Judge: Curtis A. Kin, Case: 22STCP01143, Date: 2024-10-10 Tentative Ruling

Case Number: 22STCP01143    Hearing Date: October 10, 2024    Dept: 86

Petitioners City of Redondo Beach, City of Carson, City of Torrance, City of Whittier, and City of Del Mar move for an award of attorney fees in the amount of $271,243.02.

I.       Background

On February 7, 2023, petitioners filed the operative Verified First Amended Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief.

On April 22, 2024, the Court granted the petition as to the first cause of action seeking traditional mandamus under CCP § 1085. On May 1, 2024, rather than have the second cause of action for declaratory/injunctive relief sent to an independent calendar court, petitioners dismissed the second cause of action with prejudice. On June 8, 2024, the Court entered judgment in favor of petitioners. Respondents have filed a notice of appeal.

II.      Analysis

Petitioners seek an award of attorney fees pursuant to Code of Civil Procedure § 1021.5. “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….” (CCP § 1021.5.) “[E]ligibility for section 1021.5 attorney fees is established when ‘(1) plaintiffs’ action “has resulted in the enforcement of an important right affecting the public interest,” (2) “a significant benefit, whether pecuniary or nonpecuniary has been conferred on the general public or a large class of persons” and (3) “the necessity and financial burden of private enforcement are such as to make the award appropriate.”’” (Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1214.)

A.           Entitlement to Fees

1.                                    Successful Party

A party “may be considered successful if they succeed on any significant issue in the litigation that achieves some of the benefit they sought in bringing suit.” (Ebbetts Pass Forest Watch v. Department of Forestry & Fire Protection (2010) 187 Cal.App.4th 376, 382.) In determining whether the issue upon which a party prevailed is significant, “the court must critically analyze the surrounding circumstances of the litigation and pragmatically assess the gains achieved by the action.” (Ibid.)

Here, petitioners succeeded in obtaining a judgment directing respondents to cease implementation and enforcement of Senate Bill 9 (“SB 9”) because it is unconstitutional. (See 6/18/24 Judgment ¶¶ 2, 3; compare FAP Prayer for Relief ¶¶ 1, 2 [seeking declaration that SB 9 is unconstitutional and writ of mandate directing respondents to cease implementation and enforcement of SB 9].) Because petitioners prevailed on the essential issue in the litigation, petitioners are the successful parties under section 1021.5. Respondents do not argue otherwise.

2.                                    Enforcement of Important Right Affecting the Public Interest

“In assessing whether an action has enforced an important right, courts should generally realistically assess the significance of that right in terms of its relationship to the achievement of fundamental legislative goals. As to the benefit, it may be conceptual or doctrinal and need not be actual and concrete; further, the effectuation of a statutory or constitutional purpose may be sufficient ... [However,] [t]he benefit must inure primarily to the public. Thus, the statute directs the judiciary to exercise judgment in attempting to ascertain the ‘strength’ or ‘societal importance’ of the right involved.” (Sandlin v. McLaughlin (2020) 50 Cal.App.5th 805, 829, quoting Choi v. Orange County Great Park Corp. (2009) 175 Cal.App.4th 524, 531, internal quotations and citations omitted.)

“Where…the nonpecuniary benefit to the public is the proper enforcement of the law, the successful party must show that the law being enforced furthers a significant policy.” (La Mirada Avenue Neighborhood Assn. of Hollywood v. City of Los Angeles (2018) 22 Cal.App.5th 1149, 1158.) Here, petitioners succeeded in obtaining a ruling that vindicated their right under the state Constitution as charter cities to regulate municipal affairs, including land use and zoning. (4/22/24 Ruling at 5-11.) Respondents do not dispute that the instant litigation enforced an important right affecting the public interest.

“[W]hen an opinion illuminates or emphasizes the contours of existing law and requires an agency to follow it,” the purpose of section 1021.5 to ensure public officials enforce the law is vindicated. (McCormick v. Public Employees’ Retirement System (2023) 90 Cal.App.5th 996, 1008.) In its ruling, the Court determined what statewide concern was implicated by SB 9 and whether the bill was narrowly tailored to avoid unnecessary interference in local governance. (4/22/24 Ruling at 6-11.) The Court found that the bill was not narrowly tailored to address the stated intent of ensuring affordable housing, a matter of statewide concern, as compliance with the bill’s provisions would not necessarily lead to below market-rate housing. (4/22/24 Ruling at 6-11.)

