Justia Legal Ethics Opinion Summaries
Department of Fair Employment and Housing v. Cathy’s Creations, Inc.
An award of attorneys' fees under Code of Civil Procedure section 1021.5 was properly denied to the prevailing defendants in an action brought by DFEH under Government Code section 12974. This case arose out of an administrative complaint filed with DFEH by a same-sex couple who alleged they were denied services at a bakery because of their sexual orientation.The Court of Appeal held that section 12974's unilateral attorneys' fee provision conflicts with Code of Civil Procedure section 1021.5, and the two statutes cannot reasonably be harmonized. The court explained that because section 12974 is the more specific, later-enacted statute, it governs. Therefore, the court held that a prevailing defendant in a section 12974 action is not entitled to an award of fees against DFEH under section 1021.5, and the trial court did not err in denying defendants' attorneys' fee request. View "Department of Fair Employment and Housing v. Cathy's Creations, Inc." on Justia Law
Vosburg v. County of Fresno
As the foundation for the application of Code of Civil Procedure section 1021.5 to this case, the Court of Appeal held that an unincorporated association has standing to appear in an election contest as a representative of its members if (1) its members live in the area affected by the outcome of the election, (2) its members would suffer injury from an adverse outcome in the election contest, and (3) the questions involved were of a public nature.In this case, the court held that the unincorporated association met these requirements where it is undisputed that the patients residing at CSH-Coalinga are in an area affected by the referendum vote on Measure C; the members of DACE would have been harmed in at least two ways if the election contest was successful; and the specific challenge of illegal votes raised in this election contest involves questions of a public nature. The court held that the trial court's analysis of DACE's right to intervene in the election contest in the order denying the motion for attorney fees did not accurately reflect California law governing an unincorporated association and (2) DACE qualified for permissive intervention. Furthermore, as a de facto intervenor and based on its unique contribution to the evidence and argument presented in the trial court, DACE qualified as a party for purposes of section 1021.5's "successful party" requirement. The court rejected the remaining contentions, reversing the order denying the motion for attorney fees. View "Vosburg v. County of Fresno" on Justia Law
Innovative Images, LLC v. Summerville et al.
Innovative Images, LLC sued its former attorney James Summerville, Summerville Moore, P.C., and The Summerville Firm, LLC (collectively, the “Summerville Defendants”) for legal malpractice. In response, the Summerville Defendants moved to dismiss the suit and to compel arbitration in accordance with the parties’ engagement agreement, which included a clause mandating arbitration for any dispute arising under the agreement. The trial court denied the motion, ruling that the arbitration clause was “unconscionable” and thus unenforceable because it had been entered into in violation of Rule 1.4 (b) of the Georgia Rules of Professional Conduct (“GRPC”) for attorneys found in Georgia Bar Rule 4-102 (d). The Court of Appeals reversed, holding that the arbitration clause was not void as against public policy or unconscionable. The Georgia Supreme Court concluded after review that regardless of whether the Summerville Defendants violated GRPC Rule 1.4 (b) by entering into the mandatory arbitration clause in the engagement agreement without first apprising Innovative of the advantages and disadvantages of arbitration, the clause was not void as against public policy because Innovative did not argue, and no court has held, that such an arbitration clause could never lawfully be included in an attorney-client contract. For similar reasons, the Supreme Court held the arbitration clause was not substantively unconscionable, and on the limited record before it, Innovative did not show the clause was procedurally unconscionable. Accordingly, the Court affirmed the appellate court's judgment. View "Innovative Images, LLC v. Summerville et al." on Justia Law
Ridgeway v. Stryker Corp.
