Miner's Camp v. Foresthill Public Utility Dist. CA3 ( 2022 )

Filed 6/23/22 Miner’s Camp v. Foresthill Public Utility Dist. CA3
NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Placer)
----
MINER’S CAMP, LLC,
Plaintiff and Respondent, C088828
v. (Super. Ct. No. SCV0039661)
FORESTHILL PUBLIC UTILITY DISTRICT,
Defendant and Appellant.
Foresthill Public Utility District (District) provides water service to customers in
1
the unincorporated community of Foresthill, California. In 2014, the District provided
notice of a public hearing to consider water rate increases. There were 242 written
protests to the proposed rate increases but the protests did not constitute a majority of the
identified parcel owners affected, and the District approved the rate increases following
the public hearing.
Miner’s Camp, LLC (Miner’s Camp) acquired properties served by the District in
2015. Miner’s Camp sent an objection to the District that it was being charged as if
multiple water meters served its properties when in fact each property was served by only
one water meter. Miner’s Camp subsequently presented a government claim to the
District. The District rejected the claim, and Miner’s Camp filed suit against the District,
alleging that the rate increases the District adopted in 2014 were based on a rate structure
that violated article XIII D of the California Constitution.1 The trial court granted
judgment in favor of Miner’s Camp and against the District.
The District now contends (1) although Miner’s Camp filed a government claim in
2017, its failure to participate in the rate increase hearings in 2014 constituted a failure to
fully exhaust administrative remedies; (2) Miner’s Camp’s action was barred by the
statute of limitations in Government Code section 66022; (3) the trial court had no
jurisdiction over the action because Miner’s Camp did not comply with the validation
procedures mandated by Government Code section 66022; (4) Health and Safety Code
section 5472 required Miner’s Camp to pay the challenged fees under protest and its
failure to do so barred any monetary recovery; and (5) the trial court erred in awarding
attorney’s fees to Miner’s Camp under Code of Civil Procedure section 1021.5.
Consistent with the analysis in Plantier v. Ramona Municipal Water Dist. (2019)
7 Cal.5th 372 (Plantier), Miner’s Camp was not required to participate in the 2014 rate
1 Undesignated article references are to the California Constitution.
2
increase hearing before challenging the method by which the District allocated fees. In
addition, the District has not established that Government Code section 66022, the
validation procedures, or Health and Safety Code section 5472 apply to this action. And
the District fails to demonstrate error in the award of attorney’s fees to Miner’s Camp.
Accordingly, we will affirm the judgment.
BACKGROUND
A
Proposition 13 restricted the ability of state and local governments to impose taxes
but local governments circumvented those limitations by labeling increases in rates for
services as fees, charges or assessments rather than taxes. (Plantier, supra, 7 Cal.5th at
380-381; Valley Baptist Church v. City of San Rafael (2021) 61 Cal.App.5th 401, 421;
Silicon Valley Taxpayers’ Assn. v. Garner (2013) 216 Cal.App.4th 402, 406.) In 1996,
voters passed Proposition 218, known as the “Right to Vote on Taxes Act,” to fill in
perceived loopholes in Proposition 13. (Voter Information Guide, Gen. Elec. (Nov. 5,
1996) text of Prop. 218, § 1, p. 108; Paland v. Brooktrails Township Community Services
Dist. Bd. of Directors (2009) 179 Cal.App.4th 1358, 1365 (Paland).) The Findings and
Declaration section of Proposition 218 stated that local governments had subjected
taxpayers to excessive tax, assessment, fee and charge increases, and Proposition 218
would protect taxpayers by limiting the methods by which local governments exacted
revenue without their consent. (Voter Information Guide, text of Prop. 218, §§ 3-4,
pp. 108-109.) The electorate intended the provisions of Proposition 218 to “be liberally
construed to effectuate its purposes of limiting local government revenue and enhance
taxpayer consent.” (Id., § 5, p. 109.)
Proposition 218 added articles XIII C and XIII D to the California Constitution.
