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Posts Tagged ‘private attorney general doctrine’


Public Interest Standing Not Automatically Precluded by Commercial Interest, Private Attorney General Doctrine Fee Award Upheld

Wednesday, November 7th, 2018

No billboards are visible from one of the City of Pomona’s busiest highway interchanges. (AARoads)

In Citizens for Amending Proposition L. v. City of Pomona, (2018) Cal.App.LEXIS 1014, the Second District Court of Appeal held an attorneys’ fees award, pursuant to Code of Civil Procedure section 1021.5, was appropriate where a residents’ group’s action to enforce a voter-approved proposition prohibiting additional billboards in the City of Pomona (City) had standing and conferred an important public interest of significant benefit, was necessary, and was financially burdensome for the group.

In May 1993, the City entered into an agreement with Regency Outdoor Advertising, Inc. (Regency) to erect and manage billboards along a City highway. In November 1993, City voters passed a ballot initiative, Proposition L, which prohibited the construction of additional billboards and grandfathered in already-existing agreements. In June 2014, the City’s agreement with Regency expired by its terms while the City was negotiating to extend it. In July 2014, the City and Regency entered into an agreement purporting to amend the 1992 agreement, including construction of digital billboards. Citizens for Amending Proposition L and Vernon Price (Citizens) filed suit against the City alleging that the July agreement was passed in violation of Proposition L.

The trial court held that the July agreement was in fact a new agreement enacted in violation of Proposition L. Because the City did not adopt the agreement until after the original agreement had expired, it was a new agreement subject to the rules, regulations, and official policies in effect at the time of its execution, July 2014.

Citizens moved for attorney’s fees pursuant to Code of Civil Procedure section 1021.5, the private attorney general doctrine. They asked for $189,990, representing 389.8 hours of work at a rate of $500 per hour. They also requested that a multiplier of three be employed in the calculation to account for the complexity of the case, their complete victory, and other factors. Thus, the total fee request was for $569,700. At its discretion, the trial court found that Citizens met the statutory criteria for Section 1021.5 and granted the motion. However, the number of hours billed and the billing rate were found to be excessive. Accordingly, the trial court reduced the award to 250.67 hours at a rate of $300 per hour. The trial court further found that there was no basis for enhancing the fees with a multiplier. As such, the trial court awarded $75,200.40 to Citizens. The City timely appealed the award.

On appeal, the Court reviewed the City’s claim that Citizens lacked standing to bring the mandamus action. The City claimed that Citizens lacked a beneficial interest in the litigation, equivalent to the Federal “injury in fact” test. This must be “direct and substantial.” The Court found no evidence that Citizens experienced any actual, imminent, or particularized invasion of a legally protected interest as a result of the City’s adoption of the ordinance.

The City then claimed that the public interest exception to the beneficial interest requirement did not apply to Citizens’ mandamus action. Public interest standing is established where “the object of the mandamus is to procure the enforcement of a public duty.” Reviewing the trial court’s decision for an abuse of discretion, the Court found that Citizens indeed had public interest standing where “the duty is sharp and the public need [for enforcement] is weighty.” Citizens specifically alleged that the City violated its own municipal law, a claim with a “sharp” public interest. Further, the record showed that, absent Citizens’ intervention in the negotiations, billboards might have been constructed without broad public awareness of any potential issue, thus demonstrating a “weighty public need.”

The Court specifically dismissed the City’s claim that Citizens’ personal interest in the suit precluded standing, as it did for the plaintiffs in Waste Management of Alameda County, Inc. v. County of Alameda (2000) 79 Cal.App.4th 1223. First, there was no evidence that Vernon Price or Citizens for Amending Proposition L advanced a commercial interest in bringing the suit. Vernon Price was an individual living within the City and the group was an unincorporated association of City residents; neither situation demonstrated an individualized interest. Even so, following the holding in SJJC Aviation Services, LLC v. City of San Jose (2017) 12 Cal.App.5th 1043, 1058, the Court held that “a personal objective is one factor the court may consider when weighing the propriety of public interest.” The Court warned that to rule otherwise would be impractical as “truly neutral parties are unlikely to bring citizen suits.”

The Court separately held Citizens for Amending Proposition L had organizational standing. Following the holding in San Francisco Apartment Association v. City and County of San Francisco (2016) 3 Cal.App.5th 463, the Court held that the group had demonstrated “(1) its members otherwise would have standing to sue in their own right; (2) the interests it [sought] to protect [were] pertinent to the association’s purpose; and (3) neither the claim asserted nor the relief requested require[d] participation of the association’s individual members.” Vernon Price, a member of the group, had demonstrated his personal standing, the group’s purpose was to enforce Proposition L, as it did here, and compliance with Proposition L did not require the participation of other group members. Both Vernon Price and Citizens for Amending Proposition L had adequate standing.

