Court Opinion

ID: 4467751
Source: CourtListenerOpinion
Date Created: 2019-12-26 18:02:09.921502+00
Date Added: 2024-06-11T14:35:14.291435
License: Public Domain

IN THE SUPREME COURT OF
               CALIFORNIA

      SAN DIEGANS FOR OPEN GOVERNMENT,
               Plaintiff and Appellant,
                           v.
 PUBLIC FACILITIES FINANCING AUTHORITY OF THE
            CITY OF SAN DIEGO et al.,
            Defendants and Respondents.

                           S245996

           Fourth Appellate District, Division One
                         D069751

              San Diego County Superior Court
               37-2015-00016536-CU-MC-CTL

                      December 26, 2019

Justice Corrigan authored the opinion of the Court, in which
Justices Chin, Liu, Cuéllar, Kruger, and Groban concurred.

Chief Justice Cantil-Sakauye filed a concurring and dissenting
opinion.
     SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC
    FACILITIES FINANCING AUTHORITY OF THE CITY OF
                      SAN DIEGO
                            S245996

              Opinion of the Court by Corrigan, J.

       A citizens’ taxpayer organization sued to invalidate
certain contracts allegedly made in violation of Government
Code section 1090. The question is whether Government Code
section 1092 gives plaintiff the statutory standing to do so. We
hold that section 10921 does not provide plaintiff a private right
of action because it was not a party to the contracts. The Court
of Appeal’s judgment to the contrary is reversed. The matter is
remanded for further proceedings.
                      I. BACKGROUND
      Under section 1090, government officials and employees
cannot be financially interested in any contract made by them
in their official capacity or by any body of which they are a
member. The statute codifies the long-standing common law
rule prohibiting public officials from having personal financial
interests in contracts they form in their official capacities.
(Lexin v. Superior Court (2010) 47 Cal. 4th 1050, 1072.) Both the
common law and section 1090 “recognize ‘[t]he truism that a
person cannot serve two masters simultaneously.’ ” (Lexin, at p.
1073, quoting Thomson v. Call (1985) 38 Cal. 3d 633, 637

1
     All unspecified      statutory   references     are   to   the
Government Code.

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    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
        FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                 Opinion of the Court by Corrigan, J.

(Thomson); see also San Diego v. S. D. & L. A. R. R. Co. (1872)
44 Cal. 106, 113.) Section 1090 has a broad reach, prohibiting
both direct and indirect financial interests in public contracts.
(See Moody v. Shuffleton (1928) 203 Cal. 100, 103-105.) The
penalty for a violation is substantial: The interested official
must disgorge any profits earned, and may not recover any
consideration paid, under the contract. (Thomson, at pp. 646-
652.)
      Section 1092 provides that any contract made in violation
of section 1090 “may be avoided at the instance of any party
except the officer interested therein.” (§ 1092, subd. (a).) The
dispute here revolves around the meaning of the phrase “any
party.” Some background will provide context.
      In 2007, the City of San Diego issued bonds to finance the
construction of Petco Park. In 2015, the City sought to refinance
the remaining debt on those bonds. It adopted an ordinance and
its Public Facilities Financing Authority (PFFA) passed a
resolution authorizing the issuance of new bonds to accomplish
the refinancing.2 Shortly thereafter, San Diegans for Open
Government (plaintiff) sued the City and PFFA (collectively,
defendants), asserting that aspects of the refinancing
transaction violated section 1090 because at least one member
of the financing team, which included both city employees and
private organizations, had a financial “interest in one or more
contracts for the sale of the 2015 Bonds.” Plaintiff claimed it
was seeking relief “under Code of Civil Procedure Sections 860

2
      PFFA is a joint powers authority that was originally
established by the City and its redevelopment agency to assist
in the financing of public capital improvements.

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    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
        FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                  Opinion of the Court by Corrigan, J.

et seq. and 1060 et seq.” The complaint asserted a single cause
of action, alleging that the bond issuance violated provisions of
the California Constitution, the City’s charter and municipal
code, and section 1090. Plaintiff sought a judgment declaring
the bond transaction’s approval unlawful and an injunction
prohibiting defendants from acting to further the bond issuance.
      Plaintiff ultimately agreed to entry of judgment as to all
allegations except the section 1090 violation. Defendants then
argued that plaintiff lacked standing as to that issue, citing San
Bernardino County v. Superior Court (2015) 239 Cal. App. 4th
679 (San Bernardino). Plaintiff argued it had standing under
section 1092 and Code of Civil Procedure section 526a.3 Plaintiff
also mentioned it had timely filed its action under the validation
statutes. (Code Civ. Proc., § 860 et seq.) The trial court ruled
for defendants, concluding that section 1092 only confers
standing on the parties to a challenged contract, and that
plaintiff also lacked standing under Code of Civil Procedure
section 526a. The remaining action was dismissed.

3
      Code of Civil Procedure section 526a permits certain
individuals and corporations to sue “to obtain a judgment,
restraining and preventing any illegal expenditure of, waste of,
or injury to” a local agency’s funds or property. (Code Civ. Proc.,
§ 526a, subd. (a); see also Weatherford v. City of San Rafael
(2017) 2 Cal.5th 1241, 1245 (Weatherford).) The “primary
purpose” of the statute “is to ‘enable a large body of the citizenry
to challenge governmental action which would otherwise go
unchallenged in the courts because of the standing
requirement.’ [Citation.]” (Blair v. Pitchess (1971) 5 Cal. 3d 258,
267-268.)

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    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
        FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                 Opinion of the Court by Corrigan, J.

      Plaintiff appealed. In the Court of Appeal, the parties
agreed that Code of Civil Procedure section 863 did not provide
plaintiff an independent right of action to assert a section 1090
violation.4 As to whether plaintiff could proceed under Code of
Civil Procedure section 526a, plaintiff argued that it could,
while defendants argued subdivision (b) of that provision barred
plaintiff’s claims for relief.5
       The Court of Appeal held that the term “party” in section
1092 means “any litigant with an interest in the subject contract
sufficient to support standing,” and that plaintiff possessed such
an interest. (San Diegans for Open Government v. Public
Facilities Financing Authority of City of San Diego (2017) 16
Cal.App.5th 1273, 1284 (San Diegans).) Because it found
plaintiff could pursue its claim under section 1092, it did not
decide whether plaintiff could proceed under Code of Civil
Procedure section 526a. (San Diegans, at p. 1285, fn. 4.)

4
      The parties presented no argument here on whether or
how Code of Civil Procedure section 863 might apply to this
action. We express no opinion on the matter.
5
      Subdivision (b) of Code of Civil Procedure section 526a
prohibits the granting of an injunction “restraining the offering
for sale, sale, or issuance of any municipal bonds” for public
improvements or facilities.         Defendants asserted this
subdivision barred plaintiff from proceeding under Code of Civil
Procedure section 526a because, if plaintiff obtained the relief it
sought, the effect would be to enjoin the bond issuance.

