HomeMy WebLinkAbout0 - Public Comments5�}i ✓aA. A:T i3 vrL
Cc�1� 1A
Comments on October 9, 2012 City Council Agenda Items
Comments by: Jim Mosher (iimmosher(a)vahoo.com ), 2210 Private Road, Newport Beach 92660 (949-
548 -6229)
CLOSED SESSION — 6:00 p.m.
Item B. Conference with Labor Negotiators
This item, which has appeared on every Regular Meeting agenda for well over a year,
announces Council's purported need to privately discuss with the City Manager and
Human Resources Director their negotiations with a long list of "Employee
Organizations," despite public announcements that negotiations with most of these
groups have been successfully concluded. This appears to have become a standing
item, and in a city where the Council's contract with the people says "All meetings ...
shall be open to the public" (Charter Section 409), it would appear to be an abuse of the
very limited privilege granted by the Brown Act to discuss specific, accurately noticed
topics for which there is a clear and compelling public interest in secrecy.
REGULAR MEETING — 7:00 p.m.
Item 1. Minutes for September 12 and September 25, 2012 Meetings
U 1 have submitted separate written comments regarding the draft minutes.
Item 4. Prevailing Wage Exemption
I do not in any way pretend to be knowledgeable about prevailing wage issues, but I find
puzzling and disturbing the statement in the staff report that "Staff will conduct some more
analysis to determine the need for this resolution. In the meantime, the City will continue its
current practices, which is to exempt some projects from prevailing wage requirements."
If it has indeed been the practice of the City, with no local laws to the contrary, to ignore
California prevailing wage laws, then as a non - lawyer reading the July 2, 2012 California
Supreme Court opinion alluded to it in the staff report — State Building and Construction Trade
Council of California, AFL -CIO v. City of Vista (54 Cal.4th 547) — it would appear to me we are
in clear violation of the law and vulnerable to expensive litigation initiated at any moment by any
interested party.
Rather than a matter that should be continued indefinitely, this would seem to be one requiring
urgent action, either to correct the practice or to enact the legislation necessary to justify it.
My reasons for thinking this are as follows
o As I understand it, there are statewide laws establishing prevailing wage requirements,
in particular, in the California Labor Code.
October 9, 2012 Council Meeting agenda comments by Jim Mosher Page 2 of 4
In purely municipal affairs, Newport Beach's charter city status gives it the right to enact
local laws differing from the general statewide laws, but in the absence of such local
laws it does not, as far as I know, give Newport Beach the right to ignore state laws.
In the California Supreme Court ruling mentioned above, the City of Vista was found to
have the right to pay less than prevailing wages on locally funded city projects because it
had enacted an ordinance conflicting with the state law and because 5 of the 7 Supreme
Court justices found the payment of wages for public works projects funded purely with
local funds to be a municipal affair (a finding the other two strongly disagreed with). The
existence of a conflicting local ordinance was required because in its absence the Court
found "the state's prevailing wage law does not exempt charter cities' (page 560).
o Vista not only had an ordinance conflicting with state law, but also a city charter
provision exempting it from statewide public contracting laws unless explicitly adopted by
the City Council: "Section 300. Public Works Contracts. The City is exempt from the
provisions of all California statutes regulating public contracting and purchasing except
as provided by ordinance or by agreement approved the City Council. The City shall
establish all standards, procedures, rules or regulations to regulate all aspects of public
contracting. "
Although the people of Newport Beach have, through Charter Section 200, given the
City Council wide latitude to enact laws differing from those of the state legislature, the
Council has not yet, to the best of my knowledge, enacted any ordinance conflicting with
the prevailing wage provisions of the California Labor Code. As a result, it is very
difficult to see how City staff is currently free, as the staff report says it does, to ignore
state laws explicitly applying to charter cities and "exempt some projects from prevailing
wage requirements." Indeed, the California Supreme Court ruling suggests that
exempting projects in the absence of a local law justifying the exemption is a clear
violation of the state law.
Item 7. Acquisition of Non - Conforming Property at 1499 Monrovia Avenue
o It seems disingenuous that no mention is made in the staff report that the use of an
easement across this property, which would eliminate a substantial part of the parking
serving the present use, is necessary to extend 15th Street to connect with the new "Bluff
Road" proposed by the adjacent Newport Banning Ranch (NBR) developer.
® It also seems odd that we would need a site for a community center when we already
have one on the same street and appear to be planning to construct another one at the
Corporate Yard, nearby.
® If this acquisition is indeed required to facilitate or serve the NBR development, it would
seem the developer should be sharing in the cost, or providing the amenities on their
own land.
October 9, 2012 Council Meeting agenda comments by Jim Mosher Page 3 of 4
Item 11. Newport Beach Restaurant Week Marketing Services Agreement
• As I have commented many times before, if it is legally possible for them to do so I
welcome the City's interested restaurant owners in joining together in a joint marketing
effort, but I do not believe the City (and taxpayers) should have any involvement in this
enterprise.
As indicated in the staff report, major funding for Restaurant Week comes from the
Restaurant "Business Improvement District," which is, in turn, funded both by taxpayer
"matching" funds and involuntary levies on all food serving businesses in Newport
Beach. Yet Restaurant Week benefits only the tiny minority of those who pay an extra
buy -in fee to the marketing firm. And even if the others (such as supermarkets, bakeries
and fast food chains) did choose to buy in, it is not structured to benefit them, and
indeed it seems intended to lure business away from them. Yet they, and the City's
taxpayers, are the ones who pay to put on Restaurant Week. This is crony capitalism at
its worst.
Item 12. Amend and Re- Affirm Council Investment Policy (F -1).
With regard to the summary of changes highlighted in the staff report:
• Under "Section H.4. Investment Parameters - Competitive Transactions" the reference to
the City investing in mortgage backed securities might raise some eyebrows.
• Under "Section I. Portfolio Performance" it is unclear why taxpayers would be interested
in anything other than the performance of their investments "net of fees." A large return
eaten away by large fees is not a large return.
Under "Section K.1. Investment Policy Compliance" there is a question of timeliness.
The promise to share credit alerts with the Finance Committee is fine, but the Finance
Committee now meets only quarterly. Would a special meeting be called to review a
credit alert?
As to the substance of the redlined version:
• In the - proposed "Section K.I. Investment Policy Compliance" there is, at the end, a
dangling reference to the "Finance Director" that was probably meant to be, but has not
been, crossed out. Also, on page 13, Section H.3 says "The City Council will be advised
of the situation and intended course of action." This seems mildly inconsistent with the
present section which says only the Finance Committee will be informed of instances of
non - compliance.
