County of Los Angeles v. State Department of Public Health

This is a controversy over certain tuberculosis subsidy payments claimed by the county of Los Angeles to be payable to it under the Tuberculosis Subsidy Law but withheld by the State Department of Public Health. The trial court ruled that such payments, in an aggregate amount of $330,715.69, had been improperly withheld from the county, should be paid over to it, and that future subsidies payable under the statute (Health & Saf. Code, §§ 410-414, 3099-3342) must be computed in accordance with the claim of the county. The application of the statute to partial-pay patients in county hospitals is the focal point of the dispute. The State Department of Public Health and other defendants have appealed.

The above mentioned sections of the Health and Safety Code are a codification of the Tuberculosis Subsidy Law first enacted in 1915 (Stats. 1915, eh. 766, p. 1530). It provided for a state subsidy to any city or county maintaining a tuberculosis ward or hospital of $3.00 a week “for each person in

Thus it appears that the Board of Health claims all support moneys paid by part-pay patients and refuses to include them in the subsidy calculation, unless the county agrees to pay and actually pays over those moneys to the state; failure to do so precludes any subsidy with respect to a part-pay patient. “The position of the appellants, based upon the opinions of the Attorney General over a period of many years, has been that the actual cost to the County has no bearing whatsoever on the amount of the subsidy to be paid to the County; that any amount contributed by the patient must be deducted from the amount of the subsidy, and only the balance paid

The attorney general rendered an opinion in July, 1951 (18 Ops. Cal. Atty. Gen. 29) upholding the validity of the regulation. The county never made any agreement such as the regulation prescribes and did not comply with the same, but its claims for subsidy were paid in full for the period from July 1, 1947, to June 30, 1951. A post-audit of such claims was made by the controller over a period extending from October, 1952, to July, 1953; it disclosed the county’s failure to report on part-pay patients in the manner contemplated by regulation Number 5198, and the discrepancy amounted to $224,540.57 for the period covering July 1, 1947, to December 31, 1951, inclusive. This amount (plus $2,969.89 representing deductions made by reason of matters other than the application of § 5198) was deducted from the county’s claim for the six months period of January 1 to June 30, 1953. The appellants currently disallowed a portion of each subsidy claim filed by the county for each semiannual period from July 1, 1951, through December 31, 1953, in the total sum of $106,-175.12, making a grand total deduction of $330,715.69, the amount of the judgment rendered herein. Though these figures seem large, they amount to approximately four per cent of the $7,634,202.71 subsidy apportioned to the county of Los Angeles for the period from July 1, 1947, to December 31, 1953, inclusive.

On August 7, 1953, the county sought a writ of mandate to compel payment of said sum of $330,715.69 to it, but the writ was denied without opinion in the District Court of Appeal. Thereupon two suits (now under review) were filed, one seeking mandate and the other declaratory relief. Judgment favorable to the county was entered in each and the instant appeals were taken therefrom.

The controlling question is whether regulation 5198 is a valid administrative implementation of the statute. Initially it is to be observed that the statute provides a true subsidy, payable to the county, not the patient, the amount

Counsel for both sides concede, as they must, that one who pays in full for his care is not hospitalized at public expense, and hence cannot be included in the basis for computing the subsidy. It seems evident that the insertion in section 3 of the original statute of the sentence “the hospital shall be allowed to receive pay patients” must have been intended to refer to those who can provide only part of the cost of the keep. Its inclusion in the particular section which commands payment of a subsidy is significant. In said section 3 the quoted sentence follows the provision that the county shall receive $3.00 a week for each person cared for at public expense, and immediately precedes a requirement that the medical superintendent render semiannual statements covering the subject matter. “The medical superintendent of each hospital receiving state aid under this act shall render semiannually to the state bureau of tuberculosis a report under oath showing, for the period covered by the report, (1) the number of patients suffering from tuberculosis cared for therein at public expense, unable to pay therefor, and (2) the number of weeks of treatment of each such patient.” (Stats. 1919, ch. 464, p. 853.) In the process of codification this medical report requirement was carried into section 3301.

Ours is but a problem in statutory interpretation, which “has been characterized as a search after the legislative intent as expressed in the language of the statute.” (23 Cal.Jur. § 101, p. 719.)

It is difficult to discern a legislative intent to exclude part-pay patients from the basis of computation of the subsidy, especially as the pertinent sentence concerning the receiving of pay patients was inserted in the statute for their benefit. It is doubtful whether the provision that the “hospitals shall be allowed to receive pay patients” would be valid if held to apply to those who are able to pay the full cost of their support. Under the ruling in Goodall v. Brite, 11 Cal.App.2d 540 , 545, 548-550, 552 [ 54 P.2d 510 ], the affording of hospital facilities to the latter class of patients would amount to a gift of public funds unless limited to emergency eases. At page 551 the court pertinently remarked: “In the administration of public funds the supervisors are acting as trustees and they should so administer those funds as to lighten the taxpayers’ burden as much as possible.”

