Judge: James C. Chalfant, Case: 21STCP04148, Date: 2022-08-02 Tentative Ruling

Case Number: 21STCP04148    Hearing Date: August 2, 2022    Dept: 85

Respondent Regional Water Quality Control Board – Los Angeles Region (“Regional Board”) moves to strike portions of the Petition of the City of Norwalk (“Norwalk”).

            The court has read and considered the moving papers, opposition, and reply,[1] and renders the following tentative decision.

            A. Statement of the Case

            Petitioner Norwalk filed this Petition on December 21, 2021 against Respondent Regional Board and then-Respondent State Water Resources Control Board (“State Board”) asserting (1) one cause of action for a writ of administrative mandate under Water Code section 13330, and (2) two causes of action for writs of mandate under CCP section 1094.5.  The Petition alleges in pertinent part as follows.

            On July 23, 2021, the Regional Board adopted a Regional Board Order (“Order”), effective on September 11, 2021 and for a five year period, serving as the basis for the 2021 Municipal Separate Storm Sewer System (“MS4”) Permit (“Permit”) which regulates the discharge of storm water and urban runoff from the MS4s within the Los Angeles Basin.  Pet. at ¶¶ 11, 19.  The Permit requires the counties of Los Angeles and Ventura and cities located within those counties to implement pollution control measures to reduce the discharge of pollutants from the MS4s to other national waters.  Pet. at ¶16.  In adopting the Order, the Regional Board found that the 2021 MS4 Permit application was complete and in compliance with the Clean Water Act and state law.  Pet. at ¶17.

            Norwalk owns and operates portions of the MS4 within its jurisdiction.  Pet. at ¶10.  It is also one of many permittees under the Permit.  Pet. at ¶11.         On August 23, 2021, Norwalk filed an administrative petition with the State Board to review the Regional Board’s Order and the Permit.  Pet. at ¶20.  On October 21, 2021, the State Board acknowledged the petition but informed Norwalk that it would be automatically dismissed without further action pursuant to 23 CCR section 2050.5.  Pet. at ¶21.

            Water Code section 13000 requires the regulation of all waters to attain the highest water quality reasonable under the circumstances.  Pet. at ¶38.  Water Code section 13241 requires a regional water board to consider specific factors when adopting water quality control plans, and Water Code section 13263 requires that all waste discharge requirements be issued in relation to the conditions existing in the disposal area or receiving waters into which the discharge is made or proposed.  Pet. at ¶¶ 39, 41.  Several aspects of the Permit violate these Water Code provisions and aspects of the Clean Water Act, as well as the prohibition on imposing unfunded mandates in California Constitution Art. XIII B, section 6.  Pet. at ¶44.

            Specifically, the Permit (1) requires compliance with Total Maximum Daily Loads (“TMDLs”) no longer applicable to Norwalk (Pet. at ¶¶ 45-53); (2) improperly requires compliance with section 301 of the Clean Water Act, which is inapplicable to municipal storm sewer systems (Pet. at ¶54); (3) improperly requires MS4 permittees in the Los Angeles and San Gabriel River sub-watersheds, and their tributaries, to comply with monitoring requirements associated with the Dominguez Channel Harbor Toxics TMDL (Pet. at ¶55); (4) improperly requires permittees to implement stormwater capture and retention controls (Pet. at ¶56); (5) improperly requires compliance with wet-weather Water Quality Standards (“water quality standards”) (Pet. at ¶¶ 57-59); (6) requires permittees to meet TMDL compliance schedules contrary to state and federal regulations (Pet. at ¶¶ 60-62); (7) does not comply with the Clean Water Act (Pet. at ¶¶ 63-70); (8) improperly imposes specific designs, locations, types of construction, and means for compliance (Pet. at ¶¶ 71-72); (9) was passed without genuine cost-benefit or economic analysis (Pet. at ¶¶ 73-75); (10) was adopted in violation of administrative law (Pet. at ¶¶ 76-81); and (11) infringes upon Norwalk’s local land use authority (Pet. at ¶¶ 82-86).

            Norwalk seeks (1) an alternative writ of mandate compelling the Regional Board to set aside approval of all or portions of the Permit, (2) a temporary restraining order, preliminary injunction, and permanent injunction enjoining implementation of the Permit or its unlawful provisions, (3) exercise of the court’s jurisdiction over the Regional Board’s proceedings for Permit modification or reissuance, and (4) attorney’s fees and costs.

