Defendant Kenneth Kizer, the Director of the California Department of Health Services (Department), appeals an attorneys' fee award (Code Civ. Proc., § 1021.5)
CRTM, a conservation group organized as a California nonprofit corporation, filed a complaint for declaratory and injunctive relief in early April 1986 naming as defendants IT and Kenneth Kizer. CRTM sought in part to enjoin IT's alteration or expansion of its toxic waste facility in Benicia, as well as orders requiring IT to identify and remedy contamination at the site, and requiring the Department to withhold approval of the facility until IT was in full statutory compliance.
On June 6, 1986, IT Corporation and the Department entered into a consent order which required IT at the Benicia site to monitor its existing landfill, remedy leakage in a drum burial area, close certain inactive ponds, and post a bond of $277,500 to ensure its compliance. That order was superseded by a final consent order of July 8, 1986, setting forth essentially the same agreement.
After July 25 and August 1 hearings on the order to show cause CRTM's motion for a preliminary injunction was denied. The court's order states in part that it was "relying upon the protection provided during the pendency
On October 3, 1986, CRTM filed a motion for summary judgment. The motion was denied by an order of January 2, 1987, in which the court concluded that the case presented a myriad of factual disputes involving two issues — first, "whether or not INTERNATIONAL TECHNOLOGY CORPORATION, INC. is making substantial modifications or additions to the facility in violation of Health and Safety Code, Section 25200.5" and second, "whether or not INTERNATIONAL TECHNOLOGY CORPORATION, INC. is violating the closure requirements of State and Federal governments."
CRTM's motion for reconsideration was denied by an order of May 7, 1987. It then moved for an award of $593,000 in attorneys' fees and costs pursuant to section 1021.5. Following a stipulation for dismissal of the underlying action, CRTM settled its attorneys' fees claim against IT for $38,000. The trial court made a fee award of $97,675.50 against the state, on the basis that CRTM's action had acted as a catalyst in speeding up issuance of the final consent order.
On appeal the Department contends that the trial court erred in concluding that CRTM was a "successful party" entitling them to a fee award under section 1021.5. Alternatively, the Department also argues that if any fee award against it was proper it must be limited to an award for time and costs directly related to issues involving the Department. By cross-appeal CRTM challenges the exclusion of certain items from the lodestar and the award of less than 100 percent of the lodestar sum.
Discussion
Section 1021.5, which is a codification of the private attorney general doctrine, provides for an "award of attorneys' fees to a successful party ... in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit ... has been conferred on the general public ..., (b) the necessity and financial burden of private enforcement are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any." (Press v. Lucky Stores, Inc. (1983) 34 Cal.3d 311, 317 [193 Cal.Rptr. 900, 667 P.2d 704].)
"The critical fact is the impact of the action, not the manner of its resolution." (Folsom v. Butte County Assn. of Governments (1982) 32 Cal.3d 668, 685 [186 Cal.Rptr. 589, 652 P.2d 437].) How the party achieves success does not determine his right to fees, but the impact of his suit does. (In re Head (1986) 42 Cal.3d 223, 228-229 [228 Cal.Rptr. 184, 721 P.2d 65].)
If plaintiff's lawsuit "induced" defendant's response or was a "material factor" or "contributed in a significant way" to the result achieved then plaintiff has shown the necessary causal connection. (Northington v. Davis (1979) 23 Cal.3d 955, 960, fn. 2 [154 Cal.Rptr. 524, 593 P.2d 221]; Westside Community For Independent Living, Inc. v. Obledo, supra, 33 Cal.3d at p. 353; California Common Cause v. Duffy (1987) 200 Cal.App.3d 730, 743 [246 Cal.Rptr. 285].) The question of whether plaintiff's action is causally linked to achieving the relief obtained is a question of fact. (Wallace v. Consumers Cooperative of Berkeley, Inc. (1985) 170 Cal.App.3d 836, 845 [216 Cal.Rptr. 649].)
