Superior Court, State of California
DATE: DECEMBER 9, 2021 TIME: 1:30 P.M.
PREVAILING PARTY SHALL PREPARE THE ORDER
UNLESS OTHERWISE STATED (SEE RULE OF COURT 3.1312)
|LINE # |CASE # |CASE TITLE |RULING |
|LINE 1 |18CV333915 |Schoelkoph v. North American On-Site, LLC |See tentative ruling. The Court will issue the |
| | | |final order. |
|LINE 2 |20CV364054 |Kessner, et al. v. City of Santa Clara, et |See tentative ruling. The Court will issue the |
| | |al. [VARIOUS MOTIONS] |final order. |
|LINE 3 |20CV364054 |Kessner, et al. v. City of Santa Clara, et |See tentative ruling. The Court will issue the |
| | |al. [MOTION TO TAX LA HABRA’S COSTS] |final order. |
|LINE 4 |16CV301867 |Sinco Technologies PTE LTD v. Soon, et al. |OFF CALENDAR AS MOOT, as Cross-Complainants have |
| | | |dismissed the causes of action at issue in SinCo’s |
| | | |summary adjudication motion. There is no |
| | | |indication that any exception to Code of Civil |
| | | |Procedure section 581, subdivision (b)(1) applies |
| | | |to bar Cross-Complainants’s voluntary dismissal of |
| | | |these claims. |
|LINE 5 |17CV314186 |Richert v. Samaritan, LLC, et al. |See tentative ruling. The Court will issue the |
| | | |final order. |
|LINE 6 |17CV310507 |Hamid Khazaeli vs David Brewer et al |OFF CALENDAR AS MOOT, as Defendants seem to be |
| | | |placing all necessary reporter transcripts into the|
| | | |appellate record. There is no need, therefore, for|
| | | |a settled statement to be prepared. |
|LINE 7 |17CV306546 |Rogers v. iTy Labs Corp., et al |See tentative ruling. The Court will issue the |
| | | |final order. |
|LINE 8 | | | |
|LINE 9 | | | |
|LINE 10 | | | |
|LINE 11 | | | |
|LINE 12 | | | |
|LINE 13 | | | |
Calendar Line 1
Case Name: Justin Schoelkoph v. North American On-Site, LLC, et al.
Case No.: 18CV333915
This is a putative class and Private Attorneys General Act (PAGA) action on behalf of employees of defendant North American On-Site LLC, alleging a number of wage and hour violations. The parties reached a settlement, which the Court preliminarily approved in an order filed on July 8, 2021. The factual and procedural background of the action and the Court’s analysis of the settlement and settlement class are set forth in that order.
Before the Court are Plaintiff’s motions for final approval of the settlement and for approval of his attorney fees, costs, and service award. The motions are unopposed. As discussed below, the Court GRANTS final approval.
I. LEGAL STANDARDS FOR SETTLEMENT APPROVAL
A. Class Action
Generally, “questions whether a [class action] settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court’s broad discretion.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234–235 (Wershba), disapproved of on other grounds by Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260.)
In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as the strength of plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement.
(Wershba, supra, 91 Cal.App.4th at pp. 244–245, internal citations and quotations omitted.)
In general, the most important factor is the strength of the plaintiffs’ case on the merits, balanced against the amount offered in settlement. (See Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130 (Kullar).) But the trial court is free to engage in a balancing and weighing of factors depending on the circumstances of each case. (Wershba, supra, 91 Cal.App.4th at p. 245.) The trial court must examine the “proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” (Ibid., citation and internal quotation marks omitted.)
The burden is on the proponent of the settlement to show that it is fair and reasonable. However “a presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.”
(Wershba, supra, 91 Cal.App.4th at p. 245, citation omitted.) The presumption does not permit the Court to “give rubber-stamp approval” to a settlement; in all cases, it must “independently and objectively analyze the evidence and circumstances before it in order to determine whether the settlement is in the best interests of those whose claims will be extinguished,” based on a sufficiently developed factual record. (Kullar, supra, 168 Cal.App.4th at p. 130.)
B. PAGA
Labor Code section 2699, subdivision (l)(2) provides that “[t]he superior court shall review and approve any settlement of any civil action filed pursuant to” PAGA. The court’s review “ensur[es] that any negotiated resolution is fair to those affected.” (Williams v. Superior Court (2017) 3 Cal.5th 531, 549.) Seventy-five percent of any penalties recovered under PAGA go to the Labor and Workforce Development Agency (LWDA), leaving the remaining twenty-five percent for the aggrieved employees. (Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 380.)
“Given PAGA’s purpose to protect the public interest, we also agree with the LWDA and federal district courts that have found it appropriate to review a PAGA settlement to ascertain whether a settlement is fair in view of PAGA’s purposes and policies.” (Moniz v. Adecco United States (Nov. 30, 2021, Nos. A159410, A160133, A159978) ___Cal.App.5th___ [2021 Cal. App. LEXIS 1005, at *26] (Moniz).) Thus, “when a PAGA claim is settled, the relief provided for under the PAGA [should] be genuine and meaningful, consistent with the underlying purpose of the statute to benefit the public ….” (Haralson v. U.S. Aviation Servs. Corp. (N.D. Cal. 2019) 383 F. Supp. 3d 959, 971, quoting LWDA guidance discussed in O’Connor v. Uber Technologies, Inc. (N.D. Cal. 2016) 201 F.Supp.3d 1110 (O’Connor).) The settlement must be reasonable in light of the potential verdict value. (See O’Connor, supra, 201 F.Supp.3d at p. 1135 [rejecting settlement of less than one percent of the potential verdict].) But a permissible settlement may be substantially discounted, given that courts often exercise their discretion to award PAGA penalties below the statutory maximum even where a claim succeeds at trial. (See Viceral v. Mistras Group, Inc. (N.D. Cal., Oct. 11, 2016, No. 15-CV-02198-EMC) 2016 WL 5907869, at *8–9.)
II. TERMS AND ADMINISTRATION OF SETTLEMENT
The non-reversionary gross settlement amount is $60,000. Attorney fees of up to $19,998 (about one-third of the gross settlement), litigation costs not to exceed $5,000, and administration costs estimated at $5,000 will be paid from the gross settlement. $5,000 will be allocated to PAGA penalties, 75 percent of which will be paid to the LWDA. The named plaintiff will also seek an enhancement award of $2,500.
The net settlement will be distributed to class members pro rata based on their weeks worked during the PAGA period (as to the PAGA portion of the settlement) and during the full class period (as to the remainder of the settlement). Class members will not be required to submit a claim to receive their payments. Settlement payments will be allocated 25 percent to wages, 15 percent to interest, and 60 percent to non-wage damages, expenses, and penalties for tax purposes. Defendant will pay its share of payroll taxes in addition to the gross settlement. Funds associated with checks uncashed after 180 days will be sent to the Controller of the State of California, to be held for the benefit of the appropriate class member pursuant to the Unclaimed Property Law.
Class members who do not opt out of the settlement will release all claims, rights, etc. “arising from any and all claims that were asserted or could have been asserted based upon the facts alleged in the Lawsuit,” including specified wage and hour claims.
Consistent with the statute, aggrieved employees will not be able to opt out of the PAGA portion of the settlement. The settlement defines “Released PAGA Claims” as “any and all individual and representative claims that could have been assessed upon and collected from the Released Parties under PAGA, including any and all claims for unpaid wages of whatever kind or nature recoverable under PAGA, whether known or unknown, arising during the PAGA Time Frame based on the facts alleged in the Complaint,” including specified wage and hour claims.
The notice process has now been completed. There were no objections to the settlement or requests for exclusion from the class. Of 100 notice packets, 14 were re-mailed to updated addresses and 2 were ultimately undeliverable. The administrator estimates that the average payment to class members will be $237.52, with a maximum payment of $2,125.67 and a minimum payment of $92.42.
At preliminary approval, the Court found that the proposed settlement provides a fair and reasonable compromise to Plaintiff’s claims, and that the PAGA settlement is genuine, meaningful, and fair to those affected. It finds no reason to deviate from these findings now, especially considering that there are no objections. The Court thus finds that the settlement is fair and reasonable for purposes of final approval.
III. ATTORNEY FEES, COSTS, AND INCENTIVE AWARD
Plaintiff seeks a fee award of $19,998, or one-third of the gross settlement, which is not an uncommon contingency fee allocation in a wage and hour class action. This award is facially reasonable under the “common fund” doctrine, which allows a party recovering a fund for the benefit of others to recover attorney fees from the fund itself. Plaintiff also provides a lodestar figure of $73,965, based on 112.2 hours spent on the case by counsel billing at $650 and $800 per hour. Plaintiff’s request results in a negative multiplier. The lodestar cross-check supports the percentage fee requested, particularly given the lack of objections to the attorney fee request. (See Laffitte v. Robert Half Intern. Inc. (2016) 1 Cal.5th 480, 488, 503–504 [trial court did not abuse its discretion in approving fee award of 1/3 of the common fund, cross-checked against a lodestar resulting in a multiplier of 2.03 to 2.13].)
Plaintiff’s counsel also requests $5,000 in costs, below their actual litigation expenses. Plaintiff’s costs appear reasonable and are approved. The $5,000 in administrative costs are also approved.
Finally, Plaintiff requests a service award of $2,500. To support his request, he submits a detailed declaration describing his efforts on the case. The Court finds that the class representative is entitled to an enhancement award and the amount requested is reasonable.
IV. ORDER AND JUDGMENT
In accordance with the above, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT:
The motion for final approval is GRANTED. The following class is certified for settlement purposes:
all those individuals who were employed by Defendant as non-exempt employees and performed work in California for Defendant at any time from September 4, 2014 through the date of preliminary approval.
No one is excluded from the class.
Judgment shall be entered through the filing of this order and judgment. (Code Civ. Proc., § 668.5.) Plaintiff and the members of the class shall take from their complaint only the relief set forth in the settlement agreement and this order and judgment. Pursuant to Rule 3.769(h) of the California Rules of Court, the Court retains jurisdiction over the parties to enforce the terms of the settlement agreement and the final order and judgment.
The Court sets a compliance hearing for July 7, 2022 at 2:30 P.M. in Department 1. At least ten court days before the hearing, class counsel and the settlement administrator shall submit a summary accounting of the net settlement fund identifying distributions made as ordered herein; the number and value of any uncashed checks; amounts remitted to the Controller; the status of any unresolved issues; and any other matters appropriate to bring to the Court’s attention. Counsel shall also submit an amended judgment as described in Code of Civil Procedure section 384, subdivision (b). Counsel may appear at the compliance hearing remotely.
The Court will prepare the order and judgment.
***
LAW AND MOTION HEARING PROCEDURES
The Court rescinded, effective June 21, 2021, all prior general orders restricting courthouse access. Remote appearances for complex civil matters are still permitted, but are no longer mandatory. (See General Order Rescinding Portion of May 6, 2020 General Order Concerning Complex Civil Actions, available at
RescindingPortionof050621GeneralOrderConcerningComplexCivilActions.pdf.) If a party gives notice that a tentative ruling will be contested, any party seeking to participate in the hearing remotely should contact CourtCall.
Public access to hearings is available on a listen-only line by calling 888-808-6929 (access code 2752612).
State and local rules prohibit recording of court proceedings without a court order. These rules apply while in court and also while participating in a hearing remotely or listening in on a public access line. No court order has been issued which would allow recording of any portion of this motion calendar.
The court does not provide court reporters for proceedings in the complex civil litigation departments. Any party wishing to retain a court reporter to report a hearing may do so in compliance with this Court’s October 13, 2020 Policy Regarding Privately Retained Court Reporters. The court reporter may participate remotely and need not be present in the courtroom.
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Calendar Line 2
Case Name: Bonnie Kessner, et al. v. City of Santa Clara, et al.
Case No.: 20CV364054
This is a putative class action and petition for writ of mandate on behalf of retail water customers against dozens of named defendant/respondent governmental entities and retail water providers (“Defendants”).[1] Plaintiffs/petitioners (“Plaintiffs”) allege that Defendants violate Article XIII D, section 6 of the California Constitution—enacted through Proposition 218—which prohibits local public agencies from imposing property-related fees that exceed the cost of service. They allege that: a) Defendants use retail water rates to subsidize water service to the government and for general government services like public fire hydrants; b) some Defendants violate Proposition 218 by providing below-cost “SAWR” rates for agriculture and irrigation; and c) some Defendants maintain “budget based tiered water rates” that “amount to a discount for wealthier ratepayers.”
Before the Court are a total of 17 motions and briefs by certain defendants addressed to various “Phase II” issue, including Government Claims Act issues, failure to pay under protest, and misjoinder. Many other defendants move to join in these motions. As discussed below, the Court SUSTAINS WITHOUT LEAVE TO AMEND the demurrers based on misjoinder; SUSTAINS WITHOUT LEAVE TO AMEND the demurrers to the fourth cause of action based on failure to comply with the Government Claims Act but DENIES the motions to strike on that ground; and SUSTAINS WITH LEAVE TO AMEND the demurrers to the first through third causes of action for failure to pay under protest. The other Phase II motions are MOOT or, in a few cases, DENIED for the reasons discussed below.
I. BACKGROUND
This action was filed in February 2020. The proceedings were stayed pending the determination of Plaintiffs’ petition to coordinate this action with two others pending in other counties. The petition was denied in October 2020. Following a case management conference, the Court directed the parties to brief Defendants’ challenges to venue, jurisdiction, and joinder for early resolution.
The Court addressed those “Phase I” challenges in an order filed on May 26, 2021 (May Order). The May Order: denied/overruled the motions/demurrers based on failure to allege administrative exhaustion; granted/sustained the motions/demurrers based on misjoinder; and deemed moot the alternative motions based on improper venue. The Court declined to rule on several issues that were beyond the scope of the briefing it had authorized. It granted Plaintiffs 30 days’ leave to amend their first amended complaint (FAC) to include allegations showing that joinder is proper under Colusa Air Pollution Control Dist. v. Superior Court (1991) 226 Cal.App.3d 880 (Colusa).
