[00:00:07] Speaker 03: Wait, just one second, okay? [00:00:09] Speaker 03: Okay, so you're Mr. Vora, right? [00:00:16] Speaker 03: Yes, sir. [00:00:16] Speaker 03: Okay, and the other side has two parties, Mr. Donas and Mr. Mahoney. [00:00:22] Speaker 03: I understand, Mr. Donas, you're going to have 12 minutes, is that correct? [00:00:28] Speaker 03: I'm sorry, Danas, I apologize. [00:00:30] Speaker 03: And Mr. Mahoney, you'll have three minutes, is that correct? [00:00:33] Speaker 00: Yes, and it's Maloney. [00:00:35] Speaker 03: Maloney. [00:00:35] Speaker 03: Okay. [00:00:36] Speaker 03: Well, this is okay. [00:00:36] Speaker 03: Very well. [00:00:37] Speaker 03: Glad we got that straightened out. [00:00:39] Speaker 03: Okay. [00:00:40] Speaker 03: All right. [00:00:41] Speaker 03: Mr. Borough, please proceed. [00:00:42] Speaker 05: Thank you, Your Honor. [00:00:43] Speaker 05: Good morning. [00:00:44] Speaker 05: My name is Amit Fora from Casowitz-Vincent Torres, and I represent relevant. [00:00:48] Speaker 05: This court should reverse the district court's grant of summary judgment to sunset because the court got it right the first time. [00:00:55] Speaker 05: This is precisely the sort of case that qualifies for the series exception to the North Pentacomprin. [00:00:59] Speaker 03: Well, let's start with that. [00:01:01] Speaker 03: Yes. [00:01:01] Speaker 03: Why, what case can you cite that says that a second district judge [00:01:10] Speaker 03: who takes over the case and who feels that the first judge got the law wrong, cannot rule differently. [00:01:21] Speaker 03: What's your best case? [00:01:24] Speaker 05: Delta Savings Bank, Your Honor, from this court. [00:01:27] Speaker 05: So the question that Your Honor poses is essentially whether an inter-aulatory holding can become law of the case. [00:01:34] Speaker 03: I want to talk up a little bit, as I mentioned to somebody else, is our acoustics are not great here. [00:01:39] Speaker 05: Oh, I apologize, Your Honor. [00:01:40] Speaker 05: So the case that I mentioned is Delta Savings Bank and the question your honor poses is whether an interlocutory holding can achieve law of the case status and in certain circumstances it can, particularly when the interlocutory holding is a case dispositive holding. [00:01:57] Speaker 05: or a very important holding on, say, a motion to dismiss or a motion for summary judgment. [00:02:02] Speaker 05: Not every discovery ruling will achieve that status. [00:02:05] Speaker 05: Not every scheduling order will achieve that status. [00:02:08] Speaker 05: But this sort of order will. [00:02:10] Speaker 05: And in Delta Savings Bank, the court encountered the same sort of situation that your honors are encountering there. [00:02:18] Speaker 05: One district court judge held that certain plaintiffs lacked [00:02:22] Speaker 05: certainly plaintiffs, excuse me, had standing and denied a motion to dismiss on that basis. [00:02:27] Speaker 02: But it's been dealt to savings. [00:02:28] Speaker 02: Didn't the Ninth Circuit say that we have to review the merits to decide whether there's an abuse of discretion? [00:02:34] Speaker 02: Yes. [00:02:34] Speaker 02: So if you lose on the merits, that probably also causes you to lose this argument. [00:02:39] Speaker 05: Well, Your Honor, however, the essential point is that the Court applied this three-part framework, and the three-part framework is, yes, [00:02:48] Speaker 05: The second judge has the discretion to change course, but there must be a cogent reason. [00:02:55] Speaker 05: And this court has actually explained what those reasons are. [00:02:58] Speaker 05: First, the first judge must get it clearly wrong, and there must be some sort of manifest injustice at play. [00:03:04] Speaker 05: Second, there must be some sort of new evidence. [00:03:06] Speaker 05: And third, there must be a change of the law. [00:03:09] Speaker 05: In Delta Savings Bank, there actually had been a change in the law. [00:03:12] Speaker 05: In Pitt River, that's another case that says that interlocutory holdings can achieve law of the case status. [00:03:18] Speaker 05: And in this case, given our substantive arguments, I don't think that there's a credible argument that the first judge was clearly wrong. [00:03:28] Speaker 03: Well, it seems to me we need to decide whether PREI or POSCO applies. [00:03:38] Speaker 03: I gather you like POSCO. [00:03:40] Speaker 05: Yes, Your Honor. [00:03:41] Speaker 03: And why? [00:03:43] Speaker 05: Your Honor, this case is atypical. [00:03:45] Speaker 05: Now, let me start with what I think Your Honor's concerns likely are. [00:03:51] Speaker 05: This is not a case that will stand for the proposition that a pre-suit demand letter is extortion, nor is it a case that will stand for the proposition that a series of such letters would sustain a Sila Rico violation. [00:04:03] Speaker 03: This is very different. [00:04:04] Speaker 03: Let me kind of give you where I'm coming from. [00:04:06] Speaker 03: You can maybe help me better. [00:04:07] Speaker 03: Sure. [00:04:08] Speaker 