In March 2004 the City of San Diego (City) publically announced that the rate structure it had been using to bill users of City's wastewater system had resulted in excessive charges to several classes of users, including residential customers and some commercial and industrial customers. A residential customer, Mr. Shames, timely filed a governmental claim seeking a refund on behalf of residential customers who were overcharged and, after the claim was denied, filed a proposed class action lawsuit on behalf of that class (the Shames action).
After the Shames action was settled and dismissed, California Restaurant Management Systems (CRMS) filed its own governmental claim and then filed the instant putative class action on behalf of restaurant owners. City moved for summary judgment, contending CRMS's governmental claim was not timely filed and the failure to satisfy the jurisdictional prerequisite required dismissal of CRMS's proposed class action lawsuit. CRMS opposed the summary judgment motion, arguing the pendency of the Shames action tolled all limitations periods, including the period for filing a governmental claim. The trial court disagreed, and entered judgment in favor of City.
This appeal presents a question of first impression: whether the "equitable tolling" principles outlined in American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538 [38 L.Ed.2d 713, 94 S.Ct. 756] (American Pipe) and Crown, Cork & Seal Co. v. Parker (1983) 462 U.S. 345 [76 L.Ed.2d 628, 103 S.Ct. 2392] (Crown Cork) apply to extend the period within which a claim must be filed under the Government Claims Act (Gov. Code, § 810 et seq.).
City operates a regional wastewater treatment and disposal system. In late March 2004 City issued a report that its wastewater user rate charge system did not include any specific cost recovery component for organic materials. The report stated that, as a result of this omission, residential customers and certain commercial and industrial customers who discharged lower levels of organic materials into the sewer system were paying "a disproportionately high percentage of the overall costs of the Wastewater System than is appropriate."
On April 30, 2004, Mr. Shames filed a governmental claim pursuant to sections 910 and 945.4, on behalf of himself and a putative class composed of "residential property owners who are, or have been, customers of the City's water and sewer services (`the putative class')." The claim asserted a demand for a refund for alleged overcharges paid by the putative class, alleging that "certain commercial and industrial customers discharge wastewater with relatively higher concentration of organic matters than residential customers do," and that "[b]ecause the [wastewater] rates charged by the City do not account for organics, . . . residential customers have been charged disproportionately higher rates than commercial customers" in violation of the California Constitution.
The City denied the claim on May 14, 2004. Shames promptly filed his class action seeking refunds for residential property owners. The Shames action alleged that "[c]ommercial and industrial customers discharge wastewater with relatively higher concentration of organic pollutants than residential customers," that "[r]esidential property owners impact the City's sewer system at lower rates than commercial users because they discharge less organic pollutants," and that City "does not account for this disproportionate impact when charging sewer fees." Shames, defining the class as "[a]ll persons who own or have owned residential property [during the class period] and who have been charged sewer fees," alleged there were common issues of fact and law as to residential property owners' rights and sought a refund on their behalf. The Shames action alleged he had satisfied the governmental claim requirements because he had filed a claim "on behalf of himself and all City of San Diego residential property owners seeking a refund of sewer fee
In mid-2004 the California Restaurant Association (CRA), a trade association that advocates on behalf of restaurants and related businesses, contacted Shames's attorney (Mr. Benink) to ask whether Benink could amend the Shames action to include food establishments within the class action.
In September 2004 Shames filed an amended complaint. He alleged that "[c]ommercial and industrial customers discharge wastewater with relatively higher concentration of organic pollutants than residential and other commercial customers do," and that because the rates charged by City "do not account for organic pollutants, . . . some customers have been charged disproportionately higher rates than commercial and industrial customers with higher usage." The amended complaint proposed an expanded class definition to define the putative class as "[c]ustomers . . . who, based on their relative contributions to overall system handling and processing requirements, . . . have paid or are paying, during the time period June 16, 2000[,] through October 1, 2004, a disproportionately higher percentage of the costs" (fn. omitted) of the wastewater system. However, Shames did not file an amended governmental claim seeking a refund on behalf of the newly defined class, and did not file a new governmental claim seeking a refund on behalf of the expanded class.
In April 2005 Shames filed his motion for class certification. Shames sought certification of a class defined only as single-family residential sewer
In the spring of 2007, prior to the court's ruling on the final approval of the class settlement, CRA sought leave to amend the Shames action to (1) add CRA as a class representative and (2) have new attorneys appointed as class counsel. After the court denied that motion,
Four days after dismissal of the Shames action, CRMS filed a governmental claim for wastewater rate refunds alleging City overcharged food establishments for sewer services. The claim alleged that food establishments were required to use grease traps and were barred from using food grinders/garbage disposals, but that wastewater loadings for food establishments were not adjusted to recognize these pretreatment measures, and therefore food establishments paid a disproportionately higher cost for sewer services. CRMS asserted that, as a member of the putative class in the Shames action, its claim was included within the Shames action and its cause of action was
CRMS filed the present action in August 2007 as a putative class action on behalf of itself and other food establishments. The action asserted (1) any administrative claim requirement had been substantially complied with; (2) in the alternative, City waived and/or was equitably estopped from asserting a defense based on failure to exhaust administrative remedies because City had not raised that argument when the Shames complaint was amended to expand the class definition; and (3) in the alternative, any administrative claim requirement had been equitably tolled during the pendency of the Shames action.
