Judge: David J. Cowan, Case: 23STCP00893, Date: 2024-04-24 Tentative Ruling

Case Number: 23STCP00893    Hearing Date: April 24, 2024    Dept: 200

TENTATIVE RULING ON MOTION TO AUGMENT THE PHASE 1 RECORD WITH EXTRA-RECORD EVIDENCE TO SUPPPORT PREEMPTION CLAIMS

Matrix Oil Corp. et al. v. County of Los Angeles, et al., Case No. 23STCP00882 (related to Case Nos. 23STCP00884, 23STCP00893 and 23STCV11422)

Hearing Date: April 24, 2024, 8:30 a.m.

STATEMENT OF CONTENTIONS

On April 2, 2024, certain petitioners in these related cases filed a joint motion to augment the Phase 1 record with extra-record evidence to support their preemption challenges to the County’s Oil Well Ordinance.1 They argue that these claims present Constitutional challenges that are not confined to the legislative record, citing Western States Petroleum Ass’n. v. Superior Court (1995) 9 Cal.4th 559.2 As contrasted to a CEQA claim (Phase 2 of these cases), where there is deferential standard of review of an agency decision, there is none where there is a Constitutional challenge to the local ordinance.3 (State Building & Trades Council, et al. v. City of Vista (2012) 54 Cal.4th 547, 558) Hence, the Court should not be restricted solely to the legislative body’s findings or record in a Constitutional challenge. (Western States, supra, 9 Cal.4th at 576)

Further, petitioners argue that the Calif. Supreme Court relied on extra-record evidence in determining that the Monterey County ordinance concerning oil drilling was preempted by sec. 3106(b) of the Public Resources Code – precisely what this Court is being asked to address concerning the Los Angeles County Oil Well Ordinance. (Chevron v. County of Monterey (“Chevron II”) (2023) 15 Cal.5th 135, at 140, 142, 151) See also Outfitter Prop. v. Wildlife Conserv. Bd. (2012) 207 Cal.App.4th 237, 251)

Finally, they contend that to evaluate their preemption claims, the Court will need to understand the extent to which the Ordinance constrains the “methods and practices known to the oil industry for the purpose of increasing the ultimate recovery of underground hydrocarbons” and hear testimony concerning the nature of CalGem’s regulation of certain of Termo’s operations, as well as regulation by the federal government as to certain other wells of Termo governed by the Ordinance.

On April 11, 2024, the County filed Opposition to the motion, as well as notice of certification of the administrative record. The record is comprised of Tabs 1 through 2944, each a separate document, the pages of which are bates numbers AR 000001 through AR 052679.

County argues in its Opposition that extra-record evidence should not be permitted to adjudicate state preemption claims because these are a pure question of law.4 (Chevron v. County of Monterey (“Chevron I”), 70 Cal.App.5th 153, 174. See also Garcia v. Sup. Court (2022) 80 Cal.App.5th 53,66 (concerning federal preemption) Moreover, extra-record evidence is not generally admissible in writ proceedings and none of the exceptions apply here. (Western States, supra, 9 Cal.4th at 576) In addition, petitioners should not be able to circumvent that rule by seeking declaratory relief. (Western States, supra) Plaintiffs offer no relevant authority that extra-record evidence may be considered to decide a legal issue. While courts have considered extra-record evidence concerning other causes of action, ultimately those courts determined not to consider extra-record evidence where preemption was a legal issue. Most importantly, the Calif. Supreme Court in Chevron II did not address evidentiary issues or rely on extra-record in reaching its decision concerning preemption.5 Finally, petitioners do not specify any documents that they would need to refer to outside the administrative record.

On April 11, 2024, Intervenors also filed Opposition to the motion. Their position is essentially the same as County’s. They reference 139 documents Termo seeks to use but are unclear what Termo’s position is concerning those.

On April 17, 2024, Moving Parties filed a Joint Reply and supporting declaration of counsel. They reiterate the arguments in their motion set forth above, emphasizing that the role of the administrative record is different as concerns preemption as contrasted to CEQA. Further, they note that none of the cases the parties discuss present a basis for the court to prohibit all consideration of extra-record evidence, even if ultimately the courts concluded such evidence was not relevant. Finally, they acknowledge that whether specific documents they may refer to are ultimately admissible or properly considered are issues to be decided later.

DISCUSSION

The parties agree that whether the ordinance is preempted by state law is a legal issue. (Chevron II, supra, 15 Cal.5th at 143) They disagree whether in making that determination the Court is barred from review of facts outside the administrative record. The Court cannot conclude that it

can permissibly now bar Defendants altogether from offering evidence outside the administrative record as pertains to preemption.

Technically, the issue of the exclusive nature of an administrative record does not apply to this preemption phase of this case (where agency deference is not at play), even if it will do in the CEQA phase (where such deference is required.) (Western States, 9 Cal.4th at 572. See also County of Riverside v. Sup. Court (2003) 30 Cal.4th 278)

It also appears that other courts have at least to some degree considered “background” facts in relation to preemption (see Chevron II, 15 Cal.5th at 140-141, 150, fn. 7, as well as City of Vista, supra, 54 Cal.4th at 558) and Outfitter Prop. v. Wildlife Conserv. Bd. (2012) 207 Cal.App.4th 237, 251, even if they have not specifically addressed the exact issue here.6

Whether ultimately specific evidence Defendants may offer is relevant is too soon to tell. Even if preemption is a legal issue, the Court’s decision may still turn on particular facts.7 For example, in Chevron II, the Supreme Court raised a distinction between the ability of counties – in the face of Public Resources Code sec. 3106 - to potentially regulate the location of wells, or as the Court states, the “where,” under their local zoning or police powers but by contrast they cannot regulate “methods and practices” of oil extraction or the “how” given the resulting conflict with the state oil and gas supervisor’s administration of oil wells under sec. 3106.8 (15 Cal.5th at 145) If this issue is relevant here, the Court does not know what facts either side may rely upon concerning the use of the County’s powers for contending that this ordinance is or is not preempted. Consideration of that issue may require the Court to look at facts beyond what the ordinance itself states.

To be fair, where the County has submitted a very substantial record, Defendants should also be able to refer to a much smaller set of documents in the preemption phase of this case. Nonetheless, this ruling is without prejudice to other parties still having the opportunity to object to the Court’s consideration of specific evidence based on relevance or for other reasons, or if there were a trial in this phase of the case, to cross-examine witnesses, consistent with the issues raised in Chevron I at 173-174.

CONCLUSION

For these reasons, the Court grants the motion.