Jan 212014

turbineThe Heron Bay Homeowners Association is set to win the lawsuit they filed against the City of San Leandro, concerning the City’s decision to give a height variance to Halus Power Systems to build a wind turbine tower on their property, for research and testing purposes.  The HOA objected to the turbine for aesthetic reasons, but grounded their legal pleadings on assorted – though very weak – environmental concerns.  Still, the judge overseeing the case issued a tentative ruling (TR) granting the HOA’s petition that Halus obtain an environmental impact report  (EIR) on the project.  The EIR would cost Halus hundreds of thousands of dollars and may very well prompt the small wind turbine company to move out of San Leandro.

The City is challenging the tentative ruling and a hearing has been scheduled for February 11.  Judge Evelio Grillo, somewhat unusually, did not post the actual contents of the TR online and, instead, only e-mailed it to the lawyers.  It’s thus impossible to actually comment on his reading of the case.  However, it’s rare for a judge to change his position once a TR is filed.  Best known as the judge in the Jahi McMath case, Grillo has a reputation for being smart and “by the book.”  Still, the City’s attorney – in particular, Meyer Nave‘s Edward Grutzmacher, who seemed to be the principal litigator in this case – didn’t precisely  ingratiate himself to Grillo by getting involved in petty legal shenanigans early in the procedures.   Now, Halus and San Leandro taxpayers may be paying for their lack of professionalism.

When plaintiffs sue a city under the California Environmental Quality Act (CEQA), they need a copy of the administrative record detailing all the  proceedings on the matter before the different City bodies. This has to be assembled and certified by the City and the plaintiff must pay for it. The City estimated that it would cost between $4800 and $6200, which the plaintiff’s lawyer accepted. The City started compiling the record, but did so at a slow pace.  There are  e-mails after e-mails from the plaintiff’s lawyer asking for updates on the status and cost estimates of the compilation.  Replies by Grutzmacher were less than responsive.   Finally, Grutzmacher said the record was ready but the HOA’s attorney could only have it  after delivering a $24K+ check.  He contended that it had taken 187 paralegal hours to compile the record, each charged at $125/hour.   He would not, however, give an actual accounting of how they came up to that amount and instead held the record hostage – though at one point, he gave the HOA’s attorney a one-time, take-it-or-leave-it opportunity to get the record for about $20K.    Finally, the HOA’s attorney had to ask the Court to force the City to give them the record.  The Court ruled that they could have it upon payment of $6200.

While I am the Heron Bay’s HOA number one critic – I thinks this lawsuit is an abuse of process, based purely on prejudice and animus by the HOA’s leadership -, the behavior of the lawyer representing the City was just as contemptible.  The impression I got after reading the e-mail exchange between Mr. Grutzmacher and the HOA’s lawyer, was very much that Mr. Grutzmacher was playing a game: first denying the HOA’s lawyer the information he needed, then holding the record hostage by demanding an absurd amount of money, and then, when the HOA’s lawyer asked for an explanation of the charges, by falsely claiming that the HOA lawyer wanted to get the whole thing for free.  Mr. Grutzmacher’s behavior on e-mails and pleas was not only childish, but offensive. We can speculate how the judge reacted to Grutzmacher’s attempt at gamesmanship.

We will not know Judge Grillo’s reasons for ruling for the HOA until the hearing – unless one of the parties decides to release the brief or some enterprising journalist goes to the trouble of obtaining it -, but we do know that it’s likely that these legal shenanigans will cost the taxpayers plenty.  If the HOA wins, the City will not only be stuck with having to pay its own attorney costs, but also the $25K Grutzmacher alleges it cost to assemble the administrative record.  It will also have to pay for the court costs and the HOA’s attorney’s fees, which are much greater than they would be if he didn’t have to spend countless hours fighting Grutzmacher over the administrative record. Once again, Meyers Nave profits from getting the City into a legal mess and the taxpayers are left to pay for it.

This was a case that the City should have won easily.   But Meyers Nave has shown that it either lacks the competence or the will to actually offer sound legal representation for the City.   Indeed, the tens of thousands of dollars their botched representation will cost this City in this case pales in comparison to the almost $3 million the City lost on the Faith Fellowship case, the $4 million+ it lost on the former Albertsons’ property case and the almost $8 million it lost on the King Family Trust lawsuit.   While these were all lawsuits that the City should not have had to face to begin with – and wouldn’t, if they had gotten competent advise from the let go -, Meyers Nave poor representation definitely did not help along the way.

