appellants opening manatt -...
TRANSCRIPT
No. B255408
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
GOLDEN STATE WATER COMPANYPlaintiff and Appellant
vs.
CASITAS MUNICIPAL WATER DISTRICTCASITAS MUNICIPAL WATER DISTRICT COMMUNITYFACILITIES DISTRICT NO. 2013.1 OJAI ALL PERSONS
INTERESTED IN THE VALIDITY OF CASITAS MUNICIPAL
WATER DISTRICT RESOLUTIONS NOS. 13.1213.13 AND 13.14
ET AL.
Defendants and Respondents.
On Appeal From a Judgment of the Ventura County Superior Court
No. 56-2013-00433986-CU-WM-VTA
The Honorable Kent M. Kellegrew
APPELLANTS OPENING BRIEF
MANATT PHELPS PHILLIPS LLP
MICHAEL M. BERGER No. 43228
GEORGE M. SONEFF No. 117128
EDWARD G. BURG No. 104258
BENJAMIN G. SHATZ No. 160229
11355 West Olympic Boulevard
Los Angeles CA 90064-1614
Telephone 310 312-4000
Fax 31 312-4224
Attorneys for Plaintiff and Appellant
Golden State Water Company
Certificate of Interested Entities or Persons
Pursuant to California Rules of CQurt rule 8.208 Appellant Golden
State Water Company states that it is a subsidiary of American States Water
Company NYSE AWR a publicly traded corporation and that the only
entity or person owning more than 10% is BlackRock Inc.
September 25 2014 Respectfully submitted
MANATT PHELPS PHILLIPS LLP
By ./ A/5MICHAEL M. BERGER
Attorneys for Appellant
Golden State Water Company
I
TABLE OF CONTENTS
Page
INTRODUCTION ....................................................................................... 1
STATEMENT OF FACTS ......................................................................... 5
Casitas MWDs Plan To Finance A Taking. Of Golden States
Property and Service Area ............................................................... 5
Golden States Property Includes Facilities and Water Rights....... 10
The Challenge to the Validity of Casitas MWDs Plan ................. 10
The Trial Court Ruling ...................................................................11
QUESTIONS PRESENTED ..................................................................... 14
STANDARD OF REVIEW ......................................................................14
LEGAL ARGUMENT ...............................................................................1
I. THE MELLO-ROOS ACT CANNOT BE USED TO
FINANCE PURCHASE OF INTANGIBLE PROPERTY ORPROPERTY RIGHTS .....................................................................1
A. The Purpose and Requirements of the Mello-Roos Act ..... 15
B. Mello-Roos Funding Can Only Be Used to Finance the
Purchase of Certain Specified Facilities or Services .......... 18
C. A CFDs Power of Taxation is Strictly Construed ............. 19
D. Casitas MWD Violated the Mello-Roos Act by
Authorizing the CFD to Finance Acquisition of
Intangibles ...........................................................................20
II. THE MELLO-ROOS ACT CANNOT BE USED TO
FINANCE A TAKING OF PROPERTY BY EMINENT
DOMAIN ....................................................................................... 24
A. A Forced Acquisition by Eminent Domain Is Not a
Purchase ........................................................................... 26
B. The Legislature Considered - and Rejected -Eminent Domain in the Mello-Roos Act ............................
28
i
TABLE OF CONTENTS
contdPage
C. The Power of Eminent Domain is Strictly Construed
Never Implied ..................................................................... 29
D. Mello-Roos Does Not Permit the Financing of a
Lawsuit ................................................................................ 33
E. Mello-Roos Does Not Allow Taxpayers to be Saddled
With Tax Liens Yet Receive Nothing In Return ............... 36
F. Liberal Construction Cannot Be Used to Rewrite
Mello-Roos .......................................................................... 38
III. THE MELLO-ROOS ACT CANNOT BE USED BY ONE
SERVICE PROVIDER TO SUPPLANT ANOTHER .................. 39
IV. THE WILL OF THE ELECTORATE CANNOT COMPELILLEGAL ACTION ....................................................................... 42
V. TESTIMONY BY THE WATER DISTRICTS LAWYERABOUT HIS PRIOR USE OF MELLO-ROOS WASIMPROPER .................................................................................... 43
CONCLUSION ......................................................................................... 45
ii
TABLE OF AUTHORITIES
CASES
Amtower v. Photon Dynamics Inc.
2008 158 Cal.App.4th 1582 ............................................................... 43
Azusa Land Partners v. Dept. of Indus. Relations
2010 191 Cal.App.4th 1 .....................................................................16
Camarillo v. Vaage
2003 105 Cal.App.4th 552 ................................................................. 14
Central Delta Water Agency v. State Water Resources Control Bd.
1993 17 Cal.App.4th 621 32
City of Los Angeles v. Koyer
1920 48 Cal.App. 720 ....................................................................... 30
City of Oakland v. Oakland Raiders
1982 32 Cal.3d 60 .............................................................................. 30
City of Oakland v. Oakland Raiders
1985 174 Cal.App.3d 414 ..................................................................30
Dept. of Motor Vehicles v. Industrial Accident Comm.
1948 83 Cal.App.2d 671 .................................................................... 38
Doe v. Saenz
2006 140 Cal.App.4th 960 ................................................................. 32
Dower v. Bramet
1984 152 Cal.App.3d 837 ...................................................................4
Farahani v. San Diego Community College Dist.
2009 175 Cal.App.4th 1486 ............................................................... 14
Harden v. Superior Court
1955 44 Ca1.2d 630 ............................................................................31
In re D.B.
2014 58 Cal.4th 941 ........................................................................... 22
In re England
D.C. Cir. 2004 375 F.3d 1169 .............................................................. 3
Katz v. Campbell Union High School Dist.
2006 144 Cal.App.4th 1024 ............................................................... 11
Kenneth Mebane Ranches v. Superior Court
1992 10 Cal.App.4th 276 ............................................................. 30 31
Legislature v. Deukmejian
1983 34 Cal.3d 658 ............................................................................42
iii
TABLE OF AUTHORITIES
cont d
Lesher Communications Inc. v. City of Walnut Creek
1990 52 Cal.3d 531 ............................................................................ 42
Marbury v. Madison
1803 1 Cr. 5 U.S. 137 ......................................................................... 13
Mulville v. City of San Diego
1920 183 Cal. 734 19
Murphy v. Kenneth Cole Productions Inc.
2007 40 Cal.4th 1094........... ............................................................... 32
Napa Valley Wine Train Inc. v. Pub. Util. Com.
1990 50 Cal.3d 370 ...................................................................... 23 24
National Cable Television Assn. Inc. v. United States
1974 415 U.S. 336 .............................................................................. 20
Panhandle Oil Co. v. Knox
1928 277 U.S. 218 .............................................................................. 20
People ex rel. Lockyer v. Shamrock Foods Co.
2000 24 Cal.4th 415 ........................................................................... 14
People v. Buena Vista Mines Inc.
1996 48 Cal.App.4th 1030 ................................................................. 23
People v. Torres
1995 33 Cal.App.4th 37 ......................................................................4
Preston v. State Bd. ofEqualization
2001 25 Cal.4th 197 ........................................................................... 21
Richardson v. City of San Diego
1961 193 Ca1.App.2d 648 .................................................................. 38
Schneider v. California Coastal Commn.
2006 140 Cal.App.4th 1339 .............................................................. 23
State v. Superior Court
2000 78 Cal.App.4th 1019 ................................................................ 21
Summers v. A.L. Gilbert Co.
1999 69 Cal.App.4th 1155 ..................................................................4
Wilson v. City of Laguna Beach
1992 6 Cal.App.4th 543 ..................................................................... 32
iv
TABLE OF AUTHORITIES
contd
CONSTITUTIONS STATUTES
U.S. Const. 5th Amend .............................................................................. 31
Cal. Const. art. I 19 ......................................................................... 26 31
Cal. Const. art. XIII A 1 ........................................................................ 15
Cal. U. Com. Code 1201 ......................................................................... 28
Civil Code 654 ........................................................................................ 21
Civil Code 655........................................................................................ 21
Code Civ. Proc. 860 et seq...................................................................... 11
Code Civ. Proc. 1230.010 et seq............................................................. 26
Code Civ. Proc. 1230.030 ....................................................................... 28
Code Civ. Proc. 1235.140......................................................................... 9
Code Civ. Proc. 1240.130 ....................................................................... 28
Code Civ. Proc. 1240.650c 25
Code Civ. Proc. 1250.110 ....................................................................... 33
Code Civ. Proc. 1250.210 ....................................................................... 33
Code Civ. Proc. 1250.220 ....................................................................... 33
Code Civ. Proc. 1250.350 et seq......................................................... 8 36
Code Civ. Proc. 1250.410b ..................................................................... 9
Code Civ. Proc. 1260.110 et seq......................................................... 836
Code Civ. Proc. 1265.250 ....................................................................... 29
Code Civ. Proc. 1268.5 10 ......................................................... 8 9 33 36
Code Civ. Proc. 1268.610......................................................... 8 9 33 37
Code Civ. Proc. 1268.620 ....................................................................... 37
Educ. Code 1793 ..................................................................................... 27
Govt. Code 7267 et seq........................................................................... 31
Govt. Code 53311 et seq..................................................................... 2 16
Govt. Code 53313 ............................................................................. passim
Govt. Code 53313.5 passim
v
TABLE OF AUTHORITIES
cont d
Govt. Code 53313.5e ............................................................................ 41
Govt. Code 53315 ................................................................................... 38
Govt. Code 53317................................................................................... 35
Govt. Code 53317c
Govt. Code 53317e2 .......................................................................... 34
Govt. Code 53317.5 ................................................................................ 29
Govt. Code 53321................................................................................... 16
Govt. Code 53321c ..................................................................... 6 17 20
Govt. Code 53321d ........................................................................... 6 17
Govt. Code 53321.5 ...................................................................... 6 17 20
Govt. Code 53322 ................................................................................... 17
Govt. Code 53325.1 ................................................................................ 17
Govt. Code 53325.1a2 ....................................................................... 20
Govt. Code 53326............................................................................... 6 17
Govt. Code 53345b ............................................................................... 17
Govt. Code 53345.3 ................................................................................ 34
Govt. Code 53345.8a ............................................................................20
Govt. Code 53353.5 ................................................................................ 17
Govt. Code 53355................................................................................... 17
Govt. Code 53359.... .............................................................................. 11
Govt. Code 53382 ................................................................................... 27
Govt. Code 93020c ............................................................................... 27
Pub. Res. Code 21080.04 23........................................................................
