Request Judicial Notice

Cal. Super. - 6th Dist.June 29, 2021

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21 CV383800 Santa Clara - Civil OFFICE 0F THE CITY ATTORNEY Electronlfmlly Flled CITY OF SANTA CLARA by Superior Court of CA, ALEXANDER E. ABBE, Assistant City Attorney (SBN 204782) County of Santa Clara, aabbe@santaclaraca.gov on 2/4/2022 3:04 pM 1500 Warburton AVenue Reviewed By: R. Walker Santa Clara, CA 95050 case #21 CV383800 Tele hone: 408-615-2230 . Facsgmile: 408-249-7846 E""°'°pe' 8222001 THOMAS LAW GROUP TINA A. THOMAS (SBN 088796) tthomas@thomaslaw.com CHRISTOPHER J. BUTCHER (SBN 253285) cbutcher@thomaslaw.com 455 Capitol Mall, Suite 801 Sacramento, CA 958 14 Telephone: 916-287-9292 Facsimile: 916-737-5858 Attorneys for Respondent and Defendant CITY OF SANTA CLARA (Additional counsel continued onfollowingpage) IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF SANTA CLARA BLOOM ENERGY CORPORATION, a Delaware Case N0. 21CV383800 corporation, Related Case N0. 19CV348838 Petitioner and Plaintiff, REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF RESPONDENT AND V. DEFENDANT’S DEMURRER CITY OF SANTA CLARA, a municipal ACTION BASED ON CALIFORNIA corporation; and DOES 1 through 20, inclusive ENVIRONMENTAL QUALITY ACT Respondents and Defendants. Assigned for all purposes t0 Hon. Sunil R. Kulkarni Dept.: 1 Date: April 21, 2022 Time: 1:30 pm. Action filed: June 29, 2021 Trial date: None set REQUEST FOR JUDICIAL NOTICE / CASE NO. 21CV383800 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DURIE TANGRI LLP RAGESH K. TANGRI (SBN 159477) rtangri@durietangri.com 217 Leidesdorff Street San Francisco, CA 941 11 Telephone: 415-362-6666 Facsimile: 4 1 5-236-6300 DURIE TANGRI LLP ANDREW ESBENSHADE (SBN 202301) aesbenshade@durietangri.com ROBERT M. PARIS, SBN 322229 rparis@durietangri.com 953 East 3rd Street Los Angeles, CA 90013 Telephone: 213-992-4499 Facsimile: 4 1 5-236-6300 REQUEST FOR JUDICIAL NOTICE / CASE NO. 21CV383800 ©OOQO\ 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TO THE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE THAT, pursuant t0 Evidence Code sections 451, 452, and 453, and in accordance With California law, the City of Santa Clara (City) hereby requests that the Court take judicial notice of the following documents and court records (Subject Documents): 1. Santa Clara City Code, Section 18.1 10.080, available at https://WWW.codepublishing.com/CA/SantaClara/#!/SantaClara1 8/SantaClara1 81 10.htm1#1 8.1 10.080. A true and correct copy of this section 0f the Santa Clara City Code is attached hereto as Exhibit 1. 2. Bloom Energy Corporation’s (Bloom) Notice of Motion and Motion for an Order Enforcing Compliance with Writ of Mandate, and Memorandum of Points and Authorities, in the related matter, Bloom Energy Corporation v. City ofSam‘a Clara et al., Case No. 19 CV348838 (“Bloom I”), filed in Santa Clara County Superior Court on March 16, 2020. A true and correct copy 0f this motion is attached hereto as Exhibit 2. 3. City 0f Santa Clara’s Opposition to Motion for Order Enforcing Compliance with Peremptory Writ 0f Mandate, filed March 30, 2020 in Bloom I. A true and correct copy 0f this brief is attached hereto as Exhibit 3. 4. Bloom’s Reply in Support of Motion for an Order Enforcing Compliance with Writ of Mandate, filed May 12, 2020 in Bloom I. A true and correct copy of this brief is attached hereto as Exhibit 4. 5. Judge Patricia M. Lucas’s Order Re Petitioner’s Motion t0 Enforce Writ in Bloom I, dated June 15, 2020. A true and correct copy 0f this order is attached hereto as Exhibit 5. 6. Bloom’s Claim Against the City for Damages to Persons 0r Personal Property, filed With the City 0n October 6, 2021. A true and correct copy 0f this claim is attached hereto as Exhibit 6. The City offers the following Memorandum of Points and Authorities in support of this request that the Court take judicial notice of Exhibit 1 through Exhibit 6. MEMORANDUM OF POINTS AND AUTHORITIES California Evidence Code section 453 requires that a court shall take notice of any matters specified in Evidence Code section 452, provided that the party requesting notice gives each adverse party sufficient notice of the request to enable that party to respond, and furnishes the court With 3 REQUEST FOR JUDICIAL NOTICE / CASE NO. 21CV383800 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 sufficient information t0 enable it to take judicial notice in the matter. (EVid. Code, § 453.) This Request for Judicial Notice satisfies these requirements because, as demonstrated further below, it provides notice t0 all parties of the request, attaches the Subject Documents, and provides sufficient information for the Court to take judicial notice of the Subject Documents. I. The Court must take judicial notice 0f Exhibit 1, Santa Clara City Code, Section 18.110.080 pursuant t0 Evidence Code Section 451, subdivision (a) Pursuant to Evidence Code section 451(a), “[j]udicial notice shall be taken of . . . public statutory law of this state[.]” Local ordinances shall be judicially noticed pursuant to this subdivision. (See, e.g., Tanimura & Antle Fresh Foods, Inc. v. Salinas Union High School Dist. (2019) 34 Cal.App.5th 775, 797, fn. 13.) Thus, the Court must take judicial notice of Exhibit 1, Santa Clara City Code, Section 18.1 10.080. (Evid. Code, § 451(a).) II. The Court should take judicial notice 0f Exhibits 2 through 5, the prior court filings 0f Bloom and the City, and the Court’s order upon them, pursuant t0 Evidence Code Section 452, subdivisions (d) and (h) This Court may take judicial notice of records of any court of the United States or of any state of the United States. (Evid. Code, § 452(d) [“Judicial notice may be taken 0f . . . [r]ecords 0f (1) any court 0f this state 0r (2) any court of record 0f the United States or of any state 0f the United States.”]; see also D. Cummins Corp. v. US. Fidelity & Guaranty C0. (2016) 246 Ca1.App.4th 1484, 1492, fn. 8 [permitting judicial notice of trial court’s register of actions]; Magnolia Square Homeowners Assn. v. Safeco Ins. C0. ofAmerica (1990) 221 Cal.App.3d 1049, 1056-1057 [affirming trial court’s judicial notice 0f a party’s complaint filed in a related matter].) The Court may also judicially notice “[flacts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (EVid. Code, § 452(h).) These court filings in Bloom I and the Court’s order upon them, Exhibit 2 through Exhibit 5, are judicially noticeable court records and are not subject t0 dispute. (Id. § 452(d), (h).) III. The Court should also take judicial notice 0f Exhibit 6, Bloom’s October 6, 2021 claim, for the purpose of determining compliance With the Government Claims Act pursuant t0 Evidence Code Section 452, subdivisions (c) and (h) This Court may also “take judicial notice of the filing and contents of a government claim, but not the truth of the claim.” (Gong v. City ofRosemead (2014) 226 Ca1.App.4th 363, 369, fn. 1 [taking 4 REQUEST FOR JUDICIAL NOTICE / CASE NO. 21CV383800 .5 ©OOQO\U1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 judicial notice 0f plaintiffs’ claims for monetary damages filed With the city for purposes of analyzing compliance With the Government Claims Act]; see also EVid. Code, § 452(0) [“Judicial notice may be taken of . . . [0]fficial acts 0f the legislative, executive, and judicial departments of the United States and 0f any state of the United States.”].) Exhibit 6, Bloom’s October 6, 2021, claim is also judicially noticeable because its existence and authenticity are not subject t0 dispute. (Id.; EVid. Code, § 452(h).) IV. Conclusion Based on these authorities and for the reasons stated herein, the City respectfully requests that the Court take judicial notice 0f (1) Santa Clara City Code Section 18.1 10.080 (Exhibit 1), (2) The motion, briefing, and Court’s order regarding Bloom’s Motion for an Order Enforcing Compliance with Writ of Mandate filed in Bloom I (Exhibits 2-5), and (3) Bloom’s Claim for Damages to Persons 0r Personal Property, filed with the City on October 6, 2021 (Exhibit 6). Respectfully submitted, Dated: February 4, 2022 THOMAS LAW GROUP 14g By: CHRISTOPHER J. BUTCHER Attorney for CITY OF SANTA CLARA Dated: February 4, 2022 DURIE TANGRI LLP By; flzggfi ANDREW ESBENSHADE Attorney for CITY OF SANTA CLARA 5 REQUEST FOR JUDICIAL NOTICE / CASE NO. 21CV383800 Exhibit Chapter 18.110 USE PERMITS Chapter 18.110 USE PERMITS Sections: 18.1 1 0.01 0 Use permits. 18.110.020 Application. 18.110.030 Public hearing. 18.110.040 Findings of the Planning Commission. 18.110.050 Nonconforming uses. 18.110.060 Decision. 18.110.070 Appeals. 18.110.080 Building permits. 18.110.090 Time extensions. 18.110.100 Revocation. 18.110.010 Use permits. A use permit is revocable, conditional, or valid for a term period. It may be issued in the manner specified herein for any of the uses for which such use permits are required by the terms of this title; and, unless otherwise provided, the use permit shall be limited to the particular use, building, property and plans submitted for which the permit is granted. The life of a use permit approval, unless otherwise conditioned or revoked, shall continue indefinitely, with the exception that said approval shall expire and become null and void twelve (12) months following the cessation of the conditional use. (Zoning Ord. § 55-1 ). 18.110.020 Application. Application shall be made to the Planning Commission in writing on a form prescribed by the Planning Commission, and shall be accompanied by plans and elevations necessary to show the detail of the proposed use or building. Such application shall be accompanied by a fee as set by resolution of the City Council. (Zoning 0rd. § 55-2). 18.110.030 Public hearing. A public hearing by the Planning Commission shall be held within forty-five (45) days after the project clearance committee's finding that the application is complete. Notice shall be given by posting in the time and manner set forth in SCCC 18.112.060. (Zoning Ord. § 55-3). 18.110.040 Findings of the Planning Commission. In order to grant any use permit, the findings ofthe Planning Commission shall be: (a) That the establishment or operation ofthe use or building applied for, under the circumstances ofthe particular case, are essential or desirable to the public convenience or welfare; (b) That said use will not be detrimental to any of the following: (1) The health, safety, peace, morals, comfort, and general welfare of persons residing or working in the neighborhood of such proposed use; (2) Property or improvements in the neighborhood of such proposed use; or https://www.codepublishing.com/CA/SantaCIara/#!/SantaCIara1 8/SantaCIara1 81 1 0.htm| 1/3 Chapter 18.110 USE PERMITS (3) The general welfare of the City; (c) That said use will not impair the integrity and character 0f the zoning district; and (d) That said use is in keeping with the purposes and intent ofthis title. The Planning Commission may designate such conditions in connection with the use permit as it deems necessary to secure the purposes ofthis title, and may require guarantees and evidence that such conditions will be complied with by the applicant. (Zoning Ord. § 55-4). 18.110.050 Nonconforming uses. Under the same circumstances and subject to the same findings set forth above, a use permit may be granted by the Planning Commission for the maintenance of a nonconforming use in or on a building or premises within a district. Such a use permit may only be granted to obviate or eliminate gross inequities which the Planning Commission finds would exist should the permit be denied. Any such permit shall be revocable by the City Council for good cause, and the City Council shall be the sole judge as to what shall constitute good cause. Such a permit may be limited in duration as to time or ownership ofthe premises involved; and shall be subject to compliance with such conditions in connection therewith as are deemed necessary by the Planning Commission to secure the purposes of this title. (Zoning Ord. § 55-5). 18.110.060 Decision. The Planning Commission shall render its decision within thirty-five (35) days following the close of the public hearing. Failure of the Planning Commission to render its decision within said period shall be deemed to be a denial of the application. The granting of any use permit, when conforming to the provisions of this section, is hereby declared to be an administrative function imposed upon the Planning Commission and the action of the Planning Commission shall be final except in the event of an appeal. (Zoning Ord. § 55-6). 18.110.070 Appeals. (a) In case the applicant or others affected are not satisfied with the action ofthe Planning Commission, they may, within seven calendar days after rendition ofthe decision by the Planning Commission, and pursuant to subsection (b) immediately hereinbelow, appeal to the City Council. In addition, the City Council (on its own motion made within seven days of the Planning Commission decision. or at its first regular meeting upon receipt of formal notice of the decision and action ofthe Planning Commission, whichever is later) may consider the action ofthe Planning Commission the same as if an appeal had been taken. (b) Said appeal shall be taken by the filing of a notice in writing to that effect with the City Clerk and by the payment of an appeal fee as set forth by resolution of the City Council. At its regular meeting held at least three days after the filing of a notice of appeal, the City Council shall set a date for the hearing of the appeal, and notice of said hearing date shall be given to the applicant and to the Planning Commission. Notice shall also be posted as provided in SCCC 18.112.060. The secretary of the Planning Commission shall transmit to the City Council all maps, records, papers, and files which constitute the record in the action from which the appeal was taken. (c) The City Council shall render its decision within forty-five (45) days after the conclusion of said hearing. The City Council, in its discretion, may reverse, affirm, or modify the action ofthe Planning Commission or it may remand said matter to the Planning Commission for further study or action. Failure of the Council to render its decision within said period shall be deemed to be an affirmance of the action of the Planning Commission. (Zoning Ord. § 55-7). 18.110.080 Building permits. No building permit or business license shall be issued in any case where a use permit is required by the terms of this title until after the granting of such use permit by the Planning Commission and the period allowed for appeal has elapsed. In the event of an appeal, no such permit or license shall be granted until the matter has been finally acted upon by the City Council and said use permit has been finally approved by the City Council. Building permits or business licenses issued pursuant to this entire section shall conform to the terms and conditions of the use permit granted. (Zoning Ord. § 55-8). 1 8.1 1 0.090 Time extensions. https://www.codepublishing.com/CA/SantaCIara/#!/SantaC|ara1 8/SantaClara1 81 1 0.htm| 2/3 Chapter 18.110 USE PERMITS (a) Any use permit approval granted in accordance with the terms of this title shall be automatically revoked and terminated if not used within two years of the original grant, or within the period of any authorized extensions thereof. (b) The Planning Commission may, at any time within the first twenty-four (24) months following the original approval, authorize extensions of time on any unused use permit without the need for any public hearing thereon, for period(s) not to exceed a total of twenty-four (24) consecutive months next following the original two years, when the applicant has satisfied the Planning Commission that good cause exists for the extension. (c) For the purpose of extending the time on any approval, the application shall be deemed timely made if the applicant has filed a request for an extension before the expiration of the particular approval sought to be extended. (d) The action of the Planning Commission shall be final except in the event of an appeal to or by the City Council as provided in SCCC 18.108.060. (Zoning Ord. § 55-9). 18.110.100 Revocation. Any use permit granted in accordance with the terms of this title may be revoked if basis for approval is found to be invalid or if any of the conditions of such permit are violated, or if any law or ordinance is violated in connection therewith, or if the Planning Commission finds, with the concurrence of the City Council, that the continuance of the use permit will endanger the public health, safety or welfare. The Planning Commission shall hold a hearing on any proposed revocation after giving written notice to the permittee at least ten days prior to the hearing and shall submit its recommendations to the City Council. The City Council shall act within forty-five (45) days after receipt ofthe recommendations of the Planning Commission. (Zoning Ord. § 55-10). The Santa Clara City Code is current through Ordinance 2037, passed December 7, 2021. Disclaimer: The City Clerk's Office has the official version of the Santa Clara City Code. Users should contact the City Clerk's Office for ordinances passed subsequent to the ordinance cited above. City Website: h_ttps://santac|araca.go_v/ City Telephone: (408) 61 5-2220 Code Publishing Compa_ny https://www.codepublishing.com/CA/SantaCIara/#!/SantaC|ara1 8/SantaCIara1 81 1 0.htm| 3/3 Exhibit 2 LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES 1QCV348838 Santa Clara - Civil LATHAM & WATKINS LLP James L. Amone (Bar N0. 150606) james.arn0ne@lw.com 355 South Grand Ava, Suite 100 Los Angeles, California 90071 Telephone: 213-485-1234 Facsimile: 213-891-8763 LATHAM & WATKINS LLP Marc T. Campopiano (Bar N0. 244904) marc.camp0pian0@lw.com Lucas I. Quass (Bar N0. 280770) lucas.quass@lw.com 650 Town Center Drive, 20th Floor Costa Mesa, California 92626 Telephone: 714-540-1235 Facsimile: 714-755-8290 Electronically Filed by Superior Court of CA, County of Santa Clara, on 3/16/2020 9:13 PM Reviewed By: R. Walker Case #1 9CV348838 Envelope: 41 76959 Attorneys for Petitioner and Plaintiff Bloom Energy Corporation SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA BLOOM ENERGY CORPORATION, a Delaware corporation, Petitioner and Plaintiff, V. CITY OF SANTA CLARA, a municipal corporation; SILICON VALLEY POWER, a not-for-profit municipal electric utility; and DOES 1 through 10, inclusive, Respondents and Defendants. Case N0. 19CV348838 BLOOM ENERGY CORPORATION’S NOTICE OF MOTION AND MOTION FOR AN ORDER ENFORCING COMPLIANCE WITH WRIT OF MANDATE; MEMORANDUM OF POINTS AND AUTHORITIES [Declarations OfMarc Campopiano, Edwin Pho, Joseph Hower and Professor Kit Bowen filed concurrently herewith] Assigned T0: Hon. Patricia M. Lucas Petition Filed: June 11, 2019 Writ Issued: February 10, 2020 Motion Hearing: Date: April 10, 2020 Time: 1:30 pm. Place: Dept. 3 CASE NO. 19CV348838 NOTICE OF MOTION & MOTION FOR AN ORDER ENFORCING COMPLIANCE; MEMO OF Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES TO ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that on April 10, 2020, at 1:30 p.m., in Department 3 0f the Santa Clara County Superior Court located at 191 North First Street, San Jose, CA 951 13, Petitioner and Plaintiff Bloom Energy Corporation (“Bloom”) will and hereby does move the Court for an order directing Respondents and Defendants City 0f Santa Clara and Silicon Valley Power (collectively, the “City”) t0 comply with this Court’s February 10, 2020, Peremptory Writ of Mandate. This Motion is made pursuant t0 Code 0f Civil Procedure, section 1097, 0n the grounds that the City’s imposition 0f onerous new requirements in the form 0f a use permit and California Environmental Quality Act (“CEQA”) review for fuel cell interconnection agreements effectively enforces the Fuel Cell Ban in Violation 0f this Court’s Writ. This Motion is based 0n this Notice, the Memorandum 0f Points and Authorities attached hereto, the Declarations 0f Marc Campopiano, Edwin Pho, Joseph Hower, and Professor Kit Bowen filed concurrently herewith and the exhibits attached thereto, the Petition, the Writ, the pleadings in this case, and such other evidence, argument, and authority that may be presented at 0r before the hearing 0n this matter. Dated: March 16, 2020 Respectfully submitted, LATHAM & WATKINS LLP By: /s/ James L. Amone James L. Amone Attorneys for Petitioner and Plaintiff Bloom Energy Corporation 2 CASE NO. 19CV348838 NOTICE OF MOTION & MOTION FOR AN ORDER ENFORCING COMPLIANCE; MEMO OF Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES II. III. IV. TABLE OF CONTENTS Page INTRODUCTION ............................................................................................................. 6 FACTUAL BACKGROUND ............................................................................................ 7 A. Bloom’s Fuel Cells ................................................................................................ 7 B. The Fuel Cell Ban Litigation ................................................................................. 7 C. Prior Interconnection Application Process and Building Permit History .................................................................................................................... 8 D. The City’s Unprecedented Changes t0 the Application Process and Bloom’s Efforts t0 Resolve the City’s Noncompliance with the Writ ........................................................................................................................ 9 LEGAL STANDARD ...................................................................................................... 11 ARGUMENT ................................................................................................................... 1 1 A. A Plain Reading 0f Section 18.60.050 Demonstrates That a Use Permit Is Not Required t0 Install a Fuel Cell ....................................................... 12 B. The City’s Abrupt Re-Interpretation 0f the Code Is Not Entitled t0 Deference ............................................................................................................. 1 5 C. CEQA Does Not Apply t0 Ministerial Actions ................................................... 17 D. City Ignored Its Grandfathering Determination for the Intel Application ........................................................................................................... 1 8 CONCLUSION ................................................................................................................ 20 CASE NO. 19CV348838 NOTICE OF MOTION & MOTION FOR AN ORDER ENFORCING COMPLIANCE; MEMO OF Ps & As 1 TABLE OF AUTHORITIES 2 Page(s) 3 CASES Bauer v. City ofSan Diego 5 (1 999) 75 Cal.App.4th 1281 .................................................................................................... 19 6 Friends 0f Westwood, Inc. v. City 0fLOS Angeles (1987) 191 Cal.App.3d 259 ..................................................................................................... 17 7 Golden Gate Scenic S.S. Lines, Inc. v. Pub. Util. Com. 8 (1962) 57 Ca1.2d 373 ............................................................................................................... 19 9 Games v. County ofMendocino 10 (1995) 37 Cal.App.4th 977 ...................................................................................................... 15 11 Harbor Fumigation, Inc. v. County ofSan Diego Air Pollution Control Dist. (1996) 43 Cal.App.4th 854 ...................................................................................................... 12 12 Hobbs v. Tom Reed Gold Min. C0. 13 (1913) 164 Ca1.497 ................................................................................................................. 11 14 King v. Woods 15 (1983) 144 Cal.App.3d 571 ..................................................................................................... 11 16 Motor Vehicle Mfrs. Assn. 0f United States, Inc. v. State Farm Mut. Auto. Ins. C0. (1983) 463 U.S. 29 ................................................................................................................... 16 17 S. Cal. Edison C0. v. Public Utilities Com. 18 (2000) 85 Cal.App.4th 1086 .................................................................................................... 15 19 Thomas Jefferson Univ. v. Shalala 20 (1994)512 U.S. 504 ................................................................................................................. 16 21 Tower Lane Properties v. City ofLos Angeles (2014) 224 Cal.App.4th 262 .................................................................................................... 16 22 Yamaha Corp. ofAmerica v. State Bd. oquualization 23 (1 998) 19 Cal.4th 1 .................................................................................................................. 1 5 24 STATUTES 25 Code Civ. Proc., § 1097 ................................................................................................................. 11 26 Pub. Resources Code, Section 21080, subsection (a) .................................................................... 17 27 Pub. Resources Code, Section 21080, subsection (b)(l) ............................................................... 17 28 LATHAM&WATKIN5LLP CASE NO. 19CV348838 ATT;:“§;::JE;AW 4 NOTICE 0F MOTION & MOTION FOR AN ORDER ENFORCING COMPLIANCE; MEMO OF Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES REGULATIONS Cal. Code Regs, tit. 20, § 1391(h) ................................................................................................. 14 Cal. Code Regs, tit. 14, § 15060(c)(1) .......................................................................................... 17 CITY OF SANTA CLARA MUNICPAL CODE Municipal Code, Section 18 .06.0 1 0, subsection (e)( 1) ...................................................... 12, 14, 15 Municipal Code, Section 18.60.050 ....................................................................................... passim TREATISES Black’s Law dictionary .................................................................................................................. 18 CASE NO. 19CV348838 NOTICE OF MOTION & MOTION FOR AN ORDER ENFORCING COMPLIANCE; MEMO OF Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION On February 10, 2020, this Court issued a Peremptory Writ 0f Mandate directing the City 0f Santa Clara not t0 enforce its prohibition 0n installing new fuel cells-the Fuel Cell Ban.1 The City is Violating that Writ. Given the urgency 0f Bloom’s harm, Bloom seeks an order compelling the City t0 comply with the Writ and stop enforcing the Fuel Cell Ban. Days after this Court issued the Writ, the City fabricated a new theory t0 perpetuate its illegal Fuel Cell Ban. Until last month the City approved fuel cell applications as ministerial approvals that d0 not require CEQA review. Now, t0 continue the Fuel Cell Ban’s effect, the City reversed years 0f precedent and asserted that a discretionary land use permit and CEQA review is needed before Bloom’s customer, Intel, may install fuel cells. The City’s arbitrary and unsupported re-interpretation 0f its Municipal Code is defacto enforcement 0f the Fuel Cell Ban in Violation 0f the Writ. The City’s indiscriminate break from its longstanding history 0f implementing its Municipal Code is not entitled t0 deference. The City’s new requirements cause long delays that immediately threaten the Viability 0f Intel’s project-and any other new fuel cell installation-to Bloom’s significant detriment. Moreover, in 2017, the City approved an agreement with Intel t0 install a fuel cell facility without requiring a use permit 0r CEQA review. The 20 1 7 agreement allows Intel t0 install another five megawatts 0f fuel cell capacity. When adopting the Fuel Cell Ban, the City committed t0 grandfathering all existing fuel cell agreements. Subsequently, the City Council delegated authority t0 the City Manager t0 modify Intel’s 2017 fuel cell agreement “t0 assure successful implementation 0fthe last 5MW 0fself-genemti0n that werepresumed within the existing Agreement.” Bloom relied 0n the City’s commitment by investing significant time and money into Intel’s fuel cell installation. Bloom respectfully requests that this Court order the City t0 comply with the Writ, stop enforcing the Fuel Cell Ban, and approve Intel’s pending ministerial fuel cell application. 