03: I used to do lots of environmental law, lots of CEQA, NEPA. [00:04:14] Speaker 03: And the process that's involved there involves all kinds of letters and appearances and reports and the like. [00:04:25] Speaker 03: The Pasco case was kind of weird. [00:04:27] Speaker 03: It's got like 29 separate cases. [00:04:30] Speaker 03: You don't have that here. [00:04:31] Speaker 03: It seems like Pasco is kind of a one-off. [00:04:34] Speaker 03: And what I'm struggling with is the idea that you can treat in what is clearly an administrative proceeding, where you get input from neighbors and, you know, all kinds of interested parties about whether the CEQA has been complied with. [00:04:53] Speaker 03: You got at least four different actions here, maybe more, but not 29. [00:04:59] Speaker 03: And I'm struggling with how we can apply PASCO instead of PREI. [00:05:05] Speaker 03: Help me with that, please. [00:05:07] Speaker 05: Your Honor, the touchstone is the volume of abusive litigation activity. [00:05:10] Speaker 05: And here, the volume was extraordinary. [00:05:12] Speaker 03: The volume of lawsuits or the volume of black filings? [00:05:15] Speaker 05: Abusive petitioning activity. [00:05:17] Speaker 05: And here, we have numerous data points in the record that show that this is not the sort of typical Suka case that were administrative or judicial. [00:05:27] Speaker 05: Proceeding that your honor is familiar with here. [00:05:29] Speaker 05: We have a plum committee member who said to defendants I know you've been here before this body many many many times before and have submitted very similar stacks of paper pleading with them to stop this sort of abuse I really appreciate your clients feeling of injury I get that and I think this state legislature in California particularly now where we're wanting housing and [00:05:53] Speaker 03: is realizing that CEQA needs to be amended. [00:05:55] Speaker 03: They've done it a number of times. [00:05:58] Speaker 03: But what I struggle with is this. [00:05:59] Speaker 03: You've got a situation where you have at least four different lawsuits, but in my understanding, in each case, you either withdrew or there was a settlement. [00:06:11] Speaker 03: And in almost every case, not only was there a monetary settlement, but there were other conditions [00:06:17] Speaker 03: that were imposed, which is the very kind of thing that you usually get in CEQA cases. [00:06:25] Speaker 03: How can it be a baseless case when you settle it? [00:06:30] Speaker 05: there's something deeply perverse about the argument that this $5.5 million settlement suggests it's baseless. [00:06:36] Speaker 05: Because the reason that Relevant settled was that it had this credible fear that it was at the brink of financial ruin. [00:06:44] Speaker 05: And the reason it felt that was that this litigation and this petitioning activity was overwhelming it, was crushing it. [00:06:49] Speaker 03: And the reason that- But with respect, and I do have empathy for your client. [00:06:56] Speaker 03: I get that. [00:06:57] Speaker 03: But it's kind of the way Seek was set up. [00:07:00] Speaker 03: It's been used by a lot of people over a lot of time to stop projects they don't like and many of them have gotten paid off, et cetera, et cetera. [00:07:08] Speaker 03: But the fact is, that's the legislature's doing. [00:07:11] Speaker 05: But Your Honor, in this settlement agreement, the sort of concessions that Sunset extracted were concessions that are actually antithetical to the whole purpose of CEQA. [00:07:20] Speaker 05: Here, relevant is actually now prohibited from challenging them on environmental grounds. [00:07:24] Speaker 03: In addition, what I'm struggling with is this. [00:07:28] Speaker 03: How can we get to the motivation, which is part of your case, if you settle the case? [00:07:33] Speaker 03: How can it be baseless, in quotes, [00:07:36] Speaker 03: if you settled the case, for whatever reason. [00:07:39] Speaker 05: Because the settlement is actually an element of the extortion, and here the settlement conditions are completely at counter purposes with the point of CEQA. [00:07:49] Speaker 05: As Your Honor knows, a 5.5 million damages award isn't available under CEQA, and the type of concessions they got here were to restrict Relevance's ability to conduct its commercial real estate business. [00:08:00] Speaker 05: They had restrictions on the number of hours that the relevant hotel properties could be operating, the number of staff that could be there. [00:08:08] Speaker 05: All these restrictions are geared toward benefiting the business interests of Sunset. [00:08:12] Speaker 03: And it happens all the time. [00:08:14] Speaker 03: All the time. [00:08:15] Speaker 03: But in this case, not only did the opposing party benefit, but in a few instances, if I understand the record correctly, other parties also benefited. [00:08:27] Speaker 03: They got things added. [00:08:29] Speaker 03: to the permit. [00:08:30] Speaker 05: Your Honor, but the question of whether this case is typical is an empirical question