MALAGA COUNTY WATER DISTRICT, Plaintiff and Appellant, v. STATE WATER RESOURCES CONTROL BOARD et al., Defendants and Respondents.
F075868
(Super. Ct. No. MCV071280)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT
Filed 12/10/20
James E. Oakley, Judge.
CERTIFIED FOR PUBLICATION
APPEAL from an order of the Superior Court of Madera County. James E. Oakley, Judge.
Xavier Becerra, Attorney General, Robert W. Byrne, Assistant Attorney General, Eric M. Katz and Adam L. Levitan, Deputy Attorneys General, for Defendants and Respondents.
-ooOoo-
This is one of several cases before this court involving disputes between the Malaga County Water District (Malaga) and the agencies involved in issuing and enforcing the permits necessary for Malaga to operate its waste treatment facility. In this case, the Central Valley Regional Water Quality Control Board (Water Quality Board) imposed penalties totaling $78,0001 on Malaga for violating the water discharge requirements of its permit. Through an administrative writ review, Malaga contends these penalties were inappropriately imposed for several reasons. For the reasons set forth below, we agree with Malaga that laches is a proper defense in administrative sanctions proceedings, and that the Water Quality Board utilized a void underground regulation when it issued the “Hearing Procedure for Administrative Civil Liability Complaint R5-2013-0527” (Hearing Procedure) in this case. (Some capitalization omitted.) The first issue may only affect some of the penalties imposed by the Water Quality Board while the
FACTUAL AND PROCEDURAL BACKGROUND
This case follows a determination by the Water Quality Board that Malaga had violated certain wastewater discharge requirements and an accompanying $78,000 total penalty. The formal administrative proceedings began on May 1, 2013, with the filing of an administrative civil liability complaint (complaint). Attached to the complaint was a list summarizing the purported violations, created by Water Quality Board staff members, reflecting several violations occurring between 2007 and 2011.
These violations were initially identified to Malaga through a July 8, 2010 notice of violation and a subsequent November 5, 2010 revised notice of violation. A new notice of violation and draft record of violations issued December 9, 2011, identifying alleged violations occurring between March 14, 2008, and October 30, 2011. The complaint also stated that Malaga had additional violations between February 1, 2004, and March 13, 2008, that were subject to mandatory minimum penalties. Malaga contends that it responded to each of the notices of violation at issue in this case, but that its responses did not lead to further dialog. It also notes that early violations occurring between 2008 and 2010 were purportedly addressed and suspended prior to these notices, provided Malaga completed certain compliance projects.
At some point prior to the administrative hearing, Malaga was provided with the Hearing Procedure that would be utilized. Malaga claims the document was not timely provided, being received by Malaga on May 6, 2013, and counsel on May 16, 2013, despite having deadlines of May 10, 2013, for objections. The document further limited the time to present to 30 minutes for each side and stated that all evidence other than witness testimony, all witness lists, and all legal and technical arguments must be submitted in advance of the hearing to the Prosecution Team or the Advisory Team.
Malaga objected to the Hearing Procedure. Responses to these objections suggested the Hearing Procedure was adopted in 2012 by the chairman of Water Quality Board, but that various deadlines may have been set by the
Malaga also objected to the Prosecution Team submitting any evidence in the case, claiming it was irrelevant because the proceedings were barred by laches. Coupe‘s email summarized a ruling that the evidence was not irrelevant under the statutory scheme, but it also modified the Hearing Procedure to allow for an additional 10 minutes per side to argue the laches issue.
The administrative hearing occurred on July 25, 2013. At that hearing, Malaga raised objections to Coupe‘s opinions and the Hearing Procedure. These objections were overruled by the Chairman of the Water Quality Board, Dr. Karl Longley. Malaga also objected to several filings and a prior State Water Resources Control Board (State Water Board) decision in an unrelated case that was submitted for review. These objections were also overruled.
