Court values real estate over reform

On Dec. 14 Judge Geoffrey Howard issued an opinion denying a merit resolution of a lawsuit to stop building permits for real estate

projects because Los Angeles City councilmembers approved them after being paid off. (AIDS Healthcare Foundation v. City of Los Angeles, 2022 DJDAR 12471).

Judge Howard, a respected Marin County Superior Court Judge, was specially assigned to the Second Appellate District, Division Seven, to hear the case. In his opinion, Judge Howard recognized the case "pits the anticorruption objectives" of the Political Reform Act of 1974 (Gov. Code §

81000) against "the desire for certainty in real estate development." Judge Howard, a former partner at Morgan, Lewis, Bockius LLP, valued real estate over reform, and selected a 90-day statute of limitations to summarily dismiss the case.

The AIDS Healthcare Foundation (AHF) filed the lawsuit to stop the City from issuing building permits for real estate projects the City Council Planning and Land Use Management (PLUM) Committee approved, while two of its members were part of an extensive, ongoing bribery scheme.

AHF invoked the Court's injunctive power in Government Code § 91003 to order the City to not issue permits for the illegally approved real estate deals. The Los Angeles City Attorney argued the permits should be issued because the AHF had not sued within a 90-day statute of limitations. The AHF contended a 3-year statute of limitations applied because the legal challenge was based upon "a liability created by statute," Government

Code § 91003.

Judge Howard, doing what Justice Oliver Wendell Holmes, Jr. warned us that judges sometimes do, first decided in favor of "certainty in real estate development" and then wrote an opinion rationalizing his choice and dismissed the case. In other words, Judge Howard found certainty about real estate development is more important than achieving the anti- corruption objectives of the Political Reform Act.

The AHF case is an egregious example of a court favoring its own value choices over previously adopted reform laws. Judge Howard gives the Political Reform Act a rather bland purpose: "it concerned elections and different methods for preventing corruption and undue influence in political campaigns and governmental activities."

The 1974 Political Reform Act, enacted by initiative, was supported by

69.8% of California voters. California voters were the first to adopt an omnibus political reform law in the aftermath of Watergate. The anti- corruption goals of the law are made clear. For example, Political Reform Act's Government Code Section 81001(b) declares that "Public officials,

whether elected or appointed, should perform their duties in an impartial manner, free from bias caused by their own financial interests or the financial interests of persons who have supported them." A remedy within the Political Reform Act authorizes courts to stop, by injunction, the reaping of benefits from corrupt official acts.

Judge Howard's justifications for adopting a statute of limitation to render the injunctive power under the Political Reform Act a nullity are not persuasive. The Judge's cited reasons are as follows: (1) the 90-day statute was adopted before the Political Reform Act; (2) the "chilling effect on the confidence" that property owners and local governments can proceed with projects; and (3) the gravamen of the case implicates the 90- day statute because the challenge was not to the corrupt actions but to the land use decisions.

Prior law was not a sound reason to apply the 90-day limit. Sections 81001(h) and 81002(f) of the Political Reform Act recognized "Previous laws regulating political practices have suffered from inadequate enforcement" and directed "adequate mechanisms should be provided to public officials and private citizens in order that this title will be vigorously enforced." A 3-year statute of limitations would have been such a mechanism.

The second reason given for adopting the 90-day limit, reducing the chilling effect of a longer limitations period on the confidence of property owners and local government in real estate projects, also seems invalid and out of context. It's one thing to say objections to projects should be timely resolved; it's quite another to say a shorter period is needed to reassure property owners in corrupt real estate schemes.

The last reason relied upon for the short limitations period was the arbitrary finding that gravamen of the case was not about corruption but "an attack on, or review of, the PLUM committee's decisions related to permitting and real estate project approvals." Judge Howard wrote the Political Reform Act claim out of the case, enabling him to characterize it as a routine land use challenge and dismiss it.

The decision to dismiss the case was made at the first stage before the AHF could develop the facts in discovery. Had the case gone forward, the trial court could have fashioned a remedy that provided both certainty and vigorous enforcement of the Political Reform Act.