Dep't of Fair Emp't & Hous. v. Cathy's Creations, Inc.

54 Cal.App.5th 404

269 Cal.Rptr.3d 1

DEPARTMENT OF FAIR EMPLOYMENT AND HOUSING, Plaintiff and Respondent,

v.CATHY'S CREATIONS, INC., et al., Defendants and Appellants.

F077802

Court of Appeal, Fifth District, California.

Filed September 9, 2020

Freedom of Conscience Defense Fund, Charles S. LiMandri, Paul M. Jonna and Jeffrey M. Trissell, Rancho Santa Fe, for Defendants and Appellants.

Xavier Becerra, Attorney General, Michael L. Newman, Assistant Attorney General, Satoshi Yanai and Cherokee DM Melton, Deputy Attorneys General, for Plaintiff and Respondent.

MEEHAN, J.

INTRODUCTION

The question presented in this appeal is whether 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 California's Department of Fair Employment and Housing (DFEH) under Government Code section 12974.¹

Section 12974 contains a unilateral attorneys' fee provision in favor of the DFEH. In this case, section 12974's attorneys' fee provision conflicts with Code of Civil Procedure section 1021.5, and the two statutes cannot reasonably be harmonized. As section 12974 is the more specific, later-enacted statute, it governs. We therefore conclude that a prevailing defendant in a section 12974 action is not entitled to an award of fees against the DFEH under Code of Civil Procedure section 1021.5, and the trial court did not err in denying defendants' attorneys' fee request.

FACTUAL SUMMARY

This case arises out of an administrative complaint filed with the DFEH by a same-sex couple who alleged they were denied services at a bakery because of their sexual orientation. Upon preliminary investigation, the DFEH filed an action for temporary, provisional relief pursuant to section 12974 against Cathy's Creations, Inc., doing business as Tastries, and its sole shareholder, Catharine Miller (Miller) (collectively, defendants). The DFEH's requests for a temporary restraining order and a preliminary injunction were denied, and judgment was subsequently entered, signaling an end to that action for provisional relief.

Defendants filed a motion for an award of attorneys' fees under the private attorney general fee statute codified at Code of Civil Procedure section 1021.5. The trial court determined its discretion to award attorneys' fees was limited by the asymmetrical standard first announced in Christiansburg Garment Co. v. EEOC (1978) 434 U.S. 412, 98 S.Ct. 694, 54 L.Ed.2d 648 ( Christiansburg ), and adopted by the California Supreme Court in Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 186 Cal.Rptr.3d 826, 347 P.3d 976 ( Williams ) to govern the award of attorneys' fees and costs for actions under section 12965 of the Fair Employment and Housing Act (FEHA). Under the asymmetrical standard, a prevailing plaintiff should ordinarily receive his or her attorneys' fees unless special circumstances would render such an award unjust, but a prevailing defendant should not be awarded fees unless the court finds the action was objectively without foundation when brought, or the plaintiff continued to litigate after it clearly became so. ( Christiansburg, supra , at pp. 421–422, 98 S.Ct. 694 ; Williams, supra , at p. 115, 186 Cal.Rptr.3d 826, 347 P.3d 976.)

The trial court concluded that, while defendants "did meet the criteria for the enforcement of an important right affecting the public interest under Code of Civil Procedure section 1021.5," the DFEH's Government Code section 12974 action was not objectively meritless or frivolous. Thus, applying the Christiansburg standard as adopted under Williams, supra , 61 Cal.4th at page 115, 186 Cal.Rptr.3d 826, 347 P.3d 976, for an attorneys' fees award under section 12965, the court denied defendants' attorneys' fee request. Defendants appealed.

DISCUSSION

I. Relevant Statutes

A. Section 12974

This case was initiated pursuant to section 12974, which is a unique statute. Section 12974 is part of the FEHA, which prohibits discrimination (§ 12940 et seq.) and incorporates the Unruh Civil Rights Act's² prohibitions on discrimination in public accommodations (§ 12948). The Unruh Civil Rights Act's provisions "were intended as an active measure that would create and preserve a nondiscriminatory environment in California business establishments by ‘banishing’ or ‘eradicating’ arbitrary, invidious discrimination by such establishments." ( Angelucci v. Century Supper Club (2007) 41 Cal.4th 160, 167, 59 Cal.Rptr.3d 142, 158 P.3d 718.) "[The] FEHA's provisions, including the establishment of [the] DFEH, are ‘an exercise of the police power of the state for the protection of the welfare, health, and peace of the people of this state.’ " ( Wood v. Superior Court (2020) 46 Cal.App.5th 562, 579, 259 Cal.Rptr.3d 798, quoting § 12920.)

