UPDATED with reaction from City of Anaheim
Superior Court Judge David McEachen has dismissed the OCCORD lawsuit against the City of Anaheim’s economic assistance agreement with the GardenWalk Hotels project. The left-wing advocacy group has been represented in this suit by liberal litigator Cory Briggs (who is also CATER’s partner-in-litigation against the Anaheim Convention Center expansion).
Judge McEachen ruling clears the way for the development of two luxury hotels next to the GardenWalk, which will in turn enhance the Anaheim Resort’s competitiveness for higher-end conventions and more affluent vacationers.
Here is Judge McEachen’s ruling:
The Demurrers filed by Defendants City of Anaheim et al and by Gardenwalk Hotel I, LLC are SUSTAINED without leave to amend.
As the Court previously stated in its January 30, 2015 ruling, the EAA’s at issue represent a public financial commitment for the development of projects in the City and are thus subject to the validation statutes. As no action was filed within 60 days of the approval of the EAA, claims as to the validity of the EAAs are untimely. (C.C.P. Section 869; Kaatz v. City of Seaside (2006) 143 Cal.App.4th 19, 30; Walters v. County of Plumas (1976) 61 Cal. App. 3d 460,467-468.)
Plaintiff was granted leave to amend to the extent Plaintiff could state a claim that would not concern the validity of the EAAs. However, Plaintiff’s Second Amended Complaint is instead an essentially duplicative attempt to attack the validity of the EAAs. For the reasons stated in the Court’s prior ruling, it is thus time-barred.
In addition, the allegations in the Second Amended Complaint again fail to plead a cognizable claim. An impermissible financial interest does not arise based only on votes favorable to campaign contributors: instead, there must be some financial or pecuniary benefit to the governmental official which could sway his or her judgment. (Breakzone Billiards v. City of Torrance (2000) 81 Cal.App.4th 1205, 1230.) Claims based on the assumption that accepting campaign contributions from persons interested in the EAAs created conflicts of interest for the recipients thus fail as a matter of law. Reference to a newspaper article and email in the Opposition fail to cure this defect, as even if such allegations had been made in the Second Amended Complaint, they would be insufficient to show a cognizable claim, as an alleged unreported meal long after the vote at issue is insufficient to demonstrate a “financial or pecuniary benefit to the governmental official which could sway his or her judgment.”
The Second Amended Complaint’s claims as to Rutan & Tucker LLP also again fail to state a cognizable claim. The Second Amended Complaint now adds allegations that the firm obtained work due to overlapping representation. (Second Amended Complaint paragraph 12(B)(iv).) But that still assumes a financial interest based on fees charged for services performed. As noted in Quantification Settlement Agreement Cases (2011) 201 Cal.App.4th 758,820, counsel do not violate Section1090 by negotiating agreements with or for a public entity, absent evidence that the attorney or firm “stood to gain or lose financially” based thereon. Allegations that counsel was paid for services rendered are insufficient to state a Section1090 violation.
The Demurrers are thus sustained. In addition, as the Second Amended Complaint demonstrates that Plaintiff has been unable to amend to state a cognizable claim, and no basis for further amendment which would cure the defects in the pleading has been identified, the Demurrers are sustained without leave to amend.
Plaintiff’s unopposed Request for Judicial Notice as to Ch. 1.09 of the Anaheim Municipal Code is GRANTED under Ev. Code Section452(b).
Gardenwalk’s unopposed Request for Judicial Notice as to Exs. 1 and 2 is GRANTED under Ev. Code Section 452(d) and (b), respectively.
City’s Evidentiary Objections are SUSTAINED (hearsay).
Counsel for City is to give notice of these rulings. Moving parties are to submit proposed orders in accordance with C.R.C. 3.1312.
5:46 p.m on May 26: The City of Anaheim issued this statement a few minutes ago:
CITY OF ANAHEIM PREVAILS IN SUIT BROUGHT BY OCCORD, CHALLENGING GARDENWALK ECONOMIC ASSISTANCE AGREEMENTS
Court rules that suit must be dismissed
ANAHEIM, Calif. (May 26, 2015) Today, the Orange County Superior Court unequivocally rejected the false allegations brought by a special interest group known as OCCORD and its lawyer Cory Briggs, who used litigation as a weapon to stymie economic growth in Anaheim. The City is grateful that the Court found that the claims had no merit and, accordingly, ruled that OCCORD’s suit must be dismissed.
The City Council’s decision in 2013 to approve economic incentives to construct high-end hotels at the GardenWalk in Anaheim was the result of the Council’s wisdom to plan for Anaheim’s future by bringing jobs, adding revenue to the City’s General Fund by providing more high-end hotel accommodations to visitors and, in the process, funding expanded City services that benefit the entire community.
Anaheim’s leadership in the tourism industry benefits the City and all of its residents. Throughout Orange County, tourism supports more than 150,000 local, permanent jobs and more than $9 billion in local economic activity – both of which continue to increase. The Anaheim Resort contributes a net of more than $67 million dollars annually from tax revenues which are comprised of Transient Occupancy Taxes, Sales and Use Taxes, Property Taxes, and Business License Taxes.
OCCORD filed their lawsuit on May 9, 2014, nearly one year after the City Council’s approval on May 14, 2013 for these agreements, in an attempt to stop a project that was of benefit to the entire Anaheim community. “The public should realize that the disruptive litigation practices of OCCORD, and those like them, have consequences: Lawsuits such as this cost the City economically and, for those doing business in the City, creates uncertainty and delay,” said City Attorney Michael R.W. Houston.
For more information on the City of Anaheim’s GardenWalk Hotel economic assistance, please click here.