With respect to the evidence presented, the Prosecution Team primarily relied upon Lonnie Wass. Wass provided a summary of the known violations compiled by Water Quality Board staff from Malaga‘s self-monitoring reports, provided his opinion on why certain violations required imposition of mandatory minimum penalties, and explained why the total violation penalty recommendation was $78,000. Malaga made objections to the testimony, which were overruled by Chairman Longley. A later motion to strike Wass‘s testimony was also overruled by Chairman Longley.
Malaga then cross-examined Wass on his testimony. Wass confirmed that he could not identify specific documents supporting his summary but was relying on staff efforts to compile the violations from Malaga‘s self-monitoring reports. As Malaga‘s cross-examination continued, the Prosecution Team raised objections. These were generally, but not universally, sustained by Chairman Longley, a point Malaga contends affected its opportunity to cross-examine the witness.
Malaga‘s president, Charles Garabedian, testified on behalf of the company. He testified that due to the delay in proceedings, Malaga had lost the ability to determine who had caused the effluent violations and therefore could not shift the cost of the penalties to the polluter. He further testified that the proposed penalty was around 15 percent of Malaga‘s budget, and that Malaga could not afford to pay such a penalty. Malaga claims that it was precluded from presenting additional evidence about its claimed inability to
The Water Quality Board ultimately imposed the recommended $78,000 penalty without granting any of the relief options available when penalties are issued to rural wastewater treatment facilities serving small communities. The order entered parroted the language of the complaint, with additional language rejecting the laches claim. Malaga petitioned the State Water Board for review of this order. This petition was dismissed by the executive director of the State Water Board for failing “to raise substantial issues that are appropriate for review by the State Water [] Board.” Malaga then filed a petition for writ of administrative mandamus pursuant to
DISCUSSION
Malaga‘s brief identifies three main contentions and includes several subparts, some of which are well defined and some of which are not. At the highest level, Malaga first contends the trial court wrongly concluded that laches is not a defense in the underlying administrative proceedings. Further, Malaga argues that laches should arise after a one-year delay in prosecution, and, under that period, all claims brought against Malaga were improper. Next, Malaga contends the Water Quality Board violated the Administrative Procedure Act (APA;
Standard of Review
Decisions made by the Water Quality Board or the State Water Board may be reviewed by way of a writ of mandate. (
The primary issue in this appeal is Malaga‘s contention that the Water Quality Board and trial court wrongly determined, as a matter of law, that laches is not a defense to the administrative proceedings at issue. As this determination is purely legal in nature, we utilize a de novo review. (See Hoag Memorial Hospital Presbyterian v. Kent (2019) 36 Cal.App.5th 413, 421 [” ‘If a question of law is presented, we undertake a de novo review of the [agency‘s] ruling’ “]; Hoitt v. Department of Rehabilitation (2012) 207 Cal.App.4th 513, 522 [“Issues of law raised in a petition for a writ of administrative mandate, including the interpretation of applicable statutes or regulations, are for the courts to resolve de novo“].)
Malaga also contends, identifying various issues, that it did not receive a fair trial in its administrative proceedings. We also ” ‘review the fairness of the administrative proceeding de novo.’ (Doe v. University of Southern California, [(2018)] 28 Cal.App.5th [26,] 34; see Doe v. University of Southern California (2016) 246 Cal.App.4th 221, 239 [’ “challenge to the procedural fairness of the administrative hearing is reviewed de novo on appeal because the ultimate determination of procedural fairness amounts to a question of law” ‘].)”
