Petitioners reply to opposition to petition for writ

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                                                                             2001
 1   L      Introduction                                      OA/ Po&/+;.~;;aJ
2           Since the inception of CalWORKs child care in 1998, respondents have used an array of
 3   “underground regulations” to govern Stages 2 and 3 of CalWORKs child care (“Stages 2 and 3”)
4    violating the Administrative Procedures Act (“APA”) and leaving CalWORKs child care subsid:
 5   recipients and child care providers without guidance about policies and procedures.
 6          Respondents make three primary arguments in opposition to this peremptory writ of
 7   mandate: first, that all of the documents in question merely reflect the requirements of statutes
 8   and other laws and therefore do not qualify as regulations; second, that many of the documents
 9   rave expired; and third, that the Court lacks the authority to nullify entire documents. As shown
10   )elow, each of these contentions is false.
11   [I.    Respondents Have Violated the APA
12   .
     4      Respondents Failed to Follow APA-Mandated Procedures
            Respondents admit that their Management Bulletins (“MBs”), Funding Terms and
13
     Conditions (“FTCs”), and Letters, do not meet the procedural mandates that the APA imposes OI
14
     regulations. Answer, page 13, line 16. However, they assert that their MBs, FTCs, and other
15
     documents merely reflect the language of statutes, the California budget, and other legislative
16
     mandates, rather than qualifying as regulations under the APA.
17
            Respondents’ assertion is belied by the fact that the respondent California Department of
18
     Education (“CDE”) is the lead administrative agency for child care in California, mandated by
19
     law to oversee Stages 2 and 3 (as well as other subsidized child care programs). Were
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     respondents’ assertion true, the only role of CDE with respect to Stages 2 and 3 would be to
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     relay information about legislative changes and statutory requirements to the child care field. In
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     fact, as noted below, respondents do recognize the need to issue regulations; unfortunately, they
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     have done so without following the mandates of the APA.
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            The APA first defines what constitutes a regulation: any rule, regulation, or standard of
25
     general applicability that interprets, implements, or makes specific the law enforced or
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     administered by an administrative agency, as well as any amendment, supplement, or revision of
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     a rule, etc. Gov. Code 8 11342(g). Furthermore, regulations may not conflict with other laws.
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                                                      1

     PETITIONERS’ REPLY TO OPPOSITION TO PETITION FOR WRIT OF MANDATE
                                           Case Number 309526
 1   ~OV. Code $5 11342.1, 11342.2, 11349.2, 11349.1, 11349(d). Respondents have violated these
2    Tequirements by interpreting, implementing, and making specific the law, and by amending
3    regulations that conflict with Stages 2 and 3 statutes, without using the procedures mandated by
4    the APA.
5    B.     Even if Use of Documents is Authorized by Law, Respondents Must Comply with
            APA Process
6           Respondents claim that their Management Bulletins (“MBs”) and Funding Terms and
7    Conditions (“FTCs”) do not violate the APA, as they are authorized by Education Code $8
 8   33308.5 (MBs) and 8353(b), 8220.1, and 8354(a) (FTCs). Education Code 8 33308.5 authorize:
 9   the use of non-mandatory program guidelines that serve as models or examples, are not
10   Trescriptive, and include written notification that they are merely exemplary. Respondents’
11   :laim (Opposition, p. 3, line 14) that MBs are not mandatory unless required by statute is
12   disingenuous; statutes and regulations are mandatory, but MBs that interpret statutes and amend
13   regulations are not made mandatory merely because of the existence of statutes and regulations.
14   Because respondents’ MBs are facially mandatory and do not contain written notice that they arc
15   merely exemplary, they do not qualify as program guidelines pursuant to this statute.
16                  Furthermore, even if MBs, FTCs, and Letters are otherwise authorized, they are
17   still regulations, as they meet the APA definition of a regulation. Engelman v. State Board of
18   Education, 2 Cal. App. 4th 47 (1991) (despite the fact that the California Department of
19   Education and other education agencies are authorized by the California Constitution to adopt a
20   textbook selection process, this process must meet the requirements of the APA). Regardless of
21   whether an administrative agency has designated a document as a “resolution,” “guideline,”
22   “ruling,” etc., the “effect and impact on the public” is the factor that determines whether or not a
23   policy is a regulation. Ligon v. State Personnel Bd., 123 Cal. App. 3d 583, 588 (1981).
24   C.     Interpretation or Amendment of a Law is a Regulation
25          Respondents cite United Systems of Arkansas, Inc. v. Stamison, 63 Cal. App. 4th 1010
26   (1998), as authority for the claim that application of a regulation is not a regulation. This claim
27   is erroneous. First, Stamison, Ibid., does not so indicate. Second, interpretations of regulations
28   can be regulations (See Tidewater Marine Western v. Bradshaw, 14 Cal. 4th 557, 569, 576
                                                   L

