City of Phoenix Petition for Attorneys' Fees

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City of Phoenix Petition for Attorneys' Fees Powered By Docstoc
					1    FENNEMORE CRAIG, P.C.
     Timothy Berg (No. 004170)
2    Andrew M. Federhar (No. 006567)
     3003 North Central Avenue
3    Suite 2600
     Phoenix, AZ 85012-2913
4    Telephone: (602) 916-5000
     Email: federhar@fclaw.com
5
     Gary Verburg (No. 005515)
6    City Attorney
     City of Phoenix
7    200 West Washington Street Suite 1300
     Phoenix, AZ 85003-1611
8    Telephone: (602) 262-6761
     Email: gary.verburg@phoenix.gov
9
     Attorneys for City of Phoenix Defendants
10
11
                                 SUPERIOR COURT OF ARIZONA
12
                                      MARICOPA COUNTY
13
     MEYER TURKEN, KENNETH D.                   No. CV2007-013766
14   CHEUVRONT, JAMES IANNUZO,
     JUSTIN SHAFER, ZUL GILLANI, and            CITY OF PHOENIX DEFENDANTS’
15   KATHY ROWE,                                PETITION FOR ATTORNEYS’ FEES
16                     Plaintiffs,              (Assigned to the Honorable Robert E. Miles)
17                v.
                                                (Oral Argument Requested)
18   PHIL GORDON, DAVE SIEBERT,
     PEGGY NEELY, PEGGY BILSTEN,
19   TOM SIMPLOT, CLAUDE MATTOX,
     GREG STANTON, MICHAEL
20   JOHNSON, and FRANK
     FAIRBANKS, and the CITY OF
21   PHOENIX,
22                     Defendants,
23                     and
24   NPP CITYNORTH, L.L.C.,
25                     Intervenor-Defendant.
26
1           Pursuant to Rule 54 (f), Arizona Rules of Civil Procedure, the City of Phoenix, its
2    Mayor, Council and City Manager, (collectively, the “ City” ) move this Court for an award
3    of their costs and attorneys’ fees.        The request for fees is made pursuant to
4    A.R.S. § 12-341.01(A); the request for costs is made pursuant to A.R.S. § 12-341.
5           By minute entry dated April 2, 2008 (the “ Minute Entry”), the Court granted the
6    City’s motion for summary judgment and denied Plaintiffs’ cross-motion for summary
7    judgment. This ruling disposed of all legal matters in the case short of entry of a final
8    form of judgment. Rule 54(f) requires that the prevailing party file a petition for fees
9    within 20 days after issuance of the minute entry granting summary judgment. Attached
10   as Exhibit 1 is the affidavit of undersigned counsel showing that the fees the City believes
11   were reasonably incurred and taxable against Plaintiffs amount to $298,066.00. As shown
12   in the City’s Statement of Costs and Notice of Taxation of Costs filed simultaneously
13   herewith, taxable costs incurred are $2,040.54.          In addition, the City incurred
14   computerized research expenses in the amount of $6,836.00. Together, these fees and
15   costs total $306,942.54.1
16          1.     Introduction
17         As the Court is aware, this action arises out of the Parking Space Development and
18   Use Agreement (the “ Agreement”) entered into between the City and NPP CityNorth,
19   L.L.C. (the “ Developer”) in 2007. Plaintiffs, a group of citizens of the City, ostensibly
20   filed this action challenging the Agreement on three separate constitutional bases.
21   However, unlike other litigation, Plaintiffs did not have to pay their attorney for the
22   representation, nor were they responsible for any taxable costs incurred or fees awarded
23   against them in the litigation. See, Answers to Interrogatories, attached hereto as Exhibit
24   1
       Notably, this petition does not request reimbursement for the substantial costs
     incurred by the City for time devoted to this litigation by the City Attorney’s
25   Office, which included assisting with discovery, review of pleadings and motions,
     and coordination with undersigned counsel. See generally Lacer v. Navajo County,
26   141 Ariz. 392, 687 P.2d 400 (App.1983)(fees of county attorney are recoverable).
                                                  1
1    2.   Instead, the Goldwater Institute, for whom Plaintiffs’ counsel work, undertook
2    responsibility for the costs and fees in this litigation. Further, the Goldwater Institute
3    considered the possibility of a fee award against Plaintiffs and promised to indemnify
4    them in the event of such an award. Id.
