Los Angeles County's Board of Supervisors' Illegal Bonus Payments to Superior Court Judges Have Cost Taxpayers

Almost $1 Billion Dollars (Known, So Far), Illegally Enriched Developers, And Blatantly Trampled The People's Rights

Prologue:

      How much lower might your own tax bills have otherwise been for the past twenty years?  Would there even be a budget crisis in California today, were it not for greedy and corrupt actors whose tentacles extend to the top branches of California's government and judicial system?  

     One man's gutsy refusal to cower in fear and grovel in acceptance has exposed the tip of an iceberg that the powerful have battled viciously to keep below the public's radar.  Now, as millions in ill-gotten gains hang in the balance, our hero is thrown into solitary confinement in, literally, the worst jail in all America ... Los Angeles County's Men's Central.

    Then, from out of nowhere, a miracle!  Then two!

    Now the guilty scurry for cover following a favorable US Supreme Court opinion just issued in a similar case, and the groans of owners of erupting ulcers echo far and wide as Lady Justice's promise of consequences comes 'round to bear. 

      This is a true story ... wrapped up in one man's personal nightmare.

"Ask not what your country can do for you.  Ask what you can do for your country."  --  President John F. Kennedy

 

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"A biased proceeding is not a procedurally adequate one.  At a minimum, Due Process requires a hearing before an impartial tribunal.  [Case citation(s) omitted.] This impartial tribunal requirement applies in both civil and criminal cases.  Indeed, the requirement that proceedings which adjudicate individuals' interests in life, liberty, or property be free from bias and partiality has been "jealously guarded."  [Citation(s) omitted.]  Thus, this neutrality principle has been applied to a variety of settings, including administrative adjudications, in order to protect the "independent constitutional interest in fair adjudicative procedure."  And, it has been invoked in the context of post-termination administrative proceedings.  [Cite]  (failure to provide impartial decision maker at the post-termination hearing constitutes constitutional error).  Moreover, any bias in the administrative process in [the] case was not "cured" by the subsequent judicial review in state court."

"Generally, an adjudication that is tainted by bias can not be constitutionally redeemed by review in an unbiased tribunal.  [Cite]  ...

"Nor, in any event, may the State's trial court procedure be deemed constitutionally acceptable simply because the State eventually offers a defendant an impartial adjudication.  Petitioner is entitled to a neutral and detached judge in the first instance.  Ward holds that subsequent state court procedures, even if they include de novo review, can not "cure" bias in the initial adjudication. ... The right to procedural due process is 'absolute,' and 'the law recognizes the importance to organized society that those rights be scrupulously observed.'"  (Emphasis added.)

Clements v. Airport Authority of Washoe County (69 F.3d 321 (9th Cir. 1995)).

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March 3, 2009

 

    Since the late 1980s, the Los Angeles County Board of Supervisors, acting on behalf of Los Angeles County, has illegally paid huge (over 25%) illegal bonuses to Los Angeles County Superior Court judges (now  totaling about $57,000 per year each, on top of their already overly-generous state compensation) "to attract and retain quality judges to serve in [Los Angeles] county," giving each judge total compensation worth more than a quarter of a million dollars ($260,000+) each year, in flagrant violation of California's Constitution, which defines such judges as elected employees who are to be compensated only by the State.  (By comparison, the highest ranking judge in all America, the Chief Justice of the U.S. Supreme Court, makes only $218,000 yearly, and Federal District Judges receive only $157.000.)

    The Supervisor's stated justifications for awarding the bonuses, "to attract and retain quality judges" is nonsensical.  There is no need to "attract" judges; thousands of attorneys would eagerly take any judicial opening, gladly accepting far less as a salary just because they would be honored to hold the position and serve the County's citizens.  "Retaining" judges is an even worse argument; judges are elected, the only way to use money to “retain” them would be to contribute to their re-election campaigns, an illegal use of taxpayers' funds.

    As of 2009, Los Angeles County taxpayers have lost over $300 million dollars footing the costs of these judges’ bonuses.

    What were the Supervisors’ true motives?  Did the judges do anything improper for the County in exchange? 

    In analyzing the cost of the County's losses when it is sued, the County attorney’s “Annual Litigation Cost Report” for the year 2007-2008 begins with the statement that “attorney fees and costs reached a five-year low … and were down 13 percent as compared to last year.   …  Meanwhile, the County was sued with increasing frequency – up 10 percent over last year.”  The County reported that it prevailed in nearly two-thirds of its trials, and received favorable decisions in over 90 percent of its appeals.  (Actual statistics were:  25 total cases tried in which the County was a defendant, of which it scored 16 wins, 7 losses, and 2 trials resulting in hung juries.)  (Link)

"Their statistics showed that 670 new cases were filed in fiscal year 2007, and 261 dismissals occurred based upon favorable rulings for the County.  This is approximately 39%.  The October 3, 2007, letter did not state the ratio of filed cases to dismissals for non-LA County cases.  Los Angeles County took 24 cases to trial and prevailed in 15.  Five were defense [jury] verdicts. This shows that 10 defense decisions were done by the LA Superior Court judges. This is over 41%. These are more cases decided by judges against the plaintiffs than the 9 cases the plaintiffs won at trial before a jury.  It appears the plaintiffs did not win any cases before a judge."

    Has the world gone mad?  Is it, or is it not, improper for a judge to accept a large sum of money from a litigant who is before him in numerous cases.  And if you found that the judge consistently ruled in favor of that party?  Richard Fine took the obvious position that "yes," it's most certainly improper ... and so his troubles began.

    Mr. Fine, an almost 70-year-old attorney with a long and very distinguished career as the one-time head of the Los Angeles City Attorney’s anti-trust unit and counsel for plaintiffs in a number of highly publicized class actions and taxpayer lawsuits, a man who has saved California taxpayers almost $1 billion dollars so far, found himself jailed on trumped-up contempt charges on March 4, 2009, at the end of a running clash with certain judges since 1999 who refuse to concede the impropriety of their  appearance of bias when deciding cases concerning the County at the same time they were receiving hefty payments from the County (who isn't their employer). 

In fear of losing this lucrative addition to their paychecks, and possibly even face having to repay huge sums, a few judges are attempting to silence Mr. Fine and force him to abandon his rights and give up this battle against judicial corruption (recently confirmed by California’s Court of Appeals, as explained below) in exchange for his freedom.  Even worse, one of them actually made off with about $2 million dollars from one of Mr. Fine’s class action settlement funds, some of which, it had been agreed, was intended to repay Mr. Fine for his years of work on the case.  Unfortunately, judges have all the power … and they have closed ranks in protecting themselves and their ill-gotten gains.

    Mr. Fine remains in jail as you read this, for more than 100 days so far, in solitary confinement in the "worst" jail in all America, LA County Men's Central Jail downtown, according to an ACLU investigation and report (Link).  Although deprived access to simple pen and paper needed to prepare legal documents to contest his confinement, Mr. Fine is now being aided by a few former-strangers with equal determination to do everything within their means to expose these activities to the public scorn they so richly deserve, and the fight is on to obtain well-deserved justice for him.  Meanwhile, Mr. Fine is being prevented from earning an income, resulting in extreme financial damage and hardship to his family.

    Mr. Fine’s record was impeccable prior to this clash; now his reputation and livelihood hang in the balance.

Approximately $1 Billion Dollars In Taxpayer Monies Have Been Recaptured by Richard Fine

As A Result Of Lawsuits He Successfully Prosecuted On Behalf Of Various California Taxpayers.

 

    Richard Fine has always striven to represent the positive ideals of the legal profession.  A 1964 graduate of the University of Chicago Law School with a Ph.D. in international law from the London School of Economics and Political Science (1967), he has worked for the anti-trust division of the U.S. Department of Justice (1968-1972), and founded, in Los Angeles, the very first municipal anti-trust division in the United States.

 

    Mr. Fine brought the suit to return approximately $71 million plus interest from the Insurance Reserve Fund which had been transferred to other funds by the State of California Dept. of Veterans Affairs, resulting in a 500% increase in insurance premiums for veterans who have Cal Vet mortgages, in the case of Debbs et al, v. Dept. of Veterans Affairs.

   Since 1993, Richard Fine has returned approximately $350 million dollars to California taxpayers which state, county and municipal governments had unlawfully taken from “special funds” and  “trust funds,” in a series of taxpayer cases, beginning with Malibu Video v. Wilson, filed in Federal court and California state courts.  He was also responsible for the return of $6 million to the Tidelands Trust Fund, and prevented approximately $350 million from being unlawfully spent from the Tidelands Trust Fund, in a series of cases against California cities and ports, commencing with the case of Veltman v. City of Los Angeles.  Mr. Fine’s work also caused money to be returned to small and minority businesses who were not paid during California’s “budget crises” in the class action case of Lido v. State of California.

 

    In 1996, Mr. Fine was able to force the City of Los Angeles to repair its method of calculating sewer service charges, saving residents tens of millions of dollars per year, in the class action case of Shinkle v. City of Los Angeles.

 

    In May, 1999, in the taxpayer case of Amjadi and LACAOEHS v. LA Board of Supervisors, Richard Fine was successful in making Los Angeles County create a special environmental inspection fee fund from the $11 million dollars it had wrongfully deposited into its General Fund (meaning special funds were being used for the wrong purposes), and to freeze environmental inspection fees until the $11 million dollars was spent, then to deposit approximately $40 million dollars a year in replacement fees annually into the “special fund” for the indefinite future. The income to taxpayers in the special fund since 1999 amounted to over $400 million dollars, and is growing by over $40 million dollars each year. 

    Mr. Fine has written on legal matters, been active in bar association activities, and changed the rights of Americans in many positive ways through the cases he has brought and fought.  For example, the result of one lawsuit was to require United Way to allow donors to designate where their contributions should go instead of United Way's officers spending donations however they pleased.  Mr. Fine has saved California residents over one billions in money illegally taken by state, county and city governments.  He stopped California's government from illegally making payments when it did not have a budget.  He reorganized the California consumer industry when the state did not enforce consumer law.  He brought the first case involving a terrorist shooting and killing at a U.S. airport (LAX).  He wrote two extensive anti-trust amicus (friend of the court) briefs in cases which prevailed in the U.S. Supreme Court.  He brought and tried the case against OPEC, alleging price-fixing.

    Some of Mr. Fine’s other noteworthy cases from times past include:

Before the California Supreme Court:

Howard Jarvis Taxpayers Association v. Connell; White v. Davis:  Taxpayer lawsuits to declare unconstitutional the state of California's expenditure of monies without a budget or an emergency appropriation.  The trial court granted a temporary restraining order and a preliminary injunction.  The California Supreme Court held that the State cannot expend monies without an appropriation.

Before the United States Supreme Court:

Eastman Kodak Company v. Image Technical Services, Inc.:  Represented the California State Electronics Association and approximately 60 other state associations, national associations and companies as amicus curiae in a landmark tying arrangement and monopoly case. The Supreme Court decided in favor of the brief, thereby preserving the U.S. Service industry by keeping jobs and reducing the balance of payments.

Hartford Fire Insurance Co. v. State of California:  Represented the Service Industry Council and the California State Electronics Association as Amicus Curiae in a major international insurance boycott case which caused the premiums for commercial general liability insurance for all businesses in the United States to triple. The Supreme Court decided in favor of Fine’s Brief.