Obviously it can be difficult to prove causation where as here plaintiff seeks to recover on a catalyst theory. When action is taken by the defendant after plaintiff's lawsuit is filed the chronology of events may permit the inference that the two events are causally related. (Leiserson v. City of San Diego (1988) 202 Cal.App.3d 725, 736 [249 Cal.Rptr. 28].)
The Department argues that such an inference shifts the burden to defendant to offer rebuttal. Indeed, there is a line of authority in federal Freedom of Information Act cases which supports this view.
Here the court seems to have relied solely upon the chronology of events. The Department submitted two declarations, one from Dwight Hoenig, the Department officer in charge of toxic substances control for the area in which the IT facility is located, and a second from John Allen, corporate counsel for IT.
According to these declarations in late May of 1986 IT was preparing a $60 million public bond offering. At the time IT was operating under an
With the bond offering as leverage the Department was able to get IT's agreement to the consent order of June 6, 1986, which was then superseded by the final order of July 8. Mr. Hoenig further stated that he had not learned of the CRTM complaint until June 3, 1986, after he had directed his staff to draft the requirements for what became the June 6 consent order.
CRTM submitted no affidavits bearing directly upon the question of whether the consent decrees were related to the institution of this suit. They did submit a declaration by Senator Barry Keene that "[p]rior to the filing of CRTM's action, I was not aware of any enforcement action that had been taken by [the Department]. I do not believe there was any predisposition by the Department to take any enforcement or compliance action prior to CRTM's suit." Similar sentiments were expressed in the declaration of Senator Art Torres, who, as Chairman of the Senate Committee on Toxics and Public Safety, was familiar with the history of the Department's regulatory efforts at IT.
In response to these declarations the court found the Department's "`over the barrel' argument concerning the bond offering to be creative, but not very persuasive. In fact, the chronology of events is in favor of the Plaintiff's position."
We find this statement of decision somewhat puzzling. The court refers to the bond issue as an "`over the barrel' argument" as if there were no evidence before it. Yet it had two declarations and supporting documents before it. Presumably the trial court chose to discount the Department's evidence as lacking in credibility. Credibility is properly the province of the trier of fact. (Evid. Code, § 312, subd. (b).) Here, however, it is not clear that the trial court considered, but discounted, the evidence about the genesis of the consent orders. Such evidence, if credible, would suffice to rebut the presumption of causation raised solely by the chronology of events.
Because the causation issue determines CRTM's right to any fee award, we are especially troubled by the ambiguity of the statement of decision.
Fee Calculation
For the guidance of the trial court and in the interests of judicial economy we also reach additional issues raised on the appeal and those raised by the cross-appeal.
Here the trial court reduced the lodestar sum sought by CRTM by eliminating fees and costs attributable to CRTM's advocacy before and discovery from the Water Quality Control Board and for time spent with the media. With these reductions the lodestar sum was set at $279,072.86. CRTM contends in its cross-appeal that it was error to deduct these amounts from the lodestar.
In September 1986 the California Regional Water Quality Control Board issued a cleanup and abatement order to IT based on a finding that many of
Also excluded from the lodestar was additional time spent by CRTM in deposing Water Board employees and in analyzing documents subpoenaed from the board. CRTM urged the trial court to permit compensation for these expenses on the ground that the fruits of this discovery were used by it not only before the board but in this case in support of its unsuccessful motions for a preliminary injunction and for summary judgment.
Relying on United States Supreme Court precedent (Webb v. Dyer County Bd. of Education (1985) 471 U.S. 234 [85 L.Ed.2d 233, 105 S.Ct. 1923]) this district has previously adopted the rule that an award under section 1021.5 for time spent in related administrative proceedings may properly constitute time reasonably expended in the action. (Wallace v. Consumers Cooperative of Berkeley, Inc., supra, 170 Cal. App.3d at pp. 848-849.)
