CUADRA v. BRADSHAW (1997)

In this case, we decide that the statute of limitations for an administrative claim filed under Labor Code 1 section 98 is tolled upon the date the claim is filed.   Labor Commissioner Victoria Bradshaw contends that the applicable statute of limitations period is tolled only upon the date of the administrative hearing determining the claim.   We disagree and affirm the trial court's judgment granting the petition for writ of mandate.

FACTUAL BACKGROUND

Petitioners filed claims for unpaid wages with the Labor Commissioner pursuant to section 98, subdivision (a).   They alleged that due to the Labor Commissioner's policy of not tolling the statute of limitations upon the filing of claims, their claims for unpaid wages were limited to the three year period immediately preceding the hearing or decision on the claims.   As a result, petitioners claimed that they were denied back wages due to routine delays of months and in some cases over a year in hearing and resolving claims.   Petitioners therefore brought this declaratory relief action seeking a writ of mandate directing the Labor Commissioner to rescind its “no tolling policy.”   The trial court granted the writ, finding that the Labor Commissioner's act in not tolling the statute of limitations upon the date of a claim's filing was an abuse of discretion.   The court entered judgment declaring that “for all claims processed under the Labor Code Section 98 administrative (“Berman”) ² hearing process by any office of the Labor Commissioner and not finally resolved as of January 5, 1996, the Labor Commissioner shall calculate wages, damages, penalties and interest due, using the applicable statute of limitation, from the date of the claim filing, not the date of the actual administrative [h]earing.”   This appeal followed.

DISCUSSION

I.1. Appropriateness of Mandamus

 Pursuant to Code of Civil Procedure section 1085, a writ of mandamus “may be issued by any court ․ to any inferior tribunal, corporation, board, or person, to compel the performance of an act which the law specially enjoins, as a duty resulting from an office, trust, or station․”  The writ must be issued in all cases in which there is not a plain, speedy and adequate remedy at law.  (Code Civ.Proc., § 1086.)

 Petitioners assert that the remedy at law is inadequate because to proceed to a trial on the issue of the amount of their claims for unpaid wages would thwart the very purpose of section 98, subdivision (a) ³ of providing a prompt administrative resolution of wage disputes.   The Berman hearing procedure was created to provide an alternative to the expensive and time consuming process of a court trial on a wage dispute.  (See Rogers v. Sonoma County Municipal Court (1988) 197 Cal.App.3d 1314, 1318, 243 Cal.Rptr. 530.)   Prior to the statute's enactment, the Labor Commissioner's only recourse was to prosecute an action for unpaid wages in the superior court.  (Former § 98.)   As the legislative history demonstrates, section 98 was proposed to “expedite the handling of disputed wage claims by the Labor Commissioner's office and [ ] discourage obstruction and stalling tactics engaged in by some employers knowing that the only recourse available to the Labor Commissioner to enforce a valid claim is to sue in the Superior Court.   That process often delays final resolution and many times when a court decision is finally rendered on a matter, the employer is no longer in business or has declared bankruptcy or has reorganized under a different name, all of which frustrates the purpose of the Labor Code protections regarding timely and complete payment of wages to California workers.”  (Department of Industrial Relations, Enrolled Bill Report on Assem. Bill No. 1522 (1975-1976 Reg. Sess.), August 16, 1976, p. 1.)   The Labor Commissioner's theory that petitioners have alternatives to the Berman process and hence an adequate remedy at law is unpersuasive.   As petitioners point out, the alternatives to the Berman hearing-either litigating the statute of limitations in an appeal of the Labor Commissioner's decision on an individual claim or filing their claims in superior court-would defeat the statutory purpose of section 98, subdivision (a).   Many wage claimants would not have the funds to hire an attorney to proceed to file their claim in court.   Although sections 98, subdivision (a) and 98.3 grant the Labor Commissioner discretion to prosecute an action in court for wage claimants unable to afford counsel rather than proceed with a Berman hearing, there is no provision to provide counsel for claimants if they opt to file their claims in court independent of the Berman process.⁴  Moreover, the delay resulting from proceeding in a civil trial would further frustrate the legislative purpose of the Berman process and inevitably lead to many claims being lost.   Given the inadequacy of a remedy at law, the trial court properly considered the mandamus petition.

2. Interpretation of Section 98

 The Labor Commissioner contends that her interpretation that section 98 affords her no authority to toll the statute of limitations is entitled to great weight.   Citing two bills that were introduced to toll the statute of limitations, she argues that the Legislature has acquiesced in her interpretation.