In the proposed "Section K.2. Investment Policy Adoption" it is unclear why the word
"only" is included in the directive "The Finance Director shall review the Investment
Policy with City Council at a public meeting only if there are changes recommended to
the Investment Policy." I should think the full Council would want to retain the right to
.,call up" the City's Investment Policy for review at any time, not just when the Finance
October 9, 2012 Council Meeting agenda comments by Jim Mosher Page 4 of 4
Committee or the Finance Director recommends a change. That is, public review should
be mandatory when a change is recommended and optional at all other times. Omitting
the "only' would achieve that.
Item 14. Annual Review of Agreement for Sober Living by the Sea
Since it affects property in the Coastal Zone, I believe this agreement, made pursuant to
California Government Code Sections 65864 - 65869.5, needs to be reviewed and approved by
the California Coastal Commission.
Item 15. Commercial Lease Template
To some, Council and staff might seem to be speaking out of both sides of their mouths, for the
present report suggests good faith negotiations about marina rental fees are continuing with
"stakeholders," yet at the same time staff and Council are, in November 6's Measure EE,
proposing a Charter Amendment that would bar those stakeholders from filing a class claim if
they are unhappy with the result.
Item 16. Memorial Bike Ride,.Waiver of Fees, Bike Safety Improvement
Fund
Unless the money is being funneled through a private group (which is not clear from the
report), the concept of the City "waiving" fees that it would impose on itself is difficult for
me to fathom. I assume this means only that (per page 3) the costs in staff time, and
possibly other expenditures required to put on the fund raising event, will be regarded as
part of the City's contribution to match the private donations.
a It is also unclear from the report if the resulting funds placed in the proposed( ?) "Bike
Safety Improvement Fund" will be regarded as a dedicated Capital Improvement Fund
subject to the restrictions of City Charter Section 1113. If so, Council should be enacting
an ordinance to create it.
°`I~ECEIVE Af7 AG ��A
FRIP�TEB:" .
Draft Minutes for September 11 & 25, 2012 (October 9 Agenda Item 1)
The following are typos and possible errors noticed in the Draft Minutes for the September 11 & 25
Council Meetings, being considered for approval as Agenda Item 1 on October 9, 2012. Suggestions
submitted by Jim Mosher ( iimmosher(a),vahoo.com ; (949) 548 -6229)
September 12, 2012 - Special Meeting
Volume 60 - Page 585 (third.full paragraph)
e "Jim Walker, President of the Newport Beach Resident Restaurant Association, expressed...
Volume 60 - Page 586
(fifth paragraph)
"STET hoped that Council will consider the issue carefully."
o STET —"let it stand"-- most likely means a name had been crossed out incorrectly?
(second paragraph from end)
that no business owner could sustain with the proposed fee increases."
o Should "sustain" read "survive "?
September 25, 2012 - Regular Meeting
Volume 60 - Page 591
(After the firstfzdl paragraph, a public comment has been omitted at the end ofStady Session Item II2, and
just before Item Q.3)
G "Jim Mosher noted the consultant had placed Council members in the highest band
of executive compensation, questioned how this could be reconciled with a City
Charter that provides the Council members shall receive no compensation for their
service, noted the consultant included benefits in total compensation and referenced
a letter the authors of the Argument Against Measure EE received from City staff
threatening them with litigation for describing benefits as part of compensation."
(second to last line offirst paragraph under "3.')
® '...but when responding; —there are limitations..." (delete';;")
(last paragraph)
o "Jim Mosher beta„- at the response ten ndatien n4 will - not -ti
be implemented
' h-1 , stated that Recommendation R2 states that it has not been
implemented but may be considered in the future, and suggested that the same wording be used
for Recommendation RI match that of Reeommendation R2."
Volume 60 - Page 593
(content missing at bottom ofpage)
E. PUBLIC EMPLOYEE PERFORMANCE EVALUATION (Government Code § 54957)
Title: Aaron C. Harp, Citv Attornev
Corrections to October 9, 2012 Council Agenda Item 1; page 2 of 5
Volume 60 - Page 594 (in Coast Colleges' presentation)
• (line 7): " community colleges than they have in the past,"
• (line 8): " ...that community eollege colleges trains nearly 80% ..."
Volume 60 - Page 595
first full paragraph, line 4)
a '`...where he was &rmerly formally installed as President
(second full paragraph, second to last line)
a "...installing been boom technology ..."
Volume 60 - Page 597 (paragraph under "3.')
a "... Code was a
issued, and that he believe -that believes the Fire Department..."
Volume 60 - Page 598 (third paragraph under "PUBLIC COMMENTS)
a "Denise Denys Oberman..."
Volume 60 - Page 599
(line 3)
a "NAIAle Novell Hendrickson commented ..." (note: this should also be preceded by a blank line)
(second paragraph fro n end)
a `...FAA and Traeou TRACON ..." (acronym for "Terminal Radar Approach Control')
Volume 60 - Page 600
(firstporagraphunder "14.')
a "...development of Mariner's Paint Pointe ...
(first paragraph under "15. ", line 2)
• `...the Citizens Advisory Panels Panel (CAP) meetings..."
Volume 60 - Page 601 (sixth paragraph)
a "Denise Denvs Oberman..."
Volume 60 - Page 602
(line 2)
a `...the plan will erase require a disclosure..."
(second paragraph)
a "Unlfnown An unidentified speaker opposed ...
(last paragraph before close of hearing)
a "WA.DildingDildinenoted..."
(third line ofparagraph at start of hearing)
a `...area is in an advanced set state of decline a ..."
(fourth linefrom end ofsame paragraph)
a `...enhance a sense of place for the Balboa Village, ..."
Volume 60 - Page 603
(third paragraph)
"Motion by Council Member Hill, seconded by Council Member Henn to a) adopt attached
Resolution No. 2012 -84 approving the Balboa Village Implementation Plan consistent with the
recommendations of the Neighborhood Revitalization Committee and finding that the ..." ( ? ?)
Corrections to October 9, 2012 Council Agenda Item I; page 3 of 5
o The preceding description of the motion voted upon does not match the minutes which say
Council Member Hill moved to accept the recommended action with "Implementation
Plan" changed to "Master Plan" and deletion of the RV Park.
(first paragraph under "16 ' )
a `...Director Brandt reported that the annual agreement ..."
Volume 60 - Page 604
(fifth paragraph front end)
• (line 2) "...hoped that the issues can be resolved ..."
• (line 4) "...requiring owners to q*" Agil claim the docks ..."
(third paragraph from end)
a (line 2)" ... equates to an imminent eminent domain,..."
(second paragraph from end)
• (line ]) "Sherman S" Stacey ..."
