1 Malinda Dickenson (State Bar No.

222564)
THE PROTECT OUR COMMUNITIES FOUNDATION
2 4452 Park Blvd., Suite 309
San Diego, California 92116
3 Telephone: (619) 693-4788
Email: [email protected]
4
Winter King (State Bar No. 237958)
5 SHUTE, MIHALY & WEINBERGER LLP
396 Hayes Street
6 San Francisco, California 94102
Telephone: (415) 552-7272
7 Facsimile: (415) 552-5816
Email: [email protected]
8
Attorneys for Petitioner The Protect Our Communities Foundation
9

10
SUPERIOR COURT OF THE STATE OF CALIFORNIA
11
COUNTY OF SAN DIEGO
12

13

14 THE PROTECT OUR COMMUNITIES CASE NO. 37-2021-00029833-CU-WM-CTL

FOUNDATION, a California nonprofit
15 corporation, PETITIONER’S REPLY BRIEF IN
SUPPORT OF VERIFIED PETITION
16 Petitioner, FOR WRIT OF MANDATE
UNDER THE CALIFORNIA
17 v. ENVIRONMENTAL QUALITY ACT,
THE SAN DIEGO CITY CHARTER,
18 CITY OF SAN DIEGO, a municipal THE CALIFORNIA CONSTITUTION,
corporation; and DOES 1-100, AND OTHER LAWS
19
Respondent(s). IMAGED FILE
20
SAN DIEGO GAS & ELECTRIC COMPANY, Judge: Hon. Katherine Bacal
21 a California corporation; and ROES 101-200, Department: C-69
Real Parties In Interest(s). Petition filed: July 12, 2021
22 Writ hearing: November 18, 2022
23

24

25

26

27

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REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE

Case No. 37-2021-00029833-CU-WM-CTL
 1 TABLE OF CONTENTS
Page
2
I. INTRODUCTION ...........................................................................................................................8
3
II. RESPONDENTS CONCEDE THE STANDARD OF REVIEW AND PRODUCE LATE
4 EVIDENCE THAT CONTRADICTS THEIR ARGUMENTS. .....................................................9

5 III. CITY VIOLATED THE CALIFORNIA CONSTITUTION BY IMPOSING TAXES

WITHOUT A VOTE OF THE PEOPLE. ......................................................................................10
6
A. Exemption (e)(1) Does Not Apply Because San Diego Residents Pay the Charges,
7 While SDG&E Receives the “Privilege Granted” (the Franchises). .................................11

8 B. Exemption (e)(4) Does Not Apply Because the Residents Paying the Charges Do
Not Enter and Use Local Government Property as Prop. 26 Requires. .............................12
9
C. City Has Not Met Its Burden to Show that the Charges Are Reasonably Related to
10 the Benefits San Diegan Payors Actually Receive. ...........................................................13

11 IV. RESPONDENTS ADMIT SDG&E RECEIVED SPECIAL TREATMENT IN THE

PUBLIC BIDDING PROCESS AND CANNOT REFUTE KEY FACTS THAT
12 ESTABLISH OTHER CHARTER VIOLATIONS. ......................................................................16

13 A. SDG&E Does Not Possess a “Constitutional Franchise” and Has Already

Dedicated Its Infrastructure to Public Use. ........................................................................17
14
B. Regardless of Any Differences Among Potential Bidders, City’s Charter Requires
15 a Level Playing Field. ........................................................................................................18

16 C. The Changes Made After SDG&E Submitted Its Bid Provide Additional Evidence
that the Bidding Process Was Anti-Competitive. ..............................................................19
17
D. City May Not Adopt Franchise Terms that Violate the Charter as It Did Here Just
18 Because the Franchises Are “Contracts.” ..........................................................................20

19 E. Respondents Do Not and Cannot Refute the Facts Establishing that City
Impermissibly Allowed SDG&E to Veto Significant City Policy Objectives. .................22
20
F. Respondents Fail to Address Petitioner’s Claim that the Franchises Violate the
21 Charter’s Prohibition on the Imposition of Special Taxes. ................................................23

22 V. RESPONDENTS CONTINUE TO MISCONSTRUE CEQA’S MANDATES. ...........................23

23 A. City’s Final Approval of the 20-Year Franchises Is a Project Subject to CEQA. .............23

24 1. The Franchises Have the “Potential for Causing Environmental Change.” ..........24

25 2. The Franchises Are Neither Indefinite Nor Preliminary........................................26

26 B. The CEQA exemptions cited by Respondents do not apply. .............................................28

27 C. Respondents Tacitly Concede that the PEIR for the Climate Action Plan Did Not
Analyze the Impacts of the Franchises and that City Never Prepared an Initial
28 Study as Required by CEQA Section 21094. ....................................................................30
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REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 VI. THE COURT HAS THE AUTHORITY TO FASHION AN EQUITABLE REMEDY ON
EACH OF PETITIONER’S CLAIMS THAT ENSURES COMPLIANCE WITH THE
2 LAW; AND SAN DIEGANS WILL CONTINUE TO RECEIVE GAS AND ELECTRIC
SERVICE AS A MATTER OF LAW. ..........................................................................................30
3
VII. CONCLUSION ..............................................................................................................................32
4

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

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Case No. 37-2021-00029833-CU-WM-CTL
 1 TABLE OF AUTHORITIES

2 Page(s)
3 Federal Cases

4 Russell v. Sebastian (1914)

5 233 U.S. 195 ............................................................................................................................17

6 California Cases

7 Association for a Cleaner Environment v. Yosemite Community College Dist. (2004)

116 Cal.App.4th 629 ................................................................................................................29
8
Avco Community Developers, Inc. v. South Coast Regional Com. (1976)
9 17 Cal.3d 785 ...........................................................................................................................22
10 Baldwin-Lima-Hamilton Corp. v. Superior Court (1962)

11 208 Cal.App.2d 803 .................................................................................................................19

12 Banning Ranch Conservancy v. City of Newport Beach (2017)

2 Cal.5th 918 ............................................................................................................................27
13
Barnett v. Delta Lines, Inc. (1982)
14 137 Cal.App.3d 674 .................................................................................................................30
15 Bridges v. Mt. San Jacinto Community College Dist. (2017)

16 14 Cal.App.5th 104 ..................................................................................................................26

17 California Unions for Reliable Energy v. Mojave Desert Air Quality Management Dist.
(2009)
18 178 Cal.App.4th 1225 ..............................................................................................................28

19 Cedar Fair, L.P. v. City of Santa Clara (2011)

194 Cal.App.4th 1150 ..............................................................................................................27
20
Center for Biological Diversity v. Department of Fish & Wildlife (2015)
21
62 Cal.4th 204 ..........................................................................................................................25
22
Chung v. City of Monterey Park (2012)
23 210 Cal.App.4th 394 ................................................................................................................27

24 Citizens for Amending Proposition L v. City of Pomona (2018)

28 Cal.App.5th 1159 ................................................................................................................21
25
Citizens to Enforce CEQA v. City of Rohnert Park (2005)
26 131 Cal.App.4th 1594 ..............................................................................................................27
27
City & County of San Francisco v. Market Street Railway Company (1937)
28 9 Cal.2d 743 .............................................................................................................................11
4
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Case No. 37-2021-00029833-CU-WM-CTL
 1 City of Irvine v. County of Orange (2013)
221 Cal.App.4th 846 ................................................................................................................27
2
City of Perris v. Stamper (2016)
3 1 Cal.5th 576 ............................................................................................................................18
4
City of San Diego v. Southern Cal. Tel. Co. (1949)
5 92 Cal.App.2d 793 ...................................................................................................................17

6 City of Santa Cruz v. Pacific Gas & Electric Co. (2000)

82 Cal.App.4th 1167 ................................................................................................................18
7
City of Santee v. City of San Diego (1989)
8 214 Cal.App.3d 1438 ...............................................................................................................31
9 County of Amador v. City of Plymouth (2007)

10 149 Cal.App.4th 1089 ..................................................................................................24, 27, 31

11 County of Butte v. Department of Water Resources (2022)

13 Cal.5th 612 ..........................................................................................................................25
12
Eel River Disposal & Resource Recovery, Inc. v. County of Humboldt (2013)
13 221 Cal.App.4th 209 ................................................................................................................32
14 Friends of the Sierra Railroad v. Tuolumne Park & Recreation Dist. (2007)

15 147 Cal.App.4th 643 ................................................................................................................28

16 Howard Jarvis Taxpayers Assn. v. City of Roseville (2003)

106 Cal.App.4th 1178 ........................................................................................................20, 23
17
Jacks v. City of Santa Barbara (2017)
18 3 Cal.5th 248 ......................................................................................................................12, 14
19 Kajima/Ray Wilson v. Los Angeles County Metropolitan Transp. Authority (2000)
23 Cal.4th 305 ..........................................................................................................................32
20

21 Konica Business Machines U.S.A., Inc. v. Regents of Univ. of California (1988)

206 Cal.App.3d 449 ...........................................................................................................19, 19
22
Laurel Heights Improvement Assn. v. Regents of Univ. of California (1988)
23 47 Cal.3d 376 ...........................................................................................................................31
24 Mahon v. City of San Diego (2020)
57 Cal.App.5th 681 ............................................................................................................12, 14
25
McCann v. City of San Diego (2021)
26
70 Cal.App.5th 51 ....................................................................................................................30
27
Monterey Mechanical Co. v. Sacramento Regional County Sanitation Dist. (1996)
28 44 Cal.App.4th 1391 ................................................................................................................32
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Case No. 37-2021-00029833-CU-WM-CTL
 1 Monterey Peninsula Taxpayers Assn. v. County of Monterey (1992)
8 Cal.App.4th 1520 ..................................................................................................................32
2
Newhall County Water Dist. v. Castaic Lake Water Agency (2016)
3 243 Cal.App.4th 1430 ..............................................................................................................32
4
North Coast Rivers Alliance v. Westlands Water Dist. (2014)
5 227 Cal.App.4th 832 ................................................................................................................29

