San Joaquin Local v. Superior Court

• Decision Date: 22 April 2008
• Docket Number: No. C056463.,C056463.
• Citation: 76 Cal.Rptr.3d 93,162 Cal.App.4th 159
• Court: California Court of Appeals Court of Appeals
• Parties: SAN JOAQUIN LOCAL AGENCY FORMATION COMMISSION, Petitioner, v. The SUPERIOR COURT of San Joaquin County, Respondent, South San Joaquin Irrigation District, Real Party in Interest, Pacific Gas & Electric Company, Intervener.

76 Cal.Rptr.3d 93

162 Cal.App.4th 159

SAN JOAQUIN LOCAL AGENCY FORMATION COMMISSION, Petitioner, v. The SUPERIOR COURT of San Joaquin County, Respondent, South San Joaquin Irrigation District, Real Party in Interest, Pacific Gas & Electric Company, Intervener.

No. C056463.

Court of Appeal, Third District.

April 22, 2008.

Neumiller & Beardslee, Michael F. McGrew and Daniel J. Schroeder, Stockton, for Petitioner.

No appearance for Respondent.

Davis Wright Tremaine, Martin L. Fineman, San Francisco, Rochelle L. Wilcox, Los Angeles, and Salle E. Yoo, San Francisco, for Real Party In Interest.

Manatt, Phelps & Phillips, Michael M. Berger, George M. Soneff and Benjamin G. Shatz, Los Angeles, for Intervener.

MORRISON, J.

This case presents the issue of whether a disappointed applicant to a local agency formation commission can take the depositions of the commissioners to learn what extra-record information the commissioners had when they denied the application and what additional information they needed to approve the application. Because extra-record evidence is not admissible in an action or proceeding challenging a quasi-legislative administrative decision and because the discovery permitted in this case would violate the deliberative process privilege, we hold such depositions cannot be taken.

After San Joaquin County (County) Local Agency Formation Commission (SJ LAFCO) denied the application of the South San Joaquin Irrigation District (District) for approval to provide retail electric service, the District filed suit against SJ LAFCO and noticed the taking of depositions of certain SJ LAFCO commissioners and the executive officer. SJ LAFCO moved for a protective order to prevent the taking of depositions, contending discovery was not permitted because review of an administrative agency action was limited to the administrative record and questioning the commissioners about their decision violated the deliberative process privilege. The superior court adopted the referee's ruling to grant only partially SJ LAFCO's motion for a protective order. SJ LAFCO petitions for a writ of mandate directing the superior court to vacate its order adopting the referee's recommended ruling and to enter a new order granting SJ LAFCO's motion for a protective order in its entirety. We issue the writ.

BACKGROUND

The District is a special district formed in 1909 pursuant to the Wright-Bridgeford Act, the predecessor to Water Code sections 20500 et seq. The District provides irrigation water service and, through its ownership interest in hydroelectric generating facilities, wholesale electric generation and electricity marketing services.

The District has an ownership interest in the Tri-Dam Project, a series of three hydroelectric generation plants on the Stanislaus River. A new five-year power sales agreement with Pacific Gas and Electric Company (PG & E), effective January 1, 2005, provided the District with more revenue from the Tri-Dam Project than its allocated portion of the costs. In 2005, the District developed a plan to provide retail electric service within its existing service territory. The District's plan included the acquisition of PG & E's existing distribution facilities either through purchase or eminent domain. PG & E opposed the District's plan.

The District submitted a justification for proposal (the Application) to SJ LAFCO for approval to proceed with its plan to provide retail electric service.¹ In June 2005, SJ LAFCO certified the Application as complete.

The County prepared an environmental impact report for the project to provide retail electric service, concluding there would be no significant impacts on the environment. The California Public Utilities Commission analyzed the plan and concluded it would not substantially impair PG & E's ability to provide adequate service at a reasonable rate.

In May 2006, SJ LAFCO held a workshop on the District's Application. PG & E opposed the Application as "an abuse of eminent domain." Several SJ LAFCO commissioners expressed concern about the possible use of eminent domain. SJ LAFCO staff recommended approving the Application.

In June 2006, SJ LAFCO held a formal hearing on the Application. Counsel for SJ LAFCO advised the commissioners they were not to consider the eminent domain issue; SJ LAFCO did not have jurisdiction to condition approval on the exercise or nonexercise of eminent domain. Nonetheless, several speakers addressed the issue of eminent domain. PG & E opposed the Application, contending the District had not demonstrated its ability to provide retail electric service and the plan was not an appropriate use of eminent domain.

