Metropolitan News-Enterprise


Friday, June 10, 2016


Page 1


High Court Will Decide Whether School District Can Sue Contractors

Court of Appeal Said Evidence of ‘Pay-to-Play’ Scheme Was Sufficient to Survive Anti-SLAPP Motion




The California Supreme Court has agreed to decide whether a San Diego-area school district can proceed with a lawsuit against contractors who allegedly wined and dined former district officials in order to gain the district’s business.

The justices, at their weekly conference in San Francisco Wednesday, unanimously granted review in Sweetwater Union High School District v. Gilbride Building Company (2016) 245 Cal. App. 4th 19.

The Fourth District Court of Appeal’s Div. One affirmed a San Diego Superior Court judge’s order denying an anti-SLAPP motion by Gilbane Building Company, The Seville Group, Inc., and Gilbane/SGI, a joint venture of the two corporations. The Sweetwater Union High School District wants to void management contracts with all three entities, and to require that they disgorge all sums that Sweetwater paid them under the contracts.

The Chula Vista-based district claims that the contracts are voidable under Government Code §1090.  The statute authorizes a civil action to invalidate any contract that was approved by officials who had a financial conflict of interest.

In allowing the suit to proceed, Judge Eddie C. Sturgeon considered, over defense objection, grand jury transcripts and plea agreements in related criminal cases. Prosecutors filed charges in 2012 against the former superintendent of the district, Jesus Gandara, and then-school board members Pearl Quinones, Arlie Ricasa, and Greg Sandoval.

Also charged were Henry Amigable, who was Gilbane’s program director during the relevant period, and Rene Flores, who was chief executive officer of SGI.

The criminal probe was an outgrowth of reporting by the San Diego Union-Tribune about apparent gifts of travel, meals and sports tickets by contractors to the defendants and others while the donors were seeking contracts from the district.

In appealing the denial of the anti-SLAPP motion, the Gilbane/Seville defendants argued that Sturgeon should not have considered the grand jury and court documents because they were inadmissible hearsay.

But Justice Cynthia Aaron, writing for the Court of Appeal, said the trial judge had discretion to consider the evidence, noting that the testimony was given, and the plea forms were signed, under penalty of perjury, making their consideration no different than considering declarations under penalty of perjury.

She rejected the argument that it was unfair to consider the transcripts and documents when the defendants had no opportunity to cross-examine the grand jury witnesses and criminal defendants.

Turning to the merits, Aaron said the “chronology of campaign contributions and excessive gift giving” by the defendants, the district’s decision to award the joint venture a contract for management of new construction projects, and the decision to remove management of previously approved projects from a competitor who had been performing well and giving the work to Gilbane/SGI all helped create an inference that the gifts and contributions influenced the officials who made those decisions.”

In other conference action, the justices agreed to decide whether the brand name manufacturer of a pharmaceutical drug that divested all ownership interest in the drug be held liable for injuries caused years later by another manufacturer’s generic version of that drug.  The Fourth District’s Div. One answered in the affirmative in T.H. v. Novartis Pharmaceutical Corporation (2016) 245 Cal. App. 4th 589.


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