In a case reminiscent of the battle over the Boy Scouts using public land while engaging in bias based upon religious and sexual orientation, the City Council found that a local country club, which the city subsidizes, was in default on its lease unless it stopped engaging in gender bias.

Before the California Supreme Court is the case involving a Rancho Bernardo country club that won’t extend spousal membership to a lesbian couple. The court will determine whether the state’s civil rights act prohibits bias based upon marital status.

But it’s been the law for decades that state and city law prohibit bias based upon gender, especially in businesses that lease public property.

So this is what made the latest case involving gender bias so bizarre.

According to the San Diego Daily Transcript, San Diego City Manager Lamont Ewell began investigating allegations that Fairbanks Ranch Country Club was discriminating against its women members and employees by maintaining a men-only lounge.

The private country club and a 27-hole golf course were developed on city land that is under a 61-year lease started in December 1982.

In another one of the city’s smart fiscal moves, the club paid a total of $3,000 to lease the land for 25 years. It also agreed to pay 3 percent of all memberships sold in excess of $25 million, plus 10 percent of gross receipts beginning in 2010. The city says the club reached the $25 million threshold last fall and was billed $60,000. But it won’t pay.

The “Gentlemen’s Locker Room Lounge” was created as part of a $3 million renovation to the club in March 2004. Despite the name, the room was not a locker room lounge, but a full restaurant and bar, according to a lawsuit filed by member Maureen Pechacek-Howe, a certified public accountant and tax partner with PriceWaterhouseCoopers. So it’s not as if the male members were strolling around the lounge with their male members exposed.

Pechacek-Howe accused the club of violating the state’s Unruh Civil Rights Act, which prohibits businesses from discriminatory practices.

When the lawsuit was filed last year, John Shiner, the club’s attorney and a partner in the Los Angeles office of Morrison & Foerster, said the club lounge policy was not discriminatory. Shiner said the lounge was part of the men’s locker room, and that the women’s locker room has its own lounge area where female employees provide food and beverage service. There is also a mixed company grill area open to male and female members.

Pechacek-Howe said even if the separate lounges were comparable in luxury and services, it would still be wrong to maintain areas inaccessible to one gender or another.

The club’s board of directors expelled Pechacek-Howe and her husband, Maynard Howe, from its membership in a Dec. 21 letter signed by board President Louis Ferrero, who said the lawsuit was not a factor in the decision. Pechacek-Howe joined the club in 1997 and her husband, who is chief executive officer of Reliant Technologies, obtained a spousal membership.

But what could be a factor is a 2001 report on the lease by PriceWaterhouseCoopers, which was acting as a consultant for the city. The report concluded that the lease was a bad deal negotiated well below market value and had already cost the city approximately $5 million over the previous 17 years. The firm estimated the city would lose a total of at least $23.5 million on the lease if it was not renegotiated. The report compared the Fairbanks lease with the Newport Beach Country Club, which pays its landlord nearly $2 million a year.

“The existing lease has allowed the club to enjoy a 17-year free ride [no rent] that will continue for another decade,” the firm’s report concluded.

The case became a no-brainer for City Attorney Mike Aguirre. By entering into a lease with the city of San Diego, the club agreed not to engage in gender or sexual-orientation bias. That makes this case comparable to the lease agreement with the Boy Scouts. But then-City Attorney Casey Gwinn opined that BSA was somehow exempt.