PACIFIC GAS AND ELECTRIC COMPANY, Plaintiff and Appellant, v. COUNTY OF STANISLAUS et al., Defendants and Respondents.
No. S047749
Supreme Court of California
Dec. 4, 1997
16 Cal. 4th 1143
Nossaman, Guthner, Knox & Elliott, William T. Bagley, Douglas J. Maloney, Alan D. Miller, J. Michael Reidenbach, Joshua Bar-Lev, McKenna & Cuneo and Howard V. Golub for Plaintiff and Appellant.
Daniel E. Lungren, Attorney General, Roderick E. Walston, Chief Assistant Attorney General, Thomas Greene, Assistant Attorney General, Richard N. Light and Sanford N. Gruskin, Deputy Attoneys General, Sedgwick, Detert, Moran & Arnold, Frederick D. Baker, Kirk C. Jenkins, O‘Melveny & Myers, Henry C. Thumann and Steven P. Basileo as Amici Curiae on behalf of Plaintiff and Appellant.
Michael H. Krausnick, County Counsel, and Andrew N. Eshoo, Deputy County Counsel, for Defendants and Respondents.
OPINION
KENNARD, J.--In this case, a California county brought a class action in the federal court, alleging that a utility company had violated state and federal antitrust laws by illegal price-fixing that had substantially increased the county‘s costs for natural gas. The utility company then initiated this lawsuit in the state court challenging the county‘s power to bring the federal action, contending that only the state Attorney General may bring antitrust actions on a county‘s behalf when, as here, the alleged illegal activities and injuries occurred primarily outside the county. We conclude that the county was entitled to bring the action.
I
On December 3, 1993, Stanislaus County and Mary Grogan, a residential consumer of natural gas, brought a class action in the United States District
Representing Stanislaus County in its action in federal court were county counsel and retained outside counsel.
While the federal lawsuit was pending, PG&E brought, in the Superior Court of Stanislaus County, this taxpayers’ action for injunctive and declaratory relief, naming as defendants the County of Stanislaus, the Stanislaus County Board of Supervisors (both collectively and individually), and the Stanislaus County Auditor/Controller. (For convenience, defendants are hereafter collectively referred to as the County.) PG&E alleged that by bringing the federal class action, the County had exceeded the powers vested in it by law, and that the federal class action therefore constituted an illegal expenditure of public funds. PG&E‘s complaint sought an order enjoining the County from expending public funds to pursue the federal action (
The County demurred to the complaint. The trial court sustained the demurrer without leave to amend, ruling that the County had the power to bring its federal antitrust action and that PG&E‘s complaint for injunctive and declaratory relief failed to state facts sufficient to constitute a cause of action.2 PG&E appealed from the resulting judgment of dismissal.
The Court of Appeal affirmed. Citing subdivisions (a) and (b) of
II
PG&E contends that the County lacked the authority, in its lawsuit in federal court, to allege a cause of action under the state Cartwright Act, because the asserted violations and injuries occurred primarily outside the county boundaries. PG&E does not dispute that consumers injured by violations of the state Cartwright Act may generally bring class actions under the act. It asserts, however, that when, as here, the injured consumer is not an individual but a county, and the violation and injury occur primarily beyond the county‘s boundaries, only the state Attorney General has the authority to sue on a county‘s behalf for violations of the Cartwright Act.5 Before addressing this complex issue, we give a brief overview of the relevant provisions of the statutory scheme involved here.
Our Legislature enacted the Cartwright Act in 1907. The act “generally outlaws any combinations or agreements which restrain trade or competition or which fix or control prices” (Antitrust and Trade Reg. Law Section of the State Bar of Cal., Cal. Antitrust Law (1991) p. 4), and declares that, with certain exceptions, “every trust is unlawful, against public policy and void” (
The third section addressing standing to bring a civil action for treble damages is
Subdivision (c) of
Subdivision (d) of
Under subdivision (e) of
Subdivision (g) of
Subdivision (i) of
The remaining portions of section 16750-subdivisions (f) and (j)-concern the disposition of funds awarded to the state Attorney General in actions for violation of the state Cartwright Act and the Hart-Scott-Rodino Antitrust Improvements Act of 1976. They are irrelevant here.
