Judge Stephen I. Goorvitch, Case Number: 23STCP03720, Date: 2025-03-21 Tentative Ruling

Judge: Stephen I. Goorvitch, Case: 23STCP03720, Date: 2025-03-21 Tentative Ruling

Los Angeles Unified Department: 82 School District, et al. Judge: Stephen I. Goorvitch

The California School Finance Authority (the “CSFA”) and the State Allocation Board (the “SAB”) (collectively, “Petitioners”) filed this petition for writ of mandate and complaint for injunctive and declaratory relief against the Los Angeles Unified School District (“LAUSD” or the “District”), as well as the Board of Education (the “Board”) and Superintendent (collectively, “Respondents”). In 2011, Petitioners, the District, and a charter school entered into a memorandum of understanding to finance the construction of a new facility. The facility became vacant in 2021, and the District conducted a selection process to identify a successor charter school. The District selected one charter school which eventually withdrew from consideration. The District conducted a second selection process and selected another charter school, but delayed presentation to the Board because the District had a new superintendent. Then, the District elected not to present the issue to the Board and sought to cancel the selection process in order to use the facility for a District-affiliated charter school or another purpose.

Petitioners argued that the purpose of state funding is to build facilities for California’s charter schools. Petitioners argued that Respondents have not complied with the applicable regulation—California Code of Regulations, title 4, section 10157—which allows a school district to take possession of a facility constructed with CSFA funds “only after having demonstrated due diligence in soliciting alternative Charter Schools within the local area to take possession and title of the facility.” The regulation permits Petitioners to decide whether Respondents have exercised sufficient due diligence.

The court previously overruled Respondents’ demurrer and granted Petitioners’ motion for a preliminary injunction preventing use of the facility for anything other than “a qualified charter school.” The court found that section 10157 is not invalid, and Petitioners were not seeking to apply the regulation retroactively. During the writ proceedings, Respondents argued that the due diligence requirement under section 10157, which was added in 2018, is unconstitutional under Article I, Section 9 of the California Constitution, known as the “contracts clause,” and violates the implied covenant of good faith and fair dealing. Because the District is a subordinate political entity of the State, Respondents do not have “standing” to raise these arguments. Therefore, the court denied the petition for writ of mandate. Now, Petitioners seek $206,380.50 in attorneys’ fees against Respondents under Code of Civil Procedure section 1021.5, which they oppose. The motion is granted in the amount of $175,423.43.

An award of attorney fees is appropriate “to a successful party … in any action which has resulted in the enforcement of an important right affecting the public interest.” (Code Civ. Proc. § 1021.5.) The three factors necessary to support an award of attorney fees to a successful party pursuant to section 1021.5 are: “(1) [the] 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.” (In re Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1214.)

Respondents seek judicial notice of four exhibits, which is not opposed. The request is granted under Evidence Code section 452(c).

Petitioner has satisfied the first criteria under section 1021.5, which is enforcement of an important right.

The first prong of the section 1021.5 test … requires a determination of the strength or societal importance of the right involved. That right may be constitutional or statutory, but it must be an important right affecting the public interest—it cannot involve trivial or peripheral public policies. Where, as here, the right vindicated is conferred by statute, “courts should generally realistically assess the significance of that right in terms of its relationship to the achievement of fundamental legislative goals.

(Roybal v. Governing Bd. of Salinas City Elementary School Dist. (2008) 159 Cal.App.4th 1143, 1148 [citations and internal quotations omitted].)

