S271869
IN THE SUPREME COURT OF CALIFORNIA
August 3, 2023
Sixth Appellate District H045791; Monterey County Superior Court 16CV003978
Justice Jenkins authored the opinion of the Court, in which Chief Justice Guerrero and Justices Liu, Kruger, Groban, Evans, and Raphael* concurred.
* Associate Justice of the Court of Appeal, Fourth Appellate District, Division Two, assigned by the Chief Justice pursuant to
Opinion of the Court by Jenkins, J.
In 2016, Protect Monterey County (PMC) sponsored, and Monterey County (County) voters passed, “Measure Z,” a local ordinance that bans oil and gas wastewater injection and impoundment and the drilling of new oil and gas wells throughout the County‘s unincorporated areas. Chevron U.S.A. Inc. (Chevron) and other oil producers and mineral rights holders, among others (collectively, plaintiffs), filed a total of six actions1
We granted review to decide whether
FACTUAL AND PROCEDURAL BACKGROUND
The County‘s oil fields are in the County‘s inland regions and operate under permits issued by the County and Geologic Energy Management Division (CalGEM),3 the state agency tasked with overseeing the state‘s drilling, operation, maintenance, and plugging and abandonment of oil and gas wells. (
Measure Z was a County initiative entitled “Protect Our Water: Ban Fracking and Limit Risky Oil Operations Initiative.” It was sponsored by PMC and its stated purpose was to protect the County‘s “water, agricultural lands, air quality, scenic vistas, and quality of life.” It passed with 56 percent of
the vote. The measure applies exclusively to oil and gas operations and contains three prohibitions that apply to the County‘s unincorporated areas. The first — LU-1.21 — bans well stimulation treatments including hydraulic fracturing (commonly known as fracking) and is not at issue here because none of the plaintiffs use, or have any plans to use, such methods.5
The second — LU-1.22 — provides, “Prohibited Land Uses: The development, construction, installation, or use of any facility, appurtenance, or
The third prohibition — LU-1.23 — provides, “Prohibited Land Uses: The drilling of new oil and gas wells is prohibited on all lands within the County‘s unincorporated area. This ... does not affect oil and gas wells drilled prior to the Effective
Date and which have not been abandoned.” For purposes of this prohibition, “oil and gas wells” are “wells drilled for the purpose of exploring for, recovering, or aiding in the recovery of, oil and gas.”
On December 14, 2016 — two days before Measure Z was scheduled to take effect — plaintiffs filed against the County petitions for writ of mandate and complaints for declaratory and injunctive relief and inverse condemnation, claiming Measure Z was preempted by state and federal law, constituted a facial taking of their property, and violated their due process rights. Some of the plaintiffs also claimed that Measure Z was vague, created inconsistencies within the County‘s general plan, and violated the single-subject rule for local ordinances because, among other things, it was misleadingly promoted to voters as an anti-fracking initiative even though no fracking was occurring in the County. The County stipulated to an indefinite stay of Measure Z‘s implementation.
PMC intervened in the actions. After a bench trial, the trial court dismissed plaintiffs’ action as to LU-1.21 on ripeness and standing grounds because no petitioner was using or proposing to use the fracking process LU-1.21 banned. Plaintiffs did not challenge that decision. Regarding LU-1.22 and LU-1.23, the court found them preempted by
impoundment” and the drilling of new oil
PMC and the County appealed. The County abandoned its appeal shortly thereafter and has not defended Measure Z on appeal. The Court of Appeal affirmed on state preemption grounds. (Chevron, supra, 70 Cal.App.5th 153.)
