Unreported / Non-Citable
Background
Fresno voters approved Measure P, a citizen-initiated special sales tax, by 52.17 percent in November 2018. Although that was a majority, the measure’s text stated that passage required two-thirds approval, and in December 2018 the City Council declared that it had failed. Fresno Building Healthy Communities (FBHC) and the City filed competing declaratory-relief actions. Howard Jarvis Taxpayers Association (HJTA) intervened on behalf of Fresno members who would pay the tax, while the City submitted a statement of neutrality and otherwise did not participate in the merits litigation. FBHC and HJTA also agreed not to seek attorney fees from each other.
In the first appeal, the court held that a voter-initiated special tax required only majority approval and directed judgment declaring Measure P passed. After the trial court initially denied FBHC’s fee motion, the second appeal held that the City was an opposing party responsible for the conduct producing the litigation and that FBHC had established section 1021.5 entitlement. On remand, the trial court found reasonable lodestars of $224,397.50 for the merits phase and $303,697 for the fee-entitlement phase, denied a multiplier, and awarded $2,796.17 in costs. It assigned 90 percent of the merits-phase fees to HJTA and 10 percent to the City. Because of the parties’ no-fees agreement, that apportionment limited FBHC’s practical recovery from the City for that phase to $22,439.75. FBHC and the City separately appealed.
The Court’s Holding
The court reversed the apportionment because HJTA was not an “opposing party” under section 1021.5. Following Connerly, active participation and adversity alone are insufficient: an intervener must have a direct interest, meaning a particular right or special interest beyond one shared with the public. HJTA’s interest in protecting members from a citywide sales tax was a generalized economic and policy interest shared with other voters. The court distinguished record custodians and development applicants in the authorities invoked by the City because those parties had individualized stakes in the litigation’s subject. A November 5, 2026, modification additionally explained that HJTA’s status as an initiative proponent and its right to intervene did not establish a direct interest exposing it to fee liability.
The City’s four arguments for denying FBHC all fees—special circumstances, breach of candor, Civil Code section 3517, and unclean hands—were forfeited because they were not adequately presented below. The City had used Measure P’s drafting to support apportionment and oppose a multiplier, not to seek complete denial of fees or invoke those equitable doctrines. Alternatively, the claims depended on an unsupported premise that the measure’s text, rather than the City’s constitutional interpretation, caused its failure declaration. The court affirmed the fee-entitlement-phase award, reversed the merits-phase award, and directed a new order for $224,397.50 and $303,697 in fees plus $2,796.17 in costs. It allowed FBHC to seek appellate fees below without deciding entitlement or amount, awarded appellate costs, and denied judicial notice as unnecessary. The later order denied rehearing and its accompanying judicial-notice request without changing the judgment.
Key Takeaways
- An organization’s active intervention and opposition to the prevailing party do not alone make it an opposing party liable for section 1021.5 fees.
- A taxpayer association’s interest in avoiding a broadly applicable local tax may be no more direct than the interests of like-minded members of the general public.
- New equitable theories seeking complete denial of attorney fees generally must be presented to the trial court so its discretionary decisions can be reviewed on appeal.
- The directed replacement award removed HJTA’s 90 percent apportionment and made the City responsible for the reasonable merits-phase fees found by the trial court.
- Whether FBHC may receive additional fees for this appeal, and in what amount, remains for the trial court to decide in the first instance.
Why It Matters
The decision applies Connerly’s direct-interest requirement to an intervening taxpayer organization and distinguishes generalized opposition to a citywide tax from an individualized stake in records, property, or project approvals. It therefore limits fee exposure for advocacy interveners while preserving possible liability for interveners whose own legally significant interests are directly at issue.
The ruling also separates fee apportionment from equitable attempts to eliminate an award altogether. Fresno’s hearing arguments about drafting and being “made whole” did not preserve four later theories seeking no fees, and the record of its constitutional position independently undermined their common factual premise.