REDEVELOPMENT AGENCY OF COUNTY OF RIVERSIDE v. BIRBECK

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Court of Appeal, Fourth District, Division 2, California.

The REDEVELOPMENT AGENCY OF the COUNTY OF RIVERSIDE, et al., Petitioners, v. The SUPERIOR COURT of Riverside County, Respondent. Stephen A. BIRBECK, et al., Real Parties In Interest.

Nos. E007431–E007433.

Decided: July 31, 1990

Stradling, Yocca, Carlson & Rauth, Paul L. Gale, Gary A. Pemberton, Newport Beach, Gerald J. Geerlings, County Counsel, and Lee A. Vinocour, Deputy County Counsel, for petitioners. No appearance for respondent. Kane, Ballmer & Berkman, R. Bruce Tepper, Jr., Marc J. Manason, Los Angeles, and Jean L. Harris, San Diego, for real parties in interest.

OPINION

We issued an alternative writ of mandate in these three consolidated proceedings to address a single issue:  Does the California Community Redevelopment Law (Health and Saf.Code, § 33000, et seq.—hereinafter cited as “CRL” and/or by section number only) contain an administrative procedure which must be pursued and exhausted before a party is entitled to challenge a redevelopment agency's actions by way of a subsequent lawsuit?   We conclude that it does.

FACTS 1

On July 5, 1989, the County of Riverside adopted Ordinance No. 677, which ordinance adopted an official redevelopment plan for Amendment No. 1 to Redevelopment Project Plan No. 5–1987.   Thereafter, on September 5, 1989, various interested parties (the real parties in interest before us—hereinafter referred to as the objectors) filed an action challenging the County's adoption of Ordinance No. 677.   The lawsuit challenged the County's determination that the area encompassed by the ordinance was statutorily eligible for inclusion in a redevelopment project.   The objectors brought their lawsuit pursuant to several statutory provisions:  (1) Section 33501 of the CRL;  (2) the validation proceedings provisions of the Code of Civil Procedure (beginning with section 860)—which provisions are expressly made applicable to challenges to redevelopment agency actions by the aforementioned section 33501 of the CRL;  and (3) sections 526 and 526a of the Code of Civil Procedure (authorizing, respectively, suits for injunctive relief and, more particularly, “taxpayer suits” for injunctive relief to restrain illegal expenditures of public funds).

 The County (which, together with the County's redevelopment agency and various of the County's officials, are the petitioners before us and are hereinafter referred to as County) filed a demurrer to the objectors' complaint, asserting that the objectors had failed to allege facts sufficient to constitute a cause of action in that they had failed to allege participation in the statutory hearing process set forth in the CRL as a part of the redevelopment plan adoption process.  (See, in particular, sections 33360–33364.) 2  The underlying legal gist of the County's demurrer was the contention that the objectors' failure to participate in the statutory hearing process set forth in sections 33360–33364 constituted a failure to exhaust available administrative remedies, a jurisdictional prerequisite to bringing the lawsuit.  (City of Coachella v. Riverside County Airport Land Use Com. (1989) 210 Cal.App.3d 1277, 1287, 258 Cal.Rptr. 795.)

The trial court overruled the demurrer, finding that the in rem nature of actions brought under the validation proceedings provisions of the Code of Civil Procedure (ante ) rendered the doctrine of exhaustion of administrative remedies (hereinafter, the exhaustion doctrine) inapplicable.

County petitioned this court for extraordinary relief on the ground that the trial court, given the objectors' failure to exhaust administrative remedies, was proceeding in excess of its jurisdiction.

The objectors have never disputed the essential factual allegations made by County with respect to their participation in the statutory hearing process at issue.   The objectors do, of course, dispute the applicability of the exhaustion doctrine to cases such as these.   Further, the objectors have argued that, even if the exhaustion doctrine does apply in these cases, they fall within recognized exceptions to that doctrine.   As we discuss below, we find that the exhaustion doctrine does apply to these cases.   Further, while we find that we are able to dispose of certain of the objectors' contentions concerning exceptions to the exhaustion doctrine, we also find that the record before us does not allow us to completely dispose of all of the objectors' contentions concerning such exceptions.   Therefore, we conclude that the writs shall issue as prayed for, that the trial court shall be directed to sustain County's demurrers, but that the objectors shall be given limited leave to amend their complaints.

Additional facts will be referred to, as needed, in the discussion which follows.

