Preview
1 ROB BONTA
Attorney General of California
2 NORMA N. FRANKLIN (SBN 266827)
Supervising Deputy Attorney General
3 LEENA M. SHEET (SBN 235415)
JACKIE K. VU (SBN 253533)
4 ELISE K. STOKES (SBN 288211)
AMANDA B. JOHNSON (SBN 303457)
5 STEVEN W. KERNS (SBN 333983)
DAVID WHITE (SBN 351263)
6 Deputy Attorneys General
300 South Spring Street, Suite 1702
7 Los Angeles, CA 90013-1230 Exempt from Filing Fees Pursuant
Telephone: (213) 269-6226 to Gov. Code § 6103
8 Facsimile: (916) 731-2121
E-mail: Steven.Kerns@doj.ca.gov
9
Attorneys for Defendants and Respondents
10 Governor Gavin Newsom, California Department of
Conservation, Geologic Energy Management
11 Division, and Gabe Tiffany
12 SUPERIOR COURT OF THE STATE OF CALIFORNIA
13 COUNTY OF KERN
14 CHEVRON U.S.A. INC., CASE NO.: BCV-22-100748
15 Petitioner and Plaintiff, RESPONDENT GOVERNOR NEWSOM’S
REQUEST FOR JUDICIAL NOTICE IN
16 v. SUPPORT OF MOTION FOR MOTION
AND MOTION FOR SUMMARY
17 JUDGMENT OR, IN THE
GAVIN NEWSOM, in his official capacity ALTERNATIVE, SUMMARY
18 as Governor of California; CALIFORNIA ADJUDICATION OF CAUSES OF
DEPARTMENT OF CONSERVATION, ACTION
19 GEOLOGIC ENERGY MANAGEMENT
DIVISION, a State agency; GABE (Filed Concurrently with Motion for Summary
20 TIFFANY, in his official capacity as Interim Judgment, Declaration of Steven W. Kerns,
State Oil and Gas Supervisor; and DOES 1 Separate Statement of Undisputed Material
21 through 25, inclusive, Facts and Supporting Evidence, Compendium
of Evidence and [Proposed] Order)
22 Respondents and Defendants.
Date: June 20, 2024
23 Time: 8:30 a.m.
Dept: H
24 Judge: The Honorable Bernard C.
Barmann, Jr.
25
Trial Date: October 14, 2024
26 Time: 9:00 a.m.
Action Filed: March 17, 2022
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Respondents’ Request for Judicial Notice in Support of Not. of Motion and Motion for Judgment;
Memo. of Points and Auth.; Decl. of Steven W. Kerns (BCV-22-100748)
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AERA ENERGY LLC, a California limited
2 liability company,
3 Petitioner and Plaintiff,
4 v.
5
GAVIN NEWSOM, in his official capacity
6 as Governor of California; CALIFORNIA
DEPARTMENT OF CONSERVATION,
7 GEOLOGIC ENERGY MANAGEMENT
DIVISION, a State agency; GABE
8 TIFFANY, in his official capacity as interim
State Oil and Gas Supervisor; and DOES 1
9 through 25, inclusive,
10 Respondents and Defendants.
11 WESTERN STATE PETROLEUM
ASSOCIATION,
12
Petitioner and Plaintiff,
13 v.
14 GAVIN NEWSOM, in his official capacity
as Governor of California; CALIFORNIA
15 DEPARTMENT OF CONSERVATION,
GEOLOGIC ENERGY MANAGEMENT
16 DIVISION, a State agency; GABE
TIFFANY, in his official capacity as Interim
17 State Oil and Gas Supervisor; and DOES 1
through 25, inclusive,
18 Respondents and Defendants.
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Respondents’ Request for Judicial Notice in Support of Not. of Motion and Motion for Judgment;
Memo. of Points and Auth.; Decl. of Steven W. Kerns (BCV-22-100748)
1 TO THE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
2 PLEASE TAKE NOTICE THAT, pursuant to California Evidence Code sections 452 and
3 453, respondents and defendants Gavin Newsom, California Department of Conservation, Geologic
4 Energy Management Division, Uduak-Joe Ntuk, request that the Court take judicial notice of the
5 following documents:
6 1. Attached as Exhibit 1, Chevron U.S.A.’s Respondent’s Brief filed on April 18, 2019 in
7 County of Monterey v. Chevron U.S.A., H045791, Court of Appeal of California, Sixth Appellate
8 District.
9 2. Attached as Exhibit 2, Aera Energy LLC’s Respondent’s Brief filed on April 19, 2019
10 in County of Monterey v. Chevron U.S.A., H045791, Court of Appeal of California, Sixth Appellate
11 District.
12 3. Attached as Exhibit 3, May 17, 2023 ruling on Respondents’ Motion for Protective
13 Order Prohibiting the deposition of Governor Newsom, Secretary of Natural Resources Wade
14 Crowfoot, Acting Oil & Gas Supervisor Gabe Tiffany and Former Oil & Gas Supervisors Uduak-
15 Joe Ntuk and Ken Harris.
16 REQUEST FOR JUDICIAL NOTICE
17 Evidence Code section 452, subdivision (d)(1), authorizes this Court to take judicial notice
18 of “[r]ecords of (1) any court of this state.” The order and briefs described above and attached as
19 Exhibits 1-3 are the proper subject of judicial notice under Evidence Code section 452, subdivision
20 (d), as they are records of this Court and the Court of Appeal, Sixth Appellate District of this state.
21 Courts may take judicial notice of records and briefs filed in other California state courts. (See, e.g.
22 S.Y. v. Superior Court (2018) 29 Cal.App.5th 324, 331 [California Court of Appeal taking judicial
23 notice of records and briefs filed in related California appeal]; Padron v. Watchtower Bible & Tract
24 Society of New York, Inc. (2017) 16 Cal.App.5th 1246 [California Court of Appeal granted request
25 for judicial notice of brief filed by party in a different California Court of Appeal case].)
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Respondents’ Request for Judicial Notice in Support of Not. of Motion and Motion for Judgment;
Memo. of Points and Auth.; Decl. of Steven W. Kerns (BCV-22-100748)
1 Evidence Code section 453 provides that a trial court shall take judicial notice of any matter
2 specified in Evidence Code section 452 as long as the requesting party: “(a) Gives each adverse
3 party sufficient notice of the request, through the pleadings or otherwise, to enable such adverse
4 party to prepare to meet the request; and (b) [f]urnishes the court with sufficient information to
5 enable it to take judicial notice of the matter.” The Governor has met the requirements of Evidence
6 Code sections 452 and 453 in this case, and therefore respectfully request that the Court take judicial
7 notice of the records listed herein.
8
Dated: April 3, 2024 Respectfully submitted,
9
ROB BONTA
10 Attorney General of California
NORMA N. FRANKLIN
11 Supervising Deputy Attorney General
12
13 STEVEN W. KERNS
Deputy Attorney General
14 Attorneys for Defendants and Respondents
Governor Gavin Newsom, California
15 Department of Conservation, Geologic
Energy Management Division, and Gabe
16 Tiffany
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Respondents’ Request for Judicial Notice in Support of Not. of Motion and Motion for Judgment;
Memo. of Points and Auth.; Decl. of Steven W. Kerns (BCV-22-100748)
EXHIBIT 1
H045791
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT
COUNTY OF MONTEREY, ET AL.
Appellants and Cross-Respondents,
v.
CHEVRON U.S.A. INC., ET AL.
Respondents and Cross-Appellants.
On Appeal from the Superior Court,
State of California, County of Monterey
Case No. 16-CV-3978 (and consolidated cases)
The Honorable Thomas Wills
RESPONDENT’S BRIEF BY CHEVRON U.S.A. INC.
THEODORE J. BOUTROUS, JR., JEFFREY D. DINTZER,
Bar No. 132099 Bar No. 139056
WILLIAM E. THOMSON, MATTHEW WICKERSHAM,
Bar No. 187912 Bar No. 241733
DANA L. CRAIG, Bar No. 251865 ALSTON & BIRD LLP
DIONE GARLICK, Bar No. 293012 333 South Hope St., 16th Floor
GIBSON, DUNN & CRUTCHER, LLP Los Angeles, California 90071
333 South Grand Avenue, 54th Floor Tel: (213) 576-1000;
Los Angeles, California 90071 Fax: (213) 576-1100
Tel: (213) 229-7000; jeffrey.dintzer@alston.com,
Fax: (213) 229-7520 matt.wickersham@alston.com,
tboutrous@gibsondunn.com
Attorneys for Respondent
CHEVRON U.S.A. INC.
INITIAL CERTIFICATE OF
INTERESTED ENTITIES OR PERSONS
(Cal. Rules of Court, Rule 8.208)
Full name of interested Nature of interest
entity of person (Explain):
Chevron Corporation Has an ownership interest of
10 percent or more in Chevron
U.S.A. Inc.
Chevron Investments Inc. Has an ownership interest of
10 percent or more in Chevron
U.S.A. Inc.
Texaco Inc. Has an ownership interest of
10 percent or more in Chevron
U.S.A. Inc.
Chevron U.S.A. Holding Inc. Has an ownership interest of
10 percent or more in Chevron
U.S.A. Inc.
The undersigned certifies that the above listed persons or
entities (corporations, partnerships, firms or any other
association, but not including government entities or their
agencies), have either (i) an ownership interest of 10 percent of
more in the party if an entity; or (ii) a financial or other interest
in the outcome of the proceeding that the justices should consider
in determining whether to disqualify themselves, as defined in
rule 8.208(e)(2).
DATED: April 18, 2019 ALSTON & BIRD LLP
/s/ Jeffrey D. Dintzer
Jeffrey D. Dintzer
Attorney for Respondents
CHEVRON U.S.A. INC.
