Ashegian v. Beirne CA2/4 ( 2014 )

Filed 11/19/14 Ashegian v. Beirne CA2/4
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
MARC ASHEGIAN, B254020
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC480403)
v.
JAMES G. BEIRNE et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los Angeles County,
Kevin C. Brazile, Judge. Reversed in part and affirmed in part.
The Luti Law Firm and Anthony Luti for Plaintiff and Appellant.
Stocker & Lancaster and Michael J. Lancaster for Defendants and
Respondents.
INTRODUCTION
Plaintiff and appellant Marc Ashegian appeals from a post-judgment order
granting a motion for attorney fees under the private attorney general doctrine
(Bus. & Prof. Code, § 6158.4, subd. (i); Civ. Proc. Code, § 1021.5) brought by
defendants and respondents James G. Beirne, the Law Offices of James G. Beirne,
Paul Mendoza Allen and the Law Offices of Paul M. Allen (respondents).
Ashegian also appeals from the denial of his motion to tax costs and from the
denial of his motion for sanctions under Code of Civil Procedure section 128.7
(section 128.7) directed at respondents’ motion for attorney fees.
The operative complaint by Ashegian alleged a cause of action against
respondents under Business and Professions Code section 6158.4 (section 6158.4),
based on Internet advertising by respondents that allegedly violated State Bar Act
regulations (Bus. & Prof. Code, §§ 6158, 6158.1, and 6158.3) governing the
content of electronic media advertising for legal services. The trial court sustained
a general demurrer to the complaint, and we affirmed the judgment in an
unpublished decision (Ashegian v. Beirne, June 20, 2013, B245028 [nonpub. opn]
(Ashegian I)), on the ground that the complaint failed to allege that, before filing
his civil suit against respondents, Ashegian satisfied the procedural requirement of
submitting a complaint to the California State Bar regarding the allegedly unlawful
advertisements.
In granting respondents’ post-judgment motion for attorney fees, the trial
court found that this court’s decision enforcing the State Bar screening process for
legal advertising complaints served an important public interest: avoiding
frivolous lawsuits that burden attorneys’ First Amendment rights to advertise. We
conclude that the trial court erred in finding that respondents’ defense of this case
satisfied the requirements of the private attorney general doctrine. We therefore
reverse the award of attorney fees to respondents.
2
We affirm the denial of Ashegian’s motion for sanctions under section 128.7
as well as the denial of his motion to tax costs.
FACTUAL AND PROCEDURAL BACKGROUND1
The Complaints
Ashegian brought a “civil enforcement action” against respondents pursuant
to section 6158.4, subdivision (e), alleging that they were engaging in online
advertising that was false, misleading, and deceptive, in violation of the State Bar
Act, which, in part, regulates advertising for legal services. In particular, the initial
complaint alleged that respondent Allen, an attorney, maintained a “banner ad” on
the website associated with the newspaper Balita that is distributed to the Filipino-
American community in Los Angeles County. According to the complaint, when
an Internet user clicked on the banner ad, he or she was directed to respondent
Beirne’s web page instead, which Ashegian alleged constituted a deceptive act.
The complaint further alleged that Beirne’s web page featured a video of an
unidentified woman making false, misleading or deceptive statements of support
for the Beirne law office.
Ashegian amended his complaint to state that following service of the
original complaint on respondents, Internet users who clicked on the banner ad for
Allen were no longer routed to Beirne’s web page. Instead, users were directed to
Allen’s single-page website, which stated, “We are a federally designated debt
relief agency,” language which Ashegian alleged did not satisfy the requirements
set forth in 11 United States Code section 528, subdivisions (a)(3) and (4), (b)(1).
The amended complaint further alleged that a blog posting by Allen falsely stated
1
Many of the background facts stated herein are borrowed from the Ashegian 1
decision.
3
that Allen’s firm had been handling bankruptcy cases for over a decade, when in
fact Allen was a new lawyer in his mid-twenties. Ashegian alleged that the
Internet advertising violated sections 6158 (barring electronic advertising that,
taken as a whole, is false, misleading, or deceptive), 6158.1 (creating a rebuttable
presumption that certain types of messages are false, misleading, or deceptive), and
6158.3 (requiring that particular disclosures be included if an electronic
advertisement portrays a result in a particular case). Ashegian sought multiple
$5,000 fines against individual respondents for numerous broadcasts allegedly
violating the State Bar Act, for a total of $115,000 in fines pursuant to section
6158.4, subdivision (e), as well as attorney fees.
Respondents’ Demurrer and Trial Court’s Ruling
Respondents demurred to the amended complaint, arguing in part that the
complaint failed to allege compliance with the mandatory State Bar administrative
review process set forth in section 6158.4, subdivision (a), a prerequisite for filing
a civil enforcement action under subdivision (e).2 In response, Ashegian argued
2
Section 6158.4 provides in relevant part that “(a) Any person claiming a violation
of Section 6158, 6158.1, or 6158.3 may file a complaint with the State Bar that states the
name of the advertiser, a description of the advertisement claimed to violate these
sections, and that specifically identifies the alleged violation. A copy of the complaint
shall be served simultaneously upon the advertiser. The advertiser shall have nine days
from the date of service of the complaint to voluntarily withdraw from broadcast the
advertisement that is the subject of the complaint. If the advertiser elects to withdraw the
advertisement, the advertiser shall notify the State Bar of that fact, and no further action
may be taken by the complainant. The advertiser shall provide a copy of the complained
of advertisement to the State Bar for review within seven days of service of the
complaint. Within 21 days of the delivery of the complained of advertisement, the State
Bar shall determine whether substantial evidence of a violation of these sections exists.
The review shall be conducted by a State Bar attorney who has expertise in the area of
lawyer advertising.
