Chevron U.S.A., Inc. v. County of Monterey

IN THE SUPREME COURT OF

CALIFORNIA

CHEVRON U.S.A. INC. et al.,

Plaintiffs and Respondents,

v.

COUNTY OF MONTEREY,

Defendant;

PROTECT MONTEREY COUNTY et al.,

Interveners and Appellants.

S271869

Sixth Appellate District

H045791

Monterey County Superior Court

16CV003978

August 3, 2023

Justice Jenkins authored the opinion of the Court, in which

Chief Justice Guerrero and Justices Liu, Kruger, Groban,

Evans, and Raphael * concurred.

* Associate Justice of the Court of Appeal, Fourth

Appellate District, Division Two, assigned by the Chief Justice

pursuant to article VI, section 6 of the California Constitution.

CHEVRON U.S.A. INC. v. COUNTY OF MONTEREY

S271869

Opinion of the Court by Jenkins, J.

In 2016, Protect Monterey County (PMC) sponsored, and

Monterey County (County) voters passed, “Measure Z,” a local

ordinance that bans oil and gas wastewater injection and

impoundment and the drilling of new oil and gas wells

throughout the County’s unincorporated areas. Chevron U.S.A.

Inc. (Chevron) and other oil producers and mineral rights

holders, among others (collectively, plaintiffs), filed a total of six

actions1 against the County challenging Measure Z on various

grounds, including state and federal preemption. PMC and its

founder and spokesperson, Dr. Laura Solorio (hereinafter

collectively, PMC), intervened in the action. The trial court

entered judgment in favor of plaintiffs on state and federal

preemption grounds. PMC appealed, and the Court of Appeal

affirmed. (Chevron U.S.A., Inc. v. County of Monterey (2021) 70

Cal.App.5th 153 (Chevron).)

1

The actions were brought by: (1) Chevron, San Ardo

Union Elementary School District, business owners, and

individual royalty owners, which we will collectively refer to as

Chevron; (2) Aera Energy LLC; (3) California Resources

Corporation; (4) National Association of Royalty Owners-

California, Inc. and various individuals and entities; (5) Eagle

Petroleum LLC; and (6) Trio Petroleum LLC and other

corporations. The trial court consolidated the six actions for

purposes of a Phase I trial in which it resolved what it described

as “Constitutional and pre-emption challenges” and “purely

legal” challenges to Measure Z, including claims of preemption

and facial takings.

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CHEVRON U.S.A. INC. v. COUNTY OF MONTEREY

Opinion of the Court by Jenkins, J.

We granted review to decide whether Public Resources

Code section 31062 preempts Measure Z. We conclude it does

because Measure Z is contradictory to, and therefore conflicts

with, section 3106. Accordingly, we affirm the judgment of the

Court of Appeal.

FACTUAL AND PROCEDURAL BACKGROUND

The County’s oil fields are in the County’s inland regions

and operate under permits issued by the County and Geologic

Energy Management Division (CalGEM), 3 the state agency

tasked with overseeing the state’s drilling, operation,

maintenance, and plugging and abandonment of oil and gas

wells. (§§ 3002, 3100 et seq., 3106, subd. (a).) Because of the oil

deposits’ viscous nature, oil is extracted using steam injection,

whereby new wells are drilled and steam is injected

underground to heat the oil and make it more fluid so that it can

be pumped out of the ground.4

Measure Z was a County initiative entitled “Protect Our

Water: Ban Fracking and Limit Risky Oil Operations

Initiative.” It was sponsored by PMC and its stated purpose was

to protect the County’s “water, agricultural lands, air quality,

scenic vistas, and quality of life.” It passed with 56 percent of

2

All further undesignated statutory references are to the

Public Resources Code.

3

CalGEM is a division of the Department of Conservation

and is led by the “State Oil and Gas Supervisor.” (§§ 3001, 3002,

3004.) Before January 1, 2020, CalGEM was known as the

Division of Oil, Gas, and Geothermal Resources, DOGGR.

(Stats. 2019, ch. 771, § 8.)

4 We set forth these basic background facts relating to oil

production in the County in order to elucidate the meaning and

effect of Measure Z.

