Citations
- 693 F. Supp. 2d 1091
Full opinion text
ORDER RE: SPECIAL MASTERS REPORT AND RECOMMENDATIONS RE: ATTORNEYS FEES
SAMUEL CONTI, District Judge.
The Special Master in the above matter has rendered his Report and Recommendations dated January 28, 2010 and filed February 2, 2010.
The Court after having read, reviewed, and considered said report and recommendations, hereby approves and accepts the recommendations in the following particulars:
CBS Corporation is granted attorney’s fees in the amount of $331,757.00 and costs in the amount of $8,324.00.
Miller Starr Regalia is granted attorney’s fees in the amount of $167,571.14 and costs in the amount of $1,412.68.
Powell Goldstein is granted attorney’s fees in the amount of $21,433.50 and costs in the amount of $19,863.25.
IT IS SO ORDERED.
REPORT AND RECOMMENDATION BY SPECIAL MASTER RE: ATTORNEYS FEES
EUGENE F. LYNCH (Ret.), Special Master.
INTRODUCTION
On December 11, 2007, the Federal District Court (Northern District of California) entered judgment in favor of Defendants CBS Corporation (CBS) and Patrick Roche (Roche) (“Defendants”) and against Plaintiffs Raymond Reudy and Kevin Hicks dba Advertising Display Systems and ADS-1 (“Plaintiffs.”) Defendant Roche thereafter moved for an order for attorneys’ fees and costs pursuant to Federal Rules of Civil Procedure, rule 54(d), Northern District Local Rules, Rule 54-6, California Code of Civil Procedure Section 1021, and California Civil Code Section 1717.
Roche originally filed his motion for attorneys’ fees on December 21, 2007, to comply with the timing requirements of the Federal Rules of Civil Procedure (Rule 54(d)(2)(B)) (claim for attorneys’ fees must be filed no later than 14 days after entry of judgment.) CBS joined in the motion on December 26, 2007. However, on January 3, 2008, Plaintiffs filed a Notice of Appeal. On July 8, 2009, the Ninth Circuit affirmed the District Court’s judgment, and the matter was transferred back to the District Court to address the issue of attorneys’ fees. The parties thereafter filed supplemental briefing on the attorneys’ fees issue.
At present, CBS seeks $331,757.00 in attorneys’ fees and $8,324.00 in costs. Roche requested separate counsel, and retained Miller Starr Regalia to generally handle the case, and Powell Goldstein to specifically address the antitrust issues. Miller Starr Regalia seeks $263,968.20 in attorneys’ fees and $1,412.68 in costs and Powell Goldstein seeks $125,361.74 in attorneys’ fees and $19,863.25 in costs.
Defendants’ motion is based on Paragraph 14.4 of the Parties’ 2003 Purchase and Sale Agreement (“Agreement”) and their alleged status as prevailing party pursuant to the District Court’s judgment. Paragraph 14 states: “The parties hereto agree that they shall pay directly any and all legal costs, which they have incurred on their own behalf in the preparation of this Agreement and other agreements pertaining to this transaction, and that such legal costs shall not be part of the closing costs. If either party is found in default of this Agreement and a final, non-appealable judgment is issued against said party for its default, then said party in default agrees to pay any and all costs arising as a result of said default, including reasonable attorneys’ fees.”
The other paragraph applicable to the parties’ dispute is Paragraph 15 of the Agreement, which included a “Release” and “Covenant not to Sue.” The provision specifically provided that Plaintiffs would not “commence any litigation, arbitration or other proceeding” against CBS “that is similar in any way to the action instituted by [Plaintiffs] ... against Clear Channel.”
A hearing was held on these issues at the JAMS offices in San Francisco, California on November 5, 2009, before the Honorable Eugene F. Lynch (Ret.), appointed as Special Master in this matter.
Plaintiffs raised essentially three objections as to why fees should not be granted:
(1) Plaintiffs sued Defendants in “tort” and therefore if Defendants believe they are entitled to attorneys’ fees under the Agreement, they must bring a separate action in “contract.” This first objection raises issues regarding the scope of the fee provision-i.e. the fee provision in the parties’ Agreement provides for fees and costs when judgment is entered against a party based on a “default” and here judgment was entered based on Plaintiffs failure to state a cause of action, not default.
(2) Roche is not entitled to fees because he was not a party or signatory to the Agreement which contains the attorneys’ fee provision; and
(3) Even assuming Defendants are entitled to attorneys’ fees pursuant to the parties’ Agreement, Plaintiffs’ complaint included causes of action for public nuisance and antitrust, and because the statutes relating to these claims do not provide for an award of attorneys’ fees to a prevailing defendant, these statutes “trump” any private contract, and thus Defendants may not recover fees allocated to the defense of these causes of action.
Finally, assuming Defendants are entitled to fees and costs, Plaintiffs argue the amounts requested are “outrageous and entirely unreasonable.”
FACTS
On December 15, 2003, Plaintiffs and CBS entered into a Purchase and Sale Agreement (“Agreement”) whereby CBS purchased seven billboards from Plaintiffs for $2 million dollars. Paragraph 14.4 addressed “Legal Costs” and provided that “[i]f either party is found in default of this Agreement and a final, non-appealable judgment is issued against said party for its default, then said party in default agrees to pay any and all costs arising as a result of said default, including reasonable attorneys’ fees.” (Emphasis added.)
Also, as part of the Agreement, the parties entered into a “Release” and “Covenant not to Sue.” Paragraph 15 stated that in further consideration of the execution of the Agreement, Plaintiffs released CBS and its’ employees “from any and all causes of action” relating to the maintenance and operation of its’ outdoor advertising business in the San Francisco/Oakland Bay Area. The provision also specifically provided that Plaintiffs would not “commence any litigation, arbitration or other proceeding” against CBS “that is similar in any way to the action instituted by [Plaintiffs] ... against Clear Channel.” Plaintiffs had previously sued Clear Channel pertaining to the operation and maintenance of Clear Channel’s advertising signs in the San Francisco area.
However, Plaintiffs did subsequently sue Defendants (as it had Clear Channel) alleging causes of action for intentional interference with prospective economic advantage, antitrust violations, public and private nuisance, and unjust enrichment. Each of Plaintiffs’ claims related to CBS’s operation and/or maintenance of its’ outdoor advertising displays located in and around San Francisco. Defendants moved to dismiss based upon the release language in the parties’ Agreement. The Court upheld the validity of the parties’ Agreement, Plaintiffs’ action was dismissed, and the dismissal was confirmed on appeal.
