Author Archives: Collin McCarthy

Fourth District Court of Appeal Finds San Diego County Climate Action Plan and Supplemental EIR Inadequate Under CEQA

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On June 12, 2020, the Fourth District Court Appeal issued a decision in Golden Door Properties, LLC v. County of San Diego (2020) 50 Cal.App.5th 467 invalidating San Diego County’s approval of a Climate Action Plan and related Guidelines for Determining Significance of Climate Change, and holding that the County’s Supplemental Environmental Impact Report failed to comply with CEQA. In what is now the third published decision dealing with San Diego County’s 2011 general plan update process, the Fourth District panel largely affirmed the trial court’s judgment in the three consolidated cases challenging the County’s adoption of the CAP and SEIR, including with respect to the primary issue in the case—whether the County’s GHG mitigation measure allowing for the purchase of out-of-County carbon offset credits complied with CEQA. The appellate court reversed the trial court’s judgment on some issues, however, finding the CAP to be sufficiently consistent with the County’s general plan update and the County’s responses to comments on the SEIR adequate under CEQA.

Background

In 2011, San Diego County prepared a Program Environmental Impact Report (PEIR) and adopted a general plan update (GPU) for the unincorporated areas of the County. In order to mitigate GHG emissions that would result from buildout of the general plan update to a level consistent with State-mandated GHG emissions reductions targets, the PEIR included a mitigation measure requiring that the County prepare a climate action plan (CAP). The County began preparing the CAP following the adoption of the GPU, which generally entailed establishing a baseline inventory of known and foreseeable GHG emissions in the County and developing 26 GHG emissions reduction measures for future development projects to implement. The County also prepared a checklist and Guidelines for Determining the Significance of GHG Emissions so that future projects’ consistency with the CAP could be assessed as part of the CEQA process.

In 2018, in order to evaluate the environmental impacts of implementing the CAP, the County prepared a Supplemental EIR (SEIR). The SEIR acknowledged that more than 20 projects proposing general plan amendments were in-process but not approved at the time the SEIR was prepared, and that such projects could result in significant GHG emissions not accounted for in the CAP. To mitigate these potentially significant GHG emissions, the County devised a mitigation measure, M-GHG-1, requiring that any projects that would increase the density or intensity of land use above what is permitted under the GPU to mitigate emissions to a level consistent with the CAP assumptions (i.e., net zero or no new emissions). Under M-GHG-1, mitigation of GHG-emissions was to be accomplished first by incorporating all feasible onsite design features, such as measures to prioritize transit, biking, and walking. Then, in the event project design features were unavailable or insufficient to fully mitigate the additional GHG emissions, M-GHG-1 allowed for the use of offsite mitigation, including the purchase of carbon offset credits, which could be obtained from certain qualifying registries relying on offsets located virtually anywhere in the world.

Following the County’s adoption of the SEIR, CAP, and related Guidelines for Determining the Significance of GHG Emissions, Sierra Club and Golden Door Properties filed separate petitions for a writ of mandate challenging the County’s approvals, alleging multiple violations arising under CEQA and Planning and Zoning Law. After consolidating the two actions (along with a third, previously-stayed case), the trial court granted a peremptory writ of mandate, ordering the County to set aside its approvals. The trial court determined that the CAP was inconsistent with the General Plan, and that mitigation measure M-GHG-1’s reliance on out-of-County carbon offsets violated CEQA. The trial court also determined that the SEIR violated CEQA by inadequately analyzing cumulative impacts, impacts to energy and environmental justice, and project alternatives, and that the County failed to adequately respond to comments on the draft SEIR.

Following the entry of judgment and issuance of the writ, the County appealed.

Court of Appeal

While the appellate court’s 123-page decision addresses a host of legal issues, the primary issue on appeal was whether the SEIR mitigation measure M-GHG-1 violated CEQA’s requirements for mitigation due to the standards imposed, or lack thereof, for the use of out-of-County offsets to mitigate GHG emissions in projects requiring a general plan amendment. Citing CEQA Guidelines section 15126.4, subdivision (c)(3), the court explained that while it is well-established that the use of offsets can be part of a GHG mitigation strategy, the use of such offsets must be “properly restricted” with “verified offsets” that ensure GHG reductions in fact occur. Here, the appellate court held, M-GHG-1 failed to satisfy CEQA’s requirements for adequate GHG mitigation.

