Judge William D. Claster, Case 22-01249146 2022-08-24 Tentative Ruling

Judge: William D. Claster, Case: 22-01249146, Date: 2022-08-24 Tentative Ruling

Defendants and Respondents Indian Wells Valley Groundwater Authority and Board of Directors of the Indian Wells Valley Groundwater Authority's Demurrer to Complaint ROA 47

Defendant Indian Wells Valley Groundwater Authority’s demurrer to the complaint of Plaintiffs Mojave Pistachios, LLC, et al. is SUSTAINED. This action is STAYED pending the resolution of Mojave Pistachios, LLC v. Indian Wells Valley Groundwater Authority, No. 2021-01187589 (the “First Action”). Upon the conclusion of the First Action, the Court will determine whether the case can proceed and whether leave to amend will be permitted.

The parties’ unopposed requests for judicial notice are GRANTED.

GROUNDS FOR RULING

A demurrer lies when there are two actions pending in California state courts “between the same parties on the same causes of action.” (CCP § 430.10(c).) “In determining whether the causes of action are the same for purposes of pleas in abatement, the rule is that such a plea may be maintained only where a judgment in the first action would be a complete bar to the second action.” (Plant Insulation Co. v. Fibreboard Corp. (1990) 224 Cal.App.3d 781, 787-88.) The plea in abatement “require[s] absolute identity of parties, causes of action or remedies sought in the initial and subsequent actions.” (Id., at p. 788.)

The Authority argues the sole cause of action in this case is identical to the second and third causes of action in the First Action, so this action must be abated in favor of the First Action. The Court agrees.

I. Background

Pursuant to the Sustainable Groundwater Management Act, the Authority developed a groundwater sustainability plan (“GSP”) for the Indian Wells Valley Groundwater Basin. In order to finance development of the GSP, the Authority adopted a groundwater extraction fee of $30 per acre-foot in July 2018. After adoption of the GSP, the extraction fee was increased to $105 per acre-foot by Ordinance No. 02-20 (later superseded by Ordinance No. 05-20, which readopted the extraction fee). (Compl. ¶¶ 48-50, 70.) Mojave Pistachios is required to pay the extraction fee because it pumps groundwater from the Basin to irrigate its pistachio trees. (Compl. ¶ 8.)

In the First Action, Mojave Pistachios argues both Ordinance No. 02-20 (which adopted the $105 per acre-foot fee) and Ordinance No. 05-20 (which readopted it) violate numerous provisions of governing law, including both the SGMA and multiple provisions of the California Constitution. Specifically, it contends both ordinances amount to an illegally adopted tax in violation of Propositions 26 and 218, and the SGMA to the extent it incorporates those constitutional requirements. (See Authority 1^st RJN, Ex. A (“2AP” [Second Amended Petition]), ¶¶ 337-350, 364-378.) In addition to an order setting aside Ordinance Nos. 02-20 and 05-20s and a writ of mandate ordering the Authority to proceed according to law, Mojave Pistachios seeks an order “refunding any sums paid thereunder.” (2AP, ¶¶ 356, 381.)

In this action, Mojave Pistachios contends the extraction fee is illegal for reasons that appear word-for-word identical to allegations in the 2AP in the First Action. (Compl. ¶¶ 80-88.) The only difference appears to be the specific vehicle for relief. In the First Action, Mojave Pistachios brings its claims under CCP § 1085, while in this action, it cites Water Code § 10726.6 and Revenue & Taxation Code § 5140.

II. Discussion

There is no dispute that the parties in the First Action and this action are identical. Nor is there any dispute that the relief sought in this action is identical to relief sought in the First Action (i.e., a refund of the extraction fee paid). As discussed in the companion order on Mojave Pistachios’ motion for leave to file a 3AP in the First Action, the Court will not permit Mojave Pistachios to use the amendment process in that action to avoid a potentially meritorious demurrer in this one. The only question is whether Mojave Pistachios is pursuing the same cause of action in both cases. They are.

California follows the primary right theory of pleading. “It provides that a ‘cause of action’ is comprised of a ‘primary right’ of the plaintiff, a corresponding ‘primary duty’ of the defendant, and a wrongful act by the defendant constituting a breach of that duty. [Citation.] The most salient characteristic of a primary right is that it is indivisible: the violation of a single primary right gives rise to but a single cause of action.” (Crowley v. Katleman (1994) 8 Cal.4th 666, 681.) “As far as its content is concerned, the primary right is simply the plaintiff’s right to be free from the particular injury suffered. [Citation.] It must therefore be distinguished from the legal theory on which liability for that injury is premised: ‘Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief.’ [Citation].” (Id., at pp. 681-82 [emphasis original].)

Both the First Action and this action allege that Mojave Pistachios was injured by an extraction fee that was adopted in violation of the SGMA and Propositions 26 and 218. Indeed, many of the allegations in this action were lifted word-for-word from the 2AP in the First Action. That Mojave Pistachios relies here on Water Code § 10726.6 and Revenue & Taxation Code § 5140 instead of CCP § 1085 is irrelevant. Under Crowley, the legal theory on which liability is premised is distinct from the underlying primary right.

In its opposition papers, Mojave Pistachios suggests it filed this action because of perceived tension between the SGMA and the Revenue & Taxation Code and how they permit a fee-payer or taxpayer to seek refunds. The Court understands Mojave Pistachios’ desire to ensure it has covered all its bases, but the proper course of action wasn’t to split claims by filing a second action based on the same primary right. It was to seek leave to plead the new theory of recovery in the First Action. Mojave Pistachios remains free to file such a motion if it wishes. This case, however, will be stayed until resolution of the First Action.