Judge: Curtis A. Kin, Case: 23STCP00060, Date: 2024-09-03 Tentative Ruling

Case Number: 23STCP00060    Hearing Date: September 3, 2024    Dept: 86

In three related cases (23STCP00060, 23STCP00070, and 23STCP00106), the petitioners seek a writ of mandate directing respondents City of Los Angeles, Los Angeles City Council, Los Angeles City Planning Commission, and Karen Bass in the official capacity as the Mayor of the City of Los Angeles to strike Ordinance No. 187,709, Zoning Administrator Interpretation No. ZA-2022-8897-ZAI, and Zoning Administrator Memorandum No. 141.  For the reasons set forth below, a writ of mandate shall issue, as the Ordinance and related guidance materials are preempted by state law and the “home rule” doctrine does not save them from such preemption.

I.       Factual Background[1]

A.           Petitioners’ Operations

Petitioners E & B Natural Resources Management Corporation, Hillcrest Beverly Oil Corporation, E&B ENR I, LLC, and Elysium Natural Resources, LLC (collectively “E&B”) and petitioners Warren E&P, Inc., Warren Resources of California, Inc., and Warren Resources, Inc. (collectively “Warren”) produce over 10,000 barrels of oil per day and conduct oil and gas operations at several locations within respondent City of Los Angeles (“City”). (AR 7887, 76834; Warren’s Fourth Amended Petition (“4AP”), ¶ 21.) E&B and Warren both own mineral rights in fee and under lease throughout the City. (See AR 7640-41, 7669-70, 8434, 76825, 78802; see also 4AP ¶¶ 133, 137, 178, 222.) Their operations benefit thousands of mineral owners like members of petitioner National Association of Royalty Owners-California through the payment of royalties. (AR 7631, 7659, 7640-41, 7669-70, 76835.)

B.           Methods and Practices to Increase Recovery of Hydrocarbons

Oil operators within the City use certain methods and practices to recover underground hydrocarbons through their existing operations, as authorized by state law. (AR 76824-26, 76835-37, 76988, 76990.) Drilling and redrilling of wells is a method and practice used to find and extract and, where wells mechanically fail, maintain the recovery of oil reserves. (See, e.g., AR 76825, 76861 [City concluded redrilling from established sites is a “normal and necessary function of petroleum operations” required to “find and extract additional oil reserves” and “correct extraction problems which occur from time to time”], 77296 [City concluded “[t]he most frequent purpose of the re-drilling is to remedy down hole problems that have developed with the wells, and more specifically when the wells are almost dry,” and “[w]ithout such re-drilling the wells are not fully operational”]; see also AR

7640-41, 7669-70, 76835-36 [concluding the same].)

Operators maintain wells that are producing oil through redrilling, maintenance, and rework methods and practices, including, for example, repairing or altering the casing of a well or its function, adding perforations into an existing well, treating sanding up in the wellbores, or fixing other mechanical or performance failures that permanently alter the casing of the wells. (AR 7640-41, 7669-70, 76827, 76835-36, 76968-89, 78804, 78809, 79182.) If these activities were not allowed, wells would have to be shut-in (closed off), and a field would become non-productive. (AR 76836, 76968-89, 77296.)

Operations at certain locations are only possible through the method and practice of production known as Enhanced Oil Recovery (“EOR”) through a waterflood. (AR 76825, 76835-36, 76987-90.) Waterflooding involves the injection of water to increase the mobilization of oil within the underlying reservoirs, which is necessary for the recovery of oil from these formations. (AR 76835-36, 76988.) Wastewater injection wells are used to inject water back into the formation so the waterflood operations can pressurize extraction from the wells.[2] (AR 76835-36, 76988.) Wastewater injection wells are thus a necessary method and practice used for an EOR waterflood, and those wells require maintenance, including, for example, replacing inner lines, repairing holes in the casing, and acidizing maintenance to maintain the well’s ability to inject fluids. (AR 76835-36, 76987-90.) If oil operators cannot maintain their wastewater injection wells through these methods and practices and cannot drill new injection wells to replace old ones that have failed, the waterflood will not work, which impacts the ability to recover oil from underlying reservoirs. (AR 76835-36, 76987-90.)

E&B and Warren have historically utilized these methods and practices within the City after securing Notice of Intention (“NOI”) approvals from the State Oil and Gas Supervisor through the California Geologic Energy Management Division (“CalGEM”). (AR 76836, 76989.)

