Free Transcript - District Court of California - California

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 1 of 54

1 2 3

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

4 BLACKWATER LODGE AND ) TRAINING CENTER, INC., ) 5 ) Plaintiff, ) 6 ) vs. ) 7 ) BROUGHTON, et al., ) 8 ) Defendants. ) 9 ______________________________) 10 11 12 APPEARANCES: 13 For the Plaintiff: 14 15 16 17 18 19 20 21 22 23 24

Case No. 08CV0926-H(WMC) San Diego, California Friday, May 30, 2008 1:30 p.m.

TRANSCRIPT OF MOTION HEARING BEFORE THE HONORABLE MARILYN L. HUFF UNITED STATES DISTRICT JUDGE

MICHAEL I. NEIL, ESQ. Neil, Dymott, Frank, McFall & Trexler 1010 Second Avenue, Suite 2500 San Diego, California 92101 (619) 238-1712 JOHN NADOLENCO, ESQ. Mayer Brown, LLP 350 South Grand Avenue 25th Floor Los Angeles, California (213) 229-9500

90071

JEFFREY CHINE, ESQ. Luce, Forward, Hamilton & Scripps 600 West Broadway, Suite 2600 San Diego, California 92101 (619) 236-1414

Proceedings recorded by electronic sound recording; 25 transcript produced by transcription service.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 2 of 54

ii 1 APPEARANCES: (Cont'd.) DON McGRATH, ESQ. WALTER CHUNG, ESQ. 1200 Third Avenue, Suite 1100 San Diego, California 92101 (619) 235-5710 DON McGRATH, ESQ. Nancy Cablay United States District Court 940 Front Street San Diego, California 92101 Shonna D. Mowrer Echo Reporting, Inc. 6336 Greenwich Drive Suite B San Diego, California (858) 453-7590

2 For the Defendants: 3 4 5 Transcript ordered by: 6 Court Recorder: 7 8 Transcriber: 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

92122

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 3 of 54

1 1 2 3 4 SAN DIEGO, CALIFORNIA FRIDAY, MAY 30, 2008 --oOo-(Call to order of the Court.) THE CLERK: Two on calendar, 08CV926, Blackwater 1:30 PM

5 Lodge and Training Center, Inc. versus Broughton, et al. for 6 motion hearing. 7 8 THE COURT: MR. NEIL: State your appearances for the record. Yes, your Honor. Can you hear me okay

9 speaking up here? 10 11 THE COURT: MR. NEIL: Yes. Mike Neil for Blackwater, Neil, Dymott,

12 Frank, McFall & Trexler, your Honor. 13 MR. NADOLENCO: John Nadolenco on behalf

14 Blackwater. 15

I'm with the firm Mayer, Brown. I'm Jeff Chine with Luce, Forward,

MR. CHINE:

16 Hamilton & Scripps on behalf of Blackwater. 17 18 THE COURT: MR. McGRATH: Thank you. Don McGrath and Walter Chung on

19 behalf of the City and the other Defendants. 20 21 THE COURT: Thank you.

The parties in the previous case have some

22 technical equipment to take down, so that they wanted to 23 know for their planning purposes, what is your reasonable 24 time estimate for argument? 25 MR. NEIL: Your Honor, I assume it depends upon

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 4 of 54

2 1 the questions the Court may have and how much time the Court 2 would allow us, but this should not take long. 3 been well briefed. 4 5 I think it's

Did the Court receive our reply? I did. And I've read it. Thank you, your Honor. I

THE COURT: MR. NEIL:

All right.

6 think speaking for Blackwater, your Honor, 20 -- 20 minutes 7 on opening. 8 plan. 9 MR. McGRATH: I don't know what they're going to And I'm not sure what the City Attorney might

10 say, so I'll just respond to whatever they say in probably 11 10, 15, your Honor. 12 THE COURT: All right. So if we have them come All

13 back in an hour and a half, that would probably work. 14 right. 15 16 submitted. 17 You may proceed. The Court has reviewed the papers that are And you may make your argument. MR. NEIL: Thank you, your Honor.

I want to step

18 to the podium here.

And if I may, your Honor, I requested

19 permission of the Court to bring a recording device, and I'd 20 like to play something. It's a talk from the Mayor of San

21 Diego on the Roger Hedgecock show last night on radio 22 station 600. 23 this. 24 And basically -- and I have a transcription of And I told Mr. McGrath that I intended to play

25 this, your Honor, where the Mayor says in response to a

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 5 of 54

3 1 question that Blackwater met all of the permit requirements 2 required. 3 MR. CHUNG: Your Honor, we would object. He's

4 asking to play the recording. 5 what the recording says. 6 and it's also prejudicial.

Now he's actually telling you That's hearsay,

We would object.

If they wanted the mayor to come

7 in to testify about that, they should have made arrangements 8 or got a declaration. 9 about this situation. But the Mayor has said many things So listening to one recording about

10 something he said would be prejudicial as well as hearsay. 11 12 MR. NEIL: THE COURT: I didn't intend to -Just a second. On hearsay, overruled.

13 On prejudicial, overruled. 14 15 that too. 16 seen it. 17 MR. McGRATH:

You may play it.

Your Honor, I'd add foundation to I've never

I mean, I don't know what this is.

I don't know whose voice I'm going to hear. THE COURT: Do you have a transcript? This is a

18 TRO requested. 19 20

TROs are on short notice. Yes. And so if you have a transcript that

MR. McGRATH: THE COURT:

21 you could give over to the other side, that would be 22 helpful. 23 helpful. 24 25 And if you have one for the Court, that would be And then you could renew all of your objections. MR. McGRATH: Thank you, your Honor.

(Playing audio tape.)

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 6 of 54

4 1 MR. NEIL: Your Honor, I'm going to have to have

2 somebody with more technical expertise than I have to turn 3 this recording device on for me. May I ask Mr. Vanderwitt

4 (phonetic) to step forward to do that, please? 5 6 THE COURT: You may. I was going to give it a shot, but

MR. NADOLENCO:

7 that's dangerous. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Playing audio tape.) "Well, first of all, the original decision was ministerial. We get

probably 60-, 70,000 permit requests every single year. So if you think the

Mayor can know every one of those, that's absolutely ridiculous. When this

did come to my attention, I asked just to make sure that it followed the correct guidelines. The City Attorney I don't

raised some additional issues. know. I'm not an attorney and

unfortunately operate in a world where I don't get legal advice normally. this will be settled tomorrow. going to court tomorrow. But They're

The City

Attorney will have to present his opinion.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 7 of 54

5 1 2 3 4 5 6 7 8 9 10 11 "I believe it was properly permitted, so the decision comes down to whether there are any legal issues, and the City Attorney is going to have to take that up tomorrow in court, and the Court is going to make that decision rather quickly so that we can issue the permits if they're legal and lawful. And that's exactly what we'll do." THE COURT: MR. McGRATH: And you have a transcript of that? Your Honor, the transcript given to

12 me did not have the first paragraph of the Mayor saying 13 ministerial. 14 That was not on this. And I apologize if it doesn't have that We can add that. Well, the benefit of this is we're on

MR. NEIL:

15 on there, your Honor. 16 THE COURT:

17 recording equipment, so you can get a copy of the tape in I 18 think an inexpensive fashion. 19 inexpensive request. 20 MR. NEIL: Your Honor, what we have here is an I think it's $25 or some

21 issue that would never have come up, had not for whatever 22 reasons -- and I don't want to get into a political 23 discussion here -24 25 THE COURT: MR. NEIL: Nor does the Court. And I appreciate that.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 8 of 54

6 1 2 THE COURT: MR. NEIL: I review it on the law. But nevertheless, the City Attorney,

3 after Blackwater, through its contractor, had applied for 4 the appropriate permits and had been permitted all the way. 5 We have a firing range down there, your Honor, that's state 6 of the art. 7 I visited it, and I've seen it.