Pub. Util. Code 3341.1a ....................................................................... 27
Streets Hwys. Code 11101.5 ............................................................... 27
Streets Hwys. Code 30400 .................................................................. 27
Streets Hwys. Code 35108j .............................................................. 27
Water Code 11575 ................................................................................... 27
Water Code 55370 ................................................................................... 27
vi
TABLE OF AUTHORITIES
contd
Water Code 71693 ......................................................................... 22531
Water Code 71694................................................................................... 31
OTHER AUTHORITIES
58 Cal.Jur.3d 2012 Statutes 111 ........................................................... 22
7 Wigmore on Evidence 1978 1952 ..................................................... 44
Fulton William How We Pay For Growth
http//www.planetizen.com/node/91 2003 ......................................... 15
9 Miller Starr Cal. Real Estate 3d ed. 2007 2543 ........................... 17
vii
INTRODUCTION
The trial court was correct about one thing This is a case of first
impression. See RT 6 21 34 The issues to be decided are
1. Whether the Mello-Roos Act - which authorizes
issuance of bonds to finance the purchase .. of any real or
other tangible property - can be used to finance acquisition
of intangible property.
2. Whether the Mello-Roos Acts authorization of bond
financing for the purchase of property can be construed to
allow bond financing for an attempt to take property by
eminent domain litigation rather than by voluntary purchase.
3. Whether a water service provider can use Mello-Roos
Act bond funding to acquire all of the property of another water
service provider for the sole purpose of using that property to
provide the very same service despite the fact that theMello-RoosAct says it shall not be used to supplant services already
available within that territory.2
This is an important case in which the legality of a $60 million bond
issuance is at stake. More than that other public agencies are watching this
case to see whether it is legal to radically expand Mello-Roos Act bond
funding beyond the plain words of the Acts enabling statute as
Respondent did here.
In simple terms the case involves the provision of water to the City
of Ojai. Currently Appellant Golden State Water Company aninvestor-ownedpublic utility provides water service to virtually all of the city.
Govt. Code 53313.5 emphasis added.
2Govt. Code 53313 emphasis added.
1.
Respondent Casitas Municipal Water District Casitas MWD a municipal
entity provides service to the surrounding largely rural area in Ventura
County.
Casitas MWD wants to supplant Golden State as the City of Ojais
water provider by acquiring Golden States water system facilities and its
customer base. Golden State is not willing to sell its facilities or give up its
customers. As a public entity Casitas MWD aims to invoke its eminent
domain power to oust Golden State by the forced acquisition of its
property. Casitas MWDs plan is to condemn all of Golden States pipes
pumps reservoirs wells water rights customer records - everything -and then use those same assets to provide the same water service as Golden
State is now providing to the same people.
Casitas MWD either does not have or does not choose to spend
enough money to pay for a taking of Golden- States water system or even
for the eminent domain litigation which that would entail. Instead Casitas
MWD proposes to raise the funds by selling $60 million in bonds to be
repaid by new special property taxes under the authority of the Mello-Roos
Act Govt. Code 53311 et seq.. Casitas MWD has set up a Mello-Roos
Community Facilities District and has purported to empower this
Community Facilities District the CFD to issue the bonds and then levy
the special Mello-Roos taxes for up to 40 years against all Ojai property
owners in order to finance the planned eminent domain litigation.
One thing that is not an issue is whether Casitas MWD has the
power of eminent domain. It does. See Water Code 71693 so
providing. But that is not relevant. The focus of this case is whether the
Mello-Roos Act - which is circumscribed by a narrowly drafted enabling
statute Govt. Code 53313.5 that authorizes a special. kind of financing
2
for only specific kinds of property purchases or construction - can be used
to fund the confiscation of an existing utility business. It cannot. The
statute is clear on that.
As Justice Frankfurter summarized in his threefold imperative to
law students in his landmark statutory interpretation course 1 Read the
statute 2 read the statute 3 read the statute Quoted in In re England
D.C. Cir. 2004 375 F.3d 1169 1182.
Because the Mello-Roos Act empowers taxation by a municipality
the case law mandates that its scope be strictly confined according to its
terms. See post pp. 19-20. Moreover case law also shows the
impropriety of Casitas MWDs effort inject into the Mello-Roos Act an
authorization to finance a taking by eminent domain the eminent domain
power can never be found to exist in a statute by implication it must be
clearly expressed in the statute or it will not be held to exist. See post
pp. 29-32. Coupling these settled rules of construction with Justice
Frankfurters threefold imperative provides the answer to all questions
presented on this appeal. The Act was plainly not intended to finance a
scheme such as Casitas MWDs.
Casitas MWD had the support of the local electorate which
apparently accepted the idea that by simply substituting a nearby water
district as the water supplier in place of the regulated public utility that had
served the City for the past century water rates would fall - even though
the water district would use the same physical plant and deliver the same
water as the existing public utility.
The decision below is brief. It contains only seven short paragraphs
of rationale. As the trial court noted some 87% of those who voted were in
favor of the Casitas MWD scheme and the court evidently felt the heat
3
generated by the election holding that the will of the electorate must
control. 6-AA-1496 RT 4
If upheld the judgment would stand for the unprecedented
proposition that a Community Facilities District formed under theMello-RoosAct is authorized to use bond financing and special property taxes to
acquire all of the assets of an operating public utility - including all of the
utilitys tangible property of whatever type all of its intangibles such as
contracts water rights and business goodwill and the utilitys books and
records - and to do so by way of eminent domain litigation for the
express purpose of supplanting an operating public utility in favor of a
different municipally-owned utility.
The decision below would also stand for the unique proposition that
the courts when deciding whether a ballot proposition passed by the
electorate violates the law may be guided - in fact as stated by the trial
court controlled - by the will of the electorate rather than by the language
of the law.
The trial courts conclusions involved solely issues of law. Its
conclusions are erroneous and thus reversal is mandated.
4
STATEMENT OF FACTS
The essential facts are not in dispute.
Golden State is an investor-owned public utility regulated by the
California Public Utilities Commission that has supplied water to virtually
the entire City of Ojai for more than a century. I-AA-3-4 The Public
Utilities Commission PUC sets the rates Golden State may charge to its
customers.
Casitas MWD a quasi-municipal corporation supplies water to the
surrounding agricultural and exurban area. As a quasi-municipal entity its
rates are exempt from PUC regulation.
Casitas MWDs Plan To Finance A Taking Of Golden States Property
and Service Area
This litigation had its genesis when some Ojai customers asked
Casitas MWD to replace Golden State as the citys water service supplier.
2-AA-407 Casitas MWD wants to acquire Golden States service area
and all of its property. Golden State is unwilling to sell or to be supplanted
as the citys water service supplier. 1-AA-2 Casitas MWD concluded
that it would have to condemn Golden States property in order to proceed.
2-AA-332
Although Casitas MWD has statutorily-granted power to take
property by eminent domain in certain circumstances Casitas MWDs
current customers all outside Ojai have no wish to see their rates raised to
pay for the proposed takeover of the Ojai system as the takeover is not
designed to benefit them. 2-AA-407-408
5
So to raise the money Casitas MWD has formed a Mello-Roos
Community Facilities District the CFD whose stated purpose is to issue
$60 million in Mello-Roos bonds to finance the condemnation of Golden
States Ojai water service system and impose a Mello-Roos special tax on
each parcel of land in Ojai to pay off those bonds over a period of 40 years.
1-AA-21-47 Casitas MWD acknowledged that the purpose of the CFD
is to finance acquisition of GSWs Golden States Ojai service area.
2-AA-409 see also 3-AA-524 Mello-Roos special taxes are secured by
liens on the parcels taxed just as ordinary property taxes are but they are
not subject to Proposition 13s limit on property taxes. The Mello-Roos
Act requires that before a CFD can be formed and issue bonds the forming
entity must do the following things among others
1. Describe the facilities to be bought or refurbished. Govt. Code
53321c.
2. State the maximum dollar amount of bonds to be issued and
state the method by which the new taxes will be allocated among
parcels to enable each property owner to calculate his or her
additional tax burden. Govt. Code 53321d.
3. Prepare a report estimating the fair and reasonable cost of the
facilities and incidental expenses to be financed. Govt. Code
53321.5.
4. Call a public election. Govt. Code 53326.
In January 2013 Casitas MWD adopted Resolution No. 13-08
a Resolution of Intention to Establish Community Facilities District
No. 2013-1 Ojai pursuant to the Mello-Roos Act. 2-AA-346-371
Then in March 2013 Casitas MWD passed three more pertinent
resolutions
6
Resolution No. 13-12 formally established the CFD listed the
Facilities to be acquired by it 3-AA-498 and authorized
the levy of a special tax against properties within the CFD.
3-AA-493-509
Resolution No. 13-13 declared the necessity to issue
$60 million in bonds to finance the costs of the Facilities.