Finally, Malaga argues there was insufficient evidence to support the penalties issued. Central to this contention is the assertion that the Water Quality Board relied exclusively on hearsay evidence to reach its conclusion. “In determining whether administrative findings are supported by the evidence, the superior court applies one of two tests: (1) independent judgment or (2) substantial evidence. (
Malaga argues for an independent judgment review, contending a “permit gives rise to a fundamental vested right to operate under the permit,”
Laches is an Equitable Defense to Violations of Section 13385
The primary dispute in this case is whether laches is an equitable defense to administrative penalties imposed by the State Water Board or a regional board. Both the Water Quality Board and the trial court concluded that, as a matter of statutory interpretation, laches could not apply to administrative proceedings pursued under section 13385. Malaga argues this conclusion is wrong. As this issue is a matter of law involving statutory interpretation, our review is de novo. (Hoag Memorial Hospital Presbyterian v. Kent, supra, 36 Cal.App.5th at p. 421.) In this portion of the opinion, we conclude laches is an equitable defense to penalties imposed under section 13385, and review what time period, if any, may create a presumption of laches in administrative proceedings under this section.
Overview of laches
Laches is an equitable principle that bars certain claims or proceedings based on a combination of unreasonable delay in pursuing the claims
This principle “has been made applicable to quasi adjudicative proceedings as a common law policy pursuant to the ‘inherent power [of courts] independent of statutory provisions to dismiss an action on motion of the defendant where it is not diligently prosecuted.’ ” (Brown v. State Personnel Bd. (1985) 166 Cal.App.3d 1151, 1158 (Brown).) Thus, in ” ‘appropriate circumstances, the defense of laches may operate as a bar to a claim by a public administrative agency ... if the requirements of unreasonable delay and resulting prejudice are met.’ ” (Fountain Valley Regional Hospital & Medical Center v. Bonta (1999) 75 Cal.App.4th 316, 323.) Notably, “delay alone does not constitute laches because ‘[t]he policy of this state with respect to lapse of time is [separately] embodied in statutes [of limitation].’ ” (Brown, at p. 1159.)
It is frequently recognized that there are two general ways to demonstrate unreasonable delay and resulting prejudice. In the first, the party arguing laches bears the burden of proof and is required to present evidence sufficient to tip the equitable balance toward preclusion in order to prevail. In the second, an unreasonable delay is established as a matter of law and prejudice is presumed. In this scenario, the party opposing the imposition of laches bears the burden of demonstrating there was a reasonable excuse for delay. (See Fountain Valley Regional Hospital & Medical Center v. Bonta, supra, 75 Cal.App.4th at pp. 323–324.)
As a burden shifting proposition in administrative proceedings, the second scenario discussed above is difficult to invoke. It is well understood that statutes of limitation are inapplicable to administrative proceedings. (Coachella Valley Mosquito & Vector Control Dist. v. California Public Employment Relations Bd. (2005) 35 Cal.4th 1072, 1088.) To establish unreasonable delay as a matter of law and presume prejudice, courts “sometimes adopted for purposes of laches ‘a period within which its aid must be sought similar to that prescribed in analogous cases at law.’ ” (Brown, supra, 166 Cal.App.3d at p. 1159.) Thus, where “no statute of limitations directly applies but there is a statute of limitations governing an analogous action at law, the period may be borrowed as a measure of the outer limit of reasonable delay in determining laches.” (Id.
Overview of relevant laws
Malaga‘s penalties were imposed under section 13385.3 Subdivision (a) imposes liability upon those that violate waste discharge requirements or otherwise violate various provisions of California or federal clean water laws. Subdivisions (b) and (c) provide alternative enforcement means with differing penalties for those accused of violations. Thus, in subdivision (b), a civil action may be filed by the Attorney General that results in maximum penalties of approximately $25,000 per day. In subdivision (c), enforcement may be achieved through an administrative hearing brought “by the state board or a regional board pursuant to Article 2.5 (commencing with Section 13323) of Chapter 5,” but the maximum penalties may not exceed approximately $10,000 per day.4 Subdivision (e) provides statutory guidance for calculating the proper amount for the penalty actually imposed, including various factors to consider, with its final guidance being that at a “minimum, liability shall be assessed at a level that recovers the economic benefits, if any, derived from the acts that constitute the violation.”