Here, the CSFP gives priority to a successor charter school to occupy a facility, over a school district, when a previous charter school ceases using it. (Ed. Code § 17078.62(b)(2); Cal. Code Regs., tit. 2, § 1859.171(a).) In furtherance of this legislative purpose, the CSFP regulations mandate that school districts complete a fair and competitive process to solicit and select a successor charter school before the school district can occupy the facility. (Cal. Code Regs., tit. 2, § 1859.171(a).) By enforcing the CSFP regulations, Petitioners’ action advanced the fundamental legislative goals, and the public’s interest, “to provide opportunities for teachers, parents, pupils, and community members to establish and maintain schools that operate independently from the existing school district structure.” (Ed. Code § 47601; see generally California School Bds. Assn. v. State Bd. of Education (2010) 191 Cal.App.4th 530, 540.) The court finds that this action enforced important statutory and procedural rights related to the solicitation and selection of a successor charter school to use a CSFP-funded facility. (Ed. Code § 17078.62(b)(2); Cal. Code Regs., tit. 2, § 1859.171.)

Petitioner demonstrates that this action conferred a significant public benefit on the general public or on a large class of persons. A significant benefit may be pecuniary or non-pecuniary and need not be concrete to support a fee award. (See Braude v. Automobile Club of Southern California (1986) 178 Cal.App.3d 994, 1013.)

The trial court determines the significance of the benefit, and the group receiving it, from a realistic assessment, in light of all the pertinent circumstances, of the gains which have resulted in a particular case. The courts are not required to narrowly construe the significant benefit factor. The extent of the public benefit need not be great to justify an attorney fees award. And fees may not be denied merely because the primary effect of the litigation was to benefit the individual rather than the public.

(Indio Police Command Unit Association v. City of Indio (2014) 230 Cal.App.4th 521, 543 [citations and internal quotation marks and internal alterations omitted].)

Here, as discussed above, this action enforced fundamental legislative goals in public education by compelling Respondents to use a fair and competitive selection process to identify a replacement charter school to use the facility. Among other legislative goals, enforcement of the CSFP regulations at issue advances the legislative goals to “improve pupil learning,” “encourage the use of different and innovative teaching methods,” “provide parents and pupils with expanded choices in the types of educational opportunities that are available within the public school system,” and “[p]rovide vigorous competition within the public school system to stimulate continual improvements in all public schools.” (Ed. Code § 47601(a), (c), (e), (g).) The court finds that advancement of these fundamental legislative objectives conferred a significant benefit on the general public. (See Sweetwater Union High School Dist. v Julian Union Elementary School Dist. (2019) 36 Cal.App.5th 970, 991.)

Respondents argue that this action did not enforce an important right affecting the public interest, and did not confer a significant benefit on the general public, “because a charter school would have occupied the Miramar Facility with or without this action, and that charter school could be District-affiliated even if placed through the process detailed in” the CSFP regulations. (Oppo. 5.) According to Respondents, “[t]he sole beneficiary [of the action] will be the charter school selected to occupy the facility.” (Oppo. 9:23-25.) As a factual matter, Respondents do not show that a District-affiliated charter school would necessarily have been placed in the facility, and remained there, if Petitioners had not brought this action. Regardless, Respondents construe both the legislative goals of the CSFP regulations, and the impact of this writ action, too narrowly. While it is possible that a District-affiliated charter school will be selected as the successor of the facility, the Legislature has determined that there are important public benefits from requiring school districts to complete a fair and competitive process to solicit and select a successor charter school. (Cal. Code Regs., tit. 2, § 1859.171(a).) This process benefits the general public by furthering the public’s interests in helping charter schools take root and grow in communities otherwise served by school districts within the public education system. (See Ed. Code § 47601.) Accordingly, the court rejects respondents’ assertion that the action solely benefited the charter school that will be selected to occupy the facility.

