Justia California Court of Appeals Opinion Summaries

CDLA filed suit against the DMV, alleging that the DMV conducts administrative hearings to determine whether automatic suspension of a driver's license was warranted after the driver has been arrested for driving under the influence. CDLA claimed that at these hearings, the hearing officers simultaneously act as advocates for DMV and as triers of fact. The Court of Appeal reversed the trial court's grant of DMV's motion for summary judgment, holding that taxpayer standing under Code of Civil Procedure section 526a was appropriate under the circumstances of this case, in which a group of taxpayers has alleged that a government entity was engaging in "waste" by implementing and maintaining a hearing system that violated drivers' procedural due process rights. Accordingly, the court remanded for further proceedings. View "California DUI Lawyers Assoc. v. California Department of Motor Vehicles" on Justia Law

In 2003, the Legislature enacted Water Code section 1525, which required the holders of permits and licenses to appropriate water to pay an annual fee according to a fee schedule established by the Board. At the same time, the Legislature enacted sections 1540 and 1560, which allowed the Board to allocate the annual fee imposed on a permit or license holder who refuses to pay the fee on sovereign immunity grounds to persons or entities who contracted for the delivery of water from that permit or license holder. Plaintiffs Northern California Water Association, California Farm Bureau Federation, and individual fee payors claimed that the annual fee imposed in fiscal year 2003-2004 constituted an unlawful tax, as opposed to a valid regulatory fee because it required fee payors to pay more than a de minimis amount for regulatory activities that benefited nonfee-paying right holders. Plaintiffs also claimed that the fees allocated to the water supply contractors violated the supremacy clause of the United States Constitution because they exceeded the contractors’ beneficial interests in the USBR’s water rights. The California Supreme Court previously ruled sections 1525, 1540, and 1560 were constitutional on their face. The Supreme Court found that the record was unclear as to: (1) “whether the fees were reasonably apportioned in terms of the regulatory activity’s costs and the fees assessed;” and (2) “the extent and value of the [contractors’ beneficial] interests.” Accordingly, the Supreme Court directed the Court of Appeal to remand the matter to the trial court to make findings on those issues. Following a 10-day bench trial, the trial court issued a statement of decision that determined inter alia that the statutory scheme as applied through its implementing regulations imposed a tax, as opposed to a valid regulatory fee, by allocating the entire cost of the Division’s regulatory activities to permit and license holders, while nonpaying-water-right holders who benefit from and place burdens on the Division’s activities pay nothing. The trial court likewise found that the fees passed through to the water supply contractors in fiscal year 2003-2004 pursuant to regulation 1073 ran afoul of the supremacy clause “because the allocation of fees [was] not limited to the contractors’ beneficial or possessory use of the [USBR’s] water rights.” In addition, the trial court found that the fee regulations were invalid because they operated in an arbitrary manner as to a single payor, Imperial Irrigation District. Accordingly, the trial court invalidated regulations 1066 and 1073, “as adopted by Resolution 2003-0077 in 2003-2004.” The Board appealed, contending the trial court erred in invalidating the fee regulations. The Court of Appeal concluded the trial court’s central premise was wholly incorrect because it failed to recognize the role that general fund money played in fiscal year 2003-2004: the fees assessed on permit and license holders were proportionate to the benefits derived by them or the burdens they placed on the Division. The trial court erred in determining that the fee regulations were invalid based on their application to a single payor. Accordingly, the Court reversed the judgment invalidating the fee regulations. View "No. CA Water Assn. v. St. Water Resources Control Bd." on Justia Law

