San Diegans for Open Gov. v. Public Facilities Financing etc. ( 2019 )


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  •         IN THE SUPREME COURT OF
    CALIFORNIA
    SAN DIEGANS FOR OPEN GOVERNMENT,
    Plaintiff and Appellant,
    v.
    PUBLIC FACILITIES FINANCING AUTHORITY OF THE
    CITY OF SAN DIEGO et al.,
    Defendants and Respondents.
    S245996
    Fourth Appellate District, Division One
    D069751
    San Diego County Superior Court
    37-2015-00016536-CU-MC-CTL
    December 26, 2019
    Justice Corrigan authored the opinion of the Court, in which
    Justices Chin, Liu, Cuéllar, Kruger, and Groban concurred.
    Chief Justice Cantil-Sakauye filed a concurring and dissenting
    opinion.
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC
    FACILITIES FINANCING AUTHORITY OF THE CITY OF
    SAN DIEGO
    S245996
    Opinion of the Court by Corrigan, J.
    A citizens’ taxpayer organization sued to invalidate
    certain contracts allegedly made in violation of Government
    Code section 1090. The question is whether Government Code
    section 1092 gives plaintiff the statutory standing to do so. We
    hold that section 10921 does not provide plaintiff a private right
    of action because it was not a party to the contracts. The Court
    of Appeal’s judgment to the contrary is reversed. The matter is
    remanded for further proceedings.
    I. BACKGROUND
    Under section 1090, government officials and employees
    cannot be financially interested in any contract made by them
    in their official capacity or by any body of which they are a
    member. The statute codifies the long-standing common law
    rule prohibiting public officials from having personal financial
    interests in contracts they form in their official capacities.
    (Lexin v. Superior Court (2010) 
    47 Cal. 4th 1050
    , 1072.) Both the
    common law and section 1090 “recognize ‘[t]he truism that a
    person cannot serve two masters simultaneously.’ ” (Lexin, at p.
    1073, quoting Thomson v. Call (1985) 
    38 Cal. 3d 633
    , 637
    1
    All unspecified      statutory   references     are   to   the
    Government Code.
    1
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    (Thomson); see also San Diego v. S. D. & L. A. R. R. Co. (1872)
    
    44 Cal. 106
    , 113.) Section 1090 has a broad reach, prohibiting
    both direct and indirect financial interests in public contracts.
    (See Moody v. Shuffleton (1928) 
    203 Cal. 100
    , 103-105.) The
    penalty for a violation is substantial: The interested official
    must disgorge any profits earned, and may not recover any
    consideration paid, under the contract. (Thomson, at pp. 646-
    652.)
    Section 1092 provides that any contract made in violation
    of section 1090 “may be avoided at the instance of any party
    except the officer interested therein.” (§ 1092, subd. (a).) The
    dispute here revolves around the meaning of the phrase “any
    party.” Some background will provide context.
    In 2007, the City of San Diego issued bonds to finance the
    construction of Petco Park. In 2015, the City sought to refinance
    the remaining debt on those bonds. It adopted an ordinance and
    its Public Facilities Financing Authority (PFFA) passed a
    resolution authorizing the issuance of new bonds to accomplish
    the refinancing.2 Shortly thereafter, San Diegans for Open
    Government (plaintiff) sued the City and PFFA (collectively,
    defendants), asserting that aspects of the refinancing
    transaction violated section 1090 because at least one member
    of the financing team, which included both city employees and
    private organizations, had a financial “interest in one or more
    contracts for the sale of the 2015 Bonds.” Plaintiff claimed it
    was seeking relief “under Code of Civil Procedure Sections 860
    2
    PFFA is a joint powers authority that was originally
    established by the City and its redevelopment agency to assist
    in the financing of public capital improvements.
    2
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    et seq. and 1060 et seq.” The complaint asserted a single cause
    of action, alleging that the bond issuance violated provisions of
    the California Constitution, the City’s charter and municipal
    code, and section 1090. Plaintiff sought a judgment declaring
    the bond transaction’s approval unlawful and an injunction
    prohibiting defendants from acting to further the bond issuance.
    Plaintiff ultimately agreed to entry of judgment as to all
    allegations except the section 1090 violation. Defendants then
    argued that plaintiff lacked standing as to that issue, citing San
    Bernardino County v. Superior Court (2015) 
    239 Cal. App. 4th 679
    (San Bernardino). Plaintiff argued it had standing under
    section 1092 and Code of Civil Procedure section 526a.3 Plaintiff
    also mentioned it had timely filed its action under the validation
    statutes. (Code Civ. Proc., § 860 et seq.) The trial court ruled
    for defendants, concluding that section 1092 only confers
    standing on the parties to a challenged contract, and that
    plaintiff also lacked standing under Code of Civil Procedure
    section 526a. The remaining action was dismissed.
    3
    Code of Civil Procedure section 526a permits certain
    individuals and corporations to sue “to obtain a judgment,
    restraining and preventing any illegal expenditure of, waste of,
    or injury to” a local agency’s funds or property. (Code Civ. Proc.,
    § 526a, subd. (a); see also Weatherford v. City of San Rafael
    (2017) 2 Cal.5th 1241, 1245 (Weatherford).) The “primary
    purpose” of the statute “is to ‘enable a large body of the citizenry
    to challenge governmental action which would otherwise go
    unchallenged in the courts because of the standing
    requirement.’ [Citation.]” (Blair v. Pitchess (1971) 
    5 Cal. 3d 258
    ,
    267-268.)
    3
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    Plaintiff appealed. In the Court of Appeal, the parties
    agreed that Code of Civil Procedure section 863 did not provide
    plaintiff an independent right of action to assert a section 1090
    violation.4 As to whether plaintiff could proceed under Code of
    Civil Procedure section 526a, plaintiff argued that it could,
    while defendants argued subdivision (b) of that provision barred
    plaintiff’s claims for relief.5
    The Court of Appeal held that the term “party” in section
    1092 means “any litigant with an interest in the subject contract
    sufficient to support standing,” and that plaintiff possessed such
    an interest. (San Diegans for Open Government v. Public
    Facilities Financing Authority of City of San Diego (2017) 16
    Cal.App.5th 1273, 1284 (San Diegans).) Because it found
    plaintiff could pursue its claim under section 1092, it did not
    decide whether plaintiff could proceed under Code of Civil
    Procedure section 526a. (San Diegans, at p. 1285, fn. 4.)
    4
    The parties presented no argument here on whether or
    how Code of Civil Procedure section 863 might apply to this
    action. We express no opinion on the matter.
    5
    Subdivision (b) of Code of Civil Procedure section 526a
    prohibits the granting of an injunction “restraining the offering
    for sale, sale, or issuance of any municipal bonds” for public
    improvements or facilities.         Defendants asserted this
    subdivision barred plaintiff from proceeding under Code of Civil
    Procedure section 526a because, if plaintiff obtained the relief it
    sought, the effect would be to enjoin the bond issuance.
    4
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    II. DISCUSSION
    A.    General Rules Regarding Standing and Causes of
    Action
    “Unlike the federal Constitution, our state Constitution
    has no case or controversy requirement imposing an
    independent jurisdictional limitation on our standing doctrine.”
