County Sanitation Dist. No. 2 v. Responsible Biosolds Mgmt.

Filed 3/7/07 County Sanitation Dist. No. 2 v. Responsible Biosolds Mgmt. CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

APPEAL from a judgment of the Superior Court of Tulare County. Paul A. Vortmann, Judge.

Lewis Brisbois Bisgaard & Smith, Daniel V. Hyde and Paul J. Beck for Plaintiff, Cross-defendant and Appellant County Sanitation District No. 2 of Los Angeles.

Rockard J. Delgadillo, City Attorney, Christopher M. Westhoff, Assistant City Attorney, and Keith W. Pritsker, Deputy City Attorney, for Plaintiff, Cross-defendant and Appellant City of Los Angeles.

Borton, Petrini & Conron and Roger A. Parkinson for Plaintiff and Appellant Responsible Biosolids Management, Inc.

Griswold, LaSalle, Cobb, Dowd & Gin, Robert M. Dowd, Raymond L. Carlson and Kristine M. Howe for Plaintiff and Appellant Southern California Alliance of Publicly Owned Treatment Works.

Bernard C. Barmann, Sr., County Counsel, Charles F. Collins, Deputy County Counsel; Hogan Guiney Dick and Michael M. Hogan for Defendant, Cross-complainant and Respondent and for Defendant and Respondent.

No appearance for Plaintiff, Cross-defendant and Respondent Orange County Sanitation District.

No appearance for Plaintiff and Respondent California Association of Sanitation Agencies.

No appearance for Interveners and Respondents Arvin-Edison Water Storage District, Cawelo Water District and West Kern Water District.

-ooOoo-

Appellants contend that the superior court abused its discretion when it denied their motions for attorney fees brought under the private attorney general doctrine set forth in Code of Civil Procedure section 1021.5.^[1] Appellants are four of the six parties that obtained a partial reversal in County Sanitation Dist. No. 2 v. County of Kern (2005) 127 Cal.App.4th 1544. They argue their lawsuit enforced an important right and provided a significant benefit to the general public because this court ruled that Kern County violated the California Environmental Quality Act (CEQA) (Pub. Resources Code,  21000 et seq.) when it adopted a sewage sludge ordinance without preparing an environmental impact report (EIR).

In the first appeal, appellants obtained a victory with respect to (1) the CEQA violation and (2) this courts conclusion that the ordinances impact fee of $3.37 per ton of sewage sludge was invalid to the extent that the funds generated were used for purposes that violated Vehicle Code section 9400.8. Appellants lost other statutory and constitutional challenges that sought to invalidate the ordinance. After the first appeal was remanded, appellants filed their motions for attorney fees.

The superior court denied the motions after determining that each appellant entitys incentive to pursue the litigation was not out of proportion to its litigation costs. The primary issue raised on appeal concerns the application of the statutory requirement that the necessity and financial burden of enforcement are such as to make the award appropriate. ( 1021.5.)

We conclude that the superior court correctly applied the necessity and financial burden requirement. Specifically, the financial burden requirement mandates an evaluation of a litigants financial stake in the outcome of the litigation measured by the results expected at the time of important litigation decisions, not the results actually achieved. In addition, we conclude that the superior court made findings of fact that were supported by substantial evidence. Therefore, it did not abuse its discretion.

Accordingly, the order denying the motions for attorney fees is affirmed.

FACTS AND PROCEEDINGS

Parties

The appellants in this matter are County Sanitation District No. 2 of Los Angeles County (LA County Sanitation District), the City of Los Angeles (City of LA), Responsible Biosolids Management, Inc. (RBM), and the Southern California Alliance of Publicly Owned Treatment Works (SCAP).

Orange County Sanitation District and the California Association of Sanitation Agencies (CASA) were plaintiffs in the underlying lawsuit, but are not appellants in this appeal. Orange County Sanitation District and CASA agreed with the County of Kern to a mutual waiver of attorney fees.

The respondents appearing in this matter are the County of Kern and the Kern County Board of Supervisors (collectively, County).

LA County Sanitation District is a sanitation district organized and existing under the County Sanitation District Act, Health and Safety Code section 4700 et seq.

City of LA is a municipal corporation and a charter city. Its department of public works operates a bureau of sanitation.

RBM is a California corporation in the business of applying biosolids to agricultural land as a fertilizer and soil amendment. At the time the petition for writ of mandate was filed in 1999, RBM had contracts or subcontracts with municipalities including City of LA, the City of San Bernardino, the East Bay Municipal Utilities District and the City of Taft to apply Class B biosolids to agricultural land in Kern County.

SCAP is an association of public agencies organized and existing as a California nonprofit public benefit corporation. SCAPs public agency members are located in seven counties (Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara and Ventura).

