Justia California Court of Appeals Opinion Summaries

Articles Posted in Utilities Law
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This is one of several cases involving disputes between Malaga and the agencies involved in issuing and enforcing the permits necessary for Malaga to operate its waste treatment facility. In 2016, the Water Quality Board issued an administrative civil liability complaint (ACL) to Malaga, which resulted in a civil liability penalty of more than $1 million. In proceedings before the trial court, Malaga prevailed on the theory that the hearing procedure document utilized to control the proceedings constituted an improper underground regulation.The Court of Appeal conclude that while portions of the hearing procedure constituted a void underground regulation, the trial court incorrectly remanded the matter without considering whether the use of those procedural regulations was harmless. Therefore, the court remanded the matter to the trial court to determine whether use of the void regulations was prejudicial and, if not, to resolve any further disputes in this matter. View "Malaga County Water District v. Central Valley Regional Water Quality Control Board" on Justia Law

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A city-owned utility charges rates to its customers that do not "exceed the reasonable costs" of providing the utility service, but at the end of each fiscal year, the city routinely invokes its power under the city's charter to, via multiple steps, transfer the "surplus" in the utility's revenue fund—the amount left over after paying all "outstanding demands and liabilities" which, if transferred, will not have a "material negative impact" on the utility's "financial condition" (L.A. Charter, section 344(b))—to the city's general fund. Plaintiff filed suit against the city defendants, alleging that this routine practice by the city constitutes a "tax" that requires voter approval.The Court of Appeal affirmed the trial court's dismissal of the action challenging the practice as being an unlawful "tax." The court held that the city's alleged, ongoing practice of transferring a “surplus” from the DWP's revenue fund to the city's General Fund where, as also alleged, the rates charged by the DWP to its customers nevertheless do not exceed the costs of providing electricity to them, does not constitute a "tax" for three reasons. First, the practice does not satisfy the definition of a "tax" under the plain language of the California Constitution. Second, this conclusion is the one that best accords with the purpose behind the Constitution's restrictions on local taxation, namely to stop local governments from extracting even more revenue from California taxpayers. Third, Citizens for Fair REU Rates v. City of Redding (2018) 6 Cal.5th 1, strongly suggests that the city's yearly transfers of surplus funds do not constitute a "tax" when they do not cause the DWP's rates to exceed its costs of providing electricity. In this case, because plaintiff will be bound in any future amended complaints by the same verified allegations that doom his claims now, the court concluded that he cannot cure these defects by amendment and the trial court properly sustained the demurrer without leave to amend. View "Humphreville v. City of Los Angeles" on Justia Law

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Environmental groups challenged the constitutionality of Public Resources Code section 25531, which limits judicial review of decisions by the Energy Resources Conservation and Development Commission on the siting of thermal power plants. Section 25531(a) provides that an Energy Commission siting decision is “subject to judicial review by the Supreme Court of California.” The plaintiffs contend this provision abridges the original jurisdiction of the superior courts and courts of appeal over mandate petitions, as conferred by California Constitution Article VI, section 10. Section 25531(b) provides that findings of fact in support of a Commission siting determination “are final,” allegedly violating the separation of powers doctrine by depriving courts of their essential power to review administrative agency findings (Cal. Const., Art. III, section 3; Art. VI, section 1).The court of appeal affirmed summary judgment in favor of the plaintiffs. The Article VI grant of original jurisdiction includes the superior courts and courts of appeal and may not be circumscribed by statute, absent some other constitutional provision. Legislative amendments to section 25531 have broken the once-tight link between the regulatory authority of the Public Utilities Commission (PUC) and Energy Commission power plant siting decisions, such that the plenary power Article XII grants the Legislature over PUC activities no longer authorizes section 25531(a). Section 25531(b) violates the judicial powers clause by preventing courts from reviewing whether substantial evidence supports the Commission’s factual findings. View "Communities for a Better Environment v. Energy Resources Conservation & Development Commission" on Justia Law

