Plans for New Transit Station Nearly got Derailed in California due to an Alleged Conflict of Interest Involving the Planning Board

This post was authored by Georgia Reid of Touro Law Center

The case Balla v. Hall, 59 Cal. App. 5th 652 (2021) started about an alleged back-door deal involving a new design project under the purview of the North County Transit District (NCTD).  The NCTD plans and operates public transportation in northern San Diego County, and owns the Solana Beach Transit Station and surrounding land. The NCTD Board of Directors has nine seats, representing various local governments in the region.

The plaintiffs were City Council members Lesa Heebner and Mike Nichols, and a local developer Joseph Balla.  Heebner served on City Council from 2004 to 2016, and again was later appointed to a vacancy in 2018.  Nichols is a landscape architect who was a member of the City Council from 2006 to 2018.  Balla owns Strategic Assets Group, Inc., and works in real estate finance and development.

The defendants were Edward Siegel, a former candidate for the Solana Beach City Council in 2016, and Siegel’s campaign manager, Brian Hall.  Siegel is a psychiatrist and musician who ran in the November 2016 election. Hall is a real estate broker. Using a fictional name in his publications, Hall implied that Heebner and Nichols lobbied for the NCTD to select Balla for a Solana Beach train station project for a quid-pro-quo.  In exchange, it was alleged that Balla gave Heebner and Nichols design work on the project and made a charitable donation to a nature conservancy they supported.  This all took place during an election season. 

The defendants made one social media post, wrote four emails, and published one letter to the editor, the subject matter of which were alleged deals involving Heebner and Nichols. The social media post claimed that Heebner and Nichols were candidates who would “continue the shady business on the Solana Beach train tracks.”  The letter to the editor read, “rumors have surfaced that Lesa Heebner resigned from the Solana Beach City Council to take the design jobs for the redevelopment project from her ‘friend’ developer.”  The defendants then ran a campaign advertisement for Siegel.  The ad purported that Lesa Heebner supported Siegel’s campaign. 

Based on these publications, in May 2017, Heebner and Nichols sued the defendants for defamation.  Additionally, Heebner sued for “false light invasion of  privacy” based on the campaign advertisement. They filed their operative first amended complaint in October 2017. The same month, Balla sued for defamation based on the five of the publications. 

A California trial court denied anti-SLAPP (strategic lawsuit against public participation) special motions to strike claims for defamation and false light invasion of privacy.

Hall appealed the trial court’s denial of his anti-SLAPP defense.  Hall contended his publications were “political opinions about a conflict of interest regarding the transit project,” and therefore not actionable.

The court of appeals disagreed with Hall. The court stated that while political speech is appropriately accorded wide latitude, especially in election campaigns, calculated or reckless falsehoods can still amount to defamation even in that context. The facts of this case showed that “Hall knew or at least consciously disregarded the fact that Heebner and Nichols had no role in the NCTD selection process and the NCTD had no agreement with Balla.” The evidence showed that an agreement between the allegedly conflicted parties was not authorized until months later, and even then it was only an agreement to conduct further negotiations.

However, the court of appeals granted the anti-SLAPP motion on the second cause of action – Heebner’s “false light invasion of privacy” claim. The order denying Hall’s anti-SLAPP motion against Balla, and the joinder and discovery rulings as to both motions, were all affirmed.  

Balla v. Hall, 59 Cal. App. 5th 652 (2021)