Opinion
F073507
03-29-2018
KIM BELEMJIAN et al., Plaintiffs and Appellants, v. XAVIER BECERRA, as Attorney General, etc. et al., Defendants and Respondents.
Michel & Associates and C.D. Michel, Sean A. Brady, Anna M. Barvir, and Margaret E. Leidy for Plaintiffs and Appellants. Kamala D. Harris and Xavier Becerra, Attorneys General, Douglas J. Woods, Stepan A. Haytayan and Jeffrey A. Rich, Deputy Attorneys General, for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 15CECG00029)
OPINION
APPEAL from an order of the Superior Court of Fresno County. Alan M. Simpson, Judge. Michel & Associates and C.D. Michel, Sean A. Brady, Anna M. Barvir, and Margaret E. Leidy for Plaintiffs and Appellants. Kamala D. Harris and Xavier Becerra, Attorneys General, Douglas J. Woods, Stepan A. Haytayan and Jeffrey A. Rich, Deputy Attorneys General, for Defendants and Respondents.
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Plaintiffs and appellants, Kim Belemjian, Jonathan Fairfield, T.J. Johnston, Matthew Pimentel, Stanley Roy, FFLGuard, Inc., and California Rifle and Pistol Association, filed the underlying action challenging the regulatory process undertaken by defendants and respondents, Xavier Becerra, Stephen Lindley, and the Department of Justice (DOJ), to implement the Firearm Safety Certificate Program. The complaint alleged respondents failed to comply with the Administrative Procedures Act in promulgating the required administrative regulations.
Approximately two months after appellants filed their complaint, the Office of Administrative Law adopted respondents' emergency regulations. This action mooted appellants' claims.
Thereafter, appellants moved for attorney fees under the private attorney general doctrine. (Code Civ. Proc., § 1021.5.) The trial court denied the motion finding that appellants did not make a reasonable attempt to settle their claims before filing the suit and that appellants' lawsuit was not a catalyst, i.e., it did not cause respondents to modify their behavior.
All further statutory references are to the Code of Civil Procedure.
Appellants contend the trial court abused its discretion in denying their attorney fee request. According to appellants, they satisfied all the requirements for a fee award. Appellants alternatively argue the trial court abused its discretion in denying their request for oral testimony to support their motion for fees.
The trial court did not err as alleged. Accordingly, we affirm the order.
BACKGROUND
In October 2013, Governor Edmund G. Brown signed Senate Bill 683 (SB 683) into law. This bill created the Firearm Safety Certificate Program and amended the Penal Code to require that long-gun purchasers perform a "safe-handling demonstration" before taking possession of the firearm. Senate Bill 683 also directed the DOJ to adopt regulations establishing the "safe-handling demonstration" before the laws were to take effect on January 1, 2015.
In mid 2014, Stephen Lindley, Chief of the DOJ's Bureau of Firearms, met with interested parties to discuss the implementation of SB 683. At this meeting, the DOJ requested feedback regarding operation of the Firearm Safety Certificate Program and the long-gun safe-handling demonstrations.
By letter dated October 2, 2014, the DOJ, through Lindley, announced certain requirements for the implementation and administration of the Firearm Safety Certificate Program and long-gun safe-handling demonstration. The DOJ did not adopt these requirements as formal regulations under the Administrative Procedures Act.
On October 14, 2014, appellants' counsel sent a request for public records addressed to the "Attorney General's Office, Public Records Coordinator," seeking documents regarding the DOJ's implementation of the Firearm Safety Certificate Program.
In late 2014, Blake Graham, Special Agent Supervisor for the DOJ Bureau of Firearms, met with interested parties to review and discuss a draft of the new Firearm Safety Certificate manual. Lindley did not attend this meeting. During the meeting, Graham stated that the DOJ was behind on the implementation of the Firearm Safety Certificate Program and safe-handling demonstrations because of the absence of the DOJ employee responsible for overseeing the implementation of the program.
By letter dated December 18, 2014, the DOJ informed the DOJ certified instructors that it intended to enforce the informal rules first published on October 2, 2014, effective January 1, 2015.
On December 29, 2014, appellant FFLGuard, Inc. sent a petition to the "Chapter 2 Compliance Unit" of the Office of Administrative Law complaining that the DOJ failed to adhere to the Administrative Procedures Act when adopting rules for the Firearm Safety Certificate Program and safe-handling demonstration. FFLGuard sent copies of this petition to Stephen Lindley and then Attorney General Kamala Harris.
