Judge Mitchell L. Beckloff, Case 22STCP01030 2022-10-21 Tentative Ruling

Judge: Mitchell L. Beckloff, Case: 22STCP01030, Date: 2022-10-21 Tentative Ruling

CALIFORNIA ENDOWMENT v. LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITY

Petitioner, The California Endowment, moves for leave to file a first amended petition. Respondent, Los Angeles County Metropolitan Transportation Authority (Metro) and Real Party Aerial Rapid Transit Technologies LLC (ARTT), oppose the motion.

Petitioner also moves to augment the administrative record. Respondents oppose the motion.

On April 25, 2018, ARTT submitted an unsolicited gondola project proposal to Metro for review and evaluation by Metro’s Office of Extraordinary Innovation (OEI) pursuant to Metro’s Unsolicited Proposals Policy (Policy). (Pet., ¶¶ 9, 13.) On June 11, 2018, Metro notified ARTT its review of the gondola proposal had moved to Phase II. (Pet., ¶ 13.) As part of the Phase II process, on August 10, 2018, Metro sent ARTT a request for information seeking additional information on a range of subjects. (Pet., ¶ 14.) ARTT provided the requested information. On or about October 11, 2018, Metro advised ARTT its proposal passed Phase II and qualified for a sole-source award. (Pet. ¶ 14, Exh. E.) Thereafter, Metro and ARTT executed a Letter of Intent (LOI) agreeing to exclusive negotiations to reach contract terms for the project. (Pet., ¶ 15.)

On December 3, 2018, Metro staff reported to Metro’s board of directors with a justification to enter into exclusive negotiations with ARTT for the project. (MAR 242-251.)

Metro’s board of directors never formally considered, held a hearing on, or approved ARTT’s proposal. The board of directors also never considered whether the project qualified as a sol-source award. (Pet. ¶ 15.)

On April 26, 2019, Metro and ARTT entered into an agreement entitled “Memorandum of Agreement Between Los Angeles County Metropolitan Transportation Authority and Aerial Rapid Transit Technologies LLC” (MOA), formally agreeing to negotiate terms on which a contract between Metro and ARTT for the gondola project could be based. (Pet., 15 Exh. F.)

Petitioner requests leave to amend the petition to add “background information” (FAP ¶¶ 21-41) and additional “legal context” (FAP ¶¶ 9-16) to the underlying allegations. The amendment will also add detail concerning ARTT’s alleged transfer of the proposed project to Climate Resolve’s newly-created subsidiary, Zero Emissions Transit (ZET) (FAP ¶ 61).

Finally, Petitioner also seeks to add a cause of action alleging Metro violated the California Public Records Act (CPRA), Government Code section 6250, et seq. (FAP ¶¶ 93-99.)

As to Petitioner’s request to add a second cause of action alleging a violation of the CPRA, the court is included to deny Petitioner’s request. A CPRA cause of action is a new and independent claim that arose after the date Petitioner filed the petition.

Petitioner filed its petition on March 22, 2022. Petitioner made its records request through Metro’s website on May 25, August 7 and August 19, 2022. (Carstens Decl., ¶ 3.) Thus, allegations concerning a violation of the CPRA are supplemental.

A “supplemental” complaint or petition alleges “facts material to the case occurring after the former complaint or answer.” (Code Civ. Proc. § 464, subd. (a).) The purpose of a supplemental complaint or petition is to bring to the court's and opposing party's attention such after-occurring facts which may affect the rights asserted and the relief requested in the action. (MacMorris Sales Corp. v. Kozak (1968) 263 Cal.App.2d 430, 439.)

“Permission to file a supplemental complaint is in the discretion of the trial court, [citation], provided it is in furtherance of and consistent with the original complaint and is not a new or independent cause of action.” (Id. at 516; see also Lincoln Property Co., N.C., Inc. v. Travelers Indemnity Co. (2006) 137 Cal.App.4th 905, 916.)

The court acknowledges “[i]t is the general policy that courts should exercise liberality in permitting the filing of supplemental pleadings when the alleged ‘occurring-after’ facts are pertinent to the case. [Citations.] Nonetheless, the motion to file a supplemental pleading is addressed to the sound legal discretion of the court, and its ruling will not be disturbed on appeal in the absence of a showing of a manifest abuse of that discretion. [Citations.]” (Flood v. Simpson (1975) 45 Cal.App.3d 644, 647.)

