Opinion
C095071
03-21-2023
SARAH DAYAOUN, Plaintiff and Appellant, v. THE JUDICIAL COUNCIL OF CALIFORNIA, Defendant and Respondent.
NOT TO BE PUBLISHED
(Super. Ct. No. 34-2018-00244378-CU-PDA-GPS)
Duarte, Acting P. J.
Through a series of ballot initiatives, California voters have limited the ability of the Legislature to impose new taxes by requiring that such new taxes be enacted by two-thirds of the Legislature. (Cal. Const., art. XIII A, § 3.) In 2010, the voters passed one of these initiatives, Proposition 26, which provided a definition of "tax" and codified various exceptions to article XIII A, section 3's requirements, including "[a] charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the State of conferring the benefit or granting the privilege to the payor." (Art. XIII A, § 3, subd. (b)(1).)
Further undesignated references to "article" are to the California Constitution.
As amended in 2012, Code of Civil Procedure section 631, subdivision (b) requires that civil litigants pay a nonrefundable $150 fee to preserve their right to a jury trial. Section 631, subdivision (b) provides that these "advance jury fees" offset the costs to the state of providing juries in civil cases. Failing to pay the advance jury fees results in the litigant waiving its right to a jury trial. (§ 631, subds. (b), (f)(5).)
Further undesignated statutory references are to the Code of Civil Procedure.
Following an automobile accident, plaintiff and appellant Sarah Dayaoun filed a complaint against the driver and owner of the other car involved in the accident. In addition, she brought a claim against defendant and respondent Judicial Council of California, asserting that she paid her advance jury fees under protest and claiming that the advance jury fees statute was an unconstitutionally enacted tax under article XIII A, section 3, and that requiring her to pay the fees to preserve her right to a jury trial violated her rights to due process and equal protection under the law.
Defendant responded that the advance jury fees are nontax fees under the exceptions to article XIII A, section 3's requirements. Following a bench trial, the court agreed with defendant and rejected plaintiff's claims.
On appeal, plaintiff challenges the trial court's ruling that advance jury fees are nontax fees exempt from article XIII A, section 3's requirements, and that the statute does not violate her right to equal protection. Considering only the narrow arguments presented to us in this appeal, we affirm the judgment.
FACTS AND PROCEEDINGS
Plaintiff's Complaint
Plaintiff was injured in an automobile accident. She filed a first amended complaint, which is the operative complaint, on December 13, 2018. The complaint alleged multiple causes of action against the driver and owner of the other car involved in the accident. Additionally, she asserted a cause of action against defendant, seeking declaratory relief. Plaintiff asserted that she had paid, under protest, a nonrefundable $150 advance jury fee to the trial court clerk to preserve her right to a jury trial, as required by section 631, subdivision (b). She claimed section 631, subdivision (b) was unconstitutional because it was not enacted by two-thirds of the Legislature, as required by article XIII A, section 3, and because it denied her rights to due process and to equal protection under the law.
On February 21, 2019, defendant demurred to the complaint on the basis that it failed to state facts sufficient to constitute a cause of action. The trial court overruled the demurrer, and defendant timely answered the complaint.
Following a one-day trial and posttrial supplemental briefing, the trial court took the matter under submission on June 1, 2021. On July 26, the court issued its tentative ruling and statement of decision rejecting plaintiff's claims. On August 11, plaintiff filed her objection to the tentative statement of decision, and the court adopted its tentative ruling and issued its statement of decision one day later. On August 26, the court entered judgment of dismissal in defendant's favor.
Plaintiff timely appealed. The case was fully briefed in August 2022 and was assigned to this panel on August 31, 2022. This court heard oral argument on January 20, 2023, and the case was deemed submitted thereafter.
DISCUSSION
I
Advance Jury Fees
Plaintiff first argues reversal is required because the trial court cited "case law preceding the adoption of Proposition 26 to determine the burden of proof." She next contends the trial court erred by applying an aggregate (as opposed to individual) approach to conclude the $150 fee is not a tax. Notably, plaintiff does not contend any of the factual findings and corresponding conclusions by the trial court regarding the cost of providing juries are erroneous.
