Association of Irritated etc. v. Cal. Dept. Conservation

Filed 5/4/17; pub. order 5/25/17 (see end of opn.)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
ASSOCIATION OF IRRITATED RESIDENTS
et al., F073018
Plaintiffs and Appellants, (Super. Ct. No. S1500CV283418)
v.
OPINION
DEPARTMENT OF CONSERVATION,
Defendant and Respondent;
AERA ENERGY, LLC,
Real Party in Interest and Respondent.
ORIGINAL PROCEEDINGS; petition for writ of mandate. J. Eric Bradshaw,
Judge.
William B. Rostov and Irene V. Gutierrez for Plaintiffs and Appellants.
Gibson, Dunn & Crutcher, Jeffrey D. Dintzer, Matthew C. Wickersham and
Nathaniel P. Johnson for Real Party in Interest and Respondent.
No appearance for Defendant and Respondent.
-ooOoo-
Appellants Association of Irritated Residents, Center for Biological Diversity and
Sierra Club filed a petition for writ of mandate in Kern County Superior Court
challenging the actions of the California Department of Conservation, Division of Oil,
Gas and Geothermal Resources (DOGGR) in issuing permits for 214 new oil wells in the
South Belridge Oil Field of Kern County. The recipient of the separately issued permits
was respondent Aera Energy, LLC (respondent). According to the petition, DOGGR
failed to comply with the California Environmental Quality Act (Pub. Resources Code,
§ 21000 et seq., CEQA)1 when it issued each individual permit because, allegedly, no
CEQA exemption was applicable and DOGGR failed in each instance to conduct any
environmental review. Respondent demurred, arguing that res judicata barred the cause
of action stated in appellants’ petition based on a final judgment entered in a prior action
in Alameda County (the Alameda action). The trial court agreed and sustained the
demurrer without leave to amend. In their appeal from the ensuing judgment of
dismissal, appellants contend that res judicata did not apply because the judgment in the
Alameda action was not on the merits but, instead, was due to a finding of mootness
following the enactment of a new law known as Senate Bill No. 4.2 We conclude that
appellants are correct, which means the trial court erred in sustaining the demurrer on the
ground of res judicata. Accordingly, we reverse the judgment, with directions that the
trial court enter a new order overruling said demurrer.
1 Unless otherwise indicated, further statutory references are to the Public Resources Code.
2 As will be discussed herein, Senate Bill No. 4 constituted a significant change to the legal
background in which DOGGR operates, particularly concerning certain oil and gas well
stimulation practices such as hydraulic fracturing (also known as fracking). Senate Bill No. 4
took effect on January 1, 2014, and its statutory provisions include sections 3150–3161 (Stats.
2013, ch. 313, § 2, enacting Sen. Bill No. 4; hereafter Senate Bill No. 4).
2.
FACTS AND PROCEDURAL BACKGROUND
The Alameda Action
We begin by summarizing the Alameda action, since the judgment in that former
litigation was the purported basis for the application of res judicata here.
On October 16, 2012, several environmental organizations, including Center for
Biological Diversity, Earthworks, Environmental Working Group, and Sierra Club filed
what we refer to as the Alameda action, which was a complaint for declaratory and
injunctive relief against DOGGR.3 The complaint alleged that DOGGR had engaged in a
consistent “pattern and practice” of issuing permits for oil and gas wells in California
without complying with CEQA. In particular, the complaint stated “DOGGR’s practice
of approving permits for oil and gas wells after exempting such projects from
environmental review or otherwise issuing boilerplate negative declarations finding no
significant impacts from these activities undermines the fundamental review
requirements of CEQA.” Allegedly, DOGGR’s failure to comply with CEQA was
especially “troubling” in light of the well stimulation treatment known as hydraulic
fracturing or “fracking” that had become common practice at oil and gas wells
throughout the state. The complaint described the nature of fracking and alleged the
existence of potentially significant environmental impacts caused by it. According to the
complaint, DOGGR “does not even mention, let alone analyze or mitigate, the potential
impacts from fracking” when it issues permits. More broadly, the complaint alleged that
DOGGR’s pattern and practice of permitting oil and gas operations in the absence of
appropriate CEQA review “causes permanent and/or long-lasting impacts to water
quality, air quality, wildlife, … of the areas affected by oil and gas operations.”
3 The complaint was entitled “VERIFIED COMPLAINT FOR DECLARATORY AND INJUNCTIVE
RELIEF,” and was commenced in Alameda County Superior Court as case No. RG 12-652054.
We refer to it as simply the complaint.
3.
The complaint elaborates that DOGGR allegedly “regularly permits new oil and
gas wells without any environmental analysis at all” by categorically excluding such
projects from CEQA based on purported exemptions that are wholly inapplicable to such
activities. The alleged inapplicable exemptions asserted by DOGGR in permitting new
oil and gas wells included purported exemptions for “‘Existing Facilities’” and for minor
alterations to land. In instances where DOGGR elected to prepare negative declarations,
such documents were allegedly inadequate because they were merely “boilerplate
negative declarations that [did] not provide the required environmental review” and failed
to describe or evaluate the impacts of hydraulic fracturing. The complaint’s allegations
included several examples of individual wells permitted by DOGGR in 2011 and 2012,
which DOGGR had either deemed to be exempt from CEQA or approved based on
allegedly inadequate boilerplate negative declarations.4
Based on the above allegations, the complaint sought declaratory relief that
DOGGR’s “pattern and practice” constituted a violation of CEQA. The declaratory relief
allegations framed the issue as follows: “DOGGR’s pattern and practice of approving oil
and gas wells without any mention, let alone evaluation or mitigation, of the
environmental and public health impacts of oil and gas development, including the
effects of hydraulic fracturing, is a violation of CEQA.” The nature of the controversy
was set forth in similar terms: “There is a present and actual controversy between
Plaintiffs and DOGGR as to the legality of these practices that are of an ongoing nature.
DOGGR has prejudicially abused its discretion and not proceeded in a manner required
by law in that it repeatedly and as a policy, practice, and/or ongoing conduct issues
permits for oil and gas wells without conducting proper CEQA review. [¶] … Such
conduct by DOGGR irreparably harms and will continue to irreparably harm Plaintiffs in
4 The validity of these past individual well permits were not challenged in the Alameda
action, but were set forth in that pleading as examples of DOGGR’s historical pattern and
practice.
4.
that DOGGR’s actions expose Plaintiffs and the public in general to environmental
degradation of the public resources of this state due to its failure to evaluate, understand,
and mitigate the impacts of oil and gas development, including the effects of hydraulic
fracturing.”
The only other cause of action in the complaint filed in the Alameda action was
for injunctive relief. The complaint sought injunctive relief “prohibiting the approval of
new oil and gas wells until DOGGR complies with its legal requirements to evaluate and
mitigate the significant environmental and public health impacts caused by hydraulic
fracturing at oil and gas wells.”
On September 20, 2013, while the Alameda action was pending, Governor Brown
signed Senate Bill No. 4 into law. Senate Bill No. 4 sought to redress, in a
comprehensive fashion, the lack of adequate information, environmental review and
regulation of hydraulic fracturing (i.e., fracking) and other well stimulation techniques.
(Stats. 2013, ch. 313, §§ 1 & 2; see Sen. Floor Analysis of Sen. Bill No. 4, dated Sept. 12,
2013; Assem. Floor Analysis of Sen. Bill No. 4, dated Sept. 9, 2013.) The passage of
Senate Bill No. 4 led defendants in intervention in the Alameda action (i.e., Western
States Petroleum Association, California Independent Petroleum Association, and
Independent Oil Producers Agency) to seek dismissal of that action on the ground that the
pattern and practice issues alleged in the complaint had been rendered moot by the new
law. Before discussing the ruling on that motion by the trial court in the Alameda action
(the Alameda court), we shall first briefly summarize the nature and import of Senate Bill
No. 4.
The Enactment of Senate Bill No. 4
In passing Senate Bill No. 4, which took effect on January 1, 2014, the Legislature
made findings that included the following: “(a) The hydraulic fracturing of oil and gas
wells in combination with technological advances in oil and gas well drilling are spurring
oil and gas extraction and exploration in California. Other well stimulation treatments, in
5.
addition to hydraulic fracturing, are also critical to boosting oil and gas production. [¶]
(b) Insufficient information is available to fully assess the science of the practice of
hydraulic fracturing and other well stimulation treatment technologies in California,
including environmental, occupational, and public health hazards and risks. [¶]
(c) Providing transparency and accountability to the public regarding well stimulation
treatments, including, but not limited to, hydraulic fracturing, associated emissions to the
environment, and the handling, processing and disposal of well stimulation and related
wastes, including from hydraulic fracturing, is of paramount concern.” (Stats. 2013,
ch. 313, § 1.)
