Report to Mayor and City Council
Tuesday, January 22, 2019
Consent
SUBJECT:
Title
REPORT ON CITY'S FINAL VICTORY IN THE COLONY COVE PROPERTIES, LLC V. CITY OF CARSON MATTER, ESTABLISHING IMPORTANT LEGAL PRECEDENT AND SAVING THE CITY NEARLY $8 MILLION AND RESULTING IN ANOTHER VICTORY FOR THE CITY IN THE COLONY COVE YEAR 2012 MATTER SAVING THE CITY ANOTHER NEARLY $5 MILLION EXPOSURE (CITY COUNCIL)
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I. SUMMARY
As was reported to the Council in May 2018, the Ninth Circuit Court of Appeals reversed the nearly $8 million judgment that James Goldstein, the owner of Colony Cove Mobile Estates, obtained against the City of Carson in 2016 in a jury trial. Goldstein had appealed the Ninth Circuit decision to the United States Supreme Court. Staff had therefore advised the City Council to keep $8 Million set aside for this potential liability payment pending a decision by the United States Supreme Court.
On January 14, 2019, the United States Supreme Court ruled in favor of the City of Carson by refusing to review the Ninth Circuit decision. The Ninth Circuit reversal is now final and secure. The $8 Million can be returned to the City's reserves. This twelve year battle to preserve mobilehome park rent control in Carson is finally at an end in favor of the City and its residents.
While this federal court lawsuit was focused only on rents charged in 2007 and 2008, the outcome of this case has had the ripple of effect of another important victory for the City. Mr. Goldstein had also sued the City challenging the City's 2012 rent control decision on Colony Cove as a prelude to seeking close to $2 Million in damages and attorneys' fees. Upon the City's victory in the Colony Cove Properties case and the City Attorney offices' demand that he dismiss his now frivolous lawsuit,. he dismissed that state court case representing the avoidance of potentially as much as $4.8 million in damages and attorneys in future litigation against the City.
II. RECOMMENDATION
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