N. Sonoma Cty. Healthcare Dist. v. County of Sonoma
Filed 8/14/13 N. Sonoma Cty. Healthcare Dist. v. County of Sonoma CA1/4
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
FIRST APPELLATE DISTRICT
DIVISION FOUR
NORTH SONOMA COUNTY HEALTHCARE DISTRICT et al., Plaintiffs and Appellants, v. COUNTY OF SONOMA et al., Defendants and Respondents; SUTTER WEST BAY HOSPITALS et al., Real Parties in Interest and Appellants, LUTHER BURBANK MEMORIAL FOUNDATION, Real Party in Interest and Respondent. |
A134862 (Sonoma County Super. Ct. No. SCV-248271) |
I.
Introduction
This appeal involves attorney fees awarded under Code of Civil Procedure section 1021.5 (section 1021.5), arising out of environmental and land use challenges to the construction of a new hospital and medical office building in Santa Rosa.[1] The trial court granted in part, and denied in part, appellants’ motion for attorney fees, and awarded $56,459.16, which was considerably less than the $668,386 appellants had requested. On appeal, appellants claim the court abused its discretion in failing to “follow the settled law under Section 1021.5,†which would have resulted in an award of “fully [sic] compensatory attorneys’ fees†to appellants. Sutter has filed a cross-appeal challenging the trial court’s determination that appellants were successful parties as defined by section 1021.5, and therefore entitled to any attorney fees whatsoever.[2]
With respect to the cross-appeal, we find the trial court did not abuse its discretion in finding that appellants were entitled to attorney fees under section 1021.5. With respect to appellants’ challenge to the amount of attorney fees awarded, our review of the appellate record has located no instance in which the court failed to follow the applicable rules of law governing an award of attorney fees under section 1021.5. In addition, we conclude that the amount of the attorney fees awarded was within the range established by the discretionary authority granted to the court. As a result, we affirm the trial court’s order.
II.
Facts and Procedural History
Since
1996, Sutter Medical Center of Santa Rosa has leased the Chanate campus
hospital facilities located in Santa Rosa from the County. The Chanate campus is an acute care facility
that was built in 1937 and is comprised mostly of buildings that carry a nonconformance
seismic performance rating, which indicates that they could collapse during a
strong earthquake. Seismic safety
legislation (Sen. Bill No. 1953; Stats. 1994, 1993-1994 Reg. Sess.,
ch. 740, § 1, pp. 3638-3645) (SB 1953), amending the Alfred E.
Alquist Hospital Facilities Seismic Safety Act of 1983, mandates seismic
upgrade or replacement of all general acute care hospitals determined by the
state to be at risk of collapsing during a strong earthquake. Pursuant to SB 1953, the Chanate acute care
facility was mandated to close after January 1, 2013.
To comply with its obligations under SB 1953, Sutter
proposed a business plan that allowed
for the construction of a replacement hospital and medical office building on a
parcel of land adjacent to the Wells Fargo Center in Santa Rosa, a performing
arts center. On November 1, 2009, the
County published the “Draft Environmental Impact Report†(EIR) for the
Project. The Project proposed
development of a new acute care inpatient hospital, a medical office building,
a helistop, and parking. The draft EIR
concluded that most of the potentially significant impacts of the Project could
be mitigated to a less than significant level.
Even with the implementation of all feasible mitigation measures,
however, the Project would still result in significant and unavoidable impacts
on air quality, including greenhouse gases, noise, and traffic. On May 2, 2010, the County published the
final EIR, which responded to comments on the draft EIR.
The Sonoma County Board of Supervisors (the Board)
conducted two publicly noticed hearings on the EIR and on the Project approval
in August 2010. On August 24, 2010, the
Board conducted its final
deliberation on the Project. By
unanimous vote, the Board decided to certify the EIR, adopt California
Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) (CEQA)
findings and a statement of overriding considerations, adopt a mitigation
monitoring and reporting program, and approve the Project.
On September 22, 2010, appellants filed a petition for writ of mandate and complaint for
injunctive relief (the Petition) in the Sonoma County Superior Court,
challenging the Board’s approval of the Project. Appellants alleged violations of CEQA, the
state planning and zoning laws, and the Sonoma County Code. Appellants sought to have the EIR
decertified, the Project approvals set aside, and construction stopped.
On June 28, 2011, following briefing and oral argument, the trial court issued a
writ of mandate granting in part, and denying in part, the Petition. While finding against appellants’ position on
most issues, the court found that two of appellants’ claims had merit.
First, with respect to greenhouse gases, the court found
that the EIR contained an adequate analysis of the Project’s contribution to
greenhouse gases. However, the court
found that after the final EIR “was
completed and circulated, the County produced a memorandum which purported to
consider the effect of closing the Chanate facility, and on the basis of this
memorandum, recommended reduced
mitigation†for greenhouse gases.
(Italics added.) The court first
noted that that “[t]he analysis in the EIR [did] not include an analysis of
possible reduction in greenhouse gases based on the closure of the Chanate
facility.†Furthermore, the court found
the revised calculations based on the closure of the Chanate facility that were
used to support the reduced mitigation were “inconsistent with the County’s
position that future uses of Chanate are too speculative to be analyzed.â€
Consequently, the trial court held that “[t]he County’s use
of its [post-EIR] revised calculations to impose mitigation measures and in its
adoption of a statement of overriding considerations is not supported by
evidence in the record.†The court directed the County to “[r]econsider the
mitigation measures to be required as to greenhouse gas emissions based upon
the finding of significance contained in the EIR†and “consider whether further
mitigation measures are to be imposed on the Project or further statement of
overriding considerations should be adopted.â€
Secondly,
the court directed the County to “[c]larify whether the proposed medical office
building will be owned or operated by a governmental agency or nonprofit
entity . . . .†This
directive was in response to the County’s general plan, which requires that any
facilities located within the land use category where the Project was situated
be owned or operated by government agencies, nonprofit entities, or public
utilities.