Before Federal and State Courts:

AID v. United Way:  Lawsuit by “Associated In-Group Donors,” a large donor-oriented charity in Los Angeles County, against United Way for breach of charitable trust, anti-competitive activities, and unfair competition for United Way's anti-competitive conduct and attempt to drive AID out of the charitable business and monopolize same for United Way; represented AID and obtained a stipulated judgment against United Way; effect of the judgment is to prevent the United Way from engaging in unfair business practices and allowing the public to designate the recipient when they give money to United Way.

IAM v. OPEC:  Lawsuit by the International Association of Machinists against the Organization of Petroleum Exporting Companies and its members for price-fixing of oil imported into the United States; brought the case on behalf of the IAM; at the trial, was appointed by the Trial Judge to be lead counsel and try the case; the Trial Court held that OPEC's activities were acts of sovereign nations and not commercial; the Ninth Circuit held that OPEC's activities may be price-fixing but are protected under the Act of State Doctrine; the political effect of the case was to restrain the price-fixing activities of the OPEC nations.

 

RP Foundation v. RP:  Lawsuit by the Retinitis Pigmentosa Foundation in Baltimore against Retinitis Pigmentosa Los Angeles; cross-complaint by RPLA for breach of charitable trust, unfair competition, anti-competitive actions and attempting to drive RPLA out of the charity business; represented RPLA; settled the case by severing RPLA from the RP Foundation, and founding RP International.

 

Republic of the Gambia v. United States of America:  Intervention by the Republic of the Gambia in the lawsuit of entitled United States of America v. Sissoko to assert diplomatic immunity, which was not asserted by Sissoko's attorneys. Trial court adopted the Gambia's interpretation of the Vienna Convention on Diplomatic Relations (of 1963).

Fleeger v. Caesars Palace:  The lead case in a series of cases filed against district attorneys and casinos in Nevada for prosecuting and jailing people who do not timely pay their "markers."

Howser v. City of Long Beach and Cantrell v. City of Long Beach:  Brought and litigated cases to preserve the Long Beach Naval Station.

MacNoye v. MCO:  Suit to compensate purchasers of land in Lake Havasu, Arizona, from MCO.  Case settled for approximately $6 million with the estblishment of a bridge authority to build a much-needed second bridge in the community, the first time a settlement used its monies for the "public good."

    Mr. Fine has successfully represented many clients in the antitrust, constitutional, charitable trust and government abuse-of-power fields, in addition to being involved in class action, securities and environmental suits and other suits engendering "public interset."  Mr. Fine also has experience with mergers and acquisitions, real estate matters, alternate energy power plants, business matters, entertainment matters, criminal matters, family matters, international matters and unfair competition matters, amongst others.

    In partial recognition of his many achievements, Mr. Fine has served as honorary Consul General of the Kingdom of Norway in Los Angeles since 1995, and for various counties in Southern California. 

 

 EVERYTHING YOU NEVER WANTED TO KNOW ABOUT LOS ANGELES COUNTY'S CORRUPT DEVELOPERS, SUPERVISORS AND JUDGES

    From the outset, the Superior Court judges in Los Angeles County knew that the bonus payments were illegal (explained below), yet they continued to accept them and, in direct conflicts of interest and bias, did not disclose them to parties in cases in which the County of Los Angeles was involved.  Mr. Fine was also literally robbed of millions in attorney's fees he’d rightfully earned as certain judges, identified below, pulled out all the stops in their efforts to stop him from publicly revealing judicial corruption, and their probable loss of the lucrative bonuses.

    On November 10,1988, Los Angeles County’s attorney to Frank S. Zolin, the County Clerk/Executive Officer of the Superior Court, issued a Memorandum stating that Los Angeles County had decided to pay LA Superior Court judges "local judicial benefits" consisting of "MegaFlex cafeteria benefits" [with an income value equal to 19% of the judge's salary], a "professional development allowance", and a 401(k) match "to attract and retain quality judges to serve in [LA] county."

    In 1997, the Lockyer-Isenberg Trial Court Funding Act declared that the State is solely responsible for trial court funding, to remove the differences in compensation received by judges in different counties.  (Link)

    1997-1998 - A "deal" was struck between judges and the California Legislature:

"[T]he California Legislature promised its continued support of local judicial benefits in return for judges' support of the 1997 Trial Court Funding Act and of the 1998 Trial Court Unification Act."  (Link)

 

    The payments made to judges weren't noticeable to the people of Los Angeles County, yet their cumulative effects have permeated our political and judicial systems to the extent that the people's fundamental constitutional rights have been tremendously compromised.  Equally as bad, taxpayers have unwittingly been forced to bear the costs of the judges' bonuses (update: now about $57,000 per year, times 429 judges, equals a loss to taxpayers of approximately $24.453 million this year, on top of the judges' $87 million in legal salary and benefits packages), generously lining developers' pockets, and making up for all the lost revenue by paying even higher taxes (over $300 million for judges' bonuses alone, so far).

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    A well-traveled “money trail” exists between Los Angeles County, whose Supervisors authorized the bonus payments, and the judges [present and past] who decide cases in favor of the County.

    A second well-traveled money trail links political contributors [often made by developers] who give contributions to members of the Los Angeles County Board of Supervisors for their election campaigns [who then make decisions in contributors' favor] who make County payments to judges who decide cases in favor of the County [and the developers who are co-parties with the County].

    These activities have cost taxpayers approximately $1 billion dollars in lost income from Marina del Rey alone.  (Lost taxpayer income, of course, means increases in taxes to citizens.)  Add to this the individual financial cost of the cases involving children where the County is involved, cases where homeowners and the County are involved, eminent domain cases, and all other cases where the County or one of its agencies is involved, and the cost to taxpayers is astronomical.

    In the meantime, taxpayers have found themselves financing two judicial systems: one benefits certain Supervisors and their friends, and other is what the rest of us are stuck with.

    This is the story of how we, the people of Los Angeles County, lost our freedom, and the ten-year battle of Richard I. Fine, sometimes called a “crusader” or the “taxpayer advocate”, to restore our constitutional rights and bring the control of government and the judicial system back to the people by challenging the wrongdoing of the entrenched powers of Los Angeles County's Board of Supervisors, Marina del Rey developers, and the Los Angeles County Superior Court judges.

    John Rizzo, President of the Marina Tenants Association and a class representative in one of the taxpayer class action lawsuits filed against Los Angeles County and the Marina del Rey developers discussed below, stated: “After 33 years of fighting the corruption in Marina del Rey between the lessee developers and the Los Angeles County Board of Supervisors, and then fighting the judges of the Los Angeles County Superior Court, I am hopeful that finally the problems will now be resolved and the people will receive justice.”

 

"One man with courage makes a majority."  ~  Andrew Jackson

LESLIE DUTTON, FULL DISCLOSURE NETWORK: "Tell us how this all started?"

RICHARD FINE:  "It started back in 1999, when I brought a lawsuit called John Silva vs. Gil Garcetti — the Los Angeles District Attorney. And that lawsuit was based upon the fact that John Silva had paid money as part of his divorce — child support money --- into the County of Los Angeles because the County of Los Angeles, as you know, collects child support money. Now, what we found out is that he had paid his child support money in, but the child support money wasn't going to his wife. The County was not distributing it.  And the County wasn't distributing about $14 million of child support money.  The County was taking this money in and holding it.  Now, there's a law that says that the County must distribute the child support money within six months or give it back to the father.  And they will only give it back to the father if they can't find the wife or the children.  In John's case, he knew where his wife was, and he knew where the children were, because his wife was friendly.  His wife knew that the money was going in, so she was cooperating with us, and we found out that all these other women and children were not getting their money."

"So I sued the County to have this money distributed.  The County answered and told me how much money was there, where the accounts were.  All they had to do was distribute it.  They were refusing to do it. I went into court, and we got to the end of the trial.  The County moved to dismiss, and the judge dismissed the case. And I was astounded.  And I went up into the appeal, and after the trial was over and before I filed my first brief, I found out that the judge, Judge James C. Chalfant, had received money from the County of Los Angeles. That's how it started."

"The second case was when the County of Los Angeles took money from the environmental fees fund, a case called Amjadi and Lacaoehs vs. The Board of Supervisors of The County of Los Angeles.  I was brought into that case after it had been going on for awhile to get that money out of the general fund of the County of Los Angeles and into a special fund.  And I won that. I got the special fund established.  I got $11 million that they still had in the general fund put into the special fund.  I got the fees frozen for three years until that $11 million was used up, and then when it came time to get the attorney's fees, Judge Kurt Lewin, who was the judge in the case, refused to award the attorney's fees, saying that I was representing a County union, and unions shouldn't sue the County.  And in addition to that, that unions were always in negotiations with the County for wages.  And therefore what the union was really doing, had really brought the case, not to help the public, but really for its own benefit.  Well, I also found out that Judge Lewin was getting money from the County.  And to pay the attorney's fees, the attorney's fees would be coming out of these funds, which were County funds."

I.  The Money Trail Between Marina del Rey Developers, County Supervisors, and Superior Court Judges, and Their Decisions Favoring the County and the Developers.

    As of 1995, according to campaign contribution reports, contributions from “developers” to whom LA County leased land in Marina del Rey (in which case the developers are called "lessees") to the campaigns of certain Supervisors were approximately $600,000 for the past several years.  During 2000 through 2005, lessees in the Marina spent more than $763,000 lobbying Supervisors (approximately $663,000) and making contributions to the campaigns of Supervisors (approximately $100,000, with more than $41,000  of it contributed to Supervisor Don Knabe, whose district includes Marina del Rey).

    Political campaign contributions to Supervisors have resulted in illegal approvals of multi-million-dollar projects in Marina del Rey.

    In 2007, contributions to Supervisors Michael Antonovich and Don Knabe from Marina developers Del Rey Shores Joint Venture and Del Rey Shores Joint Venture North (two business entities hereinafter collectively referred to as "Del Rey Shores") through Jerry B. Epstein, the Epstein Family Trust, Pat T. Epstein and the Epsteins' chief of staff, David O. Levine, in April 2007, within six weeks of the vote of approval of the Environmental Impact Report (the "EIR") for the Del Rey Shores Project for the redevelopment of a 202-unit apartment complex into a 544-unit complex with 1,088 parking spaces, resulted in illegal votes being cast by Supervisors Antonovich and Knabe in favor of these developers on May 15, 2007.  This was a blatant violation of the Political Reform Act, which forbids contributions being given and votes being case in the same time period, and was duly reported to the Fair Political Practices Commission.  (According to the Minutes of the September 13, 2006, Small Craft Harbor Commission Meeting, at page 6, David Levine, who made the application for the project, also represents himself as a representative of the Marina del Rey Lessees Association.)

    In 2008, contributions to Supervisors Antonovich, Knabe and Gloria Molina from Del Rey Shores through Jerry B. Epstein (contributions made 8/14/08 and 10/8/08), David O. Levine (8/15/08 and 10/08/08) and Marina Properties (3/18/08) (an entity controlled by Jerry Epstein) within one year of the vote of the approval of the recirculated EIR for the Del Rey Shores Project resulted in illegal votes in favor of Del Rey Shores by Supervisors Antonovich and Knabe on May 15, 2007.  This violation of the Political Reform Act was also reported to the Fair Political Practices Commission.

    A crystal clear effect of the County payments to the judges was that rulings by the judges were made in favor of the County and the developers, every instance of which was an unconstitutional act.  Instead, the judges should have immediately disqualified themselves from sitting on cases involving any activities of Los Angeles County.

    Judge Soussan G. Bruguera, who freely admitted to receiving the payments, improperly dismissed four lawsuits against the County and Marina developers, costing taxpayers approximately $700 million dollars in lost income from undervalued leases, plus lost payment for “lease renewals” worth approximately $70 million dollars in two of the four cases, and hundreds of millions of dollars for all of the “lease renewals” in Marina del Rey.