 “ ‘It is a well-established rule of statutory construction that the contemporaneous and practical construction of a statute by those whose duty it is to carry it into effect, while not controlling, is always given great respect.   And a contemporaneous interpretation long acquiesced in by all persons who could possibly have an interest in the matter, has been held to be sufficient to justify a court in resolving any doubt it might have as to the meaning of ambiguous language employed by the [L]egislature, in favor of sustaining such long unquestioned interpretation.  [Citation.]  Under these circumstances, the administrative practice will be upheld unless it is clearly erroneous or unauthorized.’ ”  (Hudgins v. Neiman Marcus Group, Inc. (1995) 34 Cal.App.4th 1109, 1125, 41 Cal.Rptr.2d 46, quoting Steelgard, Inc. v. Jannsen (1985) 171 Cal.App.3d 79, 88, 217 Cal.Rptr. 152.)   Here, however, the Labor Commissioner did not act contemporaneously with the enactment of section 98 in implementing its policy on the statute of limitations.   Although the Labor Commissioner asserts that its policy was adopted in 1977, a year after section 98 was promulgated, she fails to cite to anything in the record to support this fact.   As the appellant, it is the Labor Commissioner's duty to cite evidence to support her position.  (Cal. Rules of Court, rule 15.)   We are not required to make an independent search of the record when that duty is ignored.  (See 9 Witkin, Cal. Procedure (3d ed. 1985) Appeal, § 475, pp. 467-468;  Haynes v. Gwynn (1967) 248 Cal.App.2d 149, 151, 56 Cal.Rptr. 82.)   Petitioners cite evidence to the effect that the policy was not contemporaneous as it was either formulated “at least twenty years [ago]” (see Letter from H. Thomas Cadell, Jr., Chief Counsel, Division of Labor Standards Enforcement to Lora Jo Foo and Laura Ho (August 28, 1995), p. 1) antedating the enactment of section 98 or on October 28, 1994, the date of the issuance of the “DLC (Division of Labor Standards Enforcement) Policy and Procedure Guidelines No. 94-5 DLC.” ⁵  In either event, the Labor Commissioner did not establish that the policy was contemporaneous with the enactment of section 98 and we need not defer to her interpretation of the statutory scheme.

 Nor is the Labor Commissioner's reliance on two unpassed bills ⁶ entitled to any consideration.   First, the proposed legislation was not presented to the trial court, and the general rule is that an appellate court should not take judicial notice of matters that have not been presented and considered by the trial court in the first instance.  (See People v. Hardy (1992) 2 Cal.4th 86, 134, 5 Cal.Rptr.2d 796, 825 P.2d 781;  Coy v. County of Los Angeles (1991) 235 Cal.App.3d 1077, 1083, fn. 3, 1 Cal.Rptr.2d 215.)   Second, it is well settled that very limited guidance can be drawn from the Legislature's inaction on a proposed amendment to an existing statute.   (Grupe Development Co. v. Superior Court (1993) 4 Cal.4th 911, 922-923, 16 Cal.Rptr.2d 226, 844 P.2d 545.)  ‘ “ ‘The unpassed bills of later legislative sessions evoke conflicting inferences.   Some legislators might propose them to replace an existing prohibition;  others to clarify an existing permission.   A third group of legislators might oppose them to preserve an existing prohibition, and a fourth because there was no need to clarify an existing permission.   The light shed by such unadopted proposals is too dim to pierce statutory obscurities.   As evidence of legislative intent they have little value.’ ” '  (Ibid., quoting Marina Point, Ltd. v. Wolfson (1982) 30 Cal.3d 721, 735, fn. 7, 180 Cal.Rptr. 496, 640 P.2d 115.)

The Labor Commissioner also argues that tolling the statute of limitations is improper because it would interfere with her administration of wage claims.   She contends that section 98 requires her to investigate claims and that she cannot notify an employer of a potential claim until this investigation is complete.   Hence, she argues that to toll the statute of limitations upon the filing of a claim would be unfair to employers who would be required to respond to claims which she has not yet determined are valid.