C.           State Regulation of Oil and Gas Production

CalGEM is “tasked with overseeing the state’s drilling, operation, maintenance, and plugging and abandonment of oil and gas wells.” (Chevron U.S.A. Inc. v. County of Monterey (2023) 15 Cal.5th 135, 140 (Chevron II),[3] citing Pub. Res. Code §§ 3002, 3100, et seq., 3106(a).)[4] “CalGEM is a division of the Department of Conservation and is led by the ‘State Oil and Gas Supervisor.’ [Citations.]” (Chevron II, 15 Cal.5th at 140, citing §§ 3001, 3002, 3004.)

Public Resources Code section 3106 “directs the supervisor to administer the state’s regulations in a way that serves the dual purpose of ensuring the state has adequate oil and gas resources, while protecting the environment.” (Chevron II, 15 Cal.5th at 144.)  Section 3106(a) states in relevant part:

The supervisor shall so supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities attendant to oil and gas production…so as to prevent, as far as possible, damage to life, health, property, and natural resources; damage to underground oil and gas deposits from infiltrating water and other causes; loss of oil, gas, or reservoir energy, and damage to underground and surface waters suitable for irrigation or domestic purposes by the infiltration of, or the addition of, detrimental substances.

Additionally, section 3106(b) states in relevant part:

The supervisor shall also supervise the drilling, operation, maintenance, and abandonment of wells so as to permit the owners or operators of the wells to utilize all methods and practices known to the oil industry for the purpose of increasing the ultimate recovery of underground hydrocarbons and which, in the opinion of the supervisor, are suitable for this purpose in each proposed case. To further the elimination of waste by increasing the recovery of underground hydrocarbons, it is hereby declared as a policy of this state that the grant in an oil and gas lease or contract to a lessee or operator of the right or power, in substance, to explore for and remove all hydrocarbons from any lands in the state…is deemed to allow the lessee or contractor…to do what a prudent operator using reasonable diligence would do, having in mind the best interests of the lessor, lessee, and the state in producing and removing hydrocarbons, including, but not limited to, the injection of air, gas, water, or other fluids into the productive strata…when these methods or processes employed have been approved by the supervisor….

Division 3 of the Public Resources Code regulates oil and gas exploration and extraction, including requiring an operator to secure an NOI approval from the Supervisor through CalGEM for any methods and practices that involve drilling, redrilling, deepening, reworking/maintenance, plugging, or permanently altering the

casing of a well. (See, e.g., §§ 3203, 3229, 3230; see also 14 C.C.R. § 1720(b) [defining “rework” to include “any operation subsequent to drilling that involves deepening, redrilling, plugging, or permanently altering in any manner the casing of a well or its function”].) The Public Resources Code also regulates bonding (§§ 3204-3207), abandonment of wells (§ 3208), recordkeeping (§§ 3210-3216), blowout prevention (§ 3219), well casing to prevent water pollution (§ 3220), protection of water supplies (§§ 3222, 3228), repairs (§ 3225), regulation of production facilities (§ 3270), waste of gas (§§ 3300-3314), unit operations (§§ 3630-3690), and oil sumps (§§ 3780-3787).

            The implementing regulations, in turn, address the process for oil producers and well operators to obtain state approval of “drilling, reworking, injection, plugging, or plugging and abandonment operations” (14 C.C.R. § 1714) and provide instructions and timelines for filing well and safety records with CalGEM (14 C.C.R. § 1724.1). These regulations are “statewide in application for onshore drilling, production, and injection operations,” and “[a]ll onshore prospect, development, and service wells shall be drilled and operated in accordance with” them. (14 C.C.R. § 1712.) The regulations further address design, inspection, maintenance, operating, and recordkeeping requirements for oilfield facilities and pipelines. (14 C.C.R. §§ 1773-1773.5, 1774-1774.2, 1777-1777.4.)

D.           Adoption of Ordinance Addressing Oil Drilling

In April 2017, respondent City Council of the City of Los Angeles (“City Council”) introduced a motion instructing the Department of City Planning (“DCP”) to consider possible changes to the Los Angeles Municipal Code (“LAMC”) relating to oil drilling. (AR 8447.) Over the next five and a half years, the City Council held multiple public hearings and took hundreds of public comments on various proposals. On January 26, 2022 (AR 6529-80), the City Council directed the DCP to draft an ordinance prohibiting new oil extraction drilling activities in respondent City of Los Angeles (“City”) and making existing extraction activities a nonconforming use, subject to the code’s existing 20-year amortization period. (AR 15461[Report], 15464 [Motion].) The City Planning Commission (“CPC”) recommended approval of the DCP’s proposed ordinance by the City Council. (AR 189-221.) On December 2, 2022, the City Council voted 12-0 to adopt Ordinance No. 187,709 (“Ordinance”), the revised Mitigated Negative Declaration and errata, and all necessary findings in support. (AR 131 [council action]; 135-54 [final Ordinance]; 216-21 [CPC Findings].) The Ordinance took effect January 18, 2023.

