Opposition Brief — Donlon v. City of Oxnard

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Bupreme Coort, U.S.

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OCT 1 1998

No. 98-440 OFFICE OF THE CLERK

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In The

Supreme Court of the United States

October Term, 1997

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ROGER M. DONLON, et al.,

Petitioners,

CITY OF OXNARD and COMMUNITY FACILITIES

DISTRICT NO. 88-1 OF THE CITY OF OXNARD

(OXNARD TOWN CENTER),

Respondents.

>

On Petition For Writ Of Certiorari

To The Court Of Appeal Of The State Of California,

Second District, Division Six

*

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

¢

KENNETH B. BLEY

(Counsel of Record)

Cox, Castte & NicHo.tson LLP

2049 Century Park East, 28th Floor

Los Angeles, California 90067

(310) 284-2231

Attorneys for Respondents City of

Oxnard and Community Facilities

District No. 88-1 of the City of

Oxnard (Oxnard Town Center)

COCK™LE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

Iil.

IV.

TABLE OF CONTENTS

SIATEMENT OF THE CASE, |. icc esccceenens

THE REASONS WHY THE COURT SHOULD

DENY THE DONLONS’ PETITION FOR WRIT

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IAPS oko s Sate AEE Se Fb es CEES.

A. Taxing Districts Are Typically Formed With-

out The Involvement Of Lienholders......

B. There Is Nothing Unconstitutional About

Giving A Governmental Lien Priority Over

A Previously Recorded Private Lien.......

C. Unpublished Opinions Are Frequently Used

By An Overworked Judiciary .............

CK PPR RAPS vcs ek sek sieges SPOS ES ea ies

5

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TABLE OF AUTHORITIES

Cases

City of Birmingham v. Smyer, 230 Ala. 234, 160 So.

FOU CRI 6 os ween keV dee vknc se VRWRE Re EEO

City of Richmond v. Williams, 102 Va. 733, 47 S.E.

Ue CRG iss ee a a ee

Cohens v. Virginia, 19 U.S. (6 Wheat.) 264 (1821).

Drainage Commissioners v. East Carolina Home &

Farm Association, 165 N.C. 697, 81 S.E. 947 (1914)

Federal Deposit Insurance Corp. v. City of New Iberia,

924 BAG GLO (Si LAG, AI FR A aw ks pes kx:

Fitchpatrick v. Botheras, 150 lowa 376, 130 N.W. 163

CRON oo as ee ee

Furman v. United States, 720 F.2d 263 (2d Cir. 1983)

German Savings & Loan Society v. Ramish, 138 Cal.

hawy ORF. Oe APR) os ise ie aa

Holmes v. Bowen, 60 Ohio. App. 168, 19 N.E.2d 974

CER ays oo wenn haces Coneek sues «i ie eee ECS

King v. Champion, 55 F.3d 522 (10th Cir. 1995)...

Leitch v. City of Dublin, 160 Ga. 691, 128 S.E. 889

CORO) os 55 acs Ka ass a eae aa eae

ESO Rae sie be a oS cos owede ceca need cae

Provident Institution for Savings v. Mayor and Alder-

men of Jersey City, 113 U.S. 506 (1885).........

Radio Station WOW v. Johnson, 326 U.S. 120 (1945)

Page

ili

TABLE OF AUTHORITIES - Continued

Page

Schad v. Arizona, 501 U.S. 624 (1991) ................. 4

Taylor v. McKeithen, 407 U.S. 191 (1972) .............. 5

United States v. Baynes, 548 F.2d 481 (3d Cir. 1977) ..... 6

Zipperer v. City of Fort Meyers, 41 F.3d 619 (11th

Rs MRED kG ee es pr oe ee 4

CONSTITUTIONS AND STATUTES

California Constitution, Article VI, § 14.............. 5

California Government Code §§ 53311, et seq.,........ 1

Rutes oF Court

California Rules of Court, Rule 977(b)(1)............. 6

Pee NE I NE 25 os ee sc Cisseds cosets ons 6

oO Ey 5. RE ane tener ene ee 6

Third Circuit Internal Operating Procedure, Ch. 6..... 6

POMerEn GaRRCUMEY MEMEBERS SOUMDAC) on cos cone cas caacce 6

Rppre NN PEN P Girk es i ook ck csc l evi cske ceewuin 6

RNIN OM I eo ak kya ca obs Sac eauees 6

IEA GOI ME OD ck plik esncadeceksesaviivncs 6

Eighth Circuit Rule 28A(k) and Internal Operating

NIN OUI pos in hy chiens biy Skew ys Rew ook < 6

NNER, MIE PRUNE NPIS 6 oss sce ccnacsescssasees 6

a a I evn keiuan 6

iv

TABLE OF AUTHORITIES - Continued

Bheverths. Cigtust Rises S6-15 ck occa eves eee scvecss 6

District of Columbia Circuit Rule 36................. 6

Federal Circuit Rules 36 and 47.6.................... 6

United States Supreme Court Rule 10................ 3

I.

