Blogs - Public Law Blog

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On April 8, 2015, the California Supreme Court heard oral argument on the California Building Industry Association challenge to San Jose’s inclusionary housing ordinance.   The ordinance required residential developments proposing 20 units or more to set aside 15% as below market units.  Alternate compliance methods were also allowed, such as dedications of land or in-lieu fees.  These requirements are pretty typical of many local inclusionary ordinances.  The trial court upheld the challenge, but the appellate court reversed and found for the City.  At the appellate level, the CBIA claimed that the inclusionary ordinance imposes an exaction on the developer, while the City claimed the ordinance was permissible as a land use regulation under its police power, needing only a reasonable relation to the public welfare. 

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On April 2, Governor Brown issued the third and most significant in a series of Executive Orders addressing the ongoing drought. They followed his 2014 proclamation of a State of Emergency resulting from drought conditions. The Executive Orders direct various state agencies to implement various actions. They also suspend laws and regulations, using the Governor’s statutory authority to do so where the law or regulation will hinder the State’s ability to cope with the emergency.

On March 30, a short opinion from California’s Second Appellate District raised a long list of unanswered questions in a case concerning a Regional Water Quality Control Board’s authority to develop a Total Maximum Daily Load (“TMDL”) for contaminated sediment.  (A TMDL is a regulation that calculates the maximum amount of a pollutant an impaired water body can receive and still meet water quality standards, and allocates the loading among the various sources of that pollutant.)  In

The well-established Pitchess motion procedure, codified in sections 1040-1047 of the Evidence Code, governs the manner in which peace officer personnel records may be produced to others.  Peace officer personnel records are subject to strong confidentiality protections, but are sometimes relevant to issues in criminal and civil court proceedings.  Those same records can also have relevance in peace officer discipline proceedings, but those proceedings are administrative and do not occur in the courts.

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The ongoing drought is pushing the development of government efforts to increase use of recycled water.  AB 2282 is the latest effort to plan for future recycled water use, by requiring recycled water systems in newly constructed buildings in certain circumstances.  During the 2016 Intervening Code Adoption Cycle, the Department of Housing and Community Development (HCD) must (1) research, and (2) submit for adoption mandatory building standards for the installation of recycled water systems for newly constructed single-family and multifamily residential buildings.  The California Building Standards Commission (BSC) is responsible for the same research and adoption of standards for commercial and public buildings.   (Health and Safety Code sections 17921.5 and 18940.6.) 

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On September 30, 2014, Governor Jerry Brown signed in to law Senate Bill 785 which, among other things, updates and rewrites the statutory law relating to design-build procurement for public projects throughout the State.  The new law goes in to effect on January 1, 2015.

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In its September 22nd decision, 926 North Ardmore Ave., LLC v. County of Los Angeles, the Court of Appeal determined that the sale of a partnership that owned a limited liability company that held title to real property was a “change of ownership” that triggered imposition of the county’s documentary transfer tax.  The county imposed the tax on the limited liability company, or “Ardmore.”

On September 30, 2014, Governor Brown signed into law a bill making California the first state in the nation to ban single-use plastic bags.  Consumers may either use their own reusable bags or pay at least ten cents for a paper bag or a multi-use plastic carrier that meets a set of state durability standards.  More than 100 California cities and counties have already passed regulations banning plastic bags.  (See list.)  These existing regulations may still be enforced, but the law preempts municipalities from adopting new regulations of single-use plastic bags, meaning those adopted on or after September 1, 2014, and restricts amendments to existing regulations.  Grocery stores, big bulk retail stores that sell groceries and pharmacies statewide must phase out the use of plastic bags by July 1, 2015.  The ban will expand to cover convenience stories and liquor stores one year later, on July 1, 2016.  

The Ninth Circuit recently issued two controversial opinions which uphold efforts to protect the delta smelt, a small fish endemic to the Sacramento-San Joaquin delta that is protected under the state and federal Endangered Species Acts, despite potential significant impacts on water deliveries to urban and agricultural areas.

In a decision published November 18, 2013, the California Court of Appeal, Fourth District, reversed the trial court’s determination that a school counselor and school district was immune from suit when a school counselor provided a copy of a report of suspected child abuse to the father.  The Court held that under the Child Abuse and Neglect Reporting Act (CANRA) a mandated reporter must keep the report of known or suspected child abuse confidential and  may only disclose the information to specific agencies and individuals identified in the statute – the parent of the child is not included.

It is a fundamental concept in litigation that the party seeking relief must have some real, beneficial interest in the outcome of the case.  A plaintiff cannot sue a city or other public entity simply because he or she does not like a certain policy or practice; the plaintiff must have standing to bring the lawsuit, which may either be conferred by law or because the plaintiff has suffered some sort direct or indirect harm. A February 3 published decision by the 1st District Court of Appeal clarifies this concept further, finding that neither a plaintiff’s status as a payer of sales tax in a given area—nor as a state citizen seeking redress for past government misconduct—meet the requirements for bringing such an action.

A federal judge has ruled that CalPERS may appeal to the Ninth Circuit a bankruptcy judge’s decision allowing the City of San Bernardino’s petition for Chapter 9 bankruptcy.  As we previously reported here, U.S. Bankruptcy Judge Meredith Jury ruled in August that San Bernardino is eligible for Chapter 9 bankruptcy protection.

In a recent decision, the Ninth Circuit held that the district court did not abuse its discretion in awarding the prevailing plaintiff $697,971.80 in attorneys’ fees where the jury awarded her only $27,280 in damages.  The clear message from the decision is that even relatively modest legal transgressions under the Fair Employment and Housing Act (“FEHA”) can result in a significant damage award against an employer.

The Associated Press is reporting that the American Civil Liberties Union (“ACLU”) filed suit against the Federal Housing Finance Agency (“FHFA”) alleging Freedom of Information Act violations, claiming the agency collaborated with the financial industry (banks) to block cities from using eminent domain to prevent foreclosures.   The ACLU and other groups requested information regarding and supporting FHFA’s decision to oppose the City of Richmond’s plan to seize land through eminent domain in order to prevent foreclosures.   The suit seeks an order directing the FHFA to turn over all documents related to communications and meetings with financial industry groups and banks,  including those relating to Richmond’s offer to buy underwater mortgages from residents.

CalPERS is the City of San Bernardino’s largest creditor, with the City owing the pension fund $17 million, plus growing interest, late fees and penalties. In August, U.S. Bankruptcy Judge Meredith Jury ruled that San Bernardino is eligible for Chapter 9 bankruptcy protection.  In November, Judge Jury denied without prejudice CalPERS first attempt to take a direct appeal from Judge Jury’s ruling. On Friday, November 15, 2013, Judge Jury rejected a second CalPERS motion for leave to file a direct appeal to the Ninth Circuit. Under the Federal Rules of Bankruptcy Procedure, a party must seek leave to appeal an interlocutory eligibility determination to a federal appeals court. See FRBP 8001(b). Judge Jury’s decision isn’t the end of the road for CalPERS; it can still ask a U.S. District Court judge to review the bankruptcy court’s eligibility ruling, which the Sacramento Bee reports it has already done.

Irvington, New Jersey, is moving forward with plans to become the second municipality in the nation to use eminent domain to buy mortgages that are in foreclosure (see November 15 New York Times story).  Irvington will be performing a legal study of the proposal.  Since 2008, nearly 1,800 homes have been foreclosed in the city of 53,000.  It has an unemployment rate of 12.4 percent.  Even the New Jersey chapter of the ACLU backs the Irvington plan. 

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In a case that local governments are watching closely because of the impact it could have on the practice of opening city council meetings with prayer, the U.S. Supreme Court will hear arguments tomorrow in Town of Greece v. Galloway. The matter involves the town of Greece, New York, where two citizens challenged the town council’s years-long practice of beginning its monthly meetings with prayers that were almost exclusively Christian. The practical effect has been to endorse Christianity as the town’s religion—a violation of the Constitution’s Establishment Clause, the citizens argue. The town contends that its practice has been sound; its brief to the Supreme Court leans heavily on the Supreme Court’s decision 30 years ago in Marsh v. Chambers, which found that the state of Nebraska had not violated the Constitution by employing a Presbyterian minister for 16 years to lead the legislature in prayer. Meyers Nave presented on this issue at last month’s annual International Municipal Lawyers Association conference and will be monitoring tomorrow’s arguments and providing analysis when the Court hands down its decision (due by June 2014). On Friday, a complete audio recording of tomorrow’s arguments will be available here.

