Justia California Court of Appeals Opinion Summaries

In three related actions, privately held public utilities sued for property tax refunds for fiscal years 2014-2015 and 2015-2016, following the County’s denial of refund claims submitted under Revenue and Taxation Code section 5097. Section 100(b) establishes formulas for calculating the debt-service component of certain property taxes. Pursuant to that statute, Santa Clara County imposed taxes on the utilities’ properties at rates higher than those imposed on non-utility properties. Although section 100(b) was enacted in 1986, the utilities argued that imposition of a higher debt-service tax rate on their property, under the statutory formulas, violated California Constitution article XIII, section 19, which provides that the state-assessed property of certain regulated utility companies “shall be subject to taxation to the same extent and in the same manner as other property.”The trial court denied motions to dismiss, holding that the County had not carried its burden of establishing that the utilities cannot state a claim. The court of appeal reversed. Article XIII, section 19, does not mandate that utility property be taxed at the same rate as other property. Instead, it provides that, after utility property is assessed by the State Board of Equalization, it shall be subject to ad valorem taxation at its full market value by local jurisdictions. View "County of Santa Clara v. Superior Court of Santa Clara County" on Justia Law

Monterey is an independent public agency responsible for analyzing Monterey County's water resources. Cal-Am is an investor-owned water utility providing water to over 100,000 residents on the Monterey Peninsula. Marina, a public agency, provides water for the City of Marina and neighboring Monterey Peninsula communities. In 1995 the State Water Resources Control Board ordered Cal-Am to stop drawing water from the Carmel River and develop an alternate water supply. In 2009 Marina, Monterey, and Cal-Am agreed to develop and construct a regional desalinization project to extract brackish water from beneath Monterey Bay, purify it, and deliver it to consumers. In 2010-2011, the parties entered into several agreements. The project was never built. The parties engaged in negotiation and mediation, ending in January 2012 without resolution.In September 2012, Cal-Am submitted a claim under the California Government Claims Act. Litigation followed. In 2019, the trial court entered summary adjudication against Monterey, finding that a negligence cause of action was barred by the two-year statute of limitations and against Cal-Am under the Government Claims Act. The court of appeal reversed. The trial court erred in finding that the “harm” accrued in 2010. There were triable issues of fact as to express waiver and as to the applicability of alternatives to the Claims Act. View "California-American Water Co. v. Marina Coast Water Districtw" on Justia Law

Appellants Raymond and Michelle Plata were property owners in the City of San Jose and customers of Muni Water. Muni Water’s annual budget was reflected each year in a document called a source and use of funds statement, which was part of the City’s annual operating budget. In 2013, the Platas filed with the City a claim pursuant to Government Code sections 910 and 910.2, accusing Muni Water of violating Proposition 218 ab initio by collecting money from customers and illegally transferring it to the City’s own general fund. The City rejected the claim, so in early 2014, the Platas brought a class action lawsuit seeking declaratory and injunctive relief against the City under Proposition 218, as well as recovery of the amounts overpaid. After a lengthy bench trial, the trial court issued a statement of decision finding: (1) the late fees charged by Muni Water were not a fee or charge covered by Proposition 218; (2) any claims accruing prior to November 4, 2012 were time-barred because of the statute of limitations provided under Government Code section 911.2, and there was no basis for applying any equitable tolling doctrine; (3) as for tiered water rates, the discussion of high rates in the Platas’ government claims adequate to gave notice to the City that its rate structure was being questioned; and (4) “[a] more significant complication” raised by the City in its class decertification motion. The tiered rate structure would impact different class members differently from month to month, thus making it potentially “impossible” to draw a “line between ‘winners’ and ‘losers’ based on monthly water consumption[.]” The court granted the City’s motion to decertify the class, and refused to grant the Platas any relief as to their tiered rate argument. The Platas appealed. The Court of Appeal reversed judgment only as to the trial court’s findings on the tiered rate structure. In all other respects, it was affirmed. View "Plata v. City of San Jose" on Justia Law

