California-American Water Co. v. Marina Coast Water District, 2 Cal. App. 5th 748

Marina Coast Water District and Monterey County Water Resources Agency collaborated with California-American to pursue a regional desalination project under five interrelated agreements.
A Monterey board member’s potential conflict of interest (Collins) arose; he had a paid consulting role with RMC and later recused from related votes.
Monterey later argued the RDP agreements were void under Government Code section 1090 due to Collins’s conflict; California-American contested, seeking declaration of validity and rights to terminate.
Initial summary judgment proceedings assumed all five agreements were within the validation statutes; the court later held some were not subject to those limitations in certain respects.
At trial, the court found Collins had a cognizable financial interest in four agreements and voided Reimbursement, Settlement, Project Management, and Water Purchase Agreements.
The CPUC had previously approved three agreements; later CPUC decisions and Public Utilities Code provisions were argued to bar judicial review, but the court rejected those bar arguments.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Do validation statutes time limits apply to public agencies?	Marina argues 60-day validation period governs all challenges.	Monterey/California-American contend public agencies are exempt from 60-day limits.	Public agencies are exempt; 60-day period does not bar Monterey.
Is Monterey's Government Code §1090 claim timely under the four-year statute?	Monterey's action relates back to Marina's cross-complaint, timely within four years.	Marina contends accrual earlier but is defeated by relation back and accrual rules.	Monterey's §1090 claim timely; relation back to Marina's 2012 cross-complaint defeats timeliness challenge.
Did Collins’s financial interest render the contracts void under §1090?	Collins had a cognizable financial interest in several agreements because of compensation and ongoing involvement.	Marina argues no cognizable interest under the statute for four agreements.	Collins had a cognizable financial interest; four agreements were voided for §1090 violations.
Do CPUC decisions or Public Utilities Code bar judicial review of the RDP agreements?	Marina argues CPUC decisions preclude further challenges.	Courts may address validity notwithstanding CPUC determinations and later decisions.	Not barred; CPUC decisions did not foreclose judicial determination of validity under §1090.

Lexin v. Superior Court, 47 Cal.4th 1050 (Cal. 2010) (broad scope of 'financially interested' beyond strict nexus)
City of Ontario v. Superior Court, 2 Cal.3d 335 (Cal. 1970) (validation statutes and public agency remedies)
McLeod v. Vista Unified School Dist., 158 Cal.App.4th 1156 (Cal. App. 4th 2008) (validation actions commonly test agency indebtedness validity)
Kaatz v. City of Seaside, 143 Cal.App.4th 13 (Cal. App. 2006) (section 30066/53511 validation concepts in contracts/assessments)
Millbrae School Dist. v. Superior Court, 209 Cal.App.3d 1494 (Cal. App. 1989) (public agencies retain remedies under §869; no new right outsiders')
San Bernardino County v. Superior Court, 239 Cal.App.4th 679 (Cal. App. 2015) (standing and validation judgments limitations)
Colonies Partners, L.P. v. Superior Court, 239 Cal.App.4th 689 (Cal. App. 2015) (validation judgments' effect on subsequent §1090 actions dicta context)
Eden Township Healthcare Dist. v. Sutter Health, 202 Cal.App.4th 208 (Cal. App. 2011) (lack of nexus between compensation and contracts insulated from §1090)
Vallerga v. People, 67 Cal.App.3d 847 (Cal. App. 1977) (consulting relationship not necessarily violative; hypothetical scenarios)
San Diego Gas & Electric Co. v. Superior Court, 13 Cal.4th 893 (Cal. 1996) (three-part test for CPUC jurisdictional interference)
Sarale v. Pacific Gas & Electric Co., 189 Cal.App.4th 225 (Cal. App. 2010) (CPUC authority and regulatory policy considerations)