California Court of Appeals, Fourth District, First Division
EUGENE G. PLANTIER, as Trustee, etc., et al., Plaintiffs and Appellants,
RAMONA MUNICIPAL WATER DISTRICT, Defendant and Respondent.
from a judgment of the Superior Court of San Diego County,
Super. Ct. No. 37-2014-00083195-CU-BT-CTL Timothy B. Taylor,
Judge. Reversed and remanded with directions.
Patterson Law Group, James R. Patterson, Allison H. Goddard,
Catherine S. Wicker; Carlson Lynch Sweet Kilpela &
Carpenter and Todd D. Carpenter for Plaintiffs and
Jonathan M. Coupal, Trevor A. Grimm and Timothy A. Bittle for
Howard Jarvis Taxpayers Association as Amicus Curiae on
behalf of Plaintiffs and Appellants.
Procopio, Cory, Hargreaves & Savitch, Kendra J. Hall,
Gregory V. Moser, John D. Alessio and Adriana R. Ochoa for
Defendant and Respondent.
S. Hentschke; Colantuono, Highsmith & Whatley, Michael G.
Colantuono and Eduardo Jansen for California Association of
Sanitation Agencies, California State Association of Counties
and League of California Cities as Amicus Curiae on behalf of
Defendant and Respondent.
Acting P. J.
and appellants Eugene G. Plantier, as Trustee of the Plantier
Family Trust (Plantier); Progressive Properties Incorporated
(Progressive); and Premium Development LLC (Premium), on
behalf of themselves and all others similarly situated
(collectively plaintiffs), appeal the judgment in favor of
defendant and respondent Ramona Municipal Water District
(District or RMWD). In this class action, the trial court
found plaintiffs failed to exhaust their administrative
remedies under article XIII D of the California Constitution
in connection with plaintiffs' substantive challenge to
the method used by District to calculate wastewater
service "fees or charges" between about 2012 and
appeal, plaintiffs contend the trial court erred when it
found there was a mandatory exhaustion requirement in section
6of article XIII D (hereinafter section 6). Plaintiffs
further contend they took the necessary steps to satisfy the
general principle of exhaustion when they separately
satisfied the administrative remedy in the Ramona Municipal
Water District Legislative Code, as amended, which District
adopted in 1996 (hereinafter RMWD legislative code); and
that, in any event, the exhaustion doctrine in section 6
should not have been applied to them because the remedy
therein was inadequate and because it was "futile"
to purse any administrative remedy under this constitutional
explain, we independently conclude that plaintiffs' class
action is not barred by their failure to exhaust the
administrative remedies set forth in section 6 because
plaintiffs' substantive challenge involving the method
used by District to calculate its wastewater service fees or
charges is outside the scope of the administrative remedies,
and because, under the facts of this case, those remedies
are, in any event, inadequate. Reversed.
is a municipal water district organized under the Municipal
Water District Act. (Wat. Code, § 71000 et seq.)
District is governed by the RMWD legislative code. District
provides, among others, water and, as relevant here,
wastewater services to about 40, 000 people living in Ramona,
California, an unincorporated community within San Diego
County. Ramona has two wastewater treatment plants, San
Vicente and Santa Maria.
uses an "Equivalent Dwelling Unit"
(EDU) system to calculate wastewater service
fees. "Parcels are assigned EDUs and charged for sewer
services on a per-EDU basis." Charges for such services
are "based on estimates of wastewater capacity needs,
flow and strength for different customer types or classes....
The District levies fixed sewer rates based on the number of
EDUs assigned to each connection. EDUs are assigned based on
the type of development and associated wastewater flow and
rates for residential customers within District living in
single-family homes and multi-family dwelling units with one
or more bedrooms are assigned 1 EDU per dwelling unit.
District has over 20 sewer rate classes for commercial
customers; EDUs are assigned for commercial customers based
on such factors as "square footage, number of washing
machines [and] number of students [per school]."
has authority to set and collect charges for sewer services.
(Wat. Code, § 71670.) Revenues collected from service
charges are used to pay operating and maintenance fees.