Plaintiffs challenged a surcharge that Long Beach imposes on its water and sewer customers by embedding the surcharge in the rates the Water Department charges for service. The surcharge funds are transferred from the Water Department to the city’s general fund, to be used for unrestricted general revenue purposes. The surcharge was approved by a majority of the city’s voters under California Constitution article XIII C. The plaintiffs argued that notwithstanding majority voter approval, the surcharge violates article XIII D, which prohibits a local agency from assessing a fee or charge “upon any parcel of property or upon any person as an incident of property ownership” unless the fee or charge satisfies enumerated requirements the city acknowledges were not met.The trial court found the surcharge unconstitutional and invalid. The court of appeal affirmed the judgment and an award of attorney fees. Because the surcharge qualifies as a “levy other than an ad valorem tax, a special tax, or an assessment, imposed by an agency upon a parcel or upon a person as an incident of property ownership, including a user fee or charge for a property related service,” it satisfies the definition of “fee” or “charge” in article XIII D and must comply with article XIII D, section 6(b)’s requirements regardless of voter approval. View "Lejins v. City of Long Beach" on Justia Law

A reverse validation action was brought by petitioners Bonnie Wolstoncroft, William Unkel, and Michael Wilkes against the County of Yolo (County) to challenge the County’s plan to continue water service to 95 residences within the North Davis Meadows County Service Area (County Service Area) by replacing two aging groundwater wells with the City of Davis’s (City) water supply. Under this plan, North Davis Meadows residents would pay substantially higher water rates to pay for the project. The County considered the increased water rates to be property-related fees and noticed a Proposition 218 (as approved by voters, Gen. Elec. (Nov. 5, 1996)) hearing. More than five months after the County adopted its resolution, but before the deadline contemplated by the parties’ tolling agreement, petitioners filed their action in superior court. The trial court rejected petitioners’ argument that the increased levy constituted an assessment for which majority approval was required by Proposition 218. The trial court also rejected petitioners’ contentions that the County wrongfully rejected protest votes it claimed not to have received or received in an untimely manner. After review of petitioners' arguments on appeal, the Court of Appeal concluded the trial court correctly determined that the levy constituted a property-related fee under Proposition 218. "The fact that maintaining adequate water supply requires switching water sources does not turn the fee into an assessment. Thus, the County properly employed the majority protest procedure under article XIII D, section 6." Further, the Court concluded that even if the trial court erred in denying petitioners’ motion to augment the record with declarations regarding two mailed protest votes, petitioners’ evidence would not prove timely compliance with the protest procedure. Without the protest votes for which only evidence of mailing was tendered, the protest lacked a majority. Accordingly, the trial court's judgment was affirmed. View "Wolstoncroft v. County of Yolo" on Justia Law

To connect a California caller to a California recipient, long-distance carriers must purchase access to local exchange services provided by local carriers (switched access services). Long-distance carriers have no control over which local carrier will provide switched access services and “have no choice but to use this service." In its complaint to the Public Utilities Commission, Qwest (a long-distance carrier) alleged that local carriers discriminated against it by providing other long-distance carriers, AT&T and Sprint, with discounted rates for switched access services. Qwest was not charged more than the rates set forth in the local carriers’ tariffs. The Commission concluded Qwest showed that it was similarly situated to AT&T and Sprint and that there was no rational basis for treating Qwest differently with respect to the rates. The court of appeal affirmed, rejecting challenges to the Commission failing to conduct an additional evidentiary hearing, finding Qwest was similarly situated to the Contracting Carriers without considering various factors the Commission identified in earlier Decisions; treating differences in the cost of providing service as the only “rational basis” for different rates; concluding Qwest is entitled to refunds; and in determining for the first time during the rehearing that switched access is a monopoly bottleneck service. View "Bullseye Telecom, Inc. v. California Public Utilities Commission" on Justia Law

The Antelope Valley Groundwater Cases (AVGC) proceeding litigated whether the water supply from natural and imported sources was inadequate to meet the competing annual demands of water producers, thereby creating an overdraft condition. One of the competing parties, Appellant Tapia, individually and as trustee of a trust, claimed that he owned land overlying the aquifer. Settlement discussions ultimately produced an agreement among the vast majority of parties in which they settled their competing groundwater rights claims and agreed to support the contours of a proposed plan designed to bring the Antelope Valley Adjudication Area (AVAA) basin into hydrological balance. Tapia was not among the settling parties. Accordingly, before considering whether to approve the Physical Solution for the AVAA basin, the trial court conducted a separate trial on Tapia's unsettled claims and defenses.The Court of Appeal concluded that the Physical Solution's allocation of the "native safe yield" (NSY) does not violate California's water priorities; the allocations to correlative rights holders accord with California law; the Physical Solution's allocation of the NSY does not violate California's principles promoting the reasonable and beneficial use of water; and substantial evidence supports the judgment as to Tapia, and the Physical Solution is consistent with California law governing water priorities and the constitutional reasonable and beneficial use requirement. View "Los Angeles County Waterworks District No. 40 v. Tapia" on Justia Law

