Sonoma Luxury Resort LLC v. Cal. Reg'l Water Quality Control Bd.

96 Cal.App.5th 935

314 Cal.Rptr.3d 848

SONOMA LUXURY RESORT LLC, Plaintiff and Appellant,

v.CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD, NORTH COAST REGION, Defendant and Respondent.

Sonoma Luxury Resort LLC, Plaintiff and Appellant,

v.State Water Resources Control Board, Defendant and Respondent.

A165227, A165256

Court of Appeal, First District, Division 4, California.

Filed October 25, 2023

Counsel for Plaintiff and Appellant: EDLIN GALLAGHER HUIE + BLUM, Michael E. Gallagher, Jr., Los Angeles, Fred M. Blum, San Francisco, Christopher J. Dow, Lafayette

Counsel for Defendants and Respondents: Rob Bonta, Attorney General of California, Robert W. Byrne, Senior Assistant Attorney General, Myung J. Park, Supervising Deputy Attorney General, Matthew G. Bullock, Deputy Attorney General, Lindsay N. Walter, Deputy Attorney General

GOLDMAN, J.

The principal question we address in these consolidated appeals is whether a plaintiff challenging an agency's adjudicative decision may avoid the otherwise-applicable statute of limitations if the plaintiff contends that the agency acted without subject matter jurisdiction. We conclude that where, as here, the Legislature has clearly expressed its intent to prohibit all judicial review of the decision except in accordance with the terms of the statute, the answer is no, at least in the absence of any showing that the Legislature's prohibition on additional judicial review is unlawful.

The Regional Water Quality Control Board, North Coast Region (Regional Board) issued a civil liability complaint against Sonoma Luxury Resort, LLC (SLR) and, after a hearing, imposed more than six million dollars in penalties for SLR's pollution of protected waterways during its construction of a residential resort in Healdsburg. SLR asked the State Water Resources Control Board (State Board) to exercise its discretion to review the Regional Board's decision, but the State Board declined.

SLR then filed separate petitions for administrative mandamus against the Regional and State Boards, but missed the filing deadline by three weeks. On that ground, the trial court in each case sustained the respective Board's demurrer without leave to amend; the State Board's demurrer was also sustained on the ground that the State Board's declination to review the Regional Board's decision is not subject to judicial review. SLR appealed from the two resulting judgments, and on our own motion, we consolidated the appeals for argument and disposition.

Although it neglects altogether the additional ground on which the trial court sustained the State Board's demurrer, SLR tries to avoid the statute of limitations in both cases by arguing that, where an agency acts in the absence of subject matter jurisdiction, its action may be challenged at any time, and here the Regional Board "divested itself" of subject matter jurisdiction by conducting the administrative hearing by videoconference over SLR's objection. Although the remote hearing was authorized by Executive Order N-63-20 (Executive Order), issued by the Governor during the COVID-19 emergency, SLR challenges the lawfulness of the Executive Order under various facial and as-applied theories. In summary, SLR argues that: (1) the Executive Order violated the separation of powers (an argument rejected in Newsom v. Superior Court (2021) 63 Cal.App.5th 1099, 278 Cal.Rptr.3d 397 and LaCour v. Marshalls of California, LLC (2023) 94 Cal.App.5th 1172, 1185–1189, 313 Cal.Rptr.3d 77 with respect to similar executive orders); (2) the Regional Board unlawfully extended it to a "non-emergency hearing" (overlooking that the emergency was the COVID-19 pandemic, not the individual proceedings to which the Executive Order applied); (3) the hearing was a "quasi-criminal" proceeding because it was "akin to a criminal enforcement action" and the Regional Board imposed an "excessive and punitive fine," and therefore the application of the Executive Order denied SLR the Due Process and Sixth Amendment rights to which it was entitled as a criminal defendant; (4) for the same reasons, the Regional Board "committed a prejudicial abuse of discretion" by applying the Executive Order rather than the Judicial Council's Emergency Rule 3; and (5) the Executive Order did not apply by its own terms because "there is no evidence" that the Regional Board satisfied the requirements of the Americans with Disabilities Act and the Unruh Civil Rights Act.

We would find these arguments meritless if it were necessary to reach them. But we need not resolve the appeals on that basis because SLR's underlying premise is flawed. Water Code section 13330¹ not only imposes a 30-day deadline for challenging a regional board's decision ( § 13330, subd. (b) ), but expressly prohibits any judicial review of the decision except in accordance with the provisions of that section (id. , subds. (d), (f)). Accordingly, we conclude that SLR's petitions were untimely regardless of the basis for them.

