Petition for Writ of Certiorari — Allen v. City of Duarte

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Supreme Court, U.8,

. 94 674 OCT 111994

N pie OF THE CLERK

In the Supreme Court

OF THE

United States

ALICE ALLEN and LAURA FEINNER

Petitioners,

VS.

CITY OF DUARTE and DUARTE REDEVELOPMENT]!

AGENCY,

political subdivisions of the

State of California

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE SUPERIOR COURT OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

STEPHEN R. BARNET I JONATHAN LEHRER-

College & Bancroft GRAIWER

387 Boalt Hall 727 Wilshire Blvd., Ste. 500

Berkeley, CA 94720 Los Angeles, CA 90010

Telephone: (510) 642-5049

Attorney of record

JOHN E. RITIMAYER

BEVERLY W. STANE

Legal Services Program for Pasadena

and San Gabriel-Pomona Valley

221 E. Walnut St. Ste 102

Pasadena, CA 91101

Attorneys for Petitioner

October 11, 1994

QUESTION PRESENTED

Whether the California Court of Appeal violated

Petitioners’ rights under the Equal Protection and Due

Process Clauses of the Fourteenth Amendment when

it ruled that Petitioners lacked standing to challenge

the redevelopment plan of the city in which Petitioners

resided and paid a tax, because Petitioners did not pay

a tax on real property in the city.

TABLE OF CONTENTS

Page

QUESTION PRESENTED ............... i

TABLE OF CONTENTS ................ ii

TABLE OF AUTHORITIES ............. iv

OPINIONS BELOW .................... 1

FUREY 5 a he sk avd nd dawendone, ]

CONSTITUTIONAL PROVISIONS

i rN eg OTE oe =, 2

STATUTES INVOLVED ................ 2

STATEMENT OF THE CASE ............ 4

REASONS FOR GRANTING THE WRIT .. 18

CONCLUSION ...................... 27

APPENDIX A: Opinion of the Court of

Appeal of the State of California for

the Second Appellate District, Division Four,

eel Aga 06, Te: oes ce 1-A

APPENDIX B: Summary denial of Petition for

Rehearing, dated May 16,1994 .......... 1-B

_ APPENDIX C: Summary denial of Petition for

Review, filed July 13,1994 ............. 1c

111

APPENDIX D: Statement of Decision

of the Superior Court of California,

ee 1-D

APPENDIX E: Judgment of the Superior

Court of California, filed

as 5 5 6 oy st se ee 1-E

TABLE OF AUTHORITIES

CASES

Blair v. Pitchess

5 Cal.3d 258 | ene or Pak ee 21

Boddie v. Connecticut,

401 U.S. 371 (1971) ea uia de aoe eee ce 23

Buena Vista Gardens Apartments Assn. v.

City of San Diego Planning Dept.

175 Cal.App.3d 289 I eat g tig 2S 7

California Transport v. Trucking Unlimited,

404 U.S. 508 ae, Se ae 20

Card v. Community Redevelopment Agency

61 Cal.App.3d 570 Lo 13, 14, 21, 22

Cipriano v. City of Houma,

395 US. 701 (1969) .................... 25

Citizens Against Forced

Annexation v. County of Santa

Clara

153 Cal.App.3d 89 es, OSs. Great 15

County of Los Angeles v.

Kling

474 U.S. 936 on, SR errr acs ae 23

James B. Beam Distilling Co. v. Georgia,

U.S. __, 111 S.Ct. 2439 a 22

Kadrmas v. Dickinson Pub. Schools

A ey <a

Kramer v. Union Free School

District No. 15

Leach v. City of San Marcos

213 Cal.App.3d 648 (1989) ................ 6

Lesher Communications, Inc. v.

City of Walnut Creek,

eee ee ee 19

McDowell & Craig v. City of Santa Fe Springs,

eee ee eee eee tz, 13

Neary v. Regent of the Univ.

of California

ce . 10, 17

Phoenix v. Kolodziejski,

re 2A, 25, 27

Regus v. City of Baldwin Park

70 Cal.App.3d 968 (1977) ..... 14, 15, 16, 21, 22

Sierra Club v. Board of Supervisors,

Soe Sa meeoee Gre (iver) ..... www. s.e. 19

Sweetwater Valley Civic Assn. v. City of

National City |

oe Se 2h (dere) .......-. ee. 12, 14, 21, 24

Torres v. City of Yorba Linda

13 Cal.App.4th 1035 (1993) .... 13, 15, 16, 17, 22

United States v. Kras,

409 U.S. 434 Ge 2 23

STATUTES

U.S. Constitution:

a | ee 2, 20, 24

Amendment XIV .............. 2, 17, 23, 24, 27

Californie Constitution:

Art. 071,00) ge ei aa Te

Code of Civil Procedure:

Section 5268 .........., 14, 15, 16, 17, 20, 21, 22

Section 860 et De *8:5.5 04 Wks ce 4t'cs-ou ee 3, 17

Section S05. .ccaseuuneu cont 14, 17, 25

Section MMB OIG soe isos igccc..,. 7

Government Code:

Section 65580 et gO ee 3

Section GRMN rk aa wiibed arebisth ie vii ds i. 6

Section GIO E.. o2saceles) Soe Ea 8) 19

Section 65585(d)-(f) 2.2... 19

Health and Safety Code:

Section 33000 et EE re te en ee 3

Section 30m Fo 905) 3, epi gi) valine 29) 4, 26

Section 33334.2 etseq ..................... 4

Section SUMMER LOS 4, 8, 26

Section 33334.2(a) oe Fee alee Bb 64 ewes 4, 8, 26

Section 333303 ...... cuaiduubes to GO. 4, 26

Section 38994.6 £1... (8801) Z£08 dikaqAind 26

a ee ee 9

EE )

TG Sk es ec tees ns cceacescs 9

MU PEED occ cc cee eee 6

se 7,9

Te vee nwes 4, 26

ee 8, 9

ee eke cwens 24

ee ccc cw cnen 3, 5, 20

EE EES ee 6, 8

EE a er 4

Sn ck cc cw ccc cc uccnccce 4

United States Codes:

Ls ]

OTHER AUTHORITIES

California Rules of Court:

EE 12, 22

Robel, The Myth of the Dispesable Opinion,

87 Mich. L. Rev. 477 (1988) ............... 23

Weaver, The Precedential Value of

Unpublished Opinions,

on pecroer L. Rev. 940 (1969) .............. 23

Petitioners, ALICE ALLEN and LAURA

FEINNER, respectfully request that a writ of

certiorari issue to review the judgment of the Court of

Appeal of the State of California for the Second

Appellate District, Division Four, filed April 14, 1994.

OPINIONS BELOW

The opinion of the Court of Appeal of the State of

California for the Second Appellate District, Division

Four, filed April 14, 1994, is printed in Appendix A;

the opinion is not published or reported. The order of

the Court of Appeal denying Petitioners’ Petition for

Rehearing, filed May 16, 1994, is printed in Appendix

B. The order of the Supreme Court of the State of

California denying Petitioners’ Petition for Review,

filed July 13, 1994, is printed in Appendix C. The

Statement of Decision of the Superior Court of the

State of California for the County of Los Angeles,

filed April 27, 1992, is printed in Appendix D. The

Judgment of the Superior Court, filed April 27, 1992,

is printed in Appendix E.

JURISDICTION

The judgment of the California Court of Appeal

was entered on April 14, 1994 (App. A). A timely

petition for rehearing was denied on May 16, 1994

(App. B). A timely petition for review by the

California Supreme Court was denied on July 13, 1994

(App. C). The jurisdiction of this Court is invoked

under 28 U.S.C. § 1257.

a Cee

CONSTITUTIONAL PROVISIONS INVOLVED

The First Amendment to the United States

Constitution provides in part: }

"Congress shall make no law . . . abridging the

freedom of speech, or of the press; or the right of the

people peaceably to assemble, and to petition the

Government for a redress of grievances."

The Fourteenth Amendment to the United States

Constitution provides in part:

". . . [NJor shall any State deprive any person of

life, liberty, or property, without due process of law;

nor deny to any person within its jurisdiction the equal

protection of the laws."

STATUTES INVOLVED

Section 860 of the California Code of Civil

Procedure (West 1980) provides:

"A public agency may upon the existence of any

matter which under any other law is authorized to be

determined pursuant to this chapter, and for 60 days

thereafter, bring an action in the superior court of the

county in which the principal office of the public

agency is located to determine the validity of such

matter. The action shall be in the nature of a

proceeding in rem."

Section 863 of the California Code of Civil

Procedure (West 1980) provides in part:

"If no proceedings have been brought by the

public agency pursuant to this chapter, any interested

person may bring an action within the time and in the

court specified by Section 860 to determine the

validity of such matter. .. ."

Section 33501 of the California Health & Safety

Code (the California Community Redevelopment Law,

Section 3) provided in 1990 in part (West 1973):

"An action may be brought pursuant to Chapter 9

(commencing with Section 860) of Title 10 of Part 2 of

the Code of Civil Procedure to determine the validity

of bonds and the redevelopment plan to be financed

or refinanced, in whole or in part, by the bonds, or to

determine the validity of a redevelopment plan not

financed by bonds, including . . . the legality and

validity of all proceedings theretofore taken for or in

any way connected with the establishment of the

agency, its authority to transact business and exercise

its powers, the designation of the survey area, the

selection of the project area, the formulation of the

preliminary plan, and the adoption of the

redevelopment or renewal plan, ... .”

Section 526a of the California Code of Civil

Procedure (West 1980) provides:

"An action to obtain a judgment restraining and

preventing any illegal expenditure of, waste of, or

injury to, the estate, funds, or other property of a

county, town, city or city and county of the State, may

be maintained against any officer thereof, or any

agent, or other person, acting in its behalf, either by a

citizen resident therein, or by a corporation, who is

assessed for and is liable to pay, or, within one year

before the commencement of the action, has paid, a

tax therein... ."

STATEMENT OF THE CASE

A. The Complaint

Petitioners alleged that they are "lower income"

residents of the City of Duarte, Calii ria ("Duarte" or

"the City"), who pay housing rent in excess of 40

percent of their gross monthly incomes. J.A. 616

(First Amended Complaint ["Complaint"], par. 6).'

They further alleged that they "have paid a tax to the

City within one year prior to the commencement of

this action." J.A. 617 (Complaint, par. 9). On August

27, 1990, after exhausting their administrative

remedies by presenting their written objections to the

'"J.A." refers to the Joint Appendix filed with the

California Court of Appeal in this case. The California

Health and Safety Code defines "lower income

households" as those whose income does not exceed the

qualifying limits for lower-income families as currently

established under Section 8 of the United States

Housing Act of 1937. Health & Safety Code § 50079.5

(West 1986). Petitioner ALLEN alleged that she pays

rent exceeding 50 percent cf her gross monthly income;

petitioner FEINNER alleged that she pays rent

exceeding 40 percent of her gross monthly income.

Complaint, par. 6 (J.A. 616). California law defines

"Affordable Rent" for lower-income households as

equalling 30 percent or less of a family’s gross income.

Health & Safety Code § 50053 (b) (2) (West 1994

Supp.).

City Clerk of Duarte (Statement of Decision ["Trial

Court Decision"], App. D at 4), petitioners filed in the

Superior Court for Los Angeles County their timely

complaint challenging the validity of Duarte’s

Amendment No. | to its Redevelopment Plan for the

Rancho Duarte Phase III Redevelopment Project

("Amendment No. |" or "the Amendment").