To accomplish the objectives stated above, Senate Bill No. 4 added a number of
new statutory provisions, including sections 3150 to 3161.5 Sections 3150 to 3159
establish the operative definitions of some of the essential terminology. “‘Hydraulic
fracturing’” is defined as “a well stimulation treatment that, in whole or in part, includes
the pressurized injection of hydraulic fracturing fluid or fluids into an underground
geological formation in order to fracture or with the intent to fracture the formation,
thereby causing or enhancing, for the purposes of this division, the production of oil and
gas from a well.” (§ 3152.) “‘[W]ell stimulation treatment’” is defined as “any treatment
of a well designed to enhance oil and gas production or recovery by increasing the
permeability of the formation. Well stimulation treatments include, but are not limited to,
hydraulic fracturing treatments and acid well stimulation treatments.” (§ 3157, subd. (a).)
“‘Acid well stimulation treatment’” means “a well stimulation treatment that uses, in
whole or in part, the application of one or more acids to the well or underground geologic
5 Sections 3150 to 3161 were codified as new Article 3 (under the heading “Well
Stimulation”), under Chapter 1, of Division 3 (“Oil and Gas”), of the Public Resources Code.
Other statutes enacted or revised by Senate Bill No. 4 addressed penalties for noncompliance,
further reporting and disclosure requirements, and groundwater monitoring. (Pub. Resources
Code, §§ 3213, 3215, 3236.5; Wat. Code, § 10783; see Stats. 2013, ch. 313, §§ 3–5, 7, enacting
Sen. Bill No. 4.)
6.
formation. The acid well stimulation treatment may be at any applied pressure and may
be used in combination with hydraulic fracturing treatments or other well stimulation
treatments.” (§ 3158.)
Sections 3160 and 3161 contain the relevant substantive terms of Senate Bill
No. 4. Under these sections, the Legislature provided for greater disclosure of
information, scientific study, and environmental review of well stimulation treatments,
including hydraulic fracturing and acid well stimulation. We briefly highlight below
some of the particular measures enacted by the Legislature in these sections of Senate
Bill No. 4.
First, by January 1, 2015, the California Natural Resources Agency had to “cause
to be conducted, and completed,” an independent, peer-reviewed scientific study of well
stimulation treatments, including hydraulic fracturing and acid well stimulation
treatments. The study had to provide an evaluation of “the hazards and risks and
potential hazards and risks that [such] well stimulation treatments pose to natural
resources and public, occupational, and environmental health and safety.” (§ 3160,
subd. (a).)
Second, by January 1, 2015, DOGGR was required to adopt new regulations
specific to hydraulic fracturing and other well stimulation treatments. (§ 3160,
subd. (b)(1)(A).)6 The new regulations were to include, among other provisions,
disclosure requirements (such as the composition and disposition of well stimulation
fluids), and needed revisions to existing rules and regulations governing construction of
wells and well casings to ensure the integrity of wells, well casings, and the geologic and
hydrologic isolation of the oil and gas formation during and following well stimulation
treatments. (Ibid.)
6 In June 2014, an amendment to Senate Bill No. 4 stated that, although the regulations
must be finalized by January 1, 2015, the effective date of the regulations was extended to July 1,
2015. (Stats. 2014, ch. 35, § 131, enacting Sen. Bill No. 861; see § 3161, subd. (a).)
7.
Third, Senate Bill No. 4 required that DOGGR prepare a comprehensive
environmental impact report (EIR) pursuant to CEQA “to provide the public with
detailed information regarding any potential environmental impacts of well stimulation in
the state.” (§ 3161, subd. (b)(3)(A).) This EIR had to be certified by DOGGR “no later
than July 1, 2015”, and it had to “address the issue of activities that may be conducted as
defined in Section 3157 and that may occur at oil wells in the state existing prior to, and
after, January 1, 2014.” (§ 3161, subd. (b)(3)(B)(i) & (ii).) In light of the broad scope of
this statewide EIR, it appears the Legislature was requiring in this instance the
preparation of an overarching or programmatic EIR, as distinguishable from a project-
specific review of individual oil and gas wells.7
Fourth, Senate Bill No. 4 created a new and distinct permit requirement for
conducting a well stimulation treatment on an oil or gas well. Under Senate Bill No. 4,
“prior to performing a well stimulation treatment on a well, the operator[8] shall apply for
a permit” from DOGGR. (§ 3160, subd. (d)(1).) Moreover, a well stimulation treatment
“shall not be performed on any well without a valid permit.” (§ 3160, subd. (d)(3)(B).)
In an application for a well stimulation treatment permit, the operator was to provide
certain information and plan specifications, including the well identity and location, the
time period during which the well stimulation treatment was planned to occur, a water
7 Portions of the draft EIR prepared by DOGGR in early 2015 were submitted for judicial
notice in the proceedings below. The draft EIR stated it was broad in scope (i.e., statewide),
programmatic in nature, and did not consider individual oil and gas wells. We note that under
the CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.), a “program EIR” is described at
section 15168. Under that section, “Subsequent activities … must be examined in the light of the
program EIR to determine whether an additional environmental document must be prepared.”
(Cal. Code Regs., tit. 14, § 15168, subd. (c).)
8 The code defines an “[o]perator” as “a person who, by virtue of ownership, or under the
authority of a lease or any other agreement, has the right to drill, operate, maintain, or control a
well or production facility.” (§ 3009.) Thus, other than needing to obtain any required permits,
the operator is the person having the right to drill or operate a well, whether by virtue of
ownership or contract.
8.
management plan, a groundwater monitoring plan, and a description of the setting or
proximity of the planned well stimulation treatment in relation to other features that may
be impacted by the induced fractures or other modifications. (§ 3160, subd. (d)(1)(A)–
(G).) “In considering the permit application, the [head of DOGGR9] shall evaluate the
quantifiable risk of the well stimulation treatment.” (§ 3160, subd. (d)(3)(C).)
If granted, the permit is valid for one year. (§ 3160, subd. (d)(4).) Once the
permit is issued, tenants and property owners within a specified radius of the well must
be notified, and property owners may request water quality sampling and testing,
including baseline and followup measurements, regarding any nearby water well or
surface water suitable for drinking or irrigation purposes. (§ 3160, subd. (d)(6) & (7).)
The operator of the well must provide 72 hours’ advance notice to DOGGR prior to the
actual start of the well stimulation treatment in order to allow DOGGR staff to witness
the treatment. (§ 3160, subd. (d)(9).)
The permit required by Senate Bill No. 4 for hydraulic fracturing and other forms
of well stimulation treatment is separate from and in addition to the permit needed to
initially drill (or to redrill) an oil well under section 3203. However, if applied for
concurrently, DOGGR has discretion to treat them together as an application for a single,
combined authorization. (§ 3160, subd. (d)(2)(A).)
Fifth, until the new regulations were issued and took effect, and while the
statewide scientific study and EIR were being completed, the Legislature established a
temporary or interim statutory regime to address well stimulation requests by operators
between the effective date of Senate Bill No. 4 on January 1, 2014, and the effective date
9 Section 690 states: “The Division of Oil, Gas, and Geothermal Resources shall be in
charge of a chief, known as the State Oil and Gas Supervisor.” (See § 3004 [“‘Supervisor’
means the State Oil and Gas Supervisor”]; § 3106, subd. (a) [duties of the supervisor are to
“supervise the drilling, operation, maintenance, and abandonment of wells … so as to prevent, as
far as possible, damage to life, health, property, and natural resources … [, including] damage to
underground and surface waters suitable for irrigation or domestic purposes by the infiltration of
… detrimental substances”].)
9.
of the new regulations on July 1, 2015. In this regard, section 3161, subdivision (b),
provided as follows:
“[DOGGR] shall allow, until regulations specified in subdivision (b)
of Section 3160 are finalized and implemented, and upon written
notification by an operator, all of the activities defined in Section 3157,
[i.e., well stimulation treatments, including hydraulic fracturing and acid
well stimulation treatments,] provided all of the following conditions are
met: [¶] (1) The owner or operator certifies compliance with paragraph (2)
of subdivision (b) of, paragraphs (1), (6), and (7) of subdivision (d) of, and
paragraph (1) of subdivision (g) of, Section 3160. [¶] (2) The owner or
operator shall provide a complete well history, incorporating the
information required by Section 3160, to [DOGGR] on or before March 1,
2015. [¶] (3) [¶] (A) [DOGGR] commences the preparation of an
environmental impact report (EIR) pursuant to [CEQA], to provide the
public with detailed information regarding any potential environmental
impacts of well stimulation in the state.[10] [¶] … [¶] (4) [DOGGR]
ensures that all activities pursuant to this section fully conform with this
article and other applicable provisions of law on or before December 31,
2015, through a permitting process.” (Italics added.)
Additionally, until the new regulations became effective on July 1, 2015, DOGGR
was required to adopt temporary, emergency regulations to implement the above
described interim regime set forth in subdivision (b) of section 3161. (§ 3161, subd. (c).)
Among the temporary emergency regulations was California Code of Regulations,
title 14, section 1783, subdivision (b) (eff. until July 2015), which stated: “As directed in
Public Resources Code section 3161, [DOGGR] must allow, and will allow, well
stimulation to proceed if the operator has provided all of the required information and
certifications.”
