HomeMy WebLinkAbout21-City Attorney
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: James F. Penman
Subject: Request for Amicus Assistance in Two Appellate
Cases from the League ofCalifomia Cities
Dept: CITY ATTORNEY
Date: March 10, 1997
OR/GINAl
Synopsis of Previous Council action:
None.
Recommended motion:
Join in amicus briefs.
{/
7-.
Signature
Contact person:
Robert L. Simmons
Phone:
5255
Supporting data attached:
Ward:
All
FUNDING REQUIREMENTS:
Amount:
Source:
Finance:
Council Notes:
75-0262
Agenda Item No. 2./
3/'1'7
MAP.-Q4-97 rUE 15:03
LEAGUE OF CA CITltS
FAX NO, 9166588240
P,OI
- Jr
I...i}
II League of California Cities
IIII 1400 K Street, 4th Floor. Sacramento, CA 95814 . 916/658-8200 . FAX 916/658.8240
....IIL.
Urgent Fax Transmittal
TO:
City Attorneys
FROM:
Legal Advocacy Committee Executive Committee
DATE:
March 4,1997
RE:
Request for Amicus Assistance in Two Appellate Ca$es
Attached are two requests fol' cities to join in amicus briefs being prepared by volunteer brief
writers. The two letters from your colleagues explain the significance of each case to cities
statewide.
In each case the executive committee of the League's legal advocacy committee has reviewed the
case and is urging cities to add their names to the briefs. Regrettably, the time frame is very
short for both cases, which is why information about these cases are being sent via broadcast
facsimile instead of the usual Legal Advocacy Report or even first class mail.
The full committee is meeting Oil March 21. Please share information about any appellate cases
which may merit amiclIs activity with the committee; instructions on how to do this are available
by facsimile from the League; call916/658-8231 for furllier Wormation. As these cases
indicate, the more advance notice the committee gets, the more advance notice it can provide to
city attorneys statewide concerning opportunities to join amicus briefs.
Thank you for your attention to this fax transmittal.
g; ile~al\lac\rtPLS'Jaxc...r.dC'.;
. MAP;-OH7 TUE 15: 03
LEAGUE OF CA CITIES
tAX NO, 9166588240
p, 02
City of Thousand Oak~.
CITY A-rroRN~
MARK G. SELLERS
February 28. 1997
TO ALL CALiFORN!A CiTY ATTORNEYS
Re; J.nJE! G. I. iNDUSTRIES. Inc. (BanKrl,lptcy Proceeding)
Ci ty Of ThOusand Dale. Appe 1 1 ant
United States District Court. Central District.
Case. No. CV 97-0337'WJR
[Court Mandated City to Accept New Solid waste Hauler]
;1e League Of California Cities' legal advocacy committee has passed a resolution
urging all California Cities to join in an ~us curiae brief seeking revers,l Of
the decision Of the United Stetes Bankruptcy Court in the above-eapcioned caSE.
'Ianette Sanders. of Snell & Wilmer. has vo1unt~ered to file the amiclJs brief. we
ex~ect the orief to be due on MarCh 24. 1997.
The following is a synopsis of this case to cate:
t. legal I$$u!$ Presented in this Case.
A. Whether. based on the federal preemption dOt;tr~ne. the banlcruptc) court
i.n resolv1~ the bankruptcy fiiing of a privat.e solid waste hau~er
und~r a city franChise can: (1) Ignore the police power enactmerts and
ordinances of the aff~ted city regulat1ng solid waste collectior.
requ~ring approval of a new hauler: and (2) Override the contractual
consent to assignment rights helct by the City. as set forth in sclid
waste franchise agreements.
6. Whether a local ordinance requiring city consent to any assi~nmert or
transfer of a city franchisee is not an -applicable law. under s~ction
365 of the Bankruptcy COd@. whiCh provi6es that a trustee cannot
transf~r or assign an executory contract if there is -applicable law.
prohibiting the assignment. and the partieS do not consent.
