Tesoro Refining v. L.A. Regional Water Quality Control Bd.

Filed 11/22/19
CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION THREE

TESORO REFINING & MARKETING B288889
COMPANY LLC et al.,
(Los Angeles County
Plaintiffs and Appellants, Super. Ct. No. BS160502)

v.

LOS ANGELES REGIONAL WATER
QUALITY CONTROL BOARD,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of
Los Angeles County. James C. Chalfant, Judge. Affirmed.

Meyers, Nave, Riback, Silver & Wilson, Gregory J.
Newmark and Viviana L. Heger for Plaintiffs and Appellants.

Xavier Becerra, Attorney General, Robert W. Byrne,
Assistant Attorney General, Gary E. Tavetian and John S.
Sasaki, Deputy Attorneys General, for Defendant and
Respondent.
 INTRODUCTION
In this appeal, plaintiffs and appellants Tesoro Refining &
Marketing Company LLC and Tesoro Socal Pipeline Company
LLC (Tesoro) appeal the denial of a writ of mandate seeking to
set aside a cleanup and abatement order (CAO) issued by
defendant and respondent Los Angeles Regional Water Quality
Control Board (Regional Board).1
Tesoro alleges that the trial judge erred in two ways. First,
Tesoro claims that the administrative record does not contain
substantial evidence to support the finding that Tesoro’s
pipelines were the source of the pollutants. Second, Tesoro,
claiming that any such discharge must have occurred before
1970, challenges the imposition of liability as an impermissible
retroactive application of the Porter-Cologne Water Quality
Control Act of 1969 (Porter-Cologne Act). (Wat. Code,
§§ 13000―16104.)2
The Regional Board responds that there is substantial
evidence to support the trial court’s decision. Further, the
Regional Board objects to Tesoro’s introduction of a new claim of
retroactive application in this proceeding. As a threshold matter,
the factual question of when Tesoro’s pipelines leaked pollutants
was never answered because Tesoro never argued to the Regional

1 Tesoro acquired these pipelines effective June 1, 2013.
Tesoro and the previous owners, BP Pipelines (North America),
Inc., Atlantic Richfield Company (ARCO) and ARCO Terminal
Services Corporation (ATSC), shall be referred to collectively as
“Tesoro.”
2 All further undesignated statutory references are to the
Water Code.

2
Board that this action involved an impermissible retroactive
application of the Porter-Cologne Act. In fact, throughout the
administrative process, Tesoro denied that its pipelines were the
source of the pollution. Where, as here, the administrative
agency has not determined a factual predicate for a defense such
as this one, administrative exhaustion should preclude the
argument. Finally, the Regional Board asserts that even if
exhausted, Tesoro’s retroactivity argument erroneously limits the
definition of “discharge.” The term “discharge” must be read to
include not only the initial occurrence, but also the passive
migration of the contamination into the soil and, ultimately, into
the groundwater.
We find that the law and substantial evidence support the
trial court’s denial of Tesoro’s writ of mandate. Substantial
evidence in the administrative record supports the court’s
independent judgment that Tesoro’s pipelines were the source of
the contamination addressed in the CAO. We also find that it
would have been futile for Tesoro to argue its narrow definition of
“discharge” before the Regional Board, thereby excusing its
failure to exhaust. We also hold that, even if substantial
evidence in the record supported Tesoro’s factual contention that
the initial discharge from its pipelines necessarily occurred before
1970, it would still be an actionable discharge under the Porter-
Cologne Act.
BACKGROUND FACTS
To understand the issues presented here, it is necessary to
examine the statutory basis for the challenged order and the facts
surrounding the investigation of and enforcement actions taken
with the order.

3
 A. The Porter-Cologne Act
Enacted in 1969, the Porter-Cologne Act reflects the
public’s “primary interest in the conservation, control, and
utilization of the water resources of the state,” and intends to
advance that interest by ensuring the protection of the “quality of
all the waters of the state” for the public’s use and enjoyment.
(§ 13000.)
The Porter-Cologne Act recognizes that the protection of
water quality can best be accomplished by statewide regulation
with regional administration. Thus, under the Porter-Cologne
Act, the State Water Resources Control Board (State Board) and
nine regional boards are the principal state agencies for enforcing
state water pollution law.3 (See WaterKeepers Northern
California v. State Water Resources Control Bd. (2002) 102
Cal.App.4th 1448, 1452.) “Waters of the state,” as defined in the
Porter-Cologne Act, include “any surface water or groundwater
. . . within the boundaries of the state.” (§ 13050, subd. (e).)
Section 13304, subdivision (a) establishes the Regional
Board’s authority to issue a CAO to 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 and creates, or
threatens to create, a condition of pollution or nuisance.” Upon
order of a regional board, the discharger shall “clean up the waste
or abate the effects of the waste, or, in the case of threatened

3 The State Board is solely responsible for setting statewide
policy concerning water quality control and is the only entity
authorized to promulgate regulations to implement the Act.
(State Water Resources Control Bd. Cases (2006) 136 Cal.App.4th
674, 696.)

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pollution or nuisance, take other necessary remedial action.”
(§ 13304, subd. (a).) A regional board can order suspected
dischargers to investigate to determine the source of the
pollution. (§ 13267.) A person who objects to the CAO can file a
petition with the State Board to review that action. (§ 13320,
subd. (a).)
B. Tesoro’s Pipelines and the Regional Board’s
Investigation
In November 2009, the Regional Board received notice from
the California Department of Public Health (DPH) regarding an
inquiry from the Wrigley Heights neighborhood in Long Beach,
California. Residents of the Wrigley Heights neighborhood had
expressed concern regarding potential vapor intrusion into
buildings. DPH requested that the Regional Board conduct
further investigation of petroleum hydrocarbon-impacted soils
and groundwater contamination at the Oil Operators Inc. (OOI)
site located nearby.
OOI is a cooperative association of several companies which
operate oil wells in the Long Beach/Signal Hill area. OOI owns a
20-acre parcel of land in the City of Long Beach, which is
bounded by the 405 and 710 Freeways, the Los Angeles River and
Wardlow Road and Golden Avenue. At this site, OOI operated
onsite water treatment facilities to treat production brines and
other fluids recovered during crude oil production. OOI ended all
operations in 1998, and the property has been undergoing de-
commissioning since that time.4

