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Public Agency’s Non-Pecuniary Interest In Litigation To Enforce Public Rights May Not Be Used To Deny Award Of Attorney’s Fees

Under the “private attorney general” statute (Code of Civil Procedure section 1021.5), courts may award attorney’s fees to a party that prevails in litigation which benefits the general public by enforcing an important public right.  A court may award attorney’s fees under section 1021.5 if it determines that the financial cost of such litigation outweighs the purely “personal” stake of the prevailing party.

Such awards are regularly given to private petitioners (such as environmental groups) in land use and CEQA cases.  Public agency litigants are also eligible for attorney’s fees under section 1021.5.  In the past, however, courts have denied fee awards to public agencies which sued to advance their own environmental policy interests, or the environmental welfare of their citizens.  In a new decision, City of Maywood v. Los Angeles Unified School District, the Second District Court of Appeal departs from these cases. 

City of Maywood follows a 2010 Supreme Court opinion, Conservatorship of Whitley, to hold that when deciding on an award of attorney’s fees to a public agency under section 1021.5, a court may only consider whether a money-related, or “pecuniary,” interest of the agency or its constituents outweighs the agency’s burden of advancing the general public interest through litigation.   City of Maywood rejects any suggestion, in pre-Whitley cases, that a public agency’s “non-pecuniary” self-interest may be used to deny attorney fees under CCP § 1021.5.

In City of Maywood,the City sued over approval of a new high school, alleging violations of the California Environmental Quality Act (“CEQA”).  The trial court ruled in favor of the City on four separate CEQA claims and awarded it $670,000 in attorney’s fees.  In an unpublished portion of its opinion, the Court of Appeal reversed the trial court on three of the four CEQA claims.  In the published portion of its opinion, the court addressed the appropriate grounds for denying attorney fees to a public agency litigant. 

Under section 1021.5, a prevailing litigant must meet three criteria to be eligible for attorney’s fees: (1) the litigation served to vindicate an important public right; (2) the litigation conferred a significant benefit on the general public or a large class of persons; (3) the litigation was necessary and imposed a financial burden on the litigant which was out of proportion to its individual stake in the matter. 

The third prong of this test was at issue in City of Maywood.  In Conservatorship of Whitley (2010), the California Supreme Court held that a private litigant’s non-pecuniary interest in litigation (there, a plaintiff’s interest in protecting her brother’s medical welfare) could not be used to deny attorney’s fees under section 1021.5.  City of Maywood extends the rule of Whitley to cases involving prevailing public agency litigants. 

In so ruling, the court observed that several pre-Whitley cases had denied attorney’s fees to public agencies which were held to have a strong “local” interest in litigation.  In City of Inyo v. City of Los Angeles, for example, the court denied fees to a city that litigated “as a champion of local environmental values.”  The court in City of Maywood agreed that a public agency which seeks fees under section 1021.5 must show that it successfully vindicated a public right, to the benefit of the general public or a large class of persons beyond the agency’s constituents.  However, the court rejected the pre-Whitley cases to the extent they implied that a public agency’s “non-pecuniary” interest in such litigation (such as the agency’s desire to protect the environment of its citizens) may factor into a denial of attorney fees due to the preponderant weight of the agency’s “individual stake” in the litigation.