While CEQA is a complicated area of law, often criticized as a “plaintiff’s sandbox,” CEQA litigation is not a “free-for-all” immune from malicious prosecution actions when it is unsuccessfully pursued with malice and without probable cause. Such is the teaching of the First District Court of Appeal’s December 28, 2022 published opinion in Charles Jenkins et al v. Susan Brandt-Hawley et al (1st Dist., Div. 2, 2022) 86 Cal.App.5th 1357, which affirmed the trial court’s order denying an anti-SLAPP motion and allowing a malicious prosecution action to proceed against a prominent CEQA attorney and her law firm.
The Underlying CEQA Litigation
The underlying action challenged the Town of San Anselmo’s (Town) approval of the Jenkinses’ project for demolition and replacement of a decrepit one-bedroom home with converted attic, built in 1909, on a residential property also containing a small accessory cottage. The Town found the project categorically exempt from CEQA, and that the existing bungalow was not historically, culturally, or aesthetically significant, and would require much work to be brought up to Code standards.
Even though the Jenkinses’ proposed project met all Town Ordinance standards, various neighbors opposed it, asserting design, privacy and setback concerns in the administrative proceedings before the Town’s planning commission and council, where the neighbors were not represented by legal counsel. The Jenkinses tried to work with their neighbors, and voluntarily modified their already compliant project by further decreasing its height and increasing its setbacks, and reducing the accessory unit to one story. The still-dissatisfied neighbors continued to oppose the project, and pursued an administrative appeal from the Town planning commission to the council; some suggested the need for further evaluation of the structures’ historic value.
Before the final council hearing on the project, the Jenkinses retained an expert consultant, the architectural and preservation firm Page & Turnbull, whose historic resources evaluation confirmed the Town staff’s and planning commission’s conclusions, i.e., that the property was not eligible for listing in the California Register of Historical Resources and was not an historic resource under CEQA. After a lengthy appeal hearing, the Town Council voted 3-1 to uphold the Planning Commission’s approval and findings and its CEQA categorical exemption determination.
An unincorporated association and an individual, now represented by attorney Susan Brandt-Hawley, a well-known and experienced CEQA attorney, and her law firm, filed a writ petition alleging the approval (1) violated CEQA (notwithstanding the categorical exemption for single family homes), and (2) violated the Town’s General Plan and Municipal Code (in six conclusory lines in the petition without pleading any specifics). Real parties Jenkinses’ attorney, Rick Jarvis, wrote a detailed, single-spaced 5-page letter to Brandt-Hawley advising her that the action was legally and factually frivolous – the most meritless CEQA action he could recall in over 25 years of litigating such cases – and was apparently being pursued only to harass and impose litigation costs on his clients in an effort to dissuade them from proceeding with their project. Jarvis urged petitioners to reconsider their position and dismiss the action with the parties bearing their own costs. Brandt-Hawley did not respond or address the many facts detailed in Jarvis’ letter, and the litigation proceeded.
The trial court “easily” denied the petition. After noting Brandt-Hawley did not lay out the record evidence supporting the Town’s approval, as required by law for substantial evidence challenges, it proceeded to dispatch the Municipal Code violation claim on its merits based on the relevant Code section’s plain language. (Petitioners’ argument misconstrued unambiguous Code language referring to a permissive hardship finding for demolitions as being a mandatory finding requirement.)
The trial court also rejected the CEQA claim, which was that the Town had imposed mitigation measures on the approval that rendered the categorical exemption invalid. The trial court found this argument had never been raised in the administrative proceedings, and was thus barred by failure to exhaust; further, even if the merits could be reached, the argument would fail because the “measures” at issue were design features and project components agreed to by the Jenkinses to try to assuage their neighbors’ concerns, not CEQA mitigation measures imposed by the Town to address otherwise significant environmental impacts of the project.
