Opinion ID: 471860
Heading Depth: 3
Heading Rank: 3

Heading: Rationality of the Statutory Scheme

Text: 16 Application of the rational basis standard requires a two-step analysis. Hoffman, 767 F.2d at 1436 (citing Western & Southern Life Insurance Co. v. State Board of Equalization, 451 U.S. 648, 668, 101 S.Ct. 2070, 2083, 68 L.Ed.2d 514 (1981)). First, we must determine whether the challenged legislation has a legitimate purpose. Id. Second, assuming a legitimate purpose, we must decide whether the challenged classification promotes that purpose. Id. at 1436-37. There need not be a tight fitting relationship between the legislative goal and the result. Id. at 1437 n. 7. All that is needed to uphold the state's classification scheme is to find that there are plausible, arguable, or conceivable reasons which may have been the basis for the distinction. Brandwein v. California Board of Osteopathic Examiners, 708 F.2d 1466, 1472 (9th Cir.1983) (citations omitted). Whether these reasons in fact underlay the legislative action is 'constitutionally irrelevant.'  Id. (quoting Flemming v. Nestor, 363 U.S. 603, 612, 80 S.Ct. 1367, 1373, 4 L.Ed.2d 1435 (1960)). The moving party carries the burden of proving unconstitutionality under a rationality review because statutes are presumed to be constitutional. Burlington Northern, 763 F.2d at 1109; see also Jones, 748 F.2d at 1338 (legislation is presumed to be rational). 17 The California Supreme Court in reviewing the administrative option here concluded that when a city elects to petition the agency to determine just compensation it simply avails itself of the privileges thereby granted to bring into operation the facilities, expert and technical, which the Commission has on hand in connection with the exercise of its regulatory powers. East Bay Municipal Utility District v. Railroad Commission of California, 194 Cal. 603, 229 P. 949, 951 (1924) (referring to PUC's predecessor agency, the Railroad Commission). It appears that the California legislature, in creating the dual forum system, expected that the particular expertise of the PUC would further the interests of justice and economy in some instances but not in others. Presumably, the larger, more complex adjudications would be handled by the PUC. See Marin Municipal Water District v. Marin Water and Power Co., 178 Cal. 308, 173 P. 469, 472 (1918) (fact that public utilities are subject to constant regulation and examination by the [commission] may well have led the Legislature to conclude that the commission was best able to make a just and equitable appraisement of their property). JWW apparently does not dispute that the legislature could reasonably have concluded that the PUC's expertise is needed for just compensation determinations in all utility condemnations. See Marin Municipal Water District, 173 P. at 472 (upholding the utility and non-utility distinction against equal protection attack). 18 The district court, in rejecting JWW's equal protection claim, relied primarily on the conclusion that the procedural differences in the forums are insufficient to give rise to an ascertainable injury. Assuming that the differences in forums are constitutionally insubstantial, there is ample decisional support for the district court's conclusion. In American Party of Texas v. White, 415 U.S. 767, 781, 94 S.Ct. 1296, 1306, 39 L.Ed.2d 744 (1974), the Court reasoned that an appellant claiming an equal protection violation bears the burden of demonstrating discrimination of some substance. The burden is not met by mere assertions that differences exist. A state is not guilty of invidious discrimination in recognizing these differences and providing different routes. Id. at 782 n. 13, 94 S.Ct. at 1306 n. 13. Similarly, in American Motorists Insurance Co. v. Starnes, 425 U.S. 637, 644-45, 96 S.Ct. 1800, 1804-05, 48 L.Ed.2d 263 (1976), the Court reasoned: 19 [I]t is fundamental rights which the Fourteenth Amendment safeguards and not the mere forum which a State may see proper to designate for the enforcement and protection of such rights. Given therefore a condition where fundamental rights are equally protected and preserved, it is impossible to say that the rights which are thus protected and preserved have been denied because the State has deemed best to provide for a trial in one forum or another. It is not under any view the mere tribunal into which a person is authorized to proceed by a State which determines whether the equal protection of the law has been afforded, but whether in the tribunals which the State has provided equal laws prevail. 20 (quoting Cincinnati Street R.R. Co. v. Snell, 193 U.S. 30, 36-37, 24 S.Ct. 319, 321-22, 48 L.Ed. 604 (1904)). 21 Nevertheless, there is an argument that the procedural differences are not constitutionally insubstantial. JWW contends that the two forums do not apply the same substantive law because the Commission systematically relies on a methodology of valuation that tends to understate true valuation. The PUC has rejected, however, the possibility that it is entitled to utilize a different method of valuation than mandated by law. See East Yolo Community Services District, 1 Cal. PUC 2d 474, 476-77 (1979) (noting Commission's adoption of method of valuation set by decisional law and later codified at Cal.Civ.Proc.Code Sec. 1263.320). Moreover, in Community Redevelopment Agency v. Abrams, 15 Cal.3d 813, 543 P.2d 905, 126 Cal.Rptr. 473, 478 (1975), the California Supreme Court stated: 22 The fact that the law provides two distinct methods for governmental acquisition of public utilities--proceedings before the commission ... and judicial eminent domain proceedings ...