Petition and Judgment

On October 19, 1999, the Kern County Board of Supervisors adopted Ordinance No. G‑6638 (Ordinance G‑6638), which changed how County regulated the land application of sewage sludge in Kern County. Ordinance G‑6638 had two stages. The first stage, which lasted three years, allowed the application of Class B sewage sludge on sites that had already been approved, but it precluded the approval of any new sites. The second stage was scheduled to become effective on January 1, 2003, and allowed only exceptional quality (EQ) sewage sludge^[2]to be applied to land in Kern County.

In November 1999, the four appellants, along with Orange County Sanitation District and CASA, filed a petition for writ of mandate and complaint for injunction and declaratory relief that challenged Ordinance G‑6638 on a number of grounds. The first cause of action in the petition alleged County violated CEQA by approving the negative declaration and finding that Ordinance G‑6638 would not have significant environmental impact. The second cause of action asserted the adoption of Ordinance G‑6638 was an invalid exercise of police power and a violation of the commerce clause. The third cause of action alleged the imposition of the biosolids impact fee was unconstitutional and otherwise invalid on a number of grounds.

In March 2000, County of Kern filed a cross-action against LA County Sanitation District, City of LA, and Orange County Sanitation District that alleged those entities violated CEQA when they made changes to their sewage sludge disposal programs.

In March 2003, the superior court entered a judgment that denied relief on all of the causes of action asserted by all of the parties. Both sides appealed the judgment. In County Sanitation Dist. No. 2 v. County of Kern, supra, 127 Cal.App.4th 1544, this court reversed the judgment in part and affirmed it in part.

In that decision, this court determined that (1) Ordinance G‑6638 did not exceed Countys police power or violate the commerce clause, (2) County should have prepared an EIR before approving Ordinance G‑6638, and (3) the $3.37 per ton biosolids impact fee was invalid to the extent that the funds generated were used for purposes that contravened Vehicle Code section 9400.8. Based on these determinations, the case was remanded for further proceedings and each party was to bear its own costs on appeal. (County Sanitation Dist. No. 2 v. County of Kern, supra, 127 Cal.App.4th at pp. 1638-1639.) Remittitur was issued on June 2 , 2005.

Motions for Attorney Fees

Each appellant filed a separate motion for attorney fees on September 9, 2005.

LA County Sanitation District

LA County Sanitation Districts motion for attorney fees requested $428,927.50 for 2,487 hours of attorney and paralegal time incurred from September 1999 through April 2005. During this period, the rates charged for paralegal time ranged from $80 to $85 per hour, the rates charged for associate attorneys ranged from $135 to $165, and the rates charged by partners in the law firm ranged from $175 to $205. A declaration submitted in support of LA County Sanitation Districts claim for attorney fees included copies of 150 pages of monthly bills sent to LA County Sanitation District by the law firms it employed.

In its motion, LA County Sanitation District argued that the result of this litigation, and the financial burden imposed upon [LA County Sanitation District] in litigating, transcend any concrete interest peculiar to [LA County Sanitation District] in the outcome.

City of LA

City of LAs motion for attorney fees sought an award of $99,599.25 for a total of 252.15 hours of attorney time expended by the Office of the City Attorney from September 1999 through June 2005. City of LAs fee calculation used an hourly rate of $395 per hour for all time expended by attorneys from the Office of the City Attorney. This rate was chosen because it was the hourly rate charged to City of LA by Carlyle Hall, a partner of the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP, which was hired by City of LA to provide its Department of Airports with specialized land use and environmental legal services in another matter. That firms billing rates were $325 per hour for senior counsel and $250 per hour for associates.

The declaration of a deputy city attorney submitted in support of City of LAs claim for attorney fees included an eight-page exhibit that provided the date, description of work done, and amount of time spent by the attorneys for City of LA who worked on the case.

SCAP

SCAP filed a motion requesting attorney fees in the amount of $176,113.75. The motion sought the recovery of 1,297 hours of attorney, paralegal, law clerk and legal staff time spent on the litigation from late 1999 through May 2005 by the law firm of Griswold, LaSalle, Cobb, Dowd and Gin, LLP. The rates charged by (1) the attorneys acting as co-lead counsel ranged from $155 to $215 per hour, (2) the law firms associate attorneys ranged from $125 to $145 per hour, and (3) the paralegals ranged from $30 to $80 per hour.

The declaration submitted in support of SCAPs motion included a 58-page exhibit that compiled the law firms time records and showed who worked on the case and the total time each person billed on the case. For example, the two attorneys who acted as co-lead counsel recorded approximately 826 billable hours, which totaled $144,145.70.

