Source: https://www.calattorneysfees.com/cases_intervenors/
Timestamp: 2019-04-25 15:50:27+00:00

Document:
Another Remand To Get It Right.
On remand from this 2016 appellate decision, the PUC awarded every penny to intervenors based on the theory that compensation was warranted if the positions advocated by the intervenors “would have” materially influenced a decision on the merits.
The same appellate court in New Cingular Wireless PCS, LLC v. PUC, Case No. A151870 (1st Dist., Div. 4 Mar. 29, 2018 published and modified from Mar. 13, 2018 unpublished decision) vacated the fee determinations and remanded once more.
This time, the 1/4 DCA found that the “would have” rationale was too speculative, with it being necessary for intervenors to trace time and costs billed by intervenors with precision to an order or decision of the CPUC; and, absent that, making a reasonable allocation of amounts to the successful work rather than just claiming a 100% fee recompense.
Public Utility Code Section 1803 Was Involved, With Appellate Court Determining Its Scope.
The appellate court denied the writ challenges because it believed that the intervenors were eligible for intervenor compensation because the CPUC did decide to adopt some position being advocated by the intervenors—construing the “order or decision” language despite the subsequent mootness developments. However, based on the reasoning used by the CPUC to get to its award, the reviewing court remanded for a relook based on the guidance in reasoning it provided. This one is must reading for intervenors or objectors to awards in this narrow area of the law.
Second District, Division 6 Finds Intervenor Was In Same Position As Parties to the Lawsuit for Fee Shifting Purposes.
Here is a case involving an interven0r for our category “Intervenors”--a category that we have not posted on for some time. The case is Larson v. Las Posas Hills Homeowners Assn., Case No. B219066 (2d Dist., Div. 6 Feb. 1, 2011) (unpublished) and comes out of the Second District, Division 6.
Second District, Division Eight Affirms PUC’s Decision Denying Substantial Backend Fees and a Multiplier to Intervenor.
Because attorney’s fee issues are pervasive, we now have a post of interest to lawyers who practice before the California Public Utilities Commission (PUC).
The Utility Reform Network (TURN) intervened in several PUC and federal court proceedings about rate freezes and “stranded” cost recoupment before and after California’s electricity crisis hit in summer 2000. TURN sided with the PUC in these proceedings, and one of its accounting proposals was adopted in these proceedings. In June 2002, PUC awarded TURN $573,335.70 in attorney’s fees and costs under the Intervenor Compensation Provisions of the Public Utilities Code, sections 1801-1808, 1812, with So. Cal. Edison challenging certain rulings about the federal work compensation to TURN via writ review (the appellate mechanism for “appealing” PUC decisions). In the prior decision of Southern Cal. Edison Co. v. PUC, 117 Cal.App.4th 1039 (2004) (SCE), the Second Division, Division Eight affirmed the compensation to TURN, deciding that the PUC correctly decided that TURN was entitled to be compensated for PUC work in federal court proceedings related thereto. However, the situation that the Division Eight would now review (and that is the subject of our post) was quite a different matter.
Later, TURN shifted course dramatically, objecting to a settlement reached between PUC and So. Cal. Edison in a federal lawsuit filed in the wake of So. Cal.Edison’s threatened bankruptcy. It lost its challenge on numerous procedural obstacles at both federal district and appellate court levels. TURN also lost its state challenges before the California Supreme Court. Undeterred by these losses, TURN sought compensation from the PUC for its work on the prior Division Eight case and the unsuccessful So. Cal. Edison settlement challenges. TURN sought compensation at the rates charged by PG&E’s outside bankruptcy counsel in bankruptcy litigation and also requested a 1.5-2.0 multiplier.
Although asking for more than $1.9 million in compensation, PUC decided to award TURN $389,119.68 on the second fee request, refusing to compensate TURN for its unsuccessful challenges to the So. Cal. Edison settlement on the basis that this work provided “no substantial contribution” to a PUC action and also denying the multiplier enhancement request. TURN then petitioned for writ review.
Division Eight, in TURN v. PUC, Case No. B197857 (2d Dist., Div. 8 Aug. 29, 2008) (certified for publication), affirmed with one slight modification on the hourly rates allowable for the work of TURN’s outside counsel.
