In Jenkins et al. v. Brandt-Hawley et al. (1st Dist., Div. 2, 2022) ___ Cal.App.5th ___, the First District Court of Appeal found that CEQA suits can be subject to malicious prosecution actions.  The Court of Appeal upheld an order denying an anti-SLAPP motion, allowing a malicious prosecution action to proceed against an attorney who litigated an unsuccessful CEQA challenge to the reconstruction of a single-family residence in San Anselmo.

Background

After purchasing a property in San Anselmo in 2017, Charles and Ellen Jenkins, learned that the home would have to be rebuilt to conform to present day building code requirements.  The Jenkins filed an application with the Town to authorize demolition of the home and development of a new home and detached studio on the property (the “Project”).  Neighbors objected to the design of the Project based on aesthetic and privacy concerns and the Jenkins worked with the neighbors to redesign the Project. 

The redesigned Project was approved by the Planning Commission on March 12, 2018.  The Planning Commission found that the Project was categorically exempt from CEQA for new construction of a single-family residence; that the residence was not historically significant and no historical resource exception to the exemption applied; and that the design was compatible with the character of the neighborhood.  But the neighbors remained unsatisfied and appealed the approval to the Town Council.  Prior to the Town Council hearing, neighbors urged the Jenkins to prepare a historic-resource evaluation, and the Jenkins obliged.  The report found that the property was not an eligible historic resource.  The Town Council affirmed the Planning Commission’s approval of the Project and its CEQA categorical exemption determination.

An association and an individual, represented by Susan Brandt-Hawley, filed a petition for writ of mandate challenging the Project for violations of CEQA and the Town Municipal Code.  The petitioners alleged that the Town had incorrectly concluded that the Project was categorically exempt from CEQA, arguing that the Town had adopted “mitigation measures” that foreclosed a categorical exemption.  The trial court denied the petition and found that Ms. Brandt-Hawley failed to lay out the record evidence supporting the Town’s approval, as required by law under the substantial evidence standard.  The trial court also rejected the Municipal Code violation claim based on an interpretation of the Code’s plain language.  Finally, the trial court found that the CEQA claim was barred by under the exhaustion doctrine because it had not been raised in the administrative proceedings.

Ms. Brandt-Hawley appealed the trial court’s decision and sought a writ of supersedeas to stay issuance of a demolition permit.  Ms. Brandt-Hawley almost immediately withdrew the petition for writ of supersedeas following conversations with the Jenkins.  Ms. Brandt-Hawley subsequently offered to withdraw the appeal if the Jenkins agreed to waive recovery of their fees and costs; the Jenkins declined.  On the day her opening brief was due, Ms. Brandt-Hawley voluntarily dismissed the appeal. 

Malicious Prosecution Suit and Anti-SLAPP Motion

The Jenkins filed a complaint against Ms. Brandt-Hawley and her firm for malicious prosecution.  Ms. Brand-Hawley filed a special motion to strike the complaint under Code of Civil Procedure section 425.16, an anti-SLAPP (Strategic Lawsuit Against Public Participation) motion.  Under Code of Civil Procedure section 425.16, a malicious prosecution claim is subject to a special motion to strike unless the court determines that the plaintiff has established that there is a probability that it will prevail on the claim.  The trial court held that the Jenkins did meet their burden and denied Ms. Brandt-Hawley’s anti-SLAPP motion.  Ms. Brandt-Hawley appealed, and the Court of Appeal affirmed the trial court’s denial. 

The Court of Appeal focused its analysis on the issue of whether the Jenkins established a probability of prevailing on their claim of malicious prosecution.  A malicious prosecution claim requires a showing that the prior action: (1) was commenced by or at the direction of the defendant and was pursued to a legal termination in plaintiff’s favor; (2) was brought without probable cause; and (3) was initiated with malice. 

The Court of Appeal agreed with the trial court that the Jenkins had shown a probability of prevailing on their contention that the Municipal Code and CEQA claims were without probable cause.  The Court found that Ms. Brandt-Hawley’s interpretation of the Municipal Code would be found unreasonable, arbitrary, and inconsistent with the rest of the statute.  The Court also noted that she never quoted the actual text of the code and instead provided misleading citations to the administrative record.  As to the CEQA claim, the Court found that it was legally untenable because it had been waived due to failure to exhaust the specific issue in the administrative hearings.  Even if the CEQA claim had not been waived, the Court found that the modifications were not CEQA mitigation measures under Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086. 

The Court lastly found that the Jenkins showed a probability of prevailing on the malice prong.  Malice is a fact specific issue and is met where “the proceedings are instituted primarily for an improper purpose.”  Lack of probable cause is relevant to the issue of malice, but by itself not enough.  The Court found that in addition to lacking probable cause, Ms. Brandt-Hawley exhibited several behaviors that showed malice, including misstating the record, showing indifference to the facts, and failing to conduct legal research.

At the close of the Court’s opinion, it addressed three amicus briefs filed in support of Ms. Brandt-Hawley.  The Court discerned that the three briefs “suggest that CEQA-related cases should be in essence immune or insulated from malicious prosecution cases, arguing things such as CEQA is too ‘uncertain’ and too ‘complicated’ for there ever to be a malicious prosecution claim.”  The Court rejected amici’s contentions and posed that allowing malicious prosecutions claims “should allow for a broad degree of freedom in legitimate CEQA advocacy, while also protecting litigation defendants (such as the Jenkins) from having to fend off litigation brought without probable cause and malice.”

Conclusion and Implications

This case has the potential to deter nuisance “NIMBY” lawsuits that so often stand in the way of important projects.  The Court of Appeal described the underlying CEQA litigation as “involv[ing] a group of well-off, ‘NIMBY’ neighbors living in one of the most expensive zip codes in the country trying to prevent their fellow neighbors from rebuilding a decrepit and dangerous residence on their property because the neighbors were concerned about privacy and the design aesthetics of the new build.”  This case may reflect a trend of appellate courts recognizing and reprimanding CEQA litigation abuse.  The decision follows other appellate decisions admonishing plaintiffs for using CEQA as a tool for delay or obstruction, including Dunning v. Johnson and Tiburon Open Space Committee v. County of Marin.  These cases serve as a stark warning to CEQA petitioners and their attorneys who pursue knowingly meritless CEQA claims simply to delay or obstruct projects.