Plaintiff argues in her briefing that the plain language of article XIII A, section 3 required defendant to present evidence that the nonrefundable $150 advance jury fees were no more than necessary to cover the costs incurred by the government related to her individual jury demand, and that the manner in which the advance jury fees were allocated to her bore a fair or reasonable relationship to the benefit she individually received, and burden she individually placed on, the jury system.
Although plaintiff expanded somewhat on her briefed arguments while presenting orally to this court, we do not consider arguments that are raised for the first time at oral argument. (See Haight Ashbury Free Clinics, Inc., v. Happening House Ventures (2010) 184 Cal.App.4th 1539, 1554, fn. 9; Palp, Inc. v. Williamsburg National Ins. Co. (2011) 200 Cal.App.4th 282, 291, fn. 2.)
We conclude the trial court undertook the correct analysis in applying an aggregate method; on this record, a more individualized approach was not required. As we will explain, Proposition 26 codified Sinclair Paint Co. v. State Board of Equalization (1997) 15 Cal.4th 866 (Sinclair Paint), and in that case our Supreme Court relied in large part on pre-Proposition 26 cases to clarify the scope of the allocation inquiry. (See City of San Buenaventura v. United Water Conservation District (2017) 3 Cal.5th 1191, 12131214 (United Water).) Plaintiff does not point to any specific instances in which the trial court incorrectly concluded she bore the burden of proof, and we have found none. We conclude an individualized inquiry was not required in this case and affirm the trial court's ruling.
In a footnote, defendant asserts that plaintiff's claim was resolved by the judgment entered in a separate class action, and it contends in a request for judicial notice that her claims are barred by the equitable doctrines of res judicata and/or collateral estoppel. But defendant fails to provide any analysis of the issue, asserting only that plaintiff "qualified as a member" of the certified class. Accordingly, we decline to consider this argument. (See Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 [issue is waived when raised by not supported by reasoned argument and citations to authority].) Further, we deny defendant's pending request for judicial notice, as the additional documents are not necessary to resolve this appeal. (See Hughes Electronics Corp. v. Citibank Delaware (2004) 120 Cal.App.4th 251, 266, fn. 13 ["As a general matter, judicial notice is not taken of matters irrelevant to the dispositive points on appeal"].)
A. Standard of Review
On appeal from a judgment based on a statement of decision after a bench trial, we review questions of law de novo. (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981.) "We apply a substantial evidence standard of review to the trial court's findings of fact. [Citation.] Under this deferential standard of review, findings of fact are liberally construed to support the judgment and we consider the evidence in the light most favorable to the prevailing party, drawing all reasonable inferences in support of the findings." (Ibid.)"' "The substantial evidence [standard of review] applies to both express and implied findings of fact made by the superior court in its statement of decision rendered after a nonjury trial." [Citation.]' [Citation.] 'The testimony of a single witness may be sufficient to constitute substantial evidence.'" (Citizens Business Bank v. Gevorgian (2013) 218 Cal.App.4th 602, 613.) "Testimony may be rejected only when it is inherently improbable or incredible, i.e.' "unbelievable per se,"' physically impossible or' "wholly unacceptable to reasonable minds."" " (Oldham v. Kizer (1991) 235 Cal.App.3d 1046, 1065.)"' "The ultimate determination is whether a reasonable trier of fact could have found for the respondent based on the whole record." '" (McPherson v. EF Intercultural Foundation, Inc. (2020) 47 Cal.App.5th 243, 257.)
"A judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness." (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.) As the party challenging the lower court's judgment, plaintiff must demonstrate as a matter of law that the advance jury fees are invalid taxes. (California Building Industry Association v. State Water Resources Control Board (2018) 4 Cal.5th 1032, 1050 (California Building Industry).
B. Section 631, Subdivision (b)
Prior to July 10, 2000, section 631 provided that a trial by jury may be waived in civil cases by failure to deposit "advance jury fees" in an amount not to exceed the average mileage and per diem fees of 20 jurors for one day. (See former § 631, subd. (a)(5); Stats. 1999, ch. 83, § 24.) Effective July 10, 2000, the Legislature amended section 631 to limit the amount of advance fees required to secure a jury trial to a total of $150. (Former § 631, subd. (a)(5); Stats. 2000, ch. 127, § 2.) In 2002, the Legislature reorganized section 631, moving the advance jury fees provision to subdivision (b). (Former § 631, subd. (b); Stats 2002, ch. 806, § 15.)
