Collateral estoppel is no day at the beach (a lesson in appealing in a timely fashion)

Occasionally, a party will try to get around the finality of a decision by making a “collateral attack” on its validity in a separate proceeding. That can work if you are attacking the jurisdiction of the tribunal to issue the prior ruling, but otherwise . . . well, I haven’t seen it work. (But there may be a case out there.)

The plaintiffs in Bowman v. California Coastal Commission, case no B243015 (2d. Dist. March 18, 2014) were unusually imaginative in their attempt. Plaintiffs owned a coastal property. Their predecessor had applied for a coastal development permit to refurbish the residence on the property. After his death, his successors (plaintiffs) received notice that the permit had been approved on the condition that the owners offer to dedicate a lateral easement across the property. The owners did not appeal that decision.

Later, they applied for a second permit, this time to replace a collapsed barn on the property, but also including remodeling of the residence and some other improvements that had been approved in the first permit. They asked the County to remove the condition that was placed on the first permit. The County did so, but two commissioners and a couple of public interest groups appealed to the Coastal Commission, which reversed, meaning the condition stayed. The owners petitioned for administrative mandate.

The arguments the owners (SDS) had made to the commission concerned whether the easement was an appropriate condition to place on the first permit. They get nowhere, for the Court of Appeal points out that having failed to appeal that decision on the first permit, the decision — condition included — had become final, and the doctrine of collateral estoppel precluded the owners’ collateral attack on the condition.

Since they never completed the renovation authorized by the first permit, the owners argued they could avoid collateral estoppel by “walking away” from the first permit, giving Justice Gilbert an opportunity to deliver one of his typically witty lines (emphasis mine):

SDS argues, without citation to authority, that a permit applicant who is dissatisfied with a permit condition may simply “walk away” from the permit and apply for a new one. SDS may be able to walk away from the permit, but it cannot walk away from collateral estoppel.

The lesson here? If you are dissatisfied, appeal in a timely fashion. Don’t count on being able to attack any aspect of the decision in a later proceeding.

Know your route of review . . . and when to invoke it

If you don’t know your route of review and when to invoke it, you end up like the plaintiff in Tejon Real Estate, LLC v. City of Los Angeles, B247255 (2d Dist. January 23, 2014). In fact, not only did that plaintiff fail to seek review properly, it never even got a final determination subject to review.

The plaintiff wanted to build a residence on a vacant lot and received an informal opinion from the fire department that it could  not build a residence unless a fire hydrant was installed within 300 feet of the property. It then got  an estimate from the city Department of Water & Power (“DWP”) that extending the water line and hydrant would cost the plaintiff $77,000.

Plaintiff filed a declaratory relief action seeking an interpretation of DWP rules regarding the extension of existing water lines. When the city demurred for failure to exhaust administrative remedies and contending that any administrative decision should be reviewed by writ of mandamus rather than a declaratory relief action, the trial court sustained the demurrer and the plaintiff appealed:

The sole cause of action in appellant’s complaint was for declaratory relief. Appellant contends (1) that it “completed the application process for water service” and received a “final determination,” and (2) that it is, therefore, entitled to a declaration interpreting the pertinent rules and regulations under Code of Civil Procedure section 1060. Appellant is incorrect on both counts.

Regarding point (1), however, appellant admitted:
that it did not prepare or submit plans or seek a building permit which would have provided an opportunity for all the relevant City departments to determine precisely what conditions to impose under the City’s various building and safety provisions before appellant could commence construction of the proposed residence.
Thus, plaintiff could not rightly claim to have obtained a final determination:
Here, appellant was provided preliminary opinions and estimates from City personnel. Appellant did not receive a final determination from the City and cannot say with certainty what charges will be imposed or conditions enforced once the City has rendered its final decision based on specific plans for construction. It would be premature for a court to step in at this point before the City has had an opportunity to interpret its own rules and building requirements.

