Opinion
C042293.
7-22-2003
EAST SACRAMENTO ALHAMBRA CORRIDOR NEIGHBORHOOD ASSOCIATION et al., Plaintiffs and Appellants, v. CITY OF SACRAMENTO, Defendant and Respondent, INVESTMENT DEVELOPMENT SERVICES, LLC et al., Real Parties in Interest and Respondents.
On July 16, 2001, plaintiffs East Sacramento Alhambra Corridor Neighborhood Association, Carolyn Rech, Fiona Renton, and Chris Keithley (collectively ESACNA) filed a petition for writ of mandate challenging the approval by the City of Sacramento (City) of a negative declaration under the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.) in connection with the development of a retail grocery outlet to be opened and/or operated by real parties in interest Investment Development Services, LLC, On L Street, LLC, and Trader Joes Company (hereinafter collectively referred to as Trader Joes). Four weeks later, Trader Joes declared its intent to abandon the project "in the face of the litigation that is simply not cost effective." At that juncture, the parties stipulated to termination of the writ action with the understanding that: (1) Trader Joes would not utilize the entitlements granted under the negative declaration "based solely upon economic business decisions," and (2) Trader Joes "[did] not acknowledge theres been any prevailing party in the action at this point." The court was left to act on ESACNAs request for $ 25,417.50 in attorney fees under Code of Civil Procedure section 1021.5, Californias private attorney general statute (section 1021.5).
After reviewing the parties written arguments and declarations, the court dismissed the petition and denied ESACNAs request for attorney fees. The court stated: "Any award of attorney[] fees under . . . Code of Civil Procedure section 1021.5[] is a matter subject to the discretion of the Court. (Crawford v. Board of Education (1988) 200 Cal. App. 3d 1397, 1405-1406, 246 Cal. Rptr. 806.) In exercising that discretion, this Court does not believe [ESACNA] is entitled to the requested fees. The fact that Real Party in Interest [Trader Joes] withdrew from the project in question for business reasons does not make [ESACNA] herein the `successful party in this litigation for purposes of awarding fees under the statute. Additionally, [ESACNA] has not shown in any event that its actions resulted in the enforcement of an important public right affecting the public interest, as it must in order to justify a fee award under Section 1021.5."
This appeal is limited to the portion of the judgment that denied ESACNAs request for attorney fees. ESACNA argues it was the prevailing party because "it obtained the relief sought and the litigation was the catalyst . . . for Trader Joes decision to abandon the project." ESACNA maintains that, contrary to the courts ruling, its action "resulted in the enforcement of an important public right and that a significant benefit has been conferred on the general public." We affirm the judgment.
DISCUSSION
I
Attorney Fees Under Section 1021.5
Section 1021.5 reads in relevant part: "Upon motion, a court may award attorneys fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) 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."
"Serving as one of several exceptions to the general rule each party is responsible for his own attorneys fees [citations], the private attorney general doctrine was judicially developed through the courts inherent equitable powers and later codified in section 1021.5 [citations]." Leiserson v. City of San Diego (1988) 202 Cal. App. 3d 725, 733-734, 249 Cal. Rptr. 28; see also Westside Community for Independent Living, Inc. v. Obledo (1983) 33 Cal.3d 348, 352, fn. 5, 188 Cal. Rptr. 873, 657 P.2d 365 (Westside Community).) "The private attorney general doctrine `rests upon the recognition that privately initiated lawsuits are often essential to the effectuation of the fundamental public policies embodied in constitutional or statutory provisions . . . . [Without] some mechanism authorizing the award of attorney fees, private actions to enforce such important public policies will as a practical matter frequently be infeasible. [Citations.]" (Baggett v. Gates (1982) 32 Cal.3d 128, 142, 185 Cal. Rptr. 232, 649 P.2d 874 (Baggett), quoting Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 933, 154 Cal. Rptr. 503, 593 P.2d 200 (Woodland Hills).)