• (line 2) "...the rent is menopelist monopolistic, ...
Volume 60 - Page 605
(second full paragraph)
• "Scott Sehett Schock expressed opposition to the proposed lease agreement. Gary McKitterick
implored ..." (Gay McKitterick should start on a new line)
(sixth paragraph)
• "An unknown Unknown speaker opposed to the proposed lease template..."
Volume 60 - Page 606
"Motion by Council Member Henn, seconded by Council Member Daigle to adopt the
Resolution No. 2012 -86, approving a model lease template for commercial marinas located upon
City administered tidelands."
o I believe this is incorrect. My understanding is the motion was to continue consideration of
Resolution No. 2012 -86 to a special meeting.
(second paragraph from end)
• "Council Member Selich stated that both options, that being a hotel or apartments, should be
considered."
Volume 60 - Page 607
(fourth run - together paragraph)
• "Denise Denys Oberman..." (this should be preceded by a blank line)
(seventh paragraph)
• "Brian Z Michael Brant- Zawadzki addressed a vole-anized Balkanized approach in to decision
making...'
Volume 60 - Page 608
(fifth paragraph)
a "Mayor Gardner noted that Mr. Nichols was considered a City employee when on the Council,
noted that all groups are contributing more towards their pensions as �� compared to
previous years..."
CorTections to October 9, 2012 Council Agenda Item 1; page 4 of 5
The minutes for Item 21 are impossible to follow without identifying the issue being discussed. 1 would
suggest:
Mayor Gardner introduced Recommendation 21a: Should Harbor Resources staff and /or
the Harbor Commission pursue regulations or education efforts regarding Stand -Up
Paddleboardin2 in the Harbor?
Council Member Daigle addressed public comments received on the issue noting differing
opinions, stated..."
Volume 60 - Page 609
The two motions are listed out ofseguence. I believe it should read something like this:
Doug West, Chair of the Harbor Commission, stated that the Harbor Commission will not approach
this in a regulatory framework, indicated that he believe believes that a problem does not exist, and
stated that if Council directs the Harbor Commission to address this, they will.
Motion by Council Member Selich. seconded by Council Member Rosansky to do nothing
relative to recommendation 21 a.
The motion carried by the following roll call vote:
Mayor Gardner introduced Recommendation 21b: Should the City pursue an amendment
to the Municipal Code that requests that the military provide notice of any non - emergency
flyover in the community?
Council Member Rosansky stated that this is a solution looking for a problem and believed that the
matter is not an issue to be considered.
Motion by Council Member Rosansky. seconded by Council Member Henn to do nothing
relative to recommendation 21b.
The motion carried by the following roll call vote:
rights -of -way, such as in Santa Ana Heights Newport Shores and more?
Assistant City Manager Badum presented information on encroachments including the types of
encroachments and related permits needed, as well as the current implementation program and
current issues.
Corrections to October 9, 2012 Council Agenda Item 1; page 5 of 5
Volume 60 - Page 610
(second paragraph)
• "Jim Mosher referenced the local appointments list, stated that it needs to be cleaned up, and
expressed concerns regarding the Task Force not being subject to the Brown Act."
(MOTION FOR RECONSIDERATION)
The draft minutes are missing the motion to reconsider, which passed unanimously before the
revote on Item 15.
As when originally mentioned at Volume 60 - Page 603, 1 don't think the motion regarding Item 15
is correctly stated. I believe the motion was to accept the recommendation with "Implementation
Plan" changed to "Master Plan" and the RV Park deleted.
Volume 60 - Page 611
The minutes normally include, between "XIX. ADJOURNMENT" and the line where "Recording
Secretary" signs, a statement as to when the agenda and supplemental agenda were posted.
That statement is missing in the draft minutes.
Ow, commto-
Le-X]S.Nexis ..
ESTUARDO ARDON, Plaintiff and Appellant, v. CITY OF LOS
ANGELES, Defendant and Respondent.
5.174507
SUPREME COURT OF CALIFORNIA
52 Cal. 4th 241; 255 P.3d 958; 128 Cal. Rpir. 3d 283; 2011 Cal.
LEXIS 7681
July 25, 2011, Filed
SUBSEQUENT HISTORY: Reported at Ardon.
(Estuardo) v. City of Los Angeles, 2011 Cal.
LEXIS 8082 (Cad., Judy 25, 2011)
PRIOR HISTORY:
Superior Court of Los Angeles County, No.
BC363959, Anthony J. Mohr, Judge. Court of
Appeal, Second Appellate District, Division
Three, No. B201035.
Ardon v. City ofLos Angeles, 174 Cal. App, 41h
369, 94 Cal. Rptr. 3d 245, 2009 Cal, App. LEXIS
860 (Cal. App. 2d Dist, 2009)
SUMMARY:
CALIFORNIA OFFICIAL REPORTS
SUMMARY
Plaintiff filed a class action lawsuit
challenging a city's telephone users tax (TUT)
and seeking refund of funds collected under the
TUT over the previous two years. The trial court
granted the city's motion to strike all class
allegations. (Superior Court of Los Angeles
County, No. BC363959, Anthony .1. Mohr,
Judge.) The Court of Appeal, Second Dist., Div.
Three, No. B201035, affirmed the trial court's
order refusing to certify the class.
The Supreme Court reversed thejudgment of
the Court of Appeal and remanded the case for
further proceedings. The court held that a class
claim by taxpayers for a tax refund against a
local governmental entity is permissible under
Gov. Code, § 910, in the absence of aspecific tax
refund procedure set forth in an applicable
governing claims statute. Although Cal. Const.,
art. X111, § 32, prevents courts from expanding
the methods for seeking refunds expressly
provided by the Legislature, neither Woosley v.
State of California, which concerned the
interpretation of statutes other than § 910, nor
art. X111, § 32, applies to the determination of
whether § 910 permits class claims that seek the
refund of local taxes. The important public policy
behind art. XIII, § 32, is to allow revenue
collection to continue during litigation so that
essential public services dependent on the funds
are not unnecessarily interrupted. However, this
policy does notjustify precluding legitimate class
Proceedings for the refund of allegedly illegal
taxes and was satisfied here because § 910
allowed the present taxpayer class claim.
(Opinion by Chin, J., with Cantil- Salcauye, C. J.,
Kennard, Baxter, Werdegar, Corrigan, JJ., and
Jackson, J.," concurring.) [*2421
* Associate Justice of the Court of
Appeal, Second Appellate District,
Division Seven, assigned by the Chief
Justice pursuant to article VI, section 6 of
the California Constitution.
