City of Grass Valley v. Cohen, C078981N

Background

Legislature dissolved redevelopment agencies (RDAs) in 2011 (the “Great Dissolution”) and created a due diligence review (DDR) process (§ 34179.5) to identify post‑Jan 1, 2011 transfers subject to clawback.
Grass Valley (the City), also successor agency, had preexisting agreements with its RDA: a 2011 Dorsey (highway) Agreement (≈$695,000 transferred) and a 2011 Omnibus Agreement (City received $307,161); and a 1986 ‘‘umbrella’’ Cooperation Agreement.
Department of Finance disallowed the 2011 agreements as enforceable obligations (statutory bar on sponsor/RDA agreements) and ordered clawbacks; City paid under protest and sued via writ of mandate.
Trial court granted partial relief: it ordered the Department to reconsider (1) whether Omnibus transfers were for “goods and services” and (2) whether the Dorsey highway agreement could be enforceable under a postjudgment statutory change; other claims were denied.
Department cross‑appealed the writ on the goods-and-services issue and argued exhaustion barred that relief; postjudgment statutory amendment (2015) added an exception for pre‑June 28, 2011 agreements relating to state highway infrastructure.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether City may obtain writ directing Department to decide if Omnibus transfers were for "goods and services"	City: merits raised in court; trial court may remand to Dept for consideration	Dept: City failed to raise goods-and-services in administrative meet-and-confer; exhaustion required so writ remand improper	Court: City failed to exhaust; issuance of writ ordering Dept to consider goods-and-services was error — reverse that part of judgment
Whether 2015 statute (SB 107) making pre‑6/28/2011 highway agreements enforceable applies to Dorsey and renders it enforceable	City: appellate court should apply current law; statute intended retroactive effect to cover DDRs	Dept: statute should be decided administratively first; ordinary presumption against retroactivity applies	Court: statute is reasonably read to operate retrospectively for this limited purpose, but Dept must decide in the first instance whether Dorsey qualifies — remand with direction that Dept consider it
Whether 1986 umbrella Cooperation Agreement makes later 2011 transfers enforceable (as loans within 2‑year rule)	City: 1986 agreement and mechanics convert later transfers into enforceable obligations / loans	Dept: 1986 agreement is not a definite loan or specific enforceable obligation	Court: 1986 agreement is an umbrella/administrative instrument, not a loan or specific enforceable obligation sufficient to save the 2011 agreements
Whether validation judgments or Proposition 22 / contract‑clause challenges bar clawbacks	City: prior validation judgments validated agreements; Prop 22 and contract‑clause prohibit this result	Dept: validation could not adjudicate later dissolution claims; Prop 22 and contract clause do not prevent statutory unwind/remedies	Court: validation judgments do not preclude applying dissolution statutes; Prop 22 and contract‑impairment claims do not prevail here; prior authority supports remission of RDA creator agreements under dissolution law

Key Cases Cited

California Redevelopment Assn. v. Matosantos, 53 Cal.4th 231 (Cal. 2011) (upheld RDA dissolution scheme and framed subordinate‑entity limitations)
City of Brentwood v. Campbell, 237 Cal.App.4th 488 (Cal. Ct. App.) (addressing retroactivity and DDR clawbacks under dissolution statutes)
NBS Imaging Sys., Inc. v. State Bd. of Control, 60 Cal.App.4th 328 (Cal. Ct. App.) (failure to raise issue administratively precludes superior court mandating agency action)
Sharma v. City of San Jose, 5 Cal.App.5th 123 (Cal. Ct. App.) (treatment of postjudgment statutory changes and remand to agency for factual/legal determinations)
City of Bellflower v. Cohen, 245 Cal.App.4th 438 (Cal. Ct. App.) (holding administrative withholding of local tax revenues conflicted with constitutional limits)
City of Fontana v. Superior Court, 244 Cal.App.4th 1421 (Cal. Ct. App.) (validation judgment can bar later claims when the same issues were and could have been litigated)