Plaintiff filed the operative Second Amended Complaint (SAC) on June 24, 2021. The SAC asserts the following claims by all Plaintiffs individually and on behalf of several plaintiff classes: (1) rate methodology resulting in charges in excess of the cost of service (against Defendants including San Diego County Water Authority (SDCWA)) and (2) methodology resulting in charges in excess of the proportional cost of service (against Defendants other than SDCWA). In addition, certain plaintiffs bring claims for (3) subsidized agricultural rates (against Defendants City of Escondido, City of Napa, City of Oceanside, City of Oxnard, City of San Luis Obispo, City of Santa Cruz, City of Santa Rosa, City of Tustin, City of Vallejo, City of Ventura, Cucamonga Valley Water District, Elsinore Valley Municipal Water District, Fallbrook Public Utility District, Goleta Water District, Helix Water District, Lakeside Water District, Otay Water District, Padre Dam Municipal Water District, Rainbow Municipal Water District, Vallecitos Water District, Valley Center Municipal Water District, Ventura County, and Vista Irrigation District) and (4) budget based water rates (against Defendants City of Chino, City of Corona, Eastern Municipal Water District, El Toro Water District, Elsinore Valley Municipal Water District, Irvine Ranch Water District, and Palmdale Water District.
In connection with each claim, Plaintiffs seek damages, an accounting, declaratory and injunctive relief, and a writ of mandate. Among other changes relative to the FAC, Plaintiffs have added a claim challenging budget based tiered water rates and no longer seek relief against a putative defendant class.[2]
On May 26, 2021, the Court issued a scheduling order (Scheduling Order) establishing a briefing schedule on the following “Phase II” issues:
a. res judicata/collateral estoppel (issue and claim preclusion);
b. abatement;
c. lack of standing;
d. SCDWA’s argument concerning wholesale water rates;
e. Government Claims Act issues;
f. failure to pay under protest; and
g. venue and joinder issues that may still exist after plaintiff[s] file their SAC.
The following Phase II motions were filed on July 23 and 26, 2021 (along with various motions to join in these motions, which are addressed below):
• Lakeside Water District’s demurrer for failure to comply with the Government Claims Act;
• Irvine Ranch Water District (IRWD)’s demurrer and motion to strike based on failure to comply with the Government Claims Act and new allegations beyond the scope of the May Order;
• Eastern Municipal Water District’s demurrer for failure to comply with the Government Claims Act;
• City of Woodland and City of Ontario’s demurrer for failure to allege plaintiff paid the challenged fees under protest;
• City of San Jose’s demurrer/motion based on misjoinder and other actions pending;
• SDCWA’s demurrer for misjoinder and failure to state a cause of action against a wholesale water agency and motion to sever and transfer;
• City of Modesto’s motion to strike damages requests for failure to comply with pay under protest and administrative refund procedures;
• City of Suisun City, Palmdale Water District, City of Hesperia, and City of Chino’s demurrer for failure to comply with the Government Claims Act;
• City of Compton and City of Brea’s demurrer for misjoinder and alternative motion to sever and transfer;
• City of Fairfield’s demurrer for misjoinder and alternative motion to sever and transfer;
• San Diego Defendants’[3] demurrer for misjoinder and alternative motion to sever and transfer;
• Los Angeles County, City of Downey, and City of Pomona’s demurrer for misjoinder and alternative motion to sever and transfer;
• City of Antioch’s motion to strike damages requests for failure to comply with pay under protest and administrative refund procedures;
• City of San Buenaventura (City of Ventura)’s demurrer for failure to comply with the Government Claims Act and motion to strike allegations regarding unspecified “government and general governmental services”;
• Otay Water District’s Opening Brief regarding abatement, misjoinder, and severance and transfer;
• Carlsbad Coalition’s[4] Opening Brief/demurrer and motion to strike regarding abatement, res judicata, failure to comply with the Government Claims Act, and misjoinder; and
• Hayward Coalition’s[5] demurrer and motion to strike for failure to comply with pay under protest and administrative refund procedures.
Plaintiffs filed a total of 15 oppositions to these motions and associated motions for joinder on September 24, 2021, along with a request for judicial notice, which is GRANTED as to the existence and contents of the attached documents. (Evid. Code, § 452, subds. (b), (c), (d), & (h).) Defendants filed replies on November 8.
II. LEGAL STANDARDS
The motions at issue are addressed to the pleadings and are properly construed as demurrers and/or motions to strike, if not expressly characterized as such.
A. Demurrer
A demurrer tests the legal sufficiency of the complaint. (Chen v. PayPal, Inc. (2021) 61 Cal.App.5th 559, 568.) Consequently, it “reaches only to the contents of the pleading and such matters as may be considered under the doctrine of judicial notice.” (Weil v. Barthel (1955) 45 Cal.2d 835, 837; see also Code Civ. Proc., § 430.30, subd. (a).) “It is not the ordinary function of a demurrer to test the truth of the plaintiff’s allegations or the accuracy with which he describes the defendant’s conduct. … Thus, … the facts alleged in the pleading are deemed to be true, however improbable they may be.” (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958, internal citations and quotations omitted.)
In ruling on a demurrer, the allegations of the complaint must be liberally construed, with a view to substantial justice between the parties. (Glennen v. Allergan, Inc. (2016) 247 Cal.App.4th 1, 6.) Nevertheless, while “[a] demurrer admits all facts properly pleaded, [it does] not [admit] contentions, deductions or conclusions of law or fact.” (George v. Automobile Club of Southern California (2011) 201 Cal.App.4th 1112, 1120.) A demurrer will succeed where the allegations and matters subject to judicial notice clearly disclose a defense or bar to recovery. (Casterson v. Superior Court (2002) 101 Cal.App.4th 177, 183.)
B. Motion to Strike
“The court may, … upon terms it deems proper,” strike out “irrelevant, false or improper” matters from a complaint. (See Code Civ. Proc, § 436, subd. (a).) Irrelevant matter includes (1) an allegation that is not essential to the statement of a claim or defense, (2) an allegation that is neither pertinent to nor supported by an otherwise sufficient claim or defense, and (3) a demand for judgment requesting relief not supported by the allegations of the complaint or cross-complaint. (See id., § 431.10, subds. (b), (c).)
The motion “is traditionally used to reach pleading defects that are not subject to demurrer” because they impact only a portion of a cause of action. (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146.) The motion is properly employed in this context “when a substantive defect is clear from the face of a complaint, such as a violation of the applicable statute of limitations or a purported claim of right which is legally invalid,” and “is widely used to challenge portions of causes of action seeking punitive damages.” (PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682–1683 (PH II).) However, “such use of the motion to strike should be cautious and sparing.” (Id. at p. 1683.) The motion does not “creat[e] a procedural ‘line item veto’ for the civil defendant.” (Ibid.)
III. MOTIONS REGARDING JOINDER/VENUE
The following defendants have filed demurrers based on misjoinder, motions to sever and transfer, and related motions:
• City of San Jose’s demurrer/motion based on misjoinder and other actions pending;
• SDCWA’s demurrer for misjoinder and failure to state a cause of action against a wholesale water agency and motion to sever and transfer;
• City of Compton and City of Brea’s demurrer for misjoinder and alternative motion to sever and transfer;
• City of Fairfield’s demurrer for misjoinder and alternative motion to sever and transfer;
• San Diego Defendants’ demurrer for misjoinder and alternative motion to sever and transfer;
• Los Angeles County, City of Downey, and City of Pomona’s demurrer for misjoinder and alternative motion to sever and transfer;
• Otay Water District’s Opening Brief regarding abatement, misjoinder, and severance and transfer; and
• Carlsbad Coalition’s Opening Brief/demurrer and motion to strike regarding abatement, res judicata, failure to comply with the Government Claims Act, and misjoinder.
The following defendants have filed motions for joinder related to these issues, which are GRANTED:
• East Bay Municipal Utility District’s joinder in the demurrers/motions to sever and transfer filed by County of Los Angeles, City of Downey, and City of Pomona and by the San Diego Defendants and joinder to the Opening Brief on Phase 2 Issues filed by the Carlsbad Coalition Defendants;
• Vista Irrigation District’s joinder in the demurrer/motion to sever and transfer filed by the San Diego Defendants;
• City of Victorville’s joinder in the demurrer/motion to sever and transfer filed by County of Los Angeles, City of Downey, and City of Pomona and the Opening Brief on Phase 2 Issues filed by the Carlsbad Coalition Defendants as to Section III, subsection E only (regarding misjoinder);
• City of San Jose’s joinder in the Carlsbad Coalition and San Diego Defendants’ arguments regarding misjoinder and arguments regarding plea in abatement by the City of Santa Cruz asserted in the brief by the Carlsbad Coalition;
• SDCWA’s joinder in the demurrer/motion to sever and transfer filed by the San Diego Defendants; the Opening Brief on Phase 2 Issues filed by the Carlsbad Coalition Defendants as to misjoinder; and the demurrer/motion to sever and transfer filed by County of Los Angeles, City of Downey, and City of Pomona;
• Lakeside Water District’s joinder in the Opening Brief on Phase 2 Issues filed by the Carlsbad Coalition Defendants (as to its first argument that this round of briefing must be considered under the demurrer standard and its fifth argument that the SAC improperly names dozens of defendants who set distinct water rates independently) and joinder in the demurrer/motion to sever and transfer filed by the San Diego Defendants;
• City of Norwalk and City of Huntington Park’s joinder in the Carlsbad Coalition’s Opening Brief with respect to section III.E (regarding misjoinder);
• City of Compton and City of Brea’s joinder in the demurrer/motion to sever and transfer filed by County of Los Angeles, City of Downey, and City of Pomona;
• City of Fairfield’s joinder in the demurrer/motion to sever and transfer filed by County of Los Angeles, City of Downey, and City of Pomona;
• City of Ontario and City of San Bernardino’s joinder in the demurrer/motion to sever and transfer filed by County of Los Angeles, City of Downey, and City of Pomona;
• City of Antioch’s joinder in the demurrer/motion to sever and transfer filed by County of Los Angeles, City of Downey, and City of Pomona (Section III.A regarding improper joinder) and joinder in the San Diego Defendants’ demurer/motion to sever and transfer;
• City of Modesto’s joinder in the demurrer/motion to sever and transfer filed by County of Los Angeles, City of Downey, and City of Pomona (Section III.A regarding improper joinder) and in the San Diego Defendants’ demurer/motion to sever and transfer;
• City of San Diego’s joinder in the San Diego Defendants’ demurrer for misjoinder and alternative motion to sever and transfer;
• Rainbow Municipal Water District’s joinder in the San Diego Defendants’ demurrer for misjoinder and alternative motion to sever and transfer;
• Santa Clarita Valley Water Agency and Walnut Valley Water District’s joinder in the demurrers on the ground of misjoinder filed by the Carlsbad Coalition, the San Diego Defendants, and the County of Los Angeles, the City of Downey, and the City of Pomona;
• Otay Water District’s joinder in the Carlsbad Coalition’s Opening Brief as to misjoinder and plea in abatement and joinder in the San Diego Defendants’ demurrer/motion to sever and transfer in its entirety; and
• City of Fountain Valley’s joinder in the Carlsbad Coalition’s Opening Brief (Section III.E regarding improper joinder); County of Los Angeles, the City of Downey, and the City of Pomona’s demurrer; and the San Diego Defendants’ demurrer as to misjoinder.
A. Demurrers Based on Misjoinder
A defendant may raise misjoinder by demurrer when it appears on the face of the complaint or by answer when it does not. (Code Civ. Proc., §§ 430.10, subd. (d), 430.30.) It is rare for this ground to appear on the face of the complaint. (See Royal Surplus Lines Ins. Co., Inc. v. Ranger Ins. Co. (2002) 100 Cal.App.4th 193, 202.) But where it does, it is appropriate for the court to sustain a demurrer on this ground and, if no possibility that the defect can be cured by amendment appears, to enter dismissal. (See Moe v. Anderson (2012) 207 Cal.App.4th 826, 831–834 (Moe).)
1. Permissive joinder[6]
Code of Civil Procedure section 378, subdivision (a) provides that plaintiffs may join in one action if “(1) They assert any right to relief jointly, severally, or in the alternative, in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all these persons will arise in the action….” Similarly, Code of Civil Procedure section 379, subdivision (a) provides that defendants may be joined in an action “if there is asserted against them: [¶] (1) Any right to relief jointly, severally, or in the alternative, in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all these persons will arise in the action….”
“The purpose of section 378 is to permit the joinder in one action of several causes arising out of identical or related transactions and involving common issues. The statute should be liberally construed so as to permit joinder whenever possible in furtherance of this purpose.” (Coleman v. Twin Coast Newspaper, Inc. (1959) 175 Cal.App.2d 650, 653 (Coleman).) The “requirement that the right to relief arise from the ‘same transaction or series of transactions’ has been construed broadly so that joinder of plaintiffs is permitted if there is any factual relationship between the claims alleged.” (State Farm Fire & Casualty Co. v. Superior Court (1996) 45 Cal.App.4th 1093, 1113, italics original, abrogated on another ground by Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163.)
Still, “[a]lthough the modern joinder statutes are to be liberally construed and applied, neither the statutes nor the case law in California permit unlimited joinder.” (Hoag v. Superior Court of Los Angeles County (1962) 207 Cal.App.2d 611, 618 (Hoag).) As one court summarized,
Plaintiffs in other proceedings have been found to be within the “series of transactions” language when they alleged a single scheme, depending on the same basic misrepresentations and leading to a series of transactions exactly similar in kind and manner of operation. (Anaya v. Superior Court (1984) 160 Cal.App.3d 228, 232 [(Anaya)] ….) This occurs, for example, when all plaintiffs were led to purchase property in the same subdivision based on identical misrepresentations about the property. (Aldrich v. Transcontinental Land etc. Co. (1955) 131 Cal.App.2d 788, 791–792 ….) This may also occur when plaintiffs were all exposed to the same harmful chemicals at the same location. (Anaya, at p. 233.)
(David v. Medtronic, Inc. (2015) 237 Cal.App.4th 734, 741 (David) [multiple plaintiffs were not properly joined in medical device products liability action against multiple defendants].)
