Filed 8/6/19
CERTIFIED FOR PARTIAL PUBLICATION*
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
BARCLAY HOLLANDER B284182
CORPORATION,
(Los Angeles County
Plaintiff and Appellant, Super. Ct. No. BS158024)
v.
CALIFORNIA REGIONAL WATER
QUALITY CONTROL BOARD,
LOS ANGELES REGION,
Defendant and Respondent;
SHELL OIL COMPANY,
Real Party in Interest and
Respondent.
APPEAL from a judgment of the Superior Court of
Los Angeles County, Amy D. Hogue, Judge. Affirmed.
* Pursuant to California Rules of Court, rules 8.1105 and
8.110, this opinion is certified for publication with the exception
of parts III and V–VII of the Discussion.
Gibson, Dunn & Crutcher, Patrick W. Dennis, William E.
Thomson and Thomas A. Manakides for Plaintiff and Appellant.
Xavier Becerra, Attorney General, Robert W. Byrne,
Assistant Attorney General, Eric M. Katz, John S. Sasaki and
Carol Ann Zimmerman Boyd, Deputy Attorneys General, for
Defendant and Respondent.
Morgan, Lewis & Bockius, Thomas M. Peterson, David L.
Schrader, Deanne L. Miller, Stephanie Chen and Emily L.
Calmeyer for Real Party in Interest and Respondent.
_________________________
Appellant Barclay Hollander Corporation (Barclay) seeks
reversal of a judgment of the Los Angeles Superior Court denying
its Petition for Writ of Mandate by which it sought to overturn
the determination of the State of California Regional Water
Quality Control Board, Los Angeles Region (Water Board) that
Barclay is jointly and severally responsible with real party in
interest Shell Oil Company (Shell) for the cleanup and abatement
of petroleum hydrocarbon compounds and other contaminants
(the petroleum residue or waste) at the former Shell tank farm in
Carson, California (the Site).
We affirm the trial court’s order and judgment upholding
the Water Board’s determination.
FACTUAL AND PROCEDURAL BACKGROUND
Barclay is a wholly owned subsidiary of Dole Food
Company, Inc. In Dole Food Co., Inc. v. Superior Court (2015)
242 Cal.App.4th 894 (Dole), we considered and resolved issues
2
related to the good faith settlement of a class action brought by
owners of homes constructed on the Site, the same area that is
the subject of the Water Board’s revised Cleanup and Abatement
Order (RCAO) in this case.
In our opinion in Dole, we described that earlier litigation,
in relevant part, as follows. “Between the 1920’s and the early
1960’s, Shell owned and operated three crude oil storage
reservoirs, known as the Kast Tank Farm, at the site which later
was developed as the Carousel tract. It is alleged that at least
one of the storage tanks was leaking its contents into the soil,
causing the site to become contaminated with toxic substances.
[¶] In October 1965, Shell entered into an agreement to sell the
land to Richard Barclay and his associates (Barclay), a group of
residential developers that intended to convert the property into
a residential subdivision. Shell transferred title to the property
in October 1966. In preparation for the change in use, the oil
storage reservoirs were decommissioned, the reservoir walls were
torn down and buried on site, and the land was graded for home
construction. The land was rezoned from industrial to
residential, and the Carousel homes were constructed and sold by
the early 1970’s.
“. . . .
“In 2008, after discovering contamination nearby, the
Water Board directed Shell to conduct environmental testing at
the Carousel tract. These investigations revealed the presence of
petroleum hydrocarbons in the areas where Shell’s former oil
reservoirs had been located. In March 2011, the Water Board
issued a cleanup and abatement order to Shell, directing it to
submit a proposed remediation plan. This order was based on
Shell’s ‘ownership of the former Kast Property Tank Farm’ and
3
its ‘former operation of a petroleum hydrocarbon tank farm at the
Site.’
“After submitting an initial RAP[1] that was rejected, Shell
submitted a revised RAP in June 2014, with an addendum in
October 2014. Under the revised RAP, Shell will, inter alia,
excavate five to 10 feet beneath the homes, following excavation
will install a vapor extraction and venting mechanism, and will
institute comprehensive long-term monitoring. In addition, Shell
will provide temporary relocation assistance in connection with
implementing the RAP, and will compensate Carousel
homeowners to ensure they receive fair market value if they elect
to sell their homes. [¶] Shell’s corporate representative, William
Platt, has estimated it will cost Shell $146 million to implement
the RAP.” (Dole, supra, 242 Cal.App.4th at pp. 899-900, fns.
omitted.)
We made reference there to the addition of Barclay to the
RCAO, writing in footnote 6 of our opinion in Dole, “. . . the Water
Board recently adopted the staff’s recommendation, thus making
Barclay Hollander responsible for contributing to the cost of the
board-ordered remediation.” (Dole, supra, 242 Cal.App.4th at
p. 900.) That order is the subject of the present appeal.
Shell purchased the 44.3-acre Site in 1923. Three storage
tanks or reservoirs were situated there; each was constructed
with interior concrete liners, its walls supported externally by
compacted earth; each reservoir had a wooden top. The total
storage capacity of the three reservoirs was 3.5 million barrels of
oil. Each reservoir was surrounded by an earthen berm 10 to 15
feet in height. Earthen berms also had been built on the
1 The acronym RAP stands for remedial action plan. (Dole,
supra, 242 Cal.App.4th at p. 898.)
4
perimeter of the property to retain any overflow of petroleum.
The reservoirs were used primarily to store “heavy oils.” Beneath
the site are preexisting groundwater aquifers used for drinking
water.
During Shell’s operation of the Kast Tank Farm the
reservoirs leaked,2 releasing petroleum and petroleum residue
into the surrounding soil and groundwater.
By 1959, utilization of the tank farm had decreased;
thereafter, the three reservoirs were used for “stand-by storage.”
As of February 1964, the three reservoirs held a total of 425,448
barrels of a mixture of petroleum product and water.3
Barclay made an offer to purchase the Site on October 14,
1965. In a visit to the Site a week later, on October 21, 1965, the
Barclay representative learned the condition of the Site,
including the contents of the three reservoirs. Four days later,
Shell wrote to Barclay pursuant to the latter’s request, to advise
it more specifically of the contents of each reservoir, enclosing 10
drawings concerning the Site.4 Later that month, Barclay and
Shell agreed to the sale of the Site to “Richard Barclay or
2 The first leak in the record is one noted in a 1943 status
report, which indicates a leak in the lining of Reservoir No. 6,
which Shell repaired. Other leaks and the cost of their repair are
documented in later Shell memoranda.
3 The contents were characterized in contemporaneous Shell
internal reports as “unrecoverable” and as “non-usable.”
4 The letter was addressed to Barclay-Hollander-Curci. The
parties do not dispute that the correct party to these proceedings
is Barclay, which is the entity surviving after several transfers of
ownership of the Site.
5
nominee” conditioned “upon the effective re-zoning of the
industrial property to R-1” and approval by the purchaser “of an
engineering report to be obtained at [Barclay’s] sole cost and
expense.” Barclay was also aware of the existence of pipes for
transfer of petroleum across and beneath the surface of the Site.
In its letter to Shell dated December 1, 1965, Barclay
sought permission “to begin immediately to remove the liquid
waste and petroleum residues from the property.” Barclay
“estimate[d] it will take about three months for completion.” In
the same letter, Barclay wrote that it would be in a position to
begin grading the property and restoring it to its “natural grade”
in late February or March of 1966.
Shell consented to these requests for early entry and
commencement of the intended work subject to certain
conditions, including that Barclay “pay all costs and expenses
arising out of your work thereon and the disposition of wastes
and residues removed” from the property, and that “all work done
by or for [the purchaser] on said lands or in disposing of wastes
and residues removed . . . shall be done in a good, lawful and
workmanlike manner.” Richard Barclay agreed to these terms on
behalf of Barclay.
Later that month, on December 28, 1965, Richard Barclay
advised Shell that his nominee to take title to the property was
Lomita Development Co. (Lomita), doing so by letter on
stationery of Barclay.5 The closing date for the sale was to be
July 1, 1966.
In the early months of 1966, Lomita obtained from Pacific
Soils Engineering, Inc. (PSE) several reports on the condition of
5 Barclay does not dispute that it is responsible for the
actions of Lomita at the Site.
6
the soil on the Site and recommendations on how to dispose of the
four-foot-thick concrete structures that had been used in the
construction of the three reservoirs. In the section of its
January 7, 1966 letter to Lomita headed “Present Site
Conditions,” PSE described the reservoirs and surrounding area
as follows: “The existing structures on the subject tract were
constructed prior to 1930 and consist of three large oil reservoirs
and their attendant berms. The earthen walls of the reservoir[s]
are generally about fifteen feet in height and have a slope ratio of
1-1/2:1. The bottom[s] and sides of the reservoir[s] are lined with
a four-inch blanket of reinforced concrete. The reservoirs are
nearly 30 feet deep and are covered by wooden roofs. . . . [¶]
Earthen berms ranging in height from ten to fifteen feet have
been constructed between the reservoirs and around the exterior
boundaries of the tract. [¶] Due to the permeability of the surface
soils, water tends to pond in the topographically low areas of the
tract. An old sump, reported to be only three feet in depth, has
been approximately located . . . . In addition, large underground
pipes and conduits are to be found throughout the tract.”
PSE recommended that the concrete either be “wasted from
the site or buried deep enough in the fill so as not to interfere
with further construction.” Confirmation that the concrete slabs
were buried on the Site appears (a) in the terms and conditions
for issuance of the subdivision map for the development approved
by the Regional Planning Commission of the County of Los
Angeles; those terms included breaking up the concrete and
burying the slabs at least seven feet beneath the finished grade;
and (b) in a letter from PSE to Lomita, dated January 27, 1966,
in which PSE described the method by which it would break up
7
and place the concrete slabs at the appropriate depths before
covering them.6
In March 1966, PSE reported to Lomita with respect to its
testing of the soils at one of the reservoir sites that “the soil[s]
beneath the reservoir conform to those found in our original
exploration: Generally, the first three feet found directly beneath
the [concrete] slab tend to be silty and clayey sands which are
highly oil stained. The underlying soils are fine to medium clean
sands. All soils are in a dense state and suitable to receive fill.
Most of the soils in the borings have a petroleum odor, however
the actual amount of oil contained in the soil is unknown.” This
report was accompanied by an exhibit, denominated “Plate B,”
dated March 11, 1966, which listed the results of six borings and
the condition of the soil in each boring at various depths,
reporting that oil and oily smell were present in almost every
boring and at almost every depth.
Notwithstanding the December 1, 1965 letter agreement in
which Barclay had set out its schedule for cleanup and grading of
the Site, an April 1966 internal Shell memorandum indicated
that as of that date, Lomita had not completed any phase of its
work, explaining that while two of the reservoirs were “empty
and clean,” oil and water remained in the third. According to this
memorandum, the property was not in “a safe condition in [its]
present state” with respect to two of the three reservoirs. An
August 15, 1966 internal Shell memorandum indicated that by
that date all of the “oil” had been removed and the safety hazards
had been remediated. This memorandum noted, “This leaves the
6 The January 27, 1966 letter from PSE to Lomita also states
that “Prior to placing fill on the broken bottom slab[s], hand
auger holes will be drilled to examine existing underlying soils.”
8
property so there is almost nothing to burn and no chance of
anyone falling in any kind of oil sump or pit.”
In September 1966, PSE reported to Lomita on a revision
in the method that would be used to bury the concrete slabs,
advising that once the slabs were broken up, they should be
“thoroughly mixed with soil, watered and compacted with a
heavy vibratory roller. Following completion the mixture should
be watered thoroughly to insure proper filling of all voids.” PSE
reported it had tested this method and that “Applying this to
[the] entire reservoir bottom, nearly 5,000,000 cu. ft. of water
should percolate through the reservoir floor. This indicates that
drainage should not be a problem in the development of this
parcel.” In April 1967, PSE made a similar recommendation for
another section of the Site.
The transaction had originally been scheduled to close
escrow in July 1966; however, various delays resulted in
extending the closing date to October 1, 1966. The Grant Deed
from Shell to “Lomita Development Co., a partnership” was
recorded in the Office of the Los Angeles County Recorder on
October 14, 1966.
Thereafter, Lomita sold a few lots in the new subdivision to
homeowners before granting the remainder of the Site to
“Barclay Hollander Curci, Inc, a California corporation.” The
remainder of the lots were sold by the successor entity, Barclay
Hollander, Inc. (BHI).7
7 Although Barclay’s opening brief indicates the final sales
were made in 1971, the citation to the record on this point refers
to a 1960 tract map and therefore does not substantiate that
date. The date has relevance to determining the law applicable
to Barclay’s claim that it is entitled to rely on the safe harbor of
9
In March 2008, the Water Board learned from the
California Department of Toxic Substances Control that the soil
and groundwater at the Site may be contaminated from
discharges of petroleum hydrocarbons. Stating its “concern[]
with the potential threat to the health of residents from the
exposure to petroleum related contaminants,” on May 8, 2008,
the Water Board ordered Shell, as a former owner and operator of
the Site, “to initiate a complete environmental investigation
including evaluation of impacts to groundwater and the potential
threat to human health and if immediate action is required.”8
Water Code section 13304, subdivision (j). We address this issue
in part VII of this opinion.
8 The Water Board cited Water Code sections 13304 and
13267 as authority for this order. Water Code section 13304
provides, in pertinent part:
“(a) A person who has discharged or discharges waste into
the waters of this state in violation of any waste discharge
requirement or other order or prohibition issued by a regional
board or the state board, or who has caused or permitted, causes
or permits, or threatens to cause or permit any waste to be
discharged or deposited where it is, or probably will be,
discharged into the waters of the state and creates, or threatens
to create, a condition of pollution or nuisance, shall, upon order of
the regional board, clean up the waste or abate the effects of the
waste . . . .
“. . . .
“(j) This section does not impose any new liability for acts
occurring before January 1, 1981, if the acts were not in violation
of existing laws or regulations at the time they occurred.”
Water Code section 13267 provides, in pertinent part:
“(a) A regional board, in establishing or reviewing any
water quality control plan or waste discharge requirements, or in
10
In response to that order, Shell conducted the requested
environmental investigation, including collecting analytical data,
and compiled technical reports based on 2,400 samples taken at
several locations on the Site. The data revealed petroleum
hydrocarbon contamination at varying depths at these locations
and, inferentially, throughout the Site.
In a June 9, 2010 letter from Shell to the then Interim
Executive Officer of the Water Board, Sam Unger (Unger), Shell
connection with any action relating to any plan or requirement
authorized by this division, may investigate the quality of any
waters of the state within its region.
(b) (1) In conducting an investigation specified in
subdivision (a), the regional board may require that any person
who has discharged, discharges, or is suspected of having
discharged or discharging, or who proposes to discharge waste
within its region, or any citizen or domiciliary, or political agency
or entity of this state who has discharged, discharges, or is
suspected of having discharged or discharging, or who proposes to
discharge, waste outside of its region that could affect the quality
of waters within its region shall furnish, under penalty of
perjury, technical or monitoring program reports which the
regional board requires. The burden, including costs, of these
reports shall bear a reasonable relationship to the need for the
report and the benefits to be obtained from the reports. In
requiring those reports, the regional board shall provide the
person with a written explanation with regard to the need for the
reports, and shall identify the evidence that supports requiring
that person to provide the reports.
“. . . .
“(e) As used in this section, ‘evidence’ means any relevant
evidence on which responsible persons are accustomed to rely in
the conduct of serious affairs, regardless of the existence of any
common law or statutory rule which might make improper the
admission of the evidence over objection in a civil action.”
11
provided its understanding of the organizational history of
Barclay and related entities, including that Barclay was now a
wholly owned subsidiary of Dole. Also in that letter, Shell
“acknowledge[d] its obligation to address the environmental
conditions created by its former operations.” Shell “respectfully
requests that you also include Barclay Hollander and Dole Foods
on any order issued related to remediation of the [Site].” The
next month, Shell’s attorneys sent the Water Board a 14-page
letter accompanied by 35 exhibits in which they documented the
bases for Shell’s request that Barclay and Dole be added to the
Cleanup and Abatement Order (CAO).
On March 11, 2011, the Water Board issued a CAO (No.
R4-2011-0046) to Shell, ordering it to clean up and abate the
contamination at the Site. The CAO contained the determination
that Shell was a discharger as described in Water Code section
13304 and a responsible party for the Site based on its prior
ownership of the Site and its former operation there of the
petroleum hydrocarbon tank farm. The Water Board’s findings
included that Shell’s “activities at the Site have caused or
permitted the discharge of waste resulting in soil, soil vapor, and
groundwater pollution, including discharges of waste to the
waters of the state, and nuisance.”
The CAO ordered Shell to assess, monitor, clean up and
abate the effects of the petroleum hydrocarbon compounds and
other contaminants at the Site.
