Filed 10/19/20
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
LUCINDA MALOTT, as 2d Civ. No. B298730
Successor Trustee, etc., (Super. Ct. No. 18CV01923)
(Santa Barbara County)
Plaintiff and Appellant,
v.
SUMMERLAND SANITARY
DISTRICT,
Defendant and Respondent.
Article XIIID, section 6 of the California Constitution
memorializes Proposition 218 limiting assessments and
property-related fees governmental agencies may impose. After
a public hearing, a sanitary district imposed wastewater disposal
fees. Plaintiff did not attend the hearing but filed an
administrative mandamus petition to challenge the fees under
Proposition 218. The trial court dismissed the petition because
plaintiff did not exhaust her administrative remedies.
Plaintiff should have been given leave to rename her
petition, which was, in essence, a complaint for declaratory relief.
Plaintiff may proceed in her action against the sanitary district to
allege that rates charged residential customers are
disproportionate and unlawful.
Lucinda Malott is successor trustee of the Carol Nantker
Family Trust. She appeals a judgment denying her petition for a
writ of administrative mandamus (Code Civ. Proc., § 1094.5)
against the Summerland Sanitary District (District). 1 She claims
the District imposed an excessive wastewater service charge for
her property “without regard to . . . the proportional cost of
providing Wastewater Service” for her parcel in violation of the
California Constitution.
We conclude, among other things, that the trial court erred
by preventing Malott from presenting evidence from an expert to
support her claims. The court reasoned that the expert’s
evidence was inadmissible as “improper extra-record evidence”
under the administrative remedy exhaustion doctrine because it
had not first been presented at a District public hearing on a rate
increase. We reverse and remand for further proceedings.
FACTS
Malott owns a 30-unit apartment building within the
District. The District provides wastewater collection, treatment
and disposal services for commercial and residential property in
the service area and charges service rates for its customers.
In 2017, the District distributed a notice of public hearing
to property owners for a service rate increase. At a public
hearing in February 2018, the District board approved an
ordinance which, among other things, authorized a 3.5 percent
annual rate increase. Malott did not attend that hearing nor file
a written protest for that hearing.
1 All statutory references are to the Code of Civil Procedure.
2
On April 17, 2018, Malott filed a petition for a writ of
administrative mandamus (§ 1094.5) against the District. She
alleged she was excused from exhausting the administrative
remedy of the public hearing because it was an inadequate
remedy.
Malott alleged the District uses a classification for service
rate fees “for all residential parcels” that are “based upon a
Schedule of Equivalent Dwelling Units” (EDU’s). She claimed,
“The District’s Schedule of EDU’s arbitrarily assigns EDU values
to parcels within the District’s boundaries without regard to: (1)
actual wastewater discharged from the Parcel; nor (2) the
proportional cost of providing Wastewater Service to that parcel.”
She claimed the District’s conduct of calculating rates “based
solely on EDU’s without regard to the proportional cost of the
service attributable to a parcel” violates article XIIID, section 6,
subdivision (b)(3) of the California Constitution.
In September 2018, Malott filed a notice of motion and
motion for judgment on a writ of administrative mandamus.
Included in the motion, among other things, was a declaration of
Lynn Takaichi, an expert on utility and wastewater service rates.
Takaichi’s declaration included facts and an assessment that: 1)
the District’s calculation of fees did not comply with current law;
2) the District improperly placed all residential users, whether
single family homes or residents in multi-unit apartment
buildings, within a single rate EDU category; 3) apartment
buildings containing multiple units use 40 percent lower amounts
of water than the actual water use of single family homes; and 4)
the District was overcharging apartment buildings, such as
Malott’s, and undercharging single-family residences.
3
The District filed a motion to strike Takaichi’s declaration
because it had not been filed at the public hearing.
