In Morgan v. Ygrene Energy Fund, Inc., the Supreme Court today only slightly eases pre-litigation administrative burdens for homeowners with complaints about a state clean energy financing program.
The court’s unanimous opinion by Justice Leondra Kruger addresses a dispute about the Property Assessed Clean Energy program, under which local governments loan homeowners money for clean energy improvements and the homeowners repay the loans through an assessment added to their property tax bills. Private companies frequently administer the program. The Morgan plaintiffs sued private administrators, claiming violations of statutory disclosure and licensing requirements imposed on lenders.
The opinion holds that the “plaintiffs’ central claims for relief” — which the court frames as invalidating the tax assessments and preventing their future collection — required them, before filing suit, “to follow the applicable statutory procedures for challenging taxes,” typically paying the tax and seeking relief from tax authorities. However, the court concludes there aren’t any administrative prerequisites for seeking other remedies, those “target[ing] only the manner in which the PACE administrators have administered the program, without also seeking to cancel the underlying obligation to pay voluntary assessments in accordance with the statutes establishing the program.” As an example of the latter relief, the court identifies “an injunction requiring PACE administrators to issue joint checks to homeowners and contractors when financing future improvements.”
The court affirms in part and reverses in part the Fourth District, Division One, Court of Appeal published opinion, which had upheld the dismissal of the plaintiffs’ entire lawsuits for failure to first exhaust administrative procedures.