E.           Effect of Ordinance on Oil Drilling

The Ordinance amended LAMC sections 12.03, 12.20, 12.23, 12.24, and 13.01. (AR 135-54.) First, it amended sections 12.23(C)(4)(a) and (b) to make all existing oil wells citywide a nonconforming use. (AR 136-37.) As a result, operators with valid approvals would have to discontinue their existing permitted operations after 20 years. After the expiration of 20 years, the uses would need to be removed. (AR 136-37.) The Ordinance also provides that no new wells may be drilled and that existing wells may not be redrilled, deepened, or maintained. (AR 136, 3055-81 [CPC staff report].)

Second, the Ordinance amended LAMC section 12.23(C)(4)(a) to authorize the Zoning Administrator (“ZA”) to allow that a nonconforming oil well could be maintained, drilled, re-drilled, or deepened if necessary to “prevent or respond to a threat to public health, safety, or the environment.” (AR 136.)

Third, the Ordinance deleted sections 13.01-H and I, which previously allowed the ZA to grant discretionary applications to drill, deepen, or maintain an oil well. (AR 152; RJN Ex. H at 189-90 [former version of § 13.01].) These sections were deleted in accordance with the Ordinance’s purpose of making all oil uses nonconforming and to ban the drilling of new wells within the City. Similarly, the Ordinance deleted the portions of former LAMC section 13.01 that allowed for the creation of new oil drilling districts. (AR 138; RJN Ex. H at 176-78 [former version of § 13.01(C) and (D)].)

The City Council adopted the Ordinance and made findings that the Ordinance was necessary to preserve the environment, as well as to protect the public health, safety, and welfare of people and property within the City. (AR 135-36, 189, 216-21, 3055-81 [CPC staff report].)

F.           Zoning Administrator Interpretation

Pursuant to former LAMC section 12.21.A.2 (subsequently renumbered section 13A.1.7.D.2), the City’s ZA “shall…have authority to interpret zoning regulations when the meaning of the regulation is not clear, either in general or as it applies to a specific property or situation.” The ZA found that the terms relating to oil well maintenance were undefined in the City’s zoning code and that in the past, the term was defined on a case-by-case basis; thus, the ZA exercised her authority to provide a clear and consistent definition of the term, as used in the City’s zoning code and in the Ordinance. (AR 8342-49.) On January 17, 2023, the ZA issued Zoning Administrator Interpretation No. ZA-2022-8897-ZAI (“ZAI”). (AR 8342-49.) Based on research and analysis which included interviews with CalGEM, the South Coast Air Quality Management District (“SCAQMD”), and oil operators, a review of scientific research and academic articles, and a historical code review (AR 35877-35918 [report]; 78814-31 [presentation]), the ZAI defined the terms “to maintain [an oil well]” in former LAMC Section 13.01-H and “maintained” in the new LAMC section 12.23.C.4 (AR 8342-49).

Specifically, the ZAI defined maintenance to include any “rework” activity that requires a notice of approval from CalGEM or any activity that requires operators to submit specified notification to the SCAQMD. (AR 806, 8342, 8345, 8347-48) Petitioners Warren Resources of California, Inc. and E & B Natural Resources Management Corporation appealed the ZAI on the grounds that it was preempted by state law. (AR 79121-62.) Following a public hearing, the CPC granted petitioners’ appeals on one narrow issue (AR 35905) and denied the other appeal points, including preemption. (AR 35892-35918 [Appeal Recommendation Report], 35919-27 [Amended ZAI]; 79832-43 [letter of determination].)

To further assist in the implementation of the Ordinance, the ZA also prepared ZA Memorandum No. 141 (“ZA Memo 141”). (AR 8331-41.) ZA Memo 141 sets forth the procedures for the acceptance and processing of applications for a health and safety exception, which, if granted, would allow an operator to maintain, drill, redrill, or deepen a nonconforming oil well, as permitted under the Ordinance. (AR 8331-41.)

II.      Procedural History

            On January 10, 2023, in case number 23STCP00060, petitioners Warren E&P, Inc., Warren Resources of California, Inc., and Warren Resources, Inc. filed a Verified Petition for Writ of Mandate. On February 3, 2023, Warren filed a Verified First Amended Petition for Writ of Mandate. On April 18, 2023, Warren filed a Verified Second Amended Verified Petition for Writ of Mandate. On September 15, 2023, Warren filed a Verified Third Amended Petition for Writ of Mandate. On November 20, 2023, Warren filed a Verified Fourth Amended Petition for Writ of Mandate.

