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Michaelis v. City of Los Angeles

California Court of Appeals, Second District, Fourth Division
Nov 30, 2007
No. B196619 (Cal. Ct. App. Nov. 30, 2007)

Opinion


MICHAELIS, MONTANARI & JOHNSON, et al., Plaintiffs and Respondents, v. CITY OF LOS ANGELES, DEPARTMENT OF AIRPORTS, et al., Defendants and Appellants. B196619 California Court of Appeal, Second District, Fourth Division November 30, 2007

NOT TO BE PUBLISHED

APPEAL from an order of the Superior Court of Los Angeles County Super. Ct. No. BC357243, Richard L. Fruin, Jr., Judge.

Rockard J. Delgadillo, City Attorney, Claudia McGee Henry, Senior Assistant City Attorney, and Gerald M. Sato, Deputy City Attorney, for Defendants and Appellants.

Michaelis, Montanari & Johnson and Garry L. Montanari for Plaintiffs and Respondents.

WILLHITE, J.

INTRODUCTION

Plaintiffs Thermco Aviation and A-26 Company operate an aviation business at Hangar 3 of the Jet Center Complex at Van Nuys Airport. They are represented by the law firm of Michaelis, Montanari & Johnson, also a plaintiff in this case. Plaintiffs sued defendants the City of Los Angeles, the Department of Airports, Los Angeles World Airports, and the Board of Airport Commissioners (sometimes referred to collectively as “the City”), seeking to enjoin the City from proceeding with a request for proposals regarding redevelopment of the Jet Center. The City seeks to demolish the Jet Center (including Hangar 3 where Thermco and A-26 operate their business) and redevelop the site for aviation purposes. The City brought a special motion to strike plaintiffs’ complaint under Code of Civil Procedure section 425.16, commonly known as the anti-SLAPP statute. The trial court denied the motion, and the City appeals.

We conclude that plaintiffs’ complaint arises out of protected speech activity (the issuance of the written request for proposals) within the contemplation of the anti-SLAPP statute (Code Civ. Proc., § 425.16, subds. (e)(2) & (4)). We further conclude that plaintiffs have failed to state legally sufficient claims as to all but the claim of Michaelis, Montanari & Johnson to declaratory relief regarding its requests for documents under the California Public Records Act. We therefore reverse the order denying the City’s special motion to strike and direct the trial court to enter a new order granting the special motion to strike all but Michaelis, Montanari & Johnson’s claim for declaratory relief.

As we explain later in our opinion, plaintiffs’ complaint contains one labeled count seeking declaratory relief. However, the count actually alleges two separate controversies. In one, Thermco and A-26 seek a declaration stopping the redevelopment and permitting Thermco and A-26 to continue to operate their business. In the other, Michaelis, Montanari & Johnson seeks a declaration that it is entitled to certain documents under the California Public Records Act. It is this latter claim alone by Michaelis, Montanari & Johnson that survives.

Factual and procedural background

The Parties and Airport Facilities at Issue

The City of Los Angeles owns and operates the Van Nuys Airport (VNY), through the Department of Airports, known also as Los Angeles World Airports (LAWA). LAWA is governed by appointed members of the Board of Airport Commissioners (the Board). (Los Angeles City Charter (LACC), §§ 23.1, 600(b).)

VNY is ranked as the world’s busiest general aviation airport with approximately 448,681 total operations in 2004. It does not receive local tax dollars toward its operation, but is financed entirely by revenues from lease, rental and user fees. LAWA leases space to a variety of tenants who provide aviation and non-aviation related services. In so doing, the airport generates $73 million in state and local taxes annually.

Aviation facilities located at 16200 Daily Drive are known as the Jet Center complex, a seven acre site containing three hangars, two office buildings, and a fuel farm. Hangar 3 of the Jet Center Complex was built in 1987, and has 28,940 square feet of hangar and office space. Plaintiff Thermco (or its predecessor in interest) has occupied Hangar 3 since it was built. Another entity, Western Commander Associates, was granted a master lease for Hangar 3 in 2003, and Thermco is now a subtenant of that entity. Hangar 3 has been owned by the City since 2002. Plaintiffs Thermco and A-26 own, refurbish, and operate two Douglas A-26 propeller aircraft stored at Hangar 3. As we have already noted, Thermco and A-26 Company are represented by the law firm of Michaelis, Montanari & Johnson (MM&J).

The 2003 Request For Proposals

In 2003, the City issued a request for proposals (RFP) regarding development of the Jet Center complex. Eight proposals were submitted in response to the RFP. Thermco participated in one proposal which involved improving the existing structures. The average annual rent offered under this proposal was in excess of $1 million. Thermco also offered, in early September 2003, to rent its current hangar directly from LAWA at or above the existing rental rate. Thermco offered to lease Hangar 3 and its land for a 30-year term with rental income to exceed $5 million, reduced to net present value, and to make improvements as necessary. LAWA did not respond to these offers.

LAWA eventually recommended acceptance of a proposal submitted by another bidder, Castle & Cooke Aviation Services, Inc. The Board, however, rejected that recommendation.

The First Public Records Act Request, and the Decision by the Supreme Court

After the deadline for submitting proposals to the 2003 RFP had passed, MM&J issued a request pursuant to the California Public Records Act (Gov. Code, § 6250 et seq.) by which it sought to obtain copies of all proposals submitted in response to the 2003 RFP. LAWA denied access to the records, stating that the information would be made available after a contract award was published, which usually would take place three days after the Board hearing.

