California Code of Civil Procedure Section 1021.5
Code of Civil Procedure Section 1021.5 codifies the private attorney general doctrine.
It reads in relevant part:
"Upon motion, a court may award attorneys' fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement . . . are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any. . . ."
The private attorney general 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." (Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 933, 154 Cal. Rptr. 503.)
There are three prerequisites to recovery under section 1021.5: "(1) the action has resulted in the enforcement of an important right affecting the public interest, (2) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, and (3) the necessity and financial burden of private enforcement make the award appropriate." (Planned Parenthood v. Aakhus (1993) 14 Cal.App.4th 162, 169-170 (Planned Parenthood).)
In California Licensed Foresters Assn. v. State Bd. of Forestry (1994) 30 Cal.App.4th 562, the Court explained that entitlement to an attorney fees award under Code of Civil Procedure section 1021.5 turns on a comparison of the litigant's private interests with the anticipated costs of suit. (Id. at p. 570.)
The Court noted: "Section 1021.5 is intended as a 'bounty' for pursuing public interest litigation, not a reward for litigants motivated by their own interests who coincidentally serve the public. 'The private attorney general theory recognizes citizens frequently have common interests of significant societal importance, but which do not involve any individual's financial interests to the extent necessary to encourage private litigation to enforce the right. To encourage such suits, attorneys fees are awarded when a significant public benefit is conferred through litigation pursued by one whose personal stake is insufficient to otherwise encourage the action." (Ibid.)
In Conservatorship of Whitley (2010) 50 Cal.4th 1206, the California Supreme Court clarified the proper method of evaluating the "necessity and financial burden" element of California Code of Civil Procedure section 1021.5, which has traditionally "been deemed satisfied ' "when the cost of the claimant's legal victory transcends his personal interest.' " ' " (People ex rel. Brown v. Tehama County Bd. of Supervisors (2007) 149 Cal.App.4th 422.)
Prior to Whitley, appellate courts were divided as to whether it was proper to consider a claimant's nonpecuniary "personal interests" when applying the financial burden element. (Compare RiverWatch, supra, 175 Cal.App.4th at pp. 776-777 "Although cases refer to this requirement as the 'financial burden' criterion, nothing in the language of section 1021.5 'confines the consideration of the necessity and financial burden clause to just financial interests.' " with Phipps v. Saddleback Valley Unified School Dist. (1988) 204 Cal.App.3d 1110, 1122-1123 251 Cal. Rptr. 720 "The fact plaintiff had a personal stake in the outcome of the litigation is irrelevant. ... 'Subdivision (b) of section 1021.5 focuses not on plaintiffs' abstract personal stake, but on the financial incentives and burdens related to bringing suit.' ".) Whitley resolved the dispute, holding that "a litigant's personal nonpecuniary motives may not be used to disqualify litigant from obtaining fees under ... section 1021.5." (Whitley, supra, at p. 1211.)
The plaintiff in Whitley, Virginia Maldonado, served as conservator for her developmentally disabled brother. In the underlying litigation, Maldonado successfully challenged certain procedures used to transfer her brother to a new medical facility. Maldonado then filed a section 1021.5 motion arguing that "an award of attorneys' fees was warranted ... because 'the decision created a procedural precedent that ... conferred a significant benefit on ... a large class of persons'" and "'transcended her personal interest in her brother's welfare.'" (Whitley, supra, 50 Cal.4th at p. 1213.) The defendant opposed the motion, arguing that "the financial burden imposed on Maldonado was not out of proportion to her personal interest in blocking her brother's transfer." The trial court agreed and denied the motion. (Ibid.)
On appeal, Maldonado argued that "section 1021.5's requirement that fees be awarded only when the 'necessity and financial burden of private enforcement ... make the award appropriate' means that litigants may not be eligible for attorney fees when they have an individual pecuniary stake in the litigation, but that litigants may not be disqualified from recovering fees simply because they have a personal, nonpecuniary interest. Because Maldonado did not have a pecuniary interest in the litigation, but only an interest related to her brother's welfare, she argued that she met the 'necessity and financial burden' requirement. The Court of Appeal disagreed, holding ... that a strong nonpecuniary personal interest in the litigation ... could disqualify a litigant from obtaining attorney fees under section 1021.5." (Whitley, supra, 50 Cal.4th at p. 1213.)
The Supreme Court reversed, holding that a litigant's "nonpecuniary interests do not affect his or her eligibility for section 1021.5 fees." (Whitley, supra, 50 Cal.4th at p. 1217.)
The court provided three reasons in support of its holding. First, it found that the "literal language" of the statute supported Maldonado's interpretation. (Ibid.)
The court explained that, contrary to the conclusion reached by some appellate courts, the phrase "the necessity and financial burden of private enforcement" (id. at p. 1214) is comprised of two distinct elements: a necessity prong and a financial burden prong.
The court found that the first prong "simply requires a showing that public enforcement is not available, or not sufficiently available" (50 Cal.4th at p. 1217), while the second prong requires a showing that " ' "the financial burden ... was such that an attorney fee award was appropriate in order to assure the effectuation of an important public policy" ' " (id. at p. 1216).
According to the court, "a strong nonfinancial motivation does not change or alleviate the 'financial burden' that a litigant bears. Only offsetting pecuniary gains can do that." (50 Cal.4th at p. 1217.)
Second, the court ruled that the legislative history of section 1021.5 demonstrated that the statute was intended to alleviate the financial burdens associated with public interest litigation. The court found it "noteworthy that the ... legislative history does not focus on litigants' initial subjective motivation--on what may cause them to want to bring a public interest lawsuit. What section 1021.5 does address is the problem of affordability of such lawsuits. ... The Legislature that enacted section 1021.5 was not so much concerned with what brought a litigant with a potential public interest case into an attorney's office, but rather with allowing that litigation to move forward from there by offering at least the prospect that the financial burden of the litigation could be shifted to the opposing party if the litigant prevailed." (Whitley, supra, 50 Cal.4th at pp. 1219-1220.)
Third, the court found that it would be "inherently problematic to forge a coherent doctrine around the notion that nonpecuniary interests may disqualify litigants from section 1021.5 fees." (Whitley, supra, 50 Cal.4th at p. 1225.)
The court explained that determining whether a particular "nonpecuniary" interest was sufficient to preclude recovery under section 1021.5 would require a "speculative inquiry lacking in objective criteria." (50 Cal.4th at p. 1225.)
The court also found that "nonpecuniary" benefits such as " 'environmental or aesthetic interests are not easily quantified so as to compare them to the cost of litigation.' ... Without any objective basis for quantification, we are left with the subjective opinions of trial courts, which well may vary considerably." (Ibid.)