But claims must arise out of common facts, not merely pose common questions of law and fact, for joinder to be supported. (See Hoag, supra, 207 Cal.App.2d at p. 620 [finding misjoinder in an action where several plaintiff political protestors brought suit against several defendants who had displayed plaintiffs’ mug shots during public gatherings in different counties]; see also Coleman, supra, 175 Cal.App.2d at p. 654 [even assuming common questions of law and fact, plaintiffs were misjoined where they alleged a group of defendants entered their separate offices without permission on the same day, inspected documents, and destroyed property; “these events did not constitute a single transaction and nothing is alleged to indicate a related series of transactions,” where “[t]he only fact which appears in the complaint is that three chiropractors, practicing in the same city, underwent scrutiny during the course of the same day”]; Moe, supra, 207 Cal.App.4th at pp. 832–833 [finding misjoinder where plaintiffs alleged “separate and distinct sexual assaults during separate and distinct time periods” against the same perpetrator, although his employer was properly sued in a single action for negligent hiring and supervision].)
2. Colusa
In this case, Plaintiffs claim that joinder is proper under Colusa. In the May Order, the Court found that the FAC did “not currently allege ‘that defendants use the same rate making methodology …’ or other circumstances like those present in Colusa,” but granted Plaintiffs leave to amend the complaint to include such allegations.
As discussed in the May Order, Colusa was an action by 21 manufacturers, retailers, and contractors, all based in Los Angeles County, against two statewide public agencies and six regional or local air pollution control agencies that “developed, adopted, implemented or otherwise promoted certain regulations in California which severely limit the amount of solvent contained in architectural coatings and, as a result, effectively ban plaintiffs’ products.” (Colusa, supra, 226 Cal.App.3d at pp. 883–884.) Two of the pollution control agencies moved to sever and transfer the claims against them, and the Court of Appeal affirmed the denial of those motions. (Id. at pp. 884–885.)
In finding the defendants were properly joined, Colusa explained:
The plaintiffs’ complaint alleges that the several defendants … promulgated and developed the [suggested control measures or] SCMs relating to amendments to the preexisting architectural coating regulations of the district defendants. Thereafter, each of the district defendants formally adopted the SCMs (with some minor variations) as their local rule amendments. …
… While the rule amendments are not all identical, they clearly are in response to the promulgation of the SCMs by the [California Air Resources Board] which the complaint alleges the district defendants … helped to develop; in other words the local rule amendments all sprang from the same initial stimulus.
(Colusa, supra, 226 Cal.App.3d at p. 886, italics added.)
In addition, Colusa explained:
Plaintiffs allege that (1) the SCMs were promulgated by the statewide defendants with active participation of the district defendants…, (2) the local rule amendments adopted by the district defendants … constituted a single series of occurrences each of which was substantially the same, (3) each of the district defendants by virtue of [its] membership in [the California Air Pollution Control Officers Association, Inc.] and [the Technical Review Group] acted “in concert” with the statewide defendants with respect to the promulgation of the SCMs and with the other districts with respect to the adoption of substantially similar local rule amendments and (4) the impact of the local rule changes by the several district defendants is not limited to sales by plaintiffs in a particular district; the effect of the new local rules is to prevent any sales of certain of plaintiffs’ products in all districts.
(Colusa, supra, 226 Cal.App.3d at p. 887, italics original.)
3. Plaintiffs’ new allegations
The SAC newly alleges that the Defendants acted in concert with one another by creating industry standards through the American Water Works Association (AWWA), of which all Defendants (along with “over 4,300 utilities that supply roughly 80 percent of the nation’s drinking water”), are members. (See SAC, ¶¶ 190–191.) “AWWA authors the M1 Manual (M1), which creates and provides the industry standard methodologies for water service rates and charges,” and which Defendants all use “to establish fees and charges associated with their water systems.” (Id., ¶ 192.) Raftelis Financial Consultants, Inc. (Raftelis) and Carollo Engineers, Inc. (Carollo) are also AWWA members, and “[m]ost of the defendants” employ one or the other firm “to prepare their Cost of Service Studies.” (Id., ¶¶ 196–197.) SDCWA, in particular, “pays Carollo to prepare its Cost of Service Studies.” (Id., ¶ 196.)
With the support of [SDCWA[ and the defendants, Raftelis and Carollo controlled AWWA’s Rates and Charges Committee at all relevant times. In 2012, the Rates and Charges Committee issued a new version of M1, endorsed by [SDCWA] and the defendants, that included a methodology where the cost of public fire water service was [newly][7] categorized as a cost of service to ratepayers (the M1 public fire water methodology).
(SAC, ¶ 198.) “[SDCWA] and the defendants uniformly adopted and implemented” the M1 public fire water methodology, “passing the cost of public fire water on to ratepayers including plaintiffs and the members of the plaintiff classes, in violation of Proposition 218.” (Id., ¶ 199.)
In their cost of service studies, Defendants consistently “listed the costs associated with public fire water service as a ratepayer cost of service, without considering Proposition 218 and without considering alternatives,” which was “intended to and did facilitate consistent use of the M1 public fire water methodology throughout the State of California” since the cost of service studies are public records. (SAC, ¶¶ 200–201.) “Further, defendants joined forces through various membership organizations to promote use of the M1 public fire water methodology. … [W]ith defendants’ joint support, these organizations refrained from making any statement contradicting the M1 fire water methodology.” (Id., ¶ 202.) “Defendants acted as one both through their joint actions and their shared silence to achieve a common goal—the recovery of the cost of public fire water through the collection of fees from ratepayers including plaintiffs and the members of the plaintiff classes.” (Id., ¶ 203.)
4. Discussion
The moving defendants contend that two of the three requirements for permissive joinder, which were satisfied in Colusa, are not satisfied here: (1) there is no right to relief asserted against defendants “jointly, severally, or in the alternative” and (2) no such right to relief “arises out of the same transaction or series or transactions.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2021) ¶ 2:208, p. 2-84, italics original [identifying these as two separate requirements] (Rutter).)
a. right to relief jointly, severally, or in the alternative
As an initial matter, the moving defendants correctly urge that no relief is sought against them “jointly, severally, or in the alternative.” Rather, the various plaintiffs seek relief on their own behalf, and on behalf of a putative class of other retail water customers of the same defendant, “against the defendant or defendants from which they obtain water.” (SAC, ¶¶ 214, 221; see also id. at ¶¶ 225, 230.) They do not allege joint and/or several liability, nor do they allege that any “plaintiff is in doubt as to the person from whom he or she is entitled to redress,” as required to support joinder based on alternative liability (Code Civ. Proc., § 379, subd. (c)). (See Landau v. Salam (1971) 4 Cal.3d 901, 906 [permissive joinder “is clearly intended to be available upon a showing either that the negligence of two or more persons, whether joint, independently concurrent, or successive, contributed proximately to cause the injury for which recovery is sought, or that the injury for which recovery is sought was proximately caused by the negligence of one or another or several of two or more persons and, as to each person who is not charged absolutely, that a reasonable uncertainty … exists in respect to alternative or quantitative liability”], quoting Kraft v. Smith (1944) 24 Cal.2d 124, 130–131 (Kraft), italics original.)
Colusa did not address this threshold requirement at length because it was apparently satisfied there. The plaintiffs in Colusa were “21 California manufacturers, retailers and contractors” who “d[id] business throughout California.” (Colusa, supra, 226 Cal.App.3d at pp. 883–884.) So unlike the plaintiffs here, they were each harmed by regulations enforced within the boundaries of the various districts. Indeed, Colusa specifically emphasized the plaintiffs’ allegations that “the impact of the local rule changes by the several district defendants is not limited to sales by plaintiffs in a particular district; the effect of the new local rules is to prevent any sales of certain of plaintiffs’ products in all districts.” (Id. at p. 887.)
Hoag explained that joinder is improper under the distinct circumstances present here, where “[t]he complaint demonstrates no doubt as to the person from whom plaintiffs claim they are entitled to redress; nor is there any showing that the acts of defendants operated successively “to cause the injury for which recovery is sought.” (Kraft…, supra.) [and] [t]here is no one cause in which all defendants are interested or affected….” (Hoag, supra, 207 Cal.App.2d at p. 619, italics added; see also J.T. v. de Blasio (S.D.N.Y. 2020) 500 F. Supp. 3d 137, 175 (J.T.) [“[t]he mere fact that each district is alleged to have violated IDEA by closing its schools during the pandemic in response to a state order does not make permissive joinder appropriate” where “no IDEA child or his/her parents has any claim or cause of action or right to relief except as against the school district in which that child resides”].)
Plaintiffs do not directly respond to the moving defendants’ argument on this point. They urge that the “joint[], several[], or in the alternative” language governing joinder of defendants should be construed in the same manner as the parallel language in the statute governing joinder of plaintiffs (Code Civ. Proc., 378, subd. (a)(1)), and cite cases where joinder of many plaintiffs’ claims against a single defendant was permitted. (See Petersen v. Bank of America Corp. (2014) 232 Cal.App.4th 238 (Petersen); Anaya, supra, 160 Cal.App.3d 228.) But these cases are distinguishable. Indeed, Petersen repeatedly emphasized “that this case involves essentially only one lender, Countrywide, operating in conjunction with its captive appraisal agents”: “While Countrywide cites a number of federal cases that concluded there had been misjoinder, these federal cases merely make the point that genuinely multiple defendants do not fall within the federal permissive joinder rule.” (Petersen, supra, 232 Cal.App.4th at p. 252, italics original.) As in Petersen, the Court must consider both sides of the equation here: whether plaintiffs are permissibly joined and whether defendants are. While it has no reason to doubt that subgroups of plaintiffs asserting claims against one of the various defendants in this action are properly joined, that does not mean the defendants are properly joined with one another.
Finally, Plaintiffs stress that, for joinder to be appropriate, “[i]t is not necessary that each defendant be interested as to every cause of action or as to all relief prayed for.” (Code Civ. Proc., § 379, subd. (b).) But this misses the point: here, Plaintiffs do not allege any right to relief against Defendants “jointly, severally, or in the alternative.” “[W]ide-open joinder of claims is permitted once the party-joinder rules are satisfied,” but only once the party-joinder rules are satisfied as an initial matter. (Rutter, supra, ¶ 2:222, p. 2-88.) It is that threshold requirement that is missing here.
In sum, Plaintiffs seek relief “against the defendant or defendants from which they obtain water” (SAC, ¶¶ 214, 221) and not against multiple defendants “jointly, severally, or in the alternative.”[8] As urged by the moving defendants, their demurrers based on misjoinder are properly sustained for this reason alone.
b. same transaction or series of transactions
While unnecessary in light of its ruling above, the Court also finds that Plaintiffs fail to allege their claims arise from the “same transaction or series of transactions” as in Colusa. As stated in the May Order, “the FAC does clearly reflect the basic fact that plaintiffs are challenging different water rates enacted by different entities in different jurisdictions” (italics original), and nothing in the SAC changes that. The SAC alleges that Defendants approach one aspect of their water rate-setting, which Plaintiffs term “the M1 public fire water methodology,” in the same way, having banded together through a national organization to do so. But the Court GRANTS judicial notice of documents submitted by the moving defendants that show rates are set through proceedings unique to each defendant, which consider a range of different “cost of service” inputs (of which the “M1 public fire water methodology” may be one) and use a range of different overall methodologies to set rates.[9] Indeed the SAC’s own allegations establish that Defendants’ overall rate methodologies vary.[10]
Based on Plaintiffs’ allegations (and defendants’ failure to point to contrary facts in the judicially noticeable documents they submit), the Court must assume that defendants approach the use of the “M1 public fire water methodology” in the same way in their cost of service analyses. Whether this is appropriate under Proposition 218 would then be a common legal issue in the case, and perhaps a critical one. But that is not enough to show joinder is appropriate. It is still constitutionality of the rates enacted through wholly distinct ratemaking procedures that is ultimately at issue. (See Citizens for Fair REU Rates v. City of Redding (2018) 6 Cal.5th 1, 17 [“[T]he mere existence of an unsupported cost in a government agency’s budget does not always mean that a fee or charge imposed by that agency is a tax. The question is not whether each cost … is reasonable. Instead, the question is whether the charge imposed on ratepayers exceeds the reasonable costs of providing the relevant service.”]; Gov. Code, § 53750, subd. (h) [defining a rate increase to include a change of “methodology” only when “that revision results in an increased amount being levied on any person or parcel”].)
These ratemaking procedures are different “transactions or series of transactions” notwithstanding Colusa. Colusa emphasized that the overall regulations at issue in that case were “substantially similar” and were adopted through a process that was “substantially the same.” (Colusa, supra, 226 Cal.App.3d at p. 88, italics original.) It noted and deferred to the trial court’s assessment that the legislative acts enacted “ ‘essentially the same standard’ ” (id. at p. 887, fn. 6), and identified the “same series” of occurrences at issue in the case as “the initial proposal of amendments to air pollution standards (i.e., the SCMs) by the statewide defendants and the adoption of those proposals in substantially the same form in local rule amendments by the several district defendants” (id. at p. 887, italics added).
That is not alleged here, notwithstanding Plaintiffs’ description of one aspect of the challenged rate-settings as a “methodology.” To use the words of another court, there is no “series of transactions exactly similar in kind and manner of operation” here. (David, supra, 237 Cal.App.4th at p. 741.) Rather, as in David, there are multiple plaintiffs separately challenging separate actions by multiple defendants, albeit raising common issues of law or fact. But as a federal court recently put it, “[a]n allegation that ‘the defendants merely committed the same type of violation in the same way’ is, by itself, insufficient to justify joinder….” (J.T., supra, 500 F.Supp.3d at p. 175, internal citations omitted.)
B. Conclusion
The following defendants’ demurrers based on misjoinder are SUSTAINED WITHOUT LEAVE TO AMEND: City of San Jose; SDCWA; City of Compton and City of Brea; City of Fairfield; San Diego Defendants; Los Angeles County, City of Downey, and City of Pomona; Otay Water District; and Carlsbad Coalition. This ruling also applies to the following defendants who have joined in one or more of the demurrers: East Bay Municipal Utility District; Vista Irrigation District; City of Victorville; Lakeside Water District; City of Norwalk and City of Huntington Park; City of Ontario and City of San Bernardino; City of Antioch; City of Modesto; City of San Diego; Rainbow Municipal Water District; Santa Clarita Valley Water Agency and Walnut Valley Water District; and City of Fountain Valley.
These defendants shall prepare and lodge proposed judgments with Plaintiffs’ input as to form.
In light of this ruling on joinder, defendants’ alternative motions to sever and transfer venue are DENIED WITHOUT PREJUDICE as MOOT.