5                 A.     The Goldwater Institute
6          The Goldwater Institute is a tax-exempt public policy think tank that exists “to
7    keep watch on government and to expand school choice, restore economic liberty, protect
8    private property, and affirm Arizona's independence against unconstitutional federal
9    encroachments.” www.goldwaterinstitute.org/aboutus/aboutus.aspx. To carry out this
10   mission, the Goldwater Institute established the Scharf-Norton Center for Constitutional
11   Litigation (the “Center”), for whom Plaintiffs’ counsel work. The stated purpose of the
12   Center is to “litigate in such areas as fiscal responsibility…and property rights to assist
13   individuals the government has harmed, and ensure all Arizonans enjoy their
14   constitutional rights.” www.goldwaterinstitute.org/litigation/litigation.aspx.   Under the
15   heading of “ Help Defend Freedom,” the Center promises that “[o]ur clients receive free
16   legal representation thanks to the generosity of our donors.”       Id.   It was with this
17   promise that the Center and its staff undertook this lawsuit against the City. As the
18   attached interrogatory answers reveal, the Goldwater Institute “has agreed to indemnify
19   [plaintiffs] in the event that attorneys fees or costs are awarded against [them] in this
20   action.” See Exhibit 2. Thus, any award of fees against Plaintiffs will not be paid by
21   them, but instead will be paid by the Center and the Institute. Moreover, Exhibit 2 clearly
22   shows that the Goldwater Institute and the Center chose to challenge the Agreement
23   anticipating that fees might be awarded against them.
24                B.     The Goldwater Institute unnecessarily expanded the scope and
                         expense of this action.
25
           Not only did the Goldwater Institute proceed with this action knowing that it might
26
                                                  2
1    be ordered to pay the City’s fees and costs, it litigated this case in a manner that increased
2    its scope and expense far beyond that which was required to fully litigate the dispositive
3    issues therein.   First, despite the fact that Plaintiffs clearly viewed this case as one
4    involving the interpretation and scope of the Gift Clause, Plaintiffs insisted on alleging
5    additional constitutional violations that, simply put, had no chance of success.         Yet,
6    because Plaintiffs chose to assert these claims and refused to abandon them, the City was
7    forced to expend significant amounts of time, money, and resources defending them.
8           Second, despite the overwhelmingly legal nature of the key issues, Plaintiffs
9    insisted on taking several depositions, retaining multiple expert witnesses, and
10   propounding voluminous discovery.         For example, Plaintiffs noticed and took the
11   depositions of the City’s Deputy City Manager, the author of an economic report created
12   by a consultant hired by the City (whose deposition took place in Los Angeles,
13   California), and the author of an economic analysis conducted by a consulting firm hired
14   by Intervenor NPP City North, L.L.C. (“CityNorth”).           Moreover, Plaintiffs retained
15   experts who produced reports that amounted to little more than compilations of reasons
16   why the experts believed tax incentive financing agreements are “bad” as a matter of
17   public policy. Significantly, Plaintiffs insisted on retaining these experts despite the fact
18   that the City repeatedly communicated to Plaintiffs its position that expert testimony was
19   completely unnecessary and irrelevant.        See Exhibit 3, September 17, 2007 email
20   exchange between counsel for the City and counsel for Plaintiffs. Finally, Plaintiffs
21   propounded numerous discovery requests to the City, including requests for admission,
22   requests for production, and twenty-seven unnecessary, irrelevant, and burdensome
23   non-uniform interrogatories—each containing multiple specific sub-parts—that required a
24   substantial amount of in-house and outside resources to address. See Exhibit 4, City of
25   Phoenix Defendants’ Responses to Plaintiffs’ Interrogatories to Defendants.
26          In contrast, the City did not propound a single discovery request to Plaintiffs,
                                                   3
1    request a single document from them, or notice any of Plaintiffs’ depositions. Indeed, the
2    only depositions noticed by the City were the depositions of Plaintiffs’ two expert
3    witnesses, which depositions became necessary only because Plaintiffs decided, over the
4    City’s objections, to retain them in the first place. Indeed, as Plaintiffs must concede, the
5    City has at every opportunity sought to streamline this case, reduce costs, and expedite its
6    resolution, despite Plaintiffs’ attempts, intentional or otherwise, to the contrary.
7           2.     This Court Has Discretion to Award Attorneys Fees Under
                   A.R.S. § 12-341.01(A).