1 “The parties agree the Resolution will prevent installation 0fnew [natural gas] Fuel Cells.” (Declaration 0f Marc T. Campopiano (“Campopiano Decl.”) EX. E p. 153 [Order].) CASE NO. 19CV348838 NOTICE OF MOTION & MOTION FOR AN ORDER ENFORCING COMPLIANCE; MEMO OF Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES II. FACTUAL BACKGROUND A. Bloom’s Fuel Cells Bloom makes fuel cells, an alternative energy technology that offers a substitute t0 buying electricity from the City’s electric utility, Silicon Valley Power (“SVP”). The U.S. Department 0f Energy recognizes fuel cells as “the most energy efficient devices for extracting power from fuels.” (AR16436.) California’s energy agencies have incorporated fuel cells into the state’s alternative energy programs designed t0 fight climate change and reduce dependence 0n traditional power plants. (AR16429, 1189.) Many 0f the City’s customers installed fuel cells for a cleaner, reliable source 0f onsite power. Bloom fuel cells must connect t0 the City’s electricity grid run by SVP. (Declaration 0f Edwin Pho (“Pho Decl.”) 1] 2.) Bloom helps its customers obtain the necessary interconnection agreement and approvals from the City t0 install fuel cells and connect t0 the SVP electric grid. (Ibid) B. The Fuel Cell Ban Litigation On May 7, 2019, the City Council adopted Resolution N0. 19-8701, which required fuel cells t0 use in-state renewable biomass fuel. (AR49-5 1, 16401-02, 9616-17.) As this Court concluded, that resolution was tantamount t0 a ban 0n fuel cells. (AR143, 9184, 16403, 10064.) Forcing fuel cells t0 use in-state renewable biomass fuel was a defacto ban 0n fuel cells because it is not reasonably possible t0 obtain renewable biogas from in-state sources. (ARI 6401-02, 96 1 6- 1 7.) The City Council adopted the Fuel Cell Ban without conducting any environmental review under CEQA. Instead, the City relied 0n the so-called “common sense exemption.” (AR48.) The City made n0 findings t0 support its use 0f the common sense exemption. (AR87.) On June 11, 2019, Bloom petitioned this Court for a writ 0f mandate directing the City t0 set aside the Fuel Cell Ban unless and until it conducts the required CEQA review. After extensive briefing and a lengthy hearing, 0n January 9, 2020, Judge Thomas E. Kuhnle ruled that the City improperly exempted the Fuel Cell Ban from CEQA review. (Campopiano Decl. EX. E pp. 165-66 [Order].) On February 10, 2020, the Court entered Judgment in Bloom’s favor and CASE NO. 19CV348838 NOTICE OF MOTION & MOTION FOR AN ORDER ENFORCING COMPLIANCE; MEMO OF Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES directed that the Writ be issued. The Writ requires the City t0 void the Fuel Cell Ban and stop enforcing the ban unless and until the City reapproves it in compliance with CEQA. (Id. at EX. E p. 168-69 [Writ].) C. Prior Interconnection Application Process and Building Permit History On April 28, 2017, Bloom applied for an interconnection agreement and building permit 0n behalf 0f its customer, Intel, for Intel’s 2200 Mission College Boulevard site. (Pho Decl. 1] 7, EX. B.) The City acknowledged receipt 0f the application 0n May 1, 2017. (Id. at 1] 8.) Mr. Billy Quach, Senior Electric Utility Engineer 0f Silicon Valley Power, wrote that he would have technical comments for Bloom by May 29, 2017. (Ibid) City staff conducted a technical evaluation and, 0n May 23, 2017, Mr. Quach provided technical feedback and marked the application as “Complete.” (Ibid) On July 14, 2017, Mr. Quach informed Bloom that the “permit system had been updated t0 release the permit for construction” pending final inspection. (Id. at 1] 9.) On December 14, 20 1 7, Intel received a “Conditional Permission-to-Operate letter” granting the interconnection request. (Id. at 1] 10.) N0 use permit 0r CEQA review was required 0r mentioned. For this fuel cell installation, the City Staff Report stated that Intel entered into an Electric Service Agreement By And Between The City OfSanta Clara, California And Intel Corporation (“Service Agreement”). (Campopiano Decl. EX. C [May 21 Staff Report].) Under the Service Agreement, the Staff Report stated that Intel was allowed t0 install 5 MW 0f electricity for the fuel cell system and t0 install 5 MW 0f additional capacity t0 the existing fuel cell system after certain usage thresholds were achieved. (Id. at EX. C p. 105 [May 21 Staff Report].) In 2019, Intel moved forward with the additional installation. (Ibid) At its May 7, 2019, hearing on the Fuel Cell Ban, the City Council affirmed that it would grandfather existing applications. (AR86; ARI 60:8-19 [“[I]f you have a natural gas fuel cell today, you can continue t0 operate that fuel cell. All existing agreements will also be honored. . .. We’re not going t0 g0 back when those people have spent money, made their own commitments. . .. And any complete applications by June lst, will be grandfathered in as well.”][emphasis added].) The City did not CASE NO. 19CV348838 NOTICE OF MOTION & MOTION FOR AN ORDER ENFORCING COMPLIANCE; MEMO OF Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES indicate that new installations would require a use permit. (See AR159-60). In addition, staff stated that the City Council would reconvene 0n May 21, 2019, t0 determine whether t0 authorize the City Manager t0 modify Intel’s existing fuel cell agreement. (AR162.) On May 21, 2019, the City Council reconvened t0 consider delegating authority t0 the City Manager t0 modify Intel’s 2017 fuel cell agreement “t0 assure successful implementation 0f the last 5 MW 0f self-generation that were presumed within the existing Agreement,” which was approved. (Campopiano Decl. EX. C p. 105 [May 21 Staff Report], EX. D p. 126 [May 21 Minutes].) The Staff Report for the hearing described how Intel was “permitted” t0 expand an “additional 5 MW” 0f fuel cells under the 2017 Intel agreement: As part 0f the [existing October 24, 2017,] Intel was permitted t0 self-generate an additional 5 MW 0f energy immediately with an additional 5 MW after certain usage thresholds had been met. This generation would operate in parallel t0 SVP generation and for which SVP provides back-up resources. Intel has installed the first 5 MW using natural gas fuel cells. (Id. at EX. C p. 105 [May 21 Staff Report].) According t0 the Staff Report, the delegation 0f authority t0 the City Manager was exempt from CEQA. (Ibid.) Based 0n the City’s grandfathering determination, Bloom understood that the City committed t0 processing the installation based 0n the rules and practices in place as 0f the grandfathering date. (Pho Decl. 1] 16.) Neither the City nor its staffmade any mention 0f the need for a land use permit, CEQA review, 0r any other new approvals beyond the ministerial approvals that were required for the 20 1 7 installation. (Ibid) D. The City’s Unprecedented Changes t0 the Application Process and Bloom’s Efforts t0 Resolve the City’s Noncompliance With the Writ In October 2019, Intel submitted a building permit application for the additional fuel cell installation. In January 2020, 0n Intel’s behalf, Bloom submitted an interconnection application for the additional installation. (Id. at 1] 11.) On January 24, 2020, Bloom asked the City for clarification that the application had been deemed complete. (Id. at 1] 12.) On January 27, 2020, the City surprised Bloom by sending Bloom an email asserting that the application was not complete but not detailing why. (Id. at 1] 12, EX. C.) City staff responded that it was “waiting t0 CASE NO. 19CV348838 NOTICE OF MOTION & MOTION FOR AN ORDER ENFORCING COMPLIANCE; MEMO OF Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES hear back from our leadership team 0n final requirements from Customer that will determine if the submitted application from Bloom is eligible.” (Ibid) On February 11, 2020, Andrew Crabtree, the City’s Director 0f Community Development, sent Intel a further email asserting for the first time that pursuant t0 Section 18.60.050 0f the Municipal Code a discretionary “use permit” would be required for the “installation 0f an Electric Power Plant, such as fuel cells.” (Id. atW 13, 15, EX. D.) Mr. Crabtree also asserted that the installation would require CEQA review. (Ibid) He conceded that “[i]n hindsight, we should have alerted you t0 the need for the use permit at the time that you applied for a building permit.” (Ibid) The City’s abrupt and arbitrary change in the application process was unprecedented. (See Id. at 1] 19.) The City had never before required a use permit 0r CEQA review for fuel cell applications. (Ibid) The onerous new requirements significantly threatened the Viability 0f this long-planned fuel cell installation. (Id. atW 17-18.) Bloom attempted t0 work with staff t0 resolve this issue but the City refused t0 budge from its illegal new position. (Id. at 1] 15.) On February 18, 2020, Bloom sent a cease and desist letter t0 the City stating that “the City, having been ordered not t0 enforce the Fuel Cell Ban, has decided t0 defy that order by fabricating a reason not t0 issue ministerial interconnection approvals.” (Campopiano Decl. EX. A p. 6 [Bloom Letter].) Bloom informed the City that it must “immediately stop enforcing the Fuel Cell Ban[] by refusing t0 approve Intel’s ministerial fuel cell interconnection application.” (Ibid.) The City sent Bloom a response 0n February 21, 2020, rejecting Bloom’s request t0 comply with the Writ. (Id. at EX. B [City Letter].) On March 4, 2020, the City filed its initial return t0 the Writ, asserting that, 0n February 25, 2020, it adopted Resolution N0. 20-8812, which removed the requirements 0f the Fuel Cell Ban, and that the City has immediately stopped enforcing the Fuel Cell Ban. (See City Initial Return t0 Writ at p. 2.) Bloom brings this motion because it has suffered and will continue t0 suffer irreparable harm t0 its business and reputation under the City’s defacto enforcement 0f the Fuel Cell Ban. There is an immediate risk to Bloom that Intel will cancel the fuel cell installation if the City CASE N0. 19CV348838 NOTICE 0F MOTION & MOTION FOR AN ORDER 10 ENFORCING COMPLIANCE; MEMO 0F Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES insists 0n requiring a use permit and CEQA review. Bloom has already spent approximately $2.25 million 0n the Intel application, which would be lost if Intel terminates the installation due t0 the City’s actions. Further, if Intel terminates the installation, Bloom would lose the total value 0f that installation-approximately $80 million. (Pho Decl. 1] 17.) III. LEGAL STANDARD Where a party refuses t0 obey a peremptory writ 0f mandate, the court may issue an order compelling compliance. (Code CiV. Proc., §1097.) The court that issues the original peremptory writ 0f mandate retains jurisdiction t0 make “any orders necessary and proper for the complete enforcement 0f the writ.” (Ibid; see also King v. Woods (1983) 144 Cal.App.3d 571, 578.) This authority is an inherent power 0f a court issuing a writ. (Hobbs v. Tom Reed Gold Min. C0. (1913) 164 Cal. 497, 501.) A motion t0 enforce compliance “only requires that a court find that such an order is necessary and proper under the circumstances.” (King, supra, 144 Cal.App.3d at 578; see also Code CiV. Proc., §1097). There is n0 requirement 0f a showing 0f willfulness 0r persistent refusal, 0r 0f deliberate intent t0 disregard the order. (King, supra, 144 Cal.App.3d at 578.) IV. ARGUMENT The Writ prohibits the City from enforcing the Fuel Cell Ban until the City complies with CEQA and the Writ. (See Campopiano Decl. EX. E p. 169 [Writ].) Despite that, the City continues t0 enforce the Fuel Cell Ban by imposing entirely new requirements t0 delay and impede Intel’s fuel cell installation and by ignoring its grandfathering commitment. The City’s current actions reverse all past practices involving fuel cell applications. Prior t0 this Court issuing the Writ, City staff quickly approved fuel cell applications without a use permit 0r CEQA review. (See Pho Decl. W 6-10.) The day after the Writ was issued, the City reversed course and told Intel for the first time ever that the City would require a use permit and CEQA review. (Id. atw 13, 15, EX. D.) The City’s new position violates the Writ. CASE N0. 19CV348838 NOTICE 0F MOTION & MOTION FOR AN ORDER 11 ENFORCING COMPLIANCE; MEMO 0F Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES A. A Plain Reading 0f Section 18.60.050 Demonstrates That a Use Permit Is Not Required t0 Install a Fuel Cell The Municipal Code’s use permit provision for “electric power plants” does not apply t0 fuel cells. “The general principles which guide interpretation 0f a statutory scheme are [] settled. (Harbor Fumigation, Inc. v. County ofSan Diego Air Pollution Control Dist. (1996) 43 Cal.App.4th 854, 860 [internal citations omitted].) It is the court’s “function [] t0 ascertain the intent 0f the Legislature so as t0 effectuate the purpose 0f the law.” (Ibid) “T0 ascertain such intent, courts turn first t0 the words 0f the statute itself, and seek t0 give the words employed by the Legislature their usual and ordinary meaning.” (Ibid) Municipal Code Section 18.60.050 requires use permits for “the construction 0r operation 0f electric power plants.” (Campopiano Decl. EX. F p. 172 [Code].)2 Section 18.06.010(e)(1) defines “electric power plants” as “equipment, fixtures, and personal property operated 0r maintained in connection with the production 0f electricity using any source 0fthermal, steam, wind, 0r solar energy with a generating capacity 0f more than five hundred (500) kilowatts and less than fifty (50) megawatts. . ..” (Id. at EX. F p. 178 [Code] [emphasis added].) Giving each word in Section 18.06.010(e)(1) its ordinary meaning, a fuel cell would only constitute an “electric power plant” if itproduces electricity using a source 0f thermal energy 0r steam energy (solar and wind energy are not applicable). (Declaration 0f Joseph Hower (“Hower Decl.”)W 7-9, 16.) Fuel cells d0 not. Fuel cells produce electricity using hydrogen through a chemical conversion process; heat and steam are only byproducts 0f the electricity production. (Id. at 9.) Fuel cells d0 not use steam energy 0r thermal energy t0 produce the electricity. (Ibid, Declaration 0f Professor Kit Bowen (“Bowen Decl.”)W 3, 5.) Traditional power plants use steam energy 0r thermal energy t0 turn turbines that generate electricity. (Hower Decl. W 11.) In a steam power plant, thermal energy from the combustion 0f fossil fuels is deliberately consumed t0 convert water t0 high temperature and 2 For the convenience 0f the Court, Bloom has attached as Exhibit F t0 the Campopiano Declaration true and correct copies 0f the relevant City 0f Santa Clara Municipal Code sections. CASE N0. 19CV348838 NOTICE 0F MOTION & MOTION FOR AN ORDER 12 ENFORCING COMPLIANCE; MEMO 0F Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES high pressure steam. (Id. at 1] 12.) This high temperature and high pressure steam is used t0 rotate a turbine t0 produce electricity. (Ibid) In contrast, fuel cells produce electricity by using hydrogen through a chemical conversion process. (Id. at 1] 9; Bowen Decl 1] 4; AR16435-37.) Professor Bowen makes clear that steam and heat are byproducts, not the source 0f electricity generation. Although byproduct steam is mixed with methane gas t0 reform the fuel, fuel cells d0 not use steam t0 produce electricity. (Bowen Decl. 1] 4.) The U.S. Department 0f Energy, Fuel Cell Technologies Office, recognizes that “[f]uel cells directly convert the chemical energy in hydrogen t0 electricity. . . .” (ARI 6436.) Bloom’s fuel cells are electrochemical devices that convert chemical energy 0f a fuel and oxidant directly into electrical energy. (Hower Decl. 1] 9.) There is a clear distinction between steam and gas power plants and fuel cells that is well understood in the industry. (Id. at 1] 7.) Steam generators and gas turbines are recognized as electric power plants with substantially greater electricity generating capacities than fuel cells. (Id. atW 11-15.) Power plants that use steam 0r thermal energy t0 produce electricity are very large facilities that typically require discretionary agency approval from the California Energy Commission if over 50 MW in capacity 0r local agencies if under 50 MW because the plant may cause significant impacts t0 the community and the environment. (Ibid) Fuel cells, 0n the other hand, are much smaller (slightly larger than a refrigerator) with minimal impacts that are not commonly considered electric power plants by industry standards. (Id. at 1] 8, 16.) The City’s own staff report for the Fuel Cell Ban acknowledged the difference between fuel cells and steam generators 0r gas turbines: Currently, Silicon Valley Power (SVP) customers can install their own electric generation systems 0n their properties, and also choose t0 remain connected t0 SVP’S electrical distribution system. Typical examples 0f customer-owned generation systems include technologies such as solar photovoltaics, internal combustion driven emergency back-up generators, fuel cells, steam generators, and gas turbines. Nearly all types 0f self-generation resources currently in use, other than solar systems, use fossil-fuels such as diesel 0r natural gas. (AR84.) The California Energy Commission’s regulations distinguish between generating facilities that produce electricity using chemical energy as compared t0 thermal energy 0r other CASE N0. 19CV348838 NOTICE 0F MOTION & MOTION FOR AN ORDER 13 ENFORCING COMPLIANCE; MEMO 0F Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES energy sources. (See Cal. Code Regs, tit. 20, § 1391(h) [“‘Generating unit’ means a device that converts mechanical, chemical, electromagnetic, 0r thermal energy into electricity. . . .”].) Furthermore, Section 18.06.010(e)(1) specifies that “electric power plants” have a “generating capacity 0f more than five hundred (500) kilowatts and less than fifty (50) megawatts.” (Campopiano Decl. EX. F p. 178 [C0de].) The basic Bloom fuel cell system is typically sized as a 300-kilowatt system, which individually is under the capacity set forth in the Municipal Code. (Pho Decl. 1] 14.) The City’s response t0 Bloom’s demand letter merely reinforces that fuel cells d0 not use thermal energy 0r steam energy t0 produce electricity. M, the City cites a Bloom petition t0 the Federal Energy Regulatory Commission that fuel cells “generate both electrical energy as well as steam and useful heat that are then used in the [natural gas fuel cell] Facility t0 produce hydrogen.” (Campopiano Decl. EX. B pp. 13-14, 85-94 [City Letter].) But this quote makes clear that steam and heat are byproducts 0f the electricity generation process, not the source 0f electricity generation. (See also Hower Decl. 1] 9, Bowen Decl. 1] 3.) Professor Bowen confirmed that, although steam is mixed with methane t0 reformulate the fuel t0 produce hydrogen, steam is not used t0 produce electricity. (Bowen Decl. W 4-5.) Only hydrogen is used t0 produce electricity. (Hower at 1] 9, Bowen Decl. W 4-5.) The City ignores the plain text 0f the FERC petition that explains that fuel cells produce electricity using hydrogen through chemical conversion, with steam and heat as byproducts: The [fuel cells] electricity-generating process involves two primary steps: First, as discussed in detail below, hydrogen H2 is generated from methane CH4 (i.e., pipeline natural gas) through steam reformation. Second, hydrogen H2 is reacted with oxygen t0 produce electricity. This reaction also produces heat and water (steam); however, they are merely byproducts. (Campopiano Decl. EX. B p. 87 [FERC petition] [emphasis added].) Second, the City cites t0 Bloom’s website t0 argue steam is used in electricity production: Operating at high temperatures inside the Energy Server (‘Bloom Box’), ambient air enters the cathode side 0f the fuel cell. Meanwhile, steam mixes with fuel entering from the anode side t0 produce reformed fuel. As the reformed fuel crosses the anode, it CASE N0. 19CV348838 NOTICE 0F MOTION & MOTION FOR AN ORDER 14 ENFORCING COMPLIANCE; MEMO 0F Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES attracts oxygen ions from the cathode. The oxygen ions combine with the reformed fuel t0 produce electricity, steam, and small amounts 0f carbon dioxide. The steam that is produced in the reaction is recycled t0 reform the fuel. (Campopiano Decl. EX. B p. 14 [City Letter].) This quote makes clear that steam is merely a byproduct 0f the electricity generation process, not the source 0f energy used t0 produce electricity. In sum, fuel cells produce electricity by using hydrogen and not by using a source 0f thermal energy, steam energy, wind energy 0r solar energy. Fuel cells d0 not constitute an “electric power plant” as defined by Section 18.06.010(e)(1). B. The City’s Abrupt Re-Interpretation 0f the Code Is Not Entitled t0 Deference Section 18.60.050 is not ambiguous and the City cannot invent new interpretations t0 enforce the Fuel Cell Ban. (Games v. County ofMendocino (1995) 37 Cal.App.4th 977, 986 [“The objective 0f statutory interpretation, 0f course, is t0 ascertain and effectuate legislative intent. If the words are clear, a court may not alter them t0 accomplish a purpose that does not appear 0n the face 0f the statute 0r from its legislative history.”].) The City’s new interpretation (one day after this Court issued the Writ) must be Viewed with skepticism and given n0 deference because it is merely an attempt t0 enforce the illegal Fuel Cell Ban. (S. Cal. Edison C0. v. Public Utilities Com. (2000) 85 Cal.App.4th 1086, 1105 [finding that “an agency’s interpretation 0f a regulation 0r statute does not control if an alternative reading is compelled by the plain language 0f the provision.”]; Yamaha Corp. 0f America v. State Bd. 0quualizati0n (1998) 19 Cal.4th 1, 7-8 [holding that the Court 0f Appeal used the incorrect standard 0f review in concluding the Board’s published annotation was dispositive, and finding that “[w]here the meaning and legal effect 0f a statute is the issue, an agency’s interpretation is one among several tools available t0 the court. Depending 0n the context, it may be helpful, enlightening, even convincing. It may sometimes be 0f little worth.”].) The City’s long-standing practice undercuts the City’s sudden and dubious change in interpretation. (See Tower Lane Properties v. City ofLos Angeles (2014) 224 Cal.App.4th 262, CASE NO. 19CV348838 NOTICE OF MOTION & MOTION FOR AN ORDER 15 ENFORCING COMPLIANCE; MEMO OF Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES 278.) For instance, in Tower Lane, the court held that the City 0f Los Angeles improperly conditioned a building permit upon compliance with certain sections 0f Los Angeles Municipal Code, finding that “[a]n agency’s undisclosed unilateral interpretation is not entitled t0 deference. Because the City cannotpoint t0 a consistent and long-standing interpretation, its current interpretation is entitled t0 n0 deference.” (Ibid. [emphasis added].) As in Tower Lane, the City’s interpretation “is not entitled t0 deference” because “the City cannot point t0 a consistent and long-standing interpretation” that supports its complete reversal 0f its own precedent. (Ibid) The City’s prior interpretation was correct. Section 18.60.050 applies t0 gas turbines and steam generators, not fuel cells. The City’s new interpretation is a thinly veiled attempt t0 enforce the Fuel Cell Ban. The City’s lack ofjustification for its sudden shift renders the decision arbitrary and capricious. For example, the Supreme Court held that the National Highway Traffic Safety Administration acted arbitrarily and capriciously when it failed t0 present an adequate basis and explanation for rescinding a passive restraint requirement in new vehicles. (Motor Vehicle Mfrs. Assn. 0f United States, Inc. v. State Farm Mut. Auto. Ins. C0. (1983) 463 U.S. 29, 42.) The Court stated that “an agency changing its course by rescinding a rule is obligated t0 supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance.” (Ibid; see also id. at pp. 41-42 [noting that a “settled course 0f behavior embodies the agency’s informed judgment that, by pursuing that course, it will carry out the policies committed t0 it” and requiring the agency t0 either reconsider the restraint issue further, 0r amend the statute t0 comply with the supporting analysis]; see also Thomas Jeflerson Univ. v. Shalala (1994) 512 U.S. 504, 524 n.3 (Thomas, J., dissenting) [“[J]udges are properly suspect 0f sharp departures from past practice that are as unexplained as the [agency’s] in this case.”].) Similar t0 the actions 0f the National Highway Traffic Safety Administration, the City has n0 reasoned analysis for its sudden change in interpretation 0f Section 18.60.050. The City correctly interpreted Section 18.06.050 for many years as not applying t0 fuel cells. Even when arguing for the Fuel Cell Ban at the approval hearing, the City Manager conceded that, absent the CASE N0. 