.,.M "'^'~""" "... Ol.,,,I.,,~rd . TMuOiotl<l Oaks. ea,,!;)ffiia S-:3e2-2Wa . (005) 449-2170 . FAX (80S) 449-2175
MAR-Q4-97 rUE 15:04
LEAGUE OF CA CITIES
FAX ~iO, 9 166588240
p, 03
G.l. lNDUSTRI~S. INC.
February 28. 1997
Page 2
C. Whether the City of iho'lSanrj OakS ("CITY") acted "unreasonably' '10
CO~Side('ir.g tne re'l,,~stM Consen: to assignment of a solid waste
franchise agr~ement. when the City Courcil dHermiMd the CCl11pan:' being
prO~losed as the new fr\in~hlsee (t~e actu~l cot1troiling entity) WilS
unacceptable based on its large size, out of area ownersn1p. a~ its
extensive history Of legal and crim1nai problems.
II. Brief Summary of Facts and Proceedings
In 1994. purs~ant to changeS in California Jaw concerning solid wasts. the
CITY completely revised its solid waste disposal an~ collection otdinances. w[11Ch
i1clu,je regulatiO:iS cf private ~;atllers. a:1d authorized the granting of Citj
fr~nchises to tro~e haulers the CITY determlr.ed to be qualified. fhQ CITY
established qualificatior.s for trese haulers. Such as the firm muSt be local1)'-
o'Nr.ed. Md the franchise would represent a major COiTpny asset. As a result \'1' thlS
fie-II local legislation. the ClIY drafted and extendd MI'i franChise 3gteements to a
sr"all locally-owned (aM controlled) company. named Gonejo Enterprises. Inc.
Section 6.2.308 Of trle Th'):.lsarid Oal:s ~lJniClp~l COGe proviCles that a tra l$feL
sale. or excharge of ~O% or ~ore of the ~utstanding coc~or~ stock of a City-
"',anchised private ho:;,,,r CM5ti~utes an assignment r~~l,iir1ng We CITY'S written
COi\SE':f'It. This >ett1on fUI'ther pl'c'tides tr.;:t thare are f'eur CQndit10ns precec;;tlt
"hlch must be Sd~1$cie1 bei\;(e the CITY will consi,;;::- a propvsed assignee. Trese
condit.ions pr<:cedent incll;de:
a. P'l' the COS: 0>' evaluations of the prODJsed a:,~ignee:
b. Furnish audHed find(IC1al st':tements far three years imrediate1y
preCeding the ass.igr:ment req'Jest:
C. Futnish sat1sfactory \oir1tter: proof tt'lat t~,e proposed designee ha~
ten years of solld ~aste ex~erience equal or exceeding that Of
the present f,-anChisee. Evicence must incl,;de tha: the assignee
has not rece~ 'led a:v ci tat 10n5 or other censure from any fecere 1 .
stet! or local agency with respect to itS w1s:e operations or
violations of waste ffi3nager,.ent lew.
u. The prcposed assigr:~e coes not O','in 0'- ope"Wl a 501 id waste
landfill 1ft Ventura County.
2100 ThrusaM QclIS ao;.urev-.", . ThO'.....aOO 0.;...., eam.:rn,a 91362-29(;3 . (805) 449.21 ;.0 . F;v. (800) W,.21 .~
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MAR-C~-27 rUE :5:05
! ~AG!JE :iF ("A "l: 1 T n;~
_~. v VI. 1, ._>..'
FAi< ~10. 9166588240
P,04
(i...1. RUBBISH. II~C.
February 26, 1997
~age 3
The TMusand OaK:) Municipal Code provides that if U;e franChisee ~s in
cel'ilult. the CITY w~l1 not consider any proposed aSslgnment. The municipal c:>de
!lso prO,ides that the CITY will not 'unreasonably. withhold its consent. In
addition. We fr'anchise agreement addresses the area of assignrr~nt, It provijeS
that all assignees must be lOCally o'../Oed.
As p~rt cf its proposed Cha~ter 11 olan of ReOrganization. G.!. Industries.
consol1dat~d its subsidiary Conejo Enterprise. Inc. The plan provides that C)nejo
Enterprises will be dissolved into G.!.. which will be sold to. and whOlly-o~1ed by.
