In North County Watch v. County of San Louis Obispo, 2015 Cal. Unpub. LEXIS 4275, the Second District Court of Appeal affirmed the trial court’s decision to award only a small portion of the attorney fees sought by the petitioner on the basis of their limited success in the litigation.  The dispute resulting in the underlying litigation began when Santa Margarita Ranch (SMR) applied for San Luis Obispo County (County) permission to divide its 14,000 acre property into 111 residential parcels, five open space parcels, and one remainder parcel. North County Watch (NCW) sued, alleging the County’s EIR certification violated CEQA, the County’s findings were not supported by substantial evidence, the County’s approval of the tentative tract map violated the Subdivision Map Act, and that the project conflicted with the County’s General Plan.

The trial court ruled that the County violated CEQA by limiting off-site air mitigation fees to $204 per household, and that the County had not complied with federal protocol for determining the presence of Vernal Pool Fairy Shrimp (VPFS) in the project’s seven vernal pools. The County performed a one-year VPFS study where a two-year study was required by the standard protocol for VPFS studies.

NCW moved for attorney fees under Cal. Civil Code section 1021.5. NCW requested approximately $269,000 but were awarded $54,600 plus $11,774 in costs. The court reasoned that NCW only succeeded on three litigated matters: the air pollution issue, the vernal pool issue, and the attorney fee motion. The court held SMR and the County each liable for half of the fees.

NCW appealed, alleging the trial court applied the wrong formula for partial success and should have awarded the undisputed amount spent on matters that were clearly necessary to the litigation. The appellate court disagreed, ruling that the trial court did not abuse its discretion by reducing the attorney fees award. The court cited similar decisions where courts substantially reduced fees awarded relative to the success of claims raised by the prevailing parties.

The County also cross-appealed the lower court’s decision, claiming they were not an “opposing party” and therefore not liable for NCW’s attorney fees. The court disagreed, holding that a public agency that initiates and maintains an action or policy that is challenged, cannot avoid a fee award by refusing to oppose the litigation.

The County also argued it was not a losing party in the litigation. The County argued a party cannot become a losing party unless it places itself in a position that is adverse to the prevailing party. The court disagreed, ruling that a party is liable for attorney sees under section 1021.5 if they are responsible for initiating and maintaining actions or policies that are harmful to public interest and give rise to litigation. Here, the County was an opposing party because it was responsible for initiating and maintaining the actions and policies that led to the litigation.