In May 2004, MM&J filed a petition for access to public records and peremptory writ of mandate (Los Angeles Superior Court Case No. BC090033). The petition was denied on September 27, 2004. Division Five of the Second Appellate District Court of Appeal reversed that decision in a published opinion (Michaelis, Montanari & Johnson v. Superior Court (Mar. 29, 2005, B178884)). LAWA filed a petition for review in the Supreme Court, which was granted, and in an opinion issued on June 22, 2006, the Supreme Court reversed the appellate court decision and remanded the matter for further proceedings. (Michaelis, Montanari & Johnson v. Superior Court (2006) 38 Cal.4th 1065.) Specifically, the Supreme Court held that the proposals were exempt from disclosure until the City had completed its negotiations. The public interest in ensuring that the City followed its guidelines in awarding the contract did not outweigh the public interest in optimizing the City’s ability to negotiate the most favorable terms possible. Disclosing all of the competing proposals before a contract was awarded would weaken the City’s bargaining position. (Id. at pp. 1071-1075.)

Withdrawal of the 2003 RFP

At a regularly-scheduled public meeting on January 23, 2006, the Board considered a written report and recommendation from the executive director urging adoption of a resolution that would authorize the executive director “to conduct a solicitation and negotiation for demolition of existing facilities and development of new aviation facilities at 16200 Daily Drive [the Jet Center].” The report recommended authorizing the executive director to reject all existing proposals received in response to the 2003 RFP, and to redevelop the site consistent with the Van Nuys Master Plan. According to the recommendation, the prior proposals ranged “from reuse to complete redevelopment,” thus “indicating a demand for redevelopment that was not clearly evident when the request for proposals was issued.” The Board adopted the resolution, and, accordingly, LAWA withdrew the 2003 RFP and issued a second RFP.

The Van Nuys Master Plan was approved by the Los Angeles City Council in September 2005.

The 2006 Request for Proposals

On February 1, 2006, the office of the executive director published a “Request for Proposals for the Demolition of the Hangar Complex Located at 16200 Daily Drive and Development of a New Aviation Facility at Van Nuys Airport.” According to the RFP, “LAWA, aware of the demand for a hangar complex at Van Nuys Airport (‘VNY’) has elected to solicit Proposals from potential Lessees through a Request for Proposals (‘RFP’) process. The purpose of this RFP is to select a Lessee to purchase and demolish existing structures, and to then design, construct and operate a high quality aviation-related business that will serve the local community. The site is located in the northeast quadrant of Van Nuys Airport and the successful Proposer will execute a Ground Lease for redevelopment of the facility upon which the successful Proposer or Lessee will operate an aviation/aeronautical related business.”

The RFP specified that five weighted criteria would be used to select the successful proposer: financial return to LAWA (30%), the proposer’s experience and qualifications (25%), the proposed development plan (25%), benefit to the VNY aviation community (10%), and benefit to the community (10%). A six-step process would be used to select the new lessees: (1) submittal of proposals; (2) evaluation of proposals; (3) interviews with proposers; (4) negotiation with one or more proposers determined to be offering the Highest and Best Use Proposal in keeping with the RFP criteria, with the terms finalized for recommendation to the Board; (5) approval by the City Council of Board action approving the new lease; and (6) execution of the new lease by LAWA.

The RFP required the proposer to purchase the existing structures at the fair market value of $3,500,000, and demolish the structures and redevelop the site for aviation purposes. The minimum land rent would be $34,000 per acre per year, for a 30-year term, and the minimum rent for the structures would be $39,000 per month. Once the structures were purchased for $3,500,000, no further hangar rent would be paid.

The 2006 RFP set forth procedures for protests: “The purpose of protest procedures is to provide a method, prior to Lease award, for resolving protests regarding the award of Lease by LAWA, by and through its [Board] and City Council. These procedures are for the benefit of the City and are not intended to impose an administrative requirement that must be exhausted by the protesting Proposer before pursuing any legal remedy that may be available. For this reason, no Proposer shall have any right to due process should the City fail to follow these procedures for any reason within its sole discretion. However, a failure by a Proposer to follow the protest procedures discussed below will create the presumption that any subsequent legal action in a court of competent jurisdiction is of no merit. These procedures will enable [the Board] to ascertain all of the facts necessary to make an informed decision regarding the award of Lease.”

Plaintiffs’ Protest to the 2006 RFP

On February 16, 2006, MM&J submitted to LAWA a protest to the 2006 RFP, listing eight grounds. The protest was required to be filed within 14 days of the issuance of the RFP. Proposals were due May 1, 2006. The City responded by providing “addendum 1” to the RFP regarding the selection criteria to be used.

MM&J has not been allowed to present its protest at a public session of the Board, although several public meetings of the Board have been held.

The Second Public Records Act Request

On March 13, 2006, MM&J submitted a second request under the Public Records Act to LAWA, seeking the VNY strategic business plan and related documents. On April 27, 2006, LAWA responded that the documentation was being assembled but additional time was needed. MM&J sent another letter to LAWA on June 29, 2006, pointing out that there had been no response to the request.

LAWA provided a limited response to the second Public Records Act request on July 13, 2006. Plaintiffs contend that several documents should have been, but were not, included in the response. In addition, plaintiffs contend that six paragraphs were redacted from various drafts of the Strategic Business Plan for the Van Nuys Airport.

These documents are: (1) a May 2, 2006 memorandum; (2) a document entitled “16200 Daily Drive Van Nuys Airport”; (3) ISO 9001 2000 paper; (4) Jet Center Notes; (5) a document entitled “VNY Future”; (6) e-mails dated June 1, 2006; and (7) minutes of the meetings of the VNY Citizens Advisory Council.

