PASADENA, CA – Lagerlof, LLP Litigation Partner Gene Wu secured a significant victory before California’s Second Appellate District Court of Appeal, the largest appellate district in the state by caseload, confirming the right of public entities to lease government-owned real property at market rates. 

In 2010, California voters approved Proposition 26, which substantially limited the ability of local governments to impose or increase most fees and charges without voter approval. While the measure included several exemptions, certain exemptions are expressly limited to recovering a government entity’s reasonable costs of providing a service or activity. 

In 2022, a restaurant operator in Ventura Harbor filed suit against the Ventura Port District, alleging that the percentage rent provision in its sublease constituted an unlawful tax under Proposition 26 because the rental rate exceeded the District’s reasonable costs associated with leasing the property. 

Lagerlof, LLP successfully defended the Ventura Port District, securing a victory at the trial court level in 2025, and the restaurant operator appealed the ruling. 

In June 2026, the Court of Appeal affirmed the trial court’s decision, holding that based on the express language of Proposition 26, charges imposed to rent or lease local government-owned property were not limited by the government’s reasonable costs of doing so.  The Court’s reasoning would also apply to other exemptions listed in Proposition 26, including access to government facilities and property development fees, and therefore could have wide-ranging implications for numerous local government entities. 

“This ruling provides critical clarity on the scope of Proposition 26,” stated Thomas Bunn, Partner at Lagerlof, LLP, and Lead Counsel to Ventura Port District. “Gene’s leadership throughout this matter was exemplary. He combines deep legal knowledge with a disciplined, strategic approach that enables him to successfully navigate highly complex litigation and appellate issues. His dedication to his clients and ability to deliver meaningful, lasting results are hallmarks of the exceptional work he brings to every case.”  

Gene Wu focuses his practice on complex business litigation and has represented clients in class actions, bankruptcy adversary proceedings, arbitrations, mediations, and appeals. A licensed patent attorney, Gene has experience in federal preemption and jurisdiction, lender liability, commercial loan agreements, the Americans with Disabilities Act (ADA), California’s Fair Employment and Housing Act (FEHA), intellectual property matters involving patents, trademarks, trade dress, and copyrights, as well as development agreements, real estate leases, partnership disputes, and insurance coverage matters. 

His notable cases include Haggarty v. Wells Fargo Bank, Campidoglio, LLC v. Wells Fargo & Company, DeLeon v. Wells Fargo Bank, N.A., Nguyen v. Wells Fargo Bank, N.A., and Pakravan v. Halajian. 

“This decision is an important victory not only for the Ventura Port District, but for public agencies throughout California that rely on the ability to responsibly manage public assets for the benefit of their communities,” Brian Pendleton, the General Manager of Ventura Port District, shared. “Gene Wu and the team at Lagerlof, LLP provided exceptional legal counsel every step of the way, combining strategic insight with a deep understanding of the complex issues at stake. Their dedication and advocacy helped secure a ruling that will provide valuable clarity for public entities across the state.” 

Lagerlof, LLP remains committed to delivering strategic, results-driven counsel to public agencies and private clients alike, combining deep litigation experience with a comprehensive understanding of the complex legal and regulatory frameworks that shape California communities. 

The decision is Ventura Harbor Restaurant Associates v. Ventura Port District, 2026 WL 1723839 (June 15, 2026), Appellate Case No. B344145.