The City Attorney's Seven Biggest Letdowns - Voice of San Diego

Balboa Park UNVEILING THE UNSEEN

The City Attorney's Seven Biggest Letdowns

The city has seen big projects fall apart, doled out settlements and failed to foresee some long-term legal liabilities.

 

In 2011, the author and journalist Roger Lowenstein highlighted for the nation San Diego’s cutbacks to tree maintenance.

It was an example of municipal governments slashing services. And it would, he wrote, be a problem if coconuts ended up falling on pedestrians.

We pointed out that our palm trees do not have coconuts.

But Lowenstein was right: We had very good reason to fear the trees.

A palm tree so crippled one San Diegan that a court forced the city to pay him $7.6 million — far more than it ever saved from the cuts.

The loss in court was one of several recent legal setbacks for the city. The city attorney might have warned the City Council that, should it shirk the responsibility to maintain trees, this might happen. What other measures could it have taken to avoid big legal setbacks and how does the city attorney explain the outcome?

To be sure, the city has prevailed or come out better than it could have in several cases. When I asked about these cases, City Attorney Jan Goldsmith sent this list of victories. And he does have some significant achievements. Take a look.

But I looked at seven recent legal setbacks the city’s had under Goldsmith and asked him for an explanation of each.

I’m not taking sides in the cases — perhaps it was good that the city has failed on these legal fronts.

Over the last decade, we’ve had debate after debate about the true role of the city attorney. As an elected official, his bosses are voters. But as an attorney, his client is the city, which is a corporation run by the mayor and the council.

And Goldsmith staked the position that his role is to carry out their policy decisions and to offer them paths to achieve what they want or restrain them when they’re clearly not going to pass the legal test.

For these cases, that is not going so well.

And while many of his quotes contain some form of “this is not over yet, it’s on appeal,” the legal failures or the lack of clarity about the law, have, in some cases, significantly altered the trajectory of the city’s future.

I. The Falling Tree

Pictured: A palm tree. File photo by Sam Hodgson.

Cost: $7.6 million

Case facts: During its budget crisis, the city cut back on maintenance of its 200,000 trees, including 30,000 unruly palm trees whose berries, falling fronds and structures need more care than other trees.

The move saved $900,000 a year but ended up costing the city dearly.

A palm tree fell in Mission Hills. It crushed a car. When the owner of the car went to retrieve items from it, another fell and left him paralyzed. As the city attorney reported, after the first tree fell, the city arborist visited but did not cordon off the site or inspect the adjacent tree.

The winning argument the victim’s lawyers made was straightforward: The city’s cutbacks led to this devastating injury.

Ironically, the city had successfully persuaded a judge to prohibit the victim’s attorneys from making this argument. But the city ended up broaching this subject in its own examination of a witness. And the victims’ attorneys seized on the opportunity to highlight the cost of the city’s cutbacks.

“The tree would not have come down like that. There would have been maintenance. It was clearly a dangerous tree,” said Browne Greene, the plaintiff’s attorney who argued the case.

City Attorney’s Quote: “Yes, tough case. … The jury found the city was on notice and should have done something to protect against the second tree falling. Terrible situation all around.

The plaintiff’s settlement demand was $19 million before trial and sought $37 million from the jury at trial. The jury awarded $7.6 million. There is no ‘win’ here for either side due to this tragedy. Our lawyers were effective in bringing the jury award well below settlement position and claim amount.”

II. The Tourism Marketing Disaster

Pictured: Hotels downtown. File photo by Sam Hodgson.

Cost: Potential loss of a 39.5-year, $1 billion deal, hotel-room surcharge and tourism marketing. Plus, layoffs at the Tourism Authority.

Case facts: Last year, a 2-percent surcharge on hotel room bills (on top of the 10.5 percent tax the city charges) enacted by the Tourism Marketing District expired. The council renewed it for 39.5 years and former Mayor Jerry Sanders authorized it.

But his successor, Mayor Bob Filner, shocked the council and hotel owners when he refused to sign the operating agreement for the Tourism Marketing District.

We explain the whole situation as simply as possible in this short video.

While the mayor thinks the surcharge is an illegal tax, he’s apparently willing to allow it to go forward should he squeeze these demands out of the negotiation.

At the heart of the matter is a question that goes back to the very beginning of constitutional law in this country: Is the mayor compelled to sign a contract his predecessor put on his desk?

For some reason, Sanders did not sign the operating agreement. U-T San Diego tried to find out why and came up with this.

Julie Dubick, Sanders’ former chief of staff, put the blame on Goldsmith.

She told the U-T:

The city attorney neither required nor gave any notice that the operating agreement needed to be signed before Sanders left office, as Goldsmith could have done even if it went to Purchasing and Contracting initially. … If it legally was needed and is not just ministerial, then Jan should have made that known as he often gave opinions on completing documents and what was necessary in his opinion.