3-AA-510-513
Resolution No. 13-14 called a special election on the question
of issuing $60 million in bonds and levying special taxes to
pay the bond debt.. 3-AA-514-519
Finally in April 2013 Casitas MWD passed Resolution No. 13-16
amending the ballot language that would be put before the voters at a
special election set for August 27 2013. 3-AA-520-524
The List of Authorized Facilities attached to both Resolution 13-8
and Resolution 13-12 is a key document in this case. Curiously it doesnt
list any Facilities at all but only costs that Casitas MWD wants to
finance by Mello-Roos bonds including
1. All costs incurred by the District to acquire the real
personal and intangible property and property rights
owned or held by the Golden State Water Company .Said costs shall include .. legal costs appraisal and expert
witness fees litigation expenses incurred with respect to any
eminent domain action .. the amount of just compensation
paid to Golden State Water including without limitation the
fair market value for the property taken severance damages
if any costs for loss of business goodwill if any relocation
expenses if any pre-condemnation damages interest
property taxes and litigation expenses payable to Golden
State Water and any other payments of any type or nature
whether paid pursuant to negotiated agreement settlement
judgment or other court order and if for whatever reason
7
any eminent domain action initiated by the District is
dismissed or abandoned including without limitation due
to a judicial determination that the District does not have the
legal right to take the Golden State Water property or due to
the District Boards determination that the amount of just
compensation awarded to Golden State Water exceeds the
amount the District can responsibly pay for Golden State
Waters property the damages payable to Golden State
Water pursuant to California Code of Civil Procedure
Sections 1268.510 and 1268.610 et seq.
2-AA-359 3-AA-498 emphasis added
In short the strategy is to fund eminent domain litigation -
litigation which may or. may not end up with Casitas MWD acquiring
anything. As the List concedes when eminent domain litigation ensues the
court could determine that Casitas MWD lacks the right to take Golden
States water system Code Civ. Proc. 1250.350 et seq. 1260.110
etseq.
or Casitas MWD might try to abandon the taking if it finds the
systems price as set by a jury is too high Code Civ. Proc. 1268.510.
But Casitas MWDs Resolutions authorize issuance of Mello-Roos bonds
and imposition of Mello-Roos special taxes to force Ojais property owners
to pay for all costs Casitas MWD incurs in its effort to take the water
system whether that effort succeeds or fails. 2-AA-359 3-AA-498
The List of Authorized Facilities is remarkable in its breadth and
in its glaring departures from the requirements of its authorizing statute
Govt. Code 53313.5. It seeks to use Mello-Roos bonds to finance
costs including damages - not just facilities. It seeks to useMello-Roosfunding to pay for personal property intangible property and
property rights including loss of business goodwill3 attorneys fees
3Under the Eminent Domain Law a condemnee like Golden State is
entitled to recover compensation for lost goodwill of an operating business.
Code Civ. Proc. 1263.510 et seq..
8
expert witness costs and other litigation expenses that Casitas MWD may
incur in the eminent domain action it intends to file including all litigation
expenses awarded to Golden State 4 and whatever damages may be paid to
Golden State if the ultimate eminent domain action is dismissed. Dismissal
could occur either because a court determines Casitas MWD lacks the right
to take Golden States property or because Casitas MWD decides that the
amount of just compensation is as phrased in the List of Authorized
Facilities more than Casitas MWD can responsibly pay.5 And in direct
contravention of the Act the List of Authorized Facilities does not even
describe any specific facilities that are proposed to be acquired.
If the condemnation effort fails Casitas MWDs scheme would
allow it to use the bond proceeds to pay for all the costs it incurred
including all costs and damages awarded to Golden State and to tax every
Ojai parcel to pay back those bonds with those Ojai taxpayers having
received literally nothing in return. If the condemnation effort succeeds
Casitas MWD intends to then use the same Ojai water system now owned
by Golden State to continue providing the same customers with the same
f water service that Golden State currently provides. 2-AA-3593-AA-4984 Under the Eminent Domain Law a condemnee is entitled to recover
its litigation expenses including attorneys fees and expert witness costs
when the eminent domain proceeding is dismissed Code Civ. Proc.
1268.610 1235.140 or when the court determines that Golden States
final demand was reasonable and Casitas MWDs final offer was
unreasonable Code Civ. Proc. 1250.410b.
5Under the Eminent Domain Law the entity prosecuting the
condemnation may seek to abandon the condemnation if it believes the
verdict is too high but the court can deny abandonment when the
condemnee has unalterably changed its position in reliance on the
condemnation. Code Civ. Proc. 1268.510.
9
Golden States Property Includes Facilities and Water Rights
Golden States Ojai water system is part real property part tangible
equipment part intangible property rights and many other things. Golden
States facilities include water wells water storage booster stations and
interconnections. 1-AA-2 The system has five different pressure
gradients. There are over 44 miles of water distribution mains. Its water
storage facilities consist of five reservoirs with total storage capacity of
1.49 million gallons. 1-AA-5-6 Water in the City of Ojai is supplied by
five company-owned wells which pump from the Ojai Valley Groundwater
Basin. Golden State holds a vested appropriative right to pump over 2000
acre-feet of water annually from the wells it owns overlying the Ojai Valley
Groundwater Basin. 1-AA-5-6 Golden State is not willing to sell its
facilities or its water rights. Golden State believes its Ojai water system
including its water rights potentially has a cumulative market value
exceeding $100 million under the valuation standards applicable to the
determination of just compensation in eminent domain. 1-AA-6
Casitas MWD intends to try to take it all and finance it all. with
Mello-Roos bonds and Mello-Roos special taxes. 2-AA-407-414 3593-AA-498The Challenge to the Validity of Casitas MWDs Plan
Golden State filed suit challenging the validity of Casitas MWDs
resolutions authorizing the use of Mello-Roos bonds to fund its takeover of
Golden State and the establishment of the CFD. 1-AA-1-47
10
This suit is a reverse validation action6 and it sought a writ of
mandate setting aside Casitas MWDs actions. Golden State sought
declarations of invalidity coupled with injunctions. 1-AA-1-47
The Trial Court Ruling
Golden States suit was filed in time for. the issues to be litigated
before the August 27 2013 election that Casitas MWD had set to approve
the formation of the CFD issuance of bonds and levying of taxes.
However the trial court delayed hearing the matter until after the election.
After 87% of the local electorate approved the plan this matter came on for
hearing in February 2014.
The trial court ruled in favor of Casitas MWD. 6-AA-1486-1502
In doing so it cited no cases. It focused largely if not wholly on the fact
that the election had gone in favor of Casitas MWDs takeover plan. Each
of the trial courts rationalizations is dealt with below and summarized
here
6Code Civ. Proc. 860 et seq. authorizes government agencies to file
suit to validate their actions. Courts have used those same statutes to
allow those who challenge government action to seek immediate
invalidation. The process is called a reverse validation action Katz v.
Campbell Union High School Dist. 2006 144 Cal.App.4th 1024 1028
although it is in reality an invalidation action. The Mello-Roos Act directs
that challenges to the validity of bonds or the levy of special taxes be
brought as a reverse validation proceeding. Govt. Code 53359.
7
Before this case was decided below some citizens of Ojai under the
rubric Ojai Friends of Locally Owned Water or Ojai FLOW joined the
action as defendants 6-AA-1338-1368. Three weeks before the hearing
on the merits of the case this group was certified as a class in a ruling
issued by the trial judge who had presided in the case from its inception6-AA-1465-1470this case was then reassigned to a different judge about a
week before the hearing on the merits that is the subject of this appeal.
11
When confronted with Casitas MWDs multiple concessions that
it was seeking to use its Mello-Roos funds to acquire
intangible property - in the teeth of Mello-Roos itself
declaring its use to be for the purchase of real or other tangible
property - the trial court responded that Mello Roos must
allow for the purchase of intangible property. 6-AA-1495
emphasis added The courts rationale was that the Act would
not otherwise fully cover this kind of acquisition. Id.
When presented with Mello-Rooss restriction of bond funding to
acquiring only facilities consisting of real or other tangible
property with a useful life of at least five years the trial court
responded that the Legislature had to assume the facilities
would include intangible assets to make the facility function
properly. 6-AA-1495
When responding to Golden States argument that a seizure of
property from an unwilling seller through an eminent domain
action is not a purchase as specified by the Mello-Roos Act
the trial court simply asserted that the payment of just
compensation in exchange for the acquisition of property is a
purchase notwithstanding that it does not involve a willing
seller. 6-AA-1495 As shown below however purchase and
eminent domain are not the same thing and have not legally
been treated as interchangeable by either the Legislature or by
the courts.
Addressing the attempt to use Mello-Roos to finance litigation
costs and damages of various kinds the trial court simply
12
concluded that they are allowed and that Mello-Roos clearly
contemplates the costs of anticipated litigation ...6-AA-1496This is not only unsupported by the Act it is circular.
Nothing in Mello-Roos provides that bonds to be paid for by
additions to property tax bills can be used for litigation
expenses.
The trial courts summary shows how far removed its ruling is from
the applicable law. The final paragraph of the courts order begins What
then is the appropriate response for the judiciary when the Legislature is
silent on the subject of Mello-Roos financing for eminent domain actions
6-AA-1496 The trial courts answer was that the will of the electorate
must control. 6-AA-1496 There are at least three reasons that
conclusion is wrong. First as the settled appellate decisions quoted below
plainly show where the statute concerns the power to tax or to use eminent
domain if the Legislature does not clearly and vocally grant those powers
then there is neither eminent domain nor taxing power. Second if
legislative silence reveals that essential things are missing in order to allow
the statute to cover the situation at hand the solution is to ask the
Legislature for change not to fill in the gaps by legislating form the bench.
Third to allow the will of the voters to control the legal issue is to abdicate
judicial review. The popularity of a ballot measure is no more controlling
here than it was when the validity of Proposition 8 was being reviewed.
The legal validity of legislation has been a subject of judicial review at least
since Marbury v. Madison 1803 5 U.S. 1 Cr. 137.
Declining to use its authority to thwart the actions of the Casitas
Municipal Water District 6-AA-1496-1497 the trial court denied
Golden States petition in all respects.
13
Judgment was entered 6-AA-1486-1502 and is final. This appeal
followed. 6-AA-1503-1504
QUESTIONS PRESENTED
Question 1 Can the Mello-Roos Act be used to finance acquisition
of intangible property and property rights
Question 2 Can the Mello-Roos Act be used to finance a proposed
taking of property by eminent domain
Question 3 Can the Mello-Roos Act be used by one service
provider to supplant another service provider providing the same service to
the same customers with the same facilities
If any one of these questions is answered in the negative reversal is
required.