Relying heavily on the standards governing the State Cap-and-Trade Program and related California Air Resources Board regulations, the court of appeal agreed with the trial court that the County’s GHG mitigation measure M-GHG-1 lacked sufficient performance standards to ensure the offsets relied on are “real, permanent, verifiable, and enforceable.” Specifically, the court noted that while M-GHG-1 contained some standards governing the entities through which offsets may be purchased, namely, a CARB-approved registry or “any other reputable registry or entity that issues carbon offsets consistent with … [Health and Safety Code] section 38562 [subdivision] (d)(1),” M-GHG-1 did not include any standards or protocols that such qualifying registries must implement to ensure the validity of the offset credits claimed. In the absence of such standards or safeguards, the court found that M-GHG-1 failed to adequately ensure offsets are real, additional, and enforceable and for that reason was inadequate under CEQA.

In addition to the lack of sufficient standards for out-of-County carbon offsets, the court of appeal also held that M-GHG-1 violated CEQA as the measure improperly deferred mitigation. Under M-GHG-1, the County planning director was afforded discretion to approve the use of particular offsets, including determinations such as whether the issuing entity is “reputable” and whether there are no other “financially feasible” offsets “available” in a closer location. On this issue, the court explained that while CEQA allows the specific details of a mitigation measure to be developed after project approval where it is impractical or otherwise infeasible to do so during the environmental review process, in such instances that agency must (1) commit itself to the mitigation, (2) adopt specific performance standards the mitigation will achieve, and (3) identifies the type(s) of potential action(s) that can feasibly achieve that performance standard and that will be considered, analyzed, and potentially incorporated in the mitigation measure.n this case, the court held that M-GHG-1 failed to meet these requirements.

In holding M-GHG-1 violated CEQA as an improper deferral of mitigation, the court of appeal emphasized that M-GHG-1 contained no objective standards for the director to apply in determining whether offsets originating in foreign countries are real, permanent, verifiable, enforceable, and additional. As the court explained, M-GHG-1 entrusted the planning director with making several determinations such as whether the proposed offset registry is “reputable” or whether other offsets are “financially feasible,” however, the measure lacked objective criteria to govern such determinations. Further, the court held that because M-GHG-1 failed to comply with CEQA, the County’s CAP was also inadequate, because, to the extent the CAP assumed that in-process and future projects requiring a general plan amendment would not result in significant GHG impacts based on compliance with M-GHG-1, the County’s finding was not supported by substantial evidence.

In addition to the court’s lengthy analysis of M-GHG-1, the court of appeal’s decision also considered the plaintiff’s arguments that the County’s SEIR failed to comply with CEQA on several other grounds. The appellate court largely agreed with the plaintiffs and affirmed the trial court’s decision, including finding that the SEIR’s cumulative impact analysis was inadequate by failing to analyze impacts other than GHG emissions; that the County’s finding of consistency with the SANDAG Regional Transportation Plan was not supported by substantial evidence; and that the County’s alternatives analysis was inadequate for failing to consider a project alternative aimed at reducing vehicle miles traveled or “VMT”. The appellate court reversed the trial court’s judgment on two issues, however, finding the County’s determination the CAP was consistent with the general plan update was adequately supported under the highly deferential standard of review and that the County’s responses to comments on the draft SEIR were sufficient under CEQA.

Third District Court of Appeal Upholds EIR for Chico Walmart Expansion Against Challenge to Urban Decay Analysis

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In a partially published decision issued on October 3, 2019, the Third District Court of Appeal affirmed a judgment upholding an EIR for a Walmart expansion project in Chico against challenges to the EIR’s urban decay analysis. (Chico Advocates for a Responsible Economy v. City of Chico (2019) 40 Cal.App.5th 839.)

In 2015, Walmart applied to the city to expand its existing Chico store in a regional retail center that includes the Chico Mall and several national chain retail stores. A FoodMaxx grocery store is also nearby. Walmart planned to expand its existing store by approximately 64,000 square feet, add an eight-pump gas station, and create two new outparcels for future commercial development. Approximately 49,000 square feet of the new space would be used for grocery-related sales.

