Shelley MANDEL, Plaintiff and Respondent, v. Jerome LACKNER, as Director, etc., et al., Defendants and Appellants.
On a previous appeal taken in this action, we affirmed a judgment entered in favor of respondent on its merits. (Mandel v. Hodges (1976) 54 Cal.App.3d 596, 127 Cal.Rptr. 244.)1 Among other things, the judgment (1) enjoined the Governor from continuing the practice of ordering the closure of State offices on the religious holyday of Good Friday, upon the ground that the practice violated constitutional proscriptions involving the treatment of religion by government generally (U.S.Const., 1st Amend., clause 1; Id., 14th Amend.; Cal.Const., art. I, s 4); (2) enjoined the Controller, on the same ground from paying State employees for time taken off from work during the three-hour period mentioned; and (3) awarded respondent $25,000 as compensation for the services rendered by her attorneys prior to the entry of the judgment. (Mandel v. Hodges, supra, at pp. 610-624, 127 Cal.Rptr. 244.)
Acting upon respondent's application to this court for an award of attorneys' fees on appeal, we deferred to the trial court and vested it with jurisdiction to hear and act upon her application after the appeal had run its course. (Mandel v. Hodges, supra, 54 Cal.App.3d at p. 624, 127 Cal.Rptr. 244.) When the remittitur had been filed, she made the application by appropriate motion in that court. In proceedings to be described, the court granted her motion and entered a judgment awarding her $75,000 as attorneys' fees on appeal, payable by the State. The present appeal is from this judgment.
The Proceedings On The Motion
The questions presented require that the record made on respondent's motion be summarized in some detail. The pertinent proceedings were conducted in 1976. Respondent's attorneys in the action, whose compensation on the former appeal is at issue here, are Richard M. Kaplan and Ephraim Margolin. Sworn declarations by both, with exhibits, were filed in support of the motion. Both gave oral depositions in discovery proceedings which followed, and both testified at a hearing on the motion. In addition, each side responded in writing to interrogatories propounded by the other. All of these sources were received in evidence on the motion.2
The trial court made a minute order stating its intention to award $75,000 on the motion. Appellants requested formal findings of fact and conclusions of law pursuant to Code of Civil Procedure section 632 and Rule 232(b), California Rules of Court. Respondent submitted proposed findings and conclusions, and a proposed judgment, to which appellants filed written objections. Findings were settled at a hearing, after which the court signed and filed new findings and conclusions prepared by respondent. The $75,000 judgment for attorneys' fees was entered accordingly.
As pertinent here, the trial court first made a finding (no. 7) that “it is proper for it to award attorney's fees” on the former appeal. This finding was substantially reiterated in conclusion of law no. 7,3 where the court stated that “Plaintiff's attorneys, Richard M. Kaplan and Ephraim Margolin, are entitled to be compensated by Defendants for said attorneys' efforts in resisting the appeal.” These passages (of which the second is cited in the judgment) amount to a finding that respondent is entitled to An award, a determination which had been left entirely open by this court. (Mandel v. Hodges, supra, 54 Cal.App.3d 596 at p. 624, 127 Cal.Rptr. 244.)
The amount of the award is covered at great length in successive findings which are to be summarized as briefly as possible. In no. 8, the court found that “(t)he nature of the litigation in the (former) appeal was complex, novel and virtually unique” in establishing (1) the constitutional violations involved in the closure of State offices on a religious holyday and (2) that attorneys' fees may be awarded “in an action against the State of California or its officers and agencies, in which a class or group of citizens or the State receives a substantial benefit . . . .” Finding no. 10 stated in pertinent part that “(t)he difficulty of the appeal was very substantial on substantive grounds” as to each of the issues enumerated above and others, among which “the interplay of the various sections of the Government Code . . . and the effect upon them of the constitutional requirements . . . required resourcefulness by Plaintiff's attorneys to meet and to overcome.”4
Finding no. 11 referred to the monetary “amount involved” in Mandel I as “very substantial, amounting to a wrongful expenditure of State funds of at least $2,000,000.00 annually, which amount is now saved annually” as the result of respondent's “success” on that appeal and the efforts of her attorneys. (See Mandel v. Hodges, supra, 54 Cal.App.3d 596 at p. 622, fn. 16, 127 Cal.Rptr. 244.)
