Barajas v. Sativa L. A. Cnty. Water Dist., B317653
| Court | California Court of Appeals |
| Parties | MARTHA BARAJAS et al., Plaintiffs and Appellants, v. SATIVA L.A. COUNTY WATER DISTRICT, Defendant and Respondent. |
| Decision Date | 25 May 2023 |
| Docket Number | B317653 |
1
MARTHA BARAJAS et al., Plaintiffs and Appellants,
v.
SATIVA L.A. COUNTY WATER DISTRICT, Defendant and Respondent.
B317653
California Court of Appeals, Second District, Second Division
May 25, 2023
CERTIFIED FOR PARTIAL PUBLICATION [*]
APPEAL from a judgment of the Superior Court of Los Angeles County, No. BC713381 Daniel J. Buckley, Judge. Affirmed.
The Law Office of Mark Ravis &Associates and Mark Ravis; Reyes &Associates and Jorge Reyes for Plaintiffs and Appellants.
Kessel &Megrabyan, Elizabeth Mary Kessel, Armineh Megrabyan and Steven J. Lowery for Defendant and Respondent.
HOFFSTADT, J.
The Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (the Reorganization Act or the Act) governs the dissolution of local agencies in California, including local water districts. (Gov. Code, §§ 56100, subd. (a), 56301, 56021, subd. (h); see generally § 56000 et seq.)[1] In this case, the California Legislature took action to specifically dissolve the board of directors of one such water district with a long history of incompetent management, and the pertinent county's Local Agency Formation Commission (LAFCO) subsequently dissolved the district itself. The question presented is: Can a lawsuit against the district be maintained after the district and its board are both dissolved, on the theory the district still must "wind up" its affairs? The answer is: It depends. The Reorganization Act grants a LAFCO discretion whether to permit a district to wind up its own affairs or whether instead to appoint a successor agency responsible for doing so. (§§ 56035, 57450-57463.) Because the LAFCO in this case took the latter route, the plaintiffs' class action lawsuit against the dissolved district must be dismissed. In the unpublished portion of this opinion, we further conclude that the trial court's dismissal of the successor
agency was proper because our Legislature expressly granted civil immunity to that agency. Thus, we affirm the trial court's dismissal of the plaintiffs' lawsuit.
FACTS AND PROCEDURAL BACKGROUND
I. Facts
A. Sativa Los Angeles County Water District (the Sativa Water District or the District)
The Sativa Water District was created in 1938 under the County Water District Law (Wat. Code § 30000 et seq.) to provide potable drinking water to the residents living in a neighborhood in the unincorporated community of Willowbrook and parts of the City of Compton within Los Angeles County. The District's service area encompasses 180 acres of land, and uses nine miles of pipeline and 1,643 service connections to deliver potable drinking water to more than 6,800 residents. This area is also considered a "disadvantaged unincorporated community," which means the median household income of the residents is less than 80 percent of the statewide annual median household income. (Gov. Code, § 56033.5; Wat. Code, § 79505.5) The District is governed by a five-member board of directors. In 2018, it was insured by the Special District Risk Management Authority.
B. The Sativa Water District fails at its core task
From at least 1994 through July 2018, the Sativa Water District "repeatedly" "failed to comply with the monitoring and reporting requirements" designed to secure potable water to the District's residents. On June 1, 2018, the State Water Resources Control Board (the State Board) issued a compliance order (1) finding that the Sativa Water District was "violating the California Safe Drinking Water Act" by "fail[ing] to provide its customers with a reliable and adequate supply of pure,
wholesome, healthful, and potable water . . . and failed to comply with the source capacity, minimum flushing velocity, and minimum pressure requirements" of California law, and (2) ordering the District to undertake regular testing of its water supply and to submit to the State Board a corrective action plan. After obtaining a month-long extension of the deadline to submit the corrective action plan, the District first submitted an initial plan that the State Board rejected as "incomplete" and riddled with "various errors," and then submitted a revised plan that the State Board found did not "fully address the issues raised."
C. The Legislature and State Board dissolve the Sativa Water District's board of directors
On September 28, 2018, the California Legislature enacted Assembly Bill No. 1577 (2017-2018 Reg. Sess.) (AB 1577) as an urgency measure. (Stats. 2018, ch. 859, §§ 2, 3, codified at Health &Saf. Code, § 116687.) AB 1577 granted the State Board the power to select an entity to administer the Sativa Water District using expedited procedures (Health &Saf. Code, § 116687, subd. (b)), and the authority to "order" the District's board of directors to "surrender all control" of itself "to the appointed administrator"-at which point in time the District's board of directors "shall thereafter cease to exist" (id., subd. (c)(1)(A)).
