Plaintiffs Failed To Satisfy Financial Burdens Elements of CCP § 1021 Analysis.
Plaintiffs successfully challenged a State Water Resources Control Board cease and desist order (CDO) in a water diversion case, which resulted in an affirmance in favor of plaintiffs in a prior published decision. Based on that result, plaintiffs moved to recover private attorney general fees under CCP § 1021, with the lower court awarding such fees for work on the prior appeal but denying fee recovery on other work efforts. Both sides appealed, the Board from the appellate fee recovery and plaintiffs from the denial of fees for other work.
The Board won big on appeal in Millview County Water District v. State Water Resources Control Board, Case No. A145428 (1st Dist., Div. 1 Sept. 28, 2016) (unpublished), obtaining a reversal of the appellate fee recovery and an affirmance of the “other work” fee denial.
The reason for the reversal was that plaintiffs failed to demonstrate with substantial evidence that the financial burden element, as articulated in In re Conservatorship of Whitley, 50 Cal.4th 1206 (2010) [one of our Leading Cases, #14], was satisfied. Quite to the contrary, one group of plaintiffs earned $1.6 million under a purchase agreement by the CDO result, while another plaintiff preserved an asset that would have become worthless absent the CDO challenge. Although plaintiffs vigorously argued that LA Police (a pre-Whitley case) on the financial burdens element dictated a different result, the 1/1 DCA decided that LA Police was not the right test based on the “financial incentives” test governing post-Whitley. In doing so, the appellate court relied heavily on reasoning from Summit Media, LLC v. City of Los Angeles, 240 Cal.App.4th 171 (2015), discussed in our September 9, 2015 post.