8
                   A.     A.R.S. § 12-341.01(A)
9
            A.R.S. § 12-341.01 (A) provides that a trial court “may award the successful party
10
     reasonable attorney’s fees” in “any contested action arising out of a contract, express or
11
     implied.” The express purpose and intent of the statute is to “ mitigate the burden of the
12
     expense of litigation to establish a just claim or a just defense” (A.R.S. § 12-341.01(B)),
13
     and “encourage more careful analysis prior to filing suit.” Chaurasia v. General Motors
14
     Corp. 212 Ariz. 18, 29, 126 P.3d 165, 176 (App. 2006). Inasmuch as the present action
15
     obviously constitutes a “contested action” and the City is clearly the “successful party,”
16
     whether an award under § 12-341.01 is within the Court’s discretion here depends on
17
     whether the current action constitutes an action “arising out of contract.”
18
                   B.     This case arises “out of contract” for purposes of § 12-341.01(A).
19
            Under well-established Arizona law, courts look not to the form of the pleadings,
20
     but rather “the nature of the action and the surrounding circumstances to determine
21
     whether the claim is one ‘arising out of contract.’” Marcus v. Fox, 150 Ariz. 333, 335,
22
     723 P.2d 682, 684 (1986). Historically, Arizona courts “have broadly interpreted what
23
     types of transactions are included within this clause.” Id. at 334, 723 P.2d at 683; Schwab
24
     Sales, Inc. v. GN Const. Co., Inc., 196 Ariz. 33, 37, 992 P.2d 1128, 1132 (App. 1998).
25
            Significantly, an award under § 12-341.01(A) “is not limited to only those cases in
26
                                                    4
1    which a contract is entered into and subsequently breached.” Id. at 335, 723 P.2d at 684.
2    Rather, the key inquiry is whether there is a “causal link” between the claim or defense
3    and the underlying contract (id.), or where the claim at issue “ would not have existed but
4    for” the contract. Id. at 336, 723 P.2d at 685. See also, Hanley v. Pearson, 204 Ariz. 147,
5    152, 61 P.3d 29, 33 (App. 2003) (“ An action arises out of contract under
6    A.R.S. § 12-341.01(A) if it could not exist but for the contract.”) (internal citations and
7    quotations omitted); Schwab Sales, Inc., 196 Ariz. at 37, 992 P.2d at 1132 (holding that
8    “if [a plaintiff’s] claim against [a defendant] would not exist but for a contract, the claim
9    may be characterized as arising out of contract and § 12-341.01 applies, permitting a
10   discretionary award of attorney’s fees.”); Chaurasia, 212 Ariz. at 26, 126 P.3d at 173
11   (holding that the statute “permits recovery for a non-contract action if that action would
12   not exist but for the breach of contract” and that “[t]he contract must have some causal
13   connection with the claim to justify an award of attorneys’ fees.”). An award under § 12-
14   341.01 can be appropriate even where the plaintiff and the defendant lack privity of
15   contract. See, e.g., Chaurasia, 212 Ariz. at 30, 126 P.3d at 177 (“ A defendant seeking
16   attorneys’ fees under A.R.S. § 12-341.01 need not be a party to the contract forming the
17   basis for the award.”); Schwab Sales, Inc., 196 Ariz. at 37, 992 P.2d at 1132 (“[A] cause
18   of action may arise out of contract even if one of the litigants was not a party to the
19   contract.”); Nationwide Mutual Ins. Co. v. Granillo, 117 Ariz. 389, 394-95, 573 P.2d 80,
20   85-86 (App. 1977).
21          The current action arises out of contract for several reasons. First, the existence of
22   the Agreement is central to the issues in this case; it is the very reason suit was brought by
23   Plaintiffs in the first place. As the Court is aware, the entire purpose of the present action
24   is to invalidate and set aside the Agreement. See, e.g., Plaintiffs’ Complaint at p. 19
25   (requesting relief in the form of a declaration that the Agreement exceeded the City’s
26   powers, seeking to “enjoin its enforcement,” and requesting a preliminary and permanent
                                                   5
1    injunction “enjoining defendants from making any payments or otherwise expending and
2    [sic] taxpayer funds whatsoever pursuant to the terms of the Agreement.”).
