Department of Fish & Game v. Superior Court (197 Cal. App. 4th 1323, 2011)

Opinion

HULL, J.

In this mandamus proceeding, petitioners-defendants seek to overturn a decision of the Superior Court of Plumas County certifying the underlying dispute as a class action. Real parties in interest-plaintiffs are various real property or business owners or operators and the City of Portola, all of whom are located near Lake Davis in Plumas County. (For purposes of clarity, petitioners shall be referred to as defendants and real parties in interest shall be referred to as plaintiffs.) They claim to have been harmed by efforts of the Department of Fish and Game (DFG) in 2007 to eradicate an invasive species of fish, the northern pike, from the lake and its tributaries in order to preserve tourism in the area and to prevent migration of the fish to other bodies of water.

Plaintiffs allege defendants’ efforts created a decline in tourism that adversely affected business income, property values and tax receipts for the period leading up to and following the eradication effort. They assert claims for public nuisance, negligence, inverse condemnation, various types of business interference, strict liability, and equal protection.

Resolution of the class certification issue turns primarily on whether the legal and factual issues that must be resolved in this dispute are predominantly common to all class members or must be determined on an individual basis. The trial court concluded common issues predominate.

We conclude the trial court applied incorrect legal criteria and made erroneous legal assumptions in resolving the predominance issue, thereby rendering its decision an abuse of discretion. We therefore grant the requested relief.

Facts and Proceedings

As alleged in the complaint, northern pike were first discovered in Lake Davis in 1994 and, in 1997, DFG undertook to eradicate the species from the lake and its tributaries by applying a poison (the 1997 poisoning). The Legislature thereafter determined residents in the area had suffered economic harm as a result of the 1997 poisoning and appropriated $9,176,000 to compensate them. (Gov. Code, § 998.)

The 1997 poisoning was unsuccessful in eliminating the northern pike. Between 1999 and 2006, DFG attempted to control and contain the species. However, this too proved ineffective and DFG decided once again to poison the lake. This second poisoning occurred in September 2007. In addition to applying poison to the lake, DFG “widely publicized the [plan to poison the lake], closed all roads that access Lake Davis during the [poisoning] and placed large, blinking Department of Transportation signs on Highway 70 to advise the general public of Lake Davis’s closing. The signs were unclear and misleading, which led the general public to believe that the entire area, including the City of Portola, was closed.” DFG “left the large road signs up for more than a week after the roads to Lake Davis were actually re-opened, unnecessarily creating the continued appearance that the City of Portola and surrounding vicinity were closed.” The forest around Lake Davis remained closed from September 2007 through January 2008 and the lake was not certified for reuse as a source of drinking water until May 2008. (Hereafter, the foregoing acts attendant to the second poisoning effort, as well as the poisoning itself, are referred to collectively as the 2007 poisoning.)

Plaintiffs Ira A. Adams, Anthon and Sylvia Olsen, Frank L., Patricia A. and Judy Ann Genescritti, the Genescritti Family Trust, Sleepy Hollow RV Park, LLC, and the City of Portola filed claims with the California Victim Compensation and Government Claims Board (Claims Board) (see Gov. Code, § 900.2) for damages caused by the 2007 poisoning. Their claims were rejected. Plaintiffs then commenced this action on behalf of themselves and all others similarly situated. Named as defendants are DFG, John McCamman, the former acting director of DFG, and two DFG employees, Ed Pert and Randy Kelley. The first amended complaint contains nine causes of action: (1) public nuisance; (2) negligence; (3) inverse condemnation; (4) intentional interference with economic relationship; (5) negligent interference with economic relationship; (6) intentional interference with prospective economic relations; (7) negligent interference with prospective economic relations; (8) strict liability; and (9) equal protection.

Plaintiffs moved for certification of the following three subclasses:

“Class A: All persons, entities and/or political subdivisions owning and/or operating one or more businesses in the Lake Davis area that timely submitted one or more claims to the Claims Board for damages suffered as a result of the [2007 poisoning], and whose claims were rejected by the Claims Board.

“Class B: All persons, entities and/or political subdivisions owning real property in the Lake Davis area during the relevant time period that timely submitted one or more claims to the Claims Board for damages incurred as a result of the decrease in real property values, loss of real property income or lost sales of real property, suffered as a result of the [2007 poisoning], and whose claims were rejected by the Claims Board.