On January 12, 2023, in case number 23STCP00070, petitioners E & B Natural Resources Management Corporation, Hillcrest Beverly Oil Corporation, E&B ENR I, LLC, and Elysium Natural Resources, LLC filed a Verified Petition for Writ of Mandate. On April 7, 2023, E&B filed a First Amended Verified Petition for Writ of Mandate. On November 6, 2023, E&B filed a Verified Second Amended Petition for Writ of Mandate.

On January 12, 2023, in case number 23STCP00106, petitioners National Association of Royalty Owners-California, Inc., Mekusukey Oil Company, LLC, NJB Wolf Family LLC, and The Termo Company (collectively “NARO”) filed a Verified Petition for Writ of Mandate.

On February 26, 2024, respondents City of Los Angeles, City Counsel of the City of Los Angeles, and Karen Bass, in her official capacity as Mayor of the City of Los Angeles filed Answers to the operative petitions in each of the aforementioned cases.

            On January 30, 2023, the Court (Hon. Mary H. Strobel, presiding) related the three cases—Warren E&P, Inc. et al. v. City of Los Angeles, et al. (23STCP00060), E & B Natural Resources Management Corporation, et al. v. City of Los Angeles, et al. (23STCP00070), and National Association of Royalty Owners-California, Inc. et al. v. City of Los Angeles et al. (23STCP00106).  The Court also deemed a fourth case— Native Oil Producers and Employees of California et al. v. City of Los Angeles, et al. (23STCP00085)—related to the other three at that time.[5]

            On April 20, 2023, the Court (Judge Strobel) stayed all non-writ causes of action in all of the cases until the Court ruled on the writ of mandamus causes of action. On September 19, 2023, per stipulation of the parties, the Court ordered that petitioners’ state preemption claims in all the related cases would be jointly litigated in a first phase of litigation.

            On April 5, 2024, with respect to this first phase of litigation, petitioners filed opening briefs. On June 7, 2024, respondents filed an opposition. On July 12, 2024, petitioners filed replies. The Court has received an electronic copy of the administrative record and a hard copy of the joint appendix.

III.     Standard of Review

The instant petition for writ of mandate is brought pursuant to CCP § 1085. Traditional mandamus is used to challenge the constitutionality or validity of legislative matters. (City of Redondo Beach v. Padilla (2020) 46 Cal.App.5th 902, 909.)

The petition raises pure questions of law concerning the validity of the Oil Ordinance and related guidance. “‘On questions of law arising in mandate proceedings, [the court] exercise[s] independent judgment.’…. Interpretation of a statute or regulation is a question of law subject to independent review.” (Christensen v. Lightbourne (2017) 15 Cal.App.5th 1239, 1251.)

The petitioner bears the burden of proof in a petition for writ of mandate proceeding brought under CCP § 1085. (California Correctional Peace Officers Assn. v. State Personnel Bd. (1995) 10 Cal.4th 1133, 1153.)

IV.     Request for Judicial Notice

Petitioners’ objections to respondents’ requests for judicial notice are OVERRULED. Unlike the extra-record declaration NARO previously sought to admit to “contradict evidence upon which the administrative agency relied in making its quasi-legislative decision,” the proffered charter provisions (Exs. A, B), city ordinances (Exs. C-F), former and current LAMC sections (Exs. G-I), web site listing general law counties and charter counties (Ex. J), and Senate Bill 1137 are “admissible to provide background information” concerning the City’s regulation of oil and gas production. (Outfitter Properties, LLC v. Wildlife Conservation Bd. (2012) 207 Cal.App.4th 237, 251.)  Accordingly, respondents’ requests to take judicial notice of Exhibits A-J are GRANTED. (Evid. Code §§ 452(a), (b), (h).)

V.      Analysis     

            The principal question presented by petitioners is whether the Ordinance and subsequent interpretive guidance are preempted by section 3106 of the Public Resources Code. However, it is undisputed that the City of Los Angeles is a charter city. (City RJN Exs. A, B, citing Charter §§ 101, 240.) Accordingly, the Court must also analyze the interplay between state preemption and the home rule doctrine.