The Present Action

On August 18, 2006, plaintiffs filed a complaint alleging four labeled causes of action. In the first cause of action, plaintiffs sought both a temporary and a permanent injunction to prohibit the City from proceeding with the 2006 RFP, and from “developing, advertising, negotiating, awarding or otherwise proceeding with the New RFP.” The request for injunction was based on LAWA’s failure to give MM&J the opportunity to present its protest, and LAWA’s alleged hindering of the protest by failing to comply with both of the Public Records Act requests.

Although labeled a single count, the second cause of action for declaratory relief alleges two separate controversies involving different plaintiffs. The first alleged controversy involves MM&J’s alleged entitlement to disclosure of documents in response to its Public Records Act requests. The second controversy involves Thermco and A-26’s alleged right to lease Hangar 3 and conduct business there.

Plaintiffs concede that after their complaint was filed, LAWA provided a response to the first Public Records Act request.

The third cause of action, brought by Thermco and A-26 as taxpayers, alleges that the sale of Hangar 3 constitutes a waste of public property under Code of Civil Procedure section 526a. The fourth cause of action alleges violation of the Los Angeles Administrative Code and the law of eminent domain (Code Civ. Proc., §§ 1230.010-1273.050) based on LAWA’s purporting to sell public property and mandate its subsequent demolition.

That statute 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. This section does not affect any right of action in favor of a county, city, town, or city and county, or any public officer; provided, that no injunction shall be granted restraining the offering for sale, sale, or issuance of any municipal bonds for public improvements or public utilities.”

The Anti-SLAPP Motion

On October 13, 2006, the City filed an anti-SLAPP motion pursuant to Code of Civil Procedure section 425.16. The City argued that plaintiffs’ action should be characterized as arising from the issuance of the RFP, and thus as arising from a “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.” (See § 425.16, subd. (e)(2); Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106.)

All undesignated section references are to the Code of Civil Procedure.

Alternatively the City argued that its issuance of the RFP involved “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.” (See § 425.16, subd. (e)(4); Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219 (Tuchscher).)

Plaintiffs opposed the special motion to strike, contending that the lawsuit involved land use and due process issues, not the City’s constitutional rights of petition or free speech. In addition, plaintiffs argued that “even if the issuance of the RFP was the basis of [their] complaint, it does not qualify as protected free speech under the anti-SLAPP statute. While the leasing and potential development of the publicly owned Jet Center property is admittedly an issue of public interest, the mere issuance of the RFP, does not constitute a written statement made in connection with an issue under consideration by a legislative, executive, or judicial body, or any other official proceeding authorized by law.” Plaintiffs further argued that their bid protest was not part of an official proceeding, nor was the issuance of the 2006 RFP. “The gross mishandling of public property by requiring a successful proposer to purchase and demolish perfectly good hangars at VNY airport, while disregarding administrative laws and denying due process, is not speech.”

The Trial Court’s Denial of the Motion

The trial court denied the motion, concluding that the issuance of an RFP by a governmental entity does not constitute an “act in furtherance of a person’s right of petition or free speech,” as further defined in section 425.16, subdivision (e), as having been 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.” Instead, “the issuance of the RFP was but the first step in obtaining a proposal that would be presented for review by the board. . . . It is a public agency’s first step in obtaining a contract that may be submitted to its board to initiate a public discussion. Until that proposal is obtained and submitted to the board the RFP is not ‘under consideration or review by an executive body.’” The court distinguished the present circumstances from those in Tuchscher, supra, 106 Cal.App.4th 1219, in which “the public entities, after several public hearings about the merits of a contemplated public improvement, entered into an exclusive negotiating agreement with the favored developer. The developer then filed suit against the public entities and third parties because the City officials allegedly interfered with the developer’s contract rights by communicating privately with the third parties about the project. The difference is that in Tuchscher the development proposal was already a matter of public discussion and debate, thus protecting the City’s communications with alternate developers from challenge in the courts under the anti-SLAPP statute. In the present case, there is not yet a proposal that is subject to public discussion.”

The court also noted that a special motion to strike must be brought against an entire cause of action, not just part of a cause of action. The court found that the City had challenged only the allegedly wrongful issuance of the second RFP, and had ignored the other grounds for the complaint, namely the failure to allow MM&J to present a protest at a public session of the Board, and the failure of LAWA to comply with the Public Records Act requests. These allegations were incorporated into each of the four causes of action. “Thus, the motion is procedurally defective because it would not dispose of an entire cause of action.”

This appeal followed.

DISCUSSION

The anti-SLAPP statute allows a court to promptly dismiss unmeritorious actions or claims that are brought to chill another’s valid exercise of his or her constitutional rights of freedom of speech and petition for the redress of grievances. (§ 425.16, subd. (a); see Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 102 (Mann).) The statute requires a two-step analysis. “First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one ‘arising from’ protected activity. (§ 425.16, subd. (b)(1).) If the court finds such a showing has been made, it then must consider whether the plaintiff has demonstrated a probability of prevailing on the claim.” (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 76.) As stated in the language of the anti-SLAPP statute, “[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.” (§ 425.16, subd. (b)(1).) The Legislature has mandated that the provisions of section 425.16 be broadly construed (§ 425.16, subd. (a); Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 735), and we review the trial court’s ruling on the special motion to strike de novo (Kyle v. Carmon (1999) 71 Cal.App.4th 901, 907).

I. Protected Activity

Under subdivision (e) of section 425.16, an “act in furtherance of a person’s right of petition or free speech” includes, as contested here: “(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; . . . (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.” (§ 425.16, subd. (e).)