4 The OOI site has been the subject of remediation under the
oversight of the City of Long Beach Department of Health and
Human Services in accordance with a consent decree issued in
the Los Angeles Superior Court in 2002. Full scale remedial

5
 In February 2010, the Regional Board issued a requirement
for a technical report pursuant to section 13267 to OOI. The
Regional Board ordered OOI to complete onsite and offsite
assessments of dissolved groundwater contamination and to
determine whether any inhabitants have been potentially
exposed to health threats from migrating volatile organic
compounds (VOC’s) contaminant plumes from the OOI site.
Specifically, OOI was to begin sampling groundwater monitoring
wells on its site and submit quarterly reports and submit a work
plan to delineate fully the lateral and vertical extent of
groundwater contamination.
In March 2010, OOI submitted to the Regional Board a
proposed work plan and a recitation of current subsurface
conditions at the OOI site. In relevant part, the report discloses
the existence of benzene in the northern most portion of the
property at 45 feet. In addition, the report disclosed the presence
of 1,2-dichloroethane (1,2-DCA), an additive that had been used
with leaded gasoline, in groundwater. Benzene was also present
in the groundwater. Concentrations of both 1,2-DCA and
benzene exceeded the state’s maximum contaminant levels along
the eastern portion of the OOI property.
In May 2010, the Regional Board issued another
Requirement for a Technical Report pursuant to section 13267 to
OOI. In this report, the Regional Board directed OOI to
determine if any offsite inhabitants had been potentially exposed
to health threats from migrating VOC’s contaminant plumes

activities, including bioremediation of the soils under the site,
has been ongoing.

6
beneath the residential properties on the eastern boundary of the
OOI site, which was the Wrigley Heights neighborhood.
A plan for additional site assessment by OOI was approved
in mid-2011 and a series of reports from that work plan were
submitted to the Regional Board. A multi-depth, site-wide soil
gas survey was conducted beneath the OOI property and the
Wrigley Heights neighborhood. Soil gas samples were tested for
VOC’s (benzene) and methane. High concentrations of benzene
in soil gas were found to be coincident with higher concentrations
of benzene in the underlying groundwater. The higher level of
benzene in soil gas also appeared correlated with buried
petroleum (gasoline) pipelines on the eastern boundary of the
OOI site. In addition, the groundwater flow direction onsite was
established to be to the north-northwest. The observed
groundwater flow direction along with the pattern and
distribution of contaminants within the groundwater indicated
an offsite source to the east of the OOI property.
The presence of benzene and 1,2-DCA, the location of that
contamination on the eastern boundary of the OOI site and the
general groundwater flow direction led the Regional Board to
suspect that there had been a gasoline discharge. And, the
location and distribution of the groundwater contamination
suggested that the source of that discharge was located along
Golden Avenue. Based on the groundwater data and their
engineering and scientific expertise, staff at the Regional Board
narrowed the origination of the discharge to certain pipelines
that carried gasoline beneath Golden Avenue.
In January 2012, the Regional Board issued a requirement
for technical report on pipeline inventory to two companies—
Tesoro and Plains All American Pipeline, L.P. (Plains). Those

7
two companies owned underground pipelines that might have
transported gasoline near Golden Avenue. The Regional Board
ordered these two companies to provide inventories of their
respective pipelines within one mile of the intersection of Baker
Street and Golden Avenue in Long Beach and to describe the
products that those pipelines conveyed.
The information provided by these two companies provided
critical facts to the investigators.5
Plains identified seven line segments within the one-mile
radius of the investigation area. Plains reported that “all line
segments have historically only been in crude oil service.” A
crude oil leak was not consistent with the type of contamination
found at the subject site. Further, the one segment of Plains’s
crude oil pipelines in the immediate vicinity of the investigation
location (Line 52E) was purged and placed out of service for at
least the last 12 years.6
In Tesoro’s response, it identified six pipelines within a
one-mile radius of the intersection of Baker Street and Golden
Avenue. The Tesoro pipelines crossing nearest to the location of
the detected contamination were Lines 32, 34 and 252.

5 Although Tesoro asserts that there were over 10 pipelines
in the vicinity of 712 Baker Street, the Regional Board
investigated the use, history of operation and release and repair
history for these lines. Records from the state fire marshal’s
office and the City of Long Beach, Department of Public Works
showed only Tesoro’s pipelines carried gasoline.
6 Tesoro verified that Plains’s Line 252 was a crude oil
transport pipeline.

8
 Line 252 was initially identified by Tesoro as a wastewater
line. Tesoro later changed its description of Line 252 as carrying
gasoline until 1953 and then used for wastewater transport
thereafter and inactive since 1995. This line is a six-inch
pipeline.
Line 32 was an idled 12-inch “crude and refined dark
products line.” Work was underway to reactivate this line.
During an inspection of the line in 2011, some “anomalies (dents)
were identified in the vicinity of Baker Street and Golden
Avenue,” and those areas of Line 32 were “subsequently bolstered
with approved pipeline repair methods.” Tesoro denied any
release from Line 32 at any time.
Line 34 was an active eight-inch diameter diesel and
gasoline refined products line. A piece of that line had been
relocated/replaced under the Metropolitan Transit Authority rail
line in 2010 as a precautionary measure. According to Tesoro,
there was no “release of product” and the abandoned section was
filled with mud. According to Tesoro, there was no evidence of a
release from Line 34. Tesoro denied any release from Line 34 at
any time.7
Based on these responses, the only pipelines under Golden
Avenue that had ever transported refined gasoline belonged to
Tesoro.
In response to this information, the Regional Board issued
another requirement for technical report to Tesoro. In that order,
Tesoro was described as “suspected of being responsible for” a
discharge of waste beneath Golden Avenue resulting in “gasoline

