SIERRA CLUB et al., Plaintiffs and Appellants, v. SAN JOAQUIN LOCAL AGENCY FORMATION COMMISSION, Defendant; Califia Development Group et al., Real Parties in Interest and Respondents.
This appeal is from an order dismissing a mandamus petition to overturn a decision of the San Joaquin Local Agency Formation Commission (LAFCO). The decision approved a proposed annexation and made findings concerning the environmental effects identified in an environmental impact report (EIR). The dismissal was granted on the ground the plaintiffs failed to exhaust an administrative remedy, reconsideration of the LAFCO decision. (Gov.Code, § 56857, subd. (a).) 1
We will affirm the judgment (order of dismissal) under the compulsion of Alexander v. State Personnel Board (1943) 22 Cal.2d 198, 137 P.2d 433. However, we consider the rule in Alexander outmoded and incorrect and will urge the Legislature or the California Supreme Court to overturn it.
FACTS AND PROCEDURAL BACKGROUND
In early 1996 the City of Lathrop (Lathrop) approved a development proposal, Gold Rush City and Mossdale Village, relating to land outside its boundaries. In a number of actions it approved a specific plan, certified an EIR for the plan, approved a development agreement and a plan to double the capacity of its wastewater treatment facility, and certified an EIR for the latter project. Thereafter, proceedings were commenced before LAFCO to approve Lathrop's annexation of the territory to be developed.
Petitioners, the Sierra Club, San Joaquin Farm Bureau Federation, Eric Parfrey, and Georgianna Reichelt objected to the annexation proposal in the LAFCO proceedings. In October 1996, LAFCO approved the proposal and adopted a finding of overriding considerations with respect to the environmental impacts identified in the EIR for the plan.
In November 1996, Parfrey sent a letter to LAFCO requesting reconsideration and asserting the required $700 dollar filing fee would be tendered. The following day he withdrew the request.
The petitioners then filed the complaint initiating this action against LAFCO and Lathrop and naming the developers, inter alia, Califia Development Group (Califia) as real parties in interest. The complaint alleges there is no substantial evidence to support the finding of overriding considerations with respect to the identified environmental impacts and LAFCO violated various Government Code provisions governing annexations.
The petitioners contend that Alexander does not advance the exhaustion doctrine and is no longer binding, since it has been “repealed by statute,” citing Benton v. Board of Supervisors (1991) 226 Cal.App.3d 1467, 277 Cal.Rptr. 481. The first argument is persuasive; however, it is unavailing since the second argument is not-we are constrained by Alexander.
In Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 295, 109 P.2d 942 the Supreme Court held the failure to exhaust an administrative remedy is a matter of subject matter jurisdiction which precludes judicial relief. Abelleira denied relief to employers who claimed the California Employment Commission was unlawfully paying unemployment insurance benefits to striking employees. The employers argued that completing the administrative process was an exercise in futility because “the commission has already decided cases on similar facts against their present position, and therefore that an appeal in the instant case would be fruitless.” (Id. at p. 300, 109 P.2d 942.)
The Supreme Court responded, in pertinent part, as follows:
“It should be observed ․ that this argument is completely answered by those cases which apply the rule of exhaustion of remedies to rehearings. Since the board has already made a decision, if the argument of futility of further application were sound, then surely this is the instance in which it would be accepted. But it has been held that where the administrative procedure prescribes a rehearing, the rule of exhaustion of remedies will apply in order that the board may be given an opportunity to correct any errors that it may have made. (See Palermo L.W. Co. v. Railroad Com., supra [227 F. 708 (N.D.Ca. 1915)]; Carlson v. Railroad Com., 216 Cal. 653, 655 [15 Pac. (2d) 859]; Red River Broadcasting Co. v. Federal Communications Com., supra; McCardle v. Board of Commissioners, 195 Ind. 281 [144 N.E. 877, 878].)” (Abelleira, at pp. 301-302, 109 P.2d 942.)
Unfortunately, in Alexander this dicta became a holding. Two civil service employees had sought judicial review of a decision of the State Personnel Board which upheld their dismissal. The petition alleged the board's proceedings were irregular, the members of the board were biased, and one member had demonstrated he was prejudiced. (22 Cal.2d at p. 199, 137 P.2d 433.) The Supreme Court held the trial court had properly sustained a demurrer because the employees had not applied for a rehearing before the board. The majority opinion reasons as follows.
“The rule that administrative remedies must be exhausted before redress may be had in the courts is established in this state. (Abelleira v. District Court of Appeal, 17 Cal.2d 280 [109 P.2d 942, 132 A.L.R. 715], and cases cited at pages 292, 293, 302 [109 P.2d 942].) The provision for a rehearing is unquestionably such a remedy. As to the general rule, it is stated in Vandalia Railroad Co. v. Public Service Commission of Indiana, 242 U.S. 255 [37 S.Ct. 93, 61 L.Ed. 276], at page 261 [37 S.Ct. at page 95], that one aggrieved by the rulings of an administrative board may not complain that he has been deprived of constitutional rights if he has not availed himself of the remedies prescribed for a rectification of such rulings.
