Despite Marijuana Industry Efforts, Local Control Survives

August 2017
Number 48

Eight months after California voters approved Proposition 64, which legalized adult use of recreational marijuana in California, Governor Jerry Brown signed a new bill that will facilitate the issuance of marijuana business licenses beginning in January 2018. Despite marijuana industry efforts to minimize local government regulation, the new bill guarantees continued local agencies’ control over marijuana operations in their jurisdictions.

The primary thrust of Senate Bill (SB) 94, the Medical and Adult Use Cannabis Recreation and Safety Act (MAUCRSA) is to combine state regulation of medical and recreational marijuana under the new Bureau of Cannabis Control (BCC). However, the bill also provides for local control over permitting and safety regulation of marijuana businesses. Under the new law, local agencies have the right to:

  • Expand the prohibition zones around schools, daycare centers and youth centers for marijuana businesses;
  • Inspect the premises and examine the records of licensed cannabis businesses, during normal business hours, and set fines up to $30,000 for each incident of non-compliance with local laws;
  • Regulate mobile dispensaries and require a physical, permitted location for the dispensary, even if it is closed to the public;
  • Enforce fire and life safety requirements on marijuana operations; and
  • Seize and destroy illegal marijuana, including during peace officers’ investigation stage, with unlicensed individuals being held responsible for the cost of the destruction.

Local ordinances remain exempt from California Environmental Quality Act (CEQA) review until July 1, 2019.

SB 94 also clarifies the scope of joint state and local agency jurisdiction. The bill provides:

  • State authority to delegate full power and authority to local agencies – through an agreement with local jurisdictions – to enforce regulations promulgated by the BCC;
  • Revocation of state licensure if the cannabis licensee is not complying
    with local laws;
  • The allocation of $3 million to the California Highway Patrol to be used for training drug recognition experts, which might also be used to support local drug enforcement;
  • Streamlined processes for the collection and remitting of marijuana taxes and fees;
  • A requirement that local jurisdictions provide the BCC with copies of any ordinances or regulations related to commercial cannabis operations as well as designating a contact person to act as a liaison between the BCC and the local government; and
  • Establishment of a process for local agencies and the BCC to share information about an applicant for a marijuana license.

For more information on Proposition 64 and the Medical and Adult Use Cannabis Recreation and Safety Act, please contact the authors of this Client News Brief or an attorney in Lozano Smith’s Local Government Practice Group or at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

Jenell Van Bindsbergen

Partner

Lee Burdick

Senior Counsel

©2017 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

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Appellate Courts Reject Recreational Trail Immunity for Adjacent Hazards

August 2017
Number 47

Two decisions in the last three months have increased the potential for a public entity to be held liable for an injury suffered on one of its recreational trails. Appellate courts decidingGarcia v. American Golf Corporation (May 3, 2017, No. B267613) ___ Cal.App.5th ___ and Toeppe v. City of San Diego (July 27, 2017, No. D069662) ___ Cal.App.5th ___ held that a public entity cannot assert recreational trail immunity when an adjacent hazardous condition of the public entity’s property is unrelated to, or independent of, the trail. Previous decisions had broadly applied statutory recreational trail immunity to hazards on property adjacent to public trails.

The California Supreme Court denied review of the Garcia decision on August 9. As of this writing, no request for Supreme Court review has been filed in Toeppe.

Prior Law

Public entities generally are immune from liability for injuries caused by their recreational trails, pursuant to Government Code section 831.4. The statute specifically provides that a public agency is not liable for an injury caused by a “condition of” an “unpaved road” or “trail” used for general recreational purposes.

In the past, this immunity has been consistently interpreted to broadly protect public agencies from liability due to injuries from both design elements and locations of trails. InAmberger-Warren v. City of Piedmont (2006) 143 Cal.App.4th 1074, the plaintiff was bumped off a path and started to slip down a hill. The court held that recreational trail immunity extended to both the design of a trail (the lack of handrails) and the location (the placement next to a steep slope). One year later, in Prokopv. City of Los Angeles (2007) 150 Cal.App.4th 1332, the appellate court held that the “condition of” a bikeway included the design of a bicycle gate into which plaintiff had crashed, and that even though the injury occurred just off the bikeway itself, that the gateway to the bike path was “an integral part of the bike path.”

Earlier this year, in Leyva v. Crocket & Company, Inc. (2017) 7 Cal.App.5th 1105, an appellate court considered a case where the plaintiff was struck by a golf ball while on a publicly owned trail. The plaintiff argued that the lack of safety barriers on the adjacent golf course caused the injury, and that this condition was not a faulty design or condition of the trail. The appellate court disagreed and concluded that the immunity applied since the trail’s location next to the golf course was an “integral feature” of the trail, and the erection of a safety barrier would be equivalent to the installation of a handrail in Amberger.

The Garcia Decision

Factually similar to Leyva, the plaintiff in Garcia was a child in a stroller who was hit in the head by a golf ball while on a pedestrian walkway between a roadway and a golf course, which were all owned by a city. However, in Garcia the court concluded thatAmberger “did not hold that there must be immunity for every injury occurring on a trail when an adjacent public property was a contributing factor. … It identified the issue as whether the trail and an adjacent public property meet a relatedness test.” The court found that the trail and golf course did not pass this relatedness test, and it distinguished Leyva despite its strong factual similarities.

