Transcript of June 17, 2008 Blackwater hearing.

Marilyn Huff (2008-06-17)

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• Doc35-Court_transcripts_6-17-08.pdf: Document 35 - Transcript of June 17, 2008 Hearing before Marilyn Huff

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA

BLACKWATER LODGE AND 	)  Case No. 08CV0926-H(WMC)
TRAINING CENTER, INC.,	)
                        )  San Diego, California
           Plaintiff,	)  
                        )  Friday,
vs.			)  June 17, 2008
                        )  9:00 a.m.
BROUGHTON, et al.,	)  
                        )  
           Defendants.	)  
------------------------)

TRANSCRIPT OF ORDER TO SHOW CAUSE HEARING
BEFORE THE HONORABLE MARILYN L. HUFF
UNITED STATES DISTRICT JUDGE

APPEARANCES:

For the Plaintiff:

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 90071
(213) 229-9500

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

For City of San Diego:

MICHAEL AGUIRRE, ESQ.
CARMEN BROCK, ESQ.
MARIA SEVERSON, ESQ.
GEORGE F. SCHAEFER, ESQ.
ROBERT J. WALTERS, ESQ.
Office of the San Diego City Attorney
1200 Third Avenue, Suite 1200
San Diego, California 92101
(619) 533-5886

Transcript ordered by: ROBERT J. WALTERS, ESQ.

Court Recorder: Nancy Cablay
United States District Court
940 Front Street
San Diego, California 92101

Transcriber: Shonna D. Mowrer
Echo Reporting, Inc.
6336 Greenwich Drive
Suite B
San Diego, California 92122
(858) 453-7590

SAN DIEGO, CALIFORNIA FRIDAY, MAY 30, 2008 1:30 PM

--oOo--

(Call to order of the Court.)

THE CLERK: Three on calendar, 08CV926, Blackwater Lodge and Training Center, Inc. versus Broughton, order to show cause hearing regarding issuance of preliminary injunction.

THE COURT: State your appearances for the record.

MR. NEIL: Thank you, your Honor. Michael I. Neil of the Neil, Dymott law firm representing Blackwater.

MR. NADOLENCO: Good morning, your Honor. John Nadolenco of the Mayer, Brown firm on behalf of Plaintiff Blackwater.

THE COURT: Thank you.

MR. CHINE: Good morning, your Honor. Jeff Chine for Luce, Forward, Hamilton & Scripps on behalf of Blackwater.

THE COURT: Thank you.

MR. AGUIRRE: Good morning, your Honor. Michael Aguirre on behalf of the City of San Diego. Good morning.

THE COURT: Good morning.

MS. BROCK: Good morning. Carmen Brock, Deputy City Attorney for the City of San Diego.

MS. SEVERSON: Good morning. Maria Severson, Chief Deputy City Attorney for the City of San Diego.

MR. WALTERS: Good morning. Robert Walters, Deputy City Attorney for the City of San Diego.

THE COURT: Thank you.

MR. SCHAEFER: Good morning. George Schaefer, Deputy City Attorney for the City of San Diego.

THE COURT: Good morning. This is a hearing on the order to show cause why the preliminary injunction should not issue. Plaintiffs may proceed.

MR. NEIL: Thank you, your Honor. Since the last time we were here, your Honor, the only change that has occurred in the landscape is that the City auditor has come forth with a report which we attached as an exhibit completely outlining the ministerial permit process that Blackwater complied with and said that all requirements were met and that all permits were properly issued.

So basically, the ground work is the same as the last time we were here except we have been up and functioning for the last two weeks, and the training of the United States Navy sailors has been ongoing.

However, there has been one change, and that is in the City's response to this preliminary injunction, order to show cause hearing in which for the first time -- although it was verbally discussed, I believe, by Mr. McGrath last time, but for the first time a theory of totality of circumstances in a ministerial permit process has now been made an issue.