The next month, on April 22, 2011, the Water Board
notified Barclay’s parent, Dole, that information in the files of the
Water Board, including information provided by Shell, “suggests
that the contamination related to the shallow soil [from 0 to 10
feet below ground surface . . . and perhaps deeper] was directly
12
related to the demolition of the petroleum hydrocarbons (crude
oil) storage reservoirs and the grading of the [Site], which were
performed by, and were the sole responsibility of, [Lomita] and its
affiliate(s).” The Water Board ordered Dole to provide all
information related to its ownership of the Site and activities
there, specifically requesting information regarding the
reservoirs and redevelopment of the Site into the Carousel tract
neighborhood, and to do so by June 15, 2011.9
On September 15, 2011, following an extension of time
granted by the Water Board, Dole’s attorneys responded to the
April 22, 2011 order in a 25-page letter, accompanied by 113
exhibits and a declaration. Dole took the position that there was
no legal basis upon which to name it as a discharger based on any
activities of Lomita, and because, “In April 1969, a Dole
subsidiary, not Dole, acquired the remaining unsold lots. . . . In
any event, whether or not the Dole subsidiary is a discharger,
Dole does not become a discharger on the mere basis that it owns
a corporation that is an alleged discharger.”
On October 31, 2013, Water Board Site Cleanup Program
Staff (SCP Staff) proposed adding Barclay as an additional
responsible party. Also, on that date, the Water Board issued a
draft revised CAO (RCAO) adding Barclay as a responsible party,
and offered Dole and Shell, and the public, the opportunity to
submit comments and evidence with respect to it. Dole requested
an extension of the scheduled response date, advising that “we
have experts who will be offering written opinions regarding
certain issues presented,” also asking for time to respond to
comments that may be made to the draft RCAO by others. The
9 This order was issued pursuant to Water Code section
13267.
13
Water Board granted Dole’s request and a subsequent request for
an additional extension of time. Dole’s response to the draft
RCAO, which it filed on January 21, 2014, consisted of an 82-
page brief, a 333-page technical response, expert witness
declarations and 359 exhibits; in all, it totaled over 11,000
pages.10
On June 3, 2014, the Water Board gave notice it would
accept additional public comments on the proposed RCAO.11
Shell filed its comments addressing Dole’s January 2014
submission on June 16, 2014, to which Dole responded on
June 30, 2014, with a letter, a witness declaration and additional
expert witness declarations, totaling 800 pages.
On December 8, 2014, Unger, now the Executive Officer of
the Water Board, issued a memorandum advising that the Water
Board was recommending issuance of the RCAO by adding
Barclay as a responsible party and discharger. The
memorandum contained an extensive discussion of the bases for
this recommended determination; it was accompanied by 15
attachments, including SCP Staff’s analysis of the issues raised
in Dole’s letters to the Water Board.
10 In this filing, Dole acknowledged that Barclay carried
liability insurance and that “in that limited sense,” it has assets.
Dole continued to contest that Barclay was a discharger and
responsible party, but conceded that if an RCAO were to issue,
Barclay was the appropriate party to be named in it.
11 The parties have not cited, and we did not locate in the
record, any comments that may have been received from the
public.
14
Dole responded to this memorandum on December 24,
2014, for the first time asking the Water Board executive in
charge of the matter (Chief Deputy Executive Officer Smith, or
Smith) to conduct a formal hearing and to give consideration to
what Dole described as “additional critical evidence” that Barclay
characterized as previously unavailable.
On January 6, 2015, Dole filed a 19-page letter by which it
submitted multiple additional expert reports as well as other
materials it sought to have the Water Board consider before
issuing a revised order adding Barclay as a discharger and
responsible party. The next day, counsel for Shell submitted a
letter in response to Dole’s December 24, 2014 letter in which
Shell argued there was substantial evidence to add Dole and
Barclay as responsible parties. Shell also observed that Dole was
in error in claiming in its December 2014 letter that it had not
been told earlier that the Water Board was considering naming
Barclay in the RCAO, and questioned why counsel for Dole and
Barclay were only then making a request for a formal hearing.
On January 9, 2015, the Water Board issued a notice to “All
Parties and Interested Persons” advising that it was considering
the requests and offering the opportunity to comment on the
December and January submissions by Dole and Shell, setting
the deadline for receipt of such comments at January 16, 2015.
On January 15, 2015, SCP Staff advised that it had no
opinion on whether a formal, oral hearing should be held; also
writing that the request for such a hearing “is surprising given
that Barclay has known since at least October 31, 2013, that SCP
Staff was considering adding Barclay and other parties to the
CAO.” SCP Staff stated its objection to the request to submit
additional evidence because “Barclay has had many opportunities
15
to do so and was provided extensions of time to allow an adequate
opportunity to respond.” SCP Staff also stated its disagreement
with the factual claims in other recent submissions by Dole.
In its January 16, 2015 filing, Dole argued its additional
evidence should be admitted, now citing the “California
Administrative Procedure Act (‘APA’) provisions, and State
Water Resources Control Board (‘State Board’) regulations” as
the bases for its request for an oral hearing.12
On February 27, 2015, the Water Board resolved Barclay’s
requests to submit additional evidence, ruling that it would not
add to the record evidence that was previously available and
which could have been submitted during the prior notice and
comment periods; it would, however, accept the transcript of
deposition testimony of George Bach (Bach), the engineer who
had supervised Lomita’s work on the Site.
The Water Board also denied Barclay’s request to schedule
a formal evidentiary hearing, ruling that multiple opportunities
had been offered for anyone interested to submit written
testimony and evidence and that Dole and Barclay had “utilized
these opportunities and submitted more than 1,000 [sic, 11,000]
pages of documentary evidence. The factual questions raised by
the Draft [RCAO] are primarily technical and therefore, fit to be
addressed through written expert reports and rebuttal.” After
stating additional reasons why the recently made request for
formal hearing was inappropriate, the Water Board concluded,
“In light of the particular factual, legal and policy questions that
are raised, the Board has determined that the issues are
12 This set of documents is the subject of the first of Barclay’s
two requests for judicial notice filed in this court. We address
both of Barclay’s requests for judicial notice in section III, below.
16
adequately and thoroughly addressed through the submitted
written evidence and testimony, that [Dole and Barclay have]
been provided the opportunity for fair consideration of [their]
claims, and the burden and cost of an oral hearing is not
warranted in this instance.” The parties were nevertheless
offered the opportunity to comment on the Bach deposition
transcript which the Water Board had agreed to admit.13
On April 2, 2015, counsel for Dole and Barclay provided
written comments on the Bach deposition, also urging that an
earlier unsworn statement Bach had made be disregarded. Also
on that date, counsel for Shell submitted a letter in which it
argued that the Bach deposition merely confirmed information
already stated by him. SCP Staff wrote on the same day that, in
its view, the Bach deposition did not alter Staff’s conclusion that
Barclay should be added to the CAO as a responsible party.
On April 17, 2015, the Water Board issued notice that
action on the draft RCAO could be expected on or shortly after
April 24, 2015. Counsel for Dole and Barclay wrote to Smith on
April 22, acknowledging receipt of the April 17 notice and asking
that the Water Board defer any ruling until after certain
depositions had been taken in the Acosta civil action.14 On
April 30, 2015, the Water Board explained why it considered it
13 These rulings were made by Smith, the Chief Deputy
Executive Officer who had been designated by the Water Board’s
Executive Officer to act with respect to the RCAO.
14 The reference is to Acosta v. Shell Oil Co. (Super. Ct. L.A.
County, No. NC053643), one of the actions which was addressed
in our opinion in Dole, supra, 242 Cal.App.4th 894. See above, at
pages 2 and 3.
17
inappropriate to further defer completing action on the proposed
addition of a responsible party to the CAO, also advising counsel
for Dole and Barclay, and counsel for Shell, that the Water Board
was that day issuing the RCAO adding Barclay as a discharger
and as a responsible party with respect to the Site. This letter
stated in part:
“The modifications to the Draft Revised CAO include a
finding by the Regional Board that [Barclay’s] activities at the
Site not only violated Health and Safety Code section 5411, but
also violated Fish and Game Code section 5650 and Los Angeles
County Code section 20.36.010.1. . . . Barclay’s activities in
breaking up concrete reservoirs, ripping the reservoir floors, and
moving soil at the Site permitted petroleum and related products
to pass into, or [be] placed where it could pass into, waters of the
State. The activities also discharged and deposited, and allowed
the continued existence of a deposit of, petroleum hydrocarbons
that created a public nuisance, a menace to the public health and
safety, pollution of underground waters, and damage to private
property.”
The letter gave notice that anyone aggrieved by the Water
Board’s action could petition the State Water Resources Control
Board (State Board) to review the action within 30 days.
Among the findings of the 41-page RCAO were the
following:
“11. Pollution of Waters of the State: The Discharger has
caused or permitted waste to be discharged or deposited where it
is, or probably will be, discharged into the waters of the state and
creates, or threatens to create, a condition of pollution or
nuisance. As described in this Order and the record of the
Regional Board, the Discharger owned and/or operated the site in
18
a manner that resulted in the discharges of waste. The
constituents found at the site as described in Finding 8 constitute
‘waste’ as defined in Water Code section 13050(d). The discharge
of waste has resulted in pollution, as defined in Water Code
section 13050(l). The concentration of waste constituents in soil
and groundwater exceed water quality objectives contained in the
Water Quality Control Plan for the Los Angeles Region (Basin
Plan), including state-promulgated maximum contaminant
levels. The presence of waste at the Site constitutes a ‘nuisance’
as defined in Water Code section 13050(m). The waste is present
at concentrations and locations that ‘is injurious to health, or is
indecent, or offensive to the senses, or an obstruction to the free use
of property, so as to interfere with the comfortable enjoyment of life
or property . . . and [a]ffects at the same time an entire community
or neighborhood, or any considerable number of persons, although
the extent of the annoyance or damage inflicted upon individuals
may be unequal.’
“. . . .
“13. Substantial evidence indicates that the Discharger
caused or permitted waste to be discharged into waters of [the]
state and is therefore appropriately named as a responsible party
in this Order. Shell owned and operated the Site, then sold the
property to the developers, leaving in place three reservoirs and
residual petroleum hydrocarbons in at least one tank and in soil
underneath and surrounding the reservoirs. The residual
petroleum hydrocarbons are still present at the Site and continue
to cause pollution and nuisance as documented in this Order and
the Regional Board files. The Regional Board has investigated
additional potentially responsible parties (including, but not
limited to, Lomita Development Company, Richard Barclay,
19
Barclay-Hollander-Curci, Dole Foods, Inc., Barclay Hollander
Corporation and/or any of its successors) and has determined
that Lomita, which merged into and was survived by Barclay-
Hollander-Curci, renamed [Barclay], caused or permitted the
discharge of waste at the Site. Lomita purchased the Site with
explicit knowledge of the presence of the petroleum reservoirs
and the presence of residual petroleum hydrocarbons, and
conducted various activities, including partially dismantling the
concrete in the reservoirs and grading the onsite materials.
These activities spread the waste at the Site and contributed to
the migration of the waste through soil and groundwater. The
residual petroleum hydrocarbons are still present at the Site and
continue to cause pollution and nuisance as documented in this
Order and the Regional Board files. Including [Barclay] as a
responsible party in this Order is consistent with orders of the
State Water Resources Control Board construing Water Code
section 13304 naming former owners who had knowledge of the
activities that resulted in the discharge and the legal ability to
control the continuing discharge. Including [Barclay] as a
responsible party is consistent with Water Code section 13304(j)
because Lomita or [Barclay’s] actions that resulted in creating
pollution and nuisance were unlawful since at least 1949. If the
Regional Board becomes aware of any other responsible parties it
will consider naming such persons in this Order.”15 (Original
italics, fns. omitted.)
15 Water Code section 13304, subdivision (j) provides a safe
harbor from sanction under the Porter-Cologne Water Quality
Control Act if the conduct otherwise subject to that law occurred
prior to 1981 and complied with “existing laws or regulations at
the time [the conduct] occurred.”
20
On May 21, 2015, counsel for Dole and Barclay notified
Smith they intended to challenge the RCAO and asked that its
implementation be stayed. The Water Board denied this request.
Barclay’s appeal to the State Board was denied by operation of
law after that body took no action on it. (Wat. Code, § 13320,
subd. (a); Cal. Code Regs., tit. 23, § 2052, subd. (a)(1); see
Johnson v. State Water Resources Control Bd. (2004) 123
Cal.App.4th 1107, 1112-1113; People ex rel. Cal. Regional Wat.
Control Bd. v. Barry (1987) 194 Cal.App.3d 158, 177.)
Barclay filed its “Verified Petition for Review of
Administrative Mandamus (Code Civ. Proc., § 1094.5)” on
September 30, 2015, which was superseded on March 1, 2016, by
the operative “Verified First Amended Petition for Writ of
Administrative Mandamus.” Following trial on April 24, 2017,
the superior court denied the petition. Judgment on the petition
was entered on June 5, 2017. This timely appeal followed.
CONTENTIONS
Barclay contends: (1) the Water Board failed to hold the
type of hearing required by the Administrative Procedure Act
(Gov. Code, §§ 11340-11529) (APA) and its Administrative Bill of
Rights (Gov. Code, §§ 11425.10-11425.60 (Bill of Rights); (2) the
payments Shell made to the Water Board constituted a conflict of
interest tainting the proceedings and the RCAO; (3) Barclay’s
actions are protected by the safe harbor of Water Code section
The Water Board explained in a footnote to paragraph 13 of
the RCAO that Barclay’s conduct did not qualify for this safe
harbor based on the Water Board findings that Barclay’s actions
were contrary to Health and Safety Code section 5411, Fish and
Game Code section 5650 and Los Angeles County Code section
20.36.010.
21
13304, subdivision (j); (4) Barclay did not cause or permit a
discharge of waste because its actions were not performed with
the required knowledge of the hazards created; and (5) the trial
court erred in refusing to admit and consider additional evidence
proffered by Barclay.16
DISCUSSION
I. Introduction
The Porter-Cologne Water Quality Control Act (Wat. Code,
§ 13000 et seq.) (the Porter-Cologne Act), under which the RCAO
was issued, revised Water Code provisions addressing both water
rights and water quality and expanded the statewide program of
water quality control maintained through regional
administration within the framework of statewide coordination
and policy. For the purposes of the Porter-Cologne Act and of its
predecessor, the Dickey Water Pollution Act (former Wat. Code,
§ 13000 et seq.) (the Dickey Act), the state is divided into nine
regions, each of which is governed by a regional board. (Wat.
Code, §§ 13200, 13201; compare Dickey Act, former Wat. Code,
§§ 13040-13044.)17 Each regional board is charged with
formulating and adopting water quality control plans for its
16 Barclay does not also argue, based on one or more of these
claims, that the Water Board failed to proceed in the manner
required by law and that Code of Civil Procedure section 1094.5,
under which this case was filed in the trial court, requires that
the judgment be reversed. Nevertheless, we understand that to
be the import of the first of Barclay’s contentions.
17 Future references to the Porter-Cologne Act will be made to
the relevant Water Code section number; references to provisions
of the Dickey Act will be made to the relevant “former” Water
Code section number.
22
region and, through those plans, establishing water quality
objectives that will “ensure the reasonable protection of beneficial
uses [of waters of the state] and the prevention of nuisance.”
(Wat. Code, §§ 13240, 13241.)
Pursuant to the Porter-Cologne Act, a regional board may
issue orders to enforce its water quality control plans and, as
relevant here, may issue orders mandating the cleanup and
abatement of waste by any person “who has caused or permitted,
causes or permits, or threatens to cause or permit any waste to be
discharged or deposited where it is, or probably will be,
discharged into the waters of the state.” (Wat. Code, §13304,
subd. (a).)18
In this case, the Water Board issued a cleanup and
abatement order, originally ordering only Shell to clean up and
abate the petroleum residue and waste at the Site. On this
appeal, Barclay advances several reasons why, in its view, the
Water Board erred in adding it as a responsible party to the
RCAO and why the superior court erred in sustaining that order.
18 At the time of Barclay’s actions in the present case
(principally, through its agent Lomita), the predecessor
legislation addressing, inter alia, water quality, the Dickey Act,
was in effect. While the administrative structure of the statewide
water control program was similar, and the remedies available
and at issue in this case are those provided for under the Porter-
Cologne Act, many of the statutory provisions relevant to the
issues in this appeal require consideration of provisions of the
Dickey Act rather than those of the Porter-Cologne Act, as we
discuss in the text, below.
23
II. Standards of Review
“A party aggrieved by a final decision or order of a regional
board . . . may obtain review of the decision or order of the
regional board in the superior court by filing in the court a
petition for writ of mandate.” (Wat. Code, § 13330, subd. (b).)
The petition for writ of mandate is governed by Code of Civil
Procedure section 1094.5, subdivision (c), and “the court shall
exercise its independent judgment on the evidence.” (Wat. Code,
§ 13330, subd. (e).) “ ‘In exercising its independent judgment, a
trial court must afford a strong presumption of correctness
concerning the administrative findings, and the party challenging
the administrative decision bears the burden of convincing the
court that the administrative findings are contrary to the weight
of the evidence.’ ” (Building Industry Assn. of San Diego County
v. State Water Resources Control Bd. (2004) 124 Cal.App.4th 866,
879.) An “abuse of discretion is established if the court
determines that the findings are not supported by substantial
evidence in the light of the whole record.” (Code Civ. Proc.,
§ 1094.5, subd. (c).)