2
TABLE OF CONTENTS
Page
I. INTRODUCTION ................................................................ 11
II. FACTUAL BACKGROUND ................................................ 14
A. Chevron’s Monterey County Operations .................. 14
B. State and Federal Laws Regulating Oil and
Gas Operations .......................................................... 17
C. Measure Z Passes, Prohibiting Three Specific
Subsurface Activities ................................................. 19
III. PROCEDURAL HISTORY .................................................. 21
IV. STANDARD OF REVIEW................................................... 25
V. ARGUMENT ........................................................................ 26
A. Measure Z Frustrates the Purpose of State Law
by Banning Activities that State Law Promotes
and Permits. ............................................................... 29
1. Local Governments May Not Prohibit
Activities Permitted and Promoted by
State Law, Such as the Development of
Oil and Gas Production With State-
Approved Techniques........................................ 29
2. Contrary to Appellants’ View, No
“Presumption Against Preemption”
Applies to Measure Z’s Complete Ban on
State-Sanctioned and Promoted
Production Activities......................................... 34
TABLE OF CONTENTS (continued)
Page
3. Contrary to Appellants’ Claim, State Law
Need Not Mandate Maximum Oil
Production in Order to Preempt Local
Production Bans. ............................................... 37
B. Measure Z Is Preempted Because It
Impermissibly Regulates Subsurface Activity, a
Field Fully Occupied by State Law........................... 40
1. State Law Fully Occupies the Regulatory
Field of Subsurface Petroleum Production
Activity............................................................... 41
2. Measure Z’s Ban on Wastewater Injection
Is Preempted Because It Prohibits a
Specific Subsurface Production Technique
the State Permits. ............................................. 49
3. Measure Z’s Ban on New Wells is
Preempted Because It Prohibits a Specific
Subsurface Production Technique Allowed
by the State. ...................................................... 52
4. The Legislature Has Not Left Room for
Local Regulation of Subsurface Activities. ...... 53
5. The County Cannot Do Indirectly What It
Cannot Do Directly: Measure Z is Not a
Land Use Regulation. ....................................... 59
C. Measure Z is an Obstacle to the Federal Safe
Drinking Water Act. .................................................. 63
VI. CONCLUSION..................................................................... 70
CERTIFICATE OF WORD COUNT ............................................. 71
PROOF OF SERVICE ................................................................... 72
4
TABLE OF AUTHORITIES
Page
STATE CASES
Beverly Oil Co. v. City of L.A.
(1953) 40 Cal.2d 552 ................................................................. 54
Big Creek Lumber Co. v. Cnty. of Santa Cruz
(2006) 38 Cal.4th 1139........................................................ 36, 62
Briggs v. Brown
(2017) 3 Cal.5th 808.................................................................. 25
Cal. Assn. of Psychology Providers v. Rank
(1990) 51 Cal.3d 1 ..................................................................... 27
Cal. Building Industry Assn. v. Bay Area Air Quality
Mgmt. Dist.
(2015) 62 Cal.4th 369................................................................ 58
Cal. Cannabis Coal. v. City of Upland
(2017) 3 Cal.5th 924, 933.................................................... 25, 26
Cal. Grocers Assn. v. City of L.A.
(2011) 52 Cal.4th 177................................................................ 35
Citizens for Amending Proposition L v. City of
Pomona
(2018) 28 Cal.App.5th 1159, 1186............................................ 25
City of Dublin v. Cnty. of Alameda
(1993) 14 Cal.App.4th 264 ........................................................ 38
City of Riverside v. Inland Empire Patients Health &
Wellness Ctr., Inc.
(2013) 56 Cal.4th 729........................................ 27, 32, 33, 39, 40
TABLE OF AUTHORITIES (continued)
Page
Cohen v. Board of Supervisors
(1985) 40 Cal.3d 277 ................................................................. 63
Credit Mgrs. Assn. of Cal. v. Countrywide Home
Loans, Inc.
(2006) 144 Cal.App.4th 590 ...................................................... 68
Desert Turf Club v. Bd. of Sup’rs of Riverside Cnty.
(1956) 141 Cal.App.2d 446 ................................................. 60, 61
Fiscal v. City & Cnty. of S.F.
(2008) 158 Cal.App.4th 895 ........................ 29, 32, 38, 39, 40, 62
Friel v. Cnty. of L.A.
(1959) 172 Cal.App.2d 142 ....................................................... 61
Grafton Partners LP v. Super. Ct.
(2005) 36 Cal.4th 944................................................................ 56
Great W. Shows, Inc. v. Cnty. of L.A.,
(2002) 27 Cal.4th 853............................ 13, 29, 31, 32, 39, 40, 62
Hermosa Beach Stop Oil Coal. v. City of Hermosa
Beach
(2001) 86 Cal.App.4th 534 ........................................................ 63
Higgins v. City of Santa Monica
(1964) 62 Cal.2d 24 ................................................................... 62
Lockard v. City of L.A.
(1949) 33 Cal.2d 453 ................................................................. 37
Monterey Oil Co. v. City Court of City of Seal Beach
(1953) 120 Cal.App.2d 41 ......................................................... 61
N. Cal. Psychiatric Society v. City of Berkeley
(1986) 178 Cal.App.3d 90 ................................................... 35, 37
6
TABLE OF AUTHORITIES (continued)
Page
O’Connell v. City of Stockton
(2007) 41 Cal.4th 1061............................................ 48, 49, 52, 64
People ex rel. Deukmejian v. Cnty. of Mendocino
(1984) 36 Cal.3d 476 ..................................................... 58, 59, 60
People ex rel. Younger v. Cnty. of El Dorado
(1979) 96 Cal.App.3d 403 ......................................................... 69
People v. Nguyen
(2014) 222 Cal.App.4th 1168 .............................................. 36, 37
Personal Watercraft Coal. v. Bd. of Sup’rs
(2002) 100 Cal.App.4th 129 ...................................................... 69
Yamaha Corp. of Am. v. State Bd. of Equalization
(1998) 19 Cal.4th 1.................................................................... 57
FEDERAL CASES
Blue Circle Cement, Inc. v. Bd. of Cnty. Comrs.
(10th Cir. 1994) 27 F.3d 1499............................................. 31, 32
EQT Prod. Co. v. Wender
(S.D.W.Va. 2016) 191 F.Supp.3d 583, 599......................... 67, 68
Legal Envtl. Assistance Fdn., Inc. v. U.S. EPA
(11th Cir. 1997) 118 F.3d 1467................................................. 65
Marblehead Land Co. v. City of L.A.
(9th Cir. 1931) 47 F.2d 528....................................................... 61
Natural Resources Defense Council, Inc. v. U.S. EPA
(1st Cir. 1987) 824 F.2d 1258 ................................................... 65
W. Neb. Resources Council v. U.S. EPA
(8th Cir. 1991) 943 F.2d 867..................................................... 66
7
TABLE OF AUTHORITIES (continued)
Page
STATE STATUTES
Pub. Resources Code § 3000, et seq. ........................... 16, 19, 20, 42
Pub. Resources Code § 3008 .......................................................... 43
Pub. Resources Code § 3012 .......................................................... 53
Pub. Resources Code § 3013. ......................................................... 42
Pub. Resources Code § 3100 .......................................................... 58
Pub. Resources Code § 3106 ...................................................passim
Pub. Resources Code § 3130-3132................................................. 44
Pub. Resources Code § 3150-3161................................................. 44
Pub. Resources Code § 3180-3187................................................. 44
Pub. Resources Code § 3203 .............................................. 17, 37, 43
Pub. Resources Code § 3204-3207................................................. 17
Pub. Resources Code § 3208 .......................................................... 17
Pub. Resources Code § 3210-3216................................................. 17
Pub. Resources Code § 3219 .......................................................... 17
Pub. Resources Code § 3220 .......................................................... 17
Pub. Resources Code § 3222 .......................................................... 17
Pub. Resources Code § 3225 .......................................................... 17
Pub. Resources Code § 3228 .......................................................... 17
Pub. Resources Code § 3229 .......................................................... 17
8
TABLE OF AUTHORITIES (continued)
Page
Pub. Resources Code § 3240-3241................................................. 44
Pub. Resources Code § 3250-3258................................................. 44
Pub. Resources Code § 3270 .................................................... 17, 44
Pub. Resources Code § 3300-3347........................................... 17, 44
Pub. Resources Code § 3400 .................................. 10, 13, 32, 40, 44
Pub. Resources Code § 3460-3494................................................. 44
Pub. Resources Code § 3503 .......................................................... 44
Pub. Resources Code § 3600-3609........................................... 17, 54
Pub. Resources Code § 3635-3690........................................... 17, 55
Pub. Resources Code § 3690 ........................................ 57, 58, 59, 61
Pub. Resources Code § 3700-3776, 3800-3827 ............................. 44
Pub. Resources Code § 3780-3787........................................... 17, 44
Pub. Resources Code § 3850-3865................................................. 44
FEDERAL STATUTES
42 U.S.C. § 300f, et seq............................................................. 17, 20
42 U.S.C. § 300h................................................................. 64, 65, 67
42 U.S.C. § 6929............................................................................. 32
STATE REGULATIONS
Cal. Code Regs., Title 14, § 1712, et seq.................................. 16, 44
Cal. Code Regs., Title 14, § 1724.6.......................................... 50, 66
Cal. Code Regs., Title 14, § 1724.9.................................... 18, 21, 50
9
TABLE OF AUTHORITIES (continued)
Page
Cal. Code Regs., Title 14, § 1724.10............................ 18, 21, 50, 53
FEDERAL REGULATIONS
40 C.F.R. § 144.6 ................................................................ 17, 20, 22
40 C.F.R. § 147.250 ............................................................ 17, 20, 66
10
I. INTRODUCTION
Measure Z was marketed to Monterey County voters as an
anti-fracking provision, even though there is no fracking in the
County of Monterey, and the County’s geology means that there is
unlikely to be fracking in the future. Despite the emphasis on
fracking by Measure Z proponents, the real impact of Measure Z
would be to prohibit two subsurface petroleum production
activities that are unrelated to fracking: (1) drilling new wells, and
(2) reinjecting back into the ground the produced water that is an
inevitable by-product of oil and gas production. Because
longstanding state and federal regulations specifically permit
these activities, the superior court correctly determined that
Measure Z is preempted.
California law provides that “the people of the State have a
primary and supreme interest” in the “deposits of oil and gas
within the State.” (Pub. Resources Code, § 3400.) The State’s
Department of Conservation, Division of Oil, Gas and Geothermal
Resources (“DOGGR”) is responsible for supervising and fostering
the production of those petroleum resources. Indeed, it is the
mandate of the State of California, codified in its Public Resources
Code, that “[t]o best meet oil and gas needs in this state, the
supervisor [DOGGR] shall administer this division so as to
encourage the wise development of oil and gas resources.” (Id.,
11
§ 3106, subd. (d), italics added.) DOGGR is also responsible for
protecting California’s drinking water through administration of
the California Underground Injection Control (“UIC”) Program.