4
“(b)(1) Upon a State Bar determination that substantial evidence of a violation
exists, if the member or certified lawyer referral service withdraws that advertisement
from broadcast within 72 hours, no further action may be taken by the complainant.
“(2) Upon a State Bar determination that substantial evidence of a violation exists,
if the member or certified lawyer referral service fails to withdraw the advertisement
within 72 hours, a civil enforcement action brought pursuant to subdivision (e) may be
commenced within one year of the State Bar decision. If the member or certified lawyer
referral service withdraws an advertisement upon a State Bar determination that
substantial evidence of a violation exists and subsequently rebroadcasts the same
advertisement without a finding by the trier of fact in an action brought pursuant to
subdivision (c) or (e) that the advertisement does not violate Section 6158, 6158.1, or
6158.3, a civil enforcement action may be commenced within one year of the
rebroadcast.
“(3) Upon a determination that substantial evidence of a violation does not exist,
the complainant is barred from bringing a civil enforcement action pursuant to
subdivision (e), but may bring an action for declaratory relief pursuant to subdivision (c).
“(c) Any member or certified lawyer referral service who was the subject of a
complaint and any complainant affected by the decision of the State Bar may bring an
action for declaratory relief in the superior court to obtain a judicial declaration of
whether Section 6158, 6158.1, or 6158.3 has been violated, and, if applicable, may also
request injunctive relief. Any defense otherwise available at law may be raised for the
first time in the declaratory relief action, including any constitutional challenge. Any
civil enforcement action filed pursuant to subdivision (e) shall be stayed pending the
resolution of the declaratory relief action. The action shall be defended by the real party
in interest. The State Bar shall not be considered a party to the action unless it elects to
intervene in the action.
“(1) Upon a State Bar determination that substantial evidence of a violation exists,
if the complainant or the member or certified lawyer referral service brings an action for
declaratory relief to obtain a judicial declaration of whether the advertisement violates
Section 6158, 6158.1, or 6158.3, and the court declares that the advertisement violates
one or more of the sections, a civil enforcement action pursuant to subdivision (e) may be
filed or maintained if the member or certified lawyer referral service failed to withdraw
the advertisement within 72 hours of the State Bar determination. The decision of the
court that an advertisement violates Section 6158, 6158.1, or 6158.3 shall be binding on
the issue of whether the advertisement is unlawful in any pending or prospective civil
enforcement action brought pursuant to subdivision (e) if that binding effect is supported
by the doctrine of collateral estoppel or res judicata.
“If, in that declaratory relief action, the court declares that the advertisement does
not violate Section 6158, 6158.1, or 6158.3, the member or lawyer referral service may
broadcast the advertisement. The decision of the court that an advertisement does not
violate Section 6158, 6158.1, or 6158.3 shall bar any pending or prospective civil
5
that section 6158.4 requires only residents of states other than California to go
through the State Bar review process set forth in the statute, and thus he contended
that, as a California resident he did not need to comply with that process. He noted
that while subdivision (a) of section 6158.4 provides that any person “may file a
complaint with the State Bar” describing a violation of sections 6158, 6158.1, or
6158.3 (§ 6158.4, subd. (a), italics added), subdivision (e) states that such a
violation “shall be cause for a civil enforcement action brought by any person
residing within the State of California” (§ 6158.4, subd. (e), italics added). The
trial court disagreed with Ashegian’s interpretation of the statute, and found that
section 6158.4 required him to submit a complaint to the State Bar despite his
California residency and to comply with the other requirements of that statute as a
prerequisite to any civil enforcement action pursuant to subdivision (e) of that
section.
enforcement action brought pursuant to subdivision (e) if that prohibitive effect is
supported by the doctrine of collateral estoppel or res judicata.
“. . .
“(d) The State Bar review procedure shall apply only to members and certified
referral services. A direct civil enforcement action for a violation of Section 6158,
6158.1, or 6158.3 may be maintained against any other advertiser after first giving 14
days’ notice to the advertiser of the alleged violation. If the advertiser does not withdraw
from broadcast the advertisement that is the subject of the notice within 14 days of
service of the notice, a civil enforcement action pursuant to subdivision (e) may be
commenced. The civil enforcement action shall be commenced within one year of the
date of the last publication or broadcast of the advertisement that is the subject of the
action.
“(e) Subject to Section 6158.5, a violation of Section 6158, 6158.1, or 6158.3
shall be cause for a civil enforcement action brought by any person residing within the
State of California for an amount up to five thousand dollars ($5,000) for each individual
broadcast that violates Section 6158, 6158.1, or 6158.3.”
6
Ashegian I Unpublished Opinion
On appeal, in Ashegian I, this court addressed the proper interpretation of
section 6158.4, a question of first impression, and affirmed the trial court’s
conclusion that Ashegian was required to comply with the State Bar review
procedures set forth in section 6158.4 as a condition precedent to any civil
enforcement action.
