H045791
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT
October 12, 2021
CERTIFIED FOR PUBLICATION; Monterey County Super. Ct. No. 16CV003978
Appellant Protect Monterey County (PMC) appeals from the trial court‘s judgment striking down a County ordinance banning “land
concluded that these two components of Measure Z were preempted by state and federal laws and that they constituted a facial taking of the property of some plaintiffs. PMC also contends that the trial court made prejudicially erroneous evidentiary rulings.
We find that the trial court correctly concluded that these two components of Measure Z are preempted by
Because we uphold the trial court‘s decision on the grounds of state law preemption, we need not consider whether Measure Z is also preempted by federal law or constituted a facial taking of plaintiffs’ property. We also need not address PMC‘s challenge to the trial court‘s evidentiary rulings as those rulings play no role in the resolution of the state law preemption issue, which is an entirely legal issue. We affirm the trial court‘s judgment.
I. MEASURE Z
Measure Z was a citizens’ initiative on the November 2016 Monterey County ballot entitled: “Protect Our Water: Ban Fracking and Limit Risky Oil Operations Initiative.” It proposed to amend Monterey County‘s general plan
Measure Z contained a section setting forth “exemptions” for “any person or entity exercising a vested right obtained pursuant to State law” and provided for “a reasonable amortization period” for phasing out uses that were inconsistent with Measure Z‘s provisions. Measure Z also stated that its provisions would not be applied to the extent “that they would violate the constitution or laws of the United States or the State of California.” Measure Z authorized the Board of Supervisors to grant an exception to a property owner if the application of Measure Z would result in an unconstitutional taking.
Measure Z identified its purpose as “protect[ing] Monterey County‘s water, agricultural lands, air quality, scenic vistas, and quality of life” by “prohibit[ing] and phas[ing] out land uses in support of oil and gas wastewater . . . disposal using injection wells or disposal ponds in the County‘s unincorporated area” and “prohibit[ing] drilling new oil and gas wells in the County‘s unincorporated area.” Measure Z asserted that these policies would “promote[] and protect[] the health, safety, welfare, and quality of life of County residents . . . .” Measure Z was passed by the voters in November 2016.
II. PROCEDURAL BACKGROUND
Beginning in December 2016, plaintiffs filed multiple mandate petitions and complaints for declaratory and injunctive relief and for inverse condemnation against defendant County of Monterey (the County).4 Plaintiffs alleged
After a multi-day trial that consisted entirely of argument by counsel based on voluminous declarations and exhibits, the court issued an extensive statement of decision. The court found that plaintiffs lacked standing to challenge LU-1.21 because no plaintiff was using or proposing to use any well stimulation treatments in Monterey County. The court found that LU-1.21 was severable from LU-1.22 and LU-1.23.
The court proceeded to plaintiffs’ challenge to LU-1.22, which barred wastewater injection and impoundment. The court credited plaintiffs’ arguments that this aspect of Measure Z was preempted by state law. The court rejected PMC‘s claim that Measure Z was simply a “land use” prohibition. The court characterized this argument as “clearly a pretextual attempt to do indirectly what it cannot do directly.” The court focused on the lack of any “meaningful distinction between wastewater injection and impoundment on the one hand, and surface equipment and activities in support of wastewater injection and impoundment on the other.” The court eschewed the distinction between surface and subsurface activities and instead concluded that the key issue was whether Measure Z “regulates the conduct of oil and gas operations or their permitted location.” The court viewed LU-1.22 as “regulat[ing] a specific production technique . . . .” The court found it significant that “Measure Z is a ban on specific production techniques not a total ban on oil operations.” Because, in the trial court‘s view, state law “fully occupies the area of the manner of oil and gas production,” and LU-1.22 “seeks to regulate the manner of oil and gas production,” the court found that LU-1.22 was preempted. The court also found that LU-1.22 conflicted with
The court proceeded to LU-1.23. It found that the ban on new wells conflicted with the SDWA because LU-1.23 necessarily banned wastewater injection. It also found that the new well ban was preempted because it would
The court then addressed the facial takings claim. The court found that the exemption procedure provided for in Measure Z violated due process so plaintiffs were not required to exhaust administrative remedies. The court found that LU-1.22 and LU-1.23 would cause a facial taking as to those plaintiffs who had no active wells, but no remedy was necessary because those two provisions were preempted. As to those plaintiffs who had active wells, the court found no facial taking.
