Metropolitan News-Enterprise


Friday, September 12, 2014


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Supreme Court Agrees to Rule on Taxpayer Standing Limits




The California Supreme Court yesterday agreed to decide whether payment of real property taxes is a mandatory prerequisite to the filing of a taxpayer suit against a local government.  

The justices, at their weekly conference in San Francisco Wednesday, voted unanimously to hear the plaintiff’s appeal in Wheatherford v. City of San Rafael (2014) 226 Cal. App. 4th 460. Cherrity Weatherford argues that as a citizen who pays gas and sales taxes and water and sewage fees to the city and to Marin County, she has standing to challenge city and county polices regarding impoundment of vehicles.

Wheatherford contends that she has standing based on Code of Civil Procedure §526a, a statute with early 20th Century roots that allows a suit against a city or county by “a citizen resident therein, or by a corporation, who is assessed for and is liable to pay, or, within one year before the commencement of the action, has paid, a tax therein” to enjoin an unlawful use of public funds.

The First District Court of Appeal, Div. One, ruled that Wheatherford lacks standing under the statute because, as a renter, she pays no property taxes directly to the city or county.

Case Dismissed

A Marin Superior Court judge dismissed Wheatherford’s action after her counsel conceded that standing was foreclosed by Torres v. City of Yorba Linda (1993) 13 Cal.App.4th 1035 and Cornelius v. Los Angeles County etc. Authority (1996) 49 Cal.App.4th 1761, and that the Torres court rejected the argument that limiting standing to property tax payers violates the equal protection guarantees.

Justice Robert Dondero, writing for the Court of Appeal, said Torres and Cornelius were decided correctly and that Tobe v. City of Santa Ana (1995) 9 Cal.4th 1069 does not compel a different result.

In Torres, the court held that the plaintiffs—Anaheim residents who had paid sales taxes, but not property taxes, to Yorba Linda—could not bring a taxpayer suit to challenge a development project in the latter city, nor could they claim standing based on their assertion that they might move to Yorba Linda if they could find quality, affordable housing.

The court focused on the “assessed for and is liable to pay” language of the statute. Because sales taxes are assessed upon, and collected by, retailers, the court reasoned, their payment does not confer taxpayer standing on the consumer, even though the tax is passed on to him or her by the retailer.

The court also concluded that treating property tax payers differently than consumers who pay a sales tax is not an improper wealth-based classification for equal protection principles.  

Prior Ruling

Two years later, the Supreme Court held in Tobe that two homeless taxpayers had standing to challenge a city ordinance limiting the places where persons could camp and store personal goods. But while those plaintiffs obviously didn’t pay property taxes, Dondero explained, the Supreme Court apparently never considered the distinction between property taxes and whatever kind of taxes they did pay.

“As plaintiff acknowledges, cases are not precedent for issues not considered and decided,” Dondero wrote.

Wheatherford, the justice said, did not make a compelling argument that the earlier Court of Appeal cases were wrongly decided. Those decisions, he said, were consistent with the statutory language and legislative intent.

He rejected the argument that requiring payment of a property tax unfairly limits the right to bring a taxpayer suit to wealthy individuals.

“While it is true that persons with limited financial resources will find it difficult to purchase homes in today’s market, it does not follow that home ownership correlates with an individual’s wealth. Many wealthy people do not own homes, preferring instead to rent,” Dondero wrote. “Additionally, it is not a given that all lower income people are renters, as they may have purchased a home many years ago when their incomes were higher or may have inherited their homes from family members.

Lawyer’s Comment

Wheatherford’s lawyer, Mark Clausen, told the San Francisco Chronicle that taxpayer suits should be allowed for anyone who has a “real and substantial attachment” to the defendant entity. If you meet that test, he said, “you’re a contributing taxpayer, so you should have a right to join the debate about what your tax dollars are doing.”

In other conference action, the justices agreed to decide whether defendants against whom attempted murder charges were twice dismissed can be charged with conspiracy to murder in connection with the same incident.

The Fourth District’s Div. Three held in People v. Juarez (2014) 227 Cal. App. 4th 1138 that the new charges were permitted by People v. Traylor (2009) 46 Cal.4th 1205.  

Justice Raymond Ikola acknowledged that the result appears inconsistent with the purposes of Penal Code §1387, which generally bars the refiling of a twice-dismissed felony charge, but said the panel was bound by Traylor, which said that two crimes are the “same offense” referred to in §1387 only if they have identical elements.


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