On May 3, 2018, in partially published decision in La Mirada Avenue Neighborhood Association of Hollywood v. City of Los Angeles (2018) ­­­­2 Cal.App.5th 586, the Second District Court of Appeals upheld a plaintiff fee award under Code of Civil Procedure section 1021.5, including fees for plaintiff’s unsuccessful CEQA claims.

The underlying dispute concerns the city’s approval of a Target superstore in an area controlled by a subarea of a specific plan. In approving the project, the city granted eight variances to Target. The plaintiff prevailed on its claims that the six of the eight variances were not supported by substantial evidence, but lost on its CEQA claims. An appeal was dismissed as moot (Mirada I).

During the appeal’s pendency, the city created a new planning subarea for the project, where no variances would be required, and approved the project. Those approvals were vacated, and an appeal is pending.

This opinion concerns the lower court’s order of over $900,000 in plaintiff attorney’s fees from Mirada I. The city and Target appealed, contending that the plaintiff is not the successful party and that no significant benefit has been conferred on a large class of persons.  No fees have been earned, appellants contend, because Target successfully advocated for a change in the zoning law, which will allow the store to proceed, and the project’s validity under the changed law is yet to be determined. Appellants further argued that in any event, the fees are excessive. The Second District rejected all of those contentions.

The court applied the “catalyst test” to determine the plaintiff’s status as a successful party under CCP section 1021.5. Under the catalyst test, it is sufficient to earn fees if a plaintiff can demonstrate that their litigation motivated the defendants to alter their behavior. It does not require that the plaintiff achieve a specific outcome.

Here, the plaintiff was “successful” in two ways. First, they vindicated their interest when the variances were set aside and further development was enjoined. Second, the suit prompted the “legislative fix” of creating a changed zoning subarea for the project. The court also determined that the plaintiff conferred a “significant benefit” to the entire city of Los Angeles, considering the significance of the benefit and the size of the class receiving the benefit, in light of the circumstances. When the benefit is a policy change, as here, the court considers whether the law being enforced furthers a significant policy. The court found that the plaintiff secured the benefit of getting the city to comply with the municipal code concerning variances. The orderly enforcement of this vital public interest benefits all city residents.

The appellants also argued that since the suit concerning the new zoning subarea was still pending, the rights at issue were still unsettled, and therefore, the plaintiff was not entitled to fees. Resolving this issue in favor of the plaintiff, the court stated that where a party has obtained a final judgment in its favor on the merits, under the law in existence at the time, and where what remains to be finally adjudicated is the validity of a project under the law as subsequently amended, a plaintiff is entitled to fees.

In support of this rule, the court reiterated that the focus of the inquiry is the litigation objectives of the prevailing plaintiff, not the defendant’s goals. Plaintiff accomplished their stated purpose of judicial review of the city’s variance process. It was not necessarily their goal to stop the project entirely. Additionally, section 1021.5 does not require a showing that the entire dispute is settled. The plaintiff obtained a final judgment in their favor on the merits, under the law in existence at the time. A court can only resolve disputes based on existing law, not the law as it might be amended in the future. The court declined to contemplate whether plaintiff would be entitled to fees under the new zoning of the subarea, which was not at issue in the Mirada I litigation.

Finally, the court found that the lower court did not abuse its discretion in calculating the fee amount, including a multiplier, by allowing the attorneys to recover fees for their time spent on the unsuccessful CEQA claims, noting that attorneys cannot know from the outset which claims will be successful.