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Proposition 218, the Right to Vote on Taxes Act, generally required local governments obtain voter approval prior to imposing taxes. Plaintiffs Jess Willard Mahon, Jr. and Allan Randall brought this certified class action against the City of San Diego (City) claiming that the City violated Proposition 218 by imposing an illegal tax to fund the City’s undergrounding program. Specifically, plaintiffs contended the City violated Proposition 218 through the adoption of an ordinance that amended a franchise agreement between the City and the San Diego Gas & Electric Company (SDG&E). The ordinance, together with a related memorandum of understanding, further specifies that part of the money to fund the undergrounding budget will be collected by SDG&E through a 3.53 percent surcharge on ratepayers in the City that will be remitted to the City for use on undergrounding (Undergrounding Surcharge). Plaintiffs claim that the surcharge is a tax. Plaintiffs further claim that the surcharge violates Proposition 218 because it was never approved by the electorate. Plaintiffs note that the City has imposed more than 200 million dollars in charges pursuant to the Undergrounding Surcharge during the class period. Through this action, plaintiffs seek a refund of those amounts, among other forms of relief. The City moved for summary judgment, which the trial court granted on two grounds: (1) the Undergrounding Surcharge constituted compensation for franchise rights and thus was not a tax; alternatively, (2) the Undergrounding Surcharge was a valid regulatory fee and not a tax. After review, the Court of Appeal concluded the trial court properly granted the City’s motion for summary on the ground that the Undergrounding Surcharge was compensation validly given in exchange for franchise rights and thus, was not a tax subject to voter approval. View "Mahon v. City of San Diego" on Justia Law

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The California State Lands Commission and Aspen American Insurance Company filed suit against Plains Pipeline and its affiliate, alleging that when Plains's negligent maintenance of a pipeline resulted in disrupting the flow of oil, it also disrupted the payment of royalty income to the Commission, and caused damage to improvements on the Commission's land.The Court of Appeal reversed the trial court's judgment in favor of Plains, holding that Plains is not exempt from liability for the interruption in service. The court explained that no statute grants immunity to public utilities and whether immunity applies is a question of judicial policy. In this case, Plains does not deliver essential municipal services to members of the general public and, although it is called a public utility, it is a private business, entitled to no more immunity from liability than any ordinary private business. The court also held that the complaint alleges sufficient facts to show a special relationship between the parties that allows the Commission to recover purely economic damages. As for the reverse condemnation claim raised for the first time on appeal, the court noted that the proper procedure is to make any motion to amend in the trial court in the first instance. View "State Lands Commission v. Plains Pipeline, L.P." on Justia Law

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The Riverside County Transportation Commission (Commission) sought to extend its Metrolink commuter rail line from Riverside to Perris, using the route of a preexisting rail line that it had acquired. At five points, however, the new rail line would cross gas pipelines owned by the Southern California Gas Company. The Gas Company had installed these pipelines under city streets decades earlier, pursuant to franchises granted by the relevant cities and, in some instances, pursuant to licenses granted by the then-owner of the preexisting rail line. The new rail line could not be built as long as the pipelines remained in place. The Commission terminated the licenses and demanded that the Gas Company relocate its pipelines at its own expense. The parties agreed that the Gas Company would relocate its pipelines, to other points also owned by the Commission, and the Commission would pay the estimated expenses, but only provisionally; the Commission could still sue for reimbursement, and the Gas Company could then sue for any additional expenses. The trial court ruled that the Gas Company had to bear all of the costs of relocation; however, it also ruled that the Gas Company had never trespassed on the Commission’s land. Both sides appealed. After review, the Court of Appeal held the Gas Company did have to bear all of the costs of relocation. However, the Court also held that, at those points where the Gas Company held licenses for its pipelines, once the Commission terminated the licenses, the Gas Company could be held liable for trespass. View "Riverside County Transportation Comm. v. Southern Cal. Gas Co." on Justia Law

