City of Los Angeles v. Standard Oil Co.

Second Dist., Div. Three.

May 13, 1968.]

CITY OF LOS ANGELES et al., Plaintiffs and Appellants, v. STANDARD OIL COMPANY OF CALIFORNIA, Defendant and Respondent.

COUNSEL

Roger Arnebergh, City Attorney, Gilmore Tillman, Assistant City Attorney, Desmond J. Bourke, Deputy City Attorney, Kirtland & Packard, Robert C. Packard, P. Dennis Keenan, Ellis J. Horvitz, and Henry E. Kappler for Plaintiffs and Appellants.

Lawler, Felix & Hall, Marcus Mattson, R. F. Outcault, Jr., and James N. Ries for Defendant and Respondent.

McCutchen, Black, Verleger & Shea, Philip K. Verleger, Max K. Jamison, Jerome A. Hoffman, Robert K. Walsh, Kaplan, Livingston, Goodwin, Berkowitz & Selvin, Herman F. Selvin, Sims Hamilton, Flint & MacKay, Philip M. Battaglia, Lon R. Clearwaters, Veatch, Carlson, Dorsey & Quimby and Robert C. Carlson as Amici Curiae on behalf of Defendant and Respondent.

OPINION

MOSS, J.

The complaint seeks a declaration that a statute enacted by the Legislature in 1964 relating to contribution among tortfeasors responsible for the Baldwin Hill Reservoir disaster in December 1963 fn. 1 is constitutional. Although several oil companies and other persons are named as defendants in the complaint, only respondent Standard Oil Company of California appeared in the action. The demurrer of respondent was sustained on the sole ground that the statute is unconstitutional in that it is special legislation based upon an invalid classification. The trial court entered a judgment declaring that the plaintiffs are not entitled to the declaration of constitutionality they seek. fn. 2plaintiffs appeal from the judgment. [262 Cal. App. 2d 122]

The complaint alleges in substance that: from 1924 to the present the named defendants have extracted petroleum, water and natural gas from the Inglewood Oil Field; in 1951 plaintiff Department of Water and Power built the Baldwin Hills dam and reservoir in the City of Los Angeles on a site adjacent to the Inglewood Oil Field; the drilling operations of the defendants caused the surface area of the oil field and surrounding properties to subside; the subsidence caused the Baldwin Hills dam to collapse and the reservoir to flood the surrounding area; the flood caused severe damage to the property of more than 3,700 property owners, killed at least five persons, and injured many others; the victims of the flood were in urgent need of funds to mitigate their suffering and to restore the damaged community; litigation to determine the parties responsible for the losses would require an extended period of time and would frustrate prompt settlement of loss claims; plaintiffs paid a reasonable amount for the claims of those who were injured in the flood; the aggregate amount of claims paid exceeds $12,000,000; in the event plaintiffs are held jointly liable for the flood damage they are entitled to contribution from the defendants by reason of the provisions of AB 9; an actual controversy exists between plaintiffs and defendants as to the constitutionality of AB 9.

AB 9 is entitled "An act relating to contribution among joint and several tortfeasors, and declaring the urgency thereof, to take effect immediately." The text of AB 9 is set out in the appendix to this opinion. By its terms AB 9 is made applicable only to injuries resulting from the failure of the Baldwin Hills dam and reservoir on December 14, 1963. (§ 1.) The principal distinction between the right created by AB 9 and the general California law on contribution among joint tortfeasors arises by reason of section 3(a) of AB 9. Section 3(a) provides for a right of contribution among joint or several tortfeasors which "shall arise when one tortfeasor has discharged by payment the common liability or has paid more than his pro rata share thereof, although judgment has not been rendered against all or any of them in an action on the tort." Section 875 subdivision (c) of the Code of Civil Procedure, on the other hand, provides that the "right of contribution may be enforced only after one tortfeasor has, by payment, discharged the joint judgment or has paid more than his pro rata share thereof."

[1a] It is respondent's principal contention on appeal that AB 9 violates all the constitutional guarantees against [262 Cal. App. 2d 123] special and arbitrary legislation fn. 3 because it provides for a different right of contribution among tortfeasors who may be liable for injuries caused by the Baldwin Hills dam disaster from that applicable to tortfeasors in general. This contention is without merit.