     PETITIONERS’ REPLY TO OPPOSITION TO PETITION FOR WRIT OF MAmATE
                                           Case Number 309526
 1   1996), interpretations of Industrial Wage Commission Orders [which are exempt from the APA
2    put must follow separate, rigorous, regulatory procedures and are akin to APA-mandated
3    egulations] must be promulgated in accordance with the APA). Third, petitioners do not allege
4    hat the mere application of existing regulations in itself constitutes a regulation; rather, as
 5   ndicated below, petitioners allege that respondents amend existing regulations that are
6    nconsistent with CalWORKs statutes through the use of MBs, FTCs, and Letters.
7    D.     McCurter, Cited by Responderts, is Inapplicable Here
 8          In addition, respondents’ citation of McCurter v. Older, 173 Cal. App. 3d 582, 592
 9   :1985), for the proposition that the Legislature is presumed to enact new statutes with previous
10                                          I
     statutes in mind, is misguided. Respondents’ intentions in citing McCurter, Ibid., are unclear.
11   Pespondents may be claiming that, when the Legislature issues a new version of a statute, it is
12   Jresumed to be familiar with previous judicial interpretations of that statute. If so, McCurter,
13   ‘bid., is inapplicable because in that case, a new version of an existing statute was in question;
14   lere, Stages 2 and 3 are entirely new programs. Alternatively, respondents may be claiming that
15   he Legislature should be presumed to have been aware of respondents’ Title 5 regulations when
16   t issued Stages 2 and 3 statutes. If so, McCurter is inapplicable because the documents alleged
17   rerein to be regulations were issued prior to the creation of Stages 2 and 3 statutes.
18   E.     Statutes and Budget do not Mfmdate the Policies Chosen by Respondents
            Respondents claim that MBs 99~;ll (petitioners’ exh. H), 99-15 (petitioners’ exh. I, and
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     30-04 (petitioners’ exh. L), and PTCs governing Stages 2 and 3 (petitioners’ exhs. S, T, U, V, W
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     are mandated by CalWORKs statutes and by the California budget. These documents establish
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     policies governing the termination or non-termination of families, use of statutory priorities to
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     terminate families, non-establishment of a waiting list, termination of families if they “time out”
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     of Stage 2 when Stage 3 is unavailable, and restriction of Stage 3 to families who have “timed
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     jut” of Stage 2.
25
            Contrary to respondents’ claim, none of the policies established in the above documents
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     ;oveming eligibility in Stages 2 or 3 is mandated by a statute. Education Code 9 8354 requires
27

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                                                       3