In October, Governor Jerry Brown capped off this year's legislative session by signing or vetoing the remaining bills on his desk.  The following is a brief summary of the most notable labor and employment related bills from the past session relevant to public agencies:

In a procedural vote, the U.S. Senate has advanced the Employment Non-Discrimination Act to a full floor vote, which is expected to take place in the coming days. The Act would prohibit all employers (including public agencies) from using sexual orientation or gender identity as a basis for employment decisions.  Federal law already prohibits discrimination based on race, gender, religion, national origin, age and disability. The bill is far from certain to become law, as the Republican majority in the House continues to be skeptical about the bill, concerned it will spur unnecessary litigation and result in costs for small businesses.

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Two new California laws will become effective on January 1, 2014, which will make it easier for cities, counties, and other government agencies to promote the use of rubber tires in two different ways:

The IRS has announced new rules that give employers the option of allowing employees to carry over up to $500 worth of unused contributions remaining in their health flexible spending accounts (FSAs) at the end of each year.  The change is significant because previously, employees were prohibited from carrying over any leftover amounts---with the exception that employers could allow a grace period of up to two and a half months during which employees could use leftover funds. 

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Existing law under the Subletting and Subcontracting Fair Practices Act requires prime contractors bidding public construction projects to list the names and locations of each subcontractor performing work for a public works project.  The statute calls for contractors to identify each subcontractor performing more than one-half of one percent of the contractor’s total bid, or $10,000, whichever is greater.  (Public Contract Code Section 4104).

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Existing law under the Subletting and Subcontracting Fair Practices Act requires prime contractors bidding public construction projects to list the names and locations of each subcontractor performing work for a public works project.  The statute calls for contractors to identify each subcontractor performing more than one-half of one percent of the contractor’s total bid, or $10,000, whichever is greater.  (Public Contract Code Section 4104).

The Sacramento Bee reports here that Gov. Jerry Brown has named Stuart Drown to serve as deputy secretary at the new California Government Operations Agency. Mr. Drown is leaving his post as executive director of the Little Hoover Commission, where he has been an advocate for pension reform. The Bee story notes that the 12-member Little Hoover panel issued a report in February 2011 that San Jose Mayor Chuck Reed now cites as inspiration for the public pension reform initiative he (along with San Bernardino Mayor Patrick Morris, Pacific Grove Mayor William Kampe, and Anaheim Mayor Tom Tait) is trying to put on the November 2014 statewide ballot (details in our recent pension reform roundup).

Good news for California public employers out of the U.S. Supreme Court today: the high court officially kicked the age bias case of Madigan v. Levin to the curb, dismissing the matter in a per curiam decision as improvidently granted. The bottom line for California public employers is that the rule in the U.S. Court of Appeals for the Ninth Circuit under Ahlmeyer v. Nev. Sys. of Higher Educ., 555 F.3d 1051, 1057 (9th Cir. 2009) remains in effect: the Age Discrimination in Employment Act (ADEA) is the exclusive remedy in federal courts for age discrimination claims against state and municipal employers, precluding equal protection claims under 42 U.S.C. § 1983.

On September 11, 2013, the Richmond City Council voted 4-3 to move forward with a controversial plan to aid underwater homeowners by purchasing their mortgages at their current market value and reselling them to homeowners at reduced prices and mortgage payments through the power of eminent domain.  Richmond is the first city to pursue this strategy (San Bernardino considered using it and decided not to).   Richmond recently voted to make offers to buy underwater mortgages, if lenders refuse, the city will take them by eminent domain and worked with a group of friendly investors (Mortage Resolution Partners, or MRP) to refinance the loans with the Federal Housing Administration. 

Governor Brown signed today Assembly Bill 265, amending the Government Claims Act to provide clear and unambiguous immunity for public agencies owning or operating dog parks.

On July 23, 2013, the First District of the California Court of Appeal held that police officer identities and ranks in investigative reports unrelated to discipline or personnel actions are discoverable under the Public Records Act. 

In Federated University Police Officers Association v. Superior Court, several news outlets sought to discover an investigative report authored by a consultant to the University of California regarding the use of pepper spray by campus police during student protests at UC Davis in 2011.  14 officers were ordered by their chief to participate in interviews for the report, and were advised that information provided to the consultant would not be used in any disciplinary proceeding.  No officers who were the target of citizen complaints or internal affairs investigations were interviewed.  The report did not recommend discipline of any officer, and was directed at UC Davis administration-level decision-making.  A related task force report concluded that several officers performed improperly, but did not recommend discipline.  These reports were ultimately released to the news outlets with name and rank of involved officers redacted.

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On June 3, 2013, in the case of Brisbane Lodging, L.P. v. Webcor Builders, Inc., et al. (No. A132555), the California Court of Appeals set new precedent by affirming a lower court ruling upholding the enforcement of a contract provision which abrogated the “delayed discovery rule” by providing that all causes of action relating to work on the contract would accrue from the date of substantial completion. This is the first time in the history of the State that a California Court has done so.

Mortgage Resolution Partners’ one year agreement (with automatic renewals) to provide the City of Pomona with identifying and obtaining proposals from institutions that can lend funds to the city for restricting/refinancing programs; providing legal counsel and research to assess and implement assistance and mortgage acquisition programs; and creating criteria to be used in identifying mortgages that might benefit from relief programs was approved by the City Council  earlier this month.

AB 440 (Gatto) would allow cities, counties and housing authorities to compel cleanup of contaminated properties in their jurisdiction, similar authority to the Polanco Redevelopment Act.  The process would be akin to a nuisance action in that the public entity would give the responsible parties notice and an opportunity to clean up.  If the responsible parties do not respond or do not clean up the property after receiving notice, the public entity may prepare a cleanup plan for approval by an environmental regulatory agency, clean up the property (regardless of whether it owns the property) and sue for the entire cost of cleanup including attorneys’ fees and staff time. On April 16, 2013, AB 440 passed out of the Assembly Environmental and Toxics Committee with significant city support.  On May 1, 2013, the bill will be heard in the Local Government Committee. 

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On April 16, 2013, in the case of Associated General Contractors of America, San Diego Chapter, Inc. v. California Department of Transportation et al. (No. 11-16228), the Ninth Circuit Court of Appeals affirmed a district court ruling upholding the constitutionality of the 2009 Caltrans Disadvantaged Business Enterprise (DBE) program that provides race and sex based preferences to African American-, Asian American-, Native American-, and women-owned firms on certain transportation contracts.  Plaintiffs, the Associated General Contractors of America, San Diego Chapter, Inc., challenged the program as an unconstitutional affirmative action program that fails to meet the constitutional standard of strict scrutiny.  The Ninth Circuit disagreed, finding that the program survives strict scrutiny by having a strong basis in evidence of discrimination within the California transportation contracting industry, and in being narrowly tailored to benefit only those groups that have actually suffered discrimination.

The generally accepted rule has been a public entity must comply with CEQA prior to adopting a resolution of necessity to condemn land needed for a public project.  Last Friday, a California Court of Appeal decision reviewing the California Environmental Quality Act (“CEQA”), Public Resources Code section 21168.9(a), upheld a trial court’s writ decision not to set aside an adopted resolution of necessity in its entirety when it found non-compliance with CEQA and instead allowed the eminent domain action to proceed before CEQA review was completed. 

In the decision Golden Gate Land Holdings, LLC v. East Bay Regional Park District (2013 Cal.App. LEXIS 283, April 12, 2013), the merits of the trial court’s ruling on CEQA project approval was not before the appellate court and its review of the District’s compliance with eminent domain law was not certified for publication.  The trial court held that the District had not complied with CEQA and that further CEQA review was required, but it did not vacate the District’s adopted Resolution of Necessity in its entirety.  Golden Gate’s limited argument on appeal was that the trial court erred in refusing to set aside the resolution of necessity because CEQA compliance after the approval of a resolution of necessity is unlawful. 

In a climate where many employers are strongly considering pension reform, Major League Baseball’s owners may eliminate defined benefit pension plans for non-uniform wearing personnel (all employees besides players and coaches).  The move is being proposed, and apparently supported by the majority of owners, despite the fact that the league brings in billions of dollars in annual revenues.  This proposed change serves as a reminder that profitability alone will not guarantee the continuation of defined benefit plans for an entity’s employees.

For more on MLB’s plans, go here.

On Monday, the U.S. Supreme Court agreed to review the process by which the federal government measures the environmental impact of its land use plans, granting the U.S. Forest Service's appeal of a controversial Ninth Circuit decision which found a forest plan deficient for failing to analyze its impact on area fish species.  (See United States Forest Service et al. v. Pacific Rivers Council et al., 689 F.3d 1012 (2012), cert. granted and motion granted 2013 U.S. LEXIS 2177 (U.S., Mar. 18, 2013).)  The Forest Service argued that it had been held to an unfair standard because a broad programmatic environmental impact statement conducted for the proposed changes covering 11.5 million acres near the Sierra Nevada isn't required to go into as detailed an analysis as a study tied to a specific project..  The Forest Service also asserted that requiring such detailed analysis for a programmatic environmental document would increase compliance costs and slow the review process. 

