Bradley Brownlow is a Partner and Genna Yarkin is an Associate in Holland & Knight's San Francisco office
In Creed-21 v. City of Wildomar et al., the California Court of Appeal, Fourth Appellate District, upheld a lower court's dismissal of a California Environmental Quality Act (CEQA) case filed by a plaintiff's attorney who engaged in repeated discovery abuse. Wal-Mart argued that Creed-21 had no standing because it was merely a shell corporation formed by the Briggs Law Corp. to reap the rewards of a financial settlement or attorneys' fees award. On appeal, the Court of Appeal upheld the terminating sanction. While the holding in this case is a rather routine affirmation of a lower court's authority to issue terminating sanctions, the decision suggests that some California judges are re-examining standing requirements in the context of CEQA, with an eye toward reining in plaintiff's attorneys motivated by their own financial interests. The California Environmental Quality Act (CEQA) has a history of abuse by petitioners motivated by non-environmental interests. Any party can file a CEQA lawsuit for non-environmental reasons, including commercial actors seeking to derail a competing project, labor unions seeking project labor agreements and "bounty hunter" attorneys who file cases on behalf of nonprofit shell corporations with the hope of lining their own pockets with the proceeds of financial settlements or attorneys' fees.
According to independent investigative news organization inewsource.org, San Diego attorney Cory Briggs, of the Briggs Law Corp., has filed actions on behalf of 30 charitable nonprofits, most of which he helped create. "Briggs' cousin, along with his wife, sit on the boards of 10 of them," said the inewsource article. "Yet according to state and federal filings, the majority of the nonprofits don't exist outside of court. Instead, they serve as vehicles for lawsuits." The voiceofsandiego.org explains that "[t]hese lawsuits all tend to follow a formula: A local City Council approves a big-box development[.] A nonprofit with a watchdoggy name sues, with Briggs as its attorney. The developer settles the case and pays Briggs for his trouble. It's often unclear who is against the project other than Briggs himself." Although Briggs has used this tactic to successfully challenge several projects under CEQA, a recent case out of California's Fourth District Court of Appeal suggests that this business model may be subject...