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Opinion of the Court by Jenkins, J.

the vote. The measure applies exclusively to oil and gas

operations and contains three prohibitions that apply to the

County’s unincorporated areas. The first — LU-1.21 — bans

well stimulation treatments including hydraulic fracturing

(commonly known as fracking) and is not at issue here because

none of the plaintiffs use, or have any plans to use, such

methods.5

The second — LU-1.22 — provides, “Prohibited Land

Uses: The development, construction, installation, or use of any

facility, appurtenance, or above-ground equipment, whether

temporary or permanent, mobile or fixed, accessory or principal,

in support of oil and gas wastewater injection or oil and gas

wastewater impoundment is prohibited on all lands within the

County’s unincorporated area.” For purposes of LU-1.22, “ ‘oil

and gas wastewater injection’ ” means “the injection of oil and

gas wastewater into a well for underground storage or disposal”;

“ ‘oil and gas wastewater impoundment’ ” means “the storage or

disposal of oil and gas wastewater in depressions or basins in

the ground, whether manmade or natural, lined or unlined,

including percolation ponds and evaporation ponds”; and “ ‘oil

and gas wastewater’ ” means “wastewater brought to the

surface in connection with oil or natural gas production,

including flowback fluid and produced water.”

The third prohibition — LU-1.23 — provides, “Prohibited

Land Uses: The drilling of new oil and gas wells is prohibited

on all lands within the County’s unincorporated area. This . . .

does not affect oil and gas wells drilled prior to the Effective

5

For simplicity, we will at times refer to LU-1.22 and LU-

1.23 together as Measure Z, even though Measure Z also

includes LU-1.21, which is not at issue in this appeal.

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CHEVRON U.S.A. INC. v. COUNTY OF MONTEREY

Opinion of the Court by Jenkins, J.

Date and which have not been abandoned.” For purposes of this

prohibition, “ ‘oil and gas wells’ ” are “wells drilled for the

purpose of exploring for, recovering, or aiding in the recovery of,

oil and gas.”

On December 14, 2016 — two days before Measure Z was

scheduled to take effect — plaintiffs filed against the County

petitions for writ of mandate and complaints for declaratory and

injunctive relief and inverse condemnation, claiming Measure Z

was preempted by state and federal law, constituted a facial

taking of their property, and violated their due process rights.

Some of the plaintiffs also claimed that Measure Z was vague,

created inconsistencies within the County’s general plan, and

violated the single-subject rule for local ordinances because,

among other things, it was misleadingly promoted to voters as

an anti-fracking initiative even though no fracking was

occurring in the County. The County stipulated to an indefinite

stay of Measure Z’s implementation.

PMC intervened in the actions. After a bench trial, the

trial court dismissed plaintiffs’ action as to LU-1.21 on ripeness

and standing grounds because no petitioner was using or

proposing to use the fracking process LU-1.21 banned. Plaintiffs

did not challenge that decision. Regarding LU-1.22 and LU-

1.23, the court found them preempted by section 3106 and the

federal Safe Drinking Water Act (42 U.S.C. § 300f et. seq.). As

to state preemption, the court determined that Measure Z is

“contradictory” to section 3106, that the “state oil and gas

regulatory scheme fully occupies the area of the manner of oil

and gas production,” and that Measure Z “seeks to regulate the

manner of oil and gas production by restricting particular oil

production techniques, namely wastewater injection and

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Opinion of the Court by Jenkins, J.

impoundment” and the drilling of new oil wells. The court

rejected PMC’s characterization of Measure Z as a “land use”

ordinance entitled to a strong presumption against preemption,

stating that the measure’s “prohibition on certain ‘land uses’ is

clearly a pretextual attempt to do indirectly what [the County]

cannot do directly,” i.e., ban certain methods of oil production in

a way that will bring oil production in the County “to a complete

halt in five years or less.” The court issued a writ of mandate

directing the County to invalidate LU-1.22 and LU-1.23.

PMC and the County appealed. The County abandoned

its appeal shortly thereafter and has not defended Measure Z on

appeal. The Court of Appeal affirmed on state preemption

grounds. (Chevron, supra, 70 Cal.App.5th 153.)

DISCUSSION

Article XI, section 7 of the California Constitution

provides that a “county or city may make and enforce within its

limits all local, police, sanitary, and other ordinances and

regulations not in conflict with general laws.” “ ‘If otherwise

valid local legislation conflicts with state law, it is preempted by

such law and is void.’ ” (Sherwin-Williams Co. v. City of Los

Angeles (1993) 4 Cal.4th 893, 897 (Sherwin-Williams), quoting

Candid Enterprises, Inc. v. Grossmont Union High School Dist.

(1985) 39 Cal.3d 878, 885.)