We interpreted section 6158.4’s required screening process as follows:
“Subdivisions (a) through (d) of section 6158.4 set forth a procedure for State Bar
review of complaints about electronic media advertising by attorneys and certified
lawyer referral services that allegedly violates sections 6158, 6158.1, or 6158.3. In
providing that any person ‘may’ file a complaint with the State Bar about such a
violation, subdivision (a) merely describes the legal recourse that individuals have
with respect to advertising that they believe violates the electronic advertising
regulations. If the advertiser voluntarily withdraws the advertisement from
broadcast within nine days and notifies the State Bar of that fact, ‘no further action
may be taken by the complainant.’ (§ 6158.4, subd. (a).) If the advertiser does not
initially withdraw the advertisement, and the State Bar review results in the
determination that ‘substantial evidence of a violation of these sections exists,’ the
advertiser has yet another opportunity to withdraw the advertisement within 72
hours of the determination and to thus prevent any further action by the
complainant. (§ 6158.4, subd. (b)(1).) The complainant is also barred from
bringing a civil enforcement action pursuant to subdivision (e) if the State Bar
review concludes that substantial evidence of a violation does not exist, unless the
complainant subsequently brings a declaratory relief action and the court declares
that the advertisement violates section 6158, 6158.1, or 6158.3, and the advertiser
broadcasts the advertisement following that decision. (§ 6158.4, subds. (b)(3),
(c)(2).) If the State bar determines that substantial evidence of a violation exists
7
and the advertiser fails to withdraw the advertisement within 72 hours, a civil
enforcement action pursuant to subdivision (e) may be commenced. (§ 6158.4,
subd. (b)(2).) Subdivision (d) clarifies that the State Bar review procedure applies
only to advertisements by ‘members’ (the definition of which includes law firms
(see § 6157, subd. (a)), and certified lawyer referral services, and that direct civil
enforcement actions pursuant to subdivision (e) may be maintained against other
advertisers if such advertisers do not withdraw their advertisement from broadcast
after being given 14 days’ notice. (§ 6158.4, subd. (d).) [¶] It is within the
context of these preceding provisions that we must construe the language of
subdivision (e), which provides in pertinent part that ‘a violation of Section 6158,
6158.1, or 6158.3 shall be cause for a civil enforcement action brought by any
person residing within the State of California.’ (§ 6158.4, subd. (e).) Although
subdivision (e) provides that only residents of California may bring a civil
enforcement action, this does not mean that the limitations on the right to bring
such an enforcement action, as set forth in the preceding subdivisions, do not apply
to California residents. Rather, the rights of California residents to bring a civil
enforcement action under subdivision (e) are necessarily qualified by the preceding
subdivisions that relate to it and refer to it. [¶] The purpose of section 6158.4 is
evident from its plain language: to establish a State Bar screening procedure for
complaints about electronic media advertising by ‘members’ and certified lawyer
referral services and to afford these groups multiple opportunities to withdraw
from broadcast offending advertisements before any punitive action can be taken.
Beirne and Allen and their respective law offices qualify as ‘members’ and
accordingly, section 6158.4 required Ashegian to submit a complaint to the State
Bar and to comply with the other requirements of that statute as a prerequisite to
any civil enforcement action pursuant to subdivision (e) of that section. Because
8
Ashegian’s complaint failed to allege compliance with these review procedures, he
failed to state a claim for a violation of sections 6158, 6158.1, or 6158.3.”
We further noted that the legislative history revealed that, in crafting the
provisions restricting electronic advertising by attorneys, “the legislature grappled
with the need to take measures to protect the public against the danger of false and
misleading electronic advertising for legal services without encouraging frivolous
lawsuits that could have a chilling effect on attorneys’ protected speech.” We
found that “[t]he ‘State Bar screening’ of complaints was proposed in the Senate
Committee on the Judiciary as a means of deterring frivolous lawsuits, along with
safe harbors for advertisers who withdrew the allegedly offending electronic
advertisements.”
Respondents’ Attorney Fees Motion
Respondents subsequently filed a motion for an award of attorney fees
totaling $46,300, under section 6158.4, subdivision (i), and Code of Civil
Procedure section 1021.5 (section 1021.5). They argued that they were “forced to
defend this action to enforce important public benefits designed for the public,
including the elimination of frivolous lawsuits.” In so arguing, they relied on our
holding in Ashegian I that the State Bar review process mandated by subdivision
(e) of section 6158.4 was intended to deter frivolous lawsuits challenging legal
advertisements that could burden attorneys’ First Amendment right to advertise.
In opposing the motion for attorney fees, Ashegian argued: (1) the motion
was untimely; (2) this court decided in Ashegian I that respondents were not
entitled to attorney fees on appeal; and (3) respondents failed to meet their burden
to satisfy the elements of section 1021.5, including the requirements that (a) the
action have resulted in enforcement of an important public interest, where
respondents’ deceptive advertising at the base of the lawsuit was contrary to the
9
public interest and the lawsuit was not dismissed on the merits but rather on
procedural grounds; (b) the action have conferred a significant benefit on the
general public or a large class of persons; and (c) the financial burden of
respondents’ defense be out of proportion to their individual stake in the case.
In their reply, respondents conceded that they had not timely moved for their
fees incurred prior to the original judgment entered after the trial court sustained
their demurrer. Thus, they stated that they had withdrawn their request for fees
except as to $18,900 in fees incurred on appeal and in connection with the motion
for attorney fees. Respondents further noted that this court had not determined the
issue of attorney fees in Ashegian I. They contended that the result in the lawsuit
benefited attorneys by enforcing the State Bar screening process, and they further
contended that the financial burden of incurring almost $59,000 in fees and costs to
defend this matter was out of proportion to their individual stake in the case,
particularly given that the lawsuit was frivolous. They asserted that the Ashegian I
decision and the record constituted sufficient evidence to support the attorney fee
award.
The trial court granted respondents’ motion for attorney fees in the amount
of $18,900. The court concluded that respondents’ successful demurrer asserting
that Ashegian could not circumvent the State Bar screening process under section
6158.4, enforced the important public interest the screening process was intended
to serve: avoiding frivolous lawsuits that burden attorneys’ First Amendment
rights to advertise. Thus, the court found that respondents had met the statutory
requirements for an award of attorney fees under section 6158.4, subdivision (i),
and section 1021.5.
10
Ashegian’s Motion for Sanctions under Section 128.7
After serving respondents with a motion for sanctions under section 128.7
on October 3, 2013, Ashegian filed the motion on October 25, 2013. Ashegian
asserted three grounds for the requested sanctions: (1) respondents knew their
motion for attorney fees incurred in the trial court proceedings was untimely;
(2) the Court of Appeal had already ruled respondents were not entitled to attorney
fees; and (3) respondents did not support their motion with evidence.