(Id., § 71671.) District is required to recover
sufficient revenues to cover both the operating expenses of
the sewer services it provides to customers and repairs to,
and depreciation of, works it owns and/or operates in
connection with such services. If the board of directors
(board) of District determines the "revenues... will be
inadequate... to pay [its] operating expense[s]..., to
provide for repairs and depreciation of works owned or
operated by it, and to meet all of its obligations[, ] the
board shall provide for the levy and collection of a tax...
sufficient to raise the amount of money determined by the
board to be necessary for the purpose of paying [its]
operating expenses..., providing for repairs and depreciation
of works owned or operated by it, and meeting all of its
obligations." (Id., § 72092.)
Plaintiffs and Their Operative Complaint
1998, Plantier has owned a commercial property in Ramona. As
such, he pays wastewater service fees to District.
a California corporation, owns a 25, 000 square foot office
building in Ramona. Like Plantier, Progressive pays for
wastewater services provided by District.
Premium, a California limited liability company, owns two
properties located in Ramona. It too pays District for
operative complaint asserted claims on behalf of themselves
and all other District customers who paid a wastewater
service fee on or after November 22, 2012. The complaint
alleged causes of action against District for declaratory
relief and for "refund [of] unlawful sewer service
charges." Plaintiffs sought a declaration that
District's method of determining the costs of sewer
service based on each parcel's assigned EDU violated the
"proportionally" provision of subdivision (b)(3) of
section 6. Plaintiffs also sought a refund from District of
alleged overcharges for wastewater service fees paid by its
plaintiffs in their operative class action complaint alleged
that District assigned EDU's arbitrarily and without
regard to a property's actual wastewater use and to the
proportional cost of providing that property's wastewater
service; that District's EDU-based wastewater billing
system was "inconsistent with general practice among
California water districts"; that all District
wastewater customers were required to pay an annual sewer
service fee imposed on a per-EDU basis; that at all times
relevant, District's board established the dollar amount
of the sewer service fee on an "ad-hoc basis, without
reliance on a rate study or other technical document
providing a rational basis for [the sewer service fees it]
adopted"; that the sewer service charge was a
property-related fee subject to section 6, subdivision
(b)(3); that the then-current sewer service fee for District
customers in the San Vicente sewer service area was about
$605 per EDU, and about $637 per EDU for the Santa Maria
sewer service area; and that the lack of "any rational
relationship between the [sewer service fee] and actual
wastewater use has resulted in the systematic overcharge of
wastewater customers for whom the proportional cost of
providing their property with wastewater service is less than
their EDU-based" sewer service fee.
voters in November 1996 passed Proposition 218, which added
articles XIII C and XIII D to the California Constitution.
(Paland v. Brooktrails Tp. Community Services Dist. Bd.
of Directors (2009) 179 Cal.App.4th 1358, 1365.) As
noted ante, the instant case concerns article XIII
D, which undertook to "constrain the imposition by local
governments of 'assessments, fees and charges.' (Art.
XIII D, § 1.)" (Pajaro Valley Water Management
Agency v. Amrhein (2007) 150 Cal.App.4th 1364, 1378.)
"Article XIII D sets forth procedures, requirements and
voter approval mechanisms for local government assessments,
fees and charges." (Howard Jarvis Taxpayers Assn. v.
City of Roseville (2002) 97 Cal.App.4th 637, 640.)
issue in this case is section 6 (of article XIII D), which
sets forth mandatory procedures an agency, such as District,
must follow "in imposing or increasing any fee or
charge." Among other requirements, section 6 mandates
that an agency provide "written notice by mail of the
proposed fee or charge to the record owner of each identified
parcel upon which the fee or charge is proposed for
imposition" (§ 6, subd. (a)(1)); the amount of the
proposed fee or charge (ibid.); the
"basis" upon which the fee or charge was
"calculated" and the "reason" for the fee
or charge (ibid.); "together with the date,
time, and location of a public hearing on the proposed fee or
agency is required to conduct a public hearing on the
proposed fee or charge "not less than 45 days after
mailing the notice... to the record owners of each identified
parcel" upon which the fee or charge is sought to be
imposed. (§ 6, subd. (a)(2).) At the public hearing, the
agency shall "consider all protests against the proposed
fee or charge" and if "written protests against the
fee or charge are presented by a majority of owners of the
identified parcels, the agency shall not impose the fee or
Exhaustion of Administrative Remedies
District's motion, the court bifurcated the trial into
two phases, as noted. In phase 1, the court considered the
threshold issue of whether Proposition 218 imposed an
exhaustion requirement and, if so, whether plaintiffs
satisfied that requirement or were otherwise excused from
doing so. After hearing witness testimony and the argument of
counsel, the court ...