To obtain attorney fees under section 1021.5, plaintiff has the burden of showing that its legal action: "(1) served to vindicate an important public right; (2) conferred a significant benefit on the general public or a large class of persons; and (3) imposed a financial burden on plaintiffs which was out of proportion to their individual stake in the matter." (Baggett, supra, 32 Cal.3d at p. 142; accord, Family Planning Specialists Medical Group, Inc. v. Powers (1995) 39 Cal.App.4th 1561, 1567.) The trial court exercises its equitable discretion to "realistically assess the litigation and determine, from a practical perspective" whether plaintiff meets the statutory requirements. (Baggett, supra, 32 Cal.3d at p. 142, quoting Woodland Hills, supra, 23 Cal.3d at p. 938.)
On appeal, we review the trial courts denial of attorney fees for abuse of discretion, and will affirm unless the record reveals no reasonable basis for the trial courts action. (Baggett, supra, 32 Cal.3d at pp. 142-143.)
II
ESACNA Was Not the "Successful Party"
ESACNA maintains its initiation of litigation "was the primary basis, if not the sole basis, for Trader Joes making the `business decision to abandon the Project." ESACNA therefore argues it was the prevailing or successful party for purposes of section 1021.5, because its actions were the catalyst that resulted in the primary relief sought in the petition for writ of mandate. ESACNA contends the court abused its discretion in ruling to the contrary.
The parties agree that only a successful or prevailing party is entitled to an award of attorney fees under section 1021.5. However, it is not always easy to identify that party. "An attorney fee award may be justified [under section 1021.5] even where a plaintiffs legal action does not lead to a favorable final judgment." Westside Community, supra, 33 Cal.3d at p. 352.) Thus, a section 1021.5 award is not necessarily barred because the case was won on a preliminary issue or settled before trial. (Folsom v. Butte County Assn. of Governments (1982) 32 Cal.3d 668, 685, 186 Cal. Rptr. 589, 652 P.2d 437 (Folsom); see Woodland Hills, supra, 23 Cal.3d at p. 938; & Rich v. City of Benicia (1979) 98 Cal. App. 3d 428, 436, 159 Cal. Rptr. 473.) To collect attorney fees, plaintiff must demonstrate "a causal connection between the lawsuit and the relief obtained." (Westside Community, supra, 33 Cal.3d at p. 353; accord, Californians for Responsible Toxics Management v. Kizer (1989) 211 Cal. App. 3d 961, 966, 259 Cal. Rptr. 599 (Kizer).) Whether the causal connection exists is a question of fact. (Kizer, supra, 211 Cal. App. 3d at p. 967.) In deciding who is the successful party for purposes of awarding attorney fees pursuant to section 1021.5, "the critical fact is the impact of the action, not the manner of its resolution." (Folsom, supra, 32 Cal.3d at p. 685.)
ESACNA relies on the "catalyst" theory of causation described in Folsom, supra, 32 Cal.3d 668 , Westside Community, supra, 33 Cal.3d 348, Kizer, supra, 211 Cal. App. 3d 961, and Wallace v. Consumers Cooperative of Berkeley, Inc. (1985) 170 Cal. App. 3d 836, 216 Cal. Rptr. 649. Under this theory, "an award of attorney fees may be appropriate where `plaintiffs lawsuit was a catalyst motivating defendants to provide the primary relief sought . . . . [Citation.] A plaintiff will be considered a `successful party where an important right is vindicated `by activating defendants to modify their behavior. [Citation.]" (Westside Community, supra, 33 Cal.3d at p. 353.) If plaintiffs lawsuit was a catalyst to the extent it "induced defendants response or was a `material factor or `contributed in a significant way to the result achieved then plaintiff has shown the necessary causal connection." (Kizer, supra, 211 Cal. App. 3d at p. 967.)