3           The fact that the goal of Plaintiffs’ claims was to invalidate and enjoin enforcement
4    of the Agreement is significant, for Arizona courts have specifically held that an action
5    seeking such relief arises out of contract, even if a plaintiff is not a party to the contract at
6    issue. For example, in ASH, Inc. v. Mesa Unified School Dist. No. 4, 138 Ariz. 190, 673
7    P.2d 934 (App. 1983), the plaintiff brought suit seeking to compel the defendant school
8    district to award a purchase contract to it and invalidate the contract awarded to one of its
9    competitors. Id. at 190, 673 P.2d at 934. The trial court rejected the plaintiff’s claims and
10   awarded attorneys’ fees to the school district under § 12-341.01(A). On appeal the
11   plaintiff argued that the case, which was in the nature of a petition seeking mandamus
12   relief, did not arise out of contract and that the award of fees was therefore erroneous. Id.
13   at 192, 673 P.2d at 934. Rejecting this claim, the court seized upon the fact that the goal
14   of the action was to invalidate the contract, holding that the case “clearly” arose out of
15   contract because “[the plaintiff] filed suit to set aside a contract awarded by [the
16   defendant]…and to compel [the defendant] to award the contract to [the plaintiff].” Id.
17          The same conclusion applies here. This action sought to invalidate the Agreement
18   and enjoin its enforcement. The language, intent, and effect of the language contained in
19   the Agreement were central to the dispositive legal issues in this case. Simply put, this
20   action would not have existed “but for” the Agreement. Under such circumstances, this
21   action is clearly one “arising out of contract” for purposes of A.R.S. § 12-341.01.
22          3.     The Court Should Exercise its Discretion to Award Attorneys’ Fees
                   To the City.
23
                   A.      The Standard
24
            The City recognizes that once a trial court determines that the elements required to
25
     permit an award of fees under § 12-341.01(A) are satisfied, the decision to award fees,
26
                                                    6
1    and the amount of fees, lies within the sound discretion of the court. See, e.g., Fulton
2    Homes Corp. v. BBP Concrete, 214 Ariz. 566, 155 P.3d 1090 (App. 2007);
3    A.R.S. § 12-341.01(B). In determining whether to award fees and in what amount, the
4    trial court should consider the following factors: (1) the merits of the unsuccessful party’s
5    claims; (2) whether the claim could have been settled; (3) whether the successful party’s
6    efforts were “completely superfluous in achieving the result;” (4) whether assessing fees
7    would cause “extreme hardship;” (5) whether the successful party “did not prevail with
8    respect to all of the relief sought;” (6) the novelty of the issues presented; and
9    (7) “ whether an award to the prevailing party would discourage other parties with tenable
10   claims from litigating” similar claims. Id. at 569, 155 P.3d at 1093 (internal citations and
11   quotations omitted). As a threshold matter, the third and fifth factors cited above clearly
12   militate in favor of an award of fees: the City prevailed with respect to all of the relief
13   sought in its motion for summary judgment, and its efforts in securing summary judgment
14   were certainly not “superfluous” to the result achieved. As set forth below, the other
15   factors relating to whether an award is appropriate similarly justify an award of fees here.2
16                 B.      An award of fees would not discourage the litigation of tenable
                           claims or “chill” attempts to judicially vindicate constitutional
17                         rights.”
18          An award of fees in this case would not discourage or chill suits to vindicate public
19   rights. As noted above, this action was funded entirely by the Goldwater Institute and the
20   Center, which was established for the express purpose of litigating against governments.
21   Indeed, the Institute went so far as to agree to indemnify Plaintiffs for any fee award that
22   might be entered against them. For that reason, an award of fees would not have the
23   effect of discouraging real parties in interest—the ones who have allegedly suffered actual
24
     2
              Given the parties’ different positions on the applicable law and Plaintiffs’ position
25   that litigation in this Court is “only the first step in the judicial process,” there is no basis
     to assume that an award of fees is not appropriate because the case could have been
26   settled.
                                                    7
1    and concrete harm as a result of governmental action—from seeking to vindicate their
2    rights.     At most, any “chill” that might be felt would be felt only by well-funded,
3    politically-oriented organizations that seek to shape and form public policy according to
4    their own predilections by appealing to the courts. As a tour of its website confirms, the
5    Goldwater Institute solicits citizens to bring their grievances to the Center. Clearly the
6    Institute’s agreement to indemnify Plaintiffs in the event of an award of fees insulates
7    anyone from being “chilled” by such an award.
