Santa Clara Waste Water Co. v. County of Ventura etc. ( 2017 )


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  • Filed 11/30/17
    CERTIFIED FOR PUBLICATION
    IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
    SECOND APPELLATE DISTRICT
    DIVISION SIX
    SANTA CLARA WASTE                         2d Civil No.B278967
    WATER COMPANY,                          (Super. Ct. No. 56-2016-
    00485056-CU-WM-VTA)
    Plaintiff and Respondent,             (Ventura County)
    v.
    COUNTY OF VENTURA
    ENVIRONMENTAL HEALTH
    DIVISION,
    Defendant and Appellant.
    A division of the county declares plaintiff to be in
    violation of regulations governing hazardous waste. It writes to
    plaintiff that it is referring the matter to the district attorney and
    it is not seeking administrative penalties. Plaintiff brings an
    action asserting its right to an administrative hearing to
    determine whether its chemicals constitute hazardous waste.
    Plaintiff complains that the division has no right to state
    plaintiff’s chemicals are hazardous prior to such a hearing. The
    division responds with an anti-SLAPP motion to strike plaintiff’s
    petition and complaint. (Code Civ. Proc., § 425.16.1) The trial
    All statutory references are to the Code of Civil Procedure
    1
    unless otherwise stated.
    court denied the motion. We reverse. Even the government has
    first amendment rights.
    FACTS
    The County of Ventura Environmental Health
    Division (Division) is responsible for the Unified Hazardous
    Waste and Hazardous Materials Management Regulatory
    Program. (Health & Saf. Code, § 25404 et seq.) The Division has
    jurisdiction over the Santa Clara Waste Water Company
    (SCWW), a nonhazardous waste treatment facility. SCWW does
    not have a permit to process hazardous waste.
    There are two types of enforcement actions the
    Division can take. One is formal enforcement that mandates
    compliance and imposes sanctions. (Cal. Code Regs., tit. 27,
    § 15110, subd. (e)(1).) The other is informal enforcement that
    notifies a regulated business of noncompliance and establishes an
    action and date for correction, but does not impose sanctions.
    (Id., subd. (e)(2).)
    In November 2014, there was an explosion and fire at
    SCWW’s treatment facility. That led to a criminal investigation
    by the Ventura County District Attorney. In November 2015, the
    Division assisted the district attorney in executing a search
    warrant on SCWW’s Ventura County facility.
    The Division discovered nineteen 275-gallon totes
    and seven 50-gallon drums of a chemical known as “Petromax” at
    SCWW’s facility. The Division determined that 24 of the
    Petromax totes and drums were hazardous because of their high
    pH levels and that they were waste because they had been
    accumulated in lieu of disposal.
    The day after the execution of the search warrant,
    the Division issued SCWW an inspection report and notice to
    2
    comply (NTC). The report and NTC cited a number of violations,
    including violations premised on the Division’s determination
    that at least some of the Petromax is hazardous waste.
    A letter from SCWW’s counsel disputed that any of
    the Petromax was hazardous waste. A meet and confer between
    the parties failed to resolve the dispute.
    In a letter to SCWW dated February 9, 2016, the
    Division explained its determination that at least some of the
    Petromax constituted hazardous waste. The letter stated in part:
    “Typically, if violations that are listed on a NTC are not corrected
    by the date specified in the NTC, the Division will issue a Notice
    of Violation (NOV) and then either pursue formal administrative
    enforcement or refer the matter to the Ventura County District
    Attorney’s (DA) Office for criminal enforcement. However, since
    the DA’s Office already has an active criminal enforcement case
    against SCWW, this Division does not anticipate pursuing
    separate administrative enforcement proceedings in this matter
    but we intend to refer any violations that remain uncorrected to
    the DA’s Office, to the extent they are not already part of the
    DA’s case.”
    On March 26, 2016, a grand jury indicted SCWW on
    the charge that Petromax is a hazardous waste.
    The February 9 letter stated the Division would
    review any further information SCWW wishes to submit. Having
    received no further information, by letter dated June 15, 2016,
    the Division wrote to SCWW confirming its determination that
    SCWW’s Petromax is hazardous waste. The letter was headed
    “Final Determination of Hazardous Waste Violations.”