In Sherwin-Williams, we identified three ways in which a

preempting conflict may arise: “ ‘if the local legislation

“ ‘duplicates, contradicts, or enters an area fully occupied by

general law, either expressly or by legislative implication.’ ” ’ ”

(Sherwin-Williams, supra, 4 Cal.4th at p. 897.) First, “[l]ocal

legislation is ‘duplicative’ of general law when it is coextensive

therewith.” (Ibid.) Second, it is “ ‘contradictory’ to general law

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Opinion of the Court by Jenkins, J.

when it is inimical thereto.” (Id. at p. 898.) Third, it “enters an

area that is ‘fully occupied’ by general law when the Legislature

has expressly manifested its intent to ‘fully occupy’ the area

[citation], or when it has impliedly done so in light of one of the

following indicia of intent: ‘(1) the subject matter has been so

fully and completely covered by general law as to clearly indicate

that it has become exclusively a matter of state concern; (2) the

subject matter has been partially covered by general law

couched in such terms as to indicate clearly that a paramount

state concern will not tolerate further or additional local action;

or (3) the subject matter has been partially covered by general

law, and the subject is of such a nature that the adverse effect

of a local ordinance on the transient citizens of the state

outweighs the possible benefit to the’ locality.” (Ibid.)

The party alleging preemption “has the burden of

demonstrating” it. (Big Creek Lumber Co. v. County of Santa

Cruz (2006) 38 Cal.4th 1139, 1149 (Big Creek Lumber).)

“Whether state law preempts a local ordinance is a question of

law that is subject to de novo review.” (Roble Vista Associates v.

Bacon (2002) 97 Cal.App.4th 335, 339.)

California’s oil and gas operations are governed by

Division 3 of the Public Resources Code (§ 3000 et seq.) and its

implementing regulations (Cal. Code Regs., tit. 14, § 1712 et

seq.). Division 3 addresses various aspects of oil and gas

exploration and extraction, including notices of intent to drill

and abandon (§§ 3203, 3229), blowout prevention (§ 3219),

repairs (§ 3225), protection of water supplies (§§ 3222, 3228),

and well spacing (§§ 3600–3609). The implementing

regulations, in turn, address the process for oil producers and

well operators to obtain state approval of “drilling, reworking,

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Opinion of the Court by Jenkins, J.

injection, plugging, or plugging and abandonment operations”

(Cal. Code Regs., tit. 14, § 1714) and provides instructions and

timelines for filing well and safety records with CalGEM (id. at

§ 1724.1). The regulations are “statewide in application for

onshore drilling, production, and injection operations,” and “[a]ll

onshore prospect, development, and service wells shall be drilled

and operated in accordance with” them. (Id. at § 1712.)

Subdivision (a) of the statute here at issue — section

3106 — provides: “The [state oil and gas] supervisor shall so

supervise the drilling, operation, maintenance, and

abandonment of wells and the operation, maintenance, and

removal or abandonment of tanks and facilities attendant to oil

and gas production . . . so as to prevent, as far as possible,

damage to life, health, property, and natural resources; damage

to underground oil and gas deposits from infiltrating water and

other causes; loss of oil, gas, or reservoir energy, and damage to

underground and surface waters suitable for irrigation or

domestic purposes by the infiltration of, or the addition of,

detrimental substances.”

Subdivision (b) of section 3106 provides that the

supervisor “shall also supervise the drilling, operation,

maintenance, and abandonment of wells so as to 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 and which,

in the opinion of the supervisor, are suitable for this purpose in

each proposed case. To further the elimination of waste by

increasing the recovery of underground hydrocarbons, it is

hereby declared as a policy of this state that the grant in an oil

and gas lease or contract to a lessee or operator of the right or

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power, in substance, to explore for and remove all hydrocarbons

from any lands in the state, in the absence of an express

provision to the contrary contained in the lease or contract, is

deemed to allow the lessee or contractor, or the lessee’s or

contractor’s successors or assigns, 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, including, but not limited to, the

injection of air, gas, water, or other fluids into the productive

strata, the application of pressure heat or other means for the

reduction of viscosity of the hydrocarbons, the supplying of

additional motive force, or the creating of enlarged or new

channels for the underground movement of hydrocarbons into

production wells, when these methods or processes employed

have been approved by the supervisor, except that nothing

contained in this section imposes a legal duty upon the lessee or

contractor, or the lessee’s or contractor’s successors or assigns,

to conduct these operations.”

The Legislature passed section 3106 in 1939, at the same

time it enacted the Public Resources Code and created CalGEM.

(Stats. 1939, ch. 93, § 3106, p. 1112.) As originally enacted,

section 3106 required the supervisor “to prevent, as far as

possible, damage to underground oil and gas deposits from

infiltrating water and other causes, loss of oil and gas, and

damage to underground and surface waters suitable for

irrigation or domestic purposes by the infiltration of, or the

addition of, detrimental substances, by reason of the drilling,

operation, maintenance, or abandonment of wells.” (Stats. 1939,

ch. 93, § 3106, p. 1112.) In 1961, the Legislature added

subdivision (b) of section 3106, which read then essentially as it

reads today and clarified that in order to eliminate waste and

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CHEVRON U.S.A. INC. v. COUNTY OF MONTEREY

Opinion of the Court by Jenkins, J.

increase recovery, oil leases and contracts that are silent about

oil production methods and practices would be “deemed” to allow

all practices approved by the supervisor. (Stats. 1961, ch. 2074,

§ 1.)