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A 9th Circuit panel has found that the Libertarian Party of Los Angeles County and two signature gatherers had standing to challenge the Elections Code requirement that signature gatherers must be voters in the political subdivision as the candidate.  Libertarian Party v. Bowen (March 6, 2013)

The Fourth Circuit Court of Appeals has vacated the National Marine Fisheries Service’s (“NMFS”) 482 page biological opinion finding that the EPA’s proposed process for reregistration of pesticides would jeopardize the continued existence of 27 species of Pacific salmonids.  See Dow Agrosciences LLC v. National Marine Fisheries Service, 2013 U.S. App. LEXIS 3650 (4thCir.

The Federal Circuit Court of Appeals has upheld a decision from the Court of Federal Claims finding that appropriative water rights in California are property interests only to the extent the water is put to beneficial use.  See Casitas Municipal Water District v. United States, Court of Appeals Case No. 2012-5033 (Fed. Cir. 2013).  Casitas Municipal Water District claimed that the National Marine Fisheries service had forced it to build a fish ladder and divert flows from the Ventura River for the benefit of the endangered Southern California Steelhead, which resulted in a taking of its water right.  The District has a license from the State Water Resources Control Board allowing it to divert a maximum of 107,800 acre feet per year for storage and authorizing it to use 28,000 acre feet per year for beneficial use.  The court explained that storage itself is not a beneficial use under California law, so there can be no taking unless and until diversions for the endangered fish result in an impact to the District’s maximum allowable water deliveries of 28,500 acre feet per year. 

The Ninth Circuit has reversed the District Court's dismissal of a lawsuit brought by retired employees against their former employer seeking to avoid the reduction of retiree healthcare benefits.

In Sonoma County Ass'n of Retired Employees v. Sonoma County, No. 10-17873 (9th Cir. Feb. 25, 2013), the Ninth Circuit cited and relied on the California Supreme Court's recent holding that a public agency may form a contract with implied terms with its employees under specified circumstances.  (See Retired Employees Ass'n of Orange Cnty., Inc. v. Cnty. of Orange (REAOC II), 52 Cal. 4th 1171, 1176 (2011).)

The Ninth Circuit Court of Appeals has held that the Sea Shepherd Conservation Society committed acts of piracy when it attacked Japanese vessels engaged in legal whaling under the auspices of a research permit issued by Japan.  Sea Shepherd vessels rammed the vessels of the Institute of Cetacean Research, hurled glass containers of acid, dragged metal reinforced ropes through the water to damage rudders and propellers, launched smoke bombs and flares with hooks and pointed high powered lasers at the ships, with the intent to damage and sink the vessels.  The court found that these acts of piracy violated several international agreements regarding conduct on the high seas and issued a permanent injunction against Sea Shepherd.  See Institute for Cetacean Research v. Sea Shepherd Conservation Society, United States Court of Appeals No. 12-35266 (9thCir. 2013).

The law regarding sign regulations is a murky, fact specific and dynamic area and the latest Ninth Circuit decision, Reed v. Town of Gilbert, Arizona (Reed II), 2013 U.S. App. LEXIS 2715 (9thCir. 2013), does not disappoint.  On a previous appeal in the same case, Reed v. Town of Gilbert, Arizona (Reed I), 587 F.3d 966 (9thCir. 2009), the Court of Appeal upheld the Town’s sign ordinance against a variety of constitutional challenges raised by plaintiffs Clyde Reed and the Good News Community Church, but remanded for the district court to consider whether the ordinance’s treatment of different categories of non-commercial speech was an improper content-based restriction.  The Court warned that municipalities may distinguish between the relative value of different categories of commercial speech, but do not have the same latitude with regard to non-commercial speech, citing Metromedia v. City of San Diego, 453 U.S. 490 (1981).

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In a decision addressing changes to the California Constitution approved by Proposition 26 (2010), the Second District Court of Appeal ruled on February 21, 2013 that a 10-cent per bag charge for recyclable paper bags, as part of a comprehensive plan to limit the use of “single-use” or “disposable” bags, is not a tax that requires voter approval.

Under the definition added by Proposition 26, a local tax requiring voter approval means “any levy, charge, or exaction of any kind imposed by a local government,” subject to seven exceptions.

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The California Supreme Court has unanimously decided to accept review of Tuolumne Jobs & Small Business Alliance v. Superior Court. The plaintiff alleges that the City of Sonora violated CEQA when it adopted a voter-sponsored initiative as an ordinance to approve expansion of a Wal-Mart into a 24-hour "supercenter" without submitting the measure to a popular vote and without completing environmental review. 

On February 4, 2013, the U.S. Fish and Wildlife Service (USFWS) issued a proposed rule to designate the U.S. populations of the wolverine, known as the “mountain devil,” as a threatened species under the Endangered Species Act.  A key factor leading to the proposed listing is the loss of habitat due to climate change; however, the USFWS is only proposing prohibitions on trapping and killing the animals, not the regulation of activitiesthat may berelatedto climate change. 

The wolverine is a ferocious and tenacious predator.  Once found in the Sierra Nevada range in California, the population is believed to have been extirpated in the early 1900’s as part of a widespread pest eradication campaign.  The USFWS is not proposing the designation of critical habitat at this time, but it is looking at restoring populations within the historic range of the animal, including the Sierra Nevada range, as a possible option to help the population recover. 

A lawsuit filed by a nudist group challenging an ordinance that bans exposing genitals was dismissed today by a Federal judge who said requiring people to wear at least some clothing does not violate the First Amendment or Free Speech.  U.S. District Judge Edward Chen wrote ”Nudity is not inherently expressive.”  Violations of the ban are punishable by fines up to $100.  Chen noted that the U.S.

California public transit unions are supporting Assembly Bill 160 which would exempt their members from the recently-adopted Public Employees’ Pension Reform Act (PEPRA). Under the bill, introduced by Assemblyman Luis Alejo on January 22nd,  thousands of transit employees would be exempt from the PEPRA.  PEPRA became law in September 2012.  It requires increased cost-sharing of pension contributions and reduced pension benefit formulas for new members hired on or after January 1, 2013 (and provides for some changes for existing members, which are not scheduled to take effect  until 2018).

Late last week, the County of San Bernardino and two of its cities abandoned a proposal to use eminent domain (the power to condemn) to seize troubled mortgages and write down debt for homeowners.  San Bernardino was among the hardest hit by the housing bust with tens of thousands of homeowners in underwater mortgages.  The decision strikes a blow to an idea that garnered national attention as a potential, if controversial and some argue unconstitutional, solution to the mortgage crisis.  Criticism of the plan came from the mortgage industry, Wall Street groups and bankers, who argued that it would spark lawsuits, higher interest rates and a tightened market for borrowers.  Eminent domain is used to seize land for public projects and public use – such as roads, utilities and transit systems.  The San Bernardino County effort would have been the first widespread attempt at using eminent domain to seize residential mortgages.   The City of Chicago rejected a similar idea last year.  The idea was proposed by the firm of Mortgage Resolution Partners in San Francisco.  The group is still talking with more than 30 other jurisdictions across the country.  Representatives of homeowners in need were disappointed in the County’s decision noting a creative solution to the mortgage crisis must be found soon.        

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Beginning this year, it should be easier for public agencies to recover costs incurred in complying with subpoenas.  Effective January 1st, AB 2612 increased the subpoena deposit amount from $150 to $275 per day for peace officers and firefighters, as well as for state, trial court, and county employees.   Although a public agency is legally entitled to recoup the full costs incurred in making employees available in response to subpoenas, sometimes the agency cannot collect the balance of the costs without expending significant staff time.  The deposit amount had not been increased since 1986. 

AB 2612 amends Government Code section 68097.2 .  You can see the final version of the bill here.

San Diego Mayor Bob Filner has ordered the City Attorney to stop prosecuting a dozen pending cases against medical marijuana dispensaries, and for the city to temporarily halt any prosecutions until new regulations are put in place.  Filner made public his support for the use of medical marijuana during his election campaign.  His directive only impacts code enforcement, and does not affect cases brought by the San Diego County District Attorney’s Office or by federal authorities.  For more information, click here.

A recent challenge to broad policies regulating leafleting at the municipal library of the City of Redding saw a number of those policies struck down on First Amendment grounds.  In response to leafleting activity at the library, the library established a number of controls over leafleting.  The library designated a “free speech area” near the front entrance where leafleting could occur; prohibited all leafleting in the library parking lot; prohibited all leafleting involving solicitation of funds; required leafleting reservations at least 72 hours in advance; and prohibited any “offensively coarse utterance, gesture, or display, or… abusive language toward another person.”