Respondents responded that they had already withdrawn the request for
attorney fees incurred during the trial court proceeding, and had advised Ashegian
of the withdrawal by email and letter dated October 24, 2013. They further
asserted Ashegian mischaracterized the correction made to the Ashegian I opinion
whereby this court deleted the erroneous reference to attorney fees in the
disposition. Finally, they asserted that the Ashegian I opinion, the case record, and
the statutory provisions relied upon sufficiently supported their motion for attorney
fees.
In reply, Ashegian asserted that respondents had acknowledged in an email
on the final day of the 21-day safe harbor period that their request for attorney fees
at the trial court level was untimely, but they failed to withdraw the improper
pleading during the safe harbor period as required to avoid sanctions.
The court determined that it was unclear from the record if Ashegian had
satisfied the procedural requirement that he serve the section 128.7 motion on
respondents at least 21 days before filing it. Further, even if that procedural
requirement were met, respondents’ failure to withdraw the request for a portion of
the attorney fees did not warrant sanctions. The court found that the other asserted
grounds for the section 128.7 motion also did not justify sanctions because
Ashegian had not shown that respondents’ legal contentions were unwarranted or
11
that the motion was presented for improper purposes. The court thus denied the
motion for sanctions.
Ashegian’s Motion to Tax Costs
Respondents also sought to recover $500.75 in printing costs,3 among other
costs. Ashegian filed a motion to tax costs that, as relevant on appeal, requested
that the court strike the portion of the printing costs attributable to the copying of
respondents’ appendix, which Ashegian contended was largely duplicative of his
own appendix. The court found the printing costs were reasonable, denied the
motion to tax costs in its entirety, and awarded respondents a total of $2,462.18 for
costs incurred at both the trial court and appellate levels. A superseding judgment
was entered awarding respondents attorney fees and costs in the above amount.
Ashegian timely appealed from the post-judgment orders awarding attorney
fees and costs to respondents, and denying his motion for sanctions.
DISCUSSION
I. Attorney Fee Award
Ashegian contends that the trial court erred in awarding respondents attorney
fees under section 6158.4, subdivision (i) and section 1021.5 for fees incurred on
the Ashegian I appeal.4 Section 6158.4 subdivision (i) provides that “[i]n any civil
action brought pursuant to this section, the court shall award attorney’s fees
3
Their memorandum of costs sought $661.50 for printing costs, but they later
reduced the request to $500.75 after discovering a mistake.
4
Ashegian does not dispute that a successful party may recover fees under sections
6158.4 and 1021.5 for services on appeal. (Lyons v. Chinese Hospital Assn. (2006) 136
Cal.App.4th 1331, 1356; Cal. Rules of Court, rule 3.1702(c).) He also does not contest
the amount of the attorney fee award.
12
pursuant to Section 1021.5 . . . if the court finds that the action has resulted in the
enforcement of an important public interest or that a significant benefit has been
conferred on the public.” Section 1021.5 provides, in relevant part: “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, or
of enforcement by one public entity against another public entity, 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.” Where there is no monetary recovery, factor
(c) is not applicable. (Woodland Hills Residents Assn., Inc. v. City Council (1979)
23 Cal.3d 917, 934-935 (Woodland Hills).) “‘The burden is on the claimant to
establish each prerequisite to an award of attorney fees under section 1021.5.’”
(Samantha C. v. State Dept. of Developmental Services (2012) 207 Cal.App.4th 71,
78.)5
We normally review the trial court’s decision to award attorney fees for an
abuse of discretion. (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169,
5
Section 1021.5 “‘is an exception to the general rule in California, commonly
referred to as the American rule and codified in section 1021, that each party to a lawsuit
must ordinarily pay his or her own attorney fees.’” (Azure Ltd. v. I–Flow Corp. (2012)
207 Cal.App.4th 60, 66.) “‘[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.’ [Citation.]” (Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 565
(Graham).)
13
1175.) “‘However, de novo review of such a trial court order is warranted where
the determination of whether the criteria for an award of attorney fees and costs in
this context have been satisfied amounts to statutory construction and a question of
law.’” (Ibid.; see Robinson v. City of Chowchilla (2011) 202 Cal.App.4th 382,
391.)
A. Interpretation of Section 6158.4, subdivision (i)
1. “Action”
Ashegian first contends that only a plaintiff may qualify for an attorney fee
award under section 6158.4, subdivision (i), because the provision states that “the
court shall award attorney’s fees pursuant to Section 1021.5 . . . if the court finds
that the action has resulted in the enforcement of an important public interest or
that a significant benefit has been conferred on the public.” (§ 6158.4, subd. (i),
italics added.) Ashegian’s argument is not well-taken.
The interpretation of section 6158.4, subdivision (i) is a matter of first
impression. “In matters of statutory construction, ‘[w]e apply well-established
principles of statutory construction in seeking “to determine the Legislature’s
intent in enacting the statute ‘“so that we may adopt the construction that best
effectuates the purpose of the law.”’” [Citations.] We begin with the statutory
language because it is generally the most reliable indication of legislative intent.
[Citation.] If the statutory language is unambiguous, we presume the Legislature
meant what it said, and the plain meaning of the statute controls. [Citation.]’
[Citation.] But if the statutory language may reasonably be given more than one
interpretation, courts may employ various extrinsic aids, including a consideration
of the purpose of the statute, the evils to be remedied, the legislative history, public
policy, and the statutory scheme encompassing the statute. [Citation.]”
(Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1214 (Whitley).)
