Judge: Curtis A. Kin, Case: 22STCP03307, Date: 2023-08-15 Tentative Ruling

Case Number: 22STCP03307    Hearing Date: August 15, 2023    Dept: 82

Petitioner Amy Hutzel, in her Official Capacity as Executive Officer of the State Coastal Conservancy, demurs to the first and second causes of action in the Verified First Amended Petition of petitioner Ballona Wetlands Land Trust.

I.       Factual Allegations

             Petitioner Ballona Wetlands Land Trust is a non-profit, 501(c)(3) organization whose mission is to protect the greater Ballona Wetlands ecosystem from urban encroachment. (FAP ¶ 2.)

            Respondent California Department of Fish and Wildlife (“CDFW”) owns and operates the Ballona Wetlands Ecological Reserve (“BWER”). (FAP ¶ 3.) The BWER is a 577-acre protected wetland located south of Marina Del Rey. (FAP ¶ 12.) In 2000, the Legislature passed Proposition 12, which dedicated bond funds to the purchase and restoration of the BWER. (FAP ¶ 13.)

            Respondent Amy Hutzel is the Executive Officer of the State Coastal Conservancy (“Conservancy”), which is a non-regulatory state agency responsible for resource enhancement in the coastal zone. (FAP ¶ 4.) The Legislature has allocated bond money from Proposition 12 to the Conservancy for enhancement of wetlands that meet certain requirements. (FAP ¶¶ 4, 13.) Under Public Resources Code § 31111(c), Conservancy may award grants to other agencies to restore the BWER. (FAP ¶ 15.)

            In December 2020, CDFW approved a project to restore the BWER and certified an Environmental Impact Report with respect thereto. (FAP ¶¶ 3, 24.) On May 27, 2021, the Governing Board of the Conservancy (“Board”) authorized the disbursement of $1,692,360 in Proposition 12 funding for the express purpose of completing studies to finalize the design discharge of the Ballona Creek Channel, design of the new flood control levees and berms, and other engineering components of the project. (FAP ¶¶ 25, 26.)  The studies were necessary for CDFW to obtain approval of a federal Environmental Impact Statement from the U.S. Army Corps of Engineers. (FAP ¶ 25.)

The Conservancy staff report in support of the funding described “the additional design and permitting work to be accomplished with the recommended grant” in a section titled “Work to be Funded with this Authorization.” (FAP ¶¶ 27, 52.) The staff report identified the following six tasks and deliverables:

1)    working with the Los Angeles County of Public Works, Flood Control District (“LACFCD”) to obtain a permit from the Army Corps of Engineers (Corps) to modify the Ballona Creek channel;

2)    refining the Ballona Creek Channel modification designs from 30% to 60% completion as part of obtaining the Corps permit;

3)    working with the Corps to update the Ballona Creek watershed study to determine the appropriate design criteria for any modification of the Ballona Creek Flood Control Channel;

4)    hiring consultants to work with the Corps and LACFCD to model the watershed and establish a current-day design criteria;

5)    considering alterations of the proposed project to accommodate higher sea level projections during project refinement; and

6)    identifying additional potential sequences to further divide the project into smaller components during the refinement of the channel modification designs.

(FAP ¶ 28.) On November 30, 2021, the Conservancy and CDFW entered into a grant agreement, which incorporated the staff report in its entirety, including the section titled “Work to be Funded with this Authorization.” (FAP ¶ 29.)

            On April 1, 2022, CDFW issued a Request for Qualifications (“RFQ”) for a different set of tasks and deliverables than authorized in May 2021. (FAP ¶ 31.) Petitioner subsequently requested in writing that CDFW and Conservancy inform the Board at the next meeting that the RFQ deviated from the Board’s authorized tasks and deliverables. (FAP ¶ 32.) Conservancy staff informed petitioner that “[w]e aren’t planning on giving an update to our Board on DFW’s RFQ.” (FAP ¶ 32.)  

            On June 22, 2022, petitioner made a formal request to the Executive Officer of the Conservancy for the Board to be given the opportunity to approve or deny the new set of tasks and deliverables described in the RFQ. (FAP ¶ 33.) On June 24, 2022, Conservancy staff stated that no meeting would be scheduled. (FAP ¶ 34.)