Petitioners based their action on three California

statutes that authorize citizens to bring suit challenging

actions taken by public agencies of the State:

(1) the California Community Redevelopment Law,

California Health & Safety Code Section 33501, which

provides that "[a]n action may be brought" pursuant to

specified provisions of the California Code of Civil

Procedure to determine the validity of a

redevelopment plan (Trial Court Decision, App. D at

2);

(2) California Code of Civil Procedure ("CCP")

Section 863, one of the provisions specified by Health

& Safety Code Section 33501; CCP § 863 provides

that if no proceedings have been brought by a public

agency (pursuant to CCP § 860) to "determine the

validity” of an action taken by the agency, then "any

interested person" may bring such a proceeding

(known as a "validating action") (Trial Court Decision,

App. D at 2);

(3) California Code of Civil Procedure Section

526a, which provides that an action to obtain a

judgment "restraining and preventing any illegal

expenditure” of funds by a municipality may be

brought by "a citizen resident therein" who within the

previous year has paid "a tax therein." See Complaint,

Fifteenth Cause of Action ("Injunction against City

and Agency to Prevent the Illegal Expenditure of

Public Funds)," J.A. 637-38; Court of Appeal opinion,

App. A at 23." |

Petitioners challenged Amendment No. | for failure

to comply in a number of respects with both the

California Community Redevelopment Law (Health &

Safety Code Section §§ 33000 et seq.) and the

California Housing Element Law (California

Government Code §§ 65580 et seq.). Under the

Community Redevelopment Law ("CRL"), a

redevelopment plan may provide that property tax

revenues that would otherwise be available to State

and local taxing entities from land within the

boundaries of the plan may be frozen as of the date

the plan is adopted, and any tax revenues generated by

increased property values following adoption of the

plan may thereupon be allocated to the redevelopment

agency instead of the usual taxing entities. See Health

& Safety Code § 33670; Leach v. City of San Marcos,

213 Cal. App.3d 648, 653 (1989). Although Duarte’s

original plan for the Rancho Duarte Phase III

Redevelopment Project did not include these "tax

increment financing" provisions, Amendment No. |

amended the plan to include them. See Court of

Appeal opinion, App. A at 2-3.

Under the Housing Element Law, every community

in California is required to adopt, as part of its

“general plan," a "housing element" that analyzes the

community’s low- and moderate- income housing

needs, sets goals and quantified objectives for meeting

those needs, and adopts a five-year program to

implement the objectives. Gov. Code § 65583. Any

"interested party" may seek judicial review of a housing

element, and "citizen groups may enjoin a project

when the general plan either lacks a relevant element

or the element is inadequate." Buena Vista Garden

Apartments Assn. v. City of San Diego Planning Dept.,

175 Cal. App. 3d 289 (1985); CCP § 1085.

Petitioners challenged Amendment No. | on the

following grounds, among others:

* That Duarte and its Redevelopment Agency had

not ma ie the required finding that the Redevelopment

Project area was "blighted" at the time the

Amendment was adopted, and that such a finding

would not be supported by substantial evidence (J.A.

617-20 (First Cause of Action));

* That there was no substantial evidence to

support the required finding that the project’s tax

increment financing would not cause a significant

financial burden or detriment to any taxing entity (J.A.

623-24 (Fifth Cause of Action); see Health & Safety

Code §§ 33367 (d) (12) (1990), 33457.1);

* That the Amended Plan failed to effectuate the

purposes and policy of the Community Redevelopment

Law with regard to expenditures on low- and

moderate-income housing, in particular by failing to

set aside at least 20 percent of the tax-increment

revenues allocated to the Redevelopment Agency for

deposit into a Low and Moderate Income Housing

Fund (J.A. 624-26 (Sixth Cause of Action); see Health

& Safety Code § 33334.2 (a));

* That the City’s housing element in effect at the

time of the Amendment’s adoption was invalid for

many reasons (J.A. 626-30 (Seventh Cause of

Action));

* That the findings by the City and its

Redevelopment Agency concerning relocation and

replacement housing were legally inadequate (J.A.

630-33 (Eighth, Ninth, and Tenth Causes of Action));

* That the City and its Redevelopment Agency

would illegally expend tax-increment moneys allocated

to the Agency unless they were enjoined from doing so

and Amendment No. | was declared null and void

(J.A. 637-38 (Fifteenth Cause of Action)).

B. The Consolidated Actions

Petitioners were not alone in challenging the

validity of Amendment No. |. Los Angeles County

("the County") and the Citrus Community College

District ("Citrus"), both taxing entities that otherwise

would receive property tax revenues to be paid to the

Duarte Redevelopment Agency under the

tax-increment financing provisions of the Amendment,

brought separate suits challenging the amended Plan.

The three suits were consolidated. App. A at 5. The

County and Citrus joined Petitioners in challenging

Duarte’s failure to make a finding of "blight," but

otherwise focused on the Amendment’s financial

impact on other taxing jurisdictions and did not

challenge the housing aspects of the Plan (J.A. 5-29

and 548-568).

C. The Trial Court’s Decision

The superior court, after a bench trial, ruled

Amendment No. | invalid on several grounds. The

court ruled that the City was required to make a

finding of blight in invoking the tax-increment

provisions of Section 33670, even when that finding

would apply to the area of a pre-existing project, and

that it had not done so. App. D at 4-5; Cal. Const.,

Art. XVI, sec. 16; Health & Safety Code §§ 33354.5,

33352, 33367 (d), 33457.1. The court also held the

redevelopment plan invalid for failure to meet the

housing requirements of the Community

Redevelopment Law. Duarte could not make the

requisite findings that the amended plan would

promote the general welfare and effectuate the

purposes of the Community Redevelopment Law, the

court held, because the City’s Redevelopment Agency

had failed to set aside required moneys for the

development of low- and moderate-income housing

and had otherwise failed to comply with its housing

obligations under the CRL. App. D at 5-7. The court

further found Duarte’s Housing Element invalid, and

Amendment No. | consequently invalid for failure to

be consistent with a valid housing element. App. D at

9-14.

In addition, the court found a lack of substantial

evidence to support the City’s finding that the

tax-increment financing "will not cause a significant

financial burden or detriment on any taxing agency

deriving revenues from a project area." App. D at 7-

8; Health & Safety Code § 33367 (d) (12). The court

further held that the City and Agency had "violated

the purposes of the Community Redevelopment Law"

in adopting the Amendment, since the evidence

produced at the trial "reveals that the purpose of the

Amendment is to capture tax increment away from the

Citrus College, the County and other taxing entities in

the absence of blight and without substantial

justification." App. D at 8-9.

Accordingly, the court entered judgment declaring

Amendment No. | "void and of no effect." App. E at

3. It also permanently enjoined the City and Agency

from "taking any action to implement or carry out the

Amendment, and from receiving any tax increment

revenues . . . attributable to the Amendment." App. E

at 3.

The City and its Redevelopment Agency appealed.

Petitioners, who had moved to include in the judgment

a writ of mandamus compelling Duarte to bring its

housing element intd compliance with state law within

120 days, cross-appealed from the denial of their

motion. App. A at 4-5.

D. The Settlement

After completion of appellate briefing, and five

days before oral argument, the City, the

Redevelopment Agency, the County, and Citrus,

without consulting Petitioners or giving them prior

notice, reached a settlement. The settlement provides

for a division among the settling parties of the

increased property tax revenues resulting from the

Redevelopment Project. App. A at 5 n.2. The parties

to the settlement then filed with the Court of Appeal,

on February 3, 1994, a "Joint Application and

Stipulation for Partial Dismissal of Appeal with

Prejudice, Reversal of Judgment, and Remand to the

Superior Court for Vacation of Judgment and Entry of

New and Different Judgment in Favor of Appellants."

App. A at 4; see Neary v. Regents of the University of

California, 3 Cal.4th 273 (1992).?

* Counsel for Duarte described the settlement as

follows: "Duarte, Citrus, and the County have agreed

The Court of Appeal then requested the parties to

submit, the next day, letter briefs addressing which

issues on appeal were rendered moot by the

settlement.

Petitioners acknowledged that one minor issue,

which they had no interest in raising, was rendered

moot. Petitioners’ Letter Brief of Feb. 4, 1994, at I.

Duarte contended that Petitioners’ Fifth Cause of

Action, alleging a lack of substantial evidence that

Amendment No. | would not cause a significant

financial burden or detriment to County or Citrus, was

rendered moot. Duarte’s Letter Brief of Feb. 4, 1994,

at 3. Duarte further contended that Petitioners "do

not have standing to second-guess the County and

Citrus on this subject." Jd. Duarte did not challenge

Petitioners’ standing with respect to any other issue.

Duarte did note, as did Petitioners, that since the

actions were consolidated there could be only a single

final judgment. Jd. So if the court affirmed the trial

court’s judgment in the Allen and Feinner case, "the

settlement reached by Duarte, Citrus, and the County

cannot be enforced." Jd.

E. The Court of Appeal’s Opinion

The opinion of the Court of Appeal was issued

April 14, 1994, and stamped "Not To Be Published."

that the trial court judgment should be reversed and the

matter remanded for entry of a new and different

judgment validating Amendment No. 1." Letter Brief

dated Feb. 4, 1994, at 2 (emphasis in original).

App. A at 1, 24.3 The court noted that Duarte, at oral

argument, had "stated its belief that the standing issue

went only to the fifth cause of action" (alleging a

significant financial burden on the taxing agencies).

App. A at 12. The court ruled, however, that "the

standing issue envelops the entire action" (App. A at

12) and that "Allen and Feinner did not have standing

to bring the action." App. A at 6.

The Court of Appeal reviewed the case law under

Code of Civil Procedure section 863, which authorizes

"any interested person" to bring a validation action if

the agency fails to do so. It first considered

Sweetwater Valley Civic Assn. v. City of National City,

18 Cal. 3d 270 (1976). In that case the California

Supreme Court reviewed, and unanimously rejected,

the finding of a city and its redevelopment agency that

an area included in a redevelopment plan was

blighted. The court in Sweetwater described the

plaintiff association as "a group of 600 taxpayers,

residents, and property owners of Sweetwater Valley."

18 Cal.3d at 273. The court did not discuss standing,

Stating that Code of Procedure section 863 "permits

any ‘interested person’ to bring the action" if the

agency does not. Jd. at 277.

The Court of Appeal concluded that Sweetwater

"did not consider the issue of Standing and thus cannot

* Under the California Rules of Court, an

unpublished opinion "shall not be cited or relied on by

a court or a party in any other action or proceeding,"

with exceptions for law of the case, res judicata,

collateral estoppel, and ancillary criminal or disciplinary

proceedings. Rule 977 (a).

be invoked as authority on this point."

The Court of Appeal next discussed Card v.

Community Redevelopment Agency, 61 Cal. App. 3d 570

(1976). The court there, in affirming the invalidation

of a city’s ordinance amending a redevelopment plan,

addressed the plaintiffs’ standing as follows:

The Agency also challenges the standing of

plaintiffs to sue, but plaintiffs clearly are

interested persons within the meaning of Code

of Civil Procedure section 863 in view of the

fact that each was subsequently stipulated to be

a citizen, resident and taxpayer of the city and

"a person interested in the matter of the

amendments to the redevelopment plans for the

Monterey Hills Project No. 1." Jd. at 574-575

n.6.|

The Court of Appeal said of Card: "Given that

‘ The court cited two cases. In McDowell & Craig v.

City of Santa Fe Springs, 54 Cal. 2d 33 (1960), the court

stated that "cases are not authority for propositions not

considered." Jd. at 38. The court in McDowell was

referring to a question with which the cited court was

"not . . . dealing" (id.) -- that is, a dictum -- not to a

question (like standing in Sweetwater) that the court

decided but did not discuss. The McDowell court stated

in the sentence preceding the one quoted by the Court

of Appeal: “It is elementary that the language used in

any opinion is to be understood in the light of the facts

and the issue then before the court." /d. The other

cited case, Torres v. City of Yorba Linda, 13 Cal. App.

4th 1035, 1044 n.5 (1993), handled Sweetwater as did the

Court of Appeal here, also citing McDowell.

the plaintiffs were stipulated to be interested persons,

their description as citizens and residents of the

defendant city and ‘taxpayers’ on some undisclosed

basis was superfluous and is of no assistance." App. A

at 20.

The Court of Appeal turned to Regus v. City of

Baldwin Park, 70 Cal. App. 3d 968 (1977). The court

there, in ruling a redevelopment project invalid for

lack of blight, held that the plaintiffs had standing

both as "interested persons" under Section 863 and as

taxpayers under Code of Civil Procedure Section 526a.

Id. at 972. The individual plaintiffs in Regus were

"residents and taxpayers" of the defendant city. Id. at

971. They also owned real property (outside the

Project area) that had been assessed for taxes within

the past year by Los Angeles County and other taxing

agencies that levied taxes on property within the

Project area. Jd. The plaintiff unincorporated League

was "composed of City residents." Jd. No individual

plaintiff or member of the League resided or owned

property within the Project area. /d.

The Regus court, in holding that the plaintiffs had

standing to bring both a validation action and a

taxpayer's action, relied on Sweetwater and Card. supra.