This is new. Other theories that have been advanced since the initial letter from Ms. Broughton denying us the right to occupy the facility have been abandoned. She never mentioned totality of circumstances. Ms. Amate (phonetic), who in her declaration which is attached to the original papers that were filed with this court never mentioned totality of circumstance.

This is a theory that I will submit has been thought up by the City Attorney's Office in a desperate attempt to justify their actions. No citation to a Municipal Code section, to a state law or to any authority anywhere has been cited.

The San Diego Municipal Code Section 15170202 para (a) says if the permits and the building are in compliance, you do not have to comply with any Otay Mesa Development District review process. Nobody anywhere has said we did not meet the permit process totally and completely.

Where there's a reference somehow in what I would say is a somewhat disjoined discourse on this totality of circumstances argument by the City Attorney to the Otay Mesa Development District review process, your Honor, nowhere do they cite any section that says we did not meet that permit process and that we have not met all of the permit processes that are necessary to issue an occupancy permit.

And when requirements are met, the Municipal Code 129.0114 says the occupancy permit shall issue. The auditor said we have met all of the permit requirements.

The only other new -- I'm going to make my comments brief, your Honor, and I would like to reserve time to come back because I'm not sure where the City Attorney may go in their discussion today. There were two other new tangential new issues brought up. One had to do with a requirement that Blackwater had to comply with the Business and Professions Code and seek a state permit because we're training security guards and private investigators.

Well, I think we've made it clear by declarations and otherwise that we're not doing that. We're training United States Navy sailors, and the Business and Professions Code section simply does not apply to what we are doing there.

And the second reference, clearly a statistical error and maybe just a mathematical error or a typo. But since it appeared at least two times in the pleadings, I have to make mention of it. It's cited that our simulator, the mockup as I call it, which is simply some blocks that represent a ship when it has some doors cut in it -- and Mr. DeGuzman (phonetic), who is seated here, has seen it -- does not occupy 80-percent of the floor.

Mr. DeGuzman and I climbed all over that. And I'm sure he'd be the first one to say that it occupies a very small space there because when he and I stood up, we were looking out over this huge warehouse that exists where nothing is, and it only occupies approximately 2-percent. And if there's any issue on that, I'm sure Mr. DeGuzman, who is a very fine investigator for the City Attorney's Office, can verify that.

Having said that, your Honor, I would submit that from a constitutional grounds and from a factual grounds, there has been nothing to alter your ruling the last time, and we would ask the Court to issue a preliminary injunction. And unless the Court had any questions for me right now, I would like, with the permission of the Court, to defer any further comments until after the City Attorney makes their comments.

THE COURT: I do have a couple of questions. One is on the issue of irreparable injury. The Court has cited law that if you have a constitutional case in these cases, the Court does not necessarily require traditional irreparable injury. But -- and that the Defendants make a good point that traditionally land use issues are deferred to the local governments or state governments for land use planning.

But there's also law that once you comply on the City's own rules and regulations -- once you comply with the permit process that they set up and you've been granted the signed-off certificate of occupancy in the City's own documents under their own procedures where they noted that these are ministerial, then you can't change the rules of the game later on.

MR. NEIL: Yes.

THE COURT: But -- so nevertheless -- so there is a property interest. But I've said before, the Federal Courts are not the -- every time a permit is denied, people cannot run to the Federal Courts and seek relief.

You can, under 1983 jurisdiction, which provides for foregrounds and constitutional grounds if you show a constitutional deprivation -- sometimes those cases where there's a lesser standard of irreparable injury are classified in the civil rights litigation or to protect people from -- there's obviously people that frankly don't like your client. And I think that there's probably some of those individuals here today.

And so one of the reasons for the federal jurisdiction is to protect rights to make an even playing field, no matter whether your client is liked or not liked. So -- but nevertheless, the City makes a point about lack of irreparable injury. And generally, you don't do an injunction to prevent breach of a contract.

So could you address the grounds on which you claim that you have sufficient irreparable injury for the issuance of a preliminary injunction.

