Cerletti v. Newsom ( 2021 )

Filed 11/17/21
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
CYNTHIA CERLETTI et al., B306122
Plaintiffs and Appellants, (Los Angeles County Super.
Ct. No. 20STCV16321)
v.
GAVIN NEWSOM, as Governor, etc.,
et al.,
Defendants and Respondents.
APPEAL from orders of the Superior Court of Los Angeles
County, Samantha P. Jessner, Judge. Dismissed.
Judicial Watch Inc. and Robert Patrick Sticht for Plaintiffs
and Appellants.
Rob Bonta, Attorney General, Thomas S. Paterson,
Assistant Attorney General, Paul Stein and Anna Ferrari Deputy
Attorneys General, for Defendants and Respondents.
__________________________
Plaintiffs appeal from the trial court’s denial of a
temporary restraining order to stay government spending in
connection with a particular one-time benefit program. The
spending has already occurred, and there is no indication it will
be reauthorized. We therefore dismiss the appeal as moot.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs Cynthia Cerletti and Howard A. Myers brought
this taxpayer action to declare as illegal, and permanently enjoin,
spending under the Disaster Relief for Immigrants Project.
1. The Challenged Project
On March 4, 2020, Governor Gavin Newsom declared a
state of emergency due to the worldwide spread of COVID-19.
On March 16, 2020, the California Legislature enacted an
emergency amendment to the Budget Act of 2019, appropriating
$500 million, and authorizing additional disbursements not to
exceed $1 billion in total, for any purpose related to the state of
emergency upon order of the Director of Finance. (Stats. 2020,
ch. 2.) Funds could not be expended prior to 72 hours after the
Director of Finance notified the Joint Legislative Budget
Committee in writing of the purpose of the planned expenditure.
(Ibid.) In other words, the Legislature allowed for expenditure on
emergency projects on the approval of the Director of Finance,
with notice to the Legislature, but without requiring statutory
approval of each individual project.
On April 15, 2020, Governor Newsom announced the
Disaster Relief Assistance for Immigrants Project (the Project).
which established a $75 million Disaster Relief Fund to “support
undocumented Californians impacted by COVID-19 who are
ineligible for unemployment insurance and disaster relief,
2
including the CARES Act,[1] due to their immigration status.”
The Governor’s press release explained:
“Approximately 150,000 undocumented adult Californians
will receive a one-time cash benefit of $500 per adult with a cap
of $1,000 per household to deal with specific needs arising from
the COVID-19 pandemic. Individuals can apply for support
beginning next month. [¶] The state’s Disaster Relief Fund will
be dispersed through a community-based model of regional
nonprofits with expertise and experience serving undocumented
communities.”
This was to be funded both by reappropriating some funds
already allocated for assistance to immigrants and by an
additional appropriation under the emergency amendment to the
Budget Act. As to the latter, the Director of Finance notified the
Joint Legislative Budget Committee of the planned expenditure,
and the Joint Legislative Budget Committee concurred with it.
We need not discuss the funding sources in detail; what is
relevant for an understanding of the case is that the Project was
not itself specifically and directly authorized by statute.
The Department of Social Services administered the
Project. On April 17, 2020, it issued a fact sheet, which stated
the $79.8 million funding would be allocated $75 million in
benefits and $4.8 million in anticipated administrative costs.
1 In March 2020, the federal government enacted the so-
called “CARES Act,” (the Coronavirus Aid, Relief, and Economic
Security Act) which, among other things, provided for direct
economic assistance payments to certain Americans. (Pub.L. No.
116-136, § 2201 (Mar. 27, 2020) 134 Stat. 281.)
3
2. Plaintiffs’ Complaint
On April 29, 2020, plaintiffs, as taxpayers, filed suit
challenging the Project as an unlawful expenditure of public
funds.2 (Code Civ. Proc., § 526a.) The named defendants are
Governor Newsom, in his official capacity, and Kim Johnson, in
her official capacity as Director of the Department of Social
Services. The complaint’s rationale was this: Federal law
provides that undocumented immigrants are not eligible for State
public benefits, with certain exceptions.3 (8 U.S.C. § 1621(a).) “A
State may provide that an alien who is not lawfully present in
the United States is eligible for any State or local public benefit
for which such alien would otherwise be ineligible under
subsection (a) only through the enactment of a State law after the
date of the enactment of this Act [Aug. 22, 1996] which
affirmatively provides for such eligibility.” (8 U.S.C. § 1621(d).)
Plaintiffs alleged that, as the Project was not enacted by a State
law, it violated the limitations of federal law, and its benefits
therefore constituted the illegal expenditure of public funds.
3. Plaintiffs’ Ex Parte Application for a Temporary
Restraining Order
On May 4, 2020, plaintiffs filed an ex parte application for
a temporary restraining order, and order to show cause regarding
2 The action was initially pursued in the name of a different
plaintiff, Robin Crest. An amended complaint was later filed,
replacing Crest with Cerletti.
