SIXTH APPELLATE DISTRICT: Reversed & Remanded to trial court w/directions (Mandurrago et al. v. City of Carmel-By-The-Sea et al.)

ABSTRACT: Disposition today, 15 June 2010 - the opinion was filed with the Court to reverse and remand to trial court with directions. Justice Nathan D. Mihara authored the opinion and Justices Franklin D. Elia and Richard J. McAdams concurred. The opinion (thirteen pages) is reproduced in its entirety. The Disposition states: "The trial court's order granting the motion to strike and awarding the City and the City Council their attorney's fees and costs is reversed. Upon remand, the trial court is directed to vacate both its order granting the motion and awarding attorney's fees and costs and its judgment of dismissal. Mandurrago shall recover his appellate costs."

Mandurrago et al. v. City of Carmel-By-The-Sea et al.
Case: H034439, 6th District

Disposition date (YYYY-MM-DD): 2010-06-15

Disposition description: Reversed & Remanded to trial court w/directions

Disposition status as of 2010-06-15: Final

Notes:
reversed with directions; ndm, fde, rjm

Unpublished opinion of the California Courts of Appeal
Filed 6/15/10 Mandurrago v. City of Caramel-by-The-Sea CA6

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT

JOHN MANDURRAGO et al.,
Plaintiffs and Appellants,

v.

CITY OF CARMEL-BY-THE-SEA et al.,
Defendants and Respondents.

H034439
(Monterey County Super. Ct. No. M97273)

In December 2008, defendant City Council of the City of Carmel-By-The-Sea (the City Council) overturned the Carmel Planning Commission's certification of the environmental impact report (EIR) for a project proposed by plaintiffs John Mandurrago and Pacific Grove Land Company, LLC (hereafter collectively Mandurrago). Mandurrago then filed a mandate petition and complaint against the City Council and the City of Carmel-By-The-Sea (the City) in which he contended that the City Council's December 2008 decision was invalid because it conflicted with a November 2006 City Council decision and with various state statutes. The City and the City Council filed a special motion to strike Mandurrago's causes of action under Code of Civil Procedure section 425.16. The trial court granted the special motion to strike and awarded attorney's fees to the City and the City Council. Mandurrago appeals and contends that the City and the City Council failed to establish that his action fell within the purview of Code of Civil Procedure section 425.16. We agree and reverse.

I. Factual Allegations

Mandurrago's petition and complaint made the following factual allegations. In September 2001, Mandurrago filed with the City an application for a development project. The proposed project entailed the demolition of the existing structures on the parcel, the construction of a building that would combine retail and underground parking, and the construction of a building containing seven market-rate residential units. By October 2005, a final EIR (FEIR) had been completed for the proposed development. The FEIR concluded that the existing bank building on the parcel is not historic. The City Council thereafter referred the proposed project to the City's Historic Resources Board (the HRB) to determine whether the demolition of the bank building would result in the loss of a historic resource, a loss of architectural diversity, or a violation of the City's local coastal plan. The HRB determined that the bank building is historic.

Mandurrago appealed the HRB's decision to the City Council. In November 2006, the City Council reversed the HRB's decision and made findings that the bank building did not “ 'make an unusually strong contribution to history, architecture, engineering or culture.' ” In December 2006, the Planning Commission ordered the FEIR revised to indicate that the demolition of the bank building would have a significant adverse impact on the physical environment and visual quality due to “ 'the loss of great architecture.' ” The FEIR was recirculated after its revision. In December 2006, Mandurrago revised the project application to state that two of the seven residential units would be affordable.

In August 2008, the Planning Commission certified the recirculated, revised FEIR, made findings that the impact of demolition of the bank building was unavoidable, and approved the proposed project. A citizen appealed the Planning Commission's decision to the City Council. In December 2008, the City Council sustained the appeal. The City Council concluded that its November 2006 decision was “exclusive to historicity” and did not address whether the demolition of the bank building would be a significant impact on the environment under the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.).

II. Procedural Background

In February 2009, Mandurrago filed a verified petition for mandate and administrative mandate combined with a complaint for damages and declaratory and injunctive relief against the City and the City Council. The petition/complaint alleged six causes of action.

The first three causes of action sought a writ of mandate requiring the City Council to “set aside and void” its December 2008 decision sustaining the citizen's appeal, to certify the unrevised FEIR, rather than the revised FEIR, and to approve the proposed project.