DISCUSSION
In Sherwin-Williams, we identified three ways in which a preempting conflict may arise: “‘if the local legislation “duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication.“‘” (Sherwin-Williams, supra, 4 Cal.4th at p. 897.) First, “[l]ocal legislation is ‘duplicative’ of general law when it is coextensive therewith.” (Ibid.) Second, it is “‘contradictory’ to general law
when it is inimical thereto.” (Id. at p. 898.) Third, it “enters an area that is ‘fully occupied’ by general law when the Legislature has expressly manifested its intent to ‘fully occupy’ the area [citation], or when it has impliedly done so in light of one of the following indicia of intent: ‘(1) the subject matter has been so fully and completely covered by general law as to clearly indicate that it has become exclusively a matter of state concern; (2) the subject matter has been partially covered by general law couched in such terms as to indicate clearly that a paramount state concern will not tolerate further or additional local action; or (3) the subject matter has been partially covered by general law, and the subject is of such a nature that the adverse effect of a local ordinance on the transient citizens of the state outweighs the possible benefit to the’ locality.” (Ibid.)
The party alleging preemption “has the burden of demonstrating” it. (Big Creek Lumber Co. v. County of Santa Cruz (2006) 38 Cal.4th 1139, 1149 (Big Creek Lumber).) “Whether state law preempts a local ordinance is a question of law that is subject to de novo review.” (Roble Vista Associates v. Bacon (2002) 97 Cal.App.4th 335, 339.)
California‘s oil and gas operations are governed by Division 3 of the
injection, plugging, or plugging and abandonment operations” (
Subdivision (a) of the statute here at issue —
Subdivision (b) of
power, in substance, to explore for and remove all hydrocarbons from any lands in the state, in the absence of an express provision to the contrary contained in the lease or contract, is deemed to allow the lessee or contractor, or the lessee‘s or contractor‘s successors or assigns, to do what a prudent operator using
The Legislature passed
increase recovery, oil leases and contracts that are silent about oil production methods and practices would be “deemed” to allow all practices approved by the supervisor. (Stats. 1961, ch. 2074, § 1.)
In 1970, the Legislature amended subdivision (a) of
Plaintiffs argue — as the trial court and the Court of Appeal determined — that Measure Z‘s ban on “[r]isky [o]il [o]perations” — i.e., wastewater injection and impoundment and the drilling of new oil wells — contradicts
Applying these definitions, we conclude Measure Z contradicts — and thus is preempted by —
As set forth above,
By providing that certain oil production methods may never be used by anyone, anywhere, in the County, Measure Z nullifies — and therefore contradicts —
has, in all cases, usurped the supervisor‘s statutorily granted authority to decide whether those methods are “suitable ... in each proposed case.” (
As we stated in California Fed. Savings & Loan Assn. v. City of Los Angeles (1991) 54 Cal.3d 1, 17, a conflict is “a genuine one” where it is “unresolvable short of choosing between one enactment and the other.” Here, a “genuine” conflict exists in the sense that the state and local laws provide conflicting instructions as to which entity has the authority to decide what production methods are permissible. We agree with the Court of Appeal‘s statement that “[i]t is not possible for the authority to permit these methods and practices to rest in the state‘s hands if the local ordinance forbids these methods and practices. As the two laws conflict with respect to who controls the use of these methods and practices, the local
In urging us to conclude otherwise, PMC argues that several statutes that allow local control over some aspects of oil extraction reflect the Legislature‘s intent not to preempt local oil-related ordinances. PMC cites to our decision in Big Creek Lumber that “‘[p]reemption by implication of legislative intent may not be found when the Legislature has expressed its intent to permit local regulations‘” or “‘when the statutory scheme recognizes local regulations.‘” (Big Creek Lumber, supra, 38 Cal.4th at p. 1157.)
PMC‘s argument fails because the statutes it cites only address the authority of local entities to determine whether and where oil production may occur within their boundaries based on local zoning laws; they do not address oil production methods at existing wells. For example, PMC cites
A review of Big Creek Lumber reveals that it is factually distinct from the issues posed by Measure Z, and is therefore inapplicable. In Big Creek Lumber, we addressed two local land use ordinances that restricted timber harvesting and certain types of timber operations to specified zone districts and parcels. (Big Creek Lumber, supra, 38 Cal.4th at pp. 1145, 1162.) We held that these locational ordinances, which regulated only where commercial logging could occur, were not expressly preempted by a state law that regulated — and prohibited counties from also regulating — “the conduct of timber operations” because “an ordinance that avoids speaking to how timber operations may be conducted and addresses only where they may take place falls short of being ‘a clear attempt to regulate the conduct’ thereof.” (Id. at pp. 1158, 1152-1153.)