We note that “[g]overnmental entities and their representatives, as well as private citizens, are persons under C.C.P. [section] 425.16(b). ‘The exchange of ideas would be unduly curtailed if a governmental entity and its representatives could not freely express themselves on matters of public interest.’ (Bradbury v. Superior Court (1996) 49 [Cal.App.4th] 1108, 1118 [district attorney whose public report questioned veracity of search warrant affidavit, and alleged that sheriff’s search of ranch for marijuana resulting in death of ranch owner was motivated by desire to seize ranch as drug forfeiture was entitled to dismiss sheriff’s suit]; Mission Oaks Ranch, Ltd. v. Santa Barbara (1998) 65 [Cal.App.4th] 713, 728 [disapproved on other grounds in Briggs v. Eden Council for Hope & Opportunity, supra, 19 Cal.4th at p. 1123, fn. 10] [statute protected county in performance of its statutory role in consideration of environmental impact report and refusal to approve development proposal; following Bradbury].)” (5 Witkin, Cal. Procedure (4th ed. 2007 Supp.) Pleading, § 962, p. 72.)

The trial court’s denial of the special motion to strike was based in part on its conclusion that “the issuance of the [2006] RFP was but the first step in obtaining a proposal that would be presented for review by the board. . . . Until that proposal is obtained and submitted to the board the RFP is not ‘under consideration or review by an executive body.’” We disagree.

As we have noted, section 425.16 is to be construed broadly. (§ 425.16, subd. (a).) “[A] matter under consideration is one kept ‘before the mind,’ given ‘attentive thought, reflection, meditation.’ [Citation.] A matter under review is one subject to ‘an inspection, examination.’ [Citation.]” (Braun v. Chronicle Publishing Co. (1997) 52 Cal.App.4th 1036, 1049.) In the instant case, development of the Jet Center complex has been a subject under consideration (that is, given “attentive thought” and “reflection”) by the Board and the individuals through which it acts since 2003, when the first RFP was formulated and issued, and eight proposals were received in response. It is also a subject under review, that is, one given “inspection” and “examination” by the Board. At a public meeting in January 2006, the Board approved a recommendation authorizing the executive director to reject the existing proposals received in response to the 2003 RFP, and to instead issue a new RFP by which the City would solicit proposals for demolition of the existing facilities and development of new facilities at the Jet Center. Hence, the 2006 RFP is, in the words of the anti-SLAPP statute, a “writing made in connection with an issue under consideration or review by [an] . . . executive . . . body.” (§ 425.16, subd. (e)(2).) Indeed it is one of the more significant writings involved in the Board’s process of considering the issue of redeveloping the Jet Center – the 2006 RFP outlined the City’s plans for use of the site, and solicited proposals from prospective lessees. Its contents and its promulgation were the direct result of consideration and review undertaken by the Board and by City employees acting on behalf of the Board and the executive director. Thus, we conclude that the 2006 RFP was an “act in furtherance of a person’s right of petition or free speech,” within the contemplated protection of the anti-SLAPP statute.

Because we conclude that the 2006 RFP qualifies as protected activity under section 425.16, subdivision (e)(2), we need not discuss the parties’ arguments concerning whether it also qualifies under subdivision (e)(4) as “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.”

II. Plaintiffs’ Claims Arose Out of Protected Activity

Having concluded the 2006 RFP constituted protected activity, we now “address whether defendants met their threshold burden of showing the challenged causes of action ‘arose’ from activity protected under the statute. (Equilon [Enterprises v. Consumer Cause, Inc. (2002)] 29 Cal.4th [53] 67.) ‘In the anti-SLAPP context, the critical consideration is whether the cause of action is based on the defendant’s protected free speech or petitioning activity. [Citations.]’ (Navellier [v. Sletten (2002)] 29 Cal.4th [82] at p. 89.) In determining whether the initial ‘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)(2).)” (Wang v. Wal-Mart Real Estate Business Trust (2007) 153 Cal.App.4th 790, 801 (Wang).)

Plaintiffs’ causes of action are based on conduct that falls into four categories: (1) the allegedly wrongful issuance of the 2006 RFP; (2) the Board’s failure to allow MM&J to present a protest at a public session; (3) the failure of LAWA to comply with MM&J’s Public Records Act requests; and (4) the City’s alleged disregard for provisions of the state constitution and various ordinances.

We have concluded that the issuance of the 2006 RFP constituted protected activity. However, the City does not contend that the remaining grounds underlying plaintiffs’ claims are similarly protected. Thus, we analyze plaintiff’s claims as so-called “mixed” causes of action, that is, causes of action based on both protected and unprotected activity. (Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton (2005) 133 Cal.App.4th 658, 672 (Peregrine).)

“The apparently unanimous conclusion of published appellate cases is that ‘where a cause of action alleges both protected and unprotected activity, the cause of action will be subject to section 425.16 unless the protected conduct is “merely incidental” to the unprotected conduct.’ (Mann v. Quality Old Time Service, Inc., supra, 120 Cal.App.4th at p. 103 [additional citations omitted].) As one court explained, ‘if the allegations of protected activity are only incidental to a cause of action based essentially on nonprotected activity, the mere mention of the protected activity does not subject the cause of action to an anti-SLAPP motion. [Citation.]’ (Scott v. Metabolife Internat., Inc. [(2004)] 115 Cal.App.4th [404] at p. 414.) But if the allegations concerning protected activity are more than ‘merely incidental’ or ‘collateral,’ the cause of action is subject to a motion to strike. [Citations.]” (Peregrine, supra, at p. 672.)