Sixth, and finally, Senate Bill No. 4 “does not relieve [DOGGR] or any other
agency from complying with any other provision of existing laws, regulations, and
orders.” (§ 3160, subd. (n).) Presumably, this general provision would mean that Senate
10 This is the statewide EIR referred to above. The requirement that DOGGR conduct a
statewide EIR “does not prohibit” the preparation of an EIR by a local agency. (§ 3161,
subd. (b)(3)(C).)
10.
Bill No. 4 did not relieve DOGGR of its responsibility to comply with CEQA where
applicable.11
The Dismissal Motion and Judgment in the Alameda Action
Shortly after the enactment of Senate Bill No. 4, defendants in intervention in the
Alameda action (i.e., Western States Petroleum Association, California Independent
Petroleum Association, and Independent Oil Producers Agency) filed a motion to dismiss
or, alternatively, for judgment on the pleadings. The motion was on the ground that the
issues raised in the complaint were rendered moot by the passage of Senate Bill No. 4.
Among other things, the motion by defendants in intervention argued as follows:
“Plaintiffs’ Complaint challenges DOGGR’s pattern and practice in approving oil and gas
wells involving hydraulic fracturing under CEQA. By this manner of alleging their
claims, Plaintiffs have not challenged specific, individual approvals, but rather challenge
DOGGR’s ongoing pattern and practice. The pattern and practice alleged by Plaintiffs in
their Complaint has ended as a result of the Legislature’s passage of [Senate Bill No.] 4.
Any alleged deficiencies in DOGGR’s past pattern and practice are irrelevant to its
conduct going forward under the new law. Regardless of whether Plaintiffs agree with
the new practice set forth in [Senate Bill No.] 4, that practice has been mandated by the
Legislature, and therefore, Plaintiffs’ claims about DOGGR’s prior practice are moot.”
In its written order of January 29, 2014, the Alameda court agreed with the
moving parties that the issues raised in the complaint had become moot or otherwise
nonjusticiable by virtue of the enactment of Senate Bill No. 4, and on that basis it granted
the motion to dismiss and/or for judgment on the pleadings. The Alameda court clarified
in its order that it was granting the motion on grounds of both mootness and lack of
11 To the extent that section 3160, subdivision (n) (i.e., DOGGR is not relieved from
complying with other laws) is arguably in conflict with section 3161, subdivision (b) (i.e., during
special interim period, DOGGR “shall allow” fracking if enumerated statutory conditions met,
yet enumerated conditions did not include CEQA compliance), we do not believe the present
appeal is the proper occasion to resolve that conflict.
11.
ripeness: “The Industry Groups[, i.e., defendants in intervention,] frame the motion as
presenting issues of mootness. The court agrees that the issue is one of justiciability
generally, but finds that it concerns both ripeness and mootness.”
In its ruling, the Alameda court delineated which claims it considered to be moot
and which it considered to be unripe for adjudication. It did so by dividing its
justiciability analysis into four parts: (1) DOGGR’s policy or practice before January 1,
2015; (2) DOGGR’s policy or practice after January 1, 2015; (3) DOGGR’s review of
individual wells before January 1, 2015; and (4) DOGGR’s review of individual wells
after January 1, 2015.12 As to DOGGR’s policy or practice before January 1, 2015, the
court held the “Motion to dismiss as moot is GRANTED.”13 (Italics added.) The
Alameda court found all such claims were moot because, under section 3161,
subdivision (b), “[DOGGR] ‘shall allow’ all of the activities defined in Section 3157[, i.e.,
fracking,] provided certain conditions are met.” Because this new provision gave “clear
directions to issue permits if the requirements of [section] 3161[, subdivision ](b) are
met,” the complaint’s challenge to DOGGR’s policy or practice “before 1/1/15” under the
prior legal setting was found to be moot. As to DOGGR’s policy or practice “after
1/1/15,” the Alameda court granted the motion to dismiss because the claims were “not
ripe.” (Italics added.) The Alameda court held these claims were not ripe for adjudication
because the future practices of DOGGR regarding the issue of fracking would presumably
12 The Alameda court’s use of January 1, 2015, as an analytical dividing line was apparently
based on its assumption that the new regulations would take effect on that date, thereby ending
the interim regime under section 3161, subdivision (b), at that time. However, as noted above
(see fn. 6, ante), in a subsequent followup amendment to Senate Bill No. 4, the effective date of
the regulations was extended to July 1, 2015. Thus, the Alameda court’s date-specific analysis
makes better sense if the reader understands the referenced date should be July 1, 2015.
13 The order stated the motion was granted “without prejudice to any claims for failure to
comply with 14 California Code of Regulations section 1761, et seq.” This was apparently a
reference to the temporary or emergency regulations in place during the interim regime before
the new regulations took effect (i.e., Cal. Code Regs., tit. 14, §§ 1761, 1780-1783.3 [versions eff.
until July 1, 2015]).
12.
be impacted by the results of the scientific study, the EIR, and the future new regulations.
At the time of the ruling, the studies and EIR were not completed and new regulations
were not in effect. Finally, as to DOGGR’s review of individual wells, whether before or
after January 1, 2015, the Alameda court granted the motion to dismiss because “[t]he
complaint never sought relief based on DOGGR’s review of individual wells.”
Based on the above analysis, the Alameda court granted the motion and held “[t]he
case is DISMISSED.” On January 29, 2014, a judgment in the Alameda action was
entered in favor of defendants in intervention and DOGGR. No appeal was taken from
that judgment.
The Present Action Filed in Kern County
On November 12, 2014, appellants filed a petition for writ of mandate in the Kern
County Superior Court. The petition alleged that during the period between July 2014
and the filing of the petition, DOGGR had issued “214 individual permits to [respondent]
to drill new wells in the South Belridge Oil Field … without completing the
environmental review required by CEQA.” According to the petition, respondent
subsequently notified DOGGR of its intention “to use hydraulic fracturing (commonly
known as ‘fracking’) techniques on at least 144 of these wells,” and DOGGR has
allegedly allowed respondent’s use of fracking on said 144 wells. However, the petition
was not concerned solely with fracking, and it alleged that there were potential adverse
environmental impacts with oil drilling and production in general. The petition alleged
that DOGGR serves as the “lead agency” for CEQA purposes regarding all oil wells in
Kern County. Further, the petition alleged that DOGGR was required to comply with
CEQA for each approval of the 214 drilling permits by conducting adequate
environmental review in each instance, but it failed to do so. Allegedly, no exemptions to
CEQA were applicable. In the prayer for relief, appellants’ petition requested that the
trial court set aside its approvals of the 214 drilling permits and order DOGGR to comply
with CEQA for each and every one of the 214 drilling permits.
13.
Respondent and DOGGR separately demurred to the petition on distinct grounds.
Respondent’s demurrer was on the ground of res judicata, based on the judgment in the
Alameda action. Alternatively, respondent argued that Senate Bill No. 4 precluded all of
appellants’ CEQA claims because, during the interim statutory regime under
section 3161, subdivision (b), well stimulation requests by operators would have to be
allowed. DOGGR’s demurrer took a different approach. DOGGR demurred on the
ground that exemptions to CEQA were applicable to the permits in question. Although
DOGGR’s demurrer is not at issue in the present appeal, we briefly summarize
DOGGR’s ground for demurrer in the trial court because it sheds light on DOGGR’s
position on the CEQA issues.
DOGGR’s demurrer prefaced its claims of CEQA exemption(s) by informing the
trial court of the environmental setting and history of the South Belridge Oil Field: “The
214 new wells Petitioners challenge are part of the large, established, and densely-
developed South Belridge oil field. This oil field has been in existence since long before
the enactment of CEQA, and throughout this time, operators have been allowed to drill
by right” under the oversight of DOGGR as to “how, when, and where a new well may
be drilled.” “The South Belridge oil field is located in Kern County, west of State
Route 33, and between the junctions of State Route 45 to the north, and State Route 58 to
the south. It is approximately ten miles long by two miles wide, an area covering
12,800 acres of land. [Citation.] The field was discovered in 1911 and has been in
operation ever since. The South Belridge oil field contains 29,960 total oil wells, 10,696
of which are currently active. [Citation.] As of 2012, it was the third most productive oil
field in California, and the sixth most productive oil field in the United States, producing
some 23.6 million barrels of oil. [Citation.] [¶] … [¶] When the field operator seeks to
add new wells within the South Belridge oil field, the operator must submit a ‘notice of
intention to commence drilling’ form, otherwise known as an ‘NOI,’ to [DOGGR]. (Pub.
Resources Code, §3203.) [DOGGR] staff then have 10 working days to either approve
14.
the NOI via a ‘Permit to Conduct Well Operations,’ or to ‘require other pertinent
information to supplement the notice’ via a ‘Letter of Abeyance.’ (Pub. Resources Code,
§ 3203.) [¶] Based on the long history of activity in the South Belridge oil field,
[DOGGR] staff’s high degree of familiarity with oil extraction methods in the field, and
decades-long continuous operations in the South Belridge oil field, [DOGGR] issued
approvals in response to the NOIs for the 214 well permits at issue in this litigation.
