Cates v. Chiang
213 Cal. App. 4th 791
| Cal. Ct. App. | 2013Background
- Cates filed a 2003 taxpayer action against the Commission, Controller, and Attorney General alleging failure to discharge mandatory duties to collect tribes’ net-win payments to the Fund.
- The trial court granted summary judgment; this court reversed in Cates I (2007), finding disputes about audits and the net-win definition persisted.
- After remand, the Commission audited tribes and found about $12.8 million underpaid; $11.5 million had been collected.
- Cates pursued attorney fees under §1021.5 catalyst theory, claiming the suit catalyzed enforcement and collection of delinquencies.
- The trial court awarded $2,011,844 in fees (lodestar $1,087,483 and a 1.85 multiplier); on appeal, the Commission challenged entitlement and amount, and the Controller challenged causation and the fee award.
- On review, the court: (i) reversed the Controller’s entitlement order; (ii) affirmed entitlement against the Commission but remanded to strike the multiplier related to the fee-amount issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Catalyst relief against Commission | Cates demonstrates the suit forced proper enforcement of net-win | Commission argues no primary relief was obtained due to independent actions | Catalyst proven as to Commission. |
| Catalyst relief against Controller | Cates I clarified Controller duties; suit aimed at liability | No evidence shows Controller changed behavior due to suit | No catalyst found as to Controller. |
| Prelitigation settlement (Graham futility) | Notified via two letters and offers to settle | Letters were insufficient and not timely | Futility exception applies; prelitigation notice excused. |
| Attorney-fees amount (lodestar/multiplier) | Lodestar supported; multiplier appropriate for contingent public-interest suit | Problems with reconstructed hours; multiplier on fees litigation improper | Lodestar reasonable; multiplier warranted for merits; strike multiplier for fee-amount phase on remand. |
| Common fund alternative? | Consider under common fund | Not applicable here | Common fund not adopted. |
Key Cases Cited
- Maria P. v. Riles, 43 Cal.3d 1281 (1987) (causation under catalyst theory; public-interest relief requires causal link)
- Graham v. DaimlerChrysler Corp., 34 Cal.4th 553 (2004) (catalyst theory with prelitigation settlement requirement; limitless public-benefit balancing)
- Vasquez v. State of California, 45 Cal.4th 243 (2008) (prelitigation notice rule; possible futility exception clarified)
- Ketchum v. Moses, 24 Cal.4th 103 (2001) (lodestar and multiplier framework; discretionary review)
- Graciano v. Robinson Ford Sales, Inc., 144 Cal.App.4th 140 (2006) (multiplier factors in fee awards; contends discretion)
- PLCM Group, Inc. v. Drexler, 22 Cal.4th 108 (2000) (time-record reconstruction and reasonable hours)
- Hogar Dulce Hogar v. Community Development Co. of City of Escondido, 157 Cal.App.4th 1358 (2007) (causation standard; substantial factor inquiry)
- Karuk Tribe of Northern California v. California Regional Water Quality Control Bd., North Coast Region, 183 Cal.App.4th 330 (2010) (causation; influencing regulatory action)