The court entered judgment and issued a writ of mandate directing the County to invalidate LU-1.22 and LU-1.23. PMC timely filed a notice of appeal from the judgment.6
III. DISCUSSION
A. State Law Preemption
PMC contends that the trial court erred in finding that LU-1.22 and LU-1.23 are preempted. Plaintiffs maintain that Measure Z7 is preempted under state law because it conflicts with
“Under
article XI, section 7 of the California Constitution , ‘[a] county or city may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws.’ [Citation.] ‘If otherwise valid local legislation conflicts with state law, it is preempted by such law and is void.’ [Citations.] ‘A conflict exists if the local legislation “duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication.“’ [Citations.] Local legislation is ‘duplicative’ of general law when it is coextensive therewith. [Citation.] Similarly, local legislation is ‘contradictory’ to general law when it is inimical thereto. [Citation.] Finally, local legislation 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 asto 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 [citations].” (Sherwin-Williams Co. v. City of Los Angeles (1993) 4 Cal.4th 893, 897-898, fn. omitted, italics added.) “The party claiming that general state law preempts a local ordinance has the burden of demonstrating preemption.” (Big Creek Lumber Co. v. County of Santa Cruz (2006) 38 Cal.4th 1139, 1149 (Big Creek).) “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.)
The trial court found that Measure Z is preempted by state law because, among other things, Measure Z conflicts with
PMC argues that Measure Z is not preempted by state law because “California oil and gas statutes and regulations expressly acknowledge and affirm local authority, precluding a finding that the state has completely occupied the field,” and “state law addresses only specific, technical aspects of oil and gas production, leaving local governments free to exercise their traditional authority over land use, health, and safety to protect communities from harm.”
Plaintiffs’ position, on the other hand, is that
by the Oil and Gas Supervisor and also be allowed to undertake oil and gas well drilling projects properly approved by the Oil and Gas Supervisor.”
We begin with the text of
“(a) The [State Oil and Gas] supervisor9 shall so supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities attendant to oil
and gas production, including pipelines not subject to regulation pursuant to Chapter 5.5 (commencing with [s]ection 51010) of Part 1 of Division 1 of Title 5 of the Government Code that are within an oil and gas field, so as to prevent, as far as possible, damage to life, health, property, and natural resources; damage to underground oil and gas deposits from infiltrating water and other causes; loss of oil, gas, or reservoir energy, and damage to underground and surface waters suitable for irrigation or domestic purposes by the infiltration of, or the addition of, detrimental substances. [¶] (b) The supervisor shall also supervise the drilling, operation, maintenance, and abandonment of wells so as to permit the owners or operators of the wells to utilize all methods and practices known to the oil industry for the purpose of increasing the ultimate recovery of underground hydrocarbons and which, in the opinion of the supervisor, are suitable for this purpose in each proposed case. To further the elimination of waste by increasing the recovery of underground hydrocarbons, it is hereby declared as a policy of this state that the grant in an oil and gas lease or contract to a lessee or operator of the right or 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 reasonable diligence would do, having in mind the best interests of the lessor, lessee, and the state in producing and removing hydrocarbons, including, but not
limited to, the injection of air, gas, water, or other fluids into the productive strata, the application of pressure heat or other means for the reduction of viscosity of the hydrocarbons, the supplying of additional motive force, or the creating of enlarged or new channels for the underground movement of hydrocarbons into production wells, when these methods or processes employed have been approved by the supervisor, except that nothing contained in this section imposes a legal duty upon the lessee or contractor, or the lessee‘s or contractor‘s successors or assigns, to conduct these operations. [¶] (c) The supervisor may require an operator to implement a monitoring program, designed to detect releases to the soil and water, including both groundwater and surface water, for aboveground oil production tanks and facilities. [¶] (d) To best meet oil and gas needs in this state, the supervisor shall administer this division so as to encourage the wise development of oil and gas resources.” (
§ 3106 .)