Four days later, on October 2, 2018, the State Board gave notice of its intention to dissolve the Sativa Water District's board of directors and assign full management and control of the District to an administrator.
On October 31, 2018, the State Board issued an order appointing the County of Los Angeles (the County) to serve as the administrator, and directing the Sativa Water District to "immediately and unconditionally accept administrative and
managerial services" from the County and to allow the County "to exercise full authority and control over" the District, including "all technical, operational, administrative, and financial aspects of the entire water system." The State Board and the County entered into a contract appointing the County as the administrator of the District and authorizing the County to "[t]ake necessary steps to implement full and complete operational, fiscal, and managerial control." By operation of AB 1577's plain terms, the Sativa Water District's board of directors "cease[d] to exist" that day. (Health &Saf. Code, § 116687, subd. (c)(1)(A).)
D. The local LAFCO dissolves the Sativa Water District
On July 11, 2018 (and hence a few months prior to the enactment of AB 1577), and in response to a study so recommending, the LAFCO for the County of Los Angeles (the County Commission) had passed a resolution to initiate proceedings to dissolve the Sativa Water District.
On December 26, 2018 (and hence a few months after the enactment of AB 1577 and dissolution of the District's board of directors), the County Commission gave public notice that, at its February 13, 2019, public hearing, it would be considering a proposed resolution ordering the dissolution of the District. The Legislature had, in AB 1577, reaffirmed the County Commission's authority to dissolve the Sativa Water District and to "designate[]" "a successor agency" using expedited procedures. (Health &Saf. Code, § 116687, subds. (c)(3) &(c)(4).) Following the public hearing, the County Commission adopted the proposed resolution; it was recorded-and hence took effect-on March 19, 2019.
In pertinent part, the County Commission's resolution:
• "[D]issolve[d] the Sativa . . . Water District."
• Designated the County as "the successor agency for the District, for the purpose[] of," among other things, "winding up the affairs of the District pursuant to [section] 56886[, subdivision (m),] and [section] 57451[, subdivision (c),] and subject to" AB 1577. To facilitate this task, the order:
• "[V]ested" "[a]ll of the [District's] moneys or funds," "all property," and the "control of all books, records, papers, offices, equipment, supplies, . . . appropriations, licenses, permits, entitlements, agreements, contracts, claims, judgments, land, infrastructure, and other assets" "in the County as the successor agency."
• Granted the County "the power to exchange, sell, or otherwise dispose of" or "use" the above-described "funds, money or property of the dissolved District . . . for the purpose of winding up the affairs of the District."
• Granted the County the "power to" (1) "compromise and settle claims of every kind and nature," and (2) "to sue or be sued in the same manner and to the same extent as the District" "for the sole and exclusive purpose of winding up the affairs of the dissolved District."
II. Procedural Background
A. Plaintiffs sue the Sativa Water District
On July 9, 2018 (and hence days before the County Commission initiated the process to dissolve the District), four named individuals-Martha Barajas, Karen Lewis, Maria Jaime, and Soledad Aguirre (collectively, plaintiffs)-filed a putative class action lawsuit against the Sativa Water District. In the operative first amended complaint filed on January 31, 2019,
plaintiffs sought classwide relief on the theory that the District's failure to provide potable drinking water (1) breached a contract, (2) constituted a nuisance, and (3) was the product of negligence.[2]
B. Plaintiffs add and then dismiss the County
On April 29, 2019, plaintiffs substituted the County in lieu of a Doe defendant.
On September 30, 2020, plaintiffs moved to voluntarily dismiss the County as a defendant with prejudice, citing AB 1577's grant of "statutory immunity for its administration of the [Sativa Water D]istrict following [its] dissolution." The trial court granted the requested dismissal on October 15, 2020.
C. Plaintiffs succeed in certifying the class on all three claims, but the class is later decertified as to the nuisance claim
1. Class certification and notice
On August 15, 2019, plaintiffs moved to certify a class as to all three claims in the operative complaint.
On April 27, 2020, the trial court certified a class of "all individuals who paid a monthly water utility payment to [the] Sativa [Water District] . . . at any time from March 13, 2017, to March 13, 2018." On December 7, 2020, the trial court approved plaintiffs'...
To continue reading
Request your trial