[Citation.] The permits issued in this case were typically conditioned on requirements to
prevent ‘blow out’ events at the well head, to ensure adequate cementing and completion
of the wells, to conduct mechanical integrity tests, to ensure avoidance of exposure to
hydrogen sulfide gas, to ensure proper disposal of drilling fluids (in conformance with
Regional Water Quality Control Board standards), and to ensure conformance with
statutory requirements regarding any well stimulation activities.” Based on the above
quoted description, DOGGR argued that the well approvals at issue were exempt under
CEQA under the recognized exemptions for ongoing projects (i.e., the wells were a
negligible part of a massive ongoing project in existence pre-CEQA), and for minor
alterations of existing facilities.
At the hearing on the demurrer to the petition, the trial court explained it would be
overruling DOGGR’s demurrer because it believed that the CEQA exemption issues
could not be resolved at the pleading stage in this case, but were more factual in nature.
Thus, the oral argument was primarily devoted to respondent’s demurrer on the ground of
res judicata. After hearing extensive argument on that issue, the trial court sustained
respondent’s res judicata demurrer with leave to amend. All other grounds asserted for
demurrer, including the demurrer by DOGGR, were overruled.
On May 15, 2015, appellants filed their first amended petition for writ of mandate
(the amended petition) in the trial court, seeking to plead additional facts to address the
trial court’s ruling on res judicata. The allegations of the amended petition alleged that
the prior judgment in the Alameda action was not on the merits, and it did not concern
15.
individual wells. Further, the amended petition clarified DOGGR’s permitting duties,
explaining that in order to drill and operate oil wells in California, an operator must first
obtain a permit from DOGGR under section 3203, and that permitting of these wells has
environmental effects. After Senate Bill No. 4 became law, a permit would also be
required to conduct well stimulation activities such as fracking. Allegedly, the notices of
intent filed by respondent in seeking each of the 214 permits to drill did not mention
respondent’s intention to conduct well stimulation activities such as fracking. After
receiving the permits to drill, respondent subsequently filed well stimulation notices
pursuant to Senate Bill No. 4, which proposals were approved by DOGGR for at least
144 of the challenged wells.
Respondent once again demurred, asserting that res judicata applied. DOGGR
demurred on the same grounds as it did in the first demurrer. The trial court granted
judicial notice of the records in the Alameda action relevant to the issue of res judicata.
The trial court concluded that appellants’ amended petition involved the same issues (i.e.,
same cause of action), essentially the same parties, and that the judgment in the Alameda
action was on the merits. Therefore, the trial court sustained respondent’s demurrer on
res judicata grounds, this time without leave to amend. In light of the res judicata ruling
that would terminate the entire action, the trial court found it unnecessary to consider
DOGGR’s demurrer.
Based on its demurrer ruling, a judgment of dismissal was entered by the trial
court and a notice of entry of judgment was served on November 2, 2015. Appellants’
timely notice of appeal followed.
DISCUSSION
I. Standard of Review
On appeal from a judgment dismissing an action after sustaining a demurrer, we
review de novo whether the complaint states facts sufficient to constitute a cause of
action under any legal theory. (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal. 4th 412,
16.
415; Cantu v. Resolution Trust Corp. (1992) 4 Cal. App. 4th 857, 879.) “We give the
complaint a reasonable interpretation, reading it as a whole and its parts in their context.
[Citation.] Further, we treat the demurrer as admitting all material facts properly pleaded,
but do not assume the truth of contentions, deductions or conclusions of law.” (City of
Dinuba v. County of Tulare (2007) 41 Cal. 4th 859, 865.) In reviewing the sufficiency of
the complaint, we may also consider matters that are subject to judicial notice. (Blank v.
Kirwan (1985) 39 Cal. 3d 311, 318.)
“[W]hen [a demurrer] is sustained without leave to amend, we decide whether
there is a reasonable possibility that the defect can be cured by amendment: if it can be,
the trial court has abused its discretion and we reverse; if not, there has been no abuse of
discretion and we affirm. [Citations.] The burden of proving such reasonable possibility
is squarely on the plaintiff.” (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.)
Because it is a question of law, we review de novo the trial court’s conclusion that
res judicata was applicable in this case. (Noble v. Draper (2008) 160 Cal. App. 4th 1, 10;
Louie v. BFS Retail & Commercial Operations, LLC (2009) 178 Cal. App. 4th 1544,
1553.)
II. Res Judicata Not Applicable
Appellants contend the trial court erred in applying res judicata because, among
other reasons, the judgment in the Alameda action was not on the merits. In discussing
appellants’ contention, we begin with a brief overview of the necessary elements for
application of res judicata.
A. Overview of Res Judicata
“‘Res judicata’ describes the preclusive effect of a final judgment on the merits.
Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a
second suit between the same parties or parties in privity with them.… [Citation.] Under
the doctrine of res judicata, if a plaintiff prevails in an action, the cause is merged into the
judgment and may not be asserted in a subsequent lawsuit; a judgment for the defendant
17.
serves as a bar to further litigation of the same cause of action.” (Mycogen Corp. v.
Monsanto Co. (2002) 28 Cal. 4th 888, 896–897, fn. omitted (Mycogen).)14 Three
elements must exist for res judicata (or claim preclusion) to apply: “‘(1) the decision in
the prior proceeding is final and on the merits; (2) the present proceeding is on the same
cause of action as the prior proceeding; and (3) the parties in the present proceeding or
parties in privity with them were parties to the prior proceeding.’” (Planning &
Conservation League v. Castaic Lake Water Agency (2009) 180 Cal. App. 4th 210, 226.)
To put it another way, res judicata or claim preclusion “arises if a second suit involves (1)
the same cause of action (2) between the same parties [or their privies] (3) after a final
judgment on the merits in the first suit.” (DKN Holdings, LLC v. Faerber (2015) 61
Cal. 4th 813, 824.) “Only a final judgment on the merits between the same parties or their
privies and upon the same cause of action is entitled to the res judicata effect of bar or
merger.” (Busick v. Workmen’s Comp. Appeals Bd. (1972) 7 Cal. 3d 967, 974.)
The rationale for applying res judicata where a judgment was on the merits has
been explained as follows: “This requirement is derived from the fundamental policy of
the doctrine, which gives stability to judgments after the parties have had a fair
opportunity to litigate their claims and defenses.” (7 Witkin, Cal. Procedure (5th ed.
2008) Judgment, § 370, p. 994; see Palma v. U.S. Industrial Fasteners, Inc. (1984) 36
Cal. 3d 171, 182 [same].) “The rule is based upon the sound public policy of limiting
litigation by preventing a party who has had one fair trial on an issue [or cause of action]
from again drawing it into controversy.” (Bernhard v. Bank of America (1942) 19 Cal. 2d
807, 811.)
14 The doctrine of res judicata also precludes a party from engaging in piecemeal litigation
by splitting a single cause of action and relitigating the same cause of action on a different legal
theory or for different relief. (Mycogen, supra, 28 Cal.4th at pp. 896–897.) Similarly, res
judicata bars litigation not only of matters that were actually litigated, but also of matters that
could have been litigated as part of the same cause of action. (Citizens for Open Government v.
City of Lodi (2012) 205 Cal. App. 4th 296, 324.)
18.
If the prior judgment was not on the merits, then res judicata is not applicable and
it does not have the effect of barring the subsequent action. (See Goddard v. Security
Title Ins. & Guar. Co. (1939) 14 Cal. 2d 47, 52 (Goddard) [“a judgment not rendered on
the merits does not operate as a bar”].) According to appellants, the judgment in the
Alameda action was not on the merits because it was grounded on findings of mootness
and/or unripeness that did not determine the underlying claims relating to DOGGR’s
pattern and practice of failure to comply with CEQA. As set forth in the analysis below,
we believe appellants are essentially correct. We begin our discussion by explaining
why, as a broad or general principle, a judgment of dismissal entered on grounds of
mootness or unripeness would not be on the merits.
B. Judgment Based on Mootness Not On the Merits
“A judgment is on the merits for purposes of res judicata ‘if the substance of the
claim is tried and determined .…’ [Citation.]” (Johnson v. City of Loma Linda (2000) 24
Cal. 4th 61, 77; 7 Witkin, Cal. Procedure, supra, Judgment, § 370, p. 995.) This may
include a judgment of dismissal following a general demurrer or a dismissal motion if the
disposition was plainly reached “on a ground of substance.” (Goddard, supra, 14 Cal.2d
at p. 52; 7 Witkin, Cal. Procedure, supra, Judgment, § 375, pp. 1001–1002.) “[I]t is the
nature of the action and the character of the judgment that determines whether it is res
judicata.” (Goddard, supra, at p. 54.)
A classic example of a judgment that is not on the merits is one resulting from the
defense of laches, because laches “has nothing to do with the merits of the cause against
which it is asserted.” (Johnson v. City of Loma Linda, supra, 24 Cal.4th at p. 77 [latches
constitutes an affirmative defense “‘which does not reach the merits of the cause’”].)