To the extent that patients do not pay for their own keep they are manifestly supported at public expense. Counsel for

Counsel for appellants place considerable reliance upon this portion of section 3300, “except that the city, county, or city and county is not entitled to receive this state aid unless the tuberculosis ward, sanatorium, or hospital conforms to the regulations of and is approved by the State Department of Public Health.” It was stipulated and the court found that Los Angeles County’s “wards and hospitals conform to the regulations of and are approved for tuberculosis subsidy by the State Department of Public Health, except that in the preparation and submission of claims for tuberculosis subsidy the County of Los Angeles has not complied with Section 5198. ...” Respondent argues “that by the language ‘regulations of . . . the State Department of Public Health,’ the Legislature contemplated that these regulations would cover such matters as adequate physical facilities, including such things as buildings, wards, bed space, laboratory facilities, qualifications and training standards of personnel, and the keeping of records and statistics at these hospitals.

“The specific language of Section 3300 provides that the ‘ward, sanitarium or hospital’ must conform to the rules in order to qualify for subsidy, clearly contemplating that it is the facilities of these installations which must conform to the rules in order that the institution qualify for subsidy, and does not refer to fiscal matters between the counties and the

This statutory language assumes an existing right of administrative interpretation through the adoption of regulations, but the right springs from the same statute. Section 102, Health and Safety Code, provides: “It shall have power to adopt, promulgate, repeal and amend rules and regulations consistent with law for the protection of the public health.” It is in pari materia with the following sections of the Government Code. Section 11373 provides: “. . . Each regulation adopted, to be effective, must be within the scope of authority conferred and in accordance with standards prescribed by other provisions of law.” Section 11374: “Whenever by the express or implied terms of any statute a state agency has authority to adopt regulations to implement, interpret, make specific or otherwise carry out the provisions of the statute, no regulation adopted is valid or effective unless consistent and not in conflict with the statute and reasonably necessary to effectuate the purpose of the statute. . . .” The administrative agency must confine itself to reasonable interpretation in adopting regulations for administration of its governing statute; if it goes beyond that, the legislative area has been invaded and the regulation counts for nought. See Boone v. Kingsbury, 206 Cal. 148 , 161 [ 273 P. 797 ]; Whitcomb Hotel, Inc. v. California Emp. Com., 24 Cal. 2d 753 , 759 [ 151 P.2d 233 , 155 A.L.R. 405 ]; First Industrial Loan Co. v. Daugherty, 26 Cal.2d 545 , 550 [ 159 P.2d 921 ]; Williamson v. United States, 207 U.S. 425 , 461-462 [ 28 S.Ct. 163 , 52 L.Ed. 278 ]; United States v. United Verde Copper Co., 196 U.S. 207 , 215-216 [ 25 S.Ct. 222 , 49 L.Ed. 449 ]; United States v. George, 228 U.S. 14 , 20 [ 33 S.Ct. 412 , 57 L.Ed. 712 ]. The effect of these statutes and authorities is summarized in Tolman v. Underhill, 39 Cal.2d 708 , 712 [ 249 P.2d 280 ]: “It is well settled, however, that laws passed by the Legislature under its general police power will prevail over regulations made by [an agency] with regard to matters which are not exclusively [that agency’s] affairs.” That is the case here. The Legislature has occupied the field which the regulation attempts to invade (cf. Department of Social Welfare v. Kern County, 29 Cal.2d 873 , 877 [ 180 P.2d 1 ]).

Appellants also argue that the cost to the county of maintaining tuberculosis patients has no relation to the statute, that this is shown by section 3301.7, enacted in 1953, which provides: “It is the intention of the Legislature to adjust from time to time state participation in the care of persons suffering from tuberculosis in accordance with changes in the cost of caring for such patients. ’' Counsel say in their opening brief: “This clearly indicates that the cost of care to the counties is not a matter to be considered in claiming the subsidy, but rather is a matter which the Legislature will consider from time to time in fixing the amount of the subsidy per patient day.” The section was passed as part of a measure increasing the flat subsidy payable to the county and evinces an intent to increase the subsidy to the county as the cost of care goes up, or vice versa. (Since 1915 the amount has been increased from $3.00 per patient per week to $2.60 per patient per day in some instances.) We agree that section 3301.7 does not reflect an intention to have the specified amount of aid altered by the county or the state. But this aids appellants’ position in no respect. If it throws any light upon our problem it merely serves to illuminate the fact that the subsidy is a fixed amount which can be changed directly or indirectly by the Legislature only.