Seemingly undeterred, Brandt-Hawley appealed on behalf of the petitioners, and shortly thereafter filed a petition for a writ of supersedeas in the Court of Appeal seeking to stay the demolition permit. (Brandt-Hawley withdrew the supersedeas petition the same day it was filed, after receiving correspondence from Jarvis apparently indicating that demolition was already substantially underway, rendering the petition moot.) A month later, Brandt-Hawley offered to dismiss the appeal if the Jenkinses would waive their rights to seek recovery of fees and costs. After the Jenkinses refused to do so, and less than a month later, she voluntarily dismissed the appeal the day the opening brief was due, thus finally terminating the action in favor of the Town and the Jenkinses.
The Malicious Prosecution Action And the Court of Appeal’s Opinion
The termination of the underlying CEQA action in the Jenkinses’ favor was followed by their initiation of a malicious prosecution tort action against Brandt-Hawley and her law firm. Malicious prosecution actions seek a damages remedy for defendants harmed by having to defend prior legally untenable litigation brought for an improper purpose. The defendant in the underlying action becomes the plaintiff in the malicious prosecution action and must prove three elements to prevail, i.e., that the underlying action (1) was terminated favorably to the malicious prosecution plaintiff, and was brought (2) without probable cause, and (3) with malice. Lack of probable cause is a question of law determined by the court (when the material facts are not in dispute) under an objective standard, i.e., would a reasonable attorney have brought the action? Malice is shown (usually by circumstantial evidence) when the action is brought for an improper purpose unrelated to prevailing on the merits (such to harass, delay, or cause expense).
The Jenkinses’ lawsuit was met with an anti-SLAPP (Strategic Lawsuit Against Public Participation) motion filed by Brandt-Hawley’s attorneys seeking to strike the complaint. (See, Code Civ. Proc., § 425.16.) The anti-SLAPP motion satisfied the statute’s first requirement since every malicious prosecution action arises from “protected activity,” which is statutorily defined to include “written and oral statements in a prior judicial proceeding.” The motion thus turned on the second statutory factor, i.e., whether the Jenkinses carried their burden to demonstrate through their pleadings and opposition papers a probability of prevailing in the action (which essentially required a minimal showing by the Jenkinses of a legally sufficient claim, construing the evidence most favorably to them).
The trial court denied Brandt-Hawley’s anti-SLAPP motion, finding the Jenkinses had established a sufficient probability of prevailing, and the Court of Appeal affirmed that order upon its de novo review. Noting that probable cause must exist for each claim brought in the underlying action, the Court agreed with the trial judge that the Jenkinses had shown a probability of prevailing on their contentions that the Municipal Code and CEQA claims were legally untenable. As to the former, the Court of Appeal found it significant that Brand-Hawley’s briefing never quoted the actual unambiguous Code text she relied on or fairly presented the record regarding it, and it held that any reasonable attorney would know that an interpretation of the Code’s permissive language as mandatory would be rejected for numerous reasons.
The CEQA claim challenging the Town’s categorical exemption due to the alleged imposition of mitigation measures (i.e., the Jenkinses’ voluntary slight project modifications to address neighbors’ aesthetic and privacy concerns) was also untenable, per the Court, both due to failure to exhaust this specific issue in the administrative proceedings and because any reasonable attorney would conclude the modifications were not CEQA mitigation measures under the relevant holding of Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, a California Supreme Court case in which Brandt-Hawley represented the plaintiffs. Further, the Court added that Brandt-Hawley “fail[ed] to come close to meeting” Berkeley Hillside’s standards for successfully challenging the applicability of the categorical exemption, which was supported by substantial evidence in the record. Per the Court, this “supports the inference that Ms. Brandt-Hawley knew the claims in the petition were untenable, especially given her extensive CEQA and land use experience and the law from Berkeley Hillside. Despite this, she filed the petition, and pushed on in the face of the detailed letter from Mr. Jarvis. Then, and despite that the petition was easily denied by Judge Sweet, she nevertheless appealed, then filed a supersedeas petition (which she immediately dismissed), [and] thereafter pressed for a waiver of fees and costs ultimately to dismiss the appeal.”