STANDARD OF REVIEW
As this is an appeal of a judgment based on statutory construction
review is de novo. Farahani v. San Diego Community College Dist.
2009 175 Cal.App.4th 1486 1491.
A trial courts resolution of the meaning of a statute is a pure
question of law. Camarillo v. Vaage 2003 105 Cal.App.4th 552 560
citing People ex rel. Lockyer v. Shamrock Foods Co. 2000 24 Cal.4th 415
432.
14
LEGAL ARGUMENT
I.
THE MELLO-ROOS ACT CANNOT BE USED TO FINANCE
PURCHASE OF INTANGIBLE PROPERTY OR PROPERTYRIGHTS
Casitas MWD is trying to stuff the square peg of its planned
forcible water system takeover into the round hole of a financing system
that was designed to allow subdividers to build and pay off the substantial
infrastructure elements attendant to large-scale new developments. As will
be seen many of the problems that the trial court encountered in trying to
rule in accord with Casitas MWDs plan stem from the fact thatMello-Roosis simply the wrong tool for the job.
A. The Purpose and Requirements of the Mello-Roos Act
In 1978 California voters passed Proposition 13 which amended the
California Constitution to limit the nominal property tax rate to 1 % of
assessed valuation. Cal. Const. art. XIII A 1 subd. a. Before that
property taxes were a major source of financing for expanding local
infrastructure and services.
The post-Proposition 13 world presented a particular problem for
new developments which by their nature required significant infrastructure
investments roads libraries schools sewers parks and the like. These
used to be funded through property taxes. Mello-Roos is generally
acknowledged to have been the Legislatures response to Proposition 13
which restricted the ability of municipalities to rely on property taxes to
finance improvements. William Fulton How We Pay For Growth
http//www.planetizen.conVnode/91 2Q03 Mello-Roos taxes were
invented specifically to circumvent Proposition 13 .... The Act was
designed to facilitate new development by allowing developers and local
15
agencies to cooperate in the formation of special districts called
Community Facilities Districts or CFDs that could levy special property
taxes to be assessed against the properties that would benefit from the
facilities or services to be provided - generally the owners of the new
homes being developed. Mello-Roos then enables the municipal entity in
charge of the area to float bonds to cover the cost of those improvements
with the bond costs being added to the tax bills of the eventual residents of
the new development. As explained in a recent decision
The Mello-Roos Act Gov. Code 53311 et seq. was
promulgated to provide an alternative for financing public
facilities in developing areas. Any local agency mayestablish a CFD to provide for and finance the cost of eligible
public facilities. Subject to approval of a 2/3 vote of the
electorate in the CFD a local agency may issue bonds for the
CFD and may levy and collect a special tax within the CFD to
pay the bonds. The tax is levied against the real property
within the CFDs geographic boundaries. Citation. ...
The Mello-Roos Act was enacted for the express purpose of
providing an alternative method of financing certain public
capital facilities and services especially in developing areas
and areas undergoing rehabilitation.. Citation. Azusa
Land Partners v. Dept. of Indus. Relations 2010 191
Cal.App.4th 1 18.
The Mello-Roos Act is an important feature of the local
fiscal landscape providing local officials with a key tool for
accumulating the public capital needed to pay for the public
works projects that make new residential development
possible. Since 1985 CFDs have issued over $18 billion in
long-term bonds having issued 51% of all Mello-Roos bonds
between 1992 and 2002. Id. at 24 fn. 12.
A standard California real estate treatise confirms that Mello-Roos
funds are used to finance the provision of certain services like fire police
and recreation programs and the purchase construction expansion
improvement or rehabilitation of tangible property with a useful life of five
16
years or more. 9 Miller Starr Cal. Real Estate 3d ed. 2007 2543
pp. 25-180-25-181.
The Mello-Roos Act contains detailed provisions which must be
followed in order to form a CFD. A Resolution of Intention to form the
CFD must be adopted. Govt. Code 53321. The Resolution of Intention
must describe the facilities and services proposed to be financed by the
CFD so the taxpayer can understand what the funds of the district may be
used to finance. Govt. Code 53321c. It must also provide details
regarding the proposed special tax so that each taxpayer can determine the
maximum amount they may have to pay. Govt. Code 53321d. The
local entity must also prepare a report containing a description of the public
facilities and an estimate of the fair and reasonable cost of the facilities
and incidental expenses to be financed. Govt. Code 53321.5.
The local entity must hold a properly noticed public hearing on the
Resolution of Intention. Govt. Code 53322. if it decides to proceed it
must adopt a Resolution of Formation to formally create the CFD which
must again identify the facilities or services proposed to be funded with any
special tax. Govt. Code 53325.1. If the local entity determines that it
will be necessary to incur bonded indebtedness it must adopt a resolution
saying so including the purpose for which the debt is to be incurred.
Govt. Code 53345b. The local entity must then submit the levy of any
special taxes and the issuance of bonded indebtedness to the voters. Govt.
Code 53326 53353.5. A two-thirds vote is required to approve the
issuance of bonds. Govt. Code 53355.
The statutory procedures are designed to inform the taxpayers
exactly what they are being asked to pay for and how much it may cost
them. The Mello-Roos Act also provides assurances that the taxpayers will
17
end up with a tangible asset or the provision of new services so they are
sure to receive something of value in exchange for added special taxes
secure by liens against their properties.
B. Mello-Roos Funding Can Only Be Used to Finance the Purchase
of Certain Specified Facilities or Services
The sole authority on which Casitas MWD relies for the power to
implement its plan is Govt. Code 53313.5. This section says aMello-RoosCFD may finance
The purchase construction expansion improvement or
rehabilitation of any real or other tangible property with an
estimated useful life of five years or longer ..
Thus the Mello-Roos Act does not grant the power to useMello-Roosbond funding to finance anything and everything that the
governmental entity which formed it has the power to accomplish. Instead
the Act empowers an entity to create a CFD only to finance certain defined
governmental services specified in the services section of the Act Govt.
Code 53313 and to finance the purchase or construction of certain
real or other tangible property with a useful life of five years or longer
specified in the facilities section of the Act Govt. Code 53313.5.
For example the fact that Casitas MWD can itself lease property or
purchase intangible property e.g. a license or purchase short-lived
property e.g. pencils does not mean those things can be financed by a
Mello-Roos CFD. Such acquisitions are not authorized to be financed by
53313.5 because a lease is not a purchase a license is not real or other
tangible property and a pencils useful life is not five years or longer.
Mello-Roos thus does not authorize Casitas MWD to form a CFD
that would issue Mello-Roos bonds and levy Mello-Roos taxes in order to
18
lease property buy licenses or buy pencils. Casitas MWD has the legal
authority to buy pencils but not to use Mello-Roos funding to pay for them.
C. A CFDs Power of Taxation is Strictly Construed
The law requires that the Mello-Roos Acts basic grant of taxing
power to a CFD must be strictly construed. Like an assessment district a
CFD is a mere taxing district not a separate municipal entity. In Mulville
v. City of San Diego 1920 183 Cal. 734 the Supreme Court invalidated a
bond measure by an assessment district because it was attempting to
finance works not allowed by the terms of the Assessment District Act of
1915 explaining
A liberal construction does not mean enlargement of the
plain provisions of the law. Citation. It is clear that the
words public improvement work and public utility as
used in the statute do not refer to intangible benefits to be
derived from a public work but they obviously designate a
material structure which is to be constructed or acquired.
Id. at 739 emphasis original.
Our conviction of the correctness of the above
construction is reinforced by the fact that we are not dealing
with a municipality or quasi-public corporation for the
municipal improvement district authorized by the statute is
nothing more than a taxing district within a municipality. The
power of a municipality to form such a district arises solely
from legislative grant. This grant being a delegation to
municipalities of control over local assessment proceedings
must be closely construed for it is well settled that the
power of special taxation is restricted to and can extend
no further than the plain language of the legislative
enactment upon which it is based. Id. at 740 boldface
added.
Casitas MWDs CFD is nothing more than a taxing district formed
by a municipal corporation. Mullville is still the law and it requires close
19
construction of the Mello-Roos Acts grant of authority to levy special
taxes for the repayment of bonded indebtedness.
This rule is especially important in reviewing the propriety ofMello-Roosfinancing because Mello-Roos special taxes are enforced by liens on
peoples homes and can range up to a third of the total value of the
properties to be taxed. Govt. Code 53345.8a.
The power to tax is a serious grant of an awesome governmental
power that must be carefully confined.8
D. Casitas. MWD Violated the Mello-Roos Act by Authorizing the
CFD to Finance Acquisition of Intangibles
Mello-Roos repeatedly requires the local entity forming a CFD to
describe the public facilities or services proposed to be financed. Govt.
Code 53321c 53321.5 53325.1a2. As noted Casitas MWD
prepared a List of Authorized Facilities that it attached to both its
Resolution of Intention 2-AA-359 and its Resolution of Formation3-AA-498pursuant to these statutory directives. In these documents
Casitas MWD expressly authorizes its CFD to purchase intangible
property - in direct contravention of the Act.
The List of Authorized Facilities is quoted at pp. 7-.8 above. The
List states that Casitas MWD will finance the acquisition of the real
personal and intangible property and property rights owned or held by
the Golden State Water Company. 2-AA-359 3-AA-498 emphasis
8 Mr. Chief Justice Marshall is credited with the statement that the
power to tax is the power to destroy to which Mr. Justice Holmes replied
The power to tax is not the power to destroy while this Court sits.
Panhandle Oil Co. v. Knox 277 U.S. 218 223 1928 dissenting
opinion. National Cable Television Assn. Inc. v. United States 1974415 U.S. 336 341 fn. 4.
20
added The List goes on to cite examples of the types of items to be
financeable by this CFD - including compensation for loss of business
goodwill.