I said it almost three years ago: “It’s time to fire Meyers Nave” and it’s even more true today.   San Leandro’s taxpayer money should go to pay for fixing our streets, housing our homeless and providing after-school activities for our children.  It should not go to pay for expensive lawyers who give the City bad legal advice, and then benefit when the City gets sued.


Apr 072013

turbineHOA Misses Deadline for CEQA Lawsuit on Halus Wind Turbine

For the last half a year or so, the Heron Bay Homeowners Association has been threatening to sue the City of San Leandro if it approved the variance requested by Halus Power Systems to install a single wind turbine on an 80-foot tower on its property. Halus is on the business of refurbishing wind turbines and wants to be able to do on-site research and testing.  The Zoning Code requires that a property owner get a variance to erect any structure over 60 ft of height.

Heron Bay is a planned community resting on the site of a former ammunition factory across the creek from the industrial area where Halus is located.  It counts among its neighbors a PG&E substation, a salvage yard, a sewer water treatment facility and various industrial buildings.  When built, the turbine will share the skyline with massive electrical transmission towers, cell phone towers and cranes.

The HOA’s objections to the turbine have ran the gamut from then-HOA President and now Council Member Benny Lee‘s argument that it would acerbate his wife’s migraines to the fact that it will cast a shadow over some Heron Bay homes after 8:30 AM on December 21st of every year. Their main complaint, however, has been that the turbine is “ugly”.

The California Environmental Quality Act (CEQA) requires cities to evaluate the potential substantial environmental effects of any project they are asked to approve.   The main concern on this case was the potential danger the turbine might cause to the birds that inhabit or visit the nearby wetlands.  Halus commissioned a study on this very subject from a premier environmental consulting firm with a lot of experience working on the San Leandro shore.  It concluded that the turbine would pose only a minimal risk to birds (about one bird death every six years or so).  The California Department of Fish and Wildlife suggested how to further minimize the dangers but otherwise had no objections to the project.  The City carefully evaluated this and other potential environmental effects, and found there was no substantive evidence to suggest that any such effect would be substantial.  It prepared a mitigated negative declaration to this effect.  On February 7th, the Board of Zoning Adjustments approved the variance and on February 8th the City filed a Notice of Determination (NOD) with the County Clerk approving the project.

The Heron Bay HOA appealed the BZA decision to the City Council.  On April 1st, the Council voted 5-1 in favor of the variance.  The HOA, however, continues  threatening a lawsuit, apparently not realizing that their chance had passed.  Under CEQA (PRC §21167 (b)), any litigation “alleging that a public agency has improperly determined whether a project may have a significant effect on the environment”  must commence within 30 days from the date the NOD is filed.  That is to say, if the HOA wanted to challenge the City’s finding that there was no need for an Environmental Impact Report on this case, it had to file its lawsuit by March 10th.  It did not, so it would seem that the HOA is out of luck.

It’s not surprising that the HOA missed that particular deadline.  Throughout this process they were represented by an attorney that specializes in HOA law and not in CEQA law.  That’s like asking your podiatrist for advice on heart problems.  And this is a somewhat tricky legal matter.  Normally, decisions by the BZA must be appealed to the City Council before they are ripe for litigation.   And that’s true in this case of the BZA’s decision to grant Halus a height variance. The Heron Bay HOA can potentially challenge the variance decision in court, as long as it finds grounds to do it other than CEQA.  It seems unlikely that they will, and they certainly will not be able to do it without first spending considerable amounts of money to document any actual harm they have incurred.

This is probably a blessing in disguise for the Heron Bay HOA, however.  A relatively new law (PRC §21169.11) allows courts to impose sanctions of up to $10,000 for frivolous claims on the parties or attorneys that make them.  Given the claims advanced so far by the HOA, a lawsuit could quickly empty their bank account – and their lawyer’s.


