Charles Munger Jr.’s fee claim may chill public interest suits

Here’s a question about Charles Munger Jr. that’s been buried by coverage of his $35 million in campaign spending to pass an anti-union initiative and torpedo Gov. Jerry Brown’s tax initiative in next week’s election: Has he been maneuvering to bankrupt a public interest activist who had the temerity to mount a court challenge to one of his previous initiatives?

That’s the picture of the multimillionaire being painted by the activist, Richard Winger, 69, who has run San Francisco-based Ballot Access News since 1985. To say Winger’s efforts to track voter-rights litigation nationwide operate on a shoestring is to insult shoestrings; he says his income in each of the last two years came to $6,000.

Now he’s been hit with a $243,000 bill for legal fees incurred by Munger, Winger’s adversary in his unsuccessful lawsuit to overturn Proposition 14. That’s the Munger-backed 2010 “open primary” initiative that turned the general election into a runoff between the top two vote-getters in the primary, regardless of their party.

Munger says he’s due the money because his role in the lawsuit was to protect the public interest; namely the voters’ expressed desire to encourage moderation in both major parties through the open primary system. “There are tens of millions of voters in California, lots of whom voted for the open primary,” he told me.

Winger says his purpose in bringing the lawsuit was also to protect the public interest. He maintained that the law created a roadblock for minor-party candidates. While it allowed voters to write in candidates in the general election, it forbade counting those votes, misleading voters into thinking they’d made a valid choice. After Winger and his co-plaintiffs sued, the state Legislature resolved that discrepancy by forbidding any write-ins.

“Our lawsuit was meritorious,” Winger says, calling the fee award “freakish.”

Both may be right, but to understand why even experts who believe Munger had the better legal case also think it’s wrong for him to collect from Winger, it helps to know a bit about public interest lawsuits.

What’s at issue in this case is the “private attorney general” principle. The idea is that state officials sometimes have too much on their plates to stand up to infringements of state law, attacks on civil rights and the like, so it’s worthwhile to allow private citizens to intervene. Parties that step in and win can petition the court for their legal fees. It’s one of the few exceptions to the American legal principle that each side in a lawsuit bears its own costs.

“We want to encourage private parties to defend public rights,” says Harvey Rosenfield, one of the leading such intervenors in the state.

But state law says those fees are allowable only when a successful party has upheld the public interest and where the intervention was a matter of “necessity.” That’s where Munger and Winger part company.

The fee award was levied this summer against Winger and a handful of co-plaintiffs by San Francisco Superior Court Judge Curtis Karnow, who simultaneously rejected Winger’s own application for $2 million in legal fees. (Winger argued that the state should pay his lawyer’s fees because although he and his co-plaintiffs lost the court case, they prompted the Legislature to change the write-in provision, which was in the public interest.) Just last week, Karnow denied Winger’s request for a reconsideration, instructing him to take his case to the Court of Appeal. Winger says he’ll do so.

Experts in public interest law say the fee award, if it stands, will have a chilling effect on public advocates and community activists who use the courts to challenge government decisions and even private business deals. “If citizens who dare to challenge these corporate-funded propositions then have to pay these corporate lawyers, nobody’s going to do it,” Rosenfield observes.

The fee award astonishes even experts who disagree with Winger’s legal position, such as Richard Hasen, an election law expert at UC Irvine. In his authoritative Election Law Blog thus summer, Hasen called the award “absolutely outrageous,”arguing that such assessments against losing litigants are justified only when an action is frivolous or in bad faith. “This lawsuit was neither,” he wrote.

Munger contends that Winger’s actions edged outside the bounds of pure public interest — that he and his fellow plaintiffs sought to overturn Proposition 14 entirely based on one or two alleged flaws.

The son of Charles T. Munger, who is Warren Buffett’s investing partner, Munger is a physicist associated with the Stanford linear accelerator lab. He’s also the half-brother of Molly Munger, who is the force behind this year’s Proposition 38, a tax initiative competing with Brown’s Proposition 30. So far this year he has spent about $35 million to defeat Proposition 30 and enact Proposition 32, which would effectively knock labor unions out of politics.

Munger is harder to pigeonhole than other millionaires who involve themselves in the California electoral process. He doesn’t appear to be in the game purely for private gain: He’s been active in redistricting reform, which has a good-government flavor.

On the other hand, the anti-union Proposition 32, which fraudulently conceals its true nature beneath the veneer of anti-special interest rhetoric, is about as far from a good-government measure as you can imagine.

Proposition 14 was arguably closer to the first category. But Winger thought it discriminated against candidates outside the mainstream parties and disenfranchised voters who wished to write in candidates. In July 2010, a few weeks after its enactment, he sued to block it, naming California Secretary of State Debra Bowen as the main defendant. Soon after he filed, however, Munger intervened in the case on Bowen’s side.

That’s where the rationale for the fee award gets murky. Unlike the case of Proposition 8, the 2008 anti-gay marriage measure that was defended in court by its promoters because state officials refused to do the job, Bowen was ready and willing to defend Proposition 14. If she had remained the sole official defendant, there would have been no fee assessment against Winger’s side, because state officials can’t seek legal fees against adversaries in public interest cases. But Munger injected himself into the case on the government’s side — and he’s the one claiming the fees.

Munger says he intervened because he wasn’t sure Bowen would do the best job. “We believed we could offer arguments that the secretary of state would not,” he told me, adding that his legal input was a key to the successful outcome.

The effect of the fee award, however, is surely chilling. “When you file a lawsuit against the government, you don’t expect that some private party will enter the case and up the stakes in a way you could never anticipate,” says Fredric D. Woocher, a leading Los Angeles public interest attorney. “The right of petition is a protected activity we don’t want to deter.” But that could happen if any wealthy litigant can step into a public interest case where he may not be needed, and then mulct the other side for thousands of dollars in costs.

Munger says he offered to drop his fee claim if Winger would cease his appeals but was turned down. Winger says he wasn’t aware of that offer but would be happy to settle to “preserve and defend my ability to function” and keep running Ballot Access News.

Yet that wouldn’t settle the underlying issue, which is the sadly perennial question of how the ordinary citizen can get a foothold against powerful interests. With Judge Karnow’s ruling lurking in the wings, the cost of seeking redress in the courts remains out of reach.

Michael Hiltzik’s column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.