Following our decision, plaintiffs sought an award of attorney fees from the Board under Code of Civil Procedure 1section 1021.5, arguing they had conferred a substantial public benefit by obtaining a published appellate opinion addressing the issue of water rights forfeiture under California law. Plaintiffs argued the action had constituted a "financial burden" to them, as the term is used in section 1021.5, because they stood to gain no money judgment from the action. The trial court awarded plaintiffs attorney fees with respect to the appeal, although
I. BACKGROUND
California maintains a "dual system" of water rights, which distinguishes between the rights of "riparian" users, those who possess water rights by virtue of owning the land by or through which flowing water passes, and
In 1998, Hill and Gomes acquired a 33.88-acre parcel of land adjoining the Russian River (the parcel). As part of the transaction, they were assigned an appropriative water right known as the "Waldteufel claim," which had been recorded in early 1914 by J.A. Waldteufel, a prior owner of the parcel. As later determined by the Board, Waldteufel claimed the right to divert the equivalent of 1,450 acre-feet per year (afa) from the Russian River.
In 2001, Hill and Gomes sold most of the parcel to a developer, who later constructed homes on it. The same year, they licensed the Waldteufel claim to Millview, which provides water service to an unincorporated area of Mendocino County north of Ukiah. The annual license fee started at $10,000 in 2001 and rose to $30,000 by 2005. Soon after licensing the Waldteufel claim, Millview began diverting water from the Russian River, supplying water not only to the homes built on the parcel but also elsewhere within the boundaries of the district. During the years for which information is available in the record, 2001 through 2008, Millview's diversions varied from a low of 3.76 acre-feet in the first year to a high of 1,174.75 acre-feet in 2005.
In 2006, a private citizen filed a complaint with the Board, contending the Waldteufel claim did not authorize Millview's diversion because the right was riparian rather than appropriative and forfeited by long nonuse. Board staff investigated the claim and, the next year, issued a memorandum concluding that water rights under the Waldteufel claim had indeed been largely forfeited. Staff opined the claim could now support the diversion of no more than 15 afa, dramatically less than the 1,450 afa claimed in Waldteufel's claim. In April 2009, the Board issued a notice proposing entry of a CDO limiting Millview's diversion of water under the Waldteufel claim to a
Although the purchase agreement specified a price for the various assets of $2.1 million, the amount Millview was ultimately required to pay depended entirely upon the outcome of the CDO proceeding. In the event a final court order was entered limiting Millview's diversion under the Waldteufel claim to less than 1.64 cubic feet per second, a reduction in purchase price was to be agreed by the parties or determined by binding arbitration.
Following an evidentiary hearing on plaintiffs' challenge, the Board issued a CDO in 2011, limiting Millview's diversion under the Waldteufel claim to 15 afa, taken only during the period April through September. Although the Waldteufel claim purported to be a right of appropriation, the Board's order noted the claim did not appear to have been perfected as such because Waldteufel's only demonstrated use of water was for irrigation on the parcel. A finding to this effect would have precluded any appropriation under the claim, but the Board did not base its order on this theory because the original CDO notice did not raise the validity of the Waldteufel claim as an issue.
Millview, Gomes, and Hill filed a petition for a writ of mandate requiring the Board to set aside the CDO. The trial court's order granting the writ was affirmed by this court in Millview I, supra ,
Following remittitur of our decision, the Board set aside the CDO and, in an order dated August 28, 2015, directed its staff to "consider" initiating an enforcement action against Millview, consistent with the options set out in Millview I. The Board has apparently taken no further action with respect to Millview's diversion under the Waldteufel claim.
Also following remittitur, plaintiffs renewed a previously filed motion for an award of attorney fees under Code of Civil Procedure section 1021.5. The original motion was filed in 2013, after the trial court issued its order granting the writ of mandate, seeking fees incurred by plaintiffs in connection with the Board and trial court proceedings. The trial court denied it, concluding plaintiffs had not shown a significant public benefit from the litigation. In their renewed motion, plaintiffs added a request for fees incurred in connection with the Millview I appeal. The renewed motion argued (1) "[a]lthough
With respect to the "financial burden" element, plaintiffs argued the litigation would result in no financial benefit to them because they did not receive a monetary award. At most, they argued, the litigation protected "an interest that they previously had." In a declaration explaining Hill's and Gomes's motive for challenging the proposed
By the time of the renewed motion, Hill and Gomes had been billed over $339,000 by their attorneys, while Millview's attorney fees totaled $247,028.
Plaintiffs' renewed motion for attorney fees was opposed by the Board, the Improvement District, and the other intervener. They argued (1) the court no longer had jurisdiction to award attorney fees sought in their original attorney fees motion; (2) plaintiffs were not prevailing parties because they had not
The trial court granted the renewed motion in part, awarding plaintiffs the fees incurred in litigating the Millview I appeal, but it denied them fees incurred prior to the appeal, viewing those as no longer available because plaintiffs did not appeal the denial of the original motion. The court concluded plaintiffs were the prevailing parties by virtue of their invalidation of
The Board has appealed the trial court's award of the attorney fees incurred in connection with the appeal, while plaintiffs have appealed the court's refusal to award them the fees they incurred earlier in the litigation.
