Tuesday, August 9, 2016
Supreme Court Holds:
Montebello Officials Satisfied First Prong of Anti-SLAPP Law
By KENNETH OFGANG, Staff Writer
A suit by the City of Montebello against several of its former officials over alleged conflicts of interest arose from protected activity within the meaning of the anti-SLAPP statute, the state Supreme Court ruled yesterday.
In a 5-2 decision, the court reversed a ruling by Div. One of this district’s Court of Appeal, which allowed the city’s action to go forward. The high court said the defendants showed that the suit arose from their exercise of their free speech rights, shifting the burden to the city to establish a likelihood of prevailing in the declaratory relief action.
The ruling sends the case back to the Court of Appeal for a determination of whether the city carried that burden.
The city contends that former council members Rosemarie Vasquez, Robert Urteaga and Kathy Salazar and former City Administrator Richard Torres 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.
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 was affirmed last year by the Court of Appeal.
The defendants sought to strike the conflict-of-interest claims on the grounds that their council votes constituted protected activity in connection with a public issue. The city responded that the motion should be denied on any of three grounds—that the city attorney filed the suit as a “public prosecutor,” within the meaning of an express exemption from the anti-SLAPP statute; that the defendants’ actions, permeated as they were with conflicts of interest, did not constitute protected activity; and that the city would likely prevail on the merits.
Los Angeles Superior Court Judge Rolf Treu rejected the first two arguments, but denied the motion on the ground that the city made a sufficient showing it was likely to prevail. The Court of Appeal affirmed, but did so on the ground that the suit did not arise from protected activity and did not address the likelihood of the city prevailing.
Justice Carol Corrigan, writing yesterday for the high court, said the lower courts were correct in ruling that the city attorney was not acting as a public prosecutor. While the Court of Appeal has been divided on the scope of the exemption, the correct interpretation is a narrow one—an action brought by the city attorney as counsel for the local government, not as a prosecutor, is not exempt, the justice said.
Corrigan went on to say, however, that the suit did arise from protected activity, and that the Court of Appeal must now review Treu’s ruling on the second prong of the anti-SLAPP analysis.
“The councilmember defendants’ votes were cast in furtherance of their rights of advocacy and communication with their constituents on the subject of the Athens contract,” she wrote.
She distinguished Nevada Commission on Ethics v. Carrigan (2011) 564 U.S. 117, 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.
The anti-SLAPP statute, she emphasized, not only applies to activity protected by the constitutional rights of speech and petition, but to acts “in furtherance of” those rights. The trial judge was correct in treating the city’s claim that the defendants acted illegally in voting despite the existence of conflicts of interest as relevant at the second step of the analysis, rather than the first, Corrigan said.
She was joined by Chief Justice Tani G. Cantil-Sakauye and Justices Kathryn M. Werdegar, Ming Chin, and Mariano-Florentino Cuéllar.
Justice Goodwin H. Liu, joined by Justice Leondra R. Kruger, argued that the Court of Appeal ruling should be affirmed.
“Today’s decision expands the anti-SLAPP statute beyond its proper bounds, making it harder to combat public corruption in government contracting and other abuses of power,” Liu wrote. “Because the anti-SLAPP statute does not cover the act of voting by an elected official, I respectfully dissent from today’s contrary holding.”
City of Montebello v. Vasquez, 16 S.O.S. 3995, was argued in the Supreme Court by Frank Revere of Revere & Wallace for the defendants and by Raul F. Salinas of AlvaradoSmith for the city.
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