Public Law News

Owners and Operators of Municipal Sewer Systems May Be Liable Under CERCLA for Contamination Caused by Third Parties

2009-11-03T09:18:38-08:00

A recent decision by the U.S. District Court for the Eastern District of California may re-energize plaintiffs who hope to recover contamination clean-up costs from public agency sewer system owners. In Adobe Lumber, Inc. v. Hellman (2009 WL 2913415), the court held that the City of Woodland may be found liable under CERCLA for contamination resulting from the discharge of the solvent perchloroethylene (PCE) into the sanitary sewer by a dry cleaning business located in the City. Read More

California Supreme Court denies request for review, depublication of appellate decision regarding application of inclusionary housing ordinance to rental developments

2009-10-30T17:49:39-07:00

The California Supreme Court denied a petition for review and depublication of the Second District's decision in Palmer/Sixth Street Properties v. City of Los Angeles. The appellate court decision was significant in holding that Los Angeles was preempted, by a provision of the state's Costa-Hawkins Act, from enforcing its inclusionary housing ordinance against a development of rental apartments, The state provision in question, Civil Code, Section 1954.53(a), authorizes landlords to "establish the initial rental rate for a dwelling or unit." The appellate court had found that the local requirement to reserve a specified percentage of the rental units as low income units, conflicted with the state provision. The local ordinance was not saved by its "in-lieu" fee, which the appellate court found to be "inextricably intertwined with the invalid portion" of the ordinance.

Contract Terms That Apply Beyond this Galaxy… Seriously!

2009-10-29T12:25:00-07:00

It must be close to Halloween. At least that is the explanation for the interesting story that appears in today’s Wall Street Journal, entitled “Lawyerese Goes Galatic as Contracts Try to Master the Universe.” Written by Dionne Searcy and James Hagerty, (and containing a video clip) the article tells about NBC’s contracts for contestants who compete for its popular show, “America’s Got Talent.” These contracts contain terms which allow NBC to maintain rights to the performance and allow it to be “edited, in all media, throughout the universe, in perpetuity.” As lawyers, we’ve always imagined writing contract terms that allow our clients to expand their rights beyond the reach of their jurisdiction. NBC has taken its imagination one step further and wrote the language that provides it with rights beyond our solar system!

Gas Station Franchisee Entitled to Independent Claim for Loss of Business Goodwill

2009-10-28T16:03:32-07:00

The California Department of Transportation (Caltrans) will be required to pay a stipulated judgment ($704,500) for loss of business goodwill to the operator and sub-lessee of a gas station/mini mart whose franchise was terminated as a result of a condemnation by Caltrans. In "The People ex rel. Department of Transportation v. Mercedes Acosta, et al.," (Third App.Dist., C059064, October 26, 2009), the Court of Appeal affirmed that the Petroleum Marketing Practices Act (PMPA) does not limit a franchisee's recovery of loss of business goodwill to an allocation of the compensation recovered by the franchisor.

Caltrans argued that Code of Civil Procedure section 1263.510, which provides for the recovery of the loss of business goodwill in condemnation actions, is preempted by the PMPA (section 2806) whenever the business is a petroleum (gas station) franchisee. Caltrans contended that only a franchisor (such as BP, Shell, Chevron) may claim a loss of goodwill in a condemnation proceeding and that the franchisee is restricted to seeking an apportionment of the goodwill damages recovered by the franchisor.

Both the trial court and appellate court disagreed. The court concluded that the PMPA was enacted to regulate the relationship between franchisors and franchisees, including the termination or nonrenewal of petroleum franchises due to condemnation. Although the PMPA requires an apportionment of business goodwill compensation, if any, received by a franchisor, it does not prohibit a state from enacting law which provides a franchisee the independent ground for recovery of loss of business goodwill. In California, section 1263.510 specifically provides for the recovery of loss of business goodwill under certain conditions - - and it does not limit this right to particular types of businesses.

Pension Reform Group Pursuing California Ballot Initiative that Would Alter Many Public Employer Pension Benefits

2009-10-14T08:29:08-07:00

The Contra Costa Times has reported that the California Foundation for Fiscal Responsibility hopes to qualify a ballot initiative for the November 2010 election that would substantially alter many public employer pensions for new hires. The proposed changes include setting a uniform retirement benefit across California cities, fire districts, counties and other public agencies, restrictions on returning to work if an individual is receiving a pension benefit, and measures that are designed to avoid potential "spiking" of pension payments. To read an article describing the proposed ballot initiative click here.

Court of Appeal Revokes City's Anti-SLAPP Protection in Case Where Plaintiff Claimed First Amendment Protections

2009-10-12T10:36:04-07:00

The California Court of Appeal, Sixth Appellate District, recently reversed a trial court judgment entered in favor of the City of Morgan Hill pursuant to California's anti-SLAPP statute (Code of Civil Procedure section 425.16.) SLAPP is an acronym for "strategic lawsuit against public participation," and the anti-SLAPP statute is designed to allow a defendant to gain early dismissal of a lawsuit that a court determines is designed to chill the exercise of First Amendment rights.