Effective September 17, 2012, Assembly Bill No. 1481 (2011-2012 Reg. Sess.) (Assembly Bill No. 1481) amended section 631, subdivision (b) to provide in relevant part: "At least one party demanding a jury on each side of a civil case shall pay a nonrefundable fee of one hundred fifty dollars ($150), unless the fee has been paid by another party on the same side of the case. The fee shall offset the costs to the state of providing juries in civil cases." (Stats. 2012, ch. 342, § 1.) Thus, effective 2012, the advance jury fees became nonrefundable, and payment was no longer a deposit against per diem jury fees, but rather an offset to the cost to the state of providing civil juries. Assembly Bill No. 1481 passed both houses of the Legislature by a majority vote.
All fees collected by the courts under section 631, subdivision (b) are transmitted to the State Treasury for deposit in the Trial Court Trust Fund. (Code Civ. Proc., § 631, subd. (h).) "The Trial Court Trust Fund is used 'to fund trial court operations,' [citation], which includes costs for jury services." (Templo v. State of California (2018) 24 Cal.App.5th 730, 735.) The Judicial Council is responsible for administering and controlling funds allocated to the judicial branch, including the Trial Court Trust Fund. (Id. at p. 737, citing Gov. Code, §§ 68085, subd. (a)(2)(A) ["the Judicial Council may authorize the direct payment or reimbursement or both of actual costs from the Trial Court Trust Fund . . . to fund the costs of operating one or more trial courts"]; 68502.5, subd. (c)(1) [the "Judicial Council shall retain the ultimate responsibility to adopt a budget and allocate funding for the trial courts"]; 77206, subd. (a) ["the Judicial Council may regulate the budget and fiscal management of the trial courts"].)
C. Proposition 13 and Sinclair Paint
In 1978, California voters passed Proposition 13, adding article XIII A to the California Constitution. (California Building Industry, supra, 4 Cal.5th at p. 1045.) One purpose of Proposition 13 was to place restrictions on state taxes. (California Building Industry, at p. 1045.) As originally adopted, section 3 of article XIII A provided in relevant part that" 'any changes in State taxes enacted for the purpose of increasing revenues collected pursuant thereto . . . must be imposed by an Act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature.'" (California Building Industry, at p. 1045; art. XIII A, former § 3.) The term "tax" was not defined by Proposition 13, and, as "a result, determining whether a levy was a fee or a tax became 'a recurring chore' for California courts." (California Building Industry, at p. 1045.)
In Sinclair Paint, supra, 15 Cal.4th 866, our Supreme Court described the distinction between taxes, which require approval of two-thirds of the Legislature, and regulatory and other fees, which do not. The court explained that, "[i]n general, taxes are imposed for revenue purposes, rather than in return for a specific benefit conferred or privilege granted," and "[m]ost taxes are compulsory rather than imposed in response to a voluntary decision to develop or to seek other government benefits or privileges." (Id. at p. 874.) The court concluded that "a levy only qualifies as a regulatory fee if (1) the amount of the fee does not exceed the reasonable costs of providing the services for which it is charged, (2) the fee is not levied for unrelated revenue purposes, and (3) the amount of the fee bears a reasonable relationship to the burdens created by the fee payers' activities or operations." (California Building Industry, supra, 4 Cal.5th at p. 1046, citing Sinclair Paint, at p. 881.)
D. Proposition 26
On November 2, 2010, the voters approved Proposition 26, which amended article XIII A, section 3. Proposition 26 was enacted to close perceived loopholes in Proposition 13 and to categorize as taxes "fees 'couched as "regulatory" but which exceed the reasonable costs of actual regulation or [which] are simply imposed to raise revenue for a new program and are not part of any . . . permitting program.'" (California Building Industry, supra, 4 Cal.5th at p. 1047.)