That mandate stems from the United States Environmental
Protection Agency’s (“U.S. EPA”) delegation of primacy over such
matters arising under the federal Safe Drinking Water Act
(“SDWA”). DOGGR fulfills this dual mandate to promote both
energy production and environmental protection through an
extensive network of regulations permitting and promoting wise
oil and gas development. Measure Z’s prohibitions on drilling new
oil and gas wells and reinjecting produced water back into the
ground directly contradict California’s express policy to promote
petroleum production, and obstruct DOGGR’s ability to fulfil its
federal-law mandate to regulate underground produced water
reinjection.
After a multi-day bench trial addressing only the facial
challenges to the Measure, the superior court invalidated these
provisions, finding that they were preempted because they
(1) frustrate the purpose of state law, (2) attempt to regulate the
field of subsurface oil and gas activity, which has been fully
occupied by the State, and (3) conflict with the federal SDWA.
The superior court’s determination was correct. As our
Supreme Court has made plain, “[W]hen a statute or statutory
scheme seeks to promote a certain activity . . . local regulation
12
cannot be used to completely ban the activity or otherwise frustrate
the statute’s purpose.” (Great W. Shows, Inc. v. Cnty. of L.A. (2002)
27 Cal.4th 853, 867–870, italics added.) Measure Z upends
California oil and gas policy, which is well-established in
California’s laws, state and federal regulations, and the federal
SDWA. State and federal law and policy on these issues are clear,
and Measure Z must yield to superior law.
To fulfill its dual statutory mandate of ensuring continued
energy production and environmental protection, DOGGR enforces
the most comprehensive suite of subsurface energy regulations in
the nation. Before an operator conducts any underground injection
or drills any new wells anywhere in the state, that operator must
secure DOGGR’s approval and subject itself to extensive
regulations. This regulatory regime fully occupies the field of
subsurface energy production. Appellants cannot sidestep that fact
by labeling Measure Z’s prohibitions as mere “land use” regulation.
By attempting to completely ban what is expressly permitted by
state and federal law, as well as purporting to regulate certain
subsurface activities—underground injection and drilling new
wells—that are comprehensively regulated by DOGGR, Measure Z
exceeds local authority and is thereby preempted. Accordingly, the
13
superior court’s decision was correct, and this Court should
affirm.1
II. FACTUAL BACKGROUND
A. Chevron’s Monterey County Operations
Chevron’s operations in Monterey County are confined to the
area around the small town of San Ardo, in the southeastern
corner of the County. San Ardo is far from major population
centers and has around 500 residents. (9:AA 22742 [Declaration of
Catherine Reimer (“Reimer Decl.”), ¶ 4].)
Oil was discovered in San Ardo in 1947. (9:AA 2233
[Declaration of Dallas Tubbs in Support of Chevron (“Tubbs
Decl.”), ¶ 3].) In 1949, Monterey County granted the first operator,
the Texas Company, a permit to produce oil at the field. (11:AA
2645–2656.) The permit is broadly worded, allowing the Operator
to “drill for and/or remove oil, gas, or other hydrocarbon
substances[.]” (11:AA 2645.) Chevron or its predecessors have
lawfully operated an oil field at San Ardo continuously since 1949.
(9:AA 2234 [Tubbs Decl. ¶ 7].)
1
To avoid duplication, the Chevron Plaintiffs join in the appellate
briefing submitted by the other Measure Z Plaintiffs.
2 Citations to Appellants’ Appendix submitted to this Court on
appeal denote volume number, then page number, and (as
necessary) line number. Such citation may also include reference
to tabs included by Appellants.
14
Measured by current production, the San Ardo oil field is
California’s eighth largest. (9:AA 2233 [Tubbs Decl., ¶ 3]; 12:AA
2854.) The oil at San Ardo is found in layers called “formations,”
which are located more than a thousand feet below the surface.
The formations at San Ardo are made of sand that is permeable
and porous, as distinguished from other formations made of rock.
The oil in the formations is mixed with water. In fact, 95 percent
of what Chevron pumps out of the ground is water, and only 5
percent is oil. (9:AA 2244 [Tubbs Decl., ¶ 32]; 32:AA 7690 [Order
at 2].) This “produced water” from the formation is salty and dirty
because it is mixed with oil and other sediment. (Ibid.) The low
quality of this water means that the water must be treated and/or
disposed of after it is produced. (9:AA 2245 [Tubbs Decl., ¶ 37].)
The crude oil produced at San Ardo is “heavy,” meaning that
the oil is viscous and cannot easily flow into production wells under
normal conditions. (9:AA 2244 [Tubbs Decl., ¶ 32].) In fact, it has
the consistency of ketchup. (9:AA 2249 [Tubbs Decl., ¶ 43].) The
high viscosity of the oil requires operators to use enhanced oil
recovery techniques to assist production. (9:AA 2244 [Tubbs Decl.,
¶ 33].) Chevron primarily uses steamflooding—using steam to
heat the oil—to reduce the oil’s viscosity. During steamflooding,
steam is generated on the surface and injected into the formation.
The heat from the steam lightens the oil and allows it to be pumped
out. (9:AA 2249–2250 [Tubbs Decl., ¶¶ 43–44].)
15
When heating the formation, Chevron injects steam into an
expanding area to heat wide areas of the field, creating what is
called the “steam chest.” (9:AA 2249–2253 [Tubbs Decl., ¶¶ 44–
47].) The steam chest heats large portions of the formation, lowers
the viscosity of the oil, and allows a greater percentage of the oil to
be produced. The steam chest requires close monitoring and
careful attention. Chevron monitors the temperature and pressure
of the steam chest, removing water to reduce the pressure and
injecting more steam at the edge of the steam chest to keep it
growing and to prevent collapse. (9:AA 2250–2253 [Tubbs Decl.,
¶¶ 45–47].) It takes many years to develop the steam chest, and, if
Chevron stopped drilling wells or adding steam into the formation,
the steam chest would collapse. In the 1980s, Texaco stopped
continuous steam injection at one of its steamflooding operations
in San Ardo, and the steam chest immediately collapsed, stopping
oil production. (9:AA 2257–2258 [Tubbs Decl., ¶ 58].)
The steamflooding also helps Chevron put some of the
produced water back into the formation. About 30 percent of
produced water is reinjected under the surface as steam. (9:AA
2246–2247 [Tubbs Decl., ¶ 38].) About 45 percent of Chevron’s
produced water is reinjected back into the formation through
disposal wells. (Ibid.) The remainder, about 25 percent of produced
water, is sent through Chevron’s reverse osmosis (“RO”) facility.
(Ibid.) Chevron then sends the clean water (about 75 percent of the
16
total water sent through the RO facility) into a groundwater
recharge basin. (9:AA 2248–2249 [Tubbs Decl., ¶ 41].) The
remaining salty water (about 25 percent of the water sent through
the RO facility) is reinjected into the formation. (Ibid.) Chevron’s
RO plant produces about 520 million gallons of purified water per
year for the County’s beneficial use. (9:AA 2246–2247 [Tubbs Decl.,
¶ 38].)
B. State and Federal Laws Regulating Oil and Gas
Operations
A complex web of state and federal laws and regulations
governs oil and gas production, occupying the field of subsurface
activities. As the superior court explained, “Oil and gas operations
are governed by Division 3 of the Public Resources Code (Pub.
Resources Code, § 3000, et seq.) and its implementing regulations
(Cal. Code Reg., tit. 14, § 1712, et seq.).” (32:AA 7705 [Order at
17].)
DOGGR is the state agency tasked with administering these
laws and regulations. DOGGR’s mandate is to “administer [these
laws] so as to encourage the wise development of oil and gas
resources.” (Pub. Resources Code, § 3106, subd. (d).) DOGGR also
has a mandate “as a policy of this state” that oil operators are
“allow[ed] . . . to do what a prudent operator using reasonable
diligence would do, having in mind the best interests of the lessor,
lessee, and the state in producing and removing hydrocarbons[.]”
17
(Id., § 3106, subd. (b).) This specifically includes “the injection of
air, gas, water, or other fluids into the productive strata . . . for the
reduction of viscosity of the hydrocarbon[.]” (Ibid.)
Division 3 of the Public Resources Code regulates oil and gas
exploration and extraction in detail, including “notices of intent to
drill and abandon ([Pub. Resources Code,] §§ 3203, 3229); bonding
(§§ 3204-3207); abandonment of wells (§ 3208); recordkeeping
(§§ 3210-3216); blowout prevention (§ 3219); use of well casing to
prevent water pollution (§ 3220); protection of water supplies
(§§ 3222, 3228); repairs (§ 3225); regulation of production facilities
(§ 3270); waste of gas (§§ 3300-3314); subsidence (§ 3315-3347);
well spacing (§§ 3600-3609); unit operations (§§ 3635-3690); and
regulation of oil sumps (§§ 3780-3787).” (32:AA 7705 [Order at
17].)
Further, the U.S. EPA regulates “Class II” injection wells
pursuant to the UIC program, which is part of the federal SDWA.
(42 U.S.C. § 300f, et seq.) U.S. EPA has delegated to DOGGR the
authority to permit and regulate UIC projects in California. (40
C.F.R. § 147.250.) “Class II” injection wells include wells used to
enhance oil recovery through the injection of fluids, such as steam
and water. (40 C.F.R. § 144.6, subd. (b).) “DOGGR strictly
regulates UIC projects, enforces testing and equipment
requirements, and requires both monthly reporting of injection
18
activity and chemical analysis of injection fluids.” (32:AA 7706
[Order at 18, citing Cal. Code Regs., tit. 14, § 1724.9, 1724.10].)
C. Measure Z Passes, Prohibiting Three Specific
Subsurface Activities
On March 17, 2015, the Monterey County Board of
Supervisors rejected a proposed interim ordinance prohibiting well
stimulation treatments (which includes hydraulic fracturing, or
“fracking”). (1:AR 1–2.)3 Intervenor Protect Monterey County
(“PMC”) was formed in response with the intention of developing a
voter initiative to ban fracking. (6:AA 1448.) Measure Z, the result
of PMC’s effort, was included on the November 2016 ballot. (2:AR
314.)