For the foregoing reasons, by obtaining a writ of mandate, petitioners obtained a ruling that addressed the limits of state legislative power over matters reserved to charter cities under the state Constitution.

3.            Significant Benefit Conferred on General Public or Large Class of Persons

“Whether a successful party’s lawsuit confers a ‘significant benefit’ on the general public or a large class of persons is a function of (1) ‘the significance of the benefit,’ and (2) ‘the size of the class receiving [the] benefit.’ [Citation.] In evaluating these factors, courts are to ‘realistic[ally] assess[ ]’ the lawsuit’s ‘gains’ ‘in light of all the pertinent circumstances.’ [Citation.]” (La Mirada, 22 Cal.App.5th at 1158.) “A benefit need not be monetary to be significant. (§ 1021.5 [defining “a significant benefit” as either “pecuniary or nonpecuinary”].) Where, as here, the nonpecuniary benefit to the public is the proper enforcement of the law, the successful party must show that the law being enforced furthers a significant policy. [Citation.]” (La Mirada, 22 Cal.App.5th at 1158.)

“[T]he significant benefit requirement of section 1021.5 requires more than a mere statutory violation.” (Burgess v. Coronado Unified School District (2020) 59 Cal.App.5th 1, 9.) However, a significant benefit can be found “simply from the effectuation of a fundamental constitutional or statutory policy” “from a realistic assessment, in light of all the pertinent circumstances, of the gains which have resulted in a particular case.” (Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 939-40.)

For the reasons stated above with respect to enforcement of an important right, petitioners demonstrate that a significant benefit was conferred on the general public. (La Mirada, 22 Cal.App.5th at 1158 [finding when proper enforcement of law is the public benefit, “the significant benefit and important right requirements of section 1021.5 to some extent dovetail”].) Contrary to respondents’ contention, the writ of mandate does not solely benefit the five charter cities that commenced this action. SB 9 was a law that applied to the entire State. This Court’s interpretation and analysis of SB 9 in its ruling is available to any other charter city evaluating whether the state legislation at issue impermissibly interferes with its municipal affairs.  Indeed, the ruling provides guidance to charter cities and the State alike regarding the articulation of statewide concerns for legislation affecting charter cities and how such legislation must be reasonably related and narrowly tailored to advance any such concerns.

Even though the judgment entered in this proceeding is currently on appeal and SB 9 has not been repealed, the fundamental constitutional policy of granting charter cities control over municipal affairs has nevertheless been effectuated in this case. Further, the matters addressed in this proceeding do not benefit merely the governing bodies of petitioners. They also vindicate the decision of petitioners’ voters by a majority vote to become charter cities and have more control over municipal affairs. (Gov. Code §§ 34457, 34462.)

For the foregoing reasons, the Court finds that a significant benefit was bestowed on the general public or a large class of persons.

4.            Necessity and Financial Burden of Private Enforcement

“[T]he necessity and financial burden requirement really examines two issues: whether private enforcement was necessary and whether the financial burden of private enforcement warrants subsidizing the successful party’s attorneys.” (Whitley, 50 Cal.4th at 1214.)

“The ‘necessity’ of private enforcement looks to the adequacy of public enforcement.”  (Whitley, 50 Cal.4th at 1215, citing Lyons v. Chinese Hosp. Assn. (2006) 136 Cal.App.4th 1331, 1348.)  Here, the petitioner charter cities were required to bring their challenge to SB 9 to protect their municipal affairs; no public agency or enforcement mechanism existed and/or would have sought to vindicate those interests.  Indeed, here, it was the State itself that petitioners contended had violated the “home rule” doctrine of the California Constitution.  Necessarily, only the petitioner charter cities could bring such a challenge on their behalf.  (See Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 941 [“Inasmuch as the present action proceeded against the only governmental agencies that bear responsibility for the subdivision approval process, the necessity of private, as compared to public, enforcement becomes clear”].)

