Court Opinion

ID: 9782570
Source: CourtListenerOpinion
Date Created: 2023-08-30 18:57:50.67635+00
Date Added: 2024-06-11T07:35:05.798126
License: Public Domain

KENNARD, J., Dissenting.
In clear and unequivocal language, Government Code section 12965, subdivision (b) authorizes courts to award reasonable attorney fees “to the prevailing party” in civil rights actions brought under the Fair Employment and Housing Act.1 According to the majority, however, the statute does not mean what it says: “prevailing party” does not *592mean prevailing party but prevailing lawyer. That construction ignores the plain language of the statute as well as persuasive United States Supreme Court precedent construing virtually identical language in the federal civil rights law. Therefore, I dissent.
I.
I begin with a brief discussion of the circumstances leading to the California Legislature’s enactment of the attorney fee provision at issue here.
“In the United States, the prevailing litigant is ordinarily not entitled to collect a reasonable attorneys’ fee from the loser.” (Alyeska Pipeline Service Co. v. Wilderness Society (1975) 421 U.S. 240, 247 [95 S.Ct. 1612, 1616, 44 L.Ed.2d 141] (Alyeska Pipeline), italics added.) This is known as the “American Rule,” to distinguish it from the practice in England where “for centuries . . . there has been statutory authorization to award costs, including attorneys’ fees” to the party who prevails in a lawsuit. (Ibid.; see Code Civ. Proc., § 1021; 7 Witkin, Cal. Procedure (4th ed. 1997) Judgment, § 145, p. 659 [describing Code Civ. Proc., § 1021 as “the California version of the ‘American rule’ under which each party must pay its own legal fees”].)
In 1975, the United States Supreme Court reaffirmed the American Rule when it decided Alyeska Pipeline. At issue there was a federal appeals court order requiring the Alyeska Pipeline Company to pay the attorney fees incurred by environmental groups who had successfully challenged the Department of Interior’s issuance of permits to Alyeska for construction of the trans-Alaska oil pipeline. No federal statute authorized fee shifting to the losing party in such cases. Nevertheless, the appellate court considered the award of attorney fees to be within its equitable powers as necessary to encourage private litigants to bring public interest suits as private attorneys general. (Alyeska Pipeline, supra, 421 U.S. at pp. 241-246 [95 S.Ct. at pp. 1613-1616].) The high court disagreed. It noted that although Congress had statutorily authorized attorney fees in some instances to encourage private litigation as a means of implementing public policy, “congressional utilization of the private-attomey-general concept can in no sense be construed as a grant of authority to the Judiciary to jettison the traditional rule against nonstatutory allowances to the prevailing party and to award attorneys’ fees whenever the courts deem the public policy . . . important enough to warrant the [fee] award.” (Id. at p. 263 [95 S.Ct. at pp. 1624-1625].)
In the wake of Alyeska Pipeline, supra, 421 U.S. 240, Congress in 1976 amended 42 United States Code section 1988 (title 42, section 1988) by *593expressly authorizing courts in civil rights actions, in their discretion, to award “the prevailing party ... a reasonable attorney’s fee.” The next year, California’s Legislature enacted a similar statute, Code of Civil Procedure section 1021.5, which provides that “a court may award attorneys’ fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest.” Both the federal and the California statutes were legislative responses to the high court’s decision in Alyeska Pipeline. (Folsom v. Butte County Assn. of Governments (1982) 32 Cal.3d 668, 680, fn. 20 [186 Cal.Rptr. 589, 652 P.2d 437].) Both authorize courts to award attorney fees in certain situations.
In 1980, the California Legislature enacted the attorney fee provision at issue here. (§ 12965, subd. (b).) Like the federal attorney fee statute, it applies to civil rights actions—those that are brought under the Fair Employment and Housing Act (FEHA) and assert employment or housing discrimination. (See § 12900 et seq.) In relevant part, the FEHA fee statute provides: “[T]he court, in its discretion, may award to the prevailing party reasonable attorney’s fees and costs, including expert witness fees, except where the action is filed by a public agency or a public official, acting in an official capacity.” (§ 12965, subd. (b), italics added.) At issue here is the meaning of the phrase “prevailing party.”
II.
A.
In interpreting the FEHA attorney fee provision in subdivision (b) of section 12965, courts must, as with any statute, follow settled principles of statutory construction. (Summers v. Newman (1999) 20 Cal.4th 1021, 1026 [86 Cal.Rptr.2d 303, 978 P.2d 1225].) “The aim of statutory construction is to discern and give effect to the legislative intent. (Phelps v. Stostad (1997) 16 Cal.4th 23, 32 [65 Cal.Rptr.2d 360, 939 P.2d 760].) The first step is to examine the statute’s words because they are generally the most reliable indicator of legislative intent. (Holloway v. United States (1999) 526 U.S. 1, [6] [119 S.Ct. 966, 969, 143 L.Ed.2d 1]; People v. Gardeley (1996) 14 Cal.4th 605, 621 [59 Cal.Rptr.2d 356, 927 P.2d 713].) To resolve ambiguities, courts may employ a variety of extrinsic construction aids, including legislative history, and will adopt the construction that best harmonizes the statute both internally and with related statutes. (Pacific Gas & Electric Co. v. County of Stanislaus (1997) 16 Cal.4th 1143, 1152 [69 Cal.Rptr.2d 329, 947 P.2d 291]; Hsu v. Abbara (1995) 9 Cal.4th 863, 871 [39 Cal.Rptr.2d 824, 891 P.2d 804].)” (Ibid.)
