Dep't of Fin. v. Comm'n On State Mandates

• Decision Date: 04 January 2021
• Docket Number: B292446
• Citation: 273 Cal.Rptr.3d 619,59 Cal.App.5th 546
• Court: California Court of Appeals Court of Appeals
• Parties: DEPARTMENT OF FINANCE et al., Plaintiffs and Respondents, v. COMMISSION ON STATE MANDATES, Defendant and Respondent; County of Los Angeles et al., Real Parties in Interest and Appellants. County of Los Angeles et al., Cross-complainants and Appellants, v. Commission on State Mandates, Cross-defendant and Respondent; Department of Finance et al., Cross-Real Parties in Interest and Respondents.

59 Cal.App.5th 546

273 Cal.Rptr.3d 619

DEPARTMENT OF FINANCE et al., Plaintiffs and Respondents,

v.COMMISSION ON STATE MANDATES, Defendant and Respondent;

County of Los Angeles et al., Real Parties in Interest and Appellants.

County of Los Angeles et al., Cross-complainants and Appellants,

v.Commission on State Mandates, Cross-defendant and Respondent;

Department of Finance et al., Cross-Real Parties in Interest and Respondents.

B292446

Court of Appeal, Second District, Division 1, California.

Filed January 4, 2021

Mary C. Wickham, County Counsel, Robert C. Cartwright, Assistant County Counsel, Michael S. Simon, Deputy County Counsel for Real Party in Interest, Cross-complainant and Appellant County of Los Angeles.

Burhenn & Gest LLP, David Burhenn, and Howard Gest, Los Angeles, for Real Parties in Interest, Cross-complainants and Appellants County of Los Angeles, City of Bellflower, City of Carson, City of Commerce, City of Downey, and City of Signal Hill.

Karl H. Berger, City Attorney, and Timothy E. Campen, Deputy City Attorney for Real Party in Interest, Cross-complainant and Appellant City of Bellflower.

Best Best & Krieger, Shawn D. Hagerty and Rebecca Andrews, San Diego, for County of San Diego, Cities of Carlsbad, Chula Vista, Coronado, Del Mar, El Cajon, Encinitas, Escondido, Imperial Beach, La Mesa, Lemon Grove, National City, Oceanside, Poway, San Marcos, Santee, Solana Beach, and Vista as Amici Curiae on behalf of Real Parties in Interest, Cross-complainants and Appellants.

Thomas E. Montgomery, County Counsel (San Diego), and Christina Snider, Deputy County Counsel, for California State Association of Counties as Amicus Curiae on behalf of Real Parties in Interest, Cross-complainants and Appellants.

Meyers, Nave, Riback, Silver & Wilson, Gregory J. Newmark and Bryan K. Brown, Los Angeles, for Alameda Countywide Clean Water Program as Amicus Curiae on behalf of Real Parties in Interest, Cross-complainants and Appellants.

Somach Simmons & Dunn, Theresa A. Dunham and Roberta Larson, Sacramento, for California Stormwater Quality Association as Amicus Curiae on behalf of Real Parties in Interest, Cross-complainants and Appellants.

Xavier Becerra, Attorney General, Thomas S. Patterson, Assistant Attorney General, Tamar Pachter, Anthony R. Hakl, Nelson R. Richards, and Ryan A. Hanley, Deputy Attorneys General for Plaintiffs, Cross-Real Parties in Interest and Respondents Department of Finance, State Water Resources Control Board, Regional Water Quality Control Board, Los Angeles Region.

No appearance for Defendant, Cross-defendant and Respondent Commission on State Mandates.

ROTHSCHILD, P. J.

The Regional Water Quality Control Board, Los Angeles Region (the Regional Board) issued a permit authorizing the County of Los Angeles (the County) and certain cities (collectively, the Operators) to operate stormwater drainage systems. The permit requires the Operators (1) to install and maintain trash receptacles at transit stops (the trash receptacle requirement) and (2) periodically inspect commercial facilities, industrial facilities, and construction sites to ensure compliance with various environmental regulatory requirements (the inspection requirements). Some of the Operators filed claims with the Commission on State Mandates (the Commission) seeking a determination that the state must reimburse them for the costs related to the trash receptacle and inspection requirements pursuant to article XIII B, section 6 of the California Constitution (section 6). The Commission determined that the trash receptacle requirement is a reimbursable state mandate and that the inspection requirements are not.

The Department of Finance, State Water Resources Control Board, and the Regional Board (collectively, the state agencies) filed a petition in the superior court for a writ of administrative mandamus to command the Commission to set aside its decision concerning the trash receptacle requirement.¹ The County and the Cities of Bellflower, Carson, Commerce, Covina, Downey, Signal Hill (collectively, the local governments) filed a cross-petition challenging the Commission's decision as to the inspection requirements. The superior court granted the state agencies’ petition and denied the cross-petition as moot. The local governments appealed. We agree with the Commission that the trash receptacle requirement requires subvention and the inspection requirements do not. We therefore reverse the judgment of the superior court.

