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San Diegans for Open Government v. Public Facilities Financing Authority of City of San Diego

California Court of Appeals, Fourth District, First Division

November 9, 2017

SAN DIEGANS FOR OPEN GOVERNMENT, Plaintiff and Appellant,
v.
PUBLIC FACILITIES FINANCING AUTHORITY OF THE CITY OF SAN DIEGO et al., Defendants and Respondents.

         APPEAL from a judgment of the Superior Court of San Diego County No. 37-2015-00016536- CU-MC-CTL, Joan M. Lewis, Judge. Reversed.

          Briggs Law Corporation and Cory J. Briggs; Higgs Fletcher & Mack and Rachel E. Moffitt, for Plaintiff and Appellant.

          Mara W. Elliott, San Diego City Attorney, David J. Karlin, Assistant City Attorney and Meghan Ashley Wharton, Deputy City Attorney, for Defendants and Respondents.

          BENKE, Acting P. J.

         At issue here is a municipal ordinance, which authorized the issuance of bonds to be used to refinance the defendants' obligations with respect to construction of a baseball park. We find plaintiff taxpayers have standing under Government Code[1] section 1092 to challenge the ordinance on the grounds participants in the proposed transaction violated the conflict of interest provisions of section 1090. Accordingly, we must reverse the trial court's judgment dismissing plaintiff's complaint, which judgment was entered on the grounds plaintiffs do not have standing to challenge the ordinance.

         FACTUAL AND PROCEDURAL BACKGROUND

         On March 17, 2015, respondents City of San Diego (the city) and Public Facilities Financing Authority (PFFA)[2] adopted San Diego Ordinance No. 0-20469 and PFFA Resolution No. FA-2015-2, which authorized issuance of 2015 Refunding Bonds (2015 Bonds). The 2015 Bonds, if issued, will refund and refinance the remaining amount owed by the city on bonds issued in 2007 with respect to construction of the baseball stadium at Petco Park.

         On May 18, 2015, San Diegans For Open Government (SDFOG) filed a complaint that challenged the validity of the 2015 Bonds. SDFOG alleged that it is a nonprofit taxpayer organization and that at least one of its members is a resident of the city. SDFOG alleged, among other claims, that one or more members of the financing team that participated in preparation of the 2015 Bonds had a financial interest in the sale of the bonds and the existence of that interest in turn gave rise to a violation of section 1090. SDFOG sought, among other remedies, declaratory relief.

         Prior to trial on the merits, SDFOG dismissed all of its substantive claims, other than its allegation the city had violated section 1090. Before commencing trial on the merits of SDFOG's section 1090 claim, the trial court asked for and received briefing from the parties with respect to SDFOG's standing. After considering the parties' briefing and the argument of counsel, the trial court determined, as a matter of law, that because SDFOG was not a party to the bond transaction, it lacked standing to pursue a section 1090 challenge. The trial court dismissed SDFOG's complaint, and judgment was entered in the city's favor. SDFOG filed a timely notice of appeal.

         I

         Where, as here, there is no dispute as to the material facts and the appellant only challenges a trial court's interpretation of law, we review the trial court's ruling de novo. (See Ghirardo v. Antonio (1994) 8 Cal.4th 791, 799.)

         II

         A. Section 1090

         Section 1090, subdivision (a) states: "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 ...


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