    
    (Weatherford, supra
    , 2 Cal.5th at pp. 1247-1248.) Typically, to
    have standing, a plaintiff must plead an actual justiciable
    controversy and have some “special interest to be served or some
    particular right to be preserved or protected over and above the
    interest held in common with the public at large.” (Carsten v.
    Psychology Examining Com. (1980) 
    27 Cal. 3d 793
    , 796.) This
    requirement has been relaxed in some contexts. For example,
    California courts have consistently held that taxpayers have
    standing to prevent illegal conduct by public officials despite the
    lack of a special interest or right distinct from that belonging to
    the general public. (See e.g., Weatherford, at p. 1248; Crowe v.
    Boyle (1920) 
    184 Cal. 117
    , 152; Mock v. City of Santa Rosa (1899)
    
    126 Cal. 330
    , 345.)
    Though standing requirements are construed more
    liberally in litigation enforcing public rights, a plaintiff suing
    under a particular statute still must show that it is among those
    with “a statutory right to relief.” 
    (Weatherford, supra
    , 2 Cal.5th
    at p. 1248.) Here, the question is whether plaintiff has a cause
    of action creating a right to relief under section 1092. “Whether
    a statute gives rise to a private right of action is a question of
    legislative intent.” (County of San Diego v. State of California
    (2008) 
    164 Cal. App. 4th 580
    , 609; see also Boorstein v. CBS
    Interactive, Inc. (2013) 
    222 Cal. App. 4th 456
    , 466.) The intent
    may be express or implied (Lu v. Hawaiian Gardens Casino, Inc.
    5
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    (2010) 
    50 Cal. 4th 592
    , 597 (Lu)), but either way “the Legislature
    must clearly manifest an intent to create a private cause of
    action under [the] statute” (
    id. at p.
    601, fn. 6, citing Moradi-
    Shalal v. Fireman’s Fund Ins. Companies (1988) 
    46 Cal. 3d 287
    ,
    295). The burden of persuasion is with the party claiming a
    statutory right to sue. (Lu, at p. 601.)
    B.    Plaintiff Cannot Sue Under Section 1092
    Section 1092 provides in relevant part that “[e]very
    contract made in violation of any of the provisions of Section
    1090 may be avoided at the instance of any party except the
    officer interested therein.” (§ 1092, subd. (a).) Defendants argue
    the phrase “any party” includes only parties to the challenged
    contract. Plaintiff argues the phrase applies more broadly to
    embrace other interested persons and organizations like itself.
    The Court of Appeal agreed with plaintiff. It reasoned
    that the “important policy embodied in section 1090 . . . will not
    be vindicated if public officials believe section 1090’s substantive
    provisions may only be enforced by the very public officials or
    public entities who have violated the statute’s provisions.” (San
    
    Diegans, supra
    , 16 Cal.App.5th at pp. 1283-1284.) “[A] public
    official’s duty to avoid even temptation cannot be advanced by
    adopting a rule which limits civil enforcement to that public
    official or public entities controlled by the official.” (Id. at p.
    1284.) The court also found that the “weight of authority” stood
    for the proposition that “standing to assert section 1090 claims
    goes beyond the parties to a public contract.” (Ibid.)6 Based on
    6
    In support of this conclusion, the Court of Appeal cited
    
    Thomson, supra
    , 
    38 Cal. 3d 633
    , Stigall v. City of Taft (1962) 58
    6
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    “that authority and the important and strict policy embodied in
    section 1090,” the court interpreted “section 1092’s reference to
    ‘any party’ to include any litigant with an interest in the subject
    contract sufficient to support standing.” (San Diegans, at p.
    1284.) This would include, according to the court, parties with
    interests sufficient to support standing under Code of Civil
    Procedure sections 526a and 863. (San Diegans, at p. 1285.)
    We read the statute differently. “We begin with the text
    of the statute as the best indicator of legislative intent.” (Tonya
    M. v. Superior Court (2007) 
    42 Cal. 4th 836
    , 844.) The statute
    refers to a “contract made in violation” of section 1090, then
    provides that any such contract “may be avoided by any party
    except the officer interested therein.” (§ 1092, subd. (a).) The
    most natural reading of this language is that the phrase “any
    party” refers back to the contract; that is, any party to the
    contract can sue to avoid it. The use of the word avoid in section
    1092 also supports this construction. Typically, we speak of a
    party to a contract avoiding its legal obligations thereunder.
    (See e.g., Rest.2d Contracts, § 7 [“[a] voidable contract is one
    where one or more parties have the power . . . to avoid the legal
    relations created by the contract”].) Indeed, the Restatement
    Second of Contracts notes that “[a]voidance is often referred to
    as ‘disaffirmance.’ ” (Rest.2d Contracts, § 7, com. b, p. 20.) A
    Cal.2d 565 (Stigall), California Taxpayers Action Network v.
    Taber Construction, Inc. (2017) 12 Cal.App.5th 115 (California
    Taxpayers), McGee v. Balfour Beatty Construction, LLC (2016)
    
    247 Cal. App. 4th 235
    (McGee), Davis v. Fresno Unified School
    Dist. (2015) 
    237 Cal. App. 4th 261
    (Davis), Gilbane Building Co.
    v. Superior Court (2014) 
    223 Cal. App. 4th 1527
    (Gilbane),
    Finnegan v. Schrader (2001) 
    91 Cal. App. 4th 572
    (Finnegan),
    and Terry v. Bender (1956) 
    143 Cal. App. 2d 198
    (Terry).
    7
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    non-party does not possess the power to affirm or disaffirm a
    contract. (Ibid. [“[u]sually the power to avoid is confined to one
    party to the contract, but [under certain circumstances] the
    contract may be voidable by either one of the parties”].)
    This conclusion finds further support in provisions of the
    Civil Code governing the formation and interpretation of
    contracts. (See Smith v. Fair Employment & Housing Com.
    (1996) 
    12 Cal. 4th 1143
    , 1156 [reviewing the “Legislature’s use
    of the words ‘marital status’ ” in the Family and Probate Codes
    to determine the meaning of that word in a Government Code
    provision]; see also Pesce v. Dept. Alcoholic Bev. Control (1958)
    
    51 Cal. 2d 310
    , 312; Picayune Rancheria of Chukchansi Indians
    v. Brown (2014) 
    229 Cal. App. 4th 1416
    , 1428.) Civil Code section
    1559, for example, provides that a “contract, made expressly for
    the benefit of a third person, may be enforced by him at any time
    before the parties thereto rescind it.” (Italics added.) In this
    provision, the Legislature uses the term “party” to refer to a
    contractual party,7 as distinguished from a “person,” who is not
    a contractual party.8 The careful usage of these terms in the
    7
    See also Civil Code sections 1558 [“[i]t is essential to the
    validity of a contract . . . that the parties should exist [and] that
    it should be possible to identify them,” italics added]; 1636 [“[a]
    contract must be so interpreted as to give effect to the mutual
    intention of the parties as it existed at the time of contracting,”
    italics added]; 1689, subd. (a) [“[a] contract may be rescinded if
    all the parties thereto consent,” italics added].