The Supreme Court of the United States reversed and remanded Arkansas Game and Fish Commission v. United States (568 U.S. ____ (2012)) finding that government induced flooding temporary in duration gains no automatic exemption from the Takings Clause.  The Court explained that takings claims turn on situation-specific factual inquiries.  Takings temporary in duration can be compensable. However, because the Federal Circuit Court rested its decision entirely on the temporary duration of the flooding, it did not address the other challenges to the trial court’s fact findings including causation, foreseeability, substantiality and the amount of damages.  These issues remain open for consideration on remand.  

On October 3, 2012, the Supreme Court of the United States heard oral arguments in a case whose outcome may change federal takings and the just compensation owed property owners subjected to a temporary physical taking by the government.  In Arkansas Fish & Game Commission v. United States (No. 11-597), the court is considering whether the temporary but reoccurring downstream flooding events, caused from periodic dam releases by the Army Corps of Engineers over a period of six years, constitutes a “taking” of property warranting payment of just compensation.  

The California Public Records Act (CPRA) contains an exemption from disclosure for records pertaining to pending litigation.  This exemption has been construed narrowly, so that it applies only to documents prepared for use in litigation.  Other records that relate to a pending case, even if they are created only as a result of a pending case, are subject to disclosure unless another exemption applies.

The scope of the CPRA’s pending litigation exemption was clarified in the recent case of County of Los Angeles v. Superior Court of Los Angeles CountyThe County of Los Angeles claimed that all invoices, time records, and records of payment to law firms in a case currently in litigation were exempt from disclosure under the pending litigation exemption.  The Court of Appeal rejected this claim and clarified that attorney billing records pertaining to ongoing litigation are not protected by the pending litigation exemption.

In 2007, responding to the backlash against the Supreme Court decision (KELO v. City of New London) allowing the government to use the power of eminent domain for economic development, Virginia passed a law restricting that power. On Tuesday, the State of Virginia went even further and passed a state constitutional amendment that requires the government to compensate landowners and business owners not only for the value of condemned property, but for lost benefits and lost access to their property. Opponents of the amendment believe the amendment is an overreaction to Kelo and fear that the new law will open up a Pandora's Box of litigation that leaves taxpayers footing the bill for claims of "lost profits" arising from street widenings to street closures during parades and festivals. Proponents of the law agree that "lost profits and lost access" could end up making roads and other projects more expensive to build.

As of June 2012, 44 states have enacted some type of reform legislation in response to the Kelo decision, according to the National Conference of State Legislators. Of those states, 22 passed laws that severely inhibited the takings allowed by the Kelo decision, while many enacted laws that placed some limits on the power of municipalities to invoke eminent domain for economic development. In 2008, California passed Proposition 99 adding a constitutional amendment which basically set forth existing state law that public entities could not condemn private property that is owner-occupied to transfer to a private person/developer (except under specific circumstances such as an emergency).

In a recent inverse condemnation action, the owner of a “wallscape”[a billboard sign on the side of a building], West Washington Properties, LLC, argued that the California Department of Transportation (“Caltrans”) was barred from enforcing the Outdoor Advertising Act (Business and Professions Code section 5200, and following) (“the Act”), because it had not issued a notice of violation of the Act in the 20 years the sign had been on display on the building.  The lower court rejected these arguments and the court of appeal affirmed.   (See, West Washington Properties, LLC v. California DOT (Oct. 10, 2012) Cal.App.4th, No. B233295)

The wallscape had been on display since 1984 without a permit.  West Washington Properties purchased the building in 1999 in part based upon the over $12,000,000 the sign was valued to be worth over the years of future advertising.  In 2006, a Caltrans field inspector took note of the sign and determined it violated the Act because it required, but did not have, a permit and it was too large given its proximity to the interstate. West Washington argued that Caltrans was barred from issuing the violation or requiring a permit because it had been over five years since the sign was erected and therefore the sign was presumed to be legal and on the grounds of equitable estoppel [reliance on lack of permit].  

The Pitchess procedure allows for the discovery of confidential personnel records of peace officers in specific circumstances.  These records can be disclosed only where they are material to the subject matter of pending litigation, and only after an in camera inspection of the records by a court prior to disclosure.  Typically, Pitchess motions – which are usually made by criminal defendants – occur in the courts.  Under existing case law, Pitchess discovery cannot be used in certain administrative hearings, particularly where the records are not relevant to the issues in the hearing.  Many assumed that Pitchess discovery could not be used in any administrative proceeding.

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Public entities, businesses, and anyone else regulated by the State and Regional Water Boards have something new to cheer about: ex parte communications are now allowed in specified adjudicatory proceedings.  Governor Brown recently signed SB 965 into law, which allows interested persons to communicate with members of the water board while one of the following actions is pending: adoption, modification, or rescission of (1) state waste discharge requirements and federal NPDES permits, (2) conditional waivers of waste discharge requirements, and (3) conditions of water quality certifications.  However, the boards can choose to block further ex parte communications beginning 14 days before the proceeding occurs. Existing law prohibited all such communications at any time while an adjudication was pending before the boards.

There is one big catch, however. 

California cities are often faced with claims arising from automobile, motorcycle, bicycle, and pedestrian accidents.  Many times, these claims focus on supposed faults in lighting, signals, signs, crosswalks or road grades.  The recent California Court of Appeal decision of Mixon v. Pacific Gas & Electric Company rejected exactly these sorts of claims.  The court explained that simply because, in hindsight, a roadway or intersection could possibly be made even safer does not mean that it constitutes a dangerous condition.  The opinion provides useful guidance to cities and reaffirms that minor risks of injury or conditions of the roadway that do not actually contribute to an accident are not dangerous conditions of public property. 

Environmental groups may have developed a way to repurpose a legal theory traditionally implemented to protect water resources, the “public trust doctrine,” to push forward legal measures to combat climate change and reduce greenhouse gas emissions. 

Attorney Authors: 

The last minute scramble for a CEQA reform bill has ended for this legislative session.  Senate President Pro Tem Steinberg said the Senate would not take up the bill before the current session ends next week.  The bill’s author Senator Rubio acquiesced.  However, the proposed reform is deferred, not dead.  The bill will be made public and is expected to be formally introduced in the next legislative session.  There is a coalescing of interests to support significantly amending CEQA to prevent what are seen as obstacles to development through delays and litigation.  So, although the mad dash for immediate passage has abated, this issue will be prominently debated in the future.  It appears a big legislative battle is looming on the future of CEQA.  It is a long-standing issue whose time may have finally come.

Attorney Authors: 

A business and labor coalition group is proposing a new law to significantly reform CEQA before the current State Legislative session ends next week.  The terms of the bill are expected to be made part of SB 317 (an unrelated bill) through what is called a “gut and amend” process.  Although the proposed law may be further amended, the draft focuses on the following: (1) limiting analysis of environmental impacts in CEQA documents to compliance with State and Federal environmental regulations; (2) limiting mitigation measures to requirements under existing law; and (3) prohibiting certain types of legal challenges to CEQA environmental documents.  Overall, the bill would significantly narrow the scope of environmental impacts analyzed  and the mitigation measures available to address impacts.  The proposal also would restrict the types of legal challenges that can be made to CEQA documents.  An initial draft of the proposal has been posted online

Some newspaper editorials have criticized the proposal as an end of the session rush job and have urged the Legislature to follow a procedure that would allow more review and debate.  Last year, the Legislature passed some CEQA reform bills formulated at the very end of the session relating to new exemptions and the Los Angeles football stadium proposal.  We will see what happens this year.

A California Court of Appeal just upheld a 2010 City of Santa Cruz ordinance which calls for annual inspections of all residential rental properties within City limits.  (See, Harold Griffith v. City of Santa Cruz, July 16, 2012, 12 C.D.O.S. 8036.)  Under the ordinance, residential rental units that are not owner-occupied are subject to an annual inspection by City staff; annual registration and annual fee per unit.  (SCMC, section 21.06.010 et seq.)   Griffith filed a writ of mandate seeking to invalidate the ordinance on numerous grounds including:  that it was preempted by the State Housing Law and violated the 4thAmendment Right to Privacy; Equal Protection and,  Proposition 218  - because the “fee” was really a “tax” that had not been voted on by the property owners.

Attorney Authors: 

What is intangible harm to the environment worth?  That is the question that will now be asked of juries as a result of the Ninth Circuit Court of Appeals’ recent opinion in United States v. CB&I Constructors, Inc.