On August 23, 2011, the Board conducted a public hearing
to comply with the writ by clarifying and making additional findings related to
greenhouse gas emissions and to assure general plan consistency. After considering all relevant oral and
written testimony, the Board, by unanimous vote, reapproved the Project after
clarifying that the medical office building would be owned or operated by a
nonprofit entity, and after adding additional mitigation measures to reduce the
Project’s greenhouse gas emissions. The
County submitted a return and a supplemental return to the peremptory writ of
mandate, and moved to discharge the writ.
On April 26, 2012, the trial court found the County’s approval of the
Project was in compliance with CEQA and discharged the writ of mandate. The court’s decision has become final, with
an appeal taken, but voluntarily dismissed, from the court’s ruling.
In the meantime, on October 28, 2011, appellants’
counsel, the San Francisco firm of Shute, Mihaly & Weinberger LLP (Shute
Mihaly), moved for attorney fees
incurred as a private attorney general enforcing important rights affecting the
public interest. (§ 1021.5.) To clarify, Shute Mihaly did not represent
appellants for the portion of the case challenging the return on the writ. The record reflects that local counsel was
hired for this portion of the case.
Therefore, the trial court was asked to decide whether appellants’
counsel was entitled to a fee award under section 1021.5 for work counsel had
performed up to and including the trial court’s June 28, 2011 issuance of the
writ of mandate, but not for work on the return to the writ.
Sutter and Luther Burbank opposed appellants’ motion for
attorney fees. The matter was argued on
December 21, 2011. On January 9, 2012,
the trial court entered its order granting in part, and denying in part,
appellants’ motion for attorney fees. It
awarded appellants $51,459.16 for fees incurred in preparing and arguing the
Petition on its merits, and $5,000 for fees incurred in preparing and
litigating the motion requesting attorney fees.)
Appellants filed their notice of appeal on March 9, 2012,
claiming the trial court abused its discretion in failing to compensate them
fully in the amount of fees awarded.
Sutter filed a notice of cross-appeal on March 28, 2012, claiming it was
error to award appellants any attorney fees whatsoever.[3]
III.
Discussion
A. Cross-Appeal––Are Section 1021.5 Fees
Warranted in this Case?
The trial court found that appellants had satisfied the
statutory requirements for an attorney fee award under section 1021.5 because
they “conferred a benefit on the general public and enforced an important
public right.†Sutter and Luther Burbank
dispute that finding. Although somewhat
unconventional, we address the issues raised in the cross-appeal first because
if we find that no fees were warranted under section 1021.5, we need not
discuss the propriety of the amount awarded.
Section 1021.5 codifies California’s version of the private
attorney general doctrine, which is an exception to the usual rule that each
party bears its own attorney fees. (Olson v. Automobile Club of Southern
California (2008) 42 Cal.4th 1142, 1147.)
The purpose of the doctrine is to encourage lawsuits enforcing important
public policies by providing substantial attorney fees to successful litigants in such cases. (Graham v. DaimlerChrysler Corp.
(2004) 34 Cal.4th 553, 565-566 (Graham).)
A successful party may recover attorney
fees pursuant to section 1021.5
when the action “ ‘(1) . . . “has resulted in the
enforcement of an important right affecting the public interest,â€
(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 (Whitley),
quoting Woodland Hills Residents Assn., Inc. v. City Council (1979) 23
Cal.3d 917, 935 (Woodland Hills).)
In considering whether to grant attorney fees under
section 1021.5, “ ‘ “[t]he trial court is to assess the litigation
realistically and determine from a practical perspective whether [the
statutory] criteria have been met.â€
[Citation.]’. . .†(Lyons
v. Chinese Hospital Assn. (2006) 136 Cal.App.4th 1331, 1344 (Lyons).)
A trial court’s decision whether to award attorney fees under section
1021.5 is normally reviewed for an abuse of discretion, but de novo review is
warranted where the determination of whether the statutory criteria were
satisfied amounts to statutory construction and a question of law. (Whitley,
supra, 50 Cal.4th at
p. 1213.) Because the Legislature
linked the criteria in section 1021.5 with the word “and,â€
courts have interpreted section 1021.5 to require that
each criterion be satisfied to justify an award of attorney
fees. (County
of Colusa v. California Wildlife Conservation Bd. (2006) 145 Cal.App.4th
637, 648.)
1. Did the Litigation Confer a Significant
Benefit to the Public?
Sutter and Luther Burbank first argue that “[a]ppellants
did not qualify for attorneys’ fees under section 1021.5 because their action
did not result in a significant benefit to the
public . . . .†In
response, appellants claim their action “enforced important rights affecting
the public interest and provided a significant benefit to the public or a large
class of persons by ensuring full disclosure of the environmental impacts of
the Project, full mitigation of those impacts, and consistency with the County
General Plan.â€
“Determining whether a party is ‘successful’ within the
meaning of section 1021.5 requires an analysis of the surrounding circumstances
of the litigation and a pragmatic assessment of the gains achieved by a particular
action. [Citation.]†(Protect Our Water v. County of Merced
(2005) 130 Cal.App.4th 488, 493.) The
standard does not require a showing that the party seeking attorney fees
achieved a favorable ruling on every claim brought in the case. (See Maria P. v. Riles (1987) 43
Cal.3d 1281, 1290-1291 (Maria P.); Wallace v. Consumers Cooperative of Berkeley, Inc.
(1985) 170 Cal.App.3d 836, 846 (Wallace).) To be a successful
party for purposes of a fee award, the moving party must succeed on at least
one “ ‘ “significant issue in litigation†’ †which
achieves some of the benefit the party sought in bringing the suit.[4] (Maria P., at p. 1292; Lyons, supra, 136 Cal.App.4th at p. 1346.)
Sutter and Luther Burbank claim “[t]he clarifications
sought by the writ did not enforce laws in a manner that conferred a
significant public benefit to a large number of people or resulted in any
substantive change in the project.â€
However, “ ‘[t]he extent of the public benefit “need not be greatâ€
to justify an attorney fee award’. . . .†(Environmental Protection Information
Center v. Department of Forestry & Fire Protection (2010) 190
Cal.App.4th 217, 234 (EPIC).)â€
“ ‘[T]he “significant benefit†that will justify an attorney fee
award need not represent a “tangible†asset or a “concrete†gain but, in some
cases, may be recognized simply from the effectuation of a fundamental
constitutional or statutory policy.’