The trial court granted the motion to strike, finding the
declaration was “improper extra-record evidence.” The court
subsequently denied the petition. It ruled the District’s single
“uniform per-EDU rate for residential customers” was valid. 2
DISCUSSION
The Administrative Remedy Exhaustion Doctrine
Under section 1094.5, “ ‘[t]he general rule is that a hearing
on a writ of administrative mandamus is conducted solely on the
record of the proceeding before the administrative agency.’ ”
(Cooper v. Kizer (1991) 230 Cal.App.3d 1291, 1300.) It is
normally “ ‘ “error for the court to permit the record to be
augmented, in the absence of a proper preliminary foundation . . .
showing . . . one of [the] exceptions [to this rule].” ’ ” (Ibid.)
“ ‘ “Public policy requires a litigant to produce all existing
evidence on his behalf at the administrative hearing . . . .” ’ ”
(Ibid.)
The District contends the administrative exhaustion
doctrine applies here. Because Malott did not attend the public
hearing on the rate increase or present evidence there, Takaichi’s
declaration was properly stricken.
The District’s administrative exhaustion argument
generally applies in a typical administrative hearing before a
public agency. Malott claims the public hearing in question here
is not one that would provide her with an adequate forum to
decide claims concerning the underlying rate structure.
2We grant Malott’s request for judicial notice of official
records of the District.
4
In Plantier v. Ramona Municipal Water Dist. (2019) 7
Cal.5th 372, 376, our Supreme Court stated, “Before a local
governmental agency may impose or increase certain property
related fees and charges, it must notify affected property owners
and hold a public hearing.” This hearing requirement “arises
from article XIIID, section 6 of the California Constitution, which
was added in 1996 by Proposition 218.” (Ibid., fn. omitted.)
Under Proposition 218, the amount of a governmental imposed
fee “shall not exceed the proportional cost of the service
attributable to the parcel.” (Plantier, at p. 382.)
In Plantier, the plaintiffs alleged the method selected by
the water district “does not properly allocate costs among parcels
served.” (Plantier v. Ramona Municipal Water Dist., supra, 7
Cal.5th at p. 382.) None of the plaintiffs “participated in the
Proposition 218 rate increase hearings by either submitting a
written protest or speaking at a hearing.” (Id. at p. 379.) The
water district sought to bar their action for not first exhausting
their administrative remedies.
In Plantier, our Supreme Court asked and answered this
question, “When an agency considers increasing a property-
related fee, must a fee payor challenging the method of fee
allocation first exhaust ‘administrative remedies’ by participating
in a Proposition 218 hearing that addresses only a proposed rate
increase? The answer is no.” (Plantier v. Ramona Municipal
Water Dist., supra, 7 Cal.5th at p. 376.) “Even if a Proposition
218 hearing could be considered an administrative remedy, it
would not provide an adequate remedy for a challenge to the
method used to allocate the fee burden in this case.” (Ibid.) “[A]
Proposition 218 rate increase hearing is not a forum to protest an
existing rate structure . . . .” (Id. at p. 387.)
5
Does Plantier Apply to Section 1094.5
Administrative Mandamus Cases?
The District contends Plantier involved a declaratory relief
action, but this case is distinguishable because it was filed as an
administrative mandamus petition. It argues the administrative
remedy exhaustion doctrine that did not apply in Plantier still
applies here as a matter of law.
But Malott’s election to file a section 1094.5 administrative
mandamus petition, instead of a declaratory relief action, does
not prevent Malott from challenging the District’s residential
rate structure. Here the adage concerning a rose or a duck is apt.
The amicus claims most Proposition 218 utility rate
challenge cases are filed as declaratory relief actions. But
Proposition 218 did not specify a particular type of action to
challenge a utility rate. Its goal was not to restrict challenges,
but rather to liberally facilitate them. “Proposition 218
specifically states that ‘[t]he provisions of this act shall be
liberally construed to effectuate its purposes of limiting local
government revenue and enhancing taxpayer consent.’ ” (Silicon
Valley Taxpayers’ Assn., Inc. v. Santa Clara County Open Space
Authority (2008) 44 Cal.4th 431, 448, italics added.)
Parties challenging governmental actions often do so using
a variety of causes of action, including mandamus, injunctive
relief, or declaratory relief. (Woods v. Superior Court (1981) 28
Cal.3d 668, 672-674; North Pacifica LLC v. California Coastal
Com. (2008) 166 Cal.App.4th 1416, 1428.) There are also two
types of mandamus actions used to challenge governmental
actions – traditional mandamus and administrative mandamus.