DISCUSSION
I.
Defendants are entitled to Attorneys Fees & Costs pursuant to the Parties’ Purchase & Sale Agreement.
Plaintiffs argue judgment was not entered for a “default” pursuant to the Agreement, and therefore Defendants are not entitled to attorneys’ fees pursuant to Civil Code Section 1717. Specifically, Plaintiffs argue that they brought an action against Defendants in tort, not breach of contract, and in order to collect fees and costs a legal action must be brought to enforce the Agreement.
In other words, Plaintiffs’ argument goes to the scope of the Agreement and the fact that Section 1717 provides for fees only in actions on a contract. Section 1717 authorizes an award of fees “in any action on a contract, where the contract specifically provides that attorneys’ fees and costs, which are incurred to enforce that contract, shall be awárded either to one of the parties or to the prevailing party.” At the hearing, Plaintiffs argued that what Defendants achieved in this matter was “equitable” relief — i.e. specific performance of the Release and/or declaratory relief regarding the meaning of the Release. Citing Stockton Theatres v. Palermo (1954) 124 Cal.App.2d 353, 268 P.2d 799, Plaintiffs argue that Defendants’ reliance on the fee provision is limited by what the provision provides, and here it is limited to fees in legal actions in which a default is found.
Defendants argue that Plaintiffs’ assertion, that they are required to file a separate action based on breach of the Agreement to recover their fees, has no legal support. Defendants argue the language of the fee provision controls a fee award, and this provision is subject to the ordinary rules of contractual interpretation. Specifically, they argue that Plaintiffs “defaulted” on the Agreement by violating the Release and Covenant not to sue, and in support cite to the definition of “default” in Black’s Law Dictionary. Black’s Law Dictionary defines default as “the omission or failure to perform a legal or contractual duty ... [or] to observe a promise.” Defendants claim that here Plaintiffs “defaulted” when they failed to observe a promise not to sue Defendants as they had Clear Channel.
Defendants also argue that California courts permit the application of section 1717 when a party uses the agreement containing the fees provision as a defense to the underlying action, whether the action is based in contract or tort. Citing Thompson v. Miller (2003) 112 Cal.App.4th 327, 4 Cal.Rptr.3d 905, Defendants argue that when, as here, a plaintiff does not sue to enforce the agreement which contains the attorneys’ fee provision at issue, the fees are still recoverable if the party seeking fees has prevailed within the meaning of the provision upon a type of claim contemplated within the scope of the provision. Finally, Defendants argue that in addition to section 1717, they are entitled to their attorneys’ fees pursuant to Code of Civil Procedure sections 1021 and 1033.5.
The Special Master acknowledges that procedurally the action was not for breach of contract. Plaintiffs sued Defendants for intentional interference, nuisance, unjust enrichment and violations of the Sherman Act. Nor, technically, was there a finding of “default.” The Court dismissed the action because Plaintiffs failed to state a cause of action. However, viewing what happened in this narrow fashion ignores, as Defendants argue, the substantive basis for the Court’s decision, and the Special Master agrees with Defendants that the Agreement must be looked at in a broader fashion than argued by Plaintiffs. In other words, in granting the motion to dismiss, it was necessary to invoke the Agreement and find it disallowed the very actions Plaintiffs were attempting to bring, and in this sense was an action “on the contract” within the meaning of Section 1717.
When interpreting attorneys’ fees clauses, ordinary rules of contract interpretation apply (Santisas v. Goodin (1998) 17 Cal.4th 599, 608, 71 Cal.Rptr.2d 830, 951 P.2d 399.) These principles do not require the kind of narrow reading of the fee provision that Plaintiffs assert. Thus, “[a] contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful” (Civil Code section 1636.) The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other (Section 1641.) The words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed (Section 1644.) A contract may be explained by reference to the circumstances under which it was made, and the matter to which it relates (Section 1647.)
Applying the above cited principles of contractual interpretation, leads to the conclusion that the Plaintiffs “defaulted” in their obligations to Defendants by suing them for the types of claims they expressly released and covenanted not to assert against them, as provided in paragraph 15. The Agreement even makes specific reference to Plaintiffs’ case against Clear Channel, evidencing the parties’ intent that Plaintiffs were agreeing not to sue Defendants in a similar way. However, that is exactly what they did. As stated above, a contract can be explained in reference to the circumstances under which it was made, and here the specific reference to the Clear Channel case shows Defendants were attempting to avoid a lawsuit over their billboards. This further suggests the parties intended that such action would constitute a “default” under the Agreement and as a consequence trigger the attorneys’ fees provision.
Therefore, while it is true that procedurally judgment was not entered on a “default”, but because Plaintiffs “failed to state a cause of action,” the substantive basis for this conclusion was that Plaintiffs could not state a cause of action because in the parties’ Agreement they had promised not to sue Defendants for conduct related to CBS’s sign business, that promise was enforceable pursuant to their Agreement, and therefore the Agreement barred Plaintiffs’ claims. The Thompson case, cited by Defendants confirms this principle — i.e. the use of a contract as a defense to a tort action allows the prevailing party to invoke the fee provision in the contract (Thompson v. Miller, supra, 112 Cal.App.4th at p. 336, 4 Cal.Rptr.3d 905; see also In re Baroff (9th Cir.1997) 105 F.3d 439, 442-443.)
The Special Master also agrees that contrary to Plaintiffs’ argument, application of Section 1717 permits the requested relief. The primary purpose of section 1717 is to ensure mutuality of remedy for attorneys’ fees under contractual attorneys’ fees provisions. It was not intended that it limit the broad right of parties pursuant to section 1021 to make attorneys’ fees agreements (Santisas v. Goodin (1998) 17 Cal.4th 599, 610, 71 Cal.Rptr.2d 830, 951 P.2d 399.)
Rather section 1717 applies in situations in which a non-signatory to a contract requests the benefits of an attorneys’ fees provision, which requires the court to examine the reciprocity of the provision. However, here CBS was a party to the contract and Roche was included in the list of releasees — i.e. they already were parties to the Agreement.
