Carson District Judge Mike Griffin ruled Friday the Tax Commission was within the law when it closed a meeting to decide on a multi-million dollar rebate for Southern California Edison.
He rejected arguments by Attorney General George Chanos that the closed meeting and vote violated the open-meeting law. Griffin said the plain language of the statute, the Legislative Counsel Bureau's opinion and all of the deputy attorneys general assigned to the commission during more than 20 years all agreed the commission had legal authority to close meetings in order to protect the taxpayer's confidential information.
"In this case, the taxpayer was granted confidentiality, based upon the past practices of the commission, and, in this court's opinion, the correct interpretation of the law," Griffin wrote.
The attorney general's office filed suit against the tax commission in July 2005 charging violations of the open-meeting law. The suit demanded their settlement with Southern California Edison be voided.
Chanos pointed to a 1979 attorney general's opinion stating all deliberations and votes were to be held in open meetings even if evidence was presented behind closed doors unless a specific exemption was in the law.
The Tax Commission, represented by Thomas "Spike" Wilson, pointed to a 1983 law stating that the commission can close a hearing upon request of the taxpayer appealing his bill.
Since then, dozens of commission hearings have been closed to the public to protect corporate and private confidential information.
When the issue was raised in 2005, Deputy Attorney General Dena James advised the commission to open its deliberations and vote on appeals.
But at the Southern California Edison hearing, commissioners asked if it was proper to close the hearing "and in spite of her previously mentioned e-mails and memorandum, she said it was and raised no issue," according to Griffin's ruling.
After the hearing and after the commission refused to void its decision and reopen the case, Chanos filed suit.
Griffin wrote that Chanos and his Senior Deputy Neil Rombardo are the only ones who interpret the law as requiring deliberation and action be done in public. He said the Legislative history shows the intent of the 1983 law was to permit closed hearings.
He made it clear he agreed with arguments by Southern California Edison's lawyer Norm Azevedo during the case that they were entitled to rely on the long-standing practice and rulings by deputy attorneys general.
"The attorney general's argument is that the Legislature must use the magic words 'not subject to the requirements of Chapter 241 (the open-meeting statute),'" Griffin wrote.
He disagreed saying the Legislature clearly intended the 1983 law to be an exception permitting closed meetings by the commission.
He said the attorney general's interpretation would make the statute permitting companies and individuals to present confidential information during their appeal meaningless if deliberations had to be conducted in the open because "any confidential information offered as evidence would be disclosed during deliberations."
Chanos had argued all the prior deputies handling the issue were young, inexperienced or ignorant of the law when they permitted closed hearings.
Griffin objected to that argument in court saying: "I find it offensive for you to castigate all your former deputies."
Chanos has already said he would appeal if Griffin ruled against him.
That is likely to draw some objections from other state officials since the private law firm of McDonald, Carano, Wilson has already billed the state for $450,000 to handle the case and a Supreme Court appeal could add thousands more to the bill.
Secretary of State Dean Heller said during the Board of Examiners meeting at which that payment was approved he objected to hitting taxpayers with huge legal bills because one state agency was suing another. And Gov. Kenny Guinn said in the same meeting it would be much cheaper to ask the 2007 Legislature to settle the legal dispute.