Opinion
NOT TO BE PUBLISHED
San Francisco City & County Super. Ct. No. CGC-09488156.
Reardon, J.
A federal court ruled that three employees of the California Public Employees’ Retirement System (CalPERS) who were sued in their individual capacities were entitled to qualified immunity from liability for acts alleged to have been committed in the course of their employment. In this later-filed state action, the trial court dismissed the same causes of action alleged against these three CalPERS employees—respondents Kenneth Marzion, Lori McGartland and Sharen B. Scott—each of whom was sued in his or her individual capacity. The trial court awarded these individuals more than $36,000 in attorney fees, concluding that the causes of action alleged against them had already been determined in their favor in the federal action.
Appellant California County Superintendents Educational Services Association (CCSESA) and others challenge the trial court’s award ordering them to pay attorney fees to these individuals. They contend that (1) the federal court judgment on qualified immunity should not have been given res judicata effect and (2) its state action against the individual defendants was not frivolous or unreasonable. The individual defendants seek attorney fees on appeal. We affirm the trial court’s attorney fees order; find that Marzion, McGartland and Scott are entitled to attorney fees on appeal; and remand the matter to the trial court for a determination of reasonable attorney fees on appeal.
The plaintiffs and appellants are CCSESA—a statewide association of county school superintendents—various county superintendents of schools, and individuals who served as statewide staff for CCSESA. For convenience, we refer to all plaintiffs and appellants as CCSESA.
I. FACTS
A. Federal Action
In October 2008, CCSESA filed an action in federal court challenging the constitutionality of CalPERS’s notice and appeal procedures. CCSESA sought damages under the 14th Amendment and title 42 United States Code section 1983, as well as declaratory and injunctive relief, and attorney fees in the federal action. The action was filed against three CalPERS employees. Respondent Kenneth Marzion was Interim CalPERS Chief Executive Officer. Respondent Lori McGartland was Chief of CalPERS’s Employer Services Division. Respondent Sharen B. Scott was a Manager of the Employer Reporting Section of CalPERS’s Employer Services Division. Marzion was sued in both an official and individual capacity; McGartland and Scott were sued only as individuals. (See California County Superintendents of Schools Educational Assn. v. Marzion (N.D. Cal., Mar. 2, 2009, No. C08-04806 CW) 2009 WL 513742, *1 (CCSESA).)
In March 2009, the district court dismissed the federal action, over CCSESA’s opposition. The court concluded that it should not consider the case, citing federal abstention and ripeness grounds. It also held that the three individual defendants had qualified immunity from liability. It denied CCSESA’s request to conduct additional discovery on this issue, because it concluded that no new factual allegations could assist CCSESA in proving its legal claim. The federal court dismissed the two causes of action alleged against Marzion, McGartland and Scott in their individual capacities, with prejudice, finding that to allow CCSESA leave to amend would be futile. (See CCSESA, supra, 2009 WL 513742, *3-8.) CCSESA did not appeal this judgment.
B. State Action
In May 2009—two months after the federal action was dismissed—CCSESA brought a declaratory relief action challenging CalPERS notice and administrative appeal regulations. It named as defendants CalPERS’s Board of Administration; Marzion, who was sued individually and in his official capacity; and McGartland and Scott, who were again sued as individuals. The lawsuit alleged three causes of action. The declaratory relief action alleged against CalPERS and Marzion in his official capacity sought a determination that the applicable CalPERS regulations were constitutionally infirm. The complaint also alleged causes of action for violation of due process and of the employees’ federal civil rights against Marzion, McGartland and Scott in their individual capacities. The individual claims were the same as those asserted against these individual defendants in the federal action. The state complaint prayed for compensatory damages and attorney fees from all defendants and sought punitive damages from Marzion, McGartland and Scott.
In July 2009, CalPERS filed a demurrer challenging the complaint. In October 2009, the trial court overruled the demurrer on the declaratory judgment cause of action. However, it sustained the demurrer without leave to amend on the other two causes of action on res judicata grounds. The due process and federal civil rights causes of action were dismissed with prejudice. Judgment was entered in favor of Marzion in his individual capacity and in favor of McGartland and Scott entirely in October 2009.
It appears that CCSESA filed an appeal from this judgment, but it abandoned its appeal in January 2010. (See CCSESA v. CalPERS, Case No. A127363.) We upheld a July 2010 judgment dismissing the remaining declaratory relief cause of action in an unpublished opinion. (CCSESA v. Board of Administration of CalPERS (May 31, 2011, A129526) [nonpub. opn.].)