III
PG&E contends that the County is not entitled, in its antitrust suit in federal court, to allege antitrust violations under the state Cartwright Act. PG&E does not appear to dispute the County‘s capacity to sue, that is, that the County is an appropriate party to a class action lawsuit under the Cartwright Act. PG&E insists, however, that only the state Attorney General could bring a lawsuit on the County‘s behalf, and that the County lacked the authority to bring its own action. We disagree.
Subdivision (a) of
PG&E acknowledges that when read in isolation, subdivisions (a) and (b) of
We disagree. Subdivisions (c) and (g) of
PG&E nevertheless insists that subdivision (g) of
Subdivisions (c) and (g) of
PG&E argues, however, that even if
The goal of statutory construction is to ascertain and effectuate the intent of the Legislature. (Hsu v. Abbara (1995) 9 Cal.4th 863, 871 [39 Cal.Rptr.2d 824, 891 P.2d 804].) Ordinarily, the words of the statute provide the most reliable indication of legislative intent. (Ibid.) When the statutory language is ambiguous, the court may examine the context in which the language appears, adopting the construction that best harmonizes the statute internally and with related statutes. (Ibid.; Woods v. Young (1991) 53 Cal.3d 315, 323 [279 Cal.Rptr. 613, 807 P.2d 455].) ” ‘Both the legislative history of the statute and the wider historical circumstances of its enactment may be considered in ascertaining the legislative intent.’ ” (California Teachers Assn. v. Governing Bd. of Rialto Unified School Dist. (1997) 14 Cal.4th 627, 659 [59 Cal.Rptr.2d 671, 927 P.2d 1175].)
We have already concluded that the most reliable indication of legislative intent-the words of
Through its enactment of
Thereafter, in 1961, the Legislature amended
When the Legislature amended
In 1969, the Legislature again amended
In 1977, the Legislature once again amended
In arguing that the legislative history supports their construction of
The state Attorney General, who has filed an amicus curiae brief on behalf of PG&E, points out that in 1961, when the Legislature amended
We find the Attorney General‘s argument unpersuasive. The 1961 amendments to sections 16750 and 16754 of the Cartwright Act authorize the state Attorney General and the district attorney of any county to bring criminal and civil actions for antitrust violations. But they also clarify that counties, cities, and other political subdivisions have the power to sue. There is nothing in the legislative history leading to the adoption of the 1961 amendments to suggest that they were enacted to bar counties, cities, and other
This conclusion is reinforced by the statement of purpose that the Legislature included with its 1961 amendment to
Next, PG&E and its amici curiae allies argue that the 1977 amendments to
PG&E asserts that to construe subdivisions (a) (all “persons” may sue for violation of the Cartwright Act) and (b) (political subdivisions are “persons“) of
We disagree. Subdivisions (a) and (b) of
There is nothing in the legislative history of the 1977 revisions to support PG&E‘s assertion that those amendments were motivated by a legislative concern that counties, cities, and other political subdivisions lacked the authority to bring antitrust actions under the Cartwright Act. Rather, the legislative history demonstrates a legislative concern to strengthen the district attorney‘s authority in the antitrust arena. A Senate Judiciary Committee report on a portion of the legislation stated: “This is part of a package of bills before the committee ... which were introduced at the request of the L.A. County District Attorney. The bills are intended to strengthen a district attorney‘s ability to prosecute anti-trust and restraint of trade violations.” (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 1158 (1977-1978 Reg. Sess.) pp. 1-2, italics added.) Similarly, an analysis by the Assembly Judiciary Committee stated: “Under existing law, the Attorney General can bring an action on behalf of the state or any of its political subdivisions to recover damages under the state antitrust laws. This bill grants comparable authority to local district attorneys.” (Assem. Com. on Judiciary, bill digest prepared for May 5, 1977, hearing (1977-1978 Reg. Sess.) p. 1, italics added.)7
Also, to hold, as urged by PG&E and its amici curiae allies, that counties, cities, and other political subdivisions lack the power to bring their own civil actions for injuries resulting from antitrust violations under the Cartwright Act would be inconsistent with subdivision (e) of
According to PG&E and its amici curiae allies, to construe
The dissent, relying on federal cases construing federal laws and laws of other states, bases its conclusion that counties lack the authority to bring actions under the Cartwright Act on the “presumption” that “[u]nless the contrary appears affirmatively by statute, the Attorney General has exclusive authority to institute Cartwright Act antitrust proceedings on behalf of all government entities.” (Dis. opn., post, at p. 1161, original italics.) This presumption is inconsistent with California law, which explicitly provides that a county‘s board of supervisors, not the state Attorney General, directs and controls litigation in which a county is a party (
IV
PG&E contends that even if the County may bring an antitrust action under the state Cartwright Act, it lacked the capacity in its federal lawsuit to allege violations of federal antitrust laws. The capacity to bring an action under federal law, PG&E points out, is governed by the law of the state in which the district court where the action was brought is located. (Fed. Rules Civ. Proc., rule 17(b),
PG&E argues that under the California Constitution, counties do not have the inherent power to sue; rather, the Constitution has vested the Legislature with the power to determine the circumstances in which counties may sue and be sued. According to PG&E, the Legislature has not granted counties authority to bring federal antitrust actions. Although we agree with PG&E that the state Constitution does not give counties the inherent power to sue, we conclude that the Legislature has given them the power to do so, as we explain below.