Goldsmith put the blame on Sanders and said he didn’t know why he hadn’t signed it.

The Tourism Marketing District sued Filner, saying he was required to sign the agreement. Goldsmith refused to defend the mayor and the City Council reaffirmed its support, but, crucially, decided against a new resolution demanding that Filner sign the document.

Judge Timothy Taylor ruled that the council merely authorized the mayor to sign an agreement, not this agreement. It was a small but crucial oversight. When he asked whether the council had clarified this, he learned it had not.

At best, the city attorney has not added any clarity to a tremendously confusing legal situation. At worst, years of work and efforts to levy this surcharge legally may have flopped because of simple errors of wording and process.

City Attorney’s Quote: “I have been very careful not to express an opinion, legal or otherwise, on whether the mayor should or should not sign the TMD operating agreement. But I have made it clear and will do so again now that the mayor may not legally require payment of the assessment to the city’s general fund, as that would render the assessment clearly an illegal tax.”

III. The Balboa Park Mega-Stumble

File photo by Sam Hodgson.

Cost: $45 million project. $8 million in private funds already spent. Months of hassle and controversy.

Case facts: If the city wants to revamp a designated historic property, the municipal code requires it to determine the property has no current reasonable beneficial use.

The council found that the historic center of Balboa Park, the Plaza de Panama, would someday become unusable.

But that wasn’t enough for a judge. He wrote: “[City law] does not say there ‘will in the future be no reasonable beneficial use of a property.’ It says ‘there is no reasonable beneficial use of a property’ — denoting today, right now, based on present facts, not future facts.”

And, all of a sudden, after a grueling public process and community debate, a $45 million project was crushed. The council, led by Todd Gloria, is scrambling to save it. The city attorney said it could just amend the pesky code.

Doing so would involve inserting an exemption for this particular property into the municipal code section that tripped up the project. It’s unclear whether the mayor would veto this. And if he did, would the council override him? It had enough supportive votes for the project.

But that raises the question: Why didn’t they do this when they passed the project? What went wrong?

City Attorney’s Quote: “[This case] involved ‘findings’ by the City Council that the judge found were insufficient to meet the legal standard. Our office provides the legal standard and the City Council determines whether there are facts to meet that standard. If they do, they make ‘findings.’

These are value judgments. Our office does not substitute our judgment for the City Council unless there is absolutely no basis upon which a finding can be made.

The City Council is like a jury — the ‘findings’ normally prevail. The batting average is very high, but sometimes in close cases, a judge or jury may disagree. In this case, the judge disagreed with the ‘findings.'”

IV. Qualcomm Stadium’s Underground Mess

File photo by Sam Hodgson.

Cost: $4.75 million in legal fees paid by the city. Hoped-for funds for redevelopment lost.

Case facts: No discussion about the future of Qualcomm Stadium is complete without talking about the plume of fuel that poisons the land beneath it. When former City Attorney Mike Aguirre ran the city’s legal team, he initiated a lawsuit against the company responsible for the mess, Kinder Morgan.

The city believed Kinder Morgan’s cleanup was going too slow and costing the public millions. Goldsmith kept the case going when he took over as city attorney, using outside attorneys contracted with the city.

The city sought $246 million in damages. It wound up costing $4.75 million in outside attorney’s fees. A judge ruled on Jan. 25 that the city’s key expert witness was “unreliable and irrelevant.” The statute of limitations had already expired on some claims.

City Attorney’s Quote: “The judge threw out the case largely due to a finding that the case was not timely filed in 2007 and is barred by the statute of limitations. The city’s argument was that there was a ‘continuing’ pollution that has not stopped and so the statute of limitations has never stopped. The judge did not see facts to support that.

This was a case that we agreed with Mr. Aguirre should be pursued. We still do and the case will be appealed. A lawsuit is not over until appeals are exhausted. So, we suggest you not be so fast to declare a loss.”

V. Accused Pension Officials Collect Big Attorney’s Fees

Pictured: Ron Saathoff, former firefighter union president, outside the San Diego County Courthouse in 2005. File photo.

Cost: $7.4 million

Case facts: In 2005, District Attorney Bonnie Dumanis dropped one of the biggest shoes in the pension scandal that was consuming city politics. She alleged that six former officials who oversaw the city’s pension system had violated the state’s conflict-of-interest laws by participating in a deal that improved most city employee retirement packages while allowing the city to underfund its retirement system.

Her cases fell apart as they made their way to the California Supreme Court and all the charges were dropped.

Now, the city’s paying, big. As the U-T has reported, in 2002, the city adopted a resolution that indemnified pension officials from lawsuits. Defense attorneys successfully argued this covered criminal accusations as well.

City Attorney’s Quote: “The indemnity agreement was poorly drafted; most importantly, it did not mention criminal prosecution and did not promise indemnity for criminal prosecution. In fact, there is state law that bars governments from indemnifying employees in criminal cases unless certain findings are made, which were never made in 2002 or at any time.