The city prepared an EIR for the project that included, among other things, a “robust 43-page urban decay analysis.” The urban decay analysis was supported by a 123-page expert study prepared by ALH Urban & Regional Economics. The purpose of the ALH study was to assess the economic impact of the project on retailers in the surrounding area and to evaluate the extent to which the project could contribute to store closures and urban decay. For purposes of the study, “urban decay” was defined as “visible symptoms of physical deterioration . . . that is caused by a downward spiral of business closures and long term vacancies . . . [and]. . . so prevalent, substantial, and lasting for a significant period of time that it impairs the proper utilization of the properties and structures, and the health, safety, and welfare of the surrounding community.”

The ALH study concluded that, on its own, the project would have a negligible impact on sales for competing retailers and that store closures were not expected to follow. Based on these findings, the EIR concluded that the project would not cause the type of severe economic effects that would lead to urban decay. With regard to cumulative impacts, the ALH study concluded that the project, when combined with other planned retail projects in the area, could induce the closure of one full-service grocery store. The city’s retail vacancy rate, however, would only increase by approximately one percent and would remain “well within the range of a robust, healthy commercial retail sector.” The EIR further explained that Chico has a strong history of “backfilling” store vacancies, that existing vacant properties are well-maintained, and that the city has regulations to prevent decay and blight. For these reasons, the EIR concluded that although some economic impacts were expected, cumulative impacts likely would not result in urban decay.

Following the city’s certification of the EIR, Chico Advocates for a Responsible Economy (CARE) challenged the urban decay analysis in an administrative appeal to the city council. CARE supported its challenge with its own “retail expert” report refuting the city’s analysis. The city council denied the appeal.  CARE then filed a petition for writ of mandate seeking to rescind the EIR and project approvals. The trial court denied the petition in full and CARE appealed.

On appeal, CARE challenged the EIR’s urban decay analysis on two grounds. First, CARE argued that the EIR relied on an “unnaturally constrained” definition of “urban decay” and, as a result, failed to treat the loss of “close and convenient shopping” as a significant environmental impact. Second, CARE argued that, due to flaws in the ALH study’s methodology, the EIR’s urban decay findings were not supported by substantial evidence.

Addressing the first issue, the court began its discussion by explaining the applicable standard of review for allegations that an EIR failed to include necessary information. Citing the Supreme Court’s recent decision in Sierra Club v. County of Fresno (2018) 6 Cal.5th 502, the court explained that CARE’s argument presented the predominantly legal question of whether the EIR included enough detail “to enable those who did not participate in its preparation to understand and consider meaningfully the issues raised by the proposed project,” which is subject to independent review. On this issue, the court found “CARE’s argument lacks merit – the City did not violate CEQA because the potential loss of close and convenient shopping is not an environmental issue that must be reviewed under CEQA.” “CEQA is concerned with physical changes in the environment,” the court explained, and “[a]lthough the loss of close and convenient shopping could impact some Chico residents psychologically and socially, such impacts are not, by themselves, environmental impacts.”

Next, the court turned to CARE’s attack on the methodology for the urban decay analysis. CARE alleged three flaws with the urban decay study’s methodology. First, CARE argued that the study relied on incorrect assumptions for calculating the anticipated grocery sales. Second, CARE argued that the study underestimated impacts on Chico stores by incorrectly assuming shoppers from the neighboring Town of Paradise would patronize the Walmart. Lastly, CARE argued that the study incorrectly assumed economic impacts would be spread amongst existing stores, rather than concentrated on the closest competitor – the FoodMaxx grocery.

In rejecting each of CARE’s arguments, the court explained that challenges to the EIR’s methodology are reviewed under the substantial evidence standard. Under this standard, challenges to the EIR’s methodology “must be rejected unless the agency’s reasons for proceeding as it did are clearly inadequate or unsupported.” Moreover, the court explained, when an agency is faced with conflicting evidence on an issue, it is permissible to give more weight to some evidence than others – mere “disagreement among experts” does not render an EIR inadequate.

In this case, the court concluded that CARE’s challenge amounted to “nothing more than differences of opinion about how the Project’s expected grocery sales should be estimated, how the Project’s market area should be defined, and which competitors are most susceptible to impacts from the Project.” These differences in opinion, the court explained, did not render the EIR’s analysis clearly inadequate or unsupported. Therefore, CARE’s challenge failed under the substantial evidence test.

The court further noted that although CARE’s own expert report showed additional store closures would occur, CARE failed to demonstrate how such closures would lead to urban decay. As the court explained, “Store closures, by themselves, do not amount to urban decay.”

