People of the State of California vs. City of Los Angeles

Here, the District moves for summary adjudication as to affirmative defenses #1-18 alleged in the answer filed by Defendants City of Los Angeles; Department of Water and Power of the City of Los Angeles; Board of Water and Power Commissioners of the City of Los Angeles; and Los Angeles City Council (collectively, the “City”). (ROA #209 [Mot.], pp. 2- 8.)

In its opposition, the City withdraws its affirmative defenses #1, 10, and 18 as “unnecessary.” (ROA #227 [Opp.], p. 25.) Accordingly, for the sake of clarifying the pleadings, the Court GRANTS IN PART the District’s

motion to strike and STRIKES the City’s affirmative defenses #1, 10, and 18 from the City’s answer (ROA #72) as “irrelevant” matter under CCP section 436, subdivision (a).

The District’s motion for summary adjudication is primarily based upon the legal argument that “[u]nder Health & Safety Code Section 42316, the City’s challenges to the reasonableness or validity of District Order 210701- 06 (the ‘2021 District Order’) must be brought by an administrative appeal to the California Air Resources Board (‘CARB’), and then by a petition for writ of mandate to a Superior Court. Those challenges may not be raised in the first instance by an affirmative defense and litigated in this Superior Court.” (Mot., p. 2; see also id. at p. 15.)

In short, the District’s argument is that the City may not now challenge the reasonableness or validity of the 2021 District Order because the City failed to exhaust its administrative remedies by appealing that order to CARB in the first instance. (See id. at p. 30, citing, inter alia, Los Globos Corp. v. City of Los Angeles (2017) 17 Cal.App.5th 627, 632.)

Health and Safety Code section 42316 (“Section 42316”), subdivision (a) provides, in relevant part, that the District “may require the City of Los Angeles to undertake reasonable measures . . . to mitigate the air quality impacts of its activities . . . .” Section 42316, subdivision (b) provides, in relevant part, that “the city may appeal any measures . . . imposed by the district to the state board within 30 days of the adoption of the measures . . . . The state board . . . shall conduct an independent hearing on the validity of the measures . . . which are the subject of the appeal.”

“The rule of exhaustion of administrative remedies is well established in California jurisprudence. In brief, the rule is that where an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act. The rule is not a matter of judicial discretion, but is a fundamental rule of procedure binding on all courts. Exhaustion of administrative remedies is a jurisdictional prerequisite to resort to the courts.” (Los Globos, supra, 17 Cal.App.5th at p. 632, internal quotes, brackets, ellipses, & citations omitted.)

“The exhaustion requirement also applies to defenses as well as to claims for affirmative relief.” (Coachella Valley Mosquito & Vector Control Dist. v. Cal. Public Employment Relations Bd. (2005) 35 Cal.4th 1072, 1080; see also South Coast Regional Com. v. Gordon (1977) 18 Cal.3d 832 [rejecting argument that doctrine of exhaustion of administrative remedies does not apply simply because a defendant “attempts to raise by way of defense a matter which is initially committed to the commission’s determination, and which he has not presented to that agency”; after all, if defendants “were allowed to resort to the courts in the first instance, it would not only frustrate one of the underlying purposes of the exhaustion doctrine, i.e., the need for judicial intervention might be obviated by the outcome of the administrative proceedings, but would also reward [persons] who made no attempt to fulfill the requirements of the act and the regulations, while penalizing those who made a good faith effort to comply”].)

Here, it is undisputed that the 2021 District Order was adopted on July 1, 2021, and the City did not file an appeal of the 2021 District Order to CARB in accordance with Section 42316. (ROA #229 [City’s Resp. to Dist.’s Separate St. of Undisputed Material Facts (“SSUMF”)], ¶¶ 26-27.) Accordingly, the District has satisfied its initial burden of proving that the City failed to exhaust its administrative remedies such that the City may not now challenge the validity of the 2021 District Order.

The City’s opposition does not rebut the District’s argument regarding the City’s failure to exhaust its administrative remedies as to the 2021 District Order. (See Opp., passim.) Instead, the City’s opposition focuses on the District’s “alternative” argument that “if the City seeks to litigate the Notice of Violation for the City’s refusal to comply with the 2021 District Order, the City litigated and lost these arguments in its administrative appeal to CARB, and before the Los Angeles County Superior Court.

The City cannot relitigate the Notice of Violation issues as affirmative defenses in this case.” (Mot., pp. 2, 16, emphases added.) The City characterizes this alternative argument as one based on the principles of collateral estoppel, and the City argues that collateral estoppel does not apply to bar the City’s affirmative defenses. (Opp. at pp. 15-19.) But these arguments do not address the District’s primary argument regarding the City’s failure to exhaust its administrative remedies by appealing the 2021 District order to CARB in the first instance.

