City of Pasadena v. Cohen
228 Cal. App. 4th 1461
| Cal. Ct. App. | 2014Background
- In 2011 the Legislature enacted chapter 5X to abolish redevelopment agencies and set procedures for winding up existing obligations; successor agencies must submit Recognized Obligation Payment Schedules (ROPS) for approval.
- The City of Pasadena, as successor agency, included two items in its ROPS III (payments expiring in 2014 for pension-bond reimbursement and subsidized housing bonds) that the Department of Finance disapproved; the Department had previously approved them in earlier ROPS.
- Pasadena sued the Department seeking declaratory and injunctive relief; the trial court granted a preliminary injunction directing the L.A. Auditor-Controller to sequester the disputed funds and refrain from distribution.
- The Department appealed the interlocutory injunction; the Department contested both the merits (that the items were not enforceable obligations) and the injunction’s necessity, and raised a procedural challenge that declaratory relief was improper to review the administrative decision.
- The Court of Appeal questioned the Department’s standing to appeal but, for judicial economy, assumed standing to reach the dispositive procedural issue about availability of declaratory relief and proper remedy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is declaratory relief available to challenge the Department’s administrative disallowance of ROPS items? | Declaratory relief may be used to interpret statutes and thus to challenge the disallowance. | Declaratory relief is not an appropriate vehicle to review an administrative decision; traditional mandamus is the proper remedy. | Declaratory relief is unavailable for review of an agency administrative decision; the trial court erred in granting injunctive relief tied to declaratory claims. |
| Could the trial court grant a preliminary injunction preserving sequestered funds pending judicial review? | Injunction necessary to prevent irreparable harm to the City and preserve status quo. | The injunction improperly tied to declaratory relief; the court should have required mandamus or dismissed. | The injunction must be vacated because it rested on an unavailable declaratory theory; trial court should either dismiss or treat the pleading as a writ petition and proceed. |
| Did the Department have standing to appeal the interlocutory injunction? | N/A (plaintiff focused on merits and harm). | Department said it was aggrieved by sequestration, represents state financial interests, and may sue to prevent chapter 5X violations. | Court expressed doubt but assumed Department had standing for judicial economy; ruling on standing unnecessary to disposition. |
| What remedial course should the trial court follow on remand? | The court should preserve funds and resolve merits favorably to City. | The court should either dismiss the declaratory action or construe the complaint as a petition for traditional mandate and decide merits. | Remand with directions: vacate injunction and either dismiss (with/without leave to amend) or construe the complaint as for traditional mandate and proceed accordingly. |
Key Cases Cited
- California Redevelopment Assn. v. Matosantos, 53 Cal.4th 231 (explaining chapter 5X and redevelopment dissolution)
- State of California v. Superior Court, 12 Cal.3d 237 (1974) (declaratory relief is not appropriate to review administrative decisions)
- Guilbert v. Regents of University of California, 93 Cal.App.3d 233 (1979) (prohibition on joining declaratory relief with a writ reviewing agency action)
- Hostetter v. Alderson, 38 Cal.2d 499 (1952) (court may construe pleadings as mandamus petitions)
- Boren v. State Personnel Bd., 37 Cal.2d 634 (1951) (same principle of treating pleadings as writ petitions)
- Collateral Loan & Secondhand Dealers Assn. v. County of Sacramento, 223 Cal.App.4th 1032 (2014) (procedural note that trial court retains jurisdiction while appeal of preliminary injunction is pending)