The court stated that the California Supreme Court in

Sweetwater, “without discussion of standing,” had

“entertained a civic association’s attack on a

redevelopment project" where "plaintiff ownership of

property within the project area was not alleged" and

was unlikely. 70 Cal. App. 3d at 971-972. Likewise in

Card, the court said, the stipulation "did not declare

that plaintiffs owned property within the project area."

Id. The court held that the Regus plaintiffs, "[a]s

taxpayers of the City of Baldwin Park and of the

County of Los Angeles," had a "financial interest in

the outcome of this proceeding" -- based on the

diversion of tax revenues from the taxing agencies to

which they paid taxes -- that "provides sufficient basis

to give them standing." Jd. at 972. The court further

held that the plaintiffs, "as resident taxpayers of City

and county," also had standing to bring a taxpayer’s

action under Code of Civil Procedure section 526a.

Id.

The Court of Appeal determined that Regus "does

not fully analyze the issue." App. A at 20. The court

criticized Regus for not providing additional facts

about the plaintiffs, such as "what kind of tax each

plaintiff paid as a resident within the city" and

"whether each plaintiff owned real property within the

city.". App. A at 20. After further criticism the court

declared: "On balance, we conclude that Regus does

not present a clear rule of law." App. A at 21.

Finally the court considered Torres v. City of Yorba

Linda, 13 Cal. App. 4th 1035 (1993).° The plaintiffs

there, challenging a redevelopment plan of the City of

Yorba Linda, alleged that they currently lived in

Anaheim but were interested in moving to Yorba

Linda. Jd. at 1039. They further alleged that they

5 Another case discussed by the Court of Appeal,

Citizens Against Forced Annexation v. County of Santa

Clara, 153 Cal. App. 3d 89 (1984) (App. A at 16, 21),

dealt with annexation rather than redevelopment. The

case appears to go further than Regus in holding that an

organization composed of residents of the affected

county had standing to challenge annexations apparently

anywhere in the county. 153 Cal.App.3d at 97-100.

each had paid a tax -- conceded to be sales tax -- to

Yorba Linda within the prior year. Jd. at 1039 and n.

2. One plaintiff also alleged ownership of property in

Orange County (which includes both cities). Jd. at

1040.

The court upheld dismissal of the action for lack

of standing. Jd. at 1038. "Both plaintiffs are residents

of Anaheim, not Yorba Linda," the court stated (id. at

1043). The court noted the contrast with Regus, where

the plaintiffs "resided in the city covered by the

redevelopment project." Jd. at 1044. "Regus does not

State a party has standing where he or she is merely a

county taxpayer," the court continued. Jd. With

regard to the plaintiffs’ taxpayer’s action under Code

of Civil Procedure section 526a, the court noted that

standing requirements under that provision had been

"liberally construed," but said a plaintiff nonetheless

"must establish he or she is a taxpayer." Jd. at 1047.

The plaintiffs admitted they had paid to Yorba Linda

only a sales tax (id. at 1038 n.2), and “a sales tax is a

levy imposed on the retailer, not the consumer," the

court said. Jd. at 1047.

The Court of Appeal asserted that "Allen and

Feinner allege little more than did the plaintiffs in

Torres." App. A, at 19. Like the plaintiffs in Torres,

Allen and Feinner "are lower income persons who live

in rental housing," the court said. Jd. Moreover,

Feinner "receives Aid to Families with Dependent

Children and qualifies to receive county supported

health services." Jd. Allen and Feinner "[bjoth paid

“a tax’ within the City of Duarte; they do not allege it

was a tax assessed on real property located there." /d.

The court acknowledged that "[uJnlike the Torres

plaintiffs, Allen and Feinner are residents of the

defendant city." Jd. It concluded, however, "that mere

residency and the payment of an unspecified tax within

the defendant city is insufficient to confer standing."

Id.

The Court of Appeal also denied Petitioners

standing to bring a taxpayer’s action under Code of

Civil Procedure section 526a. App. A at 23. Relying

on Torres, the court declared that payment of a sales

tax "does not confer standing" (App. A at 23).° After

noting once more that Petitioners "alleged that they

are lower income persons," the court stated: "They did

not specify that they had paid a property tax within

the City of Duarte and no evidence was offered at trial

that either had paid such a tax." Jd. The court held

that Petitioners lacked standing to bring a taxpayer's

action. Id. at 23.

The Court of Appeal thus reversed the trial court’s

judgment with respect to Petitioners. /d. at 23-24.

With respect to the other parties, it dismissed the

appeal and remanded the matter to the trial court for

further proceedings consistent with the agreements of

the parties, citing Neary v. Regents of the University of

California, 3 Cal. 4th 273 (1992)). App. A at 24. The

final page of the court’s opinion, like the first page,

bears the stamp, "Not To Be Published." /d.

Petitioners filed a timely Petition for Rehearing.

In it they challenged the Court of Appeal’s denial of

their standing as a violation of their right to the Equal

° Petitioners alleged having paid "a tax to the City."

Complaint, par. 9, J.A. 617. Unlike Torres, nothing in

the record here establishes that this was a sales tax.

Protection of the laws under the Fourteenth

Amendment. Petition for Rehearing at 3, 12-17. The

Petition also challenged the Court of Appeal’s denial

of standing as contrary to existing precedent. Jd. at 2,

9-11. The Petition was denied on May 16, 1994.

Petitioners then filed a timely Petition for Review with

the California Supreme Court, raising these and other

issues. The Petition was denied on July 13, 1994.

REASONS FOR GRANTING THE WRIT

The California Court of Appeal has ruled that

Petitioners did not have standing to challenge Duarte’s

redevelopment plan, through either a "validation

action" under Section 863 of the Code of Civil

Procedure or a taxpayer's action under Section 526a of

that Code, because Petitioners did not Pay a tax on

real property located in Duarte. This decision,

denying Petitioners access to the courts because they

do not own land, violates Petitioners’ rights to the

Equal Protection of the Laws and to Due Process of

Law under the Fourteenth Amendment ”

” The Court of Appeal Suggested that "[t]}wo recent

events," the settlement by the governmental parties and

a certification by the California Department of Housing

and Community Development that Duarte’s housing

element now conformed to state law, perhaps mooted

the case and somehow Supported the court’s decision

that Petitioners lacked Standing to bring the action.

App. A at 4-5, 22. The Suggestion is wrong. Despite

those events the following issues, among others, remain

in the case:

First, Section V of the Trial Court’s Decision (App.

D at 5-7), finding that Duarte’s Redevelopment Agency

1. The Court of Appeal’s opinion is clear in

denying standing to Petitioners, with respect to both

the validation action authorized by Code of Civil

Procedure Section 863 and the taxpayer’s action

authorized by Code of Civil Procedure Section 526a,

because Petitioners did not pay a tax on real property

located in Duarte. The court states with regard to the

Section 863 action: "Both [Petitioners] paid ‘a tax’

had failed to set aside 20 percent of the taxes allocated

to it for at least the fiscal years 1989-90 and 1990-91, as

required by the Community Redevelopment Law, is not

affected by either event. Second, Section X of the Trial

Court’s Decision (App. D at 9-14), finding the City’s

Housing Element deficient, is not mooted by either

event. As the Trial Court noted (id. at 9), state law

requires that the City’s general plan (including its

Housing Element) have been in compliance with law at

the time the Redevelopment Plan was adopted, or else

the Plan was invalid ab initio. Lesher Communications,

Inc. v. City of Walnut Creek, 52 Cal.3d 531 (1990).

Further, the DHC’s approval of the new Housing

Element is not presumptively correct, but is only entitled

to some deference in a court’s determination of the new

Element’s validity. See Government Code § 65585 (a),

(d)-(f); Sierra Club v. Board of Supervisors, 126 Cal. App.

3d 698, 701-702 (1981). Third, Sections III, [V, VII,

and IX of the Trial Court’s Decision (App. D at 4-5,

8-9) are not addressed by either event. These sections

involve the basic invalidity of the Redevelopment Plan

as a result of the City’s failure to make the required

finding of blight (and related findings). In sum, this case

is not moot; the Court of Appeal has only tried to make

it so by ejecting Petitioners from it.

within the City of Duarte; they do not allege it was a

tax assessed on real property located therein." App. A

at 19. The court states with regard to the Section

526a action: "They [Petitioners] did not specify that

they had paid a property tax within the City of Duarte

and no evidence was offered at trial that either had

paid such tax." App. A at 23.

Petitioners in bringing this action were exercising

their First Amendment right to petition their

Government for a redress of grievances. As this Court

has stated: "Certainly the right to petition extends to

all departments of the Government. The right of

access to the courts is indeed but one aspect of the

right of petition." California Motor Transport Co. v.

Trucking Unlimited, 404 U.S. 508, 510 (1972).

Petitioners had initially sought to exercise their

right to petition without involving the courts, by

submitting to the city council of Duarte their

objections to the amended Redevelopment Plan. See

App. D at 4. Those objections were based on the

grounds ultimately put forth in this action. When the

city council rejected the objections, Petitioners

resorted to the only remaining avenue by which they

might petition for a redress of their grievances: a court

action to adjudicate the validity of Duarte’s

Redevelopment Plan.

This is an avenue deliberately made available by

the Legislature and the law of California. Section 863

of the Code of Civil Procedure provides that, if a

public agency has not itself brought a proceeding to

"validate" action it has taken, "any interested person" —

may do so. In addition, the California Community

Redevelopment Law specifically provides for the

bringing of such actions to test the validity of

redevelopment plans. Health & Safety Code § 33501.

Further, Section 526a of the Code of Civil Procedure

authorizes a "taxpayer action" to prevent the illegal

expenditure of municipal funds, an action that may be

brought by any "citizen resident" in the municipality

who within the previous year has paid "a tax therein."

The California Supreme Court has said of Section

526a:

The primary purpose of this statute, originally

enacted in 1909, is to "enable a large body of

the citizenry to challenge governmental action

which would otherwise go unchallenged in the

courts because of the standing requirement."

[Citation omitted. ]

California courts have consistently

construed section 526a liberally to achieve this

remedial purpose... .

Blair v. Pitchess, 5 Cal.3d 258, 267-268 (1971).

Consistently with the language and the evident

intent of these statutes, there appears to be no

California redevelopment case, other than the present

one, in which standing has been denied to plaintiffs

who were residents and taxpayers, or even residents

alone, of the municipality undertaking the Project.

This can be seen in the opinion of the Court of

Appeal. App. A at 13-18. In Sweetwater Valley Civic

Assn. v. City of National City, 18 Cal. 3d 270 (1976),

the California Supreme Court did not question the

standing -- though this is an issue the court will raise

sua sponte -- of any of "a group of 600 taxpayers,

residents, and property owners of Sweetwater Valley."

Agency, 61 Cal. App. 3d 570 (1976), the court held

that the plaintiffs had standing under Section 863

because each was stipulated to be "a citizen, resident

and taxpayer of the city" and a "person interested" in

the redevelopment plan. Jd. at 574-575. Nothing was

said about owning property. In Regus v. City of

Baldwin Park, 70 Cal. App. 3d 968 ( 1977), the court

held squarely that the individual plaintiffs had standing

under Section 863 "[a]s taxpayers of the City of

Baldwin Park and of the County of Los Angeles," and

under Section 526a "as resident taxpayers of City and

county." 70 Cal. App. 3d at 972. The Regus court also

accorded standing to an unincorporated association

"composed of City residents." Jd. at 971. Finally, in

Torres v. City of Yorba Linda, 13 Cal. App. 4th 1035

(1993), standing to challenge the redevelopment plan

of Yorba Linda was denied to the two plaintiffs who

were "residents of Anaheim, not Yorba Linda." Jd. at

1043.

2. The apparently unique denial of standing to

these Petitioners,° on the ground that they do not pay

* Since the opinion of the Court of Appeal is "Not

To Be Published," it presumably will not be a precedent

for future decisions in California. See Cal. Rule of Ct.

977 (a); supra note 3. At the same time the opinion

deviates from the preexisting law (a fact that should have

led to its publication, under the standard providing for

publication of an opinion that "creates an apparent

conflict in the law," Cal. Rule of Ct. 976 (b) (2)). The

rule applied by the Court of Appeal thus departs from

past cases and will not be applied to future ones -- it is

being applied to Petitioners alone. Petitioners submit

that this treatment "breaches the principle that litigants

in similar situations should be treated the same, a

taxes on real property in Duarte, denies them access

to the courts in violation of the Equal Protection and

Due Process Clauses of the Fourteenth Amendment.