[Citation.] The benefit may be conceptual
or doctrinal [citation], and the California Supreme Court has recognized that
‘the litigation underlying the section 1021.5 award can involve rights or
benefits that are somewhat intangible . . . .’ [Citation.]â€
(EPIC, at p. 233.)
The Supreme Court has consistently found that
informed public decision making and agency accountability are CEQA
cornerstones, holding that an EIR is “intended ‘to demonstrate to an
apprehensive citizenry that the agency has, in fact, analyzed and considered
the ecological implications of its action.’
[Citations.]†(Laurel Heights Improvement Assn. v. Regents of University
of California (1988) 47 Cal.3d 376, 392; see also Citizens of Goleta Valley v. Board of Supervisors
(1990) 52 Cal.3d 553, 564 [an EIR’s “purpose is to inform the public and its
responsible officials of the environmental consequences of their decisions before they are made†(original
italics)].) Only an informed public
“ ‘can intelligently weigh the environmental consequences of any
contemplated action and have an appropriate voice in the formulation of any
decision.’ [Citation.]†(Concerned Citizens of Costa Mesa, Inc. v.
32nd Dist. Agricultural Assn. (1986) 42 Cal.3d 929, 938 (Costa Mesa).)
Here, appellants’ action enforced
CEQA’s fundamental purposes and benefited the public in four ways: (1) the County was forced to prepare a
revised analysis acknowledging the full extent of the Project’s greenhouse gas
emissions; (2) new mitigation measures were considered and adopted that
would reduce these greenhouse gas emissions; (3) the public was given a
chance to review and comment on these mitigation measures; and (4) given
this new information, a
better informed Board was required to weigh competing policy
considerations when deciding to proceed with the Project after adopting its
statement of overriding considerations.
Therefore, the additional public process with more accurate
information on the mitigation of the Project’s greenhouse gas emissions,
standing alone, conferred a substantial public benefit. “ ‘[P]ublic review provides the dual
purpose of bolstering the public’s confidence in the agency’s decision and
providing the agency with information from a variety of experts and
sources.†(Schoen v. Department of
Forestry & Fire Protection (1997) 58 Cal.App.4th 556, 574.) The public holds a “ ‘privileged
position’ †in this regard. (Costa
Mesa, supra, 42
Cal.3d at p. 936.) CEQA’s public
participation requirements are “ ‘based on a belief that citizens can make
important contributions to environmental protection and on notions of
democratic decision-making . . . .’ [Citation.]â€
(Ibid.)
Similar to the procedural history of this case, the court
in Bowman, supra,
131 Cal.App.4th at pages 180-181, found that a writ requiring new notice and
hearing and resulting in new public comment and submissions regarding the
project conferred a significant public benefit, even though the agency in that
case simply reapproved the project without modification. (See also Schwartz
v. City of Rosemead (1984) 155 Cal.App.3d 547, 558.)
Furthermore, this litigation
conferred an additional substantial benefit to the general public because the
County may be less inclined, in the consideration and preparation of EIR’s for
future projects, to “acknowledge a significant impact and approve
the project after imposing a mitigation measure not shown to be adequate by substantial
evidence.†(Woodward Park Homeowners Assn., Inc. v. City of Fresno (2007) 150
Cal.App.4th 683, 724.)
When judged by these standards, we conclude the court did
not abuse its discretion in finding appellants were successful parties who had
achieved a significant public benefit for purposes of section 1021.5. It is clear appellants prevailed on at least
one “ ‘ “significant issue†’ †which achieved some of the
benefits appellants sought in bringing the lawsuit. (Maria P., supra, 43 Cal.3d at p. 1292.) In this case, the trial court identified the
“significant issue,†justifying an award of attorney fees, as requiring Sutter
and Luther Burbank to comply with CEQA in properly mitigating greenhouse gas
emissions. (Ibid.)
2. Did the Financial Burden of Private
Enforcement Outweigh Any Pecuniary Benefit Reasonably Expected from this
Lawsuit?
Sutter and Luther Burbank next argue section 1021.5
attorney fees were improperly awarded because appellants’ lawsuit––while based
on purported land use and CEQA violations––was actually brought to vindicate
appellants’ own economic interests. To
clarify, Sutter and Luther Burbank do not assert that the Transportation
Solution Defense and Education Fund, the Sierra Club, or the California Nurses Association
have a financial interest in the outcome of this case. This argument is directed at North Sonoma
County Healthcare District and Palm Drive Health Care District––the two public
hospitals which, along with other entities, instituted the underlying
litigation (the Hospital petitioners).
Sutter and Luther Burbank claim the Hospital petitioners’ primary
motivation in bringing this lawsuit was to protect their own financial interest
by attempting to avert the competition created by the construction of a new
hospital and medical office building.
The “financial burden†element
of section 1021.5 is met when “ ‘the cost of the claimant’s legal victory
transcends his [or her] personal interest, that is, when the necessity for pursuing the
lawsuit placed a burden on the plaintiff “out of
proportion to his [or her] individual
stake in the matter.â€
[Citation.]’ †(Woodland
Hills, supra, 23 Cal.3d at p. 941; see also Whitley, supra, 50 Cal.4th at
p. 1215.)
“The Whitley decision makes clear that, in a private enforcement action,
a court may not consider nonpecuniary interests when evaluating the financial
burden criterion in section 1021.5.†(City of Maywood v. Los Angeles Unified
School Dist. (2012) 208 Cal.App.4th 362, 432.) “[T]he holding of Whitley applies equally to both private and public litigants who
seek attorneys’ fees pursuant to section 1021.5.†(Id.
at p. 433.) The financial
burden of private enforcement concerns not only the costs of litigation, but
also the financial benefits reasonably expected by the
successful party. (Whitley, supra, 50 Cal.4th at p. 1215.) The appropriate inquiry is whether the financial burden of the plaintiff’s legal victory outweighs
the plaintiff’s personal financial interest. (Ibid.; Woodland Hills,
supra, 23 Cal.3d at p. 941.)