In 2001-2013, Ridgeway worked for Stryker, which believed that Ridgeway intended to use its confidential business information at his next job. Stryker sued Ridgeway. A jury found that Ridgeway had breached his contractual obligations, breached his fiduciary duty, and violated Michigan’s Uniform Trade Secrets Act (MUTSA) and that the MUTSA violation was willful and malicious for purposes of an award of attorney’s fees. Ridgeway filed a Chapter 11 bankruptcy. The automatic stay caused by the filing of the petition prevented Stryker from making an attorney’s fee request in the Michigan proceedings. Stryker filed a proof of claim for $2,272,369.54, supported by hundreds of pages of time entries; the amount claimed and the corresponding time entries do not just relate to the lawyers’ work on the MUTSA claim. Stryker argued that, under the “Common Core” doctrine, its win on the MUTSA claim entitles it to attorney’s fees for all of its claims. Ridgeway argued that fee recovery under the Common Core doctrine “is reserved for fee awards in civil rights cases.”The bankruptcy court allowed Stryker’s proof of claim, including fees claimed under the Common Core doctrine. The district court and Fifth Circuit affirmed. Ridgeway has not shown that Michigan law requires statutory attorney’s fees to be “proved at trial.” The court upheld the striking of Ridgeway's "Common Core" objection as a sanction. Ridgeway did not comply with a court order to specify to which charges his objection applied. View "Ridgeway v. Stryker Corp." on Justia Law
Crozier v. Westside Community School District
A.C.'s Westside eighth-grade class watched a video about athletes kneeling during the national anthem. During a “critical thinking” discussion, the teacher insisted that A.C. share her ideas. A.C. stated that “kneeling was disrespectful to law enforcement and military," and questioned that violence could have stemmed from music lyrics including "F-the Police, and the use of the N-word.’” A.C. stayed home the next day due to illness. The teacher allegedly told students that A.C. was a racist and was on suspension. A.C. was subjected to bullying. After meeting with school officials, her parents removed A.C. from school. A.C. attempted suicide. Her parents contacted eight lawyers. but were unable to retain one.On behalf of A.C., they filed the pro se 42 U.S.C. 1983 lawsuit. The court ruled that they could not serve pro se as A.C.’s representatives and lacked standing to bring individual claims that only derive from alleged violations of their child’s constitutional rights. They contacted 27 more lawyers and organizations. They refiled, requesting court-appointed counsel. The district court refused, reasoning that the claims were “not likely to be of substance,” and that A.C. lacked standing for declaratory and injunctive relief, as she was no longer a student at Westside. The Eighth Circuit affirmed that the parents may not represent A.C. pro se but remanded with directions to appoint counsel. The court did not err in considering the potential merit of the claims and other relevant factors in deciding whether to request counsel but the allegation of First Amendment retaliation is a serious claim on which the plaintiffs and the court would benefit from the assistance of counsel. View "Crozier v. Westside Community School District" on Justia Law
In re: Sisk
The Ninth Circuit previously reversed, in part, bankruptcy appellate panel decisions. The court subsequently denied the debtors’ applications, as prevailing parties, for attorney fees under the Equal Access to Justice Act, 28 U.S.C. 2412(d). The EAJA did not authorize attorney fees because a bankruptcy court does not fall within the EAJA’s definition of “United States,” and uncontested Chapter 13 bankruptcy cases are not “civil actions brought by or against the United States.” The EAJA is a limited waiver of the government’s sovereign immunity; it must be strictly construed in favor of maintaining immunity not specifically and clearly waived. View "In re: Sisk" on Justia Law
Gumpenberger v. Wilkie
Graham served in the Marine Corps from 1967-1970 and has been receiving disability compensation benefits since 2001. The VA regional office (RO) informed Graham in 2009 that authorities had identified him as a fugitive felon and the subject of an outstanding warrant issued in 1992. That warrant was withdrawn in February 2009. In May 2009, the RO issued a rating decision that retroactively discontinued Graham’s compensation from December 2001 through February 2009, due to his then-fugitive felon status, and informed Graham that he had been improperly paid $199,158.70 and that his monthly compensation would be partially withheld to pay back the debt.Graham appointed Gumpenberger as his representative on appeal and signed a direct-pay agreement stating that Gumpenberger’s fee would be “20 percent of all past-due benefits awarded … as a result of winning … as provided in 38 C.F.R. 14.636.” In 2013, the Board reversed the RO’s debt ruling, finding that Graham was not a fugitive felon for VA purposes because he had never been aware of the outstanding warrant. The VA had recouped $65,464 from Graham’s monthly benefits. The Veterans Court and Federal Circuit affirmed the RO’s determination that Gumpenberger was entitled to a fee of $13,092.80. Although the total debt invalidated was $199,158.70, the past-due benefit, per 38 U.S.C. 5904(d)(1), being awarded was $65,464. View "Gumpenberger v. Wilkie" on Justia Law