Petitioner’s proposed CPRA claim is unrelated to Petitioner’s Code of Civil Procedure section 1085 writ cause of action. Although Petitioner may have sought public records from Metro to inform on or prove its writ cause of action, as a legal matter whether an agency violated the CPRA is completely untethered to the legal issues raised by the writ cause of action. That is, Issues raised in CPRA litigation are new, separate, distinct and unrelated to the writ cause of action. The alleged violation of the CPRA is an entirely independent claim unrelated (as a legal matter) to whether the MOA was improper or invalid.

Therefore, the court denies Petitioner’s request to add a cause of action based on the CPRA. Petitioner may file a separate proceeding alleging the violation. Petitioner may thereafter seek to relate the cases such that the matters are heard by the same judicial officer.

As to the remaining allegations, while arguably unnecessary, the court recognizes amendment should be liberally granted. The trial court has discretion to allow amendments to the pleadings “in the furtherance of justice.” (Code Civ. Proc., § 473, subd. (a)(1).) “This discretion should be exercised liberally in favor of amendments, for judicial policy favors resolution of all disputed matters in the same lawsuit.” (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1047.)

Accordingly, consistent with the policy of the law, Petitioner’s motion is granted in part. Petitioner may amend except as to the CPRA claim.

Petitioner moves to add 36 documents to the administrative record. Alternatively, Petitioner requests the court take judicial notice of the records.

This proceeding arises from Petitioner’s allegations Metro failed to abide by its own regulations and policies and abused its discretion in connection with the MOA. Relevant to Petitioner’s claim is the Policy (Pet., Ex. A), which governs Metro’s review of unsolicited proposals. The claim here, as alleged by Petitioner, is brought pursuant to Code of Civil Procedure section 1085.

Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559 [Western States] informs on extra-record evidence.

In Western States, the Supreme Court addressed whether a general rule permitting parties to introduce evidence outside of the administrative record should apply when a petitioner brings a Code of Civil Procedure section 1085 petition to challenge a quasi-legislative administrative decision, rather than a quasi-judicial administrative decision under Code of Civil Procedure section 1094.5. (Western States, supra, 9 Cal.4th at 575-576.) The court held “extra-record evidence is generally not admissible in [Code of Civil Procedure section 1085] actions challenging quasi-legislative administrative decisions . . . . However, [the Court would] continue to allow admission of extra-record evidence in [Code of Civil Procedure section 1085] mandamus actions challenging ministerial or informal administrative actions if the facts are in dispute.” (Id. at 576.)

Petitioner argues this matter “was not a quasi-legislative act by the agency’s governing board, or a quasi-judicial one that required a hearing; it was instead ‘the product of a lower-level staff decision, so it qualifies as an informal or ministerial administrative action.’ ” (Mot. 11:7-8 [citing County of Mono v. City of Los Angeles (2022) 81 Cal.App.5th 657].) Notably, the informal or ministerial exception to the general rule applies when the challenged agency action was “ministerial or informal” and “the facts are in dispute.” (Western States, supra, 9 Cal.4th at 576.)

Respondents dispute the characterization of Metro’s actions related to the MOA as “ministerial or informal.” Respondents acknowledge Western States provides “very narrow” exceptions to the general rule prohibiting extra-record evidence.

In Western States, the Supreme Court concluded there may be exceptions “under unusual circumstances or for very limited purposes,” including “ ‘for background information . . . or for the limited purposes of ascertaining whether the agency considered all the relevant factors or fully explicated its course of conduct or grounds of decision.’ ” (Western States, supra, 9 Cal.4th at 578-579; see Santa Clarita Organization for Planning & Environment v. Castaic Lake Water Agency (2016) 1 Cal.App.5th 1084, 1103. [“The only exceptions, when extra-record evidence will be admitted, are when that evidence ‘provide[s] background information regarding the quasi-legislative agency decision, . . . establishe[s] whether the agency fulfilled its duties in making the decision, or . . . assist[s] the trial court in understanding the agency's decision.’ ”]; Outfitter Properties, LLC v. Wildlife Conservation Bd. (2012) 207 Cal.App.4th 237, 251.) The Supreme Court also made clear, however, these exceptions do not apply when the evidence is submitted “merely to contradict the evidence the administrative agency relied on in making a quasi-legislative decision or to raise a question regarding the wisdom of that decision.” (Western States, supra, 9 Cal.4th at 579.)

