New attorneys' fees decision: Abouab v. City and County of San Francisco

While not a UCL decision, Abouab v. City and County of San Francisco, ___ Cal.App.4th ___ (July 20, 2006), is worth reading because it addresses four of the potential bases for an attorneys' fees award in UCL cases: the private attorney general doctrine, the common fund theory, the substantial benefit theory, and the catalyst theory. The Court of Appeal (First Appellate District, Division Two) held that the plaintiff was not entitled to recover fees under any of these theories.

The decision addresses a question about the catalyst theory that I've had in my mind ever since the Supreme Court decided Graham v. DaimlerChrysler Corp., 34 Cal.4th 553 (2004). In Graham, the Supreme Court held that fees can be recovered under the catalyst theory only if the plaintiff made a pre-lawsuit attempt to resolve the dispute. Id. at 577. So, what if your case was already on file before Graham was decided? How can you satisfy that requirement after the fact? Under Abouab, you can't. The Court of Appeal held that the plaintiff could not recover fees under the catalyst theory because (among other reasons) he had not satified the pre-lawsuit notification requirement, even though his case was filed before the Supreme Court announced that requirement in Graham. (Slip op. at 21-30.) That does not seem entirely fair, but I suppose we should all be thankful that the Supreme Court adopted the catalyst theory at all.

Comments

[Consumer]

Why should attorneys recevie cash when the person who brings the suit receives coupons? These so called class action lawsuits are nothing more than shakedowns - the attorneys should be wearing a mask and carrying guns.

[Kimberly]

The Abouab decision did not involve a coupon settlement. Such settlements have been approved by some courts, but the Class Action "Fairness" Act has curtailed them to some degree.

Attorneys should be paid in class action cases when their work garners a benefit for the class. That is what the private attorney general doctrine, the substantial benefit theory, the common fund theory, and the catalyst theory all recognize. However, a fees award is by no means automatic. Abouab itself is an example of a case in which the court refused to award fees because it found that none of those theories applied. The court always stands as a gatekeeper between the attorneys and their fees in class action litigation.

Keep in mind that coupon settlements are, and were, relatively uncommon. However, they got a lot of attention in the press, leading some people to believe that the majority of class action settlements involve coupons, which is not accurate. It is also important to keep in mind that attorneys in class action lawsuits do a significant amount of very hard work, and they usually advance the necessary litigation costs out of their own pockets. Such costs can amount to hundreds of thousands of dollars. If they do not prevail in the action, they never get any of that money back. If they win, they should be paid for their work.