Sixth District Court of Appeal Allows Recovery of Attorneys’ Fees for Participation in Administrative Process; A Party May Not Be Disqualified From Receiving Attorney’s Fees Because of Personal Stake in the Litigation

On August 2, 2011, in Edna Valley Watch v. County of San Luis Obispo (2011) ___Cal.App.4th___ (Case No. B223653), the Sixth District Court of Appeal overturned a trial court’s ruling that a petitioner is not entitled to attorneys’ fees for work performed in an administrative hearing. The Court of Appeal also overturned the trial court’s determination that a petitioner may be disqualified from receiving fees based on his personal stake in the litigation. The court remanded the case to the trial court for further proceedings to determine the amount of fees that should be awarded consistent with the court’s opinion.

The Unitarian Universalist Fellowship of San Luis Obispo County (the church) proposed to build an 11,000 square-foot facility in the Edna Valley area of San Luis Obispo County. The Planning Commission granted the church a conditional use permit for the project. Petitioners Philip Da Silva, owner of adjacent property to the proposed church site, and Edna Valley Watch, a nonprofit association, appealed the decision to the Board of Supervisors. The board denied the appeal.

De Silva and Edna Valley Watch filed a petition for writ of mandate seeking to direct the county to rescind its approval of the project based on an alleged failure to comply with CEQA. After the petition was filed, the church’s counsel wrote to the petitioners’ counsel stating that the church was abandoning the approval it received from the county and returning to the permitting process. The petitioners did not dismiss the case, however, until the Board of Supervisors adopted a resolution rescinding project approval. Thereafter, the petitioners filed a motion for fees pursuant to Code of Civil Procedure Section 1021.5, which codifies the private attorney general doctrine. The petitioners sought $35,045.50: 19,239.50 for the administrative appeal to the board, $8,042 for “litigation,” and $7,674.50 for the fee motion.

The trial court found that the writ petition was the “catalyst” for the ultimate withdrawal of the project application, and therefore, the petitioners could seek attorneys’ fees. The court concluded, however, that as a matter of law, the parties were not entitled to an award of fees incurred in administrative proceedings. The trial court also denied a fee award to Da Silva on the grounds that his personal stake in the proceedings was not so disproportionate to the cost of litigation as to make an award of fees necessary. In so holding, the trial court cited letters from Da Silva to the board stating that the proposed church complex would be “devastating to his family’s peace, safety and security” as well as to his plans to turn his Victorian home into a bed-and-breakfast. The petitioners appealed.

The Court of Appeal first considered the trial court’s holding that attorneys’ fees incurred in administrative proceedings cannot be awarded. The court explained that Code of Civil Procedure section 1021.5 allows an award of fees “in any action.” The question before the court, therefore, was whether the administrative proceedings fall within the definition of “action.” The court answered in the affirmative. In construing the term “action,” the court looked to the purpose of the private attorney general doctrine—that is, to encourage suits effectuating a strong public policy by awarding fees to persons who successfully bring about public benefits through lawsuits. In this case, Da Silva and Edna Valley Watch could not have brought their lawsuit without exhausting administrative remedies. Therefore, explained the court, to hold that the administrative proceedings were not part of the “action” would defeat the purpose of the Code of Civil Procedure section 1021.5 and could discourage lawsuits brought in the public interest. Accordingly, the court directed that on remand the trial court should consider the extent of the parties’ participation in the administrative proceedings in determining the amount of fee award.

Next the court considered the trial court’s denial of fees to Da Silva based on Da Silva’s personal stake in the litigation. The court explained that while the case was pending on appeal, the California Supreme Court decided Conservatorship of Whitley (2010) 50 Cal.4th 1206 (Whitley), which disapproved a line of cases on which the trial court relied in denying Da Silva’s fee request. Whitley held that a litigant’s personal, non-pecuniary interests in the litigation may not be used as a basis to disqualify the litigant from obtaining fees under Code of Civil Procedure section 1021.5. Instead, the court must focus on the financial burdens and incentives involved in bringing the lawsuit. Based on Whitley, the court directed the trial court to reconsider Da Silva’s request for attorneys’ fees without regard to his non-pecuniary interest in the litigation.