The first cause of action, which sought administrative mandate, alleged that the City had (a) “illegal[ly]” “sustain[ed] . . . the [citizen's] appeal” in violation of various state statutes, (b) violated CEQA “by failing to certify the EIR” within one year after its completion, and (c) deprived Mandurrago of due process by limiting the time that he was allowed at the hearing to respond to the citizen's appeal. The second cause of action, which sought traditional mandate, was based on the same allegations and asserted that the City had abused its discretion “by failing to deny [the citizen's] appeal . . . .” The third cause of action, which also seemed to seek traditional mandate, alleged that the City Council's December 2008 decision was “not supported by substantial evidence” because it did not include findings required by various statutes.

The fourth cause of action sought damages and injunctive relief for alleged violations of Mandurrago's civil rights. Mandurrago alleged that the City's failure to take “final action” on his development application was intended to “delay, harass, or deny the project as the City's method to retaliate against [plaintiffs] for [their] desire to demolition [sic]” the bank building. The fifth cause of action sought a declaratory judgment that the City's “sustaining of the [citizen's] appeal was not lawfully adopted” and did not “comply with CEQA, HAA [Housing Accountability Act (Gov. Code, § 65589.5)1], and the previous Carmel findings concerning the project.” The sixth cause of action sought an injunction requiring, among other things, that the City Council rescind its December 2008 decision.

The City and the City Council filed a verified “Response” to Mandurrago's petition “and related actions” and a demurrer to Mandurrago's petition/complaint.2 The City and the City Council subsequently filed a special motion to strike all or some of the causes of action in the petition/complaint. They also sought to recover their attorney's fees and costs.

Mandurrago filed opposition to the demurrer and opposition to the motion to strike. He asserted that the acts targeted in the petition/complaint did not fall within the scope of Code of Civil Procedure section 425.16. He contended that the motion to strike was frivolous, thereby entitling him to recover his attorney's fees. Mandurrago also contended that he had a probability of prevailing on his causes of action.

The trial court granted the motion to strike, awarded costs and attorney's fees to the City and the City Council, and entered a judgment of dismissal. The court “dropped” the demurrer because the granting of the motion to strike “makes the demurrer moot.” Mandurrago timely filed a notice of appeal from the court's order granting the motion to strike.

1 The Housing Accountability Act provides that a local agency “shall not disapprove a housing development project . . . for very low, low-, or moderate-income households, or an emergency shelter, or condition approval in a manner that renders the project infeasible for development for the use of very low, low-, or moderate-income households, or an emergency shelter, including through the use of design review standards, unless it makes [one of five specific] written findings, based upon substantial evidence in the record . . . .” (Gov. Code, § 65589.5, subd. (d).) Mandurrago did not allege that the City had “disapprove[d]” or conditionally approved its proposed project.

2 The City subsequently lodged the four-volume administrative record with the trial court.

III. Discussion

“A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States or California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” (Code Civ. Proc., § 425.16, subd. (b)(1), italics added.)

“ '[A]ct in furtherance of a person's right of petition or free speech under the United States or California Constitution in connection with a public issue' includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law; (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; (4) or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.” (Code Civ. Proc., § 425.16, subd. (e).)

“In short, the statutory phrase 'cause of action . . . arising from' means simply that the defendant's act underlying the plaintiff's cause of action must itself have been an act in furtherance of the right of petition or free speech. [Citations.] In the anti-SLAPP context, the critical point is whether the plaintiff's cause of action itself was based on an act in furtherance of the defendant's right of petition or free speech.” (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78.)

“The moving defendant's burden is to demonstrate that the act or acts of which the plaintiff complains were taken 'in furtherance of the [defendant]'s right of petition or free speech under the United States or California Constitution in connection with a public issue,' as defined in the statute. (§ 425.16, subd. (b)(1).) If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim.” (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) We independently review the trial court‟s finding that the City and the City Council satisfied their burden of showing that Mandurrago's causes of action arose from acts in furtherance of the City's or the City Council's right of petition or free speech. (Paiva v. Nichols (2008) 168 Cal.App.4th 1007, 1016.)