based on experience, and we actually have expert testimony in the record that says that this is extreme and atypical, so at the very least it raises a fact dispute that should have gone to the jury. [00:08:47] Speaker 05: Some fact-finders may agree with you that this is... What would go to the jury? [00:08:50] Speaker 03: Others might not. [00:08:51] Speaker 03: What would go to the jury? [00:08:52] Speaker 03: That it was baseless? [00:08:53] Speaker 03: Subjective motivated. [00:08:54] Speaker 03: You cannot get, under our case law, you cannot get to the [00:08:58] Speaker 03: ulterior motive until you've shown that the underlying action was baseless, right? [00:09:03] Speaker 05: And Your Honor, the settlement agreements are part of the argument that it's baseless, but also if Your Honors look at the actual merits of the administrative challenges and the judicial challenges, the lack of merit to these arguments is apparent from the plain text of what they're trying to convey. [00:09:23] Speaker 05: So for example, there's one [00:09:25] Speaker 05: Superior Court decision here, because as Your Honor mentioned, there were settlements. [00:09:29] Speaker 05: And in that one Superior Court decision, we have telling statements from the court. [00:09:36] Speaker 05: On transportation, the court said, this court will not countenance Sunset's blatant sandbagging. [00:09:41] Speaker 05: On parking, the court said, Sunset has failed to explain its reasoning. [00:09:44] Speaker 05: Sunset has failed to develop these points in any reasonable manner. [00:09:48] Speaker 05: So point by point, the one court that had an opportunity to evaluate whether these arguments are baseless or not said that they are baseless. [00:09:55] Speaker 05: And now for the other CEQA challenges. [00:10:00] Speaker 05: This is the Selma project and in this case this is not one of the ones that settled. [00:10:07] Speaker 05: Here the Superior Court issued a scathing ruling. [00:10:13] Speaker 05: So this one ended up with an interlocutory remand on an issue. [00:10:17] Speaker 05: So the problem was that there were so many studies in the record. [00:10:23] Speaker 05: This record was enormous that the court issued an interlocutory remand for clarity. [00:10:29] Speaker 05: Sunset actually appealed that decision. [00:10:31] Speaker 05: And the appellate court said that this is a non-appealable order, which is yet another example of just trying to pull every single lever. [00:10:37] Speaker 05: Now, we have a situation here that's extreme. [00:10:39] Speaker 05: And in the sequel cases that your honor is familiar with, rarely do you have a city attorney say something like, the city will not allow your firm to continue to hijack the administrative record preparation process to improperly delay the resolution of this litigation. [00:10:52] Speaker 05: We have a government attorney saying this, a pattern or practice of abusive. [00:10:57] Speaker 05: of abusing the administrative preparation process to improperly delay resolution of sequel lawsuits should not be allowed. [00:11:04] Speaker 05: So this is an extreme case. [00:11:07] Speaker 03: But again, you're obviously a capable lawyer. [00:11:11] Speaker 03: You're from another city, a well-known city, I might note, but I'm sure you have that happened there too. [00:11:17] Speaker 03: But this has happened again and again and again and again throughout the state of California. [00:11:24] Speaker 03: Throughout it. [00:11:25] Speaker 03: And there's been regular hearings before the state legislature with people like your client complaining about the way it's set up that they get hijacked, they get held up, et cetera. [00:11:36] Speaker 03: I get that. [00:11:37] Speaker 03: But if you settle, [00:11:41] Speaker 03: I think you undercut the idea that it is a baseless complaint. [00:11:46] Speaker 05: Your Honor, however, in this case, before the settlement, we even have statements from the other side saying that, look, we're not going to discuss anything about SQL. [00:11:53] Speaker 05: We just want a monetary payment. [00:11:55] Speaker 05: We have statements from the other side saying, you know the drill. [00:11:58] Speaker 05: We'll need a check. [00:11:59] Speaker 05: This is all data that should have gone to the jury for the fact finder to decide. [00:12:03] Speaker 03: But that's the second part of the formula, which you don't get to unless you have a baseless complaint. [00:12:08] Speaker 05: And Your Honor, I think that once you look at the actual arguments, which are in the record, the lack of merit to them will be readily apparent. [00:12:28] Speaker 01: I thought there were two sort of arguments here. [00:12:30] Speaker 01: One is that is it objectively baseless? [00:12:34] Speaker 01: If it is, then you can look at motivation. [00:12:36] Speaker 01: But there was another exception for sham litigation under Nora Pennington, which is there's a series of claims or abuses that, even though the person who's alleged to be doing this improperly may win on some of them, that doesn't matter, because there's a