In 2003, the Legislature enacted Water Code section 1525, which required the holders of permits and licenses to appropriate water to pay an annual fee according to a fee schedule established by the Board. At the same time, the Legislature enacted sections 1540 and 1560, which allowed the Board to allocate the annual fee imposed on a permit or license holder who refuses to pay the fee on sovereign immunity grounds to persons or entities who contracted for the delivery of water from that permit or license holder. Plaintiffs Northern California Water Association, California Farm Bureau Federation, and individual fee payors claimed that the annual fee imposed in fiscal year 2003-2004 constituted an unlawful tax, as opposed to a valid regulatory fee because it required fee payors to pay more than a de minimis amount for regulatory activities that benefited nonfee-paying right holders. Plaintiffs also claimed that the fees allocated to the water supply contractors violated the supremacy clause of the United States Constitution because they exceeded the contractors’ beneficial interests in the USBR’s water rights. The California Supreme Court previously ruled sections 1525, 1540, and 1560 were constitutional on their face. The Supreme Court found that the record was unclear as to: (1) “whether the fees were reasonably apportioned in terms of the regulatory activity’s costs and the fees assessed;” and (2) “the extent and value of the [contractors’ beneficial] interests.” Accordingly, the Supreme Court directed the Court of Appeal to remand the matter to the trial court to make findings on those issues. Following a 10-day bench trial, the trial court issued a statement of decision that determined inter alia that the statutory scheme as applied through its implementing regulations imposed a tax, as opposed to a valid regulatory fee, by allocating the entire cost of the Division’s regulatory activities to permit and license holders, while nonpaying-water-right holders who benefit from and place burdens on the Division’s activities pay nothing. The trial court likewise found that the fees passed through to the water supply contractors in fiscal year 2003-2004 pursuant to regulation 1073 ran afoul of the supremacy clause “because the allocation of fees [was] not limited to the contractors’ beneficial or possessory use of the [USBR’s] water rights.” In addition, the trial court found that the fee regulations were invalid because they operated in an arbitrary manner as to a single payor, Imperial Irrigation District. Accordingly, the trial court invalidated regulations 1066 and 1073, “as adopted by Resolution 2003-0077 in 2003-2004.” The Board appealed, contending the trial court erred in invalidating the fee regulations. The Court of Appeal concluded the trial court’s central premise was wholly incorrect because it failed to recognize the role that general fund money played in fiscal year 2003-2004: the fees assessed on permit and license holders were proportionate to the benefits derived by them or the burdens they placed on the Division. The trial court erred in determining that the fee regulations were invalid based on their application to a single payor. Accordingly, the Court reversed the judgment invalidating the fee regulations. View "No. CA Water Assn. v. St. Water Resources Control Bd." on Justia Law

While a 2007 ordinance, which deleted the reference to Internal Revenue Code section 4251 from the Norwalk Municipal Code, made a technical change to the Code, it did not impose, extend or increase the telephone tax. Plaintiffs filed suit alleging that the 2007 Ordinance violated Propositions 62 and 218, which prohibit local governments from imposing, extending, or increasing taxes without voter approval. The Court of Appeal affirmed the dismissal of the complaint, holding, as a matter of law, that the 2007 ordinance did not violate Propositions 62 or 218. View "Gonzalez v. City of Norwalk" on Justia Law

If a municipality imposes a sales tax, the State Board of Equalization (BOE) has the statutory authority to collect and then remit the tax back to the municipality, to determine where sales of personal property occur, and to designate the municipality that will receive any local sales tax that is being collected. Following an internal reorganization of an existing seller, the BOE decided that local sales tax which had been remitted to Fontana and Lathrop would be “reallocated” to Ontario. The trial court set aside the decision. The court of appeal reversed. There is substantial evidence in the administrative record to support the BOE decision; the manner in which the BOE determined where the taxable event occurred was well within its administrative expertise and its discretionary authority to make such a determination. View "City of Fontana v. California Department of Tax and Fee Administration" on Justia Law

Defendant Darren Rose, a member of the Alturas Indian Rancheria, ran two smoke shops located in Indian country but far from any lands governed by the Alturas Indian Rancheria. In those smoke shops, Rose sold illegal cigarettes and failed to collect state taxes. California brought an enforcement action to stop illegal sales and collect civil penalties. Rose appealed, arguing: (1) California and its courts did not have jurisdiction to enforce California’s civil/regulatory laws for his actions in Indian country; and (2) the amount of civil penalties imposed was inequitable and erroneous. The Court of Appeal concluded: (1) federal law and tribal sovereignty did not preempt California’s regulation and enforcement of its laws concerning sales of cigarettes; and (2) the superior court’s imposition of civil penalties was proper. View "California v. Rose" on Justia Law

