Shapiro v. Dep't of Toxic Substances Control, B264432

• Decision Date: 01 December 2016
• Docket Number: B264432,c/w B266051
• Court: California Court of Appeals Court of Appeals
• Parties: OLGA SHAPIRO, Plaintiff and Appellant, v. DEPARTMENT OF TOXIC SUBSTANCES CONTROL, Defendant and Respondent.

OLGA SHAPIRO, Plaintiff and Appellant, v. DEPARTMENT OF TOXIC SUBSTANCES CONTROL, Defendant and Respondent.

B264432

c/w B266051

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO

December 1, 2016

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. Nos. BS148802 & PC055727)

APPEAL from judgments of the Superior Court of Los Angeles County. James C. Chalfant and Stephen P. Pfahler, Judges. Affirmed.

Appell Shapiro, Scott E. Shapiro and Sean J. Haddad, for Plaintiff and Appellant.

Kamala D. Harris, Attorney General, Sarah E. Morrison, Supervising Deputy Attorney General, Megan K. Hey and Brian J. Bilford, Deputy Attorneys General, for Defendant and Respondent.

* * * * * * The state agency responsible for regulating hazardous waste within California fined a person registered to transport such waste for violating several of the statutes and regulations the agency enforces. The waste transporter challenged the agency's findings in administrative proceedings. The administrative law judge issued a tentative ruling reducing the $28,500 fine by $16,500, but the agency ultimately issued a final ruling imposing the full $28,500 fine. The waste transporter filed two separate lawsuits—one seeking a writ of mandate and another seeking declaratory relief and damages. One trial court denied the writ, and a second trial court sustained a demurrer to the civil suit without leave to amend. We conclude that both trial courts' rulings were correct, and affirm.

FACTS AND PROCEDURAL BACKGROUND

I. Facts

Since 1991, plaintiff Olga Shapiro (Shapiro) has run a business that picks up used oil from automotive repair shops in the Southern California area and transports that oil to facilities that process used oil. Shapiro operates the business under the fictitious name Pacific Oil Company (Pacific Oil). Pacific Oil sells a large portion of the oil it transports to an Arizona-based company called Botavia Energy, LLC (Botavia). Pacific Oil stores its tanker trucks in a yard in Sun Valley and allows Botavia to store its trucks in the same yard.

Used oil is considered "hazardous waste" within the meaning of California's Hazardous Waste Control Act (Act), Health and Safety Code sections 25100 through 25259.¹ (§ 25250.4.)² Because Pacific Oil is transporting hazardous waste, it is required by the Act to register with respondent Department of Toxic Substances Control (Department). (§ 25163, subd. (a)(1).) What must be registered is the company itself, not thecompany's individual drivers. Pacific Oil is registered with the Department to transport hazardous waste; Botavia is not.

The Department tracks hazardous waste by requiring transporters like Pacific Oil to track each shipment of used oil using a standardized manifest. (§ 25160, subds. (a)(1), (b), (d)(1), (e)(1) & (f); Cal. Code. Regs., tit. 22, § 66263.20, subd. (a).) Our Legislature has delegated to the Department the power to specify how the manifests are to be completed (§ 25160, subds. (b)(1) & (c)(1)), and the Department has issued regulations specifying the applicable procedure. (Cal. Code Regs., tit. 22, §§ 66262.21, 66262.23, 66263.20.)

The transportation of hazardous waste typically involves three entities: the entity that generates the waste (the "generator"); the entit(ies) that transport(s) it (the "transporter(s)"); and the facility designated to receive the waste (the "designated facility"). (Cal. Code Regs., tit. 22, § 66262.21, subd. (d).) All transporters must be registered with the Department, and "it is unlawful for any person to transfer custody of a hazardous waste to a transporter who does not hold a valid registration issued by the [D]epartment." (§ 25163, subd. (a)(1).) The generator (in this case, the companies wishing to dispose of the used oil) must supply the standardized manifest to a registered transporter, obtain the transporter's "handwritten signature . . . on the manifest," retain the detachable copy of the manifest designated for the "generator," and give the remaining copies of the manifest to the transporter. (§ 25160, subd. (b)(1); Cal. Code Regs., tit. 22, §§ 66262.21, subd. (d), 66262.23, subds. (a), (b), 66263.20, subd. (b).) The transporter must keep the manifest with it as it transports the hazardous waste. (§ 25160, subd. (d)(1); Cal. Code Regs., tit. 22, § 66263.20, subds. (c), (d).) When the transporter delivers the waste to another registered transporter or to the designated facility, it must "obtain . . . the handwritten signature of that transporter or of . . . the designated facility on the manifest," retain the detachable copy of the manifest designated for the "transporter," and give the remaining copies of the manifest to the second transporter or the designated facility. (Cal. Code Regs., tit. 22, § 66263.20, subd. (g).) The generator, transporter(s), and designated facility are each then required to submit a copy of their detached copy of the manifest to theDepartment. (§ 25160, subd. (b)(1)(D) [generator's duty to submit]; Cal. Code Regs., tit. 22, §§ 66262.23, subd. (a)(4) [same], 66263.20, subd. (f) [transporter's duty to submit]; § 25160, subd. (e)(1) [designated facility's duty to submit].)

