PRESS v. LUCKY STORES INC (1982)

Plaintiffs appeal from an order awarding them attorneys' fees in the amount of $112.98 pursuant to Code of Civil Procedure section 1021.5, contending that the trial court abused its discretion in its method of calculating the fee.

Plaintiffs were proponents of an initiative measure which they sought to qualify for the June 1980 statewide election.¹  The proposed measure would have levied a tax on oil, gas, coal, and uranium businesses and earmarked the proceeds for bus and rail service and development of alternative transportation fuels.   Under the Elections Code, plaintiffs had until November 30, 1979, to submit 346,119 valid signatures of registered California voters, and their goal was to obtain 500,000 signatures.

Among the locations where plaintiffs desired to set up a stand to gather petition signatures from the public was in front of the Lucky Discount Center (a supermarket) at 2627 Lincoln Boulevard in Santa Monica.   The store was located in a shopping center on the corner of Lincoln and Ocean Park Boulevards which contained 16 small businesses in addition to the Lucky supermarket and parking for 252 automobiles.   In fact from October 2 to October 6, 1979, plaintiffs' volunteers successfully gathered signatures in front of the Lucky store.   Using two-person teams, one person at each of two entrances to the store, they solicited signatures in a courteous and respectful manner and did not block pedestrian traffic in and out of the store.   However, on October 9 when the volunteers set up again, store officials informed them that they would have to leave.   Store officials called the police who informed the volunteers that they could solicit only on the public sidewalk and implied they would be arrested.   Subsequent contacts with executives in defendant's regional office and defendant's attorney resulted in refusal to permit plaintiffs to solicit signatures in front of the store.

On October 17, 1979, plaintiffs filed a complaint for injunction, temporary restraining order, and order to show cause re preliminary injunction.   Plaintiffs relied on the March 30, 1979, decision of the California Supreme Court in Robins v. Pruneyard Shopping Center, 23 Cal.3d 899, 153 Cal.Rptr. 854, 592 P.2d 341, which held that the free speech and petition provisions of the California Constitution protect speech and petitioning, if reasonably exercised, in shopping centers even when the centers are privately owned.   Over defendant's opposition the trial court issued a temporary restraining order on October 17 and a preliminary injunction on November 21 restraining defendant from denying access to plaintiffs to circulate their initiative petitions at the Lucky Discount Center located at 2627 Lincoln Boulevard, so long as plaintiffs and their agents refrained from blocking pedestrian traffic and from unreasonably interfering with the movement of store patrons.

Plaintiffs were represented by the Center for Law in the Public Interest (CLPI), a nonprofit corporation which provides legal services without charge to individuals and citizens groups in cases which raise issues of broad public interest.

Plaintiffs obtained approximately 3,000 signatures at this location and 556,000 signatures statewide.   Their initiative measure qualified as Proposition 11 on the June 1980 ballot, but was defeated by the voters.

On March 4, 1981, after the Pruneyard decision had been affirmed by the United States Supreme Court,² plaintiffs filed a motion for an award of attorneys' fees pursuant to Code of Civil Procedure section 1021.5.

Section 1021.5 is a codification of the “private attorney general” theory for awarding attorneys' fees in cases where a party has enforced an important right affecting the public interest.  (Serrano v. Priest [Serrano III], 20 Cal.3d 25, 43–49, 141 Cal.Rptr. 315, 569 P.2d 1303;  Woodland Hills Residents Assn., Inc., v. City Council, 23 Cal.3d 917, 925, 933, 154 Cal.Rptr. 503, 593 P.2d 200;  Baggett v. Gates, 32 Cal.3d 128, 142, 185 Cal.Rptr. 232, 649 P.2d 874.)³  The statute authorizes an award if (1) the action “has resulted in the enforcement of an important right affecting the public interest”;  (2) “a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons”;  and (3) “the necessity and financial burden of private enforcement are such as to make the award appropriate ․”  (Code Civ.Proc., § 1021.5;  Woodland Hills Residents Assn., Inc. v. City Council, supra, 23 Cal.3d at pp. 935–942, 154 Cal.Rptr. 503, 593 P.2d 200;  Baggett v. Gates, supra.)