“The independent judgment standard in which the trial
court determines whether administrative findings are supported
by the weight of the evidence differs from the substantial
evidence standard of review. (Alberda v. Board of Retirement of
Fresno County Employees’ Retirement Assn. (2013) 214
Cal.App.4th 426, 435 (Alberda).) ‘In substantial evidence review,
the reviewing court defers to the factual findings made below. It
does not weigh the evidence presented by both parties to
determine whose position is favored by a preponderance.
Instead, it determines whether the evidence the prevailing party
presented was substantial—or, as it is often put, whether any
24
rational finder of fact could have made the finding that was made
below. If so, the decision must stand.’ (Ibid., italics omitted.) In
contrast, under the independent judgment standard, ‘the trial
court begins its review with a presumption that the
administrative findings are correct, it does not defer to the fact
finder below and accept its findings whenever substantial
evidence supports them. Instead, it must weigh all the evidence
for itself and make its own decision about which party’s position
is supported by a preponderance. [Citation.] The question is not
whether any rational fact finder could make the finding below,
but whether the reviewing court believed the finding actually was
correct.” (Ibid., italics omitted.)” (Coastal Environmental Rights
Foundation v. California Regional Water Quality Control Bd.
(2017) 12 Cal.App.5th 178, 187-188; see Marina County Water
Dist. v. State Water Resources Control Bd. (1984) 163 Cal.App.3d
132, 138.)
“Where, ‘as here, the trial court is required to review an
administrative decision under the independent judgment
standard of review, the standard of review on appeal of the trial
court’s determination is the substantial evidence test.
[Citations.]’ (Fukuda [v. City of Angels (1999)] 20 Cal.4th [805,]
824.) ‘[W]e review its factual determinations under the
substantial evidence standard and its legal determinations under
the de novo standard. [Citations.] “[W]e are not bound by the
legal determinations made by the state or regional agencies or by
the trial court. [Citation.] But we must give appropriate
consideration to an administrative agency’s expertise underlying
its interpretation of an applicable statute.” [Citation.]’ (Coastal
Environmental Rights Foundation v. California Regional Water
Quality Control Bd. [, supra,] 12 Cal.App.5th [at p.] 190.)”
25
(Monterey Coastkeeper v. State Water Resources Control Bd.
(2018) 28 Cal.App.5th 342, 361; accord, Alberda, supra, 214
Cal.App.4th at p. 434; Rosenblit v. Superior Court (1991) 231
Cal.App.3d 1434, 1442 [appellate review of questions of law is
de novo].)
III. The parties’ requests for judicial notice; Barclay’s
claim that the trial court wrongly rejected evidentiary
materials it proffered
We first address requests for judicial notice on appeal of
documents as requested by the Water Board and by Barclay, next
considering Barclay’s claim that the trial court wrongly rejected
its proffer of certain evidence. We do so because whether these
materials are properly considered has direct impact on our
consideration of other contentions Barclay raises on appeal.
We earlier granted the Water Board’s request that we take
judicial notice of the legislative history of Statutes 1969, chapter
482, section 18; of Statutes 1970, chapter 918, section 5.3; of
Statutes 1971, chapter 1288, section 11; and of Statutes 1980,
chapter 808, section 3.19 In addition to there being no opposition
stated to these requests, we did so because, as the Water Board
noted in its request, one of the issues presented by Barclay in this
appeal is the proper interpretation of certain statutes,
particularly Water Code section 13304, subdivision (j).
Legislative history materials are commonly the subject of judicial
notice and are of assistance in resolving such issues. (See Evid.
Code, § 452, subd. (c) [reports of legislative committees]; Elsner v.
Uveges (2004) 34 Cal.4th 915, 934, fn. 19; Kaufman & Broad
19 These statutes contain the original text of the Porter-
Cologne Act and of certain amendments to it.
26
Communities, Inc. v. Performance Plastering, Inc. (2005) 133
Cal.App.4th 26, 30 [explicating types of legislative materials of
which judicial notice may be taken].)
The Water Board also requested that we take judicial
notice of three letters it sent to Shell that concern Shell’s
participation in the Site Cleanup Oversight Reimbursement
Account (Cost Recovery Program) dated May 8 and December 2,
2008 and July 15, 2011. It does so in connection with its response
to Barclay’s argument in section VI, below, that proceedings
before the Water Board relating to the determination to add
Barclay as a responsible party were “tainted” by payments Shell
made to the Water Board. We grant this request for reasons we
discuss in our rulings regarding these letters in that section of
this opinion.
Barclay made two unopposed requests for judicial notice,
both of which we granted prior to argument. The second request,
filed November 9, 2018, by which Barclay seeks judicial notice of
sections 640 and 648 through 648.8 of title 23 of the California
Code of Regulations, is clearly authorized by Evidence Code
sections 452, subdivision (c), and 459 as these regulations are
relevant to issues raised in this appeal. We modify our prior
grant of this request for reasons we explain in the accompanying
footnote.20
20 The text of these regulations as Barclay presented it in the
subject request for judicial notice was not adopted. Inspection of
the History Table for Chapter 1 of Division 3 of the regulations of
the State Water Resources Control Board and Regional Water
Control Boards reveals that this document, Resolution 98-120 of
the State Water Resources Control Board, containing versions of
the regulations of which Barclay sought judicial notice, was
27
Barclay’s first request, filed March 20, 2018, presents more
nuanced issues, issues requiring detailed discussion to explain
the reasons for our initial order and the reasons we revisit that
order now.
We begin our review of this request by describing by
category the documents contained in it, further identifying in
parentheses following each category the numbers which Barclay
assigned to them in its request: (a) pleadings and memoranda
filed in other litigation (1-9); (b) memoranda of the Chief Counsel
of the State Water Resources Control Board (10-11); (c) pleadings
and declarations filed by Barclay concerning its petition for
review of the RCAO (12-16); (d) transcripts of depositions of Dr.
Ayalew (a Water Board employee) and of Unger (17-18); records
of the State and Regional Water Boards (19-23); (e) invoices
issued by the Regional Water Board to Shell between 2008 and
2015 (24); (f) the transcript of the June 12, 2014 meeting of the
Water Board (25); (g) “hearing procedure” and other documents
prepared by other regional water boards (26-36); (h) an
organizational chart of “the Board” (37); and (i) events which
rejected by the Office of Administrative Law (OAL) on
January 12, 1999. Thereafter, a revised set of those regulations
was approved by the OAL. We therefore modify our prior grant
of judicial notice, taking judicial notice of the approved versions
of title 23 of the California Code of Regulations sections 640 and
648 through 648.9, pursuant to Evidence Code sections 452,
subdivisions (b) and (c) and 459.
We also take judicial notice of the legislative history of the
statutes discussed at various locations in the course of this
opinion based on the statutory provisions and case authority we
have cited.
28
Barclay describes as “facts and propositions not reasonably
subject to dispute.” (38-43).
Barclay represents that, in the judgment before us on this
appeal, the trial court took the following actions on the items
listed: (a) it declined to take judicial notice of items 1-11, 17-35,
37, and 39-42; and (b) it took judicial notice of items 12-16, and
38. Barclay does not indicate in its request for judicial notice any
action by the trial court with respect to items 36 and 43.21
Because the trial court did take judicial notice of certain of
the items listed, they are already part of the administrative
record in this appeal and their inclusion in the subject request
was unnecessary.
With respect to the items as to which the trial court denied
Barclay’s request for judicial notice which Barclay now renews,
we granted Barclay’s request earlier in these proceedings so that
we would have those items before us for the purpose of
determining, once we received the parties’ briefs, if there were
some basis upon which they are appropriate for consideration on
this appeal.
The principal argument Barclay makes in support of its
current request is that the judgment should be reversed based on
the trial court’s refusal to grant Barclay’s request to admit these
items. A corollary argument which Barclay advances in this
21 Barclay responded to a question which we posed in our
June 10, 2019 letter (Gov. Code, § 68081) concerning its request
that the trial court take judicial notice of these items by advising
us that the trial court denied that request. We also deny the
similar request which Barclay makes on appeal on the same basis
as we state in the text of this opinion regarding Barclay’s request
as to other documents which were also denied admission into the
trial court record.
29
court is that these items aid in establishing “procedural
[un]fairness” of the proceedings before the agency.
Now that we know its full context, we reconsider Barclay’s
first request for judicial notice as to the items not already part of
the record, doing so to determine whether the trial court abused
its discretion in denying the request that it take judicial notice of
the items still at issue (all items other than 12-16). We apply this
standard to our review because it is established that an appellate
court reviews for abuse of discretion an appellant’s claim that a
trial court wrongly denied its requests for judicial notice
(Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256,
264, revd. on other grounds in Yvanova v. New Century Mortgage
Corp. (2016) 62 Cal.4th 919) and because there is no basis upon
which to take judicial notice on appeal of items not in the
administrative record (subject to an exception which we address
below).
To be considered in quasi-judicial administrative
mandamus proceedings, such as the present one, Code of Civil
Procedure section 1094.5, subdivision (e) requires that the
material must have been unavailable at the time of the hearing
“in the exercise of reasonable diligence” or otherwise improperly
excluded from the record. (Eureka Citizens for Responsible
Government v. City of Eureka (2007) 147 Cal.App.4th 357, 367,
citing Western States Petroleum Assn. v. Superior Court (1995) 9
Cal.4th 559, 578.) Further, a trial court’s order granting judicial
notice is presumed to be correct. (Denham v. Superior Court
(1970) 2 Cal.3d 557, 564; Yu v. University of LaVerne (2011) 196
Cal.App.4th 779, 787.)
In arguing the trial court wrongly denied its request to take
judicial notice of the documents it now seeks to have us add to
30
the record on appeal, Barclay restates the arguments it made
below and which were denied twice in the trial court. At the time
Barclay’s request was first denied, the reasons included that
Barclay did not “convince the court that what it wants to be
added to the record is relevant and could not, with reasonable
diligence, have been presented during the period of time the
[RCAO] was being considered by the Board Officer up to 4/30/15
[the date the RCAO was issued]. [¶] As to material that did not
exist at the time of the [RCAO], the evidence shows that
[Barclay], with the exercise of reasonable diligence, could have
developed it earlier. . . . [¶] [Barclay] fails to show sufficient
evidence of reasonable diligence for not presenting much of the
exhibits . . . . It appears that as to these exhibits that were not
produced earlier that [Barclay’s] approach was to simply let
things ride during the 2-1/2 year period [in which the Water
Board was considering issuing the RCAO] . . . . [¶] In addition,
the court finds that the ‘cost recovery’ procedures and application
do not amount to any bias by any standard.”
When Barclay later sought to have the court which
adjudicated its mandate petition take judicial notice of the
documents, it presented no more cogent argument: the result
was that the trial court additionally took judicial notice only of a
corrected deposition transcript (item 38) and of Barclay’s petition
to the State Board (item 12), and denied the other requests. In
doing so, the trial court rejected Barclay’s claims of relevance and
of diligence in obtaining and presenting the items, determining a
second time that “Barclay failed to exercise reasonable diligence
in developing and presenting the exhibits to the Regional Board.”
Barclay presents no different or more compelling argument
to this court and makes no cogent argument as to how the trial
31
court abused its discretion in denying Barclay’s earlier similar
requests. Before reaching this determination we also reviewed
the February 27, 2017 document containing the Water Board’s
denial of Barclay’s requests to augment the record with many of
the documents which are also in its request to this court. Having
done so, we find the reasons stated in the superior court’s two
rejections of Barclay’s requests and those stated by the Water
Board, at least equally as cogent at this stage of the case.22 We
determine that there was no error below in the denials;
accordingly, we deny Barclay’s first request for judicial notice.
Barclay’s related argument, that the trial court should have
considered the materials contained in its first request for judicial
notice filed in this court (which are not already part of the record
on appeal) because they bear on procedural unfairness—and that
the judgment should be reversed for this reason, is also fatally
22 In its opposition to this request for judicial notice, the
Water Board points out that many of the “facts” which Barclay
seeks to have admitted on appeal had been excluded below as
being both cumulative and presented untimely, and that Barclay
had not—and has not—convincingly established that it diligently
sought to obtain the material it belatedly requested to add to the
record below (e.g., the public records material); nor has it
established the relevance of that material. Shell makes similar
arguments. Both sets of argument have merit.
We also observe that many of the documents (e.g.,
pleadings in other actions and deposition transcripts in those
actions) would be admissible under any circumstances only for
the fact of their existence and not for the truth of the matters
they contain; nor are they relevant to issues presented on this
appeal. (See Guarantee Forklift, Inc. v. Capacity of Texas, Inc.
(2017) 11 Cal.App.5th 1066, 1075.)
32
flawed. The additional materials Barclay has proffered do not
address procedural unfairness in the action we now review. Also,
the principal case upon which Barclay relies, Clark v. City of
Hermosa Beach (1996) 48 Cal.App.4th 1152, concerns both the
impact of “pecuniary interests of board members” and their
personal embroilment in the dispute before that agency. (Ibid.,
p. 1170, fn. 17 & p. 1173.) There is no such evidence in the
present case, whether in the record or in Barclay’s request for
judicial notice.23
For these reasons, none of the materials in Barclay’s first
request for judicial notice in this court (other than those already
in the record on appeal) are admitted for any purpose other than
to adjudicate Barclay’s request.
IV. Compliance with the Administrative Procedure Act
and its Bill of Rights
A. The APA’s provisions do not automatically
apply to state agencies, including the Water Board
The APA (Gov. Code, §§ 11340-11529) provides that
adjudicative proceedings,24 and orders made therein by
administrative agencies, must comply with hearing procedures
23 There is one exception to our conclusion in this regard, i.e.,
Barclay’s claim that Shell “paid for” the investigation of Barclay
resulting in it being added to the order. We resolve that claim,
adversely to Barclay, in section VI of this opinion.
24 An adjudicative proceeding is “an evidentiary hearing for
determination of facts pursuant to which an agency formulates
and issues a decision.” (Gov. Code, § 11405.20.) A “decision” is
“an agency action of specific application that determines a legal
right, duty, privilege, immunity, or other legal interest of a
particular person.” (Gov. Code, § 11405.50.)
33
set out in the APA, when the APA is made applicable to those
proceedings.
Since 1995, the APA has included a Bill of Rights (Gov.
Code, §§ 11425.10-11425.60) which “specifies the minimum due
process . . . requirements that must be satisfied” in adjudicative
proceedings conducted by state agencies. (Cal. Law Revision
Com. com., Deering’s Ann. Gov. Code (2010 ed.) foll. § 11425.10,
p. 133.) These due process requirements can be satisfied,
depending on certain factors, by compliance with either “formal”
or “informal” hearing procedures. (Gov. Code, § 11500 et seq.
[formal proceedings] and § 11445.10 et seq. [informal
proceedings], respectively.)
Barclay contends the procedures utilized by the Water
Board in determining it was a discharger and in adding it as a
responsible party in the RCAO violated the Bill of Rights. It
bases its argument on the declarative statement in its opening
brief that “Under California’s Administrative Procedure Act,
every adjudicative proceeding conducted by a state agency—
including proceedings considering the issuance of cleanup
orders—must follow either formal or informal hearing
procedures.” As authority for this argument, Barclay relies on
our Supreme Court’s opinion in Department of Alcoholic Beverage
Control v. Alcoholic Control Appeals Bd. (2006) 40 Cal.4th 1
(ABC).
Barclay misunderstands both the application of the
threshold or gateway section of the APA and the manner in
which ABC applies to the present case.
Government Code section 11410.10 states: “This chapter
applies to a decision by an agency if, under the federal or state
Constitution or a federal or state statute, an evidentiary hearing
34
for determination of facts is required for formulation and
issuance of the decision.”
We begin by determining the meaning of this statute.
“ ‘ “When we interpret a statute, ‘[o]ur fundamental task
. . . is to determine the Legislature’s intent so as to effectuate the
law’s purpose. We first examine the statutory language, giving it
a plain and commonsense meaning. We do not examine that
language in isolation, but in the context of the statutory
framework as a whole in order to determine its scope and purpose
and to harmonize the various parts of the enactment. If the
language is clear, courts must generally follow its plain meaning
unless a literal interpretation would result in absurd
consequences the Legislature did not intend. If the statutory
language permits more than one reasonable interpretation,
courts may consider other aids, such as the statute’s purpose,
legislative history, and public policy.’ [Citation.] ‘Furthermore,
we consider portions of a statute in the context of the entire
statute and the statutory scheme of which it is a part, giving
significance to every word, phrase, sentence, and part of an act in
pursuance of the legislative purpose.’ ” ’ ” (Hassel v. Bird (2018) 5
Cal.5th 522, 540; accord, City of San Jose v. Superior Court
(2017) 2 Cal.5th 608, 616-617.)