We have a mockup which is another separate issue

8 in this case which is basically container crates that are 9 used on board ships that have had some holes cut in them and 10 some port holes and a couple of doors so sailors with 11 plastic pistols can go through there and pretend like 12 they're searching for terrorists, et cetera. 13 THE COURT: But the ship simulator -- that's what That's not really before the

14 I call the ship simulator. 15 Court. 16 MR. NEIL:

It's another issue, and I'll keep it

17 out of here, but I'm just trying to point the flavor. 18 THE COURT: It's a side issue as opposed to

19 whether the certificate of occupancy should issue for the 20 present. If there's some other permits or other things that

21 need to happen for the ship simulator, that's a separate 22 issue. 23 24 Honor. MR. NEIL: And I agree with that exactly, your And of course we have office

And I appreciate that.

25 space for teaching sailors.

The basic -- basically, this

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 9 of 54

7 1 course that we've contracted with the Navy -- and we have a 2 longstanding relationship with the Navy over the years. The

3 same course is offered on the East Coast, but it's much more 4 economical, time-saving sailor's time to offer the course 5 here. It's just basically a self-defense course so sailors

6 on board ships can defend themselves if terrorists attack or 7 the ships are attacked and they can defend the ships and 8 defend themselves, essentially defending our country. 9 10 problems. The permitting process went extremely smoothly, no If the Court had the opportunity to note that

11 even in the exhibits attached to the Defendant's response to 12 our ex parte request, those exhibits reflect at numerous 13 places that a firing range was anticipated, that this was 14 going to be a training facility. 15 And all permits were granted, and everything was

16 fine up through and including May 16th, when the City 17 Attorney's Office issued a -- if your Honor is looking at 18 the exhibits, I would -- for example, in the reply brief, a 19 response, for example, at Exhibit C -- and this is in the 20 Defendants' opposition, which is a general application form. 21 And this is Exhibit C. It says, "Existing use." It's a big No And

22 warehouse that's really in a warehouse district. 23 residences around it. 24 so it is a warehouse. 25

It's in a fairly isolated area.

The proposed -- if you look to the right, it says

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 10 of 54

8 1 proposed use, it says training facility. Then underneath

2 that it says, "Project description, add indoor firing 3 range." This was from the very beginning, your Honor. And And

4 other applications, other forms filed with the City.

5 attached to Defendants' opposition, there are references to 6 firing ranges such as C-7, which is a hazardous material 7 questionnaire. 8 Now, this hazardous material questionnaire is Down at the bottom, towards the bottom it It says,

9 dated 2/7/08.

10 says, "Briefly describe business activities." 11 "Training facility for law enforcement." 12 says, "Briefly describe proposed project. 13 range." 14 the City. 15 at. 16

To the right it Build firing

And this repeats itself in other forms filed with Of course the firing range was inspected, looked

It was approved and permitted, as were the classrooms. Everything was fine until the May 16th memo of the

17 City Attorney in which two issues were raised, one, that a 18 vocational school cannot exist in this Otay Mesa 19 redevelopment area, and number two, that you can't have a 20 firing range without going through a laborious process. 21 It's discretionary, and you have to go through the 22 California Environmental Quality Act procedures, a very long 23 drawn-out procedure. 24 This is the first time this has ever come up. And we have set

25 Nobody in the City had ever brought it up.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 11 of 54

9 1 forth in our points and authorities, your Honor, and cited 2 the Court to, number one, a vocational school is permitted. 3 It's zoned for vocational schools. 4 there. Vocational schools exist

And the Municipal Code sections that we have cited

5 set forth that what is allowed in the zone, specifically 6 vocational schools, they are permitted. 7 It should be a nonissue. The vocational schools

8 are permitted in that area because it's zoned for it, and 9 the Municipal Code allows for it. 10 THE COURT: And their opposition doesn't really

11 raise that issue. 12 MR. NEIL: It really -- it really doesn't. I

13 mean, it's referred to, but it really doesn't. 14 The firing range issue has been abandoned. What

15 was raised in the memo of the City Attorney of May 16th is 16 no longer an issue. 17 18 So what -THE COURT: And I think in your papers you point

19 out two other firing ranges never went through any 20 discretionary review process. 21 MR. NEIL: You know, I find it somewhat ironic

22 too, your Honor.

Those of us who live here in San Diego --

23 and I pointed out to one of my colleagues who came down from 24 L.A., right in the heart of our city we have a police firing 25 range. And if anybody is out there in that area during the

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 12 of 54

10 1 day, they'd think a gun battle is going on somewhere because 2 of all the shooting. 3 it is slightly ironic. 4 Now, we never thought there was anything else But that's neither here nor there, but

5 remaining after May 16th until suddenly there was a request 6 on or about May 23rd from the City. And I believe it was

7 from the chief building officer -- and that was Ms. Amate -8 that we needed a permit for the mockup. 9 permit for the mockup. Okay. We need a

We didn't get this until May 23rd.

10 We actually applied for it on May 28th and we were rebuffed. 11 They would not accept the plans on that day, two days ago. 12 And Mr. -- our general contractor, who is present He was given the

13 here in the courtroom, was down there.

14 complete runaround, received a phone call that night from 15 Ms. Amate saying, come on back down and turn in the plans 16 again. 17 plans. 18 And the next day they accepted the plans on a 10He'd never had this happen before. They accept

19 day express passage -- package to get approved within 10 20 days. There will be no problem with getting that approved.

21 Our general contractor has been assured there's nothing in 22 this mockup. It's a kid -- kind of a grown-up kid's mockup.

23 It's a bunch of blocks together, and the only moving 24 parts -- it's not even a simulator. Calling it a simulator

25 almost gives it too much credence as like a flight simulator

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 13 of 54

11 1 or something like that, and it's not that. It's just walls

2 and a few doors and a couple of stairwells for sailors to 3 climb up or to walk through. 4 5 6 7 8 9 Now, so that was the process. THE COURT: MR. NEIL: THE COURT: MR. NEIL: THE COURT: That's in process. Yes. That's on track. It is. As far as you know. But that's not a And then after -That's in process.