Relevant to the dispute in this case, subdivisions (h) and (i) identify minimum penalties to impose in specific circumstances. Thus, in subdivision (h)(1), the statute provides that “[n]otwithstanding any other provision of this division, and except as provided in subdivisions (j), (k), and (l), a mandatory minimum penalty of three thousand dollars ($3,000) shall be assessed for each serious violation.” Subdivision (h)(2) defines a serious violation as “any waste discharge that violates the effluent limitations contained in the applicable waste discharge requirements for a Group II pollutant, as specified in Appendix A to Section 123.45 of Title 40 of the Code of Federal Regulations, by 20 percent or more or for a Group I pollutant, as specified in Appendix A to Section 123.45 of Title 40 of the Code of Federal Regulations, by 40 percent or more.”
Similarly, in subdivision (i), a mandatory minimum penalty of $3,000 is to be assessed “whenever the person does any of the following four or more times in any period of six consecutive months, except that the requirement to assess the mandatory minimum penalty shall not be applicable to the first three violations: [¶] (A) Violates a waste discharge requirement effluent limitation. [¶] (B) Fails to file a report pursuant to Section 13260. [¶] (C) Files an incomplete report pursuant to Section 13260. [¶] (D) Violates a
Subdivisions (j), (k), and (l), as referenced in both subdivisions (h) and (i), provide for limited exceptions to these minimum penalties. Thus, in subdivision (j), the minimum penalties in subdivisions (h) and (i) are not applicable to discharges resulting from “[a]n act of war“; “[a]n unanticipated, grave natural disaster or other natural phenomenon of an exceptional, inevitable, and irresistible character, the effects of which could not have been prevented or avoided by the exercise of due care or foresight“; “[a]n intentional act of a third party, the effects of which could not have been prevented or avoided by the exercise of due care or foresight“; the “operation of a new or reconstructed wastewater treatment unit during a defined period of adjusting or testing” provided various requirements are met (
Under subdivision (k), the statute provides an alternative to issuing all or a part of the minimum penalties against “a publicly owned treatment works serving a small community.” Under this provision, the penalties can be replaced by a project designed to bring the discharger into compliance with its applicable requirements. This is permitted if three conditions are met: (1) the compliance project is designed to correct the violations within five years; (2) the project is in accordance with the enforcement policy of the State Water Board; and (3) there is a financing plan to complete the compliance project prepared. (
Finally, under subdivision (l), with the discharger‘s consent, a specified portion of the minimum penalty can be directed toward “a supplemental environmental project.” (
Availability of laches as a defense to administrative actions under section 13385
Based on the policy embodied in Brown, we begin with the understanding that laches should typically be available as a defense in administrative proceedings run by the state. The State Water Board makes two arguments why we should nonetheless conclude that section 13385 does not permit a defense of laches to its administrative enforcement proceedings. In the first, the State Water Board argues that equitable defenses cannot be used to countermand statutory commands on matters that are plain and fully covered by a positive statute. Under this argument, the State Water Board contends that section 13385 is plain and clear on the position that the only recognized defenses to the mandatory minimum penalties contained in subdivisions (h) and (i) are those specific examples contained in subdivision (j), which do not include any equitable rights. In the second argument, the State Water Board contends that imposition of laches would impermissibly nullify an important policy adopted for the public‘s benefit and thus cannot be invoked against a government agency‘s actions. We do not agree with the State Water Board on either point.
On the first argument, that the statutory scheme plainly and fully covers this situation, the State Water Board‘s position turns exclusively on the claim that the express identification of defenses in subdivision (j) demonstrates that all equitable defenses were expressly precluded. We reject this position for two reasons.