The meaning of Government Code section 11410.10 is
unambiguous: The refence to “this chapter” is to Chapter 4.5 of
Part 1 of Division 3 of Title 2 of the Government Code.
Provisions regarding the APA Bill of Rights are set out in
Article 7 of this chapter. Thus, for any article in this chapter to
be applicable to the Water Board decision at issue, there must be
35
a provision of the Water Code (or some other statute25) that
makes the APA applicable.
Barclay has cited no such statute, nor has our independent
research identified one; the Water Code contains no statute
meeting the requirement of Government Code section 11410.10
for adoption of the APA in the proceedings reviewed in this case.
Instead, as in this case, when the Water Board acts
pursuant to Water Code sections 13267 and 13304, the
Legislature provided for review of such actions following issuance
of cleanup and abatement orders by the state water board and by
the courts, as we shall discuss. (Wat. Code, §§ 13320 & 13330,
respectively.)
Water Code section 13267 authorizes a regional water
board, or the state board, to investigate potential threats to the
quality of the waters of the state,26 including on an emergency
basis. This investigative authority of the regional water boards
includes (a) the right to ask anyone who has discharged,
discharges or is discharging, or is suspected of discharging, or
proposes to discharge waste that could affect the quality of the
waters of the state to provide the water board with technical and
monitoring reports under penalty of perjury; (b) the right to
inspect facilities to determine compliance with waste discharge
requirements; and (c) the right to issue cleanup and abatement
25 We consider the other qualifying language of this statute,
that referencing the federal and state Constitutions, and another
possible, statutory exception, in subsequent sections of this
opinion.
26 The term “Waters of the state” means “any surface water or
groundwater, including saline waters, within the boundaries of
the state.” (Wat. Code, § 13050, subd. (e).)
36
orders to remediate the discharge. (Wat. Code, §§ 13267 &
13304, respectively.)27
The Legislature’s selection of a postcleanup order
administrative and judicial review process likely is the result of
its determination that the potential threat to the public from
waters which are polluted or otherwise present a threat to their
health and well-being warrants the later placement and
availability of the review process.
The Water Code also provides that “all current record
owners of fee title to the site of the proposed action [be] notified of
the proposed action by the state board or regional board”
(§ 13307.1, subd. (a)), also requiring that the state and regional
water boards “shall take all reasonable steps necessary to
accommodate responsible landowner participation in the cleanup
or site closure process and shall consider all input and
recommendations from any responsible landowner wishing to
participate.” (§ 13307.1, subd. (b).)
Even though Barclay is not a current owner, the Water
Board provided it with extensive access to the process in which
the Water Board engaged prior to issuance of the RCAO; Barclay
had no further statutory right to participate.
This determination does not end our consideration of
Barclay’s contention. We will address other potential sources of
27 A separate provision of the Water Code, section 13301,
authorizes the issuance of cease and desist orders; while that
statute also requires that such orders “may be issued . . . after
notice and hearing,” it also does not incorporate any provision of
the APA. As we shall discuss, Government Code section 11410.40
provides authority for an agency to adopt portions of the APA,
which the State Water Board has done. (See section IV B, below.)
37
application of the APA in this case—whether either the federal or
state Constitutions requires compliance with the APA—after
addressing Barclay’s argument that the holding in ABC
mandated the Water Board’s compliance with the APA.
Barclay’s reliance on ABC to support its claim that the APA
and its Bill of Rights are applicable in this case is misplaced. The
APA applied to the proceeding under review in ABC because the
Legislature expressly so provided in Business and Professions
Code section 24300.28 By contrast, in the present case, no statute
provides for the action of the Water Board at issue here to be
subject to the APA, and thus applying the plain language of
section 11410.10, Chapter 4.5 of the Government Code, the APA
does not apply to the proceedings which led to issuance of the
RCAO. Thus, there is no statutory basis for application of the
APA to Barclay’s claims and the trial court’s determination that
the APA did not apply was correct. (See Basurto v. Imperial
Irrigation District (2012) 211 Cal.App.4th 866, 881-882 [rejecting
argument that the APA applies unless a state agency is
specifically excepted from its coverage]; see also Schutte &
28 Business and Professions Code section 24300, subdivision
(a) provides, in relevant part: “Except as provided in Section
24203 and in this section, the proceedings shall be conducted in
accordance with Chapter 5 (commencing with Section 11500) of
Part 1 of Division 3 of Title 2 of the Government Code, and in all
cases the department shall have all the powers granted therein.”
Thus, there is in the ABC case a specific statutory command that
the APA is applicable to those proceedings.
38
Koerting, Inc. v. Regional Water Quality Control Bd. (2007) 158
Cal.App.4th 1373, 1387 (Schutte).)29
The determination that the APA does not apply to
proceedings such as those we now review is also supported by the
statutory history of the Water Code. When the Dickey Act was
adopted, its section 13061 expressly required that the then-
operative version of the APA apply to proceedings concerning
whether there had been a discharge contrary to the requirements
of the Dickey Act.30 This requirement was removed when the
29 The leading authority on the APA makes a similar point in
his treatise on California Administrative Procedure. There,
Professor Michael Asimow writes: “The APA administrative
adjudication provisions do not apply to every state agency
‘decision’ . . . . Instead, by statute, those provisions apply only ‘to
a decision by an agency if, under the federal or state Constitution
or a federal or state statute, an evidentiary hearing for
determination of facts is required for formulation and issuance of
the decision.’ [Gov.C. §11410.10]” (Asimow et al., Cal. Practice
Guide: Administrative Law (The Rutter Group 2018) ¶ 4:110.)
30 That provision is former Water Code section 13061, which
required that proceedings to address discharges potentially
contrary to the Dickey Act “shall be conducted, as nearly as
practicable, in accordance with the provisions of Title 2,
Division 3, Part 1, Chapter 5 of the Government Code.” (Former
Wat. Code, § 13061 (Stats. 1949, ch. 1549, § 13061, p. 2788.)
That reference was to the chapter of the Government Code which
set out the version of the APA then in effect. (Stats. 1945, ch.
867, § 1, p. 1627, as amended by Stats. 1947, ch. 1425, § 1,
p. 2984.). Former Government Code section 11501, subdivision
(b) provided that “[t]he procedure of any agency shall be
conducted pursuant to the provision of this chapter only as to
those functions to which this chapter is made applicable by the
39
Porter-Cologne Act was adopted. (Compare Stats. 1949, ch. 1549
with Stats. 1969, ch. 482.) Had the Legislature intended to have
the APA apply to proceedings such as those now at issue, it had
the language at hand by which to continue that requirement; it
did not do so. (See Bertch v. Social Welfare Dept. (1955) 45 Cal.2d
524 [affirming limitation on application of the former APA as
stated in former Gov. Code, § 11501]; overruled on other grounds
in Frink v. Prod (1982) 31 Cal.3d 166, 180.)
B. Water Board regulations applicable but for
Barclay’s waiver
We now consider a separate provision of Chapter 3 of the
APA which also requires analysis in connection with Barclay’s
overarching contention that the Water Board violated Barclay’s
procedural rights by failing to apply the Bill of Rights.
Barclay contends specifically that the Bill of Rights is
applicable in this case because Government Code section
11410.40 provides that an agency “may adopt this chapter or any
of its provisions for the formulation and issuance of a decision,
even though the agency or decision is [otherwise] exempt from
application of this chapter.”31
statutes relating to the particular agency.” (Stats. 1945, ch. 867,
§ 1, p. 1627 [former Gov. Code, § 11501, subd. (b)].)
31 Government Code section 11410.40 provides in full:
“Notwithstanding any other provision of this article, by
regulation, ordinance, or other appropriate action, an agency may
adopt this chapter or any of its provisions for the formulation and
issuance of a decision, even though the agency or decision is
exempt from application of this chapter.”
40
Barclay points out in this regard that the State Board did
adopt a regulation making the Bill of Rights applicable to
proceedings before it, California Code of Regulations, title 23,
section 648, subdivision (b).32 This regulation provides: “(b)
Incorporation of Applicable Statutes. Except as otherwise
provided, all adjudicative proceedings before the State Board, the
Regional Boards, or hearing officers or panels appointed by any of
those Boards shall be governed by these regulations, chapter 4.5
of the [APA], sections 801-805 of the Evidence Code [addressing
expert and opinion testimony], and section 11513 of the
Government Code.”33
The article containing the Bill of Rights (art. 6) is within
the referenced chapter (Chapter 4.5 of Part 1 of Division 3 of
Title 2 of the Government Code).
32 We take judicial notice of this and the other regulations we
now discuss. (Evid. Code, §§ 452, subds. (b), (c), 459.)
33 California Code of Regulations, title 23, section 648,
subdivision (a) defines an “adjudicative proceeding” as “an
evidentiary hearing for determination of facts pursuant to which
the State Board or a Regional Board formulates and issues a
decision.”
There is an argument that proceedings involving the
issuance of a cease and desist order are not adjudicative within
the meaning of this section, but instead constitute administrative
investigations in which the agency offers both notice and an
opportunity to participate. In the text, we explain why, assuming
arguendo, the proceedings are adjudicative, Barclay was accorded
extensive rights to participate and only after an extended
opportunity to do so—of which it took full advantage—waived
any right it may have had to a “formal proceeding.”
41
While the regulation cited by Barclay so provides, there are
other regulations that must be considered in assessing whether
Barclay’s contention has merit.
Subdivision (c) of section 648, title 23 of the California Code
of Regulations, limits application of the provisions Barclay seeks
to apply. This subdivision provides in part: “Except as provided
in subdivision (b) of this section, chapter 5 of the [APA] does not
apply to hearings before the State Board or any of the Regional
Boards, or hearing officers or panels appointed by those Boards.”
Reading subdivisions (b) and (c) of section 648 of title 23 of
the California Code of Regulations together, the resulting rule
Government Code section 11513 sets out rules of
evidentiary procedure differing in several respects from those
applicable in court trials, providing, inter alia: (c) “[t]he hearing
need not be conducted according to technical rules relating to
evidence and witnesses, except as hereinafter provided. Any
relevant evidence shall be admitted if it is the sort of evidence on
which responsible persons are accustomed to rely in the conduct
of serious affairs, regardless of the existence of any common law
or statutory rule which might make improper the admission of
the evidence over objection in civil actions. [¶] (d) Hearsay
evidence may be used for the purpose of supplementing or
explaining other evidence but over timely objection shall not be
sufficient in itself to support a finding unless it would be
admissible over objection in civil actions. An objection is timely if
made before submission of the case or on reconsideration.”
This regulation established the authority of the Water
Board and of the trial court to take into evidence the declaration
of Barclay’s engineer, Bach, who supervised development at the
Site, even though his declaration was not made under penalty of
perjury. (Cf. Code Civ. Proc., § 2015.5.) Barclay’s contention that
consideration of this declaration was error is without merit based
on these authorities.
42
implementing the potential application of the APA according to
subdivision (c) is that no provision of the APA applies unless
subdivision (b) requires it: subdivision (b) explains that the APA
applies—except when another provision states that it does not
apply.
We find the rule operative in the present case in
subdivision (d) of the section 648 and in section 648.7 of title 23 of
the California Code of Regulations. The former authorizes the
agency officer presiding over a matter to “waive any
requirements in these regulations pertaining to the conduct of
adjudicative proceedings including but not limited to the
introduction of evidence, the order of proceeding, the examination
or cross-examination of witnesses, and the presentation of
argument, so long as those requirements are not mandated by
state or federal statute or by the state or federal constitutions.”
The latter provides that a party waives provisions
otherwise applicable if the request to have them apply is
untimely. Thus, California Code of Regulations, title 23, section
648.7 provides: “An objection by a party, either in writing or at
the hearing, to the decision to hold an informal hearing shall be
resolved by the presiding officer before going ahead under the
informal procedure. Failure to make a timely objection to the use
of informal hearing procedures before those procedures are used
will constitute consent to an informal hearing.” (Italics added.)
This requirement for timely assertion of any objection to
the hearing procedure utilized by the Water Board appears in a
statute as well. Government Code section 11445.30 includes a
requirement that any objection by a party to use of the informal
hearing procedure shall be made in the party’s pleading. (Id.,
subd. (b).) This mandate for timely raising this procedural point
43
is emphasized in the language of subdivision (c) of Government
Code section 11445.30, which states: If an objection is made to
use of the informal hearing procedure, it “shall be resolved by the
presiding officer before the hearing on the basis of the pleadings
and any written submissions.”34 (Id., subd. (c).)
There is no dispute among the parties in the present
matter that the proceedings before the Water Board were
conducted informally. At the same time, the record makes clear
that, beginning with the notice issued on October 31, 2013, the
proceedings were conducted by a series of written submissions.
And, these proceedings were extensive; Barclay made
multiple written responses to requests to it made by the Water
Board, and was given multiple opportunities to respond to
submissions made by Shell and to memoranda and to documents
prepared in draft by the Water Board. Barclay’s submissions
included declarations of lay and expert witnesses, all overseen
and explained in detail by its counsel. During this period,
Barclay asked for, and was granted, lengthy extensions of time in
which to prepare and present its own extensive arguments and
documentary submissions and to respond to submissions by Shell
and by Water Board SCP Staff. Barclay’s submissions totaled
over 11,000 pages.
34 Government Code section 11445.40 gives broad latitude to
the agency officer conducting the administrative proceeding. Its
subdivision (b) provides: “In an informal hearing the presiding
officer shall regulate the course of the proceeding. The presiding
officer shall permit the parties and may permit others to offer
written or oral comments on the issues. The presiding officer
may limit the use of witnesses, testimony, evidence, and
argument, and may limit or eliminate the use of pleadings,
intervention, discovery, prehearing conferences, and rebuttal.”
44
It was not until December 24, 2014, that Barclay first
asked for a formal hearing. In response, the Water Board
explained that the procedure which had been utilized for over a
year had allowed for orderly and extensive submissions by all
parties and for extensive explications of views by the parties—
and denied the request.35
Thus, pursuant to section 648.7 of title 23, California Code
of Regulations, by waiting over a year to make a request for a
formal hearing—during which it had fully participated in the
Water Board’s inquiry—Barclay waived the opportunity to
proceed more formally. In addition, we perceive no denial of fair
hearing procedures given the extensive and unfettered multiple
opportunities Barclay was given—and accepted—to express and
document its position through counsel and expert and lay
witnesses.
C. Relationship of APA fair hearing procedures
and Code of Civil Procedure section 1094.5
Barclay contends the APA and its Bill of Rights necessarily
apply in this case because the intent of the drafters of the APA
was to incorporate the terms of the APA into adjudication of
petitions for writs of mandate regarding regional water board
35 Barclay argues other regional water boards follow different
procedures and makes an argument based on memoranda of the
Chief Counsel of the Water Board. As the documents upon which
it bases these arguments are not part of the administrative
record admitted by the trial court with respect to its adjudication
of Barclay’s Amended Petition for Writ of Administrative
Mandamus, and were not promulgated in compliance with
Government Code section 11340.5, we do not consider them in
our analysis of Barclay’s contentions on appeal.
45
decisions in superior court pursuant to Code of Civil Procedure
section 1094.5. While Barclay correctly acknowledges that this
statute is the means by which actions of regional water boards
are reviewed in superior court, it errs in its claim that the APA is
engrafted into the Code of Civil Procedure statute by reference to
that provision in Water Code section 13330.36
In support of this contention Barclay cites the Law
Revision Commission comment to Government Code section
11410.10, which states, “[t]he coverage of [the APA] is the same
as coverage by the existing provision for administrative
mandamus under Code of Civil Procedure Section 1094.5(a).”
(Cal. Law Revision Com. com., Deering’s Ann. Gov. Code, supra,
foll. § 1410.10, p. 120.)
What Barclay does not acknowledge, and as we have
explained above, is that for Government Code section 11410.10 to
apply, another statute—in this case a provision of the Water
Code—must state that the APA is applicable. The Law Revision
Commission comment does not address this aspect of
Government Code section 11410.10, and nothing in the Law
Revision Commission comment suggests otherwise. Thus, the
comment does not provide support for Barclay’s claim.
Barclay does not err, however, in noting that there is a fair
hearing provision within the text of Code of Civil Procedure
section 1094.5 which must be considered. Code of Civil Procedure
36 Water Code section 13330, subdivision (b) provides: “A
party aggrieved by a final decision or order of a regional board
subject to review under Section 13320 may obtain review of the
decision or order of the regional board in the superior court by
filing in the court a petition for writ of mandate not later than 30
days from the date on which the state board denies review.”
46
1094.5, subdivision (b) provides in part: “The inquiry in such a
case shall extend to the questions whether the respondent has
proceeded without, or in excess of, jurisdiction; whether there was
a fair trial; and whether there was any prejudicial abuse of
discretion.” (Italics added.)
Relying on the italicized clause, Barclay contends, “[t]he
APA applies to any state agency proceedings reviewable under
Code of Civil Procedure section 1094.5, subdivision (a).” In
addition, it argues “the text of the APA itself makes clear that . . .
[if] section 1094.5 applies to the review of an agency decision,
then that decision is subject to the APA.” As with the claim just
discussed, Barclay supports this claim with citations to
Government Code section 11410.10 and to a California Law
Revision Commission comment to this Government Code section.