BACKGROUND

In 2016, SLR began construction of a project consisting of a luxury resort, residential homes, open space, and related infrastructure in the hills in the northern portion of Healdsburg in Sonoma County. SLR was permitted to proceed with the project as long as it conformed to certain permit, policy, and plan requirements designed to protect "beneficial uses" of the Russian River watershed, in which the project is located. ( § 100.) Beneficial uses of the impacted water include municipal, domestic, agricultural, and industrial water supplies, groundwater recharge, hydropower generation, fishing and recreational activities, and habitat for wildlife, including rare, threatened, or endangered species.

Beginning in October 2018, Regional Board staff visited the project site and documented numerous violations of permit, policy, and plan requirements. The violations included SLR's failure to implement pollution control measures and the actual discharge of pollutants into protected waters on multiple days between October 2018 and May 2019. The Regional Board issued a complaint proposing a penalty of $6,425,680 for 38 violations.

The Regional Board notified SLR that it would hold a two-day videoconference hearing on the complaint. SLR objected to the remote format of the hearing, contending that it violated the Administrative Procedures Act, and that the Executive Order was an unconstitutional exercise of the Governor's powers under the California Emergency Services Act, Government Code section 8550 et seq., insofar as it allowed for remote administrative proceedings over a party's objection. The Regional Board overruled the objection and, following the hearing, issued its order assessing the full penalty amount against SLR.²

On January 11, 2021, SLR requested that the State Board review the order, but the State Board took no action on the request. SLR filed its petitions for writ of administrative mandamus against each Board on June 3, 2021. As noted, the trial courts sustained the Boards’ demurrers without leave to amend on the ground that the petitions were untimely, and in the State Board's case, on the additional ground that the State Board's declination to review a regional board's decision is not subject to judicial review.

STANDARD OF REVIEW

We review an order sustaining a demurrer de novo, applying our independent judgment to assess whether the complaint states a cause of action. ( Minton v. Dignity Health (2019) 39 Cal.App.5th 1155, 1161, 252 Cal.Rptr.3d 616.) We assume the truth of all properly pleaded facts, as well as all facts that may be implied or reasonably inferred from those expressly alleged, but we do not assume the truth of contentions, deductions, or conclusions of fact or law. ( Ibid. ) "In order to prevail on appeal from an order sustaining a demurrer, the appellant must affirmatively demonstrate error. Specifically, the appellant must show that the facts pleaded are sufficient to ... overcome all legal grounds on which the trial court sustained the demurrer." ( Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 752, 154 Cal.Rptr.3d 394 ( Scott ).) We review for abuse of discretion the trial court's denial of leave to amend. ( Minton , at pp. 1161–1162, 252 Cal.Rptr.3d 616.)

DISCUSSION

1. SLR Fails to Address the Trial Court's Ruling that the State Board's Declination to Review the Regional Board's Order Is Not Subject to Judicial Review

In the next section, we analyze the timeliness of SLR's petitions. But first, SLR has disregarded its burden on appeal by failing to address the trial court's additional basis for sustaining the State Board's demurrer. As the State Board pointed out, in Johnson v. State Water Resources Control Bd. (2004) 123 Cal.App.4th 1107, 1112–1114, 20 Cal.Rptr.3d 441, the court found that the trial court properly sustained the State Board's demurrer on the ground that its declination to review a regional board's imposition of a penalty is not subject to judicial review. Similarly, in City of Rancho Cucamonga v. Regional Water Quality Control Bd. (2006) 135 Cal.App.4th 1377, 1383, 38 Cal.Rptr.3d 450, the court held that the State Board's declination to review the regional board's decision did not make it a proper party and upheld the order sustaining its demurrer for that reason.

SLR's opening brief did not address this ground for the trial court's ruling, and in response to the State Board's briefing of the issue, its reply brief misstated the argument as follows: "Next, the State Board claims incorrectly that neither it nor the Court of Appeal can review the Regional Board's decision imposing administrative penalties on SLR because SLR has waived or abandoned these arguments." The State Board did not argue that it could not review the Regional Board's decision, and SLR's reply brief did not respond to the State Board's actual argument or address the authorities the State Board cited in support of its position. Because SLR has not even attempted to satisfy its burden on...