Other examples of judgments that are not on the merits include the following: a
judgment on statute of limitations grounds (Mid-Century Ins. Co v. Superior Court
(2006) 138 Cal. App. 4th 769, 777 [noting “‘“the purpose served by dismissal on
limitations grounds is in no way dependent on nor reflective of the merits—or lack
19.
thereof—in the underlying action”’”]; Koch v. Rodlin Enterprises (1990) 223 Cal. App. 3d
1591, 1596 [“[t]ermination of an action by a statute of limitations is deemed a technical
or procedural, rather than a substantive, termination”]); a judgment based on lack of
jurisdiction (Nichols v. Canoga Industries (1978) 83 Cal. App. 3d 956, 967; Finnie v.
District No. 1 - Pacific Coast Dist. etc. Assn. (1992) 9 Cal. App. 4th 1311, 1318–1319);
and a judgment or dismissal for lack of prosecution (Mattern v. Carberry (1960) 186
Cal. App. 2d 570, 572). In each of these instances of terminations that were not on the
merits, the substance of the underlying claim was never tried or determined; instead, the
outcome was reached on procedural or technical grounds that did not resolve or depend
on the claim’s merits.
By parity of reasoning, we believe that a judgment entered on the ground of
mootness and/or lack of ripeness of the issues is likewise not on the merits. Indeed, as
will be seen, such grounds for dismissal are typically reasons for declining to reach the
merits. Because the Alameda court purportedly dismissed the Alameda action on the
basis that there was no justiciable controversy present due to mootness and unripeness,
we now explain the meaning of those two concepts and then apply that discussion to our
consideration of the nature of the judgment in the Alameda action.
“California courts will decide only justiciable controversies. [Citations.] The
concept of justiciability is a tenet of common law jurisprudence and embodies ‘[t]he
principle that courts will not entertain an action which is not founded on an actual
controversy .…’ [Citations.] Justiciability thus ‘involves the intertwined criteria of
ripeness and standing. A controversy is “ripe” when it has reached, but has not passed,
the point that the facts have sufficiently congealed to permit an intelligent and useful
decision to be made.’ [Citation.] But ‘ripeness is not a static state’ [citation], and a case
that presents a true controversy at its inception becomes moot ‘“if before decision it has,
through act of the parties or other cause, occurring after the commencement of the action,
20.
lost that essential character”’ [citation].” (Wilson & Wilson v. City Council of Redwood
City (2011) 191 Cal. App. 4th 1559, 1573 (Wilson & Wilson).)
A claim is unripe for adjudication where there is not an actual controversy within
the context of a sufficiently definite or concrete set of facts, such as where “‘parties seek
a judicial declaration on a question of law, though no actual dispute or controversy ever
existed between them requiring the declaration for its determination.’” (Wilson &
Wilson, supra, 191 Cal.App.4th at p. 1573.) The ripeness requirement prevents courts
from issuing purely advisory or hypothetical opinions. (Pacific Legal Foundation v.
California Coastal Com. (1982) 33 Cal. 3d 158, 170; see 1A Cal. Jur. (3d ed. 2014)
Actions, § 39, pp. 83–85.) It is “primarily bottomed on the recognition that judicial
decisionmaking is best conducted in the context of an actual set of facts so that the issues
will be framed with sufficient definiteness to enable the court to make a decree finally
disposing of the controversy.” (Pacific Legal Foundation v. California Coastal Com.,
supra, at p. 170.)15
Moot cases entail the same justiciability concerns, but are “‘[t]hose in which an
actual controversy did exist but, by the passage of time or a change in circumstances,
ceased to exist.’” (Wilson & Wilson, supra, 191 Cal.App.4th at p. 1573.) “A case is
considered moot when ‘the question addressed was at one time a live issue in the case,’
but has been deprived of life ‘because of events occurring after the judicial process was
initiated.’” (Id., at p. 1574.) In summary, a moot case is one in which there may have
been an actual or ripe controversy at the outset, but due to intervening events, the case
has lost that essential character and, thus, no longer presents a viable context in which the
court can grant effectual relief to resolve the matter. (Ibid.)
15 “‘The controversy must be definite and concrete, touching the legal relations of parties
having adverse legal interests. [Citation.] It must be a real and substantial controversy admitting
of specific relief through a decree of a conclusive character, as distinguished from an opinion
advising what the law would be upon a hypothetical state of facts.’” (Pacific Legal Foundation
v. California Coastal Com., supra, 33 Cal.3d at pp. 170–171.)
21.
A few examples may clarify how events occurring after the commencement of a
case can result in its mootness. For instance, a lawsuit challenging the validity of city
resolutions to approve the construction of a retail development project became moot once
that project was substantially completed. (Wilson & Wilson, supra, 191 Cal.App.4th at
pp. 1575–1580, 1585.) A proceeding challenging a civil service eligibility list
promulgated by the county civil service commission was found to be moot once the
former list had expired and been superseded by a new list. (Wilson v. L.A. County Civil
Service Com. (1952) 112 Cal. App. 2d 450, 453–454; see Daily Journal Corp. v. County of
Los Angeles (2009) 172 Cal. App. 4th 1550, 1557 [case moot where challenged contract
had expired, a new bidding process took place, and the court could not award the contract
to disappointed bidder].) Moreover, an intervening change in the law that is the crux of a
case may result in mootness. For example, repeal or modification of a statute under
attack, or subsequent legislation correcting a challenged deficiency, can render a case
moot. (See, e.g., Callie v. Board of Supervisors (1969) 1 Cal. App. 3d 13, 18; Bravo
Vending v. City of Rancho Marriage (1993) 16 Cal. App. 4th 383, 393; see also Colony
Cove Properties, LLC v. City of Carson (2010) 187 Cal. App. 4th 1487, 1509 [challenged
moratorium ordinance had expired; thus, the challenge was moot]; cf. Davis v. Superior
Court (1985) 169 Cal. App. 3d 1054, 1057–1058 [“enactment of subsequent legislation
does not automatically render a matter moot [since] [t]he superseding changes may or
may not moot the original challenges”].)
In East Bay Mun. Utility Dist. v. Department of Forestry & Fire Protection (1996)
43 Cal. App. 4th 1113 (East Bay), the petitioners challenged the pattern and practice of the
defendant, California Department of Forestry and Fire Protection (CDF), in causes of
action for declaratory and injunctive relief. Allegedly, CDF’s pattern and practice did not
comply with CEQA regarding timber harvest plans. The petitioners had also challenged,
by writ of mandate, the adequacy of a particular timber harvest plan. (East Bay, supra, at
p. 1119.) Prior to trial of the declaratory relief action, but after a negative ruling on the
22.
writ proceeding, CDF adopted a new policy that changed its requirements and practices
for timber harvest notices in a way that corrected the challenged deficiencies. As a result
of CDF’s new policy, the trial court denied declaratory and injunctive relief. The Court
of Appeal affirmed, explaining there was no longer an ongoing controversy: “[T]he trial
court could reasonably conclude that once CDF had changed its policy, there was no
longer an ongoing controversy because the challenged practice had been abandoned.”
(Id. at p. 1132.) Although the opinion did not label the resulting lack of an ongoing
controversy as mootness, in essence that is what it was. As correctly noted by appellants,
East Bay’s outcome is similar in rationale to the decision in the Alameda action. Both
apparently found no actual or justiciable controversy existed after a material change
occurred to the policy or law upon which the original claim had rested.
Regardless of the nature of the intervening events that lead to a finding of
mootness, a common denominator in mootness cases is that the court expressly or
impliedly concludes there is no longer an existing controversy before it upon which
effectual relief may be granted. This is true by definition—i.e., the lack of an actual
justiciable controversy is what constitutes both mootness and unripeness. (Wilson &
Wilson, supra, 191 Cal.App.4th at pp. 1573–1574.) Since, when mootness is found, the
court is saying in essence there is no ongoing justiciable controversy before it, such a
finding leads to a decision to dismiss the action without reaching the merits of the
underlying claim. The following quotations serve to substantiate these points. “‘“A
judicial tribunal ordinarily may consider and determine only an existing controversy, and
not a moot question or abstract proposition.”’” (Consumer Cause, Inc. v. Johnson &
Johnson (2005) 132 Cal. App. 4th 1175, 1183.) The duty of every court “‘is to decide
actual controversies by a judgment which can be carried into effect, and not to give
opinions upon moot questions or abstract propositions, or to declare principles or rules of
law which cannot affect the matter in issue in the case before it.’” (Con. etc. Corp. v.
United A. etc. Workers (1946) 27 Cal. 2d 859, 863 [dismissal of appeal warranted if issue
23.
moot].) Again, “‘[a]lthough a case may originally present an existing controversy, if
before decision it has, through act of the parties or other cause, occurring after the
commencement of the action, lost that essential character, it becomes a moot case or
question which will not be considered by the court.’” (3 Witkin, Cal. Procedure (5th ed.