City moved for summary judgment, asserting that CRMS's governmental claim for a refund was not filed within one year of the accrual of the cause of action as required under section 911.2. CRMS opposed the motion, arguing City was equitably estopped from asserting CRMS's claim was untimely and that any administrative claim requirement had been equitably tolled during the pendency of the Shames action.
Our "review [of] a grant of summary judgment [is] de novo; we must decide independently whether the facts not subject to triable dispute warrant
However, in San Jose, supra, 12 Cal.3d 447, the court concluded that, to satisfy the governmental claim requirements as a prerequisite to filing a putative class action lawsuit, a claim by the class representative for himself and others similarly situated can be found sufficient to support an action on behalf of the others in the class without the necessity for each individual to file a claim, provided the filed claim is sufficient to satisfy the statutory purposes. The court noted:
"The first treats claims where there has been some compliance with all the required elements—but compliance has been defective. [Citations.] In these cases the test of `substantial compliance' controls: Is there sufficient information disclosed on the face of the filed claim to reasonably enable the public entity to make an adequate investigation of the merits of the claim and to settle it without the expense of a lawsuit?
"In the second group of cases the courts have been less lenient. Here, claims were successfully challenged for failure to comply entirely with a particular statutory requirement. [Citations.] In determining the sufficiency of such claims, the more liberal test of substantial compliance has not been applied—the courts recognizing `[s]ubstantial compliance cannot be predicated upon no compliance.' [(Quoting Hall v. City of Los Angeles (1941) 19 Cal.2d 198, 202 [120 P.2d 13]; [citation].)]
In Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103 [245 Cal.Rptr. 658, 751 P.2d 923], the court evaluated whether the American Pipe/Crown Cork tolling rule would apply to mass-tort class actions in California. The Jolly court observed that "[u]nderlying the tolling rule of American Pipe were two major policy considerations. The first was the protection of the class action device. In cases where class certification is denied for what the high court characterized as `subtle factors,' unforeseeable by class members, a rule that failed to protect putative class members from the statute of limitations after denial of certification would induce potential class members to `file protective motions to intervene or to join in the event that a class was later found unsuitable,' depriving class actions `of the efficiency and economy of litigation which is a principal purpose of the procedure.' [(Quoting American Pipe, supra, 414 U.S. at p. 553; [citation].)]
"The second consideration involved the effectuation of the purposes of the statute of limitations. `The policies of ensuring essential fairness to defendants and of barring a plaintiff who has "slept on his rights,"' the high court stated, `are satisfied when, as here, a named plaintiff who is found to be representative of a class commences a suit and thereby notifies the defendants not only of the substantive claims being brought against them, but also of the number and generic identities of the potential plaintiffs who may participate in the judgment.' [(Quoting American Pipe, supra, 414 U.S. at pp. 554-555.)] In these circumstances, the court concluded, the purposes of the statute of
However, after considering these two purposes, the Jolly court ultimately held that equitable tolling would not be applied to the particular class action under consideration there, because it concluded the class action lawsuit "neither sufficiently put defendants on notice of the substance and nature of plaintiff's claims, nor served to further economy and efficiency of litigation. . . ." (Jolly v. Eli Lilly & Co., supra, 44 Cal.3d at p. 1122.) Jolly noted that because the class action lawsuit "never put defendants on notice that personal injury damages were being sought on a class basis, it would be unfair to defendants to toll the statute of limitations on such personal injury actions." (Id. at p. 1125.)
Although equitable tolling principles have been applied to toll statutes of limitations, the parties have cited no cases that have considered whether the pendency of a prior class action lawsuit can equitably toll the time for filing a governmental claim.
As previously discussed, a plaintiff must ordinarily file his or her own claim and may not sue to recover for his or her own injury in reliance on a claim filed by another injured party, even if the plaintiff's injury was caused by the same transaction that injured the other party. (See Nelson v. County of Los Angeles (2003) 113 Cal.App.4th 783, 796 [6 Cal.Rptr.3d 650]; Nguyen v. Los Angeles County Harbor/UCLA Medical Center, supra, 8 Cal.App.4th at pp. 733-735; Roberts v. State of California, supra, 39 Cal.App.3d at pp. 847-848; Pacific Tel., supra, 106 Cal.App.3d at pp. 190-192; Shelton v. Superior Court, supra, 56 Cal.App.3d at pp. 81-83.) This requirement is grounded in the recognition that "`[i]t is not the purpose of the claims statutes to prevent surprise'" (Pacific Tel., at p. 191), but instead the "purpose of the claim requirements is to provide a public entity with sufficient information to enable it to investigate and evaluate the merits of claims, assess liability, and, where appropriate, to settle claims without the expense of litigation" (Nguyen, at p. 732). These authorities make clear that, if Shames had filed his claim for a refund solely in his individual name and thereafter sued individually for a refund, the fact CRMS suffered injury from the same operative facts would not have permitted CRMS to sue for a refund without timely filing its own governmental claim.
