Lawsuits keep Santa Monica in the national spotlight City not intent on settling City plays defense in public spotlight
Imagine a target painted on Santa Monica’s City Hall and an invitation to all the town’s attorneys to a party there. That might still not explain the number of lawsuits filed against it.
Known for its deep pockets and its controversial, and often times highly public battles, Santa Monica is a target for hundreds of lawsuits each year. To combat them, there is an arsenal of attorneys who sit on the top floor of City Hall ready to battle them all.
Santa Monica has not only an unusually large flock of attorneys, but also an extraordinarily high number of claims against it.
The Santa Monica city attorney’s office has an annual budget of $5 million. Most of it pays for its 23 lawyers and 19 support staffers. There also is an entire department dedicated to investigating the 600 claims that are filed against the city each year. About 140 end up as lawsuits, said City Attorney Marsha Moutrie. And on any given year, the city pays out about $1.5 million in settlements.
But that’s not to say the city doesn’t have a good track record in court. Santa Monica is known for not backing down and it won’t settle a lawsuit just because of its nuisance value. However, its sometimes rigorous defense policies translate into high attorney fees that ultimately come out of taxpayers’ pockets.
Some say Santa Monica’s $375 million budget and strong financial condition are the main reasons why it’s such a target for lawyers. Others argue that because it’s a tourist destination where the population swells from 84,000 to 350,000 during the day, Santa Monica provides so many different services that statistically the chances are greater for litigation against it.
Throw in the fact that Santa Monica sits in one of the most litigious counties in the country and it becomes a hotbed for lawyers salivating to collect fees from relatively minor slip and fall cases and auto accidents, officials say.
Many of the claims are groundless but lawyers file suit anyway in an attempt to collect attorney fees. But what they find is that it’s not that easy to win a suit in Santa Monica.
“We are presumed to be a deeper pocket than the insurer,” Moutrie said. “A lot of litigators will sign clients on with the intent on settling but we defend the city rigorously so we don’t appear as a target.”
She added that the lawyers she oversees are experienced and are trained to avoid backing down on threats.
“We actually think that keeps the number of cases down,” Moutrie said.
And as the city continues to grow and expand its services like owning and operating its own bus system, airport, pier and beachfront, the city opens itself up to more liability.
“Public works are a perfect example of the more you do, the more you get sued,” said Moutrie, who cited a lawsuit filed by homeowners along the Pacific Coast Highway as an example. The homeowners, not happy with months of construction outside their front doors and the traffic problems created by it, sued the city and state in 1999, alleging the city’s sewer replacement project violated the state’s environmental quality act. The sewer project is now complete and the suit most likely will be dropped. But it’s still pending. A judge recently ruled that the city must pay some of the homeowners’ attorney fees. But they asked for $48,000 and got $18,000.
Out of the hundreds of claims against the city, an average of five suits end up at trial each year. This year, about 10 trials are likely. While the number of actual lawsuits fluctuates between 90 and 140 a year, the number of suits that could potentially cost the city more than $100,000 has increased, Moutrie said.
And the number of claims filed in the past few years has increased by about 100, said Tom Phillips, who heads up the city’s risk management department.
A majority of the 100 pending suits against the city involve bus and auto accidents. There are only about a dozen lawsuits over $15,000 apiece that the city council actually settles in a year. Anything under that amount can be approved without council consent by the city attorney’s office and the risk management department. On any given year, the total pay-out ranges from $1 million to $1.5 million.
“One case in and of itself could skew the numbers,” Phillips said, adding there are currently about 470 open claims against the city. “If we are wrong, we’ll pay it. We try to be pragmatic. There is no agenda here not to pay the suits.
“If we are wrong, we’ll pay it. We try to be pragmatic. There is no agenda here not to pay the suits.”
“If we get 600 claims we don’t settle on 300 of them, I can tell you that but it’s not that we shy away from responsibilities either,” he added. “But the majority of the cases involved don’t get settled.”
The largest pay-out last year was the $825,000 settlement which went to the family of a man who drowned in the municipal swimming pool a few years ago. Moutrie said the city attorney’s office made an assessment of the case and its chances of winning in front of a jury. Fearing the jury might be sympathetic to the victim’s family, the city chose to cut its losses.
“We take the circumstances of the case including how sympathetic the situation will be to a jury because we are constantly mindful of reserving public resources,” Moutrie said.
The city last year also paid $425,000 to the family of a man who was shot in the leg during a police shoot-out with Los Angeles gang members at the Santa Monica pier on July 4, 2000. Police were attempting to arrest two felons on the pier near the arcade. The victim, who was not involved in the incident, ran from the arcade in an attempt to get out of harm’s way. He fit the description of one of the suspects and police shot him by mistake.
While the smaller suits, which are the most common, don’t get much play in public, the more bizarre ones appear to make up for it. Santa Monica routinely finds itself in national battles that wind up in the spotlight largely because the majority of politicians won’t back down on policies in which they believe. They also are the cases that usually end up at trial.
Those cases aren’t so much about financial gain as they are about fundamental rights — whether they’re civil, constitutional, property or land use. And while there may be no payment to plaintiffs, the cases can end up costing the city hundreds of thousands of dollars to defend them.