(Voter Information Guide, Gen. Elec., supra, text of Prop. 218, pp. 108-109.) Article
XIII C relates to voter approval for local taxes other than property taxes. (Plantier,
supra, 7 Cal.5th at p. 381.) Article XIII D specifies restrictions and requirements for
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property-related assessments, fees and charges. (Richmond v. Shasta Community
Services Dist. (2004) 32 Cal.4th 409, 415.) “Fee” or “charge” are synonymous and mean
any levy, other than an ad valorem tax, a special tax or an assessment, imposed by a local
government entity on a parcel or a person as an incident of property ownership, including
a charge for a property-related service. (Art. XIII C, § 1, subd. (b); art. XIII D, § 2,
subds. (a), (e).) Fees for water service are charges for a property-related service. (Voter
Information Guide, Gen. Elec., supra, Legis. Analyst’s analysis, p. 73; Richmond, at
pp. 426-427; Bighorn-Desert View Water Agency v. Verjil (2006) 39 Cal.4th 205, 217
(Bighorn); City of Palmdale v. Palmdale Water Dist. (2011) 198 Cal.App.4th 926, 934;
Paland, supra, 179 Cal.App.4th at pp. 1371-1372.)
Article XIII D section 6 imposes procedural and substantive limitations for
imposing or increasing a property-related fee. The local government entity must mail
written notice of the proposed fee to the record owner of each identified parcel upon
which the proposed fee is to be imposed. (Art. XIII D, § 6, subd. (a).) The notice must
explain the amount of the proposed fee, the basis upon which the amount of the proposed
fee was calculated, the reason for the fee, and the date, time, and location of a public
hearing on the proposed fee. (Ibid.) The local government entity must conduct a public
hearing on the proposed fee not less than 45 days after mailing the notice. (Ibid.) It must
consider all protests against the proposed fee at the hearing. (Ibid.) It may not impose
the fee if written protests against the proposed fee are presented by a majority of the
identified parcel owners. (Ibid.) Except for fees for sewer, water, and refuse collection
services, no property-related fee may be imposed or increased unless and until that fee is
submitted and approved by a majority vote of owners of properties subject to the fee or,
at the option of the local government entity, by a two-thirds vote of the electorate residing
in the affected area. (Id., § 6, subd. (c); Bighorn, supra, 39 Cal.4th at pp. 218-219;
Paland, supra, 179 Cal.App.4th at p. 1366.)
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Section 6, subdivision (b) of article XIII D sets forth the substantive requirements
for existing, new or increased fees. A local government entity cannot extend, impose or
increase a fee unless all of the following requirements are met: (1) revenues derived
from the fee do not exceed the funds required to provide the property-related service;
(2) revenues derived from the fee are not used for any purpose other than that for which
the fee is imposed; (3) the amount of the fee does not exceed the proportional cost of the
service attributable to the parcel; (4) no fee is imposed for a service unless that service is
actually used by or immediately available to the owner of the property in question; and
(5) no fee is imposed for general governmental services including, but not limited to,
police, fire, ambulance or library services, where the service is available to the public at
large in substantially the same manner as it is to property owners. (art. XIII D, § 6,
subd. (b).)
B
Miner’s Camp acquired the Racetrack Street and Foresthill Road properties in
Foresthill, California, in June 2015. The Racetrack Street property had eight cabins that
Miner’s Camp intended to use as a hotel or motel. The cabins were served by a single
water meter. The Foresthill Road property had a commercial building with two units,
also served by a single water meter.
In September 2015, Miner’s Camp sent an objection to the District about being
charged more “minimum charges” for water service than the number of water meters on
the Racetrack Street and Foresthill Road properties. The District agreed to correct the
account for the Foresthill Road property but denied Miner’s Camp’s request with regard
to the Racetrack Street property and directed staff to collect all past due amounts on the
Racetrack Street account. Miner’s Camp subsequently presented the District with a
written claim with regard to water service charges for the Racetrack Street and Foresthill
Road properties pursuant to Government Code section 910 et seq. The District rejected
the claim.