            2. Course of Proceedings

            On February 23, 2022, Norwalk served Respondent Regional Board with the Petition and Summons.

            On February 24, 2022, Norwalk served then-Respondent State Board with the Petition and Summons.

            On July 7, 2022, the parties stipulated to dismiss the Petition against the State Board and amend the Petition to remove reference to traditional writ of mandamus under CCP section 1085.

            B. Applicable Law

            Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part thereof.  CCP §435(b)(1).  CCP section 436 permits the court to strike out any irrelevant, false, or improper matter, as well as any part of any pleading not in conformity with an order of the court.  Irrelevant matters are defined as those allegations that are not essential to the statement of a claim or that are neither pertinent nor supported by an otherwise sufficient claim.  CCP §431.10(b).

            The notice of motion to strike shall be given within the time allowed to plead, and if a demurrer is interposed, concurrently therewith, and shall be noticed for hearing and heard at the same time as the demurrer.  CRC 3.1322(b).  The notice of motion to strike a portion of a pleading shall quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count or defense.  CRC 3.1322(a).

            A motion to strike can serve an important function of deleting matter for which a defendant may not be able to demur but for which the defendant should not have to suffer discovery and navigate the thicket of proceedings for summary adjudication.  Ph II, Inc. v. Superior Court  (1995) 33 Cal.app.4^th 1680, 1682-83.  The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.  CCP §437(a).  Matter to be judicially noticed shall be specified in the notice of motion.  CCP §437(b).  When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.  Perlman v. Municipal Court, (1979) 99 Cal. App. 3d 568, 575.

            C. Statement of Facts[2]

            On August 23, 2021, Norwalk filed an administrative petition asking the State Board to invalidate the Order or remand it to the Regional Board for correction.  RJN Ex. 1.  The petition listed eight reasons why the Order is improper, which Norwalk alleged in writing and orally at various events before the petition was filed:

            (1). The Order improperly requires compliance with a Watershed Management Program (“WMP”) instead of the mandatory Storm Water Management Program, thereby violating Clean Water Act section 402(p)(3)(B)(iii) and 40 CFR section 122.26(d)(iv);

            (2). The Order improperly requires compliance with TMDLs not on the state’s list and Clean Water Act section 303(d);

            (3). The Order improperly requires compliance with Clean Water Act section 301 by (i) implementing Technology-Based Effluent Limitations (“TBELs”) and (ii) forcing a permittee to achieve absolute and stringent compliance with TMDLs;

            (4). The Order improperly requires MS4 permittees in certain areas to comply with monitoring requirements associated with the Dominguez Channel Harbor Toxics TMDL, despite the fact that permittees in those areas are not on the 2010 or 2016 Clean Water Act section 303(d) list for that TMDL;

            (5). The Order improperly requires permittees, through a WMP, to implement stormwater capture and retention controls;

            (6). The Order improperly requires compliance with wet-weather water quality standards, whereas (a) there is no basis in state of federal law for mandating adoption of separate water quality standards for wet weather conditions, and (b) Clean Water Act section 303(d) states that water quality standards are based on ambient water conditions as defined by 40 CFR section 122.21(g)(7)(ii);

            (7). The Order requires meeting TMDL compliance schedules contrary to state and federal regulations, such as Clean Water Act section 301;

            (8). The Regional Board failed to comply with the Administrative Procedure Act (“APA”) by denying public review under Govt. Code section 11346.8(c).  Resp. RJN Ex. 1.

            On April 29, 2022 Regional Board’s counsel emailed Norwalk’s counsel outlining the basis of the motion and proposing to meet and confer.  Lucas Decl., ¶3.  The parties met and conferred on May 5, 2022.  Lucas Decl., ¶4.  On May 19, 2022, Norwalk informed the Regional Board that it did not agree that it failed to exhaust administrative remedies, although it agreed to remove the State Board as a party and stipulate to disregard any reference in the Petition to traditional mandamus.  Lucas Decl., ¶5.  After further emails on June 10 and 15, 2022, the parties agreed to disagree as to the portions of the Petition at issue.  Lucas Decl., ¶¶ 6-7.