8                     C.     An award of fees would not result in “extreme hardship.”
9              In light of the indemnity obligations of the Institute, an award of fees will not result
10   in “extreme hardship” for Plaintiffs. And the same conclusion applies with respect to any
11   “hardship” that might be felt by the Institute as a result of an award fees. As noted above,
12   the Institute is well-funded and by all accounts is extremely successful in its fund raising
13   efforts. In fact, in a letter to Institute supporters dated April 9, 2008 from the Institute’s
14   President and Chief Executive Officer, the Institute boasted that its “revenue climbed to
15   $3 million, facilitating ongoing policy research and the launch of a new litigation arm
16   within the Institute.” See Exhibit 5, April 9, 2008 Letter from Darcy A. Olsen. Moreover,
17   the 2007 Goldwater Institute Annual Report reported total income of $3,585,123 for 2007
18   ($2,112,814 of which was derived from donor contributions), and “net assets of
19   $4,175,021. See Exhibit 6, Goldwater Institute 2007 Annual Report, p. 25. Accordingly,
20   an award of fees in this matter, which would be paid by the Institute, would not result in
21   “extreme hardship.”
22             The Court should also balance the hardship to the City of having to pay fees to
23   defend against the Goldwater Institute’s unsuccessful lawsuit. The City, concerned about
24   the impact this lawsuit would have on CityNorth’s commitment to proceed under the
25   Agreement, exercised its discretion in retaining outside counsel.             With hundreds of
26   millions of dollars of future tax revenue in question, such a decision can hardly be
                                                      8
1    second-guessed. Further, there is a certain irony in any opposition that the Goldwater
2    Institute files to this fee award request. The Institute claims to be concerned about
3    protecting the public’s money yet, has no qualms about forcing the City to expend that
4    money to defend against this lawsuit. The Goldwater Institute clearly understands that if
5    it wrongly attacks a City action, then the Institute should bear the cost of that, not the City
6    and its taxpayers. Anything else would be inconsistent at best.
7                  D.     Plaintiffs’ claims lacked merit.
8           Plaintiffs’ complaint alleged three different potential constitutional infirmities in
9    the Agreement: violations of the Privileges and Immunities/Equal Protection Clause, the
10   Special Legislation prohibition, and the Gift Clause.
11          In granting the City’s Motion on the Privileges and Immunities claim, the Court
12   specifically held that “Plaintiffs do not mount a serious Equal Protection challenge.”
13   Minute Entry at p. 3. At oral argument, the Court even asked Plaintiffs’ counsel if he was
14   serious about this claim. There was no factual evidence offered that the City’s decision to
15   enter into the Agreement had “no conceivable rational basis” nor was there any argument
16   that there was no “legitimate governmental interests” furthered by the Agreement. Id.
17          As for the Special Legislation claim, Plaintiffs’ efforts were equally unavailing.
18   Here, Plaintiffs failed to allege any facts that would establish a prima facie case that the
19   City had passed special legislation. The Court specifically noted that the only “law” that
20   might be subject to a special law challenge was A.R.S. § 9-500.11 and that Plaintiffs had
21   failed to so much as raise such a challenge. Id. at p. 5.
22          These two causes of action were clearly throw-ins by Plaintiffs and were never
23   seriously argued. Plaintiffs’ Equal Protection claim had to fail as Plaintiffs did not even
24   allege that they were part of a protected class or that judicial review of the City’s action
25   would be subject to anything more than a rational basis analysis. As the Court held, in
26   order to succeed against that level of scrutiny, Plaintiffs had the burden of showing that
                                                   9
1    “there is no conceivable rational basis for the City’s action.” Id. at p. 3. Plaintiffs failed
2    to even try to carry that burden. With regard to the Special Legislation claim, the Court
3    did not even apply a constitutional analysis to the claim because the action in question
4    was not even a “law” as that term is used in the Constitution. Given the Goldwater
5    Institute’s litigation strategy with respect to these claims (assert them and refuse to
6    withdraw them even when it was clear they were without legal or factual basis), an award
7    of fees as to the City is clearly appropriate.