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   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                 Opinion of the Court by Corrigan, J.

                       II. DISCUSSION
      A.    General Rules Regarding Standing and Causes of
Action
      “Unlike the federal Constitution, our state Constitution
has no case or controversy requirement imposing an
independent jurisdictional limitation on our standing doctrine.”
(Weatherford, supra, 2 Cal.5th at pp. 1247-1248.) Typically, to
have standing, a plaintiff must plead an actual justiciable
controversy and have some “special interest to be served or some
particular right to be preserved or protected over and above the
interest held in common with the public at large.” (Carsten v.
Psychology Examining Com. (1980) 27 Cal. 3d 793, 796.) This
requirement has been relaxed in some contexts. For example,
California courts have consistently held that taxpayers have
standing to prevent illegal conduct by public officials despite the
lack of a special interest or right distinct from that belonging to
the general public. (See e.g., Weatherford, at p. 1248; Crowe v.
Boyle (1920) 184 Cal. 117, 152; Mock v. City of Santa Rosa (1899)
126 Cal. 330, 345.)
       Though standing requirements are construed more
liberally in litigation enforcing public rights, a plaintiff suing
under a particular statute still must show that it is among those
with “a statutory right to relief.” (Weatherford, supra, 2 Cal.5th
at p. 1248.) Here, the question is whether plaintiff has a cause
of action creating a right to relief under section 1092. “Whether
a statute gives rise to a private right of action is a question of
legislative intent.” (County of San Diego v. State of California
(2008) 164 Cal. App. 4th 580, 609; see also Boorstein v. CBS
Interactive, Inc. (2013) 222 Cal. App. 4th 456, 466.) The intent
may be express or implied (Lu v. Hawaiian Gardens Casino, Inc.

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    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
        FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                  Opinion of the Court by Corrigan, J.

(2010) 50 Cal. 4th 592, 597 (Lu)), but either way “the Legislature
must clearly manifest an intent to create a private cause of
action under [the] statute” (id. at p. 601, fn. 6, citing Moradi-
Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal. 3d 287,
295). The burden of persuasion is with the party claiming a
statutory right to sue. (Lu, at p. 601.)
      B.    Plaintiff Cannot Sue Under Section 1092
       Section 1092 provides in relevant part that “[e]very
contract made in violation of any of the provisions of Section
1090 may be avoided at the instance of any party except the
officer interested therein.” (§ 1092, subd. (a).) Defendants argue
the phrase “any party” includes only parties to the challenged
contract. Plaintiff argues the phrase applies more broadly to
embrace other interested persons and organizations like itself.
       The Court of Appeal agreed with plaintiff. It reasoned
that the “important policy embodied in section 1090 . . . will not
be vindicated if public officials believe section 1090’s substantive
provisions may only be enforced by the very public officials or
public entities who have violated the statute’s provisions.” (San
Diegans, supra, 16 Cal.App.5th at pp. 1283-1284.) “[A] public
official’s duty to avoid even temptation cannot be advanced by
adopting a rule which limits civil enforcement to that public
official or public entities controlled by the official.” (Id. at p.
1284.) The court also found that the “weight of authority” stood
for the proposition that “standing to assert section 1090 claims
goes beyond the parties to a public contract.” (Ibid.)6 Based on

6
    In support of this conclusion, the Court of Appeal cited
Thomson, supra, 38 Cal. 3d 633, Stigall v. City of Taft (1962) 58

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   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                 Opinion of the Court by Corrigan, J.

“that authority and the important and strict policy embodied in
section 1090,” the court interpreted “section 1092’s reference to
‘any party’ to include any litigant with an interest in the subject
contract sufficient to support standing.” (San Diegans, at p.
1284.) This would include, according to the court, parties with
interests sufficient to support standing under Code of Civil
Procedure sections 526a and 863. (San Diegans, at p. 1285.)
      We read the statute differently. “We begin with the text
of the statute as the best indicator of legislative intent.” (Tonya
M. v. Superior Court (2007) 42 Cal. 4th 836, 844.) The statute
refers to a “contract made in violation” of section 1090, then
provides that any such contract “may be avoided by any party
except the officer interested therein.” (§ 1092, subd. (a).) The
most natural reading of this language is that the phrase “any
party” refers back to the contract; that is, any party to the
contract can sue to avoid it. The use of the word avoid in section
1092 also supports this construction. Typically, we speak of a
party to a contract avoiding its legal obligations thereunder.
(See e.g., Rest.2d Contracts, § 7 [“[a] voidable contract is one
where one or more parties have the power . . . to avoid the legal
relations created by the contract”].) Indeed, the Restatement
Second of Contracts notes that “[a]voidance is often referred to
as ‘disaffirmance.’ ” (Rest.2d Contracts, § 7, com. b, p. 20.) A

Cal.2d 565 (Stigall), California Taxpayers Action Network v.
Taber Construction, Inc. (2017) 12 Cal.App.5th 115 (California
Taxpayers), McGee v. Balfour Beatty Construction, LLC (2016)
247 Cal. App. 4th 235 (McGee), Davis v. Fresno Unified School
Dist. (2015) 237 Cal. App. 4th 261 (Davis), Gilbane Building Co.
v. Superior Court (2014) 223 Cal. App. 4th 1527 (Gilbane),
Finnegan v. Schrader (2001) 91 Cal. App. 4th 572 (Finnegan),
and Terry v. Bender (1956) 143 Cal. App. 2d 198 (Terry).

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    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
        FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                  Opinion of the Court by Corrigan, J.

non-party does not possess the power to affirm or disaffirm a
contract. (Ibid. [“[u]sually the power to avoid is confined to one
party to the contract, but [under certain circumstances] the
contract may be voidable by either one of the parties”].)
      This conclusion finds further support in provisions of the
Civil Code governing the formation and interpretation of
contracts. (See Smith v. Fair Employment & Housing Com.
(1996) 12 Cal. 4th 1143, 1156 [reviewing the “Legislature’s use
of the words ‘marital status’ ” in the Family and Probate Codes
to determine the meaning of that word in a Government Code
provision]; see also Pesce v. Dept. Alcoholic Bev. Control (1958)
51 Cal. 2d 310, 312; Picayune Rancheria of Chukchansi Indians
v. Brown (2014) 229 Cal. App. 4th 1416, 1428.) Civil Code section
1559, for example, provides that a “contract, made expressly for
the benefit of a third person, may be enforced by him at any time
before the parties thereto rescind it.” (Italics added.) In this
provision, the Legislature uses the term “party” to refer to a
contractual party,7 as distinguished from a “person,” who is not
a contractual party.8 The careful usage of these terms in the

7
       See also Civil Code sections 1558 [“[i]t is essential to the
validity of a contract . . . that the parties should exist [and] that
it should be possible to identify them,” italics added]; 1636 [“[a]
contract must be so interpreted as to give effect to the mutual
intention of the parties as it existed at the time of contracting,”
italics added]; 1689, subd. (a) [“[a] contract may be rescinded if
all the parties thereto consent,” italics added].
8
       See also Civil Code sections 1556 [“[a]ll persons are
capable of contracting, except minors, persons of unsound mind,
and persons deprived of civil rights,” italics added]; 1586 [“[a]
proposal may be revoked at any time before its acceptance is

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   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                  Opinion of the Court by Corrigan, J.