            D. Analysis

            This case concerns Norwalk’s challenge to the Permit requiring permittees to implement pollution control measures to reduce the discharge of pollutants.  Pet. ¶16; Opp. at 2.  Regional Board moves to strike portions of the Petition that raise issues for which Norwalk failed to exhaust administrative remedies.  

The motion to strike is timely as it is made before Regional Board’s response is due.  See CCP §1089.5.

The following is a non-exhaustive list of new issues raised in the Petition’s allegations that are targeted in Regional Board’s motion to strike: (1) the Regional Board failed to consider the factors required by Water Code sections 13241 and 13267, (2) the Permit violates Water Code section 13360 by specifying the manner of compliance, (3) the Permit violates the constitutional provision against unfunded mandates, (4) the Permit imposes a strict liability standard, (5) the Regional Board violated Norwalk’s rights under the APA, (6) the Regional Board failed to separate its counsel’s prosecutorial role from its adjudicative and advisory role, (7) the hearings on the Permit were not conducted by neutral factfinders, (8) the Regional Board failed to provide a full and fair opportunity for Norwalk to be heard at the hearings on the Permit, (9) the Regional Board relied on evidence outside the administrative record, the (10) Permit infringes on Norwalk’s local land use authority.  Mot. at 7.  None of these topics, or the rest of topics in the notice of motion, appear in Norwalk’s State Board petition.  See RJN Ex. 1. 

1.      Exhaustion Law

As a general rule, a court will not issue a writ of mandate unless a petitioner has first exhausted its available administrative remedies.  See, e.g., Alta Loma School Dist. v. San Bernardino County Com. On School Dist. Reorganization, (1981) 124 Cal.App.3d 542, 554.  Under this rule, an administrative remedy is exhausted only upon termination of all available, non-duplicative administrative review procedures.  Coachella Valley Mosquito & Vector Control Dist. v. California Public Employment Relations Bd., (2005) 35 Cal.4th 1072, 1080.  The exhaustion doctrine has been described as “a jurisdictional prerequisite to resort to the courts.”  Abelleira v. District Court of Appeal, (1941) 17 Cal.2d 280, 291-93. 

The exhaustion doctrine includes issue exhaustion as well as exhaustion of administrative remedies.  The agency must be given the opportunity to reach a reasoned and final conclusion on each and every issue upon which it has jurisdiction to act before it is raised in a judicial forum.  Hill RHF Housing Partners, L.P. v. City of Los Angeles, (“Hill”) (2021), 12 Cal.5th 458, 479 (citation omitted).  “Exhaustion requires ‘a full presentation to the administrative agency upon all issues of the case and at all prescribed stages of the administrative proceedings.’”  City of San Jose v. Operating Engineeers Local Union No. 3, (2010) 49 Cal.4^th 597, 609 (citations omitted).  “The exhaustion doctrine contemplates that the real issues in controversy be presented to the administrative body, which must be given the opportunity to apply its special expertise to correct any errors and reach a final decision, thereby saving the already overworked courts from intervening into an administrative dispute unless absolutely necessary.”  Farmers Ins. Exchange v. Superior Court, (1992) 2 Cal.4^th 377, 391.  The exact issue raised in the lawsuit must have been presented to the administrative agency.  Tahoe Vista Concerned Citizens v. County of Placer, (2000) 81 Cal.App.4^th 577, 594.  Otherwise, a litigant could present narrow arguments or even omit them before the final administrative authority in hopes of obtaining a more favorable decision from a trial court.  Id.[3]

            2. Judicial Notice

            Norwalk argues that the determination of issue exhaustion is not proper in a motion to strike because the ground stated do not appear on the face of the Petition or on any judicially noticeable matter.  Opp. at 6.  Regional Board is asking the court to review the contents of Norwalk’s state petition to determine whether “it stated issues that Norwalk brought on appeal.”  In doing so, the court would be accepting the truth of the administrative petition and the Regional Board’s interpretation of its contents.  Norwalk cites Panterra GP, Inc. v. Superior Court of Kern County, (2022) 74 Cal.App.5th 697, 710, which held that judicial notice of a document does not accept the truth of its contents or a particular interpretation of its meaning.  Opp. at 1, 7. 

The court addressed this issue ante.  The court is not judicially noticing the truth of Norwalk’s allegations in the State Board petition.  It is using the petition to determine what issues Norwalk alleged before the State Board in comparison to the Petition.  The court also is not limiting itself to the Regional Board’s interpretation of those allegations and is only considering their plain meaning. 