6 Parchester Village Neighborhood Council v. City of Richmond (2010)

182 Cal.App.4th 305 ................................................................................................................27
7
POET, LLC v. State Air Resources Bd. (2013)
8 218 Cal.App.4th 681 ................................................................................................................31
9 Preserve Wild Santee v. City of Santee (2012)

10 210 Cal.App.4th 260 ................................................................................................................31

11 Richfield Oil v. Pub. Utilities Com. (1960)

54 Cal. 2d 419 ..........................................................................................................................18
12
S. California Gas Co. v. City of Los Angeles (1958)
13 50 Cal.2d 713 ...........................................................................................................................22
14 San Diegans for Open Government v. City of San Diego (2018)

15 31 Cal.App.5th 349 ..................................................................................................................29

16 Santa Barbara County Taxpayer Assn. v. Bord of Supervisors (1989)

209 Cal.App.3d 940 .................................................................................................................11
17
Save Our Carmel River v. Monterey Peninsula Water Management Dist. (2006)
18 141 Cal.App.4th 677 ................................................................................................................28
19 Save Our Schools v. Barstow Unified School Dist. Bd. of Education (2015)
240 Cal.App.4th 128 ................................................................................................................29
20

21 Save Tara v. City of West Hollywood (2008)

45 Cal.4th 116 ..........................................................................................................................28
22
Sustainable Transportation Advocates of Santa Barbara v. Santa Barbara County Assn.
23 of Governments (2009)
179 Cal.App.4th 113 ................................................................................................................27
24
Tulare County v. City of Dinuba (1922)
25 188 Cal. 664 .............................................................................................................................11
26
Union of Medical Marijuana Patients, Inc. v. City of San Diego (2019)
27 7 Cal.5th 1171 ....................................................................................................................23, 27

28
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Case No. 37-2021-00029833-CU-WM-CTL
 1 Zolly v. City of Oakland (2022)
13 Cal.5th 780 .................................................................................................................. passim
2
California Statutes and Regulations
3
CEQA Guidelines, Cal. Code Regs., Title 14
4
§15064.4(b) ..............................................................................................................................25
5 §15301(b) .................................................................................................................................28
§15302(c)&(d) .........................................................................................................................28
6 §15303(d) .................................................................................................................................28
§15378(a) .................................................................................................................................26
7
Pub. Resources Code
8 § 21065.....................................................................................................................................26
9 § 21094(c) ................................................................................................................................30
§ 21168.9..................................................................................................................................31
10
Pub. Util. Code
11 § 451.........................................................................................................................................31
§ 851.........................................................................................................................................31
12 § 1004.......................................................................................................................................18
13
Constitutional Provisions
14
California Constitution
15
Art. XIIIC, § 1 ..........................................................................................................................13
16 Art. XIIIC, § 1, subd. (d) .........................................................................................................23
Art. XIIIC, § 1, subd. (e) ..........................................................................................................11
17
California Constitution of 1879, as amended in 1885
18
Art. XI, § 19 .............................................................................................................................17
19
San Diego City Charter Provisions
20

21 Charter § 11..............................................................................................................................29
Charter § 11.1...........................................................................................................................29
22 Charter § 15........................................................................................................................16, 20
Charter § 76..............................................................................................................................23
23 Charter § 94..............................................................................................................................29
Charter § 99..............................................................................................................................21
24 Charter § 100............................................................................................................................29
25 Charter § 103............................................................................................................................20
Charter § 103.1.........................................................................................................................29
26 Charter § 104......................................................................................................................20, 21

27

28
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Case No. 37-2021-00029833-CU-WM-CTL
 1 I. INTRODUCTION

2 Real Party in Interest SAN DIEGO GAS & ELECTRIC COMPANY (“SDG&E”) and

3 Respondent CITY OF SAN DIEGO (“City”) (together “Respondents”) utterly fail to meet their burden

4 to show that the charges imposed upon City residents as a result of the Franchises – the 3% Charge, the

5 Electric Franchise Fee Surcharge, the Municipal Undergrounding Surcharge, and the Gas Franchise Fee

6 Surcharge (collectively, “Charges”) – are anything other than unconstitutional taxes. The only evidence

7 before this Court demonstrates that the Charges do not fall within any of the exemptions to the definition

8 of “tax” under Proposition 26, as those exemptions were clarified by the Supreme Court in Zolly v. City

9 of Oakland (“Zolly”) (2022) 13 Cal.5th 780. City’s approval of the Franchises thus violated Article XIIIC

10 of the California Constitution, and the voter approval requirements of its own San Diego City Charter

11 (“Charter”), and thus are void.

12 Moreover, no dispute exists that City’s invitations to bid (“ITB”) treated SDG&E more favorably

13 than all other potential bidders: incredibly, Respondents argue in their brief that SDG&E was entitled to

14 more favorable treatment. In reality, the law prohibits City from stacking the deck in favor of SDG&E –

15 monopoly or not. Respondents also belatedly present evidence that further proves that the unlawful

16 franchise terms that City agreed to were the immediate result of SDG&E’s unlawful threats to withhold

17 payments due under its prior franchises.

18 And Respondents continue to misconstrue the legal mandates of the California Environmental

19 Quality Act (“CEQA”) and improperly claim that they could cure their CEQA violations while leaving

20 the improper franchise approvals in place.

21 Complete relief in this case requires voiding of the illegal ordinances awarding gas and electric

22 franchises to SDG&E (“Franchises”), and a writ of mandate on each of Petitioner’s claims to ensure that

23 City: (1) does not impose taxes without voter approval; (2) provides for open and free public bidding; (3)

24 refrains from agreeing to franchise terms that violate the Charter and its police power obligations; and

25 (4) complies with the legal mandates of CEQA.

26

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Case No. 37-2021-00029833-CU-WM-CTL
 1 II. RESPONDENTS CONCEDE THE STANDARD OF REVIEW AND PRODUCE LATE
EVIDENCE THAT CONTRADICTS THEIR ARGUMENTS.
2
Respondents do not dispute the standard of review and the associated burden of proof they bear.
3
(Petitioner’s Opening Brief (“POB”), pp. 18-20.) Nor do Respondents deny that City was forced to
4
“negotiate” the Franchises under threat by SDG&E that it would stop paying franchise fees if a deal was
5
not reached before the then-operative franchise agreements expired. (053693-053694; POB, p. 5, 6.)
6
Instead, Respondents submit late evidence in a failed attempt to show that the negotiations were fair and
7
that City extracted concessions. To the contrary, the late evidence provides even more proof of City’s
8
duress.
9
For example, the exhibits attached to the Declaration of Hollie Bierman (“Bierman Decl.”)
10
confirm that SDG&E’s unlawful threats led almost immediately to City agreeing to material, unfavorable
11
changes to the terms of the franchise ordinances. The day after SDG&E unlawfully threatened to withhold
12
millions of dollars (053690-053696), SDG&E demanded modifications to the terms of the ordinances in
13
exchange for withdrawing its threat. (Bierman Decl., Ex. C, p. 8.)
14
The Declaration of Jim W. Baker (“Baker Decl.”) claims that some of the negotiated changes
15
“were more favorable for the City than the provisions previously in the ITBs,” including “[a]llowing the
16
city to terminate the Franchises at the 10 year mark with a super-majority of the City Council” and “robust
17
and good faith negotiations resulted in the City obtaining more favorable terms on many provisions than
18
originally contemplated even by the City's own consultant to the franchise agreements, or the draft
19
agreements attached to the ITBs” (Baker Decl., ¶¶ 12, 13).
20
But, rather than including “more favorable” termination provisions, SDG&E vetoed two key terms
21
in the invitations to bid: (1) award of a second ten-year term only if “Grantee has faithfully performed all
22
conditions agreed to in the Franchise” (005795; 005922); and (2) the term expressly authorizing City to
23
retain all payments made if the franchise was terminated before the second ten-year term (005795-005796;
24
005922). SDG&E demanded instead that the second ten-year term be automatic and conditioned
25
termination of the electric franchise upon City paying money to SDG&E. (000065; 000069 [providing
26
that if Franchise is terminated prior to the 20-year term “the City shall pay Grantee the Pro Rata Partial
27
Refund Amount calculated as follows”]; see also 000021-000022.) The City Attorney explained that
28
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Case No. 37-2021-00029833-CU-WM-CTL
 1 these changes made it more difficult for City to terminate the new Franchises. (001016 [“Unlike language

2 in the ITB [], the new language requires the City to refund portions of the Bid Amount …”].)

3 Following SDG&E’s threats, City also allowed SDG&E to veto terms in the invitation to bid

4 requiring SDG&E to comply with City’s critical energy policies, including requiring maximum use of

5 distributed renewable energy and not obstructing expansion of net energy metering (a rooftop solar

6 program that allows residential and business electricity generators to send their excess electricity for use

7 by other San Diegans), and instead required compliance with only those City policies to which SDG&E

8 agreed to. (000089; 005817; 001024.)

9 The key initial bidding requirement that SDG&E commit “to support the City’s climate policies”

10 (Baker Decl., ¶ 13) was completely removed. (001024 [“Words were deleted to remove required

11 compliance with updates to the City’s 2015 Climate Action Plan…”].) The requirement that the franchisee

12 cooperate with Climate Action Plan goals to reduce GHG emissions “to the fullest extent practical” was

13 weakened by eliminating the word “fullest” (000021, 000064-65) and by deleting language requiring

14 SDG&E’s compliance with City’s Climate Action Plan updates and related climate change goals. (See

15 POB, pp. 7-9.)

16 With respect to the Energy Cooperation Agreement (Baker Decl., ¶13), SDG&E demanded that it

17 be allowed to change the agreement (000091; 001024), and the specific terms of the Energy Cooperation

18 Agreement were tabled to a yet-to-be written “Implementation Plan” that had never been presented to the

19 City Council (000120-000121). And, far from benefitting City, changes were made regarding SDG&E’s

20 “responsibility for relocation expenses for City projects” (Baker Decl., ¶13) that “prevent the City from

21 directing relocations before it has substantially complete designs and may have cost and scheduling

22 implications for the City.” (001018.)