Plaintiff would have been sunk even if it had obtained a final administrative determination, though. Because plaintiff sought a declaration as to how the rules were applied to a particular parcel, it had no right to have the matter decided by a declaratory judgment action. Rather, it should have obtained the final determination and, assuming it was aggrieved, petitioned for administrative mandamus under Code of Civil Procedure section 1094.5.

Plaintiff at least mounted an effort to get around the requirement of a final determination, claiming that exhausting administrative remedies would be futile. It’s a mystery why plaintiff thought a declaratory relief action was appropriate, though, because the opinion never explains the plaintiff’s basis for that position, except the bare assertion that plaintiff was entitled to seek declaratory because of the phantom final determination.

A standard of review that’s a mouthful

Appellate Attorney Jeanne Collachia is both witty and correct with this statement on her website: “Just like there are three things you need to know about real estate, there are three things you need to know about appeals — Standard of Review — Standard of Review — Standard of Review.” Naturally, I have stressed the standard of review too, with many posts at least touching on subtleties in the standard of review or disputes over which standard applies. Determining the applicable standard can sometimes be tricky. Sometimes, multiple standards apply, each applicable to a different stage of reasoning.

Now, imagine you’re an accountant representing himself on a writ of administrative mandamus, challenging the revocation of your Certified Public Accountant license. You’re not a lawyer, so you would probably appreciate an easy-to-understand, easy-to-apply standard of review. But you wouldn’t get it, as the self-represented plaintiff and appellant in Cassidy v. California Board of Accountancy, case no. G046663 (Fourth District, Sept. 9, 2013, publication ordered Oct. 16, 2013, learned the hard way:

When considering a petition for a writ of administrative mandamus, a court (whether a trial court in the first instance or an appellate court on appeal from the trial court‟s decision) considers the administrative agency‟s findings and decision to determine whether they are supported by the evidence and may also consider whether the agency abused its discretion in imposing its penalty. (Cal. Administrative Hearing Practice (Cont.Ed.Bar 2d ed. 2010) § 8.107, p. 495.)
Code of Civil Procedure section 1094.5 delimits the scope of the trialcourt‟s inquiry. The trial court considers whether the respondent agency lacked jurisdiction; “whether there was a fair trial; and whether there was any prejudicial abuse of discretion. Abuse of discretion is established if the respondent has not proceeded in the manner required by law, the . . . decision is not supported by the findings, or the findings are not supported by the evidence.” (Id., subd. (b).) In reviewing the findings, the trial court exercises its independent judgment if statutorily required to do so or if the administrative decision involves a “fundamental vested right” (2 Cal. Administrative Mandamus (Cont.Ed.Bar 3d ed. 2011) § 16.52, p. 640), such as revocation of a professional license (Bixby v. Pierno (1971) 4 Cal.3d 130, 146). In such cases, “abuse of discretion is established if the court determines that the findings are not supported by the weight of the evidence.” (Code Civ. Proc., § 1094.5, subd. (c).) Nonetheless, “[i]n exercising its independent judgment, a trial court must afford a strong presumption of correctness concerning the administrative findings, and the party challenging the administrative decision bears the burden of convincing the court that the administrative findings are contrary to the weight of the evidence.” (Fukuda v. City of Angels (1999) 20 Cal.4th 805, 817 (Fukuda).) “The scope of the trial before the superior court is not an unqualified or unlimited trial de novo, but the trial proceeds upon a consideration of the record of the administrative proceedings which is received in evidence and marked as an exhibit.” (Borror v. Department of Investment (1971) 15 Cal.App.3d 531, 537; see also Helene Curtis, Inc. v. Los Angeles County Assessment Appeals Bds. (2004) 121 Cal.App.4th 29, 37 [in Code Civ. Proc., § 1094.5 proceeding, evidence limited to administrative record with the narrow, discretionary exception set forth in subd. (e) for evidence that could not reasonably have been produced or was improperly excluded at administrative hearing].)
An appellate court applies the following standards of review to a trial court‟s denial of a petition for a writ of administrative mandamus. First, if the trial court exercised its independent judgment, we review the record to determine whether the court‟s factual findings are supported by substantial evidence, resolving all evidentiary conflicts and drawing all legitimate and reasonable inferences in favor of the court‟s decision. (Fukuda, supra, 20 Cal.4th at p. 824 [“Even when, as here, the trial court is required to review an administrative decision under the independent judgment standard of review, the standard of review on appeal of the trial court‟s determination is the substantial evidence test”]; Bixby v. Pierno, supra, 4 Cal.3d 130, 143, fn. 10 [“After the trial court has exercised its independent judgment upon the weight of the evidence, an appellate court need only review the record to determine whether the trial court‟s findings are supported by substantial evidence”].) Second, “to the extent pure questions of law (e.g., jurisdiction) were decided at the trial court upon undisputed facts, a de novo standard will apply at the appellate level.” (Anserv Ins. Services, Inc.. v. Kelso (2000) 83 Cal.App.4th 197, 204.) Third, we review de novo whether the agency‟s imposition of aparticular penalty on the petitioner constituted an abuse of discretion by the agency. (Antelope Valley Press v. Poizner (2008) 162 Cal.App.4th 839, 851; Szmaciarz v. State Personnel Bd. (1978) 79 Cal.App.3d 904, 921.) But we will not disturb the agency’s choice of penalty absent “an arbitrary, capricious or patently abusive exercise of discretion” by the administrative agency. (Cadilla v. Board of Medical Examiners (1972) 26 Cal.App.3d 961, 966.)
So, how do you suppose this pro per appellant fared? Unsurprisingly, the Court of Appeal observed that “On appeal, Cassidy in many respects misapprehends the scope of our review.” No doubt, he considered it “legalese.”

