51 Cal.App.5th 621
Cal. Ct. App.2020Background
- The City of Los Angeles adopted ordinances in June 2017 to establish two business improvement districts (DCBID and SPBID) under the Property and Business Improvement District Law (PBID Law) and article XIII D of the California Constitution.
- The City mailed statutorily required notices and ballots; Hill, Olive, and Mesa each returned ballots opposing the respective BID assessments.
- Public hearings were held; the record shows no valid written protests by the three owners and no evidence they spoke or submitted written objections at the hearings.
- The City enacted ordinances creating the BIDs; Hill & Olive and Mesa filed petitions for writs of mandate and complaints for declaratory and injunctive relief challenging the BIDs (including challenges about special vs. general benefit allocation).
- The trial court denied the petitions on the merits. On appeal the Court of Appeal treated exhaustion of administrative remedies as a threshold jurisdictional question, held the owners had not exhausted, affirmed the judgments, and declined to reach the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs were required to exhaust administrative remedies before suing over BID establishment | No; exhaustion not required in BID context or was satisfied here | Yes; PBID process requires agency the first opportunity to address objections | Required. PBID/Art. XIII D procedures imply exhaustion is necessary before judicial review |
| Whether returning an opposing assessment ballot alone constitutes exhaustion | Yes; submitting an opposing ballot exhausted remedies | No; ballot alone is insufficient—owners must present specific objections at the public hearing (oral or written) | No. Ballots without articulating specific objections at the hearing do not satisfy exhaustion |
| Whether plaintiffs in fact exhausted by presenting objections at the public hearings | Plaintiffs alleged they exhausted administrative remedies | City/BIDs: plaintiffs did not submit written protests or have representatives speak; record is silent | Plaintiffs failed to present objections at hearings; did not exhaust |
| Whether the court should reach merits (e.g., special vs. general benefit questions) despite exhaustion failure | Plaintiffs asked merits be adjudicated | Defendants argued the court should dismiss on exhaustion grounds and not reach merits | Court declined to reach merits and affirmed dismissal for failure to exhaust |
Key Cases Cited
- Williams & Fickett v. County of Fresno, 2 Cal.5th 1258 (2017) (administrative exhaustion may be inferred from statutory scheme and is required even if not expressly stated)
- Silicon Valley Taxpayers’ Assn., Inc. v. Santa Clara County Open Space Authority, 44 Cal.4th 431 (2008) (framework for distinguishing special vs. general benefit under article XIII D)
- Evans v. City of San Jose, 128 Cal.App.4th 1123 (2005) (exhaustion doctrine reviewed de novo; objections must be sufficiently specific to allow agency to respond)
- Yamaha Motor Corp. v. Superior Court, 185 Cal.App.3d 1232 (1986) (exhaustion promotes development of a complete administrative record and judicial efficiency)