Westinghouse Electric Corp. v. Superior Court

• Citation: 16 Cal.3d 849,131 Cal.Rptr. 231,551 P.2d 847
• Decision Date: 27 April 1976
• Docket Number: S.F. 23380,S.F. 23376
• Court: United States State Supreme Court (California)
• Parties: Previously published at 16 Cal.3d 849 16 Cal.3d 849, 17 Cal.3d 259, 551 P.2d 847 WESTINGHOUSE ELECTRIC CORPORATION et al., Petitioners, v. The SUPERIOR COURT OF ALAMEDA COUNTY, Respondent; SAN FRANCISCO BAY AREA RAPID TRANSIT DISTRICT et al., Real Parties in Interest. (and four other matters.) * to

Page 231

131 Cal.Rptr. 231

Previously published at 16 Cal.3d 849

16 Cal.3d 849, 17 Cal.3d 259, 551 P.2d 847

WESTINGHOUSE ELECTRIC CORPORATION et al., Petitioners, v. The SUPERIOR COURT OF ALAMEDA COUNTY, Respondent SAN FRANCISCO BAY AREA RAPID TRANSIT DISTRICT et al., Real Parties in Interest. (and four other matters.) ^*

S.F. 23376 to S.F. 23380.

Supreme Court of California In Bank.

April 27, 1976.

As Modified May 6, 1976.

As Modified on Denial of Rehearing June 24, 1976.

Rehearing Denied July 21, 1976.

Moses Lasky, Robert N. Lowry, Charles B. Cohler, Brobeck, Phleger & Harrison, Pettit, Evers & Martin, Joseph Martin, Jr., Allan J. Joseph, Oliver L. Holmes, Susan L. Paulus, San Francisco, Robert W. Heidrich, Alfred J. Waldchen, Chula Vista, for Rohr Industries, Inc., Edward J. Ruff, Robert M. McLeod, H. Roger McPike, Jon T. Anderson, James P. Hargarten and Thelen, Marrin, Johnson & Bridges, San Francisco, for petitioners.

No appearance for respondent.

Robert D. Raven, Melvin R. Goldman, Stephen S. Dunham, Charles R. Farrar, Jr., Nelson G. Dong, Linda E. Shostak, Morrison & Foerster, San Francisco, Malcolm Barrett, Thomas Jackson and Gerald P. Martin, Jr., Oakland, for real parties in interest.

MOSK, Justice.

We decide five related matters that revolve around conflicting interpretations of one ambiguously worded sentence in a change of venue statute, Code of Civil Procedure section 394, subdivision (1).

The matters come to us on petitions for writs of mandate. In the action below, the San Francisco Bay Area Rapid Transit District (BART) seeks damages of more than $100 million from its principal contractors, who provided the district with allegedly defective equipment and faulty services. Defendants filed change of venue motions in an attempt to transfer the case out of respondent Alameda Superior Court. The court denied the motions, concluding (1) section 394 does not apply to a multicounty agency plaintiff such as BART, and (2) defendants are, in any event, ineligible to seek relief under section 394 because each of them does business in Alameda County. ¹

I

The first issue is whether a private party defendant sued by a multi-county agency may ever obtain the change of venue provided for by section 394. The problem arises because of the ambiguity in the second sentence of the section, which provides that 'Whenever an action or proceeding is brought by a county, city and county, city, or Local agency within a certain county . . . against a resident of another county . . . or a corporation doing business in the latter . . .' the action must be transferred, on motion of either party, to a neutral county. The court apparently reasoned that in a suit brought by an agency the transfer remedy is available only when plaintiff is located wholly within one county. As BART's operations encompass not only Alameda County, but also Contra Costa County and the City and County of San Francisco, the court held that the district is not a 'local agency within a county' and a change of venue is not available.

Some of the defendants urge that the phrase 'within a certain county' modifies not just 'local agency,' but the entire first part of the sentence. Under this interpretation, a transfer to a neutral county is available in appropriate cases whenever a governmental entity brings suit 'within a certain county . . ..'

While BART proposes a contrary tenable grammatical interpretation, ² it does not necessarily follow that section 394 precludes mandatory change of venue in actions brought by multi-county agencies. Assuming that 'within a certain county' modifies only 'local agency,' BART may still be a 'local agency within a certain county' for the purposes of section 394. Indeed, an analysis of the phrase within the context of the language of and purpose behind the entire statute leads inexorably to that conclusion.