series of events. [00:12:52] Speaker 01: And in the case at issue, it was [00:12:54] Speaker 01: So, do you have a limiting test in mind? [00:12:59] Speaker 01: Is there a way that a district court could determine what counts as abusive process? [00:13:06] Speaker 01: Is it a letter? [00:13:07] Speaker 01: Is it appearing at a hearing? [00:13:09] Speaker 01: Is it an appeal? [00:13:10] Speaker 01: That seems hard to parse out to decide that there's multiple, multiple things happening as opposed to here's one cause of action or one proceeding. [00:13:18] Speaker 05: Yeah. [00:13:19] Speaker 05: Your Honor, that's a really helpful line of inquiry. [00:13:22] Speaker 05: So first, under the series exception, you're right. [00:13:25] Speaker 05: We don't necessarily even need to consider the merits. [00:13:27] Speaker 05: The question is actually the subjective motivation. [00:13:29] Speaker 05: And so I think the limiting principle would be, let's look at the evidence. [00:13:34] Speaker 05: Let's see what the subjective motivation is. [00:13:36] Speaker 05: And in this case, we have enough summary judgment evidence [00:13:39] Speaker 01: But the problem I'm having with your argument is before we even get there, we have to decide that the series exceptions in play, that it applies. [00:13:47] Speaker 01: And I understand that you disagree with sort of counting that seems clunky and four actions versus 29 or two versus 29. [00:13:57] Speaker 01: But how else can it be done? [00:13:58] Speaker 01: Well, you can just add up every single letter, phone call, meeting, appeal, appearance at a city council meeting, and all of those count as a different proceeding. [00:14:07] Speaker 05: Right, but in this situation, I think you would consider the volume of litigation activity, the volume of petitioning activity, and compare that to the normal case and see whether there is something atypical going on, something extreme. [00:14:18] Speaker 05: And this is the rare case that reaches that sort of extreme threshold. [00:14:22] Speaker 05: And in terms of counting, if we wanted to do a counting exercise, which might be more administrable, we still have four petitions. [00:14:30] Speaker 05: under at least four petitions. [00:14:33] Speaker 05: We have the four petitions that are all CEQA related if you take all the administrative and judicial challenges and then we have a number of others that actually don't fall into CEQA. [00:14:40] Speaker 05: There is the demolition permit challenge where they challenge a demolition permit with respect to a building that had already been demolished and every step of the way municipal and administrative bodies [00:14:53] Speaker 05: We're aghast at why Sunset was asking the body to do something that was ultra-virus. [00:14:59] Speaker 05: Then we have the letter to the prosecutors. [00:15:00] Speaker 05: And then we have yet another point. [00:15:03] Speaker 03: So we have seven at least. [00:15:07] Speaker 05: Yes, and I encourage your hours to follow. [00:15:10] Speaker 05: Yes, Your Honors, but I encourage Your Honors to follow that, and we would have at least seven, if not 20. [00:15:16] Speaker 05: But I think if Your Honor would like to do accounting sort of analysis, we still would win. [00:15:23] Speaker 05: Other on-point authorities would be Hanover, where four was enough. [00:15:27] Speaker 05: Here we have seven. [00:15:28] Speaker 01: Also- The four CEQA actions, the demolition objection, letters to prosecutors, that's six. [00:15:35] Speaker 01: What's your seventh? [00:15:35] Speaker 05: The LA Community Redevelopment Agency Challenge. [00:15:40] Speaker 05: So there, that is not part of the secret process, they once again raised a meritless claim. [00:15:45] Speaker 05: This time, their argument was, and your honor will be familiar with why this is a baseless argument, their argument was that a municipal authority does not have the power to issue a new zoning regulation and to change its own zoning regulations. [00:16:01] Speaker 05: And the courts have made it clear that it's well settled that rezoning is within a municipal authority's common law police power. [00:16:10] Speaker 05: These actions, these petitions, were baseless. [00:16:13] Speaker 05: We don't even need to reach that. [00:16:14] Speaker 05: If we do the series exception, we look at the volume of petitioning activity, which is extreme. [00:16:20] Speaker 05: Your Honor, if I may. [00:16:21] Speaker 03: OK, well, we'll give you some more time, because we used up a little of your time. [00:16:25] Speaker 05: Thank you, Your Honor. [00:16:26] Speaker 03: All right. [00:16:27] Speaker 03: And it's Danis, right? [00:16:31] Speaker 03: Danis. [00:16:32] Speaker 03: Danis. [00:16:32] Speaker 03: OK, I knew it was wrong. [00:16:33] Speaker 03: There they go. [00:16:34] Speaker 03: Danis. [00:16:34] Speaker 03: OK. [00:16:35] Speaker 04: Thank you very much, Your Honor. [00:16:36] Speaker 03: Thank you. [00:16:37] Speaker 03: 12 minutes, right? [00:16:39] Speaker 04: Yes. [00:16:39] Speaker 04: So I'll start with, I guess, where the colloquy