    Judge David P. Yaffe, who freely admitted receiving such payments, did not address the loss of income to the County as shown in the Del Rey Shores EIR and cost taxpayers tens of millions of dollars as a direct result.

    The influence of the money trail has even extended to the California State Bar, the entity which governs attorneys and judges.  Sheldon H. Sloan, a lawyer for the Epstein Family Trust, Jerry B. Epstein and Pat Epstein, was the President of the State Bar and a member of its Board of Governors.  Jeffrey Bleich, a partner in the lawfirm of Munger, Tolles & Olson [which represents the County in its negotiations of the "Option For and Amended and Restated Lease" with Del Rey Shores] was the successor President of the State Bar and also a member of its Board of Governors.  Both Sloan and his client, and LA County, the client of the lawfirm Munger, Tolles & Olson, benefited by the State Bar prosecuting Richard I. Fine, their “current” opposing counsel in cases and matters relating to the County and developers Marina Pacific Associates and Del Rey Shores.

    Laura Chick, present Los Angeles City Controller (and former City Councilperson involved in one of the cases in the State Bar case against Richard Fine, discussed below), who allowed a $5,000 “behest” to be given in her name on June 6, 2007, by the lawfirm of Latham & Watkins, which was the lobbyist for Playa Capital Co., Ltd., the day after she released a favorable “audit” for Playa Capital Co., and prior to her August 7, 2007, response to LA City comments on the “audit,” is also on the State Bar’s Board of Governors.  She benefited by the State Bar's prosecution of Richard I. Fine, who had charged her with ethical violations for allowing the behest.

    The State Bar Court “judge” hearing the case against Richard Fine, Richard A. Honn, had a conflict of interest requiring his disqualification.  He sits on the Board of Governors of the Southern California Special Olympics with Gerald Hime of the County Office of Education.  LA County donated two payments of $15,000 each to the Special Olympics (July 1, 2005, January 18, 2008).  Vincent H. Herron, another attorney employed by Latham & Watkins, who gave the $5,000 “behest” with the approval of Laura Chick, is a member of the Board of Directors.

    State Bar Hearing Department Judge Patrice E. McElroy, the Hearing Department judge who, when appealed to, refused to disqualify Judge Honn, did not disclose that she was a member of the Board of Directors of the San Francisco Child Abuse Prevention Center, that Jerry Roth of the lawfirm of Munger, Tolles & Olson LLP is also a member of the Board of Directors, that the President of the State Bar as of September 29, 2007, (succeeding Sheldon H. Sloan) is Jeffrey Bleich, who is also a partner of Munger, Tolles & Olson (San Francisco office), and that Campaign Contribution Records obtained from the Los Angeles Times showed that Munger, Tolles & Olson attorneys contributed $14,250 to LA County Supervisors Antonovich, Burke, Molina and Yaroslavsky from 2001-2005, demonstrating an interest in the County of Los Angeles beyond the ordinary citizen.  She also did not disclose that the “Option” and draft “Amended and Restated Lease” between the County of Los Angeles and Del Rey Shores shows “Approved as to Form” by Munger, Tolles and Olson on behalf of the County of Los Angeles.

 

II.  The Effect on the Judicial System of the County's Payments, by its Supervisors, to the Judges.

    Whether deliberate or subconscious, the very real bias created by the payments has permeated the judicial system and greatly undermined citizens' Constitutional rights to petition the government to redress grievances and to receive due process.

    Supervisors, on behalf of the County, have been paying judges what they've called “local judicial benefits” in addition to judges' State compensation since the late 1980s.  California judges in general receive a base salary and benefits, now $192,386 (Salary-$178,789 of that amount).  Los Angeles judges receive about $260,000 when the County's current bonus of about $57,000 is added.

    The County's payments to judges total approximately $21 million per year in addition to their current State salaries, giving them higher annual compensation than U.S. Supreme Court Associate Justices, who receive $217,000 annually, and even the Chief Justice himself, who receives $218,000 a year.

    LA County has paid the LA Superior Court judges over $300 million dollars in bonuses from the time the payments began in the late 1980s through the present.

    Rulings by judges in cases affecting income from County land leased to developers in Marina del Rey show that taxpayers have lost at least $700 million in income from the value of public land leased in Marina del Rey, and at least $70 million more in lost fees for lease renewals.

    This approximate $1 billion dollars is just what is already known; the as-yet-unrevealed remainder is almost certainly many billions of dollars higher.  Annual Litigation Reports from the LA County Counsel to the Board of Supervisors dated June 9, 2005, October 3, 2007, and October 1, 2008, show that in 2005, and during 2006-2007, no one won a case against Los Angeles County when a County Superior Court judge made the decision (as opposed to a jury trial, assuming a judge even lets a case go to trial). Calculations have not been made to determine the value of the cases against the County in which the plaintiffs were sent packing by a judge.

    Nor do statistics appear to exist to measure the losses, both financially and emotionally, in the child protective services cases or other cases where a County agency is a defendant or a party and a Superior Court judge has made a decision, or where a judge is sitting on a Board of a defendant before him who has received money from County taxpayers.

    Formal complaints were made to the U.S. Attorney General, asking him to impanel a federal grand jury in Los Angeles to investigate and prosecute any violations of law resulting from the County's payments to the judges, the judges' non-disclosure of their receipt of the payments (which would expose the conflict of interest), and other related violations, including but not limited to the violation of the “right to honest services” and possible mail fraud.

 

III.  The Supervisors and the Judges Were All Notified And Knew From the Beginning that the County's Payments to the Judges Were Unconstitutional and Would Double-Charge Taxpayers for the Same State Judicial Services Received by Other California Counties.

    A November 10, 1988, Memorandum from counsel to Frank S. Zolin, Executive Officer of the Superior Court, showed that Los Angeles County (by its Supervisors) had decided to pay Superior Court judges “local judicial benefits” consisting of “MegaFlex cafeteria benefits” (additional income equal to 19% of the judge’s salary), plus a “professional development allowance,” plus a 401(k) match “to attract and retain quality judges to serve in this [LA] county”.  Regardless of the names given to various parts of the bonuses, judges are allowed to take all of it in cash if they so choose.

    Supervisors and judges all knew that the County could not legally “attract and retain quality judges.”  Judges are elected officials, and payments to them are unconstitutional gifts of public funds to private individuals, which is prohibited by Article XVI, Section 6, of the California Constitution.

    The County also could not legally independently “compensate” judges.  The Supervisors and judges all knew from the 1988 Memorandum that Article VI, Section 19, of the California Constitution states that only the State Legislature could “prescribe” the compensation of the judges.  They knew that when only the State Legislature could “prescribe” something, this duty could not be delegated to anyone else.   And they knew that the California Attorney General had issued two opinions stating that counties could not treat judges as county employees for purposes of providing benefits beyond those provided statewide to all judges.  The 1988 Memorandum also acknowledged that judges were elected officials.

    The Supervisors and the judges also knew that Los Angeles County was a subdivision of the State of California whose property taxes were already being used to compensate judges as State employees, as determined by the State Legislature. They further knew that any additional payment by the County would effectively double-charge taxpayers for the same State judicial services received by other counties.

    Despite this knowledge among all concerned, the program was instituted.  In 1997, the Lockyer-Isenberg Trial Court Funding Act declared and confirmed that the State was solely responsible for trial court funding; the Act was created to remove the disparities in compensation received by judges in different counties.

 

IV.  Richard Fine Was the First Lawyer to Challenge the County's Payments to Judges (Which Have Now Officially Been Adjudged As Unconstitutional).

    Richard Fine was the first lawyer to challenge the payments to the Los Angeles County Superior Court judges. It happened in 2001, in an opening brief he filed in the case of Silva v. Garcetti (Cite). The case involved the County District Attorney’s Office’s refusal to follow the law and timely pay over the $14 million in support payments it had collected for women and children, or return the payments to the payers if the intended beneficiaries could not be found.  (Prior to Fine's suit on Mr. Silva's behalf, the County just deposited the monies and kept all the interest.) 

    Superior Court Judge James C. Chalfant dismissed the case (even though the County had testified that it had begun to pay out the overdue child and spousal support monies it had withheld, an admission that its prior withholding had been illegal).  After the case was over, Fine discovered that Judge Chalfant had been receiving monies from the County during the case and did not disclose it.  The issue of the payments to Judge Chalfant was then raised with the California Court of Appeal, which ruled, by its Justices Boren, Nott and Doi Todd, that it was too late to raise it.  The issues were then brought to the California Supreme Court, which refused to hear the case in May 2002.   Later in 2002, Fine discovered that Justice Todd of the California Court of Appeal, one of the justices who refused to consider the issue of payments to Judge Chalfant, had also received payments from Los Angeles County while she had been a Superior Court judge and did not disclose this fact during Fine's appeal; nor did the other appellate justices disclose that they also knew that Justice Todd had also received the payments.

    This challenge was followed by Fine's filing of two federal civil rights cases alleging that the payments violated Article VI, Section 19, of the California Constitution and the First and Fourteenth Amendments to the U.S. Constitution:  LACAOEHS v. County of Los Angeles and Kurt Lewin (Cite) in March, 2002 and John Silva v. County of Los Angeles, James C. Chalfant, Kathryn Doi Todd, Bruce E. Mitchell, Roger W. Boren, and Michael G. Nott (Cite) in June, 2002, respectively.  Both cases were dismissed, with the court remaining silent on the issue of the constitutionality of the payments.  (Judge Lewin, ruling in the County's interest where he could, refused to award Amjadi and LACAOEHS (a Los Angeles County union of environment inspectors) any attorney's fees, depriving Richard Fine payment for his years of work on this successful lawsuit.)

 

V.  The Los Angeles Superior Court Retaliated with State Bar Complaints and Contempt Charges.

A.  The Court Filed Two Complaints Against Fine With the State Bar.

    The State Bar's first retaliation against Fine, at the behest of certain Los Angeles County judges, occurred in its Case No. 00-O-10175 filed April 22, 2003, over a year after Fine filed the first federal civil rights case.  Los Angeles County Superior Court Presiding Judge James Basque was the “complainant” and Los Angeles County Superior Court Commissioner Bruce E. Mitchell, who had received payments from the County and was a defendant in the federal Silva case, were identified as witnesses.  Fine moved to dismiss the case on the eve of trial, and the State Bar responded by dismissing the case in the “furtherance of justice” on February 2, 2004.

    The second State Bar case, filed February 6, 2006, as Case No. 04-O-14366-RAH,  charged Fine with “moral turpitude” for bringing the LACAOEHS and Silva cases, and the related case of Fine v. Mitchell (Cite) filed in 2003, in addition to Fine's filed challenges against Commissioner Mitchell sitting as a “temporary judge,” Fine's two petitions for writs, Fine's one motion to amend a complaint, and Fine's appeal.  Commissioner Mitchell admitted to being the “complaining witness” in the State Bar case.

    Two months later, in April, 2006, Judicial Watch brought the case of Sturgeon v. County of Los Angeles (Cite).  On October 10, 2008, in an opinion modified November 7, 2008, the California Court of Appeal held that Los Angeles County's payments to Los Angeles Superior Court judges were indeed “unconstitutional” under Article VI, Section 19, of the California Constitution.  On December 23, 2008, the California Supreme Court denied review, meaning it did not disagree with the Court of Appeal's decision and would not overturn it, thereby making it law.

    The Sturgeon decision put an immediate stop to the bonus payments.