The California Constitution authorizes the Legislature to enact legislation specifying the powers of counties. (
The Legislature, however, has declared that counties have “corporate powers” (
PG&E argues that
PG&E‘s amici curiae allies argue that even if
For the reasons given above, we conclude that the state Cartwright Act does not prohibit a county from bringing an action in federal court for violations of federal antitrust law.
The judgment of the Court of Appeal is affirmed.
George, C. J., Mosk, J., Werdegar, J., Bamattre-Manoukian, J.,* and Buckley, J.,† concurred.
BROWN, J., Dissenting. -Read against the background of historical practice, the language of
*Associate Justice of the Court of Appeal, Sixth Appellate District, assigned by the Chief Justice pursuant to
†Associate Justice, Court of Appeal, Fifth Appellate District, assigned by the Chief Justice pursuant to
I
The language and history of
Relying on our opinion in D‘Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1 (D‘Amico), the federal Court of Appeals for the Fifth Circuit has provided a nutshell description of the powers of the nation‘s state attorneys general. In State of Fla. ex rel. Shevin v. Exxon Corp. (5th Cir. 1976) 526 F.2d 266, that court wrote “the attorneys general of our states have enjoyed a significant degree of autonomy. Their duties and powers typically are not exhaustively defined by either constitution or statute but include all those exercised at common law. There is and has been no doubt that the legislature may deprive the attorney general of specific powers; but in the absence of such legislative action, he typically may exercise all such authority as the public interest requires.” (Id. at p. 268, fns. omitted; see also Nash County, supra, 640 F.2d at p. 494 [“At common law, an attorney general, in the absence of some restriction on his powers by statute or constitution, has complete authority as the representative of the State or any of its political subdivisions ‘to recover damages ... alleged to have been sustained ...’ even though those subdivisions may not have
In other words, in sorting out who within state government has authority to represent whom in judicial proceedings, the starting point is not the assumption that counties possess authority to institute Cartwright Act suits in their own right. Instead, courts should start with the inherent authority of the Attorney General to represent all state entities. The next question is whether that authority has been withdrawn or transferred elsewhere. Has the Legislature affirmatively authorized Stanislaus County to institute the antitrust suit out of which this case arises? The majority has no difficulty arriving at the wrong answer to that question. It looks to the text of subdivision (a) of
But the majority‘s syllogism is doubly flawed. First, it overlooks a settled distinction of public law. Although a public entity may have “capacity” or “standing to sue,” it does not follow from that alone that the Legislature has granted it authority to institute litigation by counsel of its choosing. (See, e.g., Museum Boutique Intercontinental, Ltd. v. Picasso (S.D.N.Y. 1995) 886 F.Supp. 1155, 1159 [” ‘[C]apacity’ and ‘authority’ are distinct concepts. See generally Black‘s Law Dictionary 803, 121 (5th Ed.1979) (defining ‘capacity’ as the ability of a particular ... entity to use ... the courts ... and ‘authority’ as the permission or right to exercise power).“]; Brown v. Ortho Diagnostic Systems, Inc. (E.D.Va. 1994) 868 F.Supp. 168, 170 [“[T]he question presented here is not who can sue or be sued, but rather who can represent whom in federal court.“]; 6A Wright et al., Federal Practice and Procedure (1990) § 1562, p. 454 [“A grant of capacity to a governmental corporation only means that it may sue or be sued in its own name, as opposed to that of the government ....“].)