10 deterrent to a certificate of occupancy; is that right? 11 12 Honor. MR. NEIL: That is absolutely our position, your

We have -- as a matter of fact, in Exhibit U, which

13 is attached to our complaint, your Honor, if you're looking 14 down in the lower right-hand corner, a certificate of 15 occupancy was signed on April 30th, '08 by an individual 16 whose name is a little difficult to decipher, but -17 18 THE COURT: MR. NEIL: It kind of looks like Aguirre. It did. It actually did. When I first

19 looked at it, your Honor, it actually did. 20 MR. McGRATH: It's the building Aguirre. There's

21 an Aguirre over there also, your Honor. 22 23 24 THE COURT: MR. McGRATH: THE COURT: It is -- it is Aguirre. We're everywhere. It looks like Aguirre, but it's -- so

25 it is an Aguirre, but it's a different Aguirre.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 14 of 54

12 1 2 3 MR. McGRATH: MR. NEIL: THE COURT: Yes, your Honor.

Yes. All right. Thank you. What's his

4 first name? 5 6 pleadings. 7 Well, then of course, crossing in the mail on May MR. NEIL: I don't know. I saw it in some of the

8 19th, despite our letter of the same date setting forth what 9 we believe to be the correct law and countering the 10 allegations made in the City Attorney's memo of May 16th was 11 the letter from Kelly Broughton (phonetic) saying that our 12 certificate of occupancy would not be issued. 13 I will represent to the Court that it is -- that

14 is nothing more at this point in time than an act that must 15 be performed. That must be performed. Because we have met

16 all of the permitting requirements that we were asked to do 17 up through and including that time. 18 THE COURT: What do you say to -- the City's main

19 response is they're concerned about who is the applicant and 20 whether -- whether the correct people were applying for the 21 permits and other things along that line. 22 MR. NEIL: Well, you know, that's an interesting

23 point, your Honor, because when a warehouse or a home or 24 whatever is going to be remodeled, it's always the general 25 contractor that goes down and gets the permits. And I don't

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 15 of 54

13 1 know if your Honor has ever had that wonderful experience of 2 having a home remodeled, but you didn't have to go down 3 there and stand in line. It's the general contractor that So

4 has to go down there and go through all the hoops. 5 that's what went on here. 6

Interestingly, at all times when -- there have

7 been numerous inspections of this site by numerous 8 representatives of the City. Mr. Brian Bonfinglio

9 (phonetic) is here, who is the on-site -- I call him the 10 manager of the site, but he has a more elegant name than 11 that. He wore his Blackwater shirt. He always wears it. There are indications It was never

12 There is Blackwater handouts there.

13 everywhere that this is a Blackwater facility. 14 hidden from anyone. 15

In fact, interestingly, the letter of May 19th And it was It's

16 from Kelly Broughton is addressed to Blackwater. 17 not a mystery.

It was just a process to go through.

18 been made much more of for other reasons that we are not 19 going to dwell on here. 20 THE COURT: And this facility has nothing

21 whatsoever to do with the Potrero facility. 22 23 MR. NEIL: THE COURT: Absolutely. I think in the news, the two get kind

24 of muddled or people get sidetracked on thinking that this 25 has something to do with the other -- this is an indoor

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 16 of 54

14 1 firing range in a warehouse. 2 MR. NEIL: That's correct, your Honor. That was a

3 very big project out there, and this is by comparison a very 4 small project. 5 We have, of course, exchanged letters. We had to

6 move expeditiously.

I have been in talks with the City

7 Attorney's Office, and I want to compliment Mr. McGrath. 8 He's been very professional in this matter. 9 talked this out. 10 11 THE COURT: MR. NEIL: He's been in my court many times. All right. In any event, because of And we have

12 the June 2nd contract date with the Navy, which if we are 13 not able to meet that date, we will suffer, Blackwater will 14 suffer, the United States Navy will suffer -- and I would 15 submit, your Honor, I think the security of our nation 16 suffers to some extent when sailors are not trained in the 17 manner that they need to be trained. And the Navy

18 recognizes that, and that's why they reached out to 19 Blackwater to do this. 20 21 file it. So we had to file this lawsuit. Didn't want to

And we had to then ask for the TRO because of the

22 crush of the dates, and here we are. 23 I would like to just briefly address a couple of

24 issues that were I believe raised by the Defendant City. 25 It's interesting -- interestingly, they really haven't

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 17 of 54

15 1 raised any of the constitutional -- or opposed our 2 constitutional objections to what they have done because we 3 are on firm ground, and there's no question in my mind that 4 constitutionally we are being deprived of what is 5 essentially our right to go forward with this training on 6 June 2nd pursuant to not only federal law, but the state law 7 that applies. 8 Because the main case on this is this Thompson It says, hey, if you've met all the

9 case that we cited.

10 permitting requirements and the only thing remaining is the 11 occupancy permit, the City has to issue the occupancy 12 permit. 13 THE COURT: There's a Ninth Circuit case Parks It was on the

14 that assists in that regard as well. 15 constitutional grounds.

Although maybe one of the things I

16 was thinking of is does the Court really even need -- so one 17 approach is, if you get it under the City, State zoning and 18 permitting laws, do you really need the constitutional issue 19 to be addressed by the Court. 20 you in the Ninth Circuit. 21 MR. NEIL: I do, your Honor. But I would agree, I But I do think Parks helps

22 don't think we need to reach the constitutional issues. 23 It's much more of just a factual matter on what actually 24 occurred here in this case. 25 Now, I will submit that the concern that I saw in

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 18 of 54

16 1 the City Attorney's response to our opposition to our TRO 2 request was that we don't have a permit for the mockup. 3 Your Honor, we do not need to use that mockup. As a matter

4 of fact, at this point in time we have it all closed off 5 with sticker tape saying don't enter like a police scene 6 that they don't want anybody to go in. 7 And we're not going to use it. And I'll represent

8 to the Court we will not use it.

And if necessary, it has We But

9 to be a condition to any order that the Court issues. 10 will fully comply with it, and we will stipulate to it.

11 we need to go forward otherwise with the training of the 12 sailors on June 2nd. 13 And we believe that we're in the proper forum, You certainly have jurisdiction over this case. This is really

14 your Honor.

15 I think that issue is somewhat frivolous. 16 what the Federal Courts are for.

We are an out-of-state

17 corporation coming in here attempting to just conduct 18 business such as any local business would want to do. 19 This is -- perhaps we are perceived by some

20 members of the population as a symbol of something they 21 don't like, but an unpopular entity in some people's eyes is 22 being discriminated against also. This certainly lends

23 another reason why the Federal Court is the proper forum. 24 And there's certainly diversity here. 25 Your Honor, I don't know if the Court has any

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 19 of 54

17 1 questions for me. There were other matters that I was going

2 to touch on, but in light of the Court's comments, I might 3 now just simply defer to the City Attorney. 4 5 6 7 8 THE COURT: MR. NEIL: THE COURT: MR. NEIL: You could reserve your time. All right. And then we'll hear from Mr. McGrath. Thank you, your Honor. Your Honor, the reason I've been so

MR. McGRATH:

9 courteous is it's difficult for a simple lieutenant such as 10 myself to face a general in the Marine Corps. And I've

11 tried to be dignified throughout, given that shortcoming I 12 have. 13 14 15 well. 16 17 MR. McGRATH: Thank you. I hope. We Your Honor, we have -THE COURT: But normally you are dignified as

Your Honor, I listened to Mr. Neil's comments. It gets

18 totally object to the jurisdiction of this Court.