The Court then turned to the merits of the appeal and established that Section 1021.5 allows for an award of attorneys’ fees at the discretion of the court where an action has resulted in “the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement …are such to make the award appropriate, and (c) such fees should not, in the interest of justice, be paid out of the recovery, if any.”

Considering this, the moving party must establish “(1) he or she is a ‘successful party,’ (2) the action has resulted in the enforcement of an important right affecting the public interest, (3) the action has conferred a significant benefit on the public or a large class of persons, and (4) an attorney fees award is appropriate in light of the necessity and financial burden of private enforcement.”

Reviewing the trial court decision for an abuse of discretion, and noting the broad deference conferred on the trail court, the Court affirmed the award.

The City contended that Citizens did not vindicate an important public interest, as required under 1021.5. The City argued that the trial court failed to analyze the benefit of the case “from a practical perspective” and did not evaluate the “significance of the benefit to the public.” The Court held that Citizens vindicated an important public right in ensuring that Proposition L was properly enforced, a benefit to the entire City. As such, Citizens conferred an important public interest of significant benefit.

Next, the City contended that the necessity and financial burden requirement was not met, that private enforcement was not necessary, and that the financial burden of private enforcement did not warrant subsidizing the successful party. The Court found that there was “ample” evidence in the record that Citizens’ goal of enforcing Proposition L was not self-serving, but benefitted all City residents. Further, there was no evidence in the record demonstrating that either Vernon Price or Citizens for Amending Proposition L would personally benefit from the July agreement being invalidated. Relying on Arnold v. California Exposition and State Fair (2004) 125 Cal.App.4th 498, a financial interest must be “specific, concrete, and significant and based on objective evidence.” Here, the Court found none. Even if one or both Respondents were competitors of Regency, the Court found there was no financial benefit in seeking the enforcement of the Proposition L prohibition.

The Court affirmed the trial court holding.

Key Point:

Public interest standing is not precluded by a petitioner’s commercial interest in a case where a sharp public interest and weighty public need outweigh an individual interest.

An award of attorney’s fees under the private attorney general doctrine is appropriate where a party conferred an important public interest of significant benefit, the action was necessary, and to bring the action was financially burdensome for the group.

Private Attorney General Doctrine Attorney’s Fees Proper For Party Successful in Invalidating Specific Plan Variances

Thursday, May 3rd, 2018

The partially-completed Target Superstore sits dormant on the corner of Sunset Boulevard and Western Avenue in the Hollywood Neighborhood of Los Angeles. (Edwin Folven)

In La Mirada Neighborhood Association v. City of Los Angeles (2018) 22 Cal.App.5th 1149, the Second District Court of Appeal held that attorneys’ fees were properly awarded per California Code of Civil Procedure section 1021.5 (Section 1021.5) where the challengers were successful in conferring a significant benefit in the public interest—invalidating six of eight specific plan variances approved for a single project.

Under Section 1021.5, a trial court, at its discretion, may award attorneys’ fees to a successful party that acts as the catalyst that motivates a public agency to alter its behavior. A successful party confers a significant benefit on the general public if it enforces an important right affecting the public interest, and that enforcement benefits a large number of individuals. Further, a successful party is not precluded from seeking attorneys’ fees if, after obtaining a judgment that a project violates the zoning laws then in existence, a city later changes the zoning laws.

The City of Los Angeles (City) approved a Target Superstore Project, including eight variances from the applicable specific plan. These variances excused the Project from the specific plan’s height restrictions, many design element requirements, parking space limits, delivery time restrictions, and home delivery requirements. La Mirada Neighborhood Association (La Mirada), a community association, filed suit.

The trial court partially granted and partially denied La Mirada’s writ petition; six of the eight special plan variances were found invalid because they were not supported by substantial evidence. Only the parking variance and home delivery variance were upheld. The judgment also authorized La Mirada to seek attorneys’ fees. La Mirada moved for attorneys’ fees pursuant to Section 1021.5, the “private attorney general doctrine.” The trial court granted $793,817.50 to La Mirada for success in litigating the matter and conferring a significant benefit on the City’s residents. Target and the City appealed this award.