In Boddie v. Connecticut, 401 U.S. 371 (1971), this

Court held that Due Process prohibited a State from

imposing court fees and costs for the filing of divorce

actions upon indigent welfare recipients who were

unable to pay those amounts. Subsequently, in United

States v. Kras, 409 U.S. 434 (1973), the Court

distinguished a $50 filing fee for obtaining a discharge

in voluntary bankruptcy. The majority in Kras

emphasized that "[rjesort to the court" was not Kras’s

"sole path to relief" (id. at 446), as it had been for the

persons seeking divorce in Boddie, and further noted

that the $50 fee could be paid in installments over six

months, producing a weekly average payment of $1.92.

Id. at 449. Again in Kaarmas v. Dickinson v. Public

Schools, 487 U.S. 450 (1988), where the Court upheld

against Equal Protection attack a school bus user fee,

it noted that this was not a requirement, like the one

in Boddie, that "barred indigent litigants from using

the judicial process in circumstances where they had

no alternative to that process." /d. at 460.

fundamental component of stare decisis and the rule of

law generally," James B. Beam Distilling Co. v. Georgia,

111 S.Ct. 2439, 2444 (1991) (opinion of Souter, J.) --

and thus denies to Petitioners the Equal Protection of

the laws. See also County of Los Angeles v. Kling, 474

U.S. 936, 937 & n.1 (1985) (Stevens, J., dissenting);

Weaver, The Precedential Value of Unpublished Opinions,

39 Mercer L. Rev. 477, 477 n.1 (1988); Robel, The Myth

of the Disposable Opinion, 87 Mich. L. Rev. 940, 948

(1989).

In this case, Petitioners had "no alternative" to the

judicial process. Petitioners did first invoke the

political process to assert their objections to Duarte’s

Redevelopment Plan, by presenting those objections to

the city council. When their efforts were rejected,

Petitioners were left with resort to the courts as their

‘sole path to relief" in testing the Plan’s validity.

Indeed, Petitioners were required to bring their action

within 60 days after adoption of the Redevelopment

Plan, or be forever barred from challenging its validity.

Health & Safety Code § 33500; Code of Civil

Procedure § 863; Sweetwater, supra, 18 Cal.3d at 277.

Moreover, the requirement that the Court of

Appeal has imposed on Petitioners, as a barrier to

their access to the courts, is nothing like a $50 fee that

can be paid at the rate of $1.92 per week. It is a

requirement of land ownership. Under the court’s

decision, Petitioners had to go out and buy a piece of

land in Duarte before being allowed to test Duarte’s

Redevelopment Plan in court. This is not a

requirement that lower-income citizens can realistically

be expected to meet. This case thus is governed by

Boddie, in view of the implacable burden the Court of

Appeal has imposed on Petitioners’ First Amendment

right of access to the courts.

3. Even when the Court of Appeal’s ruling is

subjected to the "rational relationship" test under the

Equal Protection Clause (see Kadrmas, supra, 487 U.S.

at 4582), it cannot be sustained. There is no rational

relationship between a requirement of property

ownership in the city and standing to challenge the

city’s Redevelopment Plan.

In City of Phoenix v. Kolodziejski, 399 U.S. 204

PRY teh ostined

(1970), this Court held that a State could not,

consistently with the Equal Protection Clause, restrict

the vote to real property taxpayers, even in elections

to approve the issuance of general obligation bonds.

The Court declared that,

... although owners of real property have

interests somewhat different from the interests

of nonproperty owners in the issuance of

general obligation bonds, there is no basis for

concluding that nonproperty owners are

substantially less interested in the issuance of

these securities than are property owners.

399 U.S. at 212. See also Cipriano v. City of Houma,

395 U.S. 701 (1969) (invalidating provisions of a

Louisiana law granting only property taxpayers the

right to vote in elections called to approve the

issuance of revenue bonds by a municipal utility);

Kramer v. Union Free School District No. 15, 395 U.S.

621 (1969) (invalidating provisions of a New York law

limiting the vote in school district elections to persons

who either have children enrolled in local public

schools or own, or lease, taxable real property within

the district).

The rational relationship that the Court found

lacking in City of Phoenix is even more clearly lacking

here. First, just as the Court noted "all residents of

Phoenix, property owners and nonproperty owners

alike, have a substantial interest in the public facilities

and the services available in the city and will be

substantially affected by the ultimate outcome of the

bond election" (399 U.S. at 209), all residents of

Duarte will be substantially affected by the

Redevelopment Plan. Indeed, given the emphasis of

California’s redevelopment law on expanding the

supply of low- and moderate-income housing,”

Petitioners and other lower-income persons who lack

adequate housing can be said to have a greater

interest in the Redevelopment Plan than most

property owners.

Second, there is no distinction between property-

and non-property - owning residents of Duarte with

respect to their contributions to the tax revenues of

Duarte’s Redevelopment Agency. No property tax

revenues from property outside the Project area are

allocated to the Agency. Health & Safety Code §

33670. Hence property taxpayers outside the Project

area, to whom the Court of Appeal would accord

standing (App. A at 19, 23), make no property tax

contribution to the Project and thus have no greater

interests than Petitioners in this regard."

° See, e.g., Health & Safety Code § 33071: "The

Legislature finds and declares that a fundamental

purpose of redevelopment is to expand the supply of

low- and moderate-income housing, ... ." See also id.

§§ 33334.2, 33334.3, 33334.6, 33413.

° In Phoenix, the Court declared that limiting the

franchise to property owners would be unjustified even

in municipalities that look only to property tax revenues

for servicing general obligation bonds, since "a significant

part of the ultimate burden of each year’s tax on rental

property will very likely be borne by the tenant rather

than the landlord... ." 399 USS. at 210.

Third, the Court of Appeal’s holding presumably

would confer standing also on nonresident property

taxpayers of Duarte. App. A at 19, 23. Such

nonresidents are likely to have less interest in the

Redevelopment Plan and its consequences than

Petitioners and others who live in Duarte.

Fourth, one of the Petitioners, Laura Feinner,

receives County-supported health services. App. A at

19. She is thus particularly interested in the effects

the Redevelopment Plan may have on tax revenues to

the County.

In sum, this Court’s conclusion in City of Phoenix

applies at least as strongly to this case. There is no

basis for concluding, as the Court of Appeal did, that

non-property - tax paying residents of Duarte,

especially lower-income ones like Petitioners, have less

interest in the Redevelopment Plan than do property

taxpayers. The Court of Appeal’s denial of

Petitioners’ access to the courts in this case thus

violated their rights under the Equal Protection

Clause.

CONCLUSION

For the foregoing reasons, Petitioners respectfully

request that a writ of certiorari be granted.

Respectfully submitted,

STEPHEN R. BARNETT

JONATHAN LEHRER-GRAIWER

ra, arr he jf

BY: STEPHEN R. BARNETT D> A

APPENDIX A

NOT TO BE PUBLISHED

IN THE COURT OF APPEAL

OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

CITRUS COMMUNITY ) No. B067380

COLLEGE DISTRICT, )

)

Plaintiff and Respondent, ) (Super.Ct.No. )

BC007801 )

)

REDEVELOPMENT AGENCY )

OF THE CITY OF DUARTE, _)

et al., )

)

Defendants and Appellants.

2-A

APPEAL from a judgment of the Superior

Court of Los Angeles County, Richard C. Hubbell,

Judge. Reversed and Dismissed.

Rutan & Tucker, Dan Slater and Jeffrey M.

Oderman for Defendants and Appellants.

De Witt W. Clinton and Manuel A. Valenzuela

for Plaintiff and Respondent City of Los Angeles.

Wagner, Sisneros & Wagner and T.A. Wagner

for Plaintiff and Respondent Citrus Community

College District.

John E. Rittmayer and Jonathan

Lehrer-Graiwer for Plaintiffs and Respondents Alice

Allen and Laura Feinner.

3-A

INTRODUCTION

On May 31, 1988, the Duarte City Council ap-

proved a redevelopment plan (Plan) for the Rancho

Duarte Phase III Redevelopment Project. At that

time, the Plan did not include the tax increment

financing provisions authorized under Health and

Safety Code Section 336700.' Such provisions are

optional and may be added later by amending an

existing plan. (§ 33457.) They allow tax monies

resulting from any increase in the assessed valuation of

property within the project area to be placed in a

special fund for repayment of the indebtedness

incurred in financing that project, while the taxing

agency continues to receive "the same amount of

money it would have realized under the assessed

valuation existing at the time the project was

approved... ." (Redevelopment Agency v. County of

San Bernardino (1978) 21 Cal.3d 255, 259.)

In March 1989, after having expended more

than $4 million to acquire about 30 percent of the real

property covered by the Plan, Duarte determined that

the cost of the project would substantially exceed

previous estimates. Duarte notified the public and

Los Angeles County, its flood control district, public

library, and consolidated fire protection district

(collectively County), and Citrus Community College

District (Citrus) of its intent to amend the Plan to

include section 33670 tax increment financing

provisions (Amendment). (§ 33344.5.) Duarte stated

that "[o]ther aspects of the Redevelopment Plan and

Project Area are not proposed to be changed,

‘All statutory references are to the Health and Safety

Code unless otherwise indicated.

Fe ee a a

4-A

modified or extended by the Amendment, except as

necessary to provide for the collection of tax

increment revenues."

On May 29, 1990, County submitted its written

objections to the proposed Amendment, including that

[t]he tax increment financing provisions of the

Amendment will cause a Significant financial burden

and detriment on the County by depriving the County

of its share of the property taxes which are needed for

the continued Provision of service to the area" and

that Duarte had failed to make a current finding that

the geographical area included in the Plan was

"blighted."

On June 26, 1990, Duarte approved its

Ordinance No. 666, thereby adopting the Amendment.

In a consolidated action, County, Citrus, and

two private citizens, Alice Allen and Laura Feinner, all

respondents herein, challenged the validity of the

amendment on several grounds and requested

declaratory and injunctive relief and the issuance of a

writ of mandamus to compel Duarte to reconform its

underlying housing element to comply with state law.

Trial was held and the court took the matter

under submission. The court issued a 14-page

Statement of decision and granted judgment in favor of

respondents. The judgment voided the Amendment

and permanently enjoined Duarte from implementing

it. Allen and Feinner moved to set aside and vacate

the judgment and substitute a new judgment which

would include the issuance of a writ of mandamus to

compel Duarte to bring its housing element into

compliance with state law within 120 days. The court

5 -A

denied the motion. Duarte’s appeal and Allen and

Feinner’s cross-appeal, based on the denial of their

motion, followed.

Two recent events impact this case. First,

Duarte has modified its housing element to conform

to state law, as certified by the California Department

of Housing and Community Development. Thus, we

dismiss Allen and Feinner’s cross-appeal, which sought

a new judgment requiring modification of the housing

element.

Second, on February 3, 1994, Duarte and

County filed a joint application and stipulation for

partial dismissal of the appeal with prejudice, reversal

of judgment, and remand to the superior court for

vacation of judgment and entry of a new and different

judgment in favor of Duarte. This step was based on

a settlement agreement between Duarte and the

County respondents and a separate agreement

between Duarte and Citrus’ Allen and Feinner did

* With respect to County taxing entities flood control

district, library, and fire district, the settlement

agreement provides that all of their proportionate

share of the expected increased tax revenues from the

amended redevelopment plan will be passed through

to them, though the transfer of some monies may be

deferred for use by Duarte under certain specified

circumstances. The agreement passes through a

portion of County’s share, deferring payment of the

balance under specified circumstances. Duarte is

required to repay all retained monies and accrued

interest. The agreement also provides that a

percentage of any monies diverted to Duarte from

County or its taxing entities shall be set aside for low-

6-A

not join in the application and stipulation. Duarte

acknowledges that there can be only one judgment

entered because the actions were consolidated

(Committee for Responsible Planning v. City of Indian

Wells (1990) 225 Cal.App.3d 191, 195), the practical

effect of which is that it cannot have a final judgment

validating the Amendment with respect to County and

another invalidating the Amendment with respect to

Allen and Feinner. This court went forward with the

scheduled oral argument on February 8, 1994, in

conjunction with our review of the record, to ascertain

what issues remained for consideration. We conclude

that Allen and Feinner did not have standing to bring

the action. We reverse the judgment as to Allen and

Feinner and order the trial court to vacate the

judgment with respect to Allen and Feinner. Pursuant

to the agreements reached between County, Citrus and

Duarte, we dismiss the appeal and remand the matter

to the trial court for further proceedings consistent

with the agreements of the parties. (Neary v. Regents

of University of California (1992) 3 Cal.4th 273.)

