Friends of ' Street v. City of Hayward

• Decision Date: 17 June 1980
• Citation: 165 Cal.Rptr. 514,106 Cal.App.3d 988
• Court: California Court of Appeals Court of Appeals
• Parties: FRIENDS OF "B" STREET et al., Plaintiffs, Appellants and Respondents, v. CITY OF HAYWARD et al., Defendants, Respondents and Appellants. Civ. 40086.

Page 514

165 Cal.Rptr. 514

106 Cal.App.3d 988

FRIENDS OF "B" STREET et al., Plaintiffs, Appellants and Respondents, v. CITY OF HAYWARD et al., Defendants, Respondents and Appellants.

Civ. 40086.

Court of Appeal, First District, Division 4, California.

June 17, 1980.

Hearing denied Sept. 3, 1980.

Jane W. Greenfield, Boulder, Colo., for Friends of "B" Street, et al.

John W. Scanlon, City Atty., Myron A. Johnson, Asst. City Atty., Hayward, for City of Hayward, et al.

George Deukmejian, Atty. Gen. of Cal., Robert H. Connett, Asst. Atty. Gen., Daniel P. Selmi, Deputy Atty. Gen., Los Angeles, amicus curiae in support of the contentions of Friends of "B" Street.

CHRISTIAN, Associate Justice.

Friends of "B" Street, an unincorporated citizens', group (Friends), sought a writ of mandamus and an injunction to compel the City of Hayward to (1) prepare an environmental impact report pursuant to the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.) before proceeding with a proposed street improvement project (the "B" Street Project); (2) refrain from proceeding with the project until the general plan of the city met the requirements of the state Planning and Zoning Law (specifically Gov. Code, §§ 65302, 65855 and 65860); and (3) refrain from proceeding with the project on the grounds of an alleged violation of Government Code sections 3600-3760.

The mandamus cause of action was tried first and submitted on documentary evidence. The court rendered judgment granting the writ on the ground that it was an abuse of discretion for the city council to adopt a "negative declaration" certifying that the project would not have a significant environmental effect, since there was substantial evidence to the contrary. On the second cause of action the court rendered judgment for the city on the ground that injunctive relief was not an available remedy. The court rejected the Friends' request for attorney fees, stating that "the Court lacks power to make such an award." The court dismissed the third cause of action without prejudice.

The Friends appealed from the judgment insofar as it denied them attorney fees and denied the injunctive relief sought in the second cause of action. The city cross-appealed from the judgment insofar as it determined that it was improper for the city to adopt a "negative declaration" with respect to the proposed project. This court affirmed the judgment in a published opinion filed November 17, 1977. The California Supreme Court granted a hearing and retransferred the cause to this court on September 20, 1979, for reconsideration in light of Woodland Hills Residents Ass'n, Inc. v. City Council (1979) 23 Cal.3d 917, 154 Cal.Rptr. 503, 593 P.2d 200; Northington v. Davis (1979) 23 Cal.3d 955, 154 Cal.Rptr. 524, 593 P.2d 221; Save El Toro Assn v. Days (1977) 74 Cal.App.3d 64, 70-74, 141 Cal.Rptr. 282, and Woodland Hills Residents Ass'n, Inc. v. City Council (1975) 44 Cal.App.3d 825, 838, 118 Cal.Rptr. 856.

I

The private attorney general theory, as codified in Code of Civil Procedure section 1021.5, ¹ authorizes an award of attorney fees in the present case if (1) the Friends' action "has resulted in the enforcement of an important right affecting the public interest," (2) "a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons," and (3) "the necessity and financial burden of private enforcement are such as to make the award appropriate . . . ." (Code Civ.Proc., § 1021.5; Woodland Hills Residents Ass'n, Inc. v. City Council, supra, 23 Cal.3d 917, 934-935, 154 Cal.Rptr. 503, 593 P.2d 200 (Woodland Hills II ).) Although section 10-21.5 had not yet become effective at the time the trial court denied the Friends' request for attorney fees, it applies to this proceeding because the ruling was pending on appeal at the time the legislative enactment became effective. (Woodland Hills II, supra, 23 Cal.3d at pp. 928-932, 154 Cal.Rptr. 503, 593 P.2d 200.)

