By Michael Wilmar

Recently, three separate panels of the California Court of Appeal rendered opinions on the availability of attorneys’ fees for plaintiffs who bring CEQA challenges. The decisions make clear that courts have considerable latitude in determining who is the “successful party” and whether there has been a “significant benefit” under the private attorney general statute.

In Bowman v. City of Berkeley, 131 Cal. App. 4th 173 (2005), the court affirmed a trial court’s determination that plaintiffs qualified as “successful plaintiff[s]” even though they had not prevailed on their substantive issues but had succeeded only on due process grounds. Meanwhile, in Concerned Citizens of La Habra v. City of La Habra, 131 Cal. App. 4th 329 (2005), the court affirmed an order denying attorneys’ fees to plaintiffs who “were successful only in one small regard.” Finally, in Protect Our Water v. County of Merced, 130 Cal App. 4th 488 (2005), the court held that plaintiffs had conferred a “significant benefit” after having prompted the City of Merced to improve its CEQA recordkeeping.

California’s private attorney general statute, Cal. Civ. Pro. Code § 1021.5, is intended to encourage public interest litigation that parties might otherwise find too costly to pursue. The statute deems that a trial court “may award attorneys fees to a successful party… in the enforcement of an important right affecting the public interest.” The statute requires that (a) the successful party has conferred “a significant benefit… on a large class”; (b) the lawsuit constituted a “necessity and financial burden”; and (c) the fees are not paid out of the recovery.

The first case helps define the outer bounds of what it means to be “successful.” In Bowman v. Berkeley, the Affordable Housing Associates (AHA) sought to gain approval for a particular retirement housing project. But nearby residents objected. The Berkeley City Council continued the matter to a May 28, 2002 meeting, and in the meantime referred the dispute between AHA and the neighbors to mediation. On May 28, 2002, the day of the City Council meeting, the mediator emailed a City Council staff member to report that the parties would submit a modified plan by June 3, 2002. The City Council made some efforts to inform the neighbors that it planned to rule on the project that same day and would not wait for the modified plan. Ultimately, none of the neighbors attended the meeting, and the City Council, though perplexed at the neighbors’ absence, approved the project.

The Neighbors brought suit, contending, among other things, that the project ran afoul of CEQA, and that the City Council violated the Neighbors’ rights to due process. The Court ruled against the Neighbors on their CEQA claims, but ordered the City to hold a new hearing. This new hearing attracted much more public comment than the earlier hearing.

The Neighbors moved for attorneys fees. AHA argued the Neighbors did not qualify for attorneys’ fees because they were not “successful”; they had lost on every count of their CEQA challenge, winning only their due process claim. But the trial court granted the motion, and the California Court of Appeal affirmed. The court noted that California courts took a “broad, pragmatic view of what constitutes a ‘successful party.’ ” Id. at 178. Plaintiffs are “successful” if they succeed “on any significant issue.” Id. The court noted that the “remand resulted in a great deal of additional public input on the project, including substantial new written submissions, and oral statements to the city council.” Id. at 180. This, the Court ruled, constituted a “significant benefit” under Cal. Civ. Pro. Code § 1021.5.

The court appeared less generous, however, to plaintiffs in Concerned Citizens of La Habra v. City of La Habra. In that case, Concerned Citizens challenged the proposed construction of a Costco retail warehouse. Concerned Citizens claimed, among other things, that the Costco plan failed to comply with CEQA, violated redevelopment law, wasted public property, and violated state zoning laws. Concerned Citizens lost on all its claims, except for the CEQA challenge. Specifically, the court found the City of La Habra had failed to show, in its mitigated negative declaration, that the project would generate an insignificant increase in traffic through adjacent neighborhoods. Id.

Concerned Citizens then moved for an award of attorneys’ fees. The trial court denied the motion because “[p]etitioners were only successful in one small regard and were unsuccessful on all significant issues.” Id. at 333. The Court of Appeal found the trial court had not abused its discretion in denying the attorneys’ fees: “[T]he mere vindication of a statutory violation is not sufficient to be considered a substantial benefit by itself.” Id. at 335.

It is possible, though not easy, to harmonize Concerned Citizens and Bowman. In Bowman, plaintiffs vindicated a fundamental constitutional right–due process–whereas the plaintiffs in Concerned Citizens merely succeeded on a statutory claim. Alternatively, the decisions can be viewed as manifestations of the appellate tribunal’s deference to trial court discretion. Both panels of the Court of Appeal merely affirmed the lower courts’ rulings. Thus both the granting and the denial of attorneys’ fees possibly fall within the trial court’s discretionary range.

A third case addressed the definition of “successful plaintiff.” In Protect Our Water v. County of Merced, the County of Merced had issued a conditional use permit to real party in interest Calaveras Materials, Inc. (CMI) to conduct surface mining operations. Protect Our Water (POW) filed a writ petition, seeking to set aside the permit. The trial court denied the petition. But the Court of Appeal reversed, holding that the County had maintained such inadequate records as to make it impossible to show, on appeal, that it had made the proper CEQA findings. On remand, POW moved for award of attorneys’ fees, arguing in part that the ruling of the Court of Appeal proved POW to be a “successful plaintiff.” The trial court denied the motion.

But the Court of Appeal reversed, ordering the trial court to award attorneys’ fees. The court first noted that typically, a trial court has discretion to determine whether a party qualifies as a “successful plaintiff.” Id. at 494. But in this case, because the Court of Appeal itself had issued the order in favor of the plaintiff, the Court of Appeal itself stood “in a better position than” the trial court to determine whether plaintiff was “successful.” Id. The court then declared POW to be a successful plaintiff. “Reduced to basics, the County was the loser. POW sought an order setting aside [the permit.] Our opinion directed exactly that result.” Id. at 494. Moreover, POW had conferred a significant benefit because it prompted the County to improve its public records. Id.

For more information please contact Michael Wilmar. Michael B. Wilmar is special counsel in the Real Estate, Land Use and Natural Resources Practice Group in the firm’s San Francisco office.