DISCUSSION

In their first 12 causes of action, Allen and

Feinner asserted that Duarte had either failed to make

findings as required by §33367 or that the findings

and moderate-income housing in compliance with the

CRL. The separate agreement with Citrus provides

for a transfer of to percent of its share of tax

increment revenues, less that required statutory set

aside for low-and moderate-income housing, resulting

in a net transfer of 48 percent.

7-A

made were not supported by substantial evidence.’

> Former section 33367 provides in pertinent part:

"The ordinance shall contain all of the following: [1]

....+{[] (d) The findings and determinations of the

legislative body that: [{1] (1) The project area is a

blighted area, the redevelopment of which is necessary

to effectuate the public purposes declared in this part.

[11] (2) The redevelopment plan would redevelop the

area in conformity with this part and in the interests of

the public peace, health, safety, and welfare. [f]] ....

[11] (4) The redevelopment plan conforms to the

general plan of the community. [{]] (5) The carrying

out of the redevelopment plan would promote the

public peace, health, safety, and welfare of the

community and would effectuate the purposes and

policy of this part. [f]] ....[] (7) The agency has

a feasible method or plan for the relocation of families

and persons displaced from the project area, if the

redevelopment plan may result in the temporary or

permanent displacement of any occupants of housing

facilities in the project area. [|] (8) There are, or

are being provided, in the project area or in other

areas not generally less desirable in regard to public

utilities and public and commercial facilities and at

rents or prices within the financial means of the

families and persons displaced from the project area,

decent, safe, and sanitary dwellings equal in number to

the number of and available to the displaced families

and persons and reasonably accessible to their places

of employment. [11] (9) All noncontiguous areas of a

project area are either blighted or necessary for

effective redevelopment and are not included for the

purpose of obtaining the allocation of taxes from the

area pursuant to Section 33670 [provision for division

8 -A

The 13th cause of action alleged that Duarte had

of taxes generated by taxable property in

redevelopment Project area] without other substantial

justification for their inclusion. [1] (10) Inclusion of

any lands, buildings, or improvements which are not

detrimental to the public health, safety, or welfare is

necessary for the effective redevelopment of the area

of which they are a part; that any area included is

necessary for effective redevelopment and is not

included for the purpose of obtaining the allocation of

tax increment revenues from the area pursuant to

Section 33670 without other substantial justification

for its inclusion. [M1] (11) The elimination of blight

and the redevelopment of the project area could not

be reasonably expected to be accomplished by private

enterprise acting alone without the aid and assistance

of the agency. [Ml] (12) The effect of tax increment

financing will not cause a Significant financial burden

or detriment on any taxing agency deriving revenues

from a project area. This finding shall only be

required when the project is financed in part or in

whole from revenues derived from the allocation of

taxes pursuant to Section 33670. [1] (€) A statement

that the legislative body is satisfied that permanent

housing facilities will be available within three years

from the time occupants of the project area are

displaced and that pending the development of the

facilities, there will be available to the displaced

occupants adequate temporary housing facilities at

rents comparable to those in the community at the

time of their displacement." (Stats. 1984, ch. 147, §

12, pp. 506-508.)

9-A

failed to produce an adequate report to accompany

the Plan (§ 33352). They also sought declaratory and

injunctive relief, denominated as their 14th and 15th

causes of action, respectively.‘ Allen and Feinner

challenged the Project by purporting to bring both a

validation action, citing section 33501 and Code of

Civil Procedure section 863, and a taxpayer’s action to

enjoin illegal municipal expenditures, citing Code of

Civil Procedure section 526a.°

* Allen and Feinner’s original complaint, filed August

27, 1990, and their first amended complaint, filed June

18, 1991, list identical causes, of action, set forth in

virtually identical language.

* At the time Allen and Feinner commenced their

action, section 33501 provided: "An action may be

brought pursuant to Chapter 9 (commencing with

Section 860) of Title 10 of Part 2 of the Code of Civil

Procedure to determine [the validity of a

redevelopment plan], including . . . the legality and

validity of all proceedings theretofore taken for or in

any way connected with . . . the adoption of the

redevelopment or renewal plan..." (Stats. 1965, ch.

1665, § 40, p. 3788.) This section also applies to

redevelopment plans as amended. (Card v.

Community Redevelopment Agency (1976) 61

Cal.App.3d 570, 574, fn. 5.)

Code of Civil Procedure section 863 provides:

"If no proceedings have been brought by the public

agency pursuant to this chapter, any interested person

may bring an action within the time and in the court

specified . . . to determine the validity of such matter .

.." (Emphasis added.)

10-A

Duarte demurred and argued that Allen and

Feinner did not have standing to allege a significant

financial burden on the taxing agencies, plaintiffs’ fifth

cause of action.° A minute order reflects that the trial

Code of Civil Procedure section 526a provides:

"An action to obtain a judgment, restraining and

preventing any illegal expenditure of, waste of, or

injury to, the estate, funds, or other property of a

county, town, city or city and county of the state, may

be maintained against any officer thereof, or any

agent, or other person, acting in its behalf, either by a

citizen resident therein, or by a corporation, who is

assessed for and is liable to pay, or, within one year

before the commencement of the action, has paid, a

tax therein. ..."

° The operative paragraphs of the fifth cause of action

read: "43. Section 3(g) of Ordinance No. 666

purports to contain a finding that the increased tax

increment financing any taxing agency deriving

revenues from the Project Area. This finding is not

supported by substantial evidence. [1] 44. The City

has abused its discretion in failing to consider the

financial impacts of the tax allocation and bonding

limits adopted by the Redevelopment Plan on the

ability of Los Angeles County and other agencies to

provide public and social services, particularly to

persons and families of low and moderate income.

Among other things, the City has failed to fully

consider the impact of the Jarvis-Gann Initiative and

the fact that taxing agencies are deprived of substantial

tax revenues as a result of the Redevelopment Plan

and that they are restricted in their ability to raise

additional tax revenues, as a result of said initiative, in

11-A

court rejected the argument, citing Code of Civil

Procedure section 863 and Regus v. City of Baldwin

Park (1977) 70 Cal.App.3d 968 (discussed below). In

its answer, Duarte again raised this issue as an

affirmative defense, repeating its assertion with respect

to the fifth cause of action, and, in addition, asserting

that Allen and Feinner did not have standing to

request declaratory relief or an injunction to prevent

the contemplated expenditure of public funds. Duarte

again argued the issue in its trial brief and cites the

argument in its brief on appeal.

Allen and Feinner stated in their first amended

complaint that they are lower income residents of the

City of Duarte who pay housing rent in excess of fifty

percent of their gross monthly incomes and are

"beneficially interested in the enforcement of

[Duarte’s] public duties. . . .". They asserted that the

alleged diversion of taxes would "decrease the funds

available to Los Angeles County for social services,

including health and welfare benefits to lower income

persons and families." They further alleged that they

had paid "a tax" to the City of Duarte within one year

of the commencement of this action.

The record further discloses that Allen and

Feinner agreed in their opposition to a motion for

summary adjudication of issues by Duarte that it was

undisputed they are lower income residents of the City

of Duarte. Also, Feinner declared that county

provided her Aid to Families with Dependent Children

order to compensate for the lost revenues. [fj 45.

Consequently, the Redevelopment Plan and Ordinance

No. 851 approving and adopting it, are null and void."

12-A

and that she qualified to receive medical care at

county hospitals and clinics should the need arise.

At oral argument, in response to questions

from the bench, Duarte stated its belief that the

standing issue went only to the fifth cause of action, in

which Allen and Feinner alleged that the Amendment

would result in a significant financial burden on the

taxing agencies. Our review of the statutes and case

law demonstrates that the standing issue envelops the

entire action, thus leading to the reversal of the

judgment with respect to these respondents and

dismissal of the appeal.’

Standing to bring validation action (Code Civ.

Proc. §863):

Under Code of Civil Procedure section 367,

'[e]very action must be prosecuted in the name of the

real party in interest... ." (Torres v. City of Yorba

Linda (1993) 13 Cal.App.4th 1035, 1040.) "Generally,

a plaintiff must show he or she or those he or she

properly represents have either suffered or are

” Shortly before oral argument, Allen and Feinner

requested judicial notice of a photocopy of what

purports to be a letter dated November 1, 1988, from

Elizabeth G. Hill, California Legislative Analyst, to

State Senator Robert Presley, Chairman, Senate

Appropriations Committee, regarding the replacement

of revenues lost to public schools as a result of the

CRL. The request is denied on the ground that the

proffered evidence does not constitute an official act

of the California Legislature. (Evid. Code, § 452, subd.

(c).)

13-A

threatened with an injury of sufficient magnitude that

it is reasonably assured the lawsuit will provide an

adequate presentation of all relevant facts and issues.

[Citation.]" (Id. at p. 1041.) As noted (fn. 5, ante), a

public entity itself may bring an action to determine

the validity of its redevelopment project. (Code Civ.

Proc., § 863; § 33501.) Should it elect not to do so,

"any interested person may bring an action . . . to

determine the validity of such matter." (Emphasis

added; Code Civ. Proc., § 863; id. at p. 1042.) Thus,

the issue is whether Allen and Feinner qualify as

"interested" persons. As Torres v. City of Yorba

Linda, supra, notes, few cases have discussed the term

"interested person" as used in Code of Civil Procedure

section 863.

In Sweetwater Valley Civic Assn. v. City of

National City (1976) 18 Cal.3d 270, defendant made a

finding under the CRL that a 130 acre area was

"blighted." The area comprised a 103-acre golf course,

in active operation and open to the public, and 27

unproductive acres; 115 acres were owned by a single

party. The California Supreme Court determined that

the blight finding was subject to judicial review under

section 33501. (Id. at p. 277.) No issue regarding

standing was considered. Plaintiff association was

described as "a group of 600 taxpayers, residents, and

property owners of Sweetwater Valley." (Id. at p.

273.) There is no indication whether Sweetwater

Valley was a governmental entity, whether any part of

the redevelopment area was located within Sweetwater

Valley, or whether any member of the plaintiff

association owned property in or otherwise had a

direct relationship to the redevelopment project area.

The only reference to Code of Civil Procedure section

863 came when the California Supreme Court noted

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that "[a]lthough [Code of Civil Procedure section 860]

provides for the agency to bring the action, section 863

of that code permits any ’interested person’ to bring

the action within 60 days if the agency does not." (Id.

at p. 277.)

In Card v. Community Redevelopment Agen 4

supra, 61 Cal.App.3d 570, defendant appealed the

invalidation of a city ordinance amending a CRL

redevelopment plan for a project area located within

the City of South Pasadena. The only reference to

Code of Civil Procedure section 863 is stated in a

footnote: "The [defendant] also challenges the

standing of plaintiffs to sue, but plaintiffs clearly are

interested persons within the meaning of Code of Civil

Procedure section 863 in view of the fact that each was

subsequently stipulated to be a citizen, resident and

taxpayer of the city and ’a person interested in the

matter of the amendments to the redevelopment plans

for the [project]."" (Id. at pp. 574-575, fn. 6, emphasis

added.)

In Regus v. City of Baldwin Park, supra, 70

Cal.App.3d 968, plaintiffs challenged defendant’s

ordinance purporting to adopt a redevelopment plan

pursuant to the CRL. The members of a plaintiff

unincorporated association and individual plaintiffs

were residents and "taxpayers" of defendant city. They

resided and owned real property located solely outside

the boundaries of the redevelopment project area.

The county and other taxing agencies, all of which

levied taxes upon property within the redevelopment

area, had assessed taxes on these individuals’ real

property within one year of the filing of the action.

(Id. at p. 971.) Regus determined that the individual

plaintiffs had standing to bring a validation action, as

| : .

1S-A

well as a taxpayer’s action, citing Sweetwater Valley

. Civic Assn. v. City of National City, supra, 18 Cal.3d

‘ 270 and Card v. Community Redevelopment Agency,

: supra, 61 Cal.App.3d 570. It noted that Sweetwater

had “entertained" a civic association’s attack on a

redevelopment project where, although its members

were taxpayers, residents, and property owners of

Sweetwater Valley, there was no allegation that

association members owned property within the

project area, and where such ownership was unlikely

because of the existence of a large landowner. The

Regus court acknowledged that Sweetwater had not

discussed standing. (Regus v. City of Baldwin Park,

supra, 70 Cal.App.3d at pp. 971-972.) With respect to

Card, Regus noted that the stipulation regarding

standing did not include that the plaintiffs owned real

property within the project area.

