City of Los Angeles v. Standard Oil Co. of Cal.

• Decision Date: 13 May 1968
• Citation: 68 Cal.Rptr. 512,262 Cal.App.2d 118
• Court: California Court of Appeals Court of Appeals
• Parties: CITY OF LOS ANGELES, a municipal corporation, and Department of Water and Power of the City of Los Angeles, Plaintiffs and Appellants, v. STANDARD OIL COMPANY OF CALIFORNIA, a Delaware corporation, Defendant and Respondent. Civ. 30751.

Page 512

68 Cal.Rptr. 512

262 Cal.App.2d 118

CITY OF LOS ANGELES, a municipal corporation, and Department of Water and Power of the City of Los Angeles, Plaintiffs and Appellants, v. STANDARD OIL COMPANY OF CALIFORNIA, a Delaware corporation, Defendant and Respondent.

Civ. 30751.

Court of Appeal, Second District, Division 3, California.

May 13, 1968.

Rehearing Denied June 11, 1968.

Hearing Denied July 10, 1968.

Roger Arnebergh, City Atty., Gilmore Tillman, Chief Asst. City Atty., for Water and Power.

Desmond J. Bourke, Deputy City Atty., Kirtland & Packard, Robert C. Packard, Henry E. Kappler and Ellis J. Horvitz, Los Angeles, for appellants.

Lawler, Felix & Hall, Marcus Mattson, R. F. Outcault, Jr., James N. Ries, Los Angeles, for respondent.

McCutchen, Black, Verleger & Shea, Philip K. Verleger, Max K. Jamison, Jerome A. Hoffman, Kaplan, Livingston, Goodwin, Los Angeles, Berkowitz & Selvin, Beverly Hills, Sims Hamilton, Los Angeles, for amici curiae.

MOSS, Associate Justice.

The complaint seeks a declaration that a statute enacted by the Legislature in 1964 relating to contribution among tortfeasors responsible for the Baldwin Hills Reservoir disaster in December 1963 ¹ is constitutional. Although several oil companies and other persons are named as defendants in the complaint, only respondent Standard Oil Company of California appeared in the action. The demurrer of respondent was sustained on the sole ground that the statute is unconstitutional in that it is special legislation based upon an invalid classification. The trial court entered a judgment declaring that the plaintiffs are not entitled to the declaration of constitutionality they seek. ² Plaintiffs appeal from the judgment.

The complaint alleges in substance that: from 1924 to the present the named defendants have extracted petroleum, water and natural gas from the Inglewood Oil Field; in 1951 plaintiff Department of Water and Power built the Baldwin Hills dam and reservoir in the City of Los Angeles on a site adjacent to the Inglewood Oil Field; the drilling operations of the defendants caused the surface area of the oil field and surrounding properties to subside; the subsidence caused the Baldwin Hills dam to collapse and the reservoir to flood the surrounding area; the flood caused severe damage to the property of more than 3700 property owners, killed at least five persons, and injured many others; the victims of the flood were in urgent need of funds to mitigate their suffering and to restore the damaged community; litigation to determine the parties responsible for the losses would require an extended period of time and would frustrate prompt settlement of loss claims; plaintiffs paid a reasonable amount for the claims of those who were injured in the flood; the aggregate amount of claims paid exceeds $12,000,000; in the event plaintiffs are held jointly liable for the flood damage they are entitled to contribution from the defendants by reason of the provisions of AB 9; an actual controversy exists between plaintiffs and defendants as to the constitutionality of AB 9.

AB 9 is entitled 'An act relating to contribution among joint and several tortfeasors, and declaring the urgency thereof, to take effect immediately.' The text of AB 9 is set out in the appendix to this opinion. By its terms AB 9 is made applicable only to injuries resulting from the failure of the Baldwin Hills dam and reservoir on December 14, 1963. (Sec. 1.) The principal distinction between the right created by AB 9 and the general California law on contribution among joint tortfeasors arises by reason of section 3(a) of AB 9. Section 3(a) provides for a right of contribution among joint or several tortfeasors which 'shall arise when one tortfeasor has discharged by payment the common liability or has paid more than his pro rata share thereof, although judgment has not been rendered against all or any of them in an action on the tort.' Section 875(c) of the Code of Civil Procedure, on the other hand, provides that the 'right of contribution may be enforced only after one tortfeasor has, by payment, discharged the joint judgment or has paid more than his pro rata share thereof.'