     PETITIONERS’ REPLY TO OPPOSITION TO PETITION FOR WRIT OF MANDATE
                                            case Number 309526
 1   :hat families transitioning off assistance,r eceive child care services in the same way as families
2    receiving other child care subsidies, but ilt does not require any of the interpretations listed above
3    it does not require that only families whIO have “timed out”of Stage 2 receive Stage 3.
4           Moreover, the Governor’s veto (3f ’ funding from Stage 3 in 1999, restoration of lost
 5   funding in the 2001 budget cycle, and tlhe: Governor’s veto message are irrelevant to CDE’s
 6   obligations under the APA. The budge:t may not serve the purpose of changing statutes or
7    changing the role of administrative age] tlC :ies Planned Parenthood Affiliates of California v.
 8   Swoap, 173 Cal. App. 3d 1187 (1985).
 9          The statutes governing Stages 2 a nd 3 eligibility do not specify the above policies
10   pursued by respondents, and the budget:Inay not change substantive Stage 2 and 3 law.
11   Therefore, the challenged documents esfalblish methodology for making decisions to terminate
12   families, not to terminate families, etc. l-‘hese policies implement, interpret, and make specific
13   CalWORKs law without following the 1P’ ,ocedural mandates of the APA.
14   2.     Application of Priority Schedl I 11e to Stages 2 and 3 is Regulatory
15          Respondents claim that their pollit :y governing the application of the priority schedule
16   (which governs who will receive child ( ca Ire if funding is insufficient to serve all eligible families
17   is merely a restatement of Education CcPCle 3 8263. In fact, three MBs, as well as all FTCs,
                                             I
18   establish policies governing the applica ility of the priority schedule to CalWORKs child care:
                                             p’
19   MB 97-32 (petitioners’ exh. B), 98-26 (iP etitioners’ exh. E), 99-15, and the FTCs (petitioners’
20   exhs. S, T, U, V, W). These mutually ccDI rtradictory documents state respectively that (1) the
21   priorities in Education Code $ 8263(a) >ply to Stages 2 and 3, (2) the priorities do not apply, (3
22   priorities should be used to terminate S ta,ge-3 eligible families if funding is insufficient, and (4)
23   these priorities do not apply.        I
24           Education Code 9 8263(a) establishes a priority schedule from which Stages 2 and 3 are
25   specifically exempt. Cal. Code Reg. 0 18106, which preceded CalWORKs child care by ten
26   years and covers admissions priorities and waiting lists, conflicts with Cal. Education Code 3
27   8263 by saying nothing about exempti 1g CalWORKs families. Nonetheless, Respondents clam
28   that the above documents merely repeat statutory requirements. In fact, these documents go
                                                    4

      PETITIONERS’ REPLY TO OPPOSITION TO PETITION FOR WRIT OF MANDATE
                                             C/ase Number 309526
 1   oeyond the statute by applying the priority schedule to Stages 2 and 3 despite the fact that the
 2   statute does not, by its own terms, apply. By stating that the priority schedule does not apply to
 3   Stages 2 and 3, these documents amend Cal. Code Reg. 9. Implementation of these policies wit1
 4   underground regulations violates the APA.
 5   3.     License Exempt Child Care and Minimum Wage Policies Constitute Regulations

 6
            Respondents claim that their policy governing the treatment of license-exempt care in
 7
     Stages 2 and 3 is mandated by law. Respondents’ policy is established in MB 97-33 (petitioners
 8
     exh. D), a Letter of July 15, 1998 (petitioners’ exh. M), a Letter of July 23, 1998 (petitioners’
 9
     :xh. N), and all FTCs (petitioners’ exhs~. S, T, U, V, W). These documents allow Alternative
10
     Payment Programs that administer Stag’ s 2 and 3 (“CalWORKs APPs”) to limit the use of
11
                                             e
     license-exempt care to situations in which a minimum number of children are served, thereby
12
     assuring the payment of the minimum wage.
13
            Contrary to respondents’ claim, the federal Child Care and Development Fund does allol
14
     states to restrict in-home license-exempt child care to situations in which a minimum number of
15
     children are served in order to ensure the payment of minimum wage, but it does not mandate
16
     such a policy. 45 C.F.R. 3 98.16(g)(2)., Further, state law merely allows APPs to pay
17
     CalWORKs parents as the employers of child care providers, rather than paying child care
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     providers directly, as they would ordinarily do. Education Code 8 8357.
19
            Thus, respondents’ policy of allowing APPs to restrict the use of license-exempt child
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     care to a minimum number of children is not mandated by any state or federal statute. While
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     :nsuring that minimum wage is paid is ~a worthwhile goal, the option chosen by respondents is
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     simply one among several available options (e.g., pay each provider the minimum wage
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     regardless of the number of children served). If respondents’ policy were truly the only
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     reasonable interpretation of CalWORKs law, then it would be ipso facto unnecessary for
25
     respondents to state it in FTCs in order to ensure a uniform eligibility policy (See Tidewater
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     Marine Western v. Bradshaw, 14 Cal. 4th 557 (1996)). Consequently, this policy is a regulation
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     that violates the APA by implementing, interpreting, and making specific CalWORKs statutes
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     without following the mandated procedures.        5

     PETITIONERS’ REPLY TO OPPOSITION TO PETITION FOR WRIT OF MANDATE
                                            Case Number 309526
.