Nutrition Distribution LLC v. IronMag Labs, LLC
Nutrition Distribution filed suit against IronMags, alleging that the company violated the Lanham Act by falsely advertising IronMag's nutritional supplements. After the district court entered judgment, Nutrition Distribution did not file a notice of appeal but, instead, filed a post-judgment motion for attorneys' fees under Federal Rule of Civil Procedure 54(d) and then filed a notice of appeal 30 days after the district court denied that fees motion.The Ninth Circuit held that, because Nutrition Distribution did not file a notice of appeal within 30 days of the district court's judgment or obtain a Rule 58(e) order extending the time to appeal, the notice of appeal was untimely as to the district court's underlying judgment. The notice of appeal was timely as to the district court's later order denying attorneys' fees.The panel explained that the Federal Rules are clear that ordinarily, the entry of judgment may not be delayed, nor the time for appeal extended, in order to tax costs or award fees. Furthermore, a motion for attorneys' fees does not extend the time to appeal the underlying judgment unless the district court so orders under Rule 58(e). In this case, Nutrition Distribution did not seek such an order, nor did the district court enter one. The panel also held that Nutrition Distribution's attempt to now save its untimely appeal of the underlying judgment by recasting its fees motion as a Rule 59 motion to alter or amend the judgment likewise fails. The panel stated that the 1993 amendments to the Federal Rules and the Supreme Court precedent that gave rise to them make clear that attorneys' fees motions cannot be recharacterized as Rule 59 motions to extend the time to appeal an underlying judgment. Accordingly, the panel affirmed the denial of fees, and otherwise dismissed the appeal for lack of jurisdiction. View "Nutrition Distribution LLC v. IronMag Labs, LLC" on Justia Law
Skinner v. Ken’s Foods, Inc.
The underlying lawsuit arose from plaintiffs' claim that Ken's salad dressing labels were deceptive. In June 2017, plaintiffs served Ken's with their prelawsuit notice and demand to remove claims about olive oil from the labels on its salad dressings. In October 2017, a neutral case evaluator concluded that plaintiffs' claims likely had merit and that the False Advertising Law and Unfair Competition Law claims would likely be certified as a class. In November 2017, Ken's drafted a PowerPoint presentation that described plaintiff's claims, proposed label changes, and thereafter revised its salad dressing labels and finalized the changes in 2018.The Court of Appeal affirmed the trial court's order granting plaintiffs' motion for attorney fees. The court held that the trial court did not err by concluding that plaintiffs were "successful parties" where the sequence of events provides a reasonable basis for the trial court's conclusion that plaintiffs' lawsuit was a catalyst motivating Ken's to change the labels on its salad dressings. Furthermore, there was a reasonable basis for the trial court to conclude that injunctive relief was the primary relief sought. The court also held that the lawsuit was meritorious and that plaintiffs reasonably attempted to settle the matter short of litigation. Finally, the court rejected Ken's public policy argument. View "Skinner v. Ken's Foods, Inc." on Justia Law
Wiener Weiss & Madison v. Fox
The Fifth Circuit vacated the district court's grant of summary judgment in favor of the law firms in an action brought by the firms against a former client, seeking to enforce the terms of the parties' contingency fee agreement.After determining that it had jurisdiction over the appeal, the court held that the parties' contingency fee agreement violates Louisiana Rule of Professional Conduct 1.8(a). The court held that a contingency fee arrangement resulting in an attorney owning part of the client's business is a business transaction under Rule 1.8(a). The court explained that, because the terms of the contingency fee agreement in this case give the firms an ownership interest in the client's holding company, Rule 1.8(a) applies, and the firms were required to advise the client to seek the advice of independent counsel. Because the firms failed to do so, the contingency fee award is void. Accordingly, the court remanded for further proceedings. View "Wiener Weiss & Madison v. Fox" on Justia Law