[2] In response to a similar contention the Supreme Court set forth the governing law as follows: "The contention that the section in question lacks uniformity, grants special privileges and denies equal protection of the laws, is also without merit. None of these constitutional principles is violated if the classification of persons or things affected by the legislation is not arbitrary and is based upon some difference in the classes having a substantial relation to the purpose for which the legislation was designed. [Citations] [3] A law to be general in its scope need not include all classes of individuals in the state. Nor is a classification void because it does not embrace within it every other class which might be included. [Citations.] [4] Wide discretion is vested in the Legislature in making the classification and every presumption is in favor of the validity of the statute; the decision of the Legislature as to what is a sufficient distinction to warrant the classification will not be overthrown by the courts unless it is palpably arbitrary and beyond rational doubt erroneous. [Citations] [5] A distinction in legislation is not arbitrary if any set of facts reasonably can be conceived that would [262 Cal. App. 2d 124] sustain it." (Sacramento Municipal Utility Dist. v. Pacific Gas & Elec. Co., 20 Cal. 2d 684, 693 [128 P.2d 529].)

[1b] Applying these rules to AB 9 we cannot say that the classification among tortfeasors provided therein is palpably arbitrary and without a reasonable basis. The reason why AB 9 was enacted is stated in the statute. After reciting the basic facts of the Baldwin Hills dam disaster, section 10 recites, "The victims of the flood are in urgent need of funds to mitigate the hardships which they are suffering and to restore the damaged homes and business properties. The remedies provided by this act are necessary to cope with this situation and must be available immediately." [6] While it is a judicial question whether a general law could have been made applicable to accomplish the purposes of the special law, the declaration in the special law as to the reasons for its enactment should not be ignored. (Solvang Municipal Improv. Dist. v. Jensen, 111 Cal. App. 2d 237, 240 [244 P.2d 492].) [1c] The widespread havoc caused by the collapse of the Baldwin Hills dam was reason enough to justify the enactment of legislation to encourage the parties liable for the damage to settle the claims against them prior to judgment. The general contribution statute deters such settlements because under Code of Civil Procedure section 875 a tortfeasor who settles a claim before rendition of judgment therefor loses the right to seek contribution against other persons who may be liable for the same injury. (See Guy F. Atkinson Co. v. Consani, 223 Cal. App. 2d 342, 345-346 [35 Cal. Rptr. 750].) The Baldwin Hills dam disaster created a unique problem in that the number of persons injured therein was much greater than in the usual case and the issue of causation is unusually complex. By reason of these factors the need for legislation to encourage settlement was particularly acute.

Respondent urges, however, that if the Legislature desired to change the rule for contribution among the tortfeasors liable for the Baldwin Hills injuries it was required by the federal and state Constitutions to extend the change to all tortfeasors rather than to confine it to those responsible for the Baldwin Hills flood. "If good ground for the classification exists, such classification is not void because it does not embrace within it every other class which might be included." (Heron v. Riley, 209 Cal. 507, 518 [289 P. 160]; see Matter of Petition of Burke, 160 Cal. 300, 303 [116 P. 755].) Good ground exists for the distinction made in AB 9 between [262 Cal. App. 2d 125] the parties responsible for the Baldwin Hills damage and tortfeasors who may be liable for a common injury in general. A rule which permits a right of contribution among tortfeasors to arise prior to judgment, while it tends to encourage out-of-court settlements, also tends to promote a multiplicity of litigation because it permits a tortfeasor against whom judgment has been rendered to bring a new and separate suit for contribution against other alleged tortfeasors not named in the judgment. The issues of liability and damages already litigated in the action brought against the judgment tortfeasor must be tried again in the contribution action. (See Prosser, Law of Torts (3d ed. 1964) p. 277.) The Legislature did not act arbitrarily in refusing to make a change in the general law that could have the possible effect of proliferating the general run of tort litigation.