had just left off, which is the idea, I believe, of opposing counsel was saying that if they were able to get the USS Pasco test, there's no inquiry into baselessness. [00:16:54] Speaker 04: That's simply not right. [00:16:55] Speaker 04: The US Supreme Court and PREI said, and I quote, nothing in California motor transport retreated from an indispensable objective component. [00:17:07] Speaker 04: And in California Motor Transport, the case was also talking about finding a pattern of baseless actions. [00:17:16] Speaker 04: So there has never been, and there is no recognized sham exception that entirely removes baselessness from the analysis. [00:17:25] Speaker 04: And as opposing counsel would have it be, it's simply a matter of looking at subjective intent. [00:17:30] Speaker 03: One reason. [00:17:31] Speaker 03: If we went with the Pasco approach, there's really no calving principle, is there? [00:17:37] Speaker 03: Did you count every letter? [00:17:38] Speaker 03: Did you count every appearance? [00:17:40] Speaker 03: In that case, it involved 29 separate actions. [00:17:44] Speaker 03: We don't have that here. [00:17:45] Speaker 03: PREI is the standard, is it not? [00:17:48] Speaker 04: Yeah, it is. [00:17:49] Speaker 04: PREI absolutely applies. [00:17:51] Speaker 04: But even if USS Pascoe applied, there is no case in the United States that they have been able to find other than one split decision from the Third Circuit in Hanover [00:18:01] Speaker 04: where it has been applied to single-digit cases such as we have here. [00:18:06] Speaker 04: There simply isn't. [00:18:07] Speaker 04: And Judge Greenberg, in the Hanover case, that is really their sole authority, goes to great lengths to say that we have never seen no case has ever applied that exception to so few proceedings. [00:18:20] Speaker 04: Even if we were under USS Pasco beyond that, this court's decision in USS Pasco talked about a batting average. [00:18:29] Speaker 04: And here, if you look at in the three different proceedings that we have, our batting average was there were no losses. [00:18:38] Speaker 04: And the reason why there were no losses was you look to, as Judge Smith was saying, the fact that in CEQA you have all of these preparatory administrative steps that one has to go through. [00:18:49] Speaker 04: They culminate in a case that's filed in court. [00:18:54] Speaker 04: right after the judge and Judge Fruin issued his ruling finding against them on an interlocutory issue within three hours. [00:19:06] Speaker 04: they called and pursued a settlement. [00:19:08] Speaker 04: That absolutely betrays the idea that it was the crushing burden of litigation that caused them to buckle. [00:19:15] Speaker 04: That would have been something that would have happened earlier on in the process. [00:19:18] Speaker 04: One doesn't buckle due to pressure from the process three hours after the ruling and the day before the trial. [00:19:25] Speaker 04: One buckles due to a fear of the result. [00:19:28] Speaker 04: And the reason here that they sought settlement [00:19:32] Speaker 04: obtained a settlement and under this court's rulings and theme promotions, a Ninth Circuit case from 2008 talking about the fact that settlement is evidence of lack of baselessness. [00:19:46] Speaker 04: there would be, there is, they have a zero percent loss or if we're looking at the batting average here and applying it, we were either a thousand percent, but certainly not zero percent. [00:19:58] Speaker 01: Well, what about, so there were the four actions, two settled, one there was an order for some sort of remand for reconsideration of an issue. [00:20:06] Speaker 01: The fourth one was withdrawn. [00:20:07] Speaker 01: Are you counting that as a victory with the action you withdrew? [00:20:10] Speaker 04: So the withdrawn action doesn't count at all under the Wellbutrin XL case that we cited withdrawn actions simply don't count. [00:20:19] Speaker 04: Plus, as Judge Gutierrez found, they conceded in their papers that it was not a predicate act. [00:20:26] Speaker 04: They said the Schrader objection is not a predicate act. [00:20:31] Speaker 04: So that leaves us with three others. [00:20:33] Speaker 04: One of them, the Selma decision, was a 60 page ruling that opposing counsel Cherry picks some favorable language in. [00:20:41] Speaker 04: But also, in that 60 page ruling, the court found that there were two CEQA violations. [00:20:47] Speaker 04: If there are any claims in an action that are viable, even if the other ones are not, that action is not baseless as a matter of law. [00:20:57] Speaker 04: So here, yes, there were claims that were lost in the Selma action. [00:21:01] Speaker 04: But we won on finding two different CEQA violations, substantial ones, on piecemealing and on noise, and sent it back down. [00:21:11] Speaker 04: And now, under a subsequent case that came out [00:21:15] Speaker 04: not too long ago, the Farmland Protection Alliance case, that would have been an automatic EIR, but now it was just sent back down. [00:21:24] Speaker 04: That was a