MR. NEIL: Your Honor, first of all, the cases and the law that the City Attorney has addressed in this case -- and by the way, we have not seen an affidavit or a declaration from anybody anywhere that -- within the City that discusses this theory of the City Attorney on the issues that we talked about, this totality of circumstances.

But coming back to the constitutional issues, the cases that they discussed almost exclusively deal with discretionary permits such as permits for subdivisions. You're going to build Otay Mesa, for example. To build all those buildings out there and to go through that process, that was a discretionary process.

So it's a totally different process than a ministerial process. In the ministerial process, we obtained that property right once we met all the permit requirements. Now, having that property right, obviously, to deny that denies it due process. But the irreparable harm comes from we have this obligation that we've made to train Navy sailors on how to defend themselves and their ships, and it would cause irreparable harm to our reputation if we were not allowed to Honor that contract and finish the training and commitment that we have made to the United States Navy.

Further, there is a -- obviously a financial interest that is involved here, and it would disrupt this entire training process that has been set in place in conjunction with the Navy to train the sailors both on the East Coast and on the West Coast. And this is at the request of the Navy to do this. And if we are not allowed to complete this, it would cause irreparable harm, and I believe that under -- under 1983, irreparable harm to reputation is a solid grounds to rule on and to find jurisdiction, your Honor.

And I'm not sure if that adequately answers your question.

THE COURT: Then can -- just factually, there was some attachments I think by the City investigator about the program. Are you training 24 people at a time? Is it for 24 people?

MR. NEIL: It's a three-week cycle, your Honor. And we train 24 sailors per cycle. Then there's a week off to get ready for the next one. The sailors go home. The new sailors come in. Then another three-week cycle. It's very intensive training for these sailors. It's very much of a hands-on type of training. The trainers they have out there are experts in what they do.

And you don't want to give somebody a course -- having no offense to any sailors who may be in the audience, but as a Marine, when you're training sailors how to shoot --

THE COURT: Aren't the Marines also within the Department of the Navy?

MR. NEIL: Well, that's always been a subject of discussion, and certainly the Navy throws it in our face all the time. But in any event, at least we're trained to shoot, and that's what we're trying to do with the Navy down there. It takes some time to do this properly and intensely and safely. And that's what Blackwater is doing down there.

THE COURT: But it's totally indoor?

MR. NEIL: Pardon me?

THE COURT: It's totally indoor?

MR. NEIL: It's totally indoors. Your Honor, if you were driving in a car --

THE COURT: See, I think that some of the people here, the name of your client, and then they digress because they're thinking in the public that this is the outdoor Potrero situation. We're talking about 24 sailors at a time, training them in an indoor facility.

Coronado is a beautiful town right across the bay from the City of San Diego, and the military and the civilians have co-existed wonderfully. And frankly, the Navy SEALS train over in Coronado more intensely than your 24 sailors on a three-week course here, and there haven't been any significant problems. It's a win/win for both the City and the military.

Here you're talking about a vocational training course. This is zoned vocational. I think that the level of concern is really addressed to a different project which is not going forward.

MR. NEIL: Your Honor, if I may --

THE COURT: At least on hold for now.

MR. NEIL: I agree. And as I told your Honor the last time, I wasn't going to get into the political aspects, but it's clear that this should not be a referendum on the war in Iraq, a referendum on who to vote for in the presidential elections. This is simply about whether or not the permitting process was met, which it was. And was it a ministerial process? Yes, it was. Everybody says it was. Should the occupancy permit be issued? Yes. The law says that.

If this was XYZ Corporation doing the same thing, we wouldn't be here. We're only here because of the political aspect that was raised. And I'll leave it at that, but I totally agree with your Honor on that.

THE COURT: Thank you.

MR. NEIL: Thank you.

THE COURT: Mr. Aguirre.

MR. AGUIRRE: Thank you very much, your Honor.

THE COURT: Welcome back.

MR. AGUIRRE: Thank you very very much, your Honor. Thank you for letting me be here. I know I have an uphill climb, but I also know that this Court is a fair court, and we've had uphill climbs before and --

THE COURT: And you've prevailed in some and lost in some. And so I am -- I am willing to listen, and I don't necessarily -- well, my tentative is still -- in reviewing the papers, my tentative is that I think that the tentative still remains against you.

