Orange County Water District v. The Arnold Engineering Co.

196 Cal. App. 4th 1110, 127 Cal. Rptr. 3d 328, 2011 Cal. App. LEXIS 820
CourtCalifornia Court of Appeal
DecidedMay 24, 2011
DocketNo. G043502
StatusPublished
Cited by13 cases

This text of 196 Cal. App. 4th 1110 (Orange County Water District v. The Arnold Engineering Co.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Orange County Water District v. The Arnold Engineering Co., 196 Cal. App. 4th 1110, 127 Cal. Rptr. 3d 328, 2011 Cal. App. LEXIS 820 (Cal. Ct. App. 2011).

Opinion

Opinion

ARONSON, J.

Defendants appeal a trial court order denying their motion to disqualify the law firm of Miller, Axline & Sawyer (Miller Firm) from representing plaintiff Orange County Water District (Water District) in this action.1 Defendants contend the decisions in County of Santa Clara v. [1115]*1115Superior Court (2010) 50 Cal.4th 35 [112 Cal.Rptr.3d 697, 235 P.3d 21] (Santa Clara) and People ex rel. Clancy v. Superior Court (1985) 39 Cal.3d 740 [218 Cal.Rptr. 24, 705 P.2d 347] (Clancy) require disqualification because the Water District agreed to pay the Miller Firm a contingency fee for prosecuting this public nuisance abatement action on the public’s behalf. According to defendants, the Miller Firm’s financial interest in this litigation conflicts with the heightened duty of neutrality Clancy and Santa Clara impose on any attorney prosecuting a public nuisance action for the public’s benefit. The trial court denied defendants’ motion after finding the Water District did not bring this action on the public’s behalf, but rather to recover compensatory damages allegedly caused by defendants’ contamination of certain groundwater aquifers. We agree and affirm the trial court’s order.

I

Facts and Procedural History

The Legislature created the Water District to manage, regulate, replenish, and protect the groundwater basin generally covering the northern half of Orange County. (See Stats. 1993, ch. 213, § 2, p. 1548, West’s Ann. Wat.— Appen. (2010 ed.) § 40-1 et seq., p. 138.) The Water District provides water to more than two million users, but it is not a water retailer and does not provide water directly to the public. Nineteen water producers, including cities, other water districts, and private water companies, pump water from the Water District’s groundwater basin and sell it to the public.

In 2004, after investigating contamination discovered in groundwater aquifers underlying Anaheim and Fullerton, the Water District’s board of directors voted to begin litigation to recover the costs of investigating and remediating the groundwater contamination. The board thereafter interviewed several law firms before hiring the Miller Firm. The Water District retained ultimate decisionmaking authority regarding all litigation and required the Miller Firm to obtain authorization to file litigation on a case-by-case basis. Although the details regarding the fee agreement between the Water District and the Miller Firm are not in the record, the Water District acknowledges it agreed to pay the Miller Firm a contingency fee.

The Miller Firm filed this action on the Water District’s behalf in December 2004, alleging defendants and other entities that owned, operated, or leased industrial facilities in Anaheim and Fullerton caused the groundwater [1116]*1116contamination by discharging and dumping hazardous waste. The Water District’s first amended complaint alleged six causes of action, including statutory claims under its enabling legislation (Stats. 1993, ch. 213, § 2, p. 1548, West’s Ann. Wat.—Appen., supra, § 40-1 et seq., p. 138) and the Carpenter-Presley-Tanner Hazardous Substance Account Act (Health & Saf. Code, § 25300 et seq.). It also brought negligence, public nuisance, trespass, and declaratory relief claims. The Water District sought compensatory damages for all investigation and remediation costs associated with the contamination and, on its public nuisance claim, an order compelling defendants to abate the nuisance.

In March 2010, defendants moved to disqualify the Miller Firm when they discovered it represented the Water District under a contingency fee agreement. Defendants argued Clancy prohibited a public entity from paying a private attorney a contingency fee to prosecute a public nuisance abatement action. According to defendants, an attorney prosecuting a public nuisance action on the public’s behalf may not have a financial stake in the litigation because the attorney must remain neutral when acting as a representative of the public exercising the government’s sovereign powers.

The trial court denied the motion, finding Clancy did not apply because the Water District did not pursue this action on the public’s behalf. Rather, the trial court found the Water District brought this action on its own behalf to recover remediation costs and other damages it suffered distinct from any damages the public suffered. As an alternative ground for denying the motion, the trial court found defendants unreasonably delayed bringing their motion to disqualify.

Defendants filed a timely notice of appeal.2

II

Discussion

A. Standard of Review

We review a trial court’s decision on a disqualification motion for abuse of discretion. (People ex rel. Dept, of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1143 [86 Cal.Rptr.2d 816, 980 P.2d 371] (SpeeDee Oil).) “ ‘In viewing the evidence, we look only to the evidence [1117]*1117supporting the prevailing party. [Citation.] We discard evidence unfavorable to the prevailing party as not having sufficient verity to be accepted by the trier of fact. [Citation.] Where the trial court has drawn reasonable inferences from the evidence, we have no power to draw different inferences, even though different inferences may also be reasonable.’ [Citations.] We presume the trial court found for the prevailing party on all disputed factual issues. [Citations.]” (City National Bank v. Adams (2002) 96 Cal.App.4th 315, 322-323'[117 Cal.Rptr.2d 125] (Adams))

“We will reverse the trial court’s ruling only where there is no reasonable basis for its action. [Citation.] However, we must also ensure that the trial court has made a reasoned judgment that complies with the applicable legal standard. [Citation.]” (Adams, supra, 96 Cal.App.4th at p. 323.) “Thus, where there are no material disputed factual issues, the appellate court reviews the trial court’s determination as a question of law. [Citation.] In any event, a disqualification motion involves concerns that justify careful review of the trial court’s exercise of discretion. [Citation.]” (SpeeDee Oil, supra, 20 Cal.4th at p. 1144.)

B. The Clancy Decision

Clancy served as the controlling authority at the time the trial court denied defendants’ motion to disqualify the Miller Firm. It arose from the City of Corona’s efforts to close a bookstore selling sexually explicit materials. Initially, the city passed a zoning ordinance requiring the bookstore to relocate because of its proximity to a church and school. The bookstore owner, however, successfully challenged the ordinance in federal court on constitutional grounds. (Clancy, supra, 39 Cal.3d at p. 743.)

“Frustrated by its defeats in federal court,” the city adopted a new ordinance defining the bookstore as a public nuisance and hired Attorney James Clancy to prosecute abatement actions under the new ordinance.

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Cite This Page — Counsel Stack

Bluebook (online)
196 Cal. App. 4th 1110, 127 Cal. Rptr. 3d 328, 2011 Cal. App. LEXIS 820, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orange-county-water-district-v-the-arnold-engineering-co-calctapp-2011.