San Diego scores victory against taxpayer suit against ballpark bonds

The state Supreme Court, reversing a 4th District Court of Appeal decision, ruled Thursday nonparties cannot sue to block the refinancing of government debt on bonds used to finance the construction of Petco Park, San Diego's baseball stadium.

The ruling will allow the plaintiffs to pursue the lawsuit under another statute, and the case was remanded to the appellate court to address that question.

Meghan A. Wharton of the San Diego city attorney's office, who argued the case before the state Supreme Court, agreed the decision will give the taxpayer group another chance at standing under Code of Civil Procedure Section 526a. But she said that section cannot be used to halt a bond issue.

Michael G. Colantuono, a partner with Colantuono, Highsmith & Whatley PC in Grass Valley who often represents San Diego but was not involved in this case, said the ruling will give school districts and other local agencies a strong legal argument against efforts to block the issuance of debt.

"It is a very narrow and technical decision, but still really important," Colantuono said.

Justice Carol A. Corrigan wrote the main question was whether Government Code Section 1092 gives citizen-taxpayer groups standing to file a lawsuit to block the refinancing of the ballpark debt due to a conflict of interest by a member of the financing authority.

"None of the cases the Court of Appeal cites support the conclusion that a nonparty may sue under Section 1092 to avoid a contract," she wrote in a 6-1 decision. San Diegans for Open Government v. Public Facilities Financing Authority of the City of San Diego, 2019 DJDAR 12064 (California Supreme Court, filed Dec. 26, 2019).

Chief Justice Tani Cantil-Sakauye dissented, saying the majority's reasoning was too narrow and the taxpayers should have standing to sue.

Rachel E. Moffitt, an attorney with Higgs, Fletcher & Mack who represents the taxpayer group, could not be reached for comment Thursday.

-- Craig Anderson