Unreported / Non-Citable
Background
Huasha Liu and Sandeepa Maheshwari retired from the Southern California Association of Governments, which contracts with CalPERS for employee pensions. CalPERS initially accepted SCAG’s merit-pay plan as reportable compensation but reversed course in 2017. It excluded merit payments for ratings below “excels” and lump-sum payments available to employees at the top of their salary ranges. Excluding Liu’s $10,378.58 in final-year merit pay reduced her annual retirement benefits by approximately $4,500. An administrative law judge upheld CalPERS’s interpretation, and CalPERS adopted that decision.
Liu filed a section 1094.5 petition for administrative mandate in September 2019. In January 2020, she filed a first amended complaint adding class action claims and a section 1085 petition for traditional mandate. Her counsel offered that month to dismiss the class allegations if CalPERS would apply any ruling for Liu to similarly situated members’ retroactive benefits. CalPERS rejected that proposal as overly broad. The trial court granted Liu’s individual petition in December 2020, finding that lump-sum merit payments belonged in final compensation. Maheshwari was added as a party in February 2021. After amended pleadings, demurrers, extensive discovery, and a certification motion, the parties agreed in March 2023 that class certification was unnecessary if CalPERS would apply the court’s construction of the bonus regulation to qualifying classic members of SCAG and other contracting employers.
The trial court granted traditional-mandate relief in February 2024 and entered judgment that July on one administrative-mandate cause for Liu and one traditional-mandate cause for both respondents. It retained jurisdiction to ensure compliance. Respondents then sought fees under Code of Civil Procedure section 1021.5. In April 2025, the court awarded a $1,992,846.50 lodestar enhanced by a 1.5 multiplier, totaling $2,989,269.75. CalPERS appealed both entitlement and amount.
The Court’s Holding
The Second District, Division Two, affirmed. It reviewed the significant-benefit determination for abuse of discretion, explaining that the fee decision rested on the trial court’s equitable assessment of an extensive record rather than statutory construction, although it would reach the same result under de novo review. The litigation directly required pension recalculations for some members and, more broadly, compelled CalPERS to apply the correct definition of “bonus” under California Code of Regulations, title 2, section 571. That clarification and enforcement of pension law sufficed even without proof of the benefited group’s exact size. The record also supported a large practical benefit: CalPERS administered retirement benefits for nearly 3,000 public agencies and more than 2,000,000 members, including more than 675,000 retired classic members and 375,000 active classic members, while discovery identified additional agencies with comparable policies. The court therefore did not decide whether the 53 people CalPERS conceded had benefited would independently satisfy the requirement.
The court also upheld the lodestar. It found the successful and unsuccessful claims intertwined because they concerned the same lump-sum payments and pension calculations. CalPERS’s rejection of the early stipulation, followed by demurrers, discovery resistance, and opposition to certification, supported full compensation for the resulting work. The eventual stipulation resembled the relief earlier proposed. The court rejected challenges to time spent on public-records requests, an unfiled fourth amended complaint, and the fee reply, and upheld hourly rates based on market evidence and counsel’s qualifications rather than either party’s flawed expert approach.
Finally, the 1.5 multiplier was justified by strictly contingent representation and nearly 2,200 hours of work that precluded other employment. Skill and complexity were considered only in deciding not to reduce that enhancement, not counted twice. Current rates addressed delayed payment separately from contingency risk. The fee order was affirmed, respondents received costs on appeal, and their request for judicial notice of a March 2026 benefits-adjustment letter was denied as outside the trial record and irrelevant to the fee appeal.
Key Takeaways
- A section 1021.5 award can rest on clarification and enforcement of pension regulations without exact evidence of how many people will receive money.
- CalPERS’s own evidence about its membership, contracting agencies, and the administrative burden of broader relief supported the trial court’s significant-benefit finding.
- A government agency that rejects a streamlining stipulation and litigates class issues extensively cannot necessarily obtain fee apportionment for the work its resistance generated.
- Current hourly rates may compensate for delayed payment while a multiplier separately addresses contingency risk and lost opportunities for other work.
- The appellate court left unresolved whether the 53 conceded direct beneficiaries alone would satisfy section 1021.5’s significant-benefit requirement.
Why It Matters
The decision applies private-attorney-general principles to pension administration by distinguishing direct monetary recovery from the broader benefit of requiring a public pension system to follow the governing regulation. It also treats evidence of the regulated system’s scale and the agency’s own litigation concerns as corroboration, rather than demanding a precise beneficiary count.
On fees, the opinion connects apportionment, rates, and multipliers to the litigation’s actual history. It gives practical weight to an early proposal that could have avoided years of class discovery and explains why current rates and a contingency enhancement served different compensatory purposes.