win. [00:21:25] Speaker 04: Selma was a win. [00:21:26] Speaker 04: The first two actions, we were deprived of an opportunity to go to trial because they settled. [00:21:31] Speaker 04: And again, it can't be the rule that one can settle on the eve of trial, deprive us of an opportunity to go to trial and to prove our case, then turn around and without filing [00:21:43] Speaker 04: a state tort action without seeking sanctions, but simply then the next step being to file a five-year RICO action seeking trouble damages. [00:21:54] Speaker 04: That can't be the rule. [00:21:55] Speaker 04: The incentives there would absolutely undermine settlement, would make settlements impossible, and would actually lead to much more litigation. [00:22:04] Speaker 02: Council, I could see a principle being announced that there's no arbitrary numerical determination of when something is objectively unreasonable. [00:22:13] Speaker 02: It is at that point that it is objectively unreasonable, regardless of the number, and it can vary. [00:22:18] Speaker 02: But the second part of that would be, when is it no longer a jury question? [00:22:23] Speaker 02: Because we have got a summary judgment here that they're seeking to overturn. [00:22:26] Speaker 04: Yeah, so the issue in PREI, the US Supreme Court said the baselessness, the objective baselessness inquiry is not a jury question. [00:22:35] Speaker 04: So if one gets past the first part, which is the objective baselessness, which is for a court, and then can get into subjective intent, perhaps that might be a jury question. [00:22:46] Speaker 04: And here, there isn't even any evidence of ill intent, because as the amicus brief, I think, pointed out very well, the purposes of CEQA are about additional review, enhanced review, and public participation. [00:23:04] Speaker 04: So it would not make sense to make CEQA or to try and fit it into the box of other statutes. [00:23:11] Speaker 04: CEQA isn't only about preventing someone from being able to build at all. [00:23:15] Speaker 04: It's also about creating additional mitigation. [00:23:19] Speaker 04: It's also about just public participation in general. [00:23:23] Speaker 04: Those underlying purposes of CEQA were fully vindicated here. [00:23:29] Speaker 04: So there isn't even, even if you were under USS Pasco and even if you found that there was a first prong met, the second prong of ill intent wouldn't be met and should have been decided as a matter of law. [00:23:41] Speaker 03: So if I understand your answer to my colleague's question, [00:23:45] Speaker 03: under P.R.E.I. [00:23:48] Speaker 03: Baselessness is not a jury question. [00:23:51] Speaker 03: It's a legal question. [00:23:53] Speaker 03: Whether there was, in effect, science or evil intent on the part of your client in this case is a jury question, but you never get to that if you don't get past baselessness. [00:24:04] Speaker 04: Is that correct? [00:24:05] Speaker 04: Correct. [00:24:06] Speaker 04: There is no sham exception, or at least not under PRAI or California Motor Transport slash USS Pasco. [00:24:14] Speaker 04: One cannot find that those exceptions apply without doing some sort of baselessness analysis. [00:24:19] Speaker 01: Wait a minute. [00:24:19] Speaker 01: I understand your argument with respect to PREI and the two prongs that have been set forth, the first being objective baselessness. [00:24:27] Speaker 01: The second exception under POSCO seems different, and the dispute in the brief was about the number, counting numbers, a series as a 2, 4, 29, what is required to be a series and what is counted as you come to that number. [00:24:42] Speaker 01: And the idea is that even though some of these proceedings may have merit, as a whole they were brought without regard to merit and for the purposes of applying pressure or doing something illegal. [00:24:54] Speaker 01: So where does that decide? [00:24:57] Speaker 01: You're saying that that, you're looking at whatever the number is, whether all of them together were for a baseless reason, that is a legal question? [00:25:06] Speaker 04: Uh, I believe so. [00:25:08] Speaker 04: If I understand your honors question, I believe so. [00:25:10] Speaker 04: You mean the, the, the determination of which test applies is a legal question. [00:25:15] Speaker 01: Sure. [00:25:16] Speaker 01: And so it's a little muddled here because you keep going to PRAI because that's the test you believe applies. [00:25:23] Speaker 01: And they are of course saying, no, there were a number of things that happened here. [00:25:26] Speaker 01: Um, when dealing with a series of lawsuits, the question is not whether any of them has merit. [00:25:33] Speaker 01: Some may turn out just as a matter of chance, but whether they are brought pursuant to a policy of starting legal proceedings without regard to the merits and for the purpose of injuring a market rival, who decides that? [00:25:45] Speaker 01: Is that something the jury decides or something the court decides? [00:25:48] Speaker 04: I believe that would be a court decision. [00:25:50] Speaker 