Opinion
I. Statement of the Case
Petitioners SJCBC LLC (the San Jose Cannabis Buyer’s Collective) (SJCBC) and Pharmer’s Health Center Cooperative, Inc. (Pharmer’s), filed a petition for a writ of mandate in which they sought an order requiring the director of the San Jose Department of Planning, Building and Code Enforcement (the Department) to rescind two nuisance abatement orders concerning the distribution of medicinal marijuana at two locations within the city limits of San Jose.
On appeal from the judgment, petitioners claim that the doctrine of exhaustion of administrative remedies (the Doctrine) was not applicable because their petition came within an exception.
II. Background
On January 22 and January 26, 2010, the Department issued nuisance abatement compliance orders under section 1.14.030 of the San Jose Municipal Code (the Code) to SJCBC and Pharmer’s and the owners of the premises where they had leased space to operate.
The notices then advised the owners, SJCBC, and Pharmer’s that the distribution of marijuana at the two leased premises constituted public nuisances because such distribution violated state and federal law and was not an allowed or conditional use in any industrial zoning district in San Jose. The notices further advised that the “[operation of an illegal and unpermitted Medical Marijuana/Cannabis Dispensary in a Commercial Pedestrian Zoning District is not an allowed or conditional use in any industrial zoning district.” Consequently, the notices required that any and all distribution at the two locations cease on or before February 28, 2010.
In March 2010, SJCBC’s landlord had obtained a preliminary injunction prohibiting SJCBC from dispensing marijuana at its leased premises. On April 1, 2010, Pharmer’s landlord had initiated eviction proceedings against
III. Standard of Review
We review the denial of the petition for a writ of mandate on the ground of failure to exhaust administrative remedies under different standards depending on the basis of that decision. We exercise independent review over questions of law such as the interpretation of applicable statutes or codes and whether the Doctrine applies in a given case; we apply the substantial evidence test to factual matters concerning what a party did or did not do. (See Womack v. San Francisco Community College Dist. (2007)
IV. Exhaustion of Administrative Remedies
Petitioners contend that the Doctrine does not apply here because the petition sought an order requiring the director to act in conformance to the law. Petitioners further contend that the Doctrine was inapplicable because their claims were not governed by the Code, the administrative agency lacked authority and jurisdiction to rule on their claims, the alleged administrative remedy was illusory, and pursuing it would have been futile.
A. Applicable Principles
The Doctrine “refers to the requirement that administrative remedies be pursued as a jurisdictional prerequisite to seeking judicial relief from an administrative action.” (California Correctional Peace Officers Assn. v. State Personnel Bd. (1995)
That said, however, the Doctrine “has not hardened into inflexible dogma.” (Ogo Associates v. City of Torrance (1974)
To determine whether the Doctrine applied and precluded judicial relief in this case, we first examine the administrative remedy under the Code that petitioners allegedly should have pursued and exhausted before seeking a writ of mandate.
Section 1.14.030, subdivision A, provides, “Whenever the director determines that a violation of any provision of [the Code] within the director’s responsibility is occurring or exists, the director may issue a written compliance order to any person responsible for the violation.”
If the person responsible corrects the alleged violation within the time specified, the director need take no further action. (§ 1.14.050, subd. A.) However, if the person does not correct the violation within the specified time, the director must set a hearing before the administrative appeals board, and notice of the hearing must be sent to the party. (§§ 1.14.050, subds. B & C.) The notice must set forth the date, time, and place of the hearing and “serves to provide the full opportunity of a person subject to a compliance order to object to the determination that a violation has occurred and/or . . . continued to exist. The failure of any person subject to a compliance order, pursuant to this chapter, to appear at the hearing shall constitute a failure to exhaust administrative remedies.” (§ 1.14.060, subds. A & C.) At the hearing, the board must take evidence concerning the violation and compliance, and issue written findings on (1) whether there was a violation and (2) whether the responsible party failed to correct it. (§ 1.14.070, subds. A-C.) If the board finds that there was a violation that was not corrected, it must issue an administrative order requiring that the violation be corrected, setting a time for correction, and possibly imposing penalties and administrative costs. (§§ 1.14.070, subd. E, 1.14.080.) If the board finds that there was no violation or that it was corrected, it must issue a finding of those facts. (§ 1.14.070, subd. F.)
Finally, when the board issues an administrative order finding an uncorrected violation, the aggrieved person “may obtain review of the administrative order in the superior court” through a petition for administrative mandate. (§ 1.14.120; see Code Civ. Proc., § 1094.5.)
C. Adequacy and Availability of an Administrative Remedy
Under the Code provisions cited above, a nuisance abatement compliance order issued by the director is not necessarily the final administrative
Clearly, if a person receives an order, refuses to comply, receives notice of a hearing, fails to attend the hearing, and then seeks judicial review of the compliance order, the Doctrine would apply and bar judicial review. Indeed, the Code expressly advises that the failure to attend the hearing constitutes a failure to exhaust administrative remedies.