Assistant City Attorney Jayne Williams responded to an inquiry from the San Leandro Patch on this matter with the following statement:

The Heron Bay HOA’s appeal to the City Council specifically challenged adoption of the Mitigated Negative Declaration (MND) and was timely filed. As a result, the first 30 day Statute of Limitation from the BZA actions stopped running. Following the April 1st City Council public hearing, the City filed the CEQA “Notice of Determination” for the appeal on Tuesday afternoon- April 2nd . Therefore, a new 30-day Statute of Limitations began to run for challenging the MND from the April 2nd date.

CEQA, however, does not have any provisions to stop the clock on the status of limitations.  Indeed, Courts have repeatedly ruled that it starts running from the moment the project is initially approved.  And the California Supreme Court has been stated very clearly that filing a NOD triggers a 30-day statute of limitation for any litigation to be filed, even if there are problems with the NOD.  So far the Court has not carved any exceptions.

The Fifth District Court of Appeals, however, did recently find that when a Notice of Exemption (NOE) to CEQA is improperly filed prior to the project actually being approved, that notice is invalid and the statute of limitations does not start running.  William’s argument might fit within this analysis, given that NOEs are quite similar to NODs.  At the very least, it seems that if the Heron Bay HOA appeals, the City will not assert the statute of limitations as a defense.

Halus, however, may still chose to do so.  After all, the Fifth District’s decision is not binding on the First District (ours) and there is concern among CEQA practitioners that it does not jive with the Supreme Court decision referred to above.  Moreover, it is not at all clear that the City’s argument that the BZA’s approval of the project was not final, and that therefore the February NOD was improper, has merit.  Without a specific ordinance codifying the CEQA appeals process, the nature of the City Council’s review is an open question.

However, given the City’s position, it may not behoove Halus to assert the status of limitations, as the law is murky enough on this matter that if Halus wins, the HOA could appeal turning this into an expensive legal battle.   It would seem that responding to the suit on the merits could be a better strategy.   After all, the “evidence” of environmental effects submitted by the HOA was so poor that it should not be difficult for Halus’ and the City’s attorneys to argue that both the HOA and its attorney should be sanctioned for making frivolous claims.   CEQA provides for an objective test of what constitutes a frivolous claim and does not require bad faith, so the question the Court will entertain is whether a reasonable attorney – not the attorney actually representing the HOA – would believe the claim is totally without legal merit.   If they press on their claim that a couple of hours of wind turbine shadows one day a year constitute a substantial environmental effect, I’m pretty sure the Court will not be amused at the waste of its valuable time.

Sep 062012

Candidate Prevaricates on his Stand on Touchy Subject

Benny Lee has long been a vocal opponent of Medical Marijuana dispensaries.  He believes that allowing any use of marijuana by adults sends the message that it’s OK for kids to  smoke pot.  He thinks people who smoke marijuana are dangerous and “unsavory”.

I think he’s been pretty clear about those positions, both on his writing for the Patch, and on the comments he made to the San Leandro City Council in favor of a ban on medical marijuana dispensaries, in the last couple of months.  Benny, however, is now seeking the Democratic endorsement on his run for San Leandro City Council.  So suddenly, he’s found the light and claims that he is not opposed to medical marijuana.  Right.

Rather than argue this point ad infinitum, I thought the best thing to do is hear what he had to say himself

Benny Lee’s Comments to the San Leandro Patch on Medical Marijuana Facilities – March 9, 2011

Benny Lee on Banning Medical Marijuana Facilities – June 18, 2012 (Audio)

Benny Lee’s Comments on the Proposed Ban on Medical Marijuana Facilities – July16, 2012 (Audio)

September 13 Update

Lee is playing the same flip-flopping card on another issue.  Last week, he told the San Leandro Times that “he doesn’t want to share his personal opinion on the [Halus] turbine.” Halus, a green-energy company that refurbishes wind turbines, wants to install one on their industrial zone property so potential clients can see their work.  Today, the San Leandro Times published two letters disputing that statement.  Former City Council member Howard Kerr makes reference to the letters Lee has sent to City Hall opposing the turbine and accuses him of trying to hide his anti-business activities.  Heron Bay neighbor Elie Parker, meanwhile, accuses Lee of lacking “integrity” and “strength” for agreeing to “lead the fight against the project” at a homeowners meeting, and now refusing to share his opinion.