    8
    See also Civil Code sections 1556 [“[a]ll persons are
    capable of contracting, except minors, persons of unsound mind,
    and persons deprived of civil rights,” italics added]; 1586 [“[a]
    proposal may be revoked at any time before its acceptance is
    8
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    Civil Code indicates that, when the Legislature uses the term
    “party” in a statute referencing a contract, it typically means a
    party to that contract.
    The San Bernardino court construed section 1092 in this
    fashion. There, two taxpayer groups attempted to rely on
    section 1092 and Code of Civil Procedure section 526a to avoid
    a settlement agreement between a county and a partnership
    after a supervisor who voted in support pled guilty to accepting
    bribes. (San 
    Bernardino, supra
    , 239 Cal.App.4th at p. 683.) The
    trial court overruled the defendants’ demurrer, which argued
    that the plaintiffs lacked standing. (Ibid.) The Court of Appeal
    reversed. Rejecting the plaintiffs’ argument that they were
    entitled to sue under section 1092, the court reasoned that
    nothing in the statute’s plain language “grants nonparties to the
    contract . . . the right to sue on behalf of a public entity that may
    bring a claim as provided in section 1092.” (San Bernardino, at
    p. 684.) Indeed, “the Legislature’s choice of the word ‘party’ in
    section 1092—as opposed to, say, ‘person’—suggests the
    Legislature intended only parties to the contract at issue
    normally to have the right to sue to avoid contracts made in
    violation of section 1090.” (Ibid.)
    Plaintiff argues the term “party” in section 1092 should be
    read to include persons who are not parties to the challenged
    contract. Plaintiff argues section 1092’s exception, which
    prohibits “the officer interested therein” from suing to avoid a
    communicated to the proposer, but not afterwards,” italics
    added]; 1670.7 [declaring void any contract that “purports to
    allow a deduction from a person’s wages” for emigration and
    transportation costs, italics added].
    9
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    contract (§ 1092, subd. (a)), supports its construction. Because
    the agency, not the officer, would normally be the party to the
    contract, there would have been no reason according to plaintiff
    for the Legislature to create this exception unless the term
    “party” includes those who are not parties to the contract.
    This argument is easily rejected. To be sure, on the
    government’s side, the public agency typically would be the
    contractual party. But the financially interested officer could of
    course be one of the other parties to a challenged contract. In
    County of Shasta v. Moody (1928) 
    90 Cal. App. 519
    , for example,
    the defendant owned a printing business and was also a county
    supervisor. While the defendant held that public office, “he did
    printing, advertising, job work and sold supplies to . . . various
    county officials of the county of Shasta, including the board of
    supervisors,” and was paid for that work. (Moody, at p. 520.) In
    other words, the county was one party to the contract that
    allegedly violated section 1090, and the financially interested
    officer was the other party to that contract. (See also Berka v.
    Woodward (1899) 
    125 Cal. 119
    , 121.) The exception prohibiting
    suit by an interested officer would prevent that officer from
    suing on his or her own behalf, as a contractual party, to avoid
    the contract. Thus, the phrase “any party” need not be read to
    include nonparties in order for that exception to make sense.
    Plaintiff also argues the term “party” could be read to
    include a party to litigation concerning the contract. Plaintiff
    points out that, in the article of the Government Code in which
    sections 1090 and 1092 are found,9 the word “party” is followed
    9
    Sections 1090 and 1092 are in article 4 of chapter 1 of
    division 4 of title 1 of the Government Code.
    10
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    by the qualifier “to any proceeding” on one occasion (§ 1091.4,
    subd. (b)) and by the qualifier “to litigation” on another (§ 1091,
    subd. (b)(15)). Plaintiff urges that the use of these qualifiers
    shows the term “party” has a broader meaning in this context
    and includes persons other than the contractual parties.10
    These textual arguments fall short. As mentioned, the
    sentence in which the phrase “any party” appears begins by
    referencing a “contract made in violation” of section 1090.
    (§ 1092, subd. (a).) The word “party” may not be directly
    adjacent to the qualifiers set out above, but it is most natural to
    read that word as referring back to the contract mentioned at
    the beginning of the sentence. Indeed, the Legislature may have
    thought it unnecessary to qualify the term “party” in section
    1092, subdivision (a), because that subdivision already
    references a contract made in violation of section 1090. To add
    the qualifier “contracting” to the phrase “any party” in section
    1092 arguably would have been redundant.
    In any event, the ultimate question is whether the
    Legislature has clearly manifested an intent to create a private
    right of action. 
    (Lu, supra
    , 50 Cal.4th at p. 601, fn. 6.) If the
    10
    The concurring and dissenting opinion makes a similar
    point. It notes that the word “party” appears in this article 35
    times; that, in 32 of those instances, the word is directly
    preceded or followed by the qualifiers “contracting,” “to the
    contract,” or “to a contract”; that, in two of those instances, the
    word is followed by the qualifiers “to any proceeding” and “to
    litigation”; and that, “[o]nly in section 1092 does the word ‘party’
    appear without any qualifier.” (Conc. & dis. opn., post, at p. 7;
    see also 
    id. at p.
    7, fn. 5.) Thus, it is fair to infer “that the
    Legislature intended for the word ‘party’ within section 1092 to
    encompass more than a ‘contracting party.’ ” (Id. at p. 7.)
    11
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    Legislature has clearly expressed an intent one way or the other,
    “that usually ends the inquiry.” (Animal Legal Defense Fund v.
    Mendes (2008) 
    160 Cal. App. 4th 136
    , 142.) If it has “expressed
    no intent on the matter either way, . . . there is no private right
    of action [citation], with the possible exception that compelling
    reasons of public policy might require judicial recognition of
    such a right.” (Ibid., citing Moradi-Shalal v. Fireman’s Fund
    Ins. 
    Companies, supra
    , 46 Cal.3d at pp. 304-305.)
    Here, the Legislature has clearly expressed an intent that
    parties to public contracts may sue to avoid those contracts
    under section 1092. As to nonparties, however, there is no such
    clear expression of intent.11 Accordingly, we cannot find that
    plaintiff has a private right of action unless there are compelling
    policy reasons to do so. Those reasons do not exist here. The
    Court of Appeal based its interpretation of section 1092 on both
    case law and the necessity of vindicating the policies embodied
    in section 1090. Neither reason compels us to read an intent
    into the statute that does not appear on its face.
    1.    The Case Law
    None of the cases cited by the Court of Appeal addressed
    the precise issue presented: Whether a nonparty taxpayer can
    11
    Moreover, as noted, the Legislature has prohibited
    injunctions restraining municipal bond offerings, sales, and
    issuances. (Code Civ. Proc., § 526a, subd. (b).) There appear to
    be sound policy reasons underlying that prohibition. (Cf.
    McLeod v. Vista Unified School Dist. (2008) 
    158 Cal. App. 4th 1156
    , 1167-1168.) Construing section 1092 to permit nonparties
    to sue to avoid contracts for section 1090 violations would
    effectively provide an end-run around the Legislature’s bar on
    claims seeking to enjoin municipal bond issuances.