A.           State Preemption

Article XI, section 7 of the California Constitution states: “A county or city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws.” “‘If otherwise valid local legislation conflicts with state law, it is preempted by such law and is void.’” (Sherwin-Williams Co. v. City of Los Angeles (1993) 4 Cal.4th 893, 897, quoting Candid Enterprises, Inc. v. Grossmont Union High School Dist. (1985) 39 Cal.3d 878, 885.)

Local legislation conflicts with state law when it either “duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication.” (Sherwin-Williams, 4 Cal.4th at 897, internal quotations omitted.) “Local legislation is ‘duplicative’ of general law when it is coextensive therewith.” (Ibid.) “[L]ocal legislation is ‘contradictory’ to general law when it is inimical thereto.” (Id. at 898.) “[L]ocal legislation enters an area that is ‘fully occupied’ by general law when the Legislature has expressly manifested its intent to ‘fully occupy’ the area, or when it has impliedly done so in light of one of the following indicia of intent: ‘(1) the subject matter has been so fully and completely covered by general law as to clearly indicate that it has become exclusively a matter of state concern; (2) the subject matter has been partially covered by general law couched in such terms as to indicate clearly that a paramount state concern will not tolerate further or additional local action; or (3) the subject matter has been partially covered by general law, and the subject is of such a nature that the adverse effect of a local ordinance on the transient citizens of the state outweighs the possible benefit to the’ locality.” (Ibid., citations omitted.)

“The party alleging preemption ‘has the burden of demonstrating’ it.” (Chevron II, 15 Cal.5th at 142-43, quoting Big Creek Lumber Co. v. County of Santa Cruz (2006) 38 Cal.4th 1139, 1149.)

B.           Home Rule Doctrine

Known as the “home rule” doctrine, article XI, section 5(a) of our Constitution provides that charter cities are authorized to legislate with respect to municipal affairs, stating: “It shall be competent in any city charter to provide that the city governed thereunder may make and enforce all ordinances and regulations in respect to municipal affairs, subject only to restrictions and limitations provided in their several charters and in respect to other matters they shall be subject to general laws.” (Cal. Const., art. XI, § 5; California Fed. Savings & Loan Assn. v. City of Los Angeles (1991) 54 Cal.3d 1, 5 [Cal Fed Savings].) Thus, with respect to the municipal affairs of charter cities, the Legislature is prohibited from “interfer[ing] in the government and management of the municipality.” (Ex parte Braun (1903) 141 Cal. 204, 209.)

            However, the power of a charter city to govern its municipal affairs must give way when the state enacts a statute that is “reasonably tailored to the resolution of a subject of statewide concern.” (Cal Fed Savings, 54 Cal.3d at 7 [“In the event of a true conflict between a state statute reasonably tailored to the resolution of a subject of statewide concern and a charter city [ ] measure, the latter ceases to be a ‘municipal affair’ to the extent of the conflict and must yield”].) In deciding whether the state can enact a law with respect to a municipal affair, our Supreme Court articulated a four-step inquiry in Cal Fed Savings:

First, a court must determine whether the city ordinance at issue regulates an activity that can be characterized as a “municipal affair.” Second, the court “must satisfy itself that the case presents an actual conflict between [local and state law].” Third, the court must decide whether the state law addresses a matter of “statewide concern.” Finally, the court must determine whether the law is “reasonably related to ... resolution” of that concern and “narrowly tailored” to avoid unnecessary interference in local governance. “If ... the court is persuaded that the subject of the state statute is one of statewide concern and that the statute is reasonably related to its resolution [and not unduly broad in its sweep], then the conflicting charter city measure ceases to be a ‘municipal affair’ pro tanto and the Legislature is not prohibited by article XI, section 5(a), from addressing the statewide dimension by its own tailored enactments.”

(State Building & Construction Trades Council of California v. City of Vista (2012) 54 Cal.4th 547, 556, citing Cal Fed Savings, 54 Cal.3d at 16-17, 24, internal citations omitted.) Doubts as to whether a concern is “statewide” or a “strictly municipal affair” must be resolved in favor of the authority of the state. (Baggett v. Gates (1982) 32 Cal.3d 128, 140.)

C.           Whether the Ordinance and Interpretive Guidance are Preempted

The Court first discusses whether the Ordinance, ZAI, and ZA Memo 141 are preempted by section 3106. In Chevron II, our Supreme Court examined whether two provisions in a voter-passed Monterey County ordinance—Measure Z—were preempted by section 3106. One of the provisions stated “development, construction, installation, or use of any facility, appurtenance, or above-ground equipment, whether temporary or permanent, mobile or fixed, accessory or principal, in support of oil and gas wastewater injection or oil and gas wastewater impoundment is prohibited on all lands within the County's unincorporated area.” (Chevron II, 15 Cal.5th at 140-41.) The other provision stated that “drilling of new oil and gas wells is prohibited on all lands within the County’s unincorporated area,” but it did “not affect oil and gas wells drilled prior to the Effective Date and which have not been abandoned.” (Id. at 141.)