19CV348838 NOTICE 0F MOTION & MOTION FOR AN ORDER 16 ENFORCING COMPLIANCE; MEMO 0F Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES ministerial interconnection process, the City has n0 discretionary authority over fuel cell installations. AR159-160 (“If you want t0 come into the city and not connect 0r interconnect into our system, then we really don’t have a say 0n what you’re doing. . .”) The City did not raise the need for a use permit at the Fuel Cell Ban hearing. (See Pho Decl. 1] 16; see also ARI 59- 160.) However, the City is now requiring a use permit for Intel’s fuel cell installation. On February 11, 2020, (one day after this Court entered the Writ), the City’s Director 0f Community Development emailed Intel regarding its building permit application, stating that, pursuant t0 Section 18.60.050, a use permit was required for the “installation 0f an Electric Power Plant, such as fuel cells.” (Pho Decl. W 13, 15, EX. D.) It was only after this Court ruled that the City’s Fuel Cell Ban was illegal that the City invented this new and stretched interpretation as a tool t0 enforce the Fuel Cell Ban. There have been n0 changes in factual circumstances justifying this radical departure from the City’s long-standing contrary interpretation. The City has arbitrarily changed its stance t0 enforce the Fuel Cell Ban, which this Court has already deemed improper. Accordingly, the City’s interpretation is not entitled t0 deference. C. CEQA Does Not Apply t0 Ministerial Actions Absent the City’s radical new theory that a use permit is suddenly required (it is not), Intel’s interconnection application and building permit application are ministerial actions that d0 not trigger CEQA. As explained in Bloom’s February 18, 2020, demand letter (Campopiano Decl. EX. A pp. 8-9 [Bloom Letter]), CEQA applies only t0 discretionary actions, not ministerial actions. (Pub. Resources Code §§ 21080(a), (b)(l); Cal. Code Regs, tit. 14, § 15060(c)(1); Friends 0f Westwood, Inc. v. City ofLOS Angeles (1987) 191 Cal.App.3d 259, 272.) In processing eight fuel cell applications over six years, the City never undertook CEQA review. (Pho Decl. 1] 6.) The City has expressly agreed that interconnection agreements and building permits are ministerial and not subject t0 CEQA review. (Campopiano Decl. EX. B p. 15 [City Letter stating “the City and Bloom agree that building permits are ministerial. The City and Bloom also agree that CEQA review is not required ‘solely for an interconnection.”’].) Therefore, CEQA will not apply t0 the Intel application if the City is compelled not t0 require a use permit. CASE NO. 19CV348838 NOTICE OF MOTION & MOTION FOR AN ORDER 17 ENFORCING COMPLIANCE; MEMO OF Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES D. City Ignored Its Grandfathering Determination for the Intel Application Besides arbitrarily changing its long-standing interpretation 0f zoning rules t0 continue the effect 0f the Fuel Cell Ban, the City violated its commitment t0 not impose new requirements 0n the Intel application. Bloom has been significantly harmed by the City’s broken promise. The City Council committed not t0 change the rules 0n existing fuel cell agreements. (AR160:1 1-22 [grandfathering existing agreements and completed applications]; see also Campopiano Decl. EX. C p. 105 [May 21 Staff Report] [“City made a commitment that any existing agreements 0r applications completed prior t0 the June 1 date would be grandfathered. . .”].) On May 21, 2019, the City Council followed staff’s recommendation t0 delegate authority t0 the City Manager t0 modify Intel’s existing 2017 fuel cell agreement “t0 assure successful implementation 0fthe last 5MW 0fself-generation that werepresumed within the existing Agreement.” (Campopiano Decl. EX. C p. 105 [May 21 Staff Report], EX. D p. 126 [May 21 Minutes].) Black’s Law dictionary defines grandfathering as “creat[ing] an exemption from the law’s effect for something that existed before the law’s effective date; specif, a statutory 0r regulatory clause that exempts a class 0f persons 0r transactions because 0f circumstances existing before the new rule 0r regulation takes effect.” (Black’s Law Dict. (1 1th ed. 2019).) By grandfathering the “presumed” expansion 0f the Intel fuel cell facility “t0 assure successful implementation 0f the last 5 MW,” the City exempted Intel from rule changes and changes in the City’s interpretation 0f its rules after May 21, 2019. Bloom relied 0n the City’s commitment by investing tremendous time and resources into Intel’s installation. (Pho Decl. w 16-17.) Although Section 18.60.050 existed in its current form before May 21, 2019, the City had neverpreviously interpreted the section t0 require a usepermit 0r CEQA reviewforfuel cells. (Id. atw 6, 19.) There was n0 reason t0 suspect that the City would Violate its grandfathering commitment and impose these new requirements 0n the proj ect. (Id. at 1] 16.) Even assuming the City’s new position were allowable (it is not), the City cannot undo its prior grandfathering commitment by imposing new requirements that it had never imposed before May21,2019. CASE N0. 19CV348838 NOTICE 0F MOTION & MOTION FOR AN ORDER 18 ENFORCING COMPLIANCE; MEMO 0F Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES In Bauer v. City ofSan Diego (1999) 75 Cal.App.4th 1281, 1285, the City 0f San Diego improperly imposed a use permit requirement 0n a retail liquor store that had been grandfathered under the prior rules without first conducting an evidentiary hearing 0n whether suspension 0f the store’s liquor license by the Department 0f Alcoholic Beverage Control constituted a termination 0f the store’s grandfathered rights. The court held that “the City could not properly deem Bauer’s grandfathered rights automatically terminated without providing Bauer with an opportunity t0 be heard.” (Id. at 1296.) “Hence, before applying its [new rules] t0 require Bauer t0 obtain a [conditional use permit] . . ., Bauer was entitled t0 an administrative hearing including an adjudication 0f the issue 0f the termination 0f her grandfathered rights.” (Ibid; see also Golden Gate Scenic S.S. Lines, Inc. v. Pub. Util. Com. (1962) 57 Cal.2d 373, 379 [“The purpose 0f a grandfather clause is t0 give those engaged in a business being brought under regulation the right t0 continue their existing business without being subjected t0 certification requirements that would be applicable if the business where then being started for the first time.”].) As in Bauer, the City cannot terminate Intel’s grandfathered rights 0n a whim and impose a new use permit requirement. Moreover, unlike Bauer, where the store owner’s actions created an arguable reason for terminating the grandfathering rights (suspension 0f the liquor license), Intel and Bloom have done nothing t0 undermine the grandfathering provision. Rather, Bloom relied 0n the City’s grandfathering commitment by investing significant time and resources into Intel’s installation because Bloom reasonably believed the City would process the application under the pre-Fuel Cell Ban rules. (See Pho Decl. 1] 16.) There is an immediate risk t0 Bloom that Intel will cancel the installation if the City continues t0 impose new rules. (Id. at 1] 17.) Bloom has already spent approximately $2.25 million that is threatened by the City’s thinly veiled enforcement 0f the Fuel Cell Ban. (Ibid) The total value 0f the installation is approximately $80 million that will be lost if Intel cancels the installation due t0 the City’s actions. (Ibid) The City’s imposition 0f onerous new requirements in the form 0f a use permit and CEQA review violates its grandfathering commitment, effectively continues t0 enforce the Fuel Cell Ban in Violation 0f the Writ, and substantially harms Bloom. (Ibid) CASE N0. 19CV348838 NOTICE 0F MOTION & MOTION FOR AN ORDER 19 ENFORCING COMPLIANCE; MEMO 0F Ps & As LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES V. CONCLUSION Bloom respectfully requests that this Court issue an enforcement order compelling the City t0 comply with the Writ immediately, t0 cease any attempts t0 enforce the Fuel Cell Ban by requiring a use permit and CEQA review, and t0 approve Intel’s ministerial interconnection application and building permit. Dated: March 16, 2020 Respectfully submitted, LATHAM & WATKINS LLP By: /s/ James L. Amone James L. Amone Attorneys for Petitioner and Plaintiff Bloom Energy Corporation CASE N0. 19CV348838 NOTICE 0F MOTION & MOTION FOR AN ORDER 20 ENFORCING COMPLIANCE; MEMO 0F Ps & As Exhibit 3 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1QCV348838 Smebm-GW OFFICE OF THE CITY ATTORNEY CITY OF SANTA CLARA BRIAN L. DOYLE, City Attorney, SBN 112923 bdoyle@santaclaraca.gov ALEXANDER E. ABBE, Assistant City Attorney, SBN 204782 aabbe@santaclaraca.gov 1500 Warburton Ave. Santa Clara, California 95050 Tel (408) 615-2230 Fax (408) 249-7846 THOMAS LAW GROUP TINA A. THOMAS, SBN 088796 tthomas@thomaslaw.com CHRISTOPHER J. BUTCHER, SBN 253285 cbutcher@thomaslaw.com ANNE L. BAPTISTE abaptiste@thomaslaw.com, SBN 299304 455 Capitol Mall, Suite 801 Sacramento, California 95814 Tel (916) 287-9292 Fax (916) 737-5858 Attorneys for Respondents and Defendants CITY OF SANTA CLARA Electronically Filed by Superior Court of CA, County of Santa Clara, on 3/30/2020 2:35 PM Reviewed By: R. Nguyen Case #1 9CV348838 Envelope: 4215507 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF SANTA CLARA BLOOM ENERGY CORPORATION, a Delaware ) Case N0. 19CV348838 corporation, Petitioner and Plaintiff, V. CITY OF SANTA CLARA, a municipal corporation; SILICON VALLEY POWER, a not- for-profit municipal electric utility; and DOES 1 through 10, inclusive Respondents and Defendants. ) ) ) OPPOSITION T0 MOTION FOR ) ORDER ENFORCING COMPLIANCE ) WITH PEREMPTORY WRIT 0F ) MANDATE ) ) ACTION BASED ON CALIFORNIA ) ENVIRONMENTAL QUALITY ACT Petition Filed: June 11, 2019 1me: 1:30 pm. Dept: 3 Hearing Date: April 10, 2020 T vvvvvvvv R.Ng OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE uyen 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page I. Introduction ........................................................................................................................................ 6 II. Factual Background ........................................................................................................................... 6 A. The Litigation ............................................................................................................................... 6 B. Judge Kuhnle’s Decision 0n the Merits ....................................................................................... 7 C. The Writ and Judgment ................................................................................................................ 7 D. The City’s Return t0 the Writ ...................................................................................................... 8 E. The Intel Natural Gas Fuel Cell Project ....................................................................................... 8 F. Bloom’s Third-Party Objection t0 the Intel Project Permitting Requirements ............................ 8 III. Standard ofReview ............................................................................................................................ 9 IV. Argument ........................................................................................................................................... 9 A. The “enforcement order” sought by Bloom exceeds the scope of the Writ and CEQA .............. 9 B. Non-party Intel is an indispensable party to the claim in Bloom’s Motion ............................... 11 C. Neither Intel nor Bloom has exhausted administrative remedies .............................................. 12 D. Bloom’s claim is premature-the City merely seeks compliance with City Code requirements for the Intel Project; it has not “banned” fuel cells .................................................................... 12 E. In compliance with City Code requirements, the City is processing - and will continue t0 process - all fuel cell project applications proposed Within the City ........................................ 12 1. The City has not determined that all fuel cells meet the definition of an electric power plant pursuant t0 the City Code .................................................................................................... 13 2. A plain reading of Section 18.060.010(e)(1) demonstrates that the Intel Project meets the City’ s definition of an electric power plant ......................................................................... 13 i. The Intel Project proposes equipment operated in connection with the production of electricity ........................................................................................................................ 14 ii. The Intel Project proposes to use a source of thermal and steam .................................. 14 iii. The Intel Project proposes a generation capacity of more than 500 kilowatts and less than 50 megawatts .......................................................................................................... 16 3. Differences between natural gas fuel cells and “traditional power plants” d0 not allow the City to exclude natural gas fuel cells from the City’s definition of an electric power plant ...................................................................................................................................... 17 4. The City’s definition 0f an electric power plant is not unusual ........................................... 17 5. The City’s prior failure to require a use permit for fiJel cell projects does not compel - or even permit - the City to ignore the City Code’s plain language ........................................ 18 2 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 F. The Intel Service Agreement provides n0 support for Bloom’s Motion ................................... 19 V. Conclusion ....................................................................................................................................... 20 3 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Cases Page(s) Ballona Wetlands Land Trust v. City ofLos Angeles (201 1) 201 Cal.App.4th 455 ................................................................................................................. 10 Berkeley Hills Watershed Coalition v. City ofBerkeley (2019) 31 Cal. App. 5th 880 ................................................................................................................. 13 Browne v. County ofTehama (2013) 213 Cal.App.4th 704 ................................................................................................................. 12 Cal. Teachers Ass ’n v. Governing Bd. (1984) 161 Cal.App.3d 393 .................................................................................................................. 11 Carroll v. Civil Service Commission (1970) 11 Cal.App.3d 727 .................................................................................................................... 10 Centerfor Biological Diversity v. Department 0fFish & Wildlife (2016) 1 Cal.App.5th 452 ..................................................................................................................... 10 Doe v. Albany Unified School Dist. (2010) 190 Cal.App.4th 668 ................................................................................................................. 12 Estate ofMadison (1945) 26 Cal.2d 453 ............................................................................................................................ 19 Feduniak v. California Coastal Com. (2007) 148 Cal.App.4th 1346 ............................................................................................................... 19 Fontana v. Atkinson (1963) 212 Cal.App.2d 499 .................................................................................................................. 19 [one Valley Land, Air, & Water Defense Alliance, LLC v. County 0fAmad0r (2019) 33 Ca1.App.5th 165 ................................................................................................................... 10 Lindstrom v. California Coastal Com. (2019) 40 Ca1.App.5th 73 ..................................................................................................................... 13 Los Angeles Internat. Charter High School v. LOS Angeles Unified School Dist. (2012) 209 Cal.App.4th 1348 ................................................................................................................. 9 Motor Vehicle Mfrs. Assn. 0f United States, Inc. v. State Farm Mut. Auto Ins. C0. (1983) 463 U.S. 29 ................................................................................................................................ 18 San Franciscansfor Reasonable Growth v. City and County ofSan Francisco (1989) 209 Cal.App.3d 1502 ................................................................................................................ 10 Siskiyou County Farm Bureau v. Department ofFish & Wildlife (2015) 237 Cal. App. 4th 411 ............................................................................................................... 19 Smith v. Duarte (1964) 228 Cal.App.2d 267 .................................................................................................................. 12 4 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Templeton Action Committee v. County ofSan Luis Obispo (2014) 228 Ca1.App.4th 427 .................................................................................................................. 11 Tower Lane Properties v. City 0fL0s Angeles (2014) 224 Ca1.App.4th 262 ........................................................................................................... 13, 18 Statutes and Regulations Page(s) Government Code, Section 65000 et seq ................................................................... 11 Public Resources Code, Section 21000 et seq. .................................................................. 10 21 168.9, subd. (b) ................................................ 7, 10, 11 21 168.9, subd. (c) ....................................................... 9, 11 Cal. Code Regs., tit. 20, Section 1302(b)(14) .................................................................... 18 1302(b)(54) .................................................................... 18 1302(b)(57) .................................................................... 18 1304(b)(2)(D) ................................................................. 18 Miscellaneous Page(s) City Code section 18.06.010(e)(1) ............................................................................ 8, 13, 14, 15, 16, 17 City Code section 18.60.050 ................................................................................................. 8, 12, 13, 17 5 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. Introduction Petitioner Bloom Energy Comoration’s (Bloom) Motion for Order Enforcing Compliance with Peremptory Writ of Mandate (Motion) is flawed both procedurally and substantively. The Peremptory Writ 0fMandate (Writ) issued by Judge Kuhnle directs the City to set aside the City Council’s legislative act updating Silicon Valley Power’s (SVP) Rules and Regulations until such time as the City complies With the California Environmental Quality Act (CEQA). Bloom’s Motion, however, challenges an administrative decision of the City’s building division relating to application 0f the City Code t0 Intel Corporation’s (Intel) proposed 5-megawatt fuel cell project (Intel Project). This is an entirely different administrative act unrelated to the writ proceeding and involving Wholly different legal considerations. Thus, the Motion - Which purports to seek to enforce the Writ - addresses a matter and requests relief that far exceeds the scope 0f the Writ. For this reason alone, the Motion must be denied. Moreover, Intel is not a party t0 the underlying litigation and has not sought to intervene in this matter. Furthermore, neither Intel nor Bloom pursued any available administrative remedies before Bloom filed this Motion, and the Intel Proj ect remains pending with the City. Finally, even if this Court considers the substantive merits 0fBloom’s Motion, the City’s action is not a “Fuel Cell Ban”, as alleged by Bloom. The City is simply complying with the plain language 0f the City Code by requiring Intel t0 submit a use permit application for the Intel Proj ect. Nothing more, nothing less. The City Code is not ambiguous. A fiJel cell that meets the definition of an electric power plant (like the Intel Proj ect) requires a use permit. Bloom’s Motion is meritless. II. Factual Background A. The Litigation On June 11, 2019, Bloom filed a Petition for Writ 0f Mandate (Petition) challenging the City’s approval of Resolution No. 19-8701 (Resolution). (Petition, W 1, 11.) The Resolution amended SVP’s Rules and Regulations to mandate that SVP customers seeking to interconnect a new self-generation facility use a renewable electric generation facility. (Id. at 1] 1.) The City reasoned that the SVP grid emitted fewer greenhouse gases than non-renewable self-generation facilities. On that basis, the City concluded that the Resolution was exempt from CEQA. (Id. at 1] 44.) As Bloom’s natural gas fuel cells are not renewable electric generation facilities, Bloom argued 6 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 that the Resolution is a fuel cell ban and that the Resolution was not exempt from CEQA. (Petition, 1] 47, 81.) Specifically, Bloom’s Petition includes two causes 0f action. (Id. at 1H] 87-104.) The first alleges that the City “violated CEQA by failing to perform any environmental analysis 0n the Resolution” and requested that the Resolution be set aside. (Petition, 1H 95, 99.) The second seeks a declaration that the City “violated CEQA by foregoing environmental review of the Resolution. . .” (Petition, 11104.) B. Judge Kuhnle’s Decision 0n the Merits On January 9, 2020, Judge Kuhnle issued an eighteen (18) page Order on Bloom’s Petition (Order). (Declaration ofMarc T. Campopiano in Support ofBloom’s Motion (Campopiano Decl.), EXh. E, pp. 149-166.) In the Order, Judge Kuhnle rejected Bloom’s argument that “the Resolution may impact the environment by increasing C026 emissions” because substantial evidence supported the City’s conclusion that average C026 (Le. greenhouse gas) emissions from Bloom’s natural gas fuel cells exceed emissions from SVP’s grid. (Id. at p. 165 [Order, p. 17]; see also id. at pp. 161-162 [Order, pp. 13-14].) However, Judge Kuhnle also found that the “Resolution may impact the environment by causing NOX and SOX emissions and related health, water quality, and noise impacts t0 increase, and by increasing reliance 0n diesel generators.” (Id. at p. 165 [Order, p. 17].) As a result, Judge Kuhnle concluded that “the Resolution - the activity in question - may have a significant effect 0n the environment.” (Id. at p. 166 [Order, p. 18] (emphasis added).) Consistent with Bloom’s Petition, the Order does not address issues beyond the adequacy of the City’s CEQA compliance for the Resolution. C. The Writ and Judgment On February 10, 2020, Judge Kuhnle entered a Judgment Granting Petitioner’s Petition (Judgment). (Campopiano Decl., EXh. E, pp. 146-147 [Judgment]; id. at pp. 168-169 [Writ].) The Judgment directs a Writ to issue requiring the City to (1) void the Resolution and (2) stop enforcing the Resolution unless reapproved in compliance with the Writ and CEQA. (Id. at p. 147 [Judgment, 1] 2].) It also explains that the “Court shall retain jurisdiction pursuant to Public Resources Code section 21 168.9, subdivision (b).” (Ibid. [Judgment, fl 4].) In addition, the Writ states that, “this Writ does not direct [the City 0r SVP] t0 exercise their lawful discretion in any particular way.” (Id. at p. 169.) By separate filing, the City requested that this matter be returned t0 Judge Kuhnle because he expressly retained continuing jurisdiction; however, the City does not “obj ect” t0 Judge Lucas hearing the matter. 7 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 D. The City’s Return to the Writ On March 4, 2020, the City filed Respondents’ Initial Return to the Writ (Return) explaining the manner in which the City complied with the Writ. Specifically, the City’s Return explains that (1) “[u]pon issuance of the Writ, the City immediately stopped enforcing [the] Resolution”; (2) 0n February 25, 2020, the City adopted Resolution No. 20-8812, which removed all requirements previously implemented by the Resolution at issue in the underlying litigation; and (3) the City commenced fithher environmental review of the policies previously implemented by the Resolution. (Return, p. 2.) E. The Intel Natural Gas Fuel Cell Project On October 17, 2019, Intel submitted a building permit application for the 5-megawatt Intel Proj ect. (Declaration 0fEdwin Pho in Support 0fBloom’s Motion (Pho Decl.), EXh. D; Motion, p. 9:23- 24.) Based on City staff’s review of the application, the City’s building division determined that the Intel Project meets the definition of an electric power plant pursuant t0 City Code section 18.06.010(e)(1). (Pho Decl., 1] 13; Declaration 0f Kevin Kolnowski in Support of City’s Opposition (Kolnowski Decl.), fl 4.) City Code section 18.60.050 requires a property owner t0 obtain a use permit in order t0 operate an electric power plant. (Campopiano Decl., EXh. F, p. 172.) Thus, on February 11, 2020, the City’s Director 0fCommunity Development (Development Director) informed Intel that a use permit is required for the Intel Project. (Pho Decl., Exh. D, p. 30 [City e-mail to Intel].) T0 date, Intel has not submitted a use permit application for the Intel Project 0r filed an administrative appeal of the Development Director’s determination. (Kolnowski Dec1., W 6-7.) F. Bloom’s Third-Party Objection t0 the Intel Proj ect Permitting Requirements On February 18, 2020, Bloom sent a letter t0 the City objecting t0 the Development Director’s determination that the Intel Project requires a use permit. (Campopiano Dec1., EXh. A, pp. 6-9 [Bloom Letter]; Declaration of Christopher J. Butcher in Support of City’s Opposition (Butcher Decl.), fl 3.) In Bloom’s letter, Bloom demanded that the City “approve Intel’s interconnection application” or else Bloom would “file an ex part6 application With the Santa Clara Superior Court by the end of this week. . ..” (Campopiano Decl., EXh. A, p. 7 [Bloom Letter, p. 2]; Butcher Decl., fl 4.) Shortly thereafter, Bloom’s counsel informed the City’s counsel that Bloom intended t0 make an ex parte appearance 0n Monday, February 24, 2020. (Butcher Decl., 1] 5, Exh. 1 [Email from J. Amone].) 8 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 On February 2 1 , 2020, the City sent a letter t0 Bloom explaining Why the Intel Project meets the City’s definition of an electric power plant. (Campopiano Decl., EXh. B, pp. 11-102 [City Letter]; Butcher Decl., 1] 6.) The City also explained that, because Intel - not Bloom - is the property owner, “the City recommends that Intel Corporation address its concerns [if any] With the City directly.” (Campopiano Decl., Exh. B, p. 12 [City Letter, p. 2]; Butcher Decl., fl 6.) On February 22, 2020, Bloom informed the City that it would not make an ex parte appearance on February 24, 2020. (Butcher Decl., 11 7, EXh. 2.) Instead, Bloom stated that it would follow up With the City on February 24, 2020 to discuss the matter further in an effort t0 avoid judicial involvement. (Ibid.) However, Bloom did not follow up with the City 0n February 24, 2020 or after. (Id. at fl 7.) Aside from filing two public records act requests, the next time the City 0r its counsel heard from Bloom regarding this matter was three weeks later on March 16, 2020 when Bloom served the City with the Motion. (Id. at 1] 8.) Despite this three week delay by Bloom, Bloom refused to stipulate to any continuance of the hearing during the COVID-19 crisis notwithstanding that, based on this Court’s General Order re: Implementation of Emergency Relief, the current April 10, 2020 hearing is less than 16-c0urt days from Bloom’s filing of the Motion. (Id. at 1W 10-1 1.) III. Standard 0f Review When considering a challenge to a lead agency’s compliance with a writ, a court should focus 0n the agency’s response to the writ. (See Los Angeles Internat. Charter High School v. Los Angeles Unified School Dist. (2012) 209 Ca1.App.4th 1348, 1355 (LA High).) A court should uphold the agency’s action “unless it is devoid of evidentiary support.” (Ibid.) Furthermore, CEQA does not “authorize[] a court to direct any public agency to exercise its discretion in any particular way.” (Pub. Resources Code, § 21168.9, subd. (0).) “Where, as here, the statute leaves room for discretion. . ., [courts] must determine whether the action taken by the [agency] pursuant t0 the writ was ‘so palpably unreasonable and arbitrary as to indicate an abuse of discretion as a matter 0f 1aw.”’ (LA High, supra, 209 Cal.App.4th at pp. 1355-1356 (citation omitted).) IV. Argument A. The “enforcement order” sought by Bloom exceeds the scope of the Writ and CEQA. The Court’s Order and associated Writ and Judgment concern the City’s compliance with CEQA 9 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 in approving the Resolution. (See supra Section II.B-C.) Bloom’s Motion seeks t0 improperly extend the scope of the Writ beyond the Resolution (i.e. “the activity in question” [Order, p. 18]) in an effort to control the City’s discretion as to a separate proj ect proposed by Intel. (Motion, p. 629-1 1.) Bloom suggests that extending the Writ to cover the City’s processing 0f the Intel Project is appropriate because requiring Intel to obtain a use permit “is defacto enforcement of the Fuel Cell Ban” (Motion, p. 6: 12-13) and “this Court ruled that the City’s Fuel Cell Ban was illegal. . . .” (Motion, p. 17:9- 10). Preliminarily, in asserting that the Court ruled that a Fuel Cell Ban is illegal, Bloom does not include a citation t0 Judge Kuhnle’s Order, Judgment or Writ. (Motion, p. 17:9-10.) The reason for this omission is simple. Judge Kuhnle’s Order, Judgment and Writ d0 not conclude that the City imposed a “Fuel Cell Ban” 0r that such a “Ban” would be illegal. Instead, consistent With the causes 0f action in Bloom’s Petition (Petition, 1N 87-104), Judge Kuhnle’s Order, Judgement and Writ focus solely on the adequacy 0f the City’s CEQA compliance for the Resolution (i.e. “the activity in question” [Order, p. 18]). Statutory remedies allowed under CEQA do not include the enforcement action sought by Bloom. Public Resources Code section 21 168.9, subdivision (b), provides that a writ issued pursuant t0 CEQA “shall include only those mandates which are necessary t0 achieve compliance with this division and only those specific project activities in noncompliance With this division.” (Emphasis added; see also Centerfor Biological Diversity v. Department 0fFish & Wildlife (2016) 1 Cal.App.5th 452, 459 [CEQA “limits the authority of a court to ‘include only those mandates Which are necessary’ to achieve compliance With the California Environmental Quality Act (§ 21000 et seq.).”]; Ballona Wetlands Land Trust v. City ofLos Angeles (201 1) 201 Ca1.App.4th 455, 480 [retained jurisdiction pursuant to CEQA “is limited t0 ensuring compliance With the peremptory writ 0f mandate”]; Ione Valley Land, Air, & Water DefenseAlliance, LLC v. County ofAmador (2019) 33 Cal.App.5th 165, 173 [writ requiring agency to bring a decision into compliance with CEQA did not require the agency to address issues not raised in the underlying litigation]; San Franciscansfor Reasonable Growth v. City and County ofSan Francisco (1989) 209 Cal.App.3d 1502, 1517-15 1 8 [same].) Even outside the context 0fCEQA, all orders issued by a court to enforce compliance with a writ must be consistent with the terms 0f the writ. (See, e.g., Carroll v. Civil Service Commission (1970) 11 Cal.App.3d 727, 733-734 [enforcement order reversed Where it went far beyond terms of original writ]; 10 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 see also Cal. Teachers Ass ’n v. Governing Bd. (1984) 161 Ca1.App.3d 393, 400 [explaining relief requested would be properly denied if “outside the scope 0f ‘enforcement’” of the writ].) Here, Bloom’s Motion asks this Court t0 intervene in the City’s processing of the pending Intel Project application. (Motion, p. 20:4-5.) This request has absolutely n0 relationship t0 the City’s compliance with CEQA in approving the Resolution. The Resolution and the Intel Project are clearly separate activities. While the Resolution amended SVP’s Rules and Regulations relating to interconnecting self-generating facilities to SVP’s electrical grid, the Intel Project is a land use project - a natural gas fuel cell project - proposed by non-party Intel. (See Kolnowski Decl., 1] 8.) An order directing the City t0 exercise its discretion in a particular manner as to the Intel Project is not “necessary” to ensure that the City’s Resolution “achieve[s] compliance Wit ” CEQA. (See Pub. Resources Code, § 21 168.9, subd. (b).) Bloom’s attempt to challenge the City’s land use permitting process for the Intel Project as a Writ enforcement action in this litigation far exceeds the scope 0f the Order, Writ, and the plain language 0f Public Resources Code section 21 168.9, subdivision (b). Moreover, as explained in the Writ, CEQA does not authorize a “court to direct any public agency to exercise its discretion in any particular way.” (Pub. Resources Code, § 21 168.9, subd. (0).) Yet, that is precisely what Bloom seeks. Bloom requests that this Court direct the City to exercise its discretion 0n the Intel Project in a particular way by prohibiting the City from requiring a use permit for the Intel Proj ect and requiring the City t0 approve the Intel Proj ect. (Motion, p. 2024-5.) Such reliefmay be pursued by Intel under a separate Planning and Zoning Law claim (Government Code section 65000 et seq.) after Intel exhausts its administrative remedies. In the underlying litigation, however, Bloom exclusively challenged the City’s approval of the Resolution pursuant to CEQA. (Petition, W 87-104.) Thus, Bloom’s Motion seeks relief that is unavailable based 0n the causes 0f action raised in its Petition. B. Non-party Intel is an indispensable party t0 the claim in Bloom’s Motion. Bloom filed this Motion in response t0 the City informing Intel that the Intel Project requires a use permit. (Motion, p. 6:9-11.) Intel is not a party to the underlying litigation resulting in Judge Kuhnle’s Writ. For this additional reason, Bloom’s request for this Court to intervene in the City’s land use permitting process for the Intel Project is improper. As the property owner pursuing the Intel Proj ect, Intel is an indispensable party in litigation relating t0 the Intel Proj ect. (See Templeton Action Committee 1 1 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v. County 0f San Luis Obispo (2014) 228 Cal.App.4th 427, 431 [“When a plaintiff seeks affirmative relief that would injure or affect a third person’s interest, the third person is an indispensable party”].) C. Neither Intel nor Bloom has exhausted administrative remedies. A “party must first exhaust administrative remedies before seeking a writ 0f mandate to compel agency action.” (Doe v. Albany Unified School Dist. (2010) 190 Ca1.App.4th 668, 685.) Here, t0 exhaust administrative remedies, Intel - as the property owner pursuing the Intel Project - should either file a use permit application t0 allow the City to take final action 0n the project 0r file an administrative appeal 0f the Development Director’s determination regarding the City Code requirements. (See Kolnowski Decl., 1H 6-7; Butcher Decl., Exh. 5.) As Intel has not pursued either administrative remedy, Intel (and by extension third-party Bloom) cannot pursue a judicial remedy relating t0 the City’s processing 0f the Intel Project. (See, e.g., Smith v. Duarte (1964) 228 Cal.App.2d 267, 269-270 [property owners did not have standing t0 challenge a zoning ordinance because they failed to exhaust administrative remedies].) D. Bloom’s claim is premature-the City merely seeks compliance with City Code requirements for the Intel Proj ect; it has not “banned” fuel cells. Even if the Writ and Judgment could be interpreted to expand beyond a CEQA challenge to the Resolution to prohibit any action by the City that results in a “Fuel Cell Ban” (i.e. “prevent[s] installation of new [natural gas] Fuel Cells”) (Motion, p. 6:27-28), the City has taken n0 such action. The City has not refused t0 process applications for fuel cell projects. The City merely informed Intel that the Intel Project meets the City’s definition of an electric power plant and, therefore, requires a use permit. Requiring that a developer, such as Intel, comply With zoning requirements “is clearly not a ban.” (Browne v. County ofTehama (2013) 213 Cal.App.4th 704, 721 [explaining that an ordinance regulating the quantity and location of marijuana cultivation did not constitute a ban on cultivation].) Thus, the very premise 0fBloom’s Motion - that the City’s request that Intel submit an application for a use permit “is defacto enforcement 0f the Fuel Cell Ban” (Motion, p. 6: 12-13) - is incorrect as a matter of law. E. In compliance With City Code requirements, the City is processing - and will continue t0 process - all fuel cell project applications proposed within the City. The City Code provides that in specified zoning districts a use permit is required to operate an electric power plant. (Campopiano Dec1., EXh. F, p. 172 [City Code, § 18.60.050].) Bloom does not dispute the fact that the City Code requires a use permit for an electric power plant. (Motion, p. 12:1 1- 12 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 [“Municipal Code Section 18.60.050 requires use permits for ‘the construction 0r operation 0f electric power p1ants.”’].) Instead, Bloom argues that “[t]he Municipal Code’s use permit provision for ‘electric power plants’ does not apply t0 fuel cells.” (Id. at p. 1223-4.) As demonstrated below, Bloom is incorrect. 1. The City has not determined that all fuel cells meet the definition 0f an electric power plant pursuant t0 the City Code. The City’s Development Director informed Intel that the Intel Proj ect requires a use permit. (Pho Decl., EXh. D, p. 30.) This determination was made in the context of, and based 0n, an evaluation of the Intel Project as proposed by Intel and the City Code. (Ibid.; see Kolnowski Dec1., 1] 4.) As with all project applications submitted to the City, the City will review any natural gas fuel cell project application submitted by an applicant 0n its own merits. Depending 0n the scope and scale of a natural gas fuel cell project, the project may or may not meet the City’s definition of an electric power plant. For example, as discussed further in Section IV.E.2.iii below, a natural gas fuel cell project With a generating capacity of less than 500 kilowatts or more than 50 megawatts does not meet the City’s definition of an electric power plant. As a Bloom fuel cell project can be configured t0 have a generating capacity 0f as little as 300 kilowatts (Pho Decl., fl 14) or as large as “many tens ofmegawatts” (Campopiano Decl., Exh. B, p. 99), a file] cell project could be proposed - based 0n generating capacity alone - that does not meet the City’s definition of an electric power plant. 2. A plain reading of Section 18.060.010(e)(1) demonstrates that the Intel Project meets the City’s definition 0f an electric power plant. The City and Bloom agree that the City’s definition of an electric power plant is not ambiguous. (Motion, p. 15: 10-12.) For this reason, the court “need not resolve” the appropriate level of deference t0 afford t0 the City. (Lindstrom v. California Coastal Com. (2019) 40 Cal.App.5th 73, 96.) “When the intent is unambiguous, the plain meaning controls and there is no need for construction.“ (Tower Lane Properties v. Cizfy ofLos Angeles (2014) 224 Ca1.App.4th 262, 269 (Tower Lane); Motion, p. 15:10-12.) City Code section 18.060.010(e)(1) defines an electric power plant as: [A]11 equipment, fixtures, and personal property operated 0r maintained in connection With 1 However, should this Court conclude that the definition is ambiguous, the “[C]ity’s interpretation of its own ordinance ‘is entitled to great weight unless it is clearly erroneous 0r unauthorized.” (Berkeley Hills Watershed Coalition v. City ofBerkeley (2019) 31 Cal. App. 5th 880, 896.) AS discussed further, infra Section IV.E.5, Bloom’s claim that the City is owed n0 deference because it has invented a new interpretation 0f its City Code is meritless. 13 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 production of electricity using any source of thermal, steam, Wind, or solar energy With a generating capacity of more than five hundred (500) kilowatts and less than fifty (50) megawatts, including all conduits, ducts, 0r other devices, materials, apparatus, 0r property used or to be used for the transmission of the electricity so produced. As demonstrated by the plain language above, the City’s definition of an electric power plant has three elements. An electric power plant includes: (1) All equipment, fixtures, and personal property operated 0r maintained in connection With production of electricity; (2) that uses any source of thermal, steam, Wind, or solar energy; and (3) that has a generation capacity 0fmore than 500 kilowatts and less than 50 megawatts. (City Code, § 18.060.010(e)(1) (emphasis added).) As demonstrated below, the Intel Proj ect meets all three elements 0f the City’s definition. i. The Intel Proj ect proposes equipment operated in connection with the production 0f electricity. Bloom acknowledges that the Intel Project proposes t0 “produce electricity. . .” (Motion, p. 12:20-22.) Bloom also admits that its fuel cell projects require installation 0f equipment, fixtures or personal property. (Declaration of Joseph Hower in Support of Bloom’s Motion (Hower Decl.), 1] 10 [providing a picture 0f the equipment included in “[a]n array of 42 Bloom fuel cells”].) Thus, the Intel Proj ect meets this first portion ofthe City’s definition ofan electric power plant because the Intel Proj ect consists 0f “equipment, fixtures, and personal property” that Will be “operated or maintained in connection With production 0f electricity.” (City Code, § 18.060.010(e)(1); Declaration of Thomas Cameron in Support of the City’s Opposition (Cameron Decl.), 1] 15.) ii. The Intel Project proposes t0 use a source 0f thermal and steam. Bloom argues that the Intel Proj ect does not meet the City’s definition 0f an electric power plant because it does not use steam and heat as “the source of the electricity generation.” (Motion, p. 1324-6; Hower Decl., 1] 9.) However, the City’s definition is not limited t0 technology in which steam and heat are the “source 0f the electricity generation.” The City’s definition only requires that the equipment, fixtures, 0r personal property operated 0r maintained in connection With the production of electricity use “any source 0f thermal, steam, Wind, or solar energy.. . .” (City Code, § 18.060.010(e)(1).) The Intel Project meets this definition because, as Bloom admits, “Bloom’s fuel cells use steam and heat, which are byproducts of the fuel cell process, to convert natural gas into the hydrogen that is 14 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 used t0 actually generate the electricity.” (Hower Decl., 11 9; see also id. at fl 16 [“steam and heat are used to convert natural gas into the hydrogen needed for a fuel cell t0 generate electricity”].) Without the use of “heat (thermal) and steam” the Intel Project could not make the “feedstock” necessary for it t0 generate electricity. (Declaration 0f Kit Bowen in Support 0f Bloom’s Motion (Bowen Decl.), W 4- 5; Campopiano Decl., EXh. B, pp. 90 [a Bloom Natural Gas Fuel Cell Facility “generate[s] both electrical energy as well as steam and usefill heat that are then used in the Facility t0 produce hydrogen”]; id. at p. 87 [“Bloom’s Facilities utilize heat and steam”]; Declaration 0f Brewster Birdsall in Support of the City’s Opposition (Birdsall Decl.), 1] 9; see Kolnowski Decl., fl 4b; Cameron Decl., 1] 12.) Bloom attempts t0 carve the Intel Proj ect out 0fthe definition by arguing that only the “reforming portion 0f the device involves heat (thermal) and steam...” (See, e.g., Motion, p. 14:18-23; see also Bowen Decl., 1] 5; Birdsall Decl., 1] 7.) However, the City Code adopts the 2019 California Electrical Code definition 0f a “filel cell system” which includes “[t]he complete aggregate 0f equipment used t0 convert chemical fuel into usable electricity and typically consisting 0f a reformer, stack, power inverter, and auxiliary equipment.” (Kolnowski Decl., 1] 4a (emphasis added). Butcher Decl., Exh. 6.) This definition is logical. Bloom’s fuel cells are an integrated “pre-packaged, natural gas-fueled ‘Stationary Fuel Cell Power Systems’ . . ..” (Birdsall Decl., 1W 4-5.) Thus, “[t]he complete power system integrates the hydrogen-powered fuel cells with other equipment t0 produce electricity from the methane in the natural gas.” (Id. at 1] 5; see also Cameron Decl., 1H] 12-13 [“[F]uel cell power plants are not evaluated as individual process components. . .. The methane reformer and solid oxide fuel cell form an interdependent, not independent, system in the fuel cell power p1ant”].) Based both on the City’s definition of a “filel cell system” - which includes the “complete aggregate of equipment” (Kolnowski Decl., 1] 4a) - and the City’s definition 0f an electric power plant - which includes “all equipment, fixtures, and personal property” (City Code, § 18.06.010(e)(1)) - the plain language of the City Code requires the City to consider whether the integrated system meets the definition. (Emphasis added.) Moreover, “[b]ecause Bloom’s natural gas-to-hydrogen fuel cell power systems require thermal energy and steam to produce the hydrogen feedstock, the reforming portion of the system is fimdamentally connected With the production of electricity.” (Birdsall Decl., fl 9; see Cameron Decl.,W 12- 1 3; Kolnowski Decl., fl4b.) Given the integral role ofthe reformation process used by some fuel cells, 15 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 in characterizing performance efficiency 0f fuel cells, the American Society 0f Mechanical Engineers considers both the electrochemical cells and the associated subsystem including any fuel processor 0r reformer when characterizing the performance efficiency of fiJel cells. (Birdsall Decl., 1] 10.) Finally, Bloom’s interpretation of the City Code - t0 disaggregate different functions Within Bloom’s complete system - could be used t0 exclude many electric power plants from the City’s definition. (Kolnowski Decl., fl 5.) For example, traditional gas turbines or steam power plants use thermal or steam energy to rotate a turbine; the turbine, in turn, drives electric generators t0 generate electricity. (Ibid; Hower Decl., 1N 11-14.) Thus, these traditional power plants use thermal or steam energy as a step (rotating a turbine) in the process leading up to the fimction of driving the electric generator. (Kolnowski Decl., 1] 5.) Using thermal energy is just one ofthe many steps that occur together to achieve the ultimate goal 0f generating electricity. (Ibid.; see also Birdsall Decl., W 6, 9; Cameron Decl., W 12, 15.) In this way, the Intel Project is similar t0 a traditional power plant, as it proposes t0 use thermal 0r steam energy as a step (hydrogen reformation) in the process required by the Intel Proj ect to generate electricity from the fuel cell. (Kolnowski Decl., 1] 5.) Therefore, as proposed, the Intel Project meets the City’s definition 0f an electric power plant because it uses steam and thermal energy in the process ofproducing electricity. (Ibid.; see City Code, § 18.060.010(e)(1); Cameron Decl., 1] 15.) iii. The Intel Project proposes a generation capacity of more than 500 kilowatts and less than 50 megawatts. The Intel Project consists of a file] cell array With a 5-megawatt generating capacity. (Motion, p. 6: 1 8-19.) Therefore, the Intel Project proposes a generating capacity that is Within the range (i.e., 500 kilowatts to 5 megawatts) necessary to constitute an electric power plant pursuant to the City Code. (City Code, § 18.060.010(e)(1); see Kolnowski Decl., 1] 4c.) Bloom attempts to avoid Intel’s express request to install a 5-megawatt fuel cell project by suggesting that the Intel Proj ect is made up 0fmany fuel cells and that the individual fuel cells included Within the Intel Project each only have three hundred (300) kilowatts of generating capacity. (Motion, p. 1425-7.) Even if each individual fuel cell included Within the Intel Project has a generating capacity 0f under 500 kilowatts as asserted by Bloom, the Intel Project would still meet the City’s definition 0f an electric power plant because the Intel Proj ect has a total generating capacity of 5 megawatts. (Motion, 16 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 p. 6:18-19; see Kolnowski Decl., fl 4c.) This conclusion is mandated by the plain language of the City Code, which provides that an electric power plant includes “all equipment, fixtures, and personal property” making up the project. (City Code, § 18.060.010(e)(1).) In other words, When evaluating Whether a proj ect - n0 matter if it is a fuel cell 0r a solar array - meets the City’s definition ofan electric power plant, the City does not consider the generating capacity of a single fuel cell or single solar panel. Pursuant t0 the City Code, the City considers the generating capacity 0f the project as a Whole. In the case of the Intel Project, that means the project proposes a 5-megawatt generating capacity. 3. Differences between natural gas fuel cells and “traditional power plants” d0 not allow the City to exclude natural gas fuel cells from the City’s definition 0f an electric power plant. Bloom argues that “Section 18.60.050 applies to gas turbines and steam generators, not fuel cells.” (Motion, p. 1629-10; see also Hower Decl., W 11-16 [contrasting “traditional power plants” and natural gas fuel cells].) The City does not dispute that there are differences between “traditional power plants” and natural gas fuel cells. However, for the purposes of the City’s land use permitting requirements, the relevant question is only Whether a proposed proj ect meets the City’s definition 0f an electric power plant; not Whether a proposed project meets the definition of a “traditional power plant.” Bloom’s own declarations illustrate the irrelevance of the comparison between natural gas fuel cells and “traditional power plants.” For example, traditional steam power plants typically generate between 100 and 1,000 megawatts. (Hower Decl., 1N 12-13.) Thus, traditional steam power plants generally would not meet the City’s definition of an electric power plant. (See supra Section IV.E.2.iii [definition requires a generating capacity of 500 kilowatts to 50 megawatts].) A comparison between natural gas fuel cells and large traditional power plants (see Hower Decl., W 13, 15) - projects that d0 not meet the City’s definition of an electric power plant - has n0 relevance t0 the City’s determination Whether the Intel Proj ect 0r any other project meets the City’s definition of an electric power plant. 4. The City’s definition 0f an electric power plant is not unusual. Bloom also argues that “[f]uel cells... are not commonly considered electric power plants by industry standards.” (Motion, p. 13:17-19 (emphasis original).) The fact that a fuel cell may meet the City’s definition of an electric power plant is not unusual. For example, the State Energy Resources Conservation and Development Commission’s regulations adopted to implement the Warren-Alquist 17 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State Energy Resources Conservation and Development Act require utility distribution companies to collect data 0n “all power plants” in their service area. The regulations define “power plants” t0 include “fuel cell[s].” (Cal. Code Regs., tit. 20, § 1304(b)(2)(D); see also id. at §§ 1302(b)(54) [defining power plants t0 include “prime movers” and “electric generators”], 1302(b)(57) [defining “prime movers” t0 include “fuel cells”], 1302(b)(14) [defining “electrical generators” t0 include “fuel cells”].) 5. The City’s prior failure t0 require a use permit for fuel cell projects does not compel - or even permit - the City t0 ignore the City Code’s plain language. Bloom argues that the City’s “prior interpretation... [that] Section 18.60.050 applies t0 gas turbines and steam generators, not fuel cells” is correct. (Motion, p. 16:9-10.) However, Bloom cites to no evidence 0fany prior City interpretation. The City has not changed its interpretation ofthe City Code. For the few natural gas fuel cell projects installed in the City t0 date, the City mistakenly failed to consider whether those fuel cell projects met the definition 0f an electric power plant. Therefore, in issuing building permits for those projects, the City never reached a determination as t0 Whether the projects met the definition. But, the City’s failure to consider Whether these past fuel cell projects met the City’s definition does not compel the City to ignore the City Code’s plain language now and exclude fixture fuel cell projects from the City’s definition of an electric power plant. Motor Vehicle Mfrs. Assn. 0f United States, Inc. v. State Farm Mut. Auto Ins. C0. (1983) 463 U.S. 29 (Motor Vehicles) and Tower Lane, supra, 224 Ca1.App.4th 262 are readily distinguishable. (See Motion, pp. 15:27 to 16:24.) Motor Vehicles concerned the standard ofreview applicable t0 an agency’s decision t0 rescind a formal rule that had been the subj ect 0f approximately 60 prior rulemaking notices. (Motor Vehicles, supra, 463 U.S. at pp. 34, 41-42.) Tower Lane concerned an interpretation of a city ordinance that “require[d] no technical expertise” and Where conflicting declarations from the city’s own officials showed the city interpreted the ordinance inconsistently. (Tower Lane, supra, 224 Cal.App.4that pp. 276-279.) Here, in contrast, the City never adopted a formal (0r even an informal) rule 0r interpretation exempting fuel cells projects from the City’s definition 0f an electric power plant? 2 Bloom suggests that a statement by the City’s Chief Utility Electric Officer (AR 147), M. Pineda, demonstrates that the City cannot require fuel cells t0 obtain use permits. (Motion, pp. 16:27 - 17:3.) However, the Chief Utility Electric Officer’s comment was made during a hearing 0n proposed amendments t0 SVP’S Rules and Regulations. (AR 146.) In that context, the Electric Officer stated that When a property owner does not interconnect With SVP’s grid, then “we [i.e., SVP] really don’t 18 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Furthermore, in the context of a city’s failure t0 enforce its city code, past error does not excuse future compliance. (See Siskiyou County Farm Bureau v. Department ofFish & Wildlife (2015) 237 Cal. App. 4th 41 1, 443 [An agency’s prior failure to enforce a statute, “is an insufficient basis 0n Which to find the statute precludes it from doing so.”] (original italics); see also Fontana v. Atkinson (1963) 212 Cal.App.2d 499, 509 [failure to enforce zoning ordinance does not estop later enforcement]; Estate ofMadison (1945) 26 Cal.2d 453, 463 [“Mere failure t0 act does not constitute an administrative construction.”]; Feduniak v. California Coastal Com. (2007) 148 Cal.App.4th 1346, 1369 [“the mere failure t0 enforce the law, without more, will not estop the government from subsequently enforcing it”].) Therefore, notwithstanding the City’s past error, the plain language of the City Code requires fuel cell projects meeting the definition of an electric power plant to obtain a use permit. F. The Intel Service Agreement provides n0 support for Bloom’s Motion. In 2017, the City entered an electric service agreement between the City and Intel (Intel Service Agreement). (Administrative Record (AR) 125-136 [Intel Service Agreement].) The Intel Service Agreement “provides for certain obligations t0 be undertaken by the Parties, with the intent that SVP Will provide Customer With certain discounts on Customer’s charges for electric service in consideration of Customer entering into a long term contract with SVP.” (AR 126 [Intel Service Agreement, p. 2].) Bloom argues that the Intel Service Agreement “grandfathers” the Intel Proj ect and exempts the project from the City’s use permit requirement. (Motion, pp. 18:1 - 19:28.) Bloom’s argument is meritless. First, the Intel Service Agreement is an Agreement between the City, doing business as SVP, and Intel. Bloom is not a party to the agreement. The agreement provides that it “shall not be construed 0r deemed t0 be an agreement for the benefit of any third Party or parties, and n0 third Party 0r parties shall have any claim or right of action hereunder for any cause whatsoever.” (AR 129 [Intel Service Agreement, p. 5].) Therefore, Bloom lacks standing to assert that the Intel Service Agreement somehow compels the City to exempt the Intel Proj ect from the City’s use permit requirement. Second, the Intel Service Agreement includes the following remedies provision: Customer is bound t0 exhaust all administrative remedies by the Rules and Regulations have a say on what you’re doing, but if you want to interconnect with our [i.e., SVP’S] system, you should meet the same requirements that we’re [i.e., SVP] is trying to meet.” (AR 159-160.) 