Norwalk contends that its State Board petition did raise two issues which the Regional Board contends were not raised: (a) violation of the APA (Resp. RJN Ex. A, p. 9) and (b) violation of the federal and California constitutions (Resp. RJN Ex. A, p. 4).  Opp. at 7-8. 

The Petition sufficiently raises an issue of APA non-compliance, but it does not mention any unfunded mandate issue under the California Constitution. 

3. Timing

Norwalk asserts that a motion to strike is not the appropriate stage of litigation to determine exhaustion issues.  Issue exhaustion differs from exhaustion of administrative remedies, which is jurisdictional, the court has some discretion in evaluating issue exhaustion.  Issue exhaustion does not bar a court from considering an issue not raised when circumstances warrant (i.e., injustice would result).  Sustainability, Parks, Recycling & Wildlife Defense Fund v. Department of Resources Recycling & Recovery (“Wildlife Defense Fund”) (2019) 34 Cal.App.5th 676, 697.  Norwalk argues that the Regional Board is improperly asking the court “to peer into the contents of the Administrative Petition before the State Board”.  Opp. at 1.  The court must review the full administrative record before exercising that discretion, which will include documents which Norwalk’s State Board petition references.  Yet, the Regional Board’s administrative record is not ready for the court to do so.  Opp. at 8-9.

            As Regional Board notes (Reply at 5), there will not be a significant State Board administrative record for the court to review.  The Petition alleges that the State Board responded to the petition by indicating that it would be denied by operation of law.  Pet. at ¶21.  Norwalk points to nothing that the record would include that suggests an interpretation of the issues raised to the State Board is required.  Therefore, there is no reason not to address issue exhaustion in the motion to strike.

            4. Issue Exhaustion Applies to State Board Petitions

            Norwalk asserts that there are important limits to issue exhaustion.  Hill RHF Housing Partners, L.P. v. City of Los Angeles, (“Hill”) (2021), 12 Cal.5th 458, 479.  The United States Supreme Court has held that administrative review commonly requires parties to give the agency an opportunity to decide issues, that is not always required.  Carr v. Saul, (2021) 141 S.Ct. 1352, 1358.  The rationale for applying issue exhaustion is at its greatest when the parties are expected to develop the issues in an adversarial administrative proceeding, and much weaker where the administrative proceeding is not adversarial.  Id. at 1359.   The California Supreme Court held in Hill that exhaustion only applies when there is “clearly defined machinery for the submission, evaluation and resolution of complaints by aggrieved parties.” 

The word “machinery” in Hill suggests that the important consideration is the system in place for review, not the extent to which it is used in a particular instance.  12 Cal.5th at 479.  In Hill, the only opportunity for a grievance to be heard was a public comment session that was not geared towards the resolution of such comments.  Id. at 482-83.  The State Board has a process which provides the opportunity to file an administrative petition that leads to further hearings unless denied by operation of law (which is what typically happens). 

A petition to the State Board for review of a regional board decision “shall contain…[a] full and complete statement of the reasons the action or failure to act was inappropriate or improper.”  23 CCR §2050(a).  As Regional Board points out, the State Board may refuse to review the action or failure to act of the regional board if the petition fails to raise substantial issues that are appropriate for review.  Johnson v. State Water Resources Control Board, (2004) 123 Cal.App.4^th 1107, 1112-13.  Norwalk did not give the State Board the opportunity to evaluate most of the allegations at issue in this motion.  See Reply at 6. 

Norwalk argues that issue exhaustion should not apply to its State Board petition because the State Board dismissed the petition by operation of law and there were no proceedings at which issues could be considered.  The Porter-Cologne Act and the regulations promulgated thereunder for State Board review are silent on issue exhaustion.  See Water Code §13320; 23 CCR §§ 2050-68.  There was no machinery for evaluation of Norwalk’s position and the State Board procedure is so clearly wanting there was no genuine opportunity to exhaust.  Opp. at 10.

The Regional Board replies that 23 CCR section 2050’s requirement of a petition containing [a] full and complete statement of the reasons the action or failure to act was inappropriate or improper” coupled with the rest of the chapter concerning State Board review of regional board decisions clearly indicates that issue exhaustion is required.  Reply at 7.