14
Ashegian notes that an “action” is defined as “an ordinary proceeding in a
court of justice by which one party prosecutes another for the declaration,
enforcement, or protection of a right, the redress or prevention of a wrong, or the
punishment of a public offense.” (Civ. Proc. Code, § 22.) However, it has been
held that “[a]n action is not limited to the complaint or the document initiating the
action but the entire judicial proceeding.” (Palmer v. Agee (1978) 87 Cal.App.3d
377, 387.) Thus, in Windsor Pacific LLC v. Samwood Co., Inc. (2013) 213
Cal.App.4th 263, in interpreting an attorney fee clause providing for an attorney
fee award to the prevailing party “‘[i]n any action or proceeding to enforce or
interpret the provisions of this Agreement,’” the court held that the word “action”
encompasses the entire judicial proceeding, including any defenses asserted, and
thus the defendant could be awarded attorney fees. (Id. at p. 274; but see Salawy v.
Ocean Towers Housing Corp. (2004) 121 Cal.App.4th 664, 672-673 [the common
meaning of “action” does not include procedural steps such as a demurrer or other
defenses].) Moreover, nothing in subdivision (i) of section 6158.4 states that only
the party who initiates the “action” may recover attorney fees. Rather, it provides
only that the action must result in the enforcement of an important public interest.
If the action results in the enforcement of an important public interest, nothing on
the face of the statute would disqualify a prevailing defendant from recovering
attorney fees.
We note that section 1021.5 similarly provides for an award of attorney fees
“to a successful party . . . in any action which has resulted in the enforcement of an
important right affecting the public interest.” By Ashegian’s logic, a defendant
could not recover fees under that provision because he or she did not initiate the
action. However, courts have not interpreted section 1021.5 that way, and instead
uniformly have held that a successful defendant who satisfies the other
requirements of section 1021.5 may qualify for an award of attorney fees under the
15
provision. (See Environmental Protection Information Center v. Department of
Forestry & Fire Protection (2010) 190 Cal.App.4th 217, 231–232 (Environmental
Protection); DiPirro v. Bondo Corp. (2007) 153 Cal.App.4th 150, 198 (DiPirro);
Wal-Mart Real Estate Business Trust v. City Council of San Marcos (2005) 132
Cal.App.4th 614, 622 (Wal-Mart); Hull v. Rossi (1993) 13 Cal.App.4th 1763,
1768.) In DiPirro, the court noted that “‘[g]enerally speaking, the opposing party
liable for attorney fees under section 1021.5 has been the defendant person or
agency sued, which is responsible for initiating and maintaining actions or policies
that are deemed harmful to the public interest and that gave rise to the litigation.’
[Citation.] However, to effectuate the policy of providing substantial attorney fees
to successful litigants in suits enforcing important public policies, the courts ‘have
taken a broad, pragmatic view of what constitutes a “successful party.”’ [Citation.]
An ‘opposing party’ against whom attorney fees may be awarded pursuant to . . .
section 1021.5 is defined broadly as ‘a party whose position in the litigation was
adverse to that of the prevailing party. Simply put, an “opposing party” within the
meaning of section 1021.5 is a losing party.’ [Citation.] Thus, prevailing
defendants are entitled to attorney fees upon a proper showing. . . . An award of
attorney fees pursuant to section 1021.5 is available if a party defends an action
‘“primarily to advance”’ a public interest ‘“rather than personal interests.”
[Citation.]’ [Citation.]” (DiPirro, supra, 153 Cal.App.4th at pp. 198-199.)
Likewise, we conclude that where the requirements of the statute are
otherwise satisfied, a defendant may recover attorney fees under section 6158.4,
subdivision (i).
2. Required Elements for Fee Award under Section 6158.4, subdivision (i)
As noted above, section 6158.4, subdivision (i) provides that in civil
enforcement actions brought under section 6158.4, subdivision (e), “the court shall
16
award attorney’s fees pursuant to Section 1021.5 . . . if the court finds that the
action has resulted in the enforcement of an important public interest or that a
significant benefit has been conferred on the public.” (§ 6158.4, subd. (i), italics
added.) But an award of attorney fees under section 1021.5 requires not only a
finding that the action has resulted in the enforcement of an important public
interest, but also that (a) a significant benefit has been conferred on the general
public or a large class of persons, and (b) the necessity and financial burden of
private enforcement are such as to make the award appropriate. (Woodland Hills,
supra, 23 Cal.3d at pp. 934-935; Whitley, supra, 50 Cal.4th at p. 1214.) Thus,
there is an internal inconsistency in section 6158.4, subdivision (i): while that
statute authorizes an award of attorney fees on a finding either that the action has
resulted in the enforcement of an important public interest or that a significant
benefit has been conferred on the public, it directs that such award be made
“pursuant to” section 1021.5. That statute, in contrast, requires a finding of both
components of section 6158.4, subdivision (i), along with an additional finding
that the award of attorney fees is justified by the necessity and financial burden of
private enforcement.
Below and on appeal, respondents argued that in order to award fees, the
trial court need only have found that the action resulted in the enforcement of an
important public interest.6 The superior court adopted the same interpretation, and
6
Respondents actually made this argument based on their erroneous interpretation
of section 1021.5, not the language of section 6158.4. In arguing that a trial court need
only find either an “important right affecting the public interest” or a “significant
benefit” to award fees under section 1021.5, they cite to Woodland Hills and Graham, but
neither decision supports their contention. Woodland Hills held that “we must consider
whether: (1) plaintiffs’ 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
17
based its award of attorney fees solely on its finding that the underlying action
enforced the important public interest of deterring frivolous lawsuits that have a
chilling effect on attorneys’ legal advertising. We conclude that the trial court
applied an incorrect legal standard, and reached the wrong result.
We start by examining the use of the phrase “pursuant to section 1021.5” in
section 6158.4, subdivision (i). “In common understanding, the phrase ‘pursuant
to’ means ‘in conformance to or agreement with’ and ‘according to.’” (Rodriguez
v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1122, citing
Webster’s 3d New Internat. Dict. (2002) p. 1848 [where agreement specified that
claims shall be arbitrated “pursuant to the FAA,” the parties plainly intended all
the provisions of the FAA to apply].) By providing for attorney fee awards
“pursuant to” section 1021.5, section 6158.4, subdivision (i) seemingly requires
that all elements of section 1021.5 be satisfied before an award of attorney fees
may be made.