19 very confusing to go down the permit road and then to go 20 down the Federal Court road. 21 22 injured? But let me do my best. Fine. Is Blackwater We

Blackwater is diverse. No.

There's no injury to Blackwater by us.

23 dealt with somebody called Southwest and somebody called 24 Raven. 25 So no jurisdiction. THE COURT: No 1983 injury.

What about your own Municipal Code

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 20 of 54

18 1 that permits anyone -- all of the entities that applied have 2 the legal right to apply for the permit. 3 Municipal Code 112.010283. 4 MR. McGRATH: I have no problem. Again, I say, I get confused. San Diego

5 your Honor, that's where you get confused. 6 That's for the permit issue. 7 got to have diversity. 8 have a federal issue.

To be in front of you, we've We have to

We've got diversity.

And there is no federal issue in that So that's the difference

9 Blackwater has not been injured. 10 between that and the permit issue. 11 THE COURT:

But what if they are going to take

12 over or participate in the training as a lessee or something 13 else? 14 15 our team. MR. McGRATH: Plead it. Plead it. They sued everybody on Have But --

Have Southwest be a plaintiff. Fine by me.

16 Raven or whoever it is be a plaintiff. 17 THE COURT:

What about their declarations by --

18 and it's a declaration under oath by Mr. Brian Bonfinglio 19 that says that they are overseeing the location and 20 permitting and approval process for Blackwater San Diego 21 Otay Mesa facility. 22 MR. McGRATH: That's not in their pleading. There's no link to it. It's

23 not in their complaint. 24 permit is the permit. 25 question.

Again, the

The federal question is a federal And that's what I don't know.

Why are we here?

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 21 of 54

19 1 This is a State Court issue in your courts, the Federal 2 Courts. 3 THE COURT: Diversity -- you can have State Court

4 issues on diversity that can come in. 5 6 MR. McGRATH: THE COURT: What's the injury? They say that they're not going to be

7 able to open training. 8 MR. McGRATH: But they is not -- again, that they Had they put that name in the

9 is not plead in this case.

10 pleading -- they just jumped to the conclusion that 11 Blackwater was injured, and yet -12 THE COURT: But they have it in their declaration

13 as part of the request for a temporary restraining order. 14 MR. McGRATH: Well, that's a good one. Let's go

15 to that, your Honor.

The temporary restraining order wants

16 to say that Broughton is hereby enjoined from enforcing his 17 May 19th, 2008 letter, purportedly refusing to issue a 18 certificate of occupancy for the property. 19 20 an order. 21 22 THE COURT: MR. McGRATH: Sure I do. No, you don't, your Honor. This is This Court doesn't have jurisdiction to issue such

23 a mandamus procedure. 24 25 entirely. THE COURT: The mandamus -- there's 1983 claims

They don't have to be --

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 22 of 54

20 1 MR. McGRATH: Where is the 1983 harm to It's not alleged

2 Blackwater? 3 anywhere. 4

They say it, but where is it?

THE COURT:

There's -- under Parks.

It's a

5 property interest.

You're denying them a property interest, They're not --

6 and therefore there is 1983 jurisdiction.

7 they may choose and elect to go through the State Court 8 mandamus process, but they don't -- they do not have to. 9 In certain contexts, the Federal Government has

10 said -- Congress has said in 1983, we require an exhaustion 11 of administrative remedies. Our most common case in that

12 regard are prisoners who are in state facilities that sue, 13 and we require through congressional action some exhaustion 14 of administrative remedies. There's no such requirement in

15 the property interest context. 16 So I think if you look at the Ninth Circuit case

17 of Parks or Park cited in the Plaintiff's papers, I think 18 that addresses any court's concern on the jurisdictional 19 grounds. I do want to look at the complaint, though, on

20 your argument about whether or not they've alleged an 21 injury. 22 23 mentioned. MR. McGRATH: Because Southwest and Raven are not

But if you -- if you choose federal cases, your

24 Honor, the Supreme Court case of Berman vs. Parker, 348 U.S. 25 26 at 32, it says:

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 23 of 54

21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 "In such cases, the legislator, not the judiciary" -- "legislature, not the judiciary, is the main guardian of the public need to be served by social legislation, whether it be Congress legislating concerning the District of Columbia," et cetera. Going down on that same page: "The role of the judiciary, in determining whether that power is being exercised for a public purpose, is an extremely narrow one." Further going down: "We do not sit to determine whether a particular housing project is or is not desirable. The concept of public

welfare is broad and inclusive." Your courts, your Honor, the Federal Courts over

19 and over and over say this is an ever expanding area not for 20 judicial -- especially judicial -- federal judicial 21 meddling. We have an excellent process in the State Courts.

22 Even in the State Courts they haven't exhausted their 23 administrative remedies. 24 They're at the very start.

They still have this one permit hanging out, and

25 yet they tell us they're going to be a training facility,

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 24 of 54

22 1 and there's no -- there's never been a request that I know 2 of, your Honor, for training. There's no permit to train. There's got to

3 Because that's a little different ball game. 4 be exit, egress. 5

There's all sorts of things that occur. Then why did the City in Exhibit U --

THE COURT:

6 Mr. Aguirre of the City sign off certificate of occupancy 7 4/30? 8 9 inspector. MR. McGRATH: He's just -- he's a building

He signs off and says, you go ahead and do that But

10 if you want within the exercise of your discretion.

11 that's up to Mr. Broughton and the other folks down at City 12 Hall as to whether that discretion would be exercised. 13 THE COURT: Remember, it's under the -- it's under

14 the label "final inspection." 15 16 MR. McGRATH: THE COURT: Yeah. He's --

So on the other hand, you have them go

17 all the way through the permitting process, make all the 18 necessary repairs, alterations, electrical, everything else, 19 have the final inspection. The final inspector signs off

20 saying there's supposed to be a certificate of occupancy, 21 and then somebody refuses to give it. 22 MR. McGRATH: But he's at a low level. He goes

23 back to the headquarters. 24 together. 25 need.

They put all those other permits Do we have what we

Do we have fire escapes.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 25 of 54

23 1 Again, Mr. Aguirre -- that Mr. Aguirre -- look at Five He's

2 the totality of the square footage in Exhibit U. 3 thousand square feet.

That's not the whole premises.

4 only looking at a very small area. 5 6 harm. I go to the next point, your Honor, of irreparable There is no irreparable harm. Federal case or legend

7 on this, the best one, Los Angeles Memorial Coliseum 8 Commission vs. National Football League. As you remember,

9 there were a lot of allegations there of irreparable harm. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 It says: "The court identified the alleged injury to the coliseum in the absence of an injunction as lost revenues due to its failure to acquire an NFL team." And then it goes on: "The temporary loss of income ultimately to be recovered does not usually constitute irreparable injury. The key word is the consideration of irreparable. Mere injuries, however

substantial in terms of money, time and energy necessary expended are not enough. The possibility that an

adequate compensatory or other corrective relief will be available at a

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 26 of 54

24 1 2 3 4 later date in the ordinary course of litigation weighs heavily against a claim of irreparable harm." And here they come to you the day -- you know,

5 last week the man came in for the modular permit, and then 6 they come in and say to you -- they give me 24 hours to 7 brief. It was nice talking to your people from the baseball

8 game yesterday, but I got my brief done and I'm not 9 complaining. 10 THE COURT: What people -- oh, you mean you were I had tickets, but I was in court. Well, I didn't come with mustard on But anyway -We

11 at the baseball game. 12 13 me. 14 MR. McGRATH:

I've made that mistake. THE COURT:

Well, let me just explain on that.