DISCUSSION

 The parties have expended considerable effort in attempting to characterize County's adoption of Ordinance No. 677 as either “quasi-legislative” or “quasi-administrative.”   Indeed, the courts themselves are not in agreement on the characterization to be given this sort of governmental action.  (Compare Leach v. City of San Marcos (1989) 213 Cal.App.3d 648, 656, 261 Cal.Rptr. 805, with Redevelopment Agency v. City of Berkeley (1978) 80 Cal.App.3d 158, 167–168, 143 Cal.Rptr. 633.)   Determining which “label” to attach to such governmental action is not, however, crucial to resolving the issue before us.   Whatever one wants to call an adoption of a redevelopment plan, the critical question is whether there exists an administrative procedure whereby to challenge such an adoption.   The exhaustion doctrine speaks to whether or not an administrative remedy for improper governmental action exists, not to the character of the underlying governmental action itself.   That is, whether or not a redevelopment plan adoption is “quasi-administrative” or “quasi-legislative,” does the law provide for an administrative challenge to that adoption?   In this case, the answer is clearly, “yes.”

Sections 33361, 33363 and 33364 of the CRL set forth detailed provisions relating to challenges to the adoption of redevelopment plans.   These statutory provisions require that the adopting agency publish notice of public hearings not only on the matter of the adoption of such plans but also on any objections to those plans (section 33361), that the adopting agency evaluate and respond in writing to each such objection (including findings and reasons for the agency's response to each objection—see section 33363) and that the adopting agency make its written response to the objections within a fixed time period (section 33364).   Further, the law is clear that a legislative body is not free to proceed to the actual adoption of a redevelopment plan until such time as these hearing/analysis/conclusion proceedings are completed.  (Section 33364.)   These statutory provisions are precisely the sort of provisions that constitute an administrative remedy—that is, the sort of provisions that require a governmental body “to actually accept, evaluate and resolve disputes or complaints.”  (City of Coachella v. Riverside County Airport Land Use Com., supra, 210 Cal.App.3d at p. 1287, 258 Cal.Rptr. 795.)

 Contrary to the trial court's conclusion in this matter, we are aware of no authority that limits the application of the exhaustion doctrine to certain types of actions.   The exhaustion doctrine is a judicially-created doctrine (notwithstanding the fact that it has now been codified in various statutes) that assures that certain prerequisites are met before an action is brought—irrespective of the type of action that is pursued.  (See, generally, Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 292–293, 109 P.2d 942.)

 In a belated effort to avoid the application of the exhaustion doctrine to their action, the objectors have argued before us that they fall within two recognized exceptions to the doctrine:  (1) The “public interest” exception;  and (2) the “futility” exception.   The public interest exception traces its existence to the case of Environmental Law Fund, Inc. v. Town of Corte Madera (1975) 49 Cal.App.3d 105, 122 Cal.Rptr. 282 and stands for the proposition that a private party is not necessarily precluded from challenging governmental action by a failure to exhaust an administrative remedy if the party is attempting to enforce rights which it holds as a member of the affected public, was not a party to the governmental proceeding and has not received notice of those proceedings.  (49 Cal.App.3d, at pp. 113–114, 122 Cal.Rptr. 282.)   This exception, while understandable from a “public policy” point of view that values public participation in governmental decision-making is clearly not applicable to this case.   The objectors do not contend that County failed to publish appropriate notice of its hearings on the adoption of Ordinance No. 677.   Thus, the public at large (including the objectors) had ample opportunity to participate in County's decision-making process.

 The “futility” exception is another matter.   This exception recognizes that the exhaustion doctrine should not apply in those instances where the pursuit of administrative remedies is demonstrably futile.  (See, e.g., Edgren v. Regents of Univ. of Calif. (1984) 158 Cal.App.3d 515, 522–523, 205 Cal.Rptr. 6.)   We agree with County that the objectors have failed to allege specific facts showing the existence of such futility in this case.3  However, the general rule with respect to sustaining demurrers favors permitting amendments “․ not only where a complaint is defective as to form but also where it is deficient in substance, if a fair opportunity to correct the substantive defect has not been given.”  (Johnson v. County of Los Angeles (1983) 143 Cal.App.3d 298, 306, 191 Cal.Rptr. 704, internal quotations omitted.)   In this case, the objectors should be given an opportunity to amend their complaints to allege, with particularity, facts establishing the futility of exhausting the administrative remedy set forth in the CRL.

DISPOSITION

The petitions for writs of mandate are granted and such writs shall and hereby do issue as prayed for.   These matters are remanded to the trial court with directions that:  (1) The trial court sustain the demurrers hereinbefore filed by County;  and (2) the objectors be given limited leave to amend their actions to allege grounds (other than those hereinabove rejected) giving rise to the “futility” exception to the exhaustion doctrine.

FOOTNOTES

1.   As indicated in the caption set forth above, this matter originally came before us as three separate petitions, each of which addressed a separate lawsuit brought in the trial court.   These three actions vary notably only with respect to the particular redevelopment project areas at issue.   That is, each of the three cases is largely identical to the other two insofar as the parties, the material facts and the legal issues are concerned.   In recognition of the fact that the three cases are practically identical, we consolidated the three petitions for all purposes.   There being no need to detail the minor factual differences between the three cases, the particular facts set forth in this opinion are those which pertain to appellate case number E007431.