RBM

RBM submitted a declaration of Steve Stockton, a vice-president of the company, describing RBM as a small service company with few assets. Mr. Stockton stated that the cost of paying its attorneys has been a burden for RBM and we have taken the risk that we would not be reimbursed for [that cost]. Mr. Stockton also stated that at the times RBM explored the possibility of dropping out of the lawsuit because of the financial burden it was causing to us, attorneys for other plaintiffs with whom I have spoke [sic] urged us to remain in the lawsuit, as a non-governmental plaintiff, which we did.

The declaration of Mr. Stockton asserts that RBM paid in full all of the legal bills received from the law firms hired to represent it in this matter. The aggregate amount of attorney fees paid by RBM was $213,762.83. An attorney who represented RBM in the litigation stated that discounting the amount to $152,077.47 would fairly represent the attorney fees as to which RBM was successful under section 1021.5.

On April 2, 2002, in support of a motion for summary adjudication in the underlying action, RBMs president, Jonathan L. Coffin, filed a declaration that stated (1) RBM had 11 employees, (2) all of RBMs income came from applying Class B biosolids to agricultural land located in Kern County, (3) its income came from an existing contract with the City of Los Angeles that had nine years left on it, (4) if Ordinance G‑6638 became effective on January 1, 2003, it would cause the loss of all of RBMs income, and (5) the loss of income most likely would damage irreparably RBMs company and cause it to go out of business.

Opposition to Motions

On October 4, 2005, County filed an opposition to appellants motions for attorney fees. County argued that appellants did not fulfill the requirements for an award of attorney fees under section 1021.5. Specifically, County argued that appellants cannot establish, and indeed they have not even tried to show, that it was necessary for six petitioners with separate attorneys to prosecute this action. They also have not offered any evidence to show the financial burden of this action transcends their personal stakes.

County presented facts in support of its opposition by requesting that the superior court take judicial notice of a list of SCAPs officers and directors and, as well, six documents from the underlying action, including (1) two declarations of employees of sanitation agencies, (2) the declaration of RBMs president filed on April 2, 2002, (3) certain pages from appellants trial memorandum, and (4) the initial pages of the petition for writ of mandate.

Superior Courts Order

On November 29, 2005, the superior court filed a six-page written order denying all motions for attorney fees. The superior courts order contained the following findings.

First, RBM was in this lawsuit to protect its business, and therefore, its personal interest in the costs of litigation was not out of proportion to its individual stake in the matter.

Second, LA County Sanitation District, City of LA, and County had competing personal interests and each had its own constituents to protect. Each entitys incentive in bringing this litigation was not out of proportion to its litigation costs, regardless of any benefit ultimately received.

Third, the interests of SCAP were no different than its member agencies, the public agencies [that] generate biosolids.

Based on the foregoing findings, the superior court concluded that there was no reason under section 1021.5 to award attorney fees to any party.

Appellants filed timely notices of appeal.

Judicial Notice

On its own motion, this court took judicial notice of the entire appellate record from County Sanitation Dist. No. 2 v. County of Kern, No. F043095, the earlier appeal in this litigation. (See Evid. Code,  452, subd. (d) [court records], 459 [judicial notice by appellate court].) The appellate record included an administrative record of 25,739 pages relating to the adoption of Ordinance G‑6638. The superior court was familiar with these materials when it ruled on the motion for attorney fees.

This court also took judicial notice of the October 24, 2006, and November 20, 2006, decisions of the United States District Court, Central District of California in City of Los Angelesv. County of Kern, No. CV 06-5094GAF(VBKx). The October decision is available through Lexis as 2006 U.S. Dist. LEXIS 81417 and in WestLaw as 2006 WL 3073172. The November decision is City of Los Angelesv. County of Kern (C.D.Cal. 2006) 462 F.Supp.2d 1105. Based on the responses of the parties to our taking judicial notice of the federal decisions, we did not use facts from those decisions in reaching our decision in this appeal.

DISCUSSION

I. Attorney Fee Awards under the Private Attorney General Doctrine

Californias private attorney general doctrine of attorney fees was developed in judicial decisions and then codified by the Legislature in 1977 with the enactment of section 1021.5.^[3](Stats. 1977, ch. 1197,  1.) A 1993 amendment expanded the situations where fee awards were permissible to include certain cases brought by one public entity against another public entity. (Stats. 1993, ch. 645,  2.)

Section 1021.5 authorizes the award of attorney fees (1) to a successful party, (2) in an action that has resulted in the enforcement of an important right affecting the public interest, (3) if a significant benefit has been conferred on the general public or a large class of persons, and (4) the necessity and financial burden of enforcement of that right are such as to make the award appropriate. (City of Hawaiian Gardens v. City of Long Beach (1998) 61 Cal.App.4th 1100, 1112.)

The private attorney general doctrine was created because 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. (Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 933.) More recently, the California Supreme Court stated that the purpose of section 1021.5 is to prevent the lack of legal resources from silencing or stifling worthy claimants by financially rewarding attorneys who successfully prosecute cases in the public interest. (Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 568 [endorsing use of catalyst theory to determine if party was successful in the litigation].)