Western Waste. Inc. (Torrance C~.). a much larger and regional hauler. Waste'n
waste 'lias then acquired by. and will be wholly owned by. ti1e even larger USA liaste.
Inc. Wanas. Texas).
Western ~aste has had an extersive history of poor performance. allegations of
improper Conauc: (;r'lolving settlemer:ts for illegal ebmping of haZardous matei'ials),
present crim,nal in'iestigations (;n'o'0''110g allegea actions with Compton City
Council). and even past convictions of high rar.~i:1g managers for bribing publ'iC
officials. The rec~r:t lre::;l1a attentiCr1 concernir.g City cou"cil merr.ber Patricia
Moore. of Corr:pton. interreiates to of;--icials of Western Waste. The IJnlted States
AttQrnE:j'S Office is 'inv(;sti~ating f~r:rer allegaticns pertaining to offi~iaL of
Western ',oJaste f(lf matters in RivarSide County. LOS Angeles County and Orange COI;nty,
!c,;orljing to recent newspaper arcicles.
The City :;If Thcl;sM;.~ O~i<.s has an or,::inar:;e. which states Ci ty Cou~cll 1T,:,Nters
;'1ouid avoi.:! ani irr,pr'eSSiOn of uri,jue ~nfll1et\ce or impropriet;l in conducting tr,e
C!TY's bi:s1r,~ss. :n September. 1996. the City Council ura.11rro,lsly voted not to
'lpprove an assignment of the franchise from Corejo Enterprises tc WesterlllUSA Waste,
:ased on this history Of problemS. and the CITY's policies of selecting s~~ll
lc~al1y.cwned haulers. This denial was conveyed to the bankruptcy court.
The de:Jtor filed a rution with the bankr',l~,tcy court, in essence. cranrni 19 down
co'; assi"m:.e~t lIPC;~ the CIn, Ti':e C:I~Y filea its opposition setting forth thE
provisions of tr:e municipal cod". a,jCreSSing clssigm.ents and the franchise
~~ovisicns. aCCr'essil1y local ow:'\ers~.ip. o!S we11 as e'lider1Ce of criminal convictions
~f high 1e,el management cfficials of hestern Waste in CalIfornia. and in othEr
states. Ihe court was also provided w1th evidence that the proV<)sed aSSignee has
~ot sat~sfied a'l four of the conditions' precedent, There 'lI'as also e'lldellC~
presented that tne current franCh1se" ~ay be 1n default based upon prior pled~es of
stock and transfer of voting contrOl of the stOCK without the CITY's kncwledgE.
2100 Tht::,..:$a....d OakS ~!~!eva(Q . TholJ~d Oa~s. CalifO<r.ia ;1362.2003 . \80S} .:',41-217v . F~:X {S('5; ';4S-21~ 5
0. .~.ir.:~,i .J'I."=:~C:::JN"T
UAR-~J-~7 T!~ 1~:08
I,... 't'.... ...I.. 'oJ _
LEAGUE OF CA CITIES
FA:< NO, 9166588240
p, 05
G.!. RUBBISH. INC.
Fe"5'ruary 28.-1997
Page 4
;his prior undiscbsed pledging of stock an,j irrevocable VO"i.ing control may
constitute frQvd in the inducement of the 1994 franchise agra~ment for failure to
disclose materiai filets.
On No':emt'er 14. 1996. tre t>ankr~!ptcy ,O,:r<; ru'ed that federal pr~mption
1;>01 ied and relied lJPOr. tre be;1kruptcy case of Baker & Orak.~ v. Pu!)llc Service
Comnissior. of Nevada, 35 F.3d 1348 (9th Cir.. 1994). However. the holding Of Bakar
i5'~ctlialiytot1e-contrary. Tne COI.lrt held that Nevada State law is to be cOllplied
\,ith in formulating a plan of reorganizatIon.
