The California First Court of Appeal has struck down a Superior Court judge’s ruling to drastically reduce attorneys’ fees in a Proposition 65 settlement.
The appellate court ruled that San Francisco Superior Court Judge Ernest Goldsmith abused his discretion when he slashed attorney fees by more than half the amount agreed to by both parties to a proposed consent judgment. Goldsmith had taken the matter under submission prior to issuing his order.
The appellate panel explained that Goldsmith’s action exceeded the court’s authority.
“While the court has the authority to refuse to issue the requested consent judgment, what the court could not do in considering approval of a settlement under Code of Civil Procedure section 664.6 was to add to or modify an express term of the settlement. As pointed out by our [California] Supreme Court in California State Auto. Assn. Inter-Ins. Bureau v. Superior Court (1990) 50 Cal.3d 658 (CSAA), under section 664.6, ‘Although a court may not add to or make a new stipulation without mutual consent of the parties, it may reject a stipulation that is contrary to public policy, or one that incorporates an erroneous rule of law,”’ wrote Presiding Justice Ruvolo.
Judge Goldsmith’s ruling came in a Proposition 65 enforcement action filed in March 2013 by citizen enforcer Whitney Leeman, PhD. Leeman’s complaint alleged that flavoring and spice products sold by Adams Extract & Spice LLC expose consumers to the chemical 4-Methylimidazole (4-MEI).
Goldsmith reduced the attorneys’ fees and costs of $72,500 in the proposed consent judgment to $35,839.67.
Shortly after Judge Goldsmith issued his order in April 2014 both parties filed motions to reinstate the agreed costs and fees that Goldsmith had reduced. However, the court refused to modify its earlier reduction in attorney fees and costs. Judge Goldsmith provided no explanation for his refusal to reverse the court’s fee reduction.
Leman then appealed Judge Goldsmith’s ruling. Adams did not file a respondent’s brief in the matter.
The appellate panel concluded that “while the trial court could have rejected the settlement agreement as a whole, the court was not permitted to modify the existing settlement agreement without the mutual consent of the parties.”
The court reversed the trial court’s judgment and remanded the matter to the trial court with instructions either to approve or reject the proposed settlement and consent judgment.
The appellate court noted that “if upon remand the trial court decides not to approve the settlement because it considers the fee provision to be unreasonable, then the trial court is strongly encouraged to state its reasons for that conclusion.”
The case cited by this article is: Leeman v. Adams Extract & Spice LLC (San Francisco Sup. Ct. Case No. CGC-13-529493).