California Supreme Court Says 'No' to Exorbitant Attorney’s Fees

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On Thursday, January 14, 2010, the California Supreme Court unanimously ruled that the awarding of attorney fees must be commensurate and reasonable in light of a successful claim.

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A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether. The grossly inflated request . . . alone was sufficient . . . to justify denying attorney fees altogether.

On Thursday, January 14, 2010, the California Supreme Court unanimously ruled that the awarding of attorney fees must be commensurate and reasonable in light of a successful claim. In a suit filed in 2004 (Robert Chavez v. City of Los Angeles -- Super. Ct. No. BC324514) pursuant to the Fair Employment and Housing Act, Robert Chavez alleged employment discrimination, harassment on the basis of perceived mental disability, and unlawful retaliation. After a brief trial, Chavez won a modest award of $1,500 in economic damages and $10,000 for emotional distress. Based on these results, attorneys for Robert Chavez sought $871,000 in attorney fees. The trial judge overseeing the case awarded nothing and the case was sent to the California District Court of Appeal.

In a unanimous Supreme Court decision, the justices affirmed the Trial Court’s decision and indicated ''the trial court should award only that amount of fees that is reasonable in relation to the results obtained. Further, ''when a plaintiff recovers only nominal damages because of his failure to prove an essential element of his claim for monetary relief, the only reasonable fee is usually no fee at all''. “A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether. The grossly inflated request . . . alone was sufficient . . . to justify denying attorney fees altogether."

Employers Group filed an amicus brief on behalf of all California employers and argued that attorney fees should be reasonable and commensurate with the size of damages. Seeking to stem the trend of excessive attorney fee awards, Employers Group is hopeful that this decision will restore some sanity by reducing the number of exorbitant fee awards and the number of frivolous claims filed only with the hope and expectation of securing a high fee award. Mark Wilbur, President and CEO of Employers Group lauded the Supreme Court’s decision, “This is a great decision for California employers. Employers are facing increasingly rising and expensive legal costs to defend themselves against frivolous claims that seek only to garner exorbitant fees for plaintiff’s attorneys. California employers are eliminating jobs and losing their competitive advantage to businesses in other states due to the burdens of a highly litigious environment.”

A full copy of the California Supreme Court decision is available here: http://www.employersgroup.com/PDFFiles/ChavezVsCityofLA.pdf

Employers Group's advocacy program works in tandem with the organization's Legal Committee. The committee is made up of some of the top employment attorneys in the nation. This group files amicus briefs and letters defending the interests of employers in the state and federal appellate courts, including the California and U.S. Supreme Courts, and advises the organization on legislative issues of importance. To read more please visit http://www.employersgroup.com/newsandlegislation/legislation/legalcommittee.shtml.

About Employers Group
Employers Group, a California-based human resources expert and advocate, serves employers nationwide by delivering human resources solutions to its members. Originally founded in Los Angeles as the Merchant’s and Manufacturers Association in 1896, the organization has moved from serving the interests of just California employers to helping companies across the globe mitigate risk, cut costs, and advocate for employer rights. Employers Group provides a member helpline with day-to-day guidance about employment laws and regulations, professional development, consulting projects, and compensation and workplace trends surveys. It is the “voice” for businesses in both the judicial system the California Legislature and Congress, advocating for employers every step of the way; thus, thousands of employers have come to rely on Employers Group for "everything HR," freeing them to do what they do best to grow their businesses. For more information, visit http://www.EmployersGroup.com.

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Ken Tiratira
Employers Group
213-765-3915
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