The bankruptcy co~:rt !lso held that the c!n unreasonably witnhelc its
consent, Th~ co~rt failed to a~ply the provis~ons of section 365 Of the Bankr)ptcy
Code pert~i~ing to 'a~plic"ble law.. The CCcur, die not address the conditions
pr'ececlent e"cept for the iss"e of past criminal ~,:t1vity. \"hiCh was shrugged off as
bei"9 done by "estern Waste. and that tiie (,e', franChisee WOiJld oe G.i. G,!. 1as no
p~st crimi na 1 convict i Ct". Howe.er. the Ci tj pro'!1ced e'!idenCe that tne same
rersons \,ho appeared to be invoiveC in past crHmal actlVity wo,ila be overseeing
tr,e man~~e:ncnt c.f Gr. arid \,e,uld have direct CJi'luol 0'1,,1' G.r. It is the Citf'S
~csition that thiS entire plan Of reorganiz~tion 1$ marely a corporate shell glme,
Or. Oec&:rber' 24. 1;);;0. :he CrTY flleci its notice of ar,p~al I;oncerroing thE cram
d[CNn motion and confirmation of the plan of reorganizatlon. The crTY also 1';1,0 an
objection to the Bankruptcy Appellate P,lnel. IhiS'li1llwS for the appeal to be he1rd
~y the U.S. [listriC': Court. fi%t~",r ~reC1~O:' d'SO f,lea an appeal ana an e" plrte
::;p1iC3tion fer 5t,.1 perding;pp~;i. Tr,e c;TY "ilad a notKe of jOinder. On
Decer;.ber 27, 1996. the Distri,:t Co~rt issue" the st'lY pending a full heahng t,) be
he:d on Jan~d(Y 2B, 1997. The s,;ay is very iT~:;<tant Oi:e to the fact that 1f
s~bstantiai portlOns of the pian are consi.tDma~e,j, it will reo/jer the appeal mo,)t.
AS 01' the date of this lett"r. ti'e Oistr'lct Cc~rt has not tuled on the stay. The
:itj Of ThO';S~):d Caks filed its CD~r,ing brier O'~ Febr';.~ry 25. 1997.
II!. Significant Effect Upon Cities
Th~S Iwticuiar appeal has a sig,:',ficact eff,:ct upon all citieS ~nd local
agencies. which ha,.e enacted an cr,jiroancE: reQ,..j ri n9 ~1ty consent to any assignl:Jent
or transfer of a :itj franchise Ot cont~,ct, If the bankr~ptcy co~rt's ruling is
allO\.;ed to stan,l on appeal. it permits: (1) The ~ankr;ptcy court to override
legislative prO'fis~cns of tr:e city: (2) The city COll!1Cil finaings of imp,-oper past
c')rd'uct on the ~!"t of a propose,j francl:ise~ (on issue which is and Should be
imccrtant to e'ect~: officials): and (3; The cC~tract~al cQ~sent provisi~ns
::.~ntai(\e'j in t~~~' fr"arrchisa aJree~:ents or ot;,e~ cont~'a':ts,
2100 rM~~,d C2..I($ Boul~....ara . Tho,-,S,':!!",d OaXs, Caftfc-mia: $~se.2:.29C3 . {a05) 449-2170 . FAX (805) 4J.9-211S
... , '
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--..- -....
MAR-D4-97 rUE 15:D5
Li:AGl'E OF CA C:T!ES
FAX NO, 9166588240
P,06
~!. RUB8ISH JlK.
F\?bruary 28. 1997
Page 5
In essence. ar~ person. or entity. who centracts with a Clty can file a
bankruptcy proceeding and have t~e court transfer or aSSign the franchise or
contract over t~e object;ons of the city. The court would not be required to apply
the proviSions set fortfl in the city's ~odes or Crldrter.
All tities shOUld h~ve a comr.on interest in having their local legislation and
contractual agreements. wf,ich set forth standards of review of propoSed assignees.
maintained.
IV. Effect of Amicus Brief
ihe C;ty of Thousa.'1d Oaks oe11eves that the assistance of amit.IJs brjef~il1
provide additional aware~ess to t~e district court that tllis appeal involves public
policy issl,i-=s. and that tr,e interpretation of tM CMkr'jptcy code term "applicable
law. includes lQ~!l legislation. oot ~~rely federal. state or CO~fon law. but
applies to all properly e~acte1 la~s.