    12
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    sue under section 1092 to avoid a government contract on
    conflict-of-interest grounds. The case law has been less than
    clear in discussing the distinction between standing and causes
    of action. Although a number of cases cited by both parties
    purport to address a taxpayer’s “standing” to enforce section
    1090, these cases ultimately address whether a taxpayer had a
    cause of action under either Code of Civil Procedure section 526a
    or section 1092. In 
    Terry, supra
    , 
    143 Cal. App. 2d 198
    , for
    example, the plaintiff brought a taxpayer action under Code of
    Civil Procedure section 526a, alleging a city’s payment of a
    warrant would violate section 1090. (Terry, at pp. 201, 206-207.)
    The Court of Appeal did not discuss whether the plaintiff could
    sue under section 1092. Instead it ruled that Code of Civil
    Procedure section 526a provided “express statutory
    authorization to maintain [the] action.” (Terry, at p. 208.)
    Similarly, in 
    Gilbane, supra
    , 
    223 Cal. App. 4th 1527
    , the
    plaintiff sued under Code of Civil Procedure section 526a
    alleging that contracts between a school district and certain
    construction companies violated section 1090. (Gilbane, at p.
    1530.)     The Court of Appeal found the plaintiff had
    “associational standing” under Code of Civil Procedure section
    526a, and did not discuss whether section 1092 authorized the
    plaintiff to sue. (Gilbane, at p. 1531.) Terry and Gilbane thus
    stand for the proposition that a nonparty taxpayer can invoke
    the substantive prohibitions of section 1090 in an action
    authorized by Code of Civil Procedure section 526a. They do
    not, however, support the conclusion that a nonparty taxpayer
    can sue to avoid a public contract under section 1092.
    Neither do Stigall, Thomson, and Finnegan. In 
    Stigall, supra
    , 
    58 Cal. 2d 565
    , this court did not address whether the
    13
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    plaintiff could sue under section 1092. We simply noted that the
    plaintiff taxpayer sought a declaration that a plumbing contract
    was invalid under section 1090 (Stigall, at pp. 566-568), and
    then proceeded to the merits of the claim.12 In 
    Thomson, supra
    ,
    
    38 Cal. 3d 633
    , the question was “what remedies are available
    once a section 1090 violation is found and the fully performed
    underlying contract is adjudged void.” (Thomson, at p. 638.) It
    had already been determined in an earlier suit that the contract
    violated section 1090. (Thomson, at pp. 637-638.) Thus, we
    were not called upon in Thomson to determine whether the
    plaintiff could sue under section 1092.13
    In 
    Davis, supra
    , 
    237 Cal. App. 4th 261
    , the Court of Appeal
    concluded that a taxpayer had alleged facts sufficient to state a
    section 1090 claim. (Davis, at pp. 270, 271, 301.) The court also
    opined that “[t]he term ‘any party’ [in section 1092] is not
    restricted to parties to the contract.” (Id. at p. 297, fn. 20.) That
    statement was dictum; as the court noted, the defendants had
    not challenged the plaintiff’s “standing to bring the conflict of
    12
    Like Stigall, Finnegan involved a “taxpayer’s suit” seeking
    a declaration that a government contract violated section 1090.
    
    (Finnegan, supra
    , 91 Cal.App.4th at p. 575.) The court did not
    address the question of standing. Nor did it address whether
    the plaintiff was authorized to bring his suit under section 1092.
    13
    The concurring and dissenting opinion argues that
    “Thomson . . . shows that a nonparty can seek to avoid the terms
    of a contract.” (Conc. & dis. opn., post, p. 6.) But our analysis
    in 
    Thomson, supra
    , 
    38 Cal. 3d 633
    did not expressly rely on the
    operation or application of section 1092. We do not dispute that
    a taxpayer can invoke the conflict-of-interest rule in section
    1090 to challenge a public contract. The question is whether he
    or she may do so under section 1092, and Thomson provides no
    answer.
    14
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    interest claim under . . . section 1090.” (Ibid.) Thus, Davis also
    does not support the conclusion that a nonparty taxpayer can
    sue under section 1092.
    That leaves McGee and California Taxpayers. In 
    McGee, supra
    , 
    247 Cal. App. 4th 235
    , a taxpayer sued claiming that an
    agreement between a school district and a construction company
    violated a number of statutes, including section 1090. (McGee,
    at p. 239.) A demurrer was sustained in part on the ground the
    plaintiff lacked standing. (Id. at p. 246.) The Court of Appeal
    reversed, holding the plaintiffs had alleged a cause of action for
    a section 1090 violation. (McGee, at p. 246.) It did not mention
    section 1092. While McGee supports the conclusion that a
    taxpayer can assert a section 1090 violation, it does not hold that
    the plaintiff can sue under section 1092.
    Like McGee, California 
    Taxpayers, supra
    , 12 Cal.App.5th
    115, involved a reverse validation claim that an agreement
    between a school district and a construction company violated
    section 1090 and other statutes. (California Taxpayers, at pp.
    123-124.) The result was similar as well. The Court of Appeal
    reversed an order sustaining a demurrer as to the section 1090
    claim. (California Taxpayers, at pp. 122, 145.) The court took
    note of San 
    Bernardino, supra
    , 
    239 Cal. App. 4th 679
    , but
    reasoned that Gilbane, Davis, and McGee “ha[d] recognized that
    an action under . . . section 1090 may be brought by a taxpayer.”
    (California Taxpayers, at p. 141.) As explained, none of those
    cases addressed whether a nonparty taxpayer can sue under
    section 1092. California Taxpayers does not do so either.
    In summary, there seems to be no dispute that a nonparty
    taxpayer whose action meets the requirements of Code of Civil
    Procedure section 526a can sue under that section alleging a
    15
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    government contract violates section 1090. (See, e.g., 
    Terry, supra
    , 
    143 Cal. App. 2d 198
    ; 
    Gilbane, supra
    , 
    223 Cal. App. 4th 1527
    .) Additionally, some cases have assumed that a plaintiff
    can invoke section 1090 without explaining the statutory
    authorization for the plaintiff’s lawsuit. (See, e.g. 
    Thomson, supra
    , 
    38 Cal. 3d 633
    ; 
    Stigall, supra
    , 
    58 Cal. 2d 565
    ; California
    
    Taxpayers, supra
    , 12 Cal.App.5th 115; 
    McGee, supra
    , 
    247 Cal. App. 4th 235
    ; 
    Davis, supra
    , 
    237 Cal. App. 4th 261
    ; 
    Finnegan, supra
    , 
    91 Cal. App. 4th 572
    .) But whether a plaintiff may invoke
    section 1090 and whether a plaintiff may sue to avoid a contract
    under section 1092 are distinct questions. None of the cases the
    Court of Appeal cites support the conclusion that a nonparty
    may sue under section 1092 to avoid a contract. The only case
    to directly consider the question held that section 1092 did not
    create a private right of action. (San 
    Bernardino, supra
    , 239
    Cal.App.4th at pp. 684-685.)