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Within six months of the notice of the District’s rejection of the Government Code
section 910 et seq. claim, Miner’s Camp filed a complaint for damages and petition for
writ of mandate against the District. Miner’s Camp alleged that the water rate increase
the District adopted in 2014 was based on a rate structure that assumed certain properties
had more than one water meter serving the property even when there was only one
water meter, and that such a rate structure violated article XIII D because the District
(1) charged fees that exceeded the funds required to provide Miner’s Camp’s properties
water service; (2) derived revenue from the fees that were used for a purpose other than
that for which the fee was imposed; (3) charged fees that exceeded the proportional cost
of the service attributable to the parcels owned by Miner’s Camp; (4) charged fees for a
service that was not actually used by or immediately available to Miner’s Camp on its
properties; and (5) charged fixed water rates that were based on the recovery of costs,
including payment for the repair, replacement, operation and maintenance of “phantom
meters,” when those costs were not incurred and did not relate to the District’s
performance of any service. Miner’s Camp sought a declaration of the parties’ rights
and responsibilities and that it was entitled to a refund, an injunction prohibiting the
continued use of the water rate structure and a writ of mandate compelling the District
to comply with article XIII D.
The District moved for judgment on the pleadings, but the trial court denied the
motion. Following the submission of briefs and a hearing, the trial court granted
judgment in favor of Miner’s Camp and against the District and entered a peremptory
writ of mandate against the District. The trial court concluded that the District’s water
rate structure violated Proposition 218 in that customers such as Miner’s Camp were
charged for meter maintenance and accounting on a unit-by-unit basis when multi-unit
properties like Miner’s Camp’s were served by a single service connection; therefore, the
charges imposed on Miner’s Camp exceeded the funds required to provide water service,
were necessarily used for a purpose other than that for which the charge was imposed,
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and exceeded the cost of service attributable to Miner’s Camp’s properties. The trial
court again rejected the District’s affirmative defenses. It declared that the District’s
water rate structure violated article XIII D and ordered the District to make restitution to
Miner’s Camp. It enjoined the District from billing and collecting fees imposed in
violation of article XIII D and issued a peremptory writ of mandate requiring the District
to abandon its rate structure and to create a new rate structure that conforms with article
XIII D. The District appealed from the judgment.
Miner’s Camp filed a motion for attorney’s fees under Code of Civil Procedure
section 1021.5, seeking $188,806.50 in fees. The trial court awarded Miner’s Camp
$89,500 in attorney’s fees and $60 in costs. The District also appealed from the
attorney’s fee order. This Court ordered the appeals consolidated.
We granted leave to file amicus curiae briefs to the Howard Jarvis Taxpayers
Association, Association of California Water Agencies, California Special Districts
Association, California State Association of Counties, League of California Cities, and
Mountain Counties Water Resources Association, and we have considered those briefs.
We deny Miner’s Camp’s motion for calendar preference and we also deny the District’s
motion to strike.
DISCUSSION
I
The District contends Miner’s Camp’s failure to exhaust administrative remedies
barred any right to recovery. The District suggests it was not enough for Miner’s Camp
to submit its 2017 government claim; Miner’s Camp should have opposed or challenged
the District’s ratemaking decision during the 2014 public process.
We determine de novo whether the doctrine of exhaustion of administrative
remedies applies in a case. (Plantier, supra, 7 Cal.5th at p. 380; Defend Our Waterfront
v. State Lands Com. (2015) 240 Cal.App.4th 570, 580.) “Generally, ‘a party must
exhaust administrative remedies before resorting to the courts. [Citations.] Under this
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rule, an administrative remedy is exhausted only upon “termination of all available,
nonduplicative administrative review procedures.” ’ [Citations.] ‘The rule “is not a
matter of judicial discretion, but is a fundamental rule of procedure . . . binding upon all
courts.” ’ ” (Plantier, supra, 7 Cal.5th at pp. 382-383.) Nevertheless, the rule requiring
exhaustion of administrative remedies is subject to exceptions. (Id. at p. 384; Bollengier
v. Doctors Medical Center (1990) 222 Cal.App.3d 1115, 1126.)
The California Supreme Court’s decision in Plantier guides our analysis of
exhaustion in this case. In Plantier, the Ramona Municipal Water District calculated a
parcel’s annual sewer charge by multiplying the parcel’s assigned Equivalent Dwelling
Unit (EDU) by the applicable “per-EDU rate.” (Plantier, supra, 7 Cal.5th at p. 377.)
The nature of a parcel’s use (for example, residential versus commercial use and category
of commercial use) determined the number of EDUs assigned to the parcel, and EDU
assignment was different from the “per-EDU rate,” which was the same for all parcels.
