City of Pasadena v. Cohen

Filed 8/19/14 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Sacramento) ----

CITY OF PASADENA et al., C073654

Plaintiffs and Respondents, (Super. Ct. No. 34-2012-00134585-CU-MC-GDS) v.

MICHAEL COHEN, as Director, etc.,

Defendant and Appellant.

APPEAL from a judgment of the Superior Court of Sacramento County, Shelleyanne W. L. Chang, Judge. The order granting a preliminary injunction is vacated, and the matter is remanded with directions.

Kamala D. Harris, Attorney General, Douglas J. Woods, Assistant Attorney General, Marc A. LeForestier, Stephanie F. Zook and Seth E. Goldstein, Deputy Attorneys General, for Defendant and Appellant.

Kane, Ballmer & Berkman, Murray O. Kane, Guillermo A. Frias; and R. Bruce Tepper for Plaintiffs and Respondents.

Given the dire condition of state finances, in the summer of 2011 the Legislature enacted legislation (Stats. 2011, 1st Ex. Sess. 2011-2012, ch. 5X (hereafter chapter 5X)), primarily within the Health and Safety Code,1 that barred any new redevelopment agency

1 Undesignated statutory references are to the Health and Safety Code.

1

obligations, and established procedures for the windup and dissolution of the obligations of the nearly 400 redevelopment agencies then existing. (California Redevelopment Assn. v. Matosantos (2011) 53 Cal.4th 231, 241, 246, 250-251, 253 (Matosantos).)2 This case stems from a dispute arising out of a process we might call the “Great Dissolution.”

Defendant Department of Finance (the Department) disapproved two items included in the “Recognized Obligation Payment Schedule” (ROPS)3 of plaintiff City of Pasadena (the City).4 The City acts as “successor agency” to the Pasadena Community Development Commission5 (§§ 34171, subd. (j), 34173), determining that these were not enforceable obligations of the Pasadena redevelopment agency. Both obligations expire in 2014; the first apparently involved reimbursement for pension bonds and the other for

2 Those interested in the history of redevelopment, the manner in which property tax revenues have become a zero-sum game for local agencies, the impact redevelopment has had on this zero-sum game and the evolving state obligation for school funding, and the resulting legislative determination during a period of financial straits to abolish redevelopment agencies may read Justice Werdegar’s excellent exegesis in Matosantos, which upheld chapter 5X in the face of challenges from the arrayed forces of those who had benefitted under the status quo. (Matosantos, supra, 53 Cal.4th at pp. 242-252.) 3 This is “the document setting forth the minimum payment amounts and due dates of payments required by enforceable obligations” of the former redevelopment agencies. (§§ 34171, subds. (h) & (d) [defining “enforceable obligations”], 34179, subd. (h) [vesting the Department with power to disapprove inclusion of items in a ROPS].) The ROPS at issue involves enforceable obligations due in the period of January to June 2013 (payable on Jan. 2, 2013), which the City refers to as “ROPS III.” 4 There are two other nominal individual plaintiffs asserting their interests as third party beneficiaries of agreements between the City and its former redevelopment agency. As best we can tell, although counsel for the City asserted at oral argument that the individuals are actively appearing on appeal, the individual plaintiffs have not submitted any independent briefing, and the City has not suggested any manner in which our resolution of the Department’s standing on appeal or the propriety of declaratory relief requires different treatment of the individual plaintiffs on these two issues. We thus refer only to the City as plaintiff. 5 This is the City’s now defunct redevelopment agency (hereafter Pasadena redevelopment agency).