With respect to Measure Z’s prohibition on wastewater injection and impoundment, the Supreme Court held it was preempted by section 3106, because that provision of Measure Z contradicted the state statute.  The Court explained:

By providing that certain oil production methods may never be used by anyone, anywhere, in the County, Measure Z nullifies—and therefore contradicts—section 3106’s mandate that the state “shall” supervise oil operation in a way that permits well operators to “utilize all methods and practices” the supervisor has approved. In other words, whereas section 3106 directs the supervisor to make decisions about the use of all oil production methods—inclusive of those methods Measure Z identifies—Measure Z authorizes the County to make decisions regarding some of those methods. Thus, were any oil producer to ask the state to decide whether those methods are authorized for use in the County, Measure Z, by banning those methods, has made that decision for—and in lieu of—the supervisor; it has, in all cases, usurped the supervisor’s statutorily granted authority to decide whether those methods are “suitable ... in each proposed case.” (§ 3106, subd. (b).)

(Chevron II, 15 Cal.5th at 145, emphasis in original.)

            The Supreme Court also found Measure Z was preempted because “section 3106 implicitly limits a local entity’s authority by expressly providing that the state supervisor shall approve all production methods that are, ‘in the opinion of the supervisor,’ ‘suitable for th[e] purpose’ ‘of increasing the ultimate recovery of underground hydrocarbons.’ (§ 3106, subd. (b).)” (Chevron II, 15 Cal.5th at 149.)  The Court reasoned that “[b]y banning some oil production methods altogether, Measure Z takes those methods off the table and nullifies the supervisor’s express, statutorily-conferred authority to decide what oil production methods are suitable in each case.”  (Ibid.)

            Similarly, with respect to Measure Z’s prohibition on drilling new oil and gas wells, the Supreme Court concluded that provision was also preempted because it, too, “constitute[d] a ban on certain oil production methods.” (Chevron II, 15 Cal.5th at 147.)  In so concluding, the Supreme Court rejected the claim that the prohibition on drilling new oil and gas wells was merely a “locational” restriction permissibly regulating “where and whether” certain operations may occur.  (Ibid.)  The Court noted that the “ban on the drilling of all new wells, at first glance, appears to regulate where oil production can take place, i.e., nowhere in the County,” but the Court further observed that “the language of [the Measure] broadly defines ‘oil and gas wells’ to include any type of well ‘drilled for the purpose of . . . aiding in the recover of [] oil and gas.’”  (Ibid.)  Thus, concluded the Court, the prohibition “sweeps broadly and extends its ban to any oil production method that requires the drilling of new wells—such as wastewater and steam injection wells—in order to continue extracting oil from existing fields.” (Ibid.)  Consequently, the Measure’s prohibition against drilling new oil and gas wells also “constitutes a ban on certain oil production methods in existing oil fields” subject to preemption by section 3106.  (Ibid.) 

            Like Measure Z, the Ordinance here is preempted.  The Ordinance states: “No new well for the production of oil, gas or other hydrocarbon substances may be drilled in any zone.” (AR 136.) At first glance, like Measure Z’s provision, this prohibition appears to permissibly regulate where oil production can take place. (See Chevron I, 70 Cal.App.5th at 159.) However, also like Measure Z’s provision, this provision of the Ordinance bans methods of production in existing wells. “Oil well” is defined in the Ordinance to include “any…hole…being drilled or to be drilled into the surface of the earth which is…intended to be used in connection with…the drilling for prospecting for or producing petroleum, natural gas or other hydrocarbon substances, or is…intended to be used for the subsurface injection into the earth of oil field waste, gases, water or liquid substances, including any such existing hole, well or casing which has not been abandoned….” (AR 138.) The prohibition against a “new well” thus includes new holes drilled for wastewater injection intended to facilitate the recovery of oil in existing wells. (AR 76825, 76835-36, 76987-90.) Consequently, the Ordinance’s prohibition on new wells in the City is just like Measure Z’s ban on the drilling of all new wells, which the Supreme Court found to “constitute[] a ban on certain oil production methods in existing oil fields.” (Chevron II, 15 Cal.5th at 147.) As stated in Chevron II, section 3106 requires the Supervisor to “approve all production methods that are, ‘in the opinion of the supervisor,’ ‘suitable for th[e] purpose’ ‘of increasing the ultimate recovery of underground hydrocarbons.’” (Chevron II, 15 Cal.5th at 149, quoting § 3106(b).) Because the Ordinance’s “new well” provision restricts the Supervisor’s “express, statutorily-conferred authority to decide what oil production methods are suitable in each case” (ibid.), section 3106 implicitly limits the City’s authority to ban oil production methods through the Ordinance.

