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Porfirio Serrano et al v. Stefan Merli Plastering Co.

October 31, 2011


Court: Superior County: Los Angeles Judge: Aurelio Munoz Super. Ct. No. BC324031 Ct.App. 2/3 B215837

The opinion of the court was delivered by: Corrigan, J.

Los Angeles County

Code of Civil Procedure section 1021.5 authorizes an award of attorney fees to a "private attorney general," that is, a party who secures a significant benefit for many people by enforcing an important right affecting the public interest.*fn1 In Adoption of Joshua S. (2008) 42 Cal.4th 945 (Joshua S.), we decided that a section 1021.5 fee award may not be imposed on a litigant who did nothing to adversely affect the public interest, but simply lost an important appellate case in the course of pursuing his or her private rights. (Joshua S., at p. 958.)

In this case, plaintiffs objected to paying an extra fee for an expedited transcript of a deposition noticed by defendant. They won an appeal establishing that trial courts have the authority to determine the reasonableness of fees charged by deposition reporters to nonnoticing parties. On remand, the trial court found that the fee charged to plaintiffs was unreasonable, but denied their motion for an award of attorney fees under section 1021.5. Relying on Joshua S., the court concluded that plaintiffs had acted in their own interest and only incidentally conferred a benefit on other litigants. The Court of Appeal, in a split decision, affirmed. We granted plaintiffs' petition for review, in order to clarify the scope of our holding in Joshua S.

We conclude that Joshua S. has no application here. Deposition reporters are officers of the court, regulated by statute, who perform a public service of considerable importance to litigants and members of the public. The reporting service here did not merely seek to vindicate its private rights. It defended its institutional interest in controlling the fees it charges, and sought to shield itself from judicial review of its conduct as a ministerial officer of the court. Moreover, it was found to have charged plaintiffs an unreasonable fee. The courts below erred by concluding that the service did nothing adverse to the public interest, and that plaintiffs' appeal did not involve an important right affecting the public interest.


In the underlying personal injury action, which eventually settled, defendant took the deposition of a plaintiffs' expert and requested an expedited transcript. The reporting service, Coast Court Reporters (Coast), asked plaintiffs' counsel whether he too wanted an expedited transcript. He did, and Coast sent counsel a bill including a fee for expediting the copy.*fn2 Counsel objected to the additional charge. Coast refused to expedite the transcript without payment of the fee. Counsel asked the trial court to require Coast to provide the transcript without the extra cost. Coast and plaintiffs' counsel agreed that the court's ruling would determine the validity and reasonableness of its fee, and would govern the fees for other expedited transcripts in the action. Coast delivered the transcript to plaintiffs, deferring payment until the court ruled.

The trial court found that Coast's practice of charging the nonnoticing party a fee for expedited transcripts was "unconscionable." However, the court believed it had no authority to determine how much a deposition reporter may charge for transcripts. It ordered plaintiffs to pay the full amount charged by Coast, but invited them to seek appellate review. Plaintiffs did so, and prevailed. (Serrano v. Stefan Merli Plastering Co., Inc. (2008) 162 Cal.App.4th 1014, 1037 (Stefan I).)

In Stefan I, the Court of Appeal observed that depositions must be conducted under the supervision of an officer qualified to administer an oath. (§ 2025.320.) While the officer and the stenographer who records the testimony need not be the same person, they usually are, and that practice was followed here.*fn3 (Stefan I, supra, 162 Cal.App.4th at p. 1033.) The court further observed that deposition officers are ministerial officers of the court (Burns v. Superior Court (1903) 140 Cal. 1, 9), who are subject to the court's statutory and inherent authority over judicial proceedings (§ 128, subd. (a)(5); Walker v. Superior Court (1991) 53 Cal.3d 257, 266-267).*fn4 (Stefan I, supra, 162 Cal.App.4th at p. 1035.)

