County Has Spent $389,000 So Far to Fight Housing Suit

Orange County taxpayers have been billed $389,000 by a private law firm that represents the county in a 4-year-old lawsuit challenging its policies on affordable housing.

Lisa Foster, a lawyer with the nonprofit legal center that filed the suit, said recently that the total may climb to $800,000 by the time the trial is over.

But Roger R. Stanton, chairman of the Board of Supervisors, defended the expense, saying it would be a mistake for counties and cities to “roll over” when sued.

“If any money is being wasted, it’s being wasted by this so-called public-interest law firm,” Stanton said. “If they have a frugality imperative, then why don’t they stop suing cities and counties? That will save a lot of money.”

Foster, who is with the Center for Law in the Public Interest in Los Angeles, said attorneys representing Orange County agreed to settle the litigation in May in a deal that required the county to spend $7.7 million on 650 low- and moderate-income housing units.

Then, she said, the Board of Supervisors reneged on the deal, refusing to approve it.

Foster insisted that the near-settlement shows there is “no reason to litigate.”

She said the board would not have been required to admit wrongdoing under the deal that fell apart.

“It’s incredible that somebody would sue you and then get mad at you because you won’t settle,” Stanton said. “If they are really concerned about public money being spent, all they have to do is drop their lawsuit.

“I think their discomfort reveals a great deal of uncertainty on their part as to whether they have a chance (to win at trial) at all.”

The $389,000 has been paid to the law firm of Ball, Hunt, Hart, Brown & Baerwitz in Long Beach.

“Obviously, we would rather not be spending $400,000 defending what we think is not only an adequate but a very good affordable-housing program that the county now has in existence,” Deputy County Counsel Benjamin P. De Mayo said.

Other supervisors said that they believe the costs of the lawsuit are high but necessary and that the county has been justified in its housing policies. They said they see no reason to settle a lawsuit alleging otherwise.

Supervisor Thomas F. Riley said the high cost of defending lawsuits was demonstrated recently in Newport Beach. Earlier this year, the city won a case alleging that it engaged in discriminatory housing policies but spent $1 million on legal costs.

“I do believe the board is united in its efforts on housing, including this lawsuit,” Riley said.

Supervisor Don R. Roth, a former mayor of Anaheim, compared the situation to the multimillion-dollar costs of ongoing litigation between that city and the California Angels baseball club over the use of stadium facilities.

Roth sharply criticized the law center, saying it has forced the county to incur high legal costs.

The lawsuit was filed four years ago, shortly after the county ended a mandatory program requiring builders to construct affordable housing that could be bought or rented by lower-income county residents.

In 1979, the board required that 25% of all new housing be priced within reach of low- and moderate-income persons. The board also adopted resale controls on affordable housing paid for in part by bond sales that required efforts to sell first to low- and moderate-income persons.

In 1983, the board scrapped the program and set up voluntary goals. The lawsuit was filed on behalf of the Orange County Renters Assn., which alleged that the new approach violated state and federal law.

Stanton, who was instrumental in ending the mandatory housing program four years ago, said that Foster is wrong in contending that the county had reneged on settlement talks and noted that virtually all lawsuits involve talks about possible settlements.

“Both sides came together to discuss, as is common,” Stanton said. “The fact that the parties didn’t agree is also not unusual.”

When settlement talks collapsed, Orange County Superior Court Judge Linda H. McLaughlin pressed both sides for an estimate of when the trial could begin.

The county’s lawyers said they would be ready for a trial Jan. 1, but lawyers for the Center for Law in the Public Interest said they would not be prepared before May.

The lawsuit, which said Newport Beach was using zoning rules to exclude low-income residents, took a year of trial.

Battle lines are clearly drawn in the county litigation. Allegations that the voluntary affordable-housing program violates state laws on environmental quality have been thrown out, but most of the other accusations remain to be decided at trial. The lawsuit has been revised four times.

Pending before McLaughlin is the county’s request for $15,000 in legal fees, arising from a court decision that the Center for Law in the Public Interest misused a legal device known as a lis pendens (suit pending) .

Center lawyers had placed notices in property records for 491 condominiums built for low-income residents. The notices warned potential buyers about the lawsuit. Such notices generally make resales of property difficult if not impossible.

The county intervened on behalf of the homeowners, arguing that the notices were harming the low- and middle-income owners that the program was designed to help.

That question, which went to the state Supreme Court at one point, was decided last year. The state Court of Appeal ordered the notices removed from the deeds and suggested that the county was entitled to reimbursement for legal fees on that issue.