The DFEH's task is to represent the interests of the state and to effectuate the declared public policy of the state to protect and safeguard the rights and opportunities of all persons from unlawful discrimination. ( Dep't of Fair Employment & Hous. v. Law Sch. Admission Council, Inc. (2013) 941 F.Supp.2d 1159, 1168 ; see § 12930, subd. (f).) The Legislature has provided the DFEH with several statutory tools in aid of the department's task to enforce the FEHA, which include the ability to seek discovery from an alleged wrongdoer while investigating an administrative complaint (§§ 12963.1, 12963.2, 12963.3, 12963.4); and the DFEH may seek court orders to compel this discovery (§ 12963.5). Another such statutory tool is found in section 12974, which allows the DFEH to seek a court order to temporarily restrain or preliminarily enjoin the actions of another party, pending final disposition of the underlying administrative complaint, where prompt judicial action is necessary to carry out the purposes of the FEHA. ( § 12974.)

The DFEH is required to carry out a variety of tasks before it may file suit under section 12965 for any type of permanent relief for violations of the FEHA, including completing investigation of an underlying administrative complaint (§ 12963), making a decision on whether to institute suit on behalf of the complainant or issuing a right-to-sue notice (§ 12965, subd. (b)), and conducting a mandatory dispute resolution session (§ 12965, subd. (a)). Section 12974 allows the DFEH flexibility in its enforcement and prosecutorial responsibilities to seek provisional relief while those necessary administrative steps are accomplished so that, in the meantime, potentially irremediable harm does not occur and the purposes of the FEHA may be carried out.

Section 12974 contains an attorneys' fees shifting provision: "In civil actions brought under this section, the court, in its discretion, may award to the department reasonable attorney's fees and costs, including expert witness fees, when it is the prevailing party for the purposes of the order granting temporary or preliminary relief." ( § 12974.)

B. Code of Civil Procedure Section 1021.5

" ‘The Legislature adopted [Code of Civil Procedure] section 1021.5 as a codification of the private attorney general doctrine of attorney fees developed in prior judicial decisions. [Citation.] Under this section, the court may award attorney fees to a "successful party" in any action that "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." ... [T]he private attorney general doctrine "rests upon the recognition that privately initiated lawsuits are often essential to the effectuation of the fundamental public policies embodied in constitutional or statutory provisions, and that, without some mechanism authorizing the award of attorney fees, private actions to enforce such important public policies will as a practical matter frequently be infeasible." Thus, the fundamental objective of the doctrine is to encourage suits enforcing important public policies by providing substantial attorney fees to successful litigants in such cases.' ( Maria P. v. Riles (1987) 43 Cal.3d 1281, 1288–1289 [240 Cal.Rptr. 872, 743 P.2d 932] ....)" ( Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 565, 21 Cal.Rptr.3d 331, 101 P.3d 140.)

II. The Trial Court Did Not Err in Denying Attorneys' Fees

A. Standard of Review

In general, the trial court's determination whether a party is entitled to attorneys' fees, and the amount of any such award, is reviewed under the abuse of discretion standard. ( Coalition for a Sustainable Future in Yucaipa v. City of Yucaipa (2015) 238 Cal.App.4th 513, 519, 189 Cal.Rptr.3d 306.) Where, as here, however, the propriety of the award turns on an issue of statutory interpretation or implicates the legal basis for such an award, the issue is reviewed de novo as a question of law. ( Sessions Payroll Management, Inc. v. Noble Construction Co. (2000) 84 Cal.App.4th 671, 677, 101 Cal.Rptr.2d 127.)

B. Attorneys' Fees May Not Be Awarded to a Prevailing Defendant Under Section 12974

Defendants argue the trial court erred in denying its request for attorneys' fees under Code of Civil Procedure section 1021.5. Defendants maintain Government Code section 12974's attorneys' fee provision is not exclusive, nor is it more specific than section 1021.5, and there are significant public policy reasons section 1021.5 should apply despite the unilateral fee provision in section 12974.

DFEH argues the unilateral attorneys' fee provision under Government Code section 12974 is exclusive and precludes application of Code of Civil Procedure section 1021.5. DFEH maintains section 12974 is a more specific attorneys' fee provision than section 1021.5, and interpreting section 12974 to be unilateral and...