A court of appeal ruled that the city violated the state’s open meeting law when it approved a settlement agreement with a developer behind closed doors.
By Jonathan Friedman / Assistant Editor
With the backing of the League of California Cities, the City Council decided on Monday that if a three-judge panel on the Court of Appeal’s 2nd District denies its request for a new hearing, then it will petition the state Supreme Court to hear whether the council is guilty of approving an illegal settlement with a developer and violating the state’s open meeting law in the process.
Earlier this month, the Court of Appeal panel issued an opinion that reversed Los Angeles Superior Court Judge David P. Yaffe’s 2004 ruling and supported the Trancas Property Owners Association’s allegation that a settlement reached between the city and developer Trancas PCH was illegal. Among its reasons for invalidating the agreement, the court said the council violated the Brown Act, the state’s open meeting law, because it approved the agreement during closed session, a portion of the meeting not open to the public when the council discusses legal issues with the city attorney and city staff relevant to the subject. Although the Brown Act allows for certain kinds of settlements to be approved during closed session, the court said the council cannot take action during closed session on items that would require a public hearing.
“The Brown Act was never intended to inhibit the discussion of settlement options or to create two categories of settlement proposals (those that may be discussed in closed session and those that must be discussed in open session),” City Attorney Christi Hogin wrote in her petition to the Court of Appeal for a rehearing.
Hogin argued that the council’s actions did nothing to prevent public comment on the settlement. Rather, she wrote, the agreement to allow Trancas PCH to build 32 town homes on a property located on Pacific Coast Highway west of Trancas Canyon Road was just the beginning of a process.
“All parties to this litigation [settlement] agree that a zone change requires a public hearing before it is adopted,” Hogin wrote. “The city does not and has not asserted that it could approve in a settlement agreement a permit that required a public hearing.”
Trancas PCH has also petitioned the Court of Appeal to rehear the case. The developer and the city will learn before the end of the month whether the Court of Appeal will honor the requests. If the Court of Appeal refuses to rehear the case, then the city will petition the Supreme Court to hear it. The League of California Cities, the lobbying organization that represents the city governments of California, plans to send an amicus brief to the Supreme Court in support of the city’s petition.
“This case involves local governments’ ability to settle litigation,” said Trancas PCH attorney Alan Block. “I think [the Supreme Court could take the case because] it could have broad impacts statewide.”
Trancas Property Owners Association Board Member Marshall Grossman, a former Coastal Commissioner who is an attorney but did not serve in that capacity for the association, said the chances of either the Court of Appeal granting a rehearing or the Supreme Court taking the case are slim. He said even if the Supreme Court were to take the case-although he said it was highly unlikely to happen-and it ruled in the city’s favor, the city would still lose in the end. Grossman said that is because in its ruling, the Court of Appeal did not address every issue raised by the property owners association, but rather chose a few items to reach its conclusion that the settlement agreement was invalid. If the city were to win at the Supreme Court level, Grossman said, then the property owners association would ask the Court of Appeal to rule on the issues it did not address in its opinion, and Grossman said the court would side with the property owners association.
“The city is on a course for wasting more taxpayers’ money on an issue that it cannot win,” Grossman said.
Hogin said the timeline in Grossman’s hypothetical situation was not necessarily correct, and that several things could happen that would not include the case returning to the Court of Appeal.
The agreement between Trancas PCH and the city was reached in 2003 to resolve a dispute in which the developer said it had the right to build 52 town homes and 15 houses on its property. With that agreement being rejected and the parties involved waiting to see if any further court review could reverse the ruling, the original dispute between the city and the developer is now returning to court. A status conference is scheduled in the Los Angeles Superior Court for that lawsuit on Oct. 27. The property owners association has filed a petition to intervene in that lawsuit. Grossman said this was because it did not trust the city to handle the case.