News Scrapbook 1984

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San Diego, CA \Son Di•g~ Co .1 £,, ning Tribune tCir. 0 . 127,-45-41 St 1 Jlll~'• p C B

San Diego, CA (Sin 0lego Co.) Union (0. 217,324) (S. 339,788)

Sa n Diego, Calif. Southern Cross (Cir. W, 27,500) c;

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:Advo acy groups tap their foes for funds Qu1r s in aw make business, government liable for their legal expenses liy Sieve LaR ~a.ff Wut« f~1 of local property laxei. discriminated agarnst children of poor areas.

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USO to host catechetlcal institute ..i. 7.s::_\- AI C AI.A PARK - ,\Tor rl 111 I ,Or O pcrscm ar<" < XJ><"< ll'd In 81ll'Jld th, C,tl t•cl1ct i, al Ill ·11tt It a t the ni\l·is1ty of .San Diego , t fo1 .'iq11 22. Th · th, m, for tlHS )Citr' 1n tilul, , pH , nted by the D,oc.. ,,111 O ffi ,e cf Rel1g1uus E

In one such case, TURN wa ,iwarded $8,800 for savmg ratepayers about $5 !i rmll1on 1n natural-gas bills liy demonslralmg that PG&E masap- phed a ratemalung formula. The group was awarded $13,102 10 anolher case after proving tha I PG&E had overestimated the amount of 011 il would have to burn to make power this winter, inflatmg elt!<·tneal rates. The $170 million overb1lling would have been re- turned to consumers when the error was dc;covered, l!:lhott said, but "m- slt!ad of gelling at back a year from now they got at back now." PG&E will not have to pay the muney unlt>ss the Supreme Court re- Jecl.s Jt!; challenge. Also in limbo 1s the ord<•red paJment of $2,000 by San Diego Gas & :Electric Co. to Edward

ter whal tbe Supreme Court dL'<'1des, the PUC will be abh: lo continue / awardmg the fees when the lalf. takes effect Jan I The Un1ver~1ty of San Diego's Cen ter for Dr non- profit UCAN (lllihty Consumers Ac- tion Network), to rirculatc lund-ra1s- mg materials mSDG&E b1Jl111g t•nve- lopcs at the utility's cost SDG&E opposed this ruling as well as the ' center's fuuds request. Ooe of the key quc:slions m the re- quest is to whal extent the center benE>filed U1e public by wet nursrng the new consumers group. SDG&E and Neuner doubt that the center's request meets the requ1rcme11i_.; "Forming a consumer orgami.a- tion and askmg the mass of con- sumers - some of whom SilY we re- ally don 't need this - to pay for 1t is qulle a different maller," the SDSU economist said. "I think lhey arc for- out as far as meetmg the test of sub- stanhal public contnbulwn." The center argues. "All SLX.:&E ratPpayers, whether they JOIII UCAN or not, will receive the benefit of UCAN 's profrss1011al representation. It is only fa1r t.hat those who benefll from the UCAN proceeding contrib- ute to the costs." Until recently, taxpaye,;s were the people who paid fee judgments in non-utility cases, bec·ause govern- ments were thought to be the only ones who could be made to pay. An appellate dec1swn m the Audu- bon Society 's bald eagle case changed all that by ordering the land developer to pay part of a $22,000 fees award assessed against San Ber- nardino Counly. In the chapter's Imperial Valley case, a $12,000 fees judgment was split among Califorma Edison, Umon 011 Co., Southern Pa- cific Land Co. and Imperial County. Developers view the precedent dimly. "The law seems to have estab- lished its own bias" against develop- ers, said Kim Kilkenny, legislative director for the Construction lndLLS- lry Federahon in San Diego. Developers also ask why they should be assessed attorneys' fees when government 1s responsible for approving developments and settmg conditions. . However, developers also have begun to unlimber these statutes agarnst agencies they consider overbeanng - and they are collecl- mg money, too See PAYBACK on Page -8

h 1~80, the San Bernardmo Valley uJubon Society was lake the skmny ,i:1¥ at the ooach. In issue after env1 • ru;mcntal L>Sue, hefty developer., ,atl cuunty upervisors kept kickmg :i.iud 111 at~ face. ' "We Jll.>l gut tired of losing all the l'nv1ronmcntal battles," said Gene (\mhff, then president. "Wratmg let- ter ,md gurng to hearmgs and bemg on rc111Pw !Joards didn't seem to do dllY goud" Tiu: 1,300 member chapter swung 11110 ill"tJOn lu ii one-two punch of lawsuits al U1ra,hi-d l lruun 011 Co., Southern Cal 1lormil f>.:dGon Co., Southern Pac1f1c I.and Co , ii land developer called (:old Mountam Memorial Park Inc , i,niJ the Jn1pt'ndl ..nd SJn Bernardino ,·u1.mty boards of supervisors. Its court v1dor1es preserved a bald eagle halnlat near Big Be.ir Lake, anti rt.'(IUJred that full environmental ~t ud1c:; pn'l:ed • geothermal dnllmg neilr th Salton &>a The 10(•.i I chapter found that not only can u get some respect, but also about $34,000 to pay legal expenses. The money would come from the pockets of the groups they had de- featt-tl in court • The secret .ippeared not on the bJr ~ of a matchbook cover, but m ;.Wtl' law and legal precedents. The <·hapter is one of a growmg number of cnv1rorunental, consumer and, most rncenlly, utility-ratepayer groups to pay their legal costs from tlu· treasuncs of the government ,1i;cm:1t-s and utility companies Ibey h;i ve out-Jousted ID court. · '"The common-law theory," said San lJ1ego atwrney Dwight Worden, the Audubon .Society's lawyer, "1s that lhe attorney general and other lawyers of the state are supposed to rcprc.sent the public mteresl and sue pt•ople who po IIute and utilities that charge too mut'h ''If they drop the ball and don l, ..nd .ii private peri;

It gave Serrano's l;;wyers $800,000 ID lees from ll1l' state. Soon after, the state Code of C1v1I Procedure was changed to conform When San Fnnl'1sco lawyer Gary Near proved m 1!181 that state banks were 1m~mg service charges on abandoned accuuub, the legal frame- work was m place for him to collect The Bank of America will pay the slate of Califorma between $26 mil- hon and $80 nulhon - the sum 1s be111g negotiated - betause the money that was unlawfully taken by the banks wuultl have gone into the stale treasury "Dy the time the .ic- counl.s were go,ng to the slate," said Near, who represented state taxpay- ers, "they had Leen cannibalized."