19 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 adopted by the City of Santa Clara from time t0 time, as well as any other administrative remedies required by law. In the event that the Customer exhausts all administrative remedies, but continues to dispute items, then, prior to commencing any litigation against the City of Santa Clara 0r SVP, Customer shall engage in Alternative Dispute Resolution. . .. (AR 130 [Intel Service Agreement, p. 6].) Intel has not taken any of the steps required to either exhaust administrative remedies 0r engage in Alternative Dispute Resolution as required by the Intel Service Agreement. Therefore, Intel has not completed - 0r even commenced - any 0f the steps required before Bloom brought this Motion. Third, even if Bloom could properly seek t0 enforce the agreement using this Motion, Bloom’s interpretation of the agreement is incorrect. The agreement does not commit the City to exempt the Intel Project from the City’s use permit requirements. The agreement concerns SVP’s utility customer rates as set forth in SVP’s Rules and Regulations and not the City’s land use permitting requirements. For this reason, the Intel Service Agreement only overrides terms 0f SVP’s Rules and Regulations in the event of a conflict. (AR 128 [Intel Service Agreement, p. 4, 1] 12].) SVP’S Intel Service Agreement does not purport t0 override, or even address, the City’s zoning requirements. In an effort to expand the Intel Service Agreement t0 somehow override the City’s land use permitting requirements, Bloom’s Motion cites t0 subsequent actions taken, and statements made, by the City. (Motion, p. 1825-28.) However, as explained in the Intel Service Agreement, the terms of the “Agreement, its Exhibits and the City’s Rules and Regulations embody the entire agreement between SVP and Customer and its terms and conditions.” (AR 129 [Intel Service Agreement, p. 5].) Thus, the arguments advanced by Bloom in reliance on actions taken, and statements made, by the City outside 0f the four corners ofthe Intel Service Agreement provide n0 support for the argument that the Intel Service Agreement prohibits the City from exercising land use authority over the Intel Proj ect. V. Conclusion For all of the reasons addressed herein, Bloom’s Motion is meritless. Therefore, the City respectfillly requests that the Court deny the Motion in its entirety. Dated: March 30, 2020 THOM LAWGW By: fl Tina A. Thomas Attorneys for Respondents and Defendants CITY OF SANTA CLARA 20 OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Bloom Energy Corp. v. City ofSanta Clara et al. Santa Clara County Superior Court Case N0. 19CV348838 PROOF OF SERVICE I am a resident of the United States, employed in the City and County of Sacramento. My business address is 455 Capitol Mall, Suite 801, Sacramento, California 95814. I am over the age 0f 18 years and not a party to the above-entitled action. On March 30, 2020, I served the following: OPPOSITION TO MOTION FOR ORDER ENFORCING COMPLIANCE WITH PEREMPTORY WRIT OF MANDATE On the parties in this action by causing a true copy thereof t0 be placed in a sealed envelope with postage thereon fully prepaid in the designated area for outgoing mail addressed as follows; or On the parties in this action by causing a true copy thereof to be delivered Via Federal Express t0 the following person(s) or their representative at the address(es) listed below; 0r On the parties in this action by causing a true copy thereof to be delivered by facsimile machine number (916) 737-5858 t0 the following person(s) or their representative at the address(es) and facsimile number(s) listed below; or On the parties in this action by causing a true copy thereof t0 be hand-delivered t0 the following person(s) 0r representative at the address(es) listed below; 0r On the parties in this action by causing a true copy thereof t0 be electronically delivered Via the internet to the following person(s) or representative at the address(es) listed below: SEE ATTACHED SERVICE LIST I declare under penalty of perjury that the foregoing is true and correct and that this Proof of Service was executed this 30th day ofMarch 2020, at Sacramento, California.fiA‘X Stephanie Richburg PROOF 0F SERVICE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Bloom Energy Corp. v. City ofSanta Clara et al. Santa Clara County Superior Court Case N0. 19CV348838 SERVICE LIST James L. Amone Attorneys for Petitioner and Plaintiff: iames.arnone@lw.com BLOOM ENERGY CORPORATION LATHAM & WATKINS LLP 355 South Grand Ave., Suite 100 Los Angeles, California 90071 Telephone: 213-485-1234 Facsimile: 213-891-8763 Marc T. Campopiano marc.camp0piano@lw.com Lucas I. Quass 1ucas.quass@lw.com LATHAM & WATKINS LLP 650 Town Center Drive, 20th Floor Costa Mesa, California 92626 Telephone: 714-540-1235 Facsimile: 714-755-8290 PROOF 0F SERVICE Exhibit 4 LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES LATHAM & WATKINS LLP James L. Amone (Bar N0. 150606) Elecuon'cally F'led - by Superior Court of CA,ameS.arn0ne [W.COWZ 3515 South Grannge” Suite 100 County 0f Santa C'aras Los Angeles, California 90071 0n 5/1 2/2020 9:29 PM Telephone: 213-485-1234 Reviewed By: Tunisia Turner Facsimile: 213-891-8763 Case #1 9cv343333 Envelope: 4332581 LATHAM & WATKINS LLP Marc T. Campopiano (Bar N0. 244904) marc.camp0pian0@lw.com Lucas I. Quass (Bar N0. 280770) lucas.quass@lw.com 650 Town Center Drive, 20th Floor Costa Mesa, California 92626 Telephone: 714-540-1235 Facsimile: 714-755-8290 Attorneys for Petitioner and Plaintiff Bloom Energy Corporation SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA BLOOM ENERGY CORPORATION, a Case N0. 19CV348838 Delaware corporation, BLOOM ENERGY CORPORATION’S Petitioner and Plaintiff, REPLY IN SUPPORT OF MOTION FOR AN ORDER ENFORCING COMPLIANCE V. WITH WRIT OF MANDATE CITY OF SANTA CLARA, a municipal [Supplemental Declarations 0fJoseph Hower corporation; SILICON VALLEY POWER, a and Marc Campopianofiled concurrently not-for-profit municipal electric utility; and herewith] DOES 1 through 10, inclusive, Assigned T0: Hon. Patricia M. Lucas Respondents and Defendants. Petition Filed: June 11, 2019 Writ Issued: February 10, 2020 Motion Hearing: Date: May 22, 2020 Time: 1:30 pm. Place: Dept. 3 CASE NO. 19CV348838 REPLY IN SUPPORT OF MOTION FOR AN ORDER ENFORCING COMPLIANCE WITH WRIT 1 TABLE OF CONTENTS 2 Page 3 I. INTRODUCTION ............................................................................................................. 5 4 II. ARGUMENT ..................................................................................................................... 6 5 A. The Court Has Authority t0 Grant Bloom’s Requested Relief .............................. 6 6 B. The City Continues De Facto Enforcement 0f the Fuel Cell Ban ......................... 8 7 1. The City’s New Interpretation Is Not Entitled t0 Deference ..................... 8 8 2. Bloom’s Fuel Cells Are Not “Electric Power Plants” ............................... 9 9 C. The City’s New Interpretation Does Not Undo Its Prior Grandfathering ..................................................................................................... 1 1 10 D. The City’s Procedural Arguments Fail ................................................................ 12 11 1. Bloom’s Motion Is Not Premature ........................................................... 12 12 2. Intel Is Not an Indispensable Party .......................................................... 13 13 3. Bloom Was Not Required t0 Exhaust Administrative 14 Remedies .................................................................................................. 1 3 15 III. CONCLUSION ................................................................................................................ 14 1 6 1 7 1 8 1 9 20 2 1 22 23 24 25 26 27 28 LATHAM&WATKIN5LLP CASE NO. 19CV348838 A”L°o:“i::9é:” 2 REPLY INEaglngazgEgfigifigsgvfigwg 1 TABLE OF AUTHORITIES 2 Page(s) 3 CASES 4 Am. Indian Model Schools v. Oakland Unified School Dist. (2014) 227 Cal.App.4th 258 .................................................................................................... 14 5 Bauer v. City ofSan Diego 6 (1999) 75 Cal.App.4th 1281 .................................................................................................... 11 7 Cal. Teachers Assn. v. Governing Bd. (1984) 161 Cal.App.3d 393 ....................................................................................................... 7 8 Cal. Trout, Inc. v. Sup. Ct. 9 (1990) 218 Cal.App.3d 187 ....................................................................................................... 7 10 Carroll v. Civil Serv. Com. (1970) 11 Cal.App.3d 727 ......................................................................................................... 7 1 1 Coral C0nstr., Inc. v. City & County ofScm Francisco 12 (2004) 116 Cal.App.4th 6 ........................................................................................................ 12 13 Cly. ofAlpine v. Cly. ofTuolumne (1958) 49 Cal.2d 787 ............................................................................................................... 14 14 Dept. ofPersonnel Admin. v. SupCt. 15 (1992) 5 Cal.App.4th 155 ........................................................................................................ 14 16 Golden Gate Scenic S.S. Lines, Inc. v. Pub. Util. Com. (1962) 57 Cal.2d 373 ............................................................................................................... 11 17 Harbor Fumigation, Inc. v. Cly. ofSan Diego Air Pollution Control Dist. 18 (1996) 43 Cal.App.4th 854 ........................................................................................................ 9 19 HousingAuth. 0fL.A. v. City 0fL.A. (1953) 40 Cal.2d 682 ................................................................................................................. 7 20 Motor Vehicles Manufacturers Association v. State Farm Mutual Auto Insurance 21 Company (1986) 463 U.S. 29 ..................................................................................................................... 8 22 0. WL. Found. v. City OfRohnert Park 23 (2008) 168 Cal.App.4th 568 .................................................................................................... 14 24 Professional Engineers in Cal. Govt. v. State Personnel Bd. (1980) 114 Cal.App.3d 101 ....................................................................................................... 7 25 Quantification Settlement Agreement Cases 26 (201 1) 201 Cal.App.4th 758 .................................................................................................... 13 27 Slocum v. State Bd. Oquualization (2005) 134 Cal.App.4th 969 ...................................................................................................... 9 28 LATHAM&WATKIN5LLP CASE NO. 19CV348838 ATTLgZNgZQTEgAW REPLY 1N SUPPORT 0F MOTION FOR AN ORDER 3 ENFORCING COMPLIANCE WITH WRIT LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES Summit Media, LLC v. City 0fL.A. (2015) 240 Cal.App.4th 171 ...................................................................................................... 7 Tower Lane Properties v. City 0fL.A. (2014) 224 Cal.App.4th 262 .................................................................................................. 8, 9 STATUTES Code CiV. Proc. § 389 ......................................................................................................................................... 13 § 389(b) .................................................................................................................................... 13 Muni. Code §18.06.010 ..................................................................................................................... 9, 10, 11 § 18.06.010(e)(1) ....................................................................................................................... 9 § 18.60.050 ........................................................................................................................... 8, 11 OTHER AUTHORITIES Black’s Law Dictionary (1 1th ed. 2019) .......................................................................................... 9 Merriam-Webster Dictionary, available at https://www.merriam- webster.com/dictionary/use (accessed Apr. 4, 2020) ................................................................. 9 CASE NO. 19CV348838 REPLY IN SUPPORT OF MOTION FOR AN ORDER ENFORCING COMPLIANCE WITH WRIT LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES I. INTRODUCTION The City continues t0 bend the rules t0 achieve a commercial advantagel for City-owned gas power plants over its competitor, Bloom Energy, a local clean energy company. Given the urgency 0f Bloom’s harm and the need for Bloom t0 provide reliable electricity t0 local businesses, Bloom seeks the City’s compliance with this Court’s Writ 0f Mandate. The Writ is clear. The City must d0 two things: (1) rescind the Fuel Cell Ban and (2) stop enforcing the Ban. Although the City vacated the Ban 0n paper, the City continues de facto enforcement 0f the Ban by stopping all new fuel cell applications with a sham new land use permit requirement that achieves the same result. This Court has broad authority t0 order the City t0 comply with the Writ even though Bloom could not have known t0 request this specific relief earlier. Bloom merely asks this Court t0 make the City handle fuel cell applications like it did before the Writ was issued. In its Opposition, the City presents a new theory for why a fuel cell should be considered an “electric power plant.” That theory directly contradicts the City Manager’s statements at the hearing when the City adopted the Fuel Cell Ban. The City’s arbitrary and unsupported break from its longstanding course 0f conduct is not entitled t0 deference. The City tries t0 muddle the “electric power plant” definition in the Municipal Code by asserting that fuel cells are power plants because some heat and steam are involved in converting methane into hydrogen as part 0f the fuel reforming process. But the City never even asserts that fuel cells use “steam energy” 0r “thermal energy” t0 generate electricity, a plain requirement 0f the Municipal Code’s definition. Irrespective 0f the City’s new theory, the use permit requirement cannot apply t0 the grandfathered Intel installation. Grandfathering means the City exempted the installation from rule changes and changes in the City’s interpretation 0f its rules after May 21, 2019. Bloom asked the City t0 clarify the scope 0f the Fuel Cell Ban 0n pending projects before the City acted. 1 The record shows the City’s anti-competitive motive. Silicon Valley Power’s Assistant Director emailed the Assistant City Manager (who was also SVP’S Interim Chief Electric Utility Officer) t0 alert him that Bloom planned t0 add “even more potential customers 0f natural gas fired fuel cells in Santa Clara.” (AR10768.) She wrote that “would mean another reduction in [SVP’s] growth forecastfor the budget.” (Ibid; emphasis added.) Seeking t0 protect the City’s substantial revenues from selling its own electricity, Mr. Pineda replied that the City Manager “would like t0 fast track regulations 0n future fuel cells (get something in the books n0w).” (Ibid.) CASE NO. 19CV348838 REPLY IN SUPPORT OF MOTION FOR AN ORDER ENFORCING COMPLIANCE WITH WRIT LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES The Citypublicly committed not t0 enforce the Ban 0n the Intel installation. Bloom then invested over $2 million toward that installation (with a value over $80 million), all of which will be lost if the City’s action forces its termination. The City completely ignores the harm it is causing by breaking this public promise through continued Ban enforcement. Bloom’s harm is severe. After Bloom filed this Motion, the City extended its new theory t0 another maj 0r customer, Equinix, telling them that they, too, may not install fuel cells without an “electric power plant” land use permit and CEQA review. The City’s conduct is an end-run around the Writ, impeding Bloom’s ability t0 sell its products t0 multiple customers who want them. Bloom respectfully requests that this Court order the City t0 comply with the Writ, stop enforcing the Fuel Cell Ban, and process the Intel installation consistent with the City’s grandfathering promise and longstanding course 0f conduct prior t0 the Writ. II. ARGUMENT A. The Court Has Authority t0 Grant Bloom’s Requested Relief Bloom asks this Court t0 enforce the Writ by compelling the City t0 “[s]t0p enforcing the [Fuel Cell Ban] unless and until the City 0f Santa Clara reapproves the [Fuel Cell Ban] in compliance with the writ and the California Environmental Quality Act.” (Writ, p. 2.) The City mischaracterizes the Writ as focusing solely 0n the adequacy 0f the City’s CEQA compliance. (Opp., p. 10:1 1-12.) As quoted above, the Writ orders the City t0 stop enforcing the Fuel Cell Ban. CEQA compliance only comes into play if the City readopts the Ban, which is not the current issue. Bloom is not asking this Court t0 dictate how the City complies with CEQA if it readopts the Ban. Bloom asks this Court t0 stop the City’s defacz‘o enforcement 0f the Fuel Cell Ban by pretending that a land use permit is needed when it is not. The City also claims that Bloom “seeks t0 [] extend the scope 0f the Writ beyond the [Ban]” t0 “control the City’s discretion as t0 a separate project proposed by Intel.” (Opp., p. 10:1-3; see also id., p. 11:16-17.) The City misconstrues Bloom’s Motion. Bloom is not asking this Court t0 dictate the City’s discretion over any valid land use authority. Bloom is asking this Court t0 enforce the Writ by stopping the City’s recently made-up pretense that fuel cells are electric power plants that need discretionary land use permits and a slow administrative process. CASE NO. 19CV348838 REPLY IN SUPPORT OF MOTION FOR AN ORDER ENFORCING COMPLIANCE WITH WRIT LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES The City also asserts that Bloom “seeks relief that is unavailable based 0n the causes 0f action raised in its Petition.” (Opp., p. 11:22.) This Court has authority t0 enforce the Writ even though Bloom could not have known t0 seek this specific relief in the underlying action. It is a “well settled rule that the court which issues a writ 0f mandate retains continuing jurisdiction t0 make any orders necessary and proper for the complete enforcement 0f the writ.” (Professional Engineers in Cal. Govt. v. State Personnel Bd. (1980) 114 Cal.App.3d 101, 109.) The court “has the authority t0 grant additional relief not expressly sought by the petitioner in writ proceedings if the relief is necessary t0 enforce the writ.”2 (Summit Media, LLC v. City 0fL.A. (2015) 240 Cal.App.4th 171, 182; see also Housing Auth. 0fL.A. v. City 0fL.A. (1953) 40 Cal.2d 682, 688.) For instance, in Housing Authority, the trial court granted a petition brought against the City 0f Los Angeles for attempting t0 withdraw approvals for a housing proj ect. After the writ was issued, the city failed t0 annex a necessary portion 0f the project’s land consistent with the city’s prior agreement t0 d0 so. (Id. at 684-685.) The court held that, not only did the city have the power t0 annex the property, but also that the city’s “consistent course 0f conduct . . . before it attempted t0 abrogate the entire housing program makes clear that it agreed t0 annex the [property] as a necessary step in [project] development.” (Id. at 686.) T0 enforce the writ, the court ordered the city t0 complete the annexation even though the issue 0f annexation was not “specifically presented” in the original proceeding. (Id. at 688; see also Cal. Trout, Inc. v. Sup. Ct. (1990) 218 Cal.App.3d 187, 204 [“That petitioners originally prayed for a different remedy” did “not preclude the court from granting [another] appropriate remedy.”]; Summit Media, supra, 240 Cal.App.4th at 182 [“[I]f enforcement 0f the writ requires, for its effectuation, the demolition 0f real parties in interest’s signs, then the signs must be demolished, and whether 0r not plaintiff sought that relief in the first instance is 0f n0 consequence.”].) Here, the City’s consistent course 0f conduct before this Court issued the Writ was t0 process fuel cell installations without a use permit 0r CEQA review. Additionally, the City 2 The City’s authority is distinguishable. (Opp., pp. 10:27-1 1 :2.) In Carroll v. Civil Serv. Com. (1 970) 11 Cal.App.3d 727, the court reversed an enforcement order partly because it punished the taxpayer, not the agency. In Cal. Teachers Assn. v. Governing Bd. (1984) 161 Cal.App.3d 393, the court merely held that mandate is not an appropriate remedy t0 compel arbitration. CASE NO. 19CV348838 REPLY IN SUPPORT OF MOTION FOR AN ORDER ENFORCING COMPLIANCE WITH WRIT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LATHAM&WATK| NSLLP ATTORNEYS AT LAW Los ANGELES specifically grandfathered the Intel installation under the pre-Fuel Cell Ban requirements. Like Los Angeles in HousingAuthorily, the City here has attempted t0 circumvent the Writ, so this Court has broad authority t0 stop that circumvention. Unlike Housing Authority, where the court ordered that city t0 annex certain real property, here Bloom seeks the more modest relief 0f simply stopping the City’s defacto enforcement 0f the Fuel Cell Ban by ordering the City t0 process ministerial fuel cell applications like it has always done. B. The City Continues De Facto Enforcement 0f the Fuel Cell Ban T0 circumvent the Writ, the City has concocted a new interpretation 0f its Municipal Code t0 delay and prevent the installation 0f fuel cells. The City’s sudden change in its long- standing interpretation is not entitled t0 deference and does not pass muster. 1. The City’s New Interpretation Is Not Entitled t0 Deference The City’s newly invented interpretation 0f Section 18.60.050 t0 enforce the Fuel Cell Ban warrants n0 deference. In Motor Vehicles Manufacturers Association v. State Farm Mutual Auto Insurance Company, an agency’s decision t0 “revers[e] [its] former Views” regarding passive restraint requirements in new vehicles was arbitrary and capricious because the agency failed “t0 supply a reasoned analysis for the change.” ((1986) 463 U.S. 29, 41-42.) Here, the City did not provide a reasoned analysis for its sudden and suspicious change in interpretation. In Tower Lane Properties v. Cizfy 0fL.A., the court held that an “undisclosed unilateral interpretation is not entitled t0 deference.” ((2014) 224 Cal.App.4th 262, 278 [holding that a city improperly required compliance with its interpretation 0f city code provisions when the city could not show a “long-standing interpretation” consistent with its current interpretation].) Under Tower Lane, the City’s recent shift in interpretation is not entitled t0 deference. The City asserts that it “never adopted a formal (0r even an informal) rule or interpretation exempting fuel cells projects from the City’s definition an electric power plant” (Opp., p. 18:23-24) but evidence in the record shows otherwise. At the Fuel Cell Ban hearing, the City’s Chief Utility Electric Officer reiterated the City’s consistent course 0f conduct 0f not requiring additional approvals beyond a ministerial interconnection agreement. (AR159-160 [“If you want t0 come into the city and not connect 0r interconnect into our system, then we really CASE NO. 19CV348838 REPLY IN SUPPORT OF MOTION FOR AN ORDER ENFORCING COMPLIANCE WITH WRIT LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES don’t have a say 0n what you’re doing. . .”].) The City did not change this consistent course 0f conduct until after the Writ compelled it t0 stop enforcing the Fuel Cell Ban. (See Declaration 0f Edwin Pho (“Pho Decl.”)w 6, 19 [declarant processed fuel cell installations with the City for many years before the Writ and the City never required a use permit and CEQA review].) The City’s argument that its “prior failure t0 require a use permit for fuel cell projects” does not preclude it from enforcing the Municipal Code now misses the mark. (Opp., pp. 18:6- 19:10) It is the City’s Violation 0f the Writ through a new, arbitrary interpretation 0f its Municipal Code that Bloom seeks t0 stop, not the City’s exercise 0f any lawful application 0f its land use authority. (See Tower Lane, supra, 224 Cal.App.4th at 278; see also Slocum v. State Bd. oquualization (2005) 134 Cal.App.4th 969, 975-976 [n0 deference owed where agency’s new “interpretation was not contemporaneous with the [provision’s] enactment” and the agency “ha[d] not historically and consistently maintained the interpretation” now advanced].) 2. Bloom’s Fuel Cells Are Not “Electric Power Plants” The City mischaracterizes Section 18.06.010 t0 deprive it 0f its ordinary meaning. (See Harbor Fumigation, Inc. v. Cly. ofSan Diego Air Pollution Control Dist. (1996) 43 Cal.App.4th 854, 860.) The City’s mischaracterization helps the City argue that any use 0f steam 0r heat in the fuel cell process meets the definition. Specifically, the City says the definition covers: (1) A11 equipment, fixtures, and personal property operated 0r maintained in connection with production 0f electricity; (2) that uses any source 0f thermal, steam, wind, 0r solar energy. . .. (Opp., p. 14:5-7 [emphasis added]; id., pp. 14-16.) T0 the contrary, Section 18.06.010 plainly limits the definition 0f “electric power plant” by the energy source being used t0 produce electricity. That definition limits its scope t0: [A]11 equipment, fixtures, and personal property operated 0r maintained in connection with the production ofelectricity using any source 0fthermal, steam, wind, 0r solar energy. . .. (Muni. Code, § 18.06.010(e)(1) [emphasis added].) Thus, the qualifying clause “in connection with the production 0f electricity using any source 0f” restricts the definition t0 facilities that produce electricity using “thermal, steam, wind, 0r solar energy.” “Using” is ordinarily defined CASE NO. 19CV348838 REPLY IN SUPPORT OF MOTION FOR AN ORDER ENFORCING COMPLIANCE WITH WRIT LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES as “t0 put into action 0r service; avail oneself 0f; employ.