 If a party is entitled to attorneys' fees under section 1021.5, the amount of such fees is determined by the guidelines laid down by our Supreme Court in Serrano III, supra.   The “fundamental,” “touchstone,” or “starting point” of every fee award is a careful compilation of the time spent and reasonable hourly compensation of each attorney involved in the case.  (Id., 20 Cal.3d at pp. 48 & fn. 23, 49, 141 Cal.Rptr. 315, 569 P.2d 1303;  see Mandel v. Lackner, 92 Cal.App.3d 747, 757–758, 155 Cal.Rptr. 269;  Werschkull v. United California Bank, 85 Cal.App.3d 981, 1007, 149 Cal.Rptr. 829;  Save El Toro Assn. v. Days, 98 Cal.App.3d 544, 554, 159 Cal.Rptr. 577;  Lucchesi v. City of San Jose, 104 Cal.App.3d 323, 336, 163 Cal.Rptr. 700.)   According to the Supreme Court, “ ‘[a]nchoring the analysis to this concept is the only way of approaching the problem that can claim objectivity ․’ ”  (Serrano III, supra, 20 Cal.3d at p. 48, fn. 23, 141 Cal.Rptr. 315, 569 P.2d 1303.)   Using these figures as a touchstone, the court may then take into consideration various other relevant factors, which may favor either augmentation or diminution of the award, including (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 the attorneys in question received public and charitable funding for the purpose of bringing lawsuits of the character involved;  and (5) the fact that the moneys awarded would inure not to the individual benefit of the attorneys involved but the organizations by which they are employed.  (Serrano III, supra, at p. 49, 141 Cal.Rptr. 315, 569 P.2d 1303;  Lucchesi v. City of San Jose, supra.)

In this case plaintiffs submitted to the trial court a touchstone figure of $13,960.   This figure was based on 12.5 hours spent by one senior attorney at a rate of $135 an hour, 115 hours spent by two junior attorneys at $77 per hour, and 54 hours spent by a first year attorney at $62 per hour.⁴  Plaintiffs requested that this touchstone figure be multiplied by a factor of 1.5, for a total of $20,940, “to reflect the broad public impact of the results obtained and to compensate for the high quality of work performed and the contingencies involved in undertaking this litigation.”

Defendant opposed the motion, arguing both that plaintiffs were not entitled to any fees because they had not conferred a significant benefit on the public or a large number of persons, and that, if plaintiffs were entitled to any fees, the amount requested was unreasonable.   As to the first point, defendant argued that the litigation was limited to a single store and involved a simple application of Robins v. Pruneyard Shopping Center, supra, 23 Cal.3d 899, 153 Cal.Rptr. 854, 592 P.2d 341.   As to the second point, defendant argued that no novel question of law was involved and the number of hours spent on the case was grossly unreasonable in light of the fact that the case did not go to trial, was resolved on affidavits, and involved a simple application of the Pruneyard case to a single store.   Plaintiffs argued that the effect of the litigation went beyond a single store because plaintiffs had been able to use their success in this case to persuade store managers and police officers at other stores that they had the right to solicit.   Defendant argued that the effect of this case on other stores was not substantiated and that to the extent such persuasion occurred, it was not primarily the result of plaintiffs' efforts in this case but of the Pruneyard decision.