FACTUAL AND PROCEDURAL SUMMARY

In December 2001, the Regional Board issued its permit No. 01-182 (the permit) concerning waste discharge requirements for municipal stormwater and urban runoff discharges within Los Angeles County and certain cities in the Los Angeles County Flood Control District. The permit includes the trash receptacle requirement² and inspection requirements.³

In 2003, the local governments, among others, filed test claims⁴ with the Commission seeking subvention of funds to cover the costs of the trash receptacle and inspection requirements pursuant to section 6.⁵ That section provides generally that the state must reimburse local governments for the costs of any state-mandated "new program or higher level of service." ( Cal. Const., art. XIII B, § 6, subd. (a).) This general rule does not apply under certain circumstances, such as when the requirement is mandated by federal law or the local agency has the authority to levy fees sufficient to pay for the program or increased level of service. ( Gov. Code, § 17556, subds. (c) & (d).)

In July 2009, the Commission determined that the challenged requirements imposed new programs or higher levels of service within the meaning of section 6. Because no exception applied to the trash receptacle requirement, subvention was required to reimburse the local governments for the cost of complying with the requirement. The Commission determined that subvention was not required for the cost of complying with the inspection requirements, however, because the local governments have the authority to impose fees that could pay for the required inspections. (See Gov. Code, § 17556, subd. (d).)

In February 2011, the state agencies filed a petition for writ of administrative mandamus challenging the Commission's decision on three grounds: (1) the challenged requirements are mandated by federal law; (2) the challenged requirements do not impose new programs or higher levels of service; and (3) subvention for the costs of complying with the trash receptacle requirement is not required because the local governments have authority to levy fees to cover such costs. The local governments filed a cross-petition challenging the Commission's determination that the local governments could levy fees to cover the costs of the required inspections.

In August 2011, the trial court granted the state agencies’ petition on the ground that the challenged conditions impose requirements mandated by federal law and, therefore, the costs of complying with the requirements are not reimbursable. (See Gov. Code, § 17556, subd. (c).) The court did not address the other arguments by the state agencies or the local governments’ cross-petition. After we affirmed the court's decision in October 2013, the Supreme Court reversed. (Department of Finance , supra , 1 Cal.5th at p. 772, 207 Cal.Rptr.3d 44, 378 P.3d 356.)

The Supreme Court held that the federal mandate exception did not apply to the challenged requirements. ( Department of Finance , supra , 1 Cal.5th at pp. 771–772, 207 Cal.Rptr.3d 44, 378 P.3d 356.) The Court directed the trial court to address the remaining issues raised by the petition and cross-petition. ( Id. at p. 772, 207 Cal.Rptr.3d 44, 378 P.3d 356.)

In February 2018, the trial court again granted the state agencies’ petition, this time on the ground that neither the trash receptacle requirement nor the inspection requirements are state mandated programs within the meaning of section 6. The local governments’ cross-petition was therefore moot. The court did not reach the parties’ arguments concerning the local governments’ authority to levy fees to pay for the costs of implementing the requirements.

The local governments timely appealed.

The parties briefed issues arising from the trial court's ruling that the trash receptacle requirement and inspection requirements are not state mandates. In June 2020, we requested the parties further brief the questions whether the Commission erred in finding that (1) the costs of the trash receptacle requirement are costs mandated by the state, and (2) the costs of the challenged inspection requirements are not costs mandated by the state. In October 2020, we requested further supplemental briefing to address the questions whether Health and Safety Code section 5471 or Government Code section 54999.7 provide the local governments with the authority to levy service charges, fees, or assessments sufficient to pay for the trash receptacle requirement. We received and have considered the requested supplemental briefs.

DISCUSSION

A. Standards of Review

"[T]he Commission, as a quasi-judicial body, has the sole and exclusive authority to adjudicate whether a state mandate exists." ( County of Los Angeles v. Commission on State Mandates (1995) 32 Cal.App.4th 805, 819, 38 Cal.Rptr.2d 304.) Review of its decisions is by writ of administrative mandamus to the trial court. ( Gov. Code, § 17559, subd. (b).) On appeal from the trial court's decision, our review of disputed factual determinations is the same as "the trial court, that is, to review the administrative decision to determine whether it is supported by substantial evidence on the whole record." ( County of Los Angeles v. Commission on State Mandates, supra , 32 Cal.App.4th at p. 814, 38 Cal.Rptr.2d 304 ; accord, Paradise Irrigation Dist. v. Commission on State Mandates (2019) 33 Cal.App.5th 174, 185, 244 Cal.Rptr.3d 769 ( Paradise Irrigation ).) However, we "independently review[ ] conclusions as to the...