Civil Code indicates that, when the Legislature uses the term
“party” in a statute referencing a contract, it typically means a
party to that contract.
      The San Bernardino court construed section 1092 in this
fashion. There, two taxpayer groups attempted to rely on
section 1092 and Code of Civil Procedure section 526a to avoid
a settlement agreement between a county and a partnership
after a supervisor who voted in support pled guilty to accepting
bribes. (San Bernardino, supra, 239 Cal.App.4th at p. 683.) The
trial court overruled the defendants’ demurrer, which argued
that the plaintiffs lacked standing. (Ibid.) The Court of Appeal
reversed. Rejecting the plaintiffs’ argument that they were
entitled to sue under section 1092, the court reasoned that
nothing in the statute’s plain language “grants nonparties to the
contract . . . the right to sue on behalf of a public entity that may
bring a claim as provided in section 1092.” (San Bernardino, at
p. 684.) Indeed, “the Legislature’s choice of the word ‘party’ in
section 1092—as opposed to, say, ‘person’—suggests the
Legislature intended only parties to the contract at issue
normally to have the right to sue to avoid contracts made in
violation of section 1090.” (Ibid.)
      Plaintiff argues the term “party” in section 1092 should be
read to include persons who are not parties to the challenged
contract. Plaintiff argues section 1092’s exception, which
prohibits “the officer interested therein” from suing to avoid a

communicated to the proposer, but not afterwards,” italics
added]; 1670.7 [declaring void any contract that “purports to
allow a deduction from a person’s wages” for emigration and
transportation costs, italics added].

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    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
        FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                 Opinion of the Court by Corrigan, J.

contract (§ 1092, subd. (a)), supports its construction. Because
the agency, not the officer, would normally be the party to the
contract, there would have been no reason according to plaintiff
for the Legislature to create this exception unless the term
“party” includes those who are not parties to the contract.
       This argument is easily rejected. To be sure, on the
government’s side, the public agency typically would be the
contractual party. But the financially interested officer could of
course be one of the other parties to a challenged contract. In
County of Shasta v. Moody (1928) 90 Cal. App. 519, for example,
the defendant owned a printing business and was also a county
supervisor. While the defendant held that public office, “he did
printing, advertising, job work and sold supplies to . . . various
county officials of the county of Shasta, including the board of
supervisors,” and was paid for that work. (Moody, at p. 520.) In
other words, the county was one party to the contract that
allegedly violated section 1090, and the financially interested
officer was the other party to that contract. (See also Berka v.
Woodward (1899) 125 Cal. 119, 121.) The exception prohibiting
suit by an interested officer would prevent that officer from
suing on his or her own behalf, as a contractual party, to avoid
the contract. Thus, the phrase “any party” need not be read to
include nonparties in order for that exception to make sense.
      Plaintiff also argues the term “party” could be read to
include a party to litigation concerning the contract. Plaintiff
points out that, in the article of the Government Code in which
sections 1090 and 1092 are found,9 the word “party” is followed

9
      Sections 1090 and 1092 are in article 4 of chapter 1 of
division 4 of title 1 of the Government Code.

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     SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
         FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                  Opinion of the Court by Corrigan, J.

by the qualifier “to any proceeding” on one occasion (§ 1091.4,
subd. (b)) and by the qualifier “to litigation” on another (§ 1091,
subd. (b)(15)). Plaintiff urges that the use of these qualifiers
shows the term “party” has a broader meaning in this context
and includes persons other than the contractual parties.10
      These textual arguments fall short. As mentioned, the
sentence in which the phrase “any party” appears begins by
referencing a “contract made in violation” of section 1090.
(§ 1092, subd. (a).) The word “party” may not be directly
adjacent to the qualifiers set out above, but it is most natural to
read that word as referring back to the contract mentioned at
the beginning of the sentence. Indeed, the Legislature may have
thought it unnecessary to qualify the term “party” in section
1092, subdivision (a), because that subdivision already
references a contract made in violation of section 1090. To add
the qualifier “contracting” to the phrase “any party” in section
1092 arguably would have been redundant.
      In any event, the ultimate question is whether the
Legislature has clearly manifested an intent to create a private
right of action. (Lu, supra, 50 Cal.4th at p. 601, fn. 6.) If the

10
       The concurring and dissenting opinion makes a similar
point. It notes that the word “party” appears in this article 35
times; that, in 32 of those instances, the word is directly
preceded or followed by the qualifiers “contracting,” “to the
contract,” or “to a contract”; that, in two of those instances, the
word is followed by the qualifiers “to any proceeding” and “to
litigation”; and that, “[o]nly in section 1092 does the word ‘party’
appear without any qualifier.” (Conc. & dis. opn., post, at p. 7;
see also id. at p. 7, fn. 5.) Thus, it is fair to infer “that the
Legislature intended for the word ‘party’ within section 1092 to
encompass more than a ‘contracting party.’ ” (Id. at p. 7.)

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     SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
         FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                 Opinion of the Court by Corrigan, J.

Legislature has clearly expressed an intent one way or the other,
“that usually ends the inquiry.” (Animal Legal Defense Fund v.
Mendes (2008) 160 Cal. App. 4th 136, 142.) If it has “expressed
no intent on the matter either way, . . . there is no private right
of action [citation], with the possible exception that compelling
reasons of public policy might require judicial recognition of
such a right.” (Ibid., citing Moradi-Shalal v. Fireman’s Fund
Ins. Companies, supra, 46 Cal.3d at pp. 304-305.)
      Here, the Legislature has clearly expressed an intent that
parties to public contracts may sue to avoid those contracts
under section 1092. As to nonparties, however, there is no such
clear expression of intent.11 Accordingly, we cannot find that
plaintiff has a private right of action unless there are compelling
policy reasons to do so. Those reasons do not exist here. The
Court of Appeal based its interpretation of section 1092 on both
case law and the necessity of vindicating the policies embodied
in section 1090. Neither reason compels us to read an intent
into the statute that does not appear on its face.
            1.    The Case Law
      None of the cases cited by the Court of Appeal addressed
the precise issue presented: Whether a nonparty taxpayer can

11
       Moreover, as noted, the Legislature has prohibited
injunctions restraining municipal bond offerings, sales, and
issuances. (Code Civ. Proc., § 526a, subd. (b).) There appear to
be sound policy reasons underlying that prohibition. (Cf.
McLeod v. Vista Unified School Dist. (2008) 158 Cal. App. 4th
1156, 1167-1168.) Construing section 1092 to permit nonparties
to sue to avoid contracts for section 1090 violations would
effectively provide an end-run around the Legislature’s bar on
claims seeking to enjoin municipal bond issuances.