But Govt. Code 53313.5 only allows such a CFD to finance the
purchase construction expansion improvement or rehabilitation of any
real or other tangible property with an estimated useful life of five
years or longer. Emphasis added.
Casitas MWD has blatantly violated the statute. Financing of
intangible property and property rights is plainly prohibited by 53313.5.
Casitas MWD either ignored the statute or decided it would take the risk
that this deficiency would go unnoticed as it obviously understands that in
an eminent domain lawsuit there may be large awards for taking or
damaging of intangible property rights e.g. for taking of Golden States
water rights and for taking of Golden States business goodwill.
Water rights are property under California law State v. Superior
Court 2000 78 Cal.App.4th 1019 1025 as is business goodwill Civil
Code 654 655. However both water rights and business goodwill are
intangible property which is defined as property that is a right rather
than a physical object. Preston v. State Bd. of Equalization 2001 25
Cal.4th 197 208. Thus neither the taking of water rights or business
goodwill amount to taking of physical objects and they therefore cannot be
financed by a CFD under the Mello-Roos Act.9
9Casitas MWDs General Managers report disputes that Golden
State has water rights 2-AA-407-414 but demonstrates that Casitas
MWD intends to take those rights if they do exist and to pay for them with
Mello-Roos financing.
21
When the words of a statute are clear there is no need to look further
to discern their meaning. Even the most elementary of texts bears this out
e.g. 58 Cal.Jur.3d 2012 Statutes 111 and the case law confirms the
black-letter rule e.g. In re D.B. 2014 58 Cal.4th 941 944 When a law
is unambiguous we must conclude the Legislature meant what it said even
if the outcome strikes us as unwise or disagreeable.. The enabling
statute of Mello-Roos could hardly be more clear. It authorizes financing
of purchase of real or other tangible property with an estimated useful life
of five years or longer ... Govt. Code 53313.5. Period.
Rather than applying the law as written the trial court expressed the
belief that it just doesnt make sense to prohibit a Mello-Roos CFD from
financing the acquisition of intangible property. Thus it wrote
In order to effectuate the purchase of public works facilities
Mello-Roos must. allow for the purchase of intangible
property. 6-AA-1495
Were Golden State correct on their argument Casitas would
have to fund the acquisition of the intangible portions of
Golden States water system through another source of
funding. Such a result would be extraordinarily inefficient
and without any real purpose. 6-AA-1495
T.he Legislature had to assume that the physical facilities
would include the purchase of the various intangible assets
that are critical to the operation of the facility targeted for
purchase. 6-AA-1495
The trial court obviously believed that the Legislature didnt get it
right when it limited a CFDs ability to finance the acquisition of property
to only real or other tangible property with an estimated useful life of five
years or longer. But the judiciarys job is to apply the statutes as written
22
and leave it to the Legislature to fix the problem if a fix is seen as needed.
That is long-settled. law as this court has repeatedly held. E.g. Schneider
v. California Coastal Commn. 2006 140 Cal.App.4th 1339 1345 People
v. Buena Vista Mines.Inc. 1996 48 Cal.App.4th 1030 1034.
In Schneider for example the Coastal Commission sought a
construction of the Coastal Act that would have added two words to the
Legislatures craftsmanship to substantially expand the Commissions
jurisdiction. As this Court put it in denying that statutory construction
The Coastal Commission and the Attorney Generals
construction of the section adds the words and from
between the italicized words along and the. The statute
would thus read .. protect views to and along and from
the ocean ... This expansive reading of the statute
stretches the fabric too thin. The courts are loath to
construe a statute which has the effect of adding language to
a statute. Citation. Courts may add language to a statute in
extreme cases where they are convinced the Legislature
inadvertently failed to. utilize the words which would give
purpose to its pronouncements. Citation. In our view this
is not such a case. Schneider 140 Cal.App.4th at 1345
bold emphasis added.
This is not such a case either.
Indeed our Supreme Court expressed some sympathy with the view
that an environmental protection statute apparently failed to cover a
problem. Its conclusion however was that the job of the judiciary was not
to sit in review of the Legislatures wisdom in drafting statutes as it did
and if there was a problem it was for the Legislature to fix. Napa Valley
Wine Train Inc. v. Pub. Util. Com. 1990 50 Cal.3d 370 376. The
denouement of the Napa Valley issue is that the Legislature did re-examine
the issue and did changethe law. See Pub. Res. Code 21080.04 intent
of the Legislature in enacting this section .. to abrogate the decision of the
23
California Supreme Court .. in Napa Valley Wine Train citation. That
was an illustration of each branch doing its own job. Here the trial courts
job was merely to apply the law not to re-write it.
Golden State believes that the Mello-Roos Act is clear about what it
covers and what it does not. That it appeared to the trial court not quite
sufficient to cover Casitas MWDs scheme here does not mean the statute
was deficient. But even if the statute were deficient the place to resolve
that matter would be in the Legislature not by a judicial re-write.
This issue is dispositive. The Resolutions that formed the CFD are
invalid because they authorize using Mello-Roos funds to pay for things
Mello-Roos funds cannot lawfully be used pay for.
H.
THE MELLO-ROOS ACT CANNOT BE USED TO FINANCE ATAKING OF PROPERTY BY EMINENT DOMAIN
No appellate case has considered the propriety of using theMello-Roosfunding mechanism to finance an eminent domain lawsuit. Nor is
there any case that indicates even in passing that the Mello-Roos Act was
ever used to finance a taking by eminent domain.10
10
Indeed a search of both the Westlaw and Lexis databases seeking
any California cases including both the term eminent domain and the
term Mello-Roos turns up only one appellate case .reporte or
unreported. That one case was not reported and merely noted that in the
course of an eminent domain valuation an appraiser had considered the
amount of Mello-Roos debt on the property in appraising its value. The
case had nothing to do with using Mello-Roos to finance a condemnation.
The Mello-Roos Act has existed for more than three decades. IfMello-Roosallowed financing of eminent domain surely some appellate case
would have surfaced.
24
In that vacuum of case law the trial court proceeded thus It is
without dispute that Casitas is authorized by the Water Code to exercise the
power of eminent domain. 6-AA-1496 That is true Water Code
71693 but irrelevant. Having eminent domain powers does not mean
Casitas MWD has the power to use a Mello-Roos CFD to finance any
eminent domain activity. As discussed above a Mello-Roos CFD cannot
be used to finance anything and everything that a governmental entity
would like to spend money on. It can only be used to finance certain
specified services Govt. Code 53313 or the purchase construction
expansion improvement or rehabilitation of real or tangible property
Govt. Code 53313.5. Thus although Casitas MWD has legal authority
buy pencils it has no authority to use Mello-Roos funding to pay for
pencils. So also an eminent domain lawsuit.
Whether the Eminent Domain Law permits Casitas MWD to use its
eminent domain power to condemn Golden States water system is also
another issue but an issue for another day it will be litigated when and if
Casitas MWD files an eminent domain proceeding. The present case
involves only the question of whether the Mello-Roos Act authorizes
Casitas MWD to establish a CFD to finance a taking of Golden States
water system using Mello-Roos bonds and special taxes to pay for the
Casitas MWDs right to take Golden States water service system
will be seriously contested in any subsequent eminent domain case and
Golden State may prevail in preventing the taking. Because Golden State
though privately owned is a public utility Casitas MWD will not be
entitled to the usual presumption that there is a public necessity for
condemning Golden States property. Code Civ. Proc. 1240.650c.
Given that Casitas MWD plans to own and operate the water system
exactly as Golden State is already doing it is hard to imagine how Casitas
MWD could.prove that there is any public necessity for seizing Golden
States system.
25
eminent domain litigation itself as well as all of the potential outcomes of
that litigation.
A. A Forced Acquisition by Eminent Domain Is Not a Purchase
The Mello-Roos Act provides a mechanism to finance the
purchase of real or tangible property.12 Govt. Code 53313.5. An
acquisition by eminent domain is not a purchase within the meaning of
the Mello-Roos Act.
The Legislature is well aware that legally speaking purchase and
eminent domain are not the same thing. Eminent domain is the sovereign
power to forcibly seize private property for public use upon the payment of
just compensation. Cal. Const. art I 19 Code Civ. Proc. 1230.010
et seq. As shown below a taking by eminent domain is not a purchase
within the meaning of the Eminent Domain Law the Public Utilities Code
the Water Code the Streets and Highways Code the Education Code or
the Commercial Code. It cannot be inferred that the Legislature intended
the word purchase in the Mello-Roos Act to encompass acquisition by
eminent domain.
The Legislature has made clear that it knows the differences among
the different words of acquisition and that the words chosen for a particular
statute have real-world meaning. Many California statutes empower
entities to acquire property either by purchase or by eminent domain or by
something else. If the term purchase necessarily included acquisitions by
eminent domain as urged by Casitas MWD and held by the court below
12It also provides a mechanism to finance the construction
expansion improvement or rehabilitation of any real or other tangible
property. Govt. Code 53313.5 But these additional terms are far afield
from eminent domain. The eminent domain issue is focused on the term
purchase.
26
there would have been no need for the Legislature to specifically add
eminent domain to the enumerated list of acquisition methods authorized in
statutes. But California statutes routinely list by purchase or by eminent
domain in the disjunctive as two different ways to acquire property. See
e.g. all emphasis added
Govt. Code 53382 Community Rehabilitation Districts
authorized to acquire property by grant purchase. gift devise
lease or eminent domain
Govt. Code 93020c North Coast Railroad Authority
authorized to acquire property by purchase lease gift or
through exercise of the power of eminent domain
Pub. Util. Code 3341.1a California Consumer Power and
Conservation Financing Authority may acquire any enterprise
by gift purchase or eminent domain
Streets Hwys. Code 11101.5 Pedestrian Mall Law of 1960
legislative body may acquire property by gift purchase eminent
domain or otherwise
Streets Hwys. Code 30400 California Toll Bridge Authority
may acquire property by gift purchase or eminent domain
proceedings
Streets Hwys. Code 35108j Parking District may acquire
property by gift purchase or eminent domain
Water Code 11575 Department of Water Resources may
acquire property by gift exchange purchase or eminent domain
proceedings
Water Code 55370 County Waterworks District may acquire
property by purchase gift devise exchange descent and
eminent domain
Educ. Code 1793 County Board of Education may acquire
property by purchase gift conditional or otherwise or by the
exercise of the power of eminent domain.