On June 24, 2022, CDFW entered into a services contract with real party in interest Environmental Science Associates (“ESA”) to perform the work described in the RFQ. (FAP ¶ 37.) The ESA contract did not include any of the tasks or deliverables authorized by the Board. (FAP ¶ 41.) The ESA contract exceeds the authorization provided in the May 27, 2021 staff report and subsequent grant agreement. (FAP ¶¶ 37, 39.)

After having made multiple requests to CDFW with respect to the status of the project, petitioner received a copy of the ESA contract on July 12, 2022. (FAP ¶ 39.) On July 15, 2022, petitioner submitted a written request to CDFW and Conservancy, with a copy to ESA, for the Board to consider approving or denying the new tasks and deliverables in the RFQ. (FAP ¶ 42.) Petitioner did not receive any response. (FAP ¶ 42.)

Petitioner alleges three causes of action: (1) failure of the Conservancy Executive Officer to perform a ministerial duty pursuant to Public Resources Code § 31103 and Title 14 CCR § 13734; (2) expenditure of funds in excess of authority; and (3) Code of Civil Procedure section 526a (illegal and wasteful expenditure of public funds).

Petitioner seeks a writ of mandate “enjoining the Executive Office or other staff of Respondent State Coastal Conservancy from disbursing funds to CDFW pursuant to the May 27, 2021 funding authorization by the Board for any work that was not included in the Board’s authorization.” (FAP Prayer (i).) Petitioner also seeks a writ of mandate “compelling the Conservancy Executive Officer to take such further action as deemed necessary by the Court to fulfill her ministerial duty ‘to see that the directions and policies of the Conservancy are carried out fully and faithfully’, such as by informing the Conservancy Board of the discrepancy between the scope of work presented to the Board for approval and the scope of work CDFW actually contracted for, thereby allowing the Board to issue further direction to staff regarding the disposition of those funds.” (FAP Prayer (ii).)

Petitioner also seeks an injunction and declaratory relief against CDFW and ESA prohibiting the expenditure of Proposition 12 funds on tasks and deliverables that were not authorized for funding by the Board. (FAP Prayer (iii) – (vi).)

II.      Procedural History

 On September 6, 2022, petitioner filed a Verified Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief.

On February 21, 2023, the Court (Hon. Mary H. Strobel) denied petitioner’s motion for preliminary injunction. The Court also sustained Conservancy’s demurrer with leave to amend.

On March 13, 2023, petitioner filed the First Amended Petition. CDFW and ESA filed answers to the FAP. On May 17, 2023, respondent Amy Hutzel filed a demurrer and meet and confer declaration. On July 26, 2023, petitioner filed an opposition. On August 1, 2023, Hutzel filed a reply.

III.     Analysis

            The request for judicial notice is GRANTED, pursuant to Evidence Code § 452(d).

A.           Statute of Limitations

Hutzel also argues that the petition is untimely filed.

            “[C]ontracts subject to validation under Government Code section 17700 are those that are in the nature of, or directly relate to the state or a state agency's bonds, warrants, or other evidences of indebtedness.” (California Commerce Casino, Inc. v. Schwarzenegger (2007) 146 Cal.App.4th 1406, 1429-30 [California Commerce].) Government Code § 17700(a) allows the state or any state agency to bring an action to determine the validity of its bonds.

A public agency may bring a validation action within 60 days of the contracts that directly relate to a state agency’s bonds. (CCP § 860; California Commerce, 146 Cal.App.4th at 1429-30.) If the public agency does not bring a validation action, any interested person may bring a reverse validation action within the same 60-day period under CCP § 863. (California Commerce, 146 Cal.App.4th at 1424.) “Given the policies underlying the validation statutes, including the need to limit the extent to which delay due to litigation may impair a public agency's ability to operate financially, the 60–day limitations period for filing a validation action (Code Civ. Proc., § 860) is not unreasonable.” (Id. at 1420.)

            Petitioner alleges that the CDFW entered into an ultra vires contract with ESA on June 24, 2022. (FAP ¶¶ 37, 104.) Hutzel argues that petitioner did not file the instant action until September 6, 2022, more than 60 days after the ESA contract. (Demurrer at 21:5-8; Reply at 10:17-19.)

            Conservancy does not have standing to assert a statute of limitations argument based on the ESA contract because they were not an alleged party to the contract. Both CDFW and ESA asserted affirmative defenses based on the statute of limitations set forth in CCP § 860 but did not file any demurrer. (CDFW Answer to FAP, Third Affirmative Defense; ESA Answer to FAP, Seventh Affirmative Defense.)

