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City of Pasadena v. Cohen

California Court of Appeals, Third District, Sacramento

August 19, 2014

CITY OF PASADENA et al., Plaintiffs and Respondents,
v.
MICHAEL COHEN, as Director, etc., Defendant and Appellant.

APPEAL from a judgment of the Superior Court of Sacramento County No. 34-2012-00134585-CU-MC-GDS, Shelleyanne W. L. Chang, Judge.

Page 1462

COUNSEL

Kamala D. Harris, Attorney General, Douglas J. Woods, Assistant Attorney General, Marc A. LeForestier, Stephanie F. Zook and Seth E. Goldstein, Deputy Attorneys General, for Defendant and Appellant.

Kane, Ballmer & Berkman, Murray O. Kane, Guillermo A. Frias; and R. Bruce Tepper for Plaintiffs and Respondents.

OPINION

BUTZ, J.

Given the dire condition of state finances, in the summer of 2011 the Legislature enacted legislation (Stats. 2011, 1st Ex. Sess. 2011-2012, ch.

Page 1463

5X (hereafter chapter 5X)), primarily within the Health and Safety Code, [1] that barred any new redevelopment agency obligations, and established procedures for the windup and dissolution of the obligations of the nearly 400 redevelopment agencies then existing. (California Redevelopment Assn. v. Matosantos (2011) 53 Cal.4th 231, 241, 246, 250-251, 253 [135 Cal.Rptr.3d 683, 267 P.3d 580] (Matosantos).)[2] This case stems from a dispute arising out of a process we might call the “Great Dissolution.”

Defendant Department of Finance (the Department) disapproved two items included in the “Recognized Obligation Payment Schedule” (ROPS)[3] of plaintiff City of Pasadena (the City).[4] The City acts as “successor agency” to the Pasadena Community Development Commission[5] (§§ 34171, subd. (j), 34173), determining that these were not enforceable obligations of the Pasadena redevelopment agency. Both obligations expire in 2014; the first apparently involved reimbursement for pension bonds and the other for subsidized housing bonds, both pursuant to a 1987 legislative imprimatur well antedating the Great Dissolution. (§ 33608.) The Department previously had approved these two items in ROPS I and II.

The City filed the present action, seeking injunctive and declaratory relief against defendant Ana Matosantos in her official capacity as director of the Department.[6] The trial court granted the City’s application for a preliminary

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injunction, finding that the City had some likelihood of prevailing on the merits, and had a significant risk of irreparable harm otherwise. The trial court ordered defendant Auditor-Controller of Los Angeles County (L.A. Auditor-Controller) to sequester the funds for the two disapproved obligations pending a trial on the merits, and to refrain from distributing them to the taxing entities that are otherwise entitled to the remainder of the property tax proceeds payable to the successor agency. (§§ 34171, subd. (k) [defining “ ‘[t]axing entities’ ”], 34182, subd. (c) [“county auditor-controller[s]” are administrators of trust funds for property taxes formerly payable to redevelopment agencies] & 34183, subd. (a) [establishing entitlement of taxing entities to remainder of distribution of property taxes after payment of enforceable obligations].) Defendant Matosantos alone filed the March 2013 notice of appeal.[7]

In something of an afterthought, the Department makes what should be a threshold claim that the City was required to seek relief in traditional mandate from the Department’s ruling that the two ROPS payments were not enforceable obligations, rather than in an action for declaratory relief. On the merits, the Department argues that the City in fact does not have any likelihood of prevailing under a proper interpretation of the pertinent statutes involved. The Department additionally argues the trial court incorrectly found that there was a risk of irreparable harm to the City. In our ...


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