Measure Z contains three prohibitions on subsurface
activities, two of which are at issue in this appeal. (1:AR 128–129.)
First, Policy LU-1.21 bans well stimulation treatments, including
fracking.4 Second, Policy LU-1.22, prohibits wastewater injection
and impoundment “on all lands within the County’s
unincorporated area.” (1:AR 128–129.) LU-1.22 gives a five-year
phase-out for nonconforming underground injection and
3Citations to the Administrative Record certified by the trial court
and now before this Court on appeal denote volume number, then
page number, and (as necessary) line number.
4Because of the manner in which the superior court resolved the
case, this provision is at not issue in this appeal.
19
impoundment, requiring that all nonconforming uses cease
operation within five years of the effective date of Measure Z.
(Ibid.) Third, Policy LU-1.23 prohibits the use of any land located
in the County for the “drilling of new oil and gas wells[.]”(1:AR
129.) The provision bans all new wells, including wells drilled for
the purpose of underground injection or disposal, in addition to
wells drilled for the purpose of producing oil and gas. (Ibid.)
The campaign to promote Measure Z focused almost entirely
on the first provision banning fracking. (See 11:AA 2632–2635.)
Because of the formation’s sandy, porous nature, Chevron does not
use fracking at San Ardo and is unlikely to use it in the future
because it is not necessary for oil recovery and likely would not
increase the oil recovery there. (9:AA 2249 [Tubbs Decl., ¶ 42].) By
contrast, Measure Z’s other two provisions, banning wastewater
injection and drilling new wells, would dramatically reduce
Chevron’s ability to produce oil at San Ardo. (9:AA 2258–2259
[Tubbs Decl., ¶ 60].) Measure Z would have cascading impacts on
the community at San Ardo, decimating the revenue streams of
local businesses and local royalty owners (9:AA 2202 [Declaration
of John Orradre, ¶ 6]) and closing the San Ardo Union Elementary
School (9:AA 2277 [Reimer Decl., ¶ 11]).
On November 8, 2016, the voters approved Measure Z.
(1:AR 190, 195.)
20
III. PROCEDURAL HISTORY
On December 14, 2016, immediately after Measure Z’s
effective date, Chevron and other Plaintiffs filed their Petition for
Writ of Mandate and Complaint for Declaratory Relief and
Damages. (See 1:AA tab 2.) That same day, they filed a motion for
a stay of Measure Z’s effective date and the superior court granted
the stay. (1:AA tabs 3 & 4.) On January 17, 2017, Chevron and
associated Plaintiffs—including the local school district, a group of
royalty owners, and a number of local businesses that service the
oil field (the “Chevron Plaintiffs”5)—filed a First Amended Verified
Petition for Writ of Mandamus and Complaint for Damages and
Declaratory Relief (“FAC”). (1:AA tab 8.)
On February 2, 2017, Protect Monterey County and the
Center for Biological Diversity filed a Motion for Leave to
Intervene. (1:AA tabs 9–14.) The Chevron Plaintiffs opposed the
Motion (4:AA tabs 26–28), which the superior court granted in part
and denied in part (5:AA tab 36), permitting Protect Monterey
County and Dr. Laura Solorio (the “Intervenors”) to intervene but
denying the Center for Biological Diversity’s request. (Ibid.)
5The Chevron Plaintiffs include Chevron U.S.A. Inc.; Key Energy
Services, LLC; Ensign United States Drilling (California) Inc.;
Maureen Wruck; Gazelle Transportation, LLC; Peter Orradre;
Martin Orradre; James Orradre; Thomas Orradre; John Orradre;
Stephen Maurice Boyum; and San Ardo Union Elementary School
District.
21
On June 26, 2017, following briefing (see 5:AA tabs 44, 53,
54, 57), the superior court issued its Order Setting Schedule for
Phase 1 Proceedings in Measure Z Related Cases. (7:AA tab 61.)
The superior court ordered that the issues addressed during Phase
1 would be constitutional and pre-emption challenges, as well as
any purely legal challenges. (7:AA 1567.)
After the parties filed their Opening (9:AA tabs 76–82; 11–
12:AA tabs 89–94), Opposition (15–18:AA tabs 96–107), and Reply
briefs (19:AA tabs 117–122), respectively, the four-day trial began
on November 13, 2017.
At trial, the Chevron Plaintiffs argued that Measure Z was
preempted by both state and federal law, contending that:
It is the policy of the State, pursuant to Public
Resources Code Section 3106(b), that DOGGR “shall .
. . permit the owners or operators of the wells to
utilize all methods and practices known to the oil
industry for the purpose of increasing the ultimate
recovery of underground hydrocarbons[.]” (23:AA
5563.)
It is further the policy of the State that its people
have an interest in these resources and that it is up
to the State to oversee those resources. (23:AA 5579.)
As set forth in the Attorney General Opinion of 1976,
the regulation of subsurface techniques and activities
is preempted. (23:AA 5569, 5584.)
22
Section 3106(b) specifically allows for the activities
proscribed under Measure Z’s “phase-out” provision.
(23:AA 5608.)
Measure Z conflicted with federal law’s Safe Drinking
Water Act, which made clear in its legislative history
that it should “not impos[e] unnecessary
requirements which would impede or interfere with
oil or gas production” and under which the U.S. EPA
had delegated its authority to DOGGR to oversee the
state UIC program. (23:AA 5589.)
Intervenors’ argument that Measure Z regulated land
use was pretextual. (23:AA 5617–25.)
In opposition the Intervenors argued that:
Measure Z is a land use regulation.
There exists a “presumption against preemption” and
it applies with force in favor of Measure Z as a local
land use initiative and that “Measure Z does not
conflict with any state or federal regulation.” (18:AA
4301–02.)
Measure Z’s proscription against new wells and other
surface activities are not preempted by state law
because they “do not contradict or impliedly enter the
state’s limited field of oil and gas regulation of
downhole activities.” (18:AA 4302.)
The SDWA does not preempt Measure Z because the
federal law’s savings clause applies and the statute
was not intended to occupy the field. (18:AA 4314–
19.)
On December 28, 2017, the superior court filed its Intended
23
Decision. (30:AA tab 167.) On January 25, 2018, after further
briefing (30–31:AA tabs 168–174), the superior court filed its Final
Statement of Decision (31:AA Tab 175), finding, among other
things, that:
“DOGGR regulations are extensive. . . . [And] [t]hese
regulations are intended to be ‘statewide in
application for onshore drilling, production and
injection operations.’” (31:AA 7562, citations omitted.)
“[I]n California, the U.S. EPA has delegated to
DOGGR the authority to permit and regulate ‘Class
II’ injection wells under the Underground Injection
Control (UIC) program.” (Ibid.)
“Measure Z’s purported prohibition on certain ‘land
uses’ is clearly a pretextual attempt to do indirectly
what it cannot do directly.” (31:AA 7570.)
Measure Z’s “phase-out” of wastewater injection and
impoundment was preempted under state law
because it is in conflict with and contradictory to
general law. (31:AA 7572.) And that the provision
was preempted under federal law because it conflicts
with the SDWA. (31:AA 7574.)
Measure Z’s prohibition against new wells was
preempted under state law because it “directly
conflicts with DOGGR’s mandate” under Public
Resources Code Section 3106. (Id. at 7578.) And that
the provision was preempted under federal law
because it, too, conflicts with the SDWA. (Ibid.)
The question as to whether Measure Z’s provision on
well stimulation treatment was preempted was not
ripe because no Petitioner or other party was either
24
engaging in or proposing to engage in such activity.
(Id. at 7568.)
Following the March 9, 2018 filing of the Notice of Entry of
Judgment and Writ (32:AA tab 179), the Intervenors timely filed
their Notice of Appeal. (32:AA tab 181.)6
IV. STANDARD OF REVIEW
“In reviewing a judgment granting a writ of mandate,
[appellate courts] apply the substantial evidence standard of
review to the court's factual findings, but independently review its
findings on legal issues.” (Citizens for Amending Proposition L v.
City of Pomona (2018) 28 Cal.App.5th 1159, 1186, quotation
omitted.) “Interpretation of statutes, including local ordinances
and municipal codes, is subject to de novo review.” (Ibid.)
Measure Z is a local initiative in conflict with state and
federal law. As such, even though Measure Z was enacted by
County voters, this Court should “apply similar principles [as]
when construing constitutional provisions and statutes. Our
primary concern is giving effect to the intended purpose of the
provisions at issue.” (Cal. Cannabis Coal. v. City of Upland (2017)
3 Cal.5th 924, 933, citation omitted.) This begins with textual
analysis “by ascribing to words their ordinary meaning, while
taking account of related provisions and the structure of the
6 The County filed a Notice of Appeal on March 23, 2018 (32:AA
tab 180) but later formally abandoned it (32:AA tab 198).
25
relevant statutory and constitutional scheme.” (Ibid., citation
omitted.) If Measure Z remains opaque, this Court “may consider
extrinsic sources, such as an initiative’s ballot materials.” (Id. at
p. 934, citation omitted.) For constitutional analysis such as this,
the “sole function is to evaluate it legally in the light of established
constitutional standards.” (Briggs v. Brown (2017) 3 Cal.5th 808,
828, quotation omitted.) “[I]ndependent judgment” is applied
“when construing constitutional and statutory provisions.” (Cal.
Cannabis Coal., supra, 3 Cal.5th at p. 934, citation omitted.)
V. ARGUMENT
Measure Z is preempted because it is contrary to state and
federal laws that permit and promote oil and gas production. The
superior court properly recognized three independent grounds for
preemption.
1. Measure Z directly conflicts with state law
because it frustrates the purpose of the state’s system of
laws and regulations promoting, permitting, and
regulating oil and gas production. The Legislature has
mandated that the State, through DOGGR, “meet oil and gas
needs in this state” by “encourag[ing] the wise development” of oil
and gas production. (Pub. Resources Code, § 3106, subd. (d).) The
Legislature even declared that, “as a policy of the state[,]” specific
production techniques—including the very techniques prohibited
26
under Measure Z—are permitted and allowed. (Id., § 3106, subd.
