Southern California Gas Co. v. City of Santa Ana

Citation336 F.3d 885
Decision Date14 July 2003
Docket NumberNo. 02-56298.,No. 02-55885.,02-55885.,02-56298.
PartiesSOUTHERN CALIFORNIA GAS COMPANY, a California Utility Corporation, Plaintiff-Appellee, v. CITY OF SANTA ANA, a Municipal Corporation, Defendant-Appellant. Southern California Gas Company, a California Utility Corporation, Plaintiff-Appellee, v. City of Santa Ana, a Municipal Corporation, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Benjamin Kaufman, Chief Assistant City Attorney, Santa Ana, CA, for defendant-appellant.

David A. Battaglia, Gibson, Dunn & Crutcher, Los Angeles, CA, for plaintiff-appellee.

Martin L. Greenman, Deputy City Attorney, San Francisco, CA, for amici curiae, City and County of San Francisco, et al.

Clifford E. Yin, Coblentz, Patch, Duffy & Bass, San Francisco, CA, for amicus curiae, Pacific Gas and Electric Co.; Richard Tom, Southern California Edison Co, Rosemead, CA, for amicus curiae; Kevin B. Belford, American Gas Association, Washington, DC, for amicus curiae; Henry D. Bartholomot, Edison Electric Institute, Washington, DC, for amicus curiae.

Appeal from the United States District Court for the Central District of California; George H. King, District Judge, Presiding. D.C. No. CV-02-00658-GHK.

Before HALL, THOMAS, and PAEZ, Circuit Judges.

PER CURIAM Opinion; Concurrence by Judge THOMAS.



The City of Santa Ana appeals an order of the district court granting summary judgment in favor of the Southern California Gas Company. The district court held that the City's trench cut fee could not be constitutionally applied to the Gas Company, because such an application would violate the Contracts Clause of the federal constitution. See U.S. Const. art. I, § 10, cl. 1. We affirm the district court's order granting summary judgment in favor of the Gas Company, and adopt the district court's opinion, Southern California Gas v. City of Santa Ana, 202 F.Supp.2d 1129 (C.D.Cal.2002), as our own. See Appendix infra.

We also affirm the district court's award of attorney's fees in favor of the Gas Company pursuant to 42 U.S.C. § 1988. We reject the City's argument that the Gas Company was not a "prevailing party" pursuant to section 1988.

A prevailing party in a section 1983 action is eligible for an award of attorney's fees under section 1988. See 42 U.S.C. § 1988(b). The Gas Company's complaint specifically stated that its Contracts Clause claim was "brought pursuant to 42 U.S.C. § 1983 and related California law." The City's argument that section 1983 provides no relief for a party deprived of its rights under the Contracts Clause is without merit. Section 1983 provides for liability against any person acting under color of law who deprives another "of any rights, privileges, or immunities secured by the Constitution and laws" of the United States. 42 U.S.C. § 1983. The rights guaranteed by section 1983 are "liberally and beneficently construed." Dennis v. Higgins, 498 U.S. 439, 443, 111 S.Ct. 865, 112 L.Ed.2d 969 (1991) (quoting Monell v. Department of Social Services, 436 U.S. 658, 684, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978)). The right of a party not to have a State, or a political subdivision thereof, impair its obligations of contract is a right secured by the first article of the United States Constitution. A deprivation of that right may therefore give rise to a cause of action under section 1983.

The Supreme Court's decision in Carter v. Greenhow, 114 U.S. 317, 5 S.Ct. 928, 29 L.Ed. 202 (1885), is not to the contrary. The Supreme Court has explicitly given Carter a narrow reading and rejected the interpretation advanced by the City. See Dennis, 498 U.S. at 451 n. 9, 111 S.Ct. 865 (stating that Carter can only be read to have "held as a matter of pleading that the particular cause of action set up in the plaintiff's pleading was in contract and was not to redress deprivation of the right secured to him by that clause of the Constitution [the contract clause], to which he had chosen not to resort.") (emphasis added) (internal quotations and citations omitted).

We therefore find that the district court acted well within its discretion by awarding the Gas Company attorney's fees.








CV 02-00658-GHK(BQRx)


This matter is before the court on the above-titled motions. After fully considering the parties' papers and oral argument on April 22, 2002, we rule as follows:

I. Background

In 1938, the City of Santa Ana ("Santa Ana") adopted an ordinance granting the Southern California Gas Company1 ("Gas Company") the right to construct and maintain "pipes and appurtenances" under city streets. See Santa Ana, Cal., Ordinance No. 1061 (March 21, 1938) ("1938 Franchise") § 1(f) (defining "pipes and appurtenances" to include anything "located or to be located ... under ... the streets of the City") & § 2 ("to lay and use pipes and appurtenances ... under ... the streets").2 In exchange, the Gas Company pays Santa Ana a percentage of its gross annual receipts. Id. § 3.