Barclay’s argument based on the cited Law Revision
Commission comment lacks persuasive force. The passage upon
which Barclay relies is an introductory sentence of a paragraph of
the Law Revision Commission’s comment on this section, which
reads in full: “The coverage of this chapter is the same as
coverage by the existing provision for administrative mandamus
under Code of Civil Procedure section 1094.5(a).” (Cal. Law
Revision Com. com., Deering’s Ann. Gov. Code, supra, foll.
§ 1410.10, p. 120.) That is not a statement that this Government
Code provision is engrafted into Code of Civil Procedure section
1094.5; an express statement of incorporation would be required
to accomplish this task. And, the remainder of the cited
paragraph describes when and how Code of Civil Procedure
section 1094.5 applies to review of actions by administrative
agencies generally and focuses on how that section had been
47
applied to review actions of state agencies prior to enactment of
the APA.
There is nothing in the language upon which Barclay relies
indicating that Government Code section 11410.10 is to be read
to ignore the clause in it that limits application of the APA as set
out in that section. For Barclay’s argument to have merit, section
11410.10 must contain language that the APA applies to actions
reviewed under Code of Civil Procedure section 1094.5. Yet,
neither the text of either statute nor the Law Revision
Commission comment supports Barclay’s argument. Thus,
Barclay’s contention that the Legislature engrafted the APA into
section 1094.5—without any statutory statement to that effect—
is mistaken.
Nor does the circumstance that Water Code section 13330,
subdivision (e) states that a court proceeding such as the present
one may be pursued by a petition under Code of Civil Procedure
section 1094.5 support Barclay’s argument. If the Legislature
had intended that the APA or its Bill of Rights apply in such a
proceeding notwithstanding the clear language of Government
Code section 11410.10, it would have so stated in the same
statute. The Legislature did not do so.37
37 We recognize the arguably anomalous circumstance that
review of final actions by regional water boards for which the
state water board has denied review is by means of a petition for
writ of mandate under Code of Civil Procedure section 1094.5,
which more typically is the appropriate means of review of final
administrative actions following proceedings in which “a hearing
is required to be given, evidence is required to be taken” (Code
Civ. Proc., § 1094.5, subd. (a)), notwithstanding that the Water
Code does not call for such a hearing in connection with issuance
of cleanup and abatement orders. That anomaly is a result of a
48
D. Constitutional due process claims
Barclay contends the APA and its Bill of Rights apply
based on the clause in Government Code section 11410.10 that
makes due process principles applicable “if, under the federal or
state Constitution . . . an evidentiary hearing for determination of
facts is required for formulation and issuance of the decision.”38
drafting choice made by the Legislature. (See Schutte, supra, 158
Cal.App.4th at pp. 1383-1387.)
There is a potential, albeit limited, incorporation of APA
provisions that can apply under certain circumstances. Title 23
of the California Code of Regulations section 648.7 vests in the
hearing officer “the discretion to determine whether a matter will
be heard pursuant to the informal hearing procedures set forth in
[the Bill of Rights].” And, title 23 of the California Code of
Regulations section 648.5, subdivision (b) incorporates the Bill of
Rights into procedures to be followed by the Water Board,
modifying when provisions of the Bill of Rights may apply.
However, as we have explained in the text, section 648.7 requires
that a party make a timely objection to use of less formal
procedures; the failure to do so constitutes a waiver of any right
to demand that the agency conduct its inquiry in a more formal
manner.
38 Barclay’s argument based on this prong of Government
Code section 11410.10 cites federal cases (with a single exception)
and analyzes the issue using the three-factor federal due process
test, involving inquiries into (a) the importance of the private
interest at issue, (b) the risk of erroneous deprivation of that
interest and the probable value of the additional safeguards
sought by the private party asserting it, and (c) the governmental
interest involved. (E.g., Mathews v. Eldridge (1976) 424 U.S.
319, 335.) Our state constitutional due process analysis utilizes a
four-factor test, adding the “dignitary interest in providing notice
and hearing” to the individual. There is also a difference in how
49
The Water Board and Shell raise a threshold issue, arguing
Barclay waived its due process claim by “fail[ing] to exhaust
available administrative remedies” below. Barclay responds to
these arguments in a footnote in its reply brief, arguing it did
raise its due process objection before the RCAO was issued, citing
its December 24, 2014 letter, which included its request for a
formal hearing before the Water Board at which it would
“directly address the question whether Barclay is a ‘discharger’
under the Water Code,” and in two later letters (those of
January 6 and 16, 2015), in which it also sought a formal
hearing.
There are three difficulties with Barclay’s reply counter-
arguments. First, the same regulations upon which it relies for
other contentions—title 23 of the California Code of Regulations,
sections 648 through 648.9—include the provision discussed
above requiring that a party seeking to invoke more formal
hearing requirements (to the extent the Water Board has adopted
them) must make that claim at the outset of the investigation, or
it is waived. (Cal. Code Regs., tit. 23, § 648.7 [“Failure to make a
timely objection to the use of informal hearing procedures before
those procedures are used will constitute consent to an informal
the tests are applied. (Saleeby v. State Bar (1985) 39 Cal.3d 547,
565.)
Because Barclay’s argument relies on the three-factor
federal test, we address its claim in that context. And, as Barclay
advances no argument that the state due process test would
produce a different result, we do not address whether the
outcome might be different if the four-factor state due process
analysis were used. (See Saleeby v. State Bar, supra, 39 Cal.3d
at p. 565 & Asimow et al., Cal. Practice Guide: Administrative
Law, supra, ¶¶ 3.181, 3.544.)
50
hearing.”]) Thus, the Water Board’s regulations gave notice of
how and when to make the claims Barclay now seeks to assert;
those regulations also indicate that Barclay’s request that its
claims be resolved by a procedure different than that in which it
had participated without objection for more than a year was
untimely.
Second, even if Barclay had not waived its argument, it
does not provide citations to the record that provide support for
its claim.39 Third, the cases upon which it relies do not support
its defense. Barclay’s reliance on Azusa Land Reclamation Co. v.
Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th
1165, 1211-1212, is inapposite as that case addresses a very
different procedural circumstance, whether a party must contest
an exemption determination under the California Environmental
Quality Act (Pub. Resources Code, § 21000 et seq.) prior to
seeking review of that determination in court when no
administrative remedy is provided. That court observed that the
exhaustion requirement applied when there was an opportunity
for “public comment” or there is a public hearing; however, a
party could not be required to exhaust when the agency had not
yet issued the ruling and the statute of limitations might expire if
the party did not file suit even though the ruling had not yet been
made. (Azusa Land, supra, 52 Cal.App.4th at pp. 1209-1211.) In
this case, there were extensive opportunities for comment of
which Barclay took full advantage.
39 The only citations to the record which Barclay provides are
to the December 24, 2014 letter and two January 2015 letters,
which as we discuss in the text, above, were untimely assertions
of its claim based on the regulation cited there.
51
The holding in the second case, Schutte, supra, 158
Cal.App.4th 1373, of relevance here, is that a party which
appealed to the State Water Quality Control Board from an
adverse determination by a regional water quality control board
and has been denied review by the state board, need not return to
the regional water board but must file its petition for writ of
mandate within the time required by Water Code section 13330,
subdivision (b). It is in the context of compliance with the filing
deadline of this statute that the court in Schutte addresses the
issue of exhaustion. Nothing in Schutte addresses the scope of
issues that must first be presented to a regional water board to
meet the “jurisdictional prerequisite” of exhaustion of
administrative remedies. (See Schutte, at p. 1385, quoting Tahoe
Vista Concerned Citizens v. County of Placer (2000) 81
Cal.App.4th 577, 589.)
Even if Barclay had not waived this issue, we would find
Barclay’s contention lacking in merit for the following reasons.
Barclay bases its due process claim on Mathews, supra, 424
U.S. 319, 335, Leslie’s Pool Mart, Inc. v. Department of Food &
Agriculture (1990) 223 Cal.App.3d 1524 (Leslie’s), and Lassiter v.
Department of Social Services (1981) 452 U.S. 18.
As the Water Board argues, Mathews calls for a more
nuanced approach than that which Barclay advocates. Thus, in
the course of its opinion, the Mathews court points out that what
is needed to comport with federal due process principles is “some
form of hearing . . . before an individual is finally deprived of a
property interest.” (Mathews, supra, 424 U.S. at p. 333.) The
Mathews court then listed a series of cases in which the
principles of due process were vindicated, some by an evidentiary
hearing prior to deprivation of a property interest, and others in
52
which due process was achieved by a hearing after the action was
taken, e.g., when the sanction of termination of employment had
been effected. (Id. at pp. 333-334.)
“These decisions underscore the truism that ‘ “[d]ue
process,” unlike some legal rules, is not a technical conception
with a fixed content unrelated to time, place and circumstances.’
Cafeteria Workers v. McElroy, 367 U.S. 886, 895 (1961). ‘[D]ue
process is flexible and calls for such procedural protections as the
particular situation demands.’ Morrissey v. Brewer, 408 U.S. 471,
481 (1972). Accordingly, resolution of the issue whether the
administrative procedures provided here are constitutionally
sufficient requires analysis of the governmental and private
interests that are affected. Arnett v. Kennedy, [416 U.S. 134,]
167-168 [1974] (Powell, J., concurring in part); Goldberg v. Kelly,
[397 U.S. 254,] 263-266 [1970]; Cafeteria Workers v. McElroy,
supra, at 895. More precisely, our prior decisions indicate that
identification of the specific dictates of due process generally
requires consideration of three distinct factors: First, the private
interest that will be affected by the official action; second, the
risk of an erroneous deprivation of such interest through the
procedures used, and the probable value, if any, of additional or
substitute procedural safeguards; and finally, the Government’s
interest, including the function involved and the fiscal and
administrative burdens that the additional or substitute
procedural requirement would entail. See, e. g., Goldberg v.
Kelly, supra, at 263-271.” (Mathews, supra, 424 U.S. at pp. 334-
335.)
In addressing the three factors identified in Mathews,
Barclay argues with respect to the first, its private interest, that
it has a profound private interest in having a formal hearing
53
before it is added as a responsible party to the RCAO because
that action results in it being jointly and severally liable for
remediation costs at the Site, which are estimated to be $146
million. Addressing the second factor, the risk of an erroneous
deprivation of that private interest, Barclay argues there is a
“dense and disputed factual record spanning tens of thousands of
pages, concerning conduct that occurred more than fifty years
ago.” Third, the government’s interest is minor as there is no
need for an early resolution of the matter because “Shell is
already cleaning up the site, and the only question is whether
Barclay will defray Shell’s costs.” Barclay also points out there is
no harm in any delay based on “the fact that it took four years for
Barclay to be added to the Order.”
We are not persuaded by Barclay’s arguments. As the
Water Board argues, also relying on Mathews, Barclay’s right to
due process was met through the several opportunities which the
Water Board provided to Barclay to address the entire range of
issues presented in the proceeding before it. This is amply
demonstrated by Barclay providing thousands of pages
addressing the issues, including multiple lengthy letters from its
lawyers explaining Barclay’s views on the issues presented,
together with several expert witness and lay witness
declarations, and doing so as part of an iterative process in which
there were extensive analyses of the issues as they developed
over the multi-year course of the Water Board’s investigation of
the Site and the preparation and revision of the RCAO. As the
Water Board argues, these opportunities allowed Barclay to fully
express its views as to the impact of its being added as a
responsible party to the RCAO and to fully address Barclay’s
“private interest.”
54
With respect to Barclay’s claim that there is a “dense and
disputed factual record,” the scientific evidence in the record
conclusively establishes there is an extensive and continuing risk
of harm—magnified in substantial part by Barclay’s activities at
the Site—to the people who live at the Site, which was graded by
Barclay’s designee to create the lots sold by Barclay to the
public.40 In this case, no additional procedural safeguard is
required: Barclay was given several extended opportunities to
address the issues and had the right to obtain this appellate
review of the Water Board’s determination—a postadministrative
agency action review which meets the constitutional standard
articulated in Mathews.
The third Mathews factor, the governmental interest, is
substantial. Among the functions of the Water Board is the
protection and improvement of the quality of the “ ‘[w]aters of the
40 Barclay’s argument that there is scientific evidence
contrary to other such evidence, which the Water Board found to
be determinative, is not sufficient to overcome the Water Board’s
findings which were affirmed by the trial court in its order and
judgment. The question on appeal is “whether the evidence
reveals substantial support, contradicted or uncontradicted,” in
favor of the trial court’s determination. (Yakov v. Board of
Medical Examiners (1968) 68 Cal.2d 67, 72.) The answer to that
question in this case is that the evidence does establish
substantial support for the factual determinations below.
Equally established is that, with knowledge of the presence
of petroleum residue and waste in various forms, Barclay
removed only a small portion of that material from the Site,
burying most of it beneath the building pads it graded and
created utilizing a mixture of petroleum residue and waste from
the berms and beneath the concrete bottoms of the three
reservoirs together with soil brought to the Site from elsewhere.
55
state’ ” consistent with the state goal of providing “a decent home
and suitable living environment for every Californian.” (Wat.
Code, §§ 13050, subd. (e), 13142, subd. (c).) It is evident in this
case that the RCAO was issued to further this objective.
Barclay’s argument that there is no hurry because the process of
identifying those responsible has taken four years fails to
acknowledge that the delay was in significant part the result of
Barclay’s own multiple requests for extensions of time so that it
could present its views and materials to support them—at a pace
Barclay found appropriate.
We do not agree with Barclay that the circumstance that
Shell is already cleaning the Site should be a consideration in
whether Barclay should have obtained a formal hearing prior to
issuance of the RCAO. In addition to Barclay’s failure to raise
this as an issue below, we agree with the Water Board that this is
not an issue that should be addressed as part of analysis of which
parties may bear responsibility for cleanup and abatement.
The parties dispute the application of Machado v. State
Water Resources Control Bd. (2001) 90 Cal.App.4th 720
(Machado), to the present case. There, the Third District Court
of Appeal addressed whether the due process rights of the
appellants in that case (a dairy) were violated by the issuance of
a cleanup and abatement order prior to a hearing. Relying in
large part on the principles articulated in Mathews, the Machado
court held that due process principles were satisfied when the
hearing is provided following issuance of a cleanup and
abatement order. (Machado, supra, 90 Cal.App.4th at pp. 725-
726.) In reaching this conclusion, the Machado court analyzed
the three Mathews factors and concluded the dairy had been
afforded due process, reasoning that because the cleanup and
56
abatement order there did not impose criminal or civil penalties
there was no substantial deprivation of the private interest of the
dairy. (Machado, supra, 90 Cal.App.4th at p. 726.)
With respect to the issue of timing of the availability of a
fair hearing on the Water Board’s action, the Machado court
specifically found the dairy’s right to due process was met by its
right to seek review of the cleanup order before the state board
and in its right to challenge the regional water board’s order
through a petition for writ of mandate. (Machado, supra, 90
Cal.App.4th at p. 726.) In support of this determination, the
court relied on Mathews: “As the United States Supreme Court
noted, ‘The Due Process Clause simply does not mandate that all
governmental decisionmaking comply with standards that assure
perfect, error-free determinations. [Citation.] . . . [Citation.]
[W]hen prompt postdeprivation review is available for correction
of administrative error, we have generally required no more than
that the predeprivation procedures used be designed to provide a
reasonably reliable basis for concluding that the facts justifying
the official action are as a responsible governmental official
warrants them to be.’ (Mackey v. Montrym (1979) 443 U.S. 1, 13
(Mackey).) Moreover, in assessing what process is due, a
reviewing court must give substantial deference to the good faith
judgment of the agency that its procedures afford fair
consideration of a party’s claims. (Mohilef v. Janovici (1996) 51
Cal.App.4th 267, 289; Mathews, supra, 424 U.S. at p. 349.)”
(Machado, supra, 90 Cal.App.4th at p. 726.)
Addressing the third Mathews factor, the Machado court
explained the need for issuance of the cleanup order with
reference to the reasons for a governmental water quality control
program: “That brings us to the third factor in Mathews, the
57
governmental interest involved. The statewide program for
water quality control is designed to ensure the health, safety and
welfare of all Californians. (§ 13000.) Cleanup and abatement
orders serve an important function in meeting this goal.”
(Machado, supra, 90 Cal.App.4th at p. 727, citing Wat. Code,
§ 13304, subd. (a).)
We appreciate that there is a difference between the facts
in Machado and those in the present case; there, the dairy “was
discharging manure and wastewater into a ditch that flowed into
a drainage system and then into the Sacramento-San Joaquin
Delta.” (Machado, supra, 90 Cal.App.4th at p. 723.) That the
hazardous substances in the present case are buried is not a
significant enough distinction to overcome the health hazards
which the facts conclusively establish. Indeed, the Porter-
Cologne Act defines the key term “waters of the state” as “any
surface water or groundwater . . . . (Wat. Code, § 13050, subd.