First, the language of section 13385 does not plainly exclude a defense of laches. Subdivisions (h) and (i) both impose mandatory minimum penalties for those adequately proven discharges or actions that meet certain specific criteria. In other words, they are mandatory minimum penalties for a subset of violations of subdivision (a)‘s identification of actions subject to civil liability. As such, subdivisions (h) and (i)‘s language is couched in terms of penalties for certain actions but says nothing about when or whether those actions can be brought in an administrative or judicial proceeding. Indeed, as Malaga notes, the prefatory language of both subdivisions (h) and (i), “[n]otwithstanding any other provision of this division, and except as provided in subdivisions (j), (k), and (l)” (
No similar language is contained in subdivision (j). Rather, subdivision (j) begins by limiting itself to only identifying situations where the mandatory minimum penalties will not be applicable. (
Second, we also reject the State Water Board‘s argument because allowing the application of laches is consistent with the overall statutory scheme. The limited substantive defenses of subdivision (j), like the mandatory minimum penalties of subdivisions (h) and (i) and their similarly situated exceptions in subdivisions (k) and (l), are not applicable only to administrative proceedings brought under subdivision (c). They are equally applicable to judicial proceedings brought by the Attorney General under subdivision (b). In the context of judicial proceedings, the need to limit prosecution of stale claims has been clearly stated in
Rather, the legislative history suggests the opposite. As detailed in City of Brentwood v. Central Valley Regional Water Quality Control Bd. (2004) 123 Cal.App.4th 714, 725 (Brentwood), when discussing the legislative history of the mandatory minimum penalties provisions and their exceptions, such as subdivision (j), “the goal of the legislation
For this same reason we also reject the State Water Board‘s contention that laches cannot bar agency enforcement actions because it would nullify an important policy adopted for the public‘s benefit. In streamlining the proof required for demonstrating a violation, specifically creating a statute of limitations for court actions while permitting state-level administrative actions to enforce these violations where a common-law application of laches exists,5 and highlighting the need to ensure speedy and effective prosecutions, the overall framework of California‘s enforcement scheme is designed to quickly stop and remedy polluting discharges. The legislative history suggests that this design is intentional, purposefully seeking to correct statistics showing only 1 percent of known violations were resulting in administrative penalties. (Brentwood, supra, 123 Cal.App.4th at p. 725.)
The application of laches furthers a policy of quick and timely enforcement and, ultimately, of ensuring the state‘s waters are clean. While the State Water Board suggests that laches will hinder effective enforcement
Adopting a relevant statute of limitations
Having concluded that laches may be asserted as a defense to administrative enforcement actions under
Our discussion above, concerning whether laches applies to administrative actions, demonstrates that the relevant statutory scheme and policies underlying it support adopting a statute of limitations for a violation of
In this case, the three-year statute of limitations contained in
The timeline of the amendments to the relevant statutory provisions show that
Further, that several amendments have been made to both
Conclusion
Accordingly, although it may be difficult for Malaga to succeed on a laches defense, even accounting for the potential burden shifting arising from the relevant statute of limitation, given its own self-monitoring reports are deemed admissions and it is statutorily limited in potential substantive defenses (see Wells Fargo Bank v. Goldzband (1997) 53 Cal.App.4th 596, 632–633 [substantial delay in enforcing well closure requirements not prejudicial as the final order did not create liability that did not otherwise exist and any action for indemnification was a private matter between the plaintiff and other parties]), we conclude that the Water Quality Board wrongly concluded that the equitable defense of laches was unavailable to Malaga. We further note that any claims where the Water Quality Board could be said to have known of the violation more than three years before the enforcement action was initiated are subject to the burden shifting presumption that the delay in initiating an action was unreasonable and prejudicial. The trial court thus erred in concluding laches was not a viable defense in this case.
Malaga‘s APA Violation Claims
In addition to the argument that laches applies to the relevant administrative proceedings, Malaga also raises a multitude of issues regarding the proceedings themselves. Malaga does this in a free-form argument that does not separate its arguments by heading or topic. Malaga alleges that the issues raised are violations of the APA and that they deprived Malaga of a fair trial. Although not perfectly clear in scope, upon review of the briefing it appears
Longley acted in excess of his authority in ruling on pending motions. We take each in turn.