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   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                 Opinion of the Court by Corrigan, J.

sue under section 1092 to avoid a government contract on
conflict-of-interest grounds. The case law has been less than
clear in discussing the distinction between standing and causes
of action. Although a number of cases cited by both parties
purport to address a taxpayer’s “standing” to enforce section
1090, these cases ultimately address whether a taxpayer had a
cause of action under either Code of Civil Procedure section 526a
or section 1092. In Terry, supra, 143 Cal. App. 2d 198, for
example, the plaintiff brought a taxpayer action under Code of
Civil Procedure section 526a, alleging a city’s payment of a
warrant would violate section 1090. (Terry, at pp. 201, 206-207.)
The Court of Appeal did not discuss whether the plaintiff could
sue under section 1092. Instead it ruled that Code of Civil
Procedure section 526a provided “express statutory
authorization to maintain [the] action.” (Terry, at p. 208.)
      Similarly, in Gilbane, supra, 223 Cal. App. 4th 1527, the
plaintiff sued under Code of Civil Procedure section 526a
alleging that contracts between a school district and certain
construction companies violated section 1090. (Gilbane, at p.
1530.)     The Court of Appeal found the plaintiff had
“associational standing” under Code of Civil Procedure section
526a, and did not discuss whether section 1092 authorized the
plaintiff to sue. (Gilbane, at p. 1531.) Terry and Gilbane thus
stand for the proposition that a nonparty taxpayer can invoke
the substantive prohibitions of section 1090 in an action
authorized by Code of Civil Procedure section 526a. They do
not, however, support the conclusion that a nonparty taxpayer
can sue to avoid a public contract under section 1092.
     Neither do Stigall, Thomson, and Finnegan. In Stigall,
supra, 58 Cal. 2d 565, this court did not address whether the

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     SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
         FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                  Opinion of the Court by Corrigan, J.

plaintiff could sue under section 1092. We simply noted that the
plaintiff taxpayer sought a declaration that a plumbing contract
was invalid under section 1090 (Stigall, at pp. 566-568), and
then proceeded to the merits of the claim.12 In Thomson, supra,
38 Cal. 3d 633, the question was “what remedies are available
once a section 1090 violation is found and the fully performed
underlying contract is adjudged void.” (Thomson, at p. 638.) It
had already been determined in an earlier suit that the contract
violated section 1090. (Thomson, at pp. 637-638.) Thus, we
were not called upon in Thomson to determine whether the
plaintiff could sue under section 1092.13
      In Davis, supra, 237 Cal. App. 4th 261, the Court of Appeal
concluded that a taxpayer had alleged facts sufficient to state a
section 1090 claim. (Davis, at pp. 270, 271, 301.) The court also
opined that “[t]he term ‘any party’ [in section 1092] is not
restricted to parties to the contract.” (Id. at p. 297, fn. 20.) That
statement was dictum; as the court noted, the defendants had
not challenged the plaintiff’s “standing to bring the conflict of

12
      Like Stigall, Finnegan involved a “taxpayer’s suit” seeking
a declaration that a government contract violated section 1090.
(Finnegan, supra, 91 Cal.App.4th at p. 575.) The court did not
address the question of standing. Nor did it address whether
the plaintiff was authorized to bring his suit under section 1092.
13
      The concurring and dissenting opinion argues that
“Thomson . . . shows that a nonparty can seek to avoid the terms
of a contract.” (Conc. & dis. opn., post, p. 6.) But our analysis
in Thomson, supra, 38 Cal. 3d 633 did not expressly rely on the
operation or application of section 1092. We do not dispute that
a taxpayer can invoke the conflict-of-interest rule in section
1090 to challenge a public contract. The question is whether he
or she may do so under section 1092, and Thomson provides no
answer.

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   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                 Opinion of the Court by Corrigan, J.

interest claim under . . . section 1090.” (Ibid.) Thus, Davis also
does not support the conclusion that a nonparty taxpayer can
sue under section 1092.
       That leaves McGee and California Taxpayers. In McGee,
supra, 247 Cal. App. 4th 235, a taxpayer sued claiming that an
agreement between a school district and a construction company
violated a number of statutes, including section 1090. (McGee,
at p. 239.) A demurrer was sustained in part on the ground the
plaintiff lacked standing. (Id. at p. 246.) The Court of Appeal
reversed, holding the plaintiffs had alleged a cause of action for
a section 1090 violation. (McGee, at p. 246.) It did not mention
section 1092. While McGee supports the conclusion that a
taxpayer can assert a section 1090 violation, it does not hold that
the plaintiff can sue under section 1092.
      Like McGee, California Taxpayers, supra, 12 Cal.App.5th
115, involved a reverse validation claim that an agreement
between a school district and a construction company violated
section 1090 and other statutes. (California Taxpayers, at pp.
123-124.) The result was similar as well. The Court of Appeal
reversed an order sustaining a demurrer as to the section 1090
claim. (California Taxpayers, at pp. 122, 145.) The court took
note of San Bernardino, supra, 239 Cal. App. 4th 679, but
reasoned that Gilbane, Davis, and McGee “ha[d] recognized that
an action under . . . section 1090 may be brought by a taxpayer.”
(California Taxpayers, at p. 141.) As explained, none of those
cases addressed whether a nonparty taxpayer can sue under
section 1092. California Taxpayers does not do so either.
     In summary, there seems to be no dispute that a nonparty
taxpayer whose action meets the requirements of Code of Civil
Procedure section 526a can sue under that section alleging a

                                 15
   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                 Opinion of the Court by Corrigan, J.

government contract violates section 1090. (See, e.g., Terry,
supra, 143 Cal. App. 2d 198; Gilbane, supra, 223 Cal. App. 4th
1527.) Additionally, some cases have assumed that a plaintiff
can invoke section 1090 without explaining the statutory
authorization for the plaintiff’s lawsuit. (See, e.g. Thomson,
supra, 38 Cal. 3d 633; Stigall, supra, 58 Cal. 2d 565; California
Taxpayers, supra, 12 Cal.App.5th 115; McGee, supra, 247
Cal. App. 4th 235; Davis, supra, 237 Cal. App. 4th 261; Finnegan,
supra, 91 Cal. App. 4th 572.) But whether a plaintiff may invoke
section 1090 and whether a plaintiff may sue to avoid a contract
under section 1092 are distinct questions. None of the cases the
Court of Appeal cites support the conclusion that a nonparty
may sue under section 1092 to avoid a contract. The only case
to directly consider the question held that section 1092 did not
create a private right of action. (San Bernardino, supra, 239
Cal.App.4th at pp. 684-685.)
           2.     Compelling Policy Reasons
      Nor is the Court of Appeal’s interpretation of section 1092
necessary to vindicate the policies embodied in section 1090.
Section 1092 is not the only vehicle for enforcing the substantive
prohibitions in section 1090. On the contrary, the conflict-of-
interest rule is backed by an array of administrative, civil, and
criminal enforcement mechanisms.
      First, the Attorney General or a district attorney can
criminally prosecute a person who willfully violates section 1090
(§ 1097.1, subd. (b)) and, if convicted, that person can be
punished by a fine or by imprisonment, and is “forever
disqualified from holding any office in this state” (§ 1097, subd.
(a)). Second, the Fair Political Practices Commission (the
Commission) can bring an administrative action against any

