Fees Of Attorney With Personal Interest In CEQA Action Are Recoverable Under Private Attorney General Statute

A court of appeal recently concluded that the fees of an attorney who provided legal services but was also a party to a California Environmental Quality Act (“CEQA”) lawsuit could be recovered under the private attorney general statute.  (Healdsburg Citizen for Sustainable Solutions v. City of Healdsburg (--- Cal.Rptr.3d ----, Cal.App. 1 Dist., June 4, 2012).

Facts

Healdsburg Citizens for Sustainable Solutions (“HCSS”), Millie Bisset, and Janis Grattan (collectively, “Petitioners”) filed a petition for writ of mandate to challenge the environmental impact report (“EIR”) prepared for the Saggio Hills Resort development (“Project”).  Sonoma Luxury Resort LLC owns the project site and applied for the project approvals.  The City of Healdsburg (“City”) owns part of the property that was proposed for wetlands mitigation. 

Petitioners alleged City violated CEQA when it approved the Project without adopting feasible alternatives and mitigation measures.  They further asserted the EIR was incomplete and City’s decision to certify it was not supported by substantial evidence.  The trial court granted their petition in part finding that the EIR was defective because it failed to study the water demand for vegetation planted as part of the mitigation measures, failed to consider the aesthetic effects of the project on local vista points and trails, and failed “to consider a sufficient range of viable, feasible alternatives.”  However, the trial court rejected a number of Petitioners’ challenges to the EIR.

Petitioners sought attorney fees under Code of Civil Procedure section 1021.5.  The trial court found that Petitioners had been approximately 60 percent successful and reduced their claimed fees by 40 percent.  The trial court awarded Petitioners $382,189.73 in attorney fees.

Decision

Code of Civil Procedure section 1021.5 codified the private attorney general doctrine set out in case law by the California Supreme Court.  Section 1021.5 provides “an incentive for the pursuit of public interested-related litigation that might otherwise have been too costly to bring.”  It applies to actions brought to enforce provisions of CEQA.  In order to recover fees under section 1021.5, Petitioners were required to show that their litigation “‘(1) served to vindicate an important public right; (2) conferred a significant benefit on the general public or a large class of persons; and (3) [was necessary and] imposed a financial burden on [Petitioners] which was out of proportion to their individual stake in the matter.’”

City alleged that the trial court erred in awarding fees to Grattan because she was a party to the action.  Grattan was a member of HCSS and signed the verification for the petition for writ of mandate on behalf of HCSS.  Grattan agreed to work on a contingent fee basis with the lead attorney in the case.

The court of appeal recognized that in the context of contractual attorney fees, an attorney who litigates an action in propria persona, or in his or her own behalf, does not “incur” attorney fees and cannot recover a reasonable attorney fee under Civil Code section 1717.  Section 1717 addresses the award of attorney fees in an action where fees are incurred in the enforcement of a contract that allows for such an award.  However, this rule is not applicable here because the award of attorney fees was not based on contract.

Grattan is a named party in this case that challenges an EIR under CEQA and she is also a member of HCSS.  The court distinguished this situation from one where a husband’s law firm represented both the husband and his wife in an action against a contractor.  A court of appeal found that to the extent that the legal fees were attributable to work of the husband, neither husband or wife were entitled to collect such fees.  The husband’s interests in the outcome of the litigation were identical and interchangeable with those of his wife.  Thus, there was not a true attorney-client relationship.

Here, there was a genuine attorney-client relationship between Grattan and her co-petitioners and the trial court found Grattan “was a ‘hired attorney.’”  Her interests were not interchangeable with those of her copetitioners even though she may have enjoyed the benefits that were conferred from the litigation in common with them.  Also, this was not an action to enforce a private right.  The fees where “incurred in an action to enforce an important right affecting the public, which conferred benefits on a large group.”  Grattan sought to vindicate an important public interest and took the risk that she would not be compensated for her time.  The court held that the trial court did not err in awarding fees for her work under section 1021.5.

Questions

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