An attorney fees award under
section 1021.5 is proper unless the plaintiff’s
reasonably expected financial benefits exceed by a
substantial margin the plaintiff’s actual litigation costs. (Whitley, supra, 50 Cal.4th at
p. 1216.) The focus in this regard
is on the plaintiff’s incentive to litigate absent a statutory attorney
fee award.
“ ‘[S]ection 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.’
[Citation.]†(Id. at p. 1221.)
Sutter and Luther Burbank address
the financial burden and benefits of this lawsuit with the following
argument: The “Project made the already
competitive [health care] market even more competitive.†They point to comments in the record,
expressing concern that “approval of the new Sutter hospital would threaten
closure [or downsizing] of one or more of the existing hospitals in the
County.†From these scant, general
references they make a comparison of the Hospital petitioners’ annual revenues
to their litigation expenses, and argue, “Hospital Appellants incurred
litigation expenses of $668,386 to protect collective revenues of over
$57.5 million per year. Given the
amount of money at stake . . . the burden to the Hospital Appellants
of this litigation was minor compared to their demonstrated financial
interest.â€
We first point out that having a financial interest in the issues being litigated does not
preclude recovery of attorney fees. (See, e.g., Lyons, supra, 136 Cal.App.4th at p. 1352 [“A pecuniary interest in the outcome of the litigation is not disqualifyingâ€].) We also note that courts have frequently
awarded fees under section 1021.5 to health care providers that bring public
interest lawsuits. (See Feminist Women’s Health Care Center v.
Blythe (1995) 32 Cal.App.4th 1641, 1667-1668 [holding that a health
center’s financial interest in a public interest action did not disqualify it
from receiving fees]; Planned Parenthood
v. Aakhus (1993) 14 Cal.App.4th 162, 173 [“This action was brought to
protect both respondent and its patrons; consequently, it cannot be exclusively
characterized as a self-serving, private dispute commenced by respondent to
protect its own pocketbookâ€].)
Furthermore, numerous cases have
held that an “ ‘indirect and uncertain’ †pecuniary
benefit does not outweigh a plaintiff’s financial burden in bringing the lawsuit for the purposes of
evaluating entitlement to attorney fees under section 1021.5. (Monterey/Santa Cruz County etc. Trades
Council v. Cypress Marina Heights LP (2011) 191 Cal.App.4th 1500, 1523; Citizens
Against Rent Control v. City of Berkeley (1986) 181
Cal.App.3d 213, 230-231.) “[T]he central calculus of the financial burden requirement—an
evaluation of the costs of the litigation with its expected
value [citation]—depends on an ability to quantify the gains realistically
expected.†(Whitley, supra, 50 Cal.4th at p. 1225.)
Thus, a court should not deny plaintiffs’ attorney fees where their
potential financial incentive is indirect and largely speculative. (Plumbers & Steamfitters, Local 290 v.
Duncan (2007) 157 Cal.App.4th 1083, 1099 [allowing fees in union action to
enforce prevailing wage policy].)
Consequently, in order to outweigh the financial
burden of litigation under section 1021.5, the financial benefits potentially realized by the Hospital
petitioners must be far less speculative than the
illusory financial
benefits imagined and argued in this case by cross-appellants. Indeed, as the trial court recognized in
awarding appellants’ attorney fees, “[t]his matter involves difficult and
complex litigation, a massive administrative record, and the result was uncertain.â€
(Italics added.) (See, e.g., Baggett v. Gates (1982) 32 Cal.3d 128, 143 [enforcement of procedural rights did
not confer financial benefit outweighing costs of
litigation, because there was no assurance that plaintiff would enjoy personal financial benefits from new procedure]; Otto v. Los Angeles
Unified School Dist. (2003) 106 Cal.App.4th 328, 332-333 [fee award was
appropriate, since there was “no guarantee†plaintiffs would ever “secure any financial benefit for themselves†from
District’s change of policy]; Galante Vineyards v. Monterey Peninsula Water
Management Dist. (1997) 60
Cal.App.4th 1109, 1127 [affirmed award of fees to financially interested
land owners, because “there is no
direct pecuniary benefit to petitioners in the
judgment†and “any future money advantage for petitioners is speculativeâ€].) Similarly, the record here did not show that
the Hospital petitioners had the kind of personal pecuniary interest necessary
to disqualify them from a fee award under section 1021.5.
B. Main
Appeal—Trial Court’s Calculation of Attorney Fees
As
noted, the trial court awarded appellants a total of $51,459.16 in attorney
fees under section 1021.5 for litigating the Petition (excluding the
proceedings involving the return to the writ) and $5,000 to prepare and argue
the motion for attorney fees. The amount
awarded was far less than the $668,386 appellants requested. Appellants claim: “The law is clear. Section 1021.5 requires full compensation of
successful parties at market rates, including full compensation for litigating
the attorneys’ fees motion.â€
First, when determining the amount of attorney fees to
award under section 1021.5, courts begin with the lodestar figure. (Graham, supra, 34 Cal.4th at p. 579.) The lodestar figure is calculated by
multiplying the hours reasonably expended by the attorney by that attorney’s
reasonable hourly rate. (Ibid.)
The trial court was aware of the foregoing rule and applied it. Although Sutter and Luther Burbank argued
that the 1,028 hours claimed by appellants’ attorneys were unreasonable and
excessive, the trial court found that the “hours for which Petitioners are
billing are reasonable†and accepted appellants’ figure of 1,028.2 hours.