(Id. at pp. 376-377.) In various years, the water district sent notices of proposed rate
increases to its customers pursuant to Proposition 218. (Ibid.) The notices stated that the
property owner or tenant directly responsible for the payment of sewer fees could submit
a written protest to the proposed increases. (Ibid.) None of the plaintiffs in Plantier
participated in the Proposition 218 rate increase hearings and the water district did not
receive any written protest raising an objection to the EDU-assignment method during the
Proposition 218 proceedings. (Id. at pp. 378-379.)
Separately, however, in 2012, the water district determined that the EDUs
assigned to Eugene Plantier’s restaurant should be increased to a number more
appropriate for the property’s size and use. (Plantier, supra, 7 Cal.5th at p. 378.) The
water district notified Plantier that the EDUs assigned to his property would be increased,
resulting in a fee increase. (Ibid.) Plantier objected, and along with other commercial
property owners, filed an administrative claim that the water district denied. (Ibid.) The
plaintiffs then sued the water district, alleging the EDU assignment method violated
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Proposition 218. (Ibid.) The water district countered that although the plaintiffs had
exhausted one administrative remedy by filing an administrative claim, Proposition 218
imposed another exhaustion requirement (participation in the prior rate increase hearings)
that the plaintiffs had not satisfied. (Id. at p. 379.) The California Supreme Court
ultimately held that a fee payer challenging the method of fee allocation need not exhaust
administrative remedies by participating in Proposition 218 hearings addressing only
proposed rate increases. (Plantier, at p. 376.)
In this case, the District’s exhaustion of administrative remedies defense is based
on the notice of a June 25, 2014 public hearing (the Notice). Like the water district in
Plantier, the District provided notice that it was considering rate increases. The Notice
explained that water service utility bills were calculated by adding a fixed rate based on
the size of the water meter serving the customer’s property and a commodity rate based
on the amount of water used during the billing period. The Notice set forth the amount of
the proposed fixed rate increases for different types of meters/accounts. The Notice
contained directions on how to oppose the proposed rate increases. It did not state that at
the June 25, 2014 hearing the District would consider changing how it classified multi-
unit customers served by a single water meter for purposes of calculating the fees for
those customers.
The District contends Plantier is distinguishable because Miner’s Camp is
challenging the proposed rates set forth in the Notice. But the record does not support the
contention. Although Miner’s Camp’s government claim said the date and place of the
event giving rise to the claim was the District’s adoption of Resolution 14-06 on June 25,
2014, approving water rate increases that violated Proposition 218, the claim and
complaint for damages expressly refer to the water rate structure. Miner’s Camp asserted
that the District charged the Racetrack Street property as if there were eight water meters
instead of one for the eight cabins and charged the Foresthill Road property as if there
were two water meters instead of one. Miner’s Camp argued that because there was only
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one water meter at each property, the District should not have classified and charged the
properties multi-service rates. Like in Plantier, the essence of Miner’s Camp’s challenge
was to the method of fee allocation, not the rate increases.
Although the District says Miner’s Camp did not establish that it proceeded
through the District’s administrative process, the District does not describe the
administrative process with which Miner’s Camp should have complied. In any event,
Miner’s Camp submitted a written objection and then presented a written Government
Code section 910 et seq. claim before it filed its lawsuit. That claim provided the District
with notice and an opportunity to resolve Miner’s Camp’s disputes prior to litigation.
Consistent with the analysis in Plantier, Miner’s Camp was not required to participate in
the 2014 rate increase hearing before challenging the method by which the District
allocated fees.
Hill RHF Housing Partners, L.P. v. City of Los Angeles (2021) 12 Cal.5th 458,
a case the District cited pursuant to rule 8.254 of the California Rules of Court, does not
require a different result. Even if the 2014 public process provided “ ‘clearly defined
machinery for the submission, evaluation and resolution of complaints by aggrieved
parties’ ” such that it would be proper to infer an exhaustion requirement (id. at p. 469,
see id. at pp. 481-482), the Notice did not inform the public that the District would
consider, at the 2014 hearing, how it classified multi-unit customers served by a single
water meter for purposes of calculating fees.
Under the circumstances, we need not consider the District’s contentions
regarding futility, and we deny the District’s request to reconsider our ruling on its
request for judicial notice.