Initially, the judge issued a tentative decision throwing out the case against the city. Several months later, he changed that decision and declined to apply state law requiring the findings. This case is on appeal and is by no means over.”

VI. Pension Reform Hiccup

Former Mayor Jerry Sanders at an April 2011 press conference about a pension reform proposal. File photo by Sam Hodgson.

Cost: Landmark pension reform initiative approved by voters is jeopardized. Thousands of city attorney hours and up to $400,000 in outside legal fees.

Case facts: Under California law, city leaders must confer with public employee unions before they try to implement changes to employees’ terms. If they don’t get anywhere, then the city can impose what it would like.

In the summer and fall of 2011, conservatives began working on a plan to impose a new 401(k)-style pension plan on most new city employees. Local citizens created the petition. After a hard slog, they collected enough signatures and the initiative went to voters in June 2012.

But former Mayor Jerry Sanders took a prominent leadership role in creating and touting it. As the city’s chief executive, did Sanders have a responsibility to meet first with his employees? The unions think so. They want to protect the requirement that they at least get a meeting first, and they admit to feeling slighted that he didn’t even try.

The city attorney has argued that Sanders acted not as mayor, but as a private citizen.

The unions think this is absurd and an offensive end-run around the requirement that he at least give them a meeting first. They’re carrying out a long battle to prove it. They’ve scored some victories in front of the Public Employment Relations Board, or PERB.

This might not be considered a loss as the city attorney dismisses the setbacks at PERB as both expected and not legitimate. He wants the case to go to appellate courts as soon as possible.

This brought a tough response from Michael Zucchet, general manager of the San Diego Municipal Employees Association.

“The city attorney’s constant attacks on PERB as a venue where ‘the rule of law’ does not apply is simply the rhetoric of a desperate lawyer that now knows he gave bad advice in this matter,” Zucchet wrote in an email.

The bad advice he is referencing is the question of whether Goldsmith should have told the mayor to meet with unions or not take a lead role as the petition began. Should city attorneys have foreseen that the mayor’s role in creating the initiative might create a problem? When I asked Goldsmith about this at a recent forum, he erupted.

Here’s what he said, as passed along by KPBS:

“There is nowhere in the entire country, ever, ever Scott, anywhere, where an elected official’s involvement in an initiative has either been criticized or found to bind the city or found to be an unfair labor practice,” Goldsmith said.

City Attorney’s Quote: “Recall that PERB sought a court injunction against the city seeking to remove Prop B from the ballot. It lost. Then, when Prop B was adopted by voters, PERB sought an injunction preventing implementation and lost. Then, PERB sought an injunction seeking to prevent the city from adopting a 401(k) retirement plan for new employees and lost.

The only thing PERB won in court was the ability to go forward with its administrative process.

Despite the rhetoric, the city has won more on Prop B than not. Prop B is being implemented and the courts have refused PERB’s repeated attempts to stop it. Ultimately, this will return to the courts where the rule of law applies.”

(In so far as Proposition B is being implemented, yes, the 401(k)-style pension for most new employees has begun but not in its final version. How it will ultimately look is on hold pending the outcome of these case. Zucchet responded to the city attorney’s points and we’ve posted his entire take here.)

VII. Fireworks Fumbles

Pictured: Environmental attorney Marco Gonzalez. File photo.

Cost: Potential loss of fireworks shows and at least $250,000 in outside legal fees.

Case facts: The city has been on the losing end of multiple environmental cases in recent years filed by the Coastal Environmental Rights Foundation involving the annual 4th of July fireworks celebration in La Jolla and the permitting of special events throughout the city. It rejected a settlement offer from CERF to use money from the settlement to pay for environmental review of the La Jolla fireworks show. The cases are on appeal.

Put simply, environmentalists contend that fireworks shows pollute sensitive marine areas. As such, they should have to conform to the California Environmental Quality Act, which would require studies on the fireworks’ impact and plans to mitigate that impact.

There are five cases. The city attorney’s office at first claimed that some of these suits were “still in lower court ready to be heard and some are on appeal.” But a spokesperson later admitted the city has lost all the cases so far in lower court, except for one that the plaintiffs have stayed. The city attorney is working on appeals.

The city continues to spend hundreds of thousands of dollars to fight this. When can we move on?

The city attorney will remind us that it is actually the council that decides whether to settle a case or fight or pursue a lawsuit. They meet in closed session so we don’t know how those discussions go.

But it’s the city attorney who should help them understand the chances of winning a case. And these cases are not going well.

City Attorney’s Quote: “These cases are not even close to final.”

Maybe not, but that could be the problem. We have to know when to admit it’s not worth fighting anymore.

I’m Scott Lewis, the CEO of Voice of San Diego. Please contact me if you’d like at scott.lewis@voiceofsandiego.org or 619.325.0527 and follow me on Twitter (it’s a blast!):

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