We agree with plaintiffs that the text of
The legislative history of
underground and surface waters suitable for irrigation or domestic purposes by the infiltration of, or the addition of, detrimental substances, by reason of the drilling, operation, maintenance, or abandonment of wells.” (Stats. 1939, ch. 93, § 3106, p. 1112.) We see no indication in this original version of
However, the language of subdivision (b) of
In 1972, the text that is now subdivision (d) was added. (Stats. 1972, ch. 898, § 7.) The legislative history identifies the purpose of this amendment as “strengthen[ing] the role” of the California Department of Conservation‘s Division of Oil, Gas, and Geothermal Resources (DOGGR),11 the State entity supervising oil drilling and operations, “in dealing with environmental problems.” (Resources Agency‘s Enrolled Bill Rep. on Sen. Bill No. 1022 (1972 Reg. Sess.) August 11, 1972.) There have been no subsequent material amendments to
PMC first points to
PMC also directs our attention to
public safety, nuisance, appearance, noise, fencing, hours of operation, abandonment, and inspection.” Although this language on its face might seem to provide some support for PMC‘s argument, its limitation to chapter 3.5 reflects otherwise. Chapter 3.5 concerns “unit operations,” and consists of
PMC argues that the Legislature‘s 2013 enactment of Senate Bill No. 4 demonstrates that
PMC claims that
PMC also suggests that there is no preemption because provisions in plaintiffs’ leases require them to comply with local laws. The leases themselves are not state laws and cannot conflict with state laws. We see nothing in these standard lease provisions, requiring the operators to comply with all laws and regulations, to suggest that the State was ceding all or part of its authority under
PMC and the amici make much of a line of authority affirming that local regulation of oil and gas drilling is within the police power of local entities, and they argue that this line of authority rebuts any preemption claim.
California courts have long viewed local zoning regulation of oil and gas drilling to be within a local entity‘s police power. Nearly a century ago, the California Supreme Court reversed the dismissal of an action by an oil
In Beverly Oil Co. v. City of Los Angeles (1953) 40 Cal.2d 552, an oil company challenged a city‘s ordinance banning new oil wells and prohibiting redrilling of existing wells to new depths. The California Supreme Court rejected the challenge. “It must be deemed to be well settled that the enactment of an ordinance which limits the owner‘s property interest in oil bearing lands located within the city is not of itself an unreasonable means of accomplishing a legitimate objective within the police power of the city.” (Id. at p. 558, italics added.)
In Higgins v. City of Santa Monica (1964) 62 Cal.2d 24, the California Supreme Court considered whether a 1939 City of Santa Monica initiative prohibiting oil drilling could properly be applied to tidelands that the State had explicitly granted power over to the city. (Id. at pp. 26-28.) The Higgins court rejected the argument that state laws had preempted the field with respect to oil drilling on tidelands. It found that state laws limited to tidelands had expressly vested discretion in the city to decide whether there should be oil drilling on the tidelands. (Id. at p. 32.)
Hermosa Beach Stop Oil Coalition v. City of Hermosa Beach (2001) 86 Cal.App.4th 534 involved, among other things, whether a citizens’ initiative banning oil drilling in the city was a valid exercise of the city‘s police power. (Id. at pp. 543-545, 548.) The court held: “Enactment of a city ordinance prohibiting exploration for and production of oil, unless arbitrary, is a valid exercise of the municipal police power.” (Id. at p. 555.)
The mere fact that some local regulation of oil and gas drilling is within a local entity‘s police power does not resolve the question of whether a particular local regulation is preempted by a particular state law. If a local regulation conflicts with a state law, the local regulation exceeds the local entity‘s power. (
regulation was preempted by state law. Pacific Palisades predated the enactment of the Public Resources Code, and Beverly Oil predated the addition of the language that now appears in
PMC contends that Measure Z‘s provisions are not preempted because “the state‘s oil and gas rules narrowly address only the manner in which operations are carried out, not whether or where oil and gas resources should be developed.” PMC asserts that “state law‘s exclusive focus on the technical manner in which oil and gas production occurs leaves ample room for the exercise of local police power and land use authority.” PMC argues that Measure Z controls only “where and whether” oil drilling occurs, which it contends are outside the purview of the State‘s laws.
PMC‘s myopic view of Measure Z‘s provisions cannot be reconciled with the actual import of those provisions. The trial court found that Measure Z “regulates the conduct of oil and gas operations” and “specific production technique[s]” rather than the use of land. We agree. Measure Z did not identify any locations where oil drilling may or may not occur. Instead, it permitted continued operation of existing wells but barred new wells and wastewater injection even if the new wells and wastewater injection would be on the same land as the existing operation. These provisions did not regulate “where and whether” oil drilling would occur on land in the unincorporated areas of the County
but rather what and how any oil drilling operations could proceed.14 Operations could proceed only if they involved no new wells and no wastewater injection, which are operational methods and practices.