In 1970, the Legislature amended subdivision (a) of

section 3106 to require the supervisor to “prevent, as far as

possible, damage to life, health, property, and natural

resources . . . .” (Stats. 1970, ch. 799, § 1.) Two years later, the

Legislature added subdivision (d) of section 3106, which

provides: “To best meet oil and gas needs in this state, the

supervisor shall administer this division so as to encourage the

wise development of oil and gas resources.” (Stats. 1972, ch.

898, § 7; see Resources Agency, Enrolled Bill Rep. on Sen. Bill

No. 1022 (1972 Reg. Sess.) August 11, 1972 [the 1972

amendment was meant to “strengthen the role” of the supervisor

in overseeing oil and gas production].) As a result of these

amendments, the current version of the statute directs the

supervisor to administer the state’s regulations in a way that

serves the dual purpose of ensuring the state has adequate oil

and gas resources, while protecting the environment. (§ 3106,

subds. (a), (b), (d).)

Plaintiffs argue — as the trial court and the Court of

Appeal determined — that Measure Z’s ban on “[r]isky [o]il

[o]perations” — i.e., wastewater injection and impoundment

and the drilling of new oil wells — contradicts section 3106,

subdivision (b). As earlier noted, preemption based on

contradiction applies when the local law is “inimical” to state

law. (Sherwin-Williams, supra, 4 Cal.4th at p. 898.) We have

also stated that local law is preempted as “contradictory” when

it “cannot be reconciled with state law.” (O’Connell v. City of

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CHEVRON U.S.A. INC. v. COUNTY OF MONTEREY

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Stockton (2007) 41 Cal.4th 1068.) Applying these definitions, we

conclude Measure Z contradicts — and thus is preempted by —

section 3106.

As set forth above, section 3106, subdivision (b) provides

that the state oil and gas supervisor “shall . . . supervise” oil

production “so as to permit” well owners and operators to “utilize

all methods and practices” that, “in the opinion of the

supervisor, are suitable for th[e] purpose” of “increasing the

ultimate recovery of underground hydrocarbons . . . in each

proposed case.” The subdivision also provides that, in order “[t]o

further the elimination of waste by increasing the recovery of

underground hydrocarbons,” “it is . . . declared as a policy of this

state that” all oil leases and contracts are deemed to give well

operators the authority to use all methods and practices the

supervisor has approved, including specifically, the water and

steam injection methods that Measure Z bans. (§ 3106, subd.

(b).)

By providing that certain oil production methods may

never be used by anyone, anywhere, in the County, Measure Z

nullifies — and therefore contradicts — section 3106’s mandate

that the state “shall” supervise oil operation in a way that

permits well operators to “utilize all methods and practices” the

supervisor has approved. In other words, whereas section 3106

directs the supervisor to make decisions about the use of all oil

production methods — inclusive of those methods Measure Z

identifies — Measure Z authorizes the County to make decisions

regarding some of those methods. Thus, were any oil producer

to ask the state to decide whether those methods are authorized

for use in the County, Measure Z, by banning those methods,

has made that decision for — and in lieu of — the supervisor; it

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Opinion of the Court by Jenkins, J.

has, in all cases, usurped the supervisor’s statutorily granted

authority to decide whether those methods are “suitable . . . in

each proposed case.” (§ 3106, subd. (b).)

As we stated in California Fed. Savings & Loan Assn. v.

City of Los Angeles (1991) 54 Cal.3d 1, 17, a conflict is “a genuine

one” where it is “unresolvable short of choosing between one

enactment and the other.” Here, a “genuine” conflict exists in

the sense that the state and local laws provide conflicting

instructions as to which entity has the authority to decide what

production methods are permissible. We agree with the Court

of Appeal’s statement that “[i]t is not possible for the authority

to permit these methods and practices to rest in the state’s

hands if the local ordinance forbids these methods and practices.

As the two laws conflict with respect to who controls the use of

these methods and practices, the local ordinance must yield to

the supreme state law.” (Chevron, supra, 70 Cal.App.5th at p.

171.) Because Measure Z “cannot be reconciled with state law”

(O’Connell v. City of Stockton, supra, 41 Cal.4th at p. 1068) and

is “inimical thereto” (Sherwin-Williams, supra, 4 Cal.4th at

p. 898), it is preempted.

In urging us to conclude otherwise, PMC argues that

several statutes that allow local control over some aspects of oil

extraction reflect the Legislature’s intent not to preempt local

oil-related ordinances. PMC cites to our decision in Big Creek

Lumber that “ ‘[p]reemption by implication of legislative intent

may not be found when the Legislature has expressed its intent

to permit local regulations’ ” or “ ‘when the statutory scheme

recognizes local regulations.’ ” (Big Creek Lumber, supra, 38

Cal.4th at p. 1157.)

