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July 14, 2015

Golba v. Dick’s Sporting Goods, Inc. (2015) 238 Cal.App.4th 1251

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The Fourth District denies a class action attorney fee award to an out-of-state attorney who was not admitted pro hac vice.

Leslie Golba was the class representative in a case against Dick’s Sporting Goods, Inc. based on Dick’s practice of requesting personal information from consumers during credit card transactions. The settlement provided class members with discount coupons for merchandise, and included Dick’s agreement not to oppose Class Counsel’s application for attorneys’ fees and costs.

Out-of-state attorney Joseph J. Siprut was lead attorney. His California-admitted co-counsel applied for Siprut’s pro hac vice admittance, but did not send proper payment and notice to the California State Bar.  No order was issued on the pro hac vice application.  Siprut, unaware the order was not granted, expended hundreds of hours prosecuting the case.  Siprut reapplied when the case settled, but this second application was denied by the court based on the numerous applications he had made during the past year. 

Ultimately only two customers out of a potential class of 232,000 applied for the coupon. At the hearing for approval of fees the court expressed skepticism that the fee award was justified by the result.  The court noted that most of the attorney fees were incurred by two out-of-state attorneys not admitted pro hac vice, and concluded there was no authority to award fees to out-of-state counsel.  Ultimately, the court awarded about five percent of the requested fees, and only for work performed by attorneys admitted to practice in California.

The Court of Appeal noted that admission to practice law in California is governed by California law. Compensation for services as an attorney requires State Bar membership.

To “practice law” in California does not require physical presence in the state when legal services are rendered. It entails sufficient contact with a California client to render the nature of the legal service a clear legal representation.  Fortuitous or attenuated contacts do not constitute the practice of law “in California.”  The question is whether the unlicensed lawyer engaged in sufficient activities in the state, or created a continuing relationship with the California client, that included legal duties and obligations.

Siprut and his associate engaged in the practice of law in California. The complaint alleged violations of California law; the Plaintiff and all of the putative class members were California residents; Siprut was lead counsel; Siprut, not Plaintiff, retained local California counsel; Siprut appeared on all the pleadings and court-filed documents; Siprut’s associate appeared in court telephonically; the settlement agreement identified Siprut as counsel; and Siprut submitted declarations about his many hours of work on the case.

Neither Siprut nor his associate was a member of the California State Bar, and neither had been admitted pro hac vice. Their services were not compensable, and the attorney fees provision of the settlement agreement was illegal as to their fees.

It was not error to deny Siprut pro hac vice admission nunc pro tunc to the first application.  The power to issue an order nunc pro tunc is to correct clerical, not judicial error.  A judge cannot change an erroneous final order if the order made was the one intended.  The function of a nunc pro tunc order is to correct the record of the judgment, not to alter the judgment rendered.  The inquiry at a hearing of a motion for a nunc pro tunc order is what order was made at the time by the trial judge?

The first pro hac vice application was properly denied and became final.  The second pro hac vice application did not request admission nunc pro tunc, and was properly denied based on the number of applications Siprut had submitted.  That order became final, without mistake or clerical error.  A nunc pro tunc order was unnecessary to correct a clerical error or mistake, to make the form of the order coincide with its substance, or to express the trial court’s true intention.

Although Plaintiff had a properly licensed California attorney on the pleadings, this is unrelated to compensation for services. The California attorneys did not work for Siprut and did little work on the case.  Although it is common in modern practice for the work of out-of-state attorneys to be overseen by a lead attorney licensed to practice in California, the lead attorney was Siprut, who was unlicensed yet practicing law in California.

This is distinguishable from precedent where a California attorney retained an out-of-state attorney to assist in California litigation. Here, the out-of-state lawyer retained the California attorney because he had no California office.  The Plaintiff retained Siprut, not the California attorneys.  Siprut was the lead counsel, not the California attorney.  Siprut and his association did the lion’s share of the work, including court appearances.  Siprut and the California attorney were not in a relationship similar to a partnership.

Comment: The trial court showed a clear distaste for an out-of-state attorney’s use of the California Courts to file class actions of questionable value.  The court refused to exercise its discretion to look the other way, and found the tools to discourage further use of the California courts by out-of-state attorneys to secure attorney’s fees in cases of little benefit to consumers.

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