Regus concluded as follows: "We think it

unlikely the Legislature intended to limit review of

such projects to actions initiated by the agency itself or

by residents of the project area, given the

presumptively disadvantaged and blighted condition of

a redevelopment project area, which may be largely

vacant or in a state of disrepair and disuse. As

taxpayers of the City of Baldwin Park and of the

County of Los Angeles, plaintiffs have a financial

interest in the outcome of this proceeding, in that the

tax increment financing of the Project will divert tax

revenues from the taxing agencies to which plaintiffs

pay taxes to the treasury of the Redevelopment

Agency. Such a financial interest is likely to motivate

plaintiffs to prosecute the action vigorously and

provides sufficient basis to give them standing.

[Citation.]" (Id. at p. 972.)

DAG teak Siren AB ies cae eA ae

16-A

In Citizens Against Forced Annexation v.

County of Santa Clara (1984) 153 Cal.App.3d 89,

plaintiff unincorporated organization (CAFA), as well

as individual plaintiffs who were members of CAFA,

challenged the validity of annexations of county

territory to the City of San Jose. These annexations

had been proposed and accomplished without elections

under former Government Code section 35000 et seq.

(Municipal Organization Act), which incorporated

Code of Civil Procedure section 860 et seq.

Defendants demurred on the ground that plaintiffs

were not “interested persons" under section 863 and

therefore lacked standing to bring the action.

The appellate court held that "plaintiffs who

allege an interested relationship to particular annexed

territories through land ownership, residency, or voter

registration have standing under section 863 of the

Code of Civil Procedure to challenge the annexations

of those particular territories." (Id. at p. 95.) It

concluded that CAFA also had Standing as an

"interested person" regarding the dismissed territories

because of the nature of the organization: (1) it was

an appropriate organization to function as a monitor

for its members, i.e., to watch for and test the validity

of annexation proceedings, especially given the brief

60-day statute of limitation (Code Civ. Proc., § 860);

and (2) a direct relationship between some of CAFA’s

members and the dismissed territories had been

alleged. (Id. at pp. 95-98.) The court also noted that

a validation action is in the nature of a proceeding in

rem, citing Code of Civil Procedure section 860, but

that the right asserted by CAFA and its members with

respect to annexations "is only the right to see that the

government wielded its annexations power properly."

_ (Id. at p. 98.)

17-A

In Torres v. City of Yorba Linda, supra, 13

Cal.App.4th 1035, two persons challenged defendant

city’s proposed amended redevelopment project,

asserting in part that the diversion of taxes which

would otherwise be paid to the county and other

taxing entities would decrease the funds available to

the county for social services, including health and

welfare benefits for lower income persons and families

in general and those benefits "utilized or likely to be

utilized" by the plaintiffs. (Id. at p. 1039.) In their

first amended complaint, plaintiffs asserted they were

"beneficially interested" in the enforcement of the

defendants’ public duties. They alleged they were

residents of another city but were interested in

residing in defendant city if they could find decent,

safe, sanitary and affordable housing. Each plaintiff

had paid a sales tax to defendant city within one year

before filing the action. One plaintiff alleged she and

her family were classified as "lower income" and either

used or were eligible to receive health and other social

services funded by the county.

Plaintiffs indicated that, with permission of the

court, they would further amend the complaint to

allege that one of the plaintiffs was a property owner

and property taxpayer in the county and that the

alleged failures of the defendant to have an adequate

housing element and land use regulations permitting

development of affordable housing impacted the price

of housing elsewhere in the county, preventing

plaintiffs from having the opportunity to purchase

affordable housing. During the pendency of the

demurrer, plaintiffs moved for issuance of a wmit of

mandate invalidating the redevelopment plan and

directing the defendants to correct the housing

element of its plan. Among the exhibits submitted

18-A

with respect to this issue was an agreement between

the defendants and the county and its fire, flood, and

park districts which provided that 65 percent of the

county’s share and each district’s entire share of the

expected increased tax revenues from the amended

redevelopment plan would be passed through by the

defendants.

The trial court Sustained the demurrer without

leave to amend and determined that the motion for

writ of mandate was moot.

The appellate court affirmed. It reviewed

Sweetwater Valley Civic Assn. v. City of National City,

supra, 18 Cal.3d 270, Card v. Communi

Redevelopment Agency, upra, 61 Cal.App.3d 570,

Regus v. City of Baldwin Park, supra, 70 Cal.App.3d

968, and Citizens Against Forced Annexation v.

County of Santa Clara, supra, 153 Cal.App.3d 89. It

concluded that plaintiffs did not have Standing to

challenge the defendants’ redevelopment plan under

section 863. It rejected plaintiffs’ reliance on

Sweetwater on the ground that the case did not

consider the issue of Standing. It noted that both

plaintiffs lived in another city, did not pay property

taxes in defendant city, and were not "otherwise

beneficially interested in the area covered by the

amended redevelopment plan." (Torres v. City of

Yorba Linda, supra, 13 Cal.App.4th at p. 1043.) It

found the allegations that one plaintiff owned real

Property and paid property taxes to the county, and

that the other claimed she and her family used or were

eligible for several social services partially funded by

the county with Property taxes ,endered plaintiffs,

‘indistinguishable from most other county residents."

(Id. at p. 1044; fn. omitted.) It dismissed plaintiffs’

19-A

reliance on Regus, noting that the case "does not state

a party has standing where he or she is merely a

county taxpayer." (Ibid.) Finally, the court found that

plaintiffs’ assertion that the redevelopment project

would divert revenue from local taxing entities was

questionable in that the complaint alleged the project

was to be financed by issuing bonds secured by tax

increment revenue. The court characterized the

financing scheme as one which permitted the project

to pay "for itself by taking advantage of increased

property tax revenues generated by the project area’s

renovation. [Citations.]" (Ibid.)

In the instant case, Allen and Feinner allege

little more than did the plaintiffs in Torres. Allen and

Feinner are lower income persons who live in rental

housing. Feinner receives Aid to Families with

Dependent Children and qualifies to receive county

supported health services. Both paid "a tax within the

City of Duarte; they do not allege it was a tax assessed

on real property located therein. They claim they are

"beneficially interested" and assert that the diversion of

the tax increment revenue would decrease funding for

socia! services for lower income families, both of which

claims are mere conclusions. Unlike the Torres

plaintiffs, Allen and Feinner are residents of the

defendant city. We conclude that mere residency and

the payment of an unspecified tax within the

defendant city is insufficient to confer standing.

Sweetwater Valley Civic Assn. v. City of

National City, supra, 18 Cal.3d 270 did not consider

the issue of standing and thus cannot be invoked as

authority on this point. (McDowell & Craig v. City of

Santa Fe Springs (1960) 54 Cal.2d 33, 38; Torres v.

City of Yorba Linda, supra, 13 Cal.App.4th at p. 1044,

20-A

fn. 5.) In Card v. Community Redevelo ment Agency,

supra, 61 Cal.App.3d 570, it was stipulated that each

plaintiff was a "citizen, resident and taxpayer of the

city and a person interested in the matter of the

amendments to the redevelopment plans for the

[project]. (Id. at pp. 574-575, fn. 6.) Given that the

plaintiffs were stipulated to be interested persons,

their description as citizens and residents of the

defendant city and "taxpayers" on some undisclosed

basis was superfluous and is of no assistance.

(McDowell & Craig v. City of Santa Fe Springs, supra,

54 Cal.2d at p. 38.)

Regus v. City of Baldwin Park, supra, 70

Cal.App.3d 968, does not fully analyze the issue.

Regus purports to rely, at least in part, on Sweetwater

and Card. In addition, some facts about the plaintiffs

which would aid in the analysis are not set forth: it is

not disclosed what kind of tax each plaintiff paid as a

resident within the city or whether each plaintiff

owned real property within the city. The court rejects

the idea of limiting Standing to residents of the

redevelopment project area (which appears to be a

very narrow interpretation of the legislative intent),

"given the presumptively disadvantaged and blighted

condition" of such area, "which may be largely vacant

Or in a state of disrepair and disuse." (Regus v. City

of Baldwin Park, supra, 70 Cal.App.3d at p. 972.) Of

course, such an area could well have a high population

of lower income residents vitally interested in housing

and related matters, a possibility the Legislature

appears to have considered in expressing its concern

regarding alternative housing for residents when an

area is razed. (§ 33367, subd. (d) (7), (8).)) The

Regus court concludes that the plaintiffs have standing

because they were deemed to have sufficient financial

in SE nae CBN Soe eK Ag he ee

GAA eSB LA et RSA bee NSUAD Pee lee FAN PS hates «tebe

21-A

interest to motivate them to prosecute their action

vigorously since the project would divert tax revenues

from entities to which plaintiffs’ tax payments were

distributed. On balance, we conclude that Regus does

not present a clear rule of law.

Citizens Against Forced Annexation v. County

of Santa Clara, supra, 153 Cal.App.3d 89, interpreting

the validation procedure in conjunction with the

annexation of land pursuant to the Municipal

Organization Act (former Gov. Code, § 35000 et seq.),

held that persons who alleged an "interested

relationship" through land ownership, residency, or

voter registration within the particular annexed

territory had standing to challenge annexation of that

territory, as did the unincorporated association that

functioned as a monitor of annexation proceedings for

its members. Allen and Feinner did not allege

residency within the project area.

Finally, Torres v. City of Yorba Linda, supra,

13 Cal.App.4th 1035, concluded that allegations of

payment of taxes on real property located within the

county, a sales tax paid within defendant city, and a

"beneficial interest" in the price of housing in the

county and eligibility for county social services partially

funded by county taxes were insufficient to confer

standing.

In addition, Torres also questioned the

assertion that funds would be diverted from the taxing

entities because the project was to be funded by bonds

secured by tax increment revenue. In the instant case,

the recent settlement agreements between Duarte and

County reflect that ultimately the County taxing

entities will receive all tax increment revenues due

22-A

them, plus interest should monies be temporarily

diverted. The agreement between Duarte and Citrus

indicates that approximately half of the expected

revenues will be diverted. Allen and Feinner failed to

allege a specific beneficial interest in Citrus and how

the diversion of tax increment funds would adversely

impact them. Since the issue of Standing may be

raised at any time (Life v. County of Los An eles

(1990) 218 Cal.App.3d 1287, 1292, fp. 3), this recent

development further undercuts Allen and Feinner’s

claim.

As stated in Harman v. City and County of San

Francisco (1972) 7 Cal.3d 150: "The fundamental

aspect of standing is that it focuses on the party

seeking to get his complaint before a... . court, and

not [o]n the issues he wishes to have adjudicated.’

[Citation.] A party enjoys standing to bring his

complaint into court if his stake in the resojution of

that complaint assumes the Proportions necessary to

ensure that he will vigorously present his case.

[Citation.] .. . we must determine standing by a

measure of the ‘intensity of the plaintiff's claim to

justice.’ [Citation.]}" (Id. at p. 159.) Here, Allen and

Feinner failed to allege any adverse impact of the

amended redevelopment plan on their residency within

the City of Duarte, nor did they offer any evidence of

such impact at trial. In view of the fact that Duarte’s

housing element has since been declared to be in full

compliance with state law, and the existence of the

recent settlement agreements and application to

dismiss the appeal with respect to County and Citrus,

we conclude that Allen and Feinner do not have

standing to bring a validation action.

isi Ate Sa? Kmy See ee ware

23-A

Standing to bring taxpayer’s action (Code Civ.

Proc., 526a):

Allen and Feinner also purport to bring their

action under the authority of Code of Civil Procedure

section 526a (fn. 5, ante). As discussed in detail in

Torres v. City of Yorba Linda, supra, 13 Cal.App.4th

1035, a sales tax is a levy on the retailer, not the

consumer, and therefore does not confer standing to

bring an action under this section. Allen and Feinner

alleged that they are lower income persons living

within the City of Duarte, one of whom owns tax

assessed real property somewhere in the county. They

did not specify that they had paid a property tax

within the City of Duarte and no evidence was offered

at trial that either had paid such tax. We conclude

they lacked standing to bring a taxpayer’s action.