Section 2025.510, subdivision (c) allows a nonnoticing party to obtain a copy of a deposition transcript at its own expense. Stefan I reasoned that the trial court "obviously should be able to enforce this statutory right by ordering the deposition reporter to provide a copy of the transcript . . . on condition of the party's payment of the 'expense' of the copy." (Stefan I, supra, 162 Cal.App.4th at p. 1035, citing § 128.5, subd. (a)(5).) Coast argued that while the court could order a reporter to provide a copy of a transcript, it could not regulate the amount of the fee charged by the reporter. The Court of Appeal disagreed, pointing out that the nonnoticing party has no contractual relationship with the reporter, who is selected by the noticing party. Thus, the nonnoticing party is in no position to bargain for lower rates. Indeed the reporter may have an incentive to offer lower rates to the noticing party while shifting some of its costs of service to the nonnoticing party. (Stefan I, supra, 162 Cal.App.4th at pp. 1035-1036.)

"In light of the importance of deposition testimony in a pending action and the nonnoticing party's lack of bargaining power, a trial court must be cautious not to lend assistance to overreaching by the deposition reporter. For a deposition reporter to refuse to provide a copy of a transcript to a nonnoticing party in a pending action unless the party agrees to pay an unreasonable fee would be grossly unfair." (Stefan I, supra, 162 Cal.App.4th at p. 1036.) Thus, "the only monetary condition that the court may properly place upon the nonnoticing party's right to receive a copy of the deposition transcript would be payment of a reasonable fee." (Ibid.) The court found support for this conclusion in section 2025.570, subdivision (a), which applies to nonparties, and specifies that the fee charged to "any person requesting a copy" of a deposition transcript must be "reasonable."*fn5 It would be "anomalous indeed," said the court, "for the Legislature to require a deposition officer to provide a copy of a deposition transcript to a nonparty for a reasonable fee while denying the same protection for a litigating party." (Stefan I, at pp. 1036-1037.)

Stefan I distinguished and disagreed with Urban Pacific Equities Corp. v. Superior Court (1997) 59 Cal.App.4th 688 (Urban Pacific), which had led the trial court to believe it had no authority to set Coast's fee. The Urban Pacific court rejected a nonnoticing party's argument that it was entitled to obtain a copy of a deposition transcript by serving a "business records subpoena." (Urban Pacific, supra, 59 Cal.App.4th at p. 693.) By way of introduction, however, the court observed that "there is no statute regulating the fees charged by private reporting firms, and deposition reporters are free to charge all the market will bear." (Id. at pp. 691-692.) The Stefan I court was not persuaded by this dictum. It noted that a nonnoticing party has no market interaction with the deposition reporter, and "absent timely judicial intervention, could be placed at the mercy of the reporter's arbitrary pricing policy." (Stefan I, supra, 162 Cal.App.4th at p. 1037, fn. 12.)

The Urban Pacific court had also commented that former section 2025.5, the predecessor of section 2025.570, offered no solution to the problem of excessive deposition charges. The court evidently read the statutory reference to "a reasonable charge set by the deposition officer" as granting the reporter free rein, even though it viewed the charges in the case before it as "obviously excessive." (Urban Pacific, supra, 59 Cal.App.4th at p. 692; see fn. 5, ante.) It stated, "Unless [the reporter] concedes that its charges are not 'reasonable,' we do not see how this new statute[*fn6 ] would affect the problem faced by [the appellant], particularly since the new statute appears to be for the benefit of nonparties, not parties." (Urban Pacific, at p. 692, fn. 7.) The Stefan I court took exception to this view. "A trial court's failure to intervene to prevent such abuse of a nonnoticing party would amount to official toleration of such conduct. To the extent that Urban Pacific suggests that such a result is required by judicial impotency in such circumstances, we decline to follow it." (Stefan I, supra, 162 Cal.App.4th at p. 1037, fn. 12.)

Stefan I concluded that the trial court in the pending action is in the best position to resolve deposition fee disputes, in a manner consistent with the procedures routinely followed to determine the costs recoverable by a prevailing party. (Stefan I, supra, 162 Cal.App.4th at pp. 1038-1039.) Because the trial court had failed to exercise its discretion as to whether Coast's charges were reasonable in this case, the Court of Appeal remanded with directions to make that determination and order a refund of any amounts found to be excessive. (Id. at pp. 1039-1040.) On remand, the trial court ruled that "under the circumstances presented," the entire charge for expediting the transcript was unreasonable. It ordered that amount refunded to plaintiffs, with interest.

