Saint Francis Mem'l Hosp. v. State Dep't of Pub. Health

• Citation: 9 Cal.5th 710,265 Cal.Rptr.3d 121,467 P.3d 1033
• Decision Date: 29 June 2020
• Docket Number: S249132
• Court: United States State Supreme Court (California)
• Parties: SAINT FRANCIS MEMORIAL HOSPITAL, Plaintiff and Appellant, v. STATE DEPARTMENT OF PUBLIC HEALTH, Defendant and Respondent.

9 Cal.5th 710

467 P.3d 1033

265 Cal.Rptr.3d 121

SAINT FRANCIS MEMORIAL HOSPITAL, Plaintiff and Appellant,

v.STATE DEPARTMENT OF PUBLIC HEALTH, Defendant and Respondent.

S249132

Supreme Court of California.

June 29, 2020

Sheuerman, Martini, Tabari, Zenere & Garvin and Cyrus A. Tabari, San Jose, for Plaintiff and Appellant.

Xavier Becerra, Attorney General, Edward C. DuMont, State Solicitor General, Janill L. Richards, Principal Deputy State Solicitor General, Gonzalo C. Martinez, Deputy State Solicitor General, Julie Weng-Gutierrez, Assistant Attorney General, Samuel T. Harbourt, Susan M. Carson, Gregory D. Brown and Nimrod P. Elias, Deputy Attorneys General, for Defendant and Respondent.

Opinion of the Court by Cuéllar, J.

California law permits — but also sets certain limits on — judicial review of adjudicatory decisions made by agencies responsible for implementing public policies on health, natural resources, employment, and other issues. One example is Government Code section 11523,¹ which lets parties seek judicial review of an agency's adjudicatory decision by filing a petition for a writ of administrative mandate "within 30 days after the last day on which reconsideration can be ordered." Yet lurking in the backdrop for most limitations periods is equitable tolling: a judicially created doctrine allowing courts to toll the statute of limitations when justice so requires.

What we must resolve in this case is whether equitable tolling can ever lessen the otherwise strict time limit on the availability of writs of administrative mandate under section 11523, and if so, whether the doctrine applies in this case. The answer to the first question is yes. Section 11523 allows for equitable tolling because nothing in the statute's language, structure, or legislative history demonstrates a legislatively enacted expectation to prohibit equitable tolling — which otherwise tends to function as a crucial backdrop to statutes of limitations.

Close scrutiny of that backdrop also reveals that the first two elements of tolling are satisfied in this case: timely notice and lack of prejudice. Equitable tolling nonetheless also depends on a third element — the reasonable and good faith conduct of the party invoking it — and we cannot from this record glean, nor has the Court of Appeal thoroughly addressed, whether Saint Francis satisfies that element. So we vacate the judgment and remand for the Court of Appeal to determine whether the third element of equitable tolling is satisfied.

I.

When the State Department of Public Health (the Department) learned that doctors at Saint Francis Memorial Hospital left a surgical sponge

in a patient during a 2010 surgery, it imposed a $50,000 fine on the hospital. The Department alleged that Saint Francis had "failed to develop and implement a [sponge] count procedure" and lacked a policy to properly train its staff, as required by California Code of Regulations, title 22, section 70223, subdivision (b)(2).

Saint Francis appealed. After a hearing, an administrative law judge (ALJ) issued a proposed decision in Saint Francis's favor. The ALJ reasoned that the regulations were not "intended to impose a penalty for any adverse occurrence during the provision of surgical services" — they only required Saint Francis to "develop[ ] and implement[ ] surgical safety [policies]." Because those policies existed at the time of the incident, Saint Francis wasn't liable for violating the regulations.

On administrative review, however, the Department reversed the ALJ's proposed decision and upheld the penalty against Saint Francis.² It reasoned that "the term ‘implement’ informs licensees that they must not only develop and maintain a policy, [but] must actually use the policy." Saint Francis had failed to put its sponge-count policy into practice — "[h]ad [it] done so, the sponge count would have revealed that a four-inch by eight-inch surgical sponge

was still inside the patient" — so the hospital had violated the regulations. The Department served Saint Francis with its decision — which was "effective immediately" — on December 16, 2015.³

Two weeks later, on December 30, 2015, Saint Francis filed a request for reconsideration under section 11521. This section typically allows an agency to order reconsideration of its decision within "30 days after the delivery or mailing of a decision to a respondent." (§ 11521, subd. (a).) According to Saint Francis, the Department had mistakenly placed the burden of proof on the hospital, and by failing to consider evidence introduced by Saint Francis at the administrative hearing. The Department sought to rebut these arguments on the merits in its response, which it filed on January 8, 2016.