The Labor Commissioner's argument undermines her statutory obligations.   It is unclear why the Labor Commissioner cannot comply with her statutory duty to investigate a claim and also with her duty to inform the employer of the pendency of a claim.   Both duties are clearly mandated by section 98.   Section 98 vests the Labor Commissioner with the authority to investigate employee complaints.   It also requires the Labor Commissioner to notify the parties within 30 days of the filing of a complaint whether a Berman hearing will be held, whether she will prosecute a court action on the complaint pursuant to section 98.3 or whether no further action will be taken. (§ 98, subd. (a).)  Nothing in the statute grants the Labor Commissioner authority to delay notifying the employer of a potential claim until she has completed an investigation.   Indeed, the Labor Commissioner's procedures for processing wage claims recognize that there is no discretion with regard to the 30 day notice period and that compliance with that time limit is mandatory.

 Additionally, the Labor Commissioner argues that the trial court's order fails to address the differences between court proceedings and the administrative process provided by section 98.   She asserts that unlike courts that may exercise equitable jurisdiction, she has no authority to toll the statute of limitations.

 The Labor Commissioner's arguments do not withstand scrutiny.   While administrative agencies have only those powers that have been conferred upon them, expressly or by implication, by constitution or statute (American Federation of Labor v. Unemployment Ins. Appeals Bd. (1996) 13 Cal.4th 1017, 1042, 56 Cal.Rptr.2d 109, 920 P.2d 1314), the statute of limitations relates to the extent of the recovery on a claim for unpaid wages and is necessarily within the scope of the Labor Commissioner's powers under section 98 et seq.  (See Rich Vision Centers, Inc. v. Board of Medical Examiners (1983) 144 Cal.App.3d 110, 114, 192 Cal.Rptr. 455 [administrative agencies may exercise additional powers as are necessary to effectuate those powers granted or implied by statute], see, also Lentz v. McMahon (1989) 49 Cal.3d 393, 403, 261 Cal.Rptr. 310, 777 P.2d 83 [statute construed to permit estoppel claim to be raised in administrative hearing despite lack of specific statutory authorization].)   Those powers include the authority to make an award of “sums found owing, damages proved, and any penalties awarded pursuant to this code.”  (§ 98.1, subd. (b).)  Further, all awards shall include accrued interest on all “due and unpaid wages” and that interest “shall run until the wages are paid from the date that the wages were due and payable as provided in Part 1 (commencing with Section 200) of Division 2.”  (§ 98.1, subd. (c), italics added.)   Given this express statutory language, it is clear that the Legislature intended that claimants be awarded “all” unpaid wages from the date those wages became due and that claimants could utilize the administrative process in order to secure a full recovery.   To require claimants to commence an action in superior court in order to toll the statute of limitations would defeat the statutory objective of providing claimants with an informal process of resolving their claims for unpaid wages.

It would be anomalous to conclude that the application of the statute of limitations to an administrative proceeding pursuant to section 98 differed from that of an action under section 98.3.   Yet, that is what the Labor Commissioner would have this court decide.   The parties do not dispute that a statute of limitations applicable to proceedings under section 98 et seq. are those contained in sections 337, 338 and 339 of the Code of Civil Procedure (see Aubry v. Goldhor (1988) 201 Cal.App.3d 399, 401, 247 Cal.Rptr. 205 [action to recover overtime compensation under section 98 is governed by the three year statute of limitations of Code of Civil Procedure section 338, subd. (1) ] ).  Nevertheless, the Labor Commissioner has refused to toll the statute upon the filing of a claim when she determines to proceed by a hearing to resolve the claim although she acknowledges that filing a court action would have that effect.   Inasmuch as the purpose of section 98 is to provide an administrative forum for the resolution of unpaid wage claims in a prompt and informal matter, it would be inappropriate to construe the statutory scheme as the Labor Commissioner does and make the amount of an employee's wage claim dependent on the date of a Berman hearing which may occur several months ⁷ after the initial filing of the claim.

Aubry v. Goldhor, supra, 201 Cal.App.3d at p. 399, 247 Cal.Rptr. 205, upon which the Labor Commissioner relies, does not change our result.   In Aubry, the court held that the plaintiff, in a court action pursuant to sections 98 et seq. to recover overtime compensation, had not set forth facts to justify equitable tolling of the statute of limitations to the date the plaintiff filed his claim with the Labor Commissioner.⁸  (Id. at p. 407, 247 Cal.Rptr. 205.)   The court therefore limited the plaintiff's claim to compensation due for the period within three years prior to commencement of the action.  (Aubry, supra, at p. 406, 247 Cal.Rptr. 205.)   The Aubry court did not address the issue presented here as to the Labor Commissioner's authority to toll the statute of limitations when she opts to hold a Berman hearing.