                                 16
     SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
         FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                 Opinion of the Court by Corrigan, J.

person who has violated section 1090. (§ 1097.1, subd. (a).) The
Commission can “investigate possible violations of Section 1090”
(§ 1097.2, subd. (a)), issue subpoenas (§ 1097.2, subd. (e)), and
hold hearings to determine if a violation occurred (§ 1097.2,
subd. (c)). The Commission may also file “a civil action for an
alleged violation of Section 1090.” (§ 1097.3, subd. (a).) If held
liable, the violator may be fined up to $10,000 or three times the
value of the financial benefit received. (Ibid.) The existence of
such a comprehensive enforcement scheme is strong evidence
the Legislature did not intend to create a private right of action
for nonparties to the contract. (See Animal Legal Defense Fund
v. Mendes, supra, 160 Cal.App.4th at pp. 143-144; Crusader Ins.
Co. v. Scottsdale Ins. Co. (1997) 54 Cal. App. 4th 121, 136.)
      Because violations of section 1090 can be challenged by
contractual parties under section 1092, by taxpayers under Code
of Civil Procedure section 526a where appropriate, and by the
Attorney General, district attorneys, and the Fair Political
Practices Commission, there is no compelling reason to conclude
that section 1092 creates a private right of action for nonparties
to sue to avoid public contracts.14
       C.   Plaintiff May Be Able To Proceed Under Code of Civil
            Procedure Section 526a
      Below, the parties debated whether plaintiff’s claims for
relief were permitted or barred by Code of Civil Procedure
section 526a, based on the particular facts alleged.         As
mentioned, the Court of Appeal declined to address the question.

14
     To the extent Holloway v. Showcase Realty Agents, Inc.
(2018) 22 Cal.App.5th 758 is inconsistent with this opinion, we
disapprove that decision.

                                 17
   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                  Opinion of the Court by Corrigan, J.

       The parties argued each side of the issue in their briefs to
this court. Neither party disputes that Code of Civil Procedure
section 526a is, as a general rule, available to taxpayers who
wish to challenge government contracts affected by financial
conflicts of interest. We agree. (See ante, pp. 15-16.) But the
statute also prohibits the granting of an injunction “restraining
the offering for sale, sale, or issuance of any municipal bonds”
for public improvements or facilities. (Code Civ. Proc., § 526a,
subd. (b).) The parties have disagreed as to how that prohibition
applies here, given the nature of plaintiff’s request for relief.
The prayer for relief in plaintiff’s complaint indicated that it was
seeking, among other things, a judgment declaring the bond
transaction invalid. At oral argument, plaintiff suggested for
the first time that it was only seeking disgorgement of payments
received by the allegedly-conflicted officers for their role in
administering the bond issuance. The question of what
particular form of relief plaintiff is seeking, and whether such
relief is available under Code of Civil Procedure section 526a,
should be answered first by the Court of Appeal. The parties
agreed at oral argument that a remand would be the best course
of action were we to find section 1092 does not provide plaintiff
a private right of action.

                                  18
  SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
      FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
                Opinion of the Court by Corrigan, J.

                     III. DISPOSITION
      The Court of Appeal’s judgment is reversed. The matter
is remanded for the Court of Appeal to decide whether this
plaintiff may proceed under Code of Civil Procedure section
526a or any other statutory provision.

                                                   CORRIGAN, J.
     We Concur:

     CHIN, J.
     LIU, J.
     CUÉLLAR, J.
     KRUGER, J.
     GROBAN, J.

                                19
     SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC
    FACILITIES FINANCING AUTHORITY OF THE CITY OF
                      SAN DIEGO
                            S245996

              Concurring and Dissenting Opinion
               by Chief Justice Cantil-Sakauye

       The purpose of the conflict-of-interest statutes, including
Government Code sections 1090 and 1092,1 is to protect the
public. This purpose takes on special importance in the context
of municipal bonds because of the prevalent use and economic
importance of these bonds in the state of California.2 California
relies on these bonds to make capital improvements and to build
and maintain public works, each of which is “a quintessentially
public function.” (Department of Revenue of Ky. v. Davis (2008)
553 U.S. 328, 342; see Cal. Debt, supra, table 3.) Consistent
with the fact that these bonds are “the way to shoulder the
cardinal civic responsibilities [of] protecting the health, safety,
and welfare of citizens,” it is the citizenry, or taxpayers, who

1
       All further statutory references are to the Government
Code unless otherwise indicated.
2
       See California Debt and Investment Advisory Committee,
2018 Summary of California Public Debt Issuance (hereafter
California Debt), tables 1, 2  [as of Dec. 23, 2019]
[reporting that in 2018 California and its political subdivisions
issued approximately $62 billion in public debt, of which $50
billion was in the form of bonds]. All Internet citations in this
opinion are archived by year, docket number, and case name at
.
   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
            Cantil-Sakauye, C. J., concurring and dissenting

ultimately pay for these bonds. (Department of Revenue of Ky.
v. Davis, at p. 342, fns. omitted.)
       One would think, then, that municipal bond issuances
would be subject to the most exacting scrutiny — the kind of
scrutiny needed to detect and remedy conflicts of interest that
could both undermine public confidence in this crucial financing
vehicle and saddle taxpayers with large enduring financial
obligations. Yet, today’s majority opinion holds otherwise. The
majority interprets section 1092’s language providing that “any
party” may bring a judicial action to avoid a contract involving
a prohibited conflict of interest as conferring standing only upon
the parties to the very contract to be avoided. I disagree. I do
not believe the Legislature created a scheme that counts on the
foxes to guard the henhouse, and leaves taxpayers helpless to
halt even the most egregiously conflicted government bond
issuances. The likely result under the majority’s rule is that no
one will bring a challenge to avoid a government contract
afflicted with a conflict of interest. Because I do not believe
section 1092 should to be read so narrowly as to deliver this
unfortunate outcome and nothing in its language compels such
an interpretation, I respectfully dissent.
              I. STANDING UNDER SECTION 1092
       The question before us is one of statutory interpretation.
Section 1090 states, “Members of the Legislature, state, county,
district, judicial district, and city officers or employees shall not
be financially interested in any contract made by them in their
official capacity, or by any body or board of which they are
members.” (§ 1090, subd. (a).) Section 1092, in turn, specifies,
“Every contract made in violation of any of the provisions of
Section 1090 may be avoided at the instance of any party except
the officer interested therein.” (§ 1092, subd. (a).)