2005) Actions, § 32, p. 98, italics added, quoting Wilson v. L.A. County Civil Service
Com., supra, 112 Cal.App.2d at p. 453.) Where such mootness exists, proceeding further
with the case “‘can have no practical effect or cannot provide the parties with effective
relief. [Citation.]’” (People v. Rish (2008) 163 Cal. App. 4th 1370, 1380.)16 “When
events render a case moot, the court, whether trial or appellate, should generally dismiss
it.” (Wilson & Wilson, supra, at p. 1574; accord, Consumer Cause, Inc. v. Johnson &
Johnson, supra, at p. 1183 [once previously ripe case became moot because “plaintiff
discovered that the allegations of the complaint were wrong,” i.e., the defendants were
not violating the statute at issue, there was “no longer a controversy before the trial court,
and the court should have exercised its discretion by refusing to decide it”].)17
16 An issue, although technically moot, may still be addressed by a court under certain
exceptions to the mootness doctrine, such as to resolve a question of public importance where the
issue is likely to recur. (See Californians for Alternatives to Toxics v. Department of Pesticide
Regulation (2006) 136 Cal. App. 4th 1049, 1069–1070.) The Alameda court did not proceed
under an exception to the mootness rule, but dismissed the action because of mootness and lack
of ripeness.
17 The contrast between a determination based on mootness and one based on the merits
was discussed in a peculiar procedural setting in Coalition for a Sustainable Future in Yucaipa v.
City of Yucaipa (2011) 198 Cal. App. 4th 939. After a judgment was appealed but before the
appellate court could decide the matter, the basis for the judgment became moot. In that
instance, the appellate court could simply dismiss the appeal itself, but that would leave the
judgment in place. A bare reversal of the judgment would imply that further proceedings should
take place in the trial court on the complaint, but that would be inappropriate in view of the
case’s mootness. According to the Court of Appeal, the better approach would be to reverse the
judgment, with directions to the trial court to dismiss the action as moot. (Id. at p. 943,
following Paul v. Milk Depots, Inc. (1964) 62 Cal. 2d 129, 134–135.) In doing so, an appellate
court following this approach “should make clear that the reversal of the judgment is not based
on its merits, but based on its mootness.” (Coalition for a Sustainable Future in Yucaipa v. City
of Yucaipa, supra, at p. 945.)
24.
Based on the foregoing summary of the law, we believe that a judgment of
dismissal based on a finding of mootness or lack of ripeness is not a determination of the
substance of the underlying claim; that is, it is not on the merits. This observation
follows from what we have said about the nature of such grounds for dismissal, including
that mootness and unripeness are about justiciability (as distinct from the substance of the
claims) and typically function as reasons for declining to reach the merits, due to the
perceived lack of justiciability. Moreover, in view of our discussion regarding res
judicata and the concepts of mootness/ripeness, we believe that where a court decides that
a claim is moot or unripe, and dismisses the claim on that basis, the resulting judgment of
dismissal would be on technical or procedural grounds that are distinct from an actual
determination of the substance of the claim. In short, such a judgment would not be on
the merits.
C. The Judgment in the Alameda Action
According to appellants, the judgment in the Alameda action was clearly and
specifically premised on the Alameda court’s finding that the statutory claims in that case
were rendered moot or unripe by the passage of Senate Bill No. 4. Respondent counters
that in the process of discussing mootness, the Alameda court actually reached and
determined the merits. In our opinion, appellants’ position is the correct one.18 As
confirmation of why this is so, we briefly reiterate the context and nature of the judgment
in the Alameda action.
Soon after the enactment of Senate Bill No. 4, defendants in intervention in the
Alameda action filed their motion to dismiss or, alternatively, for a judgment on
pleadings. The motion was on the ground that the issues raised in the complaint were
18 The issue here is not whether the Alameda court’s ruling was correct; that is, our appeal
does not concern whether the Alemeda court properly decided the entire case was moot, but only
that it did so decide and that it did make mootness/unripeness the basis for its judgment of
dismissal.
25.
mooted by the passage of Senate Bill No. 4. In essence, the motion asserted that in light
of the comprehensive changes to the applicable law brought about by the passage of
Senate Bill No. 4, the allegations relating to DOGGR’s historical pattern and practice
were no longer relevant. In its written order of January 29, 2014, the Alameda court
agreed with the moving parties that the issues raised in the complaint had become moot
or otherwise nonjusticiable by virtue of the enactment of Senate Bill No. 4 and, on that
basis, it granted the motion to dismiss and/or for judgment on the pleadings. In so ruling,
the Alameda court appears to have accepted the rationale that because Senate Bill No. 4
enacted significant new directives and comprehensive solutions to the problem of lack of
adequate review of fracking and other well stimulation treatments, DOGGR’s former
pattern and practice was no longer at issue or relevant. The Alameda court expressly
stated in its order that it was granting the motion on grounds of both mootness and lack of
ripeness: “The Industry Groups[, i.e., defendants in intervention,] frame the motion as
presenting issues of mootness. The court agrees that the issue is one of justiciability
generally, but finds that it concerns both ripeness and mootness.”
As noted, the Alameda court delineated which claims it considered to be moot and
which it considered to be unripe for adjudication. It did so by dividing its justiciability
analysis into four parts: (1) DOGGR’s policy or practice before January 1, 2015;
(2) DOGGR’s policy or practice after January 1, 2015; (3) DOGGR’s review of
individual wells before January 1, 2015; and (4) DOGGR’s review of individual wells
after January 1, 2015.19 As to DOGGR’s policy or practice before January 1, 2015, the
court held the “Motion to dismiss as moot is GRANTED.” (Italics added.) The Alameda
court found all such claims were moot because, under section 3161, subdivision (b),
“[DOGGR] ‘shall allow’ all of the activities defined in Section 3157[, i.e., fracking,]
19 As to the Alameda court’s selection of January 1, 2015, as an analytical dividing line, see
footnote 12, ante.
26.
provided certain conditions are met.” Because this new provision gave “clear directions
to issue permits if the requirements of [section] 3161[, subdivision ](b) are met,” the
complaint’s challenge to DOGGR’s policy or practice “before 1/1/15” under the prior
legal landscape was found to be moot. As to DOGGR’s policy or practice “after 1/1/15,”
the Alameda court granted the motion to dismiss because the claims were “not ripe.”
(Italics added.) The Alameda court held these claims were not ripe for adjudication
because the future practices of DOGGR on the issue of fracking would presumably be
impacted by the results of the scientific study, the EIR, and future new regulations. At
the time of the ruling, the studies and EIR were not completed and new regulations were
not in effect. Finally, as to DOGGR’s review of individual wells, whether before or after
January 1, 2015, the Alameda court granted the motion to dismiss because “[t]he
complaint never sought relief based on DOGGR’s review of individual wells.”
Based on the above mootness/unripeness analysis, the Alameda court granted the
motion and held “[t]he case is DISMISSED.” On January 29, 2014, a judgment in the
Alameda action was entered in favor of defendants in intervention and DOGGR. No
appeal was taken from that judgment.
We think the Alameda court made it sufficiently clear that its ruling was on the
grounds of mootness and lack of ripeness. As the order in that action reflects, the court
was not resolving the merits of the underlying claims as to DOGGR’s prior policies,
patterns and/or practices because the legal or statutory landscape governing DOGGR’s
responsibilities had so significantly changed due to the enactment of Senate Bill No. 4.
In other words, the Alameda court did not address whether DOGGR had complied with
CEQA in the past since doing so was unnecessary or pointless; the new law, with its new
directives—which would govern decisions and practices moving forward—eliminated the
need to examine past practices. Thus, instead of reaching the substance of the underlying
claims, the Alameda court expressly announced that it was dismissing the action on
justiciability grounds due to both mootness and lack of ripeness. Because that is so, we
27.
conclude the judgment in the Alameda action was not on the merits and, hence, cannot
support res judicata.
D. Respondent’s Argument
We briefly address respondent’s position on this issue. Respondent argues the
Alameda court did reach the merits, in light of the fact that in the court’s written order it
spelled out certain ramifications of Senate Bill No. 4 on the matter of DOGGR’s role
with respect to well operators’ requests to engage in fracking. In particular, the Alameda
court noted that Senate Bill No. 4’s “shall allow” language in section 3161,
subdivision (b), would require DOGGR to grant approval to fracking requests during the
interim period set forth in that subdivision20 if the operators in question met all of the
statutory conditions. We disagree with respondent’s argument that the Alameda court, by
making such comments about Senate Bill No. 4, was actually reaching and determining
the substance of the underlying pattern and practice claims. Rather, in our interpretation
of the Alameda court’s order, the court was stating its understanding of one of the
significant impacts of Senate Bill No. 4 for the purpose of demonstrating that the pattern
and practice claims were rendered moot.21 The Alameda court was saying, in effect,
whatever DOGGR may have been required to do under the past legal setting, under
Senate Bill No. 4 it was now required to issue permits for fracking where the statutory
conditions of section 3161, subdivision (b), were met. In so stating, the Alameda court
was laboring to show that under Senate Bill No. 4 the law had so significantly changed
that it would make no sense to attempt to address the past pattern and practice claims
20 The Alameda court identified that timeframe as prior to January 1, 2015. See footnote
12, ante, concerning the use of that date. Due to a subsequent revision to Senate Bill No. 4, the
correct date for purposes of the court’s analysis was July 1, 2015.
21 It bears noting that the Alameda court’s description of the “shall allow” language in
section 3161, subdivision (b), comes entirely within the context of its mootness discussion.
