Tag: Catalyst Theory

THIRD DISTRICT REFRAINS FROM AWARDING ATTORNEY FEES UNDER CATALYST THEORY AFTER PLAINTIFF’S CLAIM HAS FAILED ON THE MERITS

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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

THIRD DISTRICT OVERTURNS DENIAL OF ATTORNEYS’ FEES MOTION UNDER “CATALYST” THEORY, HOLDS TRIAL COURT MUST CONSIDER WHETHER PLAINTIFFS’ LAWSUITS WERE A SUBSTANTIAL FACTOR IN GOVERNOR’S DECISION NOT TO MOVE FORWARD WITH “WATERFIX” PROJECT

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In Department of Water Resources Environmental Impact Cases (2022) 79 Cal.App.5th 556, the Third District Court of Appeal found that the trial court did not apply the correct legal standard in rejecting plaintiffs’ motions for attorney fees following litigation challenging California’s WaterFix project under CEQA and other laws. Plaintiffs relied on the state’s private attorney general statute (Code of Civil Procedure § 1021.5), asserting that they were successful parties under a “catalyst” theory because the litigation motivated the Department of Water Resources (DWR) to rescind the project approvals and decertify the EIR. The trial court denied the motions, finding that although plaintiffs achieved the primary objectives of their litigation, this was caused by a directive from Governor Newsom, not their lawsuits. The appellate court, however, found that it was error to treat the Governor’s directive as an “external, superseding cause” of DWR’s decision. Instead, the trial court should have considered whether plaintiffs’ lawsuit was a substantial factor in the Governor’s decision to change course regarding the WaterFix project. The court therefore reversed and remanded the matter for redetermination.

BACKGROUND

In 2013, DWR issued a draft EIR for the Bay Delta Conservation Plan project under CEQA. The plan aimed to improve California’s water supply infrastructure by constructing two 35-mile-long tunnels that would convey fresh water from the Sacramento River to pumping stations in the southern Sacramento–San Joaquin Delta. In 2015, DWR replaced that plan with the WaterFix project, which differed from the original in that it decoupled the habitat conservation component from the water conveyance elements. On July 21, 2017, DWR certified a final EIR, adopted findings, a statement of overriding considerations, and a mitigation monitoring and reporting plan, and approved the WaterFix project.

Numerous plaintiffs filed petitions for writ of mandates challenging the WaterFix project and EIR. The lawsuits sought to compel DWR to rescind the WaterFix approvals, decertify the EIR, and suspend development pending compliance with applicable laws. Plaintiffs alleged a variety of violations under CEQA, as well as under the Sacramento–San Joaquin Delta Reform Act of 2009, the public trust doctrine, and the California Endangered Species Act. Plaintiffs’ lawsuits were coordinated for trial.

In November 2018, Governor-elect Newsom expressed doubt over whether the WaterFix project could overcome its various legal challenges, and officially voiced his opposition to the project (as Governor) three months later. On April 29, 2019, he issued Executive Order No. N-10-19, which established his new “water resilience portfolio” policy and encouraged DWR to “inventory and assess” the “[c]urrent planning to modernize conveyance through the Bay Delta with a new single tunnel project.” Less than one week later, as litigation was ongoing, DWR decertified the WaterFix EIR, vacated its findings, and rescinded the project’s approvals. Consequently, the coordinated cases were voluntarily dismissed.

After the cases were dismissed, plaintiffs filed motions for attorneys’ fees, asserting that they were “successful” parties under the catalyst theory because the litigation motivated DWR to voluntarily provide the relief sought (namely, rescission of the project approvals, decertification of the EIR, and dismissal of the validation action). DWR opposed the motions, arguing that the decision to rescind project approval was based on the Governor’s Executive Order, not the litigation.

The trial court denied plaintiffs’ motions, agreeing that the relief was caused by the Governor’s directive rather than the lawsuits. Plaintiffs appealed.

COURT OF APPEAL’S DECISION

The court of appeal agreed with plaintiffs that the trial court erred in treating Governor Newsom’s policy directive as an external, superseding cause of DWR’s actions. Although, as an agency within the executive branch, DWR was required to implement the Governor’s decision to shift from two tunnels to one, that did not mean that there was no connection between the lawsuits and the rescission of the WaterFix approvals and decertification of the EIR. Instead, the trial court should have asked whether the litigation was “a substantial factor” in the Governor’s decision.

The court suggested plaintiffs had presented evidence that the Governor’s decision was at least in part influenced by their lawsuits, such as his November 2018 statement that “‘I think if we walk down the path of two tunnels, we’re in litigation and no project.’” Plaintiffs also presented statements made by DWR’s director that the previous proposal might not have fully acknowledged and mitigated for impacts. The court of appeal held that, regardless of whether this evidence was sufficient to establish a causal relationship between the litigation and the Governor’s opposition to the WaterFix project, the trial court erred in refusing to consider this evidence.

The court of appeal also found error in the trial court’s refusal to consider plaintiffs’ argument that the chronology of events could raise an inference of causation, which it had rejected because EIR decertification was “expected.” The appellate court explained that even if the underlying project is abandoned or withdrawn, nothing in CEQA requires the lead agency to decertify that project’s EIR. Only when the previous environmental document is “wholly irrelevant” must the agency start anew. Further, nothing in the Governor’s Executive Order compelled DWR’s decertification and rescission, as it merely directed the agency to “inventory and assess”  the current plan “to modernize conveyance through the Bay Delta with a new single tunnel project.” Finally, in the wake of the Governor’s announced opposition, DWR’s attorneys advised the court that DWR could still proceed under CEQA using a supplemental or subsequent EIR—obviously contrary to the contention of inevitable decertification. Thus, because DWR’s decision to abandon the project was independently made, there was “a legitimate question as to why it made that choice.” And because the plaintiffs had properly relied on the chronology of events to raise an inference that the lawsuits had substantially motivated DWR’s decision, the burden had shifted to DWR to rebut that inference. The trial court’s refusal to consider plaintiff’s evidence was thus a prejudicial abuse of discretion.

—Griffin Williams