Finally, Petitioner demonstrates “the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate.” (Code Civ. Proc. § 1021.5.) “Where, as here, the action is between two public entities … , the question is the necessity of enforcement by one public entity against another public entity.” (Sweetwater, supra, 36 Cal.App.5th at 992 [citation and internal quotation marks omitted].) This action was necessary to enforce the CSFP, especially given the brazen nature of the LAUSD’s actions and the meritless positions they took throughout the negotiations and this litigation. The court is especially troubled that Respondents did not concede after the court’s ruling on Petitioners’ motion for a preliminary injunction, and by the meritless nature of Respondents’ arguments opposing the petition, which demonstrates the necessity of this litigation.[1]

The court also finds that Petitioners did not have an independent financial interest to bring this litigation. Petitioners contributed a loan of $10 million to the purchase of the facility. (See Court’s Order filed October 15, 2024, at 2.) However, that loan would be assumed by the successor charter school that would occupy the facility. (Ibid.) Notably, Respondents have not challenged either of these elements of section 1021.5 in their opposition brief. (Sehulster Tunnels/Pre-Con v. Traylor Brothers, Inc. (2003) 111 Cal.App.4th 1328, 1345, fn. 16 [failure to address point is “equivalent to a concession”].)

Petitioners request an attorneys’ fees award of $206,380.50. The determination of what constitutes a reasonable fee begins with the “lodestar,” which is the number of hours reasonably expended multiplied by the reasonable hourly rate. (See PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1085, 1095.) Generally, the reasonable hourly rate used for the lodestar calculation is the rate prevailing in the community for similar work. (Center for Biological Diversity v. County of San Bernardino, (2010) 188 Cal.App.4th 603, 616.) In making its calculation, the court may rely on its own knowledge and familiarity with the legal market, as well as the experience, skill, and reputation of the attorney requesting fees, the difficulty or complexity of the litigation to which that skill was applied, and affidavits from other attorneys regarding prevailing fees in the community and rate determinations in other cases. (569 East County Boulevard LLC v. Backcountry Against the Dump, Inc., (2016) 6 Cal.App.5th 426, 437.) “A trial court may not rubberstamp a request for attorney fees, but must determine the number of hours reasonably expended.” (Sweetwater, supra, 36 Cal.App.5th at 994.)

“The verified time statements of the attorneys, as officers of the court, are entitled to credence in the absence of a clear indication the records are erroneous.” (Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 396.) The moving party also “can carry its burden of establishing its entitlement to attorney fees by submitting a

declaration from counsel instead of billing records or invoices.” (Lunada Biomedical v. Nunez (2014) 230 Cal.App.4th 459, 487-488.) If the motion is supported by evidence, the opposing party must respond with specific evidence showing that the fees are unreasonable. (Premier Med. Mgmt. Sys. v. California Ins. Guarantee Ass’n (2008) 163 Cal.App.4th 550, 560-63.) The court has discretion to reduce fees that result from inefficient or duplicative use of time. (Horsford, supra at 395.)

Here, Petitioners submit evidence that their attorneys, primarily Deputy Attorney General Darren Shaffer, spent 925 hours litigating this case from May 2023 to the present at hourly rates between $220 and $228. (Mot. 19-20; Shaffer Decl. ¶¶ 4-55, Exh. A.) In total, Petitioners contend that their reasonable lodestar fee for this action is $206,380.50. (Ibid.) The requested hours are supported by a declaration of Deputy Attorney General Shaffer, attached billing records, and Petitioners’ compendium of exhibits, which includes court orders and records documenting Petitioners’ counsel’s work on this case. (See Compendium of Exhibits (“COE”) Exh. B-E [court orders overruling Respondents’ demurrer, granting Petitioners’ application for preliminary injunction, and granting the writ petition]; Id. Exh. F [the District’s discovery responses].)

Based on the court’s knowledge and familiarity with the legal market, as well as the experience, skill, and reputation of the attorneys requesting fees, among other factors, the court finds that the requested hourly rates of $220 to $228 are reasonable (and, in fact, are quite low considering Schaffer’s level of experience). (See 569 East County Boulevard LLC, supra, 6 Cal.App.5th at 437; see Schaffer Decl. ¶ 4 [Schaffer was admitted to the California Bar in 1992].) Respondents have not advanced an argument to the contrary.