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PMC’s argument fails because the statutes it cites only

address the authority of local entities to determine whether and

where oil production may occur within their boundaries based

on local zoning laws; they do not address oil production methods

at existing wells. For example, PMC cites section 3203.5,

subdivision (a), which provides that “[CalGEM] shall require a

copy of the local land use authorization that supports the

installation of a well at the time an operator submits the notice

of intention for the well . . . .” PMC also cites section 3012,

which references a city’s ability to “prohibit[] . . . [oil] wells.”

And PMC cites recently enacted section 3289, subdivision (b),

which limits oil and gas exploration in certain “health protection

zones” such as in residential areas but “does not prohibit . . .

more stringent regulations, limits, or prohibitions on oil and gas

development” by localities. Although these statutes may be

potentially relevant to whether the Legislature intended to

preempt ordinances that restrict the location at which oil may

be extracted — a proper concern of zoning measures — they do

not impact our analysis of the preemption question before us,

which concerns a local ordinance that regulates certain methods

and practices of oil extraction in areas where oil production has

already been approved and is ongoing.6

6 PMC also cites to section 3690, which provides: “This

chapter [(chapter 3.5)] shall not be deemed a preemption by the

state of any existing right of cities and counties to enact and

enforce laws and regulations regulating the conduct and

location of oil production activities, including, but not limited to,

zoning, fire prevention, public safety, nuisance, appearance,

noise, fencing, hours of operation, abandonment, and

inspection.” Chapter 3.5, however, is limited to “unit

operations” and does not include section 3106. Similarly, PMC’s

(Footnote continued on next page.)

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PMC seeks to evade this problem by asserting that

Measure Z does in fact “regulate[] where and whether certain

operations may occur.” Having described Measure Z as placing

locational restrictions, PMC argues that our decision in Big

Creek Lumber precludes a finding of implied preemption here.

A review of Big Creek Lumber reveals that it is factually

distinct from the issues posed by Measure Z, and is therefore

inapplicable. In Big Creek Lumber, we addressed two local land

use ordinances that restricted timber harvesting and certain

types of timber operations to specified zone districts and parcels.

(Big Creek Lumber, supra, 38 Cal.4th at pp. 1145, 1162.) We

held that these locational ordinances, which regulated only

where commercial logging could occur, were not expressly

preempted by a state law that regulated — and prohibited

counties from also regulating — “the conduct of timber

operations” because “an ordinance that avoids speaking to how

timber operations may be conducted and addresses only where

they may take place falls short of being ‘a clear attempt to

regulate the conduct’ thereof.” (Id. at pp. 1158, 1152–1153.)

Unlike in Big Creek Lumber, where the state and local

laws addressed different subjects — “how” (state) and “where”

reliance on sections 3160 and 3161 is misplaced because the

statutes relate to well stimulation, which is also not at issue

here. At most, section 3160, which provides that CalGEM and

other agencies must comply with existing environmental laws,

and section 3161, which provides that a local entity may conduct

its own environmental review (in addition to CalGEM’s required

environmental review), may reflect a legislative intent to carve

out well stimulation as an area of shared regulatory authority.

There is no similar language relating to “methods and practices”

generally (§ 3106, subd. (b)) that would preclude a finding of

implied preemption as to Measure Z’s prohibitions.

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(local) timber operations could take place — here, both section

3106 and Measure Z address the same topic of how oil producers

and well operators should be permitted to extract oil. By its

plain language, LU-1.22 is a ban on oil production methods —

i.e., activities in support of “oil and gas wastewater injection or

oil and gas wastewater impoundment” — not a locational

restriction. Regarding LU-1.23, its ban on the drilling of all new

wells, at first glance, appears to regulate where oil production

can take place, i.e., nowhere in the County. But the language of

LU-1.23 broadly defines “oil and gas wells” to include any type

of well “drilled for the purpose of . . . aiding in the recovery of[]

oil and gas.” Thus, the language of LU-1.23 sweeps broadly and

extends its ban to any oil production method that requires the

drilling of new wells — such as wastewater and steam injection

wells — in order to continue extracting oil from existing oil

fields. In addition, Measure Z describes water injection and

impoundment and the drilling of new oil wells as “[r]isky [o]il

[o]perations,” i.e., methods of oil production that should be

banned. LU-1.23 therefore constitutes a ban on certain oil

production methods in existing oil fields. Accordingly, we reject

PMC’s attempt to characterize Measure Z as a zoning ordinance

that restricts the location of oil production. Because Measure Z

regulates the same conduct that section 3106 addresses — i.e.,

oil production methods — our decision in Big Creek Lumber is

inapposite.