The following alternative motions by these defendants are also DENIED WITHOUT PREJUDICE as MOOT: SDCWA’s demurrer for failure to state a cause of action against a wholesale water agency; City of San Jose’s demurrer/motion based on other actions pending; Otay Water District’s Opening Brief regarding abatement; Carlsbad Coalition’s demurrer and motion to strike regarding abatement, res judicata, and failure to comply with the Government Claims Act; Lakeside Water District’s demurrer[11] for failure to comply with the Government Claims Act; City of Modesto’s motion to strike damages requests for failure to comply with pay under protest and administrative refund procedures; and City of Antioch’s motion to strike damages requests for failure to comply with pay under protest and administrative refund procedures.
Finally, in light of these rulings, the following motions for joinder are MOOT: Lakeside Water District’s motion to join in the Opening Brief filed by the Carlsbad Coalition Defendants (as to its fourth argument that the named Plaintiffs exceed their claims as to all defendants); City of Norwalk and City of Huntington Park’s motion to join in the Carlsbad Coalition’s Opening Brief (with respect to section III.D.2 regarding the Government Claims Act) and IRWD’s demurrer/motion to strike (with respect to section IV.A.1 regarding the scope of the Court’s order granting leave to amend); City of Antioch’s motion to join in Carlsbad Coalition’s Opening Brief (with respect to Section III.D.1 regarding the Government Claims Act), IRWD’s demurrer/motion to strike, Lakeside Water District’s demurrer, Eastern Municipal Water District’s demurrer, and City of Woodland and City of Ontario’s demurrer; City of Modesto’s motion to join in Carlsbad Coalition’s Opening Brief (with respect to Section III.D.1 regarding the Government Claims Act), IRWD’s demurrer/motion to strike, Lakeside Water District’s demurrer, Eastern Municipal Water District’s demurrer, and City of Woodland and City of Ontario’s demurrer; Otay Water District’s motion to join in Lakeside Water District’s demurrer; Rainbow Municipal Water District’s motion[12] to join in Lakeside Water District’s demurrer; and City of Fountain Valley’s motions to join in various other motions.
IV. MOTIONS REGARDING GOVERNMENT CLAIMS ACT
The following defendants have filed demurrers based on failure to comply with the Government Claims Act and related motions (which were not mooted by the Court’s ruling on misjoinder above):
• IRWD’s demurrer and motion to strike based on failure to comply with the Government Claims Act and new allegations beyond the scope of the May Order;
• Eastern Municipal Water District demurrer for failure to comply with the Government Claims Act;
• City of Suisun City, Palmdale Water District, City of Hesperia, and City of Chino’s demurrer for failure to comply with the Government Claims Act; and
• City of San Buenaventura (City of Ventura)’s demurrer for failure to comply with the Government Claims Act and motion to strike allegations regarding unspecified “government and general governmental services.”
The following defendants have filed motions for joinder related to these issues, which are GRANTED:
• Eastern Municipal Water District’s joinder in IRWD’s demurrer/motion to strike;
• Contra Costa Water District’s joinder in IRWD’s demurrer/motion to strike;
• City of Chino, Palmdale Water District, City of Hesperia and City of Suisun’s joinder in IRWD’s demurrer/motion to strike;
• Alameda County Water District’s joinder in IRWD’s demurrer/motion to strike (as to Argument IV. A.3.3. The Government Claims Act Bars Plaintiffs’ Causes Of Action Challenging IRWD’s Rates For Allegedly Funding Unspecified “General Governmental Services”);
• City of Ventura’s joinder in IRWD’s motion to strike to the extent that it argues that the Government Claims Act bars claims challenging Defendants’ rates for allegedly funding unspecified “general government services”;
• City of Garden Grove and City of Tustin’s joinder in IRWD’s demurrer/motion to strike except as to the fourth cause of action.
A. The Government Claims Act
The Government Claims Act (§ 810 et seq.) “establishes certain conditions precedent to the filing of a lawsuit against a public entity. As relevant here, a plaintiff must timely file a claim for money or damages with the public entity. (§ 911.2.) The failure to do so bars the plaintiff from bringing suit against that entity. (§ 945.4.)” (State of California v. Superior Court (2004) 32 Cal.4th 1234, 1237 [(State of California)] ….) …“The policy underlying the claims presentation requirements is to afford prompt notice to public entities. This permits early investigation and evaluation of the claim and informed fiscal planning in light of prospective liabilities.” ([Sparks v. Kern County Bd. of Supervisors (2009) 173 Cal.App.4th 794, 798].)
(California Restaurant Management Systems v. City of San Diego (2011) 195 Cal.App.4th 1581, 1591.)
Among other things, the claim must state:
(c) The date, place and other circumstances of the occurrence or transaction which gave rise to the claim asserted.
(d) A general description of the indebtedness, obligation, injury, damage or loss incurred so far as it may be known at the time of presentation of the claim. …
(Gov. Code, § 910.)
The claim need not provide a level of detail that would “comply with formal pleading standards.” (Blair v. Superior Court (1990) 218 Cal.App.3d 221, 224.) It “need only ‘fairly describe what [the] entity is alleged to have done,’ ” consistent with the purpose of the statute to enable the government entity to “investigate and evaluate the claim.” (Stockett v. Association of Cal. Water Agencies Joint Powers Ins. Authority (2004) 34 Cal.4th 441, 446 (Stockett), internal citations omitted.)
“[A] plaintiff must allege facts demonstrating or excusing compliance with the claim presentation requirement” or his or her complaint is subject to demurrer for failure to state a claim. (State of California, supra, 32 Cal.4th at p. 1243.)
If the claim is rejected and the plaintiff ultimately files a complaint against the public entity, the facts underlying each cause of action in the complaint must have been fairly reflected in a timely claim. (Nelson v. State of California (1982) 139 Cal. App. 3d 72, 79 [(Nelson)] ….) …[T]he complaint is vulnerable to a demurrer if it alleges a factual basis for recovery which is not fairly reflected in the written claim.” (Ibid.)
The claim, however, need not specify each particular act or omission later proven to have caused the injury. (Blair v. Superior Court, supra, 218 Cal. App. 3d at p. 225.) A complaint’s fuller exposition of the factual basis beyond that given in the claim is not fatal, so long as the complaint is not based on an “entirely different set of facts.” (Stevenson v. San Francisco Housing Authority (1994) 24 Cal.App.4th 269, 278 ….) Only where there has been a “complete shift in allegations, usually involving an effort to premise civil liability on acts or omissions committed at different times or by different persons than those described in the claim” have courts generally found the complaint barred. (Blair v. Superior Court, supra, at p. 226.) Where the complaint merely elaborates or adds further detail to a claim, but is predicated on the same fundamental actions or failures to act by the defendants, courts have generally found the claim fairly reflects the facts pled in the complaint. (White v. Superior Court (1990) 225 Cal. App. 3d 1505, 1510–1511.)
(Stockett, supra, 34 Cal.4th at p. 447.)
B. Plaintiffs’ Claims, Defendants’ Responses, and Plaintiffs’ Waiver Argument
As an initial matter, Plaintiffs contend that the moving defendants waived any challenge to their claims under the Government Claims Act by failing to respond with adequate notices of insufficiency. To illustrate this argument, the Court will focus on the claims submitted to Irvine Ranch Water District (IRWD).[13] But the same reasoning applies to the claims submitted to the other defendants.
1. Factual Background
Plaintiffs Stan Weinstein and Davida Gregory (IRWD Plaintiffs) originally submitted claims to IRWD on October 18, 2019, which stated in very general terms that “[a]t all times in 2018 and 2019, at each location at which Water Provider delivered water to Claimant or someone in the Claimant Class, Water Provider charged rates in excess of those permitted by Proposition 218,” and so was “obligated to repay Claimant and the Claimant Class all amounts in excess of the charges permitted by Proposition 218….” (IRWD’s Req. for Judicial Notice, Exs. A & B.) IRWD responded by sending both plaintiffs a Notice of Insufficiency of Purported Claims, stating, among other things, “Your failure to include any information regarding the purported basis for the assertions that IRWD charged rates ‘in excess of those permitted by Proposition 218’ makes the purported claim insufficient,” since “ ‘Proposition 218’ includes various provisions now contained in Articles XIIIC and XIIID of the California Constitution that deal with a number of subjects.” (Id., Exs. C & D.) IRWD subsequently rejected the original claims by letter dated November 21, 2019, and advised plaintiffs that they had six months to file any legal action. (Id., Exs. E & F.)
The IRWD Plaintiffs submitted new claims on November 29, 2019, which stated in relevant part:
Under Proposition 218, Water Provider and its Governing Board cannot incorporate into its rates the cost of general governmental services, including public fire services. Yet, the rates established by Water Provider and its Governing Board do incorporate such costs in the rates charged Claimant and the Claimant Class.
Water Provider and its Governing Board base charges to Claimant and the Claimant Class on the volume of water provided plus a fixed monthly charge even if no water is actually provided which incorporates the cost associated with what is referred to as “readiness-to-serve.”
Water Provider incurs a substantial readiness-to-serve cost associated with its ability to handle the capacity necessary for public fire services provided by public fire hydrants. These costs exist whether or not any water is actually delivered through a fire hydrant. Water Provider and its Governing Board do not charge public fire protection providers for that readiness-to-serve and, instead, wrongly include the cost of that readiness-to-serve in the rates charged Claimant and the Claimant Class. As a result, Claimant and the Claimant Class pay more than the cost of service to them.
Through this practice and others, Water Provider and its Governing Board provide water services for governmental entities, and the general public served by those governmental entities, at less than the cost of those water services. Water Provider and its Governing Board offset those undercharges by setting rates and imposing fees on Claimant and the Claimant Class that exceed the cost of service and, therefore, violate the provisions of Proposition 218. Claimant and the Claimant Class are entitled to a refund of those unconstitutional overcharges.
(IRWD’s Req. for Judicial Notice, Exs. G & H.) IRWD rejected these new claims outright by letter dated January 16, 2020, stating that plaintiffs had six months from the date of “this notice” to file suit. (Id., Exs. I & J.)
2. Discussion
Government Code section 911 provides that “[a]ny defense as to the sufficiency of the claim based upon a defect or omission in the claim as presented is waived by failure to give notice of insufficiency with respect to the defect or omission as provided in Section 910.8.” That section, in turn, requires that the government entity “give written notice of [a claim’s asserted] insufficiency, stating with particularity the defects or omissions therein.” Plaintiffs contend that because IRWD (and the other moving defendants) either failed to serve notices of insufficiency or served only conclusory ones, they have waived any defense based on the sufficiency of Plaintiffs’ claims.
But as several defendants point out on reply, the waiver established by section 911 applies only to defects in “the claim as presented”—not to undisclosed additional claims that were not described in the claim submitted, which the responding entity would have no way of anticipating. Based on this logic, published authority has rejected a waiver argument indistinguishable from Plaintiffs’ here:
Plaintiff notes that the State Board of Control could have given him written notice of any insufficiency in his claim and argues that the board’s failure to do so resulted in the waiver of any defense as to the sufficiency of the claim. (Gov. Code, §§ 910.8, 911.) The contention lacks merit. The insufficiency of plaintiff’s claim lies in its failure to set forth the factual basis for recovery alleged in the complaint; defendant could not have discovered such defect until plaintiff filed his complaint. Defendant raised the defense of insufficiency of the claim at the earliest opportunity by demurring to the complaint on that ground.
(Donohue v. State of California (1986) 178 Cal.App.3d 795, 805 (Donohue).) Plaintiffs’ waiver argument accordingly fails. (See also Sandoval v. Merced Union High Sch. (E.D.Cal. May 1, 2006, No. CV-F-06-066 REC/DLB) 2006 U.S.Dist.LEXIS 28446, at *40 [claim of waiver was without merit where it would “require[] that defendants be mind-readers and anticipate that the facts alleged in the Complaint would include factual allegations not[] detailed in the tort claims and notify plaintiff that the tort claims were insufficient on that basis”].)
C. Demurrers to the Fourth Cause of Action
IRWD, Eastern Municipal Water District, and City of Chino and Palmdale Water District demur to the fourth cause of action for failure to comply with the Government Claims Act. In this cause of action, which was not asserted in the FAC,[14] Plaintiffs allege that “Defendants maintain budget based tiered water rates,” which limit ratepayers “to a specified amount of water in each tier except the highest tier.” (SAC, ¶ 231.) “A budget determines how much water a ratepayer may use in each tier. Ratepayers who are assigned budgets with less water in the low tiers pay more for their water because more of their water is billed at rates for the higher tiers.” (Id., ¶ 232.) “[T]aken as a whole,” these rates “amount to a discount for wealthier ratepayers” and “do not reflect the cost of providing water and result in rates the plaintiffs and class members pay that exceed the cost of service.” (Id., ¶ 233.)
1. Scope of Plaintiffs’ Written Claims
This new cause of action is not “ ‘fairly reflected in the written claim[s]’ ” that Plaintiffs submitted.[15] (Stockett, supra, 34 Cal.4th at p. 447, quoting Nelson, supra, 139 Cal.App.3d at p. 79.) Even assuming that Plaintiffs’ claims are properly construed to encompass more than the specifically-described theory concerning public fire services, they are expressly limited to the claim that “[t]hrough this practice and others, [Defendants] provide water services for governmental entities, and the general public served by those governmental entities, at less than the cost of those water services.” (Italics added.) The new “budget based tiered water rates” claim does not involve the alleged subsidy of services to “governmental entities, and the general public” they serve, but rather alleges that “wealthier ratepayers” are subsidized by these rates. (Italics added.) This is a wholly different set of facts premised on wholly different actions. (See Plantier v. Ramona Municipal Water Dist. (2019) 7 Cal.5th 372, 382 [Proposition 218’s “proportionality requirement concerns the method used to allocate a property-related service’s aggregate cost among fee payors” and “is separate from an agency’s obligation not to collect more [overall] revenue than necessary to provide that service to all identified parcels”].)[16]
The Court is unaware of any authority “permitting a plaintiff to ‘cure’ her failure to file a prelawsuit claim by filing a postlawsuit claim, particularly when the claim is filed a year after the lawsuit had commenced …” (Le Mere v. Los Angeles Unified School Dist. (2019) 35 Cal.App.5th 237, 247 [observing the absence of such authority].) So there is no basis to grant Plaintiffs leave to amend this newly asserted cause of action.
