State Supreme Court reverses Brand, Nehrenheim attorney’s fees award
by Garth Meyer
Reversed – The California State Supreme Court has turned back an Appeals Court decision that granted attorney’s fees to Redondo Beach Mayor Bill Brand and City Councilman Nils Nehrenheim, after a 2019 trial court victory.
The ruling was announced Monday after testimony Dec. 7 in San Francisco.
“Consistent with the standard adopted in similar contexts, a prevailing defendant under the Political Reform Act ‘should not be awarded fees and costs unless the court finds the action was objectively without foundation when brought, or the plaintiff continued to litigate after it clearly became so,” wrote Chief Justice Patricia Guerrero in her opinion, signed by the six other justices.
“Because the Court of Appeal affirmed an award of attorney’s fees under section 91003(a) in this case without first considering whether this standard had been met, we reverse the judgment and remand for further proceedings.”
The issue now returns to the Second Appellate Court – Division Eight (Los Angeles) for it to decide the central question: was the lawsuit frivolous, unreasonable or without foundation?
“We’re very pleased with the result,” said Betty Shumener, attorney for plaintiffs Chris Voisey, Arnette Travis and Redondo Beach Waterfront, a CenterCal affiliate.
In their lawsuit, they contended that Brand and Nehrenheim misled voters about their involvement in a political action committee (PAC), Rescue Our Waterfront, in the leadup to 2017’s Measure C – which ultimately stopped the $400 million King Harbor CenterCal development project.
“I think we’re going to be good,” said Steve Colin, attorney for Mayor Brand and his volunteer treasurer Linda Moffat. “They just punted it back to the Court of Appeals — to clean up, or to be more specific.”
At the 2019 trial, it was revealed that CenterCal paid for the plaintiffs’ attorneys.
“The trial judge had no less than six opportunities to throw out the case,” said Shumener. “It has to be frivolous at the outset, or if new facts (arise) to make it frivolous.”
In December 2022, at the Supreme Court chambers, Colin argued that winning defendants and plaintiffs “are to be treated the same” on whether the fees should be awarded.
Shumener and plaintiffs countered that a defendant’s chance to recover fees is more limited than that of a plaintiff: a winning defendant may get attorney’s fees only if the plaintiff’s suit was frivolous, unfounded or unreasonable.
“We agree with the plaintiffs,” wrote Chief Justice Guerrero, in the court’s opinion.
Guerrero further explained the California ruling, citing principles outlined by the U.S. Supreme Court.
“To reiterate, under the asymmetrical standard, a prevailing defendant ‘should not be awarded fees and costs unless the court finds the action was objectively without foundation when brought, or the plaintiff continued to litigate after it clearly became so,” she wrote.
“… Indeed, a rule subjecting unsuccessful plaintiffs to substantial financial risk in Political Reform Act cases … would discourage all but a few from seeking to enforce laws vital to ensuring transparency in the political process.”
The fees in question total more than $900,000, and are subject to 10 percent interest per year.
Overall, the State Supreme Court stated no opinion on the merits of awarding attorney fees in the case, but just that it was up to the Court of Appeals to decide.
“The award of attorney’s fees under the Political Reform Act is ‘designed to ameliorate the burden on the individual citizen who seeks to remedy what is essentially a collective wrong,’” wrote the chief justice.
Voisey and Travis are Redondo Beach residents.
Shumener told the State Supreme Court in December there was no element of self-gain for them in the case.
The plaintiffs maintain that Mayor Brand and Nehrenheim coordinated with resident Wayne Craig in a hidden manner on Rescue Our Waterfront (ROW), and failed to submit the proper forms for disclosure.
Attorney Colin previously acknowledged that the first document filed by Craig and Martin Holmes for ROW, the statement of organization, was in error. Check boxes for “General Purpose Committee” and “Primarily-Formed Committee” were both checked, when only one should have been.
A General Purpose Committee, which ROW corrected its filing to be, means a PAC formed for an ongoing matter. “Primarily-focused” applies to a particular purpose, such as Measure C in this case.
Rescue Our Waterfront is a General Purpose Committee, Colin said.
Neither a General Purpose nor Primarily-Focused committee may be associated with a political figure.
The final Appeals Court ruling is subject to attorneys’ fees up to date. ER