In re Tobacco Cases I
124 Cal. Rptr. 3d 352
Cal. Ct. App.2011Background
- California enforcement action to enforce the Consent Decree incorporated from the MSA; court found cartoon ban violation by Reynolds in Camel Farm campaign.
- Consent Decree contains a unilateral attorney fees clause requiring Reynolds to pay state’s costs and fees incurred in such proceedings.
- Trial court awarded the People attorney fees but on grounds contested; ruled section 1717 inapplicable and/or party prevailing based on a 'significant issue'.
- Court of Appeal previously affirmed some declaratory relief but left fees issue unresolved; this appeal seeks reversal/remand for correct standard.
- This opinion holds section 1717 applies to the Consent Decree; prevailing party determination and market-rate fees to be reconsidered on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §1717 apply to the Consent Decree action? | People: §1717 not applicable; action not on contract. | Reynolds: §1717 applies; action is on a contract or consent decree. | Yes; §1717 applies to the Consent Decree. |
| If §1717 applies, who prevails on the contract? | People prevailed on a significant issue of cartoon ban in Reynolds’ own ads. | Reynolds: relief was mixed; People did not recover greater relief overall. | Remanded to determine prevailing party under 'greater relief' standard. |
| Should prevailing market rates be awarded upon remand? | Prevailing market rates can be awarded if §1717 applies and People prevail. | Fees should be limited to fees actually incurred; in-house rates governed by the decree. | If People prevail, prevailing market rates may be awarded on remand. |
Key Cases Cited
- Reynolds Metals Co. v. Alperson, 25 Cal.3d 124 (Cal. 1979) (limits on fee recovery under contract-like provisions)
- PLC MS Group, Inc. v. Drexler, 22 Cal.4th 1084 (Cal. 2000) (prevailing market rates; lodestar approach)
- Hsu v. Abbara, 9 Cal.4th 863 (Cal. 1995) (test for prevailing party and equitable considerations)
- Pardee Construction Co. v. City of Camarillo, 37 Cal.3d 465 (Cal. 1984) (consent decrees interpreted as contracts for certain purposes)
- Lolley v. Campbell, 28 Cal.4th 367 (Cal. 2002) (fees awarded for services provided at no personal expense)
- Share v. Casiano Bel-Air Homeowners Ass'n, 215 Cal.App.3d 515 (Cal. App. 1989) (fee clause applicable in consent judgment context)
- Graciano v. Robinson Ford Sales, Inc., 144 Cal.App.4th 140 (Cal. App. 2006) (significant issues and prevailing party concepts in fees)
- Texas Commerce Bank v. Garamendi, 28 Cal.App.4th 1234 (Cal. App. 1994) (contract-like fee-shifting and prevailing party notions)
- In re Tobacco Cases I, 186 Cal.App.4th 42 (Cal. App. 2010) (companion decision on enforcement of MSA/Consent Decree)
- Big Bear Municipal Water Dist. v. Bear Valley Mutual Water Co., 207 Cal.App.3d 363 (Cal. App. 1989) (contextual rejection of related judicial notices)