    The Sturgeon decision also proved that Fine was correct in the LACAOEHS and Silva cases and the related Fine v. Mitchell case, thereby destroying the foundation of the State Bar case, showing it to be a sham.

    The case is presently before the California Supreme Court on Fine's motion to dismiss.

 

 

B.  Commissioner Bruce E. Mitchell Filed Three Unconstitutional Contempt Cases Against Richard Fine.

    Commissioner Bruce E. Mitchell used class settlement monies for his own benefit, as occurred in the case of Paul DeFlores v. EHG National Health (Cite), in which a class settlement fund of $7.86 million was established (of which it was agreed that one-third would go to attorneys' fees, out of which as much as $1.9 million would go to Fine and all other lawyers representing plaintiffs as their compensation for their work).  Court papers show that Commissioner Mitchell, purporting falsely to be acting as a "temporary judge" still having authority over the case:

(1) transferred the class settlement fund from Wells Fargo Bank, where an account had been established, to Bank of America, where, according to Mitchell's Financial Disclosure Form, he already had loan agreements; and

(2) signed papers approving the taking of over $2 million dollars from the class settlement fund to be used to:

(a) "purchase claims against Bruce E. Mitchell, the Superior Court, and other 'judicial officers'"

(b) pay legal fees of approximately $300,000 to defend an action against him seeking to stop his "purchase" of claims

(c) pay private lawyers over $1.6 million of unearned fees on the condition that they would withhold 35% [$535,000] to pay additional legal fees to defend an action to stop such purchase, and

(d) pay approximately $600,000 in fees to others. 

Instead of being paid for his (Richard Fine's) successful work in the case, Commissioner Mitchell illegally redirected the settlement funds to his own personal use instead of their intended, agreed and approved purpose of payment of attorneys' fees to lawyers who'd actually worked on the DeFlores lawsuit.

    On September 24, 2001, Commissioner Mitchell issued an "Order and Judgment of Contempt" against Fine following Fine's lodging of objections against Mitchell for his violations under California Code of Civil Procedure (hereinafter "CCP") Section 170.3 (Recusal and Disqualification Proceedings, Link).  Fine appealed (Fine v. Superior Court (Cite)), but Mitchell's contempt order was affirmed in an unconstitutional appellate decision (Link) by Appellate Court Justice J. Doi Todd, P.J. Boren and J. Nott.  This non-disclosure by the appellate court was itself a denial of Fine's due process rights, in addition to the other Constitutional violations.  The California Supreme Court denied review of Fine's appeal of the appellate decision.  On August 12, 2002, the U.S. District Court, in the underlying case on appeal of Fine v. Superior Court (Cite), issued a "Stay of Execution; Order to Show Cause Re Immediately Granting Habeas Corpus Relief."   On August 21, 2002, the Los Angeles County Superior Court “voided and annulled” Commissioner Mitchell's September 24, 2001, Order and Judgment of Contempt against Fine.

    The second contrived contempt proceeding by Commissioner Mitchell against Richard Fine occurred in 2003 when Mitchell, in order to (improperly) impose his continuing authority over the DeFlores case, falsely claimed to still be a “temporary judge” over the case, even though he had previously voided and annulled his claim on August 21, 2002. 

    Superior Court Judge J. Stephen Czuleger was legally disqualified from the case in 2006 when he failed to respond to Fine's objection under CCP 170.3 alleging that Czuleger acted in concert with Mitchell to wrongly impose the jurisdiction of the court and personally benefit from Mitchell's Order illegally authorizing the taking of $80,000 from the DeFlores Settlement Fund to purchase all claims Richard Fine had against Mitchell and “other judicial officers.”  

    The second contempt proceeding also was unconstitutional for lack of notice thereof to Richard Fine, and for appointing counsel to prosecute the case who was already representing a party who was benefiting from a ruling.  The appointment and prosecution violated the due process clause and the U.S. Supreme Court case of Young v. United States (Cite).

    The third unconstitutional contempt proceeding (in the case of Marina Strand Colony II Homeowners Association v. County of Los Angeles (Cite) (a case in which Del Rey Shores, the Epsteins and others are the “Real Parties in Interest”) began on December 22, 2008, before Judge David P. Yaffe.  Judge Yaffe also testified as an adverse witness against Mr. Fine regarding charges that Fine “attacked the integrity of the LA Superior Court” and Judge Yaffe himself by stating that the judges of the LA Superior Court (1) had been paid monies from LA County in violation of Article VI, Section 19, of the California Constitution, (2) knew that LA County was a party in cases before the court when the judges on such cases had received the payments, (3) had not reported such payments on their mandatory disclosure form (Form 700) as required by the Political Reform Act,  and (4), in receiving payments and not disclosing them, violated the “right to honest services” and the “mail fraud act.”

 

VI.  The LA Superior Court, By Reason of Acts by Certain Judges, Has Shown that It Has Acted Against the Law and the U.S. Constitution in Its Current Contempt Proceeding Against Fine.

    The third contempt proceeding may actually be a first in judicial history, inasmuch as Judge Yaffe was both an adverse witness against Richard Fine and the judge of his own [Yaffe's] testimony.  As such, the proceeding violates the First and Fourteenth Amendments to the U.S. Constitution, effectively denying Fine access to the courts, due process and a fair trial.

    The LA Superior Court and Judge Yaffe know full well that a lawyer cannot be held in contempt for criticizing a judge unless it imminently interferes with the administration of justice. (Cite)  Political speech-speech about government issues or government officials is at “the core of what the First Amendment is designed to protect”. (Cite)

    Attorney speech concerning a court’s actions is political speech. (Cite) “The operations of the courts and the judicial conduct of judges are matters of utmost public concern”. (Cite)  “Speech that concerns public affairs ‘is more than self - expression; it is the essence of self government.’” (Cite)   The LA Superior Court and Judge Yaffe also know that a criticized judge cannot hear the contempt case of the person criticizing him. (Cite)

    Even as an adverse witness, Judge Yaffe proved that Mr. Fine was correct:  Judge Yaffe testified:

(1) that he had received the County's payments,

(2) that he knew that the County had cases before him,

(3) that he did not disclose the payments on his Form 700,

(4) that he was a State-of-California employee and an elected state judge, as defined by the California Constitution,

(5) that he did not have any employment contract with LA County, or any agreement or arrangement to provide services to LA County,

(6) that he reported the County's payments to him as “income” on his tax returns,

(7) that he did not put the payments into his “campaign contributions account” for his judicial elections, and

(8) that other than making a decision regarding the recirculation of the EIR in the Marina Strand case, he could not name any case in the last three years where he decided the case against Los Angeles County.

    After his own testimony, Judge Yaffe should have dismissed the case because “truth is an absolute defense”. (Cite)   Judge Yaffe’s testimony was consistent with documents submitted by Fine as evidence in the case prior to Judge Yaffe giving his testimony.  In fact,  Fine found and produced Annual Litigation Reports from the Los Angeles County Counsel's office to the Los Angeles County Board of Supervisors (dated June 9, 2005, October 3, 2007 and October 1, 2008), proving with their own documents that, in the years reported, 2005, and 2006-2007, no one won a case against the County when a Superior Court judge made the decision.   

    During the contempt proceeding, Fine informed Judge Yaffe that he had been reported to the Fair Political Practices Commission for violating the Political Reform Act's requirement that he disclose his County income on his Form 700, so he was officially on notice that his actions were improper.

    In summary, Judge Yaffe's testimony in the contempt proceeding confirmed that Yaffe and the Superior Court judges received unconstitutional payments from Los Angeles County, which they knew to be a party before them in some cases, which was not their employer and with which they did not have any employment contracts or arrangements to provide services, and did not disclose such to the State of California (their employer) on their Form 700s, in violation of the Political Reform Act.   And all was done in violation of all that is good and decent in a non-corrupt judicial system, which is the absolute right of the people to enjoy.

 

VII.  The Current Contempt Proceeding Exposed for the First Time the “Money Trail” Between Marina del Rey Developers, LA County Supervisors and LA Superior Court Judges, and Their Decisions on Marina Projects and Cases Affecting Local Taxpayers.

A.  The Documents and Testimony Expose the Money Trail Traveled by Los Angeles County's Supervisors, And Their Unlawful Acts.

    The documents and testimony in the contempt proceeding against Richard Fine, arising out of the Marina Strand case, exposed for the first time the money trail from developer's campaign contributors (Epsteins/Del Rey Shores/Levine/Marina Properties) to Supervisors (Antonovich, Knabe and Molina) who voted in favor of the developer’s project in violation of the Political Reform Act, to unconstitutional payments from the County to Superior Court judges (Judge Yaffe) who decide cases in favor of the County and the developer (including by imposing sanctions and attorney's fees on Fine without notice and hearing, and denying earned attorney's fees to Fine and Zoia as counsel for prevailing party), to the judge (Judge Yaffe) appointing the developer’s (Del Rey Shores) lawyer to act as prosecutor on behalf of Superior Court in the contempt proceeding.

    The documents in the Marina Strand contempt proceeding show that Del Rey Shores is the “Real Parties in Interest” in the case.  Their lease with LA County for Parcels 100s and 101s, where the redevelopment of Del Rey Shores is to occur, shows that Del Rey Shores is really a joint venture of Bryna Investments and the Epstein Family Trust.  (And the Application for the permit to redevelop Del Rey Shores was made by David O. Levine.)

    The documents in the Marina Strand contempt proceeding show the Supervisors' unanimous 4-0 vote to approve the EIR for the project on 5/15/07, with Supervisors Antonovich and Knabe voting in favor of the EIR and no one voting against it.  Other documents show that on 4/04/07, David Levine and the Epstein Family Trust each gave $1,000 to Supervisor Knabe, and on 4/24/07, Jerry Epstein, Pat Epstein and David Levine each gave $1,000 to Supervisor Antonovich.  These contributions caused Antonovich's and Knabe's votes to violate the Political Reform Act (Cite) since the contributions and voting occurred too close together.  These violations caused the vote to be void and illegal, since only two untainted Supervisors voted in favor of the EIR, yet only two legal votes were cast, thus there was no quorum.

    The documents further show that on 10/08/08, Jerry Epstein and David Levine each contributed $1,250 to "Gloria Molina - Yes on Measure U";  on 8/14/08, Jerry Epstein contributed $1,000 to Antonovich; on 8/15/08, Levine contributed $1,000 to Antonovich; and on 3/18/08, Marina Properties [controlled by Jerry Epstein] contributed $500 to Knabe.  These contributions caused the votes of Antonovich, Knabe and Molina to violate the Political Reform Act (Cite) with respect to the vote on the recirculated EIR on December 16, 2008.  These violations caused the vote to be illegal as there was no quorum.

 

B.  Documents and Testimony Show the Unlawful Acts of Del Rey Shores' Lawyers Withholding Knowledge of the Supervisors’ Unlawful Vote, and Judge Yaffe’s Refusal to Investigate, Even Though the Vote Was in the Record Before Him.

    Documents and Judge Yaffe's testimony show that neither the lawyers for the County nor Del Rey Shores brought the illegality of the May 15, 2007, vote to the attention of Judge Yaffe, and that Judge Yaffe did not investigate the legality of the vote when he reviewed the record in the case. 

 

C.  The Documents and Testimony Show the Unlawful Acts of the Lawyers and Judge Yaffe in Imposing Sanctions and Attorney's Fees on Fine Without Notice or Hearing, in Enforcing the Void and Unconstitutional Order, and in Ignoring Judge Yaffe's Disqualification.