A. Standard of Review

Appellate courts review the superior courts ruling on a motion for attorney fees under section 1021.5 for an abuse of discretion. (Graham v. DaimlerChrysler Corp., supra, 34 Cal.4th at p. 578.) Under the abuse of discretion standard, the appellate court conducts a two-step inquiry.

First, did the superior court apply the proper legal standards in reaching its determination? (Lyons v. Chinese Hospital Assn. (2006) 136 Cal.App.4th 1331, 1344.) If the superior courts order is not consistent with the applicable principles of law, the order necessarily falls outside the scope of the superior courts discretion. (Ibid.) In completing this step of the inquiry, an appellate court must pay particular attention to the superior courts stated reasons for denying fees. (Hewlett v. Squaw Valley Ski Corp. (1997) 54 Cal.App.4th 499, 544.)

If the superior court applied the proper legal standards, the second step of the inquiry requires the appellate court to consider whether the result was within the range of the superior courts discretion. (Hewlett v. Squaw Valley Ski Corp., supra, 54 Cal.App.4th at p. 544.)

B. Financial Burden

The California Supreme Court addressed the financial burden requirement in Woodland Hills Residents Assn., Inc. v. City Council, supra, 23 Cal.3d 917. The court stated the requirement is met when the cost of the claimants legal victory transcends its personal interest. (Id. at p. 941.) Thus, a cost-benefit analysis is employed to compare the financial burdens and incentives involved in bringing the lawsuit. (Press v. Lucky Stores, Inc. (1983) 34 Cal.3d 311, 321.) In other words, the financial burden requirement is met when the cost of litigation is out of proportion to the litigants stake in the litigation. (Families Unafraid to Uphold Rural El DoradoCounty v. Board of Supervisors (2000) 79 Cal.App.4th 505, 515.)

1. Dispute over relevant financial incentives

The parties to this appeal disagree over the scope of financial incentives that must be weighed against the costs of the litigation. This disagreement raises a question of law about the appropriate legal standard that should be applied when determining whether the financial burden requirement has been met.

On the one hand, appellants contend that only the benefits actually attained are compared against the costs of litigation. They rely on a decision that referred to the gains actually attained and the monetary value of the benefits obtained when discussing the financial incentives of bringing the litigation. (Los Angeles Police Protective League v. City of Los Angeles (1986) 188 Cal.App.3d 1, 9 (LAPPL).) Applying this approach here, appellants contend that only the benefits they actually derived from their CEQA cause of action should be weighed against the costs of litigation.

On the other hand, County argues that appellants entire financial stake in the litigation was a motivating factor and is therefore relevant to determining appellants financial incentives or stake in the litigation. Under this view, the superior court would consider the benefits actually achieved as well as the potential benefits that might have been attained but were not.

This dispute over the scope of the relevant financial incentives is critical to the outcome of this appeal. The incentives are much greater under the broader view adopted by County. Specifically, the appellants financial stake in the litigation would include their interest in (1) invalidating Ordinance G‑6638s ban on the land application of Class B biosolids and (2) recovering all or part of the impact fee collected on biosolids applied to land in Kern County after January 1, 2000.

2. Existence of relevant financial incentives at the time of the decision

Appellants argument that a litigants personal stake in the litigation should be measured by the results actually attained is not new. It was considered and rejected by the First Appellate District in Beasley v. Wells Fargo Bank (1991) 235 Cal.App.3d 1407, 1414 (Beasley) and again in Satrap v. Pacific Gas & Electric Co. (1996) 42 Cal.App.4th 72, 79 (Satrap). Both the Satrap and Beasley decisions considered the Second Appellate Districts opinion in LAPPL, which discussed the financial incentives of litigation as follows:

At the time each filing, litigation and appeal decision is being made, the litigants must discount any monetary benefits they hope to achieve by the probability of success. Thus, if success would yield them, the litigant group, an aggregate of $10,000 but there is only a one-third chance of ultimate victory they wont proceedas a rational matterunless their litigation costs are substantially less than $3,000. (LAPPL, supra, 188 Cal.App.3d at p. 9, italics added.)

We recognize that the Second Appellate District also used languagesuch as benefits obtained and gains actually attainedthat suggested the inquiry into financial benefits was limited to the results achieved. (LAPPL, supra, 188 Cal.App.3d at p. 9.) This language can be explained by the fact that the plaintiffs in LAPPL attained all of the benefits they sought.

