Paulson v. City of San Diego, No. 00-55406.

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Writing for the Court: Graber
• Citation: 294 F.3d 1124
• Parties: Philip K. PAULSON, Plaintiff-Appellant, v. CITY OF SAN DIEGO; Mt. Soledad Memorial Association, Inc., Defendants-Appellees.
• Decision Date: 26 June 2002
• Docket Number: No. 00-55406.

294 F.3d 1124 Philip K. PAULSON, Plaintiff-Appellant,
v.
CITY OF SAN DIEGO; Mt. Soledad Memorial Association, Inc., Defendants-Appellees. No. 00-55406. United States Court of Appeals, Ninth Circuit. Argued and Submitted En Banc March 21, 2002. Filed June 26, 2002.

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Jordan C. Budd, ACLU Foundation of San Diego & Imperial Counties, and James E. McElroy, Law Offices of James E. McElroy, San Diego, CA, for plaintiff-appellant.

Casey Gwinn, City Attorney, and Anthony J. Shanley, Deputy City Attorney, The City of San Diego, and Charles V. Berwanger, Higgs, Fletcher & Mack LLP, San Diego, CA, for defendants-appellees.

Appeal from the United States District Court for the Southern District of California; Gordon Thompson, Jr., District Judge, Presiding. D.C. No. CV-89-00820-GT.

Before: SCHROEDER, Chief Judge, and PREGERSON, KOZINSKI, FERNANDEZ, RYMER, T.G. NELSON, HAWKINS, GRABER, W. FLETCHER, BERZON, and RAWLINSON, Circuit Judges.

Opinion by Judge GRABER; Dissent by Judge FERNANDEZ.

GRABER, Circuit Judge.

This appeal is the latest chapter in a protracted saga centered around a 43-foot-high Latin cross that stands atop Mt. Soledad in San Diego, California. In an earlier chapter, we held that the presence of the cross in a publicly owned park violates the California Constitution, and we therefore affirmed an injunction forbidding the city from maintaining the cross on public land. In this chapter, we hold that the way in which the City of San Diego sold the cross to a private entity, which now maintains the cross, also violates the California Constitution. Because both the constitutional infirmity and the injunction remain in place, we return the case to the district court to write the next installment.

BACKGROUND

The City of San Diego (City) owns Mt. Soledad, a 170-acre parcel of land that was dedicated to public use in 1916 as "Mt. Soledad Natural Park." Although most of the park is undeveloped and is maintained in its natural state, the top of the mountain has been cleared. The cross in question, which is constructed of concrete, stands in the center of the clearing where it was erected by the Mt. Soledad Memorial Association (Association) in 1954.

This cross is the third that has stood atop Mt. Soledad. The first was constructed by private citizens out of redwood in 1913. Vandals destroyed it in 1924. In 1934, someone replaced it with a cross made of wood and stucco. A windstorm destroyed that cross in 1952.

The San Diego City Council then granted permission to the Association to construct the current cross. In 1954, in a religious service held on Easter Sunday, the Association dedicated the cross as a tribute to veterans of World War I, World War II, and the Korean Conflict. The Association maintains the cross and obtains a permit from the City each year to host an Easter service at the cross. The cross also has been the site of weddings and baptisms. Although the Association has paid for most of the maintenance costs associated with the cross, public funds have been expended to maintain it as well.

Plaintiff Philip K. Paulson initiated this action in 1989, seeking to enjoin the City from allowing the Mt. Soledad cross to remain on public land. In 1991, the district court ruled that the presence of the cross in a publicly owned park violates the No Preference Clause of the California

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Constitution, article I, section 4. Murphy v. Bilbray, 782 F.Supp. 1420, 1438 (S.D.Cal.1991), aff'd sub nom. Ellis v. City of La Mesa, 990 F.2d 1518 (9th Cir. 1993). The court permanently enjoined the presence of the cross on publicly owned land. In our opinion affirming the injunction, we recognized that the Mt. Soledad cross, to the extent that it could be characterized accurately as a war memorial, was "[a] sectarian war memorial carr[ying] an inherently religious message and creat[ing] an appearance of honoring only those servicemen of that particular religion." Ellis, 990 F.2d at 1527.

To remedy the constitutional violation and to comply with the injunction, the City decided to sell the land under the cross to a private organization. In order to accomplish the sale, and acting pursuant to section 55 of the City of San Diego Charter, the City submitted "Proposition F" to the voters in the 1992 election. That proposition provided:

Shall the removal from dedicated park status of that portion of Mt. Soledad Natural Park necessary to maintain the property as an historic war memorial, and the transfer of the same parcel by The City of San Diego to a private non-profit corporation for not less than fair market value be ratified?