HEADNOTES
CALIFORNIA OFFICIAL REPORTS
HEADNOTES
(1) Taxpayers' Remedies § 6 - -Tax Refunds- -
Claims.- -Gov. Code, ¢910, does not specifically
apply to tax refunds, but to all claims against
govermnental entities.
(2) Taxpayers' Remedies § 6- -Tax Refunds- -
Claims.- -Gov. Code, § 905, subcl. (a), exempts
from Gov. Code, § 910, claims under the
Revenue and Taxation Code or other statute
prescribing procedures for the refund of any tax.
(3) Taxpayers' Remedies § 6 - -Tax Refunds- -
Claims-- Statutory Requirements -- Substantial
Compliance. - -A two -part test has been adopted
for determining whether a claim against a
government entity satisfies Gov. Code, § 910: is
there some compliance with all of the statutory
requirements; and, if so, is this compliance
sufficient to constitute substantial compliance?
(4) Taxpayers' Remedies § 6- -Class Claims- -
Claimants.-- With respect to class claims under
Gov. Code, § 910, the word "claimant" refers to
the class itself, not to an individual class
member.
(5) Taxpayers' Remedies § 6- -Class Claims- -
Identifying Information -- Substantial
Compliance.- -Gov. Code, § 910, was not
intended to thwart class relief. Because
satisfaction of § 910's procedural requirements
obliges a representative class plaintiff to supply
information detailing his or her name, address,
and other specified information, any information
beyond this requirement to identify the class
itself is sufficient to satisfy the "some
compliance" test. Beyond this, the sufficiency of
the identifying information must be measured by
the substantial compliance test. A claim
substantially complies with a claims statute if the
parties have stated sufficient information to
reasonably enable the public entity to make an
adequate investigation of the merits of the claim
and to settle it without the expense of a lawsuit.
(6) Taxpayers' Remedies § 6 - -Tax Refunds- -
Procedure,- -Cal. Const- art, X111, §32,compels
an action for tax refunds against the state to be
brought in the manner that the Legislature
specified under the statutes at issue.
(7) Taxpayers' Remedies § 6 - -Tax Refunds- -
Class Action Claims.- -The Supreme Court's
holding in City of San Jose v. Superior Court
should not be extended to include claims for tax
refunds. However, the Supreme Court did not
mean that City ofSan Jose forbids all class action
claims [ *2431 for tax refunds; rather, Woosley
v. State of California precludes class claims for
tax refunds where the Legislature has explicitly
set forth procedures for obtaining those refunds
and has refused to authorize class claims under
those procedures.
(8) Taxpayers' Remedies § 6 - -Tax Refunds- -
Class Action Claims -- Filing of Administrative
Refund Claim - -Local Public Entities.--With
respect to a refund of locally adopted taxes, the
Supreme Court specifically disagrees with the
overbroad statement that class- action -type
lawsuits seeking a refund of fees and taxes are
barred unless each plaintiff has first filed an
administrative refund claim with the city. The
statement is especially incorrect as applied to
claims against local public entities that are not
governed by specific tax refund statutes.
(Disapproving to the extent inconsistent:I7oward
Jarvis Taxpayers Assn. v. City of Los Angeles
(2000) 79 Cal.App.4th 242 (93 C'a1.1?p1r.2c1
7421.)
(9) Taxpayers' Remedies § 6 - -Tax Refunds- -
Class Action Claims. - -A class claim by
taxpayers for a tax refund against a local
governmental entity is permissible under Gov.
Code, § 910, in the absence of a specific tax
refund procedure set forth in an applicable
governing claims statute.
(10) Taxpayers' Remedies § 6- -Tax Refunds- -
Class Action Claims. - -Ali that Woosley v. State
of California demands is that a court first
examine the claims statutes at issue in a claim for
a taxpayer refund to determine whether the
Legislature contemplated a class claim under the
applicable California code.
(11) Taxpayers' Remedies § 6 - -Tax Refunds- -
Class Action Claims - -Local Public Entities.- -
Class claims for taxpayer refunds against local
governmental entities brought under Gov. Code,
¢ 910, are permitted in California.
(12) Taxpayers' Remedies § 6 - -Tax Refunds- -
Class Action Claims - -Local Telephone Use
Tax. - -Cal. Const., art. XIII, § 32, simply
prohibits courts from preventing or enjoining the
collection of any tax during the pendency of
litigation challenging the tax. Article XIII, § 32,
does not purport to limit a court's authority to
fashion a remedy if it determines a tax is illegal,
including its authority to issue an injunction
against further collection of the challenged tax.
The important public policy behind arl. XIII, §
32, is to allow revenue collection to continue
during litigation so that essential public services
dependent on the funds are not unnecessarily
interrupted. This policy is intended to ensure the
uninterrupted flow of tax revenue, so that refunds
that are authorized must be processed in orderly
procedures that the Legislature allows. [ *244]
That policy favoring fiscal responsibility,
however, does not justify precluding legitimate
class proceedings for the refund of allegedly
illegal taxes. Thus, Gov. Code, § 910, allowed a
taxpayer class, claim challenging a city's
telephone users tax (TUT) and seeking refund of
funds collected under the TUT.
[Cal. Forms ofPleoding and Practice (2011)
ch. 464, Public Enloies and Officers: California
Tort, Claims Act, § 464.23; 9 Witkin, Summary of
Cal. Law (1 Oth ed. 2005) Taxation, §§ 292, 297;
3 Witkin, Cal. Procedure (5th ed. 2008) Actions,
§ 239.]
COUNSEL: Wolf Haldenstei n Adler Freeman &
Herz, Francis M. Gregorek, Rachele R. Rickert;
Cuneo Gilbert & LaDuca, Jon Tostud;
Chimicles & Tikellis, Nicholas E. Chimicles and
Timothy N. Mathews for Plaintiff and Appellant.
Wolf Haldenstein Adler Freeman & Herz,
Francis M. Gregorek, Rachele R. Rickert; Cuneo
Gilbert & LaDuca, Jon Tostrud; Chimicles &
Tikellis and Timothy N. Mathews for Willy
Granados and Jon W. McWilliams as Amici
Curiae on behalf of Plaintiff and Appellant.
Patricia Sturdevant; Wilentz, Goldman &
Spitzer, Kevin P. Roddy; and Timothy Bittle for
NASCAT, Howard .Jarvis Taxpayers Association,
Consumer Federation of California and Utility
Reform Network as Amici Curiae on behalf of
Plaintiff and Appellant.
Patricia Sturdevant; Shepherd, Finkehnan, Miller
& Shah, Patrick A. Klingman; Huskinson,
Brown, Heidenreich & Carlin and Paul E.
