IMPACT FUND & AMICI to CALIFORNIA COURT OF APPEAL: PROTECT CATALYST FEES

Fawn Rajbhandari-Korr, Training Director and Senior Counsel

In June this year, Impact Fund filed an amicus brief on behalf of thirty-six other public interest law organizations in San Diego Tenant Union et al. v. San Diego Housing Commission et al., in the California Court of Appeal. Our brief asked the Court to affirm the availability of catalyst fees to plaintiffs' counsel in successful public interest lawsuits because nonprofit legal services organizations rely upon the fee-shifting provisions of catalyst fees to undertake important litigation.   

“Catalyst fees” are a legal mechanism by which defendants pay plaintiffs attorneys’ fees when plaintiffs’ lawsuit induces defendants to provide the relief sought by plaintiffs—in other words, when plaintiffs’ lawsuit “catalyzes” defendants’ change in conduct. Under California law, a plaintiff may qualify for an award of attorneys’ fees even if the case is resolved before a final judgment if: (1) the lawsuit was a catalyst motivating the defendants to provide the primary relief sought in the litigation; (2) the lawsuit had merit; and (3) plaintiffs provided defendants with the opportunity to resolve the challenged issue before filing litigation (often referred to as “prelitigation notice”).  

The Little Nine stood up to racial segregation in 1957. In 2024 the San Diego Tenant Union did the same thing.

In this particular case, the trial court awarded catalyst fees to plaintiffs for motivating Defendant San Diego Housing Commission to change the process Defendants used for setting Section 8 housing rent in San Diego. In the federal Housing Choice Voucher Program, also known as “Section 8,” the total rent amount is determined by the local housing commission. The lawsuit alleged that the Housing Commission had a practice of setting higher Section 8 rent for housing in white low-poverty neighborhoods than in Black and brown high-poverty neighborhoods. This practice resulted in Section 8 tenants not being able to afford the higher rent in white neighborhoods – perpetuating racial segregation throughout San Diego. After Plaintiffs filed the lawsuit, the Housing Commission changed its process for setting rent. Plaintiffs’ successful litigation benefitted thousands of low-income families and children who could now access housing in low-poverty neighborhoods with excellent public schools.  

Defendants appealed the trial court’s order awarding catalyst fees. They argued that Plaintiffs did not give Defendants sufficient “prelitigation notice” under California law because Plaintiffs did not use specific legal terms in their many communications and other advocacy efforts to the Housing Commission prior to filing the lawsuit.  In our brief, we urged the Court to reject this narrow interpretation of “prelitigation notice” and availability of catalyst fees.  We explained that imposing such a strict interpretation of "pre-litigation notice" would run counter to California law and public policy by making it harder for private citizens to enforce important rights. This could have the harshest impact on low-income Californians, organizational plaintiffs, and public interest legal organizations who rely on the availability of attorneys’ fees under the catalyst theory. 

Amici hope that the Court of Appeal will affirm the trial court’s order awarding attorneys’ fees and decline to narrow the interpretation of the catalyst theory analysis.  

The Impact Fund is grateful to stand with Asian Americans Advancing Justice of Southern California, Bay Area Legal Aid, Bet Tzedek, California Advocates for Nursing Home Reform, California Rural Legal Assistance, California Rural Legal Assistance Foundation, California Women’s Law Center, Central California Legal Services, Centro Legal de la Raza, Child Care Law Center, Community Legal Aid SoCal, Community Legal Services in East Palo Alto, Disability Rights Advocates, Disability Rights Education & Defense Fund, Elder Law and Disability Rights Center, Equal Justice Society, Family Violence Appellate Project, Justice in Aging, Lawyers’ Committee for Civil Rights of the San Francisco Bay Area, Legal Aid Association of California, Legal Aid at Work, Legal Aid Foundation of Los Angeles, Legal Aid of Marin, Legal Aid of Sonoma County, Legal Services for Prisoners with Children, Legal Aid Society of San Diego, National Health Law Program, The National Housing Law Project, Neighborhood Legal Services of Los Angeles County, OneJustice, Public Counsel, Public Interest Law Project, Public Law Center, San Diego Volunteer Lawyer Program, Inc., Western Center on Law and Poverty, and Worksafe.