Consequently, the court issued a narrow holding: A public golf course cannot assert a recreational trail immunity defense when the trail abuts a public street; the course is a commercially-operated, revenue-generating enterprise; the course has a dangerous condition; and the dangerous condition caused harm to a user of the trail.

The Toeppe Decision

Issued by the same appellate district that issued Leyva, theToeppe decision used an approach similar to Garcia but stated a broader holding. The plaintiff was walking on a trail in a public park when a eucalyptus branch fell and injured her. The court distinguishedAmberger by saying that the tree was “independent of the trail” and that the dangerous conditions in the two cases were fundamentally different. The court also distinguished Leyva despite the fact that the hazardous condition in Leyva was off the trail and independent of it. The court concluded that the recreational trail immunity did not apply, holding that “this is not a case about trails. It is about trees.”

Impact on Public Agencies

Leyva still has some precedential value, but by tacitly disapproving that case, the Garcia and Toeppe cases seem to establish a new paradigm that limits public agency immunity for hazardous conditions
adjacent to recreational trails. Accordingly, public agencies may need to reassess the design, insurance, maintenance and use of their trails to minimize the risk of liability.

If you have any questions about these decisions or trail immunity in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

William P. Curley III

Partner

Arne B. Sandberg

Senior Counsel

©2017 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

New School Funding Scheme Does Not Eliminate Immunity From Federal Damage Claims

August 2017
Number 46

Changes to California’s school funding scheme did not eliminate local school district and county office of education immunity from federal claims for damages, the Ninth Circuit Court of Appeals has ruled.

In Sato v. Orange County Department of Education (9th Cir. 2017) ___ F.3d ___, the Ninth Circuit affirmed that California school districts and county offices of education retain their absolute defense to claims for damages in federal court due to sovereign immunity under the United States Constitution’s Eleventh Amendment, regardless of changes to California’s school funding scheme resulting from Assembly Bill (AB) 97’s creation of the Local Control Funding Formula (LCFF).

The Eleventh Amendment

The Eleventh Amendment bars federal lawsuits for damages against California and “arms of the state.” While the Eleventh Amendment “sovereign immunity” defense does not extend to counties and municipal corporations, it does extend to California community college districts, school districts, and county offices of education.

Background

Michael Sato was a systems database architect for the Orange County Department of Education (OCDE). After OCDE fired Sato within weeks of starting his job, he filed a federal lawsuit alleging breach of contract, wrongful termination and various federal constitutional claims. The district court granted OCDE’s motion to dismiss Sato’s constitutional claims for damages based on its sovereign immunity under the Eleventh Amendment. Sato subsequently dismissed his state law breach of contract claim voluntarily and appealed the dismissal of his federal claims to the Ninth Circuit, which affirmed the district court’s ruling and held that AB 97 did not abrogate sovereign immunity for school districts and county offices of education as previously established inBelanger v. Madera Unified School District (9th Cir. 1992) 963 F.2d 248 and Eaglesmith v. Ward (9th Cir. 1996) 73 F.3d 857.

The central question before the Ninth Circuit in Sato was whether, after AB 97’s establishment of the LCFF, school districts and county offices of education retained their status as “arms of the state” entitled to Eleventh Amendment immunity. In concluding that such entities, including OCDE, remain arms of the state, the court analyzed five factors:

  • Whether a money judgment would be satisfied out of state funds;
  • Whether the entity performs central governmental functions;
  • Whether the entity may sue or be sued;
  • Whether the entity has the power to take property in its own name or only the name of the state; and
  • The corporate status of the entity.

Since state and local revenue for schools remain commingled in a single fund under state control, even under the new funding system, the court determined that any use of commingled funds to satisfy a judgment necessarily amounts to the use of state funds. The court also held that OCDE performs central government functions, relying on prior case law that says that California law treats public schooling as a statewide or central government function. The court held that the first and second factor weighed in favor of Eleventh Amendment immunity and that AB 97 did not impact the analysis of the remaining three factors.

Applying the five-factor test, the Ninth Circuit upheld the trial court’s decision and found that AB 97, which significantly reformed the financing and governance of California public schools, did not change the fact that school districts and county offices of education remain entitled to sovereign immunity under the Eleventh Amendment, thus barring claims for damages against them in federal court-whether based upon state or federal law.

Takeaways

Sato presented a novel argument: that the passage of AB 97, which reformed public education financing and decentralized education governance, abrogated previous Ninth Circuit decisions supporting that school districts and county offices of education are entitled to state sovereign immunity. However, the court held in Sato that school districts and county offices of education remain arms of the state and cannot be sued for damages in federal court.

The Eleventh Amendment defense for California’s community college districts also remains undisturbed by the Sato opinion.

Lozano Smith represented the Madera Unified School District in theBelanger case, which first established Eleventh Amendment immunity for California school districts facing damage claims in federal court.

For more information on the Sato decision or on school district and county office of education immunity from federal damage claims, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

Sloan R. Simmons

Partner

Lauren A. Lymen

Associate

©2017 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.