STATEMENT OF THE CASE

In 1987, the Donlons bought an interest in a recorded

deed of trust securing a note for just under $12,000,000. (1

CT 188-192.)! The note called for annual payments of just

under $2,000,000 for five years with the balance,

$8,300,000, then being due. (1 CT 193.) The income from

the land was just over $154,000 a year. (Petition for

rehearing in the Court of Appeal at 2-3.) However, the

Donlons were willing to buy the note because the owners

of the land had plans for a substantial project which

called for “converting the [land] from its then use as

agricultural property to retail, commercial, residential

and industrial uses.” (SCT 189.)

In 1988, the City of Oxnard formed Community Facil-

ities District No. 88-1 of the City of Oxnard (Oxnard

Town Center) (the “District”) under the Mello-Roos Com-

munity Facilities Act of 1982, California Government

Code §§ 53311, et seq., to finance the construction of

streets, highways and other infrastructure which would

support the development of the land. (1 CT 12.) In order

to do this, the District was authorized to, and did, sell

almost $15,000,000 in bonds which were to be repaid

through the levy and collection of special taxes. (Id.)

The project did not go forward because of adverse

economic conditions. The owner of the project stopped

paying the special taxes in 1991. (1 CT 14.) In 1993, the

District and the City sued to judicially foreclose the lien

1 “CT” means the Clerk’s Transcript on appeal and “SCT”

the Supplemental Clerk’s Transcript.

provided by California law to secure the payment of the

special taxes. (1 CT 1.) At the time the judgment was

entered in 1996, the unpaid special taxes were in excess of

$12,000,000 with interest mounting at the rate of 1.5% per

month. (Appendix C to the Petition at 8c-10c.)

The Court of Appeal’s decision affirming the trial

court’s judgment made it clear that California law gives

the lien securing the special taxes a super priority

(Appendix A to the Petition at 20a-22a) which means that

the Donlons’ deed of trust — the security for their note -

will be wiped out when the lien securing the special taxes

is foreclosed.

aa

THE REASONS WHY THE COURT SHOULD DENY

THE DONLONS’ PETITION FOR WRIT

OF CERTIORARI

The questions presented by the Donlons fall into two

categories. The first has to do with the validity of the

process by which California law allows the adoption of

special taxes and the priority that it accords to the lien

securing their repayment. The second has to do with the

validity of unpublished appellate opinions.

The Donlons are, of course, unhappy that their

investment, made in the heady days of 1987, has ended

up as yet another victim of the California real estate

depression of the 1990’s. Throughout the foreclosure pro-

ceedings, the Donlons have made every argument — con-

stitutional, statutory and ad hominem — to save themselves

from what turned out to be a bad investment decision.

5 a =

However, the Donlons’ unhappiness at having made

a bad investment decision in 1987 is no reason why the

Court should grant their petition in 1998 because neither

of the criteria set forth in Rule 10 for granting a petition

for a writ of certiorari to review a decision of a state court

has been met. The Donlons have not cited a single case

which shows that the California Court of Appeal’s opin-

ion conflicts with the decision of any other court; that it

presents an important, but unsettled, question of federal

law; or that it conflicts with relevant decisions of this

Court.

¢

Il.

ARGUMENT

A. Taxing Districts Are Typically Formed Without

The Involvement Of Lienholders

The situation in the case at bar has arisen repeatedly

in the context of special assessment districts. In each case,

the lienholder has recorded his or her lien, a special

assessment district has been formed without notice being

given to the lienholder, an assessment secured by a lien

which has priority over private liens has been imposed,

the landowner has failed to pay the assessment, and the

holder of the previously recorded lien has attacked the

priority of the assessment lien on the ground that due

process was denied because he or she was not given

notice of the formation of the district. In every case,

federal and state, the lienholder has lost.? See, e.g., Zip-

perer v. City of Fort Meyers, 41 F.3d 619 (11th Cir. 1995),

Federal Deposit Insurance Corp. v. City of New Iberia, 924

F.2d 610 (5th Cir. 1991), Holmes v. Bowen, 60 Ohio. App.