23 III. CITY VIOLATED THE CALIFORNIA CONSTITUTION BY IMPOSING TAXES

WITHOUT A VOTE OF THE PEOPLE.
24
The Franchises authorize SDG&E to impose a number of charges on San Diego residents and
25
businesses (i.e., utility service ratepayers) including: the 3% Charge, the Electric Franchise Fee Surcharge,
26
the Municipal Undergrounding Surcharge, and the Gas Franchise Fee Surcharge. These Charges constitute
27
an illegal tax under Proposition 26 because they were imposed by City without voter approval, and do not
28
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Case No. 37-2021-00029833-CU-WM-CTL
 1 fall under any of the exemptions to the definition of “tax” contained in Article XIIIC. (POB, pp. 40-45;

2 Zolly, 13 Cal.5th at 791-96.)

3 Respondents do not contend that the second, third, fifth, sixth, or seventh enumerated exemptions

4 in Article XIIIC apply here. (Respondents’ Joint Response Brief (“RB”), pp. 50-53; Cal. Const. art. XIIIC,

5 § 1, subds. (e)(2), (3), (5), (6), (7).) Nor do they dispute that City imposed the Charges. (See RB, p. 50 et

6 seq.) Instead, Respondents claim that the Charges fall within the first and fourth exemptions to the

7 definition of tax because (1) franchise fees have historically not been considered taxes; and (2) SDG&E

8 pays for the Charges and receives the benefit of the use of City streets. (See e.g. RB, pp. 48-49 [“franchise

9 fees are the purchase price for franchises in order to obtain the right to use the public streets”].) These

10 claims are baseless.

11 Respondents’ claim that the fees have “historically” not been considered taxes relies on cases that

12 pre-date not only Proposition 26 but also Proposition 218 and even Proposition 13 and thus are inapposite.

13 (RB, pp. 12, 48-49 [citing to Tulare County v. City of Dinuba (1922) 188 Cal. 664, City & County of San

14 Francisco v. Market Street Railway Company (1937) 9 Cal.2d 743, Santa Barbara County Taxpayer Assn.

15 v. Bord of Supervisors (1989) 209 Cal.App.3d 940]; see Zolly, 13 Cal.5th at 785-86 [discussing history of

16 Constitutional amendments since Proposition 13 passed in 1978].) And, as discussed below (Section

17 III.A), Respondents’ argument that SDG&E pays the Charges directly contradicts the facts and the law.

18 A. Exemption (e)(1) Does Not Apply Because San Diego Residents Pay the Charges,
19 While SDG&E Receives the “Privilege Granted” (the Franchises).
Proposition 26 defined “tax” broadly as “any levy, charge, or exaction of any kind imposed by a
20
local government” and then provided seven narrow exemptions to the definition of a tax. (Cal. Const. art.
21
XIIIC, § 1(e).) Exemption (e)(1) covers “charge[s] imposed for a specific benefit conferred or privilege
22
granted directly to the payor that is not provided to those not charged, and which does not exceed the
23
reasonable costs to the local government of conferring the benefit or granting the privilege.”
24
Respondents’ err in claiming that the Charges are exempt under Section (e)(1) because: SDG&E
25
is not paying the Charges, and thus the Charges are not imposed for a privilege granted by City to the
26

27

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Case No. 37-2021-00029833-CU-WM-CTL
 1 payor; and the record contains no evidence to support the claim that the Charges are reasonable in light

2 of the cost to City to provide the Franchises.1

3 Respondents erroneously cite to Jacks v. City of Santa Barbara (“Jacks”) (2017) 3 Cal.5th 248,

4 to argue that “SDG&E is the payor of the Franchise fees.” (RB, pp. 52-53.) However, as the Fourth

5 District Court of Appeal has explained, the Supreme Court in Jacks “expressly rejected the … argument

6 that it was the utility, rather than its ratepayers, that paid the surcharge.” (Mahon v. City of San Diego

7 (2020) 57 Cal.App.5th 681, 705, fn. 36, citing Jacks, 3 Cal.5th at p. 270 [agreement’s terms “belie the

8 contention that [the utility] assumed a burden to pay the surcharge”].) Similarly here, the terms of the

9 Ordinances belie Respondents’ contention that SDG&E assumed the burden to pay the Charges: each of

10 the four Charges constitute payments imposed on San Diegans. (000062, 000019 [Electric Franchise Fee

11 Surcharge and Gas Franchise Fee Surcharge defined as “the total amount of surcharges allowed by the

12 Franchise and the CPUC to be levied solely on customers in the City” (emphasis added)]; 000063

13 [defining Municipal Undergrounding Surcharge]; 000063, 000019-000020 [defining Gross Receipts used

14 for 3% Charge as “all gross operating revenues received by Grantee from the sale of gas to Grantee's

15 customers with points of service within the corporate limits of the City…plus all revenues collected from

16 CPUC-authorized surcharges rendered solely upon the ratepayers within the City…”]; 007033 [CPUC

17 Resolution E-3788: “The franchise fee surcharges should be billed and collected from all customer

18 classes.”].) Thus, both the Franchise ordinances themselves and the PUC acknowledge that all four

19 Charges are not paid by SDG&E.

20 B. Exemption (e)(4) Does Not Apply Because the Residents Paying the Charges Do Not
21 Enter and Use Local Government Property as Prop. 26 Requires.
Exemption (e)(4) covers “charge[s] imposed for entrance to or use of local government property,
22
or the purchase, rental, or lease of local government property.” (Cal. Cost. art. XIIIC, § 1(e)(4).) In Zolly,
23
decided after Petitioner’s opening brief was filed, the California Supreme Court concluded this exemption
24
applies only to “fees paid as consideration for a specific use of government property.” (Zolly, 13 Cal.5th
25

26

27

28 1
The City of Oakland did not even attempt to show that Exemption 1 applied. (Zolly, 13 Cal.5th at 796.)
12
REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
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 1 at 794.) Moreover, the Supreme Court indicated that the person paying the charge must also be the person

2 entering or using the government property:

3 The first clause of Exemption 4 refers to charges imposed for “the entrance to or
4 use of local government property,” suggesting that “local government property”
means physical land, objects, or equipment that those who pay the charge can
5 either enter or use.

6 (Id. at 793, emphasis added.)

7 The Charges at issue here cannot constitute entrance or user fees under Zolly because the San

8 Diegans paying the Charges are not paying to enter or use City streets: the plain language of the

9 Ordinances makes clear that the franchises are granted only to SDG&E “for the use of the Streets of the

10 City.” (000022, 000064.) Respondents admit that only SDG&E can use City streets for SDG&E’s

11 infrastructure and to construct new infrastructure. (RB, p. 52 [admitting the franchise fees are paid in

12 exchange for a privilege “provided directly to SDG&E and not to anyone else”].) Because SDG&E is not

13 paying the Charges at all (see Section III.B.), Exemption 4 cannot apply to the Charges imposed on San

14 Diegans.

15 C. City Has Not Met Its Burden to Show that the Charges Are Reasonably Related to
the Benefits San Diegan Payors Actually Receive.
16
Proposition 26 added the new requirements that governments bear the burden of proving a charge
17
is not a tax, and the amount of any charge totals no more than necessary to cover the reasonable costs of
18
the governmental activity and has a reasonable relationship to the benefits. (Cal. Const. art. XIIIC, § 1.)
19
Contrary to Respondents’ contention (RB, pp. 50-51), absolutely no evidence exists in the record that the
20
Charges are reasonably related to the value of the “property interest,” because the “property interest” in
21
question is not the “franchise,” as Respondents suggest, but rather the right to enter and use City streets.
22
(Zolly, 13 Cal.5th at 794.)
23
Nor would it matter if the Charges in the new Franchises were the same as the those under the
24
previous Franchise agreement.2 (RB, p. 51.) The previous Franchise agreement was adopted and amended
25

26
2
In fact, the Charges far exceed the amounts in the previous franchise. For example, the definition of
27 “gross receipts” upon which the 3% Charge is based, has been increased to include the Electric

28 Franchise Fee Surcharge, the Gas Franchise Fee Surcharge, and the Municipal Undergrounding
Surcharge, whereas under the old franchises the definition of gross receipts excluded these surcharges.
13
REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 before Proposition 26 (007111; 007129; 007048; 007042 [gas and electric franchises adopted in 1970

2 and amended in 2002]); as was the decision upholding the prior Municipal Undergrounding Surcharge

3 (Mahon, 57 Cal.App.5th at 704, fn. 34 [Proposition 26 definition of tax not before court]; see also Jacks,

4 3 Cal.5th at 263, fn. 6 [“Proposition 26’s exception from its definition of ‘tax’ with respect to local

5 government property is not before us.”]). Here, it is undisputed that Proposition 26 applies. (000055;

6 000105.)

7 In Zolly, the Supreme Court did not address whether “Exemption 4 should be interpreted to

8 include a requirement that an exempt fee be ‘reasonably related to the value of the franchise’” because

9 Oakland had not demonstrated that Exemption 4 applied to the challenged fees (Zolly, 13 Cal.5th at 796),

10 and this Court can do the same. The Supreme Court did, however, provide direction as to the relevant

11 factors courts should consider when deciding the “reasonable costs” language in Exemption 1.

