Federal Appellate Court Finds Equal Protection Claim Demonstrated No Actual Injury and Vacates $509,000 Fee/Cost Award.
Up to this point, California state court decisions have been discussed in prior postings. That is not by design; we do plan to cover California federal cases involving attorney’s fees awards, even though they are not encountered as frequently as we see them in state decisions.
Today, we post our discussion of an interesting land use decision from the Ninth Circuit Court of Appeals. The case is North Pacifica LLC v. City of Pacifica, Case Nos. 06-15131 & 06-15631 (9th Cir. May 13, 2008). It demonstrates how federal appellate courts are willing to vacate substantial fee/cost awards where the underlying damages judgment cannot be supported on appeal.
Developer obtained approval from Pacifica, pretty quickly, for a condominium project. City’s approval depended on Developer’s satisfaction of certain permit conditions, one of which was inserted by City’s outside counsel to avoid all foreseeable future problems and to which no objection was voiced by Developer. Unfortunately, the project became delayed because of a citizen’s appeal to the California Coastal Commission.
Developer sued under the federal Civil Rights Act, 42 U.S.C. section 1983, on both equal protection and due process grounds. The district court found for Developer on the equal protection theory (based on what it thought was the discriminatory permit condition inserted by the City), awarding Developer damages for $156,741.19, a “hefty” (that is the Ninth Circuit panel’s word, not ours) $453,810.75 attorney’s fees award, and a $55,322.40 cost award.
The Ninth Circuit reversed the judgment stemming from the equal protection claims and vacated the judgment as well as the fee/cost award.
In reversing the judgment, the Court of Appeals determined that Developer had never objected to the offending permit condition, which was removed subsequently so as to ameliorate any injury. Beyond that, however, the Ninth Circuit found Developer had failed to demonstrate any actual injury under section 1983—there was no reduction in the value of the project based on the fact that any delay was attributable to the Coastal Commission appeal, not the permit condition (a proximate causation type analysis). At best, the federal appellate court observed that Developer was entitled to only nominal damages, citing Farrar v. Hobby, 506 U.S. 103, 112 (1992).
Poof! In fairly short order, Developer lost a judgment of almost $157,000 and a fee/cost award totaling over $509,000. This shows that proximate or loss causation arguments, combined with waiver contentions, can pack a powerful punch on appeal when based on underlying undisputed facts.