Furthermore, the Ordinance states: “No existing well for the production of oil, gas or other hydrocarbon substances, which is a nonconforming use, shall be maintained, drilled, re-drilled, or deepened, except to prevent or respond to a threat to public health, safety, or the environment, as determined by the Zoning Administrator.” (AR 136.) The ZAI defines “well maintenance” to include any “rework” activity that requires a notice of approval from CalGEM or any activity that requires operators to submit specified notification to the SCAQMD. (AR 8342.) ZA Memo 141 sets forth the procedures for the acceptance and processing of applications for a health and safety exception, which, if granted, would allow an operator to maintain, drill, redrill, or deepen a nonconforming oil well, as permitted under the Ordinance. (AR 8331-41.)

This “existing well” provision of the Ordinance and related guidance concerning maintenance and redrilling gives the Zoning Administrator and City authority to make decisions over which oil production methods an oil operator can use on any existing well. However, “section 3106 directs the supervisor to make decisions about the use of all oil production methods.” (Chevron II, 15 Cal.5th at 145.) Therefore, the Ordinance and related guidance contradict “section 3106’s mandate that the state ‘shall’ supervise oil operation in a way that permits well operators to ‘utilize all methods and practices’ the supervisor has approved.” (Ibid.) As observed by our Supreme Court in Chevron II, were an oil producer to seek to redrill an existing well or conduct well maintenance in the City, the Ordinance, by vesting authority over such decisions in the Zoning Administrator, “has, in all cases, usurped the supervisor’s statutorily granted authority to decide whether those methods are ‘suitable ... in each proposed case.’” (Ibid., quoting § 3106(b).)

            Respondents attempt to distinguish Chevron II on the ground that Monterey County, the local entity whose laws were at issue, was a general law county, as opposed to a charter county or charter city. (City RJN, Ex. J.) A local entity’s governance under a charter is relevant to whether the home rule doctrine applies. A charter, however, does not preclude a finding that local legislation is preempted by state law. (See Fiscal v. City and County of San Francisco (2008) 158 Cal.App.4th 895, 918 [a charter city can escape a finding of state preemption by demonstrating local ordinance relates to a purely municipal affair under home rule doctrine].)

            Respondents also argue that there is no conflict between the Ordinance and section 3106, because it is reasonably possible to comply with both the local and state laws. (See City of Riverside, 56 Cal.4th at 743 [“no inimical conflict will be found where it is reasonably possible to comply with both the state and local laws”].) This same argument was rejected in Chevron II.  Just as the Supreme Court found with respect to Measure Z, here it is not “‘reasonably possible’ for well operators ‘to comply with both the state and local laws’ [citation] by requiring them to curb their conduct in a way that conforms to a local ban, without regard to what the state law permits.” (Chevron II, 15 Cal.5th at 150.) The Court explained: “Carried to its logical extension, [this] argument would mean that a local law that contradicts state law would never be preempted, because in almost every case, it is theoretically possible for a party to comply with state and local laws that contradict each other, simply by not engaging in the conduct prohibited by local law.” (Ibid.)

            Respondents also cite provisions of the Public Resources Code—sections 3012, 3203.5, 3289, and 3690—that purport to bestow upon local entities the power to regulate the conduct of oil production activities. Sections 3012, 3203.5, and 3289 “may be potentially relevant to whether the Legislature intended to preempt ordinances that restrict the location at which oil may be extracted—a proper concern of zoning measures—[but] they do not impact [the] analysis of the preemption question…which concerns a local ordinance that regulates certain methods and practices of oil extraction in areas where oil production has already been approved and is ongoing.”[6] (Chevron II, 15 Cal.5th at 146.) Respondents’ citation to section 3690 is also unavailing, as it is in Chapter 3.5, which concerns “unit operations.”[7] Section 3106 is found in Chapter 1. (See Chevron II, 15 Cal.5th at 146, fn. 6.)

Because the Ordinance, ZAI, and ZA Memo 141 either contradict or are implicitly limited by section 3106, the Court finds that the Ordinance and the related guidance are preempted. (See Sherwin-Williams, 4 Cal.4th 893, 897.)