Finally, the Stockton Theatres case cited by Plaintiffs is distinguishable on its facts. There the parties entered into a lease agreement which provided for attorneys’ fees if either party “defaulted” — i.e. failed to perform any term, covenant or condition under the lease. The defendant filed a claim for declaratory relief seeking to have the lease declared void, and although the court agreed, held he was not entitled to fees because the defendant did not allege a breach or default of the lease, but that it was invalid. In so holding the court applied standard rules of contractual interpretation to conclude that the declaratory relief action was not the type of action the parties intended to be covered by the term “default.” Here, in contrast, as explained above, applying standard rules of contractual interpretation leads to a different result. As part of their Agreement Plaintiffs and Defendants entered into a Release which expressly stated that Plaintiffs were not to sue Defendants in the same way they had sued Clear Channel. Thus the Agreement reflects the parties’ intent to avoid the type of litigation which did eventually ensue. In this sense Plaintiffs were in violation of the Agreement and the judgment against them constitutes a “default” under the Agreement.
Therefore, the Special Master concludes that Plaintiffs’ action against Defendants constituted a “default” pursuant to the parties’ Agreement, and therefore this argument is not a valid basis for defeating Defendants’ claims for Attorneys’ fees.
II
Roche is entitled to Attorneys Fees & Costs pursuant to the Agreement.
Plaintiffs argue that Roche was not a party or signatory to the Agreement, but an employee of CBS, and therefore even if CBS is entitled to fees and costs, Roche cannot recover. Plaintiffs claim that Roche cannot recover either under case law or any application of section 1717, citing Topanga and Victory Partners v. Toghia (2002) 103 Cal.App.4th 775, 127 Cal.Rptr.2d 104 and Super 7 Motel v. Wang (1993) 16 Cal.App.4th 541, 20 Cal. Rptr.2d 193.
Plaintiffs argue that section 1717 is inapplicable because it provides a reciprocal remedy for a nonsignatory defendant. In situations in which a plaintiff would be entitled to attorneys fees should the plaintiff prevail, and the plaintiff sues a nonsignatory defendant on a contract as if he or she were a party to the contract, the non-signatory defendant is allowed to seek its’ fees. Plaintiffs argue that if they had been successful against Defendant Roche, they would not have been entitled to a contractual award of attorneys’ fees and thus Roche may not recover attorneys’ fees under the Agreement.
Roche argues that the language of the Release Agreement clearly shows that the parties intended he be covered. The language in Paragraph 15 specifically releases not just CBS, but its’ “employees.” Roche further argues that if there is a sufficient “nexus” between the parties, a party such as Roche is entitled to “stand in the shoes” of CBS and be entitled to the same coverage.
Plaintiffs’ citation to Section 1717 and the argument that it is necessary that recovery of fees be “reciprocal” misses the issue. First, the Special Master questions whether Plaintiffs are correct in their assertion that they would not be entitled to fees pursuant to Section 1717. Second, Roche is entitled to fees under the wording of the Agreement. The Special Master agrees that applying ordinary rules of contractual intention the wording of the Release Agreement establishes that the parties intended that employees such as Roche could not be sued, even if not expressly named. The Release applies to all employees of CBS, and Plaintiffs cite no authority requiring each of the employees is required to sign in order to be covered under the Agreement’s terms.
Furthermore, the cases cited by Plaintiffs are distinguishable on their facts. In Topanga the defendant was not allowed to recover fees pursuant to the contract because he had been voluntarily dismissed from the contract cause of action. Super 7 Motel Associates involved a sale of real property in which the broker attempted to invoke the attorneys’ fees provision in the contract between the buyer and seller. However, the broker was not a party to the contract in the sense that Roche is a party to the Release. Here “employees” of CBS were clearly included and specifically named. Furthermore, the cases cited by Defendants did provide for recovery of fees in situations in which the contract at issue reflected the intent that a party be covered and a sufficient nexus existed between the parties (Loduca v. Polyzos (2007) 153 Cal.App.4th 334, 343, 62 Cal.Rptr.3d 780, and Real Property Services Corp. v. City of Pasadena (1994) 25 Cal. App.4th 375, 30 Cal.Rptr.2d 536.)
The Special Master concludes that as indicated in the cases cited by Defendants there is a sufficient “nexus” between the parties which entitles Roche to essentially stand in the shoes of CBS and be entitled to the same coverage, and therefore this argument is not a valid basis for defeating Defendants’ claims for Attorneys’ fees.
III
Recovery of Attorneys’ Fees in Certain Statutory Actions
Plaintiffs argue that certain statutes (e.g. the Cartwright Act) allow an attorneys’ fees award only to a specified party, such as a prevailing plaintiff, and when a defendant prevails in an action containing causes of action for both breach of contract and violation of such a statute, the parties’ contractual attorneys’ fee clause and Civil Code section 1717 cannot be used to award the defendant its’ attorneys’ fees attributable to the statutory action, because doing so effectively allows the parties’ private contract to override the statute. Plaintiffs cite Code of Civil Procedure section 1021, which provides that compensation of attorneys is left to the agreement of the parties except as specifically provided by statute. Plaintiffs therefore conclude that any fees attributable to the statutory action cannot be included in the fees awarded to a prevailing defendant. In support Plaintiffs cite Carver v. Chevron U.SA. (2002) 97 Cal.App.4th 132, 118 Cal.Rptr.2d 569, Carver v. Chevron U.S.A. (2004) 119 Cal. App.4th 498, 14 Cal.Rptr.3d 467 and Wood v. Santa Monica Escrow Co. (2007) 151 Cal.App.4th 1186, 60 Cal.Rptr.3d 597.
Here Plaintiffs sued Defendants for public nuisance and violations of the Sherman Act. Plaintiffs argue that plaintiffs who are successful on these types of claims are entitled to attorney fees, but that defendants that prevail in such actions are not so entitled because the statutes providing fees for these types of actions are not reciprocal.
Specifically, regarding the public nuisance claim, Plaintiffs argue fees are allowed a prevailing plaintiff pursuant to Code of Civil Procedure section 1021.5 (assuming certain other criteria are met). Plaintiffs further argue that because recovery of attorneys’ fees is not reciprocal under section 1021.5, Defendants cannot use the contractual fees clause from the Agreement to recover fees attributable to the public nuisance cause of action because doing so would effectively allow the Agreement to override section 1021.5. Similarly, Plaintiffs argue the Sherman Act authorizes recovery of attorneys’ fees only for successful plaintiffs, citing 15 USCS section 15.
The Special Master acknowledges that certain statutes, such as the Cartwright Act cited by Plaintiffs, places limits on a prevailing defendant’s ability to recover attorneys’ fees, even if there is a fee provision in the parties’ contract. In other words, if you sue under circumstances in which there is a statute that provides for fees only to a prevailing plaintiff, and the defendant prevails, even if you have a contract with the other party which also provides for fees, the statute “trumps” the contract and the defendant is not entitled to attorneys’ fees.