    In July 2016, the Division again inspected SCWW’s
    facilities. The Division issued another NTC based on its
    3
    determination that Petromax is a hazardous waste. SCWW’s
    counsel wrote to the Division disputing that Petromax is a
    hazardous waste and objecting that the Division’s administrative
    procedures are unfair and inadequate to protect SCWW’s due
    process rights.
    The Division again agreed to meet and confer with
    SCWW on whether Petromax is a hazardous waste. But the
    Division disputed SCWW’s characterization of its administrative
    process. The Division’s letter to SCWW dated July 21, 2016,
    stated in part:
    “It is also important to note that this Division has not
    initiated a formal administrative enforcement action related to
    the Petromax violations, which would begin with the issuance of
    an administrative enforcement order (AEO), and also provides an
    opportunity for an administrative appeal. Instead, as previously
    explained, we intend to refer future violations as well as those
    violations that remain uncorrected to the District Attorney’s
    Office for prosecution, since it has an active case against SCWW
    which involves violations at this facility.”
    SCWW’s Petition and Complaint
    On August 8, 2016, SCWW filed the instant petition
    for an alternate or peremptory writ of mandate and complaint for
    declaratory and injunctive relief.
    In its petition, SCWW alleged that Petromax is not
    hazardous waste. It further alleged that the Division’s unilateral
    decision determining Petromax to be hazardous waste without a
    fair and impartial administrative hearing violated the law and its
    due process rights. SCWW claimed: “[T]he County’s unilateral
    decision that the Petromax purchased by SCWW is a ‘waste’
    rather than a beneficial product deprives SCWW of its property
    4
    and its opportunity to conduct business, but also threatens
    SCWW and its employees with possible criminal and civil
    liability. Worse yet, it sets up SCWW as being in violation every
    day forward with no ability to appeal or challenge the County’s
    determination that the Petromax is a ‘waste’ and no longer a
    ‘product.’”
    SCWW requested: a stay of enforcement of the NTC
    and the Division’s decision that Petromax is waste; a writ of
    mandate requiring the Division to allow a fair and unbiased
    administrative review of its NTC and decision; notice and a
    hearing before the County may enforce its findings or refer
    SCWW to criminal or civil prosecution; and restitution.
    The trial court denied SCWW’s ex parte request for a
    temporary restraining order on the ground SCWW is not likely to
    prevail. The court found, “[I]t appears that the [Division] has
    complied within the letter of the relevant codes and regulations,
    and that [the Division] has no obligation to proceed in the
    manner demanded by [SCWW].”
    The trial court also sustained the Division’s demurrer
    with leave to amend.
    Anti-SLAPP Motion
    The Division made a special motion to strike the
    petition as a strategic lawsuit against public participation (anti-
    SLAPP motion). (§ 425.16.) The trial court agreed that the NTC
    and letters are protected activities. But the court stated that
    SCWW’s petition does not directly attack the NTC and letters.
    Instead, SCWW objects to the Division’s refusal to provide an
    administrative hearing on whether Petromax constitutes
    hazardous waste. The court reasoned SCWW’s objection is to the
    lack of an administrative procedure, not the determination that
    5
    Petromax constitutes hazardous waste. Thus, the court
    concluded SCWW’s petition did not attack a protected activity.
    The court denied the motion.
    DISCUSSION
    I
    Section 425.16, subdivision (b)(1) provides: “A cause
    of action against a person arising from any act of that person in
    furtherance of the person’s right of petition or free speech under
    the United States Constitution or the California Constitution in
    connection with a public issue shall be subject to a special motion
    to strike, unless the court determines that the plaintiff has
    established that there is a probability that the plaintiff will
    prevail on the claim.”
    Section 425.16, subdivision (e) provides that such
    acts include “(1) any written or oral statement or writing made
    before a legislative, executive, or judicial proceeding, or any other
    official proceeding authorized by law” and “(2) any written or oral
    statement or writing made in connection with an issue under
    consideration or review by a legislative, executive, or judicial