(Emphasis added.)

The City's mayor and deputy mayor and several City Council members submitted a statement to the Voter Information Pamphlet in support of Proposition F. They explained that the purpose of Proposition F was to authorize the transfer of the land under the Mt. Soledad cross to the Association in order to "SAVE THE CROSS." The argument described the cross as a "historic landmark and a dedicated war memorial," and they urged a "YES" vote on the measure to "SAVE THE MOUNT SOLEDAD CROSS. SAVE OUR HISTORY." The voters approved the measure by a 76 percent majority.

Thereafter, the City sold approximately 222 square feet of land under the cross to the Association, in a negotiated sale for fair market value. Consistent with the statement in support of Proposition F contained in the voter pamphlet, the City sold the land to the Association, which had stated its intention to maintain the cross. The City did not solicit offers or consider proposals from any other prospective purchasers.

In September 1997, ruling on Paulson's motion to enforce the injunction, the district court held that this method of sale violated the No Preference Clause of article I, section 4, of the California Constitution. Murphy v. Bilbray, No. 90-134, 1997 WL 754604 (S.D.Cal. Sept.18, 1997) (unpublished decision). The court found that the sale complied with the City Charter and other policies governing negotiated sales. Id. at *7-*8. However, the court also found that the City's failure to consider other prospective buyers created the appearance that the City preferred the Christian religion and that the City's primary purpose for the sale was to preserve the cross. Id. at *10. The court further ruled that the amount of land sold was too small to remedy the City's original constitutional violation. Id. at *11. It reasoned that, because the parcel of land sold was so small, and was surrounded by land owned and maintained by the City, most visitors would not be aware that the City did not own and maintain the cross. That being so, the City had not remedied the appearance of preference. Id. The court entered an order stating: "Both the method of sale and the amount of land sold underneath the Mt. Soledad cross do not cure the constitutional infirmities outlined in this Court's previous Order." Id.

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Following the district court's 1997 order, the City again attempted to dispose of the land beneath the cross. It expanded the size of the parcel available for purchase to 0.509 acres, and it published a notice that the City was inviting bids on the land. The City arranged for the Association "to quit-claim any property interests it may have in Mt. Soledad Natural Park, through escrow, to a future buyer as authorized by City Council." In exchange for the Association's agreement to quitclaim its interests in Mt. Soledad Natural Park, the City authorized an expenditure of $14,500 to refund to the Association its purchase money for the first sale.¹ The City received 42 requests for the bid proposal packets.

The introduction to "The City of San Diego's Invitation for Purchase Proposals[:] Mt. Soledad Memorial Site" stated:

The City of San Diego is inviting proposals from private non-profit corporations interested in purchasing approximately one-half acre of property in the Mt. Soledad Natural Park for the purpose of maintaining an historic war memorial. The property is presently the site of a large, concrete, Latin cross. The City is neither requiring nor precluding the retention or maintenance of a cross in its invitation for proposals.

(Emphasis added.) The Invitation clarified that the parcel of land for sale included land on which the cross stands. It further informed potential buyers of the Association's agreement to quitclaim its interests in the parcel for sale.

The Invitation explained that prospective purchasers had to submit four items. First, a proposal was required to include a "summary of the experience of the proposer and its qualifications to maintain the property as an historic war memorial." (Emphasis added.) The Invitation did not elaborate on what sort of qualifications were relevant to the maintenance of "an historic war memorial." Second, a proposer was required to submit a financial statement listing the proposer's current assets and liabilities and establishing the proposer's "financial ability to fund the full amount of the bid." Third, a proposer was required to describe the "Proposed Use" in a "[d]etailed outline for the maintenance of an historic war memorial, as authorized in the June, 1992, election." (Emphasis added.) Fourth and finally, the proposer was asked to submit a $5,000 deposit.

The Invitation outlined the criteria on which proposals would be evaluated:

1. Bid on the sale price.

2. Financial capability.

3. Expertise regarding the proposed use.

4. The use proposed — without regard to whether or not such proposal includes the retention or maintenance of a cross.

The Invitation did not explain how each factor would be weighted in the selection process, nor did it explain the criteria against which the proposed uses would be measured.

In response to the Invitation, five entities submitted proposals: the Mt. Soledad Memorial Association, Horizon Christian Fellowship, National League for the Separation of Church and State, St. Vincent DePaul...