I know that Justice Wiley wants to dispense with appeals relatively concisely, and maybe eight double-spaced pages (the substance is actually less than that) is indeed all one needs to resolve this particular appeal, but is this opinion really right on the merits?
Plaintiff sues for harassment (among other things), loses on summary judgment on statute of limitations grounds, and that loss -- and the resulting cost award for the employer -- gets reversed by the California Supreme Court, which then remands the case to the Court of Appeal.
Once the case is back in the Court of Appeal, it then gets remanded for trial (remember that it was initially dismissed on summary judgment), with "costs" to the plaintiff.
Then, once back in the trial court, as the case gets ready for trial, the trial court awards plaintiff a little under $500,000 in attorney's fees. Reasoning that the "costs" awarded by the Court of Appeal includes attorney's fees since it's a harassment and discrimination case.
Defendant then files an appeal of the interim fee order. Saying that the fee award was unjustified because, amongst other things, the plaintiff hasn't yet prevailed. Sure, they won their appeal. But the trial has not yet even happened. So there's no prevailing party.
Let's stop there for now. (Though, as you'll see, there's more.)
At this point, I think the defendant's right. Let's assume, for example, that the plaintiff went to trial and lost, with the jury holding that there was no harassment or discrimination. I think it's pretty clear that in such a setting, the plaintiff's not the prevailing party, and hence not entitled to fees. The fact that you win on appeal and reverse an interim order (there, and MSJ) doesn't mean you're entitled to fees.
So I'm fairly confident that the defendant is right. There shouldn't have been a fee award in the trial court in the first place.
I'm not sure that Justice Wiley (or the rest of the panel) disagrees with this.
But wrinkle here is that after the fee award, and after the fee award was appealed, one month before the trial was about to start, the parties settled their dispute (except for the fee award). And even though that settlement agreement was confidential, and is not part of the existing appellate record, for the reasons amply explained in today's opinion, I'm confident -- as is Justice Wiley -- that this agreement means that plaintiff was the prevailing party in the underlying litigation; i.e., that she got paid (moreover, that as part of the settlement agreement itself, the plaintiff was perhaps expressly declared to be the prevailing party).
Okay. So where does that leave us?
For Justice Wiley, it makes resolving the appeal fairly easy. He says that regardless of whether the fee award was proper when it was made (which, again, I think it wasn't, because it was premature at that particular point), the fee award is now proper because, at this point, the plaintiff's the prevailing party since she settled.
To use the language of the opinion: "For purposes of analysis, we assume the trial court erred by concluding before trial that Pollock was a prevailing party. Since then, however, the parties have settled and the case is concluded, save for this fee issue. We hold any assumed error was harmless."
That seems fair to me. As far as it goes, anyway. I agree, on these facts, that the plaintiff's the prevailing party. Would it be better if that settlement agreement was a part of the appellate record -- which it's not, even though plaintiff is more than willing to make it so? Yes, it would. But I understand why Justice Wiley wants to expedite this resolution and not just remand to make the settlement part of the record and then reinstitute the exact same appeal. She's the prevailing party. We effectively know that. So we can move forward.
This much I agree with.
The wrinkle's the second part. Because it relates to the first -- in my view, in a way that today's opinion may not sufficiently appreciate (or discuss).
Defendant also objects to the size of the award -- nearly half a million dollars. Justice Wiley rejects the defendant's quibbles with the award by granting deference to the trial court on these issues that would ordinarily, in a typical case, be entirely appropriate. So the Court of Appeal affirms the award in its entirety.
But that doesn't seem right to me. Again, I'm persuaded that the plaintiff is the prevailing party. But we don't know how much she's the prevailing party -- i.e., what result she obtained in the settlement -- and neither did the trial court when it issued the award. Because the trial court granted the fee award a full year before the case settled, under the (mistaken, IMO) belief that it was required to do so since the Court of Appeal had awarded plaintiff "costs" on appeal.
So, for example, the trial court ordered a 1.8 multiplier to fees. I agree with Justice Wiley that such a multiplier might well be justified -- and often is -- due to the contingent nature of plaintiff's recovery and the fact that unlike the defendant's lawyers, who are paid hourly, plaintiff's lawyers only recover if they win. That's a legitimate reason why, in some cases, a multiplier might be justified.
But whether a multiplier is justified also depends, in part, on the results achieved as a result of the litigation. Ditto for the reasonableness of the number of hours and many other factors relevant to an ultimate fee award. And the trial court didn't know those results because they hadn't yet transpired at the time of the fee award.
Let's say, for example, that under the settlement agreement, plaintiff received a mere $100 (or make it $10,000 if you'd like). That's a win. She's the prevailing party. She's entitled to some degree of fees.
But it's entirely within the court's discretion to take the extent of that win into account when it decides the reasonableness of fees, the extent of any potential multiplier, etc. If, say, she was asking for $50 million, and only received $100 (or $10,000), a court might well act within its discretion to consider the limited extent of that victory and, on that basis, decide not to award $500,000 or so in attorney's fees.
Now, could the trial court award $500,000 in fees notwithstanding such a limited victory? Sure. At least for the $10,000 win. (I'm not certain about a $100 win; it probably could, but it's be harder.)
But the point is that the trial court here did not, in fact, make such a discretionary assessment. If only because it couldn't. The case hadn't even settled yet. And it also (mistakenly) believed that a fee award was mandated regardless of ultimate victory (or defeat) at trial or settlement because the Court of Appeal had awarded costs on appeal.
So I think the Court of Appeal does, in fact, have to remand. It may well be that the trial court, after looking at the settlement, will conclude that the plaintiff was a prevailing party and is entitled to the full amount (nearly $500,000) of the fees it was previously awarded.
But it could also go the other way. If the settlement is a tiny one, the trial court could, in the exercise of its discretion, award less. That's their call. A call that it hasn't already made with full recognition of the relevant law and facts.
So it's doctrinally wrong, in my view, for the Court of Appeal to hold that "any assumed error was harmless." Maybe it was harmless. Maybe it wasn't. We can't tell until the trial court evaluates the relevant information (the settlement) that it didn't possess previously and that might, potentially, alter the exercise of its permissible discretion.
In all likelihood, I think that, as a practical matter, the trial court will probably not be affected by the size of the settlement (which I suspect was nontrivial) and will award the same amount it awarded (based on an erroneous view of the law) the first time.
But maybe not. So we gotta give the relevant decisionmaker -- the trial court -- the chance to evaluate all the relevant information and apply the applicable law.
So I would have remanded rather than affirmed. I think that's the doctrinally correct result.