In holding that the Jenkinses had also shown a probability of prevailing on the third, and highly factual, element of malice, the Court noted that this element involves the “subjective intent or purpose” of the defendant and “is not limited to actual hostility or ill will toward plaintiff,” but is met where “the proceedings are instituted primarily for an improper purpose[.]” This includes situations where the defendant does not believe the claim may be held valid, or litigates solely to deprive the opponent of a beneficial use of his property or to force a settlement having no relation to the claim’s merits.
Lack of probable cause is relevant to, but standing alone is insufficient to support, an inference of malice. Here, the Court found “the lack of probable cause does not stand alone” because the record contained “abundant other evidence” of malice, including Brandt-Hawley’s failures to respond and indifference to the facts laid out by Jarvis, and her numerous and misleading statements in her writ petition and merits argument in the trial court. The judge denying her anti-SLAPP motion also found Brandt-Hawley failed to present the record fairly and made misleading arguments, which constituted more evidence of malice; further, Brandt-Hawley never presented any evidence of conducting pre-filing legal research, another relevant factor.
In the concluding portions of its opinion, the Court of Appeal commented on three amicus briefs filed in support of Brandt-Hawley by a law firm (Remy Moose Manley, LLP), two law professors, and a Stanford Law School clinic, respectively. Per the Court: “All three amicus briefs suggest that CEQA-related cases should be in essence immune or insulated from malicious prosecution cases, arguing things such as CEQA is too “uncertain” and too “complicated” for there ever to be a malicious prosecution claim. Nothing is cited in support of any such special carve-out.” The Court also pointed to its recent decision in Tiburon Open Space Committee v. County of Marin (2022) 78 Cal.App.5th 700 (my May 23, 2022 post on which can be found here), as relevant, noting that it cited cases and law review articles describing “possible misuse of CEQA actions and the harm they could cause” when the law is “manipulated to be a formidable tool of obstruction.” The Court rejected amici’s contentions that allowing cases like the Jenkinses to proceed will chill advocacy or claims, deter public participation (indeed, it noted the Jenkinses had named only Brandt-Hawley and not her clients, who robustly participated in the administrative proceedings’ public hearings), or reduce environmental protection (with which the underlying CEQA action in reality had nothing to do). The Court noted that allowing malicious prosecutions claims “should allow for a broad degree of freedom in legitimate CEQA advocacy, while also protecting [CEQA] litigation defendants … from having to fend off litigation brought without probable cause and [with] malice.”
Conclusion and Implications
The Court of Appeal concluded its opinion by adopting what it termed as an “apt” description of the case from the Jenkinses’ brief, which described it as “involv[ing] a group of well-off, ‘NIMBY’ neighbors living in one of the most expensive zip codes in the country trying to prevent their fellow neighbor from rebuilding a decrepit and dangerous residence on their property because the neighbors were concerned by privacy and the design aesthetics of the new build…. It had nothing to do with significant or negative environmental effects under CEQA, and the Jenkinses even fell within a clear-cut CEQA categorical exemption for single-family residences.”
The First District’s opinion in this case reflects its sharpening appellate focus on calling out and curbing CEQA litigation abuse, particularly in the context of challenges to housing approvals. (Unmentioned in the opinion, but perhaps worth noting, is that because the project included an ADU and apparently complied with all objective land use standards, it came within the protections of the Housing Accountability Act and the Housing Crisis Act, effectively precluding challenges based on subjective design and aesthetics concerns.) In any event, the published opinion sends a pointed and potent reminder to CEQA plaintiffs’ attorneys that filing legally untenable CEQA claims, with the goal of forcing the abandonment of projects due the financial burdens of litigation delays and costs of defense, carries large downside risks. Indeed, it constitutes an actionable tort – malicious prosecution – from which CEQA claims enjoy no special immunity under the law.
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.