Fourth District Court of Appeal Sustains Dramatic Reduction in Attorneys’ Fees Claim Under CEQA

On April 13, 2015, California’s Fourth District Court of Appeal published its recent (March 18, 2015) opinion upholding a lower court decision to drastically limit the amount of attorneys’ fees in a CEQA case under the state’s private attorney general law, California Code of Civil Procedure section 1021.5. The opinion strongly supports the general principle that awarding attorneys’ fees is a matter of discretion with the trial court – even an award that dramatically reduces the amount requested by a plaintiff must be sustained if the trial court has not abused its discretion.

In Save Our Uniquely Rural Community (SOURCE) v. County of San Bernardino, et al., a local community group filed a CEQA action challenging the approval of an Islamic center and mosque in a residential neighborhood in an unincorporated part of San Bernardino County. The California superior court granted the plaintiff’s petition for writ of mandate and overturned the approval based on the County’s failure to conduct a proper analysis of the project’s anticipated environmental impacts.

The plaintiff then filed a motion to recover a total of $211,198, applying a multiple of two to its underlying “lodestar” fee claim. The trial court agreed that an award of fees in some amount was appropriate under section 1021.5, insofar as the plaintiff demonstrated that it had conferred a substantial benefit to the public in prevailing on the merits of the CEQA claim. But it also found that both the amount of the lodestar claim and multiplier proposed by the plaintiff’s attorneys were unreasonable; so unreasonable that the trial court limited recovery to just $19,176 – over an order of magnitude below what had been sought.

The Fourth District affirmed the lower court’s decision in all respects. The Court of Appeal confirmed that any award of attorneys’ fees under section 1021.5 is governed by the “abuse of discretion” standard and must not be disturbed unless “the trial court exercised its discretion in an arbitrary, capricious, or patently absurd manner that resulted in a manifest miscarriage of justice.” In this case, the Court of Appeal found that the trial court had not abused its discretion in reducing the proposed lodestar fee, given the fact that the plaintiff had only prevailed on one of a number of different claims asserted in the original writ petition. It also agreed that the amount of time the attorneys claimed they had spent on various motions, briefs and other tasks appeared excessive, and the proposed use of elevated billing rates more common in other parts of the state was unwarranted.

As to the multiplier issue, the Court of Appeals also agreed that the trial court had not abused its discretion in finding that a double multiplier was inappropriate in this case. The trial court had found the multiplier proposed by the plaintiff could not be justified by any “contingent risk factors” that had been alleged, nor by any consideration of the alleged “complexity” of the plaintiff’s CEQA claim. As to the plaintiff’s argument that the trial court erred by not undertaking a precise, arithmetic “lodestar” calculation in resolving the overall fee claim, the Court of Appeal said that such a calculation was not required so long as the record supported the trial court’s determination to reduce the award as a general matter.

Conclusion

The opinion issued by the Court of Appeal in this case should give even successful CEQA plaintiffs some pause when considering how aggressively to pursue attorneys’ fee claims under a private attorney general theory. It is clear from the opinion that the Court thought the plaintiff’s lawyers were overreaching to the point of losing any credibility with the trial court on this issue. Under the circumstances, counsel and their clients are likely to get little sympathy from a higher court when the matter is taken up on appeal.