In Wallace various consumer groups including a cooperative grocery store were enjoined by State Department of Food and Agriculture from selling milk below the minimum price. (Wallace v. Consumers Cooperative of Berkeley, Inc., supra, 170 Cal. App.3d at p. 841.) By cross-complaint they then challenged enforcement of the minimum price. (Ibid.) Before the case could come to trial the parties entered into a settlement providing that trial would be continued provided public hearings on the milk pricing issue were held before a certain date. (Id. at pp. 841-842.) The hearings were held and the consumer groups were awarded attorneys' fees for the time they spent in the administrative proceedings because the trial court found that the administrative action and the lawsuit were "`intertwined inextricably.'" (Id. at p. 848.)
Here the trial court refused to permit CRTM to recover for fees and costs associated with the Water Board petition, concluding that the Water Board action "was totally unrelated to the direction taken by this lawsuit." The court also distinguished Wallace on the basis that in it "the administrative proceedings were actually conducted between the parties to the litigation."
The question is not whether the parties to the administrative action are the same parties involved in the lawsuit, but rather has the successful party
We are not prepared to find that the trial court abused its discretion in excluding the water board work. The court implicitly found that the lawsuit and the petition were not so intimately linked as to be comparable to the situation in Wallace.
The trial court also excluded from the lodestar costs related to document analysis and the taking of depositions and declarations from water board staff. The law firm of Khourie, Crew & Jaeger submitted a breakdown of hours attributable to such activity.
CRTM argues that since discovery is normally a compensable item in a fee award (Webb v. Dyer County Bd. of Education, supra, 471 U.S. at p. 242 [85 L.Ed.2d at pp. 241-242]), the Khourie firm's hours were improperly excluded. We assume the trial court was cognizant of its ability to make an award for discovery. In viewing the record most favorably to the judgment we must infer that the trial court rejected CRTM's argument that the discovery was undertaken for this action, since after CRTM made its pitch for the time the court issued its final order eliminating that amount. That was a discretionary decision which this court declines to disturb.
Lastly, CRTM objects to elimination from the lodestar of $2,717.25 for hours spent with the media, which it characterizes as "public education efforts." While there may be cases in which public relations time is appropriately included in a lodestar, that decision is best made by the trial court which has a firsthand opportunity to evaluate the reasonableness of such an
Adjustment of Lodestar
The court went on to note that defendant IT, "the primary `culprit'" had already settled the attorneys' fee claim against it for $38,000. Concluding it would be "unconscionable to assess DEPARTMENT OF HEALTH SERVICES over 16 times the amount of fees" paid by IT, the court made the fractional adjustment and stated that the sum achieved "shall be over and above" that paid by IT.
Neither side is pleased with this result. The Department contends that it was improper to make an award except as some fraction (either 35 percent or some lesser amount appropriate for a catalyst) only of those hours in the lodestar which represent CRTM's time attributable to Department issues. CRTM in its cross-appeal argues that reducing the award to 35 percent of the lodestar was improper because it was arbitrary, because the Department failed to meet its burden to show the lodestar was not a reasonable and proper fee, and because the factors relied upon by the trial court are not appropriately considered under Serrano v. Priest, supra, 20 Cal.3d at p. 49.
In Serrano III our Supreme Court set out a list of some seven factors which it found the trial court had properly considered in deciding whether to adjust the lodestar up or down. (Serrano v. Priest, supra, 20 Cal.3d at p. 49.) In its subsequent decisions the Supreme Court has referred to the Serrano III factors in language which makes it clear that they are not an exclusive list. For example, "The [lodestone] figure may be enhanced or diminished after the court considers matters such as those enumerated in Serrano III. ..." (Italics added.) (Serrano v. Unruh, supra, 32 Cal.3d 621, 626, fn. 6.) Or, "In Serrano III, this court listed a number of relevant factors the trial court may consider in adjusting the lodestar...." (Italics added.) (Maria P. v. Riles, supra, 43 Cal.3d at p. 1294, fn. 8.)