                                   2
   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
            Cantil-Sakauye, C. J., concurring and dissenting

      In parsing the term “any party” in section 1092, we must
decide whether the term refers to only parties to the challenged
contract or whether it applies more broadly to encompass a
taxpayer group like plaintiff San Diegans for Open Government
(SDOG). If the former, then only contractual parties to a
“contract made in violation of . . . Section 1090” have standing
under section 1092 to challenge the contract. (§ 1092, subd. (a).)
      As with any statutory construction case, we begin “by
considering the statute’s language and structure, bearing in
mind that our fundamental task in statutory interpretation is to
ascertain and effectuate the law’s intended purpose.”
(Weatherford v. City of San Rafael (2017) 2 Cal.5th 1241, 1246
(Weatherford).) In the context of standing, we have recognized
that although “th[e] analysis [to determine standing] is
grounded in the statutory text, the text read in isolation can be
insufficient to adequately capture . . . other . . . considerations
that have traditionally informed the outer limits of standing.”
(Id. at pp. 1248-1249.) We therefore maintain a “sensitivity to
the larger context . . . to better effectuate the Legislature’s
purpose in providing certain statutory remedies.” (Id. at
p. 1249.)
      The majority holds that the term “any party” in section
1092 means “any party to the contract.” (Maj. opn., ante, at p. 7.)
I disagree. I believe the term “any party” is ambiguous and
capacious enough to reach plaintiff taxpayer group. Indeed,
when section 1092 is read in light of the statutory structure and
the imperative to “effectuate the . . . intended purpose” of the
conflicts-of-interest statutes, the term should be understood to
confer standing on interested taxpayers. (Weatherford, supra,
2 Cal.5th at p. 1246.)

                                   3
   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
            Cantil-Sakauye, C. J., concurring and dissenting

     A. The Text of Section 1092
      I begin with the text of section 1092, which, as noted,
states, “Every contract made in violation of any of the provisions
of Section 1090 may be avoided at the instance of any party
except the officer interested therein.” (§ 1092, subd. (a).) The
majority asserts that because section 1092 mentions a “contract
made in violation of . . . Section 1090,” the term “any party”
“refers back to the contract” and should be read to mean
contractual parties. (Maj. opn., ante, at p. 7.) But simply
because this is one plausible interpretation of section 1092
does not mean it is the only such interpretation.
       The term “any party” is easily understood to mean a
“person” or “litigant,” a designation encompassing nonparties to
the challenged contract. (See Merriam-Webster Online Dict.
 [as of
Dec. 23, 2019] [defining “party” to include “a particular
individual: person”]; Black’s Law Dict. (11th ed. 2019) p. 1350,
col. 1 [defining “party” both as “[s]omeone who takes part in a
transaction” and “[o]ne by or against whom a lawsuit is
brought”]; accord Black’s Law Dict., at p. 1695, col. 2 [defining
standing as “[a] party’s right to make a legal claim or seek
judicial enforcement of a duty or right” (italics added)].)
      A number of courts, including the Court of Appeal in this
case, have reached conclusions that are consistent with this
reading. (See San Diegans for Open Government v. Public
Facilities Financing Authority of City of San Diego (2017)
16 Cal.App.5th 1273, 1280-1283, 1284-1285 (San Diegans)
[discussing these cases]; Davis v. Fresno Unified School Dist.
(2015) 237 Cal. App. 4th 261, 297, fn. 20 [“The term ‘any party’ is
not restricted to parties to the contract”].) The only Court of

                                   4
   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
            Cantil-Sakauye, C. J., concurring and dissenting

Appeal to have adopted a more constrained construction is San
Bernardino County v. Superior Court (2015) 239 Cal. App. 4th
679. The majority opinion approves of San Bernardino,
contending that its interpretation of section 1092 is “[t]he most
natural.” (Maj. opn., ante, at p. 7.) Yet every Court of Appeal to
have considered San Bernardino has disagreed with it. (See
Holloway v. Showcase Realty Agents, Inc. (2018) 22 Cal.App.5th
758, 767-770 [noting that “[s]ince the time of the trial court’s
decision in the present case, a number of cases have criticized
the rationale in San Bernardino” and joining the chorus of
criticism]; San Diegans, supra, 16 Cal.App.5th at p. 1284 [“we
do not agree with the limited interpretation of section 1092
adopted by the court in San Bernardino”]; McGee v. Balfour
Beatty Construction, LLC (2016) 247 Cal. App. 4th 235, 248
(McGee).) This seems to leave room for doubt concerning
whether the majority’s restrictive reading of section 1092 is, in
fact, the most reasonable.
      Neither of the two remaining bases the majority musters
to support its interpretation of section 1092 entirely persuades
me either. The majority first says that because section 1092
allows a “contract made in violation . . . of Section 1090 [to] be
avoided” and “[a] nonparty does not possess the power to [avoid]
a contract,” we should infer that only contractual parties have
standing under section 1092. (Maj. opn., ante, at pp. 7-8.) But
our own case law offers a counterexample to the idea that
nonparties cannot avoid a contract.
      In Thomson v. Call (1985) 38 Cal. 3d 633 (Thomson), a
taxpayer group that was not a party to a government contract
successfully avoided the municipality’s responsibilities under
that contract on the basis that the agreement violated section

                                   5
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
        FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
            Cantil-Sakauye, C. J., concurring and dissenting

1090.3 The facts of Thomson are as follows: a councilman (Call)
sold the City of Albany, by way of a middleman, a parcel of land
he and his wife owned. (38 Cal.3d at p. 637.) The Calls received
$258,000 from the transaction. (Id. at p. 643.) When the
transaction was found to violate section 1090, the trial court’s
solution was to allow the City of Albany “to retain the land and,
at the same time, recover the $258,000 plus interest from the
Calls.” (Thomson, at p. 646.) We recognized the “harsh[ness]”
of this remedy but ultimately approved of it, reasoning that “the
goals and policy concerns underlying section 1090” warranted
such solution. (Id. at p. 647.) Thomson thus shows that a
nonparty can seek to avoid the terms of a contract.4 In light of
such precedent, I do not see why we would be compelled to
interpret section 1092’s reference to “avoid[ance]” to mean that
only a party to the contract may seek such a remedy. (§ 1092,
subd. (a).)
     The majority next looks to the “provisions of the Civil
Code” to buttress its conclusion that the term “any party” in

3
       Not incidentally, this is exactly what SDOG has said it is
seeking to do in this case: unwind a bond purchase agreement
alleged to have been made in contravention of section 1090 so
the City of San Diego would be reimbursed for the costs it paid
under the agreement.
4
       The majority asserts that Thomson “provides no answer”
to the ultimate question before us, whether a nonparty taxpayer
may invoke section 1092 to challenge a public contract. (Maj.
opn., ante, at p. 14, fn. 13.) In other words, Thomson is not
controlling in the present case. I do not contend that it is.
Rather, I reference Thomson to show that it is not just parties
to a contract who may sue to “avoid[] [the] legal obligations
thereunder,” and thus “[t]he use of the word avoid in section
1092” does not bear the weight the majority’s construction puts
on it. (Maj. opn., ante, at p. 7.)

