Eminent Domain Report

I'll give you a hint, this is a bit of a trick question.  Give up?  Okay.  Whenever you name a State agency, of course. 

In Lavine v. State of California (pdf), a property owner filed a lawsuit after the Regional Water Quality Control Board adopted, and the California State Water Resources Control Board approved, a ban on on-site septic systems in Malibu.  (Case No. B238030, Aug. 20, 2013, Unpublished.)  The plaintiff owned a single-family residence in Malibu that utilized an on-site septic system; no public sewer system was available to residences in the area.  Although the plaintiff initially named only the State Water Resources Control Board, she amended the complaint to also name the Regional Water Quality Control Board, the State of California, and the California Environmental Protection Agency ("Cal EPA").  The Cal EPA is the umbrella agency for the State Water Resources Control Board.  The only claims alleged against the State of California and Cal EPA were for inverse condemnation and declaratory relief.  

The inverse claim alleged that because a public sewer system was not available, the ban on on-site septic systems deprived plaintiff of substantially all of the beneficial, viable economic and practical use of her residentially zoned property.  The declaratory relief claim sought a declaration of plaintiff's rights vis-a-vis the State of California and Cal EPA.     

The State of California and Cal EPA demurred to the complaint, arguing that the actions of the State Water Resources Control Board and Regional Water Quality Control Board could not be imputed to them.  The trial court sustained the demurrer without leave to amend, and the Court of Appeal affirmed. 

The Court of Appeal first explained that in order to maintain a claim against the State of California or Cal EPA, plaintiff must allege that they engaged in wrongful conduct.  The Court of Appeal stated that liability cannot be imposed simply because "they are hierarchically related within state government" to the State Water Resources Control Board.  The Court of Appeal then explained that an action against a subsidiary agency of the State is an action against the State. 

Because the inverse and declaratory relief causes of action were based solely on the alleged actions of subsidiary agencies, the Court of Appeal affirmed the dismissal of the State of California, holding that the inclusion of the State as an additional party was duplicative.  The Court of Appeal also affirmed the dismissal of Cal EPA, holding that the fact that the State Water Resources Control Board "operated under the auspices" of Cal EPA was not a sufficient factual basis on which to state a claim against Cal EPA.  Furthermore, the Court of Appeal held that it was not an abuse of discretion to deny leave to amend, since the plaintiff never claimed she could allege specific wrongdoing by the State of California or Cal EPA.

Thus, although the State of California effectively remained a party, since an action against a subsidiary agency of the State is an action against the State, the State of California was held to be an improperly named party.  The Court of Appeal did note, however, that the plaintiff could have substituted the State of California for the State Water Resources Control Board.  And if the plaintiff had proceeded in this manner, the demurrer would have been overruled with respect to the State.