(§§ 1085, 1094.5.) In certain cases, both may apply. (Woods, at
pp. 672-674.)
6
The amicus argues that 1) “[t]he only basis for limiting this
case to an ‘administrative record’ seems to be that Malott’s
complaint was mistakenly styled as one for administrative
mandamus,” and 2) this “formality doesn’t change the fact that
the trial court’s finding violated Plantier in both spirit and
letter.” We agree.
Had Malott filed this case as a declaratory relief action, it
would essentially be a Plantier duplicate. Moreover, the
distinction between declaratory relief and mandamus is not
always clear and distinct. Either cause of action may be
appropriate in certain cases.
Where the allegations of the mandamus petition are
sufficient, declaratory relief may be awarded in a mandamus
action. (California Advocates for Nursing Home Reform v. Smith
(2019) 38 Cal.App.5th 838, 904 [a “request for declaratory relief,
which is another form of relief that may be issued in a mandamus
proceeding”]; Colony Cove Properties, LLC v. City of Carson
(2010) 187 Cal.App.4th 1487, 1495, fn. 6; Gong v. City of Fremont
(1967) 250 Cal.App.2d 568, 574; see also Graffiti Protective
Coatings, Inc. v. City of Pico Rivera (2010) 181 Cal.App.4th 1207,
1215 [mandamus combined with a request for declaratory relief
are “appropriate means” to challenge a city’s compliance with
competitive bidding requirements].)
Where a party mistakenly files a section 1094.5 petition,
instead of traditional mandamus (§ 1085) or declaratory relief
causes of action, relief will not be denied where the allegations of
the section 1094.5 petition are sufficient to support the other two
causes of action. (Woods v. Superior Court, supra, 28 Cal.3d at
pp. 672-674.)
7
The request for relief on this petition asks for a ruling that
the District’s method of calculating residential rates is invalid.
This is the type of request for relief that would be appropriate in
a declaratory relief action. A pleading should be judged by the
substance of its allegations rather than its label. (Jaffe v. Carroll
(1973) 35 Cal.App.3d 53, 57.) “ ‘It is an elementary principle of
modern pleading that the nature and character of a pleading is to
be determined from its allegations, regardless of what it may be
called . . . .’ ” (Ibid.) Malott’s pleading and the one in Plantier
share the same basic underlying claim notwithstanding that one
is called declaratory relief and the other mandamus.
Plantier held a party is not required to exhaust an
inadequate administrative remedy. This proposition of law
applies to any cause of action. The public hearing that was ruled
to be inadequate in Plantier is also the same type of public
hearing in this case. The Plantier plaintiffs were not barred from
litigating their challenge to the rate calculation method
notwithstanding their nonappearance at the public hearing. This
also applies to Malott. (City of Oakland v. Oakland Police & Fire
Retirement System (2014) 224 Cal.App.4th 210, 236 [“exhaustion
of administrative remedies is not required where the available
remedy is inadequate”].)
The District’s position that the extra-record exclusion
doctrine must apply because this is a section 1094.5 proceeding
would lead to an injustice because of the inadequate nature of the
administrative remedy. To confine administrative mandamus
petitioners to the administrative record of inadequate
administrative proceedings improperly elevates an exclusionary
rule over their right to have a forum to litigate their claims in
their mandamus actions. (Ogo Associates v. City of Torrance
8
(1974) 37 Cal.App.3d 830, 834-835.) It gives improper deference
to what could be a deficient administrative proceeding while
undermining the court’s authority as the trier of fact.
Moreover, Malott’s mandamus petition alleged adequate
grounds to excuse her failure to exhaust the administrative
remedy of the public hearing. Malott claimed she had no
adequate forum at the public hearing to resolve the evidentiary
issues involved in a challenge to the rate structure. Those
grounds have been confirmed and fortified by the Plantier
decision.