Our conclusion that the Labor Commissioner has the authority to toll the statute of limitations in a Berman hearing is also consistent with the purpose of the statute of limitations.   That purpose “is to ‘[prevent] surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared.’   [Citations.]”  (Elkins v. Derby (1974) 12 Cal.3d 410. 417, 115 Cal.Rptr. 641, 525 P.2d 81.)   The statutory scheme here contemplates that employers will be notified of unpaid wage claims within 30 days of the filing of a claim.   This prompt notice gives the employer the opportunity to preserve evidence and prepare for the hearing.   The employer, thus, is not unfairly prejudiced.

II.

1. Attorney fees

 The trial court awarded attorney fees in the amount of $106,500 pursuant to Code of Civil Procedure section 1021.5.  Code of Civil Procedure section 1021.5 is a codification of the private attorney general doctrine and provides for an “award [of] attorneys fees to a successful party ․ if:  (a) a significant benefit ․ has been conferred on the general public ․ [and] (b) the necessity and financial burden of private enforcement ․ are such as to make the award appropriate․”  An award of fees under Code of Civil Procedure section 1021.5 is within the sound discretion of the trial court;  the trial court's decision on fees will not be reversed on appeal unless there is no reasonable basis for the award in the record.  (Westside Community for Independent Living, Inc. v. Obledo (1983) 33 Cal.3d 348, 355, 188 Cal.Rptr. 873, 657 P.2d 365.)

 “In determining a fee award under section 1021.5 the trial court must first determine a touchstone or lodestar amount based upon the time spent and the reasonable hourly compensation for each attorney.  (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1294 [240 Cal.Rptr. 872, 743 P.2d 932];  Serrano v. Priest (1977) 20 Cal.3d 25 [141 Cal.Rptr. 315, 569 P.2d 1303] (Serrano III ).)   Once the lodestar amount is determined the court looks to a variety of other factors which may justify either the augmentation or the diminution of the lodestar sum.   Among the factors properly considered by the trial court in Serrano III 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 [and] (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․’ ”  (Californians For Responsible Toxics Management v. Kizer (1989) 211 Cal.App.3d 961, 970, 259 Cal.Rptr. 599;  quoting Serrano III at p. 49, 141 Cal.Rptr. 315, 569 P.2d 1303.)

In arriving at the lodestar sum, the trial court found that while counsel for petitioners did a very good job on an issue of first impression, the 770 hours requested was excessive.   The court estimated that an efficient use of attorney time would have amounted to 270 hours plus an additional 30 hours for the fee motion.   The court explained its determination, noting that it made the reduction based on its experience in private practice.   The court observed in reviewing the documentation submitted by petitioners that there was duplication in the hours submitted resulting from review of the motion by the various counsel representing petitioners.   The trial court consequently opined that only 40 percent of the 770 hours submitted would be awarded and set the lodestar sum at $66,000.   The court, however, also applied a multiplier of 1.5 to the lodestar sum, “for the complexity of the issues in this case which were in an area of law of first impression, the exceptional results received, the skill displayed in this case, the significant benefit to the general public and the tens and thousands of employees throughout the state of California who use the Labor Commissioner administrative process to recover unpaid wages, and the contingent nature of being paid.” ⁹

Relying on Press v. Lucky Stores, Inc. (1983) 34 Cal.3d 311, 193 Cal.Rptr. 900, 667 P.2d 704 and Mandel v. Lackner (1979) 92 Cal.App.3d 747, 155 Cal.Rptr. 269, the Labor Commissioner contends that the fee award must be reversed because the trial court used an arbitrary method to arrive at the amount of attorney fees.   In Press, the plaintiffs, who had successfully challenged a supermarket's refusal to permit them to gather signatures for an initiative measure in front of the store, sought an award of attorney fees.   The court awarded fees of $112.98, multiplying the $20,940 requested by plaintiffs by 3,000/556,000, the ratio of petition signatures obtained at the Santa Monica store to the number obtained statewide.  (Press v. Lucky Stores, Inc., supra, at p. 323, 193 Cal.Rptr. 900, 667 P.2d 704.)   The Supreme Court determined that the trial court's formula was arbitrary;  the formula did not refer to the lodestar figure and was “designed not to take into account [the Serrano III ] factors, but to reflect only the trial judge's view of the results achieved by the litigation.”  (Ibid.) Similarly, in Mandel v. Lackner, supra, at pp. 754, 758, 155 Cal.Rptr. 269, the trial court did not consider the time actually spent by the attorneys nor did the court value the services of the attorneys on a per hour or other unit of time basis in awarding a flat $75,000 in fees.