However, while this rule is true of certain statutes, it is not true under these facts and the statutes at issue. First, regarding Plaintiffs’ public nuisance argument, it is not true, as Plaintiffs argue, that all such eases are necessarily fee-shifting plaintiffs-only prevailing types of case. As Defendants argued at the hearing, Defendants rely on section 1021.5 (private attorney general doctrine) for their argument. For a plaintiff to recover fees for a public nuisance cause of action the plaintiff must establish the action confers some sort of “public benefit.” As was explained in Flannery v. California Highway Patrol (1998) 61 Cal.App.4th 629, 71 Cal.Rptr.2d 632, cited by Defendants, the purpose of section 1021.5 is to encourage private litigants to bring suits that would otherwise not be brought and which confer a public benefit. The Court explained fees are not awarded in circumstances in which a plaintiff brings suit for his or her own pecuniary interests (id. at p. 635, 71 Cal. Rptr.2d 632.) However here the Special Master, the District Court, and the 9th Circuit Court of Appeal all determined there was absolutely no public benefit aspect to Plaintiffs’ public nuisance cause of action. Thus this would not be the type of case in which only a prevailing plaintiff would be entitled to fees.
As for Plaintiffs’ antitrust cause of action, Plaintiffs failed to cite any case, either in their briefing or at the hearing, in support of their argument that the Sherman Act trumps a private contract when it comes to a fee award. The only cases cited pertained to actions pursuant to the Cartwright Act. Therefore, the Special Master concludes that there is no basis on which to require allocation of fees for the statutory causes of action.
Award of Attorney’s Fees
Having determined that Plaintiffs’ objections to an award of attorney’s fees to Defendants as prevailing parties are invalid, the Master now turns to the issue of the appropriate amount, i.e., are the fees being requested both reasonable and necessary.
Legal Standard
As set forth in Ninth Circuit case law, in determining reasonable attorney’s fees the district court should first calculate a lodestar (the number of hours reasonably expended in the litigation multiplied by a reasonable hourly rate) adjusted by the “Kerr factors”; McGrath v. Co. of Nevada, 67 F.3d 248, 252 (9th Cir.1995):
“In determining a reasonable attorney’s fee, the district court’s first step is to calculate a ‘lodestar’ by multiplying the number of hours it finds the prevailing party reasonably expended on the litigation by a reasonable hourly rate.” Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983). The district court should exclude hours that were not “ ‘reasonably expended.’ ” Id. at 434, 103 S.Ct. at 1939 (quoting S. Rep. No. 94-1011, pg. 6 (1976) U.S.Code Cong. & AdmimNews 1976 at pp. 5908, 5913). In determining what constitutes a reasonable fee, the district court should take into account the factors set forth in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 69-70 (9th Cir.1975), cert, denied, 425 U.S. 951, 96 S.Ct. 1726, 48 L.Ed.2d 195 (1976, that it finds to be relevant). D’Emanuele v. Montgomery Ward & Co., 904 F.2d 1379,1383,1386 (9th Cir.1990).
FN4. In Kerr, we held the following factors are appropriate for consideration in determining a reasonable attorney’s fee award:
(1) the time and labor required, (2) the novelty and difficulty of the questions involved, (3) the skill requisite to perform the legal service properly, (4) the preclusion of other employment by the attorney due to acceptance of the case, (5) the customary fee, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and the results obtained, (9) the experience, reputation, and ability of the attorneys, (10) the ‘undesirability’ of the case, (11) the nature and length of the professional relationship with the client, and (12) awards in similar cases.
The second step in the fee calculation is to assess whether the presumptively reasonable lodestar figure should be adjusted on the basis of Kerr factors not already subsumed in the initial calculation. Id. at 1383. The application of this step is not at issue here.
Although § 1988(b) endows the district court with discretion to determine what constitutes a reasonable attorney’s fee, the Supreme Court has directed that ‘it remains important ... for the district court to provide a concise but clear explanation of its reasons for the fee award.’ Hensley, 461 U.S. at 437, 103 S.Ct. at 1941. If the district court fails to provide a clear indication of how it exercised its discretion, we will remand the fee award for the court to provide an explanation. D’Emanuele, 904 F.2d at 1385.
In Cabrales v. Co. of Los Angeles, 864 F.2d 1454, 1464 (9th Cir.1988), the Ninth Circuit also noted:
“ ‘The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.’ Hensley, 461 U.S. at 433, 103 S.Ct. at 1939. This ‘presumptively reasonable fee,’ known as the lodestar figure, may then in ‘rare’ and ‘exceptional’ cases be ‘adjusted’ on the basis of ‘other considerations.’ Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 478 U.S. 546, 564-65, 106 S.Ct. 3088, 3098-99, 92 L.Ed.2d 439 (1986) (quoting in part Blum v. Stenson, 465 U.S. 886,104 S.Ct. 1541, 79 L.Ed.2d 891 (1984)). In Hensley, the Supreme Court noted that, while these ‘other considerations’ included factors previously used in assessing the overall reasonableness of fees, see Johnson v. Georgia Highway Express, Inc. 488 F.2d 714, 717-19 (5th Cir.1974); accord Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir.1975), cert, denied, 425 U.S. 951, 96 S.Ct. 1726, 48 L.Ed.2d 195 (1976), many of these same factors are now ‘subsumed within the initial calculation of hours reasonably expended at a reasonable hourly rate,’ 461 ll,S. at 434 n. 9,103 S.Ct. at 1940 n. 9. It is now clear that among these factors that ‘cannot serve as independent bases for adjusting fee awards are: (1) the novelty and complexity of the issues, (2) the special skill and experience of counsel, (3) the quality of representation, and (4) the results obtained.’ Jordan, 815 F.2d at 1262 n. 6 (citing Blum, 465 U.S. at 898-900, 104 S.Ct. at 1548-1549). Presumably each of these factors are [sic] taken into account in either the reasonable hours component or the reasonable rate component of the lodestar calculation.”
Also, Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 69-70 (9th Cir.1976); and PLCM Group v. Drexler, et al., 22 Cal.4th 1084, 1096, 95 Cal.Rptr.2d 198, 997 P.2d 511 (2000), wherein the California Supreme Court summarizes the factors at the trial it is to consider as the amount involved, the difficulty and nature of the litigation, the skill required and employed, and success or failure of the result.