            While it is true petitioner alleges that Conservancy entered into a grant agreement with CDFW on November 30, 2021 based on its authorization of disbursement of Proposition 12 funding on May 27, 2021 (FAP ¶¶ 26, 29), petitioner does not challenge the grant agreement. (FAP ¶ 72; Opp. at 10:25-11:12.) Simply put, the only contract whose validity is being question is the ESA contract. Because Conservancy is not a party to the ESA contract, Conservancy may not demur based on the ground that the instant petition is untimely filed.

B.           Ministerial Duty or Abuse of Discretion

Hutzel contends that petitioner fails to allege facts demonstrating that she has any clear, present, ministerial duty to perform.

“There are two essential requirements to the issuance of a traditional writ of mandate: (1) a clear, present and usually ministerial duty on the part of the respondent, and (2) a clear, present and beneficial right on the part of the petitioner to the performance of that duty.” (California Assn. for Health Services at Home v. State Dept. of Health Services (2007) 148 Cal.App.4th 696, 704.) “‘A ministerial duty is an obligation to perform a specific act in a manner prescribed by law whenever a given state of facts exists, without regard to any personal judgment as to the propriety of the act. [Citation.]’” (Center for Biological Diversity v. Department of Forestry & Fire Protection (2014) 232 Cal.App.4th 931, 952, quoting People v. Picklesimer (2010) 48 Cal.4th 330, 340.)

Hutzel allegedly failed to notify the Board that the ESA Contract does not cover any services that were authorized by the Board. (FAP ¶ 89.) According to petitioner, Hutzel allegedly allowed CDFW to ignore the policies and objectives of the Board. (FAP ¶ 87.) Petitioner alleges that Hutzel has a ministerial duty to “carry out the powers and functions set forth in [the Conservancy’s enabling litigation]” and “to see that the directions and policies of the Conservancy are carried out fully and faithfully” under Public Resources Code (“PRC”) § 31103 and 14 CCR § 13734.[1] (FAP ¶¶ 67, 85, 90.)

            Neither PRC § 41103 nor 14 CCR § 13734 state how Hutzel must carry out the powers and functions of the Conservancy. In other words, they do not prescribe any specific act for Hutzel to perform, which would have the effect of divesting Hutzel of any discretion. These cited authorities simply require Hutzel to exercise her judgment in determining what actions are necessary to administer the affairs of the Conservancy. (See County of Los Angeles v. City of Los Angeles (2013) 214 Cal.App.4th 643, 653–54 (County of Los Angeles) [“Discretion…is the power conferred on public functionaries to act officially according to the dictates of their own judgment”].)

            Petitioner cites Stanson v. Mott (1976) 17 Cal.3d 206, 213 for the proposition that funds authorized for a particular purpose must be spent for such purposes. (Stanson¸ 17 Cad.3d at 213.) “Executive officials are not free to spend public funds for any ‘public purpose’ they may choose, but must utilize appropriated funds in accordance with the legislatively designated purpose.” (Ibid.) However, while the cited proposition from Stanson might have arguable relevant as to petitioner’s allegations concerning the contract between CDFW and ESA, it is inapposite as to the Conservancy.  Prior to the execution of the ESA contract, the Conservancy lawfully granted Proposition 12 funding to CDFW to complete necessary studies for the restoration of BWER, as allowed under Public Resources Code § 31111(c). (FAP ¶ 26; see Pub. Res. Code § 31111(c) [Conservancy may award grants to public agencies for the purpose of preparing plans and feasibility studies].)

            As for any purported impropriety with respect to the ESA contract, petitioner does not cite any statute, regulation, or case law requiring Hutzel, the demurring respondent, to take any specific action upon learning that the ESA contract did not cover tasks that were purportedly authorized by the Board. To the contrary, PRC § 31103 and 14 CCR § 13734 vest Hutzel with the discretion to determine that taking no action or withholding any objection to the ESA contract furthers the objective to protect and restore the BWER. (See PRC § 5096.352 [designating Proposition 22 funds to Conservancy for the acquisition, protection, and restoration of wetlands projects].)