Fourth District Affirms California Coastal Commission’s Authority to Impose Conditions on Coastal Development Permits Under Local Coastal Programs

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On September 19, 2019, the Fourth District Court of Appeal issued its decision in Lindstrom v. California Coastal Commission (2019) 40 Cal.App.5th 73, in which the appellate court partially reversed the trial court’s decision and held that the California Coastal Commission did not abuse its discretion with regard to three of four special conditions imposed on a coastal development permit for a residential project in the City of Encinitas. In upholding the three special conditions, two of which concerned setback requirements and the other prohibiting the construction of any shoreline protective devices, the court of appeal found the conditions to be consistent with the City’s local coastal program and within the Commission’s authority. The court ordered that the fourth condition be deleted or revised, however, as it found the Commission’s requirement that the home be removed if “any government agency” orders so “due to a natural hazard” to be both overly broad and unreasonable.

Background

In 2012, the Lindstroms applied for a coastal development permit with the City of Encinitas (City) to build a home atop a 70-foot high ocean-side bluff. To comply with the City’s Local Coastal Program (LCP), the permit application included a geotechnical report prepared by Geotechnical Exploration Inc. (GEI), an engineering firm hired by the Lindstroms. The LCP required the report to, among other things: (i) certify that the development would not endanger the bluff or require future bluff stabilization devices (i.e. coastal armoring or seawalls) based on a 1.5 safety factor over a 75-year time period, and (ii) calculate the minimum setback required for the development – a figure that could not be less than 40 feet. The GEI report concluded the proposed project could be built with a 40-foot setback without requiring bluff stabilizing measures in 75 years.

On May 2, 2013, the City’s planning commission approved the development permit with a condition requiring the Lindstroms to provide a letter stating the building could be removed in the event of endangerment. On May 28, 2013, GEI submitted a revised technical analysis which concluded the earlier report erred in calculating the development’s feasible setback. The new report stated the project would require a 72.25-foot setback, and proposed an alternate analysis based on the “natural angle of repose,” which would yield a 39.7-foot setback.

In June 2013, two Coastal Commission Commissioners appealed the City’s approval of the permit on grounds that it was inconsistent with the LCP. During the appeal process, the Lindstroms hired a second engineering firm, TerraCosta Consulting Group (TCG) and requested the Commission delay its decision. In October 2015, TCG prepared a new geotechnical report which concluded the slope would be safe with a 40-foot setback at a 1.29 safety level – a figure lower than the LCP-mandated 1.5 safety level.

The Coastal Commission heard the appeal in July 2016. As part of the appeal, a staff geologist concluded the proper setback should be 60 to 62 feet. The Commission agreed with the staff geologist, and approved the permit with four special conditions. The first condition (“Condition 1.a”) required construction to adhere to a 60- to 62-foot setback. The second condition (“Condition 3.a”) prohibited all use of coastal armoring devices. The third condition (“Condition 3.b”) required removal of the home in the event a government agency deemed occupancy unsafe due to natural hazards. The fourth condition (“Condition 3.c”) imposed mandatory remediation measures that the landowners would be required to take in the event hazardous bluff conditions threatened the structure.

In August 2016, the Lindstroms filed a petition for writ of mandate challenging the Commission’s conditions of approval. The trial court partially granted the petition and found in favor of the Lindstroms as to the first and second conditions (Conditions 1.a and 3.a) but found the Commission did not abuse its discretion in imposing the third and fourth conditions (Conditions 3.b and 3.c). The Commission and the Lindstroms appealed.

The Fourth District’s Decision

On appeal, the Fourth District Court of Appeal partially reversed the trial court’s holding, siding with the Commission on three of the four special conditions. Relying on the plain language in the City’s LCP and the Coastal Commission’s authority to impose reasonable conditions so long as they are consistent with the Coastal Act and the LCP, the court found the Commission did not abuse its discretion when it imposed Conditions 1.a, 3.a, and 3.c.  The court held that Condition 3.b, however, was improperly broad and not reasonably related to achieving the LCP’s purpose. That condition required that the Lindstroms remove their home in the event “any government agency” deemed it a “natural hazard.” That condition, according to the court, was poorly drafted and could have been read to require the Lindstroms to remove their home under unreasonable circumstances. The court therefore ordered the trial court enter a new judgment requiring the Coastal Commission to either delete or revise and clarify the condition.