A motion to oppose the staff recommendation and deny the Application was passed by a vote of four to one. In proposing the motion, Commissioner Gary Giovanetti stated the staff recommendation was based solely on information provided by the District and he would like to see an independent study performed. The proposal was to acquire PG & E's distribution system and PG & E was not a willing seller. "I'm convinced that it will end up being an eminent domain issue." Commissioner Victor Mow, Chairman Jack Sieglock and Commissioner Steven Nilssen stated there was a lack of sufficient information to prove the case as required by Government Code section 56824.12.²

About three months after the hearing, SJ LAFCO adopted a resolution stating the Application "is denied on the basis that the Applicant did not demonstrate its administrative, technical, and financial capabilities to provide retail electrical service to the satisfaction of the Commission pursuant to the requirements of Government Code section 56824.12."

Before this resolution was filed, the District filed suit against SJ LAFCO, stating four claims for relief. It sought declaratory relief as to whether it had the right to provide retail electric service without the approval of SJ LAFCO. A claim for inverse condemnation sought compensation for the taking of the District's right to provide retail electric service. The District sought a writ of administrative mandamus, claiming SJ LAFCO's decision was a prejudicial abuse of discretion that was not supported by substantial evidence. Finally the District petitioned for a writ of mandate because the decision to deny the District's Application was based on concerns regarding eminent domain and was not supported by substantial evidence.

PG & E moved to intervene.

The District gave notice of the taking of depositions of Jack Sieglock and Gary Giovanetti, SJ LAFCO commissioners. The deposition of Bruce Baracco, the executive officer of SJ LAFCO, was added.

SJ LAFCO moved for a protective order to prevent the taking of these depositions. SJ LAFCO argued no discovery was permissible in a mandamus case because review was limited to the administrative record. Further, questioning the commissioners about their decision violated the deliberative process privilege.

A referee was appointed to hear the discovery matters.

The referee recommended partially granting the protective order, limiting the depositions of Sieglock, Giovanetti and Baracco "to all unprivileged information that the deponents had prior to June 16, 2006, including information obtained from third parties (including but not limited to PG & E), and what additional information the Commissioner deponents needed to recommend adoption of the staff recommendation to approve the project." Objections could be made based on the deliberative process privilege.

Both SJ LAFCO and PG & E objected to the referee's recommendation.

The trial court adopted the referee's recommended ruling.

SJ LAFCO petitioned for a writ of mandate or prohibition. This court issued an alternative writ.

DISCUSSION

Preliminarily, we note that discovery orders are generally not reviewed by prerogative writ. (Sav-On Drugs, Inc. v. Superior Court (1975) 15 Cal.3d 1, 5, 123 Cal.Rptr. 283, 538 P.2d 739.) There is an exception, however, when the petitioner contends that compelling an answer would violate a privilege. (Ibid.) Here, SJ LAFCO contends that compelling the commissioners and executive officer to answer questions posed in the deposition would violate the deliberative process privilege. Accordingly, we consider the merits of the discovery order.

The discovery order pertained to a lawsuit challenging a decision: of SJ LAFCO denying the District's proposal to provide a new class of services, retail electric service, pursuant to Government Code section 56824.12. "`LAFCOs have been described as watchdogs, guarding "against the wasteful duplication of services that results from indiscriminate formation of new local agencies or haphazard annexation of territory to existing local agencies." [Citation.]' " (Placer County Local Agency Formation Com. v. Nevada County Local Agency Formation Com. (2006) 135 Cal. App.4th 793, 798, 37 Cal.Rptr.3d 729.). SJ LAFCO is a quasirlegislative administrative agency. (San, Miguel Consolidated Fire Protection Dist. v. Davis (1994) 25 Cal.App.4th 134, 152, 30 .Cal.Rptr.2d ,343; Morgan v. Community Redevelopment Agency (1991) 231 Cal.App.3d 243, 260,284 Cal.Rptr. 745.) Its proceedings are "quasi-legislative in nature" and its "decisions are reviewed by ordinary mandamus rather than administrative mandamus." (San Miguel Consolidated Fire Protection Dist. v. Davis, supra, at p. 152, 30 Cal.Rptr.2d 343.)

"An unbroken line of cases holds that, in traditional mandamus actions challenging quasi-legislative administrative decisions evidence outside the administrative record (extra-record evidence) is not admissible. [Citations.]" (Carrancho v. California Air Resources Board (2003) 111 Cal.App.4th 1255, 1269, 4 Cal.Rptr.3d 536.) "[E]xtra-record evidence is generally not admissible in traditional mandamus actions challenging quasi-legislative administrative decisions...." (Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 576, 38 Cal.Rptr.2d...