Petitioner also cites State Bd. of Education v. Honig (1993) 13 Cal.App.4th 720 (Honig) for the assertion that Hutzel has a ministerial duty to carry out the policies of the Governing Board that oversees the Conservancy. (FAP ¶ 69.)  Petitioner’s reliance on Honig is unpersuasive.  In Honig, after having reviewed the pertinent provisions of the California Constitution and Education Code, the Court of Appeal found that the Superintendent of Public Instruction had a duty to execute certain policies which the Board of Education had decided. (Honig, 13 Cal.App.4th at 770-71 [directing Superintendent to execute legal services contract requested by Board of Education based on Education Code § 33111, which states that Superintendent “shall execute, under direction of the State Board of Education, the policies which have been decided upon by the board”].) Here, by contrast, petitioner cites no statutory, regulatory, or judicially created authority clearly requiring Hutzel to notify the Board of the ESA contract or convene any meeting for consideration of the ESA contract.

As was the case in the ruling on the demurrer to the original Petition, petitioner still has not identified any statute, regulation, or case which requires the Executive Officer to take any specific action. (See RJN Ex. A at 18.)

            In the alternative, petitioner alleges that Hutzel abused her discretion by not taking any action to ensure that the Board was notified that the CDFW contracted with ESA for services that were not authorized by Conservancy. (FAP ¶¶ 33, 34, 49, 92; Demurrer at 2:9-10.) “An ordinary mandamus action under Code of Civil Procedure section 1085 permits judicial review of ministerial duties as well as quasi-legislative acts of public agencies.” (Carrancho v. California Air Resources Board (2003) 111 Cal.App.4th 1255, 1264-65.) Although, as discussed above, petitioner fails to allege any ministerial duty that Hutzel breached, “[m]andamus may issue to correct the exercise of discretionary legislative power, but only if the action taken is so palpably unreasonable and arbitrary as to show an abuse of discretion as a matter of law.” (Id. at 1265.)

            Here, the First Amended Petition does not seek to remedy any exercise of discretionary legislative power. While the Conservancy authorized a disbursement of Proposition 12 funding and subsequently entered into a grant agreement with CDFW (FAP ¶¶ 26, 29), this is not the gravamen of the relief which petitioner seeks. Rather, petitioner seeks to address the application of the funding to pay for the ESA contract, which is allegedly outside the scope of Conservancy’s authorization. (FAP ¶¶ 98-101; FAP Prayer (i-iv).) Hutzel’s alleged failure to notify the Board of the ESA contract is not an exercise of legislative power, such as the promulgation of regulations or the appropriation of funds. (See California School Bds. Assn. v. State Bd. of Education (2010) 191 Cal.App.4th 530, 543 [quasi-legislative rules promulgated based on Legislature’s delegation of lawmaking power to agency]; California Assn. of Retail Tobacconists v. State of California (2003) 109 Cal.App.4th 792, 817 [“legislative power includes the power to appropriate funds and to establish spending priorities”].)

For the foregoing reasons, even if the services covered by the ESA contract were outside the scope of the Conservancy’s authorization, petitioner fails to allege how such purportedly ultra vires expenditures could be addressed by mandamus relief against Hutzel, Conservancy’s Executive Officer. (See Reply at 9:8-10 [“At its core, this litigation will decide whether or not CDFW’s contract with ESA is within the scope of the Conservancy’s Proposition 12 grant. Neither the Conservancy nor its executive officer are necessary to that determination”].) Petitioner does not allege any ministerial duty or any exercise of discretionary legislative power which can be remedied by CCP § 1085 writ relief.

            The demurrer is SUSTAINED based on the failure to allege any ministerial duty or abuse of discretion.

C.           Declaratory Relief

Hutzel argues that the declaratory relief claim is duplicative of the writ claim.

As the Court ruled with respect to the originally filed Petition, a declaratory relief claim is not assigned to the writs and receivers departments under Local Rules 2.8(d) and 2.9. Accordingly, the Court declines to rule on the demurrer with respect to the declaratory relief claim.

IV.     Conclusion

            The demurrer is SUSTAINED. Considering that the Court previously sustained the demurrer to the originally filed Petition based on failure to allege a ministerial duty and petitioner was unable to remedy this defect, the Court is inclined to sustain the demurrer WITHOUT LEAVE TO AMEND. The Court inquires from petitioner how it can amend the petition to allege a ministerial duty or abuse of discretion of discretionary legislative power.