The city council, in LAPPL, had adopted a $5 monthly parking fee for city employees using a city-leased parking lot without complying with statutory meet-and-confer provisions. (LAPPL, supra, 188 Cal.App.3d at p. 5.) Affected employees filed an unfair employee relations practice charge with the citys employee relations board. (Ibid.) The board agreed with the employees and ordered the city to stop charging the fee, return fees already paid, and comply with the meet-and-confer requirement before reimposing the fee. (Ibid.) The city council chose not to comply with the boards order and was sued by the Police Protective League and other employee groups. The plaintiffs sought a writ of mandate to compel the city council to comply with the boards order. The trial court denied the writ and the Second Appellate District reversed, holding that the city did not have the authority to disobey the boards order. (Id. at pp. 5-6.) Thus, the plaintiffs attained all of the benefits they sought by pursuing the writ when the court compelled the city to comply with the boards order.

The appellate court in LAPPL did use phrases such as benefits obtained and gains actually attained in describing the process that the trial court should have used to analyze the facts of that case. In our reading of that decision, however, the court was not stating a legal principle in the abstract when it referred to benefits obtained and gains actually attained. Thus, we will not take that language out of its factual context and treat it as establishing a rule of law that applies to all requests for attorney fees under section 1021.5. Instead, that language should be limited to factual situations like the one presented in LAPPLthat is, where the litigant seeking attorney fees obtained all of the relief sought in the underlying lawsuit.

Based on Beasley, Satrap, and LAPPL, we conclude the correct approach is to measure a litigants stake in the outcome of the litigation based on the results expected at the time of important litigation decisions, not based on partial relief actually achieved.^[4] The rationale for this conclusion was stated by the court in Satrap:

The reason for the focus on the plaintiffs expected recovery at the time litigation decisions are being made, is that section 1021.5 is intended to provide an incentive for private plaintiffs to bring public interest suits when their personal stake in the outcome is insufficient to warrant incurring the costs of litigation. (Satrap, supra, 42 Cal.App.4th at p. 79.)

Furthermore, our conclusion is consistent with the principle that application of the financial burden requirement involves a realistic and practical comparison of the litigants personal interest with the cost of suit. [Citations.] (Families Unafraid to Uphold Rural El Dorado County v. Board of Supervisors, supra, 79 Cal.App.4th at p. 515.) The use of hindsight is not a realistic way to evaluate a litigants incentives to pursue litigation.^[5]

In summary, because a party makes litigation decisions without knowing the benefits it ultimately will obtain, a realistic and legally correct analysis of that partys financial incentives cannot ignore benefits that might have been attained but were not.

II. Application of Financial Burden Requirement

A. LA County Sanitation District

1. Arguments and evidence

LA County Sanitation District contends that a court can only assess the litigants practical level of interest by comparing the monetary value of the benefits obtained by the litigant to the costs incurred in obtaining those benefits. As discussed, this contention misstates the law. The comparison of the costs incurred to the benefits actually obtained is too narrow because it excludes many of the benefits that LA County Sanitation District sought to obtain by pursuing the litigation. (Satrap, supra, 42 Cal.App.4th at p. 79.)

In this litigation, LA County Sanitation District sought to invalidate the restrictions Ordinance G‑6638 placed on the land application of sewage sludge by arguing that the restrictions (1) violated Water Code section 13274, (2) violated the commerce clause, and (3) exceeded the police powers granted to County under the California Constitution. The prospects of invalidating Ordinance G‑6638 created a powerful financial incentive for LA County Sanitation District to pursue the litigation.

The March 29, 2002, declaration of Robert Horvath, the head of the Technical Services Department of LA County Sanitation District, which was submitted to support a motion for summary adjudication, clearly identified these financial incentives. LA County Sanitation Districts contracts for the application of biosolids to land in Kern County allowed the district to dispose of biosolids at a cost of $26.50 to $28.50 per wet ton. Under those contracts, LA County Sanitation District shipped an average of approximately 143,000 wet tons per year. The prices in proposals to replace the Kern County contracts ranged from $35 to $39.50 per wet ton.

Based on these figures, the implementation of Ordinance G‑6638 had the potential of costing LA County Sanitation District between $6.50^[6]and $13^[7]more per wet ton. An estimate of the yearly increase in total cost can be calculated by selecting a price in the middle of this range and multiplying it by the number of tons shipped per year. Using this calculation, Ordinance G‑6638 could have increased LA County Sanitation Districts yearly costs by $1,394,250.^[8] This figure is consistent with LA County Sanitation Districts trial memorandum, which estimated that the increase in annual cost would range from $900,000 to $1.8 million.

In addition, Horvaths declaration stated that LA County Sanitation District had investigated the alternative of composting the biosolids it generated and that constructing facilities needed for increased treatment through composting have been estimated to cost tens of millions of dollars and require several years to complete permitting, design and construction.

