Lawsuit raises cities’ fears over closed-door pacts

In a rare action with statewide implications, a California appeals court
ruled that it will reconsider whether the Malibu City Council violated the
state’s open-meeting law for local governments when it approved a legal
settlement with a developer during the closed-session portion of a meeting.

Legal officials in Malibu and across the state say if the court’s September
ruling that Malibu violated the Ralph M. Brown Act is not reversed, then
California’s local governments will be compromised in their ability to
settle litigation.

“A lawyer must have the ability to give advice to a client. If a city
attorney must give the advice in an open meeting, then the city is put at an
unfair disadvantage,” said Michele Beal Bagneris, the city attorney of
Pasadena and the president of the Legal Advocacy Committee of the League of
California Cities. The League supports Malibu’s position.

Media advocates see the issue differently, saying closed meetings thwart
the public’s access to government decision-making.

Regardless of the differing perspectives, there is little doubt that the
ruling could have a major impact on the state’s 52-year-old Brown Act, the
law that governs how much of an agency’s business must be conducted in
public.

The decision by a three-judge panel from the 2nd District Court of Appeal
said the settlement involved zoning issues that required a public hearing.
The court noted that the Brown Act allows for certain kinds of legal
settlements to be approved in closed session, but not those dealing with
city zoning.

The court said the settlement was invalid not only for that reason, but
because of other issues raised by a Malibu homeowners association, which
filed the lawsuit against the city.

However, the court said it would reconsider only the Brown Act issue raised
by the case.

Shortly after the September opinion was issued, Malibu City Attorney Christi
Hogin publicly announced that the panel had mistakenly identified the
settlement agreement as a final step in a permitting process, which she said
would have required a public hearing. Actually, Hogin said, the settlement
was the beginning of the procedure, because the developer would still have
to go through the regular permitting process before construction could
begin.

Hogin also said that the law would make it difficult for municipalities in
the future to discuss legal settlements, because they would be required to
do it in public, thus giving opponents the ability to listen in on strategy
discussions.

On Oct. 11, San Francisco Deputy City Attorney Paul Zarefsky sent a letter
to the Court of Appeal panel requesting it reconsider the matter.
“The decision unsettles previous understandings and complicates what has
been an easily applied rule,” Zarefsky wrote. Hogin declined to speculate on
whether the San Francisco letter influenced the justices’ decision to grant
the request of Malibu and the developer, Trancas PCH, for a rehearing.
Not everybody is upset with the Court of Appeal’s original ruling, however.
Peter Scheer, a lawyer and journalist who heads the California First
Amendment Coalition, admitted the court’s decision was radical, but said it
was a good one.

“There is a narrow exception to the Brown Act to discuss, behind closed
doors, settlements to pending litigation,” Scheer said. “But that can’t be
used as an end run around other requirements in the Brown Act and
requirements in other laws that mandate that various decisions of a
legislative nature be made in public.”

Scheer said he does not accept Hogin’s argument that the council didn’t
actually approve any finalized zoning changes because a public hearing would
still have to be conducted. He said by agreeing to the settlement, the
Malibu City Council had already declared how it planned to vote on the
issue, and the public was not able to participate in the meeting when the
council members made that decision.

“Can they [the council] be forced to vote that way [when the developer comes
before the council for permits]? That doesn’t matter,” Scheer said. “In no
small way they [the council] have made commitments to act in a particular
way in the future.”

Alan Block, a Los Angeles attorney who represents the homeowners
association, said Scheer’s argument does not fly, because it is more than
just the city that has final say on permitting. Since Malibu is within the
coastal zone, this project must receive a coastal development permit, over
which the California Coastal Commission has final say.

A Court of Appeal panel almost never grants a rehearing. But even those who
hope the panel will go in a different direction the second time around admit
it is impossible to assume that is what will happen. And Dennis Winston, an
attorney from a Los Angeles firm who supports the Court of Appeal’s
decision, pointed out that his firm represented a client in a 2001 case
against a business improvement district in Hollywood in which a Court of
Appeal panel declared the district must follow the Brown Act. The panel
agreed to rehear the matter, but came back with an even stronger opinion
against the district.

The court has asked the parties involved in the case to turn in briefs on
the Brown Act matter by Nov. 15. The court will not take any further oral
arguments prior to making its second ruling.