However, instead of engaging in a Serrano-type analysis of the various factors which might augment or diminish the touchstone figure, the trial court devised its own arbitrary formula for determining the amount of fees.   The court first requested the parties to determine how many signatures were obtained at the Lucky Store in Santa Monica.   Plaintiffs estimated that 3,000 signatures were obtained at that store.⁵  The court then stated, in its order granting attorneys' fees:  “[T]he Court having determined that plaintiffs have satisfied the statutory requisites to an award of attorneys' fees under Code of Civil Procedure Section 1021.5, that evaluation of the benefit conferred by this litigation within the meaning of Section 1021.5 should be limited to the impact on the Santa Monica Lucky Store, and that a reasonable fee may be computed by multiplying the $20,940 fee requested by 3,000/556,000, the ratio of petition signatures obtained at the Santa Monica Lucky Store to the number of signatures obtained statewide.  [¶]  IT IS ORDERED that defendant LUCKY STORES, INC. shall pay to plaintiffs' counsel, the CENTER FOR LAW IN THE PUBLIC INTEREST, the sum of $112.98 as reasonable attorneys' fees in this matter.”

DISCUSSION

 We agree with plaintiffs that the trial court erred in its approach to awarding the fees.   If all the requirements of Code of Civil Procedure section 1021.5 were met, Serrano III and the subsequent cases cited at page 642, ante, require the court to consider a variety of factors in augmentation or diminution of the touchstone figure.   The trial court here did not engage in a careful weighing of the variety of considerations which the cases have discussed, but instead adopted a facile formula approach which excluded consideration of all other factors and which, if taken as the sole criteria for determining fees, resulted in an award bearing no reasonable relation to the touchstone figure.  (See, e.g., Werschkull v. United California Bank, supra, 85 Cal.App.3d at p. 1007, 149 Cal.Rptr. 829.)

 Plaintiffs next argue that the trial court found that they met the requirements of the statute and that their touchstone figure was reasonable, and therefore all that remains to be done on remand is to award a different amount more closely resembling the touchstone.   We do not agree.   It is apparent that in deciding to “evaluate” the benefit conferred by this litigation by application of a tiny fraction, the trial court merged the issues of the significance of the benefit conferred and the calculation of the amount of fees.   Although in one breath the court impliedly found under the statute that a significant benefit had been conferred upon the general public or a large number of people, in the next breath the court indicated that the benefit conferred was so insignificant that the attorneys should be compensated for only three five hundred fifty-sixths of their time.   Despite the court's recitation that the statutory requisites had been met, its action showed that the court did not really think a significant benefit had been conferred.   In the trial court's approach, the issues of the statutory element of significant benefit and the calculation of the amount of the award were inextricably interwoven.   In these circumstances, on remand the trial court should reconsider not just the amount of the award but the whole question of whether the statutory requirements for eligibility for an award have been met.   This is true even though defendant has not cross-appealed from the award of the nominal sum of $112.98.   Where, as here, the trial court's approach appears to have merged or compromised the issues of liability and damages, the matter should be remanded for further proceedings on all issues in order to do justice to the parties.  (See Hamasaki v. Flotho, 39 Cal.2d 602, 604–605, 608, 248 P.2d 910;  Blache v. Blache, 37 Cal.2d 531, 538, 233 P.2d 547;  Rangel v. Graybar Electric Co., 70 Cal.App.3d 943, 950–951, 139 Cal.Rptr. 191.)

 Whether the statutory requisites have been met is a question of fact for the trial court in the first instance.  (Rumford v. City of Berkeley, 31 Cal.3d 545, 559, 183 Cal.Rptr. 73, 645 P.2d 124;  Woodland Hills Residents Assn., Inc. v. City Council, supra, 23 Cal.3d at pp. 940–941, 154 Cal.Rptr. 503, 593 P.2d 200.)   On remand in this case the court should consider and resolve the disputed factual issues as to the number of persons affected at the Santa Monica store and whether there were significant effects attributable to this litigation extending beyond the one store in question.