For a period of time, Pacific Oil's manifests listed Pacific Oil as the sole "Transporter" and Botavia as the "Designated Facility." Later, more than 1,100 of Pacific Oil's manifests listed Pacific Oil as "Transporter 1," listed Botavia as both "Transporter 2" and as the "Designated Facility," and listed "Alexander De Leon" (De Leon) as the driver for "Transporter 2." In these latter instances, one of Pacific Oil's drivers would pick up the used oil in one of Pacific Oil's marked tanker trucks, drive back to Pacific Oil's yard, and then De Leon would drive the Pacific Oil tanker truck to Botavia's yard in Arizona. De Leon's signature on all 1,100 of these manifests was perfectly identical; this signature was placed on the manifests after the tanker truck arrived in Arizona, not when De Leon took custody of Pacific Oil's truck containing the used oil at Pacific Oil's yard.

Consistent with allowing De Leon to drive one of its trucks, Pacific Oil administered its own driving test to De Leon, obtained automobile insurance for De Leon as one of its drivers, signed up for California Department of Motor Vehicles Pull Notices for De Leon to obtain updates on any changes to the status of De Leon's driver license, ensured that De Leon was randomly drug tested, and verified that he passed a fingerprint scan administered by the Transportation Security Administration (TSA).

Shapiro's description of Pacific Oil's employment relationship with De Leon changed over time. At first, she reported that Pacific Oil had a "verbal agreement" with Botavia, under which a "Botavia employee" would haul the used oil to Botavia's yard "using a Pacific Oil truck." Botavia's owner similarly indicated that De Leon "was not an employee of Pacific [Oil]," but noted that Botavia was "helping out" Pacific Oil "with drivers." Consistent with this view, Shapiro named the five drivers Pacific Oil employs and who are on Pacific Oil's payroll, but did not name De Leon among them. Later, Shapiro stated that Pacific Oil had a written contract with Botavia that provided that Botavia would "lease" De Leon to Pacific Oil for the purpose of driving Pacific Oil's trucks to Botavia's yard, and that Pacific Oilcompensated De Leon by giving Botavia a discount on the price of the used oil Botavia was buying. Pacific Oil purported to offer a heavily redacted version of that contract (all but two of the 14 pages were blanked out), but the contract was admitted "only for the limited purpose of explaining and corroborating and supplementing [Shapiro's] testimony that there's a signed contract between her and Botavia."

II. Procedural History

A. Enforcement Order

In 2013, the Department served an Enforcement Order upon Shapiro, alleging that Pacific Oil had committed five violations of the Act and assessing a $28,500 penalty. As pertinent to this appeal,³ the Department alleged that Pacific Oil (1) "failed to obtain the handwritten signature of the transporter or of the owner or operator of the designated facility on the manifest," in violation of California Code of Regulations, title 22, section 66263.20, subdivision (g)(1); and (2) "transferred custody of a hazardous waste to a transporter who does not hold a valid registration issued by the Department," in violation of section 25163, subdivision (a)(1).

B. Administrative proceedings

1. Administrative Law Judge's Proposed Decision

In response to the Enforcement Order, Pacific Oil requested a hearing, and an administrative law judge (ALJ) conducted a two-day evidentiary hearing before issuing a 14-page Proposed Decision. The ALJ affirmed the Department's finding that Pacific Oil had not obtained De Leon's "handwritten signature," agreeing that the "approximately 1,500" "manifestsin question contain a digital version of a handwritten signature from . . . [De Leon] as the transporter on behalf of Botavia . . . ." The ALJ further concluded that it was "crucial" that the "handwritten signatures[] be done at the time possession of the used oil is transferred," and that "it was not established that . . . [De Leon] . . . signed the manifests or affixed the digitized copy of their signatures on the manifests at the time that possession of the used oil was transferred." The ALJ nevertheless vacated the $6,000 penalty assessed for this violation because, in his view, Pacific Oil's noncompliance on 1,100 manifests constituted a "minor" deviation. The ALJ disagreed with the Department's finding that Pacific Oil had...