Wednesday, July 22, 2026
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Ninth Circuit:
Party Receiving Benefit Under Settlement Is ‘Prevailing’
Opinion Says Judge Duffy-Lewis Erred in Denying Attorney Fees to Man Who Bought Mislabeled Product for $10, Sued Under CLRA, Received $2,500 Settlement, Plus Costs, Pursuant to CCP §998 Offer of Compromise
By a MetNews Staff Writer
A man who bought a four-pack box of a mixed cocktail at a liquor store, noting that the label said it contained tequila, and discerned that it contained none of that type of liquor, sued under a consumer protection statute and settled for $2,500, is entitled to an award of attorney fees, the Court of Appeal held yesterday, rejecting a judge’s theory that there is no “prevailing party” where a statutory offer of compromise is accepted.
Los Angeles Superior Court Judge Maureen Duffy-Lewis took the wrong approach in acting on the attorney-fee request by Javier Garcia, Acting Presiding Justice Victoria M. Chavez said in an unpublished opinion for this district’s Court of Appeal Div. Two.
Noting that the California Consumer Remedies Act (“CLRA”) mandates an attorney-fee award to a prevailing plaintiff, she declared that “courts must assess the parties’ litigation success, not the form of a settlement.”
Wording of Statute
The CLRA says in Civil Code §1780 (e):
“The court shall award court costs and attorney’s fees to a prevailing plaintiff in litigation filed pursuant to this section.”
Defendant SouthNorte Spirits LLC, which operated the liquor store in Whittier where Garcia purchased a pack of SouthNorte’s “Paloma Crafted Cocktail,” accepted Garcia’s offer pursuant to Code of Civil Procedure §998, conferring on him 250 times the cost of the product. It also agreed that “[f]ees and costs, if any, will be determined by the court as allowed by law.”
Duffy-Lewis’ Error
Chavez wrote:
“Here, the findings and determinations under the correct legal framework were not made in deciding whether appellant is entitled to his attorney’s fees and costs under Civil Code section 1780. The November 12. 2024 order denying the motion for attorney’s fees contains no discussion regarding which party achieved its litigation objectives. The order states the settlement ‘does not contain any admission of liability nor any admission that plaintiff was truly damaged.’ The trial court concluded appellant is not necessarily the prevailing party as a result of accepting the section 998 offer. Likewise, the April 7, 2025 order denying the renewed motion contains no discussion as to the parties’ litigation success and only indicated appellant’s acceptance of the section 998 offer does not automatically show he is the prevailing party.”
That approach, Chavez said, is contrary to case law. She declared:
“Since nothing shows the facts pertinent to the parties’ litigation success were ever considered, we cannot conclude the findings and determinations required in deciding the prevailing party under Civil Code section 1780. subdivision (e), were made. Accordingly, this matter must be remanded for the trial court to make such findings and determinations under the correct legal framework discussed herein.”
Lack of Damages
Duffy-Lewis also found that Chavez was not entitled to attorney fees because he suffered no damages. SouthNorte argued on appeal that she was right, saying:
“Garcia largely ignores the plain language of the statute and argues that he need only allege that he suffered damages to open the door to attorney’s fees….Of course, the plain language of the statute does not authorize someone to ‘bring an action’ as long as they ‘allege’ that he suffered damages as the result of a CLRA violation. The only way that Garcia’s theory would make sense is if this Court added words to § 1780 subdivision (a) so that it read only those who ‘allege they have suffered...damages as a result of’ a CLRA violation may bring an action. Courts can do no such thing, so Garcia’s argument must fail.”
Sec. 1780 (a) says that “[a]Any consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by Section 1770 may bring an action against that person to recover or obtain” relief it proceeds to set forth.
Chavez said:
“Respondent’s interpretation here lacks merit. The plain language of Civil Code section 1780. subdivision (a), clearly refers to the standing requirement for a lawsuit under the CLRA….A plaintiff’s allegations of damages suffered as a result of a CLRA violation help to show the plaintiff has standing to sue under the statute….Respondent’s suggestion that appellant had to somehow make an early showing of merits to bring a CLRA claim lacks any support and is antithetical to the basic concept of standing. Respondent provides no other example of a statute containing the type of language respondent insists the CLRA should have to support appellant’s interpretation.”
Mislabeling Explained
Explaining how the sale of a mislabeled product came to occur, Garcia said in his opening brief on appeal:
“The box was labeled “TEQUILA” and depicted a tequila bottle….But unbeknownst to Plaintiff, the drinks did not contain tequila….That was because SouthNorte’s bottler in Mexico had mistakenly shipped 300 Paloma cans that lacked tequila….SouthNorte was notified of the error, but instead of rejecting the non-conforming goods, decided to package them in the ‘TEQUILA’”-branded boxes anyway and ship them to California retailers.”
The case is Garcia v. SouthNorte Spirits, B345897.
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