Travis v. Brand

• Decision Date: 30 January 2023
• Docket Number: S268480
• Parties: Arnette TRAVIS et al., Plaintiffs and Appellants, v. Bill BRAND et al., Defendants and Respondents; Redondo Beach Waterfront, LLC, et al., Appellants. Arnette Travis et al., Plaintiffs and Appellants, v. Bill Brand et al., Defendants and Respondents.
• Court: California Supreme Court

14 Cal.5th 411

523 P.3d 380

304 Cal.Rptr.3d 69

Arnette TRAVIS et al., Plaintiffs and Appellants,

v.Bill BRAND et al., Defendants and Respondents;

Redondo Beach Waterfront, LLC, et al., Appellants.

Arnette Travis et al., Plaintiffs and Appellants,

v.Bill Brand et al., Defendants and Respondents.

S268480

Supreme Court of California.

January 30, 2023

The Sutton Law Firm, Bradley W. Hertz, James R. Sutton, Nicholas L. Sanders; Shumener, Odson & Oh, Betty M. Shumener, John D. Spurling, Los Angeles, and Daniel E. French for Plaintiffs and Appellants.

Carlson & Messer and Jeanne L. Zimmer, Los Angeles, for Defendant and Respondent Nils Nehrenheim.

Gabriel & Associates and Stevan Colin, Long Beach, for Defendants and Respondents Bill Brand, Brand for Mayor 2017 and Linda Moffat.

Law Offices of Bobak Nayebdadash and Bobak Nayebdadash for Defendants and Respondents Wayne Craig and Rescue Our Waterfront, P.A.C.

Opinion of the Court by Guerrero, C. J.

Several defendants were sued for their alleged failure to make certain required disclosures under the Political Reform Act of 1974 ( Gov. Code, § 81000 et seq. ).¹ After prevailing in the lawsuit, defendants successfully sought attorney's fees under section 91003, subdivision (a) (section 91003(a)), which grants trial courts discretion to award attorney's fees "to a plaintiff or defendant who prevails."² The question we address here is whether a trial court's discretion to award fees to a prevailing defendant is coextensive with its discretion to award fees to a prevailing plaintiff. The text of the statute does not specify the standard that should govern an award of fees to either prevailing party. Nonetheless, in order to effectuate the purpose of encouraging private litigation enforcing the Political Reform Act, we interpret section 91003(a) to impose an asymmetrical standard, which constrains the trial court's discretion to award attorney's fees to a prevailing defendant. Consistent with the standard adopted in similar contexts, including the enforcement of civil rights and fair housing and employment laws, a prevailing defendant under the Political Reform Act "should not be awarded fees and costs unless the court finds the action was objectively without foundation when brought, or the plaintiff continued to litigate after it clearly became so." ( Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 115, 186 Cal.Rptr.3d 826, 347 P.3d 976 ( Williams ).) Because the Court of Appeal affirmed an award of attorney's fees under section 91003(a) in this case without first considering whether this standard had been met, we reverse the judgment and remand for further proceedings.

I.

In 2010, residents of the City of Redondo Beach (City) approved Measure G, which authorized 400,000 square feet of new development in the City's King Harbor-Pier area. The City sought out a private developer to assist with the project and ultimately entered into an exclusive negotiating agreement with CenterCal Properties, LLC. ( Redondo Beach Waterfront, LLC v. City of Redondo Beach (2020) 51 Cal.App.5th 982, 988, 265 Cal.Rptr.3d 556 ( Redondo Beach Waterfront ).) In 2016, the project passed several milestones: the City notified CenterCal Properties that its application seeking approval of the vesting tentative tract map was " ‘deemed complete’ "; the harbor commission certified the environmental impact report and approved both a coastal development permit and a conditional use permit; and the city council passed a resolution reciting its approval " ‘shall confer a vested right to proceed with development.’ " ( Id . at pp. 988–989, 265 Cal.Rptr.3d 556.) The City and CenterCal Properties signed an agreement for lease of property and infrastructure financing the following year. ( Id . at p. 989, 265 Cal.Rptr.3d 556.)

Meanwhile, some City residents who opposed the development started soliciting signatures to place a local initiative — the King Harbor Coastal Access, Revitalization, and Enhancement Act (later designated Measure C) — on the ballot for the next general municipal election. Measure C sought to place zoning restrictions on the highly contested $400 million waterfront project. Measure C appeared on the March 7, 2017, ballot, and was approved by the voters. ( Redondo Beach Waterfront , supra , 51 Cal.App.5th at p. 990, 265 Cal.Rptr.3d 556.)