The court further found that the attorneys had demonstrated a high degree of skill and “unusual legal talent, experience, ingenuity and innovation in the conduct of the appeal” (finding no. 12); that the success of their efforts had been “total,” and that they had “achieved for Plaintiff and her class a legal and constitutional victory and vindication of very high magnitude” (no. 14); and that their work had attained for them “the highest possible stature in their legal community” and “the approval of their colleagues in the Bar.” (No. 15.)
Concerning the Time spent by the attorneys on the appeal, the court found in effect that much of it was attributed to tactical obduracy by the Attorney General which amounted to outright bad faith.5 The only finding expressly made on the subject of Time spent as such (no. 13) includes this language: “The attention given to the case by Plaintiff's attorneys was considerable. Not only did they expend a very Substantial amount of time in defending the Judgment on appeal, but they were exceptionally well prepared and diligent at all stages. . . . In addition to The hours spent on the appeal As shown in the record, additional hours have been spent, and are being spent, in this matter. The Amount of time spent by Plaintiff's attorneys was Substantial. . . . While The hours spent are only one criterion, and not the sole criterion, for determining the amount of fees on appeal, they may be used in conjunction with other elements in determining the propriety of the amount awarded, and the Court has done so. . . .” (Emphasis added.)
In a perorative finding stated as a conclusion of law (see fn. 3, Ante ), the court pronounced that the “reasonable value” of the attorneys' services was $75,000. This finding summed up several of the factors found as recited above, but it did not refer to the time actually spent by either attorney on the appeal. The court made no finding as to the value of the services rendered by either attorney severally, nor did it evaluate their joint or several services on a per-hour or other unit-of-time basis.
The trial court's determination that respondent is entitled to An award of attorneys' fees on the former appeal is not disputed by the present appellants. We therefore affirm the judgment to the extent that it awards attorneys' fees as such. For the reasons next appearing, we reverse it as to the amount awarded.
The three equitable theories upon which a successful litigant's attorney may be compensated, from the fruits of the litigation or by the other side in a particular case warranting departure from the general rule to the contrary, are the “common fund doctrine,” the “substantial benefit rule,” and the “private attorney general concept.” (Serrano v. Priest (1977) 20 Cal.3d 25 (“Serrano III ”), 31-32, 34-48, 141 Cal.Rptr. 315, 569 P.2d 1303.) In Mandel I, we cited all three theories in reviewing the $25,000 award made to respondent as compensation for the services rendered by Messrs. Kaplan and Margolin before that appeal had been taken. (Mandel v. Hodges, supra, 54 Cal.App.3d 596 at pp. 619-624, 127 Cal.Rptr. 244.) We declined to apply the “private attorney general concept” for lack of authoritative California precedent at the time (Id., at p. 620, 127 Cal.Rptr. 244), but affirmed the award on the basis of the “substantial benefit rule.” (Id. at pp. 620-623,127 Cal.Rptr. 244. See Serrano v. Priest, supra, at p. 39, 141 Cal.Rptr. 315, 569 P.2d 1303.)