As stated, CBS seeks to recover the attorney’s fees it paid to its counsel, namely, Davis, Wright & Tremaine (“DWT”), and for the two law firms Roche retained, Miller, Stan & Regalia (“MSR”) and Powell, Goldstein (“PG”). The Master will analyze the claims of CBS and Roche separately.
CBS Attorney’s Fees
CBS claimed attorney’s fees are $331,757.00, plus $8,259.00 in costs. As CBS notes, the litigation went on for some three years. Plaintiffs’ suit was filed in August 2006, the District Court entered judgment in favor of CBS and Roche in December 2007, and thereafter, Plaintiffs appealed to the Ninth Circuit, which affirmed the District Court’s judgment on July 8, 2009, and transferred the matter back to the District Court to address the claim by Defendants for their attorney’s fees. The District Court then assigned the matter to the Special Master for his opinion and recommendation.
The Lodestar
The total amount of hours spent by CBS’s attorneys “DWT” was 813.7. Although a total of nine attorneys were involved, the great majority of the work was done by partners Allison Davis and Duffy Carolen, ie., 712 hours. The hourly rate charged over the three-year period ranged from a low of $213 per hour in 2006 to a high of $480.25 per hour in 2008/2009. The average hourly rate was $408. In the Master’s opinion, the hourly rates of the attorneys involved was extremely reasonable.
Analysis of “Kerr Factors”
In the Master’s opinion, the important “Kerr factors” involved in both CBS’s and Roche’s claims for attorneys’ fees, in addition to the time required, are (2) the novelty and difficulty of the questions involved, (3) the legal skill required to perform the legal services in a proper manner, (8) the amount involved and the results obtained, (9) the experience, reputation and ability of the attorneys, and (12) awards in similar cases.
A brief analysis of the aforestated factors indicates that the legal questions presented were not particularly novel, although there were a substantial number of legal authorities to review and analyze in light of Plaintiffs’ challenge to the release language of the contract as void and unenforceable under. California Civil Code § 1688. Also, counsel had to generally familiarize themselves with the other litigation by Plaintiffs against Defendant Clear Channel.
The skill required of an attorney handling this matter called for someone who had substantial experience (probably at least 10 years) with civil litigation in the federal courts. Here all the lead attorneys involved possessed that experience.
The amount involved could have been substantial (and thus increasing the risk) because Plaintiffs’ claim alleged both an antitrust injury, as well as a public nuisance, unjust enrichment, and intentional interference with prospective economic advantage. The claims also covered a wide area of the law, thus adding to the complexity of defense counsel dealing with the pleadings and legal arguments.
The result obtained was excellent. The Special Master recommended the matter be dismissed without leave to amend and the District Court agreed, as did the Ninth Circuit.
As to attorney’s fees awards in similar cases, the Master has some 50+ years experience in civil litigation and finds the gross amount of fees claimed by CBS (as distinguished from Roche’s claim which will be analyzed separately) to be in the reasonable range of what it takes to defend cases of this type in the modern era. A breakdown of when certain fees were incurred supports the Master’s opinion. Approximately $177,000 of the fees was expended from the time the claim was filed through motions and hearings before both the Special Master and the District Court Judge. This, of course, involved necessary research and consultation, as well as drafting the motions, and the hours expended appear to be within the range of cases of similar complexity.
Plaintiffs appealed to the Ninth Circuit and the fees on appeal were $95,500, which, of course, included filing briefs, arguments, consultations, review of case law, etc.; by any standard, a reasonable amount. The remaining fees of approximately $67,500 were post-appeal which related primarily to the issue of attorney’s fees and included briefs and argument before the Special Master.
Overall, it is the opinion of the Special Master that the attorney’s fees paid by CBS to its counsel are in the reasonable area and should be approved for the reasons set out in some detail heretofore.
Accordingly, the Master finds the appropriate lodestar to be: 813.7 hours at an average rate of $407.71 per hour, which, as pointed out in Cóbrales, supra, should only be adjusted in “rare and exceptional cases.”
Roche Attorney’s Fees
Roche was an employee of CBS and was sued personally. In addition, he contended there were a number of personal threats made to him regarding the litigation by the Plaintiffs, and he looked at the allegations in the Plaintiffs’ complaint as personally jeopardizing his entire career. Therefore, he decided it was necessary for him to hire his own personal counsel.
First of all, Plaintiffs decided not just to sue CBS in this litigation but also its employee Roche. Therefore it seems clear Roche had the right to hire his own counsel, to which CBS apparently acquiesced as it paid the fees and costs. There has been no argument made that Roche didn’t have the right to his own counsel.
However, Roche hired not just one attorney but two; he hired “MSR” for their expertise in real property matters, and he hired PG for them expertise in antitrust matters as Plaintiffs’ complaint contained a cause of action for antitrust violations. It should be pointed out that CBS, faced with the same claims, hired one full service law firm which had expertise in all of the claims, which frankly seems the more reasonable thing to do.
In the Master’s opinion, there are two issues regarding Roche’s claim for attorney fees:
1) Is there a duplication of efforts between MSR and DWT?
2) Was it reasonably necessary for PG, retained solely for the antitrust issue, to incur 263.2 hours in this matter in light of the fact that the matter was decided by a motion to dismiss based primarily on the release and covenant not to sue in the contract?
The Master will address the Defendant’s (Roche) fee request for both firms separately.
Defendant’s Claim for Reimbursement of MSR Attorney’s Fees and Costs
Although MSR’s total attorney’s fees bill is less than DWT’s, MSR actually spent more hours on the case, 1,001.3 versus DWT’s 813.7. The Master has thoroughly reviewed all of the invoices of both firms and finds that in general they were working on the exact same issues for their respective clients. This is not surprising since the obvious first legal stratagem for both CBS and Roche was the filing of a motion to dismiss based on the release and covenant not to sue provision of the agreement between Plaintiffs and Defendants. In going through the time sheets of both firms, one sees the same types of notations: “researching and evaluating case law to support motion to dismiss” (re application of release and covenant); “preparing and drafting and redrafting motion to dismiss,” “review of case authority,” “review and revise motion to dismiss,” “review of Plaintiffs’ response and preparing reply brief,” “analysis of tentative ruling,” and thereafter working on the appeal. In both the motion to dismiss and the appeal, the same issues are applicable to both Roche and CBS.
