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Mammoth not alone in its dismay over court decision

January 18, 2011

Every city and county in California have sided with the Town of Mammoth Lakes as “friends of the court” in its appeal of a recent court decision finding it liable for $30 million in damages as the result of lawsuit filed by a developer at the Mammoth Yosemite Airport (above).

It seems to be something that most people have forgotten.
In all the brouhaha over the airport lawsuit appeal, the Town of Mammoth wasn’t the only town challenging the Bridgeport jury’s finding that the Town is liable for $30 million in damages.
Far from it.
In fact, every city and county in the state of California sided with the Town, as “friends of the court” or “amici curiae.” The appellate judges’ decision is rattling municipal nerves across the state.
“The issues in this case are of crucial importance to the ability of California cities and counties to make use of the “development agreement …” and it is of “statewide importance” reads the brief filed by all 480 California cities and all 58 California counties.
The reasons that cities and counties are worried is because a Development Agreement, a contract like the one that the Town first entered into with then-airport developer Terry Ballas, is the main tool that municipal government can use to make sure any project between a government and another entity actually gets done.
It sets the timing of the project, the commitments between both entities, the terms of the agreement, if you will, in place.
That sounds like all agreements everywhere, but governments, by definition, cannot and should not act like single individual contractors, the Town and amici argued.
At the heart of this argument is the issue of accountability.
“The (Bridgeport) jury did not understand that the staff of cities and counties cannot bind a government to an action,” said Mammoth Lakes’ new Town attorney, Andrew Morris.
“Only the Town government (in this case the Town council) can do that.”
Since the Town council never did actually vote to deny Ballas’ project outright, Morris said he believes, as the cities and counties all argued, that the Town is not liable for damages.
“A Development Agreement doesn’t obligate the government to approve a project, it simply sets the terms of the project, then sends it out for a final decision,” he said.
Town manager Rob Clark agrees.
“Can the developer take the Town to court without first taking the project to Planning Commission and Town Council,” he asked.
“They claim that an application would be futile, but until they make an application and it is denied, they do not know that. I am sure if they had made an application it would have been approved,” he said.
But with Ballas, then later the Mammoth Lakes Land Aquisition LLC group that bought the development rights from him, they didn’t take their application all the way to the Town Planning Commission and then to the Town Council, he said.
Instead, the group “anticipated” the Town would deny the application when it did get to the final decision point. Hence the lawsuit against the Town, he said.
The amici curiae agreed.
“The case concerns a developer’s assertion that an e-mail communication from a Town official (not a Town council decision) during the preliminary processing of a project application constituted” denying the project overall, it states.
Worse, after taking the Town to court for something it cannot be held liable for, according to the Town and other cities, it then got sued for damages.
And that’s the essence of the reason cities and counties are now waiting with bated breath to see what happens next.
“The court’s decision, if upheld, stands likely to render development agreements too risky for local agencies,” the amici brief states.
So, if misery likes company, Mammoth’s got a whole lot of it right now.

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