2. Requests for Non-Monetary Relief
Plaintiffs contend that even if the Court finds the fourth cause of action is not fairly encompassed by their written claims, the Government Claims Act applies only to claims for “ ’money or damages,’ ” while the fourth cause of action also seeks declaratory and injunctive relief and a writ of mandate. (Loehr v. Ventura County Community College Dist. (1983) 147 Cal.App.3d 1071, 1079 (Loehr), quoting Gov. Code, §§ 905, 905.2.) However, Plaintiffs’ own authority holds that where a review of requests for non-monetary relief “in light of the complaint as a whole” reflects “that the primary purpose of the[] claims is pecuniary in nature,” the claim presentation requirement still applies. (Id. at p. 1081.) Other authorities put it more strongly: the claim requirement applies where the plaintiff’s “claims for damages are not merely incidental to the claim for injunctive [or other nonmonetary] relief.” (Bates v. Franchise Tax Bd. (2004) 124 Cal.App.4th 367, 387 [demurrer appropriately sustained without leave to amend on this ground]; see also Lozada v. City and County of San Francisco (2006) 145 Cal.App.4th 1139, 1168 (Lozada) [“we are convinced that Lozada’s claims for damages and civil penalties were not incidental to his claims for injunctive and declaratory relief, but were the primary focus of his action”; affirming summary adjudication on this ground]; Gatto v. County of Sonoma (2002) 98 Cal.App.4th 744, 762 [affirming trial court’s implied finding “that the request for damages was not merely incidental to a transcendent interest in injunctive relief but was the primary relief sought”].)
Here, the emphasis of Plaintiffs’ complaint, including the fourth cause of action, is on monetary relief for Plaintiffs and the putative classes. The SAC merely requests “declaratory relief, injunctive relief, and a writ of mandate” in one breath, in general terms that provide no indication of what the scope of such relief would be. The mere labelling of the relief sought in these terms is inadequate to show that the claim requirement does not apply. (See Canova v. Trustees of Imperial Irrigation Dist. Employee Pension Plan (2007) 150 Cal.App.4th 1487, 1493–1494 [“[w]here the primary purpose of a mandamus action is monetary relief,” the Claims Act applies; “[i]n contrast, mandamus actions seeking to compel performance of a mandatory duty, statutory duty or ministerial act may not be subject to the Claims Act if they do not seek money or damages”].)
On opposition, Plaintiffs urge that a claim is not necessary where “the primary outcome sought [is] not money or damages, but an order compelling performance of a mandatory duty.” (Board of Administration v. Wilson (1997) 52 Cal.App.4th 1109, 1125.) But they make little attempt to persuade that this is actually the case here. The reasoning in Lozada is instructive:
Unlike writ proceedings where incidental monetary relief may be awarded in the exercise of the court’s power to give extraordinary relief, the aim of Lozada’s POBRA cause of action was recovery of money damages. … [N]either Lozada nor amicus curiae PORAC makes the argument that in this case Lozada’s specific claims for monetary relief and damages were merely incidental to his claims for declaratory and injunctive relief.
(Lozada, supra, 145 Cal.App.4th 1139, 1170.)
Ultimately, Plaintiffs do not dispute that the monetary component of their fourth cause of action is subject to the Government Claims Act, and they fail to persuade that this component is not the primary purpose of their claim. The Court will accordingly sustain the demurrers to the entire fourth cause of action for failure to comply with the claim requirement. If Plaintiffs truly wish to pursue a standalone claim for nonmonetary relief based on the theory raised in the fourth cause of action, they will need to file a motion for leave to amend their complaint to do so, proposing specific language as to the scope of the relief they seek.
3. Conclusion
IRWD, Eastern Municipal Water District, and City of Chino and Palmdale Water District’s demurrers to the fourth cause of action are SUSTAINED WITHOUT LEAVE TO AMEND.
D. Motions to Strike Language from Paragraph 171
IRWD; Eastern Municipal Water District; City of Suisun City, Palmdale Water District, City of Hesperia, and City of Chino; and City of Ventura move to strike language referring to “government and general governmental services” from paragraph 171 of the SAC, and several other defendants join in their motions.
Paragraph 171 is found in a section of the SAC titled “NATURE OF CLAIMS” and states in full:
Defendants use rate setting methodology that causes Retail Water Customers to pay more than the cost of service for water. The methodology results in subsidies for government and general governmental services, including public fire water service.
Defendants contend that Plaintiffs’ administrative claims do not encompass challenges based on subsidies for any “government and general governmental services” other than public fire water service. But the SAC does not raise any such challenges. If and when Plaintiffs attempt to raise a challenge to an asserted subsidy of governmental services not identified in the SAC, the Court may be called to evaluate whether such a challenge was fairly reflected in their written claims. But it will not rule on this issue preemptively and in the abstract.
Defendants’ motions to strike are accordingly DENIED.
E. Additional Issues Raised by City of Ventura
Finally, in addition to duplicating and joining in the motions already addressed, the City of Ventura demurs to the first and second causes of action on the grounds that the Government Claims Act bars these claims to the extent they challenged unspecified “general governmental services” and allege that Ventura has engaged in “joint conduct” to adopt rates utilizing the AWWA M1 Manual methodologies. Ventura’s demurrer is OVERRULED as to these arguments, since they attack only portions of Plaintiffs’ claims. (See Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1167 [a demurrer is not properly sustained as to a portion of a cause of action].)
V. MOTIONS REGARDING FAILURE TO PAY UNDER PROTEST
The last batch of Phase II motions concerns arguments regarding failure to pay under protest:
• City of Woodland and City of Ontario’s[17] demurrer to the first and second causes of action for failure to allege plaintiffs paid the challenged fees under protest;[18] and
• Hayward Coalition’s[19] demurrer to the first through third causes of action[20] and alternative motion to strike damages allegations for failure to comply with pay under protest and administrative refund procedures.
City of Whittier and City of Ventura have filed motions for joinder in City of Woodland’s demurrer, which are GRANTED.
The motion for joinder by City of Garden Grove and City of Tustin is DENIED, because these defendants did not submit judicially noticeable documents establishing that the arguments concerning pay under protest apply to them.
A. Procedures Governing Tax Refund Actions
As previously discussed, the Government Claims Act provides that claims for money or damages against local public entities are generally subject to the claim presentation requirements of the Act. (See McWilliams v. City of Long Beach (2013) 56 Cal.4th 613, 619 (McWilliams).) But a number of exceptions are stated in section 905 of the Government Code. “One of the exceptions in section 905 is for ‘[c]laims under the Revenue and Taxation Code or other statute prescribing procedures for the refund … of any tax … or any portion thereof ….’ (§ 905, subd. (a).)” (Ibid.)
In Ardon v. City of Los Angeles (2011) 52 Cal.4th 241 (Ardon), the California Supreme Court “held that claims for tax refunds against a local governmental entity, including class claims, are permitted by section 910 [of the Government Claims Act] ‘in the absence of a specific tax refund procedure set forth in an applicable governing claims statute.’ ” (McWilliams, supra, 56 Cal.4th at p. 619, quoting Ardon, supra, 52 Cal.4th at p. 253.) Among the various statutes setting forth a more specific tax refund procedure is section 5472 of the Health and Safety Code (Section 5472). (See McWilliams, supra, 56 Cal.4th at p. 621.)
Here, the moving defendants contend that Section 5472, rather than the Government Claims Act, governs the claims asserted against them in the first through third causes of action, and Plaintiffs did not comply with the procedure that section establishes.
B. Section 5472 and Los Altos Golf
Health & Safety Code section 5471 authorizes certain “entities”[21] to impose fees and charges for their “water, sanitation, storm drainage, or sewerage system[s]” through an ordinance or resolution approved by a two-thirds vote. (Health & Saf. Code, § 5471, subd. (a).)[22] Section 5472 establishes a “pay under protest” procedure for challenging such charges:
After fees … or other charges are fixed pursuant to this article, any person may pay such fees … or other charges under protest and bring an action against the city or city and county in the superior court to recover any money which the legislative body refuses to refund. Payments made and actions brought under this section, shall be made and brought in the manner provided for payment of taxes under protest and actions for refund thereof in Article 2, Chapter 5, Part 9, of Division 1 of the Revenue and Taxation Code, insofar as those provisions are applicable.
(Health & Saf. Code, § 5472.) The application of this section (in the context of sewer charges) was addressed by Los Altos Golf & Country Club v. County of Santa Clara (2008) 165 Cal.App.4th 198 (Los Altos Golf), which held:
[S]ection 5472 allows a person to pay the charges under protest and then bring an action to recover any amount the entity has refused to refund, in accordance with division 1, part 9, chapter 5, article 2 of the Revenue and Taxation Code (§ 5140 et seq.), which governs refund actions. The plain language of section 5472 thus contemplates payment under protest, followed by an action if the payer is unable to secure a refund.
(Los Altos Golf, supra, 165 Cal.App.4th at p. 205, emphasis original.)
The relevant portions of the Revenue and Taxation Code provide that “[t]he person who paid the tax … may bring an action only in the superior court … to recover a tax which the board of supervisors of the county or the city council of the city has refused to refund on a claim filed pursuant to Article 1 (commencing with Section 5096) of this chapter.” (Rev. & Tax. Code, § 5140.) Section 5096 provides for the refund of taxes “[e]rroneously or illegally collected” or “[i]llegally assessed or levied,” among other grounds. (Id., § 5096, subds. (b) & (c).) “An order for a refund … shall not be made, except on a claim” filed within specified timeframes and “[v]erified by the person who paid the tax ….” (Id., § 5097, subd. (a).) The claim must specify “(a) Whether the whole assessment is claimed to be void or, if only a part, what portion” and “(b) The grounds on which the claim is founded.” (Id., § 5097.02.) “No action shall be commenced or maintained under this article … unless a claim for refund has first been filed pursuant to Article 1 (commencing with Section 5096)” and “[n]o recovery shall be allowed in any refund action upon any ground not specified in the refund claim.” (Id., § 5142.)
C. Application of Section 5472
The moving defendants submit—and Plaintiffs do not dispute—that their challenged water rates were enacted through an ordinance or resolution approved by a two-thirds vote pursuant to Health & Safety Code section 5471.[23] They urge that, pursuant to Los Altos Golf, Plaintiffs were accordingly required to follow the pay under protest and claim procedure established by Section 5472 as to claims against these defendants.
On opposition, Plaintiffs argue that “[t]he ‘pay under protest’ refund requirements applicable to property taxes were repealed in 1976,” citing Los Altos. But Los Altos rejected the argument that the repeal of these provisions somehow nullified the “pay under protest” requirement found in Section 5472 itself:
Appellants finally argue that sections 5472 and 5056, which were adopted in 1949, “refer to a nonexistent procedure abandoned by the Legislature thirty years ago.” They observe that in 1976 the Legislature retracted the requirement that property taxes be paid under protest (Rev. & Tax. Code, div. 1, pt. 9, ch. 5, art. 2, former §§ 5136–5143) and allowed instead a written claim procedure as described in article 1, section 5097 of the Revenue and Taxation Code. In repealing the “pay under protest” requirement for property taxes, however, the Legislature did not choose to amend the sewer fee provisions of the Health and Safety Code.
Appellants argue that the applicable provisions are likely to mislead the average property owner. They assert that a “citizen reading section 5472 of the Health & Safety Code today would go to Article 2 of Chapter 9 of Division 1 of the Revenue & Taxation Code, begin reading at section 5140, and come to the obvious conclusion that the ‘manner provided for payment of taxes under protest and actions for refund thereof in Article 2, Chapter 5, Part 9 of Division 1 of the Revenue and Taxation Code’ refers to the written claim procedure set forth in that Article. To place the burden on a citizen to recognize that Article 2 of the Revenue & Taxation Code does not expressly contain a ‘payment under protest’ option, as it did in 1949, and that therefore she should locate an historical, pre-1976 version of that Article, is an unjust and unreasonable result.”
We disagree. The ordinary citizen need not engage in complex and burdensome research to follow the legislative intent. A property owner who wishes to challenge sewer fees will readily see that the governing provisions are set forth in the Health and Safety Code, which continues to require payment under protest. The referenced division 1, part 9, chapter 5, article 2 of the Revenue and Taxation Code describes the procedures for bringing an action in superior court to obtain a property tax refund, including the filing of a verified claim after making the payment to be refunded. Section 5472 directs the property owner to follow those procedures only “insofar as those provisions are applicable.”
We thus conclude that no intent to repeal section 5472 or section 5056 is apparent from the language of these statutes even when read in conjunction with the Revenue and Taxation Code provisions to which they expressly refer. If the Legislature … wishes to eliminate the “pay under protest” requirement for disputing sewer fees, it can amend the applicable laws in a way that makes clear its intent. However, because [Section 5472] continue[s] to require payment under protest, appellants’ action was foreclosed by their failure to follow the prescribed procedures. The trial court did not err in sustaining respondents’ demurrer without leave to amend.
(Los Altos Golf, supra, 165 Cal.App.4th at pp. 206–207.)
Plaintiffs’ only answer to Los Altos Golf’s specific rejection of their repeal argument is to point to the Supreme Court’s subsequent decision in Ardon. But Ardon did not overrule Los Altos Golf, or even address it. Rather, it affirmed that “a class claim by taxpayers for a tax refund against a local governmental entity is permissible under section 910 in the absence of a specific tax refund procedure set forth in an applicable governing claims statute.” (Ardon, supra, 52 Cal.4th at p. 251, italics added.) Here, the more specific procedure established by Section 5472 applies.
D. Equal Protection
Plaintiffs contend that if the Court does find Section 5472 applies to their claims, it violates equal protection. Their argument is based on Section 5472’s application only to certain “entities” that provide water, and not to others, for example “water agencies, provided the water agency is not authorized to acquire, construct, maintain, and operate sanitary sewers and sewerage systems.” As Defendants urge on reply, Plaintiffs submit no evidence to support their argument that such water agencies exist, nor do they allege an equal protection theory in the SAC.
“[A] plaintiff must allege facts demonstrating or excusing compliance with [a] claim presentation requirement” to avoid demurrer. (State of California v. Superior Court (2004) 32 Cal.4th 1234, 1243; see also Los Altos Golf, supra, 165 Cal.App.4th at p. 205 [demurrer properly sustained for failure to allege compliance with Section 5472].) Plaintiffs fail to do so here, and the Court will not evaluate their unpled equal protection argument at this time. If Plaintiffs wish to pursue this theory, they can file a motion for leave to amend proposing specific factual allegations to support it.