So I'll let you proceed, and then at the end -- at some point I'd like you to address the fact -- I know on temporary restraining orders, they come on short notice, often at the worst possible time for the Court. But they often come on short notice. But I did note that the City auditor's report was issued the day after the Court's ruling. And I can't believe that that audit report was done in one day.

So it's a little -- I'm trying to get all the relevant information. And so I would have preferred to have the results of the auditor's report prior to the order, and I do think it tends -- the bottom line tends to confirm some of the issues that the Plaintiffs were arguing. And some of the earlier positions have just not panned out to be factual.

So that preliminary said, you may address the Court.

MR. AGUIRRE: Thank you very very much, your Honor.

Your Honor, I think you started off in your questioning to Plaintiff's counsel at the right point when you said irreparable injury, which I believe, if we examine it closely, takes us into the prudential reasoning behind case and controversy and the Article 3 issues and whether we are here having a premature adjudication of an unripe issue. And I think that that has manifest itself in your Honor's question in terms of irreparable injury, for there has been no final action on the part of the City.

What there has been is a good-faith discovery that the activities that were described in the application, initial application that said that there was no change in a warehouse that was being used to store warehouse products and not being used to do military training -- and that when that discovery was made -- and Mr. McGrath did argue totality of circumstances to your Honor. When the upperlevel decision-makers within the City were tipped off that what we were talking about is war training activity with no security whatsoever, which will have an impact on the City in terms of having to provide increased security for the area because of the nature of the activity, your Honor --

THE COURT: Twenty-four students. That's why I said you're telling me that Coronado has a problem?

MR. AGUIRRE: No. I'm telling you that Coronado is done under military security. This is not military security. This is a business park. This is an area where other businesses moved into that area expecting that they would have to live and others would have to live under the same Otay permit processes that they had to live under and certainly were never told that their next-door neighbor would possibly be a mercenary trainer of military individuals who -- your Honor, this is the --

THE COURT: That's an explosive term. I don't think --

MR. AGUIRRE: But it's the truth.

THE COURT: No.

MR. AGUIRRE: They are mercenaries. That is not true, your Honor. They are mercenaries.

THE COURT: No. I think that is -- no.

MR. AGUIRRE: Your Honor, they are mercenaries. Blackwater is a mercenary. They are hired out as private contractors. They are mercenaries. And your Honor, you have to defer to the City initially to make a judgment.

THE COURT: The private -- the private contractors give security for State Department workers.

MR. AGUIRRE: Well, but they --

THE COURT: The private contractors give security for ambassadors.

MR. AGUIRRE: Well, that's true, but they are still -- in this instance, your Honor, they are --

THE COURT: They're a -- they're a private contractor.

MR. AGUIRRE: They are -- they are -- your Honor, let's not mix words, then. What I'm telling you in terms of what we have to deal with is they are a mercenary trainer of mercenaries. And in addition, they do training of military personnel in a nonsecure area that is never contemplated by the Otay Mesa plan.

And when it was discovered --

THE COURT: Can I ask you, in the -- just in the original letter, was anything about the Otay Mesa brought up?

MR. AGUIRRE: Well, your Honor, that was the whole point of taking it up to the next reviews. The letter --

THE COURT: These were your land use planner people.

MR. AGUIRRE: Your Honor, this was the legal opinion that was issued by our office. And the reason it was kicked up to the level that it was, because of course you can't have military trainers moving into an area that is zoned for something completely different. Look at what it means for the City. It means increased security that we have to be concerned about. It means --

THE COURT: What about -- what about your -- so you say you didn't know. However, there's a business tax application filed on February 6th, 2008, more than two months before the City raised concern about Plaintiff's use of the Otay Mesa facility. It was filed in the name of Blackwater, audit report at seven. The application listed Blackwater's business address as 7685 Siempra Viva, the location of the facility at issue. And it's stated, "Blackwater will conduct security training for the United States Navy."