7 Cal Fire records showed the only record of release on this
line was a diesel spill in the City of Bellflower in 1990.

9
type hydrocarbon contamination” in the soil and soil vapor. And,
the order directed Tesoro to prepare and submit a work plan to
determine the extent of that contamination.
Tesoro responded by claiming that it was not responsible
for any gasoline-type hydrocarbon contamination of the soil and
groundwater at the site. Tesoro flatly denied any leaks from any
of its pipelines at any time. Tesoro noted that Line 32 had not
been used for the conveyance of gasoline. And, Tesoro pointed
out that Line 34 had passed testing on eight different occasions
and that there was “no evidence of a release from Line 34.”8
Tesoro also argued that the Regional Board’s data failed to
support a finding of gasoline contamination.9
The Regional Board requested additional information and
analysis be conducted through site sampling in response to

8 Tesoro later amended its answers and reported a 1973 leak
from Line 32 near Golden Avenue about one-half mile from Baker
Street. The leak was caused by external corrosion. Tesoro also
reported a two-barrel leak of “unknown material” from Line 34 in
1990. Again, that leak was caused by external corrosion. The
location of that release was unknown.
9 In response to the Regional Board’s order for a soil and soil
vapor investigation of the area surrounding its pipelines, Tesoro
proposed placing probes at a single location adjacent to Line 32.
The Regional Board found that work plan to be deficient and,
upon further discussion, Tesoro proposed three sampling
locations. The Regional Board asked Tesoro to expand the extent
of its proposed investigation to delineate the full extent of
hydrocarbon impacts in soil, soil vapor and groundwater on both
sides of BP Line 32 and 34. As of November 2012, no such
revised work plan was submitted by Tesoro to the Regional
Board.

10
Tesoro’s arguments. Six water samples and one product sample
were tested. These tests revealed the presence of 2,2,4-
trimethylpentane (iso-octane, arrowed) and other
trimethylpentanes, which are blended into gasoline to increase
octane levels. These tests also revealed the presence of
n-alkanes, which is suggestive of leaded gasoline. The tests ruled
out any heavier petroleum products in the sample. Once again,
the only gasoline pipelines in the area were owned by Tesoro.
Unable to assert that the contamination was not from
refined products, Tesoro changed its focus and now claimed that
OOI’s wastewater lines, not Tesoro’s gasoline pipelines, were the
source of the problem. Citing a 1953 United States Geological
Survey (USGS) report, Tesoro asserted that OOI’s wastewater
treatment facility was the source of the contamination.10
Specifically, Tesoro suggested that OOI accepted waste from
wells and refineries and then discharged that waste via the sewer
line or the Los Angeles River discharge line. This refinery waste,
Tesoro argued, was the source of the gasoline contamination.
The Regional Board investigated that theory. Business
records from OOI failed to corroborate the USGS’s description of
its waste treatment operations. OOI had no records of refinery
waste water going to the site. The Regional Board, however,
accepted the possibility that OOI had accepted refinery wastes.
However, even if OOI accepted refinery wastes at some point in
the past, the soil, soil gas and groundwater data all pointed to the

10 United States Geological Survey, 1953, Department of the
Interior. “Native and Contaminated Ground Waters in the Long
Beach-Santa Ana Area, California,” U.S. Geological Survey
Water-Supply Paper 1136, Washington, D.C., at pp. 71―75.

11
pipeline corridor as the source of the contamination. If OOI were
the discharger, the data would have looked different. For
example, if OOI had discharged refinery wastes into the
Los Angeles River (as Tesoro contended), then the groundwater
proximate to the western side of the OOI property would be
contaminated. Tests of this groundwater, however, were
negative. Using this and other facts, OOI’s reception of
wastewater from refineries was ruled out as a source of the
contamination.
The Regional Board issued a further report establishing the
basis upon which it concluded that Tesoro’s pipelines were “a
discharger and responsible party,” and directed Tesoro to adopt a
“proactive approach and work together with all the stakeholders
to address this environmental concern.”
Tesoro declined to adopt a “proactive approach,” instead
asserting a new argument to disprove that it was a discharger.
For the first time, Tesoro claimed that Line 34 did not carry
gasoline; it had been dedicated to diesel service since 1946. This
factual claim contradicted the sworn statement originally
provided by Tesoro.
Tesoro’s claim that Line 34 only carried diesel also failed to
comport with other contemporaneous records regarding the
pipeline and its uses. Cal Fire noted that its records showed that
Line 34, from the Los Angeles Refinery to Vinvale, was used for
refined product service. A 1975 City of Long Beach pipeline map
also showed that Line 34 was in gasoline service.11 And, a

11 Although Tesoro claimed that the “Gaso” designation on
this 1975 City of Long Beach pipeline map generically applied to
any refined fuel product and as such could properly designate a
diesel pipeline, that argument was unsupported by competent

12
Western Oil and Gas Association, Long Beach-Wilmington
Harbor area, oil handling facility map, updated on January 1973,
showed Tesoro as having four-, six-, eight- and twelve-inch
diameter “refined products lines.” 12 The four- and six-inch lines
identify segments of Line 252, the 12-inch diameter line is Line
32 and the eight-inch diameter line is Line 34.
C. Cleanup and Abatement Order and Appeal to State
Board
In April 2013, the Regional Board issued a “tentative
cleanup and abatement order” (TCAO) to Tesoro. The TCAO
found that Tesoro was responsible for a discharge of waste at the
site and, that as a result of that discharge, elevated
concentrations of benzene and other petroleum hydrocarbons
were found in the soil and groundwater at the site.
In response, Tesoro submitted extensive comments, adding
to the hundreds of pages that it had already submitted to the
Regional Board. Although several arguments were made, at no
time did Tesoro admit to having caused a discharge from its
pipelines at any time—either before or after 1970. “We have no
record of gasoline pipeline leaks from any of the three pipelines

evidence. A City of Long Beach employee noted that “Gaso” on its
1975 maps referred only to gasoline—not diesel.
12 Although Tesoro claimed that a Golden Eagle pipeline
running along the Golden Avenue corridor on the City of Long
Beach map carried gasoline, the Western Oil and Gas Association
map does not show any Golden Eagle pipelines running along the
Golden Avenue corridor. There are Golden Eagle pipelines on the
1973 map, but they do not run along the Golden Avenue corridor
and they are identified as “oil” pipelines, not refined product
pipelines.