8           Plaintiffs placed virtually all of their effort in the claim that the Agreement violated
9    the Gift Clause. In that regard, Plaintiffs attempted to offer expert testimony and made
10   numerous arguments that the City gave value disproportionate to what it received. But as
11   the Court recognized, there are at least 5 separate benefits that the City reasonably
12   believed it would receive in exchange for the Agreement. Id. at p. 5. Moreover, the Court
13   held that “Plaintiffs offer no facts to dispute that the benefits the City anticipates receiving
14   from the Agreement will not be realized.” Id. at p. 6 (emphasis in the original). Further,
15   as the Court recognized, it is impossible for the consideration paid by the City to exceed
16   the value received by the public, “ much less far exceed it.” Id. at p. 7. The Court went so
17   far as to hold that even ignoring the non-monetary benefits received by the City under the
18   Agreement, the monetary value received by the public will “far exceed what the public
19   will pay.” Id. at p. 8.
20          Plaintiffs specifically did not challenge the disproportionality test established in
21   Wistuber.    However, as Plaintiffs have candidly admitted, their goal throughout this
22   litigation is to change the Wistuber test. The Goldwater Institute has gone so far as to say
23   that “[t]he test adopted in Wistuber was really no test at all.” Regifting the Gift Clause:
24   How the Arizona Constitution Can End Corporate Subsidies, p. 16, viewable at
25   http://www.goldwaterinstitute.org/common/files/multimedia/regifting%20the%20gift%20
26   clause.pdf. The Institute proposed three different ways to remedy what it sees as a weak
                                                      10
1    Gift Clause. One of those three ways was to file litigation challenging a government
2    transaction by calling it a subsidy. Id. at p. 24. That is precisely what the Goldwater
3    Institute did here. But in doing so, it did not challenge Wistuber nor allege that it created
4    an inappropriate test.
5           Without a challenge to the Wistuber test, and based on the Court’s finding that the
6    consideration paid by the public can never exceed the value received by the public,
7    Plaintiffs’ Gift Clause claim is likewise devoid of merit.             And, as set forth on the
8    Goldwater Institute’s website, the ultimate goal of Plaintiffs’ complaint was nothing short
9    of a reversal of long-established precedent in Arizona. A party that undertakes such a
10   political mission should be willing to pay the public cost of losing.
11                 E.     An award of fees is justified due to the manner in which Plaintiffs
                          litigated this case.
12
            An award of fees in favor of the City is justified here for the additional reason that,
13
     as discussed above, Plaintiffs unnecessarily expanded the scope and expense of this case.
14
     Plaintiffs, not the City initiated this action, and Plaintiffs then insisted on embarking on a
15
     litigation strategy that that resulted in unnecessary expense. Having chosen to do so,
16
     Plaintiffs should be required to bear the costs of their unsuccessful efforts, which costs
17
     would otherwise have to be borne by the City’s taxpayers.
18
                   F.         Wistuber does     not        foreclose   an   award   of   fees   under
19                            § 12-341.01(A).
20          In Wistuber v. Paradise Valley Unified School Dist., 141 Ariz. 346, 350, 687 P.2d
21   354, 358 (1984), the Court denied a request for attorneys’ fees under § 12-341.01, holding
22   that an award of fees would be “contrary to public policy in this case because it would
23   have a chilling effect on other parties who may wish to question the legitimacy of the
24   actions of public officials.” In so doing, however, the Court did not hold that an award of
25   fees would never be appropriate in a case seeking to invalidate actions of public officials.
26   Rather it held merely that in that case such an award would be inappropriate because of
                                                      11
1    the “chilling effect” that would accompany it. As discussed above, however, the “chilling
2    effect” which concerned the Wistuber court is completely lacking here. Moreover, in
3    Wistuber, the trial court declined to award fees, and the reviewing court merely held that
4    the trial court did not abuse its discretion in so doing. Accordingly, Wistuber does not
5    foreclose an award of fees where, as here, all of the factors relating to whether a court
6    should exercise its discretion to award fees militate strongly in favor of an award.
7           Moreover, it should be noted that appellate courts from numerous jurisdictions
8    have upheld an award of fees against citizen groups. In Gig Harbor Marina, Inc. v. City
9    of Gig Harbor, 973 P.2d 1081 (Wa. App. 1999) a property owner appealed an
10   administrative denial of a proposed development. The property owner lost and the city
11   was awarded its attorney fees.      The property owner appealed.       The property owner
12   claimed the fee award had a “potential ‘chilling effect.’” Id. at 1087. The Washington
13   Court of Appeals disagreed and affirmed the award of fees in favor of the city. Similarly,
14   in Schroeder v. Irvine City Council, 97 Cal. App. 4th 174, 118 Cal. Rptr. 2d 330 (2002)
15   the California Court of Appeals upheld an award of fees against a plaintiff who had
16   brought suit against a city. The case involved a claim that the city’s “get out the vote”
17   effort in 2000 was an illegal expenditure of public funds. The Court of Appeals upheld
18   the fee award, holding that the plaintiff failed to carry its burden of establishing a prima
19   facie case on each of his causes of action. Id. at 184.
