The city and CityNorth, a massive mixed-use project in northeast
Judge Robert Miles, who two months ago ruled in favor of the city and CityNorth, said the attorneys failed to prove that Goldwater Institute acted in bad faith in the case.
The judge also denied a counterclaim by Goldwater against CityNorth attorney Lisa Hauser. Both Hauser and Clint Bolick, Goldwater's attorney, accused each other of behavior that merited legal sanctions.
Hauser argued that Goldwater was never up front about the intent of its lawsuit and that its attempts to rally public opinion constituted harassment.
Bolick argued that Hauser deliberately misstated the institute's arguments and that she called Bolick's integrity into question.
The judge determined that an award of fees beyond costs of about $4,000 would have a chilling effect on citizens' ability to challenge governmental actions.
"We're very pleased," said Bolick, who recruited six plaintiffs to the lawsuit. "In a certain sense, this issue is almost as important as the case itself."
Bolick said a fee award would have caused citizens to think twice about challenging government actions.
Hauser, meanwhile, said she still doubts Bolick's sincerity.
"This should have some interesting wrinkles on appeal," she said. City officials referred questions to City Attorney Gary Verburg, who was unavailable for comment.
With the question of fees set aside, the appeal will proceed in the Arizona Court of Appeals.
Bolick said he expects the initial legal documents to be filed later this month.