Heidenreich for Consumer Action, Consumer
Federation of California and NASCAT' as Amici
Curiae on behalf of Plaintiff and Appellant.
Edward IA. Teyssier; and Joseph D. Henchman
for the Tax Foundation as Amicus Curiae on
behalf of Plaintiff and Appellant.
Alan M. Mansfield for Utility Consumers' Action
Network as Amicus Curiae on behalf of Plaintiff
and Appellant.
Rockard J. Delgadillo and Carmen Trutanich,
City Attorneys; Noreen S. Vincent and Michael
Nagle, Assistant City Attorneys, Brian I. Cheng,
Deputy City Attorney; Orrick Herrington &
Sutcliffe, William Molinski, Valerie M. Goo,
Frank D. Rorie; Colantuono & Levin, Michael G.
Colantuono, Sandra J. Levin, Amy C. Sparrow
and Erwin M. Benedicto for Defendant and
Respondent.
Dennis J. Herrera, City Attorney (San Francisco),
Julie Van Nostern, Chief Tax Attorney, and Peter
J. Keith, Deputy City Attorney, for League of
California [ *245] Cities, California State
Association of Counties and California Special
Districts Association as Amici Curiae on behalf
of Defendant and Respondent.
Raymond G. Fortner, Jr., County Counsel (Los
Angeles) and Albert Ramseyer, Principal Deputy
County Counsel, for the County of Los Angeles
as Amicus Curiae on behalf of Defendant and
Respondent.
JUDGES: Opinion by Chin, J., with Cautil-
Sakauye, C. J., Kennard, Baxter, Werdegar,
Corrigan, JJ., and Jackson, J., concurring.
OPINION BY: Chin
OPINION
1** *2851 [* *960] CHIN, J. - -In this case,
we must decide whether Government Code
section 910 (section 910) ' allows taxpayers to
file a class action claim against a municipal
governmental entity for the refund of local taxes.
L1 City of San Jose v. Superior Court (1974) 12
Cal.3d 447, 455 [115 Cal. Rptr. 797, 525 P.2d
7011(Cily of San Jose), we held that section 910
permits a litigant to bring a class claim against a
local government. We later held in Woosley v.
Stale of California (1992) 3 Cal.4ih 758, 792 [13
Cal. Rpir. 2d 30, 838 P.2d 758] (Woosley),
however, that class claims to recover tax refunds
are not permitted in certain situations because
article XIII, section 32 of the California
Constitution prevents the judiciary "from
expanding the methods for seeking tax refunds
expressly provided by the Legislature." As we
explain, neither Woosley, which concerned the
interpretation of statutes other than section 910,
nor article .X111, section 32 of the California
Constitution, applies to our determination of
whether section 910 permits class claims that
seek the refund of local taxes. We therefore
conclude that the reasoning of City of San Jose,
which permitted a class claim against a
municipal government in the context of an action
for nuisance under section 910, also permits
taxpayers to file a class claim seeking the refund
of local taxes under the same statute.
I All statutory references are to the
Govenunent Code unless otherwise noted.
FACTS AND PROCEDURAL
BACKGROUND
Plaintiff Estuardo Ardon (Ardon) is a resident
of defendant City of Los Angeles (City). In
October 2006, Ardon filed a class action lawsuit
on behalf of himself and similarly situated
individuals challenging the City's telephone users
tax (TUT) and seeking refund of funds collected
under the TUT over the previous two years.
Ardon asserted that the City's municipal code
exempts all amounts paid for telephone service
from the TUT to the extent that those amounts
are also exempt from the federal excise tax
(FET). Ardon contends that since the FET was
improperly collected, so too was the TUT. In
December 2006, Ardon received a notice from
the Los Angeles City Attorney rejecting his
attempt to present a tax refund claim on behalf of
a class due to tack of tegal standing. [ *2461
Ardon's complaint against the City sought,
inter alia, injunctive and declaratory relief to
prevent continued unlawful collection of the
TUT, declaratory relief alleging the
unconstitutional amendment of the TUT by the
Los Angeles City Council, ' money had and
received in unjust enrichment, and violation of
the due process clauses of the Fourteenth and
Fifth Amendments to the United Slales
Constitution.. [ ** *286] The complaint sought
[* *961] certain remedies, including certification
as a class action, an accounting of the TUT funds
collected by the City, and return of money
wrongfully taxed.
2 Subsequent to Ardon's filing his
complaint, the City amended Los Angeles
Municipal Code section 21.1.3 to remove
all references to the FET. The city council
passed the amendment to the ordinance on
January 9, 2007. (L.A. Ord. No. 178219.)
In the Court of Appeal, the City contended
that Ardon must 'file the refund claim
under Los Angeles Municipal Code
section 21.07 and former section 21.1.2
governing claims for refund of
overpayment of business or use taxes. As
the court observed, however, those code
sections do not apply to Ardon's claim that
the City's TUT was an illegal tax. The City
does not renew its claim here. Therefore,
we do not address any issues involving
preemption of the municipal code
provisions in this case.
The City demurred to Ardon's complaint and
moved to strike all class action allegations on the
grounds that Woosley prohibited Ardon from
filing a claim against the City for the refund of
taxes on behalf of a putative class. Instead, the
City argued, each rneinber° of the alleged class
must file a government claim with the City
before Ardon could proceed with a class action
lawsuit. The superior court granted the City's
motion to strike all class allegations. It also
partially overruled and partially sustained the
demurrer without leave to amend, and stayed
other causes of action. Ardon filed a timely
appeal from the interlocutory order striking the
class allegations.
A divided Court of Appeal affirmed the trial
court's order refusing to certify the class. In so
doing, the panel specifically rejected its own
reasoning and contrary holding in a factually
similar case, County of Los Angeles v. Superior
Court (2008) 159 Cal.App.4th 353 [71 Cal. Rpir.
3d 485] (Oronoz). The Court of Appeal dissent
would have 'followed the opinion in Oronoz,
which held that under City of San Jose's
construction of section 910, a "claimant" could
be an entire class as well as an individual.
(Oronoz, supra, atp. 367.) We granted review to
resolve the conflict in the appellate courts
regarding permissible class claims tinder section
910.
DISCUSSION
Before 1959, taxpayer and other claims
against the state, local, and municipal
governments were governed by nryriad state
statutes and local ordinances. Finding this system
too complex, the Legislature enacted the
Government Claims Act (the Act), which
established astandardized procedure forbringing
claims againstlocal governmental entities. (Stats.
1959, [ *247] ch. 1724, § 1, p. 4133, enacting
Gov. Code, former § 700 etseq. [replacing more
than 150 separate procedures for directing claims
against local governmental entities]; now SS 900
el seq.)'