[7] No constitutionally protected rights of the Baldwin Hills tortfeasors are impaired by AB 9. They are entitled under AB 9 to a judicial determination of their liability and the amount thereof to the same extent as other tortfeasors. It is true that AB 9 does expand the class of persons who can subject them to suit since under the general law the choice of defendants is with the injured claimants whereas under AB 9 the choice is also given to other tortfeasors. However, no Baldwin Hills tortfeasor had any constitutionally protected right to avoid paying for the consequences of its tort merely because some of the injured claimants might have chosen to seek redress from other tortfeasors. (See Augustus v. Bean, 56 Cal. 2d 270, 272 [14 Cal. Rptr. 641, 363 P.2d 873].) This case is distinguished from Board of Education v. Alliance Assur. Co., 159 F. 994 and Coolidge v. Standard Acc. Ins. Co., 114 Cal. App. 716 [300 P. 885], relied upon by respondent, in that in those cases the statute which was declared to be invalid imposed a special burden of pleading and proof upon insurance companies thereby placing them in an unequal and disadvantageous position as to all actions affected by the statute where no reason appeared for the statute other than to favor the claimants under the insurance policies. Such cases as Stout v. Democratic County Central Committee, 40 Cal. 2d 91 [251 P.2d 321]; Hollman v. Warren, 32 Cal. 2d 351 [196 P.2d 562]; Consolidated Printing & Publishing Co. v. Allen, 18 Cal. 2d 63 [112 P.2d 884]; Austin v. Lambert, 11 Cal. 2d 73 [77 P.2d 849, 115 A.L.R. 849]; Ventura County Harbor Dist. v. Board of Supervisors, 211 Cal. 271 [295 P. 6]; Franchise Motor Freight Assn. v. Seavey, 196 Cal. 77 [235 P. 1000] do [262 Cal. App. 2d 126] not aid respondent. They all dealt with factual situations in which there was no conceivable lawful reason for the classification made in the legislation.

[8] Respondent asserts that AB 9 cannot be justified as disaster relief legislation because that purpose is not reflected in its title. As noted above the title of AB 9 indicates that it concerns contribution among tortfeasors and is an urgency measure. The title naturally suggests to the mind the field of legislation which is included in the text of the act, and, therefore, complies with the requirement of article IV, section 24 (now § 9) of the Constitution that the subject of an act shall be expressed in its title. (Metropolitan Water Dist. v. Marquardt, 59 Cal. 2d 159, 173-174 [28 Cal. Rptr. 724, 379 P.2d 28]; Orange County Water Dist. v. Farnsworth, 138 Cal. App. 2d 518, 526 [292 P.2d 927].) Although the Legislature did not refer to disaster relief in the title of AB 9, its purpose in affording such relief is amply shown by the recitals and declarations in the text of the act.

[9] Respondent contends that AB 9 is an unconstitutional attempt to exercise judicial powers. AB 9 makes no determinations of fact against anyone nor does it adjudicate the rights or liabilities of any parties. Therefore, it is unlike the legislative acts considered in the cases relied upon by respondent. (United States v. Brown, 381 U.S. 437 [14 L. Ed. 2d 484, 85 S. Ct. 1707]; Taylor & Co. v. Place (1856) 4 R.I. 324; Truax- Traer Coal Co. v. Compensation Comr., 123 W.Va. 621 [17 S.E.2d 330].)

Amici curiae are three oil companies which, according to their brief, played a minor role in the development of the Inglewood Oil Field. They are named as defendants in the complaint, but were not served and are not parties to the action. They are concerned that AB 9 changes the rule of law which holds that tortfeasors whose liability is several rather than joint are each liable only for their own contribution to the common injury. Amici curiae contend that AB 9 requires that whether or not their liability is joint or several the contribution of each tortfeasor must be determined by dividing the entire common liability equally among all of them. (See § 4(a).) They ask that this court declare AB 9 unconstitutional to the extent that it requires a pro rata contribution from them if they are found to be several rather than joint tortfeasors.

[10] An essential requirement of a declaratory relief action "is that there is a real controversy between parties, [262 Cal. App. 2d 127] involving justiciable questions relating to their rights and obligations. Facts and not conclusions of law must be pleaded which show a controversy of concrete actuality as opposed to one which is merely academic or hypothetical." (Wilson v. Transit Authority, 199 Cal. App. 2d 716, 722 [19 Cal. Rptr. 59].)