But even in cases where there is an adequate
administrative remedy, where relevant and otherwise admissible
evidence could not be produced there, the administrative
mandamus statute provides a procedure to introduce it in the
mandamus proceeding. (§ 1094.5, subd. (e); Rabago v.
Unemployment Ins. Appeals Board (1978) 84 Cal.App.3d 200,
213.) “Evidence in support of a petition for a writ of mandate can
be produced by affidavit.” (Hand v. Board of Examiners (1977) 66
Cal.App.3d 605, 615.)
Here the trial court recognized its authority to admit
declarations. It admitted Malott’s declaration where she stated
facts about her property, even though it had not been presented
at the public hearing. But it excluded Takaichi’s declaration
because it had not been presented at the public hearing. The
court, however, recognized the relevance of the facts in that
declaration to Malott’s action. It said, “Had Malott provided such
evidence as part of the public hearing, then a reasonable
argument could be made that the District would fail in its burden
to show proportionality . . . .” (Italics added.)
9
Exclusion of Relevant and Admissible Evidence
The trial court erred by striking Takaichi’s declaration. It
was relevant evidence challenging the method the District used
to calculate residential service rates. Malott had a right to make
that challenge even though she did not attend the public hearing.
(Plantier v. Ramona Municipal Water Dist., supra, 7 Cal.5th at
p. 388.) If believed by a trier of fact, the evidence contained in
Takaichi’s declaration or by expert testimony could provide
highly relevant evidence supporting a challenge to the District’s
method of service fee allocation involving single-family homes
and multi-unit apartments, such as Malott’s. Both parties should
be able to present declarations or expert testimony on this issue
on remand.
Takaichi declared, “I am President of and own Water
Consultancy, Inc., a consulting engineering company. Our scope
of services includes utility rate studies and financial evaluations
for sanitary districts to ensure compliance with Article XIIID,
Section 6(b)(3) of the California Constitution, which requires that
a fee must not exceed the proportional cost of service attributable
to the parcel.”
Takaichi said the District used a flawed system of
determining and allocating costs for residential users. All
residential users, whether single family or multi-unit
apartments, are placed “in one customer class” with a flat unit
rate. But charging the same rate for all residential customers
causes significant disparities unrelated to the actual use of these
services by the two types of residences. “[M]ulti-family customers
have significantly lower flow rates than single-family customers.”
A 2018 Water Research Foundation report shows “the annual
average daily water use per dwelling unit of multi-family units
10
[was] approximately 40 percent lower than the water use of
single-family units.” (Italics added.) The District “utilizes 20
commercial customer classes to ensure the fee imposed does not
exceed the proportional cost of service for these customers. The
same cannot be said for residential customers.” Unlike the
District, other nearby wastewater utilities have “multiple
residential customer classes,” including Montecito and Goleta,
and the city of Santa Barbara. A trier of fact accepting Takaichi’s
claims could reasonably find rate payers in apartment units are
being substantially overcharged by the District, while rate payers
in single-family homes are being substantially undercharged.
The Single Residential Rate Issue
The District contends the single residential rate complied
with Proposition 218. Malott contends it violates Proposition
218.
But it is premature for us to decide this issue because
Malott did not have an opportunity to present her expert
evidence. The necessary foundation facts must first be decided by
the trial court after all parties have had a fair opportunity to
present their evidence.
DISPOSITION
The judgment is reversed. The case is remanded to the
trial court so that Malott may present evidence to support her
contentions. Costs on appeal are awarded to appellant.
CERTIFIED FOR PUBLICATION.
GILBERT, P. J.
We concur:
YEGAN, J. TANGEMAN, J.
11
Colleen K. Sterne, Judge
Superior Court County of Santa Barbara
______________________________
The Law Office of Herb Fox and Herb Fox for Plaintiff and
Appellant.
Jonathan M. Coupal, Timothy A. Bittle, and Laura E.
Dougherty for Howard Jarvis Taxpayers Association as Amicus
Curiae on behalf of Plaintiff and Appellant.
Musick, Peeler & Garrett, Gregory J. Patterson, William H.
Hair and Cheryl A. Orr for Defendant and Respondent.
12