"[T]he language of Proposition 26 is drawn in large part from pre-Proposition 26 case law distinguishing between taxes subject to the requirements of article XIII A, on the one hand, and regulatory and other fees, on the other." (United Water, supra, at p. 1210.) Specifically, Proposition 26 codified Sinclair Paint's conclusion that a fee does not become a tax subject to article XIII A unless it" '" 'exceed[s] the reasonable cost of providing services . . . for which the fee is charged,'" '" and that"' "the basis for determining the manner in which the costs are apportioned"' should demonstrate that' "charges allocated to a payor bear a fair or reasonable relationship to the payor's burdens on or benefits from the regulatory activity." '" (United Water, at p. 1210, see art. XIII A, § 3, subd. (b)(1), (2).)
The court in United Water observed that, while Proposition 26 codified Sinclair Paint in significant part, it "describes categories of charges imposed for reasonable regulatory costs in a manner that 'does not mirror our discussion of such costs in Sinclair Paint.'" (United Water, supra, 3 Cal.5th at p. 1210, fn. 7.) We have no occasion to address the extent of the difference.
As amended by Proposition 26, section 3 of article XIII A now provides that "[a]ny change in state statute which results in any taxpayer paying a higher tax must be imposed by an act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature, except that no new ad valorem taxes on real property, or sales or transaction taxes on the sales of real property may be imposed."
Section 3, subdivision (b) of article XIII A provides the applicable definition of "tax." "As used in this section, 'tax' means any levy, charge, or exaction of any kind imposed by the State."
Section 3, subdivision (b) of article XIII A includes five exceptions to the definition of "tax," two of which, codifying Sinclair Paint, are relevant here: "(1) A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the State of conferring the benefit or granting the privilege to the payor"; and "(2) A charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the State of providing the service or product to the payor." (Art. XIII A, § 3, subd. (b)(1), (2).)
Section 3, subdivision (d) of article XIII A provides: "The State bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor's burdens on, or benefits received from, the governmental activity."
This provision does not impose substantive requirements beyond those stated in article XIII A, section 3, subdivision (b); rather, it is a burden shifting provision in response to Sinclair Paint, supra, 15 Cal.4th at page 878, which held that a plaintiff challenging a fee bears the burden of making a prima facie showing that the fee is invalid. (Howard Jarvis Taxpayers Assn. v. Bay Area Toll Authority (2020) 51 Cal.App.5th 435, 461.)
Accordingly, under article XIII A, section 3, as amended by Proposition 26, a levy must satisfy two separate requirements to avoid being characterized as a tax. First, under the "aggregate cost inquiry," the total fees, in the aggregate, must not exceed the reasonable costs of the program, and the statutory scheme must not authorize fees for general revenue purposes rather than for purposes of funding activities performed of supporting the relevant program. (United Water, supra, 3 Cal.5th at pp. 1211-1212, 1213, citing California Farm Bureau Federation v. State Water Resources Control Bd. (2011) 51 Cal.4th 421, 438 (Farm Bureau)). Within the aggregate cost inquiry," '[t]he question of proportionality is not measured on an individual basis,' but is instead 'measured collectively.'" (United Water, at p. 1213, quoting Farm Bureau, at p. 438.)
Second, and separately, under the "allocation inquiry," the court must address "whether 'the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor's burdens on, or benefits received from, the governmental activity.'" (United Water, supra, 3 Cal.5th at p. 1213.)
E. Aggregate Cost Inquiry
Plaintiff argues the trial court erred in utilizing the aggregate cost inquiry, insisting that a more personalized approach was constitutionally required. She contends that "the 'aggregate cost analysis' does not apply because Proposition 26 clearly requires an 'allocation' method for determining if the charge is exempt under Article XIII A § 3 (b)(1) and (d)." We disagree with the assertion that the trial court's decision to apply the aggregate cost inquiry was error.
After the bench trial regarding the aggregate cost inquiry, the trial court concluded that defendant "met its burden of establishing that the total of the nonrefundable fee collected under section 631[, subdivision] (b) does not exceed the total, reasonable cost to the state of maintaining and administering jury services, and that the fee is not levied for revenue purposes unrelated to the activity for which the fee is charged, i.e., to help offset the costs to the state of providing juries in civil cases."
In support of its conclusion, the court made the following factual findings, which plaintiff does not challenge.