20          4.     The Court Should Exercise its Discretion and Award a Reasonable Fee
21          The attached affidavit of counsel, with exhibits, sets forth the total amount of fees
22   incurred by the City for outside counsel. The fee request does not seek an award for the
23   time spent by members of the City Attorney’s Office for their work in this matter. See,
24   Lacer v. Navajo County, 141 Ariz. 392, 687 P.2d 400 (App. 1984) (describing test when
25   the County Attorney seeks an award of fees for its own internal representation of the
26   County). Nor does the City presume to tell the Court the amount of fees that should be
                                                  12
1    awarded. It is the City’s belief that all of the incurred fees were reasonable and
2    necessary due to the nature of the litigation and the way that the Goldwater Institute
3    proceeded in this matter.
4            The City was rightfully concerned about defending the validity of the Agreement.
5    As the Court recognized in its order, there are literally hundreds of millions if not more
6    than a billion dollars in anticipated sales tax revenue to be generated at CityNorth. The
7    City was properly concerned about losing that revenue to other neighboring communities
8    where competing developments were being proposed. This benefit is above and beyond
9    the other benefits of job creation, parking spaces, park-&-ride facilities and the other
10   urban core benefits described by the City in its papers and the Court in its ruling. For the
11   City to hire outside counsel to defend against this challenge is certainly reasonable.
12           The City reserves the right to supplement this request for time incurred in bringing
13   this fee claim.
14           5.     An Award of Costs is Mandatory Under A.R.S. § 12-341.
15           Finally, under A.R.S. §§ 12-332 and 12-341, the prevailing party is entitled to its
16   taxable costs. The award is mandatory. McEvoy v. Aerotek, Inc. 201 Ariz. 300, 34 P.3d
17   979 (App. 2001). The City has filed its Statement of Costs and Notice of Taxation of
18   Costs simultaneously herewith, totaling $2,040.54.         Additionally, Fennemore Craig
19   incurred $6,836.00 related to the performance of computerized research. An itemized list
20   of these expenses is included with Exhibit 1. The Arizona Supreme Court permits the
21   recovery of computerized research expenses as an element in an award of attorneys’ fees.
22   See Ahwatukee Custom Estates Management Ass’n, Inc. v. Bach, 193 Ariz. 401, 403, 973
23   P.2d 106, 108 (1999).
24   . . .
25   . . .
26   . . .
                                                  13
1          For the foregoing reasons, the City respectfully requests that the Court enter an
2    order awarding the City its attorneys’ fees, in an amount deemed reasonable by the Court.
3           DATED this 22nd day of April, 2008.
4                                                  CITY OF PHOENIX
5                                                  and
6                                                  FENNEMORE CRAIG, P.C.
7
8                                                  By /s/ Andrew M. Federhar
                                                     Timothy Berg
9                                                    Andrew M. Federhar
10
11                         of
     E-FILED and a COPYnd the foregoing
     hand-delivered this 22 day of April, 2008, to:
12
     Judge Robert Miles
13   Maricopa County Superior Court
     125 W. Washington, Suite 303
14   Phoenix, AZ 85003
15
     COPY of the foregoing emailed and
16   hand-delivered this 22nd day of April,
     2008, to:
17
     Clint Bolick
18   SCHARF-NORTON CENTER FOR
     CONSTITUTIONAL LITIGATION
19   GOLDWATER INSTITUTE
     500 E. Coronado Road
20   Phoenix, AZ 85004
     Attorney for Plaintiffs
21
     Lisa T. Hauser
22   Cameron C. Artigue
     GAMMAGE & BURNHAM
23   Two North Central Ave.
     18th Floor
24   Phoenix, AZ 85004
     Attorneys for CityNorth, LLC
25
26
                                                  14
1    Gregory W. Falls
     MOHR, HACKETT, PEDERSON, BLAKELY & RANDOLPH, P.C.
2    2800 N. Central Ave.
     Suite 1100
3    Phoenix, AZ 85004-6600
     Attorneys for Amicus Curie NFIB
4
5
     K. Thomas___________
6    PHX/2051268


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