The Supreme Court remanded the award for redetermination under a proper lodestar analysis — rejecting the trial court's use of its own "arbitrary formula." (Press v. Lucky Stores, Inc., supra, 34 Cal.3d at p. 322.) We do not read the case, however, to reject lack of success as an appropriate adjustment factor. Press stands for the proposition that the Serrano III lodestar analysis must be followed and that Serrano III objectives are not met "[i]f there is no reasonable connection between the lodestar figure and the fee ultimately awarded." (Id. at p. 324.)
Nor are the federal cases CRTM cites especially helpful here. In Gekas v. Atty. Registration & Disciplinary Comm'n. (7th Cir.1986) 793 F.2d 846, the circuit court vacated and remanded a fee award which the trial court had reduced on the basis that to award the full lodestar amount would simply encourage further litigation. (Id. at p. 853.) Obviously, this was an impermissible factor since it would defeat the very purpose of making fee awards to successful litigants. (Ibid.) In Quesada v. Thomason (9th Cir.1988) 850 F.2d 537, the circuit court reversed and remanded where the trial court had erred in finding that plaintiff had not achieved a good result. (Id. at pp. 539, 543.)
In federal cases once the court has determined that a plaintiff is the prevailing party and is eligible for a fee award, the inquiry shifts to what a reasonable fee will be. As the United States Supreme Court has noted in the context of fee awards under federal civil rights statutes, "`the range of possible success is vast,' and the achievement of prevailing party status alone `may say little about whether the expenditure of counsel's time was reasonable in relation to the success achieved.'" (Texas State Teachers Assoc. v. Garland Independent School Dist. (1989) 489 U.S. 782, ___ [103
Absent the existence of California authority for the proposition that it is improper to consider lack of success as a lodestar adjustment factor, we are not prepared to say that the trial court here erred in doing so. Plaintiff did not succeed on any of its motions. Likewise the court made the factual finding that the result achieved was contributed to by "many other agencies, political entities and individuals."
Because plaintiff's claims probably cannot be easily segregated into successful and unsuccessful ones to which hours can easily be attributed (see Hensley v. Eckerhart, supra, 461 U.S. at pp. 434-436 [76 L.Ed.2d at pp. 50-52]), the trial court's assessment does not lend itself to a single mathematical calculation. We cannot say that a 35 percent fractional multiplier is arbitrary or bears "no reasonable connection between the lodestar figure and the fee ultimately awarded." (Press v. Lucky Stores, Inc., supra, 34 Cal.3d at p. 324.)
Apportionment
The public policy which stands behind section 1021.5 is defeated if the trial court looks to the amount of the settlement of the more culpable party and then seeks to reduce the plaintiff's fee award so that a nonsettling defendant is not punished out of proportion to his culpability. Such a rule would permit a settling defendant who is more culpable to effectively place a cap on plaintiff's total fee award. While such a result is perhaps fair as between the defendants, it subverts the very purpose of section 1021.5
The Department is also distressed by the amount of the award, but it objects that any fee award should be apportioned or, better yet, calculated so that the Department pays only for that portion of plaintiff's time which was devoted to litigating against it and not for plaintiff's time spent against IT.
In connection with the IT-CRTM settlement all the parties entered into a good faith settlement stipulation. As part of that stipulation the Department set out its position that it had no liability to CRTM for attorneys' fees. The stipulation then states: "With respect to plaintiff's motion for fees, the Court must first find whether plaintiff is entitled to an award. If the Court finds that plaintiff was a catalyst for relief, the Court must decide how the award would have been apportioned between defendant Kizer and IT."
Apportionment may certainly be appropriate where there is more than one defendant. For example in Sundance v. Municipal Court (1987) 192 Cal.App.3d 268 [237 Cal.Rptr. 269], a successful challenge to the prosecution of public inebriates supported a fee award made equally against the City and County of Los Angeles. (Id. at p. 272.) On appeal the county challenged this 50/50 allocation arguing it had committed fewer of the abuses corrected by the lawsuit and therefore it should not pay as much as its more culpable codefendant, the city. (Ibid.) The appellate court upheld the apportionment, noting that the county had taken "an active part in opposing the litigation and thus in generating the expenses that are compensated by the award of attorneys' fees." (Ibid.)