In deciding Serrano III almost two years later (see Serrano v. Priest, supra, 20 Cal.3d at p. 25, 141 Cal.Rptr. 315, 569 P.2d 1303), the Supreme Court discussed all three theories (Id., at pp. 34-49, 141 Cal.Rptr. 315, 569 P.2d 1303); held that the “private attorney general concept” was a valid basis for awarding attorneys' fees, in an appropriate case, for services rendered both in a trial court and on appeal in this State (Id., at 31-33, 44-47, 49, 141 Cal.Rptr. 315, 569 P.2d 1303); and affirmed an award made for trial court services on that basis. (Id., at pp. 31-32, 47, 141 Cal.Rptr. 315, 569 P.2d 1303.) More significantly for our purposes, the Serrano III court formulated the factors which are to be taken into account by a court making such award in the exercise of its discretion. The award before it encompassed professional services rendered in the trial court by two separate publicly-funded law firms and by certified law students who had apparently worked on the case in association with both. Affirming it, the court expressed its formulation as follows:
“Fundamental to . . . (the trial court's) . . . determination and properly so was a careful compilation of the time spent And reasonable hourly compensation of Each attorney and certified law student involved in the presentation of the case. That compilation yielded a total dollar figure of $571,172.50, of which $225,662.50 was applicable to . . . (one firm) . . . , $320,710 to . . . (the other) . . . , and $24,800 to time spent by certified law students. Using these figures as a touchstone, the court then took into consideration various relevant factors, of which some militated in favor of augmentation and some in favor of diminution. Among these factors were: (1) the novelty and difficulty of the questions involved, and the skill displayed in presenting them; (2) the extent to which the nature of the litigation precluded other employment by the attorneys; (3) the contingent nature of the fee award, both from the point of view of eventual victory on the merits and the point of view of establishing eligibility for an award; (4) the fact that an award against the state would ultimately fall upon the taxpayers; (5) the fact that the attorneys in question received public and charitable funding for the purpose of bringing law suits of the character here involved; (6) the fact that the monies awarded would inure not to the individual benefit of the attorneys involved but the organizations by which they are employed; and (7) the fact that in the court's view the two law firms involved had approximately an equal share in the success of the litigation. Taking all of these factors into consideration, the court proceeded to make a total award in the amount of $800,000, to be shared equally by each of the two law firms representing plaintiffs.
“The ‘experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong.’ (Citations.) We find no abuse of discretion here.” (Serrano v. Priest, supra, 20 Cal.3d 25 at pp. 48-49, 141 Cal.Rptr. at p. 328, 569 P.2d at p. 1316 (footnotes omitted).)
Serrano III was decided on October 4, 1977 (see Serrano v. Priest, supra, 20 Cal.3d at p. 25, 141 Cal.Rptr. 315, 569 P.2d 1303), one year after the judgment in the present case was entered but during the pendency of this appeal. Respondent's motion was nevertheless heard and granted after publication of the federal and other authorities upon which the Serrano III formulation was based in substantial part. (See Id., at p. 48, fn. 23, 141 Cal.Rptr. 315, 569 P.2d 1303 (omitted from the above quotation), citing City of Detroit v. Grinnell Corporation (2d Cir. 1974) 495 F.2d 448, 470; Lindy Bros. Bldrs., Inc. of Phila. v. American R. & S. San. Corp. (3d Cir. 1973) 487 F.2d 161, 167-169; Dawson, Lawyers and Involuntary Clients in Public Interest Litigation (1975) 88 Harv.L.Rev. 849, 925-929.) Both sides have cited Serrano III upon the premise that it applies in this case. The decision does not state that the formulation changed existing California law, and we do not perceive that it had this effect. For all these reasons, we deem it controlling here. (See People v. Heredia (1971) 20 Cal.App.3d 194, 199, 97 Cal.Rptr. 488.)
[ ] The formulation also applies here despite the fact that it establishes the “touchstone” components of an award of attorneys' fees made pursuant to the “private attorney general concept” which has not been applied in the present case. (Mandel v. Hodges, supra, 54 Cal.App.3d 596 at p. 620, 127 Cal.Rptr. 244.) As was pointed out in the federal decision quoted in the Serrano III footnote cited above, the “touchstone” components (time spent and value per unit of time) come into play “once it is recognized that the court's role in equity is to provide just compensation for the attorney . . . .” (City of Detroit v. Grinnell Corporation, supra, 495 F.2d 448 at p. 470. See also Lindy Bros. Bldrs., Inc. of Phila. v. American R. & S. San. Corp., supra, 487 F.2d 161 at p. 167.) Each of the three theories which will underlie an award of attorneys' fees, for services rendered in a court of this State and payable by a source other than the client in an appropriate case, involves an exercise of the court's equitable powers i. e., of its “role in equity” in this regard. (Cf. Serrano v. Priest, supra, 20 Cal.3d 25 at pp. 34, 44, 141 Cal.Rptr. 315, 569 P.2d 1303. See Mandel v. Hodges, supra, at pp. 619-621, 127 Cal.Rptr. 244.) The “touchstone” components are therefore the same in an award made under any of the theories.
Having established that the Serrano III formulation applies, we immediately perceive that the findings summarized above do not follow it. The only “findings” relative to the time spent by respondent's attorneys on Mandel I are the oblique references, in finding no. 13, to the “substantial amount of time” they “expended” and to “the hours spent on the appeal as shown in the record.” Neither is a finding of the time actually spent by either attorney or by both. The court did not find the value of the services of either on a per-hour or other unit-of-time basis.