“ Thus, thermal 0r steam energy must be “put into action” t0 produce electricity t0 fit the definition 0f “electric power plant.” Fuel cells d0 not use steam 0r thermal energy t0 produce electricity. (See Motion, pp. 12:20-23, 14: 1 3-17). Instead, “fuel cells produce electricity using hydrogen through a chemical reaction.” (Supplemental Declaration 0f Joseph Hower (“Supp Hower Decl.”) 1] 7.) “The heat and steam are therefore not used t0 generate electricity.” (Id. 1] 8.) Professor Bowen confirms that “[e]lectricity is produced by the separate solid oxide electrochemical fuel cell that does not use thermal, steam, wind, 0r solar energy as a source 0f the electricity.” (Declaration 0f Professor Kit Bowen (“Bowen Decl.”) 1] 5.) Despite this, the City asserts that using byproduct steam 0r heat t0 reformulate methane into hydrogen brings fuel cells under the definition 0f Section 18.06.010. (Opp., pp. 14:27-15:8.) Relying on a 2019 California Electric Code definition 0f “fuel cell system,” the City argues that the relevant inquiry is whether the “complete aggregate 0f equipment” involves steam 0r heat if the reforming process is connected t0 the electricity generation process. (Id. at 15:9-24.) The City asserts “the Intel Proj ect is similar t0 a traditional power plant, as it proposes t0 use thermal 0r steam energy as a step (hydrogen reformation) in the process required by the Intel Proj ect t0 generate electricity from the fuel cell.” (Id. at 16: 12-14.)4 The City is wrong. As Professor Bowen explains, a fuel cell “is comprised 0f two distinct functionalities. One makes hydrogen by reforming methane. The other uses the resulting hydrogen as feedstock for generating electricity.” (Bowen Decl. 1] 4.) A Bloom fuel cell efficiently includes both processes “into a single box, but the process 0f reformation and power generation are still separate and distinct processes.” (Supp. Hower Decl. 1] 8.) The processes are so independent that hydrogen could be “supplied directly from external sources (i.e., pipeline 0r truck).” (Ibid.) Thus, heat and steam are not used t0 generate electricity. (Ibid.; see Bowen Decl. 1] 5.) 3 Use, Merriam-Webster Dictionary, available at https://www.merriam- webster.com/dictionary/use (accessed Apr. 4, 2020); see also Use, Black’s Law Dictionary (1 1th ed. 2019) (“T0 employ for the accomplishment 0f a purpose; t0 avail oneself 0f”). 4 The City incorrectly compares a fuel cell t0 a steam power plant because a power plant “turbine is actually generating power using steam 0r thermal energy, which the generator converts t0 electricity. The fuel cell itself generates power directly from the hydrogen fed into it.” (Supp. Hower Decl. 1] 8.) CASE NO. 19CV348838 REPLY IN SUPPORT OF MOTION FOR AN ORDER ENFORCING COMPLIANCE WITH WRIT LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES The City’s error in conflating these two independent processes is highlighted by its mischaracterization 0f Section 18.06.010. Even after pages 0f explanation and relying 0n three different declarations, the City can only stretch t0 the weak conclusion that a fuel cell “uses steam and thermal energy in theprocess 0fpr0ducing electricity.” (Opp., p. 16: 14-16 [emphasis added].) The City never even claims that fuel cells produce “electricity using . . . thermal, steam . . . energy” as required by Section 18.06.010 (emphasis added). C. The City’s New Interpretation Does Not Undo Its Prior Grandfathering Even if the City were free t0 reverse its long-standing interpretation and practice 0f only issuing ministerial permits for fuel cell installations, the City’s reversal cannot apply t0 the Intel installation because the City grandfathered that fuel cell installation. Grandfathering means the City exempted Intel from rule changes and changes in the City’s interpretation 0f its rules after May 21, 2019. (See Motion, p. 18.) Although Section 18.60.050 existed in its current form before May 21, 2019, the City had never previously interpreted the section as requiring a use permit 0r CEQA review for fuel cells. (Pho Decl. W 6, 19.) Bloom had n0 reason t0 suspect that the City would Violate its grandfathering commitment and defacto enforce the Fuel Cell Ban 0n the Intel installation. (Id. 1] 16.) Even assuming the City’s reversal were allowable, the City cannot undo its prior grandfathering commitment by imposing new requirements never imposed before May 21, 2019. (Motion, p. 18.) The City’s Opposition incorrectly asserts that “Bloom argues that the Intel Service Agreement ‘grandfathers’ the Intel Project and exempts the proj ect from the City’s use permit requirement.” (Opp., p. 19: 17-18.)5 That mischaracterization is simply wrong. The City’s grandfathering promise was confirmed by the City’s public statements during the May 7 and May 21 hearings, along with other evidence in the record. (See Motion, pp. 18-19.) The City asserts that the Intel installation “is an entirely different administrative act unrelated t0 the writ proceedings and involving wholly different legal considerations.” (Opp., p. 6:8-9.) The City also raises extraneous arguments about the terms 0f Intel’s fuel cell agreement 5 The City does not even address 0r attempt t0 distinguish Bloom’s cited authority 0r claims 0f harm. (See Motion, p. 19 [citing Bauer v. City ofSan Diego (1999) 75 Cal.App.4th 1281; Golden Gate Scenic S.S. Lines, Inc. v. Pub. Util. Com. (1962) 57 Cal.2d 373].) CASE NO. 19CV348838 REPLY IN SUPPORT OF MOTION FOR AN ORDER ENFORCING COMPLIANCE WITH WRIT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LATHAM&WATK| NSLLP ATTORNEYS AT LAW LOS ANGELES (id., pp. 19-20) and incorrectly asserts that Bloom “asks this court t0 intervene in the City’s process 0f the pending Intel Proj ect application . . . [which] has absolutely n0 relation t0 the City’s compliance with CEQA in approving the Resolution.” (Id., p. 11:3-5.) Bloom only seeks t0 enforce the Writ by stopping the City’s defacto enforcement 0f the Ban through the imposition 0f new, post-Ban requirements 0n the Intel installation. The City also ignores that it considered whether t0 grandfather the Intel installation concurrently with the Fuel Cell Ban. Both the Intel installation and the Fuel Cell Ban were scheduled for the same public hearing 0n May 7, 2019. (AR88.) The publicly disclosed materials for Fuel Cell Ban hearing included Intel’s existing fuel cell agreement. (AR123-136.) Before the Ban was approved, Intel raised concerns about the Ban being a “crucial” issue and “a big deal t0 us” because 0f its existing contract and future plans. (AR9582.) Bloom asked the City t0 clarify whether the Ban would apply t0 pending projects. (AR143.) The City scheduled a call with Intel “t0 discuss Fuel Cell Resolution.” (AR9552, 9554.) This grandfathering issue for pending projects was the only topic the City Council actively debated. (AR244-249.) At the hearing, the City confirmed its grandfathering commitment. (AR86, AR160.) Bloom reasonably relied 0n the City’s public commitment that it would not enforce the Fuel Cell Ban on Intel’s installation by investing over $2 million in time and resources (with the total installation valued over $80 million). (Pho Decl. W 16-17.) Thus, by Violating the Writ and enforcing the Fuel Cell Ban, the City is causing Bloom direct harm. Bloom does not seek redress for harm caused t0 Intel. Bloom asks this Court t0 address Bloom’s harm by ordering the City t0 stop enforcing the Fuel Cell Ban-that is, not t0 apply its newly created interpretation 0f its long- standing Municipal Code definition t0 the Intel installation that it promised t0 grandfather. D. The City’s Procedural Arguments Fail 1. Bloom’s Motion Is Not Premature The City argues that Bloom’s motion is premature because the City has not taken any action t0 prevent the installation 0fnew natural gas fuel cells. (Opp., p. 12: 14-16.) But the City has already stated that it has stopped processing any building permit applications for fuel cell installations, severely harming Bloom as a result. (Coral C0nstr., Inc. v. City & County ofScm CASE NO. 19CV348838 REPLY IN SUPPORT OF MOTION FOR AN ORDER ENFORCING COMPLIANCE WITH WRIT LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES Francisco (2004) 116 Cal.App.4th 6, 26 [challenge t0 ordinance ripe where it was “not merely [] general [0r] abstract” but rather alleged a “definite and concrete” injury]; see Supplemental Declaration 0f Marc Campopiano (“Supp Campopiano Decl.”), EX. A, p. 5 [City Plan Review Manager email stating “DO NOT issue the Building Permit” for multiple “‘Fuel Cell’ projects”].) The City caused definite and concrete injury t0 Bloom by arbitrarily imposing the new use permit and CEQA requirement 0n all new fuel cell applications. (See id., EX. B, p. 7 [City Planning Manager email stating “we need t0 make sure that any fuel cell proposals file a Use Permit and conduct [CEQA]”] [emphasis added].) After Bloom filed this Motion, the City thwarted another maj 0r customer, Equinix, telling them that they, too, must now get a Use Permit and CEQA review. 2. Intel Is Not an Indispensable Party The City misses the mark by arguing that Intel is an indispensable party. (Opp., pp. 11:23- 12:2.) Bloom is not enforcing Intel’s rights. Bloom is addressing its own immediate and direct harm from the City’s Violation 0f the Writ. The City is applying the Fuel Cell Ban t0 all fuel cell proposals, not just Intel’s proposed installation. (See Supp. Campopiano Decl., EX. A, p. 5.) Even if Intel were a necessary party, the Court has discretion t0 determine that Intel is not “indispensable” and t0 carry 0n without it. (See Code CiV. Proc., § 389 [factors t0 consider]; Quantification Settlement Agreement Cases (201 1) 201 Cal.App.4th 758, 848 [“[A] recipient 0f an approval, while a necessary party, is not necessarily an indispensable party”].) Given the limited scope 0f relief sought and the lack 0f prejudice t0 Intel, the Court should order the City t0 comply with the Writ in Intel’s absence. (Code CiV. Proc., § 389(b).) Depriving Bloom 0f its right t0 enforce the Writ would not be “in equity [0r] in good conscience.” (Ibid.) 3. Bloom Was Not Required t0 Exhaust Administrative Remedies The City incorrectly asserts that Bloom cannot enforce this Court’s Writ without pursuing an administrative appeal 0f the City’s new Municipal Code interpretation as t0 the Intel installation. (Opp., p. 12: 14-23.) As explained, Bloom seeks solely t0 enforce the Writ, and there is n0 obligation t0 take any administrative steps before enforcing a court order. Further, the City’s assertion would delay enforcement 0f the Writ until the City’s slow land use process is completed. Letting the City get away with that would be the same as allowing the CASE NO. 19CV348838 REPLY IN SUPPORT OF MOTION FOR AN ORDER ENFORCING COMPLIANCE WITH WRIT LATHAM&WATK| NSLLP 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ATTORNEYS AT LAW LOS ANGELES City t0 give itself a stay 0f the Writ, which the City requested and this Court refused.6 Even if the exhaustion doctrine could apply, two exceptions make it inapplicable here. M, where the public agency does not have exclusive jurisdiction over the subject matter 0f the dispute, the exhaustion doctrine does not apply. (Cty. ofAlpine v. Cly. ofTuolumne (1958) 49 Cal.2d 787, 798 [exhaustion “inapplicable where, as here, the agency is given n0 jurisdiction t0 make a judicial determination 0f the type involved.”]; 0. W.L. Found. v. City 0f Rohnert Park (2008) 168 Cal.App.4th 568, 584 [“failure t0 exhaust administrative remedies does not deprive a court 0f fundamental jurisdiction t0 act.”].) As provided in the Writ, this Court retains jurisdiction over the City’s efforts t0 enforce the Fuel Cell Ban until the Court has determined that the City has complied with the Writ. (Writ, p. 2: 16-18.) Because the City n0 longer has exclusive jurisdiction over the Fuel Cell Ban, the exhaustion doctrine does not apply. m, the exhaustion doctrine does not apply when the plaintiffwould suffer irreparable injury ifjudicial review were delayed 0r denied. (Am. Indian Model Schools v. Oakland Unified School Dist. (2014) 227 Cal.App.4th 258, 292; Dept. ofPersonnel Admin. v. Sup.Ct. (1992) 5 Cal.App.4th 155, 170-171 [superseded by statute 0n other grounds].) Here, the City’s refusal t0 comply with the Writ creates an “immediate risk” that the Intel installation would be canceled t0 Bloom’s substantial harm. (Pho Decl. w 17-18.) This potential for irreparable injury t0 Bloom excuses Bloom from pursuing the City’s administrative process. III. CONCLUSION Bloom respectfully requests that this Court issue an order compelling the City t0 comply with the Writ immediately and stop any attempts t0 enforce the Fuel Cell Ban. Dated: May 12, 2020 Respectfully submitted, LATHAM & WATKINS LLP By: /s/ James L. Amone James L. Amone Attorneys for Petitioner and Plaintiff Bloom Energy Corporation 6 Before the Court issued the Writ, the City requested that the Fuel Cell Ban remain in effect while the City complies with the Writ. (City Objections t0 Bloom’s Proposed Writ, p. 2:4-15.) The Court declined the City’s request, and instead prohibited the City from enforcing the Ban unless and until the City reapproved the Ban in compliance with the Writ. (Writ, p. 2.) CASE NO. 19CV348838 REPLY IN SUPPORT OF MOTION FOR AN ORDER ENFORCING COMPLIANCE WITH WRIT Exhibit 5 KOOONONUILUJNH NNNNNNNNNHh-‘h-‘t-‘b-‘b-‘b-‘b-tu-Ab-t OONONUI-PUJNHOKOOONONUILWNHO SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA BLOOM ENERGY CORPORATION, a Case No. 19CV348838 Delaware corporation, ORDER RE PETITIONER’S Petitioner and Plaintiff, MOTION T0 ENFORCE WRIT V. CITY OF SANTA CLARA, a municipal corporation; SILICON VALLEY POWER, a not-for-profit municipal electric utility; and DOES 1 through 10, inclusive, Respondents and Defendants. PROCEDURAL CONTEXT OF THIS MOTION On January 9, 2020, the Court filed an Order Re: Petition for Writ 0fMandate and Complaint for Declaratory Relief (“Order”). Pursuant thereto, 0n February 10, 2020, a Judgment Granting Petitioner’s Petition for Writ 0f Mandate (“Judgment”) and a Peremptory Writ 0f Mandate (“Writ”) were filed. The Writ orders Respondents t0: “1. Void approval 0f the May 7, 201 9 Resolution N0. 19-8701 (the ‘Resolution’) revising Silicon Valley Power’s Rules and Regulations; and 2. Stop enforcing the Resolution unless and until the City 0f Santa Clara reapproves the Resolution in compliance with this Writ and the California Environmental Quality Act.“ (Writ, at 2:8-12.) Electronically Filed by Superior Court of CA, County of Santa Clara, on 6/15/2020 12:46 PM Reviewed By: R. Walker Case #19CV348838 Envelope: 4455541 KOOONONUILUJNH NNNNNNNNNHh-‘h-‘t-‘b-‘b-‘b-‘b-tu-Ab-t OONONUI-PUJNHOKOOONONUILWNHO On March 4, 2020, Respondents City 0f Santa Clara and Silicon Valley Power (“Respondents”) filed an Initial Return on the Writ (“Return”), explaining the manner in which Respondents have complied with the Writ: specifically, by halting enforcement 0f the Resolution; by adopting Resolution N0. 20- 8812, which removed all requirements implemented by the Resolution; and (3) by commencing further environmental review 0f the policies implemented by the Resolution. Petitioner and Plaintiff Bloom Energy Corporation (“Petitioner”) has not challenged the Return. On March 16, 2020, Petitioner filed a Motion for Order Enforcing Compliance with Writ 0f Mandate (“Motion”). On March 30, 2020, Respondents filed Opposition t0 Motion for Order Enforcing Compliance with Writ 0f Mandate (“Opposition”). The hearing on the motion, originally set for April 10, 2020, was continued t0 May 22, 2020. On April 10, 2020, Petitioner filed in the Sixth District Court oprpeal a Notice oprpeal from the Judgment (No H048 1 090). On May 5, 2020, the Court filed an Order re Petitioner’s Notice oprpeal, granting an opportunity for the parties t0 brief the issue 0f the effect 0f the Notice oprpeal 0n trial court proceedings. On May 12, 2020, Petitioner filed a Reply in Support of Motion for Order Enforcing Compliance with Writ 0f Mandate (“Reply”). On May 18, 2020, both sides filed briefs concerning Petitioner’s Notice 0f Appeal. At the May 22, 2020 hearing, Petitioner’s counsel represented that Petitioner would voluntarily dismiss the appeal that day. Based 0n that representation, the Court allowed argument 0n the Motion, and the matter was submitted. Later that day, Petitioner filed an Abandonment oprpeal. CONTENTIONS AND ANALYSIS Petitioner’s Motion contends that the administrative action by Respondents’ building division t0 impose certain requirements in connection with one particular application by non-party Intel Corporation for a fuel cell interconnection agreement, constitutes “defacto enforcement” 0f the Resolution. (Motion, KOOONONUILUJNH NNNNNNNNNHh-‘h-‘t-‘b-‘b-‘b-‘b-tu-Ab-t OONONUI-PUJNHOKOOONONUILWNHO at 6: 12-13.)1 Indeed, the order that Petitioner seeks is specifically one compelling Respondents t0 approve Intel’s application. (Id., at 6:26.) Petitioner argues that it is suffering “irreparable harm” because 0f the “defacto enforcement” (Motion, at 10:26-27) and provides evidence that it may lose money as a result. (Id., at 11:1-4; Declaration 0f Edwin Pho (“Pho Declaration”), at paragraph 17.) Respondents argue that the building division’s administrative decision concerning the Intel application is an entirely different act than the passing 0f the Resolution which was the subject 0f the proceedings giving rise t0 the Writ, and that therefore the relief Petitioner seeks exceeds the scope 0f the Writ. The two causes 0f action in Petitioner’s pleading both allege that Respondents violated CEQA in passing the Resolution. The Court’s order 0n the Petition specifically equates the Resolution with “the activity in question.” (Order, at 18:1.) Despite this language in the Order confining its scope, and that 0f the Writ, t0 the Resolution, Petitioner argues that any action 0f the building division 0n a fuel cell application comes within the scope 0f the Writ because the Resolution was a “Fuel Cell Ban” (Motion, at 6:4) and that the Court determined that the “Fuel Cell Ban is illegal.” (Id., at 6:8.) Respondents correctly point out that Petitioner provides n0 cite t0 the Order 0r the Writ in characterizing the Resolution as an “illegal Fuel Cell Ban.” (Opposition, at 10:7-12.) In fact, the actual language 0f the Writ prohibits enforcement 0f the Resolution only unless and until Respondents comply with CEQA and reapprove the Resolution. As Respondents point out in the Opposition, Petitioner’s expansive rewriting 0f the Writ is at odds with the statutory scheme under which Petitioner sought relief. Petitioner chose in Reply t0 avoid this threshold issue entirely. Public Resources Code section 21168.9, discussed by Respondents in the 1 In Reply, Petitioner attempts t0 expand this argument, stating that Respondents are “stopping all new fuel cell applications” (Reply, at 5:8), and mentioning in this regard one other non-party. (Id., at 6:6.) “Obvious considerations 0f fairness” preclude consideration 0fnew points raised for the first time in reply. (E.g., [one Valley Land, Air, & Water Defense Alliance, LLC v. County ofAmador (2019) 33 Ca1.App.5th 165, 172-73.) In any event, there is n0 cite t0 evidence for this reference, and it does not appear that any evidence has been provided. 3 KOOONONUILUJNH NNNNNNNNNHh-‘h-‘t-‘b-‘b-‘b-‘b-tu-Ab-t OONONUI-PUJNHOKOOONONUILWNHO Opposition, provides that when a court finds that a public agency decision has been made without CEQA compliance, the court’s order “shall include only those mandates which are necessary t0 achieve compliance with this division and only those specific projects activities in noncompliance with this division.” Petitioner does not address this statute at all in its Reply. Respondent in the Opposition cite four cases discussing specifically the scope 0f writ enforcement under CEQA (Opposition, at 10: 1 7-25): Centerfor Biological Diversity v. Department ofFiSh & Wildlife (2016) 1 Cal.App.5th 452, 459 (CEQA “limits the authority 0f a court t0 ‘include only those mandates which are necessary’ t0 achieve compliance With [CEQA].”); Ballona Wetlands Land Trust v. City ofLOS Angeles (201 1) 201 Cal .App.4th 455, 480 (holding that petitioner’s new challenges were beyond scope 0f writ).; Ione Valley Land, Ail: & Water DefenseAlliance, LLC v. County OfAmador (2019) 33 Cal.App.5th 165, 173 (writ requiring agency to bring a decision into compliance with CEQA did not require the agency t0 address issues not addressed in litigation); San Franciscansfor Reasonable Growth v. City and County ofSan Francisco (1989) 209 Cal.App.3d 1502, 15 17-18 (same: “We think appellants misinterpret the scope 0f the writ”). A11 these controlling authorities instruct that, 0n the facts 0f this motion, the requested relief is beyond the scope 0f what CEQA allows. Petitioner addresses none 0f these cases in Reply. Petitioner’s own description 0fthe relief it seeks makes it clear that it is unrelated t0 the Resolution 0r t0 CEQA: “t0 make the City handle fuel cell applications like it did before the Writ was issued.” (Reply, at 5:11-12.) Instead 0f addressing the language 0f CEQA itself and the specifically pertinent authority under CEQA, Petitioner in Reply argues only inapplicable non-CEQA authorities. (Reply, at 7:1-8:6.) Notably, even that authority does not support Petitioner’s position. Petitioner cites Summit Media, LLC v. City ofLos Angeles (2015) 240 Cal.App.4th 171, for the quote that appears at 182: [“[I]f enforcement 0f the writ requires, for its effectuation, the demolition 0f real parties in interest’s signs, then the signs must be demolished, and whether 0r not plaintiff sought that relief in the first instance is of no KOOONONUILUJNH NNNNNNNNNHh-‘h-‘t-‘b-‘b-‘b-‘b-tu-Ab-t OONONUI-PUJNHOKOOONONUILWNHO consequence.”].) (Reply, at 7:21-23.) However, the next sentence in that opinion specifically rejects the quoted premise: “But that is not the case.” Indeed, the holding in Summit Media is adverse t0 Petitioner’s position here: the party in that case advocating that the trial court had broad authority t0 enforce a writ lost the appeal, as the Court 0f Appeal affirmed the trial court’s order rej ecting a request for relief not necessary t0 effectuate enforcement 0f the writ. Intel’s pending application has n0 relation t0 whether Respondents complied with CEQA in approving the Resolution. The order Petitioner seeks compelling Respondents t0 approve Intel’s application is clearly not “necessary” t0 achieve CEQA compliance in connection with the Resolution. Moreover, the requested order seeks t0 compel Respondents t0 exercise discretion in a certain way- contrary t0 the explicit terms 0fCEQA. (Pubic Resources Code section 21 168.9(0).) Accordingly, the order requested exceeds the jurisdiction retained by the Court t0 accomplish enforcement 0f the Writ. The motion is denied. Dated: June 15, 2020 Honorable Patricia M. Lucas Judge of the Superior Court Exhibit 6 m m7 r ' gr. LC: *0 F51 3:53 CLAIM AGAINST THE CITY OF SANTA CLARA (For Damages to Persons or Personal Property) Citv Clerk’s Office Date Stamp Received By: ' Via: U.S. Intero Ice Mail Over the Counter Other6©mbL (Please do not write above this line - for City use only) A claim must be filed with the City Clerk of the City of Santa Clara within six months* after which the incident or event occurred. Be sure your claim is against the City of Santa Clara not some other public entity. Where space is insufficient, please use additional paper and identify the information by paragraph number. Your completed claim (original) must be mailed or delivered to: City Clerk, City of Santa Clara, 1500 Warburton Avenue, Santa Clara, California 95050. TO THE HONORABLE MAYOR AND CITY COUNCIL OF THE CITY OF SANTA CLARA: The undersigned respectfully submits the following claim and information relative to damage to persons and/or personal property: NAME OF DATE OF CLAIMANTBloom Energy Corporation BIRTH ADDRESS OF ZIP 1 CLA|MANT 4354 North First Street CITYsan Jose STATE CA CODE 951 34 HOME WORK DRIVER'S LICENSE PHONE PHONE (408) 543-1 500 STATE AND NUMBER SEND NOTICES REGARDING THIS CLAIM TO: (List name, mailing address and telephone number if not same as name and address listed above.) Meyers Nave/Attention: Amrit S. Kulkarni 2 1999 Harrison Street, 9th Floor, Oakland, CA 94612 DATE AND TlMESee Exhibit A. SPECIFIC ADDRESS See Exhibit A_ 3 OF INCIDENT OF INCIDENT (Address) BASIS OF CLAIM (Specify the occurrence, event, act, or omission which you claim caused the injury or damage for which you are submitting this claim.) 4 See Exhibit attached hereto: Petition For Writ of Mandate and Complaint for Declaratory and Iniunctive Relief. CITY’S ACTION (Specify action by City or its employees which caused alleged damage or injury.) 5 See Exhibit A. *“One year for a claim relating to any cause of action for other than death, injury to person or to personal property, or growing crops.” Government Code §91 1 .2 l:\CLA|MS\Claim Form July 2020 EDITS WITH CAO APPROVAL ONLY.doc 6 NAME OF CITY EMPLOYEE WHO S E h.b.t AALLEGEDLY CAUSED INJURY 0R Loss ee X ' ' - DESCRIPTION OF CLAIMANT’S INJURY, PROPERTY DAMAGE, OR LOSS (Ifthere were no injuries, state “NO |NJURIES”.) 7 u n See Exhlblt A. OTHER INJURED PERSONS (List names and addresses.) 8 . . See Exhlblt A. DAMAGES CLAIMED: Amount of Claimant’s damage or loss and method of computation. Include copies of bills, invoices, estimates, etc. Note: If your claim is for more than $10,000, you need not fill in an amount but you must state whetherjurisdiction for the claim would be in the Limited jurisdiction (up to $25,000) or Unlimited jurisdiction ofthe Superior Court. ITEMS Intentional interference with prospective economic advantage. $ $ 9 $ TOTAL AMOUNT: $ Court Jurisdiction: (Check one) Limited Civil: D Unlimited Civil: D WITNESSES, HOSPITALS, DOCTORS, ETC. (List names and addresses.) 1O . .See Exhibit A. WARNING! IT IS A CRIMINAL OFFENSE TO FILE A FALSE CLAIM (Penal Code §72). I have read the matters and statements made in the above claim and I know the same to be true of my own knowledge, except as to those matters stated upon information or belief and as to such matters l believe the same to be true. | certify under penalty of perjury that the foregoing is TRUE and CORRECT. Signed this 5th day of October , 20 21 at San Jose. California 5WSaMW Claimant’s Signature U EXHIBIT A [Q KDOONGUl-bw 21CV383800 Santa Clara - Civil Amrit S. Kulkami (SBN: 202786) akulkami@meyersnave.com Shiraz D. Tangri (SBN: 203037) stangri@meyersnave.com Edward Grutzmacher (SBN: 228649) egrutzmacher@meyersnave.com MEYERS NAVE 1999 Harrison Street, 9th Floor Oakland, California 94612 Telephone: (5 10) 808-2000 Facsimile: (5 1 0) 444-1 108 Attorneys for Petitioner and Plaintiff BLOOM ENERGY CORPORATION Electronically Filed by Superior Court of CA, County of Santa Clara, on 6/29/2021 3:45 PM Reviewed By: R. Walker Case #21 CV383800 Envelope: 6749757 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA BLOOM ENERGY CORPORATION, Petitioner and Plaintiff, v. CITY OF SANTA CLARA; and DOES 1-20, inclusive, Respondents and Defendants. CaseNo. 