Over 20 years ago, numerous parties alleged in the Antelope Valley Groundwater Cases (AVGC) that, without a comprehensive adjudication of all competing parties' rights to produce water from and a physical solution for the aquifer, the continuing overdraft of the basin would negatively impact the health of the aquifer. In this case, the trial court was required to find a physical solution that balanced the needs of thousands of existing users, all of whom competed for the scarce water that replenished the aquifer underlying the Antelope Valley Adjudication Area (AVAA), and to craft its provisions to protect the long-term health of the aquifer and the region's residents. The trial court determined that severely reduced water usage was required of existing users, and that severely curtailed access was required for future users. On appeal, the Willis Class challenged the judgment approving the Physical Solution, a proposed plan designed to bring the AVAA basin into hydrological balance.The Court of Appeal affirmed the trial court's judgment and concluded that the Physical Solution adequately balanced the competing interests of the parties within the parameters of governing California law and was not inconsistent with the terms of the Settlement. Thus, the court did not abuse its discretion when it equitably apportioned the available groundwater and placed limits and conditions on future pumping. Furthermore, the court rejected Willis's claims that the limits placed on Willis's post-Settlement participation in the litigation amounted to a denial of due process. The court explained that Willis was afforded an adequate notice and opportunity to present its contentions as part of the lengthy process of crafting the final Physical Solution. View "Willis v. Los Angeles County Waterworks District No. 40" on Justia Law

Under section 225.1.4 of the Torrance Municipal Code, consumers of electricity must pay Torrance a tax on the charges for electricity and ancillary services they use. Edison is required to collect this tax from consumers and remit it to Torrance. Torrance filed suit against Edison after it discovered that Edison had calculated the electricity users' tax as a percentage of the net amount Edison was billing its consumers. However, Torrance contends that the electricity tax ordinance does not permit Edison to apply the IA credit to reduce electricity consumers' tax base, thereby reducing Torrance's tax revenue. The trial court sustained Edison's demurrer to Torrance's original complaint without leave to amend and entered a judgment of dismissal.The Court of Appeal agreed with Torrance that the electricity tax ordinance cannot reasonably be construed in the manner proposed by Edison and adopted by the trial court. However, the court agreed with Edison that Torrance cannot recover unpaid taxes from Edison and must instead amend its complaint to include electricity consumers as defendants. In this case, electricity consumers are liable to Torrance with respect to the taxes owed but not collected by Edison in the past. Therefore, the court explained that Torrance should be allowed to amend its complaint to include as defendants the electricity consumers at issue. Accordingly, the court reversed and remanded for further proceedings. View "City of Torrance v. Southern California Edison Co." on Justia Law

In a prior opinion, a panel of the Court of Appeal determined the tiered water rate system used by the City of San Juan Capistrano (the City) violated the California Constitution. The City offered to refund its water ratepayers the difference between what they paid and what they should have paid for a 10-month period of time, in exchange for a release of other claims against the City related to the tiered water rate system. Plaintiffs Hootan Daneshmand, Brian Montgomery, and John Bottjer were ratepayers in the City. Bottjer signed the release and received a refund; Daneshmand and Montgomery did not. Plaintiffs later filed a notice of claim against the City, on behalf of themselves and a putative class of ratepayers, to recover the difference between what they paid and what they should have paid during the entire time the tiered water rate system was in place. The City denied the notice of claim, which was filed more than one year after the last bill under the tiered water rate system was due, as untimely under Government Code section 911.2. The Court of Appeal determined claims of Bottjer and the other ratepayers who obtained a refund from the City were barred by the release those ratepayers signed. Contrary to Plaintiffs’ arguments on appeal, the release was valid and enforceable. Further, Plaintiffs’ causes of action for breach of contract and breach of the implied covenant of good faith and fair dealing were properly dismissed by the trial court. Finally, the claims of Daneshmand, Montgomery, and the other ratepayers who did not accept the City’s refund offer were barred because the notice of claim was filed more than one year after the claims accrued. Plaintiffs failed to show that waiver or any other legal or equitable doctrine affected the application of Government Code section 911.2 in this case. View "Daneshmand v. City of San Juan Capistrano" on Justia Law