The primary purpose of the nonrefundable $150 fee was to offset the costs to the state of providing juries in civil cases. (See § 631, subd. (b) ["The fee shall offset the costs to the state of providing juries in civil cases"].) The statewide court budget was estimated to have a $300 million shortfall in fiscal year 2012-2013, and the nonrefundable $150 fee was projected to generate about $12 million per year to help address the shortfall. Defendant received approximately $11.6 million to $17.9 million in nonrefundable jury demand fees annually between fiscal year 2012-2013 and fiscal year 2019-2020, while the statewide cost of jury services during that same timeframe as reported to defendant by the 58 superior courts ranged between $44.7 million and $54.2 million annually. Specifically regarding the Sacramento Superior Court, where plaintiff's case was pending, and to which she paid her $150 advance jury fee, the court received in the range of $394,405 to $530,520 in nonrefundable jury fees annually between fiscal year 2015-2016 and fiscal year 2019-2020, while the cost of providing jury services for any genre of case in need of a jury during that same time period was in the range of $1.6 million annually. Accordingly, the cost of maintaining and administering jury services is three to four times more than the total amount collected from civil litigants in advance jury fees. Additionally, there are ongoing costs associated with the provision of jury services that are not specifically accounted for, including, without limitation, personnel and infrastructure costs. Finally, advance jury fees collected by the court are transmitted to the State Treasury for deposit in the Trial Court Trust Fund (§ 631, subd. (h)), which is used to fund trial court operations, including costs for jury services (Templo v. State of California, supra, 24 Cal.App.5th at p. 735).
Thus, the undisputed evidence demonstrated that the total amount collected was three to four times less than the total cost to the state of maintaining jury services. There is no evidence that the advance jury fees collected exceeded the total cost of maintaining jury services, or that the advance jury fees were allocated to a government program other than jury services. Accordingly, although the evidence demonstrated that the advance jury fees may have been motivated by a budget shortfall, the evidence showed that the fees were allocated to providing juries, the activity for which the fee was charged.
Plaintiff does not challenge these findings and conclusions, nor is there an articulated challenge to the sufficiency of this particular inquiry itself. As pointed out by defendant's briefing, plaintiff does not brief any meaningful challenge to the trial court's factual findings and other conclusions reached during its application of the aggregate cost inquiry, but merely disputes the necessity of any application of the inquiry whatsoever. As we have explained ante, such inquiry is indeed applicable to a challenge such as this.
We see no error in the trial court's decision to undertake an aggregate cost inquiry; plaintiff's argument to the contrary is completely unsupported and fails to persuade.
F. Allocation Inquiry
Plaintiff argues primarily that the trial court misapplied this inquiry, although she appears to agree that the method itself was properly deployed. We disagree that the inquiry was conducted in an erroneous manner.
Section 3, subdivision (b)(1) of article XIII A provides that a nontax fee is imposed "for a specific benefit conferred or privilege granted directly to the payor . . . which does not exceed the reasonable costs to the State conferring the benefit or granting the privilege to the payor." Plaintiff argued in the trial court, and argues again on appeal, that the plain language of section 3, subdivision (b)(1) of article XIII A required that the manner in which the fee is allocated to the payor required a fair or reasonable relationship between the costs incurred by the government related to her individual jury demand, the benefit she personally received from the government program, or the burden she personally put on the government program.
The trial court disagreed. It observed: "Case law generally establishes that' "[t]he question of proportionality is not measured on an individual basis. Rather, it is measured collectively, considering all rate payors." (American Coatings [Assn., Inc. v. State Air Resources Bd. (2021) 62 Cal.App.5th 1111, 1128].) The state need not prove, and the court need not examine, the benefits to be derived by each individual payor. (See[,] e.g.[,] [California Assn. of Professional Scientists v. Department of Fish &Game (2000)] 79 Cal.App.4th [935,] 948; Farm Bureau, [supra,] 51 Cal.4th at [p.] 438 ['permissible fees . . . need not be finely calibrated to the precise benefit each individual fee payor might derive ....'].) [¶] 'A fee is valid if there is a reasonable basis in the record for the allocation. ([California] Building Industry, supra, [4 Cal.5th] at p. 1052.)' (American Coatings, [at p. 1128]. 'The record need only demonstrate a reasonable relationship, not an exact relationship.' (Ibid.) '[Courts] employ a flexible assessment of proportionality within a broad range of reasonableness in determining the constitutionality of fee[s].' (Ibid., internal quotations omitted.)"