                                   6
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
        FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
            Cantil-Sakauye, C. J., concurring and dissenting

section 1092 means any contracting party. (Maj. opn., ante, at
p. 8.) I agree that we should look to the “ ‘structure and . . .
surrounding provisions’ ” of section 1092 to ascertain its
meaning. (Weatherford, supra, 2 Cal.5th at pp. 1246-1247.) But
it is the provisions neighboring section 1092 that are most
germane, not those from outside the Government Code.
      In the article where section 1092 is found, the word “party”
appears 35 times. In all of these instances, when the Legislature
intends the word “party” to mean “contractual party,” it modifies
the word “party” with a qualifier — “contracting,” “to the
contract,” “to a contract” — that makes its intent unmistakably
clear. (See §§ 1091, subds. (b)(2), (3), (5), (6), (8), (14), (d)
[referring to “contracting party”], 1091.5, subd. (a)(4), (10)
[same], 1091, subd. (b)(10) [“party to the contract”]; § 1091.5,
subds. (a)(11), (b) [same], 1091.5, subd. (a)(14) [“party to a
contract”].)5 In short, it appears that when the Legislature
intends to refer to contracting parties, it does not simply say
“party.” Only in section 1092 does the word “party” appear
without any qualifier. It is fair to infer from the absence of any
modifying language in this context that the Legislature
intended for the word “party” within section 1092 to encompass
more than a “contracting party.”6

5
      In two instances, statutes within this article refer to
“party to litigation” and “party to any proceedings.” (§§ 1091,
subd. (b)(15), 1091.4, subd. (b).)

6
     The majority states that to add a qualifier “to the phrase
‘any party’ in section 1092 arguably would have been
redundant.” (Maj. opn., ante, at p. 11.) I cannot entirely

                                   7
   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
            Cantil-Sakauye, C. J., concurring and dissenting

      In sum, read in isolation, the term “any party” in section
1092 is at least ambiguous. In my view, the term is as
susceptible to applying “broadly to embrace other interested
persons” who are not parties to a contract as it is to a more
restrictive reading. (Maj. opn., ante, at p. 6.) Any ambiguity is
removed however when I consider the purpose, policy, and aim
of section 1092.
      B. The Purpose of Section 1092
      Because section 1092 provides a mechanism to enforce the
rule against conflicts of interest set forth in section 1090, a few
words regarding the purpose of section 1090 are appropriate.
The goals behind section 1090 are to “eliminat[e]” financial
temptation faced by public officials, “avoid[] the appearance of
impropriety,” and “assur[e] the [municipality] of the officer’s
undivided and uncompromised allegiance.” (Thomson, supra,
38 Cal.3d at p. 648.) In light of these goals, we have said that

disagree with this carefully couched assertion, because in saying
that a qualifying addition “arguably would have been
redundant,” the majority acknowledges that it arguably would
not have been redundant. (Ibid.) Indeed, such an addition
would not have been clearly surplusage. Even the provisions
cited by the majority show that the Legislature may modify the
word “party” although the statutory language already
references a contract. (See id. at p. 8 & fn. 7.) For instance,
Civil Code section 1689 provides that “[a] contract may be
rescinded if all the parties thereto consent.” (Civ. Code, § 1689,
subd. (a), italics added; see also id., § 1559 [“[a] contract, made
expressly for the benefit of a third person, may be enforced by
him at any time before the parties thereto rescind it”].) As such,
had the Legislature wanted to, it easily could have drafted
section 1092 to read, “Every contract made in violation of any of
the provisions of Section 1090 may be avoided at the instance of
any party thereto,” without being redundant.

                                   8
   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
            Cantil-Sakauye, C. J., concurring and dissenting

section 1090 deserves “strict enforcement.”              (Thomson, at
p. 650.)
       The “strict enforcement” of section 1090 necessarily
depends in part on who may sue to enforce its substance.
(Thomson, supra, 38 Cal.3d at p. 650.) Simply put, however
strict the prohibitions of section 1090 are, if no one could — or
would — bring suit to vindicate its provisions, then section 1090
is a paper tiger. In the context of a different conflict-of-interest
statute (section 526a of the Code of Civil Procedure), we have
recognized the need to empower “ ‘a large body of the citizenry
to challenge governmental action which would otherwise go
unchallenged in the courts because of the standing
requirement.’ ” (Weatherford, supra, 2 Cal.5th at p. 1251.) That
same need arises in the context of section 1090, and this is where
section 1092 plays a crucial role.
      Section 1092 allows “any party except the officer interested
therein” to bring suit. (§ 1092, subd. (a), italics added.) The
majority’s interpretation of section 1092 means that in
circumstances in which every party to the contract is for one
reason or another an interested government official no one will
be able to sue for avoidance under the statute. (See, e.g., People
v. Superior Court (Sahlolbei) (2017) 3 Cal.5th 230, 235, 243
[discussing a case in which the counterparty to a government
contract was an interested person because, while working for a
school district, she “advised the district to retain her consulting
company . . . , which the district did”]; California Taxpayers
Action Network v. Taber Construction, Inc. (2017) 12
Cal.App.5th 115, 145; McGee, supra, 247 Cal.App.4th at p. 249.)
     Even when it is not the case that all parties to a contract
are “[m]embers of the Legislature, state, county, district,

                                   9
   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
             Cantil-Sakauye, C. J., concurring and dissenting

judicial district, . . . [or] city officers or employees,” such parties
may still have little incentive to unwind a transaction that they
have ratified. (§ 1090, subd. (a).) Government officials would
appear to have little financial or political motivation to sue on
behalf of the public when, by suing, the officials themselves
could be implicated for alleged collusion, delay, malfeasance, or
negligence. A private counterparty to the contract also may
have little reason to bring suit, given that it won the contract or
otherwise engaged with the public entity and so likely would not
want to disrupt the status quo, invite bad press, or rouse
suspicion that it engaged in bribery or collusion with a public
official.
      In other words, I believe the court below was correct when
it said, “The strict and important policy embodied in section
1090 . . . will not be vindicated if public officials believe section
1090’s substantive provisions may only be enforced by the very
public officials or public entities who have violated the statute’s
provisions.” (San Diegans, supra, 16 Cal.App.5th at pp. 1283-
1284.) Because “a public official’s duty to avoid even temptation
cannot be advanced by adopting a rule which limits civil
enforcement to that public official or public entities controlled
by the official,” I would not adopt such a rule. (Id. at p. 1284.)
      The majority recognizes the public policies that support
the decision below but maintains that “the Court of Appeal’s
interpretation of section 1092 [is not] necessary to vindicate the
policies embodied in section 1090.” (Maj. opn., ante, at p. 16.)
According to the majority, this is because there are other
mechanisms “for enforcing the substantive prohibitions in
section 1090.” (Ibid.) These are: criminal prosecutions under
section 1097, civil or administrative actions brought by the Fair
Political Practices Commission (FPPC), and civil actions “by

