After a three-year investigation, the California Attorney General’s Office filed a sweeping civil enforcement action against a nonprofit organization, its directors, and affiliated companies that supported the charity’s operations. The complaint alleged serious claims, including breach of fiduciary duty, self-dealing, diversion of charitable assets, and misrepresentation. The Attorney General sought more than $20 million in restitution, fines, and penalties, along with over $2 million in purportedly “mandatory” attorney’s fees. Following five years of hard-fought litigation and a three-month trial, the Ponist Law Group secured a defense verdict on every substantive claim. The only issue on which the Attorney General prevailed involved record-keeping deficiencies. The outcome was decisive. Instead of the more than $20 million sought, the court awarded just $14,000 in fines and penalties. Instead of over $2 million in attorney’s fees, the court awarded $35,800.

In a groundbreaking decision, the appellate court overturned years of precedent which denied businesses the right to a jury trial in civil enforcement actions brought by the State of California against businesses. In this matter, the State of California sought tens of millions from a client for alleged unfair business practices and sought to do so without the right to a jury trial. Attorney Ponist successfully argued that trial without a jury violated his clients' fundamental, constitutional rights, arguing, in part, “California has never afforded parties lesser rights than what they're afforded under the United States Constitution. That's never happened. It's not that you come to California, you might get higher minimum wage, better environmental protections, but when it comes to Constitutional rights, tough luck.”