Purpose and Scope of the Relevant Statutes

Government Code Section 1090 prohibits public officials from having a financial interest in any contract made in their official capacity. The statute reads:

“Members of the Legislature, state, county, district, judicial district, and city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members. Nor shall state, county, district, judicial district, and city officers or employees be purchasers at any sale or venders at any purchase made by them in their official capacity.”

The prohibitions of Government Code Section 1090 are strictly enforced. Thus, a public official may be liable for violation of the statute “no matter whether he actually participated personally in the execution of the questioned contract, if it is established that he had the opportunity to and did influence execution directly or indirectly to promote his personal interest.” (People v. Sobel (1974) 40 Cal.App.3d 1046, 1052; see also, Millbrae Association for Residential Survival v. City of Millbrae (1968) 262 Cal.App.2d 222, 237 [a contract is “made” in an official capacity where the public official engages in ‘preliminary discussions, negotiations, compromises, reasoning, [or] planning . . . .’”]) A public official who violates Section 1090, regardless of whether the violation was intentional, forfeits any rights or interest flowing from the illegal contract. (Thomson v. Call (1985) 38 Cal.3d 633, 646-652.)

Government Code Section 87100 likewise prohibits public officials from participating in or using their position to influence a governmental decision in which they have a financial interest. The statute provides:

“No public official at any level of state or local government shall make, participate in making or in any way attempt to use his official position to influence a governmental decision in which he knows or has reason to know he has a financial interest.”

Exceptions

Government Code section 1091.5(a)(3) provides: “An officer or employee shall not be deemed to be interested in a contract if his or her interest is any of the following:…(3) That of a recipient of public services generally provided by the public body or board of which he or she is a member, on the same terms and conditions as if he or she were not a member of the body or board.”

As held in Lexin v. Superior Court (2010) 47 Cal.4th 1050, 1101, “There must be no special treatment for the board member, either express or implied, as a consequence of board membership. Where, however, the board member receives benefits on the same terms and conditions as similarly situated constituents who are not board members, section 1091.5(a)(3) may apply.”

As noted by the Lexin Court in finding the board member interests were not personal, but shared with their constituents:

“A similar scenario arises when, for instance, a legislative body votes on tax proposals. Such proposals will affect different members of the polity differently. As every member of the legislative body is a citizen and constituent as well, the proposals will inevitably affect members of the legislative body differently too. Ordinarily, however, every legislator will be affected the same as any and all similarly situated nonlegislators. Such differences, generally speaking, are not tailored to afford special benefits to the legislators themselves. This is an unavoidable feature of a republic—representatives drawn from the polity as a whole to represent the interests of a constituency will in some instances necessarily be affected by the measures they must approve. (Cf. Secs. 87102.5–87103 [excluding from the purview of the conflict of interest laws legislators' decisions that affect a financial interest they share with the public generally].)”

(Lexin v. Superior Court, supra, 47 Cal.4th 1050, 1101, fn. 29.)

Public Employee Liability

Government code § 820.2. That statute provides: “Except as otherwise provided by statute, a public employee is not liable for an injury resulting from his act or omission where the act or omission was the result of the exercise of the discretion vested in him, whether or not such discretion be abused.”

In determining whether a public employee’s act is “discretionary” under Sec. 820.2, courts distinguish between the employee's operational and policy decisions. Immunity is restricted to basic policy decisions that have been expressly committed to coordinate branches of government and as to which judicial interference would be “unseemly.” (Barner v. Leeds (2000) 24 Cal.4th 676, 684-685.) “On the other hand, there is no basis for immunizing lower level decisions that merely implement a basic policy already formulated.” (Id. at 685.) “[V]arious factors furnish a means of deciding whether the agency in a particular case should have immunity, such as the importance to the public of the function involved, the extent to which governmental liability might impair free exercise of the function, and the availability to individuals affected of remedies other than tort suits for damages.” (Johnson v. State (1968) 69 Cal.2d 782, 789.)

Procedural Requirements

Generally, no suit for money or damages may be brought against a government entity (or against a government employee acting in the scope of employment) unless and until a timely claim has been presented pursuant to the Government Claims Act (Gov.Code Sec. 810 et seq.) and either acted upon or deemed rejected by the passage of time. (Gov. Code Secs. 945.4, 950.2, 912.4.) These conditions apply to claims against school districts. (Ed. Code Sec. 35202.)

Gov. Code Sec. 911.2(a) provides:

A claim relating to a cause of action for death or for injury to person or to personal property or growing crops shall be presented as provided in Article 2 (commencing with Section 915) not later than six months after the accrual of the cause of action. A claim relating to any other cause of action shall be presented as provided in Article 2 (commencing with Section 915) not later than one year after the accrual of the cause of action.

Statute of Limitations

Plaintiffs are required to present their Government Code claims to the District within one year of the accrual of their causes of action as a prerequisite to filing suit. (See DiCampli-Mintz v. Cty. of Santa Clara (2012) 55 Cal.4th 983, 990 (“failure to timely present a claim for money or damages to a public entity bars a plaintiff from filing a lawsuit against that entity.”)

Timely compliance with the Government Code claim presentation requirement is an essential element of a damages cause of action against a government entity: “a plaintiff must allege facts demonstrating or excusing compliance with the claim presentation requirement.... [o]therwise, his complaint is subject to a general demurrer for failure to state facts sufficient to constitute a cause of action.” (State v. Superior Court (2004) 32 Cal.4th 1234, 1243.) The same requirements apply with respect to a suit against a public employee for injury caused by an action or omission in the scope of his or her employment. (Gov. Code sec. 950.2; Briggs v. Lawrence (1991) 230 Cal.App.3d 605, 613.)