The trial court concluded the Legislature intended the nonrefundable $150 fee to offset generally the cost of the statewide jury system, the maintenance of which was necessary to provide juries in civil cases, and not just the expense of the particular jury services provided to the party paying the fee. The court observed that in fiscal year 20182019, during which plaintiff paid her advance jury fee, 90,192 civil litigants paid advance jury fees to preserve their right to a jury trial, and found the high number of payors made it impossible to assess an individual litigant's precise burden on jury services or benefit to each individual payor gained from paying the fee.
Thus, the trial court concluded that defendant satisfied its burden under the allocation inquiry by demonstrating "that the amount of the fees collected under section 631[, subdivision] (b) does not exceed the cost of the administering jury services and providing juries in civil cases, that every civil litigant entitled to a jury trial must pay the same nonrefundable fee to preserve their jury trial right, and that all such litigants are equally shouldering a portion of the costs associated with jury services. It matters not whether they actually proceed to trial." In a footnote, the court recognized that civil litigants with insufficient means to pay court fees may apply for a waiver of such fees. (Gov. Code, § 68630 et seq.; Cal Rules of Court, rule 3.50 et seq.)
Plaintiff does not challenge the trial court's factual findings and conclusions on appeal, but contends that the plain language article XIII A, section 3 "could not be clearer" that the individual payor must receive a benefit from, or place a burden on, the governmental activity. However, plaintiff offers no statutory interpretation analysis of the relevant text. In her reply, she points to two cases she asserts support her position that an individualized allocation inquiry is required here: United Water, supra, 3 Cal.5th at pages 1210 to 1214, and Newhall County Water Dist. v. Castaic Lake Water Agency (2016) 243 Cal.App.4th 1430 (Newhall). As we next explain, neither case supports her position.
In United Water, the plaintiff city claimed a groundwater pumping charge violated article XIII C, as amended by Proposition 26. The city argued in part that it did not receive the same benefit from the defendant water district's activities as other pumpers and that it bore a disproportionate share of the fiscal burden by virtue of a Water Code provision requiring it and other nonagricultural users to pay three times the rate of agricultural users. (United Water, supra, 3 Cal.5th at p. 1211, citing Wat. Code, § 75594.) In establishing the parameters of the allocation inquiry, our Supreme Court turned to Farm Bureau, supra, 51 Cal.4th at pages 436 to 437, which the court observed did not alter the Sinclair Paint framework. (United Water, supra, 3 Cal.5th at p. 1213.) In Farm Bureau, the court first addressed the aggregate cost inquiry, in which the question of proportionality is not measured individually, but rather collectively. (United Water, at p. 1213, citing Farm Bureau, at p. 438.) The Farm Bureau court then turned to the allocation inquiry, which, in that case, addressed the plaintiffs' argument that the fees were disproportionate to the benefit derived by the fee payors, or the burden they place on the regulatory system, by virtue of the fact that, as a practical matter, 40 percent of water rights holders would be responsible for funding 100 percent of governmental activities that benefit all water rights holders and the general public. (United Water, at p. 1213, citing Farm Bureau, at p. 440.) In Farm Bureau, our Supreme Court remanded to the Court of Appeal to properly address the allocation inquiry, and the United Water court recognized that the Court of Appeal had missed an essentially identical question in that case. (United Water, at p. 1213, citing Farm Bureau, at p. 442.)
Article XIII C restricts local governments' ability to increase taxes in similar ways that article XIII A restricts the state government's ability to increase taxes. As relevant here, Proposition 26 made amendments to article XIII C that are nearly identical to the amendments the proposition made to article XIII A, including by adding a new definition of "taxes" and by establishing the exceptions relevant here.