(e), italics added.) Thus, the governmental interest in protecting
both the persons living at the Site and the aquifers beneath it are
appropriately given great weight whether the water flows on, or
under, the surface.41
In our weighing of the three Mathews factors, we conclude
that Barclay was accorded appropriate due process by pursuing
its claims before the State Board, in the trial court, and now on
41 The Porter-Cologne Act definition is identical in relevant
respects to that in the Dickey Act, which defined the term
“waters of the state” as “any waters, surface or underground.”
(Former Wat. Code, § 13005.) We perceive no legal difference
between the terms “groundwater” and “waters . . . underground”
as these terms are used in the Porter-Cologne Act and in the
Dickey Act, respectively.
58
appeal. As the United States Supreme Court held in Mathews,
the specific form which due process takes is flexible and may vary
with the nature of the issue presented; a full evidentiary hearing
is not always required prior to an agency issuing an order which
is subject to post-issuance review, as in the present case. (See
Matthews, supra, 424 U.S. at p. 334.)
Barclay’s reliance on Leslie’s, supra, 223 Cal.App.3d 1524, a
case predating Machado, is unpersuasive. There, the agency
seized a product from the plaintiff’s retail stores without notice
because it was being sold without Leslie’s first having obtained
the registration required by the Economic Poisons Act (Food &
Agr. Code, § 12751 et seq.; Leslie’s, at pp. 1528-1529.) The court
expressly limited its holding, writing that there was no evidence
the product was a threat to the environment or to the health of
the public or that the product could not obtain registration when
applied for. The Leslie’s court also noted the Economic Poisons
Act does not provide for a postseizure review. (Leslie’s, at
p. 1536.)
Barclay’s circumstances are materially different from those
in Leslie’s. Here, no property was seized; no registerable
merchandise on store shelves ready for sale was confiscated.
Unlike the action without notice that characterizes the facts in
Leslie’s, in this case, the allocation of shared responsibility for the
cleanup of a hazardous substance came only after an extended
period of time and much discussion and analysis—the Water
Board having given multiple notices to Barclay and having
allowed it multiple opportunities to be heard on the merits before
the RCAO was issued—with the additional availability of court
review of the Water Board’s determination. And, rather than the
containers on the store shelves in Leslie’s, which literally
59
contained the potentially hazardous substance, in the present
case, there is substantial evidence that hazardous substances are
already in, and continue to leach into, the water supply—with the
potential to endanger human health.
V. Relationship between Water Board Executive
Officer and Chief Deputy Executive Officer and
combination of functions within the Water Board
Interspersed in Barclay’s opening brief are arguments that
its due process rights were violated because (a) Executive Officer
Unger was both the “prosecutor” and supervisor of Chief Deputy
Executive Officer Smith who supervised the inquiry into issues
resulting in the issuance of the RCAO and (b) there was an
improper combination of functions within a single agency.42
The improper delegation prong of this argument is based on
memoranda which the trial court did not admit into evidence in
connection with Barclay’s petition43 and thus are not properly
42 Barclay articulates its arguments by assigning the labels
“adjudicator” and “prosecutor” to Water Board personnel, citing
Government Code section 11425.30 and a Water Board
memorandum as sources for these labels. The term “prosecutor”
does appear in the cited Government Code section, but the term
“adjudicator” does not. Use of these terms does not advance
Barclay’s underlying claims, which we find to be without merit
for reasons discussed in the body of our opinion.
43 In response to a letter we sent the parties, Barclay
confirmed that the memoranda upon which it relies for this
argument were not admitted into evidence by the trial court in
connection with its petition for writ of mandate although they
had been admitted earlier in connection with the Water Board’s
demurrer and motion to strike. We do not grant the request that
60
considered as part of the record before us; we may reject this
contention for want of a proper record. (Citizens Opposing a
Dangerous Environment v. County of Kern (2014) 228
Cal.App.4th 360, 366, fn. 8; Lona v. Citibank, N.A (2011) 202
Cal.App.4th 89, 102; Princess Cruise Lines, Ltd. v. Superior Court
(2009) 179 Cal.App.4th 36, 45.)
Even were those materials in the record, Barclay’s
argument ignores that Water Code section 7 expressly authorized
the delegation of authority to conduct proceedings by the
executive officer to a deputy executive officer. That section
provides: “Whenever a power is granted to, or a duty is imposed
upon, a public officer, the power may be exercised or the duty
may be performed by a deputy of the officer or by a person
authorized, pursuant to law, by the officer, unless this code
expressly provides otherwise.” No relevant provision of the
Water Code restricts this authority.
Barclay’s argument that there was an improper
combination of investigative, prosecutorial and adjudicatory
functions within the Water Board ignores that combinations of
such functions are characteristic of administrative agencies. Our
Supreme Court, and the United States Supreme Court, have each
repeatedly held that such combinations of functions do not violate
the due process rights of those under scrutiny by such “unitary
agencies.” For example, in Morongo Band of Mission Indians v.
State Water Resources Control Bd. (2009) 45 Cal.4th 731, our
Supreme Court explained: “By itself, the combination of
investigative, prosecutorial, and adjudicatory functions within a
we take judicial notice of these memoranda for the first time on
appeal, as we explained in section III, above.
61
single administrative agency does not create an unacceptable risk
of bias and thus does not violate the due process rights of
individuals who are subjected to agency prosecutions. (Withrow
v. Larkin [1975] 421 U.S. 35, 54; see Adams v. Commission on
Judicial Performance (1995) 10 Cal.4th 866, 880-884; Kloepfer v.
Commission on Judicial Performance (1989) 49 Cal.3d 826, 833-
835; Pierce, Administrative Law Treatise (4th ed. 2002) § 9.9, pp.
688-689.) Thus, ‘[p]rocedural fairness does not mandate the
dissolution of unitary agencies, but it does require some internal
separation between advocates and decision makers to preserve
neutrality.’ ([ABC, supra,] 40 Cal.4th [at p.] 10.)” (Id. at p. 737.)
Also, Barclay’s claims of an improper combination of functions
within the Water Board lack factual support in the record.
VI. The conflict of interest argument based on Shell’s
payment to the State Water Control Fund
Barclay contends the RCAO must be overturned due to “a
clear conflict of interest” based on the circumstance that Shell
paid the State Water Board more than $52,000 “for the
approximately 430 hours spent by the [Water Board] to
investigate and name Barclay to the Order.” Barclay further
argues it “is irrelevant that Shell’s payments went into the State
Board’s coffers rather than the pockets of individual staff
members.” Citing People v. Eubanks (2017) 14 Cal.4th 580,
Barclay argues there is a reasonable possibility that Shell’s
payments influenced the decision to add Barclay to the RCAO.
And, while acknowledging the existence of Water Code section
13304, Barclay asserts there is no justification for the payments.
We do not agree.
First, the Water Code authorized the creation of, and
payments to, the State Water Pollution Cleanup Fund and the
62
State Water Pollution Cleanup and Abatement Account of that
fund so that the state will be able to recover its reasonable
expenses incurred in overseeing investigations into, and cleanup
and abatement of, unpermitted discharges which adversely affect
the state’s waters. There are statutory restrictions on charges to
entities determined to be required to clean up and abate
contaminated sites and on deposit of amounts assessed into these
accounts, as well as statutory control on the purposes for which
funds may be withdrawn from the accounts. (See, e.g., Wat.
Code, § 13440 [creating the State Water Quality Control Fund
and the State Water Pollution Cleanup and Abatement Account];
Wat. Code, § 13304, subd. (c) [authorizing assessment of the
reasonable costs incurred by a regional water board in connection
with cleanup and abatement orders]; Wat. Code, § 13365
[authorizing, inter alia, the method for establishing rates and
amounts to be billed to parties subject to water board cleanup
orders and the mechanism for billing]; & Wat. Code, § 13441
[establishing parameters for payments to and withdrawals from
the State Water Quality Control Fund and the State Water
Pollution Cleanup and Abatement Account].)
The cited statutes, and others, carefully limit both the
charges allowable and the disposition of amounts collected. The
statutory plan expressly allows billing dischargers for a regional
water board’s costs incurred in connection with enforcing its
orders; the charges are carefully limited by the statutes and there
is no direct relationship between the amounts charged and
collected and whether another party should be added as a
responsible party. At the same time, costs which the regional
water boards are authorized by statute to recover include those
incurred in conducting and overseeing investigations, analysis,
63
planning, implementation, remedial work and supervising
cleanup and abatement activities. (Wat. Code, §§ 13304, 13365,
13267.)
Second, the charges upon which Barclay relies for its
“evidence” of improper payments were incurred in part to
determine if a second party should be added as a responsible
party. That purpose is entirely appropriate and statutorily
sanctioned as it carries out a legitimate state function of
assigning responsibility for cleanup and abatement to all of the
parties responsible for the contamination.44
Third, Barclay’s assertion that, “. . . [Shell] has
underwritten a years-long effort to pin responsibility for its own
oil discharges on an unsuspecting residential real estate
developer by paying for [specified] time [of the Water Board
staff]” lacks factual support. Our review of the invoices upon
which Barclay bases this argument do not support it. For
example, the fact that Water Board staffer Tintut-Williams
recorded on his time sheet that he attended a meeting at which
the revised CAO was discussed does not support the assertion in
Barclay’s opening brief that “Prosecution Team [Barclay’s team]
members [met] at Shell’s request to be lobbied by Shell to reopen
the comment period on whether to name Barclay.” Nor does the
fact that the same Water Board staffer “ ‘Finalized and mailed
44 As noted earlier in this opinion, the Water Board has
requested that we take judicial notice of three documents which
confirm the duties the Water Board performed in connection with
its order for cleanup and abatement at this Site. As there was no
opposition to this request, we grant it. We would reach the
conclusion stated in the text were these documents not in the
record.
64
out the Notice of Opportunity for additional Public Comment Re:
Revised CAO for Dole’ ” indicate any improper contact by Shell.
Other time entries during the same month (May 2014)
include this Water Board staff member’s attendance at Carson
City Council meetings and participation in an interagency
conference call concerning the Site. These entries do not support
Barclay’s claim.
Barclay’s specific assertion that Shell paid more than
$52,000 for 430 hours spent by Water Board staff “to investigate
and name Barclay to the Order” is not supported by the record.
The source of this amount is a declaration (and exhibit attached
to it) by Barclay’s counsel in which he has “estimated that Shell
paid $52,501.33 to reimburse the Board” based on information he
“extracted” from various reports. There is no explanation of the
criteria he used to make the table he attaches to his declaration,
or for the total he hypothecates. The invoices contained at the
location in the Administrative Record which Barclay’s counsel
cites indicate that payments were deposited in the State Water
Resources Control Board SCP Program in Sacramento.45 Nor
45 The authorization for assessing charges to Shell and the
requirement that those amounts be paid into a specific state fund
controlled by the State Water Board rather than the regional
water board, to be disbursed only for specific purposes, is derived
from Water Code sections 13304, 13365, 13440-13443.
Shell was notified of its obligation to make payments to this
statewide fund by letter. This fact is established by a letter of
May 8, 2008, of which we take judicial notice pursuant to the
unopposed request that we do so, filed by the Water Board on
September 10, 2018. (The document is exhibit 1 to that request.)
(Evid. Code, § 452, subd. (c) [official act of state agency]). As
required by law, the Water Board sent letters in subsequent
65
does Barclay’s citation to the Water Board staff’s analysis of
Barclay’s extensive comment letter of January 21, 2014, lead to a
legitimate inference that Shell had any influence on how the staff
analyzed issues raised in Barclay’s letter. On its face, the staff
analysis (which extends for 97 pages) discusses both Barclay’s
and the Water Board staff’s views on literally hundreds of
issues—comments that appear on their face to be analytical
rather than partisan.
Barclay also does not indicate how money deposited in the
State Water Pollution Cleanup and Abatement Account of the
State Water Pollution Cleanup Fund is allocated by the State
Board among the nine regional boards, nor does Barclay provide
any evidence of any “quid pro quo” connection to link amounts
billed to and paid by Shell to this state fund to the Water Board’s
determination that Barclay also has responsibility for cleaning up
and abating the pollution at the Site. Use of the monies
deposited into that fund is restricted under additional provisions
of sections 13442, 13442.5 and 13443 of the Water Code. Thus,
there is no evidence to support any direct or indirect link between
the Los Angeles Regional Water Board’s activities in carrying out
its responsibilities and Shell’s statutorily mandated payments to
this fund.
Barclay’s argument would be flawed legally even if there
were facts to support it.46 The rule against pecuniary bias
years with estimates of amounts the Water Board expected to bill
Shell. These documents are exhibits 2 and 3 to the same
unopposed request. We grant the request for judicial notice of
these records of this public agency on the same basis.
46 Our review of this issue is based on a different legal
standard. Instead of balancing the interests of the parties, as we
66
prohibits a decision maker from having a direct, personal and
substantial pecuniary interest in making a determination
adverse to a party. Our Supreme Court considered the issue of
pecuniary bias on the part of an “adjudicator” in Fresh Start,
supra, 57 Cal.4th 197. There, the claim was that the defendant
agency had a financial incentive to favor schools under its control
over those operated by the plaintiff, the operator of charter
schools, and that this financial interest led the defendant to
revoke the charter of the plaintiff to operate those charter
schools.
Observing there were precedents which recognized that due
process might be violated under circumstances in which
individual members of an administrative board could benefit
from the board’s rulings, our Supreme Court noted that the party
challenging an action by an administrative board must identify
the personal interest of the agency member that might impair the
ability of the individual member(s) of that board to act. In
absence of identification of such a personal interest, the claim of
bias based on pecuniary interest would fail. (Fresh Start, supra,
57 Cal.4th at pp. 216-217; accord, Burrell v. City of Los Angeles
(1989) 209 Cal.App.3d 568, 582 [“[A] party seeking to show bias
or prejudice on the part of an administrative decisionmaker
do when we review claims raising issues of due process (e.g.,
under Matthews, supra, 424 U.S. 319), “[t]he rule against
financial interests stops short of zero tolerance; the United States
Supreme Court has recognized that slight pecuniary interests are
not constitutionally cognizable. (Aetna Life Insurance Co. v.
Lavoie [1986] 475 U.S. [813,] 825-826, fn. 3.)” (Today’s Fresh
Start, Inc. v. Los Angeles County Office of Education (2013) 57
Cal.4th 197, 216, fn. 8 (Fresh Start).)
67
[must] prove the same with concrete facts: ‘ “Bias and prejudice
are never implied and must be established by clear
averments.” ’ ”].)
As our Supreme Court held in Fresh Start, to prevail on its
due process claim predicated on alleged bias, Barclay must
establish an “ ‘exceptional case presenting extreme facts.’ ”
(Fresh Start, supra, 57 Cal.4th at p. 219.)
The Water Board points out that there is no evidence that
Chief Deputy Executive Officer Smith, the Water Board official
who made the final determination to add Barclay as a discharger
and responsible party to the RCAO, stood to receive any personal
financial benefit from that decision. Nor is there any evidence
Shell was charged for the time Smith took to decide to issue the
RCAO or even that the Water Board had any control over funds
which Shell paid to the State Board. Nor is there any evidence
the Water Board’s budget depended in any way on payments
Shell made to the State Board.
Barclay’s reliance on People v Eubanks (1996) 14 Cal.4th
580, a case addressing whether a conflict of interest requiring
disqualification under Penal Code section 142447 was created by
a contribution to a district attorney’s office from a crime victim to
help cover investigative costs in the matter which the district
attorney was investigating, is simply inapposite. For example,
47 Penal Code section 1424 establishes a procedure for making
and determining motions to disqualify a district attorney from
“performing an authorized duty.” Granting a motion to disqualify
under this statute requires the trial court to make a finding that
“the evidence shows that a conflict of interest exists that would
render it unlikely that the defendant would receive a fair trial.”
(Id., subd. (a)(1).)
68
Shell is not a crime victim and the amounts it paid are not
contributions to the Water Board, but statutorily mandated
payments to a fund administered by a different (albeit related)
agency.
“Bias and prejudice are not implied and must be clearly
established. A party's unilateral perception of bias cannot alone
serve as a basis for disqualification. Prejudice must be shown
against a particular party and it must be significant enough to
impair the adjudicator’s impartiality. The challenge to the
fairness of the adjudicator must set forth concrete facts
demonstrating bias or prejudice.” (Gray v. City of Gustine (1990)
224 Cal.App.3d 621, 632.)
“ ‘[A]dvance knowledge of adjudicative facts that are in
dispute . . . does not disqualify the members of an adjudicatory
body from adjudicating a dispute . . . . [T]here must be . . . a
commitment to a result (albeit, perhaps, even a tentative
commitment), before the process will be found violative of due
process.’ (BreakZone Billiards v. City of Torrance [(2000)] 81
Cal.App.4th [1205,] 1236.)” (State Water Resources Control Bd.
Cases (2006) 136 Cal.App.4th 674, 841.)
There is no such evidence in the present case.
VII. Barclay’s safe harbor and substantive claims
Barclay makes two closely related claims concerning the
substance of the Water Board’s findings and order and the trial
court’s affirmance of the Water Board’s actions: its actions at the
Site are protected by the safe harbor of Water Code section
13304, subdivision (j) (subdivision (j); and it did not engage in
affirmative acts with knowledge of the hazards involved.