“Class C: All persons, entities and/or political subdivisions that were injured by the [2007 poisoning], including, but not limited to lost property and sales tax revenues, lost economic development and economic growth, or suffered any other loss alleged in the First Amended Complaint as a result of the [2007 poisoning], and that timely submitted one or more claims to the Claims Board, and whose claims were rejected by the Claims Board.”

In support of their motion, plaintiffs submitted the declarations of Arthur Gimmy, a professional property and business appraiser, Dr. James Robert Fountain, a consultant in real estate and land development, Jeff Rogers, an accountant specializing in the determination of business losses, and Estelle Saltzman, a public relations specialist.

Gimmy claimed he could determine overall lost real property values in the Lake Davis area caused by the 2007 poisoning by comparing property value fluctuations in that area during the relevant period with those in a comparable area and attributing any discrepancy to the 2007 poisoning. Dr. Fountain suggested the same approach could be used to determine the amount of overall business decline in the Lake Davis area caused by the 2007 poisoning. In other words, any business decline in the area not also experienced in other, comparable areas must be attributable to the 2007 poisoning. Rogers claimed he could use a common methodology to compute the losses suffered by any particular business in the area. Finally, Saltzman indicated a marketing effort to revitalize Lake Davis tourism would cost between $1 million and $1.5 million each year for the next three years.

In opposition to plaintiffs’ motion, defendants submitted the declarations of Dr. Michael J. Harris, an economist, James W. McCurley, an accountant, and Reese Perkins, a real estate appraiser. Dr. Harris opined that a classwide methodology could not be used to determine business losses in light of significant differences in the natures of the various businesses included in plaintiffs’ proposed class A. Dr. Harris also asserted real property losses among class B members would necessarily vary depending on whether the property was used for a business or a residence and whether the owner attempted to sell during the relevant period. McCurley likewise opined that a single format approach to calculating business losses in class A would not be appropriate under the circumstances because of differences in the businesses. Finally, Perkins indicated a. case-by-case analysis would be necessary to evaluate adverse impacts on individual parcels of property.

The trial court granted the motion for class certification. The court explained: “The predominant legal issue: whether the actions taken by DFG to eradicate Northern Pike in 2007 resulted in a common impact based upon the causes of action alleged, and the predominant factual issues: what were the actions taken by DFG to eradicate Northern Pike in 2007, are amenable to class treatment.” The court analyzed each of plaintiffs’ nine causes of action and concluded they primarily involve common issues.

On September 24, 2010, defendants filed a petition for writ of mandate in this court seeking to reverse the trial court’s order. On October 15, we issued an alternative writ of mandate.

Discussion

I

Introduction

Code of Civil Procedure section 382 authorizes class actions when “the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court . . . .” (Code Civ. Proc., § 382.) “Courts long have acknowledged the importance of class actions as a means to prevent a failure of justice in our judicial system. [Citations.] ‘ “By establishing a technique whereby the claims of many individuals can be resolved at the same time, the class suit both eliminates the possibility of repetitious litigation and provides small claimants with a method of obtaining redress ....”’ [Citation.] Generally, a class suit is appropriate ‘when numerous parties suffer injury of insufficient size to warrant individual action and when denial of class relief would result in unjust advantage to the wrongdoer.’ [Citations.] But because group action also has the potential to create injustice, trial courts are required to ‘ “carefully weigh respective benefits and burdens and to allow maintenance of the class action only where substantial benefits accrue both to litigants and the courts.” ’ [Citation.]” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 434-435 [97 Cal.Rptr.2d 179, 2 P.3d 27] (Linder).)

In order to obtain class certification, a proponent must demonstrate the existence of both an ascertainable class and a well-defined community of interest among the proposed class members. (Linder, supra, 23 Cal.4th at p. 435.) “The community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.” (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470 [174 Cal.Rptr. 515, 629 P.2d 23].) “The predominance factor requires a showing ‘that questions of law or fact common to the class predominate over the questions affecting the individual members.’ [Citation.] ‘The ultimate question in every case of this type is whether ... the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants.’ ” (In re Cipro Cases I & II (2004) 121 Cal.App.4th 402, 410 [17 Cal.Rptr.3d 1].)