21 CV383800 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF KDOOQONUI-hUJNr-t NNNNNNNNNo-Hh-t-HHu-nt-HH WQQMhWNHOCWNQMhWNHO Petitioner and Plaintiff Bloom Energy Corporation (“Bloom”), by and through its undersigned attorneys, upon knowledge as to itself and upon information and belief as to all other matters, alleges for its petition and complaint against Respondent and Defendant the City of Santa Clara (“City”), as follows: I. SUMMARY OF THE ACTION 1. PlaintiffBloom Energy Corporation (“Bloom”) developed the Bloom Energy Server: state-of-the-art fuel cell technology that produces electric energy that is clean, always-on, efficient, cost-predictable and reliable. These environmentally-friendly fuel cells emit virtually no harmful air pollutants, require virtually no water, and are far more greenhouse gas efficient than power obtained from California’s energy grid and produce power 24/7, with the resiliency to withstand weather events and power outages. Due to their compact size, reliability, resiliency and environmental advantages, Bloom’s fuel cell technology has been implemented in Silicon Valley and across corporate America, as companies, hospitals, data centers, critical infrastructure and universities turn to alternative forms of energy to ensure they always have reliable power while at the same time, reducing their carbon footprint, conserving resources and obtaining predictable power costs. 2. There are currently five Bloom Energy Server installations in the City of Santa Clara, producing 14.9 megawatts of clean electric power. The City authorized each of these by the ministerial issuance of building permits. However, beginning in 2019, the City discovered (and documented in public statements and emails referenced later in this Complaint) that the advantages and popularity of the Bloom Energy Servers were attracting substantial new customers away from the City’s own municipal electric utility, Silicon Valley Power (“SVP”), causing SVP to lose market share and profits. Rather than attempt to fairly compete with Bloom’s products, since 2019, the City has unilaterally refused to issue ministerial permits for new Bloom Energy Servers, in direct violation of its own Zoning Code. Bloom submitted three applications in 2019 for l3 new megawatts of energy as accessory uses at two existing technology facilities in the City: Intel and Equinix. The City first attempted to block those installations by adopting a resolution with an outright ban on fuel cells. That resolution was struck down by this Court based on the City’s failure 2 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INIUNCTIVE RELIEF \DOOQQUI#UJN 10 ll 12 l3 l4 15 16 l7 18 19 20 21 22 23. 24 25 26 27 28 to comply with the California Environmental Quality Act (“CEQA”) in the action entitled Bloom Energy Corporation v. City ofSanta Clara et al., Santa Clara County Superior Court Case No. 19 CV348838 (“Bloom 1”). 3. After the resolution was stricken, the City did not comply with the Court’s writ but instead sought other ways to block the Bloom Energy Servers. The City suddenly came up with a new interpretation of its Zoning Code and classified the Bloom Energy Servers as “power plants.” As a result ofthis new classification, the City stated that it would no longer authorize the ministerial issuance ofbuilding permits, but, rather, require discretionary use permits for the servers. Moreover, as another result of this new classification, the City claimed that the servers would not be categorically exempt from CEQA, and would have to undergo full environmental review under CEQA. The City’s new classification is directly contrary to the City’s own long-standing treatment ofthe Bloom Energy Servers. The City’s new classification is also flatly inconsistent with the plain language of the City’s own Zoning Code. Bloom Energy Servers do not meet the City’s own definition of “power plants.” Rather, fuel cell‘s are unlike traditional power plants in size, scale, environmental impacts and in the technology used to produce electricity. They are by their nature accessory uses, installed to provide on-site power to existing or new facilities. Bloom Energy Servers are compact, and roughly the same relative size and shape as accessory uses such as HVAC units or secure bicycle facilities. They are also sufficiently safe, quiet, and non-emitting to be sited mere feet from occupied areas. The City’s unsupported reinterpretation of its own Zoning Code in direct response to this Court’s order striking down the City’s ban on fuel cells demonstrates that the City is still attempting to prohibit Bloom Energy Servers in the City. The City’s conduct is irrational, discriminatory, arbitrary and capricious, has no bases in the law or in fact, and has caused, and will continue to cause significant harm to Bloom. 4. The City is, in effect, banning Bloom Energy Servers from operating in the City, through an unsupported and illegal reinterpretation of its own Zoning Code. As if this conduct were not bad enough, the City is taking these actions for an illicit purpose. The City is not acting to protect its citizens or for any legitimate governmental purpose. Rather, the City is banning this technology for the sole purpose of protecting the financial interests of the City’s municipal electric 3 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND lNIUNCTIVE RELIEF \DOONO\MAUJN'-‘ NNNNNNNNNp-h-nr-v-nn-y-H-p-p- OONQUI¥WNHO©OOVQLh$WNHO utility, SVP. Rather than respond in an appropriate manner to the competition posed by the Bloom Energy Servers, the City resofied to using its land use regulatory powers to get rid of its competition. By preventing and delaying the construction of new fuel cell projects, the City is illegally forcing businesses to use SVP power t0 further its own economic interests. The City’s conduct is especially egregious because its prior effort to ban Bloom Energy Servers outright was rejected as illegal by this Court based on the City’s failure to comply with CEQA. 5. Rather than comply with this Court’s directive, the City instead decided to abuse its land use authority as an alternate method of banning Bloom Energy Sewers. The City is engaged in legal maneuvering and/or subterfuge solely to protect the economic interests of its own power company. The City has refused to process the pending applications by deeming them incomplete and demanding that Bloom instead pursue discretionary use permits as required for “power plants.” For all of the reasons set forth herein, the City’s conduct is arbitrary and capricious, has no bases in the law or in fact, and has caused, and will continue to cause significant harm to Bloom. H. PARTIES 6. Plaintiff Bloom Energy Corporation is a Delaware corporation with its principal place of business in San Jose, California. Bloom’s main manufacturing facility is in Sunnyvale, California. Bloom became a public company in July 2018. 7. Defendant City of Santa Clara is a California municipal corporation. Silicon Valley Power (“SVP”) is the trade name of the Energy Department of the City of Santa Clara, and it functions as the city’s municipal electric utility. SVP is currently managed by the Deputy City Manager for the City of Santa Clara. 8. Bloom does not know the true names or capacities ofDOES 1 through 50, inclusive, and therefore sues Respondents and Defendants by fictitious names. Bloom will amend this Petition and Complaint to set forth the true names and capacities of fictitiously named Respondents and Defendants when such information has been ascertained. Each ofthe Respondents and Defendants is the agent or employee of the City and/or the City’s municipal power company, SVP, and each /// 4 PETITION FOR WRIT 0F MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF \OOONONUI#WNt-t NNNNNNNNNHHHH-r-y-H-t- OOQONM¥UJNHO©0°Q¢U1$WNHO performed acts on which this action is based within the course and scope of such Respondents and Defendants’ agency or employment. III. JURISDICTION AND VENUE 9. This Court has jurisdiction over the City and each of the claims asserted herein and venue is proper in Santa Clara County as the County in which the City is located and as the County within which each ofthe allegations herein occurred. (Code of Civ. Proc., §§ 393, 394.) 10. This Court has jurisdiction over the matters alleged herein under Code of Civil Procedure sections 525, 526, 527,- 1060, 1085, and 1094.5, and Public Resources Code sections 21 167, 21 168, and 21 168.5. IV. FACTUAL BACKGROUND A. Bloom Develops Innovative Fuel Cell Technology 1 1. Bloom was founded by engineers working withNASA on supporting sustainable life on Mars. Working here in Silicon Valley, Bloom developed fuel cell technology that generates electricity from a chemical reaction using methane gas-but without burning the fuel as would occur in a power plant. 12. Bloom manufactures a product called a Bloom Energy Server with fuel cells that produce 200 to 300 kilowatts ofpower in a footprint roughly equivalent to that of half a standard 30- foot shipping container. This electricity is clean, always-on, efficient, cost-predictable and reliable. 13. Bloom Energy Servers are far more greenhouse gas efficient than power obtained from California’s energy grid and emit 20% fewer greenhouse gases per megawatt hour ofelectricity produced than even SVP’s most efficient natural gas power plant does. In addition, because Bloom Energy Servers are always on, they can displace more greenhouse gas emissions than renewable self-generation sources such as solar panels or wind turbines that provide only intermittent generation. Those intermittent sources require a customer to use more energy from traditional utility sources. Also, unlike the grid and intermittent renewable sources, Bloom’s Energy Servers can be configured as microgrids, capable of operating 24/7 and able to withstand weather events and grid 5 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INIUNCTIVE RELEF \DOOQQUI-pwwr-t NNNNNNNNNr-h-t-‘v-r-r-H’-p-t-n mNmM-pWNHowWQQM-FWNh-o shutdowns. Two existing installations at Intel’s property in Santa Clara are configured as microgrids. Given their availability and reliability, Bloom Energy Servers can displace the need for diesel back-up generators, providing tremendous environmental benefits over such equipment. Bloom Energy Servers also emit virtually no air pollutants such as oxides of nitrogen or sulfur dioxide, and use virtually no water, thereby reducing the strain on California’s tenuous water supply. 14. In light of their compact size and lack of harmful emissions, Bloom Energy Servers are accessory uses that are typically located immediately adjacent to buildings to which they supply power. They can be situated next to occupied areas as shown in the photograph below from a Nokia facility in the Bay Area: 15. In addition to the environmental benefits, Bloom Energy Sewers are more resilient than the grid and renewable energy sources and can continue to provide power during wildfires, earthquakes and other weather-related events that can result in interruptions in service from the traditional electrical grid. 6 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELEF \DWNQUIAUJN 10 ll 12 l3 14 15 16 l7 18 19 20 21 22 23 24 25 26 27 28 16. These advantages have made Bloom’s fuel cell technology an attractive choice in Silicon Valley and across corporate America, as companies, hospitals, and universities turn to alternative forms of energy to ensure they always have power, reduce their carbon footprint, conserve resources and achieve predictable costs. Bloom shipped its first server to Google’s headquarters in 2008 and now has deployed a total of 500 megawatts ofpower generation to more than 100 customers around the world, including 22 Fortune 100 companies. 17. Bloom’s customers include Intel, IBM, Oracle, Ikea, The Home Depot, FedEx, Staples, Costco, Target, Safeway, AT&T, Verizon, Disney, Comcast, J.P. Morgan, Morgan Stanley, Credit Suisse, Bank ofAmerica, Kaiser Permanente, Sutter Health, Genentech and Medtronic. More than 50 Walmart stores in California use Bloom’s fuel cell technology. Bloom Energy Sewers also provide power to the SAP Center at San Jose, known as the “Shark Tank.” B. The City Issues Ministerial Building Permits For Four Bloom Energy Server Installations. 18. There are currently five Bloom Energy Server installations in the City, producing 14.9 megawatts of clean electric power. The City authorized each of these by the ministerial issuance of building permits. 19. A ministerial decision is one “involving little or no personal judgment by the public official as to the wisdom or manner of carrying out the project. The public official merely applies the law to the facts as presented but uses no special discretion orjudgment in reaching a decision.” See 14 Cal. Code Regs. (“CEQA Guidelines”), § 15369. 20. Ministerial decisions are exempt from review under CEQA. See Pub. Resources Code, § 21080(b)(1). 21. Under CEQA, building permits are presumed to be ministerial in the absence of any discretionary provision in the local ordinance or other law establishing requirements for the permit. See CEQA Guidelines, § 15268(b)(1). 22. By contrast, CEQA review is required for discretionary projects that fire proposed to be carried out or approved by public agencies. See Pub. Resources Code, § 21080(a). /// 7 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF \OOONONUIAUJNu-d NNNNNNNNNWHHHF-H-t-p- OOVONUI-PWNi-O\DOOQO\UI#UJN¥-O 23. A discretionary project is one that “requires the exercise ofjudgment or deliberation when the public agency or body decides to approve or disapprove a particular activity, as distinguished from situations where the public agency or body merely has to determine whether there has been conformity with applicable statutes, ordinances, or regulations.” See CEQA Guidelines, § 15357. 24. In 201 5, Intel installed the first Bloom Energy Servers in Santa Clara - a 1 megawatt installation at 2191 Laurelwood Road, pursuant to Permit # BLD2014-34998. 25. On April 28, 2017 Bloom applied to the City for building permits for the installation ofBloom Energy Servers as accessory uses at Intel’s facility at 2200 Mission College Boulevard in the City. By May 23, 2017, the City had deemed the application complete. 26. On August 1, 2017, the City issued Permit # BLD2017-46893 for installation of Bloom Energy Servers at Intel’s facility. BLD2017-46893 allowed for the installation of 5 megawatts (“MW”) of exterior fuel cells and pad, 3 electrical vaults, trenching for water electrical and gas lines, electrical feeders to switchboard, water connection to potable water, natural gas connection with meter and regulator storm drains, sewer cleanouts, and an electrical transformer. The City issued this building permit ministerially, and did not require a use permit or CEQA review for this project. PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF ©06QONU‘I-hUJNH NNNNNNNNNu-r-r-n-t-‘h-h-n-H- WQQM-pwwh‘owooNONUl-RWNF-O 27. The existing Bloom Energy Sewers at the Intel facility are shown in the photographs below, as the small dark-colored boxes adjacent to the bases ofthe buildings: 28. On August 2, 201 7, Bloom applied to the City for building permits for the installation ofBloom Energy Servers as accessory uses at Equinix’s facility at 1350 Duane Avenue in the City. 29. On February 6, 2018, the City issued Permit # BLD20l7-47682 for installation of the Bloom Energy Severs at Equinix’s facility. BLD201 7-47682 allowed for the installation of 18 Bloom Energy Servers with concrete pads, producing 5.2 MW of power. The City issued this building permit ministerially, and did not require a use permit or CEQA review for this project. 30. The existing Bloom Energy Servers at 1350 Duane Avenue are depicted below, consisting of a 2.0 MW installation on the side of the building, and a 3.2 MW installation on the back ofthe building. /// /// / / / / / / /// 9 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF RDOONONUI-PUJNt-d NNNNNNNNNt-tr-r-u-p-r-tv-‘y-nt-H OONONM¥WNHO©OOQQUIhWNHO 10 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELEF \OOONQUI-FWNp-t NNNNNNNNNHHt-t-H-H’-~- OONO\UI#UJN'-O\OOOQO\UI#UJN>-O 3 1. On March 29,- 2017, Bloom applied to the City for building permits for the installation of Bloom Energy Servers as accessory uses at Agilent Technologies’ facility at 5301 Stevens Creek Boulevard in the City. On June 27, 2018, the City issued Permit # BLD2018-50250 for installation of 8 Bloom Energy Servers with concrete pads, producing 2.2 MW of power at Agilent Technologies’ facility. The City issued this building permit ministerially, and did not require a use permit or CEQA review for this project. 32. On March 26, 201 8, Bloom applied to the City for building permits for the installation ofBloom Energy Servers as accessory uses at Santa Clara University at 500 E1 Camino Real B715 in the City. On August 7, 2018, the City issued Permit # BLD2018-50199 for installation of 9 Bloom Energy Servers with concrete pads, producing 1.5 MW of power at Santa Clara University. The City issued this building permit ministerially, and did not require a use permit or CEQA review for this project. C. SVP’s Concerns With The Impact ofBloom Energy Servers on SVP’s Revenue. 33. At some point in early 20 l 9, SVP began t0 worry about the impacts ofBloom Energy Servers on SVP’s revenues. 0n February 25, 2019, SVP Assistant Director Ann Hatcher wrote SVP Chief Electric Utility Officer/Assistant City Manager Manuel Pineda and SVP Chief Operating Officer Kevin Kolnowski stating: “Am told that Bloom Fuel Cells wants to come in to talk with our Key Customer Rep/Engineers about even more potential customers of natural gas fired fuel cells in Santa Clara. This sounds like more locations beyond the 4.35MW that were part ofour answer to Finance on the reduced forecast/reduced contribution in lieu. If real, it would mean another reduction in our growth forecast for the budget that we just turned in.” 34. On February 27, 2019, Mr. Pineda responded that “Deanna [Santana, City Manager] would like to fast track regulations on future fuel cells (get something in the books now). Let’s talk tomorrow after our UUT discussion what the options are.” 35. On March 14, 2019, Electric Division Manager Yanmei Qiu queried Ms. Hatcher regarding the “RTC and draft resolution that is going to put a stop on future fuel cell penetration in Santa Clara? Bloom is taking [sic] to Digital Realty now. Can we share our plan with customers?” 36. At the March 26, 2019 City Council meeting considering SVP’s Quarterly Strategic Plan Update, Mr. Pineda testified 1 1 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF KOOOQmUl-bUJNv-d [Q N h-n t-u )--‘ ¢-- t-t ~- b-‘ H p-t b- -‘ O \O 0° fl O\ (J1 ¥ DJ N b- O Ix)[\J 24 25 26 27 28 “From a load growth perspective, SVP has been doing great for a number a years, but we do have to acknowledge that our sales did go down this year. It’s the first time in about 10 years that they did not go up from the previous year. Small percentage, but it still did go down. And there’s a number of reasons associated with that. What’s causing the impacts on the actual versus forecasted load. Fuel cell installations are a part of tha .” 37. As a result 0f this decrease in sales, the City began researching ways to prohibit Bloom Energy Servers and other fuel cells from being installed in the City. 38. On April l6, 2019 Mr. Pineda sent an email to Kathleen Hughes, Ann Hatcher, and Kevin Kolnowski asking “Can we please have a staff member research cities where fuel cells have been limited.” D. Bloom’s Pending Applications For New Energy Server Installations. 39. On April 25, 2019, Bloom submitted a building permit application (BLD2019- 545 1 9) for the installation of 10 Bloom Energy Servers as accessory uses at the Intel facility located at 2200 Mission College Boulevard (the “Intel Project”). The requested installation is located approximately 100 feet from the existing fuel cells installed at Intel’s property pursuant to Permit # BLD2017-46893. 40. As a pan of Intel’s Santa Clara campus development plan, they are building out additional data center infrastructure in response to rising enterprise needs. Intel has come to Bloom as a partner to support the growing power demands ofthis development plan. Intel has made it clear that SVP has been unable to support these power demands in a timely fashion that supports their business goals. As such, Bloom Energy is the sole viable technology with the power density and footprint required to support Intel’s power needs. The Intel Santa Clara campus is constrained on real estate and cannot deploy solar or wind to satisfy this growing demand. By blocking the permit application for the Mission College campus, the City of Santa Clara is preventing one 0f their most valued business residents from satisfying a business need within theirjurisdiction. 41. The Intel Project site has zoning designation “PD” and was previously zoned “ML”. 42. Under the Intel Project site’s zoning designation, “[i]ncidental and accessory buildings, storage buildings, outdoor storage, warehouses, exposed mechanical appurtenances, and the like, that comprise less than twenty-five percent (25%) ofthe total lot area and are shielded from public view” are pelmitted uses. See Santa Clara Mun. Code, § 18.48.030(e). l 2 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF \OOOQONUI-PUJN 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 43. The building permit application for the Intel Project confirms that the proposed Bldom Energy Server installation meets the accessory use criteria, as it would comprise far less than 25% of the total lot area and be shielded from public view. 44. The Intel Project permit application thus confirms that the Bloom Energy Server installation meets all objective criteria for ministerial issuance ofthe requested building permit. 45. After Bloom’s application, the City landed on a strategy of prohibiting all fuel cells except those that rely on California-sourced biogas, which the City knows is relatively scarce and heavily incentivized for use as a transportation fuel, making it cost-prohibitive for other uses in California. This ban was effectuated by the City’s adoption of a resolution changing SVP’s interconnection rules to prohibit interconnection of fuel cells, except those that ran on renewable energy or California-sourced biogas. 46. Bloom and others objected to the proposed resolution on numerous grounds, including that the City should have conduCted CEQA review prior to the adoption ofthe resolution. Bloom’s objections were rejected by the City. 47. The City Council adopted Resolution No. 19-8701, A Resolution Amending Silicon Valley Power’s Rules and Regulations to Require New or Modified Self-Generation Facilities to Utilize Renewable Generation and Fuel Sources, on May 7, 2019 (the “Resolution”). 48. Bloom challenged the City’s adoption of the Resolution in court on June 11, 2019, alleging that the City improperly determined that the resolution was exempt from CEQA review in Bloom I. 49. While that case was pending, Bloom submitted on October 17, 2019 a building permit application (BLD2019-56451) for the installation of 10 fuel cells as accessory uses at the Equinix facility located at 2960/2970/3000 Corvin Drive (the “Equinix Project”). 50. Equinix is a large co-location data center provider and has partnered with Bloom all throughout California and the East Coast to offset conventional grid electricity costs, thereby making these data centers more cost competitive. Equinix markets this technology to their customers as a cleaner, more reliable power source for their data center needs. Equinix has identified SVP territory as a market that benefits from Bloom’s technology for the aforementioned reasons, . l3 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF ©00NO\UI#UJI\)t-t N N N N N N N ‘ N N H H r- h- - H H r- >- b- ” \l O\ LII -B W N H o \O W N O\ LII -§ U) N )- O having deployed the largest installation in Silicon Valley (5.2MW at Duane Avenue in Santa Clara). By blocking the permit applications for the Corvin Drive facility, the City of Santa Clara is preventing one of their business residents from increasing their competition in the market. ' 5 1. The Equinix Project site is part of the Lawrence Station Area Plan (“LSAP”) area. 52. The LSAP allows for uses permitted in ML zones, including accessory uses. See Santa Clara Mun. Code, § 18.48.030(e). 53. The building permit application for the Equinix Project confirms that the proposed Bloom Energy Server installation meets the accessory use criteria, as it would comprise far less than 25% of the total lot area and be shielded from public view. 54. The Equinix Project permit application thus confirms that the Bloom Energy Server installation meets all objective criteria for ministerial issuance ofthe requested building permit. 55. On January 9, 2020, the Court in Bloom I issued an order granting Bloom’s petition to overturn the Resolution and commanding the City to comply with CEQA before re-enacting the fuel cell ban. E. City’s Unlawful Failure To’Issue Project Permits. 56. A mere two weeks after that order overturning the City’s ban on Bloom Energy Servers, on January 23, 2020, the City switched tactics. With its unlawful ban on Bloom’s technology blocked, the City decided to overturn years of its own interpretation of the City Code to attempt to subject Bloom Energy Servers to the City’s discretionary use permit process. The message was clear: in the place of the outright ban, the City would now use its discretionary land use authority to prohibit further installations ofBloom Energy Servers in the City. David Tran, the City’s Plan Review Manager, Isent an email to City staff stating “[p]er my conversation with our Planning Manager, Reena Brilliot, please DO NOT issue the Building permit for the ‘Fuel Cell’ projects (see below) prior to coordinate [sic] with Reena and SVP.” The projects Mr. Tran listed were the Intel and Equinix Projects at issue herein. 57. On Februafy 4, 2020, the City’s Planning Manager, Reena Brilliot informed Mr. Tran and the rest of the City’s Flaming Divisions that the City Attorney’s Office had reinterpreted the City’s Zoning Code such that fuel cells were now considered “electric power plants” and would 14 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND NIUNCTIVE RELIEF KOOOQONUI#UJNv-t NNNNNNNNNHH~HHHH~r-r- “NQM#WNHO\OW\IO\M#WNHO require a use permit and an initial study under CEQA. Specificaily, Ms. Brilliot stated that “We’ve received guidance from the City Attomey’s Office that Section 18.60.050 of the Zoning Code prescribes the requirement of a Use Permit for the installation of an Electric Power Plan [sic], such as fuel cells. As such, we need to make sure that any fuel cell proposals file a Use Permit and conduct environmental analysis (an initial study will be required). We learned that the City was previously issuing these as Building Permits only, without need ofa Use Permit, and this is incorrect per our Zoning Code.” 58. Despite the fact that the ministerial building permit applications for the Projects were pending before the Court order overturning the fuel cell ban, the City began to argue that the Projects were “electric power plants” as defined in Section 18.06.010(e)(-1) of the City’s Municipal Code and thus required discretionary use permits under Section 18.60.050 of the Municipal Code and were subject to CEQA review. 