“In deciding whether the 'arising from' requirement is met, a court considers 'the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.' (§ 425.16, subd. (b).)” (City of Cotati v. Cashman, supra, 29 Cal.4th at p. 79.) “[I]t is the principal thrust or gravamen of the plaintiff's cause of action that determines whether the anti-SLAPP statute applies [citation], and when the allegations referring to arguably protected activity are only incidental to a cause of action based essentially on nonprotected activity, collateral allusions to protected activity should not subject the cause of action to the anti-SLAPP statute.” (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 188; Episcopal Church Cases (2009) 45 Cal.4th 467, 477.) “The anti-SLAPP statute‟s definitional focus is not the form of the plaintiff‟s cause of action but, rather, the defendant's activity that gives rise to his or her asserted liability—and whether that activity constitutes protected speech or petitioning.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 92.)

The issue before us is whether any or all of Mandurrago's causes of action arose from an act or acts by the City or the City Council that were in furtherance of the City's or the City Council's right of petition or free speech. “[T]he statutory remedy afforded by section 425.16 extends to statements and writings of governmental entities and public officials on matters of public interest and concern that would fall within the scope of the statute if such statements were made by a private individual or entity.” (Vargas v. City of Salinas (2009) 46 Cal.4th 1, 17, italics added.)

The City and the City Council rely primarily on the Second District Court of Appeal's decision in Mission Oaks Ranch, Ltd. v. County of Santa Barbara (1998) 65 Cal.App.4th 713 (Mission Oaks), disapproved on other grounds in Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1123, fn. 10.) Mission Oaks was a developer that submitted an application to the County for approval of a large subdivision project. (Mission Oaks, at p. 718.) The County contracted with consultants to prepare an EIR for the project. (Mission Oaks, at pp. 718-719.) The consultants prepared a draft EIR which found “a multitude of significant adverse and unmitigable impacts presented by the project proposal on numerous basic resources.” (Mission Oaks, at p. 719.) Mission Oaks challenged the consultants‟ findings, but the County decided to accept the consultants' findings and included those findings in the final EIR. (Mission Oaks, at p. 719.) The County then denied the project application. (Mission Oaks, at p. 719.)

Mission Oaks filed a complaint for damages against both the County and the consultants. The complaint alleged that the draft EIR was a “sham” that was unsupported by the facts and had been prepared as a part of a conspiracy between the consultants and the County to deny Mission Oaks the right to develop its property. (Mission Oaks, supra, 65 Cal.App.4th at p. 720.) Mission Oaks claimed that the County had “ 'falsely encouraged' ” it to proceed with the EIR process even though the County never intended to approve the project. (Mission Oaks, at p. 720.) Mission Oaks alleged three causes of action against the consultants' misrepresentation, breach of contract, and negligence. It alleged one cause of action against the County for breach of contract, in which it alleged that the EIR had not been prepared in compliance with CEQA and that the fees charged were unreasonable. (Mission Oaks, at pp. 720, 721.) The trial court sustained the County's demurrer and granted a special motion to strike brought by both the County and the consultants, but the court denied the County its attorney‟s fees. (Mission Oaks, at pp. 720, 729.)

Mission Oaks challenged the trial court's granting of the special motion to strike. It argued that the consultants' actions were not subject to a special motion to strike because those actions were done for pay. (Mission Oaks, supra, 65 Cal.App.4th at pp. 728-729.) The Second District held that commercial speech and conduct are subject to a special motion to strike when they concern a matter of public interest. (Mission Oaks, at pp. 728-729.) It found that Mission Oaks's causes of action were aimed at the consultants' speech—the statements in the draft EIR. (Mission Oaks, at p. 729.) Mission Oaks did not separately contend that the trial court had erred in granting the special motion to strike as to the County. The County challenged the trial court's refusal to award it attorney's fees as a prevailing party on the special motion to strike. (Mission Oaks, at p. 729.) The trial court's refusal had been based on its erroneous conclusion that a governmental entity was not a “ 'person' ” within the meaning of Code of Civil Procedure section 425.16. (Mission Oaks, at p. 729.) The Second District held otherwise: “Our Constitution protects everyone, even politicians.” (Mission Oaks, at p. 730.)