In determining whether a significant benefit has been conferred by this litigation the court will have guidance from our Supreme Court in Woodland Hills Residents Assn., Inc. v. City Council, supra, 23 Cal.3d at pages 939–940, 154 Cal.Rptr. 503, 593 P.2d 200.   There the court construed the “significant benefit” language of section 1021.5 and was careful to point out that the “important right” and “significant benefit” requirements of the statute are separate and independent elements.  “Of course, the public always has a significant interest in seeing that legal strictures are properly enforced and thus, in a real sense, the public always derives a ‘benefit’ when illegal private or public conduct is rectified.   Both the statutory language (‘significant benefit’) and prior case law, however, indicate that the Legislature did not intend to authorize an award of attorney fees in every case involving a statutory violation.   We believe rather that the Legislature contemplated that in adjudicating a motion for attorney fees under section 1021.5, a trial court would determine the significance of the benefit, as well as the size of the class receiving benefit, from a realistic assessment, in light of all the pertinent circumstances, of the gains which have resulted in a particular case.”  (Id.;  emphasis in original.) ⁶

If the evidentiary questions in this case were resolved in plaintiffs' favor, it could be argued that a large number of people were benefited by the litigation.   In fact plaintiffs argue that even if the benefit be limited to patrons of the Santa Monica store, the number should not be measured by the 3,000 who agreed with plaintiffs and signed the petition, but should also extend to an unknown number of additional persons who were solicited and informed about a public issue but decided not to sign.

However, the court would also be justified in concluding that no significant benefit within the meaning of the statute had been conferred.   As explained by our Supreme Court in the Woodland Hills case, supra, 23 Cal.3d at pages 939–940, 154 Cal.Rptr. 503, 593 P.2d 200, the fact that an important right was involved may satisfy the first element of the statute but is not necessarily determinative as to whether a significant benefit was conferred.   They are two separate questions, and the latter determination is to be made based upon a realistic assessment in light of all the pertinent circumstances, of the gains resulting from the case.   The trial court could reasonably find that, viewed realistically, this is not a case where the patrons of the Santa Monica Lucky store would have been deprived of their rights had this litigation never been brought.   Presumably there were innumerable other locations at which and methods by which these persons could be exposed to the initiative and could exercise their right to sign the petition.   For these persons, was encountering plaintiffs' petition-gathering stand at this location realistically a significant benefit, or just a minor convenience? ⁷  Although reasonable minds might differ, enabling the patrons of the Santa Monica Lucky store to sign petitions at that exact location does not strike us as in the same class with:  invalidating a statewide school financing system which denies equal educational opportunity to thousands of public school students (Serrano III, supra, 20 Cal.3d at p. 46, 141 Cal.Rptr. 315, 569 P.2d 1303);  establishing landmark precedent affecting thousands of public employees (Baggett v. Gates, supra, 32 Cal.3d at p. 143, 185 Cal.Rptr. 232, 649 P.2d 874;  Wilkerson v. City of Placentia, supra, 118 Cal.App.3d 435, 445, 165 Cal.Rptr. 514) or unemployed pregnant workers (Gunn v. Employment Development Dept., supra, 94 Cal.App.3d 658, 666, 156 Cal.Rptr. 584);  or compelling a city or county to observe county to observe environmental protection, zoning and planning laws, to the presumed benefit of all its residents (Woodland Hills Residents Assn., Inc. v. City Council, supra, 23 Cal.3d at p. 940, 154 Cal.Rptr. 503, 593 P.2d 200;  Lucchesi v. City of San Jose, supra, 104 Cal.App.3d at p. 335, 163 Cal.Rptr. 700;  Friends of “B” Street v. City of Hayward, supra, 106 Cal.App.3d 988, 995, 165 Cal.Rptr. 514;  Rich v. City of Benicia, supra, 98 Cal.App.3d 428, 436, 159 Cal.Rptr. 473).  (Cf. Bruno v. Bell, supra, 91 Cal.App.3d 776, 786–787, 154 Cal.Rptr. 435 [action compelling transfer of tax money from one public fund to another did not confer significant benefit on public];  Brentwood Assn. for No Drilling, Inc. v. City of Los Angeles, supra, 134 Cal.App.3d 491, 499, 506–508, 184 Cal.Rptr. 664 [trial court could reasonably find that action compelling preparation of environmental impact report benefited only a few landowners];  Woodland Hills Residents Assn., Inc. v. City Council, supra, 23 Cal.3d at p. 940, 154 Cal.Rptr. 503, 593 P.2d 200 [remand for trial court to consider whether action benefited a few landowners or the general public].)