In this case, the landlords, who received their own orders, in effect, complied with them and abated the nuisance by proceeding to evict petitioners from the leased premises where the alleged nuisances existed. Presumably for this reason the director did not initiate a hearing at which petitioners could have challenged the compliance orders. Moreover, as noted, petitioners could not directly and immediately initiate an administrative hearing on their own regardless of whether they complied with the order. Simply put, therefore, administrative review before the board was not a remedy that petitioners could have pursued for relief. In our view, the administrative review procedure under the Code constituted an illusory remedy for petitioners.
There is settled authority for the proposition that “[t]he exhaustion requirement is not applicable where an effective administrative remedy is wholly lacking.” (3 Witkin, Cal. Procedure (5th ed. 2008) Actions, § 336, p. 436; see, e.g., Rosenfield v. Malcolm (1967)
Pertinent here is Eye Dog Foundation v. State Board of Guide Dogs for the Blind (1967)
In this case, as in Eye Dog Foundation, the petitioners could not have initiated the administrative review that they allegedly were required to exhaust, and the party authorized to do so—the director—did not do so before petitioners sought judicial relief. Moreover, unlike the Attorney General in Eye Dog Foundation, the director here never initiated the administrative review procedure that petitioners could then have exhausted before seeking judicial relief.
Under the circumstances, we will not credit the Department’s claim that the Doctrine applies because petitioners failed to demonstrate “that the administrative process was fully exhausted, i.e., that a hearing before the board occurred, and that the board made a decision and issued an administrative order.” This claim overlooks the fact that petitioners could not initiate the administrative process to challenge the validity of the compliance orders; and the director never initiated that process.
The Department’s reliance on Eight Unnamed Physicians v. Medical Executive Com. (2007)
Finally, we note that where, as here, an administrative procedure to review compliance notices exists but cannot be initiated by a party receiving such a notice, and where, as here, the person who can initiate the administrative process does not do so, application of the Doctrine would not serve any of the policies it was intended to promote: it would not bolster administrative autonomy; permit the administrative review board to resolve factual issues, apply its expertise, and exercise statutorily delegated remedies; mitigate damages; or promote judicial economy. (See Grant v. Comp USA, Inc., supra,
D. Other Findings
The superior court also denied the petition on the grounds of lack of ripeness and failure to show irreparable harm. These grounds are related to the Doctrine but, as we shall explain, do not provide alternative bases to uphold denial.
1. Ripeness (or Finality)
The Doctrine “ ‘precludes [judicial] review of an intermediate or interlocutory action of an administrative agency.’ ” (Coachella Valley, supra,
Because the board, under certain circumstances, must review a compliance order and determine whether there is a violation of the Code that constitutes a public nuisance, the director’s decision to issue a compliance order is not necessarily a final administrative determination that there is a violation. However, because petitioners’ landlords effectively complied with the director’s orders, they preempted any action that petitioners could have taken that might have caused the director to initiate a review hearing, and the director did not do so. Under these circumstances, the director’s decisions in effect became final for purposes of judicial review.
2. Irreparable Harm
As noted, an exception to the Doctrine also exists “where irreparable harm will result if judicial intervention is withheld until a final administrative decision is rendered.” (Newhall County, supra,
Whether petitioners failed to establish irreparable harm is irrelevant because, as discussed above, the administrative remedy that they allegedly were required to pursue was illusory, unavailable, and inadequate.
The judgment is reversed.
Premo, J., and Duffy, J.,
On December 21, 2011, the opinion was modified to read as printed above.
Notes
SJCBC and Pharmer’s “are medical cannabis collective associations formed under the authority of Health and Safety Code Section 11362.775.”
The court’s oral ruling was based on these three grounds. However, the judgment entered cites only failure to exhaust and lack of ripeness.
All unspecified section references are to the San Jose Municipal Code.
It appears that the nuisance abatement notices were sent in response to complaints that the Department received concerning the activities of marijuana dispensaries, including SJCBC and Pharmer’s.
Petitioners filed a petition for a writ of mandate and stay with this court, which we later denied. (SJCBC, LLC v. Superior Court (Feb. 8, 2011, H036093) petn. summarily den. by order.)
Section 1.14.020 defines “ ‘director’ ” as “the head of any city department which is charged with responsibility for enforcement of any provision of [the Code].”
The Code does not expressly bar the director from initiating a review hearing where a person complies with an order under protest. However, as a practical matter, we doubt that hearings would be initiated under those circumstances.
The parties do not discuss the superior court’s findings concerning ripeness and irreparable harm.
Given our disposition, we consider it unnecessary to address petitioners’ claim that the court abused its discretion in denying their application for a stay pending a determination on the merits of the petition.
We observe that some of the relief sought in the petition—e.g., rescission of the compliance notices to petitioners—appears to be moot. The parties did not discuss or raise this issue, and therefore we express no opinion on that issue.
Retired Associate Justice of the Court of Appeal, Sixth Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.