Other cases on which PMC relies are inapposite for similar

reasons. (E.g., Higgins v. City of Santa Monica (1964) 62 Cal.2d

24, 28–29; Beverly Oil Co. City of Los Angeles (1953) 40 Cal.2d

552, 558; Pacific Palisades Assoc. v. City of Huntington Beach

(1925) 196 Cal.211, 216–217.) Other than Higgins — which

discussed whether the state occupies the field of oil production

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on tidelands — none of these decisions discusses state

preemption principles. Instead, they address a local entity’s

police power and authority to restrict or ban oil production based

on reasonable zoning restrictions. Here, we do not decide, or

express any opinion on, whether local entities may restrict or

ban oil production within their boundaries based on proper

zoning restrictions. As the Court of Appeal stated, “Our narrow

holding does not in any respect call into question the well-

recognized authority of local entities to regulate the location of

oil drilling operations, a matter not addressed by section 3106

or Measure Z.” (Chevron, supra, 70 Cal.App.5th at p. 159, italics

added.) “Nothing in this opinion should be construed to cast any

doubt on the validity of local regulations requiring permits for

oil drilling operations or restricting oil drilling operations to

particular zoning districts” because “[t]his case involves no such

regulations.” (Id. at p. 172, fn. 16.) Thus, we find no support for

PMC’s argument in this line of cases, which deals with

locational restrictions or prohibitions on oil production based on

zoning laws.

Next, PMC argues that language from City of Riverside v.

Inland Empire Patients Health & Wellness Center, Inc. (2013)

56 Cal.4th 729, 743 (City of Riverside) supports a

nonpreemption finding. PMC’s reliance on City of Riverside is

also misplaced. In that case, we held that a local regulation

banning medical marijuana dispensaries within city limits did

not contradict the Compassionate Use Act (CUA; Health & Saf.

Code, § 11362.5) and the Medical Marijuana Program (MMP;

id., § 11362.7 et seq.). (City of Riverside, at p. 742.) As PMC

notes, we stated in our opinion that a local ordinance does not

contradict state law “unless the ordinance . . . prohibits what

the state enactment demands.” (City of Riverside, at p. 743; T-

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Mobile West LLC v. City and County of San Francisco (2019) 6

Cal.5th 1107, 1121 [quoting the same language and concluding

there was no contradiction preemption because it was

reasonably possible to comply with both state and local law

where the state statute did not address the same subject matter

addressed by the local ordinance].) PMC asserts there is no

contradiction preemption here because the oil production

methods Measure Z prohibits are methods that the supervisor,

pursuant to section 3106, may permit or authorize.

However, as Justice Liu observed in his concurring

opinion in City of Riverside, the demands/prohibits language

“should not be misunderstood to improperly limit the scope of

the preemption inquiry.” (City of Riverside, supra, 56 Cal.4th at

p. 763 (conc. opn. of Liu, J.).) As Justice Liu also noted in his

concurring opinion, other statements in our City of Riverside

opinion “make[] clear” that “state law may preempt local law

when local law prohibits not only what a state statute ‘demands’

but also what the statute permits or authorizes.” (Ibid., italics

added, citing maj. opn.’s discussion of Cohen v. Board of

Supervisors (1985) 40 Cal.3d 277, 293 and Great Western Shows

v. County of Los Angeles (2002) 27 Cal.4th 853, 867–868.) For

example, in City of Riverside, we acknowledged prior case law

stating that if a local ordinance “attempted to prohibit conduct

proscribed or permitted by state law[,] either explicitly or

implicitly, it would be preempted.’ ” (City of Riverside, at p. 758,

quoting Cohen, at p. 293, italics added.) In Great Western

Shows, at page 866, we cited with approval Northern Cal.

Psychiatric Society v. City of Berkeley (1986) 178 Cal.App.3d

104, 106 (Northern Cal. Psychiatric Society), which held that a

local ban on electroconvulsive therapy contradicted a state law

that permits it “in cases which meet . . . stringent regulations”

16

CHEVRON U.S.A. INC. v. COUNTY OF MONTEREY

Opinion of the Court by Jenkins, J.

and ensures mentally ill persons the “ ‘right to treatment

services which promote the potential of the person to function

independently.’ ”

Of significance to our analysis here, in City of Riverside,

we reiterated that a state law does not “ ‘authorize’ activities, to

the exclusion of local bans, simply by exempting those activities

from otherwise applicable state prohibitions.” (City of Riverside,

supra, 56 Cal.4th at p. 758.) We held that the CUA and MMP

did not “ ‘authorize’ activities . . . to the exclusion of local bans”

because they were “limited and circumscribed” state laws that

“merely declare that” certain medical marijuana activities are

no longer subject to criminal and nuisance sanctions. (City of

Riverside, at pp. 758, 738; id. at p. 760.) They “create[] no

comprehensive scheme for the protection or promotion of

facilities that dispense medical marijuana” and contain no

implied limitations on a local entity’s authority to restrict or

prohibit marijuana-related activities within their boundaries.