What Division Eight did reverse was the compensation to TURN’s outside counsel as unduly low as far as hourly rates were concerned. Relying on Public Utilities Code section 1806, the appellate panel decided that TURN’s outside counsel could not be compensated at the same rate as TURN’s in-house counsel, because section 1806 mandates that compensation be based on the “market rates paid to persons of comparable training and experience who offer similar services.” The Court of Appeal put it this way: “Outside counsel experienced in federal trial and appellate litigation offer different services than do TURN’s in-house staff who are expert in administrative litigation before the PUC.” (Slip Opn., at p. 17.) The matter was remanded to recalculate compensation awarded to TURN’s outside counsel on the second fee request.
Last but not least, no error was made by the PUC in refusing TURN’s multiplier request—the matter was not exceptionally complex.
Can An Intervenor Be Liable for An Award of Attorney’s Fees?
The Ninth Circuit recently explored the issue of when an intervenor may be held liable for an award of attorney’s fees and costs under two fee-shifting statutes, one arising under the civil rights scheme and the other in the antitrust sector. Intervenors can indeed face fee exposure depending on the nature of the fee entitlement statute and on the nature of the intervenor’s conduct in the underlying litigation.
In Costco Wholesale Corp. v. Hoen, Case No. 06-36040 (9th Cir. Aug. 15, 2008), intervenor Washington Beer and Wine Wholesalers Association (WBWWA) intervened and assisted certain Washington state defendants in a suit brought by Costco claiming that Washington’s liquor laws violated the Commerce Clause and federal antitrust law. Costco mostly prevailed at the district court level despite being outmanned, with the district court finding a Commerce Clause violation and giving the Legislature time to remedy the violation (which happened). The district court, with one exception, found there were antitrust violations and entered judgment in Costco’s favor. The Ninth Circuit later reversed one aspect of the antitrust judgment, finding no Sherman Act restraints. The parties stipulated that Costco was entitled to $1,635,741 in fees and $66,972 in costs from the state defendants. However, the district court found intervenor WBWWA was not liable for fees and costs, with Costco appealing that determination.
On appeal, it was a split decision, one in favor of WBWWA and one in favor of Costco on the intervenor fee exposure issues.
The Ninth Circuit affirmed the decision that intervenor faced no liability under 42 U.S.C. section 1988(b), the civil rights fee statute which authorizes discretionary fee awards by the district court. The crucial inquiry, as mandated by Independent Federation of Flight Attendants v. Zipes, 491 U.S. 754, 761 (1989), was determining whether the intervenor was “innocent,” in which case fees could only be awarded if an intervenor’s actions were “frivolous, unreasonable, or without foundation.” Because WBWWA was never found liable on the civil rights claim, it was “innocent,” a status that was not changed because of its active litigation activity in the action below. The federal appellate court also found that WBWWA’s arguments were not frivolous, even though ultimately unpersuasive, on a novel issue that did not have much jurisprudence in the germane substantive area of law.
However, the Costco court reversed and remanded for redetermination on the issue of awarding fees under 15 U.S.C. section 26, which provides that a court “shall award the cost of suit, including a reasonable attorney’s fee” to any plaintiff who files an action seeking injunctive relief “against threatened loss or damage by a violation of the federal antitrust laws” and “substantially prevails.” Unlike the discretionary fee entitlement statute involved in Zipes, section 26 in contrast has mandatory fee authorizing language. Extending Zipes to cover section 26 situations would undermine the purpose of the statutory provision because it “would deter private enforcement of the federal antitrust laws by encouraging entities such as WBWWA to vigorously defend anti-competitive state laws with little fear of fee liability, and leading potential plaintiffs to feel less confident of success because of the increased likelihood of intervention from sometimes powerful third parties.” (Slip Opn., at p. 10770.) The Ninth Circuit buttressed its rationale by citing to other decisions that had only applied Zipes to discretionary fee situations. (Ibid.) The federal appeal panel ended by concluding that section 26 did allow for imposition of fees and costs against actively-involved intervenors like WBWWA, because its actions certainly increased Costco’s costs (almost an oxymoron, no?)—with section 26 designed to protect the injunction-seeking plaintiff by allowing a recoupment of fees/costs. However, because the Ninth Circuit reversed the Sherman Act restraints aspect of the judgment, it remanded to allow the district court to determine if Costco “substantially prevailed” on its antitrust claims.
So, in the end, intervenor liability turns on a careful scrutiny of the specific fee authorizing statute at issue, with determinations of “innocence” or “mandatory/discretionary fee entitlement” being the key determinative factors in the decision making equation.

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