15 were originally set for Monday because we had a criminal 16 trial on Tuesday. And then our trial here turned out That one ended up

17 that -- we had been in trial a long time.

18 finishing so that we thought we could -- on a Monday, it's 19 just -- we've got a lot of cases going on Monday. So I

20 thought we would give you the whole afternoon if you needed 21 to. 22 MR. McGRATH: No problem. I had my paperwork all I think we did a

23 ready to go in the 24-hour period anyway. 24 good job on that. 25 THE COURT:

And Mr. Chung helped you.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 27 of 54

25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 MR. McGRATH: MR. CHUNG: MR. McGRATH: He probably did. Mostly Mr. McGrath, your Honor. Ever so slightly.

To go on in the Coliseum case, it says: "The amended complaint alleged that without injunctive relief, the Commission would suffer a diminution of revenues, a diminution of the market value of plaintiff's property and the loss of substantial goodwill normally attached to a profitable enterprise. support of its motion, the Commission argued that without a preliminary injunction, it would be unable to enter into a lease agreement, begin renovations, obtain financing, renovations or respond to the Raiders' alleged demand for a nonrefundable advance. All of these are but monetary In

injuries which could be remedied." And I was saying before I commented on the

22 baseball, Mr. Neil is the one that's telling you now that 23 June 2nd or whatever it is is the date. 24 imposed date. That's a self-

Regardless of what he says it is or isn't, There's no -- no damage here that's

25 it's still only money.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 28 of 54

26 1 irreparable for an injunction. 2 THE COURT: You don't buy this training public

3 interest argument? 4 5 I'd buy. MR. McGRATH: No. Sorry. I will tell you what

If they had done it right and said, we're We're here to train these guys who

6 Blackwater.

7 unfortunately let the Stark (phonetic) get blown up because 8 they didn't know how to use rifles and so forth, which is a 9 great idea, and we're here and we're going to do it out in 10 Otay Mesa and we're going to have a pistol range and we're 11 going to have them crawling up ships so they don't trip and 12 shoot themselves -- which when I was in the Army, we learned 13 to do that, but they don't teach that in the Navy, so they 14 hire Blackwater. 15 Fine and dandy. Say what you're here for. Don't

16 tell me you're Southwest when there's a Southwestern school 17 next door that has a similar program. Don't tell me you're

18 Raven, which is nowhere in any of the pleadings. 19 THE COURT: But isn't it very common for That's very common.

20 contractors to come in on a facility? 21 MR. McGRATH:

I say this whole process flunks the

22 smell test.

When you sit and take the time to go through

23 each one of these permits that are kind of disjointed and -24 THE COURT: Are we picking and choosing because

25 you don't like the name of Blackwater?

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 29 of 54

27 1 2 3 4 5 6 MR. McGRATH: THE COURT: MR. McGRATH: THE COURT: MR. McGRATH: THE COURT: No, we're not. If that is the case -That is not the issue. So you love Blackwater. I love Blackwater. Okay. So the fact that it's

7 Blackwater applying for this has nothing to do with the 8 denial of the certificate of occupancy? 9 MR. McGRATH: No. No. It's the totality of the

10 circumstances of what is going on out in Otay. 11 THE COURT: So are you saying that every -- every

12 permit has to be in the name of the ultimate end user? 13 MR. McGRATH: No, it does not. But the whole They do --

14 setup could have been applied for together. 15 THE COURT:

But they don't have -- you mean --

16 you're saying the simulator and everything else? 17 MR. McGRATH: They did -- first they did, can we Then they did, can we have

18 put up some walls and so forth. 19 a shooting range. 20 they call a ride. 21 you're here. 22

And now they put in for a simulator which It's not a ride. You know, tell us why

That's why this red flag came up.

Wait a minute.

23 Overall, each little individual permit may have been okay 24 per the little inspectors that get out there and do their 25 best and knock on the walls and so forth. But when you put

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 30 of 54

28 1 it all together, we're talking major baseball league -2 major league training out there, your Honor. 3 4 the -5 6 7 MR. McGRATH: THE COURT: MR. McGRATH: With a climbing up --- middle of Otay Mesa. Climbing up a ship built -- which It's fairly substantial. It looks like -But it's indoors, isn't it? Yeah, but it's a ship bulkhead. And It looks THE COURT: In an indoor warehouse facility in

8 they build out there. 9 just like the ship. 10 11 THE COURT: MR. McGRATH:

12 there's a lot of classrooms around. 13 there's training going on. 14 thing was not applied for. 15 for a training facility. 16

There's a -- you know,

That issue, that particular There was never any application Never was. Again,

Mr. Neil says it's a vocational institute. Tell us --

17 another -- if it is, tell us it is. 18 19 THE COURT: MR. McGRATH:

But it's zoned that way. If it's zoned for a hotel, you've

20 still got to tell us you've building a hotel before you 21 build one. You're supposed to come down and say what

22 you're -- Hyatt can't just go out tomorrow and start 23 whamming nails in because it says they're going to have a 24 hotel out there. 25 That's our point. The discretion issue

Let me go on, your Honor.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 31 of 54

29 1 under California law. It's called Lindel vs. Board of They can't compel

2 Permit Appeals (phonetic), 23 Cal.2d 303. 3 Broughton to act. 4 process. 5 6 7 8 contempt. 9 10

They just can't do it through the TRO

It doesn't work that way. THE COURT: MR. McGRATH: THE COURT: Maybe they want to risk contempt. Say what? Maybe Broughton wants to risk

I mean, that's your alternative. MR. McGRATH: THE COURT: I missed it. Risk what? I

Contempt or a stay, absent a stay.

11 mean, how can you say you can't compel? 12 MR. McGRATH: Well, I'll just read you what the

13 case says at page 315: 14 15 16 17 18 19 "It is general rule that a writ of mandamus may not be employed to compel a public administrative agency possessing discretionary power to act in a particular manner." THE COURT: Okay. But doesn't that beg the

20 question, is this discretionary review or is it ministerial 21 review of the -22 MR. McGRATH: And it's discretionary now. As

23 Broughton's memo says, once he looked at everything, his 24 discretion came into play. What they check off -- they put

25 the word "ministerial" in when they do their walls and their

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 32 of 54

30 1 electrical and that sort of thing. 2 THE COURT: When there was the indoor firing range

3 on Morena next to a -- and I think there was a trailer park 4 and there was a paint store, did they do a discretionary 5 review process or a ministerial review process? I don't

6 think they did the discretionary review level three. 7 8 9 10 but -11 THE COURT: Well, have you asked your -- the rest MR. McGRATH: THE COURT: MR. McGRATH: I wasn't there. Well, they cited it in their papers. I don't know what happened there,

12 of the folks at the City Attorney about what happened on the 13 other firing range. 14 what happened there. So we look at comparable firing ranges, They cite in their papers that they

15 weren't made to go through any discretionary review process. 16 MR. McGRATH: But it's not just the firing range.

