County of Inyo v. City of Los Angeles

Opinion

We deny Inyo County’s motion for imposition of costs (amounting to $1,067.61) and an attorney fee (of $85,267.50) against the adverse party, City of Los Angeles.

The lawsuit is an original mandate action in which Inyo County is the petitioner and Los Angeles the respondent. In 1973 we issued a peremptory writ of mandate directing the City of Los Angeles and its department of water and power to prepare an environmental impact

The parties debate the timeliness of the county’s application. In prerogative writ proceedings in the appellate courts the prevailing party may be awarded costs but only by direction of the court in its judgment or before its judgment reaches finality. (Union Trust Co. v. Superior Court (1939) 13 Cal.2d 541 , 543-544 [ 90 P.2d 582 ].) The city’s charge of tardiness is based upon the “finality” of our June 1977 decision rejecting the city’s return to the writ of mandate.

The time limitation voiced in Union Trust, supra, stems from the court’s lack of jurisdiction after the lawsuit is terminated by a final decision. Our decision of June 1977 was an interim one which did not terminate the lawsuit; rather, it was characterized by a retention of continuing jurisdiction to enforce the writ of mandate until the latter had been satisfied. (County of Inyo v. City of Los Angeles, supra, 71 Cal.App.3d at p. 205; County of Inyo v. City of Los Angeles, supra, 61 Cal.App.3d at p. 95.) A peremptory writ of mandate does not necessarily exhaust the court’s authority; where it does not provide complete relief, the court may continue the lawsuit and make such interim orders as the case may require. (Gonzales v. Internat. Assn. of Machinists (1963) 213 Cal.App.2d 817 , 820 [ 29 Cal.Rptr. 190 ].) In the absence of a final judgment we retain jurisdiction over the parties and subject matter, as well as ancillaiy jurisdiction to award costs.

We turn to the attorney fee claim. Section 1021, Code of Civil Procedure, is the California codification of the general American doctrine which denies attorney fees to victorious litigants unless provided by statute or contract. Inyo County’s fee application is grounded on three rules or theories which various courts have recognized as nonstatutoiy exceptions to the general doctrine: the private attorney general rule, the substantial benefit rule and the vexatious litigant rule. (The county terms the last the “obdurate behavior” rule.)

These are three of the four principles, rules or concepts described in Serrano v. Priest (1977) 20 Cal.3d 25 [ 141 Cal.Rptr. 315 , 569 P.2d 1303 ], which we shall cite as Serrano III. Serrano III described two recognized California principles, rules or theories, stemming from the inherent equitable powers of the courts. “ ‘The first of these is the well-established “common fund” principle: when a number of persons are entitled in common to a specific fund, and an action brought by a plaintiff or plaintiffs for the benefit of all results in the creation or preservation of that fund, such plaintiff or plaintiffs may be awarded attorney’s fees out of the fund. . . . The second principle, of more recent development, is the so-called “substantial benefit” rule: when a class action or corporate derivative action results in the conferral of substantial benefits, whether of a pecuniary or nonpecuniaiy nature, upon the defendant in such an action, that defendant may, in the exercise of the court’s equitable discretion, be required to yield some of those benefits in the form of an award of attorney’s fees.’ ” (Serrano III, at p. 34.)

Serrano III described two additional theories grounded largely in federal case law. “The first of these, involv[ed] awards against an

Quoting from an earlier California decision, Serrano III described the fourth, or private attorney general theory in these terms: “This concept, as we understand it, seeks to encourage suits effectuating a strong congressional or national policy by awarding substantial attorney’s fees, regardless of defendants’ conduct, to those who successfully bring such suits and thereby bring about benefits to a broad class of citizens.” (D’Amico v. Board of Medical Examiners, supra, 11 Cal.3d at p. 27.) Serrano III went on to elaborate the private attorney general concept: “Thus it seems to be contemplated that if a trial court . . . determines that the litigation has resulted in the vindication of a strong or societally important public policy, that the necessary costs of securing this result transcend the individual plaintiff’s pecuniary interest to an extent requiring subsidization, and that a substantial number of persons stand to benefit from the decision, the court may exercise its equitable powers to award attorney fees on this theory.” (Id., at p. 45.)

It is not certain whether Serrano III intended to postulate four separate standards whose discrete verbal forms would govern fee applications; or, whether it merely described several stock situations in which American courts, in the exercise of an historic discretionary power, have been habitually receptive to those applications. The verbalization of separate formulae seemingly requires a court to test each fee claim against each formula posed as its justification. The historic origin of the award was described and annotated in Trustees v. Greenough (1882) 105 U.S. 527 [ 26 L.Ed. 1157 ], Sprague v. Ticonic Bank (1939) 307 U.S. 161 [ 83 L.Ed. 1184 , 59 S.Ct. 777 ], and Alyeska Pipeline Co. v. Wilderness Society (1975) 421 U.S. 240 , 257-258 [ 44 L.Ed.2d 141 , 153-154, 95 S.Ct. 1612 ]. See generally, Dawson, Lawyers and Involuntary Clients: Attorney Fees from Funds (1974) 87 Harv.L.Rev. 1597 ; Horn-stein, Legal Therapeutics: The “Salvage” Factor in Counsel Fee Awards (1956) 69 Harv.L.Rev. 658 .) The doctrine was a unitary one, evoked by exceptional cases in equity, “part of the original authority of the chancellor to do equity in a particular situation” and to achieve justice “as between a party and the beneficiaries of his litigation.” (Sprague v. Ticonic Bank, supra, 307 U.S. at pp. 166-167 [83 L.Ed. at p. 1187]; Fletcher v. A. J. Industries, Inc. (1968) 266 Cal.App.2d 313 , 323 [ 72 Cal.Rptr. 146 ].)