II
The District next urges that Miner’s Camp’s action is barred by the statute of
limitations in Government Code section 66022.
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We review de novo whether a claim is barred by a statute of limitations. (Lincoln
Unified School Dist. v. Superior Court (2020) 45 Cal.App.5th 1079, 1090; see
International Engine Parts, Inc. v. Feddersen & Co. (1995) 9 Cal.4th 606, 611
[application of statute of limitations to undisputed facts is question of law].) The
defendant bears the initial burden of proving that the plaintiff’s claims are time-barred.
(Luke v. Sonoma County (2019) 43 Cal.App.5th 301, 305.)
Government Code section 66022, subdivision (a) provides, in pertinent part: “Any
judicial action or proceeding to attack . . . an ordinance, resolution, or motion adopting a
new fee or service charge, or modifying or amending an existing fee or service charge,
adopted by a local agency . . . shall be commenced within 120 days of the effective date
of the ordinance, resolution, or motion.” The limitations period in Government Code
section 66022 applies only to new or modified “fees, capacity charges, and service
charges described in and subject to [Government Code] Sections 66013, 66014, and
66016.” (Gov. Code, § 66022, subd. (c).) The District states that Miner’s Camp did not
file its lawsuit within 120 days of the effective date of Resolution No. 14-06, in which the
District’s board of directors approved and adopted the proposed rate increases set forth in
the Notice. The question is whether the proposed rate increases are “fees, capacity
charges, and service charges described in and subject to [Government Code] Sections
66013, 66014, and 66016” such that Government Code section 66022 is applicable.
The District claims the fees Miner’s Camp challenges are “capacity charges”
within the meaning of Government Code section 66013.2 A “capacity charge” is “a
charge for public facilities in existence at the time a charge is imposed or charges for new
public facilities to be acquired or constructed in the future that are of proportional benefit
to the person or property being charged, including supply or capacity contracts for rights
2 The District does not claim that Government Code section 66014 or 66016 apply so we
do not discuss those statutes.
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or entitlements, real property interests, and entitlements and other rights of the local
agency involving capital expense relating to its use of existing or new public facilities.
A ‘capacity charge’ does not include a commodity charge.” (Gov. Code, § 66013,
subd. (b)(3).) “Public facilities” include public improvements. (Gov. Code, §§ 66000,
subd. (d), 66013, subd. (b)(6).)
The District points to the Notice, Resolution No. 14-06, and the 2014 water study
purportedly supporting the proposed fees in the Notice, to argue that the challenged fees
contained charges for public improvements. The Notice stated that the proposed rate
increases were designed to fund expenses including capital costs. It explained that repair
and replacement funds had to be increased to complete infrastructure rehabilitation
projects which may include the Sugar Pine Dam transmission line and other projects.
The Notice showed that the fixed rate component of monthly water service bills included
funds for “Repair & Replacement.” The water study likewise stated: “The water rates
need to cover current budgeted operating expenses and projected on-going maintenance,
capital costs and depreciation.” But neither the Notice nor the water study shows what
part of the proposed rates, if any, was for existing or new public facilities or
improvements. Resolution No. 14-06 stated that the District needed to increase water
rates to fund operations, maintenance, repairs, debt obligation and a reserve fund and did
not mention capital costs or public improvements or facilities.
In KCSFV I, LLC v. Florin County Water Dist. (2021) 64 Cal.App.5th 1015(KCSFV I), the plaintiffs challenged a water district’s rate increase under Proposition
218. (Id. at p. 1025.) The water district argued that the plaintiffs’ action was untimely
under Government Code section 66022. (KCSFV I, at pp. 1031-1032.) On the question
whether the rate increase included a capacity charge within the meaning of Government
Code section 66013, the water district relied on a statement in its notice of hearing and a
chart presented at the rate increase hearing. (KCSFV I, at p. 1032.) The notice stated,
“ ‘[t]he rate increases are being proposed in order to provide sufficient revenue to pay for
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the increasing costs of maintenance and operation of the District’s water system, also to
provide funding for physical plant and distribution system replacement.’ ” (Ibid.) The
chart contained a “ ‘capital expense’ ” line item. (Id. at p. 1033.) Another panel of this
Court concluded that the water district failed to produce sufficient evidence to establish
that any portion of the rate increase was a capacity charge under Government Code
section 66013, subdivision (b)(3). (KCSFV I, at p. 1033.) This was because there was no
evidence in the record to support the conclusory assertion in the notice of hearing that a
portion of the rate increase would provide funding for physical plant and distribution
system replacement. (Ibid.) And the “ ‘capital expense’ ” line item on the chart did not
show that a portion of the rate increase was a charge for public facilities. (Ibid.) Instead,
the chart lumped together categories of expense and capital expense. (Ibid.) The
information in the Notice and water study in this case have the same shortcomings.
