Far from settled

It’s likely the only way the Chico Scrap Metal saga finally will be decided is in the courtroom, rather than the City Council chambers.

The conservative council majority proved once again it is determined to fight a referendum submitted by citizens group Move the Junkyard, firmly digging in its heels during closed session on Tuesday (Aug. 7).

Those in the council chambers left with the impression that CSM would be moving—the council repealed Ordinance 2490, which would have allowed the recycling business to remain on East 20th Street, in a 4-to-3 vote, with Vice Mayor Reanette Fillmer and Councilmen Mark Sorensen and Randall Stone saying nay (forcing Mayor Sean Morgan to begrudgingly vote yes).

The about-face happened only because Butte County Superior Court Judge Tamara Mosbarger found the referendum valid, ordering the council to repeal the ordinance or let the voters decide CSM’s fate. (See “Junkyard to move,” Newslines, July 19.)

But the final outcome of this more than 12-year battle remains to be seen. The council then turned around and voted 3-2 to appeal one of the three cases regarding the issue: Bob Mulholland vs. City of Chico—a direct challenge to Mosbarger’s ruling (Councilman Karl Ory and Fillmer had left the meeting at that point).

City Attorney Vince Ewing did not report the individual roll call.

A separate, looming issue surrounds who is going to foot the bill for all these lawsuits. As of Jan. 25, the price tag on two of the cases was just shy of $74,000 only for legal fees, not staff time. (See “Broken trust,” Second & Flume, Feb. 1.) Morgan and Sorensen both have maintained publicly that an indemnity clause within the development agreement between Chico Scrap Metal and the city requires the recycler to pay litigation costs.

However, attorney Jim McCabe—who is representing Ory and Mulholland—has argued that that clause was never valid because the referendum put a hold on Ordinance 2490, negating the development agreement.

“You never had the right to the indemnity,” McCabe told the panel on Tuesday. “You have been undertaking litigation under the false premise that someone else would be paying the city of Chico’s fees.”

Further complicating the issue: The city has not received a dime from the Scott family, the owners of Chico Scrap Metal, and the family told the Chico Enterprise-Record that it has no plans to pay up.

“We are continuing with this ridiculous legal ride despite losing all fuel to fund the entire thing,” Stone told the CN&R.

Ewing found himself on the hot seat Tuesday night, as he was pressed for answers from Councilwoman Ann Schwab and Stone in regard to acting outside of council direction and omitting litigation costs, respectively.

Stone argued that the actual projected fiscal impact from the Chico Scrap Metal lawsuits should be included in the staff report, to which Ewing replied that the topic was separate from rescinding the ordinance, and would be addressed in closed session.

Schwab said she wanted the record to show that Ewing took action without council direction regarding one of the CSM-related cases after the council’s previous meeting on the issue, on July 16. (After the meeting, Ewing filed an appeal of the judge’s order to rescind the ordinance or put it to a vote.)

“I don’t recall any conversation this council had to pursue any legal action. I felt that, as the council voted to repeal [Ordinance] 2490, that the action would be complete,” she said. “… That does raise a question for me: Is that the final action of this ordinance?” Ewing replied that this issue would be discussed in closed session.

During the panel’s comments, Morgan called himself a “victim of judicial overreach,” adding that he is “not really interested in being held in contempt of court,” referring to Mosbarger’s order.

He’d previously argued that “mob rule is being defined as democracy” and as a republic, the United States “guards against illegal taking of land.”

Sorensen piggybacked on this sentiment, calling the city a “pawn in the game” of an “old political vendetta.” He hinted that the fight was going to continue, saying, “This is just the beginning of a different route.”

Ory wasn’t buying those arguements. The conservative council majority has wasted hundreds of thousands of dollars to sue him (he was named in one of the three lawsuits) and Move the Junkyard, he said.

“I believe what we’re hearing a lot tonight is smoke,” Ory said. “We’re not facing millions, we’re not destroying a republic.”

He then promised to propose a discussion of Chico Scrap Metal and an analysis of the cost of the three CSM-related lawsuits to the city at the council’s first meeting in December, after the November election. “It is time for these legal issues to be discussed in open session,” he said.

Morgan said that he’d been told if the ordinance is repealed, CSM would sue the city and be “likely to win” far more than any legal fees the city may or may not have to pay.

Ory immediately jumped in, pressing Morgan for answers: Who told him that?

Morgan dodged the question and Ory asked if he’d been told that by attorneys.

“I have not been advised by an attorney. I can do lots of things without being advised by an attorney,” Morgan shot back, proceeding to decry Mosbarger’s order: “Someone not elected to this body told us to have this meeting and told us to have this vote.”