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California Appellate Court Nullifies Council "Appeal" to Itself

I-Stock City Council Meeting RoomWoody’s Group, Inc. v. City of Newport Beach, 2015 WL 367448 (Cal. App.), involved approval by the City’s planning commission of plaintiff’s changes to its restaurant, including a covered outdoor patio, inside dancing and extended opening hours on weekends.  The restaurant was located in a “trendy marine area that includes a number of restaurants.”  City Councilor Mike Henn filed an “official request to appeal” by email to the city clerk, citing his “strong belief” that the approval was inconsistent with the character of the area and in violation of the city’s plan.  The appeal did not meet the requirements of the city code and was not accompanied by an appeal fee (which in this case would have been $4100).  At the next Council meeting, the Council heard testimony in support of a council-initiated appeal and decided to take up the matter in conjunction with a tree removal permit which was part of the same application.  At the appeal hearing, Councilor Henn presented a cogent and prepared argument and the city council reversed the grant of the application, notwithstanding the arguments of plaintiff’s counsel that the council had no authority to hear the appeal and that Henn was biased in such a way as to void the Council decision.  In its final order, the Council asserted a “longstanding policy” that allowed council members to seek review of planning commission decisions, which it had invoked on eleven previous occasions.

When plaintiff sought an administrative mandate to challenge the denial, the city responded with a cross-complaint for a preliminary injunction, which the trial court granted while denying the administrative mandate.  That court took no action to a civil rights damage claim filed in response to the preliminary injunction claim.

The court said that ordinarily it would not have heard the administrative mandate appeal because of the undisposed-of civil rights claim; however, the preliminary injunction claim was validly before it and, because the claims were coterminous and it would be in the interests of judicial economy, the court determined it would proceed to the merits.

Turning first to the bias issue, the court noted that city councils have both legislative and adjudicatory functions and that, in dealing with the latter, it must be “neutral and unbiased” under California case law:

The generally accepted linguistic formula of the rule against bias has been framed in terms of probabilities, not certainties.  The law does not require the disappointed applicant to prove actual bias.  Rather there must not be “”an unacceptable probability of actual bias”” on the part of the municipal decision maker.  * * * Thus bias – either actual or an “unacceptable probability” of it – alone is enough on the part of a municipal decision maker is to show a violation of the due process right to a fair procedure. * * *

The court determined that allowing a biased decision maker to participate in an appeal hearing was itself sufficient to invalidate the resulting decision.  In this case Henn’s notice of appeal demonstrated his desire to overturn the planning commission decision and his prepared case at the appeal hearing overcame his bland denial of bias at the end of the hearing.  Moreover, the variance between the city’s formal action and its code sections regarding appeals, especially the ad hoc council decision to call up the planning commission decision at Councilor Henn’s request added to these fairness concerns.  The appellate court rejected the trial court’s rationale that, although the council’s actions to take the appeal were “void,” there was sufficient time for others to file an appeal, which the council would have had to hear in any event.

Under California law a governing body has no inherent right to hear an appeal it has initiated and the court concluded that the actions of this council deprived plaintiff to its due process right to a fair procedure, rejecting the City’s distinction that it was the Council, rather than Councilor Henn, that caused the appeal hearing, pointing out that, notwithstanding the city attorney’s advice to the contrary, there was no appeal procedure that provided for that appeal and taking the unusual step of appending the appeal sections to its decision to demonstrate the point.  Those code sections require a statement of facts and the basis for the appeal, on forms provided for by the city clerk, and accompanied by the appeal fee.  Moreover, such an appeal must be taken by an “interested party,” which was at variance with the role of a disinterested city councilor.  The fact that the city had used an informal appeals process in the past does not negate the necessity of compliance with the city code.  Finally the court noted that the code requires compliance with its appeals process and prohibits a challenge to a city decision unless there is compliance with the city code.

The court concluded its decision with an elementary due process maxim that one may not be a judge in one’s own cause, a principle of “natural justice” that ran as far back as the 17th century writings of Lord Coke.  The ipse dixit nature of the city’s order reversing the planning commission approval overcomes neither the code requirements nor the proverbial “smell test” of allowing the council a pass in violating those requirements on its own.  The court did allow that, if the code had allowed the council to take such appeals, that might have changed the analysis, but refused to speculate on that counterfactual.

Because the appeal itself was unauthorized, the court determined that the action of the council on that appeal was a nullity.  Moreover the preliminary injunction was, under the circumstances, improvidently granted.  The court thus revived the planning commission decision to grant the application.

This case provides a mixture of common and statutory law and demands strict compliance with the local appeals process.  Oregon law allows city and county appellate bodies to review the action of an inferior officer or body on its own motion under ORS 215.422(1)(a) and 227.180(1)(a), and has a less exacting view of bias than the California courts.  Columbia Riverkeeper v. Clatsop County, 267 Or. App. 578 (2014).  Nevertheless, this decision presents a thoughtful consideration of the intersection of planning policies and fair procedures.

Woody’s Group, Inc. v. City of Newport Beach, 2015 WL 367448 (Cal. App.)

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