(b).) Measure Z’s ban on wastewater reinjection and new wells
frustrates the purpose of state law, which expressly seeks to
permit and promote the production of oil and gas. Such a
regulation creates a conflict with state law and is preempted. (See
City of Riverside v. Inland Empire Patients Health & Wellness Ctr.,
Inc. (2013) 56 Cal.4th 729, 760.)
2. Measure Z seeks to regulate specific subsurface
production techniques, which is a regulatory field within
the exclusive purview of DOGGR pursuant to state law.
Since at least 1976, DOGGR has fully occupied the regulatory field
of s
Preview
1 ROB BONTA Attorney General of California 2 NORMA N. FRANKLIN (SBN 266827) Supervising Deputy Attorney General 3 LEENA M. SHEET (SBN 235415) JACKIE K. VU (SBN 253533) 4 ELISE K. STOKES (SBN 288211) AMANDA B. JOHNSON (SBN 303457) 5 STEVEN W. KERNS (SBN 333983) DAVID WHITE (SBN 351263) 6 Deputy Attorneys General 300 South Spring Street, Suite 1702 7 Los Angeles, CA 90013-1230 Exempt from Filing Fees Pursuant Telephone: (213) 269-6226 to Gov. Code § 6103 8 Facsimile: (916) 731-2121 E-mail: Steven.Kerns@doj.ca.gov 9 Attorneys for Defendants and Respondents 10 Governor Gavin Newsom, California Department of Conservation, Geologic Energy Management 11 Division, and Gabe Tiffany 12 SUPERIOR COURT OF THE STATE OF CALIFORNIA 13 COUNTY OF KERN 14 CHEVRON U.S.A. INC., CASE NO.: BCV-22-100748 15 Petitioner and Plaintiff, RESPONDENT GOVERNOR NEWSOM’S REQUEST FOR JUDICIAL NOTICE IN 16 v. SUPPORT OF MOTION FOR MOTION AND MOTION FOR SUMMARY 17 JUDGMENT OR, IN THE GAVIN NEWSOM, in his official capacity ALTERNATIVE, SUMMARY 18 as Governor of California; CALIFORNIA ADJUDICATION OF CAUSES OF DEPARTMENT OF CONSERVATION, ACTION 19 GEOLOGIC ENERGY MANAGEMENT DIVISION, a State agency; GABE (Filed Concurrently with Motion for Summary 20 TIFFANY, in his official capacity as Interim Judgment, Declaration of Steven W. Kerns, State Oil and Gas Supervisor; and DOES 1 Separate Statement of Undisputed Material 21 through 25, inclusive, Facts and Supporting Evidence, Compendium of Evidence and [Proposed] Order) 22 Respondents and Defendants. Date: June 20, 2024 23 Time: 8:30 a.m. Dept: H 24 Judge: The Honorable Bernard C. Barmann, Jr. 25 Trial Date: October 14, 2024 26 Time: 9:00 a.m. Action Filed: March 17, 2022 27 28 1 Respondents’ Request for Judicial Notice in Support of Not. of Motion and Motion for Judgment; Memo. of Points and Auth.; Decl. of Steven W. Kerns (BCV-22-100748) 1 AERA ENERGY LLC, a California limited 2 liability company, 3 Petitioner and Plaintiff, 4 v. 5 GAVIN NEWSOM, in his official capacity 6 as Governor of California; CALIFORNIA DEPARTMENT OF CONSERVATION, 7 GEOLOGIC ENERGY MANAGEMENT DIVISION, a State agency; GABE 8 TIFFANY, in his official capacity as interim State Oil and Gas Supervisor; and DOES 1 9 through 25, inclusive, 10 Respondents and Defendants. 11 WESTERN STATE PETROLEUM ASSOCIATION, 12 Petitioner and Plaintiff, 13 v. 14 GAVIN NEWSOM, in his official capacity as Governor of California; CALIFORNIA 15 DEPARTMENT OF CONSERVATION, GEOLOGIC ENERGY MANAGEMENT 16 DIVISION, a State agency; GABE TIFFANY, in his official capacity as Interim 17 State Oil and Gas Supervisor; and DOES 1 through 25, inclusive, 18 Respondents and Defendants. 19 20 21 22 23 24 25 26 27 28 2 Respondents’ Request for Judicial Notice in Support of Not. of Motion and Motion for Judgment; Memo. of Points and Auth.; Decl. of Steven W. Kerns (BCV-22-100748) 1 TO THE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD: 2 PLEASE TAKE NOTICE THAT, pursuant to California Evidence Code sections 452 and 3 453, respondents and defendants Gavin Newsom, California Department of Conservation, Geologic 4 Energy Management Division, Uduak-Joe Ntuk, request that the Court take judicial notice of the 5 following documents: 6 1. Attached as Exhibit 1, Chevron U.S.A.’s Respondent’s Brief filed on April 18, 2019 in 7 County of Monterey v. Chevron U.S.A., H045791, Court of Appeal of California, Sixth Appellate 8 District. 9 2. Attached as Exhibit 2, Aera Energy LLC’s Respondent’s Brief filed on April 19, 2019 10 in County of Monterey v. Chevron U.S.A., H045791, Court of Appeal of California, Sixth Appellate 11 District. 12 3. Attached as Exhibit 3, May 17, 2023 ruling on Respondents’ Motion for Protective 13 Order Prohibiting the deposition of Governor Newsom, Secretary of Natural Resources Wade 14 Crowfoot, Acting Oil & Gas Supervisor Gabe Tiffany and Former Oil & Gas Supervisors Uduak- 15 Joe Ntuk and Ken Harris. 16 REQUEST FOR JUDICIAL NOTICE 17 Evidence Code section 452, subdivision (d)(1), authorizes this Court to take judicial notice 18 of “[r]ecords of (1) any court of this state.” The order and briefs described above and attached as 19 Exhibits 1-3 are the proper subject of judicial notice under Evidence Code section 452, subdivision 20 (d), as they are records of this Court and the Court of Appeal, Sixth Appellate District of this state. 21 Courts may take judicial notice of records and briefs filed in other California state courts. (See, e.g. 22 S.Y. v. Superior Court (2018) 29 Cal.App.5th 324, 331 [California Court of Appeal taking judicial 23 notice of records and briefs filed in related California appeal]; Padron v. Watchtower Bible & Tract 24 Society of New York, Inc. (2017) 16 Cal.App.5th 1246 [California Court of Appeal granted request 25 for judicial notice of brief filed by party in a different California Court of Appeal case].) 26 /// 27 /// 28 /// 3 Respondents’ Request for Judicial Notice in Support of Not. of Motion and Motion for Judgment; Memo. of Points and Auth.; Decl. of Steven W. Kerns (BCV-22-100748) 1 Evidence Code section 453 provides that a trial court shall take judicial notice of any matter 2 specified in Evidence Code section 452 as long as the requesting party: “(a) Gives each adverse 3 party sufficient notice of the request, through the pleadings or otherwise, to enable such adverse 4 party to prepare to meet the request; and (b) [f]urnishes the court with sufficient information to 5 enable it to take judicial notice of the matter.” The Governor has met the requirements of Evidence 6 Code sections 452 and 453 in this case, and therefore respectfully request that the Court take judicial 7 notice of the records listed herein. 8 Dated: April 3, 2024 Respectfully submitted, 9 ROB BONTA 10 Attorney General of California NORMA N. FRANKLIN 11 Supervising Deputy Attorney General 12 13 STEVEN W. KERNS Deputy Attorney General 14 Attorneys for Defendants and Respondents Governor Gavin Newsom, California 15 Department of Conservation, Geologic Energy Management Division, and Gabe 16 Tiffany 17 18 19 20 21 22 23 24 25 26 27 28 4 Respondents’ Request for Judicial Notice in Support of Not. of Motion and Motion for Judgment; Memo. of Points and Auth.; Decl. of Steven W. Kerns (BCV-22-100748) EXHIBIT 1 H045791 IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT COUNTY OF MONTEREY, ET AL. Appellants and Cross-Respondents, v. CHEVRON U.S.A. INC., ET AL. Respondents and Cross-Appellants. On Appeal from the Superior Court, State of California, County of Monterey Case No. 16-CV-3978 (and consolidated cases) The Honorable Thomas Wills RESPONDENT’S BRIEF BY CHEVRON U.S.A. INC. THEODORE J. BOUTROUS, JR., JEFFREY D. DINTZER, Bar No. 132099 Bar No. 139056 WILLIAM E. THOMSON, MATTHEW WICKERSHAM, Bar No. 187912 Bar No. 241733 DANA L. CRAIG, Bar No. 251865 ALSTON & BIRD LLP DIONE GARLICK, Bar No. 293012 333 South Hope St., 16th Floor GIBSON, DUNN & CRUTCHER, LLP Los Angeles, California 90071 333 South Grand Avenue, 54th Floor Tel: (213) 576-1000; Los Angeles, California 90071 Fax: (213) 576-1100 Tel: (213) 229-7000; jeffrey.dintzer@alston.com, Fax: (213) 229-7520 matt.wickersham@alston.com, tboutrous@gibsondunn.com Attorneys for Respondent CHEVRON U.S.A. INC. INITIAL CERTIFICATE OF INTERESTED ENTITIES OR PERSONS (Cal. Rules of Court, Rule 8.208) Full name of interested Nature of interest entity of person (Explain): Chevron Corporation Has an ownership interest of 10 percent or more in Chevron U.S.A. Inc. Chevron Investments Inc. Has an ownership interest of 10 percent or more in Chevron U.S.A. Inc. Texaco Inc. Has an ownership interest of 10 percent or more in Chevron U.S.A. Inc. Chevron U.S.A. Holding Inc. Has an ownership interest of 10 percent or more in Chevron U.S.A. Inc. The undersigned certifies that the above listed persons or entities (corporations, partnerships, firms or any other association, but not including government entities or their agencies), have either (i) an ownership interest of 10 percent of more in the party if an entity; or (ii) a financial or other interest in the outcome of the proceeding that the justices should consider in determining whether to disqualify themselves, as defined in rule 8.208(e)(2). DATED: April 18, 2019 ALSTON & BIRD LLP /s/ Jeffrey D. Dintzer Jeffrey D. Dintzer Attorney for Respondents CHEVRON U.S.A. INC. 2 TABLE OF CONTENTS Page I. INTRODUCTION ................................................................ 11 II. FACTUAL BACKGROUND ................................................ 14 A. Chevron’s Monterey County Operations .................. 14 B. State and Federal Laws Regulating Oil and Gas Operations .......................................................... 17 C. Measure Z Passes, Prohibiting Three Specific Subsurface Activities ................................................. 19 III. PROCEDURAL HISTORY .................................................. 21 IV. STANDARD OF REVIEW................................................... 25 V. ARGUMENT ........................................................................ 26 A. Measure Z Frustrates the Purpose of State Law by Banning Activities that State Law Promotes and Permits. ............................................................... 29 1. Local Governments May Not Prohibit Activities Permitted and Promoted by State Law, Such as the Development of Oil and Gas Production With State- Approved Techniques........................................ 29 2. Contrary to Appellants’ View, No “Presumption Against Preemption” Applies to Measure Z’s Complete Ban on State-Sanctioned and Promoted Production Activities......................................... 34 TABLE OF CONTENTS (continued) Page 3. Contrary to Appellants’ Claim, State Law Need Not Mandate Maximum Oil Production in Order to Preempt Local Production Bans. ............................................... 37 B. Measure Z Is Preempted Because It Impermissibly Regulates Subsurface Activity, a Field Fully Occupied by State Law........................... 40 1. State Law Fully Occupies the Regulatory Field of Subsurface Petroleum Production Activity............................................................... 