D.           Whether Home Rule Doctrine Applies

Despite the Court’s preemption analysis above, because Los Angeles is a charter city, under the “home rule” doctrine, the Ordinance and related guidance may stand if the Ordinance pertains to a “municipal affair” and not a “statewide concern.” (See Fiscal, 158 Cal.App.4th at 918-19.) The Court thus turns to whether the home rule doctrine applies to the Ordinance, applying the four-part test set forth in Cal Fed Savings, 54 Cal.3d at 16-17.

First, the Court must determine whether the Ordinance regulates municipal affairs. (State Building, 54 Cal.4th 547 at 556.) The Ordinance concerns municipal land use and zoning regulations, which are municipal affairs. (Committee of Seven Thousand v. Superior Court (1988) 45 Cal.3d 491, 511.)

            Second, the Court must determine whether the instant case presents an actual conflict between local and state law. (State Building, 54 Cal.4th 547 at 556.) Based on the finding of preemption set forth above, the Ordinance presents an actual conflict between local and state law.

            Third, the Court must determine whether the state law addresses a matter of statewide concern. (State Building, 54 Cal.4th 547 at 556.) Section 3106 “directs the supervisor to administer the state’s regulations in a way that serves the dual purpose of ensuring the state has adequate oil and gas resources, while protecting the environment.” (Chevron II, 15 Cal.5th at 144, citing § 3106(a), (b), (d).) The purpose of Division 3, which includes section 3106, “include[s] protecting public health and safety and environmental quality, including reduction and mitigation of greenhouse gas emissions associated with the development of hydrocarbon and geothermal resources in a manner that meets the energy needs of the state.” (§ 3011(a).) The legislative history of section 3106 indicates that the statute “was meant to ‘strengthen the role’ of the supervisor in overseeing oil and gas production.” (Chevron II, 15 Cal.5th at 144.) Consequently, while the City has a general interest in protecting the health of and environment for its residents, with respect to oil and gas production, the Supervisor is charged with balancing those concerns along with meeting the energy needs of the state. The Court therefore finds that Division 3 of the Public Resources Code, including section 3106, addresses a matter of statewide concern.

            Fourth, the Court must determine whether the state law is reasonably related to resolution of the statewide concern and narrowly tailored to avoid unnecessary interference in local governance. (State Building, 54 Cal.4th 547 at 556.) Section 3106 does not overreach by dictating where oil and gas production can take place within a municipality’s boundaries. Rather, section 3106 vests authority in the Supervisor to supervise “drilling, operation, maintenance, and abandonment” of wells and determine the methods and practices in each proposed case that are suitable “for the purpose of increasing the ultimate recovery of underground hydrocarbons.” (§ 3106(b).) Such authority given to the Supervisor is an appropriately tailored means to further the State’s interest in protecting the environment and health of citizens while meeting the energy needs of the State.

“If…the court is persuaded that the subject of the state statute is one of statewide concern and that the statute is reasonably related to its resolution, then the conflicting charter city measure ceases to be a ‘municipal affair’ pro tanto and the Legislature is not prohibited by article XI, section 5(a), from addressing the statewide dimension by its own tailored enactments.” (Cal Fed Savings, 54 Cal.3d at 17.) Based on the foregoing, the Court finds that the home rule doctrine does not prevent the preemption of the Ordinance and related guidance by section 3106.

While the City has the authority to determine the location of wells within its boundaries (Chevron I, 70 Cal.App.5th at 159), the Ordinance at issue here goes beyond the regulation of location and bars or regulates the oil production methods that may be used to extract oil from existing wells. “The fact that state law leaves room for some local regulation of oil drilling, such as zoning regulations identifying where oil drilling will be permitted in a locality, does not mean that the [City] has the authority to ban all new wells” in the manner that it has done under the Ordinance. (Chevron I, 70 Cal.App.5th at 172.)

V.      Conclusion

For the foregoing reasons, the Court hereby GRANTS petitioners’ requests for a writ of mandamus as set forth in: (1) Warren’s thirteenth and fourteenth causes of action in its Fourth Amended Petition; (2) E&B’s third and sixth causes of action in its Second Amended Petition; and (3) NARO’s first and second causes of action in its First Amended Petition.

In light of the Court’s ruling, petitioners should be prepared to address whether the ruling resolves their other writ causes of action, as well as whether petitioners intend to proceed with the non-writ causes of action, which, pursuant to the local rules, shall otherwise be assigned to a direct-calendar, unlimited jurisdiction civil department.  (See LASC Local Rules 2.8(d) and 2.9.)