DISPOSITION

We reverse the judgment as to Ailen and

Feinner and order the trial court to vacate the

judgment with respect to Allen and Feinner. Pursuant

to the agreements reached between County, Citrus and

Duarte, we dismiss the appeal and remand the matter

to the trial court for further proceedings consistent

with the agreements of the parties. (Neary v. Regents

of University of California, supra, 3 Cal.4th 273.)

The respective costs on appeal are to be borne

by each party.

24-A /

NOT TO BE PUBLISHED

HASTINGS, J.

We concur:

WOODS (Arleigh), P.J.

KLEIN, (Brett) J.*

“Assigned by the Chairperson of the Judicial Council. ;

APPENDIX B

OFFICE OF THE CLERK

COURT OF APPEAL

STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

JOSEPH A. LANE, CLERK

5/16/94

DIVISION: 4 DATE:

Legal Services Program

John E. Rittmayer

211 E. Walnut Street

Suite 221

Pasadena, CA. 91101 6423

RE: Allen, Alice

VS.

Duarte, City of Citrus Community College District

2 Civil B067380

Los Angeles NO. BC007801

THE COURT:

Petition for rehearing denied.

APPENDIX C

Second Appellate District, Division Four, No. B067380

S040075

IN THE SUPREME COURT OF THE

STATE OF CALIFORNIA

IN BANK

CITRUS COMMUNITY COLLEGE DISTRICT

Et Al., Respondents

REDEVELOPMENT AGENCY OF THE CITY OF

DUARTE Et Al., Appellants

Petition for review DENIED.

Request for judicial notice DENIED.

LUCAS

Chief Justice

ary

ee | Rare

Be eer,

aj <

Saas

APPENDIX D

NO. BC 007 801

(Consolidated with BC 008 824

and BC 009 159)

In the Superior Court of the State of California

for the County of Los Angeles

CITRUS COMMUNITY COLLEGE DISTRICT,

Plaintiff,

VERSUS

ALL PERSONS INTERESTED IN THE MATTER

OF AMENDMENT NO. 1 TO THE

REDEVELOPMENT PLAN FOR THE RANCHO

DUARTE PHASE III REDEVELOPMENT

PROJECT IN THE CITY OF

DUARTE, etc., et al.

Defendants.

(Statement of Decision)

Before

HUBBELL, Superior Court Judge.

The above-captioned consolidated cases

challenging the validity of Amendment No. 1 to the

Rancho Duarte Phase III Redevelopment Project and

Ordinance No. 666 approving the Amendment, came on

regularly for trial on January 27, 1992, in Department 21

of the Superior Court of the State of California for the

County of Los Angeles, the Honorable Richard C.

2-D

Hubbell, presiding. The actions were filed pursuant to

the Community Redevelopment Law ("CRL") (Cal.

Health & Safety Code §§ 33000 et seq.)' and Code of

Civil Procedure Section 860 et seq.

John J. Wagner of Wagner, Sisneros & Wagner

appeared on behalf of Citrus Community College

District ("Citrus College"), Plaintiff in LASC Case No.

BC 007 801. De Witt W. Clinton, County Counsel of the

County of Los Angeles, by and through Manuel A.

Valenzuela, Deputy County Counsel appeared on behalf

of the County of Los Angeles, Los Angeles County

Flood Control District, Los Angeles County Public

Library and Consolidated Fire Protection District of Los

Angeles County (collectively, the "County"), Plaintiffs in

LASC Case No. BC 008 824. Jonathan Lehrer-Graiwer

and John E. Rittmayer appeared on behalf of Alice and

Laura Feinner, Plaintiffs in LASC Case No. BC 009 159.

Jeffrey M. Oderman and Dan Slater of Rutan & Tucker

appeared on behalf of Defendants.

The court having taken the above matter under

submission on January 27, 1992 after a trial, and having

read and considered all of the exhibits and considered

the summation of counsel and the evidence produced by

both sides on trial of the issues, now renders this

statement of decision in favor of Plaintiffs.

Il. STANDARD OF REVIEW

' Unless otherwise expressly indicated, all

statutory references shall be to the California Health &

3-D

The standard of review applied by the Court in

the review of the findings made by Defendants City of

Duarte ("City") and Redevelopment Agency of the City

of Duarte ("Agency") in adopting Amendment No. 1 to

the Redevelopment Plan for the Rancho Duarte Phase

III Redevelopment Project ("Amendment") was the

substantial evidence test. (In Re Redevelopment Plan

for Bunker Hill (1964) 61 Cal.2d 21; Fosselman’s, Inc. v.

City of Alhambra (1986) 178 Cal.App.3d 806; County of

Santa Cruz v. City of Watsonville (1985) 177 Cal.App.3d

831.)

II. EXHAUSTION ISSUE

A. The Court finds that the Los Angels County

Flood Control District ("Flood") and Los Angeles

County Public Library ("Library"), Plaintiffs in LASC

Case No. BC 008 824, exhausted their administrative

remedies afforded them under the CRL.

(Redevelopment Agency v. Superior Court (Birbeck)

(1991) 228 Cal.Ap.3d 1487.) This finding is based on

the following facts 1) these two entities participated

throughout the redevelopment process; 2) they provided

information to Defendants (which information was used

by Defendants in analyzing various reports); 3) the

Board of Supervisors of the County of Los Angeles

(their governing body) authorized and directed the

County Counsel (their legal representative; See, Cal.

Gov. Code § 27640 et seq., Los Angeles County Charter

Art. IV, § 14) to oppose the Amendment at the public

hearing held by Defendants; and, 4) the County Counsel

filed written opposition on behalf of all the County

taxing entities, including Library and Flood.

4-D

B. The Court also finds that Alice Allen and

Laura Feinner, Plaintiffs in LASC Case No. BC 009 159,

exhausted required administrative remedies afforded

them under the CRL. Plaintiffs verified Complaint

Alleges that they delivered to the City Clerk on or about

May 29, 1990, objections to the Amendment. Complaint

in BC 009 159, paragraph 12. The allegation is verified

by the administrative record which contains a letter of

objection dated May 28, 1990 and received by the City

of May 29, 1990 written by Plaintiffs counsel. [A.R. 365-

367] That letter states on its face that it was submitted

on behalf of the attorney’s two clients, who are residents

of the City. Defendants introduced no evidence the

support their contention that the letter of objections

submitted by Plaintiffs’ attorney was not submitted on

their behalf.

Ill. FINDINGS OF BLIGHT

A. Defendant City was required to make blight

findings under Sections 33367(d)(1) and 33367(d)(11)

and include said findings in Ordinance No. 666 which

approved the Amendment. (Ca. Const. Art. XVI, § 16;

§§ 33354.5, 33352, 33367(d), 33457.1.) The existence of

blight is a necessary pre-requisite to a redevelopment

agency’s right to obtain taxes under Section 33670.

(Calif. Const. Art. XVI, § 16; Regus v City of Baldwin

Park (1977) 70 Cal.App.3d 968, 982.) Consequently,

Plaintiffs’ causes of action challenging the validity of

Amendment No. 1 to the Rancho Duarte Phase III

Redevelopment Project ("Amendment No. 1") and

ordinance No. 666 on the grounds that the City failed to

make findings of blight and other related findings, were

timely since they were filed within 60 days of the

adoption of Ordinance No. 666. Section 33500.

5-D

B. Defendant City failed to make blight findings.

Defendants’ admitted that no blight findings were made.

IV. FINDINGS ON THE INCLUSION OF NON-

BLIGHTED AND NON-CONTIGUOUS AREAS

A. Defendant City was required to make findings

under Sections 33457.1, 33367(d)(9) and 33367(d)(10),

and include those findings in Ordinance No. 666.

B. Defendant City failed to make those findings.

V. FINDINGS ON PROMOTING THE GENERAL

WELFARE AND ON EFFECTUATING PURPOSES OF

THE CRL

A. Defendant City was required to make findings

under Sections 33457.1, 33367(d)(2) and 33367(d)(5),

and include those findings in Ordinance No. 666.

B. The record before the Court does not contain

substantial evidence to support those findings.

Additionally, the findings contained in this Statement of

Decision support the conclusion that Ordinance No. 666

would not promote the general welfare and that it would

not effectuate the purposes of the CRL.

C. Defendant Agency has failed to file with the

State Controller for fiscal years 1987-1988, 1988-1989

and 1989-1990, reports which contain information

required in Sections 33080.1(c) and 33080.4. This

finding is supported by the Declaration of William J.

Murphy and by the Reports of the Department of

Housing and Community Development entitled,

Redevelopment Agencies in California: The Effect of

Their Activities on Housing, Fiscal Years 1989-1990 and

. =

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1987-1988. Defendants did not introduce evidence that

the Agency had in fact submitted the required

information to the State Controller.

Additionally, the Agency has failed to set-aside at

least 20% of the taxes allocated to it under Section

33670 into a Low and Moderate Income Housing Fund

as required by Sections 333334.2 and 33334.6 of the

CRL for at least fiscal years 1989-90 and 1990-91. The

Agency’s Annual Report for Fiscal year 1989-90 claims

that the Agency made findings under Sections

33334.2(a)(1), 33334.2(a)(3) and 33334.6(d) and (e) for

each of the City’s seven redevelopment project areas.

However, findings under Section 33334.6(d) and (e) were

not available and therefore not vaid as to any of the

City’s redevelopment plans, except the David Addition

Plan, because all of the other plans were adopted after

1976. Furthermore, the Agency adopted Resolution No.

RA-264 on November 14, 1989 and Resolution No. RA-

274 on November 13, 1990. Those resolutions made

findings under Sections 33334.2(a)(1) and (a)(3) for the

purpose of not setting aside any taxes allocated to the

Agency into a Low and Moderate Income Housing

Fund. All of those findings were invalid because the

City’s Housing Element, adopted September 26, 1989,

which was in effect at those times, was invalid, as

specified below, rendering the findings invalid.

Additionally, the findings under Section 33334.2(a)(1)

were inconsistent with that Housing Element which

identified significant housing needs in the City for very

low, low and moderate income households. Those

violations of the CRL substantiate that the Agency has

not been effectuating the purposes and policy of the

CRL. Given the Agency’s current violation of the CRL

as to all seven of its redevelopment plant adopted prior

to Amendment No. 1, as concluded in this Section, the

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finding by the City that the redevelopment plan would

effectuate the purposes and policy of the CRL is not

supported by substantial evidence.

VI. FINANCIAL BURDEN OR DETRIMENT

A. Library is not estopped from challenging the

Amendment on the ground that it will suffer financial

detriment. The January 22, 1990 letter relied upon

Defendants, preceded Library’s participation in the fiscal

review process; a process which afforded all taxing

entities an opportunity to fully and completely review the

fiscal impact of the Amendment. (§§ 33352, 33353.3.)

The fiscal review process authorized under Section

33353, involved review of information submitted by

Defendants, a hearing on April 12, 1990 (§33353), and

submission of a report to Defendant on or about May

10, 1990. (§33353.5.)

B. The record lacks substantial evidence to

support the finding made by Defendant City pursuant to

Section 33367(d) (12) that "[t]he effect of tax increment

financing will not cause a significant financial burden or

detriment on any taxing agency deriving revenues from

a project area."

1. The Court finds that Defendants’ actions

thwarted effective review by the Fiscal Review

Committee ("FRC") and that evidence produced by

Plaintiffs throughout the process substantiates the claim

that the Amendment will cause significant financial

burden or detriment.

2. The record reveals that the FRC found that

the assessed valuation of the project area since 1986-87

(approximately two (2) fiscal years before the ordinance

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approving the original plan became effective) had

increased by approximately 20 percent. The FRC

conclusion that the taxing entities could reasonably

expect to receive this or a substantial portion of this

historical increase in the absence of redevelopment

substantiates the claim that the Amendment would cause

significant financial burden or detriment under Section

33012(b).

3. The FRC Report authorized by Section

33353.5(b) complies with the statutory requirements of

the CRL and contains substantial evidence in and of

itself to support a claim of significant financial

detriment.

VII. DEFENDANTS FAILED TO COMPLY WITH

PROCEDURAL REQUIREMENTS

The written response and findings prepared by

Defendant Agency to the County’s written objections

filed at the joint public hearing of May 29, 1990

("Objections") did not meet the requirements set forth in

Section 33363. The Court finds that the response, in

part, failed to provide good faith, reasoned analysis.