“Some of the same cases that apply the ‘merely incidental’ test to determine whether section 425.16 applies also assert ‘it is the principal thrust or gravamen of the plaintiff’s cause of action that determines whether the anti-SLAPP statute applies.’ (Scott v. Metabolife Internat., Inc., supra, 115 Cal.App.4th at p. 414; Martinez v. Metabolife Internat., Inc. [(2003)] 113 Cal.App.4th [181] at p. 188.)” (Peregrine, supra, at pp. 672-673.) However, as the Supreme Court has explained, “‘[t]he 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[, supra,] 29 Cal.4th 82, 92.) Because conduct that is alleged to be a breach of duty . . . may also fall within the class of constitutionally protected speech or petitioning activity, a court considering a special motion to strike must examine the allegedly wrongful conduct itself, without particular heed to the form of action within which it has been framed. (Id. at pp. 92-93 [additional citation omitted].)” (Peregrine, supra, at p. 671, second italics added.)

Plaintiffs contend that their claims do not actually arise from issuance of the 2006 RFP. They argue: “The present action arose from the [City’s] acts and intended acts, not its writings, and certainly not protected activities. To wit, [plaintiffs] challenged the act of mandating destruction of a new hangar, the act of failing to comply with Charter and Administrative Code Provisions, the ignoring of [plaintiffs’] protest, and the ignoring of [plaintiffs’] right to public documents. While the issuance of the [2006] RFP may have triggered some of [plaintiffs’] claims, the issuance itself is certainly not the gravamen.” Plaintiffs contend they seek no relief from the City for its communicative act, but rather, from the illegalities and waste that will result if certain actions are carried out, including the demolition of Hangar 3. They continue: “The RFP, invites proposals which are then subject to confidential negotiations. The RFP is not, in itself, the waste of Hangar 3, the ignoring of [plaintiffs’] protest, or the illegality of the manner in which public property is sold and demolished. The RFP is merely an invitation (purchased for $30) which triggers some of [plaintiffs’] claims, and evidences certain aspects of those claims.”

Plaintiffs mischaracterize the issuance of the 2006 RFP as a mere trigger to their claims, rather than the actual wrongful conduct giving rise to the present action. As plaintiffs state, they are “challeng[ing] the act of mandating destruction of a new hangar, the act of failing to comply with Charter and Administrative Code Provisions, the ignoring of [plaintiffs’] protest, and the ignoring of [plaintiffs’] right to public documents.” It is the issuance of the 2006 RFP—and the content thereof—that fosters the act of mandating destruction of the hangar. It is the terms and specifications contained within the 2006 RFP that, if adhered to, will accomplish the purported failure to comply with certain provisions. It is the refusal to cease the process initiated by issuance of the 2006 RFP and advanced by its continued existence, in the face of plaintiffs’ protest and request for public records, of which plaintiffs complain. Indeed, it is in large part by means of this writing that the City acts.

In the first cause of action seeking an injunction, plaintiffs sought to prohibit the City from moving forward with its “wrongful conduct of proceeding with the New RFP,” which conduct would “result in demolition of the hangar and termination of the sublease,” the damage of which plaintiffs complain. (Italics added.) In the second cause of action for declaratory relief, plaintiffs sought a declaration that the City must produce all of the documents requested, but also sought a determination that the City is not entitled to proceed with the 2006 RFP. In fact, production of the documents is corollary to stopping the City from proceeding with the 2006 RFP; plaintiffs want the documents in order to aid their efforts to halt the RFP.

The third cause of action asserts that the City’s plan for the Jet Center, as expressed in the 2006 RFP, demonstrates an intention to commit waste. Plaintiffs seek to enjoin the City from engaging in waste, i.e., by halting the City from proceeding with the 2006 RFP. Similarly, the fourth cause of action alleges that adherence to the City’s plan, as expressed in the 2006 RFP, would violate various provisions of the Administrative Code and the law of eminent domain. As to both the third and fourth causes of action, the 2006 RFP not only evidences the purported wrongdoing but, if allowed to proceed, plays a major role in effectuating the City’s plan.

Plaintiffs rely in part on Gallimore v. State Farm Fire & Casualty Ins. Co. (2002) 102 Cal.App.4th 1388, 1399 (Gallimore), but that case is inapposite. There, the plaintiff alleged that the defendant insurance company had engaged in claims handling misconduct and violated statutory and regulatory rules, and that defendant’s communications to the Department of Insurance constituted evidence of defendant’s wrongdoing. However, plaintiff did not allege that these communications were wrongful in themselves nor the cause of plaintiff’s injury. The appellate court held that section 425.16 does not apply when the defendant’s protected communicative acts merely constitute evidence supporting plaintiff’s claim, rather than amounting to the alleged wrongful acts themselves. (Ibid. See discussion of Gallimore in Peregrine, supra, 133 Cal.App.4th at p. 673.) Unlike Gallimore, here the protected activity – issuance of the 2006 RFP and the refusal to halt its progress – is the specific conduct complained of, from which all the other allegations of wrongdoing emanate and around which they revolve.

