Company’s Financial Interest Outstripped Broader Public Interests, With Interesting Discussion Of Settlement Communications And Whitley Analysis Where No Monetary Award Sought By Fee Claimant.
Summit Media LLC v. City of Los Angeles (CBS Outdoor LLC), Case No. B255050 (2d Dist., Div. 8 Sept. 8, 2015) (published) is a nice addition to CCP § 1021.5 jurisprudence and also cautions a fee claimant to be careful what you put in merits declarations/settlement communications—the latter may come to “bite you” when it comes to subsequent fee proceedings.
In this one, Summit Media successfully challenged an illegal settlement agreement between two outdoor advertising companies to digitize many existing billboards. Summit Media then moved for significant recovery of attorney’s fees/costs under section 1021.5–$2.618 million for trial work and almost $235,000 for appeal work, totaling more than $3 million by the time of the fee motion. The lower court denied the fee request, determining that the financial burden on Summit Media was not disproportionate to its individual stake in the matter.
The Second District, Division 8, in an opinion authored by Justice Grimes, affirmed the fee denial.
A big problem for Summit Media was that it introduced merits testimony indicating that the action was a competitive game saver and possibly one commenced for its economic survival. But there was more—Summit offered to settle the litigation for $10 million in a settlement offer. Based on this, the reviewing court found more than enough support for the fee denial based on the Whitley cost/benefit analysis on the financial interest factor of section 1021.5. In a footnote, it found that no settlement evidentiary privilege prevented admitting the settlement offer for the limited purpose of assessing financial burdens and incentives under the private attorney general statute.
The nice aspect of this published decision, with respect to 1021.5 jurisprudence, is that it held a claimant seeking no monetary award could still be held to have an overriding financial interest and, separately, that even an “indirect” financial interest—in this case, competitive survival—certainly allowed trial judges to consider such an interest (gauging whether it was real or speculative in nature).