    2.     Compelling Policy Reasons
    Nor is the Court of Appeal’s interpretation of section 1092
    necessary to vindicate the policies embodied in section 1090.
    Section 1092 is not the only vehicle for enforcing the substantive
    prohibitions in section 1090. On the contrary, the conflict-of-
    interest rule is backed by an array of administrative, civil, and
    criminal enforcement mechanisms.
    First, the Attorney General or a district attorney can
    criminally prosecute a person who willfully violates section 1090
    (§ 1097.1, subd. (b)) and, if convicted, that person can be
    punished by a fine or by imprisonment, and is “forever
    disqualified from holding any office in this state” (§ 1097, subd.
    (a)). Second, the Fair Political Practices Commission (the
    Commission) can bring an administrative action against any
    16
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    person who has violated section 1090. (§ 1097.1, subd. (a).) The
    Commission can “investigate possible violations of Section 1090”
    (§ 1097.2, subd. (a)), issue subpoenas (§ 1097.2, subd. (e)), and
    hold hearings to determine if a violation occurred (§ 1097.2,
    subd. (c)). The Commission may also file “a civil action for an
    alleged violation of Section 1090.” (§ 1097.3, subd. (a).) If held
    liable, the violator may be fined up to $10,000 or three times the
    value of the financial benefit received. (Ibid.) The existence of
    such a comprehensive enforcement scheme is strong evidence
    the Legislature did not intend to create a private right of action
    for nonparties to the contract. (See Animal Legal Defense Fund
    v. 
    Mendes, supra
    , 160 Cal.App.4th at pp. 143-144; Crusader Ins.
    Co. v. Scottsdale Ins. Co. (1997) 
    54 Cal. App. 4th 121
    , 136.)
    Because violations of section 1090 can be challenged by
    contractual parties under section 1092, by taxpayers under Code
    of Civil Procedure section 526a where appropriate, and by the
    Attorney General, district attorneys, and the Fair Political
    Practices Commission, there is no compelling reason to conclude
    that section 1092 creates a private right of action for nonparties
    to sue to avoid public contracts.14
    C.   Plaintiff May Be Able To Proceed Under Code of Civil
    Procedure Section 526a
    Below, the parties debated whether plaintiff’s claims for
    relief were permitted or barred by Code of Civil Procedure
    section 526a, based on the particular facts alleged.         As
    mentioned, the Court of Appeal declined to address the question.
    14
    To the extent Holloway v. Showcase Realty Agents, Inc.
    (2018) 22 Cal.App.5th 758 is inconsistent with this opinion, we
    disapprove that decision.
    17
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    The parties argued each side of the issue in their briefs to
    this court. Neither party disputes that Code of Civil Procedure
    section 526a is, as a general rule, available to taxpayers who
    wish to challenge government contracts affected by financial
    conflicts of interest. We agree. (See ante, pp. 15-16.) But the
    statute also prohibits the granting of an injunction “restraining
    the offering for sale, sale, or issuance of any municipal bonds”
    for public improvements or facilities. (Code Civ. Proc., § 526a,
    subd. (b).) The parties have disagreed as to how that prohibition
    applies here, given the nature of plaintiff’s request for relief.
    The prayer for relief in plaintiff’s complaint indicated that it was
    seeking, among other things, a judgment declaring the bond
    transaction invalid. At oral argument, plaintiff suggested for
    the first time that it was only seeking disgorgement of payments
    received by the allegedly-conflicted officers for their role in
    administering the bond issuance. The question of what
    particular form of relief plaintiff is seeking, and whether such
    relief is available under Code of Civil Procedure section 526a,
    should be answered first by the Court of Appeal. The parties
    agreed at oral argument that a remand would be the best course
    of action were we to find section 1092 does not provide plaintiff
    a private right of action.
    18
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Opinion of the Court by Corrigan, J.
    III. DISPOSITION
    The Court of Appeal’s judgment is reversed. The matter
    is remanded for the Court of Appeal to decide whether this
    plaintiff may proceed under Code of Civil Procedure section
    526a or any other statutory provision.
    CORRIGAN, J.
    We Concur:
    CHIN, J.
    LIU, J.
    CUÉLLAR, J.
    KRUGER, J.
    GROBAN, J.
    19
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC
    FACILITIES FINANCING AUTHORITY OF THE CITY OF
    SAN DIEGO
    S245996
    Concurring and Dissenting Opinion
    by Chief Justice Cantil-Sakauye
    The purpose of the conflict-of-interest statutes, including
    Government Code sections 1090 and 1092,1 is to protect the
    public. This purpose takes on special importance in the context
    of municipal bonds because of the prevalent use and economic
    importance of these bonds in the state of California.2 California
    relies on these bonds to make capital improvements and to build
    and maintain public works, each of which is “a quintessentially
    public function.” (Department of Revenue of Ky. v. Davis (2008)
    
    553 U.S. 328
    , 342; see Cal. Debt, supra, table 3.) Consistent
    with the fact that these bonds are “the way to shoulder the
    cardinal civic responsibilities [of] protecting the health, safety,
    and welfare of citizens,” it is the citizenry, or taxpayers, who
    1
    All further statutory references are to the Government
    Code unless otherwise indicated.
    2
    See California Debt and Investment Advisory Committee,
    2018 Summary of California Public Debt Issuance (hereafter
    California Debt), tables 1, 2  [as of Dec. 23, 2019]
    [reporting that in 2018 California and its political subdivisions
    issued approximately $62 billion in public debt, of which $50
    billion was in the form of bonds]. All Internet citations in this
    opinion are archived by year, docket number, and case name at
    .
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Cantil-Sakauye, C. J., concurring and dissenting
    ultimately pay for these bonds. (Department of Revenue of Ky.
    v. Davis, at p. 342, fns. omitted.)
    One would think, then, that municipal bond issuances
    would be subject to the most exacting scrutiny — the kind of
    scrutiny needed to detect and remedy conflicts of interest that
    could both undermine public confidence in this crucial financing
    vehicle and saddle taxpayers with large enduring financial
    obligations. Yet, today’s majority opinion holds otherwise. The
    majority interprets section 1092’s language providing that “any
    party” may bring a judicial action to avoid a contract involving
    a prohibited conflict of interest as conferring standing only upon
    the parties to the very contract to be avoided. I disagree. I do
    not believe the Legislature created a scheme that counts on the
    foxes to guard the henhouse, and leaves taxpayers helpless to
    halt even the most egregiously conflicted government bond
    issuances. The likely result under the majority’s rule is that no
    one will bring a challenge to avoid a government contract
    afflicted with a conflict of interest. Because I do not believe
    section 1092 should to be read so narrowly as to deliver this
    unfortunate outcome and nothing in its language compels such
    an interpretation, I respectfully dissent.
    I. STANDING UNDER SECTION 1092
    The question before us is one of statutory interpretation.
    Section 1090 states, “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.” (§ 1090, subd. (a).) Section 1092, in turn, specifies,
    “Every contract made in violation of any of the provisions of
    Section 1090 may be avoided at the instance of any party except
    the officer interested therein.” (§ 1092, subd. (a).)