Another financial incentive for LA County Sanitation District to pursue the litigation concerns the biosolids impact fee of $3.37 per ton of biosolids applied to land within Kern County. Assuming that 143,000 tons of biosolids generated by LA County Sanitation District were applied to land in Kern County during 2000 (the first year the fee was in effect), the impact fee would have increased the cost of that land application by a total of $481,910.

The LA County Sanitation Districts reply to Countys opposition to the motion for attorney fees addressed its financial incentives as follows:

The District fully acknowledges that there is a potentially adverse financial impact from the Countys ban on Class B biosolids. But that is not the issue. The outcome of this case was the enforcement of the requirement of CEQA for the County to prepare an EIR and to consider the full environmental consequences of its ordinance before adopting it. The Districts stake in that outcome is the same as the public in general, no more, no less. The Countys argument concerning the Districts financial stake in the outcome is also erroneous. Even though the District prevailed in this case, the District has not thereby avoided the financial consequences that the County claims were at stake.

LA County Sanitation District has based its arguments on an erroneous view of the applicable legal principles, and it has not attempted to (1) quantify the financial benefit that it would have achieved if it prevailed in its attempts to invalidate Ordinance G‑6638 or recover the biosolids impact fee or (2) estimate the probability of succeeding on those claims. Furthermore, LA County Sanitation District presented no evidence that showed how the expected benefits or the probability of success changed over the course of the litigation when it had to make vital litigation decisions.

A specific example of the financial benefits LA County Sanitation District might have realized by bringing the lawsuit involves the relief that might have been achieved under the CEQA claim. If the superior court had ruled in favor of LA County Sanitation District on the CEQA claim when it entered its written ruling on November 22, 2000, the superior court might have invalidated the approval of Ordinance G‑6638.

As we observed in our earlier opinion in this lawsuit, both County and LA County Sanitation District stated they were unaware of any published case in which (1) a negative declaration that related to the adoption of an ordinance, regulation or general order was ruled invalid under CEQA, and (2) the appellate court did not invalidate the ordinance, regulation or general order itself. (County Sanitation Dist. No. 2 v. County of Kern, supra, 127 Cal.App.4th at pp. 1604-1605.) Conversely, we cited two California Supreme Court cases in which ordinances were invalidated for noncompliance with CEQA. (See Friends of Sierra Madre v. City of Sierra Madre (2001) 25 Cal.4th 165, 196 [appropriate relief for noncompliance with CEQA was invalidation of ordinance; ordinance not allowed to remain in effect pending compliance with CEQA]; No Oil, Inc. v. City of Los Angeles (1974) 13 Cal.3d 68, 88 [superior court directed to set aside three ordinances].)

Therefore, there was a strong probability that if the superior court had ruled in favor of LA County Sanitation District on its CEQA claim, the relief ordered would have included invalidation of Ordinance G‑6638.^[9] Although the heightened biosolids treatment standards might have been readopted after compliance with CEQA, the effective date of the heightened treatment standards might have been delayed. Also, the EIR process might have resulted in the approval and adoption of an ordinance that was modified in a way that reduced LA County Sanitation Districts cost of disposal. Although these potential benefits were not realized, it does not mean they were not part of the personal financial interest that LA County Sanitation District had at stake when it included the CEQA claim in its lawsuit.

2. Analysis of superior courts decision

First, the superior court applied the correct principle of law and considered the incentives that existed when the litigation was brought, not the result of the litigation. Second, the findings made by the superior court when it applied this principle of law are supported by substantial evidence.

LA County Sanitation Districts potential benefits included (1) avoiding approximately $900,000 to $1.8 million annually in increased costs, (2) significant capital outlays to upgrade its treatment process, and (3) recovering at least three years worth of biosolids impact fees which cost about $482,000 each year. Assuming LA County Sanitation District accurately estimated the attorney fees it would incur in the litigation, it would have weighed fees of $428,927.50 against the potential for reducing its future costs and recovering all or part of the biosolids impact fee. Neither the parties nor the superior court explicitly reduced these annual financial benefits to a lump sum and then multiplied that sum by an estimate of the probability of success. Nevertheless, the superior courts findings regarding the lump sum and the probability of success that are implicit in its finding that LA County Sanitation Districts incentive in bringing this litigation was not out of proportion to its litigation costs are reasonable under the circumstances presented.

Therefore, the superior court did not abuse its discretion when it denied the motion for attorney fees by LA County Sanitation District.

B. City of LA

City of LAs position regarding the denial of attorney fees is similar to that of LA County Sanitation District. In addition, City of LA argues: The potential to benefit financially, however, is insufficient to deny recovery as seen in cases where the specific relief sought is the enforcement of a procedural right. The cases cited by City of LA to support this argument are Baggett v. Gates (1982) 32 Cal.3d 128, Otto v. Los Angeles Unified School District (2003) 106 Cal.App.4th 328, and LAPPL, supra, 188 Cal.App.3d 1.^[10] Our earlier discussion of how the expected financial benefits are weighed against the expected costs of the litigation is sufficient to dispose of City of LAs argument regarding the potential to benefit from the litigation.