The instant case, therefore, is analogous to Peregrine, supra, 133 Cal.App.4th 658, where the plaintiffs claimed they were injured by defendants’ protected speech, i.e., specific communications that defendant attorneys made in an action before the Securities and Exchange Commission opposing temporary restraining orders and opposing the appointment of a receiver. Plaintiffs also claimed they were injured by conduct not in the nature of speech or petitioning activity, i.e., defendants’ failure to disclose potential conflicts of interest and obtain informed consent to joint representation, as well as failure to turn over client documents after wrongfully abandoning the client. (Peregrine, supra, at pp. 671, 673.) Under those circumstances, in which the allegations of wrongdoing were a mixture of protected and unprotected conduct, but the protected conduct was not merely incidental to the unprotected conduct, the court held: “[w]here, as here, a cause of action alleges the plaintiff was damaged by specific acts of the defendant that constitute protected activity under the statute, it defeats the letter and spirit of section 425.16 to hold it inapplicable because the liability element of the plaintiff’s claim may be proven without reference to the protected activity.” (Id. at p. 674.) Though the overarching thrust of plaintiffs’ claims was that defendants’ conduct helped advance an illegal Ponzi scheme, to the plaintiffs’ detriment, some of the specific conduct complained of involved classic petitioning activity, and therefore the matter was susceptible to a special motion to strike under the anti-SLAPP statute.

As in Peregrine, here the issuance of and refusal to halt the 2006 RFP is not merely evidence to support plaintiffs’ claims. It is the conduct underlying all other allegations of plaintiffs’ causes of action.

Plaintiffs argue that this matter simply relates to business dealings involving the unprotected activity of bidding on public contracts, or is more analogous to a sheriff’s auction of property, citing cases which arose out of land use and development proposals and public bidding practices, rather than the right of petition or free speech. However, we find those cases to be distinguishable.

In Kajima Engineering & Construction, Inc. v. City of Los Angeles (2002) 95 Cal.App.4th 921, plaintiff, a construction company, sued the City of Los Angeles for payments allegedly owed to it for a reconstruction project. The City cross-complained for breach of contract, breach of the covenant of good faith and fair dealing, fraud, and numerous other causes of action. Plaintiff moved to strike the cross-complaint as a SLAPP suit, contending the cross-complaint arose from, and was in retaliation for, plaintiff’s exercise of its constitutional right to petition the court for redress by filing the initial complaint. (Id. at pp. 924-925.) The trial court eventually denied the motion, and the appellate court affirmed the ruling, holding that the cross-complaint alleged causes of action arising from plaintiff’s bidding and contracting practices (such as intentionally underbidding the project, submitting fraudulent payment requests, and violating contractual requirements regarding minority- and women-owned businesses), not from acts in furtherance of its right of petition or free speech. (Id. at pp. 929-932.)

In Blackburn v. Brady (2004) 116 Cal.App.4th 670, Blackburn was the purchaser of real property at a sheriff’s auction. Blackburn sued Brady, another bidder and the owner of a one-half interest in the subject property. Blackburn sought partition of the property and an accounting, and also alleged that Brady fraudulently drove up the price of the one-half interest that Blackburn acquired. Brady filed a special motion to strike, contending Blackburn’s claims arose from Brady’s exercise of his rights of petition and free speech and were ancillary to judicial proceedings between Blackburn and the original owner of the one-half interest in the subject property, and because the sheriff’s auction was an official proceeding in which Brady exercised his right to bid on the subject property. Blackburn argued his claim of fraud was not based upon statements made in an official proceeding, but rather merely involved a bid in a foreclosure sale, more analogous to a business transaction. (Id. at p. 674.) The trial court denied the SLAPP motion, and the appellate court affirmed, holding that the alleged fraud committed by Brady in bidding at the sheriff’s action was “a purely business type event or transaction and [was] not the type of protected activity contemplated under section 425.16, subdivision (e).” (Id. at p. 677.)

The case before us bears little resemblance to either Kajima or Blackburn, which arose out of nonprotected activities. As previously stated, the redevelopment of the Jet Center is a matter of public interest, and issuance of the 2006 RFP occurred in connection with an issue under consideration or review by an executive body, within the context of official proceedings.

Finally, we briefly address plaintiffs’ assertion that “[i]f appellants prevail, a member of the public could never enforce a protest procedure set out in any government document dealing with a matter of public interest. A member of the public could never challenge a [Public Records Act] request thus rendering Government Code section 6258 superfluous. It is [plaintiffs] who are being chilled in their efforts to prosecute a valid petition for the redress of grievances. [Plaintiffs] are exercising a right of [protest] authorized by the second RFP, a right to public documents authorized by the Government Code and a right of a taxpayer to prevent waste.”

Plaintiffs vastly overstate their case. Generally, an action brought to enforce a Public Records Act request seeks to compel production of public records, not to put a stop to a process initiated and conducted in part via public records, and therefore would not automatically invoke the anti-SLAPP statute. It is when a party seeks to enjoin the conduct of government business because of a purported failure to comply with a related Public Records Act request that the anti-SLAPP statute may be invoked. In addition, even when an action which seeks to challenge a government’s failure to follow its protest procedures or to prevent waste of public resources invokes the anti-SLAPP statute, a party may still maintain such an action by meeting the minimal requirement of showing a probability of prevailing on the merits.

Because we conclude plaintiffs’ claims are based in significant part on the City’s protected activity, the burden shifts to plaintiffs under section 425.16 to make a prima facie showing their claims have merit. We next address whether plaintiffs have met that burden as to each cause of action.

The trial court did not reach the second step of the anti-SLAPP analysis, whether respondents had established a probability of prevailing on the merits of their claims. As the issues involved are matters of law, subject to de novo review, we proceed to consider them. (See e.g., Mann, supra, 120 Cal.App.4th 90.)