1) Malaga’s underground regulations claim
Malaga’s first APA violation claim is an assertion that two documents utilized by the Water Quality Board or the State Water Board to govern the underlying proceedings—the Hearing Procedure and another document described as a “Water Quality Enforcement Policy“—constitute underground regulations. Malaga expands upon this argument in its reply brief, focusing first on an assertion the State Water Board’s executive director could not rely on the water quality enforcement policy in making any decisions because it was adopted as a guideline and not a formal regulation. It then focuses its arguments on the Hearing Procedure, mirroring the arguments it raised in another pending appeal, case No. F078327, while discussing the specific facts of this case. Malaga contends generally that reliance on an underground regulation, as a violation of the APA, requires reversal of the underlying order in all instances.
For the reasons set forth in the next section, we decline to reach whether the State Water Board’s use of the water quality enforcement policy satisfies the test for relying on an underground regulation. As noted there, claims against the State Water Board have been waived and, regardless, would fail on the merits. However, despite the limited analysis provided by Malaga with respect to the Hearing Procedure, we reach a different conclusion with respect to that document. In our analysis in case No. F078327, we conclude that a more recent version of the Hearing Procedure utilized by the Water Quality Board constitutes an underground regulation, but that its use does not mandate immediate reversal. Rather, it is incumbent upon Malaga to demonstrate prejudice arising from its use to warrant reversal of the underlying penalties. We take judicial notice of those proceedings and fully incorporate our legal analysis as if set forth fully herein.
Recognizing that a hearing procedure can constitute an underground regulation under certain factual scenarios, we next consider whether Malaga
Malaga makes a sufficient showing to demonstrate that the Hearing Procedure is intended to be a general rule that governs the agency’s procedure. Similar to the proceedings in case No. F078327, Malaga points out here that the Hearing Procedure implements a pre-approved template designed for use in all proceedings. And, upon review, the Hearing Procedure in this case shares at least some of the additional requirements, such as pre-hearing submission of rebuttal evidence, that we concluded were improper for exceeding the duly adopted regulations in this area when considering the hearing procedure document in case No. F078327. In addition, Malaga provides evidence that the Hearing Procedure set its submission deadlines based on a standardized timeline utilized in all cases, raising additional problems with the document.
The State Water Board contends the Hearing Procedure cannot be a regulation because it satisfies the requirements of
While an underground regulation defined the procedural requirements for Malaga’s hearing, as discussed in case No. F078327, this does not mean reversal is required. Rather, consistent with Reilly v. Superior Court, 57 Cal.4th 641, we concluded a harmless error analysis applies in such circumstances. Here, as in case No. F078327, there has been no factual development or
2) To the extent Malaga raises claims against the State Water Board, they fail
The next portion of Malaga’s argument is devoted to a partially developed claim that the trial court ignored issues raised before it and improperly concluded Malaga had waived its claims against the State Water Board. Malaga’s arguments contain no citation to any law or any direct legal argument, but they contend that the executive director of the State Water Board acted improperly by rejecting Malaga’s petition for review of the Water Quality Board’s ruling and by determining whether “Malaga is or is not a publicly owned facility serving a community with a financial hardship.” Respondent properly argues that such thin arguments are considered waived on appeal. (See In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 830 [“The absence of cogent legal argument or citation to authority allows this court to treat the contentions as waived“].)
However, even were we to consider Malaga’s arguments, we would find no error. The actions Malaga focuses on were ultimately irrelevant. To the extent Malaga contends the executive director acted improperly by denying its petition for review, we note that petitions for review not acted upon by the State Water Board are deemed denied as a matter of law. (
Malaga contends that the Water Quality Board’s decision rejecting the applicability of laches as a defense improperly relied upon a draft State Water Board order. Specifically, Malaga argues that the order in question was not properly declared to be precedent and thus could not be cited under
The trial court found, and Malaga does not contest, that the Water Quality Board did not “expressly” rely on the draft order. Regardless, Malaga argues the Water Quality Board does “not need to expressly rely” on the draft order to violate the statute and points out that the language of the order adopted in this case mirrored the language in the draft order. The State Water Board replies by citing In re Fishery Protection and Water Right Issues of Lagunitas Creek (Jan. 18, 1996) State Water Resources Control Board Order No. WR 96-1, page 17, footnote 11 [1996 Cal. Env Lexis 4, p. *25, fn. 11], an old administrative order designating all decisions precedential as required under the statute, noting the Water Quality Board discussed many precedents supporting its conclusion, and contending any error is harmless as the underlying dispute concerning the scope of laches as a defense is an issue of law decided de novo on appeal.
