Regarding this post from Scott Lewis, in the interest of balance, we wanted to talk about some important cases that we’ve won or procured favorable settlements for the city. Those cases added up to more than $320 million in damages, fees, cost recovery or savings for the city in the past two years.
That number does not include the city’s biggest legal win in recent memory, the retiree health case of 2011 that directly resulted in the 15-year memorandum of understanding on retiree health that is estimated to save the city about $700 million. I’ve called the retiree health case the biggest lawsuit win in city history because it cemented the fact that retiree health benefits are not vested and, thus, could be changed.
Unfortunately this kind of news is not reported out very often, but 2012 was actually a very successful year for this office. The Civil Prosecution Unit recovered more than $40 million for the city. Also, the unit successfully defeated more than $8.5 million in claims against the city arising out of construction cases.
Our Workers’ Compensation Unit had about 1,500 open, active cases which resulted in cost savings of more than $6.2 million for the city.
Here are some cases showing some favorable outcomes (there are more) over the past year or two from the other civil litigation units:
1. Rural/Metro settlement: In September 2012, the city of San announced a legal settlement with its emergency medical services provider, Rural/Metro, in which the company agreed to pay $1.4 million to the city to resolve allegations of fiscal impropriety. In addition, Rural/Metro paid the city $5.5 million to dissolve the public-private entity it had formed with the city more than a decade earlier. The settlement was the result of an innovative legal strategy employed by the city attorney’s office that garnered nearly $7 million for the city while sparing taxpayers the expense of lengthy litigation that had no certainty of success.
2. Purchase of service credits case: In August 2012, Judge Ronald S. Prager tossed a lawsuit against the city of San Diego filed on behalf of employees who purchased pension service credits in 2003 for below cost in violation of local laws. Prager’s ruling dismissed all claims against the city.
3. Presidential leave case: An appellate court in May 2012 has upheld a lower court’s ruling that pension benefits granted improperly by former city officials can and should be reversed. The 4th District Court of Appeal affirmed a Superior Court ruling that the city could lawfully repeal a portion of former firefighters union head Ronald Saathoff’s pension because it had been granted in violation of the City Charter.
4. City of San Diego v. San Diego Employees’ Retirement System: In this case, SDCERS sold more than 5,000 years of retirement service credits to thousands of city employees. The Charter and Municipal Code required SDCERs to charge and collect from the employees an amount equal to both the employer and employee cost of those credits. SDCERS knowingly charged the employees less than the full cost. SDCERS then sought to charge the city the underfunding created by the sale of these thousands of years of service credits. The city prevailed at trial and on appeal. As a direct result, the city saved approximately $65 million.
5. San Diego Employees’ Retirement System v. City of San Diego: In this case, SDCERS sued the city for the annual contributions to the pension plan that they alleged should have been contributed but were not because of Manager’s Proposal I and Manager’s Proposal II. SDCERS sought approximately $165 million. The city prevailed.
6. Other pension benefits case: The 4th District Court of Appeal has upheld a ruling that the city is not required to pay roughly $18 million in retirement benefits wrongfully awarded to employees hired from 2005 to 2007.
The following were part of our 2012 year-end report or 2011 report:
7. City of San Diego v. Sweetwater Authority: The city sued to prevent the expansion of a desalination project because the project would violate city’s water rights. The city sued complaining that Sweetwater did not adequately analyze and mitigate these significant impacts on the city’s water rights. The court issued a final ruling in the city’s favor. The city obtained $12,000 in costs.
8. Citizens Against Flower Hill’s Excessive Expansion v. City of San Diego: The plaintiff challenged permits and approvals for the expansion of the Flower Hill shopping mall. The city prevailed on all causes of action. The matter has been assigned to the Special Prosecution Unit for cost recovery.
