Lower Court Can Evaluate Factor Under Traditional Analysis, Not Having to Use More Nuanced L.A. Police Protective League Test—Especially Where Nuanced Test Not Raised Below.
This next one goes to show you that waiver can be a bitter bill to swallow—make sure you raise potential winning back-up arguments before the trial court or risk facing a forfeiture on appeal. That lesson was learned in a case where a litigant did win some portions of a public interest case, but did not meet its burden under the financial burden elements of the private attorney general statute (Code of Civil Procedure section 1021.5).
Appellant hotel lost some prior lawsuits and then won/lost some aspects of another state court proceeding involving Emeryville’s Measure C, an initiative enacted to regulate the terms and conditions of employment at the city’s large hotels. After spending over $500,000 to oppose Measure C in various proceedings, appellant hotel sought to recoup fees of $167,000 in partial successful prosecution of a writ of mandate proceeding, although admittedly waging the battle to avoid paying $350,000 under Measure C. The trial court denied fees altogether, and hotel appealed.
The fee denial was affirmed in Woodfin Suites Hotel, LLC v. City of Emeryville, Case No. A123106 (1st Dist., Div. 5 Mar. 15, 2010) (unpublished).
Affirmance primarly was based on the appellate court’s determination that the hotel had not satisfied the third element of the section 1021.5 test—whether the necessity and financial burden of private enforcement was such as to make an award appropriate.
This third element has been analyzed under two lines of authority. The first (and prevalent) test, dubbed the “traditional method,” focuses on whether the costs of the claimant’s legal victory transcend his personal interest. (Woodland Hills Residents Assn., Inc. v. City Council, 23 Cal.3d 917, 941 (1979) and scores of cited appellate cases in Woodfin Suites.) The second (and minority) line of authority, based on Los Angeles Police Protective League v. City of Los Angeles, 188 Cal.App.3d 1, 9-10 (1986), evaluates this factor through a three-step process, namely (1) determining the monetary value of the gains actually achieved in the litigation, (2) discounting the value of those gains by some estimate of the probability of success at the time the vital litigation decisions were made, and (3) comparing the discounted estimated value of the case with the actual litigation costs.
Appellant’s main problem was that the L.A. Police Protective test was not argued before the lower court, so that the appellate court’s job was made much easier—it determined the argument was forfeited on appeal. However, on the merits, the appellate court determined that the minority test was not the only method of evaluating the third factor such that there was no abuse of discretion in denying fees under the traditional method line of authority.
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