Appellants filed the underlying complaint on January 6, 2015, challenging respondents' regulatory process. They also sought a writ of mandate compelling respondents to adopt regulations for the long-gun safe-handling demonstration as required by SB 683.
Appellants applied ex parte for a temporary restraining order. The trial court heard the matter on January 7, 2015, and denied the application without prejudice.
On January 9, 2015, respondent's counsel notified appellants' counsel by emailed letter that respondents "are presently in the process of preparing emergency regulations and final regulations, pursuant to the Administrative Procedures Act, for the Firearm Safety Certificate Program." Respondents submitted an emergency regulation package to the Office of Administrative Law on February 25, 2015.
On March 4, 2015, respondents demurred to appellants' complaint. Respondents argued no actual controversy existed between the parties because "(1) the defendants do not actually oppose the position taken by the plaintiffs that Penal Code section 26860, subdivision (b), requires regulations, and (2) the defendants submitted emergency regulations under the APA."
On March 9, 2015, the Office of Administrative Law adopted respondents' emergency regulations. This adoption formalized the previously adopted rules and long-gun safe-handling demonstration regulations challenged in appellants' complaint.
In response to the demurrer and the adoption of formal regulations, appellants conceded that the regulatory action had favorably mooted their claims. However, appellants requested the trial court to delay entering judgment so the parties could conduct limited discovery to establish whether the DOJ acted in response to appellants' lawsuit, entitling appellants to attorney fees under section 1021.5. The trial court denied appellants' request.
Thereafter, appellants filed a motion for attorney fees under section 1021.5 on the ground that their lawsuit substantially motivated respondents to adopt Administrative Procedures Act compliant regulations. Appellants also filed a formal request to present oral testimony regarding their entitlement to fees under the catalyst theory.
The trial court denied appellants' request to present oral testimony for three reasons. The court concluded appellants had not complied with two procedural requirements and had not shown good cause for the presentation of oral testimony.
Regarding appellants' motion for attorney fees, the trial court ruled they had not met their burden to show the catalyst theory applied in this case. The court found appellants had not made sufficient attempts at pre-litigation settlement. The court further concluded that, although appellants' lawsuit may have accelerated, it did not cause respondents to adopt formal regulations.
DISCUSSION
I. The trial court did not abuse its discretion in denying appellants' section 1021 .5 motion.
A. Section 1021.5.
Section 1021.5 codifies the "'private attorney general'" doctrine of attorney fees developed in judicial decisions. (Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 565 (Graham).) It provides an exception to the "'American rule'" that each party pays its own attorney fees. (Ebbetts Pass Forest Watch v. California Dept. of Forestry & Fire Protection (2010) 187 Cal.App.4th 376, 381 (Ebbetts).)
The private attorney general doctrine's fundamental objective is to encourage suits enforcing important public policies by providing substantial attorney fees to the successful litigants. (Ebbetts, supra, 187 Cal.App.4th at p. 381.) Under this section, "the court may award attorney fees to (1) a successful party in any action (2) that has resulted in the enforcement of an important right affecting the public interest (3) if a significant benefit has been conferred on the general public or a large class of persons, and (4) the necessity and financial burden of private enforcement are such as to make the award appropriate." (Ibid.) The burden is on the plaintiff to establish each one of these prerequisites. (Ibid.)
Even when the plaintiff's legal action does not result in a favorable final judgment, the trial court may award fees under section 1021.5, if there is a causal connection between the plaintiff's lawsuit and the relief obtained. (Carian v. Department of Fish & Wildlife (2015) 235 Cal.App.4th 806, 814 (Carian).) This "catalyst theory" permits fees without a judicial resolution of the litigation if the defendant changes its behavior substantially because of, and in the manner sought by, the litigation. (Graham, supra, 34 Cal.4th at p. 560.) Thus, the trial court can award attorney fees to the plaintiff without there being a judicially recognized change in the legal relationship between the parties. (Tipton-Whittingham v. City of Los Angeles (2004) 34 Cal.4th 604, 608 (Tipton-Whittingham).) The court looks to the impact of the action, not its manner of resolution. (Graham, supra, 34 Cal.4th at p. 568.)