VIII. PURPOSES OF THE COMMUNITY

REDEVELOPMENT LAW

Defendants City and Agency violated the

purposes of the Community Redevelopment Law

(§§33000 et seq.) in adopting the Amendment. The

evidence produced at trial reveals that the purpose of

the Amendment is to capture tax increment away from

the Citrus College, the County and other taxing entities

in the absence of blight and without substantial

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justification. (Regus v. City of Baldwin Park (1977) 70

Cal.App.3d 968.)

IX. NEED FOR PUBLIC PARTICIPATION

A. Defendant City was required to make a

finding under Section 33457.1 and 33367(d)(11), and to

include that finding in Ordinance No. 666.

B. Defendant City failed to make that finding.

X. HOUSING ELEMENT

A. Defendant City was required to make a

finding under Sections 33457.1 and 33367(d)(4), and to

include that finding in Ordinance NO.666.

B. The General Plan of the City in effect at the

time of the adoption of Ordinance No. 666 is the one

against which the Amendment is to be adjudged for

consistency. A housing element is a mandatory element

of a general plan. (Cal. Gov. Code §65302(c).) The

Housing element of the City in effect at the time of the

adoption of the Amendment is the one adopted on

September 26, 1989.

C. Sections 33331 and 33367(d)(4) required both

that Ordinance No. 666 must have been consistent with

the City’s general plan in effect at the time of its

adoption on June 26, 1990 and that such general plan

must have been in compliance with state law. Lesher

Communications, Inc. v. City of Walnut Creek (1990) 52

Cal.3d 531, 537, 541, 544; Kings County Farm Bureau v.

City of Hanford (1990) 221 Cal.App.3d 692, 741-742;

Neighborhood Action Group v. County of Calaveras

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(1984) 156 Cal.App.3d 1176, 1184, 1187-1188; Camp v.

Board of Supervisors (1981) 123 Cal.App.3d 334, 348-

353, 355.

D. To the extent that a nexus requirement exists

as to the requirement in Section 33367(D)(4), the City’s

Housing Element has a bearing on the Amendment

because the Amendment and the Original Plan projected

and implemented the destruction of 47 residential units,

many of which were occupied and affordable to low and

moderate income households. In contrast, the Housing

Element is required, among other things, to assess the

City’s housing needs and to adopt quantified objectives

and a five-year housing program to meet those housing

needs, particularly the needs for housing affordable to

low and moderate income households. The City’s

Housing Element did not substantially comply with the

requirements of the Housing Element Law (Cal. Gov.

Code §§ 65580 et. seq.) for the following reasons:

1. The Housing Element does not substantially

comply with the provisions of Government Code Section

65583(a)(3) for the following reasons, inter alia. The

"Inventory of land suitable for residential development"

consists merely of the City’s existing zoning categories by

gross acreage and maximum permissible density; it does

not specify the vacant sites in the City which are suitable

for such use and it does not consider areas not currently

zoned for residential use which are suitable for such use,

as required in Government Code Section 65583(a)(3).

Additionally, the date on the gross acreage for higher

density residential areas in the City’s Land Use Element,

rendering those two elements inconsistent and also in

violation of Government Code Section 65300.5. (Sierra

Club _v. Board of Supervisors (1981) 126 Cal.App.3d

698.)

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2. The Housing Element does not substantially

comply with the provisions of Government Code Section

65583(a)(4) for the following reasons, inter alia: (1) it

fails to identify the City’s discriminatory treatment

against new low and moderate income housing which

subjects it to a design review process apparently not

applicable to other housing; (iii) it fails to analyze the

densities required for the development of housing

affordable to very low, low and moderate income

households and it fails to determine whether the City

has enough land zoned at such densities to meet its

existing and future housing needs for those households;

and (iv) it identifies, but fails to analyze, that

implementation of its land use policy may result in the

removal of housing;

3. The Housing Element does not substantially

comply with the provisions of Government Code Section

65583(a)(6) by failing to analyze the City’s needs for

emergency shelters;

4. The Housing Element does not substantially

comply with the provisions of Government Code Section

65583(b) in that it fails to establish quantified objectives

equal either to the City’s total housing needs by income

category or to the maximum number of low and

moderate income housing units that can be constructed,

rehabilitated or conserved over a five-year-time-frame,

as required in Government Code Section 65583(b). The

Housing Element fails to provide any evidence to

establish that the quantified objectives are the maamum

number of housing units that can be constructed,

rehabilitated, and conserved over a five-year time frame.

5. The Housing Element does not substantially

comply with the provisions of Government Code Section

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65583(c) (first paragraph) in that it fails to utilize in its

housing programs land use and development controls or

to provide available regulatory concessions and

incentives for the development of very low and low

income housing;

6. The housing element does not substantially

comply with the provisions of Government Code Section

65583(c)(1) in that it fails to identify adequate sites

which will be made available through appropriate zoning

and development standards to meet the City’s housing

goals and needs for low and moderate income housing.

The failure of the Housing Element to have an adequate

inventory of land suitable for residential development

makes compliance with this requirement impossible;

7. The Housing Element does not substantially

comply with the provisions of Government Code

Sections 65583(c)(2) in that it fails to include program

actions which demonstrate that the City will use its local

power to assist in the development of adequate housing

to meet the City’s needs for very low, low and moderate

income households.

8. The Housing Element does not substantially

comply with the provisions of Government Code Section

65583(c)(3) in that it fails to address and remove

governmental constraints to the maintenance,

improvement and development of housing, particularly

low and moderate income housing. The failure of the

Housing Element to adequately analyze the City’s

governmental constraints makes compliance with this

provisions impossible.

9. The Housing Element does not substantially

comply with the provisions of Government Code Section

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65583(c)(4) in that if fails to contain any program to

conserve existing housing affordable to lower income

households. (Buena Vista Gardens Apartment Assn. v.

City of San Diego Planning Department (1985) 175

Cal.App.3d 289, 302-303.)

10. The Housing Element does not substantially

comply with the provisions of Government Code Section

65588(a) in that it fails to contain an evaluation of the

three factors specified in

Government Code Section 65588(a)(1) to (3). As noted

by California Department of Housing and Community

Development the only thing which could qualify as such

an evaluation is the mere listing of gross annual housing

production of housing. While this information might be

considered to partially, though incompletely, satisfy the

requirement for an evaluation of "progress in

implementation" [Cal. Gov. Code Sec. 65588(a)(3)], the

Housing Element is totally devoid of any evaluation of

the "effectiveness of the element" or of the

appropriateness of goals, objectives and policies." (Cal.

Gov. Code Sec. 65588(a)(1) and (a)(2).

11. The City also failed to submit a draft of the

Housing Element to the California Department of

Housing and Community Development ("HCD") prior to

its adoption in violation of Government Code Section

65585. The violation deprived HCD of its statutorily

sanctioned input before adoption of the Housing

Element and, in itself, rendered the Housing Element

facially invalid.

This finding is based on the letter by HCD dated

June 27, 1990 reviewing Duarte’s adopted Housing

Element." [A.R. 1124] That evidence is not rebutted by

the declaration of Marc Blodgett submitted by

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Defendants. Mr. Blodgett says that he "sent" the draft

amended Housing Element to HCD but does not explain

what he meant by "sent." This evidence does not invoke

the presumption established by Evidence Code section

641. Furthermore, Mr. Blodgett does not state

anywhere in his declaration that he was ever informed by

any HCD staff that HCD had received the draft

amended Housing Element. Consequently, the Court

cannot conclude that Defendants complied with the

requirement of Government Code section 65585 to

submit the City’s draft amended Housing Element to

HCD at least 45 days prior to its adoption.

XI. CONCLUSION

Based on the above, the Court hereby grants

judgment in favor of Plaintiffs declaring that Ordinance

No. 666 and Amendment No. 1 to the Rancho Duarte

Phase III Redevelopment Project are void and of no

effect. Furthermore, this Court grants judgment

declaring that Defendants Community Redevelopment

Agency of the City of Duarte and City of Duarte are not

entitled to implement the Amendment or demand or

receive tax increases in the Amendment area and that

said Defendants are not entitled to expend any such

revenues for carrying out the Amendment.

DATED: April 27, 1992

RICHARD C. HUBBELL

Judge of the Superior Court

APPENDIX E

NO. BC 007 801

(Consolidated with BC 008 824

and BC 009 159)

In the Superior Court of the State of California

for the County of Los Angeles

CITRUS COMMUNITY COLLEGE DISTRICT,

Plaintiff,

VERSUS

ALL PERSONS INTERESTED IN THE MATTER

OF AMENDMENT NO. 1 TO THE

REDEVELOPMENT PLAN FOR THE RANCHO

DUARTE PHASE III REDEVELOPMENT

PROJECT IN THE CITY OF

DUARTE, etc., et al.

Defendants.

(Judgment April 27. 1992)

Before

HUBBELL. Superior Court Judge

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The above-captioned consolidated cases challenging the

validity of Amendment No. 1 to the Rancho Duarte

Phase III Redevelopment Project and Ordinance No.

666 approving the Amendment, came on regularly for

trial on January 27, 1992, in Department 21 on the

Superior Court of the State of California for the County

of Los Angeles, the Honorable Richard C. Hubbell,

presiding. The actions were filed pursuant to the

Community Redevelopment Law ("CRL") (Cal. Health

& Safety Code §§ 33000 et seq.) and Code of Civil

Procedure Section 860 et seq.

John J. Wagner, Sisneros & Wagner appeared on behalf

of Citrus Community College District ("Citrus College"),

Plaintiff in LASC Case No. BC 007 801. De Witt W

Clinton, County Counsel of the County of Los Angeles,

by and thorugh Manuel A. Valenzuela, Deputy County

Counsel appeared on behalf of the County of Los

Angeles, Los Angeles Flood Control District, Los

Angeles County Public Library and Consolidated Fire

Protection District of Los Angeles County (collectively,

the "County"), Plaintiffs in LASC Case No. BC 008 824.

Jonathan Lehrer-Graiwer and John E. Rittmayer

appeared on behalf of Alice Allen and Laura Feinner,

Plaintiffs in LASC Case No. BC 009 159. Jeffrey M.

Oderman and Dan Slater of Rutan & Tucker appeared

on behalf of Defendants.

The Court having taken the above matter under

submission on January 27, 1992 after a trial, and having

read and considered all of the exhibits and considered

the summation of counsel and the evidence produced by

both sides on trial of the issues, and having issued its

ruling on the matter:

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NOW, THEREFORE, IT IS ORDERED,

ADJUDGED, AND DECREED as follows:

1. Amendment No. 1 to the

Redevelopment Plan for the Rancho Duarte Phase III

Redevelopment Project ("Amendment") in the City of

Duarte and Ordinance No. 666 approving the

Amendment are void and of no effect.

ae Defendants City of Duarte ("City")

and Redevelopment Agency of the City of Duarte

("Agency") are not entitled to implement the

Amendment or demand or receive tax increment

revenues attributable to the assessed valuation increases

in the Amendment area and that said Defendants are

not entitle to expend any such revenues for carrying out

the Amendment.

3. Defendants City and Agency are

hereby permanently enjoined from taking any action to

implement or carry out the Amendment, and from

receiving any tax increment revenues from the Rancho

Duarte Phase III Redevelopment Project area

attributable to the Amendment.

4 Upon proper motion, Citrus

Community College District, Plaintiff in LASC Case No.

BC 007 801, shall be entitled to recover from

Defendants City and Agency, and each of them, its costs

of suit as provided in Code of Civil Procedure 1033.5, as

determined by this Court.

5. _. Upon proper motion, County of Los

Angeles, Los Angeles Flood Control District, Los

Angeles County Public Library and Consolidated Fire

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Protection District of Los Angeles County, Plaintiffs in

LASC Case No. BC 008 824, shall be entitled to recover

from Defendants City and Agency, and each of them,

their costs of suit as provided in Code of Civil Procedure

1033.5, as determined by this Court.

6. Upon proper motion, Alice Allen

and Laura Feinner, Plaintiffs in LASC Case No. BC 009

159, shall be entitled to recover from Defendants City

and Agency, and each of them, their costs of suit as

provided in Code of Civil Procedure 1033.5, as

determined by this Court.

DATED: April 27, 1992

RICHARD C. HUBBELL

Judge of the Superior Court

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