    body, or any other official proceeding authorized by law.”
    A special motion to strike involves a two-step process.
    (Olive Properties, L.P. v. Coolwaters Enterprises, Inc. (2015) 
    241 Cal. App. 4th 1169
    , 1174 (Olive Properties).) First, the defendant
    must make a prima facie showing that the plaintiff’s cause of
    action arises from an act in furtherance of the defendant’s right
    of petition or free speech in connection with a public issue. (Ibid.)
    If the defendant meets this threshold showing, the cause of action
    will be stricken unless plaintiff can establish a probability
    plaintiff can prevail on the claim. (Ibid.)
    6
    The “‘principal threat or gravamen’” of the plaintiff’s
    claim determines whether the first prong of section 425.16
    applies. (Olive 
    Properties, supra
    , 241 Cal.App.4th at p. 1175.)
    The focus is on the allegedly wrongful conduct that provides the
    foundation for the plaintiff’s claims. (Ibid.) Our review of the
    trial court’s denial of the motion to strike is de novo. (Ibid.)
    The California Constitution protects the free speech
    of government entities and public officials and such activities are
    within the scope of section 425.16. (Vargas v. City of Salinas
    (2009) 
    46 Cal. 4th 1
    , 17.)
    Here the gravamen of SCWW’s petition is that the
    Division has no right to declare Petromax to be hazardous waste.
    SCWW claims that right rests exclusively with a neutral
    magistrate after notice and a hearing.
    But the Division twice stated in writing that it
    intends to take no action other than to refer the matter to the
    district attorney. SCWW does not contend the Division has taken
    any other action. A police officer who witnesses a crime is not
    required to hold a hearing before a neutral magistrate before
    referring the matter to the district attorney. Neither is the
    Division.
    In its petition, SCWW makes it clear that the focus of
    its attack is on the Division’s statements. It requests a stay of
    enforcement of the “[Division’s] decision that SCWW’s inventory
    of Petromax is a ‘waste’ rather than a ‘product’” and a stay of
    enforcement of the “[Division’s] decision that SCWW’s inventory
    of Petromax is a ‘hazardous waste.’” Given that the only
    “enforcement” the Division has undertaken or plans to undertake
    is referral of the matter to the district attorney, the manifest
    purpose for the petition is to silence the Division.
    7
    In addition, SCWW’s application for preliminary
    relief admits that the Division’s decision and NTC are at the
    heart of SCWW’s lawsuit. SCWW states in its application: “In
    this case the County made a decision and then issued a ‘Notice to
    Comply’ based on its decision that the Petromax is ‘hazardous
    waste.’ The County’s Petromax decision and the Notice to
    Comply deprive SCWW of its property (the Petromax), the ability
    to use its property (the Petromax) and the ability to operate its
    business, with or without an enforcement action.”
    In other words, SCWW claims that the Division’s
    decision and notice that Petromax is hazardous waste, by
    themselves, are causing SCWW harm even without an
    enforcement action. SCWW’s lawsuit is simply attacking the
    Division’s right of free speech.
    Finally, SCWW admits in its respondent’s brief on
    appeal that it seeks to gain advantage in the criminal prosecution
    against it by silencing the Division. SCWW states: “The felony
    criminal charges against [SCWW] in Case No. 2016009142
    depend on the [Division’s] administrative determination that
    Petromax is hazardous waste. If that hazardous waste
    determination is set aside, the [Ventura County District
    Attorney] will have no basis to continue to prosecute felony and
    misdemeanor counts relating to the storage and management of
    hazardous materials at [SCWW’s] facility.”
    SCWW may wish to have what it posits is an
    administrative hearing. But its primary grievance is that the
    Division has declared Petromax to be hazardous waste and is
    assisting the district attorney in prosecuting SCWW. But that is
    what many enforcement agencies are mandated to do.
    8
    SCWW’s petition seeks to deprive the Division of its
    right to free speech. The Division has satisfied the first step in
    the anti-SLAPP analysis. It has made a prima facie case showing
    that SCWW’s causes of action arise from an act in furtherance of
    the Division’s right and responsibility to make a statement
    involving a public issue.
    SCWW’s reliance on City of Cotati v. Cashman (2002)
    