MR. AGUIRRE: Right. But that wasn't filed with the -- that's the whole point, your Honor. That's the whole point.

THE COURT: You got constructive notice.

MR. AGUIRRE: It doesn't make any difference. It doesn't make any difference because there is no suggestion that Development Services knew that information. There's nothing in the information that suggests that the people that made the initial decision that it was ministerial knew that information. And what is the theory, that somehow we knew the information and we just covered it up, and then out of nowhere --

THE COURT: No. It's filed with you. It's a public -- it's a public filing.

MR. AGUIRRE: But it goes to the good faith. We did not -- the people that were making the Development Services decisions had no knowledge of that permit application. There's nothing in the record to suggest otherwise. What they --

THE COURT: That's contrary to your audit report.

MR. AGUIRRE: No.

THE COURT: What the audit report answered, did they mislead? Answer, no.

MR. AGUIRRE: Different issue. I'm not -- we don't have to show they misled. That still remains an open issue because only the City Council can make those findings. But it's not a question -- that's why we're premature. Because we haven't gone through the process. It's very -- what we're suggesting here is this. When Development Services discovered that military training was going to be taking place at the site, that is at the point where they reached in and said, this has to, under our rules, go to a higher level of review.

And your Honor, what you have to do --

THE COURT: And can you cite me your rule?

MR. AGUIRRE: Yes, your Honor. It's the whole review process.

THE COURT: Not the whole review -- cite me the rule, the Code.

MR. AGUIRRE: Yes. Okay. I will. It's Municipal Code Section 15170202(b)(3).

THE COURT: And it says?

MR. AGUIRRE: And what it says -- just give me one moment, your Honor. What it says -- and I will read it to you here in just one moment, if I may.

THE COURT: Or if you want to move on and have the --

MR. AGUIRRE: No, no. I have it right here. What it says is -- what it basically says is this. Under Section 15170201 of the permits and procedures of the Otay Mesa Development District, under Subsection 2, it says:

"The City manager shall not issue any building permit for the erection, construction, conversion, establishment, alteration or enlargement of any building or structure in any portion of the Otay Mesa Development District until an Otay Mesa Development permit has been granted."

Now, when you discover that they're going to be doing military training at a site that was never zoned for military training and the City steps forward and says, we now, having discovered that, must submit this to a higher level of review, as we do with everybody else in the City where the City Council, the elected officials who are charged with the constitutional responsibility of making these decisions -- those elected officials have an absolute right to make that judgment. Your Honor has no authority under Article 3 to step in and to short-circuit that process.

Your Honor, under the case that your Honor is relying upon, the Parks case, that case is directly on point. And what the Parks case says, if -- your Honor, if I might recall the facts just quickly. In that case there were geothermal sources of power that the City, the governmental agency attempted to condition the abandonment of by the applicant in exchange for approving what the applicant needed for a vacation.

It went through the entire process, and at the very end of that process a decision was made. It was not made in the beginning of the process. It was not made in the middle of the process. And your Honor, in the Ninth Circuit, the controlling case is Harrington. And the Harrington case -- what the Harrington case says is that -- what the Harrington case says right on point -- and it talks about the ripeness issue -- is it says that in land use challenges, the doctrine of ripeness is intended to avoid premature adjudication or review of administrative action. It rests upon the idea that courts should not decide the impact of regulation until the full extent of the regulation has been finally fixed and the harm caused by it is measurable.

The Supreme Court's most recent discussion of the doctrine of ripeness as applied to land use cases is set forth in the McDonald case and in the Williams case. And what it basically says is that you have to allow the City to complete its process.

THE COURT: That's why I said in general I agree that land use planning decisions are traditionally left to the local governments.

MR. AGUIRRE: Different issue. Different issue, your Honor. That's a different issue.

THE COURT: But --

MR. AGUIRRE: If I might, your Honor. That's a different issue.