The city contends that no important right was vindicated by the Friends' action in the present case, which resulted in the trial court's proscription against further action on the "B" Street Project until an environmental impact report (EIR) was prepared, because the failure to have an EIR prepared was merely a "procedural error" and was not of statewide importance or effect. The trial court, however, correctly determined that the Friends' suit "effectuated the strong State policy expressed in the California Environmental Quality Act of 1970" and had the result of enforcing important environmental laws. "(T)he Legislature in CEQA has enacted a logical and carefully devised program of wide application and broad public purpose. In many respects the EIR is the heart of CEQA. The report . . . may be viewed as an environmental 'alarm bell' whose purpose it is to alert the public and its responsible officials to environmental changes before they have reached ecological points of no return." (County of Inyo v. Yorty (1973) 32 Cal.App.3d 795, 810, 108 Cal.Rptr. 377, 388.) An important statutory policy was effectuated in the present case, and the private attorney general theory (as codified in Code Civ. Proc., § 1021.5) may encompass effectuation of statutory as well as constitutional rights. (Woodland Hills II, supra, 23 Cal.3d at p. 935, 154 Cal.Rptr. 503, 593 P.2d 200.)

The trial court's findings predated the enactment of section 1021.5, but they are so unambiguous and so close in language to the statutory requirement of "enforcement of an important right affecting the public interest" that remand for a further finding on this point is unnecessary. (Compare Woodland Hills II, supra, 23 Cal.3d at p. 938, 154 Cal.Rptr. 503, 593 P.2d 200 (remand necessary because trial court did not undertake the necessary inquiry).) The court withheld an award of attorney fees only because it concluded that it lacked the authority to make such an award.

The trial court concluded that as a result of the Friends' suit, "there has been a conferral of substantial benefits upon a large class of a pecuniary and/or nonpecuniary nature." This finding is dispositive as to the second statutory requirement, that "a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons . . . ." (Code Civ.Proc., § 1021.5.)

The trial court did not, however, render a determination on the third statutory requirement that "the necessity and financial burden of private enforcement are such as to make the award appropriate." The court determined that the Friends had "successfully carried the difficult and heavy burdens of enforcing important environmental laws," but did not determine to what extent, if any, this burden justified an attorney fee award. An award of attorney fees pursuant to section 1021.5 requires a determination by the trial court, upon remand of the cause, as to whether the necessity and financial burden of private enforcement placed a burden on the Friends disproportionate to their individual interests in the matter and made an attorney fee award appropriate. (Woodland Hills II, supra, 23 Cal.3d at pp. 941-942, 154 Cal.Rptr. 503, 593 P.2d 200.)

II

Independent of the private attorney general theory, the Friends are entitled to an attorney fee award under the substantial benefit rule, a nonstatutory equitable basis for attorney fee awards. (See Woodland Hills II, supra, 23 Cal.3d at pp. 942-943, 154 Cal.Rptr. 503, 593 P.2d 200.) This rule "permits the award of fees when the litigant, proceeding in a representative capacity, obtains a decision resulting in the conferral of a 'substantial benefit' of a pecuniary or nonpecuniary nature. In such circumstances the court, in the exercise of its equitable discretion, thereupon may decree that under dictates of justice those receiving the benefit should contribute to the costs of its production." (Serrano v. Priest (1977) 20 Cal.3d 25, 38, 141 Cal.Rptr. 315, 321, 569 P.2d 1303, 1309.) Unlike the private attorney general theory, which is intended to promote the vindication of important rights affecting the public interest, the substantial benefit rule is intended to prevent unjust enrichment. (Woodland Hills II, supra, 23 Cal.3d at pp. 943-945, 154 Cal.Rptr. 503, 593 P.2d 200.)

An award of fees under the substantial benefit rule does not require substantial benefit to the defendant, but permits the award where it will operate to spread costs proportionately among the benefited members of an ascertainable class, e. g., where the defendant represents or acts on behalf of the benefited class. (Id., at pp. 943-944, 154 Cal.Rptr. 503, 593 P.2d 200; see also Serrano v. Priest, supra, 20 Cal.3d at p. 40 n. 10, 141 Cal.Rptr. 315, 569 P.2d 1303.) "So long as the costs bear a reasonable relation to the benefits, the 'involuntary client' who retains a substantial gain from the litigation will generally have no just cause to complain." (Woodland Hills II, supra, 23 Cal.3d at p. 945, 154 Cal.Rptr. at p. 519, 593 P.2d at p. 215; emphasis added.)

The court in Woodland Hills II stated that, while the substantial benefit rule has its clearest application where litigation results in the conferral of a substantial benefit of a pecuniary nature, "there have been instances in which litigation has produced nonpecuniary benefits of such a concrete and clearly substantial value that equitable considerations have suggested the injustice in permitting others to obtain such benefits without contributing to their cost." (Woodland Hills II, supra, 23 Cal.3d at pp. 945-946, 154 Cal.Rptr. at p. 519, 593 P.2d at p. 216.) The stare decisis result of litigation, however, is not alone sufficient to justify an attorney fee award under the rule. (Id., at pp. 946-947, 154 Cal.Rptr. 503, 593 P.2d 200.) Nor was an award justified in Woodland Hills II on the basis that the litigation resulted in the effectuation of...