At most, the City contends on pages 21-22 of its opposition that “District staff told the District Board and the City that there was no deadline for implementation of the 2021 Order (SSUF 65), and the District acted as if the 2021 Order was issued under Stipulated Judgment. (SSUF 70-71.) The City relied on both representations in deciding how to respond to the 2021 Order and seeking review through the Stipulated Judgment [in] the Sacramento Superior Court.” (Opp. at pp. 21-22.) But the City does not articulate any argument or cite to any legal authorities to contend, for example, how these facts might excuse the City’s failure to seek CARB’s administrative review of the validity of the 2021 District Order.

It is not the Court’s function to “act as counsel for [a party] and furnish a legal argument’ for that party. (Niko v. Foreman (2006) 144 Cal.App.4th 344, 368; see also Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 [when a party “fails to raise a point, or asserts it but fails to support it with reasoned argument and citations to authority,” the point is “waived”]; Sprague v. Equifax, Inc. (1985) 166 Cal.App.3d 1012, 1050 [court is entitled to “the assistance of counsel. Accordingly every brief should contain a legal argument with citation of authorities on the points made.

If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration.”].)

Accordingly, the City has failed to oppose or rebut the District’s showing that the City failed to exhaust its administrative remedies such that the City may not now challenge the reasonableness or validity of the 2021 District Order.

The Court finds that the following affirmative defenses raised in the City’s answer are aimed solely at challenging the validity of the 2021 District Order:

• 2 - Collateral Estoppel • 3 - Equitable Estoppel • 4 - Order Facially Invalid • 5 - Procedural Due Process – Invalid Order Due to Lack of Notice – U.S. Constitution, Fifth and Fourteenth Amendments; California Constitution Article 1, § 7 • 6 - Procedural Due Process – Invalid Order Due to Lack of Hearing – U.S. Constitution, Fifth and Fourteenth Amendments; California Constitution Article 1, § 7 • 7 - Ultra Vires • 8 - District Order Void For Failure to Comply with the 2016 SIP and District Rule 433 • 9 - District Order Void for Failure to Obtain Concurrence from all of the Owens Lake Tribes • 11 - Failure to Allege Facts Sufficient to State A Cause of Action

Therefore, the Court GRANTS IN PART the District’s motion for summary adjudication as to affirmative defenses #2-9 and 11.

As to affirmative defenses #12-16, the Court finds that these affirmative defenses are not aimed at or not solely aimed at challenging the validity of the 2021 District Order, but instead, are aimed, at least in part, on challenging the amount of civil penalties to be assessed under Health and Safety Code section 42403. As the District acknowledges, “[t]his Motion is to strike these purported affirmative defenses to liability and not to address the penalty factors,” and thus, the appropriate “penalty” amount is “not at issue in this Motion, which addresses the City’s affirmative defenses to its strict liability, not the amount of its penalty.” (ROA #240 [Reply], at p. 8.)

Therefore, the District has failed to carry its burden of proving that there is no merit to affirmative defenses #12-16 such that the District is entitled to summary adjudication by completely disposing of these affirmative defenses. Accordingly, the Court DENIES IN PART the District’s motion as to affirmative defenses #12-16.

Finally, as to affirmative defense #17 relating to the District’s entitlement to an award of attorneys’ fees in this action, the District’s motion initially contends that this affirmative defense is “barred by the Stipulated Judgment against the City in Kern County Superior Court that bars the City from any challenge in any administrative or judicial forum under any law, statute, or legal theory whatsoever to the District’s right to assess these attorney fees under Section 42316.” (Mot. at p. 7; see also id. at p. 32, citing ROA #211, Exh. O [Kern Stip. Judg.].)

The Kern Stipulated Judgment states, in relevant part:

B. The Parties agree that the following are properly included and legally valid as categories of ‘fees’ within the meaning of H&S Section 42316, and the City shall not challenge now or in the future the District’s right to assess these types of fees to the City under Section 42316 in any administrative or judicial forum, under any

law, statute or legal theory whatsoever including H&S Section 42316: ... (ii) The District's attorney fees and costs to respond the City’s administrative comments, appeals, lawsuits and any other legal challenges related to H&S Section 42316, and to enforce District orders under H&S Section 42316, including the use of outside counsel of the District's sole choice and discretion.

(ROA #211, Exh. O at p. 4.)

In opposition, the City contends that the Kern Stipulated Judgment “did not provide any authority for this Court to award attorneys’ fees to the District”; that the City has already paid various amounts of attorneys’ fees to the District; and that the City’s 17th affirmative defense is essentially aimed at “prevent[ing the District’s] double recovery.” (Opp. at p. 24.)

In reply, the District responds that it “seek[s] single recovery, not double recovery. The prayer for fees satisfies a procedural requirement should the Court award any additional attorney fees (e.g., costs of proof or other reimbursement) not covered by the Kern County Superior Court Order.” (Reply at p. 9.)

Thus, the District’s reply argument contradicts its original argument that the City’s 17th affirmative defense is barred by the Kern Stipulated Judgment, as the District acknowledges that it has prayed for fees “not covered by the Kern County Superior Court Order.” (Id.) In short, the Kern Stipulated Judgment cannot bar anything it does not “cover.” Therefore, the Court DENIES IN PART the District’s motion as to affirmative defenses #17.

Moving party shall provide notice.