    29 Cal. 4th 69
    is misplaced. There, mobilehome park owners filed
    an action in federal court challenging the constitutionality of a
    city’s rent control ordinance. The city filed an action in state
    court seeking a declaration that the ordinance is valid. The trial
    court granted the owners’ motion to strike the city’s suit on the
    ground it was a SLAPP suit. Our Supreme Court upheld the
    Court of Appeal’s reversal and concluded the city’s lawsuit did
    not arise from the owners’ exercise of their right of free speech or
    petition. Instead, the city’s lawsuit arose from the underlying
    controversy over the validity of the ordinance. (Id. at p. 80.)
    Similarly, courts have determined anti-SLAPP
    motions to be inappropriate where, for example, the gravamen of
    a lawsuit is a challenge to a city’s land use regulations (USA
    Waste of California, Inc. v. City of Irwindale (2010) 
    184 Cal. App. 4th 53
    , 63); or the enforcement of statutory and
    regulatory rules for claims handling by an insurance carrier
    (Gallimore v. State Farm Fire & Casualty Ins. Co. (2002) 
    102 Cal. App. 4th 1388
    , 1399).
    But here the gravamen of SCWW’s action does not
    involve a challenge to or enforcement of an ordinance, regulation
    or statute. Instead, the gravamen of SCWW’s action is the right
    of the Division to declare SCWW’s Petromax to be hazardous
    waste and to cooperate with the district attorney. SCWW’s
    9
    petition is directly aimed at the Division’s right, if not obligation,
    to inform parties of its actions.
    II
    The remaining question is whether SCWW can carry
    its burden of establishing a probability of prevailing on its claim.
    The trial court, having wrongly found that the
    Division failed to make a prima facie case for relief, did not
    decide SCWW’s probability of prevailing. The court, however, did
    sustain the Division’s demurrer. SCWW points out that the court
    sustained the Division’s demurrer with leave to amend. But a
    plaintiff cannot avoid an anti-SLAPP motion by amending the
    complaint. (Hansen v. Department of Corrections &
    Rehabilitation (2008) 
    171 Cal. App. 4th 1537
    , 1547.) Thus, we
    must view the complaint as it existed at the time of the motion.
    SCWW urges that we remand the matter for factual
    findings. But no factual findings are necessary. In sustaining
    the Division’s demurrer, the trial court determined that, as a
    matter of law, SCWW’s complaint failed to state a cause of action.
    In addition, our review of the trial court’s ruling on an anti-
    SLAPP motion, including the probability of the plaintiff’s success,
    is de novo. (Schwarzburd v. Kensington Police Protection &
    Community Services Dist. Bd. (2014) 
    225 Cal. App. 4th 1345
    ,
    1355.) We have the authority to decide the issue ourselves.
    (Ibid.) Because we can decide the question as a matter of law, it
    would be a waste of judicial resources to remand the matter to
    the trial court.
    SCWW relies on Health and Safety Code section
    25180, subdivision (d). But that subdivision requires only that
    the Division treat all entities that deal with hazardous waste
    “equally and consistently with regard to the same types of
    10
    violations.” (Ibid.) SCWW does not specify how the Division has
    treated it unequally or inconsistently with regard to the same
    type of violation. The subdivision cannot reasonably be construed
    as requiring an administrative hearing before the Division can
    declare a substance to be hazardous waste and cooperate with the
    district attorney.
    SCWW’s reliance on Health and Safety Code section
    25187, subdivision (e) is also misplaced. That subdivision
    provides: “Any hearing requested on an order issued by the
    department shall be conducted within 90 days after receipt of the
    notice of defense by an administrative law judge of the Office of
    Administrative Hearings of the Department of General Services
    in accordance with Chapter 4.5 (commencing with Section 11400)
    of Part 1 of Division 3 of Title 2 of the Government Code, and the
    department shall have all the authority granted to an agency by
    those provisions.” (Ibid.) But the order referred to in subdivision
    (e) is defined in subdivision (a)(1) of section 25187 as “an order
    requiring that the violation be corrected and imposing an
    administrative penalty . . . .” Here the Division expressly
    declined to impose an administrative penalty. Section 25187,
    subdivision (e) does not apply.
    Similarly Health and Safety Code section 25404.1.1,
    subdivision (a) applies to “an administrative enforcement order
    requiring that the violation be corrected and imposing an
    administrative penalty . . . .” Because no administrative penalty
    was imposed, the section does not apply here.
    Finally, SCWW argues the Division has denied it due
    process of law. SCWW cites no authority that even remotely
    supports its argument. SCWW will receive all the process that is
    due to it in the criminal prosecution. There it will have an ample
    11
    opportunity to contest whether its Petromax constitutes
    hazardous waste.
    The judgment (order) is reversed. Costs are awarded
    to appellant.
    CERTIFIED FOR PUBLICATION.
    GILBERT, P. J.
    We concur:
    PERREN, J.
    TANGEMAN, J.
    12
    Rocky J. Baio, Judge
    Superior Court County of Ventura
    ______________________________
    Leroy Smith, County Counsel and Eric J. Walts,
    Assistant County Counsel, for Defendant and Appellant.
    Musick, Peeler & Garrett, Barry C. Groveman,
    William W. Carter, Marc R. Greenberg, K. Ryan Hiete, Cheryl A.
    Orr and Andrew Gilford, for Plaintiff and Respondent.
    13
    

Document Info

Docket Number: B278967

Filed Date: 11/30/2017

Precedential Status: Precedential

Modified Date: 11/30/2017