41 2. Measure Z’s Ban on Wastewater Injection Is Preempted Because It Prohibits a Specific Subsurface Production Technique the State Permits. ............................................. 49 3. Measure Z’s Ban on New Wells is Preempted Because It Prohibits a Specific Subsurface Production Technique Allowed by the State. ...................................................... 52 4. The Legislature Has Not Left Room for Local Regulation of Subsurface Activities. ...... 53 5. The County Cannot Do Indirectly What It Cannot Do Directly: Measure Z is Not a Land Use Regulation. ....................................... 59 C. Measure Z is an Obstacle to the Federal Safe Drinking Water Act. .................................................. 63 VI. CONCLUSION..................................................................... 70 CERTIFICATE OF WORD COUNT ............................................. 71 PROOF OF SERVICE ................................................................... 72 4 TABLE OF AUTHORITIES Page STATE CASES Beverly Oil Co. v. City of L.A. (1953) 40 Cal.2d 552 ................................................................. 54 Big Creek Lumber Co. v. Cnty. of Santa Cruz (2006) 38 Cal.4th 1139........................................................ 36, 62 Briggs v. Brown (2017) 3 Cal.5th 808.................................................................. 25 Cal. Assn. of Psychology Providers v. Rank (1990) 51 Cal.3d 1 ..................................................................... 27 Cal. Building Industry Assn. v. Bay Area Air Quality Mgmt. Dist. (2015) 62 Cal.4th 369................................................................ 58 Cal. Cannabis Coal. v. City of Upland (2017) 3 Cal.5th 924, 933.................................................... 25, 26 Cal. Grocers Assn. v. City of L.A. (2011) 52 Cal.4th 177................................................................ 35 Citizens for Amending Proposition L v. City of Pomona (2018) 28 Cal.App.5th 1159, 1186............................................ 25 City of Dublin v. Cnty. of Alameda (1993) 14 Cal.App.4th 264 ........................................................ 38 City of Riverside v. Inland Empire Patients Health & Wellness Ctr., Inc. (2013) 56 Cal.4th 729........................................ 27, 32, 33, 39, 40 TABLE OF AUTHORITIES (continued) Page Cohen v. Board of Supervisors (1985) 40 Cal.3d 277 ................................................................. 63 Credit Mgrs. Assn. of Cal. v. Countrywide Home Loans, Inc. (2006) 144 Cal.App.4th 590 ...................................................... 68 Desert Turf Club v. Bd. of Sup’rs of Riverside Cnty. (1956) 141 Cal.App.2d 446 ................................................. 60, 61 Fiscal v. City & Cnty. of S.F. (2008) 158 Cal.App.4th 895 ........................ 29, 32, 38, 39, 40, 62 Friel v. Cnty. of L.A. (1959) 172 Cal.App.2d 142 ....................................................... 61 Grafton Partners LP v. Super. Ct. (2005) 36 Cal.4th 944................................................................ 56 Great W. Shows, Inc. v. Cnty. of L.A., (2002) 27 Cal.4th 853............................ 13, 29, 31, 32, 39, 40, 62 Hermosa Beach Stop Oil Coal. v. City of Hermosa Beach (2001) 86 Cal.App.4th 534 ........................................................ 63 Higgins v. City of Santa Monica (1964) 62 Cal.2d 24 ................................................................... 62 Lockard v. City of L.A. (1949) 33 Cal.2d 453 ................................................................. 37 Monterey Oil Co. v. City Court of City of Seal Beach (1953) 120 Cal.App.2d 41 ......................................................... 61 N. Cal. Psychiatric Society v. City of Berkeley (1986) 178 Cal.App.3d 90 ................................................... 35, 37 6 TABLE OF AUTHORITIES (continued) Page O’Connell v. City of Stockton (2007) 41 Cal.4th 1061............................................ 48, 49, 52, 64 People ex rel. Deukmejian v. Cnty. of Mendocino (1984) 36 Cal.3d 476 ..................................................... 58, 59, 60 People ex rel. Younger v. Cnty. of El Dorado (1979) 96 Cal.App.3d 403 ......................................................... 69 People v. Nguyen (2014) 222 Cal.App.4th 1168 .............................................. 36, 37 Personal Watercraft Coal. v. Bd. of Sup’rs (2002) 100 Cal.App.4th 129 ...................................................... 69 Yamaha Corp. of Am. v. State Bd. of Equalization (1998) 19 Cal.4th 1.................................................................... 57 FEDERAL CASES Blue Circle Cement, Inc. v. Bd. of Cnty. Comrs. (10th Cir. 1994) 27 F.3d 1499............................................. 31, 32 EQT Prod. Co. v. Wender (S.D.W.Va. 2016) 191 F.Supp.3d 583, 599......................... 67, 68 Legal Envtl. Assistance Fdn., Inc. v. U.S. EPA (11th Cir. 1997) 118 F.3d 1467................................................. 65 Marblehead Land Co. v. City of L.A. (9th Cir. 1931) 47 F.2d 528....................................................... 61 Natural Resources Defense Council, Inc. v. U.S. EPA (1st Cir. 1987) 824 F.2d 1258 ................................................... 65 W. Neb. Resources Council v. U.S. EPA (8th Cir. 1991) 943 F.2d 867..................................................... 66 7 TABLE OF AUTHORITIES (continued) Page STATE STATUTES Pub. Resources Code § 3000, et seq. ........................... 16, 19, 20, 42 Pub. Resources Code § 3008 .......................................................... 43 Pub. Resources Code § 3012 .......................................................... 53 Pub. Resources Code § 3013. ......................................................... 42 Pub. Resources Code § 3100 .......................................................... 58 Pub. Resources Code § 3106 ...................................................passim Pub. Resources Code § 3130-3132................................................. 44 Pub. Resources Code § 3150-3161................................................. 44 Pub. Resources Code § 3180-3187................................................. 44 Pub. Resources Code § 3203 .............................................. 17, 37, 43 Pub. Resources Code § 3204-3207................................................. 17 Pub. Resources Code § 3208 .......................................................... 17 Pub. Resources Code § 3210-3216................................................. 17 Pub. Resources Code § 3219 .......................................................... 17 Pub. Resources Code § 3220 .......................................................... 17 Pub. Resources Code § 3222 .......................................................... 17 Pub. Resources Code § 3225 .......................................................... 17 Pub. Resources Code § 3228 .......................................................... 17 Pub. Resources Code § 3229 .......................................................... 17 8 TABLE OF AUTHORITIES (continued) Page Pub. Resources Code § 3240-3241................................................. 44 Pub. Resources Code § 3250-3258................................................. 44 Pub. Resources Code § 3270 .................................................... 17, 44 Pub. Resources Code § 3300-3347........................................... 17, 44 Pub. Resources Code § 3400 .................................. 10, 13, 32, 40, 44 Pub. Resources Code § 3460-3494................................................. 44 Pub. Resources Code § 3503 .......................................................... 44 Pub. Resources Code § 3600-3609........................................... 17, 54 Pub. Resources Code § 3635-3690........................................... 17, 55 Pub. Resources Code § 3690 ........................................ 57, 58, 59, 61 Pub. Resources Code § 3700-3776, 3800-3827 ............................. 44 Pub. Resources Code § 3780-3787........................................... 17, 44 Pub. Resources Code § 3850-3865................................................. 44 FEDERAL STATUTES 42 U.S.C. § 300f, et seq............................................................. 17, 20 42 U.S.C. § 300h................................................................. 64, 65, 67 42 U.S.C. § 6929............................................................................. 32 STATE REGULATIONS Cal. Code Regs., Title 14, § 1712, et seq.................................. 16, 44 Cal. Code Regs., Title 14, § 1724.6.......................................... 50, 66 Cal. Code Regs., Title 14, § 1724.9.................................... 18, 21, 50 9 TABLE OF AUTHORITIES (continued) Page Cal. Code Regs., Title 14, § 1724.10............................ 18, 21, 50, 53 FEDERAL REGULATIONS 40 C.F.R. § 144.6 ................................................................ 17, 20, 22 40 C.F.R. § 147.250 ............................................................ 