Tom Butt
  E-Mail Forum – 2018  
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  McLaughlin Defensive About Losing Point Molate
April 26, 2018

Probably like many of you, I received an email from Gayle McLaughlin defending herself against suggestions that she bears a heavy responsibility for causing the City of Richmond to seek a settlement of the five-year lawsuit with Upstream and the Guidiville Rancheria.

She paints a picture of bad lawyering and weak RPA City Council members (“Mayor Butt has since convinced a majority of the Council settle a lawsuit”) as well as suggesting that I flipped to support the Plaintiff’s claims.

Let’s be clear. The conclusion that McLaughlin acted inappropriately and caused the case to be remanded back to the District Court (See Decision from the Ninth Circuit in the Upstream Pt Molate litigation) came from the Ninth Circuit, not from me.

The Ninth Circuit’s opinion is copied below:

The Third Amended Complaint (“TAC”) contains plausible allegations that the City violated the implied covenant of good faith and fair dealing by interfering with Appellants’ ability to obtain federal approval for the casino, thereby preventing Appellants from satisfying a condition precedent of the LDA. The TAC alleges that, beginning in 2009, the City, through Mayor Gayle McLaughlin, contacted the Bureau of Indian Affairs, Contra Costa County, and various public officials including the Governor of the State of California and United States Senator Dianne Feinstein, to encourage them to deny, delay, or otherwise oppose the Tribe’s quest to obtain the necessary federal and state approvals for gaming.

Appellants allege that this pressure delayed the federal approval process—a condition precedent of the LDA —sufficiently that the City abandoned the project in April 2011 in part because “[w]ithout these Federal approvals, a casino use at Point Molate is not legally permitted.” Resolution No. 23-11. Appellants further allege that the City’s pressure ultimately led the Department of the Interior (“DOI”)to determine in September 2011 that the Point Molate property was not eligible for gaming.

The TAC contains some of the alleged interfering communications from Mayor McLaughlin wherein she identifies herself as the Mayor acting on behalf of the City of Richmond. These allegations present an issue of fact concerning whether the Mayor was acting in her official capacity and are sufficient to plead a plausible claim of breach of the implied covenant of good faith attributable to the City

We therefore conclude that the TAC states a plausible claim that, by preventing the occurrence of the condition precedent and relying partially on the non-occurrence to deny the casino project and avoid carrying out the purpose of the LDA, the City breached the implied covenant of good faith and fair dealing when it promulgated Resolution 23-11 and discontinued consideration of a casino use for Point Molate

There is no evidence to support McLaughlin’s claims that her letters and other activist activities were approved or vetted by Morrison and Foerster. Every Morison and Foerster lawyer who worked on the case has stated in writing that McLaughlin’s claims are false.

McLaughlin and her RPA friends need to get out of denial and accept the fact that her poor judgment and naïveté are the basis for losing full control of Point Molate and possibly costing the City of Richmond tens of millions of dollars.

Following is McLaughlin’s email in case you missed it:

Dear friends:

Mayor Tom Butt put out one of his E-Forums a couple days ago with accusations that are very misleading and untrue in regard to some correspondence I made during my service as Richmond's mayor. In an attempt to divert public opinion away from his role in making a very poor settlement with Upstream Development in terms of our community's incredible public property known as Pt Molate, he attempts to shift the blame to my principled stance and actions in expressing opposition to a casino at the site (that also being the position of the majority of our community, who voted in opposition to a casino in 2010). Few communities have such an incredible shoreline site that offers so much in regard to recreation opportunities, natural resources and preservation, and tourism opportunities to help and enhance our city and community.

Many of you know that the City Council rejected a casino for Pt. Molate back in 2011 after the public weighed in on an advisory ballot at the 2010 general election making it clear that they did not want a casino at the site.

Mayor Butt has since convinced a majority of the Council to settle a lawsuit with the former casino developer (Upstream) which will result in a luxury housing development rather than fighting to keep this treasured site in the hands of the city and community.

As many of you know, the future of Pt. Molate was a major issue our community engaged in over the course of the last 15 years. Along with many of our community leaders, I was honored to be a part of this good fight. I believe it is the duty of every elected official to truly represent the community he or she serves. Undoing--behind closed doors--15 years of hard work by an engaged community has left many activists both disappointed and angered. (See a brief history below).

