Friday, February 12, 2016

Nothing Retroactive Here

USS Posco Indus. v. Case, No. A140457 (D1d1 Jan. 26, 2016)

Labor Code § 218.5 permits a prevailing party to recover its fees in certain wage cases. While the case was pending, the Legislature amended § 218.5. Prior to the amendment, it was a pure loser-pays statute—the prevailing party, whether plaintiff or defendant, was simply entitled to a fee award. But under the amendment, the defendant can now recover fees only if the court finds the action was brought in bad faith. Citing retroactivity concerns, the trial court applied the old rule and gave defendant its fees. 


But according to the court here, that was error. While there was no evidence that the Legislature intended the amendment to work retroactively, California courts treat cost- and fee-shifting statutes as procedural, not substantive. Procedural changes are essentially prospectivethey apply only to procedural events as they occur, even if the facts of the case pre-date the change. Since, as the cases reason, the new rules apply only to litigation events occurring after the change, there are no perceived retroactivity concerns. Thus, the court here should have applied the new version of § 218.5, and in the absence of a bad faith finding, it should not have awarded fees to Defendant.

Reversed.

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