17, 20, 66 10 I. INTRODUCTION Measure Z was marketed to Monterey County voters as an anti-fracking provision, even though there is no fracking in the County of Monterey, and the County’s geology means that there is unlikely to be fracking in the future. Despite the emphasis on fracking by Measure Z proponents, the real impact of Measure Z would be to prohibit two subsurface petroleum production activities that are unrelated to fracking: (1) drilling new wells, and (2) reinjecting back into the ground the produced water that is an inevitable by-product of oil and gas production. Because longstanding state and federal regulations specifically permit these activities, the superior court correctly determined that Measure Z is preempted. California law provides that “the people of the State have a primary and supreme interest” in the “deposits of oil and gas within the State.” (Pub. Resources Code, § 3400.) The State’s Department of Conservation, Division of Oil, Gas and Geothermal Resources (“DOGGR”) is responsible for supervising and fostering the production of those petroleum resources. Indeed, it is the mandate of the State of California, codified in its Public Resources Code, that “[t]o best meet oil and gas needs in this state, the supervisor [DOGGR] shall administer this division so as to encourage the wise development of oil and gas resources.” (Id., 11 § 3106, subd. (d), italics added.) DOGGR is also responsible for protecting California’s drinking water through administration of the California Underground Injection Control (“UIC”) Program. That mandate stems from the United States Environmental Protection Agency’s (“U.S. EPA”) delegation of primacy over such matters arising under the federal Safe Drinking Water Act (“SDWA”). DOGGR fulfills this dual mandate to promote both energy production and environmental protection through an extensive network of regulations permitting and promoting wise oil and gas development. Measure Z’s prohibitions on drilling new oil and gas wells and reinjecting produced water back into the ground directly contradict California’s express policy to promote petroleum production, and obstruct DOGGR’s ability to fulfil its federal-law mandate to regulate underground produced water reinjection. After a multi-day bench trial addressing only the facial challenges to the Measure, the superior court invalidated these provisions, finding that they were preempted because they (1) frustrate the purpose of state law, (2) attempt to regulate the field of subsurface oil and gas activity, which has been fully occupied by the State, and (3) conflict with the federal SDWA. The superior court’s determination was correct. As our Supreme Court has made plain, “[W]hen a statute or statutory scheme seeks to promote a certain activity . . . local regulation 12 cannot be used to completely ban the activity or otherwise frustrate the statute’s purpose.” (Great W. Shows, Inc. v. Cnty. of L.A. (2002) 27 Cal.4th 853, 867–870, italics added.) Measure Z upends California oil and gas policy, which is well-established in California’s laws, state and federal regulations, and the federal SDWA. State and federal law and policy on these issues are clear, and Measure Z must yield to superior law. To fulfill its dual statutory mandate of ensuring continued energy production and environmental protection, DOGGR enforces the most comprehensive suite of subsurface energy regulations in the nation. Before an operator conducts any underground injection or drills any new wells anywhere in the state, that operator must secure DOGGR’s approval and subject itself to extensive regulations. This regulatory regime fully occupies the field of subsurface energy production. Appellants cannot sidestep that fact by labeling Measure Z’s prohibitions as mere “land use” regulation. By attempting to completely ban what is expressly permitted by state and federal law, as well as purporting to regulate certain subsurface activities—underground injection and drilling new wells—that are comprehensively regulated by DOGGR, Measure Z exceeds local authority and is thereby preempted. Accordingly, the 13 superior court’s decision was correct, and this Court should affirm.1 II. FACTUAL BACKGROUND A. Chevron’s Monterey County Operations Chevron’s operations in Monterey County are confined to the area around the small town of San Ardo, in the southeastern corner of the County. San Ardo is far from major population centers and has around 500 residents. (9:AA 22742 [Declaration of Catherine Reimer (“Reimer Decl.”), ¶ 4].) Oil was discovered in San Ardo in 1947. (9:AA 2233 [Declaration of Dallas Tubbs in Support of Chevron (“Tubbs Decl.”), ¶ 3].) In 1949, Monterey County granted the first operator, the Texas Company, a permit to produce oil at the field. (11:AA 2645–2656.) The permit is broadly worded, allowing the Operator to “drill for and/or remove oil, gas, or other hydrocarbon substances[.]” (11:AA 2645.) Chevron or its predecessors have lawfully operated an oil field at San Ardo continuously since 1949. (9:AA 2234 [Tubbs Decl. ¶ 7].) 1 To avoid duplication, the Chevron Plaintiffs join in the appellate briefing submitted by the other Measure Z Plaintiffs. 2 Citations to Appellants’ Appendix submitted to this Court on appeal denote volume number, then page number, and (as necessary) line number. Such citation may also include reference to tabs included by Appellants. 14 Measured by current production, the San Ardo oil field is California’s eighth largest. (9:AA 2233 [Tubbs Decl., ¶ 3]; 12:AA 2854.) The oil at San Ardo is found in layers called “formations,” which are located more than a thousand feet below the surface. The formations at San Ardo are made of sand that is permeable and porous, as distinguished from other formations made of rock. The oil in the formations is mixed with water. In fact, 95 percent of what Chevron pumps out of the ground is water, and only 5 percent is oil. (9:AA 2244 [Tubbs Decl., ¶ 32]; 32:AA 7690 [Order at 2].) This “produced water” from the formation is salty and dirty because it is mixed with oil and other sediment. (Ibid.) The low quality of this water means that the water must be treated and/or disposed of after it is produced. (9:AA 2245 [Tubbs Decl., ¶ 37].) The crude oil produced at San Ardo is “heavy,” meaning that the oil is viscous and cannot easily flow into production wells under normal conditions. (9:AA 2244 [Tubbs Decl., ¶ 32].) In fact, it has the consistency of ketchup. (9:AA 2249 [Tubbs Decl., ¶ 43].) The high viscosity of the oil requires operators to use enhanced oil recovery techniques to assist production. (9:AA 2244 [Tubbs Decl., ¶ 33].) Chevron primarily uses steamflooding—using steam to heat the oil—to reduce the oil’s viscosity. During steamflooding, steam is generated on the surface and injected into the formation. The heat from the steam lightens the oil and allows it to be pumped out. (9:AA 2249–2250 [Tubbs Decl., ¶¶ 43–44].) 15 When heating the formation, Chevron injects steam into an expanding area to heat wide areas of the field, creating what is called the “steam chest.” (9:AA 2249–2253 [Tubbs Decl., ¶¶ 44– 47].) The steam chest heats large portions of the formation, lowers the viscosity of the oil, and allows a greater percentage of the oil to be produced. The steam chest requires close monitoring and careful attention. Chevron monitors the temperature and pressure of the steam chest, removing water to reduce the pressure and injecting more steam at the edge of the steam chest to keep it growing and to prevent collapse. (9:AA 2250–2253 [Tubbs Decl., ¶¶ 45–47].) It takes many years to develop the steam chest, and, if Chevron stopped drilling wells or adding steam into the formation, the steam chest would collapse. In the 1980s, Texaco stopped continuous steam injection at one of its steamflooding operations in San Ardo, and the steam chest immediately collapsed, stopping oil production. (9:AA 2257–2258 [Tubbs Decl., ¶ 58].) The steamflooding also helps Chevron put some of the produced water back into the formation. About 30 percent of produced water is reinjected under the surface as steam. (9:AA 2246–2247 [Tubbs Decl., ¶ 38].) About 45 percent of Chevron’s produced water is reinjected back into the formation through disposal wells. (Ibid.) The remainder, about 25 percent of produced water, is sent through Chevron’s reverse osmosis (“RO”) facility. (Ibid.) Chevron then sends the clean water (about 75 percent of the 16 total water sent through the RO facility) into a groundwater recharge basin. (9:AA 2248–2249 [Tubbs Decl., ¶ 41].) The remaining salty water (about 25 percent of the water sent through the RO facility) is reinjected into the formation. (Ibid.) Chevron’s RO plant produces about 520 million gallons of purified water per year for the County’s beneficial use. (9:AA 2246–2247 [Tubbs Decl., ¶ 38].) B. State and Federal Laws Regulating Oil and Gas Operations A complex web of state and federal laws and regulations governs oil and gas production, occupying the field of subsurface activities. As the superior court explained, “Oil and gas operations are governed by Division 3 of the Public Resources Code (Pub. Resources Code, § 3000, et seq.) and its implementing regulations (Cal. Code Reg., tit. 14, § 1712, et seq.).” (32:AA 7705 [Order at 17].) DOGGR is the state agency tasked with administering these laws and regulations. DOGGR’s mandate is to “administer [these laws] so as to encourage the wise development of oil and gas resources.” (Pub. Resources Code, § 3106, subd. (d).) DOGGR also has a mandate “as a policy of this state” that oil operators are “allow[ed] . . . to do what a prudent operator using reasonable diligence would do, having in mind the best interests of the lessor, lessee, and the state in producing and removing hydrocarbons[.]” 17 (Id., § 3106, subd. (b).) This specifically includes “the injection of air, gas, water, or other fluids into the productive strata . . . for the reduction of viscosity of the hydrocarbon[.]” (Ibid.) Division 3 of the Public Resources Code regulates oil and gas exploration and extraction in detail, including “notices of intent to drill and abandon ([Pub. Resources Code,] §§ 3203, 3229); bonding (§§ 3204-3207); abandonment of wells (§ 3208); recordkeeping (§§ 3210-3216); blowout prevention (§ 3219); use of well casing to prevent water pollution (§ 3220); protection of water supplies (§§ 3222, 3228); repairs (§ 3225); regulation of production facilities (§ 3270); waste of gas (§§ 3300-3314); subsidence (§ 3315-3347); well spacing (§§ 3600-3609); unit operations (§§ 3635-3690); and regulation of oil sumps (§§ 3780-3787).” (32:AA 7705 [Order at 17].) Further, the U.S. EPA regulates “Class II” injection wells pursuant to the UIC program, which is part of the federal SDWA. (42 U.S.C. § 300f, et seq.) U.S. EPA has delegated to DOGGR the authority to permit and regulate UIC projects in California. (40 C.F.R. § 147.250.) “Class II” injection wells include wells used to enhance oil recovery through the injection of fluids, such as steam and water. (40 C.F.R. § 144.6, subd. (b).) “DOGGR strictly regulates UIC projects, enforces testing and equipment requirements, and requires both monthly reporting of injection 18 activity and chemical analysis of injection fluids.” (32:AA 7706 [Order at 18, citing Cal. Code Regs., tit. 14, § 1724.9, 1724.10].) C. Measure Z Passes, Prohibiting Three Specific Subsurface Activities On March 17, 2015, the Monterey County Board of Supervisors rejected a proposed interim ordinance prohibiting well stimulation treatments (which includes hydraulic fracturing, or “fracking”). (1:AR 1–2.)3 Intervenor Protect Monterey County (“PMC”) was formed in response with the intention of developing a voter initiative to ban fracking. (6:AA 1448.) Measure Z, the result of PMC’s effort, was included on the November 2016 ballot. (2:AR 314.) Measure Z contains three prohibitions on subsurface activities, two of which are at issue in this appeal. (1:AR 128–129.) First, Policy LU-1.21 bans well stimulation treatments, including fracking.4 Second, Policy LU-1.22, prohibits wastewater injection and impoundment “on all lands within the County’s unincorporated area.” (1:AR 128–129.) LU-1.22 gives a five-year phase-out for nonconforming underground injection and 3Citations to the Administrative Record certified by the trial court and now before this Court on appeal denote volume number, then page number, and (as necessary) line number. 