3 Section 910 states: "A claim shall be
presented by the claimant or by a person
acting on his or her behalf and shall show
all of the following: [¶] (a) The name and
post office address of the claimant. [T (b)
The post office address to which the
person presenting the claim desires notices
to be sent. [T (c) The date, place and other
circumstances of the occurrence or
transaction which gave rise to the claim
asserted. [1] (d) A general description of
the indebtedness, obligation, injury,
damage or loss incurred so far as it may be
known at the time of presentation of the
claim. [TI] (e) The name or names of the
public employee or employees causing the
injury, damage, or loss, if known. [¶] (1)
The amount claimed if' it totals less than
ten thousand dollars ($ 10,000) as of the
date of presentation of the claim ...
together with the basis of computation of
the amount claimed. If the amount claimed
exceeds ten thousand dollars ($10,000), no
dollar amount shall be 'included in the
claim. However, it shall indicate whether
the claim would be a limited civil case."
(1) Section 910 does not specifically apply to
tax refunds, but to all claims against
governmental entities. (See City of San Jose,
supra, 12 Cal.3d alp. 454.) The purpose of the
claims statutes "is to provide the public entity
sufficient information to enable it to adequately
investigate claims and to settle them, if
appropriate, without the expense of litigation."
(Id. at p. 455.) As originally proposed, the
standardized procedures of [ ** *287] the Act
embodied in section 910 would not have applied
to "[c]laims under the Revenue and Taxation
Code or other provisions of law prescribing
procedures for the refund ... of any tax ... ."
(Recommendation and Study relating to The
Presentation of Claims Against Public Entities
(Jan. 1959) 2 Cal. Law Revision Com. Rep.
(1959) p. A -12, italics added [proposed former §
703, subd. (a)].) (2) However, the Legislature
specifically rejected this proposal and instead
enacted former section 703, subdivision (a) (now
§ 905, subd. (a)), which exempted from section
910 "[c]laims under the Revenue and Taxation
Code or other statute prescribing procedures for
the refund ... of any tax ...." (Stats. 1959, eh.
1724, § 1, pp. 4133 -4134, italics added.)
(3) The issue in City ofSan Jose was whether
a class claim could satisfy the claim requirements
of section. 910, or whether such class [* *962]
action claims could not be maintained against
governmental entities. (City of San Jose, supra,
12 Cal.3d at p. 455.) The plaintiffs had filed a
class claim against the City of San Jose under
section 910, alleging that aircraft noise, dust,
vapors, and vibrations arising from operations at
the San Jose Municipal Airport were a nuisance
and diminished the market value of their
property. (City ofSan Jose, al pp. 453, 455.) This
court adopted a two -part test for determining
whether the claim satisfied section 910: "Is there
some compliance with all of the statutory
requirements; and, if so, is this compliance
sufficient to constitute substantial compliance ?"
(City of San Jose, at pp. 456 ?457.) [ *248]
(4) In addressing the section 910 class claim,
City of Scan Jose concluded that the word
"claimant" referred to "the class itself," not to an
individual class member. The court "reject[ed]
the suggested necessity for filing an individual
claim for each member of the purported class."
(City of San Jose, supra, 12 Cal.3d alp. 457.)
The court reasoned that "[t]o require such
detailed information in advance of the complaint
would severely restrict the maintenance of
appropriate class actions -- contrary to recognized
policy favoring them." (Ibid.; see Code C'iv.
Proc., § 382; see also Vasquez v, Superior Court
(1971) 4 C'al.3d 800 [94 Cal. Rptr. 796, 484 P.2d
964].) (5) The court did not believe that section
910 was "intended to thwart class relief." (City of
San Jose, supra, 12 Cal.3d at p. 457.) Because
satisfaction of section 910's procedural
requirements obliged a representative class
plaintiff to supply information detailing his or
her name, address, and other specified
information, any information beyond this
requirement to identify the class itself was
suffrcientto satisfy the" 'some compliance' test."
(City of San ,Jose, supra, 12 Cal. 3d at p. 457.)
?Beyond this, the sufficiency of the identifying
information must be measured by the substantial
compliance test." (Ibid.) A claim substantially
complies with a claims statute if the parties have
stated sufficient information "to reasonably
enable the public entity to make an adequate
investigation of the merits of the claim and to
settle it without the expense of a lawsuit." (Id at
p. 456.)
(6) Woosley was a constitutional challenge to
the state's vehicle license fees and use taxes
imposed on passenger vehicles sold outside
California. The numerous issues included the
question of whether the trial court had erred in
certifying the claim as a class claim. Woosley
held that article XIII, section 32 ofthe California
Constitution compelled an action for tax refunds
against the state to be brought in the [ ** *288]
manner that the Legislature specified under the
statutes at issue. (Woosley, supra, 3 Cal. 4th atp.
789.) a The court concluded that statutes dictating
the procedural requirements for obtaining
refunds of vehicle license fees and use taxes did
not authorize class action claims. (Woosley, at p.
788; see Veh. Code, § 42231; Rev. & Tax. Code,
§ 6901 et seq., 6486.) Rather, the language of
those statutes indicated that "a claim for a refund
of vehicle license fees must be filed by 'the
person who has paid the erroneous or excessive
fee or penalty, or his agent on. his behalf' ...
[T]he term'person' does not include a class, and
a class representative who files a claim on behal f
of all others similarly situated, without the
knowledge [ *2491 or consent of such other
persons, is not the agent of the members of the
class." (Woosley, supra, at p. 790, citation
omitted, quoting Veh. Code, § 42231.) Because
article XIII. section 32 of the California
Constitution requires tax refund claims to be
made in the specific manner prescribed by the
Legislature, we concluded that the particular
statutes at issue in Woosley did not authorize
class claims.
4 Article XIII, section 32 of the
California Constitution reads, ?No legal or
equitable process shall issue in any
proceeding in any court against this State
or any officer thereof to prevent or enjoin
the collection of any tax. After payment of
a tax claimed to be illegal, an action may
be maintained to recover the tax paid, with
interest, in such manner as may be
provided by the Legislature."
[* *963] Regarding class -based refunds for
use taxes, Woosley observed that "[a]n
examination of the entire statutory scheme that
governed requests for refunds of sales and use
taxes when Woosley's claim was fled in 1977
reveals ... that class claims were not
contemplated. If the [State Board of
Equalization] denied a claim, that entity was
required, within 30 days, to 'serve notice of its
action on the claimant in the manner prescribed
for service of notice of a deficiency
determination.' ([Rev. & Tax. Codej § 6906.)