Plaintiffs and appellants Luz Solar Partners Ltd., III; Luz Solar Partners Ltd., IV; Luz Solar Partners Ltd., V; Luz Solar Partners Ltd., VI; Luz Solar Partners Ltd., VII; Luz Solar Partners Ltd., VIII and Harper Lake Company VIII; and Luz Solar Partners Ltd., IX and HLC IX (collectively “Luz Partners”) challenged the assessment of real property improved with solar energy generating systems (SEGS units) for tax years 2011-2012 and 2012-2013. They contended that defendants-respondents San Bernardino County (County) and the Assessment Appeals Board of San Bernardino County (Appeals Board) erroneously relied on the State of California Board of Equalization’s (Board) incorrect interpretation of the applicable statutes governing the method of assessing the value of the property. Finding that the Board correctly interpreted the applicable law in setting forth the method of assessing the value of the solar properties, the Court of Appeal affirmed. View "Luz Solar Partners Ltd. v. San Bernardino County" on Justia Law

If a municipality imposes a sales tax, the State Board of Equalization (now the California Department of Tax and Fee Administration) has the authority to collect and then remit the tax back to the municipality under the Bradley-Burns Uniform Local Sales and Use Tax Law (Stats. 1955, ch. 1311; 7200 et seq.). The Board is authorized to determine where sales of personal property occur and to designate the municipality that will receive the local sales tax it collects. After an internal reorganization of an existing seller, the Board decided that local sales tax which had been remitted to Fontana and Lathrop, where the seller had warehouses, would be “reallocated” to Ontario, the site of the seller’s new marketing operation. The trial court set aside that decision. The court of appeal reversed, finding that the Board’s decision was supported by substantial evidence. The manner in which the Board determined where the taxable event occurred was well within its administrative expertise and its discretionary authority to make such a determination. Customers believed they were ordering goods from the Ontario facility, which became the retailer when it purchased goods for shipment to customers. View "City of Fontana v. California Department of Tax and Fee Administration" on Justia Law

If a municipality imposes a sales tax, the State Board of Equalization (now the California Department of Tax and Fee Administration) has the authority to collect and then remit the tax back to the municipality under the Bradley-Burns Uniform Local Sales and Use Tax Law (Stats. 1955, ch. 1311; 7200 et seq.). The Board is authorized to determine where sales of personal property occur and to designate the municipality that will receive the local sales tax it collects. After an internal reorganization of an existing seller, the Board decided that local sales tax which had been remitted to Fontana and Lathrop, where the seller had warehouses, would be “reallocated” to Ontario, the site of the seller’s new marketing operation. The trial court set aside that decision. The court of appeal reversed, finding that the Board’s decision was supported by substantial evidence. The manner in which the Board determined where the taxable event occurred was well within its administrative expertise and its discretionary authority to make such a determination. Customers believed they were ordering goods from the Ontario facility, which became the retailer when it purchased goods for shipment to customers. View "City of Fontana v. California Department of Tax and Fee Administration" on Justia Law

In a 2005 Cooperation and Option Agreement to facilitate Russell's construction and operation of the Energy Center, a natural gas-fired, combined cycle electric generating facility in Hayward, the city granted Russell an option to purchase 12.5 acres of city-owned land as the Energy Center's site and promised to help Russell obtain permits, approvals, and water treatment services. Russell conveyed a 3.5-acre parcel to the city. The Agreement's “Payments Clause” prohibited the city from imposing any taxes on the “development, construction, ownership and operation” of the Energy Center except taxes tethered to real estate ownership. In 2009, Hayward voters approved an ordinance that imposes “a tax upon every person using electricity in the City. … at the rate of five and one-half percent (5.5%) of the charges made for such electricity” with a similar provision regarding gas usage. Russell began building the Energy Center in 2010. In 2011, the city informed Russell it must pay the utility tax. The Energy Center is operational.The court of appeal affirmed a holding that the Payments Clause was unenforceable as violating California Constitution article XIII, section 31, which provides “[t]he power to tax may not be surrendered or suspended by grant or contract.” Russell may amend its complaint to allege a quasi-contractual restitution claim. View "Russell City Energy Co. v. City of Hayward" on Justia Law