In Folsom, plaintiffs were taxpaying residents of Butte County who alleged they were transit-dependent. (Folsom, supra, 32 Cal.3d at p. 671.) Plaintiffs sought declaratory and injunctive relief against the Butte County Association of Governments (BCAG) and others to stop the allocation and expenditure of public transportation funds on local street and road projects. Plaintiffs alleged the allocations were illegal and invalid due to defendants failure to identify unmet transit needs as required by applicable regulations. (Id. at pp. 671, 673.) The parties settled, defendants agreeing to establish four new transit systems, and plaintiffs agreeing to dismiss defendants "within one week of the date that the last new transit system had initiated service . . . ." (Id. at p. 675.) The court granted plaintiffs request for attorney fees as successful parties under section 1021.5. (Ibid.)
The Supreme Court affirmed. (Folsom, supra, 32 Cal.3d at pp. 671, 687.) It described the analysis used in federal cases to identify the prevailing party for purposes of the Civil Rights Attorneys Fees Awards Act: "The inquiry as to a partys success must be a pragmatic one that may range outside the merits of the underlying dispute. `[Its] initial focus might well be on establishing the precise factual/legal condition that the fee claimant has sought to change or affect . . . . With this condition taken as a benchmark, inquiry may then turn to whether as a quite practical matter the outcome, in whatever form it is realized, is one to which the plaintiff fee claimants efforts contributed in a significant way, and which does involve an actual conferral of benefit or relief from burden when measured against the benchmark condition. (Citations.]" (Id. at p. 685.) Applying this analysis, the Supreme Court concluded the plaintiffs achieved precisely what they sought. "Their litigation aim was to assure an adequate public transit system in Butte County. Just prior to commencement of the action, BCAG had found that no unmet transit needs existed in the county and had rejected the request of the Chico City Council to allocate Chicos share of [Transportation Development Act of 1971] monies to a transit system there. No public transit system existed in Chico or Oroville or between the major urban areas of the county, and service for the handicapped was both limited and violative of applicable regulations. . . . After the court issued its contingent order . . ., Local Defendants agreed to implement a plan including intracity systems for Chico and Oroville, an intercity system for the county, and a program whereby the elderly and handicapped might utilize systems throughout the county." (Id. at p. 686.) The Supreme Court then turned to the question whether plaintiffs action "contributed to that result or, as the trial court phrased it, `whether or not the local politicians would have done what they have done absent the lawsuit." (Ibid.) The Supreme Court found that the record was "replete with evidence that BCAG dramatically changed its position after the filing of plaintiffs action." (Ibid.)
The Supreme Court reached a different result in Westside Community. In that case, plaintiffs filed a petition for writ of mandate asking the court to order defendant Secretary of Health and Welfare to issue final regulations implementing a statute that prohibited discriminatory practices. (33 Cal.3d at p. 350.) Evidence showed defendant had approved the draft regulations two weeks before plaintiffs filed their lawsuit, and was following the procedures for approval that were mandated by the Administrative Procedure Act. (Id. at pp. 350-351.) The trial court nonetheless ordered defendant to pay attorney fees. (Id. at p. 351.)
The Supreme Court reversed, ruling that the trial court abused its discretion in awarding attorney fees. (Westside Community, supra, 33 Cal.3d at p. 355.) Focusing on the causal connection between plaintiffs action and the relief obtained, the Supreme Court noted that no award is required "if the court determines that plaintiffs suit was completely superfluous in achieving the improvements undertaken by defendants on plaintiffs behalf." (Id. at p. 353.) It found "no evidence in the record to indicate that the issuance of final regulations occurred even a day earlier than it otherwise would have as a result of plaintiffs lawsuit." (Ibid.) The Supreme Court explained that "at the time the lawsuit was filed, defendant had already approved a final draft of the proposed regulations. Statutory requirements mandated a lengthy process of consultation with other state agencies, notice to the public, and public hearings before the proposals could be finalized. Defendant stated in December, in his answer to the petition, that he intended to proceed with the statutorily mandated procedures in an expeditious manner, and he did so." (Ibid.)
