Real Estate and Land Use

May 01, 2015

Party On …

Woody’s Group, Inc. v. City of Newport Beach (2015) 233 Cal.App.4th 1012

Why It Matters: Woody’s Group establishes a very low threshold to prove a decision maker’s unacceptable probability of actual bias, thereby disqualifying a council member’s participation in a hearing. It is also a cautionary tale for those local agencies that allow long-held customs or policies to trump actual requirements in their municipal code.

Facts: Woody’s Wharf restaurant in Newport Beach (once owned by actor Chuck Norris) is known locally as much for its food as it is for being a go-to nightspot for drinking and dancing. On September 5, 2013, the Newport Beach Planning Commission approved a conditional use permit and variance that allowed Woody’s to construct a patio cover, extend its hours until 2 a.m. on weekends, and allow dancing inside the restaurant. Less than a week later, Newport Beach City Councilmember Mike Henn sent the city clerk an email in which he made an “official request to appeal” the Planning Commission’s decision. The City Council subsequently voted to reverse the Planning Commission’s decision. The formal resolution reversing the Planning Commission’s decision was adopted on November 12, 2013.

The Decision: The Court of Appeal overturned the trial court’s decision upholding the Woody’s Wharf conditional use permit and variance. Its decision was based on due process grounds, in that Councilmember Henn was found to have been biased against Woody’s Wharf, and on the procedural point that the City violated its own Municipal Code by permitting a council member to appeal a matter to the City Council.

Council Bias: According to the Court, Councilmember Henn’s bias manifested itself in two key ways: First, Councilmember Henn’s email request to the city clerk making an “official request to appeal” the Planning Commission’s decision stated that he “strongly believ[ed]” the “operational characteristics requested in the application and the Planning Commission’s decision [were] inconsistent with the existing and expected residential character of the area and the relevant policies of the voter approved 2006 General Plan.” Second, Councilmember Henn delivered a lengthy, well-organized, and well-researched presentation at the City Council hearing on the appeal explaining why the Planning Commission’s approval should be overturned. Councilmember Henn conceded that his lengthy City Council presentation was not, in fact, extemporaneous but rather was prepared in advance and based on his own research. Tellingly, while comments by the other council members span just two or three paragraphs in the official transcript, Councilmember Henn’s comments consumed thirteen pages.

The Court found that bias—be it actual bias or merely an unacceptable probability of actual bias—on the part of a decision maker violates the due process right to fair procedure. Councilmember Henn’s actions amounted to “an unacceptable probability of actual bias” and disqualified him from hearing the appeal. This holding is somewhat surprising in that the City’s appeals procedures actually required that the basis for the appeal be described and the fact that typically quasi-judicial matters do not require strict application of due process principles that would otherwise apply to a court of law. Council members typically expect to apply their local knowledge and consider constituent concerns in rendering decisions.

Procedural Error in Allowing the Appeal: Separately, the Court determined that the City violated its own procedures by allowing the appeal by Councilmember Henn to the City Council. The Newport Beach Municipal Code requires appeals from the Planning Commission to the City Council be brought by “interested part[ies]” who pay a filing fee and submit their appeal on a form provided by the City. There is no provision that allows appeals by council members acting in their role as council members, nor to allow such council members to avoid filing fee and form requirements. The Court had no patience for such behavior, stating unequivocally that “the city’s incantation of a ‘policy and practice’ in direct violation of its own code cannot conform that alleged policy and practice to due process.”

Practice Pointer: The decision in Woody’s Group may well illustrate the axiom that “bad facts make bad law.” The Court seemed especially perturbed by the combination of Councilmember Henn’s statements against the Planning Commission’s approval and the City’s adherence to procedural custom and policy over its own code. Nevertheless, if this decision is not otherwise distinguished, decision makers would be well advised to tread lightly since only the probability—and not certainty—of bias demands recusal under the Woody’s Group standard. For instance, critical statements outside the context of a public hearing should be avoided altogether. (See, e.g., Nasha v. City of Los Angeles (2004) 125 Cal.App.4th 470.) Further, even if a particular code allows for decision makers to appeal decisions, the grounds for such appeals should be carefully crafted, perhaps relying upon the “possibility” that an improper decision was made as opposed to the decision maker’s personal feelings.