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May 1, 2012

Trial Court Exceeded Proper Scope of Judicial Notice By Considering Provisions of Settlement Agreement Not Alleged in CEQA Petition

Trial Court Exceeded Proper Scope of Judicial Notice By Considering Provisions of Settlement Agreement Not Alleged in CEQA Petition

Jamulians Against the Casino v. Iwasaki [Third District Court of Appeal No. C067138, filed 3/29/12; pub. & mod. order 4/26/12]

By Andrea A. Matarazzo

Jamulians Against the Casino (“JAC”) and various individuals who are primarily JAC members filed a petition for a writ of mandate challenging defendant Randell Iwasaki’s execution of an April 2009 settlement agreement — in his capacity as Director of Caltrans — with real party in interest and respondent Jamul Indian Village (“Tribe”). The settlement agreement had resolved federal litigation between those parties over application of the California Environmental Quality Act (“CEQA”) to the Tribe’s efforts to upgrade its interchange on State Route 94 to allow for access to a proposed casino. JAC alleged the agreement itself was subject to CEQA review before Caltrans could execute it. JAC premised this theory on an argument that Caltrans had committed itself in the agreement to granting a permit for the interchange upgrade.


After JAC served the Tribe with the petition for writ of mandate, the Tribe made a special appearance to quash the summons, asserting sovereign immunity and seeking to dismiss the action. The Tribe argued it was an indispensible party without whom the action could not proceed. In addition, Caltrans demurred, arguing that the settlement agreement did not constitute a “project” subject to CEQA and did not commit the agency to granting a permit. The trial court sustained the demurrer on this basis and dismissed the action. It declined to rule on the Tribe’s motions in light of its ruling on the demurrer.


On appeal, JAC initially reiterated its argument on the merits — that its allegations had adequately established the need for CEQA review before Caltrans could execute the settlement agreement. The appellate court invited supplemental briefing on the issue of whether the trial court exceeded the proper scope of judicial notice in taking provisions of the settlement agreement into account that were not among the allegations of the petition (which neither incorporated the agreement by reference nor attached it as an exhibit). JAC then agreed that the trial court judgment should be reversed on that basis, and the Court of Appeal found that “Caltrans [did] not present any cogent authority to the contrary.”


In finding that the trial court had exceeded the proper scope of judicial notice in sustaining the demurrer, the appellate court focused not on the sufficiency of the pleading itself but rather “on the procedural propriety of the trial court’s foray outside the ‘four corners’ of the pleading through the vehicle of judicial notice.”


In its order sustaining the demurrer and dismissing the action, the trial court stated, “[the Agreement] does not include or reference plans for a casino project that are sufficiently defined or specific to allow meaningful rather than merely speculative review of potential impacts. Nor does [the Agreement] bind [Caltrans] to any particular casino design or action in support of a casino project, effectively preclude alternatives or mitigation measures appropriate for consideration under CEQA, or foreclose a ‘no project’ alternative . . . . [Citation.] [¶] . . . Section [3.A.] of [the Agreement] requires [the Tribe] to follow [Caltrans’s] processes for the creation of [a] . . . project scoping document (‘PSD’) and environmental documentation (‘ED’), ‘which is subject to final approval and adoption by [Caltrans], in order to analyze all reasonably feasible alternatives for access to the Project’ [(Agreement, § 3.A.4.), and] to conduct a traffic study [(Agreement, § 3.A.5.)] . . . . [¶] Section [3.B. of the Agreement] requires [Caltrans] to . . . process [the Tribe’s] completed . . . permit application [diligently] . . . and to issue [a] . . . permit once mitigation measures are approved and the permit process is completed. Contrary to the allegations of the petition and complaint, section [3.B. of the Agreement] does not commit [Caltrans] to approving the project regardless of the adequacy of the project design, environmental impact analysis and identified mitigation measures. Read in context and reasonably interpreted, the terms of section [3.B. of the Agreement] require [Caltrans] to issue [a] . . . permit only after determining that [the Tribe] has complied with CEQA . . . . [Caltrans] retain[s] discretion under section [3.B.] to reject [the Tribe’s] permit application upon a determination that [the Tribe] has not complied with CEQA requirements.” (Italics added.)


The Court of Appeal found that the trial court thus had exceeded the proper scope of judicial notice in sustaining Caltrans’ demurrer. “A demurrer tests the pleading alone; a court cannot sustain a demurrer on the basis of extrinsic matter not appearing on the face of the pleading except for matters subject to judicial notice. [Citation omitted.] A court can properly take judicial notice of the existence of a document, but can take judicial notice only of the truth of the contents of documents such as findings of fact, conclusions of law, orders, and judgments.” The agreement as a whole was not properly before the trial court. The trial court therefore erred in considering and interpreting its terms. Accordingly, the appellate court reversed the trial court’s judgment dismissing the action, with directions to overrule the demurrer and to consider the hybrid motion of the Tribe to quash-dismiss on its merits.


Authored by:

Andrea A. Matarazzo

(916) 496-8500

(916) 737-5838 (Direct)



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