“Those are more about whether or not you can do it or can’t do it,” Moutrie said.
Ironically, as a city known for its liberal governance and protecting Constitutional freedoms, Santa Monica is sued frequently by citizens who claim their constitutional and first amendment rights are being squashed by local government regulations. Street performers like Henna artist Luke Chanthadara sue the city often, arguing they have a right to express their first amendment rights despite city council bans on certain performances.
Take David Busch, a homeless man who is suing the city. He says his civil rights were violated when he was arrested for “camping” on a sidewalk June 1, 2001. It’s illegal to camp on public property in Santa Monica, but perhaps not to just snack there. Busch maintains he was merely sitting on the sidewalk outside of a homeless shelter eating a muffin.
Then there are the cases that critics say the city council brings on itself. In 1999, the city took on the banking industry by trying to eliminate exorbitant ATM fees. The consumer protection division in the city attorney’s office has been fighting US Bank and Wells Fargo for more than three years, and was joined by the City of San Francisco. The case is currently in the Federal Court of Appeals awaiting a decision.
In July 2000, U.S. District Judge Vaughn Walker in San Francisco struck down the two ATM fee bans after Bank of America, along with other California banks, sued to get them overturned. Santa Monica was the first city to enact the ban on what officials — and many consumers — regard as “double dipping” by banks.
City Councilman Kevin McKeown brought the issue to the forefront after he realized he was charged twice when he used ATM machines in San Francisco’s Chinatown. It irked him enough to bring the issue to the council, where the ban passed 4-3 in October of 1999. The council felt banks who allowed customers to be charged twice were ripping them off.
“We were told, ‘this is a slam dunk case’ but we are still in court,” said City Councilman Bob Holbrook.
The banks claim federal law gives an obscure federal agency the sole power to regulate such fees.
Then there’s the suit brought against the city by Dr. David Levy, who has been legally fighting the city over his son’s playhouse in their Sunset Park backyard.
The Levys’ backyard neighbor, Tunde Garai, complained to then-Mayor Ken Genser that the family’s playhouse for their son, Jacob, was too big and violated city zoning laws. Dr. Levy claims that Genser ordered city staff to reverse its decision that the playhouse was legal after he received Garai’s complaint.
The Levys’ suit, filed in September 2000, says the city first decided the playhouse was a legal one-story structure. A planning official later determined the elevated playhouse was two stories instead. Dr. Levy sued rather than comply with a city order to tear it down. The city offered to let the playhouse stay if Levy agreed it wasn’t technically legal. Levy refused.
Holbrook thinks the case should have been settled long ago.
“I see things in black and white and gray while my colleagues sometimes see things only in black and white,” he said. “You have to weigh the risks of each battle and we need to pick our battles better,” he added. “The attorney fees for these cases is outrageous. I have a sense that some people view city money as monopoly money — it’s not real money.”
“The attorney fees for these cases is outrageous. I have a sense that some people view city money as monopoly money — it’s not real money.” — — TOM PHILLIPS City’s risk manager — BOB HOLBROOK Santa Monica City Councilman
Genser has served on the city council for 14 years. He said the lion’s share of lawsuits against City Hall don’t arise out of its policies.
“We certainly do what we can to discourage them and when they are frivolous we don’t settle them,” he said, adding some lawyers make it their specialty to take on municipalities. One firm in particular — Harding, Larmore, Kutcher & Kozal — has represented many clients in land use and property rights battles against the city. Some think the firm serves as a watchdog on local government. They point to Dr. Levy, who was never involved in local politics until the playhouse debacle unfolded.
“This is a city that has people waiting in the wings to sue us,” Genser said, adding that because the city has a good portion of rent-control apartments and affordable housing, the stakes are even higher for developers who don’t hesitate to sue.
“This is a city that has people waiting in the wings to sue us.” — — KEN GENSER Santa Monica City Councilman
“There are a lot of people who think there is money to be made by evicting people and rebuild their apartments into luxury condominiums,” Genser said.
Holbrook cited another case which cost the city $278,700 in attorney fees against the Jack in the Box fast food restaurant chain. Holbrook said the suit should have been filed by the angry neighbors living near the restaurant, who claimed that the drive-up window was a nuisance to their lives.
But the city got involved, claiming an ordinance prevented the restaurant from operating a drive-up window from 10 p.m. to 7 a.m. Jack in the Box officials said they had a pre-existing right to operate during that time. When the trial court ruled that the city’s ordinance was unconstitutional, the city settled.
“The council’s objective was to get the night hours reduced, which happened,” Moutrie said, adding that it’s another example of why the city gets sued so much. “Santa Monica has commercial uses and residential uses right next to each other all over the city. We are doing a lot of things in a small space.”
The case is a classic example of of how a dispute landed in the courtroom even though elected officials ignored the advice from city attorneys to not engage in the battle — another reason Santa Monica finds itself a target for litigation, some argue.
“We could have bought five Jack in the Boxes for the time and energy spent on it,” Holbrook said. “The council said ‘let’s take it on’ even though the city attorney’s office advised us not to. It cost us a fortune and we accomplished hardly anything.”
Originally published in the Santa Monica Daily Press print edition on September 17, 2002. Read the original PDF.