Monday, June 2, 2014
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Conflict-of-Interest Suit Against Lawmakers No SLAPP, C.A. Rules
By KENNETH OFGANG, Staff Writer
A suit against a public official who is accused of acting on a contract in which he or she has a personal financial interest does not implicate speech or petition rights for purposes of the anti-SLAPP statute, the Court of Appeal for this district has ruled.
Div. One Friday ordered publication of its April 30 opinion in a case where it affirmed Los Angeles Superior Court Judge Rolf Treu’s denial of an anti-SLAPP motion by former Montebello City Council members Rosemarie Vasquez, Robert Urteaga and Kathy Salazar and former City Administrator Richard Torres.
The city is seeking a judicial declaration that the defendants had illegal personal financial interests stemming from a quid pro quo in which they agreed to vote for a trash hauling contract in exchange for campaign contributions.
It claims that Urteaga approached Arakelian Enterprises, Inc., which does business as Athens Services in 2007 with a proposal that the company—which has provided residential hauling services in the city since 1962—become its exclusive provider of commercial and industrial sanitation services, and that Torres negotiated the terms of the contract.
Political Firestorm
In 2008, the council voted 3-2 to award the 15-year, $150 million contract to Athens by a 3-2 vote. The contract caused a political firestorm in the city, and Vasquez was defeated for reelection in November 2009, following which opponents of the contract organized a recall campaign and ousted Urteaga and Salazar.
Athens donated $45,000 to Vasquez’s failed reelection effort, more than $350,000 to fight the recall, and $37,000 to an unsuccessful campaign to block the reelection of the city’s mayor, who voted against the contract. Evidence showed that the company never donated more than $9,000 to any other local candidate in that election cycle.
Under its new majority, the council sued the three ex-lawmakers and also sued Torres, who allegedly helped conceal the contract terms from the public. The city won a separate Superior Court action to invalidate the contract, and that ruling is the subject of a separate appeal.
The defendants sought to strike the conflict-of-interest suit on the grounds that their council votes constituted protected activity in connection with a public issue.
Treu agreed that the council members’ votes were protected activity, but said the city had demonstrated a likelihood of prevailing on its conflict-of-interest claims under Government Code §1090.
Justice Victoria Chaney, writing for the Court of Appeal, said Treu was correct in granting the anti-SLAPP motion, but wrong about the protected-activity issue.
A council member’s vote is an act on behalf of the public, not the individual, and thus does not implicate free speech and petition rights, the justice said.
Case Cited
She cited Nev. Commission on Ethics v. Carrigan (2010) 131 S.Ct. 2343, in which the Supreme Court rejected a First Amendment challenge to a Nevada law making it illegal for a legislator to vote or take a position on any measure in which the legislator holds a personal financial interest.
She wrote:
“Here, the City’s claim against Vasquez, Urteaga, and Salazar is based on the council members’ votes to approve a contract in which they had a financial interest. Their acts of voting represented the commitment of their legislative power to the approval of a city contract, which did not implicate their own right to free speech nor convey any symbolic message…and therefore those acts fail to qualify as protected activity within the meaning of [Code of Civil Procedure] section 425.16.”
As to the claim against the former city administrator, Chaney distinguished Santa Barbara County Coalition Against Automobile Subsidies v. Santa Barbara County Association of Governments (2008) 167 Cal.App.4th 1229, which held that a suit charging a transportation agency with illegally spending public funds to support a ballot measure implicated free speech rights for purposes of the anti-SLAPP statute.
The justice explained;
“Unlike the lawsuit in Santa Barbara County, which was based on a government entity’s political campaign in favor of a ballot measure, the City’s claim against Torres is predicated on his negotiation of the Athens contract, not on any actions publicly advocating for its passage. Nothing about Torres’s duties as City Administrator to negotiate contracts on the City’s behalf implicated Torres’s right to take positions on issues of public interest.”
In a recent interview with the Whittier Daily News, Urteaga said while he had met with officials from Athens, it had nothing to do with an extension of a contract. In fact, his election support came from the Teamsters union and it opposed giving the contract to Athens, he said.
“There was no reason for me to do anything for Athens,” Urteaga said.
An attorney for the defendants said they will fight the city’s allegations at trial.
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