Scottsdale council unanimously authorizes city attorney to pursue counterclaims in lawsuit, contingent on deadlines

Scottsdale, Ariz. — On Nov. 3 the Scottsdale City Council voted unanimously to authorize the interim city attorney to file counterclaims, cross-claims and third-party claims in the litigation listed on the special-meeting agenda — "Taxpayers Against Awful Apartment Zoning Exemptions et al. v. State of Arizona, City of Scottsdale, et al." — unless stipulated deadlines are extended by the court.

The authorization, moved by Vice Mayor Adam Kwasman and seconded (second not named on the public record), directs city counsel to proceed with “prescribed claims” and requires the item to be agendized for the Nov. 17 regular meeting. Kwasman amended his original language to substitute the word “extended” for “excluded” to clarify the council’s intent.

Why it matters: the item on the special-meeting agenda referenced state legislation and local land-use documents that are central to the case, including references in the public record to Senate Bill 1543, House Bill 2721 and Development Agreement 2020-138-COS, and to the Scottsdale zoning ordinance. Council authorization gives the interim city attorney broad discretion to pursue appropriate legal avenues on behalf of the city unless a court-imposed extension prevents filing, in which case the council would need to reconvene for further direction.

Interim City Attorney Louis Santayo told councilmembers the authorization would permit “any appropriate or pertinent claims against any party to the litigation,” including counterclaims (against the plaintiff), cross-claims (against co-defendants) and third-party claims (bringing another party into the case). Santayo said tactical decisions about which specific claims to bring ordinarily rest with counsel while the client — the city — sets strategy.

Two members of the public addressed the council on the item. Steve Sutton told the council he was concerned about the appearance of a conflict of interest related to Councilwoman Kathy Littlefield and said the perception alone could harm public confidence: “I’m concerned that votes are being taken in regard to tays by councilwoman Littlefield, whose husband is obviously the head of Tays,” Sutton said. The council did not take evidence on that assertion during the meeting; it was presented as a public comment.

Resident Michael Schafer said he hoped the council would vote and told members, “27,000 of us citizens, taxpayers signed the letter to the city,” a claim he offered in support of residents’ objections to the zoning changes at issue. Schafer also described provisions of the state legislation referenced by speakers as having removed or limited citizen referendum rights; he framed that as his legal opinion rather than a court finding.

Councilmember Barry Graham asked whether the authorization limited the types or number of claims the city attorney could bring. Santayo responded that the motion, as amended, placed no such limitations if the court did not extend the filing deadline; if the court does extend the deadline, the city would need a further vote. Graham said he would support the motion despite “a slight reservation” about that timing constraint.

Mayor Lisa Borowski called the roll for a vote; the motion passed unanimously. Borowski then closed the special meeting and moved to open the scheduled 5 p.m. regular meeting.

Next steps: the council directed staff to agendize the matter for the Nov. 17 regular meeting per the motion; if a court extends any stipulated deadlines that prevent filing before the Nov. 17 agenda, the council will need to revisit the matter at a subsequent meeting.

Details and limitations: statements by public speakers about petition counts, constitutional effects of the state law, and alleged relationships were delivered as public comment and were not investigated or verified during the hearing. The city attorney characterized the authorization as broad but subject to court timelines and legal strategy decisions by counsel.