This case falls somewhere between the extremes exemplified in Folsom and Westside Community. We conclude the record supports the trial courts finding that ESACNA was not the successful party under the catalyst theory, and the court did not abuse its discretion in denying attorney fees under section 1021.5 on that ground. ESACNA failed to establish the necessary causal connection between the lawsuit and the relief obtained. (Westside Community, supra, 33 Cal.3d at p. 353.) First, ESACNA did not obtain the result sought in its petition for writ of mandate, the "benchmark" in this inquiry. (Folsom, supra, 32 Cal.3d at p. 685.) Second, even if ESACNA could be said to have obtained the legal relief it sought, the filing of ESACNAs petition for writ of mandate was only the last in a series of events that precipitated Trader Joes "business decision" to abandon the project. The trial court could reasonably find that plaintiffs initiation of legal action did not contribute significantly to that result.
As relevant to this appeal, ESACNAs petition sought a peremptory writ of mandate ordering the City to (1) "vacate and set aside its approval of the Negative Declaration on the ground that such approval constituted an abuse of discretion and violates [CEQA];" and (2) "suspend all activity that could result in any change or alteration to the physical environment until [the City] has taken such actions as may be necessary to bring their determination, findings or decision regarding the project into compliance with CEQA." ESACNA expressly alleged "a `fair argument existed that the Trader Joes retail outlet Project may have a significant impact on the environment," and challenged the sufficiency of the evidence to support the Citys conclusion it would not. The merits of its claim that the City violated CEQA turned on these questions, and they were not resolved by Trader Joes decision to abandon the project. ESACNA failed to show its lawsuit "was a catalyst motivating defendants to provide the primary relief sought," that is, compliance with CEQA. (Westside Community, supra, 33 Cal.3d at p. 353, italics omitted.)
Shifting the analysis to a broader, more pragmatic perspective (see Folsom, supra, 32 Cal.3d at p. 685), ESACNA also failed to show the filing of its petition for writ of mandate "contributed in a significant way" to Trader Joes decision (Kizer, supra, 211 Cal. App. 3d at p. 967). Around June 2000, Trader Joes and the owner/developer of 3161 L Street signed a letter of intent in which Trader Joes said it would lease the property upon the developers receipt of City entitlements authorizing operation of the grocery outlet at that location. Douglas Yokomizo, the vice-president and general counsel of Trader Joes, stated in his declaration that communities usually "welcome Trader Joes with open arms and the entitlement process, typically, takes between 4 to 6 months." Indeed, Trader Joes and the developer had secured letters of support from the two established neighborhood groups before they signed the letter of intent. Following meetings with planning department staff and a neighborhood open house, Trader Joes and the developer learned that ESACNA had formed to oppose the project. Kevin Deighan, the developers representative, described the negotiations that took place with ESACNA between June 2000 and August 2001: "On numerous occasions we reached a verbal agreement on the Project with ESACNA only to have this agreement rescinded at a later date. When we finally proceeded to the City Council for final approval of the Project, members of ESACNA said that no matter what concessions we were willing to make[,] they were going to oppose the Project. . . . We were told by members of ESACNA that our Project was being used as a pawn against the City in an effort to obtain area wide traffic calming measures . . . ." Yokomizo agreed that they "had a handful of neighbors who were openly hostile to [them], were completely unreasonable in their demands . . ., and were willing to manipulate the process to further their objectives." He explained that "the entitlement process had already taken approximately three times longer than normal and ESACNA was threatening to drag the process out indefinitely through litigation." At that point, Trader Joes "made a business decision to abandon this project and to find another location that would service the East Sacramento neighborhood but would not be subject to the type of delays encountered at the [L Street] Property." There is nothing in the record to support ESACNAs claim it was "clear that the potential success of the litigation resulted in Trader Joes decision not to proceed with the project." While the record suggests ESACNAs filing of the writ petition influenced Trader Joes decision to abandon the project, it was simply the last in a lengthy series of events that convinced Trader Joes that the project was not worth the time and cost. The record supports the implied finding that even if it was not "completely superfluous" in prompting Trader Joes action (Westside Community, supra, 33 Cal.3d at p. 353), ESACNAs petition for writ of mandate did not contribute in a significant way to Trader Joes decision to abandon the project (Kizer, supra, 211 Cal. App. 3d at p. 967). There was no abuse of discretion.