04: That would be a court decision. [00:25:51] Speaker 04: So that gets to this idea of sort of what I believe Judge Kaczynski was referring to as the batting average. [00:25:57] Speaker 04: That has to do with a court decision about what counts as a win and what counts not as a win. [00:26:03] Speaker 04: And if we're talking about, I mean, I want to make sure I'm answering your question. [00:26:07] Speaker 01: I guess the difficulty from, the difficulty would be if we count multiple things within a legal process as counting as a proceeding, letters, appearances, meetings. [00:26:22] Speaker 01: How does the court then determine, looking at all of those things, what, how does, I guess I don't understand how you determine if all of that was... Yeah, so I mean, I would direct this court to a couple questions, a couple cases. [00:26:35] Speaker 04: One would be the US Futures Exchange case, which found there that 54 different objections filed were all going to one aim. [00:26:45] Speaker 04: So there was essentially one proceeding for purposes of determining which test is going to apply. [00:26:51] Speaker 04: So it said, doesn't matter how many different letters you write or how many different particular steps there are, you look to the end. [00:26:58] Speaker 04: What is it going to? [00:26:59] Speaker 04: Here, we have three different challenges. [00:27:02] Speaker 04: We have the Tommy, the Thompson, and the Selma. [00:27:05] Speaker 04: No matter how many different steps were taken to try and influence decisions regarding those three hotels, [00:27:12] Speaker 04: those all are grouped together as three different proceedings for purposes of which test applies, if that applies. [00:27:20] Speaker 04: So I would say the US Futures Exchange goes to that. [00:27:23] Speaker 04: The CSMN case [00:27:25] Speaker 04: It's a 10th Circuit case that was cited in the amicus brief. [00:27:29] Speaker 04: That talks about whether there's a straight through line on the appeals. [00:27:33] Speaker 04: And I believe this gets to the idea of Insequa, where you have steps that you just have to walk through. [00:27:39] Speaker 04: You have to go to public comment. [00:27:41] Speaker 04: Then you have to go to the administrative appeal. [00:27:43] Speaker 04: And then you have to go to court. [00:27:45] Speaker 04: And it's just boom, boom, boom. [00:27:46] Speaker 04: They're in a straight line. [00:27:47] Speaker 04: That's CSMN. [00:27:49] Speaker 04: And finally, the wonderful real estate case, which is a district court case we cited in our papers, which actually [00:27:55] Speaker 04: applied in CEQA, finding that all of the CEQA actions get bunched together. [00:28:00] Speaker 04: And again, just to sum it up, Hanover is the only case in the United States where the PASCO or the series exception was actually applied to four actions. [00:28:14] Speaker 04: And even in the Hanover case, which is a split decision, the majority engaged in an objective baselessness analysis, showing that one can never just skip straight to the intent analysis. [00:28:25] Speaker 04: I see that I'm over, so. [00:28:27] Speaker 04: Okay. [00:28:28] Speaker 03: Very well. [00:28:29] Speaker 03: You're not quite over, but you're almost there, so we will wish you a fond good morning. [00:28:34] Speaker 03: Thank you very much. [00:28:35] Speaker 03: Thank you for your argument. [00:28:36] Speaker 03: So now, Mr. Maloney has got three minutes. [00:28:43] Speaker 00: All right. [00:28:44] Speaker 00: May it please the court. [00:28:44] Speaker 00: My name is Patrick Maloney. [00:28:46] Speaker 00: I'm one of the lawyers that actually was in this case since its inception, and I've spent a lot of time thinking about it. [00:28:53] Speaker 00: What we've got here is not an antitrust case. [00:28:55] Speaker 00: And the reason why that's important is when we go look at all of the law that gives us the POSCO test and the PREI test, those are largely antitrust cases. [00:29:06] Speaker 00: Antitrust focuses on anti-competitive behavior, different than RICO. [00:29:11] Speaker 00: RICO, you have to prove multiple felonies. [00:29:15] Speaker 00: And why that's important here is we have a party that says it wants to come to court [00:29:21] Speaker 00: improve four predicate acts, four felonies, the filing of three lawsuits, and the threat of filing a third. [00:29:30] Speaker 00: As the court noted, the first two cases, the Tommy and Thompson's lawsuit, settled together. [00:29:37] Speaker 00: What hasn't been brought up today is those cases were settled with the help of very competent counsel, big law firms we all know the name of. [00:29:46] Speaker 00: Those settlement agreements included a statement that there was no duress [00:29:52] Speaker 00: So we now have a situation where a litigant is saying, I settled a case. [00:29:56] Speaker 00: I'm not happy with the settlement. [00:29:58] Speaker 00: I want another bite at the apple. [00:30:00] Speaker 00: They can't do that in California State Court because they never got a favorable determination ever, which means if they