Labor Commissioner’s Superior Court action pulls the rug out from under an employer’s writ petition

The recent decision in American Corporate Security, Inc. v. Labor Commissioner, case no. C070504 (3d Dist. Sept. 10, 2013, published Sept. 27, 2013) is an important demonstration of one of the obstacles to writ review of discriminatory discharge decisions of the Labor Commissioner under Labor Code section 98.7, subdivision (e)..

When an employer seeks writ review of such a decision, the employer must show that it has “no other plain, speedy and adequate remedy.” This is what ACS alleged, having exhausted its route of administrative appeal (the Acting Director of the Department of Industrial Relations had already upheld the decision). But while the writ petition was pending, the Commissioner filed a Sacramento Superior Court action under Labor Code section 98.7, subdivision (c) to enforce her determination. The Commissioner then demurred to the writ petition, arguing that ACS had a “plain speedy and adequate remedy” because it could assert the same arguments it was making in the writ proceedings as affirmative defenses in the Sacramento action. The trial court sustained the demurrer without leave to amend, and ACS appealed.

The Court of Appeal affirmed, rejecting arguments that the Sacramento action did not offer ACS a de novo procedure. The Labor Commissioner’s suit to enforce her determination is “by its very nature a de novo procedure.” It found no barrier to ACS raising its arguments as affirmative defenses to the Commissioner’s complaint, and noted that ACS had indeed pleaded those affirmative defenses.

BACKGROUND: ACS’s defenses included procedural ones. Though the labor Code required the Commissioner to make a determination within 60 days of the the employee’s complaint, the Commissioner did not issue her initial decision in this case until three years after the employee filed his complaint. During that time, one of ACS’s exculpatory witnesses had died and another had moved away, and the Commissioner’s determination that there was a Labor Code violation relied in part on ACS’s failure to provide its principal witness during the investigation.

Collateral Estoppel and the Exhaustion Doctrine

Must a whistleblower whose claim is denied at the administrative level exhaust his judicial remedies by petitioning for mandamus in the Superior Court before he may file a civil suit under the Whistleblower Act? That was the apparent question in CALPERS v. Superior Court, case no. C054168 (3d Dist. Feb. 15, 2008), where CALPERS contended that its demurrer to the civil suit should have been upheld because the plaintiff, whose whistleblower administrative claim had been denied by the State Personnel Board, did not challenge the SPB executive officer’s findings by petitioning for mandamus.

