Board Members Allege City Council Violated Nonprofit Laws
Two members of the Downtown Santa Monica, Inc. (DTSM) board have taken legal action against the City of Santa Monica and its City Council, alleging the city unlawfully ousted six board members in violation of state nonprofit law and the organization’s own bylaws.
The lawsuit, filed Friday, Sept. 5, in Los Angeles Superior Court by board members Leonid Pustilnikov and Jon Farzam, challenges the City Council’s July 29 decision to remove six DTSM directors and appoint interim replacements.
According to the filing, the council’s actions allegedly disregarded bylaw amendments approved by the DTSM board earlier that same day, which stipulated that City-appointed directors could only be removed “for cause.”
“The City Council’s abrupt decision was unnecessary and has created instability and disruption at DTSM. At a time when many downtown businesses are struggling to survive, downtown relies on steady leadership to keep the community safe, clean, and vibrant. Sudden political maneuvers only undermine the organization’s ability to support businesses, residents, and visitors when they need it most,” said petitioner Jon Farzam.
Petitioner Leonid Pustilnikov added: “The City’s declaration of a fiscal emergency only underscores the reality behind these removals. DTSM directors were raising concerns about the City meeting its baseline service responsibilities—obligations the City now admits it cannot afford. Instead of addressing the problem transparently, the City chose to remove directors and destabilize DTSM at a critical moment.”
On Sept. 9, the council is expected to vote on whether to declare a fiscal emergency, citing significant budget shortfalls, drained reserves, and mounting liabilities totaling millions of dollars. If approved, the measure would grant the city manager expanded authority to “take all necessary steps” to “address the crisis.”
The lawsuit requests that the court rescind the City Council’s alleged improper removals, reinstate the previously appointed DTSM directors, and affirm that the City lacks authority to remove DTSM directors without cause.