In examining the policy intended to be served by section 6158.4, and the
legislative history,7 we find no basis for concluding that the legislature meant to
impose less stringent requirements for a party to recover attorney fees under
section 6158.4, subdivision (i) than under section 1021.5. The public interests
implicated by section 6158.4, subdivision (i) – the protection of consumers against
appropriate.’” (Woodland Hills, supra, 23 Cal.3d at p. 935.) In Graham, the Supreme
Court noted that “section 1021.5 requires both a finding of a significant benefit conferred
on a substantial number of people and a determination that the ‘subject matter of the
action implicated the public interest.’ [Citation.]” (Graham, supra, 34 Cal.4th at p. 578,
italics added.)
7
On our own motion, we have taken judicial notice of the legislative history of
section 6158.4, as enacted by Assembly Bill No. 3659 (1993-1994 Reg. Sess.) as chapter
4, article 9.5. (Kern v. County of Imperial (1990) 226 Cal.App.3d 391, 400, fn. 8
[appellate court may take judicial notice of legislative history materials on own motion].)
18
misleading or fraudulent legal advertising, as well as the protection of the limited
First Amendment rights of attorneys to advertise via electronic media – are no
more weighty than the countless fundamental public interests served in cases
where section 1021.5 applies. (See, e.g., Center for Biological Diversity v. County
of San Bernardino (2010) 185 Cal.App.4th 866, 892–893 [enforcing CEQA];
County of San Luis Obispo v. Abalone Alliance (1986) 178 Cal.App.3d 848, 867
[protecting the right to lawful protests]; Hull v. Rossi, supra, 13 Cal.App.4th at p.
1768 [vindicating rights to present and receive information concerning ballot
initiatives]; Wal-Mart, supra, 132 Cal.App.4th at pp. 622-623 [protection of
constitutional right of initiative and referendum]; Planned Parenthood v. Aakhus
(1993) 14 Cal.App.4th 162, 172 [protecting constitutional abortion right]; Braude
v. Automobile Club of Southern Cal. (1986) 178 Cal.App.3d 994, 1013 [enforcing
right to have fair and reasonable election procedures in nonprofit corporations].)
We thus conclude that the legislature intended to incorporate all the
requirements of section 1021.5 in section 6158.4, subdivision (i). Therefore, the
court erred by considering only whether an important public interest was enforced8
and failing to consider whether (1) the action conferred a significant benefit on the
public and (2) the necessity and financial burden of private enforcement make an
award of attorney fees appropriate.
8
We assume without deciding that the trial court correctly concluded that the
decision in this case, enforcing the State Bar screening process for legal advertising
complaints, served an important public interest of avoiding frivolous lawsuits that burden
attorneys’ First Amendment rights to advertise. (See Family Planning Specialists
Medical Group, Inc. v. Powers (1995) 39 Cal.App.4th 1561, 1568 (Family Planning)
[although free speech rights are, as a general matter, among those recognized as
important public interests, defendant failed to show that his defense of libel action
actually resulted in the enforcement of his or anyone else’s rights to free speech].)
19
We need not remand this case to the trial court to consider the application of
these additional two elements, because the facts are undisputed and because
respondents claim that it was our opinion in Ashegian I that helped enforce the
alleged public interest. “An appellate court is in at least as good a position as the
trial court to judge whether the legal right enforced through its own opinion is
‘important’ and ‘protects the public interest’ and whether the existence of that
opinion confers a ‘significant benefit on the general public. . . .’” (Los Angeles
Police Protective League v. City of Los Angeles (1986) 188 Cal.App.3d 1, 8; see
Environmental Protection, supra, 190 Cal.App.4th at p. 229 [“[W]here the claim
of significant benefit rests on an appellate opinion, it may be more appropriate for
this court, rather than the trial court, to decide whether the case qualifies for a fee
award.”].)
B. Significant Benefit Requirement
As a matter of law, respondents cannot show that a significant benefit has
been conferred on the general public or a large class of persons.
“The ‘significant benefit’ required by . . . section 1021.5 need not be
tangible or concrete but may be recognized from the effectuation of a fundamental
policy.” (Indio Police Command Unit Assn. v. City of Indio (2014) 230
Cal.App.4th 521, 543.) “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
20
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.” (Woodland
Hills, supra, 23 Cal.3d at pp. 939-940; see Concerned Citizens of La Habra v. City
of La Habra (2005) 131 Cal.App.4th 329, 335 [“[T]he mere vindication of a
statutory violation is not sufficient to be considered a substantial benefit by
itself.”].)
Beyond the mere vindication of a violation of section 6158.4’s procedural
requirements, any “success” by respondents on First Amendment grounds is quite
limited and relatively insignificant. Family Planning is instructive. In that case,
the plaintiffs, who were obstetricians at a clinic that performed abortions, sued the
defendant, an anti-abortion protestor, for distributing leaflets alleged to be libelous
because they falsely stated that the plaintiffs specialized in late-term abortions,
among other accusations. (Family Planning, supra, 39 Cal.App.4th at p. 1563.)
The trial court denied the plaintiffs’ request for a preliminary injunction and later
the plaintiffs dismissed their complaint without prejudice. (Id. at pp. 1565-1566.)
The defendant sought attorney fees under section 1021.5, asserting that he had
enforced free speech rights. The appellate court affirmed the trial court’s denial of
the fee motion, holding that even assuming the defendant enforced an important
public interest, the defendant’s “‘success’ in the litigation was very narrow,
benefiting only himself. The most generous reading of [the defendant’s]
accomplishment was that he protected his own right to circulate a particular type of
leaflet vilifying respondents for performing late-term abortions. In the factual
circumstances here presented, however, he was obviously treading very close to
the line separating protected expression from libel. It certainly cannot be said that
by obtaining a dismissal of the action, [the defendant] won a ‘ringing declaration’
of the rights of abortion opponents to conduct the same or a similar campaign.”
