City of Palmdale v. City of Lancaster
167 Cal. Rptr. 3d 765
Cal. Ct. App.2014Background
- Gonzales sought GM brand in Palmdale; Palmdale refused land; Lancaster offered $604,000 relocation aid to Gonzales; Palmdale sued Lancaster under SB 114 prohibitions; the trial court issued a judgment enjoining the aid for two years and voiding related agreements; Palmdale sought disgorgement of sales taxes; Gonzales opened in Lancaster after injunction but before related financial aid was delivered; Lancaster paid $300,000 for a covenant to operate in Lancaster after relocation; Palmdale appeals the two-year ban and the disgorgement denial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the two-year ban on financial assistance is proper | Palmdale argues no time limit; relocation ban should be timeless. | Lancaster argues the statute permits a limited, 365-day relocation period and a finite ban. | Two-year limit proper; statute allows finite ban while relocation moved. |
| Whether disgorgement of sales taxes was proper | Palmdale seeks disgorgement to recoup lost taxes. | Lancaster argues disgorgement not warranted and not pleaded; equity dooms it. | Disgorgement denied; court did not abuse discretion. |
Key Cases Cited
- City of Carson v. City of La Mirada, 125 Cal.App.4th 532 (Cal. Ct. App. 2004) (relocation incentives and predatory competition analyzed under SB 114)
- In re Marriage of Kacik, 179 Cal.App.4th 410 (Cal. Ct. App. 2009) (contemporaneousness of statutory phrase ‘is relocating’ considered)
- Sierra Club v. Hayward, 28 Cal.3d 840 (Cal. 1981) (statutory interpretation guided by purpose and evil sought to prevent)
- Mt. Hawley Insurance Company v. Lopez, 215 Cal.App.4th 1385 (Cal. Ct. App. 2013) (purposeful interpretation tied to public benefit and deterrence)
- Palo Alto–Menlo Park Yellow Cab Co. v. Santa Clara County Transit Dist., 65 Cal.App.3d 121 (Cal. Ct. App. 1976) (unlawful activity and damages concepts related to statutory violations)