    2
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Cantil-Sakauye, C. J., concurring and dissenting
    In parsing the term “any party” in section 1092, we must
    decide whether the term refers to only parties to the challenged
    contract or whether it applies more broadly to encompass a
    taxpayer group like plaintiff San Diegans for Open Government
    (SDOG). If the former, then only contractual parties to a
    “contract made in violation of . . . Section 1090” have standing
    under section 1092 to challenge the contract. (§ 1092, subd. (a).)
    As with any statutory construction case, we begin “by
    considering the statute’s language and structure, bearing in
    mind that our fundamental task in statutory interpretation is to
    ascertain and effectuate the law’s intended purpose.”
    (Weatherford v. City of San Rafael (2017) 2 Cal.5th 1241, 1246
    (Weatherford).) In the context of standing, we have recognized
    that although “th[e] analysis [to determine standing] is
    grounded in the statutory text, the text read in isolation can be
    insufficient to adequately capture . . . other . . . considerations
    that have traditionally informed the outer limits of standing.”
    (Id. at pp. 1248-1249.) We therefore maintain a “sensitivity to
    the larger context . . . to better effectuate the Legislature’s
    purpose in providing certain statutory remedies.” (Id. at
    p. 1249.)
    The majority holds that the term “any party” in section
    1092 means “any party to the contract.” (Maj. opn., ante, at p. 7.)
    I disagree. I believe the term “any party” is ambiguous and
    capacious enough to reach plaintiff taxpayer group. Indeed,
    when section 1092 is read in light of the statutory structure and
    the imperative to “effectuate the . . . intended purpose” of the
    conflicts-of-interest statutes, the term should be understood to
    confer standing on interested taxpayers. 
    (Weatherford, supra
    ,
    2 Cal.5th at p. 1246.)
    3
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Cantil-Sakauye, C. J., concurring and dissenting
    A. The Text of Section 1092
    I begin with the text of section 1092, which, as noted,
    states, “Every contract made in violation of any of the provisions
    of Section 1090 may be avoided at the instance of any party
    except the officer interested therein.” (§ 1092, subd. (a).) The
    majority asserts that because section 1092 mentions a “contract
    made in violation of . . . Section 1090,” the term “any party”
    “refers back to the contract” and should be read to mean
    contractual parties. (Maj. opn., ante, at p. 7.) But simply
    because this is one plausible interpretation of section 1092
    does not mean it is the only such interpretation.
    The term “any party” is easily understood to mean a
    “person” or “litigant,” a designation encompassing nonparties to
    the challenged contract. (See Merriam-Webster Online Dict.
     [as of
    Dec. 23, 2019] [defining “party” to include “a particular
    individual: person”]; Black’s Law Dict. (11th ed. 2019) p. 1350,
    col. 1 [defining “party” both as “[s]omeone who takes part in a
    transaction” and “[o]ne by or against whom a lawsuit is
    brought”]; accord Black’s Law Dict., at p. 1695, col. 2 [defining
    standing as “[a] party’s right to make a legal claim or seek
    judicial enforcement of a duty or right” (italics added)].)
    A number of courts, including the Court of Appeal in this
    case, have reached conclusions that are consistent with this
    reading. (See San Diegans for Open Government v. Public
    Facilities Financing Authority of City of San Diego (2017)
    16 Cal.App.5th 1273, 1280-1283, 1284-1285 (San Diegans)
    [discussing these cases]; Davis v. Fresno Unified School Dist.
    (2015) 
    237 Cal. App. 4th 261
    , 297, fn. 20 [“The term ‘any party’ is
    not restricted to parties to the contract”].) The only Court of
    4
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Cantil-Sakauye, C. J., concurring and dissenting
    Appeal to have adopted a more constrained construction is San
    Bernardino County v. Superior Court (2015) 
    239 Cal. App. 4th 679
    . The majority opinion approves of San Bernardino,
    contending that its interpretation of section 1092 is “[t]he most
    natural.” (Maj. opn., ante, at p. 7.) Yet every Court of Appeal to
    have considered San Bernardino has disagreed with it. (See
    Holloway v. Showcase Realty Agents, Inc. (2018) 22 Cal.App.5th
    758, 767-770 [noting that “[s]ince the time of the trial court’s
    decision in the present case, a number of cases have criticized
    the rationale in San Bernardino” and joining the chorus of
    criticism]; San 
    Diegans, supra
    , 16 Cal.App.5th at p. 1284 [“we
    do not agree with the limited interpretation of section 1092
    adopted by the court in San Bernardino”]; McGee v. Balfour
    Beatty Construction, LLC (2016) 
    247 Cal. App. 4th 235
    , 248
    (McGee).) This seems to leave room for doubt concerning
    whether the majority’s restrictive reading of section 1092 is, in
    fact, the most reasonable.
    Neither of the two remaining bases the majority musters
    to support its interpretation of section 1092 entirely persuades
    me either. The majority first says that because section 1092
    allows a “contract made in violation . . . of Section 1090 [to] be
    avoided” and “[a] nonparty does not possess the power to [avoid]
    a contract,” we should infer that only contractual parties have
    standing under section 1092. (Maj. opn., ante, at pp. 7-8.) But
    our own case law offers a counterexample to the idea that
    nonparties cannot avoid a contract.
    In Thomson v. Call (1985) 
    38 Cal. 3d 633
    (Thomson), a
    taxpayer group that was not a party to a government contract
    successfully avoided the municipality’s responsibilities under
    that contract on the basis that the agreement violated section
    5
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Cantil-Sakauye, C. J., concurring and dissenting
    1090.3 The facts of Thomson are as follows: a councilman (Call)
    sold the City of Albany, by way of a middleman, a parcel of land
    he and his wife owned. (38 Cal.3d at p. 637.) The Calls received
    $258,000 from the transaction. (Id. at p. 643.) When the
    transaction was found to violate section 1090, the trial court’s
    solution was to allow the City of Albany “to retain the land and,
    at the same time, recover the $258,000 plus interest from the
    Calls.” (Thomson, at p. 646.) We recognized the “harsh[ness]”
    of this remedy but ultimately approved of it, reasoning that “the
    goals and policy concerns underlying section 1090” warranted
    such solution. (Id. at p. 647.) Thomson thus shows that a
    nonparty can seek to avoid the terms of a contract.4 In light of
    such precedent, I do not see why we would be compelled to
    interpret section 1092’s reference to “avoid[ance]” to mean that
    only a party to the contract may seek such a remedy. (§ 1092,
    subd. (a).)
    The majority next looks to the “provisions of the Civil
    Code” to buttress its conclusion that the term “any party” in
    3
    Not incidentally, this is exactly what SDOG has said it is
    seeking to do in this case: unwind a bond purchase agreement
    alleged to have been made in contravention of section 1090 so
    the City of San Diego would be reimbursed for the costs it paid
    under the agreement.
    4
    The majority asserts that Thomson “provides no answer”
    to the ultimate question before us, whether a nonparty taxpayer
    may invoke section 1092 to challenge a public contract. (Maj.
    opn., ante, at p. 14, fn. 13.) In other words, Thomson is not
    controlling in the present case. I do not contend that it is.
