532 P.3d 1120
Cal.2023Background
- In 2016 Monterey County voters passed Measure Z, sponsored by Protect Monterey County (PMC); it bans (1) well stimulation (LU-1.21, not in dispute), (2) facilities supporting oil and gas wastewater injection or impoundment (LU-1.22), and (3) drilling of new oil and gas wells (LU-1.23) in unincorporated areas.
- Plaintiffs (Chevron and other oil producers/mineral-rights owners) filed six consolidated suits arguing Measure Z is preempted by state law (Public Resources Code §3106) and federal law, and raised takings and due process claims; the County stayed Measure Z.
- The trial court held LU-1.22 and LU-1.23 preempted by §3106 and the Safe Drinking Water Act; the Court of Appeal affirmed; the County later abandoned its appeal; PMC appealed to the California Supreme Court.
- Section 3106(b) directs the State Oil and Gas Supervisor to permit well owners/operators to utilize all industry methods and practices, when, in the supervisor’s opinion, those methods are suitable to increase ultimate hydrocarbon recovery, and declares a state policy allowing use of methods approved by the supervisor (including injection and heating methods).
- The Supreme Court granted review to decide whether §3106 preempts Measure Z and held that Measure Z contradicts and is preempted by §3106 because the local ban usurps the supervisor’s exclusive authority to permit production methods.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Pub. Res. Code §3106 preempt Measure Z? | Measure Z conflicts with §3106 because it bans methods §3106 authorizes the state supervisor to permit. | Measure Z is a valid local regulation of land use/location and does not conflict with state law. | Court: §3106 preempts Measure Z by contradiction — Measure Z nullifies supervisor's authority to permit methods. |
| Is Measure Z a land‑use ordinance entitled to a presumption against preemption? | Measure Z is a pretextual ban on production methods, not a genuine zoning measure. | Measure Z regulates where/whether operations may occur and should get the presumption. | Court: Even if treated as land‑use, the presumption is rebutted because Measure Z clearly contradicts §3106. |
| Can operators reasonably comply with both Measure Z and §3106? | Plaintiffs: No — Measure Z permanently forbids methods the supervisor may permit, usurping state authority. | PMC: Operators could comply by not using banned methods or ceasing production. | Court: Theoretical compliance is insufficient; "reasonably possible" compliance is not met and contradiction exists. |
| Do precedents like Big Creek Lumber and City of Riverside preclude preemption? | Plaintiffs: Those cases are distinguishable because they dealt with locational zoning or limited state schemes. | PMC: Those cases show the Legislature intended to allow local regulation and that local bans need not be preempted. | Court: Distinguished those cases — Big Creek concerned "where" not "how"; Riverside does not bar preemption where local law prohibits what the state authorizes. |
Key Cases Cited
- Sherwin‑Williams Co. v. City of Los Angeles, 4 Cal.4th 893 (1993) (identifies three preemption modes: duplication, contradiction, field occupancy)
- Big Creek Lumber Co. v. County of Santa Cruz, 38 Cal.4th 1139 (2006) (presumption against preemption for land‑use ordinances; distinguish location‑only rules from conduct regulation)
- O’Connell v. City of Stockton, 41 Cal.4th 1068 (2007) (local law preempted when it cannot be reconciled with state law)
- California Fed. Sav. & Loan Assn. v. City of Los Angeles, 54 Cal.3d 1 (1991) (conflict exists when choice between enactments is required)
- City of Riverside v. Inland Empire Patients Health & Wellness Ctr., Inc., 56 Cal.4th 729 (2013) (local ordinance does not contradict state law unless it prohibits what the state demands; court explains limits of that phrasing)
- Cohen v. Board of Supervisors, 40 Cal.3d 277 (1985) (local attempts to prohibit conduct proscribed or permitted by state law can be preempted)
- Great Western Shows v. County of Los Angeles, 27 Cal.4th 853 (2002) (discusses preemption where state scheme governs conduct)
- Northern Cal. Psychiatric Soc. v. City of Berkeley, 178 Cal.App.3d 104 (1986) (local ban on treatment contradicted state law permitting it in regulated circumstances)
- Ex Parte Daniels, 183 Cal. 636 (1920) (contradiction preemption example where local speed limit lower than state law was held preempted)