In December 2009, Marzion, McGartland and Scott moved for $45,773 in attorney fees, including more than $15,000 that was attributable to the motion itself. CCSESA opposed the motion. The trial court granted this motion in January 2010, observing that the claims filed in federal court against the individual defendants were dismissed with prejudice before the state lawsuit was filed. It concluded that these federal claims were barred by the doctrine of res judicata. (See 42 U.S.C. § 1983; CCSESA, supra, 2009 WL 513742, *7-8.) The trial court awarded the individual defendants $36,051 in attorney fees. It disallowed fees attributable to two aspects of the case and part of the fee claimed for the fee motion itself.
II. ATTORNEY FEES
A. Trial Court Award
1. Standard of Review
On appeal, CCSESA contends that the trial court erred in awarding attorney fees to the individual defendants Marzion, McGartland and Scott. Federal law gives a trial court discretion to award reasonable attorney fees to the prevailing party in a civil rights action. (42 U.S.C. § 1988(b).) A defendant in such an action may recover attorney fees from a plaintiff only if the underlying action was frivolous, unreasonable, or without foundation. The action need not have been brought in bad faith, but it must be meritless—not simply because the plaintiff might ultimately lose the case, but because it was groundless. (Hughes v. Rowe (1980) 449 U.S. 5, 14; Christiansburg Garment Co. v. EEOC (1978) 434 U.S. 412, 421-422; Karam v. City of Burbank (9th Cir. 2003) 352 F.3d 1188, 1195.) A case may be deemed frivolous only when the result is obvious. (Karam v. City of Burbank, supra, at p. 1195; Davidson v. Culver City (9th Cir. 2005) 159 Fed.Appx. 756, 759.)
On appeal, the parties do not appear to dispute the amount of the fee award, only the underlying basis for any award.
The parties disagree about the standard of review to be applied on appeal. Having considered the cases cited by both parties, we find that those cited by CCSESA state a more general rule, while those put forth by the individual defendants cite the specific principles applicable to an attorney fees order based on section 1988 of title 42 of the United States Code. Thus, we conclude that we must review the trial court’s decision to award attorney fees for an abuse of its discretion. (See Christiansburg Garment Co. v. EEOC, supra, 434 U.S. at p. 421; Robbins v. Regents of University of California (2005) 127 Cal.App.4th 653, 665; see also Franceschi v. Schwartz (9th Cir. 1995) 57 F.3d 828, 830.)
2. Doctrine of Res Judicata
a. Legal Principles
CCSESA contends that the trial court erred in several respects when it found that res judicata applied to bar its state court causes of action against Marzion, McGartland and Scott individually on qualified immunity grounds. The doctrine of res judicata precludes relitigation of certain matters that have been resolved in a prior proceeding. Its purpose is to preserve the integrity of the judicial system, promote judicial economy, and protect persons from harassment by vexatious litigants. It applies to preclude relitigation of a cause of action previously litigated if three elements are established. The claim raised in the present action must be identical to that litigated in the earlier proceeding; the prior proceeding must have resulted in a final judgment on the merits; and the party against whom the doctrine is being asserted must have been a party to the earlier proceeding. The purpose of the doctrine of res judicata is to prevent relitigation of issues that have already been finally resolved. (Brinton v. Bankers Pension Services, Inc. (1999) 76 Cal.App.4th 550, 556; see Modesto City Schools v. Education Audits Appeal Panel (2004) 123 Cal.App.4th 1365, 1379.)
b. Ruling on Merits
CCSESA contends that the federal court ruling was not on the merits, because the ruling was grounded in abstention, ripeness, and qualified immunity. The application of the doctrine of res judicata requires a final judgment on the merits. (Victa v. Merle Norman Cosmetics, Inc. (1993) 19 Cal.App.4th 454, 460-461.) Our reading of the federal court decision satisfies us that the qualified immunity aspect of that decision was a ruling on the merits of the application of qualified immunity within the meaning of the doctrine of res judicata. (See CCSESA, supra, 2009 WL 513742, *7-8.)
c. Finality of Ruling
Res judicata does not bar an action unless the prior action sought to be applied is now final. When a judgment is still open to attack by appeal, it is not yet final for purposes of the doctrine of res judicata. (National Union Fire Ins. Co. v. Stites Prof. Law Corp. (1991) 235 Cal.App.3d 1718, 1726; see 7 Witkin, Cal. Procedure (5th ed. 2008) Judgment, § 364, pp. 986-988.) The federal decision against CCSESA on the issue of qualified immunity issued in March 2009 and was not appealed. Thus, the decision is final for res judicata purposes.