III. Likelihood of Prevailing on the Merits

In determining whether a claim “lacks even minimal merit” (Navellier v. Sletten, supra, 29 Cal.4th at p. 89), “the appropriate inquiry is whether the plaintiff has stated and substantiated a legally sufficient claim. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 411-412.) [¶] In deciding this question the court again considers the pleadings and evidentiary submissions of both the plaintiff and the defendant (§ 425.16, subd. (b)(2)); however, it may not weigh the credibility or comparative probative strength of competing evidence. (Wilson [v. Parker, Covert & Chidester (2002)]28 Cal.4th [811] at p. 821.) Rather, the court considers whether the plaintiff has made a prima facie showing of facts based on competent admissible evidence that would, if proved, support a judgment in the plaintiff’s favor. (Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th 628, 646, disapproved on other grounds in Equilon, supra, 29 Cal.4th at pp. 58-59.)” (Mann, supra, 120 Cal.App.4th at p. 105.)

As described by plaintiffs, the present action “essentially seeks to enjoin the second RFP for failure to allow MM&J to prosecute a timely-filed protest, failure of LAWA to provide documents under [the Public Records Act], waste of public property and failure of LAWA to follow city ordinances and administrative code sections involving the sale and demolition of public property.” (Italics added.)

The City contends that MM&J has not identified any legal right which is implicated by the publication and dissemination of the 2006 RFP, and likewise, the two plaintiff corporations -- Thermco and A-26 Company -- have failed to identify any legal right that will be lost unless the City is enjoined from proceeding with the 2006 RFP. Simply put, they do not have a right to compel the City to refrain from taking steps which will lead to the demolition of Hangar 3.

We agree with the City’s contention that plaintiffs have failed to state and substantiate a legally sufficient claim entitling them to enjoin the City from proceeding with the 2006 RFP. However, we must evaluate each cause of action individually to determine whether plaintiffs have shown a probability of prevailing on any part of any of their claims.

A. First Cause of Action -- Injunctive Relief as to the 2006 RFP

We recognize that “‘[i]njunctive relief is a remedy and not, in itself, a cause of action . . . .’ (Shell Oil Co. v. Richter (1942) 52 Cal.App.2d 164, 168.) [¶] Nevertheless, the phrase ‘cause of action’ is also ‘commonly used in pleading as applying only to the relief sought, even though the separately pleaded claims have origin in the same right or obligation.’ (Ideal Hardware etc. Co. v. Dept. of Emp. (1952) 114 Cal.App.2d 443, 448; accord, Slater v. Blackwood (1975) 15 Cal.3d 791, 796.)” (McDowell v. Watson (1997) 59 Cal.App.4th 1155, 1159-1160.) That is the case here, in that the first and second causes of action are both based on the City’s alleged failure to comply with CPRA requirements. The first cause of action also purports to be based on the City’s alleged failure to comply with its protest procedures.

In their first cause of action, plaintiffs seek an injunction enjoining the City from proceeding with the 2006 RFP. On appeal, they contend that the exhibits to the complaint, and the declarations of Garry Montanari and Howard Keck establish a prima facie case for such injunctive relief. They point out that Thermco and A-26 have been in possession of Hangar 3 since 1987, and have been operating their business there pursuant to the sublease agreement. The 2006 RFP calls for demolition of the hangar and termination of the sublease, which will necessarily interfere with plaintiffs’ business operations. Plaintiffs contend that the City’s conduct in proceeding with the 2006 RFP will cause great and irreparable injury, and that they have no adequate remedy at law because the 2006 RFP will likely result in a lease award recommendation before MM&J receives a complete response to its second Public Records Act request for the strategic business plan documentation and presents its protest to the 2006 RFP.

No doubt that the City’s proceeding with the 2006 RFP will interfere with Thermco and A-26’s business operations and possibly result in irreparable injury. However, plaintiffs have not demonstrated any legal right on their part that would justify granting the requested injunction. Plaintiffs are merely holdover subtenants under the master tenant’s month-to-month lease with the City, and as such they do not attempt to argue that they have any contractual right to continue to occupy the premises. Plaintiffs have not offered any legal support for their contention that the appropriate remedy for the City’s purported failures—to provide the documents requested by plaintiffs under the Public Records Act, to hear plaintiffs’ protest to the 2006 RFP in the manner demanded by plaintiffs, or to follow provisions of the state constitution and various ordinances—is an injunction against the City proceeding with the 2006 RFP. We therefore direct the trial court on remand to strike the plaintiffs’ first cause of action.

B. Fourth Cause of Action for Injunctive Relief as to the Sale and Demolition of Public Property

In their fourth cause of action, plaintiffs seek an injunction enjoining the City from selling and demolishing Hangar 3. Plaintiffs contend that the 2006 RFP violates various provisions of the Los Angeles Administrative Code (LAAC) and Grant Assurances to the Federal Aviation Administration (FAA). Those provisions relate to the Board’s authority to sell airport property; requirements for obtaining approval of the FAA prior to selling airport property; notice, reporting, and public auction/bidding requirements for sale of public property no longer required for use by the City; and procedures for sale or demolition of improvements on public property deemed not suitable for sale or salvage. Plaintiffs contend that the City has failed to demonstrate that it has complied with the requirements set forth in these provisions.

Plaintiffs do not discuss on appeal the allegation made in their complaint that the 2006 RFP violates the law of eminent domain, as set forth in Code of Civil Procedure sections 1230.010 through 1273.050, and we therefore deem that argument as having been forfeited on appeal.

We conclude that plaintiffs have not stated and substantiated a legally sufficient claim as to violation of any of these provisions, primarily because these claims are entirely premature. The time for compliance with requirements regarding the sale of public property has not yet arrived, and will not arrive unless and until the City proceeds with the 2006 RFP, selects a successful proposer and negotiates a contract, and the City Council approves. Furthermore, plaintiffs have not demonstrated that anything in the 2006 RFP directly or necessarily conflicts with any of the cited provisions of law. Accordingly, on remand the trial court is directed to strike the fourth cause of action.