In CB&I Constructors, a jury awarded $28.8 million for damages caused by the Copper Fire of 2002, which burned roughly 18,000 acres of forest and destroyed nearly all of the vegetation, harmed wildlife, and impacted scenic views and recreational use.  At trial, the United States’ expert witnesses testified about the intangible harm to the environment, but did not quantify the harm.  The defendant appealed the jury award as grossly excessive, arguing that intangible noneconomic damages are not compensable in tort suits alleging harm to property.  In upholding the award, the Court explained that “California embraces broad theories of tort liability that enable plaintiffs to recover full compensation for all the harms that they suffer.  Under California law, the government may recover intangible environmental damages because anything less would not compensate the public for all of the harm caused by the fire.”

Intangible environmental harm is not easily calculated.  Therefore, a jury’s subjective evaluation of the damages will continue to drive the dollars behind what’s reasonable compensation for the harm. 

Attorney Authors: 

The State Water Board has released two new drafts of general storm water NPDES permits this summer.  

The new draft General Permit for the Discharge of Storm Water Associated with Industrial Activities is a substantial change from the draft released in January 2011.  It has notably removed numeric effluent limitations, largely due to the difficulty of developing technology-based limits for all industrial sectors, but still includes numeric action levels.  In addition, it implements new cost-saving measures for sampling and monitoring. Public comment will be accepted on the draft permit until noon on September 21, 2012, and the State Water Board will hold a public hearing on October 17, 2012 in Sacramento.  

The State Water Board also issued a new draft of its Phase II General Permit for Small Municipal Separate Storm Sewer Systems (MS4s).  Although the deadline for written comments has now passed, the public can still attend a public hearing on August 8, 2012 in Sacramento and provide oral comment. 

In the latest round of the much larger legal battle over the impacts of water projects on protected fish in the California Delta, the Ninth Circuit Court of Appeals, in a 2 to 1 decision, rejected a challenge brought by the Natural Resources Defense Council (“NRDC”) to the renewal of 41 long-term Central Valley Project  water contracts by the Bureau of Reclamation (“Bureau”).  See NRDC v. Salazar, 2012 U.S. App. LEXIS 14614 (2012).  The NRDC had argued that the renewal of the contracts would violate the Endangered Species Act (“ESA”) because the water deliveries under the contracts would harm the delta smelt, a small fish endemic to the Sacramento-San Joaquin delta that is listed as endangered under the ESA.  The Court concluded that the NRDC did not have standing, or legal authority, to challenge the two types of contracts because 1) the Bureau had no discretion over the renewal of the Settlement Contracts, so the protections of the ESA were not implicated by those renewals and 2) plaintiffs failed to establish a causal connection between the alleged injury, harm to the delta smelt, and the Bureau’s action in renewing the Delta-Mendota Canal contracts because these contracts contained a shortage provision authorizing the Bureau to take any actions necessary to meet its obligations under ESA, including curtailing water deliveries.

Earlier in June, Governor Brown’s office proposed new legislation that would restrict the ability of opponents to California’s $69 billion high-speed rail project to stop the project through CEQA litigation, in addition to other CEQA changes.   The proposal would require the courts to consider additional employment and economic factors in weighing whether to grant an injunction halting construction of the project.  Absent a finding that the value of the Project’s potential environmental damage would exceed the potential loss of more than $2 billion in federal funds secured for the project, judges would be prohibited from enjoining construction.  The proposal would also ease other CEQA rules for the project.  Several groups and municipalities have already filed suit in the Central Valley challenging the Project (some to stop the project, others to realign the project into their city).  Currently, the proposal is included in a trailer bill which has yet to be included in the Governor’s draft budget, but has been circulated among environmental groups and others.  Not surprisingly, these environmental groups have expressed vehement opposition to the proposal.  Its fate remains to be seen.

The Supreme Court has voted unanimously to grant review of the First District Court of Appeal's controversial decision in Berkeley Hillside Preservation v. City of Berkeley (2012) 203 Cal.App.4th 656. The case involved the application of an exception to the use of categorical exemptions under CEQA for projects that could result in significant environmental impacts due to "unusual circumstances."  The First District held that because a "fair argument" could be made that a residential project in the Berkeley hills could create significant environmental impacts based on evidence submitted by the project's opponents, the City of Berkeley could not rely upon a categorical exemption under CEQA regardless of whether those impacts were in fact due to "unusual circumstances."  This holding cast substantial doubt on the ability of agencies to continue to rely upon categorical exemptions any time a project opponent submits evidence of potentially significant impacts.  The First District also ignored well-settled precedent which requires both a finding that there is a reasonable possibility of significant environmental impacts and that the impacts would be due to unusual circumstances associated with the project. Now that the Supreme Court has granted review, the decision has been superseded which should come as welcome news for both public agencies and private developers alike.

Amrit Kulkarni and Julia Bond of Meyers Nave represent the Real Party in Interest in this case and were responsible for drafting the successful petition for review.

Attorney Authors: 

The California Environmental Quality Act ("CEQA") imposes very short time limits – some as short as 30 days – to commence litigation to challenge environmental review.  Parties in CEQA disputes frequently rely upon tolling agreements to put costly litigation "on hold" while they pursue settlement.  Until now, no court had ever ruled on whether such tolling agreements are permissible under CEQA.  In Salmon Protection and Watershed Network v. County of Marin (2012) __ Cal.App.4th __ (April 20, 2012), the First District Court of Appeal decided that question in the affirmative.

In Salmon Protection, a non-profit environmental group (whose acronym, "SPAWN," is a colorful addition to the roster of cleverly named CEQA plaintiffs) filed a petition for writ of mandate challenging an EIR prepared by the County of Marin for a general plan update that the County had certified in 2007.  The suit was filed in 2010, long after expiration of the normally applicable statute of limitations, due to a series of tolling agreements entered into by the parties while settlement negotiations were ongoing.  Concerned about the risk of a possible injunction, a local group of property owners filed a complaint in intervention and requested that the court dismiss the lawsuit as untimely based on the (novel) argument that CEQA's statute of limitations are mandatory and jurisdictional, and that the tolling agreements were therefore illegal and without effect. Alternatively, the property owners argued that Government Code section 65009, which imposes similarly short statute of limitations periods for challenges under the State Planning and Zoning Law, precluded the parties from agreeing to toll the limitations periods.   The Court of Appeal disagreed.  Finding that tolling agreements further important public policies and are not contrary to CEQA, the Court concluded that the tolling agreements at issue were valid and effective.  Click here to read the full opinion.

The decision should come as a relief to public agencies and others throughout the State.  Although few doubted the ultimate outcome, the case was sufficiently contentious to warrant amici briefs from the California League of Cities, the Sierra Club, the California Building Industry Association, and others. 

This month, Maryland became the first state to pass a law that prohibits an employer from requesting or requiring job applicants to hand over username and passwords for social media websites, such as Facebook and Twitter.

Maryland passed Senate Bill 433 and House Bill 964, which forbid employers from 1) requesting or requiring a job applicant to disclose user names or passwords for a personal electronic service; 2) refusing to hire an applicant for not providing access to such information; and 3) terminating or disciplining an employee for refusing to provide this information. However, the law also protects employers by prohibiting employees from downloading employer proprietary information to personal accounts and allowing employers to require that employees provide password and login information for company email accounts.

The law takes effect October 1, 2012, and may be found here.

On November 21, 2008, a citation was issued charging defendant Steven Gray with violating Vehicle Code section 21453, subdivision (a) for failing to stop for a red signal at the intersection of Washington Boulevard and Helms Avenue in Culver City.  An Automatic Traffic Enforcement System (ATES) recorded the violation.  Gray was arraigned and pleaded not guilty.  The defense made a pre-trial motion to dismiss based on Culver City’s alleged failure to provide the 30-day warning notice period and public announcement requirements of Vehicle Code section 21455.5, subdivision (b) before ATES equipment was installed at Washington Boulevard and Helms Avenue.  Culver City stipulated that “Culver City has only conducted such warning notices and public announcements prior to the commencement of the entire program in Culver City in 1998, and that no such notices or announcements were done specifically for the intersection (at the intersection of Washington Boulevard and Helm[s] Avenue, Culver City) at which defendant was photographed allegedly running a red light.”  The trial court denied Gray’s motion to dismiss. At conclusion of the trial, the court found that the ATES-produced evidence was admissible, found Gray guilty of the charge, and ordered Gray to pay a fine.  Gray appealed the decision.  

Appellant Besaro Mobile Home Park, LLC (“Besaro”) operated a mobile home park in the City of Fremont (“the City”).  In 1987, the City adopted a rent control ordinance to address the unique attributes of mobile home ownership and park management.  In 2009, Besaro filed an application for a major rent increase under the ordinance.  Although Besaro admitted that it was currently receiving a fair rate of return on its investment, it argued that the rents should be consistent with general market conditions.  The application was denied following an administrative hearing and the superior court denied Besaro’s petition for writ of administrative mandate.  In the appeal, Besaro argued that the denial of the major rent increase was contrary to the ordinance and violated its rights under the California Constitution. 