17 It's the firing range which are put next to the classrooms, 18 put next to the ladders and the -- you actually have a 19 bulkhead, you know, like the Navy does that you have to step 20 over. And you climb these ladders to be sure you don't, you

21 know, incorrectly use your weapon or catch it on a button 22 and make it fire. It's that whole concept of the training It's little bits and pieces of

23 that is not described. 24 permits. 25

So Broughton came along, and when he looked at the

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 33 of 54

31 1 whole picture said, in my discretion, I've got to look at 2 this. I want to stop it for now. And that's what he did.

3 The case I just cited again goes on to say: 4 5 6 7 "The Court may not substitute its discretion for the discretion properly vested in the administrative agency." And that was again, your Honor, Lindel vs. Board

8 of Permit Appeals, 23 Cal.2d 303. 9 So you can't compel Broughton to act, and you

10 can't substitute your Honor's thought process for his. 11 That's his job. 12 He's the guy that does discretion.

Going on, your Honor, in Burnham Prairie Homes,

13 Incorporated vs. Burnham -- New Burnham Prairie Homes vs. 14 The Village of Burnham, 910 F.2d 1474: 15 16 17 18 19 20 21 22 23 24 25 "Land owners and developers could not assert procedural due process claim under 1983 arising out of a denial of a building permit inasmuch as Illinois law provided unsuccessful applicants for building permits with sufficient state remedy to cure the sort of random and unauthorized denial of which the developer and the land owners now complained." And that's where I got my 1983. I haven't seen

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 34 of 54

32 1 your case that you cited, but that's where I picked it up. 2 THE COURT: In Parks vs. Watson, 713 F.2d 646,

3 Ninth Circuit 1993: 4 5 6 7 8 9 10 11 12 13 "The Oregon statute specified that in ruling on a particular petition, the agency shall determine three issues and if those three matters were determined in favor of the petition, the governing body shall grant the petition. In other

words, once the conditions are met, the City lacks discretionary powers." Parks, 716 F.2d at 657. So if the petitioner met the conditions, but was

14 denied the petition, the court there held that the 15 petitioner could bring a due process claim under 42 United 16 States Code Section 1983. 17 MR. McGRATH: Factually, I don't know that case,

18 that it had as many permits as we did, as many inspections, 19 as many different things being requested over time. 20 THE COURT: Can you give me any of the City

21 inspections where they were denied? 22 23 MR. McGRATH: THE COURT: Who? Your own City inspectors going through

24 final inspection where they said, no, something is missing. 25 MR. McGRATH: No, because they did it piecemeal.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 35 of 54

33 1 They didn't ever do the training facility. They told us

2 they were -- what was it -- warehouse use, no change. 3 Warehouse use, no change. 4 your Honor, in those -5 THE COURT: But that's not correct. It says How many times do you see that,

6 training facility. 7 MR. McGRATH: At the very end they use that word

8 for the first time. 9 10 11 THE COURT: MR. McGRATH: THE COURT: I think it's in March. But early on -That's not the very end. And then

12 after that, you still have the sign-off of your building 13 inspector. 14 MR. McGRATH: Again, Raven and so forth that were

15 doing electrical, drywall, et cetera, no change, no change, 16 no change. Now we have a total change. And again, I have a

17 hard time with Mr. Neil's statement that they don't care, 18 they just want a firing range. Well, that's not at all in The Navy wants

19 compliance with the contract with the Navy.

20 them to train these young people how to walk with a weapon 21 up a ladder and not hurt himself or herself. 22 How to shoot is very important. And their range

23 will take care of that part.

But the next step of the Navy

24 contracts that they have here and back east are the overall 25 process. So I question that, why he would say that's good

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 36 of 54

34 1 enough. 2 But if he says it, he says it. I go on, your Honor, with more federal law. In

3 Santa Fe Land Improvement Company, United States Court of 4 Appeals, Ninth Circuit, vs. City of Chula Vista, 596 F.2d 5 838. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 The court in that case says: "The complaint touches on a sensitive area of social policy upon which the Federal Courts ought not to enter unless no alternative to its adjudication is open." And that's at 839 of that decision. Going on on the same page: "In Sedercrist (phonetic) and Rancho Palos Verdes, we stated that land use planning is today a sensitive area of social policy, meeting the first Canton requirement. The Canton case that cited how that's -THE COURT: So your social policy concern is the

20 Federal Government contracting out with an outside entity to 21 provide training for sailors, and you're opposed to that on 22 public policy grounds? 23 MR. McGRATH: No. I do not -- you won't get me to

24 say I'm opposed to that at all. 25 THE COURT: So what is this --

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 37 of 54

35 1 MR. McGRATH: I'm saying the social policy is the

2 issuing of permits, the normal day-to-day business that 3 cities do, not federal judges. 4 THE COURT: Now, that -- that is -- I understand

5 that typically the Court would not get involved in 6 permitting issues, nor would the Court say every time some 7 homeowner is denied a permit would I envision that they can 8 run down to Federal Court and get a TRO. 9 your point in that regard. 10 But in this case, I think that the Plaintiff may So I understand

11 have shown that they have complied with the City permitting. 12 So this is why I'm asking you, show me where they haven't. 13 You've brought up the simulator, and that may be one issue 14 that we could address, but what other thing have they not 15 done? 16 17 together. MR. McGRATH: They haven't put the whole thing

They've just got little pieces of that warehouse.

18 Mr. Aguirre -19 THE COURT: Where does it say that you have to put

20 it all together? 21 MR. McGRATH: Mr. Aguirre does 5,000 square feet.

22 It's a 50,000-square-foot -23 24 well. 25 THE COURT: Okay. But there are other permits as

I mean, there are other sign-offs as well. MR. McGRATH: Well, the -- Raven, whoever they

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 38 of 54

36 1 are, did drywall and something else, electric, I think. 2 3 THE COURT: MR. McGRATH: Footings, masonry, roof, drywall -Does that say for training? Does it

4 say for, you know -- I don't think so.

They don't ever give We need to You can have

5 us the big picture of what they're there for. 6 then look at -- training means lots of bodies. 7 a shooting range and there's nobody in it.

But we're

8 talking about being sure there's fire exits and OSHA and -9 you know, I won't go so far as to say disabled and so forth 10 with the bulkhead at issue, but there are things that need 11 to be checked off on the totality of this request. 12 where we're coming from, your Honor. 13 THE COURT: The application says training That's

14 enterprises.

Why would you not think that -- that's the

15 first application. 16 MR. McGRATH: But where -- where is that on?

17 Which application do you have that on, your Honor? 18 THE COURT: 9/5/07, application for tenant

19 improvements by Southwest Law Enforcement Training 20 Enterprises. 21 MR. McGRATH: That's the first time they've put

22 that in there. 23 That's Raven. 24 25

Before it was always warehouse, no change.

