Another Private AG Fees Case Headed for the Supremes?

Well, we just had one Supreme Court opinion on the private attorney general statute (about which I posted here), and at first, I suspected that the Third District Court of Appeal was trying to tee up another one for potential Supreme Court review in Marine Forests Society v. California Coastal Commission, case no. C052872 (3d Dist. Mar. 4, 2008). To my mind, its public policy implications are significant.

At issue is the scope of the “catalyst” theory for recovering attorney fees under California’s “private attorney general” statute, Code of Civil Procedure section 1021.5. The catalyst rule provides that a party can recover fees under the statute even if it is not the prevailing party “if the lawsuit was the ‘catalyst’ that caused ‘the defendant [to] change[] its behavior substantially because of, and in the manner sought by, the litigation.’ (Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 560 . . . .)”

Does that rule allow a plaintiff to recover fees if its lawsuit is the catalyst for change in how the public entity defendant operates if the change is mandated by the legislature in response to the suit, rather than instigated internally by the public entity? The Court of Appeal says no. Reading the catalyst rule of Graham literally, it holds that the change must be implemented unilaterally by the defendant, rather than be imposed on the defendant by a third party like the legislature, to bring the change within the catalyst theory. Thus, the fact that the legislature changed the law in response to a Supreme Court ruling in an earlier appeal from the case does not support fee recovery under the catalyst theory.

It was this statement in the opinion’s introduction that made me think the court of appeal was trying to set the case up for Supreme Court review::

To the extent it can be said that the rationale of the catalyst theory should apply to a lawsuit like this, which was the moving force resulting in a change in statutory law that conferred a significant benefit on the general public regarding important rights affecting the public, the argument must be made to the California Supreme Court because we are bound by the ruling in Graham, supra, 34 Cal.4th at p. 560. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455.)

But there were other obstacles to a fee recovery in this case. The court of appeal found first that the plaintiff had not achieved the primary relief it sought. That is the first condition of a “catalyst” – based fee recovery, and plaintiff’s failure to meet it should have been enough to deny fees. The impetus for the changed behavior was merely an additional reason to deny fees.

By the way, Tom Caso at The Opening Brief has had a number of interesting posts on section 1021.5 in the last few months.

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