Some states require the government to pay for all of the costs incurred by a property owner when it condemns land, however, California Eminent Domain Law only requires a public agency to pay for attorney's fees and litigation expenses when a court finds "that the offer of the plaintiff [public entity] was unreasonable and that the demand of the defendant [the property owner] was reasonable viewed in the light of the evidence admitted [at trial] and the compensation awarded [judgment]. . . ." (Cal. Code of Civil Procedure section 1250.410.) In a recent case, Cal. Dept. of Transportation v. Menigoz, the State accepted the property owners' statutory "final demand" several days before the scheduled trial date, resulting in a stipulated judgment. Upon the judgment being entered, the property owners' moved for their litigation expenses (attorneys' fees, experts' fees, trial preparation costs, etc.). The court granted the motion, in part, because the parties had spent considerable expense in preparing for trial.

On February 7, 2012, the California Court of Appeal for the Second Appellate District upheld a trial court’s decision that release of officers’ names involved in an officer-involved shooting did not amount to an unwarranted invasion of privacy. Los Angeles Times Communications, LLC ("the Times") submitted a request to the City of Long Beach under the California Public Records Act (CPRA) seeking the names of police officers involved in a 2010 officer-involved shooting in Long Beach, and the names of all officers involved in shootings in Long Beach for the preceding five years. The Long Beach Police Officers Association (LBPOA) brought an action against the City of Long Beach, the Long Beach Police Department and the Chief of Police seeking to enjoin disclosure of the names. In support of its request, LBPOA averred that a shooting review which takes place after an officer-involved shooting can lead to findings resulting in an internal affairs investigation. LBPOA also expressed safety concerns about releasing the names of shooting officers. The Times moved to intervene and filed an opposition.

On January 4, 2012 Senate President Pro Tem Darrell Steinberg introducedSenate Bill 654, which (if passed) would allow municipalities to permanently retain the portion of redevelopment dollars earmarked for affordable housing projects. According to Steinberg, the bill is intended to preserve for affordable housing the roughly $2 billion in outstanding balances in the Low and Moderate Income Housing funds maintained by redevelopment agencies throughout the state.

For a copy of the proposed bill, click here.

On January 4, 2012 the California Sixth District Court of Appeal held that a City’s Final Environmental Impact Report (FEIR) was required to consider only reasonably foreseeable consequences of the sale of city-owned property. The City of Carmel-by-the-Sea owned land known as the Flanders Mansion property, which had historically been used for numerous low-intensity uses. The City approved a FEIR following its decision to sell the mansion. The report concluded that because the use of the property was constrained onlyto historical uses, a lease to another entity for a future use, such as an affordable housing project, was not feasible. The Flanders Foundation challenged the City’s approval and argued that the City did not sufficiently examine the potential environmental impacts associated with application of the Surplus Land Act which requires agencies to offer to sell or lease property to certain entities for affordable housing or park purposes before it offers the property to the general public.

The Court held that the City was not prohibited from selling the Mansion, and that it was not reasonably foreseeable that a public agency would spend millions of dollars to purchase and restore the property and accept the burden of complying with the restrictions for the purpose of using it for affordable housing. Given that such use was not foreseeable, the Court found that the FEIR was not required to consider the environmental impacts that could arise from such use.

For the full decision, see Flanders Foundation v. City of Carmel-by-the-Sea (Case No. H035818).

The California Supreme Court today issued an opinion in the California Redevelopment Association v. Matosantos case, upholding Assembly Bill x1 26 (the "Redevelopment Dissolution" bill) and invalidating Assembly Bill x1 27 (the "Voluntary Payment" bill). The Court provided a four month extension for all deadlines contained in AB x1 26 that arise prior to May 1, 2012. As a result, effective February 1, 2012, all redevelopment agencies in California will be dissolved.

Prior to their dissolution, agency activities are limited to carrying out "enforceable obligations" as defined in AB x1 26. Following dissolution, the successor entity (the city or county that formed the agency, unless such jurisdiction elects not to fill this role) is charged with winding up the affairs of the dissolved agency, subject to review by an oversight board composed of representatives appointed by the city, the county, the local school district, the local community college district, and the largest local special district. By March 1, 2012, the successor entity is required to prepare a draft recognized obligation payment schedule describing enforceable obligations payable during the period from January through June 2012. The successor entity is directed to dispose of the assets of the former redevelopment agency with the proceeds to be transferred to the county auditor-controller for distribution to local taxing entities. The successor entity may elect to retain the housing assets and functions previously performed by the redevelopment agency; however, funds on deposit in the Low and Moderate Income Housing Fund are not retained by the successor entity.

The Court held that AB x1 27 (the measure that would have permitted cities and counties to continue the operation of their local redevelopment agency by agreeing to make specified payments for the benefit of schools and special districts) violates Proposition 22, the ballot measure adopted in 2010 that limits the legislature's ability to require local government payments.

Six justices signed the majority opinion. The Chief Justice issued a dissenting and concurring opinion in which she opined that AB x1 27 does not on its face compel the violation of Proposition 22.

Please contact any member of the Meyers Nave Redevelopment Practice Group for further information at 800.464.3559. 

The Court of Federal Claims’ recent opinion in Casitas Municipal Water District v. the United States, Court of Federal Claims No. 05-168L (Dec. 5, 2011) is the latest chapter in a legal battle between water diverters and fish in California.  Water users competing with endangered fish species for limited water resources have taken the fight to the courts in recent years (Tulare Lake, Klamath and now Casitas) with mixed results, claiming restrictions under the Endangered Species Act (“ESA”) requiring water to remain in streams for fish passage is a taking of their water rights.  Casitas operates a water project in Ventura County that provides water to residential, industrial and agricultural users.  In  2005, Casitas sued the U.S. for a 5thAmendment taking after the National Marine Fisheries Service issued a biological opinion that required Casitas to provide fish passage over a diversion dam which blocked the fishes’ access to upstream habitat.  The government argued that no taking occurred because background principles of state law limited plaintiff’s water right to beneficial use of water in a manner that did not harm trust resources such as fish and wildlife. 

In concluding that no taking had occurred, the court clarified that the only compensable water right that can be obtained under California law is the right to beneficial use and that such water rights are limited by background principles of state law.  To the extent restrictions imposed under the ESA are no greater than the restrictions imposed under state law (i.e., the public trust doctrine, the reasonable use doctrine and the California Fish and Game Code), there is no taking under Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992).  The court found insufficient evidence to conclude that the ESA restrictions were duplicative of state background principles limiting the plaintiff’s water right, but then held the takings claim was not ripe because the restrictions imposed by the biological opinion had not interfered with the plaintiff’s beneficial use of water.  The court further held that if the State Water Resources Control Board were to act in the future to revise Casitas’ license and impose equal or greater restrictions to protect the fish than those imposed in the biological opinion, this would satisfy the Lucas standard and would eliminate any possible takings claim against the federal government.

This decision clarifies the limitations on California water rights from background principles of state law and the import of those limitations on the compensability for water lost due to ESA and other environmental protections.

A California Court of Appeal affirmed a trial court's conclusion that the City of San Clemente's zoning of "Residential, Very Low Density" ("RVL") on an undeveloped 2.85 acre parcel in the middle of a residential tract otherwise zoned "Residential, Low Density" ("RL") constituted a constitutional "taking." The RVL designation limits parcels to one dwelling per 20 acres while the RL allows at least four dwellings per acre. Back in 1983, the City had originally approved plans to subdivide the parcel allowing for four single family lots, however, the construction never occurred. Neighborhood opposition desired the parcel to be declared "open space." A decade later the City amended its general plan to create the RVL zoning and impose it on several properties, including the subject property. All the parcels surrounding the subject property were and continued to be zoned RL. None of the owners of the parcel found out about the downzoning until 20 years later. After hiring a civil engineer to help them again try to develop the property, the owners submitted a development application to build four dwellings (seeking a general plan amendment, zoning amendment, tentative parcel map, site plan permit, conditional use permit and variance), the application was denied with the city council later approving the denial.

The owners served a writ of mandate alleging, in part, inverse condemnation based on spot zoning of the property. The trial court granted the writ concluding that the City did not give adequate notice of the downzoning, the RVL restrictions were arbitrary and capricious as applied to the property, and the owners' suit was timely under the applicable statute of limitations. The writ declared the City's resolution denying the owner's land use application null and void and ordered the City to adopt a new resolution. The inverse condemnation trial resulted in a judgment of "just compensation" in the amount of $1.3 million dollars. The court of appeal affirmed the writ and judgment but remanded to allow the City to decide which action it desired to do - - either pay the compensation, or, allow the property owners to develop the property under a new resolution.

