Liberty Utilities might challenge Apple Valley on fees (March 8, 2018)

SAN BERNARDINO — An attorney for Liberty Utilities on Tuesday took issue with the proposed judgement in the water company’s California Environmental Quality Act (CEQA) lawsuit, arguing that Apple Valley should not recover its legal fees despite prevailing in the case.

Specifically, Dean Dennis — with the Los Angeles-based Hill, Farrer & Burrill (HF&B) — focused on the last line of the proposed judgment, which he said reads, “The town, as prevailing party, shall recover its costs of suit as permitted by law.”

“Normally, I’d be fine with that type of language, but in this case we do have this unusual situation,” Dennis said. “The issue that the town prevailed upon was, in effect, that the town’s project was exempt from CEQA and did not need CEQA review, and that, consequently, the last couple years of this litigation was unnecessary or, you know, a big waste of time.”

The project in question is the town’s acquisition attempt of Liberty’s water system. The company filed suit against the town in December 2015, one month after the Town Council voted unanimously to take the system by eminent domain, according to previous Daily Press reports.

In court documents, Liberty alleged an “incomplete and misleading” environmental impact report (EIR) prepared for the project that resulted in CEQA violations. The company sought to have the town commanded to vacate certification of the EIR, as well as a restraining order that would have prohibited further action until the town complied with CEQA.

In February, San Bernardino County Superior Court Judge Donald Alvarez ruled against Liberty, citing “substantial evidence” to support the town’s argument that its acquisition is exempt from CEQA, thus resulting in the proposed judgement introduced in court by Charity Schiller of Best Best and Krieger (BB&K), the town’s legal team.

But Dennis suggested the language pertaining to the town recovering its costs from Liberty either be removed or rewritten so he may offer a rebuttal, seemingly on the basis that the town changed its defense from acquisition not being subject to CEQA to the acquisition qualifying for a CEQA exemption, which Alvarez said applied.

“They did not raise that issue … until their opposition brief,” Dennis said. “So I’m not sure that, under that scenario, the prevailing party should automatically be entitled to its costs. There may be an estoppel or some other theory that may apply if you don’t raise the issue that you prevailed upon until the end of the case.”

Prevailing parties typically recover attorney fees in civil suits. Schiller did not counter Dennis’ argument during the hearing, but she indicated that the town believes the the proposed judgement is ready for submittal to the court for its consideration.

With that said, she also noted that BB&K is awaiting review and response from HF&B.

Dennis, meanwhile, said he wanted to be clear that his signature on the document did not indicate that he agrees the town is entitled to cost recover.

“I would not assume you’re waiving any rights you have to challenge any item of the cost that you think is inappropriate,” Alvarez said, “and (to) make a legal argument that you’re free to make. That’s fine. I’m good with that.”

The expectation, then, is Liberty will challenge the cost-recovery language at a future hearing.

How much the town spent defending the suit is currently unknown. The Daily Press has filed a Public Records Act request for documents pertaining to that amount.

The town and Liberty are due back in court May 7 for a status hearing on the proposed CEQA judgement.

Source: Matthew Cabe, Daily Press