“The petitioners ask this court to distinguish between a provision in a statute which requires the filing of a petition for rehearing before an administrative board as a condition precedent to commencing proceedings in the courts [citations], and a provision such as in the present act which it is claimed is permissive only. The distinction is of no assistance to the petitioners under the rule. If a rehearing is available it is an administrative remedy to which the petitioners must first resort in order to give the board an opportunity to correct any mistakes it may have made. As noted in the Abelleira case, supra, at page 293 [109 P.2d 942], the rule must be enforced uniformly by the courts. Its enforcement is not a matter of judicial discretion. It is true, the Civil Service Act does not expressly require that application for a rehearing be made as a condition precedent to redress in the courts. But neither does the act expressly designate a specific remedy in the courts. So that where, as here, the act provides for a rehearing, but makes no provision for specific redress in the courts and resort to rehearing as a condition precedent, the rule of exhaustion of administrative remedies supplies the omission. The facts here alleged do not bring the case within any possible exception to the enforcement of the rule. Adherence to the rule is not excused in this case because of the bare probability, asserted long after the time had expired, that timely application for rehearing would have been denied. As suggested in Red River Broadcasting Co. v. Federal Communications Com., 98 F.2d 282, the petitioners cannot be heard to urge that there was danger of refusal of their application when they did not make the effort within the time prescribed.” (Alexander, supra, 22 Cal.2d at pp. 199-200, 137 P.2d 433.)
We do not find this reasoning persuasive. The two federal cases cited by the majority do not support the wooden rule that a rehearing must invariably be exhausted.2 In Vandalia Railroad Co., supra, the plaintiff claimed the railroad commission had issued an order prescribing locomotive headlights which was so indefinite and uncertain as to deny due process. In Red River Broadcasting Co., supra, the plaintiff claimed to have been injured by a proceeding involving a competitor of which it had no notice, yet filed its judicial complaint within the period for requesting an administrative rehearing. In both instances, the claim appears to have been one that could have been tendered in the administrative forum but was not.
Thus, in both cases upon which Alexander relies, review could have been barred because judicial review is generally unavailable for issues not raised before the agency. (See, e.g., 2 Davis and Pierce, Admin. Law Treatise (3d ed. 1994) § 15.8; c.f., e.g., Pub. Res.Code, § 21177.) This rule suffices to advance the most important policy served by the exhaustion doctrine-the performance of the function assigned to the agency under the statutory scheme. (See 2 Davis, Admin. Law Treatise, supra, § 15.2, p. 309.)
Moreover, the dissents of Justices Carter and Traynor point out persuasive reasons to hold that “unless application for a rehearing is made mandatory by statute or rule, such application need not be made as a condition precedent to a review of the decision or order of such tribunal.” (Alexander, supra, 22 Cal.2d at pp. 201, 204, 137 P.2d 433, separate dis. opns. by Carter, J. And Traynor, J.) Justice Carter notes that is the rule in the judicial forum.3 (22 Cal.2d at p. 201, 137 P.2d 433.) Justice Traynor notes that in the long run such a rule would avoid unnecessary litigation and impel the Legislature to make the policy decision concerning the requirement of seeking rehearing for each statutory scheme. Not surprisingly, the majority opinion in Alexander has been criticized by commentators. (See, e.g., Cal. Administrative Mandamus (Cont.Ed.Bar 1989) § 2.30, p. 52.)
As the plaintiffs note, the court of appeal in Benton v. Board of Supervisors, supra, 226 Cal.App.3d 1467, 277 Cal.Rptr. 481, concluded that Alexander is no longer binding authority. Benton, relying on Witkin (now 3 Witkin, Cal. Procedure (4th ed. 1996) Actions, § 309(6), p. 398), reasons that the Alexander “holding ․ has been repealed by statute,” citing to Government Code section 11523. (226 Cal.App.3d at p. 1475, 277 Cal.Rptr. 481.) We do not agree.
The ratio decidendi in Alexander is that, where a statute provides for a rehearing before an administrative agency, the remedy must be attempted or a claim of error in the administrative hearing is barred under the doctrine of exhaustion of administrative remedies. That rule was necessary to the decision in Alexander and has the effect of precedent. (See, e.g., 9 Witkin, Cal. Procedure, supra, Appeal, § 945, pp. 986-987.)
Neither Government Code section 11523, pertaining to the Administrative Procedure Act, nor Government Code section 19588, pertaining to civil service proceedings, establishes a rule of general application contrary to Alexander.4 Although the judicial doctrine of exhaustion of administrative remedies is subject to Legislative supercession, sections 11523 and 19588 only provide that in the particular proceedings identified an application for rehearing is not required. To “repeal” 5 the rule in Alexander a statute would have to apply generally, e.g., it would have to say that, except as otherwise provided by statute or regulation, the failure to seek reconsideration before any administrative agency shall not affect the right to judicial review.