Tom Butt attempts to divert attention (from the criticism he is receiving for his closed door settlement with Upstream) and tries to blame my actions as Richmond's former mayor.

Let me explain. The plaintiffs (Upstream) alleged in their 9th Circuit Court petition that I, as mayor of Richmond, acted inappropriately when writing letters to federal officials on the issue of Pt. Molate stating my opposition to urban casinos. Butt proceeds to state that my letters to these federal officials is why the City HAD to settle this case. He falsely draws the conclusion (siding with the plaintiffs) that my communications were done on behalf of the City Council and/or the City of Richmond. He attempts to "prove" this by saying my communications with federal officials were done on Office of the Mayor letterhead. My follow up question to him is "and that proves what?" I communicated my opposition to the casino as an individual. I was identified as the Mayor but at no time did I imply or state that this was the current position of the City of Richmond,

A little background on this issue: Upstream sued the City of Richmond in 2011 claiming the City had no right to reject the casino. The District Court ruled on the side of the City of Richmond, making it clear that the City had every right to reject the casino even with repeated appeals by Upstream. The City was represented by lawyers with the Morrison Forester (MoFo) law firm who represented the City's (and our community's) interest well at that point in time. At a certain point, however, Upstream filed a complaint with the 9th Circuit Court. I attended the San Francisco hearing to determine whether this complaint should be dismissed out of hand or deemed eligible to be fully adjudicated.   Unfortunately, in my humble opinion, MoFo erred in putting someone in the lead at this hearing who had not been fully involved with the case in the past. Having someone new to this complicated issue of Pt Molate to counter Upstream's false claims proved to be unsuccessful. This lawyer did not even state to the judges that as mayor I had only one vote on the Council and I had no executive order privilege to stop this project, so the judges could understand that as mayor I was speaking as one elected official (and not for the entire City Government). 

After the hearing, I spoke to Richmond City Attorneys and MoFo (Morrison/Forester) on a conference call about this. I explained my concerns about how this hearing was handled, and wanted to make sure that when this complaint went back to district court for adjudication we would have the case tried by a different lawyer - one with a more clear cut understanding of the details.

I believe MoFo heard me and adjusted their approach. I was appreciative that when I was deposed by Upstream in December 2017, MoFo had two excellent lawyers sitting beside me. While I cannot go into the details of my deposition, I can say that my perspective was heard loud and clear with our legal representation defending me well (in that deposition).

So what happened in between December 2017 and April 2018 (when the Council settled with Upstream)? I cannot say for sure what happened as I am not privy to closed session discussions, but from what Tom Butt has put out in his recent E-forum, I can surmise that he took the side of the plaintiffs (strange stance indeed from someone who should be standing for our community) and was able to convince a majority of councilmembers to side with him (and Upstream).

One final point: Mayor Butt states that some RPA supporters have stated that I had my letters with federal officials "vetted" by MoFo in the years leading up to the Council vote. I do not know for sure what others have been saying, but I can tell you this: I sought legal advice from MoFo repeatedly and was told repeatedly that I could state my own perspective but not that of the entire City Council (which of course I never had any intention of doing). Whether or not any specific letter or communication (and I sent out many public communications on this issue, including guest editorials in local newspapers, over the years) was vetted is not the relevant point. The relevant point is that I followed MoFo's advice to a tee in any letter or communication I sent out. I challenge anyone to point to a statement in any letter I wrote where I said I was speaking on behalf of the entire City Council and/or the City of Richmond as a whole. Again, I was one member of an elected body with one vote, and speaking my perspective was my right and, in my humble opinion, my duty.

As I stated to the RPA Councilmembers by email, speaking our truth as progressives is necessary and it often necessitates a political battle.  That is indeed how things got transformed in such a major way over the period of time that the RPA emerged and organized throughout our community.

It is my belief that the Pt. Molate case should have been reexamined fully at the District Court level again (at a trial if needed) with all the 9th Circuit Court's concerns addressed.  There was much that needed to be flushed out. This did not happen. Instead the Council majority decided to settle on terms that were very favorable to the developer. I believe this was a major mistake.