“A class action can be maintained even if each class member must at some point individually show his or her eligibility for recovery or the amount of his or her damages, so long as each class member would not be required to litigate substantial and numerous factually unique questions to determine his or her individual right to recover.” (Acree v. General Motors Acceptance Corp. (2001) 92 Cal.App.4th 385, 397 [112 Cal.Rptr.2d 99].) “Individual issues do not render class certification inappropriate so long as such issues may effectively be managed.” (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 334 [17 Cal.Rptr.3d 906, 96 P.3d 194] (Sav-On Drug Stores).)

“A trial court’s order granting or denying class certification is subject to review for abuse of discretion.” (In re Cipro Cases I & II, supra, 121 Cal.App.4th at p. 409.) “Because trial courts are ideally situated to evaluate the efficiencies and practicalities of permitting group action, they are afforded great discretion in granting or denying certification.” (Linder, supra, 23 Cal.4th at p. 435.) “ ‘Our task on appeal is not to determine in the first instance whether the requested class is appropriate but rather whether the trial court has abused its discretion ....’” (Reese v. Wal-Mart Stores, Inc. (1999) 73 Cal.App.4th 1225, 1233 [87 Cal.Rptr.2d 346].)

Nevertheless, the trial court’s ruling must be reversed if its findings are not supported by substantial evidence, if improper criteria were used, or if erroneous legal assumptions were made. (In re Cipro Cases I & II, supra, 121 Cal.App.4th at p. 409.) “The appeal of an order denying class certification presents an exception to the general rule that a reviewing court will look to the trial court’s result, not its rationale. If the trial court failed to follow the correct legal analysis when deciding whether to certify a class action, ‘an appellate court is required to reverse an order [granting] class certification . . . , “even though there may be substantial evidence to support the court’s order.” ’ ” (Bartold v. Glendale Federal Bank (2000) 81 Cal.App.4th 816, 828 [97 Cal.Rptr.2d 226].)

II

The Predominance Issue

The trial court in this case issued a 22-page opinion that reviewed the evidence presented by the parties and analyzed the various legal and factual issues presented by the claims alleged in the complaint. The court initially concluded there is an ascertainable class, an issue that does not appear to be disputed in light of the fact all class members were purportedly identified by name in exhibit A to the complaint. The court then determined that issues of fact and law common to all class members predominate over individual issues. Next, the court found the named plaintiffs have claims typical of the class and can provide adequate representation. Finally, the court concluded plaintiffs adequately demonstrated that proceeding in a class action format would be advantageous both to the litigants and to the court.

Defendants contend the trial court abused its discretion in concluding common issues predominate in this matter. According to defendants, this case “is predicated on facts peculiar to each proposed plaintiff regarding both liability and damages” and there are many diverse issues as to how each class member may have been impacted by the various aspects of the 2007 poisoning. Defendants argue “no class-wide economic or financial model or formula could be devised to calculate damages for these diverse claimants.” Instead, the circumstances of each class member “must be scrutinized to assess impact and damages.”

Defendants place particular reliance on City of San Jose v. Superior Court (1974) 12 Cal.3d 447 [115 Cal.Rptr. 797, 525 P.2d 701] (City of San Jose), where the plaintiffs sued the city on behalf of all real property owners located in the flight pattern of the San Jose Municipal Airport. They alleged nuisance and inverse condemnation and sought recovery for diminution in market value of their individual properties. (Id. at pp. 452-453.) The trial court found the matter appropriate for class treatment, but the California Supreme Court disagreed and granted the city’s petition for extraordinary relief. (Id. at p. 465.)

According to the high court, “the community of interest requirement is not satisfied if every member of the alleged class would be required to litigate numerous and substantial questions determining his individual right to recover following the ‘class judgment’ determining issues common to the purported class.” (City of San Jose, supra, 12 Cal.3d at p. 459.) The court found the matter before it to be such a case: “[T]he present action for nuisance and inverse condemnation is predicated on facts peculiar to each prospective plaintiff. An approaching or departing aircraft may or may not give rise to actionable nuisance or inverse condemnation depending on a myriad of individualized evidentiary factors. While landing or departure may be a fact common to all, liability can be established only after extensive examination of the circumstances surrounding each party. Development, use, topography, zoning, physical condition, and relative location are among the many important criteria to be considered. No one factor, not even noise level, will be determinative as to all parcels. [