These events triggered various lawsuits, but we are concerned here only with one: an action seeking injunctive relief against certain Measure C supporters to compel their compliance with the Political Reform Act. The lawsuit was filed by two City residents who opposed Measure C and supported the development project, Arnette Travis and Chris Voisey (collectively, plaintiffs). Plaintiffs alleged that some supporters of Measure C had violated and continued to violate the Political Reform Act by failing to disclose the actual identity of entities who were supporting the ballot measure. These supporters included Rescue Our Waterfront, a political action committee (PAC), and Wayne Craig, a principal officer of the committee; Redondo Beach Mayor Bill Brand and City Councilmember Nils Nehrenheim; and Brand's mayoral campaign committee as well as its treasurer, Linda Moffat (collectively, defendants). According to the complaint, the Rescue Our Waterfront PAC was a committee " ‘primarily formed’ " to support Measure C and was therefore required to disclose this information to the public. ( Travis v. Brand (2021) 62 Cal.App.5th 240, 246, 276 Cal.Rptr.3d 535 ( Travis ); see Gov. Code, § 84107 ; Cal. Code Regs., tit. 2, § 18247.5.)³ The complaint further alleged that the Rescue Our Waterfront PAC was controlled by candidates Brand and Nehrenheim, which likewise should have been disclosed to the public. ( Travis , at p. 247, 276 Cal.Rptr.3d 535 ; see Cal. Code Regs., tit. 2, § 18521.5.) Failure to disclose this information, plaintiffs argued, had the effect of deceiving voters. ( Travis , at p. 247, 276 Cal.Rptr.3d 535.)

Following a five-day bench trial, the trial court ruled in defendants’ favor on all claims. It determined that the Rescue Our Waterfront PAC was a general purpose committee ( § 82027.5 ) — and therefore not primarily formed to support Measure C — and that neither Brand nor Nehrenheim exerted significant control or influence over it. ( Travis , supra , 62 Cal.App.5th at pp. 248, 252–253, 276 Cal.Rptr.3d 535.) The court awarded defendants costs and attorney's fees as prevailing parties under section 91003(a) in the amount of $896,896.60. ( Travis , at p. 253, 276 Cal.Rptr.3d 535.) In addition to declaring that defendants were the prevailing parties in the action, the trial court found plaintiffs’ lawsuit "was frivolous, unreasonable and groundless." The trial court reasoned that plaintiffs "prosecuted their private enforcement action in order to punish the [d]efendants for their free speech and their public support to guard against the [development] project."

As relevant here, the Court of Appeal affirmed the trial court's award of attorney's fees to defendants. ( Travis , supra , 62 Cal.App.5th at p. 265, 276 Cal.Rptr.3d 535.) The court held that section 91003(a) grants trial courts discretion to award attorney's fees and costs " ‘to a plaintiff or defendant who prevails ,’ " such that both "prevailing plaintiffs and prevailing defendants are to be treated alike" in determining their entitlement to a fee award. ( Id . at pp. 263, 264, 276 Cal.Rptr.3d 535.) Because defendants were "unquestionably" the prevailing parties in this litigation, the Court of Appeal concluded that the trial court acted within its discretion to award them attorney's fees ( id . at p. 264, 276 Cal.Rptr.3d 535 ), irrespective of any finding that the lawsuit was frivolous.

In construing the attorney's fees statute to define a single standard that applies equally to both prevailing plaintiffs and defendants, the Court of Appeal rejected two decisions — People v. Roger Hedgecock for Mayor Com . (1986) 183 Cal.App.3d 810, 228 Cal.Rptr. 424 ( Hedgecock ) and Community Cause v. Boatwright (1987) 195 Cal.App.3d 562, 240 Cal.Rptr. 794 ( Boatwright ) — which held that a prevailing defendant seeking attorney's fees under the Political Reform Act had to establish that the plaintiff's claims were frivolous, unreasonable, or without foundation. ( Hedgecock , at p. 815, 228 Cal.Rptr. 424 ; Boatwright , at p. 574, 240 Cal.Rptr. 794.)⁴

We granted review to resolve the conflict and to determine whether an asymmetrical standard applies to a prevailing defendant's request for attorney's fees under the Political Reform Act.

II.

California follows the American rule regarding attorney's fees. Under that rule, litigants are ordinarily responsible for paying their own attorney's fees, unless a statute or agreement provides otherwise. ( Essex Ins. Co. v. Five Star Dye House, Inc. (2006) 38 Cal.4th 1252, 1257, 45 Cal.Rptr.3d 362, 137 P.3d 192 ; Code Civ. Proc., § 1021.) The statutory exception at issue in this case is set forth in Government Code section 91003(a). It currently states, in pertinent part: "Any person residing in the jurisdiction may sue for injunctive relief to enjoin violations or to compel compliance with the provisions of this title. ... The court may award to a plaintiff or defendant who prevails that party's costs of litigation, including reasonable attorney's fees." (Ibid .)

The parties agree that this statute gives the trial court discretion to decide whether to award attorney's fees in cases arising under the Political Reform Act. They disagree, however, about the legal framework governing that discretion. Defendants, echoing the Court of Appeal, argue that prevailing plaintiffs and defendants "are to be treated the same" in determining whether to award attorney's fees. Plaintiffs, on the other hand, contend that a defendant's opportunity to recover attorney's fees is more limited than that of a plaintiff: a prevailing defendant may recover attorney's fees only when the plaintiff...