                                   10
   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
            Cantil-Sakauye, C. J., concurring and dissenting

taxpayers under Code of Civil Procedure section 526a where
appropriate.” (Maj. opn., ante, at p. 17.) In my opinion, none of
these provisions quite fills the gap left by the majority’s
construction of section 1092.
      Neither the threat of criminal prosecution nor action by
the FPPC protects the public in the way that section 1092 does
— or at least, should. An official may be criminally prosecuted
only if he or she “willfully and knowingly” violates section 1090.
(People v. Chacon (2007) 40 Cal. 4th 558, 570; see § 1097, subd.
(a).) This heightened mens rea requirement leaves a swath of
instances in which the official may have had an improper
interest, the public was deprived of his or her “absolute loyalty
and undivided allegiance,” and yet there is no recourse to be had
from the Attorney General or district attorney. (Stigall v. Taft
(1962) 58 Cal. 2d 565, 569.)
      The FPPC, meanwhile, cannot act except upon “written
authorization from the district attorney of the county in which
the alleged violation occurred.” (§ 1097.1, subd. (b).) Thus, in a
case in which the district attorney, for whatever reason,
withholds authorization, the FPPC cannot even begin “an
investigation that might lead to administrative or civil action”
against an interested official. (Ibid.) Moreover, neither the
FPPC nor criminal prosecutors can offer the public the remedy
available under section 1092: avoidance of the contract.
Although the penalties afforded in FPPC or criminal actions are
not insubstantial (see §§ 1097, subd. (a), 1097.3, subd. (a)), their
target are the officials themselves, not the resulting contracts
foisted on the public. And the public may be both less interested
in sending someone to prison than unwinding a raw deal and
less well served by a fine than by halting a bond transaction
infected with self-interest.

                                  11
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
        FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
            Cantil-Sakauye, C. J., concurring and dissenting

      This leaves us with Code of Civil Procedure section 526a.
An action brought under section 526a that disputes the validity
of a bond is subject to a short 60-day statute of limitations. (See
McLeod v. Vista Unified School Dist. (2008) 158 Cal. App. 4th
1156, 1166-1170.) This is in contrast to the four-year statute of
limitations afforded to actions brought under Government Code
section 1092. (§ 1092, subd. (b).)
      More importantly, in examining the limits of Code of Civil
Procedure section 526a, we come full circle with the importance
of bonds and the public interest. The majority refers to this
limitation, acknowledging that under subdivision (b) of section
526a “no injunction shall be granted restraining the offering for
sale, sale, or issuance of any municipal bonds for public
improvements or public utilities.” (Code Civ. Proc., § 526a,
subd. (b); see maj. opn., ante, at p. 18.)7 In other words, when
municipal bonds are at stake — precisely the instance in which
the taxpayers bear the costs of paying for the public debt —
taxpayers may not seek to “restrain[] the offering for sale, sale,
or issuance” of any of those bonds under section 526a. (Code
Civ. Proc., § 526a, subd. (b).) Yet the availability of such a
remedy is crucial. Once bonds have issued, attempts to claw
them back, rewrite their terms, or otherwise renegotiate the
issuance may prove impossible. In the absence of preemptive

7
      Relying on this provision, the majority argues that
“[c]onstruing section 1092 to permit nonparties to sue to avoid
contracts for section 1090 violations would effectively provide an
end-run around the Legislature’s bar on claims seeking to enjoin
municipal bond issuances.” (Maj. opn., ante, at p. 12, fn. 11.)
Given that parties to the contract presumably could bring such
claims, however, there is no reason to think that actions seeking
injunctions on municipal bond issuances are, by necessity, the
“end-run[s]” the majority makes them out to be. (Ibid.)

                                  12
   SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
       FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
            Cantil-Sakauye, C. J., concurring and dissenting

remedies like an injunction, self-interested governmental
dealings may well inflict costly and irreparable harm on the
public.
      Put differently, today majority’s opinion holds that in
cases in which government officials make contracts that amount
to writing checks on the public’s checkbooks, the public cannot
stop them. This did not need to be the outcome. Section 1092 is
readily capable of being read as conferring standing on nonparty
taxpayer groups to bring a challenge in such circumstances.
I would read the section thusly.
                         II. CONCLUSION
      Like the Court of Appeal, I believe “plaintiff taxpayers
have standing under Government Code section 1092 to
challenge the [City of San Diego’s] ordinance on the grounds
participants in the proposed transaction violated the conflict of
interest provisions of section 1090.” (San Diegans, supra,
16 Cal.App.5th at p. 1276, fn. omitted.) I therefore would affirm
the judgment below.
      The majority today reverses and remands to the Court of
Appeal “to decide whether this plaintiff may proceed under Code
of Civil Procedure section 526a.” (Maj. opn., ante, at p. 19.)
Although I dissent from the decision to reverse, I do not oppose
a remand given the majority’s disposition.

                                         CANTIL-SAKAUYE, C. J.

                                  13
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion San Diegans for Open Government v. Public Facilities Financing Authority of the City
of San Diego
 _____________________________________________________________________________

Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 16 Cal.App.5th 1273
Rehearing Granted

_____________________________________________________________________________

Opinion No. S245996
Date Filed: December 26, 2019
_____________________________________________________________________________

Court: Superior
County: San Diego
Judge: Joan Marie Lewis

_____________________________________________________________________________

Counsel:

Briggs Law Corporation, Cory J. Briggs, Anthony N. Kim; Higgs Fletcher & Mack, John Morris and
Rachel E. Moffitt for Plaintiff and Appellant.

Mara W. Elliott, City Attorney, David J. Karlin and George F. Schaefer, Assistant City Attorneys, and
Meghan Ashley Wharton, Deputy City Attorney, for Defendants and Respondents.
Counsel who argued in Supreme Court (not intended for publication with opinion):

Meghan Ashley Wharton
Deputy City Attorney
1200 Third Avenue, Suite 1100
San Diego, CA 92101
(619) 533-5800

Rachel E. Moffitt
Higgs Fletcher & Mack LLP
401 West A Street, Suite 2600
San Diego, CA 92101
(619) 236-1551