With respect to the latter, Barclay argues there is
“undisputed evidence that no one in the environmental, public
69
health, or legal community considered oil to be a hazardous or
toxic substance in the 1960s,” citing the declaration of its expert
witness, Marcia Williams (Williams); Barclay also argues it “took
no affirmative steps directed toward the discharge,” and asserts
there was “no evidence that Barclay knowingly moved or
impacted any waste.”
These claims present both factual and legal issues for
analysis; issues we review applying the standards of review
discussed above.
A. The factual claims
We are confronted at the outset of our consideration of
Barclay’s factual claims with the absence from Barclay’s opening
brief of a fair statement of the facts in the record. Among the
omissions are the following: Barclay does not include in its
opening brief facts, documented in correspondence between it and
Shell, that Barclay visited the Site on October 21, 1965, at which
time it necessarily observed what could be seen at the Site.
During that visit it asked for specific information regarding the
reservoirs, the approximate contents of each and other details
about the Site; Shell provided this information to Barclay four
days later.
These facts establish that Barclay was aware in the fall of
1965 of the presence of “liquid waste and petroleum residues” at
the Site, based on its own inspection of the Site and the details
contained in Shell’s October 25, 1965 letter to it. Barclay
confirmed its knowledge of the presence of petroleum waste at
the Site in its December 1, 1965 letter to Shell seeking
permission to begin work on the Site.
Barclay also does not acknowledge facts in the record that
are contrary to its presentation in the factual section of its
70
opening brief of the extent to which the petroleum residue and
other waste were removed from—and remained and were buried
at—the Site. And it has omitted from its appellant’s statement of
facts in its opening brief a fair summary of the communications
to it from PSE, the engineering firm which Barclay had hired to
advise it concerning development of the Site, including writings
informing Barclay of the methods that would be used to both
remove and bury concrete structures and soil containing
petroleum residue and waste.48
As an appellant challenging the sufficiency of the evidence
to support the judgment, it was Barclay’s obligation to cite the
evidence in the record supporting the judgment and, after doing
so, explain why in the appellant’s view such evidence is
insufficient as a matter of law to support the findings made.
Unless it does so, such a contention is deemed to have been
waived. (State Water Resources Control Bd. Cases, supra, 136
Cal.App.4th at p. 749; In re Marriage of Fink (1979) 25 Cal.3d
877, 887; Bell v. H.F. Cox, Inc. (2012) 209 Cal.App.4th 62, 80.)
This rule rests on the premise that if an appellant fails to present
the appellate court with all the relevant evidence, the appellant
cannot carry its burden of demonstrating the evidence was
insufficient to support the agency’s decision because support for
that decision may be present in the evidence which appellant
omits. (State Water Resources Control Bd. Cases, at p. 750.)
48 Barclay includes in the “Factual Background” section of its
opening brief the statement: “It is undisputed that Shell did not
disclose to Barclay, and Barclay did not know, that Shell’s
reservoirs had leaked.” The statement suggests a lack of
knowledge by Barclay of the actual conditions at the Site, which
is not consistent with the documentary record.
71
The examples mentioned above illustrate Barclay’s failure
to meet this appellant’s obligation.
Setting aside this fundamental defect (which is sufficient to
deny Barclay’s factual contentions), we address Barclay’s
contention that the trial court erred in rejecting Barclay’s claims
that it “had no knowledge of any hazards” that might result from
burying the concrete structures; that it “took no active,
affirmative steps directed toward the discharge,” and that there
was “no evidence that Barclay knowingly moved or impacted [sic]
any waste.”
Barclay relies for support for its factual claims on
testimony of four “surviving eyewitnesses,” among others.49
49 Barclay also relies on testimony of three expert witnesses
retained by it, Jeffrey Dagdigian, Williams and Donald
Shepardson. Dagdigian, a nonpercipient expert witness, provided
a report (over 180 pages in length) in which he opined as to
Barclay’s “explicit knowledge” and as to what petroleum residue
was removed from the Site and what remained. Among his
findings were the following: “Barclay did not observe, grade or
spread contaminated soil”; there was “no evidence that berm soils
were impacted with petroleum hydrocarbons when Barclay used
berm soil to fill the reservoirs”; and the hydrocarbon pollution on
Site was the result of “upward migration” rather than due to any
activities of Barclay.
The Water Board considered and rightly rejected these
opinions and conclusions as there is substantial evidence, as
indicated in the text earlier in this opinion, that supports both
the Water Board’s discounting of these opinions and its contrary
factual findings, as well as the trial court’s determination to rely
instead, inter alia, on the firsthand account of Bach, who was on
the Site during grading and Site preparation, instead of a person
who was not a percipient witness and who failed to acknowledge
the substantial contrary evidence in the record.
72
However, there is contrary evidence, which is substantial. This
evidence, presented in greater detail earlier in this opinion,
includes that the soil in several areas of the Site was oily, that in
some locations one could smell the petroleum residue, as well as
testimony from Bach, an engineer Barclay had retained and who
was closely involved with work at the Site, regarding breaking up
and burying the concrete floors of the reservoirs (that had
literally contained petroleum and its residue for more than 40
years), as well as evidence that only some of the material
containing petroleum residue and waste had been removed from
the Site, and that much of the soil at the Site which did contain
petroleum residue and waste was mixed with soil from outside
the Site and then graded to make the housing pads in the new
Williams indicates in her declaration that she first worked
for the United States Environmental Protection Agency in 1970
as one of its “charter employees.” There is nothing in her
declaration to indicate she had any firsthand knowledge of
environmental issues prior to that year; nevertheless, she opines
on the state of the law in California and on attitudes toward
petroleum discharges in the 1960s. Many of her opinions are
legal in nature; such opinions are the province of the trial court,
which in this case clearly disagreed with the legal opinions which
Williams offered, as evidenced by the absence of any reference to
Williams’s opinions in the trial court’s order.
Shepardson provided his opinion on whether PSE’s grading
of the Site was “compliant with the Standard of Practice and
Standard of Care” at the time. While Shepardson may be
qualified to render such an opinion, his opinion is not relevant to
the issues presented in this case; no one appears to dispute that
the civil engineering aspects of developing the Site—e.g., grading
and soil compaction—were properly done.
73
Carousel housing development.50 Further, test borings were
made confirming that petroleum waste was buried at various
depths at multiple locations on the Site. The Water Board also
considered, and rejected, the opinion of Barclay’s expert who had
opined that the petroleum residue and waste were the result of
upward migration.
The RCAO discusses the factual bases for the Water
Board’s determination that Barclay discharged waste as defined
in Water Code section 13050, subdivision (d) and that it is a
responsible party. The Water Board’s findings in the RCAO
include that Barclay “purchased the Site with explicit knowledge
of the presence of petroleum reservoirs and the presence of
residual petroleum hydrocarbons, and conducted various
activities, including partially dismantling the concrete in the
reservoirs and grading the onsite materials,” and that these
50 Barclay’s claim that all of the petroleum residue had been
cleaned from the concrete before it was broken up is contrary to
other evidence, which the Water Board found to be accurate (and
the trial court affirmed) that at least with respect to the floor of
one of the reservoirs, there was petroleum residue remaining
which was mixed with soil and buried—after thousands of gallons
of water were used to wash it, with the water percolating into the
ground beneath.
Barclay’s objection to the trial court’s reliance on Bach’s
unsworn statement ignores that the rules of evidence are relaxed
in administrative proceedings and that the Water Board applies
California Code of Regulations, title 23, section 648.5.1, which
expressly makes hearsay evidence admissible in accordance with
Government Code section 11513. The trial court made an
express determination of the reliability of the contents of the
unsworn statement that Bach had given, which we find to be
persuasive.
74
activities “spread the waste at the Site, and contributed to the
migration of the waste through the soil and groundwater.”
In considering Barclay’s challenges to the decision below,
we have independently reviewed the record and determine that
Barclay’s factual contentions are without merit as there is
substantial evidence to support the findings of its affirmative acts
in spreading and burying the petroleum residue and waste, and
thus to support the judgment below. (See Yakov, supra, 3 Cal.3d
at p. 429 [the question on appeal is whether there is substantial
evidence—contradicted or not—to support the judgment].)
B. The requirement of knowledge and Barclay’s
status as a discharger
Barclay claims it had “no connection to the discharge” of
waste, that its conduct at the Site was only “remote and passive”
and that it had no knowledge of any hazards involved in its
activities at the Site. We have established above that it was fully
aware of the presence of petroleum residue and waste at the Site
and that it was actively engaged through its agents in breaking
up and burying the concrete and soil that contained the
petroleum residue and waste.
We now address its claim that it did not know at the time
that burying waste could have adverse environmental effects or
adverse legal consequences. (We further address this issue in our
discussion below of subdivision (j).)
As authority for its claim, Barclay relies on City of Modesto
Redevelopment Agency v. Superior Court (2004) 119 Cal.App.4th
28 (Modesto).51 The holding of Modesto relevant to the present
51 Barclay also relies on a federal case, Redevelopment Agency
v. BNSF Ry. (9th Cir. 2011) 643 F.3d 668. There, the court
determined that the actions of BNSF were passive rather than
75
case was carefully explained in TWC Storage, LLC v. State Water
Resources Control Bd. (2010) 185 Cal.App.4th 291 (TWC):
“The issue in Modesto was whether the defendants, none of
whom were landowners, were ‘responsible parties’ under Water
Code section 13304, subdivision (a). (Modesto, supra, 119
Cal.App.4th at p. 35.) Water Code section 13304, subdivision (a)
provides that a person is responsible for cleanup and abatement
if the person ‘causes or permits’ a discharge that ‘creates, or
threatens to create, a condition of pollution or nuisance.’ (Wat.
Code, § 13304, subd. (a); see Modesto, at p. 35.) In Modesto, the
First District Court of Appeal’s interpretation of this statutory
language was guided by its prior decision in Leslie Salt Co. v. San
Francisco Bay Conservation etc. Com. (1984) 153 Cal.App.3d 605
(Leslie Salt).
“In Leslie Salt, the court construed a statute which allowed
a cease and desist order to be issued to any person who had
‘“undertaken” ’ to ‘ “place[] fill” ’ without the requisite permit.
(Leslie Salt, supra, 153 Cal.App.3d at p. 612.) In Leslie Salt, the
plaintiff, who was the landowner, focused on the word
‘ “undertaken” ’ and contended that the statute did not apply to
anyone ‘other than the one who actually placed the fill.’ (Leslie
Salt, at p. 612.) The First District held in Leslie Salt that the
statute applied to ‘landowners regardless whether they actually
placed the fill or know its origin.’ (Leslie Salt, at p. 617.)
‘[L]iability and the duty to take affirmative action flow not from
the landowner’s active responsibility for a condition of his land
that causes widespread harm to others or his knowledge of or
active, distinguishing that case from the present one. Nor are we
bound by decisions of federal courts other than those of the
United States Supreme Court.
76
intent to cause such harm but rather, [but] quite simply, from his
very possession and control of the land in question.’ (Leslie Salt,
at p. 622.)
“In Modesto, the First District’s analysis focused on
whether the defendants could be held liable for creation of a
‘nuisance’ within the meaning of the statutory language.
(Modesto, supra, 119 Cal.App.4th at p. 37.) The First District
rejected the defendants’ contention that ‘only those who are
physically engaged in a discharge or have the ability to control
waste disposal activities’ can be held liable for the nuisance that
discharge creates. (Modesto, at p. 41.) The First District held
that those of the nonlandowner defendants ‘who took affirmative
steps directed toward the improper discharge . . . may be liable
under that statute, but those who merely placed solvents in the
stream of commerce without warning adequately of the dangers
of improper disposal’ could not be held liable under the statute.
(Modesto, at p. 43.)
“We can find nothing in Modesto that supports TWC’s claim
that a landowner cannot be held liable for a discharge unless it
took an ‘active role’ in the creation of the discharge. Modesto
itself did not involve the issue of a landowner's liability, and
Leslie Salt, upon which Modesto was based, explicitly held that a
landowner could be held liable based solely on the landowner’s
possession and control of the land.
“Here, there was substantial evidence that TWC ‘cause[d]
or permit[ted]’ the discharge to occur by engaging contractors to
perform the demolition activity that resulted in the discharge.
Although TWC contends that it could not be liable because it did
not ‘actively participate in the demolition activities’ or ‘fail[] to
take reasonable care,’ Water Code section 13350, subdivision (b)
77
plainly provides that any person who ‘causes or permits’ a
discharge is ‘strictly liable’ ‘without regard to intent or
negligence.’ ” (TWC, supra, 185 Cal.App.4th 29 at pp. 297-298.)52
The facts in the present case are even more compelling
than those in Modesto and TWC: Here, there is substantial
evidence that Barclay, through its agents, was aware of the
presence on the Site of petroleum residue and its odors, and
waste, and that Barclay took multiple affirmative steps over
more than eight months to break up and bury the cement floors
of the three reservoirs located on the Site, followed by grading the
Site utilizing soil from the several berms surrounding the
reservoirs as well as the perimeter berms on the property,
together with soil brought to the Site from elsewhere. Barclay
did this with knowledge of the more than 40-year history of the
use of the Site as a petroleum tank farm as well as with data
Shell had supplied to it and from its own inspection of the Site.
That Barclay’s conduct constituted “active involvement “in this
work is conclusively established by the evidence.53 Thus, it was
52 The Water Board also found that Barclay did not qualify for
the safe harbor of subdivision (j).
53 In the RCAO the Water Board found that: “Lomita
purchased the Site with explicit knowledge of the presence of the
petroleum reservoirs and the presence of residual petroleum
hydrocarbons, and conducted various activities, including
partially dismantling the concrete in the reservoirs and grading
the onsite materials. These actives spread the waste at the Site,
and contributed to the migration of the waste through the soil
and groundwater. The residual hydrocarbons are still present at
the Site and continue to cause pollution and nuisance.”
It also found that “The concentration of waste constituents
in soil and groundwater exceed water quality objectives contained
78
actively engaged with knowledge of the condition of the property
in the “discharges” of petroleum residue and waste into the soil
on the Site, resulting in pollution and creation of a nuisance.
Barclay argues, however, that it could not have known at
the time it buried the soil and concrete containing the petroleum
residue and waste that its conduct was in violation of any laws
then in effect. There are two aspects to this claim: (1) that it
must have known at the time of the environmental consequences
of its actions and (2) that it must have known then that its
conduct was unlawful under laws then in force.
Neither is correct. Barclay’s argument assumes it must
have had a specific intent to cause pollution or nuisance, yet it
cites no authority to support any such requirement. Since at
least our Supreme Court’s holding in In re Marley (1946) 29
Cal.2d 525, “ ‘guilty knowledge and intent’ ” have not been
elements of proof required to establish liability for violation of
regulatory offenses. (Id. at p. 529; see People v. Chevron
Chemical Co. (1983) 143 Cal. App.3d 50, 53.)
Moreover, Barclay’s argument that its conduct was not
considered at the time to be unlawful fails to take into account
in the Water Quality Control Plan for the Los Angeles Region
(Basin Plan) including state-promulgated maximum contaminant
levels.”
The RCAO contains an extensive description of the waste
uncovered at the Site beginning in 2007, including findings of
petroleum hydrocarbons, benzene, ethyl benzene, methane,
toluene, arsenic, lead, and chlorinated solvents in soil and soil
vapor and in groundwater. The methane was identified in
concentrations posing a potential safety hazard; other chemicals
were determined to significantly exceed the lower level explosive
limit, also posing a potential safety hazard.
79
that it is Barclay’s burden to establish that its activities at the
Site in the 1960s meet the requirements for the safe harbor
exception of subdivision (j). The cases we discuss in the next
section establish that Barclay’s interrelated claims that it could
not have known in the 1960s that its actions were likely to result
in pollution of the groundwater at the Site and were contrary to
law are not well-founded.
C. The subdivision (j) safe harbor
1. Introduction.
Barclay’s legal contention—that its actions in grading and
developing the Site did not violate laws in existence at the time,
and thus its conduct is protected by the “safe harbor” of
subdivision (j)—lacks merit.
The safe harbor set out in subdivision (j) provides: “This
section does not impose any new liability for acts occurring before
January 1, 1981, if the acts were not in violation of existing laws
or regulations at the time they occurred.”
At the same time subdivision (j) was added to Water Code
section 13304,54 the Legislature amended subdivision (a) of that
section to hold past producers, transporters, or disposers of
hazardous waste liable for corrective action under the Water
Code. (Enrolled Bill Rep. on Assem. Bill No. 2700 (1979-1980
Reg. Sess.) July 17, 1980.)55 The Enrolled Bill Report for
54 The provision that is now subdivision (j) of section 13304
was added to section 13304 in 1980 as subdivision (f) of the same
section. (Stats. 1980, ch. 808, § 3, pp. 2538-2540.)
55 Enrolled bill reports may properly be considered as
evidence of legislative intent. (Conservatorship of Whitley v.