There appears to be evidence of cooperation and discussion between the two firms, but there is no real evidence presented of certain tasks being assigned or handled by only one firm. In short, while recognizing that issues have to be crafted toward the individual client, there still appears to be a goodly amount of duplication of work.
Accordingly, based on the evidence presented, the Special Master recommends that in determining the hour portion of the lodestar that between 33.33 percent and 40 percent (or using an average figure of 36.5 percent) be reduced from the hours claimed, because of duplication of effort resulting in a reasonable hour figure of 635.63. The hourly rate charged by MSR, which is an average rate of $263.63, is by any standard extremely reasonable. Therefore, the proper lodestar is determined by multiplying 635.63 hours by $263.63, resulting in an award to Roche regarding MSR’s attorney’s fees of $167,571.14 plus costs of 1,412.68.
Defendants’ Claim for Reimbursement of PG’s Attorney’s Fees and Costs
PG’s claim for attorney’s fees is $125,361.74, plus costs of $19,863.25. PG’s total attorney hours spent come to 263.2, with an overage effective rate of $476.30 per hour. In reviewing their bills, the Master notes that the hourly fees of the attorneys working on the case range from $275-$575 per hour in 2006, with the high range increasing to $650 per hour in 2007. In the Master’s opinion, these are reasonable hourly rates for the experienced lead attorneys of PG practicing in the metropolitan San Francisco, California, area.
The problem is that if Roche is going to take the somewhat unusual step of hiring a second law firm to represent him on the basis he needs a firm with antitrust expertise, then he should only be able to ask Plaintiffs to reimburse him (or rather CBS) for those charges that were incurred for necessary antitrust work.
The invoices of all three firms indicate they clearly recognized that the first obvious legal move was to file a motion to dismiss on the basis that Plaintiffs had contractually agreed not to sue the Defendants. The only need for antitrust work at this time was to include in the motion to dismiss a section moving to dismiss this claim on the bases that Plaintiffs had failed to plead an antitrust injury, as well as other deficiencies in their antitrust pleading. How many attorney hours should be reasonably spent on this task? An answer comes from CBS, which had to answer the same allegations, and it spent $18,542 in attorney’s fees for antitrust matters, which at DWT’s average rate of $408 per hour equals 45 hours. Frankly, the Master sees no reason why more hours needed to be put in on the antitrust issue at that time. If the release argument on the motion to dismiss fails, then one can gear up the antitrust work at that time. That is exactly how CBS’s counsel handled it.
Recognizing that there is time needed for a firm to familiarize itself with a client’s case, nonetheless, the aforesaid figure of 46 hours seems a reasonable time period for Roche’s second firm to spend on the case, particularly in light of the fact that MSR was Roche’s main firm. Therefore, the Master finds the appropriate lodestar for PG would be 45 hours times its average rate of $476.30 per hour, equaling $21,433.50, plus its claim for costs.
Summary of Attorney’s Fee Award
The Special Master recommends the following attorney’s fees award to be recovered from Plaintiffs:
To CBS: Attorney’s fees of $331,757.00; costs of $8,324.00. To Roche:
Attorney’s fees of the firm MSR $167,571.14; costs of $1,412.68. Attorney’s fee of the firm PG $21,433.50; costs of $19,863.25.
REPORT AND RECOMMENDATION BY SPECIAL MASTER
INTRODUCTION
The parties requested that the Special Master prepare a “Tentative Ruling” on their submitted motions prior to both the oral argument on these motions on March 2, 2007, and the Special Master’s issuing of a final “Report and Recommendation by Special Master” to the Federal District Court. A Tentative Ruling was issued on February 26, 2007, and a hearing was subsequently held at the JAMS offices in San Francisco, California on March 2, 2007. Having considered the arguments made at the hearing and the parties’ subsequent letter briefing the Special Master is now prepared to issue a final Report and Recommendation.
Two sets of motions were referred to the Special Master, the Honorable Eugene F. Lynch (Ret.):
The first set concerns Plaintiffs Raymond Reudy’s and Kevin Hicks’ (“Plaintiffs”) initial lawsuit, filed in June 2002, against Defendant Clear Channel Outdoor, Inc. (“Clear Channel”), alleging violations of Business and Professions section 17200.-Based on recent changes to the San Francisco Planning Code, Clear Channel has filed a Motion for Summary Judgment, arguing that these recent legislative developments require that the Court abstain from entertaining any equitable remedy sought by Plaintiffs, and further requires that the case be dismissed to allow the City to adjudicate any issues related to Clear Channel’s signs.
The second set of motions addresses Plaintiffs’ recent lawsuit, filed in August 2006, against Defendants Clear Channel, William Hooper (“Hooper”), CBS Corporation (“CBS”) and Patrick Roche (“Roche”) (collectively “Defendants.”) Plaintiffs’ complaint alleges intentional interference with prospective economic advantage, public and private nuisance, Sherman Act violations and unjust enrichment. All Defendants have filed 12(b)(6) motions to dismiss, arguing Plaintiffs have failed to state claims upon which relief may be granted. In addition, CBS and Roche argue the entire action against them is barred by a Release and Covenant not to sue they entered into with Plaintiffs in December 2003. Plaintiffs have filed Oppositions to all the motions.
FACTS
Brief Overview of the Relevant Regulations regarding Advertising Signs in the City & County of San Francisco
Outdoor advertising companies, such as Plaintiffs’ and Defendants’, lease their sign locations from real property owners and rent their sign space to advertisers. These outdoor advertising signs are regulated under the City Planning and Building Codes. Pursuant to these regulations, a permit is required in order for an outdoor advertising company to legally maintain and operate a general advertising sign anywhere in the City, and the installed sign must conform to the permit issued for that sign at that location.
In 1965 the San Francisco Sign Ordinance, the City’s most sweeping sign regulation overhaul to date, was adopted. It defined business signs and general advertising signs, and set forth specific permit requirements for the erection, placement, replacement, reconstruction, relocation or expansion of any sign.
San Francisco Planning Code section 604.1 was enacted on May 18, 2001, and gave outdoor advertising sign companies and property owners one year from the effective date of the legislation to find and post on each sign in operation its’ permit number and permitted dimensions. If no permit could be located, then the owner of the sign was allowed to apply for and obtain an “in-lieu identifying number,” to be posted in lieu of posting a permit number, provided that it was established that a permit had been lawfully issued in the first instance.
Proposition G, passed in March 2002, added Planning Code section 611, which prohibited the issuance of permits for any new general advertising signs in the City, and amended section 602.7 to redefine a general advertising sign to mean a sign “legally erected prior to the effective date of section 611.”
