Court Grants Attorneys' Fees Against City in Development Litigation

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CEQA Appellate Court Decision Analyzed by BB&K's Amanda Daams in PublicCEO

A large attorneys’ fees award under the private attorney general statute was recently affirmed by a California Appellate Court. The case, Building a Better Redondo v. City of Redondo Beach, is notable not just for the large amount of the award, but that the award was issued jointly and severally against the City of Redondo Beach and the private developers, who were real parties in interest.

Although the Second District Court of Appeal’s decision on this matter, issued in February, is not published, the opinion serves as a good reminder for local jurisdictions to think about potential attorneys’ fees awards when considering development projects. Most jurisdictions do impose indemnification conditions as part of their approvals, but this case shows the importance of ensuring fees are tracked and paid on a concurrent basis throughout the transactional and litigation processes, as well as potentially thinking about options for how to ensure jurisdictions can collect on the indemnification provisions if a large fee award is issued against them at the end of litigation.

Building a Better Redondo stems from a project designed to redevelop the Redondo Beach King Harbor Pier area, which has been mired in litigation over numerous issues since the project’s approval in 2016. As proposed, the project would include over 511,000 square feet of new development, a new boat ramp and modification of Seaside Lagoon, a family recreational area, to open the existing lagoon to untreated harbor water.

Building a Better Redondo challenged the project, filing a petition for writ of mandate asserting six causes of action. Among them, it alleged that the environmental impact report prepared for the project failed to comply with the California Environmental Quality Act. The trial court issued a lengthy opinion finding the City’s EIR was deficient with respect to the opening of Seaside Lagoon, the boat ramp location, as well as visual impacts of the project. The trial court denied the plaintiff’s petition on all other issues.

Following trial, the court awarded the plaintiffs over $680,000 in attorneys’ fees, as well as over $80,000 in costs. The fees were awarded jointly and severally against the private developers and the City — meaning that the City and the developers were all individually responsible for the fees and costs. The City appealed, arguing that the plaintiffs were not entitled to attorneys’ fees, the amount of the award was improper, and that the real parties should be solely responsible for any fee award.

Plaintiffs Entitled to Attorneys’ Fees and the Amount was Proper
Under California Code of Civil Procedure section 1021.5, the private attorney general statute, the trial court has discretion to award attorneys’ fees to a successful party if, in part, its action resulted in the enforcement of an important public right and the general public received a significant benefit. The Second District Court of Appeal found that the plaintiffs were successful parties, as they succeeded on a significant issue in the litigation. The plaintiffs enforced an important public right as they were successful on their CEQA claims. Finally, the court held that the plaintiffs’ successful claims conferred a significant benefit on the public by allowing it to provide additional input on impacts from changes to Seaside Lagoon, as well as on impacts from the boat ramp’s location. Upon examining a number of factors, including the trial court’s methodology, the plaintiffs’ attorney’s hourly rate, the trial court’s reduction in the fee amount due to the plaintiffs’ partial success, and the fee enhancement granted, the court also found the trial court did not abuse its discretion and the amount of fees awarded was proper.

Joint and Several Liability
Finding no fault with the trial court’s decision to award fees jointly and severally, the court noted that the fee award was unlikely to fall on taxpayers because the real parties would be required to indemnify the City for its payment of fees under the terms of their existing indemnity agreement. Further, granting the fees jointly and severally allowed the plaintiffs to recover the fee award without difficulty. Even if the real parties did not pay, the City would be in the better position to compel payment given the indemnity agreement and the City’s preexisting relationship with the real parties.

This article first appeared in PublicCEO on April 12, 2021. Republished with permission.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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