Second, subdivision (b) of
II
The majority accepts the proposition that the county has the capacity to file this action. (See maj. opn., ante, at p. 1150.) Yet it rejects PG&E‘s corollary argument that
Like many other American jurisdictions, the California Constitution recognizes the Attorney General as the government‘s highest legal official. (
At the federal level, the conclusion we reached in D‘Amico, supra, 11 Cal.3d 1, is imposed by statute, reflecting a kind of nationwide template that has been around since the formative years of the republic. Section 516 of title 28 of the United States Code provides: “Except as otherwise authorized by law, the conduct of litigation in which the United States, an agency, or officer thereof is a party, or is interested, and securing evidence therefor, is
Yet according to the majority‘s logic, not just the Attorney General is authorized to file multicounty Cartwright Act suits. All of the state‘s 58 counties, all of its 470-plus cities, all of the 4,500 school districts, and all of the many less-well-known agencies and subunits of the state‘s political organization are authorized by
III
We do not need unpronounceable Latin phrases (“expressio unius est exclusio alterius“), string citations, or Sutherland on Statutory Construction to know a statute made up of parts ought to be read as a whole, integrating its subdivisions so that each has meaning, the statute in its entirety makes sense and is faithful to the apparent legislative purpose. The majority nevertheless insists on reading subdivisions (a) and (b) of
Originally enacted in 1907,
Also in 1961, the Legislature amended another Cartwright Act statute,
What could have been the Legislature‘s motive in enacting subdivision (g) of
I am at a loss to imagine what these restraints were intended to accomplish if they do not manifest a legislative intention to insure a continuation of central control over the filing of multicounty Cartwright Act and related antitrust proceedings. Of a similar scheme enacted by another state Legislature, the federal Fourth Circuit Court of Appeals has written: “[C]ommon sense dictates that when an alleged wrong affects governmental units on a state-wide basis, the state should seek redress on their behalf as well as on its own rather than parcelling out the actions among local agencies. However, to ease the administrative burden on the Attorney General‘s office, when a single local [government entity] is wronged, that unit should individually pursue the remedy .... This is the scheme, we believe, that the North Carolina Legislature had in mind when it adopted [the statute at issue].” (Nash County, supra, 640 F.2d at p. 496, fn. omitted.) That, I suggest, is this case.
CONCLUSION
We ought to give more thought to the potential impact of today‘s ruling-on California as an organized scheme of government, on the state‘s relation to its constituent political departments, on those who pay taxes and do business here. The result reached by the majority is a crazy quilt of overlapping, conflicting authority to file multicounty antitrust litigation willy-nilly, one likely to generate needless intergovernmental conflict and conclude prematurely some public antitrust claims on res judicata grounds. It amounts to a judge-drawn scheme especially inadvisable in antitrust litigation. In the entire domain of public regulatory law, the field of antitrust, with its “rule of reason” standards, sophisticated economic analysis, and often fine line between restraining predatory practices and stifling beneficial economic competition, seems the least likely candidate for the fractured and diffused litigative authority upheld by the majority.
Antitrust litigation brought by the Attorney General is more likely to be taken seriously by a targeted defendant. Not only does that office have greater investigative resources, expertise and staying power, but the fact that the state‘s highest legal office has placed its imprimatur on the pleadings-implicitly representing the complaint as reflecting that office‘s considered views of the public interest-adds heft to allegations of antitrust misconduct.
Nor should we lose sight of the fact that the check on the filing of ill-conceived antitrust litigation that follows from the Attorney General‘s centralized control over the decision to initiate suit strengthens the government‘s hand by promoting a thorough presuit scrutiny. The unspoken proposition underlying the majority‘s conclusion seems to be that the economic interests of the counties have a dignity equal to that of the state. If so, the argument might run, counties must have an equal right to decide for themselves whether to file Cartwright Act proceedings. Suppose the Attorney General declines to institute suit to challenge business practices that two or more counties believe harm their economic interests. What then? Are these units of government to be left without an antitrust remedy?
The answer may sometimes be “yes.” But that is not quite the catastrophe the majority evidently apprehends. “Counties under the scheme of California government are ‘mere subdivisions of the State.’ (