The elaborate findings made thus covered “various relevant factors, of which some militated in favor of augmentation” (Serrano v. Priest, supra, 20 Cal.3d 25 at p. 49, 141 Cal. at p. 328, 569 P.2d at 1316) but, because the two “touchstone” factors were not found, their arithmetical product is missing as the base to be augmented. If and when they had been found and calculated together in the first instance, the full range of discretion vested in the trial court in such matters would properly have come into play when it made further calculations by way of “augmentation” or “diminution” of the base figure. (Serrano v. Priest, supra.) An abuse of that discretion is established because the court exercised it other than from the base figure, which was “(f) undamental” to the determination of the award. (Id., at p. 48, 141 Cal.Rptr. 315, 569 P.2d 1303.) The abuse of discretion requires reversal of the award as to its amount.6
Discussion of certain additional factors is warranted for the guidance of the trial court and the parties upon reconsideration of the amount to be awarded.
Appellants contend that the amount should be limited to compensation for the services rendered by respondent's attorneys on Mandel I in defending the constitutional principles established in the initial judgment, and that it should not include compensation for their services in “protecting” the $25,000 award previously made for their services in the trial court. (See Mandel v. Hodges, supra, 54 Cal.App.3d 596 at pp. 619-624, 127 Cal.Rptr. 244.) We disagree.
As that court indicated on respondent's motion (in finding no. 8, quoted Supra ), the initial judgment also established the principle that a successful litigant may be awarded attorneys' fees, pursuant to the “ substantial benefit rule,” in an action of this nature “against the State of California.” The successful defense of that principle on appeal pursued and sustained the same “substantial benefit” to respondent, to the class she represents, and to the “general public interest” which her action has served. (See Mandel v. Hodges, supra, 54 Cal.App.3d 596 at pp. 619-622,127 Cal.Rptr. 244.) It therefore warrants an unbifurcated award of attorneys' fees pursuant to the same rule. Decisions cited for appellants' argument are distinguishable because they involved applications of the “common fund doctrine” and efforts by attorneys which were essentially self-serving and did not contribute to the recovery or enhancement of the particular “fund” involved. (Gabrielson v. City of Long Beach (1961) 56 Cal.2d 224, 229-230, 14 Cal.Rptr. 651, 363 P.2d 883; City of Detroit v. Grinnell Corp. (2d Cir. 1977) 560 F.2d 1093, 1099-1100, 1102 (second appeal); Lindy Bros. Builders, Inc. v. Am. Radiator Etc. (3d Cir. 1976) 540 F.2d 102, 109-111 (second appeal).)
We reach the opposite conclusion as to an award of fees for the services of respondent's attorneys on This appeal, which she has explicitly requested. In the first place, she had not prevailed here except for the holding that she is entitled to An award for their services on Mandel I. She has not been required to establish that point because appellants conceded it.
Secondly, the “substantial benefit” principle defended and sustained on that appeal does not extend to this one because only the attorneys now stand to gain or lose. Since their efforts this time are essentially in pursuit of their own interests, the “substantial benefit rule” may not now be applied in their favor. (Cf. Gabrielson v. City of Long Beach, supra, 56 Cal.2d 224 at pp. 229-230, 14 Cal.Rptr. 651, 363 P.2d 883.) No award of fees is to be made for their services on this appeal.7
As mandated by Serrano III, the evidence to be offered on remand should commence with clear proof of the “touchstone” factors required: i. e., the time reasonably spent by each attorney on Mandel I and his “reasonable hourly compensation.” (Serrano v. Priest, supra, 20 Cal.3d 25 at p. 48,141 Cal.Rptr. 315, 569 P.2d 1303.) The first factor should be limited to time spent on the merits of the appeal, and should not include peripheral activities unless they may be shown to have contributed to the result reached. (See fns. 2 and 6, Ante.) Useful guidance on the second factor appears in the federal decisions cited in Serrano III, as follows:
“ The value of an attorney's time generally is reflected in his normal billing rate. A logical beginning in valuing an attorney's services is to fix a reasonable hourly rate for his time taking account of the attorney's legal reputation and status (partner, associate). Where several attorneys file a joint petition for fees, the court may find it necessary to use several different rates for the different attorneys. Similarly, the court may find that the reasonable rate of compensation differs for different activities.” (Lindy Bros. Bldrs., Inc. of Phila. v. American R. & S. San. Corp., supra, 487 F.2d 161 at p. 167 (as partly quoted in City of Detroit v. Grinnell Corporation, supra, 495 F.2d 448 at p. 473). See also Dawson, Op. cit. supra, 88 Harv.L.Rev. 849 at pp. 927-928.)
