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Mike McKee

The Recorder

01-08-2008

The stakes are high for California's nonprofit community at a state Supreme Court argument this week to determine whether parties suing as private attorneys general can recover fees for expert witnesses.

After winning a suit that forced the 3.4 million-member Automobile Club of Southern California to revamp election procedures for its board of directors, Carl Olson and Mark Seidenberg sought fees for their attorneys and expert witnesses.

Because the two men, who are members of the club, had acted as private attorneys general, Los Angeles County Superior Court Judge James Dunn awarded nearly $1.1 million for the attorneys and more than $90,000 for expert witnesses.

On Wednesday, though, Olson's and Seidenberg's lawyer will go before the California Supreme Court in a bid to get the expert witness fees reinstated after they were tossed two years ago by L.A.'s 2nd District Court of Appeal. That court said state Code of Civil Procedure §1021.5 -- also known as the private attorney general statute -- permits a plaintiff whose case results in the "enforcement of an important right affecting the public interest" to recover fees for lawyers, but not for expert witnesses.

That shocked California's nonprofit community, which has come to the aid of Olson and Seidenberg. Acting as amici curiae, 33 nonprofit agencies argued in court papers that without the ability to recover the costs of expert witnesses -- which can mount into the millions of dollars -- vital public interest cases won't be pursued.

"If such fees are not recoverable, and thus must be financed by counsel or plaintiffs," attorney Brad Seligman, of The Impact Fund in San Francisco, wrote on behalf of 31 of the agencies, "many cases would not be financially viable, or could subject counsel or the clients to great financial risk."

During Wednesday's oral argument in San Francisco, Los Angeles lawyer Thomas Bourke, who represents the plaintiffs, intends to tell the Supreme Court's seven justices that the 2nd District got it wrong.

"The very purpose and point of §1021.5," Bourke wrote in court papers, "was to make it financially feasible for ordinary people and attorneys to pursue public interest litigation without having to end up financing substantial aspects of litigation out of their own pockets if they were successful."

"The inevitable result," he added, "will be that meritorious cases that depend on expert testimony will not be brought at all, or appropriate experts will not be retained."

Bourke's opponents largely ignore such claims, arguing in their court papers that Olson and Seidenberg are reading meanings into the private attorney general statute that are not there.

"There is no question the Legislature enacted §1021.5 to encourage public interest litigation by authorizing the prevailing party's recovery of attorneys' fees," wrote senior of counsel John Sobieski and senior counsel Howard Soloway, both of Morrison & Foerster's Los Angeles office. "But it does not follow from this that the Legislature also intended to promote public interest litigation by authorizing recovery of expert fees."

Soloway will argue the Automobile Club's case when it goes before the high court. Bourke will share his time with Edith Matthai, a partner in L.A.'s Robie & Matthai who will present the amici's position.

In general, Olson and Seidenberg accused the Automobile Club of Southern California of holding elections that practically ensured the re-election of incumbents. For example, they argued, the club mailed proxy forms that allowed members to vote for the club's own nominees, but relegated voting space for other candidates to its little-read Westways magazine.

Dunn eventually ruled that the Automobile Club was using unreasonable election procedures. Among other things, he ordered the club to distribute future election materials containing statements by all candidates in both direct mail and the magazine, place future election materials on its Web site and eliminate advocacy materials from proxy forms.

On appeal, the 2nd District increased attorney fees for the plaintiffs by more than $280,000, but struck the $90,000 in expert witness fees.

In briefs filed with the Supreme Court, Bourke contends that fees for expert witnesses are supported by both the legislative history of §1021.5 and subsequent case law. He pointed to Beasley v. Wells Fargo Bank, 235 Cal.App.3d 1407, in which San Francisco's 1st District ruled in 1991 that expert witness fees can be awarded under the private attorney general statute "as long as 'they represent expenses ordinarily billed to a client and are not included in the overhead component of counsel's hourly rate.'"

"Fifteen years passed between Beasley and the [underlying] decision," Bourke wrote. "Yet the Legislature did not overrule or limit Beasley's interpretation of §1021.5."

In their high court brief, MoFo's Sobieski and Soloway argued Beasley's holding on expert witness fees wasn't considered a settled rule when the Automobile Club was sued by Olson and Seidenberg. Instead, they argued, a 1998 decision by the state Supreme Court, Davis v. KGO-TV Inc., 17 Cal.4th 436, upheld the principle that fees for experts who aren't court appointed can't be recovered, except when expressly authorized by law. "Neither California case law nor §1021.5," Sobieski and Soloway wrote, "authorizes the recovery of fees for experts not appointed by the court."

All of the amici lined up on the side of Olson and Seidenberg. Among them were the American Civil Liberties Union, Sierra Club, Legal Aid Association of California, Consumer Attorneys of California and National Association of Consumer Advocates.

In an interview last week, Bourke said the amici's interest "demonstrates there's a real-life consequence to the judges' ruling."

"It's not just a matter of abstract logic," he said.

Sobieski and Soloway declined to comment beyond their court briefs.

The case is Olson v. Automobile Club of Southern California, S143999.