Nothing in the record indicates that either appellants or respondent assert the construction of AB 9 which amici curiae fear. The complaint alleges only that plaintiffs "contend that in the event that plaintiffs are jointly liable for such damages that plaintiffs are entitled to contribution from the defendants on the basis of" AB 9 and that "an actual controversy exists between plaintiffs and defendants as to the constitutionality of" AB 9. No facts are alleged in the complaint which indicate that the liability of any of the defendants is several rather than joint. In their brief filed in reply to that of amici curiae appellants argue that AB 9 does not require pro rata contribution from defendants whose liability is found to be several because section 3(b) provides, "Such right of contribution shall be administered in accordance with the principles of equity." It appears, therefore, that the controversy about which amici curiae are concerned is hypothetical and not actual.

The record reflects that the plaintiffs have commenced another action for the recovery of damages allegedly incurred by them as a result of claims asserted against them by reason of the failure of the Baldwin Hills dam, in which action amici curiae have appeared as defendants. Facts may develop in that action which render the questions raised here by amici curiae of more than academic interest. The point is not properly raised on this appeal.

The judgment is reversed.

Ford, P. J., and Frampton, J. pro tem., fn. * concurred.

Appendix

STATUTES OF CALIFORNIA

pASSED AT THE 1964 FIRST EXTRAORDINARY SESSION OF THE LEGISLATURE

CHAPTER 1

An act relating to contribution among joint and several tortfeasors, and declaring the urgency thereof, to take effect immediately.

[Approved by Governor February 14, 1964. Filed with Secretary of State February 14, 1964.]

The people of the State of California do enact as follows:

Section 1. This act is applicable only to injuries to person or property and wrongful deaths resulting from the failure of the Baldwin Hills Dam and Reservoir in the City of Los Angeles on December 14, 1963.

Sec. 2. The right of contribution provided by this act is in addition to any other rights of contribution, and any other remedies, that exist.

Sec. 3. (a) Where two or more persons become jointly or severally liable in tort for the same injury to person or property or for the same wrongful death, there is a right of contribution among them which shall arise when one tortfeasor has discharged by payment the common liability or has paid more than his pro rata share thereof, although judgment has not been rendered against all or any of them in an action on the tort.

(b) Such right of contribution shall be administered in accordance with the principles of equity.

(c) Such right of contribution shall be limited to the excess so paid over the pro rata share of the person so paying and in no event shall any tortfeasor be compelled to make contribution beyond his own pro rata share of the common liability.

(d) There shall be no right of contribution in favor of any tortfeasor who has intentionally injured the injured person.

(e) A liability insurer who by payment has discharged the common liability of a tortfeasor shall be subrogated to his right of contribution.

(f) This act shall not impair any right of indemnity under existing law, and where one tortfeasor is entitled to indemnity from another, there shall be no right of contribution between them. [262 Cal. App. 2d 129]

(g) This act shall not impair the right of a plaintiff to satisfy a judgment in full as against any tortfeasor judgment debtor.

Sec. 4. (a) The pro rata share of each tortfeasor shall be determined by dividing the entire common liability equally among all of them.

(b) Where one or more persons are liable solely for the tort of one of them or of another, as in the case of the liability of a master for the tort of his servant, they shall contribute a single pro rata share, as to which there may be indemnity between them.

Sec. 5. Where a release, dismissal with or without prejudice, or a covenant not to sue or not to enforce judgment is given in good faith to one or more of a number of tortfeasors claimed to be liable for the same tort:

(a) It shall not discharge any other such tortfeasor from liability unless its terms so provide, but it shall reduce the claims against the others in the amount stipulated by the release, the dismissal or the covenant, or in the amount of the consideration paid for it whichever is the greater; and

(b) It shall discharge the tortfeasor to whom it is given from all liability for any contribution to any other tortfeasors.

Sec. 6. (a) Whether or not judgment has been entered in an action against two or more tortfeasors for the same injury or wrongful death, contribution may be enforced by separate action.