The Appellate Court opined that, while generally parties pay their own attorneys’ fees, Section 1021.5 is an exception to this rule to encourage parties to “pursue meritorious public interest litigation vindicating important rights and benefitting a broad swath of citizens.” Therefore, a party recovering attorneys’ fees must establish “(1) it is a successful party in an action, (2) the action has resulted in the enforcement of an important right affecting the public interest, (3) the action has conferred a significant benefit on the general public or a large class of persons, and (4) an award of attorney fees is appropriate in light of the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity.”

The Court first established that La Mirada is a “successful party.” Under Section 1021.5, a successful party is one that “achieves its objectives.” Contrary to Target’s claim, a party need not receive a final judgement in a case, need not be successful on all claims, and need not personally benefit from a judgement. Instead, the Court stated, the definition is broad and measured by “the impact of the action.” Essentially, a party is successful where the lawsuit serves as a “catalyst that motivate[s] the defendant to alter its behavior.” Here, La Mirada was successful where six of the eight variances were set aside and the lawsuit motivated the City to amend the special plan to allow the Target Superstore. The lawsuit “directly prompt[ed] a legislative fix;” La Miranda was a successful party.

The Court then established that La Mirada conferred a significant benefit on the public in requiring the City to adhere to the law. This determination is a function of “(1) the significance of the benefit, and (2) the size of the class receiving [the] benefit.” The Court stated that “a benefit need not be monetary to be significant.” Rather, a party may secure a nonpecuniary benefit to the public, including the benefit of the proper enforcement of the law, if it can “show that the law being enforced furthers a significant policy.” Here, the Court found that the standard was clearly met because La Mirada’s lawsuit resulted in (1) the City adhering to legal requirements for granting variances, which the California Supreme Court has consistently recognized the importance of preserving the integrity of zoning laws as an important public policy, and (2) benefited a large group of individuals, as all residents of the City “benefit from the trial court’s ruling that holds the City Council’s zoning decisions to the letter and spirit of the Municipal Code.”

Target claimed that La Mirada was not successful because the validity of the Project under the subsequently-amended specific plan is still pending. Target claimed that La Mirada’s objective was to stop the Project from ever being built and that the City may still prevail in obtaining a ruling that the Project is valid under the new zoning law. The Court found that this argument was both factually inaccurate and legally untenable. First, the Court explained that La Mirada’s stated goal in filing the writ petition was to set aside and invalidate the eight variances granted by the City and to enjoin further construction of the Project contingent on the validity of the eight variances. The Court stated that “[a]t no point did [La Mirada] allege that their writ petitions were aimed at stopping the Project forevermore.”

Secondly, the Court explained that success under Section 1021.5 “does not require a showing that the successful party put the entire dispute to rest for once and all.” In fact, the code authorizes “interim attorney fee awards” for successes conferring significant benefits before a matter is finalized. In this case, the Court explained that, since the trial court’s judgment that the specific plan variances were invalid was left intact after the first appeal, the judgment is more final than the typical interim ruling. It can be considered “interim only against the backdrop of the broader litigation between the parties, which continues only because the City amended the zoning laws and thereby promoted a new round of petitions challenging the Project” during this appeal. Further, the Court explained, a Court may only grant writ relief after applying the law in existence at the time of its decision. Target’s argument, on the other hand, would require parties to succeed under the law in existence at time and “as it might be amended in the future.” The Court, however, declined “to define success as requiring one to achieve the impossible.”

The Court held the attorneys’ fee award to La Mirada did not demonstrate an abuse of the trial court’s discretion.

Key Point:

A party is “successful” for the purposes of being granted an award of attorney’s fees under the private attorney general doctrine where it achieves at least a portion of the stated goals of bringing the petition.

Private Attorney General Doctrine Attorney’s Fee Award Proper Where Financial Burden Disproportionate to Financial Stake

Friday, January 12th, 2018

Homes along the wetlands of Heron Bay, San Leandro, California that may have suffered environmental impacts by the project. (SWA Group)

In Heron Bay Home Owner’s Association v. City of San Leandro (2018) 19 Cal.App.5th 376, the First District Court of Appeal affirmed a trial court judgement awarding partial attorneys’ fees where the financial burden of enforcement made an award appropriate pursuant to Code of Civil Procedure section 1021.5. The Heron Bay Homeowners’ Association (Heron Bay) was successful in their CEQA suit and while a “pecuniary interest in the outcome of the litigation [was] not disqualifying…the issue [was] whether the financial burden placed on the party is out of proportion to its personal stake in the lawsuit.”