    The documents and testimony of Del Rey Shores’ attorneys, Joshua L. Rosen and R.J. Comer, further show that after Fine left as Marina Strand’s counsel, they did not serve him with documents and the court did not serve him with any notice of the January 8, 2008 hearing, preventing Fine from even being aware of the hearing during which Judge Yaffe ordered that Fine pay sanctions and attorney's fees to LA County and Del Rey Shores, that Judge Yaffe never responded to the Objection served on him on March 25, 2008, under CCP Section 170.3, which failure to respond (which would have had to have been under oath) automatically disqualified him from presiding over the case, and that Judge Yaffe violated the law by remaining on the case with respect to any issues concerning Richard Fine.

 

D.  The Documents and Testimony Show the Unlawful Acts of the Lawyers and Judge Yaffe, Which Violated Fine's Due Process Rights by Appointing Del Rey Shores' Lawyers to Prosecute the Alleged Contempt Action Against Fine.

    Documents show that, despite their individual knowledge that Fine was given no notice of the January 8, 2008, Order setting a hearing date, Judge Yaffe and Del Rey Shores' lawyers proceeded to act to enforce the Order, even to the extent of Judge Yaffe appointing Del Rey Shores’ lawyers to also act as attorneys representing the Superior Court (which was a separately-named party) to prosecute the contempt charge and prosecute Fine for refusing to respond to questions and produce documents they claimed they needed in order to collect their approx. $47,000 (illegal) judgment for sanctions and attorney's fees against Fine.  This appointment and prosecution was blatantly improper. (Cite)

 

 

VIII.  The Third Contempt Proceeding Again Exposes That The Payments to the Judges Influenced Judges to Refuse to Hold Supervisors Responsible for Not Protecting the Taxpayers' Interest in the County's Income from Marina del Rey.

A.   Five Previous Taxpayer Lawsuits Against LA County and the Marina del Rey Developers (Filed Between 2004 and 2006), Proving that Certain Leases with Developers in Marina del Rey Were Unlawful, Were Improperly Dismissed by Judges Without Letting Them Go To Trial, Which Cost Taxpayers of Los Angeles County Approximately $700 Million in Lost Income.

    Four class-action lawsuits alleging a gift of public funds to private individuals (in violation of Article XVI, Section 6, of the California Constitution by reason of the Supervisors' improper leases to developers in Marina del Rey) were filed against Los Angeles County and (1) Archstone Smith Operating Trust, (2) Kingswood Village-Marina, (3) Villa Venetia, (4) Neptune Marina and the Oakwood (later all consolidated under the single case of (5) Coalition to Save the Marina and Marina Tenants Association v. County of Los Angeles (Cite)) were improperly dismissed before trial in 2006 (motion for reconsideration denied in January, 2007) by Superior Court Judge Soussan G. Bruguera.  Judge Bruguera struck from the record Fine's Objection (under CCP Section 170.3), yet she freely admitted that she was receiving payments from LA County.  Fine's petition for writ of mandate to the Court of Appeals was summarily denied, and his petition for review was denied by the California Supreme Court.

    The taxpayers lost approximately $700 million in income from the previous ten years in which the County had not received the correct amount of money for the “land value” under the leases to the developers in Marina del Rey.  Taxpayers also lost approximately $70 million in “lease renewal” payments.

    The sworn Complaints each show that LA County was:

(1) operating beyond its authorized power by leasing the land for private-apartment use,

(2) the County was not, despite its requirement, controlling the prices charged to the public for the apartments and boat slips.

The Complaints also show that:

(3) the subleases for apartments and boat slips for one year or less were not “pre-approved” or “approved” by LA County, as required,

(4) a “fair and reasonable return on investment” for the developer, as determined under the leases. was 10 to 10.5% per year,

(5) the developers were actually receiving 25% to 51% per year, and

(6) a fair return for the taxpayers as “ground rent” on the land leased to the developers was 8-9% of the land value per year, which would be approximately $100 million per year for the 400 (of 800) acres of County-owned land in Marina del Rey currently leased to developers. This is far greater than the $32.75 million then being paid to the County by the lessees/developers in Marina del Rey, who were receiving an income of over $300 million per year from their Marina del Rey properties.  (No examination has been undertaken, yet, of the legality of any other leases the developers may hold with regard to property located outside the Marina.)

    The sworn Complaints show that Los Angeles' County Counsel has stated, in a formal opinion letter to the predecessor to the Department of Beaches and Harbors dated January 7, 1977, that “[w]e believe that it should be understood clearly that the County and your department are bound by the statutes and the terms of your leases.”  County counsel stated, in an opinion letter to the Department dated June 6, 1977, written in response to the Lessees’ claim that “investment” need not be considered in setting prices in the Marina, that this claim was “not true … when Section 16 says clearly and unequivocally that a fair and reasonable return on investment should be one of the two considerations in determination of fair and reasonable prices.”

    The latter letter also stated that:

Limitation of price inquiry to comparable facilities elsewhere might or might not result in “fair and reasonable” prices at the Marina, because of lack of complete comparability and differences in such things as financial base, i.e., the mix of public fund support and private investment.  Hence the Director should look at the lessee’s investment, and failure to do so would be an abdication of his administrative responsibility.” (Emphasis added).

    The sworn Complaints show that Marina del Rey lessees contributed approximately $600,000 for the previous number of years, as of 1995, to the campaigns of Supervisors.  Campaign contribution reports and lobbyist reports show that, since 2000, Marina del Rey lessees/developers have spent more than $763,000 altogether, in lobbying Supervisors (approximately $663,00) and in making campaign contributions to Supervisors (approximately $100,000, with more than $41,000 of it contributed to Don Knabe, who is responsible for representing, among others in his district, the citizens of Marina del Rey).

    The sworn Complaints show that the Supervisors' extensions of existing leases for twenty to forty years, in which lessees were given a “new” lease after the completion date of their current lease without the County conducting any public bidding, and without the County demanding payment of monies to the County representing the “market value” of the “new lease”.  This practice began in the early 1990s, and has continued with greater frequency since 2000.

    The sworn Complaints show that since 2000, rents in Marina del Rey have risen significantly while payments to the County under the leases have remained somewhat constant, inasmuch as the County only receives approximately 8.5%-10% of rental income of the lessees while the lessees’ “return on investment” (profit) has risen astronomically.

    The sworn Complaints clearly demonstrate that, despite the County Assessor’s Reports which show that the land subject to the County’s leases in Marina del Rey is grossly undervalued in comparison to identical privately-held land, the Supervisors have done nothing to improve the income to the County and thereby reduce the lessees’ return on investment, as required.  Meanwhile, the difference is born on the backs of taxpayers in the form of unnecessary taxes.

    The sworn Complaints show that, despite the County’s statements that “high rents” benefit the County, when the leases only allow the County an increase in revenue of 8.5-10 cents for every dollar increase in revenue to the lessee, the County and the Supervisors have done nothing to limit prices to the public by controlling the return on investment to 10%-10.5%, and have acted to not impose any limits whatsoever on the developers' gross profits.

    A fifth taxpayer lawsuit brought against LA County and Marina Pacific Associates was dismissed in 2007.  (Marina Pacific Associates is a limited partnership in which the Epstein Family Trust is one of the mangers of the general partner, and Jerry Epstein and Pat T. Epstein are the Trustees of the Epstein Family Trust.) On June 29, 2005, Superior Court Judge Elihu M. Berle issued an oral Order denying a request for preliminary injunction in that case, which was entitled Coalition to Save the Marina, Inc. v. County of Los Angeles, Marina Pacific Associates, and Bellport Group  (Cite).  Judge Berle ruled that the County does not control prices of apartments and boat leases of a year or less under the terms of its “restated lease” with Marina Pacific Associates, amongst other grounds, stating that the “restated lease” submitted as evidence by plaintiffs (Fine's clients) does not show any “control or system of control on the price at which accommodations may be offered for rent or lease” which is the basis to require the lessee, Marina Pacific Associates, to offer any redeveloped accommodation [boat slip] first to the then-existing tenant [Dr. Stuart Hoffman, a legal live-aboard] under Government Code § 7060.2(B)(3).  The “restated lease” between the County and Marina Pacific Associates contains the identical price control section as Section 15.19 in the “Amended and Restated Lease” with Del Rey Shores.

 

B.  County Supervisors Entered Into Lease Extensions At A Fraction of the Value of the Lease, Costing Taxpayers Millions of Dollars

    The sworn Complaints, dismissed by Judge Bruguera, alleged that LA County entered into twenty- to forty-year lease extensions with developers in Marina del Rey, without public bidding, at a fraction of the value of the lease, which was, in effect, a gift of public funds to private individuals.

(1) The Archstone Kingswood Lease Extension

    On or about March 3, 2004, Lease No. 3823 was assigned to the Archstone Smith Operating Trust, which paid Kingswood Village-Marina and its management company approximately $87 million for the eighteen years remaining on the lease until March 31, 2022.

    On or about March 3, 2004, Supervisors approved an Option for Archstone to enter into a new lease for the period April 1, 2022 until March 31, 2042 (entitled Option to Amend Lease Agreement (Parcel 102S)).  This was the result of a negotiation between Archstone and the Supervisors which was not made public, without any open meeting, statement of terms or sealed bids as required.  Archstone paid an Option Fee of $100,000 upon signing the Option.  Upon exercise of the Option, Archstone paid $2.21 million, minus the $100,000 paid for the Option for the twenty-year new lease, or approximately only 2% of the price Archstone paid Kingswood and its management company for the eighteen remaining years on the present lease.

 

(2) The Oakwood Lease Extension

    On December 18, 1968, the County of Los Angeles and Oakwood’s predecessor in interest entered into Lease No. 73713 for Parcel No. 103T, Oakwood Apartments. The Lease was to expire on March 31, 2022.  On November 29, 2001, the Lease was amended to extend the term through March 31, 2042.  Parcel 103T consists of 11.4 acres of land area owned by the County of Los Angeles upon which sits 597 apartment units.

    On or about July 19, 2005, the Los Angeles County Board of Supervisors approved the assignment of Parcel 103T’s lease from Oakwood Marina del Rey (Oakwood) to ASN Marina (ASN Archstone), approved a “Residential Master Lease” between ASN and Oakwood, and approved an amendment to Lease No. 73713 which amended various provisions of the lease in order to clarify definitions and obligations to aid in the implementation of lease provisions and provide for the discontinuance of the "furnishings replacement sinking fund", and to define the proposed assignment of leases as exempt from the California Environmental Quality Act.

    ASN Archstone paid $34.8 million to acquire the Leasehold as part of $84 million paid to Oakwood as part of the total purchase price for the leasehold interest and improvements thereon.  A guaranty was given to the County of Los Angeles by Archstone-Smith Operating Trust, a $9.3-billion real estate investment trust and the sole member of ASN.  The Residential Master Lease requires Oakwood to continue the “day-to-day” operation of the leasehold property for the next seven years.

    Taxpayers received nothing in exchange for their Supervisors' approval of the transfer of the $34.8 million County “leasehold interest” from Oakwood to Archstone.

 

(3) The Marina Pacific Lease Extension with the Epstein Family Trust

    On June 28, 1963, County Supervisors and Marina Pacific Associates, a limited partnership [of which the Epstein Family Trust is one of its controlling general partners] or its predecessors in interest entered into Lease No. 7073 for Parcel No. 111T and Parcel 112T for the term of April 1, 1963 to March 31, 2023.  On June 10, 1969, Parcel 112T was separated and a new Lease for the same term, No. 14910, was agreed to between County Supervisors and Marina Pacific Associates or its predecessors.