THE COURT: But --

MR. AGUIRRE: I'm not talking about deferral. I mean I'm talking about discretion. I'm talking about timing. The City has not completed -- there's never -- there's not a single case that has ever been reported that allows a court to enter into this level -- this early stage of review. The City has not even begun its review of the application, now that we have the pertinent facts.

THE COURT: Now that you have them -- you had them in February. Inland Empire Health Plan vs. Superior Court, 108 Cal.App.4th 588. A city has -- a city has a mandatory duty to issue a certificate of occupancy, once it has found that a construction project has complied with all requirements.

MR. AGUIRRE: And we haven't found that.

THE COURT: Wait a minute.

MR. AGUIRRE: And we haven't found that.

THE COURT: You say you have not found it.

MR. AGUIRRE: The City has not found that.

THE COURT: The City auditor did, the Mayor did, the building inspectors did.

MR. AGUIRRE: But the legislative branch makes that decision under our charter, one. And in Inland, that process had been totally completed. In Inland, in Thompson, in Parks, ever case your Honor has been cited to, every case your Honor has relied upon, the entire process had been completed.

Your Honor, just -- when you say we knew, that is a question of fact that has not yet been determined.

THE COURT: Well, that's -- remember on preliminary injunctive -- it's not final. It's do they have a strong likelihood of success on the merits. I say in review of this information, you've got the Mayor saying it's ministerial. Your documents say it's ministerial. They applied for a permit in their own name. It was clearly known.

MR. AGUIRRE: But your Honor, that's --

THE COURT: The building inspector signed off. In fact, the irony of ironies, Mr. Aguirre, of all individuals, signed off on the certificate of occupancy.

MR. AGUIRRE: Different issue, your Honor. That has to do with inspection. That does not have to do with the initial review. When it was discovered -- and again, I emphasize, when it was discovered that military training was to take place, which is not contemplated --

THE COURT: It's zoned vocational training.

MR. AGUIRRE: But that's not vocational training. Military training, your Honor, is not vocational training. That is a question of fact that you have to at least allow the City legislative branch, the overarching authority for the City to make a judgment on.

Your Honor, someone -- it's very easily -- I can easily construe the facts, and then judgement has to be made about this. They artfully come in and they use somebody else's name. Now, that other individual, that company departs. They're no longer even involved. They don't come and correct the information.

THE COURT: Wait a minute. That's your audit. Your audit finding is totally against you. The complete admission that --

MR. AGUIRRE: Your Honor, that is --

THE COURT: It's a complete admission by the City that there was no misrepresentation of -- your requirements don't even have --

MR. AGUIRRE: Your Honor, no, that's not true.

THE COURT: You're interrupting. Wait a minute. Then I'll let you do it so that we're having a wonderful back and forth --

MR. AGUIRRE: Good.

THE COURT: -- debate and discussion as we should. But your audit report took a look, and the initial main argument was we didn't know what was going on, and they found, yes, you did know what was going on.

MR. AGUIRRE: No, I don't believe you can read it that way.

THE COURT: That's just a disagreement in -- I review the totality of information and conclude that on balance, there is no requirement that you apply in your own name. They did have the permit. It is on file.

So I just think that that -- on the issue of do they have a strong likelihood, yes, on that issue they have a strong likelihood of success on the merits.

MR. AGUIRRE: But your Honor, we haven't -- wait a minute. The City Council has a right -- the City Council is the one for the City that makes the findings that sets up the issue of review in land use matters. That all has to be brought to the attention of the City Council.

The fact that an auditor did something or somebody else did something, that is not -- under our land use authority and our land code, they're not the ones who make the findings. It's the City Council that makes the findings. All that will be brought to the City Council.

The Council will have a full and fair opportunity to present their case. The City will then make a judgment by the legislative branch, the authority that's granted that authority under our Code. Then they can either -- your Honor, you cited the Inland case and the Thompson case. If we're wrong, they walk across the street to Superior Court and get a writ of mandate.

THE COURT: They don't have to. They may.

MR. AGUIRRE: Well, they don't have to. They don't have to.