12 Specifically, the Supreme Court cited to Jacks’ language explaining “how a ‘reasonable value’

13 requirement ‘fit[s] within’ the historical approach to distinguishing between taxes and other charges,

14 including the ‘broader focus on the relationship between a charge and the rationale underlying the

15 charge.’” (Id. at 796, quoting Jacks, 3 Cal.5th at 262, 269.) As Jacks explained, franchise fees cannot

16 validly act as a vehicle for generating general revenue independent of the “purpose of the fees”:

17 Just as the amount of fees imposed to compensate for the expense of providing government
18 services … must bear a reasonable relationship to the costs and benefits that justify their
imposition, fees imposed in exchange for a property interest must bear a reasonable
19 relationship to the value received from the government. To the extent a franchise fee
exceeds any reasonable value of the franchise, the excessive portion of the fee does not
20 come within the rationale that justifies the imposition of fees without voter approval.
Therefore, the excessive portion is a tax. If this were not the rule, franchise fees would
21
become a vehicle for generating revenue independent of the purpose of the fees.
22 (Jacks, 3 Cal.5th at 269.)

23 By City’s own admission, that is exactly what the Charges are: “a vehicle for generating revenue

24 independent of the purpose of the fees.” (Ibid.) The Charges that are not paid by SDG&E constitute the

25

26

27 (00019-20; 000063; 007049; 007044 [same language in 2002 electric franchise amendment]; 007112

28 [1970 gas franchise not including any surcharges in the definition of “gross receipt”]; 007130 [same for
1970 electric franchise].)
14
REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 bulk of the total payments to City, generating approximately $130 million annually. (008415.) As City

2 staff explained, losing the franchise fee would result in major budget cuts:

3 [W]e’ve identified a number of areas that we’d have to bring back to the city council,
4 totaling about 60 million worth of potential budget cuts. Ranging from anything from
some of the homeless programs to infrastructure, Climate Equity Fund funding would
5 most likely be reduced from the budget, library hours, both some of the addition to the
library in terms of the material budget as well as the hours that are being restored in the
6 Mayor's May revise. And then some smaller dollar amounts being areas such as tree
trimming, brush removal, brush management, and so forth. Short of decimating whole
7
departments, those are some of the areas that we'd be presenting back to the city council
8 to identify essentially roughly $60 to $70 million worth of budget cuts.
(001568-001569; see also 000883 [“In accordance with the City Charter, 75% of the [Electric and Gas
9
Franchise fee] revenue…is allocated to the General Fund…”]; Respondents’ Request for Judicial Notice
10
(“RJN”), p. E-020 [same].) Respondents clearly admit that the Charges have become a vehicle for
11
generating revenue for programs having nothing to do with gas and electric service - like libraries and
12
homeless programs. While these programs are certainly important, they cannot be paid for with funds
13
generated through charges imposed on City’s utility ratepayers that were never approved by voters.
14
Barring taxation without voter approval was exactly the point of Proposition 26. (Zolly, 13 Cal.5th at
15
794.)
16
Respondents fail to counter this argument, instead arguing that the franchise fees were reasonable
17
in relation to other franchise fees, or in relation to the value of the franchise. But Zolly made clear that
18
Respondents’ focus does not comprise the relevant question for determining whether a franchise fee is a
19
tax: “[a]lthough a franchise becomes a property interest that vests in the holder once granted, it does not
20
exist as the local government’s property prior to that vesting.” (Zolly, 13 Cal.5th at 794.) The real question
21
is whether the Charges were reasonably related to the cost of allowing those who pay the Charges to enter
22
and use City streets. The record evidence shows that the Charges have no relationship whatsoever to that
23
cost – and that those who pay are granted no rights to the enter and use City streets whatsoever. Moreover,
24
the Ordinances themselves establish that the Charges far exceed the reasonable value of any utility service
25
benefits that the San Diego payors of the Charges receive. (002269 [fn. 40: only 42% of SDG&E’s
26
ratepayers are located within the City]; 000021, 000064 [San Diego-based customers pay for SDG&E’s
27
use of the City’s streets to provide utility service for persons outside the City’s jurisdictional limits].)
28
15
REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 Respondents attempt to distinguish Zolly by arguing that the City of Oakland “disregarded

2 recommendations from the City’s Public Works Department” whereas here the Ordinances are

3 “consistent with” the recommendations by JVJ Pacific Consulting LLC (“JVJ report”). (RB, pp. 51-52,

4 citing to JVJ report at 002240-002312.)

5 Not so. Far from acting consistently with the JVJ report,3 City disregarded entirely the report’s

6 core recommendation: that “if the franchises contained in the City’s Invitation to Bid are not promptly

7 accepted by a responsible bidder without material change, the City should proceed with the formation of

8 both electric and natural gas utilities...” (002249.) Although it is undisputed that SDG&E did not promptly

9 accept the franchises without material changes (006028 [finding original bids “unresponsive” based on

10 changes to “material terms of the advertised franchises”]), City did not proceed with the formation of

11 municipal utilities. Rather, it began a new bid process after SDG&E unlawfully threatened City with

12 financial losses of $130 million per year and “years of expensive litigation.” (008415.)

13 IV. RESPONDENTS ADMIT SDG&E RECEIVED SPECIAL TREATMENT IN THE PUBLIC

BIDDING PROCESS AND CANNOT REFUTE KEY FACTS THAT ESTABLISH OTHER
14 CHARTER VIOLATIONS.

15 Respondents’ primary argument to Petitioner’s Charter violation claim boils down to the assertion

16 that it was perfectly okay to stack the decks in favor of SDG&E; that just recognizes “reality.” (RB, pp.

17 44.) But the Charter does not allow such favoritism, and Respondents’ “reality” is based on a

18 misunderstanding of the law. The Charter requires that: (1) franchises must be competitively bid, City

19 must avoid favoring one bidder over another, and franchises may be granted only after “an opportunity

20 for free and open competition” has been given (Charter §§ 94, 99, 100, 103); (2) only the City Council

21 can make City policy and set the terms and conditions of franchises (Charter §§ 11, 11.1, 103.1); and (3)

22 the terms and conditions of franchises must adhere to the Charter’s express mandate that franchises remain

23 terminable whenever necessary to the public welfare (Charter §§ 11, 11.1, 103.1, 104) by a City Council

24 majority vote (Charter § 15). Respondents do not and cannot refute Petitioner’s argument that the

25 Franchise Agreements violated these provisions as a matter of fact and law.

26

27 Notably, SDG&E’s position in its brief to this Court regarding the JVJ report differs dramatically from
3

28 its position when it was attempting to strong-arm the City Council, where it asserted that the JVJ report
relied on a NewGen study that was not an appraisal or valuation. (008421.)
16
REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 A. SDG&E Does Not Possess a “Constitutional Franchise” and Has Already Dedicated
Its Infrastructure to Public Use.
2
Respondents admit that the bidding process was tilted in SDG&E’s favor, but argue that this
3
differential treatment was fair because SDG&E was in a different situation than all other bidders:
4
according to Respondents, SDG&E had a “constitutional franchise” and owns all the current utility
5
infrastructure. (RB, p. 43.) Respondents are wrong because (1) SDG&E does not possess any
6
constitutional franchise; and (2) the value of property SDG&E has dedicated to the public does not
7
differentiate SDG&E from other potential bidders that would also be required to dedicate infrastructure
8
to the public.
9
The constitutional franchise offered by Section 19 of Article 11 of the California Constitution of
10
1879, as amended in 1885, read as follows:
11
In any city where there are no public works owned and controlled by the municipality for
12 supplying the same with water or artificial light, any individual, or any company duly
13 incorporated for such purpose, under and by authority of the laws of this state, shall…have
the privilege of using the public streets and thoroughfares thereof, and of laying down
14 pipes and conduits therein, and connections therewith, so far as may be necessary for
introducing into and supplying such city and its inhabitants either with gaslight or
15 other illuminating light….
16 (Russell v. Sebastian (“Russell”) (1914) 233 U.S. 195, 198, emphasis added.) To establish that SDG&E

17 has a “constitutional franchise,” Respondents would need to show a chain-of-title transferring a pre-1896

18 franchise to SDG&E: the 1889 City Charter provided City with control of its streets and, in 1896, the

19 provisions of City’s Charter “were made paramount and controlling…with respect to matters which are

20 municipal affairs.” (City of San Diego v. Southern Cal. Tel. Co. (1949) 92 Cal.App.2d 793, 798, 803-804,

21 disapproved on other grounds, Pacific Tel. & Tel. Co. v. City & County of San Francisco (1959) 51 Cal.2d

22 766, 776; 007165-007284.) Respondents failed to present any chain-of-title documents whatsoever.

23 Instead, the Baker Declaration declares only a “belief” that “SDG&E’s provision of gas and

24 electric services in the City dates back to 1881” (Baker Decl., ¶4), and that it “obtained and operated a

25 constitutional franchise by providing gaslight and illuminating light to San Diego residents prior to 1911.”

26 (Id., ¶8.) However, Mr. Baker’s “belief” about something that purportedly happened 140 years ago does

27 not constitute evidence that SDG&E possesses a constitutional franchise. (See Evidentiary Objections,

28
17
REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 filed herewith.) No evidence before this Court shows that any company accepted the Constitutional offer

2 by “laying down pipes and conduits therein, and connections therewith.” (Russell, 233 U.S. at 206-07.)

3 Nor does Mr. Baker’s declaration provide proof of an attempt to transfer a constitutional franchise

4 from any company to San Diego Consolidated Gas & Electric Company, or from San Diego Consolidated

5 Gas & Electric Company to SDG&E. (City of Santa Cruz v. Pacific Gas & Electric Co. (2000) 82

6 Cal.App.4th 1167, 1181 [“An essential ingredient of this chain-of-title evidence is an effective transfer

7 from the owner of a constitutional franchise.”].)4

8 Nor does the supposed value of SDG&E infrastructure entitle SDG&E to be treated more favorably

9 than other potential bidders. SDG&E—like all other public utility service providers in California—was

10 required to dedicate its utility infrastructure to the public in exchange for the privilege of having exclusive

11 rights to provide electricity services. (Richfield Oil v. Pub. Utilities Com. (1960) 54 Cal.2d 419, 425

12 [dedication required as “a prerequisite to public utility regulation”]; City of Perris v. Stamper (2016) 1

13 Cal.5th 576, 603 [discussing condemnation valuation of property required to be dedicated to the public];

14 POB, p. 6).5 Respondents do not and cannot refute this legal reality. SDG&E’s claim of ownership of

15 property dedicated to the public (who paid SDG&E for the infrastructure plus profits) does not entitle it

16 to more favorable treatment than any other potential future owner.