Real Party in Interest Halus Power Systems manufactures wind turbines on a five-acre parcel in the City of San Leandro’s (City) industrial zone. Halus Power proposed to build a single 100-foot tall wind turbine on its property for renewable power generation and on-site research and development (Project). During the public comment period, Heron Bay expressed concern regarding the Project’s impacts on views, wildlife, aircraft navigational radar, noise and vibration levels, and property values. The City approved the Project, granted a height restriction variance, and issued a mitigated negative declaration. Heron Bay filed suit.

The trial court found there was substantial evidence supporting a fair argument that the Project as mitigated would have significant environmental impacts and directed the City to set aside its approval until the City had prepared an EIR. Halus Power ultimately decided not to proceed with the Project.

Heron Bay moved for an award of attorneys’ fees under Code of Civil Procedure section 1021.5 (Section 1021.5), the private attorney general doctrine. The trial court determined that the value of the suit to Heron Bay was approximately $5.8 million, and reasonably anticipated legal costs should have totaled approximately $240,000. The trial court also noted that Section 1021.5 was intended to address the problem of affordability in public interest litigation, and pointed out that a lawsuit aimed at avoiding financial loss, such as an anticipated harm to property values, may be especially hard to finance. Balancing these findings, the trial court awarded Heron Bay $181,471.70 in attorneys’ fees. The City timely appealed.

The Court found that to qualify for Section 1021.5 attorneys’ fees, a plaintiff must establish: (1) that the suit resulted in enforcement of an important right affecting the public interest; (2) that a significant benefit was conferred on the public or a large class of persons; and (3) that the necessity and financial burden of enforcement are such as to make the award appropriate. The City disputed Heron Bay’s claim that they met the third requirement.

The Court found that, contrary to the City’s assertions, Heron Bay faced a substantial financial burden compared to the potential benefit at stake in the litigation. Membership in the homeowners’ association was mandatory, each member had a vote, and only a few properties in the 629-unit development were likely to be within view of the Project. Accordingly, the Court reasoned that many members likely did not have sufficient individual financial motivation to retain counsel for CEQA litigation absent the possibility of Section 1021.5 fees.

The Court pointed out Heron Bay retained counsel on a “partially contingent fee basis,” allowing it to initially pay less than a third of the amount that retained-counsel actually billed. This “indicated Heron Bay and its members did not actually value the ‘benefit’ here sufficiently to undertake the litigation absent the incentive of a potential fee award under [S]ection 1021.5.” Further, the benefit Heron Bay sought was not “immediately bankable” and could not be used to pay counsel. The Court agreed with the trial court that the CEQA litigation costs would be a “much larger financial commitment” than the previous administrative proceeding they had been through. A court must evaluate these factors when determining whether the personal interests of Heron Bay “transcended the litigation costs.”

The Court then held some amount of pecuniary interest does not disqualify a party from being awarded attorneys’ fees. Heron Bay demonstrably was not solely motivated by a desire to avoid a loss in property values where its members submitted comments during the public comment period regarding not only property values, but also impacts on wildlife, aesthetics, health, and noise levels. The City’s argument that Heron Bay was ineligible for attorneys’ fee awards because it acted purely out of self-interest was unfounded. The City’s alternative argument—that Heron Bay was not authorized by its governing documents to pursue a purely altruistic action—was similarly dismissed.

The City’s final argument was that the trial court contradicted itself by concluding that Heron Bay’s “financial incentive” was “mitigated by the uncertain value of the benefit sought,” because the trial court assigned a subjective value, informed by Heron Bay’s claims, of $5.8 million to Heron Bay’s avoided property value loss. The Court stated that the trial court erred in applying an arbitrary evaluation, but found this did not affect the question of whether Heron Bay’s financial incentive was so large and the benefit so certain that it precluded any award. Since the City gave no credible evidence for a specific valuation of the projected loss, the Court could not agree that Heron Bay’s financial stake made Heron Bay ineligible for attorneys’ fees—the trial court conclusion was supported by substantial evidence.

Finally, the Court rejected speculative evidence regarding the Project’s projected harm to property values. The trial court’s ruling could not guarantee the City would refuse the requested variance or require Halus Power to make changes to the project following adoption of an EIR, or that Halus Power would abandon the project.

Accordingly, the Court affirmed the trial court’s ruling and awarded Heron Bay its costs on appeal, including attorneys’ fees, in an amount to be determined by the trial court.

Key Point:

A financial interest in the litigation does not automatically preclude an award of attorney’s fees under the private attorney general doctrine. Where the financial burden of bringing the lawsuit is disproportionate to a party’s financial stake in the lawsuit, fees may be awarded.