However, Lodestar Had to Be Re-fixed on a Couple of Issues.
Plaintiff SONG, a non-profit, prevailed in an earlier appeal of a challenge to the environmental review of a project to amend Lancaster’s general plan to change the zoning designation so that a developer could construct a shopping center on a vacant lot of the city zoned for residential use. SONG moved to recoup fees from both Lancaster and the developer under CCP § 1021.5. To protect taxpayer funds because developer would not indemnify City for fees, Lancaster entered into a creative settlement agreement with SONG along the following lines: (1) Lancaster would pay SONG $150,000 in fees; and (2) if SONG obtained a collected fee award against developer, SONG would retain “fees on fees” for bringing the motion and would keep one-half of collected fees, but give the other half to City. Lancaster did not oppose SONG’s fee motion based on the settlement agreement.
The trial judge granted SONG’s fee motion, ruling that the proper responsible party for payment of $134,375 of fees was developer—in essence honoring the SONG-Lancaster settlement. However, the trial judge did base the lodestar award on reduced hourly rates and discounted for a reconsideration motion that the lower court itself had invited.
On appeal in Save Our Neighborhood Group v. City of Lancaster (AV California, LLC), Case Nos. B242866/B245047 (2d Dist., Div. 3 Sept. 4, 2014) (unpublished), the DCA panel affirmed the private attorney general entitlement basis of the award as to SONG, but reversed the amount of the award because it would have been higher.
CEQA challenges do involve the public interest, so entitlement was a given. Developer argued that non-profit was disenfranchised by not making a prelitigation settlement demand, but this only applies to catalyst cases—and this one was a noncatalyst case given that the matter proceeded to a judgment on the merits.
The real gripe by developer involved the division of the fee award as against City and developer based on the settlement agreement. The appellate court found nothing wrong in the division accomplished by the trial judge, finding equitable principles governed and rejecting a “Mary Carter” agreement traditional tort challenge. (It found nothing in the “sliding scale” settlement cases to indicate that these principles should apply to a 1021.5 fee recovery.)
With respect to the amount of fees involved, the appellate court reversed because (1) the lower court reduced the hourly rates on the lodestar because of the small size of the firms, with the reviewing court determining that relying arbitrarily on law firm size alone was a “no go”, and (2) the lower court should have awarded lodestar fees for reconsideration motion efforts on a standing issue on which the lower court itself wanted further briefing.