In Physicians for Social Responsibility v. Department of Toxic Substances Control (Cal. Ct. App., Mar. 4, 2026, No. C100487) 2026 WL 607684, the Third District affirmed the denial of attorney fees, concluding the catalyst theory does not apply after a plaintiff loses the case on the merits.
Key Takeaways
- Catalyst theory has limits after a merits loss. A plaintiff cannot recover attorney fees under Code of Civil Procedure §1021.5 when the underlying action has already been resolved against them on the merits. Once a court determines that the claims lack merit, there is no “threat of victory” to support catalyst fees.
- Voluntary agency actions after litigation do not automatically trigger fees. Even where an agency later adopts an approach like what plaintiffs sought—here, analyzing demolition impacts in a later EIR—that action will not support catalyst fees if it occurs after the agency has already prevailed in the litigation.
- Chronology alone is not enough to establish a catalyst. Courts will look for a causal connection between the lawsuit and the relief obtained, not merely the sequence of events. Where relief is provided after the defendant has won the case, the inference that litigation caused the change in conduct disappears.
Background
Area IV at the Santa Susanna Field Laboratory (SSFL) in Ventura County was leased by Boeing to the Department of Energy for nuclear research, resulting in significant soil and groundwater contamination. Following the program’s termination, cleanup efforts were overseen by several federal and state agencies, including the Department of Toxic Substances Control (DTSC). Concerned with Boeing’s plan to demolish four structures in Area IV, Physicians for Social Responsibility – Los Angeles (Physicians) filed suit alleging the demolition required CEQA review and that DTSC had failed to conduct the necessary environmental analysis. Both the trial court and the Third District rejected the claim, concluding the demolition was a private activity within Boeing’s discretion and therefore not subject to CEQA.
After prevailing in the litigation, DTSC issued a final EIR for the SSFL cleanup that analyzed the demolition impacts as part of the project’s overall environmental review. Although DTSC stated it was not required to evaluate the demolition, it included the analysis to provide a conservative assessment of cleanup impacts. Physicians then sought attorney fees under the catalyst theory, arguing the lawsuit prompted DTSC to analyze the demolition impacts. The trial court denied the request, finding Physicians were not a successful party, and the Third District affirmed.
Appellate Decision
The appellate court affirmed, holding that Physicians were not entitled to attorney fees under the catalyst theory. Under that theory, a plaintiff may recover fees without a judicial determination on the merits if the litigation prompts the defendant to change its conduct in the manner sought because of the threat of an adverse judgment. Here, however, the underlying case was fully litigated and resolved against Physicians, and the relief they sought was voluntarily provided only after DTSC had already prevailed.
The court distinguished Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, where the California Supreme Court upheld a catalyst-based fee award even though the plaintiffs did not obtain a favorable final judgment. In Graham, however, the defendant provided the requested relief during litigation under the “threat of victory,” rendering the case moot. By contrast, Physicians lost the case on the merits before DTSC later chose to analyze the demolition impacts in the final EIR.
Physicians also argued that the chronology of events showed the lawsuit was the catalyst for DTSC’s decision to include the demolition analysis. The court rejected this argument, noting that the final EIR was issued after the court had already ruled in DTSC’s favor, eliminating any “threat of victory.”
Finally, the court rejected Physicians’ public policy arguments, emphasizing that catalyst fees are included to reward litigation that successfully prompts a defendant to change its conduct. Because DTSC’s actions occurred only after it had prevailed in the litigation, the catalyst theory did not apply.
– Hannah Rider