However, the court did not accept the claimed hourly rate
of appellants’ out-of-town law firm, Shute Mihaly, ranging from $500 per hour
for a senior partner to $300-$415 per hour for associate attorneys, finding it
was “in excess of reasonable attorneys’ fees.â€
Instead, the court found that “the hourly rate of $300†was a reasonable
fee for comparable legal services in the local community and “does reflect
. . . the higher end of local fees.â€
The lodestar was then computed by multiplying the time
the court found to be reasonable by the hourly rate, which amounted to
$245,043.62. Next, after calculating the
lodestar figure, the court recognized that full compensation may be excessive
if a plaintiff has achieved only partial or limited success and a court may
appropriately reduce the lodestar calculation if the relief, however
significant, is limited in comparison to the scope of the litigation as a
whole. (EPIC, supra, 190
Cal.App.4th at pp. 238-239.) Here,
the trial court found that appellants had only “limited success†in the
underlying litigation and that 15 percent of the lodestar amount was reasonable
to reflect their partial success.
The trial court also recognized it had the discretion to increase or decrease the lodestar amount
by applying a positive or negative multiplier. (Thayer v. Wells Fargo Bank (2001) 92
Cal.App.4th 819, 833.) In deciding
whether or not to award a positive multiplier, “[t]he question to be answered
is whether the litigation required extraordinary legal skill or whether there
are other factors justifying augmentation of the unadorned lodestar
in order to approximate the fair market rate for such services. [Citation.]â€
(EnPalm, LCC v. Teitler (2008)
162 Cal.App.4th 770, 784, dis. opn. of Cooper, P. J.) (EnPalm); accord, Robbins v.
Alibrandi (2005) 127 Cal.App.4th 438, 454.)
Rejecting respondents’ arguments that a positive multiplier was
inappropriate in this case, the trial court awarded a multiplier of 1.4 to take
into account [Shute Mihaly’s] expertise and [the] firm’s experience.â€[5] When all these factors were computed, the
court awarded appellants a total of $51,459.16 for their work in connection
with the Petition.
Regarding appellants’ request for an additional $85,788
to brief the attorney fees motion, the trial court found that the hours claimed
were “outrageous†because of “the stock nature of a motion like this,†given
that the motion was “not unlike motions [Shute Mihaly has] filed in every other
CEQA case [it has] brought.†If a fee
request appears unreasonably inflated, the trial court may reduce the award or
deny it altogether. (Meister v.
Regents of University of California (1998) 67 Cal.App.4th 437, 455 (Meister).)
Based on this reasoning, the trial court awarded appellants’ attorneys
$5,000 for work done on the motion requesting attorney fees, bringing the total
amount of fees awarded to $56,459.16.
In light of those factors considered by the trial court,
it is manifestly clear that the court followed the appropriate lodestar
adjustment analysis and applied applicable rules of law governing an award of
attorney fees under section 1021.5 to both enhance and diminish the award. The only question is whether the trial
court’s decisions on various components of the lodestar analysis, which served
to diminish the amount of attorney fees awarded appellants, fell within the
range of permissible outcomes committed to the court’s discretion. (Department
of Parks & Recreation v. State Personnel Bd. (1991) 233 Cal.App.3d 813,
831 [an “abuse of discretion standard . . . measures whether, given
the established evidence, the act of the lower tribunal falls within the
permissible range of options set by the legal criteriaâ€]; Vasquez v. State of California (2008) 45 Cal.4th 243, 251 [“within
the statutory parameters [of section 1021.5] courts retain considerable
discretionâ€].)
Specifically, appellants claim the
court abused its discretion when it: (1) “reduced the award by 85%†based
on appellants’ limited success in the underlying litigation; (2) reduced
the hourly rates to $300 per hour to reflect the prevailing rate in the local
legal community; and (3) “awarded only $5,000 for litigating the
attorneys’ fees motion, which is an amount equivalent to 17 hours at the $300
per hour rate selected by the court.†We now turn to these
three enumerated issues raised by appellants in this appeal.
1. Partial Success
Appellants first argue that the court abused its discretion in reducing their attorney fees to
15 percent of the lodestar amount to reflect the fact
that appellants obtained only partial success
in this litigation. Appellants claim
this reduction was “without any reasonable basis in the evidence or in the lawâ€
and “subverts the important public policies of Section 1021.5 and constitutes
an abuse of discretion.â€
As a threshold matter, appellants are simply incorrect
that there is no support in the law for reduction of fees based on partial
success. “[T]he degree or extent of [the
plaintiffs’] success in obtaining the results which they
sought must be taken into consideration in determining the extent of attorney fees which it would be reasonable
for them to recover.†(Sokolow v.
County of San Mateo (1989) 213 Cal.App.3d 231, 248, original italics (Sokolow); Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 989 [where
claimant achieves only limited success, a reduced fee award is
appropriate].) For this purpose, success
is measured by analyzing the objectives the plaintiff sought to achieve through
the litigation and the objectives they actually achieved. (Sokolow, supra, at p. 250; Californians for Responsible
Toxics Management v. Kizer (1989)
211 Cal.App.3d 961, 975 [court did not abuse its discretion in reducing the
lodestar by 35 percent due to lack of success].)
The trial court is given wide discretion in deciding
these matters. In Center for Biological Diversity v. County of San Bernardino
(2010) 185 Cal.App.4th 866, the court explained: “While a court has discretion to reduce fees
[awarded] in a CEQA case based on degree of success [citation], it is, of
course, not required to do so.†(Id. at p. 897.) Furthermore, “a court is not required to
follow a formulaic reduction in CEQA cases based on the number and percentage
of unsuccessful claims raised.†(Id.
at p. 898.)
When the court reduced the lodestar amount to reflect
appellants’ limited success, it sized up appellants’ success in the underlying
litigation, noting that the County had “to go back and consider additional
mitigation on global warming,†but remarked “aside from that, [appellants]
basically lost on every other environmental issue.â€
The record supports the trial court’s observation. Appellants did not gain any relief on most of
the claims that they raised in the Petition, including: (1) challenging
the Project description based on a claimed understatement of the number of
employees; (2) claiming the Project description was improperly segmented;
(3) claiming the EIR’s analysis of greenhouse gas emissions was
inadequate, was not supported by substantial evidence, and had significant
environmental effects that were not sufficiently mitigated; (4) claiming
there was not a sufficient analysis of alternatives, and that a city-centered,
transit-oriented alternative should have been considered; and (5) claiming
the EIR did not adequately describe existing uses at the Wells Fargo
Center. Appellants also alleged that the
Project was inconsistent with the County’s general plan and was approved in
violation of the County’s design review procedures.
