Legal clinic champions local small businesses

May 11, 2012

Iris Yokoi

When Prof. Robert Solomon arrived at UC Irvine School of Law in July 2011, he and Prof. Carrie Hempel had plenty of students signed up to work in the Community and Economic Development Clinic that they would launch in August. But they needed to find clients who could use the free legal assistance.

An ideal client came knocking on the Law School’s door in the nick of time: A group of merchants in the city of Santa Ana, who only recently learned there was a multi-million-dollar pot of city money that was earmarked three decades ago for improving their business district, but had not been expended and was currently at risk of being seized by the state.

Now, the merchants, represented by law students Jessica Glynn, Susan Lewis, Tracey Steele, Flor Tataje and Mohammed Elayan supervised by Hempel and Solomon, are preparing to sue the State of California’s Department of Finance if that agency refuses to allow the city of Santa Ana to keep that money to improve the South Main Street Corridor.

"We have over 200 merchants in the area, and we have blighted buildings that need to be demolished and fixed up to create a destination, like other parts of Santa Ana that have been redeveloped," says Maggie Rodriguez of the Santa Ana Merchants Association. "That money was supposed to be for public works projects and for low-income housing in the area."

Says Solomon: "This money is a legally enforceable obligation that must be honored by the city of Santa Ana, and we have a perfect plaintiff for a lawsuit against the state."

That named plaintiff will be Gerald Peebler, a former business owner in Santa Ana who still owns property along South Main Street. Peebler successfully sued the city of Santa Ana 30 years ago when the city attempted to seize his property by eminent domain in order to redevelop South Main Street. The settlement from that suit created what is now estimated to be an $82 million improvement fund for the South Main Street Corridor.

City officials estimate they've spent about $29 million of the money on street improvements and other development projects in the area. But in a current economic climate where city and state coffers have been drained, various entities have been hungrily eyeing the South Main Street Corridor fund.

So Rodriguez, a former board member of the merchants association, set out to find legal help to protect the fund. Through her online research, Rodriguez read about Solomon's impressive public interest law career representing community organizations, and his 26 years of directing clinics and teaching students at Yale Law School. Then, she was stunned to read an article announcing that Solomon was leaving Yale to come to UC Irvine School of Law - practically next-door to Santa Ana's South Main Street. She called UCI Law immediately, and the nascent Community and Economic Development Clinic had its first client.

Rodriguez actually met with Solomon at the Law School in mid-August 2011, just as the Class of 2014 was gathering on campus for its 1L Orientation. "We ate leftover pizza from Orientation during our working lunch," Solomon says, chuckling.

Recently, Solomon met other South Main Street business owners when he attended a community meeting to help explain the case to a larger group of merchants and answer their questions. He explained that the state Department of Finance on May 7 decided that the South Main Street Corridor fund did not qualify as a legally enforceable obligation – but that this decision can be changed. If the state finance officials can not be convinced to change this decision, the UCI Law clinic will file a lawsuit, Solomon promised.

The merchants asked good questions: Had Solomon filed many of these types of lawsuits? Do we really have a strong case? If we lose this suit, could we appeal? If we win, could the state appeal?

Solomon's answers: Yes; Yes, particularly with Peebler as the plaintiff; Yes; and Yes.

And then, several merchants stood up and offered their full support and assistance to Solomon – especially "if you need more of us to join the lawsuit."

The city will ask the state to reconsider its decision, and the merchants and the Clinic will await the response. If the decision is not reversed within the next few weeks, the Clinic is preparing to file suit by June.