To obtain attorney fees under the catalyst theory, the plaintiffs "must establish that (1) the lawsuit was a catalyst motivating the defendant to provide the primary relief sought; (2) that the lawsuit had merit and achieved its catalytic effect by threat of victory, not by dint of nuisance and threat of expense ... ; and, (3) that the plaintiffs reasonably attempted to settle the litigation prior to filing the lawsuit." (Tipton-Whittingham, supra, 34 Cal.4th at p. 608.) However, a plaintiff may not obtain attorney fees by merely causing the acceleration of the issuance of government regulations when the process of issuing those regulations was ongoing at the time the litigation was filed. (Id. at p. 609.)
B. Standard of review.
On appeal, we review a trial court's decision whether to award attorney fees under section 1021.5 for an abuse of discretion. (Carian, supra, 235 Cal.App.4th at p. 815.) Accordingly, "'[w]e review the entire record, attentive to the trial court's stated reasons in denying the fees and to whether it applied the proper standards of law in reaching its decision. [Citation.] We will reverse the trial court's decision only if there has been a prejudicial abuse of discretion, i.e., when there has been a manifest miscarriage of justice or "'where no reasonable basis for the action is shown.'"'" (Wal-Mart Real Estate Business Trust v. City Council of City of San Marcos (2005) 132 Cal.App.4th 614, 620.) The trial court abuses its discretion whenever, in its exercise, the court exceeds the bounds of reason, all of the circumstances before it being considered. (Denham v. Superior Court (1970) 2 Cal.3d 557, 566.) The burden is on the complaining party to establish such an abuse of discretion. (Ibid.)
As noted above, the trial court found that appellants did not meet two of the three requirements for recovery of attorney fees under the catalyst theory. The trial court concluded that appellants did not make a reasonable attempt to settle the litigation before filing their complaint. The trial court further held that appellants' lawsuit was not a catalyst motivating respondents' action but, rather, merely accelerated the issuance of the regulations.
These findings are entitled to deference on review if there is any reasonable basis in the record to support them. "We are required to draw all reasonable inferences in support of the findings and view the record most favorably to the court's conclusion. If there is evidence to support the court's finding, we must affirm even if other evidence supports a contrary finding or a different factfinder could have reasonably reached a different conclusion." (Cates v. Chiang (2013) 213 Cal.App.4th 791, 808 (Cates).)
C. The record supports the court's finding that appellants did not make a reasonable attempt to settle before litigation.
As outlined above, a plaintiff seeking fees under a catalyst theory must first reasonably attempt to settle the matter short of litigation. While lengthy prelitigation negotiations are not required, a plaintiff must at least notify the defendant of its grievances and proposed remedies and give the defendant the opportunity to meet its demands within a reasonable time. (Graham, supra, 34 Cal.4th at p. 577.)
The trial court noted that appellants were aware that Stephen Lindley, the Firearms Bureau Chief at the DOJ, was the proper person to contact to attempt to settle their grievances. However, appellants failed to direct any settlement efforts to Lindley. The trial court observed that on October 14, 2014, appellants sent a letter to the Public Records Coordinator of the Attorney General's Office seeking "'each and every writing or government record drafted, created after January 1, 2011, as a California Code of Regulations provision regarding the FSC program's implementation, requirements, and enforcement.'" The other written communication occurred on December 29, 2014, eight days before filing their lawsuit, when appellants sent a letter to the Office of Administrative Law. In this letter, appellants complained that the informal regulations published by Lindley in October 2014 did not comply with the Administrative Procedures Act and therefore constituted an "'underground regulation.'"
The trial court found that appellants did not make a reasonable attempt to settle the dispute regarding the "underground regulations" because they did not contact Lindley, the person responsible for implementing the rules. The record supports this finding. Appellants' giving notice to the Office of Administrative Law did not constitute giving notice to the DOJ. (Carian, supra, 235 Cal.App.4th at p. 817.) A reasonable settlement attempt requires directing efforts towards the proper person or department. (Id. at pp. 817-818.)