[Revenue and Taxation Code] fsfection 6486, in
turn, provided in 1977 that the [State Board of
Equalization] shall give written notice of a
deficiency determination'to the retailer or person
storing, using, or consuming tangible personal
property,' either by mail or by'delivering it to the
person to be served.' The language of section
6486 suggests that notice must be given to each
individual taxpayer. No mention is made of
notice to a class representative. The requirement
that notice of the denial of a claim must be given
to each individual taxpayer thus is inconsistent
with the use of a class claim." (YVoosley, supra,
3 Cal. 4th at pp. 790 -791.) Woosley, therefore,
addressed the limited question of whether
Vehicle Code section 42231 and Revenue and
Taxation Code sections 6901 et seq. and 6486
permitted class actions by citizens seeking
refunds of taxes and fees ,fr onz the state. When
construed in light of articleXlll, section 32 o/the
California Conslilulion, we concluded that the
Legislature did not intend to authorize class
claims for the refund of fees and taxes under
those particular statutes. (Woosley, at pp. 789-
792.)
(7) Woosley also stated that "the holding in
City of San. Jose ... should not be extended to
include claims for tax refunds." (Woosley, supra,
3 Col. 4th at p. 789.) However, we did not mean
that City of San Jose forbids all class action
claims for tax refunds; rather, Woosley precluded
class claims for tax refunds where the Legislature
has explicitly set forth procedures for obtaining
those refunds and has refused to authorize class
claims under those procedures. [ ** *289]
Specifically, Woosley criticized "[s]everal
decisions of the Court of Appeal [that] extended
the holding in City of San ,rose to permit tine
filing of class claims seeking tax refunds,
reasoning by analogy to the claims statute
construed in City of San Jose that the existing
ax- refund statutes could and should be
interpreted to authorize the filing of class
claims." (Id. at p. 788, italics added.) It is
important to note that none of the Court of
Appeal [ *250] decisions this court criticized in
Woosley either construed or applied section 910.
(SeeSchoderbekv. Carlson (1980) 113 Cal. App.
3d 1029, 1033 [170 Cal. Rptr. 4007 [property tax
statute]; Lattin v. Franchise Tax Board (1977) 75
Cal. App. 3d 377, 381 [142 Cal. Rptr. 1301
[income tax statute]; Santa Barbara Optical Co.
v. Slate Bd. of Equalization (1975) 47 Cal. App.
3d 244, 249 [120 Cal. Rptr. 6091 [sales tax
statute]; Javor v. State Bd. of Equalization (1977)
73 Cal. App. 3d 939, 948 [141 Cal. Rptr. 226]
[sales tax statute].)
(8) Several cases decided after Uloosley have
concluded that cuticle X111, section 32 of the
California Constitution. bars class claims and
class actions for the refund of locally adopted
taxes absent specific state statutory authority.
(See Batt v. City and County of San Francisco
(2007) 155 Cal.App.4th 65, 74 -75 [65 Cal. Rptr.
3d 716] [sustaining demurrer to plaintiffs class
action challenging city's transient occupancy
hotel tax]; Howard Jarvis Taxpayers Assn. v.
City of Los Angeles (2000) 79 Cal.App.41h 242,
249 [93 Cal. Rpir. 2d 7421 [rejecting taxpayer
suit challenging a municipal home occupation
ordinance]; Neecke v. City of Mill Valley (1995)
39 Cal.App.4th 946, 961 -962 [46 Cal. Rptr. 2d
266] [ rejecting property owner's action
challenging a city property tax].) As Oronoz
observed, however, these cases are
distinguishable, because they all considered
statutes or municipal ordinances enacted to
provide specific procedures for filing tax claims
against governmental entities -- procedures that
are not applicable or required in this case.
(Oronoz, supra, 159Cal.App.4thotp. 365, fn. 9.)
In addition, like the Oronoz court, we specifically
disagree with the overbroad statement in Howard
Jarvis Taxpayers Assn. that "class- action -type
lawsuits seeking a refund of fees and taxes are
barred [* *9641 unless each plaintiff has first
filed an administrative refund claim with the
City." (Howard Jarvis Taxpayers Assn., at p.
249.) The statement is especially incorrect "as
applied to claims against local public entities that
are not governed by specific tax refund statutes."
(Oronoz, supra, at p. 365, fn. 9.)
The Court of Appeal here determined that the
applicable claims statute in the present case is
Government Code section 910. Ardon asserts that
section 910 claims against government entities
are to be presented by the claimant or by a person
acting on his or her behalf and that, as noted
above, in City ofSan Jose this court held that the
word "claimant" in section 910 must be equated
with the class itself and therefore permits the
filing of class claims. Ardon also claims that the
Court of Appeal improperly extended the reach
of cuticle X111, section 32 of the Californian
Constitution "beyond state entities and their
agents to a local government."
(9) By contrast, the City asserts that equating
the term "claimant" with "the class itself' is
inconsistent with the strict compliance standard
set forth in Woosley, supra, 3 Cal. 41h 758, for tax
refund claims. But, as Ardon [ *251] observes,
Woosley does not require strict compliance with
claims statutes in tax refund cases. The case
requires that a court analyze the claims [ ** *290]
statutes before it to determine whether the
Legislature intended to allow class claims under
those statutes. Here, as City of San Jose, supra,
12 Cal. 3d 447, held, a class claim by taxpayers
for a tax refund against a local governmental
entity is permissible under section 910 in the
absence of a specific tax refund procedure set
forth in an applicable governing claims statute.
Contrary to the City's argument, Woosley simply
does not apply here because section 910 allows
the class claim.
(10) Our conclusion recognizes the
limitations of both City of San Jose and Woosley
in addressing the availability of class claims for
the tax refunds in this case. City of San Jose
simply held that section. 910 does not preclude
class claims against government entities. (City of
San. Jose, supra, 12 Cal. 3d a6 pp. 456 -457.) The
action there did not involve a challenge to a local
tax, but instead asserted nuisance and inverse
condemnation claims. (Ibid.) All that Woosley
demands is that a court first examine the claims
statutes at issue in a claim for a taxpayer refund
to determine whether the Legislature
contemplated a class claim under the applicable
California code. (Woosley, supra, 3 Cal.4th at
pp. 790 -792.) The court did not analyze the
applicability of section 910, and, in contrast to
the City's contention, there is no reason to
construe section 910 in light of Woosley. As we
have discussed, the relevant governing claims
statute here is section 910. In contrast to the two
statutes at issue in Woosley, section 910 states
specifically that a "claim shall be presented by
the claimant or by a person acting on his or her
behalf." While the Act contains an exemption for
"[cllaims under the Revenue and Taxation Code
or other statute prescribing procedures for the
refund ... of any tax," the claim here did not
involve any applicable municipal code or statute
governing claims for refunds. (Gov. Code, � 905,
subd. (a), italics added.) Oronoz held that class
claims are permitted under section 910. ( Oronoz,
supra, 159 Cal.App.4th at p. 367.) (11)
Therefore, class claims for taxpayer refimds
against local governmental entities brought under
section 910 are also permitted in California.