We conclude that even if the capital cost portion of a water rate can constitute a
capacity charge within the meaning of Government Code section 66013, the District fails
to establish that the rates adopted in Resolution No.14-06 actually included a charge for
existing or new public facilities. Because the District failed to prove that the fees Miner’s
Camp challenged were “fees, capacity charges, and service charges described in and
subject to [Government Code] Sections 66013, 66014, and 66016,” the District fails to
demonstrate that Government Code section 66022 is applicable.
Utility Cost Management v. Indian Wells Valley Water Dist. (2001) 26 Cal.4th
1185, Utility Cost Management v. East Bay Mun. Utility Dist. (2000) 79 Cal.App.4th
1242, and Regents of University of California v. City and County of San Francisco (2004)
115 Cal.App.4th 1109 -- cases the District cites -- do not help the District. The first two
cases involved actions brought under Government Code section 54999.4 for the refund of
“ ‘capital facilities fees.’ ” The challenged fees in those cases were clearly fees charged
to defray the cost of “capital improvements.” (Indian Wells Valley Water Dist., at pp.
1187-1188, 1192; East Bay Mun. Utility Dist., at pp. 1245-1246, 1248.) As we have
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explained, the District did not show that the fees here included a charge for capital costs
or public improvements or facilities. The issue in Regents was whether the Government
Code section 66022 limitations period was triggered by the passing of a resolution
increasing water and sewer rates or by the passing of an annual budget resolution.
(Regents, at p. 1110.) The appellate court did not discuss whether the challenged rates
constituted or included a capacity charge.
Citing Paland, supra, 179 Cal.App.4th 1358, the District also contends that the
challenged fees constitute a service charge under Government Code section 66022.
KCSFV I rejected the identical argument. (KCSFV I, supra, 64 Cal.App.5th at pp. 1031-
1033.) We do the same. The issue in Paland was whether the minimum monthly water
and sewer base rates in that case were a property assessment or a property-related fee
under article XIII D. (Paland, at pp. 1364-1365.) Paland did not consider whether fees
were a service charge under Government Code section 66022. Cases are not authority for
propositions not considered. (KCSFV I, at p. 1032.) The District does not cite any other
authority supporting its claim that its fees were a service charge under Government Code
section 66022.
III
The District further argues that because the record contains no evidence Miner’s
Camp complied with the validation procedures mandated by Government Code
section 66022, the trial court lacked jurisdiction over this action.
Any action by an interested person under Government Code section 66022 must
be brought pursuant to the validation procedures in Code of Civil Procedure section 860
et seq. (Gov. Code, § 66022, subd. (b).) For reasons we have stated, the District failed to
demonstrate that Government Code section 66022 applies to Miner’s Camp’s action.
Therefore, we reject the District’s validation procedures claim.
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IV
The District also argues Health and Safety Code section 5472 required Miner’s
Camp to pay the challenged rates under protest and its failure to do so barred any
monetary recovery.
Health and Safety Code section 5472 is in an article of the Health and Safety Code
entitled “Sanitation and Sewerage Systems.” Section 5472 states, “After fees . . . or
other charges are fixed pursuant to this article, any person may pay such fees . . . or other
charges under protest and bring an action against the city or city and county in the
superior court to recover any money which the legislative body refuses to refund.