13
that [Tesoro] operates under Golden Avenue.” Nor did it identify
any other gasoline pipeline that could have been responsible for
the contamination at the site. Rather, Tesoro argued that “[t]he
nature of the contaminants and their location points more
logically to the operations of the Oil Operators, Inc. site.”
According to Tesoro, “nearby community residents noticed, and
reported to authorities, several vacuum trucks discharging waste
[at the OOI site] as late as 2000.”
After considering and responding to these comments, the
Regional Board issued the final CAO on September 18, 2014. The
Regional Board ruled out “other possible sources of wastes at the
site, including the operations of the Oil Operators, Inc. (OOI)
site.” And, the CAO noted that “[j]ust because [Tesoro] has no
record of gasoline pipeline leaks from any of the three pipelines
that [Tesoro] operated under Golden Avenue does not mean that
a release did not occur. A release can occur even if there is no
record of it.” Further, the Regional Board accepted the
information provided by Tesoro and other available records
showing that Lines 32, 34 and 252 collectively transported crude
oil, dark refined products, other refined products, including
gasoline and diesel fuel, and oily water.
Tesoro filed a petition for review with the State Board.
Tesoro argued (again in contradiction with its initial admissions)
that its lines were not gasoline lines after 1953 and there was no
evidence that they leaked at any time. For the first time, Tesoro
argued that given the historical use of its pipelines for gasoline,
the CAO constituted an impermissible retroactive application of
the Porter-Cologne Act. Tesoro argued that the Regional Board
was required to make a finding that the discharge at issue here
occurred before 1970, even though Tesoro had not asserted that

14
position before the Regional Board and the factual basis for
Tesoro’s retroactivity argument was contradicted by the
company’s own admissions and other competent evidence in the
record.
The State Board took no action on Tesoro’s petition for
review, and the petition was deemed denied by operation of law
on January 1, 2016. (See Cal. Code Regs., tit. 23, § 2050.5.)
D. Tesoro’s Writ of Mandate and Trial Court Ruling
Tesoro filed a petition for writ of mandate challenging the
Regional Board’s issuance of the CAO.
In its petition for writ of administrative mandate, Tesoro
argued that the evidence in the record showed that the CAO
mandated the remediation of discharges that took place, if at all,
long before the Porter-Cologne Act became effective. Tesoro
criticized the Regional Board’s failure to make an express finding
that the discharge occurred after 1970 as required to avoid an
impermissible retroactive application of the Act.13 Further,
Tesoro argued that a factual finding of a pre-1970 discharge was
necessary because “discharge” could not be properly defined to
encompass pollution that “continues to occur and expand,” as it
passes from its original location, through the soil and into the
groundwater. Citing Lake Madrone Water Dist. v. State Water
Resources Control Bd. (1989) 209 Cal.App.3d 163, 174 (Lake
Madrone), Tesoro argued that such a definition was contrary to
the plain meaning of the word. Tesoro also argued that even

13 In response to the Regional Board’s argument that Tesoro
had not made this argument before the Regional Board and was,
therefore, precluded from raising this issue judicially, Tesoro
argued that this jurisdictional question had not been waived, and
that further exhaustion would have been futile.

15
under the State Board’s definition, the record showed no
“discharge” had occurred because recent monitoring data showed
that the contaminant concentrations are trending downward.
The trial court issued its decision on the petition on
December 12, 2017. The court ruled, based on its independent
judgment, that the Regional Board’s findings were supported by
the weight of the evidence.
The trial court, giving the State Board’s interpretation of
“discharge” in section 13304 considerable deference, defined that
term to encompass not only the initial event but also to include
the continuing migration of contaminants “so long as they
continue to threaten state waters.” This definition, the court
found, was based not only on the State Board’s expertise in
hydrology and in knowing what is necessary to maintain water
quality “by ensuring that the activities are encompassed that
have an ongoing effect on the quality of the waters of the state,”
but was consistent with the Act’s intent. Thus, the trial court
found that the Regional Board had not retroactively applied the
Porter-Cologne Act to a pre-1970 discharge.14

14 The trial court rejected the Regional Board’s claim that
Tesoro failed to exhaust its administrative remedies by failing to
assert before the Regional Board that it was retroactively
applying the Porter-Cologne Act. Citing Buckley v. California
Coastal Com. (1998) 68 Cal.App.4th 178 (Buckley), the trial court
held that “ ‘[t]he rule of exhaustion of administrative remedies
does not apply where the subject matter lies outside of the
administrative agency’s jurisdiction.’ ” In this case, Tesoro’s
contention to the State Board that the discharge occurred prior to
1970 was sufficient to avoid the bar of administrative exhaustion.

16
 The trial court also evaluated the administrative record
and concluded, based on its independent judgment, that the
Regional Board had fully and fairly investigated all parties, and
that the Regional Board properly ruled out other parties as a
possible source of the waste. Benzene was in the gasoline
transported by Tesoro in its Golden Avenue pipelines, and the
maximum benzene concentrations in groundwater were generally
consistent with this pipeline corridor. The investigation also
discovered 1,2-DCA and iso-octane indicators of gasoline
discharge. The highest 1,2-DCA groundwater detections were
found in wells close to and downgrade from Tesoro’s Lines 32, 34
and 252. The distribution of these gasoline-related chemicals
along the eastern edge of the OOI property provided sufficient
circumstantial evidence that Tesoro and its pipelines along
Golden Avenue were the source of the pollution.
Accordingly, the trial court denied Tesoro’s petition and
entered judgment in favor of the Regional Board on January 10,
2018.
A timely appeal followed.
DISCUSSION
A. Standard of Review
Section 13330, subdivision (e) requires the trial court to
exercise its independent judgment in reviewing the CAO issued
by the Regional Board. The parties both agree that the trial
court properly used the correct “independent judgment” standard
of review in this case. Thus, on appeal, we review the lower
court’s factual determinations under the substantial evidence
standard. (Coastal Environmental Rights Foundation v.
California Regional Water Quality Control Bd. (2017) 12