Unlike in Big Creek Lumber, where the state and local laws addressed different subjects — “how” (state) and “where” (local) timber operations could take place — here, both
on tidelands — none of these decisions discusses state preemption principles. Instead, they address a local entity‘s police power and authority to restrict or ban oil production based on reasonable zoning restrictions. Here, we do not decide, or express any opinion on, whether local entities may restrict or ban oil production within their boundaries based on proper zoning restrictions. As the Court of Appeal stated, “Our narrow holding does not in any respect call into question the well-recognized authority of local entities to regulate the location of oil drilling operations, a matter not addressed by
Next, PMC argues that language from City of Riverside v. Inland Empire Patients Health & Wellness Center, Inc. (2013) 56 Cal.4th 729, 743 (City of Riverside) supports a nonpreemption finding. PMC‘s reliance on City of Riverside is also misplaced. In that case, we held that a local regulation banning medical marijuana dispensaries within city limits did not contradict the Compassionate Use Act (CUA;
However, as Justice Liu observed in his concurring opinion in City of Riverside, the demands/prohibits language “should not be misunderstood to improperly limit the scope of the preemption inquiry.” (City of Riverside, supra, 56 Cal.4th at p. 763 (conc. opn. of Liu, J.).) As Justice Liu also noted
Of significance to our analysis here, in City of Riverside, we reiterated that a state law does not “‘authorize’ activities, to the exclusion of local bans, simply by exempting those activities from otherwise applicable state prohibitions.” (City of Riverside, supra, 56 Cal.4th at p. 758.) We held that the CUA and MMP did not “‘authorize’ activities ... to the exclusion of local bans” because they were “limited and circumscribed” state laws that “merely declare that” certain medical marijuana activities are no longer subject to criminal and nuisance sanctions. (City of Riverside, at pp. 758, 738; id. at p. 760.) They “create[] no comprehensive scheme for the protection or promotion of facilities that dispense medical marijuana” and contain no implied limitations on a local entity‘s authority to restrict or prohibit marijuana-related activities within their boundaries. (Id. at p. 760.)
In contrast,
PMC‘s argument fails because, as noted above, compliance with both laws must be “reasonably possible.” (City of Riverside, supra, 56 Cal.4th at p. 743, italics added.) Here, we cannot say it is “reasonably possible” for well operators “to comply with both the state and local laws” (ibid.) by requiring them to curb their conduct in a way that conforms to a local ban, without regard to what the state law permits. Carried to its logical extension, PMC‘s argument would mean that a local law that contradicts state law would never be preempted, because in almost every case, it is theoretically possible for a party to comply with state and local laws that contradict each other, simply by not engaging in the conduct prohibited by local law.8 Our statement
in City of Riverside does not narrow the scope of contradiction preemption in this manner.
Accordingly, we conclude Measure Z contradicts, and therefore conflicts with and is preempted by,
Given our finding of contradiction preemption, we need not address whether the doctrine of field preemption also applies, which would require us to define a “field” and determine whether state law, in light of its purpose and scope, has “fully occupied” that field. (Sherwin-Williams, supra, 4 Cal.4th at p. 898 [field preemption considerations include whether the subject matter is “‘exclusively a matter of state concern,‘” indicates a “‘paramount state concern,‘” or “is of such a nature that the adverse effect of a local ordinance on the transient citizens of the state outweighs the possible benefit to the’ locality“].) Nor need we address the parties’ conflicting views on whether and how to apply the federal “obstacle preemption” doctrine.
DISPOSITION
We affirm the Court of Appeal‘s judgment.
JENKINS, J.
We Concur:
GUERRERO, C. J.
LIU, J.