For the full decision see Avenida San Juan Partnership v. City of San Clemente (December 14, 2011) 2011 DJDAR 17887.

Senate Bill 436, a bill signed into law in October of this year, changes definitions and adds Section 65967 to the mitigation lands section of the State Planning and Zoning Laws located in the Government Code. Current State Planning and Zoning laws allow a state or local agency to require mitigation land that is provided by an applicant to be transferred to that agency or a non-profit. Beginning January 1, 2012, local and state agencies will have additional options for the transfer and management of this mitigation land.

In 2007, the Greater Yellowstone Coalition (“Coalition”) filed a lawsuit against the U.S. Fish and Wildlife Service (“Service”), Greater Yellowstone Coalition Inc. v. Servheen, challenging the Service’s final rule (“Rule”) to remove the Yellowstone distinct population segment of grizzly bears from the Endangered Species Act’s threatened species list.  The Coalition prevailed on summary judgment, convincing the district court that two key grounds supporting the Rule – 1) adequate regulatory mechanisms were in place to protect the grizzly and 2) declines in whitebark pine did not threaten the grizzly - were not rationally supported by the record.  The Ninth Circuit Court of Appeals affirmed in part and reversed in part, reiterating the importance of a well-documented Agency record.

Attorney Authors: 
Some local agencies require garbage franchisees or permittees to indemnify them for liabilities related to Proposition 218. Agencies entering into or renewing solid waste franchise agreements on or after July 1, 2012 may take note that SB 841, signed by Governor Brown on October 9, 2011, limits the ability to enforce such requirements. 
SB 841 adds new section of the California Public Resources Code (40059.2), which makes unenforceable the provisions of any local agency contract, permit or ordinance entered into or effective after July 1, 2012 that require a solid waste enterprise to indemnify the local agency for the agency's "failure to obtain voter or property owner approval" of a fee in violation of Article XIIIC or XIIID of the California Constitution.  Similarly unenforceable will be any indemnity obligation that would require a solid waste enterpriseto refund to its customers fees that were collected on behalf of or remitted to the local agency, where the fees were imposed in violation of the above constitutional provisions, as determined by a court. Such indemnity provisions in current permits or agreements remain enforceable. 
The new prohibition targets specific indemnity requirements; other forms of indemnification related to fees for solid waste services may still be permissible.
The text of SB 841 may be found here.

The California Court of Appeals held on November 9, 2011 that the heirs of an individual killed by police while engaged in a crime are not precluded from bringing an excessive force lawsuit by the resisting arrest conviction of a co-participant in the crime.  In Beets v. County of Los Angeles, L.A. County Sheriff's deputies were chasing a car driven by the plaintiffs' son.  The son and his passenger bailed from the car and got into a nearby truck, which was then surrounded by the deputies on foot.  The two suspects engaged the deputies in a fight from inside the truck, and the plaintiffs' son started the truck and drove it into a police car and then towards one of the deputies, who shot and killed the son.  The passenger was tried and convicted of assault with a deadly weapon on a police officer.  Thereafter, the plaintiffs brought suit against the County, alleging that the Deputies had used excessive force against their son.  The trial court granted the County's demurrer and dismissed the case, finding that the passenger's conviction precluded the plaintiffs' lawsuit.

The Court of Appeal reversed on November 9, 2011, finding that the U.S. Supreme Court decision in Heck v. Humphrey, which prohibits a civil rights lawsuit that would necessarily invalidate a previous criminal conviction of the plaintiff, did not apply because the plaintiffs' son was not represented in the passenger's criminal trial.  Although these set of facts are not likely to arise frequently, the Beets decision does limit the availability of the Heckpreclusion defense in similar circumstances.  It is also important to note that this a California Court of Appeal decision, and not binding on federal courts, which often determine issues arising under the Heck case.

Attorney Authors: 

In Reliable Tree Experts v. Baker (California Department of Transportation), the First Appellate District affirmed an order holding that the pruning and removal of diseased trees along state highways was both a public work and “maintenance” work necessitating the payment of prevailing wages under the Labor Code.

The Court of Appeals found that public works are not limited to “[c]onstruction, alteration, demolition, installation, or repair work,” as set forth in §1720(a)(1) of the Labor Code.  A public work also includes “maintenance,” as set forth in §1771.  Both sections, the court found, §1720 and §1771, define the scope of what constitutes a “public work.”

In a dispute between the California Department of Transportation (“Caltrans”) and Reliable Tree Experts (“Reliable”), Reliable argued that the work it did for Caltrans was not “maintenance” work” requiring prevailing wages because maintenance is work that must be performed on a regular basis and its contract with Caltrans was for a one-time job only. 

The Court of Appeals disagreed, finding that whether or not the job constituted maintenance work did not depend on how often any particular contractor was hired to perform the job.  State highways are bordered by thousands of trees that must be maintained on a routine, recurring and usual basis.  Tree work on a Caltrans right-of-way is not a “one time project” but an on-going task requiring the use of many contracts throughout the state.  Thus tree work, in this instance, would be maintenance work regardless of how many times any individual contractor is hired to perform it.

The November 8 ballot presented San Francisco voters with two competing pension reform measures. Proposition C, developed by Mayor Ed Lee in collaboration with City labor unions, passed with (as of this writing) approximately 68% approval from voters, according to the San Francisco Chronicle. Proposition D—now the second failed pension reform effort of Public Defender Jeff Adachi, defeated after receiving only 34% approval—would have required higher worker contributions and was estimated to save more money.

Prop C is estimated to save between approximately $1 billion and $1.3 billion over the next decade. The measure will require workers to contribute 7.5% of their salaries to the pension fund, though that percentage would rise and fall depending on the economic climate and financial condition of the City. The measure also modifies retirement ages for future retirees by increasing the minimum retirement age for non-safety retirees from 50 to 53 (for partial benefits), and from 60 to 65 (for full benefits). Safety employees may still retire at 50 for partial benefits, but the retirement age for those wishing to obtain full benefits will increase from 55 to 58.

Prop C has been closely watched by California cities that are similarly in need of pension reform in order to reduce unfunded liabilities. Its passage could spur local public officials and labor unions across the state to work together to support similar measures in an effort to avoid potentially more controversial unilateral solutions.

Attorney Authors: 

Two new proposals for fixing the state’s pension system were filed yesterday with the Attorney General’s Office by the pension reform group, Californians for Pension Reform.  The group will apparently decide in January which of the two proposals will be circulated in an attempt to place it on the November 2012 ballot.  The two potential measures include drastic changes to pensions for public employees, including requiring employees with underfunded pension plans to contribute towards resolving the unfunded liabilities that continue to grow throughout the state.  The San Jose Mercury News reports the prospect of seeing one of these proposals on the November 2012 ballot could serve to bolster support for Governor Jerry Brown’s recent pension reform proposal, which was initially met with an unenthusiastic—if not outright hostile—reception by many Democrats and labor unions.  It is unclear how or to what extent these proposals would affect local public agencies. 

For more information about the two recent proposals, click here.

Attorney Authors: 

On October 27, 2011, Governor Brown released a twelve-point plan to reform public pensions that he wants placed on the November 2012 ballot.  Significant components of the plan include requiring new and current employees to transition to a contribution level of at least fifty percent of the cost of their pension benefits, creating a hybrid risk sharing system for new employees where they will participate in a defined benefit pension plan and defined contribution plan similar to a 401(k) plan, and setting the retirement age for most new non-public safety employees at the Social Security retirement age, which is presently 67.  While the plan says it will apply to all California state, local, school and other public employers "as legally permissible," the plan does not provide any specific details about the extent to which it will apply to such agencies if it is approved. 

To read a copy of the Governor's plan click here.

On October 11, 2011, Governor Brown signed SB 293 into law, which will be codified as Public Contract Code Section 7201.  SB 293 contained various provisions, but most important to public entities is a new 5% cap on the payment retention that public entities can withhold on public projects.  Although no previous statutory authority dictated the amount of retention, a 10% retention on public projects is common.  The retention cap could provide public entities with less leverage as they try to compel contractors to complete projects in a timely and satisfactory manner.  SB 293 also addresses prompt payment between prime contractors and subcontractors, and recovery on payment bonds.

Attorney Authors: 

In a lawsuit alleging hostile work environment harassment based on gender, a jury found that a former female employee at an advertising agency was subjected to unlawful harassment in violation of the California Fair Employment and Housing Act ("FEHA"). The plaintiff's hostile work environment claim was based on an email from an agency manager that referred to the size of her breasts, a different manager asking her about her personal and sex life, observing a management employee asking female co-workers to sit on his lap while dressed in a Santa Claus outfit at a Christmas party, and learning about alleged inappropriate comments directed towards other female employees that the plaintiff did not personally observe. The majority of these acts took place over the four year period before plaintiff resigned, and there was some evidence presented at trial that the plaintiff had used profanity at work and sent emails containing sexual references.