Even if the trial court finds that the significant benefit element of the statute has been satisfied, the court will be free on remand to consider the skill shown and whether the number of hours of attorney time was reasonable, proper factors to be considered under Serrano III, supra, 20 Cal.3d at page 49, 141 Cal.Rptr. 315, 569 P.2d 1303, in calculating the amount of the fee.  (See also Serrano v. Unruh, 32 Cal.3d 621, 635, 186 Cal.Rptr. 754, 652 P.2d 985.) ⁸

The order granting attorneys' fees is reversed and the cause remanded to the trial court for further proceedings consistent with the views expressed in this opinion.   The parties to pay their own costs on appeal.

FOOTNOTES

1.   Plaintiff Bill Press was the official proponent of the initiative.  (Elec.Code, § 3502.)   Plaintiff California Oil Profits Coalition, an unincorporated association, was a coalition of citizens and labor groups favoring the initiative.

2.   Pruneyard Shopping Center v. Robins, 447 U.S. 74, 100 S.Ct. 2035, 64 L.Ed.2d 741.

3.   Code of Civil Procedure section 1021.5 provides:“Upon motion, 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 if:  (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any.   With respect to actions involving public entities, this section applies to allowances against, but not in favor of, public entities, and no claim shall be required to be filed therefor.”

4.   CLPI's most important source of funding is court awarded attorneys' fees.   The hourly rates used in the computation were based upon an historical average of past awards to CLPI, adjusted for inflation.

5.   The 3,000 figure was vigorously contested by defendant.   Records of the signatures obtained at the Santa Monica store were no longer available and the 3,000 figure was an estimate only.   Defendant argued that a prior declaration submitted by plaintiffs showed that signatures were solicited at the Santa Monica store for only 5 days after the temporary restraining order was issued, and that the 3,000 signature figure represented 90 signatures per hour per volunteer.

6.   For other cases construing the significant benefit requirement of section 1021.5, compare Baggett v. Gates, supra, 32 Cal.3d at page 142, 185 Cal.Rptr. 232, 649 P.2d 874;  Lucchesi v. City of San Jose, supra, 104 Cal.App.3d at page 335, 163 Cal.Rptr. 700;  Gunn v. Employment Development Dept., 94 Cal.App.3d 658, 666, 156 Cal.Rptr. 584;  Rich v. City of Benicia, 98 Cal.App.3d 428, 436, 159 Cal.Rptr. 473;  Friends of “B” Street v. City of Hayward, 106 Cal.App.3d 988, 995, 165 Cal.Rptr. 514;  Wilkerson v. City of Placentia, 118 Cal.App.3d 435, 445, 173 Cal.Rptr. 294, with Bruno v. Bell, 91 Cal.App.3d 776, 786–787, 154 Cal.Rptr. 435;  Brentwood Assn. for No Drilling, Inc. v. City of Los Angeles, 134 Cal.App.3d 491, 499, 507–508, 184 Cal.Rptr. 664;  Save El Toro Assn. v. Days, supra, 98 Cal.App.3d at page 555, 159 Cal.Rptr. 577.

7.   Moreover, if this litigation be viewed primarily as vindicating plaintiffs' right to solicit at a particular location, then only a tiny number of volunteers was benefited, and the same question whether this was a significant benefit or merely a convenience could also be raised.

8.   Actually, of the 181.5 attorney hours spent on this case, 56.5 were devoted exclusively to the motion for attorneys' fees.

ASHBY, Associate Justice.

FEINERMAN, P.J., and HASTINGS, J., concur.