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Rulings Clarify Standards for Awarding of Attorney's Fees

California appellate courts have recently published two opinions regarding attorney's fees in land use cases. Not surprisingly, the party that won on the merits in the first case also won attorney's fees, while, in the second case, the party that lost on the merits was not awarded attorney's fees even though the losing party argued that it deserved the fees.

An environmental group and a citizens organization won attorney's fees in Center for Biological Diversity v. County of San Bernardino, which involved the approval of an open-air composting facility in the Mojave desert. The trial court determined that the environmental impact report was inadequate under the California Environmental Quality Act because the report did not adequately discuss project alternatives and water supply. The court further ruled that the Center for Biological Diversity and the group Help Hinkley were entitled to attorney's fees. The Fourth District Court of Appeal upheld the trial court's ruling earlier this year (see CP&DR Legal Digest, June 1, 2010) but published the portions of the opinion relating to attorney's fees only last month.

Project proponent Nursery Products, LLC, which defended the lawsuit, appealed the grant of attorney's fees on three grounds: (1) an important right was not enforced; (2) the decision did not confer a significant benefit; and (3) the amount awarded was too high.

Before discussing the merits of Nursery Products' arguments, the Fourth District Court of Appeal, Division One, first emphasized the broad discretion granted to a trial court when determining the amount of attorney's fees. The trial court's decision will be overturned only if it is an abuse of discretion.

The Fourth District quickly dismissed the first two arguments regarding an important right and significant benefit. The court cited several prior cases holding that enforcement of CEQA's procedural requirements satisfies the requirements for an award of attorney's fees under Code of Civil Procedure 1021.5, the private attorney general statute.

The majority of the appellate court's discussion focused on the amount of the attorney's fees $240,000 which the appellate court upheld. Nursery Products' main argument was that the amount covered the litigation of all issues, although petitioners were successful on only two of the claims. The court rejected the contention.

"While a court has discretion to reduce fees in a CEQA case based on degree of success, it is, of course, not required to do so," Presiding Justice Judith McConnell wrote for the court.

Ultimately, the court ruled that the trial court had not abused its discretion and upheld the fees. Additionally, the appellate court held that the project opponents were also entitled to additional attorney's fees for the appeal and remanded that issue back to the trial court to determine the amount.

The second case was Ebbetts Pass Forest Watch v. California Department of Forestry and Fire Protection. In this case, the Fifth Appellate District Court of Appeal faced the question of whether a petitioner that had lost its suit could still claim successful party status for purposes of attorney's fees under Code of Civil Procedure 1021.5.

Two environmental organizations Ebbetts Pass Forest Watch and Central Sierra Environmental Resource Center had challenged three Tuolumne County timber harvest plans approved by the California Department of Forestry and Fire Protection (CDF) for Sierra Pacific Industries. Although the environmental groups won at the appellate court level, that decision was overturned by the state Supreme Court (see CP&DR Legal Digest, July 2008).

The environmental groups argued that although the Supreme Court ruled the timber harvest plans at issue were sufficient, the court's opinion "clarified the law regarding CDF's authority and duty to analyze herbicide use." Based on the groups' logic, they were a "successful party" under 1021.5.

Refusing to extend the definition of "successful party" to the limits urged by the environmentalists, a divided three-judge panel of the Fifth District held that the groups were not entitled to attorney's fees. According to the court, the groups failed to win on any of their primary contentions regarding the timber harvest plans, even if the Supreme Court's opinion on the merits resulted in clarification of the law.

"When the Supreme Court's agreement statements are read pragmatically and in context, they do not support the conclusion that plaintiffs succeeded on any significant issue in the litigation that achieved some of the benefit they sought in bringing suit," Presiding Justice James Ardaiz wrote for the court.

In a dissent, Justice Betty Dawson wrote that the environmental groups deserved an award of attorney's fees because the litigation caused the state Supreme Court create new law regarding CDF authority and the scope of timber harvest plans. The litigation also forced CDF to become more publicly accountable for reviewing the impacts of herbicide use, according to Dawson.

First Case:

Center for Biological Diversity v. County of San Bernardino, No. D056648, 185 Cal.App.4th 866. Originally filed May 25, 2010. Ordered published in full, June 23, 2010.

The Lawyers:
For Center for Biological Diversity: Helen Kang, Golden Gate University Environmental Law & Justice Clinic, (415) 442-6693.

For Nursery Products, LLC: Lisabeth D. Rothman, Brownstein Hyatt Farber Schreck, (310) 500-4600.

Second Case:

Ebbetts Pass Forest Watch v. California Department of Forestry and Fire Protection, No. F058062, CITE. Filed August 10, 2010.

The Lawyers:

For Ebbetts Pass Forest Watch: Thomas W. Lippe, Lippe, Gaffney, Wagner, (415) 777-5600.

For the state: William N. Jenkins, attorney general's office, (415) 703-5527.

For Sierra Pacific: William M. Sloan, Morrison & Foerster, (415) 268-7209.

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