In addition, the City contends that article
XIII, section 32 of the California Constitution
mandates that the Legislature must expressly
authorize actions for tax refunds, and section 910
does not expressly authorize class claims. Article
X711, section 32 of the California Constitution
states, "No legal or equitable process shall issue
in any proceeding in any court against this State
or any officer thereof to prevent or enjoin the
collection of any tax. After payment of a tax
claimed to be illegal, an action may be
maintained to recover the tax paid, with interest,
in such manner as may be provided by the
Legislature." Despite the first sentence's
reference to tax actions against the [ *252] state,
the City asks us to read the second sentence of
article XllJ section 32 to also [* *965] preclude
tax actions against local governments in the
absence of express legislative authorization. But
even assuming article XIII, section 32 is equally
applicable to tax actions against local
governments, we have already determined that
section 910 provides the necessary legislative
authorization for class claims of taxpayer refunds
against local governmental entities. Indeed, there
is nothing in the constitutional provision that
would preclude the present action.
(12) The City further asserts that the public
policy underlying article XILI, section 32
precludes the present action. In Woosley, we held
that article XIII, section 32 "rests on the premise
that strict legislative control over the manner in
which tax 1** *2911 refunds may be sought is
necessary so that governmental entities may
engage in fiscal planning based on expected tax
revenues. [Citation]" (Woosley, supra, 3 Cal.4th
at p. 789.) The City argues that this policy is
thwarted where the local government is faced
with a potentially huge liability in the form of a
class action. But article XIII, section 32 simply
prohibits courts from "prevent[ ing] orenjoin[ing]
the collection of any tax" during the pendency of
litigation challenging the tax. (Col. C'onsz., co t.
XIII, § 32.) In fact, article X7II, section 32 does
not purport to limit a court's authority to fashion
a remedy if it determines a tax is illegal,
including its authority to issue an injunction
against further collection of the challenged tax.
As Ardon observes, we have held that the
important public policy behind article XIII,
section 32 " 'is to allow revenue collection to
continue during litigation so that essential public
services dependent on the funds are not
unnecessarily interrupted.' " (State Bd. of
Gyualization v. Satperior Court (1985) 39 Cal. 3d
633, 638 [217 Cal. Rpir. 238, 703 P.2d ]131 J;
quoting Pacific Gas & Electric Co. v. State Bd.
of Equalization (1980) 27 Cal.3d 277, 283 [165
Cal. Rph. 122, 611 P.2d 463).) This policy is
intended to ensure (lie uninterrupted now of tax
revenue, so that refunds that are authorized must
be processed in orderly procedures that the
Legislature allows. That policy favoring fiscal
responsibility, however, does not justify
Precluding legitimate class proceedings for the
refund of allegedly illegal taxes, and is indeed
satisfied here because section 910 allows the
present taxpayer class claim.
CONCLUSION
bVoosley, supra, 3 Cal.4th 758, does not
apply to a potential taxpayer class claim brought
under section 910. In addition, neither the
explicit language nor the policy underlying
article X111, section 32 applies to prevent the
present action. City ofSan Jose, supra, 12 Cal. 3d
447, is entirely consistent ["253] with our
conclusion here. Class claims for tax refunds
against a local govermnerntal entity are
permissible under section 910 in the absence of
a specific tax refund procedure set forth in an
applicable governing claims statute.
Consequently, we reverse the Court of Appeal
judgment, and remand the matter for further
proceedings consistent with our opinion.
Cantil- Sakauye, C. J., Kennard, J., Baxter, J.,
Werdegar, J., Corrigan, J., and Jackson, J.,'
concurred.
* Associate Justice of the Court of
Appeal, Second Appellate District,
Division Seven, assigned by the Chief
Justice pursuant to article V1, section 6 of
the California Constitution.
PON& IMMU4c -
Brown, Leilani
i0+01-
From:
Torres, Michael
Sent:
Friday, June 15, 2012 1:36 PM
To:
Torres, Michael
Cc:
Kiff, Dave; Brown, Leilani; Houston, Rob
Subject:
Class Action Claims (File: Al2 -00220 Charter Update 2012/2013)
CyAutold:
2219918
CycomPath:
C:\cycomsgl\
CyMatterld:
2208262
CyMultiRecMemos:
N
CyStaffld:
MT
Good Afternoon Chairman Watkins & Committee Members,
At yesterday's meeting, the Committee asked for background information regarding the proposed change to Charter
Section 1114 (Claims and Demands.) barring all class action claims relating to taxes and fees. This proposal originates
from a recent California Supreme Court decision involving the City of Los Angeles. (Ardon v. City of Los Angeles (2011)
52 Cal.4th 241.) This case involved a class action lawsuit by a resident seeking a refund of funds collected under the city's
telephone users tax. The city argued that the applicable laws did not allow a class action suit and instead required each
class member to file a claim with the city prior to proceeding as a class. The Court held that, "[c]lass claims for tax
refunds against a local government entity are permissible... in the absence of a specific tax refund procedure set forth in
applicable governing claims statute." (Id. at 253.)
In the wake of this decision, it was recommended that cities adopt provisions expressly barring class claims related to
taxes and fees. The proposed revision to Charter Section 1114 would prohibit class actions related to taxes and fees and
would work in conjunction with the City's Claim Procedure codified in Newport Beach Municipal Code Chapter 1.06.
Thank you,
Michael Torres I Acting - Assistant City Attorney
City of Newport Beach I Office of the City Attorney
3300 Newport Blvd. I Newport Beach, CA 92658
(949) 644-31311 (949) 644 -3139 (FAX) I mtorres(anewoortbeachca.eov
Confidentiality Notice: This email may contain material that is confidential, privileged and /or attorney work product for the sole use of the addressee. Further, this
email is protected under the Electronic Communications Privacy Act, 18 U.S.C. Sections 2510 -2522. Any review by, reliance, or distribution by others or forwarding to
others without express permission of the author is strictly prohibited. If you receive this transmission in error, you are advised that any disclosure, copying,
distribution, or the taking of any action in reliance upon the communication is strictly prohibited. Moreover, any such inadvertent disclosure shall not compromise or
waive the attorney - client privilege as to this communication. If you have received this communication in error, please immediately notify the sender and delete this
e -mail. Thank you.