E. Requests for Non-Monetary Relief
Finally, the moving defendants contend that Plaintiffs’ claims for non-monetary relief are also foreclosed because Plaintiffs have an adequate remedy at law in the form of a refund action. In addressing this argument, the parties discuss a number of cases examining what one describes as the “three related procedural hurdles” of “pay first, litigate later,” exhaustion of administrative remedies, and adequate legal remedy. (Andal, supra, 137 Cal.App.4th at p. 90 (Andal).)[24]
It is difficult to tell how these three procedural hurdles interact with Plaintiffs’ claims for non-monetary relief because, as the Court previously observed, Plaintiff merely requests “declaratory relief, injunctive relief, and a writ of mandate” in general terms. (See, e.g., California Dept. of Tax & Fee Administration v. Superior Court (2020) 48 Cal.App.5th 922, 936 [“the applicability of [the] ‘pay first’ rule to declaratory relief claims depends on whether those claims have the ‘net result’ or ‘effect’ of adjudicating the plaintiff’s outstanding tax liability”].) It is also difficult to assess whether Section 5472 provides Plaintiffs with an adequate legal remedy vis-à-vis these undefined requests for non-monetary relief because the parties do not meaningfully address whether Section 5472 authorizes the type of constitutional challenge Plaintiffs presumably seek to bring here.
“The rule in this state is that injunctive and declaratory relief will not be granted where there is a plain, complete, speedy, and adequate remedy at law.” (Flying Dutchman Park, Inc. v. City and County of San Francisco (2001) 93 Cal.App.4th 1129, 1138 (Flying Dutchman).) “Any remedy that allows a taxpayer to challenge a tax already collected, and to press any constitutional claims he or she may have, has been found to constitute ‘ “a plain, speedy and efficient remedy” ’ barring equitable relief. (See, e.g., Rosewell v. LaSalle National Bank (1981) 450 U.S. 503, 514 …; County of Sacramento v. Assessment Appeals Bd. No. 2 (1973) 32 Cal. App. 3d 654, 672 … [procedure ‘allowing the taxpayer to pay the disputed tax under protest and to sue for refund’ is an adequate legal remedy barring equitable relief].)” (Ibid.)
However, Andal explains that
if a tax ordinance or law provides the taxpayer with no mechanism for a [particular] constitutional challenge …, then the exhaustion doctrine does not apply. (See Park ’N Fly [of San Francisco v. City of S. San Francisco (1987)] 188 Cal.App.3d [1201,] 1208–1209 [exhaustion doctrine inapplicable where tax ordinance provided no mechanism for challenging its essential validity or raising constitutional questions]; see also Howard Jarvis Taxpayers Assn. v. City of Roseville (2002) 97 Cal.App.4th 637, 639 … [to the extent the complaint there sought a judicial declaration of the legal validity of the local government fee, it did not involve an issue subject to determination through the administrative refund remedy available to plaintiffs and therefore exhaustion doctrine inapplicable].)
(Andal, supra, 137 Cal.App.4th at pp. 92–94 [explaining that ordinance at issue in Flying Dutchman “explicitly included administrative refund claims based on a violation of the United States or California Constitutions” and “provided the subsequent legal remedy of a refund lawsuit in court that encompassed a judicial determination of the validity of the tax”], internal citations and quotation marks omitted.)
In light of the undeveloped nature of Plaintiffs’ claims for non-monetary relief and the parties’ briefing on this issue, the Court will sustain the demurrers based on failure to pay under protest with leave to amend in this regard.
F. Conclusion
The City of Woodland’s demurrer to the first and second causes of action; the Cities of Napa, San Luis Obispo, and Santa Rosa’s demurer to the first through third causes of action; and the Cities of Hayward, Long Beach, Pasadena, Petaluma, Sacramento, and Tracy’s demur to the first and second causes of action are SUSTAINED WITH LEAVE TO AMEND the allegations concerning non-monetary relief only. This ruling also applies to City of Whittier and City of Ventura, who have joined in City of Woodland’s motion.
As previously stated, if Plaintiffs wish to amend their complaint in any other respect, they will need to file a motion for leave to do so. The parties shall meet and confer regarding whether Plaintiffs will file such a motion, and if so, an appropriate briefing schedule to resolve it. Plaintiffs shall have 30 days from the resolution of any motion for leave to amend, or from their filing of a notice that they will not move for further leave to amend, to amend their requests for non-monetary relief associated with the first through third causes of action as to the relevant defendants, and to otherwise conform their complaint to this order.
The Hayward Coalition’s alternative motion to strike Plaintiffs’ damages allegations is DENIED as MOOT.
The Court will prepare the order.
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LAW AND MOTION HEARING PROCEDURES
The Court rescinded, effective June 21, 2021, all prior general orders restricting courthouse access. Remote appearances for complex civil matters are still permitted, but are no longer mandatory. (See General Order Rescinding Portion of May 6, 2020 General Order Concerning Complex Civil Actions, available at
GeneralOrderRescindingPortionof050621GeneralOrderConcerningComplexCivilActions.pdf.) If a party gives notice that a tentative ruling will be contested, any party seeking to participate in the hearing remotely should contact CourtCall.
Public access to hearings is available on a listen-only line by calling 888-808-6929 (access code 2752612).
State and local rules prohibit recording of court proceedings without a court order. These rules apply while in court and also while participating in a hearing remotely or listening in on a public access line. No court order has been issued which would allow recording of any portion of this motion calendar.
The court does not provide court reporters for proceedings in the complex civil litigation departments. Any party wishing to retain a court reporter to report a hearing may do so in compliance with this Court’s October 13, 2020 Policy Regarding Privately Retained Court Reporters. The court reporter may participate remotely and need not be present in the courtroom.
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Case Name: Bonnie Kessner, et al. v. City of Santa Clara, et al.
Case No.: 20CV364054
On June 29, 2021, Plaintiffs requested, and the clerk entered, dismissal as to Defendant City of La Habra. La Habra filed a memorandum of costs on July 15, claiming a total of $1,119.15 in costs. Plaintiffs filed a motion to strike or tax costs on July 26. La Habra filed an opposition on November 24, and Plaintiffs filed a reply on December 2. The matter has now come on for hearing by the Court.
As discussed below, the Court DENIES Plaintiffs’ motion in its entirety.
I. LEGAL STANDARD
“Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” (Code Civ. Proc., § 1032, subd. (b).) Items explicitly allowed as costs are set forth in Code of Civil Procedure section 1033.5, subdivision (a).[25] Items expressly disallowed as costs are set forth in section 1033.5, subdivision (b). Other costs may be allowed or denied in the court’s discretion. (§ 1033.5, subd. (c)(4).) “Any award of costs shall be subject to the following: [¶] (1) Costs are allowable if incurred, whether or not paid. [¶] (2) Allowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation. [¶] (3) Allowable costs shall be reasonable in amount.” (§ 1033.5, subd. (c)(1)–(3).)
A party seeking costs need only submit a memorandum of costs with a statement by the attorney verifying that, to the best of his or her knowledge, the costs claimed are correct and were necessarily incurred in the case. (See Cal. Rules of Court, rule 3.1700(a)(1).) The party need not attach copies of bills, invoices, and so forth. (See Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1267 (Jones).) “[T]he verified memorandum of costs is prima facie evidence of their propriety, and the burden is on the party seeking to tax costs to show they were not reasonable or necessary.” (Id. at p. 1266.)
[T]he mere filing of a motion to tax costs may be a proper objection to an item, the necessity of which appears doubtful, or which does not appear to be proper on its face. However, [i]f the items appear to be proper charges the verified memorandum is prima facie evidence that the costs, expenses and services therein listed were necessarily incurred by the defendant, and the burden of showing that an item is not properly chargeable or is unreasonable is upon the [objecting party].
The court’s first determination, therefore, is whether the statute expressly allows the particular item, and whether it appears proper on its face. If so, the burden is on the objecting party to show them to be unnecessary or unreasonable.
(Nelson v. Anderson (1999) 72 Cal.App.4th 111, 131, internal citations and quotations omitted (Nelson).)
II. DISCUSSION
Plaintiffs contend that La Habra’s entire memorandum of costs should be struck because La Habra is represented by the same law firm (Colantuono, Highsmith & Whatley, or “CHW”), that represents over a dozen other defendants in this action, and its costs were either jointly incurred with these other defendants or were not incurred by La Habra at all. Alternatively, Plaintiffs move to strike each individual items of costs claimed by La Habra, largely on the same ground, but also on the ground that costs associated with the Case Anywhere service have been mischaracterized as mandatory fees for hosing electronic documents and should not be awarded.
A. Jointly Incurred Costs
In opposition to Plaintiffs’ motion, La Habra’s counsel declares that the claimed costs “include only those CHW incurred to represent the City” and “do not include costs CHW incurred for other clients and not the City of La Habra ….” (Decl. of Ryan Thomas Dunn, ¶ 9.) But he appears to acknowledge that these expenses may have been incurred for multiple clients, as a review of the cost memorandum itself suggests. (See id., ¶ 11 [“CHW has incurred certain expenses in this case for all or most of the clients it represents and other expenses for individual clients or small groups of clients…”].) In its opposition brief, La Habra asserts that “[s]hould the City prevail on this motion and Plaintiffs satisfy the costs award, its counsel cannot and will not claim these costs for any other defendant who might later prevail.”
“When a prevailing party has incurred costs jointly with one or more other parties who are not prevailing parties …, the judge must apportion the costs between the parties based on the reason the costs were incurred and whether they were reasonably necessary to the conduct of the litigation by the jointly represented party who prevailed.” (Charton v. Harkey (2016) 247 Cal.App.4th 730, 743–744 … (Charton).)
(Quiles v. Parent (2018) 28 Cal.App.5th 1000, 1014 (Quiles) [quotation marks and brackets omitted].)
“… Whether to award costs that were incurred by both the prevailing party and the nonprevailing party, and were reasonably necessary to the conduct of the litigation for both the prevailing and nonprevailing party, is left to the trial court’s sound discretion based on the totality of the circumstances. In allocating costs between jointly represented parties, however, the trial court may not make an across-the-board reduction based on the number of jointly represented parties because such an allocation fails to consider the necessity or reasonableness of the costs as required by Code of Civil Procedure section 1033.5, subdivision (c). Instead, when allocating costs between jointly represented parties, the court must examine the reason each cost was incurred, whether the cost was reasonably necessary to the conduct of the litigation on behalf of the prevailing party, and the reasonableness of the cost.” (Charton, supra, 247 Cal.App.4th at pp. 744–745, italics added.)
(Quiles, supra, 28 Cal.App.5th at pp. 1016–1017 [italics original, bracketed notations omitted].)
While Plaintiffs correctly note that Charton was decided in the post-trial context, Quiles subsequently explained that the trial court need not “wait to allocate costs between jointly represented parties until litigation has ended as to all of them.” (Quiles, supra, 28 Cal.App.5th at p. 1017.) “Instead, the trial court may determine the cost award for a prevailing party by examining the reason each cost was incurred, whether the cost was reasonably necessary to incur in the litigation, and the reasonableness of the amount of the cost incurred.” (Ibid. [where trial court was aware of this standard for allocating costs among multiple defendants, argument that costs award improperly included costs incurred jointly with parties with litigation still pending was without merit].)[26]
Based on its own review of the costs at issue, the Court finds no reason to doubt CHW’s representation that all of the claimed costs were actually incurred on La Habra’s behalf and were necessary to its defense. And it credits CHW’s assurances that it will not seek to recover these costs again on behalf of other defendants for whom they were jointly incurred. So the Court will not strike or tax any costs on the ground that they were not actually incurred by La Habra or were jointly incurred with other defendants.
B. Case Anywhere Fees
La Habra claims $139.20 in Case Anywhere fees as costs associated with court-ordered electronic document hosting. Plaintiffs correctly note that the Court merely authorized, and did not require, the parties to use this service in order to serve documents. (See March 2, 2021 order.)
But even assuming these costs are not expressly allowable as “[f]ees for the hosting of electronic documents if a court requires or orders a party to have documents hosted by an electronic filing service provider” (§ 1033.5, subd. (a)(15) ), nor are they expressly disallowed. The Court finds these costs were reasonably necessary to La Habra’s defense and are reasonable in amount, and exercises its discretion to award them. (See § 1033.5, subd. (c)(1)–(4).)
III. CONCLUSION
Plaintiffs’ motion to strike or tax the memorandum of costs filed by La Habra is DENIED in its entirety.
The Court will prepare the order.
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LAW AND MOTION HEARING PROCEDURES
The Court rescinded, effective June 21, 2021, all prior general orders restricting courthouse access. Remote appearances for complex civil matters are still permitted, but are no longer mandatory. (See General Order Rescinding Portion of May 6, 2020 General Order Concerning Complex Civil Actions, available at
GeneralOrderRescindingPortionof050621GeneralOrderConcerningComplexCivilActions.pdf.) If a party gives notice that a tentative ruling will be contested, any party seeking to participate in the hearing remotely should contact CourtCall.
Public access to hearings is available on a listen-only line by calling 888-808-6929 (access code 2752612).
State and local rules prohibit recording of court proceedings without a court order. These rules apply while in court and also while participating in a hearing remotely or listening in on a public access line. No court order has been issued which would allow recording of any portion of this motion calendar.
The court does not provide court reporters for proceedings in the complex civil litigation departments. Any party wishing to retain a court reporter to report a hearing may do so in compliance with this Court’s October 13, 2020 Policy Regarding Privately Retained Court Reporters. The court reporter may participate remotely and need not be present in the courtroom.
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Case Name:
Case No.:
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Case Name: Jennifer Richert v. Samaritan, LLC, et al.
Case No.: 17CV314186
This is an employment class action alleging wage statement violations by defendant Samaritan, LLC. Before the Court is Samaritan’s renewed motion for summary judgment/adjudication of each cause of action asserted by Plaintiff Jennifer Richert. Ms. Richert opposes Samaritan’s motion.
As discussed below, the Court DENIES Samaritan’s motion.
I. BACKGROUND
The Court denied Samaritan’s previous motion for summary judgment/adjudication in an order filed on April 21, 2021 (Order). The factual and procedural background to the action are summarized in more detail in that order and are not repeated here.