(b) Where a judgment has been entered in an action against two or more tortfeasors for the same injury or wrongful death, a judgment for contribution may be entered by one such tortfeasor judgment debtor against the other tortfeasor judgment debtors by motion upon notice. Notice of such motion shall be given to all parties in the action, including the plaintiff or plaintiffs, at least ten (10) days before the hearing thereon. Such notice shall be accompanied by an affidavit setting forth any information which the moving party may have as to the assets of defendants available for satisfaction of the judgment or claim for contribution.

(c) The recovery of a judgment for an injury or wrongful death against one tortfeasor does not of itself discharge the other tortfeasors from liability for the injury or wrongful death unless the judgment is satisfied. The satisfaction of the judgment does not impair any right of contribution. [262 Cal. App. 2d 130]

(d) The judgment of the court in determining the liability of the several defendants to the claimant for an injury or wrongful death shall be binding as among such defendants in determining their right to contribution.

Sec. 7. Inasmuch as it appears to the Legislature that an actual controversy respecting the constitutionality of this act exists, and that failure to resolve this controversy at an early date will likely frustrate the purposes of this act, any person or entity against whom has been asserted any claim arising out of the event described in Section 1 and who alleges that if he were to pay all of such claims, he would expect to seek contribution from another or others pursuant to this act, may bring an action. Such action shall have priority as do other actions for declaratory relief pursuant to Section 1062a of the Code of Civil Procedure.

Sec. 8. Statutory definitions and rules of construction that would be applicable to this act if its provisions were part of Title 11 of Part 2 of the Code of Civil Procedure shall be applicable to this act.

Sec. 9. If Section 1 of this act is held invalid, this entire act is invalid. If any other provision of this act or the application thereof to any person is held invalid, such invalidity shall not affect other provisions or applications of the act which can be given effect without the invalid provision or application and to this end the provisions of this act are declared to be severable.

Sec. 10. This act is an urgency measure necessary for the immediate preservation of the public peace, health or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting such necessity are:

On December 14, 1963, a dam and reservoir, located in the Baldwin Hills area within the City of Los Angeles, failed and more than 200 million gallons of water flooded hundreds of dwellings and commercial buildings, with more than 2,000 persons suffering severe damage to their property. The losses aggregated many millions of dollars and the County of Los Angeles has been declared by the President of the United States to be a disaster area.

The victims of the flood are in urgent need of funds to mitigate the hardships which they are suffering and to restore the damaged homes and business properties. The remedies provided by this act are necessary to cope with this situation and must be available immediately.

FN 1. The statute involved is Chapter 1 of the Statutes of the State of California, First Extraordinary Session 1964, and will be referred to in this opinion as "AB 9."

FN 2. It was proper for the court to make this declaration in the course of sustaining the demurrer. (Wilson v. Civil Service Com., 224 Cal. App. 2d 340, 344 [36 Cal. Rptr. 559].) The parties do not contest this point.

FN 3. The constitutional provisions upon which respondent relies in support of this contention are as follows: "All laws of a general nature shall have a uniform operation." (Cal. Const., art. I, § 11.) "No special privileges or immunities shall ever be granted which may not be altered, revoked, or repealed by the Legislature; nor shall any citizen, or class of citizens, be granted privileges or immunities which, upon the same terms, shall not be granted to all citizens." (Cal. Const., art. I, § 21.) "The Legislature shall not pass local or special laws in any of the following enumerated cases, that is to say: ... Nineteenth--Granting to any corporation, association, or individual any special or exclusive right, privilege, or immunity. ...

"Thirty-Third--In all other cases where a general law can be made applicable." (Cal. Const., art. IV, § 25.)

"... nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws." (U.S. Const., amend. XIV, § 1.)

AB 9 was enacted before the constitutional revision adopted two years later. In place of art. IV, § 25 the revised Constitution substituted art. IV, § 16, which reads: "A local or special statute is invalid in any case if a general statute can be made applicable." The changes do not constitute a change in meaning. (See Cal. Const. Revision Com. Proposed Revision of California Constitution, p. 39, State Printing Office, 1966.)

FN *. Retired judge of the superior court sitting under assignment by the Chairman of the Judicial Council.