Attorney’s Fees Were Properly Awarded

Cates v. Chiang
(Cal. Ct. of App., 4th Dist.), filed February 7, 2013

Candace Cates brought a taxpayer action against several defendants, including the California Gambling Control Commission and the California State Controller, alleging these entities had failed to discharge their mandatory statutory duties to collect money derived from gambling owed to the state by various Indian tribes.

The trial court granted summary judgment in the defendants’ favor.  However, the appellate court reversed and remanded.

After the case was remanded to the trial court, the Commission completed audits of all of the affected tribes and determined the tribes had underpaid the state by about $12.8 million, and collected at least $11.5 million of this amount.  Based on the Commission’s audits and its collection of the delinquent funds, Cates was satisfied that the Commission was complying with its mandatory duties and dismissed her substantive causes of action.  As part of the dismissal, the parties stipulated the court would decide issues pertaining to Cates’s entitlement to attorney fees and the reasonable amount of any such fees in bifurcated proceedings.

The trial court found that Cates’s action was a “catalyst” that caused a change in the defendants’ conduct and vindicated an important public interest.  As such, it awarded her $2,011,844.  This figure was based on 2,398 attorney hours at a $451 blended hourly rate and a 1.85 positive multiplier.

In affirming, the Court of Appeal held the trial court had not abused its discretion in determining the fee award and rejected the Commission’s evidentiary challenges to the reconstructed attorney time records.  It noted that the evidentiary challenges go to the weight of the evidence and not to its admissibility and that the trial court had sufficient information to evaluate the reliability of the submitted records.  As to those records, some were prepared contemporaneously with the work being performed while others were reconstructed based on actual work product.  As to the reconstructed records, there was expert testimony that when records are reconstructed, they tend to understate work actually performed rather than to overstate it.