9. City of San Diego v. Board of Trustees of California State University: The city of San Diego brought an administrative mandamus action challenging the decision of the Board of Trustees of the California State University to certify and adopt the Final Environmental Impact Report relating to the approval of the San Diego State University 2007 Campus Master Plan Revision without providing for payment of mitigation measures addressing significant traffic impacts on the surrounding community. San Diego State University took the position that it did not need to fund the approximately $20 million dollars in traffic impacts caused by the campus expansion. The 4th District Court of Appeal found in favor of the city. This case is currently under review in the California Supreme Court.
10. CREED-21 v. City of San Diego (Cross-Border Facility): This case concerns the city’s approval of a private project entitled “Otay-Tijuana Cross Border Facility Development Project.” The cross border facility involves the development of a private facility that will facilitate international border crossings. The case was settled without any damages to city or retraction of any project approvals or permits.
11. Authorized Towing Company (Act) v. City of San Diego: The city was sued in three lawsuits related to its contracts with towing vendors. In December 2012, the city settled two of these lawsuits and received payment in excess of $4.4 million.
12. Ronald Coburn v. City of San Diego: The plaintiff brought a suit for dangerous condition as a result a sport motorcycle versus a truck accident occurring on Feb. 22, 2009. The plaintiff claimed the intersection was dangerous because of the placement of the stop limit line, alteration to a red curb and the lack of an all-way stop. The plaintiff, who has been medically retired from the military, claimed damages of $2.5 million in medical expenses and lost wages. The plaintiff also argued for another $3.5 million in pain and suffering. A two-week trial commenced resulting in a full defense verdict.
13. Leticia Diaz and Nestor Espinosa vs. City of San Diego: The plaintiffs were injured while lying under a large eucalyptus tree in Balboa Park when a very large tree limb fell on top of them. Espinosa was hospitalized overnight with a significant head injury, which affected his ability to concentrate while attending University of California, Berkeley. The city filed a motion for summary judgment, claiming the city did not have actual or constructive notice of the dangerous condition. The judge agreed and summarily adjudicated the action in favor of the city.
14. Fox, et al. v. City of San Diego, et al.: The petitioners challenge the constitutionality of the recently passed Senate Bill 863 by the state Legislature and the involvement by the city of San Diego, City Council, Redevelopment Agency and Centre City Development Corp. The court granted the city’s demurrer. The matter is currently pending before the 4th District Court of Appeal.
15. In re Wireless litigation:This federal matter involves seven consolidated actions challenging the city’s application of its telecommunication regulations. This case effects city’s ability to regulate the use and aesthetics of telecommunication structures in its communities. The city was successful on motion for summary judgment in the trial court. The matter is pending before the 9th U.S. Circuit Court of Appeals.
16. Coalition for Safe and Healthy Economic Progress v. City of San Diego: The petitioner challenged the city’s issuance of demolition and building permits for construction of supermarket in downtown area. The city prevailed on all issues.
17. Related California Urban Housing LLC et al v. City of San Diego: The plaintiffs filed an action for breach of contract action against the city, the Redevelopment Agency and other named defendants, claiming the parties breached an exclusive negotiating agreement. The plaintiffs claim the breach caused more than $3.8 million dollars in damages. The case was settled with no damages awarded against the city.
18. San Diego Gas & Electric cases: Several eminent domain lawsuits brought by San Diego Gas & Electric to facilitate the Sunrise Powerlink Transmission project. The project involves the construction of an about 120-mile electric superhighway between an existing substation in Imperial Valley and SDG&E’s Sycamore Canyon Substation located in central San Diego County. SDGE filed the lawsuits to obtain the easements needed for the construction and placement of the Powerlink and related structures. The city was able to successfully negotiate settlements providing funds for taking of property.
19. Zouras v. City of San Diego: The petitioner challenged the administrative order for illegal grading and dumping. The court granted the city’s motion to dismiss.
20. 5020 Wightman LLC v. City of San Diego: The property owner filed inverse condemnation action seeking money for damage allegedly caused by the city’s failure to maintain a drainage easement. The case was dismissed with city paying no money.
Jan Goldsmith is the San Diego city attorney.
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