The Eminent Domain Law itself makes the distinction between a
purchase and a taking by eminent domain Whether property necessary
for public use is to be acquired by purchase or other means or by eminent
27
domain is a decision left to the discretion of the person authorized to
acquire the-property. Code Civ. Proc. 1230.030 emphasis added.
Similarly any public entity authorized to acquire property for a particular
use by eminent domain may also acquire such property for such use by
grant purchase lease gift devise contract or other means. Code Civ.
Proc. 1240.130. Thus while the power to compel an eminent domain
sale includes the ability to purchase the property from a willing seller the
converse is not true a grant of the power to purchase certain property does
not include the power to seize it through eminent domain.
On a more general level the Legislature has demonstrated its
understanding that purchase means a voluntary transaction and not one
under the compulsion of eminent domain by defining the term purchase
as meaning sale lease discount negotiation mortgage pledge lien
security interest issue or reissue gift or any other voluntary transaction
creating an interest in property. Cal. U. Com. Code 1201b29
emphasis added.
In sum a taking is not a purchase. The Legislature knows the
difference.
B. The Legislature Considered - and Reiected - Eminent
Domain in the Mello-Roos Act
The original version of the bill that eventually evolved into the
Mello-Roos Act would have authorized use.of bond funding for acquisition
of property by gift purchase or eminent domain
2 Any real property rights-of-way easements or interests
in real property acquired or to be acquired by gifts purchase
or eminent domain and which are necessary or convenient in
connection with the construction or operation of any facility.
3-AA-532 543 emphasis added.
28
But that bill did not become law. As finally enacted Mello-Roos
authorizes the issuance -of bonds only to finance the purchase
construction expansion improvement or rehabilitation of real or tangible
property. Govt. Code 53313.5 emphasis added. Thus Mello-Roos
authorizes the financing of a purchase while no mention is made of
acquisition by eminent domain.13
C. The Power of Eminent Domain is Strictly Construed Neyer
Implied
The trial court viewed the absence of the term eminent domain in
this way
There is no question that Mello-Roos does not
include the term eminent domain. As a consequence the
Government Code does not expressly authorize theMello-Roosprocedures to be used to fund eminent domain actions.
The absence of a reference to eminent domain in theMello-RoosCommunity Facilities Act cuts both ways. The corollary
f is also true. The Government code does not specifically
preclude Casitas from using the Mello-Roos procedures.6-AA-1496emphasis added.
With respect it is settled law that an omission to mention eminent
domain power does not cut both ways. On the contrary it means there is
no such power. That is well settled law because of the courts general
concerns about potential abuse of such a disruptive power.
13That eminent domain was not overlooked by the Legislature can
be seen in Govt. Code 53317.5 another part of Mello-Roos. That section
provides that when property subject to a lien under the Act is taken by
eminent domain the lien for the Mello-Roos taxes is to be apportioned as
stated in the Eminent Domain Law Code Civ. Proc. 1265.250. This
shows that when the Legislature wanted to reference eminent domain in the
Mello-Roos Act it knew how to do so. It could have included acquisition
by eminent domain in the enabling statute Govt. Code 53313.5 but did
not do so.
29
Although acknowledging the necessity of eminent domain to allow
government to acquire property for necessary public projects the law has
always harbored suspicions about eminent domain and its impact on
individual property owners. That is why the delegation of the power from
the State which possesses eminent domain authority as an integral part of
its sovereignty to municipalities which have no such inherent power has
been judicially called the States most awesome grant of power to local
government. City of Oakland v. Oakland Raiders 1985 174 Cal.App.3d
414 419. The power is awesome because it permits government to
make radical and unilateral changes in the relationship between government
and selected members of the governed. A recent decision built on concerns
expressed generations ago and explained the need for circumspect
application of eminent domain statutes
A grant of the power of eminent domain which is one of the
attributes of sovereignty most fraught with the possibility of
abuse and injustice will never pass by implication and when
the power is granted the extent to which it may be exercised
is limited to the express terms or clear implication of the
statute in which the grant is contained. Kenneth Mebane
Ranches v. Superior Court 1992 10 Cal.App.4th 276 286
quoting with approval from City of Los Angeles v. Koyer
1920 48 Cal.App. 720 725 emphasis added.
That concern has led to the development of essential ground rules
underlying municipal use of eminent domain
A municipal corporation - like Casitas MWD - has no
inherent power of eminent domain and can exercise it only
when expressly authorized by law. City of Oakland v.
Oakland Raiders 1982 32 Cal.3d 60 64 emphasis added.
If the power is not expressly authorized it does not exist.
Id.
Statutory language defining eminent domain powers is
strictly construed and any reasonable doubt concerning the
30
existence of the power is resolved against the entity.
Kenneth Mebane Ranches 10 Ca1.App.4th at 282-283
emphasis added.
The power of eminent domain is denied where there is
any fair reasonable doubt concerning its existence.
Harden v. Superior Court 1955.44 Cal.2d 630 641
emphasis added.
Thus the power of eminent domain has not been granted to
be exercised as any municipal entity sees fit. It is
circumscribed by both constitutional strictures U.S. Const.
5th Amend. Cal. Const. art. I 19 and statutory strictures
Govt. Code 7267 et seq..
Thus where eminent domain is involved narrow construction is the
rule.14
The Supreme Court emphasized the point in Harden v. Superior
Court supra 44 Cal.2d 630. The Court was called upon to decide whether
a statute authorizing the city to purchase lease or receive property
outside its boundaries thereby included the power to -take property outside
its boundaries by eminent domain. The Harden Court focused on the word
purchase applied the rule of strict construction vis-a-vis a grant of
eminent domain power and held that if we are to follow the rule of strict
construction .. we cannot say that the word purchase expressly
authorizes the city to take private property for off-street parking outside
its boundaries by eminent domain proceedings. Id. at 642 emphasis
added The Harden decision held that the power to take property by
eminent domain was not conferred by a statute that allowed the purchase
14Which is why the eminent domain power needs to be explicit. Note
for example the detailed statutes that circumscribe Casitas MWDs own
power to use eminent domain. Water Code 71693 71694.
31
of property. Its analysis disposes of Casitas MWDs effort to stretch the
Mello-Roos Acts use of the word purchase.
The court below erred in concluding that the payment of just
compensation in exchange for the acquisition of property pursuant to a
judgment in an eminent domain action is a purchase. 6-AA-1495 The
trial court got the wrong answer because it did not use the right rule of
statutory construction.
In addition the Legislatures failure to enact the original version of
what became the Mello-Roos Act which contained an explicit
authorization to finance acquisition by eminent domain and its later
enactment of a different bill that contains no such authorization deserves to
be given its due weight. A decision not to enact a statute either in whole or
in part is powerful evidence of the Legislatures intent. The courts have
repeatedly so noted. Here is a sampling
The fact that the Legislature chose to omit a provision
from the final version of a statute which was included in
an earlier version constitutes strong evidence that the act
as adopted should not be construed to incorporate the
original provision. Central Delta Water Agency v. State
Water Resources Control Bd. 1993 17 Cal.App.4th 621
634 emphasis added.
The rejection of a specific provision contained in an act
as originally introduced is most persuasive that the act
should not be interpreted to include what was left out.
Murphy v. Kenneth Cole Productions Inc. 200740 Cal.4th 1094 1107 quoting Wilson v. City of Laguna
Beach 1992 6 Cal.App.4th 543 555.
As a general principle the Legislatures rejection of
specific language constitutes persuasive evidence a statute
should not be interpreted to include the omitted language.
Doe v. Saenz 2006 140 Cal.App.4th 960 985.
32
The Mello-Roos Act does not authorize the use of Mello-Roos
financing for the purpose of acquiring property by eminent domain.
D. Mello-Roos Does Not Permit the Financing of a Lawsuit
An eminent domain proceeding requires the filing of a complaint by
the government against the owner whose property is to be condemned.
Code Civ. Proc. 1250.110 1250.210 1250.220.
In its effort to use Mello-Roos bonds to pay for every potential cost
or liability that might possibly result from its eminent domain lawsuit
Casitas MWD promulgated a List of Authorized Facilities to be financed
with bonds that reads like a general release of liability
1. Said costs shall include .. legal costs appraisal and
expert witness fees litigation expenses incurred with respect
to any eminent domain action .. the amount of just
compensation paid to Golden State Water including without
limitation the fair market value for the property taken
severance damages if any pre-condemnation damages
interest property taxes and litigation expenses payable to
Golden State Water and any other payments of any type or
nature whether paid pursuant to negotiated agreement
settlement judgment or other court order and if for
whatever reason any eminent domain action initiated by the
District is dismissed or abandoned including without
limitation due to a judicial determination that the District does
not have the legal right to take the Golden State Water
property or due to the District Boards determination that the
amount of just compensation awarded to Golden State Water
exceeds the amount the District can responsibly pay for
Golden State Waters property the damages payable to
Golden State Water pursuant to California Code of Civil
Procedure Sections 1268.5 10 and 1268.610 et seq.2-AA-3593-AA-498 emphasis added.
It is apparent that Casitas MWD has attempted to take a statute
designed to finance the acquisition of hard assets and use it to finance
33
major litigation including whatever kinds of damage awards and costs
might result.
In ruling in favor of Casitas MWD the trial court relied on
provisions for incidental expenses. With respect the court expanded
those provisions beyond recognition.