Maldonado (2010) 50 Cal.4th 1206, 1218, fn. 3; Elsner v. Uveges,
supra, 34 Cal.4th at p. 934, fn. 19.)
80
Assembly Bill No. 2700 explains that one of the specific purposes
of this legislation was to “permit the [water boards] to take action
against persons whose past actions . . . would pollute the state’s
waters or create a nuisance.” The bill also “clarifies the authority
of the Board to act when discharges have ceased by the time of
discovery.” Subdivision (j) was added so that the revised
subdivision (a) “would not . . . impose a sanction on persons
whose activities were legal at the time they occurred.” (Assembly
Ways & Means Com. analysis of Assem. Bill No. 2700 (1979-1980
Reg. Sess.) as amended Apr. 15, 1980, com. 2.) The addition of
subdivision (j) clarified that the expansion of the authority of the
regional and state water boards in other provisions of the 1981
legislation did not bar a discharger from liability under other
laws—even if the damage from the discharge occurred years after
the discharge—so long as the conduct resulting in the pollution or
nuisance was not legal when it occurred prior to 1981.
To qualify for the safe harbor of subdivision (j), the burden
was and is on Barclay to establish that its conduct was legal at
the time it conducted its activities at the Site; that those
activities did not violate any law or regulation in force at that
time.56
There are two reasons Barclay bears this burden. First,
the reasoning of the court of appeal in Orange County Water Dist.
v. Sabic Innovative Plastics US, LLC (2017) 14 Cal.App.5th 343,
which so held with respect to the virtually identical provision of
Health and Safety Code section 25366, subdivision (a), compels a
similar result in this case. (Sabic, at p. 389.) Second, it is a
“ ‘longstanding’ legal principle” that when a statute carves out an
56 The requirement of subdivision (j) that the conduct occur
prior to January 1, 1981, is clearly met in this case.
81
exception to its application, the burden of proving application of
the exception is on the party seeking its protection in the
particular case. (Simpson Strong-Tie Co., Inc. v. Gore (2010) 49
Cal.4th 12, 23.)
The parties all interpret the phrase “existing laws or
regulations” in subdivision (j) to include laws and regulations
without limitation to those enacted as part of, or based on
authority granted by, the Water Code. We agree with this
reading of subdivision (j); this is its plain meaning, a conclusion
we confirmed by our review of the legislative history of enactment
of this statue in which we found no suggestion that subdivision (j)
was to be narrowly focused, e.g., solely on provisions of the Water
Code. Additionally, the more narrow construction would render
the safe harbor virtually without purpose. (See Newhall Land &
Farming Co. v. Superior Court (1993) 19 Cal.App.4th 334, 351
[statutes applicable to the allegations of discharge of hazardous
substances and pollution (there, Health & Saf. Code, § 25363) are
not the exclusive remedy and do not preclude claims the same
conduct violated other laws (there, the common law)].)
We turn to consider Barclay’s arguments that the trial
court erred in its determinations that its actions were in violation
of other laws, i.e., of provisions of the Health and Safety Code, a
Los Angeles County Ordinance, the Civil Code, and the Fish and
Game Code, each of which was in force at the time of Barclay’s
activities at the Site.57
57 Barclay errs in arguing the subdivision (j) safe harbor
applies to sanitize its conduct because “ ‘[n]uisance’ is already an
element of discharger liability under section 13304 [subdivision
(a)].” This argument is inconsistent with Barclay’s argument
that what is relevant is the law in effect at the time it developed
82
2. Health and Safety Code section 5411.
In 1949, the Legislature enacted Health and Safety Code
statutes granting authority to the State Department of Health
(Health Department) to act when it determined there was or may
be contamination as that term was defined in that new statutory
plan. (Stats. 1949, ch. 1550.) This legislation also required the
Health Department to refer for action to the regional water
pollution boards (created in the same year by the Dickey Act)
evidence of actual or potential pollution and evidence of
nuisance.58 (Stats. 1949, ch. 1549, § 2, p. 2790 [former § 5413].)
As enacted in 1949, Health and Safety Code section 5411
provided: “No person shall discharge sewage or industrial waste,
the Site: Section 13304, subdivision (a) did not exist at the time
Barclay engaged in the conduct at issue; the statute was not
enacted until 1969 as part of the Porter-Cologne Act, and was not
in effect until January 1, 1970, after Barclay’s activities at the
Site had concluded. (Stats. 1969, ch. 482, § 18, p. 1066.) Thus,
subdivision (a) does not meet the subdivision (j) requirement that
it be in force at the time of Barclay’s conduct.
Even if Water Code section 13304 applied, its subdivision
(a) proscribes both pollution and nuisance; Barclay’s activities
constituted both.
58 That the two statutory plans were closely coordinated is
confirmed by their overlapping definitions and interrelated
provisions, as well as by the circumstance that they were enacted
as chapters 1549 (Dickey Act) and 1550 (Health & Safety Code
sections) of Statutes 1949. Also, section 2 of Statutes 1949,
chapter 1550 provided, “This act becomes operative only if
Assembly Bill No. 2156 introduced in the 1949 Regular Session is
enacted by the Legislature at its 1949 Regular Session.” The
referenced bill was what became the Dickey Act.
83
or the effluent of treated sewage or industrial waste, in any
manner which will result in contamination, pollution or a
nuisance.” (Stats. 1949, ch. 1550, § 2, p. 2790.)59
Former Health and Safety Code section 5410, enacted at
the same time, defined the terms “sewage,” “industrial waste,”
“waters of the state,” “pollution,” and “nuisance” in language
identical to that enacted that year in the Dickey Act.60 (Compare
59 The only change made in this statute between its
enactment in 1949 and the present was to substitute the term
“other waste” for the term “industrial waste” in 1967. (Stats.
1967, ch. 1447, § 2, p. 3373.)
60 “Pollution” was defined as: “an impairment of the quality
of the waters of the State by sewage or industrial waste to a
degree which does not create an actual hazard to the public
health but which does adversely and unreasonably affect such
waters for domestic . . . or other beneficial use.” (Stats. 1949, ch.
1550, § 2, p. 2790 [former § 5410, subd. (f)].)
“Nuisance” was defined as “damage to any community by
odors or unsightliness resulting from unreasonable practices in
the disposal of sewage or industrial wastes.” (Stats. 1949, ch.
1550, § 2, p. 2790 [former § 5410, subd. (g)].)
“Industrial waste” was defined as “any and all liquid or
solid waste substance, not sewage, from any producing,
manufacturing or processing operation of whatever nature.”
(Stats. 1949, ch. 1550, § 2, p. 2790 [former § 5410, subd. (b)].)
“Waters of the State” was defined as “any waters, surface
or underground . . . within the boundaries of the State.” (Stats.
1949, ch. 1550, § 2, p. 2790 [former § 5410, subd. (d)].)
“Contamination” was defined as “an impairment of the
quality of the waters of the State by sewage or industrial waste to
a degree which creates an actual hazard to the public health
through poisoning or through the spread of disease.
‘Contamination’ shall include any equivalent effect resulting from
84
Stats. 1949, ch. 1549, § 1, pp. 2782-2783 [former Wat. Code,
§ 13005] with Stats. 1949, ch. 1550, § 2, p. 2790 [former Health &
Saf. Code, § 5410].)
As noted above, actions to abate contamination were the
responsibility of the Health Department, while actions to address
pollution and nuisance were the responsibility of the regional and
state water boards. Thus, the Health and Safety Code legislation
required that, “[w]henever the [Health Department] finds that a
pollution or nuisances does, in fact, exist, such condition shall be
immediately referred by the department to the proper regional
board for action . . . .” (Former Health & Saf. Code, § 5413; Stats.
1949, ch. 1550, § 2, p. 2790 [former §§ 5412, 5413].)
Barclay’s argument that it did not violate Health and
Safety Code section 5411 as it existed at the time of its activities
on the Site depends on the answer to one of the following
questions: (1) Did Barclay create or assist in the pollution of the
the disposal of sewage or industrial waste, whether or not waters
of the State are affected.” (Stats 1949, ch. 1550, § 2, p. 2790
[former § 5410, subd. (e)].)
The Dickey Act contained identical definitions of these
terms. (Stats. 1949, ch. 1549, § 1, pp. 2782-2783 [former
§ 13005].)
In 1967, the term “industrial waste” was replaced by the
term “other waste” each place it appeared in the Health and
Safety Code statutes, broadening the meaning of those terms.
(Stats. 1967, ch. 1447, §§ 2 & 3, pp. 3373-3374.)
The similar terms in the Dickey Act were also amended in
1967 to effect the same changes. (Stats. 1967, ch. 1447, § 6,
pp. 3375-3376 [former § 13005].) Two years later, the Dickey Act
was replaced by the Porter-Cologne Act; however, as the new law
did not become effective until January 1, 1970, we do not address
its terms in any detail. (See Stats. 1969, ch. 482, § 34, p. 1088.)
85
Site by “impairment of the quality of the waters of the state by
. . . other waste to a degree which . . . does adversely and
unreasonably affect [waters of the state] for domestic . . . or other
beneficial use”; or (2) Did Barclay create or assist in the creation
of a nuisance, that is, were the practices Barclay employed in
burying the petroleum residue and waste on the Site
“unreasonable . . . in the disposal of . . . other wastes.” (See
former Health & Saf. Code, § 5410, subds. (f), (g).)
In support of its argument that its actions did not adversely
and unreasonably affect waters of the state, Barclay relies on two
cases, Thompson v. Kraft Cheese Co. (1930) 210 Cal. 171 (Kraft
Cheese) and People v. City of Los Angles (1948) 83 Cal.App.2d 627
(City of L.A.). Neither case supports Barclay’s claims; instead,
they indicate that Barclay did act unreasonably in burying the
petroleum residue and in doing so violated Health and Safety
Code section 5411.
In Kraft Cheese, our Supreme Court upheld a modified
injunction against the discharge of byproducts of cheese
manufacturing which Kraft was allowing to seep into the ground
and into a creek adjacent to its plant. Barclay describes the
offense supporting issuance of the injunction in Kraft Cheese as
“enforcing section 5411 against cheese factory for discharge of
dirty water that came from floor cleaning.”61
61 The statute applied in Kraft Cheese, a predecessor of
Health and Safety Code section 5411, forbad the discharge of
“any . . . substance, offensive, injurious or dangerous to health,
into any . . . waters used or intended to be used for human or
animal consumption or for domestic purposes . . . without a
permit . . . .” (Stats. 1907, ch. 492, § 2, p. 894; Deering’s General
86
More was involved than just “dirty water”: The effluent
from the manufacturing process of cheese itself was held to be a
discharge sufficient to sustain the injunction in that case. (Kraft
Cheese, supra, 210 Cal. at pp. 176-177.)
Barclay’s actions in the present case are of no lesser
consequence and impact: The discharge in the present case was
clearly waste within the terms of Health and Safety Code
sections 5410 and 5411,62 and Barclay’s conduct did clearly
constitute the “discharge of sewage or other waste, or the effluent
of treated sewage or other waste, in a[] manner which [resulted]
in contamination, pollution or nuisance.” Thus, the holding in
Kraft Cheese actually supports the conclusion that Barclay’s
actions in the 1960s were contrary to Health and Safety Code
section 5411, and, thus, not within the subdivision (j) safe harbor.
To accept Barclay’s argument would require that we determine
that petroleum residue and waste are less deleterious than the
leftovers from the manufacture of an edible foodstuff.
City of L.A., supra, 83 Cal.App.2d 627, also does not
support Barclay’s claim that the discharge of petroleum waste
was not a potential subject of concern or subject to enforcement
action in the late 1960s.63 In City of L.A., the Attorney General
Laws (1923 ed.) Act 6238, § 2, quoted in Kraft Cheese, supra, 210
Cal. at p. 177.)
62 As we have explained in the text above, the legislative
changes to these statutes in 1967 do not affect our conclusions.
63 City of L.A. was decided prior to enactment of the Dickey
Act. Even at the time of its decision—as was the case after the
effective date of the Dickey Act—conduct such as that at issue in
87
sued several cities on behalf of the state to restrain those cities
from, among other things, violating State Board of Health rules
against creating a public nuisance based on their failure to
comply with permit requirements for operation of a sewage
treatment works. Among the court’s holdings was that, even
though certain of the municipality defendants did not themselves
maintain the sewage treatment plant, they could be held legally
responsible for maintaining a public nuisance to the extent they
contributed to it by allowing their sewage to be discharged into
the ocean through the plant owned and operated by the City of
Los Angeles. (Id. at p. 643.)
That case did not directly consider whether the discharge of
petroleum residue was a violation of Health and Safety Code
section 5411. Thus, as the Water Board points out, the case is
the present case was considered actionable as a public nuisance
which could be abated.
The City of L.A. court makes the additional point that
negligence is not an element of an action to abate a public
nuisance, holding that the conduct at issue in that case
constituted a per se “violation of the rights of the people of the
State of California, which amounts in law to a nuisance,
regardless of whether or not it is due to any negligent act or
omission.” (City of L.A., supra, 83 Cal.App.2d at p. 643; cf. In re
Marley, supra, 29 Cal.2d at p. 529.)
Thus, based on the holding in City of L.A., Barclay’s
conduct would be a per se nuisance, rendering meritless Barclay’s
argument that it must have known that its activities would or
might cause harm. (Cf. People v. Chevron Chemical Co., supra,
143 Cal. App.3d at pp. 52-53 [in construing Fish & G. Code,
§ 5650 (which is not strictly applicable in the present case as that
code focuses on waters that do or might support aquatic life) the
court held that regulatory offenses do not require proof of mens
rea; instead they are strict liability offenses].)
88
not directly applicable. (Maguire v. Hibernia S. & L. Soc. (1944)
23 Cal.2d 719, 730 [an opinion is not authority for a proposition it
does not consider]; Hart v. Burnett (1860) 15 Cal. 530, 598-600
[same]; Contra Costa Water Dist. v. Bar-C Properties (1992) 5
Cal.App.4th 652, 660 [same].)
City of L.A. did conclude, however, that aiders and abettors
in the discharge of sewage could be held liable for nuisance.
Thus, rather than provide support for Barclay’s claim of no
liability, the case can be read to indicate Barclay could be held
liable as an aider and abettor in the discharge of petroleum
residue originally deposited on the surface of the Site by Shell.
Based on the facts and circumstances discussed above, we
conclude that Barclay has not carried its burden to establish that
its conduct was within the subdivision (j) safe harbor and that
the trial court erred in its determination that Barclay’s conduct
did not qualify for safe harbor protection. Indeed, there is no
credible evidentiary dispute: Barclay’s actions constituted the
discharge of “other waste” which “will result in . . . pollution or a
nuisance” in violation of former Health & Safety Code section
5411, and did not qualify under the subdivision (j) safe harbor.
Further, pursuant to City of L.A., Barclay’s claim it did not
know what it was doing in burying the petroleum residue and
waste on the Site could cause harm is not relevant to the finding
of a violation of Health and Safety Code section 5411. (City of
L.A., supra, 83 Cal.App.2d at p. 644, citing Kafka v. Bozio (1923)
191 Cal. 746, 748.)64
64 Contrary to Barclay’s claims that there was no precedent
for determining that its conduct might be subject to sanction, we
also note that as long ago as 1884, our Supreme Court held that
mining debris, consisting of otherwise benign sand and rock,
89
3. Other Bases for the Rulings Below.
The Water Board found that Barclay’s activities also
violated Fish and Game Code section 5650 and Los Angeles
County Ordinance 20.36.010, determinations which Barclay
disputes.
Because we have concluded that the safe harbor cannot
apply to Barclay’s actions in this case based on our holding that
Barclay’s actions were contrary to Health and Safety Code
section 5411, we need not address other reasons for the Water
Board’s action in adding Barclay as a responsible party in the
RCAO or for the trial court’s affirmance of that order. We do so
based on the principle of appellate procedure that a judgment
will be affirmed upon any one of the bases upon which the trial
court made its determination. (Sanowicz v. Bacal (2015) 234
Cal.App.4th 1027, 1040.)
could constitute a public nuisance based on the quantity of its
discharge if that discharge affected the rights of the community,
in that case to navigation in the rivers into which the debris was
allowed to flow. (People v. Gold Run Ditch & Mining Co. (1884)
66 Cal. 138, 147.) And, in 1933, our Supreme Court held that a
nuisance had been created by the “escape over and about the
entire neighborhood of fine dust, dust, particles of sand . . .
creating a condition that makes it impossible for persons in the
vicinity to properly ventilate their homes and impossible to use
their yards for play spaces for their children . . . .” (Eaton v.
Klimm (1933) 217 Cal. 362, 366.) The Water Board’s factual
findings in this case indicate that the impact of Barclay’s actions
is far greater that the impact determined to be sufficient in these
earlier cases.
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DISPOSITION
The judgment is affirmed. Respondents shall recover their
costs on appeal.
CERTIFIED FOR PARTIAL PUBLICATION.
GOODMAN, J.*
We concur:
EDMON, P.J. EGERTON, J.
* Retired Judge of the Los Angeles Superior Court, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
91