168, 19 N.E.2d 974 (1938), City of Birmingham v. Smyer, 230

Ala. 234, 160 So. 764 (1935), Mortgage Company v. Lory, 109 |

W. Va. 310, 154 S.E. 136 (1930), Leitch v. City of Dublin, 160 i

Ga. 691, 128 S.E. 889 (1925), Drainage Commissioners v. East

Carolina Home & Farm Association, 165 N.C. 697, 81 S.E.

947 (1914), Fitchpatrick v. Botheras, 150 lowa 376, 130 N.W.

163 (1911), City of Richmond v. Williams, 102 Va. 733, 47

S.E. 844 (1904), and German Savings & Loan Society v.

Ramish, 138 Cal. 120, 69 P. 89 (1902).

The Donlons have not cited a single case to the

contrary.®

2 The Donlons spend much of their Petition arguing that

the Court of Appeal misunderstood and misapplied California

statutory and case law. (Petition at 9-19.) “These are matters of

state law and not our concern.” Radio Station WOW v. Johnson,

326 U.S. 120, 129 (1945). This follows from the Court’s

fundamental principle that it is not free to substitute its

interpretation of state law for those of a state court. Schad v.

Arizona, 501 U.S. 624, 636 (1991).

3 None of the federal cases cited by the Donlons deal with

facts which are even close to those presented by the case at bar.

As such, they provide no support for the Donlons’ position. |

Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 399-400 (1821).

NIM ALINE Re gre MME NC Med ee APR OS Mem |

B. There Is Nothing Unconstitutional About Giv-

ing A Governmenial Lien Priority Over A Pre-

viously Recorded Private Lien

This Court held over 100 years ago that government

could constitutionally give a governmental lien priority

over a previously recorded private lien. Provident Institu-

tion for Savings v. Mayor and Aldermen of Jersey City, 113

U.S. 506 (1885).

The Donlons have not cited a single case to the

contrary.

C. Unpublished Opinions Are Frequently Used By

An Overworked Judiciary

The California Constitution, Article VI, § 14, requires

that every decision of a California appellate court be in

writing with reasons stated. There is no corresponding

federal constitutional requirement and case law has made

it clear that the use of unpublished summary decisions

pass constitutional muster.

“Petitioner’s other complaints about the

Oklahoma court’s issuance of a summary opin-

ion in his direct appeal are similarly unavailing.

First, as we have said before, there is nothing

inherently objectionable in the Oklahoma

court’s use of summary opinions in unpublished

cases.” King v. Champion, 55 F.3d 522, 526 (10th

Cir. 1995).

Several federal Circuit Courts of Appeal have cited

this Court’s statement in Taylor v. McKeithen, 407 U.S. 191,

194 n.4 (1972), which agreed that the Courts of Appeals

“should have wide latitude in their decisions of whether

or how to write opinions.” See, e.g., Furman v. United

States, 72U F.2d 263, 264-265 (2d Cir. 1983), and United

States v. Baynes, 548 F.2d 481 (3d Cir. 1977).

In fact, every one of the federal Circuits has adopted

local rules which provide for the designation of opinions

as applying only to the litigants involved, having no

precedential value, with many of the local rules expressly

prohibiting the publication of these opinions. First Circuit

Rule 36.2; Second Circuit Rule § 0.23; Third Circuit Inter-

nal Operating Procedure, Ch. 6; Fourth Circuit Rules

36(a)-(c); Fifth Circuit Rule 47.5; Sixth Circuit Rule 24;

Seventh Circuit Rule 53; Eighth Circuit Rule 28A(k) and

Internal Operating Procedures, App. I; Ninth Circuit

Rules 36-1-3; Tenth Circuit Rules 36.1-.3; Eleventh Circuit

Rules 36-1-3; District of Columbia Circuit Rule 36; and

Federal Circuit Rules 36 and 47.6.

All of the rules cited above make it clear that, while

an unpublished opinion may not be cited as precedent, it

nevertheless invokes the doctrines of res judicata, law of

the case and collateral estoppel.* Thus, all litigants — the

ones most involved in any case - receive all of the protec-

tion that the judicial process provides whether or not an

opinion is published.

The Donlons have not cited a single case to the

contrary.

oe

4 This is the rule in California. See Rule 977(b)(1) of the

California Rules of Court, quoted in the Petition at 24.

IV.

CONCLUSION

The City and the District contend that the Donlons’

petition for writ of certiorari should be denied.

Respectfully submitted,

KENNETH B. BLEY

(Counsel of Record)

Cox, Castte & NicHotson LLP

2049 Century Park East, 28th Floor

Los Angeles, California 90067

(310) 284-2231

Attorneys for Respondents City of

Oxnard and Community Facilities

District No. 88-1 of the City of

Oxnard (Oxnard Town Center)

DATED: October 1, 1998