In the case, Tichinin v. City of Morgan Hill, the Morgan Hill City Council adopted a resolution that condemned a local attorney for hiring a private investigator to conduct surveillance of the City Manager and then denying that he had done so. In response to the resolution, the plaintiff filed an action against the City, alleging a violation of his constitutional rights. From the beginning, the case garnered media attention, involving as it did rumors of an affair between city employees and private surveillance of public officials.

In reversing the trial court's judgment in favor the City under the anti-SLAPP statute, the Court of Appeal acknowledged that the plaintiff's lawsuit was based on acts by the City that qualify for protection under the anti-SLAPP statute. However, the Court also concluded that the plaintiff had made a prima facie showing that he himself was engaged in conduct protected by the First Amendment, that the City took an adverse action in response to his conduct with the intent to retaliate against him, and that the City's adverse action caused injuries that would deter a person of ordinary firmness from engaging in that conduct.

Read the Court's opinion here and check out the San Francisco Chronicle's summary of the interesting circumstances of the case here.

SB 375 - RTAC Issues Final Report on Setting Greenhouse Gas Emission Targets

2009-10-01T09:54:40-07:00

The latest step in the implementation of SB 375, a report issued by the Regional Targets Advisory Committee (RTAC) recommending methodologies for setting regional greenhouse gas (GhG) targets, was published yesterday. SB 375 requires that the California Air Resource Board (CARB) set regional GhG targets for passenger vehicles and light trucks for 2020 and 2035 by September 30, 2010 for the 18 Metropolitan Planning Organizations (MPOs) in the state. CARB’s target was initially set a five million metric tons reduction for transportation related planning programs. The RTAC, tasked with researching factors and methodologies to be considered in establishing the GhG targets, finalized and published its report on September 29. For more information on the RTAC process, see our previous blawg post.

The RTAC's final conclusions are especially relevant for localities amending their general plans in the next couple of years. The RTAC Report recommends that the targets be expressed as percent per-capita GhG reduction from the base year of 2005. Targets would be the most ambitious achievable for that region in order to respond to regional differences. The Report recommends that CARB create a list of Best Management Practices (BMPs) for tools to be used in target setting, target compliance and accuracy checks. The Report also recognizes that funding will be critical for the success of SB 375 and that the $90 million appropriation made by SB 732 for sustainability planning is not nearly enough funding for local governments to implement SB 375. To this end, the Report includes four pages of suggestions for the state in directing funds towards transit and sustainability planning in SB 375.

Going forward, the RTAC has recommended following steps for CARB to take in setting the targets: 1) MPOs must first prepare an analysis of their adopted fiscally constrained Regional Transportation Plan; 2) CARB uses these results to compile MPO-specific GhG emission levels for 2005 and GhG targets for 2020 and 2035; 3) CARB creates “most achievable ambitious greenhouse gas emission reduction” strategies to achieve targets; 4) MPOs analyze strategies; 5) CARB considers stakeholder feedback; 6) CARB recommends draft targets; 7) Final emission targets are set by September, 2010.

Much of the success of SB 375 hinges on the stringency of the GhG targets set by CARB and the funding available to localities for SB 375 implementation.

California Energy Commission Releases Guidelines on Energy Efficiency and Conservation Block Grants for Small Cities and Counties

2009-09-18T17:50:49-07:00

On September 16, the California Energy Commission (CEC) released long-awaited guidance on grant allocations for small cities and counties. Under federal law, the CEC is required to allocate 60% of its federal funding directly to small cities and counties. For California, this results in approximately $30 million for the 265 small cities and 44 small counties that are eligible under the program.

Court of Appeal Holds Developer Cannot Sue City for Violations of CEQA and Constitutional Law Where City Rejects Project Before Completing EIR

2009-09-18T17:41:35-07:00

In a significant published CEQA and land use decision, the Court of Appeal, Second Appellate District, rejected a developer’s challenge to the City of Los Angeles’ decision to reject the annexation and approval of a large development project without completing CEQA review.

The City had spent several years preparing an EIR under CEQA before the City made a policy decision to reject the project. The developer sued the City, alleging that the City was prohibited from making this policy determination and rejecting the project until it completed the EIR. The developer also alleged claims for violation of procedural and substantive due process and equal protection under the State and Federal Constitutions and sought $100 million in damages. The trial court sustained the City’s demurrer.

UPDATE: California Supreme Court to Review Appellate Court Determination that Prevailing Wage Law Does Not Apply to Locally Funded Projects of Charter Cities

2009-09-01T18:26:37-07:00

On August 19, 2009 the California Supreme Court granted review of the Fourth Appellate District's opinion in State Building & Construction Trades Council v. City of Chula Vista. In this case, the Court of Appeal determined on April 28, 2009 that on public works projects wholly financed by local funds, charter cities need not comply with California's Prevailing Wage Law. Specifically, Court concluded that the prevailing wage law does not address matters of statewide concern and therefore charter cities are not required to comply with the prevailing wage law on public works contracts that are financed solely from City revenues because such contracts are municipal affairs over which the City has paramount power under the California Constitution. Read more about the Appellate Court's opinion here.

The effect of the Supreme Court's grant of review is that the Appellate Court's published opinion can no longer be cited as precedential authority in California courts under California Rule of Court 8.1105(e)(1). Additionally, the Supreme Court's action places charter cities in California in limbo with respect to whether they are required to comply with the Prevailing Wage Law on locally unded projects. Check back to the Public Blawg later for further information.