4Because of the manner in which the superior court resolved the case, this provision is at not issue in this appeal. 19 impoundment, requiring that all nonconforming uses cease operation within five years of the effective date of Measure Z. (Ibid.) Third, Policy LU-1.23 prohibits the use of any land located in the County for the “drilling of new oil and gas wells[.]”(1:AR 129.) The provision bans all new wells, including wells drilled for the purpose of underground injection or disposal, in addition to wells drilled for the purpose of producing oil and gas. (Ibid.) The campaign to promote Measure Z focused almost entirely on the first provision banning fracking. (See 11:AA 2632–2635.) Because of the formation’s sandy, porous nature, Chevron does not use fracking at San Ardo and is unlikely to use it in the future because it is not necessary for oil recovery and likely would not increase the oil recovery there. (9:AA 2249 [Tubbs Decl., ¶ 42].) By contrast, Measure Z’s other two provisions, banning wastewater injection and drilling new wells, would dramatically reduce Chevron’s ability to produce oil at San Ardo. (9:AA 2258–2259 [Tubbs Decl., ¶ 60].) Measure Z would have cascading impacts on the community at San Ardo, decimating the revenue streams of local businesses and local royalty owners (9:AA 2202 [Declaration of John Orradre, ¶ 6]) and closing the San Ardo Union Elementary School (9:AA 2277 [Reimer Decl., ¶ 11]). On November 8, 2016, the voters approved Measure Z. (1:AR 190, 195.) 20 III. PROCEDURAL HISTORY On December 14, 2016, immediately after Measure Z’s effective date, Chevron and other Plaintiffs filed their Petition for Writ of Mandate and Complaint for Declaratory Relief and Damages. (See 1:AA tab 2.) That same day, they filed a motion for a stay of Measure Z’s effective date and the superior court granted the stay. (1:AA tabs 3 & 4.) On January 17, 2017, Chevron and associated Plaintiffs—including the local school district, a group of royalty owners, and a number of local businesses that service the oil field (the “Chevron Plaintiffs”5)—filed a First Amended Verified Petition for Writ of Mandamus and Complaint for Damages and Declaratory Relief (“FAC”). (1:AA tab 8.) On February 2, 2017, Protect Monterey County and the Center for Biological Diversity filed a Motion for Leave to Intervene. (1:AA tabs 9–14.) The Chevron Plaintiffs opposed the Motion (4:AA tabs 26–28), which the superior court granted in part and denied in part (5:AA tab 36), permitting Protect Monterey County and Dr. Laura Solorio (the “Intervenors”) to intervene but denying the Center for Biological Diversity’s request. (Ibid.) 5The Chevron Plaintiffs include Chevron U.S.A. Inc.; Key Energy Services, LLC; Ensign United States Drilling (California) Inc.; Maureen Wruck; Gazelle Transportation, LLC; Peter Orradre; Martin Orradre; James Orradre; Thomas Orradre; John Orradre; Stephen Maurice Boyum; and San Ardo Union Elementary School District. 21 On June 26, 2017, following briefing (see 5:AA tabs 44, 53, 54, 57), the superior court issued its Order Setting Schedule for Phase 1 Proceedings in Measure Z Related Cases. (7:AA tab 61.) The superior court ordered that the issues addressed during Phase 1 would be constitutional and pre-emption challenges, as well as any purely legal challenges. (7:AA 1567.) After the parties filed their Opening (9:AA tabs 76–82; 11– 12:AA tabs 89–94), Opposition (15–18:AA tabs 96–107), and Reply briefs (19:AA tabs 117–122), respectively, the four-day trial began on November 13, 2017. At trial, the Chevron Plaintiffs argued that Measure Z was preempted by both state and federal law, contending that: It is the policy of the State, pursuant to Public Resources Code Section 3106(b), that DOGGR “shall . . . permit the owners or operators of the wells to utilize all methods and practices known to the oil industry for the purpose of increasing the ultimate recovery of underground hydrocarbons[.]” (23:AA 5563.) It is further the policy of the State that its people have an interest in these resources and that it is up to the State to oversee those resources. (23:AA 5579.) As set forth in the Attorney General Opinion of 1976, the regulation of subsurface techniques and activities is preempted. (23:AA 5569, 5584.) 22 Section 3106(b) specifically allows for the activities proscribed under Measure Z’s “phase-out” provision. (23:AA 5608.) Measure Z conflicted with federal law’s Safe Drinking Water Act, which made clear in its legislative history that it should “not impos[e] unnecessary requirements which would impede or interfere with oil or gas production” and under which the U.S. EPA had delegated its authority to DOGGR to oversee the state UIC program. (23:AA 5589.) Intervenors’ argument that Measure Z regulated land use was pretextual. (23:AA 5617–25.) In opposition the Intervenors argued that: Measure Z is a land use regulation. There exists a “presumption against preemption” and it applies with force in favor of Measure Z as a local land use initiative and that “Measure Z does not conflict with any state or federal regulation.” (18:AA 4301–02.) Measure Z’s proscription against new wells and other surface activities are not preempted by state law because they “do not contradict or impliedly enter the state’s limited field of oil and gas regulation of downhole activities.” (18:AA 4302.) The SDWA does not preempt Measure Z because the federal law’s savings clause applies and the statute was not intended to occupy the field. (18:AA 4314– 19.) On December 28, 2017, the superior court filed its Intended 23 Decision. (30:AA tab 167.) On January 25, 2018, after further briefing (30–31:AA tabs 168–174), the superior court filed its Final Statement of Decision (31:AA Tab 175), finding, among other things, that: “DOGGR regulations are extensive. . . . [And] [t]hese regulations are intended to be ‘statewide in application for onshore drilling, production and injection operations.’” (31:AA 7562, citations omitted.) “[I]n California, the U.S. EPA has delegated to DOGGR the authority to permit and regulate ‘Class II’ injection wells under the Underground Injection Control (UIC) program.” (Ibid.) “Measure Z’s purported prohibition on certain ‘land uses’ is clearly a pretextual attempt to do indirectly what it cannot do directly.” (31:AA 7570.) Measure Z’s “phase-out” of wastewater injection and impoundment was preempted under state law because it is in conflict with and contradictory to general law. (31:AA 7572.) And that the provision was preempted under federal law because it conflicts with the SDWA. (31:AA 7574.) Measure Z’s prohibition against new wells was preempted under state law because it “directly conflicts with DOGGR’s mandate” under Public Resources Code Section 3106. (Id. at 7578.) And that the provision was preempted under federal law because it, too, conflicts with the SDWA. (Ibid.) The question as to whether Measure Z’s provision on well stimulation treatment was preempted was not ripe because no Petitioner or other party was either 24 engaging in or proposing to engage in such activity. (Id. at 7568.) Following the March 9, 2018 filing of the Notice of Entry of Judgment and Writ (32:AA tab 179), the Intervenors timely filed their Notice of Appeal. (32:AA tab 181.)6 IV. STANDARD OF REVIEW “In reviewing a judgment granting a writ of mandate, [appellate courts] apply the substantial evidence standard of review to the court's factual findings, but independently review its findings on legal issues.” (Citizens for Amending Proposition L v. City of Pomona (2018) 28 Cal.App.5th 1159, 1186, quotation omitted.) “Interpretation of statutes, including local ordinances and municipal codes, is subject to de novo review.” (Ibid.) Measure Z is a local initiative in conflict with state and federal law. As such, even though Measure Z was enacted by County voters, this Court should “apply similar principles [as] when construing constitutional provisions and statutes. Our primary concern is giving effect to the intended purpose of the provisions at issue.” (Cal. Cannabis Coal. v. City of Upland (2017) 3 Cal.5th 924, 933, citation omitted.) This begins with textual analysis “by ascribing to words their ordinary meaning, while taking account of related provisions and the structure of the 6 The County filed a Notice of Appeal on March 23, 2018 (32:AA tab 180) but later formally abandoned it (32:AA tab 198). 25 relevant statutory and constitutional scheme.” (Ibid., citation omitted.) If Measure Z remains opaque, this Court “may consider extrinsic sources, such as an initiative’s ballot materials.” (Id. at p. 934, citation omitted.) For constitutional analysis such as this, the “sole function is to evaluate it legally in the light of established constitutional standards.” (Briggs v. Brown (2017) 3 Cal.5th 808, 828, quotation omitted.) “[I]ndependent judgment” is applied “when construing constitutional and statutory provisions.” (Cal. Cannabis Coal., supra, 3 Cal.5th at p. 934, citation omitted.) V. ARGUMENT Measure Z is preempted because it is contrary to state and federal laws that permit and promote oil and gas production. The superior court properly recognized three independent grounds for preemption. 1. Measure Z directly conflicts with state law because it frustrates the purpose of the state’s system of laws and regulations promoting, permitting, and regulating oil and gas production. The Legislature has mandated that the State, through DOGGR, “meet oil and gas needs in this state” by “encourag[ing] the wise development” of oil and gas production. (Pub. Resources Code, § 3106, subd. (d).) The Legislature even declared that, “as a policy of the state[,]” specific production techniques—including the very techniques prohibited 26 under Measure Z—are permitted and allowed. (Id., § 3106, subd. (b).) Measure Z’s ban on wastewater reinjection and new wells frustrates the purpose of state law, which expressly seeks to permit and promote the production of oil and gas. Such a regulation creates a conflict with state law and is preempted. (See City of Riverside v. Inland Empire Patients Health & Wellness Ctr., Inc. (2013) 56 Cal.4th 729, 760.) 2. Measure Z seeks to regulate specific subsurface production techniques, which is a regulatory field within the exclusive purview of DOGGR pursuant to state law. Since at least 1976, DOGGR has fully occupied the regulatory field of s