A City's general ~clice p~,;rs. which include the regulatlon of its
S;l1itation. is ve:'f important to leeal contrOl arid affects e';ery citizen and
business utilizing waste disposal services within their city's jurisdiction. The
bankruptcy CQl;rt s~loL('d not nave the duthOri~Y to ignore or over..i<.te the pl,iol ic
health. safety and weHare cvoce,'ns of a city.
Your city' S sup~ort 1$ re.wested , il tni s matciOr.
AttKh.
210Q Th-;1,l$a:,Q .oakS 90U!9~r~ . i'n~l,J$9.N Oa.~, Cat!to(~ia 91302.29C3 . ($05j 449~21 to . FAX (805) 4.J9-21"S
0. P>"ir.J.;.'::';>1I "':.::...c!,:dr~~r
CITY OF SAN JOSE, CALIFORNIA
OFFICE OF THE CITY ATTORNEY
-
151 W=ST MISSiON STREET
SAN JOSE. CAl1FOR~liA 95110
Telsphc:le (40$) 277-4454
-aosimlie (408) 277.3159
A'
-".
JOAN R GAl.LO
C,iy !,ttcroc!
SENT VIA FACSIMILE
March 3,1997
Tc: All California City Attorneys
Re: ~an Joss Mercury Ne'N$ v City of San Jose
Amicus support as urged by the League of California Cities
Dear California City Attorney:
On FelJ'1J3ry 26. 1997, the San Jose Mercury News f,led a Petition for Writ of Mandate with
tr~' Sixth i"p~e!late District Court of Appeal seeking reiief from the trial court's ruling In favor
0' t--;: City in the above entitled action, City Attorney Ariel Calonne from the City of Palo Alto
p';";lS to apply to the Appellate COllrt for leave to file an amicus brief in support of the City of
S:m Jose, The Exeoutive Committee of the League of California Cities urges you to
join the amioul$ brief. As explained below, the issues in this case have statewide
significance and al! California cities have at common interest in the outcome of the ISSlies
presented
On December 10, 1996, the San Jose Mercury News filed a Petition for Writ of Mandate in
Santa Clara County Superior Court to compslthe City of San JClse to produce all personnel
records and other documents relating to ar.l ex-employee's separation from his employment with
the City of San Jose, The ex-employee whose personnel records are at issue in thLs case is
Robert Gremminger. Mr. Gremminger was employed by the City of san Jose as a fire captain
untii November 20, 1996. Mr. Gremminger's departure from the City of San Jose was preceded
by a controversiai shooting incident which occurred on or about October 24, 1996, while he was
off.duty at the Great Mall Shopping Center in the City of Milpitas,
The San Jose Mercury News contends that the public has a right to know the circumstances
under which Mr. Gremminger separated from the City of San Jose, i.e. whether Mr. Gremminger
was disciplined, terminated or othervVise forced to leave his employment as a result of the
shooting incident. Thus, the Mercury Nel,"'I's is seeking all documents that relate to the City's
investigation. if any, into the shooting incident and any disciplinary action that may have been
taken by the City as a result of the shooting incident. The Mercury News contends that a public
employee has little or no right to privacy with regard to information concerning his or her public
employment, particularly wt-.ere the employee haS been involved in a publiC incident and where
there Is a possibility of officiClI misconduct. Under the broad reading of the Public Records Act
vged by the Mercury News all disciplinary reoords would be publio.
IIIU\ V. VI .""... .V'vv
Letter to all California Crties re: amicus support
3/3/91
S\!rL.,!Q~ELMercury News, Inc v. City of San Jose
Page 2
The records sought by Petitioner constitute private "personnel" records which are exempted from
disclosure under the California Public Records Act pursuant to Government Code ~ 6254(c).
The City is obligated to protect Mr. Gremminger's employment records from disclosure in this
case because of Mr. Gremminger's rl!Jht to privacy as guaranteed by Article 1 J ~ 1 of the
California Constitution. Also, since the public knew that Mr. Gremminger was no longer on the
payroll, no cognizable publiC interest would be served by disclosing Mr. Gremminger's personnel
records and in any event, the pUblic interest in non-disclosure (protection of privacy rights)
clearly outweighs any public interest in disclosure. Thus, the records should also exempted from
disolosure under the California Public Records Act pursuant to Government Code 9 6255.