However, the Shames claim was not filed solely for himself. Instead, it expressly stated it sought a refund of overcharges paid by "[Shames] and a class of City of San Diego . . . residential property owners who are, or have been, customers of the City's water and sewer services (`the putative class')," thereby coming within the exception identified in San Jose, supra, 12 Cal.3d 447. The San Jose court explained that a claim on behalf of a proposed class will satisfy the governmental claim statute for class members and thereby
CRMS cannot rely on the Shames claim to satisfy the government claim statute and thereby permit a class action against City on behalf of commercial customers of City because, although the Shames claim identified some of the requisite information for Shames as an individual, it did not provide any information that would have enabled City to identify and ascertain that the class (on behalf of which the claim was filed) would include commercial customers of City. In Pacific Tel., supra, 106 Cal.App.3d 183, the court applied the San Jose test to determine whether a widow, who had not filed her own governmental claim, could nevertheless pursue her wrongful death claim by filing a complaint in intervention in an existing action brought by an employer against the entity when the employer had timely filed a claim. The widow argued that, because the employer's claim was in effect a claim on behalf of a class to which she belonged, her action could proceed based on the employer's claim. Rejecting that argument, the Pacific Tel. court explained:
"Assuming arguendo that the employer filed a claim as a representative of a class . . ., it does not follow that the claim for damages filed by the employer satisfied the claims statute with respect to another member of the class who suffered different damages as a result of the same tortious event. . . . [¶] Widow argues that the claim filed by the employer constituted substantial compliance with the claims statute insofar as the claim for wrongful death was concerned because `the policy behind the claim requirement has been substantially satisfied.' . . . [¶] However, it is clear in this case that the claim of the employer did not satisfy the substantial compliance test insofar as widow's claim for damages for wrongful death is concerned. The employer's claim merely averred the circumstances of the accident and sought reimbursement of workers' compensation benefits paid. It did not give the County notice of the fact that widow claimed damages for the wrongful death of her husband nor the extent of the damages claimed.
"`It is not the purpose of the claims statutes to prevent surprise. Rather, the purpose of these statutes is to provide the public entity sufficient information to enable it to adequately investigate claims and to settle them, if appropriate, without the expense of litigation. [Citations.] It is well-settled that claims statutes must be satisfied even in face of the public entity's actual knowledge of the circumstances surrounding the claim. Such knowledge— standing alone—constitutes neither substantial compliance nor basis for
"We conclude, therefore, that even if the employer's action could be regarded as a class action . . ., the claim filed by the employer did not relieve widow of the necessity of filing a claim for damages for wrongful death." (Pacific Tel., supra, 106 Cal.App.3d at pp. 190-192, italics added.)
Moreover, although the filing of the Shames claim and pendency of the Shames action arguably satisfied the claim requirement for members of the identified class (e.g., residential owners) and would have tolled the limitations period for residential owners to file their own actions if the Shames action had not been settled or resolved on its merits, it did not have any effect on persons or entities who were strangers to the claim, even though they may have been injured by the same transaction identified in the Shames claim. (See Pacific Tel., supra, 106 Cal.App.3d at p. 192 [fact employer's filing suit might have tolled statute of limitations on widow's action "does not mean that the employer's filing of a claim for reimbursement of workers' compensation benefits relieved her of the necessity of filing a claim . . . ." "[T]he purpose of the claims statute is to `provide the public entity sufficient information to enable it to adequately investigate claims and to settle them, if appropriate, without the expense of litigation.' [Citation.] . . . [T]he claim filed by the employer did not fulfill the purposes of the claims statute with respect to the widow's claim . . . ."].)
We are unpersuaded that the American Pipe/Crown Cork tolling doctrine can be transferred from its limited context—tolling of statutes of limitations for class members if the classwide pursuit of the claim falters—to also toll the distinct time limits for filing a governmental claim. As the Crown Cork court observed, "`the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action.'" (Crown Cork, supra, 462 U.S. at p. 349, italics added.) However, we have concluded CRMS would not have been a party to the Shames action had it continued as a class action because the Shames claim did not contain sufficient information (under the San Jose test) to identify or make ascertainable that the class for which the claim was filed would have included CRMS or other restaurant owners. Because the governmental claim requirement serves purposes distinct from and in addition to purposes served by general statutes of limitations, we are not persuaded by CRMS's argument that tolling principles applicable to the latter should be superimposed on the former.
The judgment is affirmed. City is entitled to costs on appeal.
McIntyre, J., and Irion, J., concurred.
