In Coalition for a Sustainable Future in Yucaipa v. City of Yucaipa, 2015 DJDAR 7857, the California Court of Appeal for the Fourth Appellate District decided an interesting case under the California Environmental Quality Act (CEQA).
An environmental organization filed a CEQA petition. It challenged a municipality’s approval of a “big box” store. The trial court denied the petition and the environmental group filed an appeal of that decision. While the appeal was pending, the developer abandoned the project due to a contractual dispute and the city revoked the permits for the project. The environmental group then filed a motion for attorney fees pursuant to Code of Civil Procedure Section 1021.5. The group claimed “their actions” led to denial of the permit. The trial court rejected that “catalyst argument.”
The court of appeal affirmed the trial court’s decision. The appellate court noted that CCP Section 1021.5 allows the court upon motion to award attorney fees to a successful party against an opposing party where the litigation results in the enforcement of an important public policy interest. The “catalyst theory” allows fees “if the defendant changes its behavior substantially” due to the litigation. The court ruled that the catalyst argument failed in the instant matter as the developer abandoned its project solely due to a contractual dispute. Because the CEQA action was not “the cause” for the city’s revocation of the land use permit, the environmental group was not entitled to fees.