First the court relied on this general provision
The amount of the proposed bond indebtedness may include
all costs and estimated costs incidental to or connected with
the accomplishment of the purpose for which the proposed
debt is to be incurred including .. legal fees. Govt. Code
53345.3
Second the court extrapolated that by moving to the definition of
incidental
The costs associated with the creation of the district
issuance of bonds determination of the amount of taxes
collection of taxes payment of taxes or costs otherwise
incurred in order to carry out the authorized purposes of the
district. Govt. Code 53317e2.
Before going further it is important to recognize that the trial court
quoted only one-third of the definition of incidental expense from the
statute. The entire definition helps to demonstrate that it was not intended
to cover litigation costs
e Incidental expense includes all of the following
1 The cost of planning and designing public facilities to
be financed pursuant to this chapter including the cost of
environmental evaluations of those facilities.
2 The costs associated with the creation of the district
issuance of bonds determination of the amount of taxes
collection of taxes payment of taxes or costs otherwise
incurred in order to carry out the authorized purposes of the
district.
34
3 Any other expenses incidental to the construction
completion and inspection of the authorized work. Govt.
Code 53317 emphasis added.
When viewed in its entirety and in context it is apparent that the
kind of incidental expenses the Legislature had in mind were those
related to planning building and organizing. Nothing in the definitional
section mentions the cost of any kind of litigation.
The trial court simply leapt without analysis to the conclusion that
this definition clearly contemplates the costs of anticipated litigation
associated with the acquisition of property required for a CFD.6-AA-1496There is no explanation of where or how or why this was
contemplated by the Legislature at all let alone clearly so.
That the Legislature did not contemplate an expansive reading of
incidental seems clear from the Act itself which defines cost as
follows
Cost means the expense of constructing or purchasing the
public facility and of related land right-of-way easements
including incidental expenses and the cost of providing
authorized services including incidental expenses. Govt.
Code 53317c emphasis added.
Beyond the words of the statute the Legislature would have been
aware that the legal fees incidental to preparing the paperwork for a.
voluntary purchase of property are miniscule in comparison to the costs of a
significant litigation.
The trial courts result is self-fulfilling. It depends on making the
assumption that the authorized purpose of the district was to engage in
protracted litigation to acquire facilities. Only in that fashion could
substantial legal fees be in the contemplation of this statute. But that
35
assumes the answer to the question that was before the court i.e. whether
using Mello-Roos to finance eminent domain litigation was authorized by
the Mello-Roos Act. It was not as evidenced by the Acts plain language.
E. Mello-Roos Does Not Allow Taxpayers to be Saddled With Tax
Liens Yet Receive Nothing In Return
There is yet another independently sufficient reason why aMello-RoosCFD cannot be used to finance an eminent domain taking and that is
because attempts to take property by eminent domain sometimes fail. Any
eminent domain case can end with no property being acquired at all. The
eminent domain action Casitas MWD contemplates is a speculative
adventure with an especially uncertain outcome. Thats yet another reason
why the Mello-Roos Act by its terms is inconsistent with financing a
prospective taking.
The primary items that are financeable under the Act are property or
services either under section 53313 or 53313.5. In either case the taxpayer
actually ends up with some identifiable service or property - not just
expenses incurred in the unsuccessful pursuit of them.
A municipal entitys plan to use eminent domain doesnt guarantee
that it will end up with anything. The trial court may rule that the
condemnor has no right to take the property it wants to acquire. Code Civ.
Proc. 1250.350 et seq. 1260.110 et seq. Or the jury may determine that
the compensation owed for the taking is more than Casitas MWD wants to
pay and Casitas MWD may then seek to invoke statutory abandonment of
its eminent domain proceeding. Code Civ. Proc. 1268.510. In either
case the taxpayers would have financed nothing but unsuccessful litigation
and at the end of the day would have special tax liens on their properties
with neither services nor facilities to show for it.
36
Casitas MWDs scheme openly seeks to finance these potential
empty outcomes. Its List of Authorized Facilities calls them out and
seeks to saddle the taxpayers with paying 1 Casitas MWDs legal fees
incurred in pursuing eminent domain regardless of whether it is successful
2 Golden States attorneys fees and expert witness costs incurred if the
case is dismissed because the court finds that Casitas MWD lacks the right
to take Golden States property or 3 the damages that may be awarded to
Golden State if the jury returns a verdict that Casitas MWD decides is too
large so it seeks to abandon. 2-AA-359 3-AA-498 Casitas MWDs
List of Authorized Facilities cites the Eminent Domain Law statutes that
create these liabilities. See Code Civ. Proc. 1268.610 payment of
property owners litigation expenses when right to take denied 1268.620
payment of property owners damages after abandonment.
Thus Casitas MWDs plan was for Casitas MWD never to be at risk
financially. Instead the Ojai taxpayers would be on the hook for either the
jurys verdict setting the price of the Golden State property or if the
condemnation is rejected by the court for all costs and damages arising
from a failed eminent domain proceeding. Mello-Roos doesnt allow the
financing of such a municipal misadventure or miscalculation which ends
up with the taxpayers getting no property and no services.
In contrast to a legitimate Mello-Roos purchase where the tax
payments are in exchange for tangible property or specified services the
Ojai taxpayers could find themselves paying these improper Mello-Roos
taxes for decades to come and with nothing to show for it.
That is manifestly inconsistent with what the Legislature intended
the Mello-Roos Act to accomplish. The Act was worded carefully to
prevent an entity from issuing Mello-Roos bonds unless hard assets were
37
received in exchange to make sure that the homeowners could not be
saddled with debt unless they received something tangible and valuable in
return. Therefore Mello-Roos bonds cannot be used to prospectively fund
an attempt to take property through eminent domain.
F. Liberal Construction Cannot Be Used to Rewrite Mello-Roos
The trial court asked-What then is the appropriate response for the
judiciary when the Legislature is silent on the subject of Mello-Roos
financing for eminent domain actions 6-AA-1496 The appropriate
response for the judiciary is not to try to fill in the blanks or simply defer
to the voters as the trial court did but to adjudicate as the statutes are
written.
Casitas MWD invited the court to rely on a Mello-Roos provision
calling for liberal construction of its provisions in order to effectuate its
purposes. Govt. Code 53315. But the courts have often held that
liberal construction is not a license to legislate. Dept. ofMotor Vehicles
v. Industrial Accident Comm. 1948 83 Cal.App.2d 671 677 Liberality
of interpretation cannot go the length of accomplishing an end not within
the terms of the statute however desirable such a result might be in the
view of .. the court. Richardson v. City of San Diego 1961 193
Cal.App.2d 648 650 notwithstanding liberal construction a court may
not rewrite the statute nor insert words in a statute under the guise of
interpretation nor enlarge the plain provisions of a law..
Moreover the liberal construction provision is designed only to
effectuate the Acts purposes under sections 53313 and 53313.5. Those
sections have been discussed at length above. The purpose of the Act is to
allow for financing of essential services and acquisition/construction of
tangible property only and not to finance all costs involved in complex
38
lengthy and potentially fruitless eminent domain litigation. And every
eminent domain case is potentially fruitless if only because the verdict is
not within the condemnors control. The jury could always return a verdict
so high that the condemnor is unable or unwilling to pay it.
III.
THE MELLO-ROOS ACT CANNOT BE USEDBY ONE SERVICE PROVIDER TO SUPPLANT ANOTHER
Although it may be used to finance the provision of some services
Mello-Roos cannot be used simply to replace one service provider with
another where no additional services are provided
A community facilities district tax approved by vote of the
landowners of the district may only finance the services
authorized in this section to the extent that they are in
addition to those provided in the territory of the district
before the district was created. The additional services shall
not supplant services already available within that territory
when the district was created. Govt. Code 53313
emphasis added.
In April 2013 Casitas MWD passed Resolution 13-16 specifying the
question to be presented to the voters in the August 2013 special election
including whether the new CFD should be permitted to issue up to
$60 million in Mello-Roos bonds to finance acquisition of Golden States
service area and/or construction of improvements benefitting the CFD..
3-AA-524 No plan for construction of improvements was proposed by
Casitas MWD. Thus the Mello-Roos Act financing approved by that 87%
vote was for the CFD to acquire the service area of an existing entity.
Plainly Casitas MWD intends to supplant Golden State in providing water
service to Golden States current customers using Golden States current
facilities. As Casitas MWDs resolutions and accompanying report2-AA-407-414make clear the purpose of issuing the bonds and taking
39
Golden States physical plant is really to take the customer base the
ongoing revenue stream and ownership of Golden States water rights so
that Casitas MWD can continue pumping Golden States water to supply to
Golden States customers.
That is flatly forbidden by Govt. Code 53313. The statute is
abundantly clear that services financed under the Act shall not supplant
services already available within that territory Govt. Code 53313.
First water utility service is not one of the services specifically
listed in the statute that may be financed by. a CFD. Second even if it were
clear that a water utility service could be provided through a CFD the
statute is abundantly clear that it shall not supplant services already
available within that territory ... Govt. Code 53313. As the only
thing planned by Casitas MWD is to take over Golden States service area
and continue providing the same service to the same people using the same
equipment and the same water supply the action proposed by Casitas
MWD is beyond the bounds set by the statute even if the kind of service fit
within its definition. The question put to the electorate was whether to
form the Community Facilities District issue $60 million in bonds and
levy special taxes to pay off those bonds all in order to finance
acquisition of Golden States service area ... 3-AA-524 Casitas
MWDs use of the term acquisition here was not literal it was not saying
it planned to condemn the entire City of Ojai obviously. Rather the
electorate was told that the single purpose of the CFD was to do precisely
what Mello-Roos forbids namely to supplant an existing service provider.
The portion of the Mello-Roos Act which authorizes a Mello-Roos District
to finance the provision of public services bars the Act from being used to
supplant an existing service provider. Govt. Code 53313. The Act
40
was only intended to finance new services and facilities or expansion or
refurbishment of existing ones.
Casitas MWD contends that this statutory proscription against
supplanting an existing service has no bearing on the case because Casitas
MWD says it will not use the money it gets from the Mello-Roos bonds and
taxes to operate the water system but only to pay back the bonds whose
proceeds are used to condemn the water system.
