San Diego, California – January 29, 2016
The San Diego County Superior Court has issued a Statement of Decision in the case San Diegans for Open Government (SDOG) v. City of San Diego (City). While this decision does not end the case, it did address key legal issues regarding Plaintiff SDOG’s standing to sue. Unfortunately, the Court ruled in favor of the Plaintiff, which means that the case will continue to trial on Constitutional questions arising from Proposition 26.
This case arose from the City’s 2012 renewal of the San Diego Tourism Marketing District (TMD). The TMD was created in 2008 for a five-year term; this renewal extended the TMD another 39.5 years beginning in 2013. The renewal was completed at the request of and with approval via a written ballot from hotels within the City of San Diego. Plaintiff SDOG challenged the renewal, claiming that all taxpayers in the City, rather than just hotels, had the right to vote on the renewal under the California Constitution.
After over a year of testimony, briefs, and a week-long trial, the Court issued this decision. The decision addressed several key questions, including whether Plaintiff “has standing to pursue this lawsuit” and “is an interested party.” A “no” answer would have meant that SDOG did not have the standing required to file this lawsuit against the City, and the suit would be dismissed. The yes decision means that the case will continue to trial, wherein the Court will consider arguments related to the California Constitution.
Had the TMD been successful, the case would have concluded and the TMD would remain in effect. This decision, however, means that the lawsuit will continue. A second trial, on the “merits” question of whether the TMD satisfies Proposition 26, is expected to be held later this year.
The ultimate decision in this case may have significant implications for California’s tourism marketing districts. A decision in favor of SDOG could mean that all TMDs being formed or renewed have to be approved by the electorate, rather than the hotel payors as has historically been the case.
In a statement, William Evans, Chairman of the San Diego TMD Board, indicated “this case is vital to our industry and to our city… It is a complex case, but our fundamental and singular focus has always been to defend our position on the merits. That is what we will now do, with the ultimate expectation that we can put these distractions behind us and press ahead for the greater benefit of San Diego’s hotels, and the tens of thousands of employees who depend on them for a living.”
In 2013 an industry coalition secured legislative adoption of a statute (Assembly Bill 483, Ting) defining key terms in the Constitution. The coalition will continue to monitor the case, and assess further options. We will provide updates as they are available.