To begin with, we have problems with BART's assertion that the clause on its face has a plain meaning. ³ The district's position would have merit if the statute referred to a 'local agency located wholly within a certain county.' But the phrase 'local agency within a county' is susceptible of another plausible interpretation in the context of the entire sentence. Prior to the Legislature's inclusion of governmental agencies within the scope of section 394, the second sentence of the section referred to suits 'brought by a county, city and county, or city, against a resident of another county, city and county, or city . . ..' Its meaning was clear: the sentence applied to suits brought by a county against residents of another county, by a city against residents of another city, and by the City and County of San Francisco against non-San Franciscans. However, when the Legislature sought to add agencies to the list of governmental plaintiffs subject to section 394, the addition of the phrase 'local agency' by itself would obviously have been inadequate. A suit by a 'local agency' against 'a resident of Another county' is grammatically irreconcilable, because an agency is not a county. Therefore, the phrase 'within a certain county' may well have been added to 'local agency' not to exclude regional agencies from the scope of the section, but to insure that the phrase 'against a resident of another county' would continue to have meaning. The proper interpretation of 'within a certain county' cannot be decided outside of the overall context of section 394.

The purpose of section 394 "is to guard against local prejudices which sometimes exist in favor of litigants within a county as against those from without and to secure to both parties to a suit a trial upon neutral grounds." (Finance & Construction Co. v. Sacramento (1928) 204 Cal. 491, 493, 269 P. 167, 168.) As the statute is remedial in its purpose, it should receive a liberal construction which will promote rather than frustrate the policy behind the law. (Ibid.; City of L.A. v. Pac. Tel. & Tel. Co. (1958) 164 Cal.App.2d 253, 256, 330 P.2d 888.)

These general principles were applied to a proceeding brought by an agency in Garrett v. Superior Court (1974), supra, 11 Cal.3d 245, 113 Cal.Rptr. 152, 520 P.2d 968. In that case, the Riverside County Flood Control and Water Conservation District instituted condemnation proceedings, and the nonresident owners of the affected property moved for a change of venue under section 394. In holding that the landowners were entitled to relief provided by the mandatory change of venue provisions of the statute, we declared, 'District is the type of 'local agency within a certain county' which has a potentially prejudicial advantage in a condemnation suit against a nonresident defendant. . . . Although there are other water districts and zones within Riverside County, it is still possible that a Riverside County juror will also be a District taxpayer with an interest in keeping the condemnation award unreasonably low. This situation would be precisely one which the Legislature must have intended to avoid by enacting section 394.' (Id. at p. 248, 113 Cal.Rptr. at p. 154, 520 P.2d at p. 970.)

The applicability of the Garrett reasoning to the present case is evident. BART is authorized to levy a property tax on Alameda County homeowners (Pub.Util.Code, §§ 29121, 29123) and is also funded by a 1/2 percent sales tax on goods bought in Alameda County. Rev. & Tax.Code, § 7261, subd. (a); Pub.Util.Code, § 29140.) While it was 'possible' in Garrett that a juror would be a district taxpayer, it is virtually Certain that an Alameda County juror in this case will be a BART taxpayer with more than an academic interest in a damage suit totaling more than $100 million. We are confronted with the paradigm case of potential prejudice that the Legislature sought to avoid by enacting section 394.

But BART contends that its interpretation of section 394 is justified on the ground that the Legislature apparently determined that any taxpayer prejudice in favor of a single-county agency is 'diluted' in the case of a regional agency, and thus application of the transfer remedy is precluded. This reasoning ignores subdivision (3) of section 394, which defines a local agency as 'any governmental district, board, or agency, or any other local governmental body or corporation, but shall not include the State of California or any of its agencies, departments, commissions, or boards.' The distinction made by the Legislature is between state agencies and other governmental agencies, not between regional agencies and single-county agencies. (Garrett, supra, p. 247, 113 Cal.Rptr. 152, 520 P.2d 968.) To the extent that the Legislature took into account the argument that potential prejudice could be diluted in suits involving governmental entities, it found that such dilution might take place in actions by or against the state government, not in litigation concerning multi-county agencies. ⁴

It might be argued that the above-quoted definition of 'local agency' is not dispositive of the question before us, because, in contrast to other portions of section 394, the Legislature in the second sentence refers not just to a local agency, but to a 'local agency within a certain county,' and thus an exception in certain situations may have been carved out to the general treatment of local agencies in section 394. The ramifications of such an argument, however, demonstrate its implausibility. It is worthwhile to consider all the possible actions involving local agencies that are covered unambiguously by other parts of section 394. The first sentence of subdivision (1) specifies that an action pitting any agency, regional or single-county, against another governmental entity may not even be brought in the home county of the local agency. ⁵ The third sentence provides that in an action brought against a local agency of any kind, change of venue will be available in most circumstances. ⁶ And, even under BART's interpretation, when a suit is...