In considering the scope of the allocation inquiry, the United Water court recognized: "[P]re-Proposition 26 case law made clear that, '[i]n pursuing a constitutionally and statutorily mandated conservation program, cost allocations for services provided are to be judged by a standard of reasonableness with some flexibility permitted to account for system-wide complexity.' [Citation.] Article XIII A, the cases held, 'does not apply to every regulatory fee simply because, as applied to one or another of the payor class, the fee is disproportionate to the service rendered.' [Citation.] Courts thus held that an agency could, for example, charge a flat filing fee to defray the costs of agency environmental review, even though review of some documents undoubtedly required a greater expenditure of agency resources than others. [Citation.] But the case law did not suggest that the constitutionality of a fee for a government service, for example, depended solely on whether the fees collected, in the aggregate, exceeded the aggregate amount necessary to provide the service to affected payors. [Citation.] Nor did the cases suggest that the constitutional framework was otherwise indifferent to allegations that a government agency lacked any reasonable basis for charging a higher fee to some payors than others." (United Water, supra, 3 Cal.5th at pp. 1213-1214.) Recognizing this background, and the fact that Proposition 26 clearly required that a nontax fee satisfy both the aggregate cost and allocation inquiries, the court remanded for consideration of the city's argument that it did not receive the same benefit from the defendant's activities as other pumpers, and that it was required to bear a disproportionate share of the fiscal burden. (Id. at p. 1214.)
In her reply brief, plaintiff refers to the Court of Appeal's opinion on remand from United Water. In that opinion, the court concluded that a statutory requirement of at least a three-to-one ratio of fees on nonagricultural use of groundwater to such fees on agricultural use of groundwater did not bear "a reasonable relationship to the burdens on or the benefits of [the defendant water district's] conservation activities, as article XIII C requires." (City of San Buenaventura v. United Water Conservation District (2022) 79 Cal.App.5th 110, 120-121.) Further discussion of that case is not necessary to our resolution of the issues on appeal here.
In Newhall, supra, 243 Cal.App.4th 1430, the appellate court concluded that the defendant water agency could not recoup its costs via a fixed water rate component where that fixed rate component was based on the purchaser's use of a product--groundwater--that was not actually provided by the defendant. The court observed that the defendant "cannot, consistent with Proposition 26, base its wholesale water rates on the retailers' use of groundwater, because the [defendant] does not supply groundwater." (Id. at p. 1441.) Additionally, Newhall recognized that Proposition 26 "requires by its terms an allocation method that bears a reasonable relationship to the payor's burdens on or benefits from the [governmental entity's] activity, which here consists of wholesale water service to be provided 'directly to the payor.' In the context of wholesale water rates to four water agencies, this necessarily requires evaluation on a 'purveyor by purveyor' basis." (Newhall, at p. 1446.) But the court recognized that in the context of a regulatory fee applicable to numerous payors, "it would be impossible to assess such fees based on the individual payor's precise burden on the regulatory program." (Ibid.)
Neither United Water nor Newhall supports plaintiff's position. Certainly, we would agree that an individualized relationship under section 3 of article XIII A is required where there are only a few fee payors, as in Newhall, but those are not our facts. Instead, Newhall recognized that the allocation inquiry is context-dependent and that, where there are numerous payors--as here--such an individualized inquiry is not required. Similarly, United Water recognized authority concluding that cost allocations" 'are to be judged by a standard of reasonableness with some flexibility permitted to account for system-wide complexity,'" and article XIII A" 'does not apply to every regulatory fee simply because, as applied to one or another of the payor class, the fee is disproportionate to the service rendered.'" (United Water, supra, 3 Cal.5th at p. 1213.)
Again, plaintiff does not challenge the trial court's conclusions, but only its failure to undertake an individualized allocation inquiry as opposed to the broader inquiry actually completed. As we have explained ante, the specific and personalized inquiry demanded by plaintiff was not required in this case. Failure to determine plaintiff's personal and individualized benefit and burden, respectively, with regard to payment of the fee, was not error.
As we have explained ante, we do not consider arguments that were raised for the first time at oral argument.
We conclude plaintiff has failed to demonstrate that the nonrefundable $150 advance jury fee is a tax as a matter of law.
II
Equal Protection
Plaintiff next contends that the trial court erred by concluding that section 631, subdivision (b) did not violate her constitutional right to equal protection under the law. She asserts that her right to a jury trial is a fundamental right, and, therefore, the court erred by concluding that plaintiff, rather than defendant, had the burden of proof and that she failed to satisfy her burden. As we will explain, plaintiff has failed to challenge the trial court's dispositive basis for denying her equal protection claim, and, accordingly, we conclude she has failed to demonstrate error. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564 [A judgment or order of the lower court is presumed correct;" 'error must be affirmatively shown' "].)