 

Bridget McDonald

Fourth District Affirms California Coastal Commission’s Authority to Impose Conditions on Coastal Development Permits Under Local Coastal Programs

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In Lindstrom v. California Coastal Commission (2019) 40 Cal.App.5th 73, the Fourth District Court of Appeal partially reversed the trial court, finding the California Coastal Commission did not abuse its discretion when it imposed special conditions on a coastal development permit for a residential project proposed on a vacant lot in the City of Encinitas. The court found three of four conditions were consistent with the City’s local coastal program and within the Commission’s authority. The court rejected one condition because it was overbroad, unreasonable, and did not achieve the Commission’s purpose.

Background

In 2012, the Lindstroms applied for a coastal development permit with the City of Encinitas (City) to build a home atop a 70-foot high ocean-side bluff. To comply with the City’s Local Coastal Program (LCP), the permit application included a geotechnical report prepared by Geotechnical Exploration Inc. (GEI), an engineering firm hired by the Lindstroms. The LCP required the report to, among other things: (i) certify that the development would not endanger the bluff or require future bluff stabilization devices (i.e. coastal armoring or seawalls) based on a 1.5 safety factor over a 75-year time period, and (ii) calculate the minimum setback required for the development – a figure that could not be less than 40 feet. The GEI report concluded the proposed project could be built with a 40-foot setback without requiring bluff stabilizing measures in 75 years.

On May 2, 2013, the City’s planning commission approved the development permit with a condition requiring the Lindstroms to provide a letter stating the building could be removed in the event of endangerment. On May 28, 2013, GEI submitted a revised technical analysis which concluded the earlier report erred in calculating the development’s feasible setback. The new report stated the project would require a 72.25-foot setback, and proposed an alternate analysis based on the “natural angle of repose,” which would yield a 39.7-foot setback.

In June 2013, two Coastal Commission Commissioners appealed the City’s approval of the permit on grounds that it was inconsistent with the LCP. During the appeal process, the Lindstroms hired a second engineering firm, TerraCosta Consulting Group (TCG) and requested the Commission delay its decision. In October 2015, TCG prepared a new geotechnical report which concluded the slope would be safe with a 40-foot setback at a 1.29 safety level – a figure lower than the LCP-mandated 1.5 safety level.

The Coastal Commission heard the appeal in July 2016. As part of the appeal, a staff geologist concluded the proper setback should be 60 to 62 feet. The Commission agreed with the staff geologist, and approved the permit with four conditions. The first condition (“Condition 1.a”) required construction to adhere to a 60- to 62-foot setback. The second condition (“Condition 3.a”) prohibited all use of coastal armoring devices. The third condition (“Condition 3.b”) required removal of the home in the event a government agency deemed occupancy unsafe due to natural hazards. The fourth condition (“Condition 3.c”) imposed mandatory remediation measures that the landowners would be required to take in the event hazardous bluff conditions threatened the structure.

In August 2016, the Lindstroms filed a petition for writ of mandate challenging the Commission’s conditions of approval. The trial court partially granted the petition and found in favor of the Lindstroms as to the first and second conditions (Conditions 1.a and 3.a) but found the Commission did not abuse its discretion in imposing the third and fourth conditions (Conditions 3.b and 3.c). The Commission and the Lindstroms appealed.

The Fourth District’s Decision

The Court of Appeal for the Fourth District partially reversed the trial court’s holding. Relying on the plain language in the City’s LCP and the Coastal Commission’s authority to impose reasonable conditions so long as they are consistent with the Coastal Act and the LCP, the court found the Commission did not abuse its discretion when it imposed Conditions 1.a, 3.a, and 3.c.  The court held the Condition 3.b, however, was improperly broad and not reasonably related to achieving the LCP’s purpose. That condition required that the Lindstroms remove their home in the event a government agency deemed it a natural hazard. That condition, the court said, was poorly drafted and could have been read to require the Lindstroms to remove their home under unreasonable circumstances. The court therefore issued a writ of mandate requiring the Coastal Commission to either delete or revise and clarify the condition.