*594Subdivision (b) of section 12965 states that a court may award “reasonable attorney’s fees and costs, including expert witness fees” to the “prevailing party.” The statutory language could not be clearer: An award of attorney fees by the trial court is to the “prevailing party,” not the latter’s lawyer. In those instances where the Legislature intended an award of attorney fees to go directly to a lawyer for a party, it has expressly said so. (See § 13969.1, subd. (d)(1) [“the court may order the board to pay to the applicant’s attorney reasonable attorney’s fees” (italics added)]; Fam. Code, § 272, subd. (a) [making “fees and costs . . . payable in whole or part to the attorney” (italics added)]; Lab. Code, former § 3371, added by Stats. 1976, ch. 1347, § 6, p. 6139 and repealed by Stats. 1994, ch. 497, § 4, p. 2689 [“The attorney . . . shall be awarded a reasonable fee” (italics added)].) The wording in these statutes and the one at issue here show that the Legislature knows how to use language that clearly expresses its intent in the attorney fee area. (See People v. Murphy (2001) 25 Cal.4th 136, 159 [105 Cal.Rptr.2d 387, 19 P.3d 1129]; City of Port Hueneme v. City of Oxnard (1959) 52 Cal.2d 385, 395 [341 P.2d 318] [“ ‘Where a statute, with reference to one subject contains a given provision, the omission of such provision from a similar statute concerning a related subject is significant to show that a different [legislative] intention existed.’ ”].)
One more point: Statutes providing for the payment of fees to a party’s lawyer are an exception to California’s general rule for statutory attorney fees. Such fees are considered an element of costs (7 Witkin, Cal. Procedure, supra, Judgment, § 146, p. 661), and costs are payable directly to a prevailing party (Code Civ. Proc., § 1032, subd. (b)). Accordingly, this court has invalidated statutory awards of attorney fees when ordered paid directly to a party’s lawyer. (See Stevens v. Stevens (1932) 215 Cal. 702, 704 [12 P.2d 432] [“The attorneys were not parties to the action and any award of counsel fees should have been made to the parties litigant”]; see also Keck v. Keck (1933) 219 Cal. 316, 322 [26 P.2d 300]; Henry v. Superior Court (1892) 93 Cal. 569, 570 [29 P. 230].)
B.
My construction of section 12965, subdivision (b) also comports with the United States Supreme Court’s construction of title 42, section 1988, which is the federal civil rights fee statute and, just like the state statute at issue here, authorizes a court’s discretionary award of attorney fees to the “prevailing party.” (See Evans v. Jeff D. (1986) 475 U.S. 717, 730 [106 S.Ct. 1531, 1539, 89 L.Ed.2d 747] (Jeff D.).)
In Jeff D., the issue was whether, in a civil rights case brought as a class action, the representative plaintiff could waive entitlement to title 42, section *5951988 attorney fees in order to secure from the defendant a favorable settlement agreement. The high court upheld such a waiver, noting that under the plain language of the statute the entitlement to attorney fees belonged not to the lawyer but to the prevailing party: “Congress bestowed on the ‘prevailing party’ (generally plaintiffs) a statutory eligibility for a discretionary award of attorney’s fees in specified civil rights actions. It did not prevent the party from waiving this eligibility any more than it legislated against assignment of this right to an attorney . . . .” (Jeff D., supra, 475 U.S. at pp. 730-731 [106 S.Ct. at p. 1539], fns. omitted.) Although shifting the cost of plaintiffs’ attorney fees to defendants was intended “to attract competent counsel to represent citizens deprived of their civil rights,” the high court stressed that Congress had not “bestowed fee awards upon attorneys” but rather included entitlement to counsel fees among “the arsenal of remedies available to combat violations of civil rights, a goal not invariably inconsistent with conditioning settlement on the merits on a waiver of statutory attorney’s fees.” (Id. at pp. 731-732 [106 S.Ct. at p. 1540], italics added, fns. omitted.) The court added that its construction of title 42, section 1988 as vesting the right to attorney fees in the “prevailing party” rather than in that party’s lawyer was consistent with the decisions of most federal appellate courts that had considered the issue. (Jeff D., at p. 732, fn. 19 [106 S.Ct. at p. 1539]; see Jonas v. Stack (11th Cir. 1985) 758 F.2d 567, 570, fn. 7; Brown v. General Motors Corp. (2d Cir. 1983) 722 F.2d 1009, 1011 [“Under [42 U.S.C. § 1988] it is the prevailing party rather than the lawyer who is entitled to the attorney’s fees”]; White v. New Hampshire Dept. of Employment Security (1st Cir. 1980) 629 F.2d 697, 703 [“award of attorney’s fees goes to ‘prevailing party,’ rather than attorney”].)