d. Need to Name Individual Defendants
CCSESA contends that it must name the individual defendants in order to state a title 42 United States Code section 1983 cause of action. Accepting that premise does not explain why CCSESA sued these defendants in their individual capacities after a federal court ruled that they were entitled to qualified immunity from any liability under that federal statute.
e. New Evidence Relevant to Qualified Immunity
CCSESA argues that because of new facts that were not known to the federal court, the application of qualified immunity was still at issue in the state action. We determine whether the case was groundless based on circumstances known to CCSESA at the time that it filed its state action complaint. (See Karam v. City of Burbank, supra, 352 F.3d at p. 1196.) No evidence arose during the two-month period between the federal decision and the filing of the state action that undermines the federal court’s judgment that Marzion, McGartland and Scott enjoyed a qualified immunity on the two federal causes of action.
This objection fails for other reasons, as well. The federal court specifically denied a request to conduct additional discovery on the issue of the liability of the individual defendants, concluding that no new facts could uncover an actionable claim against Marzion, McGartland or Scott. (See CCSESA, supra, 2009 WL 513742, *8.) Facts decisive to the issue of whether a case is groundless may not be revealed until the discovery stage. (Christiansburg Garment Co. v. EEOC, supra, 434 U.S. at p. 422.) In the case before us, the individual defendants were found by a federal court to be entitled to qualified immunity from liability before the state action was filed. (See CCSESA, supra, 2009 WL 513742, *1, 7-8.) CCSESA chose not to appeal that judgment. No additional facts that may have come to light after the federal court judgment against CCSESA would prompt a state court judge to alter the conclusion of qualified immunity rendered by a federal court judge in an action grounded in federal law. The record supports the trial court’s exercise of discretion granting attorney fees to Marzion, McGartland and Scott because CCSESA continued to litigate the state claims against them individually after it should have been obvious that the federal judgment of qualified immunity rendered those claims frivolous, unreasonable, or groundless. (See, e.g., Jones & Matson v. Hall (2007) 155 Cal.App.4th 1596, 1610-1611; see also 42 U.S.C. § 1988(b).)
f. Frivolous, Unreasonable, or Groundless
CCSESA contends that its filing of the state action against the individual defendants was not frivolous, unreasonable, or groundless. As such, it reasons that the trial court erred in awarding attorney fees to them. It alleged the same claims against Marzion, McGartland and Scott in the federal and state actions. Once the federal judgment barring the federal claims on qualified immunity grounds was final, the doctrine of res judicata applied to bar the same claims asserted against these defendants in the state action. Because the result of these state claims was obvious before the action was filed, the trial court acted within its discretion to award attorney fees to those defendants. (See, e.g., Davidson v. Culver City, supra, 159 Fed.Appx. at p. 759.) To the extent that it asserted claims against these defendants in their individual capacities, the state action was groundless. (See Hughes v. Rowe, supra, 449 U.S. at p. 14; Christiansburg Garment Co. v. EEOC, supra, 434 U.S. at pp. 421-422.) The trial court properly concluded that res judicata applied to bar these individual causes of action.
3. Exception to Res Judicata
CCSESA asserts that their strategy of asserting public interest and injustice exceptions to the res judicata doctrine in lieu of appealing the federal judgment was reasonable, such that an award of attorney fees was improper in this state action. When the underlying issue is a question of law, a prior determination is not necessarily determinative for res judicata purposes if an injustice would result or if the public interest requires that relitigation not be foreclosed. (See Kopp v. Fair Pol. Practices Com. (1995) 11 Cal.4th 607, 620-622; City of Sacramento v. State of California (1990) 50 Cal.3d 51, 64; Jenkins v. County of Riverside (2006) 138 Cal.App.4th 593, 621-622; Modesto City Schools v. Education Audits Appeal Panel, supra, 123 Cal.App.4th at p. 1379 [collateral estoppel cases].) Once we conclude that the doctrine of res judicata applies, we consider whether the public policies underlying that doctrine are furthered by its application in a particular case. Those policies include preservation of the integrity of the judicial system, the promotion of judicial economy, and the protection of litigants from vexatious litigation. (See Lucido v. Superior Court (1990) 51 Cal.3d 335, 342-343; American Continental Ins. Co. v. American Casualty Co. (2001) 86 Cal.App.4th 929, 945 [collateral estoppel cases].)