THE COURT: They may.

MR. AGUIRRE: But that is certainly an option to them, my point being --

THE COURT: Sure.

MR. AGUIRRE: But that's after the fact. You don't jump in ahead of the time. The City did not know -- your Honor, you have to think about the other theory. The City just sat back, knew it was Blackwater, that Blackwater was going to put military training in there, and they just sat back and then one day they said, you know, we've changed our minds and now we're going to do something different.

And all that information about them concealing or not disclosing who they were -- why didn't they -- when Southwestern dropped out, why didn't they come in and correct the application at that point?

THE COURT: I think your audit really -- there again, your audit does not help you out at all.

MR. AGUIRRE: Your Honor, it says it's inconclusive as to two of the permits. That's what it says. Your Honor, the proper procedure under Harrington, the proper procedure under Williamson, the proper reasoning -- the prudential reasoning of case and controversy under Article 3 absolute mandates that you allow the City to complete the process.

They can always come back with their 1983 as they did in the Parks case. But the Parks case -- think about the Parks case. The Court didn't jump into the Parks case right at the first instance in which they tried to get the geothermal power. It allowed the whole process to work its way through. You still retain authority, but the reason that they -- the argument for the ripeness in this case, your Honor, is that the facts are not fully developed. It's a contingency.

Maybe it'll get approved. Maybe it won't get approved. But it might get approved. And the point is is that there is no harm done to them. They have not released their lease. There's no declaration from the United States Navy. There's no declaration that says that they can't do it somewhere else. They've done it somewhere else for five years.

So even on the irreparable injury, there's not -- that's why I say, your Honor -- your Honor focused on something -- I could tell that your Honor was troubled by the irreparable injury. And what I'm saying is, if you look at the irreparable injury, really what's at the core of that, the center of that is the fact that it's too early because we haven't made a judgment call yet.

And the reason I argued to your Honor, everybody will come over here and do the same thing because this happens all the time.

THE COURT: Well, that's why I say we're not going to just come in and do permit reviews.

MR. AGUIRRE: But what I'm saying is, it happens all the time. People get something that will go through the process, and it will get up to the point of occupancy. And then there will be a discovery that there's a missing piece, that somebody missed something, that they didn't do something.

Now, this process -- your Honor, what I would suggest is this. I'm not suggesting that they dismiss their case. I'm not suggesting that you dismiss the case. What I'm suggesting is this. Stay the case, let them -- they can continue to operate. Let them continue to operate there, and allow us to go through the process of review as we would any other applicant.

THE COURT: That's the same as what we're doing here.

MR. AGUIRRE: No. Because what I'm saying is, let the City complete the process that it is entitled to under our separation of powers and with the City being the initial decider of how to properly execute and assert its police power. Let its processes go forward. Let there be a full and complete hearing. Let there be a development of the underlying facts. Let there be a final determination by the City. Your Honor retains jurisdiction. Let them operate during that period of time.

THE COURT: You know, preliminary -- injunctive relief is equitable in nature and is subject to modification at any time.

MR. AGUIRRE: Well, that's why I'm --

THE COURT: So that's why your argument is saying stop. We can actually go forward, and if things change, come back in and say things change. I just don't see that there's going to be great harm to the City of San Diego in letting 24 sailors get training on --

MR. AGUIRRE: What if there's an incident down there?

THE COURT: Then you've got a great claim against the United States Government.

MR. AGUIRRE: Well, we don't want an incident down there. Your Honor, you're putting military training in an unsecured area. That doesn't happen in our society.

THE COURT: In an inside area with trainers that --

MR. AGUIRRE: It's 100 yards away from the international border with no security whatsoever and with a gigantic bull's eye on this controversial company that is -- right now is obviously generating an enormous amount of interest in this case.

Your Honor, if there is an incident where someone is injured -- one of the things they do is they spray people with mace.

THE COURT: I've been sprayed. I've been sprayed in training.

MR. AGUIRRE: Well, your Honor --

MR. NEIL: Not by us.