(Id. at p. 760.)

In contrast, section 3106 implicitly limits a local entity’s

authority by expressly providing that the state supervisor shall

approve all production methods that are, “in the opinion of the

supervisor,” “suitable for th[e] purpose” “of increasing the

ultimate recovery of underground hydrocarbons.” (§ 3106,

subd. (b).) By banning some oil production methods altogether,

Measure Z takes those methods off the table and nullifies the

supervisor’s express, statutorily-conferred authority to decide

what oil production methods are suitable in each case. (See

Northern Cal. Psychiatric Society, supra, 178 Cal.App.3d at p.

106 [contradiction preemption where the state law authorized

treatment in appropriate cases and the local ordinance

17

CHEVRON U.S.A. INC. v. COUNTY OF MONTEREY

Opinion of the Court by Jenkins, J.

completely banned it].) Accordingly, the mandate/prohibits

language from City or Riverside does not preclude a finding of

implied preemption here.

Last, PMC relies on our statement in City of Riverside that

“no inimical conflict will be found where it is reasonably possible

to comply with both the state and local laws.” (City of Riverside,

supra, 56 Cal.4th at p. 743.) Seizing upon this language, PMC

asserts there is no contradiction preemption here because well

operators can comply with both Measure Z and section 3106 by

not using the oil production methods Measure Z bans, or by

ceasing to produce oil in the County altogether. 7 In essence,

PMC argues that the theoretical possibility of compliance with

both state and local law is sufficient to overcome preemption.

PMC’s argument fails because, as noted above, compliance

with both laws must be “reasonably possible.” (City of Riverside,

supra, 56 Cal.4th at p. 743, italics added.) Here, we cannot say

it is “reasonably possible” for well operators “to comply with both

the state and local laws” (ibid.) by requiring them to curb their

conduct in a way that conforms to a local ban, without regard to

what the state law permits. Carried to its logical extension,

PMC’s argument would mean that a local law that contradicts

state law would never be preempted, because in almost every

case, it is theoretically possible for a party to comply with state

and local laws that contradict each other, simply by not

7 As noted, the trial court found that oil production would

cease in five years or less were oil producers in the County

banned from using the methods specified in Measure Z. PMC

denies that Measure Z is “about ending oil and gas operations in

the [C]ounty,” but PMC does not identify any methods other

than the ones Measure Z bans that oil producers in the County

would be able to use to continue producing oil in the County.

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CHEVRON U.S.A. INC. v. COUNTY OF MONTEREY

Opinion of the Court by Jenkins, J.

engaging in the conduct prohibited by local law. 8 Our statement

in City of Riverside does not narrow the scope of contradiction

preemption in this manner.

Accordingly, we conclude Measure Z contradicts, and

therefore conflicts with and is preempted by, section 3106. 9

8 Take, for example, our conclusion in Ex Parte Daniels

(1920) 183 Cal. 636, 647–648, that contradiction preemption

applies to a local ordinance setting the maximum speed limit

lower than that set by state law. (See O’Connell v. City of

Stockton, supra, 41 Cal.4th at p. 1068 [characterizing Ex Parte

Daniels as a “ ‘ “contradiction” ’ ” preemption case].) It may be

possible for a local resident to comply with both laws by driving

at or below the lower, local speed limit, or by not driving at all,

but this does not mean that compliance with both laws is

“reasonably possible” (City of Riverside, supra, 56 Cal.4th at

p. 758) such that the local law is not preempted.

9 PMC argues a strong presumption against preemption

applies because Measure Z is a “land use ordinance.” Regardless

of whether Measure Z qualifies as a “land use ordinance,” we

conclude that any presumption that might apply (see Big Creek

Lumber, supra, 38 Cal.4th at p. 1151) is amply rebutted by the

fact that the measure clearly contradicts section 3106.

Given our finding of contradiction preemption, we need

not address whether the doctrine of field preemption also

applies, which would require us to define a “field” and determine

whether state law, in light of its purpose and scope, has “fully

occupied” that field. (Sherwin-Williams, supra, 4 Cal.4th at

p. 898 [field preemption considerations include whether the

subject matter is “ ‘exclusively a matter of state concern,’ ”

indicates a “ ‘paramount state concern,’ ” or “ ‘is of such a nature

that the adverse effect of a local ordinance on the transient

citizens of the state outweighs the possible benefit to the’

locality”].) Nor need we address the parties’ conflicting views on

whether and how to apply the federal “obstacle preemption”

doctrine.