In denying summary judgment, the Court held that there were triable issues of material fact as to Samaritan’s violation of two provisions of Labor Code section 226 (Section 226): subdivision (a)(2), which requires wage statements to list the “total hours worked by the employee,” and subdivision (a)(9), which requires them to state “all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate.”
With regard to the first violation, the Court reasoned in part:
It is undisputed that the “Productv” line item on Ms. Richert’s wage statement accurately lists the total hours worked, whether some of the hours are overtime or subject to shift differential (or both). But how is an employee to know that “Productv” means “total hours worked”? The meaning of “Productv” (which isn’t even word) is not clear.
In response to Defendants’ argument that employees received training regarding what the “Productv” line meant, the Court cited authorities supporting its conclusion that employees must be able to “promptly and easily determine” the total hours worked “from the wage statement alone,” “without reference to other documents.” (See Oman v. Delta Air Lines, Inc. (2020) Cal.5th 762, 774 [Section 226 requires “a single comprehensive statement of pay”]).)
With regard to the second violation, the Court explained:
Looking at the sample wage statement provided by Samaritan and reproduced above, it is undisputed that the wage statement does not list the actual overtime hourly pay rate. Rather, the wage statement lists the overtime rate at the premium above the regular rate: 0.5 times the regular rate. That listed number is not the actual applicable hourly rate for overtime.
And the Court further reasoned that the hourly rate for overtime could not be easily calculated by employees because Samaritan’s wage statements do not list the regular rate of pay as a separate rate that could simply be added to the .5 overtime premium to yield the actual overtime rate. The Court recognized that “Section 226, subdivision (a)(9) doesn’t mention a ‘regular’ hourly rate. And it may be that a regular hourly rate need not be separately shown on a wage statement. But if it is not separately listed (thus permitting an easy calculation by the employee to determine the overtime hourly rate), then the employer must list the actual overtime hourly rate.”
In its renewed motion, Samaritan contends that two new authorities published after the Court’s order “squarely reject Plaintiff’s theories in the present case” and require the Court to revisit its prior ruling.
II. AUTHORITY FOR RENEWED MOTION
Code of Civil Procedure section 1008, subdivision (b) provides:
A party who originally made an application for an order which was refused in whole or part … may make a subsequent application for the same order upon new or different facts, circumstances, or law, in which case it shall be shown by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.
“The statutory provisions relating to motions for renewal (i.e., subsequent applications for the same order),” unlike those governing motions for reconsideration, “contain no requirement that a motion for renewal be made within” a particular time period. (Graham v. Hansen (1982) 128 Cal.App.3d 965, 970–971.) Similarly, subdivision (c) of section 1008 allows the Court to reconsider a prior order at any time if it determines that there has been a change of law that warrants reconsideration. (See Int’l Ins. Co. v. Superior Court (1998) 62 Cal.App.4th 784, 787 [denying petition for writ of mandate where trial court reconsidered summary adjudication ruling based on two newly published cases].)
And the summary judgment statute, Code of Civil Procedure section 437c, subdivision (f)(2) provides that “[a] party shall not move for summary judgment based on issues asserted in a prior motion for summary adjudication and denied by the court unless that party establishes, to the satisfaction of the court, newly discovered facts or circumstances or a change of law supporting the issues reasserted in the summary judgment motion.”
Here, Defendant contends that General Atomics v. Superior Court (2021) 64 Cal.App.5th 987 (General Atomics) and Magadia v. Wal-Mart Assocs. (9th Cir. 2021) 999 F.3d 668 (Magadia) constitute new law that requires the Court to hear, and grant, its renewed motion. So the Court will examine how these cases impact its previous ruling.[27]
III. GENERAL ATOMICS
General Atomics addressed an alleged violation of subdivision (a)(9) of Section 226. The Court of Appeal held that the trial court erred by finding a violation. It explained:
The wage statements show the applicable hourly rates in effect and the corresponding number of hours worked at each rate. In the wage statements provided by General Atomics, the applicable hourly rates are (1) the standard hourly rate determined by contract or other agreement between the employee and the employer and (2) the overtime premium hourly rate, determined by statute, that must be added to the employee’s standard wages to compensate the employee for working overtime. These rates are plainly shown, along with the hours worked at each rate.
(General Atomics, supra, 64 Cal.App.5th at p. 991.)
A. Subdivision (a)(9)
Admittedly, these and similar statements in General Atomics arguably conflict with some of the Court’s statements in its prior order—at least with regard to the subdivision (a)(9) violation. Still, the wage statements addressed by General Atomics were far less confusing than those at issue here, because unlike Samaritan’s wage statements, they listed the total hours worked so that it was apparent that the overtime premium hours were a subset of the hours already paid at the applicable straight-time rate:
|Table 1A |
|Description |Hours |Rate |Gross Pay |
|Straight-time |45 |$25.00 |$1,125.00 |
|Overtime |5 |$12.50 |$62.50 |
|Total Hours Worked: 45 |Total Pay: $1,187.50 |
(General Atomics, supra, 64 Cal.App.5th at p. 994.) Notably, General Atomics distinguished McKenzie v. Federal Express Corp. (C.D. Cal. 2011) 765 F.Supp.2d 1222 (McKenzie) on this basis:
McKenzie considered a wage statement that separated hourly wages and hours worked into three categories: standard (nonovertime) hours, overtime hours, and overtime premium hours. (McKenzie, supra, 765 F.Supp.2d at p. 1226.) Among other things, the federal district court found that this format did not provide “an accurate overtime rate because instead of multiplying the regular rate of pay by one and one-half, the pay stubs provide two overtime rate categories and they each provide corresponding rates that are either the same or half of the regular rate.” (Id. at p. 1231.) But, in McKenzie, the wage statement did not list the total hours worked. (Id. at p. 1229.) It was therefore unclear how the two overtime entries related to the standard (nonovertime) entry and to one another. (Ibid.) Here, by contrast, the wage statements provided by General Atomics state the total hours worked. It is therefore apparent that the “overtime” hourly rate represents compensation in addition to the standard contractual compensation.
(General Atomics, supra, 64 Cal.App.5th at p. 999.) Indeed, General Atomics repeatedly emphasized that “because the wage statements provided by General Atomics separately state the total hours worked, it is apparent that the overtime rate and hours listed represent compensation in addition to the employee’s standard compensation.” (Id. at pp. 1000–1001; see also id. at p. 1001, fn. 8 [emphasizing the same point].)[28]
Because the wage statements addressed by General Atomics separately and clearly listed the total hours worked and the General Atomics court repeatedly emphasized this, the Court is inclined to view the circumstances here as distinguishable. (See General Atomics, supra, 64 Cal.App.5th at p. 998, fn. 6 [“It is sufficient to resolve this proceeding to conclude that the wage statements provided by General Atomics comply with the statute. We need not decide whether wage statements in other formats would also comply.”].) Indeed, the Court’s order expressly recognized that “reporting overtime hours at their premium above the regular rate does not necessarily violate Section 226, subdivision (a)(9), at least in some circumstances.” (Order at p. 11, fn. 3.)
But the Court ultimately need not resolve the subdivision (a)(9) issue at this time, because General Atomics did not address the separate violation supporting the denial of summary adjudication here: the subdivision (a)(2) violation resulting from Samaritan’s failure to clearly list the total hours worked in each pay period.
B. Subdivision (a)(2)
Samaritan contends that General Atomics somehow holds that a reasonable person would know that the “Productv” entry on its wage statements signifies total hours worked. Its argument is based on General Atomics’s favorable discussion of a Division of Labor Standards Enforcement (DLSE) exemplar pay stub previously considered by the Court, which Samaritan again relies on. But unlike Samaritan’s wage statements, the DLSE exemplar clearly and separately lists the “Total” hours worked, in addition to listing “Productive” and “Non-productive” hours in a much clearer manner. (See Appendix of Evidence ISO Mot., Ex. F.)[29] And again, General Atomics repeatedly emphasized that the wage statements at issue there separately listed the total hours worked as such. Samaritan’s wage statements do not do this, and that remains a separate violation that requires the Court to deny summary adjudication.
Finally, although identifies no new authority on this point, Samaritan again takes issue with the Court’s reasoning in finding triable issues of fact concerning injury under Section 226. Samaritan acknowledges that the Court found a “deemed injury” as specifically provided by the statute, but contends that it only made this finding with regard to subdivision (a)(9) and not as to subdivision (a)(2). But the “deemed injury” provision of Section 226 applies to violations of subdivision (a)(2) just as it does to violations of subdivision (a)(9). (See Lab. Code, § 226, subd. (e)(2)(B)(i) [“[a]n employee is deemed to suffer injury for purposes of this subdivision if the employer fails to provide accurate and complete information as required by any one or more of items (1) to (9), inclusive, of subdivision (a) and the employee cannot promptly and easily determine from the wage statement alone … any of the … information required to be provided on the itemized wage statement pursuant to item[] (2) …”].) The Court’s prior order explained why the total hours worked cannot be “promptly and easily determine[d] from the wage statement alone” here, and General Atomics does not impact that holding or the standard for finding an injury under Section 226.
C. Conclusion
For all these reasons, General Atomics does not warrant reconsideration of the Court’s prior order.
IV. MAGADIA
Magadia also addressed an asserted violation of subdivision (a)(9) and not subdivision (a)(2). And it simply does not shed light on the issues here. In Magadia,
Walmart paid its employees every two weeks and provided a paystub at the end of each semimonthly pay period. At the end of a quarter (encompassing six pay periods), Walmart awarded a MyShare bonus to its employees based on performance, sales, profits, and store standards from the entire quarter. California law considers that bonus part of the employees’ base rate of pay, which in turn requires Walmart to make an after-the-fact adjustment to overtime pay. See Cal. Lab. Code § 510 (requiring employers to pay 1.5 times the “regular rate of pay” for overtime). To do so, Walmart must retroactively calculate the difference between the employees’ overtime pay rate over the quarter and the employees’ overtime rate as if the MyShare bonus had been paid as part of the base rate of pay. After calculating the required overtime pay adjustment, Walmart reported both the MyShare bonus and the adjusted overtime pay as lump sums on the wage statements at the end of each quarter.
(Magadia, supra, 999 F.3d at pp. 680–681.)
Under these wholly distinct circumstances, Magadia reasoned that “the MyShare overtime adjustment is no ordinary overtime pay with a corresponding hourly rate,” but is rather “a non-discretionary, after-the-fact adjustment to compensation based on the overtime hours worked and the average of overtime rates over a quarter”: in other words, “a fictional hourly rate,” at most. (Magadia, supra, 999 F.3d at p. 681, internal citations and quotation marks omitted.) Magadia did not hold that the rate at which overtime is normally paid for hours actually worked in a given pay period is a “fictional hourly rate,” and it does not impact the Court’s prior ruling.
V. CONCLUSION
In sum, Magadia has no impact on the Court’s prior ruling, and General Atomics has no impact on the ruling insofar as it is based on subdivision (a)(2) of Section 226. The subdivision (a)(2) violation still requires that summary judgment be denied. The Court accordingly DENIES Samaritan’s motion.[30]
The Court will prepare the order.
***
LAW AND MOTION HEARING PROCEDURES
The Court rescinded, effective June 21, 2021, all prior general orders restricting courthouse access. Remote appearances for complex civil matters are still permitted, but are no longer mandatory. (See General Order Rescinding Portion of May 6, 2020 General Order Concerning Complex Civil Actions, available at
RescindingPortionof050621GeneralOrderConcerningComplexCivilActions.pdf.) If a party gives notice that a tentative ruling will be contested, any party seeking to participate in the hearing remotely should contact CourtCall.
Public access to hearings is available on a listen-only line by calling 888-808-6929 (access code 2752612).
State and local rules prohibit recording of court proceedings without a court order. These rules apply while in court and also while participating in a hearing remotely or listening in on a public access line. No court order has been issued which would allow recording of any portion of this motion calendar.
The court does not provide court reporters for proceedings in the complex civil litigation departments. Any party wishing to retain a court reporter to report a hearing may do so in compliance with this Court’s October 13, 2020 Policy Regarding Privately Retained Court Reporters. The court reporter may participate remotely and need not be present in the courtroom.
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Case Name: Seth Rogers v. iTy Labs Corp., et al.
Case No.: 17CV306546
Defendant Innogy SE moves for reconsideration or “clarification” of the Court’s November 5, 2021 Proposed Order, which became its final order on November 12 (November 12 Order). The November 12 Order denied Innogy SE’s motion to quash for lack of personal jurisdiction, consistent with the tentative ruling issued on September 14. Innogy SE contends that “Plaintiff s filing of his Second Amended Complaint (‘SAC’) prior to the Court’s [final] ruling on the MTQ directed at his First Amended and Supplemental Complaint (‘FASC’) and the Court not sustaining Innogy SE’s objection constituted new facts and different circumstances, which mooted” the motion to quash. Plaintiff opposes the motion for reconsideration.
As an initial matter, the Court and the parties anticipated that the SAC would be filed before the Court issued its final order on the motion to quash: indeed, the Court directed the parties to provide supplemental briefing addressing “how Innogy SE’s actions, as detailed in the Court’s September 2021 tentative ruling …, are related enough—or are not related enough—to each of Mr. Rogers’s claims against Innogy SE in the newly-amended [SAC] so as to support—or not support—the exercise of personal jurisdiction….” (October 4, 2021 Order Requesting Further Supplemental Briefing on Innogy SE’s Motion to Quash (October 4 Order).) The Court received and considered this supplemental briefing before issuing its November 12 Order, which analyzed personal jurisdiction as to Innogy SE based on the SAC. Innogy SE could have raised its mootness argument in the supplemental briefing, but did not. As urged by Plaintiff, the filing of the SAC and its asserted mooting of the motion to quash are not new or different facts, circumstances, or law that would justify reconsideration.[31] (See Code Civ. Proc., § 1008.)
In any event, the Court disagrees with Innogy SE on the merits. Innogy SE provides authorities for the general proposition that “the filing of an amended complaint moots a motion directed to a prior complaint.” But none addresses the impact of an amended complaint on a motion attacking personal jurisdiction that has already been argued and submitted—and which is more focused on evidence than the allegations of the operative pleading in the first place. The Court views the impact of the amendments to the SAC on its analysis in the November 12 Order as minor at best, and Innogy SE’s own supplemental brief is consistent. (See Innogy SE’s Supplemental Brief, p. 5 [stating that the FASC and SAC similarly “allege a majority group was formed in September 2017, but the facts put forth by Rogers and addressed in the [Court’s tentative ruling] relate to actions that occurred in early 2017 and so cannot support a claim that the later-formed majority group breached its fiduciary duties”], p. 6 [stating that the allegations added to the core claims (Claims 10 and 11) “do not move the needle” in view of the tentative ruling’s findings].) More importantly, the Court received and considered supplemental briefing about the impact of the SAC, so the operative pleading was addressed and there was no prejudice to Innogy SE.