'JVe take a chunce on spending a lot of time for nothing. 'J¥hen we win, it is a savings ofmillions ofdollars for ratepayers. lf we take a few thousand dollars off the top, it is still a lot ofnet benefit for ratepa}'ers.' - Jon Elliott, staffcounsel for a utility comumers group in San Francisco

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Near's law firm will collect $1.9 m1lhon. When such s1.1its fail, though, :;mall consumer groups must fall back on their own often meager resources to pay the often slaggermg legal ex- penses. "We take a <•hance on spending a lot of time for nothing," said Jon El- hott, staff coun.;el for a San Francis- co ullhty consumers group called T.URN (Toward Utility R.ite Normal- 1zation). "When we wm, 1t 1s a sav- ings of m1lho1i, of dollars for rate- payers If we l.ake a few thousand dollar.. off the top, it 1s stlll a lot of net benefit for ratepayer~." Fee awards for lawyers and ex- perts m pubh• 11ulity proceedmgs are rclallvely uew The federal Pub- he Ut1hties HP~ulatory Policy Act of 1978 provides U1em for "mtervenors," as these lawyer., and experts are called, whose t·ases further energy conservation and other purposes of the act The stale Public Ullht1es Commis- sion ordered Pacific Gas & Electric Co.. for example, to pay TURN $119,000 alone since 1981 under thi:; act, c1nd order4'd SDG&E to pay $20,539 to the Welfare Rights Organi- zation of San Dwgo for a case related to c·onservat10n and consumer infor- mation The PUC later developed its own rule:, to reward attorneys who prove ullhties are charging too much money. Under these rules, the com- mission awarded TURN almost $22,000 this year from PG&E, which has argued before the stale Supreme Court lhat the cornmis.s1on over- stepped its authority by adopting lhem. - '

J Neuner, an elilnomics professor at San Diego State Umversity. Neuner contributed to a PUC deci- sion last December to reduce SDG&E's spendmg on conservation programs, shavmg rates by about $7 rrnllion In such rulings, the PUC often makes 11 clear that the utilities pay these legal costs out of the money that they collect ID utility rates. "They got $20.000 worth of expert pre:,enlallon for $2,000," Neuner said. "Thal's a pretty good deal." He also foresees the pos.sibilily of abuses. "Obviously, il can be makework for attorneys and experts and ...all other kinds of.people of this sort, and whether there is a contribution made to the regulatury process could be questionable," Neuner said. "You might say, why do we have this ex- pensive PUC staff?" PUC Conmus.sioner Leonard M. Crimes ani;wered this question in 1!1112. Grimes, who is now commission chairman, wrote: "We simply cannot expect our overworked staff to ad- dress all the LSSues that may be some importance to all ratepayers." Walter Scott, SDG&E li;uson with a local utility consumer group, said: "Our company ·really doesn't have any problem with the (PUC's fee awards rules) It as an opportumty to gel all the mformation in front of the commlliS1on, and we kind of support that concept" Utility mdustry lobbyists, howev- er, vigorously opposed a law signed by Gov. DeukmeJian on July 5, grant- ing the PUC authority to award fees that PG&E claims it lacks. No mat-

~I Continued from B-2 !/ · In one such !'ase, a San Diego law firm was awarded about $50,000 from the Cajjfornia Coast& Commis- sion early this year. The court ruled the comrru.ssion erred when it said a half-acre of of a client's development site was protected wetlands solely because 1t had been washed ~ay by the 1980 floods. The commission is currently ap- pealing the trial court's ruling to award the fees. ·•If we wm, we are ultimately enti- tled to attorneys' fees for arguing 1 about attorneys' fees and also enti• tied to attorneys' fees for the appeal of the trial court's judgment on the fees decision, so it's gets a little com- plicated," said Christopher W. Gar- rett, who represented the developer. He said he expects the ultimate amount to be much more. ·rt gives you a lever to try and get things resol ,ed, because normally you are at the mercy of a govern- ment agency," Garrett said of the pnvate atturney doctrine. Lawvers who convince judges to apply ·a "multiplier" to the fee amount as an added mcentive or reward for extraordinary public ben- efit can earn a large profit above and beyond the court's determination of the market value of their time. Other lawvers, like Audubon attor- nev Worderi', must wait years for their fee awards to be paid by the reluctant losers. "Some at,vrnevs who aren't famil- iar with these iaws are shocked." Worden said. "They say, My client is already mad at me because I lost. Then !le got my bill and now he is really going to be mad at me because he is getting the other attorney's bill'" Norwood Hazard, current presi- dent of the San Bernardino Valley Audubon Society, has no doubt that the $22.000 his group is to receive from San Bernardino County and the would-be developer of the bald eagle habitat will be well-spent. "I think the Big Bear area ts better off for havmg the eagles there and for \udubon having won the case,'' he said. ' It was 1a everyone's best 1Dterest."---~-~

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