(Id. at p. 1570.) The court further concluded that “the Legislature did not intend to
21
authorize an award of attorney fees in every case in which first amendment issues
are only marginally involved.” (Id. at p. 1570; cf. Slayton v. Pomona Unified
School Dist. (1984) 161 Cal.App.3d 538, 551-552 [holding that successful mandate
proceeding to end illegal conduct of school administrators, including violations of
First Amendment and Education Code, benefited a large class of persons where all
current and future students and parents at school would benefit from school’s
mandatory compliance with trial court order].)
Respondents likewise have not presented a compelling argument that this
action served to protect the significant First Amendment rights of many, or any,
besides themselves. We should not lose sight of the fact that the main purpose of
section 6158.4 is to protect the public from deceptive and misleading attorney
advertising, and the private right of enforcement for California residents under
subdivision (e) of that provision was intended to support this purpose. It is true
that the State Bar screening process is intended as a counterbalance, to protect
against frivolous lawsuits that could have a chilling effect on attorneys who want
to advertise in electronic media. But the First Amendment concerns implicated by
section 6158.4 are secondary to the statute’s main goal to protect the public against
deceptive advertising. Moreover, respondents presented no evidence that since the
amendment of the State Bar Act in 1994 to include the private right of enforcement
against legal advertisers, there has been anything approaching a barrage of civil
enforcement actions directed at legal advertisers. The dearth of authority with
respect to section 6158.4 suggests that the contrary is true. Thus, it would be
speculative to find that more than a trivial number of attorneys stand to
significantly benefit from the affirmation of the State Bar review process in
Ashegian I.
Moreover, our decision in Ashegian I is unpublished, and thus has no
precedential weight. (See Pacific Legal Foundation v. California Coastal Com.
22
(1982) 33 Cal.3d 158, 167 [ no “significant benefit” where litigation resulted in a
superior court decision declaring an unconstitutional taking that was limited to the
parties and had no precedential value]; cf. County of San Diego v. Lamb (1998) 63
Cal.App.4th 845, 852-853 [significant benefit conferred by published appellate
decision construing child dependency statute to clarify that DCFS may not seek
reimbursement of AFDC benefits from the noncustodial parent of a minor who is
the custodial parent of the needy child]; Beach Colony II v. California Coastal
Com. (1985) 166 Cal.App.3d 106, 111 (Beach Colony) [finding a significant
benefit where published decision established the rights of all similarly situated
landowners].)
Even assuming that some legal advertisers other than respondents could
benefit from our unpublished decision, this small subset is not a “large class of
persons” or the “general public.” (§ 1021.5.) DiPirro is analogous in this respect.
In that case, the plaintiff invoked Proposition 65, the California Safe Drinking
Water and Toxic Enforcement Act, against an automobile manufacturer based on
its use of an industrial solvent in its touch-up paint. The trial court found that
warnings under that Act were not required. (DiPirro, supra, 153 Cal.App.4th at p.
163.) The manufacturer sought private attorney general fees, but the trial court
denied the request. The appellate court affirmed, holding that “[t]he judgment that
Proposition 65 warnings are not required on its touch-up paint tubes is a result that
affects a limited class of consumers of that product. . . . Further, the benefit
conferred upon automobile manufacturers or dealerships was certainly not
significant to the general public or a large class of persons.” (Id. at p. 199.)
Similarly here, any benefit to attorneys who wish to advertise via electronic media
could not be deemed a significant benefit to the general public or a large class of
persons.
23
As such, as a matter of law, respondents were not entitled to attorney fees
under section 6158.4, subdivision (i) and section 1021.5, and we reverse the trial
court’s order awarding attorney fees to respondents.9
II. Motion for Sanctions
Ashegian contends that the trial court erred in denying his motion for
sanctions under section 128.7, based on respondents’ motion for attorney fees. On
appeal, Ashegian asserts that sanctions were warranted for two reasons:
(1) respondents failed to withdraw within the 21-day safe harbor period the portion
of their motion seeking an award of attorney fees incurred in the trial court
proceedings, even though they knew the request for such fees was untimely; and
(2) respondents did not support their attorney fee motion with evidence.
“‘The purpose of section 128.7 is to deter frivolous filings.’” (Kojababian v.
Genuine Home Loans, Inc. (2009) 174 Cal.App.4th 408, 421.) “‘[S]ection 128.7
provides that the filing of a pleading certifies that, to the attorney or unrepresented
party’s “knowledge, information, and belief, formed after an inquiry reasonable
under the circumstances,” the pleading is not being presented “primarily for an
improper purpose,” the claims, defenses and other legal contentions therein are
“warranted,” and the allegations and other factual contentions “have evidentiary
support.” [Citation.] If these standards are violated, the court can impose an
appropriate sanction sufficient to deter future misconduct, including a monetary
sanction. [Citation.]’ [Citation.]” (Ibid.)
9
Because we hold that respondents were not entitled to attorney fees because no
significant benefit was conferred on the general public or a large class of persons, we
need not reach the final element required for an award of attorney fees under section
1021.5: the necessity and financial burden of private enforcement.
24
“Because our adversary system requires that attorneys and litigants be
provided substantial breathing room to develop and assert factual and legal
arguments” (Peake v. Underwood (2014) 227 Cal.App.4th 428, 448), “section
128.7 sanctions should be ‘made with restraint’ [citation] and are not mandatory
even if a claim is frivolous.” (Ibid.) “We review a . . . section 128.7 sanctions
award under the abuse of discretion standard. [Citation.] We presume the trial
court’s order is correct and do not substitute our judgment for that of the trial court.
