Leaked memo: California could face major lawsuits if Schwarzenegger closes state parks

California taxpayers could be on the hook for millions of dollars in damages if the Schwarzenegger administration moves ahead with plans to close as many as 100 state parks, according to an internal memo drafted by the state parks department's attorneys.

"It is likely that state parks would be liable for breach of contract" with the 188 agreements the state has signed with private companies that provide concession services, from restaurants to boat rentals to gift shops in parks, the memo concluded.

Those concessions generated $89 million in gross sales last year.

Further, if people enter closed parks and are injured or start fires, the state "can be held responsible for dangerous conditions," the attorneys added, even if the parkgoers were trespassing.

The memo, which was written earlier this month for state parks director Ruth Coleman and distributed to high-level parks managers, was leaked and obtained by a Sacramento-based environmental group, Public Employees for Environmental Responsibility, which has posted it on its Web site.

The document is almost certain to increase the growing public and political pressure on Gov. Arnold Schwarzenegger to soften or abandon his plan to close as many as 100 state parks as a budget-saving measure. The parks closure list was expected out this week, but it has been delayed.

"Often we think we are saving money when in fact we are creating new costs and unintended consequences. I take this very seriously," said Assemblyman Jared Huffman, D-San Rafael, chairman of the Assembly Water, Parks and Wildlife Committee.

Huffman plans to raise the state's potential legal exposure Tuesday at a legislative hearing he will oversee on parks closure.

Roy Stearns, a spokesman for the state parks department, declined to comment Thursday on the specifics in the 11-page leaked legal document.

"We feel it is attorney-client privilege," Stearns said.

There are multiple reasons the closure list has been delayed, he said. State parks leaders are trying to close as few parks as possible, and they are studying visitor numbers, revenue and complex staffing issues, including complying with union seniority guidelines. Stearns acknowledged the legal questions also have taken time.

"It is absolutely common and responsible for us to examine our legal liability for closing parks. We have to do that. It's part of the due process," Stearns said.

Schwarzenegger would become the first governor to close a park for budget reasons in the 108-year history of California's storied state parks system — which includes ancient redwoods, the shores of Lake Tahoe, glimmering beaches and historic sites like Sutter's Fort.

"We've never done this before," Stearns said. "I would hope we could have (the list) out by the end of the month."

Faced with a $24 billion deficit amid plummeting tax revenues, the Legislature cut $8 million from the state parks budget. Last month, Schwarzenegger cut an additional $6.2 million through a line-item veto, for a total of $14.2 million.

Parks director Coleman raised entrance fees and searched for partnerships with counties and cities, without much luck. She announced there was no other way to make ends meet but to close as many as 100 parks, and the governor's office agreed.

The legal headaches spelled out in the memo portray a Gordian knot of potential lawsuits.

"This shows there are no savings. It could cost taxpayers more money, so it raises the question of why are they doing this?" said Karen Schambach, California director of Public Employees for Environmental Responsibility.

Schambach said her group obtained the leaked memo from a former state parks employee. When Schambach posted it to the Web, Tara Lynch, chief legal counsel for state parks, called her and asked her to remove it, she said. She declined, citing the public interest.

If concessionaires sue over the park closures, the state could potentially have to repay them for lost profits. According to state parks budget documents, gross sales totaled $88.9 million last year. Although exact figures were unavailable Thursday, if they earned moderate profits those totals could outstrip the $14 million the state was trying to save.

"It is likely that state parks would be in breach of contract and (the) concessionaire would be entitled to the profits he or she would have received had the contract been performed for the remaining term of the contract," the memo said.

Jack Harrison, executive director of the California Parks Hospitality Association, which represents companies with concession contracts in parks, said many are anxious.

"We've been following this very closely," he said. "We do have some members who are very concerned."

Most of the companies are small businesses renting horses or tent cabins or running snack stands and gift shops, he said. Together they paid $11.9 million last year in royalties to the state.

Although none have threatened lawsuits, Harrison said, they are already raising the issue of asking the state to renegotiate their contracts.

Other legal problems spelled out in the memo include the Endangered Species Act. The state might face fines by the federal government if poachers kill endangered salmon, condors or other animals on unpatrolled state park property, for example.

Further, the state also could be sued under the Americans with Disabilities Act. State parks settled a 1999 lawsuit by the California Council for the Blind and Californians for Disability Rights in which the agency agreed to make its entrances, paths, signs, restrooms and other facilities accessible to the disabled between June 2009 and 2016. If state parks missed the court-ordered deadlines, the plaintiffs would likely sue, and "it is unlikely state parks could use lack of funding as a defense to making parks accessible," the memo said.

The state may also be in violation of the California Coastal Act if it blocks public access to beaches. It even might be required by a court to write an time-consuming, costly environmental impact statement to close parks, the memo adds.