A California appeals court has ruled that a significant argument would-be waterfront developer CenterCal Properties used in a lawsuit against Redondo Beach violates a state law meant to protect free speech.
Whether the lawsuit will move forward, however, remains uncertain.
CenterCal’s lawsuit is an attempt to collect damages from Redondo Beach and is one of several other legal disputes stemming from the the City Council’s 2017 decision to cancel a lease agreement with the company, as well as a voter-approved initiative limiting waterfront development. Redondo Beach City Attorney Mike Webb called the appeals court ruling this week a significant victory for the city, which can’t resume plans to redevelop the aging waterfront until it resolves the various disputes.
“It shows that we are correct that much of their claim is based on protected First Amendment speech,” Webb said. “Win, lose or draw, this is the most important of the waterfront-related appeals. I didn’t think the others had much merit going forward.”
CenterCal lawyer Betty Shumener, for her part, said she was confident their case was still strong despite losing on the question of political speech.
“We are pleased that this delay is over,” Shumener said, “and we look forward to proceeding to trial.”
CenterCal filed the lawsuit seeking $15 million in damages from the city in November 2017 after plans to develop the waterfront effectively fell through.
The developer’s lawsuit argued that some council members who voted to cancel the lease agreement in 2017 — and to certify Measure C, a ballot initiative meant to limit development at the waterfront — had conflicts of interest because they had made their opinions known on the issue before casting their votes.
Redondo Beach, though, filed a motion to dismiss the case, arguing that the lawsuit’s premise essentially made it a SLAPP complaint. SLAPP stands for “strategic lawsuit against public participation” and such legal maneuvers are typically used to silence critics by burdening them with heavy legal costs. California has laws prohibiting such suits.
Superior Court Judge Teresa Beaudet, however, denied the city’s anti-SLAPP motion.
But the appeals court on Wednesday, April 27, reversed that decision, saying the council members still have a right to free speech and that anti-SLAPP laws extend to government entities.
If CenterCal’s argument had been upheld, Webb said, it “would impact the voters’ ability to control their government.”
Under the developer’s argument, Webb said, a person who disagreed with the government, ran for elected office — requiring that candidate to publicly voice his or her opinions — and won could end up with a conflict of interest on a later vote without having any monetary gain.
“That’s an important ruling,” Webb said, “and we are thrilled, to say the least.”
The appeals court, though, still instructed the lower court to decide a second factor: Whether CenterCal’s remaining arguments — including those that arose from the premise the appeals court rejected — have sufficient merit to allow the lawsuit to continue.
Shumener said the suit could still proceed, because it is based on nine arguments, only two of which the city has defeated so far.
A series of other lawsuits — one refuting certification of Measure C and another against individual council members that CenterCal brought on behalf of two residents — have yet to bear fruit. In the individual lawsuit, a judge last year ordered CenterCal to pay $900,000 in legal fees, which the company has appealed. The ballot measure case remains ongoing. But, Webb said, if CenterCal’s lawsuit for damages fails, it would negate the Measure C complaint as well.