Western States also discussed the requirement that the moving party show that the extra-record “evidence in question existed before the agency made its decision and . . . it was not possible in the exercise of reasonable diligence to present this evidence to the agency before the decision was made.” (Id., at p. 578; Cinema West, LLC v. Baker (2017) 13 Cal.App.5th 194, 209.) Western States noted the extra-record evidence exception “is to be very narrowly construed” and will apply “only in . . . rare instances.” (Western States, supra, 9 Cal.4th at 578; Cinema West, LLC v. Baker (2017) 13 Cal.App.5th 194, 209.)

The court finds Metro’s action here is quasi-legislative—not a ministerial, informal decision—as the action involves the exercise of Metro’s “discretion governed by considerations of the public welfare” as to prospective events or actions. (Santa Clarita Organization for Planning & Environment v. Castaic Lake Water Agency, supra, 1 Cal.App.5th 1084, 1103; see e.g., Fair Education Santa Barbara v. Santa Barbara Unified School Dist. (2021) 72 Cal.App.5th 884, 895. [“Like Weinstein, SBUSD's action involved the entry into a no-bid contract after SBUSD assessed its need for the anti-bias training services that JCCC provided. The trial court correctly determined that such an action was quasi-legislative.].)

Thus, the court reviews Petitioner’s request in the context of a quasi-legislative action by Metro.[1]

First, Petitioner argues Metro made its project decision “in a bureaucratic vacuum.” (Mot. 10:14-17.) Petitioner claims “[a]t no point before the sole-source determination was made did Metro advise the public or [Petitioner] that it was considering the gondola proposal, nor was the public or TCE given any opportunity to submit evidence or comments pertaining to that determination before it was made. (Pet. ¶¶ 2,14.) [Petitioner] had no opportunity to submit evidence to Metro for inclusion in the record Metro was making regarding the sole-source determination and Metro’s decision to enter contract negotiations with ARTT on a sole-source basis.” (Mot. 8:4-9.)

Respondents contend multiple opportunities existed for evidence and/or comments to be submitted to Metro before it took action.

The evidence demonstrates Metro considered the terms of the MOA at two publicly noticed, open meetings prior to entering into the MOA. (See AR 337-346 [April 18, 2019 Committee Board Report], 383 [April 25, 2019 Regular Board Meeting].) Further, the April 25, 2019 Agenda states: “A member of the public may address the Board on agenda items, before or during the Board or Committee’s consideration of the item for one (1) minute per item, or at the discretion of the Chair.” (AR 354, 369.)

Thus, Petitioner had at least two opportunities to present comments to the board concerning the MOA. Petitioner contends the meetings did not “did not alert the public to what was involved”—suggesting no true opportunity to comment. (Reply 3:19-21.) Nothing suggests, however, the meetings did not comply with the applicable public meeting notice requirements;[2] further, one of the subjects for the meetings was the “LOS ANGELES AERIAL RAPID TRANSIT PROJECT.” (See AR 337, 383.)

Petitioner has not demonstrated it had no opportunity to address Metro before it took action.

Petitioner also argues certain facts were unknown to the public prior to the execution of the MOA, and the report for the hearing indicated “competitive” process would be used. Metro’s record suggests that details of the Project were known and reported upon prior to the public hearings, including its non-competitive nature. (AR 800-802 [news article], 901-903 [news article].)[3]

Finally, Petitioner argues the proposed extra-record evidence “may be helpful as background.” (Mot. 10: 17.) As noted by Respondents, however, “Petitioner does not specify which of its proffered documents provides relevant ‘helpful background’ for the Court’s consideration that was not already included in Metro’s record.” (Opposition 13:15-17.)

