This Result Fosters Deterring Actions Without Foundation Brought By Government Against Private Entities/Persons.
The First District, Division 5, in John Russo Industrial Sheetmetal, Inc. v. City of Los Angeles Dept. of Airports, Case No. A151729 (1st Dist., Div. 5 Nov. 26, 2018) (published), dealt with a situation where a plaintiff contracted with the L.A. Department of Airports (LAWA) to provide LAWA with specialized airport firefighting trucks. Each sued the other for breach of contract, but LAWA also sued plaintiff on a California False Claims Act (CFCA) cross-claim. LAWA was awarded $1 on the contract claim, but voluntarily dismissed one aspect of its CFCA cross-claim and lost the other aspect after a jury trial. Plaintiff lost all of its claims against LAWA. The trial judge awarded LAWA costs on its contractual claim, but awarded fees to plaintiff and against LAWA (albeit in a reduced amount from the request) under CFCA’s fee-shifting provision, Government Code section 12652(g)(9)(B), after finding that the action was frivolous and harassing.
The appellate court affirmed. The principal issue was whether plaintiff could be the prevailing party—given the fee-shifting language requiring that defendant “prevails in the action”—for prevailing on only the CFCA claim versus the action as a whole. The 1/5 DCA found that prevailing on the CFCA cross-claim alone sufficed given the lower court’s finding that the claim was frivolous. In doing so, it found that the legislative intent of deterring baseless CFCA suits would be thwarted and that “action”/”claim” were found synonymous in analogous federal False Claim Act jurisprudence.