In Jenkins, a California appellate court declined to apply the doctrine of collateral estoppel to a federal decision, concluding that the federal court had misconstrued California law. (Jenkins v. County of Riverside, supra, 138 Cal.App.4th at pp. 621-622.) This was appropriate, as California courts are the principal expositors of our state law. (Moore v. Sims (1979) 442 U.S. 415, 429; Kopp v. Fair Pol. Practices Com., supra, 11 Cal.4th at p. 620.) Thus, Jenkins is factually distinguishable from the case before us, in which a federal court found that a statutory cause of action grounded in federal law was barred. Under principles of comity, California courts are understandably reluctant to dispute a federal court ruling on the proper interpretation of federal law.
CCSESA argues that the overall purpose of the lawsuit—to establish that CalPERS’s regulations are unconstitutional—warrants the application of a public interest exception to res judicata. It asserts that the individual defendants had a legal obligation to begin the administrative appeal process in a more timely manner. We find this focus to be misplaced. Instead, the proper inquiry is whether subjecting individual defendants to further litigation in the face of a final determination that they were entitled to qualified immunity would serve the public interest.
This public interest exception is extremely narrow and applies only in exceptional circumstances. In order to warrant relitigation, there must be a clear and convincing need for a new determination of the issue because of the potential adverse impact of the prior determination on the interests of the public or on those who were not parties to the prior action. (Modesto City Schools v. Education Audits Appeal Panel, supra, 123 Cal.App.4that p. 1379.) We are satisfied that this is not such an exceptional case. (See, e.g., Littoral Development Co. v. San Francisco Bay Conservation etc. Com. (1995) 33 Cal.App.4th 211, 217.)
The injustice exception applies when application of the doctrine of res judicata would be unjust to one of the parties. (See Louis Stores, Inc. v. Department of Alcoholic Beverage Control (1962) 57 Cal.2d 749, 757 [collateral estoppel case].) In the case before us, it would be unjust not to apply res judicata to preclude the harassment posed by vexatious litigation against individual defendants who have been finally determined to be entitled to qualified immunity from any individual liability.
4. Adequacy of Findings
CCSESA also makes an oblique attack on the trial court’s findings, asserting that they are inadequate to support its conclusion that CCSESA’s causes of action against the individual defendants were frivolous, unreasonable, or without foundation. It cites the trial court’s statement at a hearing on the motion for attorney fees that CCSESA’s act of alleging the claims against the individual defendants again was not “a very good idea” as insufficient. CCSESA’s claim of error ignores other evidence in support of the trial court’s ruling. In its order granting attorney fees, the trial court specifically found that the individual defendants had prevailed on CCSESA’s federal civil rights claim when the underlying claims were dismissed with prejudice in the federal action. Concluding that the state claims were barred by the doctrine of res judicata, the trial court found those claims to be meritless and without foundation.
The purpose of trial court findings is to inform an appellate court of the reasoning underlying a ruling if it is later appealed. As we have no difficulty determining why the trial court ruled as it did, we reject this claim of error.
5. Summation
The causes of action alleged against Marzion, McGartland and Scott in their individual capacities were barred by the doctrine of res judicata before the state action was filed. No exceptions persuade us that application of that doctrine would be improper. Thus, we conclude that the trial court acted within its discretion when awarding those individual defendants attorney fees from CCSESA.
B. Fees on Appeal
Marzion, McGartland and Scott also seek an award of attorney fees on appeal. Federal law gives a court discretion to award attorney fees to the prevailing party. (42 U.S.C. § 1988(b).) Statutory authorization for the recovery of attorney fees incurred at trial necessarily includes attorney fees incurred on appeal unless the statute specifically provides otherwise. (Imperial Bank v. Pim Electric, Inc. (1995) 33 Cal.App.4th 540, 557.) We exercise our discretion to find that Marzion, McGartland and Scott are entitled to attorney fees for the time spent defending the attorney fees award on appeal. (See Vo v. Las Virgenes Municipal Water Dist. (2000) 79 Cal.App.4th 440, 448.)
Although we have the power to appraise and fix attorney fees on appeal, we deem it better practice to remand the cause to the trial court to determine the reasonable amount of such fees. (Milman v. Shukhat (1994) 22 Cal.App.4th 538, 546.) Thus, we remand this matter to the trial court to determine reasonable attorney fees on appeal.
III. REMITTITUR
The trial court’s attorney fee order is affirmed. Marzion, McGartland and Scott are entitled to an award of attorney fees on appeal. This matter is remanded to the trial court to determine a reasonable attorney fee on appeal.
We concur: Ruvolo, P.J., Rivera, J.