The trial court ruled for appellants on two issues
relating to the County’s findings on greenhouse gas emissions (while finding
the analysis of greenhouse gases in the EIR was adequate) and general plan
consistency. The court rejected the rest
of appellants’ claims.
Moreover, the principal remedy sought by appellants was a
peremptory writ of mandate setting aside the certification of the EIR, vacating
all Project approvals, and imposing an injunction prohibiting Project
construction. It is clear they did not
achieve their primary litigation objectives as the trial court did not set
aside the EIR, vacate the Project approvals, or stop construction, as
appellants had requested.
The trial court’s reduction of attorney fees reflects a
reasoned analysis and pragmatic view of appellants’ limited success in the
present action. No abuse of discretion
has been shown.
2.
Reasonable Hourly Rate (Local Rate)
Here, appellants hired attorneys
from San Francisco as lead counsel, with certain of appellants’ attorneys
charging $500 per hour. The trial court concluded these rates were excessive for Sonoma County; and instead
calculated the fee award using a rate
of $300 per hour, which the court believed better
reflected the rate charged by the local legal community for comparable legal
services. Appellants claim the trial
court abused its discretion in selecting the $300 hourly rate.
Generally, in calculating the lodestar, “[t]he reasonable
hourly rate is that prevailing in the community for similar work. [Citations.]â€
(PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095 (PLCM).)
However, “in the ‘unusual circumstance’ that local
counsel is unavailable,†a trial
court may award an out-of-town counsel’s higher rates. (Horsford v. Board of Trustees of
California State University (2005) 132 Cal.App.4th 359, 399 (Horsford).) In such rare cases, the justification for
awarding the higher rate is that out-of-town rates are needed “to attract
attorneys who are sufficient to the cause.â€
(Ibid.) At a minimum, therefore, the party seeking out-of-town rates
is required to make a “sufficient showing . . . that hiring local counsel was impracticable,â€
and the exception is accordingly inapplicable where “no effort was made to
retain local counsel.†(Nichols v. City of Taft (2007) 155
Cal.App.4th 1233, 1244 (Nichols).)
We believe appellants have failed to carry their
threshold burden of showing that it was necessary to retain out-of-town counsel
to handle this case. In Rey v. Madera
Unified School Dist. (2012) 203 Cal.App.4th 1223 (Rey), the appellants hired out-of-town attorneys from a higher
fee area, with several attorneys
charging over $760 per hour. (Id.
at p. 1231, 1240.) The trial court
concluded these rates were excessive for the Central
Valley and instead calculated the fee award using a local rate
of $325 per hour.
(Id. at p. 1240.) In affirming the trial court’s decision, the
Court of Appeal found the evidence before the trial court attempting to justify
the higher out-of-town rate to be “speculative†in that it “did not establish
that appellants ever attempted to retain local counsel.†(Id.
at p. 1241; accord, Nichols, supra, 155 Cal.App.4th at p. 1244
[court reversed an award of higher out-of-town rates because plaintiff had
failed to show she was unable to hire local counsel].)
Likewise, appellants’ evidence here contained bare
assertions that local counsel could not handle the matter but did not contain
any facts establishing that appellants ever attempted to locate and retain local counsel. Appellants seek to justify their choice of Shute
Mihaly by indicating
that no local firm “had the resources, the depth of experience, and the
reputation for successful CEQA litigation that [Shute Mihaly] has.†But section 1021.5 does not guarantee
plaintiffs the best counsel money can buy––it guarantees them competent
counsel. Under these circumstances, the
trial court did not abuse its discretion in applying local
rates rather than counsels’ out-of-town rates.
Appellants further claim that, “[e]ven . . . if
Sonoma County rates were appropriate, the Superior Court abused its discretion
by ignoring the evidence in the record of what those rates are.†Appellants point to declarations they
submitted to support their argument that the rates charged for legal work in
Sonoma County were comparable to the rates charged in San Francisco. They claim the trial court abused its
discretion in disregarding their proffered evidence on the applicable market
rate in Sonoma County and “reducing the hourly rates to a rate unsupported by
any evidence.â€
In this case, it has not been shown that the trial court
failed to consider appellants’ evidence when it set the reasonable hourly rate
at $300 per hour. Instead, in rejecting
appellants’ evidence, it is clear the court drew upon its own knowledge of
reasonable hourly rates prevailing in the local community for similar
work. When the matter was argued,
appellants’ counsel stated that the local rate, as stated in a supporting
declaration, “would be $650 an hour for a partner in Sonoma
County, commercial rate.†The court
observed, “That’s not my experience. I
thought $300 was generous.†In a similar
vein, when the court announced its decision on attorney fees, the court found
the $300 rate was “the higher end of local fees.â€
Judges generally possesses a great wealth of knowledge about
reasonable attorney rates in the local legal community and, absent an arbitrary
ruling, the case law appears to give the judge great discretion in using that
knowledge to reach an appropriate conclusion on “ ‘ “the value of
professional services rendered in his [or her] court†’ †even
without the necessity of expert testimony.
(PLCM, supra, 22 Cal.4th at p. 1095; Thayer, supra, 92
Cal.App.4th at p. 832; Press v.
Lucky Stores, Inc. (1983) 34 Cal.3d 311, 322.)
In this regard, in determining the prevailing rate in the local community for comparable legal services, it is relevant that qualified local counsel appeared in this case on behalf of appellants and that she charged an hourly rate of $300. Specifically, local attorney Rachel Mansfield-Howlett, an attorney at Provencher & Flatt, LLP in Santa Rosa, represented appellant Sierra Club throughout the litigation on the merits. Mansfield-Howlett also became the attorney for appellants Transportation Solutions Defense and Education Fund, California Nurses Association, and Sierra Club during the return to the writ phase of the case. These entities were previously represented by Shute Mihaly.