It is respondent's principal contention on appeal that AB 9 violates all the constitutional guarantees against special and arbitrary legislation ³ because it provides for a different right of contribution among tortfeasors who may be liable for injuries caused by the Baldwin Hills dam disaster from that applicable to tortfeasors in general. This contention is without merit.

In response to a similar contention the Supreme Court set forth the governing law as follows: 'The contention that the section in question lacks uniformity, grants special privileges and denies equal protection of the laws, is also without merit. None of these constitutional principles is violated if the classification of persons or things affected by the legislation is not arbitrary and is based upon some difference in the classes having a substantial relation to the purpose for which the legislation was designed. (Citations) A law to be general in its scope need not include all classes of individuals in the state. Nor is a classification void because it does not embrace within it every other class which might be included. (Citations) Wide discretion is vested in the Legislature in making the classification and every presumption is in favor of the validity of the statute; the decision of the Legislature as to what is a sufficient distinction to warrant the classification will not be overthrown by the courts unless it is palpably arbitrary and beyond rational doubt erroneous. (Citations) A distinction in legislation is not arbitrary if any set of facts reasonably can be conceived that would sustain it.' (Sacramento Municipal Utility Dist. v. Pacific Gas & Elec. Co., 20 Cal.2d 684, 693, 128 P.2d 529, 534.)

Applying these rules to AB 9 we cannot say that the classification among tortfeasors provided therein is palpably arbitrary and without a reasonable basis. The reason why AB 9 was enacted is stated in the statute. After reciting the basic facts of the Baldwin Hills dam disaster, section 10 recites, 'The victims of the flood are in urgent need of funds to mitigate the hardships which they are suffering and to restore the damaged homes and business properties. The remedies provided by this act are necessary to cope with this situation and must be available immediately.' While it is a judicial question whether a general law could have been made applicable to accomplish the purposes of the special law, the declaration in the special law as to the reasons for its enactment should not be ignored. (Solvang Municipal Improvement District v. Jensen, 111 Cal.App.2d 237, 240, 244 P.2d 492.) The widespread havoc caused by the collapse of the Baldwin Hills dam was reason enough to justify the enactment of legislation to encourage the parties liable for the damage to settle the claims against them prior to judgment. The general contribution statute deters such settlements because under Code of Civil Procedure section 875 a tortfeasor who settles a claim before rendition of judgment therefor loses the right to seek contribution against other persons who may be liable for the same injury. (See Guy F. Atkinson Co. v. Consani, 223 Cal.App.2d 342, 345--346, 35 Cal.Rptr. 750.) The Baldwin Hills dam disaster created a unique problem in that the number of persons injured therein was much greater than in the usual case and the issue of causation is unusually complex. By reason of these factors the need for legislation to encourage settlement was particularly acute.

Respondent urges, however, that if the Legislature desired to change the rule for contribution among the tort feasors liable for the Baldwin Hills injuries it was required by the federal and state constitutions to extend the change to all tortfeasors rather than to confine it to those responsible for the Baldwin Hills flood. 'If good ground for the classification exists, such classification is not void because it does not embrace within it every other class which might be included.' (Heron v. Riley, 209 Cal. 507, 518, 289 P. 160, 165; see Matter of Petition of Burke, 160 Cal. 300, 303, 116 P. 755.) Good ground exists for the distinction made in AB 9 between the parties responsible for the Baldwin Hills damage and tortfeasors who may be liable for a common injury in general. A rule which permits a right of contribution among tortfeasors to arise prior to judgment, while it tends to encourage out-of-court settlements, also tends to promote a multiplicity of litigation because it permits a tortfeasor against whom judgment has been rendered to bring a new and separate suit for contribution against other alleged tortfeasors not named in the judgment. The issues of liability and damages already litigated in the action brought against the judgment tortfeasor must be tried again in the contribution action. (See Prosser, Law of Torts, Third Edition (1964) p. 277.) The Legislature did not act arbitrarily in refusing to make a change in the general law that could have the possible effect of proliferating the general run of tort litigation.

No constitutionally protected rights of the Baldwin Hills tortfeasors are impaired by AB 9. They are entitled under AB 9 to a judicial determination of their liability and the amount thereof to the same extent as other tortfeasors. It is true that AB 9 does expand the class of persons who can subject them to suit since under the general law the choice of defendants is with the injured claimants whereas under AB 9 the choice is also given to other tortfeasors. However, no Baldwin Hills tortfeasor had any constitutionally protected right to avoid paying for the consequences of its tort merely because some of the injured claimants might have chosen to seek redress from other tortfeasors. (See Augustus v. Bean, 56 Cal.2d 270, 272, 14...