2.   As noted previously, there are minor differences between the three cases here consolidated for review.  Case No. E007431 concerns the adoption of an amendment to the redevelopment plan which had already been implemented for the Mead Valley area.  Case Nos. E007432 and E007433 concern the initial adoption of a redevelopment plan for, respectively, the Rubidoux and the Cabazon areas.Sections 33360–33364 of the CRL are expressly applicable to adoptions of redevelopment plans, but are not expressly applicable to adoptions of amendments to those plans.   However, sections 33354.5 and 33354.6 of the CRL make it clear that the adoption of amendments to such plans are subject to the same statutory procedural requirements that apply to the initial adoption of redevelopment plans:  “Where an agency proposes to amend a redevelopment plan ․, the agency shall follow the same procedure [,] and the legislative body is subject to the same restrictions as provided for in this article for the adoption of a plan.”  (This language is contained in both section 33354.5 and section 33354.6.   The bracketed comma is contained in section 33354.6, but is not contained in section 33354.5.)   Thus, the fact that the three cases before us deal both with the adoption of a redevelopment plan and with the adoption of an amendment to a redevelopment plan does not call for differing analyses of the underlying legal issues.At oral argument, the objectors contended that sections 33354.5 and 33354.6 do not compel the conclusion that the approval procedures set forth in sections 33360–33364 apply to adoptions of amendments to plans as well as to adoptions of initial plans, pointing out that sections 33354.5 and 33354.6 subject a legislative body to “the same restrictions as provided for in this article for the adoption of a plan” and that sections 33360–33364 are in a different article of the CRL (Article 5) than that which contains sections 33354.5 and 33354.6 (Article 4).   While having some surface appeal, this argument does not withstand close scrutiny:(1) First, sections 33354.5 and 33354.6 were added to the Health and Safety Code in 1976, at a time when Article 4 of the CRL was concerned solely with the creation and adoption of redevelopment plans by redevelopment agencies and contained no restrictions on the ultimate adoption of a plan by a legislative body.  (Since that time, Article 4 of the CRL has been amended to include some restrictions on the adopting legislative body with respect to certain substantive requirements as to the content of redevelopment plans—particularly, various housing elements.)   Thus, notwithstanding the wording of sections 33354.5 and 33354.6, the reference in those sections to restrictions on the legislative body must be understood as referring to the restrictions placed on legislative bodies by Article 5 of the CRL.   In interpreting statutory language, we are not bound by a strict literal reading of the Legislature's efforts when such a reading would be contrary to the Legislature's primary purpose in enacting the provisions in question.  (Leslie Salt Co. v. San Francisco Bay Conservation etc. Com. (1984) 153 Cal.App.3d 605, 614, 200 Cal.Rptr. 575.)   The scope which we here give to sections 33354.5 and 33354.6 preserves the apparent intent of our Legislature to insure that adoptions of amendments to redevelopment plans are treated with a legislative dignity equal to that afforded to adoptions of initial redevelopment plans.(2) Second, section 33360 requires that the adopting legislative body “consider the redevelopment plan submitted by the agency.”   Inasmuch as redevelopment agencies are required by sections 33354.5 and 33354.6 to use the same procedures in adopting and submitting amendments to redevelopment plans as those used in adopting and submitting initial redevelopment plans, consistent statutory construction requires that “the redevelopment plan” contemplated by section 33360 be construed to address agency submissions of both initial redevelopment plans and amendments to redevelopment plans.

3.   The objectors have argued that the futility exception to the exhaustion doctrine is applicable in these cases for two reasons.   This argument has no merit.First, the objectors argue that the underlying objection to these plans (that they encompass areas that are not 80 percent “urbanized”) is indisputedly true and was known to County prior to the adoption of the three plans—thus evidencing County's unwillingness to abide by the requirements of the CRL even with respect to matters which are factually beyond debate.   The error here is in the objector's failure to recognize that the CRL contains provisions that, at least arguably, set forth exceptions to the requirement of 80 percent urbanization.   Thus, there was sufficient “room” for the exercise of discretion in determining whether the areas in question qualified for redevelopment planning to negate any suggestion that the record discloses a County unwilling to consider any and all objections to the redevelopment plans.Second, the objectors argue that County officials knew of the objections prior to the public hearings held pursuant to sections 33360–33364 and that County's insistence in going forward with the adoptions of the redevelopment plans in any event evidences the futility of exhausting any remedies provided for by statute.   The error here is in the fact that the argument simply begs the issue.   Whether or not certain facts were known to County in advance, the implementation of the administrative remedies in this case would have obligated County to specifically address the objections held by the objectors and to respond to those objections with specific reasons.   We will not assume that County would have refused to acknowledge the merits of an appropriate objection, had County been brought face-to-face with such an objection and the need to give that objection reasoned consideration.

HOLLENHORST, Acting Presiding Justice.

DABNEY and MC DANIEL *, JJ., concur.

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