In contrast, here, the trial court did consider the documentation submitted by counsel for petitioners in arriving at its fee determination.   Not only did the court consider the amount of hours expended on the case, the court awarded fees to each of the attorneys for petitioners based on the amount of their participation in the case.   That the court chose to reduce the lodestar amount due to duplication of work among counsel for petitioners does not reflect an abuse of discretion.  (See Bernardi v. Yeutter (9th Cir.1991) 951 F.2d 971, 975 [district court did not abuse its discretion in reducing fee award in half due to duplication of effort among class counsel].)

Finally, the trial court did not abuse its discretion in applying a multiplier to the lodestar amount.   The trial court based its decision to use a multiplier on several of the factors set forth in Serrano III including that the case involved a complex issue of first impression, that there were exceptional results and a significant benefit to the public, that petitioners' counsel exhibited skill and that payment of their fees was contingent.   The record fully justifies the trial court's findings.  (See Kern River Pub. Access Com. v. City of Bakersfield (1985) 170 Cal.App.3d 1205, 1228-1230, 217 Cal.Rptr. 125 [court's reliance on sole factor of complexity of litigation in imposing l.5 multiplier not unreasonable].)   We cannot conclude that a multiplier of l.5 was arbitrary or that it bore “no reasonable connection between the lodestar figure and the fee ultimately awarded.”  (Press v. Lucky Stores, Inc., supra, 34 Cal.3d at p. 324, 193 Cal.Rptr. 900, 667 P.2d 704.)

Petitioners are also entitled to attorney fees on appeal.  “[A]bsent circumstances rendering the award unjust, fees recoverable under section 1021.5 ordinarily include compensation for all hours reasonably spent, including those necessary to establish and defend the fee claim.”  (Serrano v. Unruh (1982) 32 Cal.3d 621, 639, 186 Cal.Rptr. 754, 652 P.2d 985.)

DISPOSITION

The judgment is affirmed.   The cause is remanded to the trial court for a determination of the amount of attorney fees and costs on appeal to be awarded petitioners.

FOOTNOTES

FN1. Unless otherwise indicated, all further statutory references are to the Labor Code..  FN1. Unless otherwise indicated, all further statutory references are to the Labor Code.

2.   The hearing provided pursuant to section 98 is referred to as a Berman hearing.   The name derives from the bill's sponsor, Howard Berman.

3.   Subdivision (a) of section 98 provides in pertinent part:  “The Labor Commissioner shall have the authority to investigate employee complaints.   The Labor Commissioner may provide for a hearing in any action to recover wages, penalties, and other demands for compensation․  Within 30 days of filing of the complaint, the Labor Commissioner shall notify the parties as to whether a hearing will be held, or whether action will be taken in accordance with Section 98.3, or whether no further action will be taken on the complaint.   If the determination is made by the Labor Commissioner to hold a hearing, the hearing shall be held within 90 days of the date of that determination.   However, the Labor Commissioner may postpone or grant additional time before setting a hearing if the Labor Commissioner finds that it would lead to an equitable and just resolution of the dispute.  [¶] It is the intent of the Legislature that hearings held pursuant to this section be conducted in an informal setting preserving the right of the parties.”

4.   Subdivision (a) of section 98.3 provides:  “The Labor Commissioner may prosecute all actions for the collection of wages, penalties, and demands of persons who in the judgment of the Labor Commissioner are financially unable to employ counsel and the Labor Commissioner believes have claims which are valid and enforceable.”

5.   That policy states in relevant part:  “The statute of limitations is a defense to a claim for back wages.   The filing of a claim with the Division does not toll the statute of limitations.”

6.   The Labor Commissioner cites Assembly Bill No. 263 (1995 Reg. Session) and Senate Bill No. 1844 (1996 Reg. Session).

7.   Declarations of counsel submitted in support of the petition for writ of mandate indicate that delays of up to 10 months from the date claims are filed are not uncommon and that the delays result in the loss to claimants of months of unpaid wages.

8.   The court found that the plaintiff failed to allege the factors necessary to invoke the doctrine of equitable tolling-(1) timely notice to the defendant;  (2) lack of prejudice to the defendant in gathering evidence and (3) good faith and reasonable conduct by the plaintiff.

9.   The resulting fee for the litigation on the petition for writ of mandate was $99,000 plus an additional $7,500 in attorney fees for the fee motion.

HANLON, Associate Justice.

ANDERSON, P.J., and POCHÉ, J., concur.