    On April 16, 2002, the County granted Marina Pacific Associates an option to amend Lease Nos. 7073 and 14910, and recombine them, for a term lasting until March 31, 2062.  Marina Pacific Associates exercised the option and paid the County $325 thousand dollars.  Marina Pacific Associates is obligated to pay a total of $3.25 million for the forty-year “new" lease, subject to Extension Fee Credits which could reduce the payment to zero or close thereto, according to Paragraph 2 of the Amended and Restated Lease.

    On October 20, 2003, the County entered into Amended and Restated Lease Agreement No 74638 with Marina Pacific Associates for parcels 111T and 112T.  The “new" forty-year lease was approved without public bidding; there was not even any notice to the public printed in any newspaper.

 

IX.  The New “Amended and Restated Lease Agreement” Extending the Lease for Parcels 100s and 101s From the Year 2022 to the Year 2061 for the Price of $1 Million Is Violating the California Constitution by Giving Away the Value of Public Property to Private Individuals, and Taking Public Property and Using It for Private Residential Apartments.

    The Amended Petition for Writ of Mandate in the consolidated Marina Strand case alleged that the taxpayers were not receiving a sufficient economic benefit from the lease with Del Rey Shores.  Judge Yaffe did not rule in favor of taxpayers, even though the evidence was explicitly clear.  Plaintiffs' Amended Petition for Writ of Mandate stated that:

    The County will not significantly benefit as it only receives approximately 10% of the rental revenues.  Compared to the cost of providing County services to support the project, the project may be a net loss to the County as more police, fire and other services and infrastructure are needed.  No study has been made to show the real cost to the County for the Project.

    Further, the lease with Del Rey Shores is void because the Master Leases are limited to residential uses, as shown by the Purpose of the Property sections of the Leases:

Section 3. Purpose or Use of Property

    The leased premises shall be used only and exclusively for multiple and single residential units (hotel, motel, apartments, cabanas, or trailer cabanas) and such other related uses and purposes incidental thereto as are specifically approved and for no other purposes whatsoever without the written approval of [the County of Los Angeles]. (Emphasis added.) 

    The price-control duty was included in the Master Leases to ensure that the public's property would serve a public use.  County Supervisors, in their Opposition to a motion for reconsideration (in the case of Coalition to Save the Marina, quoting from their previous filings) state that “... residential sublessees do not generate revenue or provide services to the public ...”

    The price control provisions are contained at Section 16 of the Master Leases, which provide as follows:

[Section] 16. CONTROLLED PRICES.

    Lessee shall at all times maintain a complete list or schedule of the prices charged for all goods or services, or combinations thereof, supplied to the public on or from the premises hereby demised, whether the same are supplied by Lessee or by its sublessees, assignees, concessionaires, permittees or licensees.  Said price shall be fair and reasonable, based upon the following two (2) considerations:

    First, that the property herein demised is intended to serve a public use and to provide needed facilities to the public at fair and reasonable cost; second, that Lessee is entitled to a fair and reasonable return upon his investment pursuant to this lease.

    In the even that the Director notifies Lessee that any of said prices are not fair and reasonable, Lessee shall have the right to confer with Director and to justify said prices. If, after reasonable conference and consultation, Director shall determine that any of said prices are not fair and reasonable, the same shall be modified by Lessee or its sublessees, assignees, concessionaires, permittees or licensees, as directed.

    The Lessee may appeal the determination of the Director to the Board of Supervisors, whose decision shall be final and conclusive.  Pending such appeal, the prices fixed by the Director shall be the maximum charged by the Lessee.  (Emphasis added.)

    On November 8, 2006, the subject of Section 16 of the Leases was discussed at the Small Craft Harbor Commission meeting.  The following is an excerpt from the tape of the meeting, obtained from the Small Craft Harbor Commission:

Faughnan:  "Commissioners, all the County leases have the same exact control prices provision which reserves the right to the County, to the Director actually, to review prices charged in the Marina to determine weather they are fair and reasonable.  And there is a process that the department goes through to review prices and to determine weather or not they are fair and reasonable.  And they can require that the Lessee change the prices if the record determines that they are not fair and reasonable.  And then the lessee has the right to appeal to the Board of Supervisors. "

Commissioner Searcy:  "And what initiates that process?  I think that’s the big issue."

Faughnan:  "What initiates the process is someone coming to the Department and complaining that they have a rent issue.  But the Department needs to have actual information, needs to know (unintelligible) that they are being charged unfairly, they need to know the rent that is being charged, they need to know who the lessee is, they need all that actual information.  They cannot just investigate based on third-hand information".

Commissioner Searcy:  "Thank you."

Commissioner Lesser:  "What is the difference between 'fair and reasonable' and 'fair' market value?"

Faughnan: "The Department and the County believes there is no difference between fair and reasonable.  Fair and reasonable is fair market value.  Once again, this is something that has been addressed in a litigation brought by the Coalition.  (Emphasis added.)

    This was the first time that the County ever admitted that it did not initiate any control of prices under Section 16 of the Leases.  The County had always instead argued the opposite - that it had controlled prices under Section 16.

    The County has pointed to Policy Statement No. 27 as its method of enforcement.  This new statement shows that the County has disregarded Policy Statement No. 27, and disregarded the June 6, 1977, letter to Victor Adorian from County Counsel discussing the responsibilities and duties of the County under Section 16 of the Leases.  This was also the first time that the County admitted that it was disregarding the criteria of Section 16 that prices are controlled by “fair and reasonable cost” to the public and the lessee’s “fair and reasonable return upon his investment pursuant to this lease.”

    These admissions show that the County has totally abandoned any control of prices under Section 16 of the Leases and allowed the whims and vagaries of the market to control the prices, thereby giving huge profits and returns to the lessees at the expense of taxpayers.

    In the case of Coalition to Save the Marina v. County of Los Angeles (Cite), Section 11.1.2 of the restated Master Lease with Marina Pacific Associates is nearly identical to the present Lease.  Section 11.1.2 states as follows in relevant part:

Notwithstanding any contrary provision of this Article 11, Lessee shall not be required to obtain County’s approval of any Sublease of an individual apartment or boat slip lease in the ordinary course (but not the master lease of multiple units) to a person or persons who will physically occupy the subleased unit, as long as such Sublease is in the form of the standard residential apartment lease or boat slip lease, as the case may be, hereafter submitted to and approved by the County and the term of such Sublease does not exceed one (1) year each (an “Approved Apartment/Slip Lease”).  (Emphasis added.)

    The County took exception to the Coalition's Second Amended Complaint, contending that the County should not have been sued as part of the lawsuit since it did not control the rentals to sublessees under the Master Lease, and admitted as follows:

Under Section 11.1.2 of the Master Lease it is clear that the County does not have the right to approve or disapprove or reject MPA’s boat slip tenants.  As such, the County has no ability to evict or direct the eviction of Hoffman or any other boat slip tenant under the terms of the Master Lease.

Similarly, the County has no authority under the Master Lease to direct MPA to enter into a boat slip lease with a particular individual.  The County should not be subjected to litigating a cause of action that seeks to prohibit it from engaging in an act it is already contractually enjoined from undertaking.  (Emphasis added.)

    The County again made the same admission, in its Reply Brief, as follows:

The County’s contractual relationship with MPA is governed by the Master Lease.  As described in the County ’s Demurrer, under Section 11.1.2 of the Master Lease, the County does not have the right to approve or reject MPA’s boat slip tenants.  As such, the County has no ability to evict or direct the eviction of Hoffman or any other boat slip tenant under the terms of the Master Lease.  Similarly, the County has no authority under the Master Lease to direct MPA to enter into a boat slip lease with a particular individual ...  (Emphasis added.)

    The County did not change its position at the hearing on its Demurrer to the Second Amended Complaint on October 16, 2006.  The County’s Demurrer was overruled and a trial date was set to begin on May 21, 2007.

    The County did not dispute that the Master Lease was void if it did not have the right to approve or reject subtenants.  The lessee in the Marina Pacific case is the Applicant herein.  Caselaw requires County control of prices and approval of subleases as a pre-requisite for a determination that a “public purpose” exists when public property is leased to private persons. (Cite)  The Nesvig case provides some guidance with the following observation:

Powers which require the exercise of judgment and discretion ... must necessarily remain with the public agency and cannot be delegated.  Thus the issue in each case is whether ultimate control over matters involving the exercise of judgment and discretion has been retained by the public entity.  (Emphasis added.).

    In the Haggerty case, the Court stated as follows:

"... The port has the right to inspect menus, lists and schedules of prices” and if any of them is determined unreasonable or inappropriate for the services rendered or the item sold, the same must be modified as directed by the port ...”

    “The requirement that all subleases be upon notice to the port manager and his right to disapprove a sublease ensures that conventions desiring to use the premises and approved by the port manager will not be denied such use.”  (Emphasis added.)

    The Court concluded:

The controls above mentioned, as well as others contained in the lease, meet the requirements of the Ross case that the municipal lease provide for control of rates, charges and practices of the lessee.  (Emphasis added.)

    The Nesvig case further supports the position that the County has given public land to private individuals.  The court set forth the criteria for County control to avoid a gift of public funds as follows:

“Thus the issue in each case of delegation is whether ultimate control over matters involving the exercise of judgment and discretion has been retained by the public entity.”

“In the Egan and Ross cases the contracts were found wanting because the public body had failed to retain control over prices to be charged for the facilities placed under private operation.  In Haggerty, on the other hand, the lease of a convention hall and banquet building by the City of Oakland for operation by a private party was found to be a valid exercise of city power under proper controls, since the city retained the right to control the use of the premises for convention or banquet purposes and to control the prices, charges, subleases, and practices of the lessee.”  (Emphasis added.)  

    The Commission must consider the recent admissions of the County in deciding on the application.  These admissions invalidate the premises upon which the Applicant bases its application as the County being the owner of the land and the Applicant being the lessee claiming under a Master Lease, which is void.

    Nothing in the “Record” showed that the County changed or retracted its admissions in the Amended Petition for Writ of Mandate.

    Further, nothing in the “Record” showed that a study was made to show the real cost to the County to respond to the allegation that "The County will not significantly benefit as it only receives approximately 10% of the rental revenues.  Compared to the County services to support the project, the project may be a net loss to the County as more police, fire and other services and infrastructure are needed.  No study has been made to show the real cost to the County for the Project."

 

A.  Taxpayers Have and Are Being Cheated Because, Although They're Entitled To, They Are Not Receiving Any Significant Benefit for the County's Agreement to Extend the Lease by 39 Years.

    Section 2.1 extended the current Lease for 39 years for a payment of a mere $1 million dollars.  By contrast, in 2004, when the Archstone Smith Operating Trust purchased the forty-year leasehold interest from Oakwood, Archstone paid Oakwood approximately $34.8 million for the leasehold interest of the same length of time.  At a minimum, taxpayers should receive the same amount of money, based upon the “value of the leasehold.”

 

B.  The Use of Public Property for Residential Apartments Was Beyond the Power of County Supervisors to Allow.

    Section 3.1 of the Lease states:

Specific Primary Use: The Premises shall be used by the Lessee for the operation and management of (1) a residential apartment project, and (ii) such other and related uses as are specifically approved by County (collectively, the foregoing shall be referred to herein as “Permitted Uses”).  Except as specifically provided herein, the premises shall be used for no other purpose without prior written consent of County.    County makes no representation or warranty regarding the continued legality of the Permitted Uses or any of them and Lessee bears all risk of an adverse change in Applicable Laws.  (Emphasis added.)