19

CHEVRON U.S.A. INC. v. COUNTY OF MONTEREY

Opinion of the Court by Jenkins, J.

DISPOSITION

We affirm the Court of Appeal’s judgment.

JENKINS, J.

We Concur:

GUERRERO, C. J.

LIU, J.

KRUGER, J.

GROBAN, J.

EVANS, J.

RAPHAEL, J. *

* Associate Justice of the Court of Appeal, Fourth

Appellate District, Division Two, assigned by the Chief Justice

pursuant to article VI, section 6 of the California Constitution.

20

See next page for addresses and telephone numbers for counsel who

argued in Supreme Court.

Name of Opinion Chevron U.S.A. Inc. v. County of Monterey

__________________________________________________________

Procedural Posture (see XX below)

Original Appeal

Original Proceeding

Review Granted (published) XX 70 Cal.App.5th 153

Review Granted (unpublished)

Rehearing Granted

__________________________________________________________

Opinion No. S271869

Date Filed: August 3, 2023

__________________________________________________________

Court: Superior

County: Monterey

Judge: Thomas W. Wills

__________________________________________________________

Counsel:

Robins Kaplan, Michael Geibelson, Bernice Conn, Lucas A. Messenger;

Environmental Law Clinic at Stanford Law School, Deborah A. Sivas,

Alicia E. Thesing; Center for Biological Diversity, Hollin N.

Kretzmann; Shute, Mihaly & Weinberger, Catherine Engberg, Kevin

P. Bundy and Aaron M. Stanton for Interveners and Appellants.

Katherine S. Hoff, Shana D.G. Lazerow, Alison Hahm; Julia K. Forgie;

M. Benjamin Eichenberg; Paulina Nicole Torres and Ingrid M.

Brostrom for Communities for a Better Environment, Natural

Resources Defense Council, San Francisco Baykeeper and Center on

Race, Poverty & the Environment as Amici Curiae on behalf of

Interveners and Appellants.

James R. Williams, County Counsel (Santa Clara), and Elizabeth

Vissers, Deputy County Counsel, for County of Santa Clara as Amicus

Curiae on behalf of Interveners and Appellants.

Noah Garrison for Former State Senator Fran Pavley as Amicus

Curiae on behalf of Interveners and Appellants.

Frank G. Wells Environmental Law Clinic, Sean B. Hecht, Benjamin

Avi Harris and Gabriel F. Greif for League of California Cities,

California State Association of Counties and County of Los Angeles as

Amici Curiae on behalf of Interveners and Appellants.

Alston & Bird, Jeffrey D. Dintzer, Matthew Wickersham; Gibson Dunn

& Crutcher, Theodore J. Boutrous, William E. Thomson, Dione

Garlick; Ragghianti Freitas and Todd Welden Smith for Plaintiff and

Respondent Chevron U.S.A., Inc.

Hanson Bridgett, Andrew A. Bassak, Christopher A. Rheinheimer,

Gary A. Watt, Patrick Burns; Manatt, Phelps & Phillips, Michael M.

Berger and Benjamin Shatz for Plaintiff and Respondent Aera Energy

LLC.

O'Melveny & Myers, Matthew Thomas Kline, Heather A. Welles and

Barton H. Thompson for Plaintiff and Respondent California Resources

Corporation.

Clifford & Brown and Donald C. Oldaker for Plaintiff and Respondent

Eagle Petroleum, LLC.

JRG Attorneys at Law, Johnson, Rovella, Retterer, Rosenthal & Gilles

and Jason S. Retterer for Plaintiffs and Respondents Trio Petroleum,

LLC, Sunset Exploration Inc., Monroe Swell Prospect, J.V., and

Bradley Minderals, Inc.

Hanna and Morton, Edward S. Renwick; and Jacqueline M. Zischke for

Plaintiff and Respondent National Association of Royalty Owners—

California, Inc.

Manatt, Phelps & Phillips and Michael M. Berger for Western States

Petroleum Association and California Independent Petroleum

Association as Amici Curiae on behalf of Plaintiffs and Respondents.

Munger, Tolles & Olson, Benjamin J. Horwich and Dila Mignouna for

Chamber of Commerce of the United States of America, California

Chamber of Commerce, Central Valley Business Federation and Los

Angeles County Business Federation as Amici Curiae on behalf of

Plaintiffs and Respondents.

Counsel who argued in Supreme Court (not intended for

publication with opinion):

Kevin P. Bundy

Shute, Mihaly & Weinberger LLP

396 Hayes Street

San Francisco, CA 94102

(415) 552-7272

Theodore J. Boutrous

Gibson Dunn & Crutcher, LLP

333 South Grand Avenue

Los Angeles, CA 90071

(213) 229-7804