try to go to malicious prosecution route, they lose. [00:30:10] Speaker 00: The Selma case, it's ongoing. [00:30:13] Speaker 00: There's no favorable termination. [00:30:15] Speaker 00: And they can read into the record comments the court made. [00:30:20] Speaker 00: But the court was sufficiently concerned [00:30:22] Speaker 00: the trial court that it sent it back for remand. [00:30:26] Speaker 00: They've not written a check to settle that case. [00:30:27] Speaker 00: That case remains ongoing. [00:30:30] Speaker 00: The Schrader case [00:30:32] Speaker 00: That's a case, when I think of Noor Pennington and this California court analog, the demand letter process worked. [00:30:39] Speaker 00: And as I was reviewing our authorities this morning, the Cozier case and others, they talked about the benefits of a demand letter in early conversations to get rid of frivolous activity and frivolous lawsuits. [00:30:49] Speaker 00: It worked there. [00:30:51] Speaker 00: What you've got is they've got four predicate acts. [00:30:53] Speaker 00: None are objectively baseless. [00:30:55] Speaker 00: So they invoke an antitrust doctrine. [00:30:57] Speaker 00: where you don't have to prove anything as a felony to try to use other little things they can find in the record that they're not confident enough to assert as a predicate act to try and make those little weird bits of character evidence make the four actual lawsuits in which none of which they won into felonies. [00:31:18] Speaker 00: It's illogical to think that when you have an ongoing lawsuit, that rises to the level of a RICO predicate act. [00:31:24] Speaker 00: Nobody's won, nobody's lost. [00:31:26] Speaker 00: It's illogical to think when you agree to settle a case with lawyers that you're the victim of a felony. [00:31:34] Speaker 00: So the reason why PRE has to apply here is you don't have any predicate acts at all. [00:31:40] Speaker 00: And the only way they can get there is to rely on an entirely different tense. [00:31:45] Speaker 00: I hit my time perfect. [00:31:46] Speaker 00: Thank you. [00:31:46] Speaker 03: Perfectly. [00:31:47] Speaker 03: Thank you very much. [00:31:49] Speaker 03: All right. [00:31:49] Speaker 03: Mr. Rear, we'll give you a couple of minutes to rebut, please. [00:31:56] Speaker 05: Thank you, Your Honor. [00:31:56] Speaker 05: I'd like to correct some of what my friends on the other side have been saying about these two different inquiries, because I think they've been somewhat conflated. [00:32:08] Speaker 05: Now with the series exception to the North Pennington doctrine, we have binding authority saying that this exception involves an inquiry into whether the petitions were brought pursuant to a policy of starting them without regard to the merits and for an unlawful purpose. [00:32:24] Speaker 05: So again, without regard to the merits. [00:32:26] Speaker 05: So we can't conflate the two inquiries. [00:32:30] Speaker 05: And I'm not saying that the merits has nothing to do with the series exception. [00:32:33] Speaker 05: I'm simply saying that the inquiries must be kept at distinct. [00:32:36] Speaker 03: Is it your contention that your side, in quotes, won any of the four filed actions? [00:32:46] Speaker 05: Yes, Your Honor. [00:32:47] Speaker 05: I think if you look at the Selma ruling, [00:32:52] Speaker 05: that would be a victory where you won you with a successful party your honor for one the question it's not our burden to show that we won the question is whether they've been bringing frivolous lawsuits so the question is whether they can claim to have won but if your honor looks at that decision and is asked to determine which party [00:33:18] Speaker 05: came out on top, that would be us in that decision. [00:33:21] Speaker 05: Their objections were rendered meritless. [00:33:23] Speaker 05: Now, as I've mentioned, under the series exception, however, the inquiry is whether they are abusing the process in this court instead in Clipper. [00:33:33] Speaker 05: a case from 1982 Ninth Circuit. [00:33:36] Speaker 05: It is not the number of claims which is controlling, but whether the evidence shows that the claim or claims filed constitute an abusive process. [00:33:43] Speaker 05: So it's not just Hanover that we're relying on. [00:33:45] Speaker 05: We're relying on Supreme Court authority, discourse authority, Hanover and Wall from the Fourth Circuit. [00:33:50] Speaker 05: There are a number of cases which explain what the series exception is all about. [00:33:54] Speaker 05: This is the sort of case where the other side has abused legal process and has therefore satisfied series exception. [00:34:02] Speaker 05: Even if Your Honor disagrees, I respectfully submit that we are not clearly wronged. [00:34:08] Speaker 03: So under... Thank you, Your Honor. [00:34:11] Speaker 03: Thanks to all counsel for your argument. [00:34:15] Speaker 03: This is an interesting case and we will render a decision soon. [00:34:20] Speaker 03: The court stands adjourned for the day. [00:34:35] Speaker 01: This court for this session stands adjourned.