17 B. Regardless of Any Differences Among Potential Bidders, City’s Charter Requires a

18 Level Playing Field.
Even if Respondents could show that SDG&E possessed a constitutional franchise—which they
19
cannot—that would not excuse the unfair bidding process set up by City. Charter Sections 94, 100, and
20
103 require free and open competition and that City must avoid favoritism. In the words of City’s
21
Attorney, full and fair competitive bidding requires “a common standard and must be free of any
22

23
Notably, Mr. Baker declines to declare that San Diego Gas Company was SDG&E’s predecessor in
4

24 interest of any franchise rights. (Baker Decl., p. 2, ¶¶ 4, 5.)

25 The ITB also gives SDG&E a leg up by assuming it has a “Certificate of Public Convenience and
5

Necessity” (“CPCN”) from the CPUC. (ROB, p. 15). Respondents do not show that SDG&E in fact
26 possesses a CPCN. (See POB, pp. 5-6.) To the contrary, the only CPCN in the record grants SDG&E
only “the rights and privileges” granted by the 1970 franchise ordinances and thus would not be
27 effective under a new franchise. (007101-007110; 007124; 007133; 007154-007155.) No other CPCN

28 exists in the record. (Cf. Pub. Util. Code, § 1004 [CPCN requires proof of “the required consent,
franchise, or permit” from the appropriate public authorities].)
18
REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 restrictions tending to stifle competition.” (002509 [City Attorney Report dated August 4, 2020, citing

2 Konica Business Machines U.S.A., Inc. v. Regents of Univ. of California (“Konica”) (1988) 206

3 Cal.App.3d 449, 456].)

4 Here, the bidding process was far from fair. By applying one set of requirements to SDG&E, and

5 another set of requirements to all other bidders, the invitations to bid deterred potential bidders and

6 impermissibly skewed the bidding process. (POB, p. 2-5.) The process was further skewed by City’s clear

7 indication that other potential bidders would be required to either take on a dispute with SDG&E or

8 purchase its claimed rights. (See POB, p. 4; RB, p. 42.). Respondents suggest City had only two options

9 available: (1) to give more favorable terms to SDG&E than to all other potential bidders; or (2) to “ignore

10 reality” and “transgress SDG&E’s property rights.” (RB, pp. 42-43.) But the Charter requires a third

11 option: allow all bidders to bid on the same terms, which Respondents admit City did not even attempt.

12 C. The Changes Made After SDG&E Submitted Its Bid Provide Additional Evidence
13 that the Bidding Process Was Anti-Competitive.
In addition to the inherently anti-competitive nature of the terms of the invitations to bid
14
themselves, the changes made after SDG&E submitted its bids (005750-005759; 005728-005737) also
15
violate basic fair competitive bidding requirements. (Konica, 206 Cal. App. 3d at 457 [“To permit [an
16
agency] to allow deviations from precise specifications in its public call for bids leaves bidders in the
17
unfair position of having to guess what will satisfy the [agency’s] needs.”].) Konica cited with approval
18
to Baldwin-Lima-Hamilton Corp. v. Superior Court (“Baldwin-Lima”) (1962) 208 Cal.App.2d 803.
19
(Konica, 206 Cal.App.3d at 456.) Baldwin-Lima held that “the request for bids was not sufficiently definite
20
to provide for fair competitive bidding.” (Ibid.) Even though a key provision was “legally unenforceable,”
21
the bid process was still unfair because “bidders could not be reasonably expected” to know this; and
22
therefore “the language of the bid would deter persons from submitting bids…thus reducing the number
23
of bidders and defeating the objectives of competitive bidding.” (Ibid.) Here, potential bidders could not
24
have known that City would allow bidders to veto material terms of the draft ordinances (see Section
25
IV.E., infra), and thus the bidding process violated competitive bidding mandates and as required by
26
Konica and Baldwin-Lima.
27

28
19
REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 D. City May Not Adopt Franchise Terms that Violate the Charter as It Did Here Just
Because the Franchises Are “Contracts.”
2
As Petitioner demonstrated, the Franchises purport to impose two conditions that violate the
3
Charter: (1) they require a two-thirds vote to terminate the franchise for reasons other than
4
municipalization; and (2) they require monetary payments to SDG&E - without first ensuring that the
5
funds needed to make such payments will be available. (000047-48; 000097-98; 000069-71; 000025.)
6
Respondents defend the illegal termination provisions by suggesting that parties can agree to contracts
7
that violate the Charter: “the City and SDG&E were permitted to contractually agree to procedures for
8
early termination, including the requirement of a two-thirds vote for the City to exercise its right to
9
unilateral termination.” (RB, p. 45; see also id., p. 12.)6 In fact, as City’s Attorney admitted, City cannot
10
act in conflict with the Charter, and “‘[a]ny act that is violative of or not in compliance with the [C]harter
11
is void.’” (002509-10; Howard Jarvis Taxpayers Assn. v. City of Roseville (“Roseville”) (2003) 106
12
Cal.App.4th 1178, 1186, citation omitted.)
13
By failing to require a two-thirds vote to grant the second term, and instead requiring a two-thirds
14
vote to terminate after the first term (000047, 000097), City violated two Charter mandates: (1) that all
15
decision-making by the City Council proceed by majority vote unless expressly excepted from the
16
majority vote requirement, and (2) that any franchise may be terminated whenever City determines to
17
acquire utility property necessary for City’s welfare. (Charter §§ 15, 104.) In contrast to grants of
18
franchises which require a two-thirds vote pursuant to the Charter’s express terms (Charter § 103),
19
franchise terminations are effected by a simple majority vote (Charter § 104).
20
Respondents assert that requiring a two-thirds vote to terminate but not to grant the second term
21
does not violate the Charter because Section 15 provides only a “minimum” vote requirement. (RB, p.
22
45.) But where, as here, the Charter directs that Council may act by “the affirmative vote of a majority”
23
(Charter §15), a provision requiring a two-thirds vote to terminate the Franchises makes a majority vote
24
ineffective, and thus clearly conflicts with the Charter’s generally applicable majority vote requirement.
25
(Cf. Roseville, 106 Cal.App.4th at 1189-90 [majority vote ineffective when two-thirds vote required].)
26

27

28
6
Respondents’ claim that City could have just approved a 20-year term for the Franchises is a red herring because
that is not what City approved. Nor could it have. (See e.g. 001560; 001570.)
20
REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 Respondents erroneously claim that Charter Section 104 does not provide a unilateral right to

2 terminate but rather only a right of condemnation. (RB, p. 45-46.) Respondents’ construction conflicts

3 with both the plain language of the Charter and the express terms of the Franchises: the Franchises

4 expressly recognize that Charter Section 104 authorizes City to municipalize the provision of gas and

5 electric services (000048 [Section 13(e)]; 000098 [Section 15(e)]); and the Charter provides for a

6 unilateral right to terminate that is effective upon payment:

7 The Council may fix the term of each new franchise in accordance with the laws of the
8 State of California, provided that any franchise may be terminated by ordinance whenever
the City shall determine to acquire by condemnation or otherwise the property of any
9 utility necessary for the welfare of the City, such termination to be effective upon and not
before payment of the purchase price for the property to be acquired.
10
(Charter Section 104, emphasis added.) Respondents do not explain why the plain language of the Charter
11
does not mean what it says: they fail to explain why avoiding uncompensated takings could somehow
12
negate the express language mandating that all franchises be terminable “by ordinance whenever the City
13
shall determine to acquire by condemnation or otherwise the property of any utility necessary for the
14
welfare of the City.” (Charter Section 104.)
15
Respondents also erroneously argue that a “termination” constitutes an “amendment[]” and thus
16
should be treated like a “grant.” (RB, pp. 12, 45.) But courts have consistently recognized the difference
17
between contract “amendment” and termination: an amendment modifies a contract; a terminated contract
18
ceases to bind the parties. (See e.g. Citizens for Amending Proposition L v. City of Pomona (2018) 28
19
Cal.App.5th 1159, 1189.)
20
Additionally, the Franchises’ condition of termination only upon payment of money to SDG&E –
21
without first ensuring that the funds needed to make such payments will be available – also violates the
22
Charter requirement for voter approval of indebtedness or liability. (Charter § 99.) Respondents
23
erroneously argue that the Charter violation Petitioner raises “relies on assumptions about future events”
24
because City has not yet decided to terminate the Franchises after the first ten-year term. (RB, p. 46.)
25
Respondents overlook the fact that the Charter expressly requires voter approval of indebtedness or
26
liability incurred in any manner – which includes conditionally. (Charter § 99 [“City shall not incur any
27
indebtedness or liability in any manner or for any purpose exceeding in any year the income and revenue
28
provided for such year unless the qualified electors of the City, voting at an election to be held for that
21
REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 purpose, have indicated their assent…” (emphasis added)].) The plain language of the Franchises

2 condition any Franchise termination on City returning monetary contributions to its General Fund

3 (000069-00071) - funds that City expects to use to subsidize entire departments or municipal programs

4 (001568-001569).