Four years later, the high court reiterated that holding when it concluded in Venegas v. Mitchell (1990) 495 U.S. 82 [110 S.Ct. 1679, 109 L.Ed.2d 74] (Venegas) that title 42, section 1988 did not preclude civil rights plaintiffs from entering into contingency fee contracts with their lawyers: “[J]ust as we have recognized that it is the party’s entitlement to receive the fees in the appropriate case, so have we recognized that as far as § 1988 is concerned, it is the party’s right to waive, settle, or negotiate that eligibility.” (Venegas, supra, at p. 88 [110 S.Ct. at p. 1683], italics added.) Parenthetically, here there was no written fee agreement between the FEHA plaintiff and her counsel, and she objected to the trial court’s award of attorney fees directly to counsel.
As I noted earlier, just four years after Congress added the attorney fee provision to the federal civil rights law, the California Legislature adopted virtually identical language in its enactment of section 12965, subdivision (b), the attorney fee provision in FEHA, California’s civil rights law. In *596construing the term “prevailing party” in the federal statute as indeed meaning prevailing party and not the prevailing lawyer, the high court’s decisions in Jeff D., supra, 475 U.S. 717, and in Venegas, supra, 495 U.S. 82, provide strong support for my similar conclusion here with respect to section 12965, subdivision (b).
III.
In reaching a contrary conclusion, the majority feebly attempts to distinguish the United States Supreme Court’s decisions in Venegas, supra, 495 U.S. at page 88 [110 S.Ct. at page 1683], and in Jeff D., supra, 475 U.S. at page 730 [106 S.Ct. at pages 1538-1539], by asserting that “ ‘[n]either case, however, expressly considered the narrow question we face: whether a party may receive or keep the proceeds of a fee award when she has neither agreed to pay her attorneys nor obtained from them a waiver of payment.’ ” (Maj. opn., ante, at pp. 580-581.) The majority is wrong. In Jeff D., there was “no agreement requiring any of the [plaintiffs] to pay for the costs of litigation or the legal services . . . provided.” (Jeff D., supra, at p. 721 [106 S.Ct. at p. 1534].) And the issue there was whether a plaintiff could, as part of a settlement agreement, waive entitlement to attorney fees. (Id. at p. 730 [106 S.Ct. at pp. 1538-1539].) With respect to Venegas, there the high court simply reaffirmed its holding in JeffD. The distinction the majority tries to draw between a party’s right to receive and keep a fee award and a party’s right to forgo a fee award is one without any material difference.
In yet another futile attempt to support its holding, the majority points to this court’s decision in Levy v. Superior Court (1995) 10 Cal.4th 578, 583 [41 Cal.Rptr.2d 878, 896 P.2d 171], for the proposition that the term “party” in procedural statutes can mean “not only the actual litigant, but also the litigant’s attorney of record.” (See maj. opn., ante, at p. 578 [citing Levy for its conclusion that the word “party” is ambiguous].) But the majority conveniently ignores Levy’s further discussion of that point. Levy noted that the statutes in which the term “party” can include the party’s counsel of record are those involving motions “routinely made by attorneys in the course of representing their clients.” (Levy, supra, at p. 583.) By contrast, the fee provision here does not involve an attorney’s appearance on a routine motion on behalf of a client; instead, it sets forth to whom the trial court is to award attorney fees: “to the prevailing party.” The provision thus falls within that category of statutes that Levy described as affecting “the substantial rights of the litigants themselves,” in which “the term ‘party’ literally means the party litigant, not the litigant’s attorney.” (Ibid.)
According to the majority, its holding is necessary to ensure “that attorneys who undertake FEHA cases will be fully compensated.” (Maj. opn., *597ante, at p. 583.) Again, I disagree. Lawyers are free to enter into contracts with their clients for the payment of attorney fees, as long as they do so in a manner consistent with their ethical obligations to serve their clients’ interests over their own. (See Rules Prof. Conduct, rule 3-300 [setting conditions for lawyers acquiring pecuniary interests adverse to a client].) The fee dispute between the lawyers and the client in this case resulted from the lawyers’ failure to obtain a written contract regarding the payment of their fees. To give effect to the plain language in section 12965, subdivision (b) that a trial court’s award of attorney fees is made to the prevailing party, not the prevailing lawyer, does not leave the lawyer without protection against a client who retains the fee award and does not pay the lawyer. Attorney fee contracts between lawyer and client can include a provision creating a lien in favor of the lawyer against the plaintiff’s anticipated recovery in the case, including the statutory attorney fees. (See Cetenko v. United California Bank (1982) 30 Cal.3d 528, 531 [179 Cal.Rptr. 902, 638 P.2d 1299, 34 A.L.R.4th 657].)

 further undesignated statutory references are to the Government Code.