Wildlife Defense Fund’s reasoning indicates that the Regional Board is correct.  In that case, a landfill operator received a revised permit from the county.  34 Cal.App.5th at 680.  The petitioner contended that the revised permit improperly expanded operations of the landfill in violation of the siting element of the county’s integrated waste management plan.  Ibid.  The petitioner sought review before the California Integrated Waste Management Board, a government agency, which could accept or decline the appeal in its discretion.  Id. at 686.  The Board declined to entertain the petitioner’s administrative appeal about the siting element because that issue was not raised at the county level.  Id. at 680-81. 

In the Court of Appeal, the petitioner contended that the Board had no right to invoke judicial exhaustion at the administrative level.  Id. at 681.  The court applied the issue exhaustion doctrine to the county administrative decision-making and ruled that the Board was not required to entertain new issues.  Id. at 700.  The essence of the exhaustion doctrine is the agency’s opportunity to receive and respond to all issues before its actions are subject to judicial review and the same reasoning justifies a requirement that a party fully present all issues at every stage of administrative proceedings.  Id. at 697.  The petitioner argued that, in exercising its discretion to entertain an appeal, the Board should have considered the issue because it is statutorily entitled to consider evidence not presented to the county if it would effectuate and implement waste management policies.  Id. at 699, n. 31.  The court distinguished this authority, noting that it permitted the Board to consider a petitioner’s evidence not presented to the county, but it did not permit a petitioner to raise new issues.  The court held that the Board was not required to entertain an appeal of an issue not raised to the county.  Id. 

Although Wildlife Defense Fund is distinguishable as a case involving internal administrative exhaustion, its reasoning applies to this case.  The Board in Wildlife Defense Fund had discretionary appeal authority just as the State Board does.  The Board could consider new evidence just as the State Board can.  See 23 CCR §2050.6.  Yet, Wildlife Defense Fund held that the essence of the exhaustion doctrine is the agency’s opportunity to receive and respond to all issues before its actions are subject to judicial review.  The same reasoning justifies a requirement that Norwalk fully present all issues to the State Board before seeking judicial review. 

Wildlife Defense Fund does suggest that an exception can be made where it would work an injustice.  But Norwalk’s reliance on the State Board’s “perfunctory process” as depriving of an ability to articulate each issue for the Permit in its State Board petition is insufficient.  True, Norwalk only had 30 days following the Regional Board’s Order to petition the State Board (23 CCR §2050(b)), had to do so without the benefit of an administrative record from the Regional Board proceedings (23 CCR §2050(a)), and could have amended its petition if the State Board had accepted the appeal (23 CCR §§ 2050.5(a), 2064).  But this procedure does not explain why Norwalk’s counsel would not know after attending the Regional Board hearings what issues it would raise to the State Board.

Norwalk notes that the State Board permits a petitioner to explain why an issue or objection was not made before the regional board and argues that the procedures are not intended to require that every issue be raised before the regional board.  23 CCR §2050(a)(9).  In deciding whether to infer an exhaustion requirement, courts consider whether exhaustion would comport with the statutory scheme.  Hill, supra, 12 Cal.5^th at 478.  Opp. at 12-13.

The State Board’s relaxation of issue exhaustion supports a court’s exercise of discretion in favor of new issues by parallel reasoning.  It also is supported by the injustice exception to issue exhaustion noted in Wildlife Defense Fund.  But more than general reliance on these concepts is required to justify the presentation of a new issue.  The State Board’s regulation, 23 CCR §2050(a)(9), requires the petitioner to explain why it was not required or was unable to raise the issues before the regional board.  The Petition does not allege, and Norwalk’s opposition does not argue, any reason why the issues addressed in this motion were not raised to the Regional Board.

Finally, Norwalk notes that exhaustion is excused when the administrative remedy is inadequate or unavailable.  Since the State Board dismissed the petition by operation of law without any further opportunity for Norwalk to amend the issues, Norwalk argues that the remedy was inadequate or unavailable.  Opp. at 11.  The administrative remedy provided by the State Board is adequate.  Norwalk simply had to raise the issues in its State Board petition or provide an explanation why if exhaustion of issues were required.

            E. Conclusion

            With the exception of the Petition’s allegation that the Regional Board violated the APA, the motion to strike is granted.  If Norwalk makes a showing at trial that it was not required or was unable to raise one or more of these issues before the Regional Board, it may seek to amend the Petition to conform to proof.