--does not, as defendant suggests, create serious equal protection problems due to differing substantive measures of recovery according to the method chosen. [I]t was the clear intent of the Legislature to create alternative methods of procedure, and that procedure authorized by the Public Utilities Code should not be held to be exclusive of the judicial method.... It is manifest that the measure of compensation vouchsafed a public utility by the Public Utility Code ... is also to be accorded it in proceedings under the Code of Civil Procedure. 23 Id., 543 P.2d at 910-11 n. 6 (citations omitted; quotes and emphasis in original). 24 JWW argues that the consequences of the City's unilateral forum decision is more than procedural because the City's choice of the agency eliminates the right to a jury and intermediate appellate review. In Lindsey v. Normet, 405 U.S. at 79, 92 S.Ct. at 877, the Supreme Court struck down an Oregon statute that required a double-bond from a certain class of appellants. The Court reasoned that when an appeal is afforded, it cannot be granted to some litigants and capriciously and arbitrarily denied to others. Id. at 77, 92 S.Ct. at 876. The Court found the requirement to be arbitrary because it did not satisfy any legitimate state purpose. Id. at 77-79, 92 S.Ct. at 876-77. 25 In Humphrey v. Cady, 405 U.S. at 507-11, 92 S.Ct. at 1051-53, the Supreme Court examined petitioner's contention that institutionalization under the state's Sex Crimes Act is essentially equivalent to commitment for compulsory treatment under the state's Mental Health Act. Petitioner argued that since the latter provided for a trial by jury, his commitment under the former without a right to a jury determination violated equal protection. The Court concluded that the claim merited remand for an evidentiary hearing since the equal protection claim appears especially persuasive if it develops on remand that petitioner was deprived of a jury determination, or of other procedural protections, merely by the arbitrary decision of the State to seek his commitment under one statute rather than the others. Id. at 512, 92 S.Ct. at 1053. 26 Language in these cases offer JWW substantial support for its position. Nevertheless, they do not necessarily direct a conclusion that the legislative scheme here violates equal protection. First, the state is not obligated under the federal Constitution to provide either a right of appeal or a jury trial. See Lindsey, 405 U.S. at 77, 92 S.Ct. at 876 (if a full and fair trial on merits is provided, state need not provide appellate review); Minneapolis & St. Louis Railroad Co. v. Bombolis, 241 U.S. 211, 217, 36 S.Ct. 595, 596, 60 L.Ed. 961 (1916) (seventh amendment not applicable to the states). Second, the Supreme Court has recognized that the creation of administrative remedies may properly eliminate rights that may have been available in the judicial forum. For example, in Atlas Roofing Co., Inc. v. Occupational Safety and Health Review Commission, 430 U.S. 442, 460, 97 S.Ct. 1261, 1271, 51 L.Ed.2d 464 (1977), the Court concluded that the seventh amendment did not prevent Congress from creating rights and remedies by statute, committing their enforcement to a tribunal other than a court, and thereby eliminating factfinding by a jury. The seventh amendment is no bar to the enforcement of new rights in a speedy and expert tribunal. Id. at 461, 97 S.Ct. at 1272. 27 Most important, it is conceivable that the legislature rationally believed that cities would be in the best position to choose the appropriate forum. Although the legislature did not express criteria to govern the City's choice, this does mean that the City selects the forum for the specific purpose of depriving the utility of a jury or review by the state court of appeals. The selection of the administrative forum also deprives the City of a jury determination and intermediate review. Presumably, the legislature believed that the City would exercise its discretion in an appropriate manner. We agree with the district court that the legislature could have rationally concluded that the public's interest would be better served by allowing the City to select the forum. As the district court noted, [w]hile the utility may only consider the narrow interests of its private investors, the municipality is responsible to the public interest in general. 2 28 We conclude that the legislation has a legitimate purpose and that the challenged classification reasonably supports that purpose. The forum selection results in no ascertainable injury since the same substantive law is applied. Further, the legislative decision to vest discretion in the public condemnor is a rational method of achieving the legislative purpose of directing a certain class of utility condemnation compensation decisions to the PUC. The state's decision does not have to be perfect; there need only be plausible or conceivable reasons which may have been the basis for the distinction. Brandwein, 708 F.2d at 1472. Classifications are set aside only if they are based solely on reasons totally unrelated to the pursuit of the State's goals and only if no grounds can be conceived to justify them. Clements v. Fashing, 457 U.S. 957, 963, 102 S.Ct. 2836, 2343, 73 L.Ed.2d 508 (1982). 29