A pdf copy of the complaint filed in Siskiyou County Superior Court can be downloaded from the top right of this article.

The City of Dunsmuir is facing yet another lawsuit.

This time the plaintiff is former Mayor Peter Arth, who was recalled in November. He is suing the city and several city council members because he says they illegally settled a lawsuit filed by Citizens for a Better Dunsmuir.

Arth’s attorney, David Hicks, filed a complaint in Siskiyou County Superior Court on Feb. 2 alleging violations of the Brown Act and the Political Reform Act.

He’s asking the court to void the settlement with CFBD, which sued to challenge water and sewer rate increases last summer.

CFBD backed the campaigns of Mayor Nick Mitchell, Vice Mayor Chris Raine and council members Diane Dolf and Arlis Steele.

During a special meeting on Jan. 18, the council voted to settle the lawsuit on the condition that each side would pay its own attorney’s fees.

The vote passed 3-1, with council member Ed Steele voting against the resolution, saying he was worried about a perceived conflict of interest.

He is the only council member not associated with CFBD.

Arlis Steele, no relation to Ed Steele, Diane Dolf and Chris Raine voted to approve the settlement.

Mitchell recused himself because his name is listed as a plaintiff in the lawsuit. The lawsuit was dismissed on Jan. 25.

The special meeting, where the settlement was approved, was called five days after a vote on the same resolution failed because it lacked the three votes required.

Mitchell and Raine abstained during the Jan. 13 vote.

Arth claimed Raine violated the Political Reform Act when he voted on the lawsuit on Jan. 18, after he recused himself on Jan. 13.

The Fair Political Practices Commission, which enforces the Political Reform Act, wouldn’t make comments specific to the situation in Dunsmuir.

FPPC executive director Roman Porter did say government officials who recuse themselves on an issue may later be allowed to vote on “the same or an associated issue” if they are “deemed two separate decisions.”

“Generally, a conflict of interest occurs when an elected or appointed official makes a governmental decision, influences a governmental decision, or participates in a governmental decision where that decision affects their financial interests,” Porter said.
The FPPC says it received no sworn complaints about the Dunsmuir City Council.
Arth claims Raine, Arlis Steele and Dolf had a conflict of interest because they voted for the settlement to protect themselves from being held liable for the city’s attorney’s fees, which was reportedly $4,000.

Arth’s complaint also accuses Mitchell, Arlis Steele and Diane Dolf of violating the Brown Act when they held a CFBD meeting on Jan. 4.

The Brown Act is designed to ensure government meetings are open and available for public scrutiny.

Mitchell said members of CFBD talked about what was owed to their attorney and how they would pay.

“Nothing to do with city business,” Mitchell said.

Peter Sheer, the executive director of the California First Amendment Coalition, said if the group only discussed their attorney’s fees and a payment plan, they may not have been required to have the conversation at a council meeting.

“If they confine their conversation to how they are going to settle their debts – not government debt – but their personal debt, although it’s somewhat of a gray area, I would say they could have that conversation outside a council meeting,” Sheer said.
Jim Ewert, legal counsel for the California Newspaper Publishers Association, disagrees.

“Any discussion of that lawsuit, regardless of which side they are on, falls within the jurisdiction of the city council,” Ewert. “Because this situation is so unique, and because they sit in both camps, they should be doing this openly and publically to earn the trust of the people who elected them to office.”

On Jan. 13, city attorney John Kenny sent a memo to the council that said if a majority of council members meet at a CFBD meeting, they could “run afoul of the Brown Act.”
He also said council members had the option of recusing themselves during the settlement vote to avoid a perceived conflict of interest. He said the choice was theirs.

“I give the council advice, not directives,” Kenny said.

He started reviewing Arth's lawsuit on Monday.

“The magnitude of alleged violations is pretty small. I’m worried the effort will be wasted,” Kenny said. “This is about who’s right and who’s wrong, and why should the ratepayers be forced to pay to answer that?”

Arth’s lawsuit comes as the city faces cash flow challenges and struggles to make utility infrastructure improvements.

When asked how concerned he was that the lawsuit may cause further financial hardship for the city, Hicks wrote in an e-mail, “I'm very hopeful that the defendants will see the wisdom in inexpensive self-correction instead of ‘making a federal case out of it.’”