Having developed the “touchstone” figure from this proof, the court is to proceed by way of augmenting or diminishing it. (Serrano v. Priest, supra, 20 Cal.3d 25 at p. 49, 141 Cal.Rptr. 315, 569 P.2d 1303.) The broad discretion to be exercised at that point should not be restricted by ritualistic “litanies” of the various factors to be proved or considered. (See Dawson, Op. cit. supra, 88 Harv.L.Rev. 849 at p. 927.) It will suffice to state that some of the seven factors approved in Serrano III, supra, may be applied in the court's discretion without limiting it.
Those factors do not include, nor should the final findings reflect, the attribution of bad faith to the Attorney General which is suggested in present finding no. 9 (quoted in fn. 5, Ante ). If his tactics in Mandel I increased the demands made on respondent's attorneys' time, the result will appear in the court's “touchstone” compilation. There is no occasion to impute it to impropriety on his part. From the vantage we held when we decided the former appeal, we may state that he pursued it in total good faith. The contrary imputation in finding no. 9 is simply unsupported.
[ ] We also observe that the precept quoted in Serrano III, holding that “ ‘(t) he experienced trial judge is the best judge of the value of professional services,’ ” is expressly directed to services “ ‘rendered In his court.’ ” (Serrano v. Priest, supra, 20 Cal.3d 25 at p. 49, 141 Cal.Rptr. at p. 328, 569 P.2d at p. 1317 (emphasis added).) The expression does not limit his competence to evaluate services rendered on appeal in another court, but that function may require more by way of objective proof than he would need with regard to a professional performance he has personally witnessed.8 It might well be provided or his own evaluation buttressed by expert testimony, a reliable resource which has not been employed in this case despite its common use in the evaluation of attorneys' services. (See Witkin, California Evidence (2d ed. 1966) s 422, p. 381; 1 Witkin, Procedure, Op. cit. supra, Attorneys, s 96, pp. 105-106.)
The judgment is affirmed insofar as it establishes that respondent is entitled to an award of attorneys' fees for the services rendered by her attorneys on the previous appeal in this action. As to the amount awarded, the judgment is reversed. The cause is remanded to the trial court with directions to proceed consistent with the views expressed in this opinion. No party shall recover costs on the present appeal.
1. Shelley Mandel, the plaintiff who brought the action against various State officials, was the respondent on the former appeal. She is the respondent on this one as well. The name changes in its title were made by the trial court because some of the defendants and former appellants have been superseded by individuals who currently hold the respective State offices involved. The Attorney General has represented the defendants since the inception of the action and on both appeals. We occasionally refer to the first appeal as “Mandel I.”
2. It may be mentioned at this point that both attorneys filed and testified to documentary records, chronologically kept by each, of the time expended on the former appeal. The total amount of time recorded by both, between them, was approximately 267 hours. The figure includes time spent on such essential tasks as brief-writing, and such secondary activities as routine correspondence and telephone calls, by both attorneys. As to one of them, it includes such apparently extraneous pursuits as a “lecture” to the American Jewish Congress and a “talk” given to a B'nai B'rith lodge. None of the evidence provided any basis for evaluating either attorney's services on a per-hour basis.
3. The court frequently stated findings of fact as conclusions of law, and vice versa. The formal designation given either is of no significance, provided we distinguish one from the other. (See 4 Witkin, California Procedure (2d ed. 1971) Trial, s 323, pp. 3126-3128.)
4. The “interplay” reference is to the part of Mandel I which cites and discusses the “various sections of the Government Code” involved in the executive designation of the Good Friday “holiday” pursuant to several of them. (Mandel v. Hodges, supra, 54 Cal.App.3d 596 at pp. 605-608, 127 Cal.Rptr. 244.)