Most recently, Section 604(h) of the San Francisco Planning Code was amended, effective July 22, 2006, to specify examples of permissible maintenance and repairs. Similarly San Francisco Planning Commission Resolution No. 17258, adopted on June 8, 2006, adopted criteria for the legalization of existing general advertising signs.
In addition, the City enacted Planning Code section 604.2, titled “General Advertising Sign Inventories.” It requires any entity that owns a general advertising sign in the City to submit and maintain complete inventories of its signs for the purpose of allowing the City to review the compliance of each sign with the City’s regulatory scheme. Under this new law every general advertising company must submit an inventory of its signs, along with an inventory processing fee.
Procedural History of the Litigation
In January 2002, Plaintiffs commenced their initial action against Clear Channel in San Francisco Superior Court. Plaintiffs’ original complaint alleged two causes of action against Clear Channel, the first for unfair competition, and the second for unfair business practices, both pursuant to Business and Professions Code section 17200, et seq.
Plaintiffs’ case was based on allegations that Clear Channel’s operation, maintenance and use of approximately 385 billboards, rooftop and wall signs (general advertising signs) were in violation of various provisions of the San Francisco Planning and Building Codes, and that Clear Channel’s activity deprived Plaintiffs of the opportunity and right to fairly compete. Based on their interpretation of the local ordinances and Proposition G, Plaintiffs argued that Clear Channel was required to remove the signs in lieu of bringing them into compliance with the Codes.
Clear Channel removed the action to the Federal District Court in November 2002, and the parties stipulated to Plaintiffs filing an amended complaint, which included claims for both unfair competition and nuisance. In December 2002, Clear Channel moved to dismiss, and the court issued an order dismissing Plaintiffs’ nuisance claim.
Clear Channel thereafter sought a stay of the action, based on the doctrine of primary jurisdiction, to allow the City time to implement enforcement of its own sign ordinances pursuant to the “In Lieu Permit Number” process created under Section 604.1 of the Code. A stay order was issued in April 2003, and continued until June 2004, when it was partially lifted in order that discovery could commence as to the first phase of 25 signs.
In December 2003, while the Clear Channel action was pending, Plaintiffs and CBS entered into an Agreement whereby CBS purchased seven billboards from Plaintiffs for $2 million dollars. As part of the Agreement, the parties entered into a “Release” which provided that Plaintiffs released CBS “from any and all causes of action,” and furthermore specifically provided that Plaintiffs would not “commence any litigation, arbitration or other proceeding” against CBS “that is similar in any way to the action ... against Clear Channel.”
In November 2004, the Clear Channel case was ordered to the Special Master. Plaintiffs thereafter again sought leave to amend the complaint to add additional claims under the Racketeer Influenced Corrupt Organizations Act (“RICO”) and the Sherman Act. However, Plaintiffs’ proposed Second Amended Complaint, and the proposed RICO and antitrust causes of action therein, were later withdrawn.
Plaintiffs next filed a Motion for Leave to File a Third Amended Complaint to add new causes of action for interference with contract and prospective economic advantage, public and private nuisance, and unjust enrichment.
After reviewing the motion, the Special Master recommended: (1) that leave to amend to add a cause of action for nuisance should not be granted because Plaintiffs had failed to allege some “special injury” arising out of the alleged nuisance, as was originally found by Judge Conti; (2) that the amendment to allege the cause of action for interference with contract and prospective economic advantage be allowed; and (3) that amendment to add a cause of action for unjust enrichment be denied because unjust enrichment is not a separate cause of action, but is tied to other causes of action.
In November 2005, the Special Master heard three days of testimony and took evidence on the factual foundational issues related to each of the 25 signs for which the stay had been lifted. On May 8, 2006, the Special Master issued findings of fact on the factual history of each of these 25 signs.
In late May and early June, the Special Master took evidence on the legal issues concerning Plaintiffs’ standing to bring their Section 17200 claim, and whether Plaintiffs were entitled to a mandatory injunction. However, after Clear Channel began presentation of its evidence, the parties agreed to halt the hearing in order to attempt to mediate the dispute. After two days of mediation the parties were unable to resolve the case.
In August 2006, Plaintiffs filed a new complaint against Clear Channel, as well as Hooper, CBS, and Roche. This complaint alleges causes of action for nuisance, unjust enrichment, monopolization and intentional interference with an economic relationship. The above described set of motions was thereafter filed.
DISCUSSION
I. Applicable Standards for Summary Judgment, Judgment on the Pleadings and Dismissal
Federal Rule of Civil Procedure 56, subsection (c) provides that summary judgment shall be granted if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Anderson v. Liberty Lobby, Inc. (1986) 477 U.S. 242, 247-248, 106 S.Ct. 2505, 91 L.Ed.2d 202.)
“Judgment on the pleadings is proper when the moving party clearly establishes on the face of the pleadings that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law.” (Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc. (9th Cir.1989) 896 F.2d 1542, 1550; Rule 12(c).)
Rule 12(b)(6) provides for dismissal if the complaint fails to state a claim upon which relief may be granted. “A complaint should not be dismissed under Rule 12(b)(6) ‘unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.’ [Citation.] Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” (Balistreri v. Pacifica Police Dept. (9th Cir.1988) 901 F.2d 696, 699.)
II. Clear Channel’s Motion for Summary Judgment, Judgment on the Pleadings, or Dismissal
Clear Channel argues that the Court should abstain from entertaining any equitable remedy sought by Plaintiffs, and dismiss the action in order to allow the City to adjudicate any issues related to Clear Channel’s signs. The Special Master initially finds that although Clear Channel moves for summary judgment, judgment on the pleadings or dismissal, it appears from Clear Channel’s argument and reliance on the abstention doctrine that the underlying basis of the motion is actually one for dismissal.
The doctrine of abstention is summarized as follows: “Where [an unfair competition law] action would drag a court of equity into an area of complex economic [or similar] policy, equitable abstention is appropriate.” In such cases, it is primarily a legislative and not a judicial function to determine the best economic policy. (Shamsian v. Dept, of Conservation (2006) 136 Cal.App.4th 621, 641-642, 39 Cal. Rptr.3d 62; see also Desert Healthcare District v. PacifiCare, FHP, Inc. (2001) 94 Cal.App.4th 781, 114 Cal.Rptr.2d 623; CA Grocers Assn. v. Bank of America (1994) 22 Cal.App.4th 205, 27 Cal.Rptr.2d 396; and C. Sterling Wolfe v. State Farm Fire & Casualty Insurance (1996) 46 Cal. App.4th 554, 53 Cal.Rptr.2d 878.)