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Ten small telephone companies sought review of a California Public Utilities Commission (Commission) resolution and decision declining to issue certain funding to Siskiyou Telephone Company (Siskiyou) and Volcano Telephone Company (Volcano). The telephone companies claimed the resolution and decision departed from well-established requirements governing the issuance of funding from the California High Cost Fund A (CHCF-A). Although the Court of Appeal rejected the telephone companies’ assertion that certain adjustments were mandatory, it agreed with them that the Commission’s resolution and decision did not conform to applicable rules. Accordingly, the Court annulled portions of the resolution and decision denying Siskiyou and Volcano’s adjustment requests for 2016 nonrecurring revenue impacts, and remanded the matter for further proceedings. View "Calaveras Telephone Company v. Public Utilities Commission" on Justia Law

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Petitioners, three rural telephone companies, challenged the Commissions' decision establishing petitioners' "cost of capital," which reflects a company's cost of generating or obtaining capital investment in assets that provide utility services to customers. Petitioners alleged that the Commission failed to adequately consider certain risks that exist for investing in small, rural telephone companies, and therefore the cost of capital was set at an unreasonably low level, resulting in a confiscatory rate of return.The Court of Appeal affirmed the trial court's judgment, holding that petitioners failed to meet their burden of demonstrating that the Commission's cost of capital determination was arbitrary, capricious, lacking in any evidentiary support, or that it otherwise fell short of constitutional standards regarding a reasonable rate of return. View "Ponderosa Telephone Co. v. California Public Utilities Commission" on Justia Law

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After years of investigation, the San Diego Regional Water Quality Control Board (Regional Board), issued a cleanup and abatement order (CAO) to San Diego Gas & Electric Company (SDG&E) and several other entities, in connection with a power plant’s operations that discharged waste into the San Diego Bay. The Regional Board found that SDG&E caused or permitted waste to be discharged into the Bay and thereby created, or threatened to create, pollution and nuisance conditions. SDG&E contested its designation as a responsible "person" under Water Code section 13304 (a), and petitioned for a writ of mandate to have the CAO vacated. The superior court denied the writ. SDG&E argued then, as it did before the Court of Appeal, that shipyard companies comparatively discharged greater amounts of pollutants into the Bay and that two appellate opinions required application of the "substantial factor" causation test to determine whether SDG&E created or threatened to create a condition of pollution or nuisance. The Court of Appeal found it was undisputed that SDG&E directly discharged and thus "caused or permitted" waste to enter the Bay, distinguishing the aforementioned appellate cases. Further, the Regional Board adequately demonstrated that the waste discharged by SDG&E created, or threatened to create, a condition of pollution or nuisance. Accordingly, the Court affirmed the judgment. View "San Diego Gas & Electric Co. v. San Diego Regional Water etc." on Justia Law

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Uber is a “transportation networking company” (TNC) regulated by the California Public Utility Commission (CPUC). All TNCs must submit annual reports to the CPUC, containing specified data, and file an annual accessibility plan. After receiving numerous complaints from the San Francisco Municipal Transportation Agency regarding illegal parking, traffic congestion, and safety hazards caused by TNC vehicles, the city attorney opened an investigation into possible violations of state and municipal law by TNCs, including Uber. The city attorney issued the administrative subpoenas to Uber, including a request for: Annual Reports filed by Uber with CPUC, 2013-2017 and all of the raw data supporting those reports on providing accessible vehicles, driver violations/suspensions, number of drivers completing training courses, updates on accessibility plans, report on hours/miles logged by drivers, and providing service by zip code. Uber refused to comply, arguing that the CPUC had primary jurisdiction. The court of appeal affirmed a trial court order that Uber produce the reports. It was within the city attorney’s investigative powers to issue the administrative subpoenas. Public Utilities Code section 1759 did not deprive the trial court of jurisdiction and the primary jurisdiction doctrine did not apply to postpone enforcement of the administrative subpoenas. View "City and County of San Francisco v. Uber Technologies, Inc." on Justia Law