    Rather, I reference Thomson to show that it is not just parties
    to a contract who may sue to “avoid[] [the] legal obligations
    thereunder,” and thus “[t]he use of the word avoid in section
    1092” does not bear the weight the majority’s construction puts
    on it. (Maj. opn., ante, at p. 7.)
    6
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Cantil-Sakauye, C. J., concurring and dissenting
    section 1092 means any contracting party. (Maj. opn., ante, at
    p. 8.) I agree that we should look to the “ ‘structure and . . .
    surrounding provisions’ ” of section 1092 to ascertain its
    meaning. 
    (Weatherford, supra
    , 2 Cal.5th at pp. 1246-1247.) But
    it is the provisions neighboring section 1092 that are most
    germane, not those from outside the Government Code.
    In the article where section 1092 is found, the word “party”
    appears 35 times. In all of these instances, when the Legislature
    intends the word “party” to mean “contractual party,” it modifies
    the word “party” with a qualifier — “contracting,” “to the
    contract,” “to a contract” — that makes its intent unmistakably
    clear. (See §§ 1091, subds. (b)(2), (3), (5), (6), (8), (14), (d)
    [referring to “contracting party”], 1091.5, subd. (a)(4), (10)
    [same], 1091, subd. (b)(10) [“party to the contract”]; § 1091.5,
    subds. (a)(11), (b) [same], 1091.5, subd. (a)(14) [“party to a
    contract”].)5 In short, it appears that when the Legislature
    intends to refer to contracting parties, it does not simply say
    “party.” Only in section 1092 does the word “party” appear
    without any qualifier. It is fair to infer from the absence of any
    modifying language in this context that the Legislature
    intended for the word “party” within section 1092 to encompass
    more than a “contracting party.”6
    5
    In two instances, statutes within this article refer to
    “party to litigation” and “party to any proceedings.” (§§ 1091,
    subd. (b)(15), 1091.4, subd. (b).)
    6
    The majority states that to add a qualifier “to the phrase
    ‘any party’ in section 1092 arguably would have been
    redundant.” (Maj. opn., ante, at p. 11.) I cannot entirely
    7
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Cantil-Sakauye, C. J., concurring and dissenting
    In sum, read in isolation, the term “any party” in section
    1092 is at least ambiguous. In my view, the term is as
    susceptible to applying “broadly to embrace other interested
    persons” who are not parties to a contract as it is to a more
    restrictive reading. (Maj. opn., ante, at p. 6.) Any ambiguity is
    removed however when I consider the purpose, policy, and aim
    of section 1092.
    B. The Purpose of Section 1092
    Because section 1092 provides a mechanism to enforce the
    rule against conflicts of interest set forth in section 1090, a few
    words regarding the purpose of section 1090 are appropriate.
    The goals behind section 1090 are to “eliminat[e]” financial
    temptation faced by public officials, “avoid[] the appearance of
    impropriety,” and “assur[e] the [municipality] of the officer’s
    undivided and uncompromised allegiance.” (
    Thomson, supra
    ,
    38 Cal.3d at p. 648.) In light of these goals, we have said that
    disagree with this carefully couched assertion, because in saying
    that a qualifying addition “arguably would have been
    redundant,” the majority acknowledges that it arguably would
    not have been redundant. (Ibid.) Indeed, such an addition
    would not have been clearly surplusage. Even the provisions
    cited by the majority show that the Legislature may modify the
    word “party” although the statutory language already
    references a contract. (See 
    id. at p.
    8 & fn. 7.) For instance,
    Civil Code section 1689 provides that “[a] contract may be
    rescinded if all the parties thereto consent.” (Civ. Code, § 1689,
    subd. (a), italics added; see also 
    id., § 1559
    [“[a] contract, made
    expressly for the benefit of a third person, may be enforced by
    him at any time before the parties thereto rescind it”].) As such,
    had the Legislature wanted to, it easily could have drafted
    section 1092 to read, “Every contract made in violation of any of
    the provisions of Section 1090 may be avoided at the instance of
    any party thereto,” without being redundant.
    8
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Cantil-Sakauye, C. J., concurring and dissenting
    section 1090 deserves “strict enforcement.”              (Thomson, at
    p. 650.)
    The “strict enforcement” of section 1090 necessarily
    depends in part on who may sue to enforce its substance.
    (
    Thomson, supra
    , 38 Cal.3d at p. 650.) Simply put, however
    strict the prohibitions of section 1090 are, if no one could — or
    would — bring suit to vindicate its provisions, then section 1090
    is a paper tiger. In the context of a different conflict-of-interest
    statute (section 526a of the Code of Civil Procedure), we have
    recognized the need to empower “ ‘a large body of the citizenry
    to challenge governmental action which would otherwise go
    unchallenged in the courts because of the standing
    requirement.’ ” 
    (Weatherford, supra
    , 2 Cal.5th at p. 1251.) That
    same need arises in the context of section 1090, and this is where
    section 1092 plays a crucial role.
    Section 1092 allows “any party except the officer interested
    therein” to bring suit. (§ 1092, subd. (a), italics added.) The
    majority’s interpretation of section 1092 means that in
    circumstances in which every party to the contract is for one
    reason or another an interested government official no one will
    be able to sue for avoidance under the statute. (See, e.g., People
    v. Superior Court (Sahlolbei) (2017) 3 Cal.5th 230, 235, 243
    [discussing a case in which the counterparty to a government
    contract was an interested person because, while working for a
    school district, she “advised the district to retain her consulting
    company . . . , which the district did”]; California Taxpayers
    Action Network v. Taber Construction, Inc. (2017) 12
    Cal.App.5th 115, 145; 
    McGee, supra
    , 247 Cal.App.4th at p. 249.)
    Even when it is not the case that all parties to a contract
    are “[m]embers of the Legislature, state, county, district,
    9
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Cantil-Sakauye, C. J., concurring and dissenting
    judicial district, . . . [or] city officers or employees,” such parties
    may still have little incentive to unwind a transaction that they
    have ratified. (§ 1090, subd. (a).) Government officials would
    appear to have little financial or political motivation to sue on
    behalf of the public when, by suing, the officials themselves
    could be implicated for alleged collusion, delay, malfeasance, or
    negligence. A private counterparty to the contract also may
    have little reason to bring suit, given that it won the contract or
    otherwise engaged with the public entity and so likely would not
    want to disrupt the status quo, invite bad press, or rouse
    suspicion that it engaged in bribery or collusion with a public
    official.
    In other words, I believe the court below was correct when
    it said, “The strict and important policy embodied in section
    1090 . . . will not be vindicated if public officials believe section
    1090’s substantive provisions may only be enforced by the very
    public officials or public entities who have violated the statute’s
    provisions.” (San 
    Diegans, supra
    , 16 Cal.App.5th at pp. 1283-
    1284.) Because “a public official’s duty to avoid even temptation
    cannot be advanced by adopting a rule which limits civil
    enforcement to that public official or public entities controlled
    by the official,” I would not adopt such a rule. (Id. at p. 1284.)