We note at the outset that we disagree with Malaga’s contention that express reliance on a nonprecedential decision is not required. The clear language of the statute dictates that no decision may be “expressly relied upon as precedent” unless designated as such, thus confirming express reliance is required. Such a rule makes sense, as the agency should be permitted, as all courts are, to review its nonprecedential decisions to gain a greater understanding of how the law has been viewed and issues resolved in the past. It is only when treating those decisions as binding that the need for designation as precedential arises. As there is no argument in this case, other than a similarity in language, that the Water Quality Board treated the draft order as binding precedent, we find no error. This conclusion is buttressed by the fact that the Water Quality Board was informed of relevant decisions by counsel and discussed additional recent precedent that they concluded supported their decision. These precedents are not subject to Malaga’s attack. Thus, even if the order’s final language parroted a nonprecedential decision, the record reflects the fact that the Water Quality Board was considering and
4) Coupe did not improperly act as a member of the Prosecution Team
Malaga argues that the Water Quality Board’s senior counsel on the Advisory Team, David Coupe, acted improperly during the proceedings such that his role should be viewed as encroaching on the separation of the Advisory Team and Prosecution Team required by the APA. More specifically, Malaga contends that Coupe acted as the de facto decision maker on several motions raised by Malaga, dictated to the Water Quality Board what its rulings and actions must be, provided testimony regarding the appropriateness of any delay in prosecuting the action, and improperly cut off counsel to ask questions of witnesses. We find none of these claims persuasive.
With respect to rulings made during the proceedings, Malaga’s argument is somewhat inconsistent with another position taken in this litigation, that the Water Quality Board’s chairman could not act alone in ruling on motions. If Malaga’s contention is correct, that Chairman Longley made these rulings, its contention that Coupe acted improperly cannot stand. Regardless, in our review we see nothing improper about Coupe’s alleged role in drafting orders to be signed by the Water Quality Board or its chairman. The record regularly reflects Chairman Longley requesting advice from Coupe but no indication the Water Quality Board or Chairman Longley believed that advice binding. Indeed, Water Quality Board members made multiple motions to resolve disputed issues based on the evidence presented before them. The overall record provides no indication that Coupe served as a de facto or other type of decision maker for the Water Quality Board. Similarly, we see no indication Coupe’s advice was seen as binding by the Water Quality Board or Chairman Longley such that Malaga’s claim Coupe was dictating the results of the proceedings can withstand scrutiny.
We also reject Malaga’s claims that Coupe acted improperly by providing testimony on substantive issues or by precluding counsel from asking relevant questions. With respect to the testimony issue, Malaga concedes in its argument that most of the alleged testimony was either “argument in support of the assertions in his written decision” or “in the form of a legal opinion that laches was not a recognized defense in these proceedings.” Upon review of the record cited by Malaga in support of its claim, it is abundantly clear that Coupe is providing his opinion on the state of the law and the reasons why the law dictates a specific result in this case. Moreover, in all of these
5) Chairman Longley could properly rule on pending motions
Malaga next contends that Chairman Longley exceeded his authority by ruling on motions, evidentiary objections, and other procedural matters. Citing
The State Water Board disputes this logic, arguing Chairman Longley was authorized to rule on these matters as the presiding officer of the Water Quality Board and citing
We agree with the State Water Board. Malaga’s claim that a “presiding officer” is defined under
Substantial Evidence Supports the Water Quality Board’s Determination
Finally, Malaga argues that there was insufficient evidence admitted to sustain the Water Quality Board’s penalties. Related to this contention, and argued partially in Malaga’s APA violation discussion, is the claim that no evidence was properly admitted showing actual violations of the discharge requirements. Malaga states that the only evidence entered at the hearing was the improper narrative testimony of Wass and an attachment summarizing alleged violations that Malaga objects to as hearsay. Malaga acknowledges that other documents, including Malaga’s own self-monitoring reports, were made part of the administrative record, but claims their admission violates
The State Water Board contests these positions. On the admission of relevant evidence and narrative testimony, the State Water Board relies on the specific language of
”
We conclude this issue is readily resolved through the principles underlying the substantial evidence standard of review. The trial court and this court is obligated to review the entire administrative record to determine whether substantial evidence supports the Water Quality Board’s decision. (See Bixby v. Pierno (1971) 4 Cal.3d 130, 149 & fn. 22.)
