Suit brought under Political Reform Act of 1974, asks attorney's fees. Defense. Los Angeles County.

Summary

Redondo Beach developer sets up “shams”and “shell” clients to pursue political lawsuit and further its own interests.

The Case

Case Name: Arnette Travis and Chris Voisey v. Bill Brand, Nils Nehrenheim, et al.
Court and Case Number: Los Angeles Superior Court / BC665330
Date of Verdict or Judgment: Wednesday, April 03, 2019
Date Action was Filed: Thursday, June 15, 2017
Type of Case: Intentional Concealment
Judge or Arbitrator(s): Hon. Malcolm H. Mackey
Plaintiffs:
Arnette Travis
Chris Voisey
Defendants:
Bill Brand, elected Mayor of Redondo Beach
Brand for Mayor 2017 (Brand's campaign committee)
Linda Moffat (Brand’s campaign committee treasurer)
Nils Nehrenheim (elected City Councilman of Redondo Beach)
Wayne Craig, principal officer and treasurer of Rescue Our Waterfront P.A.C.
Rescue Our Waterfront P.A.C., a political committee
Type of Result: Bench Verdict

The Result

Gross Verdict or Award: Defense verdict.
Trial or Arbitration Time: 5 days.
Post Trial Motions & Post-Verdict Settlements: Defendants filed their memorandum of costs and scheduled their motions for attorneys fees. Plaintiffs intend to oppose the defendants’ efforts to seek attorneys’ fees and costs, as well as to appeal the trial court’s judgment.

The Attorneys

Attorney for the Plaintiff:
The Sutton Law Firm by Bradley W. Hertz, Los Angeles, and Nicholas L. Sanders, San Francisco.
Attorney for the Defendant:
Gabriel & Associates by Stevan Colin, Long Beach. (For Bill Brand, Brand For Mayor 2017 and Linda Moffat.)

Carlson & Messer by Jeanne L. Zimmer, Los Angeles. (For Nils Nehrenheim.)

Bobak Nayebdadash, El Segundo. (For Wayne Craig and Rescue Our Waterfront P.A.C. (ROW PAC).)

The Experts

Plaintiff's Technical Expert(s):
Ann Ravel, Political Reform Act expert and former Chair of the California Fair Political Practices Commission and the Federal Elections Commission, Los Gatos.
Defendant's Technical Expert(s):
Amber Maltbie, campaign finance, Los Angeles.

Facts and Background

Facts and Background:
Plaintiffs are residents and voters of Redondo Beach who initiated a “private attorney general” enforcement action in 2017 (verified Complaint) pursuant to Government Code section 91003 and and CCP section 526 against the defendants to compel them to comply with the provisions of the Political Reform Act of 1974, as amended. Plaintiffs sought injunctive relief to compel defendants to amend their political committee disclosure statements on file with the Secretary of State’s Office and Redondo Beach City Clerk, and sought an award of attorneys fees and costs.

Defendant, Wayne Craig formed a political committee called Rescue Our Waterfront (ROW PAC) in 2016. Bill Brand was a resident of Redondo Beach who ran for Redondo Beach Mayor and won in March, 2017. Defendant Linda Moffat was the treasurer of the Brand for Mayor 2017 campaign committee. Defendant Nils Nehrenheim was a resident of Redondo Beach who ran for City Council and was elected in a run-off election in May, 2017. Also appearing on the Redondo Beach March 2017 ballot was “Measure C,” an initiative to place development restrictions in the City’s harbor area.

Prior to the March 7, 2017 election, defendants Brand, Nehrenheim and ROW PAC publicly supported the passage of “Measure C.” Redondo Beach Waterfront LLC, a real estate developer, funded a political action committee known as “No on C, Save The Waterfront” whose attorney and assistant treasurer was Bradley W. Hertz, Esq., who later became attorney for plaintiffs Travis and Voisey.

On March 7, 2017, the voters passed “Measure C” and elected Bill Brand as Mayor. Nehrenheim placed first in his race against an incumbent, but did not win a majority of the votes. Nehrenheim later won in the May, 2017 run off election. On June 15, 2017, plaintiffs, represented by the Sutton Law Firm and partner Bradley W. Hertz, filed the plaintiffs’ verified Complaint For Injunctive Relief To Compel Compliance With California’s Political Reform Act.
Plaintiff's Contentions:
Plaintiffs contended ROW PAC was a “primarily formed” committee for the purpose of passing “Measure C” and was controlled by Bill Brand and Nils Nehrenheim. Plaintiffs contended that ROW PAC was not a general purpose committee and was required to amend its campaign statements to reflect it was primarily formed to pass “Measure C” and to disclose that Brand and Nehrenheim controlled it.

