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In Bldg. A Better Redondo v. City of Redondo Beach (2021) 2021 Cal. App. Unpub. LEXIS 1038, the Second District Court of Appeal upheld an $80,000 costs and $683,000 attorney fee award, following a partially successful CEQA challenge. The Court rejected ten challenges to the award (bulleted below) including challenges to the $650/hour rate, fees for Petitioners’ counsel attending a City Council hearing after litigation commenced, and for holding the City jointly and severally liable.

In 2015, the City of Redondo Beach (City) partnered with real parties to redevelop a harbor area. The proposed improvements included a new boat-launch ramp and modifications to an existing seaside swimming facility which would intermingle treated water with untreated water from the harbor. The City circulated a DEIR for the project in 2015, and in 2016, released a FEIR which included a staff-recommended alternative for a new location for the boat-launch ramp (notably sited at a location the DEIR had rejected). The City certified the FEIR, selected the new alternative location, and approved the project. Petitioners challenged the approval based on over a dozen CEQA claims. Following extensive briefing, the trial court held that the EIR was inadequate in several respects: it failed to adequately discuss impacts associated with the safety of the selected boat launch ramp location, public health and water quality issues associated with mingling formerly treated water at the swimming facility with untreated water from the harbor, and aesthetic views from a nearby park. The trial court took particular issue with the EIR’s selection of the alternative boat ramp location without allowing additional public comment and discussion beforehand. The trial court rejected Petitioner’s remaining claims and ordered the City to set aside its certification and prepare a new CEQA document addressing the relevant issues.

Following the trial court’s ruling, Petitioners sought nearly $960,000 in attorney fees under Cal. Code of Civ. Proc. section 1021.5, including a fee enhancement 1.4 times the requested lodestar amount. The trial court granted the motion, reasoning that Petitioners were entitled to fees because they prevailed on “several significant EIR issues.” The trial court observed that compliance with its holding could result in changes to the project, the partial victory enforced the important public right of disclosing a project’s potential impacts, and that the successful claims conferred a significant benefit on the public by allowing for additional public input. The court did, however, recognize that the victory was partial in nature, and reduced the requested fees by 20 percent, resulting in a total award of $683,000 in addition to approximately $80,000 in costs.

On appeal, the City and real parties (cumulatively, Appellants) challenged the attorney fees and cost awards. Appellants reasoned that Petitioners were not entitled to attorney fees and costs under Code of Civil Procedure sections 1021.5 and 1032. In the alternative, Appellants argued that the trial court abused its discretion in awarding the costs and fees. The Court struck down each of these challenges and affirmed the trial court’s awards in full.

The Court of Appeal considered the propriety of awarding attorney fees under section 1021.5. Appellants argued that the award was improper because Petitioners were not “successful parties,” they did not enforce an important public right, and that their partial victory did not confer a significant benefit on the public. The Court disagreed, confirming that partially prevailing parties may be considered “successful parties” for purposes of section 1021.5 and are entitled to seek attorney fees. The Court affirmed the trial court’s determination that the partial victory here enforced an important public right conferring a significant benefit on the public by enforcing CEQA’s public disclosure and input functions.

The Court considered and rejected the following ten claims challenging the amount of attorney fees awarded.

• Appellants argued that the trial court arbitrarily chose a fee amount it found reasonable and adjusted factors as needed to justify that predetermined number. The Court of Appeal disagreed, explaining that trial courts may exercise their discretion to adjust fee multipliers and lodestars following an analysis considering the amount of fees appropriate under the circumstances.

• Appellants argued that the trial court abused its discretion by refusing to reduce a $650 hourly rate for Petitioner’s counsel. The Court held that the rate was proper and reflected the reasonable value of counsel’s experience, skill, and reputation, as well as the difficulty and complexity of the litigation to which that skill was applied.

• Appellants claimed that the lodestar reduction of 20 percent should have instead been an 80 percent reduction. Appellants reasoned that Petitioners only prevailed on four of their twelve CEQA claims, focused a third of their briefing on unsuccessful claims, and abandoned a cause of action prior to briefing. The Court found that reducing the lodestar in this case was appropriate, but that an 80 percent reduction was far too severe and would act to deter private attorney generals. The Court of Appeal held that the trial court was not required to follow a formulaic approach in reducing the lodestar, and was entitled to consider the qualitative significance of the issues in making their decision.

• The fourth and fifth challenges to the amount of fees alleged that the trial court abused its discretion by awarding fees associated with ultimately fruitless motions. In both arguments, the Court held that the award was appropriate because the motions were not brought frivolously and that the lack of ultimate success did not deprive the trial court of its discretion to award fees for time spent on preparing and defending those motions.

• The Court of Appeal summarily affirmed the trial court’s award of attorney fees for time spent preparing comment letters that the City ultimately rejected as untimely, based on both the City’s later consideration of the merits of the comment letters and Appellant’s failure to sufficiently plead its claim. Similarly, Appellants failed to establish that Petitioner’s billing was excessive or duplicative.

• Appellants also challenged a portion of the fee award associated with attending a council meeting following the commencement of litigation. At that meeting, attorneys for the Petitioner addressed city council on the boat ramp location and a Coastal Act issue. The Court upheld the award, noting that council’s presence at the meeting – while conducted after the start of litigation – concerned a CEQA issue contained in the petition and was of sufficient relation to the case to warrant the award.

• Appellants challenged the trial court’s rationale in applying the lodestar multiplier, arguing that Petitioners did not deserve a fee enhancement for a “typical, run-of-the-mill CEQA action.” The Court explained that the trial court’s multiplier was appropriate, given that the case was complex and raised a novel issue involving a “rarely used provision” of CEQA, though the Court did not identify what the novel issue or rarely used provision was. The Court further rationalized the multiplier due to the risk of failure in litigation being placed on Petitioner’s counsel, who had agreed to a $90,000 fee cap and substantially reduced hourly rate for what amounted to 18 months of active litigation and an over 100-page trial court opinion.

• Appellants’ final fee challenge focused on the trial court’s decision to hold the City jointly and severally liable with real parties for the fee award. Appellants argued that this decision would be inconsistent with the trial court’s previous finding that the award was unlikely to fall on taxpayers due to an indemnity agreement between the City and real parties. The Court of Appeal held that there was no actual inconsistency. The real parties would be required to indemnify the City for its payments under the terms of the agreement, and that requiring the City to pay fees, which it would be able to recover from real parties, was unlikely to result in taxpayer costs.

In addition to attorney fees, Appellants challenged the propriety and amount of the trial court’s $80,000 costs award under section 1032. The Court of Appeal upheld the cost award, applying the same principles in the “successful party” determination under section 1021.5. The Court similarly upheld the amount of the trial court’s award, based on the same discretionary powers afforded to trial courts in the attorney fees section of the opinion.