Mission Oaks stands for just two propositions: (1) statements in an EIR are protected speech; and (2) a governmental entity is a “ 'person' ” within the meaning of Code of Civil Procedure section 425.16. Thus, if any of Mandurrago's causes of action were based on statements in an EIR, Mission Oaks would support a conclusion that those causes of action fell within the scope of Code of Civil Procedure section 425.16. On the other hand, if any of his causes of action did not arise from statements in an EIR but instead from the City Council's decision upholding the citizen‟s appeal, Mission Oaks neither considered nor resolved whether those causes of action would fall within the scope of Code of Civil Procedure section 425.16. “Obviously, cases are not authority for propositions not considered therein.” (Roberts v. City of Palmdale (1993) 5 Cal.4th 363, 372.)

The First District Court of Appeal's opinion in San Ramon Valley Fire Protection Dist. v. Contra Costa County Employees’ Retirement Assn. (2004) 125 Cal.App.4th 343 (San Ramon) addressed the question of whether Code of Civil Procedure section 425.16 applies to a cause of action arising from a governmental entity's decision. In San Ramon, the Contra Costa County Employees' Retirement Association's Board (the Board) decided that the San Ramon Valley Fire Protection District (the District) was obligated to pay $2.3 million for increased benefits for the District's employees. (San Ramon, at pp. 346-348.) The District filed a mandamus petition and a complaint for declaratory relief challenging the Board's decision. (San Ramon, at pp. 348-349.) It sought orders reducing its obligation to $999,000. (San Ramon, at p. 349.) The Board filed a special motion to strike the District's complaint and petition. The trial court found that the District's causes of action did not arise out of acts in furtherance of the Board's right to petition or free speech and denied the motion. (San Ramon, at p. 352.)

The Board appealed and claimed that its decision to impose the $2.3 million obligation on the District was conduct in furtherance of its right to free speech. (San Ramon, supra, 125 Cal.App.4th at p. 353.) The First District rejected this contention. “Acts of governance mandated by law, without more, are not exercises of free speech or petition.” (San Ramon, at p. 354.) “As to the Board's substantive action in the present case, there is nothing about that decision, qua governmental action, that implicates the exercise of free speech or petition. The Board's resolution was simply to impose a requirement that the District pay a contribution to the CCCERA of nearly $2.3 million for proposed enhanced retirement benefits to District employees. Thus, while the District's petition arises out of the Board's adoption of the $2.3 million contribution rate, the substance of the Board‟s action does not constitute the exercise of the Board's right of speech or petition.” (San Ramon, at p. 355.)

“As noted, the Board was not sued based on the content of speech it has promulgated or supported, nor on its exercise of a right to petition. The action challenged consists of charging the District more for certain pension contributions than the District believes is appropriate. This is not governmental action which is speech-related. By contrast, if the action taken by the Board had been to authorize participation in a campaign to amend state pension laws, or to become actively involved in a voter initiative seeking such changes, then the Board's own exercise of free speech might be implicated. But this is not the case, and this distinguishing feature is dispositive of the Board's argument.” (San Ramon, supra, 125 Cal.App.4th at p. 357.) The First District found Mission Oaks to be “easily distinguishable” because the developer's causes of action there arose out of “speech” in the EIR. (San Ramon, at p. 357.)

The First District concluded that Code of Civil Procedure section 425.16 does not apply to acts of governance that are not themselves in furtherance of governmental speech. “To decide otherwise would significantly burden the petition rights of those seeking mandamus review for most types of governmental action. Many of the public entity decisions reviewable by mandamus or administrative mandamus are arrived at after discussion and a vote at a public meeting. [Citations.] If mandamus petitions challenging decisions reached in this manner were routinely subject to a special motion to strike—which would be the result if we adopted the Board's position in this case—the petitioners in every such case could be forced to make a prima facie showing of merit at the pleading stage. While that result might not go so far as to impliedly repeal the mandamus statutes, as the District contends, it would chill the resort to legitimate judicial oversight over potential abuses of legislative and administrative power, which is at the heart of those remedial statutes. It would also ironically impose an undue burden upon the very right of petition for those seeking mandamus review in a manner squarely contrary to the underlying legislative intent behind section 425.16.” (San Ramon, supra, 125 Cal.App.4th at pp. 357-358, fn. omitted.)

