Redondo Beach city officials and others who successfully defended themselves against a lawsuit courts determined was intended solely to punish them for supporting a ballot measure to change Redondo Beach’s zoning rules can’t yet collect nearly $900,000 in attorney fees from the people who sued them, because a state appeals court did not clearly rule the lawsuit was frivolous, the California Supreme Court has ruled.
The court handed down the ruling on Jan. 30 in the long-running court action brought against Redondo Beach Mayor Bill Brand and others over a contentious ballot box battle over the fate of a waterfront development.
The lawsuit, brought by two Redondo Beach residents, centered on the controversy over a $400 million waterfront development project in the city’s King Harbor-Pier area, to be developed by CenterCal Properties LLC.
The project secured all needed approvals during the planning process. However, a group of residents opposed to the project placed a measure on the ballot, known as Measure C, to place zoning restrictions on the King Harbor-Pier project. Measure C was approved by voters in March 2017.
The project and ballot measure spurred several lawsuits. Among them was a lawsuit brought by Redondo Beach residents Arnette Travis and Chris Voisey who opposed Measure C. They asserted a political committee, known as Rescue Our Waterfront, deceived voters by failing to disclose the true identities of those behind Measure C, including Mayor Brand.
They asserted the disclosures were required under the California Political Reform Act because Rescue Our Waterfront PAC was “’primarily formed’ to support Measure C” and was “controlled by candidates,” including Brand.
The lawsuit asserted the law should have required the PAC to disclose the information to the public.
Lower courts ruled in favor of the defendants. The courts also awarded the defendants $896,896 in attorney fees, to be paid by the plaintiffs.
The trial court judge determined the lawsuit was “frivolous, unreasonable and groundless” and was intended solely “to punish the defendants for their free speech and their public support to guard against the project.”
The fee award was upheld on appeal, as the Court of Appeal said it was clear the defendants were “unquestionably’ the prevailing parties,” and there was no need to determine if the lawsuit was frivolous before ordering the plaintiffs to pay the large attorney fee award.
Travis and Voisey appealed to the state Supreme Court, however, and the high court said both the lower courts erred.
In their decision, the Supreme Court justices noted the Political Reform Act gives the courts discretion on awarding attorney fees for “a plaintiff or defendant who prevails.”
However, the high court sided with the plaintiffs in this case in determining the law should be read to treat plaintiffs and defendants differently.
Plaintiffs should be able to extract their legal fees from defendants no matter how they win in a lawsuit alleging violations of the Political Reform Act, the Supreme Court said. But defendants, on the other hand, should only be allowed to collect if they can demonstrate the plaintiffs’ lawsuit was frivolous, unreasonable or groundless.
If defendants can secure such payouts from plaintiffs as a matter of course, that reading of the law would result in an interpretation that would severely limit the ability of ordinary people to pursue legal action under the law against defendants with much deeper pockets.
“… The voters intended for the Political Reform Act to be robustly enforced to promote the important public policy of transparency,” the justices wrote.
“… Maximizing the number of meritorious suits through the Political Reform Act’s private enforcement mechanism is of primary important. Encouraging such claims is the best way to further the act’s objective of ensuring that ‘adequate enforcement mechanisms… be provided to public officials and private citizens.
“A rule allowing defendants to recover their attorney’s fees whenever they prevail would discourage a large number of plaintiffs who may have colorable claims but ‘who dare not risk the financial ruin caused by an award of attorney fees if they ultimately do not succeed.’”
The justices said they recognized their reading of the law could impose a steep “financial burden” on “some defendants who are themselves participants in the political process.”
But they said defending against such lawsuits may just be a “cost of doing business in politics,” and may be a function of passing on the cost of enforcing the law’s transparency and reporting requirements.
The Supreme Court reversed the appellate court and sent the decision back to them for more proceedings on the key question of whether Travis and Voisey had filed a frivolous claim.
The opinion was authored by Chief Justice Patricia Guerrero. Justices Carol A. Corrigan, Goodwin H. Liu, Leondra R. Kruger, Joshua P. Groban, Martin J. Jenkins and Tani G. Cantil-Sakauye all concurred in the decision.
Travis and Voisey were represented by attorneys Bradley W. Hertz, James R. Sutton and Nicholas L. Sanders, of the Sutton Law Firm, of San Francisco and Los Angeles; and Betty M. Shumener, John D. Spurling and Daniel E. French, of the firm of Shumener, Odson & Oh, of Los Angeles.
Defendants were represented by attorneys Jeanne L. Zimmer, of Carlson & Messer, of Los Angeles; Stevan Colin, of Gabriel & Associates, of Long Beach; and Bobak Nayebdadash, of El Segundo.