Appellate Court Reverses Trial Court’s Reliance on Contract Hourly Rates and Overturns Its Erroneous Determination That Litigation Was Unnecessary.
This post should be of particular interest to land use and environmental attorneys, showing how appellate courts take interest in making sure private attorney general fee awards are fair to litigants truly enforcing public interest rights.
Code of Civil Procedure section 1021.5 allows a court in its discretion to award attorney’s fees to a successful litigant enforcing an important right that affects the public interest, as against the opponents in the litigation, where “(1) 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, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any ….” The private attorney general provision has spawned significant jurisprudence. However, the appeal we next survey focused on the subpart (b) “necessity of private enforcement” language.
In Tull v. Yuba County , Case No. C054917 (3d Dist. July 7, 2008) (unpublished), plaintiffs had won an earlier appeal by which were successful on a CEQA petition to require Yuba County to conduct an environmental review of an entire project and to ensure compliance completely under CEQA. Plaintiffs filed a motion for attorney’s fees under section 1021.5, asking for a lodestar award based on hourly market rates for attorneys rather than the reduced contractual rates charged the prosecuting clients. Real party opposed almost exclusively with the argument that section 1021.5 requisites were not met; it did not challenge the attorney market rates or billable hours submitted by plaintiffs. (As we shall see, a big mistake; clue—challenge reasonableness if you want to dispute the amount of any future fee award in a reviewing court.)
The trial court did find entitlement under the private attorney general statute and awarded fees to plaintiffs, but reduced the sought-after lodestar from $105,150 to $65.093.75. This was based on the perception that part of the litigation was unnecessary, because County had finally acquiesced and decided to perform a draft EIR. The appellate court was unimpressed with this reasoning. Aside from determining that market (not contractual) rates govern, the Court of Appeal, in a 3-0 decision penned by Acting Presiding Justice Nicholson, rebuffed the notion that plaintiffs’ actions were unnecessary. The appellate panel observed that County refused to conduct an appropriate environmental review, which forced plaintiff to bring an action to comply with the law. Because only a draft EIR had yet been completed, the court’s continuing jurisdiction was necessary to make sure it was CEQA compliant along the way until completion.
In a very interesting turn, Justice Nicholson then found that the appellate court could direct entry of the lodestar of $105,150 (the one improperly reduced) for trial and prior appellate work because real party never contested the reasonableness of the market rates advanced in plaintiffs. The Court of Appeal directed that the unopposed lodestar be awarded to plaintiffs as well as remanded so that the trial court could determine further fees to be awarded for prevailing on the second appeal.
Not a bad day for plaintiffs under California’s private attorney general statute. Also, a sober reminder that the amount of fees should be contested if a litigant hopes to preserve a reasonableness argument on appeal. The absence of evidence on proper market rates was dispositive in this particular appellate cause.