17
Cal.App.5th 178, 190.) Questions of law and the lower court’s
legal determinations are reviewed de novo. (Ibid.)
B. Substantial Evidence Shows Other Possible Sources
of Gasoline Contamination Were Ruled Out.
Tesoro’s first contention on appeal is that the trial court’s
finding of Tesoro’s pipelines as the source of the gasoline
contamination in this instance is not supported by substantial
evidence in the record. Specifically, Tesoro asserts that the
Regional Board’s investigation failed to “rule out” other possible
sources of gasoline contamination.
The trial court, based on its independent judgment, reached
the conclusion that Tesoro was responsible for the waste
discharge and that the Regional Board had fairly investigated
whether OOI or other pipeline operators might be responsible for
the waste at the site and had properly ruled them out.
The circumstantial evidence in support of this conclusion is
overwhelming. The tests conducted on soil, soil gases and
groundwater at the site point clearly in the direction of gasoline
as the source of the pollution. These tests detected 1,2-DCA, iso-
octanes and n-alkanes, common additives used in the production
of gasoline. In addition, these tests failed to show the presence of
any heavier-end hydrocarbons, indicative of crude oil. The
groundwater data also showed that the benzene concentrations
were highest along the immediate vicinity of Golden Avenue, and
lower at locations farther away. Thus the plume was roughly
centered at and aligned with Golden Avenue, between Baker
Street and where Golden Avenue veers southeast. Soil vapor
data indicates a track of benzene near Tesoro’s Pipelines 32, 34
and 252, and the pattern of the benzene demonstrates a pattern
of an older near-surface release for which the center of the mass

18
has migrated downward—thus rebutting Tesoro’s theory that the
waste was released from a deeper source. Tesoro admitted that
Line 34 operated in this Golden Avenue corridor, and carried
refined gasoline and reformulated gasoline in its pipelines during
the relevant period. Tesoro's initial admission of how it used
Line 34 was corroborated by other records, including a City of
Long Beach pipeline map and a Western Petroleum Association
map showing that this pipeline transported gasoline in the
1970’s.
And, despite considering and studying the issue, the
Regional Board found no other source of gasoline contamination.
OOI had no records of ever handling waste from gasoline
refineries, despite a contrary statement contained in a
description of OOI’s operations in a 1953 report of the USGS.
Further, that version of historic events—that OOI processed
refined waste products and dumped them in the Los Angeles
River—would not have created the contaminated soil and
groundwater patterns found on the Golden Avenue corridor.
Further, Tesoro’s claim that the release was from a source other
than its pipelines failed to find support in the pattern of benzene
contamination in the soil and soil vapor. Finally, the
uncontroverted information in the record is that Plains’s Line 52
transported only crude oil. The Regional Board’s testing of the
soil and groundwater in the Golden Avenue corridor ruled out
crude oil as the source of the contamination.
This circumstantial evidence constitutes more than
sufficient evidence upon which the trial court could reasonably
infer that there was a gasoline discharge along the Golden
Avenue corridor and that the discharge came from Tesoro’s
pipelines.

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 C. Tesoro’s Failure to Exhaust the Allegation that the
Discharge at Issue Here Occurred Before 1970 that
Lies at the Heart of the Retroactivity Argument Is
Excused.
The factual predicate upon which Tesoro’s entire
retroactivity argument rests—i.e., that the discharge from its
pipeline occurred only before 1970—was never determined by the
Regional Board. Tesoro never admitted that its pipelines leaked
gasoline but that these leaks occurred before 1970. Nor, as a
corollary to that admission, did Tesoro assert that the CAO
constituted a retroactive application of the Porter-Cologne Act in
any of its numerous and voluminous submissions. Even after the
tentative CAO was issued, and the Regional Board invited Tesoro
to “ensure that all evidence and comments that you wish staff
and/or the Executive Officer to consider,” Tesoro did not argue
that section 13304 was being impermissibly applied to a pre-1970
discharge. The Regional Board was never presented with that
argument and, as a result, the CAO includes no findings on that
issue.
Tesoro’s failure to raise this argument is understandable.
To have claimed a pre-1970 initial discharge would have required
a repudiation of Tesoro’s numerous denials of any discharges
from its pipelines. Tesoro’s failure to assert this argument,
however, has resulted in a paucity of evidence in the
administrative record to support its claim that the discharge at
issue here occurred before 1970. In fact, the record contains
substantial evidence that might have supported the Regional
Board reaching a very different conclusion. Tesoro’s pipelines
carried gasoline along the Golden Avenue corridor well into the
1970’s. And, although the samples suggested leaded components

20
to the gasoline as the source of the pollution at the site, leaded
gasoline was in use well after 1970. The weathered nature of the
benzene suggests a historic discharge, but does nothing to
suggest how many years ago the discharge occurred. The record
also establishes that Tesoro made repairs and experienced
discharges from certain of these pipelines after 1970. This
evidence, had the issue been raised, could have supported a
finding that the initial discharges occurred after 1970 and that
the CAO at issue here is not a retroactive application of the
Porter-Cologne Act.
As there were no arguments asserted and no findings made
regarding the timing of the initial leak from Tesoro’s pipelines,
the question of retroactivity is somewhat hypothetical. The
Regional Board objects to Tesoro being allowed to make a
retroactivity argument to the trial court because that defense and
its factual predicate were not administratively exhausted. The
trial court excused Tesoro’s failure to exhaust because “ ‘[t]he rule
of exhaustion of administrative remedies does not apply where
the subject matter lies outside the administrative agency’s
jurisdiction.’ ” We agree that the exhaustion doctrine does not
preclude a judicial determination of Tesoro's retroactivity
argument, but reach that conclusion on different grounds.
A party aggrieved by a decision of an administrative agency
must exhaust all available administrative remedies before
seeking judicial review of that decision. (Coachella Valley
Mosquito & Vector Control Dist. v. California Public Employment
Relations Bd. (2005) 35 Cal.4th 1072, 1080.) The doctrine of
exhaustion of administrative remedies precludes judicial review
of issues, both legal and factual, that could have been raised but
were not raised, at the administrative level. (Coalition for