Appellants claim the $300 rate
charged by Mansfield-Howlett for her work on this case was irrelevant in
setting the local rate because she has limited experience as compared with the
senior partner from Shute Mihaly working on this case. We disagree that this single factor renders
local counsel’s hourly rate totally irrelevant.
The rate to be applied in determining the lodestar has been defined as
“[t]he reasonable hourly rate . . . prevailing in the community for
similar work. [Citations.]†(PLCM, supra, 22 Cal.4th at
p. 1095.) Since this definition
puts the focus on prevailing rates charged for comparable services, we believe
the typical hourly rate charged by local counsel for services rendered in
this case could be used as evidence of the prevailing rate in the relevant
community. The fact that she was not as
experienced as some of the other counsel working on the case is simply a factor
to be taken into the court’s consideration in determining a reasonable hourly
rate.
While appellants couch
their appellate claim of error on the trial court’s selection of $300 as the
reasonable hourly rate, they ignore the fact that in calculating the attorney
fee award, the trial court took “into account [Shute Mihaly’s] expertise and
[the] firm’s experience†by using a positive multiplier of 1.4 to grant an
upward fee adjustment. As acknowledged
in numerous cases, the application of a positive multiplier provides another
way, besides calculating the initial lodestar figure, for the court “ ‘to
ensure that the fee awarded is within the range of fees freely negotiated in
the legal marketplace in comparable litigation.’ [Citation.]†(Northwest Energetic Services, LLC v. California
Franchise Tax Bd. (2008) 159 Cal.App.4th 841, 882, italics omitted.) In fact, the application of a positive
multiplier has been recognized as an alternative, besides enhancing the hourly
rate in calculating the lodestar, to adequately compensate out-of-town counsel
who charges a higher hourly rate. (See Nichols, supra, 155 Cal.App.4th at
p. 1244 [ analyzing court’s “[u]se of a fee multiplier to compensate for
the higher rates of out-of-town-counselâ€]; Horsford, supra, 132
Cal.App.4th at p. 399 [court may “award an enhancement multiplier to a
lodestar initially calculated using local hourly rates†to compensate
out-of-town counsel who charges higher fee rates].) Accordingly, when we consider all
aspects of the trial court’s attorney fee award, it is apparent that appellants
were awarded
additional attorney fees over the prevailing rate in the local community, in the form of a positive multiplier, to reflect
their counsels’ special skill and experience.
Accordingly, we find this is one more factor contributing to our
decision that the court’s imposition of a $300 hourly rate was not an abuse of
discretion.
3. Litigating the Attorney Fees Motion
As noted,
appellants requested $85,788 for work done to recover their attorney fees, which included filing an opening and
reply brief, two opposition briefs, and preparing a series of
declarations. The trial court disallowed
the fee request finding it to be “outrageous.â€
In its written order, the court further explains, “[t]he hours
Petitioners claim for preparation of this motion is excessive. The court awards $5,000 to compensate
Petitioners for preparation of this motion.â€
Appellants claim that the trial court’s blanket reduction of fees was an
abuse of discretion, because at the $300 hourly rate, they were compensated for
only 17 hours for litigating their fee award.
As the
court observed in Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315: “Where, as here, the trial court severely
curtails the number of compensable hours in a fee award, we presume the court
concluded the fee request was padded.
[Citations.] An attorney’s chief
asset in submitting a fee request is his or her credibility, and where [an inflated
fee request] destroy[s] an attorney’s credibility with the trial court, we have
no power on appeal to restore it.
[Citation.]†(Id. at pp. 1325-1326; Rey, supra,
203 Cal.App.4th at pp. 1243-1244 [court’s reduction of compensable hours
in litigating fees motion was not an abuse of discretion when court could
reasonably find the request was inflated].)
In this
matter, the trial court was similarly troubled by appellants’ request for
$85,788 in attorney fees to litigate the fee motion, especially given their
limited success on the merits of the case.
We find this case to be similar to Meister, supra, 67 Cal.App.4th
437. In Meister, the plaintiff’s attorneys attempted
to justify more than $500,000 in fees for a case which
achieved a modest financial award and stipulated injunctive relief which
required defendants to do little, if anything, more than obey the law in the
future. The Meister court found no abuse of discretion in concluding that the attorney fees incurred in attempting
to justify this unreasonable request were not hours
“reasonably spent†on the fee litigation. (See also Serrano v. Unruh (1982) 32 Cal.3d 621, 635
[unreasonably inflated fee request is a “special circumstance†permitting
reduction of award or denial of fees altogether].)
As in Meister,
the trial court here properly exercised its discretion to cut significantly the
fees sought for litigating a fee motion where the amount claimed to litigate
that motion was found to be “outrageous†by the trial court in light of the
limited results achieved by this litigation.
C. Conclusion
It has been
observed that “[t]he ‘experienced trial judge is the best judge of the value of
professional services rendered in his [or her] court, and while his [or her]
judgment is of course subject to review, it will not be disturbed unless the
appellate court is convinced that it is clearly wrong.’ [Citations.]â€
(Serrano v. Priest (1977) 20 Cal.3d 25, 49; PLCM, supra, 22 Cal.4th
at p. 1095.)
Here, the
judge who awarded attorney fees was also the judge who heard and decided the
Petition. Therefore, he was extremely
familiar with this case and with the quality of services performed by
appellants’ counsel and the amount of time counsel devoted to the case. The trial court did not rubber-stamp either
appellants’ fee request or Sutter and Luther Burbank’s opposition. Instead, appellants won on some of the issues
(the entitlement to attorney fees under section 1021.5, the number of hours
reasonably spent litigating the Petition, and the multiplier) and lost on
others (reduction for partial success, the local rate, and the award for the
fee motion). Overall, the trial court
made a balanced decision, and case law confirms the court acted well within its
discretion on each point.
IV.
Disposition
The
attorney fees order is affirmed. Costs
to respondents.
_________________________
RUVOLO,
P. J.
I concur:
_________________________
REARDON, J.
Rivera, J.