Clear Channel points to the recently enacted legislation which it argues supports their abstention argument because it indicates an intent by the City to enforce its’ sign regulations (i.e., amended Planning Code section 604(h), Planning Commission Resolution No. 17258 and recently enacted Sections 358 [inventory processing fee] & 604.2 [advertising sign inventories.] ) Clear Channel also argues that there is a risk of duplication of effort and a potential for inconsistent results if the abstention doctrine is not applied.
Plaintiffs argue that the abstention doctrine should not apply given the City’s limited personnel and funding for enforcement of its advertising sign regulations. Plaintiffs assert that the City has been “dragging its feet” on enforcement, i.e., Plaintiffs call Clear Channel’s view of future sign code enforcement “Pollyannic” because Plaintiffs claim the City has failed to enforce existing violations for years and are still years away from future enforcement. Relying on a Letter by the San Francisco Zoning Administrator Lawrence B. Badiner, Plaintiffs claim that the City actually supports private party lawsuits such as theirs to assist with the enforcement of its Codes.
Plaintiffs also argue that the new inventory provision is not “enforcement” and has only generated a one-time fee of approximately $465,000. Citing to a Declaration by Robert Passmore, a former employee with the City as a Planning and Zoning Administrator, they argue that the best current estimate from the City Planning staff is that enforcement on these inventoried signs will not begin for at least three years.
Finally, Plaintiffs argue that Clear Channel misreads the current Code which Plaintiffs argue (as they have before) requires any sign re-built or re constructed at the same location to constitute a new sign prohibited under Planning Code Section 611(a), and thus Resolution 17258 (permitting legalization) is in conflict with the existing City Code. In their Response Plaintiffs thus request a prohibitory injunction requiring Clear Channel to stop using its signs.
In his Tentative ruling the Special Master, having reviewed the abstention cases cited by Clear Channel, acknowledged that Clear Channel had made a plausible argument regarding abstention. However, the Special Master also noted that in the cases cited by Clear Channel, it was arguable that broader and more complex matters of economic and/or social policy were implicated. (Shamsian v. Dept. of Conservation (2006) 136 Cal.App.4th 621, 39 Cal.Rptr.3d 62 [beverage recycling laws]; Desert Healthcare District v. PacifiCare, FHP, Inc. (2001) 94 Cal.App.4th 781, 114 Cal.Rptr.2d 623 [healthcare services contracts]; California Grocers Assn. v. Bank of America (1994) 22 Cal.App.4th 205, 27 Cal.Rptr.2d 396 [bank service fees]; C. Sterling Wolfe v. State Farm Fire & Casualty Insurance (1996) 46 Cal.App.4th 554, 53 Cal.Rptr.2d 878 [earthquake insurance].) Furthermore, application of the abstention doctrine would result in a dismissal of Plaintiffs’ claims. Thus the Special Master at that time concluded that application of the abstention doctrine appeared premature. Having considered the parties arguments at the March 22nd hearing, the Special Master still finds abstention and dismissal to be inappropriate at this time.
Therefore, the Special Master recommends that the Court, as in its original Order of April 11, 2003, continue to stay the action pursuant to the doctrine of primary jurisdiction. As Judge Conti explained in his April 11, 2003 Order, primary jurisdiction applies when enforcement of a claim which is originally cognizable in the courts requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body. Under these circumstances the judicial process is suspended pending referral of such issues to the administrative body for its views. (See Farmers Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377, 390, 6 Cal.Rptr.2d 487, 826 P.2d 730.)
“[T]he primary jurisdiction doctrine advances two related policies: it enhances court decision making and efficiency by allowing courts to take advantage of administrative expertise, and it helps assure uniform application of regulatory laws. No rigid formula exists for applying the primary jurisdiction doctrine. Instead, resolution generally hinges on a court’s determination of the extent to which the policies noted above are implicated in a given case.” (Farmers Ins. Exchange v. Superior Court, supra, 2 Cal.4th at pp. 391-392, 6 Cal.Rptr.2d 487, 826 P.2d 730.)
Given the recent legislation and funding that was passed to address billboard compliance, this principle appears to be even more applicable now than at the time of Judge Conti’s original order. As set forth in the Planning Commission Executive Summary under “benefit of Legislation,” the purpose of the newly enacted section 604.2 is to provide a cohesive mechanism and funding for undertaking a comprehensive review of all general advertising signs located with the City to assure Code compliance, timely process code violations, and pursue the removal of nonconforming signs.
The Special Master acknowledges that Plaintiffs may believe the City’s enforcement procedures are unsatisfactory, but that is insufficient to prevent a Court from deferring to the City’s expertise. Plaintiffs fail to cite to any authority under either the abstention or primary jurisdiction doctrines that support denying a stay simply because the City is allegedly ineffectively enforcing its sign ordinance. Furthermore, even assuming Plaintiffs could establish a Section 17200 case, the City, with its expertise in these specialized land use issues, is better suited to more effectively and quickly address whether a sign is illegal under the applicable ordinances, and should be given the opportunity to do so. (CA Grocers Assn. v. Bank of America, supra, 22 Cal.App.4th at p. 218-219, 27 Cal.Rptr.2d 396.) The newly enacted inventory processing fee will assist in this endeavor and provide the necessary resources to the City to enforce code compliance.
Thus the Special Master finds that given the required sign inventories and additional funding, along with the amendments outlining the types of corrective actions permissible, the City has indicated its intent to address sign compliance issues, is in the best position to do so, and therefore should be given the opportunity. However, the Special Master also believes that abstention and dismissal is not warranted under these facts, and therefore a stay be issued pursuant to the doctrine of primary jurisdiction.
In the Special Master’s Tentative Ruling it was recommended that the stay apply also to the 25 signs for which Judge Conti lifted his earlier stay. The Special Master also noted that he was aware of the interests of Plaintiffs and their concern that the City promptly enforces its sign regulations. Thus the Special Master recommended in the Tentative Ruling that Plaintiffs should be afforded an opportunity to periodically check in with the Court or the Special Master to determine if progress is in fact being made toward enforcement of the sign regulations, and suggested a hearing be held every six to eight months either before the Court or Special Master in order to review the City’s progress on enforcement.
Pursuant to the arguments of the p