III
ESACNA Did Not Enforce an Important Public Right Affecting the Public Interest
Even if we were to conclude ESACNA was the successful party under the foregoing legal principles, which we do not, the court did not abuse its discretion in ruling ESACNA failed to show its actions resulted in the enforcement of an important right affecting the public interest. As we explained, a plaintiff seeking attorney fees under section 1021.5 must show it conferred "a significant benefit, whether pecuniary or nonpecuniary, . . . on the general public or a large class of persons." (§ 1021.5.)
On appeal, ESACNA insists its purpose was "not to vindicate individual property rights," as suggested by the courts ruling, but to force the City to comply with its obligations under CEQA, and "to evaluate and mitigate the [projects] potentially significant environmental impacts." Citing Rich v. City of Benicia (1979) 98 Cal. App. 3d 428, 159 Cal. Rptr. 473 (Rich), it argues that "litigation that seeks to compel an agency to prepare a legally adequate EIR, by its very nature, vindicates an important public right affecting the public interest." We conclude that the court did not abuse its discretion in denying attorney fees on the ground ESACNA failed to show it conferred a significant benefit on the general public.
We begin by distinguishing Rich from the case before us. In that case, plaintiff Rich challenged the City of Benicias issuance of a negative declaration in connection with the conversion of an old single-family residence to commercial as well as multiple residential use. (Rich, supra, 98 Cal. App. 3d at p. 431.) The parties resolved the environmental issues by stipulation early in the proceedings, with Benicia agreeing to prepare an environmental impact report. (Ibid.) Thereafter, the trial court awarded Rich attorneys fees under section 1021.5. (Id. at pp. 431, 432.) The Court of Appeal affirmed. (Id. at p. 431.) It stated that "unquestionably environmental concerns in general and the statutory policy in favor of use of environmental impact reports in particular involve preeminently important public rights" (id. at p. 435), but acknowledged it was more difficult to determine whether Rich was a successful party, and whether his action resulted in the enforcement of those rights. (Id. at pp. 435-436.) The court continued, "The lawsuit was, in effect, settled at an early stage: It never reached a determination whether, beneath a veneer of compliance, Benicia had in fact disregarded CEQA and its own guidelines." (Id. at p. 436.) The Court of Appeal concluded that the trial court had realistically assessed the impact of the litigation and properly determined it conferred a significant benefit on the residents of Benicia, and the record supported the trial courts exercise of discretion in awarding attorney fees. (Ibid .)
Here, ESACNA did challenge the Citys issuance of the negative declaration, but the stipulation, placed on the record four weeks after the litigation began, involved only Trader Joes abandonment of the project. The lawsuit did not induce voluntary action on the part of the City to prepare an environmental impact report. (Westside Community, supra, 33 Cal.3d at pp. 352-353; Kizer, supra, 211 Cal. App. 3d at p. 967.) Indeed, there was never a ruling, by stipulation or otherwise, that the City failed to comply with CEQA.
In addition, the ESACNA failed to sustain the burden of showing its action benefited "the general public or a large class of persons." (§ 1021.5.) As we explained, there was evidence that two neighborhood groups supported the Trader Joes project. On this record, we cannot say as a matter of law that ESACNAs efforts benefited the general public.
DISPOSITION
The judgment is affirmed.
We concur: NICHOLSON, J., RAYE, J. --------------- Notes: California courts construe the two terms interchangeably. (See Maria P. v. Riles (1987) 43 Cal.3d 1281, 1291, 240 Cal. Rptr. 872, 743 P.2d 932.)