5. This determination appears in finding no. 9, which we quote in pertinent part as follows: “The appeal was uncommonly difficult and complex; the difficulty and complexity were . . . compounded by the manner in which the defense elected to proceed . . . in certain past aspect of the appeal, including, but not limited to, the following: . . . With no basis in fact, theology, history, law or common knowledge, advising the . . . (appellate courts involved) . . . that the closing of State offices on Good Friday was not because it was a solemn Christian holiday (Sic ), but, instead, to provide State employees with an annual three-hour . . . ‘time of rest and relaxation’ . . . and similar specious, unsupported statements. The Attorney General had no factual basis for asserting that a secular purpose existed for said holiday and knew that the truth would lead necessarily to a Judgment that the holiday violated the Federal and State Constitutions. . . . Although the Establishment Clause of the First Amendment and Article I, Section 4, of the California Constitution . . . prohibited the declaration of Good Friday as a State holiday, Defendants and the Attorney General argued that there was no violation. Instead, throughout the appeal, such officers vigorously, persistently, and strenuously opposed the impact and effect of the law . . . by making . . . (such) . . . specious factual assertions in their briefs . . . . By reason of the failure to follow the law, as stated . . . , Defendants' attorneys (Sic ) unnecessarily prolonged the proceedings and made the appeal more difficult . . . .”
6. The “(f)undamental” nature of the two “touchstone” factors means that each presents a material issue upon which an explicit finding would be indispensable in any case where formal findings are mandatory. (Guardianship of Brown (1976) 16 Cal.3d 326, 332-333, 128 Cal.Rptr. 10, 546 P.2d 298.) Formal findings become mandatory when requested by a party “upon the trial of a question of fact by the court.” (Code Civ.Proc., s 632; Rule 232, California Rules of Court; Guardianship of Brown, supra, at p. 332, 128 Cal.Rptr. 10, 546 P.2d 298.) Such “trial” was conducted on respondent's motion for attorneys' fees, and formal findings were requested, but they are not ordinarily required in proceedings upon a motion. (In re Marriage of Simmons (1975) 49 Cal.App.3d 833, 836, 123 Cal.Rptr. 213.) Formal findings were similarly requested and made on the motion for attorneys' fees which produced the award affirmed in Serrano III (see Serrano v. Priest, supra, 20 Cal.3d 25 at p. 32, 141 Cal.Rptr. 315, 569 P.2d 1303), but the Supreme Court reviewed them without holding that they had been required. The decision does establish (1) that an award of attorneys' fees in a case of this nature must be supported by a record showing, in formal findings or otherwise, that it was calculated from a base “compilation of the time spent and reasonable hourly compensation of each attorney” and (2) that an abuse of discretion appears in the absence of such showing. (Id., at pp. 48-49, 141 Cal.Rptr. 315, 569 P.2d 1303.) Reversing the present award on the latter basis, we also do not reach the question whether formal findings became mandatory when they were requested.
7. As pertinent here, the judgment states: “If there is an appeal from this Judgment, the Court may again consider the efforts and results of Plaintiff's attorneys on such appeal and may in its discretion award them further attorneys' fees thereafter.” The trial court will not have jurisdiction to do this unless we invest it. (American City Bank v. Zetlen (1969) 272 Cal.App.2d 65, 66-70, 76 Cal.Rptr. 898 (cited in Serrano v. Priest, supra, 20 Cal.3d 25 at p. 49, 141 Cal.Rptr. 315, 569 P.2d 1303).) We expressly withhold it.
8. This observation is pertinent because at least one of the present findings overstates the efforts of respondents' attorneys on Mandel I. We refer to finding no. 10, which cites “resourcefulness” with regard to the “interplay of various sections of the Government Code.” (See the text at fn. 4, Ante.) The “interplay” discussion in Mandel I reflects the work of this court alone, which was undertaken because the appeal required it and the parties' briefs did not explore it. We do not disparage the work of respondent's attorneys by identifying something they did not do.
RATTIGAN, Acting Presiding Justice.
CHRISTIAN and PAIK (Assigned by the Chairperson of the Judicial Council), JJ., concur.