Desert Hot Springs Wins in Court to Protect Taxpayer Money from Legal Fees

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City proves their affirmative efforts to comply with the law means a private enforcement law suit was unnecessary.

A Judge has ruled that the City of Desert Hot Springs will not be liable for any attorneys’ fees to a public law group that brought a taxpayer action against the City. Petitioners had sued the City on behalf of the taxpayers, alleging that the City’s Housing Element was non-conforming.

On December 3, 2018, two purported consumer law groups, Public Interest Law Group and Inland County Legal Services (“Petitioners”) filed a lawsuit against the City. After achieving a settlement with the City, Petitioners sued for reimbursement of attorneys’ fees totaling well over $320,000, claiming that they were the prevailing party in the matter and that their lawsuit was necessary to get the City to adopt its Housing Element. The Judge was not convinced. (Case #PSC1807458, Riverside County Superior Courts)

Ted Stream, partner at Stream Kim Hicks Wrage & Alfaro PC and Litigation Counsel for the City, explained that “the Petitioners knew that the City was attempting to adopt its Housing Element, yet they simply piled on and then tried to argue that they started the entire process. The judge saw through that scheme, and we believe the Judge came to the right result.”

The record of the case showed that for a least one year prior to the filing of the lawsuit, the City was taking appropriate, necessary and affirmative steps to bring itself into conformity with State housing law. The City argued that the Petitioners’ private enforcement of their claim was not necessary because the City had already been working on and taking all appropriate steps towards adopting its Housing Element, and was well over a year into the process before Petitioners filed their suit. The City argued that Petitioners’ counsel were opportunists – they found a city that was out of compliance, filed a lawsuit to “force” the City to do what it was already doing, and then tried to claim victory for the City’s actions. Petitioners’ counsel jumped on a moving train, one that was already moving in the right direction.

The Judge found that based on these facts, the Petitioners were not entitled to any attorneys’ fees whatsoever. Private enforcement in this case was not necessary, the judge said, considering that the City was already working to resolve the issue well-before the Petitioners filed suit.

Jennifer Mizrahi, also at Stream Kim and City Attorney of Desert Hot Springs, stated that “this is an important case for the City, and hopefully for cities in general. This shows that when a city is taking all of the appropriate and corrective steps to remedy a situation and come into compliance, you sue them at your own risk.” This ruling will hopefully hinder opportunistic lawsuits that attempt to catch cities off-guard when they are acting in good faith to bring themselves into compliance prior to a lawsuit being filed.

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Nathan Greenberg
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