Petitioner argues this document is relevant because “Metro receives federal funding for many of its projects, and has drafted its own regulations to conform to federal requirements in order to qualify for such funding.” While the relevance of this record is not entirely clear, the record appears to constitute legal guidance to which Metro must conform. As such, the court is inclined to take judicial notice of this extra-record evidence. (Evid. Code § 452, subd. (b).)

The court will take judicial notice of the regulations. (Evid. Code § 452, subd. (b).)

Petitioner argues the document is relevant because the proposal must be “unique and innovative” to be approved and the study shows use of a gondola to connect downtown Los Angeles with Dodger Stadium had already been studied by LACTC, Metro’s predecessor agency.

The court denies Petitioner’s request to augment the record with this document. The court may not allow extra-record evidence to contradict the findings made by Metro. (Western States, 9 Cal.4th at 570-571. [“Were we to hold that courts could freely consider extra-record evidence in these circumstances, we would in effect transform the highly deferential substantial evidence standard of review . . . into a de novo standard.”])

The following documents were referenced in an email (AR 874) sent by Metro archivist, Matthew Barrett to Nolan Borgman, a Metro employee in the OEI:

While the court does not necessarily agree the records are relevant for the purposes claimed,[4] the documents do appear to have been improperly omitted form Metro’s administrative record. The records appear to have been reviewed as part of Metro’s decision-making process for the proposal. (AR 874.) The motion to augment is granted as to these records.

Petitioner further argues the following documents are relevant to the litigation because they inform on Metro’s “main justification” of its approval of ARTT’s unsolicited proposal—that is, the purported unique relationship between ARTT and the Los Angeles Dodgers:

It appears Petitioner intends to present this extra-record evidence to undermine part of the reason Metro made its sole-source consideration of the project. As noted earlier, introducing evidence to contract or undermine the factual basis for Metro’s decision is improper under Western States. Moreover, several of these records post-date the Metro’s determination: SAR 2987-2988, 2991-2992, 2995, 2996-2997. Therefore, Petitioner’s request to augment the record with these documents is denied.

Petitioner argues the documents are “relevant because they address Metro’s regulatory criteria for approving the Gondola Project.” Petitioner has not demonstrated the relevance of these records.

With respect to the following documents, Petitioner argues these news publications are relevant in that “each addresses the criteria for approving or disapproving the Gondola Project”:

The court finds Petitioner has not met its burden of demonstrating the relevance of these records to Petitioner’s legal challenge. Moreover, one document post-dates Metro’s action. (SAR 3132-3134.)

With respect to the following documents, Petitioner argues these news publications inform on “the supposedly unique ability of ARTT to know the schedule of such games and events at Dodger Stadium:”[5]

The court finds Petitioner has not met its burden of demonstrating the relevance of these news publications to Petitioner’s legal challenge. Moreover, such contradictory evidence appear to be improper extra-record evidence under Western States.

For the same reasons, Petitioner’s request to augment with the following records—which Petitioner contends informs on the supposed unique relationship between ARTT and the Dodgers is denied:

According to Petitioner, this document demonstrates Metro submits various projects, including transit projects, to competitive bidding procedures. The court finds the document irrelevant; simply because Metro could have undertaken competitive process for the proposal does not inform on whether it was improper to do so here.

The following documents are not relevant at all to Petitioner’s writ claim and instead inform on the currently unpled CPRA cause of action.

The court denies Petitioner’s request to augment the record with these documents as unrelated to the petition allegations.

Accordingly, the motion is granted as to the following documents only: a, b, d, e, f, g and h.

[1] Petitioner must demonstrate as a foundational matter that such extra-record evidence is relevant. (Western States, supra, 9 Cal.4th at 570; see also Evid. Code § 350.) Relevant evidence is “evidence, including evidence relevant to the credibility of a witness or hearsay declarant, having any tendency in reason to prove or disprove any disputed fact that is of consequence to the determination of the action.” (Evid. Code § 210.)

[2] In fact, Metro specifically contends it complied with its usual notice procedures.

[3] It is not clear why the exact location of the station permits Petitioner to submit extra-record evidence.

[4] Petitioner argues the documents are relevant to show the “type and depth of financial information needed” to show a gondola project is “feasible” (Mot. 12:16-31.)

[5] ARTT and Dodgers “can provide seamless and unique ticketing experience.” (AR 246.)