 

Bridget McDonald

Third District Awards Costs and Fees Where Partially Successful Plaintiffs Obtained Primary Litigation Objective, Justifying Entitlement to Recovery

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In 2015, Friends of Spring Street (Friends) filed a petition for writ of mandate and complaint against Nevada City challenging the city’s determination that Mollie Poe and Declan Hickey (Real Parties) had the right to reopen a bed and breakfast (B&B) in a residential area. After the court ruled against the City on one of five issues raised, this case, Friends of Spring Street v. Nevada City (2019) 33 Cal.App.5th 1092, followed.

The Original Lawsuit

In 1991 Juneus and Jan Kendall obtained a conditional use permit to operate a B&B in a residential neighborhood. Three years later, the city’s voters passed an initiative, Measure G, which repealed the zoning code provision that allowed for B&Bs in residential zones. The Kendalls continued operation of their B&B until 2002 and sold the property in 2004. From 2002 until 2013, the property was used as a private residence, but the business license was renewed and paid every year.

The Real Parties purchased the property in 2013 and in 2014 applied to resume the conditional use permit to operate the property as a B&B. The city’s planning commission denied the request, concluding that the grandfathered rights to operate a B&B terminated when the use was discontinued. Real Parties appealed to the city council, arguing for the first time that the operation of a B&B was never a nonconforming use, and therefore the conditional use permit was still valid. The city council granted the appeal and vacated the planning commission’s decision.

In granting the appeal, the city council found that Measure G was intended to limit new B&Bs in residential zones, but did not address termination of existing inns. Following the council’s decision, Friends of Spring Street filed a lawsuit challenging the city’s determination, arguing that Measure G had rendered pre-existing B&Bs in residential areas nonconforming.

Ultimately, the Court of Appeal held that the city was incorrect, and the passage of Measure G had in fact rendered the B&B nonconforming. The Real Parties, therefore, were not entitled to resume the use as a matter of right. The Court of Appeal directed the trial court to vacate its denial of the petition for writ of mandate, enter an order granting the writ mandate, and order the city to set aside its granting of the appeal of the planning commission’s denial of the Real Parties’ request (“Friends I”).

Following the decision in Friends I, Friends of Spring Street filed a memorandum of cost and a motion for attorney fees. In response, the City and Real Parties filed motions to strike and oppose the memorandum of costs and motion for attorney fees. This decision is the outcome of those requests.

Friends’ Request for Costs

Under Code of Civil Procedure section 1032, where, like here, a party recovers non-monetary relief, the trial court has the discretion to identify the “prevailing party.” The question for the court is whether the party succeeded at a practical level by realizing its litigation objectives, and whether the action yielded the primary relief sought. In this case, the trial court denied the request for costs, reasoning that: (i) there was no prevailing party, and (ii) Friends did not obtain any practical result that justified the entitlement to costs. The trial court also noted that Friends only obtained relief on one of five causes of action.

The Court of Appeal disagreed. The court noted that the failure to succeed on all but one cause of action is not sufficient reason to deny a party fees and costs. The court also explained that Friends had realized its primary litigation objective when the court ordered the city to set aside its granting of the appeal of the planning commission decision. Contrary to the city’s argument, the court said it had not decided a “jurisdictional issue,” but rather had made a substantive decision on the merits when it determined the meaning and application of Measure G. As a result of its decision, the planning commission’s denial of the Real Parties’ application to re-commence B&B operations remained intact. The court concluded that Friends, therefore, achieved the practical result sought and was thus entitled to collect costs.

Friends’ Motion for Attorney Fees

Code of Civil Procedure section 1021.5, the “private attorney general doctrine,” provides an exception to the general rule that parties in litigation pay their own attorney’s fees. Under section 1021.5, a court may award fees to a successful party where a significant benefit has been conferred on the general public, and the necessity and financial burden of private enforcement makes the award appropriate. The trial court concluded that Friends’ action did not enforce an important right and public interest.

Again, the Court of Appeal disagreed. The court pointed to La Mirada Avenue Neighborhood Assn. of Hollywood v. City of Los Angeles (2018) 22 Cal.App.5th 1149, 1159-1160, noting that zoning laws are a “vital public interest” and are important to preserve the integrity of a general plan. Here, the court concluded, Friends’ action preserved the integrity of the city’s zoning regulations imposed by Measure G. And, the court noted, the public interest in this case was even greater than in La Mirada because the city’s residents voted to implement Measure G.

