On July 28, 2016, in a case of first impression, the Court of Appeal for the Sixth Appellate District held that labor costs for attorneys and paralegals to prepare the administrative record in a land use case are recoverable as expenses under Code of Civil Procedure 1094.5.

The case, No Toxic Air, Inc. v. Lehigh Southwest Cement Company, __ Cal.App.4th __ (2016) (Case No.H040047), arose over the Santa Clara County Board of Supervisors’ decision, in 2011, finding that the Permanente Quarry’s 3,510 acre surface mining operation, producing limestone and aggregate for the manufacture of cement, is a legal nonconforming use.  The quarry has been in operation since 1903 and has expanded substantially since The Permanente Corporation purchased it in 1939, opening new mining areas on the property and acquiring adjacent parcels.

In 1948, the County zoning ordinances went into effect that required use permits for mining operations such as those conduced at the quarry.  Permanente never sought a use permit for its quarry operations.

In 2010, Lehigh bought the quarry and applied to the County for a declaration that the mining operations qualified as a legal nonconforming use.  Following an investigation into the history of the quarry’s operations, the County approved a resolution declaring that the surface mining rights were vested and eligible for legal nonconforming use status.

No Toxic Air filed a writ challenging the County’s decision, and the Santa Clara County Superior Court denied it.  No Toxic Air appealed the denial of the petition, arguing that the trial court erred in using the substantial evidence standard to review the County’s findings.  The Court of Appeal denied that petition in a separate unpublished opinion also issued on July 28.

In this appeal, Lehigh asserted that as the prevailing party in the mandate proceedings, it is entitled to recoup costs associated with the preparation of the administrative record, including labor costs of paralegals and attorneys to assemble the record.  Lehigh asserted that the costs were properly recoverable under Code of Civil Procedure section 1094.5(a), which provides, in relevant part, “[i]f the expense of preparing all of any part of the record has been borne by the prevailing party, the expense shall be taxable as costs.”  No Toxic Air filed a motion seeking to strike the labor costs for Lehigh’s attorneys and paralegals, arguing that they were impermissible under Code of Civil Procedure section 1033.5, which allows attorney’s fees, but only when authorized by contract, statute, or law.

The trial court specifically found that the labor costs for the attorneys and paralegals were reasonable, and necessary for the compilation of the large administrative record.  The court decided not to award the fees, however, because it was constrained by the lack of an appellate decision allowing such an award.  Writing that “I just couldn’t find an appellate decision that would support me,” the court granted No Toxic Air’s motion to strike the labor costs for Lehigh’s attorneys and paralegals.

Lehigh appealed, arguing that parallel CEQA case law addressing Public Resources Code section 21167.6(b)(1) supported its interpretation of section 1094.5.  Since the filing of the briefs in No Toxic Air, the Fourth District Court of Appeal definitively ruled on the issue of the recovery of the labor costs of attorneys and paralegals in the creation of the administrative record in Otay Ranch, L.P. v. Count of San Diego, 230 Cal.App.4th 60 (2014), a CEQA case in which the County of San Diego recovered over $37,000 in costs for preparing an administrative record, including costs for reasonably necessary attorney and paralegal labor.

Although Otay Ranch is a CEQA case, the Court of Appeal in No Toxic Air reasoned that the recovery of attorney and paralegal labor costs is equally applicable in land use litigation.  The Court also noted that the trial court found that the attorney and paralegal labor costs were reasonable and appropriate for the complexity and size of the record and granted No Toxic Air’s motion only because it found that there was no appellate authority allowing the recovery of attorney labor costs in the absence of contract, statute, or law.   Relying on the rationale of Otay Ranch, the Court held that labor costs for attorneys and paralegals to prepare the administrative record in land use litigation are recoverable as expenses under Code Civil Procedure, section 1094.5(a).


Questions? Please contact Bryan W. Wenter, AICP of Miller Starr Regalia.

For more than 50 years, Miller Starr Regalia has served as one of California’s leading real estate law firms. Miller Starr Regalia has expertise in all types of real property matters, including full-service litigation and dispute resolution, transactions, acquisitions, dispositions, leasing, financing, common interest development, construction, management, eminent domain and inverse condemnation, exactions, title insurance, environmental law, and land use.  Miller Starr Regalia attorneys also write Miller & Starr, California Real Estate 4th, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state.  For more information, visit www.msrlegal.com.