Respondents argue that the requested hours and total fee are excessive because: (1) “Petitioners expended a total of 187.5 hours and $41,225 between May 11, 2023 and October 6, 2023, before filing the Petition;” (2) “this action proceeded on a short timeline and did not require extensive briefing or discovery;” (3) “Petitioners’ counsel billed approximately 48% more than Respondents’ counsel;” and (4) Petitioners’ ex parte application for an order to show cause why a preliminary injunction should not issue was unsuccessful and unnecessary.[2]

As an initial matter, the court notes that this matter involved extensive litigation. Respondents demurred to the petition for writ of mandate and complaint, which the court (Beckloff, J.) overruled. Respondents opposed Petitioners’ motion for a preliminary injunction on similar grounds, which the court (Goorvitch, J.) granted, finding a sufficient likelihood that Petitioners would prevail on the merits. Respondents opposed the writ by arguing that section 10157 is unconstitutional under Article I, Section 9 of the California Constitution, known as the “contracts clause.” The court found that because the District is a subordinate entity of the State, Respondents do not have “standing” to raise these arguments. Given the aggressive nature with which Respondents litigated this case, it is not a surprise that Petitioners’ counsel spent significant hours on this case.

Nevertheless, the court agrees with Respondents that some reduction of the lodestar fee is justified for Petitioners’ pre-litigation activities. “[W]hen a successful litigant seeks to recover pre-complaint litigation expenses, the litigant will, as a practical matter, bear a heavier burden of demonstrating how that activity contributed to the success of the litigation.” (Hogar Dulce Hogar v. Community Development Com. of City of Escondido (2007) 157 Cal.App.4th 1358, 1370.) As stated in reply, Petitioners’ counsel incurred 187.5 hours on pre-litigation activities, including researching the CSFP statutes, regulations, and cases; conferring with his clients; drafting and revising the petition and a memorandum of points and authorities in support of the petition; and demanding Respondents’ compliance with the CSFP. (Shaffer Decl. ¶¶ 4-7; Reply 11-19.) The evidence sufficiently shows that some of the pre-litigation activities contributed to the success of the litigation, such as researching and drafting the petition. Nonetheless, the court is not persuaded that all 187.5 hours was reasonably incurred in this action before the petition was even filed. For examples, the evidence shows that Petitioners’ counsel spent a substantial amount of time conferring with his clients before the petition was filed. (Schaffer Decl. ¶¶ 5-7, Exh. A.) On a related point, the court agrees with Respondents’ counsel that there were some inefficiencies in Petitioners’ counsel’s handling of the case.

Based upon the foregoing, the court applies a reduction of 15 percent to the total lodestar, which would reduce the award from $206,380.50 to $175,423.43. Based on the court’s knowledge and familiarity with the legal market, the experience, skill, and reputation of the attorneys requesting fees, the difficulty and complexity of the litigation, among other factors, the court finds that approximately $175,000 represents a reasonable legal fee for Petitioners’ counsel to litigate the case (from pre-litigation to this fee motion). (See 569 East County Boulevard LLC, supra, 6 Cal.App.5th at 437.) Stated differently, the court finds that a fee of $175,000 is commensurate with what the court would expect for a legal action of this nature.

1. The court grants Petitioners’ motion for attorneys’ fees. Respondents shall pay Petitioners a total of $175,423.23 in attorneys’ fees, jointly and severally, within 90 days.

2. The parties shall meet-and-confer and lodge an amended judgment if necessary.

[1] Had Respondents resolved the case after the court issued a preliminary injunction, they would have had a stronger argument in opposition to Petitioners’ motion for attorneys’ fees.

[2] Respondents also argue: “Respondents had legitimate grounds upon which to believe that by pursuing the process set forth in Education Code section 17078.62 and identifying a successor charter school as the District did, the District had satisfied its legal obligations under the law and pursuant to the MOU.” The court resolved this argument in finding that Petitioners are entitled to attorneys’ fees under section 1021.5.