In this case, Malaga has not raised any specific argument that its own self-monitoring reports are not within the administrative record. In its response, the State Water Board routinely cites to the administrative record when pointing this court to portions of Malaga’s self-monitoring reports where violations are shown. Rather, Malaga generally argues that these documents were not directly introduced or discussed at the administrative hearing nor specifically referenced in the final statement of decision. Malaga then contends that the summary of these self-monitoring reports was hearsay and thus unreliable. While Malaga also hints that the summary was incorrect, Malaga raises no specific argument as to how any of the identified violations were not actually violations of the underlying discharge requirements nor how any specific violation should not result in penalties.
As explained in Lake, supra, 16 Cal.4th at page 458, while hearsay evidence is insufficient to support a point itself, it is perfectly acceptable evidence to rely upon in an administrative proceeding to supplement or explain other admissible evidence. Thus, while the Water Quality Board could not make a finding if the only evidence in the record was the summary contained in attachment A, or the hearsay portions of Wass’s testimony, such evidence may be introduced and relied upon if it supplements or explains other evidence showing violations. Upon review of the entire record, it is clear that such evidence, admissible as a party admission by Malaga, is in the record in the form of Malaga’s self-reported violations. Similar to Lake, once it is shown that such evidence is in the record, it is perfectly acceptable to rely upon hearsay evidence that supplements or explains what those documents show. Here, that evidence is Wass’s testimony and the summary created by Water Quality Board staff. There appears no argument this evidence is not the sort of evidence on which responsible persons are accustomed to rely on in the conduct of serious affairs.
While Malaga’s arguments distill to a claim the underlying self-reported violations needed to be individually introduced at the hearing and specifically identified by the Water Quality Board in its final decision, it cites no law which mandates such a specific course of conduct. Regardless, a
Ultimately, Malaga cannot demonstrate the Water Quality Board’s choice to utilize the limited time before it to listen to a summary of the evidence submitted, and to rely upon that summary rather than requiring courtroom level evidence on each point, is erroneous in the context of these administrative proceedings. Upon review of the entire record, we conclude that substantial evidence was introduced in the proceedings that supports the Water Quality Board’s imposition of penalties.
Conclusion
Upon consideration of the various issues Malaga has raised, we have found two errors. First, laches is a proper defense to the administrative proceedings in this case. A three-year period should be used to determine whether laches is presumed to bar any proposed penalties. Second, the Water Quality Board’s Hearing Procedure constitutes a void underground regulation. However, to warrant voiding the penalties imposed here, Malaga must demonstrate using the Hearing Procedure was not harmless. In all other respects, we find no error.
DISPOSITION
The superior court’s order denying Malaga’s petition for a writ of administrative mandamus is affirmed in part and reversed in part. The matter is remanded for the trial court to determine whether the writ should issue based on one or both of Malaga’s right to present a laches defense and the Water Quality Board’s use of a void underground regulation via the Hearing Procedure.
Malaga is entitled to its costs on appeal.
HILL, P.J.
WE CONCUR:
LEVY, J.
DETJEN, J.