3 The federal statute uses the term “alien.” While this
appeal was pending, California enacted legislation removing the
word “alien” from our statutes. (Stats. 2021, ch. 296, § 1.) We
follow the lead of our Legislature, and use “undocumented
immigrant.”
4
a preliminary injunction. Specifically, they sought to halt the
distribution of benefits under the Project. They argued, “Without
a restraining order, those funds will be spent, and there is no way
of recovering them after they are distributed.” Plaintiffs added,
“Once the direct cash benefits are distributed to unlawfully
present aliens in violation of federal law, the injury cannot be
remedied.”
Defendants opposed the application on a number of
grounds, including that prejudgment injunctive relief is not
ordinarily available to remedy an alleged harm based on
taxpayer standing. (E.g., White v. Davis (2003) 30 Cal.4th 528,
556-557.)
On May 5, 2020, the court heard argument and denied the
ex parte application “for the reasons set forth in the opposition
papers. The court finds that plaintiffs have not met their burden
to support the requested relief.”
4. Plaintiffs Sought Immediate Relief Via Mandate
On May 14, 2020, plaintiffs filed a petition for writ of
mandate, seeking a writ “commanding Respondent to issue a
temporary restraining order restraining and enjoining Real
Parties in Interest from making an imminent, May 18, 2020
illegal expenditure of $79.8 million of taxpayers’ funds pending
the final determination of a taxpayer action brought by
Petitioners in the lower court.” (Cerletti v. Superior Court, No.
B305922.) On May 18, 2020, we denied the petition, indicating
that a ruling on a temporary restraining order is appealable and
plaintiffs had made an inadequate showing to justify relief by
way of mandate.4
4 We also observed the sole argument in the petition had
already been presented by means of an emergency writ petition
5
5. Plaintiffs’ Appeal
On May 21, 2020, plaintiffs filed a timely notice of appeal
from the denial of the temporary restraining order. (Code Civ.
Proc., § 904.1, subd. (a)(6) [an appeal may be taken from an order
refusing to grant an injunction].)
6. Plaintiffs Petitioned for Supersedeas
On May 29, 2020, plaintiffs filed, in this appeal, a petition
for writ of supersedeas, and sought an immediate stay of both the
order denying their temporary restraining order and the Project
itself. In their supersedeas petition, they repeatedly argued that
a writ of supersedeas was necessary to preserve their appellate
rights. For example, “Because this appeal is from an order
denying a temporary restraining order, a writ of supersedeas is
Petitioners’ only remedy to preserve that right. See People ex rel.
S.F. Bay etc. [(1968)] 69 Cal.2d [533,] 536-537 (once trial court
had dissolved its restraining order, writ was required to prevent
town from resuming its fill operations and rendering appeal
moot).” On June 12, 2020, we denied the petition for writ of
supersedeas, citing to White v. Davis, supra, the California
Supreme Court case which states that taxpayer harm is
ordinarily insufficient to establish irreparable harm warranting
preliminary injunctive relief.
7. The Money Is Spent
While the parties were briefing the appeal, the Project went
ahead. Defendants asked the court to take judicial notice of an
exhibit demonstrating that all $75 million in project benefits
to our Supreme Court, which had summarily denied it. (Benitez
v. Newsom, S261804.)
6
were distributed as of August 17, 2020.5 In their reply brief,
plaintiffs did not challenge that representation, and made an
argument based on the premise that “according to Respondents’
brief, the cash benefits were not fully distributed until as late as
August 17, 2020.” In its supplemental letter brief to this court,
plaintiffs wrote, “The present appeal is not moot despite
Respondents’ expenditure of all of the project funds.”6
We sought additional briefing on whether, now that the
funds have been disbursed, plaintiffs’ appeal of the trial court’s
failure to restrain that disbursement is moot.
DISCUSSION
“It is well settled that an appellate court will decide only
actual controversies. Consistent therewith, it has been said that
an action which originally was based upon a justiciable
controversy cannot be maintained on appeal if the questions
raised therein have become moot by subsequent acts or events.”
(Finnie v. Town of Tiburon (1988) 199 Cal.App.3d 1, 10.) These
principles apply to appeals of orders denying preliminary
5 Defendants’ request for judicial notice is granted.
6 In reply to defendants’ letter brief, however, plaintiffs now
suggest that, in some ways, the Department of Social Services “is
continuing to spend taxpayer funds and resources on the project”
– including, for example, obtaining the return of some funds that
were distributed to recipients on debit cards which the recipients
failed to timely activate. We reject plaintiff’s attempt to reverse
course. Plaintiffs sought a temporary restraining order to enjoin
the government from distributing one-time emergency benefits
under the Project; that money has been spent. Plaintiffs cannot
now avoid mootness by claiming they sought to enjoin the
government from cleaning up the Project after the benefits have
been distributed.
7
injunctions. (Ibid.) “An appeal from an order denying an
injunction may be dismissed as moot if the act sought to be
enjoined is performed while the appeal is pending. [Citation.]”