It is certainly reasonable, given the facts of a specific case, for a court to apportion a fee award based upon the relative culpability of the parties. (Grendel's Den, Inc. v. Larkin (1st Cir.1984) 749 F.2d 945, 959-960 [reversing 50/50 award to 25 percent and 75 percent]; Jose P. v. Ambach (2d Cir.1982) 669 F.2d 865, 871 [upholding fee award 80 percent borne by city and 20 percent borne by state].)
The Department, however, misreads California law when it says that one defendant may not be charged for work attributable to another. It relies upon County of San Luis Obispo v. Abalone Alliance (1986) 178 Cal.App.3d 848 [223 Cal.Rptr. 846], for this proposition. In Abalone Alliance the county and other plaintiffs brought an action naming as defendants various groups and individuals who had demonstrated against a nuclear power plant. (Id. at pp. 856-857.) After a demurrer the county's claim was
Abalone Alliance is readily distinguishable from the problem before us. It was an ongoing case in which there were still parties against whom defendants might or might not be successful. Thus, until the remainder of the case was resolved it was impossible to say that as against those remaining plaintiffs defendants even qualified for a fee award as successful parties for the purposes of section 1021.5. In contrast here the case had been dismissed and one defendant had settled before the question of attorneys' fees was before the court.
Defendant IT settled with plaintiff while the Department chose to contest its fee liability. The Department had an opportunity to challenge the good faith of the IT settlement. (§ 877.6.) It did not do so. Having made that tactical decision it cannot now complain that it is liable to pay more than its fair share of the attorneys' fees award.
We remand in order for the trial court to make findings on the issue of causation, specifically: Was the April 1987 resolution of another action by the Department against IT causally related to this lawsuit? Is the presumption of causation raised by the chronology of events rebutted by the evidence that the July 1986 consent decree in this action was unrelated to CRTM's lawsuit? The trial court must also reexamine the fee award made against the Department in light of our ruling that it may not fix the amount of that award by reference to the amount of IT's settlement with plaintiff.
Additional Fees
CRTM asks that this court award it attorneys' fees for preparing its fee petition in the lower court and for defending its award on appeal.
Because we are remanding this case to the trial court we direct it, should it conclude in accordance with the issues decided on remand that a fee award to plaintiff is authorized, to determine a fee award to plaintiff for the prosecution of its fee petition and for those hours expended solely as a respondent to the Department's appeal. Because CRTM has not prevailed on its cross-appeal it is not entitled to an award for fees and costs attributable to that cross-appeal. (Cal. Rules of Court, rule 26.)
We remand for further proceedings consistent with this opinion.
Anderson, P.J., and Perley, J., concurred.
FootNotes
The record in that case is not before us, and apparently was not before the superior court. As a consequence we seriously question whether that action can be used to evaluate CRTM's success here. For the purpose of awarding attorneys' fees in this case CRTM may not take credit for all regulatory action taken by the Department against IT subsequent to April 1986 when CRTM filed its complaint.
It points specifically to the following language in the tentative decision: "The law does not appear to go so far as to require one state agency to pay for work involving another agency. This Court is not willing to go so far as to create a single agency, `The State', and charge the Department of Health for all fees concerning it." (Italics added.) The court also noted that plaintiff had not named the water board as a defendant in this action.
While the language may be somewhat inartful, taken in context we believe the trial court was simply saying there was no close and causal connection between the administrative action and the outcome of this lawsuit.
Obviously the trial court here might have given a very precise list of exactly which hours it felt plaintiffs had expended solely on IT related matters and which hours were solely chargeable to settlement with IT and excluded them from the lodestar calculation. It did not do so. Whether such precise allocation of time is appropriate or possible in a given case will turn on the posture of the case and the nature of the claims against the various defendants. We cannot say that the court's failure to fine tune the lodestar was an abuse of discretion, however, where the court then reduced the lodestar by some 65 percent.
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