MR. AGUIRRE: Your Honor, hopefully not --

THE COURT: I was sprayed. In fact, I think we had to go -- this is -- we went to the City, of all places, or the sheriff's facility and got security training if you needed to -- if you wanted to carry mace. And so we all got sprayed.

MR. AGUIRRE: How was it?

THE COURT: And it was fine.

MR. AGUIRRE: You got sprayed with mace and it was fine?

THE COURT: Well, I mean, they tell you this is what's going to happen. It's a little -- it stings, but that -- if you're saying -- there used to be that O.C. pepper spray was very common for people to carry and that if you wanted to go, you got a permit and you could go get training on O.C. pepper spray, and you had a recognized course. I don't think that went through land use planning.

MR. AGUIRRE: No, but your Honor --

THE COURT: And it was on City facilities at the sheriff's, and we went and I got my --

MR. AGUIRRE: Your Honor, I will guarantee you --

THE COURT: -- little certificate.

MR. AGUIRRE: But your Honor, I guarantee you -- I guarantee you, though, that there will be enhanced cost to the City for putting this facility into this location. There will be increases in the security costs to the City because of additional patrols that will have to take place in that area. There will be a lowering of land values for the people that are already in there, and the City may very well face possible claims by them for allowing this to go forward. Your Honor --

THE COURT: But it's zoned vocational.

MR. AGUIRRE: No, but it's not -- but this isn't vocation, your Honor. This is a threshold decision.

THE COURT: It's a training.

MR. AGUIRRE: No. It's military training in an unsecured area. That is -- if you were owner of a piece of property -- just think about it. If you were next door and you were having a normal commercial piece of property and you were operating a commercial business where you have entities coming and delivering and taking off, leaving and -- egressing and ingressing and you found out that your next-door neighbor is Blackwater doing military training right next door 100 yards away from the international border, I would and I think any prudent business person would be deeply concerned.

THE COURT: Have you been to National City? Have you seen the 39th Street pier?

MR. AGUIRRE: Yes. But your Honor, that's a military --

THE COURT: They co-exist. Have you been to Miramar?

MR. AGUIRRE: But that's military. They're under military security. Those are secure areas. This is not. Your Honor, the City of San Diego --

THE COURT: Are you telling me that the military has no private contractors that do private training anywhere within the City of San Diego? I don't believe -- I don't think so.

MR. AGUIRRE: Your Honor, I don't know -- I don't know -- well, I don't know one way or the other, but I would know this, that if they do, that we'd want to review that for the safety of everybody else involved. You're moving military training that takes place on bases, which are in secure areas with the Navy SEALS that your Honor talked about in Coronado -- the City of San Diego has co-existed with the Navy for as far back as memory can take us. There's no question about that. And there are people in our office and in the City Attorney's Office and located throughout the City who are proud members of the military who have served in Iraq.

The City of San Diego is not opposed to the military, and I haven't seen any declaration from the military supporting what is going on here. So to assume that the military one way or the other is taking a position, I think what the military wants are their people trained. And I think that whether you fly them back to North Carolina where they have a facility --

THE COURT: So you'd prefer that they fly them back to North Carolina from San Diego?

MR. AGUIRRE: What I'm saying is, there's no irreparable injury if that's all they have to do. That's not irreparable injury. There is no irreparable injury.

THE COURT: And so it's fine for North Carolina. It's not fine by the City of San Diego?

MR. AGUIRRE: North Carolina -- whatever -- I don't know the facts and circumstances in North Carolina, but I do know these facts. Otay Mesa planning -- your Honor, the Otay Mesa Planning District did not envision military training taking place within that district. This is a substantial variance from that.

THE COURT: And let me look back at your letter --

MR. AGUIRRE: Okay.

THE COURT: -- of May 19th. Where does it say that?

MR. AGUIRRE: The letter goes -- the letter incorporates the attorney -- the City Attorney's opinion, and the City Attorney's opinion lays out exactly what I'm talking about in terms of the additional review. That's the

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