On the assumption that the described benefits flowed statewide, the fee applicant has failed to establish that they were disproportionately important and valuable in comparison to its own. A county is a political subdivision of the state which provides state and local governmental services for its inhabitants. (County of Marin v. Superior Court (1960) 53 Cal.2d 633 , 638-639 [ 2 Cal.Rptr. 758 , 349 P.2d 526 ].) Inyo County went to court as champion of local environmental values, which it sought to preserve for the benefit of its present and future inhabitants. This action is not a “public interest” lawsuit in the sense that it is waged for values other than the petitioner’s. The litigation is self-serving. The victory won by the county in 1977 bulked large enough to warrant the cost of winning it. The necessity for enforcement by Inyo County did not place on it “a burden out of proportion to [its] individual stake in the matter.” (Serrano III, supra, 20 Cal.3d at p. 46, fn. 18.) The application thus fails to satisfy a basic demand of the private attorney general concept.

Inyo County has pointed to its limited ability to bear the expense of extended and elaborate litigation and the relatively large financial capability of its opponent. Disparity of economic resources has played a role in some counsel fee decisions, but only where the basic requisites of the award were otherwise satisfied. (See for example, Hall v. Cole (1973) 412 U.S. 1 , 13 [ 36 L.Ed.2d 702 , 712, 93 S.Ct. 1943 ].)

The “substantial benefit” concept supplies no better foothold for the fee application. It is implicit in all these award cases—whether rationalized as an exercise of equitable discretion or in terms of

Nothing in Serrano III tempers the “adverse interest” ground for denying the award. The county, to be sure, points to water conservation benefits which its litigation brought to the City of Los Angeles. These benefits were a byproduct of a lawsuit whose main objective has been to delay and limit the city’s extraction and export of Owens Valley groundwater. That objective is hostile to the city’s interest in the restriction-free utilization of its groundwater resources. Adversity of interest causes rejection of the substantial common benefit theory.

V

Finally, we turn to the “vexatious litigant” ground asserted in support of the attorney fee. We assume existence of power to make the award on this ground (see Williams v. MacDougall, supra, 39 Cal. at pp. 85-86), abstain from affirming the power and reject the claim for lack of merit.

Although the courts have employed a variety of pejorative terms to describe the behavior which evokes the theory, its authoritative expression occurs in Alyeska Pipelines Co. v. Wilderness Society, supra, 421 U.S. at page 259 [44 L.Ed.2d at page 154]: “. . . [A] court may assess attorneys’ fees . . . when the losing party has ‘acted in bad faith, vexatiously, wantonly, or for oppressive reasons ....’” The rule is identically worded in Hall v. Cole, supra, 412 U.S. at page 5 [36 L.Ed.2d at page 707], Serrano III, 20 Cal.3d at page 42, and D’Amico v. Board of Medical Examiners, supra, 11 Cal.3d page 26.

The law employs the standard of bad faith in many contexts; the meaning of the term necessarily varies with the context. In general, bad faith extends beyond fraud or dishonesty and embraces unfair dealing; it often denotes a deliberate refusal to perform without just or reasonable cause or excuse. (See Crisci v. Security Ins. Co. (1967) 66 Cal.2d 425 , 430 [ 58 Cal.Rptr. 13 , 426 P.2d 173 ]; Brandolino v. Lindsay (1969) 269 Cal.App.2d 319 , 325 [ 75 Cal.Rptr. 56 ].) As a ground for the attorney fee award, it gains color from the accompanying terms “wantonly, or for oppressive reasons.” Bad faith, as an oppressive quality warranting a fee award, occurs when a defendant contumaciously deprives a plaintiff of his clear legal entitlement, forcing the latter into the expense of rescuing himself through legal action. (See Williams v. MacDougall, supra, 39 Cal. at pp. 85-86; Huecker v. Milburn (6th Cir. 1976) 538 F.2d 1241 , 1245, fn. 9.) Bad faith is a question of fact in each case. (River Garden Farms, Inc. v. Superior Court (1972) 26 Cal.App.3d 986 , 998 [ 103 Cal.Rptr. 498 ]; Tancredi v. Garrett (1962) 210 Cal.App.2d 818 , 823 [ 27 Cal.Rptr. 52 ].)

In our 1977 decision rejecting the environmental impact report prepared by Los Angeles, we sharply criticized the report and the choices which had shaped it. We charged its authors with “wishful misinterpretation” of the project; complained of their fallacious assumptions; spoke of “incessant shifts among different project descriptions” which vitiated the report as a vehicle for intelligent public participation; charged the department of water and power with “calculated selection” of its truncated and erroneous project description. (County of Inyo v. City of Los Angeles, supra, 71 Cal.App.3d at pp. 195, 196, 197, 200.) Utilizing these criticisms, the county complains of obdurate behavior which forced it into legal expense to accomplish judicial rejection of the environmental impact report. The county also charges Los Angeles with obdurate behavior in supplying the court with inaccurate and misleading information, both in connection with the environmental impact report and in the course of debates over interim injunctive orders regulating water use. Los Angeles controverts these charges.

The accusation of factually inaccurate papers is de minimis. The accusation and its targets are shaped by the slanted perceptions of contending parties. Here, as elsewhere, the county’s specifications fall short of a showing of bad faith.

The motion for costs and attorney fees is denied.

Puglia, P. J., and Evans, J., concurred.

A petition for a rehearing was denied March 15, 1978, and petitioner’s application for a hearing by the Supreme Court was denied May 11, 1978. Richardson, J., did not participate therein.