    The majority recognizes the public policies that support
    the decision below but maintains that “the Court of Appeal’s
    interpretation of section 1092 [is not] necessary to vindicate the
    policies embodied in section 1090.” (Maj. opn., ante, at p. 16.)
    According to the majority, this is because there are other
    mechanisms “for enforcing the substantive prohibitions in
    section 1090.” (Ibid.) These are: criminal prosecutions under
    section 1097, civil or administrative actions brought by the Fair
    Political Practices Commission (FPPC), and civil actions “by
    10
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Cantil-Sakauye, C. J., concurring and dissenting
    taxpayers under Code of Civil Procedure section 526a where
    appropriate.” (Maj. opn., ante, at p. 17.) In my opinion, none of
    these provisions quite fills the gap left by the majority’s
    construction of section 1092.
    Neither the threat of criminal prosecution nor action by
    the FPPC protects the public in the way that section 1092 does
    — or at least, should. An official may be criminally prosecuted
    only if he or she “willfully and knowingly” violates section 1090.
    (People v. Chacon (2007) 
    40 Cal. 4th 558
    , 570; see § 1097, subd.
    (a).) This heightened mens rea requirement leaves a swath of
    instances in which the official may have had an improper
    interest, the public was deprived of his or her “absolute loyalty
    and undivided allegiance,” and yet there is no recourse to be had
    from the Attorney General or district attorney. (Stigall v. Taft
    (1962) 
    58 Cal. 2d 565
    , 569.)
    The FPPC, meanwhile, cannot act except upon “written
    authorization from the district attorney of the county in which
    the alleged violation occurred.” (§ 1097.1, subd. (b).) Thus, in a
    case in which the district attorney, for whatever reason,
    withholds authorization, the FPPC cannot even begin “an
    investigation that might lead to administrative or civil action”
    against an interested official. (Ibid.) Moreover, neither the
    FPPC nor criminal prosecutors can offer the public the remedy
    available under section 1092: avoidance of the contract.
    Although the penalties afforded in FPPC or criminal actions are
    not insubstantial (see §§ 1097, subd. (a), 1097.3, subd. (a)), their
    target are the officials themselves, not the resulting contracts
    foisted on the public. And the public may be both less interested
    in sending someone to prison than unwinding a raw deal and
    less well served by a fine than by halting a bond transaction
    infected with self-interest.
    11
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Cantil-Sakauye, C. J., concurring and dissenting
    This leaves us with Code of Civil Procedure section 526a.
    An action brought under section 526a that disputes the validity
    of a bond is subject to a short 60-day statute of limitations. (See
    McLeod v. Vista Unified School Dist. (2008) 
    158 Cal. App. 4th 1156
    , 1166-1170.) This is in contrast to the four-year statute of
    limitations afforded to actions brought under Government Code
    section 1092. (§ 1092, subd. (b).)
    More importantly, in examining the limits of Code of Civil
    Procedure section 526a, we come full circle with the importance
    of bonds and the public interest. The majority refers to this
    limitation, acknowledging that under subdivision (b) of section
    526a “no injunction shall be granted restraining the offering for
    sale, sale, or issuance of any municipal bonds for public
    improvements or public utilities.” (Code Civ. Proc., § 526a,
    subd. (b); see maj. opn., ante, at p. 18.)7 In other words, when
    municipal bonds are at stake — precisely the instance in which
    the taxpayers bear the costs of paying for the public debt —
    taxpayers may not seek to “restrain[] the offering for sale, sale,
    or issuance” of any of those bonds under section 526a. (Code
    Civ. Proc., § 526a, subd. (b).) Yet the availability of such a
    remedy is crucial. Once bonds have issued, attempts to claw
    them back, rewrite their terms, or otherwise renegotiate the
    issuance may prove impossible. In the absence of preemptive
    7
    Relying on this provision, the majority argues that
    “[c]onstruing section 1092 to permit nonparties to sue to avoid
    contracts for section 1090 violations would effectively provide an
    end-run around the Legislature’s bar on claims seeking to enjoin
    municipal bond issuances.” (Maj. opn., ante, at p. 12, fn. 11.)
    Given that parties to the contract presumably could bring such
    claims, however, there is no reason to think that actions seeking
    injunctions on municipal bond issuances are, by necessity, the
    “end-run[s]” the majority makes them out to be. (Ibid.)
    12
    SAN DIEGANS FOR OPEN GOVERNMENT v. PUBLIC FACILITIES
    FINANCING AUTHORITY OF THE CITY OF SAN DIEGO
    Cantil-Sakauye, C. J., concurring and dissenting
    remedies like an injunction, self-interested governmental
    dealings may well inflict costly and irreparable harm on the
    public.
    Put differently, today majority’s opinion holds that in
    cases in which government officials make contracts that amount
    to writing checks on the public’s checkbooks, the public cannot
    stop them. This did not need to be the outcome. Section 1092 is
    readily capable of being read as conferring standing on nonparty
    taxpayer groups to bring a challenge in such circumstances.
    I would read the section thusly.
    II. CONCLUSION
    Like the Court of Appeal, I believe “plaintiff taxpayers
    have standing under Government Code section 1092 to
    challenge the [City of San Diego’s] ordinance on the grounds
    participants in the proposed transaction violated the conflict of
    interest provisions of section 1090.” (San 
    Diegans, supra
    ,
    16 Cal.App.5th at p. 1276, fn. omitted.) I therefore would affirm
    the judgment below.
    The majority today reverses and remands to the Court of
    Appeal “to decide whether this plaintiff may proceed under Code
    of Civil Procedure section 526a.” (Maj. opn., ante, at p. 19.)
    Although I dissent from the decision to reverse, I do not oppose
    a remand given the majority’s disposition.
    CANTIL-SAKAUYE, C. J.
    13
    See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
    Name of Opinion San Diegans for Open Government v. Public Facilities Financing Authority of the City
    of San Diego
    _____________________________________________________________________________
    Unpublished Opinion
    Original Appeal
    Original Proceeding
    Review Granted XXX 16 Cal.App.5th 1273
    Rehearing Granted
    _____________________________________________________________________________
    Opinion No. S245996
    Date Filed: December 26, 2019
    _____________________________________________________________________________
    Court: Superior
    County: San Diego
    Judge: Joan Marie Lewis
    _____________________________________________________________________________
    Counsel:
    Briggs Law Corporation, Cory J. Briggs, Anthony N. Kim; Higgs Fletcher & Mack, John Morris and
    Rachel E. Moffitt for Plaintiff and Appellant.
    Mara W. Elliott, City Attorney, David J. Karlin and George F. Schaefer, Assistant City Attorneys, and
    Meghan Ashley Wharton, Deputy City Attorney, for Defendants and Respondents.
    Counsel who argued in Supreme Court (not intended for publication with opinion):
    Meghan Ashley Wharton
    Deputy City Attorney
    1200 Third Avenue, Suite 1100
    San Diego, CA 92101
    (619) 533-5800
    Rachel E. Moffitt
    Higgs Fletcher & Mack LLP
    401 West A Street, Suite 2600
    San Diego, CA 92101
    (619) 236-1551