Monday, November 13, 2017
Court of Appeal:
Taxpayers Have Standing to Contest Law Based on Conflict
By a MetNews Staff Writer
The Fourth District Court of Appeal has held that taxpayers have standing to challenge an ordinance based on an alleged violation of a conflicts-of-interest statute.
Thursday’s opinion, by Acting Presiding Justice Patricia D. Benke, puts the San Diego-based Div. One at loggerheads with Div. Two, in Riverside, which held to the contrary in 2015. Benke’s opinion reinstates an action by San Diegans For Open Government seeking invalidation of an ordinance authorizing the sale of bonds to pay off indebtedness on previous bonds and refinance construction of a baseball stadium, as well as a resolution of the Public Facilities Financing Authority.
It reverses San Diego Superior Court Judge Joan M. Lewis’s dismissal of the nonprofit’s action for declaratory and injunctive relief on the ground that the group was not a party to the bond transaction and lacks standing.
Government Code Section
“We find plaintiff taxpayers have standing under Government Code section 1092 to challenge the ordinance on the grounds participants in the proposed transaction violated the conflict of interest provisions of section 1090.”
Sec. 1090 provides:
“Members of the Legislature, state, county, district, judicial district, and city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members. Nor shall state, county, district, judicial district, and city officers or employees be purchasers at any sale or vendors at any purchase made by them in their official capacity.”
The complaint alleges that some members of the financing team would personally profit from the building of a ballpark.
Avoiding ‘Even Temptation’
“[A]n official who had acted in good faith, will not be vindicated if public officials believe section 1090’s substantive provisions may only be enforced by the very public officials or public entities who have violated the statute’s provisions. Plainly, a public official’s duty to avoid even temptation cannot be advanced by adopting a rule which limits civil enforcement to that public official or public entities controlled by the official.”
She the self-evident nature of this proposition—that civil enforcement of section 1090 was never intended to be left in all cases to the parties to a government contract—arguably explains the silence of the courts” in earlier opinions which assumed standing, without discussing it. One of the opinions, Thomson v. Call, was a 1985 California Supreme Court decision.
Benke acknowledged a contrary holding in San Bernardino County v. Superior Court. The California Supreme Court denied review in that case.
She pointed out to two subsequent cases disagreed with San Bernardino and to contrary dictum in a 2015 case predating that case by two-and-a-half months.
In one of those subsequent cases—McGee v. Balfour Beatty Construction, LLC, decided by this district’s Eight—Justice Madeleine Flier, noting the decision in Thomson, observed that “our high court could not have concluded a contract was invalid in violation of section 1090 without implicitly concluding that the taxpayers challenging it had standing to challenge it.”
Benke’s opinion came in San Diegans for Open Government v. Public Facilities Financing, 2017 S.O.S. 5465
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