Payments made and actions brought under this section, shall be made and brought in the
manner provided for payment of taxes under protest and actions for refund thereof in
Article 2, Chapter 5, Part 9, of Division 1 of the Revenue and Taxation Code, insofar as
those provisions are applicable.” With regard to the fixing of fees, Health & Safety Code
section 5471 authorizes “any entity . . . , by an ordinance or resolution approved by a
two-thirds vote of the members of the legislative body thereof, to prescribe, revise and
collect, fees . . . or other charges for services and facilities furnished by it, either within
or without its territorial limits, in connection with its water, sanitation, storm drainage, or
sewerage system.” (Health & Saf. Code, § 5471, subd. (a).) “Entity” includes “districts
authorized to acquire, construct, maintain and operate sanitary sewers and sewerage
systems.” (Health & Saf. Code, § 5470, subd. (e).)
Citing Public Utilities Code section 16461, the District urges that it is an “entity”
within the meaning of Health and Safety Code section 5470. In particular, the District
asserts that Health and Safety Code section 5472 applies because the District is a public
utility district and a public utility district is generally authorized to operate sewer
systems. Public Utility Code section 16461 provides, “A district may acquire, construct,
own, operate, control, or use, within or without or partly within and partly without the
district, works for supplying its inhabitants with light, water, power, heat, transportation,
15
telephone service, or other means of communication, or means for the disposition of
garbage, sewage, or refuse matter, and may do all things necessary or convenient to the
full exercise of the powers granted in this article.” “District” means a public utility
district formed pursuant to the Public Utility District Act (Pub. Util. Code, § 15501 et
seq.). (Pub. Util. Code, § 15503.)
A public utility district has the power to carry out only those particular functions
committed to it. (In re Orosi Public Utility Dist. (1925) 196 Cal. 43, 54-57.) The record
indicates that the District provided water service to its customers. Nothing in the record
shows that the District acquired, constructed, maintained and operated sanitary sewers
and sewerage systems or was authorized to do so. The District fails to show the grant of
any such power. It has, therefore, failed to establish that the requirements of Health and
Safety Code section 5472 apply to this action.
V
The District also contends the trial court erred in awarding attorney’s fees to
Miner’s Camp under Code of Civil Procedure section 1021.5.
Code of Civil Procedure section 1021.5 provides that a trial court “may award
attorney’s fees to a successful party . . . in any action which has resulted in the
enforcement of an important right affecting the public interest if: (a) a significant benefit,
whether pecuniary or nonpecuniary, has been conferred on the general public or a large
class of persons, (b) the necessity and financial burden of private enforcement . . . are
such as to make the award appropriate, and (c) such fees should not in the interest of
justice be paid out of the recovery, if any.” The party requesting Code of Civil Procedure
section 1021.5 fees must prove all elements of the statute. (Millview County Water Dist.
v. State Water Resources Control Bd. (2016) 4 Cal.App.5th 759, 769 (Millview County
Water Dist.).)
“Whether [a] plaintiff established its eligibility for fees under section 1021.5
implicates ‘a mixed standard of review: To the extent we construe and define the
16
statutory requirements for an award of attorney’s fees, our review is de novo; to the
extent we assess whether those requirements were properly applied, our review is for an
abuse of discretion.’ [Citation.] ‘The pertinent question is whether the grounds given by
the court for its denial of an award are consistent with the substantive law of section
1021.5 and, if so, whether their application to the facts of th[e] case is within the range of
discretion conferred upon the trial courts under section 1021.5, read in light of the
purposes and policy of the statute.’ ” (Friends of Spring Street v. Nevada City (2019)
33 Cal.App.5th 1092, 1107; see Robinson v. City of Chowchilla (2011) 202 Cal.App.4th
382, 391-392 (Robinson).) A trial court abuses its discretion in making an award under
Code of Civil Procedure section 1021.5 when there is no substantial evidence to support
the required findings. (Millview County Water Dist., supra, 4 Cal.App.5th at p. 769.)
A
The District contends Miner’s Camp’s action did not confer a significant benefit
on the general public or a large class of persons.
In some cases, the significant benefit that will justify an attorney’s fee award may
be recognized simply from the effectuation of a fundamental constitutional policy.
(Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 939.) “Of
course, the public always has a significant interest in seeing that legal strictures are
properly enforced and thus, in a real sense, the public always derives a ‘benefit’ when
illegal private or public conduct is rectified. Both the statutory language (‘significant
benefit’) and prior case law, however, indicate that the Legislature did not intend to
authorize an award of [attorney’s] fees in every case involving a statutory [or
constitutional] violation. . . . [R]ather[,] . . . the Legislature contemplated that in
adjudicating a motion for [attorney’s] fees under section 1021.5, a trial court would
determine the significance of the benefit, as well as the size of the class receiving [the]
benefit, from a realistic assessment, in light of all the pertinent circumstances, of the
gains which have resulted in a particular case.” (Id. at pp. 939-940, italics omitted; see
17
Flannery v. California Highway Patrol (1998) 61 Cal.App.4th 629, 635-637 (Flannery).)
Even when important public rights are involved, an award of fees is not justified unless
the benefit gained from the action is significant and widespread. (Concerned Citizens of
La Habra v. City of La Habra (2005) 131 Cal.App.4th 329, 336.) Although the District
had 1,966 metered customers in 2014 and only nine were multiple-service accounts, the
trial court nevertheless found that a significant nonpecuniary benefit had resulted to all of
the District’s customers through the directive that the District must abandon its current
rate structure and create a new rate structure. On this record, we are unwilling to say the
trial court abused its discretion in making this finding.
B
In addition, the District asserts that the award of attorney’s fees to Miner’s Camp
was erroneous because its lawsuit was motivated by “self-interest in paying less while
continuing to take eight cabins’ worth of water every month.”
“A pecuniary interest in the outcome of the litigation is not disqualifying. ‘If the
party claiming fees has a pecuniary interest in the outcome of the lawsuit, the issue is
whether the financial burden placed on the party is out of proportion to its personal stake
in the lawsuit.’ ” (Lyons v. Chinese Hospital Assn. (2006) 136 Cal.App.4th 1331, 1352.)
A trial court must compare the financial incentives and burdens of bringing the suit.
(Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1215-1216.) An award of
attorneys’ fees “ ‘will be appropriate except where the expected value of the [plaintiff’s]
own monetary award exceeds by a substantial margin the actual litigation costs.’ ” (Id. at
p. 1216.)
Also, section 1021.5 does not require the benefit conferred on a large class of
persons to be the primary effect or purpose of the litigation. (Code Civ. Proc., § 1021.5;
Robinson, supra, 202 Cal.App.4th at p. 400.) “When each of the criteria is met, the fact
the primary effect [or purpose] of the action was to vindicate a plaintiff’s personal
economic interests does not foreclose an award of attorney fees. Thus, arguments
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regarding the ‘primary objective’ or ‘primary effect’ of the litigation might best be
confined to cases where fees are sought under the catalyst theory [and not under
section 1021.5].” (Robinson, supra, 202 Cal.App.4th at p. 400.)
The District does not assert that the financial burden placed on Miner’s Camp in
pursuing the litigation was out of proportion to its potential recovery. We reject the
District’s argument that Miner’s Camp’s self-interest disqualified it from an award of
attorney’s fees under Code of Civil Procedure section 1021.5.
C
Moreover, the District argues Miner’s Camp failed to establish that a private
action was necessary.
The necessity of private enforcement is clear where the plaintiff’s lawsuit is
against the governmental agency that bears responsibility for the challenged action.
(Woodland Hills, supra, 23 Cal.3d at p. 941.) In Robinson, supra, 202 Cal.App.4th 382,
private action was necessary to enforce the plaintiff’s statutory rights under the Public
Safety Officers Procedural Bill of Rights Act where the Attorney General’s office was
not involved in the litigation and the governmental entity subject to the statutory
requirements vigorously denied it had any responsibility under the statute. (Robinson,
supra, 202 Cal.App.4th at p. 401.)
Here, the trial court determined Miner’s Camp established that the District was
unwilling to voluntarily change its water rate structure to comply with Proposition 218,
and that private enforcement was necessary. Substantial evidence in the record supports
the trial court’s finding. The District rejected Miner’s Camp’s government claim and
refused to change the way it billed Miner’s Camp.
DISPOSITION
The judgment of the trial court, and the postjudgment order awarding
Miner’s Camp attorney’s fees under Code of Civil Procedure section 1021.5,
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are affirmed. Miner’s Camp shall recover its costs on appeal. (Cal. Rules of Court,
rule 8.278(a).)
/S/
MAURO, J.
We concur:
/S/
HULL, Acting P. J.
/S/
HOCH, J.
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