Plaintiffs then filed a motion for attorney fees under section 1021.5. They asked for an award of up to $50,000, though counsel asserted that this would leave him with many hours of uncompensated time. Plaintiffs claimed they met all the statutory conditions for a fee award: They had successfully enforced an important right affecting the public interest, conferring a significant benefit on a large class of persons, and the necessity and financial burden of private enforcement made an award appropriate.*fn7 Coast opposed the motion, contending that plaintiffs had sought not to enforce a public right but merely to avoid paying a fee for deposition transcripts. Coast disputed plaintiffs' claim that they had vindicated an important public right, and relied on Joshua S., supra, 42 Cal.4th 945, for the proposition that a party who has done nothing to adversely affect the public interest other than being on the losing side of an appeal should not be subjected to a fee award under section 1021.5.

The trial court denied the fee motion, explaining: " '[S]section 1021.5 does not authorize an award of attorney fees against an individual who has done nothing to adversely affect the rights of the public or a substantial class of people other than raise an issue in the course of private litigation that could establish legal precedent adverse to a portion of the public. . . .' ([Joshua S., supra,] 42 Cal.4th 945, 949.) Here that is exactly what occurred. Moving party was not trying to vindicate the public's interest. Rather, he was trying to protect his own interest and in so doing, by virtue of a published opinion, he conferred a benefit to litigants."

The Court of Appeal affirmed over the dissent of Justice Croskey, the author of the Stefan I opinion. The majority held that plaintiffs had failed to satisfy the first element of section 1021.5, because their action did not result in the enforcement of an important right affecting the public interest. The majority deemed Joshua S. on point and controlling. In Joshua S., former domestic partners had litigated the validity of a "second parent" adoption and in so doing established the lawfulness of this form of adoption.*fn8 (Joshua S., supra, 42 Cal.4th at p. 952.) Here, the Court of Appeal majority decided that Coast occupied a position similar to that of the birth mother in Joshua S., who sought to invalidate the adoption. It viewed the litigation in Stefan I as a "private business disagreement" between plaintiffs and Coast, which happened to involve an issue that was resolved in a published opinion.

The majority concluded that plaintiffs' action did not qualify as public interest litigation. "Coast was not purporting to represent the public and its conduct addressed in our opinion had not been impairing the statutory or constitutional rights of the public or even a large or significant class of people." It emphasized that Coast had "waived its fees and delivered all of the deposition transcripts to plaintiffs pending the trial court's determination of the reasonableness of the expedited-service fee." The majority viewed the Stefan I opinion as a reiteration of existing statutory law governing deposition fees, and a correction of "a garden-variety error by a trial court that had mistakenly believed it lacked the authority to limit court reporter fees."

The dissenting opinion would have reversed and remanded for the trial court to consider all the elements required for an award of fees under section 1021.5. In the dissent's view, Coast could not be compared to the losing parent in Joshua S. It had engaged in conduct against the public interest and violated its statutory duty as a deposition officer by refusing to deliver a transcript without payment of an unreasonable fee.


On appeal from an award of attorney fees under section 1021.5, " 'the normal standard of review is abuse of discretion. However, de novo review of such a trial court order is warranted where the determination of whether the criteria for an award of attorney fees and costs in this context have been satisfied amounts to statutory construction and a question of law.' " (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175; accord, Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1213.) Resolution of this case turns primarily on interpretations of section 1021.5 and the Joshua S. and Stefan I opinions, which present questions of law.

Section 1021.5 authorizes an award of fees when (1) the action "has resulted in the enforcement of an important right affecting the public interest," (2) "a significant benefit, whether pecuniary or non-pecuniary, has been conferred on the general public or a large class of persons," and (3) "the necessity and financial burden of private enforcement . . . are such as to make the award appropriate." (§ 1021.5; see Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 935 (Woodland Hills).) In Joshua S., we carved out a limited exception to these qualifications: "[E]ven when an important right has been vindicated and a substantial public benefit conferred, and when a plaintiff's litigation has transcended her personal interest,[*fn9 ]. . . section 1021.5 was not intended to impose fees on an individual seeking a judgment that ...

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