21
Student Action v. City of Fullerton (1984) 153 Cal.App.3d 1194,
1197.) The exhaustion requirement is not a matter of judicial
discretion; it is a jurisdictional prerequisite to resort to the
courts. (Abelleira v. District Court of Appeal (1941) 17 Cal.2d
280, 293.)
The exhaustion doctrine is principally grounded on
concerns favoring administrative autonomy and the idea that
courts should not interfere with an agency determination until
the agency has reached a final decision. (McAllister v. County of
Monterey (2007) 147 Cal.App.4th 253, 275.) Of equal importance
is the notion that courts should not intervene in an
administrative dispute until the expertise of the administrative
agency can be employed to develop a complete record. (Ibid.)
There are, however, exceptions to the exhaustion doctrine. (Ibid.)
One such exception exists where a party claims that the
subject matter lies outside of the administrative agency’s
jurisdiction. (McAllister v. County of Monterey, supra, 147
Cal.App.4th at p. 275; see also Buckley, supra, 68 Cal.App.4th
178.) Tesoro argued to the trial court that it was not required to
exhaust its claim that the discharge at issue in this proceeding
had occurred before 1970 and, therefore, was barred because that
argument essentially claimed that the Regional Board did not
have subject matter jurisdiction. The trial court agreed.
That ruling was erroneous as a matter of law. In Buckley,
the question was whether the Coastal Commission could enforce
a permitting scheme over the portion of a lot that was legally
exempt from the permit requirement. (See Buckley, supra, 68
Cal.App.4th at 189.) The plaintiffs were not required to exhaust
a claim over which the Coastal Commission had no authority in
the first instance. (Id. at pp. 189―190.) There was no factual

22
dispute between the Coastal Commission and the plaintiffs—the
only question was one of law, i.e., the Commission’s legal
authority to take any action regarding the front part of Buckley’s
lot.
Unlike in Buckley, Tesoro’s claim that the Regional Board
acted outside of its jurisdiction depends upon a resolution of a
contested factual issue. Tesoro’s argument regarding the proper
statutory interpretation of the term “discharge,” rests on the
contention that the initial discharge causing the contamination of
the soil and groundwater on the Golden Avenue corridor occurred
before 1970—a factual allegation that was subject to dispute and
that was never determined by the Regional Board. It was never
adjudicated by the Regional Board because the claim of
retroactivity and its factual predicate were never raised by
Tesoro. In fact, Tesoro consistently denied ever having
discharged any gasoline from its pipelines—at any time.
Where, as in this case, the jurisdictional question rests on
disputed facts, administrative exhaustion precludes the litigation
of those facts for the first time in court. (See United States v.
Superior Court of Los Angeles County (1941) 19 Cal.2d 189, 196.)
This requirement serves the intended purpose of the exhaustion
of administrative remedies—“to reduce the burden on courts
while benefiting from the expertise of an agency particularly
familiar and experienced in the area.” (Styne v. Stevens (2001) 26
Cal.4th 42, 55 & fn. 6, 58.) The Regional Board has far more
expertise in chemistry, soil and soil gases, hydrology and other
scientific areas than the court. These experts are uniquely
qualified to determine the origin and timing of the discharge of
gasoline from Tesoro’s pipelines, or to admit an inability to
marshal sufficient facts and, thereafter, to construe the definition

23
of “discharge” to encompass a historic contamination that
continues to pollute soils and groundwater. (Morton v. Superior
Court (1970) 9 Cal.App.3d 977, 982 [“It lies within the power of
the administrative agency . . . to determine, in the first instance
and before judicial relief may be obtained, whether a given
controversy falls within its granted jurisdiction.”].)
One of Tesoro’s other claimed reasons for not asserting its
retroactivity argument in the administrative proceeding,
however, provides a legal excuse for that failure. Tesoro claims
that it would have been futile to adjudicate the date on which the
initial discharge occurred to argue that the law was being applied
retroactively. We agree.
Futility is a narrow exception to the general rule requiring
exhaustion of administrative remedies. (Sea & Sage Audubon
Society, Inc. v. Planning Com. (1983) 34 Cal.3d 412, 418.) It
applies only where the petitioner can “ ‘ “positively state” ’ ” that
the agency had “ ‘ “declared what its ruling will be in a particular
case.” ’ ” (Id. at p. 418, italics in original; Coachella Valley
Mosquito & Vector Control Dist. v. California Public Employment
Relations Bd., supra, 35 Cal.4th at p. 1081.)
In this case, the Regional Board listened, extensively
researched and carefully considered the myriad of arguments
made by Tesoro during this investigation. And, while it never
was called upon to declare what its ruling would have been if
Tesoro had admitted a pre-1970 discharge from its pipelines, the
Regional Board would have been bound by over 40 years of State
Board precedents in defining discharge. In In re Atchison,
Topeka and Santa Fe Railway Company (Order No. WQ 74-13,
Aug. 15, 1974) 1974 Cal. Env. Lexis 2 at p. *9 (Cal.St.Wat.Res.
Bd.) (Atchison, Topeka) and in two other cases thereafter, the

24
State Board held that a continuous and ongoing movement of
contamination from a source through the soil and into the
groundwater is a discharge to waters of the state and subject to
regulation. (See In re Zoecon Corp. (Order No. WQ 86-2, Feb. 20,
1986) 1986 Cal. Env. Lexis 4 at p. *3 (Cal.St.Wat.Res.Bd.)
(Zoecon Corp.); Atchison, Topeka, supra, 1974 Cal. Env. Lexis 2 at
p. *9; see also In re Spitzer (Order No. WQ 89-8, May 16, 1989)
1989 Cal. Env. Lexis 11 at p. *17 (Cal.St.Wat.Res.Bd.) (Spitzer)
[“[D]ischarge continues as long as pollutants are being emitted at
the site.”].) In fact, it cited to this precedent as the basis for the
order.
While not having made an express determination of the
issue, the Regional Board viewed the pollution at the site as
possibly resulting from an older, but ongoing discharge. For
example, Line 252 had stopped carrying gasoline in 1953. If this
line had been the original source of the waste, the Regional Board
necessarily, although not expressly, held that migration of waste
from that pipeline through the soil and into the groundwater
below supported the imposition of liability on Tesoro, even if the
pipeline initially ruptured before 1970.
As it would have been futile for Tesoro to assert the factual
bases and to present a legal argument in support of its
retroactivity claim, that omission is excused.
D. The State Board’s Definition of Discharge Is Correct.
Tesoro agrees that, if the State Board’s interpretation of
the term “discharge” as used in section 13304 is correct, then the
findings in the CAO establish that there is an ongoing discharge
of waste at the site. Tesoro’s only argument is that the State
Board’s interpretation of that term is wrong.