    Section 3.3 of the Lease states:

Active Public Use:

The parties acknowledge that the ultimate objective of this Lease is the complete and continuous use of the facilities and amenities located in Marina del Rey by and for the benefit of the public without discrimination as to race, gender or religion, along with the generation and realization of revenue therefrom.  Accordingly, Lessee agrees and covenants that it will operate the Premises fully and continuously ... in light of these objectives, consistent with the operation of residential apartment facilities, and it will use commercially reasonable efforts so that County may obtain maximum revenue therefrom as contemplated by this Lease.  In the event of any dispute or controversy relating hereto, this lease shall be construed with due regard to the aforementioned objectives. (Emphasis added.)

    The “residential apartment project” shown in the EIR is not “open to the public”.  It is a gated community.  It does not have any County government offices or any County facilities.  The use of the property for any purpose other than purpose of County government is beyond the County's authority to allow, even if public use exists and if such public use is diminished.  Here, the apartment complex is not serving a County purpose such as office space, etc., and the action of leasing the land for “a residential apartment project” was not permissible.  As shown in Rathbun v. City of Salinas (Cite):

“a taxpayers suit states a cause of action when, if the allegations be true (as on demurrer they must be deemed), it fairly discloses waste of public funds or property or a manifest use of such funds or property chiefly for long-term commercial use with substantial benefit to a lessee accompanied by diminution of active present use of the property for a municipal purpose. The City council’s action in such case was ultra vires.”

 

C.  The County’s Failure to Approve Apartment Subleases or Control Prices Is a Gift of Public Funds to a Private Individual.

    The County does not approve subleases of 18 months or less for apartments. Section 11.1.2 states, in relevant part:

Notwithstanding any contrary provision of this Article 11, Lessee shall not be required to obtain County’s approval of any Sublease of an individual apartment unit in the ordinary course (but not the master lease of multiple units) to a person or persons who will physically occupy the subleased unit, as long as such Sublease is in the form of the standard residential apartment lease hereafter submitted to and approved by County and the term of such Sublease does not exceed eighteen (18) months (each, an “Approved Apartment Lease”) ... Upon request by County, Lessee shall furnish County with a current rent roll respecting the Approved Apartment Leases and a copy of all such Approved Apartment Leases. (Emphasis added.)

    The County does not pre-approve or approve the prices charged by the Lessees. Section 15.19 states in relevant part:

Controlled Prices:

Lessee shall at all times maintain a complete list or schedule of the prices charged for all goods or services, or combinations thereof, supplied to the public on or from the premises hereby demised, whether the same are supplied by Lessee or by its Sublessees, assignees, concessionaires, permittees or licensees. Said prices shall be fair and reasonable, based upon the following two ( 2) considerations:

first, that the property herein demised is intended to serve a public use and to provide needed facilities to the public at fair and reasonable cost; second, that Lessee is entitled to a fair and reasonable return upon his investment pursuant to this lease.

    In the event that the Director [of the Small Craft Harbor Commission] notifies Lessee that any of said prices are not fair and reasonable, Lessee shall have the right to confer with the Director and to justify said prices. If after reasonable conference and consultation, Director shall determine that any of said prices are not fair and reasonable, the same shall be modified by Lessee or its Sublessees, assignees, concessionaires, permittees or licensees, as directed. Lessee may appeal the determination of the Director to the Board [of Supervisors], whose decision shall be final and conclusive. Pending such appeal, the prices fixed by the Director shall be the maximum charged by the Lessee.  (Emphasis added.)

    California 's “public policy” (as expressed in its case law criteria (Cite)), requires County control of prices and approval of subleases as a pre-requisite for a determination that a “public purpose” exists when public property is leased to private persons.  The rule is that the public body (the County) affirmatively take action rather than leave such action to others.   Without such affirmative action, the leasing is a taking of public property and giving it to private individuals in violation of California Constitution Article XVI, Section 6, which prohibits a gift of public funds to private individuals.

 

D.  The Income to the County Is a Sham.  Taxpayers Are Paying for “Affordable Housing” Through a $11.05-million “Lessee Credit” Plus Accrued Interest for Fifty-Four Low- and Moderate-Income Units.

    Section 4.41 of the Amended Lease gives Lessee a “Lessee’s Credit of $11,050,000 plus accrued interest for 17 low-income and 37 moderate-income housing units, total of 54, or 10% of the new 544 units.  The number of “affordable” units was increased and the credit may have been adjusted upward.   The “minimum rent” was $252,733 until the “Completion Date” of the new construction.  At such time, it moved to .75 of the average total Annual Rent for the projected 36 months. Later it moved to .75% of the average annual rent of the preceding 36 months.

 

X.   The Payments to Judges Resulted in an Unconstitutional Assault on All Attorneys' Right to Practice Law.

A.  The State Bar Violated the First Amendment by Bringing Its Case (#04-O-14366 RAH) Against Richard Fine In Which It Admitted That it Was Not Prosecuting Fine for the “Content” of His Statements, His “Speech” or His “Rhetoric”, Thereby Leaving No Case.

    The State Bar admitted in its statements in its Responsive Brief on Review (filed April 25, 2008) and during oral argument in court (on June 24, 2008) that it was not prosecuting Fine for the “content” of his statements, his “speech”, or his “rhetoric”.  The State Bar stated:

“3. The First Amendment is not an issue in this matter.  The State Bar seeks to discipline [Fine] not for the content of his statements, but his conduct: [Fine's] calculated, deliberate and repeated abuse of the judicial system.”

    “Those allegations in the NDC [Notice of Disciplinary Charges], specifically counts 2 and 4, which were based upon or targeted the alleged falsity of specific statements made by [Fine], were dismissed by the Hearing Department.  As set forth above, the State Bar is not challenging those dismissals.”

    “Respondent’s reliance on Standing Committee v. Yagman (Cite) as a defense in this matter is misplaced.”  

    “The charges in this matter are not an attack on speech.  Standing Committee v. Yagman involved statements by an attorney which allegedly impugned the integrity of a judge.  The issues here, inter alia, were a question of the truth or falsity of the assertions, whether a prosecuting agency [bore] the burden of proving the falsity and whether truth was a defense to discipline.  These issues are not relevant here”.

    “Additionally it is clear that rhetorical hyperbole is not disciplinable.”

    “The State Bar is not seeking to discipline Respondent for his rhetoric.” (Emphasis added.)

    At oral argument before the State Bar Court on June 24, 2008, the following occurred (as shown on KNBC TV Channel 4 Los Angeles on October 15, 2008):

Lawyer Kevin Taylor (before State Bar Court):  "Mr. Fine’s conduct in this proceeding amounts to aggravation."

Interviewer Paul Moyer:  "In this review hearing, Attorney Kevin Taylor, representing the State Bar, accused Fine of filing frivolous lawsuits about the payments issue to harass judicial officers who’d ruled against him in other cases."

    The State Bar further admitted that, in order to show that Fine was outside the protection of the First Amendment, the Bar would have to show that Fine’s filing of a lawsuit was a “sham” or “baseless” or based upon false statements.  At pages 3- 4 of Fine’s Memorandum Brief in Opposition to Petition For Review, the State Bar acknowledged that a court would have to find that statements are false or the litigation is baseless or a sham for the immunity of the First Amendment to be removed (Cite).  The U.S. Supreme Court in McDonald held that statements under the petition clause are afforded the same protection as statements under other First Amendment protections (Cite).

    The judges involved in the State Bar case knew that Fine’s “conduct” of filing cases and pleadings was protected under the constitutional right to petition to redress grievances, the petition clause of the First Amendment. (Cite);  "We recognized that the right of access to the courts is an aspect of the First Amendment right to petition the Government for redress of grievances.  Accordingly, we construed the antitrust laws as not prohibiting the filing of a lawsuit, regardless of the plaintiff's anti-competitive intent or purpose in doing so, unless the suit was a 'mere sham' filed for harassment purposes."

    The constitutional right of freedom of speech and the constitutional right to petition for redress of grievances are inseparable, because the court cannot determine whether a case is a sham unless it analyzes the “content” of the statements in the pleading filed, the “speech”, the “rhetoric” and the “legal arguments” advanced.  By the State Bar’s own statements, the “content” of the statements in the pleading Fine filed, the “speech”, the “rhetoric” and the “legal arguments” advanced, are not part of the Notice of Disciplinary Charges.

    However, even if those rights were separable, criticism of judges and the judicial system is allowed under the First Amendment, thus any act by Fine was exempt under the First Amendment as it did not deny the defendant a fair trial.  ((Cite);  "Speech during a criminal trial protected unless it 'creates a substantial likelihood of material prejudice to the fair administration of justice'”).

    Political speech –- that is, speech about government issues or government officials -- is at “the core of what the First Amendment is designed to protect” (Cite).   Attorney speech concerning a court’s actions is political speech. (Cite);  “The operations of the courts and the judicial conduct of judges are matters of utmost public concern”.  (Cite);  “Speech that concerns public affairs “is more than self-expression; it is the essence of self government.”  (Cite))

    Lawful restrictions of attorney speech seek to achieve two separate interests:  the first is a fair trial in the pending proceeding, referred to as “fair administration of justice”. (Cite)  These restraints usually are in the form of rules of professional conduct relating to pre-trial publicity and gag orders.  (Cite)  The second is preserving the integrity of the legal process and the public’s respect for the institution, which concerns prejudice to the judiciary as a whole and not in a particular case, and exists when a case is not pending.

    In Bridges v. California (Cite), this latter interest was found to not be so compelling, and has not been relied upon to uphold attorney speech regulation.  (Cite)   The balancing of the state’s interest for fair administration of justice in a pending case, and the First Amendment rights of attorneys in pending cases for statements made outside the courtroom in criminal cases, was set forth in Gentile (Cite) where the court lowered the “clear and present danger” standard set forth in Bridges (Cite) to allow the restriction of truthful attorney speech that creates a “substantial likelihood of material prejudice” to the fair administration of justice in a pending case.  The acts herein do not create this problem, as there was no pending case.

    The State Bar had to show that a statement made by Fine in a pleading or testimony was false.  Truth is an absolute defense, and the disciplinary body has the burden of proving falsity, as set forth in Standing Committee v. Yagman (Cite):

    Attorneys who make statements impugning the integrity of a Judge are, however, entitled to other First Amendment protections applicable in the defamation context.

    To begin with, attorneys may be sanctioned for impugning the integrity of a Judge or the court only if their statements are false; truth is an absolute defense.  (Cite)  Moreover, the disciplinary body bears the burden of proving falsity.  (Cite).

    It follows that statements impugning the integrity of a Judge may not be punished unless they are capable of being proved true or false; statements of opinion are protected by the First Amendment unless they "imply a false assertion of fact." (Cite); (Cite); statement of opinion actionable "only if it implies the allegation of undisclosed defamatory facts as the basis for the opinion").

    Even statements that at first blush appear to be factual are protected by the First Amendment if they cannot reasonably be interpreted as stating actual facts about their target.  (Cite)  Thus, statements of "rhetorical hyperbole" aren't sanctionable, nor are statements that use language in a "loose, figurative sense."  (Cite)  (Emphasis added.)

 

 

B.  The State Bar Case Against Fine Was Prosecuted for the Personal Benefit of Sheldon H. Sloan, the President of the State Bar, Who Represented Marina Pacific Associates in the Marina Pacific Associates Case (Where Fine was Opposing Counsel and Laura Chick, Who Opposed Fine in the Shinkle Case and Currently Opposed Fine in the Playa Vista Case), Who Had a “Behest” Given in Her Name by a Playa Vista Lobbyist While Still Responding to a Playa Vista Report She Authored.

