Thursday, April 12, 2018
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Ninth Circuit:
California Statute Requiring Posting of Names of ‘Top 500’ Delinquent Taxpayers Is Constitutional
Law Mandating Drivers’ License Suspensions of Those on List Also Upheld
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday upheld the constitutionality of California statutes that require the posting of the state’s top 500 delinquent taxpayers and yanking their drivers’ licenses.
In an opinion by Senior Judge Barrington Daniels Parker Jr., it rejected challenges by Los Angeles attorney Ernest J. Franceschi Jr. to Revenue and Taxation Code §19195, which requires the Franchise Tax Board (“FTB”) to publish a list of major tax debtors at least twice each year, and Business and Professions Code §494.5, which requires state licensing agencies, such as the Department of Motor Vehicles, to suspend licenses of those on the list.
The State Bar is not subject to the license-lifting requirement, but may take the failure to pay taxes into account. No disciplinary action is pending against Franceschi.
Yesterday’s opinion affirms the dismissal of his action for declaratory and injunctive relief by District Court Judge Christina A. Snyder of the Central District of California.
The opinion notes that Franceschi has failed to file state income tax returns between 1995 and 2012 owes $242,276.73 in back taxes.
Due Process Contention
The lawyer argued that he was denied procedural due process owing to the lack of opportunity to argue in advance against the snatching of his driver’s license. Parker responded:
“Franceschi’s arguments overlook the fact that he had a readily available, constitutionally valid, pre-deprivation opportunity to prevent the suspension of his license. After receipt of the notice of revocation and before his license was suspended, Franceschi could have challenged his threatened suspension by paying his taxes and filing a refund claim with the FTB….The payment of his tax liability would have allowed him to retain his driver’s license. He would then have the opportunity to file a refund claim and challenge the original tax assessment. In the event the FTB denied his refund claim, he could still obtain relief by suing for a refund in California Superior Court.
“Courts have consistently held that pay first, litigate later procedures such as these satisfy due process in the context of tax collection.”
Burdening Law Practice
Franceschi also contended that the deprivation of a driver’s license impermissibly burdens his ability to practice law. Parker disagreed, declaring:
“This contention has no merit for the obvious reason that the revocation of his driver’s license does not operate as a complete prohibition on his ability to practice law, which it must to violate substantive due process. Franceschi attempts to sidestep this straightforward requirement by arguing that a driver’s license is ‘indispensable’ to the practice of law while at the same time conceding that ‘it may be possible to get to some courts on a bus or other public transportation.’ He nevertheless argues doing so would be burdensome and time consuming. No doubt an inability to drive oneself around Los Angeles could make the practice of law more difficult. However, Franceschi still has access to public transit, taxis, or services such as Lyft or Uber. Accordingly, whatever burden may exist does not amount to a ‘complete prohibition’ on Franceschi’s ability to practice law, and thus, does not rise to a violation of substantive due process.”
Various other constitutional assaults on the statutes were rebuffed, and the argument raised for the first time on appeal that his right to privacy is invaded by publishing his name on the “top 500” was not considered.
Franceschi’s Comment
Franceschi commented yesterday:
“The principal argument that I advanced, and was completely ignored in the opinion is that in order to comport with due process the statute must provide for a hearing contemporaneously with the license deprivation (either before or after). While there was an opportunity for a hearing on the assessments at one point in time, there is no opportunity for a hearing commensurate with the deprivation. This is the reason the statute violates due process both on its face and as applied. The Court does not even discuss this. The fact that one can “pay and sue for a refund” does not make the statute constitutional. I think the Court got it wrong and we are considering seeking en banc review.”
The case is Franceschi v. Yee, No. 14-56493.
State Court Action
Snyder dismissed Franceschi’s action on Aug. 4, 2014. On March 18, 2015, he brought an action in Los Angeles Superior Court seeking a writ of mandate ordering members of the FTB to remove his name from the “Top 500” list.
Then-Los Angeles Superior Judge Joanne O’Donnell (now retired) sustained a demurrer with leave to amend; Franceschi did not amend; the action was dismissed. O’Donnell also imposed a $5,000 sanction on the lawyer based on the frivolousness of his action.
Div. One of this district’s Court of Appeal on July 8, 2016, affirmed in an opinion by Justice Jeffrey Johnson, on the ground that “the petition was barred by the doctrine of res judicata.”
At the time that decision was filed, it was determined that Franceschi was not on the “top 500” list on the FTB’s website. He was not on that list, as of yesterday.
However, names of four Los Angeles County lawyers were on the list (indicating a debt of at least $100,000). They are Milton Grimes and Elizabeth P. Tyler of the City of Los Angeles, Devan D. Beck of Malibu, and Andrew Weissman of Culver City.
Copyright 2018, Metropolitan News Company