25
 The State Board has defined the term “discharge” in this
statutory provision consistently for the past 40 years to refer to
the entire time during which the discharged waste remains in the
soil or groundwater and continues to impact or to threaten the
groundwater. (See Zoecon Corp., supra, 1986 Cal. Env. Lexis 4 at
p. *3; Atchison, Topeka, supra, 1974 Cal. ENV. LEXIS 2 at p. *9;
see also Spitzer, supra, 1989 Cal. Env. Lexis at p. *17
[“[D]ischarge continues as long as pollutants are being emitted at
the site.”].)
As stated in those decisions, discharge refers to any
movement of waste from soils to groundwater and from
contaminated to uncontaminated groundwater, and continues to
occur if the waste continues to move through the soils and
groundwater and poses a threat of further degradation to
groundwater. (Atchison, Topeka, supra, 1974 Cal. Env. Lexis 2 at
p. *9.) An actionable discharge, therefore, encompasses not
simply the initial episode of contamination, but rather includes
the time during which the waste uncontrollably flows or migrates
from its source, through the soil, and into and within the
groundwater. (See Zoecon Corp., supra, 1986 Cal. Env. Lexis at
p. *3; Atchison, Topeka, supra, 1974 Cal. Env. Lexis at
pp. *9―*10.)
Where agencies interpret statutes within their
administrative jurisdiction, such rulings constitute “ ‘a body of
experience and informed judgment to which courts . . . may
properly resort for guidance.’ ” (Yamaha Corp. of America v.
State Bd. of Equalization (1998) 19 Cal.4th 1, 12―14.) Judicial
deference is particularly appropriate in cases, such as the one
here, where the agency has “ ‘expertise and technical
knowledge’ ” and “ ‘has consistently maintained the

26
interpretation in question.’ ”15 (Id. at pp. 12―13.) (See also
DiGiorgio Fruit Corp. v. Department of Employment (1961) 56
Cal.2d 54, 61―62 [“Consistent administrative construction of a
statute over many years . . . is entitled to great weight and will
not be overturned unless clearly erroneous.”]; Communities for a
Better Environment v. State Water Resources Control Bd. (2003)
109 Cal.App.4th 1089, 1107 [“[W]e extend considerable deference
to an administrative agency’s interpretation of its own
regulations or the regulatory scheme which the agency
implements or enforces. The agency’s interpretation is entitled to
great weight unless unauthorized or clearly erroneous.”].)
Going beyond judicial deference to the agency’s long-
standing administrative construction of its statutes, we find that
the Regional Board’s definition of discharge to include ongoing
movement of contaminants through the soil and into the
groundwater is consistent with the plain language of the statute
(See Moyer v. Workmen’s Comp. Appeals Bd. (1973) 10 Cal.3d
222, 230 [In determining the intent of the Legislature, “ ‘[the]
court turns first to the words themselves for the answer.’ ”].) In
Lake Madrone, supra, 209 Cal.App.3d at page 174, the court
determined that “the ordinary import” of the term “discharge” is

15 Tesoro’s contention that this interpretation is
“jurisdictional,” and ought, therefore, to be accorded little weight
is without merit. The statutory interpretation issue here does
not concern the scope of the agency’s jurisdiction. Section 13304
clearly confers jurisdiction on the Regional Board to issue CAO’s
with regard to ongoing discharges of waste into waters of the
state. The question posed by the definition of “discharge” is
simply whether the Regional Board’s findings in this case support
the existence of such an ongoing discharge.

27
“ ‘to relieve of a charge, load or burden; . . . to give outlet to; pour
forth.’ ” That definition is entirely congruent with the definition
used by the State Board in this case. Where, as here, a pipeline
leak puts forth or emits gasoline into the soil, and that
unremediated gasoline waste continues to pour forth or to emit
chemicals forming a toxic plume that actively threatens to pollute
otherwise uncontaminated groundwater, the term “discharge”
necessarily encompasses this entire period.
Tesoro’s argument that the discharge ends at the moment
the waste is released into the soil was not mandated by Lake
Madrone. As correctly noted by the trial judge, the issue
presented in Lake Madrone was when the discharge began, not
necessarily when it ended. Further, using the definition used in
Lake Madrone, discharge is properly interpreted to embody the
entire period during which pollution is introduced into the
environment and thereafter actively migrates so as to threaten to
pollute or to pollute groundwater.
Tesoro’s reliance on Consumer Advocacy Group, Inc. v.
Exxon Mobil Corp. (2002) 104 Cal.App.4th 438 (Consumer
Advocacy) is misplaced. In that case, the court addressed the
meaning of Proposition 65 and its provision that no business
shall knowingly “discharge or release” a chemical known to the
state to cause cancer or reproductive toxicity where it passes or
probably will pass into a source of drinking water. And, the
question presented was whether passive migration of prohibited
chemicals from soil to groundwater would constitute a separate
“discharge or release.” (Id. at p. 450.) Consumer Advocacy did
not consider or address the issue of whether, under Proposition
65 or any other law, the migration of chemicals within the soil
thereafter contaminating groundwater may be considered part of