    Documents filed in the State Bar case show that Sheldon H. Sloan, an attorney and a member of the State Bar’s Board of Governors, and who was President-elect and President of the State Bar at the time that the State Bar filed and prosecuted its case against Fine, was also one of the lawyers opposing Fine in the Marina Pacific Associates case where Sloan was representing Marina Pacific Associates and its general partner controlled by the Epstein Family Trust, of which Jerry Epstein and Pat T. Epstein were Trustees.

    Under Section 6079.5 of the California Business & Professions Code, the Chief Trial Counsel (prosecutor) of the State Bar “serves at the pleasure” of the Board of Governors and “shall report to and serve under the Regulation, Admissions, and Discipline Oversight Committee of the Board of Governors of the State Bar”.

    Documents in the State Bar case show that Laura Chick was appointed a “Public Member” of the Board of Governors of the State Bar.  A newspaper interview quoted her as being a friend of Sheldon H. Sloan, who encouraged her to apply for the position.  The documents further show that she was a LA City Councilperson at the time that Fine brought the case of Shinkle v. City of Los Angeles (Cite), the results of which caused the LA City Council to change its method for calculating “sewer service charges,” thereby saving residents tens of millions of dollars per year, and forcing the unhappy Council to search elsewhere for a source to replace the lost funds. 

    Documents in the State Bar case show that Laura Chick had a “behest” given in her name by the lawfirm of Latham & Watkins, the lawyers and lobbyist for Playa Capital Co., the “Real Party in Interest” in the case of Grassroots Coalition  v. City of Los Angeles (Cite) in which Fine represented Grassroots Coalition.  The “behest” was given on June 6, 2007, the very next day after Laura Chick issued an “audit” in favor of the City of Los Angeles’ actions at the Playa Vista development and before she completed the process of responding to comments to the report by the City departments on August 7, 2007.

    Both Sheldon H. Sloan and Laura Chick would personally benefit from the removal of Fine from the practice of law, as would Sloan’s client, Marina Pacific Associates [the Epstein Family Trust, Jerry Epstein and Pat T. Epstein, Trustees],and the City of Los Angeles.

     Fine's filing of two writs, an appeal, and a “disqualification” of Commissioner Bruce E. Mitchell were also part of the State Bar's alleged case.
 

C.  State Bar Court Hearing Department Judges Honn and McElroy Each Had A Conflict of Interest Which Disqualified Them From Deciding the State Bar Case, and Rendered any Decision by Them Unconstitutional.

    Documents filed in the State Bar case show that State Bar Hearing Department Judge Richard A. Honn, who was the trial judge who ordered Fine's disbarment and who wrote the October 12, 2007, decision, did not disclose that he was a member of the Board of Governors of the Southern California Special Olympics, was a Board member with Gerald Hime of the LA County Office of Education, and that LA County donated two payments of $15,000 each to the Special Olympics from July 1, 2005, to January 18, 2008.  Honn also failed to disclose that Vincent H. Herron, of the lawfirm of Latham & Watkins, is a member of the Board of Directors.

    Documents filed in the State Bar case show that State Bar Hearing Department Judge Patrice E. McElroy, who was the Hearing Department judge who refused to disqualify Judge Honn, did not disclose that she was a member of the Board of Directors of the San Francisco Child Abuse Prevention Center; that Jerry Roth, of the lawfirm of Munger, Tolles & Olson LLP, is also a member of the Board of Directors; that the President of the State Bar as of September 29, 2007 (succeeding Sheldon H. Sloan) is Jeffrey Bleich, who is also a partner of Munger, Tolles & Olson (working from their San Francisco office); and that Campaign Contribution Records obtained from the Los Angeles Times showed that Munger, Tolles & Olson attorneys contributed $14,250 to LA County Supervisors Antonovich, Burke, Molina and Yaroslavsky from 2001-2005, demonstrating an interest in the County of Los Angeles beyond the ordinary citizen's. 

    The “Option” and Draft “Amended and Restated Lease” between the County and Del Rey Shores is marked “Approved as to Form” by Munger, Tolles and Olson on behalf of the County of Los Angeles.

    The failure to disclose violated Code of Civil Procedure Section 170.1(a)(6)(c), “a person aware of the facts might reasonably entertain a doubt that the judge would be able to be impartial”, and Code of Judicial Ethics Cannon 3E. (1) and (2) which state:

(1) A judge shall disqualify himself or herself in any proceeding in which disqualification is required by law.

(2) In all trial court proceedings, a judge shall disclose on the record information that is reasonably relevant to the question of disqualification under Code of Civil Procedure section 170.1, even if the judge believes there is no actual basis for disqualification.

    The Code of Judicial Ethics Cannons 2 A. and B., and 4 A. and C. (3)(c) prohibit a judge from acting in a manner to “to convey the impression that any individual is in a special position to influence the judge” (2B.(1)), “to advance the pecuniary or personal interests of the judge or others” (2B.(2), or “ serve as an officer, director, trustee, or nonlegal advisor if it is likely that the organization (I) will be engaged in judicial proceedings that would ordinarily come before the judge, or (ii) will be engaged frequently in adversary proceedings in the court of which the judge is a member” (4 C. (3)(c)(I) and (ii))(Emphasis added.)

    Under Article VI, Cl.2 of the U.S. Constitution, judges are required to follow the U.S. Constitution, laws and treaties.  State Bar judges took an oath to follow the U.S. Constitution.  Cannon 5 of the Code of Conduct for United States Judges states:

A JUDGE SHOULD REGULATE EXTRA-JUDICIAL ACTIVITIES TO MINIMIZE THE RISK OF CONFLICT WITH JUDICIAL DUTIES

Cannon 5 B. States:

B.  Civic and Charitable Activities. A judge may participate in civic and charitable activities that do not reflect adversely upon the judge's impartiality or interfere with the performance of judicial duties.  A judge may serve as an officer, director, trustee, or nonlegal advisor of an educational, religious, charitable, fraternal, or civic organization not conducted for the economic or political advantage of its members, subject to the following limitations:

(1) A judge should not serve if it is likely that the organization will be engaged in proceedings that would ordinarily come before the judge or will be regularly engaged in adversary proceedings in any court.

(2) A judge should not solicit funds for any educational, religious, charitable, fraternal, or civic organization, or use or permit the use of the prestige of the judicial office for that purpose, but the judge may be listed as an officer, director, or trustee of such an organization.  A judge should not personally participate in membership solicitation if the solicitation might reasonably be perceived as coercive or is essentially a fund-raising mechanism.

(3) A judge should not give investment advice to such an organization, but may serve on its board of directors or trustees even though it has the responsibility for approving investment decisions. (Emphasis added.)

    State Bar Hearing Department Judges Honn and McElroy should have disqualified themselves at the outset of the State Bar proceedings and never rendered any decisions in Fine’s case.  By not disqualifying themselves and by rendering decisions, they violated the due process clause of the Fourteenth Amendment to the U.S. Constitution.  In Clements v. Airport Authority of Washoe County (Cite), the court stated:

A biased proceeding is not a procedurally adequate one.  At a minimum, Due Process requires a hearing before an impartial tribunal.  Ward v. Village of Monroeville (Cite).  This impartial tribunal requirement applies in both civil and criminal cases.  Indeed, the requirement that proceedings which adjudicate individuals' interests in life, liberty, or property be free from bias and partiality has been "jealously guarded."  (Cite)  Thus, this neutrality principle has been applied to a variety of settings, including administrative adjudications, in order to protect the "independent constitutional interest in fair adjudicative procedure."  (Cite)  And, it has been invoked in the context of post-termination administrative proceedings.  Walker v. City of Berkeley, (Cite) (failure to provide impartial decision maker at the post-termination hearing constitutes constitutional error).  Moreover, any bias in the administrative process in Sue's case was not "cured" by the subsequent judicial review in state court.

Generally, an adjudication that is tainted by bias can not be constitutionally redeemed by review in an unbiased tribunal.  (Cite)

The Court stated:

“Nor, in any event, may the State's trial court procedure be deemed constitutionally acceptable simply because the State eventually offers a defendant an impartial adjudication. Petitioner is entitled to a neutral and detached judge in the first instance.  (Cite)  Ward holds that subsequent state court procedures, even if they include de novo review, can not "cure" bias in the initial adjudication.  ... The right to procedural due process is ‘absolute,’ and ‘the law recognizes the importance to organized society that those rights be scrupulously observed.’”  (Emphasis added.)

 

D.  The State Bar Review Department’s Action Was Also Unconstitutional, as the Review Department Judges Were Biased.

    The State Bar Review Department Judges Epstein, Remke and Stovitz were all defendants in the Federal case of Fine v. State Bar of California  (Cite) in which they were co-defendants with the State Bar, the Board of Governors, the Chief Trial Counsel [Prosecutor] and jointly represented by the General Counsel of the State Bar in a case seeking to declare unconstitutional the “Moral Turpitude” statute as applied and the “involuntary enrollment" statute as violating the First and Fourteenth Amendments.

    Each of the State Bar Review Department judges took the position in the joint brief to dismiss Fine's Federal case that the statutes did not violate the First and Fourteenth Amendments.  The issue of whether the statutes violated the First and Fourteenth Amendments was part of the State Bar case on review to California's appellate courts. The State Bar Review Department judges were biased as they had prejudged the issues in the case, and thereby violated the Fourteenth Amendment.

 

Conclusion

    After twenty years, approximately a billion dollars of taxpayer money lost, three unconstitutional contempt proceedings, one dismissed State Bar proceeding and one unconstitutional State Bar disbarment, hopefully honesty, integrity and justice can now return to the LA political and judicial systems.

 

Update:

    Additional information uncovered:

    LA County also uses a "private county corporation" (Los Angeles County Courthouse Corporation, Link) to fund the building of courthouses, despite the fact that a "Courthouse Fund" exists in the LA County General Fund.  The private corporation has judges on its Board of Directors.  The private corporation issues "Certificates of Participation" which are sold as securities to the public for the construction of the courthouse.  Once constructed, the private corporation then leases the courthouse to the County, with taxpayers paying a higher rate than they would have paid if a municipal bond had been issued.  This places the judges and the County in a position of "defrauding" taxpayers.  A municipal bond would have required a taxpayer vote.

    LA County used this same mechanism in 1993 by selling Marina del Rey to a "private county corporation," the Los Angeles County Capital Asset Leasing Corp. (Link), in a "byzantine bond financing" to cover the 1992-93 County budget shortfall.  The Capital Asset Leasing Corp., on May 25, 1993, also sold $133 million of tax-exempt "Certificates of Participation" backed by the anticipated revenues of the leases from Marina del Rey to the public, and an additional $55 million was placed with other County funds, for a total obligation of $188 million.  The $188 million was used to cover the budget shortfall.  After issuance of the "Certificates of Participation," Capital Asset Leasing Corp., also on May 25, 1993, immediately sold Marina del Rey back to the County.  Each year, $14.8 million of Marina lease revenues was used to pay off the "Certificates of Participation" through the year 2007.  This "debt" essentially reduced the net income from the lessees in the Marina to zero, or a net loss when all Marina operating expenses were considered.  Taxpayers paid for the 1993 budget deficit without voting for any "indebtedness."

    The relationships between the judge sitting on the Board of Directors of the corporation which owns the courthouse which is leased to LA County, and LA County being a party to the case, and the judge being part of the "fraud" upon the public, denies due process to persons litigating against LA County.

2009 © All Rights Reserved. Free Richard I. Fine™