Can settlements be negotiated in closed session if no pending litigation exists?

Answer

The provision of the Brown Act that permits closed sessions relating to litigation is not strictly limited to “pending litigation.”  The provision to which you refer is an example.  Government Code section 54956.9 states, in part, as follows:

“Nothing in this chapter shall be construed to prevent a legislative body of a local agency, based on advice of its legal counsel, from holding a closed session to confer with, or receive advice from, its legal counsel regarding pending litigation when discussion in open session concerning those matters would prejudice the position of the local agency in the litigation.
…
For purposes of this section, litigation shall be considered pending when any of the following circumstances exist:
(a) Litigation, to which the local agency is a party, has been initiated formally.
(b) (1) A point has been reached where, in the opinion of the legislative body of the local agency on the advice of its legal counsel, based on existing facts and circumstances, there is a significant exposure to litigation against the local agency.
(2) Based on existing facts and circumstances, the legislative body of the local agency is meeting only to decide whether a closed session is authorized pursuant to paragraph (1) of this subdivision. (3) For purposes of paragraphs (1) and (2), “existing facts and circumstances” shall consist only of one of the following:
(A) Facts and circumstances that might result in litigation against the local agency but which the local agency believes are not yet known to a potential plaintiff or plaintiffs, which facts and circumstances need not be disclosed.”

In the situation described in subdivision 54956.9(b)(3)(A), there is obviously no existing or pending lawsuit.  Indeed, the facts that might give rise to the lawsuit are not even known to the potential plaintiff.

The question in the situation you describe is, who is the potential plaintiff?  If it’s the other local water district, then your water district may not have properly invoked the Brown Act to meet in closed session.  It would be difficult—but not impossible—to be involved in negotiations with another agency regarding a water rights transfer without the other agency having any knowledge of such facts.  If, however, the potential plaintiff was a third party, it might be more likely.

In any event, if the action taken by the water district has resolved or settled the threatened litigation, they must report that out in public session.  See Government Code section 54957.1(a)(3).  Hopefully, by this time, you’ve discovered what the threatened litigation was.  That should allow you to determine whether there was a legitimate basis for holding the closed sessions.

If there was a violation, your remedies are: (1) to demand that the water district cure and correct the violation, and if they do not then sue to have the action taken by the water district through the closed session process set aside; or (2) simply sue to have a court declare that the water district violated the Brown Act and enjoin it from doing so in the future.  See Government Code sections 54960, 54960.1.

If you take the former course, there are some very short deadlines and technical requirements you must meet.
(a)     Notice and a demand to “cure and correct” the violation must be given, in writing, within 90 days from the date the action was taken.  (30 days if the basis for the notice is that the action was not on an agenda or not adequately described).
(b)    The local agency has 30 days to take action.
(c)     If the local agency responds and refuses to correct the problem or does nothing, the challenger has 15 days to initiate court proceedings to nullify the action.