Council waves the white flag on lawsuit

Published 9:00 am Friday, October 26, 2007

The city will pay out $75,000 in legal fees, despite questions over a court ruling.

Despite city attorneys calling for one last fight, a split City Council decided to lay shoreline moratorium litigation to rest Wednesday evening.

The city will not appeal $75,000 in legal fees awarded to plaintiffs after a State Supreme Court decision against the city earlier this month, the council decided. The city’s legal team had recommended that the council accept the court’s ruling on the moratorium, but appeal the payment of attorney’s fees.

Nezam Tooloee, one of four councilors who voted against the motion to appeal, said the city had been dealt a “black eye” at every judicial level and it was time to hang up the gloves.

“This has been one of the darkest chapters in this city’s history,” he said.

Earlier this month, the state Supreme Court delivered a divided but scathing decision against the city’s now defunct moratorium on waterfront development. In addition, the court ordered the city to pay the plaintiffs’ legal fees.

Jay Derr, who handled the moratorium case for the city, said the plaintiffs had submitted a request to the city for roughly $75,000 to cover legal expenses accrued in both appeals court and the Supreme Court.

But Derr said the Supreme Court had not met the requirements of the governing state statute when it ordered the city to pay the plaintiff’s bill. Under that statute, he said, the case must meet two requirements for fees to be awarded: first the plaintiff must have attained a site-specific development permit from the city; and second the plaintiff must have prevailed at all levels of court appeal.

The Supreme Court had awarded fees based on the second requirement, Derr said, but it had ignored the first requirement, which in his opinion would not have been met because the case regarded a broad moratorium rather than a site-specific permit.

According to Derr, an earlier appeals court that heard the case ordered the city to pay legal fees under the same statute, but had reversed that order after the city requested it reexamine its decision.

For that reason the city’s legal team advised the council to challenge the Supreme Court’s order to pay plaintiff’s fees.

Bill Knobloch, Kjell Stoknes and Chris Snow took up that call, and voted to request a reconsideration. They said that despite the city losing the case, it was important to question the legal precedent the court’s ruling on attorney’s fees could create.

“It’s about asking for clarification,” Stoknes said. “We owe it to all cities in the state to ask the question.”

Knobloch said it was the first time he had ever heard the city’s legal team make a recommendation to the council rather than just inform it of its options.

“With the strong point they have made I am going to support their request,” Knobloch said.

If the court did legally go too far in awarding attorney’s fees it will be the responsibility of the state legislature, not Bainbridge to address it, Tooloee countered.

“To ask this body to take that fight on is inappropriate,” he said.

Debbie Vancil said she had voted against the moratorium in the past and would vote against this motion.

“We shouldn’t be flaunting what we see as being a little error,” Vancil said, adding that it was time “to cut our losses.”

Wednesday’s decision by the council may be the final act of a long legal battle.

In 2001, the council placed a moratorium on construction of new docks and bulkheads on Blakely Harbor shorelines to give planners time to bring local code into compliance with new federal regulations aimed at safeguarding salmon. The development freeze was renewed several times.

A group of island residents and builders along Kitsap Home Builders Association sued the city over the moratorium and in June 2003 the Kitsap Superior Court ruled that the city’s ban was invalid because it conflicted with a previous Shoreline Management Act.

The state Supreme Court upheld that decision on Oct. 11, ruling that “the imposition of repeated moratoria was unconstitutional and unlawful.”