(City of Cerritos v. State of California (2015) 239 Cal.App.4th
1020, 1031; see also Disenhouse v. Peevey (2014) 226 Cal.App.4th
1096, 1103 [courts will not consider the merits of an application
to enjoin a meeting that already occurred]; County of Los Angeles
v. Butcher (1957) 155 Cal.App.2d 744, 746 [whether an injunction
restraining the sale of property should be granted is moot when
the property has been sold].)
On the record before us, the Project provided for “one-time”
payments, and the payments were made more than a year ago.
The issue of whether the trial court should temporarily restrain
the distribution of payments pending litigation is moot.
Relying on City of Cerritos, supra, 239 Cal.App.4th at page
1032, plaintiffs suggest that the case is not moot because
“[e]quity lies to reinstate the status quo ante, meaning before
Respondents’ expenditure.” That authority is distinguishable. In
City of Cerritos, plaintiffs had sought to enjoin a law which
required the dissolution of redevelopment agencies. The court
reasoned that the case was not moot, because, even though the
lengthy winding-down process had commenced, a remedy could
theoretically be crafted which would reactivate the agencies and
restore their powers before the winding-down was complete.
(City of Cerritos, supra, at pp. 1031-1032.) Redevelopment
agencies in the process of dissolution can be reinstated and
funded in the future; thus, a remedy was possible. But, here,
plaintiffs are challenging a one-time expenditure of funds that
have already been spent. Plaintiffs make no effort to explain how
time can be rewound and the funds recaptured.
8
A court may resolve an otherwise moot case if it raises an
important issue likely to recur, but which regularly evades timely
appellate review. (White v. Davis, supra, 30 Cal.4th at pp. 537,
563.) That is not this case. The Project was an emergency
project to provide one-time payments during an extraordinary
pandemic, which caused a state of emergency and a temporary
pause in the operation of the Legislature; there is nothing in the
record suggesting that it is likely to recur.7
Plaintiffs do not argue that this particular project could
recur, but argue that the legal issue raised by their appeal does.
Specifically, plaintiffs suggest we should address the issue, of
public interest, of whether taxpayer harm should be considered
sufficient to justify preliminary injunctive relief. “To obtain a
preliminary injunction, a plaintiff ordinarily is required to
present evidence of the irreparable injury or interim harm that it
will suffer if an injunction is not issued pending an adjudication
of the merits. [Citation.]” (White v. Davis, supra, 30 Cal.4th at
p. 554.) In White v. Davis, the California Supreme Court
reviewed a number of cases addressing the issue, and noted they
all came to the same conclusion: “Under the Court of Appeal
decisions discussed above, a taxpayer’s general interest in not
having public funds spent unlawfully (including not having such
7 We observe that in July 2021, after the Legislature
returned to session, it enacted further stimulus payments for
Californians, including undocumented immigrants. That
enactment contained the specific statutory language required by
8 U.S.C. § 1621(d), which plaintiffs contend was lacking from the
Project. (Sen. Bill No. 139 (2021-2022 Reg. Sess.) § 5.) Plaintiffs
cannot reasonably argue that further payments to undocumented
immigrants will be made in emergency circumstances without
express statutory authorization.
9
funds spent in alleged contravention of fundamental
constitutional restrictions), while sufficient to afford standing to
bring a taxpayer action under Code of Civil Procedure section
526a and to obtain a permanent injunction after a full
adjudication on the merits, ordinarily does not in itself constitute
the type of irreparable harm that warrants the granting of
preliminary injunctive relief.”8 (White v. Davis, supra, at pp. 556-
557.)
Plaintiffs ask that we bypass the mootness doctrine in
order to disagree with White v. Davis, “depart from a rule that
does not work, and begin a new way forward by recognizing that
an illegal expenditure of public funds does more than just
monetary harm to a taxpayer.” Setting to one side whether we
have jurisdiction to depart from a rule stated by our Supreme
Court (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d
450, 455), we reject plaintiffs’ premise that this legal issue
typically evades appellate review. Not every government
expenditure is a one-time payment on an emergency basis;
whether taxpayers allege sufficient harm from allegedly illegal
expenditures has, in fact, repeatedly been addressed in non-moot
cases. (See, e.g., Loder v. City of Glendale (1989) 216 Cal.App.3d
777, 783-784 [challenging a city’s employee drug testing
program]; Leach v. City of San Marcos (1989) 213 Cal.App.3d
648, 660-663 [challenging a city’s redevelopment plan], Cohen v.
Bd. of Supervisors (1986) 178 Cal.App.3d 447, 454 [challenging
an ordinance regulating escort services].) As the issue does not
evade review, this is not an appropriate case in which to exercise
8 White v. Davis left open the possibility that an
extraordinary case may exist in which the taxpayer’s interest is
sufficient to justify injunctive relief. (Id. at p. 557.)
10
our discretion to reach the issue despite the mootness of the
appeal.
DISPOSITION
The appeal is dismissed as moot. Plaintiffs are to pay
defendants’ costs on appeal.
RUBIN, P. J.
WE CONCUR:
BAKER, J.
MOOR J.
11