Save Our Heritage Organisation v. City of San Diego

CA Court of Appeals, 4th District, Div. 1, No. D070006, April 27, 2017: No attorney fee award against unsuccessful public interest litigant.

This decision is about whether a public interest advocacy organization should be responsible under California law for the attorney fees of a developer after the advocacy group lost its legal fight against the developer’s project. Save Our Heritage Organisation [sic] (SOHO) lost on appeal on its request for a writ of mandamus against the City of San Diego’s (City) approval of a site development permit for a project in Balboa Park proposed by Plaza de Panama Committee (Committee).  SOHO challenged the City’s decision on multiple grounds related to the project’s effects on the environment, historical resources, and land use. When a trial court directed the City to rescind the project approval, the City didn’t appeal but the Committee and SOHO each appealed aspects of the trial court’s decision. The appellate court reversed the trial court judgment (i.e., upheld the project approval) on the grounds that SOHO had not established the City abused its discretion in approving the project. The Committee then sought its attorney fees from SOHO under Code of Civil Procedure section 1021.5.

Section 1021.5 states in 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 . . . 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.”

The current decision addresses two issues: “whether the Committee, as a project proponent, may obtain a section 1021.5 attorney fees award and, if so, whether the court may impose such an award against SOHO.” The court concluded that while “a project proponent may obtain a section 1021.5 attorney fees award if the project proponent satisfies the award’s requirements …. SOHO is not the type of party against whom the court may impose such an award because SOHO did nothing to compromise public rights.”

The court said that Section 1021.5 codifies a California common law doctrine that recognized “that privately initiated lawsuits are often essential to the effectuation of the fundamental public policies embodied in constitutional or statutory provisions, and that, 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.” The court determination of whether to award fees under section 1021.5 to the “successful party” applies a three-prong test: (1) did the litigation result in the enforcement of an important right affecting the public interest, (2) was a significant benefit conferred on the general public or a large class of individuals, and (3) does the necessity and financial burden of private enforcement renders the award appropriate.

SOHO did not dispute that the Committee satisfied the three-prong test and the court found that the Committee’s status as a project proponent does not categorically bar it from obtaining a section 1021.5 attorney fees award if it otherwise satisfies the award’s requirements. Nevertheless the court needed to determine whether the award in this situation came within an exception to 1021.5 established by the California Supreme Court when, even though all three factors are satisfied, “a section 1021.5 fee award may not be imposed on a litigant who did nothing to adversely affect the public interest.” The CA Supreme Court recognized this exception in part because the statutory language suggests that the Legislature had in mind “that those on whom attorney fees are imposed have acted, or failed to act, in such a way as to violate or compromise … [an important public] right, thereby requiring its enforcement through litigation.”

Thus, the court said, the question to ask in this type of case is “whether the litigation was detrimental to the public interest because it sought to curtail or compromise rights.” If the litigation was not detrimental to such rights, then attorney fees should not be awarded to the project proponent.

The court then found that, “By filing the petition for writ of mandamus, SOHO did not seek to curtail or compromise important public rights or exonerate SOHO’s violation of such rights. [citation omitted] Rather, the litigation sought to correct what SOHO perceived to be violations of state and local environmental, historic preservation, and land use laws by the City. While ultimately unsuccessful, the litigation was precisely the type of enforcement action section 1021.5 was enacted to promote. [citation omitted] We, therefore, cannot conclude the litigation was detrimental to the public interest such that imposing a fee award on SOHO would be appropriate.” Accordingly, the court held that SOHO did not have to pay attorney fees to the Committee.

Decision available at http://www.courts.ca.gov/opinions/documents/D070006.PDF.

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