On January 14, 2016, Saint Francis's legal counsel wrote to counsel for the Department. Counsel for Saint Francis sought to confirm his understanding that the Department had until "next Tuesday [January 19] to decide the request [for reconsideration]." Saint Francis explained that, if the request for reconsideration was denied, it "intend[ed] to petition for a writ of mandate with the Superior Court." On January 19, 2016 — which, as the parties later learned, was after the deadline by which Saint Francis should have filed its petition for a writ of administrative mandate — counsel for the Department responded: "I believe you are correct." The Department's counsel didn't mention that section 11523 ’s 30-day statute of limitations for filing a petition for a writ of administrative mandate had begun running on the effective date of the Department's decision, December 16, 2015, and expired on January 15, 2016. Instead, counsel for the Department offered to put Saint Francis in touch with the lawyer who would be representing the Department in the superior court proceedings.

The Department also denied Saint Francis's request for reconsideration on January 14, 2016. It explained that because the Department's decision was "effective immediately," Saint Francis couldn't seek reconsideration of the Department's decision. The Department was thus "unable to consider [Saint Francis's] Request for Reconsideration[,] which is deemed denied."

On January 26, 2016 — just 11 days after the Department denied Saint Francis's request for reconsideration, but 41 days after being served with the Department's final decision — Saint Francis filed a petition for a writ of administrative mandate in superior court. (See § 11521.) The Department demurred on the ground that the petition was untimely under section 11523, which requires that a writ petition "be filed within 30 days after the last day on which reconsideration can be ordered." After allowing Saint Francis to amend its petition, the court sustained the Department's demurrer. It reasoned that Saint Francis's petition was time-barred, and "that Saint Francis's ‘mistake [ ] as to [the] law ... [was] not a sufficient basis to excuse [a] late filing.’ " ( Saint Francis Memorial Hospital v. State Dept. of Public Health (2018) 24 Cal.App.5th 617, 621, 234 Cal.Rptr.3d 360 ( Saint Francis ).)

The Court of Appeal affirmed. In so doing, it acknowledged that "Saint Francis's mistake about the availability of reconsideration was made in good faith" and "that Saint Francis notified the Department of its intent to file a writ petition." ( Saint Francis , supra , 24 Cal.App.5th at p. 624, 234 Cal.Rptr.3d 360.) The court nonetheless held that because "Saint Francis's request for reconsideration did not constitute the timely pursuit of an available remedy[,] ... [¶] ... these circumstances are insufficient to toll the running of [ section 11523 ’s] 30-day [limitations] period." ( Ibid. ) We granted review to decide whether equitable tolling may apply to petitions filed under section 11523 and, if so, whether the Court of Appeal erred in concluding that tolling did not apply to this case.

II.

We first consider whether equitable tolling may apply to section 11523. The Department argues it cannot because equitable tolling is inconsistent with the statute's "text, structure, and legislative history."

Equitable tolling is a "judicially created, nonstatutory doctrine" that " ‘suspend[s] or extend[s] a statute of limitations as necessary to ensure fundamental practicality and fairness.’ " ( McDonald v. Antelope Valley Community College Dist. (2008) 45 Cal.4th 88, 99, 84 Cal.Rptr.3d 734, 194 P.3d 1026 ( McDonald ).) The doctrine applies "occasionally and in special situations" to "soften the harsh impact of technical rules which might otherwise prevent a good faith litigant from having a day in court." ( Addison v. State (1978) 21 Cal.3d 313, 316, 146 Cal.Rptr. 224, 578 P.2d 941 ( Addison ).) Courts draw authority to toll a filing deadline from their inherent equitable powers — not from what the Legislature has declared in any particular statute. (See Elkins v. Derby (1974) 12 Cal.3d 410, 420, fn. 9, 115 Cal.Rptr. 641, 525 P.2d 81 ( Elkins ).) For that reason, we presume that statutory deadlines are subject to equitable tolling. (See Irwin v. Department of Veterans Affairs (1990) 498 U.S. 89, 95–96, 111 S.Ct. 453, 112 L.Ed.2d 435 ( Irwin ).)

But that presumption can be overcome. Equitable tolling, we've also observed, "is not immune" from the operation of statutes. ( McDonald , supra , 45 Cal.4th at p. 105, 84 Cal.Rptr.3d 734, 194 P.3d 1026.) A court may conclude that explicit statutory language or a manifest policy underlying a statute simply cannot be reconciled with permitting equitable tolling, "even in the absence of an explicit prohibition." ( Ibid. ) We adopted that conclusion in Lantzy v. Centex Homes , where we held that the Legislature had sought to preclude Code of Civil Procedure section 337.15 ’s statute of limitations from being tolled. ( Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 2 Cal.Rptr.3d 655, 73 P.3d 517 ( Lantzy ).)

Contrary to the Department's assertions, we find no indication that the Legislature's purpose encompassed prohibiting section 11523 ’s s...