Federal court abstains from ruling on CenterCal lawsuit
A rendering of CenterCal Properties’ once-planned Waterfront Redondo Beach development project. CenterCal is currently embroiled in lawsuits with the City of Redondo Beach. Rendering courtesy of CenterCal
A federal court will not rule on CenterCal Properties’ complaint against the City of Redondo Beach for terminating a lease framework regarding the all-but-dead Redondo Beach Waterfront project, leaving the decision to a California superior court.
In an opinion issued Wednesday by Judge Stephen Wilson, of the U.S. District Court Central District of California, the court granted the City’s motion to abstain from hearing federal claims from Redondo Beach Waterfront LLC, a subsidiary of CenterCal, leaving CenterCal’s complaint against the City to be litigated in state court.
“The Supreme Court has held that where complex issues of state law are intertwined with federal constitutional claims and resolution of the former may narrow or moot the federal constitutional issues, federal courts should allow state courts to resolve the state law claims first,” Wilson wrote, referencing the 1941 U.S. Supreme Court case of Railroad Commission of Texas v. Pullman Co.
The opinion also denies motions for sanctions made by both the City of Redondo Beach and CenterCal.
“We thought that – and have argued that – Federal court is the wrong jurisdiction to hear this,” said City Attorney Michael Webb. “It’s where we’ve always thought it should be, and now we’re looking forward to moving forward and answering their complaint.”
On October 26, Redondo sent CenterCal a Notice of Termination, stating the developer had defaulted on the Agreement for Lease of Property and Infrastructure Financing (ALPIF), the framework setting up the City’s potential lease with CenterCal.
CenterCal’s federal lawsuit, filed in March, was among the reasons for termination cited by the City. The ALPIF stated that any lawsuits must be filed in Los Angeles County Superior Court. A second lawsuit was filed by CenterCal in the superior court in November.
CenterCal’s court filings have argued that the City violated the developer’s constitutional rights to property and due process based on the City’s adoption of Measure C, which was passed by Redondo voters in March 2017. Measure C rewrote waterfront zoning to block the development of CenterCal’s project.
CenterCal’s filings also argue that, in supporting Measure C, then-City Council candidates Todd Loewenstein and Nils Nehrenheim, as well as then-Councilman and Mayoral candidate Bill Brand – all of whom won election – pushed a “localism agenda” that falsely represented the project and have misused their influence as Council members to urge actions by the California Coastal Commission.
“They’re fighting the statements [they] made as opposed to actual action of the majority of the council,” Webb said. “A Council member should be able to speak on matters of public importance. The actual acts of the council are the things that are the formal actions of the City.”
Betty Shumener, the attorney for Redondo Beach Waterfront, LLC, was unsurprised by the decision of the court.
“The federal court is deferring to the state court on certain preliminary land use issues. Thus far, all of our rights are preserved, and nothing of consequence has been lost or decided,” Shumener said. However, if CenterCal doesn’t get the ruling they seek from the superior court, they’re willing to take it back to the Federal court.
“We have the right to pursue our Constitutional claims in Federal court,” Shumener said. ER