II. DISCUSSION
On appeal, the parties largely reiterate the arguments presented to the trial court. We find it necessary to address only the issue of financial burden. Because there is no substantial evidence to support the trial court's conclusion that plaintiffs lacked a sufficient financial incentive to justify their
Section 1021.5 was enacted as " 'a codification of the "private attorney general" attorney fee doctrine that had been developed in numerous prior judicial decisions.... [T]he fundamental objective of the private attorney general doctrine of attorney fees is " 'to encourage suits effectuating a strong [public] policy by awarding substantial attorney's fees ... to those who successfully bring such suits and thereby bring about benefits to a broad class of citizens.' " [Citation.] The doctrine rests upon the recognition that privately initiated lawsuits are often essential to the effectuation of the fundamental public policies embodied in constitutional or statutory provisions, and that, without some mechanism authorizing the award of attorney fees, private actions to enforce such important public policies will as a practical matter frequently be infeasible.' " (Whitley , supra , 50 Cal.4th at pp. 1217-1218,
Our focus is on the final element, that the "financial burden of private enforcement ... [is] such as to make the award appropriate."
In evaluating the element of financial burden, "the inquiry before the trial court [is] whether there were 'insufficient financial incentives to justify the litigation in economic terms.' " (Summit Media , supra ,
The burden is on the party requesting section 1021.5 fees to demonstrate all elements of the statute, including that the litigation costs transcend his or her personal interest. (Norberg v. California Coastal Com. (2013)
Plaintiffs failed to provide substantial evidence to support a finding that " ' "pursuing the lawsuit placed a burden on [them] 'out of proportion to [their] individual stake in the matter.' " ' " (Whitley , supra ,
Plaintiffs' argument that they were merely protecting what they had, even if accepted, does not demonstrate they lacked an adequate financial incentive to participate in the Board proceeding. Plaintiffs viewed the Waldteufel claim as authorizing diversion of 1,450 afa from the Russian River. The proposed CDO would have limited diversion under the claim to slightly more than 1 percent of that volume. Had plaintiffs taken no action, the Board, in the ordinary course, would have entered the CDO, thereby essentially eliminating diversion under the claim. From Millview's point of view, the Board's entry of the CDO would have rendered the newly purchased asset, for which it claims to have paid a minimum of $500,000, essentially worthless. As to Hill and Gomes, entry of the proposed CDO would have reduced their return under the purchase agreement from $2.1 million to $500,000. For both, the prevention of this result would have provided ample financial incentive to become involved in the lawsuit, even if that involvement is characterized merely as protecting the value of the claim.
Controlling in this regard is Summit Media. In that case, the plaintiff, an operator of billboards in Los Angeles, sued to invalidate a litigation settlement agreement between the City of Los Angeles and several other billboard companies, competitors of the plaintiff. The agreement exempted the competitors from city regulations limiting their ability to modernize their billboards. Because the plaintiff was not a party to the settlement, its billboards would have continued to be subject to those regulations. (Summit Media , supra , 240 Cal.App.4th at pp. 174-175,
In the same way, plaintiffs' failure to seek a monetary award in challenging the CDO did not mean "there were 'insufficient financial incentives to justify the litigation in economic terms.' " (Summit Media , supra ,
Plaintiffs argue they qualify for a section 1021.5 award under the test enunciated 30 years ago in Los Angeles Police Protective League v. City of Los Angeles (1986)
We disagree with plaintiffs that Whitley "approved" the analysis of LA Police. The Whitley court considered whether a party's "nonfinancial, nonpecuniary personal interests in the litigation" could be considered in determining whether " 'the necessity
To the extent the court in LA Police intended to suggest that the financial burden analysis is concerned only with the actual financial recovery of a party from the litigation, as plaintiffs contend, we decline to follow it. Such a holding is inconsistent with more recent authorities, which, as discussed above, consider a party's financial incentives to participate in litigation-that is, the potential financial benefits, broadly defined-regardless of the actual recovery, if any, from the litigation. (Davis , supra ,
Because we conclude plaintiffs failed to provide the trial court with substantial evidence
III. DISPOSITION
The portion of the trial court's order granting to plaintiffs attorney fees expended in connection with Millview I is reversed, while the portion of its order denying an award of fees incurred by plaintiffs earlier in the litigation is affirmed. The Board may recover its costs associated with both its own appeal and plaintiffs' cross-appeal. (Cal. Rules of Court, rule 8.278(a)(1), (2).)
We concur:
Dondero, J.
Banke, J.
All statutory references are to the Code of Civil Procedure.
Notes
Plaintiffs consistently treat the purchase agreement and the consideration paid under it as covering only the Waldteufel claim, disregarding the transferred real property. We were unable to find in the appellate record any information about the nature of these parcels, although they are expressly included in the purchase agreement.
A diversion rate of 1.64 cubic feet per second would have resulted in considerably more diversion than permitted by the Board's proposed CDO, which established a maximum diversion rate of 1.1 cubic feet per second and limited the time of year during which diversion could occur.
Because this limitation on diversion would severely reduce the usefulness of the Waldteufel claim, it appears that the nonrefundable $500,000 down payment was intended in part to cover Millview's purchase of the real property and its associated water rights. Because we have no information about this issue and plaintiffs have treated the purchase price as covering only acquisition of the Waldteufel claim, however, we treat the down payment entirely as representing compensation for the claim.
The statute also refers to the "necessity" of private enforcement, but the parties do not dispute that private enforcement was necessary here.
While the exact dollar value of these benefits is unclear, it is presumably substantial. To the extent Millview contended to the contrary, it was Millview's burden to provide the trial court with sufficient information to determine their value. (Norberg , supra , 221 Cal.App.4th at pp. 545-546,