Ninth Circuit Clarifies when California Law Applies in Federal Cases With Respect to Attorneys’ Fee Requests

A lawsuit brought by Indian Tribes against the State of California pursuant to the federal Indian Gaming Regulatory Act (“IGRA”) resulted in a ruling wherein the State was found to have violated IGRA by failing to negotiate in good faith with the Tribes. After prevailing, the Tribes sought an award of attorneys fees under California Code of Civil Procedure section 1021.5, which allows for the award of fees to a prevailing party “in any action which has resulted in the enforcement of an important right affecting the public interest.”

The panel deciding the underlying case denied the attorneys’ fees request, ruling that the request for attorneys fees could only be granted if permitted under federal law. The Tribes appealed and the Ninth Circuit denied the request. (Chicken Ranch Rancheria of Me-Wuk Indians, et al. v. State of California, No. 21-15751, Apr. 25, 2023.) Specifically, the Court rejected the Tribes’ claim that there is an exception in federal question cases where the claims implicate “substantial and significant issues of state law.” The Court distinguished this ruling from cases where diversity jurisdiction is invoked, in which “[a] federal court sitting in diversity applies the law of the forum state regarding an award of attorneys’ fees.” (Kona Enters., Inc. v. Est. of Bishop, 229 F.3d 877, 883 (9th Cir. 2000).)

The Tribes attempted to argue that while a state law claim was not expressly asserted, state law was implicated because it was a state law that allowed California’s Governor to engage in tribal-state negotiations and allowed waiver of California’s sovereign immunity in IGRA actions. (See Cal. Gov’t Code section 98005.) In rejecting this argument, the Court noted that the presence of state law issues “lurking” in the case does not transform a federal law claim into a state law claim. Because the Tribes brought a claim only under IGRA (federal claim), California law does not govern their request for fees. Accordingly California Code of Civil Procedure section 1021.5 does not apply.