A. Equal Protection Principles
The United States and California Constitutions prohibit denial of equal protection of the laws. (U.S. Const., 14th Amend.; Cal Const., art. 1, § 7, subd. (a).) The state constitutional guarantee is independent of the federal guarantee, but, except in cases of gender, the state and federal guarantees are applied identically. (Connerly v. State Personnel Bd. (2001) 92 Cal.App.4th 16, 31-32.) The equal protection clause requires the state to treat all persons similarly situated alike or, conversely, to avoid all classifications that are "arbitrary or irrational" and those that reflect" 'a bare . . . desire to harm a politically unpopular group.'" (City of Cleburne v. Cleburne Living Ctr., Inc. (1985) 473 U.S. 432, 446, 447.)
"To succeed on an equal protection claim, [plaintiff] must first show that the state has adopted a classification that affects two or more similarly situated groups in an unequal manner." (People v. Edwards (2019) 34 Cal.App.5th 183, 195.) We do not inquire "whether persons are similarly situated for all purposes, but 'whether they are similarly situated for purposes of the law challenged.'" (Cooley v. Superior Court (2002) 29 Cal.4th 228, 253.) "The use of the term 'similarly situated' in this context refers only to the fact that' "[t]he Constitution does not require things which are different in fact or opinion to be treated in law as though they were the same." . . .' [Citation.] There is always some difference between the two groups which a law treats in an unequal manner since an equal protection claim necessarily asserts that the law in some way distinguishes between the two groups. Thus, an equal protection claim cannot be resolved by simply observing that the members of group A have distinguishing characteristic X while the members of group B lack this characteristic. The 'similarly situated' prerequisite simply means that an equal protection claim cannot succeed, and does not require further analysis, unless there is some showing that the two groups are sufficiently similar with respect to the purpose of the law in question that some level of scrutiny is required in order to determine whether the distinction is justified." (People v. Nguyen (1997) 54 Cal.App.4th 705, 714.)
Where the two groups are similarly situated, the high court under federal law has prescribed different levels of scrutiny depending on whether the law "targets a suspect class." (Romer v. Evans (1996) 517 U.S. 620, 631.) "At a minimum, a statutory classification must be rationally related to a legitimate government purpose. [Citations.] Classifications based on race or national origin [citation], and classifications affecting fundamental rights [citation] are given the most exacting scrutiny. Between these extremes of rational basis review and strict scrutiny lies a level of intermediate scrutiny, which generally has been applied to discriminatory classifications based on sex or illegitimacy." (Clark v. Jeter (1988) 486 U.S. 456, 461; Connerly v. State Personnel Bd., supra, 92 Cal.App.4th at pp. 31-32, citing United States v. Virginia (1996) 518 U.S. 515, 532.)
B. Analysis
Plaintiff contends the trial court erred by concluding that she failed to satisfy her burden of proof because her right to a jury trial is a fundamental right, and, therefore, the State had the burden of proof. But the trial court concluded that plaintiff failed to meet her initial burden to show that section 631, subdivision (b) discriminates against an identifiable class of persons; in other words, that the law treats similarly situated groups differently. The court recognized that section 631, subdivision (b) requires all civil litigants to pay the nonrefundable $150 fee to preserve their jury trial right, and thus all civil litigants are treated equally. Plaintiff does not address this dispositive conclusion by the trial court; accordingly, she has failed to demonstrate error.
DISPOSITION
The judgment is affirmed. Defendant is entitled to its costs. (Cal. Rules of Court, rule 8.278(a).)
I concur:
Hoch, J. [*]
RENNER, J., Concurring.
Plaintiff raises two arguments on appeal: (1) the trial court did not apply the constitutional standard for determining whether the fee was a tax because it applied case law that preceded the adoption of Proposition 26; and (2) the defendant had the burden of showing there was no other way to create revenue to address the budget shortfall other than by amending Code of Civil Procedure section 631. The majority implicitly concludes that part of the first argument is an assertion that the trial court erred by failing to analyze the benefit she individually received and the burden she individually placed on the jury system. (Maj. opn. ante, at p. 4.) I agree with the majority's conclusion that none of these arguments have merit. Accordingly, I concur in the result reached by the majority.
[*]Retired Associate Justice of the Court of Appeal, Third Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.