First District, Division Four Finds No Abuse of Discretion in Denying Fees Based on the Lack of Proof of a Large Class Benefit in a “One-Off” Situation.
Code of Civil Procedure section 1021.5, the so-called private attorney general statute, is a well-recognized exception to the American rule that parties bear their own litigation costs. (Graham v. DaimlerChrysler Corp., 34 Cal.4th 553, 565 (2004).) The two primary requirements of section 1021.5 are contained in subdivisions (a) and (b): the suit must confer a “significant benefit … on the general public or a large class of persons” (subdivision (a)) and the “necessity and financial burden of enforcement … [must] make the award appropriate” (subdivision (b)). The party seeking fees must prevail on all the statutory requirements under this statute. (Angelheart v. City of Burbank, 232 Cal.App.3d 460, 470 (1991).) The next case deals with the first element, demonstrating that a “one-off” case may not qualify as benefiting a large class of persons for purposes of awarding fees under section 1021.5.
Martin v. City and County of San Francisco, Case No. A119130 (1st Dist., Div. 4 Oct. 31, 2008) (unpublished) involved a plaintiff who successfully obtained a prior appellate reversal of a trial court ruling that the California Environmental Quality Act (CEQA, Pub. Resources Code, sec. 21000 et seq.) did not apply to a building permit application to authorize plaintiff’s proposed renovations/improvements to the interior of his home located in one of San Francisco’s historic districts. After the appellate win in Martin v. City and County of San Francisco, 135 Cal.App.4th 392, 399 (2005) (Martin I), plaintiff moved for an attorney’s fees award under section 1021.5 based on claiming to have spent $239,000 in the litigation and having avoided spending about $40,000 to comply with the CEQA environmental review (if he had not obtained the appellate ruling). The trial court denied the request, and plaintiff appealed.
The First District, Division Four, in a 3-0 decision authored by Presiding Justice Ruvolo, affirmed.
The trial court found that plaintiff failed to prove his lawsuit resulted in a benefit to a large class and did not demonstrate the necessity/financial burden of the action, but the appellate court found it necessary to only deal with sustaining the first prong (large class benefit requirement). The standard of review utilized was the abuse of discretion test, deferring to the lower court’s assessment of the record. (See Baggett v. Gates, 32 Cal.3d 128, 142-143 (1982); Beach Colony II v. Calif. Coastal Com., 166 Cal.App.3d 106, 112-113 (1985).)
Justice Ruvolo determined that the trial court did not err in determining that (a) the main motivation for the litigation was plaintiff’s avoidance of expensive public scrutiny of his home interior renovation project, and (b) plaintiff failed to prove that his action would benefit a large group of persons. Three factors weighed heavily as the underpinning for these conclusions. First, the fact that plaintiff’s project was arguably subject to CEQA came from a peculiar provision of San Francisco’s Municipal Code that gave the city discretionary review of interior projects, although most other statewide ordinances conferred ministerial review of interior projects—making CEQA inapplicable to a vast majority of interior remodeling projects. (Pub. Resources Code, sec. 21080(b)(1).) Second, plaintiff never presented evidence that a large class of persons was impacted aside from San Francisco’s historic districts (with the record failing to show that other homeowners had been actually affected by the decision). Third, in a footnote, the appellate panel observed that CEQA exempts interior alternations to non-historical resources, corroborating the lower court’s conclusion that a large-scale benefit was not derived from Martin I. (Accord, Angelheart, supra, 232 Cal.App.3d at 463, 468-469 [trial erred in awarding section 1021.5 fees where no evidence demonstrated that there were other similarly situated applicants].)
The Court of Appeal acknowledged that the trial court had discretion to consider whether a hypothetical benefit to a hypothetical class (such as municipalities like San Francisco that adopt future ordinances of the same nature) sufficed to satisfy the “large group” prong of section 1021.5 analysis. The trial court found this class too speculative, and the appellate panel found no abuse of discretion in coming to this conclusion. In the end, appellant failed to prove large class benefit such that the fee denial order was affirmed on appeal.
This case demonstrates that “one-off” (sui generis) situations may not quality for an award of section 1021.5 fees unless a universe of similarly situated persons is impacted. (BLOG OBSERVATION—Sui generis—Latin, meaning “of its own kind or class; peculiar”.)