    1                  4.    Policies Governing Use of Religious Child Care and Age of
                             Termination from Child Care Constitute Regulations
    2          Respondents claim that their policies governing use of religious child care and age of
    3   termination from child care merely restate the requirements of state and federal law. All FTCs
    4   (petitioners’ exhs. S, T, U, V, W), cover the use of religious child care; all FTCs and MB 99-l l-
    5   A (petitioners’ exh. J) cover age cut-off from child care. The two state-funded PTCs
    6   (petitioners’ exhs. S, T), state that eligibility for Stages 2 and 3 ends at age 14 and that religious
    7   child care is not allowed. In addition, MB 99-l 1-A provides information about the eligibility of
    8   13- and 14-year-olds for child care. Contrarily, the two federally-funded FTCs (petitioners’
    9   exhs. U, V, W), state that eligibility ends at age 13 and that religious child care must be allowed.
10             Respondents’ assertion that these provisions are mandated by law is belied by the fact
11      that the respondents’ policies go beyond relevant statutes. First, 5 Cal. Code Reg. 8 18017 state>
12      that religious child care is not allowed. This regulation conflicts with federal law, which
13      mandates that parents receiving child care funded by the Child Care and Development Fund be
14      allowed to choose religious child care, 45 C.F.R. 8 98.30(c)(4), and is amended by the federal
15      FTCs. In addition, respondents do far more than repeat statutory mandates; they reconcile the
16      various age cut-offs by mandating a process for transition from one type of funding to another in
17      order to continue assistance where possible. These policies violate the APA by interpreting,
18      implementing, and making specific law without following the APA procedural requirements.
19                      5.   Policy Governing Children Alternating Between Separated and
20                           Divorced Parents is a Regulation
               Respondents claim that their policy in FTCs (exhibits S, T, U, V, W) regarding children
21
        alternating between separated and divorced parents is merely an assurance that families ineligibl
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        for child care assistance do not receive such assistance. This claim misses the mark; as with
23
        other policies established by respondents in FTCs, MBs, and Letters, this policy is nowhere
24
        reflected in Stage 2 or 3 statutes or regulations. It therefore creates a new eligibility criterion. Ir
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        addition, it is far from being the only possible way to ensure that only eligible families receive
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        child care subsidies; for example, CalWORKs cash assistance eligibility for children of
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        separated and divorced households is ordinarily determined by the household income of the
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        primary custodial parent, disregarding the hous%old income of the other parent even if the child

        PETITIONERS’ REPLY TO OPPOSITION TO PETITION FOR WRIT OF MANDATE
                                                Case Number 309526
 1   spends a portion of his or her time with the other parent. DSS MPP $8 82-808.41; 82-808. If
2    respondents’ policy were truly the only reasonable interpretation of CalWORKs law, then it
3    would be ipso facto unnecessary for respondents to state it in FTCs in order to ensure a uniform
4    eligibility policy (See Tidewater Marine Western v. Bradshaw, 14 Cal. 4th 557 (1996)).
5           Respondents r&-cite Americana Termite Co., Inc. v. Structural Pest Control Board, 199
6    Cal. App. 3d 228,233-234 (1988) [page number is 228, not 2881, (Opposition, page 5, line 13)
7    for the proposition that affected people should be aware of changes due to legislative hearings
 8   and public records act requests. In fact, the holding in Americana Termite, Ibid., is not based on
9    the APA, but on other grounds. In one paragraph, this case finds that the documents in question
10   are internal agency documents and therefore not subject to the APA; it merely states in dicta that
11   the process used was not surreptitious because legislative hearings had been held and public
12   records act requests were possible. Respondents’ reliance on this dictum proves too much: if
13   legislative hearings and the availability of public records act requests sufficed, then the APA
14   would be rendered void in virtually every case.
15                  6.   MB 98-01, Referral as Verification of Eligibility, Social Security
                         Number Collection
16          MB 98-01 (Petitioners’ exh.. D) mandates that APPs accept a referral from a Stage 1
17   agency as determinative of eligibility for Stage 2. Respondents claim that MB 98-01 merely
18   repeats existing law. In fact, the policies established clearly constitute an interpretation of
19   CalWORKs statutes, including Ed. Code 0 8350(b), mandating smooth and seamless transition
20   from Stage to Stage. Unfortunately, while this policy does attempt to meet the statutory
21   mandate, its implementation is spotty at best. For example, petitioner Freda Fayerweather faced
22   the loss of her child care when transitioning from Stage 1 to Stage 2 and was required to provide
23   further eligibility verification. Fayerweather declaration, page 1, line 25. This policy interprets
24   the law, violating the APA by failing to follow mandated procedures. Happily, respondents have
25   now issued regulations (5 Cal. Code Reg. 5 18070(c)) governing the collection of Social Securit,
26   Numbers. Petitioners encourage respondents to issue regulations in accordance with the APA
27   regarding all other policies outlined in this case.
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                                                           7