The Internationa! Association of Firefighter's Local 230 and Robert Gremmfnger intervened in
the action in Si.lpport of the City's position, On January 31, 1997, the Superior Court denied
ihe Petition for Writ of Mandate filed by the Mercury News and ruled in favor of the City oi
San Jose. The c.ourt found that the privacy Interests in this case outweighed the public
interest in disclosure of the personnel records. The Mercury News then filed a writ with the
S:x:h Appellate District Court seeking review of the trial court's decision.
This case has s'gnificant ramifications for all cities There currently is no clear appellate court
guidance on this issue. We are very concerned about the case of Pavton v. City of Santa
Ci~I~, 132 Ca!.App.3d 152 (1982), where a former employee brought suit against the city for
dal1la~ arising out'of the city's alleged misconduct in posting a notice of the employee's
termination and the reasons for the termination in a city employee workroom. The appellate
court held that the allegations set forth in the former employee's complaint stated a prima
facie violation of the employee's right to privacy under Articie 1, S 1 of the California
Constitution. Similarly, although the decision was not published, we previously suffered a jury
verdict under a constitutional theory based on a disclosure by the Police Chief which merely
confirmed information already in the public domain.
if tno:' [''''ercury News "'iere to prevail in this action, arguably all city disciplinary matters would
be a matter of pLlblic record and discoverable pursuant to a PLlblic Records Act request.
Currently individual employees wanting to maintain the confidentiality of a disciplinary action
have reason to waive the right to appeal the disciplinary action; if the records are subject to
re!ease those hearings could not be avoided. Information that reveals little or nothing about a
cities' own conduct doss not further the statutory purpose behind the Public Records Act and
the protection of privacy rights is important to pLlblic employees. The court ShOLlld be made
aViare of the impact that this decision will have on all city government personnel matters and
disciplinary actions in particuiar.
Please complete and return the enclosed response form at your earliest possible convenience
(no i~ter than Friday, March 14, 1887), indicating whether your city wishes to add its name
Letter to all California Citiesre: amicus support
3/3/97
SanJQ~e .Mercury News. Inc. v. City of ~~n Jose
Page 3
to the amicus brief and join the League of California Cities in SLlpporting the City of San Jose
in this matter.
Thank you for your time and consideration. Please feel free to contact me directly at (408)
277 -2403 if you should have any questions or comments.
Very truly yours,
JOAN R. GALLO
City Attorney
By: .J./ELL-.-
SHARON CONWAY WIBLE
Deputy City Attorney
cc: JoAnne Speers, General Counsel. League of California Cities
...... v, "" . "'.... ~ "'. 'JV
L....ll'1.ll.l... VI VII Viii....""
I I III 11V. V.lVVVUU~"tU
f, lU
Consent to Join as Amicus Curiae
To: Nanette Sanders
Snell and Wilmer
1920 Main Street, Suite 1200
Irvine, CA 92619-7062
714/253-2'139
FA-X 714/955-2507
Please add the following entity as an amic/ls curiae in the I1I re G. 1. Indll.5tries,lnc. v. City of
ThOl/sand Oaks ease:
Name of Entity:
Contact Person:
Address:
Telephone:
FAX:
Please return by \Vedoesday, l\bHh 19, 1<;97.
?:"!~gaj'.LACJtr:;'.ThO,lkR~s.,:kc
x
x
-------------------------------.-------------------------------------------
Consent to Join as Amicus Curiae
To:
Arie! Piene Calanne
City Attorney, Palo Alto
P.O. Box 10250
Palo Alto, CA 94303
4151329-2171
F.<\.X 415/329-2646
Please add the fonowing eotity as an amicus curiae in the San Jose ."'Jerellry S.,ws v, City of
Sail Jose ca:>e:
Name of Entity:
Contact Person:
Address:
Telephone:
FAX:
Please ret~lrn by Friday, March 14, 1997.
gkgarLAc..ltrflh()1.\...::.~~.dol;