28.
alleged against DOGGR in that case.22 In short, the Alameda court was justifying its
finding of mootness, and it did so by using a specific example of how the new law would
bring material changes to DOGGR’s approach and responsibilities relating to requests for
fracking. For these reasons, we conclude the crux of the Alameda court’s ruling was
mootness, not a determination of the merits. In the final analysis, respondent’s arguments
on this point are not persuasive.
For similar reasons, we reject respondent’s suggestion that the Alameda court’s
observations about the impact of section 3161, subdivision (b), amounted to the actual
adjudication of a substantive defense that led to the complaint’s dismissal. To reiterate,
the Alameda court was simply explaining its mootness ruling, not disposing of the case
based on a defense. In so holding, we are not denying the relevance of the terms of
section 3161, subdivision (b), to the question of whether or not DOGGR complied with
its legal responsibilities in approving fracking on a particular occasion, assuming the
approval in question was within the parameters of that subdivision. What we are saying
is that, regardless of the extent to which this statutory provision (§ 3161, subd. (b)) may
be asserted for that purpose, the Alameda court did not dismiss the Alameda action due to
a determination of a defense thereto. To the contrary, the record shows that the Alameda
court dismissed that action based on its assessment that the substance of the underlying
claims were not justiciable due to mootness and unripeness.23
22 Our understanding of the Alameda court’s order is consistent with the mootness rationale
of the dismissal motion itself, with which the Alameda court apparently agreed. Under the
rationale of that motion, the advent of Senate Bill No. 4—with its new directives to DOGGR on
issues such as fracking, information gathering, scientific study and environmental review—
meant that questions relating to DOGGR’s past pattern and practice under the former legal
setting had become largely academic or irrelevant.
23 At oral argument, the parties had contrasting views on how broad or how narrow the
allegations were in the Alameda action. We think the more important factor in this case is what
the Alameda court actually did in its order; that is, it expressly declined to reach the merits of the
pattern and practice claims because it clearly believed and expressly stated that the entire case
was rendered nonjusticiable by Senate Bill No. 4.
29.
E. Other Res Judicata Issue
In addition to their assertion that the judgment in the Alameda action was not on
the merits, appellants also argue in their appeal that res judicata was inapplicable for a
second reason: namely, that the Alameda action did not involve the same cause of action
as in the present case. One of the elements of res judicata is that the two proceedings
involve the same cause of action. (Mycogen, supra, 28 Cal.4th at pp. 896–897.) On this
issue, appellants claim the causes of action in the two cases were different and
distinguishable for several reasons, including the following: First, the Alameda action
was addressing an overall pattern and practice that did not concern DOGGR’s approvals
of individual oil wells; whereas, the present case involved DOGGR’s conduct in
approving 214 individual site-specific oil wells. Second, the approval of the 214 oil wells
in the present case were subsequent to, and not within the scope of, the cause of action
pled in the Alameda action. Third, the present case allegedly involved different CEQA
violations (i.e., different modes or methods of inadequate compliance), under different
facts, than were alleged in the Alameda action.
Respondent disagrees, contending that the causes of action were the same based
on a close comparison of the allegations and an analysis of the primary right involved in
each case.24 The gist of respondent’s position, as stated in its appellate brief, is as
follows: “The [Alameda] Complaint and the Amended Petition seek redress for the same
injury by invoking the same primary right.” Respondent continues, explaining that the
24 California’s res judicata doctrine is based upon the primary right theory. (Mycogen,
supra, 28 Cal.4th at p. 904.) Two proceedings are on the same cause of action if they are based
on the same “primary right.” (Ibid.; see Federation of Hillside & Canyon Assns. v. City of Los
Angeles (2004) 126 Cal. App. 4th 1180, 1202.) Under this theory, a cause of action is
“‘comprised of a “primary right” of the plaintiff, a corresponding “primary duty” of the
defendant, and a wrongful act by the defendant constituting a breach of that duty. [Citation.]
The most salient characteristic of a primary right is that it is indivisible: the violation of a single
primary right gives rise to but a single cause of action. [Citation.] … ’” (Mycogen, supra, at
p. 904.)
30.
plaintiffs in the Alameda action allegedly “sought relief from the injury caused to their
primary right to avoid environmental harm by DOGGR’s failure to undertake any
environmental review of oil and gas well approvals. That cause of action is
indistinguishable from the cause of action pled here. [Citation.] In both cases, the
primary right involves the purported right to be informed about the potential
environmental impacts from oil and gas development. [Citations.] The primary duty
alleged is DOGGR’s corresponding obligation to inform the public of any potential
environmental impacts prior to approving new oil and gas wells, with the wrongful act
being DOGGR’s alleged continued practice of not conducting this environmental review
under CEQA prior to issuing such approvals.” Respondent adds, as further support for its
position, that if the plaintiffs in the Alameda action had prevailed (keeping in mind that
the Alameda action had included a request for injunctive relief as to future approvals),
DOGGR would have been subject to that ruling with respect to its conduct in the present
case.
Having summarized the parties’ respective positions on this complex issue, we
find it unnecessary to decide the matter. Resolution of this issue is unnecessary in light
of our conclusion herein that the judgment in the Alameda action was not on the merits.
F. Conclusion and Disposition
The Alameda court dismissed the action on the ground of mootness and lack of
ripeness. Thus, the Alameda action was terminated on justiciability grounds, not on the
merits, and respondent has failed to convince us otherwise. (See Vella v. Hudgins (1977)
20 Cal. 3d 251, 257 [burden of proving that the requirements for application of res
judicata have been met is upon the party seeking to assert it as a bar].) Because the
judgment was not on the merits, res judicata was inapplicable and the trial court erred in
sustaining the demurrer on that ground. Accordingly, we reverse the judgment, with
directions that the trial court enter a new order overruling said demurrer.
31.
III. Motion to Dismiss
After this appeal was fully briefed, respondent filed a motion to dismiss the appeal
on collateral estoppel grounds “due to the now-final judgment in the similar case of
Sierra Club v. California Department of Conservation, et al. (Kern County Superior
Court, Case No. BCV-15-101300-RST)” (hereafter Sierra Club v. DOGGR).25 In its
supplemental brief in support of its motion to dismiss the appeal, respondent maintains
the trial court in Sierra Club v. DOGGR considered the identical issue involved in the
present appeal—namely, whether the judgment in the Alameda action barred under the
doctrine of res judicata subsequent CEQA challenges to DOGGR’s approval of oil and
gas wells. Furthermore, the trial court in Sierra Club v. DOGGR determined that res
judicata did apply in that case (based on the judgment in the Alameda action) and entered
a dismissal judgment on that ground, which became final when Sierra Club failed to file
an appeal in that case. According to respondent’s supplemental brief, “[u]nder these
circumstances, the judgment in Sierra Club v. DOGGR is the first final judgment to
resolve the same issue between the same parties,” and that first, final judgment precludes
the same issue being raised in the present appeal.26
Appellants filed a supplemental brief in opposition to the motion to dismiss
appeal. Appellants argue that respondent has failed to demonstrate that collateral
estoppel is applicable. Among other things, appellants point out that there is no actual
identity of the issues between Sierra Club v. DOGGR and the present case. Additionally,
appellants argue respondent has failed to show privity of the parties. Therefore,
25 Sierra Club v. DOGGR was filed on October 22, 2015. Appellants note that due to the
short statute of limitations for negative declarations, the subject negative declarations were
probably issued in approximately September 2015.
26 Respondent submitted exhibits relating to the Sierra Club v. DOGGR case for our judicial
notice, including the underlying petition by Sierra Club, the demurrer, the supporting, opposing
and reply papers in connection with the demurrer, the trial court’s ruling on demurrer, and the
judgment. We grant respondent’s request for judicial notice.
32.
appellants insist that we should deny the motion to dismiss. On balance, we agree with
appellants.
Collateral estoppel “precludes relitigation of issues argued and decided in prior
proceedings.” (Lucido v. Superior Court (1990) 51 Cal. 3d 335, 341, fn. omitted.)
Collateral estoppel (also referred to as issue preclusion) applies (1) after final
adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the
first suit and (4) asserted against one who was a party in the first suit or in privity with
that party. (DKN Holdings, LLC v. Faerber, supra, 61 Cal.4th at p. 825.) “The party
asserting collateral estoppel bears the burden of establishing these requirements.”
(Lucido v. Superior Court, supra, at p. 341.)
Although collateral estoppel (unlike res judicata) does not require the same cause
of action to be present in the two proceedings, the issue litigated must be identical. (DKN
Holdings, LLC v. Faerber, supra, 61 Cal.4th at p. 824.)27 “The ‘identical issue’
requirement addresses whether ‘identical factual allegations’ are at stake in the two
proceedings, not whether the ultimate issues or dispositions are the same.’” (Lucido v.
