, or whether it suffices that the outcome the lawsuit is apt to deter that and other agencies to desist from error in the future.
Penalty Assessed
Hobbs Construction, Inc. was granted its attorney fees in connection with a writ petition challenging a $149,200 civil wage and penalty assessment against it based on its inability to produce the originals of time cards after a complaint was made of paying workers less than they earned. San Diego Superior Court Judge Kenneth J. Medel agreed with Hobbs that Labor Code §1776(b) merely requires public works contractors to provide certified copies of payroll records—which Hobbs did—and not time cards, granting the writ and awarding attorney fees
Writing for the majority, in an opinion filed Friday and not certified for publication, Presiding Justice Judith McConnell said:
“In its minute order granting Hobbs’s motion for attorney fees, the trial court impliedly found the litigation conferred a significant benefit on the general public or a large class of persons, a determination we review for substantial evidence….Notwithstanding the deferential nature of our review, we cannot affirm the trial court’s implied finding in this case. In short, the record does not include any evidence tending to show the Division has levied improper assessments on public works contractors other than Hobbs. Thus, there is no evidence—let alone substantial evidence—demonstrating Hobbs’s writ proceeding conferred a significant benefit on any person or entity except Hobbs itself.”
She added:
“[T]here is no basis in the record for us to conclude the writ of mandate issued below would confer a substantial benefit on any other public works contractors, even if Hobbs had shown they were subject to invalid assessments. The writ has no precedential value and affects only the parties to the present proceeding.”
O’Rourke’s Dissent
Disagreeing, Justice Terry B. O’Rourke wrote:
“The majority—engaging in what I think is an overly narrow view of the evidence—holds the court erred because Hobbs did not meet its burden of establishing it was entitled to section 1021.5 attorney fees. I cannot agree. On this record, the court properly concluded Hobbs’s action both conferred a significant benefit to the public or at least to the large class of public works contractors in California, and also correctly found the award appropriate in light of the ‘necessity and financial burden of private enforcement....’ ”
He elaborated:
“Hobbs’s action clarified the proper scope of the record-keeping aspect of the Prevailing Wage Law for purposes of enforcement, inuring to the benefit of contractors working on public works projects in California, akin to other cases in which a litigant’s action advanced lawful activity in the public interest.”
O’Rouke pointed to previous cases which, he said, support the proposition that “conceptual future benefits can support an award of private attorney general fees.”
The case is Hobbs Construction, Inc. v. Department of Industrial Relations, D074385.
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