[Citation.] To be entitled to relief on appeal, the court’s action must be sufficiently
grave to amount to a manifest miscarriage of justice.” (Id. at p. 441.)
A. Failure to Withdraw Request for Attorney Fees for Trial Court
Proceedings
“[S]ection 128.7 provides for a 21–day period during which the opposing
party may avoid sanctions by withdrawing the offending pleading or other
document.” (Peake v. Underwood, supra, 227 Cal.App.4th at p. 441; see § 128.7,
subd. (c)(1).) “‘This permits a party to withdraw a questionable pleading without
penalty, thus saving the court and the parties time and money litigating the
pleading as well as the sanctions request.’ [Citation.]” (Liberty Mutual Fire Ins.
Co. v. McKenzie (2001) 88 Cal.App.4th 681, 692.) The 21-day period is triggered
by service of the motion on the offending party. (§ 128.7, subd. (c)(1); Galleria
Plus, Inc. v. Hanmi Bank (2009) 179 Cal.App.4th 535, 538.)
On October 3, 2013, Ashegian served respondents with the motion for
sanctions. On October 24, 2013, the twenty-first day following the service of that
motion, respondents advised Ashegian by letter that the portion of their motion for
attorney fees incurred before the trial court was “withdrawn.” The following day,
October 25, 2013, Ashegian filed his motion for sanctions.
25
Ashegian suggests that respondents’ letter stating that the portion of the
motion was withdrawn was not sufficient to deem it withdrawn and to stop the 21-
day safe harbor period from running. However, he cites no authority supporting
his position. The letter was sufficient to put Ashegian on notice that he did not
need to waste time and money continuing to litigate the issue of the pre-appeal
attorney fees. As such, the letter withdrawal satisfied the purposes of section
128.7, and we conclude sanctions were appropriately denied on this basis.
B. Failure to Provide Evidentiary Support for Attorney Fee Motion
Ashegian contends that respondents’ motion for attorney fees lacked
evidentiary support, in violation of section 128.7, subdivisions (b)(1) and (3). As
discussed above, respondents’ motion for attorney fees was based on the erroneous
premise that the trial court needed only to find that the underlying action had
resulted in the enforcement of a public interest. Respondents contended that the
Ashegian I decision provided a sufficient basis for that finding by the trial court,
and that no additional evidence was needed.
Although both respondents and the trial court interpreted sections 6158.4
and 1021.5 incorrectly, we do not believe sanctions should be imposed on
respondents in this case. Even if we were to deem respondents’ motion for
attorney fees to be frivolous or unsupported, the imposition of sanctions still would
not be mandatory. (Peake v. Underwood, supra, 227 Cal.App.4th at p. 448.) As
such, we affirm the denial of the motion for sanctions.
III. Motion to Tax Costs
Ashegian contends that the trial court should have granted his motion to tax
respondents’ printing costs with respect to their 108-page appendix filed in
26
Ashegian I.10 He asserts that the costs to copy the appendix were not “reasonably
necessary” because eight of the 11 documents were already included in Ashegian’s
appendix, and the remaining three documents were not relevant to the issues on
appeal. Respondents failed to address this particular contention below or on
appeal. The trial court’s order likewise did not address the argument that the costs
for the appendix were not reasonably necessary because the included documents
were duplicative or irrelevant. Instead the court found that a total printing charge
of $500.75 for 10 copies each of respondents’ brief, appendix, and request for
judicial notice was a reasonable amount. We review the trial court’s award of
costs for an abuse of discretion. (Gibson v. Bobroff (1996) 49 Cal.App.4th 1202,
1209.)
The appellate rules encourage parties to stipulate to a joint appendix on
appeal, but allow parties to prepare separate appendixes. (Cal. Rules of Court, rule
8.124(a)(3).) “A respondent’s appendix may contain any document that could
have been included in the appellant’s appendix or a joint appendix.” (Cal. Rules of
Court, rule 8.124(b)(5).) An appendix “must not . . . [c]ontain documents . . . filed
in superior court that are unnecessary for proper consideration of the issues.” (Cal.
Rules of Court, rule 8.124(b)(3)(a).) Recoverable costs on appeal include costs for
printing an appendix. (Cal. Rules of Court, rule 8.278(d)(1)(B); see Advisory
Com. comment to same.) However, the Advisory Committee Comment to rule
8.278(c)(2) provides that “a party may seek to strike or tax costs on the ground that
an opponent included unnecessary materials in the record.”
10
Ashegian failed to identify in his motion to tax costs or his appellate briefs the
particular copying costs associated with the appendix. We have determined from our
review of the invoices submitted in the record that these costs totaled approximately
$134, including tax.
27
We have taken judicial notice of the contents of the appendixes in Ashegian
I, and conclude Ashegian is correct that eight of the pleadings included in
respondents’ appendix were included in Ashegian’s appendix. However, whereas
Ashegian’s appendix did not include conformed copies of those pleadings,
respondents’ appendix did. Although conformed copies are not required for
documents included in an appendix (Doppes v. Bentley Motors, Inc. (2009) 174
Cal.App.4th 967, 988; Advisory Com. com., Cal. Rules of Court, rule 8.124(d)),
we do not consider it an abuse of discretion to award costs for a respondent’s
appendix that includes conformed copies where the appellant’s appendix did not
include conformed copies.
As for the three allegedly irrelevant documents relating to respondents’
notices to the State Bar of their withdrawal of the legal advertisements at issue,
respondents requested that the trial court take notice of those documents as
government agency records, in connection with their demurrer. We find no abuse
of discretion in permitting recovery of costs for such items included in their
appendix.
28
DISPOSITION
The award of attorney fees is reversed, and the denials of the motion
for sanctions and motion to tax costs are affirmed. Otherwise, the superseding
judgment is affirmed. The parties shall bear their own costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
WILLHITE, J.
We concur:
EPSTEIN, P. J.
MANELLA, J.
29