This is not to say that the enactment of these provisions does not undercut the implication that the rule in Alexander is grounded on a wise assessment of public policy. In a case of first impression, or, for a court that is not bound by the authority of a higher court, the legislative policy determinations that application for a rehearing should not be required as a matter of course is a significant consideration.
Plaintiffs argue in the alternative that Alexander is no longer binding in this case because it is in conflict with Code of Civil Procedure section 1094.6, which governs judicial review of most local agency decisions. They note the statute provides that the prescribed limitations period begins the day after finality of the administrative decision and:
“If there is a provision for reconsideration, the decision is final for purposes of this section upon the expiration of the period during which such reconsideration can be sought; provided, that if reconsideration is sought pursuant to any such provision the decision is final for the purposes of this section on the date that reconsideration is rejected.”
The plaintiffs argue that implicit in this provision is the view that a writ of mandate may be filed notwithstanding the failure to seek reconsideration.
However, for the reasons given above, there is no implicit inconsistency between Code of Civil Procedure section 1094.6 and Alexander. A writ of mandate may be subject to the limitations provision, notwithstanding failure to seek reconsideration, when the statutes or regulations governing reconsideration expressly provide that failure to seek it is not a bar to judicial review.
Plaintiffs' last sally is that they should be excused from the exhaustion requirement under the exception for futility, because they presented their arguments to LAFCO on the first go round. (See Sea & Sage Audubon Society, Inc. v. Planning Commission (1983) 34 Cal.3d 412, 194 Cal.Rptr. 357, 668 P.2d 664.) The problem with this pragmatic argument is that it would entirely vitiate the rule in Alexander. An exception that swallows the rule is no exception. Moreover, Alexander stands on the reasoning in Abelleira, quoted at the outset, which squarely rejects this view of the futility exception.
For all the foregoing reasons, the plaintiffs' contention of error has no merit. However, in our view, the rule in Alexander is incorrect and outmoded. It presents a fitful trap for the unwary. (See, e.g., 1 Fellmeth and Folsom, Cal. Administrative and Antitrust Law (1992) § 8.04, p. 361, “Although at one time a litigant was required to seek a rehearing or petition for reconsideration, that requirement is no longer commonly applied.” (Fn.omitted.).) Therefore, we recommend that the Legislature enact a statute superseding the rule in Alexander, or that the California Supreme Court grant hearing in this case and overrule Alexander.
The judgment (order of dismissal) is affirmed.
I concur in the judgment and the opinion except for the criticism of Alexander v. State Personnel Board (1943) 22 Cal.2d 198, 137 P.2d 433. The rule of Alexander is venerable, readily understood, easy to comply with and consistent with the purpose of the doctrine of exhaustion of administrative remedies-to conserve judicial resources. The problem here was not with the rule but with the fact petitioner's counsel were unaware of it, or if aware of it, did not comply with it. The Supreme Court must have better things to do than to reconsider long established rules simply to accommodate inattentive or parsimonious counsel.
1. Government Code section 56857, subdivision (a) is as follows.“(a) Any person or affected agency may file a written request with the executive officer requesting amendments to or reconsideration of any resolution adopted by the commission making determinations. The request shall state the specific modification to the resolution being requested.”
2. Indeed, as Justice Traynor points out in his dissent in Alexander (22 Cal.2d at p. 204, 137 P.2d 433), notwithstanding the majority's reliance on federal authorities, the United States Supreme Court case law held that application for an administrative rehearing was not required. This case law rule is now reflected in the federal administrative procedure act, 5 United States Code section 704: “Except as otherwise expressly required by statute, agency action otherwise final is final for the purposes [of judicial review] whether or not there has been presented or determined an application ․ for any form of reconsideration․”
3. Ironically, at the time of Alexander, a decision of a body such as a LAFCO, with only local territorial jurisdiction, would not have been governed by the exhaustion of administrative remedies doctrine. (See Kleps, Certiorarified Mandamus: Court Review of California Administrative Decisions 1939-49 (1950) 2 Stan.L.Rev. 285, 291; c.f., Rogers v. Retirement Board (1952) 109 Cal.App.2d 751, 756, 241 P.2d 611.) However, that anomaly ended in 1950, when the constitutional provision underpinning the local agency exception was repealed. (See Kleps, Certiorarified Mandamus Reviewed: The Courts and California Administrative Decisions-1949-1959 (1960) 12 Stan.L.Rev. 554, 560-561.)
4. Government Code section 11523, in pertinent part, is as follows.“The right to petition [for review of a proceeding governed by the Administrative Procedure Act] shall not be affected by the failure to seek reconsideration before the agency.”Government Code section 19588 is as follows.“The right to petition a court for writ of mandate, or to bring or maintain any action or proceeding based on or related to any civil service law of this State or the administration thereof shall not be affected by the failure to apply for rehearing by filing written petition therefor with the board.”
5. It is inaccurate to say that a legislative enactment has repealed a judicially established rule. Rather, the Legislature, as the superior rule making body, has established a rule in conflict with and superseding the judicial rule.
BLEASE, Associate Justice.
RAYE, J., concurs.