28
a single, continuous discharge of those chemicals from their
source. In that case, in fact, there was no evidence that the
chemicals had moved out of a confined space when they simply
moved from “one point to another” within soil. (Consumer
Advocacy, at p. 450.) As those facts are clearly distinguishable
from the facts presented here, Consumer Advocacy provides no
support for Tesoro’s argument.
Nor does the State Board’s definition of “discharge” conflict
with People ex. rel Younger v. Superior Court of Alameda County
(1976) 16 Cal.3d 30 (Younger). In Younger, the Supreme Court
held that a deposit of oil, for purposes of determining a penalty
amount under section 13350, occurs on the day that the oil was
deposited and not on each day the oil remains in those waters.
(Id. at p. 44.) The statutory term, statutory scheme, and overall
purpose of the statute in that case are entirely different from the
situation presented in this appeal.16 In fact, the relevant statute
in this appeal, section 13304, uses both the terms “deposit” and
“discharge” in authorizing the issuance of a CAO. Were these
terms synonymous, there would have been no need for them both
to be used. At least for section 13304, therefore, “deposit” and

16 Section 13350 was created to deter chronic or continuous
violations, i.e., whether a person causes a single oil spill that
continues for multiple days, or separate spills on multiple days.
(Younger, supra, 16 Cal.3d at pp. 43―44.) This deterrent purpose
was best effectuated by imposing liability for each day on which
oil was actually deposited in the waters of the state. (Id. at
p. 44.) In this case, however, section 13304 does not impose a
monetary penalty and its purpose is not simply to deter
continuous or chronic dischargers. Its purpose is to ensure the
effective remediation of discharges of waste that impact or
threaten to impact state waters.

29
“discharge” must be construed as referring to something
different. (See Moyer v. Workmen's Comp. Appeals Bd., supra, 10
Cal.3d at p. 230 [“a construction making some words surplusage
is to be avoided].”)
Nor does the State Board’s definition of discharge to
include the continuous action of passive migration of
contaminants through the soil and into groundwater fail to
harmonize with the federal Comprehensive Environmental
Response Compensation and Liability Act (CERCLA) case law.
CERCLA imposes liability for response costs and damages
associated with certain “releases” or “threatened releases” of
hazardous substances. (42 U.S.C. § 9607(a).) In Carson Harbor
Village, Ltd. v. Unocal Corp. (9th Cir. 2001) 270 F.3d 863, 887
(Carson Harbor), the court held that passive migration of
contaminants through soil is not “disposal” within the meaning of
42 United States Code section 9607(a). That holding, however,
concerned different language appearing in a different statute.
The term “disposal” is entirely absent from section 13304. And,
as with Consumer Advocacy, the court in Carson Harbor
addressed only whether the migration of contaminants through
the soil—in and of itself—was actionable. In CERCLA, the mere
disposal of hazardous substances does not give rise to liability
unless the disposal results in an actual or threatened release into
the environment. (Pakootas v. Teck Cominco Metals, Ltd. (9th
Cir. 2006) 452 F.3d 1066, 1077.) Moreover, to the extent that
CERCLA is relevant to the statutory construction question
presented here, the term “release” as used in that federal
statutory scheme has been interpreted to include the passive
migration of hazardous substances. (Id. at p. 1075.) In Pakootas,
the Ninth Circuit held that the subsequent leaching of hazardous

30
substances into the environment, after the defendant had
disposed of the substances in the Columbia River, was a release
within the meaning of CERCLA. (Id. at pp. 1068―1069.)
The Regional Board’s application of the State Board’s
definition of “discharge” to encompass a continuous process—
from initial leak to the ongoing process of contaminating soils
and groundwater through the process of migration of toxic
chemicals into a plume from pipeline to groundwater—will best
attain the legislative purpose of the Porter-Cologne Act. (See
Select Base Materials v. Board of Equal. (1959) 51 Cal.2d 640,
645 [“The fundamental rule of statutory interpretation is that the
court should ascertain the intent of the Legislature so as to
effectuate the purpose of the law.”].)
The purpose of section 13304 is to authorize a regional
board to issue a CAO to any person “who has caused or permitted
. . . any waste to be discharged or deposited where it is, or
probably will be, discharged into the waters of the state.”
(§ 13304, subd. (a).) As these words amply demonstrate, the
Legislature sought to address the discharge of waste into the
waters of the state—including the groundwater. As the preamble
to the Act states, “[t]he Legislature finds and declares that the
people of the state have a primary interest in the conservation,
control, and utilization of the water resources of the state, and
that the quality of all the waters of the state shall be protected
for use and enjoyment by the people of the state.” (§ 13000.)
The State Board’s interpretation of the term “discharge,” as
referring to the entire flow of the discharged waste from its origin
to the groundwater advances the legislative purpose of protecting
the quality of the water of the state. By contrast, the truncated
construction of discharge proposed by Tesoro, i.e., to focus only on

31
the initial release of the waste, would frustrate the Legislature’s
express intent. By leaving—as is the case here—a plume of
uncontrolled contamination currently threatening the
groundwater of the state unaddressed, Tesoro’s proposed
definition fails to effectuate the purpose of section 13304.17

17 Tesoro’s argument that the legislative history of section
13304 supports a narrow interpretation of “discharge” is based, in
part, on a portion of a letter written by the State Board to the
California Manufacturers Association. That letter sought to
clarify when a “threatened discharge” from runoff from a mine
could be claimed; it offered nothing by way of explanation as to
when a past discharge ended. It is this latter question that is at
issue in this appeal. As for the statement to the Assembly
Committee on Health (ACH), the State Board’s recognition that a
discharge of waste into a small space, such as a ditch, may end
once the waste is poured or dumped in no way conflicts with
discharge being defined to encompass an entire migration of
discharged waste from its origin, through the soil and into and
within groundwater. Where discharges are transitory or have a
broken flow path between the point of discharge and the point of
pollution, it might be argued that current law would not reach
that situation. In the present case, however, the substantial
evidence in the record showed an uninterrupted flow of waste to
groundwater. The Board’s observations to ACH, therefore, have
no application to this case.

32
 DISPOSITION
The judgment is affirmed. Respondent shall recover its
costs on appeal.

CERTIFIED FOR PUBLICATION

JONES, J.*

We concur:

EDMON, P.J.

DHANIDINA, J.

* Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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