Superior Court, supra, 51 Cal.3d at p. 342; accord, Diocese of San Joaquin v. Gunner
(2016) 246 Cal. App. 4th 254, 266.) Where the subsequent action involves only parallel
facts, but a different historical transaction, the application of the law to the facts is not
subject to collateral estoppel. (Chern v. Bank of America (1976) 15 Cal. 3d 866, 871–
872.) “‘[I]f the very same facts and no others are involved in the second case, … the
prior judgment will be conclusive as to the same legal issues which appear .… But if the
relevant facts in the two cases are separable, even though they be similar or identical,
27 Because the focus is on the identity of issues litigated and not the identity of the cause of
action, the question of identity of issues is not determined under the primary rights theory:
“[T]he primary rights theory does not relieve the party asserting collateral estoppel from its
obligation to demonstrate the issue actually litigated and finally decided in the first action,
regardless of legal theory advanced, is identical to the factual issue as to which preclusion is
sought.” (Johnson v. GlaxoSmithKline, Inc. (2008) 166 Cal. App. 4th 1497, 1518.)
33.
collateral estoppel does not govern the legal issues which recur in the second case.’”
(Flores v. Transamerica HomeFirst, Inc. (2001) 93 Cal. App. 4th 846, 852 [holding that
although legal principles of unconscionability and the relevant contractual language were
essentially the same, the fact that the two cases involved separate loan transactions and
separate parties meant there was no identity of issues]; see Younger v. Jensen (1980) 26
Cal. 3d 397, 411 [no identity of issues where subpoena served on different party in second
case; thus, it did not involve the same transaction or set of events].)
We agree with appellants that collateral estoppel is inapplicable because the
ultimate legal issue of the res judicata effect of the Alameda action to a particular
subsequent claim or proceeding has been, in each case, applied in factually distinct
circumstances. As a result, in comparing the present case with the Sierra Club v.
DOGGR case, identical factual allegations were not at stake in each to reflect the legal
issue was truly identical for purposes of collateral estoppel. The present case seeks a
determination that DOGGR’s failure to conduct any CEQA analysis when permitting
respondent to drill 214 new oil wells in South Belridge oil field was unlawful. On the
other hand, in Sierra Club v. DOGGR, Sierra Club challenged the approvals by DOGGR
of five separate projects proposing exploratory oil and gas wells in five different
locations in Kern County on the ground that the negative declarations issued by DOGGR
for those projects were inadequate under the circumstances, and EIR’s should have been
prepared. In comparing the two cases, it is clear that the two cases are factually distinct
in several respects, including differences in oil drilling projects, locations, oil companies
that owned and operated the wells at issue, and different factual and legal challenges
under CEQA.28 Because the two cases involve separate sets of factual events, and
28 Additionally, the challenged conduct in the Sierra Club v. DOGGR case apparently
occurred in approximately September 2015 (see fn. 25, ante). The only portion of the Alameda
court’s ruling that hypothetically could apply would be the portion thereof dismissing the post-
January 1, 2015 pattern and practice claims on unripeness grounds; whereas, the present action
involved 2014 approvals that could only have related to the mootness portion of the Alameda
34.
distinct conduct on DOGGR’s part with respect to CEQA, including different locations,
operators and approvals, we conclude that the identity of issues requirement is not
satisfied. (See, e.g., Oro Fino Gold Mining Corp. v. County of El Dorado (1990) 225
Cal. App. 3d 872, 878–880 [CEQA decision regarding mineral exploratory permit in one
case did not involve same issue as the second case, due to factual differences; thus,
collateral estoppel inapplicable].) Due to such differences factually, we are unable to
definitely conclude that the ultimate legal issue of whether the judgment in the Alameda
action was res judicata in each distinct matter was identical. Consequently, collateral
estoppel does not apply.
Secondly, we agree with appellants that respondent has not met its burden of
showing privity. To invoke collateral estoppel, respondent must prove that “the party
against whom preclusion is sought” is “the same as, or in privity with, the party to the
former proceeding.” (Lucido v. Superior Court, supra, 51 Cal.3d at p. 341.) The present
action involves three appellants (i.e., Association of Irritated Residents, Center for
Biological Diversity and Sierra Club), of which only Sierra Club was involved in the
Sierra Club v. DOGGR case. Although it is true that (1) Sierra Club was a party in both
cases and (2) all three appellants share similar environmental concerns and interests
regarding oil well operations, we do not believe that these facts, under the totality of
circumstances here, were sufficient to establish that Association of Irritated Residents and
Center for Biological Diversity were in privity with Sierra Club regarding the Sierra Club
v. DOGGR litigation.
The privity element of collateral estoppel includes a fairness and due process
aspect. “‘“‘[T]he determination of privity depends upon the fairness of binding [a party]
with the result obtained in earlier proceedings in which it did not participate.’”’”
court’s ruling. This is yet another difference between the two cases that weighs against a finding
of identical issues.
35.
(Planning & Conservation League v. Castaic Lake Water Agency, supra, 180
Cal.App.4th at p. 229.) “‘“In the context of collateral estoppel, due process requires that
the party to be estopped must have had an identity or community of interest with, and
adequate representation by, the losing party in the first action as well as that the
circumstances must have been such that the party to be estopped should reasonably have
expected to be bound by the prior adjudication.”’” (Rodgers v. Sargent Controls &
Aerospace (2006) 136 Cal. App. 4th 82, 92.) “‘“The ‘reasonable expectation’ requirement
is satisfied if the party to be estopped had a proprietary interest in and control of the prior
action, or if the unsuccessful party in the first action might fairly be treated as acting in a
representative capacity for the party to be estopped. [Citations.] Furthermore, due
process requires that the party to be estopped must have had a fair opportunity to pursue
his claim the first time. [Citation.]” [Citation.]’” (Ibid.)
Here, there is no evidence that Association of Irritated Residents or Center for
Biological Diversity had a reasonable expectation of being bound by the Sierra Club v.
DOGGR action, or that they received adequate representation therein, or otherwise had
any control or impact over the outcome thereof. Declarations submitted by counsel for
appellants Association of Irritated Residents and Center for Biological Diversity in
opposition to the motion to dismiss the instant appeal assert that these organizations did
not know of, follow, or expect to be bound by, the litigation in Sierra Club v. DOGGR;
nor did they have the ability to control the course of that litigation, because Sierra Club
prosecuted that case on its own. (See Declarations of Tom Frantz and Kassia Siegel.)
Additionally, according to the declaration filed by Sierra Club’s associate attorney,
that organization decided to appeal the judgment in the Sierra Club v. DOGGR case, but
“[d]ue to a clerical error” in that firm’s office, the appeal was not timely filed.
(Declaration of Katie Schaefer.) If we found that Sierra Club’s blunder created collateral
estoppel against Association of Irritated Residents and Center for Biological Diversity, it
would unfairly deprive these other appellants from ever having an opportunity to resolve
36.
on appeal the issues vigilantly raised in the present case, even though they had no input,
involvement or control over what happened in the Sierra Club v. DOGGR case. Under
the circumstances, even if there was a general awareness that Sierra Club was involved in
another oil well case, it could not have been anticipated by the other appellants herein
that Sierra Club would, through an utter lack of diligence or vigor in that other case,
derail appellants’ ability to proceed in the present appeal. (See Planning & Conservation
League v. Castaic Lake Water Agency, supra, 180 Cal.App.4th at pp. 230–231 [no
inference of privity where presumed common interests and virtual representation
effectively abdicated by lack of vigor in representation].) Under all of the circumstances,
we are not persuaded that privity should be inferred.29
Based on the foregoing, respondent’s motion to dismiss the instant appeal on the
ground of collateral estoppel is denied.
29 When a nonparty to the prior lawsuit, like respondent here, asserts collateral estoppel,
“‘[a] particular danger of injustice arises.’” (People v. Union Pacific Railroad Co. (2006) 141
Cal. App. 4th 1228, 1244 [quoting Vandbenberg v. Superior Court (1999) 21 Cal. 4th 815, 829].)
Thus, courts must closely examine “‘whether nonmutual use of the doctrine is fair and
appropriate.’ [Citation.] In considering whether collateral estoppel is fair and consistent with
public policy, particular consideration should be given to whether there was an opportunity for
appellate review of adverse rulings.” (People v. Union Pacific Railroad Co., supra, at p. 1244.)
37.
DISPOSITION
The judgment of the trial court is reversed. The matter is remanded to the trial
court with instructions to enter a new order overruling respondent’s res judicata demurrer
to the amended petition. Costs on appeal are awarded to appellants.
_____________________
KANE, Acting P.J.
WE CONCUR:
_____________________
FRANSON, J.
_____________________
SMITH, J.
38.
Filed 5/25/17
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
ASSOCIATION OF IRRITATED RESIDENTS
et al., F073018
Plaintiffs and Appellants, (Kern Super. Ct. No. S1500CV283418)
v.
CALIFORNIA DEPARTMENT OF ORDER GRANTING REQUESTS
CONSERVATION, DIVISION OF OIL, GAS, FOR PUBLICATION
AND GEOTHERMAL RESOURCES,
Defendant and Respondent;
AERA ENERGY, LLC,
Real Party in Interest and Respondent.
As the nonpublished opinion filed on May 4, 2017, in the above entitled matter
hereby meets the standards for publication specified in the California Rules of Court,
rule 8.1105(c), it is ordered that the opinion be certified for publication in the Official
Reports.
KANE, Acting P.J.
WE CONCUR:
FRANSON, J.
SMITH, J.