Your Honor, I go on to say -THE COURT: So what about the -- so with the

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 39 of 54

37 1 general -- so if you look at the documents, the general one 2 dated -- here's one, general 3/15/08. But the hazardous

3 materials questionnaire dated way back 9/5/07 says, "Storage 4 of ammo, law enforcement training." 5 6 MR. McGRATH: THE COURT: Is this law enforcement? Then February 7th, the electrical and "Training facility at indoor firing

7 T.I. was all approved. 8 range."

So how could the City -- and that's dated -- it's

9 your -- it's on my -- if you're looking at my documents, the 10 top header. I don't know if you have this, but on -- it's And these are, I believe, from

11 page 18 of 26, Exhibit C. 12 you. 13 MR. McGRATH:

Their Exhibit C to their motion or

14 their complaint? 15 MR. NEIL: It's your -- it's the declaration of

16 Amate I believe you're referring to, your Honor. 17 THE COURT: The general application. Training --

18 it says, "Proposed use, training facility." 19 20 MR. NEIL: THE COURT: Yes. So your main point is the Federal

21 Government should not get involved in issuing building 22 permits. 23 MR. McGRATH: You bet. And also, there's a -- we

24 have a tremendous system there that hasn't even started to 25 be touched with -- you know, the end result is mandamus. I

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 40 of 54

38 1 think, you know, if I could predict something -- and I don't 2 know that I'm good at that, but this goes to planning. 3 Planning gets to look at it. Planning says fine, it's done.

4 Or if planning says no, then it would go to the City 5 Council, and the issue would be brought to the Council's 6 attention in full form. If planning didn't rule such as

7 there would be an appeal -- full appeal to Council. 8 And that is my point. There's no 1983. There's

9 no federal claim at all.

There's a company, Blackwater, who That's

10 doesn't live here, but they don't have any injury. 11 my point.

They're good on their permit part of Blackwater,

12 but they're not good on the Federal Court. 13 So they're not constitutionally injured. I mean,

14 why do we have State Courts if you can just come over here 15 every time something doesn't go too well for you. 16 17 18 19 20 Money. 21 22 23 THE COURT: MR. McGRATH: THE COURT: MR. McGRATH: Diversity. Ahh, but diversity with injury. You have to be out of state. And irreparable harm. Money.

Money is not irreparable harm. THE COURT: MR. McGRATH: THE COURT: All right. Thank you.

Thank you, your Honor. Let me ask Mr. Neil, can you get out

24 the complaint and say where is there the nexus between 25 Blackwater and the injury or Blackwater and Raven

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 41 of 54

39 1 Development Group. 2 3 MR. NEIL: Yes, your Honor. Thank you.

In the complaint, your Honor, we start at -- we

4 describe who Blackwater is starting at paragraph 19, page 5 six, and discussing Blackwater's contract with the United 6 States Navy. And then over at -- starting at paragraph 25, And then at

7 we discussed the site that was chosen.

8 paragraph 26 it says, "Initially, Blackwater hoped to work 9 with Southwest Law Enforcement Training Enterprises. 10 was a contractor that we hoped to work with." This

And initially

11 Southwest Law Enforcement Training Enterprises, who I'll 12 represent to the Court is someone that Blackwater has worked 13 with in the past, and they're a good outfit, and they're 14 involved with training also. But that -- they could never

15 reach a final agreement as to how the work was to be shared 16 and how it was to be done. 17 And at paragraph 30 of the complaint, page nine,

18 Blackwater -- it describes Blackwater's affiliate, Raven 19 Development Group. And by the way, Raven Development Group,

20 your Honor, was the same -- was involved in the Potrero 21 project and is a well known entity. And this specializes --

22 Raven Development specializes in the creation of training 23 facilities, and they assisted Blackwater with its 24 construction of and preparations for the Otay Mesa facility. 25 That's described in paragraph 30.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 42 of 54

40 1 And then it goes on to paragraph 31 to talk about

2 Blackwater being required to do certain things, et cetera. 3 That, I believe, describes the nexus between Southwest, 4 Raven and Blackwater. Raven and Southwest were essentially

5 acting as a contractor for Blackwater. 6 And as the Court has already pointed out, this

7 never was a mystery to the City because even the Mayor -8 what was the exhibit number of the Mayor -- there was a memo 9 from the Mayor that the -- there's a memo dated, I believe, 10 May 5th from the Mayor that describes Blackwater. 11 course -- Exhibit F. Then, of

The Mayor was aware that this facility

12 was going to be operated by Blackwater. 13 14 16th memo. And Mr. Aguirre addresses Blackwater in his May And of course, Kelly Broughton in her letter

15 back addresses Blackwater and -16 17 18 apologies. 19 In any event, this was not a mystery. I'm not MR. NADOLENCO: MR. NEIL: He. He's a he. I'm sorry about that. My

I mean he.

20 sure if that satisfies the Court's questions in that regard, 21 but let me just hit on a couple of other points, and then 22 I'm going to sit down, your Honor, unless your Honor has 23 some questions for me. 24 The issue about no injury, the Ninth Circuit has

25 decided that the loss of money, of course, is an injury.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 43 of 54

41 1 And I don't think that needs to be beat to death. We don't I

2 want to have to get into the business of suing the City. 3 think the last thing the City of San Diego needs right now 4 is another lawsuit for a lot of money that's lost on a 5 contract. 6 Nobody wants to go there. And Blackwater stands to lose this contract and

7 lose a considerable amount of money, as well as the Navy and 8 our sailors, our fighting men and women losing the training 9 that they deserve. 10 Now, in all deference to my opposing counsel's

11 argument upon the issue of the Court not being able to 12 interfere in discretionary duties of the City, we would 13 agree with that. And the cases he cited all had to do with And we're talking about a And the case law is

14 discretionary duties of the City. 15 ministerial -- a ministerial duty. 16 clear on that. 17 point in time.

This is not a matter of discretion at this The case is clear. And the cases that

18 counsel is citing did not deal with this discretionary issue 19 that we're talking about. 20 THE COURT: Other than -- other than the

21 simulator, is there any other permit that you're lacking? 22 23 MR. NEIL: THE COURT: No. No. We're completely permitted.

And you have complete approval from

24 all of the -25 MR. NEIL: Yes.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 44 of 54

42 1 2 3 THE COURT: MR. NEIL: THE COURT: -- all of the inspectors? Yes. And so you're saying that the head

4 development services person doesn't have discretion to then 5 nevertheless say, even though you have these approvals, I'm 6 not going to issue a permit without going through to the 7 City Council? 8 MR. NEIL: Yes. And I think Thompson makes that

9 clear, your Honor. 10 Your Honor, I would cite the Court also to --

11 there's the declaration of Ms. Amate at, for example, the 12 last exhibit before Exhibit B at the top. 13 City's form. This is the

If you look up there at the top left, it says, It says, "Ministerial." Do you see where

14 "Project type."

15 it's typed in that box? 16 17 THE COURT: MR. NEIL: Show me. This is Exhibit C?

This actually is Exhibit A, but it's There

18 the last exhibit in Exhibit A right before Exhibit B. 19 was a number of exhibits under Exhibit A. 20 last one. 21 22 23 24 got that. 25 MR. McGRATH:

But it's the very

It's kind of a block form, a computer type form. THE COURT: MR. NEIL: THE COURT: In Ms. Amate's declaration? Yes, your Honor. Let me first find that. Okay. I've

Does it have an exhibit number on

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 45 of 54

43 1 it? 2 MR. NEIL: Yes. It doesn't have a separate page

3 number on it. 4 THE COURT: My pages are numbered. Pardon me? Are your pages

5 numbered at the very top or not? 6 7 MR. NADOLENCO: MR. NEIL: Okay. A-9.