KRUGER, J.
GROBAN, J.
EVANS, J.
RAPHAEL, J.*
* Associate Justice of the Court of Appeal, Fourth Appellate District, Division Two, assigned by the Chief Justice pursuant to
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Chevron U.S.A. Inc. v. County of Monterey
Procedural Posture (see XX below)
Original Appeal
Original Proceeding
Review Granted (published) XX 70 Cal.App.5th 153
Review Granted (unpublished)
Rehearing Granted
Opinion No. S271869
Date Filed: August 3, 2023
Court: Superior
County: Monterey
Judge: Thomas W. Wills
Counsel:
Robins Kaplan, Michael Geibelson, Bernice Conn, Lucas A. Messenger; Environmental Law Clinic at Stanford Law School, Deborah A. Sivas, Alicia E. Thesing; Center for Biological Diversity, Hollin N. Kretzmann; Shute, Mihaly & Weinberger, Catherine Engberg, Kevin P. Bundy and Aaron M. Stanton for Interveners and Appellants.
Katherine S. Hoff, Shana D.G. Lazerow, Alison Hahm; Julia K. Forgie; M. Benjamin Eichenberg; Paulina Nicole Torres and Ingrid M. Brostrom for Communities for a Better Environment, Natural Resources Defense Council, San Francisco Baykeeper and Center on Race, Poverty & the Environment as Amici Curiae on behalf of Interveners and Appellants.
James R. Williams, County Counsel (Santa Clara), and Elizabeth Vissers, Deputy County Counsel, for County of Santa Clara as Amicus Curiae on behalf of Interveners and Appellants.
Noah Garrison for Former State Senator Fran Pavley as Amicus Curiae on behalf of Interveners and Appellants.
Frank G. Wells Environmental Law Clinic, Sean B. Hecht, Benjamin Avi Harris and Gabriel F. Greif for League of California Cities, California State Association of Counties and County of Los Angeles as Amici Curiae on behalf of Interveners and Appellants.
Alston & Bird, Jeffrey D. Dintzer, Matthew Wickersham; Gibson Dunn & Crutcher, Theodore J. Boutrous, William E. Thomson, Dione Garlick; Ragghianti Freitas and Todd Welden Smith for Plaintiff and Respondent Chevron U.S.A., Inc.
Hanson Bridgett, Andrew A. Bassak, Christopher A. Rheinheimer, Gary A. Watt, Patrick Burns; Manatt, Phelps & Phillips, Michael M. Berger and Benjamin Shatz for Plaintiff and Respondent Aera Energy LLC.
O‘Melveny & Myers, Matthew Thomas Kline, Heather A. Welles and Barton H. Thompson for Plaintiff and Respondent California Resources Corporation.
Clifford & Brown and Donald C. Oldaker for Plaintiff and Respondent Eagle Petroleum, LLC.
JRG Attorneys at Law, Johnson, Rovella, Retterer, Rosenthal & Gilles and Jason S. Retterer for Plaintiffs and Respondents Trio Petroleum, LLC, Sunset Exploration Inc., Monroe Swell Prospect, J.V., and Bradley Minderals, Inc.
Hanna and Morton, Edward S. Renwick; and Jacqueline M. Zischke for Plaintiff and Respondent National Association of Royalty Owners—California, Inc.
Manatt, Phelps & Phillips and Michael M. Berger for Western States Petroleum Association and California Independent Petroleum Association as Amici Curiae on behalf of Plaintiffs and Respondents.
Munger, Tolles & Olson, Benjamin J. Horwich and Dila Mignouna for Chamber of Commerce of the United States of America, California
Counsel who argued in Supreme Court (not intended for publication with opinion):
Kevin P. Bundy
Shute, Mihaly & Weinberger LLP
396 Hayes Street
San Francisco, CA 94102
(415) 552-7272
Theodore J. Boutrous
Gibson Dunn & Crutcher, LLP
333 South Grand Avenue
Los Angeles, CA 90071
(213) 229-7804