Metropolitan News-Enterprise


Friday, May 23, 2014


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Court of Appeal Reaffirms Limitation on Taxpayer Standing




Only a person who pays real estate taxes has standing to bring a taxpayer action under Code of Civil Procedure §526a, the First District Court of Appeal district ruled yesterday.

Citing two previous Court of Appeal decisions, the panel held that a San Rafael resident’s payment of gas and sales taxes and water and sewage fees did not give her standing to challenge city and county polices regarding impoundment of vehicles. A state Supreme Court decision cited by her counsel isn’t controlling because it did not address the precise issue, Justice Robert Dondero said.

A Marin Superior Court judge dismissed Cherrity Wheatherford’s action, based on the plaintiff’s concessions 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.

Prior Cases

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 cited §526a’s requirement that a plaintiff have paid a tax that the person was “assessed for and is liable to pay,” in order to have standing under that section. 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.  

Homeless Taxpayers

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 yesterday, 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. Thus, plaintiff’s premise is flawed.”

The case is Wheatherford v. City of San Rafael, A138949.


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