The record establishes that City of LA, like LA County Sanitation District, had a significant stake in the outcome of the litigation. The July 2002 declaration of Judith A. Wilson, General Manager of the Bureau of Sanitation, Department of Public Works of the City of LA, sets forth the following facts that are relevant to City of LAs financial incentives to pursue the litigation.

City of LA produced approximately 292,000 wet tons of Class B biosolids per year that were applied to agricultural land in Kern County owned by City of LA. City of LA had begun the process of converting to the production of Class A biosolids and expected to spend approximately $16 million to complete the conversion. The production of Class A biosolids would cost City of LA $10.78 more per ton than the cost of producing Class B biosolids. As backup methods for the disposal of Class B biosolids, City of LA investigated landfilling and land application in an out-of-state location. These two methods would have cost City of LA $54.44 and $16 more per ton, respectively, than what it was incurring to dispose of Class B biosolids.

The foregoing financial interests, coupled with the incentive to recover all or part of the biosolids impact fee, created a significant financial incentive for City of LA to pursue the lawsuit. Accordingly, we agree with the superior courts statement that City of LAs incentive in bringing this litigation was not out of proportion to its litigation costs, regardless of any benefit ultimately achieved.^[11] Implicit in the superior courts statement is a finding of fact that City of LA had a financial incentive to include the CEQA claim in the lawsuit because, as discussed earlier, the claim might have delayed the implementation of the prohibition on the land application of Class B biosolids. We will not disturb this implied finding of fact on appeal. Furthermore, this potential relief distinguishes this case from those that involve only the enforcement of procedural rights.

C. RBM

The superior court explicitly found that RBM was in this lawsuit to protect its business, and therefore, its personal interest in the costs of litigation was not out of proportion to its individual stake in the matter. RBM attacks this finding on a number of grounds.

1. Dollar-to-dollar comparison

In its appellate brief, RBM asks how is a court to decide rationally whether a specified dollar amount of attorney fees is in an appropriate proportion to something else unless that is quantified into dollars, too?

The record does not establish how much profit or revenue RBM earned from its business. Thus, the superior court was not able to compare the amount of money that RBM had at stake in the litigation to RBMs litigation costs. The absence of information quantifying the amount of money Ordinance G‑6638 would have cost RBM, however, does not work to the advantage of RBM. As the party that filed the motion for attorney fees, RBM had the responsibility of presenting the superior court with sufficient information to complete the legally relevant inquiry. (Save Open Space Santa Monica Mountains v. Superior Court (2000) 84 Cal.App.4th 235, 247 [party seeking award of attorney fees bears burden of establishing its litigation costs exceed its personal interest].)

Accordingly, the superior court did not abuse its discretion on this ground.

2. Concrete versus abstract personal interests

RBM argues that the superior court violated principles established by the California Supreme Court when it impliedly determined that RBMs personal stake in protecting its business was a concrete personal interest in the issue being litigated. (Press v. Lucky Stores, Inc., supra, 34 Cal.3d at p. 321, fn. 11.) RBM argues that it only had an abstract personal stake (ibid.) in the litigation and that abstract interests cannot be considered for purposes of section 1021.5.

The declaration of RBMs president, which was filed on April 2, 2002, in support of a motion for summary adjudication, identifies some of RBMs interests in the litigation. First, all of RBMs income came from applying Class B biosolids to agricultural land located in Kern County pursuant to an existing contract with City of LA that had nine years left on it. Second, RBMs president predicted that RBM would lose all its income if Ordinance G‑6638 became effective on January 1, 2003. Third, RBMs president predicted that the loss of income most likely would damage irreparably RBMs business and cause it to go out of business.

RBMs analysis of the abstract nature of this personal interest in the litigations suffers from a number of flaws.

At the start of its analysis, RBM focuses on the abstract nature of the results actually achieved. Results actually achieved are not the proper legal measure for evaluating the financial incentives for instituting and continuing to pursue the litigation. (See part I.B.2., ante.)

Had RBM used the correct starting point, it would have (1) recognized that the potential benefits of pursuing the litigation included overturning Ordinance G‑6638 and (2) analyzed whether its interest in invalidating Ordinance G‑6638 was concrete or abstract.^[12] We conclude that RBMs interest in the litigation was concrete based on the close connection between Ordinance G‑6638 and RBMs ability to conduct its business. This connection is shown by paragraph 10 of the declaration of RBMs president:

The anticipated damage to the business of RBM from the lost business of transporting Class B biosolids and applying them to farm land in Kern County would result entirely from the Biosolids Ordinance of Kern County as to which Petitioners seek the assistance of this Court.