A court has the inherent authority to manage its docket efficiently towards the ends of justice. (See OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 141.) Here, the Court appropriately exercised this authority by directing the parties to address the SAC in supplemental briefing. This avoided the need to re-litigate a motion concerning the threshold issue of the Court’s personal jurisdiction over Innogy SE, which first came on for hearing well over a year ago in a case that has been pending since 2017. Innogy SE was in no way prejudiced by this approach.
For all these reasons, the Court DENIES Innogy SE’s motion for reconsideration.
The Court will prepare the order.
***
LAW AND MOTION HEARING PROCEDURES
The Court rescinded, effective June 21, 2021, all prior general orders restricting courthouse access. Remote appearances for complex civil matters are still permitted, but are no longer mandatory. (See General Order Rescinding Portion of May 6, 2020 General Order Concerning Complex Civil Actions, available at
GeneralOrderRescindingPortionof050621GeneralOrderConcerningComplexCivilActions.pdf.) If a party gives notice that a tentative ruling will be contested, any party seeking to participate in the hearing remotely should contact CourtCall.
Public access to hearings is available on a listen-only line by calling 888-808-6929 (access code 2752612).
State and local rules prohibit recording of court proceedings without a court order. These rules apply while in court and also while participating in a hearing remotely or listening in on a public access line. No court order has been issued which would allow recording of any portion of this motion calendar.
The court does not provide court reporters for proceedings in the complex civil litigation departments. Any party wishing to retain a court reporter to report a hearing may do so in compliance with this Court’s October 13, 2020 Policy Regarding Privately Retained Court Reporters. The court reporter may participate remotely and need not be present in the courtroom.
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[1] San Diego County Water Authority is named as a respondent only, but the Court includes it among the “Defendants” for simplicity’s sake.
[2] The Carlsbad Coalition includes a redline comparison of the FAC and SAC as Exhibit O to their Request for Judicial Notice, and the Court GRANTS judicial notice of this comparison. (Evid. Code, § 452, subds. (d) and (h).) The changes are summarized in more detail at pages 18–19 of Carlsbad Coalitions’ brief.
[3] The “San Diego Defendants” are Fallbrook Public Utility District, Helix Water District, Padre Dam Municipal Water District, Valley Center Municipal Water District, and Vallecitos Water District.
[4] The “Carlsbad Coalition” is comprised of Carlsbad Municipal Water District, El Toro Water District, City of Escondido, Goleta Water District, City of La Habra, City of Madera, Nevada Irrigation District, City of Oceanside, City of Oxnard, Placer County Water Agency, City of Santa Clara, City of Santa Cruz, City of Torrance, City of Vacaville, and City of Vallejo.
[5] The “Hayward Coalition” is comprised of Cities of Hayward, Long Beach, Napa, Pasadena, Petaluma, Sacramento, San Luis Obispo, Santa Monica, Santa Rosa, and Tracy.
[6] The May Order explained why compulsory joinder does not apply here, and Plaintiffs no longer appear to contend that it does. Nor do Plaintiffs contend that permissive joinder is appropriate because their claims are “adverse to the defendant[s] in the property or controversy which is the subject of the action.” (Code Civ. Proc., § 378, subd. (a)(2); § 379, subd. (a)(2).)
[7] In 2006, when the California Supreme Court held that Proposition 218 applies to ongoing water service, M1 methodology did not categorize public fire water service as a ratepayer cost of service. (SAC, ¶ 194.)
[8] Plaintiffs seem to argue that something about their claims for declaratory relief is different in this respect. But they do not explain how plaintiffs who are retail water customers of one defendant would be entitled to declaratory relief against other defendants who they do not receive water from.
[9] Specifically, the Court GRANTS judicial notice of the ordinances and resolutions submitted by City of San Jose (Exs. E & F to City of San Jose’s request) and the San Diego Defendants (Exs. 1–5 to the San Diego Defendants’ request), as well as the cost of service studies, meeting minutes, and resolutions submitted by Carlsbad Coalition (Exs. Q–U to the Carlsbad Coalition’s request). (Evid. Code, § 452 (b) & (h).) Among other things, these documents show that cost of service studies consider multiple cost inputs and rates do not always correspond to cost of service studies (see, e.g., Exs. S & T to Carlsbad Coalition’s request, reflecting Nevada Irrigation District’s adoption of rates lower than those in cost-of-service study.) Plaintiffs do not oppose these requests for judicial notice.
[10] As summarized in Carlsbad Coalition’s brief at pages 42–43, the SAC alleges San Francisco has an apparently unique, physically separate water system for use in
firefighting and charges its users “a fixed per meter EFWS subsidy” to fund it (SAC, ¶¶ 173–176); certain defendants—but apparently not others—subsidize water for
agricultural users (id., ¶¶ 225–227); certain defendants who appoint members to the SDCWA board “double-charge for retail water connections” (id., ¶¶ 182–184); and certain defendants use a “budget-based, tiered” methodology that allegedly results in “a discount for wealthier ratepayers” (id., ¶¶ 231–233).
[11] The Court notes that even if Lakeside’s demurrer was not moot, it would properly be denied without prejudice because it is addressed to the “entire SAC” (Lakeside’s Not. Of Demurrer, p. 2), but attacks only certain portions of the SAC. (See Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1167 [a demurrer is not properly sustained as to a portion of a cause of action].) The Court therefore also DENIES without prejudice the following defendants’ motions to join in Lakeside’s motion: Alameda County Water District; City of Whittier; City of Garden Grove and City of Tustin; and City of San Buenaventura (City of Ventura).
[12] The Court notes but need not address Plaintiff’s opposition to Rainbow Municipal Water District’s motion for joinder based on its apparent failure to timely serve its moving papers.
[13] IRWD’s request for judicial notice of the documents discussed in this section is GRANTED. (Evid. Code, § 452, subds. (c) & (h).)
[14] IRWD and other defendants also demur to the fourth cause of action on the ground that the Court did not grant Plaintiffs leave to add new claims to the case, only to address the joinder issues discussed above. The Court need not address this argument in light of its ruling concerning the Government Claims Act. But it does note that, while the Scheduling Order authorized Plaintiffs to include in the SAC “new information learned by plaintiffs since the filing of the [FAC],” the existence of budget based tiered water rates would not appear to be new information. In any event, Plaintiffs must file a noticed motion if they seek leave to add any new claims to this action in the future.
[15] The Court GRANTS judicial notice of the claims submitted to Eastern Municipal Water District, City of Chino, and Palmdale Water District, which are materially identical to the November 29, 2019 claims submitted to IRWD. (Evid. Code, § 452, subds. (c) & (h).)
[16] Nor can Plaintiffs’ notice be deemed to substantially comply with the claim presentation requirement as to the fourth cause of action. Again, Donohue rejected a similar argument:
If plaintiff’s claim had asserted that the accident was caused by defendant’s negligence in failing to control and supervise the motorist in the course of his driving examination, defendant might have concluded that the claim had merit and might have settled without the necessity of a lawsuit. By presenting a claim wherein defendant’s liability was predicated solely on its negligence in allowing an uninsured motorist to take a driving test, plaintiff thwarted the purpose of the claims act and forced defendant to defend a lawsuit based on an entirely different state of facts. Accordingly, there is no basis for application of the doctrine of substantial compliance in the present case.
(Donohue, supra, 178 Cal.App.3d at p. 804.)
[17] Since the Court granted Ontario’s motion to join in the demurrer filed by County of Los Angeles, City of Downey, and City of Pomona and sustained that demurrer without leave to amend, it deems this motion MOOT as to Ontario.
[18] Woodland and Ontario also raise issues concerning the class allegations associated with these claims, but acknowledge that this is a Phase III issue. The Court will not address arguments related to Plaintiffs’ class allegations at this time.
[19] Hayward Coalition explains that the Cities of Anaheim and Santa Monica are normally part of the coalition, but the timing of their water rate resolutions raises potentially complicated questions about whether Health and Safety Code section 5472 applies to the claims against them. They believe these issues are better addressed in later proceedings, such as a motion for summary adjudication, and so do not join in Hayward Coalition’s demurrer.
[20] Specifically, the Cities of Napa, San Luis Obispo, and Santa Rosa demur to the first through third causes of action, while the Cities of Hayward, Long Beach, Pasadena, Petaluma, Sacramento, and Tracy demur to the first and second causes of action.
[21] Specifically, the statute applies to “counties, cities and counties, cities, sanitary districts, county sanitation districts, county service areas, sewer maintenance districts, and other public corporations and districts authorized to acquire, construct, maintain and operate sanitary sewers and sewerage systems.” (Health & Saf. Code, § 5470, subd. (e).)
[22] Subdivision (a) reads in full:
In addition to the powers granted in the principal act, any entity shall have power, by an ordinance or resolution approved by a two-thirds vote of the members of the legislative body thereof, to prescribe, revise and collect, fees, tolls, rates, rentals, or other charges for services and facilities furnished by it, either within or without its territorial limits, in connection with its water, sanitation, storm drainage, or sewerage system.
[23] The Court GRANTS judicial notice of the relevant ordinances and resolutions and associated meeting minutes and agendas (Evid. Code, § 452, subds. (c) & (h)), specifically: Exhibits A–C to City of Woodland’s Request for Judicial Notice (as to City of Woodland); Exhibits A–C (as to City of Hayward), D–F (as to City of Long Beach), G (as to City of Napa), H–J (as to City of Pasadena), K (as to City of Petaluma), L (as to City of Sacramento), M–N as to City of San Luis Obispo, O–P (as to City of Santa Rosa), and Q–R (as to City of Tracy) to the Hayward Coalition’s Request for Judicial Notice; Exhibits 1–2 to City of Whittier’s Request for Judicial Notice; and Exhibits A–C to City of Ventura’s Request for Judicial Notice.
[24] The “pay first, litigate later” rule “requires a tax challenger to first pay the tax before litigating the tax’s validity.” (Andal, supra, 137 Cal.App.4th at p. 90, citing Cal. Const., art. XIII, § 32 and Flying Dutchman Park, Inc. v. City and County of San Francisco (2001) 93 Cal.App.4th 1129.)
Under the doctrine of exhaustion of administrative remedies, when an administrative tribunal has been created to adjudicate an issue, the matter must be presented there before any resort is made to the courts. Conversely, where no administrative remedy is provided for the particular issues raised, recourse to the administrative agency is not required before initiation of court action.
As for the adequacy of legal remedy, declaratory relief, which plaintiffs seek here, is in the nature of equitable relief, and equitable relief will not be granted if there is a plain, complete, speedy, and adequate remedy at law.
These two doctrines—exhaustion of administrative remedy and adequacy of legal remedy—are related and sometimes overlap because if an adequate administrative remedy is provided, then an adequate legal remedy may be deemed provided as well; also, an administrative remedial scheme may envision a court process following the administrative process.
(Andal, supra, 137 Cal.App.4th at p. 91, citations omitted.)
[25] Unless otherwise indicated, all future statutory references are to this section.
[26] Fennessy v. Deleuw-Cather Corp. (1990) 218 Cal.App.3d 1192 (Fennessy), on which Plaintiffs rely, is in accord, as addressed by Quiles. (See Fennessy, supra, 218 Cal.App.3d at p. 1196 [holding that “where a prevailing party incurs costs jointly with one or more parties who remain in the litigation, during the pendency of the litigation that party may recover only costs actually incurred by a party or in its behalf in prosecuting or defending the case”], italics original; Quiles, supra, 28 Cal.App.5th at p. 1017 [“[n]either Fennessy nor Charton holds that the trial court must wait to allocate costs between jointly represented parties until litigation has ended as to all of them”].)
[27] The Court GRANTS Samaritan’s request for judicial notice of the recent procedural history of these cases, submitted with its reply brief. (Evid. Code, § 452, subds. (c) & (d).)
[28] General Atomics disapproved of Wright v. Renzenberger, Inc. (C.D.Cal. Mar. 8, 2018, No. CV 13-6642 FMO (AGRx)) 2018 U.S.Dist.LEXIS 234702 (Wright), which this Court cited with approval. It is unclear whether the wage statements in Wright listed the total hours worked.
[29] The Court again GRANTS judicial notice of this and other DLSE and Department of Labor publications submitted by Samaritan. (Evid. Code, § 452, subds. (c), (h); Morgan v. United Retail Inc. (2010) 186 Cal.App.4th 1136, 1147 [considering DLSE exemplar wage statement; “[a]lthough not binding on a court, the DLSE’s construction of a statute, whether embodied in a formal rule or less formal representation, is entitled to consideration and respect”].)
The Court also GRANTS judicial notice of DLSE opinion letters submitted by Plaintiff, and of a copy of the wage statement at issue in General Atomics, which was filed with the Superior Court in that case. (Evid. Code, § 452, subds. (c), (d), (h).)
[30] The Court will not rule on Samaritan’s objections to evidence since they are immaterial to its disposition of Samaritan’s motion. (See Code Civ. Proc., § 437c, subd. (q) [“In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion. Objections to evidence that are not ruled on for purposes of the motion shall be preserved for appellate review.”].)
[31] This conclusion is not impacted by Innogy SE’s argument that the amendments to the SAC exceeded the scope of the leave to amend that the Court granted in the context of another party’s motion (FEV US LLC’s motion for summary adjudication/motion for judgment on the pleadings). The Court and the parties addressed the SAC that was filed, and while Innogy SE asserted that the amendments were improper in a footnote to its supplemental brief, it went on to address them in substance without arguing that they mooted the motion to quash. This footnote was not framed as an “objection,” did not request any action by the Court, and did not state the impact that Innogy SE believed the assertedly improper amendment had. Ultimately, the scope of the amendments to the SAC is not a new fact or circumstance. Nor is the fact that the Court ruled on the motion to quash in light of the SAC that was filed—as it clearly stated in its October 4 Order that it would do.
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