      PETITIONERS’ REPLY TO OPPOSITION TO PETITION FOR WRIT OF MANDATE
                                             Case Number 309526
 1                  7.   MB 99-02, Diversion Eligibility, Definition of “Employment,” and
                         Exclusion of SSI from Income
2           MB 99-02 (petitioners’ exh. F) determines eligibility of CalWORKs diversion recipients
3    ‘or child care, defines employment, and establishes that SSI is excluded from income.
4    Respondents are correct that their diversion policy is consistent with the diversion statute and
5    :hat it is not included in that statute; thus, respondents prove petitioners’ point that this policy
6    Interprets CalWORKs law. The definition of “employment” to encompass education and
7    training as well is nowhere included in the statutes applicable to former CalWORKs recipients
 8   receiving Stages 2 and 3. It is included only in Welf. & Inst. Code 0 11322.6, which covers only
9    current CalWORKs cash assistance participants, not those who have transitioned off CalWORKl
10   cash assistance and are receiving Stages 2 and 3. Finally, while Education Code $9 8263(f) and
11   8263.1(a) exclude SSI from income, respondents’ policy stating that such income is excluded is
12   regulation because it amends 5 Cal. Code Reg. 8 18078, which, inconsistent with the above
13   CalWORKs statutes, defines “income” and does not exclude SSI from income. Respondents’
14   claim in its answer (page 8, line 20) that 5 Cal. Code Reg. 3 18027(a)(l) excludes SSI from
15   income is false; this regulation covers the entirely unrelated topic of contractor responsibilities.
16                  8.     MB 98-19 Policy Governing Definition of Full-Time Child Care is a
17                         Regulation
            Rather than referring to MB 98-19 (petitioners’ exh. X), respondents mistakenly referred
18
     to MB 98-19 in its Memorandum of Points and Authorities. Because of the plethora of
19
     underground regulations that respondents use to regulation CalWORKs, it is very difficult to
20
     keep track of documents and policies. However, respondents were on notice of the contested
21
     provisions, i.e., the definition of full-time care in Stages 2 and 3, as well as applicable payment
22
     rates. Changing the definition of full-time care from 6 hours to 6.5 hours changes substantive
23
     rights of both child care providers and parents, constituting a regulation that interprets
24
     CalWORKs law without following APA mandates.
25
     III.   Any Expired Documents are Not Moot Because They are Still in Effect
26
            Respondents allege that the following documents expired on or before June 30,200O and
27
     therefore may not be considered by the Court: MBs 97-32 (petitioners’ exh. B), 97-33
28
     (petitioners’ exh. C), 98-19 (petitioners’ exhibit $), and 00-04 (petitioners’ exhibit L), as well as

      PETITIONERS’ REPLY TO OPPOSITION TO PETITION FOR WRIT OF MANDATE
                                             Case Number 309526
L




    1   all FTCs attached to the Memorandum of Points and Authorities (petitioners’ exhibits S, T, U, V
    2   W). Respondents further allege that MB 99-05 (petitioners’ exh. F) was nullified by a statutory
    3   change effective January 2000.
    4          Only expired documents that aYe no longer in efSect are moot for purposes of determinin
    5   whether or not the APA has been violated. Stoneham v. Rushen, 137 Cal. App. 3d 729 (1982)
    6   (amended administrative bulletin does not render case moot, as unresolved issues remain.
    7   Association of Retarded Citizens-California v. Department of Developmental Services, 153 Cal.