After the jury rendered a verdict in favor of the plaintiff on her hostile work environment claim, the Trial Court overturned the verdict. A California Court of Appeal affirmed, holding that the evidence presented by the plaintiff failed to support a claim of unlawful hostile work environment based on her gender. In so ruling the Court of Appeal noted that hostile work environment harassment is only unlawful when the harassing behavior is sufficiently severe or pervasive, and that the plaintiff failed to meet her burden because harassment that is occasional, isolated, sporadic or trivial is not actionable.

This decision is a helpful reminder of the high threshold that is necessary to prove an unlawful hostile work environment under the FEHA, as well as the fact that Courts will consider the specific circumstances in determining whether alleged acts of harassment are unlawful. To read the Court's decision in Brennan v. Townsend & O'Leary, Enterprises, Inc. 2011 Cal.App. Lexis 1309, click here.

Under California Eminent Domain Law, public entities may petition a court for an order to enter private property in order to take photographs, studies, surveys, tests, samplings, or engage in similar activities reasonably related to acquisition or use of the property for the proposed project use. (Cal. Code of Civil Procedure sections 1245.010 and after.) Such petitions are usually granted with a defined and limited scope of activities and timeline.

California's Department of Water Resources ("DWR") has been trying to enter private land to conduct soil surveys related to the Bay Delta Conservation Plan and the canal/tunnel water diversion project. DWR attempted to obtain permission to enter from the land owners. One-hundred and fifty Delta property owners who oppose the project filed lawsuits and a court limited DWR's ability to access the private land for the surveys. In response, DWR is taking the unusual step of moving forward with acquiring the temporary easements (and 16 square feet of land in full ownership) necessary to conduct the surveys and has made offers of compensation to the affected landowners. Such steps are necessary if DWR's Board ultimately decides to use eminent domain to acquire the easements and land.

Prime contractors that fail to complete public projects on time often claim that circumstances beyond their control caused the delay.  Frequently, contractors making such claims fail to follow procedures mandated by the construction contract and project specifications to request more time to complete the project.  Now, with a new California Court of Appeal decision, public entities have more authority to support their arguments that contractors in such circumstances are not entitled to additional compensation.  In the case, Greg Opinski Construction, Inc. v. City of Oakdale, the Court held that liquidated damages were proper against the prime contractor, which claimed that liquidated damages were improper because the public entity was responsible for its delay in completing the project, because the contractor failed to follow procedures in the contract for claiming additional time for completion.  Read the entire opinion, published October 6, 2011, here.
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Public entities that utilize the UPCCAA should take note that the monetary thresholds for bidding on public projects has changed as follows:

(a) Public projects of thirty thousand dollars ($30,000) or less may be performed by the employees of a public agency by force account, by negotiated contract, or by purchase order.

(b) Public projects of one hundred seventy-five thousand dollars ($175,000) or less may be let to contract by informal procedures as set forth in this article.

(c) Public projects of more than one hundred seventy-five thousand dollars ($175,000) shall, except as otherwise provided in this article, be let to contract by formal bidding procedure.

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As we discussed in a previous blog posting, SB 888 would have limited the ability of protestors to demonstrate at funerals.  Aimed at least in part at the activities of the Westboro Church, SB 888 attempted to protect the privacy of mourners.  Governor Brown vetoed the bill on September 6, because of its "plain" failure to comport with the Snyder v. Phelps US Supreme Court decision. The bill's sponsor (Sen. Ted Lieu, D-Torrance) is said to be working on a new version of the bill. You can read the Governor's veto message here.

On August 24, 2011, the California Court of Appeal found in favor of San Bernardino County in an inverse condemnation case based upon flooding caused by water run-off from a County road.  The plaintiffs' properties had been damaged during two separate storms, and the plaintiffs contended that an unimproved County road caused the damage in one storm, and K-rail placed by the County on an improved portion of the same road caused damage during the other storm.  In affirming the trial court's findings in favor of the County, the Court of Appeal confirmed th

The California Supreme Court today limited defendants’ liability for “medical special” damages.  “We hold . . . that an injured plaintiff whose medical expenses are paid through private insurance may recover as economic damages no more than the amounts paid by the plaintiff or his or her insurer for the medical services received or still owing at the time of trial.”  The court rejected plaintiff arguments that defendants are liable for the full “billed” amount, regardless of any discount the insurer may negotiate.  “We hold no such recovery is allowed, for the simple reason that the injured plaintiff did not suffer any economic loss in that amount.”  The court’s ruling prevents plaintiffs from recovering in damages more than the actual harm incurred.  

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In Edna Valley Watch v. County of San Luis Obispo, the Court of Appeal determined that the trial court could make a Section 1021.5 award of attorneys’ fees that the plaintiffs incurred in preparing for an administrative hearing. 

As a prerequisite to filing their CEQA lawsuit, the plaintiffs had appealed San Luis Obispo County’s grant of a conditional use permit to a church for its planned church complex.  The court held that these administrative proceedings were useful and necessary to the litigation essentially because the plaintiffs could not have brought their lawsuit without first exhausting their administrative remedies, and that “[i]n fact, there can be no public interest litigation without first filing an administrative proceeding.” 

In March 2011, the Department of Fish and Game was sued in Siskiyou County by the local farm bureau who claims the Department has improperly expanded its authority to regulate substantial diversions or obstructions of stream flow under Fish and Game Code Section 1602.  (Siskiyou County Farm Bureau v. California Department of Fish and Game, Case No. SCSCCVCV 11-00418.)  In 2005, coho salmon in the Klamath Basin were listed as threatened under the California Endangered Species Act ("CESA").  The Department has since interpreted its authority under Section 1602 and CESA to require all agricultural streambed diversions in the Klamath Basin to obtain the necessary permits or authorizations to comply with Section 1602. 

On July 22, 2011 the California Court of Appeal confirmed that a subcontractor could not bring an action against a general contractor alleging that the general contractor submitted a claim to a public entity in violation of the California False Claims Act (Government Code Section 12650 et seq.).  In the case, the subcontractor attempted to bring the suit in the name of the State of California as a so-called "qui tam" plaintiff, who can receive a substantial payout of litigation proceeds if the case is successful.  However, the subcontractor was out of luck

The California Redevelopment Association (CRA) and the League of California Cities (LOCC) together with named Plaintiffs, the City of Union City and the City of San Jose, filed a petition on Wednesday, July 18 asking the California Supreme Court to overturn Assembly Bill X1 26 and Assembly Bill X1 27.  These bills would dissolve Redevelopment Agencies unless their sponsoring jurisdictions agree to make payments in support of local taxing entities. The petition alleges that the bills violate the California Constitution, including Propositions 1A and 22, it requests the Court to issue a stay on the implementation of the bills by August 15, and it requests a decision on the merits by December 20.

In Save the Plastic Bag Coalition v. City of Manhattan Beach, the California Supreme Court clarified and, potentially, expanded the rights of corporations to bring CEQA lawsuits and sought to inject “common sense” into the CEQA process.

On Tuesday, the Legislature approved the latest budget proposal (SB 87) and sent the previously passed trailer bills, AB 1X 26 and 27, to the Governor for signature. The California Redevelopment Association and the League of California Cities will be filing legal actions in efforts to invalidate the legislation and obtain a stay on implementation. 

If the legislation is upheld, redevelopment agencies will need to decide whether they should dissolve in accordance with AB1X26, or "pay to play" in accordance with AB1X27. This is a decision that should be analyzed in light of the particular circumstances of each redevelopment agency. Agencies should evaluate projects in process, property and other assets the city and agency may lose if the agency is dissolved, whether future net tax increment will be sufficient to fund planned redevelopment activities, and whether the agency can make the payments required by the legislation. 

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Questions often arise as to whether an agency can rely on an "old" certified environmental impact report to approve a revision to a project that was never built.  In Citizens for Responsible Equitable Environmental Development (CREED) v. City of San Diego, the Court upheld the use of a 2008 Addendum to a 1994 environmental impact report (EIR) to approve a revised project.  The Court rejected arguments that the Addendum was insufficient because it failed to analyze greenhouse gas (GHG) impacts which were not addressed in the 1994 EIR.   A GHG analysis was not required because it was not new information that could not have been known in 1994 when the EIR was certified.  The Court found that GHG impacts were known as early as the 1970s.  The Court also found that the City properly incorporated and approved a new water supply assessment in the Addendum.  The opinion also provides good guidance on the requirement to present issues with specificity before the agency as a prerequisite for raising the issues in court (the exhaustion of administrative remedies doctrine).  Click here for a more detailed analysis of the case.