I cannot agree with my colleagues with respect to two issues. First, I would conclude that the trial court abused its discretion in deciding that $300 was a “reasonable†hourly rate upon which to calculate the lodestar. Second, I would conclude that the trial court abused its discretion in awarding only $5,000.00 for the attorney fee motion. Accordingly, I respectfully dissent.
A. Reasonable Hourly Rates
Petitioners requested fees to be awarded based on hourly rates ranging from $500 per hour for the senior attorney on the case to $355 for junior lawyers. The record evidence supporting this request is uncontroverted.
Ms. Brandt-Hawley, a highly experienced CEQA attorney in Sonoma County, averred that she regularly receives private attorney general fees under Code of Civ. Proc. Section 1021.5 at hourly rates of up to $650, and in many cases has received multipliers of up to 2.0 when working on a partial contingency. She further opined that the rates requested by the petitioners in this action were “reasonable and well within the range of commercial rates charge[d] for attorneys with specialized land use and environmental experience in the San Francisco Bay area, including Sonoma County.â€
Both Ms. Garber (petitioners’ counsel) and Mr. Drury, an expert declarant, provided consistent evidence that the rates requested by petitioners are at the low end of commercial rates for the San Francisco Bay Area. Ms. Mansfield-Howlett, a four-year attorney in Sonoma County, who requested compensation for 16.5 hours of work during the administrative proceedings at $300 per hour, described her fee as being “at or below the current market rate for Sonoma County attorneys of like experience.†(Emphasis added.)
Finally, there was evidence that the City of Stockton had retained private counsel from the Walnut Creek office of a San Francisco law firm to represent the City in CEQA litigation in 2007 at a “blended rate†of $475 per hour, and that Sonoma County itself retained private counsel in 2006—four years prior to this litigation—paying $470 and $460 for the two senior lawyers, and $395 and $330 for the two junior lawyers.
I have scoured the record for any evidence proffered by respondents that disputes any of these numbers. None was submitted. Instead, respondents offered only the following: (1) an article from the Boston Business Journal in 2011 reporting that “average†billing rates in “the Westâ€â€”i.e., the entire western part of the U.S.—had risen to $298; and (2) counsel’s unsworn assertion during oral argument that he did not “know anybody who does complex litigation in Sonoma County that charges $650 an hour.†These are not evidence of anything, much less of the actual billing rates in Sonoma County. (In re Zeth S. (2003) 31 Cal.4th 396, 414, fn. 11 [“It is axiomatic that the unsworn statements of counsel are not evidenceâ€]; see also Rules Prof. Conduct, rule 5–200(e) [attorneys must not “assert personal knowledge of the facts at issue, except when testifying as a witnessâ€].) In fact, there appeared to be a studied reluctance on the part of respondents to provide any evidence tending to prove the actual billing rates in Sonoma County.[6]
The trial court, for its part, appears to have relied upon its own comfort level of what it “[woul]d say†was “the higher end of local fees†which it pegged at $300. There is not an iota of evidence to support this finding. The majority nevertheless concludes the finding should be affirmed because a judge has discretion to use his or her own knowledge to reach an appropriate conclusion on “ ‘ “ ‘the value of professional services rendered in his [or her] court’ †’ even without the necessity of expert testimony.†(Maj. opn. at p. 19.) For this principle the majority relies on PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095–1096 (PLCM), Thayer v. Wells Fargo Bank (2001) 92 Cal.App.4th 819, 832 (Thayer), and Press v. Lucky Stores, Inc. (1983) 34 Cal.3d 311, 322.
The principle is sound but it does not apply here. In none of those cases was the court determining the community hourly rate for attorneys. In PLCM, for example, the court made the point that a trial judge has his or her “ ‘own expertise’ †in determining the “ ‘value’ †of professional services, and in doing so should consider “a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.†(PLCM, supra, 22 Cal.4th at p. 1096; see also Thayer, supra, 92 Cal.App.4th at pp. 832–833 [“ ‘ “The ‘experienced trial judge is the best judge of the value of professional services rendered in his court.’ †’ â€]). Thus, we can rely on a trial court’s knowledge of the “value†of a lawyer’s professional services because it is in a unique position to appraise the relative level of difficulty of a case, the relative skill of the lawyer, and the lawyer’s overall method of handling the matter, including the results, in which case its judgment will rarely be disturbed. But that was not the analysis undertaken by this trial court. Here, the judge did not determine the “value†of the attorneys’ services based upon the factors discussed in PLCM, but instead made a finding, based on his “experience,†that the hourly rate of $300 reflected “the higher end of local fees.†Neither PLCM nor any other case holds that a court can decide what is the hourly rate in the community based solely on the judge’s personal opinion and contrary to all record evidence. (Jones v. Union Bank of California (2005) 127 Cal.App.4th 542, 549–550 [“An abuse of discretion is shown when the award. . . is not supported by the evidence.â€]; Robbins v. Alibrandi (2005) 127 Cal.App.4th 438, 452 [“We do not defer to the trial court’s rulin
Description | This appeal involves attorney fees awarded under Code of Civil Procedure section 1021.5 (section 1021.5), arising out of environmental and land use challenges to the construction of a new hospital and medical office building in Santa Rosa.[1] The trial court granted in part, and denied in part, appellants’ motion for attorney fees, and awarded $56,459.16, which was considerably less than the $668,386 appellants had requested. On appeal, appellants claim the court abused its discretion in failing to “follow the settled law under Section 1021.5,†which would have resulted in an award of “fully [sic] compensatory attorneys’ fees†to appellants. Sutter has filed a cross-appeal challenging the trial court’s determination that appellants were successful parties as defined by section 1021.5, and therefore entitled to any attorney fees whatsoever.[2] With respect to the cross-appeal, we find the trial court did not abuse its discretion in finding that appellants were entitled to attorney fees under section 1021.5. With respect to appellants’ challenge to the amount of attorney fees awarded, our review of the appellate record has located no instance in which the court failed to follow the applicable rules of law governing an award of attorney fees under section 1021.5. In addition, we conclude that the amount of the attorney fees awarded was within the range established by the discretionary authority granted to the court. As a result, we affirm the trial court’s order. |
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