It's A-9?

I'll accept that.

I

8 can't read it on my copy.

But if the Court has that, up in

9 the left-hand corner, there's a box that says, "Project 10 type," and typed in there by the City is the word 11 "ministerial." 12 13 14 15 we are. 16 MR. NEIL: This is the one on -- your Honor, that In the upper left-hand THE COURT: MR. NEIL: THE COURT: Can you approach my clerk -Yes, your Honor, if I may. -- and just -- and then I'll see where

17 also says "Storage of ammo" on it. 18 corner it says "ministerial." 19 20 THE COURT: MR. NEIL: Okay.

And there's one more, if I may just And maybe counsel can help me.

21 remain here, your Honor. 22 This is Exhibit B-5. 23 THE COURT:

It's the last exhibit before C. First on the -- oh, I see where it

24 says, "Project type, ministerial." 25 MR. NEIL: Yes. And the same wording up here,

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 46 of 54

44 1 your Honor, on Exhibit B-5 in Ms. Amate's declaration on a 2 separate form. Same format, but up in the upper left-hand "Project type,

3 corner it again says "ministerial." 4 ministerial." 5 6 THE COURT: MR. NEIL: Thank you.

Your Honor, the Municipal Code Section

7 129.0114 which deals with issuance of a certificate of 8 occupancy states that: 9 10 11 12 13 14 15 16 17 "The building officials shall inspect the structure, and if the building official finds no violations of the Land Development Code or other regulations that are enforced by the City's designated code enforcement officials, the building officials shall issue a certificate of occupancy." This shows the legal effect of the signature of

18 the inspector who signed off on Exhibit U attached to our 19 complaint, your Honor. 20 Now, having said all of this, your Honor, we feel

21 that this -- well, obviously, Blackwater has a vested 22 interest. And speaking for myself at this time in our

23 country's history, we are not talking about anything of an 24 offensive nature. Blackwater is not involved down at Otay

25 Mesa in teaching how to invade another country or anything

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 47 of 54

45 1 else. We are simply in the self-defense business and

2 teaching our men and women, sailors of our armed forces how 3 to protect themselves and protect our ships. 4 There is some urgency to this. The USS Kohl was

5 bombed and 17 lives were lost in part perhaps to the fact 6 that the sailors were not properly trained. And at least

7 the United States Navy believes that their sailors need to 8 be further trained in self defense, and they think enough of 9 Blackwater to hire Blackwater to carry out this mission to 10 help save lives. 11 talking about. 12 And I would ask the Court to comply with our And that's really bottom line what we're

13 request and to issue the temporary restraining order as 14 requested and allow us to begin our training of the United 15 States Navy sailors on June 2nd, as we have been contracted 16 to do and that the Navy expects us to do. 17 18 bond. 19 MR. NEIL: You know, I've never had to do this, I've heard this brought THE COURT: Could you address the amount of a

20 your Honor.

Again, quite honestly.

21 up a little bit, and I almost have to ask one of my co22 counsel here what I think -23 THE COURT: You may. You may. Would you like one

24 of your co-counsels to address the amount of the bond? 25 MR. NEIL: Well, I think if he would like to do

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 48 of 54

46 1 so, he is more than welcome to get up here and talk about 2 that. 3 4 Nadolenco. 5 Here there is no harm. There is no potential MR. NADOLENCO: I would, your Honor. John

6 damage to the City. 7 their paper.

They don't even claim otherwise in

We've made that point in the balance of the So there's a good argument that a bond However, if the Court is

8 hardships argument.

9 is not needed at all whatsoever.

10 inclined to impose one, it should be in a modest amount of 11 $250 we put in the proposed order. 12 13 14 bond? 15 MR. McGRATH: Yes, your Honor. I would like to THE COURT: Thank you.

Mr. McGrath, any response on the issue of the

16 quickly respond to what Mr. Neil did.

Everything he did

17 with Amate, B-7, B-9, et cetera, where it says 18 "ministerial," those were partitions and electrical work, 19 which is ministerial. 20 The key in this case is the Exhibit D to their

21 complaint, the letter from Kelly Broughton to Brian 22 Bonfinglio, who I met and is a fine former Marine or still a 23 Marine. 24 25 Always a Marine. He says:

"As outlined in the attached opinion from the City Attorney's Office,

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 49 of 54

47 1 2 3 4 5 6 7 8 no certificate of occupancy will be issued until the appropriate discretionary process associated with the use of firearms and City limits and determination of use for vocational trade school by the Planning Commission has been completed." Again, tying it all together, firearms school. And that should stop I don't think

9 That process has yet to be completed. 10 it all.

We've got a fine system over there.

11 they're going to see the end of the world from our system. 12 I do think it's a bad precedent for this Court to get 13 involved in State Court issues. 14 I have had a chance to look at their statement of In Parks, they did all their permits. Everything was fine. We say they're

15 what Parks said.

16 They were all done.

17 not through yet as to what the totality of what they want, 18 training facility with guns. 19 20 21 million. THE COURT: MR. McGRATH: Thank you, your Honor.

Thank you. And the bond should be at least 5

We're going to get sued by everybody in that

22 neighborhood out there if we don't do it correctly. 23 24 THE COURT: All right. Thank you.

Before the Court is the issuance of a temporary The Court concludes that it does have

25 restraining order.

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 50 of 54

48 1 Federal Court jurisdiction and that the Plaintiffs have 2 shown the necessity for the issuance of injunctive relief. 3 The Court will take the matter, though, under submission and 4 issue a written opinion. And the Court's opinion will

5 probably come out on June 3. 6 7 Court. And I think that that timing is preferable to the I don't think that that's going to pose an

8 irreparable problem for you. 9 10 MR. NEIL: THE COURT: That does not, your Honor. Thank you.

And then I want to study the I'm not inclined to do If

11 issuance -- the amount of the bond. 12 $5 million.

The purpose is not to -- is not on that.

13 they're -- if they've met the requirements for the permits, 14 it's zoned vocational. No other firing range had to go

15 through a discretionary review process. 16 The Morena facility is closer to residential use I think that what's

17 than this facility in Otay Mesa.

18 happening here is more people take a look at the name 19 Blackwater, and then that just evokes on certain side one 20 set of feelings, on another side another set of feelings. 21 That's not the Court's review. 22 under the law. 23 24 MR. NEIL: THE COURT: Thank you. And the Court has reviewed the The Court's review is purely

25 excellent papers by both sides and then ultimately has to

Echo Reporting, Inc.

Case 3:08-cv-00926-H-WMC

Document 15

Filed 06/03/2008

Page 51 of 54

49 1 make the decision. 2 Then for purposes of a hearing, if the Court does

3 issue a temporary restraining order, then it expires within 4 10 days unless extended for good cause by the Court. So

5 probably I would hold a hearing if the parties are -- and I 6 would set then a briefing schedule for June 17t