C. Third Cause of Action for Waste

Plaintiffs’ third cause of action alleges sale of Hangar 3 under the 2006 RFP would constitute waste. Plaintiffs rely on the declaration of Howard Keck to substantiate the legal sufficiency of their cause of action. They contend the declaration establishes that Hangar 3 is the newest hangar at VNY, having been built in 1987. Thermco has offered to rent Hangar 3 directly from LAWA, and to make improvements, but received no response to those offers. The second RFP would result in income to LAWA of $2.5 million over a 30-year lease, while Thermco’s offer was valued in excess of $5 million. Plaintiffs’ proposal to the 2003 RFP involved a monetary package in excess of $40 million over 30 years. The 2006 RFP requires the purchase of the existing structures for over $3 million, and then their demolition. Plaintiffs contend that it would cost $2.5 million to replace the existing hangar.

As the City points out, plaintiffs argue in essence “that demolition of existing structures would inevitably provide a financially inferior return to the City than if existing structures were preserved.” However, the evidence presented by plaintiffs is insufficient to demonstrate that the 2006 RFP would provide a financially inferior return to the City. Plaintiffs’ assertion of waste is purely speculative. The 2006 RFP established minimum acceptable rental rates, and noted that proposers could offer, as a component of the consideration for the lease, to pay other types of fees to LAWA, including fees paid as a percentage of the gross income from one or more of the proposer’s intended commercial activities. Thus, the amount of the City’s return remains to be determined, and it cannot be said that any lease award made pursuant to the 2006 RFP will necessarily constitute waste of City property. We therefore direct the trial court on remand to strike plaintiffs’ third cause of action for waste.

D. Second Cause of Action for Declaratory Relief

As labeled, the second cause of action for declaratory relief appears as a single count. However, it alleges two actual controversies involving different plaintiffs. Hence, for analysis it actually contains two separate causes of action for declaratory relief. (See § 1060 [declaratory relief available “in cases of actual controversy relating to the legal rights and duties of the respective parties” (italics added); see also Winter v. Gnaizda (1979) 90 Cal.App.3d 750, 755-756 [declaratory relief not available to nonparty in particular controversy].)

One alleged controversy relates to Thermco and A-26’s rights under Thermco’s sublease. The complaint alleges that Thermco and A-26 “contend they are entitled to continue to lease Hangar 3 . . . and continue to conduct their business” there. Thermco seeks to “ascertain its rights and duties with respect to its leased premises,” and also alleges that its “business will be irreparably harmed should the [2006] RFP proceed and defendants effectuate the termination of Thermco’s lease.” It prays for “a declaratory judgment that defendants . . . cannot proceed with the sale and demolition of the property under the [2006] RFP.”

As to this controversy, the City contends that the 2006 RFP is protected activity, and that plaintiffs’ cannot show a probability of success because they have identified no legal right that would entitle them to an injunction to stop proceeding with the 2006 RFP. As we have explained, we agree. Therefore, Thermco and A-26 cannot show a probability of success in obtaining a declaratory judgment in their favor on this controversy.

The second controversy involves MM&J’s rights regarding LAWA’s alleged failure to comply with the Public Records Act. The complaint alleges “that MM&J contends it is entitled to obtain disclosure of documents” in response to its Public Records Act requests. The complaint further alleges that the City has not produced required documents, and that “MM&J also seeks a declaration under Government Code § 6258” that LAWA must produce all documents requested related to the VNY strategic business plan.

Plaintiffs concede that after their complaint was filed, LAWA provided a response to the first Public Records Act request. It is only their second request that remains at issue. LAWA’s response on July 13, 2006 to the second request provided the draft plan but withheld other documents, as to which the City claimed certain exemptions.

As to this alleged controversy, the City fails to present any argument on appeal. Plaintiffs contend that LAWA has continued to withhold documents responsive to MM&J’s Public Records Act request relating to VNY’s strategic business plan. The City does not respond. Instead, the City simply concedes that MM&J’s “rights under [the Public Records Act] can be resolved independently of [plaintiffs’] collective equitable action for injunction against the RFP,” but without citation of authority asserts that the entire case is still subject to being stricken under the anti-SLAPP statute. We disagree. There is a separate alleged controversy regarding MM&J’s right to documents under the Public Records Act. The City mounts no appellate argument concerning the merits of that controversy, and therefore we deem the issue forfeited on appeal.

DISPOSITION

The order denying the City’s special motion to strike is reversed. On remand, the trial court is directed to enter a new order granting the special motion to strike as to all causes of action except the cause, appearing under the heading “Second Cause of Action for Declaratory Relief,” which alleges an actual present controversy between LAWA and MM&J regarding MM&J’s right to documents under the Public Records Act. The City is awarded costs on appeal.

We concur: EPSTEIN, P. J. SUZUKAWA, J.


Summaries of

Michaelis v. City of Los Angeles

California Court of Appeals, Second District, Fourth Division
Nov 30, 2007
No. B196619 (Cal. Ct. App. Nov. 30, 2007)
Case details for

Michaelis v. City of Los Angeles

Case Details

Full title:MICHAELIS, MONTANARI & JOHNSON, et al., Plaintiffs and Respondents, v…

Court:California Court of Appeals, Second District, Fourth Division

Date published: Nov 30, 2007

Citations

No. B196619 (Cal. Ct. App. Nov. 30, 2007)