Blogs - Public Law Blog

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. 

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.

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.

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.

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.

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.

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.

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.

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.  

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. 

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.

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.