It seems reasonable to suppose that it never would have occurred to
the Legislature that an agency would try to make an end-run around the
services section of the Act Govt. Code 53313 by using the facilities
section of the Act Govt. Code 53313.5 to condemn its rivals whole
operation - not least because the Legislature never provided forMello-Roosbonds to be used to fund eminent domain at all. But in any event in
the Acts services provisions the Legislature clearly stated an intent to ban
the use of the Mello-Roos Act by one service provider to supplant another.
This intention is also pertinent when interpreting the Acts facilities
provisions Govt. Code 53313.5 especially if as here the facilities
provisions are attempted to be used purely to supplant another service
provider.
There is another expression of the Legislatures intent which bears
mentioning in this context. In the subsection of the Mello-Roos facilities
statute bond financing of construction of water transmission and
distribution facilities is authorized but only to provide access to those
services to customers who do not have access to those services. Govt.
Code 53313.5e. This is inconsistent with the proposition that Govt.
Code 53313.5 was intended to allow purchase of water transmission and
distribution facilities for the mere purpose of supplanting the provider of an
41
existing service. It is consistent instead with a Legislative intention that
Mello-Roos funding whether for construction of facilities purchase of
facilities or operating expenses can be used only to provide new
expanded or improved services and not to wrestle for control of existing
ones.
IV.
THE WILL OF THE ELECTORATECANNOT COMPEL ILLEGAL ACTION
The question before the trial court was not whether a large number
of people had voted to change service providers but whether the procedure
selected by Casitas MWD to effectuate this change complied with the
Mello-Roos Act. As shown above it plainly did not.
The role of a judge is not merely to count noses. That may be the
end of the line for an election commissioner but the judicial role goes
beyond. Nonetheless in the space of a scant five. page opinion the trial
court managed to mention three times that the electorate had spoken loudly
6-AA-1492-1497 and that outcome must control. 6-AA-1496
That philosophy represents a fundamental misunderstanding of the
concept of judicial review. If all that mattered was the will of the majority
then there would be no need for a judicial branch at all. We would simply
settle all disputes by popular vote. But that is not our system. It is settled
law that as important as the initiative process is the voters cannot adopt an
illegal law. Lesher Communications Inc. v. City of Walnut Creek 1990
52 Cal.3d 531. Indeed an initiative that would be invalid if passed can be
judicially prevented from being presented to the voters on the ballot.
Legislature v. Deukmejian 1983 34 Cal.3d 658.
42
V.
TESTIMONY BY THE WATER DISTRICTS LAWYER ABOUTHIS PRIOR USE OF MELLO-ROOS WAS IMPROPER
The only support offered by Casitas MWD for the propriety of using
Mello-Roos to finance eminent domainlitigation was the declaration of its
trial counsel that he had done so before. 4-AA-792-808 Golden State
objected 6-AA-1287-1295 but the trial court made no ruling on
admissibility. It is unknown what effect this testimony had on the
outcome but it was irrelevant and improper in any event.
Moreover the idea that a lawyer would testify.to legal conclusions
at the heart of a case is not one that has any traction in the courts. As one
court put it an attorneys testimony regarding legal issues smacks more of
advocating than anything else and is not permitted. Summers v. A.L.
Gilbert Co. 1999 69 Cal.App.4th 1155 1185.
The calling of lawyers as expert witnesses to give
opinions as to the application of the law to particular facts
usurps the duty of the trial court to instruct the jury on the law
as applicable to the facts and results in no more than a
modern day trial by oath in which the side producing the
greater number of lawyers able to opine in their favor wins.
Amtower v. Photon Dynamics Inc. 2008 158 Cal.App.4th
1582 1598-1599 quoting Dower v. Bramet 1984 152
Cal.App.3d 837 842.
Perhaps more to the point the trial court is in no need of putative
testimony regarding the meaning of a statute whose interpretation falls into
the judicial realm
There are two reasons why opinion evidence on the
meaning of a statute is inadmissible. First leaving the
definition of statutory terms to be proved or disproved in
every case would lead to great uncertainty in the
administration of justice. Second it is the duty of the trial
judge to instruct the jurors on the general principles of law
43
pertinent to the case therefore the jury has no need for such
opinion evidence from the witness. People v. Torres 199533 Cal.App.4th 37 47 internal quotation marks and citations
omitted.
A fortiori trial courts themselves need no such testimony beyond
what the same lawyers present in their legal briefs.
As Wigmore explains
The exclusion of testimonial opinion rests here on a ground
slightly different from that of all the other instances. The
general principle .. is exemplified to be sure that the
tribunal does not need the witness judgment and hence will
insist on dispensing with it. But here it is not that the jury can
of themselves determine equally well it is that the judge orthe jury as instructed by the judge can determine equally
well. The principle is the same but the peculiarity is that a
different member of the tribunal is relied upon as equipped
with the data. It is not the common knowledge of the jury
which renders the witness opinion unnecessary but the
special legal knowledge of the judge. 7 Wigmore on
Evidence 1978 1952 p. 103 italics in original
fn. omitted.
The testimony of Casitas MWDs litigation counsel provides no
evidence to support the judgment. It should have been excluded altogether.
However if the testimony were to be considered it might tend to
prove the opposite of what it was offered to prove. We may presume that
counsel searched hard for any indication that Mello-Roos funding has ever
been used to pay for taking a property by eminent domain. If the best
counsel could come up with was his own declaration that he did it once and
got away with it one could infer that it has never been tried by anyone else
ever. As far as the declaration reveals Casitas MWD is only the second
public agency that has been persuaded to try out this novel theory and the
first to do so in the face of opposition. Evidently there was no objection
made to the misuse of Mello-Roos in the case to which counsel referred
44
so it never came before a court for a decision on this point. The
testimony therefore had no legal value. It is like a petty thief saying that
shoplifting must be legal because hes done it before and didnt get caught.
CONCLUSION
Mello-Roos is an excellent tool for financing new or refurbished
public infrastructure in the post-Proposition 13 world. But it is a limited
tool. It cannot be used as a license to finance whatever a public entity
wants to spend money on.
The trial court failed to properly apply the plain words ofMello-Roos.Mello-Roos funds cannot be used to finance the purchase of
intangible property. They cannot be used to finance a taking by eminent
domain litigation.. And they cannot be used to supplant one service
provider with another.
Casitas MWDs attempted use of Mello-Roos here perverts the
statute. Golden State respectfully requests that the judgment be reversed.
Respectfully submitted
MANATT PHELPS PHILLIPS LLP
By Oeý.40
MICHAEL M. BERGER
Attorneys for Appellant
Golden State Water Company
45
CERTIFICATE OF APPELLATE COUNSEL
The foregoing Appellants Opening Brief was produced on a
computer. According to the word count of the computer program used to
prepare the brief it contains 12856 words excluding tables and this
certificate.
Respectfully submitted
MANATT PHELPS PHILLIPS LLP
By .00eMICHAEL M. BERGER
Attorneys for Appellant
Golden State Water Company
46
PROOF OF SERVICE
I BESS HUBBARD declare I am a citizen of the United States and
employed in Los Angeles County California. I am over the age of eighteen years
and not a party to the within-entitled action. My business address is 11355 W.
Olympic Blvd. Los Angeles California 90064.
On September 25 2014 I served the documents described as
APPELLANTS OPENING BRIEFand APPELLANTS APPENDIX 6 Volumes
on the interested parties in this action addressed as stated on the Service List
below.
SEE ATTACHED SERVICE LIST
By placing such documents in a sealed envelope with postage thereon
fully prepaid for first class mail for collection and mailing at Manatt Phelps
Phillips LLP Los Angeles California following ordinary business practice. I
am readily familiar with the firms practice of collection and processing
correspondence for mailing. Under that practice it would be deposited with the
U.S. Postal Service on that same day with postage thereon fully prepaid in the
ordinary course of business. I am aware that on motion of the party served
service is presumed invalid if postal cancellation date or postage meter date is
more than one day after date of deposit for mailing in affidavit.
I declare that I am employed in the office of a member of the bar of this
court at whose direction the service was made. I declare under penalty of perjury
under the laws of the State of California that the above is true and correct.
Executed on September 25 2014 at L Angeles California.
BESS HUBBARD
1
SERVICE LIST
Golden State Water Co. v. Casitas Municipal Water Dist et al. No. B255408
Dennis LaRochelle Attorneys for Respondents
Arnold Bleuel LaRochelle Mathews Casitas Municipal Water
Zirbel District Casitas Municipal
300 Esplanade Drive 2100 Water District Community
Oxnard CA 93036 Facilities District No. 2013.1
Ojai All Persons Interested in
Validity of Casitas. Municipal
Water District Resolutions Nos.
13.12 etc.
Jeffrey M. Oderman Attorneys for Respondents
Rutan Tucker LLP Casitas Municipal Water
611 Anton Blvd. Suite 1400 District Casitas Municipal
Costa Mesa CA 92626-1998 Water District Community
Facilities District No. 2013.1
Ojai All Persons Interested in
Validity of Casitas Municipal
Water District Resolutions Nos.
13.12 etc.
Allen R. Ball Attorneys for Respondents
Law Office of Ball Yorke Richard H. Hajas Dale Hanson
1001 Partridge Drive Suite 330 Patrick J. McPherson Robert R.
Ventura CA 93003 Daddi Louis Torres Stanley
Greene and Ojai Friends of
Locally Owned Water
Ryan Blatz Attorneys for Respondents
Ryan Blatz Law Richard H. Hajas Dale Hanson
407 Bryant Circle Suite A2 Patrick J. McPherson Robert R.
Ojai CA 93023 Daddi Louis Torres Stanley
Greene and Ojai Friends of
Locally Owned Water
Clerk of the Court Superior Court - Brief only
Ventura County Superior Court
800 S. Victoria Av. - Hall of Justice
Ventura CA 93009
California Supreme Court California Supreme Court -
350 McAllister Street Brief only via e-submission
San Francisco CA 94102
313018361.1
2