5 E. Respondents Do Not and Cannot Refute the Facts Establishing that City
6 Impermissibly Allowed SDG&E to Veto Significant City Policy Objectives.
Respondents assert that City did not contract away its police powers in negotiating the Franchises
7
and that Petitioner “confuses negotiation with a legislative process.” (RB, p. 47.) But allowing SDG&E
8
to veto City policy and contracting away City’s police powers is exactly what the Franchises did.
9
The negotiated Franchises contradict express City policy objectives on climate change, greenhouse
10
gas emission reduction requirements, distributed energy, net energy metering, reasons for terminating the
11
Franchises, and management of City streets for undergrounding and water projects (POB, pp. 7-13, 37-
12
39; 004091, 004102, 004110, 004128, 04121); they also prevent this present Council and future councils
13
from requiring SDG&E to comply with any energy policies to which it does not agree. (POB, pp. 9, 13,
14
38; 000120-21; 001019, 001022-001023 [City Attorney reporting that the negotiated changes
15
“transform[ed] the Administrative MOU into a bilaterally negotiated instrument” from a document
16
requiring SDG&E’s compliance and gave up City’s “right to unilaterally make decisions that impact its
17
ability to manage its own undergrounding projects”].) Any contract term tying the hands of future councils
18
from establishing or enforcing City law and policy is plainly prohibited by law. (Avco Community
19
Developers, Inc. v. South Coast Regional Com. (1976) 17 Cal.3d 785, 800 [“[I]t is settled that the
20
government may not contract away its right to exercise the police power in the future.”]; S. California Gas
21
Co. v. City of Los Angeles (1958) 50 Cal.2d 713, 718 [holding “police power cannot be bargained away”].)
22
With respect to City’s police power to require utility relocations, Respondents disingenuously
23
claim that City merely agreed to “be bound by the outcome of current litigation.” (RB, p. 48.) But City
24
did not merely agree to be bound by the outcome of currently pending litigation: City abdicated its police
25
power authority over utility relocations in the streets for the entire 20 years of the Franchises (not merely
26
the water projects now being litigated). (POB, pp. 11-12; 001018-001019 [City Attorney warning of cost
27
and scheduling limitations resulting from negotiated relocation limitations, and explaining that City gave
28
22
REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 up plenary right to “determine the contract terms for cost responsibility of all relocations of Grantee

2 facilities necessitated by all City water projects from now until 2041”].)

3 F. Respondents Fail to Address Petitioner’s Claim that the Franchises Violate the
4 Charter’s Prohibition on the Imposition of Special Taxes.
Respondents do not address Petitioner’s showing that, by imposing special taxes without the two-
5
thirds vote of the people, City violated not just the California Constitution, but its own Charter as well.
6
(City Charter, § 76.) Respondents do, however, concede that the Charges were ostensibly imposed for
7
specific purposes (RB, p. 49 [Respondents arguing the Charges are paid “in exchange for the Franchise
8
rights”]; see also 000022; 000066.) As a result, the Charges constitute special taxes. (Cal. Const. art.
9
XIIIC, § 1, subd. (d) [“‘Special tax” means any tax imposed for specific purposes, including a tax…placed
10
into a general fund.”]; cf. Roseville, 106 Cal.App.4th at 1187 [utility user’s tax a special tax].)
11
V. RESPONDENTS CONTINUE TO MISCONSTRUE CEQA’S MANDATES.
12
Respondents’ CEQA arguments do not comport with CEQA’s legal mandates. City’s approval of
13
the Franchises constitutes a project under CEQA, no exemption applies, and Respondents failed to
14
conduct an initial study or otherwise show the Franchises are covered by the Program Environmental
15
Impact Report (“PEIR”) for the Climate Action Plan.
16

17 A. City’s Final Approval of the 20-Year Franchises Is a Project Subject to CEQA.

In asserting that the Franchise Approvals are not projects subject to CEQA, Respondents ignore
18
the Supreme Court’s definitive analysis and holding in Union of Medical Marijuana Patients, Inc. v. City
19
of San Diego (2019) 7 Cal.5th 1171. The Supreme Court held that if an activity “is the sort that is capable
20
of causing direct or reasonably foreseeable indirect effects on the environment, some type of
21
environmental review is justified,” and it “must be deemed a project” under CEQA. (Id. at 1198.) The
22
question of law “posed at that point in the CEQA analysis is not whether the activity will affect the
23
environment, or what those effects might be, but whether the activity’s potential for causing environmental
24
change is sufficient to justify the further inquiry into its actual effects that will follow from the application
25
of CEQA.” (Ibid.)
26

27

28
23
REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 1. The Franchises Have the “Potential for Causing Environmental Change.”

2 Respondents make no effort to demonstrate that the adoption of the Franchises and Energy

3 Cooperation Agreement, which control energy use in San Diego for the next 20 years, is not the “sort” of

4 action that might have environmental effects, because they cannot. As the Mayor’s office declared: “When

5 it comes to creating an environmentally sustainable San Diego, awarding exclusive energy franchises is

6 one of the most critical decisions the City will make.” (006025.) City’s annual power load is over 8,000

7 billion watt hours, the system serves over a million residents and businesses, and by 2035 City will expand

8 by over 200,000 new residents, nearly 80,000 housing units, and 70 million square feet of commercial

9 development. (002221; 006444; 003717.) The Franchises cover the new infrastructure and energy required

10 to serve this growth—and more—through 2041.

11 The Franchises allow SDG&E to construct new electrical infrastructure, including “major repairs

12 or construction which are expected to require substantial permitting from the City, [or] impacts to traffic

13 or surrounding properties,” as well as removal and relocation of gas pipelines and other infrastructure.

14 (00082; 075294-98; 000291 [requiring plans for “major repairs or construction” and “planned major

15 energy and gas projects”].) The exact parameters of these activities do not need to be specified for the

16 approval to qualify as a CEQA project. (County of Amador v. City of Plymouth (2007) 149 Cal.App.4th

17 1089, 1113 [City’s approval of municipal service agreement subject to CEQA].) The Franchises also set

18 new terms for the use and source of future energy. The bid process was supposed to allow City to “explore

19 all options for how we supply energy in the future.” (001801; 000296; 001561 [Councilmember objecting

20 to lack of terms “as to SDG&E’s energy procurement”; 001806 [SDG&E role to buy natural gas].) The

21 Franchises address a broad range of issues, including energy efficiency, use of renewable sources, rooftop

22 solar, energy storage, “electrification of transportation” and pollution reduction. (005781, 0005784,

23 05794.) And the Franchises’ “terms and commitments” claim to “support the City’s climate-action efforts,

24 advance climate equity, make San Diego more resilient to the impacts of climate change, modernize the

25 local energy grid, [] boost clean-energy resources,” and support its “new Climate Equity Fund” and

26 “renewable-energy integration and smart-grid innovation.” (006025-26; see also RB, pp. 15, 21-22

27 [invitation to bid required “narrative proposal” addressing “climate harm mitigation” and clean energy].)

28
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REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 Environmental review of the Franchise terms was thus essential to serve CEQA’s core

2 informational and environmental goals. CEQA “provide[s] decision makers with copious information

3 about the potential impact of a proposed project.” (County of Butte v. Department of Water

4 Resources (2022) 13 Cal.5th 612, 642.). But here the public had no information on critical issues, such as

5 whether the Franchises would help or hinder City in reducing greenhouse gas emissions in keeping with

6 its goal to achieve 100% renewable energy by 2035 and the State’s goal of achieving net zero as soon as

7 possible.

8 City specified that GHG reduction was a top public priority for any new franchise. (001436-39;

9 002223.) And, under CEQA, an agency must consider the “extent to which the project may increase or

10 reduce greenhouse gas [“GHG”] emissions,” whether emissions exceed established thresholds of

11 significance, and the “extent to which the project complies with” requirements in “a statewide, regional,

12 or local plan for the reduction or mitigation of [GHG] emissions.” (Guidelines7 § 15064.4(b); Center for

13 Biological Diversity v. Department of Fish & Wildlife (2015) 62 Cal.4th 204, 224-29 [emissions

14 significant where they failed to demonstrate reduction below “business as usual” to meet applicable

15 goals].) Yet City failed to analyze the benchmark for GHG reduction or how the Franchises might achieve

16 these goals. Members of the public requested, inter alia, stronger provisions to promote climate justice,

17 ensure “100% renewable energy,” achieve City’s zero carbon goals, and limit gas from fracking (00772-

18 73); better commitment to “wildfire safety” (000771, 000853); larger contributions to the Climate Equity

19 Fund (000771); and a stronger commitment to rooftop solar (000772); see also 000776-78.) None were

20 seriously considered. (002259 [consultant report: Sempra “is engaged in a program to perpetuate the use

21 of natural gas despite concerns that it is inconsistent with the State’s and the City’s climate action

22 objectives”].)

23 Even where the Franchises include environmentally beneficial provisions, those provisions are

24 vague and aspirational.8 Rather than ensuring the adoption of “legally enforceable” mitigation as CEQA

25

26
7
The CEQA “Guidelines” are found at Cal. Code Regs., tit. 14, § 15000 et seq.
8
See 000121 [SDG&E “plans to supplement the City’s efforts with …support for planting up to 2,500
27 trees”]; 000122 [SDG&E will “investigate the opportunity” to use diverted waste as a fuel source,”

28 “pilot” unspecified “vehicle electrification programs,” “support” electrification of municipal buildings,

“investigate” measures to “inform” its fire risk index, etc.].
25
REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 requires, the bid review process weakened critical provisions. For example, SDG&E refused to agree to

2 comply with the updates to City’s Climate Action Plan intended “to further align with national and global

3 goals” for sustainability and renewable energy. (006024; 000340.) City also allowed SDG&E to delete

4 the requirements in the invitations to bid that the franchisee reduce greenhouse gas emissions to the

5 “fullest” amount possible and refrain from opposing City’s critical energy policies. (POB, pp. 7-9, 38.)

6 And rather than occurring in an open public forum, as CEQA also requires, conflicts over environmental

7 terms were resolved in closed-doors negotiations with SDG&E. (RB, p. 51; Baker Decl.¶ 13 [rooftop

8 solar, electrification, solar expansion and climate policies resolved during closed “negotiation sessions”].)

9 2. The Franchises Are Neither Indefinite Nor Preliminary.