PMC insists that Measure Z does not conflict with
entity from banning that practice. (Id. at p. 278.) In Dublin, a County initiative banned incineration and promoted recycling. A state law permitted incineration. The Court of Appeal found no preemption because “several sections of the [state] Act demonstrate that the decision to permit or disallow incineration is a matter for the discretion of each city or county.” (Ibid.) The same cannot be said here. Although PMC argues otherwise, it has failed to identify any provision of state law that, contrary to
PMC also relies on People ex rel. Deukmejian v. County of Mendocino (1984) 36 Cal.3d 476 (Mendocino). In that case, the California Supreme Court found that a local ordinance was not preempted because the state laws required compliance with local regulations and lodged “wide discretion” in local authorities, a situation which is not present here. (Id. at pp. 486-487.) The Mendocino case also did not involve a conflict between local and state law, but instead a question of field preemption. (Id. at pp. 486-488.)
In T-Mobile West LLC v. City and County of San Francisco (2019) 6 Cal.5th 1107, the California Supreme Court observed: “‘The “contradictory and inimical” form of preemption does not apply unless the ordinance directly requires what the state statute forbids or prohibits what the state enactment demands.’ [Citations.] ‘[N]o inimical conflict will be found where it is reasonably possible to comply with both the state and
local laws.‘” (Id. at p. 1121.) In T-Mobile, unlike here, the state statutes made no mention of the subject matter addressed by the local ordinance so there was no conflict. Here,
PMC‘s reliance on Big Creek is also misplaced. The state law in Big Creek contained an express preemption clause that was limited to “‘the conduct of timber operations,‘” while at the same time “general forestry law . . . expressly recognize[d] local zoning authority.” (Big Creek, supra, 38 Cal.4th at pp. 1151, 1157, italics added.) The local zoning ordinance limited timber operations to certain zoning districts. (Id. at p. 1157.) The California Supreme Court, noting that state law expressly favored permitting local entities “‘the maximum degree of control over local zoning matters,‘” held that the local zoning ordinance was not expressly preempted because it did not involve the “conduct” of timber operations. (Id. at pp. 1151-1157.) The court proceeded to consider whether the local zoning ordinance was impliedly preempted and decided that it was not. (Id. at p. 1157.)
PMC relies on the following passage: “[A] local ordinance is not impliedly preempted by conflict with state law unless it ‘mandate[s] what state law expressly forbids, [or] forbid[s] what state law expressly mandates.’ [Citation.] That is because, when a local ordinance ‘does not prohibit what the statute commands or command what it prohibits,’ the ordinance is not ‘inimical to the statute.’ [Citation.] Here, County‘s ordinances are not impliedly preempted by conflict with state forestry law because it is reasonably possible for a timber operator to comply with both. [¶] The zone district
ordinance does not mandate what general forestry law forbids or forbid[]
Big Creek is not inconsistent with our analysis.
The fact that state law leaves room for some local regulation of oil drilling, such as zoning regulations identifying where oil drilling will be permitted in a locality, does not mean that the County has the authority to ban all new wells and all wastewater injection under Measure Z.16 “[W]hen a statute or statutory scheme seeks to promote a certain activity and, at the same time, permits more stringent local regulation of that activity,
local regulation cannot be used to completely ban the activity or otherwise frustrate the statute‘s purpose.” (Great Western Shows, Inc. v. County of Los Angeles (2002) 27 Cal.4th 853, 868.) Here,
PMC contends that the trial court denied it “a fair trial” because the court admitted irrelevant evidence proffered by plaintiffs and denied PMC and the County the opportunity to “contest Plaintiffs’ evidence through discovery and cross-examination.”
At the outset of the case, the court expressed the view that “discovery on the validity and preemption issues” was not “necessary” because these were “questions of law.” PMC expressly agreed. When the court decided to have a Phase 1 trial that would “be limited to challenges to the validity of the ordinance on its face,” which included the preemption and takings issues, the court envisioned little need for discovery or evidence. Plaintiffs sought to provide “some information about our operations.” They argued that evidence was essential to show that Measure Z would take “all the economically viable use” of the property. The County and PMC disagreed. Their position was that such information would be beyond the scope of a facial challenge. The court suggested that there was a middle ground that could be addressed by means of a stipulated set of facts, since it needed “a basic understanding of what . . . the permits that are issued allow.” At the same time, the court took the position that “I don‘t need testimony at this phase.”