The foregoing considerations also dispose of the argument that respondent is barred from recovery by failure to exhaust administrative remedies through filing of claims with the controller pursuant to section 16021 and sections 16041-16054 of the Government Code. Those sections relate to claims against the state; as the present claims of the county do not fall in that category there was no necessity of complying with any of the claim sections in question. Indeed the procedure applicable to subsidy payments called for filing of claims therefor with the State Department of Public Health and this was done. The language last above quoted from County of Los Angeles v. Riley, supra, 20 Cal.2d 652 , 662 is here applicable.

Bach action is attacked upon a separate jurisdictional ground. With respect to the declaratory relief action it is argued that section 11440, Government Code, is a consent to suit for the narrow purpose of obtaining a judicial declaration “as to the validity of any regulation.” Aside from the fact that it is not a suit against the state at all, it further appears that this is a myopic view of the section. It provides that declaratory relief may be obtained “by bringing an action for declaratory relief in the superior court in accordance with the provisions of the Code of Civil Procedure.” This is a reference to section 1060 et seq., Code of Civil Procedure. Section 1060 says that the plaintiff “may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of such rights or duties, whether or not further relief is or could be claimed at the time.” Section 1062: “The remedies provided by this chapter are cumulative, and shall not be construed as restricting any remedy, provisional or otherwise, provided by law for the benefit of any party to such action, and no judg

It is now well settled that no specific consent is requisite to a suit for declaratory relief brought against public officials and designed to adjudge and declare the obligations of their office with respect to a given factual situation. Indeed, the cases go so far as to say that such an action may run against the state itself without the necessity of specific statutory consent. So held in Hoyt v. Board of Civil Service Commrs., 21 Cal.2d 399 , 403 [ 132 P.2d 804 ]; Lord v. Garland, 27 Cal.2d 840 , 852 [ 168 P.2d 5 ]; California Physicians’ Service v. Garrison, supra, 28 Cal.2d 790 , 800; Bess v. Park, 132 Cal.App.2d 49 , 53 [ 281 P.2d 556 ],

Objection is made to the inclusion of an injunctive provision in each judgment. After decreeing the invalidity of regulation 5198, requiring an accounting from defendants to plaintiff, awarding judgment for $330,715.69 and directing issuance of warrant for payment of same, the court further declared it to be the duty of defendants: “(a) To set aside their determination of the amount of tuberculosis subsidy payments and their rejection and disallowance of a part of the plaintiff’s claim for each of the subsidy periods from July 1, 1951, to December 31, 195 3 (b) To cease and desist from any action whereby there is withheld all or any portion of the tuberculosis subsidy claims of the County of Los Angeles for tuberculosis care furnished to eligible individuals by the County of Los Angeles, except as to amounts in excess of the amount set forth in Section 3301.5 of the Health and Safety Code, which excess amount is determined by the accounting

It is argued that an injunction is not permissible in a declaratory relief action. The law is to the contrary, as was declared in Knox v. Wolfe, 73 Cal.App.2d 494 , 505 [ 167 P.2d 3 ]; James v. Hall, 88 Cal.App. 528 , 535 [ 264 P. 516 ]; Jones v. Feichtmeir, 95 Cal.App.2d 341 , 344 [ 212 P.2d 933 ]; Staley v. Board of Medical Examiners, 109 Cal.App.2d 1 , 5-6 [ 240 P.2d 61 ].

The contention that the “cease and desist” paragraph is improper in either judgment because violative of section 526, second subdivision 4, of the Code of Civil Procedure, and Civil Code, section 3423, subdivision 4, is equally untenable. Those sections prohibit the granting of an injunction to prevent the execution of a public statute by officers of the law. But they apply only to valid statutes. A statute or a regulation has no existence if it is invalid and its enforcement may be enjoined. “The argument, in any ease, against the validity of an injunction issued to restrain the execution of a statute, rests, of course, on the premise that the statute in question is a valid exercise of the legislative power. An act of the Legislature which is in conflict with the constitution is no statute at all. It ‘is utterly void, and has no force or legal existence. . . .’ (Wheeler v. Herbert, 152 Cal. 224 , 228 [ 92 P. 353 ].) The provisions of section 3423, subdivision 4, of the Civil Code, ‘refer solely to injunctions against the execution of valid statutes.’ (Wheeler v. Herbert, 152 Cal. 224 [ 92 P. 353 ].) ” (Reclamation District v. Superior Court, 171 Cal. 672 , 676 [ 154 P. 845 ].)

Appellants invoke the statute of limitations, relying on Code of Civil Procedure, section 343, the four-year statute. Counsel argue that rule 5198 was adopted in August, 1946, and the county’s suit not brought within four years and hence is barred. Respondent aptly replies: “In this case the appellants