Thus, the record contains substantial evidence to support the finding that RBMs economic survival was at stake. Furthermore, RBMs interest in its economic survival was concrete and not abstract.

Once again, had RBM used the correct starting point and been satisfied with attempting to recover only a part of its attorney fees, it may have argued that its litigation decision to include a CEQA claim in the lawsuit was not correlated to a concrete personal interest. This argument is not compelling because the CEQA claim might have led to the invalidation of Ordinance G‑6638. Even if a similar ordinance was put in its place after the completion of an EIR, a delay in the implementation of heightened treatment standards would have benefited RBM financially if it was able to continue in business past January 1, 2003. The temporary nature of such a delay does not render the potential financial impact abstract, it merely diminishes the amount of the financial benefit.

D. SCAP

SCAP, like the other parties that filed motions for attorney fees, adopted the incorrect starting point (results actually obtained) for analyzing its financial interest in the litigation.

As discussed earlier, a partys personal financial interest or stake in litigation is not measured by results actually obtained, but by the potential financial benefits multiplied by the probability of success at the time important litigation decisions are made. SCAP failed to address these components in its motion for attorney fees. This failure is a sufficient ground for affirming the denial of the motion.

In addition, SCAP challenges the superior courts finding of fact that SCAPs interest is no different than its member agencies, the public agencies [that] generate biosolids. SCAP asserts that its personal interest was ensuring environmental values, not protecting its pocketbook or the pocketbook of its members. We conclude that SCAP failed to present sufficient evidence to allow this court to overturn the superior courts finding of fact and replace it with a finding that SCAPs personal stake in the litigation was protecting environmental values.

Based on the foregoing, we need not address Countys argument regarding the lack of necessity for SCAPs participation in this lawsuit. Below, County argued that SCAP performed only duplicative or unnecessary services in the lawsuit and relied on Committee to Defend Reproductive Rights v. A Free PregnancyCenter (1991) 229 Cal.App.3d 633.

Accordingly, the superior court did not err when it denied SCAPs motion for attorney fees.

DISPOSITION

The order denying the motions for attorney fees is affirmed. Respondents shall recover their costs on appeal.

DAWSON, J.

WE CONCUR:

_______________________________

VARTABEDIAN, Acting P.J.

_______________________________

CORNELL, J.

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^[1]All further statutory references are to the Code of Civil Procedure unless otherwise indicated.

^[2]EQ sewage sludge must meet federal regulatory requirements for (1) pathogen reduction, (2) pollutant concentration, and (3) reduction of the level of vector attraction. (County Sanitation Dist. No. 2 v. County of Kern, supra, 127 Cal.App.4th at p. 1568, fn. 34.)

^[3]Section 1021.5 provides in relevant 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, or of enforcement by one public entity against another public entity, 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.

^[4]We do not publish this opinion because the rule of law applied here was established by these earlier decisions.

^[5]In other contexts, courts have recognized that it is the information known to the parties at the time of their litigation decision that is relevant to determining if they acted reasonably. For instance, the reasonableness of a settlement offer (a particular type of litigation decision) made under section 998 is determined by looking at the circumstances that existed when the offer was made. (Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d 692, 699.) Specifically, a court must consider the information that was known, or should have been known, to the offeror and offeree at the time of the offer. (Ibid.) Similarly, for Fourth Amendment purposes, the reasonableness of a police officers decision to initiate an investigatory detention is measured by what the officer knew before he or she acted, not the results achieved by the detention. (People v. Hester (2004) 119 Cal.App.4th 376, 386.)

^[6]I.e., $35 minus $28.50 equals $6.50, which is the smallest difference between the two ranges.

^[7]I.e., $39.50 minus $26.50 equals $13, which is the largest difference between the two ranges.

^[8]I.e., $9.75 per ton times 143,000 tons equals $1,394,250.

^[9]The superior court judge who ruled on the merits of the underlying CEQA claim also ruled on the motions for attorney fees. Compared to the parties and this court, that superior court judge was in a far better position to evaluate the probabilities of the relief that might have been obtained under the CEQA claim.

^[10]We note that the relief obtained in LAPPL, the enforcement of the order of the citys employee relations board, was not purely procedural. The order required the city to return the monthly parking fees that its employees had paid. (LAPPL, supra, 188 Cal.App.3d at p. 5.) By the courts calculations, the parking fees paid by the members of the Police Protective League could not have totaled more than $22,800. (Id. at p. 14.)

^[11]Because of this ruling, we do not reach Countys argument that $395 per hour is an unreasonable hourly rate for the deputy city attorney and assistant city attorney who worked on the case.

^[12]RBM pursued this interest in the superior court and in this court during the first appeal. RBM made no attempt to separately analyze the incentives relevant to its decision to file the lawsuit and the incentives relevant to its decision to file the appeal.