The Gas Company, "where practicable and economically reasonable shall" lay pipe "by a tunnel or bore, so as not to disturb the foundation" of city streets. Id. § 9, at ¶ 2. If, on the other hand, the Gas Company performs trench work or excavations, it must do so "under a permit to be granted by the Engineer upon application therefor." Id. If "any portion of any street" is damaged, the Gas Company "shall, at its own cost and expense, immediately repair any such damage and restore such street, or portion of street, to as good a condition as existed before such defect or other cause of damage occurred, such work to be done under the direction of the Engineer, and to his reasonable satisfaction." Id. § 10. Santa Ana can demand the Gas Company adequately and timely repair streets or forfeit the franchise. Id. § 11.

In general, the Gas Company's rights under the 1938 Franchise are subject to "all of the ordinances, rules and regulations heretofore or hereafter adopted by the legislative body of the City in the exercise of its police powers...." Id. § 8(a). Santa Ana may also "demand[] the cost of all repairs to public property made necessary by any operations of" the Gas Company. Id. § 8(b).

In October 2001, Santa Ana adopted a resolution and ordinance, which are the subject of this action. Santa Ana, Cal., Resolution No.2001-063 (October 1, 2001) & Ordinance No. NS-2480 (October 15, 2001) (hereinafter collectively the "trench cut ordinance"). With certain exceptions, the trench cut ordinance requires advance payment by anyone wishing to perform excavations or trench cuts. The Gas Company contends the trench cut ordinance: (1) substantially impairs its rights under the 1938 Franchise in violation of the Contract Clause, (2) constitutes an uncompensated taking in violation of the Fifth and Fourteenth Amendments, and (3) is arbitrary and capricious in contravention of the Fourteenth Amendment's substantive due process clause.3

II. Procedural Posture

Santa Ana moves to dismiss the Gas Company's federal claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The Gas Company seeks partial summary judgment on the Contract Clause claim pursuant to Rule 56. While we normally consider motions to dismiss first, the parties rely largely on the same evidence for both motions. In addition, the motion for partial summary judgment is potentially dispositive of this action. Pl.'s Mot. for Partial Sum. J. ("Pl.'s Mot."), p. 1 n. 1 (stipulating and moving to dismiss remaining claims without prejudice should its motion be granted). Therefore, we consider Plaintiff's motion first.

III. Summary Judgment Standard

Viewing the evidence in the light most favorable to Santa Ana, we must determine whether a dispute exists as to any material fact, and whether the Gas Company is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; see, e.g., Toscano v. Prof'l Golfers' Ass'n, 258 F.3d 978, 982 (9th Cir.2001). As the party with the burden of persuasion at trial, the Gas Company must establish "beyond controversy every essential element of its" Contract Clause claim. See, e.g., William W Schwarzer, et al., California Practice Guide: Federal Civil Procedure Before Trial § 14:124-127 (2001). Santa Ana can defeat summary judgment by demonstrating the evidence, taken as a whole, could lead a rational trier of fact to find in its favor. See, e.g., Margolis v. Ryan, 140 F.3d 850, 852 (9th Cir.1998).

We may grant summary judgment motions touching upon contract interpretation when the agreement is unambiguous. See San Diego Gas & Elec. Co. v. Canadian Hunter Mktg. Ltd., 132 F.3d 1303, 1307 (9th Cir.1997). Ambiguity is a question of law for the court. Maffei v. N. Ins. Co. of N.Y., 12 F.3d 892, 898 (9th Cir.1993). While we ordinarily hesitate to grant summary judgment when a contract is ambiguous, there is no "rigid rule prohibiting reference to extrinsic evidence in resolving a contractual ambiguity on a summary judgment motion." San Diego Gas & Elec. Co., 132 F.3d at 1307. We may still consider whether, construing the evidence in the nonmovant's favor, the ambiguity can be resolved consistent with the nonmovant's position. Id.

A party opposing summary judgment must direct our attention to specific, triable facts. See Cal. Practice Guide: Federal Civil Procedure Before Trial § 14:101.1, at 14-24.2. General references without page or line numbers are not sufficiently specific. Id. (citing Nissho-Iwai Am. Corp. v. Kline, 845 F.2d 1300, 1307 (5th Cir.1988)); see also Carmen v. S.F. Unified Sch. Dist., 237 F.3d 1026, 1030 (9th Cir.2001) (citing similar holdings in the Fifth, Sixth, Seventh, and Tenth Circuits); Forsberg v. Pac. Northwest Bell Tel. Co., 840...

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