In an opinion filed March 18 and belatedly ordered published on April 13, 2015, the Fourth District Court of Appeal upheld a trial court’s discretion to award only $19,176 in attorneys’ fees under Code of Civil Procedure § 1021.5 to a successful CEQA plaintiff (SOURCE) who sought $221,198 based on a $110,599 “lodestar” with a multiplier of two. Save Our Uniquely Rural Community Environment v. County of San Bernardino (Al-Nur Islamic Center, Real Party in Interest) (4th Dist., Div. 2, 2015) 235 Cal.App.4th 1179. SOURCE, an organization of individuals, had successfully challenged San Bernardino County’s mitigated negative declaration (MND) and conditional use permit (CUP) for real party in interest Al-Nur Islamic Center’s proposed 7,512-square foot Islamic community center and mosque to be located on a 1.54-acre parcel in a residential part of the unincorporated county. Rejecting 5 of its 6 CEQA arguments, the trial court granted SOURCE’s writ petition on the sole ground that county failed to properly analyze the project’s environmental impacts from wastewater disposal, and ordered county to adequately analyze such impacts under CEQA.
In affirming the trial court’s post-judgment award of attorneys’ fees under California’s “private attorney general” statute (Code Civ. Proc., § 1021.5) – which award denied plaintiff’s request for a multiplier and cut back plaintiff’s “lodestar” fees by over 80% – the Court of Appeal made the following key points:
- “The so-called private attorney general theory applies to actions to enforce provisions of CEQA” and “[t]he [successful] party seeking attorney fees has the burden of proving that the litigation warranted an award of attorney fees and that the hours expended and the fees sought were reasonable.” (Citing Center For Biological Diversity v. County of San Bernardino (2010) 188 Cal.App.4th 603, 611-612, 615.)
- Once the trial court has properly found that the statute’s requirements are met, “the amount of fees to be awarded under section 1021.5 is within the trial court’s discretion” and the fee claimant “has the burden to prove that the trial court abused its discretion in awarding less than the amount it sought.” (Ibid.)
- A trial court’s award under the “abuse of discretion” standard “will not be disturbed unless the trial court exercised its discretion in an arbitrary, capricious, or patently absurd manner that resulted in a manifest miscarriage of justice.” (Citing Ketchum v. Moses (2001) 24 Cal.4th 1122, 1133.) The question amounts to whether the ruling “‘falls outside the bounds of reason’ under the applicable law and the relevant facts….” (Quoting People v. Giordano (2007) 42 Cal.4th 644, 663.
- The scope of a trial court’s discretion in determining the amount of a fee award is broad: “That a court might have exercised its discretion [to award SOURCE the fees it sought] … is not sufficient to demonstrate that it was an abuse of discretion not to award the fees SOURCE sought.”
- “[A] trial court may reduce attorney fees based on the plaintiff’s degree of success … [which] is a key factor in determining the reasonable amount of attorney fees to be awarded under section 1021.5.” (Citing numerous cases.) Thus, “the trial court could reasonably conclude that a reduction in fees was warranted because of its rejection of the majority of SOURCE’s contentions.”
- “[I]t was [not] an abuse of discretion [for the trial court] to consider the [40 hours in] time spent in preparing the [14-page reply] brief [on the merits of the writ] excessive.”
- It was not an abuse of discretion to reduce the award because SOURCE failed to meet its burden of proof to show administrative proceedings for which fees were sought were “useful and necessary and directly contributed to the resolution of the action.” (Citing National Parks & Conservation Assn v. County of Riverside (2000) 81 Cal.App.4th 234, 242, additional quotations marks omitted.)
- It was not an abuse of discretion for the trial court to adjust the requested fees downward because it believed they were “unjustly inflated” and “unreasonable.” For example, the trial court found the hours billed were “excessive” because “the litigation was not complex and could have been handled by SOURCE’s experienced CEQA attorneys ‘without having to reinvent the wheel.’” SOURCE’s attorneys also billed partner rates for clerical tasks and charged an unjustified hourly rate of $110 for law clerk time.
- SOURCE failed to justify not seeking counsel in San Bernardino or Riverside, and thus failed to justify a lodestar based on other-than-local market rates.
- SOURCE’s attorneys being paid $10,000 and taking the case on a partial contingency case did not “in and of itself” entitle it to a double (or any) multiplier “based on the contingent risk factor.” To the contrary, “although taking a case on a contingent fee basis may support a multiplier, it does not compel it. Rather, that is a decision left up to the trial court’s discretion.” Here, SOURCE’s law firm “did not show [it had to turn down other work and] that its income suffered as a result of taking this case as a partial contingency” and its “risk … was mitigated by the initial payment of $10,000.” Therefore, “it was [not] an abuse of discretion not to award a multiplier based on the contingent nature of the representation.” Nor was a multiplier compelled by the matter’s complexity or the attorneys’ skills – the trial court clearly did not view the case as “complex by CEQA standards” and (regardless of the law firm’s quality of representation) “the court found that the fees charged were “outrageous” in light of what it saw as the relative lack of complexity of the case and small size of the administrative record [at less than 1,000 pages].”
- Rejecting contrary analysis and reasoning in Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 99-101, the Court of Appeal further held “we cannot reverse an attorney fee award solely for lack of an explanation [of its lodestar calculations] by the trial court. We can reverse only if the record contains some indication that the trial court considered improper factors or did, indeed, simply snatch its award ‘from thin air.’” (Citing Gorman, supra, at 101.) “Because the record shows that the [trial] court acted for legitimate reasons, we cannot find an abuse of discretion simply because it failed to make its arithmetic transparent.”
The key takeaway from this case is that (at least in the Fourth District) a trial court making a “private attorney general” fee award under CCP §1021.5 likely retains tremendously broad discretion to not only deny a multiplier, but to substantially reduce a successful CEQA plaintiff’s lodestar fees based on its consideration of legitimate factors. Moreover, the trial court will not be required to “show its math” in detail when reducing an award of fees. Accordingly, a reduction of the lodestar by more than 80% was upheld by the Court here based on the plaintiff’s relative lack of success, excessive attorney hours and rates, the case’s lack of complexity, and other factors. Attorneys for parties either making or opposing a CCP § 1021.5 motion in a CEQA case should definitely read and familiarize themselves with this decision.
Questions? Please contact Arthur F. Coon of Miller Starr Regalia. Miller Starr Regalia has had a well-established reputation as a leading real estate law firm for fifty years. For nearly all that time, the firm also has written Miller & Starr, California Real Estate 3d, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. The firm has expertise in all real property matters, including full-service litigation and dispute resolution services, transactions, acquisitions, dispositions, leasing, construction, management, title insurance, environmental law, and redevelopment and land use. For more information, visit www.msrlegal.com.