In evaluating the “financial burden of private enforcement,” the Court evaluates the “costs of the litigation” as compared to “any offsetting financial benefits that the litigation yields or reasonably could have been expected to yield.”  (Whitley, 50 Cal.4th at 1215.)  The Court engages in a “cost-benefit analysis” by “compar[ing] the estimated value of the case to the actual cost and mak[ing] a value judgment whether it is desirable to encourage litigation of that sort” by awarding fees.  (Robinson v. City of Chowchilla (2011) 202 Cal.App.4th 382, 402.)  An award of fees “is ‘appropriate except where the expected value of the litigant’s own monetary reward exceeds by a substantial margin the actual litigation costs.’” (Ibid., quoting Whitley, 50 Cal.4th at  1216.)

Here, it is undisputed that petitioners’ actual cost of litigation was over $270,000.  By contrast, petitioners did not seek any particular pecuniary gain in the litigation.  (See Whitley, 50 Cal.4th at at 1217 [“As a logical matter, a strong nonfinancial motivation does not change or alleviate the ‘financial burden’ that a litigant bears”].)  Indeed, it is difficult to quantify what, if any, financial gain petitioners have realized or reasonably could have expected to realize at the outset. 

To the extent petitioners may have stood to advance some personal financial interest in seeking to minimize or eliminate costs resulting from enforcement of SB 9, the Court notes “the purpose of section 1021.5 is not to compensate with attorney fees only those litigants who have altruistic or lofty motives, but rather all litigants and attorneys who step forward to engage in public interest litigation when there are insufficient financial incentives to justify the litigation in economic terms.” (Whitley, 50 Cal.4th at 1211.)  Further, any potential financial benefit to petitioners is entirely speculative. (See Boatworks, LLC v. City of Alameda (2019) 35 Cal.App.5th 290, 310, quoting People v. Investco Management & Development LLC (2018) 22 Cal.App.5th 443, 470 [“Where personal benefits are a step removed from the results of the litigation, the potential financial benefit is indirect and speculative,” allowing trial court to conclude that financial burden requirement under section 1021.5 satisfied].)  For example, the amount of increased costs from SB 9 that petitioners avoided (or hoped to avoid), including costs resulting from increased demands on infrastructure from additional housing units, is unknowable because it is unknown how many homeowners would have sought and obtained approval for additional housing pursuant to SB 9.

Furthermore, success in this proceeding was far from guaranteed.  SB 9 arguably addresses the recognized statewide concern of increasing housing supply generally, and, if the Court had found that addressing the shortage in overall housing supply was SB 9’s concern, the petition might have been denied.  (See 4/22/24 Ruling at 6-7, fn. 2.) Consequently, in proceeding with their challenge to SB 9, petitioners undertook a substantial financial risk to do so, which also bears on the cost-benefit analysis in petitioners’ favor.  (Robinson, 202 Cal.App.4th at 402 [“The monetary yalue of the benefits obtained is discounted by the estimated probability of success to produce the estimated value of the case at the time the vital litigation decisions were being made.  This discounted monetary value represents the benefit in the cost-benefit comparison”].)

Accordingly, petitioners have met their burden of “establishing that [their] litigation costs transcend [their] personal interest.” (See Beach Colony II v. California Coastal Com. (1985) 166 Cal.App.3d 106, 113.)  The Court finds that the necessity and financial burden of private enforcement by petitioners warrants a fee award under CCP § 1021.5.

B.           Reasonableness of Fees Requested

Petitioners move for $271,243.02 in fees. The amount is based on the lodestar and does not include a multiplier. The City claims average hourly rates ranging from $277 to $318 (Lee Decl. ¶ 16; Patel Decl. ¶ 8; Soltani Decl. ¶ 16; Villarreal Decl. ¶ 11.) The asserted hourly rates appear reasonable. Respondents do not object to the reasonableness of the fees on any ground.

The Court has reviewed each of the four declarations submitted in support of the motion and finds that the fees stated therein are reasonable. The Court finds that petitioner is entitled to the lodestar amount of $271,243.02.

III.     Conclusion

The motion is GRANTED. Using the appropriate lodestar approach, and based on the foregoing findings and in view of the totality of the circumstances, the total and reasonable amount of attorney fees incurred for the work performed in connection with the writ petition is $271,243.02. Such fees are awarded to petitioners City of Redondo Beach, City of Carson, City of Torrance, City of Whittier, and City of Del Mar and against respondents Rob Bonta, in his official capacity as California Attorney General, and the State of California.