10 Respondents’ primary defense consists of their remarkable claim that CEQA is inapplicable

11 because City has not committed to a “particular” or “definite” course of action. (RB, pp. 28-29.) But it

12 clearly has. City approved binding contracts with SDG&E that will shape its energy use for critical

13 decades. (001437 [PCF citing reports by NOAA and UN Environment Programme regarding the urgent

14 need to focus on methane emissions reductions].) The Franchises also plan for and authorize future

15 development. (000016, 000018, 000020, 000031-32, 000037, 000059, 000062, 000064, 000076, 000082,

16 0000085, 000086.) As a result, the Franchises indisputably constitute a project subject to CEQA. (Pub.

17 Res. Code § 21065; Guidelines §§ 15378(a) [project means an activity supported “through public agency

18 contracts” or “the issuance to a person of a … entitlement for use”], 15352(b) [“approval occurs upon the

19 earliest commitment to issue or the issuance by the public agency of a discretionary contract”].)

20 Respondents’ cases are wholly inapt, as they analyze agreements that, unlike the Franchises, are

21 preliminary, non-binding, and contingent on EIR approval. (See Bridges v. Mt. San Jacinto Community

22 College Dist. (2017) 14 Cal.App.5th 104, 111, 122-24 [purchase agreement where “no funds [had] been

23 committed” that required “an EIR before the sale can be finalized”]; Cedar Fair, L.P. v. City of Santa

24 Clara (2011) 194 Cal.App.4th 1150, 1168-75 [non-binding term sheet for stadium which “binds the

25 parties to only continue negotiating in good faith” and required CEQA review before final approval].) 9

26

27 9
The other cases Respondents rely on similarly involve agency actions that are conditional, non-
28 binding, or nothing more than funding mechanisms. (See, e.g., Sustainable Transportation Advocates of
Santa Barbara v. Santa Barbara County Assn. of Governments (2009) 179 Cal.App.4th 113, 115, 122-
26
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 1 Respondents’ second defense erroneously claims that, because the Franchises have a fiscal

2 component, they are mere “fiscal activities” not subject to CEQA under Guidelines section 15378(b)(4).

3 In support, they repeatedly cite Chung v. City of Monterey Park (2012) 210 Cal.App.4th 394, 399. But

4 Chung held that a ballot measure requiring that trash service contracts be awarded through a

5 competitive bid process was not subject to CEQA because the bidding procedures constituted a “fiscal

6 activity” and it was “unknowable which companies may bid on the solid waste franchise … or what

7 significant impacts the City’s choice of service provider(s) may have.” (Id. at 402, 406.) The “appropriate

8 time for [Petitioner] to raise his environmental concerns,” the court emphasized, was “when a new

9 contract or contracts are under consideration.” (Id. at 406, emphasis added.) That is exactly when

10 Petitioner raised its concerns.

11 Respondents’ argument that future implementation “might” be subject to CEQA review (RB, pp.

12 19, 34) also fails. City ignored CEQA here and has made no commitment to preparing a future EIR. Even

13 if it had, an approval is not exempt from CEQA “‘merely because further decisions must be made’ before

14 the activities directly causing environmental change will occur.” (Medical Marijuana Patients, 7 Cal.5th

15 at 1200, citation omitted.) CEQA “defines ‘approval’ as occurring when the agency first exercises its

16 discretion to execute a contract” and environmental review must be “done early enough to serve,

17 realistically, as a meaningful contribution to public decisions.” (Save Tara v. City of West

18 Hollywood (2008) 45 Cal.4th 116, 134-35.)

19 Respondents attempt to piecemeal any CEQA analysis, asserting that “certain future activities will

20 require permitting” at a later time. (RB at 34.) But the Supreme Court has rejected such reasoning.

21 (Banning Ranch Conservancy v. City of Newport Beach (2017) 2 Cal.5th 918, 939 [claim that

22 environmental factors would be considered during later permitting phase is “inconsistent with CEQA’s

23

24
24 [ballot measure imposing tax to fund transportation projects not a project where listed projects might
25 or might not be implemented]; City of Irvine v. County of Orange (2013) 221 Cal.App.4th 846, 862-63
[mere application for “conditional” state funding for jail facilities “committed the County to nothing”];
26 Citizens to Enforce CEQA v. City of Rohnert Park (2005) 131 Cal.App.4th 1594, 1597-1600 [city MOU
with Indian Tribe establishing funding for undefined infrastructure where city had no authority over
27 Tribe land and use was contingent on federal approval not a project ]; Parchester Village Neighborhood
28 Council v. City of Richmond (2010) 182 Cal.App.4th 305, 312-18 [same]; but see County of Amador,
149 Cal.App.4th at 1104 [finding similar MOU was subject to CEQA].
27
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Case No. 37-2021-00029833-CU-WM-CTL
 1 policy of integrated review”].) The impacts of the whole project—which set the terms for energy

2 infrastructure, procurement and use for decades—must be considered now.10

3 City’s actions here—determining whether to approve the Franchises and implementing

4 Agreements, and on what terms—involve exactly the type of high-stakes environmental decisions CEQA

5 was designed to address. By locking in the basic terms of SDG&E’s commitments, City has violated

6 CEQA and “lost the opportunity to consider possible alternatives and mitigation.” (California Unions for

7 Reliable Energy v. Mojave Desert Air Quality Management Dist. (2009) 178 Cal.App.4th 1225, 1242-47

8 [adoption of air quality credit rule that committed District to “the procedure and the formulas set forth” in

9 the rule subject to CEQA review, which must “accompany[] the first discretionary approval”].)

10 B. The CEQA exemptions cited by Respondents do not apply.

11 Respondents also suggest that even if the Franchises constituted a “project,” their approval is
12 exempt from CEQA. But the Franchises go far beyond the exemptions Respondents rely on: operation of

13 existing facilities with no expansion of use, replacement or undergrounding of existing facilities on the

14 “same site,” and utility extensions for single parcels. (Guidelines §§ 15301(b), 15302(c)&(d),15303(d).)11

15 Courts “construe the [CEQA] exemptions narrowly in order to afford the fullest possible environmental

16 protection.” (Save Our Carmel River v. Monterey Peninsula Water Management Dist. (2006) 141

17 Cal.App.4th 677, 697.) To rely on the exemption, City would have to produce substantial evidence that

18 the Agreements will not allow expansion beyond the existing facilities. (See id. at 699-700 [exemption

19 inapplicable where record did not show related development would be limited to replacing existing

20 structure]; Save Our Schools v. Barstow Unified School Dist. Bd. of Education (2015) 240 Cal.App.4th

21 128, 142 [exemption inapplicable where record lacked information proving “transfers would not cause”

22 over-enrollment].)

23

24
10
Thus, case law finding CEQA inapplicable to project components involving unknown and
25
unknowable development are inapt. (See, e.g., Friends of the Sierra Railroad v. Tuolumne Park &
26 Recreation Dist. (2007) 147 Cal.App.4th 643, 651, 657 [CEQA review of right-of-way sale premature
where “no specific plans” for its development “were on the table”]; cases cited in RB, p. 35.].
27 11 Petitioner pointed out numerous reasons why the “unusual circumstances” exception to categorical

28 exemptions is applicable (POB at 28-29), but the Court need not even reach that question here because
the exemptions are inapplicable in the first place. (Save Our Carmel River, 141 Cal.App.4th at 700-01.)
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 1 The record shows the opposite. The Franchises on their face anticipate new construction and new

2 contracts with new terms for providing energy to a growing population for decades, including a regular

3 “Two-Year Plan” that identifies “major repairs or construction” and a biannual presentation of “planned

4 major energy and gas projects.” (POB 27-28; 075298; 000291.) Respondents claim an “off-hand remark”

5 from a Councilmember about imminent construction was not referenced in the Franchises. (RB, p. 34.)

6 But new pipeline construction comprises an express purpose of the Gas Franchise, and without the Gas

7 Franchise this construction cannot proceed. (000020 [purpose in the Ordinance is “to Construct…in the

8 Streets all Pipes and Appurtenances”].) Indeed, Respondents do not dispute, and their own request for

9 judicial notice shows, that SDG&E is planning extensive new pipeline construction in San Diego. See

10 RJN, Ex. C, p. C-060, C-082; p. C-152-155 [maps showing new pipeline route in City of San Diego

11 (shown in yellow/green)]; pp. C-171-181, C-199-206 [contractor recommendations to construct in a new

12 route].) While Respondents argue that CPUC approved a larger project, Respondents have not shown that

13 any agency undertook CEQA review of the anticipated pipeline construction referenced at the hearing, or

14 that City lacks discretionary authority over pipeline construction in City streets.

15 In addition, the Franchises do not fall within section 15301’s narrow exception for reapprovals of

16 ongoing operation of existing facilities (e.g., lease renewals for a single facility)12 because they set new

17 terms for the use and source of future energy, including development of green waste as fuel sources to

18 reduce GHG emissions, electrical vehicle acquisition, increased energy efficiency, electrification, and

19 solar programs; they also address wildfire safety and sea level rise. (000122-24). Where an exemption

20 “does not cover the whole of the action that constitutes the project,” it does not excuse the agency from

21 CEQA compliance. (See Association for a Cleaner Environment v. Yosemite Community College

22 Dist. (2004) 116 Cal.App.4th 629, 640.)

23

24

25
12
See, North Coast Rivers Alliance v. Westlands Water Dist. (2014) 227 Cal.App.4th 832, 838, 868
26 [renewal of contracts to continue the existing terms for water delivery “without any changes” while
federal agency prepared environmental review for new, 25-year contracts not subject to CEQA]; San
27 Diegans for Open Government v. City of San Diego (2018) 31 Cal.App.5th 349, 371 [restated lease not

28 subject to CEQA where “all of the structures at issue were already completed” at time of CEQA
determination].
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 1 C. Respondents Tacitly Concede that the PEIR for the Climate Action Plan Did Not
Analyze the Impacts of the Franchises and that City Never Prepared an Initial Study
2 as Required by CEQA Section 21094.
3 During the administrative phase, City tried to evade CEQA review by claiming the project was

4 “consistent with” and “covered” by the PEIR for the Climate Action Plan. (000004.) But as Petitioner’s

5 Opening Brief showed, the project is not addressed in the PEIR and City did not even go through the

6 motions of preparing an initial study as required by CEQA or considering the project’s consistency with

7 the PEIR using its Checklist. (POB, pp. 29-31; Pub. Res. Code § 21094(c); McCann v. City of San Diego

8 (2021) 70 Cal.App.5th 51, 93-96 [holding that Checklist legally inadequate and that City violated CEQA

9 by failing to properly analyze whether undergrounding projects were consistent with Climate Action

10 Plan].)

11 Respondents do not, and cannot, point to evidence that the PEIR addressed the Franchises or that

12 City employed its Checklist (or an initial study) to make a consistency determination. Unable to rebut

13 Petitioner’s argument, Respondents effectively concede it. They now claim the “City did not find that the

14 PEIR … covered all aspects of the Franchises” and instead argue that the Franchises do not constitute a

15 “change to the Climate Action Plan.” (RB, p. 40, emphasis added.)