Plaintiffs filed many declarations and requests for judicial notice in support of their Phase 1 arguments along with many exhibits.18 The County filed a declaration and a request for judicial notice in support of its Phase 1 opposition argument. PMC filed a request for judicial notice of 13 items in support of its Phase 1 opposition argument.
PMC also filed written objections to plaintiffs’ declarations.19 PMC complained generally that, due to the lack of discovery, it had been deprived of the opportunity to challenge the information in the declarations. PMC also made voluminous specific objections based on lack of foundation, relevancy, improper legal opinion, speculation, the secondary evidence rule, “inadmissible opinion,” and “improper opinion.” The County joined in those objections and made some of its own. Plaintiffs challenged these objections. They also objected to some of the evidence offered by the County and PMC.
Water Resources Control Board; declarations from former officials with [DOGGR]; ballot measure materials and photos of campaign materials and news clips, which is not to say that all of the above are admissible.” The court noted that much of this material was related to standing. The court “reassure[d]” PMC “that you‘re not waiving your objections by failing to repeat them here in the court. We don‘t need to take the time to do that.” The court made specific rulings on the evidentiary objections in its statement of decision, sustaining some and overruling others. The court pointed out that much of plaintiffs’ evidence was needed only because PMC had ultimately contested standing.
As PMC concedes, “[p]reemption presents a pure question of law.” Indeed, PMC asks us to disregard the evidence to which it objects and decide the issues as a matter of law. None of the evidence to which PMC objects has any relevance to the state law preemption issue that we find dispositive in this case. Consequently, PMC‘s claims that the trial court erred in admitting irrelevant evidence and denying discovery and cross-examination could not provide a basis for reversal because PMC could not have been prejudiced by any of the evidentiary or discovery rulings that it challenges. It follows that we need not devote any analysis to these contentions as we have disregarded this evidence and decided this case as a matter of law.
IV. DISPOSITION
The judgment is affirmed.
ELIA, J.
WE CONCUR:
GREENWOOD, P.J.
BAMATTRE-MANOUKIAN, J.
Chevron v. County of Monterey
H045791
Trial Court: Monterey County Superior Court Superior Court No.: 16CV003978
Trial Judge: Honorable Thomas W. Wills
Counsel for Plaintiffs and Respondents: CHEVRON U.S.A., INC. et al. Jeffrey David Dintzer Alston & Bird Theodore Joseph Boutrous Gibson Dunn & Crutcher Todd Welden Smith Ragghianti Freitas
Counsel for Plaintiff and Respondent: AERA ENERGY LLC Andrew A. Bassak Hanson Bridgett
Counsel for Plaintiff and Respondent: CALIFORNIA RESOURCES CORPORATION Matthew Thomas Kline Heather A. Welles O‘Melveny & Myers Barton Hurst Thompson
Counsel for Plaintiff and Respondent: EAGLE PETROLEUM, LLC Donald Charles Oldaker Clifford and Brown
Counsel for Plaintiff and Respondent: TRIO PETROLEUM, LLC Jason Stuart Retterer JRG Attorneys at Law
Counsel for Plaintiff and Respondent: NATIONAL ASSOCIATION OF ROYALTY OWNERS-CALIFORNIA, INC. Edward Shield Renwick Hanna and Morton Jacqueline M. Zischke
Counsel for Interveners and Appellants: PROTECT MONTEREY COUNTY et al., Michael Geibelson Bernice Conn Lucas A. Messenger Robins Kaplan Deborah A. Sivas Alicia E. Thesing Mills Legal Clinic at Stanford Law School Hollin N. Kretzmann Center for Biological Diversity Catherine Engberg Kevin Patrick Bundy Aaron M. Stanton Shute, Mihaly & Weinberger
Counsel for Amicus Curiae: COMMUNITIES FOR A BETTER ENVIRONMENT Katherine S. Hoff Shana D.G. Lazerow
Counsel for Amicus Curiae: CENTER ON RACE, POVERTY & THE ENVIRONMENT; COMMITTEE FOR A BETTER ARVIN Paulina Nicole Torres
Counsel for Amicus Curiae: LEAGUE OF CALIFORNIA CITIES; CALIFORNIA STATE ASSOCIATION OF COUNTIES Sean Bernard Hecht UCLA School of Law Benjamin Avi Harris Chambers of Judge Stephen V. Wilson