59. Below is photograph of SVP’s Donald von Raesfeld Power Plant, a 174MW natural gas-fired facility located in the City. 60. Section 18.06.010(e)(l) ofthe Municipal Code defines “electric power plants” as “all equipment, fixtures, and personal property operated or maintained in connection with the production of electricity using any source of thermal, steam, wind, or solar energy with a generating capacity of more than five hundred (500) kilowatts and less than fifty (50) megawatts....” Thus, to qualify as an electric power plant, the facility must produce electricity using thermal, steam, wind, or solar. l 5 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INIUNCTIVE RELIEF WWVONUIbUJNs-a NNNNNNNNNHH-r-H-h-pnn-p- 61. Bloom Eriergy Servers do not use thermal, steam, wind or solar power to produce electricity. Instead, they produce electricity using a chemical conversion process involving hydrogen and oxygen, an anode and a cathode. 62. Bloom Energy Servers are therefore not power plants as defined by the City’s Municipal Code. 63. In arguing that the Projects are “electric power plants”, the City reversed its normal process and predetermined the outcome that the Projects are not exempt from CEQA before even deeming the applications for the Project complete. 64. Bloom objected to City stast demand that both‘ a use pelmit and an Initial Study under CEQA were required for each Project. 65. On September 24, 2020, counsel for Bloom sent the City a letter detailing why the Projects were not “electric power plants” under Section 18.06.010(e)(l) ofthe City’s Code and why, even ifthey were, the Projects qualified for categorical exemptions under CEQA. 66. Even after Bloom provided the City with additional information to support the pending permit applications, the City’s Planning Manager continued to assert that the applications were incomplete and demanded further information from Bloom. 67. On March 17, 2021, the City’s Flaming Manager indicated that the Project applications would need to go through the City’s Project Clearance Committee (“PCC”) process. 68. The City never previously required the building permit applications for any of the existing Bloom Energy Servers located in Santa Clara to go through the PCC process. 69. On March 23, 2021, the City’s PCC met to review the Projects. The PCC determined that the City would require Bloom to submit still more information before the applications could be deemed complete. 70. Debby Fernandez, an Associate Planner with the City, wrote Bloom on April 1, 2021 with the results of the PCC meeting. The City’s letter for the Equinix Project asserted that the Project application was incomplete. In addition, the letter stated “[a]s the City has determined that the project is not eligible to proceed under any [CEQA] exemption, the preparation of an Initial Study in accordance with CEQA is required.” 1 6 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF \OOOVmUI-QUJNH NNNNNNNNNHi-Ht-b-h-w-t-p-t anmhwwfloomflam-RWNt-‘o 71. The City issued nearly identical letters with regard to the Intel Project, asserting that the Project applications were incomplete, and that the City had detelmined that an Initial Study was required as the Intel Project was not eligible to proceed under any CEQA exemption. 72. On April 27, 2021, Bloom submitted appeals of the April l, 2021 decisions of City staff and the PCC regarding (l) the applications for the Projects and (2) the finding that the Projects were not exempt from CEQA. Bloom’s written appeals were supported by a letter with attached exhibits demonstrating that no use permit or CEQA review was required to approve the Projects. 73. >On May 4, 202 1 , the City demanded that Bloom pay fees for $12 l ,229.90 for CEQA review and other City processing of the Intel and Equinix Project applications. 74. Bloom submitted a further letter in support of its appeals on May 24, 2021, in response to correspondence from the City regarding the Project appeals. 75. The City Council placed the appeals relating to the Projects on the agenda for its June 8, 2021 meeting. 76. Bloom appeared at the June 8, 2021 City Council meeting and provided oral testimony in support of the appeals. 77. At the direction of the City Attorney, the City Council voted to “note and file” the agenda item, without taking any action on Bloom’s appeals or scheduling them for a full hearing. Accordingly, Bloom has exhausted all available administrative remedies. V. STANDING 78. l Bloom has standing to raise the CEQA claims herein because it (1) has a public interest in the impact of the City’s decisions to abuse CEQA to require unnecessary environmental review of a ministerial and/or exempt project and (2) has a direct an beneficial interest in the City’s full and complete compliance with state laws and regulations including, without limitation, CEQA. 79. In addition, Bloom will be, and has been, directly harmed by the City’s actions alleged herein, including, but not limited to the City’s arbitrary, capricious, an wholly unsupported application of the City’s regulations to Bloom’s projects, and the deprivation of Bloom’s constitutionally protect rights to due process and equal protection. l7 ‘ PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF KOOOQONUl-bUJNu-t NNNNNNNNNu-b-t-r-t-t-H-r-t- «NQUI#UJNHO\DOONO\UI¥WNI-O VI. EXHAUSTION OF ADMINISTRATIVE REMEDIES 80. Bloom has exhausted its non-judicial remedies on all claims by submitting letters dated September 24, 2020, February l6, 2021, April 27, 2021, and May 24, 2021 stating its opposition to the City’s failure to lawfully process and issue building permits and other non- discretionary approvals in connection with the Projects. 81. Bloom further exhausted its non-judicial remedies by filing written appeals to the City Council, and appearing and testifying on June 8, 2021 , regarding the City’s failure to lawfully process and issue building permits and other non-discretionary approvals in connection with the Projects. 82. The City Council’s refusal to schedule a hearing for consideration ofBloom’s written appeals demonstrates that Bloom has no available non-judicial remedies and that pursuing any further administrative remedies with regard to the Projects would be futile. 83. All issues raised in this Petition were raised before City by Bloom, other members of the public, and/or public agencies prior to the City’s final determinations on the Projects. VII. NOTICE OF COMMENCEMENT OF CEQA PROCEEDING 84. Bloom has complied with Public Resources Code section 21 167.5 by prior service of a notice upon the City indicating its intention to file this Petition. Proof of Service of this notification is attached as Exhibit A. 85. This Petition is timely filed in accordance with Public Resources Code section 21 167 and 14 California Code ofRegulations section 151 l2. FIRST CAUSE OF ACTION (For Writ ofMandate - Code of Civil Procedure § 1085) 86. Bloom incorporates by reference the allegations of paragraphs l through 85 of this pleading, as thofigh set forth fully in this paragraph. 87. Code of Civil Procedure section 1085, subdivision (a), authorizes this Court to issue a writ of mandate “to compel the performance of an act with the law specially enjoins, as a duty resulting from an office, trust or station.” . 1 8 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF \OOGVQ 88. Under section 1085, mandamus can compel public officials to perform an official act required by law. Mandamus can compel an official t0 exercise its discretion under a proper interpretation 0f applicable law. 89. An abuse of discretion within the meaning of Code of Civil Procedure section 1085 occurs when, among other actions, an agency improperly interprets and enforces a statute. 90. The Intel Project site has the zoning designation “PD” and was previously zoned “ML”. Under the Intel Project site’s zoning designation, “[i]ncidental and accessory buildings, storage buildings, outdoor storage, warehouses, exposed mechanical appunenances, and the like, that comprise less than twenty-five percent (25%) of the total lot area and are shielded from public View” are permitted uses. See Santa Clara Mun. Code, § 18.48.030(e). 91. Bloom’s building permit application (BLD2019-545 1 9) for the Intel Project requests installation of l 0 Bloom Energy Servers as accessory uses. The building permit application for the Intel Project confirms that the proposed Bloom Energy Server installation meets the accessory use criteria, as it would comprise far less than 25% of the total lot area and be shielded from public view. 92. The Intel Project permit application thus confirms that the Bloom Energy Sewer installation meets all objective criteria for ministerial issuance 0f the requested building permit. 93. The Equinix Project site zoning designation allows for uses permitted in ML zones, including accessory uses. See Santa Clara Mun. Code, § 18.48.030(e). 94. Bloom’s building permit application (BLD20 l 9-5645 1) for the Equinix Site requests installation of 10 file] cells as accessory uses. The building petmit application for the Equinix Project confirms that the proposed Bloom Energy Server installation meets the accessory use criteria, as it would‘comprise far less than 25% of the total lot area and be shielded from public view. 95. The Equinix Project permit application thus confirms that the Bloom Energy Server installation meets all objective criteria for ministerial issuance of the requested building permit. /// /// 1 9 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF \OOOflmUl-RUJNu-n NNNNNNNNNr-tr-h-t-v-Hr-nh-Hh- “NQUI-PWNHOOOOQQUI#WNHO 96. Bloom Energy Servers do not use thermal, steam, wind or solar power to produce electricity. Instead, they produce electricity using a chemical conversion process involving hydrogen and oxygen, an anode and a cathode. 97. Bloom Energy Servers are not electric power plants as defined in Section 18.06.010(e) ofthe City’s Municipal Code: “all equipment, fixtures, and personal property operated or maintained in connection with the production of electricity using any source of thermal, steam, wind, or solar energy with a generating capacity ofmore than five hundred (500) kilowatts and less than fifty (50) megawatts. . ..” 98. Accordingly, the City has failed to identify any legally valid basis for requiring a conditional use permit for the Intel or Equinix Projects. 99. The City’s failure to issue ministerial building permits for the Intel and Equinix Projects was arbitrary, capricious, entirely lacking in evidentiary support and/or unlawfully or procedurally unfair. 100. Bloom has no plain, speedy or adequate remedy in the ordinary course of the law, except those remedies requested by this action and petition for writ. 101. The City has a statutoxy and non-discretionary duty to administer the City’s planning and zoning laws and regulations consistently, without singling out a particular project, property owner or developer for special and unfavorable treatment. 102. The City has a mandatory and non-discretionary duty to lawfully process and issue building permits and all other non-discretionary approvals in connection with the Projects. I 103. The City has failed and refiJsed to carry out, and continues to fail and refuse to carry out without exc'use and in a willful manner, their mandatory and non-discretionary duties described ' above by failing to issue ministerial building permits for the Projects. 104. Bloom has a direct and beneficial interest in the issuance ofa writ 0fmandate because it has suffered, and is continuing to suffer, damages because of the City’s actions. 105. The City has proceeded in excess of its powers andlor failed to proceed in a manner required by law in failing to process and issue building permits and other non-discretionary approvals in connection with the Projects. 20 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INIUNCTIVE RELIEF \DOGQONUI-kWNp-x Nr-‘r-‘bh-u-p-Hv-‘v-‘t- OOOOQO‘xU‘I-bWNv-O 22 23 24 25 26 27 28 106. The City’s actions were arbitrary and capricious, and not supported by substantial evidence. 107. In addition, the City proceeded in excess of its jurisdiction and failed to proceed in the manner required by law. SECOND CAUSE OF ACTION (For Writ of Administrative Mandate - Code of Civil Procedure § 1094.5) 108. Bloom incorporates by reference the allegations of paragraphs l through 107 ofthis pleading, as though set forth fully in this paragraph. 109. In the alternative, t0 the extent that the City’s failure to lawfully process and issue building permits and other non-discretionary approvals in connection with the Projects was administrative in nature, it is subject to California Code of Civil Procedure section 1094.5. 110. Under Section 1094.5, the City’s failure to lawfully process and issue building permits and other non-discretionary approvals in connection with the Projects constituted a prejudicial abuse of discretion in that the City’s actions were not supported by findings, and any findings were not supported by the evidence in the record regarding the Projects. THIRD CAUSE OF ACTION (Violation 0f California Environmental Quality Act -- Public Resources Code §§ 21000 et seq.) 111. Bloom incorporates by reference the allegations of paragraphs l through 110 of this pleading, as though set forth fully in this paragraph. 1 12. CEQA was enacted to require public agencies and decision makers to document and consider the environmental implications of their actions before fonnal decisions are made and to “[e]nsure that the Iong-term protection of the environment shall be the guiding criterion in public decisions.” Pub. Resources Code, § 21001(d). 113. CEQA’s strong framework for environmental protection, however, also includes a long-standing provision that no environmental review shall be required under CEQA if an exemption applies to a proposed project or activity. See Pub. Res. Code, §21080(b); Pub. Res. Code, § 21084(a). // / 2 l PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF \DOOQONUI#UJNI-‘ NNNNNNNNN-i-Ht-HHt-r-v-r- wflmm#WNHo\OW\IO\M-PWN-O l l4. CEQA provides statutory exemptions that define various types of activities for which no environmental review is required. See generally Pub. Res. Code, § 21080(b); Pub. Res. Code, § 21080.01 et seq. 115. In addition, the CEQA Guidelines identifies several categorical exemptions. See Pub. Res. Code, § 21084; CEQA Guidelines, §§ 15300-15333. ‘ 1 16. No CEQA review is required for a categorically exempt project unless the exemption is negated by a specific exception. See CEQA Guidelines, § 15300.2. 1 17. - An agency must determine whether a proposed activity is statutorily or categorically exempt from CEQA during the 30-day preliminary review period after the agency has accepted a project application as complete. See Pub. Res. Code, §21080.2; CEQA Guidelines, §§ 15102, 15061, 15062. 118. A ministerial decision by a public agency is statutorily exempt from review under CEQA. See Pub. Resources Code, § 21080(b)(1). 119. Under the City’s long-established policies and practices, Bloom Energy Servers require only a ministerial building permit from the City. 120. Bloom’s applications for the Projects requested only ministerial building permits. 121. The City engaged in a prejudicial abuse of discretion and failed to proceed in the manner required by law under CEQA by unlawfully determining that the Project applications for ministerial permits were not statutorily exempt from CEQA review. 122. Alternatively, the City engaged in a prejudicial abuse of discretion and failed to proceed in the manner required by law under CEQA by unlawfully determining that the Projects did not qualify for any exemptions, despite substantial evidence in the record demonstrating that the Projects qualified for categorical exemptions. 123. In fact, the substantial evidence in the record shows that the Projects qualify for one or more categorical exemptions and, further, that none of the exceptions to the exemptions apply. 124. Bloom provided the City with substantial evidence demonstrating that the Projects are categorically exempt as Class l existing facilities. See CEQA Guidelines, § 1530] . 125. The Class l categorical exemption applies to projects that: 22 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND mIUNCTIVE RELIEF ©00NONM$UJN~ N N N N N N N N Ix) r- H h- - _ H r-n - u-t p- m \l m U1 ¥ DJ N ’- 0 o 0° . \l ON U1 $ U9 N '- O consists of operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use. The key consideration is whether the project involves negligible or no expansion of an existing use. CEQA Guidelines, § 15301. 126. Further, Bloom provided the City with substantial evidence demonstrating that the Projects are categorically exempt as Class 29 'cogeneration facilities, even if they are determined by the City to be “electric power plants.” See CEQA Guidelines, § 15329. 127. Bloom also provided the City with substantial evidence demonstrating that the Equinix Project is categorically exempt under Class 3 for new construction or conversion of small structures. CEQA Guidelines, § 15303. 128. In addition, Bloom provided the City with substantial evidence demonstrating that the Projects are exempt under the “common sense” exemption because there is no possibility of significant environmental effects from construction or operation ofBloom Energy Servers. CEQA» Guidelines, § 1506 1 (b)(3). 129. Further, the record contains no substantial evidence of any reasonable possibility of a significant environmental effect due to unusual circumstances. Notably, the City identified no environmental effects resulting from the construction and operation of the numerous Bloom Energy Servers currently located in Santa Clara. 130. Bloom has no plain, speedy or adequate remedy in the ordinary course of law. Accordingly, Bloom seeks a writ of mandate directing the City to perform its ministerial duties to process and issue building permits and other non-discretionary approvals in connection with the Projects either (1) without any further CEQA review, or (2) as exempt from CEQA. FOURTH CAUSE OF ACTION (For Injunctive Relief- Code of Civil Procedure § 526) 13 l. Bloom incorporates by reference the allegations ofparagraphs 1 through 130 of this pleading, as though set forth fully in this paragraph. 132. Bloom, as well as its customers Intel and Equinix, are being irreparably harmed by the City’s failure to issue all permits required for the Projects in knowing violation of the law. . 23 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF \OOONO‘x 10 ll 12 13 14 15 l6 17 18 l9 20 21 22 23 24 25 26 27. 28 133. The City has approved the installation and operation 0f Bloom Energy Servers pursuant to ministerial building permits for multiple years in locations around Santa Clara. 134. In approving the existing Bloom Energy Servers, the City never required any discretionary permits, including any use permits for power plants. 135. The City never required any CEQA review for approval ofthe existing Bloom energy Servers. 136. In reviewing and approving the existing Bloom Energy Sewers, the City never asserted that the fuel cells were 01‘ could be treated as “power plants” under the City’s municipal code. 137. Bloom relied, to its detriment, on the City’s consistent determination for every fuel cell application submitted prior to the Projects that the approval of Bloom Energy Servers requires only a ministerial building permit. 138. Bloom incurred substantial expense - in excess of $1.8 million - in reasonable and good faith reliance on the City’s consistent determination that the approval ofBloom Energy Servers requires only a ministerial building permit. 139. The City is barred, including without limitation by the doctrine ofequitable estoppel, from interpreting its Code to assert that the Projects are “power plants” and/or require use permits. 140. Bloom does not have a plain, speedy, and adequate remedy in the ordinary course of law. 141. Bloom is entitled to and seeks a temporary restraining order, preliminary injunction, and/or permanent injunction mandating that the City perform its ministerial duties to process and approve the building permits and other non~discretionary approvals necessary for the Projects. FIFTH CAUSE OF ACTION (For Declaratory Relief- Code 0f Civil Procedure § 1060) 142. Bloom incorporates by reference the allegations of paragraphs 1 through 141 of this pleading, as though set forth fully in this paragraph. / / / / / / 24 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF U.) \GOONG 10 11 12 l3 l4 15 16 l7 18 19 20 21 22 23 24 25 26 27 28 143. An actual controversy exists between Bloom and the City regarding the City’s failure to lawfully process and issue building permits and other non-discretionary approvals in connection with the Projects. 144. Specifically, the City contends that a discretionaxy use permit is required for each Project. On the other hand, Bloom contends that only a ministerial building permit is required from the City for each Project, consistent with the City’s approvals ofprior Bloom Energy Server projects. 145. An actual controversy exists between Bloom and the City also exists regarding the City’s interpretation of its Code in connection with whether the Projects are “power plants” and therefore require the approval of use permits. 146. Specifically, the City contends that the Projects are “power plants” pursuant to Section l8.06.0 l 0(e)(l) ofthe Santa Clara Municipal Code, for which use permits are required under the City’s zoning code. On the other hand, Bloom contends that the fuel cells proposed in the Projects are not power plants as defined in the City’s code, and that only ministerial building permits are required for approval of Bloom Energy Servers. 147. A judicial declaration of the panies’ rights and obligations in connection with the above controversies is necessary and appropriate at this time so that the parties may ascertain their respective rights and obligations as to each other with regard t0 the Projects. PRAYER FOR RELIEF WHEREFORE, Bloom prays for relief as follows: 1. On its First, Second and Third Causes of Action: for the issuance of an alternative writ of mandate, a peremptory writ of mandate and/or a writ of mandate commanding the City to process and issue the building permits and all other approvals required for the Projects in the ordinary course and without further obstruction or delay. 2. On its Fourth Cause of Action, for a temporary restraining order, preliminary injunction, and permanent injunction mandating that the City, and all agents and officers ofthe City, perform its ministerial duties to process and approve the building permits and other approvals necessary for the Projects. 25 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF \DOOQQUIAUJNH NNNNNNNNNa-Hn-n-H-r-p-r-n_ OO\l0\UI-PWNWO\OWQO\UIJ>WNHO 3. On its Fifth Cause of Action, for ajudicial declaration as requested therein. 4. On,all Causes of Action: for its costs of suit and attorneys’ fees as authorized by law, including without limitation, by Code of Civil Procedure § 1021.5 and 42 U.S.C. §§ 1988. 5. On all Causes of Action: for such other and further relief as may bejust and proper. DATED: June 29, 2021 MEYERS NAVE i k. (fl By: 2‘ ALE s/KULKARNI /SH Z D. TANGRI p EDWARD GRUTZMAéHER Attorneys for Petitioner and Plaintiff BLOOM ENERGY CORPORATION 3794372.4 26 PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF EXHIBIT A 1999 Harrison Street, 9‘“ Floor Shiraz D. Tangri Oakland, California 94612 stangri@meyersnave.com tel (510) 808-2000 ~ fax (510) 444-1108 www.meyersnave.com meyers nave June 29, 2021 Via Email and U.S. Mail Hosam Haggag City Clerk, City 0f Santa Clara City Clerk’s Office 1500 Warburton Avenue Santa Clara, CA 95050 Email: Clerk@santaclaraca.g0v Re: NOTICE OF INTENT TO FILE CEQA PETITION Honorable City Clerk: Please take notice that, pursuant to Public Resources Code section 21 167.5, Bloom Energy Corporation (“Bloom”) intends to file a Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief (“Petition”) in Santa Clara County Superior Court under the provisions of the California Environmental Quality Act (“CEQA”) against the City of Santa Clara. The Petition challenges the City’s failure and refusal to find that Bloom’s Energy Servers are not ministerial proj ects subject to CEQA and, alternatively, that ifBloom’s Energy Servers are subject to discretionary review, that the Energy Servers are not exempt from CEQA review under one or more of CEQA’s Categorical Exemptions. The Petition will seek a writ of mandate commanding the City to process the building permit applications for Bloom’s Energy Servers as ministerial proj ects not subject to CEQA or, in the alternative, a writ ofmandate commanding the City to process the building permit applications for Bloom’s Energy Servers under one or more CEQA exemptions. The Petition may also assert other non-CEQA claims and seek additional relief. CC: Alexander Abbe, City of Santa Clara, Assistant City Attorney Amrit S. Kulkarni 37943 12.2 A PROFESSIONAL CORPORATION OAKLAND LOS ANGELES SACRAMENTO SANTA ROSA SAN DIEGO PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of Los Angeles, State of California. My business address is 707 Wilshire Blvd., 24th Floor, Los Angeles, CA 90017. ' On June 29, 2021, I served true copies of the following document(s) described as NOTICE OF INTENT TO FILE CEQA PETITION on the interested parties in this action as follows: Hosam Haggag . Alexander Abbe City Clerk, City of Santa Clara Assistant City Attorney City Clerk’s Office City of Santa Clara 1500 Warburton Avenue 1500 Warburton Avenue Santa Clara, CA 95050 Santa Clara, CA 95050 Email: Clerkgcgsantaclaraca.gov Email: aabbe@santaclaraca.gov BY MAIL: I enclosed the document(s) in a sealed envelope or package addressed to the persons at the addresses listed in the Service List and placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with the practice of Meyers Nave for collecting and processing correspondence for mailing. On the same day that correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. BY E-MAIL OR ELECTRONIC TRANSMISSION: I caused a copy of the document(s) to be sent from e-mail address tstephens@meyersnave.c0m to the persons at the e-mail addresses listed in the Service List. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on June 29, 2021 , at Los Angeles, California.WWW Teresa Stephens A PROFESSIONAL CORPORATION OAKLAND lOS ANGELES SACRAMENTO SANTA ROSA SAN DIEGO .5 ©00fl0‘xU1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE I am employed in Los Angeles County, State 0f California, in the office of a member of the bar 0f this Court, at Whose direction the service was made. I am over the age 0f eighteen years, and not a party to the within action. My business address is 953 East 3rd Street, Los Angeles, CA 90013. On February 4, 2022, I served the following documents in the manner described below: REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF RESPONDENT AND DEFENDANT’S DEMURRER m (BY ELECTRONIC SERVICE) By electronically mailing a true and correct copy through Durie Tangri’s electronic mail system from wcarpenter@durietangri.com to the email addresses set forth below. On the following part(ies) in this action: Amrit S. Kulkami Shiraz D. Tangri Edward Grutzmacher MEYERS NAVE 1999 Harrison Street, 9th Floor Oakland, CA 94612 akulkarni@meyersnave.com stangri@meyersnave.com egrutzmacher@meyersnave.com Attorneysfor Plaintzfl BLOOM ENERGY CORPORATION Henry Weissmann Bryan H. Heckenlively Justin P. Raphael MUNGER, TOLLES & OLSON LLP 560 Mission Street, 27th Floor San Francisco, CA 94105-3089 henry.weissmann@mto.com bryan.heckenlively@mto.com justin.raphael@mto.com Attorneysfor Plaintifi’ BLOOM ENERGY CORPORATION I declare under penalty of perjury under the laws 0f the State 0f California that the foregoing is true and correct. Executed 0n February 4, 2022, at San Dimas, California. V Wy M. C enter REQUEST FOR JUDICIAL NOTICE / CASE NO. 21CV383800