Ahh the CEQA

Heron Bay Homeowners Assoc. v. City of San Leandro, No. A143985 (D1d4 Jan. 12, 2018)

A Homeowners’ Association obtained a writ of mandate under CEQA, ordering a City and a Manufacturer to prepare an environmental impact report before beginning construction of a 100-foot tall wind turbine near the HOA’s neighborhood. City and Manufacturer gave up on the project. But the trial court nonetheless awarded the HOA its fees under the private attorney general doctrine, Code of Civil Procedure § 1021.5.

Section 1021.5 uses a three-part test: (1) the action must result in the enforcement of an important right affecting the public interest; (2) the benefit of the litigation has to be conferred on the public or a large class of people; and (3) the necessity and burden of private enforcement must make an award appropriate. (1) and (2) aren’t disputed. It all comes down to (3). The rub of the issue is that the construction of the turbine would likely have had a negative impact on the value of the HOA members’ properties, thus giving them a personal financial incentive to litigate on their own behalf.

The general test on the third element looks to whether the personal stake of the private plaintiffs is insufficient to merit the costs of the litigation. The trial court split the baby. Finding the question to be a very close call, the court held that the HOA had an incentive to incur some, but not all of the costs, and thus awarded about half of the requested fees. 

That wasn’t error. The benefits to the HOA members—avoidance of some potential for diminution of property values—were speculative and highly unevenly disbursed through the community. And in addition to their personal financial concerns, the HOA also brought the case out of its members concerns about noise, the safety of wildlife (birds in particular) and the environment. Moreover, whatever financial benefit there might been was remote given that nothing would have prevented City and Manufacturer from completing the project had they conducted an EIR. Thus, even though the trial court’s efforts to calculated the potential financial loss to the HOA were erroneous because they were to a large degree arbitrary and relied on the member’s subjective motives, the award was affirmed. The record did not establish that the objective pecuniary incentives were so substantial and certain as to make private enforcement worthwhile on its own.

Affirmed.