Appellants argue their attempts to resolve the dispute short of litigation were more than reasonable. Appellants note that their counsel was in contact with a deputy attorney general in November 2014 regarding the October 2014 public records request. According to appellants' counsel, the deputy attorney general admitted that the DOJ "was not in the process of drafting, considering, or adopting permanent or emergency regulations in compliance with the Administrative Procedure Act." Appellants also point out that they sent copies of their letter to the Office of Administrative Law to Lindley and Harris. Appellants further assert that they again expressed their concerns to the DOJ on December 30, 2014, when they gave notice to the DOJ that they would be seeking a temporary restraining order and filing a complaint against the enforcement of the long-gun safe-handling requirements and the FSC program on January 5, 2015. According to appellants, the DOJ's responses, or lack thereof, to their oft-stated concerns regarding the implementation of SB 683 clearly establish that appellants made reasonable efforts to settle the matter before filing their lawsuit.
Nevertheless, there is support in the record for the trial court's contrary finding. There is no evidence that appellants directly contacted Lindley to express their grievances and proposed remedies. The trial court could rationally conclude that either discussing the records request with a deputy attorney general or giving notice to the DOJ of the hearing on their request for a temporary restraining order did not qualify as a reasonable settlement attempt. Accordingly, we must defer to the trial court's finding.
D. The record supports the court's finding that appellants' lawsuit was not a catalyst.
The trial court found that, while appellants' lawsuit may have accelerated issuance of the regulations, it did not motivate respondents to voluntarily provide that relief. Rather, respondents' efforts to adopt the regulations commenced before appellants filed the suit. Therefore, relying on Tipton-Whittingham, supra, 34 Cal4th 604, the court ruled appellants' lawsuit was not a catalyst. Again, the record supports this finding.
As noted by the trial court, respondents began efforts to adopt regulations in May 2014. The DOJ hosted a meeting for firearm dealers and representatives of firearm rights organizations regarding implementation of SB 683. Lindley conducted this meeting and requested feedback from those attending.
The DOJ held a second meeting in November or December 2014 conducted by Blake Graham, special agent supervisor for the DOJ Bureau of Firearms. At this meeting, Graham admitted that the DOJ would not adopt regulations before January 1, 2015. The trial court observed that the issue appeared to involve the absence of a key employee of the Justice Department. The court also noted that the DOJ was not given discretion regarding the implementation date and that they "'dropped the ball.'" However, the court concluded, this did not mean that respondents refused to adopt regulations necessitating the lawsuit.
The trial court also relied on the DOJ's explanation for its failure to adopt nonemergency regulations submitted to the Office of Administrative Law in support of its request for emergency regulations. The court noted that the DOJ originally intended to develop a manual pre-paid process for the issuance of Firearm Safety Certificates but that it was determined to be inefficient and, more importantly, would create a financial burden for certified instructors. In response to input received from the stakeholders within the firearms industry, the DOJ developed an automated, web-based application. However, this necessitated an eight to 10 month delay in drafting the accompanying regulations. Thus, the court concluded, the delay was the result of an attempt to make things easier for those who issue Firearm Safety Certificates.
Since the DOJ was actively working on developing regulations when appellants filed the lawsuit, the court found appellants did not meet their burden of demonstrating their suit was a catalyst. This provides a reasonable basis for the trial court's order.
Appellants argue the chronology of events creates an inference that appellants' lawsuit served as a substantial motivating factor guiding the DOJ's decision to adopt Administrative Procedures Act compliant regulations. Appellants also rely on a statement allegedly made by Graham that Administrative Procedures Act compliant regulations were unnecessary because the DOJ could issue bulletins and, if it had to, complete emergency regulations after January 2015.
Thus, appellants assert we should draw inferences from the record contrary to those drawn by trial court. However, that is not the correct standard of review. We must defer to the trial court when, as here, there is a reasonable basis to support its findings and affirm the ruling even if it would also have been reasonable to reach a different conclusion. (Cates, supra, 213 Cal.App.4th at p. 808.)
In sum, the trial court had a reasonable basis for finding that appellants did not make a reasonable attempt to settle the dispute before filing their action and that the action was not a catalyst. Accordingly, the trial court did not abuse its discretion when it denied appellants' section 1021.5 motion for attorney fees. In light of this conclusion, we need not address appellants' argument that they satisfied the other requirements for a section 1021.5 attorney fees award.
Additionally, because we are affirming the trial court's ruling that appellants are not entitled to attorney fees, appellants' claim that the trial court abused its discretion when it denied their request to present oral testimony at the section 1021.5 hearing is moot.
DISPOSITION
The order is affirmed. No costs are awarded.
/s/_________
SMITH, J. WE CONCUR: /s/_________
DETJEN, Acting P.J. /s/_________
PEÑA, J.