The First District's analysis in San Ramon was recently adopted by the Second District Court of Appeal in Graffiti Protection Coatings, Inc. v. City of Pico Rivera (2010) 181 Cal.App.4th 1207 (GPC). GPC had filed an action for mandate and declaratory relief challenging the City's decision to award a contract without competitive bidding. The trial court granted the City's special motion to strike, and GPC appealed. (GPC, at pp. 1213-1214.) The Second District concluded that the City‟s decision to award the contract without competitive bidding was not an act in furtherance of the City's right to petition or free speech and therefore a cause of action arising therefrom did not fall within the scope of Code of Civil Procedure section 425.16. (GPC, at pp. 1219-1220, 1224-1225.)

An examination of the petition/complaint reveals that Mandurrago's causes of action fall into two groups. Four of his causes of action plainly arose from the City Council's decision sustaining the citizen's appeal. All three of the mandamus causes of action alleged that this decision was unlawful. The first cause of action claimed that “Carmel's action sustaining [sic] of the appeal is illegal under CEQA, HAA, and related Government Code housing statutes . . . .” The second cause of action claimed that “Carmel's December 2, 2008 action sustaining [sic] of the appeal is contrary to State law, regulations, and decisions . . . .” The third cause of action alleged that “Carmel's December 2, 2008 findings and conclusion sustaining the appeal did not meet the requirements of Government Code §65589.5(d)(2) . . . .” All three mandamus causes of action sought a writ of mandate requiring the City to “vacate” its decision sustaining the appeal. The fifth cause of action, which sought declaratory relief, was also based on the sustaining of the appeal. It alleged that “Carmel's sustaining of the appeal was not lawfully adopted . . . .” However, the relief sought for this cause of action ventured far beyond the validity of the City's decision to sustain the appeal.

We encounter no difficulty in concluding that the three mandamus causes of action did not arise from an act in furtherance of the City Council's right of petition or free speech. As in San Ramon and GPC, the City Council's decision on the citizen's appeal was simply a mandated act of governance, and it did not in and of itself further the City Council’s right of petition or free speech. This decision was not speech-related and did not involve the City Council's right of petition. Nor did the declaratory relief cause of action arise from an act in furtherance of the City Council's right of petition or free speech. Though the prayer regarding this cause of action sought a very extensive declaration, the sole basis upon which the cause of action was based was the City Council's decision on the citizen's appeal. That act of the City Council was not in furtherance of the City Council's speech or petition rights. Hence, we conclude that the trial court erred in granting the motion to strike as to the three mandamus causes of action and the declaratory relief cause of action.

Mandurrago's civil rights cause of action is not as easy to categorize. This cause of action alleged as civil rights violations the City's (a) “seven year processing of the application,” (b) “imposi[ition of] new EIR requirements,” (c) “imposi[tion of] conditions,” and (d) “four year delay in certification of the EIR.” While some of these allegations may involve to some extent the City Council's acts in furtherance of its free speech rights, our task is to determine whether the gravamen of Mandurrago's civil rights cause of action arises from an act in furtherance of the City's right of petition or free speech.

We do not doubt that the certification of an EIR is a speech-related decision by a governmental entity because the EIR is the means by which the governmental entity expresses itself. But the failure to timely certify an EIR does not itself further the governmental entity's right of free speech. If anything, the failure to timely certify an EIR may impede the governmental entity's right of free speech as it delays the governmental entity's expression of its views on the environmental impact of a proposed project. We cannot see how the City's imposition of EIR requirements and conditions on Mandurrago's project is an act in furtherance of the City's right of free speech. The City and the City Council fail to explain how their imposition of such requirements furthers their right of free speech. We conclude that the trial court erred in finding that Mandurrago's civil rights cause of action fell within the scope of Code of Civil Procedure section 425.16.

The only remaining cause of action is Mandurrago's “Injunctive Relief” cause of action. This cause of action merely realleged all of the previous allegations as a basis for injunctive relief. Since none of the other causes of action fell within the scope of Code of Civil Procedure section 425.16, the trial court erred in finding that this cause of action, which had no independent basis, fell within the scope of Code of Civil Procedure section 425.16.

IV. Disposition

The trial court's order granting the motion to strike and awarding the City and the City Council their attorney's fees and costs is reversed. Upon remand, the trial court is directed to vacate both its order granting the motion and awarding attorney's fees and costs and its judgment of dismissal. Mandurrago shall recover his appellate costs.

_______________________________
Mihara, J.


WE CONCUR:

_____________________________
Elia, Acting P. J.

_____________________________
McAdams, J.