Prevailing Party, Receivers, Special Fee Shifting Statutes: City Of Norco v. Mugar Is Now A Published Decision.

Trial Court’s Determination That Plaintiff City Was The Prevailing Party Was Proper Under Catalyst Theory, City’s Arrangement With Outside Counsel Did Not Violate Defendant’s Due Process Rights, And Fee Award Of $60,798.94 To City Was Not Meant To Penalize Defendant For Defending Property Rights.

            We discussed City of Norco v. Mugar, Case No. E072858 (4^th Dist., Div. 2) – which was then unpublished – in our December 15, 2020 post.  Plaintiff City had filed a receivership action through outside counsel when defendant failed to abate what City described as 19 “life-safety hazards” on defendant’s property.  Although defendant eventually abated the 19 conditions, and the appointed receiver took no abatement action, City was declared the prevailing party and awarded $60,798.94 in fees and costs under Health and Safety Code § 17980.7(c)(11) – results that were affirmed on appeal.

            Determination that City was the prevailing party was proper under the catalyst theory.  Defendant’s due process rights had not been violated by City’s arrangement with outside counsel as City’s contract demonstrated that each of its demands and responses were determined by the City Council – not by outside counsel which had no contingency fee basis nor direct financial interest in the litigation outcome. 

            Additionally, the fees award did not constitute a penalty against defendant for exercising his First Amendment right to access and petition the courts to defend his property rights.  Rather, the purpose of the fee award is to encourage litigation by the successful party by making such litigation financially feasible.  Incidental restriction on conduct protected by the First Amendment is sufficiently justified “[1] if it is within the constitutional power of the Government; [2] if it furthers an important or substantial governmental interest; [3] if the governmental interest is unrelated to the suppression of free expression; and [4] if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.” (United States v. O’Brien, 391 U.S. 367, 377 (1968).)

            We can now report that City of Norco v. Mugar was certified for publication on January 8, 2021.