Coalition Requests CA Supreme Court Depublish Opinion Addressing Prop. 218 Process

  • by ACWA Staff
  • Nov 4, 2020
  • Water News

ACWA and a coalition of local government associations filed an amicus curiae letter on Tuesday with the California Supreme Court requesting depublication of a recent state appellate court opinion addressing the responsibilities of a plaintiff prior to challenging the rates of a utility in court.

If the high court fails to depublish or review the decision in Malott v. Summerland Sanitary District, public agency ratepayers could be encouraged to bypass the Proposition 218 ratemaking process and drag the agency straight to court.

ACWA jointly filed the amicus curiae letter with the California Association of Sanitation Agencies, California State Association of Counties, California Special Districts Association and the League of California Cities. The letter was drafted with the pro bono assistance of counsel at Colantuono, Highsmith & Whatley, PC.

Summerland Sanitary District (SSD), a small special district south of Santa Barbara, provides wastewater collection, treatment, and disposal services to the plaintiff who owns a 30-unit apartment building within the service area. At a public hearing in 2018, SSD approved an ordinance authorizing a 3.5% annual rate increase to its wastewater disposal fee.

The plaintiff did not participate in the public hearing or file a written protest to contest the rate increase. However, she subsequently filed a petition for a writ of administrative mandamus against SSD, arguing that the method used to calculate rates violated Proposition 218.

The plaintiff introduced a declaration of expert testimony to support her claims that SSD failed to properly calculate rates for multi-unit apartment buildings and that the rates violated existing law. The trial court determined the declaration was “improper extra-record evidence” because the plaintiff never presented it to SSD at the public hearing. The trial court struck the declaration from the record and eventually held the rates were valid.

The Second District Court of Appeal reversed the lower court’s decision in an opinion that includes two controversial holdings, which are the subject of the amicus curiae letter.

First, the court ruled that the plaintiff’s failure to contest the rates at a public hearing did not bar her from bringing a judicial action challenging the validity of the rates imposed pursuant to Proposition 218. If this holding is not overturned, customers could be motivated to bypass the Proposition 218 notice and public hearing process, leaving public agencies without an opportunity to resolve challenges and avoid litigation.

Second, the appellate court determined that the trial court erred in striking the expert declaration that was presented for the first time at trial to impeach the evidence on which SSD relied to make the challenged rates. The amicus curiae letter supports the trial court action and identifies a litany of cases that have prohibited introduction of evidence that was not first presented to an agency during the administrative process. Allowing such a practice would encourage litigants to withhold evidence and surprise public agencies at trial, thereby turning the ratemaking process into a mere formality.

If the California Supreme Court chooses not to depublish the opinion, the letter requests the court grant review of the case.

ACWA provides assistance on legal matters of significance to member agencies and their counsel, including amicus support and referrals to specialists. Requests for Assistance are reviewed by ACWA’s Legal Affairs Committee, which makes a recommendation to the Board of Directors.

For questions or to submit a Request for Assistance, please contact ACWA Legislative Advocate Kris Anderson, who is the staff liaison to the Legal Affairs Committee, at (916) 441-4545.

 

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