Plaintiffs also contended that Brand and Nehrenheim failed to disclose in their campaign statements that each controlled ROW PAC and plaintiffs sought to compel Brand and Nehrenheim to file amended statements. Plaintiffs contended that all defendants deceived the public prior to the March 7, 2017 election, and that plaintiffs were entitled to injunctive relief and an award of attorneys fees and costs against all defendants.
Defendant's Contentions:
Defendants ROW PAC and Wayne Craig contended that ROW PAC was formed as a general purpose committee to support harbor-related issues and various candidates for local office. They also contended that defendants Brand and Nehrenheim did not control ROW PAC and did not exert significant influence over ROW PAC, and therefore no amended campaign statements were required.

Defendants Brand and Nehrenheim contended that they did not control ROW PAC’s activities, and therefore no amended campaign statements were required.

Defendant Moffat contended she was not required to file any amended campaign statements because Brand did not control ROW PAC.

All defendants contended that plaintiffs Travis and Voisey lacked standing to bring a private enforcement action because they were not true plaintiffs as the lawsuit was being paid for and prosecuted for the developer whose $400 million dollar development project was affected by the passage of Measure C. Defendants contended the lawsuit was a Strategic Lawsuit Against Public Participation (SLAPP) disguised as a private enforcement action; and that Travis and Voisey were plaintiffs in name only to avoid an Anti-SLAPP motion under CCP section 425.16. Defendants contended that plaintiffs were not entitled to injunctive relief and that defendants were entitled to attorneys fees and cost in defending the lawsuit.

Demands and Offers

Plaintiff §998 Demand: None.
Plaintiff Final Demand before Trial: None. This case was referred to two separate Superior Court Judges for settlement discussions.
Defendant §998 Offer: None.
Defendant Final Offer before Trial: Defendants offered no money and would not agree to file amended campaign statements. Defendants also served plaintiffs’ counsel with a demand (Zamos v. Stroud (2004) 32 Cal 4th 958)) they dismiss the lawsuit prior to commencement of trial, but plaintiffs refused.

Additional Notes

This was a five-day court trial in which plaintiffs sought injunctive relief. Both plaintiffs testified they hired The Sutton Law Firm and and Mr. Hertz to represent them. They testified that they did not know who was paying for attorneys’ fees and costs. Neither could recall the terms of their retainer agreement with The Sutton Law Firm. Hertz was called to the witness stand by the defendants. Hertz testified over objection and under compulsion by the court, that the Sutton Law Firm was being paid to pursue the private enforcement action by Redondo Beach Waterfront LLC.

Plaintiffs called Ann Ravel as their expert witness. Ravel testified that ROW PAC was a primarily formed committee that ran the “Yes on C” campaign, despite ROW PAC’s filed campaign statement that referenced it as a general purpose committee. Ravel testified that ROW PAC was required to amend its campaign statement to change its status from “general purpose” to “primarily formed.” Ravel also testified that defendants Brand and Nehrenheim exerted significant control over ROW PAC’s political activities and that ROW PAC was required to include in its amended campaign statements that it was controlled by Brand and Nehrenheim. Ravel testified that defendants Brand and Nehrenheim were also required to amend their campaign statements to state they controlled ROW PAC. Under cross-examination, Ravel testified that nothing the defendants did was illegal, as long as the defendants’ actions were properly disclosed on campaign statements.

Defendants’ campaign expert, Amber Maltbie, testified that ROW PAC was formed as a “general purpose committee” and its activities were consistent with this type of committee. Maltbie testified that ROW PAC was not a controlled committee and Brand and Nehrenheim did nothing to exert significant influence over ROW PAC that would cause it to become a controlled committee. Maltbie testified none of the defendants was required to file amended campaign statements.

The court found in favor of the defendants and denied injunctive relief to the plaintiffs. The court ruled that ROW PAC was a general purpose committee and did not change its status. The Court found that ROW PAC was not required to amend its campaign statements. The Court found that defendants Brand and Nehrenheim did not exert significant influence over the actions of ROW PAC and were not required to amend their own campaign statements. The court deemed the defendants to be the prevailing parties and found in favor of each defendant. The court found that defendants acted in good faith in connection with their campaigns and that the public was not deceived or defrauded in any way by the defendants. The court found that defendants committed no illegal acts.

Plaintiffs’ request for a temporary restraining order, preliminary injunction and permanent injunction was denied. The court awarded attorneys' fees and costs to defendants. Over plaintiffs’ objection, the Court ruled Redondo Beach Waterfront LLC was the true entity behind the lawsuit and responsible for paying The Sutton Law Firm to initiate and pursue the lawsuit while using plaintiffs Arnette Travis and Chris Voisey, as “shams”and “shell” clients. The court further ordered the judgment entered against Redondo Beach Waterfront LLC and its principals, Fred Bruning and Jean Paul Wardy.

Plaintiffs demanded from defendants payment of attorneys’ fees of $500,000 just days before trial; Plaintiffs also wanted defendants to admit violating the Political Reform Act and to amend their campaign disclosure statements. Defendants refused.