The answer is, “it depends.” That’s because the issue isn’t so much whether the statute requires exhaustion — it doesn’t — but because the findings have collateral estoppel effect. If the findings are not enough to bar a civil claim, then the plaintiff can proceed despite not petitioning for mandamus. But if the administrative findings preclude the civil claim, the whistleblower needs to challenge adverse findings successfully to preclude their collateral estoppel effect:

If, as plaintiff would like, the statute and the amended regulation were divorced from a complicated body of case law on the binding effect of administrative findings in subsequent litigation, we could accept the plain reading of the statute, bolstered by the regulation, and conclude a whistleblower need not be encumbered by the administrative findings of the SPB in his civil action under the Whistleblower Act. We are not, however, at liberty to pretend the thorny problems posed by collateral estoppel do not exist. As a result, even if we were to accord great weight to the SPB’s construction of [Government Code] section 8547.8’s administrative exhaustion requirement, we conclude that the plain language of the statute simply does not resolve the more difficult dilemma posed by collateral estoppel.

The court affords collateral estoppel effect to the executive officer’s findings — and thus finds the civil claim barred —  even though the findings were based solely on documentary evidence and argument and the whistleblower’s request for a full evidentiary hearing was denied:

Thus, it appears the investigation became a contested proceeding based on opposing evidentiary submissions. The executive officer served as a neutral adjudicator and was required to and did consider the parties’ documentary evidence as well as arguments. “[S]o long as the agency is required by law to accept and consider evidence from interested parties before making its decision,” the proceedings, even if entirely documentary, satisfy the hearing requirement of Code of Civil Procedure section 1094.5. [Citations.]

Since, as we have concluded, the SPB’s decision was made as the result of a proceeding in which evidence was required to be given and considered by the executive officer, its validity can be challenged by a petition for a writ of mandate. Here, plaintiff chose not to challenge the adverse findings by way of a petition for a writ. As a result, those findings cannot be relitigated in a whistleblower civil action and respondent court erred by overruling PERS’s demurrer.

This decision initially struck me as fundamentally unfair. No one could complain of collateral estoppel effect for findings made after a full evidentiary hearing. But in this case, the whistleblower’s request for an evidentiary hearing had been denied and the findings were based exclusively on documentary submissions. Even the court, in light of inherent flaws it notes in the administrative procedure, seems to regret that it must issue this decision :

Without exempting whistleblowers from pursuing the administrative proceedings it requires them to commence, we must apply traditional principles of collateral estoppel, and despite the distinct infirmities present in the administrative proceedings, we conclude that any adverse findings rendered by the SPB have a preclusive effect in subsequent civil litigation unless challenged by a writ of administrative mandamus.

Exclusionary Rule Beats the Criminal Rap — but not the Administrative One

A driver driving his own car is pulled over by a police officer who, because of outdated police records, believes the car is stolen.  While detaining the driver during the check on the ownership of the vehicle, the officer notes signs of drinking and the driver admits to having been drinking.  He is arrested and later blows a 0.12 breathalyzer.

In his criminal prosecution, he moves to suppress all evidence obtained or seized in connection with the traffic stop.  Easy call.  Case dismissed.

When the DMV holds an administrative review of his driving privileges, the driver makes the same motion.  Denied, and driver’s license is suspended for a year.  The superior court denies his petition for writ of mandate, finding no error.  Driver appeals.

In Park v. Valverde, case no. G037778 (June 26, 2007), the Fourth District Court of Appeal affirms.  Supreme Court precedent requires a balancing of “the policies underlying the rules and the purposes and nature of the proceeding” when determining whether to apply exclusionary rules.  Given that the purpose of the DMV proceeding is to get drunk drivers off the road rather than to impose punishment and excluding evidence would only marginally increase any deterrent effect on unlawful police conduct, the court finds that the exclusionary rule does not carry over into the administrative proceedings under the facts of this case.