    8   App. 3d 219 (1984) (APA claim is moot because the new budget cycle had a new mandate that
    9   replaced the challenged policy).
10             In the instant case, despite the official expiration date on some of the documents that
11      constitute “underground regulations,” the policies described are in force and effect. Respondent
12      do not contest that the majority of policies described by petitioners are still in effect. Even
13      policies that respondents believe to be void are still being applied by APPs because policies in
14      MBs change and expire often, and APPs lack clear guidance from respondents about which
15      policies to apply and which to disregard. Declaration of Eric Peterson, page 2, line 13. In
16      addition, respondents’ constant amendment of its FTCs and failure to update its website make it
17      difficult for the community to know which FICs are current.
18             MB 99-05 does not list an expiration date. Respondents claim that this MB, which states
19      that the 50% or 75 % rule does not apply to Stages 2 or 3, is no longer in effect.
20      Notwithstanding this claim, this MB is being applied by some APPs. The APP servicing
21      declarant Karrie Davis failed to consider this MB, and applied the 75% rule to her, but not to hei
22      neighbor. When this MB was brought to the attention of this APP, the policy was not applied to
23      Ms. Davis. Declaration of Karrie Davis, page 2, lines 14, 26.
24             Forced to choose between respondents’ oral “policy of the month” or a policy establishec
25      by an officially or unofficially expired MB, APPs often decide to apply the only written policy
26      available to them. Declaration of Eric Peterson, page 2, line 19.
27
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                                                          9

        PETITIONERS’ REPLY TO OPPOSITION TO PETITION FOR WRIT OF MANDATE
                                               Case Number 309526
.
    .




        1   IV.      The Court Has the Authority to Nullify Entire Documents in APA Cases
        2            Respondents assert with no authority that the Court lacks the authority to nullify the
        3   entire contents of MBs or FTCs because petitioners challenge only specific provisions of these
        4   documents. Applying an analogy from the doctrine used when a portion of a statute with a
        5   severability clause is found to be invalid, the Court has the authority to sever null portions of a
        6   statute and leave the rest of a statute intact in the following circumstances: when the remainder
        7   is complete in itself, would have been adopted despite the invalidity of a portion of the
        8   document, and is not so connected with the rest of the document as to be operationally
        9   inseparable; the three applicable criteria are grammatical, functional, and volitional separability.
    10      Calfarm Ins. Co. v. Deukmeiian 48 Cal. 3d 805 (1989); Gerken v. Fair Political Practices
    11      Commission, 6 Cal. 4th 707 (1993). Similarly, in the instant case, numerous documents alleged
    12      to be regulations in violation of the APA fail to meet the above standard and should be nullified
    13      in their entirety. For example, most MBs contain little other than the provisions contested by
    14      petitioners.
    15      IV.      Conclusion
    16               For all of the foregoing reasons, petitioners request that this Court issue a writ of mandatl
    17      prohibiting CDE from applying rules that purport to govern its child care program, but have
    18      never been adopted pursuant to the APA.
    19      Dated:                                  Respectfully Submitted,
                                                    Child Care Law Center
    20                                              Western Center on Law And Poverty
    21                                              Center on Poverty Law And Economic Opportunity
                                                    San Fernando Valley Neighborhood Legal Services
    22                                              Legal Aid Foundation of Los Angeles
                                                    Legal Services of Northern California
    23                                              Legal Aid Society of San Mateo County
    24                                              Public Counsel

    25                                              bY
                                                    Sujatha J. Branch
    26
                                                    Attorneys for Petitioners
    27
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            PETITIONERS’ REPLY TO OPPOSITION TO PETITION FOR WRIT OF MANDATE
                                                    Case Number 309526

				
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