Third District Awards Costs and Fees Where Partially Successful Plaintiffs Obtained Primary Litigation Objective, Justifying Entitlement to Recovery

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In 2015, Friends of Spring Street (Friends) filed a petition for writ of mandate and complaint against Nevada City challenging the city’s determination that Mollie Poe and Declan Hickey (Real Parties) had the right to reopen a bed and breakfast (B&B) in a residential area. After the court ruled against the City on one of five issues raised, this case, Friends of Spring Street v. Nevada City, 33 Cal.App.5th 1092, followed.

The Original Lawsuit

In 1991 Juneus and Jan Kendall obtained a conditional use permit to operate a B&B in a residential neighborhood. Three years later, the city’s voters passed an initiative, Measure G, which repealed the zoning code provision that allowed for B&Bs in residential zones. The Kendalls continued operation of their B&B until 2002 and sold the property in 2004. From 2002 until 2013, the property was used as a private residence, but the business license was renewed and paid every year.

The Real Parties purchased the property in 2013 and in 2014 applied to resume the conditional use permit to operate the property as a B&B. The city’s planning commission denied the request, concluding that the grandfathered rights to operate a B&B terminated when the use was discontinued. Real Parties appealed to the city council, arguing for the first time that the operation of a B&B was never a nonconforming use, and therefore the conditional use permit was still valid. The city council granted the appeal and vacated the planning commission’s decision.

In granting the appeal, the city council found that Measure G was intended to limit new B&Bs in residential zones, but did not address termination of existing inns. Following the council’s decision, Friends of Spring Street filed a lawsuit challenging the city’s determination, arguing that Measure G had rendered pre-existing B&Bs in residential areas nonconforming.

Ultimately, the Court of Appeal held that the city was incorrect, and the passage of Measure G had in fact rendered the B&B nonconforming. The Real Parties, therefore, were not entitled to resume the use as a matter of right. The Court of Appeal directed the trial court to vacate its denial of the petition for writ of mandate, enter an order granting the writ mandate, and order the city to set aside its granting of the appeal of the planning commission’s denial of the Real Parties’ request (“Friends I”).

Following the decision in Friends I, Friends of Spring Street filed a memorandum of cost and a motion for attorney fees. In response, the City and Real Parties filed motions to strike and oppose the memorandum of costs and motion for attorney fees. This decision is the outcome of those requests.

Friends’ Request for Costs

Under Code of Civil Procedure section 1032, where, like here, a party recovers non-monetary relief, the trial court has the discretion to identify the “prevailing party.” The question for the court is whether the party succeeded at a practical level by realizing its litigation objectives, and whether the action yielded the primary relief sought. In this case, the trial court denied the request for costs, reasoning that: (i) there was no prevailing party, and (ii) Friends did not obtain any practical result that justified the entitlement to costs. The trial court also noted that Friends only obtained relief on one of five causes of action.

The Court of Appeal disagreed. The court noted that the failure to succeed on all but one cause of action is not sufficient reason to deny a party fees and costs. The court also explained that Friends had realized its primary litigation objective when the court ordered the city to set aside its granting of the appeal of the planning commission decision. Contrary to the city’s argument, the court said it had not decided a “jurisdictional issue,” but rather had made a substantive decision on the merits when it determined the meaning and application of Measure G. As a result of its decision, the planning commission’s denial of the Real Parties’ application to re-commence B&B operations remained intact. The court concluded that Friends, therefore, achieved the practical result sought and was thus entitled to collect costs.

Friends’ Motion for Attorney Fees

Code of Civil Procedure section 1021.5, the “private attorney general doctrine,” provides an exception to the general rule that parties in litigation pay their own attorney’s fees. Under section 1021.5, a court may award fees to a successful party where a significant benefit has been conferred on the general public, and the necessity and financial burden of private enforcement makes the award appropriate. The trial court concluded that Friends’ action did not enforce an important right and public interest.

Again, the Court of Appeal disagreed. The court pointed to La Mirada Avenue Neighborhood Assn. of Hollywood v. City of Los Angeles (2018) 22 Cal.App.5th 1149, 1159-1160, noting that zoning laws are a “vital public interest” and are important to preserve the integrity of a general plan. Here, the court concluded, Friends’ action preserved the integrity of the city’s zoning regulations imposed by Measure G. And, the court noted, the public interest in this case was even greater than in La Mirada because the city’s residents voted to implement Measure G.