16 This argument is a red herring. The Franchises do not purport to modify the Climate Action Plan

17 (or any other City plan). Nor did Petitioner argue that Respondents had to update the PEIR for the Climate

18 Action Plan to address the Franchises. Rather, the Franchises constitute a new project whose

19 environmental impacts were not addressed in the PEIR. Accordingly, Respondents cannot rely on the

20 PEIR to excuse its failure to comply with CEQA’s statutory mandates here, and certainly not without first

21 conducting an initial study or following City’s required procedures.

22 VI. THE COURT HAS THE AUTHORITY TO FASHION AN EQUITABLE REMEDY ON

EACH OF PETITIONER’S CLAIMS THAT ENSURES COMPLIANCE WITH THE
23 LAW; AND SAN DIEGANS WILL CONTINUE TO RECEIVE GAS AND ELECTRIC
SERVICE AS A MATTER OF LAW.
24
Perhaps anticipating a loss on the merits, Respondents present a sky-is-falling argument about the
25
appropriate remedy, suggesting that an order voiding the Franchises would lead to the cessation of utility
26
service. (RB, pp. 40-41.) This issue would be better addressed following an order granting the petition, a
27
short response is provided here as well.
28
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REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
Case No. 37-2021-00029833-CU-WM-CTL
 1 As a matter of law, voiding the Franchises would not turn off power in San Diego, as City well

2 knows. (052431-052433 [City Attorney confirming SDG&E’s continuing obligation to serve]; see also

3 001440-001441 [PCF letter to City Council with citing case law and statutes confirming SDG&E’s

4 continuing obligation to serve]; Pub. Util. Code, § 451 [SDG&E required to maintain service as “necessary

5 to promote the safety, health, comfort, and convenience of … the public”], Pub. Util. Code, § 851; Barnett

6 v. Delta Lines, Inc. (1982) 137 Cal.App.3d 674, 683.)

7 Second, the Court possesses the authority to void the awarding of the Franchises, invalidate the

8 associated Ordinances, and direct City to cure its legal violations while allowing SDG&E to continue

9 providing gas and electric service on an interim basis. Numerous appellate courts have directed similar

10 remedies to address violations of CEQA. (See generally, Pub. Res. Code § 21168.9; POET, LLC v. State

11 Air Resources Bd. (2013) 218 Cal.App.4th 681, 761 [citing same]; Laurel Heights Improvement Assn. v.

12 Regents of Univ. of California (1988) 47 Cal.3d 376, 423 [courts “rely on traditional equitable principles

13 in deciding” the proper CEQA remedy]; Preserve Wild Santee v. City of Santee (2012) 210 Cal.App.4th

14 260, 287 [“[i]n deciding which mandates to include in its order, a trial court relies on equitable

15 principles”]; City of Santee v. City of San Diego (1989) 214 Cal.App.3d 1438, 1455-56 [ordering city to

16 void approval of prison expansion project and decertify EIR while allowing continued operation of the

17 existing prison].) Indeed, severing only some or a portion of the Franchises, however, would be improper

18 under CEQA, as all the Franchises serve the same “central purpose” and City’s failure to conduct CEQA

19 review for any of their terms violated CEQA. (See County of Amador, 149 Cal.App.4th at 1113 [upholding

20 writ setting aside resolution; severance of project components would violate “central purpose of the

21 agreement”].)

22 Courts also have wide discretion to fashion equitable remedies in the competitive bidding context.

23 Where a public agency awards a contract in violation of competitive bidding laws, the California Supreme

24 Court has held that “setting aside the contract” is “the most effective enforcement of the competitive

25 bidding law.” (Kajima/Ray Wilson v. Los Angeles County Metropolitan Transp. Authority (2000) 23

26 Cal.4th 305, 313, fn. 1; see also Monterey Mechanical Co. v. Sacramento Regional County Sanitation

27 Dist. (1996) 44 Cal.App.4th 1391, 1412 [directing agency to set aside wrongfully awarded contract and

28 rejecting claim that relief may be denied “based on the balance of hardships”].) Injunctive relief of this
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 1 type is available unless the contract has already been “substantially or fully performed.” (Kajima, 23

2 Cal.4th at 313, fn. 1; see also Eel River Disposal & Resource Recovery, Inc. v. County of Humboldt (2013)

3 221 Cal.App.4th 209, 240, fn. 13 [proper remedy where illegal franchise has not been fully or substantially

4 performed is (1) set aside the award; (2) order the agency to re-bid; (3) while the bidding process is

5 underway, order the entity initially awarded the contract to continue providing services; and (4) order the

6 agency to pay for those services on a per diem basis; two years into a 10-year solid waste disposal franchise

7 was not considered “substantially performed”].) Clearly, this Court has discretion to fashion a remedy to

8 ensure uninterrupted utility service while also voiding the contracts avoided in violation of City Charter

9 provisions governing competitive bidding.

10 Courts have awarded similar equitable relief for violations of the California Constitution’s voter

11 approval laws for new fees and taxes. In Newhall County Water Dist. v. Castaic Lake Water Agency, for

12 example, the water agency adopted an increase in wholesale water rates that violated Proposition 26.

13 ((2016) 243 Cal.App.4th 1430, 1437-40, 1451.) The appellate court upheld the trial court’s remedy,

14 ordering the agency to rescind its new higher rates, “to revert to the rates previously in effect until the

15 adoption of new lawful rates” and to refund to plaintiff the overcharge. (Id. at 1440, 1451; see also

16 Monterey Peninsula Taxpayers Assn. v. County of Monterey (1992) 8 Cal.App.4th 1520, 1541-42

17 [rejecting agency’s argument that invalidation of unconstitutional tax would cause unfair hardship,

18 holding that Proposition 13 requires “supermajority approval of new special taxes regardless of how badly

19 the revenues [are] needed”].)

20 VII. CONCLUSION

21 For all of the reasons set forth herein, Petitioner requests the Court issue the writ of mandate

22 prayed for.

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 1 Dated: October 17, 2022 Respectfully Submitted,

2 By: /s/ Malinda Dickenson

Malinda Dickenson
3
By: /s/ Winter King
4 Winter King
5 Attorneys for Petitioner
The Protect Our Communities Foundation
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REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
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 1 PROOF OF SERVICE

2 The Protect Our Communities Foundation vs City of San Diego [IMAGED]

Case No. 37-2021-00029833-CU-WM-CTL
3 Superior Court of California, County of San Diego

4 At the time of service, I was over 18 years of age and not a party to this action. I am employed
in the County of San Francisco, State of California. My business address is 396 Hayes Street, San
5 Francisco, CA 94102.

6 On October 17, 2022, I served true copies of the following document(s) described as:

7 PETITIONER’S REPLY BRIEF IN SUPPORT OF VERIFIED PETITION FOR WRIT OF

MANDATE UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT, THE SAN
8 DIEGO CITY CHARTER, THE CALIFORNIA CONSTITUTION, AND OTHER LAWS

9 on the parties in this action as follows:

10 SEE ATTACHED SERVICE LIST

11 BY E-MAIL OR ELECTRONIC TRANSMISSION: I caused a copy of the document(s) to

be sent from e-mail address [email protected] to the persons at the e-mail addresses listed in the
12 Service List. I did not receive, within a reasonable time after the transmission, any electronic message
or other indication that the transmission was unsuccessful.
13
I declare under penalty of perjury under the laws of the State of California that the foregoing is
14 true and correct.

15 Executed on October 17, 2022, at San Francisco, California.

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Jennifer K Miao
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REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
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 1 SERVICE LIST
The Protect Our Communities Foundation vs City of San Diego [IMAGED]
2 Case No. 37-2021-00029833-CU-WM-CTL
Superior Court of California, County of San Diego
3
M. TRAVIS PHELPS, Assistant City Attorney MAURICE SUH
4 TYLER L. KRENTZ, Deputy City Attorney JAMES L. ZELENAY JR.
Office of the City Attorney GIBSON, DUNN & CRUTCHER LLP
5 1200 Third Avenue, Suite 1100 333 South Grand Avenue
San Diego, California 92101-4100 Los Angeles, CA 90071-3197
6 Telephone: (619) 533-5800 Telephone: 213.229.7000
Facsimile: (619) 533-5856 Facsimile: 213.229.7520
7 [email protected] [email protected]
[email protected] [email protected]
8
Attorneys for Respondent Attorneys for Real Party in Interest
9 CITY OF SAN DIEGO San Diego Gas & Electric

10 MALINDA R. DICKENSON
THE PROTECT OUR COMMUNITIES
11 FOUNDATION
4452 Park Boulevard # 309
12 San Diego, CA 92116
[email protected]
13
Attorney for Petitioner
14 The Protect Our Communities Foundation

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REPLY BRIEF ISO PETITION FOR WRIT OF MANDATE
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