Opinion ID: 2633588
Heading Depth: 1
Heading Rank: 11

Heading: Did the CFCA cause of action against the charter school operators require prior presentment of a claim under the TCA?

Text: The TCA states that, with specified exceptions, all claims for money or damages against the state or local public entities must be presented in accordance with that law. (Gov.Code, §§ 905, 905.2.) Except as otherwise provided, no suit for money or damages may be brought against a public entity until such a claim has been presented to the entity and acted upon or deemed rejected. ( Id., § 945.4.) The claim must be presented within six months of accrual of the cause of action ( id., § 911.4), but the claimant may apply to the public entity for leave to present a late claim ( id., § 911.6). If such an application is denied, or deemed denied, the claimant may petition the court for relief from the claim presentment requirement. ( Id., § 946.6.) Plaintiffs' complaint pleads that they have presented claims for money or damages to the public entity defendants pursuant to the requirements of Government Code [section] 945.4, which have been denied, and/or have sought relief from the claims presentment requirements. (Italics added.) Plaintiffs concede that this pleading does not allege actual compliance with the TCA claim presentment requirements, and that they have not so complied. They urge no such compliance is necessary for purposes of the CFCA. The Court of Appeal concurred. We agree with the Court of Appeal. At the outset, we need not decide whether the TCA's claim presentment requirements apply to plaintiffs' CFCA claims against the district defendants, because we have concluded that those defendants are not persons subject to suit under the CFCA. (See discussion, ante. ) On the other hand, the question arises whether the claim presentment provisions of the TCA could ever apply to the charter school defendants. Under that law, claims must be presented to the state (Gov.Code, § 905.2) or local public entities ( id., § 905). For purposes of the TCA, `[l]ocal public entity' includes a county, city, district, public authority, public agency, and any other political subdivision or public corporation in the [s]tate, but does not include the [s]tate. (Gov.Code, § 900.4.) Under the CSA, charter schools are part of the public school system and, for specified purposes, are deemed to be school districts. (See discussion, ante. ) However, those purposes do not expressly include coverage by the TCA, and the nongovernmental operators of charter schools do not fit comfortably within any of the categories defined, for purposes of the TCA, as local public entities. In any event, as the Court of Appeal concluded, application of the TCA's claim presentment requirement to CFCA actions would frustrate the purposes of both statutes. The TCA itself expressly excludes from the claim presentment requirement [c]laims by the [s]tate or by a state department or agency or by another local public entity. (Gov.Code, § 905, subd. (i).) Hence, CFCA actions brought, in their official capacities, by the Attorney General ( id., § 12652, subd. (a)) or local prosecuting authorities ( id., subd. (b)) clearly are exempt. The same rule appears applicable to qui tam actions by persons under the CFCA. Such a suit is brought, not only for the qui tam plaintiff, but  for the State of California in the name of the state, if any state funds are involved, or for a political subdivision in the name of the political subdivision, if political subdivision funds are exclusively involved. (Gov.Code, § 12652, subd (c)(1), italics added.) If the Attorney General or local prosecuting authority elects not to intervene and proceed with the action, the qui tam plaintiff shall have the same right to conduct the action as the Attorney General or prosecuting authority would have had if it had chosen to proceed. . . . ( Id., subd. (f)(1).) Hence, at the time a qui tam action is brought, the qui tam plaintiff stands in the shoes of the state or political subdivision, and within the TCA exemption for claims by the state or a local public entity. Moreover, as the Court of Appeal explained, the qui tam provisions of the CFCA are at odds with the policy behind the TCA's claim presentment requirement. The general proviso that a public entity may not be sued for money or damages until it has received, and had the chance to act upon, a written claim is intended to allow the entity to investigate while the facts are fresh, to settle short of litigation where appropriate, and to engage in fiscal planning for potential liability. (E.g., City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 455, 115 Cal.Rptr. 797, 525 P.2d 701; Gatto v. County of Sonoma (2002) 98 Cal.App.4th 744, 763, 120 Cal. Rptr.2d 550; Barkley v. City of Blue Lake (1996) 47 Cal.App.4th 309, 316, 54 Cal. Rptr.2d 679.) On the other hand, a qui tam complaint under the CFCA must be filed under seal, and immediately must be served, along with a written disclosure of all material evidence and information the qui tam plaintiff possesses, on the Attorney General. (Gov.Code, § 12652, subd. (c)(2), (3).) If political subdivision funds are involved, the Attorney General must forward these materials to the local prosecuting authority within 15 days. ( Id., subd. (c)(7)(A).) The complaint must remain sealed for up to 60 days after filing, with additional extensions available upon timely application, while the Attorney General or local prosecuting authority investigates and decides whether to intervene. ( Id., subd. (c)(2), (4), (6), (7).) During this period, the complaint must not be served on the defendant. ( Ibid. ) Moreover, once a qui tam action is filed, it cannot be settled without the consent of the court, taking into account the best interests of the parties involved and the public purposes behind [the CFCA]. ( Id., subd.(c)(1).) No California decision has discussed the purpose of the CFCA's seal requirement. However, several federal cases, addressing the FFCA's similar provision, have indicated that the interests served include making sure the qui tam action does not alert wrongdoers, prior to intervention by the government, that they are under investigation. (E.g., U.S. ex rel. Lujan v. Hughes Aircraft Co. (9th Cir.1995) 67 F.3d 242, 245-246; United States ex rel. Pilon v. Martin Marietta Corp. (2d Cir.1995) 60 F.3d 995, 1000; Erickson ex rel. United States v. American Institute of Bio. Sciences (E.D.Va.1989) 716 F.Supp. 908, 912.) The CFCA does not explicitly preclude a potential qui tam plaintiff, prior to filing a CFCA complaint, from disclosing to the potential defendant the basis of the claim, or even from attempting to settle it. But the CFCA's purposes would obviously be undermined if CFCA qui tam plaintiffs were required, under the TCA, to present local public entity defendants, as defined in that statute, with written claims before proceeding with suit. The charter school defendants urge that this construction of the two statutes improperly elevates the CFCA over the TCA. Not so. As we have noted, the TCA includes an explicit exemption from the claim presentment requirement for claims by the state and local public entities. Qui tam actions under the CFCA are, in essence, claims of that kind. In any event, in view of the secrecy provisions of the CFCA, a later and more narrowly focused statute, it must prevail over contrary provisions of the earlier and more general TCA. [37] We therefore conclude that even if the charter school defendants are local public entities for purposes of the TCA, plaintiffs were not required under that statute to present written claims before filing their qui tam complaint pursuant to the CFCA. [38]